Speaker 1: From Mahard where Innovation, Money and Power Collie in Silicon Valley, NBN.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2: And Caroline Heiner Bloomberg's world headquarters in New York and
Speaker 2: Amed Lovelow in San Francisco. This is Bloomberg Technology coming up.
Speaker 3: Shipping merchants.
Speaker 4: They hold Red Sea trips after the US and UK
Speaker 4: strike HOUTHI targets adding to disruption in the region already
Speaker 4: it's impacting Tesla for example. We break down what it
Speaker 4: all means for the global supply chain for technology and
Speaker 4: what is being used to navigate around it.
Speaker 2: And Tesla is one of the names hit by that
Speaker 2: in the Red Sea attacks. It's shut down its German
Speaker 2: plant amid the disruption. We will have all of those details.
Speaker 4: As later this hour we sit down with renowned venture
Speaker 4: capitalists Bino Koesler, Keith Raboi and exclusive conversation amid the
Speaker 4: announcement that Keith is returning to Coastal a Ventures. All
Speaker 4: that and so much more coming up.
Speaker 2: There is a lot of tests the news out there.
Speaker 2: We will cover all of it in the program. The
Speaker 2: first piece being that they have cut prices again on
Speaker 2: models in China. We will bring you those details, but
Speaker 2: the bigger news probably was the halt production in Berlin
Speaker 2: because of supply chain impact from the Red Sea situation.
Speaker 2: How does that look? We will go to our Global
Speaker 2: Cars editor in the next block. But Tesla is down significantly. Volvo,
Speaker 2: the European car maker, also following the similar news, halting
Speaker 2: European production because of the impact of what's happening in
Speaker 2: the Red Sea. We've got a brilliant name coming to
Speaker 2: us now, Ryan Peterson, the CEO of Flexport, a leader
Speaker 2: in global supply chain technology. And Ryan, you've been coming
Speaker 2: on with us in recent weeks because you're keeping a
Speaker 2: micro track of the impact of what's playing out in
Speaker 2: the Red Sea. The latest from Flexport's perspective, please.
Speaker 5: Well, you know, the biggest thing here is obviously the
Speaker 5: impact on for customers, for companies shipping cargoes, the impact
Speaker 5: on price transit time as well. You mentioned Tesla having
Speaker 5: issues getting parts to manufacture goods.
Speaker 6: I think you're going to see that across a huge.
Speaker 5: Swath of companies, especially in Europe, but also in the
Speaker 5: East Coast, so there's delays.
Speaker 6: And then two is the price.
Speaker 5: The price of ocean freight has gone from well, it's
Speaker 5: gone up about four x, and not just from Asia
Speaker 5: to Europe, even from Asia to the US on the
Speaker 5: West coast, where you would think it's not, you know,
Speaker 5: from China to.
Speaker 6: The West coast.
Speaker 5: The United States shouldn't be impacted by the Suez on
Speaker 5: the surface, and yet it is.
Speaker 6: Prices have gone up about three x.
Speaker 5: And this is partially because ships have been pulled off
Speaker 5: of that trade lane to provide the extra capacity needed
Speaker 5: to go from Asia to Europe because of the longer
Speaker 5: way around. It's also because all of these trades depend
Speaker 5: on the same asset, which is containers, and if there's
Speaker 5: not enough containers.
Speaker 6: Then you're going to have to pay more to you know,
Speaker 6: for the ones that there are.
Speaker 5: So you've got a supply and demand dynamic that's driving
Speaker 5: up the costs of everything.
Speaker 2: We have a great visual tool here at Bloomberg to
Speaker 2: kind of try the movement of those containers through the ships.
Speaker 2: We talked about Tesla as the example at the top
Speaker 2: of this show, Ryan, but in simple terms, the parts
Speaker 2: and components they need to feed the assembly lines and
Speaker 2: not getting through so they've halted production. Do you have
Speaker 2: any customer examples where something similar has happened, or any
Speaker 2: specific industries that have a micro hit from what's happening
Speaker 2: in the Red Sea.
Speaker 5: Well, it's across the board, you know, anything that's manufacturing
Speaker 5: related where you're really depending on these inbound parts.
Speaker 6: So then run assembly line is going to be hit
Speaker 6: by that.
Speaker 5: And then the thing the other big thing you see
Speaker 5: is manufacturing that's done in ports that are no longer
Speaker 5: getting the same service level.
Speaker 6: So a really good example of this is we.
Speaker 5: Have a company that makes apparel in Jordan, and Jordan's port,
Speaker 5: of course is on the Red Sea at Akaba. In
Speaker 5: those carriers that we often stop there on the way
Speaker 5: through the Suez are not going through there at all,
Speaker 5: and Jordan has lost most.
Speaker 6: Of the ocean capacity that was serving.
Speaker 5: And so with this customer, you know, were scrambling on
Speaker 5: their behalf starting to find alternate routes, whether that's air
Speaker 5: freight or some of it's going to get trucked over
Speaker 5: to Dubai and put on a ship there.
Speaker 6: So all kinds of this kind of.
Speaker 5: Thing happening at a very granular level, because of course, every
Speaker 5: ship that gets rerouted has ten thousand containers, and each
Speaker 5: of those has a journey of its own that needs
Speaker 5: to get replanned and find a new destination and a
Speaker 5: new sailing ron.
Speaker 4: Of course, you're on the very cutting edge of how
Speaker 4: technology is the soul of the solution, the transparency to this.
Speaker 4: But I ask you a more macro picture question and ultimately,
Speaker 4: is inflation going to be driven up more longer term?
Speaker 4: We've seen the supply chain snow happen before. From your experience,
Speaker 4: is this already going to be filtering in Yeah?
Speaker 5: It also just a question of how long this last,
Speaker 5: but absolutely have to if it lasts for any period
Speaker 5: of time more.
Speaker 6: Than a quarter or two.
Speaker 5: Is what I would guess is that I don't think
Speaker 5: companies want to just immediately change the price of the
Speaker 5: things they sell.
Speaker 6: They kind of set these things on the longer term horizon.
Speaker 5: But if you can believe that this is going to
Speaker 5: last for a few months or a few quarters, you
Speaker 5: only have two choices.
Speaker 6: You either that's the price through to your customer or
Speaker 6: you make less money.
Speaker 5: And I think people know you know what most businesses
Speaker 5: will do if they have the pricing power, They're going
Speaker 5: to raise the prices to customers, and.
Speaker 6: It can be quite significant.
Speaker 5: As we saw during the supply chain congestion of years
Speaker 5: past it can. In that time, we estimated it was
Speaker 5: three or four percent of inflation for goods shipped by
Speaker 5: ocean containers, which is most consumer goods RN.
Speaker 4: What is being stress tested in your technology right now?
Speaker 4: You came on a few weeks ago and was really
Speaker 4: interesting about the fact that a lot of these ships,
Speaker 4: for example, having to turn off their satellites so they
Speaker 4: don't want to be well intercepted by the hoody revels
Speaker 4: when they are indeed still traversing through the Red Sea. Ultimately,
Speaker 4: what are you currently using, what new adoption and technology
Speaker 4: trying to build for these sorts of scenarios.
Speaker 5: Yeah, well, so we've had to go through and you know,
Speaker 5: our technology tracks the ships by satellite, and like you said,
Speaker 5: a lot of these carriers have turned off transponders as
Speaker 5: they get close to make it harder for anybody who's
Speaker 5: trying to attack them to identify them. You also get
Speaker 5: data from the carriers to you know, sailing schedules and
Speaker 5: routes and plans and things like this.
Speaker 6: Well, the problem.
Speaker 5: With all data is that it all comes from the
Speaker 5: same place, which is the past, and when the future
Speaker 5: looks different than the past. These things can rapidly not
Speaker 5: function the way they should. So it actually speaks to
Speaker 5: the approach that we've always taken a flex for, which
Speaker 5: is later on humans who are working hard, you know,
Speaker 5: every day to solve these problems. Track the ships manually,
Speaker 5: we call the carriers we're in there, you know, in
Speaker 5: their editing things manually where needed to keep the system
Speaker 5: up to date.
Speaker 6: But this system has performed very well.
Speaker 5: One technology change that we did make was very simple,
Speaker 5: but visualize it so that a customer can see which
Speaker 5: of their containers is being rescheduled, make it very obvious
Speaker 5: which chips are going to be which containers are going
Speaker 5: to be delayed, and then give them action plans. The
Speaker 5: other thing I think I'm really proud of is that
Speaker 5: our team went and updated our carbon calculator.
Speaker 6: You know, it takes a lot.
Speaker 5: It takes about twenty percent longer to go around there
Speaker 5: before you mid twenty percent more carbon. So we've had
Speaker 5: to go through and estimate, you know, change all the
Speaker 5: estimates for how much carbon gets emitted on these ships.
Speaker 6: So a lot of hard work inflex Port.
Speaker 5: We're kind of working overtime, weekend nights and weekends right now,
Speaker 5: to keep our customers informed.
Speaker 2: At Ryan in twenty twenty, I was trying to work
Speaker 2: out what the story with Tesla was and a testa
Speaker 2: executive messaged me and said, get in your car, drive
Speaker 2: from San Francisco to Oakland, and on your way on
Speaker 2: the Bay Bridge, look right out of your window and
Speaker 2: tell me what you see. And he was referring to
Speaker 2: all of the ships parked waiting to unload. That was
Speaker 2: the issue right of the twenty twenty twenty one crisis.
Speaker 2: What is different this time? And I asked you to
Speaker 2: have a crystal ball. How long will it take to
Speaker 2: unwind relative to the months and months of that previous saga.
Speaker 5: Yeah, well, they're really quite different because the twenty twenty
Speaker 5: twenty one crunch was really driven by an increasing demand.
Speaker 6: We ship containers than ever.
Speaker 5: There was a twenty percent increasing containers arriving in the
Speaker 5: United States because customers weren't able to spend money on travel,
Speaker 5: on restaurants, on services, they were shifting that consumption to goods,
Speaker 5: and so we had so much more demand that the
Speaker 5: ports couldn't keep up, and so you had then the
Speaker 5: ports became congested, and you had that resulted in a
Speaker 5: decreasing capacity, so it was really a double whammy in
Speaker 5: twenty twenty one. What you're looking at now is just
Speaker 5: a reduction and supply there's no corresponding increase in demand.
Speaker 5: So it's it's different in that regard, and it's less
Speaker 5: of a traffic jam than it is a detour, and
Speaker 5: that detour runs at the same speed, it just takes longer.
Speaker 6: So I think the world will adapt better than it
Speaker 6: did in twenty twenty and twenty twenty.
Speaker 5: One, not to say it's not a big impact, and
Speaker 5: certainly short term it's a pretty big deal. Talking crystal bowl, well,
Speaker 5: the ocean container shipping industry ordered a lot of ships
Speaker 5: in the peak of all the high shipping prices of
Speaker 5: twenty twenty through twenty twenty two. The carriers made a
Speaker 5: lot of money and they reinvested in their fleets, and
Speaker 5: those ships are coming online this year and next year
Speaker 5: and even into the year after that, and so you
Speaker 5: have a lot of capacity coming online that will Although
Speaker 5: we have a decrease in capacity resulting from this rerouting,
Speaker 5: if you're taking long term view or even medium term view,
Speaker 5: you're going to see that made up for by new ship.
Speaker 6: So I don't.
Speaker 5: Yeah, I don't. It can't predict how long this will last.
Speaker 5: But even if it lasts a long time, I think
Speaker 5: you'll see the ocean market kind of stabilized and gets
Speaker 5: to a relatively normal pricing environment versus long term historical averages.
Speaker 6: Of course, it'll be higher than it was going.
Speaker 5: To be if this hadn't happened, but I think the
Speaker 5: world wi will recover.
Speaker 4: A demanded supply side issue for both inflationary. Ryan Peterson
Speaker 4: is so great to catch up with you. Thank you
Speaker 4: for spending some time with us Fexport CEO.
Speaker 2: Tesla cuts prices in China again. The company reduced starting
Speaker 2: prices of the Model three sedan by five point nine
Speaker 2: percent to a little more than thirty four thousand US dollars,
Speaker 2: and mark down the Model why sport utility vehicle by
Speaker 2: two point eight percent. That's to around thirty six thousand
Speaker 2: US dollars that according to the Chinese version of Tesla's website.
Speaker 2: The carmaker also says it's lone European factory near Berlin
Speaker 2: will be disrupted by attacks in the Red Sea and
Speaker 2: there is a halt to production there. That's bring in
Speaker 2: Bloomberg's Global Auto editor Craig Trudel, And let's start with China.
Speaker 2: We gave the numbers, but the context is that this
Speaker 2: is one of several cuts to prices in China over
Speaker 2: the course of the last year.
Speaker 7: Yeah, I mean this really started even I would say
Speaker 7: late in twenty twenty two when we saw you know,
Speaker 7: Tesla sort of open the first salvo of price cutting
Speaker 7: in China. And last year it really was just relentless
Speaker 7: on the part of Tesla and the broader industry. But
Speaker 7: I think, you know, of the two what most stands
Speaker 7: out to me of these cuts, the two models that
Speaker 7: Tesla has is the Model three. I think there was
Speaker 7: some hope that you know, with updating the Sedan and
Speaker 7: kind of you know, giving you know, buyers a reason
Speaker 7: to have a fresh look at that car. You know,
Speaker 7: this is a fairly substantial price cut, only you know,
Speaker 7: a few weeks removed from when Tesla you know, updated
Speaker 7: the Model three. And so this is you know, potentially
Speaker 7: a cause for a concern if if you were kind
Speaker 7: of counting on this idea that refreshing the lineup a
Speaker 7: little bit would lead to pricing you know, essentially bottoming
Speaker 7: and stabilizing.
Speaker 4: Here and for that context, it feels that investors fill Similarly,
Speaker 4: the stock is off by almost four percent on the day.
Speaker 4: In fact, it's had a pretty awful week of run
Speaker 4: of it because within this worry about China and the
Speaker 4: price competition, and we also add to the context byd
Speaker 4: suddenly becoming well basically a challenger when it comes to
Speaker 4: numbers of EV's being sold, and one more broadly, it
Speaker 4: feels as though Tesla is having to come up against
Speaker 4: growing concern about EV demand broadly, I think a Cox
Speaker 4: automotive for example.
Speaker 7: Yeah, I think the Hurts story yesterday is something we
Speaker 7: can't forget here as well. I think, you know, when
Speaker 7: we think about Tesla, we think about China and the
Speaker 7: US being really important to them, in particular in the
Speaker 7: US for you know, a big customer and Hurts too.
Speaker 7: You know, it's really an incredible story to me when
Speaker 7: we think back to when it was announced that Hurts
Speaker 7: was going to buy a lot of Tesla's that was
Speaker 7: what made Tesla trillion dollar company, and you know, wow,
Speaker 7: has that really sort of ended in tears for Hurts
Speaker 7: for them to make this you know, real sharp U
Speaker 7: turn from a big investment in electrifying their fleet that
Speaker 7: that is not a particularly positive development for Tesla, to
Speaker 7: say the least. And I think the fact that you're
Speaker 7: now seeing hurts, you know, launch a sort of fire
Speaker 7: sale of Tesla's is not good for the resale values
Speaker 7: of Tesla's and and you know, potentially could hurt you know,
Speaker 7: demand for new Tesla's in the sense that you know,
Speaker 7: there's a whole lot of supply of U Teslas now
Speaker 7: on the market for people to take a look at
Speaker 7: rather than look at new.
Speaker 4: Craig Todell, we thank you so much, giving all of
Speaker 4: what was a pretty horrible, very bad week for Tesla
Speaker 4: ed to.
Speaker 2: A big interview for US. European anti trust regulators say
Speaker 2: the relationship between Microsoft and open Ai is one they're
Speaker 2: monitoring closely. I sat down with European Commissioned Executive Vice
Speaker 2: President Margareta Vesta for an exclusive interview about big tech
Speaker 2: and the competitive market. Listen.
Speaker 8: I think we all followed, almost hour by hour, the
Speaker 8: situation of the leadership of open Ai, the back and forth,
Speaker 8: how it was first very opaque and then became more
Speaker 8: and more clear. And what is interesting for us, of course,
Speaker 8: is what is the real relationship between open Ai and
Speaker 8: Microsoft When it comes to control of the business in question.
Speaker 8: This is very preliminary, but it is part of a
Speaker 8: sort of a larger endeavor to understand how AI will
Speaker 8: affect our marketplaces because what we have seen with technology
Speaker 8: over the last two decades, it is completely upended how
Speaker 8: a number of markets are working, both the digital markets
Speaker 8: themselves but also other markets. Now, when we put in
Speaker 8: AI to that game, of course, we see that this
Speaker 8: may accelerate some of the behaviors that we have seen
Speaker 8: and some of the things that we've been concerned about.
Speaker 8: So we've just launched a probe for market participants, for businesses,
Speaker 8: for lawyers, for academics to participate and.
Speaker 2: To give us feedback as to how will AI.
Speaker 8: Influence competitive competitivity in the.
Speaker 2: Market, incisure that extends the hardware. Nvidia disclosed that you
Speaker 2: were looking informally at its behavior within the graphics card market.
Speaker 2: Again the similar question, but what were your concerns that
Speaker 2: prompted you to look.
Speaker 8: Well, our concerns are it may sound very trivial, but
Speaker 8: it is always the same thing that is driving us
Speaker 8: to make sure that the market is truly open and competitive.
Speaker 8: And when it comes to everything digital, we're in a
Speaker 8: situation where network effects, where scale really matters. That goes
Speaker 8: for both some of the hardware companies and goes indeed
Speaker 8: for software. So we are driven by sort of what
Speaker 8: we have seen over the last ten years that you
Speaker 8: really need to be on the point before market's tip
Speaker 8: if you want to make sure that smaller business competitors
Speaker 8: actually can build, innovate, but also scale in this environment.
Speaker 2: I want to go back to a period of time
Speaker 2: before you took a leave of absence to pursue the
Speaker 2: IB role, which we can discuss. One of the last
Speaker 2: things you did was order on a prelim basis that
Speaker 2: Google break up its ad tech business and done, you've
Speaker 2: kind of followed the steps of the DOJ. Is that
Speaker 2: kind of a template or model of some action you
Speaker 2: could take in your remaining year in this role.
Speaker 8: Well, it all depends on the cases, which cases no,
Speaker 8: but we in order to ask or suggest something as
Speaker 8: far reaching as a breakup, of course that has to
Speaker 8: be the only solution.
Speaker 4: Let's talk about those eleven newly allowed bitcoin exchange traded funds.
Speaker 4: Many investors are actually discovering that approved doesn't always mean available.
Speaker 4: Vanguard's brokerage on, for example, will not offer training in
Speaker 4: these ETFs that invest directly in spot bitcoin. According to
Speaker 4: a spokesperson, Meryl Edge is still evaluating whether to provide
Speaker 4: the service or not. Still Mark founder, our managing partner,
Speaker 4: Elease Colleen is with us because she has been backing
Speaker 4: these startups, these bitcoin enabled businesses have founders since twenty
Speaker 4: thirteen and want to get your take a lease on
Speaker 4: what seems to be some good fun flow coming in.
Speaker 4: Perhaps some still difficulty getting access if you're perhaps a
Speaker 4: brokering with Vanguard. But what does this mean for your space?
Speaker 1: Well, it was a blockbuster day one for the Bitcoin
Speaker 1: Spot ETF class. We saw about a protected six hundred
Speaker 1: and twenty five million in flows, with Bitwise, Blackrock, and
Speaker 1: Fidelity leading the class. What's important for my space in
Speaker 1: the private markets is that the financialization of bitcoin is
Speaker 1: proceeding at a rapid pace. We see that now reflected
Speaker 1: in this mainstream financed financial acceptance and adoption of bitcoin
Speaker 1: through the Bitcoin Spot ETF. But on the private side,
Speaker 1: innovation is happening as well that further advances bitcoin as
Speaker 1: an asset and as a currency.
Speaker 3: What sort of solutions and indeed what problems are they
Speaker 3: trying to solve because ultimately I'm wondering whether there's any
Speaker 3: cannibalization by the fact that now you don't need to
Speaker 3: go and open up wallllets go and invest in bitcoin directly.
Speaker 4: You can gain exposure through an ETF. It's so much easier.
Speaker 1: Well, this is what's important about the introduction of the
Speaker 1: spot ETF is that it's an easy access product for
Speaker 1: retail investors and institutions that may feel more confident in
Speaker 1: first accessing bitcoin through a regulated product like the ETF.
Speaker 1: And on top of that, the marketing that has gone
Speaker 1: into the launch of these products and that supports their
Speaker 1: continued adoption is consistent with bitcoin's core principles, which is
Speaker 1: that bitcoin allows investors to hedge against risk of inflation
Speaker 1: or monetary debasement that have been global concerns, including for
Speaker 1: developed markets.
Speaker 2: Like the US.
Speaker 1: What we expect to see from the spot ETF is
Speaker 1: an adoption of bitcoin will increase because investors now have
Speaker 1: a familiar and easy way to access it. But I
Speaker 1: expect to see in the longer term or in the
Speaker 1: mid term even is that accessing bitcoin and holding bitcoin
Speaker 1: through a spot ETF, holding exposure to bitcoin will allow
Speaker 1: people the motivation to continue to learn about bitcoin and
Speaker 1: will could lead to people's derisk access and purchase of
Speaker 1: bitcoin or related products.
Speaker 2: At least there's familiar and easy way to access. And
Speaker 2: then there's the eleven ETFs that got approved, and it's
Speaker 2: amazing that in the news cycle already flagging those that
Speaker 2: won't actually offer the service. Do we need eleven ETFs?
Speaker 1: Market will decide that I'm not sure that we need eleven,
Speaker 1: that we do see some breakout performance, as they noted
Speaker 1: with Bitwise, Fidelium, Blackrock. On the private side, some of
Speaker 1: the products that are developing to further financialize the space
Speaker 1: are also exciting and likely to those that purchase spot
Speaker 1: ETF themselves. So to mention a few of the areas
Speaker 1: of innovation that we're seeing in the private markets, I'll
Speaker 1: note that the point denominated insurance products came to market
Speaker 1: in late twenty twenty three. What that means is that
Speaker 1: you can hold a policy that's to nominate in the
Speaker 1: scene that's producing a BTC return. And we're seeing products
Speaker 1: that also further helped the space mature, such as a
Speaker 1: lease for preserve software.
Speaker 2: Just deep analysis a lease and we're grateful for your
Speaker 2: time release, But we're at a time Cara quit check
Speaker 2: in on the market. There is some momentum right now
Speaker 2: around Meta. I don't see any real news catalyst when
Speaker 2: it comes to social media stocks or Meta in particular,
Speaker 2: but it is a percentage point it is doing well.
Speaker 2: The opposite of that being Tesla is the biggest points
Speaker 2: drag on the Nasdaq one hundred. But it's interesting to
Speaker 2: see some buoyancy, particularly in megacat tech on a day
Speaker 2: that Bloomberg News wrote in twenty twenty four, the Magnificent
Speaker 2: seven may not be as magnificent as they were last year.
Speaker 4: Yeah, Meta, it had some analyst upgrades throughout the week
Speaker 4: and some bullishness across the board. But social media is
Speaker 4: one that we just want to focus in on a
Speaker 4: little bit more because there have been plenty of announcements,
Speaker 4: even from the privately held ones like X This week,
Speaker 4: it's in fact saying that it's going to launch new
Speaker 4: shows with Don Lemon, with Telsey gabbartt with Jim Rome
Speaker 4: as the platform looks to add legitimacy basically to its
Speaker 4: renewed push into video, which has been a key focus
Speaker 4: for the owner Ela Muska course MS Kat Wagner joins
Speaker 4: us now with the details, and it was really interesting
Speaker 4: to see who they were backing, how they were backing,
Speaker 4: and particularly when perhaps they've lost one. Then the key
Speaker 4: focuses that they did have, of course, the guy coming
Speaker 4: from Fox who's decided to go off instead of his
Speaker 4: own particular outlet.
Speaker 9: Right, yeah, I mean it feels like there's sort of
Speaker 9: this home for a lot of people who had major
Speaker 9: platforms and now are sort of maybe looking for a
Speaker 9: new place to go, right Don Lemon obviously being a
Speaker 9: prime example there, Ticker Carlson you mentioned.
Speaker 6: But you know, I couldn't help.
Speaker 9: But essentially when I heard this news, they announced it
Speaker 9: this week, timed it with CS and I couldn't help
Speaker 9: when I heard it. But think back to the old
Speaker 9: regime of Twitter back in twenty sixteen, twenty seventeen. You
Speaker 9: may remember, Caroline, they you know, signed a deal with
Speaker 9: the NFL. They signed deals with a lot of different
Speaker 9: publishers to stream live video. Was all about live and
Speaker 9: this feels very similar. I'm not sure if these are
Speaker 9: going to be live. It sounds like these are going
Speaker 9: to be more like packaged shows. But at the same time,
Speaker 9: this push into premium video content. You know, might provide
Speaker 9: them with a new or at least a revamped revenue
Speaker 9: stream here. But it's interesting to see the strategy sort
Speaker 9: of being recycled now a few years later, Kurt.
Speaker 2: You know, there's video and then there's video, And you
Speaker 2: and I were discussing behind the scenes earlier this week,
Speaker 2: like does X become a sort of dedicated vertical video
Speaker 2: play and then you're taking on the likes of reels
Speaker 2: and TikTok, or does it become a content platform? Allah
Speaker 2: you're watching shows which are not necessarily in the vertical form,
Speaker 2: And my read on it is that X hasn't quite
Speaker 2: decided really what it wants to be in the video context.
Speaker 9: Yeah, I think you're right, and I think these are
Speaker 9: they sound similar and that they're obviously both the video strategies,
Speaker 9: but they're quite different, right. I think if you go
Speaker 9: down the X or excuse me, and the TikTok reels route,
Speaker 9: you're really going to be courting kind of regular creators, right,
Speaker 9: people with lower budgets, people who are just simply trying to,
Speaker 9: you know, maybe get a small revenue share. When you
Speaker 9: start going after the larger, maybe more traditional types of
Speaker 9: video that you would see on television. You know, those
Speaker 9: are much bigger budgets, those are bigger commitments. You know,
Speaker 9: you might be able to sell larger ad packages against
Speaker 9: the specific show, right And so you know, we've heard
Speaker 9: Elon talk about his admiration for YouTube and how he
Speaker 9: wants X to be more like YouTube. You know, it's
Speaker 9: a lofty goal, of course, but I think it'll really
Speaker 9: be interesting to see which of these two paths they
Speaker 9: pushed down more. Right now, it feels like they're kind
Speaker 9: of doing a little bit of both.
Speaker 2: Bloombers, Kurt Wagner, And important to note that X and
Speaker 2: Lyndi Akarino did everything to have a super big presence
Speaker 2: at CS this year, which was interesting, a lot of
Speaker 2: that news coming from there, Big Banks to Curt Okay.
Speaker 2: Sticking with social media, this year marks the twentieth anniversary
Speaker 2: of Facebook, and priorities have changed for the social platform's
Speaker 2: parent company, Meta founder Mark Zuckerberg has become deeply engaged
Speaker 2: in his efforts in AI, with Metaverse dreams seemingly deferred.
Speaker 2: Bloombergs Asia Accounts wrote the story fantastic deep dive and
Speaker 2: long form piece in BusinessWeek and joins us, now, I
Speaker 2: mean that is the story social platform to the metaverse,
Speaker 2: and now it's all about.
Speaker 10: AI exactly it.
Speaker 11: Right, It's funny to think back twenty years ago when
Speaker 11: Mark Zuckerberg started a Facebook out of his Harvard dorm
Speaker 11: room and it was all about just connecting with friends
Speaker 11: and family. And so much has changed since then, and right,
Speaker 11: it's gone through sort of crypto and going after video.
Speaker 11: There was like the Cambridge Analytica scander. There's so many
Speaker 11: things that happen. And then in twenty twenty one he
Speaker 11: changes the name to meta Sure for the Metaverse, and
Speaker 11: he goes all in and spends fifty billion dollars on
Speaker 11: this idea that we're going to live in this virtual world.
Speaker 10: Obviously that didn't really work.
Speaker 11: People didn't buy the viirhead sets. And then chat GBT
Speaker 11: came out and it was all out AI craze in
Speaker 11: the tech industry. And now a Meta is trying it
Speaker 11: to position and set up to actually be a leading
Speaker 11: player in AI. So really big shifts in the company.
Speaker 4: What I love about your story are the anecdotes, the
Speaker 4: behind the scenes, and you take us back to the
Speaker 4: alan Co meeting several years I think ago twenty twenty
Speaker 4: one between Son of Pitchchi saying congratulating Mark Zuckerberg on
Speaker 4: the feats they'd made an AI and that wasn't that
Speaker 4: aware of them. Of course, himself totally embroiled in the
Speaker 4: metaverse at that time.
Speaker 10: Yeah, exactly, exactly right.
Speaker 11: He was so focused on the metaverse that he wasn't
Speaker 11: keeping an eye on what was going on in his
Speaker 11: AI research lab, and the area research lab had been
Speaker 11: around for almost a decade at that point that he
Speaker 11: had that conversation with Sundar, and so it really was
Speaker 11: kind of like an our heart moment of wake up moment,
Speaker 11: and he went back to his AI research team and
Speaker 11: was like employees were saying that they were scrambling to
Speaker 11: get summaries of work to send to Zuck and they
Speaker 11: were sending emails, and so it was this rush to
Speaker 11: make sure he was really up to speed, and to
Speaker 11: his credit, he did get up to speed quickly, but
Speaker 11: again it was still sort of this focus.
Speaker 10: On the metaverse.
Speaker 11: It wasn't really until chet GBT came out that there
Speaker 11: really was a sort of big push within the company
Speaker 11: of like, Okay, how do we put AI into our
Speaker 11: products in.
Speaker 10: A new way?
Speaker 4: And I have a hundred million people, I think using
Speaker 4: Lama already Asia accounts.
Speaker 2: We didn't even get.
Speaker 4: To discuss Macadamian not eating cowls on a ranch in Hawaii.
Speaker 2: Shame. Okay, time for talking tech. First up, longtime Apple
Speaker 2: board directors Al Gore and James Bell will be retiring
Speaker 2: from the company. Gore was the longest serving member, having
Speaker 2: joined in two thousand and three when co founder Steve
Speaker 2: Jobs was the CEO and the iPhone didn't even exist yet.
Speaker 2: And Tata Consultancy and Emphasis, India's two biggest IT firms,
Speaker 2: told investors a long awaited recovery in global tech spending
Speaker 2: may finally get underway. In twenty twenty four. Shares climbed
Speaker 2: following the news. Plus shares of Kurasushi USA, which uses
Speaker 2: robot servers and offers toy price is at its restaurants,
Speaker 2: are undergoing a rocky stretch, suggesting that the investors are
Speaker 2: starting to wonder whether it can live up to the excitement.
Speaker 2: Kurasushi placed a big bet on expansion during the pandemic
Speaker 2: and even sword to a billion dollar market value back
Speaker 2: in July.
Speaker 4: Carrot Fun Way to Eat. Meanwhile, coming up, Big move,
Speaker 4: It's official MVC.
Speaker 12: We're going to be having that conversation.
Speaker 4: Keith ler Boy joins us next and why he's returning
Speaker 4: to coast l a Ventures. Vino Costler also with us.
Speaker 12: Stick with it. This is Blomberg technology.
Speaker 2: All right, deal done. Keithra Boy has returned to Coastal
Speaker 2: a Ventures as a managing director, departing Peter Teele's Founder's Fund,
Speaker 2: where he had served as a general partner since two
Speaker 2: thousand and nineteen. Let's bring in coast Laventure's co founder
Speaker 2: Vinodaksler more in the news along with Keith Raboy himself,
Speaker 2: who joined us in Miami. Vinow'd I start with you
Speaker 2: and you've had a back and forth already with each
Speaker 2: other on X but who phoned who? Whose idea was this?
Speaker 13: Well, we've always gotten long and stayed in very close touch.
Speaker 13: So when Keith was thinking of something new, we got
Speaker 13: together and I think.
Speaker 10: Keith and Samir talked.
Speaker 13: Keith and I then followed up with the dinner.
Speaker 9: And that was it.
Speaker 6: It was pretty simple.
Speaker 2: So Keith, it sounds like this was an initiative or
Speaker 2: an idea that came to you first. You know, you
Speaker 2: were at Coastler and you've been at Founders Fun and
Speaker 2: you're back at Coastler. Why did you think of this?
Speaker 2: What's driving you in this decision?
Speaker 14: Well, I spent six years at Coastler between twenty thirteen
Speaker 14: twenty nineteen, and we had an incredible run and track
Speaker 14: record there in KB four, KB five, and KB six,
Speaker 14: where I think every single MD produced multiple IPOs during
Speaker 14: that era. So sort of obviously we have a significant
Speaker 14: traction together, and sort of missed that Sentatarily. I've learned
Speaker 14: a lot about deep technology investing, which I knew nothing
Speaker 14: about when I joined, about liquid biopsies to detect cancer,
Speaker 14: about the fundamental premise of AI and the potential of AI,
Speaker 14: about robotics, about actually low cost rockets into space.
Speaker 10: And I kind of missed the education part of my job.
Speaker 14: I know a lot about a lot of things in
Speaker 14: technology and company building, but I was getting free education
Speaker 14: every day at every partner meeting, and so that was
Speaker 14: really exciting. I was considering new alternatives and it just
Speaker 14: made so much sense to go back. We've been working
Speaker 14: together for the last five years. In some ways it
Speaker 14: feels like I never left. I work very closely with
Speaker 14: vino It's partners and MDS Samir as mentioned in David Wyden,
Speaker 14: I probably see them at a board meeting once a week,
Speaker 14: so the interaction and the dialogue never changed.
Speaker 10: The overlap in our portfolios.
Speaker 14: Between founders funding KB is substantial, going way back to
Speaker 14: twenty thirteen and fourteen with a firm and Stripe now
Speaker 14: open AI, but up and coming companies like the company
Speaker 14: I'm CEO Open Store, Dellian's company Varda. We've been working
Speaker 14: together on eight sleep and changing the world by allowing
Speaker 14: people to sleep better. So the natural overlap just made
Speaker 14: this so logical.
Speaker 12: Yeah, Keith, I can see the pull. What was the push?
Speaker 4: Why did you start to think you wanted something different?
Speaker 10: Well, you always wonder like how do you be happier?
Speaker 10: How do you be more successful?
Speaker 14: You know, like I try to do it once a
Speaker 14: year intent of like every day so I can sleep better.
Speaker 14: But you do realize what there are people in environments
Speaker 14: that you thrive in, and there's environments that are better
Speaker 14: for other people. What I do really well is invest
Speaker 14: very early, mentoring and serve as a conticular area to
Speaker 14: founders and have high impact in ambitious founders visions and
Speaker 14: achieving those ambitions. And that's a great fit with how
Speaker 14: Ven Adult Crystal Ventures. From the very very beginning, and
Speaker 14: so that was so ideal for what I like to
Speaker 14: do and how I like to compete in the world.
Speaker 4: Find where then to put Keith's expertise. You do have
Speaker 4: these overlapping investments. Is it that he's going to be
Speaker 4: on the ground with founders?
Speaker 2: Is it building out Miami.
Speaker 13: I think the goal is very simple. We're in not
Speaker 13: in the investing business. We're in what we call the
Speaker 13: venture assistance business, assisting or those build large companies.
Speaker 2: That's the part of.
Speaker 13: Keith's skill set that is extremely valuable. One thing to
Speaker 13: realize about the partners the mds at Coastal Ventures is
Speaker 13: everyone is very very different. We don't we're not similar
Speaker 13: skill sets. So we have real diversity in skill sets,
Speaker 13: and Keith just adds to it. The more diversity you
Speaker 13: have in your skill sets, the better decisions you make
Speaker 13: and better company building. Most people in the investing business
Speaker 13: really don't know company building, and Keith does. And so
Speaker 13: that's why I think you's such an important addition to
Speaker 13: our team.
Speaker 2: Keith, the word that Vinode used for you a lot
Speaker 2: was mentor. And it's interesting you were just talking about
Speaker 2: your learning in deep tech, your background in fintech, and
Speaker 2: I'm just really interested mechanically. There must be some portfolio
Speaker 2: companies at Koestla that are there that were there when
Speaker 2: you were with the firm first time around, and there
Speaker 2: are new ones, so you have an opportunity to get
Speaker 2: involved with new companies. And I wondered if you had
Speaker 2: a wish list without making it awkward with Vinod virtually
Speaker 2: sat beside you, and actually specifically does open Ai make
Speaker 2: that list because you could do some work there given
Speaker 2: recent events.
Speaker 14: Obviously, I'd like to find new, ambitious founders who want
Speaker 14: to change the world and have IMpower in their lives,
Speaker 14: that have an impact in society.
Speaker 10: That's the primary goal.
Speaker 14: There are a few companies actually this may surprise you,
Speaker 14: that I invested in more than five years ago that
Speaker 14: I'm still all abored of a fair being one firm
Speaker 14: being another, so you know, there's a lot of continuity there.
Speaker 14: And then there's some founders who I invested back in
Speaker 14: my day twenty thirteen to twenty eighteen that want me back,
Speaker 14: so we can always consider that. But really, you know,
Speaker 14: we want to look forward to what is the future
Speaker 14: of technology, how do you change society, how to make
Speaker 14: society better? And who are the iconic founders who have
Speaker 14: potential to do that, which is very rare, and I
Speaker 14: got to I have to go find them before other
Speaker 14: people do.
Speaker 4: You've got a lot of money to put to work.
Speaker 4: Kosler also has been deeply active. I think the most
Speaker 4: active deployer of venture capital in fourth quarter? Is that
Speaker 4: going to be the way you look at the first
Speaker 4: as well?
Speaker 13: No, we don't look at the rate at which we
Speaker 13: are investing. We look at the rate at which we
Speaker 13: are getting great on to work with us. So we
Speaker 13: don't have a pace or a strategy around rates. Our
Speaker 13: focus is very much on when do we run into
Speaker 13: a great entrepreneur, how do we convince some to work
Speaker 13: with us, and how can we help them build a company.
Speaker 13: So we don't keep track of industry metrics or where
Speaker 13: we stand in terms of rate of investing. It's very
Speaker 13: much focused on when we see the right opportunities. What's
Speaker 13: surprising is through twenty twenty one and twenty two, our
Speaker 13: rate of investing didn't change very much, though the industry
Speaker 13: went through real up cycles and downcycles. But if we
Speaker 13: look internally at the number of major investments we make
Speaker 13: per month, per year, our rates stayed relatively constant. We
Speaker 13: didn't increase dramatically from twenty eighteen to twenty twenty one,
Speaker 13: and we didn't decrease significantly from twenty twenty one to
Speaker 13: twenty twenty three.
Speaker 12: Psychoagnostic.
Speaker 4: I'm interested in teeth in cultural differences. You've spoken about
Speaker 4: how when you are at Kosla, the Monday meeting, the
Speaker 4: all important gathering of the partners, the sharing of information,
Speaker 4: the stress testing of ideas, and then it found us
Speaker 4: fun how everyone sort of had their own mini business models.
Speaker 4: They're sort of a portfolio manager as such, but is
Speaker 4: there more autonomy.
Speaker 2: For you at Kosla?
Speaker 12: Vis Aviv found us fund or not?
Speaker 6: Well.
Speaker 14: I always kind Atomy Coastler, but we had very spirited,
Speaker 14: vigorous debates about the quality of thinking behind any investment,
Speaker 14: whether it's something I was championing or something Venode was championing,
Speaker 14: and I did miss that. I think it made Niche sharper,
Speaker 14: even though it was ultimately my decision on whether to
Speaker 14: invest or what terms to invest, But just listening to
Speaker 14: Venode or listening to David speaking in the back of
Speaker 14: my brain or some actually did make me a better investor.
Speaker 14: And sometimes not because they were critical, sometimes because they
Speaker 14: led me to down on things that I liked, but
Speaker 14: they were encouraged me to be even more aggressive, and
Speaker 14: so it was just very very very helpful to me
Speaker 14: as a person.
Speaker 2: You know yourself, Keith, Now, oh sorry, please continue.
Speaker 13: Yeah, I just want to add to it. Our strategy
Speaker 13: is very much bold bets, early beats and impactful bats,
Speaker 13: so cyclically impactful bats. What that means in practice is
Speaker 13: we have to invest in outliers, not what everybody else
Speaker 13: is investing in, and because of that, we have an
Speaker 13: unusual investment process. I don't get to approve investments. Any
Speaker 13: of the mds can decide to make any decision, but
Speaker 13: they have to listen to all the other MPD's opinions first,
Speaker 13: so very much operate like a group. But we want
Speaker 13: an MD to believe in what they're doing and they
Speaker 13: independently decide to invest or not. I don't get to
Speaker 13: make that call for others. They don't get to make
Speaker 13: that call for me. And then the other half of
Speaker 13: the administration of the firm is very very unanimous. So
Speaker 13: we are quite different in how we make decisions from
Speaker 13: most of the wenture firms.
Speaker 2: Vino. Those mds, including Keith, are going to have a
Speaker 2: lot more cash to play with. You just closed three
Speaker 2: point one billion dollars in three new funds. I believe
Speaker 2: from sort of seed through to growth stage. And how
Speaker 2: are you going to assess Keith's performance? This is an
Speaker 2: awkward live television scorecard set up for the year.
Speaker 6: You know, it's very simple.
Speaker 13: So one thing that's very unusual for Koestler is we
Speaker 13: don't have companies or investments assigned to people. We don't
Speaker 13: measure individually. So we have no measurement system. How much
Speaker 13: prafit did you make? Which investment did you bring in?
Speaker 13: Because everything's the team effort. We even transfer opportunities. You know,
Speaker 13: one person maybe on the board of a company, and
Speaker 13: when they reach a different stage, we'll assign somebody else.
Speaker 13: So we don't measure I personally mostly look at both
Speaker 13: at the empty level, but more importantly at the next level.
Speaker 6: What kinds of questions do your.
Speaker 13: Investment partners ask? How insightful are those questions? So evaluation
Speaker 13: is much more about the questions than the answers or
Speaker 13: the opportunities.
Speaker 14: So I also remember when I first joined Kosla twenty thirteen,
Speaker 14: there was a jobs back for mgs and one of
Speaker 14: the first bulletpoints was you're the first person the founder calls.
Speaker 10: And I think that's an ingredient.
Speaker 14: In success, which is if you're so helpful, so insightful,
Speaker 14: so reliable, and so trustful that the founder when they
Speaker 14: have problems or challenges or opportunities, they call you before
Speaker 14: anybody else on the planet.
Speaker 2: You're going to do. You're going to do pretty well
Speaker 2: a venture, right, Keith? We have thirty seconds, But it's
Speaker 2: an election year. Peter Tiel is a political beast. You know,
Speaker 2: how did that factor in? And do you and pay
Speaker 2: attention to the election this year?
Speaker 14: I won't speak for Venola, but obviously I pay attention
Speaker 14: as an amateur to politics.
Speaker 12: Renown, Are you paying attention?
Speaker 13: I do pay attention, but I'm registered independent. I used
Speaker 13: to be a Republican until the climate issues became predominant,
Speaker 13: and then became an independent.
Speaker 2: Yeah.
Speaker 13: I do think that there's a fifty percent probability the
Speaker 13: face off won't be between Biden and Trump.
Speaker 4: And lastly, we got ten to twenty seconds more Miami,
Speaker 4: do we think, Keith?
Speaker 10: Well, I love Miami, but I'll be in the Bay Area.
Speaker 14: I have a lot of portfolio companies that were found
Speaker 14: in the Bay Area. I'd like to attend partner meetings
Speaker 14: as much as possible, because I think they are really
Speaker 14: useful in understanding their portfolio, and the vigor of the
Speaker 14: debate and the incisive questions is better in person than
Speaker 14: on Zoom.
Speaker 10: But I'm going to stay in Miami.
Speaker 4: Well, we thank you both for joining on Zoom today.
Speaker 4: It's great to have some time with the Coastal Adventures
Speaker 4: co founder of Vinod Kosler managing director Keith ler Boy,
Speaker 4: both now of Coastal Adventures. That does it for this
Speaker 4: edition of Bloomberg Technology.
Speaker 10: Ed.
Speaker 2: Yeah, that conversation. Listen to it again on the podcast
Speaker 2: wherever you get your podcasts, Apple and the Bloomberg platforms Spotify.
Speaker 2: This is Bloomberg Technology.