WEBVTT - Markets, Twitter, Labor, And Baby Formula (Podcast) 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.520 with essential market moving news. Find the Bloomberg Markets podcast 0:00:15.560 --> 0:00:18.439 called Apple Podcast or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.840 at Bloomberg dot com slash podcast. Please to welcome tow 0:00:22.960 --> 0:00:25.800 reback to the show. She's a director at k k ARE. 0:00:25.960 --> 0:00:28.520 I've had the pleasure of interviewing our on television before 0:00:28.680 --> 0:00:34.120 and how before we get to inflation the economy? Um? 0:00:34.200 --> 0:00:36.960 Jerome Powell, Paul and I were just saying, you're in 0:00:37.000 --> 0:00:39.520 the commercial break. Everybody we know who went to Brand 0:00:39.520 --> 0:00:42.040 Dice is either like on the board of the f 0:00:42.120 --> 0:00:45.920 f MC or incredibly successful on the street, every one 0:00:46.000 --> 0:00:49.640 of them. What what's the deal with that school? You 0:00:49.680 --> 0:00:51.599 guys are so funny. Well, first of all, thanks so 0:00:51.680 --> 0:00:53.680 much for having me in Happy Friday. You know what, 0:00:53.840 --> 0:00:55.640 I don't know, maybe it's just the luck of the draw, 0:00:55.760 --> 0:00:58.240 hard workers, a little bit of scrappiness. I think it 0:00:58.360 --> 0:01:01.160 kind of comes down to that fundamental right there. All right, 0:01:01.240 --> 0:01:05.800 so um in your hard work now at KKR. Looking 0:01:05.800 --> 0:01:08.479 at the fundamentals, what do you see in terms of 0:01:08.480 --> 0:01:11.160 this economy. It's a little bit scary going by the 0:01:11.800 --> 0:01:16.440 volatility we've been through in um markets and the the 0:01:16.480 --> 0:01:22.720 inflation um that we're seeing is you know, generational, and 0:01:23.640 --> 0:01:26.040 you've just got to be worried about the growth even 0:01:26.080 --> 0:01:29.399 if your base case isn't for a recession. Sure, yeah, 0:01:29.400 --> 0:01:31.720 I know, it's a fantastic question, and I think, look, 0:01:31.760 --> 0:01:34.840 the markets have a level of inkst and we haven't 0:01:35.160 --> 0:01:37.880 lived through something like this in a very long time, 0:01:37.959 --> 0:01:41.040 and the inflationary levels are certainly very real and something 0:01:41.080 --> 0:01:45.240 to be extremely mindful of, especially across the investment landscape. Now, 0:01:45.240 --> 0:01:47.720 it's all that being said, I think we look back 0:01:47.760 --> 0:01:49.960 at the last twenty four months and we think about 0:01:50.040 --> 0:01:52.800 kind of the big vacuum of different drivers that the 0:01:52.800 --> 0:01:55.280 economy and the markets have had, and we have to 0:01:55.320 --> 0:01:57.080 take a moment to pause and say, you know, the 0:01:57.080 --> 0:01:59.200 FED is probably sitting between a rock and a hard 0:01:59.200 --> 0:02:01.600 place and need to act. And there's a little bit 0:02:01.640 --> 0:02:05.760 of this great unlined happening. But even looking further beyond that, 0:02:05.840 --> 0:02:09.519 like the last ten years of growth have really accelerated, 0:02:09.639 --> 0:02:13.680 and there's this globalization of markets, So all that symbiosis 0:02:13.720 --> 0:02:16.440 coming together and then you're tweaking one lever like that's 0:02:16.440 --> 0:02:18.240 going to have network effects. And I think that's what 0:02:18.280 --> 0:02:20.960 we're living through right now with this volatility as we recalibrate. 0:02:21.840 --> 0:02:24.360 Tell obviously KKR has been around for a long time, 0:02:24.600 --> 0:02:28.440 tremendous pedigree, lots of experience there, but there's probably a 0:02:28.560 --> 0:02:30.880 lot of folks on a lot of your investment teams 0:02:30.919 --> 0:02:35.120 that have not lived through periods of you know, really 0:02:35.520 --> 0:02:40.720 serious inflation or rate increases or rate increases for that matter. 0:02:40.760 --> 0:02:43.639 So how are you what's what's the feeling was inside 0:02:43.680 --> 0:02:46.040 your firm about how to deal with inflation and how 0:02:46.040 --> 0:02:50.320 to kind of adjust that when you think about investment opportunities. Absolutely, Look, 0:02:50.360 --> 0:02:53.880 you know, KKR, we've been doing this for six years 0:02:53.919 --> 0:02:57.520 and history is the greatest teacher and informant of the future. 0:02:57.600 --> 0:03:00.600 And I think right now with multi gender Asians kind 0:03:00.600 --> 0:03:03.919 of living through maybe their first bout of real volatility, 0:03:04.160 --> 0:03:06.800 these are learning experiences where we're kind of playing together. 0:03:07.120 --> 0:03:09.720 The way we move and pivot across the firm as 0:03:09.720 --> 0:03:13.400 a global team, I'm really into use and so I 0:03:13.400 --> 0:03:15.800 would say, even though there might be a level of first, 0:03:15.919 --> 0:03:18.560 for some of the more junior folks across the team, 0:03:18.919 --> 0:03:22.239 they're actually they're actually an incredible opportunities for us to 0:03:22.280 --> 0:03:24.040 kind of figure out how we could be more agile 0:03:24.080 --> 0:03:27.040 and creative as we structure investment opportunities, as we think 0:03:27.040 --> 0:03:30.520 about capital solutions, if we lean into different sectors or 0:03:30.560 --> 0:03:33.919 segments of the public markets. And honestly, one of the 0:03:33.960 --> 0:03:35.800 things that I love about working here is that it's 0:03:36.160 --> 0:03:38.720 one team, and so we're kind of exchanging colors, like 0:03:38.760 --> 0:03:41.040 across the pond, figuring out how we can work better 0:03:41.120 --> 0:03:43.640 together and figure out how we navigate this market. And 0:03:43.720 --> 0:03:45.640 for those on the front lines and especially in the 0:03:45.640 --> 0:03:48.200 first few years of their career, that's super exciting. Do 0:03:48.240 --> 0:03:51.120 you go over to I'm sure that Barbarians at the 0:03:51.160 --> 0:03:54.920 Gate is required reading when you get hired there. Do 0:03:54.960 --> 0:03:56.680 you go to Henry Travis and ask him for his 0:03:56.800 --> 0:03:59.880 nineteen seventies playbook? Because so many people are concerned that 0:04:00.040 --> 0:04:04.240 we are looking at the possibility of a stagflation the 0:04:04.320 --> 0:04:08.040 likes of which we haven't seen since that decade. You know, 0:04:08.240 --> 0:04:11.320 we are so fortunate at this firm to still be 0:04:11.600 --> 0:04:14.320 led by Henry and George and Scott and Joe to 0:04:14.440 --> 0:04:17.159 really put into play all the lessons of history. And 0:04:17.279 --> 0:04:20.120 quite honestly, I will demystify that our Barians of the 0:04:20.120 --> 0:04:23.520 Gate is not required reading. But we certainly know very much, 0:04:23.960 --> 0:04:26.800 like you know, the things that the different decades have 0:04:26.960 --> 0:04:30.080 taught us across these markets. Markets are fundamentally different now 0:04:30.120 --> 0:04:33.000 if we think about where they worry even pre GFC, 0:04:33.440 --> 0:04:35.440 you're talking about, you know, so much of the credit 0:04:35.480 --> 0:04:39.200 market being equity linked, daily liquidity vehicles. You have different 0:04:39.240 --> 0:04:41.400 inputs where if you see a sell off and equities 0:04:41.560 --> 0:04:45.159 there could be permutation into credit. That was not the case, 0:04:45.240 --> 0:04:47.600 you know, before the crisis. You doesn't a lot of 0:04:47.600 --> 0:04:50.960 talk about the sixty portfolio, the decoupling of the stock 0:04:51.000 --> 0:04:53.160 market and credit. I think we're starting to see that 0:04:53.760 --> 0:04:55.960 there's a lot of new stuff here. And I would 0:04:55.960 --> 0:04:58.919 also argue that, like you know, after the pandemic, or 0:04:58.960 --> 0:05:01.400 since the onset of the pandemic, the rules of the 0:05:01.480 --> 0:05:03.960 game have kind of changed. And I think that's also 0:05:04.080 --> 0:05:05.800 what you're seeing a little bit as this, you know, 0:05:05.839 --> 0:05:08.600 this story on the wines of bent so Tell. I mean, 0:05:08.760 --> 0:05:12.640 KKR obviously is a global firm, global reach, global view. 0:05:13.240 --> 0:05:16.080 Do you have parts of the world where you're a 0:05:16.120 --> 0:05:18.400 little bit more focused on right now, whether it be 0:05:18.440 --> 0:05:21.640 emerging markets or the developed markets. How do you think 0:05:21.640 --> 0:05:24.320 about that, given you know, coming out of a two 0:05:24.400 --> 0:05:28.120 year pandemic. Yeah, absolutely, so, You're right. We do have 0:05:28.120 --> 0:05:30.400 our global lenses on all the time. You know, I 0:05:30.400 --> 0:05:32.880 would say we're being we're being really selective in Europe 0:05:32.880 --> 0:05:36.560 obviously given the unfortunate situation there um with the war. 0:05:36.800 --> 0:05:40.440 We also know that everything is intrinsically tiede um Asia 0:05:40.520 --> 0:05:43.640 is super interesting to us. On the credit side, We're 0:05:43.680 --> 0:05:47.200 still find a lot of interesting opportunities um in the US. 0:05:47.279 --> 0:05:50.440 But I would say we're in a walk run moment 0:05:50.680 --> 0:05:53.320 right now, and so we are being We're cautious, but 0:05:53.440 --> 0:05:56.919 we're walking, and we're finding compelling areas to invest, but 0:05:56.960 --> 0:06:00.120 we're not reaching and overly reaching for risk it. If 0:06:00.160 --> 0:06:01.520 I think what you're going to see is a little 0:06:01.560 --> 0:06:03.839 this will probably carry on for a little bit more. 0:06:04.279 --> 0:06:07.520 The market now understands what the Fed is doing. I 0:06:07.520 --> 0:06:10.279 think they already knew what was coming, but they're ingesting 0:06:10.320 --> 0:06:13.520 that reality. All right, tal great, great stuff. As always, 0:06:13.520 --> 0:06:17.320 tal reback director k K R and a proud graduate 0:06:17.360 --> 0:06:21.240 of Brandeis University, which again everybody I've come across on 0:06:21.320 --> 0:06:24.200 my thirty year Wall Street career from Brandeis have been 0:06:24.279 --> 0:06:26.640 really really sharp people, so that they do a good job. 0:06:30.520 --> 0:06:32.000 All right, I don't know what's going on. I'm looking 0:06:32.040 --> 0:06:36.680 at Twitter stocks down nine per cent. Elan's got presumably 0:06:36.720 --> 0:06:39.360 a bit up there for fifty four dollars and twenty cents. 0:06:40.400 --> 0:06:41.960 Do we have a bid? Do we not have a bid? 0:06:41.960 --> 0:06:43.760 I don't know. I'm gonna bringing a couple of experts here. 0:06:43.920 --> 0:06:45.360 They kind of do this stuff for Let me man 0:06:45.400 --> 0:06:48.440 Deep saying he's Bloomberg Intelligence senior tech analyst. And then 0:06:48.440 --> 0:06:50.400 I add on the left coast, I think we're gonna 0:06:50.400 --> 0:06:54.880 put the blame on him. Is Ed Ludlow, Bloomberg News correspondent. Um, Mandy, 0:06:54.880 --> 0:06:57.320 if you're here in a Bloomberg interactive broker studios, I'm 0:06:57.320 --> 0:07:00.440 gonna go to you first. Is Ellen just trying to 0:07:00.480 --> 0:07:03.880 negotiate a lower price here? Well, so look at what 0:07:04.040 --> 0:07:06.560 has happened in the market over the last two three weeks. 0:07:06.760 --> 0:07:12.520 Uh Internet companies, software companies multiples have compressed and appear 0:07:12.640 --> 0:07:17.120 like Snapchat is trading at about five six time sales. 0:07:17.640 --> 0:07:20.760 This deal was announced at seven time forward sales and 0:07:20.800 --> 0:07:23.920 if you use any metric evy two daily active user 0:07:24.800 --> 0:07:27.640 uh ask for the deal, it's around two hundred dollars. 0:07:27.640 --> 0:07:30.400 Snapchat is around you know, hundred and fifteen dollars. So 0:07:30.520 --> 0:07:34.560 you can see how the deal can be negotiated lower 0:07:34.640 --> 0:07:38.920 and clearly at that price for the users. And you 0:07:38.960 --> 0:07:41.320 know the growth that Twitter had. Twitter is in the 0:07:41.400 --> 0:07:46.320 highest growing asset in the social media space. Yeah, before 0:07:46.960 --> 0:07:50.160 the tweet came out this morning, it was like five thirty, right, 0:07:50.840 --> 0:07:53.880 And when we kicked off my show Bloomberg Surveillance Early 0:07:53.960 --> 0:07:57.000 Edition UM simulcast on both Bloomberg Radio and Bloomberg Television, 0:07:57.760 --> 0:07:59.840 I said, you guys, I don't want to talk about 0:08:00.040 --> 0:08:02.720 us anymore. I'm so sick of the Twitter story. And 0:08:02.840 --> 0:08:05.600 God love Elon Musk. You know, I'll give him all 0:08:05.640 --> 0:08:09.600 the credit that he is due. And it doesn't matter 0:08:09.640 --> 0:08:11.240 what credit I give him. He's still the richest man 0:08:11.240 --> 0:08:13.920 in the world. So good for him, But so annoying? 0:08:14.520 --> 0:08:17.160 Am I wrong? Ad? Is? This? Is he not annoying 0:08:17.200 --> 0:08:20.560 as all get out. Let's set a baseline, and the 0:08:20.600 --> 0:08:23.120 baseline is no one knows what's going on inside Elon 0:08:23.160 --> 0:08:25.720 Musk's head. Yeah, but that's what's that's what's so annoying? Like, 0:08:26.000 --> 0:08:29.280 I get it, it was interesting for a while. He's 0:08:29.320 --> 0:08:32.920 such a smarty and good for good for him, I'm 0:08:32.960 --> 0:08:37.000 a fan, but this is super lame for me. That 0:08:37.080 --> 0:08:39.520 the thing is that comes back to bots. Right. If 0:08:39.559 --> 0:08:42.920 you try and find things that he has been consistent about, 0:08:43.320 --> 0:08:45.319 one of them is that he doesn't like bots on 0:08:45.360 --> 0:08:48.160 the platform. He said multiple times I will remove bots 0:08:48.160 --> 0:08:50.360 from the platin good point this is. Then this leads 0:08:50.400 --> 0:08:51.920 me to the question. When I first saw the tweet, 0:08:51.960 --> 0:08:55.280 I thought, oh, he thinks what oh, no, it's less 0:08:55.320 --> 0:08:57.959 than five percent bots? Does that mean he no longer 0:08:58.040 --> 0:09:00.439 needs to buy Twitter because his whole asition in the 0:09:00.480 --> 0:09:02.080 first place was to get rid of the box. And 0:09:02.080 --> 0:09:04.720 if it's less than he's like, why bother, it's not 0:09:04.800 --> 0:09:06.560 even broken, so I'm not going to try and fix it. 0:09:06.720 --> 0:09:10.559 Or does this mean like his bitcoin investments have dropped, 0:09:10.679 --> 0:09:13.439 so he now doesn't have enough money to really buy Twitter, 0:09:13.760 --> 0:09:17.120 and so he's gonna say, um, oh, there's too many bots. 0:09:17.160 --> 0:09:19.360 I didn't know that before the transaction and try and 0:09:19.440 --> 0:09:21.800 use an excuse to cancel. Well, I think on the 0:09:21.800 --> 0:09:23.840 final I think he's in a strong financial position right. 0:09:23.840 --> 0:09:26.200 We reported Thursday night that he's trying to get even 0:09:26.240 --> 0:09:30.760 more equity financing and completely eliminate the margin loan opponent 0:09:30.800 --> 0:09:32.839 of the deal. But I actually have a question from 0:09:32.840 --> 0:09:36.800 Mandy focused on the box, which is Mandy, why does 0:09:36.880 --> 0:09:38.959 he need Twitter to be a private entity to pull 0:09:39.000 --> 0:09:41.360 all of this off? Anyway? Like Twitter, if you read 0:09:41.400 --> 0:09:44.360 the boiler plate at the regulatory filing, they clearly know 0:09:44.480 --> 0:09:46.800 about the bots, they know about the science about how 0:09:46.840 --> 0:09:49.840 they tracked the bots. Why does taking Twitter private make 0:09:49.880 --> 0:09:53.800 any difference to this whole scenario. Well, so Twitter has 0:09:53.960 --> 0:09:58.040 underperformed in terms of you know, just the product enhancements 0:09:58.080 --> 0:10:00.720 that that they have done over they and it's not 0:10:00.840 --> 0:10:05.880 just about bonds, in terms of harnessing that engagement monetization. 0:10:06.120 --> 0:10:10.400 So and their cost structure is bloated. So Twitter's revenue 0:10:10.440 --> 0:10:14.480 per employee is way lower than all their competitors. So 0:10:14.559 --> 0:10:17.960 there are multiple things that need to happen for Twitter 0:10:18.040 --> 0:10:21.240 to turn around. And you could argue once they go private, 0:10:21.280 --> 0:10:23.720 they don't need to raise more capital. So that's the 0:10:23.760 --> 0:10:27.760 thing about taking Twitter private is this is a self 0:10:27.800 --> 0:10:31.120 sufficient model. You don't need more capital after you take 0:10:31.160 --> 0:10:33.800 a private and look, you can cut costs and improve 0:10:33.840 --> 0:10:36.640 the margin structure. The problem in the deal was there 0:10:36.679 --> 0:10:39.760 was too much debt. So that's what he is I 0:10:39.800 --> 0:10:42.920 think solving for in terms of taking them, not taking 0:10:42.920 --> 0:10:47.320 that margin loan, and really getting more private investors to 0:10:47.400 --> 0:10:50.240 partner with him to pay that cash portion. Also, ed, 0:10:50.320 --> 0:10:55.000 isn't the idea um These bots make their user numbers 0:10:55.040 --> 0:10:59.680 look better, right, It makes interactions look stronger. If you 0:10:59.760 --> 0:11:02.800 take away the bots as a public company, it'll be 0:11:02.880 --> 0:11:07.079 super disappointing, like Netflix with no subscribers. So but if 0:11:07.080 --> 0:11:10.719 you're if you're private, nobody's looking and who cares. We'll 0:11:10.760 --> 0:11:13.800 hold on. Also, if it's only five percent of us, 0:11:13.880 --> 0:11:16.079 is that there is the box, So that then wouldn't 0:11:16.080 --> 0:11:17.680 the opposite be true? But I guess the thing that 0:11:17.720 --> 0:11:21.360 interests me most is that, you know, Twitter did put 0:11:21.360 --> 0:11:23.600 in the boiler plate that their number maybe a little 0:11:23.600 --> 0:11:27.000 bit off because they're constantly using algorithms to remove bots, 0:11:27.080 --> 0:11:29.760 but at the same time new accounts are being set up. 0:11:29.800 --> 0:11:32.040 There's an irony in all of this, right that the 0:11:32.080 --> 0:11:36.080 biggest complaint for many uses is crypto related bots. You 0:11:36.080 --> 0:11:39.520 know the crypto community on Twitter. But Elon Musk is 0:11:39.559 --> 0:11:42.880 one of the great victims of the Great bot attack, right, 0:11:43.040 --> 0:11:46.640 he might be a crypto bot. Well, for all we know, 0:11:47.320 --> 0:11:49.679 we could just be living in a simulation and Musk 0:11:50.000 --> 0:11:52.160 is a crypto. But by the way, look I'm looking 0:11:52.200 --> 0:11:55.040 at my my Twitter account, Um, Matt Miller and nineteen 0:11:55.120 --> 0:11:59.040 seventy three, I have seventeen point eight thousand followers. There 0:11:59.120 --> 0:12:02.439 is no way I have seventeen point eight thousand followers. 0:12:02.480 --> 0:12:06.280 I interact with like four people on Twitter. Um, you know, 0:12:06.520 --> 0:12:10.200 no one ever tweets me besides Ed and Creedy, And 0:12:11.120 --> 0:12:14.280 I don't believe that I have eighteen thousand followers. That's 0:12:14.280 --> 0:12:17.520 got to be fake. Well, I want man need to 0:12:17.600 --> 0:12:19.120 jump in this point if there's time. But what I 0:12:19.120 --> 0:12:21.040 would say is that there are thematic things. So when 0:12:21.080 --> 0:12:23.559 I tweet about Elon, Musk and Tesla, which I do regularly, 0:12:23.800 --> 0:12:27.439 there's a very engaged, active, real community, but there are 0:12:27.480 --> 0:12:30.280 also a very quick flood of bots that sees on 0:12:30.320 --> 0:12:33.240 this idea that Musk is one of the biggest users 0:12:33.240 --> 0:12:35.319 on the platform and one of the most followed, but 0:12:35.360 --> 0:12:38.640 he also engages and you know, the bots. And when 0:12:38.640 --> 0:12:42.040 we say bots, I mean bots in the sense of automation, 0:12:42.080 --> 0:12:44.360 but also the people behind those accounts, there must be 0:12:44.400 --> 0:12:47.400 some they sense an opportunity with Musk, and that's the 0:12:47.400 --> 0:12:49.280 ir N I'm talking about. I mean, the other thing 0:12:49.360 --> 0:12:50.880 could keep in mind is there are a lot of 0:12:50.960 --> 0:12:54.439 passive users. So what you're talking about, Matt is being 0:12:54.480 --> 0:12:58.080 a creator. Yes, there are fewer creators on the platform 0:12:58.120 --> 0:13:02.280 than there are users. And look, engagement time for Twitter 0:13:02.520 --> 0:13:07.439 has totatily gone up, so all their metrics look okay, 0:13:07.679 --> 0:13:11.040 and and the Twitter platform has a decent engagement when 0:13:11.080 --> 0:13:14.320 you think about it. But look, bots is a unique 0:13:14.320 --> 0:13:18.400 problem for Twitter because over the years they didn't do 0:13:18.440 --> 0:13:21.800 a good job of really taking improving their ads stack 0:13:21.920 --> 0:13:25.800 behind the scenes, and that is where all the monetization 0:13:25.880 --> 0:13:29.960 problems emanate from who's your Mandy, who's your favorite Twitter? 0:13:30.679 --> 0:13:34.760 Which Twitter adds the most value to your Twitter experience? Well, 0:13:34.880 --> 0:13:37.680 so I think Musk is right up there in terms 0:13:37.800 --> 0:13:42.800 of coming up with ideas, and look he is or 0:13:42.840 --> 0:13:47.280 the real Elon Musk account, the real Elon Musk and 0:13:47.280 --> 0:13:50.719 and look, I think there are plenty of people politicians 0:13:50.800 --> 0:13:53.679 that you can follow, and there there is value in 0:13:53.800 --> 0:13:56.400 terms of being a passive user. So the thing about 0:13:56.400 --> 0:13:59.400 Twitter is it has more of the white collar workers. 0:13:59.400 --> 0:14:02.360 So there are poo if you try to model it. 0:14:02.400 --> 0:14:05.040 The traditionally should be higher than some of the other 0:14:05.080 --> 0:14:08.160 social media platforms, but that's not the case because they 0:14:08.200 --> 0:14:10.760 have done a very poor job of showing ads to 0:14:10.840 --> 0:14:14.400 their users. Made seeing Bloomberg Intelligence. Thanks so much, Ed Ludlow, 0:14:14.400 --> 0:14:20.320 Bloomberg News bringing you all the latest. Ian single, CEO 0:14:20.360 --> 0:14:23.400 and co founder of zip Recruiter joins us here and 0:14:23.440 --> 0:14:25.680 it's time you discussions. We talk about the labor market. 0:14:25.720 --> 0:14:28.080 But and I know you guys your publicly traded company 0:14:28.200 --> 0:14:30.200 z i P on the New York Stock Exchange. You 0:14:30.240 --> 0:14:33.560 guys just reported some numbers recently, You're earnings. What were 0:14:33.560 --> 0:14:38.440 the highlights? First off, thanks for having me guys. Yeah, 0:14:38.520 --> 0:14:42.640 we have another exceptional quarter our business crew eighty one 0:14:42.720 --> 0:14:45.000 per cent. We beat on both top line and on 0:14:45.080 --> 0:14:47.760 bottom line, as well as raised guidance for the full year. 0:14:49.160 --> 0:14:52.720 Talk to us about us about the labor market. The 0:14:52.760 --> 0:14:55.040 one question I have for labor and I'm not sure 0:14:55.040 --> 0:14:57.600 I've heard a really good answer, but the four to 0:14:57.680 --> 0:15:01.480 five million people that left the labor force, who are they? 0:15:01.520 --> 0:15:06.040 Where did they go? And are they coming back? Yeah? 0:15:06.120 --> 0:15:09.480 Well that if you look, there's really there's two trends 0:15:09.520 --> 0:15:11.440 going on in the labor market right now that are 0:15:11.480 --> 0:15:15.040 really interesting. So number one, you have a robust demand 0:15:15.080 --> 0:15:17.800 from employers. There's eleven million open jobs in the country, 0:15:17.840 --> 0:15:20.000 and you could compare that to the pre COVID period 0:15:20.200 --> 0:15:22.800 where we thought we had a white hot hiring market 0:15:22.800 --> 0:15:26.040 and there were seven million open jobs. So obviously a 0:15:26.080 --> 0:15:28.640 lot of employers have had to staff back up in 0:15:28.720 --> 0:15:31.880 a post COVID reopening of the economy. And then the 0:15:31.920 --> 0:15:35.760 other factor that's really hurting employers right now is for 0:15:35.800 --> 0:15:40.640 the last nine months, you've had four million people quitting 0:15:40.680 --> 0:15:43.480 their job every month, and in a normal healthy economy 0:15:43.480 --> 0:15:45.600 that was more like two and a half million. So 0:15:46.200 --> 0:15:50.440 substantial demand for new openings from employers as well as 0:15:50.560 --> 0:15:53.360 real struggle to retain the people they have. And that's 0:15:53.400 --> 0:15:56.880 just creating sort of a hiring tsunami where there's rampant 0:15:56.960 --> 0:16:00.400 demand for talent and a shortage of it. And what 0:16:00.480 --> 0:16:03.320 you're seeing is a lot of job speakers in the 0:16:03.360 --> 0:16:06.760 post COVID world are looking for a different type of 0:16:06.800 --> 0:16:09.440 work and that is what is driving a lot of 0:16:09.480 --> 0:16:12.680 the shortage of labor that we're seeing today. I'll tell 0:16:12.680 --> 0:16:14.440 you what I feel a little bit of a rivalry 0:16:14.480 --> 0:16:17.720 with Ian And it's kind of like you know, when 0:16:18.040 --> 0:16:21.280 um there's a sports rivalry, only one school cares about 0:16:21.280 --> 0:16:23.560 it and the other one, and the other one really doesn't. 0:16:23.640 --> 0:16:25.960 Because I went to Antioch and he went to Oberlin. 0:16:26.040 --> 0:16:28.480 We always consider ourselves the champions of kind of the 0:16:28.480 --> 0:16:31.200 progressive movement, right right, But Oberlin was too smart to 0:16:31.200 --> 0:16:37.080 really care about us. Do you think Ian Uh, our 0:16:37.080 --> 0:16:39.960 founder at Antioch horse man to be ashamed to die 0:16:40.040 --> 0:16:43.360 until you've won some great victory for mankind? Do you 0:16:43.400 --> 0:16:45.360 think you're in a good position to do that right now? 0:16:45.360 --> 0:16:49.680 It zip recruiter because the pandemic has really changed the 0:16:49.760 --> 0:16:54.440 way labor struggles against capital in a in a positive 0:16:54.520 --> 0:16:58.240 way for the former and um, you know, opened up 0:16:58.280 --> 0:17:04.000 doors for diversity and really made UM employment a place 0:17:04.080 --> 0:17:08.280 where you can do good. Yeah, and I think you know, 0:17:08.480 --> 0:17:13.439 the biggest thing that changed in a post COVID world 0:17:13.640 --> 0:17:17.000 was this desire for remote work. There's an economist over 0:17:17.040 --> 0:17:20.320 at Stanford named Nick Bloom who has accelerated the transitions 0:17:20.640 --> 0:17:24.440 to remote work by fifty years. And if you look 0:17:24.480 --> 0:17:28.399 at it too, what we have right now is a 0:17:28.640 --> 0:17:32.840 job seeker or currently employed population that has become aware 0:17:32.920 --> 0:17:36.520 of their leverage and they are they are utilizing that 0:17:36.600 --> 0:17:40.199 leverage to get significantly higher pay in a number of 0:17:40.200 --> 0:17:43.000 different ways. The wage story, the wage growth, doesn't tell 0:17:43.000 --> 0:17:47.040 the whole story because of new jobs are being offered, 0:17:47.080 --> 0:17:49.800 signing bonuses in order to induce people to change jobs. 0:17:50.200 --> 0:17:54.880 And then on top of that, um employers are discovering 0:17:55.520 --> 0:17:57.800 that they are the ones who have to go first. 0:17:57.920 --> 0:18:00.960 Thirty seven percent of people hired in the last six 0:18:01.000 --> 0:18:04.600 months we're recruited to those positions. That's compared to nineteen 0:18:04.760 --> 0:18:07.919 per cent in the pre COVID period. So there's just 0:18:07.960 --> 0:18:09.960 been a huge flip in the job market and a 0:18:10.080 --> 0:18:13.960 dip recruiter. You know, through both design and through good fortune. 0:18:14.400 --> 0:18:18.960 Our primary feature is software that enables employers to go 0:18:19.040 --> 0:18:22.159 first and reach out and recruit job seekers. We were 0:18:22.200 --> 0:18:24.880 able to create more than seven million great natches last 0:18:24.920 --> 0:18:28.399 quarter using algorithmic techniques to give those employers the right 0:18:28.440 --> 0:18:31.439 list of job seekers to recruit, and that has been 0:18:31.480 --> 0:18:34.520 a big part of our success. We were effectively where 0:18:34.560 --> 0:18:39.479 the puck went when this post COVID reality happened. Good stuff, 0:18:39.640 --> 0:18:42.000 all right, Ian Segel, thanks so much for joining us. 0:18:42.040 --> 0:18:45.240 Ian Siegel he's a c and co founder ZIP recruiter. 0:18:49.840 --> 0:18:51.640 You know mean, I'm not My kids are all grown, 0:18:51.640 --> 0:18:54.800 so I'm not in the baby formula market. But this 0:18:54.840 --> 0:18:57.000 story has really got my attention because I know it's 0:18:57.000 --> 0:19:00.320 impacting so many families across the country. Uh, this baby 0:19:00.320 --> 0:19:02.160 formula shortage, and we want to get somebody who can 0:19:02.200 --> 0:19:04.080 really shed a light on it for us. We have 0:19:04.160 --> 0:19:08.880 Laura Modi, CEO and co founder of A Bobby Um. Laura, 0:19:09.480 --> 0:19:11.680 I love for you just to explain how we got 0:19:11.720 --> 0:19:14.000 to where we are here in the United States with 0:19:14.119 --> 0:19:18.720 baby formula. Yeah, and lovely shout with you. I wish 0:19:18.720 --> 0:19:22.120 it was hunder better better terms though is it is 0:19:22.160 --> 0:19:25.920 a very very scary situation. What's happening. I will say 0:19:25.960 --> 0:19:29.520 like even as a mom, I can emphasize greatly. But yeah, 0:19:29.520 --> 0:19:32.160 as as the CEO of in for formula company, it's complex, 0:19:32.400 --> 0:19:36.320 as the industry is complex in itself. To make infunt formula, 0:19:36.359 --> 0:19:39.800 it requires an immense amount of safety, so breaking into 0:19:39.840 --> 0:19:44.320 it isn't easy. But we are here because when very 0:19:44.359 --> 0:19:46.920 few players own the market, and when one of those 0:19:46.920 --> 0:19:50.200 players has a recall, it's going to leave a gap 0:19:50.520 --> 0:19:52.560 in the market. And that's exactly what we're trying to fill. 0:19:53.000 --> 0:19:56.959 So what can be done? Laura? You know, UM, as 0:19:57.040 --> 0:20:01.359 a father, I understand the fear as well. Um, I 0:20:01.440 --> 0:20:05.280 have an eighteen month year old baby. Eight month year old. 0:20:05.320 --> 0:20:08.159 That's not eighteen month old one and a half year 0:20:08.160 --> 0:20:13.000 old baby. She's she's perfect, eighteen going on eighteen exactly. 0:20:13.280 --> 0:20:17.280 But um, you know, we had an issue. Breastfeeding was 0:20:17.280 --> 0:20:19.719 a real problem, and there was a point where we 0:20:19.760 --> 0:20:21.879 had to term to formula. And for a lot of people, 0:20:21.960 --> 0:20:25.720 this is a reality that I don't think, Um, I 0:20:25.760 --> 0:20:29.479 don't think the man in our society are aware of. 0:20:30.720 --> 0:20:33.840 That means that baby formula is the only choice for 0:20:33.880 --> 0:20:39.479 so many developing um infants. What what would you do 0:20:39.720 --> 0:20:43.879 if you couldn't get hold of baby formula? Yeah, I takin. 0:20:43.960 --> 0:20:46.679 That's a point that's getting missed in this shortage. A 0:20:46.680 --> 0:20:49.680 lot of people are reading it like it's the toilet 0:20:49.720 --> 0:20:54.679 paper situation, and it's not. Sevent babies use some type 0:20:54.720 --> 0:20:56.680 of formula by the time they are six months old, 0:20:57.080 --> 0:21:00.679 and it is the only alternative to breaston It's not 0:21:00.760 --> 0:21:03.600 like you can turn to anything else. And what happens 0:21:03.680 --> 0:21:05.480 during the moment where you can find food for your 0:21:05.480 --> 0:21:09.520 baby is you see behaviors that are honestly unacceptable, like 0:21:10.000 --> 0:21:15.320 making homemade formula in your kitchen, rationing formula, theft, all 0:21:15.359 --> 0:21:18.400 of these things that are frankly dangerous and only increased 0:21:18.400 --> 0:21:21.399 safety issues. This is a crisis and we have to 0:21:21.480 --> 0:21:24.800 solve for it before we see these behaviors get worse. Mark, 0:21:24.800 --> 0:21:28.119 can you just again, just to shed some light on 0:21:28.160 --> 0:21:31.080 the story again, how did we get here? Why? Why? 0:21:31.240 --> 0:21:33.760 What baby formula manufacturer? Just give us a sense of 0:21:33.840 --> 0:21:36.000 the structure of the baby formula market. Where do we 0:21:36.040 --> 0:21:38.840 get it and who produces it and who had a 0:21:38.880 --> 0:21:43.080 problem and you know, kind of how do we get here? Yeah, 0:21:43.240 --> 0:21:47.920 well we go here because you know, the infant formula industry, 0:21:47.960 --> 0:21:51.240