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Speaker 2: Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast.
Speaker 2: Well lots of big news this week. The conflict in
Speaker 2: the Middle East entered a dangerous new phase. Jd Vance
Speaker 2: and Tim Walls squared off in what is likely the
Speaker 2: final debate of the twenty twenty four campaign. Dock workers
Speaker 2: along the US East and Gulf coasts went on strike
Speaker 2: for the first time since nineteen seventy seven, as the
Speaker 2: union took a hardline stance against automation found at other
Speaker 2: ports around the world.
Speaker 3: All topped off with the September jobs report on Friday
Speaker 3: that followed comments earlier in the week by fed share
Speaker 3: Jay Powell about a solid labor market but noting that
Speaker 3: conditions have quote clearly cooled over.
Speaker 4: The past year.
Speaker 3: Check out the latest on everything from the economy, to
Speaker 3: the presidential campaigns to geopolitics on the Bloomberg Terminal or
Speaker 3: at Bloomberg dot Com.
Speaker 2: This hour we tackled geopolitics and the US political divide
Speaker 2: thanks to two new books. One gets into the psychological
Speaker 2: roots of tribalism and how the things that keep us
Speaker 2: apart can actually bring us closer together. The other book,
Speaker 2: Timely Considering the escalating tensions of the Middle East, takes
Speaker 2: us back to nineteen twenty nine and Ghosts of a
Speaker 2: Holy War.
Speaker 3: Plus this week we got our own read on the
Speaker 3: consumer when we caught up with Josh Weinstein, the CEO
Speaker 3: of Carnival. All of that to come, we begin with
Speaker 3: the escalating conflict in the Middle East. This coming week
Speaker 3: marks the one year anniversary of Hamas's attack on Israel.
Speaker 2: Much has happened, including this past week Iran's ballistic missile
Speaker 2: attack on Israel. As we recorded this, the world was
Speaker 2: awaiting a possible Israeli response against Iran. One conversation we
Speaker 2: had on the conflict took us back to nineteen twenty
Speaker 2: nine and came courtesy of your Denna Schwartz, an Award
Speaker 2: winning journalist and Emmy nominated producer her new book, Ghosts
Speaker 2: of a Holy War. Teen twenty nine massacre in Palestine
Speaker 2: that ignited the Arab Israeli conflict.
Speaker 5: The events we're seeing today in which there is already
Speaker 5: this broader war against Israel by Iran and its proxies
Speaker 5: in the region, really shows us that this is not
Speaker 5: a conflict about land as it has been treated for decades.
Speaker 5: This is a holy war, as I argue in my book,
Speaker 5: and it needs to be looked at as such. And
Speaker 5: we see that very clearly now in which this war
Speaker 5: is not just between Israelis and Palestinians, it is between
Speaker 5: Iran and its proxies in Yemen, Lebanon, Syria, Iraq. For
Speaker 5: the last year, this didn't just start as you said,
Speaker 5: you know, yesterday or last week. It's been going on
Speaker 5: one century ago with a massacre and what was then
Speaker 5: British mandate Palestine.
Speaker 2: Well take us back to nineteen twenty nine, because it
Speaker 2: does feel like we need to understand the history, and
Speaker 2: I feel like we continue to be kind of on
Speaker 2: a history life, and for those of us not either
Speaker 2: from the region, born in the region, lived in the region,
Speaker 2: or have some personal impact from it, you know, we're
Speaker 2: constantly kind of studying to understand the complicated nature. Somebody
Speaker 2: said very simplistically to me, well, it's kind of like
Speaker 2: gang wars to some extent because you have so many
Speaker 2: different groups. How do you see it and how does
Speaker 2: going back to nineteen twenty nine take us back there
Speaker 2: in terms of what happened.
Speaker 5: Yeah, so, so many people begin their conversations around the
Speaker 5: origins of this war with years like nineteen sixty seven
Speaker 5: or nineteen forty eight, but this conflict began long before that,
Speaker 5: actually two decades before.
Speaker 6: We see the emerging.
Speaker 5: Of the driving forces behind this conflict today, and those
Speaker 5: forces our religion, as I said before, but also disinformation,
Speaker 5: and it was a campaign of disinformation that led to
Speaker 5: this horrific massacre of one of the world's most ancient
Speaker 5: Jewish communities in Hebron in what was then British and
Speaker 5: Date Palestine in nineteen twenty nine. And my book Elucidates
Speaker 5: and Gripping detail the parallels between that massacre one century
Speaker 5: ago and the massacre of October seventh.
Speaker 3: Why do you think so many modern conversations about the
Speaker 3: history of the region, at least the modern history, start
Speaker 3: in nineteen forty eight and don't go back to nineteen
Speaker 3: twenty nine.
Speaker 5: Yeah, that's an excellent question, And I think it comes
Speaker 5: down to people not really being able to wrap their
Speaker 5: heads around what is really complicated and a conflict that
Speaker 5: has such a long history, and so they try to
Speaker 5: look at it in the simplest way possible.
Speaker 6: And it makes sense then to begin.
Speaker 5: That story in nineteen forty eight, But that's like beginning
Speaker 5: a story in the middle, because you see the emergence
Speaker 5: of what has become a very prominent lie that is
Speaker 5: told around alak samosque it is the third holiest site
Speaker 5: in Islam, and it sits upon the ruins of the
Speaker 5: ancient Jewish temples in Jerusalem, and that the temple is
Speaker 5: the holiest site in Judaism, and that kind of tells
Speaker 5: you why religion plays such a big role in this conflict.
Speaker 5: But the rumor that is still told by Muslim leaders
Speaker 5: today is that the Jews of what was then Palestine
Speaker 5: were planning to conquer Al Alczamosk. That was the lie
Speaker 5: that led to the massacre of nineteen twenty nine, and
Speaker 5: that lie continues to be told today by groups like
Speaker 5: Hamas the Iitola of Iran Hezbadah. And you can just
Speaker 5: look at the name that Hamas gave to its operation
Speaker 5: on October seventh. It was called Alaksa flood because this
Speaker 5: lie about the Jews of Palestine in nineteen twenty nine
Speaker 5: or today Israel. This lie that they're trying to conquer
Speaker 5: all Okzamosk to rebuild the ancient Jewish Temple is such
Speaker 5: a powerful force, a galvanizing force in the region, and
Speaker 5: corrupt leaders like the leader of Palestinian Muslims under British
Speaker 5: rule in nineteen twenty nine, have managed to distract criticism
Speaker 5: of corruption, nepotism, misappropriation of funds. For the last century.
Speaker 5: They've been able to distract their people from their own
Speaker 5: failures by holding on to this lie that is so powerful.
Speaker 3: Yodana, I know the book focuses on nineteen twenty nine,
Speaker 3: but I want to go back even earlier than that
Speaker 3: and sort of understand how the seeds for this were planted,
Speaker 3: maybe even during the British occupation of the area earlier
Speaker 3: in the century.
Speaker 5: Yeah, so we're talking about British Mandate Palestine. This was
Speaker 5: a mandate given to the British Empire to rule over
Speaker 5: what it had just conquered from the Ottoman Empire, which
Speaker 5: had ruled that territory for more than four hundred years,
Speaker 5: and before the Ottoman Empire conquered the region. It was
Speaker 5: a province of a rotating cast of foreign powers, going
Speaker 5: back to the Romans, the Greeks, the Crusaders. It was
Speaker 5: actually the Romans who gave Palestine its name. It had
Speaker 5: been known as the Kingdom of Israel and the Kingdom
Speaker 5: of Judea, and when the Jews of Judea carried out
Speaker 5: a rebellion against the Romans, they punished them by renaming
Speaker 5: the land after the Israelites' ancient enemies, the Philistines.
Speaker 2: Well, and I guess that's what I'm wondering is you know,
Speaker 2: you go back to, as we said, the early nineteen
Speaker 2: hundreds and the role of colonialism the UK specifically, you know,
Speaker 2: in establishing a national home for the Jewish people in Palestine,
Speaker 2: which was against the wishes of the indigenous Arab population.
Speaker 2: You do also wonder how that kind of set the
Speaker 2: stage in addition to what you were talking about, which
Speaker 2: led to the Hebron massacre, that there was more going
Speaker 2: on that made for a very volatile environment between these
Speaker 2: two populations.
Speaker 5: Absolutely, Yeah, the conflict didn't just begin out of nowhere
Speaker 5: in nineteen two twenty nine. Of course, the tensions between
Speaker 5: Palestine's Jewish minority and its Arab majority had been simmering
Speaker 5: for years and had already claimed dozens of lives by
Speaker 5: nineteen twenty nine, but the massacre in Hebron and the
Speaker 5: riots that engulfed Palestine that week in August of nineteen
Speaker 5: twenty nine really became the first mass casualty event of
Speaker 5: this conflict and kind of set the formula for every
Speaker 5: eruption of violence that we have seen since.
Speaker 3: You lived in Israel for more than a decade, and
Speaker 3: as we've been speaking with our reporters on the ground there,
Speaker 3: they've shared with us this feeling that people in Israel
Speaker 3: right now do feel like that the conflict they are
Speaker 3: fighting is one that is indeed existential. And I'm wondering
Speaker 3: if you think, given what's going on there today, the
Speaker 3: actual existence of Israel in the future is threatened.
Speaker 5: Absolutely understanding that really helps to explain the actions Israel
Speaker 5: has taken since October seventh. You know, there's talk of disproportionality,
Speaker 5: and we heard this from Biden today, but I think
Speaker 5: if you are in Israel and you see your country
Speaker 5: being attacked from seven fronts, and you see a world
Speaker 5: that doesn't really understand that the only reason we're not
Speaker 5: seeing mass casualties yesterday and today as a result of
Speaker 5: Iran's ballistic missile attack is a result of Israel's defense systems.
Speaker 5: I mean, you don't just have the Iron Dome intercepting
Speaker 5: some of those rockets, but you also are many of
Speaker 5: those rockets, I should say, but you also have the
Speaker 5: government investing in bomb shelters for israelis something that I wish,
Speaker 5: you know, other countries would do. If imagine if Gozans
Speaker 5: had bomb shelters or Lebanese civilians had bomb shelters that
Speaker 5: could protect them from the terror groups that are embedding
Speaker 5: themselves within civilian populations. And you know, Israel really is
Speaker 5: fighting a war not just against the Palestinians, it's against Hamas,
Speaker 5: but it's also against Hesbalah. And you know, like I
Speaker 5: said earlier, we really should be looking at the names
Speaker 5: of these organizations because they tell us everything. I mean,
Speaker 5: Hezbalah's name means the.
Speaker 6: Party of God.
Speaker 5: Hamas's name is the Islamic Resistance Movement in English. You know,
Speaker 5: so much of what these organizations say themselves we're not
Speaker 5: hearing in the West. And what they're saying is they
Speaker 5: desire to destroy the state of Israel and Israel israelis
Speaker 5: hear that, but I think a lot of us here
Speaker 5: don't understand that.
Speaker 2: So in your thinking about the region and the way forward,
Speaker 2: we assume we fingers cross that we get to a
Speaker 2: better place at some point. Although it's hard to see
Speaker 2: right now, does a two states solution in some ways
Speaker 2: help the situation, specifically in Israel and with the Palestinians.
Speaker 5: So I do believe that a two state solution is
Speaker 5: the only solution to this conflict. And just going back
Speaker 5: to the history here, I began writing this book nearly
Speaker 5: six years ago. You know, I didn't just pick up
Speaker 5: and start writing this after October seventh. I was writing
Speaker 5: about this massacre well before October seventh. The reason I
Speaker 5: did was because there was this family in Memphis, Tennessee
Speaker 5: that I was introduced to that had found this box
Speaker 5: of letters in their attic, containing hundreds of pages of
Speaker 5: letters from their late uncle who was murdered in the
Speaker 5: massacre in nineteen twenty nine, and his letters painted this
Speaker 5: beautiful portrait of peaceful coexistence in Hebron that preceded the massacre.
Speaker 5: And what really captured me and reading these letters was
Speaker 5: that I had never known, and many people didn't know
Speaker 5: or don't know that Hebron was once a beacon of
Speaker 5: coexistence in Palestine, and today, if you're familiar with Hebron,
Speaker 5: it is the antithesis of peaceful co existence. And I
Speaker 5: think understanding how that happened really can tell us how
Speaker 5: we can find a way out and work towards peace,
Speaker 5: because really, if you look the last century, a two
Speaker 5: state solution has been on the table since at least
Speaker 5: nineteen thirty seven. Right and Palasan leaders have rejected every
Speaker 5: single two state solution since then. I mean, Palestine could
Speaker 5: have been independent and free for the first time in
Speaker 5: history in nineteen forty seven had Palestinian leaders and Arab
Speaker 5: leaders accepted that solution, and instead they declared war on
Speaker 5: the unborn Jewish state.
Speaker 2: And in the meantime, many innocent lives have been lost
Speaker 2: and continue to do. So You're Donna, thank you so much.
Speaker 2: Appreciate getting some time with you, your Danish Schwartz, journalist and author.
Speaker 2: New book is Ghosts of a Holy War, the nineteen
Speaker 2: twenty nine massacre in Palestine that ignited the Arab Israeli conflict.
Speaker 2: So we appreciate getting some time with her.
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Speaker 3: Okay, Carol, you know I was out in Colorado. I
Speaker 3: was biking last month with my dad. I went all
Speaker 3: over the state. I saw in some situations neighbors dueling
Speaker 3: with each other when it came to political signs across
Speaker 3: the street, next door, neighbors literally calling each other out,
Speaker 3: depending on where I was A few times. It was
Speaker 3: kind of funny out there, but it reminded me of
Speaker 3: the deep divide that we see in the American political landscape.
Speaker 3: Not that I need to be reminded of it, because
Speaker 3: out there in the media, it's there each and every day.
Speaker 3: It's not just our imaginations though. A report from the
Speaker 3: Pew Research Center this summer said, quote, Republicans and Democrats
Speaker 3: are more divided along ideological lines, and partisan antipathy is
Speaker 3: deeper and more extensive than at any point in the
Speaker 3: last two decades.
Speaker 2: Well, we feel it, right. We talk about it constantly.
Speaker 2: This division that we're seeing, whether it's across party lines
Speaker 2: or elsewhere.
Speaker 3: Oftentimes folks out there use division and the word tribes
Speaker 3: to sort of describe the It's often looked at in
Speaker 3: a pejorative way, just another thing that kind of pushes
Speaker 3: us apart, and it makes us separate from one another. Yet,
Speaker 3: Michael Morris argues in a new book that perhaps rather paradoxically,
Speaker 3: what keeps us apart can actually bring us closer together.
Speaker 2: Kind of love that idea.
Speaker 3: Michael Morris is Professor of Leadership at Columbia Business School.
Speaker 3: His new book is out Tribal How the cultural instincts
Speaker 3: that divide us can help bring us together.
Speaker 4: He joins us from New York.
Speaker 2: Michael, so great to have you here with us, so
Speaker 2: relevant in terms of here we are in an election year.
Speaker 2: So talk to us a little bit about, first of all,
Speaker 2: just kind of general concept of what divides us can
Speaker 2: bring us together. Why did you think we needed you
Speaker 2: needed to write this book and bring it bring it
Speaker 2: to people.
Speaker 7: Well, thank you for having me. This is a book
Speaker 7: that I've been working on for almost ten years. I'm
Speaker 7: a behavioral scientist, you know, a research psychologist, and my
Speaker 7: specialty is cultural psychology, which is the study of the
Speaker 7: cultural frames in our heads that guide our thinking, guide
Speaker 7: our actions and decisions, and what activates them and how
Speaker 7: they change. And I've been teaching at top business schools
Speaker 7: for decades at Columbia Business School, formerly at Stanford Business School,
Speaker 7: So I've developed a toolkit for thinking about how to
Speaker 7: use the cultural forces that shape people's thinking to create
Speaker 7: unity in a group, or to create change in a
Speaker 7: society or in an organization. And that's the reason that
Speaker 7: I started writing this book sort of to create a
Speaker 7: playbook for activists, leaders, managers, high school teachers, coaches, anybody
Speaker 7: who has to orchestrate a group into a productive direction.
Speaker 2: Well, and what's interesting is you hear the word tribe
Speaker 2: or tribalism, and you might get a little i don't know,
Speaker 2: maybe put off a little bit or think one way.
Speaker 2: But you say, when we think of tribes, it's countries,
Speaker 2: it's churches, it's political parties, it's companies, it could be families, right,
Speaker 2: groups that we deal with all the time.
Speaker 7: Yeah, tribes, you know, from a from an evolutionary standpoint
Speaker 7: or from a you know, classic anthropology standpoint, it just
Speaker 7: refers to the distinctively human form of social organization, which
Speaker 7: is large communities that are united by shared culture as
Speaker 7: opposed to being united by blood relations or being united
Speaker 7: by you know, diadic bonds between people. And that's you know,
Speaker 7: that's how we differ from other primates. We can you
Speaker 7: could never have a Chimpanzee Manhattan. You know, once, once
Speaker 7: they get more than fifty individuals in a group, it
Speaker 7: starts to break apart because they depend on either being
Speaker 7: related or having a direct personal bond of trust. We
Speaker 7: can trust total strangers because we share culture with them,
Speaker 7: so we can we can understand them, and we can
Speaker 7: predict their movements, and we can predict what they will do,
Speaker 7: so we can trust them. So, yeah, tribalism is mostly
Speaker 7: a good thing. It's made us human. It's what got
Speaker 7: us where we are now. I think what's really interesting is,
Speaker 7: you know, over the past ten years while I've been
Speaker 7: writing this book, there's been kind of a trope of
Speaker 7: toxic tribalism that has emerged among the pundit class and
Speaker 7: has been picked up by politicians and business leaders. And
Speaker 7: the idea is that somehow, a deeply evolved drive to
Speaker 7: hate each other has somehow reawakened, and now we're screwed
Speaker 7: because we don't talk to each other anymore, and there's
Speaker 7: no way to get the genie back into the bottle anymore.
Speaker 7: And this makes for colorful articles, and maybe it makes
Speaker 7: for you know, riveting speeches, but it's a kind of despairing,
Speaker 7: fatalistic take on the conflicts of our time. I don't
Speaker 7: think it's a helpful way to think, and I don't
Speaker 7: think it's an accurate way to think. It's not a
Speaker 7: way of talking about tribal instincts that any evolutionary scholar
Speaker 7: or any behavioral scientists would recognize. So I think we've
Speaker 7: kind of talked ourselves into this take on tribalism that's
Speaker 7: not scientifically founded and not helpful.
Speaker 3: Well, Professor Morris, would you dispute the idea that we're
Speaker 3: more divided now, like the Pew research says, than we
Speaker 3: are at least politically, and then we have been in
Speaker 3: previous decades for the last twenty years. Does that seem
Speaker 3: not necessarily accurate to you?
Speaker 7: You know, perhaps in the last twenty years, but certainly
Speaker 7: not the claim that I hear more often, which is
Speaker 7: that the American people have never been this divided. You know,
Speaker 7: if you read history in eighteen sixty Abraham Lincoln became president.
Speaker 7: He had less than forty percent of the popular vote.
Speaker 7: Seven states seceded before he was even inaugurated. The Civil
Speaker 7: War breaks out. A few weeks afterwards, four more states secede.
Speaker 7: Now that's that's a crisis. That's that's a legitimacy crisis
Speaker 7: for a president, and that's a big rift to heal.
Speaker 7: But Lincoln was one of the leaders, and there are
Speaker 7: many throughout history and business leaders who they had faith
Speaker 7: that the best way to heal a divide was tribal memory.
Speaker 7: It was it was appealing to our common ancestors, appealing
Speaker 7: to our common past. You know, Lincoln had that famous,
Speaker 7: mysterious line in his first inauguration that the the mystic
Speaker 7: chords of memory shall yet swell the chorus of the Union.
Speaker 7: You know what was he talking about. Well, he thought
Speaker 7: of himself as a storyteller in chief, and he made
Speaker 7: all of these wonderful speeches like the Gettysburg Address that
Speaker 7: you know, made reference to the sacrifices of our common
Speaker 7: ancestors and the common ideals that you know. You know,
Speaker 7: even people in the South were moved by that speech.
Speaker 7: One holiday we have coming up as Thanksgiving and We
Speaker 7: often associate Thanksgiving with the Pilgrims, but it was really
Speaker 7: Abraham Lincoln who started Thanksgiving as a national holiday. And
Speaker 7: he did it because he thought that we need we
Speaker 7: needed a national ritual of gratitude and memory. Uh and
Speaker 7: that and that, more than anything else, could bring people together. So,
Speaker 7: you know, we may think of nostalgia and sentimentality about
Speaker 7: the past as a you know, as a silly, irrational
Speaker 7: way of thinking, but it's it's a deep part of
Speaker 7: our tribal wiring and one that can be used for inclusiveness,
Speaker 7: not not just for divisiveness. You know, we see, you know,
Speaker 7: we see a brand of populist politics nowadays where the
Speaker 7: story is, you know, things used to be great, but
Speaker 7: now we have all these immigrants and things are are
Speaker 7: going to hell. Well that's that's a divisive form of populism.
Speaker 7: But there have been many leaders who practiced inclusive forms
Speaker 7: of populism. And I think we need to understand tribalism
Speaker 7: and understand all the ways that we can use it
Speaker 7: At a time like this.
Speaker 2: This is fascinating, I guess I want to ask you
Speaker 2: about what's going on in our culture where so many
Speaker 2: younger white men are pretty angry and feel left behind.
Speaker 7: What's happened, Well, they used to have a not automatic,
Speaker 7: but a relatively easy path to success in social standing
Speaker 7: because they were from the favored group, the group that
Speaker 7: was sort of the prototype of who should have positions
Speaker 7: of power and responsibility and affluence, and that is declining.
Speaker 7: It's certainly not over, but it's diminishing, and so they
Speaker 7: feel like people are cutting ahead in line, you know,
Speaker 7: people are taking the places that should be theirs. And
Speaker 7: you know, it's not completely new. I mean, there's been
Speaker 7: resentments about affirmative action for decades, but I think now
Speaker 7: it's not just affirmative action. It's that we've had waves
Speaker 7: of very talented immigrants coming into the country, you know,
Speaker 7: for the past twenty years, and that means that a
Speaker 7: lot of our you know, native born, white male good
Speaker 7: old boys are not you know, are not getting those promotions.
Speaker 7: You know, it's it's it's Russians and you know, Brazilians
Speaker 7: and you know, Nigerians who are getting those promotions, and
Speaker 7: not necessarily because of any DEEI policies, just because we
Speaker 7: have so many talented people from all around the world
Speaker 7: who've arrived.
Speaker 3: Have you seen anecdotally. Have you seen anecdotally that show
Speaker 3: up in your business school classes in the decades that
Speaker 3: you've been teaching, Have they become more diverse?
Speaker 8: Very much so.
Speaker 7: The MBA population has changed dramatically. I had a class
Speaker 7: last spring, a class of fifty people, and I had
Speaker 7: seven Nigerian students. You know, some of them Nigerian Americans,
Speaker 7: but they were all you know, students who were Nigerian,
Speaker 7: you know, by identity, and that's you know, Nigeria is
Speaker 7: one of the most populous countries in the world, so
Speaker 7: we shouldn't be surprised. But it wasn't the case when
Speaker 7: you were in the business school classroom. We weren't recruiting
Speaker 7: from Africa and the African diaspora in the same way.
Speaker 7: It's good for the world that we are your.
Speaker 2: Advice to folks who where we see so much division,
Speaker 2: but you say in your book it can bring us together.
Speaker 2: What are tools we can do? Piece of advice, Well.
Speaker 7: What we need to do is understand what tribal psychology
Speaker 7: really is. And there are three parts to it, what
Speaker 7: I call the peer instinct, the hero instinct, and the
Speaker 7: ancestor instinct. The idea that we were driven to kind
Speaker 7: of imitate our peer group, were driven to emulate our heroes,
Speaker 7: and were driven to perpetuate the ways of our ancestors
Speaker 7: and maintain traditions, and all of those things can be
Speaker 7: positive forces for unity. And what we need to do
Speaker 7: is understand the levers for invoking these forces. They're inside
Speaker 7: every person, but there are triggers that bring them to
Speaker 7: the four that are invisible to us because they operate unconsciously.
Speaker 7: And so I've tried to explain what we've learned from
Speaker 7: lots of research about what those triggers are that a teacher,
Speaker 7: or a manager or a politician can use. And then
Speaker 7: over the longer term, cultures are malleable, and we have
Speaker 7: to understand what are the signals that we can send
Speaker 7: to help evolve the culture. Culture is not a fixed
Speaker 7: thing that we're stuck with. It's something that we can
Speaker 7: mold good.
Speaker 2: That's a great way to wrap it up. Michael Morris,
Speaker 2: thank you so much of Columbia Business School. His new
Speaker 2: book out today, Tribal How the cultural instincts that divide
Speaker 2: us can help bring us together. You're listening and watching
Speaker 2: Bloomberg Business Week.
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Speaker 2: Cruise line Giant Carnival dropped earnings this past week with
Speaker 2: the profit beat, and yet the stock fell initially after
Speaker 2: the company announced adjusted EBITDA for the fourth quarter that
Speaker 2: was slightly below consensus and a weaker outlook for net
Speaker 2: yields in the current quarter. So investors were a little
Speaker 2: concerned initially.
Speaker 3: And yet several analysts raised their price targets on the stock.
Speaker 3: For the latest on Carnival's business, we caught up with
Speaker 3: the Carnival president and CEO who's also the chief climate Officer,
Speaker 3: Josh Weinstein. He joined us just after FED chair j
Speaker 3: Powell speech Monday at the National Association of Business Economics.
Speaker 9: I don't usually follow the FED chairman. This is a
Speaker 9: big this is a big thrill to go check out
Speaker 9: Jack White.
Speaker 8: Jack White in Nashville.
Speaker 9: Well, we'll talk about the third quarter first, and as
Speaker 9: I've been able to say for the last several quarters,
Speaker 9: it's record you know, we just hit a record for revenues,
Speaker 9: for revenue yields, for operating income, customer deposits, bookings two
Speaker 9: years out, so right up and down our business, it's
Speaker 9: records and strong demand.
Speaker 8: So we ended the third quarter up about eight.
Speaker 9: Point seven percent in our yield year over year, which
Speaker 9: was strong, and the same time, we held our cost flat,
Speaker 9: which was which is also good to note, and that
Speaker 9: resulted in, like I said, a record quarter, and as
Speaker 9: we were able to adjust our full year guidance. We
Speaker 9: did that for the third time this year, and it's
Speaker 9: going to take us up to about six billion dollars
Speaker 9: of EBITDA, which again, to use a broken record word,
Speaker 9: it's a record, and so we're expecting much more as
Speaker 9: we get into the fourth quarter and then beyond.
Speaker 2: In terms of macro, what matters in terms of FED
Speaker 2: policy for you, and what's going on in terms of
Speaker 2: the interest rate environment. He did also talk about the
Speaker 2: savings rate, suggesting consumers can continue spending, which we want
Speaker 2: to get into too in terms of it seems like
Speaker 2: consumers are certainly still spending on cruises. But give us macro,
Speaker 2: give us consumer spending. How you would describe it all?
Speaker 9: Well, For us, the word's going to be robust, you know.
Speaker 9: I mean, we've been living through this cycle with everybody else.
Speaker 9: We've lived through the high inflation, We've lived in the
Speaker 9: high interest rate environment, and now we see inflation down,
Speaker 9: we see the Fed taking action to start reducing that
Speaker 9: interest rate environment. And through all of it, what we've
Speaker 9: been seeing is robust demand. And because of our business,
Speaker 9: you know, first of all, it's a global business. As
Speaker 9: you know, we have a portfolio of brands that are
Speaker 9: really world class all over all over the world. And
Speaker 9: what we see is strong demand depending no matter how
Speaker 9: you slice it, whether it's geographic, whether it's contemporary versus
Speaker 9: more premium. We're seeing that strength and we see it
Speaker 9: in the results. We see it in the onboard spending levels.
Speaker 9: You know, as part of our third quarter results. It's
Speaker 9: not just about the ticket revenue which was taken anywhere
Speaker 9: from you know, six months to up to two years
Speaker 9: in advance, but what's the actual onboard spending environment, which
Speaker 9: is much more real time. And the fact is our
Speaker 9: onboard spending for this past quarter was up over six
Speaker 9: percent year over year, and that's actually an acceleration because
Speaker 9: in the second quarter it was up closer to four
Speaker 9: percent year over year. So what we're seeing is is
Speaker 9: consumers that are healthy, that still want to spend on experiences.
Speaker 9: And as you've probably heard me say before, we are
Speaker 9: an unparalleled value, right, we are a better value to land.
Speaker 9: I remember being in the offices with you in December
Speaker 9: talking about my hotel stay. Not only are we unparalleled
Speaker 9: in the value, we are unparalleled in the experience that
Speaker 9: we give to people. You get value for what you
Speaker 9: pay for, and we deliver on that guest experience like
Speaker 9: nobody else.
Speaker 3: So, Josh, are you seeing any weakness across any part
Speaker 3: of the portfolio of brands right now from any segment.
Speaker 4: Of the consumer?
Speaker 8: Now, we're really not no pullback whatsoever, now, you know.
Speaker 9: I mean, as a matter of fact, if you look
Speaker 9: at our twenty twenty five booked position, it's higher in
Speaker 9: price and occupancy than it's ever been at the same
Speaker 9: point in time. When you look at twenty twenty five,
Speaker 9: we're higher in every single quarter price and occupancy. So
Speaker 9: things are, things are moving in continuing to move in
Speaker 9: the right direction. And I think it's I think you know,
Speaker 9: cruises cruises tiny Right at the end of the day,
Speaker 9: we're the biggest cruise company in the world, but if
Speaker 9: you take the whole cruise industry, it's only about two
Speaker 9: percent of the overall vacation market. So we are a
Speaker 9: very tiny segment in a huge market with a lot
Speaker 9: of room to grow. Because we're getting the word out,
Speaker 9: we are being more effective in communicating the value and
Speaker 9: communicating the experience and really deferent differentiating our brands so
Speaker 9: that they get a cut through and it means something
Speaker 9: to people, and that's paying dividends.
Speaker 2: Talk to us about the cost side of the equation,
Speaker 2: as you just said, and I read too that nearly
Speaker 2: half of twenty twenty five bookings are done at record
Speaker 2: ticket prices. The cost equation, You guys are a floating
Speaker 2: city once you're at on the water. Food, you know,
Speaker 2: meals labor. Tell us what you're seeing in terms of
Speaker 2: the cost side of the equation, Josh.
Speaker 9: Yeah, So it's good news there too. You know, we
Speaker 9: are seeing that deacceleration of deceleration part of me of inflation,
Speaker 9: and we were actually just today able to take our
Speaker 9: cost guidance for the full year down from up four
Speaker 9: and a half percent on a unit basis to up
Speaker 9: three and a half percent on a unit basis, so
Speaker 9: we're making good progress there. We are seeing the benefit
Speaker 9: of a lot of hundreds and hundreds of activities that
Speaker 9: we're doing across our brands, taking little bits of efficiency,
Speaker 9: better sourcing savings when we can, and it adds up
Speaker 9: given our scale. So all things are starting to move
Speaker 9: in the right direction on the cost side, which is
Speaker 9: very different obviously than what we've been experiencing along with
Speaker 9: everybody else as we went through that inflationary cycle.
Speaker 3: Speaking of the inflationary cycle, I'm wondering about the pricing
Speaker 3: power from your perspective. If you're going to be able
Speaker 3: to continue to raise prices in your view next year
Speaker 3: and year after year.
Speaker 8: You know, that's certainly the goal.
Speaker 9: You know, at the beginning of this year, when we
Speaker 9: were talking about our guidance for the first time, there
Speaker 9: were a lot of folks that were saying, oh, yeah,
Speaker 9: but you know, when you get to the fourth quarter
Speaker 9: of twenty twenty four. You took your pricing up in
Speaker 9: twenty twenty three ten and a half percent, that was
Speaker 9: our results last fourth quarter.
Speaker 8: You're not going to be able to top that.
Speaker 9: And we just came out with guidance today for the
Speaker 9: fourth quarter where our yields are going to be up
Speaker 9: five percent, the majority of which is more price. So
Speaker 9: we feel very good about what we're doing in our
Speaker 9: ability to manage the booking curve, increase our demand profile,
Speaker 9: and ultimately deliver on board as we always do.
Speaker 2: What keeps you up at night barring another global pandemic? No,
Speaker 2: but seriously, you've been rosy for a while, and I'm
Speaker 2: just curious. It does sound like some really strong metrics.
Speaker 2: And I said, reading some of the analysts commentary, they
Speaker 2: feel the same way. But I'm just curious. What's the
Speaker 2: difficult part of what you guys do. I mean, you're
Speaker 2: ordering new ships, you're adding to that. Tell us Josh, like,
Speaker 2: where is it that you get a little concerns? Is
Speaker 2: it the election outcome? I'm just curious.
Speaker 8: No, I think those types of things are temporal.
Speaker 9: And you know, I mean, truthfully, after living through what
Speaker 9: we lived through.
Speaker 8: In twenty twenty and twenty twenty one and get.
Speaker 9: Getting back from literally a pause to where we are today,
Speaker 9: there's really not much that that keeps me up at night. Truthfully,
Speaker 9: that's within our control. I mean, at the end of
Speaker 9: the day, you know, in a two year period, we
Speaker 9: went from negative EBITDA to up over six billion in
Speaker 9: EVA DA.
Speaker 8: So so I don't see much.
Speaker 9: Within our control that we can we can't push forward,
Speaker 9: and you know that showing I mean just just in
Speaker 9: this year alone. We came out with guidance in December
Speaker 9: for the first time, and we said our yields will
Speaker 9: be up about eight and a half percent. Now we're
Speaker 9: saying up close to ten and a half percent. We
Speaker 9: said costs would be up four and a half percent,
Speaker 9: now they're going to be up three and a half percent.
Speaker 9: We said our return on investing capital will be up
Speaker 9: nine percent, and now we're saying, no, it's ten and
Speaker 9: a half percent, which is a five point improvement year
Speaker 9: over year. So I think we're making real good decisions.
Speaker 9: We've got an amazing team all over the world with
Speaker 9: all of our world class brands really driving the business forward,
Speaker 9: and you know, I just think we were just starting
Speaker 9: to scratch that potential. We are really focused on just
Speaker 9: doing the basics better and better, and it's working.
Speaker 3: Hey, Josh, you're also chief Climate Officer at Carnival Corporation.
Speaker 3: You mentioned things that we're in your control. One thing
Speaker 3: that's not in your control is the weather is the climate.
Speaker 3: The connection between weather and climate. The two are not
Speaker 3: the same, but the two are certainly linked. Many Americans,
Speaker 3: millions of Americans are still cleaning up after Helene in
Speaker 3: multiple states. It's killed more than one hundred people. Many
Speaker 3: are still missing at this point. How do you think
Speaker 3: about climate change in your role? How do you think
Speaker 3: about planning for an uncertain future?
Speaker 9: Well, first of all, our heart, our sympathy goes out
Speaker 9: to all those impacted by Helene. I mean, it is
Speaker 9: a tragedy unfolding, and we have a lot of connections
Speaker 9: to a lot of those local communities.
Speaker 8: So that's first and foremost.
Speaker 9: As far as the bigger picture goes, you know, we
Speaker 9: understand that the world is evolving rapidly. We need to
Speaker 9: do our part, and we need to plan for the future.
Speaker 9: And when it comes to doing our part, we are
Speaker 9: we are steadfast in our in our in our drive
Speaker 9: to reduce our own carbon footprint and do what we
Speaker 9: can to make the world a better place.
Speaker 8: We have.
Speaker 9: We are thirty five percent bigger today than we were
Speaker 9: in twenty eleven, and we admit this year we will
Speaker 9: emit ten percent less absolute greenhouse gas emissions than we
Speaker 9: did in twenty eleven, even though we are thirty five
Speaker 9: percent bigger today. It's because we understand the importance of
Speaker 9: doing what we can to drive that sustainability agenda. And
Speaker 9: as far as preparing for the future, that goes into
Speaker 9: all of our decision making. You know, when we're talking
Speaker 9: about the ships that we're building, when we're talking about
Speaker 9: the destinations that we develop, how can we develop them
Speaker 9: in a way that they can deal with whatever that
Speaker 9: environmental landscape is not five years from now, but twenty
Speaker 9: years from now, in thirty years from now, And keep
Speaker 9: leaning into technology, keep doing our part to figure out
Speaker 9: how we can we can and we can reduce our
Speaker 9: consumption every single year.
Speaker 8: That's the goal.
Speaker 2: And I'm assuming that's incorporating to when you guys build
Speaker 2: out whether it was Grand Turk or I'm thinking about
Speaker 2: Celebration Key right, that opens up in summer of twenty
Speaker 2: twenty five. Just the revenue and cost impact of that
Speaker 2: debut tell us at bit about the dynamics around that one.
Speaker 9: Yeah, it is going to be It is going to
Speaker 9: be pretty special, you know, twenty twenty five. We open
Speaker 9: up in July of twenty twenty five, and then we
Speaker 9: outse go through a ramp up phase as we as
Speaker 9: we learn and we figure out what works, what doesn't work,
Speaker 9: and how we tweak, and it really is going to
Speaker 9: bear fruit in a significant way in twenty twenty six
Speaker 9: when we have nineteen Carnival Cruise Line ships that are
Speaker 9: going to be a reaching celebration key from I think
Speaker 9: about ten different home ports in the United States. So
Speaker 9: not only is that going to be a boost to
Speaker 9: our ticket revenue, is going to be a boost to
Speaker 9: the spending in the destination. And then to the point
Speaker 9: we were just talking about, the proximity to the United
Speaker 9: States is phenomenal from a fuel spend and carbon emission standpoint.
Speaker 9: Because it's so close, we can go slower and shorter
Speaker 9: distances to get there. So we are very much looking
Speaker 9: forward to its introduction.
Speaker 2: All right, great stuff, as Aways, You're a gem for
Speaker 2: being so patient, So appreciated, Josh, look forward to next time.
Speaker 2: Josh Weinstein. He's the President, CEO, and Chief Climate Officer
Speaker 2: of Carnival Corporation. Joining us from Carnival's headquarters in Miami.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 2: Plenty ahead in our second hour of the weekend edition
Speaker 2: of Bloomberg Business Week, including the actor and comedian who
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Speaker 2: One smooth, spicy Chai at a time.
Speaker 3: Plus why the best air fresheners for your car are
Speaker 3: also the most expensive spoiler alert, it's not those little
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Speaker 3: watch Tom Brady's eleven million dollar auction and Ai Judy
Speaker 3: Garland reading you the Wizard of Oz.
Speaker 4: That's all in.
Speaker 2: Pursuits first up this hour, we're not talking metaverse in
Speaker 2: high tech, not talking geopolitics or the state of the world.
Speaker 2: Rather something simpler and closer to our hearts.
Speaker 3: Mac and cheese and building a dream from it. That's
Speaker 3: what Aaron Wade did, leaving her job as a corporate
Speaker 3: lawyer to start a mac and cheese restaurant, write a
Speaker 3: cookbook and manual on how to start and run a business.
Speaker 3: She came up with a blueprint for a really serious
Speaker 3: problem in her industry.
Speaker 2: Yeah, She's did a lot of stuff. Aerin is author
Speaker 2: of the book The Mac and Cheese Millionaire, Building a
Speaker 2: Better business by Thinking outside the box. She joined me
Speaker 2: alongside Bloomberg Daybreak Europe co anchor Stephen Carroll, who was
Speaker 2: recently in for Tim.
Speaker 6: I began my career with a huge passion for food
Speaker 6: and had cooked in restaurants, but found that it was
Speaker 6: a really dead end job. The pay is low, the
Speaker 6: treatment is not great. So I just did not see
Speaker 6: a future for myself. So I decided to go to
Speaker 6: law school and do what you know, generations of lost
Speaker 6: people with no direction have done and become a lawyer.
Speaker 6: But I didn't. I didn't love it, so I actually
Speaker 6: got fired. Turns out you're not good at what you
Speaker 6: don't like doing. And I decided I wanted to create
Speaker 6: the restaurant that I wish that I could have worked at.
Speaker 6: So not just was it a love of family, my
Speaker 6: family recipe of mac and cheese, and wanting to bring
Speaker 6: that to the market, because I just didn't see that
Speaker 6: being filled anywhere. You know, there's like pizza restaurants, barbecue,
Speaker 6: but not mac and cheese. But I really want to
Speaker 6: focus on how do I create the kind of workplace
Speaker 6: that I wish, the kind of restaurant that I could
Speaker 6: have worked in, and what do I need to do
Speaker 6: to do that?
Speaker 2: So, what in particular did you want in terms of
Speaker 2: making it the place that you wanted to work at?
Speaker 2: What was it that needed to be different?
Speaker 6: You know, my book is filled with a lot of
Speaker 6: trial and error. I think the truth is I didn't know.
Speaker 6: I knew what I didn't want to do right, but
Speaker 6: sometimes it's harder when you haven't had the example set
Speaker 6: of what you do want to do. So I found
Speaker 6: that it really came down to three things, which was
Speaker 6: you know, communication, collaboration, and collective success and having to
Speaker 6: give you examples of you know, ways that we did
Speaker 6: all those three things. But that I found was really
Speaker 6: the secret to our success. And you know, not only
Speaker 6: in an industry where the average tenure is you know,
Speaker 6: less than ninety days. Our average tenure is two and
Speaker 6: a half years. But our profitability was in the top
Speaker 6: one percent of restaurants. So I'm really proud of what
Speaker 6: we achieved.
Speaker 10: Yeah, because look, it's a difficult business to get into,
Speaker 10: and I think if you know, if you're going to
Speaker 10: make a leap of faith into something new. You didn't
Speaker 10: perhaps pick the clearest or the easiest path to do that.
Speaker 10: Talk us about getting getting the first the first homeroom started.
Speaker 6: I think that's why actually it makes for such a
Speaker 6: great business book, because you know, if we were using
Speaker 6: these techniques successfully, I mean, it is the hardest industry
Speaker 6: to make it, so, you know, I really think they
Speaker 6: can these ideas can work anywhere. But yeah, I mean
Speaker 6: it's it's crazy. I mean, banks won't even give you
Speaker 6: loans because it's considered you know, your your odds are
Speaker 6: better and less Vegas than investing in a restaurant. But
Speaker 6: I do think that with sort of you know, by
Speaker 6: using these techniques, I think people in all kinds of
Speaker 6: businesses can can beat the odds.
Speaker 10: Tolk us through the first few months of that business, though,
Speaker 10: at what point did you know that you hot you
Speaker 10: were onto something and that you that was going to
Speaker 10: take off into something that of course it became a hit.
Speaker 6: Luckily we were packed from you know, day one, and
Speaker 6: I really credit it to frankly, just having an exceptionally
Speaker 6: good quality product. So you know, at most restaurants, if
Speaker 6: they have mac and cheese at all, it is a
Speaker 6: side dish it's something that is not paid very much
Speaker 6: attention to, and for us, this is really the main thing.
Speaker 6: So you know, we made each one to order, We
Speaker 6: used my family recipe. We put nearly a quarter pound
Speaker 6: of cheese in each portion, so you know, it's incredibly cheesy,
Speaker 6: it's fresh, it's it's made with love and care, and
Speaker 6: you know, and that makes a huge difference versus sitting
Speaker 6: in a vat somewhere. So I think people were very,
Speaker 6: very obsessed with the products from day one. But frankly,
Speaker 6: I think also what we did is like created tremendous
Speaker 6: value surrounding the experience. Because I had worked a lot
Speaker 6: in fine dining, but something that I thought was really
Speaker 6: lacking in a more casual setting is like, you know,
Speaker 6: great design and great service. Those things don't need to
Speaker 6: cost more, they just need someone to care more. And so,
Speaker 6: you know, I think that people's perception of value of
Speaker 6: getting to sit in this really beautifully designed space, getting
Speaker 6: you know, some of the best service that they've had
Speaker 6: in a restaurant while eating you know, the best version
Speaker 6: of mac and cheese they've ever had. It's just a
Speaker 6: winning combo.
Speaker 2: I have to say, there's a restaurant in our neighborhood,
Speaker 2: a local, one family run and they have an incredible
Speaker 2: mac and cheese and we will go there just for
Speaker 2: the mac and cheese. And it used to be a
Speaker 2: place downtown. I don't even know if it exists, but
Speaker 2: that's all it did and great, you know, cast iron
Speaker 2: skillets and any kind of like varieties of mac and cheese.
Speaker 2: It is like just that food that we just love.
Speaker 2: We just love. What's one of the biggest I don't
Speaker 2: know what was one of the biggest moments in this process.
Speaker 2: I feel like everybody who started a business, especially in
Speaker 2: the restaurant in history, we've all seen the bear and
Speaker 2: loved it. But I do wonder where you were. I
Speaker 2: don't know. It was either just a huge learning experience,
Speaker 2: whether from your team, from your workers, I don't know.
Speaker 6: Tell us you know. I have to say we used
Speaker 6: a lot of like really interesting techniques to engage people
Speaker 6: in the business. For instance, we're an open book company
Speaker 6: and so share financials and teach financial literacy, and I
Speaker 6: think that was a huge aha, right, It like really
Speaker 6: unlocks people's like potential and power to understand business in
Speaker 6: a deep way and to feel like they're part of
Speaker 6: something that's bigger than themselves versus just showing up every
Speaker 6: day to cook. So, you know, I'd say that's one
Speaker 6: moment that I'm incredibly proud of. But you know, another
Speaker 6: is that we used all these techniques of you know,
Speaker 6: we had a lot of different tools to be communicating, collaborating,
Speaker 6: and we actually came up with a solution to sexual
Speaker 6: harassment which our staff was experiencing, and it I wrote
Speaker 6: a viral piece in the Washington Post about it, it
Speaker 6: got adopted by the EEO. I went to Washington to
Speaker 6: go testify about it, and it's now used by restaurants
Speaker 6: and bars all around the world. So, you know, I
Speaker 6: think that also, frankly, when you tap into the power
Speaker 6: of a workforce. You know, we were just a small
Speaker 6: restaurant but made a difference on a global scale, and
Speaker 6: I'm incredibly proud of that.
Speaker 2: But talk to us a little bit more about that,
Speaker 2: like how you came to realize it's something needed to
Speaker 2: be done differently.
Speaker 6: Well, I was approached by a number of female servers
Speaker 6: at the restaurant who all were complaining, and honestly, they
Speaker 6: said they'd worked at a ton of places and this
Speaker 6: had happened everywhere this was just the first time that
Speaker 6: they thought maybe someone would actually do something about it.
Speaker 6: And so I did what I usually did when someone
Speaker 6: brings up a problem, which is include them in the
Speaker 6: solution to it. So, you know, we came up with
Speaker 6: a system that our entire staff that wanted to participate
Speaker 6: did participate in creating it. And I think the reason
Speaker 6: it's so effective is that, honestly, it really sort of
Speaker 6: honors people wherever they are. It's like basically a color
Speaker 6: coded system, and when someone experienced is something with that color,
Speaker 6: they just report the color and an action is taken.
Speaker 6: So you know, for instance, a yellow is just you
Speaker 6: get a bad vibe at a table. You just say hey,
Speaker 6: I've got a yellow at table two, and a manager
Speaker 6: will take it over for you. And an orange is
Speaker 6: you have a bad feeling. Plus let's say an ambiguous
Speaker 6: comment something like I like your shirt. You know, depending
Speaker 6: on who says that to you and how they say
Speaker 6: it to you, it might feel totally benign or aggressive.
Speaker 6: And so same deal. Someone just goes to a manager
Speaker 6: and says, hey, I've got an orange at table too,
Speaker 6: and the manager takes it over. And with a red,
Speaker 6: that's someone saying something overtly sexual or touching a staff member,
Speaker 6: and in that case, again the staff member just says
Speaker 6: the color and then the manager's required to kick the
Speaker 6: person out. And you know, I think what's so cool
Speaker 6: about the system is that you know, guests honestly don't
Speaker 6: know is being used on them, so it's very customer
Speaker 6: friendly it. You know, staff members are going to have
Speaker 6: all kinds of different experiences, and some people are going
Speaker 6: to find certain things threatening and other ones won't, and
Speaker 6: so it allows allow us to meet staff where they
Speaker 6: are and take action and it's really easy for managers
Speaker 6: to use. And what we found is amazing. As we
Speaker 6: thought it would just be a way of coping with
Speaker 6: harassment and just giving us a way to deal with it,
Speaker 6: but actually what it did is it really nearly eliminated
Speaker 6: the worst forms of it, because very few people walk
Speaker 6: into a restaurant and like stick their hand of someone's shirt.
Speaker 6: But you know, they will usually start with lower level
Speaker 6: things like checking them out or making low level comments,
Speaker 6: and then once things are tolerated, they escalate their behavior.
Speaker 6: So it just really sort of stopped the problem from happening,
Speaker 6: and in a way that I think is really respectful
Speaker 6: to people, you know, no matter if their customer, staff manager.
Speaker 10: I think what I find really interesting about this, this
Speaker 10: Color Code of Conduct is you're giving people language to
Speaker 10: be able to talk about how they feel and how
Speaker 10: they feel affected by it. And it's a model that's
Speaker 10: been taken up by businesses elsewhere as well. Talk to
Speaker 10: us a little bit about how you're seeing. You know,
Speaker 10: what you've heard about how the Color Code of conducts
Speaker 10: being used outside of your business.
Speaker 6: Yeah, I mean I've gotten like from just fabulous feedback.
Speaker 6: And actually, you know, one of the most fun parts
Speaker 6: is there's plenty of people that use it that I'll
Speaker 6: never know. But I'll walk into a bar and I'll
Speaker 6: find like one of our posters on the wall. Or
Speaker 6: I went to speak at a conference and it was
Speaker 6: like all these you know, bar owners from like across
Speaker 6: America and the globe. And I was so surprised because
Speaker 6: at the end of my session, I didn't, you know,
Speaker 6: I wasn't getting a ton of questions, and I was like,
Speaker 6: what's happening here? And then I asked people to raise
Speaker 6: their hand if they had known of the system or
Speaker 6: if they use it in their bar, and like everyone
Speaker 6: raised their hand and I was like, okay, cool. So
Speaker 6: I wonder doesn't help people.
Speaker 10: This is an industry where there's a huge staff turnover, right,
Speaker 10: I wonder how much that's helped towards staff retention at
Speaker 10: a time. You know, we talk so much about the
Speaker 10: tight labor markets, and we know that hospitality is one
Speaker 10: sector really affected by that. Has it helped you to
Speaker 10: keep people good people on your staff?
Speaker 8: Oh?
Speaker 6: I got one hundred percent. I mean to my point
Speaker 6: about sort of all the tools in the book, right,
Speaker 6: if we can use them, then anyone can. Because I
Speaker 6: think you know, something really missing from the converse right
Speaker 6: now about the labor market and what to do is that,
Speaker 6: in my experience, the most meaningful things actually don't cost money.
Speaker 6: They just take time and care. Right Like, we are constrained.
Speaker 6: There's only so much we can pay people when we're
Speaker 6: charging folks ten dollars for mac and cheese, right, Like,
Speaker 6: It's just that's just true. It's not going to be
Speaker 6: the most highly paid job of someone's life, probably, But
Speaker 6: you know, there's so much you can do that makes
Speaker 6: work an enjoyable place to come to and meaningful and purposeful.
Speaker 6: And I think those are the things, honestly that you know,
Speaker 6: make life worth living.
Speaker 10: One of the things that I really liked about your
Speaker 10: book and your own story as well as You're talking
Speaker 10: about wanting to fall in love with work, and do
Speaker 10: you think that we need to be in love with
Speaker 10: what we do in order to succeed.
Speaker 6: I mean, in my experience, yes, I mean, you know,
Speaker 6: I'm really smart and I was working as a lure
Speaker 6: and I got fired. And I don't think it's an accident.
Speaker 6: I found it very hard to be good at something
Speaker 6: that I didn't like doing, you know, versus something I'm
Speaker 6: passionate about. You know, my my worst days as an
Speaker 6: entrepreneur have been better than my best days as a lawyer.
Speaker 6: But you know, I think, I think it's a real gift,
Speaker 6: you know, to wake up and enjoy going to work.
Speaker 6: And it's one I didn't, you know, previous to starting
Speaker 6: my own restaurant think was possible. So I guess I
Speaker 6: just wanted to communicate people to people that I do
Speaker 6: think it's possible, and I try to give them tips
Speaker 6: and tools for, you know, how to find that passion
Speaker 6: within yourself, how to pursue it, how to create spaces
Speaker 6: where other people can't to Because I think Honestly, we
Speaker 6: spend more of our lives at work than in almost
Speaker 6: anything else, and we don't enjoy it. Like what are
Speaker 6: we doing here?
Speaker 2: I would certainly say yes. It's one of the pieces
Speaker 2: of advice my dad Kate gave to me growing up, like,
Speaker 2: find something you love to do. And I remember my
Speaker 2: first job in journalism. I had to be in it,
Speaker 2: like the wee hours made maybe fourteen fifteen thousand dollars,
Speaker 2: had to borrow money from my father and mother to
Speaker 2: buy a car. Use car for four thousand dollars, I
Speaker 2: can get into New York City because there was no
Speaker 2: mass transportation, but it was I knew It's what I
Speaker 2: wanted to do, and it's amazing. Like right, when you
Speaker 2: find something you want to do. Having said that, you
Speaker 2: also a right to create anything new of value. You
Speaker 2: always have to be willing to fail upward, to make
Speaker 2: mistakes and get a little better every time. This philosophy
Speaker 2: had worked for you, for me, you with everything from
Speaker 2: adding new menu items to refining management philosophies. But something
Speaker 2: about experimenting with people's safety at work felt too important
Speaker 2: to fail upward.
Speaker 6: That's important, Yeah, I mean most of the book is
Speaker 6: sort of ridiculous stories about you know, what are the
Speaker 6: ways that we felt before we found systems that worked.
Speaker 6: And I was pretty terrified of doing that with our
Speaker 6: harassment system. But the truth is, there is no other
Speaker 6: way to create something that doesn't yet exist. So we did,
Speaker 6: and I tried to put in our mistakes so that
Speaker 6: other people don't need to make them too.
Speaker 10: I really, I really enjoyed how honest you were about this, because,
Speaker 10: you know, having when you have a non linear career
Speaker 10: path moving out of things, that can be difficult to
Speaker 10: be honest about the stuff that doesn't work. You know,
Speaker 10: when you've invested, for example, a lot of money and
Speaker 10: going to law school, you know that's got to hurt, right,
Speaker 10: And I wonder do you take things from your legal
Speaker 10: career into what you're doing now? Are there elements of
Speaker 10: what you learned in law school and maybe what you
Speaker 10: learned from working in the industry as well, that are
Speaker 10: relevant to your job now?
Speaker 6: You know, Actually, one of the most helpful things that
Speaker 6: I took from my legal career into being an entrepreneur
Speaker 6: was actually how we deal with discipline. I had been
Speaker 6: really interested in this question because I feel like it's
Speaker 6: pretty ineffective in most workplaces. And I had worked all
Speaker 6: through law school at a district attorney's office, actually Kamala
Speaker 6: Harris's office when she was d of San Francisco. But
Speaker 6: so I was very interested in, like what are different,
Speaker 6: you know, ways that we approach punishment. And we ended
Speaker 6: up at my restaurant, Homeroom adopting a system that I
Speaker 6: had seen used in the criminal justice system called restorative justice. So,
Speaker 6: you know, most stuff at work, when someone screws up,
Speaker 6: you just get punished, You maybe get a write up,
Speaker 6: you maybe get doct shifts, you know, things like that.
Speaker 6: And with restorative justice, the idea is actually it's not
Speaker 6: to punish people, but to make it right. And so
Speaker 6: we started shifting from like punishing people when they screw
Speaker 6: up to you know, walking them through this restorative model
Speaker 6: of figuring out how to make it right with staff,
Speaker 6: you know, like how to you know, apologize, like do
Speaker 6: nice things, fix it with the customer, you know, help
Speaker 6: your manager, like really make it right with all the
Speaker 6: people affected by their behavior. And it was a real
Speaker 6: sea change for us, you know, it was really helpful.
Speaker 2: Aaron, you dropped something like an elephant in the living room.
Speaker 2: We have to ask you so you worked with Kamala
Speaker 2: Harris or it sounds like you have some experience what
Speaker 2: what would you what do you think some our audience
Speaker 2: in your experience with with working with her or dealing
Speaker 2: with her or talking with her that you think is
Speaker 2: worth sharing.
Speaker 6: Oh gosh, I mean I do think you know she was.
Speaker 6: I mean I had worked for her because I was
Speaker 6: really drawn to she was doing stuff that at the
Speaker 6: time was considered pretty out there, and you know, so yeah,
Speaker 6: I have tremendous, tremendous respect for her, and you know
Speaker 6: fun that she's running for president right now. So I
Speaker 6: guess I just say I think I really respect that
Speaker 6: she has tried things other people weren't willing to do. Frankly,
Speaker 6: at the time, I don't think she gets much credit
Speaker 6: for that, but she's an innovative prosecutor and she's good
Speaker 6: at what she did.
Speaker 8: Well.
Speaker 2: Be sure to keep us up to date on what
Speaker 2: you do with Homeroom, especially if you expanded out and grow.
Speaker 2: And we love talking to certainly small business owners. But
Speaker 2: your path has really been an interesting one and thanks
Speaker 2: for sharing it. Aaron Wade, chef and entrepreneur. I guess
Speaker 2: I can say also lawyer her former lawyer. Her book
Speaker 2: is The Mac and Cheese Millionaire, Building a Better Business
Speaker 2: by Thinking Outside the Box. Joining us from Oakland, California.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Listen live
Speaker 1: each weekday starting at two pm Eastern on Apple Car
Speaker 1: Play and Android Auto with the Bloomberg Business App. You
Speaker 1: can also listen live on Amazon Alexa from our flagship
Speaker 1: New York station, Just Say Alexa Play Bloomberg eleven thirty.
Speaker 2: When it comes to foreign policy, the United States has
Speaker 2: sought to cultivate a deeper partnership with India as a
Speaker 2: bulwark against a more assertive China. Well, India has sought
Speaker 2: greater US investment and deeper cooperation and technology sharing and defense.
Speaker 3: It makes sense considering they're about four point eight million
Speaker 3: Indian Americans in the US. That's according to data from
Speaker 3: the US Census Bureau. Indian Americans account for twenty percent
Speaker 3: of the nation's Asian American population overall, and about two
Speaker 3: thirds of Indian Americans are immigrants, while thirty four percent
Speaker 3: are US born. Also, around half of Indian Americans live
Speaker 3: in just four states California, Texas, New Jersey, and New York.
Speaker 2: Well, reaching out to this community, one smooth cup of
Speaker 2: chai at a time. Are actor and comedian Hassan Minaj
Speaker 2: along with Any Sanyel, who co founded Kolkata Chai, along
Speaker 2: with his brother Ion Bloomberg's Matt Miller joining me in
Speaker 2: this conversation as well.
Speaker 11: Yeah, so five years ago, my brother and I decided
Speaker 11: to do the craziest thing possible, which is bring authentic
Speaker 11: chai to America. We grew up being able to travel
Speaker 11: back to India a lot, and you know, New York City,
Speaker 11: you can find anything you want to eat and drink,
Speaker 11: but it was really hard to find a good cup
Speaker 11: of chai. So that's where we started. We opened six
Speaker 11: months before the pandemic. We bootstrapped our first cafe location,
Speaker 11: which I don't recommend, but five years later we are
Speaker 11: at three locations. We just brought on, you know, one
Speaker 11: of the more generational talents in this country to join
Speaker 11: the business, and we're super excited.
Speaker 2: How said, how did you get involved in it?
Speaker 12: So funny enough, I had heard about the cafe for
Speaker 12: a long time. Getting a great cup of chai is
Speaker 12: kind of a somewhat of a secret in our community.
Speaker 12: You talk about where you can get a great cup.
Speaker 12: I had heard about the cafe over in Nolita, and then,
Speaker 12: funny enough, my wife put me onto it. I get
Speaker 12: back home, I opened one of our drawers and it's
Speaker 12: full filled with KCC. Seriously, yeah, she goes, have you
Speaker 12: had Colcutta chain? And I go, yeah, I've heard about it?
Speaker 12: Is it the real deal? And it became Bena approved
Speaker 12: and therefore it became Hasan approved. And then I went
Speaker 12: down to the location their location, they're celebrating their five
Speaker 12: year anniversary this week, but I went down to the
Speaker 12: Nolita location and I saw the community that they've built.
Speaker 12: They now have three cafes, and of course I wass
Speaker 12: have the incredible DDC business and they've built this amazing
Speaker 12: omnichannel platform. You know, Annie got to chatting and a
Speaker 12: lot of times, you know, celebrities, we get asked to
Speaker 12: participate and hey, you should endorse this product. And what
Speaker 12: they'll do is they'll they'll use your name and likeness
Speaker 12: and they'll white label you with some commodity tequila sneakers
Speaker 12: T shirts and that's great.
Speaker 13: Or you like drink it on the Patriot Act, sure,
Speaker 13: or yeah yeah, show yeah, or you talk about the
Speaker 13: Samsung Galaxy Z Full three by Frizon five G the
Speaker 13: fastest five G network available.
Speaker 12: Right, I've done that commercial, but this is different. This
Speaker 12: is something where I genuinely loved the brand. I loved
Speaker 12: what they had been building, and I wanted to authentically
Speaker 12: tell our story through t is one of the largest
Speaker 12: markets that's growing right now, and getting a great cup
Speaker 12: of chai has been something that in our community we've
Speaker 12: always wanted and they really cracked the code, not only
Speaker 12: just from their brick and mortar business, but the fact
Speaker 12: that they broke the code with the massolid chi concentrate.
Speaker 12: So when I was having that great cup of tea
Speaker 12: at their location and Nolita, I was like, wait, this
Speaker 12: same cup can be here in New York City. I
Speaker 12: can have it in the Midwest, you know, you can
Speaker 12: have it wherever across the country. Which is which was like?
Speaker 12: That was?
Speaker 13: That was My good friend Kritty Gupta used to make
Speaker 13: me chy and bring it into work, and then unfortunately
Speaker 13: she was transferred to London. So now like I'm in
Speaker 13: the market, what is the secret to making it really
Speaker 13: truly authentic?
Speaker 12: H what's the coca cola recipe?
Speaker 8: Yeah?
Speaker 11: I wish I could no the secret is is my brother.
Speaker 11: He's the head chef, and he's figured out the perfect
Speaker 11: blend of tea, spice and a little bit of sugar
Speaker 11: to get that sweet and spicy balance. We sourced all
Speaker 11: of our tea from legacy tea estates in Assam in India.
Speaker 11: So this is where one hundred years ago they planted
Speaker 11: t two hundred years ago they started planting tea, and
Speaker 11: so all of our our product is coming from that region.
Speaker 11: So we're talking about the most authentic, you know, unfiltered
Speaker 11: product that you can find.
Speaker 12: What Paris is for fashion, I would say Assam is
Speaker 12: for tea.
Speaker 4: Would you agree with that?
Speaker 14: Honey?
Speaker 2: How big is the market? I have a daughter who
Speaker 2: loves it. Was in Tanzania, brought it back, loved it,
Speaker 2: loved it, loved it. So tell me how big the
Speaker 2: market is and tell us a little bit about the business.
Speaker 7: Yeah.
Speaker 11: So in the US, the package teap business market is
Speaker 11: about a fifteen billion dollar category, but it's growing slowly
Speaker 11: because tea is a little bit sleepy. However, you have
Speaker 11: these modern formats like macha, which is actually growing at
Speaker 11: a ten percent kagger and so we see ourselves as
Speaker 11: that next iteration of Macha. You mentioned, you know, the
Speaker 11: growing Asian American population in this country, and that is
Speaker 11: fueling this need for people to want to have the
Speaker 11: real thing. We don't want to go to you know,
Speaker 11: the takeout spots, to the fast food spots. We want
Speaker 11: that real, authentic from the source product. And so that's
Speaker 11: really where we're excited about chai as a new category
Speaker 11: and our business. So we've grown three hundred percent year
Speaker 11: over year, so we are on a rocket ship right now.
Speaker 11: Revenue upline revenue, and that's accelerated by our direct to
Speaker 11: consumer business and our e commerce products.
Speaker 2: So we do is that where most of the businesses
Speaker 2: and that's where the.
Speaker 11: That is where most of the revenue is yep. So
Speaker 11: we use our brick and mortar locations as community building
Speaker 11: and product introduction to the market since Child's relatively new,
Speaker 11: and then we celebrate that growth on direct to consumer.
Speaker 11: And so we have a best in class chai mix
Speaker 11: which is like a tea and spice mix, and we
Speaker 11: do a liquid concentrate product which Hussin alluded to as well,
Speaker 11: and you can make chai in thirty seconds at home.
Speaker 11: So we're gonna get you right.
Speaker 12: But what you guys were talking about was exactly the
Speaker 12: problem that they solved. Hey, I had a colleague that
Speaker 12: put me onto this great cup of chi. You know,
Speaker 12: my daughter came back. He give me this great cup
Speaker 12: of chie. And the difficulty has always been is how
Speaker 12: do you pack a package and product this great experience
Speaker 12: that you had somewhere in Tanzania or somewhere in Delhi
Speaker 12: or Mumbai or in Assam, and how do you get.
Speaker 4: It to the break room?
Speaker 13: Yeah, when that had out to go, you don't want
Speaker 13: to go to Starbucks and get the chai tea latte.
Speaker 12: I'm not here to throw in any other places. But
Speaker 12: but what cacc has also done, which is historical, is
Speaker 12: they're the first storefront location for a chai cafe. So
Speaker 12: this this thing that is different. Yeah, that's that's that
Speaker 12: has a deep resonance in our culture. It was usually
Speaker 12: relegated to like a side item that you would get
Speaker 12: at a restaurant. But this is like a true brick
Speaker 12: and mortar store front and an omni channel business.
Speaker 2: What do you do to grow it? So what's the plans?
Speaker 2: Is it more stores, is it more.
Speaker 7: Bring him on to grow right?
Speaker 2: Or do you also like it ends with us.
Speaker 12: It ends with us break a cup of tea in it.
Speaker 12: Yeah yeah, yeah, number one movie in the box office.
Speaker 2: But also like bringing it into other big retail.
Speaker 8: Yeah, no, you nailed it.
Speaker 11: I think right now our growth is happening on direct
Speaker 11: the consumer and e commerce. So that's really where we're
Speaker 11: dialing in new product formats, you know, new ways of
Speaker 11: advertising and telling that story. I think having Huston, you know,
Speaker 11: generational storyteller, bringing Chi to mainstream America through that type
Speaker 11: of format, through that pop culture format, that's what we're
Speaker 11: really excited about. And then to your point about retail
Speaker 11: expansion being in grocery stores, that's the next step for us.
Speaker 11: We want to be accessible to all Americans.
Speaker 12: For me personally, it was about a healthier caffeine alternative
Speaker 12: to coffee. No caffeine, there's no caffeine, but you know, yeah,
Speaker 12: not to get too scientific, but there's l fianine in it,
Speaker 12: which is almost like a like a cleaner, kind of
Speaker 12: healthier sort of kick that you get from Chi. So
Speaker 12: it and also for people who were if coffee's giving
Speaker 12: you a little bit of a rumble in the tumble,
Speaker 12: it's messing with your tummy a little bit chai is
Speaker 12: a great alternative to that, and so for me, I
Speaker 12: think people really want the real thing and they want
Speaker 12: a healthier alternative to coffee or espresso.
Speaker 13: And do you give did you give something to Blake Lively?
Speaker 13: I mean you passing it on to people who aren't Indian.
Speaker 12: You want to me, chai fundamentally is about community, family commiseration.
Speaker 12: It's like intrinsically linked to joy in being together and
Speaker 12: so like to me, the X factor to me was
Speaker 12: why isn't this having it's yerbamate or macha moment? And
Speaker 12: I think it really is about to have that.
Speaker 2: All right, this was almost perfect. It would have been
Speaker 2: perfect if you had brought us a cup.
Speaker 12: But did you want a cup? We could have plugged it.
Speaker 2: I'm just saying, hausin minhaz and anis Sanyelle, thank you
Speaker 2: so much, really appreciate it. Called Katta Chai company. This
Speaker 2: is Bloomberg.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from two to five pm Eastern Listen
Speaker 1: on a book, our play and and broud Auto with
Speaker 1: a Bloomberg Business at or watch us live on YouTube.
Speaker 2: All right, she is definitely one of my all time
Speaker 2: favorite people here, no doubt about it. I know, Matt,
Speaker 2: you think it's you, but it's really Hannah Elliott. She's
Speaker 2: Bloomberg Pursuit's auto columnist who's also a MATS co host
Speaker 2: on the Hot Pursuit podcast. And we've got a lot
Speaker 2: to talk about.
Speaker 8: Yes, where do you want to start?
Speaker 13: I go go because I don't know where do you
Speaker 13: want to start? We had a great time yesterday. We
Speaker 13: record our podcast yesterday, we put it out tomorrow, and
Speaker 13: we talked about a number of things from a car
Speaker 13: show they went to over the weekend, a big a
Speaker 13: big land yacht that I was driving, the Infinity QX eighty,
Speaker 13: and also air fresheners.
Speaker 2: I really want to get to that, but go do
Speaker 2: cars first, Let's talk start.
Speaker 13: Let's talk first about the giant suv that I was driving,
Speaker 13: which I really liked. The Infinity QX eighty. It's all new,
Speaker 13: the twenty twenty five model year, and Hannah's going to
Speaker 13: get it next week. What do you think about these
Speaker 13: giant three row SUVs? Hannah?
Speaker 2: How big is too big?
Speaker 15: I was going to say, I didn't want to interrupt you,
Speaker 15: but I can ask you plenty of questions about it. Matt,
Speaker 15: You know my my question is, and this is going
Speaker 15: off of our conversation that we had on our podcast.
Speaker 15: You mentioned that you thought it looked great and then
Speaker 15: you kind of compared the interior to a Chevy and
Speaker 15: I know that, and I know that this suv costs
Speaker 15: about one hundred thousand dollars. So my question to you
Speaker 15: is is it worth it? Would you spend if you
Speaker 15: had one hundred grand to spend on a big, big suv,
Speaker 15: would you buy this one's sheet?
Speaker 14: So no, I mean it's a good point.
Speaker 13: What I meant was that the infotainment system is a
Speaker 13: Google based system. Okay, so that's a platform that they used,
Speaker 13: and Chevy also had that in my Silverado. And but
Speaker 13: I would compare this more to Chevy's Cadillac brand and
Speaker 13: their Escalade. So this is an Escalade range Rover competitor.
Speaker 13: If I was looking at one of those cars in
Speaker 13: the same price, I might consider this as an alternative.
Speaker 13: The problem is that you can get a range Rover
Speaker 13: with a V eight, You can get an Escalade with
Speaker 13: a V eight. You cannot get the QX eighty with
Speaker 13: a V eight. It only comes with a twin turbo
Speaker 13: V six, and it's the same problem that Ford and
Speaker 13: Lincoln have. They just don't put out big V eight's
Speaker 13: in their giant trucks anymore. And in something that weighs
Speaker 13: like eight pounds, you really need V power for me
Speaker 13: to enjoy it.
Speaker 15: I have to say, I don't know if it's a
Speaker 15: problem for them, Matt, because they're saving emissions, they're probably
Speaker 15: getting a little bit better fuel efficiency. And frankly, I
Speaker 15: don't know if you know the mom's buying these family hollers,
Speaker 15: do they care that it's a V eight Because if
Speaker 15: I don't think I would.
Speaker 2: The seats comfy? Can I put the kids in the
Speaker 2: back and well, this thing pack them in for soccer?
Speaker 13: Not only do I think it looks beautiful, but the
Speaker 13: interior is very comfortable, and the leather is super nice,
Speaker 13: and the color, the design.
Speaker 2: Is what's the mileage on that puppy?
Speaker 13: It's sixteen city nineteen highway, so it is one mile
Speaker 13: per gallon better than the V eight that they had
Speaker 13: last year, which doesn't matter to you, but I guess
Speaker 13: if they sell, you know, one hundred thousand of them.
Speaker 2: Then it does.
Speaker 15: Here's another question for you, Matt. How did you feel
Speaker 15: pulling into sort of a posh event in the Hamptons
Speaker 15: in an infinity, did you feel like you were sort
Speaker 15: of on par with the Ferraris and Lamborghinis or no.
Speaker 13: No, obviously not on par with the Ferraris and Lamborghinis.
Speaker 13: There were a ton of them at the bridge, which
Speaker 13: is the show Carsho. I went to, you know, everybody
Speaker 13: like a Rolls Royster or Maserati. But you know other
Speaker 13: people were driving in the Defenders and the Broncos, and yes,
Speaker 13: in the big Escalades and range Rovers. I did feel okay,
Speaker 13: you know, it looks the part, so it didn't bother me.
Speaker 13: It also smelled pretty good.
Speaker 2: Nice, thank you. Well, can we talk about these air fresheners,
Speaker 2: because I do care about I have something that I
Speaker 2: spray in my car like every time I go in.
Speaker 2: It's like some organics.
Speaker 13: Also, Carol smells delicious right now, I will tell you.
Speaker 15: I believe it.
Speaker 2: It's actually a brand that you to fatigue, which I'd
Speaker 2: never heard of before I read your story.
Speaker 8: Hannah.
Speaker 13: So your point on air fresheners is the cheap ones
Speaker 13: are the worst, right, but the expensive wonder wait, the
Speaker 13: hanging tree is.
Speaker 15: Not good, you know, what news flash, the hanging tree
Speaker 15: is not good and anything you buy in your gas
Speaker 15: station is probably not going to be good. And there's
Speaker 15: a specific and very real reason for that, which is
Speaker 15: they those are made with the least expensive materials and
Speaker 15: with the least expensive chemicals. And what we found we
Speaker 15: hear At Pursuits, tested ten different air fresheners for the car,
Speaker 15: and we did found that find there's a direct correlation
Speaker 15: between price and quality, and the more you pay, you're
Speaker 15: going to tend to get a better, less nauseating air freadare.
Speaker 15: But the bigger thing that I found with this story,
Speaker 15: which to me was really interesting, because we all have
Speaker 15: very specific ideas about what kind of smell we want
Speaker 15: in our car. I think everybody wants the new car smell,
Speaker 15: of course, and then once that wears off, it's like
Speaker 15: you don't want curry or fish or like like smells
Speaker 15: that are great to eat but not necessarily to drive. With.
Speaker 15: The idea is this is a really big open space
Speaker 15: that automakers and large fragrance brands haven't really attacked in
Speaker 15: the past, but they're starting to very smart and yes
Speaker 15: they're smart. It's so there are ten including some offerings
Speaker 15: from Diptique, some offerings from Frederick mal some offerings from
Speaker 15: Aqua to Parma. There are these known fragrance companies that
Speaker 15: are starting to develop freshnurs for your car. But also
Speaker 15: they could double. A lot of them could double as
Speaker 15: great like things to put in your closet, your linen closet, drawers, handbags,
Speaker 15: that's sort of name.
Speaker 2: I love it, one called sex wax, but we're going
Speaker 2: to leave it on that new mister. Don't touch it.
Speaker 2: Don't touch it, Matthew Miller.
Speaker 15: No, no, no, and that thinks. So many people recommended
Speaker 15: it to me.
Speaker 4: Yeah, and it's bad.
Speaker 2: We got to run. Hanna Elliott, you're the best, Matt Miller,
Speaker 2: thank you so much. We'll see you tomorrow.
Speaker 13: Tune into our podcast Hot Pursuit.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from two to five pm. Easter Listen
Speaker 1: on Apple.
Speaker 4: Car Play and then brought Auto with a Bloomberg.
Speaker 1: Business app, or watch us live on YouTube.
Speaker 2: The Goat selling watches and watching a coffin and dead
Speaker 2: celebrities working again thanks to AI. I guess there's a
Speaker 2: theme there.
Speaker 4: Okay, wait, I'll wait.
Speaker 3: All from our Bloomberg Proceeds Team, a new issue out
Speaker 3: featuring some of the latest and greatest. Here to talk
Speaker 3: about all of it all is the editor of Bloomberg Pursuits,
Speaker 3: Chris Rouser, along with Bloomberg Pursuits columnists who heads up
Speaker 3: our arts and culture coverage, James Tarmi, both joining us
Speaker 3: in the studio. Chris, I gotta tell you, I don't
Speaker 3: think Carol actually believes Tom Brady's the goat.
Speaker 4: And I, okay, I also have like a little.
Speaker 2: You know, there's more than one goat, is my point.
Speaker 2: Serena Williams is a goat, of course, Yeah yeah, yeah, yeah, okay,
Speaker 2: So I didn't were we.
Speaker 16: Operating under the presumption that there was only one goat?
Speaker 4: Carol's across all fields.
Speaker 3: Let's just say Carol doesn't sound like a huge Tom
Speaker 3: Brady fan.
Speaker 14: Get ready for a lot of man.
Speaker 2: He's fine, He's fine, He's fine. All right, moving on,
Speaker 2: moving on, what's up to Chris?
Speaker 16: Well, Tom Brady is selling a lot of his memorabilia
Speaker 16: that is game warn jerseys, helmets.
Speaker 2: And which do they smell like?
Speaker 8: Tom?
Speaker 16: People will pay Actually.
Speaker 2: We just went down a weird street, but go ahea
Speaker 2: and of.
Speaker 16: A special interest to me. He's also selling a bunch
Speaker 16: of very expensive watches.
Speaker 2: He's got quite a collection.
Speaker 3: This do this Nadal watch is pretty cool.
Speaker 16: Yeah, so he has a baby Nadal, which is a
Speaker 16: watch that was made in partnership with Raphael Nadal and
Speaker 16: Reshard Meal. And they're not to everyone's taste, but the
Speaker 16: Reshart Meal watches are. People call them the billionaire's handshake.
Speaker 16: And this one's estimated to sell between three hundred and
Speaker 16: five hundred thousand. It was a colorful kind of watch.
Speaker 2: The one that I really thought is kind of in
Speaker 2: your face is the one that's like Tom Brady like.
Speaker 14: On the dial, well, it literally says Tom Brady in
Speaker 14: diamonds and then there's a seven also on the dial
Speaker 14: to symbolize his seven Super Bowl victories. And that's yours
Speaker 14: for a mere four hundred to eight hundred thousand.
Speaker 16: I think it'll go for more. I mean it's it's
Speaker 16: a custom made royal oak from Odemar Pigue. There are
Speaker 16: like internal chats on the Bloomberg terminal where people talk
Speaker 16: about watches, and they exploded about this because everybody thinks
Speaker 16: it's really horrible and everybody wants to watch to own it. Wow,
Speaker 16: he wore it during his roast his famous Netflix roads. Yeah,
Speaker 16: but it's not clear to me whether he commissioned it
Speaker 16: or someone gave it to him or the company gave it.
Speaker 3: I'm actually surprised Carol wasn't up there roasting him.
Speaker 14: My understanding security.
Speaker 2: Now he commissioned it, commissioned it?
Speaker 5: Yes?
Speaker 2: What does that say?
Speaker 8: Hey?
Speaker 2: What's the market though? For these kinds of watches right now?
Speaker 16: So the watch market at auction and across memorilia generally
Speaker 16: everything is softening, and just secondhand watches in general, which
Speaker 16: were so so hot during the pandemic. Sothebies, who's auctioning
Speaker 16: off this stuff, says that the single owner sales, like
Speaker 16: celebrity owned sales, are still doing well for them, and
Speaker 16: Sylvester Stallone sold some really crazy watches for many millions
Speaker 16: of dollars earlier this year, So this is kind of
Speaker 16: These are special cases that it's really hard to put
Speaker 16: them in the context of the broader collectibles market because
Speaker 16: people love Tom Brady so much, and I honestly think
Speaker 16: these estimates, which are three hundred and five hundred thousand, yeah,
Speaker 16: I think they're low.
Speaker 2: They're also coming straight from him it's not like somebody
Speaker 2: else owned them and they're putting the collection up for sale.
Speaker 4: Why is he getting rid of this stuff?
Speaker 14: Well, I asked that question, and first of all, they
Speaker 14: didn't give me a straight answer. Secondly, there is some
Speaker 14: speculation out there that he is kind of thoughtfully timing
Speaker 14: the market.
Speaker 4: That this is.
Speaker 14: You are actually seeing an uptick, as Chris says, in
Speaker 14: demand for these single owner memorabilia sales, but you're also
Speaker 14: seeing a continued softening of the memorabilia market. So if
Speaker 14: he's able to time this right, I mean, let's put
Speaker 14: it this way. This is not the only watches that
Speaker 14: he has. Yeah, and also these are not the only
Speaker 14: jerseys and helmets that he has. So I think if
Speaker 14: he's able to again this is pure speculation, but kind
Speaker 14: of time the market in a nice way and clean
Speaker 14: ups to the tune of eleven or more million dollars.
Speaker 2: Yeah, one mariecondo, right, Like.
Speaker 16: It's just the time. I think it's like that's why
Speaker 16: I think a sliced salone also sold his watches.
Speaker 2: All right, let's talk about a watch with a coffin.
Speaker 16: Oh yes, so this in Business Week in this last issue,
Speaker 16: we featured a company which I've always thought is very interesting.
Speaker 16: Is called Chrono Swiss and it's an independent Swiss watchmaking brand,
Speaker 16: and it was started in nineteen eighty three during the
Speaker 16: Courtz crisis, which is when battery powered watches began killing
Speaker 16: off all mechanical watches because they were seen as more
Speaker 16: accurate and just more efficient and much more inexpensive. And
Speaker 16: this guy who was working for Hoyer, which is a
Speaker 16: big company, was going to get laid off and the
Speaker 16: company couldn't afford to pay him in his last paycheck,
Speaker 16: and so he said, you know what, just give me
Speaker 16: a bunch of those old mechanical movements, which are the little,
Speaker 16: you know, the engine of a watch, because you don't
Speaker 16: want them anymore. They're they're basically worthless. You're going to
Speaker 16: switch to courts. And so they paid his last paycheck
Speaker 16: in these movements and he went off and started this
Speaker 16: company in his garage in Munich with his wife in
Speaker 16: nineteen eighty three called Chronoswiss, and it was basically focused
Speaker 16: on keeping mechanical watches alive. Now, mechanical watches all these
Speaker 16: years later are very big and they're very brightly colored.
Speaker 4: They're really cool.
Speaker 16: They use all these old watchmaking techniques like yo'she which
Speaker 16: are these like hand carved metal dials, but like bright colors,
Speaker 16: really high tech new chemical vapor deposition to get really
Speaker 16: great color and metallic finishings. And so they make these
Speaker 16: wild watches. And they had a Dracula watch that came
Speaker 16: out this year which I thought was so funny. It's
Speaker 16: eighteen carrot gold, it's grand faux enamel, and if you
Speaker 16: order it, it arrives in a.
Speaker 4: Coffin, like an actual coffin.
Speaker 16: It's a watch size cars.
Speaker 4: Okay, just making sure.
Speaker 3: I just want to make sure before we get to
Speaker 3: some real estate. There's another watch story that I want
Speaker 3: to hit social media. Kind of all over social media
Speaker 3: in recent weeks was the former president and current Republican
Speaker 3: nominee Donald Trump selling one hundred thousand dollars watches, which makes.
Speaker 2: Me wonder if Tom Brady might buy one, because aren't
Speaker 2: they buds?
Speaker 14: No comment?
Speaker 3: Okay, okay, what's up with these watches?
Speaker 16: So Donald Trump? Donald Trump is actually a watch collector.
Speaker 16: He has some nice watches, Vastrond Constantine. I think he
Speaker 16: has a Rolex Protect Philips, and you know he whenever
Speaker 16: he sells stuff, that's kind of like feels like something
Speaker 16: he would wear or do his fans buy it. So
Speaker 16: he started with an independent company. He started he basically
Speaker 16: licensed his name, and they're making a couple of lower
Speaker 16: price watch lines for like five hundred dollars, seven hundred dollars,
Speaker 16: and then some higher price watches for one hundred thousand
Speaker 16: dollars which are solid gold. You can get them in
Speaker 16: rows or yellow gold. And they have a turbion complication,
Speaker 16: which is as a thing that helps the accuracy of timekeeping.
Speaker 16: It's an expense complication to make on a watch. I
Speaker 16: went through and did some comps and it it's not
Speaker 16: it's overpriced probably for what it is, but I really
Speaker 16: think people are people will buy them. There's only they're
Speaker 16: only making like one hundred and forty seven reference to
Speaker 16: him being the going to be one hundred of the
Speaker 16: forty seventh presidents.
Speaker 4: Why why do one hundred and forty seven?
Speaker 14: Yeah, doesn't I sign them?
Speaker 16: He signs them on the back, yep. And they've become
Speaker 16: they all come with a personalized message. And I heard
Speaker 16: from some of our readers that people will definitely be
Speaker 16: buying them.
Speaker 3: Okay, all right, how about from watches to a thirty
Speaker 3: million dollar house a beach front in the oil Nut
Speaker 3: Bay development on Virgin Gorda James because just talking about
Speaker 3: beach Shack at one point it was yeah she she missus.
Speaker 3: Mac was not so happy with the home when they
Speaker 3: bought it.
Speaker 4: Give us the give us the store.
Speaker 14: So this house is currently owned by Mac the former
Speaker 14: chief executive officer of Morgan Stanley, and his wife Christy,
Speaker 14: and they spent a really, really really long time renovating
Speaker 14: this house and they spent a huge amount of money.
Speaker 14: They told me that they spent eighteen million dollars renovating
Speaker 14: the house after they bought it. And it was a
Speaker 14: spec house. It's it's it.
Speaker 8: Yeah.
Speaker 14: So so the houses.
Speaker 2: Was it gut? Did they build what they did gout?
Speaker 14: No? No, they kept the total footprint, They kept the roof,
Speaker 14: and they kept the walls more exterior walls more or less,
Speaker 14: and they just did the inside and really got it
Speaker 14: and they moved windows, they moved doors.
Speaker 3: And while they were doing that, a hurricane came through
Speaker 3: and ripped everything apart and they had to do it again.
Speaker 14: They said to me they had to do reconstruction. Of
Speaker 14: the reconstruction, but you know, it has a lot going
Speaker 14: for it. It's on the beach, it is right near
Speaker 14: this very very exclusive oil Nut Bay development clubs, so
Speaker 14: you have the amenities of it. You can just go
Speaker 14: to the gym, you can play tennis. But it is
Speaker 14: now on sale and you can buy it, or I
Speaker 14: can't buy it, but one can buy it for twenty
Speaker 14: nine point five million dollars.
Speaker 2: Do they make any money on this puppy.
Speaker 14: Well, you know, honestly, I don't think so, because it's
Speaker 14: gonna have cost them basically twenty eight to twenty nine
Speaker 14: million dollars all in and they're selling it for twenty
Speaker 14: nine and a half million dollars. So I think they're
Speaker 14: really just trying to get their money out of it.
Speaker 2: This was not a good flip. I'm just gonna say.
Speaker 14: You know, I don't get the impression that it actually
Speaker 14: was a.
Speaker 4: Flip, you know.
Speaker 2: I think I think they're really.
Speaker 14: Trying to kind of marie condo their own lives from
Speaker 14: a super rich level and getting rid of one of
Speaker 14: what they told me was severalification homes.
Speaker 3: But it does seem like there was some nice flexibility
Speaker 3: with the home, like they wanted it for sort of
Speaker 3: every purpose.
Speaker 4: Under the sun.
Speaker 3: You could imagine a home here being used for.
Speaker 14: Completely and it can have it can easily accommodate twelve
Speaker 14: guests more than that. But also, you know, it's actually
Speaker 14: not such a sprawling house that you're going to feel
Speaker 14: like you're alone in a castle. If you've just you
Speaker 14: and a friend or you and.
Speaker 2: A spouse, everything customed to in it, which is pretty amazing.
Speaker 3: Chris Setti heard from folks who are going to buy
Speaker 3: the Trump Watch. Have you heard from the readers who
Speaker 3: are planning to buy this?
Speaker 14: Interestingly, I have not. And sometimes when we do publish
Speaker 14: these listings, we either we find out immediately that someone
Speaker 14: has read cell houses.
Speaker 3: Yeah, yeah, yeah, that's incredible.
Speaker 8: It is.
Speaker 14: It is kind of and we find out immediately that
Speaker 14: these these things have sold off off of articles that we.
Speaker 16: Because James talks to the brokers for the story and
Speaker 16: then they call and they'll be like, yeah, that ten
Speaker 16: million dollars house in Montalk, someone read the story about it.
Speaker 2: There's a side revenue street.
Speaker 16: We do not get the cuts.
Speaker 2: Well, you know who's going to be starting to get
Speaker 2: cuts a dead celebrities thanks to the eye. Oh yeah,
Speaker 2: what's going on?
Speaker 16: This is big. So basically when a celebrity has two
Speaker 16: ways of making money they can. It's personal services, which
Speaker 16: is them performing, them doing concerts, readings, writing books. And
Speaker 16: then there's their intellectual property basically, and so when a
Speaker 16: celebrity dies, their personal services income goes away because they
Speaker 16: can no longer produce work, but their intellectual property continues
Speaker 16: to exist. And celebrities have estates. For example, Michael Jackson
Speaker 16: was five hundred million dollars in debt when he died.
Speaker 16: Now his estate over two billion. Has made over two
Speaker 16: billion dollars through this Broadway Show, through other like app
Speaker 16: posthumous albums, and generally that's not usual. Generally, like a
Speaker 16: celebrity's net value decreases about ten percent per year after
Speaker 16: they die. Now with AI they can create new work,
Speaker 16: and so they're not creating new work, but computers are
Speaker 16: creating anywhere. So there's this company called eleven Labs which
Speaker 16: has a reader app which is an example of how
Speaker 16: you can do this, and basically, Judy Garland, Lawrence Olivier,
Speaker 16: Burt Reynolds, all their estates have signed with this app
Speaker 16: and they can they'll read books for you. James Dean
Speaker 16: can read you The Legend of Sleepy hollow and you
Speaker 16: can put in your own stuff. So literally, Judy Garland
Speaker 16: could read your tax returns.
Speaker 2: That's pretty cool.
Speaker 3: If they can do this for dead celebrities, they can
Speaker 3: do this for people who are alive right now. And
Speaker 3: this has huge implications.
Speaker 16: Yeah, oh yeah, yeah. I mean deep fake technology is
Speaker 16: a problem, and you know we Taylor Swift has been
Speaker 16: a victim of stuff, like politicians. I mean, that's a
Speaker 16: big issue. And some people who managed dead celebrities of
Speaker 16: states say this is this is not good, like we
Speaker 16: should not be doing it. The guy who owned like
Speaker 16: represents Jim Morrison's a state, Dennis Joplin, He's like, these
Speaker 16: artists will never make any more work. They're gone, Like
Speaker 16: this isn't what it's for. Pressure what they did right,
Speaker 16: Like a lot of other people are going for it.
Speaker 14: I mean, can I just say that I recognize the criticisms,
Speaker 14: but you know, there's pictures of Audrey Hepburn next to
Speaker 14: a pearl necklace that Tiffany's is selling or whatever. You know,
Speaker 14: people use dead celebrities licenses all the time. To me,
Speaker 14: this doesn't as long as it's clearly labeled as like
Speaker 14: an AI version of it, it doesn't seem that much
Speaker 14: of a bridge.
Speaker 8: Yeah, I think.
Speaker 16: People just worry about, yeah, the gray areas where it's
Speaker 16: not clearly labeled. So like, there's a show called Elvis
Speaker 16: Evolution which is premiering in London. It's an in person
Speaker 16: show and they're going to have Elvis through Ai performing
Speaker 16: for the first time in forty five years, and it's
Speaker 16: just going to be a big test of like whether
Speaker 16: people actually want to go see that or whether they're
Speaker 16: creeped out by it. Ab A Voyage, which is sort
Speaker 16: of a hologram version of the same kind of thing,
Speaker 16: but abba all of those members are alive and they
Speaker 16: were part of it, is actually quite popular, So maybe
Speaker 16: this could be a thing.
Speaker 2: Yeah, you know, I don't know. It's kind of cool.
Speaker 2: Hey listen before we go, just real quickly, James Ptarmi,
Speaker 2: you have an article about the best movies, books, TV
Speaker 2: and exhibitions coming in October. Can you pick just one
Speaker 2: for us?
Speaker 14: You know, I can this for Contacts. We did a
Speaker 14: big culture issue and culture preview, and one of the
Speaker 14: many recommendations that I put out, I'm really really excited
Speaker 14: for the Louisiana Museum. Outside of Nice Copenhagen. They in Denmark.
Speaker 14: They have this huge, extremely unconventional show about the ocean
Speaker 14: and it's artworks, it's science, it's history, and it's quite
Speaker 14: unusual for this day and age, both thematically and also conceptually.
Speaker 14: And I know a lot of people who are going
Speaker 14: out of their way to see it, and I am
Speaker 14: going to do my best to do the same.
Speaker 16: And Linn Manuel Miranda is coming out with a concept
Speaker 16: album for what could possibly be his next show. It's
Speaker 16: called The Warriors. It has all these hip hop stars,
Speaker 16: all these Broadway stars. It's going to be amazing.
Speaker 2: I saw that. I was curious about that. All right,
Speaker 2: cool stuff. Guys always always appreciate all that you guys
Speaker 2: do to you.
Speaker 3: Guys who can never ever be replaced by Ai Bloomberg
Speaker 3: Pursuits columnist James Carmon, who oversees.
Speaker 14: Sounds like a threat our coverage, and the editor of
Speaker 14: Bloomberg Pursuits, Chris Rouser.
Speaker 4: Here in our studio.
Speaker 1: This is the Bloomberg Business Week podcast, available on Apple, Spotify,
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