1 00:00:02,279 --> 00:00:06,480 Speaker 1: From the heart of where innovation, money and power in 2 00:00:06,640 --> 00:00:11,680 Speaker 1: Silicon Valley and beyond. This is Bloomberg Technology with Emily Jay. 3 00:00:28,720 --> 00:00:32,440 Speaker 1: I am Taylor Riggs. I am here in Boston, Massachusetts, 4 00:00:32,440 --> 00:00:36,080 Speaker 1: big city right here for a special edition of Bloomberg Technology. 5 00:00:36,360 --> 00:00:40,120 Speaker 1: We are of course broadcasting from the Greater Boston Chamber 6 00:00:40,120 --> 00:00:43,240 Speaker 1: of Commerce here at the Boston Convention and the Exhibit Center. 7 00:00:43,520 --> 00:00:46,960 Speaker 1: A really wonderful event here. The annual meeting is underway 8 00:00:47,520 --> 00:00:51,320 Speaker 1: coming after the next hour. Federal Reserve Chairman Jerome Powell saying, 9 00:00:51,560 --> 00:00:54,600 Speaker 1: timing financial conditions, it is just what we need, and 10 00:00:54,600 --> 00:00:57,640 Speaker 1: they're resolved to curb the highest inflation in decades, including 11 00:00:57,680 --> 00:01:01,920 Speaker 1: moving more aggressively if need be. We have all the details. Plus, 12 00:01:01,960 --> 00:01:04,880 Speaker 1: of course, the COVID pandemic reaches diret milestones, a death 13 00:01:04,959 --> 00:01:07,959 Speaker 1: hole hitting one million people in the US. What did 14 00:01:07,959 --> 00:01:10,360 Speaker 1: we learn from the pandemic, What does the post pandemic 15 00:01:10,400 --> 00:01:14,280 Speaker 1: world look like? From biotech, education and beyond. We'll discuss 16 00:01:14,319 --> 00:01:16,280 Speaker 1: it all. And of course we're going to be taking 17 00:01:16,280 --> 00:01:18,319 Speaker 1: a look at the future of sports betting. We have 18 00:01:18,360 --> 00:01:20,880 Speaker 1: a great conversation coming up with the Draft King CEO 19 00:01:21,000 --> 00:01:24,440 Speaker 1: Jason Robbins about his next set and how they're managing 20 00:01:24,560 --> 00:01:27,240 Speaker 1: some of those inflation worries. So much more coming up 21 00:01:27,319 --> 00:01:30,520 Speaker 1: later at this hour. I'm so pleased that Natasha Lamb. 22 00:01:30,600 --> 00:01:32,800 Speaker 1: Of course, you know, here's the managing partner over at 23 00:01:32,880 --> 00:01:36,520 Speaker 1: our Junet Capital based just outside Boston here with me 24 00:01:36,720 --> 00:01:38,520 Speaker 1: on a set. It is so fun to see you 25 00:01:38,560 --> 00:01:41,080 Speaker 1: here in person. And what we're just showing on the 26 00:01:41,120 --> 00:01:43,280 Speaker 1: screen has been this big sort of tech sell off 27 00:01:43,280 --> 00:01:45,920 Speaker 1: and the huge volatility we've had in the markets. What 28 00:01:46,000 --> 00:01:48,120 Speaker 1: are you hearing about some of the jitters going on 29 00:01:48,200 --> 00:01:51,120 Speaker 1: within the tech markets right now? Yeah, we'll think your tailor, 30 00:01:51,160 --> 00:01:54,880 Speaker 1: it's really nice to be here, nice to be in person. Um, well, 31 00:01:54,920 --> 00:01:57,680 Speaker 1: I mean, I think the tech sector is facing two 32 00:01:57,880 --> 00:02:01,360 Speaker 1: big headwinds. One is just an up coming slow down 33 00:02:01,520 --> 00:02:05,160 Speaker 1: in economic growth along with inflation, and if you look 34 00:02:05,240 --> 00:02:08,799 Speaker 1: historically during those times, it's the tech sector that gets 35 00:02:08,880 --> 00:02:11,440 Speaker 1: hit the hardest. So that's a big piece. And the 36 00:02:11,480 --> 00:02:15,400 Speaker 1: other the other part is interest rates. So you know, 37 00:02:15,400 --> 00:02:18,080 Speaker 1: when you think about technology stocks, we think of them 38 00:02:18,160 --> 00:02:21,000 Speaker 1: as long duration stocks. Writing when you're valuing them, you're 39 00:02:21,040 --> 00:02:23,520 Speaker 1: going out years and years or cash flows. So an 40 00:02:23,560 --> 00:02:27,120 Speaker 1: interest rates go up, you discount those cash flows at 41 00:02:27,200 --> 00:02:29,919 Speaker 1: higher rates, which leads to lower valuation. I want to 42 00:02:30,000 --> 00:02:31,920 Speaker 1: talk about that a little bit because there's been a 43 00:02:31,919 --> 00:02:34,960 Speaker 1: big conversation in the market about valuations. Is it just 44 00:02:35,280 --> 00:02:39,480 Speaker 1: rethinking higher rates and the lower net present value or 45 00:02:39,520 --> 00:02:42,000 Speaker 1: is there something else going on that maybe growth at 46 00:02:42,040 --> 00:02:45,480 Speaker 1: any cost doesn't work, Maybe that isn't the model anymore. 47 00:02:45,680 --> 00:02:48,040 Speaker 1: What is the real issue? Well, I think that's right. 48 00:02:48,040 --> 00:02:50,160 Speaker 1: I think companies need a business model, and I'm a 49 00:02:50,200 --> 00:02:54,000 Speaker 1: big fan of profitability, so I think that that is right. 50 00:02:54,040 --> 00:02:55,800 Speaker 1: If you look and if you look at what's happened 51 00:02:55,840 --> 00:02:58,280 Speaker 1: to valuations this year. You know, at the beginning of 52 00:02:58,280 --> 00:03:01,320 Speaker 1: the year, the tech sector was trading near thirty times 53 00:03:01,680 --> 00:03:05,040 Speaker 1: versus a ten year average of about twenty times, which 54 00:03:05,160 --> 00:03:07,079 Speaker 1: I think we can all agree with a more reasonable 55 00:03:07,160 --> 00:03:10,200 Speaker 1: valuation UM. But when you do have you know, we've 56 00:03:10,200 --> 00:03:13,120 Speaker 1: had a lot of growth over the last three years UM, 57 00:03:13,200 --> 00:03:16,400 Speaker 1: so companies have been in a good position. Now companies 58 00:03:16,440 --> 00:03:19,839 Speaker 1: are trading a little under the five year average UM, 59 00:03:19,919 --> 00:03:22,680 Speaker 1: so there's already been a big correction. I think now 60 00:03:22,720 --> 00:03:27,360 Speaker 1: it's just about positioning yourself for quality, profitability, more stable 61 00:03:27,400 --> 00:03:29,960 Speaker 1: earnings growth in this environment. Talk to me about quality, 62 00:03:30,040 --> 00:03:32,400 Speaker 1: because I think what's interesting in sort of these broader 63 00:03:32,440 --> 00:03:35,360 Speaker 1: based um I even hesitant to use the word panic, 64 00:03:35,480 --> 00:03:38,080 Speaker 1: but we can use that. You get sort of a 65 00:03:38,160 --> 00:03:41,600 Speaker 1: mass sell off. And yet Apple pulls in ninety billion 66 00:03:41,600 --> 00:03:45,320 Speaker 1: dollars of FreeCast flow a year. Microsoft really stable companies 67 00:03:45,320 --> 00:03:48,080 Speaker 1: with strong balance sheets. So when you think about quality, 68 00:03:48,120 --> 00:03:51,440 Speaker 1: are you still thinking about big tech within that? Absolutely, 69 00:03:51,520 --> 00:03:54,440 Speaker 1: and it's really important to be able to discern which 70 00:03:54,480 --> 00:03:58,000 Speaker 1: companies have that growth at more stable growth, that higher 71 00:03:58,080 --> 00:04:01,480 Speaker 1: quality balance sheet return hern on equity. And if you 72 00:04:01,520 --> 00:04:03,640 Speaker 1: look even if you go back for years, because we 73 00:04:03,680 --> 00:04:07,360 Speaker 1: know the market has you know, risen dramatically despite the 74 00:04:07,360 --> 00:04:11,920 Speaker 1: most recent correction, those companies, you know, Apple, Microsoft, Google, 75 00:04:12,160 --> 00:04:16,120 Speaker 1: they've either doubled or tripled over that time. Right, They've 76 00:04:16,120 --> 00:04:19,160 Speaker 1: been good investments. They're going to continue to be good investments. 77 00:04:19,279 --> 00:04:22,680 Speaker 1: But if you then pivot to the social media companies Facebook, Twitter, 78 00:04:23,120 --> 00:04:25,479 Speaker 1: you know they've really gone nowhere in the last three year. Okay, 79 00:04:25,520 --> 00:04:27,960 Speaker 1: you brought up Twitter, I did it, So I'm going 80 00:04:28,000 --> 00:04:30,840 Speaker 1: to go there. I'm going to take the bait. How 81 00:04:30,880 --> 00:04:34,479 Speaker 1: do you think about Twitter and valuing and investing in 82 00:04:34,480 --> 00:04:39,080 Speaker 1: a company with some of them, maybe take private conversations 83 00:04:39,480 --> 00:04:43,279 Speaker 1: playing out in public. The volatility that that creates, and 84 00:04:43,320 --> 00:04:46,520 Speaker 1: a refocus on the business model. How what percent of 85 00:04:46,560 --> 00:04:48,800 Speaker 1: the users are boughts? How do you think about the 86 00:04:48,800 --> 00:04:51,720 Speaker 1: fundamentals of that company? Yeah, I mean I think Twitter 87 00:04:51,800 --> 00:04:55,039 Speaker 1: has had so many challenges over the years, which is 88 00:04:55,120 --> 00:04:59,040 Speaker 1: why you've seen you know, CEOs come and go move around, 89 00:04:59,200 --> 00:05:03,000 Speaker 1: why you're seeing is happening with Elon Musk right now? Um, 90 00:05:03,040 --> 00:05:05,360 Speaker 1: you know, unfortunately, right now, I feel like I feel 91 00:05:05,360 --> 00:05:08,120 Speaker 1: like Elon Musk is like a cat playing with a 92 00:05:08,200 --> 00:05:11,440 Speaker 1: bat of string and you know, all of these public 93 00:05:11,520 --> 00:05:17,680 Speaker 1: tweets and um, you know, it's really uh, it's just 94 00:05:17,760 --> 00:05:21,000 Speaker 1: so uncertain what's going to happen. Stocks already given back 95 00:05:21,080 --> 00:05:24,120 Speaker 1: all of the gains that it had when the you 96 00:05:24,160 --> 00:05:28,800 Speaker 1: know takeover was announced. Um, and you know, I it's 97 00:05:28,839 --> 00:05:33,760 Speaker 1: it's just feels a little um manipulative. Yeah, and that's 98 00:05:33,800 --> 00:05:35,760 Speaker 1: a strong word when we're thinking like that. But I 99 00:05:35,880 --> 00:05:38,200 Speaker 1: just like, you know, what what is happening with Twitter 100 00:05:38,360 --> 00:05:42,200 Speaker 1: right now? It's I think it's quite unfortunate for the company. Um, 101 00:05:42,240 --> 00:05:45,440 Speaker 1: whether or not Must buys it, right, I think we'd 102 00:05:45,440 --> 00:05:47,400 Speaker 1: be remiss if we didn't think about that. We're here 103 00:05:47,400 --> 00:05:49,719 Speaker 1: in person for the first time in two years. We're 104 00:05:49,720 --> 00:05:52,000 Speaker 1: coming out of a pandemic, and I think in the 105 00:05:52,000 --> 00:05:54,720 Speaker 1: middle of the pandemic we all thought long and hard 106 00:05:54,760 --> 00:05:57,760 Speaker 1: about E S G. And I'm doing a panel in 107 00:05:57,800 --> 00:05:59,800 Speaker 1: a few weeks about the S in the S G. 108 00:06:00,000 --> 00:06:03,000 Speaker 1: Because you can't just blend it together within E s G. 109 00:06:03,200 --> 00:06:05,440 Speaker 1: How do you paint that with a broad brush or 110 00:06:05,520 --> 00:06:07,960 Speaker 1: really focus on what is the E? What is the S? 111 00:06:08,080 --> 00:06:10,800 Speaker 1: What is the G? Yeah, I think it's really important 112 00:06:10,839 --> 00:06:12,920 Speaker 1: that you that you look at all of these issues 113 00:06:13,000 --> 00:06:15,480 Speaker 1: as their own issues. Um. You know, E S G 114 00:06:15,800 --> 00:06:19,960 Speaker 1: investing has gone from niche to mainstream. I mean, I've 115 00:06:19,960 --> 00:06:22,080 Speaker 1: been in this space that my whole career, and when 116 00:06:22,080 --> 00:06:25,000 Speaker 1: I started, it was completely niche. So it's really interesting 117 00:06:25,040 --> 00:06:28,839 Speaker 1: to see what's you know, what's happened in this space. Um, 118 00:06:28,880 --> 00:06:32,240 Speaker 1: But when it comes to you know, those different pieces, 119 00:06:32,520 --> 00:06:34,800 Speaker 1: you know, when you're talking about S some areas that 120 00:06:34,839 --> 00:06:38,560 Speaker 1: we've really engaged in on the social side are things 121 00:06:38,640 --> 00:06:43,520 Speaker 1: like racial and gender pay equity, UM or sexual harassment. 122 00:06:43,680 --> 00:06:46,440 Speaker 1: And we're seeing, you know, what's changed so dramatically is 123 00:06:46,480 --> 00:06:50,520 Speaker 1: we're seeing so much support now from institutional investors. So 124 00:06:50,680 --> 00:06:53,440 Speaker 1: for instance, you know, last November we had a shareholder 125 00:06:53,480 --> 00:06:57,359 Speaker 1: proposal go to a vote at Microsoft, which is a 126 00:06:57,400 --> 00:06:59,680 Speaker 1: long term investment of ours, and we looked at Microsoft 127 00:06:59,760 --> 00:07:01,960 Speaker 1: me said they really need to address this issue head on, 128 00:07:02,279 --> 00:07:05,920 Speaker 1: and it got a seventy eight percent vote of investors. Remarkable, 129 00:07:06,200 --> 00:07:09,200 Speaker 1: right Disney on pay equity of uh, you know, a 130 00:07:09,240 --> 00:07:13,040 Speaker 1: month or two ago. Right vote. So you're starting to 131 00:07:13,120 --> 00:07:17,600 Speaker 1: see mainstream investors, institutional investors really show up because they 132 00:07:17,680 --> 00:07:21,480 Speaker 1: understand these issues are materials, social issues, your human capital, 133 00:07:21,520 --> 00:07:24,360 Speaker 1: how you attract and retain and promote talent are really 134 00:07:24,400 --> 00:07:28,520 Speaker 1: important issues. I think the maybe if there is any 135 00:07:28,560 --> 00:07:31,400 Speaker 1: criticism of E S C, it's been in the beginning 136 00:07:31,440 --> 00:07:34,760 Speaker 1: when you think about the was investing in solar power 137 00:07:35,000 --> 00:07:39,680 Speaker 1: and windmills and the returns frankly weren't necessarily keeping up. 138 00:07:40,480 --> 00:07:43,240 Speaker 1: How do you make sure that, yes, we want to 139 00:07:43,280 --> 00:07:45,960 Speaker 1: invest in E S G, but the returns also have 140 00:07:46,160 --> 00:07:50,119 Speaker 1: to be there. Can you have both together? Absolutely? So 141 00:07:50,360 --> 00:07:52,560 Speaker 1: you know you can. You can look through an E. 142 00:07:52,800 --> 00:07:56,000 Speaker 1: S and G lens across all sectors and industries of 143 00:07:56,360 --> 00:07:59,600 Speaker 1: the economy and you can choose the companies that are, 144 00:07:59,680 --> 00:08:02,120 Speaker 1: you know, in that top poortile. And there's been studies 145 00:08:02,160 --> 00:08:05,720 Speaker 1: that have shown that the companies that manage their environmental, social, 146 00:08:05,720 --> 00:08:09,200 Speaker 1: and governance risks and opportunities better have actually had a 147 00:08:09,240 --> 00:08:13,560 Speaker 1: tailwind to performance and have outperformed. UM. So you know, yeah, 148 00:08:13,560 --> 00:08:15,280 Speaker 1: if you're going to just put in a clean tech 149 00:08:15,360 --> 00:08:18,440 Speaker 1: basket or you know, more things that are more volatile, 150 00:08:18,680 --> 00:08:21,800 Speaker 1: volatile and transformative, there can be ups and downs. We 151 00:08:21,880 --> 00:08:24,520 Speaker 1: know that in any market. But it's a lens that 152 00:08:24,560 --> 00:08:27,520 Speaker 1: you want to apply much more broadly, depending on what 153 00:08:27,640 --> 00:08:30,800 Speaker 1: asset class, what sector, um. And you know, we really 154 00:08:30,800 --> 00:08:33,280 Speaker 1: think about it through kind of three lenses. One, we 155 00:08:33,280 --> 00:08:35,360 Speaker 1: don't want to invest in things that are just fundamentally 156 00:08:35,400 --> 00:08:37,920 Speaker 1: bad for people in planet right, UM, So like we're 157 00:08:37,920 --> 00:08:41,760 Speaker 1: not invest in fossil fuels or private prisons or tobacco. UM. 158 00:08:41,800 --> 00:08:44,640 Speaker 1: We look to invest in solutions where we can things 159 00:08:44,679 --> 00:08:47,600 Speaker 1: like you're talking about renewable energy, but we're also going 160 00:08:47,679 --> 00:08:50,200 Speaker 1: to invest in companies like Google that are investing in 161 00:08:50,240 --> 00:08:54,400 Speaker 1: renewable energy in their operations that are more efficient, or 162 00:08:54,520 --> 00:08:57,200 Speaker 1: you know, are treating their employees well, companies like that. 163 00:08:57,679 --> 00:09:00,560 Speaker 1: And then we look to engage with companies too, you know, 164 00:09:01,080 --> 00:09:04,000 Speaker 1: so that they're managing those risk and opportunities better and 165 00:09:04,040 --> 00:09:06,120 Speaker 1: it just makes them better companies It's a win win, 166 00:09:06,640 --> 00:09:08,800 Speaker 1: So much fun to have you here to help kick 167 00:09:08,800 --> 00:09:11,880 Speaker 1: off kick off a big show. My pleasure that was 168 00:09:11,960 --> 00:09:15,160 Speaker 1: Natasha lamb our Junior Capital. Really appreciate your time and 169 00:09:15,200 --> 00:09:29,760 Speaker 1: your insights here than welcome back to this very big 170 00:09:29,800 --> 00:09:33,040 Speaker 1: special edition of Bloomberg Technology. We're live here from the 171 00:09:33,080 --> 00:09:36,160 Speaker 1: Boston Convention Center for the annual Chamber of Commerce meeting, 172 00:09:36,520 --> 00:09:39,720 Speaker 1: of course, for the Greater Boston Chamber of Commerce. I'm 173 00:09:39,800 --> 00:09:42,920 Speaker 1: so pleased to say that Jason Kelly is sitting right 174 00:09:42,920 --> 00:09:45,280 Speaker 1: next to me. He is the co founder and CEO 175 00:09:45,520 --> 00:09:49,079 Speaker 1: of BEINGO Bioworks, based right here in Boston, and we 176 00:09:49,080 --> 00:09:51,319 Speaker 1: were talking off camera. Everyone here is an m I 177 00:09:51,480 --> 00:09:54,040 Speaker 1: T or a Harvard grad. You, of course are in 178 00:09:54,240 --> 00:09:56,679 Speaker 1: m I T. One of the smart ones. Talked to 179 00:09:56,760 --> 00:09:59,520 Speaker 1: us about underground and PhD. My dad called it a 180 00:09:59,640 --> 00:10:03,240 Speaker 1: DA Texas. There you go. We'll talk to us about 181 00:10:03,240 --> 00:10:06,440 Speaker 1: your decade of excellence the company, and how you're thinking 182 00:10:06,480 --> 00:10:10,240 Speaker 1: about all of this big biotech innovation that's going on, 183 00:10:10,280 --> 00:10:12,800 Speaker 1: of which you are a part of. Yeah, I mean 184 00:10:12,840 --> 00:10:14,439 Speaker 1: so so. I think that's one of the great things 185 00:10:14,440 --> 00:10:17,280 Speaker 1: about the area, frankly, is you you have close proximity 186 00:10:17,320 --> 00:10:19,320 Speaker 1: to these schools. So the conners of the company there 187 00:10:19,360 --> 00:10:20,640 Speaker 1: was four M I T, P H D s and 188 00:10:20,760 --> 00:10:23,640 Speaker 1: M T professor and and the idea was, you know, 189 00:10:23,720 --> 00:10:27,040 Speaker 1: take the learnings from software, right, this idea that you 190 00:10:27,080 --> 00:10:29,600 Speaker 1: can program code and you put it in your phone 191 00:10:29,600 --> 00:10:31,240 Speaker 1: and put a new app and make it do something new. 192 00:10:31,760 --> 00:10:34,520 Speaker 1: Apply that in biology. And the idea was, hey, d 193 00:10:34,600 --> 00:10:36,920 Speaker 1: N as code, you can read it and write it 194 00:10:37,040 --> 00:10:39,000 Speaker 1: and you can sort of install new code in a cell. 195 00:10:39,120 --> 00:10:40,880 Speaker 1: You can make it do something new. And so that 196 00:10:41,000 --> 00:10:43,320 Speaker 1: that was really the foundation that it came from her 197 00:10:43,360 --> 00:10:46,280 Speaker 1: experience at M I T. Working there. I think in 198 00:10:46,559 --> 00:10:48,920 Speaker 1: COVID we all learned what m R n A was 199 00:10:49,000 --> 00:10:51,600 Speaker 1: and a lot of us hadn't heard that before. How 200 00:10:51,720 --> 00:10:55,000 Speaker 1: is the success of that technology help bring I think 201 00:10:55,120 --> 00:10:57,000 Speaker 1: light a lot of the work that you guys are doing, 202 00:10:57,040 --> 00:10:59,520 Speaker 1: a lot of the innovation going on. Yeah, so I 203 00:10:59,520 --> 00:11:02,600 Speaker 1: think it's deal actually, you know, like like COVID has 204 00:11:02,640 --> 00:11:07,320 Speaker 1: been basically a general public education on biotechnology. People know 205 00:11:07,400 --> 00:11:09,600 Speaker 1: what PCR tests are, all right, son, right, Like that 206 00:11:09,640 --> 00:11:13,160 Speaker 1: means something to be like PCR is complete lab nerd 207 00:11:13,200 --> 00:11:15,319 Speaker 1: town Okay, right now, it's a common phrase m R 208 00:11:15,360 --> 00:11:17,280 Speaker 1: and A. I mean think about it right, Like, what 209 00:11:17,320 --> 00:11:19,480 Speaker 1: we did was we put a piece you know what 210 00:11:19,960 --> 00:11:22,080 Speaker 1: you know, Madarren and others, and put a piece of 211 00:11:22,600 --> 00:11:25,199 Speaker 1: m R and A code into your body cells, getting 212 00:11:25,600 --> 00:11:29,040 Speaker 1: yourselves read that executed, and you know, put up a 213 00:11:29,080 --> 00:11:31,920 Speaker 1: little piece of the virus to get your immune system going. Well, 214 00:11:32,200 --> 00:11:35,400 Speaker 1: that's that's the beginning of genomic medicine, right. There are 215 00:11:35,440 --> 00:11:37,720 Speaker 1: many many drugs to come now that are going to 216 00:11:37,760 --> 00:11:41,040 Speaker 1: be actually code delivered to your body to to make 217 00:11:41,080 --> 00:11:43,200 Speaker 1: it do something new. And by the way, the reason 218 00:11:43,240 --> 00:11:45,600 Speaker 1: this works is that's how your body already works, right, 219 00:11:45,720 --> 00:11:48,520 Speaker 1: Your your yourselves talk to each other. They exchange in 220 00:11:48,800 --> 00:11:50,920 Speaker 1: the language of m R and A and d n A. 221 00:11:51,080 --> 00:11:55,240 Speaker 1: That's how information has passed among generations in biology. We're 222 00:11:55,280 --> 00:11:58,320 Speaker 1: just finally able to talk their language. I think we 223 00:11:58,400 --> 00:12:00,480 Speaker 1: came into this pandemic and maybe a lot of us 224 00:12:00,520 --> 00:12:04,040 Speaker 1: fell caught off guard. How are you thinking about preparing 225 00:12:04,120 --> 00:12:08,800 Speaker 1: for the next pandemic? The innovation, the technology, this small 226 00:12:08,880 --> 00:12:11,480 Speaker 1: minor tweaks that you can make too if there is 227 00:12:11,520 --> 00:12:13,640 Speaker 1: another one, what does that look like? What does the 228 00:12:13,679 --> 00:12:18,120 Speaker 1: treatment look like? Yeah? So I think we got sucker 229 00:12:18,120 --> 00:12:20,679 Speaker 1: punched frankly by COVID. Right, um and so we had 230 00:12:20,720 --> 00:12:23,120 Speaker 1: to go out with what we had available to us, right, 231 00:12:23,280 --> 00:12:25,760 Speaker 1: And so you saw a crash program to to see 232 00:12:25,760 --> 00:12:29,280 Speaker 1: if we can make mRNA vaccines work. Heroic effort, right, 233 00:12:29,320 --> 00:12:31,520 Speaker 1: Like really it's like a moon landing. And so that 234 00:12:32,360 --> 00:12:34,199 Speaker 1: is now I think one of the base like if 235 00:12:34,200 --> 00:12:36,960 Speaker 1: things get out of control, we have mRNA vaccines as 236 00:12:36,960 --> 00:12:39,320 Speaker 1: a way to rapidly respond. They won't work for everything, 237 00:12:39,320 --> 00:12:41,559 Speaker 1: but they'll work for a lot of things. The trick 238 00:12:41,720 --> 00:12:44,520 Speaker 1: is how do you stop them from getting out of control? Right? 239 00:12:44,720 --> 00:12:48,240 Speaker 1: And what you need for that is like relabout like 240 00:12:48,280 --> 00:12:51,360 Speaker 1: where where a virus is spreading? How can you contain 241 00:12:51,400 --> 00:12:53,400 Speaker 1: them so you can make targeted interventions? Right. I grew 242 00:12:53,440 --> 00:12:56,440 Speaker 1: up in Florida. We know when a hurricane is coming, right, 243 00:12:56,720 --> 00:12:59,720 Speaker 1: we board up the windows, We prepare, and as a result, 244 00:13:00,120 --> 00:13:02,440 Speaker 1: several weeks later, life is back to normal. The economy 245 00:13:02,480 --> 00:13:05,440 Speaker 1: comes back faster, less people lose their lives. You prepare 246 00:13:05,480 --> 00:13:07,800 Speaker 1: if you have the information and you can prepare locally. 247 00:13:08,480 --> 00:13:11,319 Speaker 1: We don't have any of that visibility into where viruses are, 248 00:13:11,360 --> 00:13:13,560 Speaker 1: and that that's what needs to get built, right, and 249 00:13:13,559 --> 00:13:16,160 Speaker 1: that's starting to happen. We're uh one of the largest 250 00:13:16,200 --> 00:13:18,640 Speaker 1: providers of testing in schools in the country, for example, 251 00:13:19,600 --> 00:13:22,800 Speaker 1: now thousands of organizations where we're testing. That's to give 252 00:13:22,840 --> 00:13:25,280 Speaker 1: people that picture I want to have brought in this out. 253 00:13:25,320 --> 00:13:27,760 Speaker 1: A little bit before your segment, we were speaking with 254 00:13:27,840 --> 00:13:30,960 Speaker 1: Natasha Lamb who was taking more of a market's perspective, 255 00:13:31,040 --> 00:13:34,680 Speaker 1: and there's been a big rethink about valuations at this moment, 256 00:13:34,800 --> 00:13:38,080 Speaker 1: particularly within the biotech space. I don't need you to 257 00:13:38,120 --> 00:13:40,840 Speaker 1: comment on if you think your company's over or under value, 258 00:13:40,920 --> 00:13:43,600 Speaker 1: because we don't know the answer to that, but how 259 00:13:43,640 --> 00:13:47,120 Speaker 1: are you thinking about valuations and the fundraising environment in 260 00:13:47,200 --> 00:13:49,400 Speaker 1: this moment? Yeah, I mean so it's one of the 261 00:13:49,400 --> 00:13:51,800 Speaker 1: things I think you're seeing is sort of interest rates 262 00:13:51,840 --> 00:13:55,240 Speaker 1: go up and people get out of law term growth, right, 263 00:13:55,280 --> 00:13:57,760 Speaker 1: you know. And I think that's very rational, right, And 264 00:13:57,800 --> 00:14:02,120 Speaker 1: so that doesn't mean long term growth companies can't be valuable, 265 00:14:02,200 --> 00:14:03,800 Speaker 1: But I think the thing that means investors need to 266 00:14:03,840 --> 00:14:07,120 Speaker 1: ask do they have the capital to get to it right? 267 00:14:07,160 --> 00:14:09,199 Speaker 1: To get to that law term growth they're planning for. 268 00:14:09,679 --> 00:14:11,840 Speaker 1: And if they do, I think they'll see a consolidation 269 00:14:11,840 --> 00:14:14,520 Speaker 1: around certain companies that have that. The kind of winners 270 00:14:14,520 --> 00:14:16,920 Speaker 1: in the space, I think they'll have an easier time 271 00:14:17,160 --> 00:14:19,440 Speaker 1: raising capital and a lot of other folks won't. And 272 00:14:19,440 --> 00:14:23,560 Speaker 1: it kind of reminds me of like Internet right a calling. 273 00:14:24,600 --> 00:14:27,000 Speaker 1: You know, Amazon got built then rightly that was when 274 00:14:27,000 --> 00:14:28,600 Speaker 1: they made that. You know a lot of the big 275 00:14:29,160 --> 00:14:33,560 Speaker 1: un found fundamental principles of Amazon got two thousand and 276 00:14:33,600 --> 00:14:36,120 Speaker 1: three because of an environment like this. So you know, 277 00:14:36,160 --> 00:14:37,400 Speaker 1: if you've been on the right ones, I think you 278 00:14:37,400 --> 00:14:39,400 Speaker 1: could do well. This is really great. It's like we 279 00:14:39,440 --> 00:14:42,560 Speaker 1: should do this more often. Jason Kelly, thank you so much. 280 00:14:42,600 --> 00:14:45,800 Speaker 1: You know MS can go Bioworks CEO really appreciate your 281 00:14:45,840 --> 00:14:49,080 Speaker 1: time there and your insights stay with us. Could come 282 00:14:49,120 --> 00:14:51,240 Speaker 1: out still keep it on this sort of COVID theme 283 00:14:51,240 --> 00:14:53,680 Speaker 1: and all the lessons learned from the pandemic. We're gonna 284 00:14:53,680 --> 00:14:56,960 Speaker 1: be speaking with wealthy colleges president about the challenge of 285 00:14:57,080 --> 00:15:00,240 Speaker 1: staring students through a once in a lifetime pandem make 286 00:15:00,560 --> 00:15:19,000 Speaker 1: and while the path forward this is Glimberg. We are 287 00:15:19,040 --> 00:15:22,000 Speaker 1: here in Boston, Welcome back. This is the Boston Chamber 288 00:15:22,000 --> 00:15:25,040 Speaker 1: of Commerce Annual meeting. And I'm really pleased to say, 289 00:15:25,080 --> 00:15:26,880 Speaker 1: and I want to bring in our next guest, Wesley 290 00:15:26,960 --> 00:15:30,640 Speaker 1: President Dr Paula Johnson, who was the Boston Chambers dinner 291 00:15:30,760 --> 00:15:33,360 Speaker 1: Honor Rate tonight to really talk about sort of how 292 00:15:33,440 --> 00:15:36,240 Speaker 1: colleges are coming out of this big pandemic era and 293 00:15:36,840 --> 00:15:38,720 Speaker 1: what were you, as said, some of the biggest key 294 00:15:38,760 --> 00:15:42,360 Speaker 1: takeaways all remote and then of course trying to bring 295 00:15:42,400 --> 00:15:46,480 Speaker 1: some students back. It's been fascinating and I would say 296 00:15:46,520 --> 00:15:50,680 Speaker 1: that UM in Massachusetts we've done such an amazing job 297 00:15:50,720 --> 00:15:54,360 Speaker 1: of working together to create the protocols that have been 298 00:15:54,400 --> 00:15:57,840 Speaker 1: critical to allow us to bring students back to school, 299 00:15:57,880 --> 00:16:01,880 Speaker 1: which has been so important yea, or our students not 300 00:16:01,920 --> 00:16:06,120 Speaker 1: only in terms of learning, but for their mental health. Well, 301 00:16:06,160 --> 00:16:08,320 Speaker 1: and it's interesting that you talked about mental health because 302 00:16:08,320 --> 00:16:11,000 Speaker 1: we're thinking about new ways that we can support students 303 00:16:11,400 --> 00:16:14,920 Speaker 1: invest in students. There's a lot of concerns that investments 304 00:16:14,920 --> 00:16:17,400 Speaker 1: in an all remote world, it's hard to get that 305 00:16:17,480 --> 00:16:21,240 Speaker 1: engagement and the discussion and the discourse. How important is 306 00:16:21,240 --> 00:16:23,160 Speaker 1: it to be able to invest in that mental health 307 00:16:23,200 --> 00:16:25,920 Speaker 1: and the investment is also doing it here? Yeah, it 308 00:16:26,040 --> 00:16:29,240 Speaker 1: is critical. You know, before the pandemic, we had an 309 00:16:29,240 --> 00:16:34,240 Speaker 1: epidemic of depression and anxiety in young people starting before college, 310 00:16:34,240 --> 00:16:38,000 Speaker 1: but really accelerating during those years, and so the pandemic 311 00:16:38,440 --> 00:16:41,880 Speaker 1: has just added kind of acute insult on top of that. 312 00:16:42,480 --> 00:16:44,920 Speaker 1: So what we really need it is an epidemic. What 313 00:16:45,000 --> 00:16:48,280 Speaker 1: we really need is an approach that is a public 314 00:16:48,320 --> 00:16:51,480 Speaker 1: health approach for us to understand what's dry. I think 315 00:16:51,520 --> 00:16:55,040 Speaker 1: this it's not just the pandemic, what's driving it, how 316 00:16:55,080 --> 00:16:57,800 Speaker 1: do we prevent it, and how do we best treat it? 317 00:16:58,360 --> 00:17:00,760 Speaker 1: And some of those interventions are fact going to be 318 00:17:01,280 --> 00:17:04,720 Speaker 1: online interventions, but some may not be. And there's a 319 00:17:04,800 --> 00:17:08,200 Speaker 1: need for better connectedness. How do we do that. So 320 00:17:08,600 --> 00:17:13,320 Speaker 1: there's a real opportunity here for a very robust research agenda, 321 00:17:13,520 --> 00:17:16,639 Speaker 1: and it's really in service to the future. Some of 322 00:17:16,680 --> 00:17:19,920 Speaker 1: the investments in the future has been women in STEM courses, 323 00:17:19,960 --> 00:17:21,560 Speaker 1: and I think STEM is in something that we've been 324 00:17:21,600 --> 00:17:24,080 Speaker 1: throwing around a lot in the last decade, but we 325 00:17:24,119 --> 00:17:26,359 Speaker 1: haven't really seen sort of the progress that we needed. 326 00:17:26,520 --> 00:17:28,320 Speaker 1: What are you doing to make sure that women can 327 00:17:28,400 --> 00:17:31,439 Speaker 1: indeed be included in some of the STEM world. Well, 328 00:17:31,480 --> 00:17:34,240 Speaker 1: you know, at Wellesley we've been so focused on making 329 00:17:34,280 --> 00:17:38,720 Speaker 1: sure STEM education is part of a liberal arts education 330 00:17:39,280 --> 00:17:43,040 Speaker 1: and that all students have the opportunity to thrive in STEM. 331 00:17:43,240 --> 00:17:45,520 Speaker 1: Part of that is the fact that over of our 332 00:17:46,240 --> 00:17:49,760 Speaker 1: um STEM faculty across the board are women, so they 333 00:17:49,800 --> 00:17:53,160 Speaker 1: see it, which is phenomenal. But it's also in really 334 00:17:53,200 --> 00:17:57,040 Speaker 1: bringing in students of all background, students who are underrepresented, 335 00:17:57,080 --> 00:17:59,600 Speaker 1: students who may not be from backgrounds where they have 336 00:17:59,720 --> 00:18:03,160 Speaker 1: been in produced and really giving them opportunities for deep 337 00:18:03,200 --> 00:18:08,879 Speaker 1: research UM experiences. And it's really paying off. Of our 338 00:18:08,920 --> 00:18:12,800 Speaker 1: students are majoring in STEM. We produce the largest number 339 00:18:13,000 --> 00:18:17,440 Speaker 1: of women um pH d s and science, second largest 340 00:18:17,480 --> 00:18:20,280 Speaker 1: in math compared to our liberal arts peers. And we 341 00:18:20,440 --> 00:18:23,200 Speaker 1: just learned that we've gotten the largest number of NSF 342 00:18:23,200 --> 00:18:27,200 Speaker 1: graduate fellowships. So it can be done, but there really 343 00:18:27,240 --> 00:18:31,560 Speaker 1: needs to be a focus, and that focus starts in college, 344 00:18:31,680 --> 00:18:34,840 Speaker 1: starts before call, right, but it has to continue into 345 00:18:34,840 --> 00:18:37,920 Speaker 1: the workforce. I want to talk about some of your peers. 346 00:18:37,920 --> 00:18:41,399 Speaker 1: We are in Boston, the previous gases an M I, T. Brad. 347 00:18:41,520 --> 00:18:44,720 Speaker 1: Everyone here is a Harvard At and m IDEA Wellesley. 348 00:18:44,800 --> 00:18:48,280 Speaker 1: How do you maintain that competitive edge, cultivate that talent, 349 00:18:48,560 --> 00:18:50,760 Speaker 1: and make sure that you're still the place where people 350 00:18:50,800 --> 00:18:54,160 Speaker 1: want to be. Yeah, it's a really good question. Um, 351 00:18:54,200 --> 00:18:58,720 Speaker 1: I think you have to be your authentic school. And really, um, 352 00:18:58,760 --> 00:19:02,280 Speaker 1: every school is not for every student. Understand what it 353 00:19:02,440 --> 00:19:06,919 Speaker 1: is you cultivate um what your personality is. And the 354 00:19:06,960 --> 00:19:10,560 Speaker 1: other thing is how you can partner with other schools 355 00:19:10,960 --> 00:19:15,000 Speaker 1: to be stronger. So, for example, we have a strong 356 00:19:15,080 --> 00:19:18,359 Speaker 1: partnership with M I T. And that is wonderful for 357 00:19:18,400 --> 00:19:22,840 Speaker 1: our engineering students. But I think that really understanding deeply 358 00:19:23,400 --> 00:19:27,680 Speaker 1: your areas of expertise, and then it isn't about the competitiveness, 359 00:19:27,800 --> 00:19:31,960 Speaker 1: it's really keeping that excellence, keeping in touch with the 360 00:19:32,000 --> 00:19:36,560 Speaker 1: next generation and moving forward. Well, you were certainly inspiring 361 00:19:36,600 --> 00:19:40,400 Speaker 1: this generation. You're inspiring us all here tonight. You're certainly 362 00:19:40,400 --> 00:19:43,560 Speaker 1: inspiring the next generation of women as well. That was 363 00:19:43,800 --> 00:20:04,040 Speaker 1: the Wellesley president Dr Paula. Johnson really appreciated. Welcome back 364 00:20:04,160 --> 00:20:07,040 Speaker 1: to Bloomberg Technology. I am Taylor REGs and we're here 365 00:20:07,080 --> 00:20:10,280 Speaker 1: at the Boston Convention Center at the Greater Boston Chamber 366 00:20:10,359 --> 00:20:12,960 Speaker 1: of Commerce event. I want to get back to the markets. 367 00:20:13,000 --> 00:20:15,440 Speaker 1: Have talked a lot about a big bloomberg scoop underway 368 00:20:15,680 --> 00:20:17,880 Speaker 1: Space X. Of course we know that as a landmark 369 00:20:18,000 --> 00:20:22,000 Speaker 1: space start up raising more money and new eye watering evaluations. 370 00:20:22,040 --> 00:20:25,240 Speaker 1: This is all according to sources. Bloomberg's at Ludlow. Of course, 371 00:20:25,320 --> 00:20:27,640 Speaker 1: here you help break this story. You're always on top 372 00:20:27,680 --> 00:20:30,520 Speaker 1: of this staff, what do you have for me? Yeah? Interesting, 373 00:20:30,520 --> 00:20:33,439 Speaker 1: So sources telling myself Katie Ruth and Jillian Tan of 374 00:20:33,480 --> 00:20:36,960 Speaker 1: course are crack squad of deals reporters that space x 375 00:20:37,080 --> 00:20:39,199 Speaker 1: is going through a funding round, right, raising funds, but 376 00:20:39,320 --> 00:20:44,439 Speaker 1: at a one billion dollar evaluation according to those sources, right, 377 00:20:44,480 --> 00:20:47,000 Speaker 1: that is eye watering for a private US company, for 378 00:20:47,080 --> 00:20:49,560 Speaker 1: any private company. Two things happening at the same time, 379 00:20:49,600 --> 00:20:52,960 Speaker 1: really interesting. You have the funding round raising funds from investors, 380 00:20:53,240 --> 00:20:56,040 Speaker 1: and at the same time you have employees selling their 381 00:20:56,080 --> 00:20:59,120 Speaker 1: private shares. This is quite common. So those two things 382 00:20:59,160 --> 00:21:01,520 Speaker 1: happen at the same time, a big round and then 383 00:21:01,600 --> 00:21:03,760 Speaker 1: for shares to be sold on the secondaries market and 384 00:21:03,800 --> 00:21:08,280 Speaker 1: employee tender offer. Those employees selling their shares at seventy 385 00:21:08,280 --> 00:21:10,040 Speaker 1: dollars a share. We don't know the volume of shares 386 00:21:10,040 --> 00:21:12,560 Speaker 1: are on offer. But you know this is a company tailor, 387 00:21:12,640 --> 00:21:15,080 Speaker 1: you know, because when you let me come on with you, 388 00:21:15,280 --> 00:21:17,719 Speaker 1: we do the launches for SpaceX. We talk about it 389 00:21:17,880 --> 00:21:21,240 Speaker 1: for a very long time. This is a company, right, Well, 390 00:21:21,280 --> 00:21:22,959 Speaker 1: sometimes you let me because you know that I get 391 00:21:23,000 --> 00:21:26,080 Speaker 1: carried away and they're at the cutting edge of space technology. 392 00:21:26,240 --> 00:21:28,479 Speaker 1: But I think the story here as well, with this 393 00:21:28,720 --> 00:21:32,000 Speaker 1: rates environment, the FED, the outlook for inflation. Let's bring 394 00:21:32,080 --> 00:21:34,800 Speaker 1: up the next chart because it's the jump invaluation that 395 00:21:34,840 --> 00:21:37,960 Speaker 1: I'm really looking at. When space x race funds last 396 00:21:38,000 --> 00:21:41,280 Speaker 1: October and they also did that secondary sale, we're talking 397 00:21:41,320 --> 00:21:44,439 Speaker 1: about a hundred billion dollar valuation, We're now talking about 398 00:21:44,480 --> 00:21:47,040 Speaker 1: a hundred and twenty billions on evaluation. I know you've 399 00:21:47,080 --> 00:21:49,639 Speaker 1: got a really fantastic VC guest coming up where we 400 00:21:49,680 --> 00:21:51,720 Speaker 1: need to talk about the broader landscape of what's going 401 00:21:51,720 --> 00:21:56,000 Speaker 1: on here. Yeah, yeah, you're spot on. Edd. Really appreciate it. 402 00:21:56,000 --> 00:21:58,840 Speaker 1: You're always welcome on my show, so there's my disclaimer. 403 00:21:59,119 --> 00:22:01,720 Speaker 1: Really appreciate it. Are very on Bloomberg's at Ludlow. I 404 00:22:01,800 --> 00:22:03,680 Speaker 1: want to get back to the market and we'll talk 405 00:22:03,720 --> 00:22:05,840 Speaker 1: about a little bit of the downturn that we've been seen, 406 00:22:05,960 --> 00:22:08,760 Speaker 1: especially in the tech startup scene. I'm so pleased to 407 00:22:08,760 --> 00:22:10,680 Speaker 1: say that Ken Bennett, of course you know him as 408 00:22:10,680 --> 00:22:14,399 Speaker 1: partner of Bessmer Ventures not far from here and Cambridge 409 00:22:14,600 --> 00:22:17,160 Speaker 1: dragged out here into the big, big big city at Boston. 410 00:22:17,320 --> 00:22:19,920 Speaker 1: And what Ed was talking about is sort of the 411 00:22:19,920 --> 00:22:24,399 Speaker 1: evaluation um, sort of resizing, if you will. And I 412 00:22:24,440 --> 00:22:26,520 Speaker 1: know that we don't necessarily follow the markets on a 413 00:22:26,600 --> 00:22:29,400 Speaker 1: day to day basis, but to the extent that that 414 00:22:29,480 --> 00:22:33,399 Speaker 1: volatility impacts you're investing, How do you see all that 415 00:22:33,440 --> 00:22:36,920 Speaker 1: plane out right now? I mean, this is not new, 416 00:22:37,160 --> 00:22:38,920 Speaker 1: This is not a new place for us. So at best, 417 00:22:39,520 --> 00:22:42,600 Speaker 1: a lot of our focuses on cloud stocks, recurring revenue 418 00:22:42,640 --> 00:22:45,800 Speaker 1: software investment, and for the last twenty years, for the 419 00:22:45,840 --> 00:22:48,639 Speaker 1: most part, they've been here. They've been trading at six 420 00:22:48,680 --> 00:22:51,719 Speaker 1: to ten to fifteen times revenue. Smart people can debate 421 00:22:51,800 --> 00:22:54,160 Speaker 1: should they be higher, should they be lower? But smart 422 00:22:54,160 --> 00:22:56,320 Speaker 1: people were not debating last year should they be at 423 00:22:56,359 --> 00:22:58,560 Speaker 1: forty and fifty and sixty times revenue as they were, 424 00:22:59,000 --> 00:23:02,119 Speaker 1: So this feels like a new normal, but it's a 425 00:23:02,119 --> 00:23:04,760 Speaker 1: place that's familiar for us for the last two decades. 426 00:23:04,880 --> 00:23:08,879 Speaker 1: I think it's interesting, though, particularly in the big cloud businesses, 427 00:23:08,960 --> 00:23:12,159 Speaker 1: the subscription services, the software is a service, the sas 428 00:23:12,200 --> 00:23:15,320 Speaker 1: businesses that's been sort of a standout where people like 429 00:23:15,480 --> 00:23:19,080 Speaker 1: the business model and more importantly, there's a path to profitability. 430 00:23:19,600 --> 00:23:21,439 Speaker 1: Is a lot of this about companies that have a 431 00:23:21,520 --> 00:23:24,040 Speaker 1: grow at any cost and are willing or able to 432 00:23:24,080 --> 00:23:27,720 Speaker 1: turn a profit. I think the valuations reset has affected 433 00:23:27,760 --> 00:23:30,480 Speaker 1: every single company in the SASS Index for sure. But 434 00:23:30,680 --> 00:23:33,560 Speaker 1: absolutely if you look at the top ten sas companies 435 00:23:33,600 --> 00:23:35,840 Speaker 1: that we track in the index by market cap, they 436 00:23:35,880 --> 00:23:39,159 Speaker 1: are all cash flow positive with maybe one exception they 437 00:23:39,280 --> 00:23:41,919 Speaker 1: run free cash flow. So these are businesses that have 438 00:23:42,000 --> 00:23:46,000 Speaker 1: proven their ability to generate cash, and clearly the businesses 439 00:23:46,000 --> 00:23:47,719 Speaker 1: that can generate cash are the ones that are being 440 00:23:47,760 --> 00:23:50,439 Speaker 1: favored a little bit more in this market. Reset. I 441 00:23:50,480 --> 00:23:53,959 Speaker 1: think when we're speaking at the Boston the Greater Boston 442 00:23:54,000 --> 00:23:56,199 Speaker 1: jam Er of Commerce, a lot of the conversations have 443 00:23:56,280 --> 00:23:58,760 Speaker 1: been about the health of the economy and a lot 444 00:23:58,800 --> 00:24:01,760 Speaker 1: of the inflationary and acts. What extent, if any, do 445 00:24:01,840 --> 00:24:05,600 Speaker 1: you have on seeing sort of the macro economics on 446 00:24:05,680 --> 00:24:08,960 Speaker 1: sort of your world of investing and looking at companies. Yeah, 447 00:24:09,240 --> 00:24:12,680 Speaker 1: not many of our companies face a big inflationary dynamic 448 00:24:12,680 --> 00:24:15,480 Speaker 1: because their software, so they don't have huge input costs 449 00:24:15,480 --> 00:24:18,040 Speaker 1: with the exception of labor, so the talent, the engineering 450 00:24:18,040 --> 00:24:20,600 Speaker 1: costs have been insane in the last few years. And 451 00:24:20,680 --> 00:24:22,919 Speaker 1: so what's happening right now is these companies, reset, is 452 00:24:22,920 --> 00:24:25,520 Speaker 1: they all realize they can't raise capital at the cheap 453 00:24:25,560 --> 00:24:27,600 Speaker 1: prices they used to, and that means they've got to 454 00:24:27,640 --> 00:24:30,680 Speaker 1: save money somehow, and what that will bring will be layoffs, 455 00:24:30,720 --> 00:24:33,400 Speaker 1: will be hiring freezes, and we're seeing in a number 456 00:24:33,440 --> 00:24:35,800 Speaker 1: of our companies right now, and that means that pretty 457 00:24:35,800 --> 00:24:39,520 Speaker 1: soon talent I believe will be on sale costive engineers. 458 00:24:39,600 --> 00:24:42,560 Speaker 1: The salaries paid for engineers will absolutely go down. So 459 00:24:42,640 --> 00:24:45,439 Speaker 1: maybe a right sizing in the market to some extent. 460 00:24:45,840 --> 00:24:49,720 Speaker 1: What don't you advising CEOs entrepreneurs of some of the 461 00:24:49,760 --> 00:24:52,720 Speaker 1: companies within your portfolio about what to do to save 462 00:24:52,800 --> 00:24:55,080 Speaker 1: that cash to prepare for a down term? Imp there 463 00:24:55,240 --> 00:24:57,320 Speaker 1: is one, and how do I like to set yourself 464 00:24:57,400 --> 00:24:59,720 Speaker 1: up for success in the next twelve months. We're not 465 00:24:59,760 --> 00:25:02,040 Speaker 1: really saying if At this point, we're telling them it's 466 00:25:02,080 --> 00:25:04,439 Speaker 1: almost a certainty that we're going into some version of 467 00:25:04,440 --> 00:25:06,919 Speaker 1: a down term, especially for them, and so what that 468 00:25:06,960 --> 00:25:10,040 Speaker 1: means is they should prepare to not raise money as 469 00:25:10,080 --> 00:25:13,280 Speaker 1: long as they can possibly avoid to not raising money. 470 00:25:13,320 --> 00:25:16,640 Speaker 1: So there is some private capital still available for these startups, 471 00:25:16,800 --> 00:25:18,960 Speaker 1: but it is going to be very scared, very nervous, 472 00:25:18,960 --> 00:25:20,959 Speaker 1: and very hard to come by. So the best startups 473 00:25:21,000 --> 00:25:22,919 Speaker 1: in the world will be smart enough to not go 474 00:25:22,960 --> 00:25:25,320 Speaker 1: out into the market for the next at least eighteen months. 475 00:25:25,320 --> 00:25:28,040 Speaker 1: If not twenty four and further. So they're all prepared 476 00:25:28,080 --> 00:25:30,720 Speaker 1: to go that distance. Think about their runaway, Think about 477 00:25:30,720 --> 00:25:32,600 Speaker 1: how far they can get without raising any more capital. 478 00:25:32,720 --> 00:25:34,960 Speaker 1: Do you then a way to deploy some of the 479 00:25:35,000 --> 00:25:38,399 Speaker 1: capital if you think valuations or like you said, talent 480 00:25:38,520 --> 00:25:41,200 Speaker 1: on sale twelve months from now, how do you deploy 481 00:25:41,280 --> 00:25:44,760 Speaker 1: that capital? If two eight two thousand nine is any guide, 482 00:25:44,800 --> 00:25:47,440 Speaker 1: the next year will actually be pretty slow, even though 483 00:25:47,520 --> 00:25:50,600 Speaker 1: in theory the valuations of startups should be lower. The 484 00:25:50,600 --> 00:25:53,119 Speaker 1: best startups won't be raising unless they're absolutely forced to. 485 00:25:53,600 --> 00:25:55,119 Speaker 1: And so it'll be a year from now, a year 486 00:25:55,119 --> 00:25:57,200 Speaker 1: and a half from now, when valuation resets have really 487 00:25:57,400 --> 00:26:00,399 Speaker 1: filtered through the market that founders and as will be 488 00:26:00,520 --> 00:26:02,840 Speaker 1: ready to go back out to the markets, and hopefully 489 00:26:02,880 --> 00:26:04,760 Speaker 1: for many of them, they'll have grown, so they'll be 490 00:26:04,840 --> 00:26:06,520 Speaker 1: much more valuable than they are today if they raise 491 00:26:06,560 --> 00:26:08,560 Speaker 1: anyway in the year. But that's my guess is that 492 00:26:08,760 --> 00:26:11,600 Speaker 1: most venture capital will be pretty slow for the next year, 493 00:26:11,600 --> 00:26:13,280 Speaker 1: and then we'll begin to pick up as the market 494 00:26:13,480 --> 00:26:15,960 Speaker 1: slowly comes back to life. Does that mean more m 495 00:26:16,040 --> 00:26:20,119 Speaker 1: and a more consolidation. Absolutely, so. You know, there's a 496 00:26:20,160 --> 00:26:23,000 Speaker 1: set of businesses in the world that we're never viable 497 00:26:23,040 --> 00:26:25,080 Speaker 1: and probably shouldn't have been able to raise money. They 498 00:26:25,119 --> 00:26:26,600 Speaker 1: will go out of business. I think we'll see some 499 00:26:26,800 --> 00:26:30,880 Speaker 1: very big name UH liquidations and bankruptcies. There's another set 500 00:26:30,880 --> 00:26:34,439 Speaker 1: of businesses that are pretty good businesses but not incredible 501 00:26:34,640 --> 00:26:37,000 Speaker 1: and don't have enough cash to make it through this timing, 502 00:26:37,040 --> 00:26:38,800 Speaker 1: and they will all be talking about M and A. 503 00:26:39,080 --> 00:26:42,200 Speaker 1: They'll be seeking buyers, and the buyers are already sort 504 00:26:42,200 --> 00:26:44,200 Speaker 1: of licking their lips thinking this might be a time 505 00:26:44,200 --> 00:26:46,800 Speaker 1: to tuck in a few other companies. And of course 506 00:26:46,840 --> 00:26:49,600 Speaker 1: we're here in Boston and we're on the East Coast 507 00:26:49,680 --> 00:26:52,480 Speaker 1: and we're talking about some of the big tax startups 508 00:26:52,480 --> 00:26:54,840 Speaker 1: in the innovation. When I was in San Francisco in 509 00:26:55,280 --> 00:26:57,800 Speaker 1: nineteen it was during the big sort of we work 510 00:26:57,960 --> 00:27:00,560 Speaker 1: to baccle and there's a lot of conversation ends about 511 00:27:00,920 --> 00:27:03,679 Speaker 1: unicorns and unicorn status and trying to I p O 512 00:27:03,800 --> 00:27:05,840 Speaker 1: and then we got stacks and then it was a 513 00:27:05,840 --> 00:27:08,960 Speaker 1: conversation of how do you go public? What do you 514 00:27:09,000 --> 00:27:11,720 Speaker 1: see is a the unicorn status right now? And then 515 00:27:11,760 --> 00:27:14,760 Speaker 1: be is a SPAC still a good option? Yeah? So 516 00:27:14,880 --> 00:27:17,800 Speaker 1: at bestmer we're not talking about SPACs much anymore. And 517 00:27:17,840 --> 00:27:20,239 Speaker 1: we're not really talking about unicorns. We're talking about what 518 00:27:20,280 --> 00:27:23,360 Speaker 1: we call centaurs. So focusing on companies that can get 519 00:27:23,359 --> 00:27:27,040 Speaker 1: to real revenue a hundred million of recurring revenue, we're 520 00:27:27,040 --> 00:27:29,159 Speaker 1: calling that a centaur. And we think this is the 521 00:27:29,240 --> 00:27:32,080 Speaker 1: year of the center, not the unicorns. UM. I think 522 00:27:32,160 --> 00:27:36,280 Speaker 1: last year there were something like five hundred new unicorns minted. 523 00:27:36,320 --> 00:27:39,480 Speaker 1: That was like one and a half every single day. UM. 524 00:27:39,560 --> 00:27:41,879 Speaker 1: That's insane. Ten years ago it was about four a 525 00:27:41,920 --> 00:27:45,080 Speaker 1: year were minted. So clearly we went through a unicorm bubble, 526 00:27:45,119 --> 00:27:48,040 Speaker 1: and the meaning of the term unicorn has been massively 527 00:27:48,040 --> 00:27:50,600 Speaker 1: good value just quickly. Here As an I p O. 528 00:27:50,800 --> 00:27:54,800 Speaker 1: That's still one of the best exit strategies. Absolutely for 529 00:27:54,880 --> 00:27:57,440 Speaker 1: companies that can control their own destiny, they can get 530 00:27:57,440 --> 00:28:00,560 Speaker 1: to that free cash flow positive point, going public is 531 00:28:00,960 --> 00:28:03,959 Speaker 1: almost always going to have the best return for their capital. 532 00:28:04,160 --> 00:28:06,280 Speaker 1: It's not easy. It's not for everyone. It can be 533 00:28:06,320 --> 00:28:08,760 Speaker 1: a real pain to be a public company. But for 534 00:28:08,800 --> 00:28:11,920 Speaker 1: the companies that have huge markets and massive runway ahead 535 00:28:11,920 --> 00:28:13,720 Speaker 1: of them, going public will still be a good option. 536 00:28:13,760 --> 00:28:16,240 Speaker 1: Now that window may not be open for another year 537 00:28:16,280 --> 00:28:19,320 Speaker 1: in a viable way for many companies. I really appreciate 538 00:28:19,400 --> 00:28:22,119 Speaker 1: it so smart, lots of good sort of advice and 539 00:28:22,200 --> 00:28:25,840 Speaker 1: was done Ken Bennett partner Best Summer Ventures. Really appreciate 540 00:28:25,880 --> 00:28:29,120 Speaker 1: your insight and you can read more all about startups 541 00:28:29,119 --> 00:28:31,560 Speaker 1: in today's Big take, of course on Bloomberg's that make 542 00:28:31,560 --> 00:28:33,880 Speaker 1: sure to check that out and coming out, we're gonna 543 00:28:33,880 --> 00:28:37,440 Speaker 1: be fixing crypto's environmental problem, are we? Is it possible? 544 00:28:37,840 --> 00:28:40,640 Speaker 1: We're going to see how the carbon negative blockchain Algrand 545 00:28:40,760 --> 00:28:43,880 Speaker 1: is taking a crack in just that that conversation is next. 546 00:28:44,040 --> 00:29:06,760 Speaker 1: This is Bloomberg. We are here, of course in Boston 547 00:29:06,880 --> 00:29:10,280 Speaker 1: at the Greater Boston Chamber Commerce Annual Meeting. It's signed 548 00:29:10,320 --> 00:29:12,880 Speaker 1: out for our Crypto report, and beyond the current crypto 549 00:29:12,880 --> 00:29:15,400 Speaker 1: market volatility, we also want to take a look at 550 00:29:15,400 --> 00:29:18,520 Speaker 1: another issue that's been plaguing bitcoin, and it's been a 551 00:29:18,560 --> 00:29:20,760 Speaker 1: lot of that high energy consumption which a lot of 552 00:29:20,880 --> 00:29:24,720 Speaker 1: environmental activists have been calling out. Well Algrand it's a 553 00:29:24,800 --> 00:29:29,360 Speaker 1: self sustaining carbon negative blockchain, the things degree newly economic 554 00:29:29,440 --> 00:29:34,280 Speaker 1: models all is a sustainable alternative to bitcoin. Stacy Warden, 555 00:29:34,480 --> 00:29:37,920 Speaker 1: she's the CEO of al Grand Foundation, and she joins me, 556 00:29:38,080 --> 00:29:39,880 Speaker 1: now it is so fun to have you here in 557 00:29:39,960 --> 00:29:42,800 Speaker 1: person at this great event, and I think that there 558 00:29:42,840 --> 00:29:46,280 Speaker 1: has been a criticism of bitcoin. It has been the 559 00:29:46,360 --> 00:29:49,200 Speaker 1: consumption of the energy and the energy it takes to 560 00:29:49,400 --> 00:29:52,560 Speaker 1: mind the bitcoin it all. How did you sort of 561 00:29:52,600 --> 00:29:55,280 Speaker 1: see that as a problem and are their actual steps 562 00:29:55,320 --> 00:29:58,320 Speaker 1: to fix it? Yeah? Absolutely. So, you know, we were 563 00:29:58,320 --> 00:30:02,280 Speaker 1: founded by Sylvia mcaulay who's a touring award winning cryptographer 564 00:30:02,640 --> 00:30:04,680 Speaker 1: and based in m i T actually so here in 565 00:30:04,760 --> 00:30:07,800 Speaker 1: most you know, tenure professor at m i T. And 566 00:30:07,880 --> 00:30:11,480 Speaker 1: he actually invented a couple of the things that cryptocurrency 567 00:30:11,520 --> 00:30:15,000 Speaker 1: more broadly as an ecosystem uses zero knowledge. Prouse verified 568 00:30:15,040 --> 00:30:17,080 Speaker 1: random function of that kind of thing, and so he 569 00:30:17,160 --> 00:30:21,000 Speaker 1: watched the ecosystem developed and he realized some of these 570 00:30:21,040 --> 00:30:24,960 Speaker 1: earlier protocols, like Bitcoin, they weren't exactly they're not fast 571 00:30:25,080 --> 00:30:28,920 Speaker 1: enough exactly, and they have a large carbon footprint. They 572 00:30:28,920 --> 00:30:32,320 Speaker 1: don't scale exactly. So he came up with another consensus 573 00:30:32,360 --> 00:30:35,160 Speaker 1: mechanism in block chain. The whole juice is in the 574 00:30:35,200 --> 00:30:37,840 Speaker 1: consensus mechanism. So if you want to have a lighter 575 00:30:37,920 --> 00:30:40,080 Speaker 1: environmental print footprints, you need to have a different of 576 00:30:40,120 --> 00:30:43,120 Speaker 1: consensus mechanism. Okay, So he came up with a proof 577 00:30:43,120 --> 00:30:46,320 Speaker 1: of state consensus mechanism which has a very light footprint, 578 00:30:46,360 --> 00:30:49,320 Speaker 1: like seven houses or something. How do you need that 579 00:30:49,360 --> 00:30:53,040 Speaker 1: to take off to be adopted in order for this 580 00:30:53,400 --> 00:30:58,280 Speaker 1: sort of narrative to really catch on and become pun intended? 581 00:30:58,440 --> 00:31:02,120 Speaker 1: Is sustainable going forward? Yeah? No, because it gets so 582 00:31:02,360 --> 00:31:06,600 Speaker 1: technical so quick, and um like things that are new, 583 00:31:06,920 --> 00:31:09,520 Speaker 1: you don't tend to differentiate among them in the beginning. 584 00:31:09,880 --> 00:31:12,120 Speaker 1: We think the truth will kind of shake out over 585 00:31:12,200 --> 00:31:14,160 Speaker 1: time as people get a little bit more aware of 586 00:31:14,360 --> 00:31:16,960 Speaker 1: the differences than the nuances between the different kinds of 587 00:31:17,040 --> 00:31:19,920 Speaker 1: layer one chains. And also we believe that in this 588 00:31:20,000 --> 00:31:23,200 Speaker 1: world we need all kinds of different blockchain protocols, So 589 00:31:23,400 --> 00:31:25,120 Speaker 1: we don't think it's a winner take all the world 590 00:31:25,160 --> 00:31:27,680 Speaker 1: at all. But we are very proud of a couple 591 00:31:27,680 --> 00:31:31,560 Speaker 1: of things about us. So we are very very scalable blockchain. 592 00:31:31,600 --> 00:31:35,320 Speaker 1: We do ten thousand transactions per second. In July, we settle, 593 00:31:35,400 --> 00:31:38,160 Speaker 1: we have final settlement in four point five seconds, have 594 00:31:38,200 --> 00:31:41,920 Speaker 1: a very low carbon footprint, and a decentralized blockchain. So 595 00:31:42,320 --> 00:31:44,600 Speaker 1: you know, we think we uh, we are sort of 596 00:31:44,880 --> 00:31:48,320 Speaker 1: generation three of blockchains and were well position going forward. 597 00:31:48,360 --> 00:31:51,760 Speaker 1: You know, we have to talk about well, maybe generation one, 598 00:31:51,840 --> 00:31:54,680 Speaker 1: and that's been all of the volatility around crypto and 599 00:31:54,720 --> 00:31:57,560 Speaker 1: the volatility around ethereum, and don't even get me started 600 00:31:57,560 --> 00:32:01,600 Speaker 1: on Terra Luna. And do you watch all the volatility 601 00:32:01,600 --> 00:32:05,160 Speaker 1: and those sort of secondary crypto markets. Does it impact 602 00:32:05,160 --> 00:32:07,640 Speaker 1: your world? What do you make of that? Yeah? Well, 603 00:32:07,720 --> 00:32:10,640 Speaker 1: sadly for me anyway, this is not my first bear 604 00:32:10,720 --> 00:32:13,160 Speaker 1: market by any means. How is it that has dack 605 00:32:13,280 --> 00:32:15,640 Speaker 1: during the dot com crash? I was at JP Morgan 606 00:32:15,720 --> 00:32:19,040 Speaker 1: during the global financial crisis. We've had in the cryptocurrency 607 00:32:19,040 --> 00:32:22,000 Speaker 1: equisystem a number of different events. Right in two thousand fourteen, 608 00:32:22,040 --> 00:32:23,520 Speaker 1: we had Mount Bows that was about a half a 609 00:32:23,560 --> 00:32:29,160 Speaker 1: billion dollars. We had the the Dow attack or attempted attack, 610 00:32:29,280 --> 00:32:32,240 Speaker 1: and two thousand sixteen we had the I c O bust, 611 00:32:32,280 --> 00:32:35,360 Speaker 1: you know, almost billion dollars one up in kind of coins. 612 00:32:35,680 --> 00:32:38,480 Speaker 1: And so the crypto industry continues to recover and it 613 00:32:38,480 --> 00:32:42,040 Speaker 1: continues to make itself better because of what it goes through. 614 00:32:42,320 --> 00:32:45,880 Speaker 1: My heart absolutely goes out to those investors in Carolina, 615 00:32:45,920 --> 00:32:48,240 Speaker 1: I mean, and I have seen a lot in my day, 616 00:32:48,280 --> 00:32:54,120 Speaker 1: but fifty six billion in in I mean billion is 617 00:32:54,320 --> 00:32:56,600 Speaker 1: a lot of money for one asset. To losing one 618 00:32:56,640 --> 00:33:01,440 Speaker 1: asset a law, right, so, um, it's unique power. Well 619 00:33:01,440 --> 00:33:04,120 Speaker 1: and then sort of brings up the idea of regulation, 620 00:33:04,320 --> 00:33:08,040 Speaker 1: and you want regulation to help protect, but you don't 621 00:33:08,080 --> 00:33:10,880 Speaker 1: want regulation to stifle all of the innovation. And the 622 00:33:10,960 --> 00:33:13,640 Speaker 1: great experiment that was and maybe it failed for now, 623 00:33:14,080 --> 00:33:16,320 Speaker 1: but it was the experiment and the chance at it. 624 00:33:16,680 --> 00:33:19,960 Speaker 1: How do you stand? Where do you stand on regulation? Yeah? 625 00:33:20,040 --> 00:33:23,360 Speaker 1: I mean I think it's a very nuanced, um, you 626 00:33:23,400 --> 00:33:26,480 Speaker 1: know subject obviously, and what the industry really does need 627 00:33:26,560 --> 00:33:31,440 Speaker 1: is regulatory clarity. And I think that when you you know, bitcoin, 628 00:33:31,480 --> 00:33:33,880 Speaker 1: for example, or ethereum or eleground, we don't make promises 629 00:33:33,920 --> 00:33:36,560 Speaker 1: to investors of any kind ever, right where when you 630 00:33:36,640 --> 00:33:39,280 Speaker 1: say something and you call it a stable point, you're 631 00:33:39,360 --> 00:33:41,640 Speaker 1: kind of saying that you're going to be able to 632 00:33:41,640 --> 00:33:43,280 Speaker 1: get a doll or if you turn in that point, 633 00:33:43,360 --> 00:33:45,480 Speaker 1: it's a it's a you're maybe a statement. And I 634 00:33:45,520 --> 00:33:48,080 Speaker 1: think that's where regulators have been focused and are going 635 00:33:48,080 --> 00:33:50,719 Speaker 1: to continue to focus, and they're going to define I 636 00:33:50,760 --> 00:33:54,200 Speaker 1: think stable points in a very clear way, and if 637 00:33:54,200 --> 00:33:56,520 Speaker 1: you don't meet those kinds of specifications, you're probably not 638 00:33:56,520 --> 00:33:58,760 Speaker 1: gonna be able to call yourself point. The most important 639 00:33:58,800 --> 00:34:01,640 Speaker 1: thing I want to say though, that the algorithm blockchain 640 00:34:01,680 --> 00:34:05,960 Speaker 1: has nothing to do with algorithmic stable coins. So okay, right, 641 00:34:06,120 --> 00:34:08,879 Speaker 1: so good to make clear on that. On that note 642 00:34:08,880 --> 00:34:10,640 Speaker 1: that when you think about stable poins, I think you're 643 00:34:10,680 --> 00:34:12,440 Speaker 1: right when you hear the word sable poin, you think 644 00:34:12,440 --> 00:34:15,600 Speaker 1: stable was the bigger issue with Harro Luna that it 645 00:34:15,719 --> 00:34:18,040 Speaker 1: was back by an algorithm. It wasn't back by a 646 00:34:18,120 --> 00:34:21,239 Speaker 1: dollar peg or even to a blockchain or even to 647 00:34:21,320 --> 00:34:24,160 Speaker 1: a real asset for a stable coin to work, do 648 00:34:24,200 --> 00:34:28,200 Speaker 1: you need the collateral if you will to be actual stable? Well, 649 00:34:28,239 --> 00:34:30,960 Speaker 1: you know what I will tell you is that it 650 00:34:31,040 --> 00:34:34,880 Speaker 1: was kind of a perpetual motion machine. And perpetual motion machines, 651 00:34:34,920 --> 00:34:36,560 Speaker 1: I mean, we have been trying to create a perpetual 652 00:34:36,640 --> 00:34:39,520 Speaker 1: motion machine for centuries and they do not work. And 653 00:34:39,600 --> 00:34:43,759 Speaker 1: so it had um a baked in mechanism that if 654 00:34:43,760 --> 00:34:46,160 Speaker 1: that mechanism starts to fail, then you can have a 655 00:34:46,239 --> 00:34:49,279 Speaker 1: kind of a death spiral. And so I you know, 656 00:34:49,719 --> 00:34:52,680 Speaker 1: there are more clever financial minds than I that may 657 00:34:52,760 --> 00:34:55,239 Speaker 1: come up with some way that there's some kind of 658 00:34:55,239 --> 00:34:58,480 Speaker 1: a future brog where the withstable poins. But uh, you know, 659 00:34:58,600 --> 00:35:01,560 Speaker 1: I don't know, But that kind of a perpetual motion 660 00:35:01,560 --> 00:35:03,799 Speaker 1: machine type play is not it's not going to be 661 00:35:03,840 --> 00:35:06,240 Speaker 1: what it looks like. Well, in the meantime, we're happy 662 00:35:06,239 --> 00:35:09,000 Speaker 1: to have you here. Of course roots in the Boston 663 00:35:09,120 --> 00:35:13,400 Speaker 1: area as well. Stacy Barton, CEO of the Al Grand Foundation, 664 00:35:13,520 --> 00:35:26,640 Speaker 1: really appreciate your time here and your insights. We are 665 00:35:26,719 --> 00:35:31,280 Speaker 1: here in Boston the Greater Boston Teamer of Commerce Annual meeting. 666 00:35:31,360 --> 00:35:34,600 Speaker 1: It is underway, and well I hear the Boston Celtics 667 00:35:34,600 --> 00:35:36,320 Speaker 1: are about to go head to head with the Miami 668 00:35:36,360 --> 00:35:39,200 Speaker 1: Heat for the Eastern Conference finals. I didn't write that, 669 00:35:39,239 --> 00:35:42,600 Speaker 1: but I think my producer, Tim Andriati made me do that. 670 00:35:42,800 --> 00:35:44,840 Speaker 1: And take a look at this. So you've the drafting 671 00:35:44,960 --> 00:35:48,560 Speaker 1: CEO co founder here, Jason Robbins of course joining me. Now, 672 00:35:49,320 --> 00:35:52,719 Speaker 1: so many conversations about this reopening. How we still think 673 00:35:52,760 --> 00:35:55,960 Speaker 1: about sports setting in the midst of still getting out 674 00:35:55,960 --> 00:35:58,839 Speaker 1: of the house, the return of sports. How are you 675 00:35:58,880 --> 00:36:01,680 Speaker 1: thinking about all of that for your business? Oh? One, 676 00:36:01,760 --> 00:36:03,799 Speaker 1: it's exciting to see. I mean, look how many people 677 00:36:03,840 --> 00:36:06,960 Speaker 1: are here. It feels like, you know, things are getting 678 00:36:07,520 --> 00:36:10,080 Speaker 1: slowly but surely back to normal. And um, it's just 679 00:36:10,160 --> 00:36:14,000 Speaker 1: good to see for for everybody, I think for us, um, 680 00:36:14,040 --> 00:36:16,719 Speaker 1: you know, it helps more people engaging with sports and 681 00:36:16,840 --> 00:36:19,920 Speaker 1: more ways is helpful. I think people, given you know, 682 00:36:20,000 --> 00:36:22,480 Speaker 1: the mobile device can go anywhere with you. It doesn't 683 00:36:22,520 --> 00:36:25,000 Speaker 1: really matter to us if you're in a stadium or 684 00:36:25,040 --> 00:36:27,719 Speaker 1: if your home. UM. But I think just having more 685 00:36:27,760 --> 00:36:30,080 Speaker 1: ways for people to engage with sports is good for 686 00:36:30,120 --> 00:36:33,040 Speaker 1: sports fans, and I think more engagement has always been 687 00:36:33,040 --> 00:36:35,880 Speaker 1: the case, whether it's fantasy or betting. More engagement with 688 00:36:35,960 --> 00:36:39,400 Speaker 1: fantasy embedding drives more sports content consumption, and more sports 689 00:36:39,400 --> 00:36:42,680 Speaker 1: content consumption drives more engagement with fantasy embedding me. So 690 00:36:42,719 --> 00:36:45,640 Speaker 1: it's start of that circle of why you will. I 691 00:36:45,680 --> 00:36:48,160 Speaker 1: think what's interesting is we've talked a lot about the 692 00:36:48,160 --> 00:36:50,840 Speaker 1: health of the consumer. We heard from Walmart today that 693 00:36:50,920 --> 00:36:54,160 Speaker 1: they're not quite able to pass on higher costs of 694 00:36:54,200 --> 00:36:57,279 Speaker 1: the consumer. Consumers are pulling back and maybe cutting back 695 00:36:57,280 --> 00:37:01,480 Speaker 1: on the discretionary items and shopping for the necessities. Are 696 00:37:01,560 --> 00:37:04,440 Speaker 1: you seeing a shift in consumer behavior if they're starting 697 00:37:04,480 --> 00:37:07,279 Speaker 1: to pull back on some of the fun habits. Not 698 00:37:07,400 --> 00:37:10,799 Speaker 1: at all. We have really really strong cohort data year 699 00:37:10,840 --> 00:37:15,440 Speaker 1: over year. Gaming is actually known to be very agnostic 700 00:37:15,560 --> 00:37:18,840 Speaker 1: too different market cycles. Typically gaming holds up very well 701 00:37:19,239 --> 00:37:24,200 Speaker 1: during economic downturns, so that's very consistent with what we're seeing. Um, 702 00:37:24,239 --> 00:37:26,760 Speaker 1: we have a lot of people love, you know, watching 703 00:37:26,760 --> 00:37:29,480 Speaker 1: the game. You mentioned tonight's Celtic Staves growing five bucks 704 00:37:29,520 --> 00:37:31,480 Speaker 1: on that and that's just part of what they do 705 00:37:31,600 --> 00:37:34,160 Speaker 1: for fun and that's not changing from anything we're seeing. 706 00:37:34,200 --> 00:37:37,400 Speaker 1: If anything, we're seeing great year over year attention in 707 00:37:37,800 --> 00:37:40,880 Speaker 1: revenue numbers. So I want to talk about the income 708 00:37:40,920 --> 00:37:42,680 Speaker 1: statement in the balance sheet. I'm going to bring you 709 00:37:42,719 --> 00:37:46,359 Speaker 1: a quote from the Morgan Stanley analysts really positive, saying 710 00:37:46,360 --> 00:37:49,040 Speaker 1: that they think that Droppings is confident in achieving that 711 00:37:49,120 --> 00:37:52,680 Speaker 1: near term even at targets, talking about this transition right 712 00:37:52,719 --> 00:37:55,480 Speaker 1: to even a profitability in the fourth quarter of twenty three, 713 00:37:55,680 --> 00:37:57,520 Speaker 1: and that's been a big focus as we think a 714 00:37:57,520 --> 00:38:00,759 Speaker 1: lot about the volatility and the tech sector valuation, of 715 00:38:00,880 --> 00:38:04,839 Speaker 1: the valuations and the path to profitability. Is that achievable? 716 00:38:05,680 --> 00:38:08,360 Speaker 1: I think absolutely. I mean, you know, I think a 717 00:38:08,360 --> 00:38:12,040 Speaker 1: lot of where Thomas is getting his information is through 718 00:38:12,040 --> 00:38:15,319 Speaker 1: really sound analysis based on information we're putting out there. 719 00:38:15,400 --> 00:38:17,480 Speaker 1: We've said the same thing that we think that we're 720 00:38:17,480 --> 00:38:20,319 Speaker 1: going to be in the fourth quarter, assuming obviously there's 721 00:38:20,320 --> 00:38:24,279 Speaker 1: a wild card around legalization trends, but assuming normal legalization 722 00:38:24,320 --> 00:38:26,520 Speaker 1: trends like consistent with what we've seen in the past 723 00:38:26,560 --> 00:38:28,960 Speaker 1: few years. We think we can get the profitability in 724 00:38:28,960 --> 00:38:31,600 Speaker 1: the fourth quarter next year. So talk to me about that, 725 00:38:31,640 --> 00:38:33,360 Speaker 1: because we've had too on the program a lot, and 726 00:38:33,400 --> 00:38:35,759 Speaker 1: we talked a lot about the regulatory environment. We've talked 727 00:38:35,800 --> 00:38:38,200 Speaker 1: a lot about sort of the general state by state 728 00:38:38,320 --> 00:38:42,720 Speaker 1: legalization environment. How is that environment for you right now? 729 00:38:42,800 --> 00:38:46,879 Speaker 1: Does the path really indicate future success? Absolutely? I mean, 730 00:38:46,920 --> 00:38:49,520 Speaker 1: we've seen a ton of momentum in the past few years. 731 00:38:49,960 --> 00:38:53,640 Speaker 1: This year we launched New York, Louisiana, Ontario will be 732 00:38:53,800 --> 00:38:56,960 Speaker 1: very soon. We also have three states, so I guess 733 00:38:57,239 --> 00:39:00,520 Speaker 1: two states in Puerto Rico, so Ohio, Maryland, Puerto Rico 734 00:39:00,960 --> 00:39:03,160 Speaker 1: that are in the process. They've already legalized there in 735 00:39:03,200 --> 00:39:06,560 Speaker 1: the process of writing the regulations, issuing licenses and getting 736 00:39:06,640 --> 00:39:09,680 Speaker 1: up and running. Um at that point will be pretty 737 00:39:09,680 --> 00:39:12,640 Speaker 1: close to fift of the US population. And we still 738 00:39:12,680 --> 00:39:16,279 Speaker 1: have the top three states by population California, Texas, and 739 00:39:16,320 --> 00:39:19,600 Speaker 1: Florida that haven't yet, So those collectively are almost a 740 00:39:19,640 --> 00:39:22,040 Speaker 1: quarter of the US. There's still a ton of upside. 741 00:39:22,080 --> 00:39:24,879 Speaker 1: We're running a ballot referen them in California next year. 742 00:39:25,239 --> 00:39:26,960 Speaker 1: If we get that or this year, I should say 743 00:39:27,000 --> 00:39:29,440 Speaker 1: sorry in November. Um, if we get that done, that's 744 00:39:29,480 --> 00:39:33,360 Speaker 1: another of the population. So really seems like the momentum 745 00:39:33,360 --> 00:39:35,799 Speaker 1: strong see he talks about the three big states has 746 00:39:35,880 --> 00:39:38,759 Speaker 1: maybe the big golden goose to attack. Should we infer 747 00:39:38,880 --> 00:39:41,799 Speaker 1: from those comments that the biggest opportunities still remains here 748 00:39:41,840 --> 00:39:44,359 Speaker 1: in the US? I know you mentioned Ontario a little bit. 749 00:39:44,480 --> 00:39:46,520 Speaker 1: How do you think about that. We think Canada is 750 00:39:46,560 --> 00:39:49,400 Speaker 1: a great opportunity to I mean, certainly the US is 751 00:39:49,440 --> 00:39:53,719 Speaker 1: where we feel because there's more population that our bigger opportunities. 752 00:39:53,719 --> 00:39:56,120 Speaker 1: But Ontario, if it were a state, would be the 753 00:39:56,120 --> 00:39:59,279 Speaker 1: fifth largest state in the US by population. So it's 754 00:39:59,320 --> 00:40:03,840 Speaker 1: basically a valent to getting like a Illinois size state, 755 00:40:04,440 --> 00:40:07,440 Speaker 1: Pennsylvania size state to come online. So it's really a 756 00:40:07,480 --> 00:40:12,240 Speaker 1: big deal for really appreciate it. Dropping CEO Jason Robbins, 757 00:40:12,560 --> 00:40:16,080 Speaker 1: go bet on that game. Really appreciate it, and of 758 00:40:16,120 --> 00:40:19,280 Speaker 1: course that does it here for this edition of Bloomberg Technology. 759 00:40:19,360 --> 00:40:22,360 Speaker 1: We will be back in San Francisco tomorrow. But we 760 00:40:22,400 --> 00:40:24,480 Speaker 1: had a great time here, of course at the Boston 761 00:40:24,520 --> 00:40:27,960 Speaker 1: Convention Center and at the Greater Boston Chamber of Commerce 762 00:40:28,040 --> 00:40:31,720 Speaker 1: Annual Meeting stick with us. This is fun. We should 763 00:40:31,719 --> 00:40:33,759 Speaker 1: do this more often. This is Bloomberg