China and Tech and Big Tech Earnings

navigate this new era? Plus a huge earnings week? Alphabet, Amazon, Apple, matter to name, but a few will break down what to expect and after Washington's moved to reclassify gig workers, what happens to Uber to Go Pass. Of course, the Silicon Valley, we dive into the fifteen billion dollar delivery

arcket that's on the brink. We'll get into all of those stories in a moment, but first let's get you up to speed with the relationship going forward between US China what it means to some of those companies that try to cross that rubicon. Let's talk about it all now on the impact of the changes in China and particularly let's look at the chip sector, and with one

at Debbie Wu Broomberg's who's usually based in Taipei. We are so thankful that's just right now in the United States and your expertise here, Debbie, at this moment with companies such as TSMC trying to navigate this new world order of the relationship that is disintegrating between China and the United States, and and an international investor that worries what on earth this new consolidation of power means for companies trying to work their way around just talk us,

for example, through your breaking news story you had over the weekend of what TSMC is trying to do. So we have seen that needs said that for US export control rules have impact not just on American firms but also well foreign companies that have business relationship with China's of what we reported over the weekend is that t s m C has stopped production for this Chinese AI chip.

Stop bearing because based on public domain information that Bearings products actually outperform and medias A one hundred chips which is now banned for the Chinese market. So it's really interesting to see that the foreign companies now I also have to follow the US rules like they did back a couple of years ago when the US blacklisted Huawei. So a lot of companies are kind of their business

ties with UH Huawei. And then what's happening now is also UH companies are sort of tightening China's access to layer technologies or their products. And we have seen all the Dutch equipment supplier SML also told it's US based staff to UH hold their services to Chinese customers due to a listen new US regulations restricting US persons from

open without China's chip industry. Given the news that uphended the market, that this consolidation of power in China, that's focus on well perhaps moving away from such growth tech names, the fact that we saw Ali Baba for so much,

But what does that mean for the chip sector? Do you think, Debbie at the moment, So, following the US announcement of this new set of rules, chip stocks have plummeted and we have seen the Fildelphia Stock Exchange Semiconductor index fallen up more than four the percent this year, partly due to of the new curves and partly due

to the growing head winds in the chip sector. So I mean it is going to be quite challenging for the chip companies to navigate this UH growing up, weakening demand amid high inflat high inflation environment and also potential recessions UH and also given the reflections for their business in China, I think it's going to be quite challenging. So we're here more about this ub with Texas Instruments and Intel giving their are earnings and also forecast later

this week and therefore going forward. Are people starting to say to you these negative headwinds, whether it be a relationship and more difficult business being done with China, whether it's the curbs of the US put in, whether or not it's just a slowing fundamental story that's happening in

terms of where we are in the chip cycle. People started to say that this is priced in some way or not yet I think it's a really sort of like a conversions so for these different sect these elements, so it's hard to say that, Okay, so the chip chips company, chips companies are taking a bigger here from certain things, but it's more like these are UH, different elements are putting up growing pressure on the earnings and themselves of chip companies around the world. Yeah, we keep

a close eye on this week. Of course, the Texas instruments and Intel w we thank you for your expertise them. Meanwhile, turning to some of the changes and the look ahead to one key play, Apple's got its earnings, but it has some interesting news and who helped write that was one Mark? Mark talk to us about, well, the inflation that maybe Apple is serving us up at the moment. Yeah, So a few Apple services, actually their main ones, all

got price hikes this morning. So Apple TV Plus that we talked about often, Apple Music, and Apple One subscription bundles, where TV Plus and Apple Music are obviously at the

forefront of their streaming packages, right. So Apple Music is moving from ten dollars per month in the US to eleven dollars per months, so at ten percent price increase, Apple TV Plus moving from five dollars a month to seven dollars a month, and the Apple One bundles those are rising between two and three dollars depending on what packages you get, so in the mid teens, up to thirty three dollars for that highest end package we can

get gaming and news and whatnot. Apple saying this has to do with higher costs for licensing related to music, and then the TV plus front. An Apple TV Plus launched in the company correctly says that there were basically no shows are very few shows at the get go now TV plus has dozens of shows. Still no back catalog, but certainly you're getting more bang for your buck now than you did before, which means they're now raising those

prices and we saw the impact. Don't say the stock of Spotify w many now preempting they might pass on some of their prices to the consumer as well. Talk to us about more what we expect from Apple's numbers as well out late this week. Of course, most valuable company, it's important to us. Yes, So analysts sticking to services believe that Apple is going to come in almost to twenty billion dollars right. Wouldn't be an all time record, right,

but would be fairly significant for a fourth quarter. That's for services specifically. In terms of overall, we're talking about between the mid eighty billions to low ninety billions. Those are the estimates I've seen between about five and eight percent year of your growth. Now, that growth is not going to be as significant as the year of year growth you saw a year ago. In the fourth quarter

that was about year over year growth. Obviously that was COVID induced more iPad and Mac purchases, but any growth given the current conditions of the economy is a pretty good thing for Apple at this point. One major thing you can probably attribute to that, however, is the iPhone four Team Pro and Pro Max line that you're showing right now on TV. Those phones have done especially well with some of the new features like the better camera,

satellite features, the dynamic island in the screen. People have been buying those up. And Apple got an extra week of sales for that device because they released it one week earlier than they historically do for new iPhones. So that's where you're going to see the growth from this quarter of a seasonality issue. In these endings, we thank you Mortgum, and let's talk about some of the dry

powder that Andrews and Harrow. It's has a lot of and it's putting it to work, betting on a key platform that's meant to perhaps allow founders in particular to access private markets more diversification. The coterie, which let's uses invest in funds and include companies like SpaceX or Stripe just landed forty million dollars in funding round led by A sixty and Z. Here to discuss it is the

Coachy CEO and co founder Ethan Ago. All Right, we wanted a little bit first and foremost remind people of your story why the Coachery was born, and it was through frustrations that you found as a founder. Right. Yeah, So I was the founder of a company called Active before this. We were growing. We did about a hundred million of revenue, and I turned off my salary and I went to apply for a mortgage and the guy says to me, we can't give you a mortgage. You

don't have a salary. And you know, I realized it's kind of silly, because most of the people that I know make a lot more money from their assets or their equity than they do from their salary, probably a lot of the people that watch your show. And so there's clearly a disconnect that's emerged between the way that the legacy financial guys think about risk and think about asked allocation and the way that me and everyone that

I know thinks about it. Because most of us make most of our money from carry or equity than we do from salary, and so we realize there's an opportunity to build financial products targeted towards people who make more money from assets than they do from their salary. So you're looking at an individual in a different way, at their own credit risk. But then you're looking at that individual and being like, I know you need diversification in

your life as well. Well. If you think about a founder, most of their wealth is concentrated in one specific, highly liquid asset, and anybody will tell you that's not a great way to manage your risk. So what we do is we provide access to invest in some of the best fund managers in the world, like Injuries and Horowitz, like Initialized, and it allows a founder to diversify their risk away from just their own company. We also provide liquidity.

We also provide a state planning. We're looking at all the different areas that founders need help in and where we feel like the banks have dropped the ball, and we're building products designed to help founders alleviate some of that mental pain that they have to experience when they try to deal with the legacy institution. Dare I say, at this moment where you're a one is a founder? Do they want to be doubling down in still private

companies given valuations are indeed under pressure. Yeah, so, um, it's key that their portfolio, Well, my opinion is that their portfolio is not just going to be privates, right, They're going to have a four oh one K, they're going to have public, They're going to have probably some crypto. Our pitch is not that we're trying to provide advice

as to how you construct your portfolio. Our pitches that if you want access to some of the best privates or some of the best managers, this is the place to get it, and you can really invest in Injuriesent Horowitz or some of these other funds managers that we have prior to the Coterie coming around, And so we're there as an access play as opposed to an advice player. How deep does this sort of democratization go because you're

focusing on a very specific sphere of investing. Yeah, today we target people with one to fifty million of oursets And what about Therefore, when you're looking at well alk is getting into the space of wanting to make venture investing more accessible to those who only have five dollars who wants in a credited investor are you looking at democratization to that level or are you still very specific? You know, we're focused on a specific band, but more importantly,

we're focused on a specific type of person. So um, honestly, the band is less important. It's more about how you make your money and what your ambitions are for the future. I think if you can get access through I think our arts partnership was with Titan, I think you can get access to them, that's excellent. But we're looking more at someone who has a comprehensive set of needs. They want diversification, they need liquidity because of all their assets

are tied up in an in liquid asset. They need tax planning because they're sitting on an asset that has potentially a thousand x appreciation and they haven't done any of their state planning. Those are the kinds of needs that we solve as opposed to someone who's looking to, you know, dip their toe into venture for the first time. A huge check to be written for a total addressable market, that is what is it? Yeah, so talk to how

how big is that? Because I'm thinking, well, this is a pretty un nique, relatively privileged part of society we have in the in America, there's twenty five million millionaires, about three million of them are under the age of forty five, and we go after people to forty five one to fifty million of assets, and so the end of people we're talking about as a couple million people in the United States. But the most important thing is

that the lifetime value of these people is extraordinarily high. Right, So we're not building Bank of America. We're never gonna have a hundred and fifty million customers. That's not the game we're playing. We're going after a very specific demo and offering them very specific solutions that are going to make their lives easier. And if we're right, and if we do a good job, they're going to stick with

us for decades. We're trying to build decades long relationships with our customers which will generate hopefully lots of lifetime value for them and for us. Because so at what point do you not how do you stop people checking out and having the family office or starting to move on to a different level of private wealth manager that I think it really depends on what they need. So if they like a family office, which provides a lot of things, we don't by all means, go use the

family office. We're looking for people who are struggling with the solutions that are currently available to them relative to what they want. And so if you're looking for access, if you're someone who likes to do your own investing or likes to think about solutions yourself, as opposed to someone who likes to give it to a family office and say, you know, I want someone else to manage it, there's nothing wrong with that. That's just not the space

that we're in. So if you choose to graduate there, by all means go ahead. This of course is a long term bet and new out building a business for decades, not a year. But how has the fundraising process been or how has your current outlook had to just cool down a little bit as the market cools down. Yeah. Look, first of all, this is my second time around, and it's a lot easier to start a company and raise

money the second time around. I also have two phenomenal co founders, both of whom this is their second and third time around. So I think, what what do we say? Is um, the market is still open, there's still dry padder to be allocated, the best funds are still investing. You just have to make sure that your story and your substance is tight. And what we found is, you know, some of the stories that were perhaps a little bit lighter that we're getting funded twelve months ago, maybe are

not getting funded today. But the ones that still have a lot of gravy tasks behind them are going to get funded. And in a way they're actually more attractive because that powder needs to get invested somewhere, and you know, they can't be sitting on the sideline, so they need

to allocate that powder into really good companies. And I think you've seen, you know, today and even in the last couple of weeks, the market's picking up and a lot of companies are raising reasonably large rounds Ethan, great house and time with you, Thanks for your time, Thanks for coming on of course the COACHERI, CEO and co founder Ethan. I meanwhile coming up, what is the bar for tech runnings this week? How low has it gone? Well to the point? Rod Erickson and BBC is up next.

This is back. This week is going to be busy, Apple, Alphabet, Amazon, Meta, Twitter, huge week for tech things springing obviously Capital markets Internet equity analyst Brad ericson Brad, Wow, I mean the bell Weather almost could have been Snap. How much you're reading the concerns about the advertising spend from Snap as a read across to some of the key players like a meta for example, Yeah, nice to be here, thanks for having me. So yeah, that's that's always the tough part.

Snap leads us off right in earning season, and I think the last few quarters it's safe to say they are not a bell Weather, um, so we're and frankly, when you think about the stocks and how they traded on Friday, right, so I think Snap closed down for the day clearly if you look at sucks like alphabet like Meta and the direction that those traded, I think I think investors are are not inferring Snap as that sort of canary in the coal mine at this point.

So okay, so let's dig it on Meta. For example, are you anticipating decent advertising commitment deefcent marketing spend still going through their platforms? Are you worrying about what the Apple out where them has done to them? Again? Um? Yeah, So a couple puts in takes and we just put out a report on this where we had talked to almost twenty five small and medium sized business ad agencies.

In the last few weeks, what we sort of heard was that, you know, number one, in terms of overall spend, things actually got a little bit better through the quarter. I think between things like lower fuel prices and maybe some consumer package goods becoming more available um from an inventory perspective, and then lower shipping and freight costs. I think actually that may have actually freed up a little

bit of budget on the advertiser front. So overall we actually heard things directionally got a little bit better on the algorithm front. Uh. Also on the positive side for Meta, we heard sort of what we'd called green shoots of positive development around the targeting algorithm and campaign performance. We were very careful to say though that we do think it's very early. We don't see this necessarily impacting revenue.

Uh certainly not in Q three, and it it probably is minimal and que for but it was encouraging when you think about Meta trying to restore some that signal they last from Apple, we do think that sets up as a potential till and in twenty three. Okay, that nicely drives us onto the Apple conversation because interesting that they're raising prices in services, were expecting a strong set of data coming from the services part of the business.

Where are you looking for Apple's growth trajectory? So I hate to be a big disappointment, but actually don't cover Apple, so I can't speak to the apologies. What do you make the therefore of the rad across? Therefore, what about some of the other social media because Apple is having such a knock on effect, not just on Snap, not just on Meta, but other players within the field. Let's talk a little bit more about the strength of social media in general. And I do believe that you cover Twitter.

Are we expecting anything particularly from their earnings there in terms of advertising commitment or is this just a more look ahead to what happens if the business is born. Yeah, so I think broadly for the social media companies, and we've heard this consider instantly in our advertising channel work over last year. The Apple signal, I hate to sound so absolute, but the Apple signal is never coming back.

This is never going to change now. The way when we talk about the potential to restore signal, we're not saying doing it in the old fashioned way the way they used to do it. They're trying new first and third party alternatives, and so I think whether it's pinterest or um or any of the other social media certainly YouTube we lump into there as well, and obviously you

have to talk about TikTok these days. I think all of those companies are looking for any sort of way, be at a first party solution, third party to try and restore that signal, and we do expect it to get marginally better over time. I think the issue is it's just going really slow here and we're still we're now through that period lapping when Apple started, still not going that much improvement. What about I mean, you have

Amazon at an outperform I believe, Brad. What about the advertising impact is that becoming any sort of residents at Verrir strength? Oh? Absolutely. I think you know, when you think about just going back to the Apple thing, that the segment of the economy that that really affected was small and medium sized businesses and e commerce vendors, and so when you figure those guys frequently also sell on Amazon,

that's been a huge source of strength. And we've actually talked to some of those aggregators and there's a lot of profit margin that those companies do make they're actually nicely profitable businesses, surprisingly profitable, and so they do have margin to be able to spend on advertising on Amazon. And we think Amazon is actually sort of working the site to be able to to uh not require but but in some ways sort of force a lot of those third party vendors to advertise more in to become

discoverable on the site. So yeah, huge driver, very positive for Amazon. Since those Apple changes hit, Amazon outperform, Meta outperform, Alphabet outperform. We look ahead to how those earnings shape up. Internet Equity analyst SABC Capital Markets Brad Erickson. Chinese presidence Seizing Ping has unnailed the country's new leadership lineup, and it twice a decade reshuffle. Powerful seven member polygara Standing

committee is led by Sea. The others include Shanghai chief leads former anti grafzar Jola Ze, former party Secretary at Chief walf Mee, Beijing Party secretary tight See, See's chief

of staff Dingo, and Guangdong leader Li Se. This final lineup has been beyond many analysts most extreme predictions, as it marks a clear break from the collective leadership model that's underpinned China's rise It's also a historic moment because it breaks so many norms, from term limits to early retirement, to age norms, to female representation Asian as well as

the resume prerequisites. For example, Shanhaiji leaves Young, who is likely to become China's next premier, does not have national governance experience, and for the first time in a quarter century, China won't have a woman sitting on its current twenty four member poly bureau, marking a major step back in gender representation. What these powerful men have in common is that they've shown the utmost loyalty to see any signature policies.

Critics worried though, that the move could present new risk for lack of opposing voices. Mh. This is Bloomberg technology. That was a broad look at the changes in China. Now, of course, the global ramifications went far and wide. Some of the Chinese technology giants listed not only in Hong Kong but in New York absolutely tanked. That's a technical term. On Monday, after Presidency's in paying its power grab, as it's being deemed the market meltdown followed a reshuffle in

Chinese running communist parties. We heard, but it means a solidation of control by she and Ludlow right here to talk about what were the moves that mattered to you most dead right, But we talked about the size and scope right The NASA Golden Dragon China Index biggest drop on record, closes at the lowest level since the Hang saying China Enterprises Index dropping by the most since two thousand and eight, closes at lowest level since two thousand eight.

But really the stat that stood out to me was this was the most severe, biggest drop in reaction to a Communist Party congress going back to when the index was first founded, right first conceived, and it gives you a sense of the angst and concerned that investors had, particularly about the technology sector under what a third term g presidency looks like. Under what this administration with new faces lacking economic experience, if not competants, looks like for

the technology sector. There's another angle to this too, coming into my Bloomberg term. Or look at this chart, which is the Hang saying China Enterprises Index at its lowest level relative to the SMP five since two thousand and one. There's a concern here about the value of the Czech tech sector in China what jumps out of me as well as the data around foreign investors selling out of

China assets. On Monday, around two point five billion dollars of mainland shares via the trading links with Hong Kong was sold Monday. That's another record going back to when they first started tracking the data in two thousand and sixteen. Foreign investors concerned. There's also tied together with what we saw from Tesla cutting prices in China and now raising

questions about the demand in that country. But they also announced that they would raise manufacturing and reading across the analyst reaction, the expert reaction to this move by Jijing Ping. One of the pretty firm reactions is that we will not see an end to COVID zero and some of the restrictions in that economy. That's a concern for Tesla because most recently fifty output is coming from its plant

in Shanghai. How will they navigate that and what does it mean for the strength of consumer in an economy that's serving size of cracking shorter term concerns, longer term concerns That Ludlowy does it all for us, We thank you. Meanwhile, let's talk about well, what it means to be navigating what are becoming less and less global stories in what I'm meant to still be global markets, tensions, global advisors all bright Stone Bridge Group principle Amy Selco is with us, Amy,

your perspective the biggest risk at the moment. We heard a listening sort of laid out by ed there. But is it short term in nature? Is it like a COVID shutdown? Or is it more broad and long term

in nature? Now on the seizing pains next decade, Well, I really appreciated hearing your colleagues talking about the meeting in those terms, how the markets have reacted, and I think what it's underscores is there's still a lot of uncertainty coming out of this week long meeting while a political leadership has been formed, And as your colleagues reference, she Jimping really did stack the deck in ways that

analysts myself included did not foresee. We didn't think that he would take out so many capable leaders who were not at retirement age, particularly those with national experience overseeing the economy. He did, um, but his new economic leadership

is not formed yet. We have to wait until next spring for that and so for foreign investors, for those of us who want to continue to see growth in the China market of our operations, We're just not sure what direction the Chinese government is going to be pushing beyond very broad, broad stroke pronouncements at the Party Congress that development remains important, not a focus on reform, but

a focus on growth. And you know, to be perfectly frankly, if you've got the risk tolerance for it, you know, Kalonovitch over at JP Morgan Key Strategist says saying this is a buying opportunity in Chinese related text talks. But from your perspective, is the narrative becoming less global? Are we likely to see further tensions for example affecting a chip sector where US and China relations are deltailing? La Undoubtedly the long term prospects are for more risk, unfortunately,

But I think that's pretty uh pretty much true. For one thing, we heard that from the Chinese government a real focus over the past week was on the external environment and it being very threatening and dangerous to China. Not that the Chinese government was shoring up to do anything aggressive in response, but it was notable that Shi Jimpying other top leaders focused very much on security issues and an unfriendly environment that China has to struggle against.

And so what that means for US, I think, is that we're looking at prolonged tensions in US China relations, prolonged self reliance pursuits within China and here in Washington, of course, prolonged focus on China as a strategic competitor of the United States. And so those technolo oology controls that you were talking about absolutely are going to continue

to grow talking a competition. What's been interesting was today rumors and I will call them rumors, swirled if at one thirty pm New York time, in tandem, both meta and snaps share prices suddenly took a leg lower. Many were talking about ongoing narrative of whether TikTok, for example, will be able to carry on in its current form

here in the United States. How much do you see that becoming a continued political football between China and the US, and whether or not it does remain having a presence here for example, I think it is going to be a challenge because data and particularly control of personal information is arising. Concern in Washington about China's access to American citizens data and in China about US companies having having

access to Chinese citizens data. It's considered a national security issue, and so I do think that is going to continue to grow as a problem. Of course, today we saw that there were two indictments against Chinese Chinese spies who were seeking to influence the investigation the Department of Justice investigation against Huawei, and so again technology focused issues are

at the four of US China competition. That is going to make it a challenging environment for companies in the United States and in China to continue to be interdependent. And then we have just a show of how the share price did erode somewhat on Snap on the day, just at about one thirty. I'm interested Amy on your perspective. We've been talking about how this is impacting the investors.

Of course, as many of you as are talked to us about a CEO of a business that has wanted to peg themselves to the growth story that is China that is now trying to understand whether that's something that they already stick to. Well, I think coming out of the Party Congress there are probably c e U s and many boards that are saying what did we see here. We saw continuation of a real focus on national security.

We saw some some norm busting behaviors of early retirements of some very capable economic officials and some promotions of officials that don't necessarily have a strong national economic background. And so those are challenges when foreign CEOs are thinking about the direction in which Chinese policymakers are going to take China's economic development and the role of foreign investment in the market. We just saw Q three numbers drop

on Monday. They were delayed, they were supposed to be released out of China last week, was delayed until after the Party Congress. And while there was some suggestion that the numbers were a little bit better than we predicted, certainly the export led growth is down and it's going to continue to be down, and so within China, I think there's going to be a focus on consumption led growth.

So for the clients I serve and other global companies who are focused on the China consumption story, it will remain important. But it does depend on the sector in which you operate, because there is continued concerns engaging over the kinds of activities foreign investors can can you know it can do in the China market if there's an overlay of national security concern. That was a key theme coming out of the Party Congress, even though it was

not tied to foreign investment. That's what CEOs are looking at, Amy Selca Principle over at Denton's Global Advice of old bright Stone Bridge Group. We thank you so much for keeping us on top of it. Or meanwhile, coming up, well, the government's crypto crackdown here in the US, is it scaring away potential investors or is it a complete opposite transparency. We'll discuss that in our Crypto Report US. Next, this

is bring back time now for our crypto report. And it seems like the recent attention on crypto by the SEC and other watchdogs well actually proving to be pretty good for the industry. That's bringing our crypto contributor Nale Bassett for more on this. And you hear it from many a player, maybe a CEO and executive saying we bring on regulation, we want to therefore be deemed sort of more legitimate. But our investors seeing it that way, I think you have to break down what kind of investors.

First of all, six of those who are surveyed by Bloomberg, this is more than five dred and sixty investors said yes. And interestingly enough, if you look at the type of investors, retail investors were saying so at a greater rate than professional investors. And when you look at the crypto industry at large, you are seeing a lot of divergence still and the types of investors that are more likely to

buy crypto over the next twelve months. Off of the back of that, for example, you're seeing more south side traders say yes as opposed to those high level asset allocators and executives saying yes. So you do have divergence between the type of investor, but generally whether it's on their own personal book or whether it's for their exactly, I think there's a huge difference there on the volumes you're buying at that level, right, But do say yes

that the regulatory clarity means a lot. Interestingly enough, um, some of these investigations, as we know, are pretty nascent, and the things that the SEC are looking at, whether it's at n f T S and YUGA labs or whether we're thinking about the way they're approaching three arrows capital, which is a little further down the road in terms of the hiccups we saw a lot earlier this year that we're much more blatant and detrimental to the market.

That a little bit of regulation might have protected some people against you cool some enchin well throughous capital was a pretty you were very experienced in the space of perhaps you were going into that area or indeed, if you're buying n f T s, it's a different type of usset class perhaps than bitcoin the o G. So how are people feeling about just that as an area to be going into the moment. One interesting about bitcoin in particular is I think the difference that they these

investors have felt about the trading range. So when they were asked in the summertime, they thought that bitcoin by and large most investors had thought that bitcoin crashed down to ten tho dollars. Now generally investors are feeling that there's a range bound view here between seventeen thousand and twenty five thousand until the end of this year, which is a little bit brighter than the summer but still

range bound. I think that there's a lack of consensus here about how much correlation there is also to other assets I think that's very important because we do see some professional actors seeing that correlation breakdown, but respondents think that the correlation to tech stocks will a similar So you see that interest rate worries still exist among investors.

So much for a diverse quite yet interesting. I just want to deviceify the conversation a little bit because I'm a brit sat here looking at the political extraordinary occurrence is happening over the UK, and I remember, you know, Richie Sunac, now Prime Minister, was at one point talking about making the UK a crypto hub, making sure that their regulation was ready for the space. What did that news have for many a crypto investor today, Well, obviously

the crypto meme traders are blowing up about it. There's a lot of great videos about Richie Sunac on Twitter right now. But remember it was only April when he said that he wanted to make the UK a crypto hub. He really wanted to put more framework round stable coins

being recognized as a valid form of payment. One quick thing I would say about this too is if you look at the actions that have taken outside of that takes CBDC Central Bank digital currencies for example, the UK is still only one of forty six countries that are still in research phase. There twenty six countries and development there are fifteen and pilot programs. So if you look at the CBDC world, when it comes to how fast the UK is moving, it is less fast than for example, Australia,

but about the same as the United States. But he is a crypto friendly executive, of course, crypto friendly now Prime Minister who has a rather long to do list, so he whether it ends up anywhere near the top, Shenale, it's always great to have you on. Thank you, Shenali

Bastic courseor Crypto report. We're gonna have a deep dive now on the gig economy, which has seen a pretty rough transition from peak pandemic to a pretty difficult new normal, shoppers going back to stores, inflation hurting everyone's wallets, and the market value. Of course of door Dash is followed by some This year, Uber thirty four, Instacot, after slashing its valuation for a third time on the private markets, keep on pushing towards an IPO amid pretty uncertain market conditions.

Let's talk about what's in store for these companies for their workforce as well, for their regulation. Bradley Tusk, founder CEO of Task Ventures, which takes a novel approach to invest in. You really double down in areas that are going through regulatory changes and hurdles, and you help with your expertise to decide what's the best bet and not, Bradley, at the moment the erosion of value in these sorts of companies, and we see a deep dive going into

Go Puff for example on the terminal today. How difficult is it with the changing of their how their view workers are assessed. Yeah, look, it certainly doesn't help. So right now you've got two different camps in a buyinary position. So they're sharing economy companies all say, should all of our workers become wtube We expect our our great expenses to increase buyers much just twenty percent, so that they've done a view that you know, in a business for

already tired margins, they really can't afford more cost. The unions will say we believe that every single person in the sharing economy has to be a W two employee. The reason they say that is their main concerns, of course members and union paying dues. You can't get dudes from someone if they're not a member, and they can't be a member if not a full time employee, So you have each side kind of taking a fairly extreme position. UM.

The Biden administration has now outsided, not surprisingly with the unions. UM. They issued a proposed rule at the Department of Labor about a week and a half ago that effectively presumes that everybody in the sharing economy is a full time employee and not a to ninety nine. So that will likely go into a factor if you're thinking about the cost structure for door dash for left Uber potentially burned into car wherever they go to public UM, I do

think you have to factor that in. However, UM, there are some other mitigating pieces. Which is, first, if the Republicans win the White House in four that rule likely gets prescinded right away, so it's actual from amount of time that it existed, so that we're sent it will be pretty minimal. The impa actually pretty minimal. Also, you know, the buying administrations, they're just picking politics as opposed to

the actual well being or desires of the workers. They're gonna find that millions and millions of people who currently work as independent contractors are there really resists becoming full term employees and joining unions because they don't want to write the While they may say, of course everyone wants to be in the union, of course they wants to be W two, all of the data of our shows that people who are in the sharing economy really value

the flexibility that they have or setting their schedule's choosing what kind of work they do when they work, and so that has to get balanced against it. So, you know, just to interject that rightly said, and I've heard the lobby and go on. It's been going thick and fast in the UK as well for many a company that I covered over there as well. When you think about delivery and they're like, from your perspective, is it a useful use of resource of the companies you back that

they have to just lobby pay for lobbying in this way. Yeah, unless the lobby expenses are greater than what you believe the total increase and costs are going to be for converting everyoneted W two, then yes it's a good expense. Right. So if you're talking about a operating increase um, you're a lot of expenses are I don't know, less than more percent of that reality. So it's it's not that it's it's not that material. Yeah, companies have to work

on this stuff for sure. Let's go through your list. Then, as a VC at the moment in this landscape, how high up does the regulatory concern come to you? Or are you more likely just looking at the broad landscape of tech investing right now and being like, oh boy, that the tectonic plates have shifted a bit here, right. It's a good question. So we're early stage investors see in the series A, and we look for all the same stuff as every early stage founder and every really

stage investors. So the founder, the tam, the underlying technology and underlying idea all we use all stuff. Then at touch fansures, we have two more questions. One is there a gating regulatory issue or opportunity that if it war solved, can really draw growth and evaluation. And if so, can we help solve But when the answer is yet to both, that didn't really make sense for us specifically to deploy capital. So if you take the company that you just listed.

For FanDuel, we're in all the campaigns helped legalized daily fantasy sports fatting. For Bird, we legalized electric students. For Lemonade, we've got that their insurance licenses in every state. For Roman, we help digitize legalize digital prescriptions. So for us specifically, we need to see a significant regulatory issue for us to invest in the first place. Typically, seeking those issues come at the front end um, so that that attached

how we look at it. If we do our jobs properly, later stage investors won't even have to think about this all that much because we've already legalized the product, gotten the license, whatever it is that the company needs. Riley, we could talk to you for so much longer. We thank you for giving you inside track on today. Bradley Tusk always great to sit down and founder and CEO of Tusk venches. Meanwhile, well that does it for this edition.

A bloom Beg Technology goes by so fast. Tuesday, We're gonna have so far as Lizzie Young stop all things Earnings, and do not forget to check out the podcast, where we amalgamate some of the best parts of our conversations in a really unique and easy to digest format. From New York Wishing Well, there's a Broomberg