tv Best of Bloomberg Technology Bloomberg September 8, 2019 5:00pm-6:00pm EDT
taylor: i'm taylor riggs in for emily chang. this is the "best of bloomberg technology," where we bring you all of our top interviews of this week in tech. coming up, the tit-for-tat continues as china and the u.s. announce face-to-face negotiations scheduled for october. this after a new batch of tariffs imposed by the u.s. what it all means for apple. google will pay $170 million as part of an agreement with the ftc for violating children's
privacy on youtube. critics say it is not enough. and slack-jawed. slack shares plunge after the company's first earnings report since it's trading debut. there are service problems and competition from microsoft. this week, china and the u.s. announced face-to-face negotiations aimed at ending the tariff war will be held in washington. skepticism on both sides for true progress remains high. this follows president trump's 15% tariff that became a reality last sunday, dragging apple further into the trade war. while the flagship iphone is currently spared, some key products are not. namely, airpods, apple watch, home pod, and imac. guests joined us to discuss on tuesday before the latest round of talks were announced. >> apple is, like you pointed
out, the clear one. any company that has manufacturing in china is there. but what is potentially more interesting than that is it's starting to kind of spill over into other industries we had assumed were more resilient or tariff-proof. for an example, autodesk, and enterprise software company that is recurring, everybody thinks of that as being very defensive, but because it is an industrial software company, they are starting to see a softening outlook as a result of the ongoing trade war now that the tariffs have kicked in and are reality and not a negotiating tactic. i think we will see a lot of that go through and have people look at individual companies and say, is this going to impact some of those second derivative plays, not the obvious ones like the apples or semiconductors? taylor: what are those second-derivative plays? rishi: anything related to design and manufacturing would be that.
that would involve services that would involve anyone who is doing outsourcing related to that. that would also involve software companies like autodesk or those that have businesses in those sort of space that may be not obvious on first glance. taylor: you mentioned individual companies. i wonder if it is as simple as sell qualcomm and buy salesforce, or if there is something more idiosyncratic within those companies that you need to look at, given the trade tensions going on. rishi: your second point is absolutely correct. you have to be specific about the individual companies themselves, not just the sector. that is why we use software as an example. we know it is thought of as being a lot more defensive, but it turns out within software, there are some cracks. if i were to ask you about zoom video, for instance, that would not come to mind as being an obvious one, but a lot of their r&d and product development comes out of china and that is how they have been able to be so profitable. now, we have to wonder, do these tariffs maybe chip away at that
advantage they have on the r&d side relative to other software companies? it is very much company specific, not necessarily sector by sector. taylor: we have been within the trade fight. let's call it march 2018, we are 18 months in it. have companies been pressured on the margin side, the bottom line? you mentioned maybe they would cut back with r&d, but tech spending is still strong. are you seeing margin pressure show up? rishi: not really. tech spending at the business level tends to be very strong. outside of an actual macro event that impacts the economy and overall business spending, i don't see that slowing down. if i think about what sector i would want to be invested in and have more peacefulness around factors like brexit and the tariffs, i think technology and specifically software is the place to be. taylor: that was d.a. davidson's rishi jaluria. sticking with tariffs, some are saying investors are looking to software as opposed to hardware as trade tensions escalate.
the idc president says tariffs are having less impact on i.t. spending than originally predicted. we spoke to him on tuesday for more details. >> tech spending has not been that significantly affected as a function of the tariff talk. a lot of that has to do with where we were in the tech cycle. you have to remember that tech is infused in the economy now, infused in our work lives, in the infrastructure and how we entertain ourselves. so what we saw was that there was a huge data center buildout. server spending, storage spending was really high. if you look at infrastructure spending last year, it was over 20%. if we had gone back three years and said it would be over 20% as a buildout function of the cloud, nobody would have taken that seriously. so it really muted overall spending impact associated with tariffs. what we saw last year was about 9% growth overall, which was very high.
taylor: where are we in that cycle now? as we look forward, are we in the cycle where we could still start to see tech spending, or are we starting to see some uncertainty really start to play in? crawford: taylor, it's interesting. we are starting to see that shift now. we are starting to see customers take a pause, lock up a little bit, saying we cannot run our business by these little bits of information that come out. we have to be able to understand the long-term impact of imposed tariffs going forward. what we have seen is that we are starting to see a deceleration, and we are seeing a deceleration in spending overall, but it's primarily that we are seeing the customer start to take a pause, but we are also starting to see that that infrastructure buildout, companies are starting to take a step back from that and starting to slow down their overall spending. so our expectation for spending
this year is somewhere between 4% and 5% for overall tech spending. taylor: when you talk about customers, there is hardware and software. so far, it appears software for a little bit has been relatively insulated compared to hardware. is that accurate? >> absolutely. it's really interesting and we have to kind of remember this as as-a-service economy is. it really becomes something that impacts are much more muted. companies do not really move away from their salesforce.com subscription over time, but you can definitely say to your employees, we are going to make you have your pc's for five years instead of four years. we are going to push server infrastructure out another year before we do an upgrade. we're definitely seeing hardware is the first stuff that gets muted. really, smartphones are something that really gets muted. it's not that hard for consumers to say, i'm going to wait another year before i buy
another smartphone. taylor: that was crawford del prete, president of idc. coming up, $170 million. that's what google will have to pay as part of an agreement with the ftc for violating children's privacy on youtube. but does that really make a dent for the tech behemoth? and if you like bloomberg news, check us out on the radio. you can listen on the bloomberg gap, bloomberg.com, and in the u.s. on sirius xm. this is bloomberg. ♪
taylor: apple is returning to the bond market after an absence of almost two years. it borrowed $7 billion. apple is joining a slew of companies that are rushing to the investment-grade market after the labor day holiday. the company has more than $200 billion in cash and securities on its books. apple is developing in-screen fingerprint technology for its iphones. bloomberg has learned the
feature could be available next year. apple has had fingerprint scanning since 2013, but it is integrated in the home button. the new technology would allow users to scan fingerprints on the large portion of the display. it would work with the current face id system. and another fine for google. this time, youtube has agreed to pay a record $170 million to settle claims it violated children's privacy laws. most of the money will go to the federal trade commission. $34 million will go to new york state. youtube has been accused of failing to obtain parental consent in collecting data on kids under 13. we spoke with the vice president of net choice and bloomberg technology's ben brodie on wednesday to discuss. net choice is a tech lobbying group that counts google as a member. ben: it is certainly easy for
google to pay. it is a drop in the bucket compared to their annual revenue. it is, however, a very large fine by the standards of children's privacy, 30 times larger than the previous record, which came in february with tiktok, similar issue, collecting email addresses and names without parental consent on the popular teen video app. you have a lot of people who are saying this is not going to make a dent in google's business practices, but it is setting a record for this space. taylor: carl, you are taking the flip side of this. give me your breakdown. what do you make of the fine and the ruling to limit some of the ads and commenting on children's videos? >> thanks for asking. as ben laid out, the fine is 30 times larger than any prior fine. what surprised me so much was
the fact that the ftc was even able to extract this fine, given the fact that i think the ftc has gone well beyond the statutory limits of what the coppa law allows. essentially, youtube is a general audience website. every user on youtube says that they are over the age of 13. the terms of service say if you are under the age of 13, don't use youtube, you can't use youtube. there is really no there, there for the ftc to bring the action. i think it sets a really dangerous precedent going forward by suggesting that a general audience website is going to be decided by the ftc to be a child-directed website and subject to coppa. i would say for anyone who operates a website talking about "harry potter" or "the avengers" or anything that could possibly related to children needs to be worried that the ftc may be coming for them next. taylor: to be fair, we've gotten a lot of pushback from members of congress. we have a tweet from a senator and i will read it to you. senator ed markey saying that youtube knowingly broke federal laws. they are tracking kids to rake
in advertising dollars without permission from parents, but the ftc let google off the hook with a drop-in-the-bucket fine. not a single google executive or investor will bat an eye. carl, what do you make of that and the reaction from senators? carl: senator markey should know very clearly what the law does and does not allow, since he helped write it back in 1998. under the law, there are two ways you are subject to being under coppa. you are a child directed website or you knowingly collect from people under the age of 13. youtube did neither of these in this case. so, i think for a lot of people who are saying it is not enough, i think for a lot of those individuals, it will never be enough.
i think for them, whether the fine was $170 million or $170 billion, it will never be enough for a lot of people who fundamentally dislike these platforms and their right to give us free services. taylor: as for all of the antitrust issues surrounding google and other technology giants, we caught up with the former acting chairwoman of the ftc thursday, who weighed in on the issues at work. >> the fine is only one part of the remedy in any of these cases, the facebook case, the google case. there are extensive provisions in the settlement orders that require google to go above and beyond what the children's online privacy protection act requires. now they are having to screen content to see if it is child-directed and to go ahead and impose the parental notification and consent provisions on that kind of content. i think that the fine is only
one part of the equation. you really have to look at the conduct obligations that are being imposed going ahead. caroline: the u.s. led the charge in this respect. do you think other geographies might look into the child part of the equation, whether there are any other laws being broken or not abided by in quite the way they would like in other parts of the world? >> it is certainly possible. each country might have a different approach to children's privacy. the way congress struck the balance of the children's online privacy protection act is to have parents make the decision whether information about their children could be collected through online sites and services. in that way, what they are trying to balance is the incentive to create child-directed content against the desire to make sure children are being protected, and that is
the way we have struck the balance in the u.s., through congress making that decision. caroline: some lawmakers are not always thrilled with how policies are enacted by the ftc, as we heard. he mentioned the sweetheart deal for facebook. that sweetheart deal was a $5 billion fine, so a significant chunk of change, even though it pales in comparison of facebook's overall revenue. but what did you make of that ruling when it comes to privacy and how it changes the mode of conduct and the way that business practices will unfold for the businesses going forward? >> the facebook order, the settlement is quite extensive, and it requires facebook to create new types of oversight and monitoring and reporting, having obligations going up to the board level. it is quite extensive, and of course, a $5 billion fine dwarfs
any other privacy fine that has been imposed really anywhere, so i would not call it a sweetheart deal. i think it was a rather strong message. caroline: do you think tech companies are getting the message that, rather than having to respond to such accusations coming from regulators, such as the ftc, they can in some part start to get ahead of the curve and ensure that they are abiding by the letter of the law and the general meaning of the law before they are hounded by you, for example? >> i think you are right about that. i think they are paying even more attention to some of these issues. a lot of the companies have paid close attention to these issues, but i think it has really become a board-level issue in a lot of companies because there's not just the impact, you know, from an investigation and a fine, whatever the fine may be or what the obligations going forward are. there is also a reputational impact on these companies, and i
think they care about that. but i also think it highlights the fact that the privacy laws that we have in the u.s. -- the federal trade commission has done a good job with the law that it has been given, and congress did pass the children's online privacy protection act, but i think it is highlighting the desire to have maybe an additional federal privacy law that would give additional guidance to consumers and enforcers and industry itself. taylor: coming up, slack slumps. shares tumbled this week after the company disappointed with its first report as a public company. why sales are slowing. plus, taking on tesla. porsche powers up its electric sports car, but will it be enough to charge past the model 3? this is bloomberg. ♪ ♪
taylor: slack gave its first earnings report wednesday and investors were not impressed. while the company beat analyst expectations for revenue and earnings, it projected slower sales growth for the second half of the year. slack said revenue will be $154 million in the third-quarter, signaling strong competition against their rapid rise. we caught up with our correspondent and a research director on wednesday right after the results were announced. >> it is pretty stiff competition, but what microsoft is trying to do is push microsoft teams and this type of collaboration into the infrastructure. so it becomes this horizontal service that everyone in the company has access to. we can tell you based on our
surveys this past year that office 365 is increasingly being attributed to collaboration, enterprise collaboration, where in previous years, it was more associated as an email outsourcing service. so, in my opinion, as microsoft has succeeded with teams, it has also succeeded in building awareness of the need for collaboration and the ability to collaborate more effectively in the cloud, which should indirectly help slack and increase interest in the market overall. taylor: i want to bring in our reporter covering slack for us at "bloomberg technology." nico, give me your top takeaways. what happened to topline revenue growth? >> this is an instance in which slack's best was not good enough. we had seen for years that slack was one of the most hyped unicorns in silicon valley. it raised at least $1.3 billion because of that anticipation and the stock went down 15%.
today. the stock went down about 20% after the first pop when it went public in june. the reason why is the company is decelerating. whether we consider the revenue forecast for fiscal 2020, which was just short of the consensus estimate of wall street analysts, or if we consider the growth in the number of paid customers and large customers, but for many metrics, slack is not growing as quickly as it once did. of course, there is a law of gravity when it comes to these cloud applications companies. the larger that you get, the more difficult it is to continue growing at the same rate, but slack is a money-losing company. and so, from an investor perspective, if you aren't making money, you need to be growing. and if you are not making money and you're not growing as quickly as we want you to, then we are a little bit concerned. taylor: you not only got the investor perspective, but you just got off the phone with the ceo. what did he have to say to defend top and bottom-line growth? nico: i just spoke on the phone
with stewart butterfield, the ceo and cofounder, as well as the cfo. butterfield said, basically, this is very strong growth for our business. the cfo echoed that sentiment. they said that when you consider the amount of customers who are spending more than $100,000 each year with slack, so think of this as the largest businesses in the world, that number increased by 75 to 720. but that is still a slower pace of growth, and they are looking forward to a current product that they have coming out right now, which they think will continue to improve things, but they are going to focus and tell investors on the earnings call, which has just started, about the customer stories, basically. tell them what companies are using slack. they have seen lots of growth in europe, including germany. they are also seeing growth in the u.s., they say.
but essentially, they are sticking to their line of this is good enough, even as investors clearly are not happy right now. taylor: i want to bring in larry back into the conversation, because larry talked about the future of slack and part of that is bringing in some security tools. is that a future growth area for them? how does that can compare with others? >> when we talk about slack, we have to realize there are two different levels, two different families of products. one is slack teams, which you may be familiar with. the free version of slack. then there is a pay version of that where you buy that on a team by team, or workspace by workspace basis. then there is the slack enterprise grid. that is the enterprise license product, where you can get all you can consume teams and workspaces. that's who i talk to our clients about most often. that is where they are investing a lot into the security products, as well.
they recently released a new desktop client, which handles more effectively a larger number of workspaces, so they are expecting some growth there. they are also building in native mobile security features to kind of -- very similar to what in-tune does with microsoft, to control how the application behaves on a mobile device and to control the content that slack uses on the device. that is all good stuff to help them compete and build credibility with the i.t. professionals i talk with. taylor: that was bloomberg's nico grant and gartner research's director. just a reminder, bloomberg lp is an investor in slack. up next, porsche unveils its first electric vehicle. we will run down the features, including the price. that's next.
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♪ taylor: welcome back to "the best of bloomberg technology." porsche is getting into the electric car market. they just unveiled their all electric vehicle wednesday. it will start at $90,000 with the top price of nearly double that. its parent company, volkswagen , is hoping this will help cement its ambition to be the world's leading seller of battery-powered vehicles. matt miller caught up with the porsche ceo to see what is under the hood. >> it is an exciting moment for us, being able to present the new taycan.
four years of engineering. we have a lot of preorders and last week, it raced from 20,000 to nearly 30,000 preorders. we are very proud of it because all of these porsche fans have not already seen the car before the production and have not already driven the car, so today we will mention what will happen in the market and what will be the response. matt: they trust the design language and the dynamics of porsche. what can you tell us about the financing to build the car? you are the first carmaker ever to develop a car partially with a promissory note. how did you come up with the idea, how did that work? oliver: when we did the calculation, electro mobility,
you have much higher material cost, you have the investment you have to put in, and when we thought to calculate the product, we asked all the people in porsche to help to be able to finance the project. everybody put a part of the increasing salary of the next years for being able to finance the project, beginning with the board members to all of the people working at porsche. it was the first time in the automotive industry doing this. at the end, it was successful, being able to produce the car in germany, where the heart of porsche is, where we produce the 911 and the 718. matt: will you always make the car in stuttgart, in germany? is that something your customers demand? oliver: for our brand, it is very important. having cars designed in germany, engineered in germany, built in germany, it is a very important
argument, and we thought to go to a new era, we should do it where porsche comes from, where we built the first 365 in 1956, then the 911, now the taycan, and connecting our traditions with our future. matt: this will likely outsell the 911. the starting price is about the same. $90,000, 90,000 euros is somewhere in the ballpark of a base 911. did you have to sacrifice a lot of margin for that? oliver: we started first of all with some of the end service projects. later on, it will come with some base products around 100,000 euros or dollars. we have still a good margin.
it is not so high as in other projects that we have. we see the taycan as a starting project for a new mobility and there is a lot of potential in the future for innovation, but also for economic scale. taylor: sticking with electric vehicles, faraday future has named carsten breitfeld as its new ceo. ahead of taking over the reins, he spoke exclusively to ed ludlow and outlined his priorities for faraday. carsten: a three digit million dollar amount is missing to make all of this happen. the next step, to scale the wall and bring the next products to the market, the amount is even bigger. but if it is 100 billion or 200 billion, not so much of interest from my understanding. the most important thing is to get the trust of capital markets so they understand this company has a great future.
if you can make this point, we can progress. this is where i see my world coming in, because this company has a great vision, great product, and what it is missing is execution. bring the product to the market as fast as possible and this is where i am coming from. the digital ecosystem covering this whole part and coming from the car industry, this combination is perfect to make it happen. ed: you said when the question came of where the money is coming from. one of the biggest reports to backers of this company was denying reports of saying something like $600 million from the company. to the best of your knowledge, how much of that money has faraday future received? what is the status of the relationship with them?
carsten: strategically, it is a very important relationship because this company is coming from the digital world. yet we are talking about business models covering digital ecosystems. they are in the process of raising money now. there are some agreements between faraday we are not able to disclose yet, but we are in a good path to move forward. ed: as yet, they have not contributed financially to faraday future? carsten: this will be the next step in the upcoming funding round. taylor: that was faraday ceo carsten breitfeld speaking exclusively to bloomberg's ed ludlow. coming up, a california bill is threatening to shake up the gig economy. how companies like uber and lyft are responding. for, wework preparing public market debut. what this could mean for others in the co-working space. this is bloomberg. ♪
♪ taylor: it has been two years since uber ceo dara khosrowshahi took the reins. emily chang spoke to him about the company's evolution under his leadership, including his future including international expansion. take a listen. dara: part of our business has to fight for money and if they are not deserving money, they will not get it. internally, there is lots of creative destruction and competition and if one part of our business is not carrying its own weight, we will hold back . from china and didi, a big ridesharing business in china. end-to-end, we want to build a
business the right way, in alignment with our job partner society. but if something is not working, we believe we have demonstrated the financial discipline to make the right call at the right time. emily: driver protests are not unusual. last time we visited there was a protest outside. democratic presidential candidate pete buttigieg was out there with them. he said gig is another word for job and he said you ought to be protected as a worker. there is support for legislation for companies like uber to make employees full-time. why shouldn't they be full-time? dara: they don't want to be full-time. some do. more than half our drivers drive less than 10 hours a week. california has a historic opportunity. we are at the table, having these discussions, and we want to get to a solution. we are offering $21 minimum an hour when you are driving on the platform.
we are offering benefits and we are offering a voice as far as how you will be treated. $21 an hour compared to $12 an hour minimum wage. this is real money and you get the flexibility that every single uber driver wants because they can come into the market when they want, or out. this is a historic opportunity to revolutionize the gig economy. i don't think -- gig is a type of work. to say there is only one way to work and everyone needs to be full-time, i don't think that is correct because that takes away flexibility which is something our drivers prize. emily: can you give them flexibility and safety at the same time? dara: if the legislature works in the interest of making something happen, absolutely. we are making significant investments in safety as far as
the safety center, tracking your ride. we believe we are the leader in safety as far as transportation those in the world, and we will continue to invest aggressively that.at it -- in emily: the stocks are down and the press is writing about helium balloons. how do you stay focused on the long-term? dara: you put your head down and work and know this will be a once in a generation company that will change how people access opportunity and how people move. everyone will look at the short-term price. it is part of being a public company and people have worked really hard. the equity is a representation of their work. but i think the people understand that if they keep innovating, keep working hard, the rewards will come. they cannot control the timing but they can control the outcome. taylor: that was emily chang. as he mentioned, he believes drivers should remain as
contractors and joined other gig economy companies to step up the fight. lyft and door -- door dash combined a $90 billion ballot measure to make sure they don't reclassify their california workers as employees. california lawmakers have been weighing a bill which designates workers as employees. the bill goes up to governor gavin newsom this month if it clears the senate. josh eidelson joined us to discuss. josh: we have seen these gig companies since the state supreme court ruling that set off this ruling, this controversy, first trying to get relief from the governor and then from lawmakers trying to reach a deal with union leaders that with support from the legislature, if they had such a deal, could protect them from having to reclassify their drivers as employees.
companies are still trying to get a deal, trying to get something to happen in the legislature that would mean they don't have to reclassify drivers as employees, instead extending them other perks and benefits. but the company see that may not happen. a bill that would codify and expand the application of the state supreme court ruling that the companies did not like could become law and be signed by the governor. so they are gearing up to go to the ballot in response. uber saying our proposal would dramatically improve the status quo and ensure a dependable service for riders. lyft saying, we remain focused on reaching a deal and bringing this issue to voters if necessary. door dash, we are fully
committed to legislation that would protect the rights of workers as independent contractors and providing protections to them. tell us more about what is at stake. you talk to drivers and delivery people. the vast majority do not think they are getting paid enough, but do they want to be full-time? josh: you hear all kinds of things from people. the truth is, being full-time or part-time is not the same distinction as being an employee or contractor under the law. there are various people who are part-time employees, but more broadly there is a trend in the u.s. to what some call the fissuring of employment. more and more people are creating wealth for a company that sets rules for them without being considered that company's employees. that business model is at stake.
california, aside from being home of many of these companies, is a crucial market and a bellwether that will be looked to as presidential candidates and others debate what should happen in the gig economy, and should there be accommodation of new models? should the models have to adjust to accommodate new laws or existing laws that extend protections that historically have been tied to a particular definition of employment? we have seen 2020 presidential candidates weighing in on the legislation. we have seen these companies in sec filings reference the threat they could have to make a major change to their business model if they are not able to get the compromise they are looking for. emily: what does this mean beyond california? josh: the week after the court ruling that set off the controversy, bernie sanders last year introduced a bill that would apply a similar test to
federal labor law, making it that if you're not doing work outside the normal course of a company's business, you are not an independent contractor. if the companies can say that california backed away from an d changed that test that would , be a useful talking point whether that should happen at the federal level or other states. taylor: for the second time in under a month, google hacking teams revealed what happens on your iphone does not always stay on your iphone. visiting a small number of websites could leave iphone users susceptible to the breach, potentially affecting thousands of users per week. we should note google let apple know months ago and they updated their system less than a week later. it has apparently been fixed but
google has only now revealed the vulnerability existed at all. we spoke with the chief strategy reason, and our cybersecurity reporter last friday to discuss. roi: what happened was what we call a zero day vulnerability where a vulnerability exists. hackers are aware of that vulnerability before any paexis. that vulnerability opened the attackplatform for any on a malicious website. just by surfing through the website through safari, malicious malware could be downloaded and gain access to have access to the full device. malware could get access to i-messages, photos, locations, and do all sorts of damage, such as deleting data, extorting the user, as well as running a full
espionage attack similar to what we saw about a month ago from the telco side. we now see that possibility going from the device itself. emily: google told apple about this privately, had time to patch it, but still made it public and embarrassed them. which does not seem so white hat. ask when these attacksat?we als occurred, can anything be left behind? it seems like that possibility exists, which is concerning for users, and for users to understand no matter which device they are using there're going to be vulnerabilities and places they might not be safe going into and to be more aware
of how they are using the devices and getting access. emily: is there something disingenuous about apple's privacy marketing when they cannot guarantee that? roi: as an approach, apple has taken an approach of keeping a close and fully integrated technology stack, which help them protect the platform. but it is also fair to say no platform is fully safe and we live in a world where we need to be in a post-breach mindset and we need to assume if the processing unit exists, it is hackable and can be breached and has vulnerabilities. only with that kind of a mindset we can protect ourselves. taylor: still ahead, we work is ipo,work ready for an
♪ taylor: wework may seek a valuation of up to $30 billion for its ipo. we have learned that the office rental startup is still discussing potential terms. earlier this year, an investment from softbank valued it at $46 billion. one investor, sam zell, is not a fan. sam: the worst part of it is the corporate governance. it is unconscionable. the idea that jp morgan is putting out an ipo with that kind of corporate governance is unacceptable and is very negative for the whole economic system.
taylor: wework may take off next week. but it is not the only company that is disrupting the co-working space. wework competitor the riveter has opened 10 community working spaces across the u.s., designed to accommodate women specifically. since 2017, the company has raised $21.6 million with the goal of advancing workplace diversity. the riveter ceo and founder amy nelson joined us on tuesday. amy: wework is obviously a giant in the industry but the riveter sees itself as standing somewhere else. we are like a modern-day union for working women. we have content, co-working, and community. we provide a number of different price levels and access points for our members. we cater to a demographic that needs truly flexible work. they might need a part-time membership or drop in hour-by-hour. we look at how we can advance our community in the workplace through innovative programming like office hours with venture capital investors, as well as
exciting programming with celebrities coming in. taylor: how did you take advantage of some of the negative recent press around wework, namely about their financials, overvalued, high liability. how can you use that to your advantage? amy: we don't try to use it to our advantage but i think it is really instructive to look at how other companies that are going public are showing us the financial growth. a venture backed company's job is to take money and use it to fuel its growth. i don't fault wework for doing that. i think the interesting moment wework has now is to think about how they can change the direction if they go public and the statements they can make. one thing to note, they don't have any women on their board and i think it is an incredible opportunity for wework to make their board half women. they have so many incredible women leaders in the company, so why not bring them into more public positions? taylor: how do you differentiate yourself financially? you have rival companies that lease instead of own out there
companies. how are you built from the bottom line? amy: our model, we look at it as real estate lite. we are not engaging in massive build outs. because we are catering to a demographic that wants more flexible workspace, the riveter is able to go into spaces as they are, mold them into what our brand is, without doing a large buildout. we can take shorter leases with options to renew and our buildout costs are much lower and we are amortizing them over the life of the lease. taylor: are you profitable? amy: all of our spaces are cash flow positive, which is a big moment for us. taylor: do you view competitors like wework as a zero-sum game or do you think if they succeed and highlight the success of co-working environments, that everyone can succeed in that space? amy: i think co-working is an industry that is just beginning. as the future of work changes to be more flexible, freelancers
and people working in the remote and gig economy will need spaces like this. i like to think of our spaces and how we can cater to really interesting segments in the economy like working mothers who may have left full-time jobs, but go on to do independent work on their own. we provide spaces for that demographic, which is exciting. i think there is enormous opportunity for so many players in this space. taylor: we talk about wework of course trying to file for their public offering and looking at going public in the coming weeks, coming months. any plans for your company to go public? amy: not today. we are just 26 months old so we are very new. down the line, anything can happen. taylor: that was riveter ceo and founder amy nelson. that does it for this edition of "the best of bloomberg technology." we will bring you the latest in tech throughout the week. 5:00 p.m. new york, 2:00 p.m. san francisco. we are livestreaming on twitter. check us out at technology and
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