ANNOUNCER:
FROM THE HEART OF WHERE INNOVATION, MONEY, POWER
POLITE, IN SILICON VALLEY AND BEYOND, THIS "BLOOMBERG
TECHNOLOGY" WITH EMILY CHANG. EMILY: I AM EMILY CHANG.
THIS IS "BLOOMBERG TECHNOLOGY." WITH AN ONGOING CHIP CRISIS AND
SHRINKING SUPPLY CHAIN, CAN COMPANIES KEEP UP?
WE ARE LOOKING AT THE ROLE OF CHIPMAKERS.
PLUS, HIGH-TECH DIAMONDS. WE ARE SPEAKING WITH THE CEO
AND FOUNDER OF A COMPANY USING IT TO TRADE IT.
AND THE GROWING DIGITAL DESIGN SPACE.
WE WOULD HEAR FROM THE CEO OF ONE COMPANY, ON HOW THE COMPANY
HAS GONE FROM AN OFFICE TO MAINSTREAM SUCCESS.
ALL THAT AHEAD. FIRST, LET US LOOK AT THE
MOVERS AND MARKETS TODAY. ANOTHER DAY IN THE GREEN. >> RISK ON.
S&P 500 AND THE GREEN. IT WAS NOT BIG TECH
OUTPERFORMING. ONE OF THE LAGGARDS WAS A
BIOTECH INDEX, DOING WELL EARLIER THIS WEEK.
TODAY, UNDERPERFORM. IF YOU NEEDED EVIDENCE OF A
RISK ON DAY, MONEY COMING OUT OF TREASURIES, SIX BASIS POINTS.
ALL THE ACTION WAS IN THE CRYPTO MARKET.
IT HASN'T STOPPED YET. WE START OFF WITH BLOOMBERG
REPORTING ON THE PRINT SIDE, SAYING BITCOIN IS WRONG AFTER
BLOOMBERG REPORTED THAT A GOVERNMENT AGENCY IS UNLIKELY
TO BLOCK A BITCOIN ETF. THAT IS WHY YOU'RE SEEING THE
SPIKE TODAY. COMPARE IT TO EARLIER IN 2020,
SOME PRETTY STRONG ACTION. I WANT TO TALK ABOUT ONE OF THE
NEXT PIECES OF MARKET, SHIPPING RATES.
WERE TALKING ABOUT INFLATION CONCERNS, SUPPLY CHAIN CONCERNS.
EVEN THOUGH WE HAVE HAD THIS MASSIVE RUN-UP IN SHIPPING
RATES , THEY ARE OFF THEIR PEAK. THEY ARE STILL EXTREMELY
ELEVATED. THAT WILL BE THE CONVERSATION
THAT DOMINATES THE MARKET OVER THE NEXT COUPLE WEEKS. CAROLINE:
THANK YOU. WE CONTINUE TO THINK ABOUT HOW
MUCH THE SUPPLY CHAIN WILL BE MENTIONED.
I THINK IT WAS MENTIONED MORE THAN 3000 TIMES AND ANALYST
CALLS. ONE ANALYST SAID WE HAVE NOT
MADE ENOUGH PROGRESS WHEN IT COMES TO THE CHIP SUPPLY.
I WANT TO BRING IN THIS ANALYST. GREAT TO HAVE YOU.
REALLY TRYING TO ANALYZE WHETHER ENOUGH HAS BEEN DONE,
WHAT CAN BE SEEN IN THE NEXT COUPLE OF MONTHS.
LET'S KEEP IT SHORT AND THE TIMEFRAME FOR THE HOLIDAYS.
WHAT WILL WE SEE IN TERMS OF HIGH-END GOODS, PHONES,
ELECTRONIC EQUIPMENT? >> THE HOLIDAYS WILL BE
INTERESTING. ALL THE SOLUTIONS ARE
LONGER-TERM. WE CAN OPEN THE PORTS 24 HOURS.
WE CAN TRY TO STREAM LINE AND RAISE WAGES TO GET MORE PEOPLE
FIND THE WHEELS OF TRUCKS, MOVING THE CONTAINERS ON THE
TRAINS FROM THE PORTS, BUT OVERALL THIS IS A PROBLEM,
ESPECIALLY THE CHIP-RELATED CHALLENGE, THAT WOULD TAKE
MULTIPLE YEARS, AND NOBODY WANTS TO HEAR THAT, SO USING
DIFFERENT ACTIONS. BEST BUY CAME OUT WITH A NEW
SHOPPER PROGRAM, THE EXCLUSIVE SHOPPER PROGRAM, AND THEY WANT
TO CHARGE $200 A YEAR, GIVING SHOPPERS ACCESS TO HARDER TO
GET TECHNOLOGY DEVICES, THAT THIS IS A CLEVER MOVE TO GET
HIGHER PRIORITY SHOPPERS TO SPEND MORE.
IT IS DIFFERENT THAN THE AUTOMOTIVE INDUSTRY WHERE
PEOPLE ARE LEGITIMATELY WALKING IN AND PAYING 10% TO 20% OVER
LIST PRICE JUST TO PURCHASE AN AUTOMOBILE THEY DESIRE. IT IS AN INTERESTING TIME RIGHT
NOW, BECAUSE THE HOLIDAYS ARE COMING AND IT IS UNLIKELY WILL
HAVE THIS PROBLEM SOLVED. CAROLINE:
INFLATIONARY PRESSURES, CLEAR. YOU SAY THIS ON SHORING DEBATE,
WHETHER WE SHOULD HAVE FABS IN THE U.S.
MARK GURMAN DID REPORT, IN LARGE PART BECAUSE OF U.S.
CHIPMAKERS. THEY SOURCE PARTS FROM ABROAD,
BUT IS THE ANSWER REALLY ONSHORE? >> THE ANSWER HAS TO BE TO
DIVERSIFY. OVER THE PAST 30 OR SO YEARS,
WE HAVE GONE FROM PRODUCING OVER ONE THIRD OF THE CHIPS TO
ABOUT 12% OF THE CHIPS. PROBABLY MORE ALARMING IS THE
FACT THAT IT IS ALMOST 0% OF THE LEADING EDGE IS PRODUCED IN
THE U.S. YOU HAVE SPOKEN ENDLESSLY, I'D
LISTEN TO THE LAST SEGMENT IN THE PRIOR SHOW, ABOUT A SINGLE
KINK IN THE SUPPLY CHAIN THAT CAN TAKE THE WHOLE THING DOWN.
YOU HAVE A $.50 CHIP HOLDING UP THE COMPLETION OF A VEHICLE FOR
FORD OR VOLKSWAGEN GROUP, PC NEEDING A USB BUS CONTROLLER, A
ONE DOLLAR PART, AND THEY CANNOT GET IT, SO INSTEAD OF
PUTTING PRODUCT ON THE SHELVES, IT IS COMPLETELY STOPPING
PRODUCTION, SO TO ADD CAPACITY, WE HAVE TO DE-RISK. TAIWAN IS OVER 90% OF LEADING
EDGE, KOREA HANDLING THE REST. WHAT IF SOMETHING HAPPENS?
WE CAN'T HAVE ZERO PRODUCTION HERE. I KNOW GLOBAL FOUNDRIES ARE
PLANNING FABS, BUT IT IS TWO YEARS AND 0 BILLION TO BUILD
THESE, AND IT WILL NOT INSTANTANEOUSLY FIX THINGS, THE
SUBSTRATES APART, PIECES NEEDED TO INCREASE CHIP PRODUCTION.
CAROLINE: YOU'RE TALKING ABOUT THE
INFLATION PRESSURES, GOING INTO A SHOW ROOM JUST PAYING UP.
IF WE ONSHORE, WILL COMPANIES HAVE TO PAY UP?
WILL IT BE MORE EXPENSIVE TO GET WHAT WAS ORIGINALLY $.50,
CHIP WAITING TO GO INTO IT? >> NO QUESTION.
EVEN RIGHT NOW, WE WILL HAVE TO RAISE WAGES SHORT-TERM.
THE TYPES OF WORKERS THAT GO INTO THESE FABS ARE NOT LOW-END
WORKERS. THESE ARE HIGH LEVEL PEOPLE
WELL-PAID. I SPOKE AT AN EVENT ALONGSIDE
THE IBM CEO, AND WE HAD THIS CONVERSATION.
I LISTENED TO A PERSON FROM AMD, AND OTHERS, AND THEY WERE
THROWING OUTLAID 2022, AND ONE SAID HE THINKS 2023 AND 2024
WHEN THIS CAN CONTINUE TO BE A PROBLEM, AND PART OF IT IS
GOOD, BECAUSE OF THE ONGOING DEMAND FOR DIGITAL
TRANSFORMATION FOR ENTERPRISE, SOFTWARE, AND CONSUMER GOODS,
BUT THE DEMAND WILL PUT A LOT OF PRESSURE ON BUILDING MORE
AND MORE CHIPS, AND WE WILL HAVE TO PAY, BUT IF YOU LOOK AT
WHAT IT IS COSTING NOW, BLOOMBERG PUT OUT SOME NUMBERS,
$200 BILLION IMPACT ON THE AUTOMOTIVE INDUSTRY.
YOU WOULD THINK THAT COULD BE OFFSET BY WHAT WAS LOST IN JUST
THE SINGLE EVENT, SO GOING TO EVERYTHING JUST-IN-TIME, WE
HAVE TO DE-RISK THIS, BECAUSE IT HAS CAUSES WAY TOO MUCH.
WHATEVER WE SAVE IN THE SHORT TERM, WE LOST DURING THIS
CHALLENGE OVER THE PAST TWO YEARS. CAROLINE:
IT IS INTERESTING YOU ARE TALKING ABOUT HOW BEST BUY AND
COMPANIES ARE FINDING A WAY TO BENEFIT FROM THIS, CHARGING
CUSTOMERS MORE WITH LOYALTY PROGRAMS. WHAT HAVE YOU HEARD
OF IN TERMS OF CARMAKERS WHO NEED THE CHIPS, WHAT THEY'RE
DOING TO INCENTIVE FIVE PRODUCERS TO THEM FIRST? >> THAT IS A BIG CHALLENGE. THESE FABS CANNOT JUST FLIP
FROM ONE PROCESS TO ANOTHER TO START MAKING MORE CHIPS.
IT GOES BACK TO ANOTHER PROBLEM, BUT WHEN THE PANDEMIC
WAS COMING TO AMERICA, CANCELLATIONS FOR ORDER STARTED
TO EMERGE, THEN OTHER ORDERS ROSE TO THE TOP.
DIFFERENT COMPANIES HAD A DIFFERENT ABILITY TO ANALYZE
THE MARKETS, SOME COMPANIES CANCELED, SOME SLOWED PRODUCTION, AND SOME PUT ON
MORE. TO JUST SAY WERE GOING TO PAY
MORE, IT'S PROBABLY NOT GOING TO BE ENOUGH TO EXPEDITE THE
PRODUCTION, SO AS FAR AS I SEE IT, I THINK IT IS ABOUT
CREATIVITY. WE HAVE HEARD FROM ELON MUSK.
HE THINKS HE HAS IT UNDER CONTROL.
I WOULD NOT PUT IT PAST HIM THAT HE DOES, BUT WE HAVE HEARD
FROM OTHER AUTOMAKERS THEY ARE SHUTTING DOWN PLANS AND RUNNING
INTO MAJOR CAPACITY ISSUES. CAROLINE:
WE WILL HAVE TO LOOK AHEAD TO THOSE TESLA NUMBERS AND NUMBERS
FROM INTEL NEXT WEEK. THANK YOU, DANIEL.
GREAT INSIGHTS. TUNE IN NEXT WEEK.
WE ARE LIVE, COHOSTING FROM THE PORT OF LONG BEACH, THE SUPPLY
CHAIN PAIN SPECIAL. WE WILL HAVE GUESTS FOCUSING ON SUPPLY CHAIN BACKLOGS, AND PL
IMPACT ON OTHERS. THAT'S ON BLOOMBERG TELEVISION.
AMAZON HAS APPEALED A FINE OVER THE EUROPEAN UNION'S DATA
PROTECTION RULES. THEY RULED THE COMPANY VIOLATED
THE RULES FOR USE OF PERSONAL DATA.
AMAZON DENIED THERE WAS A DATA BREACH.
COMING UP, WITH RANSOMWARE ATTACK'S ON THE RISE, ONE
PERSON SAYS THIS IS MORE IMPORTANT THAN EVER.
WE WILL SPEAK WITH THE CEO OF A COMPANY THAT HAS TRIPLED ITS
VALUATION TO $6 BILLION IN THE LATEST FUNDING ROUND.
THIS IS BLOOMBERG. ♪ CAROLINE:
2021, UNDISTORTED MARY YEAR FOR CYBERSECURITY TAX. A NEW REPORT FOUND RANSOMWARE
ATTACKS EXCEEDS THE LAST TICKET COMBINE.
OUR NEXT GUEST KNOWS A THING OR TWO.
YOU SOLD YOUR PREVIOUS SECURITY COMPANY TO MICROSOFT, NOW
BUILDING A NEW ONE WORTH $6 BILLION, NEW FUNDING ROUND.
WHAT IS THE COMPANY DOING? >> WE ARE ON A MISSION TO MAKE
THE CLOUD LESS CLOUDY. WE HELP COMPANIES WITH
EVERYTHING THE BUILDING AND RUNNING IN THE CLOUD TO MAKE IT
SECURE. THEY CAN IDENTIFY THE MOST
CRITICAL RISKS. THAT IS OUR MISSION. CAROLINE:
LESS CLOUDY, I'D LOVE THAT. TALK ABOUT THE THREAT LEVELS
YOU ARE SEEING, WHERE IS IT MOST INTENSE, HOW ARE YOU
ENSURING RANSOMWARE IS NOT PENETRATING? >> WE LOVE TALKING ABOUT THE
UNICORNS OF CYBERSECURITY. OUR COMPANY IS A GREAT EXAMPLE. FOR ANY UNICORN, THERE IS A DARK UNICORN, SO WE SEE A HUGE
RAISE. WHEN COMPANIES RUSH INTO THE
CLOUD AND YOU LOOK AT THE SECURITY IN THE CLOUD FROM THAT
IS A HUGE CAP. COMPANIES ARE FOCUSED ON THAT
AREA NOW. CAROLINE: RANSOMWARE, TERRIFYING.
TALK TO US ABOUT THE WAYS IN WHICH THOSE UNICORNS ARE BEING
BUILT, THE WAYS THEY ARE MAKING THE MONEY, BECAUSE BETTER OR
WORSE, CRYPTO HAS A BAD NAME FROM BEING EMBROILED IN
RANSOMWARE AND THE WAYS IN WHICH THEY MIGHT BE PAID, BUT
THE ADMINISTRATION HAS BEEN TRYING TO ENSURE THAT IS NOT AN
EASY WAY TO GO UNTRACKED. HOW ARE PEOPLE MANAGING TO
EXTORT? >> IT IS AN ADVANTAGE THAT
HACKERS HAVE TODAY. WE AS CYBERSECURITY COMPANY,
THAT IS WHAT WE'RE FACING. ONE OF THE MOST CHALLENGING
THINGS IS NATIONS ACTIONS. RUSSIA VERSUS BANK OF AMERICA,
THAT IS AN UNFAIR FIGHT. WE MUST FACE THAT AS A
COMMUNITY. CAROLINE: HOW DO YOU MAKE IT LESS UNFAIR,
MORE FAIR? >> I THINK WE HAVE A SOLUTION.
WE THINK IT IS ABOUT PEOPLE FIRST, THEN PROCESS.
THAT IS WHERE WE SHOULD FOCUS. WE AS A COMMUNITY WORK
TOGETHER, VENDORS AND PARTNERS, AND THE CUSTOMERS THEMSELVES,
IF WE WORK TOGETHER AS A COMMUNITY, WE CAN GET BACK IN
THE FIGHT. CAROLINE: THROUGH ETHICAL HACKERS AND THE
LIKE? >> WE ARE SUPER PROUD.
MICROSOFT JUST RELEASED THE 30 TOP RESEARCHERS IN THE WORLD.
THREE OF THEM ARE PART OF OUR FAMILY.
WE ARE PUTTING LOTS OF EFFORT INTO IT.
IT IS ABOUT WORKING WITH THE COMPANY FROM THE SIDE OF THE
HACKERS, AND HELPING THE CLOUD PROVIDERS IN THE COMPANIES
BUILD A BETTER AND SAFER CLOUD. CAROLINE: WHICH IS THE FUNDING YOU RAISE
THE 250 MILLION DOLLARS IN YOUR LATEST ROUND.
THE MONEY YOU'RE PUTTING TO WORK, WHAT WOULD IT BE FOR? >> AGAIN, THE DEMAND IS HUGE.
WE ALREADY HAVE 10% OF THE FORTUNE 500. WE ARE GROWING.
WE ARE BUILDING THE PRODUCTS, RESEARCH AND DEVELOPMENT, BUT
ALSO THE GO TO MARKETS, LOOKING ANOTHER GEOGRAPHIES LIKE INDIA.
AFTER RAISING $600 MILLION FROM THE WE HAVE THE ABILITY TO
ACQUIRE, SO GROWTH IS ON THE TABLE. CAROLINE:
GREAT TO HAVE SOME TIME WITH YOU.
GOOD LUCK ON THAT INORGANIC AND ORGANIC GROWTH.
THAT IS OUR REPORT WITH THE COFOUNDER AND CEO OF WIZ. APPLE STEPS UP ITS GAME AS IT
CHALLENGES AMAZON A GOOGLE, AND THE CONNECTED HOME MARKET.
ALL THE DETAILS. AS WE HAD TO BREAK, REMINDER
THAT TECH EARNINGS KICK OFF NEXT WEEK. NETFLIX, TUESDAY.
TESLA, IBM, WEDNESDAY. BIG ONE THURSDAY, INTEL.
WE WILL BRING YOU THE NUMBERS AND ANALYSIS AS IT HAPPENS.
THIS IS BLOOMBERG. CAROLINE: AS WE MENTIONED, TESLA
REPORTING THIRD-QUARTER NEXT WEDNESDAY.
WHILE IT ONCE WAS A CLEAR LEADER IN EV'S, THE MARKET HAS
BECOME FLOODED WITH COMPETITORS. OUR GUEST JOINS US NOW. >> FOR THE FORESEEABLE FUTURE,
DEMAND IS NOT THE PROBLEM. EVERY BATTERY MADE BE SOLD.
EVERY EV MADE AND DELIVERED AND NOT RECALLED WILL BE SOLD.
I THINK THAT THE MARKET SHARES WILL DO WHAT THEY DO.
TESLA MATHEMATICALLY HAS TO LOSE SOME SHARE WHEN YOU HAVE
SOME COMPANIES GOING ON 02 ABOVE ZERO, MATHEMATICALLY, THE
CHOICE WILL PUSH THAT DOWN. I THINK THERE IS ROOM FOR
EVERYONE TO SAY, IF WE MAKE A GOOD EV AT A REASONABLE PRICE,
OR EVEN SOME EXCLUSIVE PRICE BRACKETS, WE WILL GET IT ON THE
ROAD, BUT THAT IS JUST PART OF THE BATTLE.
TO WIN THE WAR WAS NOW THAT WE HAVE THAT INSTALLED THESE, BUT
DO WE DO WITH THAT? IT'S NOT JUST HAVING IPHONES,
IT IS THE SERVICES, THE APPS, AND ECOSYSTEMS BUILT ON TOP OF
THAT REAL ESTATE. I THINK THE COMPANIES,
INCLUDING LEGACY COMPANIES, HAVE AN OPPORTUNITY TO THINK
BEYOND THE UNIT PRICE AND TO THINK MONTHLY ACTIVE USER AND
RPU, AND HIGH-MARGIN SERVICE REVENUE. CAROLINE: INTERESTINGLY, WE HAD SOMEONE
SPEAKING ABOUT THE SUPPLY CHAIN DISRUPTION, TEMPORARY, SHE
SAYS, AND IT WOULD TAKE SOME TIME TO RESOLVE, SO MAKE OF
THAT WHAT YOU WILL, BUT TALK ABOUT THE ADMINISTRATION AND
WHETHER THEY PUT A LOT OF FOCUS BEHIND THE UNIONIZED CARMAKERS,
AND INDEED, PUSH INTO EV AND INFRASTRUCTURE SPEND, WILL THE
ADMINISTRATION SUPPORT THIS INDUSTRY? >> YES, AND I WOULD SAY A
COUPLE OF THINGS. IT IS GREAT THE U.S.
HAS WHAT IS A NATIONAL POLICY FOR RENEWABLE TRANSPORTATION.
THAT IS FANTASTIC. FOR A WHILE, IT WAS HAPHAZARD
AND UP TO THE STATES, SO IT IS GOOD WE ARE IN THE GAME,
BECAUSE WERE TALKING ABOUT NATIONAL SECURITY HERE IS?
WE -- HERE RIGHT? WE ARE GETTING OFF OIL AND
BUILDING A BATTERY ECONOMY, AND WE DON'T HAVE CONTROL OVER OUR
OWN DESTINY, AND IN THE U.S., SHAME ON US.
I AM HOPEFUL WE ARE AWARE OF THAT NOW.
AT THE SAME TIME, IT IS ULTIMATELY TECHNOLOGY.
I THINK TOO MUCH IS MADE OF GOVERNMENT POLICY AND LOOKING
TO WASHINGTON TO HELP US WHEN IT COMES TO EV'S.
IT WILL BE THE TECHNOLOGY. IT WILL BE ELON MUSK AND THOSE
THAT FOLLOW THAT MAKE THE PRICE OF ACQUISITION AND TOTAL COST
OF OWNERSHIP OF IN EV NOT SLIGHTLY BETTER THAN
OIL-POWERED CARS, BUT UNCOMFORTABLY BETTER IN EVERY
WAY. CAROLINE: THAT WAS ADAM JONAS SPEAKING TO
US EARLIER. MEANWHILE, APPLE STEPPING UP
ITS CHALLENGE TO AMAZON AND GOOGLE IN THIS PART -- SMART
SPEAKER MARKET, HIRING A NEW ENGINEER TO THE TEAM, BUT THERE
ARE TROUBLES. FOR MORE ON THIS, LET'S BRING
IN MARK GURMAN FROM LOS ANGELES, A RESIDENT APPLE
PERSON. TALK ABOUT WHAT THIS MEANS.
HOW SIGNIFICANT DO THEY NEED TO MAKE INROADS INTO THIS MARKET?
MARK: THANK YOU FOR HAVING ME. THE SMART HOME ECOSYSTEM IS A
CRITICAL BATTLEGROUND FOR THE LARGER CONSUMER ELECTRONICS
INDUSTRY. WE HAVE DISCUSSED IN THE PAST,
AND I'D LIKE TO SAY IT ONLY TAKES ONE CRACK IN THE
ECOSYSTEM FOR THE WHOLE THING TO BREAK APART, RIGHT?
IF AMAZON IS EXPOSED TO MORE APPLE CUSTOMERS ON THE ECHO
SIDE, SMART SPEAKER SIDE, FIRE TV SIDE, THEY CAN ENCOURAGE
PEOPLE TO LEAVE THE APPLE ECOSYSTEM, NOT ONLY FOR BETTER
SMART SPEAKERS, BUT OTHER PRODUCTS.
MAYBE THEY WILL BUILD ANOTHER PHONE WHAT DAY.
THE SAME GOES FOR GOOGLE. IF SOMEONE BUYS A GOOGLE
ASSISTANT OR NEST SPEAKER, THEY MADE LIKE THAT EXPENSE AND
LEARN MORE ABOUT THE GOOGLE ECOSYSTEM AND POTENTIALLY BY
THE NEW PIXEL SIX NEXT WEEK. APPLE NEEDS THE SMART SPEAKER
TO BE UP TO SNUFF OR ITS ECOSYSTEM IN ORDER TO RETAIN
THOSE USERS FOR THIS CRITICAL CATEGORY. CAROLINE:
TALK ABOUT THE ECOSYSTEM. WE KNOW THAT THROUGH REPORTING
SUCH AS YOURS. IT HAS TAKEN A HIT IN TERMS OF
SUPPLY CHAIN ISSUES. THEY ARE STILL LOOKING TO
UNVEIL NEW PRODUCTS. HOW MUCH WOULD THIS BE AN ISSUE
TRYING TO DESIGN NEW THINGS WITH SIGNIFICANT ISSUES IN THE
CHIP BACKLOG? MARK: I HAVE NOT SEEN ANYTHING LIKE
THIS IN MY YEARS COVERING APPLE. OVER THE PAST MONTH, THEY
ANNOUNCED NEW PRODUCTS, NEW APPLE WATCH, SERIES SEVEN,
WHICH I HAVE RIGHT HERE TODAY ANNOUNCED, THAT CAME OUT
EARLIER TODAY, THEY ANNOUNCED THE IPHONE 13 LAST MONTH, THE
NEW IPADS LAST MONTH. IF YOU WERE TO ORDER THOSE
DEVICES TODAY, DEPENDING ON THE CONFIGURATION YOU'RE LOOKING AT
A SHIPMENT AND DELIVERY TIMEFRAME AND ABOUT ONE MONTH
FROM NOW SO MID-NOVEMBER TO MID-DECEMBER FOR THE NEW WATCH.
ONE OF THE HIGHER END ADDITIONS, NEW ADDITIONS, SO
MACS FACING BACKLOGS AS WELL. ON MONDAY, YOU WILL SEE A NEW
MACBOOK PRO. A LOT OF PEOPLE HAVE BEEN
WAITING TO UPGRADE TO THIS MACBOOK PRO, BECAUSE THERE HAS
BEEN A LOT OF ANTICIPATION FOR A HIGH-END MACBOOK PRO WITH AN
APPLE PROCESSOR. NOW IT IS COMING TO HIM AND
PEOPLE READY TO SPEND, AND WE HAVE TO SEE IF THEY WILL HAVE
ENOUGH SUPPLY TO MEET THAT POTENTIALLY STRONG DEMAND.
CAROLINE: YOU GET AN INSIDE TRACK WHEN IT
COMES TO GETTING YOUR WATCHES EARLIER THAN SOME OTHERS.
MARK, WE THANK YOU SO MUCH FOR THE LATEST THING ON HIS LIST.
-- RISK. COMING UP, DIAMONDS ARE GOING
DIGITAL. WE SPEAK WITH THE FIRST EXCHANGE-TRADED, QUICKLY
TORY-APPROVED FUNGIBLE DIAMOND COMMODITY. YOU GOT THAT?
WE WILL DISSECT THAT AND DISCUSS HOW THEY ARE BASICALLY
PUTTING GEMS ON A BLOCKCHAIN WAS THAT MEAN IN TERMS OF
TRADING? LATER, WE SPEAK TO THE CO-CEO
OF MINTED ON HOW SHE HAS GROWN OUR COMPANY TO A DIGITAL DESIGN
EMPIRE. WE WILL GO BACK TO STANFORD AND
OUR COLLEAGUES FOR THE BLOOMBERG BUSINESSWEEK EVENT, TALKING TO PLENTY OF ALUMNI AND
THE CEO OF MINTED WILL BE JOINING US.
FROM NEW YORK, THIS IS BLOOMBERG. ♪ ♪ CAROLINE: THIS IS "BLOOMBERG TECHNOLOGY,"
I'M CAROLINE HYDE IN NEW YORK. LET'S GET BACK TO THE MARKET.
KRITI: USE DAY WHEN IT COMES TO
CRYPTOCURRENCY AND BITCOIN. THE FTC NOW SAYS IT WILL GET IN
THE WAY OF A POTENTIAL BITCOIN ETF FUTURES.
TAKE A LOOK AT WHAT IT DID TO THE BITCOIN CURVE, THIS SHOWS
THE PREMIUM OVER THE SPOT PRICE. IT WORKS DIFFERENTLY IN BITCOIN.
IN OIL, WE TALK ABOUT OIL PRICES AND THE SPOT PRICE IS
HIGHER THAN THE FUTURES PRICE BECAUSE PEOPLE NEED OIL RIGHT
NOW. BITCOIN WORKS DIFFERENTLY BECAUSE OF INBUILT EXPECTATION
THAT THE FUTURES PRICE IS GOING TO BE HIGHER ANYWAY.
THAT IS WHAT YOU'RE SEEING HERE, THE FUTURE PREMIUM HIGHER
RELATIVE TO THE SPOT PRICE. WHILE WE ARE TALKING ABOUT
ETF'S, PROSHARES SIGNALING BITCOIN FUTURES ETF COULD
LAUNCH AS SOON AS MONDAY. IT LOOKS AT LEAST FOR NOW THE
SEC IS TAKING A STEP BACK AND NOT TRYING TO GET THE WAY.
LET'S SEE ON MONDAY. TODAY IN THE MARKET, BAD NEWS
SHOWED UP IN A LOT OF CRYPTOCURRENCIES, INCLUDING
RIOT, COINBASE, SQUARE. AFTER HOURS YOU HAD JACK DORSEY
TWEET THE SQUARE MIGHT GET INVOLVED WITH CREATING A
BITCOIN MINING NETWORK. SQUARE SHARES TRADED HIGHER
AFTER HOURS ALMOST 3% BEFORE PARING GAINS.
THE BIGGEST STOCK WITH THE MOST EXPOSURE TO CRYPTO IS MICRO
STRATEGY, DAVE WILSON POINTING THIS OUT, MICROSTRATEGY HAS A
MASSIVE INVESTMENT IN BITCOIN. IT TURNS OUT THE GAINS THEY
MADE ON THE INVESTMENT TOOK ALMOST 50% OF THE COMPANY
MARKET VALUE. BITCOIN FUTURES, MICROSTRATEGY,
ONE STOCK YOU MIGHT WANT TO KEEP AN EYE ON. CAROLINE:
THANK YOU, AND THANK YOU FOR THAT BREAKING NEWS.
WE ARE GOING TO TALK ABOUT CRYPTO AND THE BLOCKCHAIN THAT
UNDERLIES IT BECAUSE WE ARE STARTING TO SEE BLOCKCHAIN USED
THE TRADE DIAMONDS. CAN YOU TRADE DIAMONDS AS AN
ACTUAL COMMODITY? THAT IS WHAT THE BERMUDA-BASED
DIAMOND STANDARD IS LOOKING TO DO. IT IS THE FIRST EXCHANGE
TRADED, REGULATOR APPROVED FUNGIBLE COMMODITY, AND IT IS
OFFERING FUTURES CONTRACTS AND HOPEFULLY AN ETF ON THE NEW
YORK STOCK EXCHANGE. WE TURN TO THE FOUNDER AND CEO
OF DIAMOND STANDARDS. WHERE TO START?
SO MUCH NEWS, YOU ARE RAISING MONEY, JUST COMING OFF NEWS
ABOUT CRYPTO, BIT CARBON, WHAT DOES IT DO? >> BIT CARBON IS A SIGNIFICANT
BREAKTHROUGH IN THE WORLD OF CRYPTOCURRENCIES.
IT IS BASED ON THE FIRST BLOCKCHAIN NATIVE COMMODITY,
THE DIAMOND STANDARD POINT. THAT CURRENCY CAN BE USED JUST
LIKE IT GOING, BUT HAS A REAL ASSET BEHIND IT AND AS SUCH IS
BASICALLY MACRO HEDGED, THAT AS A REAL ASSET, IT IS HEDGED
AGAINST INFLATION. CAROLINE: WHY DO YOU NEED IT TRADED ON
BLOCKCHAIN? CORMAC: TO PROVE THE COMMODITY IS FAIR
AND FUNGIBLE, WE NEED TO STORE THE PROFIT ON'S OF THE DATE OF
THE DIAMONDS IN A PUBLIC FORMAT. CAROLINE:
WHAT IS INTERESTING IS THAT PEOPLE USUALLY USE DIAMONDS AS
A COMMODITY BECAUSE THEY ARE NOT ALL EXACT, NOT EXACTLY THE
SAME AND IT IS HARD TO COMMODITIZE THEM, BUT YOU HAVE
FOUND A WAY TO DO THAT. CORMAC: THAT IS EXACTLY RIGHT.
WE HAVE BUILT THE WORLD'S FIRST FUNGIBLE DIAMOND COMMODITY.
THIS IS WHAT IT LOOKS LIKE. THESE ARE DIAMOND STANDARD
COINS. AND THE BREAKTHROUGH IS THAT
EACH COIN CONTAINS A REGULATOR-APPROVED EQUIVALENT
GROUPING OF DIAMONDS, WHICH MEANS THEY HAVE THE EXACT SAME
VALUE. AND THIS COMMODITY HAS BEEN
APPROVED ALREADY TO ASSET-BACKED FUTURES ON THE
CME, FOR EXAMPLE, AND INSIDE EACH COIN IS A WIRELESS
COMPUTER CHIP THAT STORES A BLOCKCHAIN TOKEN.
SO WHILE THIS COMMODITY SITS IN A VAULT, YOU AND I CAN TRADE
THE TOKEN INSTANTLY, ELECTRONICALLY AND GLOBALLY.
TIM: HOW HARD -- CAROLINE: HOW HARD
IS IT TO GET CHIPS AT THE MOMENT? CORMAC: WE HAVE HAD A HARD TIME GETTING
CHIPS, BUT WE HAVE REDUCED TENS OF THOUSANDS, SO WE HAVE A
SUPPLY. AND DIAMONDS AREN'T SUBJECT TO
THE SAME SUPPLY CHAIN PROBLEMS AS CHIPS, FOR EXAMPLE, BECAUSE
WE SHIP OUR DIAMONDS BY AIR. CAROLINE: OK, AIR CARGO.
I AM INTERESTED IN WHEN YOU ARE LOOKING AT THE AMOUNT YOU ARE
GOINGING, -- THE AMOUNT YOU ARE COINGING, ARE YOU MAKING A
LIMITED SUPPLY? CORMAC: DIAMONDS ARE LIMITED COMMODITY. THE ABOVEGROUND VALUE IS .2
TRILLION, BUT DIAMONDS COULD NEVER BE USED BY INVESTORS
BECAUSE YOU COULD NEVER MARK THEM TO MARKET.
THEY WERE ALL DIFFERENT. WHAT WE SAW IS HOW TO MAKE
DIAMONDS THE SAME THROUGH A REGULATOR-APPROVED FUNGIBLE
COMMODITY AND NOW, WE BELIEVE THAT INVESTORS WILL FOR THE
FIRST TIME BE ABLE TO ACQUIRE DIAMONDS AS A STORE OF WEALTH,
A HEDGE OR A SPECULATIVE INVESTMENT, AND THAT DIAMONDS
WILL CATCH UP WITH PALLADIUM, FOR EXAMPLE.
AND INVESTORS OWN 50% OF ALL THE WORLD'S PALLADIUM. CAROLINE:
IS THERE ANY RISK DIAMONDS GO DOWN IN VALUE?
PEOPLE ARE NOW ABLE TO BUILD DIAMONDS TO A CERTAIN DEGREE.
CORMAC: CERTAINLY. WE ONLY USE NATURAL DIAMONDS
AND IF YOU LOOK AT THE LAST 17 YEARS OF RETURNS, DIAMONDS HAVE
BEEN FLAT BECAUSE THEY ARE AT AN EQUILIBRIUM.
THE SUPPLY EQUALS THE DEMAND. WE ARE NOW INTRODUCING
TREMENDOUS NEW DEMAND FROM INSTITUTIONAL INVESTORS FOR
DIAMONDS. CAROLINE: HOW DO YOU MEASURE TREMENDOUS?
CAN YOU TELL US ABOUT DEMAND? CORMAC:
OUR CURRENT OFFERING IS 650 MILLION AND TOTAL PRODUCTION OF
DIAMONDS PER YEAR IS 20 BILLION TO 30 BILLION, SAID THAT IS A
SIGNIFICANT SLICE FOR FIRST YEAR FOR NEW COMMODITY.
CAROLINE: I KNOW YOU ARE ANNOUNCING THIS
NOW, BUT HAVE INSTITUTIONAL INVESTORS BEEN WARM TO IT?
CORMAC: ABSOLUTELY. WE A ALREADY HAVE THE PARTNERS
FOR THE ETF WHICH WILL BE LAUNCHING ON THE NEW YORK STOCK
EXCHANGE. CAROLINE: WHY DO AN ETF? CORMAC:
TO MAKE IT ACCESSIBLE TO CONSUMERS.
CONSUMERS MIGHT HELP WANT TO HOLD COMMODITIES AND PUTTING IT
INTO AN ETF, WE MAKE IT MORE ACCESSIBLE. CAROLINE: WHERE? YOU HAVE ALSO GOT BIT CARBON AS
THIS RECTO STABLE GOING, I GUESS TECHNICALLY, THE ETF.
WHAT IS YOUR HOPE? CORMAC: WE ENTERED AN AGREEMENT WITH A
FIRM CALLED HORIZON KINETICS, A $7 BILLION OR SO HEDGE FUND.
THEY OPERATE THE BEST-PERFORMING MUTUAL FUNDS
THIS YEAR ACCORDING TO MORNINGSTAR.
AND WITH THEM, WE ARE LAUNCHING A TRUST PRODUCT THAT WILL BE
LISTED ON THE OTC MARKETS SYSTEM.
AND THAT WILL BE THE FIRST TRUST, THE FIRST NOT QUITE ETF,
BUT FOR ACCREDITED INVESTORS, A FUND THAT THEY CAN INVEST IN
AND FOR THAT, WE HAVE $50 MILLION COMMITTED. CAROLINE: CORMAC KINNEY, DIAMOND STANDARD
FOUNDER AND CEO, USED TO RUN MONEY FOR THE LIKES OF
MILLENNIUM, THANK YOU SO MUCH. WE TAKE YOU LIVE NEXT TO
STANFORD, AND HEAR FROM ONE OF THEIR FRAGILE ITS, THE FOUNDER
AND CEO OF THE ONLINE MARKETPLACE MINTED.
THIS IS BLOOMBERG. ♪ ♪ CAROL: WE ARE BACK ON "BLOOMBERG
TECHNOLOGY," CAROL MASSAR WITH TIM STENOVEC
ON LOCATION AT THE STANFORD GRADUATE SCHOOL OF BUSINESS.
WE ARE GOING TO BRING IN AN ALUM WHO GOT HER MBA HERE IN
1998. MARIAM NAFICY IS THE FOUNDER
AND CEO OF MINTED. WHAT IS IT LIKE TO BE BACK ON
CAMPUS? MARIAM: IT IS A DELIGHT AND WALK DOWN
MEMORY LANE. IN 1998, I WAS STARTING I FIRST
BUSINESS HERE ON CAMPUS. I WAS WORKING ON MY CLASSES ON
THE SIDE AND HAD A BUSINESS PLAN. MANY OF THE PEOPLE YOU SEE
AROUND YOU ARE PROBABLY DOING THE SAME THING. CAROLINE:
I WAS TALKING TO ONE OF THE CURRENT STUDENTS AND ASKED WHAT
SHE WAS DOING THIS SUMMER FOR AN INTERNSHIP AND SHE SAID I AM
WORKING ON A BUSINESS ALREADY. CAROL:
LET'S TALK ABOUT YOUR BUSINESS. YOU CONTINUE TO EXPAND.
WHAT GUIDES YOU IN TERMS OF YOUR CHOICES?
YOU HAVE GET DIGITAL ART, YOU HAVE GOT INVITATIONS, YOUR
WEDDING BUSINESS IS A BIG ONE. YOU ARE MOVING INTO FURNITURE,
JUST DEBUTED A LINE THIS SUMMER WITH WEST ELM. WHAT GUIDES YOU?
MARIAM: THE FUNDAMENTAL THREAD THROUGH
ALL THESE BUSINESSES IS THIS IDEA THAT GREAT TALENT CAN COME
FROM ANYWHERE, GREAT IDEAS CAN COME FROM ANYWHERE.
WHAT WE ARE TRYING TO DO IS BRING GREAT INDEPENDENCE,
UNIQUE ART AND DESIGN, TO PEOPLE EVERYWHERE AND EMPOWER
ARTISTS AROUND THE GLOBE TO PUT THEIR HAT IN THE RING AND BUILD
BUSINESSES OFF OUR PLATFORM, REGARDLESS OF WHERE THEY WERE
EDUCATED, WHERE THEY ARE FROM, WHETHER THEY HAVE CONNECTIONS
TO GET INTO BUSINESS. THIS HELPS ANYONE BE PART OF A
MARKETPLACE. TIM: WHAT ARE YOU FINDING IS THE
BEST WAY TO COMMUNICATE WHAT YOU ARE DOING?
I THINK A LOT OF PEOPLE KNOW MINTED FOR INVITATIONS.
FULL DISCLOSURE, IT IS WHAT MY WIFE AND I USED FOR OUR WEDDING
AND I THINK PEOPLE KNOW IT FOR HOLIDAY CARDS, BUT HOW DO YOU
COMMIT TO GET YOU ARE DOING FURNITURE AS WELL? MARIAM:
RIGHT QUESTION. WE ARE TARGETING NICHE
AUDIENCES THROUGH MARTINIQUE MARKETING.
WE ARE MARKETING TO DIFFERENT AUDIENCES.
I THINK ALSO, YOU WILL SEE MORE BRENT-BUILDING CAMPAIGNS FROM
US AT THE HIGHER LEVELS THIS CHRISTMAS SEASON, WHERE WE ARE
FOCUSING ON THE ARTIST AS A COMMON THREAD THROUGH ALL THESE
BUSINESSES, SO THAT PEOPLE UNDERSTAND IT IS REALLY ABOUT
AN ARTISTS' MARKETPLACE AND COMMUNITY THAT IS PARTICIPATING
ACROSS TEXTILES, PAPER, FURNITURE, WALL ART, MANY
DIFFERENT GOODS, BUT CENTERING IT AROUND THE ARTISTS' STORY
AND THEIR JOURNEY. YOU WILL SEE THAT SOON. CAROL:
YOU ARE GREAT ABOUT HIGHLIGHTING OTHER PEOPLE'S
JOURNEYS, BUT WHAT ABOUT YOUR JOURNEY HERE?
YOU DIDN'T GET ACCEPTED THE FIRST TIME, BUT CAME BACK THE
NEXT YEAR. HOW DID THAT HAPPEN? MARIAM:
I THINK IT IS THIS IDEA OF BEING PERSISTENT ON FIGHTING
FOR WHAT YOUR DREAM IS. I HAD TO COME TO STANFORD
KNOWING I WANTED TO BE AN ENTREPRENEUR.
I CAME TO CALIFORNIA IN 1993 AFTER GRADUATING COLLEGE. I SPENT TIME IN INVESTMENT
BANKING AND CONSULTING AND NEW I WANTED TO CARVE MY OWN PATH.
I THOUGHT IF I HAD GONE THE CORPORATE ROUTE, I WASN'T SURE
IF THAT WAS A GOOD FIT FOR ME, OR IF I WASN'T GIVEN ENOUGH
RESPONSIBILITY THAT IN MY 26-YEAR-OLD MIND THOUGHT I
MAYBE DESERVED. I REALLY FELT -- I AM AN
IMMIGRANT TO THE U.S., I FELT LIKE THIS IS REALLY A COUNTRY
OF GREAT OPPORTUNITY AND THAT THE AMERICAN CONSUMER WOULD BE
THE ULTIMATE JUDGE OF MARRIAGE, THAT THEY WOULDN'T REALLY CARE
NECESSARILY WHO AIDED THE PRODUCT.
IF THEY LIKED THE PRODUCT, THEY WOULD BUY THE PRODUCT, SO I WAS
MOTIVATED AROUND ENTREPRENEURSHIP AS A WAY TO
CREATE THE WORLD I WANTED TO LIVE IN AND THE PRODUCTS I
WANTED TO SEE. TIM: YOU THINK THAT IS STILL THE
CASE ABOUT THE AMERICAN CONSUMER? MARIAM: I DO THINK SO.
WE HAVE A HUGE PETRI DISH OF CONSUMERS THAT CAN TEST YOUR
PRODUCT AND BUY YOUR PRODUCT AND THAT IS WHY WE ARE SO GOOD
AT PRODUCT DEVELOPMENT AND MARKETING, BECAUSE WE HAVE A
GREAT PETRI DISH. THAT IS EXACTLY WHAT HAPPENED.
THAT IS WHY I WANTED TO PURSUE HER ENTREPRENEURSHIP -- PURSUE
ENTREPRENEURSHIP AND COME TO STANFORD. CAROL:
WHAT IS THE ENDGAME? IT IS A BLOOMBERG QUESTION.
IT HAS GOT TO BE NICE SEEING PRIVATE EQUITY INVESTORS
INVOLVED, BUT IS THE ULTIMATE GOAL TO BE A PUBLIC COMPANY?
HOW DO YOU THINK ABOUT IT, BECAUSE THERE ARE OPTIONS TODAY.
IT USED TO BE THERE WAS A DIRECT PATH, YOU STATED PRIVATE
FOR A LONG TIME TO GET THE PUBLIC MARKETS.
IT DOESN'T HAVE TO BE THAT WAY. THERE'S CASH OUT THERE WITH THE
INVESTOR SUPPORT TO KEEP IT IS THIS YEARS. MARIAM:
WE ARE ALWAYS TRY TO KEEP ALL OPTIONS OPEN, BUT IT IS AN
INDEPENDENT COMPANY IN THE SENSE THAT OUR ARTISTS ARE
INDEPENDENT, TOO. PEOPLE CAN COME GOING I THINK
CAPTURING THAT COMMUNITY INSIDE ANOTHER COMPANY WOULD BE FORCED
AND KIND OF STRANGE, PROBABLY. SO, I THINK OF OURSELVES AS
INDEPENDENT BUSINESS WE ARE BUILDING AND WE CAN CONTINUE
PRIVATE FINANCING OR GO PUBLIC. WE ARE JUST PREPARING FOR BOTH
HAS, -- BOTH PATHS. WE KEEP OURSELVES PREPARED FOR
BOTH. CAROLINE: YOU HAVEN'T -- TIM: YOU HAVEN'T
RAISED MONEY SINCE 2018, BUT YOU ARE CASH POSITIVE.
WHAT CAN YOU SHARE WITH US? MARIAM:
I CAN SHARE THAT WE HAVE 700 SEVERAL HUNDRED MILLION DOLLARS
IN SALES. WE ARE CASH FLOW POSITIVE, ARE
GROWING RAPIDLY AND HAVE NOT EVEN GOTTEN TO TOP OUR
INTERNATIONAL MARKETS IN TERMS OF CONSUMER MARKETING AND SALES.
SO COME I THINK THERE IS A LOT OF ROOM TO GROW. TIM:
IS THAT PART OF IT -- CAROL: IS THAT PART OF IT COME
INTERNATIONAL GROWTH? MARIAM: YEAH, OUR COMMUNITY IS IN 100
COUNTRIES. OUR 100TH COUNTRY WAS KENYA.
WE ARE REACHING EVERY PART OF THE GLOBE IN TERMS OF SOURCING.
SO IT MAKES SENSE IF WE ARE SOURCING ALL THESE DIFFERENT
SIGNS AND AS THE NEXT COME AWAY NOT PROVIDE THOSE PRODUCTS TO
PEOPLE LOCALLY AS WELL? IT MAKES A LOT OF SENSE.
YOU COULD SHOP IN SWEDEN OR FRANCE AND HAVE A COMPLETELY
DIFFERENT LOOK TO THE SERVICE. CAROLINE:
TELE SITE -- TIM: TELL US HOW YOU MADE IT THROUGH THE
PANDEMIC WHEN THE WEDDING SEASON DRIED UP? MARIAM: THIS IS THE TYPE OF THING WHERE
I THINK STANDARD AND GETTING A GREAT EDUCATION ON FRAMEWORKS
AND HOW TO LEARN MORE WEEKLY, I THINK STANFORD AND THE GSP
TEACH YOU HOW TO LEARN. YOU LEARN HOW TO LEARN, AND YOU
LEARN HOW TO LEARN REALLY QUICKLY.
THE PANDEMIC WAS A GREAT EXAMPLE WHERE THINGS WERE
CHANGING BY THE DAY AND YOU HAD TO REFORMULATE YOUR STRATEGIES,
YOUR EMPLOYEE BASE, YOUR COMMERCIAL ACTIVITIES, BY THE
DAY, AND WHAT PREPARES YOU FOR THAT? I WOULD SAY WE DID HAVE TO
QUICKLY CUT THE EXPENDITURES, WE ENDED UP CASH-FLOW POSITIVE
ANYWAY FOR THE YEAR, AND WE DID FOCUS ON DIFFERENT ROD OKTA
LINES WITHOUT PEOPLE WOULD FIND POPULAR AT HOME, THAT HAS BEEN
BOOMING. TIM: WEDDINGS -- CAROL: WEDDINGS ARE
BACK? MARIAM: WEDDINGS ARE BACK. CAROL: THANK YOU, GOOD LUCK, MARIAM
NAFICY, COFOUNDER -- FOUNDER AND CODE CEO OF MINTED.
CAROLINE: RETAIL SALES INCREASED IN
SEPTEMBER. CORONAVIRUS INFECTIONS ROSE IN
AUGUST AND SEPTEMBER, CURBING DEMAND ON TRAVEL AND
ENTERTAINMENT. IT WAS THE WORST SEPTEMBER FOR
AUTO SALES IN EUROPE SINCE 1990 FIVE.
NEW CAR REGISTRATIONS PLUNGED WHEN HE 5% TO LESS THAN 973,000.
THAT PUT THE INDUSTRY ON TACK -- CONTRACT -- PUT THE INDUSTRY
ON TRACK TO DO EVEN WORSE THAN LAST YEAR'S DISASTROUS SHOWING.
COMING UP, PLANS TO EXPAND MOBILE SERVICES TO PEOPLE INTO
EMERGING MARKETS. IN SPECIAL COVERAGE OF THE
MILKEN GLOBAL CONFERENCE IN AND LAY NEXT WEEK, -- IN L.A.
NEXT WEEK, KICKING OFF MONDAY. WE WILL ALSO SPEAK TO DAN
MARKLEY, THE CEO. YOU DON'T WANT TO MISS IT.
THIS IS BLOOMBERG. ♪ CAROLINE: LET'S LOOK AT A LARGE NUMBER --
3 BILLION, THE NUMBER OF PEOPLE AROUND THE WORLD WHO ARE
FINANCIALLY UNDERSERVED. ONE COMPANY HOPING TO ALLEVIATE THIS AND BRIDGE THE DIVIDE IS A
FINTECH PLATFORM AIMED AT MAKING FINANCIAL SERVICES MORE
ACCESSIBLE AND EMERGING MARKETS UNJUST RAISED 45 MILLION.
EARLIER, I GOT TO MEET WITH THE FOUNDER AND CEO. THEY MET WITH MY COLLEAGUES.
TAKE A LISTEN. >> THIS NEW FUNDING ROUND FOR
US GIVES US MUSCLE TO REALLY BE ABLE TO ACCELERATE IN TERMS OF
DELIVERING REAL VALUE TO OUR CUSTOMERS. WHAT WE HAVE INTERNALLY IS
ABOUT ENABLING FINANCIAL AGENCIES FOR $3 BILLION -- 3
BILLION PEOPLE GLOBALLY WHO ARE UNDERSERVED.
WE ARE LOOKING TO ENSURE CUSTOMERS CAN SAVE, PROTECT
THEIR MONEY, GROW THEIR MONEY AND USE THEIR MONEY. >> CAN YOU TALK ABOUT HOW YOU
ENSURE THAT? PART OF WHAT GOES INTO THAT IS
DATA YOU COLLECT. HOW ARE YOU ENSURING THESE
CONSUMERS ARE CREDITWORTHY AND NOT TAKING UP MORE CREDIT THAN
THEY NEED TO BE? >> WE ARE ALWAYS VERY
RESPONSIBLE. WE TRY TO ENSURE WE ARE
FOCUSING ON HEALTHY BORROWING. SO, WE ARE ALWAYS THINKING
ABOUT THE INDIVIDUAL'S FINANCES, THEIR CAPACITY AND
THEIR LIKELIHOOD TO REPAY. THE FACTORS WE ARE RUNNING
ALLOW US TO UNDERSTAND THEIR CONSISTENCY, THEIR EMPLOYMENT
HISTORY, AND THERE RATES HISTORICALLY WITH US.
WE WANT TO UNDERSTAND HOW THE INDIVIDUAL IS USING CREDIT IN
THEIR FINANCIAL LIFE. WE ARE FOCUSING ON GOING YONDER
CREDIT AND FOCUSING ON THE MARRIAGE BETWEEN SAVINGS AND
PAYMENTS. >> EXPAND ON THAT IDEA FOR US.
WHEN YOU TALK ABOUT MARRYING THE SAVINGS ASPECTS AND OTHER
ASPECTS OF FINANCE, WHAT I HEAR IS A BANK.
IS THIS DIFFERENT BANK? DO YOU PROVIDE SOMETHING TO
THESE FOLKS THAT IS NOT ONLY DIFFERENTIATED IN TERMS OF WHAT
THEY ARE ABLE TO GET OUT OF IT, BUT ALSO WITH REGARDS TO
REGULATORY AND CROSS-BORDER ISSUES? >> THE WAY WE ARE THINKING
ABOUT THIS IS, IT IS MORE THAT WE ARE PARTNERING WITH EXISTING
FINANCIAL INSTITUTIONS. WHAT TALA HAS BEEN ABLE TO DO
FOR OVER 60 YEARS IS BUILD OUT A GLOBAL PLATFORM SO WE CAN
DELIVER CUSTOMIZED FINANCIAL PRODUCTS TO MEET THE NEEDS OF
THE UNDERSERVED. IN THAT SENSE, OUR EXPERTISE IS
UNDERSTANDING THE FINANCIAL LIVES OF THESE CUSTOMERS,
TAKING THOSE INSIGHTS AND THEN BUILDING THAT INTO OUR
PLATFORM, SO THINKING ABOUT HOW WE VERIFY IDENTITIES.
MOCHE EMERGING MARKETS DON'T HAVE NATIONAL I.D.
SYSTEMS, SO FINANCIAL INSTITUTIONS CAN'T SERVE THEM.
WE ARE THINKING ABOUT HOW WE ACTUALLY DELIVER THE CREDIT FOR
A DECK'S TO THEM -- DELIVER THE CREDIT PRODUCTS TO THEM, SO WE
HAVE INTEGRATED MULTIPLE PAYMENT LIGHT-YEARS.
WE FOCUS ON TECHNOLOGY AND PRODUCT EXPERIENCE ON OUR SIDE
COMMAND THE CUSTOMER KNOWLEDGE, AND WE PARTNER WITH OTHERS FOR
THE REGULATORY AND LICENSING SIDE. CAROLINE:
HOW HAVE YOU GOTTEN INTO ALL OF THIS YOURSELF? 6 BILLION CUSTOMERS OVER SIX
YEARS, WHAT MADE YOU SEE THAT KENYA AND TONS INDIA WERE BEING
UNDERSERVED -- KENYA AND TANZANIA WERE BEING UNDERSERVED?
SHIVANI: I BECAME OBSESSED WITH THE IDEA
THAT THERE ARE BILLIONS OF INDIVIDUALS THAT ARE UNABLE TO
ACCESS THE FORMAL FINANCIAL SYSTEM, AND THAT THERE IS
PURCHASING POWER THAT IS CURRENTLY LOCKED UP.
SO, THAT POTENTIAL ISN'T BEING SEEN BY THE MARKETPLACE. ON MY SIDE, I SAW THAT WHEN I
HAD THE OPPORTUNITY TO WORK AT THE YUAN POPULATION FUND.
I WORKED ACROSS NINE COUNTRIES ACROSS WEST AFRICA, SUB-SAHARAN
AFRICA AND INDIA AND GOT TO UNDERSTAND AT THE MICRO LEVEL
WHAT ARE THE FINANCIAL DECISIONS THAT INDIVIDUALS MAKE
AROUND THEIR MONEY, TO THINK ABOUT HARD MONEY VERSUS SOFT
MONEY, HOW DO THEY THINK ABOUT WHAT GOES INTO WORKING CAPITAL
AND WHICH BILLS TO PRIORITIZE? AND BY SEEING ALL THOSE MICRO
DECISIONS, I COULD SEE THERE WAS DAILY LIFE DATA WE COULD
ACTUALLY USE TO BRING INTO OUR UNDERWRITING MODELS.
IT WAS I HYPOTHESIS AT THE TIME, BUT A CHANCE I FELT
NEEDED TO BE TAKEN -- IT WAS A HYPOTHESIS AT THE TIME, BUT A
CHANCE I FELT NEEDED TO BE TAKEN TO DEVELOP THIS ON A
GLOBAL SCALE. AND WE HAVE REALLY PROVEN OUR
CREDIT MODELS CAN WORK GLOBALLY. CAROLINE:
THE TALA FOUNDER AND CEO. THAT DOES IT FOR THIS EDITION
