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Speaker 1: Welcome to the Bloomberg Penl Podcast. I'm Paul Swinge. You,

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Speaker 1: along with my co host Lisa Brahma wits each day

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Speaker 1: we bring you the most noteworthy and useful interviews for

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Speaker 1: you and your money. Whether at the grocery store or

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Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple

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Speaker 1: Podcast or wherever you listen to podcasts, as well as

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Speaker 1: at Bloomberg dot com. Well, we are ten plus years

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Speaker 1: into this economic cycle. We've got a fed on the sideline,

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Speaker 1: We've had great returns in te What do we do

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Speaker 1: in Well, there's nobody better to chat about that on

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Speaker 1: the fixed income side than Tad Rivel Tadi's chief investment

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Speaker 1: officer for fixed income for tc W, a little firm

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Speaker 1: out on the West Coast, hundred seventy billion under management.

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Speaker 1: He joins us here in our Bloomberg Interactive Broker Studio. So, Tad,

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Speaker 1: I know you wrote recently about a liquidity crisis. What

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Speaker 1: do you mean by Whenever I see the word crisis,

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Speaker 1: it grabs my attention. Having lived through the financial crisis

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Speaker 1: of two thousand eight, what do you mean by liquidity crisis?

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Speaker 1: Maybe we should parse that a little bit. I think

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Speaker 1: the The point that's trying to be made is that

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Speaker 1: all economic cycles, all asset price cycles, ultimately in in

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Speaker 1: some type of of a crisis. Doesn't necessarily have to

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Speaker 1: be of the scale as we saw in two thousand

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Speaker 1: and eight. But let me give you a quick example

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Speaker 1: about why it's almost inevitable. It's part of the human DNA,

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Speaker 1: if you will. So most everyone has probably or perhaps

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Speaker 1: had the experience of looking at a house to buy,

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Speaker 1: perhaps in a hot market. So what what's that? What's

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Speaker 1: that world? Like the moment that the house gets listed,

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Speaker 1: you show up on the door, and so do twenty

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Speaker 1: other people. And maybe you're thinking, I putting my whole

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Speaker 1: life savings into this home, and I need to do

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Speaker 1: my due diligence and ask a lot of questions. I

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Speaker 1: want to ask about the roof, the foundation, maybe the

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Speaker 1: crazy neighbors who live next door. And the seller if

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Speaker 1: you are able to button home and is going to

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Speaker 1: look at you like you've got two heads. He's gonna

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Speaker 1: look at you and he's gonna say, hey, I got

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Speaker 1: twenty people here. I only want to hear from you

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Speaker 1: how much over offer offer side price you want to

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Speaker 1: pay all cash? Otherwise, don't waste my time. The point

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Speaker 1: is is that in a bull market, in a booming market,

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Speaker 1: you don't get to do your due diligence. You don't

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Speaker 1: get to ask questions. Okay, fast forward a couple of

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Speaker 1: years now, maybe the market is stone cold. Maybe you

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Speaker 1: bought the house, so you wait a couple of weeks

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Speaker 1: after listing, and one barely qualified buyer walks in the door,

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Speaker 1: and he wants to do his due diligence, and he's

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Speaker 1: not going to accept uh non answers to questions about

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Speaker 1: the roof and the foundation, And every time you can

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Speaker 1: answer a question, he's going to make a worst case

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Speaker 1: assumption about it. And so consequently, ultimately, when that buyer,

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Speaker 1: recognizing that he's got market power, wants to potentially place

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Speaker 1: an offer on your property, there's gonna be a huge

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Speaker 1: disagreement between you the seller who says, hey, I paid

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Speaker 1: acts the markets down maybe five but what you're talking

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Speaker 1: about is paying me down. So I'll call that. I'll

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Speaker 1: call that a liquidity crisis. Does that happen in the

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Speaker 1: credit markets? Think about the drive by deals that were prevalent,

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Speaker 1: if not ubiquitous, in two thousand and seventeen, and think

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Speaker 1: ahead of the possibility that in a cooler or cold

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Speaker 1: credit market, we probably will face some type of a

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Speaker 1: liquidity crisis where the buyers say, I got in a part,

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Speaker 1: I'll sell you down a few points, but I'm not

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Speaker 1: gonna pay sixty I'm not gonna allow you to take

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Speaker 1: these this credit off my hands at sixty five cents

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Speaker 1: on the dollar. And by the way, you've already seen

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Speaker 1: a lot of single name idiosyncratic volatility. So I think

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Speaker 1: that if this view, if this sounds a little theoretical,

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Speaker 1: just take a look at some of the market action

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Speaker 1: and high yield in the loan space over the last

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Speaker 1: year might disabuse you of that idea. That's what I

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Speaker 1: wanted to go. Have you seen any meaningful evidence that

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Speaker 1: maybe we are in or approaching liquidity crisis and any

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Speaker 1: major of the fixed income markets that TCW plays in, Well,

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Speaker 1: I think we are actually and UH, there's there's UH.

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Speaker 1: As I mentioned, there's certainly been a significant amount of

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Speaker 1: single name volatility in UH in the loan space. We

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Speaker 1: could take or make a few statements about the high

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Speaker 1: yield market, because I think that's very instructive. What you're

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Speaker 1: seeing in the high yield market is very strange or

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Speaker 1: um how do I say it? If you look at

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Speaker 1: the performance of the triple C bond class, the triple

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Speaker 1: C bonds are up on a total return basis here

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Speaker 1: today it's something like four to The high yield market

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Speaker 1: overall on average is up double digits. The equity market,

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Speaker 1: as you pointed out, is I don't know north on

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Speaker 1: a year today basis. Who would have expected the triple

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Speaker 1: C asset class to have so badly underperformed in what

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Speaker 1: would otherwise appear to be such a positive risk here.

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Speaker 1: I think what it speaks to is that the market

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Speaker 1: is discriminating between risk, and once it starts discriminating between risk,

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Speaker 1: you are perhaps well on your way towards stepping into

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Speaker 1: an environment that will be um well, a liquidity crisis

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Speaker 1: of some kind. Are you give us a sense of

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Speaker 1: the credit quality that you're seeing out there and maybe

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Speaker 1: some of the more leverage loan space or the high

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Speaker 1: yield space where we probably would see some concerns. First

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Speaker 1: the overall level of credit quality, it's it's poor, and

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Speaker 1: there's many different ways that you can sort of view

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Speaker 1: that or understand that. So maybe the simplest way is

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Speaker 1: just to recognize that in the high yield space. Naturally,

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Speaker 1: the lending traditionally is done with with covenants. Right that

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Speaker 1: you when you lend money to a levered enterprise, you

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Speaker 1: attempt to tie the hands of management so that it

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Speaker 1: can't take the money that you lent them and do

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Speaker 1: things that you don't want them to do as a

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Speaker 1: as a as a bond holder, your relationship with a

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Speaker 1: company as a bond holder is contractual. And if you

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Speaker 1: don't specify in the contract that you management can't take

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Speaker 1: the money I gave you, buy backstock, pay yourself, dividends,

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Speaker 1: uh sell my collateral, sell which is to say, a

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Speaker 1: division of the business, and and pay yourself, well, then

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Speaker 1: you don't really have the ability to restrict them. So,

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Speaker 1: according to Moodis, covenant quality is as bad as it

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Speaker 1: has been in a very long period of time. If

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Speaker 1: you look at the amount of of leverage that's gone

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Speaker 1: into it into that marketplace, measured by debt to two

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Speaker 1: earnings ratios, it's quite high. And then if you look

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Speaker 1: at things that are not so easily measured, but more disturbing,

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Speaker 1: it's things like the ad backs that we're saying, the

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Speaker 1: EPIDA add backs, tad ravelle, thank you so much for

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Speaker 1: joining us with some interesting comments on the credit side.

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Speaker 1: Chief Investment Officer or Fixed Income for TCW, joining us

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Speaker 1: here in our Bloomberg and Director Brooker studio, giving us

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Speaker 1: some thoughts about, uh, perhaps a liquidity crisis building in

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Speaker 1: certain parts of the fixed income market. You're listening to

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Speaker 1: Bloomberg Markets with Lisa Abrama Eds and Paul Sweeney on

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Speaker 1: Bloomberg Radio. Oh, we got some management changes coming to

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Speaker 1: Alphabet or Google or Google or Alphabet however you want

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Speaker 1: to play, joining us to break it down as Laura Martin,

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Speaker 1: senior analysts for Needham and Company, joining us on the

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Speaker 1: phone from Los Angeles. We also Mark Bergen, technology reporter

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Speaker 1: for Bloomberg News. He's in our Bloomberg nine sixties studio

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Speaker 1: in San Francisco. Mark, let's start with you just lay

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Speaker 1: out for us what actually is happening at Alphabet slash

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Speaker 1: Google today. Sure, so officially Google student Chai who's been

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Speaker 1: running Google for the past four years to see is

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Speaker 1: now stepping up to be also the CEO of Alphabet,

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Speaker 1: which was a role that Larry Page, who was one

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Speaker 1: of the co founder had served. So Larry and Sir Gaybrin,

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Speaker 1: the co founders are both stepping back to the company,

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Speaker 1: but important to notice they are notes, they are still

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Speaker 1: on the board and um they also are still the

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Speaker 1: majority controlling shareholders of the special supervoting Class B stocks.

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Speaker 1: In a way, they still control the company. They're just

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Speaker 1: they're no longer involved and responsible. Hey, Lauren, why do

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Speaker 1: you why do you think they did this in the

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Speaker 1: first place? I create the alphabet structure. Why were they

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Speaker 1: doing it in the first place? Because I think Wall

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Speaker 1: Street was really frustrated at the lack of profitability, because

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Speaker 1: we think the search engine makes margins and other bets.

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Speaker 1: Was a way to break out really huge lossmakers with

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Speaker 1: almost zero revenue. So I think that was helpful and

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Speaker 1: it added a little bit of granularity about where these

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Speaker 1: enormous losses were coming from and what assets they were

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Speaker 1: attributable to. So are the stocks up two percent today?

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Speaker 1: It's up to any six percent year to date. It

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Speaker 1: seems like the market doesn't really care whether you've got

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Speaker 1: Larry as the Sea of Alphabet and whether you have

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Speaker 1: an alphabet or whether Sundars doing everything. Is it just

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Speaker 1: all about the search business? Um? I mean I think

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Speaker 1: it should be. I think a Google we agree with

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Speaker 1: the government that Google should be broken up and the

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Speaker 1: first thing they should do is spin off you two,

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Speaker 1: because we think YouTube alone would be worth uts, which

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Speaker 1: would leave about five billion behind and we get more

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Speaker 1: granularity and different forms of investors. We really do have

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Speaker 1: a streaming as we've seen from Disney hitting all time highs.

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Speaker 1: There really is a set of investors who want to

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Speaker 1: invest in the streaming world globally, and YouTube dominates that space.

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Speaker 1: So it would get a much higher multiple if it

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Speaker 1: wasn't part of the Google search conglomerate. Hey, Mark, you

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Speaker 1: are at within a story here Google's founders give up

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Speaker 1: on being the Warren buffet of tech. What do you

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Speaker 1: mean by that? So when they announced alphabet four years ago,

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Speaker 1: they talked about how they went to that warned Bufett

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Speaker 1: and they had this sort of Berkshire Hathaway model, right,

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Speaker 1: This was um at you at this point, and they

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Speaker 1: were working on Hounas cars for years. They had two

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Speaker 1: different the two door companies working on biosecond healthcare, including

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Speaker 1: one working on something uh ambitious is a life extension

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Speaker 1: UM And they sort of wanted to build this model

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Speaker 1: where um, you know, Google, the Internet business could be

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Speaker 1: sort of isolated and not have to deal with these

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Speaker 1: on a managerial level, but also sort of show Wall

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Speaker 1: Street you know how much they're spending on what they

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Speaker 1: called the other other bets UM and that models. We

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Speaker 1: understood it, and as the company talked about for a

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Speaker 1: long time was you're gonna have independent CEOs reporting up

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Speaker 1: to this this company that then like allocates capital depending

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Speaker 1: on sort of the prospects of the business. UM that's

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Speaker 1: changed where you now have the CEO of the company

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Speaker 1: responsible for any nine of the revenues and and most

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Speaker 1: of the employee base Google UM now running all the

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Speaker 1: Alphabet Laura, what I love about your career and you've

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Speaker 1: had a long career covering media in these tech stocks,

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Speaker 1: and you make some great bold calls, innovative calls, and

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Speaker 1: you know, thinking about bending out YouTube would certainly be

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Speaker 1: a bold move for Alphabet. What do you think the

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Speaker 1: company and management and is thinking about any kind of

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Speaker 1: spin out of some of their assets. I think founders

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Speaker 1: tend to love the assets they build or buy. In

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Speaker 1: the case of YouTube, they bought it and it was

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Speaker 1: a brilliant acquisition. I think professional managers, which is what

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Speaker 1: we have at Google as of today, are much more

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Speaker 1: willing to follow economics, and therefore I assume I believe

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Speaker 1: that Google will have be more likely to be willing

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Speaker 1: to spin off pieces under a non founder oversights, which

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Speaker 1: is what we have today. Lord, do you think the

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Speaker 1: founders Larry and Serrogei are How critical are they? Do

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Speaker 1: you think from investor's perspective to this company in the stock?

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Speaker 1: Not very much. Mostly they spend money. Mostly they spend

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Speaker 1: money on passion projects that we think should be part

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Speaker 1: of their billion dollar, multibillion dollar network. Mark, what do

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Speaker 1: you think, you know, when you when you take a

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Speaker 1: look at at Google, what do you think is the

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Speaker 1: next step for them? Is there anything transformational for them?

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Speaker 1: I think the big, big next step It's gonna be

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Speaker 1: interesting question is right so soon? Dar has put a

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Speaker 1: lot of emphasis on the cloud business, and that's where

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Speaker 1: they're spending a lot of their investment, their head count

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Speaker 1: money to build this this business to compete with Amazon

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Speaker 1: and Microsoft. Um that's been you know, about four years

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Speaker 1: now they're still in third place. I think, I'm not

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Speaker 1: sure how how long. That seems like a pretty long rope,

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Speaker 1: but at some point they have to sort of show

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Speaker 1: actually making significant progress and on this investment um and

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Speaker 1: they're going up against a couple of issues right there.

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Speaker 1: Some of the industries are moving into like the federal

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Speaker 1: contracts and military contracts, oil and gas industry has actually

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Speaker 1: prompted quite a bit of resistance from the rank and

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Speaker 1: file Google engineers, and so dealing with that internal tension

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Speaker 1: which has been impercolating for a couple of years now,

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Speaker 1: is also gonna be a major challenge for for soon

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Speaker 1: d Are and something that he's pretty much dealt with

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Speaker 1: on his own. Um not really. Founders have not been

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Speaker 1: involved at all. Mark Bergen, Technology reporter. Thank you so

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Speaker 1: much for joining us. Marcus covers all things tech for

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Speaker 1: Bloomberg News. Joining us from our Bloomberg nine sixties studio

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Speaker 1: in San Francisco. Laura Martin, senior analyst at Needham Company.

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Speaker 1: She has a buy on the stocks. She's been right

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Speaker 1: as she typically is. We appreciate you calling in, Laura

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Speaker 1: from Los Angeles where you're based. Google Stock again very

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Speaker 1: strong performer this year, up twenty percent. Making some management

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Speaker 1: changes there. Bloomberg Opinion informed perspectives and expert, data driven

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Speaker 1: commentary on breaking news. That's ten thirty three all in

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Speaker 1: Wall Street. Time to check in with Bloomberg Opinion. We're

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Speaker 1: turned by Ellen Walled, President, a Transversal consulting and a

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Speaker 1: Bloomberg Opinion contributor joining us now from Vienna at the

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Speaker 1: OPEC meeting. Uh. Ellen, thanks so much for joining us.

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Speaker 1: We appreciate you making the effort all the way from Vienna.

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Speaker 1: So you're at the OPEC meeting. Give us a sense

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Speaker 1: of what is going on there right now? Well, right now,

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Speaker 1: we're still waiting for me for all of the ministers

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Speaker 1: to arrive. Some of them I think are not even

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Speaker 1: spoos surviving early tomorrow morning. But there's a lot of

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Speaker 1: chatter about potentially putting together some sort of uh production cut.

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Speaker 1: We've definitely heard um Iraq talking about that. The thing

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Speaker 1: is that putting that together is going to be a

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Speaker 1: really hard uh sell. At this point tomorrow morning, we're

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Speaker 1: going to have the Joint Ministerial Monitoring Committee and then

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Speaker 1: finally in the afternoon the actual OPEC meeting itself, so

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Speaker 1: there is time to potentially put together some sort of

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Speaker 1: deeper production cut. I think the ministers are particularly concerned

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Speaker 1: about demand weakness in the first half of and the

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Speaker 1: fact that right now the cuts are extended through March,

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Speaker 1: but they want to at least get a roll over

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Speaker 1: through June. I think we might even see one through

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Speaker 1: the end of Interesting. I'm sure you're gonna be a

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Speaker 1: real strong performance here in Brent Crude up about three

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Speaker 1: point four today. Um. What is your sense, uh, Ellen,

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Speaker 1: about the cohesion of OPEC these days? How efficient are

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Speaker 1: they really kind of managing the market? Well, this is

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Speaker 1: this is a really difficult situation because, like we saw

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Speaker 1: a couple of days ago on Friday after thanks Giving,

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Speaker 1: crew just plummeted, and now today we're seeing it up. Um.

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Speaker 1: This really, I think is do much more to the

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Speaker 1: headlines coming out about the China trade negotiations much more

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Speaker 1: soon than any chatter from OPEC. I think that that

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Speaker 1: OPEC is really in this market, uh, and this atmosphere

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Speaker 1: where things are really being determined by the global economic

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Speaker 1: outlook and demand. It's not really so much about supply

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Speaker 1: and so OPEC may have had a very presciently timed

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Speaker 1: headline in terms of talking about putting together for their cuts,

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Speaker 1: but I do think most people realize that those cuts

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Speaker 1: are very unlikely to materialize, and the price action we're

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Speaker 1: seeing could be largely due to the talk in China exactly.

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Speaker 1: So what when we when I think about OPECUS, we

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Speaker 1: also have to talk about Russia. How is Russia performing

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Speaker 1: and acting in the marketplace right now, and what's kind

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Speaker 1: of the relationship between Russian and OPEC right now? Yeah,

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Speaker 1: Russia is essentially the dealmaker for OPEC at this point.

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Speaker 1: In fact, last year in December, OPEC itself could not

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Speaker 1: come to any sort of consensus even to just extend

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Speaker 1: what they already had in place until Russia showed up

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Speaker 1: the next day, sat down with the Saudis, sat down

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Speaker 1: with the Iranians, and only then did we get a

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Speaker 1: rollover in the status quo. So Russia really plays a

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Speaker 1: crucial role at this point, particularly since the previous Saudi

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Speaker 1: oil minister who put together this this current deal, i'll

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Speaker 1: fall it is no longer part of the Saudi government anymore.

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Speaker 1: We have this new Saudi oil minister who wall has

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Speaker 1: played a very large role in the Saudi delegation, has

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Speaker 1: never really sat at the head before, so people are

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Speaker 1: really looking to see what kind of force he's going

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Speaker 1: to bring to the negotiations. I think the big meeting

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Speaker 1: we're looking for at OPEC is going to be the

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Speaker 1: meeting between Russian oil Minister Novak and the new Saudi

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Speaker 1: oil minister, Prince Abdulzie's events, and let's switch gears just

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Speaker 1: a little bit of talk about the other big big

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Speaker 1: news in the energy world, and that is the Aramco

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Speaker 1: I p O. There's news reports out that Saudi UM

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Speaker 1: a RAMCA is considering pricing it's I p O at

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Speaker 1: the top end of the marketed range. What's the latest

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Speaker 1: from your perspective on this huge IPO and I'm not

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Speaker 1: surprised to hear that they want to price it at

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Speaker 1: the large end or at the higher end. We're supposed

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Speaker 1: to get word on pricing at the same time as

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Speaker 1: the OPEQUE meeting, which should be interesting those shares. We

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Speaker 1: don't know when shares are scheduled to start trading. What's

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Speaker 1: going on with this this I p O is is

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Speaker 1: we've seen pretty pretty strong demand within Saudi Rabbit, but

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Speaker 1: not as strong as it was billed as. And typically

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Speaker 1: a lot of I p O s are oversubscribed many

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Speaker 1: more times than what we've seen so are with the

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Speaker 1: A Ramco I p O UM. But there's an interesting

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Speaker 1: dynamic here between what's going to happen with OPEC and

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Speaker 1: this I p O. I think there's there's a general

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Speaker 1: assumption that you want to hire price for oil for

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Speaker 1: the RAMCO I p O. It's really not likely that

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Speaker 1: Saudi Arabia is able to push through or to galvanize

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Speaker 1: enough support to cut production enough to really increase the

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Speaker 1: price of oil right now, particularly since it's reacting so

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Speaker 1: much more to China trade than than anything in OPEX.

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Speaker 1: So I do think that what we have to understand

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Speaker 1: is from here on out, once a ramco is a

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Speaker 1: public company, Aramco will want to show revenue growth, and

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Speaker 1: the best way, at least in this oil market to

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Speaker 1: show revenue growth is to pump more. And so every

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Speaker 1: time OPEC comes up UH, there'll be an incentive for

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Speaker 1: Saudi Arabia to pump more oil as opposed to less,

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Speaker 1: and this could become an issue, particularly when Saudi Arabia

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Speaker 1: wants to sell more shares of a ramco, as it

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Speaker 1: has indicated it wants to. This could really shift the

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Speaker 1: OPEC dynamic in a very new way that we haven't

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Speaker 1: seen thus far. UH. Ellen's just really quickly twenty seconds.

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Speaker 1: How concerned are people there at OPEC that this deal

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Speaker 1: is only being done. It's not being done in the West.

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Speaker 1: There's no US or Western investors. Well. Uh, I think

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Speaker 1: a lot of people have kind of said, you know,

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Speaker 1: this is this is a Saudi thing. It's it's a

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Speaker 1: Saudi or it's a regional story. That's where this is

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Speaker 1: now a regional rather than an international story. Though I

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Speaker 1: do think it will continue to affect the market. Uh,

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Speaker 1: and we'll have major effects on the Saudi economy and

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Speaker 1: the regional economy going forward. Dr Ellen Wall, thank you

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Speaker 1: so much for joining us. Dr Walld is the president

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Speaker 1: of Transversal Consulting, also a nonresident Senior Fellow at the

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Speaker 1: Atlantic Council's Global Energy Center, and a Bloomberg Opinion columnist.

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Speaker 1: You can read more on this and other stories from

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Speaker 1: Bloomberg Opinion at Bloomberg dot com slash Opinion, and for

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Speaker 1: the folks on the terminal, you can type in O, P,

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Speaker 1: I N GO to get all of the great opinion

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Speaker 1: work coming out of Bloomberg Opinion. Again, looking at crude,

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Speaker 1: a very very strong day for crude here, up about

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Speaker 1: three and a half percent. Looking at Brent and w

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Speaker 1: t I and as Dr Wald mentioned, probably driven more

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Speaker 1: by positive tone of trade talks than about more so

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Speaker 1: than what's happening in Vienna at the OPEC meetings. But

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Speaker 1: we will follow up on those meetings. This is Bloomberg

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Speaker 1: Markets with Lisa Bromo, Eds and Paul Sweeney on Bloomberg Radio.

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Speaker 1: I've got an amazing story for you. I just heard

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Speaker 1: this amazing story over the last couple of minutes. Rob Lacasio, Founder,

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Speaker 1: chief executive officer of Live Person. It's a publicly traded company.

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Speaker 1: LP s n A is a symbol. He joins me

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Speaker 1: here in the Bloomberg Interactive Broker studio and they do

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Speaker 1: some type of communication AI powered conversational. I don't want

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Speaker 1: to do that right now, Rob, your company when public?

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Speaker 1: I was just looking on the Bloomberg terminal. April of

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Speaker 1: two thousand, Now, for those of you don't know, April

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Speaker 1: of two thousand was the absolute peak, maybe just past

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Speaker 1: the peak the dot com cycle. How did you guys

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Speaker 1: go public? And how did you survive two million in

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Speaker 1: revenues and twenty million in losses and we had a

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Speaker 1: three million dollar market cap, But um, we did those

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Speaker 1: deals in that's right. And there were companies went out

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Speaker 1: with no revenue, you know, but we got it. We

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Speaker 1: went out and we were the last Internet I p

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Speaker 1: O April seven to two thousand, went out at eight

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Speaker 1: dollars of share, and within twelve months we were seven

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Speaker 1: cents of share. So it was it got pretty hairy.

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Speaker 1: And the stock now is thirty seven dollars and seventy

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Speaker 1: five cents. You have a market cap today of two

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Speaker 1: point five billion dollars. Tell us what live person does?

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Speaker 1: What did you guys? What were you at your inception?

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Speaker 1: And what are you today? So yeah, so I invented

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Speaker 1: when you chat online for customer care. So we're on

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Speaker 1: a website yea in uh patented and then obviously took

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Speaker 1: a public But I've always had this vision obviously that

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Speaker 1: commerce is powered by conversations. It's not just a vending machine,

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Speaker 1: you know, you have to go and talk to somebody,

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Speaker 1: ask questions. So that's that's how we sort of built

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Speaker 1: the business. But about six years ago I made a

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Speaker 1: really big bet and we said, AI and bots and

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Speaker 1: automation will power these conversations so much like we see

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Speaker 1: with Alexa. So we decided to pivot the company, build

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Speaker 1: a whole new platform and launch it in the world

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Speaker 1: and allow every brand in the world to have that

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Speaker 1: sort of power of the Alexa, but have it for

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Speaker 1: your brand, and now you can run it on every

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Speaker 1: messaging front end. So through Apple business Chat or Facebook,

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Speaker 1: you can message a brand like Delta Airlines and you

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Speaker 1: can now ask a question instead of being put on hold.

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Speaker 1: So who else is in this space, because I mean

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Speaker 1: I would think that every tech company or there'll be

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Speaker 1: a lot of technology companies in there kind of playing

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Speaker 1: in the space. So there's a massive shift going on

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Speaker 1: from e commerce to what we call conversational commerce. And uh, Apple, Facebook,

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Speaker 1: Google and Amazon are all betting that the conversational users

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Speaker 1: or experience is future. And so for obviously Amazon, they've

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Speaker 1: got Alexa and so everyone's betting. And for the other companies,

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Speaker 1: they've gotten messaging front ends. So all the big technology

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Speaker 1: companies are in there, and we're in there with them,

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Speaker 1: except we built the platform for the brands to create

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Speaker 1: these very scalable, unique experiences through those front ends. So

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Speaker 1: you can go through Alexa to a Delta Airlines or

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Speaker 1: message through I message to Delta Airlines. But our platform

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Speaker 1: supports Delta Airlines. Because you have to build a body,

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Speaker 1: you have live human agents. All that has to be

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Speaker 1: on a on a very scalable platform, and that's what

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00:22:35,080 --> 00:22:37,360
Speaker 1: we built. Well, is your company and others putting these

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00:22:37,560 --> 00:22:41,639
Speaker 1: customer service agents out of business. No, contrary to what

435
00:22:42,680 --> 00:22:46,720
Speaker 1: people believe, the contact center agents are actually the ones

436
00:22:47,119 --> 00:22:49,720
Speaker 1: building the bots. They're the ones who know how to

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00:22:49,800 --> 00:22:53,320
Speaker 1: have conversations. They're they're taking calls, they're doing chats, they're

438
00:22:53,320 --> 00:22:56,119
Speaker 1: doing messages, and so we empower them now to actually

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00:22:56,200 --> 00:22:59,480
Speaker 1: be on our platform, create the conversations and deploy them.

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00:23:00,040 --> 00:23:02,560
Speaker 1: And like at Low's, which is one of our customers,

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00:23:02,920 --> 00:23:05,040
Speaker 1: they have a group of agents in the Dominican Republic

442
00:23:05,119 --> 00:23:08,639
Speaker 1: that are making these conversations, these automations, these ai s.

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00:23:09,160 --> 00:23:11,280
Speaker 1: They're putting them in the world, and they're the ones

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00:23:11,440 --> 00:23:13,879
Speaker 1: that are are doing it, not tech people. And in

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00:23:13,960 --> 00:23:16,520
Speaker 1: some cases they've doubled their salaries. So for now, if

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00:23:16,520 --> 00:23:18,280
Speaker 1: you think about the world and where it will be,

447
00:23:18,400 --> 00:23:20,840
Speaker 1: I'll be talking to my TV, I'm talking to my car,

448
00:23:21,320 --> 00:23:25,919
Speaker 1: I'm gonna be communicating through voice, through messaging, and there

449
00:23:26,000 --> 00:23:27,600
Speaker 1: needs to be a group of people who are designing

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00:23:27,640 --> 00:23:30,639
Speaker 1: those conversational user experiences. Those are the agents today. In

451
00:23:30,720 --> 00:23:34,120
Speaker 1: the future they may get replaced, but today they're they're

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00:23:34,119 --> 00:23:36,440
Speaker 1: the ones powering the conversations. So I see I was

453
00:23:36,720 --> 00:23:41,400
Speaker 1: reading something that in the future conversations will be with bots.

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00:23:42,040 --> 00:23:45,359
Speaker 1: How does give us an example of that? Because we

455
00:23:45,560 --> 00:23:47,920
Speaker 1: we see today we have twenty thou customers and some

456
00:23:48,040 --> 00:23:51,000
Speaker 1: of the largest telcos and banks and retailers in the world,

457
00:23:51,400 --> 00:23:53,960
Speaker 1: and we see the data set. We we power sixty

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00:23:54,040 --> 00:23:56,960
Speaker 1: million conversations a month on our platform, so we see

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00:23:57,040 --> 00:24:00,600
Speaker 1: most of those conversations are pretty redundant. For instance, at

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00:24:00,760 --> 00:24:05,639
Speaker 1: a bank, of calls that happened today, are these conversations

461
00:24:05,680 --> 00:24:08,600
Speaker 1: are related to paying your bill, like my pay my

462
00:24:09,160 --> 00:24:11,159
Speaker 1: my credit card bill, and I have questions? We know

463
00:24:11,320 --> 00:24:13,520
Speaker 1: a lot of that can be automated, and and the

464
00:24:13,600 --> 00:24:16,359
Speaker 1: consumers wanted automated. They don't want to pick up the phone,

465
00:24:16,600 --> 00:24:18,159
Speaker 1: they don't want to converse, They want to have it

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00:24:18,280 --> 00:24:21,080
Speaker 1: in a conversational format like I don't understand why this

467
00:24:21,240 --> 00:24:24,520
Speaker 1: charge is on my bill? Okay, a question? What what charge?

468
00:24:24,840 --> 00:24:26,600
Speaker 1: And that's the back and forth. But that will be

469
00:24:26,640 --> 00:24:29,440
Speaker 1: automated though a lot of those will be automated. Interesting, Wow,

470
00:24:29,600 --> 00:24:32,919
Speaker 1: I'm looking at your stock again today seven cents up

471
00:24:34,680 --> 00:24:37,600
Speaker 1: this year. What were you thinking when your stock with

472
00:24:37,760 --> 00:24:43,280
Speaker 1: seven cents to share? How did you survive? Uh, you

473
00:24:43,359 --> 00:24:47,159
Speaker 1: know survival. I've always sort of taken the uh the

474
00:24:47,240 --> 00:24:50,120
Speaker 1: quote from Winston Churchill, you know, never never, never quit.

475
00:24:50,520 --> 00:24:53,800
Speaker 1: And UM, I just think if you have a purpose

476
00:24:53,880 --> 00:24:55,879
Speaker 1: in building a company, you feel like you've got to

477
00:24:55,920 --> 00:24:59,160
Speaker 1: get through the tough times. And I've found is that, um,

478
00:24:59,520 --> 00:25:02,280
Speaker 1: most of tough times is a place for learning. So

479
00:25:02,560 --> 00:25:05,760
Speaker 1: a lot of entrepreneurs, uh, they quit. You think this

480
00:25:05,920 --> 00:25:08,400
Speaker 1: this terrible and we had we had to fire forty people,

481
00:25:08,440 --> 00:25:11,320
Speaker 1: have eight people in two thousand one to survive and

482
00:25:11,359 --> 00:25:14,840
Speaker 1: it was a terrible thing. And but going through these

483
00:25:14,880 --> 00:25:18,399
Speaker 1: experiences makes you tougher and you start working through how

484
00:25:18,480 --> 00:25:21,000
Speaker 1: to build a better company. So to me, it's like

485
00:25:21,320 --> 00:25:25,439
Speaker 1: I find it when you hit those rough parts instead

486
00:25:25,480 --> 00:25:27,879
Speaker 1: of getting down, it's a time to learn. And so

487
00:25:28,000 --> 00:25:31,320
Speaker 1: I think psychologically, which is half the game. I've just

488
00:25:31,640 --> 00:25:34,520
Speaker 1: stated it to to learn and build a great company.

489
00:25:34,560 --> 00:25:37,560
Speaker 1: And we're we're not there yet, you know. I I

490
00:25:37,720 --> 00:25:41,160
Speaker 1: think we've arrived at a place where conversational commerce will

491
00:25:41,200 --> 00:25:43,320
Speaker 1: take over most of what we see in e commerce.

492
00:25:43,800 --> 00:25:46,320
Speaker 1: So I feel like we're here to own that, to

493
00:25:46,480 --> 00:25:50,040
Speaker 1: to drive that, and sort of to change the way

494
00:25:50,080 --> 00:25:53,560
Speaker 1: technology is to I'm not so proud of our world,

495
00:25:53,720 --> 00:25:56,640
Speaker 1: of the technology leaders today, and I think we can

496
00:25:56,760 --> 00:26:01,680
Speaker 1: change the game. Just a fascinating story. Rob Blacastio, Founder,

497
00:26:01,760 --> 00:26:05,240
Speaker 1: chief executive officer of Live person with Again. This was

498
00:26:05,400 --> 00:26:08,639
Speaker 1: the as Rob mentioned, the last you know Internet I

499
00:26:08,800 --> 00:26:11,399
Speaker 1: p O to get off and get the I p

500
00:26:11,560 --> 00:26:13,840
Speaker 1: O done during the Internet boom. That was April of

501
00:26:13,960 --> 00:26:17,080
Speaker 1: two thousand. We're here nineteen years later. The company is

502
00:26:17,119 --> 00:26:19,879
Speaker 1: still here, you know, from seventh cents to share at

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00:26:19,920 --> 00:26:23,159
Speaker 1: thirty seven. Just extraordinary, Rob, Thanks so much. Thanks for

504
00:26:23,240 --> 00:26:25,439
Speaker 1: listening to the Bloomberg P and L podcast. You can

505
00:26:25,440 --> 00:26:28,240
Speaker 1: subscribe and listen to interviews at Apple Podcasts or whatever

506
00:26:28,320 --> 00:26:31,520
Speaker 1: podcast platform you prefer. Paul Sweeney, I'm on Twitter at

507
00:26:31,560 --> 00:26:33,960
Speaker 1: pt Sweeney. I'm Lisa abram Woy. It's I'm on Twitter

508
00:26:34,119 --> 00:26:36,719
Speaker 1: at Lisa abram Woyit's one before the podcast. You can

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00:26:36,760 --> 00:26:39,119
Speaker 1: always catch us worldwide. I'm Bloomberg Radio