Bold Names: Why Elon Musk’s Battery Guy Is Betting Big on Recycling

Summary

WSJ Tech News Briefing: Bold Names Episode Summary

Episode Title: Bold Names: Why Elon Musk’s Battery Guy Is Betting Big on Recycling
Host: The Wall Street Journal
Release Date: November 30, 2024

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Introduction

In this episode of Bold Names, The Wall Street Journal delves into the innovative efforts of JB Straubel, a pivotal figure behind Tesla’s success and the founder of Redwood Materials. The discussion highlights Straubel’s ambitious vision to revolutionize battery recycling, aiming to support the electric vehicle (EV) industry's sustainability and reduce environmental impact.

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JB Straubel’s Journey from Tesla to Redwood Materials

JB Straubel, often hailed as "Elon Musk’s battery guy," spent 15 years at Tesla, contributing significantly to the company's advancements in electric vehicles. His tenure at Tesla not only cemented his reputation as a co-founder but also provided him with invaluable insights into disrupting industries under the mentorship of Elon Musk.

Quote:
"Tim Higgins: What did you learn from him about executing in business that we on the outside don't know or don't really appreciate?"
"JB Straubel: At Tesla, I learned some incredibly important lessons. The importance of aligning a team and a company around, well, an impactful, but also a clear mission and vision is something that I think Elon does phenomenally well."
[16:54]

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Founding Redwood Materials

Post-Tesla, Straubel founded Redwood Materials, a company focused on recycling lithium-ion batteries to support the growing demand for EVs and other electronic devices. Despite being a relatively new player in the industry, Redwood Materials has swiftly scaled operations, recycling 20 gigawatt-hours of batteries annually—the equivalent of 250,000 electric cars.

Quote:
"JB Straubel: It feels a bit like we are inventing the next generation of refineries, so to speak."
[00:58]

Straubel envisions a future where all electric vehicles rely on recycled batteries, significantly reducing the need for mining raw materials. This approach not only addresses environmental concerns but also creates a sustainable supply chain for critical materials like lithium, nickel, and cobalt.

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Operational Insights and Scale

Redwood Materials tackles the complex process of recycling lithium-ion batteries from various applications—ranging from consumer electronics to electric vehicles. The company aims to achieve high-efficiency recovery rates (95-98%) of critical metals, seamlessly integrating recycled materials back into the battery supply chain.

Quote:
"JB Straubel: On average, I think humanity is probably underperforming a little bit versus its potential. Maybe Elon is kind of beyond the optimum at times, but I think it could be probably a positive example to really crank up the intensity for a lot of other folks from the Wall."
[02:07]

Straubel emphasizes that this transition won't happen overnight but will gradually shift the focus from mining to recycling, enabling a more sustainable and environmentally friendly EV ecosystem.

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Challenges in the EV Market and Sustainability Goals

The episode explores the current state of the EV market, noting that while EV sales continue, the explosive growth once anticipated has somewhat plateaued. Straubel remains optimistic, believing in the inevitable transition to electric transportation, albeit at a slower and more steady pace.

Quote:
"JB Straubel: We are 2% of the way there, 98% left to go. So by any definition, to me that is just in the bare beginning because it has such a huge potential and such enormous scale as time goes by."
[12:11]

Straubel underscores the importance of sustainability, highlighting that recycled materials can drastically reduce the environmental footprint compared to traditional mining practices.

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Insights from Tesla and Elon Musk

Straubel shares his experiences working closely with Elon Musk, emphasizing the importance of a clear mission and intense work ethic. He admires Musk’s ability to align the team around a shared vision and drive them to achieve extraordinary results, despite the challenges.

Quote:
"JB Straubel: I learned a huge amount from Elon. We basically went through this unbelievable trial by fire of learning on the fly, building the airplane in flight, so to speak."
[16:54]

Straubel also reflects on Musk’s leadership style, noting the balance between high intensity and rewarding accomplishments, which fosters a sense of pride and achievement within the team.

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Role on Tesla’s Board and Overseeing Musk

As a member of Tesla’s Board of Directors, Straubel faces the challenge of overseeing Elon Musk while supporting the company’s mission. He strives to bring a technical perspective, asking critical questions to ensure Tesla’s technological strategies and roadmaps are robust and aligned with long-term goals.

Quote:
"JB Straubel: I returned mainly because I love the mission of the company. I feel this close connection to Tesla still, and it's something I'm very passionate about."
[19:10]

Straubel aims to provide value to both Tesla and its shareholders by leveraging his technical expertise and maintaining a supportive yet critical stance.

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Human Potential and Societal Progress

Straubel expresses concern that humanity may be underperforming compared to its potential, attributing this to a decline in the intense work ethic seen during past industrial and technological breakthroughs. He believes that fostering a culture of hard work and ambition is essential for driving future innovations, particularly in sustainability and energy transitions.

Quote:
"JB Straubel: I do think people have a tendency to work hard when there's stress on them... I've sort of taken that to heart, going forward."
[23:45]

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Scaling Redwood Materials Amid Uncertainty

Straubel discusses the strategies for scaling Redwood Materials during uncertain market conditions. He emphasizes the importance of running a stable business while keeping sight of the long-term vision of enabling a sustainability transition. Building a profitable enterprise that aligns with environmental goals is pivotal for capitalizing on future opportunities.

Quote:
"JB Straubel: We need to run the business stably, but also keeping our eye on that North Star of enabling the sustainability transition, taking advantage of it and really building a profitable business to look at, you know, that incredible opportunity decades in the future."
[25:41]

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Conclusion and Future Outlook

JB Straubel’s work with Redwood Materials represents a significant stride toward a sustainable future for electric vehicles and beyond. By focusing on efficient battery recycling and reducing reliance on mining, Redwood Materials aims to create an environmentally friendly and economically viable supply chain for critical materials. Straubel’s insights from Tesla and his collaboration with Elon Musk continue to influence his approach to business and sustainability.

Final Quote:
"JB Straubel: Thanks for having me."
[26:05]

This episode of Bold Names offers a comprehensive look into JB Straubel’s mission-driven approach to technology and sustainability, highlighting the critical role of innovation in shaping a greener future.

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Notable Quotes with Timestamps:

• "It feels a bit like we are inventing the next generation of refineries, so to speak." – JB Straubel [00:58]
• "On average, I think humanity is probably underperforming a little bit versus its potential." – JB Straubel [02:07]
• "We are 2% of the way there, 98% left to go." – JB Straubel [12:11]
• "I learned a huge amount from Elon." – JB Straubel [16:54]
• "We need to run the business stably, but also keeping our eye on that North Star of enabling the sustainability transition." – JB Straubel [25:41]

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Credits:
Sound Design by Michael Laval and Jessica Fetton. Theme music by Jessica Fetton. Additional contributions from Julie Chang, Catherine Milsop, Scott Salloway, and Philana Patterson. For more insights, visit WSJ.com.

Transcript

[Unknown Host]

AI could be the most transformative technology since the advent of the Internet itself. So how can we start putting it to work? Find out in the latest episode of AI that Means Business, a new podcast from Google, and custom content from WSJ.

[Tim Higgins]

JB Straubel has been called one of the brains behind Tesla's success. Now he is attempting to use what many would see as trash to power the electric car revolution. Though founded just a few years ago, his company, Redwood Materials, is already recycling 20 gigawatt hours of lithium ion batteries each year. That's roughly equivalent to what would be found in 250,000 electric cars. The elements they are pulling out of those batteries, not out of the ground, are helping the company generate cash by selling materials such as lithium and nickel back into the battery supply chain.

[JB Straubel]

It feels a bit like we are inventing the next generation of refineries, so to speak.

[Christopher Mims]

Straubel speaks softly. But don't let that deceive you. He says Redwood is on Track for about $200 million in revenue this year. And he imagines a day when all electric cars are running on recycled batteries. And recycled batteries are supplying materials that go into everything in our lives, from a greatly expanded power grid to every consumer gadget in our homes, appliances, power tools, our cell phones. In that future, he sees a world where humanity no longer has to pursue the messy, destructive process of extracting these materials from the earth.

[Tim Higgins]

If anyone can pull this off, Straubel may be able to. He spent 15 years at Tesla, where his contributions were so great. He was considered a co founder. He was Elon Musk's battery guy, and now he is on the company's board.

[Christopher Mims]

While at Tesla, Strabel learned firsthand the challenges of disrupting industries. Long days, hard work, incredible optimism. Now he's applying what he learned from Elon Musk during those tough early years at Tesla.

[JB Straubel]

On average, I think humanity is probably underperforming a little bit versus its potential. Maybe Elon is kind of beyond the optimum at times, but I think it could be probably a positive example to really crank up the intensity for a lot of other folks from the Wall.

[Christopher Mims]

Street Journal, I'm Christopher Mims.

[Tim Higgins]

And I'm Tim Higgins. This is Bold Names, where you'll hear from the leaders of the bold name companies featured in the pages of the Wall Street Journal today. What will it take for Redwood Materials to scale during a time of great uncertainty in the electric car market? And hear what J.B. straubel learned from his time at the Elon Musk School of Management. Jb, welcome. You went from devoting your life to a consumer product with Tesla, very sexy sports cars and sedans to the other end of the spectrum of sexy recycling. Not a typical career. Why? Or maybe put more delicately for the audience, tell us what you're doing with redwood materials today that wasn't out there in the market when you began.

[JB Straubel]

Yeah, it isn't a very traditional, typical career trajectory, but I think it makes some more sense if you think in terms of myself as an engineer. First and foremost, I love energy, I love sustainability, and I'm more of an energy nerd than I am a car nerd. And that surprises a lot of people because they reflect on the Tesla journey and immediately think that I must have done that because of the sexy consumer product and the automobile. But for me, that was really a passionate, mission driven focus to demonstrate the technology behind electric vehicles and to do everything we could to prove to the world that they could be a solution and they could become a mass market vehicle as they are today. So for me, that was really the impetus, the beginning of Tesla. And in many ways, that exact same passion and mission scales into what we're focused on at Redwood today. It's helping that ecosystem, it's finding ways to solve problems as the world electrifies and make that easier and more sustainable.

[Tim Higgins]

What are you recycling? I mean, you're not out there picking up soda cans and taking them to the grocery store. I mean, this is a huge operation that you have in Reno. Paint a picture for me how this is operating, how this is working.

[JB Straubel]

Yeah, it isn't your typical kitchen garbage can recycling. So we're focused on lithium ion batteries and recycling every shape and size and type of application of lithium ion battery in the world today. And these have proliferated into pretty much every part of our lifestyle in existence. But we recycle everything from a cell phone battery or an AirPod battery to larger things like your computer or maybe a power tool or a lawnmower, but then all the way up to vehicles. And the electric vehicle batteries that are now scaling and having such an impact are also something that needs to be recycled at end of life. So that is where we really see the core growth for us. And then the final part of what we recycle is maybe even a less sexy part of the industry. But it's a lot of production scrap.

[Tim Higgins]

What is the bigger goal? How do you see this all working?

[JB Straubel]

Well, the simplest way to think about what we want to do with those materials is to make new batteries and it seems kind of almost overly simplistic. My kids can even understand it, and they really, to them, it makes sense that if we take an old battery, of course, we must figure out a way to make a new one out of it. In reality, there's so many steps in between that, and we are attacking that one step at a time so that we can eventually get back to equivalent types of purity of metals. These critical metals that everyone is very focused on today. Lithium, nickel, cobalt, copper. And we can reintroduce those metals right alongside of mined materials and slightly reduce the pressure and the demand that we're putting on the need to mine more of those same materials as we electrify.

[Tim Higgins]

I think you're hitting it on one of the issues here with EVs. On one hand, there's a lot of excitement for the technology because it's seen as green technology. But on the other hand, there's this, I don't know, dark side of having to dig all of these materials out of the earth.

[JB Straubel]

It is kind of an exciting vision, and I think it's one of the unintuitive parts of batteries and the electric transition. If you think of the very long term, all of the materials that we put into an electric vehicle and into that battery, stay with the battery. They don't go anywhere, they don't get burned, they don't get sort of sent out an exhaust pipe or dropped on the road behind you. They're all still there, they're all reusable. And we can recycle and reuse those same critical elements with 95, 98% efficiency and recovery. So it almost seems like a science fiction sort of imagining of the world in the future. But if you kind of fast forward to once we have a fleet of electric cars and once they've all kind of been mature and gone through their life cycle, we won't need to continue mining those critical materials.

[Tim Higgins]

When do you think that might be?

[JB Straubel]

I don't think it'll be a moment where we wake up one morning and then suddenly there's an aha moment, that suddenly it's all recycled. But instead it'll be a transition. Every single year that goes by, every month that goes by, the recycled content in the fleet of batteries is increasing, and it's going to take decades, but the scale of it is so, so big. It ends up really shifting the focus from mining of nickel and cobalt and lithium for batteries, shifting it all toward reprocessing.

[Tim Higgins]

It's interesting because a few years ago, it seemed like the world was Changing overnight, it really felt like that EV revolution was occurring. But now you look at the landscape and it's not that EV sales are falling exactly, it's just that the rate of growth is not as dramatic. And that kind of EV future seems to be perhaps stalling. Does that keep you up at night because you're making plans for a future where EVs and electric, the electrification of kind of the world, is dominant and it's not clear that that's on the horizon anymore.

[JB Straubel]

It may seem counterintuitive, but I almost sleep better when we're in these periods of slightly more conservative forecasting. And I get nervous almost when the exuberance feels like it runs away and gets ahead of the likely reality of the speed of a transition. And I am 100% confident that we are headed toward a nearly complete transition of transportation and vehicles to electricity. I also believe it will take a little longer than most people expect. It is a complicated transition, and I don't think it's something that can really be successfully mandated. And I think it's going to take time to create the mix of products that people really want to purchase and see value in in every segment of the market.

[Tim Higgins]

So are you generating revenue?

[JB Straubel]

We are. And I've kept us very focused on building an operating business. We'll have hundreds of millions in revenue in total over 2024. And that's something I'm pretty proud of. It's an accomplishment to really do that in a difficult market and do that without a set of government incentives that are creating that revenue.

[Christopher Mims]

JB Straubel says his company is generating revenue at a time of great uncertainty. Could battery recyclers like his one day replace the oil giants? Plus, why he thinks more people should be like his former boss, Elon Musk.

[JB Straubel]

On average, I'd say most leaders and business folks could probably work harder than they do.

[Christopher Mims]

Stay with us.

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[Unknown Interviewer]

JB. When you talk about your confidence in America, the world, making a complete transition to 100% electrification and transportation, and presumably in other things, right? The electricity grid, renewables, home appliances, Ultimately industry. But as we approach that goal, what.

[Christopher Mims]

Does that look like?

[Unknown Interviewer]

I mean, does America become the Saudi Arabia of batteries? Do you become the Exxon Mobil of the underlying materials that go into them? What kind of scale are you projecting as we make this transition?

[JB Straubel]

There's a lot of talk of, okay, what's the growth rate of EV sales in a given quarter? But what really matters, if you're thinking about the sustainability of, of the vehicles in the country or in the world, is how many of them are electric, how much fuel did they actually use, or how much fuel was avoided. And today, to put that in perspective, the fleet of cars in the US today is about, give or take a few, maybe a percent, about 2% electrified, 2%. So 98% of the vehicles are not electric or burning fossil fuels, petroleum, diesel, whatnot. So that to me is sort of the most sobering number to really give you a sense of where are we on this transition? And we're 2% of the way there, 98% left to go. So by any definition, to me that is just in the bare beginning because it has such a huge potential and such enormous scale as time goes by. And I do think it feels a bit like we are inventing the next generation of refineries, so to speak. I hope we don't quite have a direct comparison to an ExxonMobil in the future, but there is some commonality that we are taking these old raw materials and inventing ways to refine them into a whole selection of new products that the world needs and then building the ecosystem to do that. In some ways that's what the petroleum companies did in the last century.

[Unknown Interviewer]

So are trillion dollar companies going to be built in this space?

[JB Straubel]

I think it's entirely possible. Tesla has touched that in the past and I think may well touch it in the future. But that's potentially, I think, one of many. If you look at the scale and size of this whole ecosystem, it would.

[Unknown Interviewer]

Clearly justify that these materials presently are available from China, from elsewhere, where there's already a really robust mining operation. I understand that that's heavily subsidized, but given that what we need to make a transition to a carbon free future is for everybody to get their hands on affordable EVs as fast as possible. Why does it matter where those materials come from?

[JB Straubel]

If you zoom out a little bit on it and think of one of the key reasons that electrification is driving forward is sustainability. It's a transition from fossil fuels to more sustainable energy sources. One of the reasons to do that is reducing carbon emissions and carbon atmospheric pollution. I think we should care to some degree about the embedded carbon and the way that we make that transition. This is kind of the concept of almost the environmental payback of an EV or a solar panel or a wind turbine. All these technologies have a similar concept, which is how long does it have to operate before it kind of recovers the cost or the emissions needed to make it in the first place. And I do think that's an important thing to keep in our mind.

[Tim Higgins]

We've just heard how Straubel sees the world making the transition to electric vehicles. When we come back, he digs into his time at Tesla and his relations with the world's richest man, Elon Musk.

[JB Straubel]

It's always easier, I think, when you're remembering the past to remember the fun times. And sometimes, you know, the really difficult stuff kind of gets grayed out a bit.

[Tim Higgins]

That's next.

[Unknown Host]

This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. But what policy changes should investors be watching? Washington Wise is an original podcast for investors from Charles Schwab that unpacks the stories making news in Washington and how they may affect your finances and portfolio. [e-mail] Washingtonwise.

[Tim Higgins]

JB you spent roughly, what, 15 years at Tesla. You worked very closely with Elon Musk. And I think people, because he's so public, because he seems to kind of live his life on social media, on X, they feel like they know him or they feel like they know everything about him. But you worked with him very closely. What did you learn from him about executing in business that we on the outside don't know or don't really appreciate?

[JB Straubel]

Yeah, it is interesting watching everyone want to be best friends with the movie star they've watched in the movie. We had an incredibly productive partnership for so many years. And I look back on it quite fondly and many times. I think maybe it's always easier, I think, when you're remembering the past to remember the fun times. And sometimes the really difficult stuff kind of gets great out a bit. But in total, I learned a huge amount from Elon. And we basically went through this unbelievable trial by fire of learning on the fly, building the airplane in flight, so to speak. At Tesla, I learned some incredibly important lessons. The importance of aligning a team and a company around, well, an impactful, but also a clear mission and vision is something that I think Elon does phenomenally well. And it was inspiring to me. You know, it resonated with me, and I've sort of taken that to heart, you know, going forward. You know, I also think he's. He does an incredible job of just rallying an intensity and a passion inside of a company and a team. That's really unusual. It's uncomfortable. You know, people don't like to, you know, work insanely hard. You know, it's not the kind of natural state of most humans, but it is really rewarding. When you look back on what teams can accomplish, I think they feel proud and rewarded by kind of the results of that. But it's hard in the moment.

[Tim Higgins]

In 2023, you returned to Tesla to be on the Board of directors. The board has come under criticism for how it's overseen Musk. The Journal has reported about concerns of his drug use. There's been distractions with Twitter turned X now his embrace of US Politics. Yet as CEO, he has provided a great deal of value to shareholders since going to public. How do you balance your role, this new role of overseeing Musk, the CEO, yet also giving him the room he needs to be the Elon Musk that has gotten so much done to let him cook, if you will.

[JB Straubel]

Well, it is a challenging balance. I returned mainly because I love the mission of the company. I feel this close connection to Tesla still, and it's something I'm very passionate about. I probably always will be. And I also have a close connection to a lot of the team that remains at Tesla and want to be helpful, want to be supportive in the way that I can with the time that I have available. So I am doing my best in learning how to be supportive in that more limited engagement. I think one of the things I try and bring to that is a little bit more technical view on things and trying to really evaluate and I'd say ask the challenging questions of the technology strategies and roadmaps and performance along the way. I enjoy that. I think that's something I can try and provide to the shareholders and value for Tesla as we go.

[Tim Higgins]

As you watch him, you've watched him over the years. He's at Tesla, he's at SpaceX, he's got all of these other startups. Do you ever worry about him burning out or how long he can keep it going? You know, now as the CEO of your own startup and also being on the board, there's only so much time in the day, there's only so much energy. What kind of concerns do you have?

[JB Straubel]

Well, you know, I do, I'd say at times, you know, sort of caution or in the times when I can, you know, would give him. I don't know exactly how I would frame it. Sorry, maybe an awkward answer on that one. You know, I trying to think how I would want to answer that exactly. You know, I mean, Elon is human like all of us, and he has an incredible tolerance for working incredibly hard and for putting an immense focus and hours into all these different projects with my personal hat on. I do want to make sure he tries to balance that and, and doesn't burn himself out and takes at least a moment out here and there so that he can stay at a peak productivity and peak value creation for himself and all the various companies. But I think overall he does set out a pretty compelling example on this. I think on average, I'd say most leaders and business folks could probably work harder than they do without burning out. So I'd say on average, I think humanity is probably underperforming a little bit versus its potential. Maybe Elon is kind of beyond the optimum at times, but I think it could be probably a positive example to really crank up the intensity for a lot of other folks.

[Tim Higgins]

Are you sleeping on the factory floor yet?

[JB Straubel]

I try and manage things so that I don't have to, but startups are intense and you may try as you want to plan a predictable course, but the outside world intervenes. And yeah, we've had some pretty intense times where it's taken all hands on deck or nonstop weeks of intervening and trying to get things to work that didn't work the way they should or when they should have. I like setting aggressive goals. I'm kind of an optimist by nature, I guess. So that sort of bleeds into being maybe too optimistic at times about what we can accomplish. And then that sort of bleeds into getting into challenging situations where we have to hustle to catch up and. And deliver.

[Christopher Mims]

But yeah, I'd love to hear more about why you say humanity might be at this time in history underperforming what it could be doing.

[Unknown Interviewer]

It's easy to look back at the last great space age or something and think, wow, what was it like when we were first sending people to the moon or building railroads across the West? What do you think is the root of that? What's going on?

[JB Straubel]

It's hard to, I'd say, put a finger exactly on it. I used to love reading about Thomas Edison and Nikola Tesla, ironically and kind of the dawn of the industrial age and the electric age, and it was this prolific period of invention and some of these huge systems that we rely on today were really conceived of and invented and grew so quickly 100 years ago, 150 years ago. And on one hand you can kind of say, geez, it feels like we're maybe slowing down today. But there are certainly examples I think we can point at like this energy transition we're in the middle of and maybe the AI transition we're in the middle of, where in hindsight, people might look back and say also that this was this very prolific industrialization period. But overall though, I do think people have a tendency to work hard when there's stress on them or environmental stress or economic stress or something like that. And we've done such a good job at removing those stress situations from the population, especially the developed population. I think that has a tendency to get people to be a little more comfortable. I do worry a little bit about that. Just as looking at the US Maybe in general versus maybe some other countries, in my travels and working with groups in different countries, I can definitely see a difference in the level of intensity and work ethic and just the hunger to go and improve themselves and improve their families and improve their they're kind of next generation slot in life.

[Tim Higgins]

Well, we're almost at a time and so I'll just one last question here. Kind of going back to where we began. How do you scale a business during great uncertainty when you have this vision for the world changing?

[JB Straubel]

We need to run the business stably, but also keeping our eye on that North Star of enabling the sustainability transition, taking advantage of it and really building a profitable business to to look at, you know, that incredible opportunity decades in the future.

[Tim Higgins]

J.B. straubel, founder of Redwood Materials. Thank you so much for joining us today.

[JB Straubel]

Thanks for having me.

[Tim Higgins]

And that's bold names for this week. Michael Laval and Jessica Fetton are our sound designers. Jessica also wrote our theme music.

[Christopher Mims]

We got help this week from Julie Chang, Catherine Milsop, Scott Salloway, and Philana Patterson. For even more, check out our columns on WSJ.com I'm Christopher Mims.

[Tim Higgins]

And I'm Tim Higgins. Thanks for listening.