Sheryl Sandberg's Legacy at Meta and the Big Bet on Crypto

company goes from here. Plus he sat on Facebook's board for seven years, He's known Samberg for more than twenty. My exclusive conversation with Don Graham on Samberg's role in building the company and where Meta goes from here? And inflation keeps raging, no relief in sight according to President By This as the market and tech and cryptos dock

in particular, keep whip sawing. We will be joined by Sebastian Malaby, author of a new book, The Power Law, about whether Silicon Valley can hold onto its role as a center of power. Later in the hour, why do you want to stay on Samberg's exit now from met end what it means for the company going forward. I'm joined by Jasmine Emberg principal analysts for Insider Intelligence. She covers social media and influencers look jasmine from a business perspective.

Controversy about the business model aside. How confident are you that Meta can keep the money machine running without Cheryl Samberg? Well, I think you know. First of all, we have to address how powerful um Sandberg was able to build um Meta's ad business When she started In two thousand and eight, we at the market are now Insider Intelligence estimated that Facebook's worldwide ad revenues were just two hundred and fifty

million dollars. Now, within two years that figure had grown to one point three billion dollars, and flash forward to today, Meta is the second largest digital ad seller in the world after Google. I mean, it's safe to say that the new leadership certainly has their work cut out for them to continue growing um metas business. But um It's still in a pretty good place despite all of the

headwinds that it is facing right now. One Bloomberg take put it like this, Cheryl Sandberg is leaving Facebook at a perilous moment. What is your outlook on how fast Facebook and Instagram and WhatsApp can continue to grow while the company is making this massive pivot to the metaverse, and you're absolutely right. I mean, Meta is in the process of undergoing this massive shift towards the metaverse, and you know it is going to be something that is

you know, pretty far down the line. It is still years and years away for the metaverse to become a reality. And right now there are some really immediate challenges that Facebook has to grapple with and Instagram has to grapple with as well. That as an ad revenue slowdown, that is a slowdown in user growth, it is also slowdown in time spent on on Facebook. Now Instagram of course, has been able to pick up the flack for Facebook for quite some time. That's proving to be more difficult.

Um So it's going to require quite a bit of discipline and innovation to continue growing all of Meta's platforms. Jasmine Hamburg, Insider Intelligence principal analyst. Thank you, Jasmine. Obviously lots remains to be seen. Now Sandberg might never have been at Facebook if it wasn't for my next guest. He was an early investor and a mentor to Mark Zuckerberg. Here's Roger McNamee describing how he helped broker their partnership.

It's Sheryl Sandberg. Have you ever met her? He said, I think I sugar hands once at a party I don't know at all, and I said, I want to try to get her to come and talk to you about being your chief operators somewhere, And next thing you know, she goes there is the chief operating officer, at which point basically they didn't need me anymore. I mean, she's way smart, and I am I mean one of the most I mean one of the most capable people I

have ever met in any way. Joining me now Roger mcmee, co founder of Elevation Partners and author of the book Zucked Waking Up to the Facebook Catastrophe. So, Roger, we all know that your feelings about Facebook have changed over the years. I'm so curious what your first thought was when you saw the news that Cheryl was leaving. I take no joy in Sheryl Sandberg's resignation is CEO of Meta.

For me, it's a really complicated situation because Cheryl was for many years a friend of mine and somebody I advised when she worked in the Clinton White House. She was responsible for introducing me to my future business partner, bono and for that, I'll always be incredibly grateful, and

I tried to reciprocate. She came out to Silicon Valley in two thousand one, hung out in my office for a few weeks, and I introduced her to John Dore, who was on the board at Google, which began the process of her going to work at Google and creating the add engine behind AdWords, which obviously put Google on

the map economically. So Cheryl and I were really close, and when she made it clear to me that she was thinking about leaving Google, I thought that Facebook was the right place for her, and so I talked to Mark about it for months, and you know, he definitely wanted a strong number two, and I think he was trying to figure out in his own mind what factors would really matter. But Cheryl had I thought two things

that really were decisive. The experience at Google was the closest you're ever going to get to the business problem faced at Facebook. And secondly, you know, she had a maturity and an experience both in the political and the business realm that I thought would really complement mark strengths. And keep in mind, I think when she went there,

they had fewer than a hundred million users. And so it was for me at least not possible at that time to imagine the kind of harms that eventually came out of Facebook, in part because the business model that did the harm wouldn't be invented for another five years. And so it you know, I look back on it and I go, oh my god, what could have been? I mean, Cheryl is so talented, you know, she could have both made a very successful company at Google and

been a hero for democracy and public health. And how could she have done that? How could she have done that? Roger, Well, let's take a few simple examples. So in Facebook was implicated by the United Nations in an ethnic cleansing that took place in mean Mar, a country in Asia in which Facebook had no employees on the ground, had almost no employees that spoke the language, and they certainly had no expertise in need of the politics or the culture

of the country. And it became clear that the product was being used by bad actors to instigate in ethnic cleansing. And different company, a different group of people might have taken that as a warning. It might have said, you know, we really shouldn't be doing business in countries where we don't have an economic interest in having people on the ground, where we're not willing to invest in the language, where we're not willing to invest in the culture. That kind

of thing is super oubes. The FBI warren Facebook in early that Q and On was a very dangerous extremist group and they weren't Facebook. That there was a lot of recruiting going on on Facebook, and Facebook ignored it. Between twenty nineteen Spring of twenty nineteen the spring, about a one year period, roughly two million people were radicalized

into Q and On on Facebook. And again that's based on Facebook admitting that there were at least three million members of Q and on groups by and internal Facebook reports released by the whistle Blower that showed that's sixty percent of the time when people joined an extremist group on Facebook, it's just Facebook recommended, and so they were

responsible for that. Those are things that a different group of people I would have said, you know what, we don't want to be involved in that, because if they've taken action on Q and on, they might have prevented the insurrection, because the people who participated the insurrection have been radicalized into Q and at first, and again, all of these things are about the culture of the company. Do you prioritize the well being of the people who

use your product? Do you prioritize the well being of the people affected by your product? And the reality was they viewed shareholder interest as the only thing that matters, and so when it came time to thinking about their users or the other people affected by it, that just wasn't a consideration. And it's that's certainly not unique to Facebook.

What was unique to Facebook was the impact that it could have on those people, either in a pandemic or in an election cycle, or related to some kind of extreme it. So clearly you think her legacy is complicated, and I think many people would agree with you. Let's talk about where Facebook or Meta is now going. I asked her about this pivot to the metaverse and whether having to create a whole new business model or evolve Facebook's current business model for a future that doesn't yet

exist was one of the reasons she's leaving. Take a listen to what she told me when we spoke. We have a current business, which is our current apps connecting customers to businesses, and I think there's a lot of opportunity there right right now, but also over the long run, and then the metaverse is a much longer term business opportunity, and it's going to take some of the same form and that I believe we will be a place and then the metaverse will be a place where businesses and

consumers connect. But I think the exact form that takes in something that will be figured out over the next number of you a much longer term. How optimistic are you about Meta realizing this future of the metaverse, turning it into a business, And what do you think the company looks like without Cheryl Sandberg as it moves towards

this new, but you know, very uncertain future. Emily, I think Facebook's near term is complicated enormously by Apple's application tracking, transparency and whatever things that follow that, which give iPhone users the ability to opt out of having their data shared with Facebook and others. Facebook's already said that that's going to be a ten million, ten billion dollar hit to revenue this year, and it wouldn't shock me if the number got bigger than that, because I don't think

Apple's done. Secondly, Instagram, which has really been supporting the growth of the business, is under assault from TikTok, and I do think that TikTok is essentially locking Instagram into the group of users it has today by siphoning off all the new entrants into social media, and that's really bad for Facebook's growth long term. And then you get to the metaverse, where I think Facebook's current concept of

the metaverse is insane. I mean, to my mind, virtual reality is a brilliant idea, and if you focus narrowly, if you say focus on video games, for example, the opportunities are unlimited. But the way Facebook's looking at it, where they're essentially going to try to replace reality with a virtual reality across every possible doll mean, entertainment, work, sports, the whole nine yards. To me, that's just that's never gonna work. And the amount of money they're spending on

it today, I just think it's certifiably insane. If I were a shareholder, I would be incensed about this, because it's not that the metaverse is a terrible idea, it's that their idea of the metaverse is a terrible idea. And I don't think it matters how long they take. They're just by the time they get there, it won't be interesting. Roger McNamee Elevation Partners. Always great to have you here, Roger, thank you for sharing your thoughts with us.

Now onto a Bloomberg exclusive. We've learned that Tiger Global's hedge fund has lost a whopping fifty this year, and in a letter to investors, the firm is vowing to try and earn that money back. Joining his now Sebastian Malaby, Senior Fellow at the Council on Form Relations, for more on this and the wider venture capital landscape. He is also the author of The Power Law, Capital and the Making of the New Future, a book on the rise of VC and Silicon Valley. Sebastian, so great to have

you with us. I want to start on this Tiger Global news because you have pointed out that Tiger Global has been writing massive checks for companies with very little revenue. How big a problem has this been in Silicon Valley. I think it has been a problem. It's come with a lot of weak governance, right because the Tiger Global model included writing a huge check to somebody who was

already running a Unicorn. That person, of course, because they've created Unicorn, is a bit imperious and then on top of that, you say, we don't want to go on your board. We're not going to exercise governance, and we defer to you because you were the founder and you're so great, and I think that's a good way of overseeing companies basically decide I'm not going to oversee them. And that's why you had this governance vacuum for unicorns.

That's why you see companies like we Work or Uber, which actually started out pretty well in their early phases, go off the moral and commercial rails because nobody was monning the store on the board. So what's your wead on this massive market correction and how it will impact venture capital and private companies. Well, clearly it's bound to effect these late stage growth investors like Tiger Glogle first because they were investing late, so the exit that was

anticipated was only a year away. That's in the public markets. Of the public markets correct by like the nurse Back has done this year, of course, your late stage privates are going to go down with it. The second thing is that the cost of capital matters when you're writing a check for a hundred million bucks, right if you're doing early stage VC, you're writing a ten million dollar check. It doesn't matter so much what the interest rate is, but it is material when it gets to these very

big checks the Tiger Global is writing. So they've faced the brunt of the correction. They've announced that they're going to move into doing earlier stage investing, do more seed and so forth. That's obviously a smart pivot if they know how to do seed, because it is a different discipline. And then the question for the broader venture capital businesses,

how does this ripple down the stack? And it doesn't mean that Series C valuations go down a lot, because Tiger Global is no wanting to not wanting to pay quite so much. In Seriously, if serious C goes down, does that mean Serious A goes down? And there's a certain point, Emily where there's a problem because the cost of hiring engineers is ultimately set by Google. If Google is going to continue paying a lot, then the startups

have to pay a not to get good engineers. And if that price is not reset the price of talent, then you know, a small adventure capital check in a Series A is going to make it difficult for the company to work. Now, your book tells a riveting story of the history of venture Capital, which you'll have to read if you want to learn more. You argue that Silicon Valley and venture capital is the main reason that

Silicon Valley is Silicon Valley. How confident are you that other Silicon Valleys can emerge or are emerging elsewhere, whether it is Boston or Austin, or New York or London or China. So I think the story up to around two thousand five is basically the Silicon Valley venture capitalists

had a special source that other people didn't understand. They had this power law approach where they were quite happy to write eight checks out of ten that would end up losing money, and then a couple would have these extreme right tail power law returns that would make up

for allal losers. And although that sounds a bit obvious now, before around two thousand five, vcs in Boston didn't really get it, vcs in New York mostly probably didn't get it either, and certainly nowhere else in the world, maybe with the exception of Israel, did anybody get it. And then in two thousand five American vcs from Silicon Valley

went to China and they moved into India. The whole Israel e Consistent took off south the station began, and during code we've seen it spread to Austin, Miami and so forth. My belief is that the fundamental mindset of Silicon Valley venture capital is now spreading pretty much everywhere, and that as it arrives in different geographies, it transforms the attitude entrepreneurship. People take more risk, and you start up cultures which hitherto had been kind of concentrated. Cilicon

Valley is going to be everywhere. Now. We've been covering the big story of Cheryl Samberg leaving Meta, and I've heard so many vcs over the years say we're just trying to find the next Facebook. Facebook story of course has got a lot more complicated. But what is going to drive the next cycle of venture capital and the quest to find the next Facebook or maybe it's a next something else? Well, you know, Facebook was amazing because

it was this software company that scaled unbelievably fast. And the characteristic of both sas and consumer software is that you don't need very much capital to have an enormous value creation effect, right, And if you're looking at something that can do an equivalent miracle, the most likely frankly

is crypto, right. I know we've had this big correction recently, but if you think of the story of unite swap okay, a guy called Haydn is in his apartment in New York City and he gets laid off from a engineering job at Siemens, and then he starts to write code because his flatmate, his housemate is is somebody who works for Ethereum, and he creates this automatic market maker which goes on the Ethereum blockchain. And this individual, pretty much

as an individual creates a unicorn by himself. I mean, that's even more amazing than Instagram, which was people creating a unicorn. So I think if you're asking specifically, what can do a Facebook style value creation with enormous leverage on a small number of talented people, I think it's crypt We will be watching if it is. Indeed. Sebastianality, senior fellow at the Council on Foreign Relations, author of a new book, Power Law. Please check it out. Thanks Sebastian.

We'll have much more head this this blue work a few other stories we continue to watch. Ford is investing three point seven billion dollars in factories across three midwestern US states to pump out more electric cars and traditional gas fueled cars, and a sweeping expansion that will create in union jobs. Five four plants will be expanded to proce more hot sellers like the electric F one fifty lightning pickup, and roll out new models, including a new

battery powder commercial car. Plus. The crypto business, run by billionaire brothers Cameron and Tyler Winklevoss, is making its first ever job cuts. Gemini Trust is slashing ten percent of its staff as trading across the industry plunges. In a memo obtained by Bloomberg, the brothers blame the job called so what they called Crypto Winter. Last year, Gemini said it raised four million dollars in a round of funding that valued the company at seven point one billion dollars.

Coming up, my exclusive conversation with former Facebook board member Don Graham on Cheryl Sandberg's departure and what he thinks is next for a woman he's known for more than twenty years. He joins us, next, this is Bloomberg. Welcome back to bloomber Technology. I Emily Chang in New York. Shares of the electric truckmaker Nicola rising Bloomberg reporting the latest twist in the story of the company's founder, Trevor Milton,

who had to resign as chair last year. I mean regulatory probes voted against the company at its annual meeting to issue more stock are ed Ludlow broke that story and has all the details on what it means. Ed. Yes, So the proposal the annual general meeting was to include the shares increase the shares outstanding from six d million to eight hundred, meaning down the line Nikola could sell

equity to raise money. Now, the biggest shareholder, the former chairman, the founder, Trevor Milton, according to sources, voted against that measure, and it's really hard to understand why. On the one hand, he wouldn't want to dilute his own holdings and diminish the value of his holdings. On the other, voting against that could inhibit the company from raising money, which means the company suffers, and down the line the shares full. Oh,

there he is in the screen. We've all been wondering where he is because he faced his trial next month. You'll remember, and Emily accused of deceiving investors and exaggerating about the company's technology and claims he made about the company's performance. What's also interesting is a lot of retail investors are really into this stock. So the other problem that Nicola had it it's a GM and one of the reasons they had to adjourn it is because nobody voted.

They needed a majority of the outstanding stock to vote on the clause to pass it. But even though Trevor Milton voted no, they still didn't get enough shareholders to vote generally speaking, So this is a stock there's not fed as badly as others years. Today it's getting back on its feet, trying to get over the ghost of Trevor Milton. But this was an interesting roadblock and a twist in the story that we probably didn't expect. All right,

thanks for the update. I want to get back now to the impending departure of Cheryl Samberg at Facebook now met US chief operating Officer. This is a role she's held for the last fourteen years, growing the company into what it is today. I spoke with her ahead of the announcement and she told me how she came to the decision and how she feels about the company as she leaves it. This was a decision I made that I did not come too lightly, And it really is about how I will spend my time, not how much

I believe in the company. I believe in the company, but as much as I ever did, and staying on board. And I really have complete confidence in the key Mark and I have built. I think they're going to do a great job building the future. Or accompanied us a huge part of my life and a huge part of my heart joining me now, Donald Graham. He served on

Facebook's board for seven years. He was also the lead independent director when the company went public, and he's known Cheryl Samberg and Mark Zuckerberg since the early two thousands. He's also the former publisher, of course, of the y Shington Post and chair of Graham Holdings Down. So great to have you with us. Thank you for joining us today. Tell us about that Chryl Sandberg you met all those years ago in two thousand one, and what you make

of her leaving at this moment today. I met Cheryl in November December of two thousand when I was fishing around as the Clinton administration went out of office to see if there were any business minded people who wanted to stay in Washington maybe worked for a business, So I offered Sheryl a job at the Washington Post. At that point I knew she was a super hot property. Every single person I talked to in the White House said,

this is the person you've got to get it is. Ironically, she was offered jobs both by me and by Arthur Salzberger, the publisher of the New York Times. So Cheryl had her choice between the New York Times and the Washington Post, and was crazy enough to pick this Google place that she thought might have a future. So she went off to Silicon Valley. We stayed in touch. I called on her when whenever I would go out there, and then I tried to hire her again. In two thousand seven.

I tried to get her to come back to our company, this time as president. I felt that I knew that our company badly needed somebody who knew a lot about technology and Sheryl. Sheryl knew both a lot about technology and a lot about advertising, and knew every big advertiser in the United States, so that would have been quite good. She couldn't do that because she was married to Dave Goldberg, who was making a career as the CEO in Silicon Valley. So then later on she and Mark both called me

when she was thinking about going to Facebook. It's clear you think very highly of her. For many people, I think she has a complicated legacy. The critics think she didn't do enough to address the negative consequences of face s book. What do you think, you know? Fourteen years isn't that long a time. But let us start with Facebook when Cheryl Sandberg joined it two thousand eight. When she joined, happened to be there that she and Mark

invited me to join their board. So I went out to Facebook for the first time in late two thousand eight. Advertising at Facebook at this point consisted of three little three line ads on your home page, one of which always used the word belly fat. There was absolutely not a brand advertising on on Facebook at that point. There was next to no revenue because there were next to no ads that advertises goodbye and uh Cheryl. As Mark had to build Facebook, Cheryl had to build its business.

It is not too strong to say that in two thousand eight, the business, the revenue, the advertising didn't interest Mark a lot, and Cheryl had to hire the people who were gonna turn Facebook into an actual business, build the business, make it work for advertisers. And I knew one. Uh,

I had one odd status on the board. I was the only person who came from an advertising support a bit, and I knew that advertising, if you had good advertising, it made television or newspapers or Facebook better for users. If you had terrible advertising and made it worse for users. So Cheryl, I watched Cheryl build that business and it

was pretty awesome. David Kirkpatrick wrote that Mark Zuckerberg brought Cheryl's Hamburg on board in part because of her experience and governance and to help Facebook govern itself one day, and also to help build a bridge to Washington. This is another thing that critics seem to think she failed to do. You are at the center of power in Washington. How do you think she excelled at that part of the role. Well, again, I would go back and ask

another set of questions. Uh, how many people can you name, Emily, with your deep knowledge of American business, who are made and made an enormous record as a number two of a company currently? How many one two teams are there that built a big business? Is where you know the number two as well as you know the number one. Yeah, I knew people. You know, don KEYO and ROBERTA. Gazetta is the first one that comes to mind at Coppec

who had had a fantastic run. But uh, what always strikes me about Cheryl is that as one of the as Silicon Valley Royalty is, they're not really the number three or four person at Google. She went to work for a twenty three year old. She had the curry to say, I think Facebook is going to be important. I think Mark is a good person, and I'm going to go work with him and see what we could build together. But they again, you have to remember that

when she enters the company, there's almost nothing there. There is very little revenue, very little advertising, and very little team, and she has to build that justice. Mark is building the product right, and she talked about that. When I spoke with her yesterday, she was thirty eight, he was twenty three. It was a leap, a big leap of faith. Um I asked her what she's going to do next. She talked about her philanthropy, focusing on women's advocacy, spending

more time with her family, getting married this summer. I asked about business in particular, and politics and whether we will see her in another business role or a political role. Take a listen to what she had to say. I learned a long time ago and never make any predictions about the future. But I think I think a lot of that is pretty unlikely. And I'm really I really think there's a lot, hopefully, that I can do with

my foundation and phil topically. What do you think she'll do next on or maybe you know, well, will we see her again in business or politics? I don't know, because I'll guarantee you Chryl Sandberg doesn't know. But you are correct, Emily when you said that Facebook's you know, Facebook. Cheryl had fourteen years at Facebook, aid of which where people couldn't say enough great things about Facebook and about her, And for the last six years, Facebook has been the

subject of an unusual amount of criticism. I think both the praise and the criticism got a little overheated. But Cheryl is leaving at a time when Facebook is down in reputation, although up in business, and it'll you know, she doesn't know what she's going to do next. She doesn't know what she's going to be doing five years from now or ten years from now. But she is young, she is incredibly talented, and whatever she does in the rest of her life, she'll do it very well. She'll

make an enormous fact. She's written two best selling books while she was also the CEO of Facebook, and I have a feeling that that would that that will continue to be a part of her life. It'll be it will be a very impressive life, ambitious. Indeed, you wrote an op ed don in twenty nineteen titled Why I Still Have Faith in Facebook? Do you still have faith in Facebook today, knowing the critiques, knowing the negative consequences. Do you have faith in Facebook without Cheryl Sandberg? And

do you believe in the metaverse? Emily? I was an insider in Facebook for seven years. I left the board in two thousand fifteen. I haven't been an insider since then. I am not party to their discussions. I don't know in depth any of the most recent business issues you're referring to. Yes, I have faith in Facebook. I think Mark is a very good CEO. I think Mark Zuckerberg is a very good person. I think Cheryl Sandberg is a very good person. They have faced decisions that would

be daunting for anybody. There's never been anything like Facebook, just as there's never been anything like Google or Amazon or Apple. And they've done their best. I know that. I know that they've always done it in a principled manner. And yes, I still have faith in Mark outlined a team under him, almost all of whom I know. It's a team of very good, very highly principled, very admirable people who've been at Facebook for most of them for

eight or ten years and more. Chris Cox, who Mark referred to, who runs product at Facebook, uh, is someone you should have on your air. He is one of the most impressive people I've ever met. He left for a time because he didn't like certain business decisions, talked it over with Mark returned in the same role. You couldn't the Facebook has deep issues to address us. You couldn't have better people addressing them than Facebook. Cat Chris Cox will be up next. I'm going to send him

that clip down and see if we'll join us. Don Graham, former Facebook board member, thank you so much for joining us. So uh important to have your rich historical perspective on the company, and Mark and cherw really appreciate it. Thanks so much. Bitcoin rebounded after slumping along with stocks Thursday met some resistance at the thirty dollar level, where it's been trading for the last month. Bloom Works. Katie Greifeld here with more on this case. Take it away. I

can't break the spell. Can't break the spell. Didn't have a good day today, I mean tech stock throws. So Bitcoin did as well, like you said, over two percent on Thursday, right around that thirty thou dollar per coin level. And that's important because Bitcoin has been stuck there for the better part of a month really since we saw the blow up of that terrorist stable coin. What it feels like a long time ago, but it was only

a month ago. So if we can sustainably break above per coin, you do have some technical analyst saying that there's more blue sky on the charts, but I mean it's been a really rough go. We've really been mired here and we're still down thirty five percent so far this year. And the story about Gemini layoffs, hiring phrases, you know, it seems like what's happening at you know, general tech companies and tech startups is starting to in

fact the crypto market as well. Yeah, like the point you just made, you're seeing this across the startup industry, but particularly in crypto right now. Actually before the show, I saw news break that coin base it's extending its hiring pause that have been announced two weeks ago. But then we just got news that actually they're going to resend a number of accepted job offers. Just very painful.

And that was hours after we got that Gemini news that they planned to layoff up to ten percent of its workface first, and remember in April Robin Hood laying off nine percent of their workforce. This draw down that we're seeing, it goes obviously beyond the price of the coins, beyond the equity shares. In some cases, it includes layoffs, hiring freezes, reduced spending, an investment. It's all playing out

in cryptol regy. Is there silver lining silver lining depends on who you ask, but it did catch my eye. There was a fantastic Bloomberg News article today about crypto political donations. Actually it is full steam ahead the last three months and all of one that's spending total about twenty six million dollars, which is amazing because if you compare it to other industries, it only falls behind the investment industry. That political donation that's more than you saw

from big tech, big farm, at defense. Crypto really stepping up ahead of the mid term elections, so we could see it grow even more. But what is also interesting that the biggest individual spender Sam Bacuman Freed, he is the founder of f t X. Of course he overall has pumped in about thirty two million dollars. That is seventy of the crypto industries total given SPF of f t X, making waves yet again. Okay, Katie, thank you.

Coming up tackling career development as we navigate a tight labor market on a potential downturn, as we were just discussing, we'll talk about all that and more with Guild Education just at a four point four billion dollar valuation. Guild founder Rachel Carlson with me next. This is Bloomberg. Guild Education just announced a hundred seventy five million dollars in new funding, hitting a four point four billion dollar valuation. The company partners with the likes of Macy's and Walmart

to create new growth opportunities for employees. This at a time when there are so many open jobs, which begs the question where are the workers? Let's talk about all this and more with Guild Education co found or CEO Rachel Carlson. So, Rachel, on the one hand, there are open jobs. On the other there are layoffs and hiring freezes. How do we square these two treads? You know? I think at some level, I remember you and others talking about the K shooped economy at the beginning of COVID.

I think that K is now inverting into the X. So the layoffs everything we're talking about, those are happening in tech and insectors that road the COVID wave. But for the average frontline worker, uh, that's not what they're experiencing. They're sixty five of frontline workers are talking about looking for new work. The great resignation remains, and for most of those workers, it's no longer about pay. They've seen meaningful pay wage increase to the fifteen dollar an hour.

They're looking for career advancement, and they're going to companies that will prepare them for the future of work. So how many workers who get up through up skilled through Guild are moving to these open jobs. Yeah, So we're really fortunate that we find that of the workers that

we serve, somebody who engages in the learning program. While it work relative to their peer who has the same job title but doesn't learn, the learner has a two point six x greater increase of being promoted on the job, and at some companies like Chipotle, you see that increase get all the way up into the seven x so sent higher likelihood getting promoted on the job, which obviously achieves the economic mobility that so many frontline workers are

looking for now. Big raise today, and I'm just so curious whether you ran into some of these market conditions as you were doing this fundraise, did it close before all the volatilities we've seen it? And how do you plan to conserve this cash that you now have in this macro environment? Uh? You know, I've been quoting my mom during the fundraise. She always talks about rainy day savings accounts, which is what we went out to raise,

and we kind of did it on a rainy day. So, yes, it was an odd time time to be pursuing a fundraise, but it was the right move for us. We often at Guild talk about our hundred year goals and what does it take to build an enduring company, and so

we're calling this rainy day funding. It's not savings or excuse me, it's not spending money, as my mom would say, it's to make sure that we can achieve the goals we want many years from now, and and we're raising it, uh with a mind towards cost discipline, not a goal to go spend it or change our budgets. Now, there have been some questions about guilds business and how often it really does take employees to the next level. How are you addressing that? Yeah, I mean we're thrilled with

the outcomes that we see from our working adult learners. Obviously, working to learners move slower, and so we do need to change our mindset about how we measure their outcomes. UM higher ed's trained to say how fast do you graduate? And and that matters, But we think about graduation as an input and economic mobility as the outcome. And so when our learners are advancding and you know, interestingly enough, a large percentage of our learners see a promotion even

before they complete their program. And that's not how the typical professor or hired institution thinks. But if you move away from a degree based world to a skills based world, you can get rewarded for those skills even before you complete the degree. So we're trying to change the paradigm of how we think about how do we reward people for the skills and the advancement that they want to see in their career. I'd love to get your thoughts

on Cheryl Samberg. You know, obviously it's kind of a big historical moment her leaving Meta, you know, after fourteen years and writing lean In, and you know, I know for many women and many women in business, she's a role model. She's also a very controversial figure and some people don't necessarily buy into the lean in mentality. Well, what's what's your take? I mean, what a Cheryl Samberg

sort of symbolize to you? Yeah, it's interesting. Um, I've been thinking a lot about female leadership of late as you know, Oprah joined this round and I often talk about her as my my favorite model of empathetic leadership. To talk then about Cheryl and many others, like, we need lots of models of female leadership there. Men for hundreds of thousands of years have had a whole catalog of different models to choose from and find what feels

authentic to each individual as a leader. You can't be what you can't see, and so I think having strong female leaders with a whole variety of leadership styles is super critical, especially for those of us in an industry where fewer than two percent of us in the venture space of our female Absolutely, So, how do you spend plan to spend this money or do you plan to maybe spend it a little more slowly than you might

have in a different environment. Quickly? Yes, So if you know, if my mom's watching, we committed this is a rain this is a rainy day fund. We're not spending it. We're not changing our budget this year, um, but we're you know, we're solving a societal problem at Guild that's

gonna last for many decades to come. And so we're thinking about how do we fund our busines this into perpetuity, not how do we fund it for this year, but what we are maintaining in an in a time of uncertainty, as many other companies are changing their plans, were maintaining our commitments um first to ensure that we're capturing all

the amazing employer momentum we're seeing. Far more companies are now ready to take this jump and fund their employees going back to school, and then we're really advancing and career development, making sure that all of our members can advance. Rachel, thanks for joining us, and shout out to your mom. She's jumping up and down right now. Rachel Carlson, CEO of Guild, thank you. That doesn't for the sedition of Bloomberg Technology. We'll be back tomorrow. I'm Emily Trying in

New York. This is Bloomberg