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Nike Jumps as Outlook Creates Optimism in Turnaround · Bloomberg Intelligence

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  Speaker 2: The Nike putting up some good results.
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  Speaker 3: The stock is up fifteen percent here today. That's got
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  Speaker 3: a market kappa north of one hundred billion dollars.
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  Speaker 2: Put them oil.
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  Speaker 3: She covers all the retailers for Bloomberg Intelligence. She joins
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  Speaker 3: us now pooh them. The street likes what bloom What Nike?
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  Speaker 3: You had to say? What did you hear on their earnings?
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  Speaker 4: Yeah, you know, it kind of seems like we hit
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  Speaker 4: the bottom, so I think, you know, there's only upside
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  Speaker 4: from here, is what it seems like. The results weren't spectacular.
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  Speaker 4: Sales still fell twelve percent, but they're expected to fall
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  Speaker 4: mid single digits in the first fist whole quarter, which
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  Speaker 4: was ahead of consensus. And it seems that things are working.
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  Speaker 4: The holiday order book is up, so you know, positive
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  Speaker 4: things going forward, and still a choppy environment. We're not
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  Speaker 4: at positive sales. It's still going to take time, but
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  Speaker 4: I think we've hit the bottom.
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  Speaker 5: Hey, put on what is it?
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  Speaker 2: Though?
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  Speaker 6: We were breaking it down with you last night after
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  Speaker 6: the earnings broke and the stock was kind of bouncing around,
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  Speaker 6: you know, and so obviously some stuff got clarified on
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  Speaker 6: the call with.
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  Speaker 5: Analysts and investors.
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  Speaker 6: What is it in particular did they say or say
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  Speaker 6: over and over again that kind of gave investors hope
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  Speaker 6: and saying that, Okay, yeah, maybe the worst is over.
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  Speaker 4: Yeah. The first thing is on the inventory, and we
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  Speaker 4: spoke about yesterday inventories were basically just flat right, and
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  Speaker 4: you expected to see them down more. They talked a
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  Speaker 4: little bit about that, and they talked about how the
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  Speaker 4: order book is stronger heading into the holiday season. So
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  Speaker 4: that is why they're building up some of the inventory.
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  Speaker 4: They're continuing to clear out access inventory of things like
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  Speaker 4: the dunk, which they have too much of and they
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  Speaker 4: actually do want to get rid of. But then they're
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  Speaker 4: building inventory of new things which are selling, which there
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  Speaker 4: is demand for. Store sales were positive, the holiday order
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  Speaker 4: book is positive. Those were really good indications as we
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  Speaker 4: move forward, and their guidance, of course was better than expected.
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  Speaker 4: So I think all of that together just kind of
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  Speaker 4: sent the message that we're going up from here, things
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  Speaker 4: are going to get better.
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  Speaker 3: Pudin What are they saying about the impact of tariffs,
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  Speaker 3: either on their cost structure or on consumer demand.
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  Speaker 4: Yeah, so tariffs definitely have an impact on their cost structure.
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  Speaker 4: We sought in the margin guidance, which there's one hundred
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  Speaker 4: basis point hit from tariffs. It's a billion dollars in
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  Speaker 4: additional costs, So there is definitely implications from that. They
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  Speaker 4: are able to offset a lot of it through price increases,
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  Speaker 4: internal efficiencies, supplier negotiations, but it's still going to hit
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  Speaker 4: the margin line. In terms of demand, it's not clear
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  Speaker 4: that it's actually pulled back any demand yet. And the
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  Speaker 4: way the Nike is strategically taking up these price increases
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  Speaker 4: five dollars on shoes that are over one hundred dollars,
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  Speaker 4: no increase on kids, et cetera. I think their customer
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  Speaker 4: can absorb that without pushing back meaningfully unless things deteriorate
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  Speaker 4: in the consumer macro world from here onward.
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  Speaker 6: But am I going to tell you Paul's got a
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  Speaker 6: pretty snazzy pair of loafers on.
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  Speaker 5: I'm just going to say I love the color. They're
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  Speaker 5: pretty cool. I don't know if he has snowfers yet
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  Speaker 5: from Nike, but I mean these are not inexpensive.
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  Speaker 6: We talked about that last night too, and the resale
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  Speaker 6: of some of them going for like five hundred dollars.
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  Speaker 6: I mean, this is a company that does continue to
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  Speaker 6: have the ability to innovate and really capture consumers and
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  Speaker 6: you know, really be a product in demand.
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  Speaker 4: Yeah, you said it absolutely right. You know, Nike just
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  Speaker 4: needs to innovate. It needs to bring performance product, it
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  Speaker 4: needs to bring style more of it. It's not that
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  Speaker 4: they never did it. They did, but they just needed
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  Speaker 4: to continue to be at the cutting edge of it.
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  Speaker 4: And they're coming back to that. They're coming back to
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  Speaker 4: their roots, they're coming back to sports, They're coming back
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  Speaker 4: to innovation and being the brand that cuts out the
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  Speaker 4: newness first. So I think this is one example of it. Clearly,
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  Speaker 4: it's not going to be you know, the shoe that's
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  Speaker 4: going to be made in you know, millions of quantity.
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  Speaker 4: So that's why you're seeing it on the resale platforms.
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  Speaker 4: But as long as they stay true to performance and sports,
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  Speaker 4: I think they will continue to do better.
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  Speaker 2: Hey put them in in the sneaker business.
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  Speaker 3: How important is the athletic endorsement, getting signing up the
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  Speaker 3: newest pro that kind of thing. I think a Cooper flag,
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  Speaker 3: the number one draft pick in the NBA. Do g
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  Speaker 3: Red wondering if that's still a thing.
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  Speaker 4: It is a thing. I mean, Nike definitely has a
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  Speaker 4: deep pockets to get the athletes that are already some
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  Speaker 4: of the biggest athletes. But when you think about the
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  Speaker 4: rookies are the ones that are coming up. If Nike
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  Speaker 4: could secure the best ones, it definitely helps them because
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  Speaker 4: they resonate and they connect better with shoppers. So creating
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  Speaker 4: a line for them or creating the shoe that they're
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  Speaker 4: wearing or their own shoe help to connect with the shopper.
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  Speaker 4: And that's how some of these other rivals of theirs
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  Speaker 4: are making their mark and really taking shares. They're investing
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  Speaker 4: and they're getting these rookies and they're able to draw
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  Speaker 4: these connections that help them. So I do think endorsements
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  Speaker 4: in sports and getting the right athlete is still very
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  Speaker 4: very important to the game and to any athletes.
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  Speaker 5: Share brand, all right.
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  Speaker 2: Put them Oyle, thank you so much. We appreiate it.
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  Speaker 2: Put them Oyle.
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  Speaker 3: She covers all the retail companies for Bloomberg Intelligency based
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  Speaker 3: down there.
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  Speaker 2: At Princeton and New Jersey.
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  Speaker 3: A great quarter from the perspective of the market stocks
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  Speaker 3: of fifteen percent.
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  Speaker 2: It had been down, you know, kind of on the
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  Speaker 2: year or so.
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  Speaker 3: As Punham suggested, it seems like the market's saying these
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  Speaker 3: guys have kind of hit bottom.
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  Speaker 2: They've kind of now have some runway to go. So
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  Speaker 2: we keep an eye on that.
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  Speaker 6: Even with that bump up, as you said, sixteen percent
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  Speaker 6: or so, it's still done about four percent yeter date.
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  Speaker 5: Just shows you what it's been coming back on.
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  Speaker 3: Carol Masher Paul Sweeney, We're live here at the home
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  Speaker 3: of Michael Lobe out here in Southampton and New York
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  Speaker 3: at the annual Uncharted Summit where they get together a
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  Speaker 3: whole bunch of entrepreneurs, funders and they talk about creating business,
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  Speaker 3: creating value. We're joining right now by our co host
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  Speaker 3: Michael Lowe, founder and CEO of lob dot NYC and
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  Speaker 3: no Freedom, CEO of Uncharted.
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  Speaker 2: Gents, thanks so much for joining us. Got the light
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  Speaker 2: blue and the dark blue.
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  Speaker 3: We're looking solid here Hampton's Casual.
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  Speaker 2: I got my support, cooks, my best effort I can do.
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  Speaker 3: Michael, talk to us about what this conference is about.
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  Speaker 2: What do you guys really look to do here.
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  Speaker 7: So we're not going to talk about your wardrobe.
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  Speaker 5: We're not going to go there because got great flowers.
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  Speaker 7: On it looks amazing. Check busses.
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  Speaker 8: Yeah, somebody dressed you in the morning exactly. So what
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  Speaker 8: the intention is is that Noah and I started building
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  Speaker 8: Uncharted four years ago, was in the teeth of COVID
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  Speaker 8: when nobody was getting together with anybody else, and we
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  Speaker 8: started having dinners at my house in the city.
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  Speaker 7: And was very popular.
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  Speaker 8: And what the thesis is is that entrepreneurs need as
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  Speaker 8: much support as they can get, including emotional support, and
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  Speaker 8: the best way to do that is put entrepreneurs in
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  Speaker 8: a room with other entrepreneurs and they are as a class.
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  Speaker 8: They drive the economy, drive jobs, drive wealth, and yet
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  Speaker 8: there I think underappreciated, and as a serial entrepreneur myself
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  Speaker 8: and actually one or two things worked, I'm very empathetic
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  Speaker 8: and just with all the miles on the tires. I
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  Speaker 8: am kind of a senior statesman by definition. Right, this
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  Speaker 8: is a young guy's game. I say that I have
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  Speaker 8: the privilege of working with people half my age and
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  Speaker 8: twice as smart. I used to say that. Now it's
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  Speaker 8: three as smart and one third of my age, but
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  Speaker 8: that was the intention. And it's grown to tribe of
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  Speaker 8: maybe twenty five hundred entrepreneurs, of which about a third
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  Speaker 8: of them show up to this, so we will have
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  Speaker 8: about eight hundred today.
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  Speaker 5: No, come on in on this.
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  Speaker 6: You're the CEO of Uncharted too, right, and so we're
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  Speaker 6: seeing things being set up. There's going to be a
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  Speaker 6: lot of great conversations and speakers going on. Tell us
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  Speaker 6: what it's been grown into and what kind of conversations
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  Speaker 6: are going to be happening later on.
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  Speaker 9: The common thread of everything that we've done it Uncharted
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  Speaker 9: since the first dinner on May twenty, twenty twenty one.
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  Speaker 9: And I'll never forget it.
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  Speaker 5: Was it just you too? By the way, Justice us.
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  Speaker 7: To a dinner. Yeah, it was just us too. We
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  Speaker 7: just sat and talked for four hours and here we go. No,
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  Speaker 7: not about it. We also held ounce we did all
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  Speaker 7: dance the whole time. Yeah, it's very romantic.
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  Speaker 9: Now, we had about twenty entrepreneurs around the table, kind
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  Speaker 9: of yeah, eight of each of our friends and then
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  Speaker 9: a couple of others. If you will look, the common
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  Speaker 9: thread of every single event we've done, whether it's our
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  Speaker 9: dinners or the past three summits of the breakfast we've done,
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  Speaker 9: has always been trying to create safe spaces for real entrepreneurs, founders,
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  Speaker 9: exceptional particips bent in the entrepreneuri community, as we say,
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  Speaker 9: to truly drop their guard, drop their hair, and trust
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  Speaker 9: that they're in an environment where they can speak openly
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  Speaker 9: and honestly any entrepreneur or anyone who's building and really
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  Speaker 9: doing it, the real ones. Hopefully this will resonate when
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  Speaker 9: they hear it. It is really f and hard. It's very
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  Speaker 9: hard to build businesses. It's really hard to play this
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  Speaker 9: game at the high level. And I think if we
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  Speaker 9: can offer a rare environment where people can feel like
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  Speaker 9: they are amongst their true peers, or they can really
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  Speaker 9: drop their guard and connect with people in a place
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  Speaker 9: where no matter who you go talk to, they're all
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  Speaker 9: going to be exceptional.
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  Speaker 10: It's special.
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  Speaker 9: And so we've really tried to guard the energy. We've
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  Speaker 9: really tried to keep the sanctity of the fact that
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  Speaker 9: if you come to an uncharted event, you're going to
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  Speaker 9: meet someone amazing. And that's really been the common thread.
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  Speaker 6: I just want to say, it's a reminder of that,
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  Speaker 6: like Google, Apple, all of these companies that are now
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  Speaker 6: you know, the biggest market caps that are out there
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  Speaker 6: and that we talk about and you know all the time.
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  Speaker 6: I mean, they all started as an idea an entrepreneur.
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  Speaker 6: And that's the point.
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  Speaker 8: Yeah, one percent, And if you look at kind of
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  Speaker 8: success rates and everything else, if you're an entrepreneur, if
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  Speaker 8: you really knew all.
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  Speaker 7: That stuff, why would you you do this?
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  Speaker 8: Because the failure rate is incredibly high, hours are incredibly long,
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  Speaker 8: the pay you know, is dreadful until it's not until
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  Speaker 8: you have a big score.
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  Speaker 7: But the number of big scores is very very small.
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  Speaker 8: And there's so many forces and so many you know,
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  Speaker 8: so many exogenous things that are you know, anti entrepreneur
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  Speaker 8: that we wanted to have a sanctuary here that other
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  Speaker 8: entrepreneurs can meet other entrepreneurs. And Noah, you're fond of
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  Speaker 8: saying that not a week or two goes by where
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  Speaker 8: we don't get a phone call saying I met my
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  Speaker 8: co founder here two years ago.
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  Speaker 3: Yep, No, who's a What are the areas that are
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  Speaker 3: most interested entrepreneurs today?
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  Speaker 2: Is it technology? Is healthcare?
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  Speaker 3: Are there certain industries that are getting most of the attention.
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  Speaker 9: Look, I think the obvious buzzword that you can't go
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  Speaker 9: too far in any of the new cycles to that
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  Speaker 9: hearing is AI. And I think that unlike other cycles
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  Speaker 9: that have come and went and entered the Zeitgeison left,
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  Speaker 9: this one feels very real. I can tell you that
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  Speaker 9: amongst all my friends, whether they're in CpG, health tech,
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  Speaker 9: pure AI, deep tech, what have you tech, and all
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  Speaker 9: of them are thinking explicitly about how AI is going
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  Speaker 9: to impact their business if they're not already, and how
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  Speaker 9: they're going to get into it. So I think we're
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  Speaker 9: certainly going to talk about that a lot today. I
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  Speaker 9: think it's top of mind for a lot of people.
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  Speaker 9: The movement is real. I think that the implications and
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  Speaker 9: repercussions are unclear how it's going to land right now,
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  Speaker 9: but everybody's thinking about it, and they should be.
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  Speaker 8: But I think it's unclear, but it's going to be brought,
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  Speaker 8: It's going to be broad it's going to be brought
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  Speaker 8: and you mentioned cycles. I've been around for a few.
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  Speaker 8: This reminds me of the late nineties, where the Internet
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  Speaker 8: happened and we had a lot of false starts.
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  Speaker 7: Two three years ago.
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  Speaker 8: Everybody was talking about NFTs before that, blockchain before that,
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  Speaker 8: cannabis before that, you know, something else.
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  Speaker 7: But this feels like another eruption.
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  Speaker 8: This feels like another advent of the Internet, one that
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  Speaker 8: we haven't had in absolutely years.
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  Speaker 5: Yeah, on the same level, no doubt about it, or even.
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  Speaker 8: More I think on the same level.
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  Speaker 10: Yeah.
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  Speaker 8: I mean, you know, it's hard to project and predict,
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  Speaker 8: but I had breakfast with a heroic.
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  Speaker 7: Entrepreneur a couple of days ago.
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  Speaker 8: He has built a business now worth one point eight
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  Speaker 8: billion dollars, and over breakfast, he says, I have two
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  Speaker 8: hundred and seventy people by year end, it's going to
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  Speaker 8: be one twenty.
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  Speaker 7: Yeah, okay, interesting.
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  Speaker 9: I would add to that, if I'm may, sorry, I
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  Speaker 9: think that there's this interesting tension with AI right now
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  Speaker 9: where I think Michael's right, and I would even argue
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  Speaker 9: that this might I didn't live through the late nineties
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  Speaker 9: period of seeing it at least all right, let me see,
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  Speaker 9: thanks for having me guys, if.
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  Speaker 7: You know, but I think that let your hair down shot.
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  Speaker 4: Why.
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  Speaker 9: I know, it's crazy everyone asked me that, But I
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  Speaker 9: think there's an inherent tension where I actually think it
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  Speaker 9: could be more disruptive and at the same time, I
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  Speaker 9: do think that there's a lot of people who are
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  Speaker 9: betting big dollars than AI that are going to get
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  Speaker 9: wiped out because I think there's going to be an
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  Speaker 9: absolute power law dynamic here where small select group of
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  Speaker 9: companies at the top end aggregate a ton of power
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  Speaker 9: and resource. I also think it's going to be a
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  Speaker 9: Barbell warre on the bottom end. You know, I've invested
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  Speaker 9: personally in companies that have like two or three people
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  Speaker 9: on the team and have rocketed millions in are because
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  Speaker 9: they're able to get ten x productivity if it's a
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  Speaker 9: killer founder. So I think there's a Barbell thing happening
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  Speaker 9: right now where the killer founders who actually know how
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  Speaker 9: to leverage resources are going to crush it, as are
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  Speaker 9: the big businesses.
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  Speaker 2: Well.
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  Speaker 6: Because of that and what AI can do generative AI
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  Speaker 6: and so on, I mean, does it give entrepreneurs even
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  Speaker 6: more opportunities to start up? We talked about that after
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  Speaker 6: the pandemic. Basically create a website and you can go
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  Speaker 6: and then maybe that's simplifying things, But does AI kind
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  Speaker 6: of have a multiplier effect to on entrepreneurial.
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  Speaker 5: Activities Without a doubt, I think that's opportunities.
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  Speaker 7: I think that's right.
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  Speaker 8: And if you just look at what has happened over
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  Speaker 8: the years, you know, it used to be that if
• 13:36
  Speaker 8: you build a business, a brand new business.
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  Speaker 7: In the Internet, you need it.
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  Speaker 8: You needed hundreds of people, right, and now that's really
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  Speaker 8: compressed to just a few.
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  Speaker 7: But to Noah's point, there's.
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  Speaker 8: Going to be winners and there's going to be a
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  Speaker 8: lot of losers, and that's very hard to predict.
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  Speaker 3: Michael, talk to us about monetization. I'm not seeing a
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  Speaker 3: lot of IPOs. I'm not seeing a lot of m
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  Speaker 3: and A. How do these great entrepreneurs monetize the value
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  Speaker 3: they've created?
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  Speaker 7: That's a that's a great question.
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  Speaker 8: I would I would say that everything you just mentioned
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  Speaker 8: is part of a cycle, and we're just in that
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  Speaker 8: type of cycle where everything is a little bit bollock
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  Speaker 8: stop uh, But you know it's it's we're going to
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  Speaker 8: be on the other side of that and there's going
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  Speaker 8: to be some great companies built, and there's going to
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  Speaker 8: be some great flameouts. A lot of people are going
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  Speaker 8: to lose a lot of money, and then there's going
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  Speaker 8: to be a few that are going to be extraordinarily successful.
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  Speaker 8: But to your point, we can build it now with
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  Speaker 8: instead of three hundred people, three and there's been predictions
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  Speaker 8: that there's going to be a unicorn with all of
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  Speaker 8: three people.
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  Speaker 5: Serious, Yeah, I do that.
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  Speaker 6: Yeah, Okay, that kind of makes sense. And we've started
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  Speaker 6: to see IPOs actually in general come to market and
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  Speaker 6: it's a much more favorable market. I got to ask you,
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  Speaker 6: I think we'd be remiss of the macro that's going
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  Speaker 6: on and different policies in the world being upended in geopolitics.
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  Speaker 6: What does that do for the entrepreneur, entrepreneur who's trying
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  Speaker 6: to you know, we know it can be lean and
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  Speaker 6: mean in the beginning when it comes to a startup.
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  Speaker 6: What about some of these macro issues, what would be
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  Speaker 6: more helpful to them?
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  Speaker 5: What kind of.
• 15:03
  Speaker 8: Environment, well, anything that helps with capital formation, anything that
• 15:09
  Speaker 8: kind of reduces regulation. I was hopeful that this administration
• 15:14
  Speaker 8: would attack some of that stuff and maybe not terriffs,
• 15:17
  Speaker 8: but anyway.
• 15:18
  Speaker 2: It's still early, it's still early.
• 15:20
  Speaker 7: We're here now.
• 15:21
  Speaker 8: They are very active and very proactive, and I'm just
• 15:24
  Speaker 8: hopeful that what you really want to give is entrepreneurs
• 15:26
  Speaker 8: just charter. I mean, let them do their thing as
• 15:29
  Speaker 8: much as you can. And our hope is by the
• 15:31
  Speaker 8: way that this environment, believe it or not, will put
• 15:34
  Speaker 8: a dent in that world, right, that they will find
• 15:37
  Speaker 8: support here in many different ways.
• 15:40
  Speaker 6: Well, I always think it's kind of amazing how much
• 15:42
  Speaker 6: time we spend and obviously this is our world, right,
• 15:44
  Speaker 6: the publicly held markets, right, this is what we track,
• 15:46
  Speaker 6: you know, all the movements. But we talk constantly about
• 15:49
  Speaker 6: the importance of small business and startups in terms of
• 15:52
  Speaker 6: the backbone, and I just think it kind of gets
• 15:54
  Speaker 6: lost a little bit.
• 15:55
  Speaker 7: Yeah.
• 15:56
  Speaker 8: I do think though that you're going to see AI
• 15:59
  Speaker 8: up end just about every industry, and I think those
• 16:02
  Speaker 8: big companies are going to find themselves woefully behind and
• 16:04
  Speaker 8: they're going to have no choice but to make some acquisitions.
• 16:07
  Speaker 3: Well said, no, what capital is it out there for
• 16:10
  Speaker 3: entrepreneurs today?
• 16:11
  Speaker 10: It is?
• 16:12
  Speaker 9: But I think that you're seeing an interesting dynamic with
• 16:14
  Speaker 9: the vcs and private equity that they're chasing a lot
• 16:16
  Speaker 9: of trends almost blindly. You know the fact that right
• 16:19
  Speaker 9: now there are really good businesses that don't have the
• 16:21
  Speaker 9: word AI that are struggling to raise money, whereas there's
• 16:23
  Speaker 9: other businesses that have a deck and pre seed and
• 16:25
  Speaker 9: barely an idea and or raising money at fifty million
• 16:27
  Speaker 9: dollars pre money valuations, I think is indicative of what's
• 16:30
  Speaker 9: going on.
• 16:30
  Speaker 5: Yeah, we saw venture raise. It's been really difficult.
• 16:32
  Speaker 9: It's been very difficult unless you're a credentialed AI founder
• 16:35
  Speaker 9: have a good idea in the AI space, because there's
• 16:37
  Speaker 9: a lot of VC funds chasing chasing ideas, and I
• 16:39
  Speaker 9: think some of them will work, but the unfortunate realities,
• 16:41
  Speaker 9: I think a lot of them are going to get
• 16:42
  Speaker 9: absolutely smoked because they can't all work, especially not at
• 16:45
  Speaker 9: fifty million dollar pre So to answer your question directly, sure,
• 16:49
  Speaker 9: there's capital out there, I wish.
• 16:50
  Speaker 7: There was more.
• 16:51
  Speaker 9: I wish there was more going to more ideas that
• 16:52
  Speaker 9: were based just on meritocracy and their actual traction versus
• 16:55
  Speaker 9: the notion that they have AI and it as bullish
• 16:57
  Speaker 9: as I am on AI and investing in it personally,
• 16:59
  Speaker 9: to be of abundantly clear.
• 17:01
  Speaker 7: But it's an interesting moment right now, very interesting.
• 17:03
  Speaker 8: I will only add that that is not too much
• 17:06
  Speaker 8: different than what we've always seen. True, there's always been
• 17:09
  Speaker 8: the bright shiny object, and the investors feel like they
• 17:12
  Speaker 8: got to follow that.
• 17:14
  Speaker 5: Did you really start working for you in high school?
• 17:19
  Speaker 2: Such fantastic got to start on?
• 17:21
  Speaker 3: Yeah, got us talk about that off air, exactly right, Michael,
• 17:23
  Speaker 3: thank you so much, having founder CEO of lobe dot
• 17:26
  Speaker 3: nyc it Noah Friedman, CEO of uncharged.
• 17:28
  Speaker 2: Thank you gentlemen for being having a great conference today.
• 17:31
  Speaker 3: I hope you have a lot of great ideas circle
• 17:33
  Speaker 3: about and a lot of great deals.
• 17:34
  Speaker 7: Thanks for having men.
• 17:37
  Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
• 17:41
  Speaker 1: weekdays at ten am Eastern on Applecarplay and Android Auto
• 17:44
  Speaker 1: with the Bluemberg Business app. Listen on demand wherever you
• 17:47
  Speaker 1: get your podcasts, or watch us live on.
• 17:50
  Speaker 3: YouTube Powermaster and I we are here at the Hope
• 17:54
  Speaker 3: of Michael Southampton. It's starting to pick up the activity,
• 17:58
  Speaker 3: the weather's getting better. Of interesting folks coming through, and
• 18:01
  Speaker 3: we're fortunate to get a few of them to come
• 18:03
  Speaker 3: spend a few minutes with us, including Bill Howrid's former
• 18:05
  Speaker 3: CEO of PayPal, joining us here. Bill Serial entrepreneur. Is
• 18:10
  Speaker 3: that something we can go with to kind of start
• 18:12
  Speaker 3: the conversation here with you? Well, if you count eight
• 18:15
  Speaker 3: of them, yes, all right, that's where we're going.
• 18:18
  Speaker 2: What does a conference like this mean to you?
• 18:20
  Speaker 3: And what does it mean to some of the young
• 18:21
  Speaker 3: folks who are coming with ideas and energy and maybe
• 18:25
  Speaker 3: the looking for a little bit of a guidance.
• 18:26
  Speaker 2: Would you hope to get done here?
• 18:28
  Speaker 11: Well, you know, I think I can encourage. I don't
• 18:30
  Speaker 11: think I can guide because you know, there aren't a
• 18:33
  Speaker 11: lot of rules to this.
• 18:34
  Speaker 10: Every time is different, and you.
• 18:37
  Speaker 11: Know, I'll tell you the thing that I will tell
• 18:39
  Speaker 11: people what makes it hard to do a startup?
• 18:45
  Speaker 10: People think about, well.
• 18:46
  Speaker 11: There's the risk, there's the career risk, there's the financial risk.
• 18:49
  Speaker 11: But that's not really the thing. But you need to
• 18:52
  Speaker 11: be comfortable in ambiguity because you come to work every
• 18:56
  Speaker 11: day and you really don't know what's happening next. You
• 18:59
  Speaker 11: don't have a play book and so you have to
• 19:02
  Speaker 11: love the thrill of making it up as.
• 19:04
  Speaker 10: You go along.
• 19:04
  Speaker 6: Does it get any easier like the second, third, fourth,
• 19:07
  Speaker 6: fifth time around?
• 19:08
  Speaker 11: It doesn't get any easier from the point of view
• 19:10
  Speaker 11: of you know, sort of knowing a formula, but it
• 19:12
  Speaker 11: does get easier because you're more used to the thrill.
• 19:16
  Speaker 3: What's the challenge here for a young entrepreneur in today's market, Well, first.
• 19:22
  Speaker 11: Of all, you know, having the being able to understand yourself.
• 19:27
  Speaker 11: Self awareness, that's the most important thing. Everybody for instance,
• 19:30
  Speaker 11: Silicon Valley or this arena, everybody thinks of themselves as
• 19:35
  Speaker 11: a change agent. In fact, the vast majority of humans
• 19:39
  Speaker 11: are not. The vast majority of humans want to know
• 19:42
  Speaker 11: when they get up, what they go to do and
• 19:44
  Speaker 11: how they do it. And that is as it should be,
• 19:47
  Speaker 11: because that's how society moves forward. But if you have
• 19:51
  Speaker 11: enough self awareness to know what you like and know
• 19:54
  Speaker 11: what you're capable of and this is it, then you
• 19:58
  Speaker 11: know have the courage to go ahead.
• 20:00
  Speaker 5: How much easier is it?
• 20:01
  Speaker 6: When I think for Evergreen Money, your wealth advisor that
• 20:04
  Speaker 6: you've got on the website, it says you built this
• 20:06
  Speaker 6: for yourself. So when you kind of identify something that's
• 20:09
  Speaker 6: needed in the marketplace, is it easier to do?
• 20:11
  Speaker 11: And oh, it's much easier. Yeah, Because you don't have data,
• 20:14
  Speaker 11: you don't have research. You really have to go from
• 20:16
  Speaker 11: your gut at the very beginning. Then of course, you
• 20:19
  Speaker 11: get the data and you have to adopt to it,
• 20:21
  Speaker 11: but it works so much easier if you have just
• 20:25
  Speaker 11: an innate sense of what's required. As an example, the
• 20:29
  Speaker 11: company that I tried just before this one which failed.
• 20:33
  Speaker 11: One of the reasons it failed is that the audience
• 20:37
  Speaker 11: was it was an attempt to give great credit to
• 20:39
  Speaker 11: people who are under banked who need it desperately. But
• 20:43
  Speaker 11: one of the problems is I didn't understand.
• 20:46
  Speaker 5: That market is this Mint.
• 20:48
  Speaker 11: Well, Mint is not that Mint is a personal finance manager.
• 20:52
  Speaker 10: I did have a hand in that.
• 20:53
  Speaker 11: I've done about three and a half personal finance managers
• 20:58
  Speaker 11: in my time. But this was a subprime lender. But
• 21:02
  Speaker 11: we tried to do lendings two people who did not
• 21:06
  Speaker 11: have good credit ratings. But rather than doing it at
• 21:09
  Speaker 11: five hundred percent, we tried to do it at less
• 21:12
  Speaker 11: than thirty six percent. It didn't work for a variety
• 21:16
  Speaker 11: of reasons. But now I'm back in my MILU. I
• 21:20
  Speaker 11: know about this stuff. Not only do I know about
• 21:23
  Speaker 11: managing money, but also, and most importantly, I know about taxes.
• 21:28
  Speaker 11: I ran TurboTax for ten years now. I've been doing
• 21:30
  Speaker 11: a whole lot of stuff. And the thing about it
• 21:32
  Speaker 11: is if you are an investor. My view, you can't
• 21:36
  Speaker 11: beat the market, but you can harness it, so you
• 21:39
  Speaker 11: need to harness it. That's the pre tax but much
• 21:42
  Speaker 11: more important than pre tax return is your after tax return,
• 21:45
  Speaker 11: because that's all you can put in the bank.
• 21:47
  Speaker 6: All I'm going to say is it's unfortunate though, because
• 21:49
  Speaker 6: here's someone who has done several companies. You understand this world,
• 21:53
  Speaker 6: and the underbank need representation and they need platforms. So
• 21:57
  Speaker 6: it's a shame that it is so tough. It is
• 22:00
  Speaker 6: kind of get these things going.
• 22:01
  Speaker 3: Yes, yeah, when do you know as an entrepreneur or
• 22:04
  Speaker 3: when do you admit failure when you know it's just.
• 22:07
  Speaker 7: Not you're to pull the plug.
• 22:08
  Speaker 11: Never early enough, okay, never early enough. First of all,
• 22:14
  Speaker 11: I've been I've been more frequently wrong by being too
• 22:17
  Speaker 11: early than too late.
• 22:19
  Speaker 10: And so when you're really early, you're the pioneer.
• 22:22
  Speaker 11: You've got the arrows in your back, and you're just
• 22:25
  Speaker 11: trying to do too much, break too much ground all
• 22:28
  Speaker 11: at once, and the market's usually not ready for you.
• 22:32
  Speaker 11: But if the market is on an upswing just starting,
• 22:36
  Speaker 11: that's the time to get in.
• 22:38
  Speaker 6: What do you find interesting about fintech there's just been
• 22:40
  Speaker 6: so many iterations and I think if you layer on
• 22:42
  Speaker 6: now what's going on with AI, how does that kind
• 22:44
  Speaker 6: of continue to disrupt that space.
• 22:47
  Speaker 11: Well, the great thing about financial technology and it's like media,
• 22:53
  Speaker 11: those are the two industries that can be completely digitized.
• 22:56
  Speaker 11: There is nothing physical about it, and so that's the
• 22:59
  Speaker 11: cool thing. You can do so much new stuff so
• 23:02
  Speaker 11: quickly because there's nothing physical that you have to either
• 23:06
  Speaker 11: build or transport.
• 23:08
  Speaker 10: AI.
• 23:09
  Speaker 11: We're really on the forefront of bringing AI into the
• 23:12
  Speaker 11: financial space because what you need to do is do
• 23:18
  Speaker 11: more than simply go to GPT. You need to build
• 23:21
  Speaker 11: a financial knowledge base, and then you have to build
• 23:26
  Speaker 11: a client portrait because if it is only GPT, all
• 23:29
  Speaker 11: you're getting is information. If I know about you and
• 23:33
  Speaker 11: your finances, now I can combine the information and the
• 23:35
  Speaker 11: understanding of the client and build a true advice engine
• 23:40
  Speaker 11: tell people in their particular circumstances what their consideration should be.
• 23:44
  Speaker 6: So Paul Sweeney gets an agent or agentic AI that's
• 23:47
  Speaker 6: just built for him essentially.
• 23:49
  Speaker 11: Well, yes, first, let me just say we don't do
• 23:51
  Speaker 11: only AI. We have what I think is the ideal
• 23:55
  Speaker 11: combination of human professional advisors and the AI resources, combine
• 24:00
  Speaker 11: them together. But yes, we know everything we can about
• 24:05
  Speaker 11: you and your finances, including not only what you own
• 24:08
  Speaker 11: both internally and externally, but also all of the conversations
• 24:12
  Speaker 11: you've had with us, and we put all that stuff
• 24:15
  Speaker 11: together and then apply the advice.
• 24:18
  Speaker 10: Engine to that.
• 24:20
  Speaker 3: Nomah Friedman, CEO of Uncharted, was our guest earlier this morning.
• 24:23
  Speaker 2: He made a comment about AI.
• 24:24
  Speaker 3: Yeah, that if you don't have AI in your story,
• 24:27
  Speaker 3: it's tough to raise capital today.
• 24:29
  Speaker 2: And maybe that's.
• 24:30
  Speaker 3: A concern of his crowding out some other ideas besides.
• 24:34
  Speaker 10: That, something that's absolutely true.
• 24:36
  Speaker 11: Okay, the money, the money always chases the fat, and
• 24:39
  Speaker 11: I'm not saying AI is a fat.
• 24:41
  Speaker 10: It is not.
• 24:42
  Speaker 11: It is here to stay, and it's powerful. I mean,
• 24:44
  Speaker 11: I've been long enough, I'm old enough that I've been
• 24:46
  Speaker 11: in this business long enough to see a series of revolutions.
• 24:50
  Speaker 11: You know, the PC, the Internet, the mobile, now AI.
• 24:53
  Speaker 10: It's real.
• 24:54
  Speaker 11: However, when these things come in, there is such a
• 24:57
  Speaker 11: fury and so much focus on on the thing that yes,
• 25:02
  Speaker 11: it crowds everything else out and that's a shame, but
• 25:04
  Speaker 11: it's going to.
• 25:05
  Speaker 5: Make it better in your view in terms of like
• 25:07
  Speaker 5: wealth management and.
• 25:08
  Speaker 10: Oh, wealth management. Absolutely.
• 25:09
  Speaker 11: Most of the big firms are looking at AI to
• 25:12
  Speaker 11: reduce cost. They look at their contact center. I've got
• 25:15
  Speaker 11: five thousand people, sorry, five hundred people. Can I get
• 25:17
  Speaker 11: it to fifty? We have the benefit of not having
• 25:20
  Speaker 11: that objective, and so we can use AI actually to
• 25:23
  Speaker 11: make the service better.
• 25:26
  Speaker 3: Other than AI, yeah, other than AI. Dare you where should.
• 25:30
  Speaker 2: I be looking?
• 25:31
  Speaker 3: If I were a funder and a VC. Where else
• 25:35
  Speaker 3: can I see some opportunities? Do you think when I
• 25:38
  Speaker 3: come here?
• 25:38
  Speaker 2: Who do I want a corner?
• 25:41
  Speaker 7: Well?
• 25:42
  Speaker 11: You know, gosh in the financial services arena. What I
• 25:47
  Speaker 11: would say is anybody who is taking on a big,
• 25:53
  Speaker 11: established giant, because increasingly it's always been the case in technology,
• 25:58
  Speaker 11: but increasingly the people that I want to compete with
• 26:01
  Speaker 11: are big, have strong reputations, have customers, have assets, have
• 26:06
  Speaker 11: the whole thing. The problem is that they've got an
• 26:09
  Speaker 11: installed base. And the good Lord created the world in
• 26:13
  Speaker 11: seven days, he didn't have an installed base, yep, And
• 26:17
  Speaker 11: so they can't move and that's the opportunity.
• 26:20
  Speaker 3: Ohk ahead are the big banks.
• 26:23
  Speaker 2: When Karen and I.
• 26:24
  Speaker 3: Talked to the big financial institutions and go visit them,
• 26:26
  Speaker 3: all they talk about is the investments they are making
• 26:29
  Speaker 3: in AI to better serve their customers. That's tough for
• 26:34
  Speaker 3: guys like you who want to kind of dissin intermediate.
• 26:36
  Speaker 10: Well, it's not really, it's not really.
• 26:37
  Speaker 11: I mean, what they're doing in many of them are
• 26:39
  Speaker 11: doing very good work. However, it's a very different environment
• 26:45
  Speaker 11: paradigm people process the whole thing. Let's just before AI.
• 26:51
  Speaker 11: Let's just talk about software. They have thousands, if not
• 26:56
  Speaker 11: tens of thousands of software engineers.
• 26:58
  Speaker 10: Here India, all around the world.
• 27:00
  Speaker 11: I'm looking at, you know, twenty five and yet when
• 27:04
  Speaker 11: I really focus, I can move a heck of a
• 27:06
  Speaker 11: lot faster than they can.
• 27:08
  Speaker 6: What's kind of interesting about today's environment investment, environment innovation.
• 27:12
  Speaker 6: I'm just curious someone who's seen a lot of cycles,
• 27:14
  Speaker 6: right seeing things really change, some things didn't always pan out,
• 27:17
  Speaker 6: But I'm just curious.
• 27:19
  Speaker 11: Well, I don't think you can predict the cycle, but
• 27:22
  Speaker 11: you have to be ready for it. And that means
• 27:25
  Speaker 11: always always have enough funding to get through whatever would
• 27:30
  Speaker 11: come at you in the next eighteen month. And you know,
• 27:33
  Speaker 11: the time that you're taking a real risk is if
• 27:35
  Speaker 11: you let yourself get down to six month funding or
• 27:37
  Speaker 11: something of that nature. Right now, all of a sudden
• 27:40
  Speaker 11: the market goes against you and your toast.
• 27:42
  Speaker 5: Is it a tougher cycle? How do you describe though?
• 27:45
  Speaker 6: I mean right now, well, we have seen in what
• 27:47
  Speaker 6: three or four months has just been crazy, But we've
• 27:50
  Speaker 6: been through tough times COVID great financial crisis other times.
• 27:53
  Speaker 11: Oh yeah, Listen, the tech world goes through incredible roller coasters.
• 27:57
  Speaker 10: Up and down all the time.
• 28:00
  Speaker 11: They're usually sort of multi year cycles, but nevertheless they're
• 28:04
  Speaker 11: very high, very low. I mean, I'm old enough to
• 28:08
  Speaker 11: have lived through the Internet bubble where the Nasdaq, you know,
• 28:14
  Speaker 11: was reduced by eighty percent and a decade to get back.
• 28:17
  Speaker 11: It took a decade to get back, and so you
• 28:20
  Speaker 11: have to be ready for that. So get yourself funded,
• 28:23
  Speaker 11: don't overspend, and be ready for whatever comes at you.
• 28:27
  Speaker 3: How long should I go before I think I'm going
• 28:30
  Speaker 3: to have success? Is there any kind of blueprint?
• 28:32
  Speaker 2: Is it a year? Two years, three years?
• 28:34
  Speaker 11: Well, once again, I'm not sure that I'm the guy
• 28:36
  Speaker 11: to answer, because I tend to stick with it longer than.
• 28:39
  Speaker 10: I probably should.
• 28:40
  Speaker 11: Got you, but if you don't have a significant you've
• 28:45
  Speaker 11: got a lot of pivots along the way.
• 28:46
  Speaker 10: You're going to take some dark alleys.
• 28:48
  Speaker 11: But if you don't have something that really feels right
• 28:50
  Speaker 11: and starts to move upward within two years, it's time.
• 28:53
  Speaker 10: To rethink it.
• 28:54
  Speaker 6: Listen, I think we only got about thirty forty seconds
• 28:56
  Speaker 6: left here, Bill, and I do always wonder about someone
• 28:58
  Speaker 6: like yourself, Like.
• 28:59
  Speaker 5: You know, always asks like what are you reading?
• 29:01
  Speaker 2: Who are you watching?
• 29:01
  Speaker 6: But is there somebody out there that you like kind
• 29:04
  Speaker 6: of look to for cues about kind of where the
• 29:07
  Speaker 6: world is going, what's next, pecially when it relates to
• 29:09
  Speaker 6: your world.
• 29:10
  Speaker 11: Well there's a lot of them, but I'll just mention
• 29:12
  Speaker 11: one person who's stuck their head up again is Mary Meeker. Yeah,
• 29:15
  Speaker 11: Mary Meeker. For years and years and years, she did
• 29:18
  Speaker 11: the book The Bible on the Internet. Then she went
• 29:21
  Speaker 11: off and became a VC and we didn't hear from her.
• 29:23
  Speaker 11: All of a sudden she's picked back up and she's
• 29:25
  Speaker 11: done the book.
• 29:26
  Speaker 3: On a really interesting I have to look out for
• 29:29
  Speaker 3: that because that is a question to read.
• 29:30
  Speaker 10: Yeah, go for four hundred pages of solid information.
• 29:34
  Speaker 3: That's why she was the best on the street for
• 29:35
  Speaker 3: a long time. Bill, thanks so much for journey. Us
• 29:38
  Speaker 3: really appreciate it. Bill Harris's former CEO of PayPal, getting
• 29:40
  Speaker 3: his thoughts on entrepreneurship.
• 29:42
  Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,
• 29:47
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• 29:50
  Speaker 1: weekday ten am to Nooneystern on Bloomberg dot com, the
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• 29:58
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• 30:02
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