February 6, 2025 • 33 mins
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
Rebecca Lindland, Managing Director at Allison Worldwide, shares her thoughts on Ford and electric vehicles. Paula Davis, Founder and CEO of the Stress & Resilience Institute, discusses her book Lead Well: 5 Mindsets to Engage, Retain, and Inspire Your Team. Christina Stembel, Founder of Farmgirl Flowers, talks about her bootstrapped floral business ahead of Valentine's Day.
Hosts: Carol Massar and Tim Stenovec. Producer: Paul Brennan.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business Week,
insight from the reporters and editors that bring you America's
most trusted business magazine, plus global business, finance and tech
news as it happens. Bloomberg Business Week with Carol Masser
(00:23):
and Tim Steneveek on Bloomberg Radio.
Speaker 2 (00:26):
It is Bloomberg Business Week. I'm taking a look at
shares of Ford down six percent as we speak. The
company reported fourth quarter adjusted earnings per share at thirty
nine cents. The estimate was for thirty two cents. The
company though seeing twenty twenty five adjusted ebit seven billion
to eight point five billion. The estimate Carrol was for
eight point five to seven billion dollars.
Speaker 3 (00:46):
I just want to point out our Keith Notton out
with the story on the Bloomberg saying Ford warning that
profit may fall by two billion or more this year
due to an expected drop in vehicle prices and costly
new model launches.
Speaker 4 (00:56):
Companies earnings before.
Speaker 3 (00:57):
Interest in taxes will fall to a range of seven
billion to eight and a half billion, down from that
ten point two billion profit it generated back in twenty
twenty four, just last year.
Speaker 4 (01:06):
Keep in mind.
Speaker 3 (01:06):
Ford lost a record five point one billion dollars on
evs last year and predicts the deficit could wind to
widen to as much as five and a half billion
this year. So that's a bit of your backdrop and
explains while we are seeing Ford shares dip in a
big way here in the aftermarket. Tim the stock right now,
it is down about five percent.
Speaker 2 (01:25):
There's also those concerns about tariffs and the question about
what the tariffs will do for companies including the big
three Ford, Stlantis and GM, GM at least, by one measure,
the most exposed to tariffs on Canada and Mexico. We
know though that those tariffs have been put off for
at least till the end of this month.
Speaker 3 (01:42):
All right, so let's see get a little bit more
on Ford in particular with us right now is Rebecca Linlan.
She's managing director or Automotive at the consultancy Allison Worldwide. Rebecca,
you have been following the auto industry for a long
long time, and I know maybe you're not going to
rip apart the balance sheet here, but let's talk. We're
Ford is and based on what you just heard about
(02:03):
their latest financial update.
Speaker 5 (02:06):
Yes, Carol, thank you so much for having me on.
As you know, I'm not a stock analyst, So what
I really look at and focus in on is consumer
behavior and consumer acceptance when it comes to electric vehicles
in particular.
Speaker 6 (02:24):
And one of my sister.
Speaker 5 (02:25):
Agencies here at both Alison Worldwide and stag Well Overall
is Harris Polls. So I pulled in some information and
what was really interesting to me is that only twenty
six percent of people that we pulled actually said that
the federal tax credit would be a top five.
Speaker 6 (02:41):
Reason for why they would consider an EV.
Speaker 5 (02:44):
So we're finding that what consumers really gravitate towards is
the fact that we still need charging infrastructure in order
to make them feel more comfortable buying an EV. And
this really impacts all of all of those plans that
you both were just discussing.
Speaker 6 (03:04):
A really big challenge.
Speaker 2 (03:05):
What does that infrastructure look like like? What what you know?
It doesn't look like gas stations because we know that
because a lot of the charging can occur at home.
We know that, so it's not like, you know, a
gas station or an EV charger on every corner like
there is with gas stations. What does the infrastructure look
like to make people comfortable.
Speaker 6 (03:25):
Yes, it's a great question, Tim.
Speaker 5 (03:27):
So what's interesting when you think about it, Actually, if
you look at level three chargers, which are the most expensive,
that's what makes up the Tesla supercharger network and such.
Those actually most modern vehicles, most new evs coming out today,
they can charge in about twenty to twenty five minutes if.
Speaker 6 (03:47):
You have a level three charger.
Speaker 5 (03:49):
So I actually did a little experiment when I drove
from Los Angeles to Las Vegas for CEES. I thought,
let me try and see how long would I be
inside to use the restroom, get a cup of coffee,
and get back to my car.
Speaker 6 (04:04):
And it actually took me about fifteen to eighteen minutes
to do all those things.
Speaker 5 (04:09):
And so when you're charging, when you're at a rest stop,
if we have the proper infrastructure, we could actually put
chargers in some of those gas stations and some of
those locations.
Speaker 6 (04:21):
The ideal really is that you're charging at home at
least for right now.
Speaker 4 (04:27):
What is you know what I want to just go
back to.
Speaker 3 (04:29):
You know, here we are watching Ford sell off big
time in the aftermarket, and I don't think we were
surprised necessarily completely, but I do wonder, you know, what's
the way forward.
Speaker 4 (04:40):
China is moving way ahead on evs.
Speaker 3 (04:43):
And you know, I do wonder if the American companies
Rebecca take a back seat because the American market and
American demand isn't there, because maybe the infrastructure isn't there,
and there are still some concerns. The costs of evs
have been so expensive in the United States, I mean
c government policies and subsidies have helped that out. But
(05:04):
you know, what does it mean for Ford and GM
and Stilantis in terms of their role in the global
auto market if they are pulling back on EV's because
they kind of have to.
Speaker 6 (05:16):
Well, the keep in mind that all the technology is there.
Speaker 5 (05:20):
They're Carol, so they have developed these vehicles that they
could sell in other parts of the world, so they
could continue to make internal combustion engines and hybrids.
Speaker 6 (05:33):
Let's not forget hybrids.
Speaker 5 (05:35):
Hybrids have been around for as long as I have
and longer, and yet consumers are just now seeing them
and saying, you know.
Speaker 6 (05:43):
What, that's actually a really good solution.
Speaker 5 (05:46):
And by some reports we've actually seen hybrid sales are
a bit of a rejection of going full EV right
because you can charge at home, and you can charge.
But at the end of the day, really this is
about can unions consumers will adopt technology that is more
convenient and right now, without supporting infrastructure, an electric vehicle
(06:09):
simply is not as convenient as an internal combustion engine.
Speaker 3 (06:12):
I mean, if you were sitting down with the Ford CEO,
and actually we're going to hear from the Ford Ceoster
Farley in just a moment across our Bloomberg platforms, Jim
Farley's going to join us. I mean, what would be
the number one question that you would want to talk
to him? Or number one or number two in terms
of his business and Ford's role in the global auto market.
Speaker 5 (06:34):
I would advise both Jim and Mary Bara and anyone.
Speaker 6 (06:37):
Else who would be willing to listen, that this is
about consumer choice.
Speaker 5 (06:41):
That we as a nation in the US right now
we really don't have the infrastructure to support a full
migration to electric vehicles. It is about providing consumers with
a choice with the most fuel efficient version of what
they want to buy, and that's one of the things
that we need to focus on.
Speaker 6 (07:02):
We are really not in a position to have.
Speaker 5 (07:06):
A full on, full ev or and we don't need
to have full gas anymore because we do have fantastic
electric vehicles that are out there with the type of
range three to four hundred miles just like your internal
combustion engine. But it really gets back to charging. That's
the number one challenge that we have.
Speaker 2 (07:25):
So what about e revs. We've been talking about these
with Keith nat and these are sort of plug in
hybrid electric but with super long range I mean we're
talking hundreds of miles here. What's the future of those?
Speaker 4 (07:38):
Yeah, the extended range right electric vehicles?
Speaker 6 (07:41):
Sure? I mean so obviously it gets again, it gets
back to charging. So it doesn't really matter.
Speaker 5 (07:46):
Like even if you have a hybrid that is both
battery and electric, you still have to in order to
maximize the ownership benefits, you still need to charge it.
Speaker 6 (07:56):
So it's really it's a simple.
Speaker 5 (07:59):
But incredible complicated answer. So it is about making an
electric vehicle, whether it's extended range, whether it's short range,
it is about making them more convenient and providing an
opportunity to charge.
Speaker 6 (08:15):
I have I call it.
Speaker 5 (08:17):
A lot of consumers are looking at this as the
perception of the exception. When people consider an EV, they
say yes, but once a year I drive to grandma's
house and I don't know where I would charge on
the way, right.
Speaker 6 (08:28):
And so instead of sitting there and thinking, you know, every.
Speaker 5 (08:31):
Day or maybe two days a week or three days
a week, I go into the office, I drive thirty
five miles a day.
Speaker 6 (08:38):
I can actually charge almost once a week.
Speaker 5 (08:41):
That's the type of conversations that we need to have
instead of looking and saying, yes, but you know, I
go to grandma's house once a year for Thanksgiving or something.
Speaker 3 (08:51):
All Right, we got it roun Hey, Rebecca, thanks so much.
Rebecca Liland, Managing director Automotive at Allison Worldwide talking with
us about the auto sector. And we do so because
we are watching shares of Forward here in the aftermarket, folks.
They are down just shy a five percent here, and
this as the company sees a sharp profit drop, and
they're talking to and addressing the possibility of tariffs and
(09:14):
the impact not the possibibility, but the reality perhaps and
the impact it could have on their business, certainly on
the cost side of things.
Speaker 2 (09:22):
Yeah, that's right. Forward warning that profit may fall by
two billion dollars or more this year on an expected
drop in vehicle prices and costly new model launches, adding
to risks posed by potential steep new tariffs under President
Donald Trump, and dimming electric vehicle prospects.
Speaker 3 (09:37):
Yeah, the second largest US automaker are just saying that
earnings before interest in taxes will fall to a range
of seven billion and eight and a half billion. That's
down from the ten point two billion dollar profit that
it generated last year. So once again you've got the
CFO telling reporters that earnings will drop this year due
to industry wide prices falling by back two percent and
(09:58):
that cost of launching the new Lincoln Navigator and Ford
Expedition suv which will result in any break even first quarter.
Speaker 4 (10:05):
So four chairs are down.
Speaker 2 (10:06):
They're also just about two and a half weeks into
a leadership transition in Washington, we see some shake up
in C suites. Match Group named Zillo co founder Spencer
Raskoff as its new CEO, replacing Bernard Kim. But as
we all know, not all leaders or CEOs are presidents, Carol,
and that's where Paula Davis comes in. She's founder and
CEO of the Stress and Resilience Institute. She's got a
(10:26):
new book out it's called lead Well. Five mindsets to engage,
retain and inspire your team. She joins us this afternoon, Paula,
good to have you with us. You wrote a book
a few years ago about stress and burnout, and we
spoke to you back then. What is the relationship between stress,
burnout and leadership?
Speaker 7 (10:45):
Thank you both so much. It's I'm so glad to
be back on. Yeah.
Speaker 8 (10:49):
So a lot of what came, a lot of the
material for this new book really came from my work
in the last probably four to five years or so
since my first book has come out, really looking at
burnout in a different way, so taking a look at
the systemic or root causes of it. And when I
started to dig into that with leaders and teams, I
realized that a lot of the results was stuff that
(11:12):
needed to be focused on or was really under more
of the purview of leaders And so I realized what
those themes were and just kind of turned them into
the mindsets for the book.
Speaker 3 (11:22):
You know, I do wonder with you know, what has
been coming out of the government in terms of diversity,
equity and inclusion efforts, you know, a roll back there,
and we increasingly see companies saying that they're ending their
efforts or you know, not going to be maybe as
visible when it comes to them, you know, in general
in terms of like inspiring your team and thinking about
your team. Is there a whole rollback that's going on
(11:44):
in corporate America or.
Speaker 4 (11:45):
Do you see differently?
Speaker 8 (11:48):
So I think that certainly DEI is going through, if
not a certainly a rebrand, I would say, at the
very least. And I think that, you know, one of
the ways one of the easiest ways for leaders to
I think, help with how do I deal with the
fallout from that with just in terms of how my
folks are feeling, is with one of the mindsets that
(12:11):
I talk about, which is kind of upping your game
and the sticky recognition and mattering component. And so that's
a mindset that I oftentimes will encourage leaders to start with,
which really just entails really making sure you're being very clear,
letting people know the evidence of their impact and the
impact that they're making and the impact that their work
is having on your clients or your business units or whatever.
(12:34):
You know, the outcome is because it activates something really
powerful called mattering. So really that combination of knowing we're
achieving something, but also that we're feeling recognized for that.
Speaker 7 (12:46):
That's a big deal.
Speaker 6 (12:47):
You know.
Speaker 2 (12:47):
I open this by talking about leadership, and you know,
I think when people think of leadership, they always think
of managers or people in positions of power. But this
book also covers like ways you can yourself even if
you're not a manager, Ways you can apply yourself, ways
you can take a self assessment to sort of understand
where you're going.
Speaker 7 (13:08):
Talk a little bit about who this is for, yes,
So I mean really, I mean the core audience really
is for leaders or managers at any level.
Speaker 8 (13:16):
And I don't think you have to be in the
c suite. I know, you don't have to be in
the c suite to take advantage of.
Speaker 7 (13:20):
What this is about.
Speaker 8 (13:21):
So if you are new to your role, if you
are new to a leadership position, if you haven't been
leading all that long, I mean really, at the end
of the day, leadership is just a set of behaviors
that you use to get your team and other people
in your purview where you want to go all together.
And so so there's definitely that focus. But yeah, I
mean I did definitely want to sprinkle in, you know,
some bits and pieces for people as well, who you know,
(13:45):
just kind of want to flex their muscles in a
way that's going to help them feel a little bit
more inspired and engaged.
Speaker 3 (13:50):
Does AI make this all harder, Paula, Especially when I
think workers are saying, well, wait a minute. You know,
I'm kind of concerned that artificial intelligence, advanced artificial intelligen
going to take my job or take parts of my job.
Speaker 7 (14:03):
I think it makes it more stressful.
Speaker 8 (14:04):
But I also think that this this notion, you know,
part of the message that I want to get across
in the book is that now is the time for
kind of these concepts of human sustainability and human centered
practices in human centered leadership. So the more tech focused
and tech y we're going to get and continue to
get into the future, the more it's going to really
demand or mandate that we also really up our game
(14:26):
on some of these human practices as well, because they're
going to have to coexist. I mean, AI is certainly
going to, you know, continue to influence the landscape of
our work, but humans are always going to, I hope,
be part of the work equation. And so, you know,
clients and people still want to deal with other people
and so we got to figure out how to make
that happen.
Speaker 2 (14:47):
How does how does that work?
Speaker 6 (14:48):
Though?
Speaker 2 (14:48):
In an AI world? I mean, do we have AI?
It is ever replacing managers? In your view?
Speaker 7 (14:55):
That's really interesting. So I think there will.
Speaker 8 (14:57):
Be things that AI is going to be always is
really tough to replicate. Like I think it's going to
be hard for AI to replicate curiosity, good communication skills,
good team work.
Speaker 7 (15:08):
It can enhance maybe.
Speaker 8 (15:09):
Perhaps some of those efforts, you know, and when you
think about some of the psychology too, when we talk
about resilience and when we talk about values and meaning,
those are going to be things and certainly already I
mean you look at gen Z and some younger millennials
and millennials and really honestly all of us really want
that sense of values, alignment and meaning in our work.
And I think that AI and technology is going to
(15:31):
have a hard time replicating some of those human attributes.
Speaker 3 (15:35):
Yeah, it's kind of interesting, right, and how this dynamic
you know, plays into it? Just got about thirty seconds here.
Do you feel like most leaders get it right or
there's a lot to be learned?
Speaker 8 (15:46):
I think most leaders are trying. I think they're trying
really hard. I think they don't have a language. I
think they don't know where to start. And this is
such a complex and challenging time to lead that they
really need concrete skills in a roadmap.
Speaker 7 (15:59):
And that's really the that I'm seeking to fill.
Speaker 3 (16:01):
If leaders could change one thing and just that would
kind of listen to you, you know what thing could
they change that would make them maybe better leaderships along
the lines of what you've been talking about.
Speaker 8 (16:13):
Yeah, I think that going back to the notion of
you know, making sure that people see very clearly that
they're making an impact and how they're making an impact.
Simply just noticing other people, telling people how you lie
on them and kind of focusing on those basic first
step human skills is critical.
Speaker 3 (16:30):
Paula Davis, the book is Lead Well, Thank you so much.
Speaker 6 (16:33):
Well.
Speaker 2 (16:33):
Christina Stembel often joins us during big months for the
flower industry. Think Mother's Day in yes, Valentine's Day, which
is coming in just over a week. Carol Masser warning
everybody we don't need the excuse of a holiday though
to talk to her, because we love it when she
joins us, especially when she's here in New York from
the West West Coast. Christina is founder and CEO of
farm Girl Flowers. It's a company that she bootstrapped into
(16:56):
a thirty five million dollar business. She joins us here
in the Bloomberg Interactive Broker's studio.
Speaker 4 (17:00):
How are you.
Speaker 7 (17:01):
I'm good. Thank you for having me back. I love
being here.
Speaker 4 (17:03):
It's good to have you. How's business?
Speaker 7 (17:05):
Business is good? I mean we're in our second busiest
time of year. Thank you for the reminder. We're about
a little over a week out, so please everyone get
your orders in. But it's we're holding study with exactly
where we thought we'd be.
Speaker 4 (17:16):
How much comes in last minute? I am such a
last minute girl, So tell.
Speaker 3 (17:19):
Me how much comes in last and how do you
like manage a business for that?
Speaker 7 (17:23):
Yeah, it's hard. I mean we put orders in months
and sometimes up to a year in advance for some products,
some of our materials, so we just you know, it's
it's a wing in a prayer a little bit. It's
a good productions too, so you know, it's hard. But
within the week before probably about seventy percent of the
orders will come in.
Speaker 4 (17:38):
Wow, so a lot are coming in right now.
Speaker 2 (17:40):
Yes, we got to go to tariffs and talk a
little bit about where the flowers come from and how
you're looking at the environment given what we heard from
the President a little earlier this week. Yes, Mexico and Canada,
those are on pause right now. Where did the flowers
come from? And how do you think about tariffs?
Speaker 7 (17:58):
Yeah, so motion of the flowers that everyone purchases in
the United States come from South America. So Colombia was
the first one that put us everybody on edge in
the floral industry. It would be too late to really
impact Valentine's Day numbers, but by Mother's Day our prices
would increase dramatically with Columbia. So that's on pause right
now as well, which is really wonderful. Canada in Mexico differently,
(18:20):
so Mexico is going to impact us all as well.
About eighty percent of all the flowers that are sold
in the United States come from other countries. Ours is less.
We're about fifty five to sixty percent domestic right now,
but that's going to increase. That's our domestic production is
going to be increased because everyone's going to be fighting
for it because they're not going to be able to
get the same prices elsewhere.
Speaker 3 (18:40):
You think you know how much you know, in anticipation
of this impacting how much does it, like, when do
people start to change in terms of growing more here
in the United States? How much more can you grow
in the United States because you're competing for land against
everything else. So I'm just curious how quickly can the
model change from importing.
Speaker 4 (18:59):
To having it grown domestically.
Speaker 7 (19:00):
I don't even know if it's possible to change it.
I mean, following you know, the CEO for it, I
feel very similarly to him. We don't have the infrastructure here.
You know, there's not a lot of succession planning in
farming in general. You know, in agriculture of any kind.
Flowers are the same way, so you know, there's I mean,
the land has been sold. You know, the grandfathers that
started farms, their grand children have already sold a lot
of the farmland. Almost everything that was written I should
(19:23):
say everything, but a large percentage of what was grown
in California, which is the largest growing state in the
United States, is now in Baja Mexico, so they call
it Baja California. We know that's not true. So the
terms are going to you know, definitely impact that. And
there's there's not the land. Also, the labor, I mean,
there's not for agriculture jobs. There's not the labor availability.
(19:43):
The infrastructure costs too much, the insurance. You know, it
just people aren't going to spend three hundred dollars on
a bouquet. And you know, in order to turn around
the ship, it's going to require American consumers to be
willing to spend a lot more on sending a gift,
and that isn't probably going to happen. So it's scary
to think about all these things.
Speaker 2 (20:01):
So if we were to see tariffs go into effect
on Mexico, and you know if obviously the President has
used this as a way to negotiate, at least he
did that with Columbia a few weeks ago. Where would
the prices increase? You said, it would increase for you.
You would have to pass those along to the consumer,
and we don't be able to absorb those.
Speaker 7 (20:21):
Plural industry is a notoriously low margin. You know, I'm
very proud of the single digit profit margins that we
have at Farmwell Flowers. They are hard fought for that.
We work a lot of hours, We work really hard
for that single digits. You know, the largest companies in
our industry that are you know, public companies, so you
can go look at their earnings have single digit profits
(20:42):
when they have profits. So there's no way for us
not to pass it on to consumers. We're already subsidizing
shipping by a large percentage, you know, now if we
have to subsidize our you know, our gross margins are
tiny compared to almost every other industry. I joke a
lot I have with you guys before. I wish we
sold sweaters, right we don't, so you know, yeah, something
like very large you.
Speaker 2 (21:03):
Are you considered developing video chips.
Speaker 7 (21:05):
Exactly exactly, well, so I mean it's all going to
have to be passed on, you know, we are you know,
because we have that little bit of profit that we've
focused on in the last two years, we're able to
supplement a small amount, you know, like the CEO Ford said,
like he has a couple of weeks, like we can
supplement it a bit, but not you know, it's.
Speaker 3 (21:23):
Also not like you guys can buy ahead in stock
pilot and warehouses right there.
Speaker 4 (21:27):
You know, Flowers just last just a certain amount of time.
Speaker 7 (21:29):
Five days. We have five days, you have five five So.
Speaker 4 (21:32):
Like it's wild.
Speaker 3 (21:32):
You know, I do wonder about this whole idea of
globalization that has happened over the last couple of decades,
right and global supply chains. And then we feel like
we've talked a lot about nearshoring and on shoring. It
sounds like for the flower industry it's not even like financially.
Speaker 4 (21:48):
It won't work.
Speaker 3 (21:48):
It's even if we do it, or it might not
even be doable because there might not be the land
or farm farming.
Speaker 4 (21:54):
To do it.
Speaker 7 (21:54):
Absolutely. I mean when we first started talking, we had
a large you know, pre covid, We had a charge
manufacturing facility in San Francisco, so forty thousand square feet.
We had three hundred team members there, and we were
losing our shirts. We were not we were just breaking
even enough to pay paychecks. With that, we can't even
do it. Not growing the flowers, just designing them into
(22:16):
bouquets at that scale, there's not enough workers. And with
you know, I mean costco just raising them in a
wage of thirty two dollars, which is wonderful, we wouldn't
have that ability to So we're trying to all compete
with a workforce an hourly workforce that we can't. So
there's just so many reasons why this is going to
have a ripple effect much greater than what most consumers
would think.
Speaker 2 (22:35):
So what do you do for assembly?
Speaker 7 (22:36):
Now, we have a very diversified models, so we use
farm partners that we teach them how to design them
and ship them out. We have bouquet production facilities. We
have very little owned ourself. It's been smarter for us.
Speaker 2 (22:51):
So you've essentially outsourced the design or assemblage of the bouquets.
Speaker 7 (22:55):
Yes, we do it different than our competitors in a
way that we control the design aspect of it. Or
with that way we could keep our quality where we
need it to be. But it's not how it used
to be pre COVID.
Speaker 2 (23:04):
So when you say you've done, you've outsourced it to farmers.
So if it comes from South America on a plane,
it's already in a bouquet.
Speaker 7 (23:12):
Yes, now most of ours are with US farmers, but
we do have some in Columbia where just we have
one in Ecuador, so we do have facilities elsewhere. Some
of them are designed there, some of them are shipped
raw materials to other facilities in the US. We diversified
to get closer to the end consumer to help with
our shipping costs. We're killing us before when we first
started talking as well, in order to be able to
(23:33):
compete with lower price points that we need to have
to compete with our competitive set.
Speaker 4 (23:37):
Is it getting easier or harder to do this? How
long have you been doing this?
Speaker 6 (23:39):
Now?
Speaker 7 (23:40):
Fourteen? This is our fifteenth year, and I.
Speaker 4 (23:41):
Thought it was a so you know, and it's you
who has been doing it. So I'm just curious, as
a small.
Speaker 3 (23:48):
Business owner who has seen pandemics and you name it
like some really incredible things kind of test your ability
to keep it going, Like is it an easier business environment?
And I'm curious to what you're anticipating from the new
administration in terms of small business policy, if at all.
Speaker 7 (24:06):
Yeah, I'm worried. I'm worried about this administration and what
it's going to mean for us as a company. I
mean because those the tariffs and things that and the uncertainty,
like I've gotten used to the easier part has been
I've gotten used to more uncertainty. I understand now that
there is should be a line item in my budget
every year, which there is now for unplanned expenses, things
(24:27):
I didn't understand before. And I think my mindset shifting
from you know, growth at all cost to profitability has
helped us tremendously. But I had to sacrifice something for that.
Speaker 6 (24:37):
You know.
Speaker 7 (24:37):
I wanted the Silicon Valley dream. I wanted to build
a company. I wanted to be the you know, cover
of Entrepreneur magazine. I wanted all those things and that
now have a very different reality. And I'm happy with
that reality. I'm happy that I can provide good jobs
that are more stable. But the level of uncertainty with
things I can't control right now, you know, definitely keeps
me up at night.
Speaker 4 (24:57):
So is it easier in general?
Speaker 7 (25:00):
I think because I had, it's easier because the education
that I've recupkept from doing it. If it's harder, it's
definitely more complex, But because I'm wiser now, it's it's
a bit easier. I guess.
Speaker 5 (25:12):
Yeah.
Speaker 7 (25:12):
Yeah.
Speaker 2 (25:13):
You bootstrap the company, so you don't have the same
pressure that a lot of startups. And I'm not even
considering you a startup because you've been around for fifteen
years at this point that small businesses have after they
raise outside funding, and that's for an exit. Last time
we spoke with you, you said you were in this
for the long pull. I'm sure there are companies that
come by who want to acquire you. How are you
thinking about that?
Speaker 7 (25:32):
Yeah, absolutely so. I feel I actually used to think
this is my biggest curse. I actually owned the unfundable
Christina stumble dot com, by the way, and the unfundable.
I used to think I would complain about it, you know,
to you, but I would been playing constantly and be like,
nobody will give me any money, Like do I not
look tsworthy? You know, look at our numbers? And now
I think it's the greatest gift because I see all
of my friends that have you know, startups are not
(25:54):
startups anymore, but have you know board meetings every three
months that they are just in so much pain about
everybody is expecting them to work miracles in an economy
that's not you know, it's not possible, you know, and
you know I right now, I'm just you know, really
happy that it happened. I think it's a big gift
I as given. And how I'm looking at it for
the long run now, is you know, doing some smart
(26:17):
strategic things that I think will help us in five
to ten years, not thinking about the next quarter, not
thinking even this year, like you know, it's a building
year for us. I'm I'm you know, will comp last
year and have the same you know, single digits profit hopefully,
but that single digit profit is allowing us to do
things like lockdown some supply chain, We're vertically integrating, We're
growing some flowers for the first time. We're doing things
(26:39):
like that that I think will help us five to
ten years from now.
Speaker 3 (26:42):
Where do you think you will be in five to
ten years?
Speaker 7 (26:44):
Hopefully still here talking to you both. We hope so too.
That's my dream, and you know, hopefully, you know, we'll
do sustainable growth, so we'll be bigger five to ten,
you know, ten years from now, but we'll done it
the right way in a way that we could be
here fifty years if we wanted to.
Speaker 3 (26:59):
Yeah, when you say sustainable growth, you're talking about financial
sustainable growth. But I'm also I'm curious about, like you know,
the impact on the environment and how your approach and
stuff like that can be challenging.
Speaker 7 (27:09):
Absolutely can be challenging. You know, it's always wigne what's
the best thing we can do in our opinion right,
Like we're very careful not to call ourselves like an eco,
you know, like we get this title a lot and
more always like no, no, no, don't like there's nothing
sustainable about flowers. Really. There's lots of transportation back and
forth inbound outbound there. You know. They bring joy to
(27:30):
people's lives and we love that. But we do the
best we can. We always make the right decision, even
if it impacts the bottom line in a negative way
for us. We spend more money to do it the
right way, but we don't ever tout our you know,
environmental consciousness.
Speaker 2 (27:44):
How has what people want changed? Like, how has what
you offer changed due to change the consumer taste? I
was talking to somebody who's way younger than I am,
and she just got engaged. She has a huge diamond
and it's a lab grown diamond, and she was saying,
all my friends who are getting engaged right now are
getting these lab grown diamonds, and we're seeing that kill
(28:04):
the diamond industry and kill some of these retailers out there.
Is that happening with flowers? Like are there changing consumer
tastes for younger people?
Speaker 7 (28:11):
I don't think it's taste really it is price points though, yeah,
what consumers will spend. I mean Valentine's is the only
exception to this rule. People are looking for deals right now.
People are looking for a good value. So that does
you know, I'm still had a product. I make every
bouquet you see on our site, and when we're doing it,
we are you know, always weighing like we need to
keep our AOV, our average order value up, you know,
(28:32):
as high as possible, but we need to not you know,
right now we have kind of a gap in the
good customer. We have better and best, but we're working
on creating a better, you know, offering for the good
customer that is more price sensitive. Especially going into next year,
I think it's going to be even more and more necessary.
And also people are looking for to feel like they
got a deal. So discount codes. We used to be
like anti We're like, we give you the best deal
(28:52):
we can, and now we're like, okay, here's a discount code.
You know, here's a free ship shop. So it looks
like you're getting free shipping, but shipping costs a lot
of money, so it's not free shipping.
Speaker 2 (29:00):
Such thing as free shipping.
Speaker 7 (29:02):
Free shipping, So.
Speaker 3 (29:03):
I feel like shark tak, what's your customer acquisition costs?
Like is it expensive or do you find like most
of your customer base they repeat, you know, buyers and
so on and so forth, like give us an idea.
Speaker 7 (29:13):
Yeah, so about half are our repeat and half or not.
We do not exceed twenty five dollars in customer acquisition costs, okay,
because we can't. So that's why we're smaller than we
want to be right now. But we're doing that because
if we go over that, we know that we are
paying more money than we can afford to be financially healthy,
so we just cut it off. There.
Speaker 2 (29:30):
Are you using AI at all?
Speaker 7 (29:32):
A little bit? So not in the best I mean
we use it everybody's.
Speaker 3 (29:35):
Brands because we're not using it as probably and everybody's
like you should be, and we're like, all right, so
how are you doing it?
Speaker 7 (29:40):
I mean I use it a lot personally for writing,
do you know? Yeah? Absolutely, I have it. It knows
my tone now like every job description. I have it
writing for me now and the tone that I everything is,
So I use it a lot personally for that. In
emails as well, I'm always like make this take out
the emotion in this email things like That's why I
use it a lot for that personally, and it helps
from business, you know, because I can get my soap
(30:00):
box out and stuff I need to not sometimes so
use it for that. We use it a little bit
in customer service. There's even like with the platform we use,
there's a make It Nicer button that you know that
uses AI to to make our you know, after customer service.
You know they're getting hit with a snowstorm, so you have.
Speaker 2 (30:15):
A button you get it. You like, when you're sending
an email to a customer, you have a button you
press that says, make it nicer, You're nicer.
Speaker 6 (30:20):
Wow?
Speaker 2 (30:22):
Is it in an LLM?
Speaker 7 (30:23):
It's it's Gladly, which is a software program for customer service,
which we love. And you know, I was all of
our teams in customer service last Mourns Day when we
had a big snowstore Valentine's Day and we had a
big you know delay because of that, and we were
all like, at the end of the day, make it nicer,
make it nicer, you know, because it gets hard.
Speaker 4 (30:40):
So what's hard about running a small business right now?
Speaker 6 (30:44):
Yeah?
Speaker 3 (30:44):
I think if you need funding, can you get it.
Speaker 7 (30:47):
Yeah, absolutely, Like you know, you can only get it
when you don't need I mean, I you know that's
a good point.
Speaker 4 (30:51):
That's a good point. We well do you like?
Speaker 3 (30:53):
Yeah, So how do you manage like, I don't know
what's the economic backdrop that you think about for the
United States right now? As you said, there's a lot
of questions, there's a lot coming at us. I mean,
I'm just curious, how are you managing for like what
kind of a consumer, a consumer that's going to constantly
look for a value.
Speaker 4 (31:07):
Like give us some idea.
Speaker 7 (31:08):
I think marketing is actually the hardest thing by far,
like getting traffic to your site in an affordable way,
cutting through all the noise. I mean you see your inbox.
People are sending emails. Some companies get me three a day.
It's aise, Yeah, it is right, and one of those
people that's once to day. I'm sorry, we won't go
for that, but you know, it's trying to cut through
that noise with like I said, our customer acquisition costs,
Like if we could spend sixty or seventy dollars, but
(31:30):
why would we for one hundred and four dollars? AOV
like that doesn't make any sense, and a you know,
one point seven to two point two LTV like you know,
like we know how many. It's not worth it. It's
just not worth it. So I think the hardest thing
is trying to figure out creative ways with limited team
members because you also have to run really lean right now,
so you don't have a ton of team members to
be able to do like lots more partnerships or things
(31:51):
like that that will actually help you with the customer
acquisition cost.
Speaker 2 (31:54):
Have you had a chance while you've been in New
York City to see any of the bodega flower displays?
Speaker 6 (31:58):
No?
Speaker 5 (31:59):
I have not.
Speaker 2 (32:00):
How do they do this because it's such a low
margin business, but you can still yeah case of fo Yeah, yeah,
how do they do that?
Speaker 7 (32:08):
They're all imported? Okay, they're imported from you know, and
the flower types that are there are ones that will
hold up for a very long time. So like if
I'm gonna use button chrysanthemums, you know, those can be
outside of that deli or you have Vediga, you know,
for you know, you can buy it for twenty dollars
and it can sit there for three weeks. David Austin Rose,
you can't David Austin Rod is going to cost you
(32:28):
two dollars at wholesale, you know dollar fifty to two
dollars at wholesale price, which means going to cost you
six dollars for that David Austin Rose, and you have
about three days. So it's a type of flowers they use.
It's where it's coming from. It's the colors that a
lot of people don't.
Speaker 6 (32:42):
You know.
Speaker 7 (32:42):
If we like peaches and pinks and things like that,
you're gonna get bright purples and bright yellows and things
like that that are the kind of the leftovers people
don't want. They cut deals to them.
Speaker 4 (32:50):
Not always the greatest colors. There's a lot of carnations,
a lot of food, not just gonna say no.
Speaker 3 (32:56):
It's interesting to hear though, with the wholesale prices of
like a great row there. Something is because you realize,
like when you're doing a bouquet and you're like, oh
my god, but you realize that your cost.
Speaker 7 (33:05):
Is expensive, really expensive. I mean King Prote's are my
favorite flowers and we get them for about seven dollars.
King Proteos They're awesome. They're from like Australia, New Zealand area,
South Africa. Normally, like we have a lot of buying power,
but if you ever smaller'd be like twelve to fifteen
dollars per stem. You know so, I mean you, if
you're going to a local flower shop, it's going to
(33:25):
cost you forty five dollars a stem for it. Yeah, yeah, exactly,
better get on it.
Speaker 2 (33:30):
I know I know where to go. You do know
where to know where to go.
Speaker 7 (33:33):
Totally totally thank you so much, thank you, thanks for
having me.
Speaker 4 (33:37):
Good luck with Valentine's Day.
Speaker 7 (33:38):
Thank you.
Speaker 3 (33:38):
And then comes to Mother's Day Christina Stemball, she's founder
in CEO farm Girl Flowers. Really truly one of our
favorite interviews, So so glad you find time for us.
Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business Week,
insight from the reporters and editors that bring you America's
most trusted business magazine, plus global business, finance and tech
news as it happens. Bloomberg Business Week with Carol Masser
(00:23):
and Tim Steneveek on Bloomberg Radio.
Speaker 2 (00:26):
It is Bloomberg Business Week. I'm taking a look at
shares of Ford down six percent as we speak. The
company reported fourth quarter adjusted earnings per share at thirty
nine cents. The estimate was for thirty two cents. The
company though seeing twenty twenty five adjusted ebit seven billion
to eight point five billion. The estimate Carrol was for
eight point five to seven billion dollars.
Speaker 3 (00:46):
I just want to point out our Keith Notton out
with the story on the Bloomberg saying Ford warning that
profit may fall by two billion or more this year
due to an expected drop in vehicle prices and costly
new model launches.
Speaker 4 (00:56):
Companies earnings before.
Speaker 3 (00:57):
Interest in taxes will fall to a range of seven
billion to eight and a half billion, down from that
ten point two billion profit it generated back in twenty
twenty four, just last year.
Speaker 4 (01:06):
Keep in mind.
Speaker 3 (01:06):
Ford lost a record five point one billion dollars on
evs last year and predicts the deficit could wind to
widen to as much as five and a half billion
this year. So that's a bit of your backdrop and
explains while we are seeing Ford shares dip in a
big way here in the aftermarket. Tim the stock right now,
it is down about five percent.
Speaker 2 (01:25):
There's also those concerns about tariffs and the question about
what the tariffs will do for companies including the big
three Ford, Stlantis and GM, GM at least, by one measure,
the most exposed to tariffs on Canada and Mexico. We
know though that those tariffs have been put off for
at least till the end of this month.
Speaker 3 (01:42):
All right, so let's see get a little bit more
on Ford in particular with us right now is Rebecca Linlan.
She's managing director or Automotive at the consultancy Allison Worldwide. Rebecca,
you have been following the auto industry for a long
long time, and I know maybe you're not going to
rip apart the balance sheet here, but let's talk. We're
Ford is and based on what you just heard about
(02:03):
their latest financial update.
Speaker 5 (02:06):
Yes, Carol, thank you so much for having me on.
As you know, I'm not a stock analyst, So what
I really look at and focus in on is consumer
behavior and consumer acceptance when it comes to electric vehicles
in particular.
Speaker 6 (02:24):
And one of my sister.
Speaker 5 (02:25):
Agencies here at both Alison Worldwide and stag Well Overall
is Harris Polls. So I pulled in some information and
what was really interesting to me is that only twenty
six percent of people that we pulled actually said that
the federal tax credit would be a top five.
Speaker 6 (02:41):
Reason for why they would consider an EV.
Speaker 5 (02:44):
So we're finding that what consumers really gravitate towards is
the fact that we still need charging infrastructure in order
to make them feel more comfortable buying an EV. And
this really impacts all of all of those plans that
you both were just discussing.
Speaker 6 (03:04):
A really big challenge.
Speaker 2 (03:05):
What does that infrastructure look like like? What what you know?
It doesn't look like gas stations because we know that
because a lot of the charging can occur at home.
We know that, so it's not like, you know, a
gas station or an EV charger on every corner like
there is with gas stations. What does the infrastructure look
like to make people comfortable.
Speaker 6 (03:25):
Yes, it's a great question, Tim.
Speaker 5 (03:27):
So what's interesting when you think about it, Actually, if
you look at level three chargers, which are the most expensive,
that's what makes up the Tesla supercharger network and such.
Those actually most modern vehicles, most new evs coming out today,
they can charge in about twenty to twenty five minutes if.
Speaker 6 (03:47):
You have a level three charger.
Speaker 5 (03:49):
So I actually did a little experiment when I drove
from Los Angeles to Las Vegas for CEES. I thought,
let me try and see how long would I be
inside to use the restroom, get a cup of coffee,
and get back to my car.
Speaker 6 (04:04):
And it actually took me about fifteen to eighteen minutes
to do all those things.
Speaker 5 (04:09):
And so when you're charging, when you're at a rest stop,
if we have the proper infrastructure, we could actually put
chargers in some of those gas stations and some of
those locations.
Speaker 6 (04:21):
The ideal really is that you're charging at home at
least for right now.
Speaker 4 (04:27):
What is you know what I want to just go
back to.
Speaker 3 (04:29):
You know, here we are watching Ford sell off big
time in the aftermarket, and I don't think we were
surprised necessarily completely, but I do wonder, you know, what's
the way forward.
Speaker 4 (04:40):
China is moving way ahead on evs.
Speaker 3 (04:43):
And you know, I do wonder if the American companies
Rebecca take a back seat because the American market and
American demand isn't there, because maybe the infrastructure isn't there,
and there are still some concerns. The costs of evs
have been so expensive in the United States, I mean
c government policies and subsidies have helped that out. But
(05:04):
you know, what does it mean for Ford and GM
and Stilantis in terms of their role in the global
auto market if they are pulling back on EV's because
they kind of have to.
Speaker 6 (05:16):
Well, the keep in mind that all the technology is there.
Speaker 5 (05:20):
They're Carol, so they have developed these vehicles that they
could sell in other parts of the world, so they
could continue to make internal combustion engines and hybrids.
Speaker 6 (05:33):
Let's not forget hybrids.
Speaker 5 (05:35):
Hybrids have been around for as long as I have
and longer, and yet consumers are just now seeing them
and saying, you know.
Speaker 6 (05:43):
What, that's actually a really good solution.
Speaker 5 (05:46):
And by some reports we've actually seen hybrid sales are
a bit of a rejection of going full EV right
because you can charge at home, and you can charge.
But at the end of the day, really this is
about can unions consumers will adopt technology that is more
convenient and right now, without supporting infrastructure, an electric vehicle
(06:09):
simply is not as convenient as an internal combustion engine.
Speaker 3 (06:12):
I mean, if you were sitting down with the Ford CEO,
and actually we're going to hear from the Ford Ceoster
Farley in just a moment across our Bloomberg platforms, Jim
Farley's going to join us. I mean, what would be
the number one question that you would want to talk
to him? Or number one or number two in terms
of his business and Ford's role in the global auto market.
Speaker 5 (06:34):
I would advise both Jim and Mary Bara and anyone.
Speaker 6 (06:37):
Else who would be willing to listen, that this is
about consumer choice.
Speaker 5 (06:41):
That we as a nation in the US right now
we really don't have the infrastructure to support a full
migration to electric vehicles. It is about providing consumers with
a choice with the most fuel efficient version of what
they want to buy, and that's one of the things
that we need to focus on.
Speaker 6 (07:02):
We are really not in a position to have.
Speaker 5 (07:06):
A full on, full ev or and we don't need
to have full gas anymore because we do have fantastic
electric vehicles that are out there with the type of
range three to four hundred miles just like your internal
combustion engine. But it really gets back to charging. That's
the number one challenge that we have.
Speaker 2 (07:25):
So what about e revs. We've been talking about these
with Keith nat and these are sort of plug in
hybrid electric but with super long range I mean we're
talking hundreds of miles here. What's the future of those?
Speaker 4 (07:38):
Yeah, the extended range right electric vehicles?
Speaker 6 (07:41):
Sure? I mean so obviously it gets again, it gets
back to charging. So it doesn't really matter.
Speaker 5 (07:46):
Like even if you have a hybrid that is both
battery and electric, you still have to in order to
maximize the ownership benefits, you still need to charge it.
Speaker 6 (07:56):
So it's really it's a simple.
Speaker 5 (07:59):
But incredible complicated answer. So it is about making an
electric vehicle, whether it's extended range, whether it's short range,
it is about making them more convenient and providing an
opportunity to charge.
Speaker 6 (08:15):
I have I call it.
Speaker 5 (08:17):
A lot of consumers are looking at this as the
perception of the exception. When people consider an EV, they
say yes, but once a year I drive to grandma's
house and I don't know where I would charge on
the way, right.
Speaker 6 (08:28):
And so instead of sitting there and thinking, you know, every.
Speaker 5 (08:31):
Day or maybe two days a week or three days
a week, I go into the office, I drive thirty
five miles a day.
Speaker 6 (08:38):
I can actually charge almost once a week.
Speaker 5 (08:41):
That's the type of conversations that we need to have
instead of looking and saying, yes, but you know, I
go to grandma's house once a year for Thanksgiving or something.
Speaker 3 (08:51):
All Right, we got it roun Hey, Rebecca, thanks so much.
Rebecca Liland, Managing director Automotive at Allison Worldwide talking with
us about the auto sector. And we do so because
we are watching shares of Forward here in the aftermarket, folks.
They are down just shy a five percent here, and
this as the company sees a sharp profit drop, and
they're talking to and addressing the possibility of tariffs and
(09:14):
the impact not the possibibility, but the reality perhaps and
the impact it could have on their business, certainly on
the cost side of things.
Speaker 2 (09:22):
Yeah, that's right. Forward warning that profit may fall by
two billion dollars or more this year on an expected
drop in vehicle prices and costly new model launches, adding
to risks posed by potential steep new tariffs under President
Donald Trump, and dimming electric vehicle prospects.
Speaker 3 (09:37):
Yeah, the second largest US automaker are just saying that
earnings before interest in taxes will fall to a range
of seven billion and eight and a half billion. That's
down from the ten point two billion dollar profit that
it generated last year. So once again you've got the
CFO telling reporters that earnings will drop this year due
to industry wide prices falling by back two percent and
(09:58):
that cost of launching the new Lincoln Navigator and Ford
Expedition suv which will result in any break even first quarter.
Speaker 4 (10:05):
So four chairs are down.
Speaker 2 (10:06):
They're also just about two and a half weeks into
a leadership transition in Washington, we see some shake up
in C suites. Match Group named Zillo co founder Spencer
Raskoff as its new CEO, replacing Bernard Kim. But as
we all know, not all leaders or CEOs are presidents, Carol,
and that's where Paula Davis comes in. She's founder and
CEO of the Stress and Resilience Institute. She's got a
(10:26):
new book out it's called lead Well. Five mindsets to engage,
retain and inspire your team. She joins us this afternoon, Paula,
good to have you with us. You wrote a book
a few years ago about stress and burnout, and we
spoke to you back then. What is the relationship between stress,
burnout and leadership?
Speaker 7 (10:45):
Thank you both so much. It's I'm so glad to
be back on. Yeah.
Speaker 8 (10:49):
So a lot of what came, a lot of the
material for this new book really came from my work
in the last probably four to five years or so
since my first book has come out, really looking at
burnout in a different way, so taking a look at
the systemic or root causes of it. And when I
started to dig into that with leaders and teams, I
realized that a lot of the results was stuff that
(11:12):
needed to be focused on or was really under more
of the purview of leaders And so I realized what
those themes were and just kind of turned them into
the mindsets for the book.
Speaker 3 (11:22):
You know, I do wonder with you know, what has
been coming out of the government in terms of diversity,
equity and inclusion efforts, you know, a roll back there,
and we increasingly see companies saying that they're ending their
efforts or you know, not going to be maybe as
visible when it comes to them, you know, in general
in terms of like inspiring your team and thinking about
your team. Is there a whole rollback that's going on
(11:44):
in corporate America or.
Speaker 4 (11:45):
Do you see differently?
Speaker 8 (11:48):
So I think that certainly DEI is going through, if
not a certainly a rebrand, I would say, at the
very least. And I think that, you know, one of
the ways one of the easiest ways for leaders to
I think, help with how do I deal with the
fallout from that with just in terms of how my
folks are feeling, is with one of the mindsets that
(12:11):
I talk about, which is kind of upping your game
and the sticky recognition and mattering component. And so that's
a mindset that I oftentimes will encourage leaders to start with,
which really just entails really making sure you're being very clear,
letting people know the evidence of their impact and the
impact that they're making and the impact that their work
is having on your clients or your business units or whatever.
(12:34):
You know, the outcome is because it activates something really
powerful called mattering. So really that combination of knowing we're
achieving something, but also that we're feeling recognized for that.
Speaker 7 (12:46):
That's a big deal.
Speaker 6 (12:47):
You know.
Speaker 2 (12:47):
I open this by talking about leadership, and you know,
I think when people think of leadership, they always think
of managers or people in positions of power. But this
book also covers like ways you can yourself even if
you're not a manager, Ways you can apply yourself, ways
you can take a self assessment to sort of understand
where you're going.
Speaker 7 (13:08):
Talk a little bit about who this is for, yes,
So I mean really, I mean the core audience really
is for leaders or managers at any level.
Speaker 8 (13:16):
And I don't think you have to be in the
c suite. I know, you don't have to be in
the c suite to take advantage of.
Speaker 7 (13:20):
What this is about.
Speaker 8 (13:21):
So if you are new to your role, if you
are new to a leadership position, if you haven't been
leading all that long, I mean really, at the end
of the day, leadership is just a set of behaviors
that you use to get your team and other people
in your purview where you want to go all together.
And so so there's definitely that focus. But yeah, I
mean I did definitely want to sprinkle in, you know,
some bits and pieces for people as well, who you know,
(13:45):
just kind of want to flex their muscles in a
way that's going to help them feel a little bit
more inspired and engaged.
Speaker 3 (13:50):
Does AI make this all harder, Paula, Especially when I
think workers are saying, well, wait a minute. You know,
I'm kind of concerned that artificial intelligence, advanced artificial intelligen
going to take my job or take parts of my job.
Speaker 7 (14:03):
I think it makes it more stressful.
Speaker 8 (14:04):
But I also think that this this notion, you know,
part of the message that I want to get across
in the book is that now is the time for
kind of these concepts of human sustainability and human centered
practices in human centered leadership. So the more tech focused
and tech y we're going to get and continue to
get into the future, the more it's going to really
demand or mandate that we also really up our game
(14:26):
on some of these human practices as well, because they're
going to have to coexist. I mean, AI is certainly
going to, you know, continue to influence the landscape of
our work, but humans are always going to, I hope,
be part of the work equation. And so, you know,
clients and people still want to deal with other people
and so we got to figure out how to make
that happen.
Speaker 2 (14:47):
How does how does that work?
Speaker 6 (14:48):
Though?
Speaker 2 (14:48):
In an AI world? I mean, do we have AI?
It is ever replacing managers? In your view?
Speaker 7 (14:55):
That's really interesting. So I think there will.
Speaker 8 (14:57):
Be things that AI is going to be always is
really tough to replicate. Like I think it's going to
be hard for AI to replicate curiosity, good communication skills,
good team work.
Speaker 7 (15:08):
It can enhance maybe.
Speaker 8 (15:09):
Perhaps some of those efforts, you know, and when you
think about some of the psychology too, when we talk
about resilience and when we talk about values and meaning,
those are going to be things and certainly already I
mean you look at gen Z and some younger millennials
and millennials and really honestly all of us really want
that sense of values, alignment and meaning in our work.
And I think that AI and technology is going to
(15:31):
have a hard time replicating some of those human attributes.
Speaker 3 (15:35):
Yeah, it's kind of interesting, right, and how this dynamic
you know, plays into it? Just got about thirty seconds here.
Do you feel like most leaders get it right or
there's a lot to be learned?
Speaker 8 (15:46):
I think most leaders are trying. I think they're trying
really hard. I think they don't have a language. I
think they don't know where to start. And this is
such a complex and challenging time to lead that they
really need concrete skills in a roadmap.
Speaker 7 (15:59):
And that's really the that I'm seeking to fill.
Speaker 3 (16:01):
If leaders could change one thing and just that would
kind of listen to you, you know what thing could
they change that would make them maybe better leaderships along
the lines of what you've been talking about.
Speaker 8 (16:13):
Yeah, I think that going back to the notion of
you know, making sure that people see very clearly that
they're making an impact and how they're making an impact.
Simply just noticing other people, telling people how you lie
on them and kind of focusing on those basic first
step human skills is critical.
Speaker 3 (16:30):
Paula Davis, the book is Lead Well, Thank you so much.
Speaker 6 (16:33):
Well.
Speaker 2 (16:33):
Christina Stembel often joins us during big months for the
flower industry. Think Mother's Day in yes, Valentine's Day, which
is coming in just over a week. Carol Masser warning
everybody we don't need the excuse of a holiday though
to talk to her, because we love it when she
joins us, especially when she's here in New York from
the West West Coast. Christina is founder and CEO of
farm Girl Flowers. It's a company that she bootstrapped into
(16:56):
a thirty five million dollar business. She joins us here
in the Bloomberg Interactive Broker's studio.
Speaker 4 (17:00):
How are you.
Speaker 7 (17:01):
I'm good. Thank you for having me back. I love
being here.
Speaker 4 (17:03):
It's good to have you. How's business?
Speaker 7 (17:05):
Business is good? I mean we're in our second busiest
time of year. Thank you for the reminder. We're about
a little over a week out, so please everyone get
your orders in. But it's we're holding study with exactly
where we thought we'd be.
Speaker 4 (17:16):
How much comes in last minute? I am such a
last minute girl, So tell.
Speaker 3 (17:19):
Me how much comes in last and how do you
like manage a business for that?
Speaker 7 (17:23):
Yeah, it's hard. I mean we put orders in months
and sometimes up to a year in advance for some products,
some of our materials, so we just you know, it's
it's a wing in a prayer a little bit. It's
a good productions too, so you know, it's hard. But
within the week before probably about seventy percent of the
orders will come in.
Speaker 4 (17:38):
Wow, so a lot are coming in right now.
Speaker 2 (17:40):
Yes, we got to go to tariffs and talk a
little bit about where the flowers come from and how
you're looking at the environment given what we heard from
the President a little earlier this week. Yes, Mexico and Canada,
those are on pause right now. Where did the flowers
come from? And how do you think about tariffs?
Speaker 7 (17:58):
Yeah, so motion of the flowers that everyone purchases in
the United States come from South America. So Colombia was
the first one that put us everybody on edge in
the floral industry. It would be too late to really
impact Valentine's Day numbers, but by Mother's Day our prices
would increase dramatically with Columbia. So that's on pause right
now as well, which is really wonderful. Canada in Mexico differently,
(18:20):
so Mexico is going to impact us all as well.
About eighty percent of all the flowers that are sold
in the United States come from other countries. Ours is less.
We're about fifty five to sixty percent domestic right now,
but that's going to increase. That's our domestic production is
going to be increased because everyone's going to be fighting
for it because they're not going to be able to
get the same prices elsewhere.
Speaker 3 (18:40):
You think you know how much you know, in anticipation
of this impacting how much does it, like, when do
people start to change in terms of growing more here
in the United States? How much more can you grow
in the United States because you're competing for land against
everything else. So I'm just curious how quickly can the
model change from importing.
Speaker 4 (18:59):
To having it grown domestically.
Speaker 7 (19:00):
I don't even know if it's possible to change it.
I mean, following you know, the CEO for it, I
feel very similarly to him. We don't have the infrastructure here.
You know, there's not a lot of succession planning in
farming in general. You know, in agriculture of any kind.
Flowers are the same way, so you know, there's I mean,
the land has been sold. You know, the grandfathers that
started farms, their grand children have already sold a lot
of the farmland. Almost everything that was written I should
(19:23):
say everything, but a large percentage of what was grown
in California, which is the largest growing state in the
United States, is now in Baja Mexico, so they call
it Baja California. We know that's not true. So the
terms are going to you know, definitely impact that. And
there's there's not the land. Also, the labor, I mean,
there's not for agriculture jobs. There's not the labor availability.
(19:43):
The infrastructure costs too much, the insurance. You know, it
just people aren't going to spend three hundred dollars on
a bouquet. And you know, in order to turn around
the ship, it's going to require American consumers to be
willing to spend a lot more on sending a gift,
and that isn't probably going to happen. So it's scary
to think about all these things.
Speaker 2 (20:01):
So if we were to see tariffs go into effect
on Mexico, and you know if obviously the President has
used this as a way to negotiate, at least he
did that with Columbia a few weeks ago. Where would
the prices increase? You said, it would increase for you.
You would have to pass those along to the consumer,
and we don't be able to absorb those.
Speaker 7 (20:21):
Plural industry is a notoriously low margin. You know, I'm
very proud of the single digit profit margins that we
have at Farmwell Flowers. They are hard fought for that.
We work a lot of hours, We work really hard
for that single digits. You know, the largest companies in
our industry that are you know, public companies, so you
can go look at their earnings have single digit profits
(20:42):
when they have profits. So there's no way for us
not to pass it on to consumers. We're already subsidizing
shipping by a large percentage, you know, now if we
have to subsidize our you know, our gross margins are
tiny compared to almost every other industry. I joke a
lot I have with you guys before. I wish we
sold sweaters, right we don't, so you know, yeah, something
like very large you.
Speaker 2 (21:03):
Are you considered developing video chips.
Speaker 7 (21:05):
Exactly exactly, well, so I mean it's all going to
have to be passed on, you know, we are you know,
because we have that little bit of profit that we've
focused on in the last two years, we're able to
supplement a small amount, you know, like the CEO Ford said,
like he has a couple of weeks, like we can
supplement it a bit, but not you know, it's.
Speaker 3 (21:23):
Also not like you guys can buy ahead in stock
pilot and warehouses right there.
Speaker 4 (21:27):
You know, Flowers just last just a certain amount of time.
Speaker 7 (21:29):
Five days. We have five days, you have five five So.
Speaker 4 (21:32):
Like it's wild.
Speaker 3 (21:32):
You know, I do wonder about this whole idea of
globalization that has happened over the last couple of decades,
right and global supply chains. And then we feel like
we've talked a lot about nearshoring and on shoring. It
sounds like for the flower industry it's not even like financially.
Speaker 4 (21:48):
It won't work.
Speaker 3 (21:48):
It's even if we do it, or it might not
even be doable because there might not be the land
or farm farming.
Speaker 4 (21:54):
To do it.
Speaker 7 (21:54):
Absolutely. I mean when we first started talking, we had
a large you know, pre covid, We had a charge
manufacturing facility in San Francisco, so forty thousand square feet.
We had three hundred team members there, and we were
losing our shirts. We were not we were just breaking
even enough to pay paychecks. With that, we can't even
do it. Not growing the flowers, just designing them into
(22:16):
bouquets at that scale, there's not enough workers. And with
you know, I mean costco just raising them in a
wage of thirty two dollars, which is wonderful, we wouldn't
have that ability to So we're trying to all compete
with a workforce an hourly workforce that we can't. So
there's just so many reasons why this is going to
have a ripple effect much greater than what most consumers
would think.
Speaker 2 (22:35):
So what do you do for assembly?
Speaker 7 (22:36):
Now, we have a very diversified models, so we use
farm partners that we teach them how to design them
and ship them out. We have bouquet production facilities. We
have very little owned ourself. It's been smarter for us.
Speaker 2 (22:51):
So you've essentially outsourced the design or assemblage of the bouquets.
Speaker 7 (22:55):
Yes, we do it different than our competitors in a
way that we control the design aspect of it. Or
with that way we could keep our quality where we
need it to be. But it's not how it used
to be pre COVID.
Speaker 2 (23:04):
So when you say you've done, you've outsourced it to farmers.
So if it comes from South America on a plane,
it's already in a bouquet.
Speaker 7 (23:12):
Yes, now most of ours are with US farmers, but
we do have some in Columbia where just we have
one in Ecuador, so we do have facilities elsewhere. Some
of them are designed there, some of them are shipped
raw materials to other facilities in the US. We diversified
to get closer to the end consumer to help with
our shipping costs. We're killing us before when we first
started talking as well, in order to be able to
(23:33):
compete with lower price points that we need to have
to compete with our competitive set.
Speaker 4 (23:37):
Is it getting easier or harder to do this? How
long have you been doing this?
Speaker 6 (23:39):
Now?
Speaker 7 (23:40):
Fourteen? This is our fifteenth year, and I.
Speaker 4 (23:41):
Thought it was a so you know, and it's you
who has been doing it. So I'm just curious, as
a small.
Speaker 3 (23:48):
Business owner who has seen pandemics and you name it
like some really incredible things kind of test your ability
to keep it going, Like is it an easier business environment?
And I'm curious to what you're anticipating from the new
administration in terms of small business policy, if at all.
Speaker 7 (24:06):
Yeah, I'm worried. I'm worried about this administration and what
it's going to mean for us as a company. I
mean because those the tariffs and things that and the uncertainty,
like I've gotten used to the easier part has been
I've gotten used to more uncertainty. I understand now that
there is should be a line item in my budget
every year, which there is now for unplanned expenses, things
(24:27):
I didn't understand before. And I think my mindset shifting
from you know, growth at all cost to profitability has
helped us tremendously. But I had to sacrifice something for that.
Speaker 6 (24:37):
You know.
Speaker 7 (24:37):
I wanted the Silicon Valley dream. I wanted to build
a company. I wanted to be the you know, cover
of Entrepreneur magazine. I wanted all those things and that
now have a very different reality. And I'm happy with
that reality. I'm happy that I can provide good jobs
that are more stable. But the level of uncertainty with
things I can't control right now, you know, definitely keeps
me up at night.
Speaker 4 (24:57):
So is it easier in general?
Speaker 7 (25:00):
I think because I had, it's easier because the education
that I've recupkept from doing it. If it's harder, it's
definitely more complex, But because I'm wiser now, it's it's
a bit easier. I guess.
Speaker 5 (25:12):
Yeah.
Speaker 7 (25:12):
Yeah.
Speaker 2 (25:13):
You bootstrap the company, so you don't have the same
pressure that a lot of startups. And I'm not even
considering you a startup because you've been around for fifteen
years at this point that small businesses have after they
raise outside funding, and that's for an exit. Last time
we spoke with you, you said you were in this
for the long pull. I'm sure there are companies that
come by who want to acquire you. How are you
thinking about that?
Speaker 7 (25:32):
Yeah, absolutely so. I feel I actually used to think
this is my biggest curse. I actually owned the unfundable
Christina stumble dot com, by the way, and the unfundable.
I used to think I would complain about it, you know,
to you, but I would been playing constantly and be like,
nobody will give me any money, Like do I not
look tsworthy? You know, look at our numbers? And now
I think it's the greatest gift because I see all
of my friends that have you know, startups are not
(25:54):
startups anymore, but have you know board meetings every three
months that they are just in so much pain about
everybody is expecting them to work miracles in an economy
that's not you know, it's not possible, you know, and
you know I right now, I'm just you know, really
happy that it happened. I think it's a big gift
I as given. And how I'm looking at it for
the long run now, is you know, doing some smart
(26:17):
strategic things that I think will help us in five
to ten years, not thinking about the next quarter, not
thinking even this year, like you know, it's a building
year for us. I'm I'm you know, will comp last
year and have the same you know, single digits profit hopefully,
but that single digit profit is allowing us to do
things like lockdown some supply chain, We're vertically integrating, We're
growing some flowers for the first time. We're doing things
(26:39):
like that that I think will help us five to
ten years from now.
Speaker 3 (26:42):
Where do you think you will be in five to
ten years?
Speaker 7 (26:44):
Hopefully still here talking to you both. We hope so too.
That's my dream, and you know, hopefully, you know, we'll
do sustainable growth, so we'll be bigger five to ten,
you know, ten years from now, but we'll done it
the right way in a way that we could be
here fifty years if we wanted to.
Speaker 3 (26:59):
Yeah, when you say sustainable growth, you're talking about financial
sustainable growth. But I'm also I'm curious about, like you know,
the impact on the environment and how your approach and
stuff like that can be challenging.
Speaker 7 (27:09):
Absolutely can be challenging. You know, it's always wigne what's
the best thing we can do in our opinion right,
Like we're very careful not to call ourselves like an eco,
you know, like we get this title a lot and
more always like no, no, no, don't like there's nothing
sustainable about flowers. Really. There's lots of transportation back and
forth inbound outbound there. You know. They bring joy to
(27:30):
people's lives and we love that. But we do the
best we can. We always make the right decision, even
if it impacts the bottom line in a negative way
for us. We spend more money to do it the
right way, but we don't ever tout our you know,
environmental consciousness.
Speaker 2 (27:44):
How has what people want changed? Like, how has what
you offer changed due to change the consumer taste? I
was talking to somebody who's way younger than I am,
and she just got engaged. She has a huge diamond
and it's a lab grown diamond, and she was saying,
all my friends who are getting engaged right now are
getting these lab grown diamonds, and we're seeing that kill
(28:04):
the diamond industry and kill some of these retailers out there.
Is that happening with flowers? Like are there changing consumer
tastes for younger people?
Speaker 7 (28:11):
I don't think it's taste really it is price points though, yeah,
what consumers will spend. I mean Valentine's is the only
exception to this rule. People are looking for deals right now.
People are looking for a good value. So that does
you know, I'm still had a product. I make every
bouquet you see on our site, and when we're doing it,
we are you know, always weighing like we need to
keep our AOV, our average order value up, you know,
(28:32):
as high as possible, but we need to not you know,
right now we have kind of a gap in the
good customer. We have better and best, but we're working
on creating a better, you know, offering for the good
customer that is more price sensitive. Especially going into next year,
I think it's going to be even more and more necessary.
And also people are looking for to feel like they
got a deal. So discount codes. We used to be
like anti We're like, we give you the best deal
(28:52):
we can, and now we're like, okay, here's a discount code.
You know, here's a free ship shop. So it looks
like you're getting free shipping, but shipping costs a lot
of money, so it's not free shipping.
Speaker 2 (29:00):
Such thing as free shipping.
Speaker 7 (29:02):
Free shipping, So.
Speaker 3 (29:03):
I feel like shark tak, what's your customer acquisition costs?
Like is it expensive or do you find like most
of your customer base they repeat, you know, buyers and
so on and so forth, like give us an idea.
Speaker 7 (29:13):
Yeah, so about half are our repeat and half or not.
We do not exceed twenty five dollars in customer acquisition costs, okay,
because we can't. So that's why we're smaller than we
want to be right now. But we're doing that because
if we go over that, we know that we are
paying more money than we can afford to be financially healthy,
so we just cut it off. There.
Speaker 2 (29:30):
Are you using AI at all?
Speaker 7 (29:32):
A little bit? So not in the best I mean
we use it everybody's.
Speaker 3 (29:35):
Brands because we're not using it as probably and everybody's
like you should be, and we're like, all right, so
how are you doing it?
Speaker 7 (29:40):
I mean I use it a lot personally for writing,
do you know? Yeah? Absolutely, I have it. It knows
my tone now like every job description. I have it
writing for me now and the tone that I everything is,
So I use it a lot personally for that. In
emails as well, I'm always like make this take out
the emotion in this email things like That's why I
use it a lot for that personally, and it helps
from business, you know, because I can get my soap
(30:00):
box out and stuff I need to not sometimes so
use it for that. We use it a little bit
in customer service. There's even like with the platform we use,
there's a make It Nicer button that you know that
uses AI to to make our you know, after customer service.
You know they're getting hit with a snowstorm, so you have.
Speaker 2 (30:15):
A button you get it. You like, when you're sending
an email to a customer, you have a button you
press that says, make it nicer, You're nicer.
Speaker 6 (30:20):
Wow?
Speaker 2 (30:22):
Is it in an LLM?
Speaker 7 (30:23):
It's it's Gladly, which is a software program for customer service,
which we love. And you know, I was all of
our teams in customer service last Mourns Day when we
had a big snowstore Valentine's Day and we had a
big you know delay because of that, and we were
all like, at the end of the day, make it nicer,
make it nicer, you know, because it gets hard.
Speaker 4 (30:40):
So what's hard about running a small business right now?
Speaker 6 (30:44):
Yeah?
Speaker 3 (30:44):
I think if you need funding, can you get it.
Speaker 7 (30:47):
Yeah, absolutely, Like you know, you can only get it
when you don't need I mean, I you know that's
a good point.
Speaker 4 (30:51):
That's a good point. We well do you like?
Speaker 3 (30:53):
Yeah, So how do you manage like, I don't know
what's the economic backdrop that you think about for the
United States right now? As you said, there's a lot
of questions, there's a lot coming at us. I mean,
I'm just curious, how are you managing for like what
kind of a consumer, a consumer that's going to constantly
look for a value.
Speaker 4 (31:07):
Like give us some idea.
Speaker 7 (31:08):
I think marketing is actually the hardest thing by far,
like getting traffic to your site in an affordable way,
cutting through all the noise. I mean you see your inbox.
People are sending emails. Some companies get me three a day.
It's aise, Yeah, it is right, and one of those
people that's once to day. I'm sorry, we won't go
for that, but you know, it's trying to cut through
that noise with like I said, our customer acquisition costs,
Like if we could spend sixty or seventy dollars, but
(31:30):
why would we for one hundred and four dollars? AOV
like that doesn't make any sense, and a you know,
one point seven to two point two LTV like you know,
like we know how many. It's not worth it. It's
just not worth it. So I think the hardest thing
is trying to figure out creative ways with limited team
members because you also have to run really lean right now,
so you don't have a ton of team members to
be able to do like lots more partnerships or things
(31:51):
like that that will actually help you with the customer
acquisition cost.
Speaker 2 (31:54):
Have you had a chance while you've been in New
York City to see any of the bodega flower displays?
Speaker 6 (31:58):
No?
Speaker 5 (31:59):
I have not.
Speaker 2 (32:00):
How do they do this because it's such a low
margin business, but you can still yeah case of fo Yeah, yeah,
how do they do that?
Speaker 7 (32:08):
They're all imported? Okay, they're imported from you know, and
the flower types that are there are ones that will
hold up for a very long time. So like if
I'm gonna use button chrysanthemums, you know, those can be
outside of that deli or you have Vediga, you know,
for you know, you can buy it for twenty dollars
and it can sit there for three weeks. David Austin Rose,
you can't David Austin Rod is going to cost you
(32:28):
two dollars at wholesale, you know dollar fifty to two
dollars at wholesale price, which means going to cost you
six dollars for that David Austin Rose, and you have
about three days. So it's a type of flowers they use.
It's where it's coming from. It's the colors that a
lot of people don't.
Speaker 6 (32:42):
You know.
Speaker 7 (32:42):
If we like peaches and pinks and things like that,
you're gonna get bright purples and bright yellows and things
like that that are the kind of the leftovers people
don't want. They cut deals to them.
Speaker 4 (32:50):
Not always the greatest colors. There's a lot of carnations,
a lot of food, not just gonna say no.
Speaker 3 (32:56):
It's interesting to hear though, with the wholesale prices of
like a great row there. Something is because you realize,
like when you're doing a bouquet and you're like, oh
my god, but you realize that your cost.
Speaker 7 (33:05):
Is expensive, really expensive. I mean King Prote's are my
favorite flowers and we get them for about seven dollars.
King Proteos They're awesome. They're from like Australia, New Zealand area,
South Africa. Normally, like we have a lot of buying power,
but if you ever smaller'd be like twelve to fifteen
dollars per stem. You know so, I mean you, if
you're going to a local flower shop, it's going to
(33:25):
cost you forty five dollars a stem for it. Yeah, yeah, exactly,
better get on it.
Speaker 2 (33:30):
I know I know where to go. You do know
where to know where to go.
Speaker 7 (33:33):
Totally totally thank you so much, thank you, thanks for
having me.
Speaker 4 (33:37):
Good luck with Valentine's Day.
Speaker 7 (33:38):
Thank you.
Speaker 3 (33:38):
And then comes to Mother's Day Christina Stemball, she's founder
in CEO farm Girl Flowers. Really truly one of our
favorite interviews, So so glad you find time for us.
Hosts And Creators
Tim Stenovec
Carol Massar
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