Bloomberg Businessweek Weekend - January 20th, 2023

market reset this week. With that in mind, this hour, we've got a bit of a theme on how the investing world and financial markets are changing. You might even call it a quote see change. More on that from oak Tree Capitals. Howard marks in a moment because that's what he says it's going on exactly. Also, the ever evolving narrative over how we work. We get into that with Aaron Levy. He's co founder and CEO at the online storage and document management software company Box and Well.

Boxes largely weathered the storm that's battered the tech sector over the last year, so some of its peers have not been as fortunate. This week's issue of the magazine digs into the spade of layoffs it firms like Amazon, Microsoft, and Meta, and then on Friday, Google parent Alphabet said it will cut about twelve thousand jobs. That's more than

six percent of its global workforce. And our cover story this week, It's All about a massive fake meat flop, will find out why the initial craze over plant based meat makers such as Impossible Foods and Beyond Meat has officially fizzled out. Oh of that to come. We begin with a voice familiar to the investment community, Howard Marks, the co founder and co chairman of oak Tree Capital Management,

known for his investing in distress securities. The firm has a hundred and sixty three billion dollars in assets under management. He joined us in studio this past week to break down a recent research note that he published about what he calls a sea change in the world of investing. The point is that a sea change is something more fundamental than a minor cyclical fluctuation. It suggests a total

transformation that will be somewhat long lasting. The point of the mo was that ever since the global financial crisis, the FED put in emergency measures to rescue the economy and the markets uh and they worked, but they were continued for a long time. Zero rates were the rule for seven years, which I was stunned to find out when I researched it. And uh, that conditioned the markets

to depend on ultra low rates, which was unrealistic. And then when they tried in sixteen seventeen eighteen to raise rates, they got a lot of pushback. The fourth quarter of eighteen, you may recall, they took the Fed funds rate hit three and a quarter and the fourth quarter of eighteen was the worst fourth quarter in history as a consequence, So they were in a low return trap, and lenders

likewise were in a low return trap. You know. I I gave a speech for eight years entitled investing in a low return World, and and it wasn't fun the because how do you get a good return in a low return world. You either accept the low returns or you take on more risk to try to get a high return, and that may not be a great idea either. So there is no easy out. And and we labored in the in the wilderness for a decade with low yields prevalent, and I think that that's not going to

be the case to the same degree going forward. It's not just you know, low yields not being prevalent as being part of this sea change. What else do you see, which, by the way, you argue, this is only the third sea change you've seen in your career. Yes, well, And in the seventies I saw the adoption of risk return thinking. You know, before that a professional money manager or fiduciary the rules where this is okay to do, this is

not okay to do. But with the advent of high yel bond issuance in the late seventies, people started to think, well, it may be risky, but I'm well paid to do it, so I'm gonna do it. It makes sense, And that has become the rule and been the rule ever since. And I think that was a very good change. Most of the things that we see in the financial world

today are the result of that calculus. Then in the early eighties, of course, to fight the inflation that was prevalent in the US reaching mid teens, UH Vulker took the FED funds rate to twenty and that, you know, eventually killed off inflation and inflationary expectations. It kind of killed the economy, uh in the process. But then you know, I had a rate loan outstanding from a bank in eighty and I got a slip saying the rate is now two and a quarter. Forty years later, I was

able to borrow money at two and a quarter. So we had a two thousand basis point decline and interest rates. And that was a major event. That was probably the biggest single financial event of the last half century. But nobody talks about it. How when do you want to ask you? And it's in your research note. You know you talk about when you see both rising asset values as well as a very low rate environment and what that does in terms of leverage, tell us how that

maybe creates Ultimately, I'm assuming opportunities for you. Look, the government doesn't make anything. It doesn't add to GDP, it doesn't create anything. Oh it does is takes money in and puts money out, and it policy benefits some and hurts others. So the policies of the last fourteen years that I'm talking about benefited asset owners and borrowers and penalized lenders and savers. But it was a boon for

anybody who owned assets and for anybody who borrowed. And what about people who did both, who owned assets on borrowed money, a double bonanza. The problem is that a the success of that depends somewhat on the persistence of that environment. And number two, environments that produced high profits usually encourage people to push the limits further and to go out and do riskier things because of the absence

of of a risk aversion which you really ends up badly. Uh. So, you know, we've gone through an easy period for the last fourteen years. Be different now, and I believe that the coming period will be a harder period, not a cataclysm, not a depression. But you know, I think that people don't recognize that the last fourteen years have been unusually easy. So it opens up the question about where specifically you

would see opportunities for distress, debt and beyond. Sure. Well, uh, first of all, I think we might see something and that would be a change. You know, in the in the very benevolent environment that we had over that period, it was very hard to default. It was very hard to go bankrupt. In fact, you had to have something seriously wrong to do that, because most companies that just burned money every quarter could borrow more. We just talked

about the biotech sector that it's for them. Yes, so so, but when when risk aversion rears its head and you go in to get more, now, somebody might say, you know what, you're just burning money. We're not going to give anymore. So we're and I think it was November you talked with our team and you said, great bargains coming as recession looms. So we're specifically, I know we've been you know, is it energy, is it real estate? Is it where is it? Well? You know, uh, I'd

never get down to that granular level. And uh, we our activities are kind of not planned. Uh, and we're opportunistic. When something pops up and we and and and some company has to roll over its debt and suddenly is unable, you know, we mobilize. So you know the point is we're not we're not laying plans in advance. Well, do we do we take something like Elon Musk and all the debt he took on for Twitter? Do we take a bed bath? And beyond another retailer falling to the wayside.

I'm trying to think party City, Party City. Um, I feel like you could name any crypto firm over the last site. These these signs that are playing to what you're talking. Well, let me let me just say, without getting too specific, which I always try to avoid, that's okay. Um, that our our mantra is good company, bad balance sheet. A company a good company that has gotten over levered and that leverage level has turned out to be excessive for the environment that has unfolded. Uh, you can fix

that by delivering the company. Maybe you take it through a bankruptcy in which you reject a lot of debt. But it's easy too. If you can delever a good company, it goes on to success or, or certainly it's it's reinstated. Uh. Bad companies are hard to fix as opposed to a good company with bad balance sheet. So you you you propose the list, you figure out which companies on that list you know are are important to stay in business

for the next ten years. You mentioned a couple of retailers, Carol, which makes me question if you're any industries or sectors you would avoid historically. Um, we're okay with retail, although one has to be cognizant of the changing business model. Uh. You know, we're we're mostly active in what I would call the basic industries, the traditional industries. Uh, the ones with assets like energy, like like energy, yes, manufacturing, distribution, transportation, Uh,

even retail under the right circumstances. Uh. You know where we historically have not been active has been, for example, technology, because there you need a higher level of expertise with regard to the subject matter. UM, intellectual property, style, fashion, things like that. UM, this environment, this see change, we only have about thirty seconds left. How long does it stay with us in your view? Because as you say, these don't happen a lot, but they do stick. Well.

You know, I don't make forecasts, and I don't believe forecasts, especially my own. Having said that, you know, I'm not talking about uh, six months or a year, and I don't ever venture a thought to ten years. So I would say something in between. But I mean, this is material, and I would say a few or several years. Well, And I do feel like it mirrors some of the conversations we've had that this low rate environment of a generation who has never seen anything. But could we see

a fourth sea change in your career? I hope I live long enough. That was Howard Marks. He's the co founder and co chairman of oak Tree Capital Management. Coming up next to Silicon Valley executives, as his company can serve users in any environment, regardless of whether workers ever returned to their offices. In all cases, you're going to

be creating more digital content than ever before. And there's an explosion of video content, there's an explosion of written content as a result of companies getting more distributed, more collaborative, working in new ways. So in our case, these all point to long term tail ones because of just the massive digitization of our business processes and the way that we work. Box CEO Aaron Levy talks cloud technology, the outlook for the U S economy, and what he thinks

of Elon Musk at the Helm of Twitter. You're listening to Bloomberg Business Week. This is Bloomberg. Please sees Bloomberg Business Week with Carol Messer and Tim Stinebeck from Bloomberg Radio. Well, it's been a while. In fact, the last time we talked with our next guest about his company, the world was in the thick of the pandemic we're talking about back in August of It's a very different environment today,

and yet Tim one still with a ton of concerns. Yeah, we're talking about Box, the company develops internet application software and manages all types of multimedia content in the cloud. It was also a tech sector outlier in two shares of the nearly four point four billion dollar market cap. Company gained about nineteen percent last year. Yeah, I was kind of shocked when I checked out. I thought it was like a typo, a very different environment for that name. Certainly. Well,

Aaron Levy is co founder and CEO at Box. We began by asking him about how his world has changed over the last two and a half years and what it all means for his company going forward. It's actually interesting reflecting on being in New York versus the Bay Area. I do think that, you know, it's a little bit of a tale of two cities in terms of actually, you know, kind of how much is back in both environments.

We're back here more maybe by about in order of magnitude. Yeah, So it's it's definitely different environments, but we are seeing this across our customer base of companies coming back, returning to offices sort of, you know, establishing new work patterns, um And it's it's definitely going to be different than pre pandemic, but it's certainly equally going to be more different than during the peak of the pandemic as well. What makes you say that just just walking down the street,

seeing the subways, what's going on. Every office building I've been in this week has been, you know, fairly packed and uh and maybe a little bit more muted than pre pandemic. But if you compare that to you know, sort of the Bay Area in California, it's it's definitely still pretty different. Okay. What's interesting about this though, is that we heard this week that Bob Iger and this is not a Silicon Valley company by any means, but he wants people to come back to Disney four days

a week. And Caroline, I've talked about this quite a bit that you know, as the economy weekends and the work is not in as much control, we could start to see more and more people coming back. What are you seeing with with your data at box in terms of where people are accessing the product? Are they increasingly accessing it at home permanently? Do you think? Yeah? I

think absolutely down from the pandemic peak. In terms of work from home, I do think companies are sort of all trying to figure out what are their rituals in terms of how people work and where they work from. You know, Bob Iger at Disney, you know Tim Cook at Apple, what we just saw from Howard Schultz at at at Starbucks, you know, pushing you know, some of

these sort of three or four date policies. I think, um, you know, is sort of just now the tip of the iceberg of what might you know come next across fortunate hundred companies and and uh and more generally. But I do think, no matter what, some version of hybrid work, some version of more distributed work, some version of more

flexibility is here to stay. Um. And what that all is going to point to is the need for digital technologies and cloud to be able to actually mediate how people work from any device or any location that they're working from. So we kind of are sort of fine with any outcome, whether everything's fully removed or partially back to the office or fully back to the It doesn't matter for you what the mixes does it in terms

of your business growth. Now, in all cases, you're going to be creating more digital content than ever before, and there's an explosion of video content, there's an explosion of written content. As a result of companies getting more distributed, more collaborative, working in new ways. So in our case, these all point to long term tail ones because of just the massive digitization of our business processes and the

way that we work. And you talk big broad and we do too, but remind our audience exactly like get down to the nitty gritty what you do for a company. So Box works with over a hundred thousand companies, uh and we have a platform that helps them securely manage their most important data, so their contracts, their financial documents, their presentations, their media content. We help you store it, share its secure it collaborate on that data from any

advice anywhere. So it's a cloud platform that the powers how you work with your information. Bulks still small, mid, large, all size organizations. The majority of the revenue comes from large enterprises, so um so we tend to sort of be waited toward you know, the fortunate five hundred type organizations, but we support businesses of all sizes with with over

a hundred thousand customers. Based on what you're seeing, sorry, I'm about I'll let you and based on what you're seeing recession, no recession globally U S what are you seeing? You know? I think you know these guys have to order, they have to work with you, they've got to say, hey, this is what we're thinking. I mean, I'm the last person that should decide the definition of a recession, but

I ask no trend. Yeah, I think there's there's clearly a muting of um, you know, some degree of a muted kind of aspect of just share kind of corporate growth that that does tie into I t spend. Fortunately, we're in a position where we can help customers save money and drive up productivity and improve their security. So because we do see when people like I was just looking at lending trade, they cut workers in the stock like initially you know, went higher. So I do understand

this idea of technology helping a company. Yeah, so technology will help companies get more efficient. Um, but we obviously want there to be a very robust, you know environment for for companies to grow. And I think there is a muting a little bit of the consumer economy, certainly in some of the consumer tech companies. You know, advertising

dollars are are lessening a little bit. But our job is just to help companies no matter where they are, and that continuum to get more efficient, be more productive, stay more secure. Okay, something weird is happening because you know, most software stocks, most software stocks just got crushed. Okay last year, you guys are up ninety you're in fact close to record highs right now. How this is a high interest rate environment? What's going to really rough environment?

I think connected with the cloud. Yeah, it is. It is a rough environment, particularly if you are a high growth company, UM, where your stock was largely bolstered by your growth rate and UM, and that with with kind of higher interest rates. UM. You know, the valuation of those companies have come down naturally. UM. You know, it's an interesting, you know, almost bitter suite dynamics. So we never really had an inflated valuation, so that meant there

was sort of less less room to come down. At the same time, we've been working pretty um, you know, significantly on improving our profit margin in the past three years. So how do you do that? Just just hyper focus on efficiency across the business. UM. Actually not not really about cutting, but but you can kind of grow into um your your head count in a lot of cases largely by just remaining extremely focused on the areas that

are working in the business. So doubling down in sort of the products that are are generating the greatest returns as opposed to diluting your bets, um, doubling down in the regions that are most productive, and so our case by region, I mean, you know where the most sort of you know, the largest I T spending markets and and not deluding our focus from a regional standpoint, um, getting really really focused on gross margin and the efficiency

of our platform. So starting about three years ago, we kind of had a bunch of work streams across the business to get more efficient. And you know, fast forward to today that's actually in vogue, but it wasn't at the time, and so we never got that inflate evaluation. But as valuations came down, I think across the sector, ours by comparison was was holding up, you know, pretty nicely.

You know, I want to ask you about something because this week, are we see was that with some research they anticipate there will will be kind of two has for US software stocks, and they talked about kind of overall what they see, but they did cut Box to underperform. They cut the price target to four from they're concerned about the sustainability of your turnaround, particularly of Japan growth slows your stock was down about six percent on that call.

Can you address it? And they did also talk a lot about the Japanese market, which has been good for you. Yeah, so we we've seen tremendous growth in Japan. Um, we kind of got you know, sort of the right place, right time, and at the beginning of a kind of a SASS or cloud supercycle about you know, nearly ten

years ago. So we had all the right partners, We had a great team on the ground, and we rode this wave of large companies adopting SASS and so that that's actually been a very strong tail into our business. Almost by definition, as that business get larger, the growth rate will come down. So so that you know, was in this sort of note, Um, it's actually something that we already anticipate and it's sort of built into our

general model. UM. But but overall, you know, we we we we obviously care about the health of the global business even if the Japan growth rate comes down. UM, our job is to make sure that we manage that at a global level. Before we let you go. We got forty seconds your pointe on Twitter two point four million followers. Obviously you've been following with what are your thoughts on on what Elon Musk has done to the platform?

So I'm I'm always a fan of kind of moving fast, innovating quickly, and so some of the some of the changes have been, you know, exciting to see some changes maybe I don't agree with as much. In general, I think that the platform should say, very very focused on getting to a global population of consumers. I think maybe less focus on the paid subscription product, more focused on

more features at the free level. Still useful to you, Yeah, absolutely, I mean I just as useful as it was indispensable. That was Aaron Levy, the co founder and CEO at Box. Still ahead on Bloomberg Business Week, Where has all the money gone for biotech startups? Our team breaks down the sudden dearth of new investments in a space we rely on for new innovations, particularly ones that can benefit our health,

whether they're public companies are private. People are focusing on only the most important z is or the drugs that have the biggest probability of success, And of course that means that those other diseases, those other patients who are waiting for medicines for their diseases are going to have to wait Plus we'll look at the growing wave of job cuts taking place across tech firms in Silicon Valley

and beyond, and where displaced workers might turn next. This is Bloomberg Broadcasting from the financial capital of the world Bloomberg eleven Frio in New York to Washington, d C. Bloomberg to Boston, Bloomberg one O six one does San Francisco, Bloomberg nine sixty to the country Sirius XM Channel one nine team, and around the globe the Bloomberg Business and Bloomberg Radio dot Com. This is Bloomberg Business Week with

Carol Messer and Tim Stinove from Bloomberg Radio. What we said this hour was all about how things are changing. One area definitely seeing that biotech, which for a long time was the hot investment as venture capital firms and really investors generally poured tons of money into startups in the industry. It's a different story today, though, as VC investments are on track for the sharpest drop in more than two decades, surpassing the declines of the dot com

crash and the financial crisis. Now biotech firms on the hunt for new money. This story in the Business section of this week's issue. We get more from Business Week editor Joe Weber and Bluemberg News healthcare reporter Angelica Peebles, who got some key intel at the annual JP Morgan Healthcare Conference earlier this month. So it's interesting because I speak to a lot of specialist vcs and they say that nothing has changed fundamentally. Um, there's still a lot

of great companies. There's a lot of great science out there, and that actually we kind of needed a reset because there were so many companies that we're getting started and easily finding money, and that it led to sort of this overheated market where anyone could fund a company based on a dream rather than data. So they're not really upset to see this. Of course, if you're a company, UM that can't find money, that's a bigger problem for you.

And there's always the risk that even the good companies won't be able to fundraise in this environment. So I like the idea that you know, this is there's a silver lining to this, that there's an opportunity here. I'm wondering if you got the sense from some of these folks you talked to out at the JP Morgan conference in San Francisco that this is part of a normal economic cycle or or if this downturn is any different. Yeah, that's what a lot of people say, especially the VCS.

They've been through these cycles before. It typically happens where there's a boom and a bust and it's nothing new. However, there are some differences this time around. There's this big new law, the Inflation Reduction Reduction Act, that could cap drug prices in a few years, and people are wondering what exactly that will mean. Um, we're already hearing from some pharma companies that they are looking at potentially less lucrative evaluations for companies that they might invest in, partner

with more eventually acquire. So that's an unknown. And also were coming out this period where evaluations were so hot, and you know, how will companies go moving forward. One person I talked to describe it as this sugar rush and now that sugar rush is over and and never really a new playbook. Yeah, that's definitely not a good thing. Maybe there maybe there needs to be some sort of

like pharmaceutical to prevent desire for sugar. I don't know, Angelica, I do wonder though, you know, a lot of money. Sometimes it gets used recklessly when there's what it's really kind of loose and money is cheap. But at the same time, it also provides open opportunities I feel like for developments that really can change the way we're treated,

whether it's healthcare or modalities. And I do wonder if the money isn't so easy, does it mean biotech really has to think hard about what they're going to work on, and maybe that's not great for innovation. Definitely, we saw this boom of platform companies as they like to call themselves, so companies that were working on many different diseases or um all kinds of areas as opposed to just one drug for one disease, and that was sort of the hot beam of one And this year already we're seeing

the theame is prioritized. So one company at Aitas, they're based here in Boston, in the Boston area, and they said that they would stop the work that they've been doing on eye diseases and instead focus on blood disorders.

And they're seeing that across the board, whether their public companies are private, people are focusing on only the most important diseases or the drugs that have the biggest probability of success, and of course that means that those other diseases, those other patients who are waiting for medicines for their diseases are going to have to wait. Okay, so things

not good here? How uh, what do they look like in the UK compared to here or anywhere else, just to get a sense of what, you know, what the industry feels like around the world. Across the board, we saw funding dip this year or compared to one UM so it's not only the US, but of course the US and a lot of the companies I cover are focused here, and so that's why particularly we're focused on

and what's happening in this this part of the world. Okay, so Angelica, if you know, the dominant theme over the last few years has been vaccines. What's what's kind of the most exciting thing to come out of or that biotech companies are thinking about right now. There's a lot of exciting stuff out there. So it's hard to pick exactly UM specific areas, but some of the ones that we have been talking to a lot of people about our obesity people are really really focused on that. I mean,

you think about how many people are out there. UM that could be a have a huge impact on public health, and of course could be a very lucrative area for drugmakers. So we've heard a lot of companies focused on obesity at the conference this year, UM, an area that I'm really interested in, as well as gene therapy, so taking genetic diseases and actually potentially curing them UM by making permanent changes to someone's DNA. It sounds a little bit

like science fiction, but it's actually reality UM. And then we're also seeing a lot of new technologies and cancer UM. So we spoke to one company, Siegeon, that's been at the forefront um of a type of cancer drug called an a d C and UM we spoke to their new CEO who said that they're going to keep working on that and they're also looking for lots of new technology.

So it's it's a busy time out there. I actually think that the sector as a whole is again just like you know, one little big hit away from like everybody feeling like, you know, it's great, let's go back in and and you know, the big difference here versus like tech is it's so solution story, like all these things are people things that affect millions of people. Right, It's just ends up being a little bit of a crapshoot in terms of, um, what the r o I

can look like. That was Bloomberg News healthcare reporter Angelica People's and the editor of the magazine, Jill Webber. Joel mentioned big tech there at the end. That's actor seeing hiring spreees replaced by firing rounds from the likes of Microsoft, which this week began slashing ten thousand jobs, or about five percent of its workforce, and then Google parent Alphabet followed suit on Friday, announcing it's set to cut twelve thousand workers, a six percent reduction, and staff also cutting

jobs Amazon Meta salesforce and more. Writing about the trend in the Tech section this week, Bloomberg News technology reporter Austin car it's really been this fascinating about phase in Silicon Valley Parland's pivot from high growth, big risk to suddenly, hey in three we're going to preach more conservative ambitions for our roadmap, and that's a different narrative, right, Um, it does feel like it's a much more traditional narrative coming from these big tech companies akin to what we

would normally hear from kind of the rest of corporate America. Yeah, I mean, it's it's it's really interesting even just to see how the layoffs compared to the rest of the economy. In two, we saw layoffs for most industries pretty low, you know, thirteen an increase of from the previous year, whereas in the sector it was actually an increase of

six percent in two compared to the previous year. So they just went on this massive hiring binge and then suddenly are saying, you know what, we made some big mistakes. We uh. Mark Zuckerberg when he wrote his note to employees November describing this sort of trend, he said, you know, I just got the I got the prediction wrong. All this accelerated revenue I thought would be the new normal,

and it's actually not the case. So the question now, Carol, is just how much Wallstering is going to buy this new sound sort of financial prudent and so tech signaling to the market. It can be prudent to um, I'm not sure if that's going to sort of win over Wall Street for for many years ahead. And that's why I think you see companies trying to balance that where you know, for example, Microsoft saying they're going to you know, double down on their core businesses, but they're still going

to invest in AI or meta platforms. Mark Zuckerberg saying, Hey, you know, we're going to focus reprioritize our ads business from social media, but we're not giving up on the metaverse. So they're really trying to walk this five line between sort of being risky and also conservative for the next year. What are workers looking for maybe post pandemic in the tech industry. I love some of the data that you guys have UM when it comes to what are workers

looking for? Is it cash? Is it perks? What is it? Yeah, I think they're looking for stability, much like what some of the tech companies are are sort of pushing for. UM that we have some new survey data from UH, the anonymous social network for professionals that's popular and Silicon Valley. It's called blind UM, and they said that of those surveyed prefer more cash and less stock based compensation because of the economic climate right now. UM. They're also looking

for more sort of traditional companies. At the beginning of a lot of the companies that were searched for on this network we're sort of pre I p O startups such as Bolt or instat Cart or sort of bigger names like Nvidia. But more recently they've seen their search trends trend toward financial services firms like Capital One or Citadel, So it does look like one of the trends could

be happening. Uh, they're still going to be interest in hunger to hire these engineers, but maybe they're looking beyond Silicon Valley to other sectors which have really been hunting for this talent for many years but had struggled to acquire it. That's Bloomberg News Technology reporter Austin Carr. Coming up next, we'll hear from Cisco Systems chief strategy officer also executive EP Liz and Tony on the macro environment going forward and the growing importance of AI. You're listening

to Bloomberg Business Week. This is Bloomberg. You're listening to Bloomberg Business Week with Carol Messer and Tim Stinovic from Bloomberg Radio. I gonna say we've been looking forward to catching up with this next guest, having talked with several key members of the Cisco team, including CEO Check Robbins. Also Franca Sudis, Chief Cisco Executive ep IN, Chief Policy and Purpose Officer, and a few more. Listen. Tony has spent some twenty years with the firm in engineering and

cloud computing, IoT and more. The executive vice president and Chief Strategy Officer at Cisco join us to shed some light on how the networking giant is planning for three and beyond. You just have to move. You can stand still, but you need to be able to also figure out

how do you separate the trends from the hype. How do you focus on potential and monetization opportunities and metrics and make a strategic investment and not just look at the new shiny object that's out there, you know, look at the trends that really matter to your business, to your employees, to your shareholders. The other one that I see, and and here it being talked more often, is around

how AI assisted is really becoming mainstream right. It's it's like what cloud was in maybe in like the two thousand eight, two thousand nine, two thousand ten time frame. If you think about AI gives you a starting point on everything from everything creative that you do, from from documents that we can build two presentations to art, to code processes, etcetera. So that's something that you know, I

see a lot of focus on. And then the third one, which is near endeared to my heart, especially from running the applications business out here as well, is the view that is not just the buying centers. You've got to pay close attention to users because users are defining buying behaviors and that will not just influence, but it will define how things are bought as well. Caroline, I spending a lot of time this week talking about chat GPT and Microsoft's investment in chat gpt. Is AI a shiny object?

Is chat GPT a shiny object? You know? I would say, is AI is definitely not a shiny object, right? I mean, AI is used in so many ways that we don't even know in our daily lives, in our portfolio here, AI is used extensively in collaboration and security in applications.

But I think you know, when you think about um everything that you call generative AI, of which chat GPT and open AI is one part of it, I think got a look at you know, what's the potential use cases, what's the monetization opportunity and metrics, And there's a third part of it that we're looking at is around how do you go in with AI? Looking at it more from an ethical and responsible AI standpoint as well, And those are the things that we want to learn more.

But also you know, as we look at our developpers that the idea of you responsibly use AI is something that we're training our teams on. How you collect the data, how you store the data. Do you know what insights that the model that you're building is delivering and is that the intent of what you expected to begin with?

As well? When you think about and I think about our audience, the investing audience, what is it that you think that they need to keep an eye be specific to in terms of you understand this, you are have a front row seat in terms of I know security is a big issue, but that doesn't sound as the as interesting as the shiny new thing, but it's a real thing. What are the two or three areas that

you think investors you gotta be watching. This is where companies are spending money and this is going to be you know, more of our world going forward. I think if you look at the base facts of it, carlel is that you know, companies are continuing to spend money and how applications connectivity and security are delivered and consumed

as well. Right, So then there's the sustainability part of it, where you know, if you look at investments being made, technology will need to be sustainable by default and will require new technologies that are build with new processes and in service to these new business models as well. And then there's enablers of these things, right, of these business models, of which connectivity is one, security is the other one,

AI is an enabling technology as well. And I think, as with everything, you know, one of the toughest I find that one of the tough parts of my job is how to separate out the hype from you know, kind of what will be like real trends that we can advise our customers on. That's list and Tony Executive vice president and chief strategy officer over It's SCO. And that wraps up the first hour of the weekend edition of Bloomberg Business Week from Bloomberg Radio. I'm Carol Masser

and I'm Tim Stanavak. Ahead in our next hour, our cover story details the powerful headwinds facing the plant based meat industry. And where it's biggest players go from here. Plus how retailer American Eagle is expanding on a new supply chain model with an ion sustainability and sharing resources even with its own competitors. It's all coming up. This

is Bloomberg. This is Bloomberg Business Week inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news as it happened. Sloomberg Business Week with Carol Messer and Tim Stentovic on

Bloomberg Radio Flenny Hammer. Second hour of the weekend edition of Bloomberg Business Week, including this week's cover story on the fake meat flop heard around the world, will also dive deep into a special pursuit section of the magazine dedicated entirely sleep. I love sleeping. I just need to do more of it. Oh my god, the gadgets I have in my house all committed to help me inter

night's sleep. Sometimes yes, sometimes no, alright. Plus, it turns out daydreaming on the job can actually make you more productive. That's not sleeping on the job, right, No daydreaming. Listen up, every boss, First up this hour, let's get though to this week's cover story. When Beyond Meat and Impossible Foods came on the scene a little over a decade ago, both startups and their respective founders had pretty high hopes

and big promises. They thought plant based meat could help solve climate change, overhaul animal agriculture, and get humanity healthier by overtaking the two seventy billion dollar US meat industry. With their lab concocted a plant based burgers. But after tons of venture capital, years of consumer experimentation in a pandemic surge, the novelty has finally worn off. All right, well,

fake meat sales they are plummeting. Publicly traded, Beyond Meat is in a free fall, and Impossible is doing its best to chase the uninitiated. In Middle America. Big News consumer reporter Dena shank Or details the origin and evolution of a food trend that's now reckoning with its own hype. Did It joins us along with the editor of Blueberg Business Week magazine, Jill Webber. The beef has always been there. The what hasn't been around forever has been the fake meat.

And about a decade ago, you know, Impossible Burghers started to make some noise and then along came Beyond Meat, and when Beyond Meat went public, that I p O was the biggest I p O since the financial crisis. Was wild to sit to read that idea. And so that was all really interesting, and I think um consumers were beginning to think like, hey, this is the future

of what meat is gonna look like. And then fast and I think, you know, the pandemic, more people tried this stuff, and then you throw in a little inflation and grocery bills going up, and then oh, by the way, what's this fake meat stuff making out of and the

company's uh, have hit some headwinds. And what really caught my attention and our attention the magazine was Dina's All Star reporting throughout this and the headlines that we're starting to resonate with me were about the fast food stuff because all these fast food companies were suddenly was like, wait, wait, why isn't McDonald's doing this, you know, and where where

isn't anything permanent on the menus? And so we started talking to Dina about, you know, what's going on with fake meat and and it turns out that, you know, there was a moment where fake meat was in a hyper growth mode, and it's beginning to look more like that fat right, Dina, take us inside your reporting, would you learn? Thanks so much? Yeah, it was. It's been years in the making because, as you said that I p O was huge and everyone was excited about it,

I mean the entire industry. Suddenly you had like the small new startups that were coming up that we're getting tons of funding because everyone's an opportunity here. You had the big food companies coming out with new products or

reinventing old ones. Everyone wanted a piece of this because everyone thought, yeah, we can convince meat eaters to up something else in But it turns out that that's a really hard sell and it's gonna get even harder if the food doesn't taste quite as good, and it doesn't according to most people that you will ask about it. It's also more expensive. And then yes, environmentally, these things are so much better for the planet, but most people

aren't buying for the planet. They do care about their health. But then turns out these products are not healthy. Now, some people might say they're marginally healthier, but even that is not settled. So consumers just really started backing away, and we saw sales plummet at the supermarket, restaurants, just everywhere basically go ahead, Well, and this is something we've been talking about it before we got going. Is for me, like, if it was healthy, I'd be a buy in. I mean,

what exactly is in it? I mean, I know there's a lot of sodium, right, not good? What else? So these are ultra processed foods, which means that the ingredients themselves are processed or their extracts of other foods. So, uh, that means the ingredients list, are they so crazy compared to other things in the supermarket? They're not. There's a ton of processed food out there, but which I also

don't And that's exactly right. And so if you're trying to appeal to health conscious consumers, those are exactly the consumers who know to uh, flip the package and look

at the ingredients and look at the nutrition facts. Okay, So that actually speaks to an interesting thing here because the audience for this has you know, when you look at it, it's like, okay, well if it's fake meat, that means vegetarians would want this, right, But how's it gone over with meat eaters versus vegetarians Since those were the two categories of people that they're trying to get here, right, So vegetarians and vegans by the most of this stuff

per capita um. But at the same time, some of them are not really so into it either because they're not really looking for something that is that close to something meaty, like I'm a vegetarian, I don't want to see the food bleeding. There are plenty of vegetarians that like meat, but they have other reasons for animal welfare reason environmental reasons, and these are appealing to them, and they are probably the best customers. They're buying the most

of it um. But then you also have the meat eaters, and meat eaters just don't buy with regular frequency. They kind of dip int about um. A lot of people, you know, thought I'd like to cut down my meat and take and tried these. Some of them said okay, well that was that was okay, and and then they've got comfortable with the idea of something like lentils or beans um, which is also a lot healthier and cheaper. Um. Other people were like, well, yeah, I'll go back, I'll

have some chicken because chickens. I know, chicken is healthy and it's still a lot less expensive than beef and less expensive than this stuff. So the consumer base is just really very narrow. What is it about food fads that gets people so excited? And I'm old enough to remember like the snack Wells fat free food craze which you mentioned, the Olean slash Olestra stuff and potato chips, which I remember my dad explaining to me what that was.

I mean, that was supposed to be really exciting, and then after a few months or a few years, people start to realize, wait a second, this isn't good for us. It's like we haven't even learned this. We're all just really obsessed with the idea of looking good and also want to eat all the time. And so anytime somebody can offer a solution that sounds like it will let us be both of those things, we all jump on it. Are you looking at me? Okay? One thing I do

want to ask more about. The article is ultimately about two different companies right beyond and Impossible and beyond the publicly traded one. And we talked a little bit about that I p O before um, which you know, just to rewind the clock a little bit, and like think about how how rosy of a picture it was in twenty nineteen. In July, UH stop hit out all time high children four dollars to share. UH right now is trading at fourteen, So gives you a sense of how

much enthusiasm has come out of this space. But so what what what do the prospects look like for Beyond? And what about Impossible, which is still privately held. So to strategic differences, I think here, yeah, to UH companies obviously with a lot in common, but also that operate very differently. Beyond has a lot of issues that I wouldn't attribute to the category or to consumers. They have a really hard time executing and we've covered that for a while. UM They've had a really hard time bring

costs down because of that. UM their leadership is constantly changing, so they have their own problems. Impossible is private, so of course we don't know the same with the same level of detail about their sales. We do know their supermarket sales are way up. For two they went up by more than fifty according to the company. The way they did that was largely by just adding more and more products, which is a tried and true food UM strategy. To get people to buy more things. You know, you

just in two ways. One is that the more products you can put on a shelf, the more likely a consumer is going to notice them. You know, when a yogurt company has like fifteen flavors, it's not because they think every one of those fifteen flavors is going to sell well. If they want that space and um, then whichever one of those products do sell well, they'll hold on too, and they'll keep cycling in and out of innovation.

So that's the That's what Impossible is doing now in supermarkets, and it makes total sense because their CEO comes from Chobani and has all of that experience. You know, the thing about feeding the world and that the you know meat, what it does to the environment, to our earth, and especially as the population continues to grow, there is something to say that we've got to figure out some agricultural innovation right and food at innovation? Is it just a

case that they need more time? Am I missing something? What do what do folks saying? We just have about thirty seconds? I think if it were me, I would never depend on consumer behavior for big changes because this kind tree has what three million consumers in it? And that's a lot of that's a lot of people to expect to change their behavior. I'd go, I try to get corporate behavior to change because there's many fewer corporations.

That was Bloomberg News Consumer reporter Dina Shanker along with Business Week editor Joe Weber on this week's cover story. You're listening to Bloomberg business Week coming up. When faced with pandemic related disruptions and increasing pressure from the likes of Amazon, American Eagle decided it needed to reinvent its fulfillment strategy, and that meant the company would opt to start sharing its supply chain with other retailers in a

bid to compete with the e commerce giant. So we are building a brand new category called collaborative commerce network. If you look at why the shipping networks work so efficiently, this collaboration, there's this consolidation at the at the port, and you know when it gets into it gets out of the factory, it's one giant shipping network which is bringing the product into the country and it is all interoperable. It's all trade moving on that ship. We don't have

a system like that in US. It's unprecedented that we spent less money in, then we spent. We spend less money in, then we spent Why Because collaboration works, and collaborations across retailers on supply chain is the way of the future. American Eagle chief supply chain officers Shaker and Naura Jan joins us. Next, this is Bloomberg. Please is Bloomberg Business Week with Carol Messer and Tim Stinevic from Bloomberg Radio. Well, we definitely gotta check on US retail

sales this week. It's so the consumer putting on the brakes as US retail sales fell by the most in a year, raising concerns that the economy is losing momentum under the weight of tighter FED policy. And that comes on the heels of recent consumer sentiment data that showed consumers aren't ready to tighten their belts just yet despite

warnings of a booming recession. So with all this in mind, we were pretty eager to catch up again with Shaker naer Agin, executive vice president in chief supply chain officer at American Eagle. Yeah, trying to make sense of all these mixed signals when it comes to the consumer. Shaker, by the way, joined us though on the day before that retail sales figure was released, he's expressed confidence though in shopper spending power. Despite headwinds on both the demand

and supply sides. Every retailer out there has experienced good sales during the peak season. Um. And at least that's what the master Card data says. And that's what basically the consumer sentiment is. UM. Like, I'm not allowed to talk about I was just you know, I knew that, but I was just trying to get you. I'm so

sorry I disappointed you. UM. But that said, I think like, um, you know, last year was a year of just in case inventory in the system, primarily because the supply chains were all uh a month before your report you could share anyway, keep keeping so UM so we we we definitely, Um. Every every retailer had like just in case inventory. Like you know, the supply Chaine is slow, unpredictable, so people

actually ended up like carrying more inventory. Like, just to give you some context, eight hundred million square feet of warehouse space in two was used for storing inventory. That number means nothing to me, So it's absent. It's a cent of space. It sounds like a big number. To make it, but it's quite free. It's it's allowed. What do they normally hold, Well, you don't have that, like you know, have any of that. Yeah, So so like

we should see massive rationalization of inventory this year. People have begun to kind of like ration the inventory back in this because the supply chains are working. The supply chain is getting the product into the country is working.

But basically, like there's inflation still like looking us at us from when it gets into the country to the doorstep when you start looking at basically what FedEx and ups have announced they have one it's like a six sour charged on every package, which means one pound package that you ship like less than two hundred miles for one pound is going to cost ten dollars. It costs eight cents to bring a unit from China to US. It costs ten dollars to ship a package for one

pound because it's so expensive in the US. It's the last mile it's and that's what makes it expensive very much. So, but like you know, we live in a very fragmented system, right, So we live in a very fragmented system because basically, like everyone is sitting in the center of the country and and from a warehousing perspective, distribution and trying to

access the customer. But the problem is that unless you're Amazon and you have your own network of delivery drivers, which is by not any means how they all are shipping, how Amazon ships everything, you're all kind of dealing with the same cards. Yes, so, and that's where what we are trying to do with like American Eagle, with particularly quiet platforms, is actually solving that very fundamental problem. So we are building a brand new category called collaborative commerce network.

If you look at why the shipping networks work so efficiently, this collaboration, there's this consolidation at the at the port and you know, when it gets into it gets out of the factory, it's one giant shipping network which is bringing the product into the country and it is all interoperable. It's all trade moving on that ship. We don't have a system like that in US. Everyone is actually can we have a system like that? And we've talked about this with you before, Yes, very much, so very much.

And that's what we've been growing so far. Like you know, when you when you hear Michael Rempel talk, who's our chief operating officer, He was on the even on the second quarter called the third quarter call, and he mentioned, it's unprecedented that we spent less money in then we spent. We spend less money then we spent Why Because collaboration works, and collaborations across retailers on supply chain is the way

of the future. So tell us how much can you drill down because we're talking at this high level, which which is fine, but so say so you're collaborating with who or what in terms of moving stuff around. So we have we have fifty brand retailers on our platform, everyone from Sacks, Steve Madden's Fanatics, uh Sacks and so these are large customers who are actually doing business with us.

And and primarily what we're doing is we are aggregating, just like Uber, We're aggregating all of the packages in inventory which is headed in one direction or fulfilling these packages closest to where people live. But but the thing that I don't get is it's not like I go back to Amazon, because I think it's what a lot of people are familiar with. If you make two separate orders on Amazon, sometimes they show up those two things up in the same package. If I order something from

American Eagle and something from Steve Madden. Those are not going to show up in the same package. Right, That's what we're attempting to solve. Are you attempting to We are attempting of the same package. We are attempting to solve. So we have we we've designed and this is something that we have basically conceptualized design. But you know, you have to get to a certain scale for distinct to work.

But you need sort of like one identifying characteristic from the consumer in order to make sure that you know the Tim stand off ex re orders this is the same as you know, my wife who has a different last name, who's ordering this? Yeah, right, so so so we we are we are doing like this is fundamentally happened in other industries. We have a concept called merge in transit. So primarily what it means is none of

these networks, they're all push networks. When you when you actually like you know, buy something, you're pushing a package to like Tim's doorstep. The Quiet Platforms, which is a facility close to where you lived him is able to take packages which are all headed to your door and then give it to one carrier. So that one carrier delivers to your road in one one box. And that's

essentially what we're building out right now. If you if you listen to Carole Tomy talk, you know, she talked about it like in a second quarter earnings earnings call. She said, the cost of last mile to your door, Tim, it's five dollars and fifty cents on cost spaces. The next package she delivers to your door is sixty cents more. Okay, So Carol, I'm gonna jump in here because I'm seeing

this too. With Uber for example and Uber eats. If you order something on Uber eats, they say, okay, you have you know, X number of minutes to add something to your order from CVS for example, which is along the way. And I'm not using the names correctly, but it totally makes sense because that incremental cost to get

that thing to your door is cheap. And imagine, right, you have in the last ten years, if you if you revolve the time back and look at it like what ten years was like, you had probably one package from one carrier in a diluted to your door. Now you have ten packages coming from ten different people, but ten different carriers showing up at your door with all they got about forty seconds left here? So what's key in making this work? Like, I get it. So what

is it that you have? You have to have just a ton of people buy in and help support the infrastructure or what, Yes, it's it's it's this is like like I will put it in the words of what like you know and out of President told this is going to be game changing. What we're trying to do is going to be game changing because it brings sharing economy to a whole new level at the physical and

the digital. Almost sounds like air the airline industry in the hubs of like I order a bunch of things, okay, and it all goes to Atlanta and it's put into one little box and then it goes out to me.

Box is just a manifestation of coaboration. But you know, even if you don't put it in one box, but if all the packages which are headed tim goes to one carrier, you still get the efficiency that delivery provider, that shaker not arousing an executive vice president in chief supply chain officer at American Eagle still to come on Bloomberg Business Week. The pursuit of sleep it's the subject

of our pursuit section this week. I feel like that's my life, feel like it's both my and my husband's life. You're not alone, and that's why a lot of money goes into this. Oh my God. From smart rings, sleep buds and sauna blankets to pillow menus and the jet sets, best tips for no jet lag, all the tricks on getting a good night's sleep. There's some really fun advice from Joe Malone who makes all the Lovely perfumes that

her advice is to keep herself active. So get off the plane, go do something like go to a spa or even go to Joanne read like, get out of the plane and do something. Don't just don't. Just try to go to sleep if you can't, that's important. That's

next on Bloomberg Business Week. This is Bloomberg Broadcasting from the financial capital of the world, Bloomberg You Live in Rio in New York to Washington, d C. Bloomberg to Boston, Bloomberg one O six one does San Francisco, Bloomberg nine sixty to the country Sirius XM Jentol Mine Team and around the globe. The Bloomberg Business in Bloomberg Radio dot com. This is Bloomberg Business Week with Carol Messer and Tim Stinebe from Bloomberg Radio. Well, we always look forward to

the Pursuit section of Bloomberg Business Week magazine. Not only does it tell us where to travel, what to eat, which luxury items to invest in or buy, it also provides tips for long lasting health and wellness, such as a good night's sleep. This week's section and details some tricks from the trade for enhancing the way we live. Roughly a third of our lives, it's with our eyes closed, you know, Carol, We're not actually very good at it. How many times do we get into our our show

or just before show, or we see each other. And the the more I'm like, I have termlized sleep. It's increasingly for me. It's like almost every day, I'm obsessed. And I know now that there's a word for it, if you're obsessed with your sleep data. But it's not just us. And you know what would have found and we have some incredible data in this story that shows that Americans are just not not good at sleep and how much it costs society. We're seeing the conversation really shift around

the importance of sleep. Check this out. In the US, a staggering fifty percent of the population is sleep deprived. So you me and millions and millions of other people. So what does sleep deprivation mean? Well, it has real economic implications. Some recent data from the Rand Corps says that insufficient sleep has an estimated economic impact of more than four billion dollars each year. And that's just in the US. It's real, like, it really has an impact.

And what's interesting is, all right, so it has an impact if you're just not as productive or you're tired. It also, though you know, on the flip side, has created this massive industry as we just mentioned, and I have to say in the pursuit section, there's a bunch of gadgets and I'm looking at least two of them have been in my household. Okay, less to say, I don't know if we're suckers or if we are just

part of like a growing trend of tracking or sleep. Listen, we do it at home, and we do it also when we're on the road, and sometimes that can be even trickier. And that's what we want to bring in Bloomberg Prosuits. Reporter Sarah Rappaport. She joins us from London. We loved your part of this section because getting a good night's sleep it's really important because sometimes you've got

a lot to do while working. Yeah, whether it's work rather it's vacation, it's really important to get your good seven to eight hours sleep. And the thing is you could be in the fancies I'll tell a sweep ever and the nicest beat and the best pillows, but you might not sleep well. And that's actually because evolution. You're in an unknown surroundings and your brain is like where am I am I safe? I'm gonna get attacked even though you're you know you're in a great place, you're safe.

That's part of evolutionary response. You need to quiet it to get that good night's sleep, and that's easier said than done. Right. Hotels are increasingly getting smart to this though. They want to be a place where people are incredibly comfortable, that people want to come back to because they get a good night's sleep. Um, you spoke to some experts

in doing this reporting. What did you learn about what hotels are doing to try to help us get a better night's sleep even if we've got jet lag well, the wellnest industry is being bigger than ever, and hotels obviously want to be a big part of this on vacation and for work travelers, and some hotels are offering a pillow menu. You can pick firebuds, but come on,

does not sound delicious. Doctor Burbucca Robbins as affiliated with the Benjamin Royal Sanesta in Manhattan for a pillow menu, so you can pick one depending on how how do you sleep? So what's what's your sleep position? We'll find you a pillow. Can I tell you we have gone through probably three or four different types of pillows on our bed um and just been like, no, that doesn't work. That doesn't it's crazy. You're preaching to the choir over here.

And then you know there's the special pregnancy pillows as well that people use even if they're not pregnant. It's like unbelievable. People people love them. I sleep on my back, so I need one that's less full on a side sleeper. But for me, I'm an easy type. But for people who like on their sides and need a bigger, one, nice fluffy pillow, yeah, I hear you. I have to say when I do travel every like it's somewhere we're going to go in the car. Not pillow goes in

the car. It goes with me. Um. I like them on planes too, although differing advisable, Well they should sleep on planes or not? People have very strong opinions on this. Well, you know what, can we go right there because I love the part where you talked about the jet set no jet lag. Tell us about some of the advice. There's some really fun advice from Joe Malone who makes all the lovely perfumes, and her advice is to keep

yourself active. So get off the plane, go do something like go to a spa or even go to Joane read like, get out of the plane and do something. Don't just don't just try to go to sleep if you can't, that's important. What about when it comes to caffeine or or other substances that we ingest, like alcohol. I would like some line on a plane when I'm on a plane, do not touch alcohol. I think you're more virtuous than the rest of us. And I'm gonna say virtuous. I just know that. I just know that

I get such bad headaches from it if I'm traveling. Yeah, the doctor told me how day drinking is basically okay, but don't sleep before right before bed. That's because you might fall asleep, but it'll be worth quality sleep. You won't get into that perfect r M sleep that you want. So yeah, you can fall asleep if you drink, you're not gonna get any good quality sleep with that's accounts all right, Sarah. So Tim does not drink on a plane, but you know what he has big time. He eats

till before he goes on the plane. He eats everything that's on the plane. We really shouldn't be eating, you know. I think it's fine. We had want We had a luxury travel company person tell us to eat nothing. She thinks a better at your restart your digestive system to help you sleep well, they or not at work. I think you know, to try it out for yourself. But she she did the New York of Singapore flight and said that's what helped her recover fast from the jet

legs from all the way around the world. So yeah, give it a go. He might be hungry, though. I love the line in this section that you wrote that at super high altitude, your digestive system shuts down completely, like it kind of makes sense to literally from the peanuts at the beginning to the ice cream hot fudge, you know, Sunday, I'm like, wake me up to the flight attendant when you bring I think you should enjoy yourself. I think the healthiest advice though, from all the doctors

is exercise and to do something productive for yourself. What about it where you are okay? What about pharmaceuticals, because there are people who just swear by popping a sleeping from melatonin, melatonin, I mean some of the prescription ones as well, if they're on a long flight. What's the advice about that. I think they're okay as long as you don't get dependent on that what the doctors are saying.

I actually got a quite fun tip. I did the reporting on this before Christmas and I was flying from London back to my parents in Chicago, and Rebecca Robinson Harvard told me to move my calendar a little bit closer to Chicago every night week before my trip, so to stay up later in London to get closer to Central Time. And I tried it and it worked. I wasn't as jet lagged, so staying up later to get closer to Central time that's really smart. That kind of

makes sense, right, I get it. Yeah, the other way around, if you're coming to Europe from the U S or whatever, wake up earlier. I think thinking about that timing element is really really important. I think about that too when I get in a plane, like resetting my watch and you know, but that immediately to try and do that for the second you get on the plane. I do. But I have to say, like, if we're on a broadcast calendar, we have to we're committed to the broadcast calendar.

Let's see, we're going to the West Coast and we're in New York. We have to think about like I've got to have almost two watches so that I don't like miss something because that can happen the right wash for that. Roser, he does know a thing or that is so true. Um, some really good stuff. Um, we really appreciate it. Bloomberg Pursuits Reporter Sara Rapp report, and

you're welcome, Tom. I just want to get to some of the other things that are in the issue, because first of all, this right for sore eyes, this product by thorough Body got it for Christmas? You did, I've started. Do you think of it. I kind of love it. It's first of all, some of it is because I'm having like headaches and our things, and it's like in massages around your eyes. There's heat. Um got this for you. I love this. This is a this is you got

to see this in Santa hasband got it for me? Okay, Santa Husband. So this is thorough Body's new high tech massager. It's a bomb for screen time headaches. I guess what I like about it too, is it blocks you from actually getting to do anything on your phone and kind of takes you into the zone, right ye ye. You have to lie down because it's a little bit heavy, but it miss you know, massages kind of your cheeks, um, your temples, around your different eyes and there's different settings.

So I kind of really love this idea because I always feel like a lot of tension kind of shoulders up. So it's it's a lot of fun. Hey, the other thing in the magazine, he does love me. He also listens when I'm like to see something on TV. Hey, that's really cool. I want that. Um. There's also with all the gadgets out there, there's a little section that says no track or no problem and there's a bunch of tips to really ace your z s getting to sleep.

And one thing is be consistent um about your time. There's that rhythm, and that's one of the things I keep hearing about advice because I'm sometimes all over the place, like pick a schedule and stick to it. There's also the age old advice of just getting a workout in, you know, lift some weights, something you can do a few times a week that will help you get better sleep. Right, but running and cycling still great, but not immediately before bed.

So a bunch of things. Anyways, it's a really great section. And I don't know about you you, but I feel like every time I have a conversation with someone in my orbit, so many times it's like I'm so tired, I didn't get a good night's sleep. So well, now you can use all these devices and these tips to to get a good sleep. I really encourage everybody to check out this entire section. It's in this week's issue of the magazine. It's out on newsstands, It's online at

Bloomberg dot com slash business. Wee can always on the Bloomberg terminal, even if it's just for the pillow manual Alone. You're listening to Bloomberg Business Week. Coming up from the Business of Sleeping to the Art of Daydreaming. Why letting your mind wander well at work is key to thriving when you're at work. That's up next. This is Bloomberg. You're listening to Bloomberg Business Week with Carol Messer and

Tim Stentovic from Bloomberg Radio. One of our most read stories in The Bloomberg this past week was about how City Group, which has one of the more flexible policies in Wall Street when it comes to work, is cool until a worker's productivity dips. When that happens to him, they get summoned back to headquarters for some coaching. Our next guest conducts research on human performance in the workplace. Gabriella Rosen Kellerman is the chief product officer at Better Up.

She's co authored a new book. It's called Tomorrow Mind Thriving at Work Now and in an Uncertain Future, and she explained why both personal success and corporate productivity suffer when we can't flourish on the job. One of the things that goes wrong in these environments is we react to change with a sense of threat. And fear it can result in very anti social behaviors. We also don't have the same kinds of deep and lasting relationships with

colleagues that we once did. All of this allows us to come and at work from a more centered, empowered place, a more connected place. We talk a lot about how to build trusting relationships. Those factors are diminishing the fabric of connection and the fabric of positivity that at would

be wonderful to restore. Look, I gotta be honest, you know, we work in a distributed world right now, and I feel a lot closer to my colleagues who I'm around physically, the ones who I see each and every day, than the ones who perhaps work in other offices around the world. I'm wondering, Gabriella, how you're able to do this in

an environment where people are working in hybrid environments. Right when we're with people in person, that shared time and physical proximity is very valuable in helping us spawn to them. And part of what we're doing is our brain is learning to process them as in us rather than of them, so someone in our in group versus our out group, and that is a huge basis of trust, which then makes work easier and lighter and more fun, and we

actually are more innovative in that mindset. And so we get into a lot of the science of how do you still build that trust in connection across geographic distance. One of the keys comes down to shared time. So just as you have that share time in person in the office, think about how little of that you have with people are at a geographic distance. But when you're able to create it doesn't have to be by zoom. It can also be by phone. But that shared sense

of experience, we're experiencing something together in real time. You're reacting, I'm experiencing your responses. All of that rich data is part of what allows for that bonding and that trust to form. One of the things you talk about is why daydreaming is critical to thriving at work. Um, I love that you go there. I'm someone who believes strongly in meditation. I'm not always good about doing it, so tell us about daydreaming. Great. So daydreaming is very much

a feature of the mind and not a bug. It's something that we need to do in order to generate our creative ideas. Connections we can't come to, we can't

force ourselves to come to those with conscious attention. That daydreaming is the activity of the default mode network, which is the brain network that activates when we're quote unquote doing nothing, when we think we're sort of just sitting around staring in this space, and it actually activates every few minutes under normal circumstances, kind of go in and out of that day dream. Even while we're talking now, people are going in and out of that day dreaming mode.

It's really adaptive, it's really important. It's a huge part of where creativity comes from. Unfortunately, a lot of our busy work today, whether it's zoom, meanings, slacks, emails, horrible for daydreaming, right, And so to be able to give yourself permission to just take a few minutes and take a walk meditating is fine. You know, you want to do things that are not going to overly tax your conscious attention, things that sort of like keep you in it,

but not overly. And so the attention, the energy is going to this mind wandering, connecting, drawing on memories type of activity. Gabriella Rosen Kellerman, chief product officer at Better Up, also the co author of the new book Tomorrow Land thriving at work now in an uncertain future. All right, that wraps up the weekend edition to Bloomberg b This week from Bloomberg Radio, thank you so much for joining us. I'm Carol Masser and I'm Tim Stanavak. Be sure to

tune into Bloomberg Business Week Monday through Friday. It starts at two pm Wall Street Time on Bloomberg Radio. You can also watch your daily broadcast on YouTube. Just search Bloomberg Global News and check out our Bloomberg Business Week podcast. You can find that at Bloomberg dot com, Apple, or

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