Speaker 1: From the heart of where innovation, money and power collive
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay. I'm Emily Jack in San Francisco, and this
Speaker 1: is Bloomberg Technology coming up in the next hour. Temporarily
Speaker 1: on hold, Elon Musk creates chaos with early morning tweets
Speaker 1: causing confusion over his deal to buy Twitter. The company's
Speaker 1: current CEO speaks up. We will talk to a founding
Speaker 1: member of the early Twitter team about where this chaos
Speaker 1: is headed. Plus Reid Hoffman joins me for a wide
Speaker 1: ranging conversation about just where this chaotic market cycle is
Speaker 1: headed and what it all means for startups, Plus his
Speaker 1: thoughts on of course Twitter and his former colleague Elon
Speaker 1: and two hundred billion dollars wiped off the crypto market
Speaker 1: since it started the sell off, Just how cold little
Speaker 1: is crypto winter get and how long will it last? Well,
Speaker 1: The back and forth from Musk continuing as we said
Speaker 1: early Friday, he tweets the Twitter deal is temporarily on whole,
Speaker 1: but as Blue Bloomberg opinions, Matt Levin points out, that's
Speaker 1: not actually a thing. He says, Musk signed a binding
Speaker 1: contract that doesn't allow him to just walk away even
Speaker 1: if it turns out that spam accounts do represent more
Speaker 1: than five percent of Twitter users, Musk later saying he's
Speaker 1: still committed to the deal, but it's all casting doubt
Speaker 1: on what actually happens to Twitter. For more on this,
Speaker 1: I'm joined by Jason Goldman. He was part of Twitter's
Speaker 1: founding team, a board member from two thousand seven, and
Speaker 1: also the White House Chief Digital Officer under President Obama. So, Jason,
Speaker 1: you did not mince words about this in your tweets,
Speaker 1: and to put it in words appropriate for our television audiences,
Speaker 1: you say, either way, Twitter faces a not good out come.
Speaker 1: Why Well, because either Ellen is going to acquire the
Speaker 1: company and he's shown to be how un serious he
Speaker 1: is about the whole proposition and his ideas of our
Speaker 1: when he wants to do with it or un serious,
Speaker 1: or he walks away from the deal, which is basically
Speaker 1: a one sided option that he holds at this point. Uh,
Speaker 1: and the company has left in a situation that is
Speaker 1: increasingly chaotic and difficult for them to manage. How big
Speaker 1: is the bot problem? Really? Though? I mean, does Ellen
Speaker 1: have a point? No, he doesn't have a point. It's
Speaker 1: not a serious point, like I think it's fine to
Speaker 1: report that that's the reason he said the deal was
Speaker 1: on hold, which is, as Matt Levin points out, isn't
Speaker 1: a real thing. The bot thing isn't a real thing either.
Speaker 1: He we we don't have to look very far to
Speaker 1: prove that. We know that's not the real reason for
Speaker 1: what's going on here, because on April Ellen said, if
Speaker 1: our Twitter bid succeeds, we will defeat the spam bots
Speaker 1: or die trying. He set himself up to say that
Speaker 1: he was going to take on this big bot challenge,
Speaker 1: which I don't think is a significant problem, and now
Speaker 1: he's saying the exact opposite, which is, well, I'm just
Speaker 1: going to not try at all to deal with the bots,
Speaker 1: you tweeted. We went through a lot of episodes of
Speaker 1: soul crushing drama in the early days, a lot of
Speaker 1: itself inflicted. But this really has to be the worst ever,
Speaker 1: And I'm sorry for all the folks at the company
Speaker 1: who are somehow expected to just do a job through
Speaker 1: this mess. We know that a couple of Twitter executives
Speaker 1: were let go yesterday. The company now has a hiring freeze.
Speaker 1: They're trying to cut costs, they might rescind some offers.
Speaker 1: What's it like being a Twitter employee right now? Well, yeah,
Speaker 1: I mean the rescind offers is a very serious step, right.
Speaker 1: I mean, that's people who have accepted a deal with Twitter,
Speaker 1: turned down other offers potentially, and now being told they
Speaker 1: don't have a job, and to be told there's a
Speaker 1: hiring freeze and you're letting go top executives. That's why
Speaker 1: Ellen walking away from the deal is also quite bad
Speaker 1: for the company, because you're now talking about a company
Speaker 1: that not only has hamstrung itself in terms of its
Speaker 1: hiring and sent a mixed message employees about what the
Speaker 1: future is, but you're also dealing with a situa wation
Speaker 1: where the board of the company has said, we don't
Speaker 1: have any better ideas than selling to Ellen in terms
Speaker 1: of what the future should hold. So it's just put
Speaker 1: it the company in this very precarious death spiral. Now, Praagle,
Speaker 1: the curren CEO of Twitter, took some responsibility for the
Speaker 1: changes that he's making. He said he's not doing this
Speaker 1: because you know he's a lame duck CEO, or just
Speaker 1: to keep the lights on, but he's thinking about the
Speaker 1: health of Twitter's business and preparing for all scenarios. What
Speaker 1: do you think that means? Do you think if Elon
Speaker 1: Musk wasn't supposedly buying the company in a matter of months,
Speaker 1: that he'd be doing this, right? I mean, I think
Speaker 1: that's what prog has to say, and and it is
Speaker 1: his prerogative to have the executive team around him, even
Speaker 1: if it's for a short period of time. Uh. And
Speaker 1: you know, I give Prag a lot of credit because
Speaker 1: comments are a leaked from the town hall a while ago, said,
Speaker 1: you know, I've only been on this job for months,
Speaker 1: but I've been at the company for a decade, and yes,
Speaker 1: we could have done better to avoid this sale. Unlike
Speaker 1: a lot of other people on the board or or
Speaker 1: Jack the founder, who said this is the only way out,
Speaker 1: Prague took a lot of responsibility to say we could
Speaker 1: have done better to avoid this outcome. So I think
Speaker 1: it's fair for him to say now, like, I'm going
Speaker 1: to position this company in the best way I can
Speaker 1: to lead to whatever exit or whatever endpoint we're leading towards.
Speaker 1: It's just that none of those options are very good
Speaker 1: when you can't even hire new employees, right now you've
Speaker 1: got snoop dog jumping into the phrase saying you might
Speaker 1: have to buy Twitter. Now, what about another scenario here?
Speaker 1: Somebody else snoop dogg or not? I saw someone ask
Speaker 1: you about whether Google uh could make sense as a buyer.
Speaker 1: What about if someone else buys Twitter? Could that happen?
Speaker 1: I mean Google's approached the company a number of times
Speaker 1: I don't know about since the time I left, but
Speaker 1: we were in conversation with them at least twice when
Speaker 1: I was there, UH to potentially buy the company. I
Speaker 1: don't know what the regulatory hurdles are for Google to
Speaker 1: buy it at this point, and certainly I think it's
Speaker 1: more difficult for a company like Facebook, who also tried
Speaker 1: to buy Twitter a number of times, to buy the company.
Speaker 1: So it's it's difficult to see those kind of outcomes. Uh.
Speaker 1: But you know, I think if Ellen walks away and
Speaker 1: the stock price continues to decline, other options certainly would
Speaker 1: be on the table. Now speculation has been made that
Speaker 1: it's Friday. Maybe Elon Musk is just trolling us all.
Speaker 1: What do you think? Yeah, absolutely, I don't think he's
Speaker 1: a serious person. Uh, And I don't think the way
Speaker 1: that he's approached this on bots is serious either. It's
Speaker 1: certainly not about bots. I think the most credible take
Speaker 1: is that he wants to renegotiate the price. Uh, and
Speaker 1: certainly he's got the board in such a position where
Speaker 1: they agreed so quickly and said they saw no other options,
Speaker 1: and Jack said that Ellen's the sole solution to the
Speaker 1: company's problems. Um that Ellen would be able to say, well,
Speaker 1: if I'm the sole solution, I'm the only I'm the
Speaker 1: only option here, then I think I should be able
Speaker 1: to set the price, particularly as you let off the show.
Speaker 1: The tech market as declined precipitously since he started buying
Speaker 1: up the stock, So I don't think it's serious. I
Speaker 1: don't think he's serious about bots. I don't think he's
Speaker 1: been serious on his positions about free speech. I don't
Speaker 1: think he's been serious on his ideas with putting the
Speaker 1: out rhythm on get hub, which isn't even a technically
Speaker 1: sensible idea. I think this is all a way for
Speaker 1: him to be in the headlines, have people talking about him.
Speaker 1: He'd like to own it if he probably can get
Speaker 1: it for a better price now, but he doesn't really
Speaker 1: have any ideas what he wants to do with the company,
Speaker 1: and every additional turn of the crank where he talks
Speaker 1: about what he wants to do, whether that's the business
Speaker 1: plan that lead to investors or when he talks to
Speaker 1: to folks about his free speech ideas, reveals how un
Speaker 1: seriously or how uncritically he's approached this and I think
Speaker 1: that is why the company is in such a predicament.
Speaker 1: And just to remind our viewers, he tweeted that he's
Speaker 1: still committed to the deal. He has signed a binding contract. Um.
Speaker 1: But Jason, always appreciate your opinions and your take on
Speaker 1: what's happening here. One of the founding members of the
Speaker 1: early Twitter team, Jason Goldman, thank you coming up. Reed Hoffman,
Speaker 1: partner at Gravelock, co founder of LinkedIn his thoughts on
Speaker 1: the market's what it all means for entrepreneurs, and of
Speaker 1: course his take on Twitter and Elon Musk. He joins me, next,
Speaker 1: this is Bloomberg. Trillions have been wiped off public markets
Speaker 1: in the last few weeks, a lot of the pain
Speaker 1: coming from tech stocks. Saudi Aramco this week replaced Apple
Speaker 1: as the world's most valuable company. The turmoil has led
Speaker 1: to hiring freezes and even layoffs at public and private company.
Speaker 1: So where are we now in this cycle? And just
Speaker 1: how bad will it get? I'm joined now by Reid Hoffman,
Speaker 1: who's been building and investing in tech for decades and
Speaker 1: knows a thing or two about ups and downs. He's
Speaker 1: also the co founder of LinkedIn, of course a partner
Speaker 1: at Graylock and Out, with an updated version of his
Speaker 1: number one best selling book, The Startup of You, which
Speaker 1: came out ten years ago and is being rereleased for
Speaker 1: a new generation read Always great to have you back
Speaker 1: here on the show, Always great to be here. We're
Speaker 1: gonna get to the book, But I want to start
Speaker 1: with the mood. Given all of this market turnmoil, valuation cutdowns,
Speaker 1: trouble fundraising, what is the mood among venture capitalists right now?
Speaker 1: How dire is it? Well? I definitely think the mood
Speaker 1: is troubled and expects more volatility becoming rather than less um.
Speaker 1: But on the other hand, I think that technology is
Speaker 1: still very strongly the future, and so I think the
Speaker 1: question isn't oh my god, you know flights from technology.
Speaker 1: It's more there'll be more volatile fundraising. It won't be
Speaker 1: as easy, there won't be as much capital available. Some
Speaker 1: businesses will be much harder to raise than for others,
Speaker 1: and so you know, sort that out and be careful
Speaker 1: about that. Check your balance sheet, you know, check all that.
Speaker 1: But we still think technology and technology investing is year
Speaker 1: by year, you know, where we'll see most of the
Speaker 1: growth and most of the change in industries in the world.
Speaker 1: An investor at Active in Capital, Steve Saraceno, told me
Speaker 1: he thinks millions of people are going to lose their
Speaker 1: jobs in tech and that it's going to be absolutely
Speaker 1: shocking for the industry. Do you agree fundamentally, No, But
Speaker 1: it's not because I don't think their world be A
Speaker 1: number of companies that have gotten over there ease, have
Speaker 1: started investing, have burn rates that are far above the revenue,
Speaker 1: will do a reset. You know, generally public market companies
Speaker 1: will have to show that their disciplined and they're operating
Speaker 1: margins and there and their revenue and so I think
Speaker 1: you will see layoffs. But the thing is, I think
Speaker 1: capital still goes. Technology is the future. So I think
Speaker 1: that for example, people who get laid off in one
Speaker 1: company might have three other job offers and other companies
Speaker 1: that action. In fact, our hiring. So it isn't quite
Speaker 1: that dramatic, uh, you know, like oh my god, there's
Speaker 1: gonna be all these people out on the streets. It's
Speaker 1: actually gonna be there'll be a shuffle for talent and
Speaker 1: companies shuffling to ones that perhaps have either deeper pozzle
Speaker 1: capital or more revenue. That's going now. Others have told
Speaker 1: us they're saying battened down the hatches, cut costs, build
Speaker 1: what matters. What are you telling your portfolio companies right now?
Speaker 1: What are the top three bullets? Well, it depends on
Speaker 1: the company. So obviously, if you have a place where
Speaker 1: you have a deep well of capital, good revenue, of
Speaker 1: good growth. Actually, one of the places where you can
Speaker 1: tell the strong companies in the week is you keep
Speaker 1: investing uh into where you're heading. We did the same
Speaker 1: thing when uh you know, for example, LinkedIn in two
Speaker 1: thousand and eight. It was like, okay, um, we have
Speaker 1: a chance to invest in the future here. And so
Speaker 1: when you have companies that have the ability to make
Speaker 1: that play, you take that play. On the other hand,
Speaker 1: of course, if you say, well we're still figuring out
Speaker 1: product market fit. We don't quite know how it's gonna
Speaker 1: go yet, or you know, we don't. We want to
Speaker 1: maintain our burn rate relative to having extra months to
Speaker 1: choose our our market which we want to raise future capital.
Speaker 1: Then be more disciplined about hiring, be more disciplined about expenses, uh,
Speaker 1: and predict for the future. Is this like two thousand eight?
Speaker 1: Is this like the financial crisis or the dot com bust?
Speaker 1: Or is this something completely different? Well? I think it's
Speaker 1: different in part because while, for example, there is a
Speaker 1: real shift in the market obviously everyone last couple of
Speaker 1: weeks across a number of things, I think there's still
Speaker 1: a lot of capital that says, Okay, if I were
Speaker 1: choosing where growth will be, where the future of industries
Speaker 1: will be, where the future of of kind of a
Speaker 1: new revenue streams, new businesses will be. Technology is still it.
Speaker 1: It just now won't be all technology. If it seems
Speaker 1: new and interesting, throw money at it, it will be Okay,
Speaker 1: a little bit more disciplined about Well, actually, this is
Speaker 1: a good industry of the future. Let's bet on that. Now.
Speaker 1: In the startup of view, you pioneered this idea that
Speaker 1: anyone can be an entrepreneur. What is your advice to
Speaker 1: a new generation in this environment? About how they take
Speaker 1: control of their own careers when a lot of people
Speaker 1: are reevaluating life and work. So the basic ideas careers
Speaker 1: are now much more like a startup than they are
Speaker 1: like a career ladder, career escalator. You can call it
Speaker 1: a jungle, you can call it a jungle gym. You
Speaker 1: have to actually be maneuverable and flexibility. Adaptability is the
Speaker 1: new stability. And so the tool set for entrepreneurs, even
Speaker 1: if you don't start your own accompany yourself, is the
Speaker 1: tool set for every professional, for every worker, for every
Speaker 1: career path. And the book is trying to say, well,
Speaker 1: here's the basic set of the tool sets if you
Speaker 1: would like to run your career in this modern entrepreneurial
Speaker 1: adaptable way. Now, someone else who seems to be at
Speaker 1: an inflection point in his career is Elon musk taking
Speaker 1: on the possibility of buying Twitter. I know he's a
Speaker 1: friend of yours, he was your colleague at PayPal. How
Speaker 1: bullish are you on the future of Twitter under Elon Musk? Well,
Speaker 1: I saw your earlier interview with Jason I thought was
Speaker 1: very good, by the way, and basically I think everything
Speaker 1: he was saying about Twitter and Twitter circumstances. Correct. I
Speaker 1: think it hasn't innovated nearly as much as it could
Speaker 1: have or perhaps should have, you know, in the last decade,
Speaker 1: five years, whatever it is. Um, I think one of
Speaker 1: the great things about Ellen is he is one of
Speaker 1: the world's most amazing innovators. I actually do think this
Speaker 1: is counter of the what Jason was saying, that he
Speaker 1: has a plan, that it's an interesting plan. Um. Yes,
Speaker 1: the box thing may or may not be fully on
Speaker 1: target or not. But actually, in fact, I think he goes.
Speaker 1: He's an active user, as we can tell in the
Speaker 1: last couple of days even, and he has a sense
Speaker 1: of where the product could go. And Ellen is always
Speaker 1: a product oriented entrepreneur inventor, and so I think he
Speaker 1: actually has a plan and has something that he's interested
Speaker 1: in doing. Um. But I think it's a you know, obviously,
Speaker 1: the the tweets of where are we going with the
Speaker 1: deal and so where they're not great for stability within
Speaker 1: the company and the employees and and knowing what's going
Speaker 1: on in the future. So you think he's serious. I mean,
Speaker 1: if you were on the other side of this deal,
Speaker 1: wouldn't you be frustrated about all the back and forth. Well,
Speaker 1: of course you should be frustrated because you know, part
Speaker 1: of part of being a little bit more like tweet
Speaker 1: in the morning saying it's on hold, tweet, tweet a
Speaker 1: little later saying I'm still committed, you know, is you know,
Speaker 1: needless thrash on this. On the other hand, I think Ellen,
Speaker 1: he is also very exciting about you know, kind of
Speaker 1: like you know, here's here's a person who revitalizes the
Speaker 1: space industry, you know who you know, brings on the
Speaker 1: future in green cars and a bunch of other So
Speaker 1: I think there's a bunch of very interesting things that
Speaker 1: are possible with the innovation. That's great. I think that
Speaker 1: the the the volatile tweeting, you know, perhaps much a
Speaker 1: little less great. Now we're coming up on almost twenty
Speaker 1: years since you founded LinkedIn, and I wonder if this
Speaker 1: could be a moment, the moment where the new new
Speaker 1: social network of the future gets born. Is the market
Speaker 1: our users is even Elon Musk saying we need something new.
Speaker 1: So I think we almost always, you know, like the example,
Speaker 1: if you said, will there be a new social network
Speaker 1: five years from now that we don't see right now,
Speaker 1: the answer is almost certainly yes. We wouldn't ever necessarily
Speaker 1: have predicted TikTok coming in, thinking all of all the
Speaker 1: video stuff is already owned by YouTube. I think we
Speaker 1: will see it now. The interesting question, of course, part
Speaker 1: of what my job's about is trying to figure that
Speaker 1: out and predicted and invested in it early. I do
Speaker 1: think that Twitter has great potential to it. That's actually
Speaker 1: one of the things that is most exciting and all this,
Speaker 1: and I think that the being able to work towards
Speaker 1: that potential is huge. But by the way, in terms
Speaker 1: of a new social network, I think you will see
Speaker 1: someone in the next five years. Where we'll come from
Speaker 1: and which country will come from, I think is very
Speaker 1: much TVD. We're coming up on the anniversary of the Facebook.
Speaker 1: I p O as well, and you were an early investor.
Speaker 1: I know that you have been frustrated and you've expressed
Speaker 1: us with us, you know, with some of Mark Zuckerberg's
Speaker 1: decision over the last few months, particularly around the whistleblower um.
Speaker 1: But what do you think about the vision for the metaverse?
Speaker 1: Are you bullish on that? Well, so I haven't actually
Speaker 1: talked to Zuckerberg about that at all. I tend to
Speaker 1: be a little bit more cautious on the metaverse, thinking
Speaker 1: of the then off of wide variety things, startups and
Speaker 1: everything else, just because I think that what we'll first
Speaker 1: see before we see so deep social applications or work applications,
Speaker 1: is deep entertainment applications that have a broad based appeal
Speaker 1: and interest. And I haven't seen those yet. I've seen,
Speaker 1: you know, kind of specific ones, and what they've done
Speaker 1: with Oculus is really amazing, but I think we're still
Speaker 1: some ways away from that from called mass adoption of
Speaker 1: the beta verse, or maybe we should call it mass
Speaker 1: vers adoption or something like that. Now, the metaverse, if
Speaker 1: it happens, could totally change the way we live and work.
Speaker 1: What do you think about the future of work? Has
Speaker 1: the center of gravity gravity permanently shifted to the home
Speaker 1: or not. I think almost certainly it has not shifted
Speaker 1: permanently to the home, because we are social animals as
Speaker 1: a bunch of people who get their energy by working
Speaker 1: with other people. You can make decisions more quickly with
Speaker 1: everyone in the room. Um, So I think that there
Speaker 1: will be a return to offices or return to uh,
Speaker 1: you know, kind of places where people are congregating together
Speaker 1: in order to work on the other hand, of course,
Speaker 1: we've had two years of adopting tools for virtual work,
Speaker 1: and I think that will expand the tool set key
Speaker 1: talent of UM you know kind of UM you know,
Speaker 1: kind of zooming in or teams ng in from some
Speaker 1: other place, being able to have distributed companies that come
Speaker 1: together every six weeks, you know, something along those lines.
Speaker 1: I think all of that is stuff that you're gonna
Speaker 1: see persists. But I don't think the office is going away.
Speaker 1: Interesting now, you recently co founded another company yourself called Inflection,
Speaker 1: focused on the future of AI. Tell us more about
Speaker 1: this and where you think the future is. Where are
Speaker 1: you making your bets right now? Well, one of the
Speaker 1: things AI is that think going to transform every industry. Um.
Speaker 1: I think we see line of side truck from some
Speaker 1: of the amazing work that like for example, Microsoft and
Speaker 1: open AI are doing with co pilot and get hub.
Speaker 1: I think you're seeing all kinds of things. And so
Speaker 1: with Inflection, we thought, Okay, what are the things that
Speaker 1: we can most do to help give human being superpowers
Speaker 1: when they're dealing with computers? Are what are the set
Speaker 1: of things that enable that to happen? And there's not
Speaker 1: a lot that we're saying about it yet because uh,
Speaker 1: you know, we have a specific product idea that we'd
Speaker 1: like to test and develop out and then kind of,
Speaker 1: you know, do the aha moment of pulling back the curtains.
Speaker 1: But it's a it's an AI plus humanity is the theory,
Speaker 1: all right, Reid Hoffman can't wait to see what else
Speaker 1: comes of that. Thank you as always for joining us,
Speaker 1: and of course check out the updated version of Read's book,
Speaker 1: Startup of Field. Thank you, Emily. A major change could
Speaker 1: soon be coming to Apple. Bloomberg has learned the company
Speaker 1: is testing swapping its lightning charging point port with the
Speaker 1: more prevalent USB C connector. This would be for future
Speaker 1: iPhone models. This is a move Apple's making to help
Speaker 1: conform to looming European regulations. Apples also working on an
Speaker 1: adapter that would let future iPhones work with accessories designed
Speaker 1: for the current lightning connector. Coming up Toast has found
Speaker 1: the perfect recipe the restaurants software company beating estimates amidst
Speaker 1: market turmoil, but with rising pressure on consumers. Okay, buck,
Speaker 1: we'll discuss next. This is blue work. This is Elon
Speaker 1: Musk being Elon Musk. This is so Elon Musk centric
Speaker 1: this is him doing what he does, which is stirring
Speaker 1: up the pot want price about Melon Musk, I think
Speaker 1: he is angling for a cheaper price. He may have
Speaker 1: a problem raising the deck composer here. He certainly has
Speaker 1: a lot of negotiating leverage right now. I would want
Speaker 1: to do any pegg I possibly can do to get
Speaker 1: out of this deal of this price you set right this,
Speaker 1: This price makes no sense. You know, it is looking
Speaker 1: very increasingly unlikely to be to be the final bid
Speaker 1: to the extent rising acquisition for Twitter. UM was not
Speaker 1: as miss priced as as you know perhaps some other
Speaker 1: equities have been. The company is ready to be acquired UM,
Speaker 1: and I think Elon is, you know, attempting to kind
Speaker 1: of just slower the price here. Welcome back to bloomber Technology,
Speaker 1: Emily Changing San Francisco, going to stick with that story
Speaker 1: and Elon Musk, a billionaire saying he is putting his
Speaker 1: deal to buy Twitter quote temporarily on hold, then later
Speaker 1: clarifying he's still committed to the acquisition. What's the markets
Speaker 1: take on all this? Bloombergs at Ludlow back with the latest,
Speaker 1: and we just heard Reid Hoffman, who is a friend
Speaker 1: of Elon Musk worked with him at PayPal. He thinks
Speaker 1: Elon Musk is serious and has a plan. He thinks
Speaker 1: he's serious. He thinks he has a plan. You had
Speaker 1: a lot of doubt in those voices that we just
Speaker 1: played across the market. Reality is Twitter stock down nine
Speaker 1: point seven percent after those tweets, right, That's the biggest drop,
Speaker 1: believe it or not since October. But the reason that
Speaker 1: we're following the share price in this snapshot moment in
Speaker 1: time is to track how far it's gone from the
Speaker 1: fifty four dollars twit scents bid that Elon Musk has
Speaker 1: made for the company. In other words, the spread and
Speaker 1: coming me into my Bloomberg terminal. Let's take a look
Speaker 1: at the spread, because we use that as a proxy
Speaker 1: to gauge wall streets belief of how likely this deal
Speaker 1: is to proceed in its current form or indeed, if
Speaker 1: it's going to happen at all. You see there on
Speaker 1: the right hand side of your screen. The spread is
Speaker 1: currently at thirteen dollars for the eighth cents, the gap
Speaker 1: between current share price and Elon musky cents bid. On
Speaker 1: Thursday night, it was at nine dollars eleven cents, so
Speaker 1: we've really widened the spread. And in reality, the market
Speaker 1: is increasingly telling us that it believes Musk is either
Speaker 1: trying to reprice the deal like we heard from some
Speaker 1: of those voices, or he's going to walk away from
Speaker 1: this proposal altogether. Bloomberg has been speaking all day long,
Speaker 1: Emily to merger arbitrage specialists who put the odds of
Speaker 1: this deal at fort really for zero percent? Can you
Speaker 1: believe it? That's not high, that's not high. But it's Friday.
Speaker 1: That's where we're at right now. Let's see where we're
Speaker 1: out on Monday. Well, let's see what the weekend brings.
Speaker 1: First at Ludlow, Thank you. I want to move on
Speaker 1: now to Toast, the cloud based restaurant software company recently
Speaker 1: reported their first quarter results, beating expectations on top of
Speaker 1: giving a positive outlooks, sending shares jumping, a bright spot
Speaker 1: in the recent spate of tech earnings reports. I want
Speaker 1: to bring in tost CFO Atlena Gomez from More talk
Speaker 1: about this and the digital revolution in the restaurant industry.
Speaker 1: At Lena, First of all, look, you know you're facing
Speaker 1: a lot of very difficult macro economic forces here prices
Speaker 1: going up, consumers under pressure. How is it that Toast
Speaker 1: is managing to keep strong results coming. Yeah, thank you
Speaker 1: for having me, Emily. Yeah, we Toast. We posted printed
Speaker 1: yesterday some great results and beat across all of our metrics.
Speaker 1: And really that's a testament to our product resonating in
Speaker 1: the market price and we're seeing really a secular shift
Speaker 1: in the restaurant industry where every restaurant is trying to
Speaker 1: digitize or operate to run more efficiently, and Toast is
Speaker 1: well positioned to capture this opportunity. And our Q on
Speaker 1: results really speak to how well our sales team executed,
Speaker 1: but really speak to the opportunity ahead for Toast and
Speaker 1: in the inflationary environment when with costs rising, actually Toast
Speaker 1: becomes even more valuable because we can help our restaurants
Speaker 1: be more efficient, help them manage their pricing their menus,
Speaker 1: have them see line item by line at m detail
Speaker 1: on their menu items. So we're really excited about the
Speaker 1: opportunity ahead. Interesting though, but how much choices do restaurants
Speaker 1: have right now when the price of food is going
Speaker 1: up and they've got to pay their bills. How do
Speaker 1: you see inflation impacting the business your business and the
Speaker 1: restaurant business over the next few months. Yeah, that's the
Speaker 1: beauty of the platform, I believe. So we we give
Speaker 1: we arm our restaurant owners with data insights and performance
Speaker 1: insight so they can look at their menu items they
Speaker 1: can potentially increase their price if they need too. And
Speaker 1: also we help restaurants be more efficient. It's a margin
Speaker 1: game for restaurants, right, and so we can help them
Speaker 1: with our tools be more efficient, whether that's looking giving
Speaker 1: them hardware to help more run their operation more efficiently,
Speaker 1: or looking at their menu prices and or optimizing the
Speaker 1: food the food that they put on their menus. All
Speaker 1: of that is really what Toast does and actually becomes
Speaker 1: more powerful for them during this inflationary environment. Now, Toast
Speaker 1: went public during the pandemic, and we just saw instat
Speaker 1: cart file to go public. They've cut their valuation as
Speaker 1: they navigate this process. What do you make of them?
Speaker 1: You know, decided to go public now and they're model
Speaker 1: especially in the macro environment we're facing. Yeah, you know,
Speaker 1: I think insta cart has always proven to do a
Speaker 1: really good job of their consumer marketplace. I do think
Speaker 1: the market is a bit different. But if they have
Speaker 1: a good long term plan, just how we think about
Speaker 1: our opportunity. Uh. Then you know, I think that they
Speaker 1: can have a successful I p O. But I think
Speaker 1: it depends to make sure that they have a very
Speaker 1: long term plan. And we always know there'll be different
Speaker 1: MATT market backdrops, and that's how we think about our
Speaker 1: business as well. We're really focused on the long term
Speaker 1: play and as long as they really have a good
Speaker 1: long term strategy, I think that will work well for them.
Speaker 1: Restaurants and uh, you know, companies like yours are becoming
Speaker 1: more intertwined with the gig economy and the gig economy's future.
Speaker 1: And I'm curious what you think about the labor issues
Speaker 1: that they're facing that we're seeing, especially in a tight
Speaker 1: labor market where people are just struggling to make ends meet. Yeah,
Speaker 1: I now we're seeing we're definitely seeing that as a
Speaker 1: pain point for our restaurants. And that's where we can
Speaker 1: really help our help our restaurant owners by leveraging our tools.
Speaker 1: If they can leverage our tools, we can we can
Speaker 1: we can actually help them effectively do serve more diners. Uh,
Speaker 1: even with our platform and so great examples. We had
Speaker 1: a restaurant that had eight servers serving ninety diners. A
Speaker 1: year later with our platform, they served over two diners
Speaker 1: with nine servers. So it just gives you an example
Speaker 1: of the power of our platform to help them in
Speaker 1: this very intense labor market. I also have to ask
Speaker 1: you worked at Visa in your previous life and what
Speaker 1: you make of the fact that, you know, crypto payments
Speaker 1: have been on the rise and bitcoin settled more than
Speaker 1: Visa last year. Yeah, you know, I think that that
Speaker 1: there's a wait and see approach on bitcoin and crypto
Speaker 1: and and you know, we're paying attention to that, but
Speaker 1: we'll see how it plays out over time. Alright to
Speaker 1: CFO Elena Gomez, thank you for sharing, Thank you for
Speaker 1: having effective with us. Great to have you today. Coming up,
Speaker 1: we will wrap the weeks that was in crypto, the
Speaker 1: future of stable coins after the Terra USD debacle, and
Speaker 1: just how long this crypto winter blasts? This is Bloomberg.
Speaker 1: It is time now for our crypto report and wrapping
Speaker 1: the week in crypto markets that was what a week.
Speaker 1: As bitcoin plunged as low as twenty six thousand dollars Thursday,
Speaker 1: two hundred billion dollars in market value has been erased
Speaker 1: from the entire crypto market, and it's the sell off.
Speaker 1: To give you an idea, that's almost as much as
Speaker 1: the annual budget for the entire state of New York,
Speaker 1: which is two hundred twenty billion dollars. Our crypto contributors,
Speaker 1: Snali Bostik is here to put it all in perspective, Shanali, Emily,
Speaker 1: it's really amazing because you see that much wiped out
Speaker 1: of the entire crypto universe. All talking on the heels
Speaker 1: of what happened in the us T and the Terra ecosystem,
Speaker 1: but Bitcoin itself, the biggest of the cryptocurrencies, really had
Speaker 1: fallen here below oh that very highly watched thirty dollar level,
Speaker 1: and it has gotten a bid here today over six
Speaker 1: percent of a rise in more than about twenty four
Speaker 1: hour period, helping bring the global crypto market back up
Speaker 1: more than six percent as well, but still over a
Speaker 1: seven day period. Here you are seeing most cryptocurrencies the
Speaker 1: top ten at least mostly lower on the seven day period,
Speaker 1: with the one exception being the other stable coin usd coin,
Speaker 1: which is much closely, much more closely linked to the dollar.
Speaker 1: But still, Emily, we're gonna be talking about it for
Speaker 1: a while. Now, what does the breakdown of the tarot
Speaker 1: ecosystem mean for defy and crypto rit large Well, and
Speaker 1: it'll be interesting to look back on this moment as
Speaker 1: an inflection point in the broader crypto story. Shanali stay
Speaker 1: with us. I want to bring in our next guest
Speaker 1: for his take on all of it. Adam Jackson is
Speaker 1: the co founder and CEO of freelance Labs, one of
Speaker 1: the core teams building the brain Trust Network, a user
Speaker 1: own talent network that matches enterprises with technical and design professionals. Adam,
Speaker 1: thank you so much for joining us. Okay, so I
Speaker 1: don't think there's any debate. We are in the middle
Speaker 1: of a crypto winter. How cold does it get and
Speaker 1: how long does it last? Well, look, the winter is here,
Speaker 1: that the tide is completely out, and I think you
Speaker 1: know this happens every couple of years in in crypto
Speaker 1: certainly and in tech more generally. But this is a
Speaker 1: big sea change we're going to see now that you know,
Speaker 1: these old systems that people were playing with, these kind
Speaker 1: of Ponzi economics, a lot of defy that never really
Speaker 1: generated any value, that was very self referential. It's going away.
Speaker 1: And I think we're going to return to you know,
Speaker 1: this is when the scammers leave the people who are
Speaker 1: playing games, and you know that all goes away. Everyone's
Speaker 1: been cashed out because zerrowed out, if you will, And
Speaker 1: we're gonna go back to fundamental networks, networks that actually
Speaker 1: drive value for their users. What does value mean moving forward?
Speaker 1: There's a lot of questions. You know, you think about
Speaker 1: what Mark Cuban had said and the idea that more
Speaker 1: of these crypto assets need to be more sass like. Uh,
Speaker 1: there's a big question about the utility moving forward for
Speaker 1: crypto ahead. What are you seeing founders and talent gravitate
Speaker 1: towards now that some of the bubble has been versed. Yeah, sure,
Speaker 1: I don't know what crypto being more sas like means exactly,
Speaker 1: but I'll tell you what the fundamental value system of
Speaker 1: Web three is is replaced the middleman who extracts more
Speaker 1: value than they provide, replace it with software. Right, and
Speaker 1: so move from overly extractive investor own networks to use
Speaker 1: your own networks, networks marketplaces that are owned by the
Speaker 1: people who make their living on them. And so when
Speaker 1: you compress those big corporate margins, that just a All
Speaker 1: they do is misaligned incentives between the operator of the
Speaker 1: marketplace and the users would make their living. When you
Speaker 1: swash those down, you give the value back to the
Speaker 1: people who are actually making their living on the network
Speaker 1: or the demand side. Right, That's what web free is
Speaker 1: all about. Use your own networks, growing faster and becoming
Speaker 1: more valuable than invest your own networks. What do you
Speaker 1: make it? What's happening with coin base where you know,
Speaker 1: I'm sure they would say, you know, we're not a
Speaker 1: Pozzi scheme, we're not scammers. We're trying to bring some
Speaker 1: integrity to this market. But you look at the stock
Speaker 1: totally plummeting over the last several weeks. What's the future
Speaker 1: for a company like coin base? Yeah, I mean a
Speaker 1: coin coin Base is certainly not a scam. More upon
Speaker 1: the scheme, they're incredibly valuable piece of infrastructure in the US.
Speaker 1: They're one of the most important and easy to use
Speaker 1: on ramps to the system. Um, They're an absolute staple,
Speaker 1: and they're they're not going anywhere. You know, there are
Speaker 1: there are a critical piece of this infrastructure for for
Speaker 1: everybody in the US. You know, question, I have to
Speaker 1: It's like there's these big publicly traded companies like coin base,
Speaker 1: where there are already massive, massive investors. But what do
Speaker 1: you think about the VC area where some of these
Speaker 1: valuations are coming down. What is the propensity for VC
Speaker 1: dollars to go into new businesses, especially at the early stage,
Speaker 1: to help new founders really expand this market in a downturn. Yeah,
Speaker 1: the downturns are great for building, right. This is when
Speaker 1: when it's really cold out and everyone has to be disciplined,
Speaker 1: and everyone's saying, trim your budgets, extend your runway. It's
Speaker 1: I know it's a bit of a meme, but it's true.
Speaker 1: It's good advice. And these venture funds, look, they've already
Speaker 1: been raised, right, I mean these you know, massive like
Speaker 1: Katie Hans New Fund and these other giant crypto funds.
Speaker 1: This money has been raised, it's going to be deployed.
Speaker 1: But I think we we've all learned a valuable lesson
Speaker 1: here that you know, some of the stuff just gets
Speaker 1: a little too crazy. You know, these these self referential
Speaker 1: business models like you see in play to earn or
Speaker 1: defy um as well as just these absurd valuations, right,
Speaker 1: hundreds of millions of dollars first seed stage stuff. You know,
Speaker 1: party is over, right, time to get back to work.
Speaker 1: So where does the money get deployed if the party's over? Well, party,
Speaker 1: party is over for the crazy stuff, right, And um
Speaker 1: look I'm guilty too. I was an early investor in Terra.
Speaker 1: I think Algo stables are the holy grail. I was
Speaker 1: really hoping it'd work out. I took a beating like
Speaker 1: the rest of them this week. But but when I
Speaker 1: say the parties of I mean this this like stuff
Speaker 1: like that's just so far out there from this is
Speaker 1: boble perspective. That's not actually providing anywhere any value. Right,
Speaker 1: Ponzi economics. Right, that party is over. We need to
Speaker 1: go back to building networks that give real value to
Speaker 1: people doing work in the real world. Our our network,
Speaker 1: brain Trust connects knowledge workers with big clients like Nike
Speaker 1: and Goldmen Snacks that need them. And because it's owned
Speaker 1: by the talent, the fees are zero on talent and
Speaker 1: ten on clients. That's a way better deal for both sides. Right,
Speaker 1: talent makes more money, clients budgets go further. When when
Speaker 1: that's the whole point, Right, that's a fundamentally valuable web
Speaker 1: three network. What do you make of what's happened with
Speaker 1: Tera and what it says about the future of quote
Speaker 1: unquote stable coins. Well, there's there's two types of stable
Speaker 1: points right there. There's asset backed like U, S, T, T,
Speaker 1: H and heather. Those are you know, you could redeem
Speaker 1: one for a dollar that's hopefully in a bank account somewhere,
Speaker 1: so if there is a run on the bank, should
Speaker 1: be okay. Um. Now, that argument against those is they're
Speaker 1: not censorship proof, they're not decentralized, right, a government could
Speaker 1: turn them off easily, etcetera. The holy grail is the
Speaker 1: algo stable point. That this concept of something that can
Speaker 1: maintain a peg to the US dollar, um, but not
Speaker 1: have full dollar backing right and be able to withstand
Speaker 1: an attack and and a lot of us, you know,
Speaker 1: this experiment has been played many times, uh, and and
Speaker 1: a lot of us thought, you know, Tara, maybe maybe
Speaker 1: the breakout and um, you know, there's a lot of
Speaker 1: like finger pointing around what did someone attack this or
Speaker 1: was it some hedge fund in New York and like
Speaker 1: the But the answer is it doesn't matter. If there's
Speaker 1: a flaw on the system, it will be exploited. And
Speaker 1: that's what happened this week, so I'm sure. I'm sure
Speaker 1: we'll be tried again. Though, Adam, I'm really curious about
Speaker 1: the responsibility of the tarot ecosystem now that so many
Speaker 1: people have lost money. Is it completely invest at your
Speaker 1: own will here or are there going to be chances
Speaker 1: to recoup some of these losses in any fashion? Do
Speaker 1: they owe anybody anything? You know? Um, I can't speak
Speaker 1: for them because I'm not part of the core team
Speaker 1: or l f G or anything like that. I'm just
Speaker 1: like an early you know, investor in the project, and UM,
Speaker 1: you know, I look, these are super risky, is right.
Speaker 1: So many of these things are speculative, and UM, you
Speaker 1: know you have to understand that and do your research
Speaker 1: before you go in. I did mine. I understood so
Speaker 1: what I was getting into. Um, you know, I think
Speaker 1: I just read you know a couple of hours ago
Speaker 1: that um, you know, do Uan and the team are
Speaker 1: are attempting a restructure to recap the system and hopefully
Speaker 1: make us t holders more whole. Yeah. I hope it
Speaker 1: works out. Yeah, I mean it's look, they're not you know,
Speaker 1: this is not a scam, right, these guys worked hard
Speaker 1: to make this work and and Um, you know, I
Speaker 1: wish him the best. We'll see how it plays out.
Speaker 1: Adam Jackson, co founder and CEO of Freelance Labs and
Speaker 1: bloom Version Alibos, thank you both. FIGS. The medical scrubs
Speaker 1: and accessories companies sank in Friday trade after reporting first
Speaker 1: quarter results that missed expectations and lowering its guidance. How's
Speaker 1: the company being impacted by supply challenges, inflation, macro economic turmoil.
Speaker 1: I want to talk about that and more with FIGS
Speaker 1: co CEO and co founder Trina Spirit. Trina, thank you
Speaker 1: so much for joining us. So look, Trina, Um, it's
Speaker 1: a very different environment than the market that you went
Speaker 1: public in. What do you make of investors reaction here? Yeah,
Speaker 1: I mean it's definitely been an interesting quarter. I mean
Speaker 1: what we did was we really, um, feel as though
Speaker 1: we had a great quarter, right, twenty three percent revenue
Speaker 1: growth with twenty sorry percent revenue growth with twenty percent
Speaker 1: of Justine bazaw margin. We're really coupling both revenue growth
Speaker 1: and profitability in a pretty tough macroeconomic environment. Um, you know,
Speaker 1: we understand the response, but we feel it is a
Speaker 1: bit unwarranted just given how we are really well positioned
Speaker 1: for the long run. How dire are the supply chain
Speaker 1: challenges you're facing and how are you navigating them? You know,
Speaker 1: I think this has been going on first quite some time.
Speaker 1: You know, we've navigated through tough supply chain environment all
Speaker 1: through one. We've seen a bit more unpredictability in two.
Speaker 1: But we feel as though we're really well uh you
Speaker 1: know positioned. Right We are airing more of our goods
Speaker 1: in throughout the rest of this year, We're adjusting our
Speaker 1: product launch calendar, and we're able to really take action
Speaker 1: so that we can bring in our products for our
Speaker 1: healthcare professionals who need them so badly right now to
Speaker 1: get to work and and help us all. As you know,
Speaker 1: the pandemic even goes on from here, the pandemic, as
Speaker 1: you say, it's still with us. What are you hearing
Speaker 1: from the healthcare community and and and how does that
Speaker 1: translate into demand? You know, I think from the demand side,
Speaker 1: we feel really uh great, right, this is a recession
Speaker 1: result recessor assistant industry. We make non discretionary products. Healthcare
Speaker 1: pre nessionals need our products to do their jobs and
Speaker 1: go to work every day. We're plenishment driven business. Seventy
Speaker 1: of our business comes from repeat customers, but our healthcare professionals,
Speaker 1: it's been tough. And you know, our job at FIGS
Speaker 1: is to celebrate, empower and serve those who serve others.
Speaker 1: So every day we wake up here, how can we
Speaker 1: get our products to the people that need them most?
Speaker 1: And we're going to continue to do that. Now, you're
Speaker 1: focused on reinventing scrubs for frontline workers, but I wonder
Speaker 1: are there opportunities and avenues for growth in the lifestyle category. Yes,
Speaker 1: I mean, I think that's what's been really interesting about
Speaker 1: what we've done. Right. We really, before Figs it was
Speaker 1: a V neck top and a draw string pair of pants.
Speaker 1: We reinvented the industry with function and comfort and style
Speaker 1: uh in fabric technology that none of which existed. And
Speaker 1: then on the lifestyle side, to your your point, we
Speaker 1: grew eight that part of our business non scrubs eighty
Speaker 1: one percent a year every year in the quarter, eighteen
Speaker 1: percent of our net revenues is everything outside of scrubs,
Speaker 1: are as, our health care. Our professionals are essentially layering
Speaker 1: all of our products to go to work, at work,
Speaker 1: from work, on shift, off shift, had to tell and
Speaker 1: it's really encouraging to see, uh, that level of growth
Speaker 1: across the business. So last quick question, you and your
Speaker 1: co CEO built this company together. Where to see two
Speaker 1: women public company ceo is running a company together. What's
Speaker 1: your advice to other executives other founders in turbulent times
Speaker 1: like this. Yeah, I think it's too you know, be
Speaker 1: realistic in the near term and optimistic over the long run.
Speaker 1: We are very focused on the long term and really
Speaker 1: our community building incredible products for the most incredible people.
Speaker 1: That's what our healthcare professionals are. We call them awesome humans. Uh,
Speaker 1: and really focus on your mission and your values, which
Speaker 1: is what Heather and I try to do here every day.
Speaker 1: Train a spear fixed co CEO and co founder. Thank
Speaker 1: you for joining. Thank you, And that does it for
Speaker 1: this edition of Bloomberg Technology Wall Street Week. Coming up
Speaker 1: next with my colleague David west In and former US
Speaker 1: Treasury Secretary Larry Summers and a bunch of other great guests.
Speaker 1: They're gonna be talking about Elon Musk and next week
Speaker 1: Bloomberg Tech Tuesday will be on the road in Boston.
Speaker 1: We've got a great lineup of guests to talk about
Speaker 1: what's new in Boston's Silicon Alley and more, have a
Speaker 1: wonderful weekend. This is Bloomberg,