From Mahard where Innovation of money and power Collie in Silicon Valley.
N Beyond This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
Ed Lovelow here in San Francisco. Caroline hides off today. This is Bloomberg Technology coming up on the program for earnings coverage ahead from Qualcom to Etsy, Expedia and beyond.
We got you covered.
Plus, we sit down for an exclusive conversation with Flexport founder Ryan Peterson, who's joined Founder's Fund as a partner. His thoughts, where he's going to invest in the world, adventure capital and super conductivity. It's having a moment. Everyone is obsessed. We'll explain why a potential breakthrough in the technology has been driving both excitement and controversy.
Let's get a quick look at the markets. First.
We are treading more frankly on the technology corners of the equity market. You look at the Nazek one hundred. Basically, flat earning is a big part of the story. But we see as sell off in treasuries. The yield on the US Tenure Treasury at its highest level in nine months. There is concerns about the costs of borrowing more dynamic movement.
In the chip space.
The Philadelphia Semiconductor Index or SOCKS underperforming software by three tens to one percent. A big part of that is Quowcom down ten percent. We will get to those details with bloombergs Ian King shortly. The two big ones that we're braced for, Apple and Amazon report after the bell. We're going to look ahead and think about what the macro environment means for those two names, both from the consumer perspective, but when it comes to Amazon also the
cloud narrative with AWS. Remember last week Microsoft showed slow in growth in cloud that is their biggest direct competitor. Does it translate to AWUS two earnings already out and weighing on markets this morning, Etsy and Quowdcom study Wetsy, Yeah, Look we're down twelve percent. Concern about the growth outlook for them. We're going to go talk to Schwedder Cajuria about that in just a moment.
And then Qualcom down ten.
Percent, tracking on a closing basis for its biggest drop since March of twenty twenty. The story here is that this is the biggest maker of smartphone processes in a market for smartphones that is having one of the most severe slowdowns for a long time and it continues. The outlook that they gave was worrying for the current period. For more, let's bring in Bloomberg's Ianking. He covers everything semiconductors for us. What were the sort of main takeaways from that earnings print in Yeah.
I mean, the big focus here was where are we with the smartphone inventory correction? And the answer was, we're still in that inventory correction China.
You know, everybody was.
Hoping the Chinese consumer would come back, and that just doesn't appear to be the case.
It's the main market, right, and you forget that in China there are many domestic players who make Android platform phones. The other data point that we get from Qualcon is this full year shipment's forecast. What did they say about twenty twenty three relative.
To Yeah, I mean, it's a down year. You know, we're looking high single percentages down from a year ago, and that clearly indicates that not only have we still got inventory, but also consumers just aren't coming rushing back.
When I think of Qualcomm, I said it just then the biggest maker of smartphone processes. The other side of their business is modems, and we are always asking questions about the future relationship between Qualcomm and Apple and the iPhone. What did Cristiano I'm on the CEO say about that?
Yeah, I mean this is this always comes up on their call. This is always a point of contention because obviously they had a massive legal fight and Apple was forced to go back to them and ask for their technology. So that's the background. What he did was confirm that when we have the new iPhone later this year, qual Com will be in there. Their modem will be what takes that iPhone through the until next year. And just want to know, so, hey, is this the end of
the show? Do Apple do their own thing? As Bloomberger's reported, And he just refused to talk about that. So that leaves open the potential that maybe we'll see Qualcom in there in the future.
We were just showing actually some of what Christian Ammon was saying. I want to bring those comments back because the other standalone story was then reacting to this environment with cost cutting measures and that includes job cuts.
What did they say, Yeah, No.
I mean we'll then actually say explicitly on the call, but if you deald into the filings as we did, you saw that they'd had more than two hundred million dollars of severance payments in the previous quarter, and then they said, look, this is likely going to recur again in this quarter. So clearly they are moving around their workforce.
They said, look, we're going to concentrate our resources on what gets us going in the future, but that means that they're probably going to shed some jobs in other parts of the company.
That's what we do here at Bloomberg Technology, not just the earnings print, not just the call that Ian King goes saluthing through the filings and that's where we find the GC details blooms in King, thank you very much.
The other name that we're talking about top of the.
Show, Etsy falling is look basically failed to re ensure investors on growth s get more on Etsy's earnings and bring in Sweater, Cajuria, ever core Isa and lest Sweater. You've got an outperform rating on etc. Which is interesting, also a one oh five price target. What were the main takeaways for you from that earning sprint?
Thanks for having me, and a few things.
One, there were some positives and then clearly there are some negatives and as you mentioned, the stuffs trading off. Part of the reason why the shares may also be traded on off, however, is that there was some run up into the print with expectations, so modest expectations correction in addition to just a lower than expected guide.
So on fundamentals too.
In terms of what I took away from from the earning skull, there are some green shoots.
First thing is that buyers came.
In at an all time high second consecutive quarter of year of your growth. Second is that the habitual buyer, which account for about forty five percent of their GMS, actually started showing signs of stabilization, and that's a key metric. And then third is GMS per active buyer, which is somewhat of a purchase frequency proxy, also showed signs of stabilization and that's also a great metric in terms of looking at improvement.
So what did not work well?
Etsy is a highly discretionary platform and they are continuing to see pressure macroeconomic pressure on the consumer wallet. They did call out that households that make less than one hundred thousand dollars in income are seeing a mix shift in spent away from discretionary to nondiscretionary spend.
They also talked about some categories seeing.
Some green shirts, such as home and living crafts in apparel, but there are a lot of other discretionary categories that are pressured. And they also are talking about just generally consumer spent being pressured because of the end of student loan forbearance as well as the child tax credit that will be coming in. So all of that is pressuring the consumer spend and they are highly skewed towards discretionary spent.
I want to think about it. See is a technology platform sweter. You know, it is a place where the consumer meets small retailers all over the country, all over the world of different sizes. But what is it that differentiates them from a technological perspective.
Well, there are a couple of things.
So first is that it's the type of product that they offer on their platform. It is very difficult to create a marketplace with a sticky set of sellers which they have and a largely sticky set of buyers who are either coming to the platform at least once a year, if not more, on a regular basis. And that itself is lightning in a bottle. That's very difficult to replicate at scale. Now they have over ninety million active buyers, so that's really good scale in some of their core markets.
That's number one.
And second is a uniqueness of the products that are offered so often times at Seeds compared to an Amazon or an eBay, but they know what they stand for. It's not the typical auditized product that you can compare prices over across different platforms, whether it's offline or online. It's really a unique custom item that you want which is special, which means something to put customers across different categories.
And they have created a place for themselves in that sort of you know e commerce when we think about e commerce as a category, and so that is.
Unique about them.
And then the other thing about the technology is they when we think about where ets was and where.
It came, I mean several years ago, they didn't have the management team that they have today.
This is a truly a turnaround story, and a huge reason why it's a turnaround is because what they did to the product, the user experience is phenomenally better, and the search experience is so much better, and they are constantly iterating on it to drive user experience and engagement on their platform.
So far, they've done a great job.
Schweida.
The FIFA Women's World Cup is on right now, and that's got us thinking about Fubo TV report before market Friday.
What are you expecting from them?
I find them such an interesting platform, the teeny tiny but they still stand out in the market they do.
We actually are on the sidelines with Gougo primarily because we think that they do have profitability issue.
Now, this was an asset.
This is a business that went public when businesses were given credit for, you know, just driving top line growth at the cost of bottom line, but that no longer holds true, and now Fubo.
Is at a place where not only do.
They have competitors which are much bigger than them, but they also have to focus on raining in their top line growth. It's so bad they can become profitable. They also have debts that they need to think about, and they have a limited liquidity, so they're trying to not have another capital raise and become self sustaining, and in a while they do that, they also have to show top line growth.
So that is the biggest challenge.
That Googo has and that's why we're on the sideline, just specifically to the sport. They typically guide conservatively, and this connective TV engagement has been going up. We saw a pretty good beat at local for example, and overall the demand for live sports, especially because of the writers strike, Viewers are shifting a little bit towards live sports as well as news because of.
The lack of content.
Yes, Hollywood writers strike, so that should also benefit Fubo at the margin. So I expect a beat and a bracket sort of a quarter, But fundamentally this is an asset that we question in terms of the longevity of the business.
Yeah, that consumer behavior questions exactly where I wanted to go. I subscribe to every platform under the sun. I love all sports, but you can get what you get on Fubo elsewhere as part of a broad package. I'm thinking, like Peacock Paramount Plus for example, how do.
They survive in that landscape.
It's so crowded and when you have a tough macro environment, consumers have to make a choice.
That's absolutely true.
Pubo's value proposition is they have at the margin, they have some exclusivity on content.
So regional sports, for example.
You can find only on Pubo, and then there's some soccer games that you can find only on Google, so at the margin there is some exclusive content that you can get on Google. The second thing is also just the user engagement.
Google was built post.
All this connected TV everything came on, so their product is very new, it's not our take, and it's easy to use as well. It's easy to navigate, so that's another reason why UH viewers are choosing Fubo where maybe
some of the other platforms. And then finally the third thing is that they do have a They have created a brand name around themselves where almost all viewers view them as a sports first offering, and it's good branding on their part, but it's you know, the marginally exclusive content, but still that brand name of their sports first and they offer a lot of engaging sort of user experiences when you're watching football as it leads to fantasy etc.
And that's as for you to use Pubo.
We got to keep talking about it, you know it later shows because Messy Mania, in the context of Apple TV is really put football soccer in this country in the streaming issue. Front has said Schwedder Cajuria Ever, Koris I, we love having you on the show.
Thank you for your thanks for having me.
Shopify made progress in its attempt to prioritize its core business after cost cutting and price changes. The Canadian e commerce giant reported second quarter sales and profit that beat analyst expectations. President Harley Finkelstein said the results speak to Shopify's efforts to improve shipping and expland its global merchant base. Harley joins us Now, good morning, good afternoon to you.
Harley.
Okay, so a beat in the quarter, somewhat negative share reaction, and Morgan Stanley actually raised it price target on the stock fifty four dollars to fifty nine. But they point out that what was missing was a roadmap for investors to understand how you're going to grow in the future.
So let's start there. How are you going to grow in the future.
Well, look, I mean you started by talking about our announcement last quarter when we reported on Q one, we talked about that we are really you know, creating a new shape or ketting a new shape of shop Flight make sure we can go faster with greater talent density for focus on our main quest, which is commerce software and retail software. And the results are you know, the results exemplify that right. Revenue is up thirty one percent to one point seven billion gmbs up to seventy was
up to fifty five billion dollars. That's up seventeen percent. I think the thing that people missed, however, is that we are also earning more parts of merchants businesses. We use a metriccure called the product attach rate, which measures the usage of our products, all of our products by our merchants, and that was above three percent for the
second time. All that and we also had the third consecutive quarter of positive free cash flow and we expect that actually free cash flow profitability for the third quarter of this year to be great at the entire first half.
So we're really firing in all cylinders here.
But in terms of our you know, the future and what we're looking to do next, there's a couple things.
First of all, we now.
Know that most people that are considering starting a business do so with Shopify. People that have ideas in the shower in the morning, aspirational entrepreneurs, Shopify is the go to for them. Now we know all not all will succeed, but the ones that do come to Shopify and stay with Shoplight long to the future. I mean that's the Gym Sharks stories, that's the all Bird story, the fig story, these homegrown success stories. But we're also seeing very large
brands coming to Shopify as well. Whether it's companies like Spank, or it's Mattel, or it's Colossier, or it's Staples.
We're seeing the enterprise come to us too. So that's the first thing.
The second thing is when you look horizontally about our through our merchant solutions, whether it's Shopify Payments or Shopify capital or shop Flight audiences which helps you buy ads more effectively, or things like Collective, you're seeing we are looking across every pain point that a merchant may have
and making it easies. Even and I were talking offline earlier, just before we started about the size of Shopify in Shopify now powers more than ten percent of all US e commerce retail which means that if we were a retailer, we'd be the second largest retailer in America online retailer in America. And that means that we can now get incredible economies of scale and give them to the millions of stores that you shopify, and we are set up with the future and we're Yeah.
So, Harley, I understand this story. The primary growth engine business formation, and those new businesses stay.
With you for a long time.
So what happens in a recession when new businesses are not formed.
Yeah, there's two things that happen in a recession.
First of all, existing businesses look to one modernize the technology software they use, and they look to also find the best value, the best value in the software to use.
That's Shopify.
I mean, for thirty nine dollars a month, you can build a multimillion dollars in some cases a multay billion dollar company. So Shopify's value to cost ratio is so far on the side of value that even in times of recessionary pressure, we've seen more and more merchants migrate to Shopify.
That's the first thing.
The second thing is on the consumer side. One of the other things that we're seeing in you know, the GMV. This quarter demonstrates that we had we saw fifty five billion dollars of GMV flow through Shopify. Consumers in these recessionary times vote with their wallets to buy direct from the brands they really care about, and all those brands are on Shopify as well. So both on the merchant
side and the consumer side. We think that we've been around for almost two decades now, we've seen that we do well in both, you know, Boom cycles and and and and bear cycles, and we'll continue doing that.
Harley, can you quantify it the exposure that the Shopify has to new business versus I suppose the way of putting it is established online merchants.
Yeah, that's the best part ed. We can do both.
So the idea that you can start, you know, you can you have an idea in the morning to sit down at your mom's kitchen table or at a coffee shop and you can build a store on shop line a matter of a couple of hours for thirty nine dollars. We see that happening every single day. At the same time, we're seeing much larger brands migrate over to Shopify as well, whether it's the Alo Yogas or the Viewrys or the Spanks or Supreme, one of my favorite brands coming on
to us to leverage this enterprise scale software. So that's the great part of the business model. It isn't simply just one segment of the market. It's the entire e commerce stack. And then when you think about the future of retail being retail everywhere. I mean our point of sale product this particular quarter had an incredible had incredible quarter.
We're now going and ripping it and.
Replacing old, dilapidated traditional point of sale system with shop by point of sale, and what you end up with is a fundamentally a retail operating system.
And I think that's what modern retailers want. They want one single.
Place where they have an entire view of their business, regardless of sales channels. I heard a previous guest talk about, you know at sea being a great sales channel. Well, from Sharpify, you can push products at etty if you want. You can also push products to TikTok and Instagram and online and offline and everywhere.
But it all feeds back into one.
Centralized retail operating system, and that really is a sharp line product.
There's a relationship between Shopify and Amazon, Amazon reporting after the bell, and it's focused on fulfillment.
A lot of.
Folks I've spoken to want to understand what progress is there the relationship with Amazon and shop Fire.
To many, it's kind of been a slow mover.
Yeah.
Look I said this on the car yesterday because I got a question just like this. You know, we're still progressing there, but there's no news for a problem that just yet.
Okay, understood.
We started this segment talking about the cost cuts you've made, particularly in the context of profit, and then the roadmap, a lack of roadmap for future growth. To excuse me to cost cuts continue? Or are you going to start investment mode again to start growing this business?
Yeah?
And the important part to understand but opify that I think a lot of our investors, and I should think you probably know this too, is that we have always been very thoughtful but spending, and we've always spent in a very disciplined fashion. We were not raised on venture capital the way some of our peers were, so we always from the very early days of Shopify, we always made sure we stretched every dollar. So spending will happen,
but in a very disciplined fashion. And so what we think what we're seeing is that while opex will remain stable, revenue will continue to grow in revenue again up thirty
one percent year on year. When we see opportunities, however, where we can actually have incredible returns right now, for example, and things like offline marketing and point of sale where the cost of customer acquisition profiles look really in line with an optimal CAC to LTV ratio, We're going to take those and we'll spend there, but we will always
do so in an incredible an incredibly disciplined fashion. In terms of the team size that you mentioned, we want to make sure we retain the best and the brightest on Shopify. We really like the size of the company right now. We expect head counter remain largely consistent and we're not looking at undo any the head count decisions from last quarter. But obviously we do want to make sure the best um breads come here and stay here and what can you do so in a very discipline buffer with all.
Right, Shopify President Harley fink Lstein, When you're ready to talk about Amazon, do it back here on Bloomberg Technology.
Thank you. They're coming up here on the show.
A new high score for Nintendo for the release of some new summer games. You know exactly the title I'm talking about. Earning's recap coming up next, watching shares the door Dash reporting record numbers for delivery orders in the second quarter.
Consumer commitment to.
Take out despite those rising prices, shares up four point eight percent.
This is Bloomberg Technology.
Time for talking tech.
First up, Nintendo hit a new high for first quarter profit after the successful launch to its latest legend of Zelda. The game propped up sales of this console, and the Super Mario Bros. Movie tripled Nintendo's licensing income. The Kyoto based company reported op profit of one point three billion, beating expectation. Class investors continue to pile into Korean stocks related to superconductors amid claims of breakthroughs in the tech.
We'll talk about that one a bit later in the show, amid some development and Juell seeking to raise about a billion dollars that according to Bloomberg sources, the e cigarette company that almost went bankrupt last year, is working with Jeffrey's financial group.
On the fundraising effort.
While Jewell's valuation in the round remains unclear, it's expected to be dramatically lower than the thirty eight billion dollars it was worth in twenty eighteen. Now coming up here on Bloomberg Technology, traveling with AI, what it means, the tail end of travel season and their earnings with Expedia CEO Peter Kern From here, in San Francisco. This is Bloomberg Technology. Welcome back to Blueblow Technology. Ed Lovelow here
in San Francisco. We're looking at shares of Expedia now down seventeen percent, posit on track for its biggest drop since March of twenty twenty. Some concerns about top line growth. Second quarter profit was above forecasts. We're entering the kind of key period or tail end of the summer travel season. Joining them now Expedia CEO Peter Ker, and Peter we do have to start with the reaction. The stock is
down seventeen percent. Is the concern from the market justified about the growth trajectory of your company?
No, absolutely not.
I mean, we basically delivered what we told the market we were going to deliver, and in the quarter just past the quarter, we launched our new big rewards program. We've made huge technical advancements, and we reaffirmed our yearly guidance.
So not sure what the market was looking for.
They're looking for concerns about the consumer, But basically we were on our plan and really excited about the back half of the year, So we were you know, other than the charts you have buying me, we're very excited about where we are.
So, so, Peter, what's the story, you know, how do you see this travel season having played out and what are your signs into the rest of the year about bookings and the health of the consumer, because it is what the story wants to know about, as you.
Note, yeah, yeah, absolutely, no, I mean when we look ahead our pacings for the year up versus last year and prior periods, all prior periods, basically we've had, you know, very good. There's been very high interest in international travel. What you've seen is the travelers moving around a bit. So you see pockets that might be retreating a little bit, but other pockets advancing. So Asia is very strong, Latin
America is very strong. The West US, North America, and Western Europe you know, have slowed somewhat, but they've been stable. So basically, customers will around. Cities are very popular, International cities are very popular. International travel has definitely equipped domestic in the rebound. Again, it's sort of this COVID unroll that we've seen again and again. People go where the next thing opens up or where they haven't been able
to go. So domestic was very big, then international got big. Now Asia's coming up because Asia is opening up, so we see it in waves, and you know, as we look out, the consumer is very strong in travel, demand remains high. There's not much evidence of really at all of ADRs. You know, pricing dropping. Yes, you can find that domestic air in North America the prices have come down a little, but in international.
Air they're still very elevated.
And international hotel hotel generally has been very stable in ADRs. So there really isn't much evidence of a consumer lapse here in any way.
Peter, you're joining us from London. In fact, you're sitting in the chair that I used to sit in when I was at QBS. It's a nice chair. Is there a sort of different perentiation between the health in different markets of the London consumer, European consumer and what we're seeing here in the United States.
Well, I think you know again, you're seeing, first of all, there's a lot of people from the United States in London right now. You know, Europe has been a popular destination for North American travelers this summer because last summer they weren't traveling as much internationally. So now every city in Europe is full of Americans and likewise, European travelers are traveling to other international cities, so you're seeing a lot of that, but the health of the consumer is strong.
You know, we still haven't really seen it even at the lower ends. It doesn't mean there isn't you know, you can't find a pocket of a city or a destination that's slightly lower for example, mountain destinations beach destinations are slightly less popular this year in favor of big international cities. But it doesn't mean the travelers less willing to travel or spend.
It just means they're moving their.
Dollars around and that creates small pockets that might you know, where you might see some reduced interest, but that's from super high elevated.
Interest across most of these markets.
So this is you know, a slight teaming and a few spots and strength in other spots that make.
Up for it.
You've been doing some investment in technology, technological streamlining behind the scenes, so the sort of.
Loyalty and rewards program.
How do you see that driving your business in the near term but also longer term as well.
Yeah, it's a huge investment for us.
I mean, first of all, we've invested over the last few years in a huge technological transformation to bring all our stacks together, all our brands together on one technology so we could go faster, innovate faster for the consumer,
and really our loyalty. Our new loyalty rollout of one Key is a great example of all of that coming together, where now our big three brands will be under one loyalty program so Expedia, Hotels, dot Com and Verbo people can earn rewards which is basically like money, spend it on any product they want across all of those brands. And it's you know, it's the culmination of a bunch of work that's been going on for more than two
years to really change our future. And our idea is a simple one, which is we want to build the best products that consumers are loyal to get them into our loyalty plans, get them into our app where they can have the best experience, see the most discounts, the most rewards for their travel, and that that will create a sticky relationship with our consumers and they'll come back direct to us. And we've seen it again and again
in every industry. We think there's huge opportunity for innovation and travel and we think we're doing the most with technology, with AI and machine learning to personalize and all of those pieces to really create the next step forward. You know, we invented the category, and we're trying to reinvent the category for the next decade or two with new product, better consumer proposition, and really a much stickier, less just transactional kind of product that travel used to be.
So bear with me on this one that in Metas earnings, we saw evidence that AI recommendations boosted their AD sales. As an example, give me some tangible examples of how artificial intelligence aids the consumer on your platform but also just helps you guys make more money.
Yeah, so we use it really everywhere we can, and that doesn't mean everywhere yet, but throughout the product, from everything from optimizing the pictures you see.
You know, you might be.
Traveling with a family or kids and we will show you pools, or maybe you're traveling by yourself or a couple and we might show you bars or rooms or other things like we optimize that, We optimize how you search. We use machine learning to better move the pieces around the page so you're seeing the things that are most relevant to you. These most easily or to simplify how you shop. So you might know that some rooms are called the Queen Size Superior, some rooms are called the
King size, some of the city view. You know, we've done all the work to compare all those things so that you can easily see them side by side and understand, uh, you know, using AI and mL understand what the options really mean and what the differences are. So we're using it in all kinds of simple and elevated ways. We've also put shat GPT into our iOS app. We just
launched it in our Android app. So we're giving people that utility if they want to use it for discovery, and then we save products that they've looked at and they can go compare them later.
So there's lots of places we use it.
But some of them are quite simple and straightforward, you know, personalized search and other things, and some of them are the latest large language models and all of those opportunities that are still ahead of us.
All right, Expedia ceop to Kern, thank you so much for your time. Another stock that we're watching, Aurora Innovation, just raise the better part of the billion dollars. The self driving company working with transportation industry leaders like Toyo to FedEx Volvo to basically operationalize self driving semi trucks, but also we think about consumer vehicles. The stock down seven tens one percent, have been up earlier in the session. The story in the court gone shrinking losses, which is
a good thing. Joining us now or Aurora CEO, Chris Holmson, it's good to see you in person again.
Yeah, once in a while.
Let's start with the money.
You know, it's eight hundred and twenty million dollars or so, how have you explained to investors how you're going to use it?
Really, so, I think first and foremost, it is kind of incredible to raise that money in this environment. Really a strong vote of confidence from the investor community. What it's about is delivering our products. So next year we expect to have trucks on the road with nobody in them and begin commercializing automated trucking.
You and I have spent some time together in Texas on the road in these semi trucks, you know, with the safety driver grand tipped. Just explain the pathway to making money on a business like that. I mean, for those that's the frustration understanding the application of the tech in the real world.
Well, we have the opportunity of having a product that's going to have an incredible impact for our customers. We can help their top line and really drive down their bottom line. So, if you're a trucking company today, what you really think about is how much money can I make per truck? And you're limited based on the fact that people are limited to drive trucks eleven hours a day.
With your raw driver, we.
Expect to be able to drive twice as much and so you can double the revenue per truck while making it easier to have drivers by making it safer on the road, improving your performance as a business.
We have seen this industry consider its long term WAYMO has reevaluated it's trucking business and refocused on the passenger vehicle. How do you view that split? Do you want to do both or just focus on the core trucking business.
So we've been building a driver to work for both from day one. Now we're going to focus on trucking first, but we have an incredible partnership with both Toyota and Uber for the long term. We see trucking as a really great way to build a business. Here because the opportunity is so clear and present. The market is about ten times bigger than the right heiling market, and the
unit economics are much stronger. So for a new technology, that's really what you're looking for as a business where you can grow into it and.
Be profitable very quickly.
We had Dara Kostrashahi on the show last week and this week by loose sense of tractive of time, But the point is it's a partnership between the two of you. I think Dara's on your board as well. So explain to the consumer watching the show the future of what Uber using Aurora's technology looks like.
Yeah, so a number of years ago we were fortunate to acquire Uber self driving car business, and that was the kind of the foundation on which our partnership has been built. Dara's business, as I understand, it is really about providing the network and providing that interface to customers.
We're really about providing drivers, and so we'll begin with trucking where we can help other businesses including Goober Freight, operate theres and then in the long term we'll provide drivers to help provide it make it easier more equitable for people to get around.
Chris.
You've been a leader in the self driving space for a long time, and I feel like, you know, I've been talking for a long time about we're close, We're close, We're close.
Where are we to your mind right now? In real world.
Deployment vehicles that do not have a driver in the front seat.
I think it's an incredibly exciting time. The zeitgeist is kind of out of phase with reality.
So about five years.
Ago it was, Oh, this technology is here, Everyone's going to have it tomorrow, and that was clearly not true. Whereas today, you know, there's increasing doubt about whether this is going to happen, but in practice it is happening, whether it's on the streets of San Francisco, or Ila or Phoenix, or with us hauling loads today for customers delivering goods.
The future of Aurora is a standalone business. I know you've raised the money. The capital is significance, but do you still have full confidence that the best way to go is a business model where you just make the tech and you provide it rather than say, sell yourself to a fleet operator or you know there are others that have taken that route.
Yeah, I've never been more confident about the prospects of our business or the path we've taken.
To get here.
You know, over the last six seven years, we've really made a number of strategic bets, whether it's on our light, our technology, on our simulation techno, in our partnership model, and that's all kind of playing out as we see the competitive landscape kind of winner around us.
For or a CEO Chris Soon, it's good to catch up. It's been a while since I've been in that self driving semi on the roads of Texas. Now coming up here on Bloombay Technology, we sit down for an exclusive conversation with Flexport founder Ryan Peterson, who's just joined Founders Fund as a partner.
This is Bloomberg time for VC Spotlight.
Ryan Peterson, the founder of logistics startup Flexport, has joined the venture capital firm Founders Fund as a partner. Ryan joins me now here on set in San Francisco. I mean that's how we know you. We know you as Flexport. We saw the news that you've joined Founder's Fund.
Why you know, well, Founders one's been probably my most like consistent backer of flex War. I think they led our series A arb are participated in the C and the D and then led the E round. So like I mean, basically, they've been with me since day one and they've been incredibly supportive of the company. More importantly, I feel like flexpor has this incredible leadership team in place. Yeah, we did Clark, and also a really strong group of people under him, both people we've had for a long time,
and so a lot of new folks too. I felt like the company is doing really great in a really good place. There was less for me to do, and I'm kind of like an all or nothing guy, and I don't like the nothing side of that.
I'd like want to go all in.
Do you completely walk away from Flexport?
Oh?
No, definitely not. Okay. In fact, I.
Feel like I'm working more on Flexport since I joined Founders one than I was before, because it's like, I don't know something about the energy of working hard that leads to more working hard.
Okay.
Have you always been interested in being an investor? I find that relationship interesting. You spend a lot of your life trying to raise money as a founder. Are those transferable skills.
To go the other way?
I don't know yet.
Yes, I've always been interested in being an investor. I think I read Benjamin Graham The Intelligent Investor when I was about sixteen years old for the first time, so always been very interested, even was interested in stocks before that. So yes, did I have aspersion to be a VC.
No.
In fact, even as recently as.
Like a couple of months ago, I wasn't thinking about that. But I found just want to reach out to me, accorded me, and convinced me that I can still run Flexports. He'll be actively engaged in Flexport, let's say, as the chairman and do this job. And they've got I think
I'm the fourth or fifth person I founder fund. It's like almost full time running their company and being an investor in taking on two jobs and working hard, and think being in the arena running a company or being really active in the company like I'm doing, can help you be a better investor.
So you said, I think that you want to be a generalist, that there must be some criteria or some thematic strategy that you're looking at.
I'm a generalist in life. I try to learn a little bit about everything. That's my number one value is learning, and being a VC is an awesome platform for that. Because I get to see all range of ideas and stages and business types, business models, geographies everything. For me, that's what I love is like learning, meeting people helping them as for like a specific theme.
No, it's much more about the people.
Like I want to find people who are really in it for the right reasons, like very passionate about what they're building, maybe have a chip on their shoulder, feel like they've been wronged in some way at some point in their life, and want to prove to the world that they're they're the best, not just people who are, you know, trying to make a quick book or get higher status by starting a company or something like that.
But open minded to size stage secta.
Yeah, So Founders Fund has like we like to go in the earliest stage. In fact, we've started some great companies and ORL was incubated inside of Founder's Fund where we like to be early because of course you get better returns if you're early. But we have a very large growth fund, three billion dollar growth fund to do later stage stuff too, so we got to be looking across all stages.
Alongside being the founder of Flexible, I've been reading about you. You've been an angel investor, and you've been associated with many startups one.
Hundred or so. Yeah, what have you learned from that?
Are there sort of specific red flags when you're speaking to a founder or things that really attract you about backing someone.
Yeah, I mean I get to meet a lot of amazing founders and have an amazing network.
Now I've met, you know, probably a.
Huge percentage of the of the great startup founders, and at least in the San Francisco area over the last decade.
I think I have to.
Unlearn as much as I learned.
Angel investing, you're sort of like, well, just take a bet, do one hundred investments.
It's a conviction. It got cool.
Yeah, And there's also you're writing other people's signal. There's some other VC who's leading this round. You're not really pricing yet, You're not making the decision is.
This a go or no go?
You're sort of like, these smart people are investing, I'll just throw in a check and go for it. B NFC is very different. You have to have conviction. You have to convince the founder you're the best partner. You're not just like sliding a check into a out a round like you are as an angel, so I think I have to unlearn as much as I learned.
You fresh into this new journey with founders that what's your kind of working relationship been like with Peter Teel and has it changed a tool from the time that you've led Flexpoor You talked about founders leading many of the rounds in the company.
Well, I think you know, Peter is an icon and he founded PayPal, and we PayPal Mafia.
Famously went on to start tons of companies.
Well, Peter was the CEO of that company and the founder, so he's got probably the best network of anybody in the technology industry, best track record of investing founders fund like I mean, you can talk to the LPs the best results in the last certainly the last cycle, and frankly,
I think comes up with the best original ideas. I just love, like every six months or so he drops a new video that you can find on YouTube, and just like, I'm not saying all the ideas are right, but they're all interesting and it's pretty amazing to get to work with him. He also wrote the best book on startups the last twenty years, so I think everybody should read if you're building a company. Zero to one coming up on the tenth anniversary of that, and that's
an incredible book that everybody should read. So I think there's a lots of leverage there and write off his coattails and learn from him. I wouldn't say our relationship has changed, and hopefully I get to be a lot more intimate and spend time learning about, you know, like deep in the weeds, what happens behind the scenes.
That I'm excited for that.
I know that you've outlined some experience in being an angel investor a bit literally in the last two or three weeks. How has your day to day been. Have you had a lot of inbound from founders or have you been out there in the real world looking for things both?
Yeah, tons of inbound. Thank you, everybody keep reaching out. My dms are open on Twitter, so lots of great inbound, lots of referrals from friends and network and other CEOs telling me about companies. I've probably already said no more times in the last three weeks than in my whole career combined. And it's kind of the nature of VC is you have to say no to ninety nine point
nine percent of the stuff you see. But so I have to figure out how to do that in a way that people still like me and want to talk to me and hang out with me and send me more stuff. But yeah, and interestingly enough, I'm finding myself going back and working harder at Flexport. Now there's something about it again, like working hard leads to more working hard and so getting more involved.
In the sales process. Flexport needs to keep growing and being successful.
A story of the year we're talking to everyone about is X. You're active on X the platform?
For me?
Notice Twitter? Any idea and everything app? What is your take on and everything app?
You're confusing if you're calling it X, So like, wait, what Twitter?
I don't know enough what the vision is. I think Elon has had a pretty consistent track record. I would I definitely wouldn't bet against him, and I think twitters are the most important technology platform out there in terms of social media and the ability for everybody to communicate. We take it for granted, but it's so awesome that you can like just message with anybody on planet Earth, anyone who's on there, which is a lot of the intellectual thought leaders on the planet.
Ryan Peterson all found is fun.
Now we've known you and building by technology for so long as part of Flexport. Thank you for coming in and talking about this next journey with us.
Come back when you make some investment.
Oh yeah, my applies are gonna be great.
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lowering bills, and helping to coe glibal warming. That does it for this edition of Bloomberg Technology, check out the podcast for the recap.
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