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Shipping merchants.
They hold Red Sea trips after the US and UK strike HOUTHI targets adding to disruption in the region already it's impacting Tesla for example. We break down what it all means for the global supply chain for technology and what is being used to navigate around it.
And Tesla is one of the names hit by that in the Red Sea attacks. It's shut down its German plant amid the disruption. We will have all of those details.
As later this hour we sit down with renowned venture capitalists Bino Koesler, Keith Raboi and exclusive conversation amid the announcement that Keith is returning to Coastal a Ventures. All that and so much more coming up.
There is a lot of tests the news out there. We will cover all of it in the program. The first piece being that they have cut prices again on models in China. We will bring you those details, but the bigger news probably was the halt production in Berlin because of supply chain impact from the Red Sea situation. How does that look? We will go to our Global
Cars editor in the next block. But Tesla is down significantly. Volvo, the European car maker, also following the similar news, halting European production because of the impact of what's happening in the Red Sea. We've got a brilliant name coming to us now, Ryan Peterson, the CEO of Flexport, a leader in global supply chain technology. And Ryan, you've been coming on with us in recent weeks because you're keeping a micro track of the impact of what's playing out in
the Red Sea. The latest from Flexport's perspective, please.
Well, you know, the biggest thing here is obviously the impact on for customers, for companies shipping cargoes, the impact on price transit time as well. You mentioned Tesla having issues getting parts to manufacture goods.
I think you're going to see that across a huge.
Swath of companies, especially in Europe, but also in the East Coast, so there's delays.
And then two is the price.
The price of ocean freight has gone from well, it's gone up about four x, and not just from Asia to Europe, even from Asia to the US on the West coast, where you would think it's not, you know, from China to.
The West coast.
The United States shouldn't be impacted by the Suez on the surface, and yet it is.
Prices have gone up about three x.
And this is partially because ships have been pulled off of that trade lane to provide the extra capacity needed to go from Asia to Europe because of the longer way around. It's also because all of these trades depend on the same asset, which is containers, and if there's not enough containers.
Then you're going to have to pay more to you know, for the ones that there are.
So you've got a supply and demand dynamic that's driving up the costs of everything.
We have a great visual tool here at Bloomberg to kind of try the movement of those containers through the ships. We talked about Tesla as the example at the top of this show, Ryan, but in simple terms, the parts and components they need to feed the assembly lines and not getting through so they've halted production. Do you have any customer examples where something similar has happened, or any specific industries that have a micro hit from what's happening in the Red Sea.
Well, it's across the board, you know, anything that's manufacturing related where you're really depending on these inbound parts.
So then run assembly line is going to be hit by that.
And then the thing the other big thing you see is manufacturing that's done in ports that are no longer getting the same service level.
So a really good example of this is we.
Have a company that makes apparel in Jordan, and Jordan's port, of course is on the Red Sea at Akaba. In those carriers that we often stop there on the way through the Suez are not going through there at all, and Jordan has lost most.
Of the ocean capacity that was serving.
And so with this customer, you know, were scrambling on their behalf starting to find alternate routes, whether that's air freight or some of it's going to get trucked over to Dubai and put on a ship there.
So all kinds of this kind of.
Thing happening at a very granular level, because of course, every ship that gets rerouted has ten thousand containers, and each of those has a journey of its own that needs to get replanned and find a new destination and a new sailing ron.
Of course, you're on the very cutting edge of how technology is the soul of the solution, the transparency to this. But I ask you a more macro picture question and ultimately, is inflation going to be driven up more longer term? We've seen the supply chain snow happen before. From your experience, is this already going to be filtering in Yeah?
It also just a question of how long this last, but absolutely have to if it lasts for any period of time more.
Than a quarter or two.
Is what I would guess is that I don't think companies want to just immediately change the price of the things they sell.
They kind of set these things on the longer term horizon.
But if you can believe that this is going to last for a few months or a few quarters, you only have two choices.
You either that's the price through to your customer or you make less money.
And I think people know you know what most businesses will do if they have the pricing power, They're going to raise the prices to customers, and.
It can be quite significant.
As we saw during the supply chain congestion of years past it can. In that time, we estimated it was three or four percent of inflation for goods shipped by ocean containers, which is most consumer goods RN.
What is being stress tested in your technology right now? You came on a few weeks ago and was really interesting about the fact that a lot of these ships, for example, having to turn off their satellites so they don't want to be well intercepted by the hoody revels when they are indeed still traversing through the Red Sea. Ultimately, what are you currently using, what new adoption and technology trying to build for these sorts of scenarios.
Yeah, well, so we've had to go through and you know, our technology tracks the ships by satellite, and like you said, a lot of these carriers have turned off transponders as they get close to make it harder for anybody who's trying to attack them to identify them. You also get data from the carriers to you know, sailing schedules and routes and plans and things like this.
Well, the problem.
With all data is that it all comes from the same place, which is the past, and when the future looks different than the past. These things can rapidly not function the way they should. So it actually speaks to the approach that we've always taken a flex for, which is later on humans who are working hard, you know, every day to solve these problems. Track the ships manually, we call the carriers we're in there, you know, in their editing things manually where needed to keep the system up to date.
But this system has performed very well.
One technology change that we did make was very simple, but visualize it so that a customer can see which of their containers is being rescheduled, make it very obvious which chips are going to be which containers are going to be delayed, and then give them action plans. The other thing I think I'm really proud of is that our team went and updated our carbon calculator.
You know, it takes a lot.
It takes about twenty percent longer to go around there before you mid twenty percent more carbon. So we've had to go through and estimate, you know, change all the estimates for how much carbon gets emitted on these ships.
So a lot of hard work inflex Port.
We're kind of working overtime, weekend nights and weekends right now, to keep our customers informed.
At Ryan in twenty twenty, I was trying to work out what the story with Tesla was and a testa executive messaged me and said, get in your car, drive from San Francisco to Oakland, and on your way on the Bay Bridge, look right out of your window and tell me what you see. And he was referring to all of the ships parked waiting to unload. That was the issue right of the twenty twenty twenty one crisis. What is different this time? And I asked you to
have a crystal ball. How long will it take to unwind relative to the months and months of that previous saga.
Yeah, well, they're really quite different because the twenty twenty twenty one crunch was really driven by an increasing demand.
We ship containers than ever.
There was a twenty percent increasing containers arriving in the United States because customers weren't able to spend money on travel, on restaurants, on services, they were shifting that consumption to goods, and so we had so much more demand that the ports couldn't keep up, and so you had then the ports became congested, and you had that resulted in a decreasing capacity, so it was really a double whammy in
twenty twenty one. What you're looking at now is just a reduction and supply there's no corresponding increase in demand. So it's it's different in that regard, and it's less of a traffic jam than it is a detour, and that detour runs at the same speed, it just takes longer.
So I think the world will adapt better than it did in twenty twenty and twenty twenty.
One, not to say it's not a big impact, and certainly short term it's a pretty big deal. Talking crystal bowl, well, the ocean container shipping industry ordered a lot of ships in the peak of all the high shipping prices of
twenty twenty through twenty twenty two. The carriers made a lot of money and they reinvested in their fleets, and those ships are coming online this year and next year and even into the year after that, and so you have a lot of capacity coming online that will Although we have a decrease in capacity resulting from this rerouting, if you're taking long term view or even medium term view, you're going to see that made up for by new ship.
So I don't.
Yeah, I don't. It can't predict how long this will last. But even if it lasts a long time, I think you'll see the ocean market kind of stabilized and gets to a relatively normal pricing environment versus long term historical averages.
Of course, it'll be higher than it was going.
To be if this hadn't happened, but I think the world wi will recover.
A demanded supply side issue for both inflationary. Ryan Peterson is so great to catch up with you. Thank you for spending some time with us Fexport CEO.
Tesla cuts prices in China again. The company reduced starting prices of the Model three sedan by five point nine percent to a little more than thirty four thousand US dollars, and mark down the Model why sport utility vehicle by two point eight percent. That's to around thirty six thousand US dollars that according to the Chinese version of Tesla's website. The carmaker also says it's lone European factory near Berlin will be disrupted by attacks in the Red Sea and
there is a halt to production there. That's bring in Bloomberg's Global Auto editor Craig Trudel, And let's start with China. We gave the numbers, but the context is that this is one of several cuts to prices in China over the course of the last year.
Yeah, I mean this really started even I would say late in twenty twenty two when we saw you know, Tesla sort of open the first salvo of price cutting in China. And last year it really was just relentless on the part of Tesla and the broader industry. But I think, you know, of the two what most stands out to me of these cuts, the two models that Tesla has is the Model three. I think there was some hope that you know, with updating the Sedan and kind of you know, giving you know, buyers a reason
to have a fresh look at that car. You know, this is a fairly substantial price cut, only you know, a few weeks removed from when Tesla you know, updated the Model three. And so this is you know, potentially a cause for a concern if if you were kind of counting on this idea that refreshing the lineup a little bit would lead to pricing you know, essentially bottoming and stabilizing.
Here and for that context, it feels that investors fill Similarly, the stock is off by almost four percent on the day.
In fact, it's had a pretty awful week of run of it because within this worry about China and the price competition, and we also add to the context byd suddenly becoming well basically a challenger when it comes to numbers of EV's being sold, and one more broadly, it feels as though Tesla is having to come up against growing concern about EV demand broadly, I think a Cox automotive for example.
Yeah, I think the Hurts story yesterday is something we can't forget here as well. I think, you know, when we think about Tesla, we think about China and the US being really important to them, in particular in the US for you know, a big customer and Hurts too.
You know, it's really an incredible story to me when we think back to when it was announced that Hurts was going to buy a lot of Tesla's that was what made Tesla trillion dollar company, and you know, wow, has that really sort of ended in tears for Hurts for them to make this you know, real sharp U turn from a big investment in electrifying their fleet that that is not a particularly positive development for Tesla, to
say the least. And I think the fact that you're now seeing hurts, you know, launch a sort of fire sale of Tesla's is not good for the resale values of Tesla's and and you know, potentially could hurt you know, demand for new Tesla's in the sense that you know, there's a whole lot of supply of U Teslas now on the market for people to take a look at rather than look at new.
Craig Todell, we thank you so much, giving all of what was a pretty horrible, very bad week for Tesla ed to.
A big interview for US. European anti trust regulators say the relationship between Microsoft and open Ai is one they're monitoring closely. I sat down with European Commissioned Executive Vice President Margareta Vesta for an exclusive interview about big tech and the competitive market. Listen.
I think we all followed, almost hour by hour, the situation of the leadership of open Ai, the back and forth, how it was first very opaque and then became more and more clear. And what is interesting for us, of course, is what is the real relationship between open Ai and Microsoft When it comes to control of the business in question.
This is very preliminary, but it is part of a sort of a larger endeavor to understand how AI will affect our marketplaces because what we have seen with technology over the last two decades, it is completely upended how a number of markets are working, both the digital markets themselves but also other markets. Now, when we put in AI to that game, of course, we see that this may accelerate some of the behaviors that we have seen and some of the things that we've been concerned about.
So we've just launched a probe for market participants, for businesses, for lawyers, for academics to participate and.
To give us feedback as to how will AI.
Influence competitive competitivity in the.
Market, incisure that extends the hardware. Nvidia disclosed that you were looking informally at its behavior within the graphics card market. Again the similar question, but what were your concerns that prompted you to look.
Well, our concerns are it may sound very trivial, but it is always the same thing that is driving us to make sure that the market is truly open and competitive. And when it comes to everything digital, we're in a situation where network effects, where scale really matters. That goes for both some of the hardware companies and goes indeed
for software. So we are driven by sort of what we have seen over the last ten years that you really need to be on the point before market's tip if you want to make sure that smaller business competitors actually can build, innovate, but also scale in this environment.
I want to go back to a period of time before you took a leave of absence to pursue the IB role, which we can discuss. One of the last things you did was order on a prelim basis that Google break up its ad tech business and done, you've kind of followed the steps of the DOJ. Is that kind of a template or model of some action you could take in your remaining year in this role.
Well, it all depends on the cases, which cases no, but we in order to ask or suggest something as far reaching as a breakup, of course that has to be the only solution.
Let's talk about those eleven newly allowed bitcoin exchange traded funds. Many investors are actually discovering that approved doesn't always mean available. Vanguard's brokerage on, for example, will not offer training in these ETFs that invest directly in spot bitcoin. According to a spokesperson, Meryl Edge is still evaluating whether to provide
the service or not. Still Mark founder, our managing partner, Elease Colleen is with us because she has been backing these startups, these bitcoin enabled businesses have founders since twenty thirteen and want to get your take a lease on what seems to be some good fun flow coming in. Perhaps some still difficulty getting access if you're perhaps a brokering with Vanguard. But what does this mean for your space?
Well, it was a blockbuster day one for the Bitcoin Spot ETF class. We saw about a protected six hundred and twenty five million in flows, with Bitwise, Blackrock, and Fidelity leading the class. What's important for my space in the private markets is that the financialization of bitcoin is proceeding at a rapid pace. We see that now reflected in this mainstream financed financial acceptance and adoption of bitcoin
through the Bitcoin Spot ETF. But on the private side, innovation is happening as well that further advances bitcoin as an asset and as a currency.
What sort of solutions and indeed what problems are they trying to solve because ultimately I'm wondering whether there's any cannibalization by the fact that now you don't need to go and open up wallllets go and invest in bitcoin directly.
You can gain exposure through an ETF. It's so much easier.
Well, this is what's important about the introduction of the spot ETF is that it's an easy access product for retail investors and institutions that may feel more confident in first accessing bitcoin through a regulated product like the ETF.
And on top of that, the marketing that has gone into the launch of these products and that supports their continued adoption is consistent with bitcoin's core principles, which is that bitcoin allows investors to hedge against risk of inflation or monetary debasement that have been global concerns, including for developed markets.
Like the US.
What we expect to see from the spot ETF is an adoption of bitcoin will increase because investors now have a familiar and easy way to access it. But I expect to see in the longer term or in the mid term even is that accessing bitcoin and holding bitcoin through a spot ETF, holding exposure to bitcoin will allow people the motivation to continue to learn about bitcoin and will could lead to people's derisk access and purchase of bitcoin or related products.
At least there's familiar and easy way to access. And then there's the eleven ETFs that got approved, and it's amazing that in the news cycle already flagging those that won't actually offer the service. Do we need eleven ETFs?
Market will decide that I'm not sure that we need eleven, that we do see some breakout performance, as they noted with Bitwise, Fidelium, Blackrock. On the private side, some of the products that are developing to further financialize the space are also exciting and likely to those that purchase spot ETF themselves. So to mention a few of the areas of innovation that we're seeing in the private markets, I'll note that the point denominated insurance products came to market
in late twenty twenty three. What that means is that you can hold a policy that's to nominate in the scene that's producing a BTC return. And we're seeing products that also further helped the space mature, such as a lease for preserve software.
Just deep analysis a lease and we're grateful for your time release, But we're at a time Cara quit check in on the market. There is some momentum right now around Meta. I don't see any real news catalyst when it comes to social media stocks or Meta in particular, but it is a percentage point it is doing well. The opposite of that being Tesla is the biggest points
drag on the Nasdaq one hundred. But it's interesting to see some buoyancy, particularly in megacat tech on a day that Bloomberg News wrote in twenty twenty four, the Magnificent seven may not be as magnificent as they were last year.
Yeah, Meta, it had some analyst upgrades throughout the week
and some bullishness across the board. But social media is one that we just want to focus in on a little bit more because there have been plenty of announcements, even from the privately held ones like X This week, it's in fact saying that it's going to launch new shows with Don Lemon, with Telsey gabbartt with Jim Rome as the platform looks to add legitimacy basically to its renewed push into video, which has been a key focus for the owner Ela Muska course MS Kat Wagner joins
us now with the details, and it was really interesting to see who they were backing, how they were backing, and particularly when perhaps they've lost one. Then the key focuses that they did have, of course, the guy coming from Fox who's decided to go off instead of his own particular outlet.
Right, yeah, I mean it feels like there's sort of this home for a lot of people who had major platforms and now are sort of maybe looking for a new place to go, right Don Lemon obviously being a prime example there, Ticker Carlson you mentioned.
But you know, I couldn't help.
But essentially when I heard this news, they announced it this week, timed it with CS and I couldn't help when I heard it. But think back to the old regime of Twitter back in twenty sixteen, twenty seventeen. You may remember, Caroline, they you know, signed a deal with the NFL. They signed deals with a lot of different publishers to stream live video. Was all about live and this feels very similar. I'm not sure if these are going to be live. It sounds like these are going
to be more like packaged shows. But at the same time, this push into premium video content. You know, might provide them with a new or at least a revamped revenue stream here. But it's interesting to see the strategy sort of being recycled now a few years later, Kurt.
You know, there's video and then there's video, And you and I were discussing behind the scenes earlier this week, like does X become a sort of dedicated vertical video play and then you're taking on the likes of reels and TikTok, or does it become a content platform? Allah you're watching shows which are not necessarily in the vertical form, And my read on it is that X hasn't quite decided really what it wants to be in the video context.
Yeah, I think you're right, and I think these are they sound similar and that they're obviously both the video strategies, but they're quite different, right. I think if you go down the X or excuse me, and the TikTok reels route, you're really going to be courting kind of regular creators, right, people with lower budgets, people who are just simply trying to, you know, maybe get a small revenue share. When you start going after the larger, maybe more traditional types of
video that you would see on television. You know, those are much bigger budgets, those are bigger commitments. You know, you might be able to sell larger ad packages against the specific show, right And so you know, we've heard Elon talk about his admiration for YouTube and how he wants X to be more like YouTube. You know, it's a lofty goal, of course, but I think it'll really be interesting to see which of these two paths they
pushed down more. Right now, it feels like they're kind of doing a little bit of both.
Bloombers, Kurt Wagner, And important to note that X and Lyndi Akarino did everything to have a super big presence at CS this year, which was interesting, a lot of that news coming from there, Big Banks to Curt Okay. Sticking with social media, this year marks the twentieth anniversary of Facebook, and priorities have changed for the social platform's parent company, Meta founder Mark Zuckerberg has become deeply engaged in his efforts in AI, with Metaverse dreams seemingly deferred.
Bloombergs Asia Accounts wrote the story fantastic deep dive and long form piece in BusinessWeek and joins us, now, I mean that is the story social platform to the metaverse, and now it's all about.
AI exactly it.
Right, It's funny to think back twenty years ago when Mark Zuckerberg started a Facebook out of his Harvard dorm room and it was all about just connecting with friends and family. And so much has changed since then, and right, it's gone through sort of crypto and going after video. There was like the Cambridge Analytica scander. There's so many
things that happen. And then in twenty twenty one he changes the name to meta Sure for the Metaverse, and he goes all in and spends fifty billion dollars on this idea that we're going to live in this virtual world.
Obviously that didn't really work.
People didn't buy the viirhead sets. And then chat GBT came out and it was all out AI craze in the tech industry. And now a Meta is trying it to position and set up to actually be a leading player in AI. So really big shifts in the company.
What I love about your story are the anecdotes, the behind the scenes, and you take us back to the alan Co meeting several years I think ago twenty twenty one between Son of Pitchchi saying congratulating Mark Zuckerberg on the feats they'd made an AI and that wasn't that aware of them. Of course, himself totally embroiled in the metaverse at that time.
Yeah, exactly, exactly right.
He was so focused on the metaverse that he wasn't keeping an eye on what was going on in his AI research lab, and the area research lab had been around for almost a decade at that point that he had that conversation with Sundar, and so it really was kind of like an our heart moment of wake up moment, and he went back to his AI research team and was like employees were saying that they were scrambling to get summaries of work to send to Zuck and they
were sending emails, and so it was this rush to make sure he was really up to speed, and to his credit, he did get up to speed quickly, but again it was still sort of this focus.
On the metaverse.
It wasn't really until chet GBT came out that there really was a sort of big push within the company of like, Okay, how do we put AI into our products in.
A new way?
And I have a hundred million people, I think using Lama already Asia accounts.
We didn't even get.
To discuss Macadamian not eating cowls on a ranch in Hawaii.
Shame. Okay, time for talking tech. First up, longtime Apple board directors Al Gore and James Bell will be retiring from the company. Gore was the longest serving member, having joined in two thousand and three when co founder Steve Jobs was the CEO and the iPhone didn't even exist yet. And Tata Consultancy and Emphasis, India's two biggest IT firms, told investors a long awaited recovery in global tech spending may finally get underway. In twenty twenty four. Shares climbed
following the news. Plus shares of Kurasushi USA, which uses robot servers and offers toy price is at its restaurants, are undergoing a rocky stretch, suggesting that the investors are starting to wonder whether it can live up to the excitement. Kurasushi placed a big bet on expansion during the pandemic and even sword to a billion dollar market value back in July.
Carrot Fun Way to Eat. Meanwhile, coming up, Big move, It's official MVC.
We're going to be having that conversation.
Keith ler Boy joins us next and why he's returning to coast l a Ventures. Vino Costler also with us.
Stick with it. This is Blomberg technology.
All right, deal done. Keithra Boy has returned to Coastal a Ventures as a managing director, departing Peter Teele's Founder's Fund, where he had served as a general partner since two thousand and nineteen. Let's bring in coast Laventure's co founder Vinodaksler more in the news along with Keith Raboy himself, who joined us in Miami. Vinow'd I start with you and you've had a back and forth already with each other on X but who phoned who? Whose idea was this?
Well, we've always gotten long and stayed in very close touch. So when Keith was thinking of something new, we got together and I think.
Keith and Samir talked.
Keith and I then followed up with the dinner.
And that was it.
It was pretty simple.
So Keith, it sounds like this was an initiative or an idea that came to you first. You know, you were at Coastler and you've been at Founders Fun and you're back at Coastler. Why did you think of this? What's driving you in this decision?
Well, I spent six years at Coastler between twenty thirteen twenty nineteen, and we had an incredible run and track record there in KB four, KB five, and KB six, where I think every single MD produced multiple IPOs during that era. So sort of obviously we have a significant
traction together, and sort of missed that Sentatarily. I've learned a lot about deep technology investing, which I knew nothing about when I joined, about liquid biopsies to detect cancer, about the fundamental premise of AI and the potential of AI, about robotics, about actually low cost rockets into space.
And I kind of missed the education part of my job.
I know a lot about a lot of things in technology and company building, but I was getting free education every day at every partner meeting, and so that was really exciting. I was considering new alternatives and it just made so much sense to go back. We've been working together for the last five years. In some ways it
feels like I never left. I work very closely with vino It's partners and MDS Samir as mentioned in David Wyden, I probably see them at a board meeting once a week, so the interaction and the dialogue never changed.
The overlap in our portfolios.
Between founders funding KB is substantial, going way back to twenty thirteen and fourteen with a firm and Stripe now open AI, but up and coming companies like the company I'm CEO Open Store, Dellian's company Varda. We've been working together on eight sleep and changing the world by allowing people to sleep better. So the natural overlap just made this so logical.
Yeah, Keith, I can see the pull. What was the push?
Why did you start to think you wanted something different?
Well, you always wonder like how do you be happier? How do you be more successful?
You know, like I try to do it once a year intent of like every day so I can sleep better. But you do realize what there are people in environments that you thrive in, and there's environments that are better for other people. What I do really well is invest very early, mentoring and serve as a conticular area to founders and have high impact in ambitious founders visions and achieving those ambitions. And that's a great fit with how
Ven Adult Crystal Ventures. From the very very beginning, and so that was so ideal for what I like to do and how I like to compete in the world.
Find where then to put Keith's expertise. You do have these overlapping investments. Is it that he's going to be on the ground with founders?
Is it building out Miami.
I think the goal is very simple. We're in not in the investing business. We're in what we call the venture assistance business, assisting or those build large companies.
That's the part of.
Keith's skill set that is extremely valuable. One thing to realize about the partners the mds at Coastal Ventures is everyone is very very different. We don't we're not similar skill sets. So we have real diversity in skill sets, and Keith just adds to it. The more diversity you have in your skill sets, the better decisions you make and better company building. Most people in the investing business
really don't know company building, and Keith does. And so that's why I think you's such an important addition to our team.
Keith, the word that Vinode used for you a lot was mentor. And it's interesting you were just talking about your learning in deep tech, your background in fintech, and I'm just really interested mechanically. There must be some portfolio companies at Koestla that are there that were there when you were with the firm first time around, and there are new ones, so you have an opportunity to get
involved with new companies. And I wondered if you had a wish list without making it awkward with Vinod virtually sat beside you, and actually specifically does open Ai make that list because you could do some work there given recent events.
Obviously, I'd like to find new, ambitious founders who want to change the world and have IMpower in their lives, that have an impact in society.
That's the primary goal.
There are a few companies actually this may surprise you, that I invested in more than five years ago that I'm still all abored of a fair being one firm being another, so you know, there's a lot of continuity there. And then there's some founders who I invested back in my day twenty thirteen to twenty eighteen that want me back, so we can always consider that. But really, you know, we want to look forward to what is the future of technology, how do you change society, how to make
society better? And who are the iconic founders who have potential to do that, which is very rare, and I got to I have to go find them before other people do.
You've got a lot of money to put to work. Kosler also has been deeply active. I think the most active deployer of venture capital in fourth quarter? Is that going to be the way you look at the first as well?
No, we don't look at the rate at which we are investing. We look at the rate at which we are getting great on to work with us. So we don't have a pace or a strategy around rates. Our focus is very much on when do we run into a great entrepreneur, how do we convince some to work with us, and how can we help them build a company. So we don't keep track of industry metrics or where we stand in terms of rate of investing. It's very
much focused on when we see the right opportunities. What's surprising is through twenty twenty one and twenty two, our rate of investing didn't change very much, though the industry went through real up cycles and downcycles. But if we look internally at the number of major investments we make
per month, per year, our rates stayed relatively constant. We didn't increase dramatically from twenty eighteen to twenty twenty one, and we didn't decrease significantly from twenty twenty one to twenty twenty three.
Psychoagnostic.
I'm interested in teeth in cultural differences. You've spoken about how when you are at Kosla, the Monday meeting, the all important gathering of the partners, the sharing of information, the stress testing of ideas, and then it found us fun how everyone sort of had their own mini business models. They're sort of a portfolio manager as such, but is there more autonomy.
For you at Kosla?
Vis Aviv found us fund or not?
Well.
I always kind Atomy Coastler, but we had very spirited, vigorous debates about the quality of thinking behind any investment, whether it's something I was championing or something Venode was championing, and I did miss that. I think it made Niche sharper, even though it was ultimately my decision on whether to invest or what terms to invest, But just listening to Venode or listening to David speaking in the back of my brain or some actually did make me a better investor.
And sometimes not because they were critical, sometimes because they led me to down on things that I liked, but they were encouraged me to be even more aggressive, and so it was just very very very helpful to me as a person.
You know yourself, Keith, Now, oh sorry, please continue.
Yeah, I just want to add to it. Our strategy is very much bold bets, early beats and impactful bats, so cyclically impactful bats. What that means in practice is we have to invest in outliers, not what everybody else is investing in, and because of that, we have an unusual investment process. I don't get to approve investments. Any of the mds can decide to make any decision, but they have to listen to all the other MPD's opinions first,
so very much operate like a group. But we want an MD to believe in what they're doing and they independently decide to invest or not. I don't get to make that call for others. They don't get to make that call for me. And then the other half of the administration of the firm is very very unanimous. So we are quite different in how we make decisions from most of the wenture firms.
Vino. Those mds, including Keith, are going to have a lot more cash to play with. You just closed three point one billion dollars in three new funds. I believe from sort of seed through to growth stage. And how are you going to assess Keith's performance? This is an awkward live television scorecard set up for the year.
You know, it's very simple.
So one thing that's very unusual for Koestler is we don't have companies or investments assigned to people. We don't measure individually. So we have no measurement system. How much prafit did you make? Which investment did you bring in? Because everything's the team effort. We even transfer opportunities. You know, one person maybe on the board of a company, and when they reach a different stage, we'll assign somebody else.
So we don't measure I personally mostly look at both at the empty level, but more importantly at the next level.
What kinds of questions do your.
Investment partners ask? How insightful are those questions? So evaluation is much more about the questions than the answers or the opportunities.
So I also remember when I first joined Kosla twenty thirteen, there was a jobs back for mgs and one of the first bulletpoints was you're the first person the founder calls.
And I think that's an ingredient.
In success, which is if you're so helpful, so insightful, so reliable, and so trustful that the founder when they have problems or challenges or opportunities, they call you before anybody else on the planet.
You're going to do. You're going to do pretty well a venture, right, Keith? We have thirty seconds, But it's an election year. Peter Tiel is a political beast. You know, how did that factor in? And do you and pay attention to the election this year?
I won't speak for Venola, but obviously I pay attention as an amateur to politics.
Renown, Are you paying attention?
I do pay attention, but I'm registered independent. I used to be a Republican until the climate issues became predominant, and then became an independent.
Yeah.
I do think that there's a fifty percent probability the face off won't be between Biden and Trump.
And lastly, we got ten to twenty seconds more Miami, do we think, Keith?
Well, I love Miami, but I'll be in the Bay Area.
I have a lot of portfolio companies that were found in the Bay Area. I'd like to attend partner meetings as much as possible, because I think they are really useful in understanding their portfolio, and the vigor of the debate and the incisive questions is better in person than on Zoom.
But I'm going to stay in Miami.
Well, we thank you both for joining on Zoom today. It's great to have some time with the Coastal Adventures co founder of Vinod Kosler managing director Keith ler Boy, both now of Coastal Adventures. That does it for this edition of Bloomberg Technology.
Ed.
Yeah, that conversation. Listen to it again on the podcast wherever you get your podcasts, Apple and the Bloomberg platforms Spotify. This is Bloomberg Technology.