CEO Initiative 2022

Brian Moynihan, Chair of the Board and CEO, Bank of America
In conversation with: Alan Murray, FORTUNE


CEO Initiative 2022 - Developing A More Human-Centered Approach To Stakeholder Capitalism

Conferences

Human-Centered Approach To Stakeholder Capitalism


CEO Initiative 2022 - Developing A More Human-Centered Approach To Stakeholder Capitalism


Wemimo Abbey, Co-founder and Co-CEO Esusu
Laureen Meroueh, Founder and CEO, Hertha Metals; Breakthrough Energy Innovator Fellow 
Vivek Sharma, Chief Executive Officer, InStride
In conversation with: Alyson Shontell, Editor-in-Chief, FORTUNE; Co-chair, Fortune CEO Initiative

CEO Initiative 2022 - Creative Capitalism: Using Ingenuity To Make An Impact

Wemimo Abbey, Co-founder and Co-CEO Esusu
Laureen Meroueh, Founder and CEO, Hertha Metals
Vivek Sharma, Chief Executive Officer, InStride

Creative Capitalism: Using Ingenuity To Make An Impact

Wemimo Abbey, Co-founder and Co-CEO Esusu
Laureen Meroueh, Founder and CEO, Hertha Metals
Vivek Sharma, Chief Executive Officer, InStride
In conversation with: Alyson Shontell, Editor-in-Chief, FORTUNE; Co-chair, Fortune CEO Initiative

Wemimo Abbey, Co-founder and Co-CEO Esusu
Laureen Meroueh, Founder and CEO, Hertha Metals
Vivek Sharma, Chief Executive Officer, InStride
In conversation with: Alyson Shontell, EIC, FORTUNE

In our leadership roundtable discussions and mainstage conversations. We've been examining the themes and interlocking mechanisms that are helping create capitalism. 2.0, an essential driver of transformation across business sectors is innovations in this evening's program, we're going to hear from three business leaders about how innovation can catalyze and accelerate social impact. Please welcome to the C E O I stage Lauren merry way Ceo and founder of Hertha medals and breakthrough energy innovator fellow Vivek Sharma chief executive officer at in stride and joining us momentarily will be with me Mo Abbey co founder and co Ceo at Suzu joining the conversation is fortune editor in chief Allison Chantelle. All right, good evening everyone. Uh welcome to Fortune Ceo. I in our evening this we have incredible guests started the varying stages here with us who think that doing good is also good for doing business. And so um beck you started in stride a few years ago um, maybe could just open up with saying what your vision for inside is actually the walt Disney company to do this. You've been with corporate America for a long time. Why this vision by this company? So first of all, thanks for hosting us um in stride was launched with my basic belief that businesses have a social impact obligation as well. And around the time I was working at the walt Disney company, I was also the adjunct professor of data science at USC. So one thing I could see was look at corporations as a professor and universities as an executive and I found that, you know, it's hard to imagine two ecosystems that have moved to offer to each other than universities and corporations, but they don't work well at scale. And we looked around and we saw corporate America spend $28 billion on workforce education but not a single ceo C. H. R. O. Was happy. So we started in stride with like minded co founders, which is the TPG Rice fund and the Arizona State University with the goal of helping large organizations provide workforce education to their employees in a way that they also achieve business goals. And the central thesis here is by doing that they're achieving business and social impact and the manifestation of that is to think about learners and employees as the same thing. They are good fiduciaries, but also good citizens And they do well and do good. So we've been around for close to four years now. We serve over 42 large organizations about 20 Fortune 500 and I'm proud to say that as a result of a platform, the employees in our partners have avoided over $630 million of student debt. So that's what we do. Well done in a short time to just a few years Laurie and I want to jump to you, you're innovating in a very different space. You're in climate tech. This is actually your second climate tech startup and attracted the likes of Bill Gates as an investor. Um, you don't have a product yet because this kind of innovation takes time a few years out. So this is a long term play. Can you just tell everybody what you're doing in steel production, how that creates um CO two emissions and what you're doing to curb it. Yes, thank you and thank you all for the opportunity to be here. This is incredibly exciting to be in a room filled with the decision makers and the people with the power to have an impact that we're striving for. So at Hertha metals, we are d carbon izing iron and steel production at the core of what we do is driving impact. The global climate change worsens global inequities. And so if we can solve climate change, we can do our part and many don't know that steel is actually one of the biggest industrial emitters out their steel production. It results in more than 10% of global CO two emissions. And we're not getting rid of steel. Right? Steel is the backbone to modern industry, it's material we need that supports our infrastructure. Uh, so we're addressing this by being able to make our iron and steel thing we use every day everywhere, It will be the same product. But instead of using coal, which is how we make primary steel today, we use hydrogen and renewable electricity. So 95% less co two emissions than what we're used to and how have you found um raising money for a venture? That sounds game changing, but it's also takes time, a lot of effort. Um, I assume some tinkering, maybe some failures. Um, as long as success is to get to the product stage, not every investor would wait for that. Yes, it definitely takes patient capital. But our investors understand with high risk and long time periods come this enormous reward. Uh, and at Hertha metals, we truly believe that we have the game changing process to, to pay up that reward. So it takes a special kind of investor and you're seeing more of them in the climate tech space where this isn't a software uh, play right. This isn't a typical Silicon Valley startup. You need that 10 year plus. Uh, fund life and investors like Bill Gates who have founded breakthrough energy uh, understand that mindset and have proven it to be a successful mindset in how they invest as it has already resulted in returns, but patient capital needed. So this gets a little bit into the es de conversation in which that's become a little bit of a charged word. You told me I'm not allowed to ask you if woke, but here I am asking um, is it woke? Yeah, No. Yes, she's not work. So I'll go on record saying that the, the, I'll come back to the central thesis of why we started our company as also the principle behind how yes, she should be done. Well, see I run my company, I have a board, I have an obligation to my shareholders. I'm on a public board. I'm also in a private board. I expect the ceos to deliver on shareholder returns. The whole idea behind you know, in stride and the right way to do E. S. G. Is to recognize that this is not our this is ad you can achieve all that you are charged to do by your shareholders in a way that you also deliver on E. S. G. Right? So I'll give you a few examples from some of the customers we serve. We have retail customers who are really struggling with attrition in retail industry. A good year is when you have a tradition of 30% a bad year is 50%. Now, what would happen if you did not take that attrition as a given, you said, I will invest in your career aspirations, your re skilling your up, skilling and as a result of my investment in your career, I build an equity with you that you want to stay with the company longer. It helps the employee, it helps the learner as well. Um, so the right way to do it is to think about, as I said business and E. S. G. Goals not in contradiction with each other. It's when you think about this in the context of our, that's when you get the phrases like the one you said, but in and adding anything to and at the end of the company mission is really hard to do. Doing one thing. Well, it's hard enough been doing too. Is that really reasonable to expect executives? Actually, that's what C E O S do. We manage short term and long term goals. We serve the interests of customers, employees and shareholders. We we do a lot of ants across geography across different time frames. What this is saying is it is not as simple as picking up an E. S. G. Goal, figuring out KPI s and not linking with your business priorities once you do them. Well, this is just one more and you have to work with, but we have V. S. C E. O. S. I hope all CeoS will agree here have done that forever. And how do you both align um, your employees, your boards, um, your executive team with all the right KPI Well, the starting point for that if done the right way is you have to clearly articulate the purpose of the organization. So when I started in stride, uh, we were in a ford f, we work, I was all by myself, which was a bit of a transition from running a multi billion dollar business at Disney. And so the first thing I did was I wrote what I call as the founders memo and we said, what's the purpose? What's the vision? What are our values and what is it that I can articulate to customers to shareholders, investors to our partners in a way that it makes sense to them. I think that that definition is important. Uh and and every time I go to my customers, I recruit a new employee. I tell them very clearly, look, we are in stride is about helping organizations drive life changing benefits to their employees in a way that it also benefits the organization. I have not had anybody had any problem with that. And Lori and how about you? I would agree with what said, you definitely should be starting with the mission. What is the mission of your company and what do you do? And note that it's not too late for you to change your mission, right? You might be an established company and you're saying well for so long we've advertised ourselves in this way, times are changing and if you're successful, you should change with the times correct, Which means your mission should also transform accordingly. Uh and we also, um thankfully a lot of people believe in the same thing. We believe it hurt the metals, which is, you can drive profitability while also creating a better planet uh and securing the longevity of humanity, right? Um, so mission alignment and I believe that it doesn't need to be uh either profitability and some of our shareholders being um appeased versus the other of us doing what we want to do in terms of our impact, but there is alignment and you just need to really be thoughtful and considerate in thinking about how to align uh your stakeholders towards one vision and value and in fact you're a tech investor yourself um you sit on boards, you've obviously been a Disney um how are you seeing large companies um succeed in their E. S. G. Initiatives in doing good is also being good for business well. Uh So in addition to that, I also teach a course at USC called the Digital Foundation for Business Innovation. And I always tell my students that remember innovation in large organizations is idea meeting commercialization. You should not forget that and there's a little bit of that with PSG goals as well. Right, so once again I'm going to repeat my previous answer but basically it is figure out the purpose of the organization walk back from that and and design a mechanism in which we achieve both goals. Let's take a few examples. So imagine being in the conversation with the Ceo for health care system and articulating and a program to invest in their employees in a way that you can reduce their tradition of nurses. We, as a country are short of half a million nurses, every time a nurse leaves a leading healthcare system just to backfill cost is $60,000. Right, imagine you're in conversation with the financial services ceo or industrial ceo. All of them are worried about what it would mean when technology becomes the core of the business and the employees do not have basic digital literacy. So a conversation with them around upscaling the employees on basic digital literacy that gets frankly good resonance across the entire ecosystem. The challenges when we try to take the short path, when we don't do the hard consultative top down work and try to understand what business is trying to achieve and come up with KPI is that may or may not make sense. So it's basically working bachelor business goal and then designing the KPI and how do you get the employees to buy in The once again, it starts with an education like workplace education. A lot of companies offer that, but not everybody takes them up on it. Like how do you get them involved? So let's start with why it is not working in the way it is done today. So typically when corporate America spends $28 billion, why is it not successful? Well, the reason it's not successful is number one, it is not linked to the strategic goals. No two. As a result of that, there is not real support behind those programs, tuition reimbursement is more talked about than actually adopted. Less than 2% people adopted and those who adopt do not find this changes their career trajectory in a meaningful way. So what we try to do is to say, look number one, we will always position this investment in employee education with the goals of the organization. Two is we will provide education opportunities that drive real outcomes. The employees are not entrusted in enrollments. The employees are entrusted in changing their career trajectory outcomes are important. You have to really articulate how it will help. And in our case we also try to make sure that the platform, which in our case is a technology enabled platform, creates a seamless experience to the learners so that they don't have a problem. Um, welcome. We're so glad you're here. You're here depressed. Apologies. Been traveling since one PM today, but hopefully the dedication, we appreciate it. Now you're in sunny florida. Just relax and have some wine and ask you some questions. It's gonna be great. Um, so welcome. So for those of you who don't know a memo is the founder of a billion dollar startup called Isuzu. Um, he is trying to help correct the racial wealth gap here in this country And I was wondering if you could tell them a little bit about how you're doing that and also how your upbringing um led you to this mission. Absolutely. So it's just really stemmed from a personal experience. I grew up in the slums of Lagos Nigeria. I lost my father at the age of two and I was raised by my mother and to verify the sisters. One thing my mother fundamentally believed in was just the importance of education she afforded my school fees to one of the finest high schools in the land. And that's what led me to this magical place called America. I immigrated from 80 degree weather in Lagos to negative 22 degrees in Minnesota. It was, it was a really cast a building experience. And when I told my New York and L. A friends, I go deer huntin and ice fishing. Um, you know, they always confused. Um, but during that transition, something important happened, my mother and I did not have a credit score. We walked into one of the largest financial institutions to borrow money and were turned away and had to go borrow money from a predatory lender at over 400% interest rate. My mother upon my father's wedding ring. We borrowed money from church members and that's how we got started in the United States. So really inspired by that experience, We started Susan on three core premises no matter where you come from, the color of your skin and particularly your financial identity shouldn't determine where you end up in the wealthiest nation the world has ever seen And the way we make that up and it's really simple when you pay your mortgage today. That data is reflected in your credit profile when you pay your rent. Unfortunately it isn't reflected. So we are the plumbers that essentially created the technology that capture your rental payments data and reporting to the consumer rating agencies. We walk with 60% of the largest owners and operators of real estate in the United States, Uh, to capture this data across, you know, all 50 states in the Union. And what was seen is really simple. The biggest driver of wealth in this country, right is home ownership. And what we are doing now is helping people establish their credit score and then giving them access to other quality financial product. It's essentially unlock them getting a home one day, affordable credit card, the card notes to be able to go to a good school. Um, and you know, was a 30 person shop 18 months ago. Now, it's 200 people valued at a billion. And we're just getting started amazing. Um, and an incredible mission. Um, there's obviously a racial wealth gap in startups as well, which, you know, well, um, could you tell us, given that backdrop, how has your experience been scaling to this level and um, how would you see it changing? Is it getting better? Yeah. Just to level set on the statistic out there, less than 2% of capital go to black and minority and women founders for black women or women. That's .0002%. you know, we always talk about thinking outside the box, but the folks that get to play and manage capital are inside the box. If you're interested in solving the world's toughest challenges, we need to consider folks that outside, I'm an outsider, have nothing to lose. And I'm really, really incentivized to think about our folks from where I come from, I realize the true american potential and that's what I'm squarely focused on. So, you know, my own experience of capital, My co founder and I spoke to 326 investors have said, no, you know, I used to walk out Goldman Sachs Pricewaterhousecoopers. It was one of the cosponsors here. Um, and you know, before I left PWc done $32 billion in deal value. You know, m and a walking with the biggest institutions, but that resume and that pedigree didn't mean anything when I was raising capital. Um, and one of the funniest story was when we started a su su and we were, we just won a $20,000 contract, the first ever one. Um, my co founder, and because credit cards were maxed out at over $100,000. 1 of our favorite places was Dennis. So the idea was, you know, we couldn't afford a hotel room and we decided to go to a Dennis got the Grand Slam. Uh uh, it's that night. And unfortunately, um, you know, we're not perpetual motion machines, so we dozed off and we were kicked out of it, Dennis. Um, and I say that story, um, just make it very real that are sending from zero to a billion dollars isn't just this fad, right? It took a lot of hard work. And for those coming behind us, my job is to outperform um not with rhetoric, but the record um that when you invest in black and other minority founders, um your capital is going to be put to good use, but above all, change the narrative, which I think this forum is all about each and every one of you are here because I think your justice capitalist, you believe on the premise that you can do good and do well and there might know means mutually exclusive. And that's the narrative I want to tell. I'm sick and tired of the 2% of the .002%, I can care less about that. I want to create a narrative whereby when you invest in folks like me, you create $10,100 billion dollar firms and companies like there will be a force to reckon with while doing good and doing well alright. Um and that's where we will leave it. Thank you all for all the hard work you're doing and innovating in your field

Joe Manchin, U.S. Senator (D-WV) (joining remotely) 
In conversation with: Alan Murray, Fortune

CEO Initiative 2022 - Make-Or-Break Manchin: The Senator On Compromise, Climate And 50-50 Splits

Manchin: Senator On Compromise, Climate And 50-50 Splits


CEO Initiative 2022 - Make-Or-Break Manchin: The Senator On Compromise, Climate And 50-50 Splits


Michel Doukeris, Chief Executive Officer, AB InBev
Jim Fitterling, Chairman and CEO, Dow 
Stephanie Linnartz, President, Marriott International 
In conversation with: Matt Heimer, Executive Editor, Features, FORTUNE; Fortune Co-Chair, CEO Initiative

CEO Initiative 2022 - Climate: A Watershed Moment

Michel Doukeris, Chief Executive Officer, AB InBev
Jim Fitterling, Chairman and CEO, Dow 
Stephanie Linnartz, President, Marriott International

Michel Doukeris, Chief Executive Officer, AB InBev
Jim Fitterling, Chairman and CEO, Dow 
Stephanie Linnartz, President, Marriott International 
Matt Heimer, Executive Editor, FORTUNE

Katherine Gehl, Founder, Institute for Political Innovation
Kent Thiry, Former Chair and CEO, DaVita
In conversation with: Alan Murray, FORTUNE

CEO Initiative 2022 - Finding A Fix For Our Broken Politics

that was a pretty simple, straightforward message. Look, we spent a lot of time this morning talking about climate change. It's a highly complex problem uh in a perfect world. Maybe it would be better handled by functioning government, but we don't live in a perfect world as we just heard. And so businesses stepped into the fray. And it was really interesting to hear the three Ceos who were up here talk about the really measurable progress that they're uh making on this topic. Now, we're gonna turn we have turned to another problem that's equally complex our broken political system, uh fixing a dysfunctional political system that that empowers the extremes on both sides and disenfranchises uh most of the people who are in the center, a number of business leaders have said to me over the last couple of years, hey, you know, we're gonna work on climate. We don't want to have anything to do with politics. Keep me as far away from that mess as you can. And I understand that completely. But I guess the question for this next group is is that really a sustainable position? Can you really hold that position? I mean, a broken political system is probably as existential a problem for for business in the future, as a broken climate is uh and it's certainly no more complex to address uh than a broken climate. So, how do you fix it? I asked Senator Mansion that question. I don't think we, you know, more earmarks, I'm not sure would be the perfect answer, but that that was his answer, but we've got two people now joining us on stage who have been thinking about it, not just thinking about it, working on it and actually making some progress on it. So I really am excited about welcoming Catherine Bell and Kent theory to the stage. Please please join me. Thank you. So I don't think the senator solved the problem for us. I think earmarks is like saying that a black market is a substitute for a free market economy. Yeah, it didn't seem to be the perfect answer, but but you all have have both focused on this quite a lot, spent a lot of time on it. Catherine, you published an article in fortune, what was that? five years ago? Yeah. With my, with Michael Porter sort of analyzing the dysfunction of the system and comparing it to the problems of a duopoly. Over time, you've really focused on top five voting as maybe not the answer, but the most important answer. Why are you doing that? Well, first of all, thank you for publishing the first work on this in Fortune magazine. I think of it as the birthplace, uh, why I'm focused on final five voting. It really begins simply with what problem do we want to solve for? So there's a zillion problems in politics, Here's what I care about the ability of congress and state governments to solve problems in a sustainable way in the broad public interest, which is um, to say can they do what would need to be done to deal with the complex trade offs in our issues? Can they reach across the aisle, innovate, negotiate, make a deal and then vote yes on consensus legislation And those are all the things that nobody does today. So what I care about is enabling people to do their jobs, well, essentially think of it this way, one thing we wouldn't do as C. E. O. S. And that's what I was before I went into this political work is higher the best people we can and then say to them on day one, oh by the way, if you do your jobs really well in two years we're going to have to fire you. And that is what our existing election system says to all of our Congress people. And that is why we don't get the results and that's what we want to change. And so why does finally fix that final five changes it because right now, Because it makes all November votes matter. So we're all fond of saying elections matter our collective problems actually, that most elections don't matter at all on September 13 of this year. And this is according to research from United America, which can't co chairs 85% of seats in the US House were done over. We knew who they were because those were people who won Safe Republican seats in red districts or safe blue seats in blue, destroy All those winners were chosen and in the Senate, it's over 60% of winners who were chosen by the end of the primary. And the problem with that is not so much who got elected, but that it means that people who were elected in those primaries are working for the people who voted in the primary. And only 8% of the of eligible voters in this entire country participated in the blue and red primaries that picked 85% of our winners, only 8% of people. And this 8% of people on both sides is characterized you think they're totally different. They're the same and the wildly most wildly consequential way possible. They are characterized by negative partisanship. They hate the other party more than they even like their own their own party sides. And so because our representatives only work for this side or this side, they can't afford to engage with the other side because their bosses don't allow. And and Final Five forces them to can't you come at this also as the ceo uh you've you've you've had some significant successes. Uh tell us about what you think the path forward is. Well, first of all, I agree with Catherine. That Final Five is I think perhaps the nuclear weapon in the arsenal that literally if we could snap our fingers and have that system exists throughout America our democracy and the performance of our country would improve literally overnight. That's not available. But that snapping the finger and having it happen. So there's a number of other arrows in our quiver that are incredibly important things like open primaries 50 years ago just about everybody was an R. A. D. And so there were moderates in the D. And there are moderates in the R. Uh then what happened is more and more people were getting unhappy and left. Both parties which then skewed the parties even further to the left and the right. And so now in many states there are more independence than their R. D. S. R. R. S. And they're disenfranchised if they can't vote fully in a primary. The second is a cumulative effect of gerrymandering. A cancer on the body politic where now that 85% of safe seats, part of that is natural, organic self sorting. But more than half of it has to do with political manipulation in a way where we the citizens can fight back. And so in many states, about half the states in America there's ballot initiative processes, for example, we've successfully passed open primaries in some places. We've successfully done during batting reform in some places and we've succeeded in putting final five in some places. And so there are clear signs of progress but it only happens when people make it happen. Yeah, so this is an uphill battle. Why is if if it if you make it you make the argument so clear and simple that this is what we need to bring some sanity to our political process, what keeps it from happening. So let's talk about what needs to happen to get the sanity because it's far more in reach than we would assume. Five states with final five voting by 2025 would give us 10 senators freed from the tyranny of the party primary and some number of representatives depending on the state. Those 10 senators, still Democrats, still Republicans, still the same people elected on the existing system. But now answering to a majority of November voters instead of just this side and this side can form really the bench off of whom can come off of which can come the gang of six, the gang of eight, the gang of four to figure out that consensus way forward and buck the partisan stranglehold on stranglehold on governing because that's what their incentive to do. We don't need it in 50 states. And guess what? Five states by 2025 that's we have one state. We hopefully will get another one with Nevada on november eight. It's $100 million endeavor. We spent a billion dollars approximately on two Georgia Senate races last cycle. This is the best r. O I of any philanthropic or political investment out there today. Well, absolutely. This is a winnable fight and let me maybe for one second go off in the area, but what business can do, uh because there's a number of things we can do. And it's not at all clear that if business, if business does not engage, it's not at all clear that we're on the path to victory. I think we often underestimate our convening ability and our capabilities that can bring immeasurable value to some of these initiatives and political processes. Uh for example, in colorado where I'm from, we convene business convened all the days and the hours to work on legitimate non partisan gerrymandering reform. Uh we have the ability to bring people together and look at them and say, you know, we're here representing the middle of America that's been disenfranchised. And we want to see whether you care about more about your party or the country in this room as we start discussing this kind of reform. And then magic starts to happen over 12 weeks. Hundreds of hours of negotiating. There are times you would go into that room and you couldn't tell who was a D and who wasn't are at that point. And then the coalition was so impressive. With these are eyes business nonprofits that both parts of the state legislature passed the gerrymander reform unanimously never before happened in the history of America and would not have happened had the business community not taken the stand of saying, forget specific policy debates on immigration or tax or health care, we're about democracy, about a functional democracy and then in running these kind of campaigns we take for advantage. We forget how good we are facilitating we forget how good we are doing strategy and creating an operating plan and having a management process and having discipline and messaging discipline. We all do that every single day. You don't know how different that is until you step into one of these campaigns and see how lacking many of those skills are that we take for granted because we've been doing them in a competitive environment for 2030 years. So it's it's a situation where if business gets engaged, the probability that we preserve America's democracy in a fresh way, literally. But look here, here's the reason business leaders don't want to get engaged and they say it over and over again, is that an individual races? It looks like they're taking a partisan position and the extremes on the, on the republican side or advocate, you know, election deniers advocating issues on, on uh, social and human rights that many come can't live with. And on the right side, you have a group of people at the extremes who don't really believe in capitalism. Um, and so, you know, no sane businessperson wants to align themselves with one party or the other. So how do you advance this without looking in individual cases like you're taking sides? Well, so in this case, final five voting is uniquely, uh, I would say it's a uniter, which is to say that in Nevada, both parties are opposing final side voting. So it's already accomplished that. Yes. Uh, but here's the thing, people do think, oh, if you're talking about politics that somehow partisan it's divisive, we shouldn't touch that with business, but Kent shows what can be done. He's really the ideal model for this. Um, I don't know if anyone else has done what he's done from business perspective that the system is not partisan. Final Five voting is not a trojan horse for either party's advantage. In fact, in Nevada, we have funders of that Nevada initiative who are opposing each other in the candidate races in Nevada but are aligned on what the system should be to solve problems going forward. But that's great. But that's a little unusual right. Reform efforts tend to generate more support on the left and on the right. Yeah, this this this is true. And so we in the in the movement have to work very hard about there's about 250 do gooder democracy organizations in America right now, we sort of stopped counting and half of them have started in the last five years and 90% of them have an operating budget of a million and half for less. So it's a cottage industry fragmented undercapitalized hand to mouth. Uh, and and and we need to, we need to change that in order to be more coherent. There's a tremendous amount of, of donor capital willing to enter this this fight, but they don't know who actually get stuff done and who doesn't, uh, and it's, it's our job. It's coming on the mo, on the movement to separate. There's, there's donors, there's doers and there's dreamers. Uh, we need to make the donors more comfortable as to who are the doers that actually get these things done, uh, in the states, uh, and separate from the dreamers who have wonderful power point and are very aspirational but simply don't have the impact. And, and if I'm hearing you both right, the one thing you feel you need is money. Two things we need. Actually one thing more than money. And that is the convening power of business and the advocacy of business. How many of you have heard of final five voting? Probably, you know, none of. Okay, a couple of people. Okay, that's pretty good. Okay. But nobody knows this is a I'll go so far saying the key solution to our problems. Nobody's heard of it. So your your in the media, you're in front of your employees, you have a voice and to bring up this nonpartisan cross partisan systemic change. That's pro voter that re enfranchise is every one of your employees on the left and the right is totally one of the most important things so that it begins to be known. And then the second thing is the investment. It's $100 million, 100 companies, a million dollars each. This are these organizations that ken and I are a part of in these movements for final five voting. And the other thing Kent is talking about need the capital that it doesn't advance without the capital that, that uh, everyone wants to avoid ending up in the Disney dilemma where you're getting hammered by both sides and where your shareholders are angry that you get yourself in that mess, we all want to avoid that. The good news is that feasible? First of all, you can make it easy for your people to vote second, you can engage in education, fact based education on things like election, integrity importantly. However, you can also provide other loads of levels of support that don't involve all sorts of political risk, like helping your employees become poll workers and otherwise involved helping some of your having some of your technology people help county clerks upgrade their existing cyber practices, etcetera. So none of that is going to get you on the front page of the florida times with, with both Rs and Ds criticizing you. And then lastly working on these reform issues, these structural reform issues like gerrymandering and, and the rest that is literally a partisan neutral process. Uh, and it is possible to create that narrative that fits with that and makes a huge difference. Kathryn Kent, thank you so much for taking the time to be with us. Very, very

Lawrence H. Summers, Former U.S. Treasury Secretary (1999-2001); Charles W. Eliot University Professor and President Emeritus, Harvard University(joining remotely)
In conversation with: Alan Murray, FORTUNE 


CEO Initiative 2022 - Inflation Risks For America And The Global Economy

Lawrence H. Summers, Former U.S. Treasury Secretary (1999-2001) President Emeritus, Harvard University
Alan Murray, FORTUNE 


Inflation Risks For America And The Global Economy


CEO Initiative 2022 - Inflation Risks For America And The Global Economy


So last year when economic officials and pundits and some of the administration officials seemed to overuse this word transitory. Our next guest was the person who really sounded the alarm about the risk of runaway inflation. And of course he was right when joe Manchin worried that the inflation reduction act would contribute more to inflation, uh, this guest talked to joe Manchin and basically convinced him it wouldn't, I think he was right about that as well. Larry Summers has been very clear and and almost alone in some cases in arguing that there is a difference between the inflationary effects of government spending that just feeds consumption and government spending that, uh, that can stimulate investment, like climb the climate provisions of the inflation reduction, childcare, uh, things like that. He's probably the one economic policy commentator who has has gotten it right for the last few years, which is why we've invited him here today to speak with all of you couldn't be here in person. So we're gonna bring him in virtually to have that conversation. Thanks Larry. I know you're there somewhere great. How are you Very well and it is good to be good to good to be with you, my friend. Even better to be here in person. We're with the warm weather. So we're sorry. We do. We we don't have you here, but thanks for taking the time. Professor has obligations to his uh classes that even exceed his obligations to his friends for 40 years like you. Well, well, thank you. Well, we'll we'll take this deal and thanks for thanks for being with us. Look, my big question for you. Larry is, is, I mean, we saw the Fed yesterday move another 75 basis points. We have brian Moynihan on the stage last night saying when he looks at the data, he doesn't see any slowdown. And so so my big question for you is, What is it gonna take, how much to interest rates have to move? How much economic pain are we going to have to suffer in order to get inflation back down to 2%. Um, I alan agree with my friend brian that the economy is running fairly strong right now and stronger than I probably would have expected. I was struck by the number that came out on monday that the number of vacancies in the economy had popped back up suggesting that we were moving back to a labor short economy. There's nothing that I've ever seen in economic experience that suggests that inflation comes way down and we've now got inflation at seven. So it has to come pretty far down without there being some meaningful amount of restrictive policy. And then that restrictive policy also restricts growth and employment, uh, in the economy. So I yanked after a long period when the Fed was really not in the right place at all and almost had its head in the sand. Um, believing in a transitory theory. Chairman Powell's navigating it into the direction into the right broad area. The markets now expecting that the federal funds rate just got increased core will get up somewhere in the 5, 10, 5 and a quarter range by next april my guess would be that the inflation pressures are still going to be a little greater than people supposed from the labor shortage. And so my guess would be that interest rates will end up that funds rates will end up above that. I would not be amazed if they got to sex, but that's certainly not what I would be uh predicting. I think it's very hard to know what's going to happen to inflation and unemployment. Um my instinct is that in some ways it's easier to forecast the two of them together than to forecast one of them alone. If we are actually on a path that brings inflation back close to the 2% target, I think we're likely to have seen a meaningful increase in unemployment. Um But whether we will actually push the process as hard in terms of disinflation, I'm less certain. Yeah, norman Powell certainly been very, very clear about his intent, but he hasn't really been clear about his intent at the same time, that he's been recognizing the price of his intent In terms of higher unemployment. It's a little bit like if I said I was going to buy an apartment in New York, you'd believe me. But if I said I was only gonna pay $500,000 for it, then you'd wonder whether I was really going to uh do it. That's a bit how I feel about the Fed's forecasts that unemployment will never go above 4.5% and and you know we've we've uh you and I at least are old enough to have seen this movie before, are we better off as an economy to uh to take the hit now or uh to spread it out over time? You know if you don't if if it's a mild recession and it doesn't get the uh get inflation down as much as he needs uh needs to be. Can can you do that slowly over time rather than in a in a big hit all at once. There's lots of metaphors, you can have a you can have a battle of metaphors talking about pulling band AIDS off and stuff like that. But I think the more serious way to think about it is that I think the best point that the people who are far more dovish than I like Paul Krugman um make is that unlike in the 1970s we have not yet seen a big increase in five or 10 year inflation expectations. So right now there's still a sense that we're in the range of price stability and that this has some temporary element in it and that puts a lot of wind at the back of anybody trying to reduce inflation. But if we let this continue for too long, we will lose that advantage. And that's why I think it is likely that the total cost of containing the inflation will be lower if we act more rapidly rather than if we act less rapidly. And I think it's important to remember that core inflation right now, you know, on the last figure was seven to the nearest round number and that was more than the month, was more than a quarter and a quarter was more than a half, a year and a half year was more than the year. So it certainly wasn't coming down fast and after yesterday we've got interest rates at four. So it's not like we're stepping on the brake with unprecedented force or anything like that, or anywhere close to stepping on the brake with unprecedented uh force. So for now, I think the the risk of doing too little is greater than the risk of doing too late. And I think one other point out, and maybe you'll disagree with me on this because you've been covering this stuff for 4.5 decades. Um I can think of a variety of moments when in retrospect the Federal Reserve or some other Central bank should have raised rates more and been more disciplined about inflation. Everybody worries that the Fed is going to move to move too quickly that they're going to forget the lags and then we're going to get an economic downturn and it's certainly something that has to be balanced. But I'm not aware of a historical moment when that ever happens. And in general, I think it's better to worry about negative scenarios that have occurred before than negative scenarios that have not occurred before. That doesn't mean there isn't a risk and that doesn't mean that the Fed doesn't have to strike a balance. But to put the point another way, is anyone really thinking that we're gonna have such a bad recession That it's gonna push inflation below the 2% target? And if we're are serious about the 2% target, then why would we think that policy had been to contractionary if inflation is not falling below the 2% target? Now there's a set of arguments, I I understand them. I think i it wouldn't be my arguments that we should not have a 2% target, we should have a higher target for inflation, But gosh, when you've made it made the kind of mistakes the Federal Reserve has made over the last year and a half of not taking inflation seriously and pounded away your commitment to a target. This doesn't seem like the moment to abandon that target. There is a line of thinking and you've already alluded to it, a line of thinking that because expectations are not dug in the way they were when paul Volcker uh took over the Federal Reserve, that it's gonna be easier to deal with, for instance, one of the things, some people, I think with some economists at Goldman Sachs who argued we don't actually have to raise the unemployment rate to combat inflation. We just have to bring down the unfilled jobs rate, eliminate some of that competition. Uh for jobs is it possible we can get out of this with uh with less pain than you seem to be suggesting. Here's a here's a piece of advice for all your viewers. Any any economist who says that something is impossible where they're sure that something will not happen is an economist whose opinions you should dismiss. So I answer all questions of the form. Is it possible by saying yes If you ask me. Um however uh is it likely. Um and you make that comparison with volker? I would make two points. The first is that Volcker's disinflation pushed the unemployment rate to 10.8% and nobody not the fiercest talk anywhere on the planet thinks we should elevate unemployment Halfway to 10.8% from where we are. Now. The second is this seductive idea and I think it is seductive that we can just get rid of the vacancies and not have any increase in our employment. Here's the fact right now the excess of vacancies over their normal level is about twice as large as it normally is in periods of strong economic performance. So the number of vacancies we might have to eliminate is kind of two x. There have been nine previous instances since World War Two when vacancies came down significantly. In every one of them unemployment went up substantially. So maybe it will turn out that this one is different. And you can argue that their special features of the post covid economy, you can argue that precisely because vacancies are so high this time is different. But in general if you have to bet with nine previous experiences or bet with no previous experiences and optimism, I think the better bet is with nine previous uh experience experiences. But again, anything is possible, frankly. The argument you're making looked better to a lot of people including me four days, five days ago before they got the most recent vacancies data because there had been a big decline in vacancies last month without any increase in unemployment. But now a quarter or a third of that of that decline got revised away and about half of that decline got reversed. And so you're seeing it, you're seeing it much less right now. But look, you don't leave a lot of room for argument. Larry anything is possible. You don't leave a lot of room for argument. I I'm gonna have a lot to a lot to talk to you about. But I also want if anyone in the in the group here has has a question just stick your hand up and we'll get a microphone to you. Uh Look you were according to the reports I read in large part responsible for convincing joe Manchin who's gonna be with us in just a few minutes, convincing joe Manchin to switch his position on the poorly named inflation reduction Act uh to uh to support it rather than oppose it. Um Can you share? And it's a really important argument I think for people thinking about the effects of of government spending, Can you share the argument you made? I don't know. I don't get into my private political conversations and I never take credit or blame for the political decisions than anyone. I've given advice to. Those are their decisions. What I will do, Alan is say what I thought about the inflation reduction act. In contrast to what happened before. There were three differences between the inflation reduction Act And the rescue act that took place at the beginning of 2021. 1st, the inflation reduction act was $600 billion 10 years, whereas the rescue act was plus the earlier stimulus was $2.8 trillion dollars over one year. So there was a total difference in scale. Second, the reduction Act was paid for fully by tax increases and other revenue increasing, so there was net no net change in the demand balance. And third, substantial parts of the reduction act were measures that would increase the economy's supply potential over over time, not simply pump up the level of demand. So factor of 10 difference in scale paid for versus not paid for expanded uh increased capacity versus just increased consumption spending? Those were the reasons why? I thought they were very different. It's that third, it's an inflationary impact. Yeah, it's that third one that's kind of unique. And you laid this out before this administration even came in that if you're investing, if its investment in uh the energy transformation or maybe also in something like child care or training, that has a fundamentally different effect on inflation. Do you feel like you've made progress with that argument? Making some progress? Look, it's it's the same basic logic for the government as it is if you're advising your kids, if your kids want to borrow money to go to go educate themselves or they want to buy borrow money to buy the house of their dreams they're gonna live in for 30 years. That's probably a very reasonable idea, particularly if interest rates are low and they're locking in a low rate if your kids want to borrow because they didn't earn as much money as they have liked to and they still want to eat out a lot and take a lot of vacations. That's probably much less sound borrowing. And some parallel principle applies with respect to uh the government. Yes. And I think I think that is becoming better understood. Um So, so uh Larry this, I know you are still in close contact with people in this administration, the administration is from time to time, uh, blamed inflation on corporate concentration or corporate profiteering. What do you think of those two arguments? I don't think that those are the administration's soundest economic pronouncements. Um, look, I think there are a number of areas where we should have stronger antitrust enforcement, but I don't think inflation has anything much to do with uh, gouging or monopoly power. And I think some of the doctrines that have been put forth by the so called neo Grand icings, um, are really very radical and very unfortunate and are the wrong places to go. Look, I think there are issues that democrats are right to have with business. Uh, there's some stuff with corporate tax shelters that have carried interest tax break, a variety of things that I think are kind of outrageous, but I think some of the regulatory kinds of agendas that treat profit as a bad thing, treat uh, business as a money pot, uh, failed partner. I don't think that's the right approach uh, for people to take in terms of uh, getting things, getting things done. I like approaches based wherever possible on partnership much better. And I think there's some real potential in uh, the green area in particular to do that. I think the chips act is gonna be a very important test of how well as a society we can do in having government business partnerships on some really important issues. I'm glad you raised the chips act because the last time you were on a Fortune stage conference stage Was in in the fall of 2018 in Toronto at the Fortune Global Forum. And I remember how you ended that conversation, you you said the most, the most consequential uh, thing to watch for economics and the world over the coming decade was the relationship between the us and Japan. Uh, that was five years ago. I'm sorry. I misspoke china china. Yeah, yeah, I misspoke apologies. I'm still waking up U. S. And china. It was china. My my totally misspoke uh, five years have passed. What and a lot has happened in the US china relationship over those five years. Uh, what do you see now, by the way, I think you're going to make a habit of remembering what I say at fortune. Oh yeah, throwing it back in my face five years later. I mean you get a lot more fortunate. Uh, But in this case, um, I'm Glad I said that because I think it was right. I would say relative to what I would have expected, then we're in about the 15th or 10th or 15th%ile of outcomes. I think on the, on the bad side, because I would say the relationship has massively deteriorated on both sides. I think primary responsibility for that uh, rests with uh, xi Jinping and a variety of excessively assertive, aggressive nationalist discriminatory totalitarian policies that china has followed. But I don't think the United States has yet in place a sound strategy beyond pointing up its legitimate indignation but warranted indignation does not constitute a strategy. And I am very concerned that the situation has more and more overtones of Britain and Germany As one moves from 1910, towards uh 1914. Some of it is uh, geopolitical and the difficulty in maintaining the peace through ambiguity approach that has been that has been successful in Taiwan for 50 years. Some of it has to do with the question of rules governing trade. The most undercovered story of the last three months and maybe of the last three years has been the extent to which the american uh government launched a kind of economic warfare on china with the semiconductor uh, restrictions that were announced several weeks ago. Now, I don't have access to the classified information that would permit me to judge whether those steps were uh, necessary uh or not. But I do think they're framing um, was very much one in terms of a kind of economic warfare and holding the china down rather than limiting access just to key military technology. And I think that has to strengthen the hawks uh, in china. And so I hope when President biden and Premier G meet in bali, it can be a basis for not getting this to affection, God knows, not getting this to partnership. Uh, God knows, but of stabilizing it because I think we are, we in china are like two guys each of whom holding or in a lifeboat, a small lifeboat in a turbulent sea, a long way from shore. We depend on each other. Um, even however we may feel about each other. There's no alternative to finding a way of functioning together. Uh, Larry, on that encouraging note. I will let you get back to your teaching, but, but thanks for taking some time to speak with this group. But we really thank you. Thank you for having me. Thank you for having me.

Nick Clegg, President, Global Affairs, Meta (joining remotely) 
In conversation with: Alyson Shontell, FORTUNE


CEO Initiative 2022 - Meta’s Reality: An Inside Look At The Metaverse, Moderation And Regulation

Meta’s Reality: An Inside Look At The Metaverse


CEO Initiative 2022 - Meta’s Reality: An Inside Look At The Metaverse, Moderation And Regulation


Michael Chertoff, Former U.S. Homeland Security secretary (2005-2009); Executive Chairman and Co-founder, The Chertoff Group
In conversation with: Matt Heimer, FORTUNE

CEO Initiative 2022 - Resiliency In A Time Of Risk

Michael Chertoff, Former U.S. Homeland Security secretary; Executive Chairman and Co-founder, The Chertoff Group
In conversation with: Matt Heimer, FORTUNE

Michael Tubbs, Founder, End Poverty in California (EPIC) (joining remotely) 
In conversation with: Ruth Umoh, FORTUNE


CEO Initiative 2022 - Economic Mobility In America: How Business Can Help

Economic Mobility In America: How Business Can Help


CEO Initiative 2022 - Economic Mobility In America: How Business Can Help


Marc D’Amelio, Chief Executive Officer, D'Amelio Brands
In conversation with: Alyson Shontell, Editor-in-Chief, FORTUNE; Co-chair, Fortune CEO Initiative

CEO Initiative 2022 - The Creator Economy Playbook: How To Build A Brand (And A Fortune)

The Creator Economy Playbook: How To Build A Brand


CEO Initiative 2022 - The Creator Economy Playbook: How To Build A Brand (And A Fortune)


when your family includes two of the biggest influencers on Tiktok, why settle for endorsing brands when you can start and sell your own. That's what the family of Dixie and charli, D'Amelio have done. The two tick talkers pulled in nearly $30 million last year and their father, Mark heads up the newly founded D'Amelio brands. The family plans to develop and launch their own fashion, beauty and lifestyle lines. Mark joins us to share his insights from the top of the creator economy with our ceo audience will delve into value proposition of top tier social celebrities and surface the opportunities and risks of building brand equity on social platforms. Please welcome Marc D'Amelio, chief executive officer of the Emilio brand in conversation with fortune editor in chief. Alison Chantelle. Alright, you guys, these conversations have been heavy, It's been a long two days. We are here to lighten the mood. We've got some Tiktok stars, the monetization strategies you all can tap into with the mastermind behind it all, Mark, um, Mark, thank you for being here with us today. Thanks for having me. Yeah. So for those of you who are not on Tiktok, um, I can tell you for and just joined Tiktok were 92 years old, cut us a break. Um, but your daughters have been on it and they have been very successful. Dixie is 21 charlie is 18. Um, as a family, you all generated an estimated $70 million over the last two years and charlie has 100 and 45 million followers on Tiktok? I have that. Right. So when did you first realize that your kids were not normal teenagers on social media very late? I thought they were very normal and they were very normal. We're just living in the suburbs in Connecticut and Charlie. In the summer of 2019, she was just posting some videos on an app called Tiktok and I kind of heard in the background and next thing you know, she had 100,000 followers and 500,000 followers and then we went out to L. A. And it's been a wild ride since then. Did your wife and you just like your ears perk up one day and be like, wait a minute, how many followers do you have? Like what, what's happening? Can we get a peek? I didn't know. Uh, I didn't know it was as big as it was just because there were other, there were other apps like vine came and then went. So I was like, it was so new that and I didn't even realize it was real at first. And then I started asking around and, and, and started to talk with people who were in social media and said, is this anything yet? And I got mixed, I get mixed Mixed answers. Some people said there's people that have millions of followers and can't move the needle selling products and there's people that have 50,000 followers and do really well. So, and so this isn't what you anticipated. I mean from what I understand you and your wife actually tried to not give them phones for a long time and not have them on social media. So what happened? No, we were we were we were we did we we, I think we got them phones and and computers pretty pretty uh early on. I was always uh I always believed like my mom always gave me a lot of freedom and with that I didn't abuse it. So I I looked at it if you if you you got to monitor it, but I gave them T Apple computers, phones, whatever. They were always pretty good with it. You guys make the decision to move to L. A. It's a family joint decision. You're like, let's give this a shot. Fame can be fleeting. Tiktok could be fleeting. We don't know. Let's go, let's go all in right now. Um you move to L. A. And then how do you start figuring out this monetization? Um Playbook for something that's so brand new. Yeah. I think one thing I've learned in business and I learned it as when I started my own clothing brand is I tried to do everything. I try to be a designer, tried to be an accountant and and I learned pretty easy pretty quickly like to get surround yourself with professionals. And I saw the red about the horror stories of parents involved in their kid's Hollywood careers and I certainly didn't want to be the person that got in the middle of that. So we hired, first was an attorney, then a business manager, then managers then, uh then we got signed with Uta as an as an agency and Uta was interesting because they weren't just looking at charlie, they were looking at all all by that time from october of 19 to january of 20 when we signed with UTA, we were all on social media, tiktok and they looked at us as a whole package and they and they signed us, my wife myself, my older daughter Dixie and charli all together. So just so everybody understands sort of how the business works. So dixie estimated to have made about 10 million last year charlie, 17.5 million. Um they were paid an estimated $200,000 per eight minutes Snapchat Snapchat episode of charlie versus Dixie um brands like amazon and Duncan pay up to $250,000 just for them to post about it. Um so that's, that's a lot. Uh and they're one of the first episodes of your Hulu show um you're presented with binders of things for all the kids to do from different platforms to different platforms to different platform and your wife stops and says like where's the time for them to be kids. So how have you balanced that in with all their business initiatives. Is that even possible? Yeah, that's extremely difficult because you're dealing with as a, as a parent, I understand that this opportunity could be short lived, I mean, um of age that I've seen, 50 charli d'Amelio, 100 charli d'Amelio before my daughter and there's probably more than that and I knew there's a, there's a very potentially short window of opportunity. So we want to go after that, but then we also want to Protect them and make sure that their mental health is fine. So I battle with that all the time. I battle with my dealing with with at the time, a 15 year old young lady who just doesn't want to get out of bed or is it, is it bigger? And I have to protect them from all the vultures and the people circling around in Hollywood and also protect them from themselves sometimes where they might not want to do something that we think is probably a great opportunity. Yeah. God, that's parenting snafu. Yeah. Well, um well there's a lot to dig into their, but um before we kind of go in that direction, I just wanted to ask you a little bit more about the playbook, um we have a lot of c suite in this room, how do you best, what's a great example of a partnership gone right with your daughters? How do you pick and choose opportunities? How do you know when they're gonna be great brand alignment? Yeah, I mean, I think first it starts off the one thing that, that we had the luxury of and the privilege of is we weren't desperate for this opportunity, it kind of came to us and with that when you, when you pick deals from a position of strength that always makes it easier. So it was basically our, our agent was just saying what charlie, what do you like? And she said I eat Taki, The next thing, they should have a talk deal and she was, she and Dixie used to drive to school together in Connecticut and they would go and get some donuts coffee every morning and those are some deals that we just willed into existence just because she really liked like the, like the brand, my husband and I also Dr. Duncan, but we don't get paid 250 k to do it. Maybe we're doing something wrong, I don't know. Um so you have a lot of ventures going on, you're taking a piece of the pie and a lot of cases um these are joint ventures, so like there's a Hollister clothing line called social Dreamer um when does this kind of teaming up with a brand in an influencer works best and what have you learned from kind of that joint partnership and joint venture? Yeah, I mean I think it works, that's that, I think it works for a lot of companies depending on who the influence for most companies, depending on who the influencer is, it's worked great. I mean we know that for Dunkin donuts, they sold out of cold brew nationwide. We know for um from, from a campaign she actually had had a drink that charlie named after her and we were hearing throughout the country that cold brew coffee was sold out because it was in that. So that was interesting. Invisalign is a publicly held company I think in 2000 ceo came out and said mentioned charlie is changing the market cap of uh of a huge company so it works and uh But it started, we just gradually did it, it started off as someone asking her to do a $50 uh post for a music uh for a song sound and then it just kept getting bigger and bigger and bigger to where we are now. Now you also have launched a new company called Emilio brands and I would normally be suspect because it's pre launch pre employee and has $100 million valuation um the sign of normally a disaster in Silicon Valley. However, um it seems like the money was easy to come by. What's your plan? Um what are you gonna build there? So I think I've kind of looked at at this into different buckets, I still think we should do endorsement deals with Fortune 500 companies or brands that we can help elevate them where they can help elevate us amazon is a perfect example um Duncan has also been great charlie and I just did a deal with with ford that that should be launching in the next few weeks. So those are, we're still going to continue to do those things and then we, as we did other deals, we found that there is an opportunity for us to actually start something from the, from the ground up and I have experienced with that. I started my own, you know, my own clothing brand when my wife and I first got married, um I've been very entrepreneurial and I've been involved in all types of different brands so, and, and we've learned that both of my daughters, although they're extremely polite and on set, they kind of listen to all the people around, they do know how to market to their generation and, and so I have, I have everything now, we have everything now that they didn't have when I started my clothing company, when I started my clothing, government had great ideas, great designs, I just didn't have the ability to get to the, get to the public and there was that retail barrier also that people don't talk about, you had to go if you wanted to sell the Macy's or Bloomingdale's, you had to compete with ralph Lauren and all these big companies now we can just, we have the consumer base that and we nurture them, we know how to to communicate with them. So I think we have a great opportunity to start two or three brands under this D'Amelio brands umbrella and do some something pretty cool. Is this sort of like, I mean look, the Kardashians have done this famously to extreme wealth. You have kylie cosmetics, um all the millions of brands that I do. Are you taking a chapter out of that playbook? Yeah, I think, I think whether it's Jessica, Alba Reese Witherspoon, I think they've all shown that they can create brands and, and be successful and, and I think we're probably the first ones to do it pre anything. But what's cool is we own, you know, we, I think we sold 6% we raised $6 million on $100 million valuation. We could have raised, we could have raised at a higher valuation valuation and we could have raised more money if we wanted to. But but it was more for me, it was more like shark tank. I wanted to get these incredible investors with us. Like Michael Rubin invested um Jon Feltheimer from invested, eddy cue from apple invested. We have pretty, pretty wild roster of people invested in the company. And what is the secret you think to marketing to gen Z your daughters are obviously fantastic at it. But what's the secret, I will tell you 100% nowadays its authenticity. I think, I think back 10 years ago it was more trying to stage things and trying to make things look, I think I tell this story all the time and I'm sure people haven't heard it? But as a brand guy when my daughter charlie first started doing Tiktok, what was cool about Tiktok? And I think what was why it blew up so quickly is because it was so personal. Most kids were in their bedrooms or in their bathrooms, taking videos. And as a brand guy, I would think like your room would have to be spotless and I would say, I can't, I can't believe what I'm looking at. Your bed's not made, there's clothes everywhere. And she was just like, that's what the, that's what everybody wants. So I think there is something to be said for the authenticity. And I also see it when people see dixie and charli or, or us on the street, they have this attachment to us because it's so personal. They hold us in their hands and they're watching these things and they know our dogs, they know our what our house looks like. It's just, it's pretty wild. So to answer your question in a long winded way, authenticity is number one. And um, I'm gonna open it up to questions in a little bit to be thinking, um, allowed to ask anything. Um, but I had a question about just the creator economy in general. Um, there has been the number one job, um, that teenagers these days wants, they want to become an influencer, like charlie or dixie? How long do you think that's actually sustainable? Do you think there's gonna be consolidation of the industry? Um yeah, I mean, I mean, I think it is sustainable. I think, I think all the platforms seem to be kind of trying to figure things out, but I think it's incredible. I think it's, it's amazing that you, anyone could actually just pick up a phone and, and, and if they're authentic, start to build a following and I think it's here to stay um any questions from the audience yet? Yes. one here in the front. How do you not compromise authenticity when you're selling to ford and selling for amazon and selling for Duncan and selling for whomever else can rustle up the money? Yeah, I mean that's, that's a, that's a great question. We, we think less is more so, I mean we've had a ton of opportunity for all the things that we say yes to for everyone, we probably say no to 10. So, and, and we, we've, I've done a lot of work in the behind the scenes like Hollywood is a very strange place and, and they will chew you up and spit you out and it seems like it's easy for kids to get in there, hamster wheel of just deal after deal after deal and we've put a premium on, after learning, put a premium on making sure that we're not oversaturated, that the deals that we do or things that we, companies that we like, companies that we believe in and we believe less is less is more and you know, and I go out to our team and tell them that I would much rather do a deal that I'd rather do less um than, than more and, and I want my kids and our whole family to have a whole full life. And so it's just, it's a balance and not compromising and, you know, your values and just making sure that, that we're just looking at things the right the right way question up here in the front too high. Uh, this is really interesting mary Pat Kessler from the Project Management Institute. Um I find this really interesting and personal, my niece is also a Tiktok er and probably knows your family, Katy feeney. So, um, and I know that it's led to a lot of opportunity, but I'm wondering from your perspective, what what will you do when your kids don't want to do it? You know, that's another really good question. We talked about that all the time. I mean, this is a vehicle, obviously it's a vehicle to create um, you know, for income and wealth and all that stuff, but really it's more about creating opportunity for my kids to figure out what they want to do. You know, I don't, I don't foresee them being tiktokers for, you know, for, for the next decade, I think this is a, is a way to build and I say this to everybody. I say whether you're a doctor lawyer, um I think building your platform and being able to express yourself on social media just gives you a lot of, a lot of opportunities. But I'm constantly telling my daughters like, you know, where, where do you see yourself down down the road and if we have a show on hulu and one of the things that charlie did was kind of come, she when she had an opportunity to do anything, she let the noise and everything kind of break her a little bit and she even stopped what she was an incredible dancer. She stopped dancing and she came to me and said, dad, I think I'm letting you know all this, get to me, what, what do I, what do I do? I said, do whatever you want to do, what would you like to do if you want to try singing, you want to do dancing, you want to try acting. And this opportunity gave her those options. She just released a song she's on, has been on dancing with the stars when she and my wife are on dancing with the stars right now. So for me it's all about understanding that this isn't gonna last forever and take advantage of the opportunity and making sure that they could do, find out what makes them happy going forward. So mark, you touched on this a little bit earlier, but when your family is the business, it puts a lot of pressure on everybody. Another thing I was struck by just watching the first episode of your hulu, um is, you know, in the end of the first episode, Dixie essentially has an anxiety attack, there's the bullying she did a vogue um and she got such um negative feedback if you can even call it that on social media, she really broke down as a parent. Like how do you balance like ways? Like, is this opportunity worth it? Like, and also, then how do you think the platform should do a better job combating that? So, first of all, I I look at it like, uh as parents, the noise around us, as these people are, you know, charlie's the golden goose and like we were, I can't stress enough how normal and how great our life was prior to this. We're living in the suburbs of Connecticut. Both kids are in high school, my wife and I are going out on dates on friday and saturday night hanging with friends and covid happens. We go to California and be careful what you wish for because it's been it's been a wild ride. But we constantly have these meetings of us for and we say, are we, are we happier today than we were in our little town in Connecticut and, and the story is not fully written yet. Um it's tough, you know, but I do think it's similar to if, when you have a boy or girl athlete that's incredible and and their, you know, their star pitcher or star whatever and, and it's a parent's responsibility not to push, but to kind of help them figure out this opportunity and not to waste this opportunity. And that's what Heidi and I deal with all the time. Well, thank you so much for being here with us, Mark, maybe you can find them after you've got more questions that we really appreciate it and good luck. Thank you so much. I appreciate that. Thank you.

CEO Initiative 2022

CEO Initiative 2022 - Developing A More Human-Centered Approach To Stakeholder Capitalism

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