tv Bloomberg Business Week Bloomberg November 19, 2017 3:00am-4:00am EST
julia: welcome to "bloomberg businessweek." i am julia chatterley. we are inside the magazine's headquarters here in new york. in this week's issue, the flooding of houston's energy corridor, u.k. prime minister theresa may's delicate balancing act, and the bloomberg annual business school rankings. all that to come on "bloomberg businessweek." ♪ julia: i'm here with editor in chief megan murphy.
let's begin with the european cover story. perhaps the safest woman in european politics right now simply because no one wants to replace her and voters don't know who they want to replace her with, theresa may. megan: this is the story that keeps on giving. you really do have some sympathy for a woman who has not only faced an extreme series of internal political challenges, including a sexual-harassment scandal in parliament, ministers leaving, but also overshadowing all of this is not only her own inability to lurch from crisis to crisis to crisis, but this fixed timetable on brexit and all the challenges they face over that in terms of securing a deal with the eu that is refusing to budge on so many core issues about single market, timing, compensation. it is the worst of all worlds for her right now. julia: some people don't have sympathy for her. they say why did you call for an election? why did you squander the lead you had over that period when
you went into this election? some of the comparison being made are john major in 1997 and the catastrophic loss we saw in that election. megan: you and i are both british citizens and so watching it has been unbelievable to watch. when she first called the election, it is hard for us to go back to where we were. people thought she was going to win an overwhelming majority. what happened is, she was revealed to be a spectacularly incapable candidate. she had no real message for voters. she seemed to be robotic which gave her the nickname may-bot. she lacks a common touch, very different to john major in terms of how he has emerged as a man of the people. which is odd to me as well. she has proven herself to be unable to really get in the consciousness of the british voter. every time she turns to her same worn-out phrases of taking britain forward, forward together, and the thing people don't spend enough time talking
about and which this piece really talks about is theresa may was a remainer. we forget about this. she was a remainer, the leading voice on the remain campaign. what i have found baffling and perplexing is to be this full throated advocate for brexit is not how she felt, is not what she ran on. the british people simply do not believe her and a lot of what she is saying about the benefits that brexit will bring. we have to look at the u.k. the economy is starting to suffer. it is growing at a slower rate than european rivals. the pound is continuing to stay weak. inflation is hitting home on food prices. people look forward to brexit, lack of a plan, how they are going to compete, how they are going to remain investment, let alone attracted businesses back to britain. julia: from a man-made or woman made crisis, the impact of hurricane harvey in houston and to what extent that was a natural catastrophe and contributed by the actions of
man or woman. megan: this is our domestic cover. this story is powerful and deeply reported. we are so proud to publish it this week because it looks at -- when you look at hurricane harvey versus katrina in new orleans, there has been so much talked about how the response was very prepared, planned, we perhaps saved many lives and how immediate the planning was. how firm they were about forcing people to evacuate as floodwaters rose, but there was an area around houston that was intentionally flooded, where a reservoir they were concerned would flood and cause immense destruction was actually intentionally flooded and the waters released. it was a relatively wealthy area. this goes into the detail of what happened to those people, their homes, their lives and was it the right choice to make for everyone and where do we go from here. julia: the legal consequences. here is shannon sims with that story.
shannon: a lot of people think harvey was just a hurricane, it rained and the water subsided. large portions of houston had a secondary disaster happened to them. that is that the federal government had two reservoirs blocking the water from west houston and central houston from flooding even more catastrophically than it did. however, the water was so immense. 51 inches fell across houston. 60 normally falls in the year. the army corps of engineers had to make a tough call in opening the floodgates and actually flood neighborhoods near the floodgates, including my parents' neighborhood. the results are thousands of homes flooded, and as a result, the litigation is beginning now. that is the next chapter of the story. julia: they sacrificed a piece of houston to save everyone else. >> or seemingly?
shannon: i would say factually. it is a tough call to make. it is a disaster, and nobody really knows the right thing. it is unprecedented. the potential damage -- the "houston chronicle" ran a chilling article about a week afterwards, and they said that if the reservoir walls had broken, it would've left west houston with corpses by the miles or something like that. so we were talking about the risks were huge, totally unprecedented. it was a tough call. now it is going into litigation to see exactly what happens after you make a tough call. julia: talk about some of the individuals and families involved. one of them, angie and josh moore, a couple with a child in the area. they had to make a judgment call on the flooding and whether or not to evacuate. shannon: a lot of people -- my family is from there. it rains all the time. we are from houston. we are used to hurricanes. nobody was freaking out. this was different because we did not know they would open the reservoir gates. that has never happened before.
julia: they opened them in the middle of the night when everybody was sleeping. they said they would do it later in the day. they made a snap decision earlier and got slammed. -- earlier than perhaps planned. shannon: when i spoke with residents, that is what a lot of them were upset about. they did not have enough warning. angie, for example, told me her wedding dress was ruined. she said i would have put my wedding dress somewhere else. all these things you don't think of because you would never imagine your home with six feet of water in it. >> some people said they could tell there was a difference in the water coming in versus the water that was coming down, rainfall versus the water released from the dam. shannon: the water released from the dams had been accumulated in the dams and then was released into buffalo bayou, a stinky bayou in the best of days. all of that funk was overflowing into peoples' homes. it was not clear rainwater. it was something else.
>> they could tell a difference. shannon: it was mixing with sewage, whatever chemicals people had in their garages that were now flooding out. >> play deval patrick it. -- play devils advocate. would these homes have flooded anyway if the dams had not been released? shannon: that is exactly what a lot of the litigation is about. this is an unprecedented rainfall. how did we know who was going to flood? nobody knows the answer. >> storm in 100 years or more. shannon: we only have so many forms of guidance. a lot of these homes should -- homes are in the 500 your floodplain, which means they should flood once every 500 years, for a 1% chance of flooding every year. or a .5% chance of flooding every year. what happens with climate change, more severe storms -- julia: what about insurance in this case? i was shocked at how few people actually had home insurance protection.
shannon: from the outside, how can you not have insurance? you live in houston, you have hurricanes all the time. but this area never flooded. you pay hundreds and hundreds of dollars for 30 years in your home never floods and you wonder why you have it. >> let's go to the litigation. there are similarities between this and katrina in new orleans. i don't know it is apples to apples, but nonetheless, what you have is the government willing to sacrifice -- the federal government releasing the dams, sacrificing property. you think about, legally, is this eminent domain? what is the legal or the law behind this? shannon: what happened in katrina is that the government was not maintaining their infrastructure properly. this was not that case. the government was maintaining infrastructure properly, they will argue they were using the infrastructure properly. opening the floodgates is part of the reason you have the reservoir, to control. keep in mind that at this time there were other hurricanes
churning in the gulf. they did not know how much water was going to be coming. they chose to sacrifice some land. >> did they take those lands away? shannon: this is the legal argument. what is fascinating is this gets to the constitution. in the constitution, in the fifth amendment, there is a clause that says the government cannot take your property. if they do, they have to pay you back. that is the argument that people are making. whether this was the right call or the wrong call, it was an extreme situation. it was unprecedented. that is not what we are arguing about. we are just saying these people's property were taken from them, and that means it was damaged or destroyed. that is a taking. julia: creative director rob vargas put houston's flood on the cover of bloomberg businessweek. the united states has had more than its fair share of natural catastrophes this year. never more so than with the flooding we saw in houston. this week, we turn the spotlight
on the u.s. cover on a different angle in this story. >> we report when it first happens. we were shooting some of the scenes, which were incredible. we are revisiting it because something i wasn't aware of was part of the flooding, the u.s. government making the decision to flood certain areas to save others. julia: you have two powerful quotes on the front cover. point out what you chose. this actually gave me goosebumps. >> this is one of the people affected by this, quoted in the story saying this isn't an act of god, this is an act of man. pointing at the fact that even though it was a natural to -- a natural catastrophe, the flooding in certain neighborhoods was an act of man. julia: next, the health insurance company that sees opportunity in the uncertainty surrounding obamacare. and the fight over who gets to mine your data and sell it to your boss. this is "bloomberg businessweek." ♪ ♪
julia: welcome back to "bloomberg businessweek." i am julia chatterley. you can find us online at businessweek.com and on our mobile app. in the features section, health insurance company centene is taking its carefully crafted business plan national. that could mean fewer choices for customers. here is reporter brian. >> talk to us about it. it is a publicly held company. if you look at the stock, it has shot up this year. it is helping out the folks in georgia when it comes to health insurance. brian: they go back to 1984 when it was founded in the basement of a hospital in milwaukee.
in 1996, the ceo who is now ceo came in. he had $40 million in revenue, 40,000 customers in a couple of counties in wisconsin and part of one in indiana. now he is over $40 billion in revenue. their stock price tripled in the last five years or since obamacare effectively came in. they are doing quite well, but they are not terribly well-known, in part because when they sell their medicaid and their obamacare plans in various states, they frequently sell them by different brands. for instance, in georgia it is ambetter. in florida, it is sunshine state health plan. that is how most customers recognize them. julia: explain why centene can go into all these marketplaces and offer options to people when everyone else is retrenching and saying we can't offer this anymore. bryan: centene has been doing this for a long time. centene is a longtime provider
primarily of medicaid coverage. when you are offering medicaid coverage, you don't have the luxury of saying, our population is really sick. we will just raise premiums or raise co-pays or deductibles. you can do any of that. that you can't do any of that. -- you cannot do any of that. they don't have those. you are at the mercy of the federal and state governments. you really need to focus on how much your population costs. they have been focused on this for a long time. they have gotten really good at keeping those costs down. carol: what is fascinating is you put this statistic. research has shown 5% of insurers population can account for 50% of the cost. centene is collecting a lot of data to understand the population they are insuring, and they are trying to make sure they are doing health care or suggesting health care to their subscribers before they get really sick. bryan: that's right. they use publicly available data
as well as their own claims data to figure out who are the people who have small problems that could quickly become big problems, expensive problems for centene. then they focus on these people. they have algorithms that churn through data. every 24 hours, a software program delivers a patient to do list to one of centene's 3000 case managers for these particular people. the case manager says, i see this small problem could get big. they reach out to the people and say, you need to go to the doctor, take your meds, do a and b in hopes of heading off major surgery or major problems with their heart, kidneys, etc. julia: a look at some of the smaller technology companies that are feeding off the information we put on social networks and the fight that is brewing over the control of that data. we speak to reporter drake
bennett. drake: hiq's whole business model is they take data and crunch it to make these predictions about people's behavior. >> linkedin data. -- drake: linkedin data. the vast majority of data they use is linkedin data. linkedin is the only game in town for this kind of workplace information. linkedin is saying they sent them a cease-and-desist letter in may saying you can't do this. you are not allowed to use our data. stop visiting our website and copying the data, which would've meant going out of business. they have sued. their argument is this is public data. i'm on linkedin. you can decide the information, who it is available to, how widely it is disseminated. hiq is only taking the most public data. they are saying, if you selectively say this person can see this and this person can't, it is like putting a billboard on your office and saying you can't look at this billboard.
linkedin's response is it's on our servers, and you are trespassing by coming in and copying it. more fundamentally, this is the kind of thing our members might not be comparable with. -- might not be comfortable with. you are basically using this information to discover things about them they might not want their employers to know. it is kind of incumbent on us to prevent you from doing it. julia: people can make that information private. i know that it basically defeats the purpose of linkedin, but there is a choice. drake: this is part of the issue. hiq says if they don't want us to be delving into the stuff, they can -- julia: control it. but that cuts to the big issue of whether is a legal battle. -- of why there is a legal battle. it is about speech and competition on the internet. it has attracted some pretty big legal names who have views on the subject.
drake: lawrence tribe, a constitutional scholar, is arguing for hiq. his interest is he sees it as a free speech issue. he really sees when you're talking about public data and who gets control, and especially in an environment where we have a smaller and smaller number of big companies controlling the collection and analysis of that data, he is uncomfortable with there being more restrictions put on who gets to do stuff with that information. julia: up next, the company the pentagon uses to stop cyberattacks from spreading. this is "bloomberg businessweek." ♪ ♪
and on am 103.0 in new york, 106.1 in boston, am 960 in the bay area, and in london on mux 3, and in asia on the bloomberg radio plus app. in the technology section, and game might not be the biggest game might not be the biggest security firm in the market, but it is the pentagon's favorite. i spoke to the ceo of endgame, nate fick. nate: endgame builds a protection platform. we protect customer's data from attack by preventing breaches on the endpoint and by detecting and responding to breaches and automating the hunt for attackers that may already be inside our customers' networks. julia: how do you stop it spreading? nate: it is an enormous amount of math behind it. a lot of data science and algorithms involved in the detection process. this is a crowded market. we have to put a lot of emphasis
on independent third-party validation. not us saying how good our stuff is, but others who are seen as credible and independent verifiers in a market where there are many companies claiming to be the same thing. julia: what about your model is making you different? the thing about hackers is they change. they know you are on to them, and they learn and do something different, and they adapt. can you adapt quick enough for the changes that hackers make in order to attack something slightly differently? nate: that is the key insight to cybersecurity. this is not a machine on machine problem. it is people on people. you put your finger right on it. we started by taking the best attackers from places like the nsa and the air force and other parts of the government and gathered them together and said, ok, let's build the defense you never wanted to run into when you were on the attacker side. that is what we have done. we have to continually replenish that talent with people who are up-to-date on the latest hacker
techniques and procedures from around the world. and then marry them up to people who build and ship scalable enterprise software, and then a university math department of data scientists. julia: the problem is the person operating this, while trying to work out what went wrong -- equifax was a great system. one unnamed person did not do an i.t. update. this needs to be simple. how do you make the application of the search and the identification of a hack simple to operate? nate: that is one of the hallmarks of what we do, build a product that is incredibly easy to use. we cut our teeth in the u.s. government where our end-users are often operating under pressure. they are pretty young generally. they might be changing jobs every 18 to 24 months. they are incredible capable but operating under difficult conditions. the central challenge for us was building a product that is easy to use. that means a user interface that
is intuitive and simple and some other innovations. we have an ai powered chatbot, a natural language chatbot that allows very junior analysts to use natural language in order to stop very advanced attacks. julia: make that simple for me. if i say to the system, find exploited software and shut it down, would it react to that? nate: it would do exactly what you just asked. julia: wow. is that unique to your system? you have big competitors out there. nate: we have many large and well-funded competitors. introducing that natural language interface to our product is unique. we are the first and so far only ones to do it. julia: talk to me about this sphere. we have seen a lot of headlines written about the breaches at the nsa and the shadow brokers and the comments they have made effectively auctioning off the information they allegedly
hacked and stolen from the nsa. what do you think when you look at this? what do you think is going on? nate: we all live in a world where it is increasingly hard to keep secrets. there are secrets that for reasons of national security are very much worth keeping, but technology is going to make it harder and harder to keep those secrets. the shadow brokers' attacks and other attacks over the last year have ushered in a new era in cyberspace security where now we all live in a world, all of us individuals, all of us as companies, live in a world where cyber weapons that were developed with nationstate resources have been released into the wild. it is as if there are a million boomerangs spinning and all coming back, we just don't know when or where. julia: how california's housing policy is holding back its climate policy. and what is next for zimbabwe after its military seizes power. this is "bloomberg
julia: welcome back to "bloomberg businessweek." i am julia chatterley. still ahead in this week's issue, zimbabwe after mugabe. the eu goes from lost decade to potential golden years. and the best business schools for landing high-paying jobs. all of that still to come on "bloomberg businessweek." ♪ julia: plenty more must reads in the magazine this week. we are talking about the climate.
>> as someone who used to live in san francisco, this is on the knock-on effect of housing prices and inaccessibility of housing in california. what is shown is that when people are pushed out of the main metro areas and have these extraordinarily long commutes because they need to live in areas where they can rent or buy a home, that is causing climate problems to get worse because people are driving cars further, gas prices remain low. so you are seeing emissions having a direct effect in the housing crisis and affordability in these metro areas that have seen extraordinary wealth, whether it is in san francisco, l.a. more wealth pouring in. people who have middle-class
jobs cannot afford to live in those areas, and the only way many of them can get to work given america's low penetration of high density commuter through rail or train travel is through driving. we see this problem where california is seeing emissions are not dropping as quick as they need to. julia: some of the numbers are quite shocking. 635,000 people commute 90 minutes or more. that is a 40% jump in five years. megan: what is so interesting is that it is so normal. it is so normal for people to look at these epic commutes, spend three or four hours in their car every day to get to these places. that is because there was not the foresight and planning to address how people are going to move from homes to jobs. there are just not enough houses. julia: the supply. megan: this is not uncommon in the western world, where people have jobs there are not enough affordable houses to support them. rents have gone up incredibly
high. it is not just whether you can afford to own a home, it is whether or not you can afford to rent a home. it is a serious problem. jerry brown has been one of the fiercest advocates to change this, to bring down, he has made climate a huge priority of his. he was in germany this week talking about it. again, it is an interesting fact that we do not connect. low gas prices, unaffordable housing, and climate change. julia: the number on this, 180,000 homes per year needed, 100,000 being built. this is a painful problem. they are not tackling it. megan: you need to incentivize house builders, whether through tax reform or whether or not you can promise some sort of subsidy. that is politically unpopular right now. it is seen as a transfer of wealth into the corporate sector. julia: from the californian climate to the story that opens up the magazine this week and
that is what is going on in zimbabwe. megan: we have seen extraordinary events this week in zimbabwe with what looks like the end of power for robert mugabe, military transition, taking control, placing him under house arrest. what we are seeing what seems like a dramatic shift in terms of who is going to be in charge of that government. julia: let's take a step back and set the scene. president mugabe has been dominant in the political scene in zimbabwe since 1980. he is 93 years old. we cannot underestimate the power and influence this man has had for decades. megan: 37 years of rule, many people in zimbabwe only associate him with. you are exactly right, and there are so many people who have thought the extreme decimation of that economy, hyperinflation we have never seen, becoming an international pariah, watching
his people starve in front of him, what was once a breadbasket of africa, true economic decimation, thought he would be forced out at some point. he has proven his resiliency. this is part of a wider political machinations. he has essentially anointed his wife as his successor, the leader of the youth faction and that has caused tremendous consternation with both his rivals and his fiercest rival, who is supported by the military which has now rolled tanks into the streets this week. julia: are we calling this a coup? it is very difficult to see what is going on. the military suggests that they are tackling corruption and corrupt individuals surrounding the president, but as you pointed out according to the south african president we do see the mugabe under house arrest at this point. megan: they are not calling it a
coup. there is no question that what we are seeing right now was a transition of power. it looks like as we speak at this time. what this piece is so eloquent in describing is do not mistake this for a popular political uprising where people are forcing the transition themselves. this is part of a political machination, and who eventually picks up the role of leader in zimbabwe, it is not as if this was forced by the will of the people. this is not a country that has democracy, democratic institutions that have been bred by robert mugabe. this is going to be perhaps a series of leaders before it settles. a series of transitions before the international community knows what to expect. we could be in for a rocky ride in determining who eventually wins what looks like is going to be a power struggle.
julia: the days leading up to the move by the military, we saw the vice president, the man beneath mugabe actually fired from his role. weave that into the story as we look ahead to what may happen. megan: this is what happened, he was deposed, forced out, but it was a close ally of the general who was in charge. people are going to compare this to the arab spring. we have to remember what happened when those things happened. you and i both remember the arab spring and the disasters in egypt with the muslim brotherhood and how that led to a military takeover in egypt. these transitions when they happen in this fashion are rarely simple. they are rarely one chess piece. it is usually several.
zimbabwe is a country that so many have looked at and said it is a true tragedy given their natural resources and history. is this a new opportunity? perhaps. is there also pessimistic outlook as to what could happen? yes as well. julia: what role does the international community play? megan: that is such a great question. i think the international community has rounded against mugabe for human rights abuses and, again, economic decimation. it is really going to be china, which is usually important in terms of investment, and how they settle on this. i am sure that the trump administration and germany, england will be watching very carefully to see whether this is going to descend into any violence. it does not look like that right now, but we will keep close tabs on what is happening with this transition if it is going to be this true transition of power. julia: where do we go from here? do we have to see what happens
and wait for the international community with how this plays out? as you mentioned, this is early days, and we do not have clarity or information from any places on specifically what is going on. megan: in the next few days you will see so many obituaries of mugabe's political life and there will be tremendous consternation and thought about what this means for this country and what this means for whether or not it is going to get finally an opportunity to rebuild itself in a way that makes sense. let's not forget the people in that country, and let's not forget who they are going to cast their allegiance behind. these are people who have suffered to a degree under this rule that is extraordinary and that we cannot really even imagine kind of deprivation in that country. there will be many people who look at his removal of power as something to celebrate, and i think there are people who will be cautiously optimistic.
julia: welcome back to "bloomberg businessweek." i am julia chatterley. you can find us online at businessweek.com and on our mobile app. in the economics section, posting its strongest growth in a decade, europe is no longer the sick man of the world economy. carol massar and i caught up with simon kennedy. simon: europe for a long time has had a bad reputation in the world economy. there are signs now that it is
not just recovering from the global financial crisis, but it is actually doing pretty well. there is data showing how strong germany is. we are looking at the best growth this year for the euro area in a decade. it is turning from recovery to expansion. at the same time, a lot of economists are lining up to say this is the start of a golden period, which is something we have never heard really discussed in the context of the euro area. carol: for people who have been asleep for the last 10, 15 years, they have missed so much. that includes the global financial crisis and the sovereign debt crisis in the eurozone. they had to recover the euro zone from a lot. simon: absolutely. while some economies rebounded, perhaps did not create the jobs some would have hoped in the early days and subsequently the wages, have had a pretty standard recovery from that financial crisis and recession, europe bellyflopped into the debt crisis. obviously with greece at the center, a flirtation with
deflation. it is very much the work of mario draghi at the european central bank in providing a lot of monetary stimulus, even more so in the euro area. that is finally starting to take effect. megan: i felt like the greek crisis was the greek crisis that kept on giving for so long. julia: kept coming back again. we never moved on. but for me, quite interestingly, the ecb saying that this is the best the eurozone has been since the formation in 1999. that is a pretty bold call, simon. to go to your point, how much is this recovery and how much is stimulus driven? simon: there are signs companies and consumers are taking that stimulus and putting it to work. a lot of what is happening here is boost from trade. europe is a big trader. they are benefiting from previous weakness in the euro. look at the region politically as well, look at macron in france, spain, putting catalonia
aside. countries that were stuck in the financial crisis and the debt crisis are picking up. even italy is performing better than their long-term trend. there are a lot of things pointing out weaknesses, but it does seem that there is a more robust economic backdrop for the euro area. julia: also in the economics section, it is not all rosy in europe on the doorstep of the eu's eastern border. belarus is building a nuclear reactor without international oversight. here is our editor, christina lindblad. christina: lithuania is the first soviet republic to break away in 1990, and it proceeded to orient its whole economy and politics towards western europe. now 30 miles from the capital, this gigantic twin tower nuclear
plant is going up on the other side of belarus. basically, it has completely made them crazy on several fronts. carol: is this fear of just the russian influence, being reminded for that region, and it is in their face? christina: lithuanians say this is a symbol of the past. then there is all of the legacy of chernobyl. carol: terrible disaster. christina: back in the late 1980's. these countries, people were recruited to help with the cleanup. we spoke to somebody who's neighbor was taken away to help and died shortly thereafter. julia: the russians are financing this powerplant. it is russian built. christina: and building it. the state-owned company is building it. carol: what is interesting is how close it is to lithuania. christina: there are more lithuanians near the plant than
from belarus. that is one of the main objections. in belarus, they have said that the reason to site the plant there was made because of considerations of topography. you cannot have water supplies too close to a plant because in the event of a disaster, it sparks an explosion. julia: talk about why they see it as such a threat. is it because of the russian influence? is it the fact that they have worked so hard to remove themselves from being so dependent on energy from russia in particular? because this is a factor for the whole of europe. christina: russia has a history of using energy as a geopolitical tool. they did it in the ukraine, where they basically threatened to freeze people in the winter.
in belarus, 95% of electricity is generated from russian gas. so lithuania has been trying to sort of ease the grip on the region, at least for itself. 26% of electricity in lithuania is generated from renewables, but more importantly they have built this lmg terminal which began the summer to take shipments from the u.s. from a plant in texas. they took their first shipment in august, and that is seen as an important milestone for the region. julia: a bridge to the west. christina: so those terminals that are being built in parts of the baltic are basically countering the historic lng and gas pipelines that go through from russia to the region. julia: up next, the venture capitalist justin caldbeck tries for a comeback after his harassment scandal.
julia: welcome back to "bloomberg businessweek." i am julia chatterley. you can listen to us on the radio on sirius xm channel 119, and also on 1130 am in new york, 106.1, am 1330 in boston, am 99.1 in washington, d.c., and am 960 in the bay area, and in london on dab mux 3, and in asia on the bloomberg radio plus app. in the technology section, venture capitalist justin caldbeck resigned in disgrace from binary capital after six women accused him of making unwanted sexual advances. now, he is working to end the so-called bro code in silicon
valley. here is our reporter ellen hewitt. ellen: justin caldbeck is a venture capitalist who used to run binary capital, and he resigned in june after a story came out that said he had six women, three named, and they came forward and said that he had made unwanted sexual advances while they were pursuing business relationships. this was from making suggestive late-night texts, in one case, he groped the leg of a woman entrepreneur under the table at a business meeting. things that most people would agree crossed the line. they were all in business settings. these women tended to be entrepreneurs who were looking for funding or had already received funding from binary capital. when the story came out, it was a huge deal, and he resigned a few days later. julia: he admitted it, too, didn't he? he said, not all of the women that he has hurt in the past have actually come forward, and as you have pointed out, these
people may not have worked for him, but they were in positions where they needed something from him and he abused that. he has been open about that fact. ellen: we met with him, and he talked about how in the months since he has been time at home, doing a lot of reflecting and he said that his main takeaway was that he was not aware, and many people agree that this is not an excuse, he was not aware of the position of authority and power that he had over these women who were in many cases looking to him to invest in their companies. that is a huge lifeline for them, their companies looking for money and he has the power to give it to them and he makes a sexual advance. it puts them in an uncomfortable situation. he says that he is more aware now and was less aware before, but it is a gray area where it is not an employee, but there is power and money and authority. julia: now he has become so aware of the situation that he is making a comeback.
he wants to educate men about what he calls the bro culture. explain what he is doing. there is a big presentation about how people should react and behave. ellen: in his thinking, he has now realized, at least he told us, that he thinks the beginning of the behavior that he had came from his time in college. he went to duke university, was a basketball player. he says he was taught there that dating a lot of women was a good thing. no one told him that if you take that same behavior to the workplace that could be seen as sexual harassment. he thinks the way he could do the most good is to educate young men around college-age as a cautionary tale. don't do what i did. be sure to stay very carefully on this side of the line when you are interacting with women in the workplace. a lot of people think that he is not qualified to give advice to college students, but he thinks this is the best way that he can do it.
he has prepared a 51 slide powerpoint presentation. he gave the first iteration of it to a finance class at duke last week. his goal is to, in his words, eradicate bro culture. julia: i spoke to our editor about business school rankings. >> harvard for a few years in a row has been our number one. you know, it is the oldest business school program for a masters of business administration. i believe they created that in 1908. historically very important name in the world of business schools. i think there is a lot of appeal and as we know in this world that can carry a lot of weight. julia: reputation. >> when you are polling students and alums saying what did they harvard business degree do for you, i imagine those rankings
are coming in high and that is what we see over the last couple of years. consistently in the categories, whether we are talking to employers or students or alums, how it affected salaries and other factors, it is coming out ahead on all of these. you know, there are small differentials for the rest of the top 10, but there is a solid, i think it is a roughly 10 point lead, if not just under that, between number one and number two, university of pennsylvania wharton. it has all of that combined in the right place. it is maintaining that. julia: talk about number two because they are a full spot riser. dimitra: they got high marks from students. julia: job placement also important in this case. dimitra: indeed, you see this in more and more schools, job placement is important. the economy is stronger now, but
consistently you are going to these schools to get a degree to come out with an awesome job and a great salary to start that is only going to grow from there. julia: and a lot of debt. >> debt is certainly a factor in holding a lot of people back. one thing that we covered in our story, which is not part of the ranking, but you are seeing dips in applications over the last few years. the economy is contributing to that. debt loads are contributing to that somewhat because employers that sometimes finance employees who go back for degrees are somewhat less willing to contribute to that. julia: "bloomberg businessweek" is available on newsstands right now and also online and on our mobile app. that is all for this week. thank you for watching. we will see you next time. more bloomberg television begins now. ♪
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