Bloomberg Businessweek Weekend - September 10th, 2021

well deserved time off. Coming up this hour, it's not a week without talking about the shrinking gap between traditional finance and crypto. Plus, we're gonna hear from one tech CEO who's focusing on the fight against ransomware, and next hour we hear from the CEO of lands End. He talks to us about the outlook for the holidays and how tough it's been to find employees. All that and more to come over the next two hours, but we begin with the current issue of Bloomberg Business Week magazine.

It's the City's issue and feature stories about cities all over the world, the challenges they faced throughout the pandemic, and what they'll look like years into the future. It also takes a close look at one area of Seattle, a commercial district that has undergone trial by virus. The pandemic changed the heartbeat of urban areas across the US, and a few more so than the Pike Pine corridor

of Seattle's Capitol Hill neighborhood. I spoke with Noah bou Hire, finance reporter for Bloomberg News, and I was joined by my Bloomberg Quick Take colleague Katie Greifeldt. Well, it's UM. I think what a lot of people would imagine as a Biburne at all hours, retail arts, commercial district. There's music venues, a ton of restaurant. UM. It's not uh, giant buildings, but you've got a lot of you know, for six seven eight story UM apartment blocks that have

retail at the ground floor. So it was really the part of Seattle that that that felt most citylike outside of UM downtown. And what happened over the last year as the pandemic took hold and commuters started staying home and not going to those restaurants, and and then just a few months later, in the aftermath of the murder of George Floyd, UM activists took to the streets there to demand racial justice. Yeah, so look, it was an interesting UM neighborhood to follow for all those reasons you

just mentioned. UM. You know, a lot of the businesses in in this corridor UH were the kinds of places that you know, relied on a vibrant street life and and and people being able to get together. And obviously the pandemic UM made that difficult. And UM the other thing that was interesting about this neighborhood is that there are just a ton of UM, smaller businesses. So you know, uh,

Amazon has one of their Grocery Stories stores there. There's a Starbucks reserve Rosty in the neighborhood, so there's some corporate presence, but there were also a lot of small uh scrappy businesses that just had to figure it out. UM. And UH you know, with this piece, I I followed UM a number of them uh through the last year and a half to figure out how they did it.

Because while you know a number of businesses did UM go under during the pandemic, UM, a lot managed to get to this point uh through UM the generosity of customers, through UM government assistance programs, and just a lot of scrappiness that I don't think um uh people and fully appreciated, and so no, it's a great piece. And one of the reasons why it's such a good read is because you did track a group of four businesses over the

past year and a half. And I'm curious, you know, you mentioned the scrappiness of the businesses and the business owners, but I'm curious if there was a uniting common denominator and how they were all able to get through the pandemic. Yeah, that's a great question. UM I I really think it is the constellation of factors it was. It was you know, these these were established businesses with loyal customers and UM.

You know, to the extent UH some of them were able to do go fund means government assistance, which is absolutely key UH programs like the Paycheck Protection Program. Pretty much everyone took that money. UM. It was either a form of bridge financing or UM uh to get them to other federal grants or UM or or it was the thing itself that that helped get them through UM.

And then you know, I think another uh under appreciated part of this is that, UM, we're talking about a city where a lot of people have been willing to get vaccinated, and even though we've had pretty strong, um strong public health restrictions here in Washington State throughout the pandemic. UM people were willing to go back to this neighborhood when when those things lifted, because we're talking about a city where you know, seventy five more than seventy of

UH people twelve and up have have gotten their jobs. Well, it's interesting because one of the one of the elements of this that really sticks out to me, that really caught my attention is the graphical representation of the change in weekly visits from that are in here charts that just show how foot traffic has not returned to retail establishments there too, restaurants there even after the vaccine rollout, to music venues for example, in some cases restaurant visits

are still down even after vaccinations fifty from nineteen. How are these business owners dealing with that? Yeah, that's a that's a great question. I do. I do want to highlight that the data here is really interesting. We were able to get foot traffic data on about fifty locations around this neighborhood. Most of them were you know, commercial establishments, and UM, I think that data really does show you, like you said, that things are a far are far, far,

far from being back to normal. Um and the reason these businesses are still you know, any of these owners will tell you things are not back to normal. I mean they are. They are still very much in the thick of this. And we're, you know, going into the fall when things like outdoor dining are going to be harder to do, and frankly and Seattle just not comfortable

because it rains so much here. So I think that's a big part of this part of this story is that these businesses have been resilient, but they are by no means, you know, out of the ways yet. That was Bloomberg Finance reporter Noah Boo Hire. You're listening to Bloomberg Business Week coming out of the CEO of cracking a bank, on closing the gap between crypto and traditional finance. This is Bloomberg. This is Bloomberg Business Week with Carol

Messer and Bloomberg Quick Takes Tim Spinovik from Bloomberg Radio. Now, this past week was a particularly notable one for crypto. We had the Bitcoin flash crash, where the crypto suddenly plunged sevent in just minutes. David Knitsky is the CEO at crack and Bank. It's one of the largest crypto exchanges with over eight million users worldwide. They've had about one million new sign ups in the second quarter of I spoke with David and I was joined by my

quick Take co host Katie Greifeld. We started by asking why he's chosen Wyoming for the company headquarters. Wyoming past the first of its kind new regulatory license here for a special special purpose depository institution. It's a state chartered bank. And up until now, crypto companies have really been round peg square hold into existing licenses and regimes that didn't make a ton of sense, and we're kind of locked

out of the existing banking mold. So for that reason, we'll bring in the US business under a more certain, more formal, and better regulatory regime, as well as expanding in the new opportunities, new products and markets. As you see, everything's converging between crypto, neo bank, spintech, traditional and were we want to be at the heart of that market. But but you do call yourself a bank, Yeah, we are. We are state chartered bank, and so Wyoming is interesting.

Obviously has positioned itself to be a crypto hotbed. Where does that stand with the rest of the United States. Are other states moving towards Wyoming or is Wyoming really an outlier at this point? Why? I mean, definitely got the ball started, but the ball rolling. But a number of states have let's say, borrowed liberally from the Wyoming playbook and enacted their own version of a similar charter, and it's provoking federal regulators to take action as well.

That's kind of the beauty of our republic and our system here where states can be the laboratories of innovation and push things forward faster than the federal government have. So it's really been a spark that's moved the whole industry forward. David, you say that kracking will be the first United States crypto bank, It's I'm wondering the problem that you're're setting out to solve here, what is not

being met by traditional finance. Yeah, so in the traditional regimes right now, you can either apply for fifty state money transmission licenses or you can try and none of them have like crypto specific language. They're built for like Western unions and fin techs of the world. And then or you could try to pursue a banking license. But the federal regulators b C, the s c i C have been inconsistent about that UM and they don't have written moved about how they're going to treat crypto that

has a dedicated supervisory and oversight manual. We just want to know, Hey, this is how we're gonna be regulated and what our expectations are and we can meet them. So for those reasons, the lack of clarity around some of the stuff in other states is really suboptimal. And banking has been a traditional problem for crypto cracking is lucky to have a swath of good third party banking partners, but there's nothing like vertically integrating and controlling your own

destiny direct to the FED. And so, David, I've always been curious, you know, how do you scale? Obviously there are regulatory hurdles, but in terms of the average American who maybe only has a passing understand ending of what bitcoin and what cryptocurrencies are, how do you convince them that this is the next, you know, wave of banking, this is the next evolution of how you handle money.

How do you bring that message beyond just the cryptocurrency community. Yeah, Well, one, the crypto currency community is is growing rapidly and more and more kind of mainstream adoption is taking place. We think that's going to continue. So on the one hand, the market is coming to us. But on the other hand, yeah, just banking license lets us offer online mobile checking accounts and savings accounts and traditional equities brokerage, things like that

that you know mainstream America are used to. And so if you put that side by side or crypto, it's a kind of a great conversion mechanism. You do know on the Cracking Banks website that you are not f d I c ensured. The money that you put in, the crypto you put in is not f d I c ensured. Explain why that is a little bit and why you think that consumers from who might be a little concerned about that should or should not be Yeah, anything,

their advantages to our structure. So the way that the SPDI charter works is we are required to be a fully reserved, fully back bank, so we maintain we take customer deposits and we keep a hundred percent of it in cash, so we don't have the types of market or credit risks or insolvency risks that the FBI c was meant to protect against. So as a result, we're

kind of exempt from having to apply for that. There is no you know, risk because we're not lending money out in the mortgage portfolios, we're not putting it into we're not even putting the treasuries, let alone longer duration or risk your instruments. Given the increased interest in crypto the way, we do see traditional financial institutions starting to

embrace it. If you expect to get significant competition from the big names in banking and even community banks, yeah, I mean I expect more and more to realize the opportunity and come to the market. We welcome them, not particularly concerned about it. As you see any new like technology medium, normally it's the folks who are kind of that native to that medium are the ones that do best. I think it'll be pretty cha vallenging for institutions and

incumbents to really adopt the crypto fully. But I think it does help the market more broadly, and I do think the question is to find the existing financial industry coming to crypto rather than crypto coming to the financial industry. And so I want to switch gears and talk about stable coins because I'm kind of obsessed with them. For those listening who don't know, stable coins are cryptocurrencies that try to maintain a fixed exchange rate with a fiat currency,

usually it's the dollar. They try to maintain a one to one peg. They've come under a lot of scrutiny lately. Some people might have heard of Tether. It's the largest stable coin. It was supposed to be back to one for one by US dollars. We learned in May that it wasn't. That actually holds a ton of commercial paper, maybe thirty one billion. If you look at Tether's market cap,

I'm curious what that could look like going forward. We know that Treasury Secretary Jin Yellen is concerned about stable coins. Some FED policymakers have made worried noises as well. I'm curious even whether you think that we could see regulation in that space. Yeah. I always expect regulation in thought new financial markets, no doubt. I think the stable coins are a net benefit and a boon. In fact, the

US should love stable coins. It is the best way to maintain our dollar reserve and hegemony and for our kind of global reach and global economic cloud. And so the U s should love stable coins. But we know that the US doesn't love stable coins, and you do have banks like Barkley's warning that this could raise some

really thorny issues for the FED. If there is a run on Tether people trying to redeem their holdings, that could cause Tether to dump commercial paper on mass, and the commercial paper market is crucially important to just the functioning of companies. So I'm curious what would get the

US on board if they should love stable coins. Not surprising that a bank would be wary of something that definitely is competitive to it, And there are certain areas of stable coins that you know could potentially use a little bit more and parency, no doubt, And in fact, even teather, which is certainly the more questionable ones in the market, like it's getting better and it is definitely changing.

It's kind of like balance sheet to these concerns. So I do think that's going to change over time, and there's going to be more transparency, whether by force or just by market dynamics. So I expect that to happen sooner rather than later. That was David Kannitski, CEO at Cracking Bank, Still Ahead on Bloomberg Business Week. Who wins and who loses? In the Age of Tech Titans, We're gonna hear from the man who literally wrote the book

on it. This is Bloomberg Broadcasting from the financial capital of the World, Bloomberg eleven Rio in New York to Washington, d C. Bloomberg to Boston, Bloomberg one O six one does San Francisco, Bloomberg nine six to the country Sirius XM Chamber one nine and around the globe the Bloomberg Business and Bloomberg Radio dot Com. This is Bloomberg Business Week with Kara A Messer and Bloomberg Quick Takes Tim

Stinovin on Bloomberg Radio. Many people may think that they understand the secrets to the success of Silicon Valley and the Thing stocks, but the truth is well a lot more complicated. That's at least according to investment banker and Columbia Business School professor Jonathan Knee. He's the author of the new book The Platform Delusion, Who Wins and Who Loses in the Age of Tech Titans. We spoke to

him earlier in the week. I was joined by Bloomberg's West Coast correspondent at Ludlow, and we started by asking him if there's any secret to the success of these big tech companies, calling them platforms is a way that makes people feel comfortable that, well, they're all doing great, and that's the secret. But the reality is many more platform businesses are unsuccessful than our successful and when you look at the sources of strength of each of those businesses,

they are quite different. So let's start with Apple, for example, because there's a lot of news about Apple, including the fact that we do expect the company to unveil hardware and is that my colleague at though my co host on the show reported one of the key people in the Apple's car program, excuse me, has been posted going

to Ford. Let's start with Apple. What's what's the secret Apple? Well, look, at the end of the day, Apple is a product company, and in fact, the vast majority of Apple's revenues has been for since the death of Steve Jobs, has been from a single product, the iPhone. That is still the case,

that is still a majority of their revenues. But what makes it so phenomenally profitable is in fact the platform aspect of the business, which is really the app store, that has created an ecosystem of wild and extraordinary profitability and the new leadership post Jobs has done a phenomenal job of monetizing that ecosystem and monetizing that product. But you know what, in the world of products, eventually everything

is a toaster. So if you if you don't come up with a new one, a radical, new one, at some point, you're not going to be able to ring out any more juice from that lemon. There's more to go. It's a phenomenally profitable and fantastic company, but eventually you've got to come up with something new, which is why you hear them throwing out crazy ideas like well, I'm

going to build a car. Healthcare is the next thing for Apple, which is fine in theory, but there's no evidence that those are things that Apple is very good at. How do you assess this basket of mega cap tech companies as we come out of the pandemic. It seems

they found some relevancy, some stickiness. But what is your main takeaway of the fortunes of those companies from COVID nineteen, Well, in many cases, what you've seen is phenomenon that we're going to happen eventually being pulled forward, people being willing, even even your grandma's willing to buy groceries online when the alternative is getting a deadly virus. So it definitely

helped a number in permanent ways. But it's very important with a number of companies, not just the big ones, to distinguish things that are pulled forward and permanent and things that basically gave companies that frankly didn't have much reason to survive a an extra whiff of life and it's not gonna last after things normalize. That's not the case with any of those guys. All those guys are going to be here for a long time. A're going going to do well. And mostly it's a pull forward phenomena.

But at least two of the five fang companies are in incredibly competitive marketplaces, Netflix and Amazon at least the part of Amazon is that is an e commerce and those are both very low margin businesses and they are both facing more competition than ever before. Well, let's talk a little about that, Anathan, because you write in the Platform Delusion who wins and who loses in the Age of tech Titans, that there is this myth that these

companies are invincible and that discourages competition. Where are these companies vulnerable well, each one has got a different achilles heel. Let's start with the strongest one. You said, Google sits on top, and it sits on top for a reason. In search, it's mind blowing business. It is unlike many cases where people talk about learning and AI and big data, where actually, in practice those things don't do very much for you. In the case of Google, it does do

a lot for you. And the thing about Google that's so incredible is it keeps doing more and more as it gets more and more activity. So in search it's a monster. But what's their achilles heel. It's that in anything other than search, their track record is miserable, I mean miserable. A great example of that is their attempt to compete with Amazon in AWS. It started trying to compete with AWS at exactly the same time as Microsoft.

That's Columbia Business School professor Jonathan Knee. He's also the author of the new book The Platform Delusion. Who Wins and Who Loses in the Age of Tech Titans. You're listening to Bloomberg Business Week. Up next, we stay with the tech industry, but move closer to cybersecurity. This is Bloomberg. You're listening to Bloomberg Business Week with Carol Messer and

Bloomberg Quick Takes Tim Stinovich from Bloomberg Radio. It seems like each week we learn of a new hacker attack on some computer network, whether it's on a pipeline at meat processing facility, the subway system here in New York, or even the u N as we learned just this week, we spoke to Wendy Thomas, the CEO of the global cybersecurity company Secure Works, just as she was appointed CEO.

This week she's book with me and Bloomberg's Katie Greifeld Well, always feeling great about leading an organization that does such amazing work. Secure Works is all about securing organizations globally, and frankly, it's just a privilege for me to continue to fight the good fight with secure What do you

see as the main challenge right now? Not just facing Secure Works, but facing each and every company that operates right now in a world where it seems like each and every day we hear new ransomware attacks, new cybersecurity threats, and companies essentially being taken to their knees. Were ransom You've absolutely hit on one of the prevailing trends in the security space. And you know, it's easy to take away from all these headlines that the attackers may be

winning the fight. Frankly, we see many threat actors now frankly offering ransomware as a service and so for you know, hud six dollars, you can purchase hacking tools on the dark web, and when the barriers to entry are low and the rewards are high, you see proliferation of this type of crime. In fact, the ransomware payouts in globally alone we're about twenty billion dollars. So that is a

top security concern for all of us. The stats show that there's a ransomware attack on a business every eleven seconds. So these attacks are, as you said, hitting closer and closer at a home for all of us, as supply chains and food and gas are disrupted, and we see headlines as business leaders and feel a responsibility to protect our organizations going forward. And here's the thing. It's such

an opportunistic crime. It can feel when you're attacked that you were targeted, but frankly, they're very rarely targeted at a specific company or even an industry. They're targeted at companies that are an easy target. Let's talk about that, the fact that it is opportunistic, that it's not necessarily companies being targeted or singled out. I mean, how should businesses take that information that it is opportunistic? How do you even protect your business against that? What you want

to be is a very expensive and hard target to hit. Right, Ransomware is all about a very lucrative criminal enterprise. And so if you set the foundational protections in place in a business, it is not complex, but it is it is diligent to protect your business with good security hygiene, strong passwords, multi factor authentication, being very guarded about your I T admin. Right, those are great ways to prevent the easy entry. Because companies are are really only as

strong as their weakest link. Right, That adversary only has to find one crack in the armor to get in, and so we believe that you have to do everything you can to be a hard target for them, and it secure works. We also believe that eventually they're going to find a way in some some employee will probably click on that phishing email. So you've got to have complete visibility to detect anything and everything across your digital estate.

And then, because speed is of the essence, you've got to have the ability to contain those threats in an automated way before real damage can be done. So, if it is inevitable that someone will gain access to a company network, what's the next step that the company needs to take to minimize damage. That's where the ability to be prepared for when when they're in and so that the time to detect them has to be absolutely rapid. And then the ability to have a platform like the

tageous platform that Secure Works has. It tells you what good looks like. Right, it says this has happened, this is who the threat actor is, this is the asset they're targeting, and it's important to your organization click this button. It's time to contain this threat immediately. So it's that mean time to remediation. That is, it is important so that that threat actor doesn't have the time to get to a place where they can deploy that ransomware and

cripple your organization. We've really seen a proliferation of attacks over the past few months. I'm curious why now, why

have we seen just such a uptick in hacks. I think for a combination of of an increase in hacks, and certainly the shift to remote work increase the attack surface in the midst of the pandemic, and there were opportunistic opportunities for those threat actors to also use the fear or lack of information around the pandemic to create different kinds of attack vectors phishing emails around vaccine answers

and that kind of thing. But I also think that the impact of those has been much larger, impacting everyday citizens like the pipeline attack, and because of that, the headlines and the focus of of even government has increased as a result of that. Wendy, whenever I'm talking to a cybersecurity expert someone in a position like yours, I want to ask, yes, about what companies can do, but

also about what we can do as individuals. I mean, we carry around these phones with so much information on them. We have our email accounts that you know allow us to reset passwords if we forgot a password. What is the best way that we can think about protecting our own, per small data when it's out in so many places.

What are some best practices for us? Well, first of all, I say that security is a team sport, right, and so one of the things that's important to Secure Works is increasing cyberliteracy generally, because if you make yourself again a difficult target, then the likelihood that that you'll be opportunistically targeted is lower. But your information does have value.

Your your contact, your banking information, and to the extent that you don't put multi factor authentication in place around your particularly banking or other sensitive information or application access, you're creating unnecessary exposure strong passwords, not your dog's name, not your anything around your family. So there's just the same kind of hardening of compromise and access that companies need to do, the same thing that individuals need to do.

And frankly, just be aware of where you're putting your information, especially on a public computer library or such, and that kind of awareness and vigilance will help keep you safe. Okay, well, I definitely need to go update a few passwords, but I do want to get a check on the secure Works business because you took over effective as of September three. Secure Works reported earnings on September two, and they were

a little bit below analysts expectations. Both second quarter revenue and the forecasts going forward for the third quarter and the fiscal year. Revenue below what analysts had been expecting, and the stock is still up about eight percent, but definitely a rough week yesterday, plunging about for the week. So Wendy, I know you just took over. You're still getting the seat warm, but I'm curious, what's your priority

going forward? How do you right the ship? So we actually have the right answer for today's toughest security challenges. And inside of the secure Works business, which was founded about twenty years ago, we first started this fight with

really a services based approach to security. And as we've talked about, because of the technology evolution of the tools and threat actor's hand and the pace of this fight and the need for automated, rapid machine learning fuel detections and orchestrated remediation to prevent the kind of massive breaches and costs that we see in modern times, about four years ago we started to build a modern security platform called Tageous that is all about taking that full detection

and response automation capability and putting it all together in a way that can solve the real security challenges of today. That business inside of secure Works is total services business is actually growing incredibly fast. Two and second quarter over

last year hit a hundred million. Are are just two years after we launched the solution, and so while we are shifting away from some of the services that we previously offered as part of the total revenue, the right answer and the true value for customers in the security space is this emerging XDR platform and that's a ship

we're gonna keep sailing. I'm wondering about breakdown of revenues in the fiscal year one where we are now revenue comes from managed security and threat intelligence comes from security and risk consulting solutions. How do you want to see that mixed change? We would like to see our XDR solutions are tageous solutions be about of our total revenue, and we shared that as a long term model. When you say long term, how many years are you thinking here, well,

we don't have an exact number out there. That that's a that's a few years out. And I think the importance of continuing to provide some degree of consulting services to help customers really mature their security program is an important overall part of the business model to keep them secure. And so, Wendy, you made the point earlier that the attacks that we've seen they haven't been targeted. They've been

more opportunistic in nature versus companies being singled out. But I'm curious, have you noticed any industry, or any type of country or not countries company being particularly vulnerable to ransomware attacks. We absolutely have seen certain industries that are more vulnerable. If you think about where the security adoption started many years ago, financial services companies were a lucrative

target and they had a lot of compliance requirements. They became security hardened very quickly, and you don't often see them in the headlines today. What you see again are those unfortunately easier targets. So you see now unfortunately educational institutions, universities even k through twelve school systems under attack, or manufacturing companies who have had to go through very rapid digital transformation and so their exposure of their attack service

has increased. We unfortunately see that those organizations, if they have not partnered with someone like secure Works to help put that security in place, they are quite vulnerable and often successfully attacked that Secure Work CEO Wendy Thomas. That wraps up the first hour of the weekend edition of Bloomberg Business Week from Bloomberg Radio. I'm Tim Stanobek. Coming up in our next hour, the CEO of lands And joins us to talk all about the struggle to find employees.

Plus we talk gender diversity with the CEO of Heineken USA. 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, Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio. Hello, I'm Tim Stanebek.

My co host Carol Master is off this week. Plenty ahead in our second hour of the weekend edition of Bloomberg Business Week, just as kids head back to school and retailers start thinking about the holiday season, we're going to hear from the CEO of lands end Us. The CEO of Honeken USA joins us to talk all about gender diversity in the beer business. All of that to come, but first up this hour, the classic pay phone. Think

about what it evokes. For so many years, it was really the only way for any of us to communicate with one another when we weren't at home or when we weren't at work, but with smartphones nearly everywhere, it's relatively rare that the pay phones that are still out there are even used. Joined by my colleague Ed Ludlow, I heard from David Dudley, a writer for Bloomberg City Lab, who profiled a photographer who's working to document surviving pay phones.

So I spent the day with a gentleman named Eric Kunzman, who is a photographer and a photography professor in Rochester, New York, and a couple of years ago, he became sort of fascinated by the fact that it seemed like the neighborhood that he had moved to studio too was was full of payphones, and he hadn't noticed that in other parts of town. This is sort of a lower

income part of Rochester. And he started um to this sort of take images portraits of the payphones that he saw in the neighborhood, usually in front of convenience stores and gas stations. And this sort of expanded into this sort of a kind of a global quest that he has launched to document every single payphone and Monroe County, New York. I'm a Londoner, right, I think phone box, I think iconic red phone box. I think tourism. But as part of this process, what exactly what do you

learn about any neighborhoods given phone box? What does it tell you about the economy, about the people in that place. Well, Eric sort of theorized that some of these these phones were basically just sort of forgotten. They've been sort of installed in the nineties or earlier, and because no one had renovated the building that they were attached to, or no one had bothered to call the phone company and say, hey, could you remove this thing, the machines themselves has sort

of persisted. So was sort of like a geography of the more sort of economically left behind parts of the city. And as part of his project, he sort of mapped all the phones across the county and overlaid that with with economic data and other information. So he became sort of interested sort of what the the whole kind of social, kind of geography of telephones meant um, which sort of made this more than just sort of an aesthetic project.

It was sort of a social documentary. I do find that the the idea that this is based in Rochester New York just fascinating. As you point out, it was the home of George and Eastman, the founder of Eastman Kodak, and at its nineteen seventies peak, the photography giant employed about fifty thou people and fueled a quarter of the

city's economic activity. It's absolutely a different picture in this day and age, David, And I'm wondering the juxtaposition of that and the symbolism there that this project is being done on film, first of all, uh, in in a place where Eastman Kodak was for so long the stalwart of the economy. Yeah. No, I mean it's that's sort of part of the conceit here as a sort of this convergence of of obsolete technologies, uh, that that Eric really still finds value in. He is a he is

a film photographer, die Hard. He has sort of a a shrine to Kodak film in his studio. So he's shooting these things on an old half of Black Cameron film, using the this this product that is so associated with with Rochester and with the wealth that sort of built the city, and it's sort of part of his his his sort of thesis that there is value in things that that that might not be cutting edge technology anymore, but are still useful and still still serve different people.

They're really encouraged Bloomberg Radio listeners to go on Bloomberg dot com onto the Bloomberg terminal and look at the actual photographs themselves. As Tim said, short and film. But there's something missing from every single photograph. There are no people in any of the shots a tool. Why is that? I didn't want you to sort of think about who who is using the phone. He wanted you to sort of leave that to your imagination because really, you know, and those of us who are out in age when

we uh use payphones more regularly. In the eighties and nineties, um, it was a public amenity. Everyone used the payphone, and now it's sort of perceived as something as a communication device of last resort for people who really have no resources. And he really wanted you to think about who who might need that phone. And uh so it's this sort of gallery of of of unpeopled landscapes where you sort of see the phone as part of a kind of

a streetscape. But yeah, there's no there are no people there. They're they're used sometimes, He's he's got data from from the telecom that still operates them that says that you know that most of these phones are used a couple of times a week still. Uh, the handful that are still working, a lot of them are just sort of corpses. They're their handsets are broken, the inside has been removed. But some of them still work and and those that do still do find people who need to use them.

What did the company that oversees these phones, that these phones belong to, Frontier tell you about the status of the phones. It's not really a priority for your communications right now. This is a telecom that is, you know, pivoting to fiber optics and you know, cutting edge technologies. But it also happens to have about fifteen hundred of these phones scattered around the county. It's unlikely it's a major profit center. Let's just say it's a it's a

it's a very very declining business. There less than a hundred thousand pay phones across all of the United States, probably a lot less. And uh, you know, it's it's very much a a part of the telephone tunations business that has has really been left in the past. That's David Dudley from Bloomberg City Lab. You're listening to Bloomberg Business Week. Coming up, we explore the pandemics impact on learning trends for women with an executive from Corsera. That's next.

This is Bloomberg. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes. Tim Stinovik from Bloomberg Radio. It's hard to believe that students going back to school are entering their third year of class as a mid a pandemic, and it's unclear at this point what exactly things are going to look like when it comes to remote versus in person learning. Corsera is a company that has been working on online education for nearly a decade,

way before we were even talking about the pandemic. The company works with hundreds of companies and universities to offer professional development courses. And we spoke to Dr Emily Sanz, the vice president of data Science at Corsera, on what learning trends we're seeing, and of course on the impact of the pandemic has had when it comes to online learning and skilling. You know, brief contexts on Coursera bit

to situate the report. We were co founded by Professor's Daphne Caller and Andrew ng really with the mission to provide universal access to world class learning, and we believe new skills can open doors to new opportunities for folks from a range of backgrounds and giving more women around the world access to top quality learning, including in stem and digital fields that are fast growing in the labor market has been a big part of our work since

the beginning, inspired in no small part by by Daphne's leadership. So the report was really inspired by the macro labor market trends we've been seeing amid the pandemic in particularly with UM women dropping out of the labor market UM and the unemployment crisis UM that has disproportionately impacted women, And so we took a look at how was that feeding through to their learning decisions UM and what if that imply about where the labor market might be headed?

So emily, what are the skills that women are looking for when they turned to online learning? Are they turning to change jobs? Are they trying to get ahead and the jobs they already have? Yeah, so you know, we are seeing overall women turning to OurMine education at higher rates than pre pandemic and actually their growth and online learning UM is outpacing that of men during the pandemic, So that means the gender gap in online learning is starting to close. UM. This is a worldwide trend, but

it holds through to the US as well. UM. And one of the things that's really striking, you know, you can look at overall course enrollments from women. They're increasing from about in to in Almost half of all course enrollments now are coming from women. But I'm party to see that this includes really strong growth in female enrollments in STEM courses and an entry level professional certificates, so

some of the most job relevant content. UM. To your question, we do see women looking to advance in their current careers, especially those that are already in technology oriented fields like data and computer science. UM. STEM course enrollments in the US from women increase from about pre pandemic about um in this year. But we're also seeing a lot of women investing in online learning in order to transition to new careers. Especially entry level professional certificate enrollments for women

have really exploded. They were about seven of those enrollments for by women in and it's now a much healthier one as during the pandemic, women are looking to transition to those entry level roles. We saw with the jolts, the job openings and labor turnover survey that this imbalance just continues to exist between the number of jobs that are available and the number of people who are unemployed. They're not necessarily meeting there is there is this imbalance

that still exists. What is your data tell you about the way that people can use courserah coursework to actually get that job and be qualified for that job that's out there. It's a great question, and I think that's actually a lot of what we're seeing with this growth in global enrollments, but especially in female littlements. Right, many people, but in particular women, dropped as the labor market during the pandemic, including to care for children and other family members.

They anticipated wanting to go back to work when childcare and other family constrains ease, and they know that developing incremental job relevant skills now can help them do that, can help them re enter the workforce in a better position than they left. And this isn't just about the pandemic um There are more and more jobs that are

requiring digital skills. Digitization of a lot of customer employee workflowes have certainly been accelerated during COVID and and so while women have on average been very busy during the pandemic, I have two little ones myself. The business is real. They just sunfortunately managed to make the space to develop these new skills, to prepare them to re enter the labor market and potentially to even re enter in newer and more rewarding positions. Are faster growing and more lucrative

than their former roles. Um and you know, really meeting that increased demand for digital skills. Tell us about who has been taking cours, error courses and how that's different from what we saw pre pandemic, and how that's evolved, Like like who is the ideal you know, user of the product or typical I should say, not necessarily ideal typical. Yeah,

so our learners are very heterogeneous. We actually have just shy of ninety million registered learners on the platform, including over sixteen million from the from the US, and I would say that during the pandemic, we've seen a couple of major shifts in the composition of those individuals, although they continue to be very diverse in their backgrounds and goals.

And interests. One major change has been, as I mentioned earlier, UM disproportionately women joining the platform to learn across the board, but especially in STEM and preparing for digital jobs. And then the second big shift we've seen is increasingly folks coming to Corsera not just to upscale in their current role, but actually to prepare themselves to enter new jobs, including

entry level digital jobs. I think things like, how do I become a Google I T support special, how do I become an entry level data analysts, social media marketer, a data engineer UM. You know, early days of Coursera, a lot of the folks who joined the platform with folks who already had advanced degrees, including graduate degrees. Now, increasingly we're seeing people coming in who are in blue

color jobs. Their work is being disrupted with increased automation, and they're looking for UM that gateway certificate program that can really be their foot in the door to an entry level digital job. And that's been awesome to see. We serve A learners, we asked them about the outcomes

they're experiencing. UM. The vast majority of report positive career outcomes improving their performance at work or selecting a new career path and where we see the strongest outcome is from those professional certificate programs, especially the entry level ones, which are again aimed at preparing folks for those entry level digitals. So a question about this, how much is this replacing people need to go back to professional schools.

The reason I asked that is because we're sitting here in a country where so many people are saddled with so much student debt, and there's a lot of questions about whether we can recreate the model so that school training gaining skills is both more affordable and most useful for the workforce. So are people doing uh, professional certificate

programs rather than going back to school? Absolutely, And you know, we actually have a range of learning programs from individual courses to professional certificate programs all the way up to full diploma bearing degrees. But you hit the nail on the head that it needs to be one affordable and then too flexible. Right in today's world, learning can and should be done on your own time. You can take a class from the world's best instructor as well you know,

cooking dinner or driving the kids to the park. And when you have to do hands on applied learning, you know where you really need to be at a computer, you can also do that on your own time and whatever little talkts you can find for you. And so I do think a lot of it is is cost reduction, being able to access this without um going into serious

debt um. But there's also a real component around being able to continue to live your life, keep your job, be with your family, and progress in your career through online learning that thank and unlock a future career opportunity. That's Coursera's VP of Data Science, Dr Emily sans So to come on at Bloomberg Business Week. Back to school means it's time for back to school shopping. We're gonna

hear from the CEO of lands End. 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 to San Francisco, Bloomberg nine to the country Sirius XM Chamber one nine and around the globe the Bloomberg Business and Bloomberg Radio dot Com. This is Bloomberg Business Week with Carol Messer and Bloomberg

Quick Takes, Tim Stenovan on Bloomberg Radio. Lands End sees sales rebounding his in person classes resume, underscoring the broad strength that retailers are seeing in the crucial back to school shopping season. Jerome Griffith, the CEO of lands End, joined Ed Ludlow and me this week to give us an update on supply chain challenges and how the company has had to raise wages to find workers even prior

to the pandemic. One of the things we wanted to do was to sort of spread the risk we have been producing about our products out of China up going into and we get to to expand that out into other countries so that we weren't really dependent so much

on one country at all. What's happened to us over the course of the last let's a year to year and a half is that products getting into the States have started to slow down dramatically and costs have really risen, not just costs on shipping, but costs on raw materials. So you see cotton costs and we do a lot of cotton um rising pretty significantly, But then you look at just the cost of shipping things from any country here, whereas containers three years ago, we're costing around four thousand

dollars a container. The last six months, they have been up in the twelve of the fifteen thousand dollar arrange, and I've heard quotes as high as twenty five dollars for a container. And the same things happened with airshipping, not that we ship a lot by air, but but

those costs have been going up as well. So you know, we will continue to look at expanding our network to make sure that we have a little bit more options than than just going to one, two or three different places in order to get get products made and shipped. Such a pleasure to have you US. I love speaking to the retailers because you you have such a lens into what's going on in our US and global economy. You know, supply chain one thing. I want to talk

a little bit about the labor market. You know how it lands end dealing with a pretty tight labor market. I mean, how are you staffing stores, facilities? You guys seem to be seeing some growth now in e commerce. What is the priority for hiring? E commerce really runs out of our corporate office, and that's of our business.

So that's been running along relatively well. UM for the last two years, our core businesses, our US direct e commerce business, and then if the ad on the international businesses and the B two B businesses which we do online UH, it creates you know, quite a large, large annual volume what's happening with with these businesses. And we've been able to hire people because you know, we're an interesting company and the company is also doing well, so

you know, that tends to attract people. Where we've where we struggle somewhat is just logistically how we ship goods out to UH customers. We are based in Wisconsin. We have three major facilities there and we're a major employer in southern Wisconsin. What you've seen with the labor market as of the last six to nine months is people aren't working as much, so it's been very difficult to entice people. We've given two raises so far this year.

We've put on peak peak incentives for people to come into work, and we've had people working, you know, over time just to get the goods out the door. What we're we have just made it through our back to school peak, which actually worked out okay for us, and we'll be going into another hiring phase and it will be determined. You know, what of the people that have been getting unemployment and staying home are going to be ready to come back to work for the unemployment stops?

Do you think they will be the day in most places? I think so and I hope so. But I have learned in the last year that I don't know when you say you've had to raise wages twice, what are we talking about here? Where are they right now? Depends on your your average. We've raised raised them through between three and four percent in May and another percent and a half just this past month. Um and obviously starting salaries are over fifteen bucks. So you know, we've been

doing the right thing by the market. Uh, And the market really dictates, you know, what you need to do for the people who have been with you for a long time. Because we're a fifty eight year old company. You know, we've had we've had people that have worked for us for thirty five years, and you know, very loyal employees, and you want to make sure that they're happy. Sure, I'm a brit acclimatizing into life in the United States, so I kind of asked this hesitantly, But should we

talk about the holiday season? Jost approaching. Everyone keeps telling me fast approaching the holiday season. How's it looking from your perspective? I think the holiday season is going to depending on getting goods here. Um. You know, this would be my forty three Christmas since I graduated college, and everyone gets just a little bit harder. But um, what we think, And you know, we've seen pretty good demand coming up until now, we haven't seen a huge slowdown

in demand. We think the man is still going to be there and every year, you know, it ends up coming coming around because people always end up going out shopping for for Christmas. I think the people that are going to win, and this is our mentality, are the people that service the customer. If you're servicing the customer, you'll win. Yes, maybe your cost might be a bit higher, but as long as you can serve as a customer and keep them happy and keep them coming back, you'll

continue to win. As a brand. How early do you want consumers to order from you for the holiday season? You know people start now. Uh. And we saw it last year, and we saw it for back to school this year. You know, people started early, ordering early and

back to school and they started ordering more. UH. And my sense is the same thing is going to happen this year, is that people will shop early and they'll want to buy more because they've had ten up demand and they have good savings right now and people will want to spend. That's Lands and CEO Jerome Griffith. You're listening to Bloomberg Business Week. Coming up, we're ending the week with a beer and a look at how the booze industry is working on gender diversity. We hear from

the head of Heineken USA, Maggie Timeny. That's next. This is Bloomberg. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovich from Bloomberg Radio. Here at Bloomberg Business Week, we we talk a lot about and we record a lot about gender equity when it comes to representation at the top companies in the United States, and that's the top companies in the world. Well, the gender diversity in the alcoholic beverage industry has historically

been not so good. It's been male dominated. But one company is trying to shed a little light on that and changes that have been made in recent years. That company is Heineken U S a and we have Maggie Timony joining us, now chief executive officer of Heineken USA. She joins us on the phone from Connecticut. I was joined by my Bloomberg Quickday co host Katie Greifeld. So, Maggie Haneken USA has a new white paper out titled behind the Label Gender Diversity in the Alcoholic Beverage Industry.

What prompted you to take a deep dive into this topic? Hi, tim how are you good? Afternoon greetings from Connecticut. Yes, we are. You know, I'm a woman, uh, and I've been in the alcohol beverage industry for many, many years and I looked around the room over the years and

I don't see many diverse faces. So Heineken USA it took a leadership position on God with a cohort of senior females across alcohol beverage and we had a discussion and we said, you know, it's really incumbent upon us to highlight the path and pave the way for the future generations of women. And I think, you know, it's easy not to do anything to raise the profile of highlighting path for females and our in our future females

in our industry. But we said it's incumbent upon us to take on that task and put it firmly on our shoulders. And so how do you do that? I mean, is that through recruitment or advancement for women already in the industry, or I imagine some combination. I think it's a combination that two things. You know, when consumers look at and the think about Heineken USA, they think about

the brand, and the same with other outbad companies. So I think we need to ensure that we market the people behind the beverages and the actual industry behind behind the beverages. These are these are fully blown businesses with P and L's and breweries and marketing departments and finance departments and HR departments and sales departments, et cetera. That's number one, let's market our industry for others. Number two,

we need to elevate our recruiting programs. We don't do enough to ensure that we have a breadth and depth and scope of coverage across you know, different universities, and to highlight in particular to females. You can have a big opportunity and alcohol beverage at the same time. Katy I think we also need to level the playing fields to ensure that we're very flexible in how we show up at work and where and where you can work. You can work from home, you can work from an office.

We need to highlight that to all of our future talent. Give us some numbers here, Give us some data about what you found in the industry and how it compares to other industries, because I think it's fair to say there are many industries when it comes to the corporate world that are dominated by men. Yeah, when we look at the recent studies, the percentage of women and see sweet roles across the marketplace remains relatively smaller. We all

know that it's sort of a tent. When we look at women and sea sweet roles and food and beverage, it's a little bit lower at twenty percent. However, we look at women and see seat rules and food and beverage distribution, it's just ten. And you know, I mean you look at generals the sweet roles, we know that it's dropped from two. So you know, we talk a lot about gender diversity and you know, females and their careers, but the numbers are showing that we're actually going in

the wrong direction. So how do we sustainably bring these numbers up and kick them up and then build off that base. That's our challenge across all industries and in particular focus on outbets. And so, Maggie, you mentioned that the numbers are going in the wrong direction. I'm curious what role the pandemic played in that, because obviously it's been a while since myself has been at a at an in person conference just meeting people organically to network.

How does that factor, and that we've all been virtual for really a year and a half. Yeah, I think, you know, if I would if I can link that a little bit to mentorship and ally ship. Um, you know, when you look at females in the workplace, we need to be more flexible because our female voice is not heard when you're not in the room. And I think being virtual has not helped females in terms of their

progression or even staying in the workforce. So how do we move away from mentorship and and move towards ally ships so that when you're not in the room, somebody is speaking and your voice is heard v as somebody help, v as somebody else on your behalf and at Haneken USA. I just want to say that you've done we we you know, over ten years ago we launched the Women's

Leadership Forum. We have forty eight percent females at Heineken USA and globally for Heineken, we're looking to increase to thirty percent female of females in leadership positions senior leadership positions by twenty thirty. We have made that commitment. What's interesting because I look at your website and in preparation for this interview, and something sticks out to me. Um brands that are about substance rather than status, social rather

than exclusive, personalized rather than mass. That's what you consider your portfolio of quote upscale international brands. I'm wondering how this report dovetails with the identity that you want consumers to have when they pick up a Heineken or when they pick up a dose a Keise or an Arizona

Sunrise Heart Seltzer or one of your emerging brands. You know, and let mean you know we are a family owned company, Heineken globally and I'm not sure if you know this to him, but we are majority owned by the Heineken family and Charlie Heineken is our is, our owner and our founders. So we we put a lot of focus and we put our money where our motives when it comes to gender diversity and inclusion and diversity globally at Heineken,

so we ensure that our advertising include diverse consumers. Because our brands are consumed by their first consumers. We ensure that our agencies are diverse. We ensured that the communities in which we operate that we give we provided diverse lens to all of the philanthropic efforts that we make. And so, Maggie, Heineken you know, matches its words with actions. But again I keep going back to your point that at an industry wide level, the numbers are going the

wrong wrong way, the gender disparity is getting worse. How does that reverse? What would be the catalyst to to actually make the numbers go in the right direction? And how long might that take? You know what? It really could take a long time, Which is why were we at Heineken USA, together with other across the industry, other senior females are launching this campaign to look behind the label.

We want to showcase our industry two people to consumers to showcase swat what's behind the beer they're drinking, what's behind the wine they're drinking, what's behind the spirit spirit they're drinking because there's a There's a lot of fantastic people who love this beautiful industry, and I were so proud to work for this industry, and many who have left the industry always say, oh God, I really want

to go back, so behind the label. Our first chapter in our book is to showcase the people behind the industry so that our consumers and society at large can look and say, I admire that industry and I want to work there. I want to talk a little bit more about the business and get an update on you from the business. Many people may not know that Heineken USA is the parent company of Red Stripes, Strong Boat, Tiger, and Still Light, among many other beers and and spirits.

I wonder about emerging areas. I wonder about innovation. Where are you really bullish? Where are you seeing growth? You know? I think, um, you know, years and years and years ago, it was the bigger brand, largers and consumers were happy with that. I think with the advent of social media

and there are really no boundaries between countries anymore. You know, there's no geographic boundaries because people are on the phone, iPad, surfing the nest and and they're experiencing brands in different ways, and and people can say, well, that is that a big challenge. That's really that's really an opportunity that we can take our global brands from around the world and have them show up for our consumers in their locale and how our consumers want them to do. Out number one,

number two, we have a huge opportunity to innovate. The lines for consumers are very very blurred and what they're looking for in the product, whether it's be lower calorie, lower alcohol, or what their own Heineken zero points there are no alcohol. We need to ensure that we are innovating and innovating at speed and being extremely agile and nimble to deliver for comes for our consumers what they want.

And consumers today Tim and Katie are very promiscuous. They're going to try a plethora of different products, and we need to make sure that we are adapting and being

fast to market to satisfy those consumer needs. Hey, just in the last thirty seconds we have with you, Maggie, you pique my interest when you talked about the no alcohol beer, the Heineken version of that, what type of growth are you seeing there, because we have spoken recently to the CEO and founder of Athletic Brewing who's raised a lot of venture capital money and sees growth just off the charts in about twenty seconds. Yeah, we come.

We we are still seeing in your three double digit growth, high double digit growth um and a lot of new consumers actually coming into the beer category. And it was just fantastic that week that our brewers took twenty years to develop what I think is the perfect product, Heineken zero zero. Please, if you haven't, try to go out and try it. It is phenomenal. That's Maggie Timony, the head of Heineken USA. And that wraps up the weekend

edition of Bloomberg Business Week from Bloomberg Radio. Thanks so much for joining us. I'm Tim Stanovic. Be sure to tune into our Bloomberg Business Week Daily show. It airs Monday through Friday and starts at two pm Wall Street Time on Bloomberg Radio. You can also watch our daily broadcast on YouTube. Just search Bloomberg Global News. Also check out our Bloomberg Business Week podcast. You can find it at Bloomberg dot com, Apple, or wherever you get your podcasts.

Bloomberg Business Week is available on newsstands, now, at bloomberg dot com and on the Bloomberg Terminal. You can also see me at Bloomberg. Quick Take available on bloomberg dot com, slash Qt, and streaming platforms like Roku, Apple TV, Samsung TV and more. Have a great weekend. This is Bloomberg.