WEBVTT - Live from Informatica World 2022 in Las Vegas 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carole Masser and I'm 0:00:04.440 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanibek. We're here every day bringing 0:00:07.280 --> 0:00:09.799 you the latest news from the world of business and finance, 0:00:09.840 --> 0:00:13.640 clus technology, politics, economics, all partnising the power of Business 0:00:13.640 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.160 --> 0:00:20.000 analyst in more than one twenty countries. You can download 0:00:20.000 --> 0:00:23.239 Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot com. 0:00:23.400 --> 0:00:25.160 You can also listen to our radio show at two 0:00:25.160 --> 0:00:28.360 pm Eastern Time on Bloomberg Radio or watch us on YouTube. 0:00:28.400 --> 0:00:33.440 Search Bloomberg Global News for our world today largely about data, 0:00:33.560 --> 0:00:35.919 and the data is getting more intelligent, if I can 0:00:35.960 --> 0:00:38.280 say it that way. It's also getting much more productive, 0:00:38.520 --> 0:00:40.720 and it's all happening up in the cloud. So on 0:00:40.840 --> 0:00:43.199 that and so much more. We're so delighted to be 0:00:43.280 --> 0:00:46.600 here in Vegas at Informatica World two. And joining us 0:00:46.680 --> 0:00:50.360 right now is the CEO of Informatica's um Ahmed Wally. 0:00:50.560 --> 0:00:54.120 Excuse me, and you guys are all about cloud data. 0:00:54.720 --> 0:00:57.520 So great to be here. How are you good to 0:00:57.520 --> 0:01:00.320 be here? And Tim welcome to Welcome to Vegas. Uh 0:01:00.760 --> 0:01:02.800 what we'll tell us about. Like, there's just so much 0:01:02.800 --> 0:01:04.160 going on in this world, and I think we're trying 0:01:04.200 --> 0:01:06.839 to figure out kind of where we are in terms 0:01:06.880 --> 0:01:09.680 of the broader economy, the broader marketplace. How do you 0:01:09.720 --> 0:01:12.240 see it? Because you deal with so many customers that 0:01:12.280 --> 0:01:14.920 we cover on a regular basis. Oh yeah, we're a 0:01:14.920 --> 0:01:18.520 global companies, so we see literally every customer across every industry, vertical, 0:01:18.760 --> 0:01:21.000 across the globe. I mean there's a lot happening macro 0:01:21.120 --> 0:01:23.000 and I think we can all in some ways almost 0:01:23.200 --> 0:01:26.160 some sometimes just completely in uni ourself or not look 0:01:26.200 --> 0:01:28.880 at it. I think I come back. Whatever is happening 0:01:28.880 --> 0:01:31.120 in the current term will come and go. But the 0:01:31.160 --> 0:01:34.600 fundamental things that are changing is every enterprise is called digital. 0:01:34.840 --> 0:01:37.960 Every enterprise is trying to become intelligent using the increasingly 0:01:38.040 --> 0:01:40.280 coming off the pandemic, coming off the pandemic and the 0:01:40.280 --> 0:01:43.120 two years of pandemic, just completely exponential growth in in 0:01:43.280 --> 0:01:45.360 in in digital and in fact, the point that we 0:01:45.480 --> 0:01:48.280 made is that digital is no more a differentiator, that's 0:01:48.280 --> 0:01:50.840 a given. How do you get intelligent? And for that, 0:01:50.920 --> 0:01:53.160 how do you become data driven? And that's what we're 0:01:53.200 --> 0:01:56.000 all about, and that's what we're seeing increasing tail winds 0:01:56.000 --> 0:01:58.000 and demand for that. Everybody wants to like, hey, how 0:01:58.000 --> 0:02:00.080 do I harness the power of data. I have to 0:02:00.400 --> 0:02:04.200 manage customers, children and environment, likeness, managed supply chains, managed 0:02:04.240 --> 0:02:07.320 drug discoveries, so those become important and without data, that 0:02:07.360 --> 0:02:09.760 would not have happened. And and and look at during 0:02:09.760 --> 0:02:13.560 the pandemic the vaccine development happened in the shortest time possible. 0:02:13.960 --> 0:02:16.600 Why and we were part of that process bringing the 0:02:16.639 --> 0:02:19.560 best data, rapidly, looking at trial data, getting influence out 0:02:19.560 --> 0:02:21.639 of it so you can say, well, this vaccine makes 0:02:21.639 --> 0:02:23.960 sense to go out. That's what is happening and that's 0:02:23.960 --> 0:02:26.600 what we see. What specifically are you hearing from companies 0:02:26.639 --> 0:02:29.079 about the macro economic environment? And you know, we get 0:02:29.120 --> 0:02:31.200 a good view of it, not just with the analysts 0:02:31.200 --> 0:02:32.880 we talked to you, but with the CEO as we 0:02:32.880 --> 0:02:34.519 talked to what we see from earnings reports were in 0:02:34.520 --> 0:02:36.119 the midst of earnings right now, we're starting to see 0:02:36.120 --> 0:02:39.440 inventory levels, for example, come up at retailers. They need 0:02:39.480 --> 0:02:42.320 the data to sort through those inventory levels to help 0:02:42.400 --> 0:02:45.320 understand what consumers are going to buy, when they're gonna 0:02:45.320 --> 0:02:47.400 buy it, and control those levels. What are you hearing 0:02:47.400 --> 0:02:51.320 from customers about what's going on in the macro economic environment. See, 0:02:51.320 --> 0:02:53.480 there're two things we're hearing. Number one is everybody is 0:02:53.520 --> 0:02:57.440 definitely cautious looking at the current economy kind of does 0:02:57.639 --> 0:03:00.560 does give you what's going on. But at this same time, 0:03:01.200 --> 0:03:03.160 you know, we have so many great customers who spoke 0:03:03.160 --> 0:03:06.160 here and I'll give you an example, American Airlines during 0:03:06.200 --> 0:03:10.400 the middle of the pandemic, and they basically invested in 0:03:10.400 --> 0:03:13.200 our platform, and I'm like, what are you doing but 0:03:13.320 --> 0:03:15.160 the whole I mean the whole air Lines, But they 0:03:15.160 --> 0:03:18.800 realized that, Look, ultimately pandemic will be over, This macro 0:03:18.880 --> 0:03:20.280 will be over when we come out. What do you 0:03:20.320 --> 0:03:23.560 need to do? Manage your customer experience better? How do 0:03:23.600 --> 0:03:26.040 you do it? Understand your data better? Government better? I 0:03:26.040 --> 0:03:28.080 want to give it to every user across the enterprise. 0:03:28.400 --> 0:03:30.120 So I think that's what I'm hearing from customers are 0:03:30.200 --> 0:03:34.000 things that are the data related foundational things are here 0:03:34.040 --> 0:03:37.480 to stay. Now. You may stagger it, but you cannot 0:03:37.520 --> 0:03:40.120 avoid investing in it. But yes, the current macro does 0:03:40.160 --> 0:03:41.560 not get away from you. You've got to look at 0:03:41.560 --> 0:03:43.120 that every day and it gives you a little bit 0:03:43.160 --> 0:03:45.840 of caution. But these are fundamental things that you have 0:03:45.880 --> 0:03:47.600 to invest in. You know what I think about I 0:03:47.600 --> 0:03:49.960 always think about our investor audience, a very smart audience, 0:03:50.000 --> 0:03:51.760 but they're trying to be like, Okay, I understand. We 0:03:51.760 --> 0:03:53.640 talked about data all the time. We talk about the 0:03:53.640 --> 0:03:55.720 cloud all the time. What is it that you think 0:03:55.720 --> 0:03:58.600 an investment audience has to understand about, you know, kind 0:03:58.600 --> 0:04:01.360 of the sophistication of data, how it's becoming more intelligent, 0:04:01.440 --> 0:04:04.560 Like what does that mean? And what is the you know, 0:04:04.640 --> 0:04:07.680 potential top and bottom one, especially for publicly health companies. 0:04:07.720 --> 0:04:09.560 So I'll give you a couple of examples. Today morning 0:04:09.560 --> 0:04:11.560 I hosted a panel. We are three customers, you know, 0:04:11.600 --> 0:04:13.840 one from g Digital, one from Freddie Mac and one 0:04:13.880 --> 0:04:16.839 from Texas Health and Hospitals. And you know, and I'll 0:04:16.839 --> 0:04:19.400 give you other examples like Kroger and all. So Kroger 0:04:19.440 --> 0:04:21.320 as an example, just start to their CEO. There you go. 0:04:21.480 --> 0:04:23.920 So Kroger is an informatic customer and what they were 0:04:24.000 --> 0:04:26.039 using us for is he how do I get the 0:04:26.120 --> 0:04:29.680 right product at the right shelf at the right time. 0:04:30.160 --> 0:04:33.360 It has multiple benefits. It's a lost revenue opportunity that 0:04:33.400 --> 0:04:35.279 you want to await. Plus also if you get the 0:04:35.279 --> 0:04:37.599 wrong product and the right shelf, you're basically wasteedge which 0:04:37.600 --> 0:04:40.000 is meat needs at more cost. And then you're managing 0:04:40.040 --> 0:04:41.800 a supply chain that but if I'm a customer, I 0:04:41.839 --> 0:04:45.040 want gratification. So it really goes from the revenue to 0:04:45.279 --> 0:04:48.760 cost to obviously managing customer expectations. But weren't companies doing 0:04:48.800 --> 0:04:50.880 that before? Like that, That to me is kind of 0:04:50.920 --> 0:04:53.080 mind blowing. You would have thought that was it. See, 0:04:53.360 --> 0:04:55.320 if you look at a retailer, the margins are the thinnest, right, 0:04:55.480 --> 0:04:57.360 how do you manage your supply chains? So you basically 0:04:57.360 --> 0:04:59.719 make sure that you're not using products on the shelf 0:04:59.720 --> 0:05:01.279 at some point, right, if you get the right product, 0:05:01.279 --> 0:05:03.160 if you have you know, perishable goods and you throw 0:05:03.200 --> 0:05:05.919 it away, that's cost or if you have an empty shelf, 0:05:06.160 --> 0:05:08.279 then you basically lost revenue. How do you get better 0:05:08.320 --> 0:05:09.600 at it? And how do you do more and more 0:05:09.680 --> 0:05:11.360 just in time? Look at the supply chain problem, are 0:05:11.360 --> 0:05:14.040 you right? You go to all the other end. Healthcare 0:05:14.400 --> 0:05:16.919 is a huge thing in it. So when John was 0:05:16.960 --> 0:05:19.320 talking from Texas Health and hospitals, right, how do they 0:05:19.360 --> 0:05:21.560 look at patient care to make sure that when somebody 0:05:21.600 --> 0:05:24.040 is coming in they can provide the most personalized care 0:05:24.560 --> 0:05:27.640 in time for that reduces again the supply chain of 0:05:27.680 --> 0:05:32.039 healthcare cost but saves lives. So there are so many 0:05:32.080 --> 0:05:34.360 applications like that that when we talked to customers that 0:05:34.360 --> 0:05:36.240 they apply DAT or two. One thing I wanted to 0:05:36.279 --> 0:05:38.200 because Tim and I talked about coming off of milk 0:05:38.279 --> 0:05:39.440 and on the West Coast, we talked to a lot 0:05:39.480 --> 0:05:42.400 of companies and they said, even in a volatal environment 0:05:42.400 --> 0:05:45.760 where companies are taking about costs and wondering about what's next, 0:05:46.040 --> 0:05:48.480 the text spand is crucial. What can you tell us 0:05:48.480 --> 0:05:50.360 about your seeing in terms of companies when it comes 0:05:50.360 --> 0:05:52.760 to capital expenditures, especially when it comes to tech in 0:05:52.800 --> 0:05:55.280 your world. I think we are going to continue to 0:05:55.320 --> 0:05:58.280 see investment in critical areas of tech. I don't think 0:05:58.279 --> 0:06:01.520 that'll go away. And I think they areas of what's 0:06:01.560 --> 0:06:03.960 critical tech in here? From critical in me? What drives 0:06:03.960 --> 0:06:06.400 the piano? Like what you began, Hey, is it gonna 0:06:06.640 --> 0:06:08.560 depending upon the industry and it's gonna help me drive 0:06:08.600 --> 0:06:12.440 revenues or it's gonna help me manage cost or both. 0:06:13.200 --> 0:06:15.560 Ultimately that's where it does. It's simple piano. As a CEO, 0:06:15.640 --> 0:06:17.640 I look at that where does my spend and is 0:06:17.680 --> 0:06:19.599 it going to help me drive more revenues or manage 0:06:19.640 --> 0:06:22.080 my cost And that's where depending upon the industry, Hey, 0:06:22.120 --> 0:06:24.720 I want to understand churn better, I understand acquisition better, 0:06:24.960 --> 0:06:26.919 or oh my gosh, I have a huge amount of 0:06:26.920 --> 0:06:28.560 waste in my supplies and how do I reduce that? 0:06:28.880 --> 0:06:30.360 People are going to go invest in that kind of 0:06:30.400 --> 0:06:35.360 technology versus nice to have sidebars something. What if that 0:06:35.440 --> 0:06:37.480 fluff is going to go away? How are you thinking 0:06:37.520 --> 0:06:41.800 about the ownership of data? As we are increasingly in 0:06:41.839 --> 0:06:46.599 a world where data points exist everywhere, sensors to pick 0:06:46.680 --> 0:06:50.040 up that data exist everywhere. What about from the perspective 0:06:50.080 --> 0:06:53.359 of a normal human being, perhaps our investor audience, but 0:06:53.440 --> 0:06:55.560 also from the perspective of your customers. Where does the 0:06:55.560 --> 0:06:58.599 ownership conversation come in there? That's the one that's changing 0:06:58.600 --> 0:07:00.200 a lot. So data is one of those things. It's 0:07:00.200 --> 0:07:02.560 across the entire enterprise, right take a large organization. Every 0:07:02.600 --> 0:07:04.520 functional unit has their data and they manage it for 0:07:04.560 --> 0:07:06.520 their own purpose, you know, or if I'm the CMO, 0:07:06.560 --> 0:07:09.640 I'm managing it for my own you know, demanded purposes 0:07:09.640 --> 0:07:12.520 that if I'm the chief financial officer. But if you 0:07:12.560 --> 0:07:15.360 see the rise of the chief data officer, that really happened. 0:07:15.640 --> 0:07:18.560 And you know, serios also rules during the crisis more 0:07:18.600 --> 0:07:21.640 from a governance and compliance and we've been working with 0:07:21.640 --> 0:07:24.840 the studios diligently since then. In fact, we host SUDIO 0:07:24.880 --> 0:07:28.040 councils too, and that if you watch more and more 0:07:28.080 --> 0:07:31.000 and more, and the companies now have cdeos and from 0:07:31.120 --> 0:07:34.480 compliance oriented roles, they've gone into more business oriented roles 0:07:35.160 --> 0:07:38.280 and they're going in the strategy strategy. So hey, as 0:07:38.280 --> 0:07:40.400 a CEO, I like, okay, my functional units have the data, 0:07:40.440 --> 0:07:43.240 but I wan't like I won't understand the customer sentiment 0:07:43.280 --> 0:07:47.119 across everything. You know, my customer support, my marketing data, 0:07:47.160 --> 0:07:50.080 my sales data. Serios are becoming more and more important. 0:07:50.120 --> 0:07:51.960 And that is, by the way, good indicator of data 0:07:52.000 --> 0:07:54.240 becoming more and more in the sea. Are there limits 0:07:54.240 --> 0:07:56.800 the geographically to what you can do when it comes 0:07:56.840 --> 0:07:59.200 to analyzing data for a customer who's based in Europe 0:07:59.480 --> 0:08:01.560 versus a smer based in the United States, Yeah, I 0:08:01.560 --> 0:08:03.360 would use the limit. The world I would use is 0:08:03.400 --> 0:08:06.240 that there are differences. So you're right, like GDPR came 0:08:06.240 --> 0:08:08.280 along multiple years ago, so I think in Europe. In 0:08:08.320 --> 0:08:10.760 certain countries there's more sensitibility to how you can use 0:08:10.800 --> 0:08:13.600 the data, whereas in different countries it may be less. 0:08:13.640 --> 0:08:16.400 So that is true even different states like California. I mean, 0:08:16.440 --> 0:08:18.360 the laws are coming up across the board. I kind 0:08:18.400 --> 0:08:20.800 of believe that that's going to be a new normal 0:08:20.840 --> 0:08:24.040 where we'll have to manage data, the privacy and the 0:08:24.080 --> 0:08:27.200 security data while making sure. So what we see that 0:08:27.240 --> 0:08:29.960 gave rise to is governance, and that's a huge vector 0:08:30.000 --> 0:08:32.160 of business group. So here's what I hear from cio 0:08:32.240 --> 0:08:35.600 CIOs as us. I want to democratize data, but I 0:08:35.600 --> 0:08:37.480 don't want it to be a wild West to govern 0:08:37.559 --> 0:08:40.560 it for me. So and that's that we see that 0:08:40.559 --> 0:08:42.640 that has risen in the last couple of years, like 0:08:42.960 --> 0:08:44.880 very much. I want to create a data lake so 0:08:44.920 --> 0:08:47.600 everybody can go have added sharing of data. Yes, so 0:08:47.720 --> 0:08:50.520 I won't I want one place. I want to democratize data, 0:08:50.559 --> 0:08:52.520 but don't make it the Wild West, because it may 0:08:52.559 --> 0:08:54.679 not be compliance, it may be brand issues if the 0:08:54.720 --> 0:08:57.400 wrong data goes into the hands of wrong users. I mean, 0:08:58.040 --> 0:09:01.320 look at the pharmaceutical industry. Maybe in drug discovery and 0:09:01.360 --> 0:09:04.160 I also bring sales and marketing. You can put data 0:09:04.200 --> 0:09:07.200 together to understand, but different people should have access differently. 0:09:07.400 --> 0:09:08.800 That's what we see here. All we see that in 0:09:08.800 --> 0:09:11.760 the financial industry in terms of the division. Hey listen, UM, 0:09:11.840 --> 0:09:13.200 got a couple of minutes left here, and I do 0:09:13.320 --> 0:09:15.680 wonder you know, you were talking about supply chains and 0:09:15.720 --> 0:09:19.440 helping other companies and your clients manage that. When you 0:09:19.440 --> 0:09:21.200 look at some of the big macro issues, whether it's 0:09:21.240 --> 0:09:24.560 higher prices, supply chains, labor constraints, what's type of mind? 0:09:24.600 --> 0:09:27.760 What what of those big macro issues are affecting you. 0:09:27.760 --> 0:09:31.520 Guys at inform Aerica, you know, we obviously look at customers, uh, 0:09:31.760 --> 0:09:34.720 different industries and up operating differently. I look at obviously 0:09:35.120 --> 0:09:39.480 text spend carefully, I look at business priorities very differently. 0:09:39.480 --> 0:09:42.600 Which business priorities are getting optimized differently. The one beauty 0:09:42.600 --> 0:09:44.839 of the data businesses I caught it be a very 0:09:44.880 --> 0:09:48.120 recession receiving because okay, everybody needs are eight time you 0:09:48.200 --> 0:09:50.320 drive revenue. In a bad time, you drive down cost 0:09:50.720 --> 0:09:51.920 and and by the way, in the bad time, you 0:09:51.960 --> 0:09:53.360 also want to manage with me for the power for 0:09:53.440 --> 0:09:55.840 the future, So you need data for that. And that's 0:09:55.880 --> 0:09:58.640 what we see generally helps I see initiatives can go 0:09:58.720 --> 0:10:01.920 from growth growth, growth, growth to manage cost cost cost 0:10:01.920 --> 0:10:04.600 cost cost on a little bit of both. So and 0:10:04.679 --> 0:10:06.960 different industries on different places right now. But can you 0:10:06.960 --> 0:10:10.080 get all the workers you need? That is definitely I 0:10:10.120 --> 0:10:12.200 think it's a challenge that all of us face. Although 0:10:12.240 --> 0:10:14.880 having said that, I do believe that where the economy 0:10:14.960 --> 0:10:16.439 is right now, the second half of this hell will 0:10:16.440 --> 0:10:18.600 actually stabilize a lot of things. You do. Yeah, I think, 0:10:18.760 --> 0:10:22.040 because look up when when when when economy starts looking shaky, 0:10:22.320 --> 0:10:25.680 actrician always goes down, people get settled, people won't comfort 0:10:25.720 --> 0:10:28.640 people in safety. So our goal has always been, hey, 0:10:28.960 --> 0:10:30.960 we gotta we have a platform company. Well, the product 0:10:31.000 --> 0:10:33.760 company helped we give a lot more opportunities for people 0:10:33.800 --> 0:10:36.200 to come and do innovative work. And I do see 0:10:36.240 --> 0:10:38.200 that across the board. When I talked to my peers, 0:10:38.760 --> 0:10:42.439 it was really a difficult time for everybody. But I think, 0:10:42.440 --> 0:10:43.960 I think it will become very different in the second 0:10:44.160 --> 0:10:45.880 before we let you go, just in thirty seconds, you've 0:10:45.920 --> 0:10:48.120 been with Informatica for quite a while. Well, it was 0:10:48.160 --> 0:10:50.320 a public company then when it was taken private, now 0:10:50.440 --> 0:10:52.600 taking it public again just a few months ago what's 0:10:52.640 --> 0:10:54.679 the main difference in the company now when it was 0:10:54.800 --> 0:10:58.920 versus when I was prid were Well, I mean we 0:10:59.000 --> 0:11:03.200 were a single product on premise license company. Today we 0:11:03.200 --> 0:11:06.720 have a multi product cloud native platform company. We have 0:11:06.800 --> 0:11:09.600 a much bigger tim We only sell subscription and your 0:11:09.600 --> 0:11:11.199 cloud native. And the biggest thing I show you is 0:11:11.240 --> 0:11:13.760 that we were a less than fifty million dollars subscription 0:11:13.880 --> 0:11:16.280 at our company in six years ago. This is we've 0:11:16.280 --> 0:11:19.120 guided to a billion dollars in subscription change. So it's 0:11:19.120 --> 0:11:22.839 the biggest startup that got created within an existing company. 0:11:22.840 --> 0:11:25.720 And that's what you're proud of. It's a public private preference. 0:11:26.040 --> 0:11:29.600 Well you know what that can be days today the 0:11:29.600 --> 0:11:33.920 shares are higher, so probably a good day to be company. Well, yeah, 0:11:33.920 --> 0:11:35.800 thank you so much and thanks for hosting us here 0:11:35.840 --> 0:11:38.040 at Informatica World. We really appreciate it. Thanks for coming, 0:11:38.160 --> 0:11:41.800 the CEO of Informatica. You're listening to Bloomberg Business Week 0:11:42.000 --> 0:11:45.960 with Carol Masser and Bloomberg Quick Takes. Tim Stinovic on 0:11:46.120 --> 0:11:50.000 Bloomberg Radio. Shares the Facebook meta, by the way up 0:11:50.000 --> 0:11:52.880 for the one percent. This as the company has wrapped up. 0:11:53.360 --> 0:11:56.240 It's an annual shareholder meeting today a flurry of headlines, 0:11:56.320 --> 0:12:00.440 including one where Mark Zuckerberg of Meta Facebook says that 0:12:00.520 --> 0:12:02.920 Reel's is a top priority for company, which leads us 0:12:03.000 --> 0:12:05.680 so well to a story in the upcoming new issue 0:12:05.679 --> 0:12:08.840 of Bloomberg Business Week out tomorrow. Yeah. The story written 0:12:08.840 --> 0:12:11.680 by Brad Stone and Sarah Fryer. Sarah Fryer is Big 0:12:11.720 --> 0:12:14.439 Tech team leader for Bloomberg new She's also the author 0:12:14.480 --> 0:12:18.200 of the fantastic book No Filter, The Inside Story of Instagram. 0:12:18.360 --> 0:12:21.040 Sarah joins us this afternoon on the phone from San Francisco. 0:12:21.120 --> 0:12:24.280 Also with us is Joel Webber, the editor of Bloomberg 0:12:24.320 --> 0:12:27.640 Business Week. He's in the Bloomberg Interactive Broker studio back 0:12:27.679 --> 0:12:29.400 in New York. Joel, I want to start with the 0:12:29.400 --> 0:12:33.040 news that I learned in this piece that Instagram's co 0:12:33.160 --> 0:12:37.120 founder Kevin Sistrom just a few years ago. Uh, it's 0:12:37.280 --> 0:12:41.440 urged that Facebook bosses by an app called Musically that 0:12:41.520 --> 0:12:45.920 ultimately became TikTok. They passed on it, and now you 0:12:46.000 --> 0:12:48.640 have TikTok stealing a lot of thunder, especially when it 0:12:48.679 --> 0:12:52.280 comes to younger consumers that Facebook's Instagram wants. Yeah, that 0:12:52.400 --> 0:12:56.080 was a really uh juicy little tidbit um from from 0:12:56.080 --> 0:12:59.760 inside the world that is now now meta. And you know, 0:12:59.840 --> 0:13:01.720 I think if you zoom back and kind of think 0:13:01.720 --> 0:13:06.160 about what's made meta meta alt meta, is that it 0:13:06.280 --> 0:13:12.120 was obviously Facebook's relentless acquisitions and innovations, and a lot 0:13:12.160 --> 0:13:16.000 of those innovations UM were actually kind of copycat efforts, 0:13:16.040 --> 0:13:18.520 and sometimes that went really well. If you kind of 0:13:18.559 --> 0:13:20.719 think about what what some of the features that were 0:13:20.720 --> 0:13:23.800 built into two Instagram and the filters and sort of 0:13:23.840 --> 0:13:26.640 that snap vibe, it really allowed them to kind of 0:13:26.679 --> 0:13:30.920 like overcome the competition that they once had with snap Uh. 0:13:31.000 --> 0:13:33.160 And on the other side, they've they've had a few 0:13:33.440 --> 0:13:36.719 things that have floundered, So it's not like that that 0:13:36.880 --> 0:13:40.079 strategy that has kind of helped um. You know, Facebook 0:13:40.160 --> 0:13:44.680 reached three billion people around the world always works. But 0:13:44.880 --> 0:13:48.000 they have ran up against a competitor the likes of 0:13:48.040 --> 0:13:51.280 which they have not really had this much of an 0:13:51.280 --> 0:13:56.040 existential dread about. And that competitor is TikTok. And part 0:13:56.040 --> 0:13:59.880 of what makes TikTok go so well and has taken 0:14:00.000 --> 0:14:03.520 off during the pandemic is that and its ability to 0:14:03.600 --> 0:14:07.560 capture this youth culture. Is this algorithm that really surfaces 0:14:07.760 --> 0:14:10.080 people who who maybe you have never even used the 0:14:10.120 --> 0:14:13.800 platform before, and it harnesses it is this drug and 0:14:14.000 --> 0:14:17.240 there's a sense of discovery. And when you tap into 0:14:17.320 --> 0:14:21.160 what Facebook has, it maybe doesn't feel the same. And 0:14:21.520 --> 0:14:24.680 the you know, as Facebook here tries to pivot into 0:14:24.680 --> 0:14:29.720 the metaverse. Reels is the Instagram product that Sarah Fryer 0:14:29.760 --> 0:14:32.640 has written about here. Facebook is putting meta, is putting 0:14:32.640 --> 0:14:36.640 a ton of weight on reels, this feature within Instagram 0:14:36.680 --> 0:14:40.120 to be the thing that takes on TikTok. How is 0:14:40.160 --> 0:14:45.280 that going so far? Sarah, Well, it's it's really a 0:14:45.360 --> 0:14:48.320 big gamble. I mean, what they're doing here, it's hard 0:14:48.320 --> 0:14:51.960 to oversee how much is changing Instagram. Instagram teams to 0:14:52.040 --> 0:14:56.840 prominence based on its aspirational lifestyle photography. You know that 0:14:57.040 --> 0:14:58.680 the stuff you would go and you'd scroll and you 0:14:58.800 --> 0:15:03.440 see people their vacations, they're having their nice meals. Um, 0:15:03.480 --> 0:15:07.760 this this reel experience. It's all videos, short form video, 0:15:08.480 --> 0:15:12.400 and they're forcing it into every user feed. So when 0:15:12.400 --> 0:15:14.880 you scroll through those nice photos, you're going to get 0:15:14.920 --> 0:15:18.040 these videos of sound, right, and if you quick on them, 0:15:18.360 --> 0:15:21.080 you're in in real you can't it's like hard to 0:15:21.080 --> 0:15:23.920 get out of it. I I've you know, watch people 0:15:24.040 --> 0:15:27.120 try this um and and just get really confused and like, Okay, 0:15:27.120 --> 0:15:30.760 what's happening to Instagram? And it might even get more 0:15:30.880 --> 0:15:33.960 redesigned in that direction. You might eventually open Instagram and 0:15:33.960 --> 0:15:38.000 it's all the short form videos basically essentially TikTok. So 0:15:38.320 --> 0:15:41.680 it's not just that they're trying to copy TikTok, it's 0:15:41.760 --> 0:15:47.800 that they are basically completely reinventing Instagram in the process 0:15:48.120 --> 0:15:51.880 because they're so desperate to bring back that team demographic, 0:15:51.960 --> 0:15:55.080 which the Zuckerberg sees as the future. I mean, these 0:15:55.120 --> 0:15:57.560 people they develop their habits, and they have their habits, 0:15:57.560 --> 0:16:00.280 they have their communities, they've established it, and he wants 0:16:00.320 --> 0:16:04.480 them to be establishing it on his platforms. And Instagram 0:16:04.680 --> 0:16:08.080 is his It's become like his Swiss Army knife of 0:16:08.120 --> 0:16:11.800 the team demographic, which has made Instagram incredibly confusing and 0:16:11.960 --> 0:16:15.880 pack the features, and um, you know, it's a risk. 0:16:15.960 --> 0:16:18.400 It's a big risk because it's such an important property. 0:16:18.400 --> 0:16:21.680 It's it's the main revenue driver for Facebook, the main 0:16:21.760 --> 0:16:26.760 revenue growth driver, I say, and you know they're they're 0:16:26.880 --> 0:16:30.080 risking it to tibet the farm on becoming TikTok walk 0:16:30.160 --> 0:16:34.560 us through that confusion that that users are are confronted 0:16:34.600 --> 0:16:37.680 with when they now launch Instagram, which you used to 0:16:37.720 --> 0:16:44.560 be this well curated, square boxed uh platform, right um, 0:16:44.600 --> 0:16:46.920 and you could curate it and it was awesome and 0:16:47.200 --> 0:16:49.440 very simple. What what does it look like now and 0:16:49.480 --> 0:16:51.960 what could it become? Because you have some interesting reporting 0:16:51.960 --> 0:16:54.720 on that well. In the way I described it in 0:16:54.760 --> 0:16:57.440 the story, it's just like it's like you're you're cruising 0:16:57.480 --> 0:17:00.000 to required art gallery, neutral in the corner, and you're 0:17:00.080 --> 0:17:02.640 in a dance party. It can be very jarring. And 0:17:02.720 --> 0:17:06.719 if you're in the mode of silence images and then 0:17:06.720 --> 0:17:10.160 you go into sound, um, your brain is just working differently. 0:17:10.200 --> 0:17:13.240 And so I think that what people come to Instagram 0:17:13.320 --> 0:17:17.320 for um. People have spent years, spent more than a 0:17:17.359 --> 0:17:20.639 decade curating who they follow on Instagram. Now when you 0:17:20.680 --> 0:17:23.359 go to Instagram, the top thing you are going to 0:17:23.400 --> 0:17:26.200 get it suggestions. Your feet is going to become full 0:17:26.320 --> 0:17:29.040 of stuff that you didn't say you wanted, and a 0:17:29.080 --> 0:17:31.280 lot of it is going to be experimental and not 0:17:31.480 --> 0:17:34.720 based on what you've been following before. And that's that's 0:17:34.720 --> 0:17:37.240 a huge bet for Facebook at large. They want to 0:17:37.240 --> 0:17:40.240 become more about discovery, for the last fourteen years since 0:17:40.280 --> 0:17:42.240 the invention of the New Seed, they've been really good 0:17:42.240 --> 0:17:44.560 at showing you what they already know you want to see. 0:17:44.880 --> 0:17:47.840 Now it's about showing you stuff that you never even 0:17:47.880 --> 0:17:50.280 knew you wanted to see, which TikTok is really good 0:17:50.280 --> 0:17:55.720 at and Facebook is really not yet, Sarah. These platforms 0:17:55.720 --> 0:17:58.879 are nothing without the people who use them, without the 0:17:58.880 --> 0:18:00.879 people who create a content. And you spoke to some 0:18:00.960 --> 0:18:04.960 influencers who have done pretty well on TikTok. What's Instagram 0:18:05.000 --> 0:18:09.280 doing to try to court them and is it working well? 0:18:09.760 --> 0:18:14.000 The number one thing that matters to these these content 0:18:14.040 --> 0:18:18.040 creators right now is money. So if Instagram says, listen, 0:18:18.040 --> 0:18:21.200 our algorithm is only going to show people your content 0:18:21.320 --> 0:18:23.760 if you're making real. They're going to make real because 0:18:23.760 --> 0:18:25.680 they have to. This is their livelihood. But they're not 0:18:25.720 --> 0:18:28.679 gonna like it, um necessarily. And and so I suppose 0:18:28.720 --> 0:18:31.879 that creators who said who that listen, Like, you know, 0:18:31.920 --> 0:18:35.680 they got me here, I have to make reels or else, um. 0:18:35.720 --> 0:18:38.560 But you know, it's it's not the same, Like I'm 0:18:38.600 --> 0:18:40.639 not connecting with my audience the way I used to. 0:18:41.600 --> 0:18:44.400 And you know, I just wonder what happens when that 0:18:44.520 --> 0:18:47.560 money pods drives up and and they're not you know 0:18:47.560 --> 0:18:50.240 they really they have to see the creators. They have 0:18:50.320 --> 0:18:52.600 to create a culture around it. You know, when you 0:18:53.040 --> 0:18:55.359 go and talk to somebody on the street, they're not 0:18:55.400 --> 0:18:58.159 going to know necessarily what reels is. They know what 0:18:58.280 --> 0:19:01.240 Instagram is, they know what Facebook is. Um, do you 0:19:01.280 --> 0:19:04.920 know what TikTok is? But it's using things to describe 0:19:05.280 --> 0:19:10.320 too regular people because they're not part of this creator world. Um. 0:19:10.400 --> 0:19:13.800 These influence are the people who creates this content. They 0:19:13.840 --> 0:19:16.960 are the ones that are driving the culture. And Instagram 0:19:17.000 --> 0:19:20.000 needs to prove that it can create new stars on 0:19:20.080 --> 0:19:23.400 Instagram through this strategy, not just keep the old ones 0:19:23.440 --> 0:19:26.920 writing it out until a new classroom comes along. Wow. 0:19:27.080 --> 0:19:30.000 Another great deep dive for me. Sarah and understanding cert 0:19:30.119 --> 0:19:32.400 like this world and Meta and Facebook. Sarah Fryer, big 0:19:32.400 --> 0:19:34.920 tech team leader at Bloomberg and Jill Webber, the editor 0:19:34.920 --> 0:19:39.080 of Business Week. This is Bloomberg Business Week with Carol 0:19:39.119 --> 0:19:43.960