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First Move with Julia Chatterley
Big Tech Breaks Records in the Second Quarter; Jay Powell's Latest Take on Delta Variant and Inflation; Regulators ask questions ahead of the Robinhood IPO. Aired 9-10a ET
Aired July 28, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here is your need-to-know.
Pandemic profits. Big tech breaks records in the second quarter.
COVID costs. Jay Powell's latest take on delta variant and inflation.
And Robinhood meet the Sheriff. Regulators ask questions ahead of the IPO.
It's Wednesday. Let's make a move.
Welcome to FIRST MOVE once again. Great to be with you this Wednesday and lots to discuss including the U.S. tech earnings blowout, China is
stabilizing after their stock market wipeout, and yes, as I mentioned, we're also on Jay Powell taper talk lookout. The Fed policy stakeout and
$57 billion worth of profits for Apple, Alphabet, and Microsoft. Yes, you heard me there, front and center today, the NASDAQ staging a premarket
recovery after Tuesday's one percent drop.
We've also got Boeing set to rally some five percent after reporting a surprise profit, and Europe is breaking a two-day drop after strong
earnings from both Deutsche Bank and Barclays earlier today. Barclays is up from three percent, too in London after raising its dividend and increasing
share buybacks. You can see it there, up three percent in the session today.
And it's another volatile day for Asia tech, but the Chinese tech giants Alibaba, Baidu, and Tencent did manage to end the session higher; same, too
for the Hang Seng index after losing some eight percent in the past two sessions. You can see they are staging a one and a half percent recovery.
The difference today, actually pretty simple, Chinese state-run media intervened to calm market nerves. Various market focused newspapers
including the "Chinese Securities Journal," telling investors that fundamentals haven't changed, that the market will stabilize and recent
declines reflect the misunderstanding, and "venting of emotion" quote, related to their policies.
I have to say there remains plenty of uncertainty about the future of regulation of growth sectors like food delivery, like online education, and
property management, too. So, it's not over yet.
Stressful times for Chinese investors, profitable times meanwhile, the U.S. tech and their investors and that's where we begin today's drivers.
Clare Sebastian has been keeping track, and Clare, these numbers are just monumental. We should be somewhat used to this by now, but I'm simply not.
I'll repeat, $57 billion worth of profits in the April and June quarter for just these three names.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Julia, and when you consider that these companies -- these three companies worth a combined
more than $6 trillion in market value, it is eye watering the kinds of growth rates that we're seeing. Even Tim Cook, the CEO of Apple in the call
called some of the growth the company is seeing jaw dropping.
So, I think you know, they surprised even themselves, and some key trends to pull out with Apple, the iPhone is really booming. Before the pandemic,
we were discussing whether or not the world was reaching iPhone saturation. That does not seem to be so.
This is a product where there are more than a billion active devices globally, seeing another 50 percent growth in this quarter. Some of that,
of course is -- a lot of that is upgrades. There's a lot of appetite for the newest the 5G enabled phones. Apple still in the early innings of that
according to Tim Cook.
For Alphabet, the story really is a resurgence of online advertising last year. In the June quarter, companies were really slashing their budgets,
trying to sort of rein in any spending during the pandemic. It's now back. Alphabet's core advertising business was up 69 percent. YouTube advertising
up 84 percent. This is a huge growing area.
And another key trend that does not seem to be decelerating as the pandemic, you know, may or may not be waning, is the work from home hybrid
Cloud businesses. Microsoft still around 50 percent growth and as for Google Cloud, they are diversifying away from just advertising. Google
Cloud, also growing some 54 percent. Microsoft should be looking closely at that.
So, all of these trends that many had discussed whether or not they might be sort of transitory during the pandemic, clearly not so, they are here to
stay. And extraordinary growth rates today from these companies -- Julia.
CHATTERLEY: I know. If you weren't growing 30, 40, 50, or 60 percent in some of these business lines, then you are drastically underperforming,
which I think is everything.
What we did here though was some elements of caution, and we've already talked about it, Clare, in terms of the chip business and what impact
that's going to have, whether it's on iPhone sales or iPad sales or for where we're talking about Microsoft, them just saying, look, if people
aren't able to produce the number of PCs, then we're not going to be selling the numbers of Windows subscriptions, and that did filter through
in these numbers.
[09:05:10]
SEBASTIAN: It did, and I think that shows the scale of the problem, Julia, when the giants who was so nimble and so able to diversify their supply
chains, not to mention sort of make their own semiconductors that they are affected by this as well.
Apple saying that they were able to mitigate some of the expected impact to iPhones and iPads, particularly in this quarter, but they expect it to get
worse in the September quarter. They're also affected, of course, by the sort of collision of the supply chain constraints and the surging in
demand, and it's not just chips, Tim Cook thing that he would like to be paying a little less for freight that's probably something of an
understatement.
And Microsoft as well saw a 20 percent drop, for example, in sales from their surface laptop line, and they expect another drop in the next quarter
of the low teens they said, so these companies are also affected, they are also working to mitigate and it is going to affect growth going forward.
I think that's why you see some hesitation from investors around Apple stock today.
CHATTERLEY: Yes, absolutely. Clare Sebastian, thank you so much for breaking down all the details from that. Fascinating numbers, monumental
levels of profits. Clare Sebastian, thank you.
And some of these challenges also going to be key just hours from now when the Fed delivers another key policy statement, not to mention, delta
variant fears, of course creating fresh problems for the perennially patient Jay Powell.
John Harwood joins us now from Washington. John, fantastic to have you where there's two key elements of this, I think that we're going to be
focusing on: pricing pressures, supply chain pressures, but also to what extent he talks about how the delta variant is going to impact their
forecast, particularly in light of what we heard from this C.D.C. overnight, deciding to reiterate mask mandates for vaccinated individuals
indoors, too. Lots for them to discuss today.
JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Julia, think about all the conflicting pressures swirling around Jay Powell, the Federal Reserve Chair
at the moment. You've got both the steady growth that we're experiencing in the economy, but also this burst of inflation, don't know how long it's
going to last, consumer confidence is pretty strong. Yet, you've got millions of people still out of the labor force and the job count is down.
And now, you've got the resurgence of the delta variant, which is causing a shift in approach to the pandemic, potential impacts on the economy. All of
this, as Jay Powell is going to try to figure out how quickly the Federal Reserve is going to taper its accommodative monetary policy and further,
how it's going to react if and when inflation persist beyond the short term, when do you begin to raise rates? And how do you engineer a soft
landing?
Very difficult job for Jay Powell, and he is trying to manage all this, of course, as his term is about to expire, and President Joe Biden has got to
decide whether or not to re-appoint him.
CHATTERLEY: I mean, the concerns about the delta variant and the uncertainties regarding that, one of the arguments for him saying, look, we
need to be patient here and just simply take it day by day and see how it goes, even with the price pressures that we're seeing.
But to your point, it's a fine line to be walking. Speaking of President Biden, we're going to hear from him today on Made in America and new rules,
perhaps for how on what you define in terms of the manufacturing process on what needs to be made in the United States, and it sort of ties to what
we've seen throughout the pandemic and the challenges of managing the supply chain for goods.
HARWOOD: This, Julia, is where economics meets politics in the American system. Of course, this is true of many democracies around the world.
People are concerned about jobs going overseas, and politicians respond by saying, well, we're going to make sure that we make our purchase decisions
with an eye toward American manufacturing. That may not be the lowest cost option, but there are other reasons, in addition to simply cost for trying
to keep some manufacturing in the United States.
We saw that during the pandemic, when you had the supplies of some of the medical goods, the masks, and other things coming from overseas, the United
States wants to preserve that capacity for national security reasons.
So again, this is one of those cases where you've got a President who says, I am on the side of working Americans, on unionized Americans, blue collar
Americans, and trying to demonstrate that by amping up the amount of American content in goods purchased by the Federal government.
CHATTERLEY: Yes, beautifully put there, John, where economics fundamentally meets politics. We'll see what he sees today.
John, great to have you with us. John Harwood there.
All right what's under the hood at Robinhood? FINRA, the Financial Industry Regulatory Authority is looking into the fact that the popular trading app
CEO is not licensed by the agency.
This comes just ahead of the company's much anticipated public debut.
[09:10:01]
CHATTERLEY: Matt Egan joins me now. Matt, and this is one of those stories that you picked up on right in the beginning, but I think we just need to
understand what the issue is here, because my understanding is if you are the CEO of a parent company, and that's what the CEO of Robinhood is, then
you don't need to be licensed regulated by FINRA.
So, what's the issue here? And what might regulators be asking questions about?
MATT EGAN, CNN BUSINESS SENIOR WRITER: Well, Julia, legal experts have told me that this is a bit of a gray area. FINRA does require that the CEOs
of registered broker dealers get licensed with the agency. Now, the goal is to make sure that these executives get the training, that they demonstrate
the competence that they need for these important jobs, and also, it lets the public track whether or not there's any violations.
Now, Robinhood would argue to your point that it's in the clear here because Vlad Tenev is the CEO of the parent company that owns the broker
dealer. But some experts that I talked to in February, when we reported on this news, they were alarmed by the fact that Tenev is not registered
because he is the public face of the company. We recall how he testified in front of Congress earlier this year during the Reddit and GameStop
hearings.
There's also one former compliance officer who told me that this is a huge story on a scale of one to 10, it is a 10. I think the key though, is going
to be how regulators conclude just how involved Vlad Tenev is in that sort of the day-to-day operations of the company.
And some of Tenev's his previous comments could come back to haunt him. He did that interview on "Clubhouse" with Elan Musk earlier this year, where
he described being really involved in some of the negotiations, the very delicate negotiations with Robinhood's clearinghouse over how much capital
the company needed to put up.
Now, we don't know how this is going to end as far as this investigation, but clearly, Julia, regulators are looking very closely at Robinhood ahead
of this blockbuster IPO.
CHATTERLEY: Yes, and they do have a President that heads up each of these individual business lines, whether it's their clearinghouse operations,
whether it's the brokerage, too, and I guess that's the other point that they're going to make here and there is precedent. Does Jack Dorsey have a
FINRA?
EGAN: No. So, Jack Dorsey is not registered with FINRA. However, Charles Schwab CEO is registered with FINRA; and Webull, which is a rival
Robinhood, their CEO is also licensed with FINRA. So as I said, it is a bit of a gray area.
CHATTERLEY: Yes, interesting. And also, they're also having questions asked as well of meme stock trading, I believe by Robinhood employees. So,
there's a number of things going on here. So, there's going to be plenty of questions asked, and of course, the IPO tomorrow.
Matt Egan, great to have you with us. Thank you for that.
All right, up next. The new Barbie boom sales surge after a 21st Century makeover for Mattel's brands. We've got the CEO. Wow, nice moustache there.
And Simone Biles greatest speech yet. The star gymnast gives up gold medal hopes to champion her mental health. We take a look at the changing
conversation around performance. Stay with us.
(COMMERCIAL BREAK)
[09:15:54]
CHATTERLEY: Welcome back to FIRST MOVE with an update on the stories making headlines around the world.
In Thailand, hospitals being overwhelmed by soaring numbers of COVID-19 cases. Authorities in Bangkok plan to turn 15 passenger trains into
isolation units for coronavirus patients waiting for hospital beds.
On Wednesday, the country reported its highest ever tally of new cases in a single day.
An extreme heatwave and unusually dry weather didn't cause the wildfires burning across southern Europe, but they are making them far worse, leaving
behind unprecedented damage in some parts.
CNN's Scott McLean reports.
(BEGIN VIDEOTAPE)
SCOTT MCLEAN, CNN CORRESPONDENT (voice over): Day turn to night. In Sardinia, dark plumes of wildfire smoke blot out the sun, wildfires are
raging across the Mediterranean Island. It's dangerous to stay in one place too long.
A disaster without precedent is what the President of the Sardinia region calls it. He declared a state of emergency on Sunday. Hundreds have been
evacuated and the Italian government had to call in help from France and Greece who sent firefighting plains.
Sardinia is hardly the only European region struggling with wildfires, Catalonia has managed to stabilize most of the wildfire that burned nearly
2,000 hectares of land.
UNIDENTIFIED FEMALE (through translator): We felt very helpless not being able to do anything over here watching the flames that were getting closer
and closer, and we cannot do anything.
MCLEAN (voice over): Just over the Pyrenees in Southern France, it took 800 firefighters to bring a blaze under control. They say they are still
worried about the parched earth that could be jet fuel for a new fire.
And in Greece, too, dozens of firefighters are battling an inferno just north of Athens, warning residents to close their windows and doors. It
comes, of course, just weeks after devastating flooding in Germany and Belgium killed more than 200 people with over 100 still missing.
Droughts are becoming more frequent and more severe in Southern Europe. European environmental authorities say that this region is at greatest risk
on the continent as the impacts from climate change increase.
FRANS TIMMERMANS, EXECUTIVE VICE PRESIDENT, EUROPEAN COMMISSION: The fact that erratic weather patterns are going to be the new normal means that we
need to adapt to that and we need to prevent things getting worse. And if we don't do something urgently and urgently, I mean now then, you know,
climate crisis again is going to get really out of control and our citizens do understand that we need to act now.
MCLEAN (voice over): And as extreme weather and fire becomes the new normal for more and more of us, that action cannot come soon enough.
Scott McLean, CNN, London.
(END VIDEOTAPE)
CHATTERLEY: The U.K. is expected to soon announce its fully vaccinated travelers from the United States and the E.U. can avoid quarantine when
arriving in England. Right now, only people vaccinated in the U.K. are exempt from spending time in self isolation. The government is under
mounting pressure to help the travel industry return to some degree of normality.
Olympic tennis organizers in Tokyo will push back Thursday's start time for matches a few hours because of hot and humid conditions. A Spanish player
pulled out of her woman singles quarterfinal match due to heat stroke. Officials say the decision was made in the interests of players' health and
welfare.
Okay, second quarter sales at Mattel, the makers of Barbie and Hot Wheels are up 40 percent year-on-year, net losses have narrowed as the company
uses its intellectual property, too. The max diversifying into things like film, TV, and games. But the core toy product remains a stronghold.
Sales of dolls rising some 51 percent thanks to super brands like Barbie, American Girl, and Polly Pocket.
Ynon Kreiz is Mattel's CEO and he joins us now. Ynon, fantastic to have you on the show. Another strong quarter as far as I can see looking at these
results. Talk us through it.
[09:20:10]
YNON KREIZ, CEO, MATTEL: Yes, Julia. These are exciting times for Mattel with another exceptional quarter. Our strength is broad based, and we
significantly outperformed the industry and gained market share in each region. We're now firmly in growth mode and our top line performance is
adding momentum to our transformation strategy.
We expect to continue growing for the rest of the year, and achieve double digit growth in sales for the full year with high growth in profitability
and in cash flow.
CHATTERLEY: I think one of the big questions and it all sounds great is to what extent supply constraints, shipping costs are going to impact prices,
despite the strong performance that you're talking about as we run into the holiday season here. You've suggested that prices will have to rise. Can
you give us any numbers on this? What are you seeing?
KREIZ: Yes, we do see some inflationary pressure. We actually saw that as well as some supply chain challenges in the second quarter, but we were
able to manage through global supply chain disruptions, and had very little impact on results in the quarter, essentially immaterial impact on our
results in the quarter.
So this is what we do. We have very strong supply chain capabilities, large and scaled network, and given the strength and capabilities that we have,
we believe we'll be able to manage with these disruptions.
When there will be a price increase for our product, we always do that with a consumer in mind and make sure that we maintain the right balance,
between quality, safety, and of course value for consumers.
CHATTERLEY: Which clearly is the hope. If we take a step back here, Ynon, you've been through a three-year transition period, I think for this
company. You've been ruthless about cutting costs, you've exited certain manufacturing operations in places like China and in Canada.
And then the second part, I think of the strategy in the business here is just looking at the sheer quantity of intellectual property that you have
and saying, look, how do we best monetize this? And we've talked about this in the past, it is taking you into gaming, you've got 13 films now in the
works.
Just talk us through where you are in terms of your thoughts as the CEO of an evolving business and a business that, you know, as we've discussed, has
great intellectual property and you have to be clever about how you utilize that.
KREIZ: Exactly, yes, we own one of the strongest catalogues of children and family entertainment franchises in the world and that gives us great
opportunity, tremendous opportunity to extend our business beyond the toy aisle.
We can do great things on the toy side, there's plenty of growth and opportunity. But where we can do even more is extend our brands and
franchises that have such built in fan base of people all over the world, and participate in other important categories such as film, television,
video games, consumer products, and merchandise, music, and every category where big brands, big trust brands are a key factor.
And we see incredible interest from some of the best creators in the world, the most prolific creators in the world, want to partner with us, make
exciting movies such as Barbie, Polly Pocket, Hot Wheels, and many others as well as great television series and episodic content for fans all over
the world, and it is really exciting to see the reaction, the interest, and the momentum that we're having in this exciting growth area from Mattel.
CHATTERLEY: This is an element of trust involved, though, that these things that are a success, and the feed through then is that it lifts the
product sales that you create, because it's an interesting business model. As you've said, look, we're capital light here, we're not funding the
movies, we're not funding the development ultimately of these online games. So, how much upside do you actually get in the success of those movies or
those online games beyond the fact that you hope it just boosts the sales of the toys that you create?
KREIZ: We see this part of the strategy as business accretive. We're not making content in order to sell more toys. We make content, we make the
games, we are participating in movie production, and we see this as a business opportunity.
The mandate is to make great content that people want to watch, create great experiences that engage consumers. We see this as a business
opportunity in of itself. And of course, if these things work, good things will happen and we will also sell more toys, but the mandate to the
creators is to make great content, not worry about selling toys.
We know how to do that. We've been selling toys very successfully. We are experts in creating evergreen franchises, and this is another step in the
evolution of the company, as an IP, as an IP enterprise, as an IP company that we will be able to commercialize and capture full value of the
incredible franchises that we own.
[09:25:26]
CHATTERLEY: Yes, I think this is an important point for investors to understand as well. Mattel is no longer a toy company, this is about a huge
diversification of what you represent, and where the business lines are in the future.
Talk to me about the adult collectible market and non-fungible tokens because I think this is something and we've also talked about this in the
past that for some people, they just -- their head explodes when they talk about it. But you do see an opportunity for Mattel in getting into this
space. Talk me through this.
KREIZ: Absolutely. This is another great example of how we're able to extend our franchises to new opportunities, new domains, digital
experiences, NFT in this particular case is a growing industry, still nascent, but evolving fast, and we were able to participate there as well
and launched three Hot Wheels cars that are designed for collectors, they are classic cars from our garage series, and they were auctioned on the
Mattel Creation Collector Platform, and we intend to offer more during the year, including the opportunity for consumers to transact with
cryptocurrency.
This is another example how we can extend our business in addition to what we do on the toy side, then, just to come back to what you said earlier, we
are still very happy and see great opportunities on the toy side of the company.
We're not stopping being a great global leader in this category, which is growing and has potential in and of itself. What we do, do is diversify and
extend our business to other categories that are also driven by big franchises, big brands, and the opportunity between what we do on the toy
side and how we extend our brands in other categories is the exciting part of what we do.
CHATTERLEY: And just to be clear, people can pay in cryptocurrencies as well. You're not worried about the volatility, about some of the concerns.
They were allowed to pay for these, I believe, in Ethereum.
KREIZ: Absolutely. We offer that opportunity as well. We evolve as a company, we are looking to be progressive and meet consumers wherever they
are, and offer people opportunities to shop and engage with our brands in multiple ways.
CHATTERLEY: Yes, Mattel for the 21st Century. Great to have you with us, Ynon Kreiz there. The CEO of Mattel.
KREIZ: Thanks, Julia.
CHATTERLEY: Great to chat with you, sir, as always. Thank you.
The market opens next. Stay with us.
(COMMERCIAL BREAK)
[09:31:03]
CHATTERLEY: Welcome back to FIRST MOVE, and U.S. markets are up and running this Wednesday. The major averages moving higher, as we await the
latest policy pronouncements from the U.S. Federal Reserve later today.
A bit of relief, as Chinese tech stocks have stabilized overnight, too. China's state media trying to calm fears over Beijing's ongoing regulatory
crackdown that has triggered huge losses for many of those Chinese tech firms and those of course, that are listed in the United States, but the
NASDAQ, the outperformer up some half a percent early on in trade today.
Strong U.S. earnings also helping sentiment. Boeing, the big blue chip gainer after reporting a surprise Q2 profit. You can see that higher by
more than five percent. McDonald's and pharmaceutical giant, Pfizer, all reporting solid results before the bell as well. Pfizer raising its
guidance as it moves ahead with developing a booster vaccine for the delta variant.
A mixed picture, however, for tech. Google and Microsoft gaining after last night's earnings beats. Google earnings almost tripling in the second
quarter, but Apple softer on concern that supply constraints will impact growth.
Starbuck shares also lower. Solid earnings, but sales in China came in below expectations. That stock down almost three percent in early trade.
America's most decorated gymnast meanwhile, has pulled out of the women's all round final tomorrow. Simone Biles say she wants to focus on her mental
health. The 24-year-old is the face of the U.S. Olympic team and was favorite to add even more gold in Tokyo.
Selina Wang joins us now from Tokyo. Selina, a huge surprise here in the United States and much talked about not only from the medal prospects, of
course, but the fact that she chose to say, look, my head -- my headspace was not in the right place, and I didn't want to get injured and I'm
stepping back and letting the other girls in the team take charge here.
Selina, what are people making of it there?
SELINA WANG, CNN CORRESPONDENT: Well, Julia, among fellow athletes, she is being applauded for having the courage to know when to pause, when to stop,
and to protect herself. It was such a huge shock when she initially announced the withdrawal from the team final. And the team said, the U.S.A.
Gymnastics said that after further medical evaluation, she is now also withdrawing from that all around final and they're going to take it day by
day to discuss and figure out whether or not she is going to be at those individual event finals next week.
And it is just such a surprise to have perhaps the most visible face of the Olympics, as well as the star of the U.S. Olympic movement to come out and
make these statements, and Simone Biles has been outspoken about her mental health challenges.
Just days ago, she had given an interview to "The New York Times" where she talked about the taxing, the difficulty that this sport is not only having
on her body, but also on her mind and she said she is not actually at the Tokyo 2020 Games for herself or even for U.S.A. Gymnastics, but for women
of color, for gymnasts of color. She is also the only known survivor of Larry Nasser's abuse who is competing at these Tokyo 2020 Games.
I was at her qualifier on Sunday in which she had a shaky performance and Julia, after that, she said that sometimes she feels like she has the
weight of the world on her shoulders. And after another shaky performance on Tuesday, she had a very emotional speech to the press and she said,
sometimes, it is hard when she is battling with her own head and she hopes that by coming out, she is showing that these athletes no matter how
decorated they are, that they are also human.
And Julia, it is just unimaginable, the kind of pressure that Simone Biles was facing going into these Games. Not everybody has a GOAT meme made out
of them that says they are the greatest of all time.
And her comments about mental health challenges, Julia, as well as Naomi Osaka's comments about mental challenges coming out of that tennis match of
which she is now out of the Olympic Games. It has really just sparked this broader discussion, Julia, about the treatment of Olympic athletes and the
immense pressure that they face especially in this new society we live in with digital platforms, 24/7, every part of their lives picked and analyzed
at all times -- Julia.
[09:35:11]
CHATTERLEY: Yes, it's funny, isn't it? If you were in or weren't in physical top performance, you wouldn't compete, but we tend to sort of
suggest that you know, mentally you just have to get on with it and you go out there and perform and in her case, in particular, it's dangerous to do
so.
Selina, thank you for that update there. Selina Wang.
Okay, coaching company, BetterUp, focuses on the link between mental health and performance. It offers coaching in areas ranging from diversity to
parenting, and uses artificial intelligence and behavioral science to track changes in performance.
The company made headlines when it hired Prince Harry as its Chief Impact Officer in March. It's just announced plans to expand into Europe.
And joining us now is the co-founder and CEO of BetterUp, Alexi Robichaux. Alexi, fantastic to have you on the show once again. And of course, you and
I talked when you made that high profile hire of Prince Harry earlier this year, and we didn't really get a chance to talk about what you do as a
company in more detail. And this is a great opportunity, I think to talk about it. Just explain what BetterUp offers to some incredibly big clients
around the world.
ALEXI ROBICHAUX, CEO, BETTERUP: Thanks, Julia, and lovely to be back. Yes, BetterUp is a one stop shop platform for everything from coaching, to
counseling, to mentorship and as your conversation about Simone Biles, BetterUp is the leading platform for mental fitness in the world.
And so we partner with some of the world's largest employers so that they can support their employees, everything from frontline hotel workers,
companies like Hilton Hotels, to managers to junior executives, at every level of the organization helping people work in everything from
leadership, to growth mindset, to things like sleep and nutrition, even things like leading inclusively, or parenting.
And to your point, the time has never been more ripe, and we see more and more people are realizing, in part by the leadership of folks like Naomi
Osaka and Simone Biles that it is okay to prioritize myself and my performance and life and work as much as that's based on technical job
skills is equally if not more, based on things like my mental resilience, my psychological stamina, my own growth mindset and my self-awareness.
And so BetterUp is the leading platform that companies partner with so that they can invest in their employees as whole beings, not just as employees,
but actually as human beings investing in that human growth and transformation at scale.
CHATTERLEY: Yes, it's fascinating, isn't it? Do you work with any sports teams, just out of interest?
ROBICHAUX: Yes, we do have a couple. I can't release the names as you can imagine. Some of these organizations do BetterUp as a competitive
differentiator or some -- you know, a way to supercharge their organization's performance. But we have had interest and some participation
from sports organizations.
CHATTERLEY: Because we do tend to put more emphasis, and I sort of mentioned it there, and I'm sure you heard it on the physical performance
and in the workplace, less attention to where you are mentally. In the case of an athlete, you know, in her example, she could injure herself quite
badly if she makes a false move, whether that's a physical issue or simply that her mind, she said she wasn't in the right headspace to compete and
perform.
Alexi, how do you track how your coaching and your support is helping because the AI aspect of this and the accumulating data just to understand
how your support is providing a better more productive workplace is quite fascinating to me. How do you justify spending on your coaching as a
company?
ROBICHAUX: Sure, we look at data at three different levels in our data model. And the first layer of that is we're looking at behavioral data
related to engagement, to their learning behaviors, to areas, topics, and themes that they're focused on.
The second layer is we do look at data related to outcome. So, depending on what solutions companies are using, that can be anything at looking at
something like, you know, if they are a sales professional, are we seeing over time, things like quota performance increase? Are we seeing, you know,
different scores at let's say, a hotel location related to customer satisfaction go up.
And then the third thing we look at is at a population level and the individual is part of this data. We can actually look at changes in
psychological resources and behaviors over time. So, this could be things like we see things like cognitive agility improve. We see things like
growth mindset improve.
We see things like psychological resilience, which we know is really a leading indicator of a lot of elite performance, of the ability to grow and
adapt and learn in very quick and high paced environments. So with these three different layers of this kind of data cake, you can imagine, we get
the most comprehensive view of what does whole person performance look like.
In fact, we just published some of the data in one of the leading online medical journals and what we found is not only do you see changes across 26
different mindset skills and behaviors, we're starting for the first time ever in human history to see what is the cadence or order of changes. And
it turns out if you take something like leadership performance that actually what happens when you're growing and working to become a better
leader is, the first things you focus on, and the first areas you improve are actually these things related to thriving as an individual.
[09:40:22]
ROBICHAUX: There are things related to mental health. You actually see mental health increase first, then you see leadership increased as a
derivative function of that.
So for years, for decades, we thought about these as two different things. Just like Simone, we may think about her performance as a gymnast is one
thing, her mental health is a separate thing. And what we're realizing through science and through our platform is actually mental fitness
underpins almost every type of human performance, whether that's leadership, whether that's a floor routine, whether that's if you're an
elite operator in Special Forces, your mission effectiveness in the field.
CHATTERLEY: You are and have raised money. You're expanding into Europe, as I mentioned, HQ is in London, I believe and in Munich as well. How much
of the growth that you're seeing has happened since you announced that Prince Harry was going to be part of the team? I know you and I had some
fun and games talking about that earlier this year as well. Just give me a sense in how he has contributed over the past several months.
ROBICHAUX: Sure. Yes, well, he certainly has not hurt our growth. No, I'm kidding. He's been fantastic. You know, we were fortunate. We were doubling
and tripling year-over-year leading up into the pandemic in the years prior and we've continued to see that growth rate accelerate coming through the
pandemic and out of the pandemic.
Harry has just been, you know, fantastic to work with. His portfolio is really focused on our global impact, philanthropic partnerships, and how we
can continue to change this global dialogue around mental health being broader than the removal of mental illness. But really, this focus on
mental fitness and a strengths based approach that you can actively cultivate and develop.
But as we talk about expanding to Europe, you know, it's coming off the backs of we saw tremendous inbound growth in the past 18 to 24 months. Our
European membership went up almost 200 percent during the pandemic. Our British membership went up over 200 percent.
We have over 40 European large enterprises that are headquartered in Europe, and we just crossed the proverbial $100 million dollar ARR - Annual
Recurring Revenue rate as a startup. And all of this, we've seen has really been precipitous growth in the past 24 months.
But we're looking ahead, Julia. We think we're starting a decade of hyper growth as companies are refactoring what work looks like in this post-
pandemic world. And as we see more and more public figures and thought leaders from Prince Harry to Simone Biles and Naomi Osaka be public about
that, it's okay to be not okay.
CHATTERLEY: Alexi, I just have to interrupt you because we've run out of time, but I agree with you, hopefully, as more people come forward and say,
hey, I'm challenged here, we'll focus on it more and we'll all be stronger for it.
Alexi, great to chat with you. Alexi Robichaux there, the cofounder and CEO of BetterUp.
Sorry to interrupt, but we've run out of time.
That's it for the show. Stay safe.
"Marketplace Europe" is up next. We'll see you tomorrow.
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