tv Bloomberg Business Week Bloomberg January 16, 2017 3:00pm-4:01pm EST
carol: welcome to "bloomberg businessweek." the deep entangled relationship between hollywood and president-elect trump's pick for treasury secretary. oliver: netflix wants to be the next amazon, google, and facebook combined. we will tell you why that strategy begins in brazil. carol: how sleepless nights led to the birth of one pillow king. oliver: all that ahead on "bloomberg businessweek." ♪ carol: we are with the editor-in-chief, megan murphy. you guys take a look at something, that is paypal for india.
megan: this is a story that goes to the scramble in india. they extinguished their two largest bank notes to combat corruption and fraud in that market, but what it has really led to in this country and we see this in developing countries, the push for digital payments. what kind of space this is? the story it sort of captures that it is still wild west. we described it as a lot of people now pushing into digital payments. people don't even have cell phones. they are moving up the rung and they're going straight from not even having a bank account or cell phone to processing all their payments online digitally. it is a multi-trillion dollar market and shows how for people who are brave and innovative, who are willing to take risks, and really just sort of get that technology, and amass that technology, there is huge fortunes to be made.
oliver: there is a big point of conversation, the advent of fake news. there are people combating it. it has become a big deal and played a central role in the election. megan: it cuts to the heart of what we still continue to be seen reverberating as we see president-elect trump getting ready to take office. as you said, it's not clear whether this has all been around, a new phenomenon, or whether we are capturing this phenomenon because of facebook and social, which allows you to self-select the news you are getting. i think across the news industry, it is something that everyone is trying to combat, but it is trying to figure out are people out there inquisitive for stories beyond their general reach or they want a tailored list of stories their friends have sent them. it is limiting those circles. i think one of the most
fascinating things when you look at 2016, you can map out where trump did better, and where hillary clinton did better, when you map social media or what kind of stories they read. that actually was one of the best indicators and some of these states like michigan, ohio, trafficking in those kind of stories more heavily than anyone else. carol: which is what is interesting in this section. it is looking to ferret those stories out. megan: this is the thing you have to be careful of, how you determine what is fake and what is not. how do you determine, and i think this is what people are grappling with. like, are we going to put a normative in place, like, are we going to put in place a metric? a fact that is wrong, totally made up? exactly, what's the motivation,
the algorithm, the perspective? it is the defining challenge for our news industry because people have shown a willingness, aptitude, and desire to tailor their news based on what they want to read. carol: let's move to the cover story, great story, great deep dive into netflix. how they are looking to kind of expanding into some emerging markets. megan: it is a great story because what you learn in this story is that it focuses on brazil. what is great is that it gives you that flavor in terms of brazil and its media is run like a 1940's hollywood-style studio system, the number of people who watch, how they are cast, a family-run industry and so incredibly dominant. and i think this really shows that people who are brave, innovative, that is a market that you think would be incredibly difficult for a
company like netflix to crack, and they are cracking it and peeling open a market that is dominant and traditional in a way, and it is a story about what disruptive business models can do. oliver: we had to send somebody to brazil. >> netflix was a domestic company for the first three quarters of its existence. then in 2010, it made its first expansion outside the u.s. with a streaming service in canada. it doesn't really count because our cultures are so similar. in 2011, it made its first big splash in latin america. they introduced the service to 43 different countries at the same time, so that is a good place to start to get a sense of where netflix is going. the key to their future is replicating that success in the u.s. all around the world. if you listen to reed hastings, he stresses international and talks about companies like google and facebook.
if you remember, reed is a tech guy. he is an entrepreneur and started a bunch of companies, and his belief is that netflix can use the internet to build the most popular network in the world, much like facebook changed the way people interact online. google used the internet to change the way people search. netflix has the same opportunity in television because most of the existing companies aren't viewing the internet as transformational as he thinks it will be, and to get a sense of how netflix is approaching that international marketplace, i went to latin america, and the biggest country was brazil, where netflix struggled at first for the first couple of years, then it has become a huge success story, their biggest market after the u.s., the u.k., and canada. >> it became successful by hiring a big brazilian star and created content there in brazil, not shipping it in from elsewhere.
>> right, if you have seen "narcos" about pablo escobar, the guy who plays pablo escobar is one of the biggest stars in brazil. he was in a program called "killer elite." the first one came out in 2007. the sequel, one of the biggest success stories and brazil. i can remember a friend of mine went down and lived in rio and came back and all he could talk about was this movie, so that was a huge hit in the brazilian market. and i mean when i was in a cab in san paolo, i was explaining to my uber driver that i was there to report on netflix's first brazilian series, but she thought i was talking about "narcos." it is produced by a french company and it is in english and french but now netflix has made a show filmed in brazil, starring only brazilian actors, called "3%."
it debuted in november. carol: what they are doing in brazil, is it working for netflix? are they adding subscribers and seeing the growth they need to grow into a $55 billion valuation on the company? >> netflix does not break out its performance in individual territories, but there are analysts who track this, and my sense is that looking from reports and talking to people is that it has been successful to a point. netflix has 4 million or 5 million customers in brazil, which is bigger than a lot of internet tv services in the u.s., but it is ultimately a small fraction of the potential market in brazil. they have the strong base of fanatics and early adopters, much like the u.s. and before "house of cards," they had 25 million subscribers by that point, and now netflix wants to kind of supercharge it and take it into the mainstream.
netflix was popular in san paolo and rio. the two biggest cities in brazil. there are fans in other areas, but if you ventured into the center of the country, you would find fewer people who are using it because they can't access it or because some of the marketing has not gotten to them. oliver: turning netflix's grand plan into a cover image was the job of creative director rob vargas. carol: netflix is expanding its business around the globe, so what went into making the cover? rob: we basically wanted to get that point across and the fact that they are using brazil as this testing ground. we ended up with this option because it gets at the global nature of their plan. it takes the netflix logo, which is very recognizable, but we translated it into 12 different languages.
oliver: the story focuses on what is happening in brazil as a market to expand in, and what you have done is taken that one point and said this is exemplary of what they will do across the world. rob: yeah. exactly. and their plans are huge. they want to be in markets like india, where it is difficult for a company like them to thrive, but they do want to do that and they are sort of pushing themselves in brazil. carol: if we do translate these, they don't say something else? [laughter] >> we had an international team of fact checkers make sure we were not messing anything up. it is out in the world now, so i'm sure we will hear about it. oliver: the english netflix is not on there. you find it that recognizable. rob: exactly, we do mention them. that was pretty important as well. carol: any other ideas you were playing around with? rob: we had one idea which the
art department loved. the phrase "netflix and chill" is popular in the u.s. i, frankly, have no idea what it means. it is something that people -- carol: i had to google it. rob: we had one version, it had a brazilian flag and "chill." brazil and chill. it almost made it, but because certain people did not understand the context, they were not necessarily thrilled about it. we sort of went in this direction. oliver: how blockbuster movies and hollywood could spell trouble for donald trump's pick for treasury secretary. carol: and america's burger chains are paying headhunters to find berger clippers. those stories are next. this is bloomberg. ♪
♪ carol: welcome back to "bloomberg businessweek." i'm carol massar. oliver: and i'm oliver renick. in the politics and policy section, donald trump's pick for treasury secretary facing scrutiny over his ties to a hollywood production studio. >> we wrote a story about his entanglement with this company called relativity media, this sort of high-flying movie studio run by this charismatic, jet-setting guy. steven mnuchin got involved with this company in a bunch of different ways at the same time, and it all went south and the company went bankrupt. oliver: let's start with the relationships. tell us about the relative sort of timeline in terms of when he started, when he was with onewest, which lent the company money, and when he got out of each one? >> steven mnuchin is a goldman sachs guy by background. he became a hedge fund manager. he became sort of a hollywood financier and produced movies
like "avatar", 40% of "avatar", a huge home run for him. at the same time, he was a budding banker and bought this bank in southern california that had failed, turned it around, and sort of turned it into a commercial lender. formerly indymac. he renamed it onewest. kind of turned it around. because he had a background in movie finance, he got onewest into the business of loaning money to hollywood. so it made a big loan for this company, relativity media in 2012, and after that, their relationship sort of became closer with the ceo of this company, ryan cavanaugh. carol: talk about the particulars. because that is sort of what jumped out at us. steven mnuchin was also cochairman of relativity media. >> eventually. as far as we know, the loan from the bank in 2012 was one of the first connections, but subsequently a friend, jim
wyatt, formerly ran one of the biggest talent agencies in town, goes on the board of relativity and onewest at the same time, so there is one link. and then steven mnuchin goes in, buying a corporate jet with ryan cavanaugh, so they personally sort of those -- both own this company that owns this three engine jet together, and it is zooming around from aspen, to cabo san lucas, to maui. and they both own it together. oliver: he basically lends money to the company through the bank, so inside lending if you will. nothing illegal in terms of doing that, but actually having a degree of ownership in the company they lent to is where things get hazy.
>> that's right. when they made their first loan in 2012, it was not an inside loan. just a third party borrower. oliver: until he went on the board. >> that is something that federal regulators look very carefully at because they are concerned if a bank is using depositors money to make a sweetheart deal for the benefit of the people who run the bank, so they look closely at this. as far as we can tell, this never ran afoul of any regulations, and regulators knew about this stuff and they seemed to be fine with that. they never took any action against onewest over this. fast forward, they get the jet together, onewest make some more loans, and all of a sudden steven mnuchin shows up as cochairman of relativity and takes a stake in the company that at one point amounted to 14% of the company personally. plus, he has a hedge fund company where he is representing other investors, and they take a
stake in relativity, so at one point he is wearing four hats in the relativity relationship. carol: headhunters, paid vacations, higher pay, and bonus checks. these are no longer the perks of wall street in silicon valley. oliver: fast-food chains are fighting over workers instead. we talked to a reporter. carol: you kick off your story talking about lisa, who is she? >> she is a restaurant manager and trainer at a wendy's in albuquerque, new mexico. you would not guess it, but she is being heavily recruited to run a gas station because worker demand for these type of workers, restaurant, retail, is so high right now. oliver: obviously the demand is there, but is it being exacerbated by a lack of supply. are people going to other jobs? are those sort of relationships creating the need to go and poach people from other places?
>> this industry in general before this labor crunch, it is a high-churn type of industry. meaning that workers come and go. especially the hourly workers. they come and go quite frequently. but this is being exacerbated by the low unemployment rate and increasing minimum wage across the u.s., too. carol: the fast-food industry, the restaurant industry, finding their labor pool is tight, so what are, you know, employers doing to lure workers to their places? >> they are really pulling out all the stops. everything from quarterly bonuses to bonuses for training different people, other employees, things you would not think of maybe, like free meals, paid days off, even having the managers around more, making sure they know people by face and name and recognize them for doing a good job.
oliver: is this happening at the fast-food chains, the sort of old- school -- i know you mentioned wendy's, mcdonald's, stuff like that? is it also happening at the fast casual places? chipotles, etc.? >> we are seeing it at fast casual places and all the way up to full-service restaurants like an olive garden or something like that, where you require different servers to bring the food to you. i mean, it is tight across the whole industry. carol: when we look at the economic data and labor market, we have kind of been waiting for wages to be higher. oliver: we got a big boost with the most recent number. carol: exactly, that is a good thing for workers, but i think about the flipside for companies is not so good because it raises their labor costs. >> exactly, a lot of them are right now in this environment having to eat that cost, seeing
profit go down, because it is so competitive. the consumer is still uncertain because of the election last year and with a lot of competition from prepared food places like grocery stores, so a lot of the restaurants can't even raise prices. carol: brexit claims another victim in u.k. diplomacy. oliver: the pipeline that may run afoul of one of trump's biggest promises, the wall between the u.s. and mexico. this is bloomberg. ♪
sirius xm channel 119, am 1200 in boston, am 960 in the bay area. oliver: in london on dmb mux 3, and in asia on bloomberg radio plus app. carol: in the global economic section, the resignation of a top british diplomat reveals divisions over brexit in theresa may's cabinet. >> tim barrow is the uk's new man in the european union, the ambassador described as the permanent representative of the u.k. to the european union, the foot soldier on the front line in theresa may's brexit battle, working behind the scenes, trying to sound out other diplomats from member countries really to identify how these negotiations can go. trying to cut a deal. kind of doing a lot of the legwork that the government needs him to do to get that deal signed. carol: his predecessor just quit unexpectedly.
>> that's right. sir ivan rogers was doing the job before tim barrow, he resigned unexpectedly. completely shocked theresa may, not expecting him to go, so this created a sudden vacancy. that is not the kind of hole in your team you want with 10 or 11 weeks left before the formal start of those brexit negotiations. oliver: mr. barrow, his background, and does he have the tools to wade into unprecedented waters? >> he is an experienced diplomat. he is 52 years old. he cut his teeth working in the u.k. embassy in moscow around the time of the fall of the ussr, so he has seen some pretty interesting times as a diplomat and has experience working in brussels, so that will be useful for him in his job ahead. he is described by colleagues as a real professional, someone who
will work well with ministers while giving them good, independent advice, and critically the real thing he will need will be clear direction from london about the kind of aims that he has to have in those negotiations, what sort of deal is it that the u.k. government wants to get. carol: well, good luck with that, right? from what i understand from theresa may, is she is not quite sure what she wants. >> this could be hinting at one of the biggest problems for tim barrow. may has been reluctant to give any indication of the deal she sort of wants. her view is if she gives away too much, that will reveal her hand like a poker game. she will tell her opponents and negotiations exactly what she wants, making it less likely she will get it. that is theresa may's argument, but tim barrow, unfortunately his predecessor made the point as he resigned as that even he did not know what theresa may
wanted to get. oliver: obviously, there is a ton of diplomacy that has to be done. there is a lot of politics involved, but at the same time the rest of the world is paying attention because of the economic stakes. does mr. barrow have the sort of economic background or people advising him where he can keep those sort of, you know, results in mind going through this process? >> he will have a big team of people to work with and be plugged into the u.k. treasury and draw on resources there that will be crucial for him to have any chance of succeeding, but there is no question that he has an enormous steep learning curve. carol: up next, a scandal at south korea's giant retirement fund. and what that may tell us about korea's capital market. oliver: can west virginia save coal country? carol: this is bloomberg. ♪
oliver: welcome back to "bloomberg businessweek". carol: still ahead, did the atmosphere at davos create the environment for donald trump to come to power? newer: west virginia's governor thinks he can bring back thecoal industry. carol: a former drug addict's idea turned multimillion dollar pillow empire. oliver: all that ahead on "bloomberg businessweek." ♪ oliver: we are back with megan murphy. lots of must-reads. one with a bit of scandal and south korea. tell us about their pension problem. megan: this is fascinating. it is a glimpse into a country
wracked by this scandal and crisis over its pension fund, collusion about directing money in this pension fund. this has been a long-running issue there. there has been tremendous political and economic headwinds there, but it gives us a glimpse into, you don't get a lot of that impact you see with this and how unusual this is, how public it has been, and how serious it is for that country. it has been wracked, truly, by crisis over the last few months. carol: all these relationships. in politics and policy you look at another border issue for donald trump that has to do with the natural gas pipeline that snakes its way to west texas and into mexico. megan: it is a really odd group of characters, carlos slim, donald trump, and what it is
looking at is this window into what we will be focused on for the next four years, when somebody has this diversity of business interests, investments in the pipeline that goes to mexico -- carol: like donald trump has. megan: exactly. when they have a different, well -- how do get away from that? one of his main principles was building this border wall with mexico and here we have a pipeline going through and there is a financial interest. i think what will really be fascinating will be kind of peeling those layers and looking at it, how much does his own business interest impact not his decision-making, but it is complex. there is a lot going on there. there is a lot of stuff that people don't even know about, and this is one example of what you thought -- everything you think you may be true. did you also know there is this pipeline being built?
oliver: there are a lot of political themes in the story that deals with the new governor of west virginia. megan: jim justice had trouble because when he first started his candidacy, he ran in sort of this trump world where trump went to west virginia repeatedly. this was a main battleground. donald trump, the promises he made to that industry, which anybody knows is facing an immense struggle. not just in terms of its economic viability. this story shows where are we going to be able to keep those promises, is jim justice going to keep those promises? reopening those coal mines? is that industry viable or is that a subsection of the population who look at the promises made to them and will hold him to account and say all those things you said about revitalizing industry, the challenges it faces and whether that is a credible promise. it is really going to be the testing ground, the proving
ground. carol: a lot of challenges. more on west virginia and its governor. >> the new governor, jim justice, is an interesting guy. he is the wealthiest man in the state, owner of coal mines and many other business interests, including the west virginia resort the greenbrier. politically, he is fascinating because he changed his political affiliation from republican to democrat to run for office, but he steered away from hillary clinton and emphasized his friendship with another billionaire real estate mogul, and that is donald trump. carol: heard of him. >> right. he resembles trump in a number of regards. he has a very large family-run business that has operated with the cooperation of his adult children. he has said he will not divest
himself of his empire in west virginia. moreover, he, along with trump, promised the people of west virginia and the people of appalachia that they would bring back the coal industry, which would be a true feat. carol: i have been to west virginia. my husband has some family there. go back many decades, 40-50 years, this was a bustling area between the coal, chemical companies, but a very downtrodden, even if you go to the capital. >> the chemical industry, the steel industry, they largely fled decades ago, and more recently, coal has been weakened first because of competition from the west, wyoming and montana, and more recently because of environmental concerns that have resulted in a shift on the part of utilities
to natural gas, which, not coincidentally, also has been an -- has been very inexpensive in recent years because of its plentiful supply. for all those economic and social reasons, coal has been down and out. oliver: it's not just the clean energy alternatives. it is also competition from elsewhere. is it just cheaper? are there more resources in those western states? >> western state competition is on coal itself. it is easier to mine and the coal is somewhat cleaner in wyoming and montana than the east, but the overwhelming main force that is hurting coal is the availability of cheap and plentiful natural gas. the economics work better with natural gas. carol: it doesn't make sense for coal to come back.
all the cheap energy sources out there. so how does he really kind of follow through? bringing back an industry that is in many ways dying? >> he has one main answer. the reason coal is in dire straits is the epa, the environmental regulation, and if his friend, soon to be president donald trump will reign in the epa, then coal will live to fight another day. in my article, i show how unlikely that is. first of all, because environmental regulation is a factor, but it is not the primary factor that has caused coal to have a tough time. beyond that, he points out that metallurgical coal will have a
davos gets underway next week. oliver: this year they are coming together against a backdrop of hostility. we talked to simon kennedy. >> this takes place in davos, switzerland, europe's highest city and well-known for snow and skiing. every year around this time, the so-called global elite gather, bankers, academics, policy makers, all head to this alpine retreat and discuss economic and financial affairs and the challenges facing the world in the year ahead. oliver: it seems like that this year they will obviously be discussing some of the major elections around the world. is that going to be a focus? >> absolutely. one of the things about davos is that it has become the grounds for globalization, the place where free movement of people, money is encouraged and celebrated. obviously that worldview has taken a bit of a shock in the last year with elections of populist figures such as donald trump and protectionist topics
such as brexit forcing their way into the headlines, so it is a bit of a reality check this year for the delegates of davos, that worldview is perhaps under attack. carol: in some ways, what has been promulgated, has that caused the backlash against the establishment that we have seen around the globe? >> certainly, this is an elite meeting, and it has been a meeting that has promoted this worldview over many decades now of globalization, the importance of technology, and now in the forum, in some ways it is to acknowledge that it has been threatened and people are not so happy about that blueprint for how the world economy works, and you are seeing that at the ballot box, so it is a question for the delegates.
they thought they would always have the solution, but now they are the problem. oliver: this is wrapped in to the populist movement where you have seen the populist shift away from those elites. i think the elite is very well-described in the story by samuel huntington, the late harvard professor, who described the davos man. tell us what that is. >> it is a person who sees beyond borders, who sees the importance of a global answer and global flows in capital markets and the like. it is a moniker not done as a tribute, but was adopted by people who would say you are a davos man or woman, and perhaps a thing not to be proud of these days. now you are almost having to apologize for to some extent.
oliver: that is interesting because there is an elite group here, but at the same time, there are some of the people who will be enriched with power as we have seen with the wall here, banker-friendly, are these going to be people who feel like targets are people who could potentially benefit from the new leadership?
>> these are people who will be trying to work out a business angle, an angle where they can benefit, sort of niall ferguson, he was saying that by the time davos rolls around, everyone will be a fan of donald trump as they work out how they can benefit from the policies he introduces. it is also worth noting that some of the policies he talked about, or some of the rhetoric, translating into policy he hopes to introduce, and certainly one place where you can see that is wall street, which he criticized on the campaign trail. but now when he looks at lower regulation, there is a feeling of relief on wall street that he might be good for their stock price and good for banks in general. so certainly there is a case to be made that the delegates of davos won't suffer too much from this populist uprising. oliver: how one idea from the world economic forum is trying to succeed where others fail. carol: at least when it comes to micro-insurance. >> crop indemnitee insurance is sort of covering a farmer for the risk of weather disruption. you have a crop insurance program that gives farmers $10 billion a year, a way to hedge financial risks for folks in agricultural. you have this catastrophic risk, it it gives you stability and
the banker knows you will be able to pay off the loan. for poor countries, you don't have the same network. in sub-saharan africa, credit risks become another part of the many risks they face. trying to make a living. oliver: this idea has been this branching out into emerging economies. what is behind the shift? >> when you look at africa's agricultural potential, is the last frontier. have you ever played the game jenga, oliver? oliver: of course. >> agriculture is kind of like that game. you can have that one piece that looks strong but it is underpinning all of this is financial stability. crop insurance could give farmers that stability that would allow their potential to explode and lift a lot of people
out of poverty and feed the world at the same time. carol: you talk specifically about a group of insurers who have banded together and have created a consortium to provide this crop indemnitee insurance to farmers in africa. >> right, blue marble micro insurance, a consortium of eight major insurers. they formed in davos with the idea of creating this financial stability that could help african agricultural expand. again, it is about putting people into these networks to get loans, credit, grow better crops, develop infrastructure, and help build that jenga tower that can now come apart so easily. oliver: some good news that good things come out of davos. how are these companies framing it so it is still advantageous, and big companies find it useful use of their time to do this and some of these areas that are very underdeveloped?
>> let's make sure we are not certain this is a good thing coming out of davos. this is a pilot project that just kicked off in november. and they're not trying to support the people living on less than a dollar a day. these are for farmers who they feel can prosper or expand, who may be living on nine dollars or $10 a day. you are creating this market that allows these farmers to become more prosperous and buy more product from aig, crop insurance, other policies. let's say they buy a car or what have you. you are building that marketplace from the bottom up and coming in on the ground floor so you get that brand identity, awareness, and infrastructure of getting farmers to pay their bills to this insurance company on time using things like mobile phones. carol: micro insurance has worked in other parts of the developing world.
>> there are simply some development challenges in saharan africa that are sort of unique to the region. because you don't have the stability of governments, you don't have the weather data or the risks to build an insurance policy on. satellite technology and geo-mapping is helping a lot in that area. you also have not had this sort of larger networks that these farmers can plug into. oliver: how the pursuit of a good night's sleep gave rise to the pillow king. carol: this is bloomberg. ♪
oliver: and in london, and in asia on the bloomberg radio plus app. carol: in the features section, the unlikely rise to success of america's pillow king. >> he is the "my pillow" guy. if you listen to radio or watch cable television, he's in my twitter feed now, he is a mail order pillow guy. carol: i have to tell you, he's also on my bed. my husband actually bought a bunch of those pillows. they are everywhere. they are ok. >> he sold 26 million and counting, but his story is incredible, a reformed crackhead.
"proud" is the wrong word, but he is not shy about it, who almost ran his pillow start up into the ground and is now a full-on mogul. the pillow king of minnesota. carol: he was a drug addict for a long time. >> he owned lunch carts and a bar owner, started using cocaine and always had this dream of inventing the world's greatest pillow. oliver: he literally did have a dream. isn't that what he says spurred the idea? >> exactly. now he talks more about prayer, but he said the original vision came to him in a dream. he already always had trouble sleeping. he was never happy with his pillow. he felt like he would invent the world's greatest pillow and solve everyone's pillow problems. he went obsessively about trying to create a pillow. oliver: it was very much trial by error. >> he figured out what worked best was foam, so he would buy foam and he and his son would carve the foam into shapes, try that, try another foam, until he struck on something that worked, then he's started selling it to
people. carol: it was not so easy initially. he ended up going to a lot of home fairs? >> a lot of inventors and product makers have this experience. they think they have come up with this great thing and then he first went to stores and said this is the greatest pillow and they were like, thanks. he took a chance on a kiosk at a mall. it was a big failure, the one person took the pillow, then he sold it at a home show, so he was going to fairs and home shows, doing very well and the company was expanding, but it was not growing precipitously. oliver: that is an important part of the story, that he did not get rid of his drug life and his drug addiction and then start his business. he was running the business and trying to start it up while dealing with these addictions.
tell us about the sort of beginning years and then sort of what eventually broke that mold? >> for 6-7 years, he was throwing pillows in his trunk and driving around america and selling them at fairs. he was very good pitching the pillow and he was selling out basically everywhere he went. but he did not know how to grow the company, and it did not help he was a drug addict. he had some personal problems and he went from powdered cocaine into crack and went on this sort of epic binge and got cut off by his crack dealer, which is probably a low point for most people. carol: there are ethics among drug dealers? >> who knew? right? he did not give up drugs. he was on them for another six months, but decided at that point that i have to change things, then the company started taking off.
carol: i, too, like the story. "minneapolis tribune" did a story about him, and that helped a lot. >> the business section did a profile, local guy invents the pillow, your quirky business story, and the web sales went up. it resonated with people for some reason. it was not about his drug problem but it was about local guy obsessively comes up with this pillow, starts selling it, people love it, and that blew up his online sales and he started placing newspaper ads, saying i can copy this story and place it in articles all over the country. then he did an infomercial, and that is what blew up the company. everyone who watches late-night television has seen this infomercial. carol: "bloomberg businessweek" is available on newsstands now. oliver: and online at bloomberg.com. let's talk about our favorite story. carol: i like the story about the pillow. i am familiar with the infomercials. you really found out about his back story.
i had no idea he was a drug addict for so many years and really struggled with that, lost his home, wife, but did create this incredible business, and the story digs down into it. i have to admit i have a couple of "mypillows" on my bed, but i felt like i got a feel of how he created his company. oliver: you always see the infomercials and never know what goes on behind the scene. this is a guy that truly built an empire for himself. carol: how about you? oliver: i liked davos. this is the big economic forum that happens every year, sort of thought-provoking and business provoking event. this year there is a lot of pushback. what they ultimately came to do was to create globalization, and it will be interesting to see what comes out of it. carol: especially as so many people at davos missed the donald trump winning the election connection.
>> coming up on "bloomberg best," the stories that shape the week in business around the world. the trump transition rolls on as the president-elect meets the press, and hearings heat up on capitol hill. >> the plan put into place is basically trust donald. >> he's not moving where he needs to move. >> contentious is an understatement. >> brexit worries bring down the pound. china causes global concerns >> i think what you're seeing is a bumpy road. >> things could change the game for drug companies. leaders in the industry tell us what they are expecting. >> at the end of t