WEBVTT - Nike Jumps as Outlook Creates Optimism in Turnaround 0:00:02.720 --> 0:00:10.600 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.600 --> 0:00:14.560 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:14.600 --> 0:00:18.520 Eastern on Applecarplay and Android Auto with the Bloomberg Business App. 0:00:18.640 --> 0:00:21.920 Listen on demand wherever you get your podcasts, or watch 0:00:21.960 --> 0:00:23.800 us live on YouTube. 0:00:23.840 --> 0:00:25.600 The Nike putting up some good results. 0:00:25.680 --> 0:00:29.240 The stock is up fifteen percent here today. That's got 0:00:29.240 --> 0:00:31.200 a market kappa north of one hundred billion dollars. 0:00:31.200 --> 0:00:31.760 Put them oil. 0:00:31.840 --> 0:00:34.960 She covers all the retailers for Bloomberg Intelligence. She joins 0:00:35.040 --> 0:00:37.480 us now pooh them. The street likes what bloom What Nike? 0:00:37.479 --> 0:00:39.919 You had to say? What did you hear on their earnings? 0:00:40.000 --> 0:00:42.400 Yeah, you know, it kind of seems like we hit 0:00:42.440 --> 0:00:44.800 the bottom, so I think, you know, there's only upside 0:00:44.800 --> 0:00:48.600 from here, is what it seems like. The results weren't spectacular. 0:00:48.680 --> 0:00:51.920 Sales still fell twelve percent, but they're expected to fall 0:00:52.040 --> 0:00:54.600 mid single digits in the first fist whole quarter, which 0:00:54.640 --> 0:00:58.400 was ahead of consensus. And it seems that things are working. 0:00:58.480 --> 0:01:01.640 The holiday order book is up, so you know, positive 0:01:01.720 --> 0:01:05.800 things going forward, and still a choppy environment. We're not 0:01:05.880 --> 0:01:09.280 at positive sales. It's still going to take time, but 0:01:09.360 --> 0:01:12.720 I think we've hit the bottom. 0:01:12.880 --> 0:01:14.240 Hey, put on what is it? 0:01:14.280 --> 0:01:14.440 Though? 0:01:14.440 --> 0:01:16.200 We were breaking it down with you last night after 0:01:16.200 --> 0:01:18.440 the earnings broke and the stock was kind of bouncing around, 0:01:18.640 --> 0:01:21.600 you know, and so obviously some stuff got clarified on 0:01:21.640 --> 0:01:22.160 the call with. 0:01:22.240 --> 0:01:23.679 Analysts and investors. 0:01:23.680 --> 0:01:26.440 What is it in particular did they say or say 0:01:26.440 --> 0:01:29.119 over and over again that kind of gave investors hope 0:01:29.120 --> 0:01:31.320 and saying that, Okay, yeah, maybe the worst is over. 0:01:32.520 --> 0:01:34.959 Yeah. The first thing is on the inventory, and we 0:01:35.000 --> 0:01:38.200 spoke about yesterday inventories were basically just flat right, and 0:01:38.240 --> 0:01:40.600 you expected to see them down more. They talked a 0:01:40.640 --> 0:01:43.039 little bit about that, and they talked about how the 0:01:43.200 --> 0:01:46.560 order book is stronger heading into the holiday season. So 0:01:46.680 --> 0:01:48.880 that is why they're building up some of the inventory. 0:01:48.920 --> 0:01:53.000 They're continuing to clear out access inventory of things like 0:01:53.040 --> 0:01:54.920 the dunk, which they have too much of and they 0:01:55.000 --> 0:01:57.200 actually do want to get rid of. But then they're 0:01:57.200 --> 0:02:00.520 building inventory of new things which are selling, which there 0:02:00.560 --> 0:02:03.800 is demand for. Store sales were positive, the holiday order 0:02:03.840 --> 0:02:07.240 book is positive. Those were really good indications as we 0:02:07.280 --> 0:02:10.320 move forward, and their guidance, of course was better than expected. 0:02:10.520 --> 0:02:12.760 So I think all of that together just kind of 0:02:12.800 --> 0:02:16.000 sent the message that we're going up from here, things 0:02:16.040 --> 0:02:16.800 are going to get better. 0:02:19.320 --> 0:02:21.800 Pudin What are they saying about the impact of tariffs, 0:02:21.840 --> 0:02:24.919 either on their cost structure or on consumer demand. 0:02:26.000 --> 0:02:28.880 Yeah, so tariffs definitely have an impact on their cost structure. 0:02:29.000 --> 0:02:31.120 We sought in the margin guidance, which there's one hundred 0:02:31.160 --> 0:02:34.000 basis point hit from tariffs. It's a billion dollars in 0:02:34.040 --> 0:02:38.720 additional costs, So there is definitely implications from that. They 0:02:38.760 --> 0:02:41.920 are able to offset a lot of it through price increases, 0:02:42.000 --> 0:02:46.280 internal efficiencies, supplier negotiations, but it's still going to hit 0:02:46.320 --> 0:02:49.840 the margin line. In terms of demand, it's not clear 0:02:49.880 --> 0:02:52.920 that it's actually pulled back any demand yet. And the 0:02:52.960 --> 0:02:55.960 way the Nike is strategically taking up these price increases 0:02:56.040 --> 0:02:59.120 five dollars on shoes that are over one hundred dollars, 0:02:59.240 --> 0:03:02.960 no increase on kids, et cetera. I think their customer 0:03:03.120 --> 0:03:07.880 can absorb that without pushing back meaningfully unless things deteriorate 0:03:07.919 --> 0:03:10.720 in the consumer macro world from here onward. 0:03:13.080 --> 0:03:14.560 But am I going to tell you Paul's got a 0:03:14.560 --> 0:03:16.600 pretty snazzy pair of loafers on. 0:03:17.120 --> 0:03:19.359 I'm just going to say I love the color. They're 0:03:19.400 --> 0:03:21.840 pretty cool. I don't know if he has snowfers yet 0:03:22.560 --> 0:03:25.359 from Nike, but I mean these are not inexpensive. 0:03:25.360 --> 0:03:27.440 We talked about that last night too, and the resale 0:03:28.160 --> 0:03:30.240 of some of them going for like five hundred dollars. 0:03:30.360 --> 0:03:32.960 I mean, this is a company that does continue to 0:03:32.960 --> 0:03:37.000 have the ability to innovate and really capture consumers and 0:03:37.200 --> 0:03:38.880 you know, really be a product in demand. 0:03:40.240 --> 0:03:42.560 Yeah, you said it absolutely right. You know, Nike just 0:03:42.600 --> 0:03:46.080 needs to innovate. It needs to bring performance product, it 0:03:46.120 --> 0:03:48.920 needs to bring style more of it. It's not that 0:03:48.960 --> 0:03:51.040 they never did it. They did, but they just needed 0:03:51.080 --> 0:03:52.960 to continue to be at the cutting edge of it. 0:03:53.400 --> 0:03:55.960 And they're coming back to that. They're coming back to 0:03:56.000 --> 0:03:58.520 their roots, they're coming back to sports, They're coming back 0:03:58.560 --> 0:04:02.760 to innovation and being the brand that cuts out the 0:04:02.800 --> 0:04:06.280 newness first. So I think this is one example of it. Clearly, 0:04:06.320 --> 0:04:09.240 it's not going to be you know, the shoe that's 0:04:09.280 --> 0:04:12.680 going to be made in you know, millions of quantity. 0:04:12.760 --> 0:04:15.080 So that's why you're seeing it on the resale platforms. 0:04:15.320 --> 0:04:18.720 But as long as they stay true to performance and sports, 0:04:18.839 --> 0:04:20.839 I think they will continue to do better. 0:04:23.560 --> 0:04:25.880 Hey put them in in the sneaker business. 0:04:25.920 --> 0:04:29.560 How important is the athletic endorsement, getting signing up the 0:04:29.640 --> 0:04:32.599 newest pro that kind of thing. I think a Cooper flag, 0:04:32.640 --> 0:04:35.360 the number one draft pick in the NBA. Do g 0:04:35.400 --> 0:04:37.880 Red wondering if that's still a thing. 0:04:39.320 --> 0:04:41.240 It is a thing. I mean, Nike definitely has a 0:04:41.279 --> 0:04:45.120 deep pockets to get the athletes that are already some 0:04:45.240 --> 0:04:47.040 of the biggest athletes. But when you think about the 0:04:47.120 --> 0:04:49.880 rookies are the ones that are coming up. If Nike 0:04:50.000 --> 0:04:52.839 could secure the best ones, it definitely helps them because 0:04:52.839 --> 0:04:55.520 they resonate and they connect better with shoppers. So creating 0:04:55.560 --> 0:04:58.120 a line for them or creating the shoe that they're 0:04:58.160 --> 0:05:01.960 wearing or their own shoe help to connect with the shopper. 0:05:02.000 --> 0:05:04.800 And that's how some of these other rivals of theirs 0:05:05.160 --> 0:05:08.760 are making their mark and really taking shares. They're investing 0:05:08.880 --> 0:05:11.120 and they're getting these rookies and they're able to draw 0:05:11.160 --> 0:05:14.600 these connections that help them. So I do think endorsements 0:05:15.080 --> 0:05:18.000 in sports and getting the right athlete is still very 0:05:18.120 --> 0:05:20.240 very important to the game and to any athletes. 0:05:20.279 --> 0:05:23.640 Share brand, all right. 0:05:23.560 --> 0:05:25.159 Put them Oyle, thank you so much. We appreiate it. 0:05:25.160 --> 0:05:25.720 Put them Oyle. 0:05:25.920 --> 0:05:29.640 She covers all the retail companies for Bloomberg Intelligency based 0:05:29.680 --> 0:05:30.080 down there. 0:05:30.000 --> 0:05:31.040 At Princeton and New Jersey. 0:05:31.080 --> 0:05:33.920 A great quarter from the perspective of the market stocks 0:05:33.960 --> 0:05:34.800 of fifteen percent. 0:05:34.839 --> 0:05:36.560 It had been down, you know, kind of on the 0:05:36.640 --> 0:05:37.039 year or so. 0:05:37.400 --> 0:05:40.480 As Punham suggested, it seems like the market's saying these 0:05:40.480 --> 0:05:41.479 guys have kind of hit bottom. 0:05:41.480 --> 0:05:44.000 They've kind of now have some runway to go. So 0:05:44.040 --> 0:05:45.000 we keep an eye on that. 0:05:45.080 --> 0:05:47.239 Even with that bump up, as you said, sixteen percent 0:05:47.320 --> 0:05:49.440 or so, it's still done about four percent yeter date. 0:05:49.520 --> 0:05:51.120 Just shows you what it's been coming back on. 0:05:52.920 --> 0:05:56.640 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:05:56.720 --> 0:05:59.960 weekdays at ten am Eastern on Applecarplay and Android attil 0:06:00.200 --> 0:06:03.120 with the blue Berg Business app. Listen on demand wherever 0:06:03.160 --> 0:06:06.279 you get your podcasts, or watch us live on YouTube. 0:06:06.960 --> 0:06:09.799 Carol Masher Paul Sweeney, We're live here at the home 0:06:10.480 --> 0:06:12.680 of Michael Lobe out here in Southampton and New York 0:06:12.720 --> 0:06:16.040 at the annual Uncharted Summit where they get together a 0:06:16.040 --> 0:06:20.600 whole bunch of entrepreneurs, funders and they talk about creating business, 0:06:20.720 --> 0:06:23.960 creating value. We're joining right now by our co host 0:06:24.040 --> 0:06:28.120 Michael Lowe, founder and CEO of lob dot NYC and 0:06:28.200 --> 0:06:29.839 no Freedom, CEO of Uncharted. 0:06:30.240 --> 0:06:31.800 Gents, thanks so much for joining us. Got the light 0:06:31.839 --> 0:06:32.680 blue and the dark blue. 0:06:32.720 --> 0:06:34.880 We're looking solid here Hampton's Casual. 0:06:34.880 --> 0:06:37.719 I got my support, cooks, my best effort I can do. 0:06:37.880 --> 0:06:41.279 Michael, talk to us about what this conference is about. 0:06:41.320 --> 0:06:43.000 What do you guys really look to do here. 0:06:43.400 --> 0:06:45.040 So we're not going to talk about your wardrobe. 0:06:45.120 --> 0:06:48.080 We're not going to go there because got great flowers. 0:06:47.640 --> 0:06:50.200 On it looks amazing. Check busses. 0:06:50.680 --> 0:06:55.040 Yeah, somebody dressed you in the morning exactly. So what 0:06:55.080 --> 0:06:59.240 the intention is is that Noah and I started building 0:06:59.400 --> 0:07:02.520 Uncharted four years ago, was in the teeth of COVID 0:07:03.120 --> 0:07:05.760 when nobody was getting together with anybody else, and we 0:07:06.040 --> 0:07:09.760 started having dinners at my house in the city. 0:07:10.280 --> 0:07:12.120 And was very popular. 0:07:12.200 --> 0:07:16.040 And what the thesis is is that entrepreneurs need as 0:07:16.160 --> 0:07:21.520 much support as they can get, including emotional support, and 0:07:22.040 --> 0:07:24.640 the best way to do that is put entrepreneurs in 0:07:24.640 --> 0:07:28.880 a room with other entrepreneurs and they are as a class. 0:07:29.120 --> 0:07:33.200 They drive the economy, drive jobs, drive wealth, and yet 0:07:34.520 --> 0:07:38.760 there I think underappreciated, and as a serial entrepreneur myself 0:07:38.800 --> 0:07:45.160 and actually one or two things worked, I'm very empathetic 0:07:45.360 --> 0:07:47.720 and just with all the miles on the tires. I 0:07:47.760 --> 0:07:50.440 am kind of a senior statesman by definition. Right, this 0:07:50.520 --> 0:07:53.760 is a young guy's game. I say that I have 0:07:53.800 --> 0:07:57.120 the privilege of working with people half my age and 0:07:57.120 --> 0:07:59.360 twice as smart. I used to say that. Now it's 0:07:59.600 --> 0:08:03.040 three as smart and one third of my age, but 0:08:03.120 --> 0:08:06.280 that was the intention. And it's grown to tribe of 0:08:06.400 --> 0:08:10.800 maybe twenty five hundred entrepreneurs, of which about a third 0:08:10.840 --> 0:08:12.920 of them show up to this, so we will have 0:08:12.920 --> 0:08:13.960 about eight hundred today. 0:08:14.080 --> 0:08:14.960 No, come on in on this. 0:08:15.040 --> 0:08:17.880 You're the CEO of Uncharted too, right, and so we're 0:08:17.920 --> 0:08:19.440 seeing things being set up. There's going to be a 0:08:19.440 --> 0:08:21.840 lot of great conversations and speakers going on. Tell us 0:08:21.840 --> 0:08:24.920 what it's been grown into and what kind of conversations 0:08:24.960 --> 0:08:26.240 are going to be happening later on. 0:08:26.520 --> 0:08:29.520 The common thread of everything that we've done it Uncharted 0:08:29.560 --> 0:08:32.040 since the first dinner on May twenty, twenty twenty one. 0:08:32.080 --> 0:08:33.400 And I'll never forget it. 0:08:33.400 --> 0:08:35.439 Was it just you too? By the way, Justice us. 0:08:35.360 --> 0:08:36.720 To a dinner. Yeah, it was just us too. We 0:08:36.760 --> 0:08:38.400 just sat and talked for four hours and here we go. No, 0:08:38.520 --> 0:08:40.360 not about it. We also held ounce we did all 0:08:40.440 --> 0:08:42.160 dance the whole time. Yeah, it's very romantic. 0:08:42.200 --> 0:08:44.640 Now, we had about twenty entrepreneurs around the table, kind 0:08:44.640 --> 0:08:46.200 of yeah, eight of each of our friends and then 0:08:46.200 --> 0:08:48.160 a couple of others. If you will look, the common 0:08:48.200 --> 0:08:50.560 thread of every single event we've done, whether it's our 0:08:50.600 --> 0:08:53.680 dinners or the past three summits of the breakfast we've done, 0:08:53.960 --> 0:08:58.920 has always been trying to create safe spaces for real entrepreneurs, founders, 0:08:58.960 --> 0:09:01.920 exceptional particips bent in the entrepreneuri community, as we say, 0:09:02.200 --> 0:09:05.200 to truly drop their guard, drop their hair, and trust 0:09:05.200 --> 0:09:07.200 that they're in an environment where they can speak openly 0:09:07.240 --> 0:09:10.720 and honestly any entrepreneur or anyone who's building and really 0:09:10.760 --> 0:09:13.200 doing it, the real ones. Hopefully this will resonate when 0:09:13.200 --> 0:09:15.800 they hear it. It is really f and hard. It's very 0:09:15.800 --> 0:09:17.640 hard to build businesses. It's really hard to play this 0:09:17.679 --> 0:09:19.120 game at the high level. And I think if we 0:09:19.160 --> 0:09:22.200 can offer a rare environment where people can feel like 0:09:22.200 --> 0:09:24.040 they are amongst their true peers, or they can really 0:09:24.120 --> 0:09:25.839 drop their guard and connect with people in a place 0:09:25.880 --> 0:09:27.360 where no matter who you go talk to, they're all 0:09:27.360 --> 0:09:28.719 going to be exceptional. 0:09:28.679 --> 0:09:29.240 It's special. 0:09:29.320 --> 0:09:31.280 And so we've really tried to guard the energy. We've 0:09:31.280 --> 0:09:33.480 really tried to keep the sanctity of the fact that 0:09:33.520 --> 0:09:35.200 if you come to an uncharted event, you're going to 0:09:35.200 --> 0:09:38.080 meet someone amazing. And that's really been the common thread. 0:09:38.160 --> 0:09:40.000 I just want to say, it's a reminder of that, 0:09:40.080 --> 0:09:43.120 like Google, Apple, all of these companies that are now 0:09:43.200 --> 0:09:44.920 you know, the biggest market caps that are out there 0:09:44.920 --> 0:09:46.880 and that we talk about and you know all the time. 0:09:47.000 --> 0:09:49.360 I mean, they all started as an idea an entrepreneur. 0:09:49.960 --> 0:09:50.760 And that's the point. 0:09:50.920 --> 0:09:53.080 Yeah, one percent, And if you look at kind of 0:09:53.200 --> 0:09:57.160 success rates and everything else, if you're an entrepreneur, if 0:09:57.200 --> 0:09:58.200 you really knew all. 0:09:58.080 --> 0:10:00.400 That stuff, why would you you do this? 0:10:01.559 --> 0:10:05.320 Because the failure rate is incredibly high, hours are incredibly long, 0:10:05.520 --> 0:10:08.959 the pay you know, is dreadful until it's not until 0:10:08.960 --> 0:10:09.760 you have a big score. 0:10:10.200 --> 0:10:12.400 But the number of big scores is very very small. 0:10:13.000 --> 0:10:15.720 And there's so many forces and so many you know, 0:10:15.920 --> 0:10:20.680 so many exogenous things that are you know, anti entrepreneur 0:10:20.800 --> 0:10:24.160 that we wanted to have a sanctuary here that other 0:10:24.280 --> 0:10:27.480 entrepreneurs can meet other entrepreneurs. And Noah, you're fond of 0:10:27.520 --> 0:10:29.640 saying that not a week or two goes by where 0:10:29.679 --> 0:10:32.880 we don't get a phone call saying I met my 0:10:33.080 --> 0:10:35.040 co founder here two years ago. 0:10:35.320 --> 0:10:39.280 Yep, No, who's a What are the areas that are 0:10:39.360 --> 0:10:40.720 most interested entrepreneurs today? 0:10:40.760 --> 0:10:42.480 Is it technology? Is healthcare? 0:10:42.600 --> 0:10:44.920 Are there certain industries that are getting most of the attention. 0:10:45.280 --> 0:10:47.840 Look, I think the obvious buzzword that you can't go 0:10:47.960 --> 0:10:49.400 too far in any of the new cycles to that 0:10:49.480 --> 0:10:52.280 hearing is AI. And I think that unlike other cycles 0:10:52.280 --> 0:10:54.920 that have come and went and entered the Zeitgeison left, 0:10:54.920 --> 0:10:57.360 this one feels very real. I can tell you that 0:10:57.400 --> 0:10:59.960 amongst all my friends, whether they're in CpG, health tech, 0:11:00.200 --> 0:11:02.880 pure AI, deep tech, what have you tech, and all 0:11:02.920 --> 0:11:06.000 of them are thinking explicitly about how AI is going 0:11:06.000 --> 0:11:07.680 to impact their business if they're not already, and how 0:11:07.720 --> 0:11:09.679 they're going to get into it. So I think we're 0:11:09.720 --> 0:11:11.079 certainly going to talk about that a lot today. I 0:11:11.080 --> 0:11:12.400 think it's top of mind for a lot of people. 0:11:12.520 --> 0:11:14.960 The movement is real. I think that the implications and 0:11:15.000 --> 0:11:18.240 repercussions are unclear how it's going to land right now, 0:11:18.280 --> 0:11:20.600 but everybody's thinking about it, and they should be. 0:11:20.720 --> 0:11:23.120 But I think it's unclear, but it's going to be brought, 0:11:23.120 --> 0:11:24.760 It's going to be broad it's going to be brought 0:11:24.840 --> 0:11:28.560 and you mentioned cycles. I've been around for a few. 0:11:29.559 --> 0:11:33.120 This reminds me of the late nineties, where the Internet 0:11:33.320 --> 0:11:35.120 happened and we had a lot of false starts. 0:11:35.120 --> 0:11:35.920 Two three years ago. 0:11:35.960 --> 0:11:39.679 Everybody was talking about NFTs before that, blockchain before that, 0:11:39.720 --> 0:11:42.040 cannabis before that, you know, something else. 0:11:42.760 --> 0:11:45.640 But this feels like another eruption. 0:11:45.880 --> 0:11:49.120 This feels like another advent of the Internet, one that 0:11:49.160 --> 0:11:50.600 we haven't had in absolutely years. 0:11:50.800 --> 0:11:53.120 Yeah, on the same level, no doubt about it, or even. 0:11:52.920 --> 0:11:55.520 More I think on the same level. 0:11:55.600 --> 0:11:55.800 Yeah. 0:11:55.800 --> 0:11:58.240 I mean, you know, it's hard to project and predict, 0:11:58.280 --> 0:12:01.840 but I had breakfast with a heroic. 0:12:01.640 --> 0:12:03.040 Entrepreneur a couple of days ago. 0:12:03.920 --> 0:12:06.080 He has built a business now worth one point eight 0:12:06.120 --> 0:12:09.480 billion dollars, and over breakfast, he says, I have two 0:12:09.559 --> 0:12:12.079 hundred and seventy people by year end, it's going to 0:12:12.160 --> 0:12:12.679 be one twenty. 0:12:12.880 --> 0:12:14.520 Yeah, okay, interesting. 0:12:14.600 --> 0:12:16.960 I would add to that, if I'm may, sorry, I 0:12:17.000 --> 0:12:19.240 think that there's this interesting tension with AI right now 0:12:19.240 --> 0:12:21.240 where I think Michael's right, and I would even argue 0:12:21.240 --> 0:12:23.000 that this might I didn't live through the late nineties 0:12:23.040 --> 0:12:26.360 period of seeing it at least all right, let me see, 0:12:26.360 --> 0:12:27.360 thanks for having me guys, if. 0:12:27.320 --> 0:12:32.640 You know, but I think that let your hair down shot. 0:12:33.720 --> 0:12:33.840 Why. 0:12:34.760 --> 0:12:36.520 I know, it's crazy everyone asked me that, But I 0:12:36.520 --> 0:12:38.480 think there's an inherent tension where I actually think it 0:12:38.520 --> 0:12:40.920 could be more disruptive and at the same time, I 0:12:40.960 --> 0:12:42.480 do think that there's a lot of people who are 0:12:42.520 --> 0:12:44.160 betting big dollars than AI that are going to get 0:12:44.160 --> 0:12:45.600 wiped out because I think there's going to be an 0:12:45.600 --> 0:12:49.240 absolute power law dynamic here where small select group of 0:12:49.240 --> 0:12:52.480 companies at the top end aggregate a ton of power 0:12:52.480 --> 0:12:54.080 and resource. I also think it's going to be a 0:12:54.080 --> 0:12:56.040 Barbell warre on the bottom end. You know, I've invested 0:12:56.080 --> 0:12:57.920 personally in companies that have like two or three people 0:12:57.920 --> 0:13:01.079 on the team and have rocketed millions in are because 0:13:01.080 --> 0:13:03.400 they're able to get ten x productivity if it's a 0:13:03.480 --> 0:13:06.120 killer founder. So I think there's a Barbell thing happening 0:13:06.160 --> 0:13:08.000 right now where the killer founders who actually know how 0:13:08.040 --> 0:13:10.440 to leverage resources are going to crush it, as are 0:13:10.440 --> 0:13:11.120 the big businesses. 0:13:11.160 --> 0:13:11.280 Well. 0:13:11.280 --> 0:13:13.600 Because of that and what AI can do generative AI 0:13:13.880 --> 0:13:16.840 and so on, I mean, does it give entrepreneurs even 0:13:16.880 --> 0:13:18.880 more opportunities to start up? We talked about that after 0:13:18.920 --> 0:13:21.160 the pandemic. Basically create a website and you can go 0:13:21.720 --> 0:13:24.480 and then maybe that's simplifying things, But does AI kind 0:13:24.480 --> 0:13:27.800 of have a multiplier effect to on entrepreneurial. 0:13:27.240 --> 0:13:29.880 Activities Without a doubt, I think that's opportunities. 0:13:29.960 --> 0:13:30.600 I think that's right. 0:13:30.640 --> 0:13:33.079 And if you just look at what has happened over 0:13:33.080 --> 0:13:36.800 the years, you know, it used to be that if 0:13:36.840 --> 0:13:40.160 you build a business, a brand new business. 0:13:39.520 --> 0:13:40.880 In the Internet, you need it. 0:13:40.920 --> 0:13:43.840 You needed hundreds of people, right, and now that's really 0:13:43.840 --> 0:13:45.079 compressed to just a few. 0:13:45.559 --> 0:13:48.000 But to Noah's point, there's. 0:13:47.760 --> 0:13:49.040 Going to be winners and there's going to be a 0:13:49.080 --> 0:13:51.280 lot of losers, and that's very hard to predict. 0:13:51.360 --> 0:13:53.839 Michael, talk to us about monetization. I'm not seeing a 0:13:53.880 --> 0:13:56.079 lot of IPOs. I'm not seeing a lot of m 0:13:56.120 --> 0:14:00.320 and A. How do these great entrepreneurs monetize the value 0:14:00.360 --> 0:14:00.920 they've created? 0:14:02.280 --> 0:14:03.520 That's a that's a great question. 0:14:03.600 --> 0:14:06.840 I would I would say that everything you just mentioned 0:14:06.880 --> 0:14:09.280 is part of a cycle, and we're just in that 0:14:09.320 --> 0:14:11.360 type of cycle where everything is a little bit bollock 0:14:11.400 --> 0:14:15.079 stop uh, But you know it's it's we're going to 0:14:15.120 --> 0:14:16.560 be on the other side of that and there's going 0:14:16.640 --> 0:14:19.960 to be some great companies built, and there's going to 0:14:20.000 --> 0:14:21.680 be some great flameouts. A lot of people are going 0:14:21.720 --> 0:14:23.360 to lose a lot of money, and then there's going 0:14:23.400 --> 0:14:26.400 to be a few that are going to be extraordinarily successful. 0:14:26.480 --> 0:14:29.040 But to your point, we can build it now with 0:14:29.280 --> 0:14:33.240 instead of three hundred people, three and there's been predictions 0:14:33.240 --> 0:14:35.360 that there's going to be a unicorn with all of 0:14:35.440 --> 0:14:36.000 three people. 0:14:36.560 --> 0:14:38.200 Serious, Yeah, I do that. 0:14:38.440 --> 0:14:40.480 Yeah, Okay, that kind of makes sense. And we've started 0:14:40.520 --> 0:14:42.440 to see IPOs actually in general come to market and 0:14:42.480 --> 0:14:45.840 it's a much more favorable market. I got to ask you, 0:14:45.920 --> 0:14:48.880 I think we'd be remiss of the macro that's going 0:14:48.960 --> 0:14:53.040 on and different policies in the world being upended in geopolitics. 0:14:53.280 --> 0:14:56.080 What does that do for the entrepreneur, entrepreneur who's trying 0:14:56.120 --> 0:14:57.760 to you know, we know it can be lean and 0:14:57.800 --> 0:14:59.800 mean in the beginning when it comes to a startup. 0:15:00.080 --> 0:15:02.200 What about some of these macro issues, what would be 0:15:02.240 --> 0:15:03.200 more helpful to them? 0:15:03.200 --> 0:15:03.720 What kind of. 0:15:03.720 --> 0:15:09.760 Environment, well, anything that helps with capital formation, anything that 0:15:09.840 --> 0:15:14.120 kind of reduces regulation. I was hopeful that this administration 0:15:14.160 --> 0:15:17.280 would attack some of that stuff and maybe not terriffs, 0:15:17.560 --> 0:15:19.040 but anyway. 0:15:18.760 --> 0:15:20.200 It's still early, it's still early. 0:15:20.280 --> 0:15:21.120 We're here now. 0:15:21.160 --> 0:15:24.320 They are very active and very proactive, and I'm just 0:15:24.360 --> 0:15:26.840 hopeful that what you really want to give is entrepreneurs 0:15:26.880 --> 0:15:29.360 just charter. I mean, let them do their thing as 0:15:29.400 --> 0:15:31.800 much as you can. And our hope is by the 0:15:31.840 --> 0:15:34.440 way that this environment, believe it or not, will put 0:15:34.480 --> 0:15:37.440 a dent in that world, right, that they will find 0:15:37.880 --> 0:15:40.480 support here in many different ways. 0:15:40.560 --> 0:15:42.280 Well, I always think it's kind of amazing how much 0:15:42.320 --> 0:15:44.440 time we spend and obviously this is our world, right, 0:15:44.480 --> 0:15:46.720 the publicly held markets, right, this is what we track, 0:15:46.800 --> 0:15:49.720 you know, all the movements. But we talk constantly about 0:15:49.720 --> 0:15:52.240 the importance of small business and startups in terms of 0:15:52.280 --> 0:15:54.760 the backbone, and I just think it kind of gets 0:15:54.840 --> 0:15:55.440 lost a little bit. 0:15:55.720 --> 0:15:56.000 Yeah. 0:15:56.080 --> 0:15:58.920 I do think though that you're going to see AI 0:15:59.560 --> 0:16:02.120 up end just about every industry, and I think those 0:16:02.160 --> 0:16:04.920 big companies are going to find themselves woefully behind and 0:16:04.920 --> 0:16:07.160 they're going to have no choice but to make some acquisitions. 0:16:07.320 --> 0:16:10.440 Well said, no, what capital is it out there for 0:16:10.640 --> 0:16:11.400 entrepreneurs today? 0:16:11.720 --> 0:16:12.080 It is? 0:16:12.080 --> 0:16:14.040 But I think that you're seeing an interesting dynamic with 0:16:14.080 --> 0:16:16.440 the vcs and private equity that they're chasing a lot 0:16:16.440 --> 0:16:19.120 of trends almost blindly. You know the fact that right 0:16:19.160 --> 0:16:21.080 now there are really good businesses that don't have the 0:16:21.120 --> 0:16:23.440 word AI that are struggling to raise money, whereas there's 0:16:23.440 --> 0:16:25.560 other businesses that have a deck and pre seed and 0:16:25.560 --> 0:16:27.680 barely an idea and or raising money at fifty million 0:16:27.720 --> 0:16:30.000 dollars pre money valuations, I think is indicative of what's 0:16:30.040 --> 0:16:30.360 going on. 0:16:30.480 --> 0:16:32.800 Yeah, we saw venture raise. It's been really difficult. 0:16:32.880 --> 0:16:35.760 It's been very difficult unless you're a credentialed AI founder 0:16:35.760 --> 0:16:37.320 have a good idea in the AI space, because there's 0:16:37.320 --> 0:16:39.880 a lot of VC funds chasing chasing ideas, and I 0:16:39.880 --> 0:16:41.960 think some of them will work, but the unfortunate realities, 0:16:41.960 --> 0:16:42.920 I think a lot of them are going to get 0:16:42.920 --> 0:16:45.000 absolutely smoked because they can't all work, especially not at 0:16:45.080 --> 0:16:49.000 fifty million dollar pre So to answer your question directly, sure, 0:16:49.000 --> 0:16:50.680 there's capital out there, I wish. 0:16:50.480 --> 0:16:51.000 There was more. 0:16:51.080 --> 0:16:52.920 I wish there was more going to more ideas that 0:16:52.960 --> 0:16:55.760 were based just on meritocracy and their actual traction versus 0:16:55.800 --> 0:16:57.640 the notion that they have AI and it as bullish 0:16:57.640 --> 0:16:59.600 as I am on AI and investing in it personally, 0:16:59.640 --> 0:17:00.760 to be of abundantly clear. 0:17:01.400 --> 0:17:03.400 But it's an interesting moment right now, very interesting. 0:17:03.600 --> 0:17:06.120 I will only add that that is not too much 0:17:06.160 --> 0:17:09.120 different than what we've always seen. True, there's always been 0:17:09.160 --> 0:17:12.800 the bright shiny object, and the investors feel like they 0:17:12.880 --> 0:17:13.679 got to follow that. 0:17:14.960 --> 0:17:17.439 Did you really start working for you in high school? 0:17:19.080 --> 0:17:21.080 Such fantastic got to start on? 0:17:21.160 --> 0:17:23.760 Yeah, got us talk about that off air, exactly right, Michael, 0:17:23.920 --> 0:17:26.440 thank you so much, having founder CEO of lobe dot 0:17:26.520 --> 0:17:28.920