Speaker 1: This is Bloomberg business Week Inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news. The Bloomberg Business Week
Speaker 1: Podcast with Carol Masser and Tim stinebec from Bloomberg Radio.
Speaker 1: The war in Ukraine is set to enter its second year,
Speaker 1: and it's becoming clear that the cost to both sides
Speaker 1: will turn out to be intolerably high. There's no outcome
Speaker 1: that looks favorable to Moscow or Kiev. The longer the
Speaker 1: conflict lasts, the higher the economic cost, and worse, the
Speaker 1: higher the death toll will climb. For more, return to
Speaker 1: Bloomberg News Automation editor and opinion columnist Leonid Bursitsky and
Speaker 1: Bloomberg Business Week editor Joel Weber. Joel, I want to
Speaker 1: kick it off with you. How does the magazine team
Speaker 1: approach something like this, put this conflict into perspective twelve
Speaker 1: months in? Well, we really have been looking at this
Speaker 1: mark for a second, and the newsroom as a whole
Speaker 1: is obviously very key on it that that one year
Speaker 1: mark obviously is the thing that we can kind of
Speaker 1: all look towards, and and we wanted it to be
Speaker 1: a way of not only looking back on what's happened,
Speaker 1: but also what it means to come. And that's why
Speaker 1: we turned to leon And he'd done a cover story
Speaker 1: for us earlier in the year, and we are last year,
Speaker 1: and we wanted to return to him to sort of
Speaker 1: to to get a sense of his perspective on it.
Speaker 1: Um as somebody who who is from Russia originally and
Speaker 1: and left um and you know where we started where
Speaker 1: with some numbers. The economic toll here has just been devastating,
Speaker 1: But as Leonid writes, it's not only just on the
Speaker 1: Ukrainian side, where obviously um Putin's invasion um has had
Speaker 1: a huge impact, but it's also really beginning to show
Speaker 1: up on the Russia side. So so leon had walked
Speaker 1: us through your thesis and how things might unfold. Yet
Speaker 1: the physical devastation is obviously on the Ukrainian side, all
Speaker 1: of it. There's pretty much no more relates of damage
Speaker 1: physical damage to to Russia. He would, uh, some shells
Speaker 1: are reaching the Russian regions bordering on Ukraine. The actual
Speaker 1: destruction is all on Ukrainian territory because the war is
Speaker 1: being fought there. Um on the other hand, the sanctions
Speaker 1: against Russia are pretty devastating. The Russian economy was worth.
Speaker 1: The Russian GDP was about one point eight trillion dollars
Speaker 1: in two thousand twenty one, which made it much much
Speaker 1: bigger than the Ukrainian economy, which was about two hundred
Speaker 1: billion I think. So the Ukrainian GDP dropped one third
Speaker 1: between thirty and one third uh for two. The Russian
Speaker 1: GDP only dropped about three percent, and also it was
Speaker 1: supposed to grow three percent, So the total is like
Speaker 1: six percent of the two thousand twenty one GDP. In
Speaker 1: in absolute numbers, Russia has actually lost more than Ukraine
Speaker 1: because the Russian economy was so much bigger to start
Speaker 1: with before the war. And that is before we start
Speaker 1: factoring in the loss of life, the immigration, the you know,
Speaker 1: all of these factors that are also war related. Leon
Speaker 1: the loss of life in terms of people who have
Speaker 1: actually you know, died as a result of this war,
Speaker 1: but also people who are leaving the countries, whether it's
Speaker 1: Russia or Ukraine. You do think about the lasting impact
Speaker 1: of that that when we get fingers crossed on the
Speaker 1: other side of this, what it ultimately means. Well, here
Speaker 1: in Berlin, ware I live UM also as a Russian
Speaker 1: immigrande basically who who left Russia on the war actually
Speaker 1: began into thousand and fourteen. UM, we see a lot
Speaker 1: of huge influx of people from both Ukraine and Usha.
Speaker 1: And a year's a year after the war began. Um,
Speaker 1: some of these families have settled in and you know,
Speaker 1: the kids are in school. Uh, people have found jobs,
Speaker 1: they've learned the beginnings of the language. A lot of
Speaker 1: the Ukrainian refugees too, are not going to go back.
Speaker 1: The German Migration Office recently held a poll that showed
Speaker 1: about thirty percent of the Ukrainian refugees are not planning
Speaker 1: on going back to Ukraine after the war is over.
Speaker 1: The actual percentage is probably higher, even apart from you know,
Speaker 1: the actual war damage, the actual casualties, the loss of
Speaker 1: the brain drain, the loss of talent, the loss of
Speaker 1: active people, and I mean it is active people who
Speaker 1: leave under such circumstances. In Ukraine, it's overwhelmingly women and
Speaker 1: and they've taken their kids with them, so that there's
Speaker 1: going to be extended fallout. The human losses for both
Speaker 1: economies will be substantial. So premature to even imagine what
Speaker 1: the world here might look like. Imagine a world where
Speaker 1: the battlefield we finally might have a version of the
Speaker 1: truth or something. What would it look like on both
Speaker 1: sides when this conflict eventually does. Yeah, yeah, we're definitely
Speaker 1: looking at the well. The worst part of this is
Speaker 1: that it's almost impossible to imagine and and being to
Speaker 1: the military action at this point because there's really no
Speaker 1: common ground. There's no way that the sides can agree
Speaker 1: on anything until um, one of them is satisfied that
Speaker 1: it's one and you know, victory for both sides seems
Speaker 1: your remote at this point. But even just imagining something
Speaker 1: has happened when the war has ended, the sanctions against
Speaker 1: Russia will not be lifted again, even even with Russia loses.
Speaker 1: They can only be lifted if the Putting regime falls
Speaker 1: uh and the successors are more pro Western and then
Speaker 1: willing to uh you know, to to to take pretty
Speaker 1: unimaginable steps um uh in terms of rejoining the Western world.
Speaker 1: So these the sanctions are going to be around for
Speaker 1: many years. The devastation in Ukraine requires hundreds of billions
Speaker 1: of dollars of investment to just to rebuild what was destroyed. Um,
Speaker 1: it's not clear where that kind of money would come from. UM.
Speaker 1: From Russian reparations. Uh, it's not clear how much in
Speaker 1: terms of reparations Russia would actually be able to pay. UM.
Speaker 1: Whether it's possible to confiscate any of the frozen Russian
Speaker 1: international reserves to fund the rebuilding of Ukraine. UM. It's
Speaker 1: not clear how interested Western governments will be in providing
Speaker 1: more money once the war is over, especially the enormous
Speaker 1: amounts that are required because the entire cities have been
Speaker 1: wiped off the face of the earth. And you know
Speaker 1: one thing I do wonder though, when you write about
Speaker 1: in the story, I mean Russia's role in the energy
Speaker 1: markets has given it a ton of money, right in
Speaker 1: terms of supporting the war financially. Um. But again you've
Speaker 1: got the embargoes right, and the pushback against the world
Speaker 1: when it comes to Russian oil. Does that those somehow
Speaker 1: help them in the future or time will tell UM, Well,
Speaker 1: it's the embargoes are not really helping Ukraine in any way,
Speaker 1: because the Russian regime funds this war and then thinks
Speaker 1: of everything else and there's still enough. It's still selling
Speaker 1: enough oil to the likes of India, China. UM. You know,
Speaker 1: Asian markets to fund the military action. UM. It's it's
Speaker 1: not like a complete global embargo on Russian oil and
Speaker 1: Russian energy resources would probably help, because then Russia would quickly,
Speaker 1: relatively quickly run out of money. But as Russia retains
Speaker 1: the ability to sell some energy resources h and also
Speaker 1: things like fertilizer and agricultural products that are not sanctioned
Speaker 1: at all, the money will go into the so called
Speaker 1: special operation first and everything else second. Well, I have
Speaker 1: to say, the way you end the story, you say,
Speaker 1: add it all up. It's increasingly evident that neither side
Speaker 1: can emerge in economic winner. No matter what happens on
Speaker 1: the battlefield, both will suffer crippling consequences long after the
Speaker 1: last shells light. It's an incredible read, and as Joel mentioned,
Speaker 1: like you really you put the numbers on it, but
Speaker 1: you do wonder about the devastation and how no one
Speaker 1: really wins um as a result of this war. Leona,
Speaker 1: thank you so much, really appreciate it. Many thanks to
Speaker 1: Bloomberg News automation editor and opinion calumnist Leonid Breschitsky for
Speaker 1: his work on this week's cover story. Joell Webber, of course,
Speaker 1: the editor of the magazine. He's going to stick with
Speaker 1: us for the next segment. Be sure to check out
Speaker 1: the magazine though, for additional coverage of the war in Ukraine,
Speaker 1: including the shrinking armstock piles of both countries and a
Speaker 1: photo essay on displaced Ukrainians. You're listening to the Bloomberg
Speaker 1: Business Week podcast. Catch us live week days from two
Speaker 1: to five m start on Bloomberg Radio, The Bloomberg Business
Speaker 1: and You too. You can also listen live to our
Speaker 1: flagship New York station, Just Say Alexa, Play Bloomberg E,
Speaker 1: Love and Dirty. So as technology seeps into every walk
Speaker 1: of life, an increasing proportion of Supreme Court decisions require
Speaker 1: at least a basic literacy and subjects that may not
Speaker 1: come naturally to the aging members. Not my words, they
Speaker 1: are the words of Bloomberg's Gregg Store, who writes about it.
Speaker 1: The upcoming new issue of Bloomberg Business Week out on
Speaker 1: newstands later this week, already on the Bloomberg and at
Speaker 1: Bloomberg dot Com slash business Week. Greg as you know,
Speaker 1: Supreme Court reporter here at Bloomberg. He joins us from
Speaker 1: our nine and nine one studio in Washington, d C.
Speaker 1: Also with us. The editor of Bloomberg Business Week told Webber,
Speaker 1: He's in our Bloomberg Interactive Brokers studio. I've often thought
Speaker 1: about this, and we talked about this with lawmakers, like
Speaker 1: do they understand kind of all the high tech stuff
Speaker 1: that they're legislating. Well, that's what Greg came to us with.
Speaker 1: UM and this is just one of those ones where
Speaker 1: he really picked up the phone. He was very excited.
Speaker 1: He was like, Joel Children, I got to talk to
Speaker 1: you about this idea. UM. And and it turns out that, UM,
Speaker 1: this is not a totally new idea, but it's really
Speaker 1: relevant right now because of the case they're gonna here
Speaker 1: next year, which we will basically focus on section thirty
Speaker 1: and what that means for the future of the internet. UM,
Speaker 1: so rewind the clock a little bit for us, Greg,
Speaker 1: What what happens when Elena Kagan and Stephen Brier sit
Speaker 1: down and play Grand Theft Auto like they did about
Speaker 1: a decade ago. We just soak in that moment for Yeah,
Speaker 1: I wish I could have been a fly on the
Speaker 1: wall for that that one. Yeah, this is a case
Speaker 1: about a decade ago. It was a California law that
Speaker 1: banned the sale of violent video games to minors, and
Speaker 1: so Justice Brier, who was then in his early seventies,
Speaker 1: and Justice Kagan decided, we don't know a whole lot
Speaker 1: about violent video games, so we're going to check them out.
Speaker 1: And so, uh, they had it set up in Justice
Speaker 1: Briar's chambers and went down there and played Grand Theft
Speaker 1: Auto to try to learn a little bit about it.
Speaker 1: As it turns out, according to Justice Kagan, she was
Speaker 1: a lot more enthusiastic about it than he was. He
Speaker 1: thought it was really awful and disgusting, and she was like,
Speaker 1: next round, next round. Uh, you know, we have more
Speaker 1: we have more reporting to do on Kagan's video game
Speaker 1: obsession if it if it became that, you know, including
Speaker 1: maybe what console she's gonna do. But to keep it
Speaker 1: back on the Supreme Court, Um, you know, we're obviously
Speaker 1: Briar is not going to be on the bench when
Speaker 1: they hear this case next week. But what what do
Speaker 1: they have to do in order to get ready for
Speaker 1: a big case like the one they're going to hear
Speaker 1: when maybe they don't have as much expertise as people
Speaker 1: in the industry might. Well, the short answer is that
Speaker 1: they do a lot of research with a lot of
Speaker 1: help from people around the court. You know, all of
Speaker 1: them have for twenty something are generally twenty something law
Speaker 1: clerks who can help them out. They've also got a
Speaker 1: whole courthouse full of people. So there's a case back
Speaker 1: in the late nineteen nineties having to do with restrictions
Speaker 1: on posting adult oriented material in the way that children
Speaker 1: might see them. And so I was back before the
Speaker 1: court was really connected to the Internet. And so they
Speaker 1: set up a computer in the library where justices and
Speaker 1: their clerks would go there and and UH, you know,
Speaker 1: put in searches to see if you know, pornography popped
Speaker 1: up or something like that. Uh. In a more recent case,
Speaker 1: I actually talked to Justice Bryer had interviewed him last week,
Speaker 1: and he said, this is a copyright case involving Google
Speaker 1: and Oracle, and he said he just spent a lot
Speaker 1: of time trying to understand the Java programming language and
Speaker 1: how it worked, because that was central to the case
Speaker 1: whether Google infringed Oracles copyright, and UH spent a lot
Speaker 1: of time. He has a very lengthy explanation in his
Speaker 1: opinion siding with Google. UH that for the most part,
Speaker 1: was pretty well received in terms of understanding the technology
Speaker 1: at issue in the case, I would love to be
Speaker 1: on the fly, a fly on the wall when they
Speaker 1: tried to teach lawmakers about TikTok and the importance of
Speaker 1: that moving forward. You got to open it and spent
Speaker 1: about five hours a day on it. But in all seriousness,
Speaker 1: you know, to be fair to Scout is this is
Speaker 1: an issue that plagues a lot of lawmakers. We always
Speaker 1: hear these funny sound bites from members of Congress too,
Speaker 1: when they're you know, in a social media hearing or
Speaker 1: crypto hearing. For example, we remember dog Coin from the
Speaker 1: ft X hearing. The Internet runs on tubes most yes,
Speaker 1: exactly exactly. So how how does scout is compared to
Speaker 1: Congress when it comes to understanding the Internet. Yes, that's
Speaker 1: a good question, Madison. There there are certainly some examples
Speaker 1: of the Supreme Court saying similar type of things. Maybe
Speaker 1: not quite as bad as you know, the Internet being
Speaker 1: a collection of tubes. But you know, over the years,
Speaker 1: the Supreme Court is asked some questions during arguments that
Speaker 1: suggests yea, they may not understand the technology. But I
Speaker 1: think there are a couple of important points. One the
Speaker 1: Court has gotten younger. So you have more justices who
Speaker 1: are uh, you know, in their fifties rather than in
Speaker 1: their seventies and eighties, we maybe understand the technology a
Speaker 1: little better. Uh, they have kids as well. And secondly,
Speaker 1: regardless of the age of the justices, for the most part,
Speaker 1: when I talk to people actual almost entirely when I
Speaker 1: talk to people, they said, despite some occasionally uh confused
Speaker 1: sounding questions, the court generally does a pretty good job
Speaker 1: by the end of the day when it puts out
Speaker 1: the really important thing, which are its opinions. And no
Speaker 1: doubt that does get some help from the law clerks
Speaker 1: who maybe understand the technology better. Uh. But but for
Speaker 1: the most part, the court, based on the people I
Speaker 1: talked to them, my reporting gets better grades than than
Speaker 1: a lot of members of Congress do. Greg. So, what's
Speaker 1: at stake with the case that they're going to hear
Speaker 1: next weekend? And what exactly is it? What are they
Speaker 1: gonna hear? Yeah, so this is as you said, this
Speaker 1: is an argument they're going to have on a Tuesday
Speaker 1: of next week Tuesday, and a somewhat less important case
Speaker 1: case on on Wednesday. The Tuesday case is all about
Speaker 1: the saying called section to thirty, which has been around
Speaker 1: since It basically shields social media companies other Internet companies
Speaker 1: from liability because of posts put up by their users
Speaker 1: by third parties. And that has basically served as a
Speaker 1: very broad shield for Internet companies. And this is the
Speaker 1: case involving a lawsuit by the victim, the family of
Speaker 1: a terrorism victim saying Google, through its YouTube service UH
Speaker 1: basically recommended terrorists content, terrorists videos and provided support to ISIS.
Speaker 1: And the question is whether that lawsuit can can even
Speaker 1: get in the door. If the Supreme Court says yes,
Speaker 1: it can get in the door, we're carving out of
Speaker 1: a bit of an exception to section to thirty. Computer companies,
Speaker 1: social media companies say, we are really worried that there
Speaker 1: will be no stopping that and and that that will
Speaker 1: force us to be a lot more restrictive about the
Speaker 1: content that our members are users can put up on
Speaker 1: the Internet because we're worried about being sued over it. Okay, So,
Speaker 1: and what does industry have to say about this? And
Speaker 1: this won't be the only two thirty case that they hear,
Speaker 1: right well, so, so they have a two thirty case
Speaker 1: on Tuesday, As they said, there's a second case on
Speaker 1: when Day involving Twitter, and it's actually kind of a
Speaker 1: related question about whether the family of a terrorist victim
Speaker 1: can sue under this law that's it's called the Anti
Speaker 1: Terrorism Act. Uh. The industry is basically saying, this case
Speaker 1: has the potential to really transform the Internet, and not
Speaker 1: in a good way. It will force us to be
Speaker 1: it could force us to be censors to a large degree.
Speaker 1: It could restrict speech on the Internet. And they are
Speaker 1: arguing that there's going to be a carve out in
Speaker 1: section two thirty. This is really something that Congress ought
Speaker 1: to be able to do because it can be a
Speaker 1: lot more precise rather than the kind of the blunt
Speaker 1: instrument of a Supreme Court opinion. Let's just hope they
Speaker 1: haven't been playing video game exactly. Oh my god, that image,
Speaker 1: Um Gregg Store, thank you so much. He is, of
Speaker 1: course Supreme Court reporter Here at Bloomberg News from or
Speaker 1: Not and I want Studio in Washington, DC. Are thanks
Speaker 1: to Jill Weber, the editor of Bloomberg Business Week. This story,
Speaker 1: as we mentioned in the upcoming new issue of Business Week,
Speaker 1: out on newsstands already on the Bloomberg and at Bloomberg
Speaker 1: dot com. You're listening to the Bloomberg Business Week podcast.
Speaker 1: Catch us live week days from two to five pm
Speaker 1: Easter on Bloomberg Radio, the Bloomberg Business App, and you too.
Speaker 1: You can also listen live to our flagship New York
Speaker 1: station Just Say Alexa, Play Bloomberg, e Love and Verdi. Well.
Speaker 1: You might recall last week Ross Gerber, a vocal Tesla shareholder,
Speaker 1: Tesla car owner frequent guest, on our air, saying he
Speaker 1: will pursue a board seat on the electric vehicle maker's
Speaker 1: board well at the time, also saying that it's time
Speaker 1: for Tesla to grow up. Gerber's firm holding about fourty
Speaker 1: shares as at the end of last year of Tesla.
Speaker 1: That's according to our data. Ross's co founder president CEO
Speaker 1: Gerber Kawasaki Wealth and Investment Management. He joins us lucky
Speaker 1: for us via zoom from Santa Monica, California. Hey, Ross,
Speaker 1: good to have you here. Your fund. By the way,
Speaker 1: your e t F is that more than fourteen percent.
Speaker 1: You're to date, Tesla's your biggest shareholder, at least according
Speaker 1: to our data. Um to us about pursuing a board
Speaker 1: seat on Tesla, why do you want to do it?
Speaker 1: And what progress have you made towards that end? Well,
Speaker 1: I think mostly it's because I feel like it's time
Speaker 1: for Tesla's board to sort of take a more active
Speaker 1: role in some of the main issues that involve Tesla,
Speaker 1: which seemed to be I don't know, sort of ignored.
Speaker 1: And a lot of founder led companies, you know, grow
Speaker 1: to be very, very successful, um, and then they reach
Speaker 1: a point like where Tesla has, where certain things just
Speaker 1: need to change. And and I don't think these are
Speaker 1: you know, bad things. I think it's a good thing,
Speaker 1: um for Tesla to focus on, you know, really three
Speaker 1: main things that you know, I'm most concerned about, which is,
Speaker 1: you know, public relations, marketing, and lobbying so that things
Speaker 1: like full self driving you know, are you know, appropriately
Speaker 1: understood by the public UM and the risks and rewards UM. Secondly,
Speaker 1: i'd love to see Tesla focus on the customer, the consume.
Speaker 1: Humer is constantly having bad experiences with Tesla service and
Speaker 1: and and I just think somebody needs to really be
Speaker 1: focused on the customer over at Tesla. And then thirdly,
Speaker 1: a secession plan. Um. Ellen is clearly running Twitter here
Speaker 1: and that's his priority, which is fine, But if something
Speaker 1: ever happened to Eilani. I mean, he is working, you know,
Speaker 1: like twenty hours a day, you know, you know, what's
Speaker 1: what's the plan for Tesla? So these things don't seem
Speaker 1: to be answered from Tesla, and and so now I'm
Speaker 1: pushing for board see because I think it's time for
Speaker 1: there to be some accountability to these issues. So Ross,
Speaker 1: you mentioned the PR situation when it comes to Tesla.
Speaker 1: To what extent are you concerned about Ellen's impact on
Speaker 1: the company's PR? Well, I think that you know, for
Speaker 1: a long time, we got a lot of free advertising
Speaker 1: out of Ellen, and there was a perception of Ellen
Speaker 1: that was much more positive today now that Ellen runs
Speaker 1: Twitter and has taken many political positions, and I think
Speaker 1: it's his right to do that. But it's sly unfortunate
Speaker 1: how many customers and shareholders here at at least that
Speaker 1: I know, and which are a lot that really have
Speaker 1: now taken a negative you towards Ellen. And it's really
Speaker 1: kind of sad to me. And the bottom line is
Speaker 1: it's time for Tesla to build its brand around Tesla
Speaker 1: and about you know, the values that Tesla really stands
Speaker 1: for and versus what Elon's values are, and and so
Speaker 1: I don't really have any issue with his per se values.
Speaker 1: But we're in the selling car business, and you know,
Speaker 1: I don't know if that's what he's thinking every day
Speaker 1: when he gets up in tweets. So I think Tesla
Speaker 1: can take an active role in shaping the public perception
Speaker 1: of its wonderful products and services. Hey listen are reporting
Speaker 1: by our Red Ludlow and Caroline Hyde. Um noted how
Speaker 1: you have a good relationship with UM some of the
Speaker 1: biggest shareholders in Tesla, someone who I've talked to a lot,
Speaker 1: Kathy would have our investment and also barely Gifford. Have
Speaker 1: you have they said that they would support you in
Speaker 1: your pursuit of a seat. Well, I haven't talked to
Speaker 1: any of the institutions yet because I haven't. You know,
Speaker 1: I'm still officially got to send out my letter and
Speaker 1: get this going with you will do that right now? Yeah,
Speaker 1: I will definitely be doing that, and and we're certainly
Speaker 1: And that's one of the reasons I'm running is just
Speaker 1: so that there is an option for people. I'm not
Speaker 1: like doing this for any like personal gain. Let me
Speaker 1: tell you, it's a very time consuming process and and
Speaker 1: most of my clients and and friends, you know, are
Speaker 1: sort of like, we want you focusing on our money,
Speaker 1: not running Tesla or dealing with Tesla. And that said,
Speaker 1: you know, I just feel compelled that there needs to
Speaker 1: be a choice for investors, individual investors, so that they
Speaker 1: actually even know somebody on the board. You know, a
Speaker 1: lot of people are like, oh, we support Tesla's board currently.
Speaker 1: I'm like, do you even know who's on the board
Speaker 1: And they're like no, And would you like, would you
Speaker 1: like to see there's another person. Ellen's obviously on the board,
Speaker 1: but Kimball Musk is also on the board. Would you
Speaker 1: like to do you think it is just a board
Speaker 1: of people who really like Elon? And there do I
Speaker 1: I do? And granted I really like Elon too, so
Speaker 1: it's you know, I'm not I'm not a negative person here.
Speaker 1: This is a friendly activist. I'm trying to help Tesla
Speaker 1: in a way that they're not good at. Okay, so there,
Speaker 1: you know. I'm a marketing pr kind of guru. That's
Speaker 1: kind of my thing, and and I think I could
Speaker 1: help the company dramatically, and I've been doing it for
Speaker 1: a long time behind the scenes, and a lot of
Speaker 1: people don't realize that that behind the scenes, I've been
Speaker 1: you know, advising them for years and years and years
Speaker 1: about the way they handle many different elements of their
Speaker 1: marketing and PR. And that said, they've implemented a lot
Speaker 1: of these things over the years and it's been very successful.
Speaker 1: But I think at this point, you know, Tesla is
Speaker 1: now a six billion dollar company and and things like.
Speaker 1: You know, there was an anti Tesla ad that was
Speaker 1: run during the Super Bowl and how this even happened
Speaker 1: is mind blowing to me. And then there was no
Speaker 1: counter to that, and if you look at the headlines,
Speaker 1: they're just very misleading and it and it becomes very tiring. Well, Ross,
Speaker 1: I know you mentioned that you are a fan of Tesla,
Speaker 1: of course, but you would be referred to as a
Speaker 1: dissident shareholder if this one through and management did not
Speaker 1: support your efforts, which is interesting here. Um, I wonder
Speaker 1: have you spoken to Ellen No. Last time he spoke
Speaker 1: was on a Twitter spaces in December where I addressed
Speaker 1: many of the issues that I had and he addressed
Speaker 1: them back in a way that I was pretty happy with.
Speaker 1: But you know, we still don't have a CEO of Twitter,
Speaker 1: and that was one of the things, you know, I
Speaker 1: was hoping for, you know, that he would, you know,
Speaker 1: refocus on Tesla and find the CEO of Twitter and
Speaker 1: and and maybe even work a little bit less on
Speaker 1: creating you know, political comments that creates so much dissonance
Speaker 1: among so many Tesla owners. Um. But you know, I
Speaker 1: don't expect him to change his opinion or what he
Speaker 1: wants to say on Twitter. But I do think his focus.
Speaker 1: I mean, he's working three jobs. He's admitted to himself,
Speaker 1: he's exhausted, he's working seven. But in that Twitter space
Speaker 1: that you mentioned, Ross Musk did tell you that Twitter
Speaker 1: is about ten percent of the complexity of Tesla. Did
Speaker 1: you believe him when he told you that. I think
Speaker 1: that I think he meant that after he's and dealing
Speaker 1: with what he's dealing with. But I don't think he's right.
Speaker 1: I think Twitter is a beast. It's super difficult to manage,
Speaker 1: and we're coming into an election cycle very soon, and
Speaker 1: and boy it's a hard thing to be Twitter during
Speaker 1: an election, clearly, And so I just think this is
Speaker 1: a very big task that he's taken on. And and
Speaker 1: you know, once again, I I hope he said he
Speaker 1: would get a CEO for Twitter and and I think
Speaker 1: that's one of the things I'm pushing for. The sooner
Speaker 1: the better he can have more help and leadership at Twitter,
Speaker 1: the more he can refocus on what's important to me,
Speaker 1: which is getting the cybertruck out and scaling production. And
Speaker 1: we've got battery production scaling so in Mega pac So
Speaker 1: it's a very important time for Tesla. And and and
Speaker 1: I just think he's a human being. And at some
Speaker 1: point you can't work seven days a week, twenty hours
Speaker 1: a day. UM. A couple of quick questions, because we've
Speaker 1: only got a couple of minutes left. Um. Tesla shares
Speaker 1: are up about sixty year to date, they're still down
Speaker 1: more than from that high back in early in November. Ross.
Speaker 1: First of all, have you been buying at all this
Speaker 1: year and adding to your position? Yeah? Within my fund,
Speaker 1: we've added to our position, so we were able to
Speaker 1: buy Tesla shares cheaper to add to our position. Um
Speaker 1: when it went down. UM. So you know last year,
Speaker 1: this year, last year, this year, and and at the
Speaker 1: end of last year and early this year. UM. So
Speaker 1: you know, I can only really comment about my public
Speaker 1: fund because what happens in my firm, you know, varies
Speaker 1: by client and risk and all these other factors, um
Speaker 1: but within my fund we've added to Tesla, it is
Speaker 1: a ten percent waiting currently, a litt less than ten
Speaker 1: percent waiting currently, which is the highest waiting that we
Speaker 1: have for a position. So Tesla's are number one stock.
Speaker 1: I love the company. I think it has a wonderful future,
Speaker 1: but I would like to see some changes in the
Speaker 1: way that they're running the business. Final quick question for you.
Speaker 1: A lot of retail investors, as you know, have a
Speaker 1: of their funds in Tesla. Where do you see the
Speaker 1: biggest upside for them? Well, right now, I think the
Speaker 1: biggest upside for Tesla is number one on successfully scaling
Speaker 1: their production in Berlin and Austin of the model why,
Speaker 1: number two getting the cybertruck out this year at some point.
Speaker 1: And number three it's clearly you know, mega pac production.
Speaker 1: You know, energy storage is going to be a phenomenal
Speaker 1: business for Tesla over time, and and now they're ramping
Speaker 1: this business, so trucks and mega packs. It was really
Speaker 1: the next level for Tesla, and and so you know,
Speaker 1: we're on the verge of a very good growth stage
Speaker 1: for Tesla over the next several years. But I'd love
Speaker 1: to see them really focused on their image in the public.
Speaker 1: Ross too quick questions Twitter. If he wasn't pursuing Twitter,
Speaker 1: do you think you and I would be having this
Speaker 1: question very quickly? No, if he wasn't involved with Twitter,
Speaker 1: I don't think we'd be having this conversation at all.
Speaker 1: And you still want Ellen running this company? Yeah? Absolutely?
Speaker 1: I mean what I really wanted him refocus back on Tesla. Listen,
Speaker 1: so appreciate your time, great conversation, Ross, and looking forward
Speaker 1: to seeing what comes next. Um Ross Gerber, President, chief
Speaker 1: executive officer at Gerber Kawasaki Wealth and Investment Management, UH
Speaker 1: investor in Tesla. It is his top holding. We heard
Speaker 1: him say teen percent waiting in that fund of his
Speaker 1: and also an owner of the cars. Joining us via
Speaker 1: zoom from Santa Monica, California. You're listening to the Bloomberg
Speaker 1: Business Week podcast. Catch us live weekdays from two to
Speaker 1: five pm Easter on Bloomberg Radio, The Bloomberg Business and
Speaker 1: you too. You can also listen live to our flagship
Speaker 1: New York station, Just Say Alexa, play Bloomberg e Love
Speaker 1: and Dirty Well on our radar. This week, thirteen f
Speaker 1: filings which institutional investment managers are required to file quarterly,
Speaker 1: and it really does give investors some clues on how
Speaker 1: some of the most watched investors have been investing their money.
Speaker 1: We are usually obsessed with them and watch them because
Speaker 1: they can move share prices. Our next guest uses machine
Speaker 1: learnings to create index replication ets to track all the
Speaker 1: investments such as hedge funds, VC, venture capital and also
Speaker 1: private equity. Bob Elliott is the CIO at Unlimited and
Speaker 1: is former senior investment executive at Bridgewater Associates. His bio
Speaker 1: reminds us that he built and led Ray Daluous personal
Speaker 1: investment research team for Newly a decade and he's here
Speaker 1: in our Bloomberg Interactive Broker studio. Hey, welcome, Nice to
Speaker 1: have you here with Gina and myself. How are you?
Speaker 1: Thanks so much for having me. Great to be here.
Speaker 1: What was it like to be with Ray fifteen years?
Speaker 1: It was great. It was, you know, really a formative
Speaker 1: time in my career, particularly starting around the financial crisis
Speaker 1: and navigating that challenging time, and then of course you
Speaker 1: know the decade and a half cents and so it
Speaker 1: was really about about the best place and about the
Speaker 1: best time to to learn how the macro economy works
Speaker 1: and how how financial markets work. So it's really it
Speaker 1: was a great time. So talk to us about what
Speaker 1: you've taken from your lessons at Bridgewater and brought to
Speaker 1: your new organization. I mean, it sounds fantastic because it
Speaker 1: sounds like the confluence of hedge funds and AI and
Speaker 1: machine learning, and these are all things that people are very,
Speaker 1: very captivated by. So how are you utilizing a machine
Speaker 1: or learning in your process? Now? Well, if you think
Speaker 1: about it, most investors, whether they're explicit about it or not,
Speaker 1: use a set of decision rules to make to inform
Speaker 1: their investment decisions, right, And of course some people are
Speaker 1: more explicit about it, using an explicit systematic approach. Some
Speaker 1: people call themselves discretionary, but they're using heuristics. And what
Speaker 1: we can do is we can draw on our understanding
Speaker 1: of the types of decisions that those investors are making,
Speaker 1: the types of assets that they're making across different hedge
Speaker 1: fund strategies. So like equity long short managers are a
Speaker 1: little different than global macro folks than fixed income are.
Speaker 1: And with that understanding, we can actually look at the
Speaker 1: returns of those managers and infer what they're doing and
Speaker 1: close to real time, and and that's what we're really doing.
Speaker 1: That's what our technology is all about, is understand seeing
Speaker 1: what they're doing, seeing the outcomes of their strategies, knowing
Speaker 1: what they could plausibly be betting on long and short,
Speaker 1: and then we can take that understanding and package it
Speaker 1: into an et F structure and make it accessible to
Speaker 1: everyone in a in a very tax efficient form of
Speaker 1: back testing. Did you do to really figure out that
Speaker 1: this works? Because because once you get the filings right,
Speaker 1: all of these investment folks could have been out of
Speaker 1: the positions in different positions. So I'm trying to understand
Speaker 1: how this strategy can be used going forward. We don't
Speaker 1: actually look at the filings. We look at the returns,
Speaker 1: which is really important because but it's still after the fact,
Speaker 1: isn't it. It is after the fact that we actually
Speaker 1: have pretty timely returned some some returns information that's daily,
Speaker 1: some of it is a few days after the end
Speaker 1: of the month, and so we have a pretty good
Speaker 1: real time sense of what types of positions these folks
Speaker 1: have on. And the interesting thing is at sort of
Speaker 1: the industry wide level or hedge fund style level, they
Speaker 1: don't move that fast. Uh, you know, the shifts say
Speaker 1: from being very into growth stocks and tech stocks to
Speaker 1: being more positioned in value stocks really transitioned from say
Speaker 1: the summer of until early two. That's a pretty normal,
Speaker 1: normal shift in thinking and positioning amongst hedge fund managers.
Speaker 1: That's sort of twelve to eighteen month time frame. And
Speaker 1: so when we're when we're doing what we're doing, we're
Speaker 1: a few weeks behind the actual positions. But you know,
Speaker 1: relative to relative to capturing understanding of what these most
Speaker 1: sophisticated asset managers are doing, it's it's it's a pretty
Speaker 1: good job of capturing what they're doing. And then when
Speaker 1: you're actually capturing what they're you're doing. Are you investing
Speaker 1: alongside them effectively or are you ever going against them?
Speaker 1: For instance, if they're going more long small caps, are
Speaker 1: you always going more along small caps or are you
Speaker 1: taking that as a contrary signal and going short small
Speaker 1: caps in your strategy. What we're doing with our first
Speaker 1: product is we're replicating the returns of the aggregate hedge
Speaker 1: fund industry. So we're going along with what we see
Speaker 1: those managers doing and trying to match it as closely
Speaker 1: as we can. And that's because you know, the truth is,
Speaker 1: hedge fund managers are pretty darn good at invest of them,
Speaker 1: surely inaggregate, particularly when you when you consider the strategy.
Speaker 1: So if you add back the fees, which is really
Speaker 1: one of the things that we can do because we
Speaker 1: don't have to charge two in twine, we use technology
Speaker 1: to replicate what they're doing rather than charge two in
Speaker 1: twenty and so grossive fees. You know, if you add
Speaker 1: back the fees, hedgemen managers are great. It's just the challenges.
Speaker 1: You can't invest in them typically without that high fee structure,
Speaker 1: and so what we're trying to do is infer what
Speaker 1: they're doing and offer it a much lower fee structure
Speaker 1: than a typical LP position. How does this work for
Speaker 1: VC and PE, because they're not all the same worlds.
Speaker 1: Absolutely absolutely, those those positions and those exposures are different.
Speaker 1: Although the same idea that there's a set of core
Speaker 1: decision rules that those investors are making to identify what
Speaker 1: type of investments they wanted they want to put in,
Speaker 1: they want to invest in is it's it's the same
Speaker 1: basic concept, except they're what we're doing is we're looking
Speaker 1: at their private market investments and finding look alike type
Speaker 1: companies in the public markets that we can use that
Speaker 1: look a lot like the type of investments that they're doing,
Speaker 1: particularly later stage investments that they're doing. We can take
Speaker 1: that understanding, find lookalikes in the public markets and use
Speaker 1: that and package that as an e t F to
Speaker 1: make it widely accessible. And the tradeoff is it's imperfect,
Speaker 1: but you also don't have your money locked up for
Speaker 1: you know, ten or twelve years, and you don't have
Speaker 1: to pay two and twenty fees. So how do you
Speaker 1: Speaking of fees, I think immediately of transactions costs, I
Speaker 1: would think that this is a pretty lumpy sort of
Speaker 1: transactions cost strategy where you have the thirteen F filings,
Speaker 1: all of your transactions occur. How do you manage those
Speaker 1: transactions costs and also manage the impact that you may
Speaker 1: have on the market by having such a lumpy trading period. Yeah,
Speaker 1: because we're looking at the returns, we actually get information
Speaker 1: incremental information kind of all the time. Every week or
Speaker 1: two we're getting new incremental information, and so that allows
Speaker 1: us to evolve the portfolio through time in instead of
Speaker 1: in a concentrated way, in an incremental way, and that,
Speaker 1: and that helps reduce the transactions costs that that we see.
Speaker 1: We also typically are trading in you know, some of
Speaker 1: the biggest liquid markets, the sixty biggest liquid markets in
Speaker 1: the world, and so those markets fortunately have much lower
Speaker 1: transactions costs. Then if you know, we were trading very
Speaker 1: specific positions, so no fees or low fees, low fees.
Speaker 1: We we charge a basis point management fee, which you know,
Speaker 1: when you think about that in the context of say
Speaker 1: two and twenty type products, right, you know, a typical
Speaker 1: hedge fund strategy charge what four dred basis points on
Speaker 1: average per year looks like a good deal, and you know,
Speaker 1: I probably don't have to sell you all on the
Speaker 1: E t F structure. But it also comes with the
Speaker 1: incredible tax efficiency of an et F, whereas most of
Speaker 1: these hedge fund structures are fund to fund structures are
Speaker 1: typically LP positions and their tax at ordinary income, which
Speaker 1: is much less efficient than an E t F. Bob,
Speaker 1: how do you think, though, you know, we're coming out
Speaker 1: of this environment where money was so cheap for such
Speaker 1: a long time, and we're also coming out of a
Speaker 1: pandemic where again we had just so much money flooding
Speaker 1: the market. How might that though, we're all trying to
Speaker 1: figure out what everything is on the other side and
Speaker 1: whether we are in somewhat of a new normal, right, so,
Speaker 1: how do you think about how that might potentially impact performance?
Speaker 1: For sure, the dynamic for fifteen years of unbridled monetary
Speaker 1: stimulation was if you bought pretty much pretty much everything
Speaker 1: went up, and the more risky the thing that you bought,
Speaker 1: the more it went up. Typically, And and that air
Speaker 1: is over and the fetes make it very clear that
Speaker 1: that era is over. And so now we're in an
Speaker 1: era of tighter monetary policy and a lot more macroeconomic uncertainty.
Speaker 1: And that's a period of time where alpha typically shines,
Speaker 1: right because you have the most sophisticated asset managers who
Speaker 1: can who spend billions of dollars on you know, the
Speaker 1: smartest minds to figure out what's likely to transpire, and
Speaker 1: that's where they really shine is in those difficult moments,
Speaker 1: those uncertain moments, where they can position their portfolios agilely
Speaker 1: in a way that helps them navigate the difficult environment.
Speaker 1: If you look back last year, you know, hedge funds,
Speaker 1: the hedge fund industry in general, inaggregate was roughly flat
Speaker 1: at a time when stock index investing was down fifteen.
Speaker 1: That's the that's the type of significant outperformance that you
Speaker 1: can see in these in these very challenging times from
Speaker 1: the sophisticated asset managers. So you gave us the opening
Speaker 1: to talk about positioning, So I'm just going to dive
Speaker 1: right in. What are you seeing with respect to positioning.
Speaker 1: You talked a little bit about the value growth transition
Speaker 1: or the growth value transition over the last year. What
Speaker 1: are the big themes in terms of positioning this year.
Speaker 1: I think the biggest thing, which connects to that aggregate
Speaker 1: uncertainty is we're actually seeing managers playing about as conservatively
Speaker 1: as we have seen in the last twenty five years
Speaker 1: other than the acute crisis periods of oh eight and twenty.
Speaker 1: And I think that speaks to the fact that there
Speaker 1: is a lot of uncertainty, macro uncertainty about exactly where
Speaker 1: we're going. Is it, you know, higher for longer or
Speaker 1: has the FED tightened enough to tip us into recession?
Speaker 1: And in those moments, um you don't have to you
Speaker 1: don't have to hold your max positions in order to uh,
Speaker 1: in order to continue to earn, to continue to deliver
Speaker 1: those returns. And so that's what we're seeing is a conservativism.
Speaker 1: And then under the under the hood, what we're seeing
Speaker 1: is a bunch of positioning in line with that, tilted
Speaker 1: towards value stocks, tilted towards higher top part of the
Speaker 1: credit stack, Positions like that that are defensive in nature
Speaker 1: in this environment. All right, we're gonna have to leave
Speaker 1: it there. I'm good to know. I know you're just
Speaker 1: getting these funds off the ground, or get you got
Speaker 1: one fund off the ground, right, one fund HF N
Speaker 1: D t F. Looking looking forward to here a little
Speaker 1: bit more as you guys build out. Bob Elliott, Chief
Speaker 1: Investment Officer and Unlimited Here in our studio, you're listening
Speaker 1: to the Bloomberg Business Week podcast. Catch Just Live week
Speaker 1: days from two to five pm Easter on Bloomberg Radio,
Speaker 1: The Bloomberg Business a band you Doo. You can also
Speaker 1: listen live to our flagship New York station, Just Say
Speaker 1: Alexa play Bloomberg Love and Dirty. We talked about the
Speaker 1: Bluebird Big take, one of the most read about. How
Speaker 1: many years what three years into the pandemic and you
Speaker 1: still have business leaders and city officials um around the
Speaker 1: world still trying just about everything to get people and
Speaker 1: employees back into offices and revive local economies. Um, we
Speaker 1: have a great next guest who can give us an
Speaker 1: idea of what's going on in the labor market and
Speaker 1: some of the trends that he is seeing. So back
Speaker 1: with us, as LinkedIn. Chief operating Officer Dan Shapiro. He
Speaker 1: joins this via zoom from Mountain View, California. Dan, it
Speaker 1: is so great to have you back with us, UH,
Speaker 1: and here with myself and Gina. We did talk about
Speaker 1: a year ago. Tell me about your world since then. Um,
Speaker 1: how does the working world compare to where we were
Speaker 1: then versus today? Sure? Great to be back, and it's
Speaker 1: a topic on the minds of many people and many
Speaker 1: executives all over the world. But one of the things
Speaker 1: that is most notable about the moment when right now
Speaker 1: is that there are very different perspectives being held by
Speaker 1: senior leaders versus individual workers around company. UH. As much
Speaker 1: as eight percent of senior leaders believe that people do
Speaker 1: their best work when they come into the office on
Speaker 1: a regular basis, and at the same time of individual
Speaker 1: workers believe that they can work from anywhere. So there's
Speaker 1: this massive disconnect in perception of how the best work
Speaker 1: gets done at the senior leadership levels versus the front line.
Speaker 1: And I think that that's playing out in basically every
Speaker 1: industry and every market around the world. Now, the question is,
Speaker 1: as we move into a more uncertain economic moments where uh,
Speaker 1: senior leaders have what you might argue is more leverage
Speaker 1: in these discussions, are they going to really ask people
Speaker 1: or require people to come back in the office. And
Speaker 1: you're seeing many organizations go that route. J and I
Speaker 1: were just talking about this off air, this whole idea
Speaker 1: of a tight labor market. Uh, you know, employees have
Speaker 1: certainly been in the driver's seat, but you do wonder
Speaker 1: write you know, if things change, you know what we
Speaker 1: see a bunch of workers ledting back to the office. Yeah. Absolutely,
Speaker 1: And that that's my question for you. And are you
Speaker 1: actually seeing then job postings shift to reflect that sort
Speaker 1: of senior leader belief or are they still generally posting
Speaker 1: jobs with a hybrid kind of tilt to them. How
Speaker 1: have you seen the job postings on LinkedIn really shift
Speaker 1: over the course of the last year to reflect these beliefs. Yeah,
Speaker 1: you're seeing the pendulum swing back in. Any Ways, I
Speaker 1: think for the first to just look at remote roles.
Speaker 1: So right now on the LinkedIn platform, the applications to
Speaker 1: remote roles is well in access a sorry in excess
Speaker 1: of the number of job postings remote roles. And I
Speaker 1: think it might have been about a year ago that
Speaker 1: we saw remote roles on LinkedIn peak at about and
Speaker 1: that numbers come down to fourteen percent or lower, depending
Speaker 1: upon what market you're looking at. So you're seeing a
Speaker 1: retrenching towards wanting people to be around office locations. And
Speaker 1: then within hybrid you're seeing different organizations adopt different expectations
Speaker 1: of what flexibility means. Is it about three days in
Speaker 1: the office, is it about five days in the office? Um?
Speaker 1: But it's very clear is that senior leaders are taking
Speaker 1: this moment to reset the social contract with their employees
Speaker 1: if they can. And but you're still seeing workers prefer
Speaker 1: to work at organizations where remote is available in some
Speaker 1: cases or where there's a lot of flexibility. And as
Speaker 1: we go into what appears like a slowdown in the economy, UM,
Speaker 1: you know you're seeing more people uh hold onto the
Speaker 1: jobs they have, be less open to move between jobs,
Speaker 1: and senior leaders are taking that opportunity to reset expectations. Hey, Dan,
Speaker 1: do you think leaders are making a mistake by not
Speaker 1: being maybe more flexible even if we start to see
Speaker 1: the labor market not as tight as we've seen, Like,
Speaker 1: is it smarter to kind of make it flexible that
Speaker 1: you know, if you think about it right, your pool
Speaker 1: of workers are available, workers that you can hire can
Speaker 1: be much greater if you're willing to kind of go anywhere. Yeah,
Speaker 1: I think I think flexible. I think the question is
Speaker 1: what does flexibility meaning your organization? Um, there's no question
Speaker 1: that people do work well when they are periodically getting together.
Speaker 1: You know, sometimes doing certain kinds of work is useful
Speaker 1: to being in the same location, but it's definitely essential
Speaker 1: to building strong relationships. Um. But the question is what
Speaker 1: does flexibility meaning in your organization? The truth is that
Speaker 1: despite all the headlines of macroeconomic slowdown on a global basis,
Speaker 1: the labor market is still quite tight. It's tighter than
Speaker 1: it was pre COVID, And so while you might see
Speaker 1: headlines around UH technology companies going through layoffs are slowing
Speaker 1: down hiring, by and large, you still see continued hiring
Speaker 1: across most industries, and in fact, one of the most
Speaker 1: interesting dynamics is that many companies in industries outside of
Speaker 1: tech have huge technology teams within their organization and they're
Speaker 1: taking this moment to pick up talent that might have
Speaker 1: been previously unavailable to them because they weren't competitive for
Speaker 1: these roles. It's almost like we're about to watch this
Speaker 1: massive tech talent diaspora across industries. And so if you
Speaker 1: want to be competitive for that kind of talent, even
Speaker 1: though it might feel like, um, you're you're moving away
Speaker 1: from a fully job secret focused market, Um, you're going
Speaker 1: to want to have some flexibility built in your mono
Speaker 1: because that's what that town is looking for. So, speaking
Speaker 1: of what talent is looking for, I want to go
Speaker 1: back to something you said earlier and kind of get
Speaker 1: another stat from you, and that was you mentioned that
Speaker 1: the remote role applications are incredible. Right A company posts
Speaker 1: a remote role and they get a lot of job applications.
Speaker 1: Are you then seeing the inverse as well? A company
Speaker 1: that posts a not remote role or a fully in
Speaker 1: office role, are their applications then perilously low? Still? Are
Speaker 1: we still in that environment where the job market is
Speaker 1: so tight that nobody even bothers to apply for the
Speaker 1: roles that are in office. I think that people are
Speaker 1: still applying to in office roles, but then they're going
Speaker 1: in and having deep conversations with those employers about what
Speaker 1: does it mean to be in office? Like do you
Speaker 1: mean do you mean me coming here five days a
Speaker 1: week from nine to five or whatever those hour are,
Speaker 1: or is it something where I can weave it into
Speaker 1: the way I've built my life since the pandemic um?
Speaker 1: You know that being said, the basic math of the
Speaker 1: situation is that when you make a role remote, you
Speaker 1: open yourself up to job seekers across a wide range
Speaker 1: of locations. It massively expands the talent pool um, which
Speaker 1: has been an incredible vehicle for companies to hire folks
Speaker 1: that previously they never would have been able to engage with.
Speaker 1: So I think it really comes down to organizations figuring
Speaker 1: out what their talent needs are and then understanding what
Speaker 1: the work style makes most sense for their organization. But
Speaker 1: it's it's probably gonna have some degree of flexibility built
Speaker 1: into it, Dan, what are you guys doing at LinkedIn
Speaker 1: Um From a talent perspective, we we've adopted a phrase
Speaker 1: of we trust our employees to work where they work best.
Speaker 1: When it makes sense for them and their teams, and
Speaker 1: so oftentimes will encourage folks to come together for certain
Speaker 1: kinds of work. We definitely foster gatherings, but we also
Speaker 1: know that sometimes people's work style works really well for
Speaker 1: them to do their work from home, either all the
Speaker 1: time or some days a week. What do you think
Speaker 1: is behind this notion that senior leaders have Eight of
Speaker 1: senior leaders think that people are more effective in the office.
Speaker 1: I'm just curious what is what's the data or the
Speaker 1: reasoning behind that belief system. Were they particularly unsatisfied with
Speaker 1: how workers behaved? You know? In one? Is there something
Speaker 1: else there? Well? I think that from what I've seen
Speaker 1: a lot of it is instinct. Um. A lot of
Speaker 1: it is that when you lose visibility of what people doing,
Speaker 1: you wonder what their contributions are. I think it's a
Speaker 1: very human reaction. UM. I also think though, that business
Speaker 1: is a team sport, and some work is essential for
Speaker 1: people to get together, to feed off of each other,
Speaker 1: to create that organic energy and UM that is often
Speaker 1: best done when people are in the same physical location.
Speaker 1: I don't know about about your jobs, and my job
Speaker 1: is about interacting with bowl across a wide range of
Speaker 1: our organization, and so getting people together to do that
Speaker 1: work in some way sometimes the best way to get
Speaker 1: things done. Yeah. I think there's some truth to what
Speaker 1: leadership is feeling. But the question is how to balance
Speaker 1: that with the reality that sometimes the best way to
Speaker 1: get something done is to sit down by yourself and
Speaker 1: knock it out. Yeah. Absolutely, if you consider the interruptions
Speaker 1: you have sometimes, whether it's the emails, whether it's just
Speaker 1: people walking over uh, you know, sometimes I think just
Speaker 1: being kind of home and just focusing. We've been talking
Speaker 1: with LinkedIn Chief operating Officer Dan Shapiro, still with us
Speaker 1: via zoom from Mountain View, California. So, Dan, Gina and
Speaker 1: I have been having a conversation because we've been talking
Speaker 1: a lot about pandemic work, coming back, the adjustment, and
Speaker 1: we're just talking about that there is to some extent
Speaker 1: almost an assumption of those fourteen fifteen sixteen, how are
Speaker 1: days that we're doing during the pandemic and we had
Speaker 1: nothing else to do, happy to work long days, um,
Speaker 1: that there's an assumption that we're going to continue and
Speaker 1: then as a result, like we don't all have any
Speaker 1: kind of quiet time to innovate, think, you know, and
Speaker 1: almost want to carve out time in our calendar. But
Speaker 1: it's hard for organizations to understand the importance of that,
Speaker 1: what you're thinking about that, and how leaders can maybe
Speaker 1: encourage that, or do you encourage that in leadership. I
Speaker 1: think that if you look at top performers, some of
Speaker 1: the best practices that they deploy in their own work
Speaker 1: one is they set good boundaries. They know that being
Speaker 1: successful at work means you're also a successful human being
Speaker 1: in your life outside of work. And some of those
Speaker 1: boundary setting norms have really frayed over the last few years,
Speaker 1: and so I think there's a there's a big focus
Speaker 1: at lots of organizations and definitely within my own team,
Speaker 1: around what do you healthy boundaries look like in an
Speaker 1: environment where the physical location of home and work are
Speaker 1: a little bit more fluid. I think that's a very
Speaker 1: active discussion. I think the second thing is that there's
Speaker 1: no question that highest performers take time to think and
Speaker 1: process us an ID eight. Sometimes they do that by themselves,
Speaker 1: sometimes they do that with others, and I think many
Speaker 1: people are trying to figure out how to carve that
Speaker 1: out for themselves, whether it be blocks of time or
Speaker 1: or gatherings with colleagues. But I think you've hit on
Speaker 1: a key thing, which is some of some of the
Speaker 1: best practices that the most talented people deploy in a
Speaker 1: regular basis. Uh, we've sort of lost our habits about
Speaker 1: by virtue of the way the pandemic forced us to work.
Speaker 1: But do you think organizations respect that? So, like if
Speaker 1: you in your calendar or most workers marked out and said,
Speaker 1: this is my think time, this is my quiet time,
Speaker 1: do you think you know a manager or somebody might say, Okay,
Speaker 1: that's good, but right now I need to have a
Speaker 1: meeting with you. So maybe you can do quiet time tomorrow.
Speaker 1: Like what what you're thinking about that? Like realistically? Yeah, Um,
Speaker 1: I think what I see in practice is that, uh,
Speaker 1: people set aside time and then some portion of it
Speaker 1: gets taken back. And I think that's what's worked in
Speaker 1: my career and what many other people do. Like maybe
Speaker 1: you know, I set aside ninety minutes a day to
Speaker 1: try to do things I know I need to get done,
Speaker 1: and I sort of expect that, you know, thirty minutes
Speaker 1: out of that is going to sort of go to
Speaker 1: something that's urgent or required. Um, And I think that
Speaker 1: that's that's sort of finding the balance between what you
Speaker 1: wish were optimal and what the pragmatic realities of a
Speaker 1: day to day work experience are. But the best managers
Speaker 1: I know encourage their teams to set healthy boundaries and
Speaker 1: to honor them, um. And then also to make sure
Speaker 1: that person has time to to do the thing they
Speaker 1: need to be excellent. I think this feeds into the
Speaker 1: topic that you've You've suggested we dig into, Dan, and
Speaker 1: that is the importance of reactive leadership versus a depth
Speaker 1: of leadership. Can you talk us through that? Yeah, Well,
Speaker 1: when when things are uncertain, when the world feels chaotic,
Speaker 1: and it is absolutely the case the last several years
Speaker 1: have felt both of those things, and I think this
Speaker 1: time is no different. Um. That the key from a
Speaker 1: leadership perspective is to take in all of the information
Speaker 1: that's thrown your way, but to not feel the need
Speaker 1: to react to every given headline, and whether the headlines
Speaker 1: are about changes in inflation, or how companies are hiring
Speaker 1: or laying off folks, or the war in Ukraine, um,
Speaker 1: all of these things, UH reflect a very uncertain and
Speaker 1: changing world. And what the best leaders do in these
Speaker 1: moments is they don't feel the need to respond or
Speaker 1: react any given moment, but they process that information then
Speaker 1: they're very decisive about the moves that they're going to
Speaker 1: make to set their team up for success. And I
Speaker 1: think what employees value is leadership that is able to
Speaker 1: sift through all of the noise that's going on in
Speaker 1: the world and to give clear guidance and over communicate
Speaker 1: with folks around what the strategy is going to be
Speaker 1: going forward. Um and I see that in the best
Speaker 1: teams around the world and the customers that I work with,
Speaker 1: and I see that in the best teams at Lincoln.
Speaker 1: So how do you think a great leader at a
Speaker 1: solid company can become adaptive in an environment where the
Speaker 1: things are so chaotic and it does feel like things
Speaker 1: and things have just become enormously more chaotic over the
Speaker 1: last few years than they were in the past. What
Speaker 1: are the techniques to developing an adaptive leadership style that
Speaker 1: you've researched, especially when you have annoying news people like
Speaker 1: ourselves saying here's the latest headline and we're obsessed with
Speaker 1: it and inflation. Well, I think there's three steps. You know.
Speaker 1: The first step is uh, you need to take in
Speaker 1: as much information as you can. There is so much
Speaker 1: great intelligence in the world that's available to leaders right
Speaker 1: now about what's going on, and the key is to
Speaker 1: make sure that you're not closing yourself off from all
Speaker 1: of that amazing insight and intelligence. But then the key
Speaker 1: step is to not feel the need or to feel
Speaker 1: compelled to respond every time some piece of information comes
Speaker 1: your way. And so the second step is the synthesis.
Speaker 1: Every day, how do you take this information that's coming
Speaker 1: your way and using it to form a worldview of
Speaker 1: what you think your company or your team meets to
Speaker 1: doing right now given what's changing um And often times
Speaker 1: there will be a big lag between receiving lots of
Speaker 1: new information and ultimately deciding what your organization is going
Speaker 1: to do differently. And then finally it's communication. Once you've
Speaker 1: synthesized this information and boiled it down to a few things,
Speaker 1: not many things, but a few things that you're going
Speaker 1: to react to and act upon, how do you make
Speaker 1: sure your team understands the thinking behind those moves so
Speaker 1: they can put the strategy into practice. So often times
Speaker 1: when there's new information coming our way in and in
Speaker 1: a certain world, we feel compelled to do something about it,
Speaker 1: But sometimes the right move is to sit back, to
Speaker 1: let things settle, and then to be bold in your choices.
Speaker 1: All right, So I've got to finish up. Just got
Speaker 1: a minute left here when we have all these headlines
Speaker 1: speaking of Sorry, I'm going to be reactive for a
Speaker 1: moment or see if I get your reaction. But we're
Speaker 1: talking so much about AI and chat bots and chat GPT.
Speaker 1: How do you think about that and the impact on
Speaker 1: how we work going forward? Just got about seconds. I
Speaker 1: think it's incredibly exciting. I think, like many new platform technologies,
Speaker 1: they have the potentially be incredibly powerful, and also we
Speaker 1: need to be responsible with them. But it is likely
Speaker 1: that any role at any company UM, that AI will
Speaker 1: be a core part of how each individual worker becomes
Speaker 1: more productive UM And whether that's about creating content, whether
Speaker 1: that's about innovation, whether that's about coding or analysis, all
Speaker 1: of us will have AI working alongside of us to
Speaker 1: help them us be better and more productive in our roles.
Speaker 1: So it's not about all of us being replaced necessarily
Speaker 1: just quickly. Well, I think if you look at all
Speaker 1: of the major innovation technology over the years, they have
Speaker 1: lent themselves to empowering people to do more and better things.
Speaker 1: And I think AI will be well great to check
Speaker 1: in with you, and thank you so much for all
Speaker 1: of that time, Dan, Thank you, Thank you. Dan Shapiro,
Speaker 1: his chief operating officer over at LinkedIn. Joining us from
Speaker 1: Mountain View, California. You're listening to the Bloomberg Business Week Podcast.
Speaker 1: Catch us live week days from two to five pm
Speaker 1: Easter on Bloomberg Radio, the Bloomberg Business App, and you too.
Speaker 1: You can also listen live to our flagship New York station,
Speaker 1: Just Say Alexa play Bloomberg e Love and Dirty. Teach
Speaker 1: did children well the fathers did slowly go by and
Speaker 1: be all right, teach your children? Well right, yes, we hope.
Speaker 1: I know my child who's not really a child anymore.
Speaker 1: The music that they pick is just so on point.
Speaker 1: So thank you to the team who does that. Yes
Speaker 1: and why Yeah Crosby Stills love it. Um. When it
Speaker 1: comes to teaching kids, sometimes they need an assist. And
Speaker 1: I have to say my daughter over the years has
Speaker 1: definitely tapped into Khan Academy. Yeah exactly. I mean it
Speaker 1: got me through business school. I'm really excited to have
Speaker 1: with a saal Con founder and CEO of KHN Academy.
Speaker 1: He joins us on zoom for you from Mountain View, California. Uh, Saul,
Speaker 1: I gotta tell you, I promised myself when I finally
Speaker 1: did get to interview you this many years after business school,
Speaker 1: I would thank you for the videos that you did
Speaker 1: about discounted cash flows and interest rates and all the
Speaker 1: things that I worked on in my personal finance and
Speaker 1: accounting classes, because it was your voice that helped guide
Speaker 1: me through business school. Uh. And it's interesting because this
Speaker 1: Carol wasn't available when I was an undergraduate. We weren't
Speaker 1: even talking about YouTube back then. Very please to go
Speaker 1: back with a sal Cohn founder and CEO of KHN
Speaker 1: Academy joining us from Mountain View. Saul, how are you.
Speaker 1: I'm doing well. Thanks for having me, you know, take
Speaker 1: us back to two thousand eight, because it's funny and
Speaker 1: thinking about this interview that we're doing right now. You know,
Speaker 1: we think about online education in the way that it
Speaker 1: really gained so much attention in the early part of
Speaker 1: during lockdowns and when kids were sent home. You've been
Speaker 1: working on con academy for a dozen years by the
Speaker 1: time the pandemic hit. Take us back there and where
Speaker 1: we are now in some ways earlier. It all started
Speaker 1: back actually in two thousand four, when I was tutoring
Speaker 1: some cousins remotely, when I was in Boston, they were
Speaker 1: in New Orleans. I started writing software for them. Friends
Speaker 1: suggest that I make videos for them on YouTube. It
Speaker 1: took on a life of our own, and it was
Speaker 1: in two thousand eight that I actually set up this
Speaker 1: this family project as a not for profit mission free
Speaker 1: world class education for anyone anywhere and called it KHN Academy.
Speaker 1: And if we compare that time to where we are now,
Speaker 1: I think now people actually take it for granted that,
Speaker 1: of course, on demand video is going to be really
Speaker 1: useful for for learning. Of Course, students should be able
Speaker 1: to have self paced practice. Um. Of course, it's not
Speaker 1: the best use of class time for a teacher to
Speaker 1: just lecture at students and students to sit passively and listen.
Speaker 1: Because students have access to on demand video, perhaps it
Speaker 1: might be a good idea to allow students to learn
Speaker 1: at their own time and pace. But if you go
Speaker 1: back to two thousand and eight, none of that was mainstream.
Speaker 1: People thought things like YouTube and maybe the Internet generally
Speaker 1: for the most part, was as a toy or or
Speaker 1: maybe a distraction, but now we realize that it's it's
Speaker 1: central to the education. I think the other really good
Speaker 1: thing that happened is obviously when when we set out
Speaker 1: as a not for profit in the name of trying
Speaker 1: to level the playing field, it's it's predicated on the
Speaker 1: idea that everyone eventually will have access to the Internet.
Speaker 1: In two thousand and eight, we weren't anywhere close to that.
Speaker 1: Were still aren't at perfection, but in school environments we've
Speaker 1: gone a long way in the US globally that there's
Speaker 1: still a lot more work to be done, and I
Speaker 1: think we the pandemic. One of the silver linings is
Speaker 1: it it helped accelerate a lot of internet and tech adoption,
Speaker 1: not just in schools, but at home as well. How
Speaker 1: do you think it's you know, the impact it's had
Speaker 1: on how kids learn um or helped compliment supplement you know,
Speaker 1: classroom time. Yeah, well, I think you know, everything is
Speaker 1: is a double edged sword. We all know about all
Speaker 1: of the things on the Internet that maybe aren't the
Speaker 1: most productive things for kids, but in terms of when
Speaker 1: they are productive on it, whether you're talking about kids
Speaker 1: in elementary school, or middle school, all the way to
Speaker 1: med students. It's now become pretty mainstream that students are
Speaker 1: going to vote with their feet. If there's someone who's
Speaker 1: just going to lecture at them, and the students have
Speaker 1: an option, they won't show up anymore. If you if
Speaker 1: you visit most med schools, the actual electoral halls are
Speaker 1: pretty empty. The med students, who are very diligent students
Speaker 1: are usually gonna watch the lecture later on at double speed. UM. So,
Speaker 1: I think there's an expectation of some people say, oh,
Speaker 1: kids these days have less of an attention span. I
Speaker 1: don't think they have less of an attention span necessarily.
Speaker 1: It's more that they have more options and they have
Speaker 1: higher expectations. When we were kids, we're like, Okay, we
Speaker 1: gotta sit in the classroom and just pretend to pay
Speaker 1: attention and look at the clock, and so we're gonna
Speaker 1: play that game game. But but now now you don't
Speaker 1: have to do that. They have they have other things.
Speaker 1: I think they know that if they don't understand something
Speaker 1: in class. Back when we were kids, you'd have to
Speaker 1: either somehow struggle with a textbook, or if you're lucky
Speaker 1: enough to have have a family, member help you or
Speaker 1: or had enough resources to get a tutor, And now
Speaker 1: we're talking about very few people. Now people know, Yeah,
Speaker 1: I can go to kN Academy, I can ask the questions,
Speaker 1: I can find other I can do practice problems. I
Speaker 1: can make sure that I understand what I'm doing. I
Speaker 1: can go to YouTube and find other resources. So I
Speaker 1: think kids are actually able to advocate for themselves a
Speaker 1: lot better because they don't. They're not willing to just
Speaker 1: put up with only one modality. Hey, given all the
Speaker 1: work that you've done over the past gosh, I mean
Speaker 1: it's close to twenty years at this point. So I'm
Speaker 1: I'm wondering, you know, how, how how it changes the
Speaker 1: way you think about education with regard to your own kids. Yeah,
Speaker 1: you know, even back in two thousand, kind Academy really
Speaker 1: got on on folks radar. In two thousand nine, two
Speaker 1: thousand ten, two thousand eleven, I gave a Ted talk
Speaker 1: where you know, let's let's reimagine education, make things more personalized.
Speaker 1: We shouldn't have kids moving forward lockstaff if you don't,
Speaker 1: if you only got a seventy percent on the test,
Speaker 1: you should always have that opportunity incentive to make that
Speaker 1: an eight percent, make that a nine percent. And I
Speaker 1: wrote a book, One World school House, about how how
Speaker 1: education could change, how you can even create a school
Speaker 1: of the future. And then in my oldest I now
Speaker 1: have three kids, my oldest was just entering kindergarten age
Speaker 1: and I said, hey, I don't want to be a hypocrite. Um,
Speaker 1: I don't want to preach all of these things about mastery, learning,
Speaker 1: personalization and then not have my own kids do that.
Speaker 1: And not only that, but I actually did and continue
Speaker 1: to believe that that is the most powerful way to learn.
Speaker 1: So we started a school, con Lab School, uh where
Speaker 1: now all of my kids go. It's out here in
Speaker 1: northern California. And what we're seeing is when you have
Speaker 1: a school that's really students centered, where you know we have.
Speaker 1: The one edict we have is there's no lectures at
Speaker 1: the school. Everything has to be active. Students can learn
Speaker 1: their own time and pace. But once again, they're not
Speaker 1: in isolation. They get support from their peers, they get
Speaker 1: support from the faculty. When human beings are in the
Speaker 1: room together, they either have socratic dialogue, or they're doing projects,
Speaker 1: or they're collaborating, or they're tutoring each other. We have
Speaker 1: a motto, everyone's a student, everyone's a teacher, and we're
Speaker 1: seeing we we've had our first few graduating classes in
Speaker 1: the last couple of years, and I don't want to
Speaker 1: jinx it, but the kids are doing frankly better than
Speaker 1: you would expect from a traditional environment. We just looked
Speaker 1: at our lower school, which is, you know, grades K
Speaker 1: through six, K through five, and our kids are seeing
Speaker 1: about two grade levels of math a year. We just
Speaker 1: launched a con World School with Arizona State University, which
Speaker 1: is an online high school, and they they're using similar
Speaker 1: modalities but in an online framework. And they just saw
Speaker 1: on the first semester five times the expected growth in math,
Speaker 1: and I think it was three times expected growth in reading.
Speaker 1: And but once again, it's just because the kids are
Speaker 1: able to learn at their own, their own pace, and
Speaker 1: because they're not learning to be passive and they're learning
Speaker 1: to have more agency over their learning. They're more entrepreneurial,
Speaker 1: they have more of a growth mindset, they're willing to
Speaker 1: take risks. We think they're feeling a lot less of
Speaker 1: the stress and anxiety that we know is a bit
Speaker 1: of an epidemic right now. Amost young people so there's
Speaker 1: not a huge history with con Lab School because you
Speaker 1: only started it a few years ago. But where are
Speaker 1: you in terms of college placement and how you've been
Speaker 1: able to, uh see how these kids have done longitudinally. Yeah,
Speaker 1: and as I said, the school has been around for
Speaker 1: about eight years. We had this current garagings graduating class
Speaker 1: is going to be our our third But you know,
Speaker 1: this is a school that did not have traditional letter grades.
Speaker 1: We measure, but at any point students can improve their grade.
Speaker 1: But out of you know, I remember our first graduating
Speaker 1: class of nine students they went to and I'm very
Speaker 1: sensitive because so many folks index on where kids go
Speaker 1: to school and all of that, but our students ended
Speaker 1: up at some of the top places in the world. Um,
Speaker 1: you know, I don't want to get to brand conscious
Speaker 1: about where they went, but they went to let me
Speaker 1: just say, very very good, very good places. And they're
Speaker 1: even more importantly, we we stay in touch with these
Speaker 1: students and they're really thriving in these environments because frankly,
Speaker 1: the college environment is all about self based learning. The
Speaker 1: college doesn't pretend that way, but really that's what it's
Speaker 1: all about. No, you're absolutely right, you get what you
Speaker 1: put into it. Essentially when you go to college. Hey,
Speaker 1: so sal we're looking at your school, um collapse school.
Speaker 1: Can you scale that? You want to scale it? Even
Speaker 1: for there it's in Mountain View, right, but can you
Speaker 1: go further with it or do you want to? Yeah,
Speaker 1: the whole idea and I always tell the team there
Speaker 1: that is not just to start another school in Silicon
Speaker 1: Valley for my kids and other folks in this area.
Speaker 1: Obviously you have to serve the kids in the community well,
Speaker 1: but it's really to show that there's another way of
Speaker 1: doing things and then essentially sharing with the world how
Speaker 1: to do that so it can it can scale. So
Speaker 1: one of the first ways of scaling is by starting
Speaker 1: con World School with Arizona, a s U that's actually
Speaker 1: free to any student in Arizona because it has a
Speaker 1: state charter there. And then it's we we hope reasonable
Speaker 1: cost outside and we're working on more states, so you
Speaker 1: really can get a free world class education if you're
Speaker 1: if you're in the states that that supports something like this.
Speaker 1: So that's one skilling mechanism, and we are seeing folks
Speaker 1: form essentially hybrid pods where they're getting the benefits of
Speaker 1: in person sports, etcetera. But then they're able to use
Speaker 1: the World School, uh for their Socratic dialogue and their
Speaker 1: seminars and you know, being able to meet their advisors
Speaker 1: and things like that. We also are starting more con
Speaker 1: lab schools. It's likely we might start one in the Midwest. Um.
Speaker 1: And so I think we are at the moment. I
Speaker 1: won't ever say we have nailed it. It's a lab school.
Speaker 1: We're constantly iterating, but I think we're starting to scale it.
Speaker 1: And that could take multiple forms. It could take an
Speaker 1: online school, it could it could be a share the
Speaker 1: curriculum with other folks. What what, however, we can get
Speaker 1: it out there, Salgion, The numbers work. It's it's really
Speaker 1: tough to be self sufficient as a school. It's a
Speaker 1: it's a private school, so there's you know, tuition. Um.
Speaker 1: But I mean I went to a school that my
Speaker 1: friend's mom started for second grade and the school was
Speaker 1: only around for about ten years. They just couldn't keep
Speaker 1: it going. It was tough. Um. Are the numbers working.
Speaker 1: The numbers are working. And what I've always given the
Speaker 1: charger to the school that we should be able to
Speaker 1: be in terms of cost per student per year, cost
Speaker 1: competitive with UM some public school districts, and they're huge variation.
Speaker 1: If you look at at the high end, a New
Speaker 1: York City public school spends about forty dollars per student
Speaker 1: per year. A lot of you know, came Bridge, Boston, Massachusetts,
Speaker 1: they are mid twenties, even approaching thirty thousand dollars per year.
Speaker 1: But then you have other places, including high cost of
Speaker 1: living places like California, where depending on the district, you're
Speaker 1: really looking at more of like ten to fifteen thousand
Speaker 1: dollars per year. Right now, if if you were to
Speaker 1: hold all things equal, we actually have to pay a
Speaker 1: lot in real estate expense because we're renting out a
Speaker 1: couple of campuses. But if our real estate expense we're
Speaker 1: similar to what a traditional public school was spending, where
Speaker 1: we we have our cost per student down to about
Speaker 1: twenty dollars per year UM. And and so if you
Speaker 1: include the real estate that it's it's approaching a higher number.
Speaker 1: It's you know, it's probably closer ton or twenty eight thousand.
Speaker 1: But UM, to answer your question, we we intentionally are
Speaker 1: keeping it much more accessible than the surrounding market would support.
Speaker 1: These numbers don't sound like small numbers. To anyone anywhere,
Speaker 1: but especially but if you live in the Bay Area,
Speaker 1: if you live in New York, you'll know that a
Speaker 1: lot of the top independent schools will easily charge you
Speaker 1: fifty or six thousand dollars a year um. And you know,
Speaker 1: we're we're we're pretty focused on showing this model can
Speaker 1: scale and as an as is accessible and also has
Speaker 1: evidence that isn't just another independent school. It's the kids
Speaker 1: are growing faster and happier, you know, in doing this?
Speaker 1: What's been the easy part? What's been the difficult parts
Speaker 1: of doing everything? Including school or Kon academy or the
Speaker 1: whole everything from the get go. Like I think about
Speaker 1: when you started, and I know, I remember, you know,
Speaker 1: we talked about Bill Gates being you know, a supporter
Speaker 1: of it. You have some really high profile people, and
Speaker 1: I'm sure that helped um, you know, doing the Ted talk.
Speaker 1: But I'm just wondering, as you've done this, what's been
Speaker 1: the easy part, what's the difficult part? Well, the easy
Speaker 1: part is this is something that I've always been drawn to,
Speaker 1: even when you know my past, my past careers in
Speaker 1: tech and just been an analyst at a hedge fund,
Speaker 1: which I both careers I enjoyed, but I always was drawn.
Speaker 1: That's why I started tutoring my cousins. That's why I
Speaker 1: started writing software for them that was focused on learning,
Speaker 1: and that's why I started making deals because I enjoyed
Speaker 1: making these these education videos. So that was always the
Speaker 1: easy part, and whenever I want to recharge, even today,
Speaker 1: that's the kind of stuff that I try to really
Speaker 1: work on. Let me make some videos today. The hard part,
Speaker 1: I would say, the early days. The hard part is
Speaker 1: convincing people to take you seriously. Especially you know now
Speaker 1: it's a somewhat mainstream thing to be a YouTube influencer
Speaker 1: or whatever else. Back in two thousand and six, two
Speaker 1: thousand seven, two thousand and eight, it was very um
Speaker 1: let's call it. No one really took you seriously. And
Speaker 1: then once we started to get off the ground and
Speaker 1: people took note. I think when we said no, we
Speaker 1: just don't want to be a YouTube channel, we don't
Speaker 1: want to be another for profit education company. We actually
Speaker 1: want to create an institution for the world that actually
Speaker 1: has a chance of being the safety net education system
Speaker 1: for the world that can reach billions of people. I
Speaker 1: think back then some people might not take that so seriously.
Speaker 1: For a guy operating out of a walk in closet. Um,
Speaker 1: I think you fast forward and yes, you know folks
Speaker 1: like Bill Gates and the Doers, and you know there's
Speaker 1: so many people, um that you know I grew up
Speaker 1: reading about who who have now become some of our supporters.
Speaker 1: But whenever I say those names are mind folks that
Speaker 1: we still need their help, so please foction to kind
Speaker 1: of academy. But UM, I think now what's gotten easier
Speaker 1: is when when I take on a project. Let's say
Speaker 1: we started school we're starting this online high school, or
Speaker 1: we started another not for profit called Schoolhouse dot World
Speaker 1: which gives free tutoring. They way it's able to do
Speaker 1: is to leverage volunteership. These types of things would have
Speaker 1: been very hard when I was just a guy in
Speaker 1: a closet back in two thousand eight or two thousand nine,
Speaker 1: But now people are willing to take it seriously, They're
Speaker 1: willing to partner. Uh. You know, the fact that even
Speaker 1: volunteers show up to Schoolhouse dot World and to tutor
Speaker 1: other people is because there's some trust and belief in
Speaker 1: what we're trying to pull off. But even today, I
Speaker 1: think I think it's a lot of what I do
Speaker 1: is trying to get people to believe I I really
Speaker 1: I realized that that's like the believe both in our
Speaker 1: own organization, Like hey, hey, hey, folks, we're literally trying
Speaker 1: to move the dial for the world. And I know
Speaker 1: you can get cynical about that, but it's doable. Um,
Speaker 1: how do you use AI in education? Well, there there's
Speaker 1: you know, there's a lot of what we already know
Speaker 1: is going on, and then there's a lot of potential.
Speaker 1: Even before these large language models like chat, GPT and
Speaker 1: all of that, we've always thought, hey, AI could be
Speaker 1: used to this is it's being used in for profit
Speaker 1: companies to recommend the right add to you. In an
Speaker 1: education setting, maybe it can be used to recommend the
Speaker 1: right content to you. And we've used variations of that
Speaker 1: in the past at Kon Academy. I think what's exciting
Speaker 1: about these large language models is the potential for them
Speaker 1: to start to act like a socratic tutor, for them
Speaker 1: to intro to introduce modalities that might not have existed before.
Speaker 1: I know people are really worried about this doing essays
Speaker 1: for students, but maybe we can embrace that and say, well,
Speaker 1: maybe it can help the student do something more ambitious.
Speaker 1: Maybe it can help give feedback that. Traditionally, when you
Speaker 1: write an essay, at best, it might take you a
Speaker 1: week or two to get the feedback, and then if
Speaker 1: even if you make it better, you may right not
Speaker 1: get a chance to to get feedback on that. Now
Speaker 1: you could get instant feedback. Uh. I did a little
Speaker 1: experiment with my daughter or where we used a large
Speaker 1: language model to co write a story, but then she
Speaker 1: had a chance to talk to one of the characters.
Speaker 1: That's something that just seems like science fiction, but it's
Speaker 1: now doable. Or we're at the cusp of of making
Speaker 1: these things doable. So if you imagine, I think we're
Speaker 1: in the next year, we're going to see layers on
Speaker 1: top of tools like con academy where you might have
Speaker 1: a tutor and AI tutor. Now, once again, I don't
Speaker 1: think this replaces the human but it just gives more
Speaker 1: leverage to the human teacher, to the human parent, uh
Speaker 1: to be able to be able to do more. It's
Speaker 1: like moving beyond when you know math right, it used
Speaker 1: to be what's what's the answer? Did you get the
Speaker 1: answer right? And then it moved to wait, what was
Speaker 1: your thinking? And show us the work. And okay, you
Speaker 1: know that was more important than really kind of the
Speaker 1: final to some extent or as important to getting the
Speaker 1: answer right. What do you think about the A C
Speaker 1: T S and S A T S. A lot of
Speaker 1: it went away during the pandemic? Good move, Like do
Speaker 1: we have to move away from that stuff? Well? Those
Speaker 1: tests is perfect. But I always tell people if you
Speaker 1: don't like standardized tests, what part you not like the
Speaker 1: standardized or the test? And you need to have some
Speaker 1: way of of of understanding, and especially now that you
Speaker 1: have chat GPT that can write your college essays, this
Speaker 1: is actually the fairest mechanism by which to be able
Speaker 1: to see who's college ready brilliant we have not. That
Speaker 1: is just an interesting way of thinking about this. And
Speaker 1: I don't like my test part. To answer your sal
Speaker 1: thank you so much, good luck. Such an incredible organization
Speaker 1: that you've created. Um and as we said, what almost
Speaker 1: twenty years in, it's pretty remarkable. Sal con He is
Speaker 1: founder and chief executive officer of con Academy, joining us
Speaker 1: via zoom from Mountain View, California. Just google them you
Speaker 1: can find out all the incredible work that they are. Yeah,
Speaker 1: it's incredible for a long time. More than fifty languages
Speaker 1: used in more than a hundred and ninety countries, a
Speaker 1: hundred and forty five million registered users. You're listening to
Speaker 1: the Bloomberg Business Week podcast. Catch us live week days
Speaker 1: from two to five pm Eastern on Bloomberg Radio, The
Speaker 1: Bloomberg Business and and you too. You can also listen
Speaker 1: live to our flagship New York station, Just Say Alexa
Speaker 1: play Bloomberg Love and Dirty Carol Masser along with Katie Griffel.
Speaker 1: The only reason Katie agreed to do the show is
Speaker 1: because of the segment. You can be honest, I heard
Speaker 1: this was happening. I had to be here, all right.
Speaker 1: It's been another nutty week. Katie was traveling lots of news,
Speaker 1: as you know, markets, a little bit of some gyrations here.
Speaker 1: We know we needed to wrap up with a segment
Speaker 1: on wine, and so with us right now is Josh Green,
Speaker 1: editor in chief for Wine in Spirits Magazine, here in
Speaker 1: our Bloomberg Interactive Broker studio. And yes we're gonna sample
Speaker 1: someone in a moment. But Josh, first of all, how
Speaker 1: are you great to be here? I'm doing very well.
Speaker 1: It's a spring day outside that's what. It's beautiful. It
Speaker 1: feels really good, it feels really actually going running after this,
Speaker 1: but still I'm here for the one. You can always
Speaker 1: have a little sip. That's true. Well, extra springing your step. UM,
Speaker 1: big trends in wines last year. Talk to us a
Speaker 1: little bit about this past year and how this year
Speaker 1: is shaping up when it comes to the wine industry. Well,
Speaker 1: everyone was very nervous about the pandemic from the industry's
Speaker 1: point of view, because everyone closed their tasting rooms. But
Speaker 1: UM deep direct to consumer did super super well. And UM,
Speaker 1: so there's this phenomenon everyone calls it premium. Yeah, a
Speaker 1: lot of people bought more wine, and so UM premium wines.
Speaker 1: Premiumatization is increasing at a pretty stiff clip. So UM
Speaker 1: it means that people are buying up. And what's unfortunate,
Speaker 1: because the industry relies on it, is that things under
Speaker 1: fifteen dollars are sales are are diminishing, but things above
Speaker 1: fifteen are actually on the increase. So UM. The Silicon
Speaker 1: Valley Bank does their annual report every year and UM
Speaker 1: it created a lot of buzz in the industry this
Speaker 1: year because there was there was a number of UM
Speaker 1: there were a number of trends that were scary for
Speaker 1: the industry, including this issue of baby boomers continuing to
Speaker 1: drink a lot of wine and millennials continuing not to
Speaker 1: drink a lot of wine. All right, millennial, what's wrong?
Speaker 1: So that? Are you a millennial or you? Actually? I
Speaker 1: know I am a millennial. I will say the pandemic.
Speaker 1: You bought more wine. I drank a lot more wine
Speaker 1: because I was with my parents for six months, so
Speaker 1: I got really into white wine. For example. It used
Speaker 1: to be just read only, but my mom loves the
Speaker 1: white wine. Tell me about these millennials who are not
Speaker 1: made well, they are often choosing to drink spirits. Um.
Speaker 1: So the baby boom generation came to wine really in
Speaker 1: the early nineties when sixty Minutes produced this segment on
Speaker 1: how red wine was good for your health. Now that yeah,
Speaker 1: now that's been questioned, and um, since it's been questioned.
Speaker 1: It also is it a time when younger people who
Speaker 1: are nesting m getting married and that's when they usually
Speaker 1: start drinking wine are not turning to wine as much.
Speaker 1: So they'll go out to a restaurant and the loader
Speaker 1: cocktails and cocktails are booming and spirits are booming. So
Speaker 1: for that generation, they're choosing either not to drink alcohol
Speaker 1: or to drink alcohol other than wine. That is so interesting.
Speaker 1: Actually that does mirror my own life because my husband,
Speaker 1: for example, he loves to cook, he also loves to
Speaker 1: make cocktails. So I don't know. But for me, the
Speaker 1: pie is just getting bigger. It's not necessarily taking all
Speaker 1: of the above. So it's not really dire. I mean
Speaker 1: there is there. There is a continuing um there. People
Speaker 1: are continuing to drink wine. It's just that the growth
Speaker 1: is in the above fifteen so nine revenue was up
Speaker 1: nine that in that segment of the industry. It's interesting
Speaker 1: because I do feel like we you know, we do
Speaker 1: a lot of wine segments. To be quite honest, on
Speaker 1: Bloomberg Business Weekend, I do feel like we often have
Speaker 1: people who you know, come on and say, like, there's
Speaker 1: a range of money you can spend on wines, but
Speaker 1: there's a lot of great wines out there under twenty
Speaker 1: dollars or under You don't the whole concept in this
Speaker 1: idea of you don't have to spend a ton of
Speaker 1: ton of money to get a great bottle of wine.
Speaker 1: Well that's absolutely true. And in fact, the boomers, who
Speaker 1: are older in their sixties are buying more wine by
Speaker 1: volume but at a lower price, and the younger people
Speaker 1: are actually buying higher priced wines to their sort of
Speaker 1: wine curious. They're experimenting, they're looking at things that they
Speaker 1: don't know about and trying them, and so they're willing
Speaker 1: to spend more on on a wine for an occasion,
Speaker 1: but they're not drinking as much every day. Okay, that's
Speaker 1: really interesting. Do you do it? I mean, well, it
Speaker 1: does feel when it comes to different price points, like
Speaker 1: buying something fifteen dollars, I just probably don't do it.
Speaker 1: I probably buy up and for it is more occasion based.
Speaker 1: It feels like it's not just like, oh it's too
Speaker 1: sale drink wine, Like then I might actually make a
Speaker 1: gin and tonic at home, But I don't think I
Speaker 1: speak for an entire generation. So I mean, I am
Speaker 1: curious though when I think about my peers. I know
Speaker 1: that mock tails have seemingly become a really big trend,
Speaker 1: and you were talking about how there's this gravitation towards cocktails,
Speaker 1: But what are you seeing when it comes to non
Speaker 1: alcoholic drinks? We see a lot of growth in that area,
Speaker 1: and we as a magazine don't pay a whole lot
Speaker 1: of attention to that, um, But there is a lot
Speaker 1: of activity because you are because we're wine in spirits
Speaker 1: and we don't really cover non alcoholic stuff. But there's
Speaker 1: a lot of activity even among wineries to produce lower
Speaker 1: alcohol wines and no alcohol wines and um. And there's
Speaker 1: also you know, in terms of dry January, curious, sober, sober,
Speaker 1: curious people there there's those are terms I here all
Speaker 1: the time now and you never heard them. Curious. Yeah,
Speaker 1: it's a whole trend on TikTok. Well, it's interesting Timstanovic,
Speaker 1: who's my normal co host, you're my abnormally kidding, but
Speaker 1: he drinks non alcoholic beer, um, and he's a millennial.
Speaker 1: Like to make fun of him, but I feel like
Speaker 1: that's not okay, I can't. In fact, there's some really
Speaker 1: good on alcoholic beers out there, and now some really
Speaker 1: good some really good products made from wine that are
Speaker 1: not alcoholic that I have friends who are making some
Speaker 1: that are delicious. All right, So what's innovation in the
Speaker 1: wine industry today? I would say that the innovation is
Speaker 1: really in farming, um, because you have this huge challenge.
Speaker 1: One of the one of the huge challenges to the
Speaker 1: industry is climate change, and so people have to develop
Speaker 1: farming tools and farming techniques that will sustain them through
Speaker 1: these really aggressive extremes of weather. And so people are
Speaker 1: you know, in certain areas where there's a lot of hail,
Speaker 1: people are finding ways of netting that is not driving
Speaker 1: them out of business. So netting the vines to protect
Speaker 1: the grapes um where there is where there have been
Speaker 1: fire fire forest fires, it's been really devastating. I'm just
Speaker 1: I was I'm headed down to Chile next month to
Speaker 1: the south where I love the wines from the far South,
Speaker 1: where these very ancient vineyards, year old vineyards, and they've
Speaker 1: been wiped out up by forest fires in the last week.
Speaker 1: So people need to find tools to deal with protecting
Speaker 1: their vines and to deal with protecting them from heat. Um,
Speaker 1: you have a lot of people. I guess the biggest
Speaker 1: trend farming wise is that even in places like Burgundy,
Speaker 1: you're seeing a classification that was based on where the
Speaker 1: snow first melted in the spring, and now the classification
Speaker 1: is based on where the coolest areas are, so you
Speaker 1: don't get sunburned on your grapes, So you don't you
Speaker 1: want a northern exposure suddenly rather than southern exposure. It's
Speaker 1: so funny because I think Business Week has done some
Speaker 1: reporting to that, just saying because of climate change, Okay,
Speaker 1: so maybe you can't really grow here, but in this
Speaker 1: area where it maybe used to be too warm, it's
Speaker 1: a little cooler where it was too cool, like warmer.
Speaker 1: So things are kind of shifting around the world a
Speaker 1: little bit. And then in those in those areas where
Speaker 1: you had moisture in the soil and that wasn't good
Speaker 1: for the vines, suddenly against drought it's saving the vines.
Speaker 1: So all these all these places that were once secondary
Speaker 1: are now becoming primary. And it doesn't necessarily mean that
Speaker 1: the great vineyards are bad now, but the great vineyards
Speaker 1: are challenged in a way they've never been challenged before.
Speaker 1: So you can't rely on the fact that the vineyard
Speaker 1: is great. You have to know that the producer is
Speaker 1: really actively farming their vines to protect them from the
Speaker 1: grapes from the sun, to protect the vines from drought.
Speaker 1: You know that it's a big deal. Now affects the advantage,
Speaker 1: and so we only have like a minute left, but
Speaker 1: I am curious. Then we're gonna open up some bottles exactly.
Speaker 1: I really want to get to that. But you know,
Speaker 1: innovation when comes it comes to farming. But when we
Speaker 1: talk about, you know, the decrease consumption among millennials when
Speaker 1: it comes to wine. Are our wine makers trying to
Speaker 1: innovate around that? Are they trying to reach out to
Speaker 1: those millennials. I think that there will be. I believe
Speaker 1: that there will be a necessary shift in the way
Speaker 1: that wines are priced. UM, because when I was growing up,
Speaker 1: I'm an old guy now, but when I was growing up,
Speaker 1: I could buy Roumier for went dollars a bottle at
Speaker 1: the store. Now that same bottle that I bought for
Speaker 1: eight hundred dollars. The people that I'm serious designation UM
Speaker 1: and the people that are coming into the industry now,
Speaker 1: they don't get to taste those wines and they don't
Speaker 1: get the kind of excitement around the one. I mean,
Speaker 1: we're showing you two really beautiful wines, but they're out
Speaker 1: of the budget of most people. So UM, the industries,
Speaker 1: I think the people who are going to be most
Speaker 1: successful in the next few years are the people who
Speaker 1: are going to be innovating on creating exciting wines. Not
Speaker 1: commercial winds, but exciting wines. It's wines that will excite
Speaker 1: people at a price point that they can afford. Now
Speaker 1: that makes so much sense. Um, So we're gonna open up.
Speaker 1: First of all, Um, Josh, you brought some wine for
Speaker 1: us to sample, and some champagne actually for us to sample.
Speaker 1: So we're gonna open up. Tell us about this bottle
Speaker 1: that we're gonna that. Stephen actually who's in studio with us,
Speaker 1: is going to open up for us. So Steven's opening.
Speaker 1: Steven's opening the addition to for three of Rotor collection
Speaker 1: too for three And what this is is a completely
Speaker 1: new kind of wine from Rotor. So the two we're
Speaker 1: doing this big event on next week and the two
Speaker 1: champagne producers pouring at the event are both pretty significant houses.
Speaker 1: They put vineyards first, that's Bowl and j and Ludi Roder.
Speaker 1: And what Ludi Roder did was they their Brute Premier wine,
Speaker 1: which was their um, their basic non vintage brute wine.
Speaker 1: They transitioned um a year ago over to this collection wine. So, um,
Speaker 1: what this is that one's for you? It is first
Speaker 1: of all, can I just say, I don't know if
Speaker 1: you can see this all right, generous, it's well, it's generous,
Speaker 1: and it's it's gorgeous, like the color the bubbles. So
Speaker 1: this is the two eighteen vintage. It's about eighteen vintage.
Speaker 1: And then Jean Jean papists Lacaillon, who's the winemaker and
Speaker 1: the viticulturist there. He started what he calls a perpetual
Speaker 1: reserve in two thousand twelve, so he started taking wines
Speaker 1: and putting them away. So he's got two eighteen vintage
Speaker 1: from his growers and they're consulting with all their growers.
Speaker 1: Everything else that they make is from their own vineyards,
Speaker 1: but this wine is from growers, including some of their
Speaker 1: own vineyards, but from growers. And then they have this
Speaker 1: perpetual reserve what they add to each year, so there's
Speaker 1: a consistency. So there's a consistency that they blended into this.
Speaker 1: And then they have some wine from oak aged reserves
Speaker 1: and they blended all together and they make this wine.
Speaker 1: And it's completely a different style of wine from what grew.
Speaker 1: Premier used to be cheers say wine, but it's a
Speaker 1: champagne to champagne, but champagne is a wine. I was
Speaker 1: a little confused about that. Is it if I call
Speaker 1: it champagne? Not at all because from it's from Champagne,
Speaker 1: but it's a wine from Champagne. They also make still
Speaker 1: wines in Champagne. You know what, go ahead, no finish.
Speaker 1: That makes still ones in champagne, and that makes sparking moneagine.
Speaker 1: You know what's really fun is I feel like champagne.
Speaker 1: At least for me. Growing up, it was holidays and celebrations.
Speaker 1: But you go now to a bar, went to a
Speaker 1: work event, and that was the drink that they were
Speaker 1: initially kind of having everybody drink and it's it's just
Speaker 1: you go out and people are like, well, let me
Speaker 1: have a glass of champagne. A lot of people, a
Speaker 1: lot of wine directors at restaurants. We're interviewing a bunch
Speaker 1: of them right now for a project we work on
Speaker 1: for our next issue. And I was just interesting interviewing
Speaker 1: Natalie McDade at Craft yesterday talking about what's going on
Speaker 1: to Craft, and she said one of the things she's
Speaker 1: seeing is that people are drinking champagne as a wine
Speaker 1: for dinner for the first time in her career, that
Speaker 1: they're not just waiting to have a celebration. They're having
Speaker 1: it at dinner, which is something that I love to hear,
Speaker 1: that she loves to see and that many people in
Speaker 1: the industry have been waiting to happen. Yeah, I see
Speaker 1: it all the time. I've done it. Yeah. Well, maybe
Speaker 1: this is just antec data, but to the point that
Speaker 1: it used to be, it still is a celebration drink.
Speaker 1: I feel like I have noticed people order prosecco when
Speaker 1: they're just like casually out for dinner. Maybe champagne feels
Speaker 1: a little bit too much, too serious, or you know,
Speaker 1: too much of a celebration. Prosecco seems to have taken
Speaker 1: on this role is like this is more every day. Ye.
Speaker 1: There there's very commercial prosecco and was also really absolutely delicious,
Speaker 1: very special prosecco, very carefully grown prosecco. So there's some
Speaker 1: really great wines in that category, and that's come up
Speaker 1: a lot, and I think that it's become extreme. It's
Speaker 1: really blown away a lot of the other categories of
Speaker 1: sparkling wine other than champagne. Champagne is continuing to boom,
Speaker 1: and prosecco was really booming. But we what we did
Speaker 1: was Um. Stephen. Stephen brought brought some food that's gonna
Speaker 1: be paired with this UM, with this wine at the event.
Speaker 1: We'll tell us about this. So this is pizza Bianca,
Speaker 1: which is UM. Robin Wright is the sammier at the
Speaker 1: wine director at Chisiama Chiamo in UM Manhattan West UM.
Speaker 1: It's a Union Square Hospitality Group restaurant. And yeah, and
Speaker 1: so she said that her favorite thing with this dish
Speaker 1: is champagne and sparkling wine. So we have them right
Speaker 1: next to a prosecco Domi prosecco and right next to
Speaker 1: Um rotor or State Rotor, Rotor, Louis rot Or, Champagne
Speaker 1: and UM. So we thought we'd bring it over. We
Speaker 1: were bringing the rotor. We thought we'd bring some some
Speaker 1: You heard that we weren't gonna let Katie eat until
Speaker 1: she had She's not going to eat on air. Well,
Speaker 1: I'm going to eat a second, but I want to
Speaker 1: get to the second one because we've got about almost
Speaker 1: three minutes left here. So tell us about you brought
Speaker 1: us another UM a wine here red, yes, a red wine.
Speaker 1: So this is like this is Les marchiole so Tincia Merrily.
Speaker 1: UM has this estate in Bulgary, which is on the
Speaker 1: coast of Italy and the coast of Tuscany. And she
Speaker 1: and her her husband who passed away I think in
Speaker 1: the early two thousand's. Um, he and she developed this
Speaker 1: estate and really found that Cabernet franc performed so well
Speaker 1: in this part of Tuscany. So this is Cabernet franc.
Speaker 1: It is a very I mean to me, this is
Speaker 1: one of the great wines of Italy. Um, it's a
Speaker 1: very beautiful want to make everybody know that we really
Speaker 1: do have the one here. This is true. It's a
Speaker 1: very elegant wine, a very delicate red wine with a
Speaker 1: lot of richness underneath. So she's a very beautiful, delicate
Speaker 1: woman with a lot of strength underneath. My ADOR's she's
Speaker 1: amazing and um and she's you know, after her husband,
Speaker 1: after her husband passed, she really took it on herself
Speaker 1: to make this her project completely and the wine has
Speaker 1: only ever gotten better and better and better. And she
Speaker 1: she's one of the great producers in Italy. Now, I
Speaker 1: just love what's going on. We've had What were you
Speaker 1: going to say? No, I just I want to get
Speaker 1: into like the scoring. Like you mentioned that it scores
Speaker 1: well in Tuscany. What what actually comprises how a wine scores.
Speaker 1: What's the sort of criteria there? It really depends on
Speaker 1: who's scoring it. Um. For us, a lot of it
Speaker 1: has to do with our immediate reaction to the wine
Speaker 1: and what we what our expectations are for the wine.
Speaker 1: Really gentle, Yes, it's gentle and beautiful. Yeah, but it's
Speaker 1: full you were talking. I just I just wann't taste
Speaker 1: it before going well, and only got like forty seconds
Speaker 1: left here tell us about this event, uh six pm
Speaker 1: at Metropolitan Pavilion, which is on eighteen Street west of
Speaker 1: sixth Avenue. This is our top one hund wines of
Speaker 1: the year, which we scored the wineries of the year,
Speaker 1: So these are the wineries that got the highest scores
Speaker 1: and the most highest scores, and so they're going to
Speaker 1: be wineries like Um Biggest Sicilia will be there, which
Speaker 1: is probably the greatest estate in Spain, Um Corson and
Speaker 1: Diamond Creek will be there from Napa Valley. This is incredible.
Speaker 1: They're amazing wines here, like wines you won't be able
Speaker 1: to taste virtually anywhere else in your life. And it's
Speaker 1: a very reasonable ticket to get in. So we're actually
Speaker 1: the tickets are going really fast right now. We're very
Speaker 1: excited about that because since the pandemic is is sort
Speaker 1: of on the wane, people are out and about and
Speaker 1: really excited about going out. I agree with you, everybody
Speaker 1: wants to go do things. Um, Josh, we have to run.
Speaker 1: What a sport. What a great way to wrap up
Speaker 1: our week. Josh Green, editor in chief of Wine and
Speaker 1: Spirits magazine, check out on Wednesday, fabru fifteen, six to
Speaker 1: eight pm, Top one Tasting. This is Bloomberg. You're listening
Speaker 1: to the Bloomberg Business Week Podcast. Catch us live week
Speaker 1: days from two to five pm Eastern on Bloomberg Radio,
Speaker 1: the Bloomberg Business App, and you too. You can also
Speaker 1: listen live to our flagship New York station, Just say Alexa,
Speaker 1: play Bloomberg, E Love and Didi. All right, do you
Speaker 1: want to get to our next guest? Because first of all,
Speaker 1: just to set the stage a little bit, Maddie, a
Speaker 1: recent incredible deep dive by our Bloomberg Equality and Wealth team.
Speaker 1: It looked into what it called the slowest moving financial
Speaker 1: crisis of our time, and that was how public finances
Speaker 1: are buckling as retirement promises made to previous generations collide
Speaker 1: with the realities of an aging population. Basically, we're getting older,
Speaker 1: will live in longer in a lot of ways, like
Speaker 1: how do you kind of maintain your retirement um, and
Speaker 1: maybe also you know, live in a nice way going forward. Yeah,
Speaker 1: it's scary and it's a reminder of the importance of
Speaker 1: saving early and often it's uns like our parents are
Speaker 1: in very all right, So let's get with us because
Speaker 1: we have a great guest who's got some thoughts on that,
Speaker 1: Johnny Us from Charlotte, North Carolina via zoom. Attorney, entrepreneur
Speaker 1: and author Scarlett Cochrane just get a new book out.
Speaker 1: It's called It's Not About the Money. A Proven Path
Speaker 1: to building wealth and living the rich life that you deserve. Uh,
Speaker 1: and great to have you here with us, Scarlett. You know,
Speaker 1: I've got to said I got to say that, I've
Speaker 1: I've read that this book is described as it's a
Speaker 1: book about money, but it's not really about the money.
Speaker 1: So explain that, because it's not about the money, because
Speaker 1: it's about the life that's possible when you create financial
Speaker 1: when you make financial decisions that align with that life. So,
Speaker 1: like you just mentioned, wanting to know that you have
Speaker 1: enough money set aside to not just retire, but also
Speaker 1: to maintain the quality of life that you want to
Speaker 1: have in retirement. That's what it's about. It's it's so important.
Speaker 1: And I feel like, I know you're on TikTok, Scarlett.
Speaker 1: I am a little bit of a TikTok addict, and
Speaker 1: I feel like there's a lot of wealth advice on
Speaker 1: TikTok that's not always the best. Um, a lot of
Speaker 1: like just affirm that you're going to be wealthy someday.
Speaker 1: How does your book differ from that kind of I
Speaker 1: don't want to say woo woo advice, but just a
Speaker 1: little bit more ethereal tell me about how how your
Speaker 1: advice is a little bit more actionable. So, first of all,
Speaker 1: let's not knock the woo, because it's important that we
Speaker 1: have that vision for what we want our lives to
Speaker 1: look like, especially people like me who come from really
Speaker 1: humble beginnings and want to really create that American dream.
Speaker 1: And we have to be able to dream and feel
Speaker 1: a little woo to do that. However, just the dreaming,
Speaker 1: that's the beginning, but then you have to actually take action,
Speaker 1: and to take action that requires knowledge and empowering yourself
Speaker 1: to understand how finances actually work. And for example, in
Speaker 1: the book, I teach a very concrete concept called the
Speaker 1: minimum investing rate, So that's knowing how much money you
Speaker 1: need to be investing, not just saving, but investing every
Speaker 1: single a month in order to retire when you want
Speaker 1: to and have the kind of lifestyle that you want
Speaker 1: to have in retirement. So it's not just dreaming about
Speaker 1: the ideal retirement, but getting really practical and tangible with
Speaker 1: the how well you know, I've got to say Scarlet,
Speaker 1: and I've got family members like have done these financial
Speaker 1: vision boards right and just kind of checked them off
Speaker 1: whether it's college education, whether it's a beach house or
Speaker 1: a new car or whatever, you know, and kind of
Speaker 1: helping to keep them focused. But it does seem like
Speaker 1: sometimes it's tough to invest and then also kind of live.
Speaker 1: So what is how do you get your head around that?
Speaker 1: What's your advice on that? My advice is to start
Speaker 1: where you are, so meet yourself where you are and
Speaker 1: do what you can, but you also have that long
Speaker 1: term goal in mind and you can work towards that
Speaker 1: over time. So for me, when I graduated from law school,
Speaker 1: I went into public interests. I was a banking and
Speaker 1: finance attorney, was speaking sixty dollars a year, but I
Speaker 1: made the decision the commitment that I needed to start investing.
Speaker 1: So I started investing fifty dollars a paycheck, and ten
Speaker 1: years later that fifty dollars turned into over five hundred
Speaker 1: thousand dollars in my nesting. And that's the power of compounding,
Speaker 1: but also slowly increasing the amount that I was investing
Speaker 1: over time. And you also talk a lot about the
Speaker 1: importance of knowing your numbers, Scarlett, which I thought was
Speaker 1: really critical. Uh, can you talk about why that is
Speaker 1: so important and what that looks like in practice. Well,
Speaker 1: we all have a tendency to do what I call
Speaker 1: mental money math, where we think that our finances look
Speaker 1: a certain way and we think that we spend a
Speaker 1: certain way, but we don't actually know. And when you
Speaker 1: know your numbers, you know how much you're bringing in,
Speaker 1: how much you're paying in taxes for insurance, how much
Speaker 1: you're actually investing, then you can make sure that you're
Speaker 1: really on track to hit all of your savings and
Speaker 1: investing and life goals. Like you mentioned, we are in
Speaker 1: this slow silent savings crisis. And the reason is because
Speaker 1: people don't know what the number is that they're trying
Speaker 1: to hit, and so they don't realize that they're falling
Speaker 1: off track until it's frankly a bit late. Actually, Scarlett
Speaker 1: Matte and I were just talking kind of off air
Speaker 1: before we got going, and the whole idea of if
Speaker 1: you start jotting down what you're spending, that's when you're
Speaker 1: kind of blown away because it's so easy, especially living
Speaker 1: in a city, right, Maddie, like New York City, Like
Speaker 1: money just kind of flies off out of your pocket. Yeah,
Speaker 1: there's the joke that you can't leave your house in
Speaker 1: New York City without spending a hundred dollars, right exactly,
Speaker 1: it just gets eaten up. All right, Scarlett just got
Speaker 1: about a minute or so left here. So what's one
Speaker 1: or two pieces of advice if somebody wants to get
Speaker 1: started on this, Well, first of all, grab the book.
Speaker 1: It's a comprehensive system taking you from how you think
Speaker 1: about money to dreaming big to really tactical tactical advice
Speaker 1: to how to manage your finance on a day to
Speaker 1: day basis. But number two, I would just allow yourself,
Speaker 1: give yourself a little grace, right beating yourself up and
Speaker 1: feeling shame. That doesn't make us want to do anything.
Speaker 1: That doesn't motivate us at all. So I want you
Speaker 1: to forgive yourself for the financial decisions that you've made
Speaker 1: in the past and just trust that you have your
Speaker 1: best interests at heart, and then you're going to make
Speaker 1: better financial decisions moving forward. All right, Yeah, and you're
Speaker 1: gonna make mistakes at times, but that doesn't mean you
Speaker 1: don't kind of lose don't lose focus. Basically, Um, Scarlett,
Speaker 1: thank you so much. She is an attorney and entrepreneur.
Speaker 1: Also author Scarlett Cochrane joining us there from North Carolina
Speaker 1: her new book that is out. It's Not About the Money,
Speaker 1: a proven path to building wealth and living the rich
Speaker 1: life that you deserve. This is the Bloomberg Business Week podcast,
Speaker 1: available on Apple, Spotify, and anywhere else you get your podcast.
Speaker 1: Listen live each weekday is starting at two pm Eastern
Speaker 1: pont Bloomberg dot Com, p I Heart Radio app, tune In,
Speaker 1: and the Bloomberg Business App. You can also watch us
Speaker 1: live on Bloomberg Quicktake every weekday on YouTube and always
Speaker 1: on the Bloomberg terminal