'Bloomberg Technology' Full Show (10/15/2021)

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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
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Channel: Bloomberg Technology
Views: 27,926
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Length: 45min 50sec (2750 seconds)
Published: Mon Oct 18 2021
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