Transcripts For BLOOMBERG Taking Stock With Pimm Fox 20140328

We have some headlines from su keenan. Just received a cut from standard poors. The rating was dropped to the sixth highest Investment Grade level. And the lobbying association has reached an agreement. Less thanent comes two weeks after new jerseys governor barred tesla from selling cars directly to consumers. Port Authority Chairman resigned commission to probe late changes at the washington bridge. Hiss christie said resignation is effective immediately. Those are the top headlines. We begin this hour with the story pitting a state against show business. Of cards are house lobbying maryland for millions of dollars in tax credits. Some lawmakers are drawing a hard line. Theyd say the state will seize the Production Companies property if the series stops filming their. There. From washington, we have delegates of montgomery county. He is a sponsor of the imminent domain measure. Nice to have you here. Explain this measure that you put out against the folks that make house of cards. Maybe we should start with a little bit of a back story. They have filmed seasons one and two in maryland and it has been a great partnership. 27 Million Dollars combined for seasons one and two and we have been promised another 4 million for season three. In connections with negotiations , the Production Company said the governor a letter that we thought went too far. It threatened to pack up, break down the sets, the stages, and move if we did not meet their demands. It is not everyday you get threatened by frank underwood. We felt like it deserved a strong response. You are giving them tax credits to begin with and they want more. You guys are saying, enough is enough. We hope they will be back for season three and i expect the negotiation to move forward. ,ith such a hardline response we thought it deserved and underwoodstyle response. We propose the most frankmike option, which was threatening to use imminent domain powers. Intellectual property as well. Edmonton will go to Conference Committee and will reach a number with them that will keep the production in maryland. , the actor who is the star, who has been lobbying you guys as well. There are other states that offer lots of tax benefits and they could move elsewhere. You guys benefit by having them there. It does create jobs. There is a trickledown effect. Andhat is absolutely true we hope they will be back and we are not asking them to come back for free. The program is authorized for seven point 5 million in the next fiscal budget. At some point the state has to be willing to not negotiate too far. Money, these are taxpayer dollars and we need to be prudent stewards of their dollars. Are you just having fun, art imitating life . Do you think this will hold any water . Legally, it could i do not expect that to be in the law at the end of the day. It is not every day you get to have a backandforth threat with a character like frank underwood. We went with the most dramatic response and ultimately, we will be working in good faith to do what is in the best interest of the taxpayers. One of my favorite things when there is a dispute between two parties, the Public Statements that we get. We dig at a Public Statement from the Production Company and it says we have had wonderful experience filming the past two seasons in the state of maryland and love shooting there. It is going to be more cost efficient if they do not have to pack everything and move elsewhere. How do you expect this to play out . Will play out with season three shooting in maryland and hopefully season 4 and season five. Any wont give you spoilers. You guys do not want to lose them, right . This is income for your state. These are real jobs at the same time, these are taxpayer dollars and we are in a tight budget situation. We need to be prudent and responsible and we need to make sure we are not just throwing money at things because it is hollywood. We need to be doing things for the right reasons. How far will you take this . You are putting out a legal position with imminent domain and saying he will take their equipment. How far will you take this . We have put that language in the budget. I think it is likely we will be able to move forward with a negotiated process and we will not actually have to use the most powerful tool, the most dramatic tools. It is something that nobody wants to use, those weapons of last resort. Were you uncomfortable having to go to that position . Not uncomfortable. Given the letter that sent us that seems almost gangsterlike in its overtone, i was comfortable using strongly worded responses. Hopefully, at the end of the day, they will see it is in their interest. They have already received 27 million. We have great crews and great sets. It would cause a delay if they had to move on. I think they will find a way to stay here in maryland. You feel like this is exactly what Kevin Spaceys character would do . As a washington manipulative powerbroker . That is frank underwood, always looks for leverage. This is a way to grab that leverage. After we put the amendment on the budget companion bill, i realized there was a scene in which frank advocated seizing some power plants. It really did have some parallels. Do you think there is a middle ground that you guys will come to terms with . Absolutely, and we hope we do. Coming up, we will be speaking with the chief executive officer of one Company Looking to get every College Class online. This is taking stock. The online Educational Services Company Started trading on the nasdaq, closing up over six percent. He companys cofounders talk to us. How does it work . We partner with top colleges and universities. Great schools like berkeley, georgetown, usc part. Ine is the key our approach is quite different. Frontstudent is in the row. Live instruction with small class sizes. Online nt from one of the Biggest Challenges is the preconceived notions of Online Learning are pretty bad. In the case of these programs, students are front and center. We like to think of it as no bad. Ow no back row every student is front and center with that professor. What kind of responses are you getting . From institutions around the country, it has been incredible. Ago,we started six years there was concern about whether you could create an online experience that could rival door surpassed and on campus experience. We have seen a growing acceptance of online as a medium for highquality academic experience. This is a cloudbased system . For the student and the administrator and professor and we bundle that with a series of services. You are giving students an opportunity to be equal to the campus. Could youd 2u get the will of a Great Institution to make students equal to the campus students . Same degrees. What is the cost . We believe same quality, same professors, same outcomes. Therefore, same cost. The same rights and responsibilities that you would have as a campus student. We help our the solution, we are not the university. The students are becoming real members. They are immersed in the community. That is kind of crucial. Huge part of the experience and benefits of going to a great school is immersing yourself in that community. Students at the Online Program go to graduation and equal volumes as the campus program. How long have you guys been doing this . Six years. We have mostly graduate programs. Shorter programs. Do the first time ever, you not have to quit your job and pick up your life. Public to us about going. We have seen a flurry of Companies Going public. Did you guys feel pressure to do it at this juncture . People are concerned about what the fed is going to do. For us, going public is a pretty incredible day. You are exhausted, arent you . You have been up since when . I got about 2. 5 hours sleep last night. Today is the beginning. We have been doing it six years, but this is a long journey and we are in the second inning. Your background is education, right . Hook shot phonics, you ran that company. Hooked on phonics, you ran that company. The people in the Company Common everyday to change peoples lives and that some , buty that sounds pithy outcomes do matter. My team comes to work believing that. Today was a pretty big celebration about those outcomes. We have no ax to grind with any other companies. Done this way, it is exceptional. The quality is excellent. Much more akin to a campus program. The reality is, students really win in this approach. 10,000 students, talk to me about the schools you are in. Months, we next 12 will be in schools like berkeley, usc, berkeley. About entirely outcomes. Our goal is not pure growth for numbers. Where we focus is how can we create an online experience that rivals or surpasses an offline experience . That sounds great for your now publicly held company. Investors want to see returns. If you drive the right outcome for the students, Everything Else works out. That is what education is about. If you attended grade school in one of these programs attend a great school in one of these programs, you really do have the right outcome. This program, this might make sense and it may cost a little bit less, but it doesnt. What is pretty awesome is that for the first time ever, you do not have to quit your job and pick up your life and move to attended graduate school. Wer opportunity costs have students in our programs that are pretty incredible. You have a shell oil engineer that spent six months of his year on an oil rig in the middle of the gulf of mexico. You have a Disney Channel actress. These are people they cannot quit their job to go to grad school, but want the opportunity. Are there any accommodations made . Why shouldnt the Great American degree be more flexible . It should fit into your life and that is the way these work. The students take it seriously. Congratulations, i know it has been a busy day. I knew you were tired. Next, looking to get lastminute reservations to top restaurants and get vip treatment . Our next guest will show you how to do that. We do have some breaking news in the situation in ukraine. Vladimir putin has called president obama to talk about a diplomatic resolution to ukraine. We will have more from our washington euro in just a moment. Back to what was a very busy day for the ipo market. Shares surging more than 75 . Raising 24 million. The company says it will allow users to charge their wireless devices without being connected to any wires. Joining us to talk more about it is the ceo. Congratulations on your ipo. What is it that you guys are doing . We have a technology that allows the consumer to eliminate the tethering, allows the consumer and are to charge their mobile devices within a 30 foot radius of our transmitter while they are roaming in their living room or at their desk. I do not have to plug in my blackberry or my iphone. If you have a receiving device, as long as you are within the range of the transmitter, your devices charging. Is this on the market yet . We are just engaging with our Strategic Partners. We are a technology company. We will be licensing this technology to our partners. Unitas and capital to play with . You needed some capital to play with . Who are the Strategic Partners . But i can tell you one i can tell you. One is from south korea. Also do a lot of the mobile accessories for the named companies you are very familiar with. They bedded our technology and not only did they become our first strategic partner, they decided they wanted to invest a Million Dollars in the company. Everyonepectation that , the Big Tech Companies out ultimately this will be part of their platform . We are building an entire ecosystem. Imagine this is just like wifi in the early 2000. It was initially adopted with the transmitter and accessories and then it spread out and became a more ubiquitous solution. Ultimately, it was incorporated into a chipset. That is the same paradigm we will be following. Ipo . Y did you guys do an us have beenf involved with the Venture Capital forum for a number of years and there are number of advantages for a company like this. This technology is truly disruptive. It is a game changer. No competition . No competition that is direct competition. For all practical purposes, it is just an extension of the tether. If it is constantly in meeting imaging, is there a safety issue . Technology receives a watt. 1. 5 we are in the same element of a transmit and receive as a cell phone. We have to run. Keep us updated on how things are going. Ceo of energous. Left we meet three guys who left the daily grind behind to start a business. This is taking stock. I am carol massar. Labor this afternoon that Vladimir Putin calling president obama to discuss the u. S. Proposal for a diplomatic resolution on ukraine. Phil mattingly is joining us from washington. Silence,days of Vladimir Putin called for president today to discuss the proposal that john kerry had given to Vladimir Putins foreign minister at the hague last week. White house officials are stressing that it was Vladimir Putin who made this phone call and this might be a first step forward toward some type of diplomatic solution. No one has really known where he stood. If the Russian Troops amassing at the Ukrainian Border attempt to move forward. Add, the president stressed to Vladimir Putin on ais call that there is still diplomatic pathway forward. However, that pathway will have to include those Russian Troops near the Ukrainian Border to start moving back. That is something russian officials have not been willing to entertain. Friday evening, a phone call to the president from Vladimir Putin. It has been somewhat of a fluid situation, lots of movement. It did seem to Vladimir Putin would not budge. This could be a significant development. There is a reason why officials are making a point to say that Vladimir Putin called resident obama. Perhaps this was here reached this was him reaching out. They wanted to talk about the proposal that john kerry gave his counterpart this week at the hague. It includes backing down of Russian Troops, international monitors, and facetoface negotiations. Whether or not Vladimir Putin endorses the proposal or wants anything like it, much too early to tell. President obama asked Vladimir Putin to submit their own concrete proposal so that we could have paper on the table. It will be fascinating to watch. Thank you so much for the update. Switching gears, the Coffee Business it is filled with giants. Starbucks, dunkin donuts. Our next guests have a unique recipe for success. Switching gears, the coffee they were in the right place at the right time. Guys had all pretty good day jobs, right . You left them. You had good day jobs then you decided to shift gears. What was the hot moment the aha moment . The moment that made me realize that it was time to quit. The moment i kind of knew we had to quit was when i was spending more time peddling coffee up and down the elevator banks and i was not doing as much with my actual paid job. You had a day job and you were doing whats on the side . I was working at print production at gq magazine and i was making coffee for my coworkers and we realized they were not just pitying us, but they were addicted to the coffee. Word started spreading that there was this guy at gq selling ice coffee on the side. I would bring 12 bottles every day. Bees were the kind of taste are the kind of taste makers. David, you worked for some wellknown rands. What was it about this brand the got you interested . I was working at xerox at the time. A great job, but maybe not the best party job when youre a 20 six rd guy living in brooklyn. When you are a 26yearold guy living in brooklyn. He told me about this and it seems like a good idea. It seemed like it had some legs. Once he got the bottle designs, we have the branding and we have the taste. I feel like we have something we can sell. I was doing sales at the time, i am out and about. I started going to work in the morning and i would wear a suit in the morning and go back to my apartment and do some virtual work, go to some momandpop shops. Put my suit back on and go back to xerox. We found out the same day that we got into a whole foods that we were going they were building a gradys coffee shop at 30 rock. You customerabout dave was hitting on my girlfriend. I met him at a barbecue. I just got out of Business School and i was looking for something tangible to get behind. What is different about this coffee . Mostly iced coffee . It is great hot, too. It is a cold brewed process. Donuts. T go to dunkin. It is always at the ready it is stored in your refrigerator. You can pour yourself. It is new orleans style. Zero sugar added and no sugar substitutes. Healthy but it has caffeine . It does have caffeine. You mentioned whole foods. It is a big deal. Ask whole foods has been awesome Whole Foods Market been awesome to work with. But i have worked with whole foods a lot and they will sometimes help you with financing. We have not gone down that road with whole foods yet. We are trying to create a category so it is a brandnew product and we are trying to change consumer habits. Stop going to a coffee shop, just do it at home. Imagine if you always had this coffee at home. We are trying to make this a staple. You buy your milk and orange juice and you buy your coffee. They have been a good partner for us. You are working on National Distribution with them. We are mostly in the northeast, but that is the beauty of these cans. It has a year shelflife and does not require refrigeration. The bottles are great, but they do have limits. Online, lacesese that were interested places that might not have refrigeration. It will open up a lot more markets for us. Including overseas because we get emails constantly. It would sit on a freightliner. Looking to do that with the cans. With the bottle, we are proud about having something fresh. Getting it further, we will start with the cans and grow. This can will retail for 11. 99. It will make you 10 cups of iced coffee. Less than half of what you are paying at a coffee shop. When you open this can, there is going to be the ease. These. This is a tea bag is filled with our coffee. The problem with cold brew you need some equipment. Picture or any kind and you drop it in there and let it soak overnight. When you wake up, you will have the coffee. We are beating the market in a lot of ways. You guys have to answer me. Do you want to go public . No. No. No. Why question mark we have a good thing going. Why . We have a good thing going. I will definitely check it out. It is gradys cold brew. We will take a break. Looking to get vip treatment at the top restaurants without the hassle . Our next guest will show you exactly how to do it. That is coming up. This is taking stock. Ever have difficulty getting into a top restaurant and wish you could get treated by like a vip . Our next guest is looking to change your Dining Experience. To get youan app into the best restaurants with vip service. How does this work . You sign up for i know the chef and we have a great group of restaurants. You get primetime access that is not available anywhere else. And you reservations get complimentary champagne and desserts on the house. It is White Glove Service for top restaurants in new york, chicago, and miami. It is like you go to a hotel and you stay there a lot and they throw in some food. It is a cool story. I went to a restaurant with a friend of mine downtown and i was close to the general manager. We got to the restaurant, he made sure we were seated right away and we had a great table and he came over and he sent over a few appetizers on the house. My friends look to me and said, this is awesome. I feel like a million bucks right now. That those vip gestures go such a long way into making the Dining Experience that much more special. When i stood of doing research of what else was out there, the only things i could find was Concierge Services that cost thousands of dollars and were back and forth. Whereed to create an app you could make a reservation at all of these restaurants and receive the vip treatment. It does not come for free, right . Free andn sign up for browse around. When you go to make a reservation, you have to choose a membership plan. We offer a quarterly membership, a 10 day trial, a yearly membership. Is 400. Expensive plan that sounds like a lot, josh. Services. Concierge automated,h more much more app friendly and tech savvy. I want to go to le cirque. You will you will get champagne. I can get a reservation at 7 30 p. M. On saturday night. How do you choose your restaurants . I grew up in manhattan and im familiar with all of these great restaurants and we are into and with what is new and what is hot. What is in tuned and what is hot. What is the business equation . We are making money. We are membershipbased and our overhead is really small. We have a cool, small team. We are in three cities right now but we are about to launch Las Vegas Sands Los Angeles Las vegas and los angeles. You have something similar for wines i know the winemaker. We decided to branch out and offer wine. We partnered with these california small production wineries, which all have waitlists. They allocate a certain number of lines to us that members can buy immediately. How far can you take this model . Are you going to stick with i know the chef . There are a few other models we can go to. I know the hotel. Knowught a bunch of i s. Challenge, i do not know. Everybody really loves i know the chef and were excited to ounce that we will be members will be able to pay and see their bill right from their iphone apps. It is going to be really cool. Kind of a seamless experience. Joshua, thank you so much. Have some headlines involving general motors. We will get to them in just a moment. We do have some headlines related to general motors. Gm expanding its recall by nearly one million vehicles worldwide. They were built with safe parts, but they have received faulty replacements. You might recall that recently on taking stock, we had on the founders of two mothers from new jersey creating a business after receiving a following from instagram. A picture you take today could end up featured in the businesses website or Marketing Campaign. Great to have you here. It sounds like you are disrupting the advertising space. Individual it is an component. Some things you can not describe by text. A visual way of transmitting something. Do. Ell us exactly what you your corporate client roster is pretty impressive. You have pepsi, coach, people, new balance. We provide a platform that helps them cap into all of the pictures that people are sharing. Usersp them define how should be submitting the photos. Andelp them curate it display it back on their ecommerce site and measure how it is performing. You are a middle man between me and everybody else taking pictures while using and helping get those good pictures back to these clients. Whenever you buy a product, you will receive an email that says, why dont you submit a picture of that product . We will help that picture make its way back to the website. They can see on how it looks on the model, how it looks on someone more real. They get a Marketing Campaign where they reached out to a lot of folks who had taken cruises on carnival. The videos and pictures became part of their advertising campaign. Like coach, what have you done for them . They launched a campaign to take pictures from above your coach shoes. You can sees how people are wearing coach shoes and decide whether or not you want to shop for those shoes. Is this type of bringing those pictures for brand . See . Kind of payoff do they you measure the stuff, right . We provide the ability to measure it. There is a huge return for the brands. On top of that, the content they are able to tap into. That is something they can tap into, how users are showcasing the couch or a set of plates. Campaign with heidi klim and new balance. New Balance Launches new lines. When they launch new products, it increases 39 the conversion rate. Every time they launch a new product what is next for you guys . We just opened an office in london. Good to get an update from you. That does it for taking stock on this friday. Have a great night and a good weekend, everybody. Live from pier 3 in san francisco, welcome to bloomberg west. We cover innovation and the future of business. I am emily chang. His blackberry heading in the right direction . Asill speak with john chen they report their lowest revenue since 2007. We go inside one of yahoos Nerve Centers to find out how they are making apps more personal. First a check of your top resolved, tesla has