Latest / Bloomberg Intelligence / $69 Million Art Auction Is Just The Beginning For NFTs

Transcript

$69 Million Art Auction Is Just The Beginning For NFTs · Bloomberg Intelligence

• 0:00
  Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
• 0:04
  Speaker 1: my co host Matt Miller. Every business day, we bring
• 0:06
  Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
• 0:11
  Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
• 0:15
  Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
• 0:18
  Speaker 1: at Bloomberg dot com slash podcast. All right, there is
• 0:22
  Speaker 1: no way for me too politely, UM express my reaction
• 0:29
  Speaker 1: to the non fungible token auction news that we got yesterday.
• 0:34
  Speaker 1: I mean, I think most people when they saw this
• 0:37
  Speaker 1: headline n f T SAIDs digital art record in sixty
• 0:41
  Speaker 1: nine million dollar sale. Um, most people have been shocked.
• 0:46
  Speaker 1: And everybody I've spoken to, granted they've all been over
• 0:50
  Speaker 1: the age of nineteen, has had trouble explaining it. So
• 0:53
  Speaker 1: we're gonna bring in John Louise, president of Ava Labs,
• 0:56
  Speaker 1: and may be able to better to help us better
• 1:00
  Speaker 1: understand what happened yesterday. Um, when someone agreed to pay
• 1:05
  Speaker 1: sixty nine million dollars for a piece of digital code
• 1:10
  Speaker 1: somehow attached to artwork. John, Uh, please give it a shot. Hey, Paul,
• 1:18
  Speaker 1: Hey Matt, thank you for having me and Paul's nice
• 1:20
  Speaker 1: to talk. It's been many years since I was on
• 1:22
  Speaker 1: the by side as a techi media industor and you're
• 1:24
  Speaker 1: on the shell side, So I thank yeah. So I
• 1:28
  Speaker 1: think it was fantastic. First of all, how cool was
• 1:31
  Speaker 1: it to watch the artist's live stream or and watch
• 1:34
  Speaker 1: it later on on YouTube and streamed the actual auction.
• 1:36
  Speaker 1: You got to see how they were. They went from
• 1:39
  Speaker 1: three to fourteen, then you have some big jumps to
• 1:41
  Speaker 1: fifty and then straight to sixty nine. That was just incredible.
• 1:44
  Speaker 1: So I think, you know, what happened yesterday is really
• 1:47
  Speaker 1: a function of not how not just how much people
• 1:51
  Speaker 1: appreciate people's art, which is fantastic. His previous piece sold
• 1:55
  Speaker 1: Little Ways Back for six million, so he's a fantastic artist.
• 1:58
  Speaker 1: But it's also uh enthusiasm for the whole space because
• 2:03
  Speaker 1: a lot of people now thinking what n F keys
• 2:06
  Speaker 1: can be and what they will do the end. Let's
• 2:08
  Speaker 1: start with that. Let's start with what it is John,
• 2:11
  Speaker 1: because I think people's art is pretty cool too. But
• 2:14
  Speaker 1: what was it that son bought? Okay, so he bought
• 2:22
  Speaker 1: basically an Offlencible token, which is basically a unique digital
• 2:25
  Speaker 1: representation of that and he actually had the only one
• 2:30
  Speaker 1: of that representation. But it's a line of code. But
• 2:36
  Speaker 1: I mean think about it though, the whole space, So
• 2:40
  Speaker 1: that art is fantastic, but the whole space is interested
• 2:43
  Speaker 1: in this area because business models are going to change. Um.
• 2:49
  Speaker 1: The collectible side of this is exploding. Also because the
• 2:53
  Speaker 1: code enables place discovery better. What I mean by that
• 2:57
  Speaker 1: is because it's cold code, because so it's frictionless. Suddenly
• 3:01
  Speaker 1: you don't have to have paperwork and paperwork upon paperwork.
• 3:04
  Speaker 1: It's digital, and then you have global asset access, giving
• 3:09
  Speaker 1: more people around the world to participate in these things,
• 3:13
  Speaker 1: and that leads to the better price discovery. I just
• 3:15
  Speaker 1: talked about participating watching it on YouTube. I was fortunate
• 3:19
  Speaker 1: enough as an investor together to go say, I saw
• 3:21
  Speaker 1: that Visa competitors to Christie's and watch how these auctions
• 3:24
  Speaker 1: were done. Suddenly everyone can participate and watch it and
• 3:27
  Speaker 1: see how this was done through the uh oh no,
• 3:34
  Speaker 1: oh no, we lost John, did we? And in an
• 3:38
  Speaker 1: age where you can pay sixty nine million dollars for
• 3:41
  Speaker 1: a line of code, we can't get phone lines to
• 3:44
  Speaker 1: stay good exactly. I mean, I agree with you, Matt.
• 3:47
  Speaker 1: I I found it is fascinating I'm trying to get
• 3:49
  Speaker 1: I'm still trying to get my head around n f
• 3:50
  Speaker 1: t S and fortunately there's a Bloomberg quick take there
• 3:53
  Speaker 1: that that really further my education. But you know, I
• 3:57
  Speaker 1: guess it's just a question of simply, uh you authenticating
• 4:01
  Speaker 1: these things, John, Do we have you back? Yes? I'm back? Sorry,
• 4:04
  Speaker 1: all right? John? So yeah, go ahead. So I don't
• 4:06
  Speaker 1: know where I left off, but you know, I was
• 4:08
  Speaker 1: saying I'm very excited about n f t S in
• 4:10
  Speaker 1: general and all these artists using it because business models
• 4:13
  Speaker 1: can change. And what I mean by that is there
• 4:16
  Speaker 1: are there are other rock bands, groups, events, stuff, people
• 4:21
  Speaker 1: all calling us to help them create n f t s.
• 4:24
  Speaker 1: So right now, ticketing, I mean the QR code is
• 4:27
  Speaker 1: actually fraud with fraud. UM artists now can actually program
• 4:33
  Speaker 1: secondary sales and get a percentage of the sales like
• 4:37
  Speaker 1: they couldn't before. So it's almost like a friend star
• 4:40
  Speaker 1: getting royalties. Tell us. So, I'm president of Ava Labs.
• 4:46
  Speaker 1: We are a blockchain, the next generation blockchain that provides
• 4:49
  Speaker 1: the scale and speed to enable transactions like yesterday's UM
• 4:54
  Speaker 1: sail in and what does and what does Justin Son?
• 4:57
  Speaker 1: So Justin Son is the investor who bought this. He
• 5:00
  Speaker 1: paid in ether, which is kind of a cool side note,
• 5:02
  Speaker 1: but what does he I mean he doesn't get a
• 5:05
  Speaker 1: painting or there's nothing signed by people. Um what does
• 5:11
  Speaker 1: he have with this line of code? Like can you
• 5:13
  Speaker 1: click on it and see the artwork? Or um, I
• 5:18
  Speaker 1: mean I can't get it? So he can have the
• 5:21
  Speaker 1: representation of it on his phone. He's the only one
• 5:24
  Speaker 1: that has it. But you don't really know what he
• 5:27
  Speaker 1: wants from it. Maybe this is the way he thinks
• 5:30
  Speaker 1: of his digital identity, his sovereign identity in other words,
• 5:34
  Speaker 1: like we're becoming more digital every single day, and maybe
• 5:37
  Speaker 1: this is the way he wants to represent himself. Think
• 5:40
  Speaker 1: about way back when when Prince had a big fight
• 5:43
  Speaker 1: with his label because basically the Prince name was effectively
• 5:47
  Speaker 1: owned by you know whatever label he was at, and
• 5:51
  Speaker 1: suddenly he trade these symbols to represent who he was
• 5:53
  Speaker 1: to end around that process. So maybe Justin is using
• 5:57
  Speaker 1: this as a future sovereign identity and to represent and
• 6:00
  Speaker 1: who he is, and that could be very cool. It
• 6:02
  Speaker 1: does say a lot about him. He paid a lot,
• 6:04
  Speaker 1: so that tells you something about him, and it tells
• 6:06
  Speaker 1: you a style of interest in art, so that maybe
• 6:09
  Speaker 1: what he's trying to use it for. Alright, So he's
• 6:12
  Speaker 1: speculating because he thinks he can resell this because there's
• 6:16
  Speaker 1: far more access around the world to buy this and
• 6:18
  Speaker 1: there's better price discovery. So in theory, I guess I've
• 6:21
  Speaker 1: also seen news John that you know Lebron James Uh
• 6:25
  Speaker 1: creating an n f T on a highlight reel. So
• 6:28
  Speaker 1: this can be applied in theory to almost any type
• 6:31
  Speaker 1: of content, couldn't it. That's right, that's right. Unlike the
• 6:37
  Speaker 1: UH content, a lot of the content we used to study,
• 6:41
  Speaker 1: I'm not sure the content that's being created, and some
• 6:44
  Speaker 1: of these NBA Top shots stuff can be resold. It
• 6:47
  Speaker 1: is really more of a collectible and there's an emotional connection,
• 6:51
  Speaker 1: just like someone buying baseball cards. They have an emotional
• 6:54
  Speaker 1: connection to that moment, that shot, and they're willing to
• 6:57
  Speaker 1: pay a high price for it, just like I have
• 6:59
  Speaker 1: a at a baseball card somewhere that probably is not
• 7:02
  Speaker 1: worth that much, but it means a lot to me personally. Alright,
• 7:06
  Speaker 1: So what are some of the next applications we should
• 7:08
  Speaker 1: look for? That's exactly what I was gonna ask. I
• 7:11
  Speaker 1: think you can see business models change UM event ticketing,
• 7:14
  Speaker 1: for instance, right now the artists basically sell tickets and
• 7:19
  Speaker 1: it goes out to the world and sometimes there's resales
• 7:21
  Speaker 1: of it through ticket Master and other places. Suddenly they
• 7:24
  Speaker 1: can have control and see where those tickets are going.
• 7:27
  Speaker 1: And it's better in the sense that you know, QR
• 7:30
  Speaker 1: codes is can easily be replicated and three or four
• 7:33
  Speaker 1: people can show up for that same seat. This will
• 7:36
  Speaker 1: be harder going forward. Like I said before, artists now
• 7:39
  Speaker 1: can have UM basically streams of revenue associated with secondary
• 7:44
  Speaker 1: sales of their UH collectibles to collect those their art
• 7:47
  Speaker 1: or whatever it is. Wow. This it opens up so
• 7:50
  Speaker 1: many different avenues. I'm not sure where to go, but
• 7:53
  Speaker 1: this is I feel like we're obviously the very very
• 7:55
  Speaker 1: very early innings here and we can learn a lot
• 7:57
  Speaker 1: more as we go along. John Wu, thanks so much
• 7:59
  Speaker 1: for joining us. John will He's a president of AVA Labs,
• 8:02
  Speaker 1: are based in Miami. Well President bidens one point nine
• 8:08
  Speaker 1: a trillion dollar bill that was recently signed that brings
• 8:11
  Speaker 1: the total, including last year, to six trillion dollars in
• 8:15
  Speaker 1: fiscal stimulus tied to the coronavirus. The question is is
• 8:19
  Speaker 1: that enough? Is that too much? Let's dig in with
• 8:22
  Speaker 1: Near Cassar. He is a Bloomberg opinion columnist and along
• 8:26
  Speaker 1: with Tim O'Brien, uh Near rhoda column saying, you know
• 8:28
  Speaker 1: what bidens were on COVID demands, war time stimulus and
• 8:32
  Speaker 1: it certainly feels that way. Near, thanks so much for
• 8:34
  Speaker 1: joining us here. When you think about the fiscal studies
• 8:38
  Speaker 1: that we've you know, put through again at six billion
• 8:41
  Speaker 1: dollars or put that in context for us, well, you know,
• 8:45
  Speaker 1: there's a lot of handwrying about the size of this
• 8:48
  Speaker 1: of this relief effort, and I think it's more relief
• 8:51
  Speaker 1: than stimulus, um. And it does seem like a lot
• 8:54
  Speaker 1: of six trillion dollars is a lot of money. But
• 8:56
  Speaker 1: when you put an historical context, when you look at
• 8:59
  Speaker 1: you know, other big spending measures and we we used
• 9:03
  Speaker 1: as an example, you know, what we spent on the
• 9:05
  Speaker 1: World War two effort. When you put that in the
• 9:07
  Speaker 1: context of a larger economy, it's it's not it's not
• 9:10
  Speaker 1: that big. I mean, one thing to keep in mind
• 9:12
  Speaker 1: is we have a twenty one trillion dollar economy, so
• 9:15
  Speaker 1: six trillion dollars on that is just under thirty in
• 9:19
  Speaker 1: five alone. Um. You know, defense spending was GDP, so
• 9:24
  Speaker 1: when you put in broader context, it doesn't appear as big.
• 9:27
  Speaker 1: Now that doesn't mean that there aren't reasons to criticize it,
• 9:30
  Speaker 1: as we have said, there are. You know, we wish
• 9:32
  Speaker 1: that the six trillion dollars had been spent more, let's
• 9:36
  Speaker 1: say smartly, you know, more targeted relief, more on infrastructure,
• 9:40
  Speaker 1: education and public health. But size doesn't seem to be
• 9:43
  Speaker 1: a very smart criticism of this, of this relief effort.
• 9:46
  Speaker 1: I don't know, man, I mean to use the term
• 9:49
  Speaker 1: hand ringing when talking about six trillion dollars seems a
• 9:53
  Speaker 1: little bit loaded. That's a lot of money. And to
• 9:56
  Speaker 1: compare this to World War Two, in which seven five
• 10:00
  Speaker 1: million people died, seems um a grand gesture. I think
• 10:07
  Speaker 1: it's fair to say this is an absolute ton of
• 10:12
  Speaker 1: money going into the economy. And I don't think that
• 10:15
  Speaker 1: Larry Summer's concerns about overheating are going too far. Um.
• 10:22
  Speaker 1: It's it's not that I don't have sympathy for people
• 10:26
  Speaker 1: who have lost jobs. I do, and I think it's
• 10:29
  Speaker 1: alarming when you look at um initial jobless claims were
• 10:33
  Speaker 1: at records every single week since August, and you know,
• 10:37
  Speaker 1: it's worse than it was in a great financial crisis.
• 10:40
  Speaker 1: But still, this is a big sledgehammer with which to
• 10:44
  Speaker 1: hit this problem. And I think a comparison to World
• 10:47
  Speaker 1: War Two is just going a little far. Well. I mean,
• 10:51
  Speaker 1: you can compare it to to f fine, I mean,
• 10:54
  Speaker 1: you can compare it to anything you liked. I mean,
• 10:56
  Speaker 1: but not something in which seventy million people died, because
• 10:59
  Speaker 1: that's an even bigger pandemic than this, by like exponentially bigger.
• 11:05
  Speaker 1: Well not in the US, and fairness right, so many
• 11:06
  Speaker 1: five million people didn't die in the US, but but
• 11:09
  Speaker 1: way more how many people how many Americans died in
• 11:11
  Speaker 1: World War Two? But let's leave that aside for a minute.
• 11:15
  Speaker 1: I mean, I think what we ought to talk about
• 11:17
  Speaker 1: is what is it that we're trying to solve, what
• 11:19
  Speaker 1: should be the solution, and what are the potential problems.
• 11:23
  Speaker 1: I mean, one of the things that Lara's Summers is
• 11:25
  Speaker 1: worried about, as a lot of people are worried about installation.
• 11:28
  Speaker 1: But if I said to you, show me where inflation
• 11:31
  Speaker 1: is is worrisome in this moment, it would be very
• 11:33
  Speaker 1: difficult to produce that evidence. I mean, in theory, you
• 11:37
  Speaker 1: could get more inflation from the cocktail factors that are
• 11:40
  Speaker 1: on the table. Supply chains obviously are strained. There's a
• 11:44
  Speaker 1: lot of stimulus and relief that's been spent. Uh, you know,
• 11:47
  Speaker 1: saving has spiked. All of that in theory would cause inflation,
• 11:51
  Speaker 1: but there's no we haven't seen inflation. There's no reason
• 11:54
  Speaker 1: to think that worse in inflation is actually on the horizon. Now,
• 11:57
  Speaker 1: now couple that with the fact that you have a
• 12:00
  Speaker 1: lot of people in this country that are suffering. Yes,
• 12:02
  Speaker 1: a lot of people have done okay in this pandemic,
• 12:04
  Speaker 1: but there are, by by good estimates, there are more
• 12:07
  Speaker 1: than fifty million people in this country that are food
• 12:09
  Speaker 1: and secure. Those people have to be said, um, and
• 12:12
  Speaker 1: so we can argue, especially since their food costs more
• 12:14
  Speaker 1: and more near even though you haven't seen inflation, there
• 12:18
  Speaker 1: has been right in food prices and gas. Well, I
• 12:24
  Speaker 1: mean maybe I should ask you what would you how
• 12:26
  Speaker 1: would you propose to solve the problem? No, I I'm
• 12:29
  Speaker 1: just pointing out I think that, um, it's better to
• 12:33
  Speaker 1: air on the side of spending too much than too little.
• 12:36
  Speaker 1: But you can't say that we haven't seen inflation and
• 12:39
  Speaker 1: then start talking about people who can't afford food, when indeed,
• 12:42
  Speaker 1: we have seen inflation. Look at ground beef prices, they
• 12:45
  Speaker 1: continue to march higher and higher and higher. Look at
• 12:49
  Speaker 1: gasoline prices. Paul filled up for three dollars ago. And
• 12:51
  Speaker 1: so we have seen inflation. And listeners and viewers get
• 12:54
  Speaker 1: really angry when they have trouble paying the grocery store
• 12:58
  Speaker 1: bill and it's expensive to dry. I'm there, and then
• 13:01
  Speaker 1: they hear on Bloomberg Radio that we haven't seen inflation,
• 13:03
  Speaker 1: because of course we've seen inflation. It's just that, you know,
• 13:07
  Speaker 1: maybe iPads aren't more expensive, but the stuff they need
• 13:10
  Speaker 1: to live is more expensive. Hang on, we should share
• 13:15
  Speaker 1: the number. So, as you know, core CPI last month,
• 13:18
  Speaker 1: the number came in less than expected. Year over year,
• 13:21
  Speaker 1: core CPI is up one point three percent and CPI
• 13:24
  Speaker 1: is up one point seven percent. That's still well below
• 13:27
  Speaker 1: the FEDS targeted two percent and well below the historical
• 13:30
  Speaker 1: inflation rate going back to one of two point two percent.
• 13:34
  Speaker 1: So while we can cherry pick, you know, one of
• 13:36
  Speaker 1: the other, uh, one of the other sort of data point,
• 13:39
  Speaker 1: the larger picture still shows that inflation has um has
• 13:44
  Speaker 1: been low and and if anything, we're having trouble even
• 13:48
  Speaker 1: with the six trillion dollars. We're having a trouble getting
• 13:50
  Speaker 1: it up. And by and by the way, that's been
• 13:52
  Speaker 1: the story of the U S since the financial crisis.
• 13:54
  Speaker 1: People have been screaming inflation since then and the four
• 13:57
  Speaker 1: trillion dollars we spent to stimulate men and we still
• 14:00
  Speaker 1: haven't gotten inviation. So I also want to I also
• 14:04
  Speaker 1: want to point out here that you are correct. I've
• 14:06
  Speaker 1: I've looked into it. Well, in terms of World War two,
• 14:10
  Speaker 1: more people, many more people have died of COVID in
• 14:12
  Speaker 1: America than died from World War two. Two thousand soldiers
• 14:16
  Speaker 1: were killed in the war thanks to my producer, and
• 14:19
  Speaker 1: well over five hundred thousand have died from COVID. So
• 14:22
  Speaker 1: maybe it is a fair comparison near case or thank
• 14:24
  Speaker 1: you so much for that. We appreciated Lauren sour now
• 14:31
  Speaker 1: for our weekly visit the Johns Hopkins School of Medicine,
• 14:34
  Speaker 1: where she is an Associate Professor of Emergency Medicine. Lauren,
• 14:38
  Speaker 1: we heard President Biden yesterday say that all adults should
• 14:43
  Speaker 1: be eligible for vaccines by May one. Does that seem
• 14:50
  Speaker 1: aggressive or reasonable to you? I think it's probably both.
• 14:54
  Speaker 1: Actually it is. It will need to be aggressive in
• 14:57
  Speaker 1: order to meet it. But I think it's reasonable to
• 14:59
  Speaker 1: think that with some of these novel strategies that we're
• 15:01
  Speaker 1: going through UM and turning on now that you know that,
• 15:06
  Speaker 1: that we could see UH May first target date. I
• 15:10
  Speaker 1: guess I would call it to get vaccine into the
• 15:12
  Speaker 1: arms of every American. I mean, I think the key
• 15:15
  Speaker 1: about meeting that deadline is going to be beyond setting
• 15:18
  Speaker 1: up the infrastructure and making sure UM taking that next
• 15:21
  Speaker 1: step to make sure that people are there waiting to
• 15:23
  Speaker 1: receive it, UM, that they can have the access points
• 15:26
  Speaker 1: and safely get to the vaccine, and that they're willing
• 15:28
  Speaker 1: to make it. So a lot of community work has
• 15:30
  Speaker 1: to happen between now and then. So, Lauren, we're clearly
• 15:33
  Speaker 1: right now in a in a in a period where
• 15:35
  Speaker 1: demand a well outstrips supply, but presumably that's going to
• 15:39
  Speaker 1: change over the next several weeks going into May. Then
• 15:44
  Speaker 1: the challenge probably becomes, as we've heard from many folks
• 15:47
  Speaker 1: like yourself, educating those folks that are reluctant to get
• 15:51
  Speaker 1: the shot. What can you tell us now about your
• 15:53
  Speaker 1: experiences there? Yeah, I mean, simply having the vaccine, enough
• 15:57
  Speaker 1: vaccine available for everyone in America doesn't mean that everyone
• 16:00
  Speaker 1: in America is going to, you know, wake up on
• 16:03
  Speaker 1: May second with vaccine in their arms. But it's a
• 16:05
  Speaker 1: lot there's a lot of really strong trust rebuilding that
• 16:09
  Speaker 1: has to happen. I mean, UM, during the last administration,
• 16:12
  Speaker 1: we lost we lost a lot of our trusted communicators,
• 16:15
  Speaker 1: especially around health and public health. And we're building that
• 16:18
  Speaker 1: trust back up. And and there's many communities across the
• 16:20
  Speaker 1: country and even across the Glow that that trust wasn't
• 16:23
  Speaker 1: really there to begin with. UM. And so we have
• 16:25
  Speaker 1: a lot of work to do to make sure that communities,
• 16:28
  Speaker 1: vulnerable communities UM believe in the system that created and
• 16:33
  Speaker 1: is administering these vaccines, and and that that is work,
• 16:36
  Speaker 1: that's real work that has to happen and should already
• 16:38
  Speaker 1: be happening in a lot of places. How do we
• 16:41
  Speaker 1: go about that? I talked to Richard Edelman this morning,
• 16:44
  Speaker 1: who said, one good idea could be to get corporate
• 16:47
  Speaker 1: bosses to tell their employees because you know, it's it's
• 16:52
  Speaker 1: closer to home, You're you're likely to trust somebody right there,
• 16:56
  Speaker 1: especially UM in a lot of cases, someone for whom
• 16:59
  Speaker 1: you were Do you think there are other strategies that
• 17:03
  Speaker 1: that could work. Well, Yeah, I think, UM the key
• 17:08
  Speaker 1: is to be UM, to be very careful that you're
• 17:11
  Speaker 1: not moving from building trust to being coercive. Right. And
• 17:15
  Speaker 1: so the boss the employee employer relationship can be really
• 17:19
  Speaker 1: challenging to navigate simply because UM it can go around
• 17:22
  Speaker 1: like work workplace requirements like is this a requirement or
• 17:26
  Speaker 1: is this the trusted relationship I have with my boss,
• 17:28
  Speaker 1: he's telling me that he or she believes in the vaccine. UM.
• 17:32
  Speaker 1: A place that a lot of this work can be
• 17:34
  Speaker 1: done is in the local church groups, local faith based organization,
• 17:38
  Speaker 1: local community leaders, people who UM who have the trust
• 17:43
  Speaker 1: of their community and can be messengers that this is
• 17:45
  Speaker 1: a safe and effective vaccine and we need this for
• 17:48
  Speaker 1: each other, for ourselves, but also for each other to
• 17:50
  Speaker 1: keep our most vulnerable population safe. UM. Community work is
• 17:54
  Speaker 1: growing in this space, and I think there's people UM
• 17:57
  Speaker 1: way smarter about it than me, uh, doing a lot
• 18:00
  Speaker 1: of work here to make sure that the message is
• 18:02
  Speaker 1: not just get the vaccine, but here's why you can
• 18:05
  Speaker 1: trust the vaccine, here's why the vaccine is not just
• 18:08
  Speaker 1: safe but also effective. UM. And it's really important to
• 18:11
  Speaker 1: reopening the country. So Lauren, you know the vaccines are
• 18:15
  Speaker 1: coming fast and furious. That's the good news that one
• 18:18
  Speaker 1: of the concerns that really still lingers out there are
• 18:21
  Speaker 1: some of these variants that are out there. What's the latest. Yeah,
• 18:26
  Speaker 1: there's several variants that I think people are keeping an
• 18:29
  Speaker 1: eye on. I do think that part of what's happening
• 18:32
  Speaker 1: is that this is the first time we've just been
• 18:34
  Speaker 1: having variant discussions out in the public, you know, really, um,
• 18:39
  Speaker 1: all across the board, and I think there there's a lot.
• 18:42
  Speaker 1: The way we talk about variants is really important because
• 18:45
  Speaker 1: some are variants of concerns. Some are variants to watch
• 18:48
  Speaker 1: because they may change the dynamics of the outbreak or
• 18:51
  Speaker 1: the pandemic, and some are are simply natural things that
• 18:54
  Speaker 1: happened to a virus as it moves through a population
• 18:57
  Speaker 1: that actually doesn't change the dynamic of the outbreak of
• 19:00
  Speaker 1: the pandemic. And so UM, we're watching two or three
• 19:04
  Speaker 1: right now that are I think important and may have
• 19:06
  Speaker 1: an impact on vaccines and therapeutics. UM. But the companies
• 19:09
  Speaker 1: are adjusting, which is good because UM, along with this
• 19:13
  Speaker 1: increased you know, sort of observing as a variant and
• 19:15
  Speaker 1: the science around it means that we are seeing them faster,
• 19:18
  Speaker 1: which is also really good. What about the kids, Lauren,
• 19:22
  Speaker 1: I mean, the boomers are pretty much covered now. Um.
• 19:25
  Speaker 1: Generation golf is coming along quickly, and then your millennial
• 19:29
  Speaker 1: cohort is going to get shots. Um. But still we
• 19:34
  Speaker 1: don't really know a lot about kids under sixteen, right,
• 19:37
  Speaker 1: what's gen Z gonna do? Yeah, there's actually work being
• 19:42
  Speaker 1: done on the vaccine side to under like bridging studies
• 19:45
  Speaker 1: to understand how the vaccines do in pediatric populations in
• 19:49
  Speaker 1: the kids. Um, And I think it is a big
• 19:51
  Speaker 1: push to get this work done so that we can
• 19:54
  Speaker 1: take that one step closer to reopening schools safely. So UM,
• 19:58
  Speaker 1: I agree with you. I think that there's still a
• 20:00
  Speaker 1: lot of work and knowledge building that has to happen
• 20:02
  Speaker 1: in that population. But I also think that it is
• 20:05
  Speaker 1: being done. Um. You know, luckily the the infections are lower,
• 20:08
  Speaker 1: which is great for kids, but also not it makes
• 20:12
  Speaker 1: it a little harder to do the studies. So UM,
• 20:14
  Speaker 1: we have to just sort of keep enrolling as many
• 20:17
  Speaker 1: kids into those studies as we can safely and effectively UM,
• 20:20
  Speaker 1: and hope that on the other end, we have products
• 20:22
  Speaker 1: that are safe for them and get them back into schools. Faster. Lauren,
• 20:26
  Speaker 1: thank you so much again for joining us and sharing
• 20:29
  Speaker 1: your wisdom with us as we make our way through
• 20:31
  Speaker 1: this pandemic and now through the better times of these vaccinations.
• 20:34
  Speaker 1: Laurence Sour, Associate Professor of Emergency Medicine that Johns Hopkins
• 20:38
  Speaker 1: School of Medicine. I should know that the Bloomberg School
• 20:41
  Speaker 1: of Public Health at Johns Hopkins is supported by Michael R. Bloomberg,
• 20:45
  Speaker 1: founder Bloomberg LP, Bloomberg Philanthropies, and this radio station. Mark
• 20:52
  Speaker 1: Metric is the CEO of Sacks and Adam Burger Managing
• 20:56
  Speaker 1: director of Insight Partners. The two are working together on
• 21:00
  Speaker 1: the spinoff of what I believe to be one of
• 21:04
  Speaker 1: the most iconic department stores in the United States of America.
• 21:07
  Speaker 1: Sacks Fifth Avenue is a luxury business that everyone sort
• 21:12
  Speaker 1: of grows up knowing. It's kind of the pinnacle um
• 21:15
  Speaker 1: of of luxury shopping as a destination in New York City.
• 21:19
  Speaker 1: Tourists go there all the time. Um, Mark, now you
• 21:22
  Speaker 1: want to bring it online. Uh, now you have brought
• 21:25
  Speaker 1: it online and you want to make it its own business?
• 21:28
  Speaker 1: Why I separate it? Well, first, thanks for having me. Uh,
• 21:33
  Speaker 1: you know we've been online actually for almost twenty years.
• 21:35
  Speaker 1: So I think it's why partner up with somebody like
• 21:38
  Speaker 1: Insight and go to rapidly grow it. And that's because
• 21:42
  Speaker 1: you know, the luxury online market is about to explode.
• 21:45
  Speaker 1: I mean, it's going to triple in the next few years.
• 21:48
  Speaker 1: And I am a believer that twenty years ago when
• 21:51
  Speaker 1: we all went online the first time, we didn't invest
• 21:54
  Speaker 1: the right way. You know, we had our scores, we
• 21:56
  Speaker 1: had things we had to worry about, We had to
• 21:57
  Speaker 1: be very you know, we had to make decisions a lot, uh,
• 22:01
  Speaker 1: you know, about about where to invest. And I think
• 22:04
  Speaker 1: this time, this iteration of growth, um, we're gonna be
• 22:07
  Speaker 1: there and we're gonna you know, we're gonna be able
• 22:10
  Speaker 1: to really exploit uh, this market that's that's about to trample. Adam.
• 22:16
  Speaker 1: Talk to us about kind of your view of the
• 22:18
  Speaker 1: business here. You're investing five million dollars into Sacks and
• 22:22
  Speaker 1: implying evaluation of two billion dollars for this business. Talk
• 22:26
  Speaker 1: to us about, you know, kind of what was behind
• 22:28
  Speaker 1: your investment rationale there. Well, thanks for having me as well,
• 22:32
  Speaker 1: and you actually stole some of my thunder. The rationale
• 22:36
  Speaker 1: is exactly what you said. This is an iconic department store.
• 22:39
  Speaker 1: This is like a once in a lifetime career opportunity
• 22:43
  Speaker 1: to invest in a legendary brand like this, over a
• 22:46
  Speaker 1: hundred and fifty years old, that is making a very
• 22:49
  Speaker 1: bold pivot to a digital first approach. They have an
• 22:53
  Speaker 1: extraordinary legacy. There's still the place for designers together and
• 23:00
  Speaker 1: create the highest experience for luxury and aspirational fashion. And
• 23:05
  Speaker 1: that's just a rare opportunity for a software company like
• 23:08
  Speaker 1: our software investor like ours that looks at thousands of
• 23:12
  Speaker 1: companies every year. You don't get a chance in software
• 23:14
  Speaker 1: to invest in How did your whole brand like this?
• 23:18
  Speaker 1: What is it about online the online experience that you
• 23:21
  Speaker 1: think you can improve? Mark? And do shoppers online pick
• 23:26
  Speaker 1: different stuff than shoppers in the store. They're looking for
• 23:30
  Speaker 1: different stuff. Can you aim them at different things? Well?
• 23:33
  Speaker 1: I think you know, first the online um luxury experience,
• 23:39
  Speaker 1: which I believe we're going to reinvent candidly. You can
• 23:43
  Speaker 1: direct people, you could be there for what they want.
• 23:46
  Speaker 1: But what's great about SASS as a fashion authority? You know,
• 23:49
  Speaker 1: and Adam mentioned it, you know we've been doing this
• 23:51
  Speaker 1: for a hundred years. Uh. In our stores we are
• 23:54
  Speaker 1: an arbiter. You know, we help the customer pick what
• 23:57
  Speaker 1: they want. We're not going to be even online a
• 24:00
  Speaker 1: spear fishing type of experience where somebody wants a Gucci
• 24:03
  Speaker 1: bag or they want this bag and they come and
• 24:04
  Speaker 1: they get it. Zax is always going to be helping
• 24:07
  Speaker 1: our customers find and experience the best product. Um. So
• 24:11
  Speaker 1: that's you know, on the on the fashion side, on
• 24:13
  Speaker 1: the experience side, we're going to be investing and really
• 24:16
  Speaker 1: pushing to improve cradle to grave, uh, the entire customer experience.
• 24:20
  Speaker 1: So it's everything from how we market to you, how
• 24:23
  Speaker 1: we connect with you, how we ship you the product,
• 24:26
  Speaker 1: what it feels like when it comes to you, what
• 24:28
  Speaker 1: it's like when you call us to chat with us
• 24:29
  Speaker 1: about it, or god forbid, if you return it, what
• 24:32
  Speaker 1: is that like. So we're investing across the entire experience
• 24:36
  Speaker 1: in Journey, and we're doing it very quickly. I assume
• 24:39
  Speaker 1: returns are pre addressed labels, no fuss, no must put
• 24:44
  Speaker 1: it back in the box and you send somebody to
• 24:46
  Speaker 1: pick it up for me. That is what's going to
• 24:49
  Speaker 1: be happening. But you know, you know, to be honest,
• 24:51
  Speaker 1: that's not where we are today. But yes, that investment
• 24:54
  Speaker 1: goes towards this and actually you know, up until Monday,
• 24:58
  Speaker 1: Zax charge you for returns. Uh. And one of the
• 25:01
  Speaker 1: first things we did, I mean we closed the deal
• 25:03
  Speaker 1: I believe on Thursday, uh and and really started wheat
• 25:07
  Speaker 1: pivoting and pushing the business. We went to free returns
• 25:11
  Speaker 1: Monday morning, Adam dollars, Where do you think that money
• 25:17
  Speaker 1: needs to be invested? Well, where we're invested in isn't
• 25:22
  Speaker 1: a great team. And I know that sounds like a
• 25:24
  Speaker 1: slightly glib comment, but that's also just a rare opportunity
• 25:27
  Speaker 1: to have this great team who was running the entire
• 25:31
  Speaker 1: sex business now coming over and focusing first online. But
• 25:35
  Speaker 1: where they're going to spend most of the money is
• 25:38
  Speaker 1: quite frankly, in marketing and increasing the customer base by
• 25:44
  Speaker 1: expanding the opportunity to a wider audience, and as Mark said,
• 25:49
  Speaker 1: going up and down the line and increasing the experience,
• 25:52
  Speaker 1: whether it's from fulfillment to customer service to a better
• 25:56
  Speaker 1: website experience, all of those are opportunities and we're excited
• 26:01
  Speaker 1: to back a really strong team that's also going to
• 26:04
  Speaker 1: be assisted by Sebastian Gunningham who's joining the team as
• 26:08
  Speaker 1: an advisor. Uh, and he spent some time building the
• 26:11
  Speaker 1: Amazon marketplace experience. So we think we've not only got
• 26:14
  Speaker 1: a great brand here, but we've all seen a great team.
• 26:18
  Speaker 1: Well what's your exit? I mean are you looking for?
• 26:22
  Speaker 1: Do you have a five to seven year window for example? Um?
• 26:25
  Speaker 1: Do you want to keep a stake in the business?
• 26:26
  Speaker 1: You want to see an I p O. You know,
• 26:29
  Speaker 1: we're not great market timers, and we take a different approach.
• 26:34
  Speaker 1: We are just trying to build a great business and
• 26:36
  Speaker 1: focus on high growth and free cash flow generation over time.
• 26:40
  Speaker 1: So we don't walk into this with a clear exit strategy.
• 26:44
  Speaker 1: We walk into this figuring out how can we help
• 26:46
  Speaker 1: continue to grow this business aggressively over time? And if
• 26:50
  Speaker 1: you do that, uh, if good things will happen, and
• 26:53
  Speaker 1: great businesses are generally bought, not sold, So we're will
• 26:59
  Speaker 1: keep making it a great business and everything else will
• 27:01
  Speaker 1: take care of itself. Hey, Mark, thank you so much
• 27:04
  Speaker 1: for joining us. Uh. Really exciting times for Sacks. It's
• 27:08
  Speaker 1: people on that brand. Mark Metric, CEO for Sacks, and
• 27:12
  Speaker 1: Adam Burger, managing director at Insight Partners. They're based in
• 27:15
  Speaker 1: Los Angeles making this investment in Sacks as Sacks really
• 27:19
  Speaker 1: takes a hard pivot to the director consumer e commerce
• 27:23
  Speaker 1: business by spending off sacks dot com, so we appreciate
• 27:27
  Speaker 1: them taking the time. Thanks for listening to the Bloomberg
• 27:31
  Speaker 1: Markets podcast. You can subscribe and listen to interviews at
• 27:34
  Speaker 1: Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller.
• 27:39
  Speaker 1: I'm on Twitter at Matt Millert. On Fall Sweeney, I'm
• 27:44
  Speaker 1: on Twitter at pt Sweeney. Before the podcast, you can
• 27:47
  Speaker 1: always catch us worldwide at Bloomberg Radio.