Bloomberg Businessweek Weekend - December 1st, 2023 - Bloomberg Businessweek

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
This is Bloomberg business Week Inside from the reporters and
editors who bring you America's most trusted business magazine, plus
global business, finance and tech news. The Bloomberg Business Week
Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.

Speaker 2 (00:20):
Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast.
We've officially wrapped up the month of November, and the
health of the US consumer is in focus during the
all important holiday shopping season. Well ahead this hour, we'll
speak with the founder and CEO of payments platform Chime
on meeting the needs of millions of Americans who are
living paycheck to paycheck, and our Bloomberg Business Week cover

(00:41):
story explores how unprepared many of us are for AI's
next frontier, especially when it comes to our kids. All
of that to come, We begin with the story that
made us stop for a moment this past week. Charlie Munger,
the Alter Ego sidekick and foyle to Warren Buffett for
almost sixty years as they transformed Berkshire Hathaway from a

(01:02):
failing textile maker into an empire, has died. He was
ninety nine. He passed away on Tuesday at a California hospital,
according to a company's statement in which Warren Buffett said
that quote, Berkshire Hathaway could not have been built to
its present status without Charlie's inspiration, wisdom, and participation. Tim
and I spoke with Bloomberg News reporter Noah Bouhier, who

(01:24):
covered and wrote about Monger's passing, and Bill Smead, the
founder and CIO of Smeed Capital Management and a longtime
Berkshire investor.

Speaker 1 (01:31):
I wrote a.

Speaker 3 (01:32):
Letter to Buffett probably five years ago, just thanking him
for how incredibly generous that him and Manger have been
with all of us. I mean, it literally changed our lives.

Speaker 4 (01:46):
What do you mean by that?

Speaker 2 (01:46):
Yeah?

Speaker 3 (01:47):
Oh, by communicating the discipline that they practiced. They shared
why they were doing what they're doing all these years
in the writing, in the annual meetings, stay there taking
questions for six hours all the way up, way up
into their nineties. It's like a gold mine of wisdom.

(02:09):
I used to get irritated because I kind of wish
they would restrict the questions to better questions, because as
the years went by, there were a lot of goofy
questions that came.

Speaker 4 (02:18):
Up because sometimes they got some goofy answers, which were fun.

Speaker 1 (02:21):
Yeah, but.

Speaker 3 (02:24):
Here was this incredible resource, right. Charlie Munger was the
Solomon of our era. He was the wisest man in
the investment business. He was the what he was a
cal Tech grad, Harvard law educated, started a law firm
in Los Angeles, had a successful career in real estate,

(02:44):
successful career in making common stock choices, and the right
hand guide to the most successful investment selector and asset
allocator of all time. I mean he is, he is.
You know, we just admired him so much. And then,
of course we admired him immensely because he'd say exactly

(03:05):
what he was thinking and didn't really care very much
Bill who he might have fended the process.

Speaker 4 (03:09):
You mentioned that you've been doing this for over forty years.
What are some lessons that you've incorporated from Charlie Munger
over these decades into the way that you manage portfolios
and you allocate assets.

Speaker 3 (03:22):
Yeah, when we're talking to people, I'm here in New
York talking to some possible new customers, and we tell
them when it comes to value people, we hold our
winners to a fault because compounding is the eighth wonder
of the world. So if you can find a business,
let's just right off the top of our head, pick

(03:42):
Occidental Petroleum, who Munger and Buffett started buying in the
last year and a half or two years. They're generating
massive free cash flow, they're paying down debt with it,
but then they're also buying backstock. So, like Buffett says,
over the years, if it's a company generating high returns
on equity, high free cast flow, buying back their stock,

(04:02):
he ends up owning a larger and larger and larger
part of the business as the years go by. That's
what he did with Coke, That's what he did in
the Iraq Express, That's you know what he did with
a lot of different companies and holding your winners. The
fault is a key component of alpha. As I explained
to people, you buy a stock at thirty and pay cash,

(04:23):
the worst thing happened is it goes to zero. You
lose thirty points of alpha. If you buy a stock
at thirty and it goes to ninety and you sell
it it goes to two ten, you lose one hundred
and twenty points. And Buffett Monger taught that to people
as a powerful thing. It's it's much better to get
a less spectacular company that you can hold all the

(04:44):
way through a ten or fifteen times your money than
it is a spectacular company that you might make five
times in five years, but you've got to be smart
enough to sell it and go to another project.

Speaker 2 (04:53):
Well, and you're you're you know something. I want to
ask you a little bit more too, about what Charlie
Munger was to Warren Buffett, what he what he brought out,
and Warren Buffett having said that, I want to bring
Noah Bouhier into this because you know, Noah, it's one
of those things where you think, as we're hearing from Bill,
you know, these are both brilliant men, successful men, and
would have been on their own, but something about them

(05:13):
together brought out even so much more.

Speaker 5 (05:18):
Yeah, I think that's a that's a critical point here,
is there. The combination of talents that they they they
brought to bear really was was deeply important in the
evolution of Berkshire. The other thing, just just speaking as
a journalist, the thing that I always found so incredibly
amazing about Charlie Munger was his directness and his willingness

(05:41):
to speak, his mind, even if his opinion wasn't necessarily
a popular one. You know, as a as a as
a business reporter and someone writing about investing, you you
always knew that Charlie was not just going to give
you the piffy quote, but something that actually had some

(06:01):
real substance behind it. And I think that's, you know,
in large part, what has resonated with a lot of
investors over time. I mean, people would go One of
the things that's underappreciated about Charlie Munger is is that
deep into his nineties, people would go to Los Angeles
to hear him speak at the annual meeting of a

(06:23):
small publishing company called The Daily Journal. This was Buffett
had nothing to do with this thing. They would just
go to hear Munger alone. And I remember the first
time I went to this thing, that were maybe one
hundred or two hundred people, and you know, three or
four years later word had gotten out and a couple
thousand were going. I mean, you have to understand, Charlie

(06:46):
Munger was respected in his own right. It wasn't you know,
He's often known for his affiliation with with Buffett, but
he really did have his own.

Speaker 3 (06:56):
Loyal following to back up Noah on that. One of
our favorite things is when it comes to climate change.
He just said, why don't we just build a sea wall?

Speaker 1 (07:07):
Right?

Speaker 3 (07:08):
That was his opinion. It's like, okay, if it's real,
let's do what they did in Amsterdam and just build
a sea wall in California and New York. And that's
so simple and logical and less expensive. But that's Charlie Munger.
It was always common sense, always won. The difference between
the two men is Warren. Warren wants to die without

(07:32):
any enemies. He has more of an urge to be liked.
It's a wonderful man, and he wants to be liked,
whereas Charlie could care less if he's liked, right, he
wants to share wisdom, share truth.

Speaker 2 (07:49):
What was it like from the different meetings you went
to and just kind of seeing them up on stage,
things that kind of stood out for you.

Speaker 3 (07:55):
Well, there's hardly any better comedy routine that's ever been done,
the back and forth. Of course, Munger had lots of
the singers, but Buffett had plenty himself. And yeah, they
played off fantastically. It was I had a next door
neighbor that was four years ahead of me in school.

(08:15):
And I had no brothers, three sisters, and he was
one of four brothers. And here are extremely close friends.
But he's four years older than me in the same
way that that Munger was six or seven years older
than six years older than Warren. But yet you know,
we met and we were finishing each other sentences. And
that's the way these guys were. They were finishing each

(08:36):
other sentences. They'd say the first part of the sentence
and they didn't have to continue because the other guy
already knew what the rest of the sentence was going
to be.

Speaker 2 (08:41):
Which is that kind of relationship.

Speaker 4 (08:43):
We know, Bouhire, I'm so glad you're with us because
we've been reading from your obituary NonStop for the last
hour here. And you know, to Bill's point about this
idea of common sense and not you know, not always
needing to be liked. You mentioned this some of his donations,
and this one's this one's at the top of mind
from him because it's it's relatively recent, forty five person

(09:06):
dorm on UCSB's campus, which actually got a lot of
people interested in dormitory architecture who didn't think that they
would actually be interested in dormitory architecture. But you know,
here Munger is trying to solve this problem of student housing,
and he got a lot of blowback to this idea
and ultimately they canceled it.

Speaker 5 (09:24):
What happened, Yeah, I mean, look, in his later years,
Munger used these donations that he gave the universities to
play architect I mean, he was deeply, deeply interested in architecture,
and you know, he had some pretty unconventional ideas that

(09:46):
I think really bothered people and it became its own
you know, subplot. It's all right, But like you have
to understand, for Munger, he was a incredibly wide widely
read person. He wasn't as narrowly interested in investing and

(10:06):
you know, how to make money. Obviously he spent a
lot of time doing that, but he had an interest
outside of it. The other thing I wanted to add
and the stakes within a slightly different direction. But like
you know, for all that Munger would you know, sit
up on stage and sort of act as the skold
and the curmudgeon next to Buffet. He did have a

(10:27):
you know, a generous heart, and you know, when you
talk to people who spent time with Charlie. You know
he was He was a deeply nice and caring person
and you know, on some level this sort of curmudgeon
stance he would take on stage and in public sometimes
was was a bit of an act, but like you know,

(10:49):
it helped him make his points.

Speaker 2 (10:51):
So, Bill, how do you think about you know, Berkshire
hath the way going forward? They've obviously thought about succession
and there's Augy, Jane and Greg, but I do think
about you know, Warren without Charlie, yes, and what the
impact that might be.

Speaker 6 (11:07):
Yeah, So.

Speaker 3 (11:10):
Charlie and Warren have set a team together to to
kind of come in. They've got two talented stock pickers
in the wings. I'm guessing that this will be when
when they begin to emerge at the annual meeting. Greg
Abel runs the operating businesses, and Todd Combs and Ted

(11:33):
Westlers are running about thirty billion dollars other important that's
who we think bought the home builders for example, because
it was smaller quantities than buff Advice, and so that
will cause their emergence. But Charlie's acerbic common sense and sensibility,

(11:54):
there's just not going to be any replacing that talent.
He was a genius in that uh his uh he he.
He would look at the situation and hit it only
with the best logic right, each situation, regardless of who

(12:16):
might be offended by the logic of it. So he'd
quote scripture and and then he'd support abortion rights right. So,
but logically, you know, he was trying to solve a
problem with money. And the architecture thing just brings back
to mind that he graduated from Harvard Law School and

(12:38):
cal Tech and was an architect and and he was
the most he was the renaissance man.

Speaker 4 (12:48):
Kind of different sides of the brain.

Speaker 3 (12:50):
Oh, just unbelievable mixture of mental model talent, just amazing,
uh he he. His family called him a book of
with legs because he's always reading. Our podcast is called
a book with legs because my son Cole is a
gigantic Charlie Munger fan, and that's what that's what we

(13:12):
call the podcast. We interview authors of books, so we
call it a book with legs.

Speaker 2 (13:16):
And he's quoted in Noah's story. Noah. We'll obviously be
talking this all week and then some another thought, you know,
as you were putting together Charlie's story, you know, for
for Bloomberg, what jumps.

Speaker 5 (13:32):
Out for you here, Well, I think you know, to
your point of what's next for Berkshire, it's a fundamentally bigger,
different place than you know where he and Buffett started.
So while you know, a mini levels manger is not replaceable,
there are a lot of things that he and Buffett

(13:53):
pioneered together that that you know, there's a lot of
there's a lot of that's been written, there's a lot
that has been and passed on based in the way
that these guys did thing. And you know, again, Berkshire
is a huge company now with different needs, but a

(14:15):
lot of the ways that Munger and Buffett think about
the company are you know, certainly going to live on.

Speaker 3 (14:22):
Right exactly what Munger said in late twenty twenty one
that this was the largest financial euphori episode in his career,
which was seventy five years. And then at the annual
meeting this year he said, I really don't think stocks
are going to do very well the next ten years,
and then Buffett, I love this. Buffett chimes in he goes, well,

(14:43):
if I was running smaller amounts of money, I think
I still think I could do really well, which was
heartening to us because our five billion dollars is smaller
amounts of money.

Speaker 7 (14:55):
So you're like, okay, okay, we got a chance.

Speaker 2 (14:59):
Priceless and thank you for coming back. Bill Smeeaed. We've
talked to you over the years. We've heard you talk
about Berkshire, Warren Buffett and Charlie Munger. So great to
get you to wag and be well. Bill Smeaed of
Smeed Cappel Investment and of course our no boohire read
his story on Charlie Munger. It's on the terminal and
at Bloomberg dot com. Noah, thank you so much of
Bloomberg News. This is Bloomberg Radio.

Speaker 1 (15:20):
You're listening to the Bloomberg Business Week Podcast. Catch us
live weekday afternoons from three to six Eastern Listen on
Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business app,
or watch us live on YouTube.

Speaker 2 (15:34):
Some big news and financial services we talked about Apple
and Goldman Sachs credit card partnership might be coming to
an end. Apple recently sending a term sheet to the
financial giant that would be a first step towards severing
the contract. This is going to a person familiar with
the matter. Apple, you know this right among those, But
this is one of the big players looking to disrupt

(15:55):
financial services by offering its own high yield savings account product,
financing a credit card, Apple cash, and more. Yep, they
know fintech disruption. There's a lot out there.

Speaker 8 (16:05):
Yeah.

Speaker 4 (16:05):
Well, someone else who's looking at disrupt financial services is
Chris Britt, founder and CEO of the privately held fintech Chime.
Chime offers consumers checking accounts with no monthly fees. They've
got savings accounts, products such as secured credit card that
helps users build credit and more. Chime says it has
quote millions of members and back in twenty twenty one, Carol,
when Chime last raised money, it was valued at twenty

(16:26):
five billion dollars.

Speaker 2 (16:27):
Well, Chris joins us on Zoom from San Francisco. The
company officially to launching the Chime scholars Foundation, which we
will get to in a moment. Chris, great to have
you here with Tim and myself. Hope you're well. Tell
us a little bit about the environment for your business,
because it sounds like you guys have a very front
row seat if you will, to what's going on with
the consumer right now.

Speaker 9 (16:46):
Yeah, sure, thanks for having me in the thrill to
announce the foundation. But in terms of the consumer trends
that we're seeing, Yeah, you know, we serve millions of consumers,
and I think the.

Speaker 7 (16:57):
Relationship that we have with.

Speaker 9 (16:58):
Our members is is that they use Chime as their
primary bank account and primary way that they do their
day to day spending. So we actually do, you know,
see a lot of we do have a front row
seat to transaction activity balances. You know, I'd say we're
starting to see a little bit of a weakening among
the consumer that we see. You know, we've seen balances

(17:22):
declined slightly, probably down about five percent year over year,
but at the same time, we're still seeing spending that's
been really solid.

Speaker 7 (17:29):
It's up you know, six seven percent year over year.

Speaker 9 (17:33):
And again, you know, our members mostly use Chime for
their everyday sort of non discretionary purchases, so in many ways,
we're insulated from you know, you know, ups and downs
of the economy because people use our cards for their
everyday you know, grocery transactions and daily habits that you know,
really help you know, fuel our business.

Speaker 4 (17:52):
Chris, are you seeing their spending patterns change, like what
they're actually spending money on this year versus what they
were spending money on in twenty twenty twenty twenty one
in twenty twenty two. Has that mix changed.

Speaker 7 (18:05):
Oh for sure.

Speaker 9 (18:06):
I mean we're seeing more and more just a normalization
of the economy and where spend is happening. So you're
seeing things like ride share at uber and Lyft is
up pretty, you know, pretty significantly year over year. You're
seeing more spending for you know, concerts and restaurants and
and and those sorts of activities, and I you know,

(18:28):
it's it's a well needed, you know, sort of normalization
of you know, just getting back to post post COVID
transaction activity and that's been really healthy, you know. At
the same time, you know, we still see unemployment rates
that are really really low. So and you know, we
serve consumers that make up to about one hundred thousand
dollars is just generally the sweet spot.

Speaker 7 (18:48):
That we serve.

Speaker 9 (18:49):
And those consumers can generally get jobs and they sign
up for Chime accounts, they get direct deposit, and they
use us for everyday transaction.

Speaker 7 (18:57):
So you know, I wouldn't say our business is countercyclical.

Speaker 9 (19:00):
But it's very resilient to you know, be able to
withstand you know, ups and downs in the economy.

Speaker 4 (19:05):
Chris, are you because people use this for direct reposit
for their salaries, for their paychecks, are you seeing are
you seeing people lose jobs? Are you seeing them jump
around more, jump around less? What can what can your
data tell us about job hopping and the strength of
the economy for those chime users?

Speaker 9 (19:28):
Well, look as you as you move down the income spectrum,
there certainly is more turnover and more change in how
and where people work and receive direct deposits. So we
naturally we always see a little bit more turnover. You know,
then you might if if the consumers that you served
made hundreds of thousands of dollars a year a year,

(19:51):
But like I said, it's still very healthy people. Can
you know, there's jobs out there for people, they're readily
available and and a lot of people have you know,
multiple sources of income. That trend hasn't that's been pretty consistent.
I would say, you know, where people might have a
little bit of gig gig work for a side hustle,
but still you know, the primary wages you know come

(20:12):
from a corporation or you know office job that they have.

Speaker 7 (20:19):
You know, people are particularly.

Speaker 9 (20:20):
In our in our portfolio of members that we serve,
they're just amazing, amazing people that are resilient and you know,
can can go out and hustle and and you know,
get the work and get the job that they that
they need to help their families and move their financial
lives forward.

Speaker 2 (20:41):
Hey, Chris, for those who might not be familiar though,
with time, just remind us how it all kind of
works and how what is the business of time and
how you guys make money.

Speaker 9 (20:49):
So Chime exists to unite everyday people to help unlock
their financial progress. And we do that by starting with
offering a core checking account, a deposit account that you know,
China is not a bank. We partner with primarily two
fd I C insured banks that hold the deposits. What
we're really good at is creating you know, really easy

(21:11):
to use, intuitive, low fee services and a tech you know,
end to end tech technology stack and and sort of
operate all aspects of the consumer interaction, primarily through an app.
So we don't you know, have the cost burden of
a heavy you know, sort of branch infrastructure we're able
to operate at a very low cost structure. And then
what we do is we deliver to these to these

(21:34):
members that we serve fee free checking accounts, so there's
no there's no fee associated with you know, having the
core underlying depositive account. We give them access to their
paycheck a few days early. We give them free overdraft
services and other services to help them with liquidity, and
we also help them with credit building. So that combination
of services has really resonated with millions of people.

Speaker 2 (21:54):
That rely on But you make money by getting a
fee on what every transaction that they do off that account.
Is that correct?

Speaker 9 (22:00):
You know, we have a few sources of income, but
that is a very large part of our of our
revenue is the interchange that is earned when consumers use
their Chime cards for their everyday purchases. And what we
like about that model is that it's very aligned with
the consumer. Right, we only monetize when they're engaged with
us and using the card for everyday transactions. We've been
very careful careful to design the business to not profit

(22:22):
from their misfortune, which is often times the way, you know,
larger institutions make money off of this segment. So yes,
we earn money off interchange, and it's really allowed us
to unlock free banking for millions of people who otherwise
we'll be paying huge amounts of monthly freeze draft fees,
you name it.

Speaker 4 (22:39):
Let's talk about interchange fees. The FED is proposing lower
caps on those interchange fees. This is your business. How
concerned are you about this? Does that mean that you'll
make less money if the FED does indeed go through
with that proposal.

Speaker 9 (22:52):
Of course, well aware of the conversations happening in Washington
around interchange. You know, none of the proposals being contemplated
would have any direct impact on Chime or the banks
that we that we partner with, so you know, we're
monitoring it. It's sort of an age old discussion and debate.

(23:12):
But at the end of the day, you know, interchange
has been a huge positive for millions of people that
suffer from, you know, paying outrageous levels of overdraft.

Speaker 7 (23:22):
Fees and monthly fees.

Speaker 9 (23:24):
And you know, like I said, that this interchange based
business model has really been tremendously helpful for us to
be able to disrupt this category.

Speaker 7 (23:35):
Look at look at the changes that have happened in overdraft.

Speaker 4 (23:38):
That's exactly where That's exactly where I wanted to go, Chris,
because you guys were early to do to do this.
You know, so many banks now though offer free online banking,
no ATM fees, early direct deposits, no overdraft fees, something
that you guys have been doing for years. How do
you differentiate from those traditional banks that are now offering
those services that you offer.

Speaker 9 (23:59):
Well, I think it's great that all those changes have happened.
It's awesome for our country. It's awesome for people, you know,
people in every state across across the country.

Speaker 4 (24:08):
What do we do.

Speaker 9 (24:09):
We have to keep innovating and push the envelope on
the next service that's actually consumer friendly and actually help
our members you know, move their financial lives ahead for
themselves and for their families. So we certainly have more
copy chat you know companies, you know, startup types. But

(24:30):
also it's in many ways it's it's flattering that these
big institutions now do advertising on getting paid early and
and free overdraft. Note like I would say the overdrafts
are the structure are friendlier, but you know there's still
you know some gotchas, you know you, they may give
you a little bit of extra grace period, but a

(24:52):
lot of these institutions still aren't shy about being pretty
aggressive on the on the fee schedule.

Speaker 2 (24:57):
Hey, Chris, just a few rapid business questions to wrap
up the business part of our interview in three and
sixty seconds. I want to ask you because we want
to get to your foundation. We want to talk a
little bit about your backstory. First of all, are you
guys profitable?

Speaker 9 (25:10):
We have very attractive, highly profitable unit economics. We are
not yet profitable, but that's a decision we've made.

Speaker 7 (25:21):
As a as a private company.

Speaker 2 (25:23):
Okay, will you be soon or that's not a goal,
that's a part of it.

Speaker 9 (25:27):
We're not optimizing for profitabilit right now. We may actually
be profitable in Q one, but it's not okay, it's
not a stated goal. You know, we raise a large
a round of financing in twenty one, so you know,
we don't need to raise money again. But you know,
we're feeling like there's an opportunity right now to continue
to pursue our vision, which is to you know, be
the number one market share company in terms of primary

(25:50):
account relationships among consumers that make up to one hundred
thousand dollars a year, and I think that's within reach
for us over the next few.

Speaker 2 (25:57):
Years, which tells you a lot about the folks that
you are reaching out to and help. Growth in users
and how sticky if somebody is on the platform, do
they stay with you?

Speaker 9 (26:05):
Oh yeah, I think that's if you were to, you know,
in a nutshell describe what different differentiates Chime relative to
other consumer fintech companies is just that it's the engagement.
It's the primary account relationship that we enjoy with with
millions of consumers. So the majority of people that that
bank through the Chime app are using us as their

(26:28):
primary every day.

Speaker 7 (26:30):
You know, transaction relationship and sort of way to manage
their money.

Speaker 9 (26:34):
So yeah, it results in very high engagement, lots of
transaction volume, and you know, for the business, extremely high
our poo relationships with with our members, but in a
way that's very aligned with.

Speaker 2 (26:49):
That, all right, and growth in users. Can you give
us any kind of like year to year overgrowth.

Speaker 9 (26:54):
Oh yeah, I mean, you know, we're growing at a
rate of you know, next year will grow well above
of thirty percent. So I think in an environment where
a lot of companies are you know, m a US
or declining or flatlining a bit. You know, we are
a real bright spot in that we're you know, growing
at a at a nice clip right now.

Speaker 2 (27:13):
And just quickly, since you just did another funding round,
any plans to go public anytime soon? I know this
has been asked certainly in the past.

Speaker 7 (27:20):
Well, we did a funding around in twenty twenty one.
That's been it's been a few years.

Speaker 9 (27:24):
But yeah, yeah, but look, we intend to be an independent,
large public company. We've certainly you know, we've raised a
lot of money and so we uh, you know, we
want to make sure that we can do that for
for our amazing investors and also for all of all
the chimers that work here to support our members every day.
So it's not something that we have planned on in

(27:46):
the short term, but we're certainly about as IP or
ip already as as you know a company could be,
and were certainly of the scale to be able to
to be a you know, a nice public company. I think,
you know, we're going to wait and see how the
the economy plays out and the stock market plays out
over the course of you know, the first half of
next year and figure out planes from there.

Speaker 4 (28:07):
Hey, Chris, I want to talk about the big news
this week coming from Chime, the company announcing the Chime
Scholars Foundation. I actually, you know, we've talked many times
in the past, I didn't know your backstory. Give us just,
you know, quick thirty seconds on your backstory and how
that got you to launch a company like Chime, and
then we'll get into the foundation.

Speaker 7 (28:26):
Yeah, you asked about public offerings.

Speaker 9 (28:27):
Well, this today is the public offering of Chimes Scholars Foundation.
I'm so thrilled to announce it, and I appreciate you
asking about my backstory. I actually wrote a little blog
post about it too on the Chime website. But man,
I was so lucky growing up. I grew up in
Mount Vernon, New York, which is a sort of working

(28:48):
class you know town, lived in an apartment building and
my parents got divorced.

Speaker 7 (28:54):
My mom had to go to work and my dad
wasn't around all the time.

Speaker 9 (28:57):
And by the grace of God, I had a neighbor downstairs.

Speaker 7 (29:00):
His name was Joe, and Joe used to look out
for me.

Speaker 9 (29:03):
He made sure that I got to practice, did my homework,
had some dinner, and we had so much fun. He
became like a father figure, a grandfather, and really my
best friend.

Speaker 7 (29:13):
And and why that's relevant to today's news is.

Speaker 9 (29:15):
That, you know, my mom, when the schools got pretty
tough in my town, my mom decided to try to
apply to a private school when I got in, but
it was really difficult to pay for it, and Joe
agreed to I mean, I had a scholarship, but still
it was tough, and Joe.

Speaker 7 (29:31):
Agreed to pay for it.

Speaker 9 (29:32):
And then later in life, when I got into college,
you know, neither of my parents had graduated from college,
and I got into a great college, Tulane University. I
got a scholarship there too, but again it was tough
to make it all work, and Joe agreed to pay
for you know, the remaining balance for me and I

(29:53):
just you know that story, which probably sounds incredibly weird
or lucky, it really was. And I think when I
think about very Capua, Yeah, I mean, look, I think
when I in ways that Chime could give back in
some way. You know, I talked about our mission around
unlocking financial progress. Higher education is the most powerful engine

(30:18):
to allow for economic mobility. So it's very much brand
aligned for us. Is what can we do to help
people gain more access to education. Obviously, there's you know,
lots of colleges and community colleges and different ways to
get you know, post secondary education. But too often people
are you know, saddled with tremendous amounts of debt and

(30:38):
they start out life like really difficult starting place because
you know, they may be sort of feel forced to
go to a four year college, they've got a ton
of debt, and the first you know, at of their
professional lives are very difficult. So that's what we've tried
to solve for with this nonprofit that we've started at
Chime scholars Foundation. I think, you know, we're thrilled to

(30:59):
announce it today. You know, we've already been in pilot
for about a year. We've offered scholarships to over three
hundred students. And one of the things that's really unique
is that it's not just for four year university, it's
also for community colleges, it's for vocational training, and you know,
we're really optimizing for people that have the grit and

(31:19):
the grind and people that we feel a high degree
of confidence are going to see it through and get
their degrees and move their financial lives for themselves and
their family forward. And I think maybe you know, in
addition to announcing the three hundred students, you know, the
other announcement that I just wanted to highlight is Chime
and our board of directors and investors have committed to

(31:39):
allocate one percent of the equity of our company into
this foundation to ensure that we can fund it for
many years to come.

Speaker 2 (31:46):
Well, and I love it as you write, as we
look at this release, you know, it's like everyday kids
like you who have responsibilities at home, work hard, hustle,
yearn for something more. It's not necessarily everybody who at
a four point zero in terms of who you are
providing this for, are possibly offering up. Thank you so much,
Chris Brett, Happy holidays, have a good holiday season, Founder

(32:07):
and chief executive officer of Chime.

Speaker 1 (32:09):
Right here on Bloomberg, you're listening to the Bloomberg Business
Week Podcast. Catch us live weekday afternoons from three to
six Easter on Bloomberg Radio, the Bloomberg Business App, and YouTube.
You can also listen live on Amazon Alexa from our
flagship New York station, Just Say Alexa Play Bloomberg eleven
thirty Hi.

Speaker 2 (32:31):
Every now and then a story hits so hard it
gives you the chills, and this is certainly one of them.
It's about deep fake pornography images that have been digitally
manipulated to depict an individual doing something they did not like,
in this case, posing naked, and about a group of
young women in a New York City suburb horrified to
learn that their photographs had been manipulated and posted online,

(32:52):
and they ultimately took matters into their own hands.

Speaker 4 (32:56):
It's the cover of the new issue of Bloomberg BusinessWeek.
You can read the story now on the Blue Terminal
and at bloomberg dot com slash BusinessWeek. The story by
Bloomberg News investigative reporter Olivia Carville and a Bloomberg News
cybersecurity reporter Margie Murphy, both of whom join us now.
Olivia here in our Bloomberg Interactive Broker studio. Margie joins
us from our San Francisco bureau. Margie, excuse me. Also,

(33:17):
here's the editor of Bloomberg Business Week, Joe Weber here
in our Bloomberg Interactive Broker Studio. Wow, Joel, how did
this story get on your radar? Get on their radar?

Speaker 10 (33:27):
Olivia and Margy pitched it, and from the moment they
brought the idea to us, we were mesmerized and then
more honestly horrified, and we felt like it was a
story that we had to do, and we needed to
do it on the cover to make sure that the
world found out about it, because it is a perhaps
frightening sneak peek at the.

Speaker 4 (33:47):
Future and the lack of.

Speaker 10 (33:51):
Real common sense and laws about where generative AI might
possibly take us. And the beginning of the story is
like your worst nightmare, and Olivia, why don't you take
us there?

Speaker 2 (34:04):
Because it's ultimately where this sort's about Cecilia.

Speaker 11 (34:08):
So the story starts in Levittown, Long Island, which is
an interesting place to start. This is the birthplace of
American suburbia, the first post War US suburb, and this
group of teenage girls who had all attended the same
high school discovered that their photographs that they'd posted on
social media had been manipulated into deep fake pawn, that is,

(34:28):
fake pornography created using deep learning models.

Speaker 2 (34:32):
Or artificial intelligence.

Speaker 11 (34:34):
And Cecilia Luke, who opens the story, discovered this while
sitting in a car in a parking lot and a
Strip Mall in Levittown, and as she's looking through this
website that a friend had sent her who had also
discovered the photos, she sees images that horrified, disgusted, really
scared her. These are photos which showed her being digitally undressed,

(35:00):
very graphic images. Content on the sex site included people
posting about her being raped and murdered. In some of
the cases the images, she was just a child. She
was five years old. And she also saw photos of
friends of hers who attended the same school. And it
was that night New Year's Eve of twenty twenty that
news of this website and these deep fake images really

(35:22):
spread across the suburb in Long Island.

Speaker 2 (35:24):
Not them at all. In other words, those images obviously
altered and they knew it, like they went through it,
and they're.

Speaker 10 (35:32):
Like but not obvious to anyone else exactly. And that's
where the horrifying part comes in.

Speaker 8 (35:38):
Go ahead, we yeah, I.

Speaker 11 (35:39):
Was gonna just say that for the woman now, because
they're twenty two to twenty three. At the time, they
were eighteen or nineteen years old. And the scariest thing
was looking at these photos where they had been undressed
and realizing that they look real enough that anybody else
who sees them is going to believe it really actually
is their bodies. Celia was looking at this nude image

(36:02):
and knowing that the priests weren't hers, but also realizing
that most people who saw this image would think that
they were.

Speaker 2 (36:10):
So Margie, let's bring you into this. An incredible story,
so not a problem. You call the police and you
say this isn't me, and it's done, and they take
it down. Right, It's that easy. I'm being sarcastic.

Speaker 12 (36:26):
Yeah, not quite at the moment. There's no federal law
prohibiting deepfake pornography. So the challenge that these girls had were,
you know, they were so incredibly brave. They did this
investigation mostly on their own, figuring out exactly who had
created these images of them, and they took them to

(36:48):
the police, and there was very little legal recourse for
them to get justice. And in fact, it was only
after searching through everything that that Patrick carry the former
classmate who've been posting these images. Looking through everything that
he'd posted, they'd seen that he'd actually accidentally posted real

(37:11):
child sexual abuse material, and that's what they got him on.
It wasn't on the deep fake pornography at all, and
that's an issue that's a frustration being felt by women
around the world. Even though certain states in the US
do have laws around deep fake pornography, it's just so
patchwork across the US and internationally there are issues with

(37:32):
the law as well because the technology has just advanced
just at such a breakneck speed, just lawmakers haven't been
able to keep up with it.

Speaker 10 (37:42):
What about the companies and the platforms on the AI front, like,
what did we learn about what they can and can
do or aren't willing to do?

Speaker 12 (37:53):
Margie right. So the issue with a lot of the
technology that's around now and that from our reporting we
saw was really popular for creating deep fake pornography and
even child deep pornography. A lot of those tools are
open source. So there's this kind of divide in Silicon Valley.

(38:15):
You've got the developers who've created this really incredible image
generation technology that you know, they want to be used
for good, who believe that it should be kept out
in the open for everyone to use and not gate
kept by like big tech platforms who have typically provided
services and you know, you might enter in a prompt

(38:38):
and you get your image back, whereas with the open
source technology, anyone can go and interact with the code,
and therefore you can play with it. And even if
a developer was to put a guardrail in place, like
prohibiting adult content, it's relatively easy for someone to go
in and change that. And so that's opened this Pandora's box.

(38:58):
We've got all these open source technologies that even when
a developer realizes a bit are being used for bad,
the cats out of the bag and people are already
exploiting it.

Speaker 4 (39:09):
Olivia. The story starts in Levittown. It's centered around Levittown,
but it spans the globe. What happens in New Zealand,
what's going on with a former police officer named Will Wallace.

Speaker 11 (39:24):
I think that was one of the most remarkable parts
of reporting this story is that it really is a
dual narrative. You have the girls in Leavittown investigating the
predator who is posting images of them online on the
sex site that an ex cop in New Zealand has
discovered is already been posting images deep faked images of
New Zealand women as well, and so he starts an

(39:46):
investigation into the man behind this website. And it's very
rear in journalism, or at least in my own career,
where you have a story that has this jewel narrative
where you can weave them together and see an investigation
unfolding in suburban New York and at the same time
in New Zealand, of all places, which happens to be
where I'm from, there's an ex cop trying to work

(40:08):
out who was behind this website. I remember one night
I was driving back from Levettown to New York and
I called Margie to talk to her about an interview
I'd just done with Anna, who was in the story,
and ultimately discovered the identity of Patrick Carey whod been
posting the images and took that evidence to police. And
I called Margie. I was excited because finally we had

(40:29):
this key piece of the story to tell her about it.
And that's when she responded, saying that she had discovered
that there was also this whole other part to the
story where there were these vigilantes, this movement trying to
track down who was behind this website, and there was
an ex detective from New Zealand who had been leading
this fight to kind of combat deep fake pawn and

(40:52):
to take down this deplorable internet sex site.

Speaker 4 (40:56):
So where do we go from here?

Speaker 10 (40:57):
Because, as you mentioned, there's no federal law prohibiting any
of this, Marguie.

Speaker 4 (41:02):
But what happened in New York State?

Speaker 11 (41:04):
So in New York State we have seen the District
Attorney in Nassau County, which is where this case unfolded,
actually put forward or introduced new legislation trying to target
deep fakes. The problem is that, you know, what do
you focus on? Is it the companies that are releasing
this technology? Is it the regulators who can't catch up

(41:26):
to this technology, is it's being rolled out? Or is
it the predators and bad actors like Patrick Kerry who
are abusing it?

Speaker 2 (41:32):
And and yes, no, and I do also wonder and Margy,
let's bring you back in. I mean in terms of
police and law enforcement, you know how high up on
the list is this in terms of prioritizing the things
that they focus on?

Speaker 9 (41:47):
Yeah?

Speaker 2 (41:47):
Absolutely.

Speaker 12 (41:48):
One thing that was really interesting about Will Wallace, who
you know, you guys have just mentioned, he obviously deeply
involved in this website. It was a passion project of
his to kind of find out you find help victims,
find the people that were posting these pictures, but also
uncover who the admin of the website was. But because

(42:09):
he has a background in the police, he has this
he really understands what it takes to be able to
actually gather evidence, bring a good tip to law enforcement,
and see that actually be followed through. And he would say,
he would tell me how frustrated he was every time
he would give a tip to law enforcement in different

(42:32):
local law enforcements all around the world and not hear
anything back. But he also understood that it's so challenging
when there are you know, there are certain skill sets
you need to be able to investigate this kind of crime.
There needs to be better education so that when a
victim comes forward in the first person they're speaking to,

(42:52):
that they understand that yes, there hasn't been a physical crime,
but this cyber crime is just incredibly traumatic and super
damaging and that person is a true victim. And additionally,
you know, when the laws aren't robust, laws aren't in
place for prosecutors to deal with people once they've found

(43:12):
a suspect, that all is just it's incredibly hard for
police officers to do that work.

Speaker 2 (43:19):
When Patrick Carey, when it finally did come down on him. Olivia,
Tim and I were talking about this before we got going,
before you guys came into the studio. So he ultimately
was sentenced six months in prison, ten years probation, lifetime
status as a sex offender, can on a smartphone anymore,
or any device with a camera, or be withinndred a

(43:40):
thousand feet of a school or a playground. Six months,
but he was out in four for good behavior. I
don't see in a good behavior here that to me
is not even a slap on the wrist. So it
just kind of speaks to law enforcement not really necessarily
respecting the severity because you talk to these women and
they definitely felt harm, pain and there was an impact.

Speaker 11 (44:01):
Oh yeah, there's no doubt about that. I Mean a
lot of these women have sort out therapy since this.
One lost twenty pounds from stress, one dropped out of college.
Three I talked to Carrie Pepper spray in their handbags,
and two Carrie knives with them. Now they're so scared
of what was done on the website, not only what

(44:22):
Carrie was posting, but the hundreds, if not thousands of
strangers in the world who saw those photos and tried
to reach out to them. One of the craziest parts
about this case is that Carrie also included the girl's
names addresses social media information, so they had these awful
messages and phone calls coming through to them, people harassing

(44:44):
them for months, and one of the threads on the
site had over thirty thousand views. That's thirty thousand people
looking at a fake porn image of you where they're
writing about you being raped and murdered. You know, the
fear was real when I was talking to these young
woman and there is a deep seated frustration and live
it town from the families, teaches at the school, the

(45:07):
girls themselves. That Carrie only received six months, he was
out within four months, and he's back in the neighborhood now.

Speaker 3 (45:14):
It's amazing.

Speaker 10 (45:15):
I think the greater thing here, and obviously the circumstances
of this particular story are totally frightening, but it also
does just speak to this greater challenge that we're going
to be living through now. We have a technology that
the world is not prepared for, and this shows you

(45:36):
how unprepared we are for it. And sure there's a
lot of good that can come from it, but there's
also your total nightmare, and you know, props to Olivia
and Marty for being able to tell this story.

Speaker 2 (45:47):
Well and coming off of Open AI and the debate
within that company about the ethics and the concerns about
generative AI where it takes almost the perfect.

Speaker 8 (45:55):
Time for a storyline.

Speaker 4 (45:57):
He did it once again.

Speaker 10 (45:58):
He does They did it once again.

Speaker 2 (46:00):
Guy did do it once again. Olivia Carvell, investigative reporter
at Bloomberg News. Margy Murphy, She's cybersecurity reporter apt Bloomberg News.
Incredible story, the cover story, most read, the Bloomberg Big Take,
and our thanks to Jill Weber. This is Bloomberg.

Speaker 1 (46:15):
You're listening to the Bloomberg Business Week podcast. Catch us
Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App,

Speaker 4 (46:29):
It is time now for another edition of Bloomberg Plugged In.
It's your weekly look at EV's and all is not
well when it comes to the world of EV's. Carol,
we got the news that Ford is reducing capacity and
hiring plans at a battery plant that it's building in Michigan.
Because it sees weaker demand for EV's Remember, sales off
it's signature F one fifty lightning plug and pickup fell
forty six percent in the third quarter.

Speaker 2 (46:47):
All right, So let's see what Brendan Joan has to
say about that. He is president CEO at Blank Charging.
It's a two hundred and forty one million dollar marketcap
company trades on the NASDAK. It of designs, makes, owns,
and operates EV charging station and the company says it's
contracted soldier deployed nearly eighty five thousand charging ports around
the world. He joins us on Zoom from Miami Beach.

(47:09):
Excuse me on the phone from Miami Beach, Florida. Hey, Brendan,
great to have you here with us. Doc took a
hit today, down about seven percent. Your down about sixty
seven percent year to day. Before we talk about the business,
because you guys had a good quarter. What are you
hearing from your investor relations teams about what's going on?
Why is the share price seeing so much pressure to

(47:29):
the downside.

Speaker 13 (47:30):
Well, yeah, I think the whole industry. If we look
at the EV charging industry and then more broadly at
the EV industry in general, there. We've been under a
lot of pressure for the past year. There's a marked
difference from the frothy years that we saw about eighteen
months plus ago to where we are now, and all
the infrastructural companies seem to be suppressed at a much

(47:53):
lower valuation. And if you listen to the advisors, you
know what everybody's saying is the same thing to be
a growth company. But we're focusing on profitability now. So
you've got to continue to grow, and you've got to
give us a definitive path towards profitability, and that's what
we've done on Blank We give them the timeline and
a target and we intend to get there by December

(48:15):
of twenty twenty four.

Speaker 4 (48:16):
Well, you're not going to grow if they don't grow
the number of evs that are out there significantly. And
I think that's an important thing that I want to
get from you, Brendan, is what's going on with EV's.
I thought EV's were the future, and now on some
dealership lots, they can't get rid of these things fast enough.

Speaker 13 (48:33):
Yeah, I mean, there's some micro issues in the in
the industry, but when we look at aggregate sales both
globally in the United States, they're up year over year
and continue to be up. Eight percent was the sales
pen rate on a US basis. In California, it was
twenty two percent. In one of the earlier months of

(48:53):
the quarter, it was actually at twenty five in California.
You know, California has a twenty thirty five mandate of
nothing but of evs can be sold in the state,
and several other states have adopted that same thing. So
I think we're certainly seeing a little bit of a
downplay in the sales volume. But over time, you know,

(49:13):
based on regulation and OEM commitment, well, we're going to
see an uptick. And when you look at the broader numbers,
you know, we're looking at a twenty thirty number of
just thirty five percent EV penetration rate, and that would
necessitate a need for thirty million chargers within the United
States alone. So while there's some blips right now, we're
still encouraged by the overall economic positiveness of the whole space,

(49:39):
especially the states that are mandating evs and zero sales
of internal combustion engines.

Speaker 2 (49:46):
Brendan unfortunately only have about forty five to fifty seconds
left here. How do you compete though, with the likes
of Tesla that continues to open up its charging network
and capabilities to other automakers.

Speaker 13 (49:55):
Yeah, well, Tesla is primarily a DC as charge. Our
owner operated model, Blink is a full on vertically integrated
sales model where we sell chargers. The majority of the
chargers we sell are L two chargers, and we own
and operate them as well. So Tesla is primarily highway
based charging. We provide charging in the metro, we provide

(50:17):
charging in the home, We provide charging at multi family dwellings,
and we do it when we install an own our
operator as far less the cost the expense of DC
fast charging, So it's a completely different business model. But
we'll also be deploying chargers that can charge Tesla's and
if we look more broadly at what our number one
customers who plugs in the blink in Tesla drivers.

Speaker 2 (50:39):
Listen, promise to come back soon when we have a
little bit more time. We would love to continue this conversation.
Brendan Jones is the president CEO at Blink Charging. Joining
us on the phone from Miami Beach.

Speaker 1 (50:53):
live weekday afternoons from three to six Eastern on Bloomberg Radio,
the Bloomberg Business App, and YouTube. You can also listen
live on Amazon Alexa from our flagship New York station,
Just Say Alexa play Bloomberg eleven thirty.

Speaker 8 (51:12):
Plenty.

Speaker 2 (51:13):
Hen in our second hour of the weekend edition of
Bloomberg Business Week, including what it's like to fly private
and whether economic conditions are impacting demand, plus the guide
to holiday entertainment from our friends at Bloomberg Pursuits, and
from the founder of a company called Hire Santa. Apparently
it's kind of hard to find a professional to dress
up like Santa Claus this time of year. Talk about

(51:34):
supply demand challenges. First up though this hour, I guess
our audience knows very well. He's been joining our program
for years. As Tim and I were discussing, he.

Speaker 4 (51:43):
Was on with you and Mike McKee. Mike McKee, Okay,
the show is called taking Stock back in twenty fourteen,
that was the year they actually launched Ron.

Speaker 8 (51:50):
That was the first year.

Speaker 4 (51:51):
That was the first so he's been here since the beginning.

Speaker 2 (51:54):
Nay check, it's of course, co founder and CEO of
Ron joining us now. Welcome welcome back.

Speaker 14 (52:01):
Thank you so much. I feel I feel as close
to being at home on air here than anywhere else.

Speaker 2 (52:07):
Well, likewise, we feel like you're part of the family
and we're so glad to have you back. It's been
I feel like a big year for you.

Speaker 8 (52:14):
Guys, really big year.

Speaker 14 (52:15):
I mean big month in particular, a lot of a
lot of exciting things happening.

Speaker 2 (52:18):
Can we talk though, about the billionaire Blackstone executive David Blitzer,
former hedge fund manager Gabe Pluckin, ex football stars Tim Tebow,
Steve Young. They did a deal and they're now involved
in the company.

Speaker 8 (52:32):
Yeah, it's so the quick story is not a.

Speaker 2 (52:36):
Year ago right, July twenty so we.

Speaker 14 (52:38):
Just announced it, but this happened July of last year.
And effectively what happened is we put a group together
in an SPB with really exciting names, a bunch of
Kerrent and retired athletes as well as just incredible people
like Blitzer and Gabe, and we bought out the private
equity interest in our business so that we can really

(52:58):
think about the business in a more long term way.

Speaker 4 (53:02):
What was it that the private equity firm wanted to
do that you weren't ready to do.

Speaker 14 (53:05):
It really wasn't. They weren't pushing us to do anything,
but the nature of private equity is a five to
seven year whole time, and we were in we were
coming into year five and they're great partners.

Speaker 4 (53:16):
In fact, they were talking about el.

Speaker 14 (53:18):
Caterton, the managing partner of their growth fund is still
on our board even though they sold their interest. That
was part of something that I really wanted as part
of the deal and they you know, I just was
kind of forecasting the future macroeconomically, time of uncertainty if
they wanted us to sell the business and it wasn't
right for us. So and more than anything, I kind

(53:38):
of fell back in love with the brand and the company,
and I thought, I kind of want to do this
maybe for thirty forty years, not five years.

Speaker 2 (53:46):
Why had you fallen maybe out of love a little bit.

Speaker 14 (53:48):
Well, the pandemic was a really stressful time, you know, not.

Speaker 8 (53:51):
Just your statement. Yeah, it was a stressful.

Speaker 14 (53:54):
Time for every business, every person, but certainly I think
for me as a leader of a company, it felt
like there was a new crisis every single week, and
we had some growing up to do.

Speaker 1 (54:05):
You know.

Speaker 14 (54:05):
The business still grew tremendously during that time. In fact,
it was great for businesses like ours, but it really
wrung me out, and I think I was at a
point where, you know, just we talk a lot about
mental health in our company, I was at a breaking
point and I felt like I either need to sell
this company or something needs to change. And for me,
the thing that needed to change is I needed to
feel almost more invested in it and I needed to

(54:26):
make some changes.

Speaker 2 (54:27):
I heard a quote I just want to where you said,
I think after this and kind of getting back control,
nothing has changed and everything has changed. Yeah, which kind
of says so much.

Speaker 14 (54:36):
Yeah, it's really exactly how I feel, even though conceptually,
you know, el Catterton was a minority shareholder in the business,
so in theory their ownership change to a new group
didn't change anything, but the way I feel has changed completely.

Speaker 4 (54:52):
Do you feel more in control?

Speaker 8 (54:53):
Absolutely? Yeah.

Speaker 4 (54:54):
And I have a controlling stake in the company.

Speaker 14 (54:56):
Yes, so, uh, you know, we call it because of
my other is involved. I've got a brother in law,
so we've got family control of the business and the
goal is to have a long term hold here.

Speaker 2 (55:09):
Dad's involved.

Speaker 14 (55:10):
That was one of the most exciting parts about this.
I called him. You know, my parents have spent three
years in London doing service and came back and I said, hey,
I have this crazy idea. What do you think about this?
And you know, he's an incredibly experienced executive and he said,
I love it. What can I do to help? So
we added him to the board and it's been a dream.

(55:33):
I've told people. Look, there are people who are going
to say, oh, you know you're working with your dad
and I all I do is I forecast twenty years
in the future, and I think if I could, if
I didn't take this opportunity, I would regret it for
the rest of my life. And I get a chance
to I get a chance to work with him and
you know, and have that family relationship. It's incredibly unique

(55:56):
and special.

Speaker 2 (55:56):
Yeah, no doubt about it. Right, We allly get to
do this once. Yeah, right, to figure out how you
want to do it? Well, not investors though, in the
sports world.

Speaker 9 (56:04):
Ye.

Speaker 2 (56:04):
So how are you then maybe thinking about you know,
we talk often about branding and partnerships and especially with athletes.
How are you guys thinking about that as part of
the strategy, the growth strategy going forward?

Speaker 14 (56:17):
Well, it's interesting. Our brand launched as an active brand,
so we were carried in Equinox and Peloton and Soul
Cycle and Barry's boot Camp in places like that, and
then we added in our commuter line. I'm wearing a
full commuter shirt and a commuter you know commuter.

Speaker 4 (56:31):
We all love the computer.

Speaker 14 (56:32):
So it's been an incredible part of our business. But
active is at our roots. That's how we still see
ourselves as a performance brand. So the sports partnerships, the
athlete partnerships, is something that we're planning to lean into
more as part of this. We have seven professional sports
team owners on the cap table. We have the NFL, NBA,
Major League Baseball, Major League Soccer, English Premier League all

(56:54):
represented across the ownership group, and that's that's a great
opportunity for us.

Speaker 2 (57:00):
And a great revenue mover. Eventually, could you see yourself
doing lines around an athlete.

Speaker 14 (57:05):
I certainly think there would be collections and collaborations in
the future.

Speaker 8 (57:09):
Yeah.

Speaker 4 (57:09):
What's the bricks and mortar strategy right now?

Speaker 14 (57:11):
So we've opened eleven stores in the last twelve months,
so we have we have fifteen source total now.

Speaker 8 (57:17):
Until was dead.

Speaker 14 (57:18):
Yeah, it's it is certainly not for us. In our
stores are all profitable. The payback period has been incredibly
quick on these stores and what they do for us
in a market. We can measure the e comm impact
and the awareness impact when we open a new store.
So I think it's getting more competitive though. Every brand
is trying to open retail. So there, you know, there

(57:40):
was kind of a window of opportunity. I think that
window is starting to close. Also, you know what's happening
macroeconomically that may shift over time. But online digital acquisition
costs have been growing at such an increasing rate. Everybody's
playing in that space that it became really expensive to
acquire companies online. Now now you can acquire companies or

(58:00):
customers the old fashioned way through retail and make money
as you're acquiring them.

Speaker 8 (58:05):
How do you track that, the eCOM left.

Speaker 4 (58:08):
Yeah, how do you try?

Speaker 15 (58:09):
Yeah?

Speaker 4 (58:09):
Exactly. How do you know that what's happening in the
store outside of a store will lead to a sale online?

Speaker 14 (58:14):
So we have a baseline of data in every single
market that we track by zip code, right and after
you open a store, there's a thirty day measurement, a
three month measurement, a six month measurement, and a year
long measurement and you try and see did the baseline
of e comm rise since the store opening? Is it
complete direct correlation? Hard to know because the brand's also growing.

(58:36):
But if you if you then minus overall brand growth,
did the market grow at an above rate of the
standard growth rate? And that's kind of how we think
about measuring it.

Speaker 2 (58:45):
I am always curious about like a product line or
a brand because I think sometimes you can grow too
fast in terms of the stuff you offer that it
just gets overwhelming. So how do you think about how
you kind of you know, cultivate that or curate that
so that you don't kind of overwhelm the concer.

Speaker 14 (59:00):
It's tricky because the customer has given us such opportunity
to do so many things as we've introduced commuter, and
we have to we have we have to guard ourselves
a little bit against it. But right now we say
we really can outfit about eighty percent of a guy's closet.
We've been lucky. We've always paid above market for retail

(59:21):
in particular. That's that was the toughest piece, you know,
as we've scaled the but it's so critical to have
good people in your stores. It makes all the difference.
When if a store is not performing well and you
put the right person in it will it will just
completely transform how the store performs. So we've been fortunate
that we've been able to attract really good talent.

Speaker 2 (59:41):
Speaking of those stores, they're going to start selling women's stuff.

Speaker 14 (59:44):
Finally, every every interview at the end either yeah, so
when's it happening? Uh So this coming May, we will
be launching women's and it's incredibly exciting. It's been a
long time in the works. You know, we've started. We
started as a men's brand. We did a women's capsule
in twenty nineteen and it went so well it sold out.

(01:00:05):
But you go into twenty twenty and do you want
to take the inventory risk and continue to lean into it.
But we brought an incredible chief product officer who is
really the most talented fabric person I've ever worked with,
and she has put together an incredible initial collection. It's
been received so well as we've taken it to market

(01:00:27):
and introduced it to wear testers. And part of the
big story of Roan is that we added three very
talented female executives over the last three years and they've
been a big part of our success, and seventy percent
of our team is female, so we wanted to build
a collection that they were proud and excited to wear,
and I basically just tried to get out of the.

Speaker 2 (01:00:49):
Way intentional hiring women.

Speaker 14 (01:00:54):
I would say, we hired the absolute best people for
the position, and they happened to be women. I think
we have always believed in building a diverse and strong team,
and we needed.

Speaker 8 (01:01:07):
That at every level.

Speaker 14 (01:01:08):
We've just added a female board director named test Roaring,
who's incredibly talented. But we always try and hire the
best person for the job, and the best people for
the job for these jobs were the women that we hired.

Speaker 4 (01:01:20):
I talked to us about financials.

Speaker 2 (01:01:22):
You guys have said publicly, are you going to do
a commuter suit for women?

Speaker 14 (01:01:26):
I can't reveal new collections on waiting some numbers.

Speaker 2 (01:01:32):
I know you're going to be as we should be,
but I'm just.

Speaker 4 (01:01:35):
Okay, So one hundred million dollar annual run rate profitable
last three years. What else can you tell us?

Speaker 14 (01:01:44):
Well, the company's growing twice as fast since we did
this transaction than we did, you know, than we were
growing before, and better environment or what I would say,
it's actually probably a harder environment. Most of the brands
in our space are flat to down quite significantly. This year,
we've opened eleven stores. As I mentioned, in the last
twelve months, there's been strong growth in a couple of

(01:02:09):
our categories. We have some product lines that are growing
at north of three hundred percent this year. So we
feel really good about where the business is today, and
we you know, we have a lot of conviction that
we can continue to grow in scale. It's not easy,
but we're excited.

Speaker 8 (01:02:24):
All right.

Speaker 4 (01:02:25):
We got a little bit of a lightning round.

Speaker 14 (01:02:28):
The light round. I don't think this has ever happened
before the first time at the point, just like you, Okay,
you don't have.

Speaker 4 (01:02:34):
To answer in a lightning way because some of these
are longer answers.

Speaker 2 (01:02:36):
Okay, go ahead.

Speaker 4 (01:02:37):
Work life balance, we talk a lot about work life balance.
You share so much of your life on Instagram. I
followed you for years. You have family, kids. Is work
life balance and illusion?

Speaker 8 (01:02:47):
Yes it is.

Speaker 14 (01:02:49):
I mean, I don't even like the word balance. I
think it's a I think it's the wrong term. And
I think I've grown as I've thought more about this.
I really love I can't remember where I heard this.
I love the harmony because in theory, when you're doing
it right, your work should help you at home and
your home should help you at work, and that the
balance makes.

Speaker 8 (01:03:09):
It feel like there should be a bucket.

Speaker 14 (01:03:11):
Of each and you need to make them equal or
a certain proportion, and harmony shows you how they can
really influence each other. And for me, becoming a better
leader in the workplace, being more thoughtful and sensitive, how
I approach conversations, how we think about long term planning
has for sure made me a better parent and I

(01:03:31):
hope a better partner.

Speaker 2 (01:03:34):
Do where to go? Okay, this is back to kind
of hardcore business. What prompts men to buy activewear these days?
Has anything changed? What gets their own target demo to
pull out the plastic and buy?

Speaker 14 (01:03:47):
Yeah, what's really exciting is I think the shift during COVID,
where I think in particular, we saw a shift for
men to start taking better care of themselves, to allow
themselves to take better care of themselves. That I think
has continued and I hope never goes back. It's really important.
And so you know, there's a lot of different modalities.
It could be yoga, it could be running, it could

(01:04:08):
be cycling, but most of our customers do a balance
of all of those.

Speaker 2 (01:04:12):
You talked about the athletic side of the business. Is
that still the big chunk of the business.

Speaker 14 (01:04:15):
It's pretty equal at this point between our active and
our commuter lines. Yeah. Wow, there are a lot of
customers who only know us for our commuter line.

Speaker 2 (01:04:23):
Wow, what's more profitable?

Speaker 14 (01:04:26):
I would say our commuter line is more profitable. It's
a higher price point.

Speaker 2 (01:04:29):
Okay, okay.

Speaker 4 (01:04:30):
So when you told us earlier that covid was really challenging, Yeah,
was that as challenging as the first couple of years
of just getting the brand off the ground and like
knocking on doors and getting Peloton and Equinox and berries
to carry this stuff.

Speaker 14 (01:04:42):
It was more challenging for me, There's no question it
was more challenging. In the beginning. You're so excited and
you've got nothing to lose, right, So you're kind of
trying to build this business from scratch, and if you
lose it, you know, no harm, no fallid, it doesn't
it's not worth anything at that point. But then as
it grows, there's more pressure, there's more people, you know,

(01:05:03):
and I care so deeply about how our team feels
about work and and so the pandemic was hard again
on so many people and so many families. I just
felt that weight all the time, and I didn't know
how to relieve it. So for me it was harder.

Speaker 2 (01:05:22):
Last question, right, Yeah, if everything goes according to plan,
ron will fill in the blank.

Speaker 14 (01:05:29):
Ron will have a massive impact on the mental health
in this country.

Speaker 4 (01:05:32):
Wow, we have we do have one minute left? Oh
huh yeah, mental health okay, personally, Yeah, how did you
get past that hump that you faced during the pandemic.

Speaker 14 (01:05:45):
Well, I think a big part of it for me
was building a toolkit and understanding how to deal with
those challenges because these things tend to catch us unaware,
you know, anxiety, depression. You can't fully prepare for them,
but you can build a toolkit to know how to
address it when you feel that way. And there's a
number of things that I do, but motion exercise. I

(01:06:06):
got really into contrast therapy, cold plunging, saunas, and social
connection intentionally seeking out. It's hard to build friends, you know,
as you age, but getting yourself uncomfortable makes a big difference.

Speaker 2 (01:06:20):
Well, you've definitely made a big difference. You can tell
in what you're doing in the last year, and you
can tell how much you're enjoying it. So looking forward
to the next ten years, oh at least twenty years,
thirty years. Be welcome back soon.

Speaker 14 (01:06:34):
Thank you always welcome much of course.

Speaker 2 (01:06:36):
Nate check It's co founder and CEO of Rowan.

Speaker 1 (01:06:38):

Speaker 6 (01:06:52):
Well.

Speaker 2 (01:06:53):
As pandemic worries have faded, the travel business has definitely
come soaring back, with airline traffic more than doubling since
it's COVID a trough, and waiting times for deliveries of
new commercial airplanes mostly stretching through the end of this
decade because of robust demand. But there is one travel
segment that seems a little bit stuck in a holding pattern,
and that is corporate owned gents so road.

Speaker 4 (01:07:12):
Bloomberg's Thomas Black earlier this month, he reports on the
aviation space and noted that even though the number of
flights operated by the broader private aviation industry so that
includes charter, fractional, individually owned aircraft managed by third party
service companies, pretty much all the ways that you fly
around Carrol totally. Yeah, not. It's almost nineteen percent higher
than it was back in twenty nineteen, that was the

(01:07:33):
last full year pre pandemic year. Company's in house flight
departments are flying about the same as they did Carol
four years ago.

Speaker 2 (01:07:39):
It's interesting. That's according to data from wing exit's Hamburg
based provider of market data and analysis on the private
aviation industry. We've got a great voice on this back
with us is Janiniannarelli. She is founder and president of
the private aircraft broker par Avian, and she really sees
daily what is going on, minute by minute in the

(01:07:59):
private av world. She's here in our Bloomberg Interactive Brokers studio.
Welcome back. How are you delighted to be here. Thank
you for the invitation. It's great to have you here.
Tell me what you said though, when you walked into
the studio and you were listening to our segment on
the IPO market, which seems like it's having a tough
time getting going, and how that kind of related to

(01:08:20):
your industry.

Speaker 6 (01:08:21):
Yeah, just take your last guest story and slash ipo
and insert the word jet.

Speaker 2 (01:08:27):
What's going on?

Speaker 6 (01:08:29):
That's a good question. What we have observed throughout the
course of twenty twenty three The buyers are sitting on
their hands and they've created excuses, and I would say
the trade has as well for them quarter over quarter.
So here we are, we're at the end of the year.
This should be the busiest time of the year in
the aircraft trading marketplace, and it's relatively quiet.

Speaker 4 (01:08:50):
Wait, I thought that we saw huge, huge announcements from
companies like net Jets buying many many Cessna citations for
example earlier this year. That doesn't count in a.

Speaker 6 (01:09:04):
Way, no, because that's the fractional share and they need
to meet demand. Actually, fractional flying is up year over year.
I want to say the number is somewhere like seven
point nine percent, whereas private flying is down eight point
three percent year over year.

Speaker 4 (01:09:18):
These can how can those things both be true?

Speaker 2 (01:09:21):
And Thomas Black and his story said flights are fractional operators.
So we're talking about net Jets Flexjet. They've increased have
increased forty one percent from twenty nineteen levels.

Speaker 4 (01:09:30):
You're still flying private when you use one of those operators,
So make the distinction for our audience.

Speaker 6 (01:09:34):
So the private sector and the corporate sector is whole ownership.
These are individuals and corporations that go out and acquire
the asset and the management, the crewing.

Speaker 2 (01:09:44):
It's the company jet.

Speaker 6 (01:09:45):
It's the company jet. We're to fractionalize all the time.
You're buying a piece of an airplane and so you
have access to uplift pretty much on demand, but you
don't own the whole aircraft and you don't control the
operation of it.

Speaker 4 (01:10:01):
This is exactly what our own Thomas Black wrote about
earlier this month. And the question is that I that
I have for you, is is that era kind of
over when it comes to private ownership. We've seen pushback
from shareholders about flying private. So now about actually these
companies owning corporate jets because of the carbon footprint, So

(01:10:22):
companies are now not actually owning their jets outright and
instead using those fractional services which do offer the on
demand private flying, So the benefits of flying private without
actually owning that asset.

Speaker 6 (01:10:33):
So it's a conundrum. I don't think demand has diminished,
it's just action has diminished. We really don't see people
pushing away from private jets and looking for other means
of transportation. It still is the most efficient form of
moving goods and service goods and people around the country, around.

Speaker 2 (01:10:53):
The world, but they don't want to own it, not necessarily.

Speaker 6 (01:10:56):
So I mean I personally have not experienced people say
sell the jet because of all the issues that you
just cited. There are ways to reduce their carbon footprint.
You know, smart flying, direct flying in the United States
is going to lead the way. Operators within the United
States are going to lead the way to that goal
of twenty fifty.

Speaker 2 (01:11:17):
Which I mean you brokeer deals right, correct, So how
much is your deal flow down this year from I
don't know what's is it the peak post pandemic that
you measure against. I'd be curious about that, and also
where it was maybe twenty nineteen.

Speaker 6 (01:11:31):
So good questions. My business is off significantly, but I
attribute it to the aircraft that I'm actually offering. I mean,
the market's sort of.

Speaker 2 (01:11:40):
You don't like your inventory.

Speaker 6 (01:11:41):
I love my inventory, right, but it's not what people
will It's not in favor with the market today. The
most active segment of the business aircraft marketplace. I would
have to say, is the small jet that is the
aircraft that initially led the decline and then started the
rise back out of the global panel.

Speaker 4 (01:12:03):
What is this like a six person exactly?

Speaker 6 (01:12:07):
I put it more in a dollar perspective, but six
to eight passengers somewhere two to seven million dollars, and
the aircraft range is going to be anywhere from about
a thousand nautical miles to fifteen hundred.

Speaker 2 (01:12:19):
So what don't people want then?

Speaker 11 (01:12:21):
Is it?

Speaker 2 (01:12:21):
Now? Yeah? What is it that they don't want?

Speaker 6 (01:12:23):
It seems to be the category that I would call
the super mid size and the ultralong range aircraft.

Speaker 4 (01:12:29):
Why don't they want those?

Speaker 2 (01:12:30):
It's a good.

Speaker 6 (01:12:31):
Question, It's a really good question. So, first of all,
if we talk about the ultra long range that that's
the pinnacle of the marketplace, and the price point for
those airplanes is anywhere from fifty million on.

Speaker 4 (01:12:40):
This not be like a Golfstream G six fifty correct.

Speaker 6 (01:12:43):
Yes, Tim's a little bit into planes, ah, I can tell.
So that seems to have fallen out of favor. I mean,
there are there are buyers out there, and there are
plenty of inquiries. I mean, if I just look at
the number of inquiries I've received here to date on
every single aircraft I offer for sale. It's just my
mind that not one person has stepped up to make
an offer. Maybe more interesting is, let's say I get

(01:13:06):
two hundred inquiries over the course of three months on
an aircraft. My guess is ten percent are really going
to buy an aircraft, but less than ten percent of
that ten percent and actually done anything.

Speaker 4 (01:13:18):
Forgive me, but do interest rates matter? I mean when
we're talking at this type of money, they don't matter
for real estate, but they matter for at least that's
what real estate, high end real estate mean.

Speaker 2 (01:13:30):
Do they finance these deals?

Speaker 3 (01:13:31):
Like?

Speaker 2 (01:13:31):
Yeah, that's a good question.

Speaker 6 (01:13:33):
So another good question my personal history is that I
can count, maybe on two hands, how many people actually
needed financing throughout my entire Cash needed to.

Speaker 4 (01:13:44):
Me need versus using financing are two different things. There
are plenty of people who could pay, you know, outright
for a forty thousand or sixty thousand dollars vehicle, but
if they get zero percent financing, then they're going to
take the financing exactly that.

Speaker 6 (01:13:57):
Now, I have a number of prospective buyers that they
may pay cash outright and then refinance later. On most
of them do that with a financial institution that they
already have a business relationship with. The odd inquiry that
I may receive for aircraft financing, frankly, is a little
bit of a red flag for me, because they shouldn't
be asking me. They already should have had that in place.

Speaker 2 (01:14:18):
Right, it's right. They've got their bankers, They've got the
bank that they've been working with for years on everything.

Speaker 6 (01:14:23):
End qualified the case, come in everything.

Speaker 2 (01:14:27):
It's interesting. I'm thinking about our audience. So how do
you then use what you are seeing to maybe tell
you what's going on in the global economy. Is it
an indicator for you or is it just maybe your business,
Your industry is going through some changes.

Speaker 6 (01:14:43):
I would say flip that and say business jets are
the indicator, and they always have been. Now I think
we're writing new history, and have been since twenty nineteen,
because you could take the playbook and throw it out
the window. Looking back over twenty three, I was musing
over the fact that we're going to chalk this year

(01:15:03):
up to a year of rebalancing, and I'm wondering if
this was not the downturn that always follows a great
upswing and twenty four, because I'm going to use it
to project a little bit is going to be relatively quiet.
But the driver for that is mostly the presidential election
and the uncertainty that comes along with who will be

(01:15:24):
our new administration and what policies will go into effect.

Speaker 4 (01:15:27):
Well, President Trump was pretty friendly to private jets.

Speaker 2 (01:15:31):
To a certain degree.

Speaker 4 (01:15:32):
I mean some of those there were tax breaks that
were given to people who used private jets during the
coronavirus pandemic, for example.

Speaker 2 (01:15:41):
Well, that's true.

Speaker 6 (01:15:41):
The bonus appreciation was a huge driver to motivate people
to buy aircraft.

Speaker 2 (01:15:47):
Twenty seconds. What are you worried about in terms of
the presidential outcome and in terms of regulatory or overset?
And I've got to ask you to be very quickly.

Speaker 6 (01:15:55):
I'm mostly concerned about tax implications. There's a lot of
those expiring in twenty five. That's really the bigger concern.

Speaker 2 (01:16:03):
Really fascinating, right.

Speaker 4 (01:16:05):
I can talk about this all I know.

Speaker 2 (01:16:06):
I know it's a world we love talking about. We
didn't even get into evitall's, which I know is a
big thing. Time next time, come back soon, love to
continue the conversation. Janine Jannarelli, Founder president of par Avion,
a private aircraft broker. You can check out some of
the stuff that she is involved in on her website.
Here in studio, have a good holiday.

Speaker 1 (01:16:31):
live weekday afternoons from three to six Easter on Bloomberg Radio,
the Bloomberg Business App and YouTube. You can also listen
live on Amazon Alexa from our flagship New York station,
Just Say Alexa Play Bloomberg eleven thirty.

Speaker 2 (01:16:50):
We turned out to our friends with Bloomberg Pursuits for
their annual guide to holiday entertaining, and we have the
recipe for sweet success no matter what kind of hosting
duties you are facing this holiday season. Here with a breakdown,
our Bloomberg Pursuits Deputy editor Jim Gaddie and a renowned
food editor Kate Crater, who's joining us from London. And guys,
let's cut to the chase. It's all about cheese, Jim.

(01:17:11):
Apparently who knew.

Speaker 16 (01:17:12):
You know, when Kate came to us with this idea
we have a holiday entertaining special every year. She said, guys,
I just want to do something easy this year, And
who knew? It was all about cheese Kate.

Speaker 2 (01:17:23):
It does feel like I feel like, even just going
into Thanksgiving, just the holidays in general, everybody just wanted
to like relax, go into comfort food, and I feel
like cheese is like the perfect thing. Give me cheese, wine, crackers,
And I really am such a happy little soul.

Speaker 17 (01:17:37):
Same Carol, we are exactly the same. And I know
I'll see what the cheese board do very very soon. No,
I think I think everybody has negative time around the holidays,
and this year it seems more so than ever. And
She's really is an instant party. I mean, it doesn't
ask for much besides that you and wrap it and
serve it at room temperature. And sometimes we actually found

(01:17:58):
this one cheese that's it. That's upland rust Creek reserves.
The makers recommend that you warm it a little bit
so it becomes like this crazy, rich, savory custard. When
you see a picture of it, you won't believe it.
It looks. I mean, it really is like the most
beautiful thing you've ever seen.

Speaker 2 (01:18:15):
Okay, so it's pretty. Does it taste good?

Speaker 6 (01:18:17):
Cake?

Speaker 17 (01:18:17):
It's so good. It's so good. It's like this thick, creamy,
a little bit grassy, it's made from cow's milk and
the cows have been munching on dry fall grass, so
I think that gives it a bit of a toasty flavor.
But it's also it's you know, have the best cheese
when it's super creamy eazy, is a little bit sweet
and salty, and that's exactly what this is.

Speaker 2 (01:18:40):
So what do you do? So Jim, like, come on?
And I'm also from a family that even like the
younger generations are really into charcuterie boards. I think that's
what they all want as gifts, they and that's what
they do. But it's really Jim and an easy way
to entertain.

Speaker 16 (01:18:52):
Absolutely. You know, it's crazy how it's so simple. You
don't really have to do that much. You know, you
can you a charcotterie board, put four or five cheeses
on it, pair it with some wine. Kate, I mean,
how many times have you done this in your life?

Speaker 8 (01:19:07):
And how many times.

Speaker 1 (01:19:08):
Has it gone wrong?

Speaker 5 (01:19:10):
Yeah?

Speaker 17 (01:19:11):
Exactly. There's a very good like success ratio when you
have a cheese board, as you know, and Carol you'll
know from your daughter. So it's just like it makes
like it's so easy and it's just so great to
think because parties are stressful, they really are. And so
if you can come up with some instantaneous ways to
make people happy and guess happy that are no that

(01:19:33):
are no stress and the thing is really worked for
everyone because you can seguay into a sarcuitary board alongside.
But there's also fantastic vegan cheeses now, so you can
buy some of those to serve.

Speaker 2 (01:19:45):
Well, is there there's a reason, right?

Speaker 9 (01:19:47):
Is it?

Speaker 2 (01:19:47):
Because right? I love this part It's produced from cows
that have been snacking on a dry fall hay. Right,
So this is the reason why there's a sneaker drop, right,
not a spring hay.

Speaker 12 (01:19:57):
Yeah.

Speaker 17 (01:19:57):
Yeah, don't try and give them spring hay. It's fall hey,
which I guess if you think about it, what little
I know about farming means that it's you know, sat
there and like soaked up the sunshine all summer long
and now and then it's like super concentrated, delicious hay
and that you get in autumn.

Speaker 2 (01:20:13):
The caws were also smiling and they did this. God,
I'm sorry to go ahead.

Speaker 16 (01:20:17):
The other thing that I found interesting about this particular
cheese that our wine critic Ala McCoy found out is
that you compare it with a red like a deep
red wine, which was kind of surprising to me. And
you don't have to serve it at the beginning of
the meal. You can serve it French style at the
end of the meal. So it's really kind of like

(01:20:37):
whatever time you want to serve it. You can serve
it with a white wine. You can obviously champagne. We
have a Champagne this Bowlingair Special Cube which goes with
kind of innie cheese that's kind of like the classic.
But I was really intrigued by the idea that you
could get this age kind of earthy red wine to
serve with the cheese homage.

Speaker 2 (01:20:54):
Yes please, yes please. And you also, though, do list
some other cheese. I mean, the girl it cheese, is
it right? But you do, as you said, vegan cheese,
because we have a lot of vegans in my family too,
and we really have to think about that when we're entertaining.
So there's there's a bunch of other ones. And I
do like the wine, uh, the one one that goes
with pretty much any cheese.

Speaker 17 (01:21:12):
I know, I wanted to quizz you on that, Carol,
but but Jim sort of Jim killed it and be like, okay, quick, Carol,
what's the one line to serve with any keys?

Speaker 8 (01:21:21):
Well?

Speaker 2 (01:21:21):
Yeah, sorry, Jim, Thanks very much. All right, So let's
get into some of the other parts of the section.
I love. I have to say over the summer, Kate,
I imbibed in some of these pre mixed cocktails and
I really had fun with them.

Speaker 17 (01:21:35):
There are some experts that are that are doing these
canned cocktails. Now. One of them who you might not
have picked on your Bengo card is Jennifer Lopez, who
you might know might know her music in her some
of her movies, but she's teamed up with a superstar
called Lynette Morrero, who is a star bartender in New York,

(01:21:57):
and they are making a sprits that sort of like
a paloma, so it's got that tang, but then it's
got like the fun and effervescence of the sprits. It's
called the Do Lola Paloma Rosa Sprits, so it sort
of rolls off your tongue and it's it's great. You know,
it's like tequila plus bubbles. So he's not going to
love that.

Speaker 2 (01:22:17):
Sign me up. I don't get it. She's got ben Affleck.
She's beautiful, she's sings, she doesn't now she gets you
like her own little call. Come on Jaylo's share a
little bit. Also talk to us about this, you guys.
Jim come on in on the open a box and
pressed out like these ideas of kind of these kits
that you can I think it's kind of a great
hostess GIF.

Speaker 16 (01:22:35):
Yeah, you know, I love this idea. And again it's
going back to like just make your life a little
bit easier. You don't have to make your own.

Speaker 17 (01:22:44):
Here can we say, a Lottie, what did you say?

Speaker 2 (01:22:47):
You want it easy and simple?

Speaker 16 (01:22:49):
And you know, one of the one that kind of
jumped out to me was the soup dumpling set. I
had a brother in law and my sister who came
to visit earlier this year, and they were like, you
know what, I want the New York experience. I want
to know where to get a bagel, I want to
get some pizza, and I want to get the Chinatown
soup dumpling. And so I sent them to the place
where naan while where you get soup dumplings. I went

(01:23:10):
down a visit last week. He was like, if you
can bring some of those soup dumplings with me, and
I'm like, you know what, I'm just going to send
them to you.

Speaker 2 (01:23:15):
It's a great right, It's a really sweet gift, Kait, No.

Speaker 17 (01:23:19):
It really is. And they're pro they really are. Like
those soup dumplings are the star of the dim sum
table and they've really become synonymous with being kind of
an expert. They're sort of tricky to eat, you know,
because they're like so juicy, they're filled with froth, so
you use a spoon but chop six. So this is
actually a good way to practice to get really good
at your dumpling soup dumpling eating game. But there's also
the woman who did this, Caddo Deell got all these together.

(01:23:43):
And there's also a really terrific biscuit company that comes
out of Nashville. Their bisit is called Biscuit Levers Brecky Biscuits.
I keep picking the names in they're hard to say. There.
I've heard about these biscuits actually from people who have
been to Nashville, and there's good and they actually you
know him.

Speaker 2 (01:24:01):
Jim Yeah, oh my god.

Speaker 17 (01:24:03):
And they come with seasonal butter. So now I think
in the fall they had maple butter and now they've
just switched to brown sugar cinnamon, which sounds like a
good dream, Like it sounds it's cold here in London
today and I feel like that's what I want right now.

Speaker 2 (01:24:16):
All right, it's a red wine geez crackers for the crackers.
Let's just get the business, all right. I want to
get because they're running out of time. But the southern comfort.
I love this story about what's happening at the airport
in Atlanta, Like who knew?

Speaker 17 (01:24:29):
Have you ever? Oh my god, Carol. Literally there are
people who book who book through Atlanta now, and that
is no small airport. In fact, it's the busiest airport
in the world, the Hartfield Jackson Atlanta Airport, and people
book to go to one flu South, which has been
around for a little bit. It started off it had

(01:24:50):
like a really good reputation for cocktails. But in the
last little bit the food. They have this really great chef,
Todd Richards, and he creates a he just knows everything
about stressed out travelers and stressed out people walking through
the door, and he knows how to instantly make them
feel comfortable. So and like part of it, I thought

(01:25:11):
it was kind of great to talk to him because
he says, do a buffet because it makes your life
easier because you don't have to worry about doing plating,
you know, for people. And you also don't have to
worry about later early arrivals as long as you have
things that can sit there and be reheated or just
are don't have to be at a certain temperature. But
he also encourages you to do a food, sort of

(01:25:33):
food like chili that people will have their own stories about,
and then that's like a conversation starter right there.

Speaker 8 (01:25:39):
I love it.

Speaker 2 (01:25:40):
I love it. Next trip, I'm gonna be like, I'm
sorry I have to go through Atlanta because I've never
done it.

Speaker 17 (01:25:44):
You really do.

Speaker 2 (01:25:45):
There's so much more to the in the section Panama City.
I recently went to Panama. It's like interesting stuff going there.
We're running out of time, but I have to. And
James Tarmi on the new movie on Leonard Bernstein. So
it's really really great read for the holiday and some
great tips.

Speaker 8 (01:26:00):
Guys.

Speaker 2 (01:26:00):
I love, love, love you. Thank you so much.

Speaker 17 (01:26:03):
Have I got Carol? Yeah, you made my holiday.

Speaker 2 (01:26:05):
Likewise, likewise, Jim, thank you so much. Always a treat.
Thanks to Bloomberg Pursuits Deputy editor Jim Gaddy and Bloomberg
News Food editor Kake Creator. We love we do love
you guys, and happy holidays. You're listening to Bloomberg Business Week.
Coming up, we stick with the holiday entertaining theme and
check on the soaring demand for people with white beards
and red suits. We'll catch up with the founder of
Hire Santa. He's actually also ahead, elf. This is Bloomberg.

Speaker 1 (01:26:28):

Speaker 2 (01:26:43):
Tell you one s that's right. Everybody set a class
is come to town at the most wonderful time of
the year. The eras Chris Bloomingdales has its holiday window
display up. People are decorating their Christmas trees and decking
the halls, and a large team of Santa's are coming

(01:27:05):
to town, appearing at malls and retail outlets around the country.
He's everywhere and sometimes she's everywhere. Explain that in a moment.

Speaker 4 (01:27:13):
That's true. Hey, this year, things are a little bit
different than years past, though. Demand for Santa's is actually
far exceeding supply, at least according to our next guest,
who knows quite a bit about goings on at the
Old North Pole. Mitch Allen is the founder and head
elf of Hire Santa. It's a Santa Claus talent and
staffing agency and what it does is it places Santa's

(01:27:34):
at events, parties, malls and more all over the US.
Mitch joins us on a zoom from South Lake, Texas. Mitch,
good to have you with us this afternoon. So the
Santa biz you went pretty well in twenty twenty three, No,
it sure is.

Speaker 15 (01:27:47):
We've had more demand for Santa Claus entertainers than we've
ever had before, and all types of it, whether it
be a home office, retail establishment, malls. Everyone wants to
associate themselves with Christmas, the use of Santa.

Speaker 2 (01:28:01):
Totally get it. I'm also a fan of Velfa on
the Shelf. Just going to put it out there, hey, Mitch,
I mean, so our numbers up, demand is up from
what pre pandemic levels, like, What's what is? I don't know,
is it just been you've been seeing organic growth? Has
there been a recent peak, give us an idea, give
us some perspective.

Speaker 8 (01:28:17):
Sure.

Speaker 15 (01:28:18):
So here at Hiresanta dot com, we've seen the demand
for Santa's people reaching out to us is up over
thirty six percent over last year, and last year was
record demand, even higher than pre pandemic. And that's turned
into more events. Our actual events that we've booked is
up over one hundred and fifty two percent over last
year and many times that over pre pandemic levels. So

(01:28:40):
people are using it. And what's interesting is we don't
necessarily have a Santa index, but that's what I'm calling it,
that small and medium sized businesses are really using Santa
this year. I think that's going to be a blockbuster
year for small and medium sized businesses. If the demand
for Santa claus at these established is any indication.

Speaker 4 (01:29:01):
How much does it cost to rent a Santa?

Speaker 15 (01:29:04):
Yeah, so it really depends date, time, location, and how
long you need Santa.

Speaker 4 (01:29:08):
Okay, during the Christmas season, I'm not talking about it.
I'm not talking about it. Your life Santa.

Speaker 2 (01:29:13):
Here, everybody's invited. We're talking about four hours I need Santa.

Speaker 15 (01:29:18):
So if you need sand to come your home or
office for just a couple of hours. You're talking about
two to four hundred dollars per hour for a Santa
Claus entertainer. Now if you do for a mall, the
hourly rate is obviously much less.

Speaker 2 (01:29:30):
All right, Mitch, is there a Santa School?

Speaker 15 (01:29:33):
You know, this is one of the surprising things that
people don't realize. There is a vibrant Santa Claus community
out there, whether it be online or in person. Lots
of organizations. There's Santa schools and conventions around the country,
and that's where we go and recruit our Santa Claus
is for higher Santa dot com.

Speaker 4 (01:29:51):
Hey, how seasonal is your business?

Speaker 15 (01:29:54):
Well, the actual delivery of our service is extremely seasonal,
about six seven weeks, but it's a full year business
at Hire Santa. The first half of the year is
really about seals. It's getting those large contracts, those malls,
those retail establishments we're working and then we're trying to
get those contracts as well as we're trying to get

(01:30:16):
more Santas. This last year we added over eleven hundred
Santa Claus entertainers to our database alone, and so it
is full season, but really it's go time. It's fourth
quarter during the last part of November and of course
all of December.

Speaker 2 (01:30:29):
All right, so what's interesting is you shared with us
some research that you guys have done in some of
the Santa's talk about their best experiences of twenty twenty two,
which are incredibly heartwarming. But I want to go to
the worst experiences of twenty twenty two. What are some
of the rough experiences? We have about forty five to
fifty seconds left, just give us a couple.

Speaker 15 (01:30:47):
Well, you know, the rough experiences are really when Santa
gets sick or injured. You know, every single year for
us we lose Santa Claus entertainers. You can imagine, they're
older gentlemen, they're susceptible to COVID and negative outcomes with that.
Or we've had this year alone, we had Santa's already
in a car accident, a wife got sick. So those

(01:31:08):
are really heart breaking themselves, as well as you really
get the touching things whenever a child is wanting something,
they're sick, or their parents are sick and they're wishing
something for them. But it's a wonderful time, and Santa's
really enjoys spreading that love and joy of Christmas.

Speaker 2 (01:31:24):
I thought you were going to tell me about the
Santa that flobed the lyrics to Frosty the Snowman at
a daycare. That's what I was opening for a little levity,
A little levity.

Speaker 15 (01:31:33):
Yeah, yeah, we get that a lot too. And you know,
we've actually been on air and asked somebody Santa's to,
you know, name the reindeer. Uh, and they just froze
and so.

Speaker 4 (01:31:47):
Did a lot of them.

Speaker 2 (01:31:48):
Mitch Allan, Merry Christmas, Happy Holidays, Founder and head elf
of hires Santa, joining us from Texas where they're Santas.

Speaker 1 (01:31:55):
This is the Bloomberg Business Week podcast, Apple and anywhere
else you can get your podcasts. Listen live weekday afternoons
from three to six Eastern on Bloomberg dot com, the
iHeartRadio app, tune In, and the Bloomberg Business app. You
can also watch us live every weekday on YouTube and
always on the Bloomberg terminal

All Episodes

Bloomberg Businessweek Weekend - December 1st, 2023

Episode Transcript

Hosts And Creators

Tim Stenovec

Carol Massar

Popular Podcasts

Stuff You Should Know

Dateline NBC

On Purpose with Jay Shetty

.css-15opob5{left:0;position:absolute;top:0.8rem;} All Episodes

.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Bloomberg Businessweek Weekend - December 1st, 2023