‘Bloomberg Technology’ Full Show (10/15/2021)

Announcer: FROM THE HEART OF WHERE INNOVATION, MONEY, POWERPOLITE, IN SILICON VALLEY AND BEYOND, THIS “BLOOMBERGTECHNOLOGY” WITH EMILY CHANG. EMILY: I AM EMILY CHANG.THIS IS “BLOOMBERG TECHNOLOGY.” WITH AN ONGOING CHIP CRISIS ANDSHRINKING SUPPLY CHAIN, CAN COMPANIES KEEP UP? WE ARE LOOKING AT THE ROLE OF CHIPMAKERS.PLUS, HIGH-TECH DIAMONDS. WE ARE SPEAKING WITH THE CEOAND FOUNDER OF A COMPANY USING IT TO TRADE IT.AND THE GROWING DIGITAL DESIGN SPACE.WE WOULD HEAR FROM THE CEO OF ONE COMPANY, ON HOW THE COMPANYHAS GONE FROM AN OFFICE TO MAINSTREAM SUCCESS.ALL THAT AHEAD. FIRST, LET US LOOK AT THEMOVERS AND Grocery TODAY. ANOTHER DAY IN THE GREEN. >> RISK ON.S& P 500 AND THE GREEN. IT WAS NOT BIG TECHOUTPERFORMING. ONE OF THE LAGGARDS WAS ABIOTECH INDEX, DOING WELL EARLIER THIS WEEK.TODAY, UNDERPERFORM. IF YOU NEEDED EVIDENCE OF ARISK ON DAY, MONEY COMING OUT OF TREASURIES, SIX BASIS POINTS.ALL THE ACTION WAS IN THE CRYPTO MARKET.IT HASN’T STOPPED YET.WE START OFF WITH BLOOMBERGREPORTING ON THE PRINT SIDE, SAYING BITCOIN IS WRONG AFTERBLOOMBERG REPORTED THAT A GOVERNMENT AGENCY IS UNLIKELYTO BLOCK A BITCOIN ETF. THAT IS WHY YOU’RE SEEING THESPIKE TODAY. COMPARE IT TO EARLIER IN 2020, SOME PRETTY STRONG ACTION. I Demand TO TALK ABOUT ONE OF THENEXT PIECES OF MARKET, SHIPPING RATES.WERE TALKING ABOUT INFLATION CONCERNS, SUPPLY CHAIN CONCERNS.EVEN THOUGH WE HAVE HAD THIS MASSIVE RUN-UP IN SHIPPINGRATES, THEY ARE OFF THEIR PEAK. THEY ARE STILL EXTREMELYELEVATED. THAT WILL BE THE CONVERSATIONTHAT DOMINATES THE MARKET OVER THE NEXT COUPLE WEEKS. CAROLINE: THANK YOU. WE CONTINUE TO THINK ABOUT HOWMUCH THE SUPPLY CHAIN WILL BE MENTIONED.I THINK IT WAS MENTIONED MORE THAN 3000 TIMES AND ANALYSTCALLS.ONE ANALYST SAID WE HAVE NOTMADE ENOUGH PROGRESS WHEN IT COMES TO THE CHIP SUPPLY.I WANT TO BRING IN THIS ANALYST. GREAT TO HAVE YOU.REALLY TRYING TO ANALYZE WHETHER ENOUGH HAS BEEN DONE, WHAT CAN BE SEEN IN THE NEXT COUPLE OF MONTHS.LET’S KEEP IT SHORT AND THE TIMEFRAME FOR THE HOLIDAYS.WHAT WILL WE SEE IN TERMS OF HIGH-END GOODS, PHONES, ELECTRONIC EQUIPMENT? >> THE HOLIDAYS WILL BEINTERESTING. ALL THE Answers ARELONGER-TERM. WE CAN OPEN THE Ports 24 HOURS.WE CAN TRY TO STREAM LINE AND RAISE WAGES TO GET MORE PEOPLEFIND THE WHEELS OF TRUCKS, MOVING THE CONTAINERS ON THETRAINS FROM THE PORTS, BUT OVERALL THIS IS A Problem, ESPECIALLY THE CHIP-RELATED CHALLENGE, THAT WOULD TAKEMULTIPLE YEARS, AND NOBODY WANTS TO HEAR THAT, SO USINGDIFFERENT ACTIONS.BEST BUY CAME OUT WITH A NEWSHOPPER PROGRAM, THE EXCLUSIVE SHOPPER PROGRAM, AND THEY WANTTO CHARGE $200 A YEAR, GIVING SHOPPERS ACCESS TO HARDER TOGET TECHNOLOGY DEVICES, THAT THIS IS A CLEVER MOVE TO GETHIGHER PRIORITY SHOPPERS TO SPEND MORE.IT IS DIFFERENT THAN THE AUTOMOTIVE INDUSTRY WHEREPEOPLE ARE LEGITIMATELY WALKING IN AND PAYING 10% TO 20% OVERLIST PRICE JUST TO PURCHASE AN AUTOMOBILE THEY DESIRE. IT IS AN INTERESTING Era RIGHTNOW, BECAUSE THE HOLIDAYS ARE COMING AND IT IS UNLIKELY WILLHAVE THIS PROBLEM SOLVED. CAROLINE: INFLATIONARY PRESSURES, CLEAR. YOU SAY THIS ON SHORING DEBATE, WHETHER WE SHOULD HAVE FABS IN THE U.S.MARK GURMAN DID REPORT, IN LARGE PART BECAUSE OF U.S.CHIPMAKERS.THEY SOURCE PARTS FROM ABROAD, BUT IS THE ANSWER REALLY ONSHORE? >> THE ANSWER HAS TO BE TODIVERSIFY. During the past 30 OR SO YEARS, WE HAVE GONE FROM PRODUCING OVER ONE THIRD OF THE CHIPS TOABOUT 12% OF THE CHIPS. PROBABLY MORE ALARMING IS THEFACT THAT IT IS ALMOST 0% OF THE LEADING EDGE IS PRODUCED INTHE U.S. YOU HAVE SPOKEN ENDLESSLY, I’DLISTEN TO THE LAST SEGMENT IN THE PRIOR SHOW, ABOUT A SINGLEKINK IN THE SUPPLY CHAIN THAT CAN TAKE THE WHOLE THING DOWN.YOU HAVE A $. 50 CHIP HOLDING UP THE COMPLETION OF A VEHICLE FORFORD OR VOLKSWAGEN GROUP, PC NEEDING A USB BUS CONTROLLER, AONE DOLLAR PART, AND THEY CANNOT GET IT, SO INSTEAD OFPUTTING PRODUCT ON THE SHELVES, IT IS COMPLETELY STOPPINGPRODUCTION, SO TO ADD CAPACITY, WE HAVE TO DE-RISK.TAIWAN IS OVER 90% OF LEADINGEDGE, KOREA HANDLING THE REST. WHAT IF SOMETHING HAPPENS? WE CAN’T HAVE ZERO PRODUCTION HERE. I KNOW GLOBAL FOUNDRIES AREPLANNING FABS, BUT IT IS TWO Years AND 0 BILLION TO BUILDTHESE, AND IT WILL NOT Instantaneously FIX THINGS, THESUBSTRATES APART, PIECES NEEDED TO INCREASE CHIP PRODUCTION.CAROLINE: YOU’RE TALKING ABOUT THEINFLATION PRESSURES, GOING INTO A SHOW ROOM JUST PAYING UP.IF WE ONSHORE, WILL COMPANIES HAVE TO PAY UP? WILL IT BE MORE EXPENSIVE TO GET WHAT WAS ORIGINALLY $. 50, CHIP WAITING TO GO INTO IT? >> NO QUESTION.EVEN RIGHT NOW, WE WILL HAVE TO RAISE WAGES SHORT-TERM.THE TYPES OF WORKERS THAT GO INTO THESE FABS ARE NOT LOW-ENDWORKERS. THESE ARE HIGH LEVEL PEOPLEWELL-PAID. I SPOKE AT AN EVENT ALONGSIDETHE IBM CEO, AND WE HAD THIS CONVERSATION.I LISTENED TO A PERSON FROM AMD, AND OTHERS, AND THEY WERETHROWING OUTLAID 2022, AND ONE SAID HE THINKS 2023 AND 2024 WHEN THIS CAN CONTINUE TO BE A PROBLEM, AND PART OF IT ISGOOD, BECAUSE OF THE ONGOING DEMAND FOR DIGITALTRANSFORMATION FOR ENTERPRISE, SOFTWARE, AND CONSUMER GOODS, BUT THE DEMAND WILL PUT A LOT OF PRESSURE ON BUILDING MOREAND MORE CHIPS, AND WE WILL HAVE TO PAY, BUT IF YOU LOOK ATWHAT IT IS COSTING NOW, BLOOMBERG PUT OUT SOME NUMBERS ,$ 200 BILLION Significance ON THE AUTOMOTIVE INDUSTRY.YOU WOULD THINK THAT COULD BE OFFSET BY WHAT WAS LOST IN JUSTTHE SINGLE EVENT, SO GOING TO EVERYTHING JUST-IN-TIME, WEHAVE TO DE-RISK THIS, BECAUSE IT HAS Induces WAY TOO MUCH.WHATEVER WE SAVE IN THE SHORT TERM, WE LOST DURING THISCHALLENGE OVER THE PAST TWO YEARS.CAROLINE: IT IS INTERESTING YOU ARE TALKING ABOUT HOW BEST BUY ANDCOMPANIES ARE FINDING A WAY TO BENEFIT FROM THIS, CHARGINGCUSTOMERS MORE WITH LOYALTY PROGRAMS. WHAT HAVE YOU HEARDOF IN TERMS OF CARMAKERS WHO NEED THE CHIPS, WHAT THEY’REDOING TO INCENTIVE FIVE PRODUCERS TO THEM FIRST? >> THAT IS A Great challenge. THESE FABS CANNOT JUST FLIPFROM ONE PROCESS TO ANOTHER TO START MAKING MORE CHIPS.IT GOES BACK TO ANOTHER PROBLEM, BUT WHEN THE PANDEMICWAS COMING TO AMERICA, CANCELLATIONS FOR ORDER STARTEDTO EMERGE, THEN OTHER ORDERS ROSE TO THE TOP.DIFFERENT COMPANIES HAD A DIFFERENT ABILITY TO ANALYZETHE MARKETS, SOME Fellowships CANCELED, SOME SLOWED PRODUCTION, AND SOME PUT ONMORE. TO JUST SAY WERE GOING TO PAYMORE, IT’S PROBABLY NOT GOING TO BE ENOUGH TO EXPEDITE THEPRODUCTION, SO AS FAR AS I SEE IT, I Envision IT IS ABOUTCREATIVITY.WE HAVE HEARD FROM ELON MUSK.HE THINKS HE HAS IT UNDER CONTROL.I WOULD NOT PUT IT PAST HIM THAT HE DOES, BUT WE HAVE HEARDFROM OTHER AUTOMAKERS THEY ARE SHUTTING DOWN PLANS AND RUNNINGINTO MAJOR CAPACITY ISSUES. CAROLINE: WE WILL HAVE TO LOOK AHEAD TO THOSE TESLA NUMBERS AND NUMBERSFROM INTEL NEXT WEEK. Expressed appreciation for, DANIEL.GREAT INSIGHTS. TUNE IN NEXT WEEK.WE ARE LIVE, COHOSTING FROM THE PORT OF LONG BEACH, THE SUPPLYCHAIN PAIN SPECIAL. WE WILL HAVE Clients FOCUSING ON SUPPLY CHAIN BACKLOGS, AND PLIMPACT ON OTHERS. THAT’S ON BLOOMBERG TELEVISION.AMAZON HAS APPEALED A FINE OVER THE EUROPEAN UNION’S DATAPROTECTION RULES.THEY RULED THE COMPANY VIOLATEDTHE RULES FOR USE OF PERSONAL DATA.AMAZON DENIED THERE WAS A DATA BREACH.COMING UP, WITH RANSOMWARE ATTACK’S ON THE RISE, ONEPERSON SAYS THIS IS MORE IMPORTANT THAN EVER.WE WILL SPEAK WITH THE CEO OF A COMPANY THAT HAS TRIPLED ITSVALUATION TO$ 6 BILLION IN THE LATEST FUNDING ROUND.THIS IS BLOOMBERG. CAROLINE: 2021, UNDISTORTED MARY YEAR FOR CYBERSECURITY TAX. A NEW REPORT FOUND RANSOMWAREATTACKS EXCEEDS THE LAST TICKET COMBINE.OUR NEXT GUEST KNOWS A THING OR TWO.YOU SOLD YOUR PREVIOUS SECURITY COMPANY TO MICROSOFT, NOWBUILDING A NEW ONE WORTH$ 6 BILLION, NEW FUNDING ROUND.WHAT IS THE COMPANY DOING? >> WE ARE ON A MISSION TO MAKETHE CLOUD LESS CLOUDY. WE HELP COMPANIES WITHEVERYTHING THE BUILDING AND RUNNING IN THE CLOUD TO MAKE ITSECURE. THEY CAN Recognize THE MOSTCRITICAL RISKS. THAT IS OUR MISSION. CAROLINE: LESS CLOUDY, I’D LOVE THAT. TALK ABOUT THE THREAT LEVELSYOU ARE SEEING, WHERE IS IT MOST INTENSE, HOW ARE YOUENSURING RANSOMWARE IS NOT PENETRATING? >> WE LOVE TALKING ABOUT THEUNICORNS OF CYBERSECURITY.OUR COMPANY IS A GREAT EXAMPLE. FOR ANY UNICORN, THERE IS A DARK UNICORN, SO WE SEE A HUGERAISE. WHEN Fellowships RUSH INTO THECLOUD AND YOU LOOK AT THE SECURITY IN THE CLOUD FROM THATIS A HUGE CAP. Firms ARE FOCUSED ON THATAREA NOW. CAROLINE: RANSOMWARE, TERRIFYING.TALK TO US ABOUT THE WAYS IN WHICH THOSE UNICORNS ARE BEINGBUILT, THE WAYS THEY ARE MAKING THE MONEY, BECAUSE BETTER ORWORSE, CRYPTO HAS A BAD NAME FROM BEING EMBROILED INRANSOMWARE AND THE WAYS IN WHICH THEY MIGHT BE PAID, BUTTHE ADMINISTRATION HAS BEEN TRYING TO ENSURE THAT IS NOT ANEASY WAY TO GO UNTRACKED.HOW ARE PEOPLE MANAGING TOEXTORT? >> IT IS AN ADVANTAGE THATHACKERS HAVE TODAY. WE AS CYBERSECURITY COMPANY, THAT IS WHAT WE’RE FACING. ONE OF THE MOST CHALLENGINGTHINGS IS NATIONS ACTIONS. RUSSIA VERSUS BANK OF AMERICA, THAT IS AN UNFAIR FIGHT. WE MUST FACE THAT AS ACOMMUNITY. CAROLINE: HOW DO YOU MAKE IT LESS UNFAIR, MORE FAIR? >> I Consider WE HAVE A SOLUTION.WE See IT IS ABOUT PEOPLE FIRST, THEN PROCESS.THAT IS WHERE WE SHOULD FOCUS. WE AS A COMMUNITY WORKTOGETHER, VENDORS AND PARTNERS, AND THE CUSTOMERS THEMSELVES, IF WE WORK TOGETHER AS A COMMUNITY, WE CAN GET BACK INTHE FIGHT.CAROLINE: THROUGH ETHICAL HACKERS AND THELIKE? >> WE ARE SUPER PROUD.MICROSOFT JUST RELEASED THE 30 TOP RESEARCHERS IN THE WORLD.THREE OF THEM ARE PART OF OUR FAMILY.WE ARE PUTTING LOTS OF EFFORT INTO IT.IT IS ABOUT WORKING WITH THE COMPANY FROM THE SIDE OF THEHACKERS, AND HELPING THE CLOUD PROVIDERS IN THE COMPANIESBUILD A BETTER AND SAFER CLOUD. CAROLINE: WHICH IS THE FUNDING YOU RAISETHE 250 MILLION DOLLARS IN YOUR LATEST ROUND.THE MONEY YOU’RE PUTTING TO WORK, WHAT WOULD IT BE FOR? >> AGAIN, THE DEMAND IS HUGE.WE ALREADY HAVE 10% OF THE FORTUNE 500. WE ARE GROWING.WE ARE BUILDING THE PRODUCTS, RESEARCH AND DEVELOPMENT, BUTALSO THE GO TO MARKETS, LOOKING ANOTHER GEOGRAPHIES LIKE INDIA.AFTER RAISING $ 600 MILLION FROM THE WE HAVE THE ABILITY TOACQUIRE, SO GROWTH IS ON THE TABLE.CAROLINE: GREAT TO HAVE SOME TIME WITH YOU.GOOD LUCK ON THAT INORGANIC AND ORGANIC GROWTH.THAT IS OUR REPORT WITH THE COFOUNDER AND CEO OF WIZ. APPLE STEPS UP ITS GAME AS ITCHALLENGES AMAZON A GOOGLE, AND THE CONNECTED HOME MARKET.ALL THE DETAILS. AS WE HAD TO BREAK, REMINDERTHAT TECH EARNINGS KICK OFF NEXT WEEK. NETFLIX, TUESDAY.TESLA, IBM, WEDNESDAY. BIG ONE THURSDAY, INTEL.WE WILL BRING YOU THE NUMBERS AND ANALYSIS AS IT HAPPENS.THIS IS BLOOMBERG. CAROLINE: AS WE MENTIONED, TESLAREPORTING THIRD-QUARTER NEXT WEDNESDAY.WHILE IT ONCE WAS A CLEAR LEADER IN EV’S, THE MARKET HASBECOME FLOODED WITH COMPETITORS.OUR GUEST JOINS US NOW. >> FOR THE FORESEEABLE FUTURE, DEMAND IS NOT THE PROBLEM. EVERY BATTERY MADE BE SOLD.EVERY EV MADE AND DELIVERED AND NOT RECALLED WILL BE SOLD.I THINK THAT THE MARKET SHARES WILL DO WHAT THEY DO.TESLA MATHEMATICALLY HAS TO LOSE SOME SHARE WHEN YOU HAVESOME COMPANIES GOING ON 02 ABOVE ZERO, MATHEMATICALLY, THECHOICE WILL PUSH THAT DOWN. I Consider THERE IS ROOM FOREVERYONE TO SAY, IF WE MAKE A GOOD EV AT A REASONABLE PRICE, OR EVEN SOME EXCLUSIVE Cost Brackets, WE WILL GET IT ON THEROAD, BUT THAT IS JUST PART OF THE BATTLE.TO WIN THE WAR WAS NOW THAT WE HAVE THAT INSTALLED THESE, BUTDO WE DO WITH THAT? IT’S NOT Time HAVING IPHONES, IT IS THE Assistances, THE APPS, AND ECOSYSTEMS BUILT ON TOP OFTHAT REAL ESTATE. I Consider THE Firms, INCLUDING LEGACY COMPANIES, HAVE AN OPPORTUNITY TO THINKBEYOND THE UNIT PRICE AND TO THINK MONTHLY ACTIVE USER ANDRPU, AND HIGH-MARGIN SERVICE REVENUE.CAROLINE: INTERESTINGLY, WE HAD SOMEONESPEAKING ABOUT THE SUPPLY CHAIN DISRUPTION, TEMPORARY, SHESAYS, AND IT WOULD TAKE SOME TIME TO RESOLVE, SO MAKE OFTHAT WHAT YOU WILL, BUT TALK ABOUT THE ADMINISTRATION ANDWHETHER THEY PUT A LOT OF FOCUS BEHIND THE UNIONIZED CARMAKERS, AND INDEED, PUSH INTO EV AND INFRASTRUCTURE SPEND, WILL THEADMINISTRATION SUPPORT THIS INDUSTRY? >> YES, AND I WOULD SAY ACOUPLE OF THINGS. IT IS GREAT THE U.S.HAS WHAT IS A NATIONAL POLICY FOR RENEWABLE TRANSPORTATION.THAT IS FANTASTIC. FOR A WHILE, IT WAS HAPHAZARDAND UP TO THE STATES, SO IT IS GOOD WE ARE IN THE GAME, BECAUSE WERE TALKING ABOUT NATIONAL SECURITY HERE IS? WE — HERE RIGHT? WE ARE GETTING OFF OIL ANDBUILDING A BATTERY ECONOMY, AND WE DON’T HAVE CONTROL OVER OUROWN DESTINY, AND IN THE U.S ., SHAME ON US.I AM HOPEFUL WE ARE AWARE OF THAT NOW.AT THE SAME TIME, IT IS ULTIMATELY TECHNOLOGY.I THINK TOO MUCH IS MADE OF GOVERNMENT POLICY AND LOOKINGTO WASHINGTON TO HELP US WHEN IT COMES TO EV’S.IT WILL BE THE TECHNOLOGY.IT WILL BE ELON MUSK AND THOSETHAT FOLLOW THAT MAKE THE PRICE OF ACQUISITION AND TOTAL COSTOF OWNERSHIP OF IN EV NOT SLIGHTLY BETTER THANOIL-POWERED CARS, BUT UNCOMFORTABLY BETTER IN EVERYWAY. CAROLINE: THAT WAS ADAM JONAS SPEAKING TOUS EARLIER. MEANWHILE, APPLE STEPPING UPITS CHALLENGE TO AMAZON AND GOOGLE IN THIS PART — SMARTSPEAKER MARKET, HIRING A NEW ENGINEER TO THE TEAM, BUT THEREARE TROUBLES. FOR MORE ON THIS, LET’S BRINGIN MARK GURMAN FROM LOS ANGELES, A RESIDENT APPLEPERSON. TALK ABOUT WHAT THIS MEANS.HOW SIGNIFICANT DO THEY NEED TO MAKE INROADS INTO THIS MARKET? MARK: THANK YOU FOR HAVING ME. THE SMART HOME ECOSYSTEM IS ACRITICAL BATTLEGROUND FOR THE LARGER CONSUMER ELECTRONICSINDUSTRY. WE HAVE DISCUSSED IN THE PAST, AND I’D LIKE TO SAY IT ONLY TAKES ONE CRACK IN THEECOSYSTEM FOR THE WHOLE THING TO BREAK APART, RIGHT? IF AMAZON IS EXPOSED TO MORE APPLE CUSTOMERS ON THE ECHOSIDE, SMART SPEAKER SIDE, FIRE TV SIDE, THEY CAN ENCOURAGEPEOPLE TO LEAVE THE APPLE ECOSYSTEM, NOT ONLY FOR BETTERSMART SPEAKERS, BUT OTHER PRODUCTS.MAYBE THEY WILL BUILD ANOTHER PHONE WHAT DAY.THE SAME GOES FOR GOOGLE.IF SOMEONE BUYS A GOOGLEASSISTANT OR NEST SPEAKER, THEY MADE LIKE THAT EXPENSE ANDLEARN MORE ABOUT THE GOOGLE ECOSYSTEM AND POTENTIALLY BYTHE NEW PIXEL SIX NEXT WEEK. APPLE NEEDS THE SMART SPEAKERTO BE UP TO SNUFF OR ITS ECOSYSTEM IN ORDER TO RETAINTHOSE USERS FOR THIS CRITICAL CATEGORY. CAROLINE: TALK ABOUT THE ECOSYSTEM. WE KNOW THAT THROUGH REPORTINGSUCH AS YOURS. IT HAS TAKEN A HIT IN TERMS OFSUPPLY CHAIN ISSUES. THEY ARE STILL LOOKING TOUNVEIL NEW PRODUCTS. HOW MUCH WOULD THIS BE AN ISSUETRYING TO DESIGN NEW THINGS WITH SIGNIFICANT ISSUES IN THECHIP BACKLOG? MARK: I HAVE NOT Understood ANYTHING LIKETHIS IN MY YEARS COVERING APPLE. OVER THE PAST MONTH, THEYANNOUNCED NEW PRODUCTS, NEW APPLE WATCH, SERIES SEVEN, WHICH I HAVE RIGHT Now TODAY ANNOUNCED, THAT CAME OUTEARLIER TODAY, THEY ANNOUNCED THE IPHONE 13 LAST MONTH, THENEW IPADS LAST MONTH. IF YOU WERE TO ORDER THOSEDEVICES TODAY, DEPENDING ON THE CONFIGURATION YOU’RE LOOKING ATA SHIPMENT AND DELIVERY TIMEFRAME AND ABOUT ONE MONTHFROM NOW SO MID-NOVEMBER TO MID-DECEMBER FOR THE NEW WATCH.ONE OF THE HIGHER END ADDITIONS, NEW ADDITIONS, SOMACS FACING BACKLOGS AS WELL.ON MONDAY, YOU WILL Witness A NEWMACBOOK PRO. A Lot OF PEOPLE HAVE BEENWAITING TO UPGRADE TO THIS MACBOOK PRO, BECAUSE THERE HASBEEN A LOT OF ANTICIPATION FOR A HIGH-END MACBOOK PRO WITH ANAPPLE PROCESSOR. NOW IT IS COMING TO HIM ANDPEOPLE READY TO SPEND, AND WE HAVE TO SEE IF THEY WILL HAVEENOUGH SUPPLY TO MEET THAT POTENTIALLY STRONG DEMAND.CAROLINE: YOU GET AN INSIDE TRACK WHEN ITCOMES TO GETTING YOUR WATCHES EARLIER THAN SOME OTHERS.MARK, WE Expressed appreciation for SO MUCH FOR THE Recent THING ON HIS LIST.– RISK.COMING UP, DIAMONDS ARE GOINGDIGITAL. WE SPEAK WITH THE FIRST EXCHANGE-TRADED, QUICKLYTORY-APPROVED FUNGIBLE DIAMOND COMMODITY. YOU Came THAT? WE WILL Dissect THAT AND DISCUSS HOW THEY ARE BASICALLYPUTTING GEMS ON A BLOCKCHAIN WAS THAT MEAN IN TERMS OFTRADING? LATER, WE SPEAK TO THE CO-CEOOF MINTED ON HOW SHE HAS GROWN OUR COMPANY TO A DIGITAL DESIGNEMPIRE. WE WILL Start BACK TO STANFORD ANDOUR COLLEAGUES FOR THE BLOOMBERG BUSINESSWEEK EVENT, TALKING TO PLENTY OF ALUMNI ANDTHE CEO OF MINTED WILL BE JOINING US.FROM NEW YORK, THIS IS BLOOMBERG. CAROLINE: THIS IS “BLOOMBERG TECHNOLOGY, “I’M CAROLINE HYDE IN NEW YORK. LET’S GET BACK TO THE MARKET.KRITI: USE DAY WHEN IT COMES TOCRYPTOCURRENCY AND BITCOIN. THE FTC NOW SAYS IT WILL GET INTHE WAY OF A POTENTIAL BITCOIN ETF FUTURES.TAKE A LOOK AT WHAT IT DID TO THE BITCOIN CURVE, THIS SHOWSTHE PREMIUM OVER THE SPOT PRICE. IT Toils DIFFERENTLY IN BITCOIN.IN Oil, WE TALK ABOUT OIL Toll AND THE SPOT PRICE ISHIGHER THAN THE FUTURES PRICE BECAUSE PEOPLE NEED OIL RIGHTNOW. BITCOIN WORKS DIFFERENTLY BECAUSE OF INBUILT EXPECTATIONTHAT THE FUTURES PRICE IS GOING TO BE HIGHER ANYWAY.THAT IS WHAT YOU’RE SEEING HERE, THE FUTURE PREMIUM HIGHERRELATIVE TO THE SPOT PRICE. WHILE WE ARE TALKING ABOUTETF’S, PROSHARES SIGNALING BITCOIN FUTURES ETF COULDLAUNCH AS SOON AS MONDAY. IT Gazes AT LEAST FOR NOW THESEC IS TAKING A STEP BACK AND NOT TRYING TO GET THE WAY.LET’S SEE ON MONDAY.TODAY IN THE MARKET, BAD NEWSSHOWED UP IN A LOT OF CRYPTOCURRENCIES, INCLUDINGRIOT, COINBASE, SQUARE. AFTER HOURS YOU HAD JACK DORSEYTWEET THE SQUARE MIGHT GET INVOLVED WITH CREATING ABITCOIN MINING NETWORK. SQUARE SHARES TRADED HIGHERAFTER HOURS ALMOST 3% BEFORE PARING GAINS.THE BIGGEST STOCK WITH THE MOST EXPOSURE TO CRYPTO IS MICROSTRATEGY, DAVE WILSON POINTING THIS OUT, MICROSTRATEGY HAS AMASSIVE INVESTMENT IN BITCOIN. IT TURNS OUT THE GAINS THEYMADE ON THE INVESTMENT TOOK ALMOST 50% OF THE COMPANYMARKET VALUE. BITCOIN FUTURES, MICROSTRATEGY, ONE Broth YOU MIGHT WANT TO Remain AN EYE ON. CAROLINE: Expressed appreciation for, AND THANK YOU FOR THAT BREAKING NEWS.WE ARE GOING TO TALK ABOUT CRYPTO AND THE BLOCKCHAIN THATUNDERLIES IT BECAUSE WE ARE STARTING TO SEE BLOCKCHAIN USEDTHE TRADE DIAMONDS. CAN YOU TRADE DIAMONDS AS ANACTUAL COMMODITY? THAT IS WHAT THE BERMUD-ABASEDDIAMOND STANDARD IS LOOKING TO DO. IT IS THE FIRST EXCHANGETRADED, REGULATOR APPROVED FUNGIBLE COMMODITY, AND IT ISOFFERING FUTURES CONTRACTS AND HOPEFULLY AN ETF ON THE NEWYORK STOCK EXCHANGE. WE TURN TO THE FOUNDER AND CEOOF DIAMOND STANDARDS.WHERE TO START? SO MUCH NEWS, YOU ARE RAISING MONEY, JUST COMING OFF NEWSABOUT CRYPTO, BIT CARBON, WHAT DOES IT DO? >> BIT CARBON IS A SIGNIFICANTBREAKTHROUGH IN THE WORLD OF CRYPTOCURRENCIES.IT IS BASED ON THE FIRST BLOCKCHAIN NATIVE COMMODITY, THE DIAMOND STANDARD POINT. THAT CURRENCY CAN BE USED JUSTLIKE IT GOING, BUT HAS A REAL ASSET BEHIND IT AND AS SUCH ISBASICALLY MACRO HEDGED, THAT AS A REAL ASSET, IT IS HEDGEDAGAINST INFLATION. CAROLINE: WHY DO YOU NEED IT TRADED ONBLOCKCHAIN? CORMAC: TO PROVE THE COMMODITY IS FAIRAND FUNGIBLE, WE NEED TO STORE THE PROFIT ON’S OF THE DATE OFTHE DIAMONDS IN A PUBLIC FORMAT. CAROLINE: WHAT IS INTERESTING IS THAT PEOPLE USUALLY USE DIAMONDS ASA COMMODITY BECAUSE THEY ARE NOT ALL EXACT, NOT EXACTLY THESAME AND IT IS HARD TO COMMODITIZE THEM, BUT YOU HAVEFOUND A WAY TO DO THAT. CORMAC: THAT IS EXACTLY RIGHT.WE HAVE BUILT THE WORLD’S FIRST FUNGIBLE DIAMOND COMMODITY.THIS IS WHAT IT Searches LIKE. THESE ARE DIAMOND STANDARDCOINS. AND THE BREAKTHROUGH IS THATEACH COIN CONTAINS A REGULATOR-APPROVED EQUIVALENTGROUPING OF DIAMONDS, WHICH MEANS THEY HAVE THE EXACT SAMEVALUE.AND THIS COMMODITY HAS BEENAPPROVED ALREADY TO ASSET-BACKED FUTURES ON THECME, FOR EXAMPLE, AND INSIDE EACH COIN IS A WIRELESSCOMPUTER CHIP THAT Storage A BLOCKCHAIN TOKEN.SO WHILE THIS COMMODITY SITS IN A VAULT, YOU AND I CAN TRADETHE TOKEN INSTANTLY, ELECTRONICALLY AND GLOBALLY.TIM: HOW HARD — CAROLINE: HOW HARDIS IT TO GET CHIPS AT THE MOMENT? CORMAC: WE HAVE HAD A HARD TIME GETTINGCHIPS, BUT WE HAVE Increased TENS OF THOUSANDS, SO WE HAVE ASUPPLY. AND DIAMONDS AREN’T SUBJECT TOTHE SAME SUPPLY CHAIN PROBLEMS AS CHIPS, FOR EXAMPLE, BECAUSEWE SHIP OUR DIAMONDS BY AIR.CAROLINE: OK, AIR CARGO.I AM INTERESTED IN WHEN YOU ARE LOOKING AT THE AMOUNT YOU AREGOINGING, — THE AMOUNT YOU ARE COINGING, ARE YOU MAKING ALIMITED SUPPLY? CORMAC: Diamonds ARE LIMITED COMMODITY. THE ABOVEGROUND VALUE IS. 2TRILLION, BUT DIAMONDS COULD Never BE USED BY INVESTORSBECAUSE YOU COULD NEVER MARK THEM TO MARKET.THEY WERE ALL DIFFERENT. WHAT WE SAW IS HOW TO MAKEDIAMONDS THE SAME THROUGH A REGULATOR-APPROVED FUNGIBLECOMMODITY AND NOW, WE Speculate THAT INVESTORS WILL FOR THEFIRST TIME BE ABLE TO ACQUIRE DIAMONDS AS A STORE OF WEALTH, A HEDGE OR A SPECULATIVE INVESTMENT, AND THAT DIAMONDSWILL CATCH UP WITH PALLADIUM, FOR EXAMPLE.AND INVESTORS OWN 50% OF ALL THE WORLD’S PALLADIUM.CAROLINE: IS THERE ANY Peril Diamonds GO DOWN IN VALUE? PEOPLE ARE NOW ABLE TO BUILD DIAMONDS TO A CERTAIN DEGREE.CORMAC: CERTAINLY. WE Exclusively USE NATURAL DIAMONDSAND IF YOU LOOK AT THE LAST 17 Times OF RETURNS, DIAMONDS HAVEBEEN FLAT BECAUSE THEY ARE AT AN EQUILIBRIUM.THE SUPPLY EQUALS THE DEMAND. WE ARE NOW INTRODUCINGTREMENDOUS NEW DEMAND FROM INSTITUTIONAL INVESTORS FORDIAMONDS. CAROLINE: HOW DO YOU MEASURE TREMENDOUS? CAN YOU TELL US ABOUT DEMAND? CORMAC: OUR CURRENT OFFERING IS 650 MILLION AND TOTAL PRODUCTION OFDIAMONDS PER YEAR IS 20 BILLION TO 30 BILLION, SAID THAT IS ASIGNIFICANT SLICE FOR FIRST YEAR FOR NEW COMMODITY.CAROLINE: I KNOW YOU ARE ANNOUNCING THISNOW, BUT HAVE INSTITUTIONAL INVESTORS BEEN WARM TO IT? CORMAC: ABSOLUTELY. WE A ALREADY HAVE THE PARTNERSFOR THE ETF WHICH WILL BE LAUNCHING ON THE NEW YORK STOCKEXCHANGE. CAROLINE: WHY DO AN ETF? CORMAC: TO Oblige IT ACCESSIBLE TO CONSUMERS.CONSUMERS MIGHT HELP WANT TO HOLD COMMODITIES AND PUTTING ITINTO AN ETF, WE MAKE IT MORE ACCESSIBLE.CAROLINE: WHERE? YOU HAVE ALSO GOT BIT CARBON ASTHIS RECTO STABLE GOING, I GUESS TECHNICALLY, THE ETF.WHAT IS YOUR HOPE? CORMAC: WE ENTERED AN AGREEMENT WITH AFIRM CALLED HORIZON KINETICS, A$ 7 BILLION OR SO HEDGE FUND.THEY OPERATE THE BEST-PERFORMING MUTUAL FUNDSTHIS YEAR ACCORDING TO MORNINGSTAR.AND WITH THEM, WE ARE Propelling A TRUST PRODUCT THAT WILL BELISTED ON THE OTC Grocery SYSTEM.AND THAT WILL BE THE FIRST TRUST, THE FIRST NOT QUITE ETF, BUT FOR ACCREDITED INVESTORS, A FUND THAT THEY CAN Endow INAND FOR THAT, WE HAVE $50 MILLION COMMITTED. CAROLINE: CORMAC KINNEY, DIAMOND STANDARDFOUNDER AND CEO, USED TO RUN MONEY FOR THE LIKES OFMILLENNIUM, Expressed appreciation for SO MUCH. WE TAKE YOU LIVE NEXT TOSTANFORD, AND HEAR FROM ONE OF THEIR FRAGILE ITS, THE FOUNDERAND CEO OF THE ONLINE MARKETPLACE MINTED.THIS IS BLOOMBERG. CAROL: WE ARE BACK ON “BLOOMBERGTECHNOLOGY, ” CAROL MASSAR WITH TIM STENOVECON LOCATION AT THE STANFORD GRADUATE SCHOOL OF BUSINESS.WE ARE GOING TO BRING IN AN ALUM WHO GOT HER MBA HERE IN1 998. MARIAM NAFICY IS THE FOUNDERAND CEO OF MINTED. WHAT IS IT LIKE TO BE BACK ONCAMPUS? MARIAM: IT IS A DELIGHT AND WALK DOWNMEMORY LANE. IN 1998, I WAS STARTING I FIRSTBUSINESS HERE ON CAMPUS. I WAS WORKING ON MY CLASSES ONTHE SIDE AND HAD A BUSINESS PLAN. MANY OF THE PEOPLE YOU SEEAROUND YOU ARE PROBABLY DOING THE SAME THING. CAROLINE: I WAS TALKING TO ONE OF THE CURRENT STUDENTS AND ASKED WHATSHE WAS DOING THIS SUMMER FOR AN INTERNSHIP AND SHE SAID I AMWORKING ON A BUSINESS ALREADY. CAROL: LET’S TALK ABOUT YOUR BUSINESS. YOU CONTINUE TO EXPAND.WHAT GUIDES YOU IN TERMS OF YOUR CHOICES? YOU HAVE GET DIGITAL ART, YOU HAVE GOT INVITATIONS, YOURWEDDING BUSINESS IS A BIG ONE.YOU ARE MOVING INTO FURNITURE, JUST DEBUTED A LINE THIS SUMMER WITH WEST ELM. WHAT GUIDES YOU? MARIAM: THE FUNDAMENTAL THREAD THROUGHALL THESE BUSINESSES IS THIS IDEA THAT GREAT TALENT CAN COMEFROM ANYWHERE, GREAT IDEAS CAN COME FROM ANYWHERE.WHAT WE ARE TRYING TO DO IS BRING GREAT INDEPENDENCE, UNIQUE ART AND DESIGN, TO PEOPLE EVERYWHERE AND EMPOWERARTISTS AROUND THE GLOBE TO PUT THEIR HAT IN THE RING AND BUILDBUSINESSES OFF OUR PLATFORM, REGARDLESS OF WHERE THEY WEREEDUCATED, WHERE THEY ARE FROM, WHETHER THEY HAVE CONNECTIONSTO GET INTO BUSINESS.THIS HELPS ANYONE BE PART OF AMARKETPLACE. TIM: WHAT ARE YOU FINDING IS THEBEST WAY TO COMMUNICATE WHAT YOU ARE DOING? I Picture A Pile OF PEOPLE KNOW MINTED FOR INVITATIONS.FULL DISCLOSURE, IT IS WHAT MY WIFE AND I USED FOR OUR WEDDINGAND I THINK PEOPLE KNOW IT FOR HOLIDAY CARDS, BUT HOW DO YOUCOMMIT TO GET YOU ARE DOING FURNITURE AS WELL? MARIAM: RIGHT QUESTION. WE ARE TARGETING NICHEAUDIENCES THROUGH MARTINIQUE MARKETING.WE ARE MARKETING TO DIFFERENT AUDIENCES.I THINK ALSO, YOU WILL SEE MORE BRENT-BUILDING CAMPAIGNS FROMUS AT THE HIGHER LEVELS THIS CHRISTMAS SEASON, WHERE WE AREFOCUSING ON THE ARTIST AS A COMMON THREAD THROUGH ALL THESEBUSINESSES, SO THAT PEOPLE UNDERSTAND IT IS REALLY ABOUTAN ARTISTS’ MARKETPLACE AND COMMUNITY THAT IS PARTICIPATINGACROSS TEXTILES, PAPER, FURNITURE, WALL ART, MANYDIFFERENT GOODS, BUT CENTERING IT AROUND THE ARTISTS’ STORYAND THEIR JOURNEY.YOU WILL SEE THAT SOON. Chant: YOU ARE GREAT ABOUT HIGHLIGHTING OTHER PEOPLE’SJOURNEYS, BUT WHAT ABOUT YOUR JOURNEY HERE? YOU DIDN’T GET ACCEPTED THE FIRST TIME, BUT CAME BACK THENEXT YEAR. HOW DID THAT HAPPEN? MARIAM: I Consider IT IS THIS IDEA OF BEING PERSISTENT ON FIGHTINGFOR WHAT YOUR DREAM IS. I HAD TO COME TO STANFORDKNOWING I WANTED TO BE AN ENTREPRENEUR.I CAME TO CALIFORNIA IN 1993 AFTER GRADUATING COLLEGE. I SPENT TIME IN INVESTMENTBANKING AND CONSULTING AND NEW I WANTED TO CARVE MY OWN PATH.I THOUGHT IF I HAD GONE THE CORPORATE ROUTE, I WASN’T SUREIF THAT WAS A GOOD FIT FOR ME, OR IF I WASN’T GIVEN ENOUGHRESPONSIBILITY THAT IN MY 26 -YEAR-OLD MIND THOUGHT IMAYBE DESERVED.I REALLY FELT — I AM ANIMMIGRANT TO THE U.S ., I FELT LIKE THIS IS REALLY A COUNTRYOF GREAT OPPORTUNITY AND THAT THE AMERICAN CONSUMER WOULD BETHE ULTIMATE JUDGE OF MARRIAGE, THAT THEY WOULDN’T REALLY CARENECESSARILY WHO AIDED THE PRODUCT.IF THEY LIKED THE PRODUCT, THEY WOULD BUY THE Product, SO I WASMOTIVATED AROUND ENTREPRENEURSHIP AS A WAY TOCREATE THE WORLD I WANTED TO LIVE IN AND THE PRODUCTS IWANTED TO SEE. TIM: YOU Suppose THAT IS STILL THECASE ABOUT THE AMERICAN CONSUMER? MARIAM: I DO THINK SO.WE HAVE A HUGE PETRI DISH OF CONSUMERS THAT CAN TEST YOURPRODUCT AND BUY YOUR PRODUCT AND THAT IS WHY WE ARE SO GOODAT PRODUCT DEVELOPMENT AND MARKETING, BECAUSE WE HAVE AGREAT PETRI DISH. THAT IS EXACTLY WHAT HAPPENED.THAT IS WHY I WANTED TO PURSUE HER ENTREPRENEURSHIP — PURSUEENTREPRENEURSHIP AND COME TO STANFORD. CAROL: WHAT IS THE ENDGAME? IT IS A BLOOMBERG QUESTION.IT HAS GOT TO BE NICE SEEING PRIVATE EQUITY INVESTORSINVOLVED, BUT IS THE ULTIMATE GOAL TO BE A PUBLIC COMPANY? HOW DO YOU THINK ABOUT IT, BECAUSE THERE ARE OPTIONS TODAY.IT USED TO BE THERE WAS A DIRECT PATH, YOU Territory PRIVATEFOR A LONG TIME TO GET THE PUBLIC MARKETS.IT DOESN’T HAVE TO BE THAT WAY.THERE’S CASH OUT THERE WITH THEINVESTOR SUPPORT TO KEEP IT IS THIS YEARS. MARIAM: WE ARE Ever TRY TO KEEP ALL OPTIONS OPEN, BUT IT IS ANINDEPENDENT COMPANY IN THE SENSE THAT OUR ARTISTS AREINDEPENDENT, TOO. PEOPLE CAN COME GOING I THINKCAPTURING THAT COMMUNITY INSIDE ANOTHER COMPANY WOULD BE FORCEDAND KIND OF STRANGE, PROBABLY. SO, I Repute OF OURSELVES ASINDEPENDENT BUSINESS WE ARE BUILDING AND WE CAN CONTINUEPRIVATE FINANCING OR GO PUBLIC.WE ARE JUST PREPARING FOR BOTHHAS, — BOTH PATHS. WE KEEP OURSELVES PREPARED FORBOTH. CAROLINE: YOU HAVEN’T — TIM: YOU HAVEN’TRAISED MONEY SINCE 2018, BUT YOU ARE CASH POSITIVE.WHAT CAN YOU SHARE WITH US? MARIAM: I CAN SHARE THAT WE HAVE 700 SEVERAL HUNDRED MILLION DOLLARSIN SALES. WE ARE CASH FLOW POSITIVE, AREGROWING RAPIDLY AND HAVE NOT EVEN GOTTEN TO TOP OURINTERNATIONAL Market IN TERMS OF CONSUMER MARKETING AND SALES.SO COME I THINK THERE IS A Bunch OF ROOM TO GROW. TIM: IS THAT Percentage OF IT — CAROL: IS THAT Duty OF IT COMEINTERNATIONAL GROWTH? MARIAM: YEAH, OUR COMMUNITY IS IN 100 COUNTRIES. OUR 100 TH COUNTRY WAS KENYA.WE ARE REACHING EVERY PART OF THE GLOBE IN TERMS OF SOURCING.SO IT MAKES SENSE IF WE ARE SOURCING ALL THESE DIFFERENTSIGNS AND AS THE NEXT COME AWAY NOT PROVIDE THOSE PRODUCTS TOPEOPLE LOCALLY AS WELL? IT Manufactures A Batch OF SENSE.YOU COULD SHOP IN SWEDEN OR FRANCE AND HAVE A COMPLETELYDIFFERENT LOOK TO THE SERVICE. CAROLINE: TELE SITE — TIM: TELL US HOW YOU MADE IT THROUGH THEPANDEMIC WHEN THE WEDDING SEASON DRIED UP? MARIAM: THIS IS THE TYPE OF THING WHEREI THINK STANDARD AND GETTING A GREAT EDUCATION ON FRAMEWORKSAND HOW TO LEARN MORE WEEKLY, I Speculate STANFORD AND THE GSPTEACH YOU HOW TO LEARN.YOU LEARN HOW TO LEARN, AND YOULEARN HOW TO LEARN REALLY QUICKLY.THE PANDEMIC WAS A GREAT EXAMPLE WHERE THINGS WERECHANGING BY THE DAY AND YOU HAD TO REFORMULATE YOUR STRATEGIES, YOUR EMPLOYEE BASE, YOUR COMMERCIAL ACTIVITIES, BY THEDAY, AND WHAT PREPARES YOU FOR THAT? I WOULD SAY WE DID HAVE TOQUICKLY CUT THE EXPENDITURES, WE ENDED UP CASH-FLOW POSITIVEANYWAY FOR THE YEAR, AND WE DID FOCUS ON DIFFERENT ROD OKTALINES WITHOUT PEOPLE WOULD FIND POPULAR AT HOME, THAT HAS BEENBOOMING. TIM: Weddings — CAROL: WEDDINGS AREBACK? MARIAM: Marries ARE BACK. CAROL: THANK YOU, GOOD LUCK, MARIAMNAFICY, COFOUNDER — FOUNDER AND CODE CEO OF MINTED.CAROLINE: RETAIL SALES INCREASED INSEPTEMBER. CORONAVIRUS INFECTIONS ROSE INAUGUST AND SEPTEMBER, CURBING DEMAND ON TRAVEL ANDENTERTAINMENT. IT WAS THE WORST SEPTEMBER FORAUTO SALES IN EUROPE SINCE 1990 FIVE.NEW Gondola Registrations Immersed WHEN HE 5% TO LESS THAN 973,000. THAT PUT THE INDUSTRY ON TACK — CONTRACT — PUT THE INDUSTRYON TRACK TO DO EVEN WORSE THAN LAST YEAR’S DISASTROUS SHOWING.COMING UP, Schedules TO EXPAND MOBILE Work TO PEOPLE INTOEMERGING MARKETS.IN SPECIAL COVERAGE OF THEMILKEN GLOBAL CONFERENCE IN AND LAY NEXT WEEK, — IN L.A.NEXT WEEK, KICKING OFF MONDAY. WE WILL ALSO SPEAK TO DANMARKLEY, THE CEO. YOU DON’T Require TO MISS IT.THIS IS BLOOMBERG. CAROLINE: LET’S Inspection AT A LARGE NUMBER –3 BILLION, THE NUMBER OF PEOPLE AROUND THE WORLD WHO AREFINANCIALLY UNDERSERVED. ONE Company HOPING TO ALLEVIATE THIS AND BRIDGE THE DIVIDE IS AFINTECH PLATFORM AIMED AT MAKING FINANCIAL SERVICES MOREACCESSIBLE AND EMERGING Business UNJUST RAISED 45 MILLION.EARLIER, I Came TO MEET WITH THE FOUNDER AND CEO.THEY MET WITH MY COLLEAGUES.TAKE A LISTEN. >> THIS NEW FUNDING ROUND FORUS GIVES US MUSCLE TO REALLY BE ABLE TO ACCELERATE IN TERMS OFDELIVERING REAL VALUE TO OUR CUSTOMERS. WHAT WE HAVE INTERNALLY ISABOUT ENABLING FINANCIAL AGENCIES FOR$ 3 BILLION — 3BILLION PEOPLE GLOBALLY WHO ARE UNDERSERVED.WE ARE LOOKING TO ENSURE CUSTOMERS CAN SAVE, PROTECTTHEIR MONEY, GROW THEIR MONEY AND USE THEIR MONEY. >> CAN YOU TALK ABOUT HOW YOUENSURE THAT? PART OF WHAT GOES INTO THAT ISDATA YOU COLLECT.HOW ARE YOU ENSURING THESECONSUMERS ARE CREDITWORTHY AND NOT TAKING UP MORE CREDIT THANTHEY NEED TO BE? >> WE ARE Ever VERYRESPONSIBLE. WE TRY TO ENSURE WE AREFOCUSING ON HEALTHY BORROWING. SO, WE ARE ALWAYS THINKINGABOUT THE INDIVIDUAL’S FINANCES, THEIR CAPACITY ANDTHEIR LIKELIHOOD TO REPAY. THE FACTORS WE ARE RUNNINGALLOW US TO UNDERSTAND THEIR CONSISTENCY, THEIR EMPLOYMENTHISTORY, AND THERE RATES HISTORICALLY WITH US.WE WANT TO UNDERSTAND HOW THE INDIVIDUAL IS USING CREDIT INTHEIR FINANCIAL LIFE. WE ARE FOCUSING ON GOING YONDERCREDIT AND FOCUSING ON THE MARRIAGE BETWEEN SAVINGS ANDPAYMENTS. >> EXPAND ON THAT IDEA FOR US.WHEN YOU TALK ABOUT MARRYING THE SAVINGS ASPECTS AND OTHERASPECTS OF FINANCE, WHAT I Sounds IS A BANK.IS THIS DIFFERENT BANK? DO YOU PROVIDE SOMETHING TOTHESE FOLKS THAT IS NOT ONLY DIFFERENTIATED IN TERMS OF WHATTHEY ARE ABLE TO GET OUT OF IT, BUT Too WITH Regards TOREGULATORY AND CROSS-BORDER ISSUES? >> THE WAY WE ARE THINKINGABOUT THIS IS, IT IS MORE THAT WE ARE PARTNERING WITH EXISTINGFINANCIAL INSTITUTIONS. WHAT TALA HAS BEEN ABLE TO DOFOR OVER 60 YEARS IS BUILD OUT A GLOBAL PLATFORM SO WE CANDELIVER CUSTOMIZED FINANCIAL PRODUCTS TO MEET THE NEEDS OFTHE UNDERSERVED.IN THAT SENSE, OUR EXPERTISE ISUNDERSTANDING THE FINANCIAL LIVES OF THESE CUSTOMERS, TAKING THOSE INSIGHTS AND THEN BUILDING THAT INTO OURPLATFORM, SO THINKING ABOUT HOW WE VERIFY IDENTITIES.MOCHE EMERGING MARKETS DON’T HAVE NATIONAL I.D.SYSTEMS, SO FINANCIAL INSTITUTIONS CAN’T SERVE THEM.WE ARE THINKING ABOUT HOW WE ACTUALLY DELIVER THE CREDIT FORA DECK’S TO THEM — DELIVER THE CREDIT PRODUCTS TO THEM, SO WEHAVE INTEGRATED MULTIPLE PAYMENT LIGHT-YEARS.WE FOCUS ON TECHNOLOGY AND PRODUCT EXPERIENCE ON OUR SIDECOMMAND THE CUSTOMER KNOWLEDGE, AND WE PARTNER WITH OTHERS FORTHE REGULATORY AND LICENSING SIDE. CAROLINE: HOW HAVE YOU GOTTEN INTO ALL OF THIS YOURSELF? 6 BILLION Customers OVER SIXYEARS, WHAT MADE YOU SEE THAT KENYA AND TONS INDIA WERE BEINGUNDERSERVED — KENYA AND TANZANIA WERE BEING UNDERSERVED? SHIVANI: I BECAME OBSESSED WITH THE IDEATHAT THERE ARE BILLIONS OF INDIVIDUALS THAT ARE UNABLE TOACCESS THE FORMAL FINANCIAL SYSTEM, AND THAT THERE ISPURCHASING POWER THAT IS CURRENTLY LOCKED UP.SO, THAT POTENTIAL ISN’T BEING SEEN BY THE MARKETPLACE. ON MY SIDE, I SAW THAT WHEN IHAD THE OPPORTUNITY TO WORK AT THE YUAN POPULATION FUND.I WORKED ACROSS NINE COUNTRIES ACROSS WEST AFRICA, SUB-SAHARANAFRICA AND INDIA AND GOT TO UNDERSTAND AT THE MICRO LEVELWHAT ARE THE FINANCIAL DECISIONS THAT INDIVIDUALS MAKEAROUND THEIR MONEY, TO THINK ABOUT HARD MONEY VERSUS SOFTMONEY, HOW DO THEY THINK ABOUT WHAT GOES INTO WORKING CAPITALAND WHICH BILLS TO PRIORITIZE? AND BY SEEING ALL THOSE MICRODECISIONS, I COULD View THERE WAS DAILY LIFE DATA WE COULDACTUALLY USE TO BRING INTO OUR UNDERWRITING MODELS.IT WAS I HYPOTHESIS AT THE TIME, BUT A Risk I FELTNEEDED TO BE TAKEN — IT WAS A HYPOTHESIS AT THE TIME, BUT ACHANCE I FELT NEEDED TO BE TAKEN TO DEVELOP THIS ON AGLOBAL SCALE.AND WE HAVE REALLY PROVEN OURCREDIT MODELS CAN WORK GLOBALLY. CAROLINE: THE TALA FOUNDER AND CEO. THAT DOES IT FOR THIS Volume.

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