Speaker 1: This is Bloomberg business Week Inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business finance and tech news. The Bloomberg Business Week
Speaker 1: Podcast with Carol Messer and Tim Stenebek from Bloomberg Radio.
Speaker 2: Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast.
Speaker 2: This past week we got a pulse check on the
Speaker 2: US labor force with the release of the November jobs report.
Speaker 2: Ahead on the program, we'll hear from the CEO of
Speaker 2: International Workplace Group better known as IWG, about why big
Speaker 2: markets like New York have little hope of ever getting
Speaker 2: most people back into the office five days a week.
Speaker 2: We're also talking tech, and plenty of it, including how
Speaker 2: Israel's war with moss is affecting the country's most important
Speaker 2: business sector, ways co founder Ory Levine ways En, plus
Speaker 2: the next generation of artificial intelligence is already here. Find
Speaker 2: out what the newest tools can do from the CEO
Speaker 2: of publicly traded Big Bear AI and where the biggest
Speaker 2: threats in them could lie From the President of IDC
Speaker 2: Crawford del Pratt. All of that to come. We begin
Speaker 2: with a frontier that is still largely out of reach
Speaker 2: for most space, the magazine devoting this week's business section
Speaker 2: to it, including a story on developing drugs in micro gravity.
Speaker 2: Here to explain the space race happening inside the pharmaceutical industry,
Speaker 2: our Bloomberg News healthcare reporter Bob Langres and BusinessWeek editor
Speaker 2: Joel Weber.
Speaker 3: So, we're decided to do a little space package.
Speaker 4: There's a lot happening up there, it turns out, and
Speaker 4: there are some expected things like what SpaceX is up
Speaker 4: to you and the race to catch them, but there's
Speaker 4: also I thought, some more interesting things of like applications
Speaker 4: that you probably never heard of. And it turns out
Speaker 4: that you know, you mentioned micro gravity there there are
Speaker 4: some novel use cases for what can be accomplished in space.
Speaker 4: So Bob walk us through it is what can we
Speaker 4: do in space that we can't do as well here
Speaker 4: on Earth.
Speaker 5: Yeah, So it turns out, you know, a lot of
Speaker 5: the drugs that drug makers are making these days are proteins,
Speaker 5: things like monocle and antibiodies or cancer drugs, and these
Speaker 5: are that are that are infused and these are you know, complicated,
Speaker 5: finicky molecules, the notoriously difficult to produce on Earth in
Speaker 5: their crystal form. So it turns out that without gravity,
Speaker 5: or without much gravity, you know, it becomes much it's
Speaker 5: much easier to form like a large, large and very
Speaker 5: uniform crystals, and that, as it turns out, and enhance
Speaker 5: formulations and even potentially some existing drugs. So drug maker
Speaker 5: merk it's working. It's worked on a new formulation of
Speaker 5: it's just blockbuster cancer drug k Tuda. Now that's the
Speaker 5: cancer drug that Jimmy Carter got. It's sort of melanoma
Speaker 5: and all sorts of other ones. But right now it
Speaker 5: must be infused like you have to go to the
Speaker 5: doctor's office and infused over a couple hours. And the
Speaker 5: dry it would really like to put that in injectable forms.
Speaker 5: You could do just a self administered injection potentially even
Speaker 5: at home. But to do that, it needs to be
Speaker 5: able to concentrate that con true to much more to
Speaker 5: be concentrated now and if you did it with the
Speaker 5: current formulation, to be get like molasses. So it turns
Speaker 5: out they did some in space and the International Space
Speaker 5: Station and they came up with a way to concentrate
Speaker 5: it much more and keep it fast flowing. And the
Speaker 5: concept for was first device in space and the fact
Speaker 5: that they might go into clinical trials is something that
Speaker 5: was the first you know devised in space that's excited
Speaker 5: a lot of gotten a lot of interest in you
Speaker 5: know space spaceed drug development and other companies like Eli
Speaker 5: Lillie is up there with some experiments now, and you
Speaker 5: even now have startups that once the International Space Station
Speaker 5: is decommissioned, you know, sometime after twenty thirty that are
Speaker 5: working on developing you know, automated kind of drug formulation
Speaker 5: laboratories in space. It's sense on experiment up and then
Speaker 5: it come back down and drug companies could work on it.
Speaker 3: Okay, so when does this happen? Why don't we have
Speaker 3: this already?
Speaker 4: Bob?
Speaker 5: Well, you know, these are all kind of like, you know,
Speaker 5: I'd like to say, these are all kind of like
Speaker 5: early experiments. So say they're drug companies and setting up
Speaker 5: experiments by the way out into space for really for decades,
Speaker 5: and they're their first experiments were kind of like early
Speaker 5: stage aimed at like early stage drug crystallization works to
Speaker 5: crystallize GOT disease more promoting proteins so they could design
Speaker 5: better drugs. And in fact, a unit of a suka Holdings.
Speaker 5: That's the Japanese company. They have a drug in final
Speaker 5: stage trials in Japan for muscular dystrophe. There was was
Speaker 5: base and some very early work, you know, done early
Speaker 5: in the early days of International Space Study space station
Speaker 5: crystallizing a muscular dystrophy associated protein. But what's happening now
Speaker 5: is there actually Americans and others are showing you could
Speaker 5: actually devise you know, better formulations of existing blockbuster drugs,
Speaker 5: and that's really driven the attention to like maybe space
Speaker 5: is like you know, could really like help us get
Speaker 5: some new patents and make a lot of money. So
Speaker 5: that's really driven interest.
Speaker 4: So whose job is it to figure out how to
Speaker 4: do this in space? Like, you know, Tim, Tim, if
Speaker 4: you're going to make you know, car breaks in space,
Speaker 4: I'm sure you can figure that out.
Speaker 2: But Bob, you don't want to see how far I
Speaker 2: made it from the math in college.
Speaker 4: But within the pharmat, like, whose job is it to
Speaker 4: figure out space manufacturing?
Speaker 5: Yeah, So at the big you know, drug makers, there's
Speaker 5: relatively you know, small numbers of people like working on it,
Speaker 5: so it's still a niche field. I'd say, you know,
Speaker 5: if you go to a big drug maker, I would image.
Speaker 5: There's probably a lot more people work around AI either space,
Speaker 5: but you know, you know, space is like you know,
Speaker 5: garnering interest. Some of the people I talk to, their
Speaker 5: titles are like, you know, director of Formulations, development titles
Speaker 5: like that. But these experiments are are hard. You know,
Speaker 5: you you send something up to the space station and
Speaker 5: you know you get it back down a few months later,
Speaker 5: and if you like screwed up in the design and
Speaker 5: the experiment, you know your next shot and the next
Speaker 5: experiment maybe you know six months later. So you gotta
Speaker 5: got you gotta do it. Be very careful with experimental design.
Speaker 5: You can't, like it's hard to call an astro and say, hey,
Speaker 5: I want to change everything midstream once is up there.
Speaker 5: So there's even a whole set of like companies that
Speaker 5: help drug makers like have like self enclosed experiments that
Speaker 5: can send up that are like all ready to go.
Speaker 5: The astronart press is a couple button to turn it
Speaker 5: on and then press the couple buttons to turn it off.
Speaker 5: You know, you can't it's hard to adjust the audition mystery,
Speaker 5: and once you're up in space.
Speaker 2: The button pressing job it doesn't sound that So Bob,
Speaker 2: I want to get to this idea of scaling and
Speaker 2: make sure I understand what's actually happening in space. I
Speaker 2: want to go back to the company that you used
Speaker 2: in the lead here, LAMB Division, who's working on the
Speaker 2: world's first protein based artificial retina for patients with retinitis pigmentosa. So,
Speaker 2: if it's so hard to actually create these two hundred
Speaker 2: paper thin layers of light sensitive protein in on Earth,
Speaker 2: does that mean that they won't be able to scale
Speaker 2: it in an environment that's not zero gravity.
Speaker 1: Yeah.
Speaker 5: So they're one of the few companies that's right now
Speaker 5: is talking about actually, as I understand it, manufacturing and
Speaker 5: finished product, you know, in space. And if you think
Speaker 5: about their product, it's like literally it's a size of
Speaker 5: a whole punch, like a paper whole punch. That's like,
Speaker 5: you know, so you get I guess you get one
Speaker 5: or two of these if you're a patient. So they
Speaker 5: don't need that much finished product. You know, it's a
Speaker 5: relatively small market. I mean, this is not like an
Speaker 5: infused drug where you're going to be giving you know,
Speaker 5: two hundred millimeters every two weeks for the rest of
Speaker 5: your life. That's more like merks k true to the
Speaker 5: they make it, Mark and K true to their cancer drug.
Speaker 5: They make it like by the ton on Earth and
Speaker 5: their experiments in space. So far, I've made like one
Speaker 5: dose at a time, so you can see that it's
Speaker 5: not right now practical. Wouldn't be even if there are
Speaker 5: even though there are technical advantages, it would not be
Speaker 5: practical for them to make the finished product in space.
Speaker 5: But for something like this artificial retina, where the total
Speaker 5: quantities needed are very very small, and I imagine if
Speaker 5: we ever get this to market, it's going to be
Speaker 5: sold for a very high price. You know, you can
Speaker 5: imagine that's an actual like possibility to actually make that
Speaker 5: in space.
Speaker 4: Would you take the one jose that's been made in space,
Speaker 4: knowing that there's massive quantities on Earth, it's practically the
Speaker 4: same thing. It's just been made in space. Like, why
Speaker 4: wouldn't Why wouldn't I do it?
Speaker 2: Why not?
Speaker 4: I don't know?
Speaker 5: Is the true question that rises the whole regulatory question.
Speaker 5: No one's even got to, like, you know, if something
Speaker 5: actually were made in space, or even if like there's
Speaker 5: another idea they're talking about, it's making like a seed
Speaker 5: crystal in space, use the better conditions of space to
Speaker 5: make like little seed crystals that they could then be
Speaker 5: used sort of like a sour to start being brought
Speaker 5: down to Earth and able to grow bigger quantities on Earth.
Speaker 5: But even there, like the FDA, how would the FDA
Speaker 5: regulate that, there's a whole I guess said of unknown
Speaker 5: like questions there.
Speaker 6: Yeah, FDA is not having any problems with oversight. We
Speaker 6: did that story actually earlier today, having said that, how
Speaker 6: easy is is you duplicate the process of space drug
Speaker 6: or manufacturing drugs in space on Earth? Can we create that,
Speaker 6: recreate that?
Speaker 3: Yeah?
Speaker 5: So the way to think of it with some of
Speaker 5: these drug formulations are trying to make better, like easier
Speaker 5: to use injectable drug formulations. And the way to think
Speaker 5: about that is that there's just like you know, there's
Speaker 5: a million conditions you can put in to get something
Speaker 5: to crystallize, the temperature, the pressure, you know, the concentrations,
Speaker 5: many men conditions you can try almost an infinite number,
Speaker 5: and just things form a little without the microgravity because
Speaker 5: crystals are these kind of slow forming, finicky things, and
Speaker 5: without the convection is one of the things that goes
Speaker 5: away the fluid convections. So and that's reduced and that
Speaker 5: gets better, just gets better quality crystals in many cases.
Speaker 5: And so the way to think about it is they
Speaker 5: get an idea in space like in these better conditions,
Speaker 5: and then once they know what they're looking for, they
Speaker 5: then find you find a way to duplicate that back
Speaker 5: at the factory here on Earth. And that's what Merk
Speaker 5: did with this new formulation of k truda that may
Speaker 5: go into clinical trials.
Speaker 4: Okay, So so Merk seems to be all over this.
Speaker 4: What about other drug manufacturers are you know, is there
Speaker 4: really a race like as often is the case in
Speaker 4: space space or is everybody.
Speaker 2: Else space race?
Speaker 5: So Mark has a competitor in cancer drugs, and that's
Speaker 5: Bristol Myers Squid and they make a rival to k
Speaker 5: tree called Abdivo, and they indeed are putting experiments up
Speaker 5: into space. Look you're looking at protein crystallation, you know,
Speaker 5: and you know they they do say it includes cancer,
Speaker 5: but they won't to say which drugs and are involved.
Speaker 5: But all I can say is they do make a
Speaker 5: direct rival to k truda. So, you know, drug companies,
Speaker 5: you know, historically you know, once one company does something,
Speaker 5: you know the others want to try it out.
Speaker 6: The wait, not like a dry diet drug or anything.
Speaker 5: Yeah, well, so far I've not heard of any diet drugs,
Speaker 5: you know that maiden space. But you know, I'll keep reporting.
Speaker 4: We should make journalism in space, just so are volunteering together.
Speaker 4: I mean, you know, Bob Bob was already going to
Speaker 4: go check it out. So most cost effectively, if incorporated card.
Speaker 2: We'll cover that SpaceX trip.
Speaker 6: Okay, Hey, listen, I hate to be a bummer on
Speaker 6: all of this, but isn't the International Space Station at
Speaker 6: risk of being decommissioned after twenty thirty? So, like does
Speaker 6: that put kind of a damper.
Speaker 7: On all on this?
Speaker 5: Well, there's companies, like you know, there's like private startups
Speaker 5: and core working on like what's after the space station.
Speaker 5: There's one small one, you know, startup that actually has
Speaker 5: like a little satellite that's like a little drug production lab.
Speaker 5: They hope it's going to be a little automated drug
Speaker 5: formulation production lab up there. Now for their first mission,
Speaker 5: they've had some problems getting the reentry capsule back down
Speaker 5: because they need FAA Federal Aviation Administration permission. They haven't
Speaker 5: been able to get it yet. So it illustrates some
Speaker 5: of like you know the potential snags involved in space
Speaker 5: based production.
Speaker 4: Yeah, okay, well we know where Big Pharma is, which
Speaker 4: is the final frontier. You know, I'm curious to see
Speaker 4: if if this is for real though. I mean, like, sure,
Speaker 4: you can make a couple of applications, but scale seems
Speaker 4: maybe not easy to get there. Tim's going to try
Speaker 4: break pads and report back.
Speaker 2: But the payoff is potentially huge here. I mean, if
Speaker 2: you can cure blindness with artificial retinas, Like even though
Speaker 2: Bob says it's a relatively small number of people, I mean,
Speaker 2: people would pay so much for that.
Speaker 3: You need is you know, some micro gravity?
Speaker 1: What's that?
Speaker 3: That's why it's there for you.
Speaker 5: I think the key word we use in the headline
Speaker 5: was that the drug companies are exploring this, you know,
Speaker 5: yeah right, not a donk deal. And you know, I
Speaker 5: think the way to think of it, they're doing experiments
Speaker 5: up there that are going to help help them, you know,
Speaker 5: devise new formulations and new versions of their drugs, but
Speaker 5: it doesn't necessarily I mean those they are actually those
Speaker 5: final drugs are actually going to be produced in space.
Speaker 3: I think we call that the to be sure graph
Speaker 3: or the third word in the headline.
Speaker 6: I'm just going to say thank you, Bob, because I've
Speaker 6: been just saying drugs.
Speaker 3: In space It sounds really cool.
Speaker 6: It does sound really cool. I'm very interesting in terms
Speaker 6: of maybe what we could see down the road. Bub landgread.
Speaker 3: Thank you so much.
Speaker 6: Everything you do is just we learned something and it's
Speaker 6: a fun read and interesting read. Healthcare reporter here at
Speaker 6: Bloomberg News on zoom in San Francisco. He is not
Speaker 6: on the International Space DAG.
Speaker 2: As far as we know, despite the fact that there
Speaker 2: were some Internet connectivity issues. But yeah, never know, really
Speaker 2: really interesting stuff. I'll be the guy who presses the
Speaker 2: button stroll that sounds like it.
Speaker 6: We can fight over it maybe, yeah, exactly what has
Speaker 6: Joe Weber, of course, the editor of Bloomberg Business We
Speaker 6: check this out in an upcoming new issue of Bloomberg
Speaker 6: Business Week. It's also online.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 8: On Bloomberg dot com, the iHeartRadio app, and the Bloomberg
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Speaker 9: Well.
Speaker 6: As the COVID pandemic fades into the past, many things
Speaker 6: have returned to normal, the world of work has not. Companies, employees,
Speaker 6: and governments still figuring out how to adapt to lasting
Speaker 6: changes to corporate life sparked by widespread lockdowns. I put
Speaker 6: millions onto a work from home schedule at stakes. At
Speaker 6: stake really worldwide aren't just norms for office life, but
Speaker 6: really the economic health of big cities as well, particularly
Speaker 6: in the United States. We have a great voice to
Speaker 6: talk to us about what's going on in the workplace environment.
Speaker 2: Yeah, let's checked in with him a little over a
Speaker 2: year ago. It feels like so much has happened, and
Speaker 2: since then, so much has been talked about. One company,
Speaker 2: one person who's at a front seat to all of
Speaker 2: this is the London listed office space provider IWG. We've
Speaker 2: got back with us Mark Dixon, founder, executive director, a
Speaker 2: CEO of IWG. That's International Workplace Group. He's with us
Speaker 2: here in our Bloomberg Interactive Brokers studio. Talk to us
Speaker 2: a little bit about the footprint that you have and
Speaker 2: where else you've traveled.
Speaker 7: US is our biggest market's about it's more than half
Speaker 7: of the business and we've been here for more than
Speaker 7: thirty years in the US, but the growth is now
Speaker 7: really quite dramatic in terms of how we're growing the platform,
Speaker 7: how we're growing the number of buildings we have across
Speaker 7: the country. So I've just come from the Midwest from
Speaker 7: Minnesota where I've been doing site visits. But you know,
Speaker 7: we're growing the business about fifty percent growth rates in
Speaker 7: the US and it's got the place with the highest
Speaker 7: take up of hybrid working and so it's very exciting.
Speaker 7: So invested day tomorrow, but very useful to drop in
Speaker 7: and have a look at what we're doing in the market.
Speaker 6: So mark return to office, work from home hybrid, what's
Speaker 6: winning hybrid?
Speaker 7: So you have to imagine a new world driven by technology.
Speaker 7: So everyone, a lot of the narrative sort of thinks
Speaker 7: that things are going to go back to normal and
Speaker 7: everyone's going to come back to Manhattan. That's not going
Speaker 7: to happen. People want can and want to work at
Speaker 7: places near to where they live. They don't want to commute.
Speaker 7: So the elephant in the room is commuting. It's not
Speaker 7: people are working from offices, they just want to do
Speaker 7: it locally. Hybrid is a combination of work from home,
Speaker 7: work from near to home, and come into someone like
Speaker 7: Manhattan or Chicago once a month, get together with colleagues,
Speaker 7: business reviews, collaborate.
Speaker 2: So what does that mean for a market like New
Speaker 2: York City? For example?
Speaker 7: For New York City, it'll need to reinvent itself. You
Speaker 7: can see it coming back here. It's probably a little
Speaker 7: over a year since I was last in New York City. Yeah,
Speaker 7: I mean it's more vacant. I didn't think it could
Speaker 7: get more vacant.
Speaker 2: You think it's more vacant than a year ago.
Speaker 7: Oh, yes, absolutely. I mean you can see it at
Speaker 7: the retail level, and then you can just got to
Speaker 7: look up in the building. So I mean, look, it's
Speaker 7: my I've been doing this for nearly thirty five years,
Speaker 7: so I can tell looking at buildings where they're occupied
Speaker 7: or not, there's a lot of vacancy, a lot of
Speaker 7: sublet and you know, it's places like New York very
Speaker 7: very difficult places and expensive places, time consuming places to
Speaker 7: commute to for normal workers. So unless you live here,
Speaker 7: it's not convenient, and especially downtown, if you go downtown,
Speaker 7: you've got that double commute. So where you have that,
Speaker 7: it's you know that people don't want to do that.
Speaker 6: It makes complete sense because I feel like for many
Speaker 6: of us who've come back to the pandemic. I like
Speaker 6: being actually back in the office. I'm so tired of
Speaker 6: commuting though. I'm tired of it like you just and
Speaker 6: when you have that break.
Speaker 2: That we done, is you're going to keep doing it.
Speaker 6: Yeah, I'm not giving up my card anymore, my commuting card.
Speaker 6: You work with the likes of or have Disney, Uber, Microsoft,
Speaker 6: black Rocks, Spotify, which got news that it's cutting fifteen
Speaker 6: hundred jobs earlier. We got that news. Disney earlier this
Speaker 6: year began the first round of seven thousand expected job cuts.
Speaker 6: Any of that working its way into less demand for
Speaker 6: what you are doing or help me understand.
Speaker 7: Yeah, more demand.
Speaker 3: You see.
Speaker 7: What's happening is you've got globally pretty much a difficult economy,
Speaker 7: So corporations are looking at ways to be more efficient,
Speaker 7: to get more productivity, to cut cost, so more and
Speaker 7: more of a movement. You have to imagine us as
Speaker 7: providing a platform for work and support of workers. You know,
Speaker 7: at the moment in the US, as an example, we've
Speaker 7: got twelve hundred buildings every state. We're adding six hundred
Speaker 7: buildings next year, So you get this sort of work platform.
Speaker 7: It costs half the price, it's near where your people
Speaker 7: want to be. And we've also do US airport's airside,
Speaker 7: we do railway stations, rest stops. So it's a work
Speaker 7: from anywhere. It's not just office buildings, and the future,
Speaker 7: a technology powered future, is about being productive wherever you are,
Speaker 7: and it's about getting the most overt workforce. And that's
Speaker 7: what companies are looking for today.
Speaker 6: So what kind of indicator are you So if a
Speaker 6: you know what I mean, if a company is looking
Speaker 6: to cut costs and tap into more of you, is
Speaker 6: that just a smart company or is it a company
Speaker 6: feeling squeezed and they're looking to cut like you know
Speaker 6: what I'm trying to it is as soon as they
Speaker 6: need more space, Well.
Speaker 7: How they save money is they have less space. It's
Speaker 7: a bit like Uber. You don't have a car in
Speaker 7: every city you travel to Chicago, you take an Uber
Speaker 7: and you take an Uber when you need it. You
Speaker 7: don't have one city there all the time. And what
Speaker 7: we're doing on our platform, we've got eight million people
Speaker 7: using it. They you know, you one day you're in Chicago,
Speaker 7: the next day you're working from close to home. We
Speaker 7: also support nearly about eight hundred thousand people that work
Speaker 7: from home. We have a whole product range that supports homeworkers.
Speaker 7: So it's you know, it's about a technology powered workplace
Speaker 7: that's available anywhere. Our job is to create productive workplaces
Speaker 7: so that people can do the best work.
Speaker 2: But it's not coworking.
Speaker 7: We do co working offices, we do work from home.
Speaker 7: We do drop in small little things like a phone
Speaker 7: box that you can use in airports. Do your teams.
Speaker 2: How did you watch the bankruptcy if we workplay out?
Speaker 7: Well, it was long, wasn't it.
Speaker 6: I mean it's but they weren't wrong in their concept.
Speaker 7: Absolutely not wrong. They were wrong in their execution.
Speaker 9: Yeah.
Speaker 7: I mean I've been doing this business along. I started
Speaker 7: with one building in Brussels in nineteen eighty nine. We've
Speaker 7: now got just a little over four thousand, and that's
Speaker 7: been pretty much sell funded. We've had very little capital
Speaker 7: put into the business, so we've reinvested capital. They in
Speaker 7: the contrary, you know, they've used a huge amount of
Speaker 7: capital and so it's just a different discipline, right, idea,
Speaker 7: It's all about the execution. This is a detailed and
Speaker 7: difficult operational business, not easy. A lot of people misjudge it.
Speaker 6: How does the business model I'm a bit daft. How
Speaker 6: does the business model work in terms of you because
Speaker 6: you get investor money, or how does it works because
Speaker 6: you don't own because we were getting some perfect kitchen
Speaker 6: you don't own.
Speaker 7: We have a platform so and that platform is a
Speaker 7: digital platform, a sales platform, and we have huge numbers
Speaker 7: of customers sitting on one side of the platform. If
Speaker 7: you own a property, you're an institution, you're a private owner.
Speaker 7: You want to put your property on our platform, you
Speaker 7: can do that and we'll operate it for you. That's
Speaker 7: what we do. So we're working the biggest institutions in
Speaker 7: the world, insurance companies and someone who are putting property
Speaker 7: on the platform so that it's sold in a hybrid way.
Speaker 7: We're the middleman in all of that.
Speaker 6: Get a piece of the business. So you don't care
Speaker 6: if that property isn't rented out completely for the month.
Speaker 6: We do well, you do because you'd make more money.
Speaker 7: Off of it, and we want our partners to be successful,
Speaker 7: so we're very focused on that.
Speaker 2: Do you have any are you in any long term leases?
Speaker 7: We have some, We have almost no long to We
Speaker 7: have leases, but all of them are sure. We we
Speaker 7: option long and we keep them short. Otherwise pretty much
Speaker 7: a year we can get out of anything.
Speaker 6: How has the interest rate environment impacted you?
Speaker 7: If we are where our net debt is small, next
Speaker 7: year it would be about the same as our rebit
Speaker 7: do so about one time bit.
Speaker 6: But any of your customers who have properties, have they
Speaker 6: have you have some of them gone under or because
Speaker 6: of the higher rate, some.
Speaker 7: Of them, a few, very few have gone. But then
Speaker 7: you get special services. We provide cash flow in the building,
Speaker 7: and whoever takes the building, they like our cash flow.
Speaker 2: So we're the areas of the world that you're concerned
Speaker 2: about in terms of economies, economic activity, the consumer.
Speaker 7: I mean, I think there's a not a global squeeze,
Speaker 7: but it's pretty much. I think there's a universal squeeze,
Speaker 7: both on companies and on the consumer. It's pretty widespread.
Speaker 7: I mean, for me, and I've been business for nearly
Speaker 7: fifty years. You know how quickly interest rates came up.
Speaker 7: Has caught everyone you know, unawares, if you like. On
Speaker 7: the one hand, and that's caught businesses that have debt
Speaker 7: and that have taken out that debt obviously at low
Speaker 7: interest rate comes back higher but also the consumer cost
Speaker 7: of living and squeezing them as well. So that's forcing
Speaker 7: companies to take action, whether as you said, whether that's
Speaker 7: cutting people or cutting costs. And that's quite a good
Speaker 7: environment for US.
Speaker 6: Mark just got like twenty seconds left here. So based
Speaker 6: on what you're seeing, what you you are doing, you've
Speaker 6: talked about some some pretty impressive growth, especially with the
Speaker 6: US market recession. Next year, global recess from US recession
Speaker 6: very quickly, I would.
Speaker 7: Say, difficult. Yeah, small recession.
Speaker 6: Difficult year, small recession. That means a lot because you
Speaker 6: definitely have like a front receipta in terms of what
Speaker 6: many companies are doing. Come back, please sooner more than
Speaker 6: one year. Mark Dickson is founder, executive director and CEO
Speaker 6: of IWG International Workplace Group.
Speaker 1: Here in studio, you're listening to the Bloomberg Business Week podcast.
Speaker 1: Catch us live weekday afternoons from three to six Easter
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Speaker 6: Hey everybody to say that a lot has happened since
Speaker 6: we last checked in with our next guest would be
Speaker 6: an understatement.
Speaker 3: Big time.
Speaker 6: Or Levine last joined us earlier this year, before the
Speaker 6: October seventh Hamas attack on Israel area. As you know,
Speaker 6: Many is the co founder, of course, at the navigation
Speaker 6: app Ways, which Google bought for more than one point
Speaker 6: one billion dollars. He was also an investor in move It,
Speaker 6: which then tim Intel bought for a billion dollars.
Speaker 2: Well I spoke to him because of his new book,
Speaker 2: fall in Love with the Problem, Not the Solution, a
Speaker 2: handbook for entrepreneurs. It details his journey and also his
Speaker 2: unique philosophy on what it takes to be a successful innovator.
Speaker 2: He's a graduate from the Tel Aviv University and served
Speaker 2: in the Israeli Army Special Intelligence Unit. He started both
Speaker 2: Ways and move It companies in Israel, which of course
Speaker 2: is currently at war with Hamas in the Gaza strip
Speaker 2: Or he good to have you back here in the
Speaker 2: Bloomberg Interactive Brokers studio. How are you doing?
Speaker 10: It's complicated, right, because it's never going to be the same.
Speaker 10: It's never going to be the same. That was a
Speaker 10: devastating attack. That was you know, my kids are the
Speaker 10: age between twenty two and thirty three. They could have
Speaker 10: been at this party, and there were many days that
Speaker 10: that was my main thought of the day, that I'm
Speaker 10: lucky that they weren't. That was devastating. And I think
Speaker 10: that at the end of the day, if you look
Speaker 10: into the future or you realize that they might be
Speaker 10: a solution, but without Hamas being there, well.
Speaker 6: That's what we think about. We talk a lot about
Speaker 6: the way forward. I've talked to people I feel like
Speaker 6: on both sides, and when I say sides, I don't
Speaker 6: mean on Hamas's side, but I mean on the Palestinian
Speaker 6: point of view, the Israeli point of view, about how
Speaker 6: do we go forward? How do we stop that we
Speaker 6: don't find five years from now, ten years we're still
Speaker 6: talking about conflict in that region. How do you think
Speaker 6: about that?
Speaker 10: So, look, at the end of the day, if you
Speaker 10: think about the Palestinians and Gaza Streep and you ask
Speaker 10: yourself whether or not Tramas was doing any good for them,
Speaker 10: not really, they were doing very good for themselves, but
Speaker 10: not for the people. And look, Israel left the Gaza
Speaker 10: Strip some seventeen eighteen years ago. There was an opportunity
Speaker 10: to build awesome ness there and Ramas to go over
Speaker 10: and basically this is a terrorist organization, right, they are
Speaker 10: only agenda that they have is to kill us, and
Speaker 10: that doesn't work. We guess what we don't want to
Speaker 10: be to get killed. If Ramas is being removed from
Speaker 10: the region, then there are opportunities for something else completely different, right,
Speaker 10: because at the end of the day, most people prefer
Speaker 10: leaving over dying, right, And most of the people in
Speaker 10: the Gaza Strip it's the same for them. The challenge
Speaker 10: is that the leadership of the Haramas is the one
Speaker 10: that is basically enjoying the killing on one hand, and
Speaker 10: the power in particular that they have. And I think
Speaker 10: that once they are being removed, there is an opportunity
Speaker 10: and I see major role of the US, major role
Speaker 10: of US Saudi Arabia helping to recreate something new in
Speaker 10: the Middle East.
Speaker 2: We talk a little bit about that because that's a
Speaker 2: part of the equation that I'm having trouble seeing here
Speaker 2: the solution and what actually happens. And it sounds like
Speaker 2: you think Hamas can be removed from power. So let's
Speaker 2: say Hamas is successfully removed from power in the Gaza Strip,
Speaker 2: what would you like to see happened.
Speaker 10: So again we have to realize that what I would
Speaker 10: like to see has I have zero influence on that,
Speaker 10: or maybe a little bit of influence, but that's about it.
Speaker 10: But I think that the opportunity here is that really
Speaker 10: recreating something new with the support of the American, with
Speaker 10: the support of the Saudist and basically establishing sort of
Speaker 10: normalizations in the relationship. Right now, if you look at
Speaker 10: the history of Israel, every time there was a major crisis,
Speaker 10: two things happened. Number one, as well grew up stronger.
Speaker 10: Number two, we actually figure out a way, a different way.
Speaker 11: Right.
Speaker 10: That's true for the he Pour War back in the
Speaker 10: seventy three, and after that we had a peace with Egypt, right.
Speaker 10: And that's true for World War Two where the Holocaust happened,
Speaker 10: and after that there was a Jewish statement. And so
Speaker 10: at the end of the day, I think that the
Speaker 10: October seventh is such a major crisis that it will
Speaker 10: lead into something else, and you know, hopefully as soon
Speaker 10: as possible. Right, But when is that going to happen?
Speaker 10: We don't know.
Speaker 2: I want to talk economy a little bit, because I
Speaker 2: don't think people understand that when people get called back
Speaker 2: to the military. They leave their jobs to go back
Speaker 2: to the Israeli military. So there's a whole element of
Speaker 2: the Israeli economy that's not working the way that it
Speaker 2: should right now. Are you seeing the effects of that
Speaker 2: day to day that there is a shortage of workers,
Speaker 2: that there are a lot of people who I mean,
Speaker 2: I have friends on Facebook who've posted Israeli as you've said,
Speaker 2: you know, my husband is away fighting right now because
Speaker 2: he got called back. She's a tour operator who does
Speaker 2: restaurant tours for tourists. There's no tourists there right now,
Speaker 2: so she literally they literally have no income coming in
Speaker 2: right now as a result of this.
Speaker 10: So so not exactly, because when you're doing your military reserve,
Speaker 10: you do get from the Social Security the same pay
Speaker 10: that you were government if you were working. But if
Speaker 10: you look at the impact of the war on the economy,
Speaker 10: then then I would say, for a second, obviously budget
Speaker 10: for security and is going to go up dramatic. Then
Speaker 10: that's we all realize the war costs money. Some markets,
Speaker 10: some industries are completely suffering from that, right Like tourism
Speaker 10: right there is there there are no tourists going to Israel,
Speaker 10: right And and I don't blame them, right, they shouldn't.
Speaker 10: It's there is a war there and they don't feel safe.
Speaker 10: And that's all high take industry is actually getting strong
Speaker 10: because what we are realizing is that the people that
Speaker 10: are still there, they are carrying the load for all
Speaker 10: the people that are going on the military or reserve
Speaker 10: and so forth. And what we have seen is that
Speaker 10: the productivity increased dramatically. And when people that will be
Speaker 10: coming back from the military reserve, then we are likely
Speaker 10: to see huge growth in the high tech in general.
Speaker 10: The challenge right now for the high tech, the Israeli
Speaker 10: high tech, that it's harder to raise capital, right, so
Speaker 10: most of the investors will prefer to be on the
Speaker 10: fence and and you know, way to see that the
Speaker 10: war is overright, investing in a war zone people afraid,
Speaker 10: and they rightly.
Speaker 2: So that's interesting to hear because you've also got a
Speaker 2: group of very vocal Americans who are happy to give
Speaker 2: to Israeli causes. And I would think that some of
Speaker 2: those would be supportive of a venture capital. Of course
Speaker 2: they will in the country. They to kind of help
Speaker 2: prop it up time.
Speaker 1: They do, and they will.
Speaker 10: But in general, if you look at the you know,
Speaker 10: non Jewish investors or non engaged investors, then they have
Speaker 10: more challenging time, not all of them, but a lot.
Speaker 6: Or is there anything you've put on hold because that's
Speaker 6: home base for you? Correct Israel?
Speaker 10: Or so I you know, I keep on building. Look,
Speaker 10: I have a very simple life. I have a mission,
Speaker 10: I have a destiny, I have a purpose and this
Speaker 10: is about value creation. And then I can create value
Speaker 10: through multiple ways, through you know, building startups that help people,
Speaker 10: through you know, coaching and mentoring a group of CEOs.
Speaker 10: That of my startups, through teaching and through you know,
Speaker 10: the ultimate way of teaching is the book itself. They're
Speaker 10: falling love with the problem, not the solution. Book is
Speaker 10: by and large, this is sharing my know how with
Speaker 10: people and hopefully make them more successful.
Speaker 2: What's the problem that you see right now that needs
Speaker 2: to be working?
Speaker 10: There are a lot You're picked him exactly, take a pick.
Speaker 10: So the good news is that there are a lot
Speaker 10: of problems. The bad news is that there are a
Speaker 10: lot of problems. Right the end of the day, there
Speaker 10: are a lot of problems. One of the you know,
Speaker 10: major problems that we are addressing recently is actually in
Speaker 10: the US, the realization that most people will not have
Speaker 10: enough saving for retirement, and so Pontera is one of
Speaker 10: the companies that is helping that in the US help
Speaker 10: people to eventually retire richer. And so this is this
Speaker 10: is a big problem at the end of the day
Speaker 10: when people get old and they don't have enough money.
Speaker 10: This is a big problem. So this is one of
Speaker 10: the things that I'm trying to do with my startups.
Speaker 10: And you know, dealing with parking. Parking is a major
Speaker 10: problem right now in generally you would say, wait a minute,
Speaker 10: in the US, it's less of a problem because most
Speaker 10: people live in a single family house and they have
Speaker 10: a driveway and they have parking cars. But the rest
Speaker 10: of the world, most people live in a multifamily houses,
Speaker 10: multi story houses, and they don't have parking garage, and
Speaker 10: then looking for parking at the end of the day's
Speaker 10: a nightmare. And this is you know, my most recent
Speaker 10: startup that we started that a couple of years ago
Speaker 10: and h and it's stealing these well and hopefully it
Speaker 10: will grow to address that because parking is a major problem.
Speaker 2: Yeah, we could use that in Brooklyn.
Speaker 6: Okay, Well, it's something I wonder you know, when I
Speaker 6: think about so much. This year, we've talked about artificial
Speaker 6: intelligence and generative AI, and some are concerned that it's
Speaker 6: going to take jobs away from people. I see it
Speaker 6: more as complimentary. But having said that, I do think
Speaker 6: about job creation in the future because economies, whether it's
Speaker 6: the Gaza Strip, if people have a way to make
Speaker 6: a living and build a much more productive life, or
Speaker 6: whether it's in Israel or whether it's in other developing markets,
Speaker 6: if you can create a better life for yourself, it's
Speaker 6: just a better, more peaceful place, right, even create an economy.
Speaker 6: So are there I don't know. We are we moving
Speaker 6: increasingly towards the world though, where technology is replacing jobs
Speaker 6: at a faster pace than we can make them. Unless
Speaker 6: you're coder, you know, I think that I hear that
Speaker 6: for the last fifty years.
Speaker 10: So even if you think of the revolution of agriculture,
Speaker 10: that we started to have tractors and combine and different
Speaker 10: machinery and everyone said, oh, this is going to take
Speaker 10: away the work of the farmers, and guess what, it didn't. Right,
Speaker 10: So every time that there is an innovation, we tell ourselves, oh,
Speaker 10: this is going to take away all the jobs, and
Speaker 10: then you look at the unemployment rate and it doesn't change,
Speaker 10: or maybe it's becoming better because what happened is that
Speaker 10: that technology by and large increase productivity. And when it
Speaker 10: increased productivity, then we can create more. And when we
Speaker 10: create more, then more people actually have a better life.
Speaker 6: So you're not worried about AI be the end of
Speaker 6: us all.
Speaker 10: Not at all. What I think that we might find
Speaker 10: out that there are some areas that we will need
Speaker 10: to establish regulation. Right, So if I'm speaking with a person,
Speaker 10: then that's one thing, But if I don't know that
Speaker 10: I'm speaking to a machine might be a different thing.
Speaker 10: So maybe the machine will need to identify itself and
Speaker 10: tells me I'm a machine. And and this is something
Speaker 10: that I think that eventually we will need to have.
Speaker 2: Do you think that AI is close as Elon Musk
Speaker 2: believes two becoming smarter than humans?
Speaker 10: No, No, I think that we hear that for the
Speaker 10: last fifty years or computers are going to be smarter
Speaker 10: than people. Oh, we don't need people, We don't need
Speaker 10: the human brain. The human brain something video fifty years ago, right,
Speaker 10: But then you know, end of the day. I think
Speaker 10: that the creativity and the adaptability is something that only
Speaker 10: humans would have and at the end of the day,
Speaker 10: that part is not going to be taking away.
Speaker 12: Now.
Speaker 10: Whether or not you can scan way more information in
Speaker 10: a fraction of the sick and absolutely yes, Whether or
Speaker 10: not you can process some of the things way faster, yes,
Speaker 10: but not the same order of magnitude what the human
Speaker 10: mind can do.
Speaker 6: We've talked about a lot, and obviously it's a very
Speaker 6: stressful world right now. Final thoughts that you want to
Speaker 6: leave our audience as we get ready for a new year.
Speaker 6: So I think that in just about thirty seconds.
Speaker 11: Sorry.
Speaker 10: Value creation, right, value creation when you create value and
Speaker 10: valuate the way you create for others, not for yourself.
Speaker 10: If we think about value creation, then we end up
Speaker 10: with a purpose to a life. And when we end
Speaker 10: up with a purpose to a life, we're going to
Speaker 10: be happier and live longer, and the war is going
Speaker 10: to be a better place.
Speaker 6: Thank you so much than happy new year. Hope the
Speaker 6: new year is a calmer one, more peaceful one, and
Speaker 6: better one way it will be okay or OLIVI, thank
Speaker 6: you so much. We appreciate it. Co founder of Ways
Speaker 6: and so much more. As we talk about we've talked
Speaker 6: about his book fall in Love with the Problem, Not
Speaker 6: the Solution, A handbook for entrepreneurs. Happy New Year.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from three to six Eastern Listen.
Speaker 8: On Bloomberg dot com, the iHeartRadio app and the Bloomberg
Speaker 8: Business app, or watch us live on YouTube with us.
Speaker 2: We got Mark Million, Bloomberg News Technology Editor and also
Speaker 2: the editor of Bloomberg BusinessWeek, Joel Weber, both here in
Speaker 2: our Bloomberg Interactive Broker's studio. This is really cool a
Speaker 2: behind the scenes look at Anderilla, closely held venture capital
Speaker 2: backed company that's competing with the likes of Raytheon.
Speaker 4: Joel Yet and the company had been You're right into
Speaker 4: Oculus and developed Oculus, which now Meta Facebook acquired. Ever
Speaker 4: since then it has been more interested in doing military applications.
Speaker 4: And this roadrunner, which announced on Friday and after they
Speaker 4: had an exclusive look at it, attempts to solve a
Speaker 4: big problem for the US military.
Speaker 3: Mark what is that problem?
Speaker 13: The problem is drones, and so in particular in Iraq
Speaker 13: and Syria, they the militants there have been able to
Speaker 13: import these consumer drones like the kinds that you'd buy
Speaker 13: for the holidays for your kids. They take them apart,
Speaker 13: they attach bombs to them, and they are able to
Speaker 13: assemble so many so cheaply that it's become a huge
Speaker 13: threat to American forces.
Speaker 2: I mean, these are the drones that are essentially being
Speaker 2: used by Ukrainian forces to bomb Russian forces at are
Speaker 2: really low cost.
Speaker 3: And right back at Ukraine.
Speaker 2: Yeah, they're like taping Russia. They're taping bombs to them.
Speaker 13: Yes, that's the example of an ally using it as
Speaker 13: a cheap way to kind of protect themselves in war.
Speaker 13: But it's also a huge threat to American troops, and
Speaker 13: so they've been working on ways to not just be
Speaker 13: able to take out individual drones, but when forces create,
Speaker 13: you know, militants create like what's what they call these
Speaker 13: swarm assaults where there's like a bunch of them all
Speaker 13: coming at at once, you need new technology to take
Speaker 13: it out. So this is one answer to that. It's it's,
Speaker 13: as you said, like almost a miniaturized fighter jet looking
Speaker 13: thing that just goes in and uh and throws a
Speaker 13: missile at these like swarms of drones, tries to take
Speaker 13: them all out, and then it can it can go
Speaker 13: back and it can land and they can load another
Speaker 13: missile onto it and send.
Speaker 4: It back up.
Speaker 3: So how much do we think this technology is actually
Speaker 3: going to cost? Because obviously the cost is the thing here.
Speaker 4: You weaponize a drone, which I can do some holiday
Speaker 4: shopping and acquire many druns. I'm not going to touch
Speaker 4: the bomb part, but I can get the I can
Speaker 4: get the drones, h and I get I get what
Speaker 4: we're going for here. Because ultimately it's like, how can
Speaker 4: the US military bring the cost down with something that
Speaker 4: could be reusable? So so what what kind of budget
Speaker 4: do I need to acquire many of these road runners?
Speaker 13: So traditionally U US military was using Patriot missiles just
Speaker 13: like kind of the default option. Those can run like
Speaker 13: four million dollars a missile. ANDERIL says that they can
Speaker 13: make these these things, these road runners for in the
Speaker 13: low six figures, so you know, one thousand, two hundred
Speaker 13: thousand per unit. So if they can pull it off,
Speaker 13: and to be clear, it's it's a star, it's an
Speaker 13: unproven company, it's startups, not raytheon. So there's there's doubts
Speaker 13: about whether they can pull it off. But if they can,
Speaker 13: the US could save a lot of money.
Speaker 6: All right, so so far, so good in terms of
Speaker 6: how effective it is in terms of trials and testing.
Speaker 14: Yeah, it's very early.
Speaker 13: It's a it's a brand new product. But they say
Speaker 13: the US has ordered a bunch of them and they
Speaker 13: expect them to be in the field next year.
Speaker 3: So who else is attempting to come up with solutions
Speaker 3: in this space?
Speaker 4: Because this is a huge problem, Like I mean, US
Speaker 4: forces around the world just basically, you know, you with
Speaker 4: not that much technology, it becomes a serious problem. And
Speaker 4: like you know, andder All can't be the only one
Speaker 4: looking for looking at this base to provide potential SLA
Speaker 4: and I.
Speaker 6: Have to say reading this story, this is what to me,
Speaker 6: I said, Okay, this is modern warfare, this is war
Speaker 6: going forward, so you really need to have something to
Speaker 6: counter it.
Speaker 3: Yeaheah.
Speaker 13: So the major defense contractors offer options that the USCS,
Speaker 13: and again I mentioned the Patriot missile is kind of
Speaker 13: the default. It's like, you know, tried and tested and
Speaker 13: they know it works. But Andrels is taking this bet
Speaker 13: that they can kind of break into this market with
Speaker 13: a very different option.
Speaker 2: Ashley makes this point a couple times in the story
Speaker 2: that even though this thing the Roadrunner has been unveiled,
Speaker 2: it hasn't yet been manufactured at scale. And if there's
Speaker 2: one thing that we've learned from Tesselas's troubles over the
Speaker 2: last six years or so, manufacturing one or ten of
Speaker 2: something isn't as difficult is manufacturing a large number doing
Speaker 2: this stuff at scale. What did the experts Ashley spoke
Speaker 2: to about scaling this say in terms of challenges here?
Speaker 14: Yeah, you're right, it's hard.
Speaker 13: And it's also not a traditional consumer electronic where you
Speaker 13: can use, you know, factories of China sule.
Speaker 2: You can't buy one of these for the holidays for
Speaker 2: your Family'll try.
Speaker 13: Still, and but yeah, I mean there's always the dark web,
Speaker 13: that's true. The philosophy inside this company has been to
Speaker 13: try to do everything themselves, and so they're building their
Speaker 13: own factory capabilities, their own factory lines to try to
Speaker 13: be able to build the whole thing, uh and do
Speaker 13: it in America, which is kind of what the US
Speaker 13: government would like to see.
Speaker 6: What's really kind of cool, too, is they're not this
Speaker 6: is one thing, and hopefully if they get it up
Speaker 6: and running, this is one thing, but they plan to
Speaker 6: take this technology and spread it across other products.
Speaker 10: Right.
Speaker 13: Yeah, yeah, so ander Old already has a bunch of
Speaker 13: different products that they sell to to the US and allies.
Speaker 13: They do like you know, Century towers, sort of like
Speaker 13: a virtual border wall that the US, their Border Control
Speaker 13: has has purchased. But yeah, they've they've said that they've
Speaker 13: spent these years developing all this new technology and they
Speaker 13: think that it will They haven't gone to specifics, but
Speaker 13: they think it some of it will be useful to
Speaker 13: some of the other products that they're working on.
Speaker 4: Okay, so something about this name strikes me as being
Speaker 4: a little cheeky road redder. What is that a reference to?
Speaker 13: Yeah, so, so Raytheon has a product called Coyote, So
Speaker 13: it's a looney.
Speaker 3: Tunes Raytheon being a competitor of.
Speaker 13: Exactly right, So they're trying to stick it to their
Speaker 13: much bigger rival.
Speaker 4: What is the Coyote other than you know, just trying
Speaker 4: to get the road Runner again and again and again
Speaker 4: and again and never quite being able to it in
Speaker 4: the real world?
Speaker 3: What what is the coyote made by Ratheon.
Speaker 13: Do It's a it's another sort of like autonomous defense
Speaker 13: system that the main innovation that anderil Is is talking
Speaker 13: up with This new product is that it's reusable.
Speaker 4: It can land.
Speaker 13: Like various companies including Androl, have built counter drone products
Speaker 13: that can go and blow up a single drone that's
Speaker 13: flying around. And so the main targets here are swarms
Speaker 13: of drones and being able to reuse them so that
Speaker 13: you're not having to buy a new one every single
Speaker 13: time you take out.
Speaker 6: My understanding too, is it's just one person that's needed
Speaker 6: to kind of actually run it right or operate it
Speaker 6: rather than multiples.
Speaker 14: That's part of the pitch.
Speaker 3: Yeah, yeah, it remains me seen.
Speaker 4: But yeah, they part.
Speaker 13: You know, Androl builds this kind of like software system
Speaker 13: that they call Lattice where you can hook in all
Speaker 13: sorts of different defense products and they're saying, you know
Speaker 13: this will work with that that you can have them
Speaker 13: all kind of communicate wirelessly so you can see where
Speaker 13: all of your different roadrunners are.
Speaker 2: It kind of sounds like the Ring camera system from Amazon,
Speaker 2: but for you know.
Speaker 6: You're obsessed with your Ring camera system right now.
Speaker 4: You just add you know, you add the border wall
Speaker 4: to it. I'll take a couple of drag and drop
Speaker 4: into your car. I'll take a couple you know, road
Speaker 4: runners through man well, the bigger thing an opportunity here
Speaker 4: is obviously the Vince budget gigantic and being able to
Speaker 4: crack it even with something that you know, may only
Speaker 4: cost him the six figures, but around the world at scale,
Speaker 4: if you can manufacture it there, that's that's huge. But
Speaker 4: you know, the bigger challenge here does seem like the
Speaker 4: US military being geared for different wars than we've ever seen.
Speaker 4: And I think you know what, what we witnessed in
Speaker 4: Iraq earlier in the two thousands was that the US
Speaker 4: military was basically ill equipped to fight a certain type
Speaker 4: of war. And you know when obviously Ashley has spent
Speaker 4: a lot of time in this space, but like there
Speaker 4: seems to be a new kind of war that the
Speaker 4: US may not be ready for and we're getting of it.
Speaker 4: What else is Androil maybe developing that could help down
Speaker 4: the line? Do we have any sense of what this
Speaker 4: could look like?
Speaker 13: Yeah, the thing about defense contractors, they don't like to
Speaker 13: talk to they don't like to talk about their weapons
Speaker 13: until they're until they're ready. But but I mean, you've
Speaker 13: raised a really good point about the kind of like
Speaker 13: the new realities of war. One of the one of
Speaker 13: the interesting things and one of the things that Andrel
Speaker 13: was trying to address is this kind of like imbalance
Speaker 13: in the in the economics of the of battling drones.
Speaker 13: Like I said earlier, it's so cheap to assemble like
Speaker 13: large quantities of drones and put bombs on them and
Speaker 13: create some very powerful weapons and high high quantities. As
Speaker 13: it stands now, it's very expensive to take them out.
Speaker 13: And so it would cost so much more to blow
Speaker 13: up these drones than it would cost to create like
Speaker 13: a kamikaze drone that can kind of can blow up
Speaker 13: and harm a lot of soldiers. And so that's something
Speaker 13: that Anderil is trying to address by by focusing on
Speaker 13: costs as one of the main things.
Speaker 2: So I just want to make sure I understand the
Speaker 2: product here that actually got to see.
Speaker 10: It's a.
Speaker 2: Fighter jet type of drone that takes off autonomously, but
Speaker 2: then has a and has an explosive projectile that destroys
Speaker 2: a drone. The explosive projectile obviously not reusable, but the
Speaker 2: part that it's launched from is the part that's.
Speaker 13: Reusable exactly well, so in the current model, it's not
Speaker 13: reasonable once it once it it sends off, it's it's
Speaker 13: missile the boy, I mean, the thing tends to blow
Speaker 13: up and you can't use it again. They say that
Speaker 13: they're close to developing basically a V two that that
Speaker 13: what you did there jet the jet can can be reused.
Speaker 13: So if you send the jet out in the current model,
Speaker 13: you send the jet out, it doesn't see anything that
Speaker 13: it that it needs to blow up. It can come
Speaker 13: back and it can land. That's that's like an innovation.
Speaker 13: It's almost like a tiny SpaceX rocket.
Speaker 6: That's I was thinking, right, it's the whole kind of
Speaker 6: Tesla idea.
Speaker 13: Yeah, and it takes off in the lands and similar
Speaker 13: it takes off vertically and then it kind of turns
Speaker 13: and then flies like a like a jet. And so
Speaker 13: but but they say, you know, the next big invention
Speaker 13: here in the next model will be able to fight,
Speaker 13: like take out a drone and then come back and
Speaker 13: land and you can load it up with another missile.
Speaker 6: It is, though, something we talk so much about disruption
Speaker 6: in so many different spaces, and right it's been these
Speaker 6: major defense contractors that have been so involved. But it's
Speaker 6: really kind of fascinating to see this company just kind
Speaker 6: of coming up potentially with something that would be very
Speaker 6: dramatic and would become, you know, certainly something that governments
Speaker 6: would do.
Speaker 3: What truck record do they have in this space?
Speaker 4: Because this they've been toying around in the military application
Speaker 4: space basically since they got out of the headset one, right.
Speaker 13: Yeah, so they're relatively new. I mean when you compare
Speaker 13: them to the major defense you know, raytheon Boeing like that,
Speaker 13: you know, not they're not super tested, but they they
Speaker 13: started early. Really they're started putting out products early in
Speaker 13: the Trump administration, and they seize on that as like
Speaker 13: their first big opportunity was he was talking a lot
Speaker 13: about the wall, like why don't we sell him a
Speaker 13: virtual border wall?
Speaker 3: And they bought it.
Speaker 13: And so they've like worked on some other products to
Speaker 13: varying degrees of success, but they're really making a lot
Speaker 13: of noise about this one because they see a really
Speaker 13: big opportunity.
Speaker 6: I keep thinking like if this engine is so powerful,
Speaker 6: like do they sell it to Bezos? You know who
Speaker 6: wants to deliver things? Like is there some kind of
Speaker 6: you know, commercial not just defensive commercial application.
Speaker 4: Storied history of starting with military applications and then turning
Speaker 4: finding the commercial finding the commercial application years later but
Speaker 4: I think to their credit they have looked at this
Speaker 4: as like, what is the problem that the US military
Speaker 4: is facing in the field, and how can we perhaps
Speaker 4: protect American soldiers And that goes for allies as well.
Speaker 4: I mean, like we will see where this application ends up,
Speaker 4: because clearly as Ukraine is currently shown and other battlefields
Speaker 4: around the world, like, we will see more and more
Speaker 4: and more drums, and currently those are being used abroad.
Speaker 4: But the technology is scary enough that it can be
Speaker 4: used to really inflect pain everywhere.
Speaker 6: So yeah, first thing got to make sure it works right, Yes, little.
Speaker 2: Good start tested in the desert.
Speaker 14: Okay, not around that all right.
Speaker 6: Note to self, Mark Mirillian, thank you so much. Really
Speaker 6: appreciate you coming in and spend some time with us,
Speaker 6: Bloomberg News Technology editor and of course the editor of
Speaker 6: Bloomberg BusinessWeek, Tel Weber.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from three to six Easter on Bloomberg Radio,
Speaker 1: the Bloomberg Business app, and YouTube. You can also listen
Speaker 1: live on Amazon Alexa from our flagship New York station,
Speaker 1: Just Say Alexa Play Bloomberg eleven thirty.
Speaker 2: Twenty ahead in our second hour of the wee Get
Speaker 2: of Bloomberg BusinessWeek, including a conversation with private equity heavyweight
Speaker 2: Mark Patrickoff on his investment in the sports education company
Speaker 2: IMG Academy. Plus, we'll explore the personal tech and enterprise
Speaker 2: level IT trends to watch for in twenty twenty four
Speaker 2: with Crawford del prehtt of IDC. As you might expect,
Speaker 2: artificial intelligence is high on Crawford's list, and first up
Speaker 2: this hour, we have an executive with a front row
Speaker 2: seat to some of the cutting edge developments in this space.
Speaker 2: Mandy Long is the CEO and a board member at
Speaker 2: Big Bear AI. It's a publicly traded software maker that
Speaker 2: provides AI and machine learning technology to support its customers
Speaker 2: and defense, manufacturing, healthcare, and life sciences. Mandy spoke with
Speaker 2: Carol in Bloomberg News equities reporter Bailey Lipschultz last week.
Speaker 6: Billy, it was interesting to talk to David Weston who
Speaker 6: talked about talking with Larry Summers about a year ago
Speaker 6: and Larry was saying, oh my god, AIAI generated AI.
Speaker 6: And then it was January of this year when Microsoft
Speaker 6: made that ten billion dollar investment. Then all of a
Speaker 6: sudden we were all in it.
Speaker 11: Exactly a year ago. Yesterday I believe was the birth
Speaker 11: of Chad GPS. It just celebrated its first birthday. I
Speaker 11: don't know if you use it. I'd like to a
Speaker 11: little bit play around with it more. Have it explained
Speaker 11: complex topics?
Speaker 14: Yeah, I'd say.
Speaker 4: Write some code.
Speaker 2: Tell it to me like, oh, I wish I could
Speaker 2: do that.
Speaker 6: But it's interesting and I feel like we've all become
Speaker 6: enamored big time with it. We talked about the Microsoft investment.
Speaker 6: It does feel like everything that was connected with AI
Speaker 6: was often running. It became the buzzword on corporate earnings calls.
Speaker 6: Yet Nvidia, it's your top performing name in the S
Speaker 6: and P five hundred, two hundred and twenty percent. They
Speaker 6: make the chips that are needed in the massive amounts
Speaker 6: of calculations. Just today we had syrup Tech. It's a
Speaker 6: startup that makes AI tools to help fashion retailers plan
Speaker 6: and manage their inventory. They raised about seventeen and a
Speaker 6: half million in a funding round. So it's just all
Speaker 6: in on AI.
Speaker 14: There's a lot going on, and it's everywhere.
Speaker 11: I was talking to a banker this morning and she
Speaker 11: was saying that when we think about AI. You can't
Speaker 11: just think about it as generator AVEAI or the chip
Speaker 11: makers the foundations. This is something that every company has
Speaker 11: to have an answer to and investors are asking that
Speaker 11: question because because the way she put it, either.
Speaker 14: Going to be a winner or you're going to be roadkill.
Speaker 6: Right, that's a really interesting and people are building out
Speaker 6: their infrastructure to support it. So our next guest definitely
Speaker 6: all in on AI. Delighted to have with us. Mandy Long,
Speaker 6: CEO and board member at Big Bear AI joining us
Speaker 6: on Zoom in Chicago. Mandy, it is I feel like
Speaker 6: the topic there's two topics this year. It's weight loss,
Speaker 6: drugs and AI, no doubt about it. Tell us about
Speaker 6: what this year has been like for you guys.
Speaker 15: Absolutely, and thank you for having me.
Speaker 16: Yeah, it has been a huge year for AI, and
Speaker 16: in no small part because of the rollout of chat GPT,
Speaker 16: which did celebrate its birthday yesterday.
Speaker 15: I think what it's meant for us, right and Big
Speaker 15: Bar AI. You know, we've been well, we've only been
Speaker 15: a publicly traded company for a couple of years.
Speaker 16: We've been at this for a while and we apply
Speaker 16: artificial intelligence to national security missions.
Speaker 15: Right and enterprises.
Speaker 16: I think something that has been a big catalyst for us,
Speaker 16: and I heard the comments earlier around the fact that
Speaker 16: but it really isn't just about generative AI artificial intelligence
Speaker 16: in general, right in the application of it, particularly the
Speaker 16: operational application of it, right the use in production helping
Speaker 16: people is what has been a big game changer for
Speaker 16: our business, and as we look towards the future, it's
Speaker 16: what makes us incredibly excited about where we're headed.
Speaker 6: You are a small market cap two hundred and eighty
Speaker 6: two million. You've had quite a run this year, Like
Speaker 6: a lot of names in the space, up one hundred
Speaker 6: and sixty seven percent. About fifteen percent of the float
Speaker 6: is shorted, so investors are watching it very carefully considering
Speaker 6: the run up. Dig a little deeper and tell us
Speaker 6: exactly what you guys are doing and who your customers are,
Speaker 6: because from what I understand, it's a lot of the
Speaker 6: US government, if not all.
Speaker 15: Yeah, so our entire business is not all federal government.
Speaker 16: We work about twenty federal agencies, about one hundred and
Speaker 16: sixty commercial customers in the private sector, and how our
Speaker 16: business breaks down is really into three verticals. We do
Speaker 16: work in supply chainel logistics, we do work in cybersecurity,
Speaker 16: and we do work in autonomous systems, and when you
Speaker 16: think about those three markets, there's actually a high degree
Speaker 16: of complementary nature because we're securing supply chains the same
Speaker 16: way that we're introducing autonomous technology, and AI plays a
Speaker 16: role in all three of those. The big difference maker
Speaker 16: for us is that we combine very deep subject matter
Speaker 16: expertise or the vast majority of our employees who are
Speaker 16: supporting our customers come directly from those customer environments, regardless
Speaker 16: of whether it's in the public or private sector, and
Speaker 16: we pair that with a really open architecture approach associated
Speaker 16: with solving customer problems. And when it comes to the
Speaker 16: competitive landscape, where there's still a lot of players who
Speaker 16: live in proprietary, closed system pay me support forever, we
Speaker 16: take a pretty different tactic because for us, it's outcomes.
Speaker 11: Well, Manda, you mentioned competition. How do you view the
Speaker 11: evolution of big bar AI within what still is a
Speaker 11: very much nascent part of the market.
Speaker 16: AI is absolutely still in the early days because the
Speaker 16: difference maker and is going to be you know whether
Speaker 16: or not you can do it in production at scale
Speaker 16: and you can work in an environment that is imperfect
Speaker 16: for us, right, I think because of our roots in
Speaker 16: national security and in working in highly complex and imperfect environments,
Speaker 16: we have a bit of a leg up there, right,
Speaker 16: that causes us to stand out relative to the competition.
Speaker 15: A lot of how we also apply the technology, right.
Speaker 15: I mentioned open architecture before.
Speaker 16: That's a really big tenant of how we operate as
Speaker 16: a business, and I think it plays a big role
Speaker 16: as you start to think about the implications of applying
Speaker 16: AI in production, right, as you start to get into
Speaker 16: those questions of how do you know how do you
Speaker 16: monitor in.
Speaker 15: An ongoing basis? As these technologies mature.
Speaker 6: Andandy, you know what's interesting is the conversation and narrative
Speaker 6: has evolved over the year and everybody getting so excited
Speaker 6: about AI. You know, I laughed, but it truly was.
Speaker 6: On the earnings call, we would just search for AI
Speaker 6: because every CEO is dropping it in to their press
Speaker 6: releases or somehow bringing it up for a while. While
Speaker 6: having said that, help me understand practically, whether it's supply
Speaker 6: chains or cybersecurity or autonomous systems. Give me a for
Speaker 6: instance of what you guys do using advanced AI. Generative
Speaker 6: AI to help a company absolutely.
Speaker 16: So a couple of really specific things that we do.
Speaker 16: One is we have a very mature portfolio and computer
Speaker 16: vision right. So it's an area that I think for
Speaker 16: the technology industry has been somewhat out of reach for
Speaker 16: a long time because you needed the compute.
Speaker 15: We have a solution called arcis Right.
Speaker 16: We're partnered with L three Harris in supporting their autonomous
Speaker 16: surface vessel fleet, so we do the computer vision at
Speaker 16: the edge on those vessels to help with vessel identification, weapons, etc.
Speaker 15: Right.
Speaker 16: Associated with deployments and missions where you're working in really
Speaker 16: disconnected and difficult to process environments, we provide CV there.
Speaker 16: Over on the supply chain side, a really good example
Speaker 16: of our capabilities are associated with what we do from
Speaker 16: predictive analytics. We have a solution that we call Dominate
Speaker 16: that's very focused on geopolitical and macroeconomic forecasting.
Speaker 15: Right.
Speaker 16: That's applied in an environment today, right, incredibly relevant as
Speaker 16: you look at the global landscape and your suppliers who
Speaker 16: are working through very difficult capital deployment decisions associated with
Speaker 16: still having to deliver en product to a customer and
Speaker 16: an environment where you can no longer rely on the
Speaker 16: same turnaround times associated with the assembly process.
Speaker 6: What's interesting is I hear you talk and I'm thinking,
Speaker 6: were you laughing at everybody in January when they're like,
Speaker 6: oh my god?
Speaker 3: AI?
Speaker 6: I mean, we know AI has been around for decades,
Speaker 6: but in terms of this more advanced level, it sounds like,
Speaker 6: I mean, how long have you guys been working on that?
Speaker 6: Although it doesn't like the processing power, right, has been
Speaker 6: a newer thing to kind of take it to another level.
Speaker 6: So I'm just curious connect the dots for me on
Speaker 6: that if you would.
Speaker 16: Yeah, And the answer is no, by the way, in
Speaker 16: terms of whether I was laughing and everyone right, I
Speaker 16: think this year has been a As a technologist, it's
Speaker 16: a it's a liberating year because I've talked about previously,
Speaker 16: you know, this idea that.
Speaker 15: I think AI is the new literacy.
Speaker 5: Right.
Speaker 16: You know, previously literacy for a long time was held
Speaker 16: at a high priest and priestess level.
Speaker 15: It was inaccessible to the masses.
Speaker 16: And what change, right is the idea of literacy empowers
Speaker 16: and liberates people. I think what's happened this year is
Speaker 16: the exact same thing is happening with AI. Right, We've
Speaker 16: democratized the ability to interact with these advanced models in
Speaker 16: a way that it didn't exist right a little over
Speaker 16: twelve months ago. And you know, whether you're talking about
Speaker 16: empowering creativity, right, An example of you know how even
Speaker 16: I use gender tove AI and tools like that is I,
Speaker 16: you know, I play with my kids and I asked them,
Speaker 16: you know, who's the main character and what's our bedtime
Speaker 16: story going to be? And we you know, you work
Speaker 16: with technology to change the way that people can think
Speaker 16: about being creative.
Speaker 15: And I think that for me is you know, it's
Speaker 15: why I love what I do, right. And I think
Speaker 15: that what we're going to.
Speaker 16: See on a go forward basis is that because the
Speaker 16: level of understanding of what is just what is possible
Speaker 16: associated with kind of technology is now becoming more mainstream,
Speaker 16: we're going to see the applications of it become widely
Speaker 16: adopted because it shouldn't be limited to those who can
Speaker 16: speak the technical language, right, It's humanity that's going to
Speaker 16: decide where this goes.
Speaker 11: When you look at Big Barry, I is the growth
Speaker 11: prospect within the private or public sector? Like, what is
Speaker 11: more attractive and where do you see that growth for
Speaker 11: the company?
Speaker 16: The answer is both right, And I would say that
Speaker 16: because what has changed, particularly over the past two years,
Speaker 16: as we've seen massive disruption in the global supply chain
Speaker 16: and we've seen a geopolitical climate right that looks like
Speaker 16: we could be.
Speaker 7: In a.
Speaker 16: New face of a conflict in the coming years. Means
Speaker 16: that both sides of my business are very busy because
Speaker 16: one needs the other, right in order to look into
Speaker 16: the future and be successful.
Speaker 6: We're talking with Mandy Long, CEO and board member at
Speaker 6: Big Bear AI, still with us on Zoom in Chicago. Mandy,
Speaker 6: you were talking about the importance of both the public
Speaker 6: and private worlds in terms of your business going forward.
Speaker 6: Talk to us a little bit more about that, and
Speaker 6: I know you also made a recent acquisition. Tell us
Speaker 6: about that and how that kind of feeds into your
Speaker 6: business and fits into the business growth.
Speaker 16: Absolutely, and I think the best way to break down
Speaker 16: the importance of the relationship between the public and private
Speaker 16: sector side of what we do is that there's an
Speaker 16: incredible amount of collaboration that happens between both sides today
Speaker 16: and I think Big Bear in particular sits.
Speaker 15: At an intersection point between the two of those.
Speaker 16: Right in the private sector side, right, we support with
Speaker 16: a lot of the technology we have in not only
Speaker 16: in the autonomous system side of our business, but also
Speaker 16: supply chains a lot of capabilities that then get delivered
Speaker 16: right into the federal government through those providers. In addition
Speaker 16: to that, we work that we do and for example healthcare,
Speaker 16: I spent fifteen years in healthcare, I was early days
Speaker 16: in machine learning and vision AI. There we do a
Speaker 16: lot of work with hospitals and health systems supporting patient
Speaker 16: flow optimization. Right, So if you have a patient that
Speaker 16: presents inn the ED, how do you make sure that
Speaker 16: you get them to the right place at the right time.
Speaker 16: Those patterns right in the ability to apply advanced technology
Speaker 16: to that means that both sides of our business right
Speaker 16: are growing right and relevant because we're solving problems that
Speaker 16: cross the chasm of both sides. And when we look
Speaker 16: forward to where we're headed, the anticipated acquisition that we
Speaker 16: announced recently with Pangam bolsters our vision AI portfolio. Because
Speaker 16: you heard me talk you know a lot about arcists
Speaker 16: right in the work that we do in horizontal imagery
Speaker 16: right in satellite Pangam has a remarkable portfolio that does
Speaker 16: advanced biometrics right facial you know iris based work and
Speaker 16: it provides a really comprehensive solution that we can bring
Speaker 16: to our customers.
Speaker 11: And Manie kind of balancing though the utilization of technology
Speaker 11: AI streamlining things, helping work in healthcare and better treat people.
Speaker 11: But on the flip side, buying a facial recognition company,
Speaker 11: how does that play into some of the security issues
Speaker 11: and getting customers and consumers kind of on board with that.
Speaker 11: Just given as you mentioned, biometrics is something that's very
Speaker 11: hotly debated.
Speaker 16: It very much is right, and I think it was
Speaker 16: an important strategic decision right and it was not made
Speaker 16: lightly right.
Speaker 15: At Big Bear, we play.
Speaker 16: A very big role and we use our voice very
Speaker 16: openly as it relates to talking about the safety and
Speaker 16: security of AI technology. We're very active right in the
Speaker 16: responsible innovation category, the input associated with how to do
Speaker 16: regulation at scale, and so when we think about the
Speaker 16: use of biometrics, I think one of the things that's
Speaker 16: really important to keep in mind, right is that in
Speaker 16: many ways as a society, we've we've crossed over a
Speaker 16: lot of the chasm associated with putting information out there
Speaker 16: because of.
Speaker 15: The widespread use right and multi year at scale use
Speaker 15: of social media.
Speaker 16: Now from a kind of where we sit on that
Speaker 16: spectrum and the role that we play, right, most of
Speaker 16: the capabilities that when we think about our vision portfolio today,
Speaker 16: where we're very focused on, is not in making autonomous decisions, right,
Speaker 16: it's in helping to distill and provide decision support for
Speaker 16: the ultimate.
Speaker 6: Costomer believe, So you'd be working side by side with
Speaker 6: a human might come up all in terms of one
Speaker 6: of your systems saying hey, here's what we've come up with,
Speaker 6: but you need to look at it and kind of
Speaker 6: make some kind of decisions maybe off of it. Correct,
Speaker 6: because I think what we're human in the loop, because
Speaker 6: I think we get we get worried. You know, our
Speaker 6: David Weston we talked with, who had talked with Henry Kissinger,
Speaker 6: very concerned about AI in war time or in war specifically.
Speaker 6: And I think about the role that you know, you
Speaker 6: guys are going to be. You know they you already
Speaker 6: do work with the government. I mean, what are some
Speaker 6: of the oversights that we need to have though in
Speaker 6: place to make sure that there isn't some kind of
Speaker 6: runaway technology. And I'm not trying to be silly and
Speaker 6: sci fi, but these things could happen.
Speaker 15: It's not an unfair question.
Speaker 16: Yeah, and I think it's you saw in the executive
Speaker 16: order that came out, you know, the top item is
Speaker 16: safety and security of AI technology, and that is not
Speaker 16: for no reason. One of the things that I think
Speaker 16: we have to keep in mind as a society as well,
Speaker 16: is that we have already passed through the gates of
Speaker 16: a human being able to individually manage and provide oversight
Speaker 16: of this kind of technology at scale. We're already an
Speaker 16: augmented species, right. You know, you have I'm sure a
Speaker 16: phone right on you at all times, or a computer
Speaker 16: at home. Leveraging technology to help keep those guardrails in
Speaker 16: place is going to be what's important here because the
Speaker 16: traditional processes in paperwork is not going to get us.
Speaker 11: There many One of the things that played out with
Speaker 11: Opening Eye going too fast too soon. I think back
Speaker 11: to you know, Facebook, with Cambridge Atalytica, there is this
Speaker 11: the government was not kind of in the know and
Speaker 11: regulating these things, and technology companies were able to run rampant.
Speaker 11: How do you balance that because obviously that seemed to
Speaker 11: be playing out at Opening IY with Sam Altman.
Speaker 16: So the rate and pace of innovation today has no
Speaker 16: historical precedent, So I think even looking at those examples, right,
Speaker 16: it's different. Now, look at what has happened with chat
Speaker 16: GPT in terms of adoption over the last year, Right,
Speaker 16: there's nothing like it. So as you think about regulation
Speaker 16: and oversight, you know, I go back to the same
Speaker 16: core issue, which is that I don't think we're going
Speaker 16: to get there without tech regulating tech, and that tech
Speaker 16: needs to be open architecture, right, and it needs to
Speaker 16: include the open source, and it needs to evolve the
Speaker 16: way that these models are going to evolve or you know,
Speaker 16: we could get in trouble, But.
Speaker 6: Aren't you worried a little bit about open source getting
Speaker 6: into the wrong hands?
Speaker 16: There is a philosophical discussion to have around the role
Speaker 16: of open source versus closed source and the relationship between
Speaker 16: the two of them. There is power in the open
Speaker 16: source and the community level of effort associated with the
Speaker 16: oversight of that provides a scale that does not happen
Speaker 16: when you have a closed source system with a tight
Speaker 16: R and D budget.
Speaker 15: I'm a promoter of the open source.
Speaker 16: I think that we're finally getting to the place where
Speaker 16: it's going to become a really relevant part of how
Speaker 16: we operate as a society because of this pace of innovation,
Speaker 16: but it doesn't come without the need to have guardrails.
Speaker 6: Well, listen, this was a really cool conversation and I
Speaker 6: hope you'll come back because guessing in twenty twenty four
Speaker 6: will still be talking about generative AI AI and all
Speaker 6: that it can do, because, as you said, we're really
Speaker 6: kind of early on in this whole process. Thank you
Speaker 6: so much. Have a great week in great holiday season.
Speaker 6: Mandy Long, CEO and board member at Big Bear AI
Speaker 6: Jennings on Zoom in Chicago. We covered a lot, but
Speaker 6: I have like a million more questions.
Speaker 11: I know, I wish we had two more blocks to
Speaker 11: kind of really dig into other things.
Speaker 6: We'll come back to have her back. Are folks, you
Speaker 6: are listening and watching Bloomberg BusinessWeek right here on Bloomberg Radio.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from three to six Eastern Listen.
Speaker 8: On Bloomberg dot com, the iHeartRadio app, and the Bloomberg
Speaker 8: Business app, or watch us live on YouTube.
Speaker 2: So care well, pretty much through earning season, and like
Speaker 2: last quarter one, theme has been clear. It was clear
Speaker 2: today hefn with Mango DB's results. Right, Companies of all
Speaker 2: stripes are embracing AI, and for good reason. Take Wall
Speaker 2: Street for example, Banks using generative AI tools could boost
Speaker 2: their earnings by as much as three hundred and forty
Speaker 2: billion dollars annually through increased productivity. It's a nine to
Speaker 2: fifteen percent increase in operating profits. That's according we should
Speaker 2: knowe to a McKinsey Global Institute report that was published today.
Speaker 2: We know they kind of want you to use AI
Speaker 2: because then you'll hire.
Speaker 6: Them consolutely say yeah, you can look back to day.
Speaker 6: All right, We've got a great guest to give us
Speaker 6: an idea though, of where companies are going to be
Speaker 6: spending money when it comes to it in the new year.
Speaker 6: Crawfordal pret back with, President of the global market intelligence
Speaker 6: firm IDC International Data Corporation, also known as he joins
Speaker 6: us here in our Bloomberg Interactive Broker studio at Bloomberg Headquarters.
Speaker 7: Hello.
Speaker 6: Hello, almost happy new year.
Speaker 12: So great to see you guys, So great to have
Speaker 12: you here.
Speaker 6: How are you thinking about twenty twenty four?
Speaker 12: So when we think about twenty twenty four, it's a
Speaker 12: year of transition for tech twenty twenty three was a
Speaker 12: year that people were extremely concerned about inflation.
Speaker 2: They were extremely concerned about.
Speaker 12: About the impact of inflation on tech. And at the
Speaker 12: end of the day, we'll see tech spending around about
Speaker 12: five percent, which continues the trend that tech is just
Speaker 12: so core to what companies do for next year. This
Speaker 12: five percent for twenty twenty three.
Speaker 2: When you say tech spending, what is the umbrella that
Speaker 2: that covers.
Speaker 12: So think about information technology spending, so everything from devices
Speaker 12: like personal compute devices, all the way through application software,
Speaker 12: all the ways of the partner software, all of it.
Speaker 2: And services, what about.
Speaker 12: Cybersecurity services, securities in there, any any any it and professionals.
Speaker 12: And this is across is across the world, It's across
Speaker 12: it's across all regions.
Speaker 2: I would think it'd be higher five percent a lot.
Speaker 12: Yeah, So five percent we've seen we saw it ramp
Speaker 12: up to double that during COVID when we saw things accelerate.
Speaker 12: But you know, we've seen it bounce in that five
Speaker 12: to eight percent range for It's been pretty range bound
Speaker 12: for for quite some time. If you take out sort
Speaker 12: of the two thousand and eight downturn, if you take
Speaker 12: out the craziness that happened during COVID.
Speaker 6: What kind of growth were we seeing prior to the
Speaker 6: pandemic the year before.
Speaker 12: So prior to the pandemic, like I said, you know,
Speaker 12: we saw that in those years it was about seven percent. Yeah,
Speaker 12: so it was kind of in that range.
Speaker 2: Okay, why why isn't it higher? Why hasn't it grown
Speaker 2: As we've become more reliant on.
Speaker 12: Tech every company, the tech you think about is hot,
Speaker 12: the new hot thing it's and that stuff is growing, right,
Speaker 12: So application software ten percent and we've seen you think
Speaker 12: you think about the cloud thirty percent growth now cooling to.
Speaker 2: So companies are spending less on let's say, a PC
Speaker 2: for every person because they've come down in price. These
Speaker 2: are commodities, and they're spending more on the cybersecurity stuff
Speaker 2: that keeps there.
Speaker 3: So it's actually worse than that.
Speaker 12: If you look at something like twenty twenty three, it
Speaker 12: spending growth in PCs got shalacked. It was down fifteen
Speaker 12: fourteen percent, it was down dramatically. Now PCs are actually
Speaker 12: a thing that moved the needle because every man, woman
Speaker 12: and child needs a PC who needs to be connected
Speaker 12: to the internet, and they spend somewhere between eight to
Speaker 12: twelve hundred dollars on a PC. So as PCs start
Speaker 12: to come back, which we think that they will next year,
Speaker 12: they actually move the needle on it demand. It's not
Speaker 12: uncommon to see them move the needle a couple percentage points.
Speaker 6: Why are they coming back next year?
Speaker 12: They're coming back next year because there's because we saw
Speaker 12: this huge increase during the pandemic, and they start to
Speaker 12: get old, and they start to age and they break
Speaker 12: and people need to start replacing them as well. They'll
Speaker 12: be a Windows eleven upgrade cycle next year, and we'll
Speaker 12: start to see new PCs that actually bring wait for it,
Speaker 12: AI out to the edge, so you see a coprocessor
Speaker 12: which we'll be able to run the AI workloads, and
Speaker 12: we think that will start to fuel by the middle
Speaker 12: of next year another upgrade cycle.
Speaker 6: I am curious because you guys consult you talk with clients.
Speaker 6: What's the constructive conversation to be having around AI right now?
Speaker 6: What are you hearing from those clients.
Speaker 12: I think what customers are starting to get into now
Speaker 12: are what is we're sort of beyond kind of the
Speaker 12: big mind art of the possible, and we're now getting
Speaker 12: into how can I actually apply AI to my business
Speaker 12: and what are the barriers associated with AI. So a
Speaker 12: lot of the axioms that have always applied to tech
Speaker 12: apply here, which is, you know, things like garbage in,
Speaker 12: garbage out. You've got to get your data organized. You've
Speaker 12: got to understand how to structure your data in order
Speaker 12: to make sense and in order to be able to
Speaker 12: synthesize your data in order to make better decisions with
Speaker 12: your data. And so we're spending a lot of time
Speaker 12: talking with customers around the choices they make around their data,
Speaker 12: how they invest in their data, and how they can
Speaker 12: really think about structuring it for a world where they're
Speaker 12: going to be making decisions that they're potentially synthesizing and
Speaker 12: getting output from AI.
Speaker 2: You know, Carol knows this. I've been completely obsessed with
Speaker 2: the sort of two different schools of thought when it
Speaker 2: comes to development of artificial general intelligence AGI, especially in
Speaker 2: the wake of everything that happened at Open AI, Sam Wellman,
Speaker 2: you came on and spoke yes during that crisis, I
Speaker 2: don't know if I could call it a crisis. Actually,
Speaker 2: during the drama, let's call it drama. The thing, Yeah,
Speaker 2: are you you spend you know, you're in this day
Speaker 2: in and day out. Is there any sort of reality
Speaker 2: to the idea that artificial general intelligence is something we
Speaker 2: as a human species should be concerned about?
Speaker 16: Oh?
Speaker 12: Absolutely there is. It's going to take a while for
Speaker 12: us to get to that point. And I think that
Speaker 12: seeing companies start to come together and have a discussion
Speaker 12: around the responsibility and not necessarily doing it after the
Speaker 12: horses have left the proverbial barn is very very important.
Speaker 12: I think we're starting to be able to elevate that
Speaker 12: but that that discussion. But I definitely believe that the
Speaker 12: ability to do harm and the ability to spin people
Speaker 12: up with misinformation, those are things you can just start
Speaker 12: to see on the horizon where we really have to
Speaker 12: think about what is the provenance of that decision or
Speaker 12: of that data. And I think we're going to see
Speaker 12: a lot of that. I think we're going to see
Speaker 12: governments start to require Okay, you've you've been told something,
Speaker 12: but what was the source of that? Where did that
Speaker 12: information come from?
Speaker 6: So much journalism a little bit, no, no, I mean
Speaker 6: a lot of it. Like I used to think about
Speaker 6: when I started, you know this, you had to know
Speaker 6: what the source of the material was right, and whether
Speaker 6: it was a perspective or point of view, so subjective
Speaker 6: versus objective or data points who supplied it. So it's
Speaker 6: kind of interesting to hear you say that, but I
Speaker 6: do wonder what's it going to take Crawford. Are we
Speaker 6: going to be kind of chasing just like we were
Speaker 6: in social media? Like social media?
Speaker 10: Right?
Speaker 3: Where's the yes?
Speaker 12: Sadly, I think companies are going to try to get
Speaker 12: ahead of this. I think governments are going to try
Speaker 12: to get ahead of it, but we are going to
Speaker 12: be chasing it for a long time. I mean, what
Speaker 12: happens when someone can apply AI to a social engineering
Speaker 12: piece of ransomware that works really really well, and I'd
Speaker 12: like to have thirty by tomorrow morning. What happens when
Speaker 12: when someone can say, oh, you know what, if I
Speaker 12: alter the code of that genome, I can create a
Speaker 12: new kind of a virus, and I'd like ten thousand
Speaker 12: by tomorrow. These are the really horrible things that people
Speaker 12: could do with generative AI. To really think about setting
Speaker 12: loose a new generation of malware in a way we're
Speaker 12: not really thinking about chasing.
Speaker 2: But each example that you bring up has a person
Speaker 2: behind it making a decision to actually do that. Yeah,
Speaker 2: what about that science fiction scenario where literally the robots
Speaker 2: become more powerful than us because they can think, because
Speaker 2: they can reason.
Speaker 12: So when you start to get to broad agi, if
Speaker 12: you will, that is a risk where when you're dealing
Speaker 12: with massive amounts of information and the machine starts deciding
Speaker 12: what's right and what's wrong, then you're into that zone
Speaker 12: and you're into that zone of wait, wait a minute,
Speaker 12: what do you mean my credentials don't work because now
Speaker 12: I've been decided that I'm a person who shouldn't be
Speaker 12: included in this place, in the airport, on the plane,
Speaker 12: in some safe place. Make up your science fiction scenario.
Speaker 12: But when you start dealing with huge volumes information and
Speaker 12: instante instantaneously making those kinds of decisions, things get a
Speaker 12: little bit dodgy, isn't.
Speaker 6: It kind of sort of the problem with self driving cars? Right,
Speaker 6: dog on the right, woman with a stroller on the left. Actually,
Speaker 6: how does it determine and someone it's going to hit something? Right?
Speaker 6: How does it make that decision right?
Speaker 12: And so someone has to write that code and get
Speaker 12: to a point where that decision can be made. But
Speaker 12: eventually there's a set of parameters and rules associated with
Speaker 12: decisions like that, and the machine has to decide.
Speaker 6: Are you worried because of warfare? I'm sorry military warfare, of.
Speaker 12: Course, Yeah, I mean absolutely. I mean these are the
Speaker 12: kinds of things that that bad actors can capitalize on,
Speaker 12: and bad actors sometimes get aggregated and it becomes a
Speaker 12: bad nation.
Speaker 6: Think of the Jones story that we did.
Speaker 2: I know, and you know, I go back to the
Speaker 2: Elon Musk conversation that he had at the Deal Book
Speaker 2: summit of the New York Times last week. He said that,
Speaker 2: you know, the government doesn't allow you to build a
Speaker 2: nuclear weapon in your backyard. There are grand rolls and
Speaker 2: rules and regulations. He thinks this is more dangerous than
Speaker 2: a nuclear weapon.
Speaker 12: Yeah, And I think he's jumping ahead a number of steps.
Speaker 12: But I think if you walk back from that putting
Speaker 12: the bullets in one hand and the gun in the other,
Speaker 12: and being able to say, Okay, I'm going to give
Speaker 12: you the tools to load those together and eventually start shooting,
Speaker 12: he's not completely wrong in terms of where you can draw.
Speaker 10: The line to.
Speaker 12: And so I agree that we have to be really
Speaker 12: mindful as governments to think about not letting these circumstances happen,
Speaker 12: and unfortunately, Carol, I'll take the conversation back to something
Speaker 12: that you asked, which is are we going to be
Speaker 12: playing catch up? And I think the answer is, more
Speaker 12: often than not, we are going to be playing catch
Speaker 12: up because the number of situations and the number of
Speaker 12: instances is just so vast and we just don't know
Speaker 12: how why that spectrum can get.
Speaker 6: Do you think the good will outweigh the concern?
Speaker 12: Okay? I believe we are going to go through a
Speaker 12: very very difficult period where work and jobs get redefined,
Speaker 12: and there are a lot of roles and a lot
Speaker 12: of jobs that are going to be threatened by AI.
Speaker 12: Think about the legal profession, think about pair ofalegals, think
Speaker 12: about accountants, think about those kinds of areas. We will
Speaker 12: then invent new jobs that can stand on the shoulders
Speaker 12: of AI, and people will be reskilled and we will
Speaker 12: that will be a great time.
Speaker 6: Who created Way as our co founder, he was kind
Speaker 6: of saying as very similar.
Speaker 12: Absolutely, if there's going to be a period of pain
Speaker 12: associated with AI, that will I think lead to a
Speaker 12: period of tremendous growth.
Speaker 6: But there's also responsibility that comes along with any technology.
Speaker 6: Happy New Year, bewhile proffer del Pratt IDC.
Speaker 15: Thank you, thank you.
Speaker 1: You're listening to the Bloomberg Business Week Podcast. Catch us
Speaker 1: live weekday afternoons from three to six Easter on Bloomberg Radio,
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Speaker 1: Just say Alexa play Bloomberg.
Speaker 6: So excited about our next guest. So much going on,
Speaker 6: as you know, at the intersection of sports, money and education,
Speaker 6: which is why this next story we're going to kind
Speaker 6: of start here is on our radar. It's courtesy of
Speaker 6: Bloomberg'sjillian ten. She reported last week on Patrick Coff Company,
Speaker 6: which works with athletes and entrepreneurs to invest in private equity.
Speaker 6: The company, along with more than fifty of its current
Speaker 6: and former athlete clients, including Philadelphia Eagles center Jason Kelsey.
Speaker 6: And I've heard that name, okay, Jason Swift.
Speaker 14: Oh wait wait? Can I say that cool? That's the
Speaker 14: cool one.
Speaker 6: You are hearing the voice of Mark Patrick Coff, founder
Speaker 6: and CEO of Patrick Cough Company. Joenning us here in
Speaker 6: her Bloomberg Interactive Broker Studio. Just you know, you're here
Speaker 6: for the next sixty minutes. No, I'm just next time.
Speaker 6: You're going to be here for the next are you.
Speaker 14: Well, we love an opt in choice, not you have
Speaker 14: to go do this choice.
Speaker 6: Well, we love having you. First of all, tell us
Speaker 6: about this deal. I am G academy. I wasn't that familiar.
Speaker 6: Did kind of a deep but tell me what you
Speaker 6: guys are doing.
Speaker 14: But you loved tennis though years ago I loved gymnastics
Speaker 14: was a little bit less. But with relevant IMG they
Speaker 14: haveppened gymnastics.
Speaker 17: But I remember when I was in high school, I
Speaker 17: had friends who, if they were really good tennis players,
Speaker 17: all they wanted to do was go to Nick Boltary
Speaker 17: in Tampa.
Speaker 14: And that is IMG Academy, by the way. So that evolved.
Speaker 14: Ultimately IMG acquired voluntary changed the name, and it's always
Speaker 14: been the pre eminent place for in some cases privilege.
Speaker 14: But as it's changed for under privilege.
Speaker 2: I mean, I guess he didn't I guess he didn't
Speaker 2: pay a time to.
Speaker 14: Yeah, exactly. So, so on one hand, you kind of
Speaker 14: knew the brand.
Speaker 17: I did a lot of investment banking work for IMG
Speaker 17: when they were an independent agency. When Endeavor bought them.
Speaker 17: I stayed in close touch with IMG Mumbatala invested.
Speaker 14: At the time.
Speaker 17: I was involved in that transaction and one of the
Speaker 17: heads of the head of corp David and devver Got
Speaker 17: named Brent Richard, who was an old friend of mine.
Speaker 17: We've been on the opposite side of a couple of
Speaker 17: different banking deals. Ended up as part of his role
Speaker 17: and endeavor taking over this acquisition they had done with
Speaker 17: IMG and focusing on the academy and seeing a really
Speaker 17: big vision for for private education, democratizing I think access
Speaker 17: to the best coaching.
Speaker 2: Well, yeah, I just wanted to jump in just because
Speaker 2: when you talk Politaria, I did. It's funny we did
Speaker 2: the US Open this year, got super into tennis again.
Speaker 2: Read Agasy's book. He talks about his experience at Politary.
Speaker 2: One thing that he made hate, Oh yeah, more hate
Speaker 2: than love for sure. Actually it's totally worth and Politary
Speaker 2: for years was his coach. But one thing that he
Speaker 2: talked about was academics and and that's that's you know,
Speaker 2: in my experience too with growing up in California and
Speaker 2: seeing other tennis academies, the tennis was great, academics were lacking.
Speaker 2: Talk to me a little bit.
Speaker 17: About Yeah, I will I'm sorry to interrupt you. I
Speaker 17: will do a little plug here, but it'll make sense
Speaker 17: for a second. I've been the chairman of the board
Speaker 17: of a charity in New York called New Heights Youth
Speaker 17: and it's a basketball related charity. But we use academics
Speaker 17: as a benefit for getting good coaching.
Speaker 14: So we've sort of said, look, if you can.
Speaker 17: Be part of a team, if you can consistently commit
Speaker 17: to what's required beyond a team, you can do the
Speaker 17: same thing in the classroom.
Speaker 14: So if you want our coaching, we're going to give you.
Speaker 17: We're going to force you into after school programs, SAT prep, college,
Speaker 17: you know, admissions process, you know help. So IMG has
Speaker 17: done that at a much greater scale in the for
Speaker 17: profit ways. So, yes, academics is a story here today.
Speaker 17: Athletics is what has always been what people talked about,
Speaker 17: but it's the combination of the two that is really
Speaker 17: what's interesting here. So using sports as a hook to
Speaker 17: bring in kids either underprivileged or privileged, put them into
Speaker 17: the right types of programs to professionalize in their minds,
Speaker 17: how they take advantage of this physical skill they have
Speaker 17: off the court, off the field, and to have better, bigger,
Speaker 17: more fulfilling lives because of it. And there's proof points
Speaker 17: across the globe. So when IMG sold you know itself,
Speaker 17: Endeavor sold IMG Academy at EQT, the and NOORDA and GLA,
Speaker 17: the opportunity was here to globalize a really interesting methodology
Speaker 17: that has changed people's lives for many, many years.
Speaker 14: And Andre is a good example.
Speaker 17: He probably wouldn't be the Andre Weovius Williams in the
Speaker 17: long list of people who have created discipline their lives,
Speaker 17: learned how to exercise one muscle. If they can do
Speaker 17: that successfully, realize they can exercise their intellectual muscles too.
Speaker 17: And IMG is a really phenomenal, i think academic process
Speaker 17: to do that.
Speaker 6: And the asception isn't that everybody's going to become this
Speaker 6: big professional play.
Speaker 14: It's very few make it to the kind of like.
Speaker 6: A great finishing boarding school, right of course.
Speaker 17: I mean it's one way of looking at I mean
Speaker 17: at New Heights IMG two. If five percent of these
Speaker 17: kids go and play some level professional sports. Remember professional sports,
Speaker 17: you know, take basketball isn't just the NBA.
Speaker 14: There's leagues in Italy and.
Speaker 17: France and Greece and Israel and many other places Brazil,
Speaker 17: great players coming from all over the world. Now, So
Speaker 17: that's the other opportunity here with I Academy and why
Speaker 17: they chose EQT and why we could be helpful is
Speaker 17: there's a real opportunity to globalize this.
Speaker 6: You know, speaking of globalization, there's so many places I
Speaker 6: want to go with you, PGA and live they're supposed to.
Speaker 6: I think there's a deadline at the end of this
Speaker 6: year for this merger.
Speaker 14: I think we talked about it this spring as if
Speaker 14: it was a done deal already.
Speaker 6: It's coming or it's expected to. What do you think
Speaker 6: happens next?
Speaker 14: You know, I don't know. I mean it's very hard
Speaker 14: to say. I think it's this is a good thing absolutely.
Speaker 17: Look, I think anytime people have an opportunity to be
Speaker 17: paid fairly for their talent.
Speaker 14: Is a good thing.
Speaker 17: So if it's one league, clearly you know that caps
Speaker 17: to some extent what someone can make. I think competition
Speaker 17: ultimately is a good thing. I think the way it's
Speaker 17: been managed has been quite poor.
Speaker 14: I'm really pretty certain that the JP Morgan's of the
Speaker 14: world who happened on you know here just in full
Speaker 14: disclosure of twenty percent of my business.
Speaker 17: Yeah, but who are the bigges sponsors of the US Open,
Speaker 17: for example, I'm sure they were, And by the way,
Speaker 17: the Masters and other things like that, I'm sure they'd
Speaker 17: allowed voice when this fell upon us in the spring. So,
Speaker 17: you know, I think it's a good thing if it helps,
Speaker 17: you know, you know, democratize golf, so more people play golf,
Speaker 17: more people see golf, more people attend golf tournaments. I
Speaker 17: mean it's been for the privileged few who get to
Speaker 17: go to see the Masters or go, you know, watch
Speaker 17: any of these tournaments.
Speaker 14: And I hope something good comes of it.
Speaker 17: I mean, I think TQL is interesting, which is the
Speaker 17: new Indoor League right, see if that that got Scott delayed,
Speaker 17: you know, it's it's an interesting way to take a
Speaker 17: sport that's been for very few people who could afford it.
Speaker 17: So if LIVE and PG come together, you have to
Speaker 17: see what that means.
Speaker 14: TBD.
Speaker 6: Yeah, Hey, listen, we've only got a couple of minutes,
Speaker 6: so you've got to already promise to come back really soon.
Speaker 6: But two minutes. The world's pretty stressful, to say the least.
Speaker 6: And who'd have thought, like just kind of this year,
Speaker 6: the stuff that we were talking about seeing living athletes,
Speaker 6: what's their role in all of this? And we're getting
Speaker 6: ready for a really important presidential election in the United States,
Speaker 6: what's their role or should be their role? Where you
Speaker 6: know it can backfire in an instant.
Speaker 3: Used to be.
Speaker 17: I think in the locker rooms of the old days,
Speaker 17: you didn't talk about money, you didn't talk about sex,
Speaker 17: and you didn't talk about politics. I think in the
Speaker 17: last cycle of professional sports, where these kids are seeing
Speaker 17: the world in a very different way, they're learning more
Speaker 17: by accident or intentionally at a much younger age.
Speaker 14: They are forming opinions, they're realizing the power of their brains.
Speaker 17: Back to IMG Academy and I speak to athletes most
Speaker 17: cases seven days a week.
Speaker 14: They'll bring up, what do you think is going to
Speaker 14: happen next November? I don't like this candidate, I do
Speaker 14: like that candidate.
Speaker 17: And they're starting to understand that if they decide to
Speaker 17: amplify a point of view that's well informed, that could
Speaker 17: be influential. I mean not to make it about diversity,
Speaker 17: but you think about Obama and Oprah and the impact
Speaker 17: she had the Number one I'm going to use this
Speaker 17: example because it's kind of off point for the US
Speaker 17: but the number one cricket player in India has two
Speaker 17: hundred and fifty million Instagram followers. I don't have offhand
Speaker 17: how many Instagram followers Joe Burrow has or Kyrie Irving
Speaker 17: or but you saw what Kyrie Irving did last fall.
Speaker 17: They can make a difference. And if athlete A doesn't
Speaker 17: want to see Donald Trump become president, he or she
Speaker 17: has a voice, and I think you're going to see
Speaker 17: a willingness that you did not see in the past
Speaker 17: other than from a very select few to use.
Speaker 1: That voice to.
Speaker 17: I think a positive event. And any opinion is a
Speaker 17: good opinion. I would say that about athletes and you know,
Speaker 17: just have an opinion. I don't care whether you go
Speaker 17: left or right or do this deal, don't do this deal.
Speaker 17: I just want you to have an opinion. So we
Speaker 17: say that a lot of them about politics. How an opinion,
Speaker 17: it matters. It's going to affect your lives.
Speaker 6: As I said, promise to come back soon because we'll
Speaker 6: do more. We will obviously. Mark patrick Hoff, president and
Speaker 6: CEO of Patrickcoff Company, joining us here in studio.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: Live weekday afternoons from three to six Eastern Listen.
Speaker 8: On Bloomberg dot com, the iHeartRadio app, and the Bloomberg
Speaker 8: Business app, or watch us live on YouTube.
Speaker 2: She's the founder and CEO of a consulting firm that's
Speaker 2: worked with the likes of Northorpe, Grumman, Lockheed Martin, the SEC,
Speaker 2: the US Army, US Marine Corps, Booz, Allen Hamilton, and more,
Speaker 2: including Harvard and Howard Universities. The company's name, KUSSY is
Speaker 2: an acronym for knowledge, Understanding, strategy and Implementation, and in
Speaker 2: the company's own words, is quote committed to transforming, inspiring
Speaker 2: and cultivating leaders around the world.
Speaker 6: So let's get to it. Her new book is The
Speaker 6: Power of Conscious Connection for Habits to transform.
Speaker 8: How you live and lead.
Speaker 6: We have with us Talia Fox. She's the chief executive
Speaker 6: officer of the consultancy Cousy Global and a fellow at
Speaker 6: Harvard University. Talia, nice to have you here with us.
Speaker 6: You know, we're talking about Charlie Munger, quite a leader
Speaker 6: and someone who also kind of seemed to live to
Speaker 6: the fullest and was very honest and transparent about his views.
Speaker 6: Tell us a little bit about how you are thinking
Speaker 6: about how people can transform how they live and lead.
Speaker 15: Yeah, you know, it's amazing.
Speaker 9: With his death, he almost reached one hundred years old.
Speaker 9: And what you were describing about all of the giving
Speaker 9: that he did with his time here. That is what
Speaker 9: conscious connection is about. It's about being conscious of what's
Speaker 9: happening in the world and the needs and being connected
Speaker 9: to the power that you have to change it. And
Speaker 9: that power can look different from many different people.
Speaker 2: So let's think about I want to think about your
Speaker 2: own journey as a leader, because you started this consultancy
Speaker 2: quite a few years ago and you work with companies
Speaker 2: to help cultivate leaders. And it's not just companies that
Speaker 2: you work with, but you also offer these online learning modules.
Speaker 2: Can you talk a little bit about your own journey
Speaker 2: as a leader, because when I speak to people who
Speaker 2: do this type of work, I always want to get
Speaker 2: an understanding of Okay, well, how do they develop themselves
Speaker 2: into somebody who can actually teach these skills.
Speaker 3: Yeah.
Speaker 9: So my background is in psychology, so I really studied.
Speaker 9: I started off in nonprofit studying the impact that leadership
Speaker 9: has on real lives, and I started doing keynotes speaking
Speaker 9: events for nonprofit organizations. But I was very connected to
Speaker 9: the fact that leadership decisions impact. I was able to
Speaker 9: look into children's eyes and see the impact of leadership decisions.
Speaker 9: I've had quite an interesting journey of being a single mom,
Speaker 9: of having to really find my way and study what
Speaker 9: matters and what makes a difference in achievement. And so
Speaker 9: I've read literally hundreds of books, and I have been
Speaker 9: on a hunt for my entire twenty year career, twenty
Speaker 9: plus years finding out what are those core ideas, what
Speaker 9: are those core things that really make a difference in
Speaker 9: how we live and lead. And that is really what
Speaker 9: this book is about. I'm sharing those stories, the stories
Speaker 9: of achievement and the hack that I call it to
Speaker 9: a great leadership and a great life.
Speaker 6: So let's get to the four habits. So talk to us,
Speaker 6: walk us through them, if you will.
Speaker 9: So it's very interesting because the four habits make up
Speaker 9: the acronym love. But that absolutely was a beautiful coincidence.
Speaker 1: So the four.
Speaker 9: Habits are listening, observe, value, and engage, And each of
Speaker 9: these habits is connected to a leadership skill that we
Speaker 9: want to master. So listening is connected to emotional intelligence
Speaker 9: that's very critical for our success. And so I outline
Speaker 9: in the book how to do that. Observation is connected
Speaker 9: to systems thinking. This opportunity to be to see patterns
Speaker 9: and to understand how interdependent we are. Values is connected
Speaker 9: to cultural competence, our capacity to value people, to value
Speaker 9: connection to value differences, to really be able to see
Speaker 9: all the big issues happening in the world and understand
Speaker 9: how adapt how to adapt our world views to those
Speaker 9: and then lastly engage the real critical key value, particularly
Speaker 9: in the world we are in today, is to be
Speaker 9: able to communicate in such a way that connects instead
Speaker 9: of divides, and so that habit makes up the acronym love,
Speaker 9: which I don't know my Department of Defense folks on
Speaker 9: how I feel about that acronym. I was actually cringing
Speaker 9: at how fluffy it was. But when I saw it
Speaker 9: right there, I said, oh, it makes up love. I
Speaker 9: wasn't going to shy away from it, and so we're
Speaker 9: sticking to it. So we'll see if leaders can handle
Speaker 9: the experience of that being so conscious connected in their strategy.
Speaker 2: It's so funny because you know, you do work with
Speaker 2: clients like the Department of Defense, the US Army, of
Speaker 2: the US Marine Corps. What's the reaction to the folks
Speaker 2: when you share with them this methodology.
Speaker 9: Well, our our firm kusai kusi knowledge as you've shared
Speaker 9: understanding strategy implementation that is real. That has been the
Speaker 9: strategic approach that we use when we go and do
Speaker 9: culture transformation projects. So this book I wrote not only
Speaker 9: for my clients but also for it's for the people,
Speaker 9: and so it's really about on an individual level and
Speaker 9: on a leadership level, what are those habits that we
Speaker 9: need to master on a regular basis, on a daily
Speaker 9: basis to impact change.
Speaker 6: Talia. You know, we talk with leaders all the time,
Speaker 6: you know, And I'm curious about when you're working with
Speaker 6: the defense contractors do a lot of government work, it
Speaker 6: looks like consultants university. I mean, what is it that
Speaker 6: people often come to you and say, Okay, here's we've
Speaker 6: got this situation, here's what's wrong, or here's what's wrong
Speaker 6: with our leadership?
Speaker 3: Like help us? Or do they not even know?
Speaker 9: What's interesting is that, you know, I really wish that
Speaker 9: people would be more pulled by purpose as opposed to
Speaker 9: push by stress. But typically when people do come to Kusai,
Speaker 9: there's something happening in the news, there's a you know,
Speaker 9: racial issues, social issues, political issues, and you're seeing a
Speaker 9: huge divide or even bleeding out executives. You're seeing problem,
Speaker 9: serious problems. We actually call it a culture shot. They
Speaker 9: need to be triaged if you will, to get the
Speaker 9: culture back on board. You've got a lot of conflict.
Speaker 9: People aren't talking to each other. That's when people say, okay,
Speaker 9: who do you go to? You go to Kusai for
Speaker 9: those kinds of challenges, and we really come in with
Speaker 9: sort of skills and systems to support in a full
Speaker 9: scale culture transformation.
Speaker 2: So what are the issues right now that the companies
Speaker 2: that are coming to you right now are telling you
Speaker 2: that they're facing.
Speaker 9: So right now we're dealing, of course with a lot
Speaker 9: of diversity, equity and inclusion issues, particularly around conversations about politics,
Speaker 9: conversations that are really highly tense, and so there is
Speaker 9: this opportunity. I mean, in the government, they have an
Speaker 9: act in a law that you're not supposed to talk
Speaker 9: about these things. But people know their social media and
Speaker 9: so one of the things that we're doing is how
Speaker 9: do you have these difficult conversations, how do you see
Speaker 9: authentic without having to get into the weeds of what's
Speaker 9: actually happening in the world. So how do you build
Speaker 9: those relationships in a way that feels professional but that
Speaker 9: also feels authentic.
Speaker 6: Well, I'm curious. I'm glad you went there because it's fascinating.
Speaker 6: We have conversations, and I feel like they certainly picked
Speaker 6: up momentum when it comes to diversity inclusion coming off
Speaker 6: of the pandemic, coming off of George Floyd. It's amazing
Speaker 6: how here we are, how many years out from that,
Speaker 6: how many years before that that we were having those conversations,
Speaker 6: and yet we still have a problem.
Speaker 10: I don't know.
Speaker 6: You talk with leaders, you work with companies. What is
Speaker 6: the fix so that we don't have to have the
Speaker 6: conversation anymore? Because it just is.
Speaker 9: I don't think that it's a fix. I think it's
Speaker 9: actually almost like hygiene, cultural hygiene. I love that you
Speaker 9: have new people coming into an organization. This is something
Speaker 9: where where people we have feelings, we have triggers, we
Speaker 9: have experiences, we have life, and so we really need
Speaker 9: to treat it as a constant opportunity to create space,
Speaker 9: to be able to build this environment where people are
Speaker 9: committed to innovation, committed to growth, committed to being their
Speaker 9: best selves. But in order to do that, the soil
Speaker 9: has to be We have some very specific communication strategies
Speaker 9: and ways that this culture operates, and we need to
Speaker 9: make sure that everyone is on the same page. I
Speaker 9: kind of like to use the very plain language of
Speaker 9: in this house, this is how we behave in this house.
Speaker 9: This is how we talk to each other, and that's
Speaker 9: that's the corporate speak. This is what we do here together,
Speaker 9: and this is how we have these kinds of conversations
Speaker 9: and connect and deal with each other.
Speaker 6: Corporate hygiene. Is that what you said?
Speaker 14: Yes, I like that.
Speaker 3: I like that right.
Speaker 6: It's just it just is like you do it because
Speaker 6: you're yeah, you have to. You should be gotta brush
Speaker 6: your teeth.
Speaker 9: You gotta brush your teeth act and using that analogy,
Speaker 9: the more you keep brushing your teeth, you have less cavities,
Speaker 9: less paces. You know, I don't want to be going
Speaker 9: on a wonderful trip somewhere and you have to go
Speaker 9: get a root canal. But that's what organizations are dealing
Speaker 9: with right now. I will tell you if I was
Speaker 9: leading in any large organization, I would not lead a
Speaker 9: team that has not been trained on how to manage
Speaker 9: and communicate. I think in this day and age, it's
Speaker 9: almost like not having a way upsider people not being
Speaker 9: able to use a computer.
Speaker 6: It's a great way, but it's a great way of
Speaker 6: thinking about It's a different mindset and I think that's
Speaker 6: really important in terms of changing ultimately the outcome. Tell
Speaker 6: you Fox, thank you so much, Chief executive Officer, the
Speaker 6: consultancy Kusai Global, A fellow at Harvard and CURSS. Our
Speaker 6: book is the Power of Conscious Connections for habits to
Speaker 6: transform how you live and lead. This is the.
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