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- [00:00]
Carol Massar
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- [00:44]
Kate Gulliver
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- [01:08]
Carol Massar
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- [01:47]
Tim Stenovec
Podcasts Radio News this is Bloomberg businessweek Daily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies and trends shaping today's complex economy. Plus global business, finance and tech news as it happens. The Bloomberg businessweek Daily Podcast with Carol.
- [02:10]
Joe Doe
Massar and Tim Stanweck on Bloomberg Radio hi everyone.
- [02:15]
Carol Massar
Welcome to the Bloomberg businessweek Week Weekend Podcast. Yes, it was a big, big week with the Fed cutting rates as expected, but surprising markets as Fed chair Jay Powell said. Another cut in December, Not a given. Also, earnings from five of the Mag 7 Alphabet, Amazon, Apple, Meta and Microsoft. It was a lot, Tim.
- [02:34]
Tim Stenovec
It was a lot. And so this hour, what you need to know from the earnings of those mega cap tech companies and on the massive AI buildout and spend because that, Carol, is what moved some of these stocks.
- [02:44]
Carol Massar
Totally. Totally. That was the big headlines. Also, we always love to get a read on how consumers are feeling and spending their money. We Got a view from the chief financial officer at Wayfair, Kate Gulliver. She gave us a pol check on a certain segment of the consumer. Are we talking about women who buy pillows?
- [03:01]
Tim Stenovec
Well, more than just that. I mean, people have the money to spend. Maybe some people who are actually moving right now.
- [03:06]
Joe Doe
That's true.
- [03:07]
Tim Stenovec
You know, trading in for bigger and better stuff. Growing families. I don't know.
- [03:11]
Carol Massar
And women who buy pillows.
- [03:12]
Tim Stenovec
Okay, well, you're speaking for yourself. You mentioned the pillows. It comes up. It's just a little tease for our chat with Kate. It actually does look like the US Has a sovereign wealth fund now. We're going to explain a little later.
- [03:24]
Carol Massar
Have you checked who is the third biggest shareholder in intel lately?
- [03:28]
Tim Stenovec
It's interesting, Carol, because we also have a lot of debt. Yeah, and typically, countries that don't have a lot of debt don't have a sovereign wealth fund.
- [03:36]
Carol Massar
So many questions. We're gonna try and answer some of them. And what's going on? Plus, in her second hour, over 55,000 runners will be participating in the New York City Marathon this weekend, including, can I say.
- [03:47]
Tim Stenovec
Yeah, you can say it. You're not gonna find her someone, you know, someone I know really well. She's not gonna. She's not. I'm not saying her name. She would not be happy about that. But my wife is running.
- [03:57]
Carol Massar
That's why I don't say her name either.
- [03:59]
Tim Stenovec
She. The New York City Marathon.
- [04:01]
Carol Massar
All right, well, we're going to be talking with the CEO of the New York Roadrunners Club, so looking forward to that. First up, though, we start with this past week's earnings from the companies whose stocks influence US Market moves more than any others. And as we said, it was a huge week for big tech earnings. Microsoft, Alphabet and Meta and many more. A couple more, in fact, all showing that the AI spend is on. With a look at some of the Mag 7 reporting this week, we talked with Mark Mahaney. He's senior managing director and head of Internet research at Evercore ISI. He's also author of Nothing But Net 10 Timeless Stock Picking Lessons from one of Wall Street's top tech analysts.
- [04:36]
Tim Stenovec
Mark, I think we want to begin with meta platforms. Is the stock down as a result of what it said about Capex next year?
- [04:43]
Joe Doe
Yeah, the Capex and the total expense guidance that they gave for next year was more aggressive than the market wanted. This company, Zuckerberg was very clear about it, that he wants to be the AI leader. He's going all in on superintelligence and investors are a little cautious and nervous about that.
- [04:59]
Tim Stenovec
Why aren't they buying it?
- [05:00]
Joe Doe
Well, maybe for two or three reasons. Tim, you know, you're asking a really good question, which is why aren't they buying it? Well, maybe we don't really know what it is. So, you know, all of us are sort of scratching our heads because I guess we're not super intelligent. I'm not trying to figure out exactly what's, what's going to come out of that. Like what's, what's the product going to be, what's the offering going to be and how are you going to monetize it. That's one reason. We just really don't know what super intelligence is quite yet. Second is it's very competitive. So Google's chasing it, OpenAI is chasing it, and Meta is. And there's probably other companies too. I should assume Apple and, and Microsoft are too. And I think the market's just a little skeptical. It is skeptical that that matter is going to be able to do this sufficiently effectively generate a good financial return. So that's why it's really those two reasons. We don't know what that end market is and we don't. We don't. The market maybe is a little nervous about Meta's odds against that, against that unknown end market.
- [05:56]
Carol Massar
You know what's interesting too, and I've been thinking about this, Mark, is, and by the way, we're creating a superintelligence club right here at Bloomberg, so we would love for you to join in the next club meeting. Hey, you know, is part of it that, you know, the spend for Metta, it's not like they're one of the hypers, you know, they're not Microsoft or Alphabet who can kind of offload some of the spending on other companies. Is that part of it?
- [06:20]
Joe Doe
Yeah, I think that's right. I think, I think you're right in saying that that Amazon sells superintelligence or can AI services to other companies. Microsoft does through Azure. They have cloud services and so does Google. And there's not kind of that obvious external commercial enterprise offering. Meta doesn't have that. So the return is going to have to be on Meta itself. And maybe at some level that maybe that's the third reason why the market's a little skeptical.
- [06:47]
Carol Massar
And so skepticism, smart as we should be, in any environment, especially when there's a big spend out there, you still have an outperform on matter. So time, give it a little time, right, to kind of watch and see how this plays out.
- [06:57]
Joe Doe
Yeah, I'm going to take the the opposite side this. So this is what I've learned following Metta for a long time. But just in the last couple of years this company aggressively invested in AI and they used it to dramatically improve their core products. Instagram, WhatsApp, Facebook. What's the evidence? Well, consumer engagement has increased materially over the last couple of years and advertiser returns have increased materially over the last couple of years. What's the evidence of that? Meta has probably got the strongest advertising revenue growth. You know, 25, 26% at scale at 200 billion revenue run rate. That's better growth than anybody else has in the direct competitor has in the sector. Maybe I'd be surprised by one name in there, but I doubt it. So, so to me, I step back and I think, well, they've actually shown a great ability to deploy AI to improve their core products. I'm going to give them the benefit of the doubt that they could probably deploy AI to create new products. And you know, they just start off with so much, I call them the three Cs compute capital and Cranium that you know that there's probably going to be more than just one winner in superintelligence. And I think Meta is a decent chun shots winning it. And by the way, I don't have to, I don't have to spend too much on this. The stock trades at close to a market multiple and this is so different Carol, than three years ago when Meta's core business was under attack. Existential risk coming from TikTok and they were throwing money at this thing called the Metaverse. This is three years later and there's no existential risk to core Meta. And in the meantime they're throwing money into something or investing aggressively into something that some of the sharpest other technology companies are. There's probably a there there if Amazon, If Google, if OpenAI, Microsoft and Meta are all betting on or investing in superintelligence.
- [08:42]
Carol Massar
I do think about Meta a lot. You know, when they came out of their IPO and reception not necessarily so good in the pivot in terms of was it mobile that they needed to think about more. And then the, and then you know, they moved quickly and then Metaverse all in and then maybe that wasn't right and they pivoted again. Like there is something to be said that this company does look, you know, Tim, at kind of what's going on and then making the necessary adjustment quickly.
- [09:03]
Tim Stenovec
Well, on that Mark Mahaney, the idea of the cranium part of this and maybe this is not what you're referring to when you said cranium. But we got to talk about face computers. This idea of the ray ban meta gen 2 glasses, the success, the runaway success. I was surprised to see how successful or have been surprised to see how successful meta has been when it comes to wearables. Aron Mark Gurman loves these things when he tried them a few months ago in the user interface is the next. You've covered a lot of cycles. Is the next platform for computing wearable glasses?
- [09:33]
Joe Doe
I don't know. I guess I'm skeptical that it is. It's possible. I don't know why. I doubt there's one solution out there. I think wearable glasses can be one solution. I. It's probably more than a niche, but I don't know that it's mass market. So I don't know what the.
- [09:49]
Tim Stenovec
Some.
- [09:49]
Joe Doe
Something in the middle there. I, I guess I'm a little skeptical. But you know, they've certainly. This is a heck of a lot, this product is a heck of a lot better than what I wasted money on with Google Glasses years ago. But all this stuff feeds on and builds on itself.
- [10:02]
Tim Stenovec
Well, I'm just having trouble then understanding where superintelligence comes into this. And like you said, we haven't seen this before. But if that's what the big bet is and that's what all these companies are working on, how does that manifest in a product? Is it that Instagram just becomes that much better at knowing us and that our targeted advertising is that much better? Is that it?
- [10:19]
Joe Doe
I hope there's within that, I think the vision that's been that Zuckerberg has talked about just as much as anybody else Sam Altman's talked about it is a personal digital assistant. So an AI assistant that would not only find information, do research for you, help you figure out how to buy a new car, what are the best running shoes for you, but also help you perform tasks like maybe buy that car or buy those shoes for you at the best price and get them, you know, with the fastest speed and perform tasks for you, like help you book that family vacation not in the average three and a half hours that most families take, but in, you know, 30 minutes or 20 minutes or 15 minutes and do all these tasks, you know, kind of do them for you and you can come back and have them done. So I think that's how to think about it. I, you know, I'm hoping that all that comes together. Look, I try. I spend A lot of time with Gemini. I've spent a lot of time with, you know, chat GPT and, and you know, I've run it through its paces and, and doing projects and tasks like that, they're not, they're not there yet. But I see the potential and I see the ongoing improvement. So I think that's what we're waiting for. These personal AI assistants that are going to be able to research, find information and perform tasks for us and going to do it seamlessly and quickly and that's what we're all sort of hoping for.
- [11:37]
Carol Massar
That's Mark Mahaney, senior managing director and head of Internet research@ Evercore ISI.
- [11:43]
Tim Stenovec
On Thursday, both Apple and Amazon reported results. More on that ahead. We started with a look at the numbers from the world's largest online retailer with Bloomberg Intelligence senior analyst for E Commerce and Athleisure Poonam Goyal.
- [11:56]
Kate Gulliver
Sales were very good across the board, across all business segments, aws, online advertising, even physical stores. So from a top line perspective, very, very encouraging results. In fact, AWS was probably the bright spot here. 20% gains, we haven't seen that in a while. On the margin side, I think AWS did really well, but then when it came to North America margins, they were weaker than we expected. So it's the only one area that I saw some skepticism and I think that's largely due to their ability to want to maintain low prices to make sure the consumer keeps coming back and investing in its fulfillment.
- [12:34]
Tim Stenovec
So you think that margins took a hit because Amazon is keeping prices low? Why?
- [12:39]
Kate Gulliver
I mean, they, they want to drive market share gains. Right. So if you think about what's happening in retail this year, tariffs have clearly added to costs and many retailers have decided to offset those costs through efficiencies, try to keep and hold prices steady or raise them selectively. So that could be part of the pressure. And then also, you know, Amazon has stepped up its game on shipping where it was the leader and it still is the leader, but they're continuing to invest there to get items to you faster, same day, etc.
- [13:10]
Carol Massar
So what else can you give us in terms of color on the retail side of the business, which is something that so many of us. Right. Identify very clearly with when it comes to Amazon.
- [13:20]
Kate Gulliver
Yeah, I think, look, they're making all the right investments to improve profitability in the longer term. Amazon's retail businesses finally break even to profitable. It took a long time to get here and I think automation will be the next leg of growth to drive that further. But As I mentioned, you know, earlier, AWS is driving their EBIT margins so us can compensate these investments to a certain extent and so can advertising because the margins here are just so much higher than they'll ever be able to get in the retail business.
- [13:51]
Tim Stenovec
How is, how is the advertising business doing?
- [13:54]
Carol Massar
It's doing really well.
- [13:55]
Kate Gulliver
It grew 22% in constant currency in the quarter, so right where we expected. And I think, you know, that's a high profit business. It's about 75 to 80% profit margins by our estimates. And that's flowing right to the bottom line. We see it going to $100 billion. So there's a lot of improvement that they can build in advertising and really drive that business higher from here.
- [14:16]
Tim Stenovec
Where is that coming from? Is that coming from interstitials placed in Amazon pr, which caught a lot of people off guard when they started doing that? It was last year maybe, or. Yeah, yeah. Or is it? Or is it coming from like products that are paid for placement?
- [14:29]
Kate Gulliver
I think it's a combination of both. You're absolutely right. These ads are driving incremental revenue. But if you think about the base of this revenue base, it's still coming from product advertisements. The ads do help and they will become a larger driver as the ad business grows in size, but the core of it is still product advertisement.
- [14:47]
Tim Stenovec
That's Bloomberg Intelligence senior analyst for E Commerce and Athleisure Putnam Goyal.
- [14:52]
Carol Massar
Still ahead on Bloomberg Businessweek, the Trump White House continues its investment push. This time they're going nuclear.
- [14:58]
Tim Stenovec
This is Bloomberg.
- [15:03]
Joe Doe
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- [15:46]
Josh Wingrove
All investing involves the risk of loss, including loss of principal brokerage services for.
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Joe Doe
U.S. listed registered securities options and bonds in a self directed account are offered.
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Josh Wingrove
By Public Investing Inc.
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Joe Doe
Member FINRA and SIPC.
- [15:56]
Josh Wingrove
Crypto trading provided by ZeroHash Complete disclosures available at public.com disclosures Introducing the all.
- [16:03]
Carol Massar
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- [17:00]
Tim Stenovec
This is Bloomberg Businessweek Daily with Carol Massar and Tim Stanweck on Bloomberg Radio.
- [17:08]
Carol Massar
The Trump administration is taking the same investment strategy it has applied to mining, steel and semiconductor companies to a new area domestic nuclear reactors.
- [17:17]
Tim Stenovec
The US Will be the initial buyer for multiple reactors from Westinghouse. That's according to Simon Maine, a spokesman for Brookfield Asset Management. It's one of the manufacturer's owners now.
- [17:28]
Carol Massar
Tim that news comes just shortly after reporting that the White House House is in early stage conversations with quantum computing companies to discuss potential financial support for an industry that's part of the growing race with China for technology supremacy. And after taking stakes, as you know, in a lot of other companies, we're talking about Intel, MP Materials, Trilogy Metals and Lithium Americas.
- [17:50]
Tim Stenovec
To help us make sense of what some say is a push to create a sovereign wealth fund, we caught up with Bloomberg News economic Statecraft reporter Joe Doe and Bloomberg News senior White House correspondent Josh Wingrove.
- [18:02]
Josh Wingrove
Our reporting is that these talks are ongoing but preliminary. Remember, Biden had his CHIPS act and they sort of made all these pledges. Trump's administration has made clear that they are really determining, let's say, or reprofiling a lot of this funding. We've seen it, of course, with the intel discussions and them converting the CHIPS act award into sort of an equity stake. Frankly, Democrats wondered whether that was legal or not. And now the question is what they do with other CHIPS act funding, in particular on R and D funding. And our understanding is that that is what is being sort of kicked around now, not necessarily limited to Quantum Computing, but early stage preliminary discussions, you know, I don't want to, you know, find myself at odds with the Wall Street Journal, but our understanding is that this has not yet proceeded to the, you know, hashing out of direct stakes in that kind of stage of things. But I suppose time will tell. What is clear is essentially from all this reporting that there is a sort of a trajectory here. Right. The Trump administration sees quantum as a sector that it wants to bolster, invest, maybe add to its sort of strategic landscape, if you will, of industries that Trump is getting more and more involved in and, you know, trying to support domestic development of. And so whether, you know, how far it goes and how far it is, you're seeing some conflicting reporting on it candidly right now. But, but the trajectory seems to be pointing in one direction, which is the quantum is something they're sniffing around.
- [19:24]
Carol Massar
All right, so Joe Doe, come on in. And what you're hearing. But I also want to layer on top of that, you know, in essence, is the United States via President Trump kind of actually operating, if not officially, kind of a wealth fund of the United States as it continues to ponder taking positions in companies private or others, a lot of public companies already having taken stakes as well.
- [19:49]
Joe Doe
In short, yes, listen, I think look at this quantum computing article that we have out and you add it to some earlier reporting that Josh and I had about a tungsten deposit that the US Is backing a US Private company to purchase. Add on top of that, Intel US Steel, MP Materials. It goes on and on and on. And what we're really seeing is a United States federal government that is comfortable with having a pretty broad reaching portfolio that hit it is either taking active stakes in or financial backing to have some direction in terms of these companies that they believe are significant in terms of national security. And I think if I can tie it to that question of the sovereign wealth fund question, if you look at this quantum computing story, as Josh says, at the very least it points out how broad reaching the administration's idea of what is nationally significant for security purposes really is.
- [20:48]
Tim Stenovec
Yeah, I think the question that, that I have is what happens, Josh? Or yeah, Josh, I mean, what happens to the companies that do not get investments from the United States? What about competitors in the space? Whether we're talking about quantum computing companies or we're talking about rare earth miners or we're talking about metal producers, like what happens to those?
- [21:10]
Josh Wingrove
I mean, this is the question of the sort of handful of conservatives who are willing to speak aloud what a larger number of conservatives have Long and always believed and probably still believe, which is that they don't feel comfortable with presidents of either stripe picking winners and losers. Right. This used to be something that the Republican Party, you know, this was not a tree that they were barking up all that often. And so Trump has changed the calculus in so many ways. So I think there's a few things swirling here. Number one, of course, how far will it go? We just don't know. And it's also unclear whether Congress, including, but not limited to Republicans, would start, you know, sticking its head up and saying, hey, wait a minute, in particular with how they're interpreting the CHIPS act, which was a bipartisan bill that, in the eyes of the lawmakers behind it, set out the rules of what you can and can't do. And number two is, okay, well, if this is the new reality and if the Republican Party is really moving on this, where does it go from here? And if, you know, if the next president's a Democrat, decides to take it further than this, you know, or even roll it back, it's just really up in the air right now. But President Trump has made it clear, as has Secretary Lutnick, that they're both interested in this sort of idea of like getting skin in the game or getting something in exchange for taxpayer support, they call it. You know, they see it basically as a fairness issue. You do not get the support of the government if we're not getting something out of it ourselves. And so I think there's no sign that it's going to slow down right now with this administration.
- [22:30]
Tim Stenovec
Joe, you cover economic statecraft. You've spent many years covering metals and mining. You understand rare earths. This is sort of the perfect cross section of what you've been focused on for your career. But if we think about now, the Trump administration taking investment in many different types of industries, from tech to metals to rare earths. What are people talking about could be next?
- [22:54]
Joe Doe
Everything.
- [22:55]
Tim Stenovec
I mean, I mean, throw intel in there, right?
- [22:58]
Carol Massar
Yeah.
- [22:58]
Joe Doe
I mean, this is the great experiment when, you know, Josh and I and Ryan, we had the terrific scoop that intel was suddenly on the map for an equity stake.
- [23:08]
Josh Wingrove
Right.
- [23:09]
Joe Doe
I think. I think that really got the attention of investors in a way that, like, MP materials and critical minerals had not. I mean, the kind of scale you're talking about with intel shows you how big this administration is willing to think in terms of using the full force, the United States federal government, to put into motion the things it thinks are important and where we go from here. I mean, yeah, phone calls that I sometimes have with Josh and others saying, hey, we should look at this thing. It is wild and why is being reportable.
- [23:45]
Tim Stenovec
That was Bloomberg News economic statecraft reporter Joe Doe and Bloomberg News senior White House correspondent Josh Wingrove.
- [23:51]
Carol Massar
And speaking of Nvidia, it's also partnered with yet another company. This week, the AI chipmaker took a 2.9% stake in Nokia, using its chips to boost Nokia software for 5G and 6G networks. Bloomberg's Ed Ludlow sitting down with the CEOs of both Nvidia and Nokia following that announcement. And here is some of that conversation with Jensen Huang and Justin Hotard.
- [24:13]
Josh Wingrove
If we take advantage of this transition from general purpose computing to accelerated computing, from old types of types of software to AI, we can take advantage of this transition of AI and 6G for America to win back telecommunications again. It's been a long time since the American telecommunication network has been built on America.
- [24:32]
Tim Stenovec
American technology, use the word national security.
- [24:34]
Josh Wingrove
I believe for national security reasons, for economic reasons, our industry should be built on American technology. And for the very first time we can do that. We have a brand new product line that takes advantage of computing, accelerated computing and AI. And we have a great partner to help us do it. With Nokia, there was a time when Nokia was already looking to America. You've been in the role since April, but may I start by asking you what role the administration plays in bringing you both together, if this is indeed a strategic priority. I don't think there was anything specific that the administration did other than they've created the environment to support innovation. I mean, Jensen's talked about manufacturing, but it's also about R and D and innovation and technology leadership. And if you think about where this world is going and all those incredible devices are going to be built on Nvidia platforms, robotics, autonomous vehicles, augmented reality, virtual reality. We need a different kind of network in the future. And that's what we realized and that's why we wanted to forge this partnership so that we're building a network leveraging AI for AI services. And that's really the big change here. The technology is flowing both ways.
- [25:41]
Tim Stenovec
I mean, what is it that you.
- [25:42]
Josh Wingrove
Will be able to do with Nokia, Jensen, that you weren't able to do on your own? Well, first of all, Nokia is in all of the world's base stations and this air scale platform, Nokia and millions of base stations around the world, if our computers are not inside that base station, doesn't help. It's no different than Nvidia's tech computing platforms. Not Inside a car doesn't help. And so, so the first thing is we need a partner to get us into the world space stations. We also remember we're bringing AI to radio networks, to ram so that we can make wireless communications a lot more efficient. Second, we're bringing AI for the radio, meaning on top of these radio networks and these telecommunication network, we're going to be able to provide AI services, which is going to be able to make it easier for us to do robotics and autonomous vehicles and industrial automation and reach all of the different places around the world that's kind of hard to do with WI fi, cellular reads everything. And so we now have this fabric that we can deploy AI computing services on top of. It's going to be be completely revolutionary.
- [26:45]
Tim Stenovec
That's Nvidia CEO Jensen Huang and Nokia CEO Justin Hotard speaking with Bloomberg's Ed Ludlow this week about their new partnership that has Nvidia taking a nearly 3% stake in Nokia.
- [26:57]
Carol Massar
Now I think what's interesting too, this past week we did have a big Nvidia event, the GTC event in Washington D.C. that they held. And we heard from Jensen Huang, right, the CEO of Nvidia, about a lot of stuff and a lot of things that move certainly the share price of Nvidia to the upside this past week, but a lot about relationships that it is for forging and continues. But he did also say that the government has not offered to take a stake in their company, Nvidia.
- [27:23]
Tim Stenovec
Well, first, for the moment, yes. Can we afford it?
- [27:27]
Carol Massar
Well, that's a good question. I mean, where does this money come from?
- [27:30]
Tim Stenovec
Obviously we could, we could afford it, but we're talking about a market cap company that this week hit $5 trillion for the first time ever. It's also a little different than some of the other companies that the US has taken a stake in. It's not struggling. It basically prints cash. It has this incredible moat with its technology that AMD and Qualcomm are trying to catch up with.
- [27:54]
Carol Massar
Right.
- [27:54]
Tim Stenovec
And others. So to me, it doesn't seem like the type of target that the US like. It doesn't need the US's help.
- [28:03]
Carol Massar
Right. Doesn't need the support.
- [28:04]
Tim Stenovec
It doesn't need the support it's doing.
- [28:07]
Carol Massar
Didn't it hit 5 trillion?
- [28:09]
Tim Stenovec
Yeah.
- [28:09]
Carol Massar
Market cap this week? Yeah, I guess it's doing okay. Oh, you did say that. I just think it bears repeating. I'm just gonna say I do listen to you, Tim. Hey, the other thing we should mention about when it comes to Nvidia, this was serious. President Trump saying he didn't discuss approving sales of Nvidia's Blackwell chips to China with his counterpart, President Xi Jinping. And that was one of the things that was part of these supposed to be part of the US China trade talks. But it was interesting. It was a big thing that was missing from whatever agreement they seem to come to.
- [28:40]
Tim Stenovec
Well, speaking of trade, given the trade tensions between the US and many other parts of the world over this year, some furniture makers have taken a big hit as a result of those tariffs. And the president says he does want to make more furniture here in the United States.
- [28:55]
Josh Wingrove
That'll be good.
- [28:55]
Carol Massar
That means I can buy more furniture. I hope my husband isn't listening.
- [28:58]
Tim Stenovec
No, it means it's going to be more expensive.
- [29:00]
Carol Massar
Darn.
- [29:00]
Tim Stenovec
There is some beautiful stuff out of North Carolina though.
- [29:02]
Carol Massar
There is. There always is. Hey listen, we've got a great look at consumer spending, at least when it comes to things like couches, pillows, drugs and all that good stuff, you know, home furnishings. The CFO of Wayfair, she joins us next.
- [29:15]
Kate Gulliver
It still remains for us that the consumer is quite focused on promotional events. And so she our consumer is typically a woman, you know, mass market, and she needs those promotional events to really come in off the sidelines and get excited to shop. We've talked in the past about, you know, how the promotional events really work as a marketing banner to get someone interested in the category and to then bring them in to the site. And that is still the case. Those promotional events are pretty necessary to get the consumer engaged and excited.
- [29:46]
Tim Stenovec
This is Bloomberg.
- [29:49]
Joe Doe
Support for the show comes from public.com you're thoughtful about where your money goes. You've got your core holdings, some recurring crypto buys, maybe even a few strategic option plays on the side. The point is is you're engaged with your investments and Public gets that. That's why they built an investing platform for those who take it seriously. On public you can put together a multi asset portfolio for the long haul. Stocks, bonds, options, crypto, it's all there. Plus an industry leading 3.6% APY high yield cash account. Switch to the platform built for those who take investing seriously. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing.
- [30:32]
Josh Wingrove
All investing involves the risk of loss including loss of principal.
- [30:35]
Joe Doe
Brokerage services for U.S. listed registered securities.
- [30:38]
Josh Wingrove
Options and bonds in a self directed.
- [30:39]
Joe Doe
Account are offered by Public Investing Inc. Member FINRA and SIPC.
- [30:43]
Josh Wingrove
Crypto trading provided by ZeroHash Complete disclosures available at public.com disclosures Introducing the all.
- [30:50]
Carol Massar
New Adobe Acrobat Studio now with AI powered PDF spaces. Do more with PDFs than you ever thought possible. Need AI to turn 100 pages of market research into five insights with a click? Do that with Acrobat. Need templates for a sales proposal that'll close that deal. Do that with Acrobat. Need an AI specialist to tailor the tone of your market report to sound real smart in real time. Do that with the all new Adobe Acrobat Studio. Learn more@adobe.com do that with Acrobat how can you free your team from time consuming office tasks? Amazon Business empowers leaders to not only streamline purchasing, but better support their teams. Smart business buying tools enable buyers to find and purchase items fast so they can focus on strategy and growth. It's time to free up your teams and focus on your future. Learn more about the technology, insights and Support available@AmazonBusiness.com this is Bloomberg Business Week.
- [31:48]
Tim Stenovec
Daily with Carol Massar and Tim Stenovec on Bloomberg Radio.
- [31:53]
Carol Massar
Seeming the US Central bank would follow its second straight interest rate cut with another in December, Fed officials are divided about how much to ease as the ongoing government shutdown limits the economic data, usually at the basis of the rate's decision. It's not only that there's division, it's not even about how much to ease. Some think there shouldn't be any easing.
- [32:14]
Tim Stenovec
Policymakers did, though, receive a delayed report last week on the Consumer Price Index. And the whole reason we got this report, Carol? Social Security, Cost of living?
- [32:23]
Carol Massar
Yeah, totally. I mean, these are employees.
- [32:25]
Tim Stenovec
That's like a one off.
- [32:26]
Carol Massar
Well, you know. Yes, yes, but it's also like those folks are voters and so you kind of don't want to mess around with them.
- [32:34]
Tim Stenovec
It did. That report, though, did show that underlying inflation rose in September at the slowest pace in three months. Is inflation slowing consumer spending and is it affecting earnings?
- [32:43]
Carol Massar
Good. Couple of questions there. We've got a great look at one slice of how consumers are shopping. Wayfair reported third quarter results that easily topped expectations on the call. Company management gave guidance for the current quarter that topped consensus estimates, and they spent a lot of time talking with analysts and investors talking about the company's efforts to use AI. We caught up with Wayfair CFO Kate Gulliver who said that consumers are still spending money on furniture.
- [33:09]
Kate Gulliver
We're obviously quite pleased with the third quarter results and the subsequent reaction to them. And I do Think it shows all the work that we've been building to over the last few years, shareholders and the enduring strength in the model. And so you saw that top line come in pretty nicely at 8% net, 9% adjusted for the German business. And that really is compounding share gains there in the top line. And that of course flowed through quite nicely to adjusted EBITDA gains.
- [33:34]
Carol Massar
How would you describe the consumer?
- [33:37]
Kate Gulliver
Yeah, you know, it still remains for us that the consumer is quite focused on promotional events. And so she, you know, our consumer is typically a woman, you know, mass market market and she needs those promotional events to really come in off the sidelines and get excited to shop. We've talked in the past about, you know, how the promotional events really work as a marketing banner to get someone interested in the category and to then bring them in to the site. And that is still the case. Those promotional events are pretty necessary to get the consumer engaged and excited. We do see relatively more strength than that higher end consumer for us. That's consumers that are transacting on our Paragould site, which is our luxury brand brand or specialty retail brands. We've said that those are actually growing at a faster rate than the core Wayfair.com business. And you are seeing more strength in that consumer segment.
- [34:29]
Tim Stenovec
Are you talking about promotions? You mentioned them. You have to get consumers excited. You have to get them more excited now than you did any other part of this year. We're really trying to understand the economic environment out there.
- [34:41]
Kate Gulliver
You know what's interesting is this category in particular has been down for so long, strong. So the category, you know, obviously boomed during COVID and then had a pretty significant, significant pullback. 22, 23, 24. So throughout, you know, 24 and 25 for this category, promotions have been critical. You know, I would say what we have seen, you know, really throughout 25 is there's also been some mix shift dynamics in addition to sort of higher end consumer and mass market consumer. You do see consumers that are shopping, are shopping for, you know, things like decorative accents, decor, you know, maybe things with a lower ticket than, you know, buying a new couch or a new chair. And I think that's the idea. Someone wants to refresh and is excited about that, but they want to be mindful of how much they're spending. And so they're looking for the smaller pieces maybe opposed to the big piece.
- [35:34]
Carol Massar
Well, you know, to that point, you know, Kate, I think about the pandemic, we realize that's the anomaly. I mean, I'm looking At your Stock is up 100, 142% this year, which is quite a run, but it's still down about 69% from 2021. We know everyone was at home spending on their home. That's why people were working out at home spending on their pets. There was a lot of stuff going on. So I am curious about, when you look at the third quarter growth, how much came from intrinsic share capture versus category stabilization? Because it does sound like we're seeing a lot of stabilization here.
- [36:08]
Kate Gulliver
Here. It's a great question. We think the category itself is roughly flat to slightly down. So I do think the category has stabilized and we see that we look at a variety of different data sources and you know, they're all slightly different, but they coalesce around a flattish category. This is in contrast to last year where the category was down maybe, you know, mid single digits to, to high single digits. So that's certainly an improvement. But we don't yet see the category as having returned to growth growth. So when we look at sort of 8% growth, right, that's definitely us gaining share on a category that is say flattish.
- [36:43]
Tim Stenovec
When consumers are buying from Wayfair, are they buying to replace stuff or is this trade up activity? What is, what is the data telling us or telling you?
- [36:53]
Kate Gulliver
Yeah, that's a, that's a great question. We're certainly starting to hear that a bit from folks. You know, have we hit replacement cycles? And really to the conversation we were having around the pandemic. It speaks to so much of the, the pull forward in demand that happened during that pandemic period. You know, I think we see a few things that drive, you know, purchase events. One is moving and obviously that part of the category still been, you know, quite suppressed. One would be life cycle changes. So, you know, your kid, you had a baby and now they're moving into a toddler bed or the kid's leaving the home and you're turning their bedroom into an office. So sort of as your life cycle evolves, regardless of if you're moving. And then a third would be, you know, replacement categories or sort of, you know, judging up your room in replacement cycles. I think a lot of folks are eager to see if, you know, what was bought in 2020 and 2021 needs to be replaced at this time. And I think what's helpful to understand there is this is very category by category specific. So if you bought, you know, opening price point outdoor furniture and you live in the northeast maybe five years is, you know, an appropriate time frame. But if you bought a nice couch, you know, you're certainly not hitting the replacement cycle on that yet.
- [38:06]
Carol Massar
I got to say, I love judging. I love buying pillows, but I'm afraid if I bring any more pillows home, my husband's going to divorce me because he's like, I can't even find that. I can't find the bed anymore. Hey, listen, you talk, Kate, about the higher end brands like Paragould. You're seeing some strength certainly in that area. I am curious too about your retail expansion, the physical store retail expansion or your loyalty program. If that's adding incremental retail customers versus shifting existing digital ones, what are you seeing on that front?
- [38:35]
Kate Gulliver
Yeah, great question. So on the physical retail side, we are adding incremental customers. We're actually seeing in our first large format Wayfair store that's been open for a little over a year now. More than 50% of the folks who are transacting in that store are actually new to the customer file. We have a 100 million customer file. Right. So to be getting new customers at this stage is pretty exciting. So it's definitely acting as a way into the brand Paragould. We actually just opened two stores for Paragould. So we opened one in Houston in the spring or sort of early summer, and then we just opened in West Palm beach in Florida a week ago. So it's very early days on those stores. But we do think that they should work as a nice customer acquisition channel. The loyalty program, which is about a year old, I would say that's acting more for existing customers to get them to be increasingly sticky with us, us. So what we're seeing from loyalty customers is nice incrementality, meaning, you know, if they were going to purchase, you know, six or eight times a year and maybe they're buying one to two from us, hopefully we're getting that next purchase, that second or third purchase as well.
- [39:38]
Tim Stenovec
Now, Kate, on the layoffs that we've heard from other companies just in recent days, Amazon planning to eliminate roughly 14,000 corporate jobs. This as Andy Jassy warned that I will shrink the company's workforce. You have a 2500 person tech team. How are you thinking about headcount? Are you reallocating headcount toward applications or are productivity gains allowing you to do more with a similar cost base? What are the numbers there?
- [40:03]
Kate Gulliver
Yeah, it's a great question actually. Our cto, Fiona Tan was on our earnings call this morning speaking to some of what we're seeing from AI Both on the top line perspective and where we're going with personalization, but also on efficiency. Every employee in the company, not just in tech, is actually enabled with AI tools and AI resources. And right now what we're seeing is really nice efficiency and enhancements to individual employee work and then in different pockets throughout the company, including within tech. You know, as we use more specialized AI tools, you see, you know, uptick in efficiency there. I frequently actually talk about our legal team. So not a tech team, but a team that, you know, has been able to adopt AI quite rapidly for document review and the ability for them to sort of manage, for example, increase lease load as we've been expanding the physical retail network without having to add incremental folks, has been pretty impressive. And so we certainly are seeing gains from that efficiency internally.
- [41:00]
Carol Massar
Hey, do you feel like though, in this environment that you want to be lean and mean? I mean, I guess I feel like all companies want to be lean and mean, Kate, but I do wonder if you're seeing, you know, as you look down the road, we are in this funny environment. Funny not funny haha, but funny difficult in that with the government shutdown, we're not getting data. So we're trying to figure out. Yeah. By talking to folks like you where we are in our economy. So do you feel like there's pressure to be leaner and meaner than maybe, I don't know, a month ago or so, or you feel more confident about what's kind of coming down the road here?
- [41:33]
Kate Gulliver
You know, I think you framed it well, Carol, when you said you should always feel, you know, the importance of being lean. I mean, we're a mass market retailer. Right. We operate on basis points of margin. So we absolutely need to be manically focused on cost at all times, regardless of the macro that we're operating in. And over the last several years, you saw us go through a number of restructurings, frankly, to bring down that overhead cost pretty significantly. Our most recent restructuring was actually March of this year where the conversation on tech employees. We did lay off some of our tech team as we completed our re platforming exercise and were able to actually increase some efficiency on that team. Pointed more of those resources towards AI, etc. As they have stayed. So, you know, we continue to be quite focused on efficiency and efficiency gains. Gains. We feel good about, you know, where the team is right now and the efficiency that we're seeing from that operating team. But that comes on the heels of, you know, several rounds of restructuring over the last 24 months.
- [42:26]
Tim Stenovec
Well, on AI on the consumer side, when it comes to AI, I'm wondering about the traction from Muse and Decorify, the decorating platform, the new pilot. How has that been with shoppers so far? Is it driving broader consumer adoption of AI LED design?
- [42:43]
Kate Gulliver
Yeah. So we've tested out a number of AI tooling as it relates to how the consumer can experience. Our website. We offer millions of different SKUs across thousands of suppliers across a wide range of styles. So the holy grail is really personalization. And how do you, you know, all three of us may be searching for, you know, those throw pillows for the bed that Carol was talking about and we all may have a different esthetic. So how do we land on the site and get to our esthetic as fast as, as possible? Decorify. And you know, now we have a tab on the app called Discover. These are ways for individuals to sort of browse and engage in a way that should be more personalized for them. And we do see great engagement there. But even on, you know, the main part of the app, so not using one of these specialized tools or the main part of the website, we are using generative AI to make that experience better. We spoke on the call this morning about combining generative AI from a merchandising perspective perspective with actually human designers. And for folks that landed on those SKUs that were the combo of the boats, we saw a third uplift and sort of engagement with that skew. That's really exciting because that means that skew is probably far more relevant to you than where you were going to land before.
- [43:55]
Tim Stenovec
That was Wayfair CFO Kate Gulliver joining us from Boston. After earnings, many financial firms raised their price targets on the stock, including Goldman Sachs, JP Morgan, Stifel, Citi Needham and more.
- [44:06]
Carol Massar
And that wraps up our first hour of the weekend edition of Bloomberg Businessweek. From Bloomberg Rad. Ahead in our next 60 minutes, Jimmy Wales, the founder of Wikipedia on building trust in today's very skeptical world.
- [44:18]
Tim Stenovec
Plus, where's the beef? Yeah, we catch up with the founder and CEO of the jerky company Archer.
- [44:26]
Carol Massar
And the New York City Marathon. Yep, it is running this weekend. An inside view from one runner and the individual behind the event. By the way, he's already working on next year's. This is Bloomberg businessweek. I'm Carol Massar.
- [44:38]
Tim Stenovec
And I'm Tim Stanweck. Stay with us. More from Bloomberg businessweek Daily coming up after this.
- [44:47]
Joe Doe
Support for the show comes from public.com you're thoughtful about where your money goes. You've got your core holdings, some recurring crypto buys, maybe even a few strategic option plays on the side. The point is you're engaged with your investments and Public gets that. That's why they built an investing platform for those who take it seriously. On public you can put together a multi asset portfolio for the long haul. Stocks, bonds, options, crypto. It's all there plus an industry leading 3.6% APY high yield cash account. Switch to the platform built for those who take investing seriously. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing.
- [45:30]
Josh Wingrove
All investing involves the risk of loss including loss of principal.
- [45:32]
Joe Doe
Brokerage services for U.S. listed registered securities.
- [45:35]
Josh Wingrove
Options and bonds and is self directed.
- [45:37]
Joe Doe
Account are offered by Public Investing Inc. Member FINRA and SIPC.
- [45:40]
Josh Wingrove
Crypto trading provided by ZeroHash Complete disclosures available at public.com disclosures Introducing the all.
- [45:47]
Carol Massar
New Adobe Acrobat Studio now with AI powered PDF spaces do more with PDFs than you ever thought possible. Need AI to turn 100 pages of market research into five insights with a click. Do that with Acrobat. Neat templates for a sales proposal that'll close that deal. Do that with Acrobat. Need an AI specialist to tailor the tone of your market report to sound real smart in real time. Do that with the all new Adobe Acrobat Studio. Learn more@adobe.com do that with Acrobat how can you grow your business from idea to industry leader? Bring your vision to life with smart business buying tools and technology from Amazon Business. From fast free shipping to in depth buying insights and automated purchase approval, they deliver everything you need to achieve your goals. It's not easy to stand out from the crowd. Simplify how you stock up to get ahead. Go to amazonbusiness.com for support.
- [46:44]
Tim Stenovec
This is Bloomberg Business Week Daily reporting.
- [46:47]
Joe Doe
From the magazine that helps global leaders.
- [46:50]
Tim Stenovec
Stay ahead with insight on the people.
- [46:52]
Joe Doe
Companies and trends shaping today's complex economy.
- [46:56]
Tim Stenovec
Plus global business, finance and tech news as it happens. Bloomberg Business Week Daily with Carol Massar and Tim Stennebec on Bloomberg Radio.
- [47:06]
Carol Massar
Plenty ahead in our second hour of the weekend edition of Bloomberg Business Week. Including Protein is the new nutrition fad. We talk with the founder of a grass fed beef and all natural turkey beef stick company. Say that five times fast.
- [47:20]
Tim Stenovec
I was going to and then I decided not to.
- [47:21]
Joe Doe
It's a tough one.
- [47:23]
Tim Stenovec
Plus it's one of the world's biggest races. The CEO of New York Roadrunners talks about Putting on the New York City Marathon. It is happening this weekend.
- [47:32]
Carol Massar
It is indeed. First up this hour, Wikipedia has a unique place in online culture. Before AI, before ChatGPT, if you needed a quick place to get an overview on almost any topic, you'd go to Google and then you'd click on Wikipedia. It's almost too good to be true in today's world. It is built on trust, trust and community, all online.
- [47:55]
Tim Stenovec
We talk about it a lot in media, in business, with friends and family, and most definitely in politics. Jimmy Wales, founder of Wikipedia, knows a thing or two about trust. He's got a new book out. It's called the Seven Rules of Trust, A blueprint for building things that last. We sat down with him this week in the Bloomberg Business Week Daily studio and we wanted to know why Wikipedia works in a world where so many people don't trust one another other and they don't trust what they see. That issue of trust is something he's been thinking about.
- [48:22]
Jimmy Wales
It was a couple years ago, I had had some ideas around this and yeah, just, just started and it's obviously turned out to be quite timely as we have a lot of issues around trust in society. And, you know, I want to encourage people to let's get back to society of trust.
- [48:43]
Tim Stenovec
You know, it's funny, Carolyn and I spent a lot of time talking about this ahead of the interview because Wikipedia sort of seems. And look, it's had its challenges, no question, it's had its controversies, but for things that are online, it's kind of this weird utopia in the sense that.
- [48:58]
Carol Massar
It'S kind of remarkable.
- [48:59]
Tim Stenovec
Yeah, it's really remarkable. I mean, we know anonymous people online oftentimes are full of vitriol and hate. We can see that even, even when people use their names on social media platforms, we lock our doors when we leave the house. Why does trust work on Wikipedia but kind of seems like nowhere else right now.
- [49:19]
Jimmy Wales
Yeah, I mean, I think for me, you know, one of the seven rules of trust that is most meaningful in that regard is purpose. Like Wikipedia has a very simple purpose, which is to build an encyclopedia and we make all our decisions around that and the rules about participation and so forth. And that's very different from social media, where there isn't a clear purpose other than free speech and openness. And therefore that toxicity really creeps in quite a lot in social media. You know, people say outrageous things because they get rewarded for it. They get more followers, they get more engagement. And the algorithms love that.
- [49:57]
Carol Massar
We talk about clickbait all the Time.
- [49:58]
Jimmy Wales
Clickbait all the time. And you know, that's very different from the world of Wikipedia where, I mean, thank goodness our headline are so boring. There's no clickbait. You know, it's like the article on Thomas Jefferson's called Thomas Jefferson, you know, but it does what it says on the 10. You know, that's a boy. That's a very British expression, I'm afraid. But yeah, I mean, I do think that, that having a simple purpose is a part of what keeps us focused and keeps our community focused.
- [50:24]
Carol Massar
How do you describe facts or what, how do you determine facts? And I am amazed. And I don't. I mean, I've been doing this a few years and I felt like when I started it was very clear fact versus fiction in terms of reporting and doing stories. And I feel like there's a lot of gray area and I just feel like a fact is a fact. So how do you guys determine what's a fact in an entry?
- [50:46]
Jimmy Wales
Yeah, I mean, we're really old fashioned. Like what we look for are reliable sources. So we want, you know, sort of academic research or quality newspapers, quality magazines, quality books, really old fashioned. And you know, the, the idea that we should treat, you know, the New England Journal of Medicine as the same as social media influence online is obviously just wrong. Like you, you really want facts. And that's what people want from Wikipedia. They don't want.
- [51:18]
Carol Massar
Sources matter.
- [51:19]
Jimmy Wales
Sources really matter. Like having a good quality source is what it's all about.
- [51:23]
Carol Massar
But why don't sources matter to everybody? And other people will say, okay, I believe this source is reliable. So, like, you know what I mean? Like, we are living in like different.
- [51:36]
Jimmy Wales
Worlds, I think, I think, and I think that's a huge problem. I mean, I do think, you know, it's really important. I mean, one of the problems that we've seen is that a lot of the media, in response to the changing and very difficult financial model for journalism, they've chased after really partisan audiences. And so, you know, sometimes you, you read something and, and you're like, yeah, that was, that was interesting. That was good. But I'm not sure I got both sides of the story there. I live in the UK and we have a, just an example, two quality newspapers, the Guardian and the Telegraph, left leaning, right leaning, they're both great newspapers. But I often read one and I'm like, oh, but. And then I go read the other and I'm like, yeah, you probably should have been somewhere in the middle, both of you, you. And it would have Been, I think, a better story. Had you said, well, you know, we got one side of the story, but we actually had to go out and find somebody to tell us a little bit of the other side. You know, you can't be too, like, the moon is made of rocks or is it cheese? Who knows? I don't mean that seriously. Hopefully cheese, but. But, you know, like, seriously thinking about, like, who are we talking to and are we. Are we getting to the bottom of this with.
- [52:44]
Tim Stenovec
With me, the media. With trust in media here in the United States declining and having declined over the last few years, in your view, is there something that we can do better, that the media can do better, that it can borrow from what has worked at Wikipedia? What has worked with the trust, the methods of trust that you've studied that can make us build trust again with our audiences?
- [53:02]
Jimmy Wales
Yeah, I mean, well, the good news is that the financial press, like Bloomberg, is still among the most trusted. And I think that's because by the mandate of what you're trying to do, informing business people and investors, you kind of have to be, like, ruthlessly objective. You're not chasing after partisan audiences and things like that. Big data. Data is important. Transparency. I think, you know, realistically, you know, one of the things that Wikipedia does that's kind of odd is we'll have a, you know, at the top of a page. The neutrality of this article has been disputed. And I.
- [53:36]
Tim Stenovec
We've all seen it.
- [53:36]
Jimmy Wales
Yeah, we've all seen it. And I always say, you know, I kind of wish sometimes the New York Times would put a banner up just saying, you know, we had a big fight in the newsroom. We weren't quite sure, so, like, we decided to roll this. Yeah, yeah. But here's a little bit of their inside thinking. Like, we did want to report this. We're not sure we've got the full story yet, because that. Pretending to be perfection all the time, people see through that. And they know, of course, And I think they're willing to say, yeah, like, actually, journalism is quite hard, you know, so a little more transparent currency is always good.
- [54:05]
Carol Massar
Do you get pressure a lot from companies, politicians, individuals to, like, change an entry?
- [54:12]
Jimmy Wales
No, not really. I mean, people, you know, I meet a lot of people, and people often are like, well, you know, my Wikipedia entry, what about this? What about that? And I'm just like, yeah, send us an email. Like, you know, we'll have somebody look at that. That's all fine in general. No, and actually, we're very.
- [54:24]
Tim Stenovec
But you really just say, just Send them an email that I'm not going to do anything about it?
- [54:27]
Joe Doe
Kind of.
- [54:28]
Tim Stenovec
Yeah, okay.
- [54:29]
Jimmy Wales
But no, sometimes people, people have a legitimate point. They're like, oh, I, you know, I did this thing and it was in the press and, you know, it's like, oh, okay, well, maybe we just overlooked it. And that's, that's great. But, you know, at a deeper level, one of the things that's really important is, you know, we aren't funded by governments. We aren't funded by sort of major donors. We're funded by people giving their $20. And that makes a big difference for our intellectual independence. We're not worried like, oh, if we've got something negative about out whatever, then we might lose our donation.
- [54:59]
Tim Stenovec
How is, how is the fundraising going? Because I feel like I've gotten a lot of messages from you throughout the year. Throughout the year, please. From Jimmy Wells on Wikipedia. We've all seen it.
- [55:08]
Josh Wingrove
Yeah, we've all seen.
- [55:09]
Tim Stenovec
Is it going okay? Is funding going okay?
- [55:10]
Jimmy Wales
It's okay. Yeah, we've, we've been, you know, we're stable, we're very cautious with money, so we always try to build our reserves and so on. And then, you know, recently, I don't know, Elon tweeted, defund Wikipedia. I think about $5 million that day. So, so you can text Elon.
- [55:27]
Tim Stenovec
I know you guys have been in touch. You can him and say, tweet about us again to the end of the year.
- [55:32]
Jimmy Wales
Well, you have had some coverage to raise money.
- [55:34]
Carol Massar
You have had some conversations with Elon over the years. All right, we're continuing with Jimmy Wales, founder of Wikipedia. He's got a new book out. It's out tomorrow. The seven Rules of Trust. A Blueprint for Building Things that Last. Elon Musk, you've had an ongoing relationship or text relationship with him.
- [55:50]
Jimmy Wales
I've known him for years, actually now. Getting old.
- [55:54]
Carol Massar
Aren't we all? I like to think like a fine wine, just getting better. But he has talked about defunding Wikipedia and you said, you know, that has brought in a lot of money. So thank you. Elon, what are the conversations that you've had with him? Back and forth.
- [56:08]
Jimmy Wales
I mean, you know, he, he believes Wikipedia has become woke a pedia, which is not true. And, you know, I encourage him to sort of a better message is to say if you feel like Wikipedia's got some bias, encourage people to come and participate. People who agree with you. Don't paint us as like, oh, they've gone, they're crazy left wing activists. Or something. We aren't. And by the way, he's also encouraging crazy left wing activists to come and bother us. And that's not good either. So, you know, realistically, I can't predict what Elon's going to say or do. He's Elon, you know, he does what he likes.
- [56:41]
Carol Massar
But what's he like? One on one, you and work to be fully transparent. We listen to a podcast and I think you brought up something about like Elon, one on one versus yeah, Elon.
- [56:52]
Jimmy Wales
He's always.
- [56:53]
Carol Massar
Performer.
- [56:53]
Jimmy Wales
Yeah, he's always been very nice to me in private and, you know, civil and so forth. And I've met him in person a few times and yeah, and then he's a huge public Persona and a huge public character and sometimes I just, I slightly ignore that because I'm like, oh, he's just being Ellen in public. If I ran into him, I think we would have a very friendly chat.
- [57:11]
Tim Stenovec
You know, over the last 20 plus years, Wikipedia has had. Has kind of lived on despite massive changes with technology. We're undergoing one right now with AI and the way that people are using, using LLMs. You have said that you are building Wikipedia to last 100 more years. How do you ensure that you do that when you don't even know what technology will be around?
- [57:31]
Jimmy Wales
Well, it's true. We have no idea. So all we can do is preserve our intellectual independence, keep an eye on the finances to make sure we're not vulnerable, be open and keep our community's mind open and active to say, how do we adapt to new technology? Is there things here we could use? What can we do to preserve our mission, which is free knowledge for everyone?
- [57:53]
Tim Stenovec
That was Jimmy Wales, the founder of Wikipedia, on his new book, the Seven Rules of Trust, a blueprint for building things that last.
- [58:00]
Carol Massar
You're listening to Bloomberg Business Week coming up. Gotta get the protein in as many ways as possible. Everybody's talking about protein. I don't know. I grew up with my family. Like you always had protein. Like you knew that that was part of a healthy diet. But anyway, did you see we got what, Protein and Pop Tarts.
- [58:16]
Tim Stenovec
Yeah.
- [58:17]
Carol Massar
Well, I don't even get that. Okay, we did, sorry, Pop Tarts.
- [58:19]
Tim Stenovec
But there's also like the, even the nice, like organic, quote unquote, organic fig bars have protein. They have a new version out with extra protein. It's all about the GLP1s.
- [58:29]
Carol Massar
What is it? I know, exactly.
- [58:30]
Tim Stenovec
People want their protein.
- [58:31]
Carol Massar
Anyway, on this we had a great conversation. We caught up with Eugene Kang. He is founder and CEO of the meat stick company Archer Meat. I ate actually a meat stick.
- [58:41]
Tim Stenovec
You did? I went upstairs. I got meat sticks for everybody.
- [58:46]
Jimmy Wales
This is Bloomberg.
- [58:50]
Joe Doe
Support for the show comes from public.com you're thoughtful about where your money goes. You've got your core holdings, some recurring crypto buys, maybe even a few strategic option plays on the side. The point is you're engaged with your investments and Public gets that. That's why they built an investing platform for those who take it seriously. On public you can put together a multi asset portfolio for the long haul. Stocks, bonds, options, crypto. It's all there plus an industry leading 3.6% APY high yield cash account. Switch to the platform built for those who take investing seriously. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing.
- [59:32]
Josh Wingrove
All investing involves the risk of loss including loss of principal.
- [59:35]
Joe Doe
Brokerage services for U.S. listed registered securities.
- [59:38]
Josh Wingrove
Options and bonds and is self directed.
- [59:39]
Joe Doe
Account are offered by Public Investing Inc. Member FINRA and SIPC.
- [59:43]
Josh Wingrove
Crypto trading provided by ZeroHash complete disclosures available at public.com disclosures introducing the all.
- [59:50]
Carol Massar
New Adobe Acrobat Studio now with AI powered PDF spaces. Do more with PDFs than you ever thought possible. Need AI to turn 100 pages of market research into 5 insights with a click. Do that with Acrobat. Neat templates for a sales proposal that'll close that deal. Do that with Acrobat. Need an AI specialist to tailor the tone of your market report to sound real smart in real time. Do that with the all new Adobe Acrobat Studio. Learn more@adobe.com do that with Acrobat Every business starts with an idea. How can you go from daydreamer to industry leader? Amazon Business accelerates your journey with smart business buying. Get everything you need to grow in one familiar place. From office supplies to IT essentials and maintenance tools. Amazon Business takes the buying experience you know and love from Amazon plus tools that help you save costs and make insights based decisions ready to bring your visions to life. Learn how@AmazonBusiness.com this is Bloomberg Business Week.
- [60:51]
Tim Stenovec
Daily with Carol Massar and Tim Stenovec on Bloomberg Radio. Protein. In the words of Derek Zoolander, so hot right now.
- [61:01]
Carol Massar
Or Paris Hilton, that's hot.
- [61:03]
Tim Stenovec
We don't know if you saw this last week, Carol, but I know you did. Actually, I know you saw this because you mentioned it earlier.
- [61:08]
Carol Massar
I did.
- [61:08]
Tim Stenovec
The protein in the Pop Tarts.
- [61:10]
Carol Massar
Yeah, yeah.
- [61:11]
Tim Stenovec
Bizarre.
- [61:12]
Carol Massar
Listen, protein, pop tarts. But I do feel like we're turning around products and we're looking for some key things like fiber or protein or you know what I'm saying? Or some vitamins or something. We are doing that. But protein in everything.
- [61:25]
Rob Simulcare
What?
- [61:26]
Tim Stenovec
Pepsi co said they have plans for a higher protein version of Doritos.
- [61:30]
Carol Massar
I mean, come on. Come on.
- [61:32]
Tim Stenovec
Okay. Elsewhere, protein is being added to popcorn, pasta, bread, cookie dough, ice cream and macaroni and cheese. Kind of want to go old school, though. The original source of protein.
- [61:42]
Carol Massar
We talked about this a lot in the newsroom today, gang.
- [61:44]
Tim Stenovec
Is all about this. He's founder and CEO of Archer. It makes meat sticks from grass fed beef and all natural turkey. He joins us from la. Talk about timing. Timing. Eugene, how are you leaning into the protein craze right now? Is this what people want?
- [61:59]
Josh Wingrove
Yeah. Thanks for having me on Tim and Carol and yeah, absolutely. Protein, look, it's been around for a while and particularly meat snacks and protein is the hottest sort of trend right now. And we're really, we're really proud of the fact that, you know, meat snacks is kind of a original kind of source. Right. Of protein. And you don't have to add necessarily protein to it like some of the other innovations that you guys kind of noted earlier.
- [62:21]
Tim Stenovec
So we, we know you are the official meat snack partner of the LA Dodgers. You're a Dodgers fan. Dodgers are playing tonight, game one of the World Series, L.A. dodgers at Toronto Blue Jays. Your startup though, how did the partnership come together like this?
- [62:41]
Josh Wingrove
Yeah, you know, we, there was a couple of other other consumer brands that were partnered with the Dodgers last year, most notably Health Aid Kombucha, which is one of the largest Kombucha brands in the country. So we had kind of reached out to the Dodgers saying, hey, look, we're looking to build potentially a bigger production facility in la. We're growing our business pretty rapidly. Doesn't make sense to kind of partner up. And they absolutely loved it, thought it was a great idea. So got to work quickly on a partnership first framework earlier in the year around spring training and, you know, kind of cemented it right before the season starts.
- [63:14]
Tim Stenovec
Do you guys pay for that or do you offer a deal on like, how, like I've always wondered how the finances of this stuff works. Take us into the numbers.
- [63:21]
Josh Wingrove
Yeah, we, yeah, no, we do pay for it, but in return we obviously get, you know, advertisement throughout the stadium, products sold in the concession stands available in the clubhouse. So I, I think there's a few notable Dodgers that are probably eating our protein snacks as well. And we also get to use sort of their collateral or their assets on a lot of our collateral for the broader Southern California market, whether it's displays or any kind of retail programming.
- [63:47]
Carol Massar
Hey, talk to us more broadly because you guys are in Costco, Whole Foods, Walmart, Starbucks, Target 7 11. I mean, if we're on a road trip, I mean, that is certainly one of the snacks people pick up. Talk to us about the growth that you are seeing in the marketplace.
- [64:04]
Josh Wingrove
Yeah, the growth has been incredible.
- [64:06]
Carol Massar
What's incredible? We love numbers here.
- [64:08]
Josh Wingrove
We're growing 100% year over year. You know, we're approaching close to over 500 million in revenue in the next 12 months. You know, we were a little over 100 million two years ago. So growth has been absolutely incredible for us. You know, the category obviously because of us is doing incredibly well. You know, premium sort of better for you brands have really just taken over sort of the zeitgeist with consumers. And you know, we benefit not only from the premium better for you side of it, but also the fact that we are a portable, dense, protein packed snack.
- [64:42]
Tim Stenovec
You know, how do you do this? I'm wondering about funding and bootstrapping versus raising money. The growth. The new facility that you are opening soon in Vernon, California, the one that you just opened, excuse me, earlier this month.
- [64:57]
Josh Wingrove
Month.
- [64:58]
Tim Stenovec
Did you take on external funding for this?
- [65:02]
Josh Wingrove
We took on debt, but I mean we are, we're cash flowing or you know, we're, we're profitable. So for us it was, you know, we weren't, we didn't have to necessarily raise equity or anything like that. We do have a private equity growth investor that was, that came in early on in our life stage.
- [65:17]
Tim Stenovec
Okay.
- [65:18]
Josh Wingrove
No institutional funding as of late.
- [65:20]
Tim Stenovec
The private equity investor. So how much do they own?
- [65:24]
Josh Wingrove
They own a minority stake in the business. My partner and I still own majority stake but they are kind of shoulder to shoulder in terms of ownership structure.
- [65:35]
Carol Massar
I'm curious, in a world of GLP1 drugs and people looking to lose weight, they are losing weight thinking about their diet, how is that impacting you, if at all? I'm looking at, you've got a grass fed fed beef jerky, a classic zero sugar. So I'm just curious how you're adapting and just talk to us a little bit about the impact, if there is any.
- [65:57]
Josh Wingrove
Yeah, you know, we haven't seen an impact in a negative way. If anything's been positive. We're not able to quantitatively tie our brand performance to GLP1. But studies have shown that, you know, folks that are on GLP1 adopt to meat snacks at a much higher rate because they're just, I think seeking, seeking a bit more protein in general in their diet post GLP1. So for us, we feel like it's a, it's a major tailwind for our business.
- [66:22]
Tim Stenovec
Got to talk beef prices. US beef prices have skyrocketed to record levels. It's challenged the President's pledge to make groceries more affordable. Earlier this week, the President attacked US cattle ranchers over their criticism of his plan to slash record beef prices by importing significantly more tariff free meat from Argentina. Tina, how much have your prices gone up? Not the prices that you reflect to consumers. I'm like talking the prices you pay for the, for the beef product.
- [66:49]
Josh Wingrove
Yeah. So we, we kind of knew early on that the beef prices were going to be as high as they were. If you look at, we look at cattle reports a year out and this time last year it was clear that the domestic cattle herd is actually kind of thinning out, just given all the record droughts that we've had in the last few years. And so if you think about cattle herd thinning out, potentially a trade war, it's only going to spell disaster. Right. So we were able to hedge our commodities for the full year. So we were somewhat, not going to say completely insulated, but somewhat insulated. And obviously we did see a spike in pricing for sure on the beef price. But anyone that would tell you that the beef prices from an industry perspective is coming out of the left field is, I would be very shocked to find out. I think everyone knew that this day was coming. I don't think the average consumer knew it was coming, but I think most folks that were in the industry about a year ago knew that this was kind of coming down the pipe.
- [67:41]
Tim Stenovec
Can you give us an idea of how much your rob costs would have gone up had you not hedged though? We're talking record prices right now, so.
- [67:49]
Josh Wingrove
I think it would have been like 40, 50%.
- [67:52]
Tim Stenovec
Wow, that's pretty amazing. I mean big difference. Kudos for hedging.
- [67:57]
Rob Simulcare
Yeah.
- [67:59]
Carol Massar
I'm curious about the process. Like, so you're doing this all here in the US Correct? All of it. So is it robots? Is there humans involved? Like what's, what's involved are not robots? No. I know the kids are. Not yet. But tell us like what the process is because I'm just figuring out your cost. Is beef the biggest or give us a little bit of what the Business.
- [68:22]
Josh Wingrove
Is for sure is by far the biggest. So we have manufacturing plants that we own and then we also have co manufacturing partners throughout the country as well. Well, I'd say there is labor involved for sure. There is some automation depending on part of the process. So think about, we're bringing in raw beef, right? We're not doing any kind of slaughtering or anything like that. It's all just raw, raw beef that comes into our processing plants. Everything is either grinded or cut. It's cooked in a big, big oven that you can imagine. And then from there it's packaged out. Whether it's individually wrapped like a beef steak or beef jerky, that's in bits and pieces in a sort of resealable pouch, you know, parts of the packaging. Most of the packaging process is automated. I would obviously say that the raw kind of processing, handling of the product is still somewhat requires, require labor, but that's also got a lot of efficiencies in machinery there. So.
- [69:15]
Carol Massar
Okay, all right, interesting. You know, it's, you know, as we hear you talk and you talk about your growth rates, I mean there were go back a few years, even before GLP1 that people were trying to cut back on their consumption of beef. And I think, you know, people even say, you know, you shouldn't have it too often and it feels like people are really into your product. You know, what's changed do you think?
- [69:37]
Josh Wingrove
You know, I think, I don't think anything's changed. I think it's accelerated. I think our thesis from the very beginning was, you know, we are sourcing high quality premium beef, right? So it's all 100% grass fed, pasture raised ways. And so for us we had this thesis like, look, if you're going to eat protein and beef, please make sure you're eating the right highest quality of protein. And so I think that trend line has converged where the consumer is today. And I think folks are realizing like, you know, hey, look, there's nothing wrong feeding animal based protein. But if you're going to eat it, make sure you're sourcing, you know, the highest quality because we think that's better for you, whether it's antibiotic free, free range, grass fed, et cetera.
- [70:15]
Tim Stenovec
We're speaking with Eugene Kang. We're speaking with Eugene Kang, he's the founder and CEO of Archer Makes Meat. Steve Sticks from grass fed beef and all natural Turkey joins us from la. What's the product pipeline look like? Beyond turkey? Beyond beef.
- [70:29]
Josh Wingrove
Yeah, look, I think we launched a really cool bison pasture Raised bison jerky and Whole Foods and sprouts nationwide had a bison burger.
- [70:38]
Carol Massar
They're kind of good.
- [70:40]
Josh Wingrove
Bison's really fun. Not a lot of source for it. So, you know, hard to scale. Look, we're exploring other protein alternatives, right. Other animals. And in whether it's the stick or meat or beef jerky or jerky format, I'd say for us, given the growth, we actually feel like a lot of our sort of white space is still in distribution. I mean, convenience channel is roughly 30 to 40% of the overall meats in that category, and we play in less than 1% of it today. So we think there's big white space there. A lot of. Despite all the store counts that we're in today, we actually think there's still plenty of distribution to go get in our current format and then continue to innovate on the pack format. Right. Like, this consumer is completely new to the category, despite it being a category that's been around for 20 years. Like, our consumers that we brought in through this, like, premiumization, this better for you. Positioning is entirely incremental. And so for us, it's like, okay, how do we think about new, unique pack formats to meet the consumer where there are, given the usage occasion. And that's kind of our view right now.
- [71:40]
Tim Stenovec
Just very briefly, competition. There's no shortage. Shortage. You've got Chomps, you've got Vermont. That's just a couple country. You've got other ones as well. I mean, those are the two on the tip of my tongue. How do you stand out?
- [71:53]
Josh Wingrove
Yeah, I mean, we're. We're the fourth largest in the country. You know, we are right behind the big conventional stalwarts like. Like a jack links like a Slim Jim. Those are more conventionally positioned and they're like legacy brands. Chomps is. Is a island phenomenal brand as well. I mean, we are kind of neck and neck in terms of, like, size and scale and ultimately driving a lot of the growth, frankly, in the category. I would actually argue that if you removed us and Chomps from the ecosystem, the category wouldn't be growing as fast as it would be.
- [72:23]
Carol Massar
So, Eugene, really quick 10 seconds. You're going to go it alone, or are you looking for someone to buy you guys out?
- [72:31]
Josh Wingrove
Like the company, they're built up on scalability and sustainability. And for us, you know, we're always open to options.
- [72:39]
Tim Stenovec
Right. That was Eugene Gang, founder and CEO of the Meat Stick company Archer.
- [72:43]
Carol Massar
Still ahead on Bloomberg Businessweek, over 55,000 runners will be pounding the pavement for the New York City Marathon this week and we talk to the CEO behind it all.
- [72:53]
Tim Stenovec
This is Bloomberg.
- [72:56]
Joe Doe
Support for the show comes from public.com you're thoughtful about where your money goes. You've got your core holdings, some recurring crypto buys, maybe even a few strategic option plays on the side. The point is, you're engaged with your investments and Public gets that. That's why they built an investing platform for those who take it seriously. On Public, you can put together a multi asset portfolio for the long haul. Stocks, bonds, options, crypto. It's all there plus an industry leading 3.6% APY high yield cash account. Switch to the platform built for those who take investing seriously. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing.
- [73:39]
Josh Wingrove
All investing involves the risk of loss, including loss of principal.
- [73:42]
Joe Doe
Brokerage services for U.S. listed registered securities.
- [73:45]
Josh Wingrove
Options and bonds in a self directed.
- [73:46]
Joe Doe
Account are offered by Public Investing Inc. Member FINRA and SIPC.
- [73:50]
Josh Wingrove
Crypto trading provided by ZeroHash. Complete disclosures available@public.com disclosure introducing the all.
- [73:57]
Carol Massar
New Adobe Acrobat Studio now with AI powered PDF spaces. Do more with PDFs than you ever thought possible. Need AI to turn 100 pages of market research into five insights with a click. Do that with Acrobat. Need templates for a sales proposal that'll close that deal. Do that with Acrobat. Need an AI specialist to tailor the tone of your market report to sound real smart in real time. Do that with the all new Adobe Acrobat Studio. Learn more@adobe.com do that with Acrobat. How can you grow your business from idea to industry leader? Bring your vision to life with smart business buying tools and technology from Amazon Business. From fast free shipping to in depth buying insights and automated purchase approvals, they deliver everything you need to achieve your goals. It's not easy to stand out from the crowd. Simplify how you stock up to get ahead. Go to amazonbusiness.com for support. You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.
- [75:07]
Tim Stenovec
This weekend, more than 55,000 people from all over the world will take to the streets of New York City to run the more than 26 miles through the five boroughs of the city.
- [75:17]
Carol Massar
You know someone is going to be running in it.
- [75:19]
Tim Stenovec
My wife is doing it this year. She's wanted to do it for years.
- [75:22]
Carol Massar
Really?
- [75:22]
Tim Stenovec
She is. Yeah.
- [75:23]
Carol Massar
That's how much is it?
- [75:24]
Tim Stenovec
Kids got in the way of planning for this over the last few years, but she's finally making it happen. We're excited to cheer for. And you guys should all cheer for her, too. We will definitely see her running. We've got with us Rob Simulcare, CEO of New York Roadrunners. It's the nonprofit that puts on the TCS New York Marathon. He joins us from New York. Rob, good to have you with us. The Roadrunners, you guys do stuff throughout the year, but no question. Do you pretty much start planning the marathon the Monday after the Sunday of the marathon?
- [75:52]
Rob Simulcare
No, we don't wait that long. We've already been planning the 2026 marathon now for several months. So, yeah, we get out more than a year ahead because this is a massive operation, as you can imagine. More than 55,000 runners going from Staten island island to Central park. And we've got hundreds of staff, thousands of volunteers involved in this. So it's really like a military operation. And the planning begins more than a year out.
- [76:18]
Tim Stenovec
It's pretty remarkable. For anyone who has not seen it, It's. I think it's actually one of the best days to be in New York City.
- [76:26]
Carol Massar
It's pretty cool, right?
- [76:27]
Tim Stenovec
Oh, I mean, I always get. I get like. Like goosebumps when I watch because it's like everybody is so happy. Even though some of them look like.
- [76:36]
Carol Massar
They'Re in pain, it's pretty rough.
- [76:38]
Tim Stenovec
You just never see. It's the way that New Yorkers come together in a way that I can't believe I'm selling this thing. But, I mean, it's very hard to see it. A friend who comes in every year to do it, and he runs marathons all over the world, and he's like, there is nothing like the New York City Marathon.
- [76:53]
Carol Massar
Rob, why do you think that is the case?
- [76:55]
Rob Simulcare
I just think that, you know, he said it in a way, it's a day that New Yorkers come out out to cheer for total strangers. You know, you don't see that every day. In a city like New York, we're known to be pretty tough. New York can be a tough place to live. And, you know, we're obviously all really tough people in New York City. That's part of what makes us New Yorkers. But it's the day that we come out, we cheer for strangers, whether they're from down the block or across the world, because I think everybody respects what it takes to run 26.2 miles. And everybody wants them to succeed. You know, we're not rooting against anybody. We're rooting for everyone. And we may be out there to see our spouse or our colleague or our friend, but every person who passes, we're rooting for them to succeed in their goal of reaching the finish line.
- [77:41]
Carol Massar
So 55,000 people all over the world, how many people, like, actually reach out to be a part of this? I'm assuming that there is a number that you guys just don't want to exceed.
- [77:50]
Rob Simulcare
Yeah, that's right. I mean, this year we had over 200,000 applications to our drawing, so that was a big number. We also have a countless number of requests coming in for people to run for charities or other organizations in the marathon. So the interest level, if you add it all up, is probably close to half a million people who would like to run, run the marathon and reach out to try to do it every year. We obviously want to keep the number to a number that we think is manageable. So this year, we're going to be in that 55,000 plus range to make sure that everybody has a great day. But we're always looking for ways to get more people into the marathon. And the application window for next year is already open. You can already apply to be a part of our Team for Kids charity team for 2026. On our website, nyrr.org we also have a sweepstakes going on right now. You can enter to buy a chance to get free entry for you and a friend into the marathon next year. And the proceeds from that go to support our nonprofit mission to get kids and adults running in New York.
- [78:53]
Tim Stenovec
Yeah, it is really. It's really hard to get into Carol. I mean, my wife did, because we live in New York. She did the New York Roadrunners. Nine. I think it's nine plus one. Is that right, Rob?
- [79:01]
Rob Simulcare
That's right. If you run, do you still do that?
- [79:03]
Tim Stenovec
Do you still do that?
- [79:05]
Rob Simulcare
Yeah, we do.
- [79:05]
Tim Stenovec
Okay, explain how that works for New Yorkers.
- [79:07]
Rob Simulcare
You're in the.
- [79:08]
Carol Massar
Yeah.
- [79:08]
Rob Simulcare
If you're in the New York area and you run nine races in a calendar year, plus volunteer at one of the them, you are guaranteed entry into the next year's marathon. So that's one of the most popular ways to get in. It obviously favors New York City area residents. And, yeah, we had a lot of people get in that way.
- [79:23]
Tim Stenovec
Okay, so let's talk economic impact here, because I got my buddy coming in who comes in every year. This time, he's not Coming in solo. He's bringing his two kids, he's bringing his wife. They're staying at a fancy hotel in midtown. They're going to make a vacation of it. He's going to drop some serious coin to do that. That I imagine the New York City Marathon has a huge economic effect on the city.
- [79:42]
Rob Simulcare
Yes. In fact, we just completed a study about a month ago on the economic impact of the marathon and New York Roadrunners across the board on New York City. And we found that the marathon contributes just about $700 million a year to the economy of New York City all year. New York Roadrunners, with our other races and events, contributes close to. To a billion dollars. And so that's actually more economic impact than all of the Mets and Yankees home games combined. And this the story of your friends. A big part of the reason why, right. You've got people from all over the world who are coming to New York. They're bringing their friends, they're bringing their family. A lot of them are staying in hotels multiple nights. About 40% of our field this year will be international. So those folks are coming in for a sustained period of time.
- [80:30]
Josh Wingrove
Time.
- [80:30]
Rob Simulcare
They're staying in hotels, they're eating at restaurants, they're. They're going to Broadway shows. They're doing all the things you do when you visit New York. And so running the marathon is just kind of the centerpiece of a big trip to New York City. And let's face it, November is not peak tourist season. Right. So we're bringing in a huge number of visitors to the city at a time that otherwise would be pretty quiet.
- [80:50]
Carol Massar
Wait, Rob, how much of that spending is the carb load before the marathon? Right. Like all those restaurants offering up pasta. I mean, there's of a lot of that going on too, right?
- [80:58]
Tim Stenovec
Oh, yeah.
- [80:58]
Rob Simulcare
This is a good week to own an Italian restaurant in New York City. And we know that they are all dialed up their pasta menus, their prefix menus. So absolutely, it's a very good week for the pasta and rice, too. Rice is also good carbs.
- [81:11]
Tim Stenovec
You know, Carol and I travel the weekend the two days after the marathon every year. And one cool thing about New York is you see everybody who completed the marathon on the subway on the way home.
- [81:22]
Carol Massar
Do they wear it?
- [81:22]
Tim Stenovec
They're wearing the medal then throughout the week. And I just remember the last few years because we're going to Schwab Impact next week, Carol.
- [81:28]
Carol Massar
Right.
- [81:29]
Tim Stenovec
It's always around this time of year. We fly on the plane. There's always people Wearing their medals. That's right there on the plane with us. And, you know, there's this cool, like, moment that you have with these people where you're like, congratulations, that was a lot of work. You did it.
- [81:41]
Carol Massar
It's like such a community feel. It is pretty amazing, right?
- [81:44]
Tim Stenovec
It's so not New York. The New York that Rob was describing, right? The sharp elbows, like, give me some room on the subway here.
- [81:51]
Carol Massar
It's really, really sweet. Like, in a world where it feels like there's a lot coming at people, I don't know how. What year are you guys in doing this?
- [81:59]
Rob Simulcare
Next year will be the 50th anniversary of the five borough New York City Marathon that started starts in Staten island and ends in New York City. So the original race was just lapsed in Central park in the early 70s. But next year will be really a big, big anniversary because that's what people think of when they think of the marathon is crossing the Verrazano Bridge, running through all five boroughs. So next year will be a big year with that 50th anniversary.
- [82:24]
Carol Massar
I just love it. How much has the race. I mean, you said how it started, you know, laps around Central Park. How off. How much has the route changed over the years?
- [82:33]
Rob Simulcare
It hasn't changed very much since they started that race covering five boroughs. Minor changes here and there, but it really has not changed very much. That start line on the Stack island side of the Verrazano Narrows Bridge and that finish line right at Tavern on the Green. So you're running the same course that people have been running for decades and decades. And I think that's one of the things that makes it special because you can compare your times to the times of your friends years ago, the times of yourself if you've run it a lot of years. So that's one of the things that runners love to do, is compare times. And it's, you know, it stayed pretty constant. So those comparisons hold true.
- [83:08]
Tim Stenovec
I'm wondering how much the Athletes with Disabilities program has changed in over the years, because that, to me, is one of the most special parts of the marathon. And I know that there are different physical impairments that make athletes with disabilities eligible to run in the New York City Marathon. But seeing those folks, whether they're visually impaired and they're guided by another runner or they're using hand cycles because they've lost the use of their legs, well, that's actually a separate race, we should note, but it's pretty remarkable to see. Rob?
- [83:38]
Rob Simulcare
Yeah, thank you for bringing that up. I Mean, we do have a significant number of athletes with disabilities who enter our race. There are a number of ways for them to do that. They can enter directly with us. We have our own awd, as we call it, program. We have a great partnership with Achilles International. I think if you've run our races or stood on the sidelines for a lot of our races, you'll see the Achilles at athletes going by. They always wear this highlighter yellow shirt and they always are. I think some of the stars of the marathon, people will yell out go Achilles. When they see these athletes go by. You'll see them with, you know, one or sometimes two guides on either side of them just to make sure they stay safe. And I think that's what the marathon is all about. It's what inspires people, is folks overcoming these incredible odds. You know, we just released a film that's on YouTube actually out today called 26.2. I recommend everybody check it out. It's a short film, about 30 minutes long, and it tells the story of four runners who ran the marathon last year. And they each had significant challenges. One was overcoming cancer, one had had a stroke, one was, you know, basically having to walk the marathon, you know, and they're incredible stories. And I think that's the thing that makes the marathon special. Yes, we love the fast run, we love the ones who win and who run in under three or even two and a half hours. But it's those stories of overcoming struggle and challenges that I think make it really special.
- [85:01]
Carol Massar
That's pretty cool. Yeah. A documentary, right. And just to kind of show you're right, it's the people, right. And, and some of them who are struggling physically and maybe even emotionally. Right. But they all come together and with this common goal. It's, it's, it's a pretty cool thing. Rob, thank you so much. Good luck. Fingers crossed. Really good weather. We've had some good weekend weather, so let's hope it continues this weekend. And good luck to your wife.
- [85:27]
Tim Stenovec
Yeah, she, she's trained, she's been training, she's excited. She's want to do this for years. I mean, we've lived in New York for like, gosh, close to 20 years at this point.
- [85:35]
Josh Wingrove
Yeah.
- [85:35]
Tim Stenovec
And this is finally the year she's making it happen. So. Really cool. Rob Simulcare, CEO of New York Roadrunners. He's also a two time New York Marathon finisher as well. See the medals there behind him. The New York Roadrunners is the nonprofit that puts on the TCS New York marathon. Rob joining us from New York. I do seriously want to encourage anybody who has never seen the marathon. It is one of the most special days here in New York City. Go check it out. We have friends coming in from Westchester County. We have friends coming in from New Jersey. Everybody makes a day of it. They're not just coming to watch my wife. They're like, yeah, I mean, I haven't.
- [86:12]
Carol Massar
Done it a long time.
- [86:13]
Tim Stenovec
Great thing. And a little secret what Bring the kids bikes as the last runners go through, sneak onto those closed roads and bike through Rob. I probably shouldn't say I see Rob. He's probably like, don't say this. Just stay away from the New York City sanitation trucks that are coming through to clean up everything.
- [86:31]
Carol Massar
But the kids can just ride the roads, right?
- [86:33]
Tim Stenovec
Yeah, the kids can just ride the roads. It's a special day in New York. This is the Bloomberg Business Week Daily Podcast, available on Apple, Spotify and anywhere else you get. Your podcasts listen live weekday afternoons from.
- [86:47]
Joe Doe
2 to 5pm Eastern on Bloomberg.com, the.
- [86:50]
Tim Stenovec
Iheartradio app, TuneIn, and the Bloomberg Business App.
- [86:54]
Josh Wingrove
You can also watch us live Every.
- [86:56]
Tim Stenovec
Weekday on YouTube and always on the Bloomberg Terminal.
- [87:07]
Carol Massar
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