tv Bloomberg Business Week Bloomberg January 23, 2016 12:00pm-12:31pm EST
>> hello. welcome to bloomberg business week. >> coming up in this week's cover story, race and silicon valley. we track the efforts of howard university to have more minorities hired at leading tech companies. >> we'll also meet one of ted cruz's biggest backers and explore the unusual interest of robert mercer. >> in the etcetera section looking for a butler but don't have millions? we'll see if hello alfred will solve your domestic challenges. all that and more as we go behind the scenes of the latest issue of "business week" here on bloomberg television.
>> there are a lot of interesting stories this week but one thing that stood out for me in this week's edition had to do with 10,000 baby boomers retiring every week. a lot of older individuals leaving companies and companies are getting a little nervous as to what they're thinking about and doing is implementing programs where they take the older employees and help to teach the younger generation. they don't kind of have a leadership gap. >> this issue of secession is so key at some of the bigger companies. g.m., general electric, some of those starting to think proactively about what is happening down the line. >> tapping into the millennial generation. >> another great story about american express. for a long time the sign that you made it. they've accepted you. you've gotten their card. the company tried to expand, get more people cards. people of lower incomes, middle incomes. in fact, doesn't seem like that's working out well for them. >> they are having a tough time trying to widen their audience. you like a good cup of coffee? >> of course. >> bacterial chemistry. a furry little animal, basically you've got a startup in new york trying to kind of
duplicate what this animal does. >> don't give it away. >> it's a great read. >> absolutely. a great issue here this week in "business week." >> silicon valley tech companies all say they want to hire more african-americans. why don't they? >> business week examined the placement scheme at howard university where more than 8 of 10 students are black and joins us on the phone from fort collins, colorado. start with a stat you mentioned in your article. you looked at the percentage of african-americans in the whole population. you look at the percentage in silicon valley. you say no more than 1% of technical employees at the biggest companies there are in fact african-american. why is that? what's the biggest hurdle? >> there have been a lot of issues. to be honest i think in the past there was a lack of attention to this issue on the part of companies and only recently around, you know, the past five years or so companies have started to think about this issue and try to figure out how to address that.
but it's happened slowly and at the same time, the universities who are educating disproportionate numbers of black students have only again over the past couple of years started to look at how they might better train their students for silicon valley and that, too, has taken time. >> based on your reporting, where is the fault or where do they lie? is it on the academic institutions themselves or on companies that in terms of their kind of lack of recruiting at the right places? >> you know, the question, when i went into doing reporting on this piece i felt that there was a lot of binary thinking about this issue. people either think that silicon valley companies are recent or aren't trying hard enough or they think that -- or they make the case that students from under represented backgrounds just aren't, there aren't enough of them who are well qualified for these positions. what i found is that there's a little bit of truth to both of those arguments. and it's not binary. there are a couple problems. one of which is that there are
some sort of unconscious biases present in silicon valley in which people, because it is such a white and asian and male culture, companies are realizing that, you know, people may view candidates for jobs from under represented backgrounds differently without even realizing they're doing that. that's been a big problem. another issue is that companies sort of just haven't been going where there are a lot of black candidates which is why i was interested in howard university , historically black colleges and universities graduate a lot of the black computer science graduates in our country but companies weren't recruiting at these places. that said, the universities themselves also haven't been training students for silicon valley as well as they could. >> you look at the growth of a program at howard university in washington, d.c., google, in the face of some criticism about their recruitment, sent someone to the campus to establish this program called google in residence. let's start with their best
intentions. what were they hoping to do there? >> sure. so google realized, you know, in a couple years ago that while they wanted to hire people from under represented backgrounds including black programmers, when they went to campuses and tried to meet seniors, graduating seniors and hire them, they felt these students just didn't have the background and didn't have the skills and experience they needed in order to start full-time jobs at google and other companies. >> they haven't been coding since they were w5 or 6. >> exactly. what google did was an interesting thing which is that they took one of their programmers and embedded him at howard where he both taught students the skills they would need and helped revamp the school curriculum and also started coaching students how to get through the google interview process, which made a big impact. >> well, that's different. it made an impact. did it make a difference though when it came down to those firms actually hiring these individuals? >> here's the thing.
you know, google started hiring far more interns than in the past and has expanded that program to other campuses. you would be surprised by the number, the small number of aduating seniors still getting positions at google and other companies. it's in the single digits. this year the chair of the computer science program knows of two students out of 28 seniors in his department who have jobs lined up in silicon valley one at google one at pandora. so the numbers are still really small. >> you know, i'm thinking about that and thinking about how you build all this infrastructure. one of the things you write about so compellingly is what it's like for these students to go to silicon valley, to meet and mingle with all these students who have gone to stanford and m.i.t. and harvard, to be there, and essentially being sold the silicon valley lifestyle we know so well. i think you mentioned slides and ping-pong tables, free food . d all that
it is really just not, it's not matching in this kind of cultural sense. you write also about recruiters coming to howard and just talking at length about the diversity problem and how off putting that is to students who are eager to get jobs in silicon valley. >> right. yes, so it is so complicated. companies want to do the right thing i think especially at this point. there's been so much blow back. there are all these sort of complicated nuances when it comes to diversity, to culture, and when we talk about culture. you know, one student i met talked about how she never sort of felt like she said she fit in in her own when she was growing up and went to college and when she got to silicon valley like she loved the weird, off beat culture and felt like she fit right in. other students, though, did say that a company coming to recruit at howard and talked about the play grounds they have on campus and talk about, you know, the volleyball courts they have. one student said to me like
these kinds of things just aren't compelling to me and my friends. we don't care about that stuff. another student who interned at google told me that she knew google was trying. she could tell google wanted to be welcoming to people of color. google was making an effort at becoming more diverse. but she would go out to lunch with her colleagues and just wouldn't know what they were talking about. they would talk about certain books and certain movies and she said these just weren't the books she reads and the movies she watches. >> thanks so much for contributing. you can read more about race and silicon valley in the latest edition of bloomberg business week available now on news stands and online at bloomberg.com. coming up -- >> the man behind a lot of the money in the ted cruz campaign. we'll look at the republican presidential hopeful's relationship with robert mercer a man you probably never heard of when bloomberg business week on television returns.
>> welcome back to bloomberg business week on television. i'm carol massar. >> i'm david guerra. the biggest backer of presidential candidate ted cruz's campaign is one of the most secretive and reactionary republicans in the country. >> his name is bob mercer. we have more about the mysterious mr. mercer. this is kind of a mystery man. who is bob mercer? >> bob mercer gave $11 million to a super pac supporting ted cruz. that makes him the biggest single donor in the 2016 presidential race on either side. he only got in politics, got involved in politics a few years ago and before that he was -- he had very little or no public profile whatsoever. he is a hedge fund manager who lives in rhode island. >> successful hedge fund manager. >> very successful. that's right. >> we hear so much talk from ted cruz about new york values. he lamb pooned the fact in a
recent debate there aren't a lot of conservatives in new york. in fact one of the biggest supporters of his, not a direct owner, lives here in new york. >> what is interesting is that in a way that makes sense is very rcer different from your typical republican wall street donor. a lot of people with a lot of money on wall street who are republicans, they're kind of hawkish in terms of foreign policy but they're totally indifferent to social issues. more supportive of things like gay marriage. mercer seems to be across-the-board conservative which is very different so he is a -- he has given money to antiabortion groups, to support the death penalty, these social issues most wall street people don't want to get involved in. >> he backs some interesting candidates. you kicked off your story talking about art robinson. tell us about this guy. >> art robinson is a chemist. he has a ph.d in chemistry but for the past few decades has
been unaffiliated with any university working on his sheep ranch in rural oregon and doing these sort of independent research projects that are funded entirely by random donations. and bob mercer has been a donor to robinson for more than a decade now. these involve things like he bought this machine called a ass speck tomorrow trer -- a maspectrometer. he is eventually going to crack the code and solve all of our problems. mercer's money allowed him to buy these military grade freezers to store the urine and so a few years ago robinson decided to run for office and he didn't have that much money. he is not a rich guy. one day these ads show up on tv that he didn't even know about. you know? portraying him as a good depy and the other guy as a bad guy. he doesn't even know where they
come frfment it turns out mercer who had been a supporter, kind of a fan of this guy, had unknown to him his $600,000 to support congressional race. >> talk about the political history of this guy, of bob mercer. he was a computer engineer, made a lot of money when he moved over to the hedge fund space and all these stories seem to date back to citizens united. that was the real turning point when he began to give a lot of money. >> a lot of things happened very recently that turned mercer into this kind of political force and one of them as you mentioned is he made all this money very late in life. he didn't get into the hedge fund world until he was in his late 40's. he is a computer programmer, very successful, ground breaking computer programmer at i.b.m. but not a billion air by any stretch of the imagination. when renaissance technologies, this very elite and very mathematically oriented hedge fund recruited him and
basically his entire team at i.b.m., they hired all these guys who had a background in speech recognition and machine translation. they knew how to teach computers and translate human language. and for some reason whatever allowed them to spot patterns, teach computers how to spot patterns and language has allowed them to spot patterns in market. they've become very, very successful. so that is one thing that changed. relatively recently, he only joined the fund in 1993. and then much more recently citizens united, this was a 2010 decision by the supreme court, that kind of opened the door for independent spending on elections. in other words if you're not coordinating with the campaign you can essentially spend as much as you want to support a particular individual's election. >> you mentioned that he seems to support a lot of conservative causes. he did not grant you an interview. he doesn't talk to anybody like a lot of these big donors in this day and age somebody who
prefers to keep his stuff under wraps. keep it secretive. >> that's right. he never discussed his political beliefs publicly and so what i did was i just talked to as many allies and recipients of his larges as i could. that's everyone from elected officials to political operatives to people involved in his charitable work. >> thank you so much. >> thank you. >> appreciate it. >> up next to the back of the book for this week's etcetera statement. >> we look at an on demand butler service called hello alfred. it is like having your own live in help except your butler really wants to be an actor and will leave your door unlocked. details when we return. ♪
>> bloomberg business week. >> one industry changed forever when a business from nasa, california surged past its nasa counterpart. >> peter, remind us what happened in the 1970's with wine. this was principally a european market. some folks in california thought they could play ball and in fact they did. >> back in the 1970's wine here in the u.s. didn't have a great reputation. the thought was that the europeans were selling the americans jug wines and the europeans didn't think much of the wines being produced in the u.s. but in 1976 a company from napa went to a wine tasting in paris and the judges selected its chardonnay as the best and there was another california red that was selected as the best. and it shocked everyone and "time" magazine wrote a story that called it the judgment of paris. >> so fast forward 40 years, peter.
we're seeing this happen all over again with olive oil. >> right. california is a great climate to produce olives and california already does almonds. it produces 90% of the world's almonds but it just has not planted many olive trees. there is a company in california called california olive ranch, which you may be seeing more of on shelves because it is still pretty unusual to see u.s. made olive oil. but they have dark green, square bottles and they've been growing and they now have about four to five percent of the u.s. market. just about all the rest of that is imports mostly from italy and spain. >> how do they approach this differently thinking back to wine? you had the europeans doing this very much on a small scale. this is a company making olive oil on a much bigger scale using different technology. >> right. they've gone very heavy on technology to produce olive oil. the traditional way is very, very labor intensive because you have really old, really big trees that are hard to pick
with machines and california olive ranch has enveloped, they've fixed the tree. they've focused on planting a type of olive tree that can grow more like a bush and because of that they can get this two story mechanical harvester to drive right over the tree. it is pretty amazing to watch. you might think it is going to crush the tree but it just drives right over it and has these flexible sort of tubes that run through the tree and mimic hands picking it and then the -- the olives are pulled off the tree and dropped into a conveyor belt and then into a truck and then off they go within a couple hours to the mill. >> peter, this is going to have a lot of the traditionalists upset. talk to us about kind the battle we're seeing between california olive ranch and what's going on with those folks over in europe who have been doing it a certain way for many, many years. >> there is a real new world vs. old world battle because for decades the olive oil
market has been controlled out of italy and spain. the international olive council is in madrid and they are very focused on the idea that you can't produce really great olive oil from a limited number doing. california is there more than 2,000 around the world and california olive ranch just focuses on three. to the traditionalist this may be more akin to factory farming. >> all right. peter, thank you very much. great to talk to you. >> thank you. you, too. >> now it's time to take a look at the etcetera part of the magazine the back of the book stories in bloomberg business week. >> let's begin with the cover story. something called hello alfred. essentially an on demand butler service. how does it work? >> that is exactly what it is. so basically you can usain and you can hire a butler to come to your apartment and take care
of all of your errands and clean your house and basically, you know, take care of anything you need them to take care of. >> i love this idea. i've been talking about it constantly. it kind of makes sense. i have a dress sitting in dry cleaning for months. how does it work, though? >> so there are two tiers of service. pay either $32 or $59 and the real difference is basically that if you pay the higher fee they'll make sure all of your essentials are stocked so you don't get home one night and have no toothpaste and sort of scream because of that. that's the main difference. they will clean your apartment. they will basically get your groceries for you if you want. and they will also take care of errands if you need to. but our reporter found that there were some add ons involved in that when she used it. >> and they forgot to lock the door twice. >> two times they forgot to lock the door. what is interesting is we're not actually sure who forgot to
lock the door because one of the things about this service is the basic contract. so they actually use insta card to get your groceries and my clean to clean the apartment. >> so they out source a lot of stuff. >> they basically act as a middle man. if you like to use things like pass rabbit and my clean and you don't want to deal with each of the services directly, they basically step in and do it for you. >> you bring up a number of these services. there is this on demand economy now. there is clearly a need or a want for services to do these kind of tasks. >> everyone works long hours especially living in a city and god help you if you need to go to the post office right? it's impossible. you get home from work and you have a pile of things on the to do list and you can't take care of any of them. if you want to go to the gym, you have to sort of decide if you want to do that or mail that, you know, letter to grandma or whatever. so this basically eliminates you having to do that.
>> talk about who are the alfreds? who actually fill these positions? >> the reporter has a couple of them here. >> yes. the first alfred our reporter had, her name was lauren. she was a graduate i believe of tufts. these are generally people in their 20's and 30's who have other careers. they are actors. they're musicians. but those jobs don't always pay the bills so they take on these responsibilities in order to make more money and they pay $18 to $30 an hour. there is also a lot of stay at home moms that wind up doing this. >> they go crazy. >> stay at home dads. >> there you go. there is a competitive to this it seems like not just among people who are trying to get jobs with the service, people trying to use the service as well. >> yeah. definitely competitiveness. you're sitting there trying to figure out how to maximize your time. so you can decide basically to spend a month with it or two months. the longer you use it the better you get at it. by the end of our reporter's
time she pretty much figured ut how to make sure her into -- her insta cart bill was no higher than if she had done it herself. there is a lot of interest. this is an extremely hot space and you can understand why. it is going to make your life easier. >> speaking of spaces, i got to tell you a space i totally dread. i don't know if you feel this way, david. you go into a fitting room in some stores, retail stores and you're just mortified. they're terrible. >> they are awful. the last time you were in one if it was five years ago or a year ago it wouldn't matter. or if it was 30 years ago it wouldn't matter. they're terrible. the lighting is awful. the mirrors are awful. and the crazy thing about this is that it is the one competitive advantage a brick and mortar store would have that you can go in and actually leave with something. you would think they'd focus on this as a way to get you to leave with more stuff. >> why haven't they? everything you just said rings true to me.
on top of the fact that you have a lot of time in there to contemplate everything you don't want to contemplate in front of these terrible mirrors and bad lighting. why have executives not got the message? >> i don't have a great answer for that. really the answer is it should have by now. because it does affect the bottom line. if you are on the sales floor and you are -- do not wind up going into the fitting room, the store actually makes a lot less money off of you. i think the real issue here is that it's hard to explain to executives that there is a return on investment on lighting. it seems so subjective. but it turns out that if there is good lighting and someone there to help you and the curtain closes and you don't get stuck by a stray safety pin you will actually spend more money. >> thank you so much. >> you're welcome. that's it for this week's edition of "bloomberg business week" on television. >> a reminder the latest issue of "bloomberg business week" featuring the cover story on race in silicon valley is available online and on news
emily: he worked alongside steve jobs to revolutionize the way we listen to music and became known as the godfather of the ipod. he spent nearly a decade at apple, then hatched a company of his own. in 2010, he cofounded nest labs, where he's promised to reinvent every unloved product in the home. a promise so thrilling, google, soon to become alphabet, snapped up nest and its star ceo for $3.2 billion. joining me today on "studio 1.0," nest ceo and cofounder tony fadell. tony, so great to have you here. tony: it's great to be .