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This is Bloomberg Business Week Daily,

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>> [music]

>> with Carol Massar and Tim Stenovec on

Bloomberg Radio.

>> Hi everyone, welcome to the weekend

edition of Bloomberg Business Week. I'm

Tim Stenovec. Carol is off this week.

This past week Treasury Secretary Scott

Bessent declared a quote economic D-Day

against Iran. The US-Canada trade fight

escalated, and the Kansas City Fed's

annual gathering in Jackson Hole put

monetary policy front and center yet

again. And then, of course, earnings

from the world's most valuable company,

Nvidia.

The chip maker announcing guidance

expecting revenue to grow as much as 70%

in the next fiscal year.

For the latest on all that and more,

head on over to the Bloomberg Terminal

or to Bloomberg.com.

Coming up this hour, we're going to

examine how the Trump administration is

reshaping market fundamentals, why

Stanley Druckenmiller is calling

Treasury Secretary Scott Bessent's bond

buying a mistake, plus how the Trump

family is fast-tracking a national bank

charter for crypto-related financials.

All that to come, but we begin with a

rare public rebuke from one of Wall

Street's most influential investors.

Treasury Secretary Scott Bessent has

recently pledged to increase the

Treasury's purchases of long-dated

bonds.

>> We are going to continue deal with our

regular program of auctions, so you will

be hearing from us again the at the

beginning of next quarter. We haven't

bought a single bond yet. The next time

we have an operation is September 9th.

So, we we will see on September 9th.

>> However, billionaire investor Stanley

Druckenmiller is now warning his former

protege against trying to push down

long-term yields. In a recent Wall

Street Journal opinion column,

Druckenmiller argued that policymakers

should let the bond market do its job.

For more, Nora Melinda and I turn to

Eric Schatzker, editorial director for

Bloomberg New Economy. He explained the

history behind that warning and the

risks that Druckenmiller sees in

Bessant's bond strategy.

>> First of all, the Journal is the place

that Stan Druckenmiller typically goes

if he wants to make a public statement.

So, that part of it is not unusual, but

he does not do this very often.

So, pay attention when he does. And why

do we pay attention to Stan

Druckenmiller? Because

few people would argue that he is the

best investor in modern history. Never a

down year when he was running Duquesne

Capital Management. He was George

Soros's chief investment officer.

Um he hired Scott Bessant in 1991.

He sent Scott Bessant to England. It was

on the basis of information uh partly on

the basis of information that Scott

Bessant was providing working for Soros

Fund Management in 19 in the early 1990s

that Druckenmiller and Soros decided to

bet against the British pound. They

shorted it and broke the Bank of

England.

And it is that fundamental truth

that

governments defending prices against

fundamentals always lose that was proven

there

and which Druckenmiller argues will once

again be proven here.

>> So, take us to today. And well, actually

to last week. Because

>> Okay. So, you know, we we we we we do

need for the benefit of many to review

what sparked, right, this disagreement?

Yeah, at the very least.

Or this right post from from Stan

Druckenmiller, which by the way

you cannot

not look at

as anything but a harsh scolding. Right?

The mentor publicly admonishing his

protege.

Um

And I would also add for those who

haven't read it, go and read it.

If you're lucky enough to have a

Bloomberg terminal, it's simple NH space

WSJ, put in Druckenmiller as a keyword,

it'll come up. You can of course read it

in the Wall Street Journal. You would

look you will look long and hard to find

a piece of writing this savage and this

devastating. I mean that.

So, last week the Treasury announces

that it is going to double the size of

its long-term bond buyback program from

$2 billion to $4 billion, and then

Besant doubles down effectively and

says, "Well, we might spend more than $4

billion."

And Druckenmiller says $4 billion

understates the gravity of this mistake.

And I have for my own purposes broken it

down into four component parts. This is

how Druckenmiller dismantles the

argument behind a long-term bond buyback

program. Number one,

it's unwarranted. There is no crisis.

Yes, yields are rising, but that is the

market functioning the way it is

supposed to function, right?

Pricing in the growing risk of two

things. One, inflation or more

inflation. We have some already,

obviously.

And two,

the growing possibility of a US

government default. This is what the

bond market does.

This is not March of 2020.

>> Mhm.

>> Mhm.

>> This is not the 2022 crisis in UK gilts,

right, that cost Liz Truss her job as

Prime Minister.

Um there were, as Druckenmiller points

out, no failed auctions, no dealer

balance sheet seizure, no forced

unwinds. Number two,

it's hypocritical.

Who was more critical of quantitative

easing,

maybe some people, but few more vocal

and more aggressively so than Scott

Besant? And Druckenmiller points out

that this is effectively a version of

QE, and so what you have what the other

thing he hated about QE was that

Bessent that is. He made the case that

it was

a a blurring of the lines between fiscal

policy and monetary policy. And here you

have the Treasury Department, the

Treasury Secretary usurping the

authority of the Fed chairman.

Number three,

going back to this idea of fundamentals.

It violates one of the cardinal laws of

the financial universe, right?

Governments will always lose when they

try to fight fundamentals.

Again, I mentioned that this is exactly

what Druckenmiller and George Soros

proved when they bet against the Bank of

England.

And as Druckenmiller says, this is

another useful quote to draw from this

essay,

"Once markets believe Treasury is

defending a price,

every rise in yields becomes a test of

official resolve, and the operations

must grow to survive the tests." Well,

that raises an inevitable question. If

it's a fight effectively between the

policymaker and the market, how much

ammunition does the policymaker have?

Not enough ammunition to defeat the

market.

>> Well, it raises the question and this

it's this the the journal piece doesn't

go into this, but it raises the question

about why the Treasury Secretary would

do such a thing right now.

>> You describe it essentially as out of

character given his past comments, and I

think it's fair to say given his

hedge fund history as well,

why why do something like this?

>> Well,

the most obvious answer to that question

is that it's becoming awfully expensive

for the federal government to issue

long-term debt.

The federal government needs to finance

its deficit and its debt.

And doing so means issuing Treasury

bonds. Well, issuing Treasury bonds when

your yield is at 470 is a whole lot more

expensive, a whole lot more costly to

the government and ultimately to the US

taxpayer than it was when yields were at

370.

Uh, we could do the math, but it's

the

Let me just put it in Druckenmiller's

words.

The real problem is the fact that the

government is running an outsized

deficit. In fact,

the

real the the So, the nominal rate of

growth, right, is approximate is

actually higher than the yield on the

10-year Treasury. And he says that that

historically is an accommodative

circumstance. If anything, the market

should be pricing yields higher because

it fuels, you know, that financial

accommodation or economic accommodation

fuels inflation.

And the reason

this is the most read story on the

Bloomberg and the reason that this is

transfixing Wall Street is because of

the implications. And this is the fourth

reason

that Druckenmiller sites, or at least my

interpretation of his reasons,

uh, is that it's hazardous, right? The

long-term Treasury yield, as Stan says,

is the most important price in the

world. And furthermore, it is

underpinned by Central Bank

independence, the independence that was

enshrined in the 1951 Treasury-Fed Act.

It is the bedrock of global financial

markets.

And Stan says again in this piece, US

policymakers built the wall between debt

management and price management for a

reason. This intervention, he's

specifically referring to the buyback

program. This intervention starts

dissolving it. So, it's not just, like,

we need to think about this in something

other than just the short term dynamics

of the bond market. Whether Scott

Bessent will or will not win in his

effort to bring down long term yields.

There are much bigger questions and much

bigger implications at issue.

>> Well, when you think about Bessent and

you think about Washington, do you think

that Washington is remotely prepared for

the economic and the political

pain that would come with potentially

allowing the bond market to set

>> You know the answer to that question.

No, of course, because it probably means

it means cutting spending.

Right?

>> He makes the point in the piece that

neither party does it.

>> Right. The Yes, exactly. Both

Republicans and Democrats are guilty of

this. Everybody has been kicking the can

down the road. But now with bond yields

where they are,

interest payments exceed the amount of

defense spending. And defense spending

vastly exceeds the amount of

discretionary spending. So, where can

you cut?

The only place arguably, and I'm

certainly not advocating for anything

one way or the other, but the only place

arguably to cut, says Druckenmiller, is

entitlements, entitlement reform. Nobody

wants to undertake entitlement reform

because it's so politically perilous.

Yet, where else do you cut if you need

to reduce the deficit and bring

and restore fundamentals to a point

where people have confidence in yields

and aren't, you know, gently or maybe in

some cases not so gently driving them

higher.

>> Or, and I'm going to say something

crazy, Eric,

>> [laughter]

>> maybe increase revenues.

>> Well, that's another way of doing it. Of

course, it's restoring fiscal balance to

the equation. There's no There's no

doubt here that and Stan has been

consistent on this for years and years

and years that he would prefer that the

balance be restored by a spending cut.

Once upon a time, you had options. Now

effectively, there are no options

>> Given

entitlement.

>> I I want to make sure

people go back and read the cover story

for Business Week that you did on the

Treasury Secretary a year ago.

Um if and reread it if you if you

haven't read it in a year. But given

your experience reporting that out, were

you surprised to see this move from

Treasury last week?

And given your understanding of Scott

Bessent's It's It's investing history,

who he worked with.

>> I

And I'm reluctant to opine because

opining sounds like editorializing and

that's the last thing in the world that

I'd I'd like to be accused of.

It

that he wanted to be an unconventional

Treasury Secretary

was to me self-evident. And thus some of

the announcements that he's made and

some of the things that he has done done

are consistent with being an

unconventional Treasury Secretary. It's

very It's He was almost in a unique

position coming from his background as a

hedge fund manager and becoming a policy

maker the way that he did. There's very

little precedent for that.

>> Coming up, a look at how President

Trump's family is on the verge of having

its very own bank.

>> [music]

>> You're listening to the weekend edition

of Bloomberg Business Week. This is

Bloomberg.

>> You're listening to the Bloomberg

Business [music] Week daily podcast.

Catch us live weekday afternoons from

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>> Listen on Apple CarPlay and Android Auto

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>> Or watch us live on YouTube.

>> Welcome back to the weekend edition

[music] of Bloomberg Business Week. I'm

Tim Stenovec. Carol Massar is off this

week. President Trump's family is on the

verge [music] of having its very own

bank. The president's relatives and

their business associates have won

preliminary approval to start one riding

a wave that doesn't come around that

often.

And thanks to the Trump administration's

deregulation push, it's now easier than

at any time in almost the past 20 years

to get a national bank charter.

For a closer look, Nora Melendez and I

spoke with Paige Smith, finance reporter

for Bloomberg News.

>> First of all, I think it's important to

note that there are a number of

different bank charters that anyone or

any entity can pursue at any given time.

The

president's family is pursuing a trust

charter and has received conditional

approval from one financial regulator to

do that. Um that regulator is the Office

of the Comptroller of the Currency.

>> The OCC.

>> The OCC as we know it. Run by Jonathan

Gould, who is actually a Trump appointee

himself. Um

so, there are a lot of different

charters that anyone can pursue. Take

Nubank for example, a really well-known

fintech in that's Brazil-based. They've

received approval to be a national bank,

so it's slightly different

and maybe a little bit more vanilla

bread and butter than a trust bank, for

example.

>> Huh.

So, I mean the Trump family now on the

verge though of having its own bank.

What exactly are they trying to build?

>> So, the entity is known as World Liberty

Financial and it's owned by

members of the Trump family and their

business associates.

And they are best known for stable coin

called USD1. And when they received this

conditional approval and also before

they received approval when they were

applying um World Liberty Financial

essentially said that they want to

grow the reach of this stable coin and

build out the business build out that

business specifically.

>> You make the point in your piece

that there have been other presidents

who've had connections to the financial

industry.

The Roosevelt's operated their New

York-based financial firm for more than

a century, you write. I learned from

your reporting that George H.W. Bush's

father was managing partner of the

financial services firm Brown Brothers

Harriman.

Uh but what have have is there any

precedent for a sitting president to

have

uh

children who actually are starting a

bank?

>> As far as we know, there's not. This is

a sort of one This is uh as far as we've

reported, this is the first time that

something like this has occurred. Um and

it is really noteworthy because like I

mentioned, the

um the application was reviewed by

staff members at the OCC and leaders of

that agency were appointed by this

sitting president, by President Donald

Trump.

>> And for those out there

uh watching or listening right now who

might say, "Wait a second,

there is a conflict of interest or there

could be the appearance of a conflict of

interest." You and the team reached out

to the White House, what did they say?

>> The White House essentially said that

there is no conflict of interest here

and when

we looked at the actual documents

approving this entity to become a bank,

um they acknowledged that members of the

public had raised the question or raised

the question of the appearance of

um conflicts of interest and essentially

said, "Senior members of the OCC have

reviewed this application and

it may move forward."

>> So, why exactly does World uh Liberty

Financial want to become a bank in the

first place?

>> So, there are a lot of reasons for

becoming a bank. Cheaper funding is one

of them, but especially at this moment

in time, if you think about it, if

you're a bank in the US financial

system, that comes with a level of

legitimacy and

um sort of an an it's an inherent stamp

of approval from the US government to

operate. And that's a big deal when

you're a smaller digital asset firm or a

fintech or an up-and-coming entity to be

able to say, "We have been approved by

this US financial regulator to operate

in the US financial system." That's a

big deal. So, what I found to be

particularly interesting is in the

piece, you know, you essentially note

that this isn't happening in isolation.

You found that it's easier to get a

national bank charter right now than it

was maybe uh 20 years ago in the past.

So, what is that like?

>> even during the Biden administration.

>> Fair. Fair play. So, what's changed?

>> Really, the pace has changed. It's the

if you we include a number of graphics

in the story that I would encourage

everyone to read um that really know

just how different it is the timing is

from the point of application to some

sort of a decision, whether an approval

or a disapproval or

um any sort of decision on a bank

charter. So, that pace has really been

expedited, but also just the number of

banks that are being approved. The first

nine in the first 19 months of the

president's second term, the OCC

approved 22 bank charters. That's more

than the previous 5 years combined.

>> You know, you've done a lot of reporting

on on FinTechs, and traditionally with

with FinTechs, they they haven't

actually been banks. What they've been

is like, okay, well, if you deposit

money or

you put your money with this FinTech,

they hold it in a bank that they have a

partnership with. Is that changing

because it is easier to become a bank

now?

>> That's such a good question. So, it is

changing in some ways, but it's not

changing entirely. So, for example, some

um there may be some banks that will

still work with a third-party bank for

another branch of their business. When

you apply to become a bank or a new bank

as a FinTech, you have to make a present

a very clear plan of how you plan on

operating for the next few years. So, if

an opportunity presents itself and you

deviate from that plan in any way, you

can't do that under the plan you can't

you need to make perhaps have a

third-party relationship with someone

else to execute that new opportunity.

>> So, if we were to zoom out, are we like

essentially running an experiment here

or you know, what happens when you

suddenly allow many of these crypto and

fintech companies to actually go this

route into traditional banking?

>> I think that is a great question and I

think we're going to have to see how it

plays out.

I would note that a lot of these

some of these companies have operated

before, a lot of them have not.

Some of these companies are coming from

other countries. Some of them are

US-based. It really is

a very interesting moment time moment in

time and a moment in history to see how

these sort of non-traditional firms will

fare within the parameters of the US

financial system.

>> You go through some of the firms you

mentioned New Bank for example. There's

also um

I'm not a Lord of the Rings guy, so I

don't know if I'm going to say this.

Erebor? Is that it's all everything with

Palmer Lucky's Lord of the Rings I

guess? I don't know. So, okay. Erebor

bank with Palmer Lucky is the guy behind

that. He's the guy behind Anduril and

Oculus which was acquired by what was

then Facebook. Why should Erebor be on

our radar?

>> I think that it this influx of new banks

should be on everyone's radars to see

first of all how successful they can be

within the parameters of the traditional

system, but also to see if they slip up

in any way frankly.

I think that it is the job of regulators

to monitor that and it sounds like they

have

they intend to do so to watch these

players closely, but um they offer maybe

less traditional services than

you know, the biggest banks that you

know

and might be yeah, I would say offer

less traditional services.

>> a Lord of the Rings guy? I don't know.

I don't hate Lord of the Rings. I think

it's

a hero's journey kind of situation.

Golem Golem. The stuff that I wasn't

interested in when I was a kid like now

that I have older kids. circle back.

they're not older, but like kids that

are growing up and like getting

interested in stuff. Like I can

experience this stuff for the first

time. So, maybe he'll he'll like get to

do

>> that was me with The Hunger Games.

>> And I'll be able to Oh, yeah.

>> And circle back as an adult and you're

like, "Whoa."

>> Yeah, that came out when I was an adult,

so.

>> Maybe don't like introduce them to Game

of Thrones anytime soon though.

>> No, [laughter] that's not happening.

>> No, not for kids.

>> No, don't worry.

>> Perhaps not. But, I mean, do you expect

to see a trickle of these types of

situations happening moving forward? Is

this essentially just starting the

beginning of a pattern?

>> I would say as early as last week the

head of the OCC said that that regulator

is {quote} open for business. So, it is

a

it is a dynamic situation. It's

evolving. We'll see what happens

obviously after the midterms in

November. Um there may be more scrutiny

of how many banks and which banks were

receiving approval.

Um but,

yeah, I would say it's a dynamic

evolving

situation.

>> Where does the FDIC come into this and

and and within

um

I don't want to say allowing cuz

Treasury works on this as well, but like

are there

are there bank failures playing into

this at all?

>> Certainly. I think that it it again kind

of goes back to the first question,

which is

which charters are available for these

entities. So,

um if if you're a bank accepting

consumers' deposits, then that would

fall under the purview of the FDIC. So,

new bank for example would be a

um

an FDIC regulated entity. Um but, you

also like are interacting with the Fed

if you're one of these banks in some

way. And FinCEN, which is another

enforcement entity, they're Jamie Dimon

bemoans the levels of enforcement that

banks endure all the time. And this is

kind of what he's talking about. There

are a lot of regulators that you

interact with as a bank.

>> That was Paige Smith, finance reporter

for Bloomberg News. Also with me, Doron

Levin, Bloomberg Television markets

correspondent. Still ahead on Bloomberg

Business Week, the co-founder and former

CEO of the children's toy company behind

PAW Patrol tells us why you need to bet

on yourself when you're young.

>> But I look back and I said, you know,

there's so many magical things that

accrue to you in your 20s. Like for

example, everybody's rooting for you.

Everybody wants you to win. You don't

realize it when you're young. And

everybody wants to be around you. They

love your energy. And we had magical

things like for example, Alan Hassenfeld

from Hasbro when we were 25 when we went

into the toy industry. He took our phone

calls. He was so happy for us to be in

the industry. Anything he can do for us,

he did. Um there's the power of not

knowing.

>> Yeah.

>> Right? It's very magical. Sometimes when

you know too much

>> I'm Tim Stenovec

>> [music]

>> and you're listening to the weekend

edition of Bloomberg Businessweek. This

is Bloomberg.

>> This is the Bloomberg Businessweek daily

[music] podcast. Listen live each

weekday starting at 2:00 p.m. Eastern

>> on Apple CarPlay and Android Auto with

the Bloomberg Business app.

>> also listen live on Amazon Alexa from

our flagship New York station. Just say

Alexa, play Bloomberg 11:30.

>> Kelly, you know what they say?

>> Yes.

>> Youth is wasted on the young.

>> They do say that a lot.

>> I get, the more I think that's true.

>> I totally agree. Like I look back now

and I'm like, wait, what was I so

worried about? You know?

>> Yeah, I wonder how

>> And taking risks and just lots of

different things.

>> Well, let's talk about taking risks and

betting on yourself especially when

you're young. Ronnen Harary is the

co-founder and former CEO of Spin

Master. The company Spin Master, the

company brought us PAW Patrol.

>> And so much more.

>> And more. Air Hogs is what I'm thinking

of.

>> Mhm.

>> He's also the author of a brand new

book. It's called No Experience

Necessary. Why betting on yourself in

your 20s is the best decision you'll

ever make. We're going to talk about the

book in a second, but I mean, how much

of your work life have you spent playing

with toys?

>> Um

>> Like real toys

>> thing is I didn't play with any toys

growing up as a kid. And if you were to

ask me in university if I was going to

go into the toy business, I would have

told you like you're probably crazy. So,

the first part of my life, not very

much. In the second half, a lot.

>> So, you made up for it as an adult.

>> Correct.

>> Uh what what makes it what what There's

I have so many questions about like toys

today versus toys, you know, in in my

era, which is a lot of what you were

bringing to us. Um

but I'm curious about what makes a toy

successful.

>> You know, it's the toy business is half

art, half science. And at the end of the

day, you're looking for something that

creates imagination in the kids. Um

there's some sort of magic, some sort of

pixie dust that wasn't there before.

And, you know, we sift through thousands

of ideas every year to get down to like

the four or five or six ones that can

actually bring the innovation.

>> Is the magic still there in a world of

screens?

>> Yeah, very much so. I think if you would

have asked me in 2012, I would have said

to you, you know, like it's not going to

be good for the toy industry, but people

still love the physical toys. They love

the the the interaction. You know, they

love the you know, the magical

transformation, you know, with our toys

like Bakugan and stuff like that. Um

you know, we made an acquisition with

Melissa and Doug, which is all about

wooden toys, and it's open-ended play.

And parents love when their kids are

using physical things with their hands

and their imagination's going.

>> Love their stuff. I I have to say

>> of a certain era knows Melissa and Doug.

>> Well, and I would say in our house, too,

an old-fashioned wooden dollhouse. And

like my daughter just would love like

all her little guys, we used to say, and

just the the little toys that she would

play with. And it was just just great.

Like not in front of a screen or

anything, but we'd just play for hours

and hours.

>> Yeah. And if anything, I think there's a

trend back where parents block them off

the screens. I think that there's room

for both. And I think the actually

industry is actually um on screen and

off screen, they're very complimentary

to each other.

>> What?

>> Uh well, [laughter] I mean, more toys

than more toys than reading, okay? Uh

what about areas of innovation right now

in the in the toy industry?

>> I think the toy industry is actually

almost a tale of two cities or two

worlds. Um

you know, like fashion dolls are down.

Um

Uh

games and puzzles are up.

>> Mm.

>> Trading cards are up big time.

>> Yeah.

>> Um activities are down. So, it's kind of

a mix.

Uh

But if you're into collectibles, it's a

good space to be in.

>> I want to I want to talk to you about um

being in your 20s and what's so magic

about that, especially

um it is essentially your story of just

having

kind of the world at your feet and you

maybe don't even know it. In a world

where we are so much kids go to school

for 4 years, do this for you know, like

tell us about that.

>> Yeah. I think the most You know, it

didn't dawn on me till I hit middle age.

But I look back and I said, you know,

there's so many magical things that

accrue to you in your 20s. Like for

example, everybody's rooting for you.

Everybody wants you to win. You don't

realize it when you're young. And

everybody wants to be around you. They

love your energy. And we had magical

things like for example, Alan Hassenfeld

from Hasbro when we were 25, we went

into the toy industry. He took our phone

calls. He was so happy for us to be in

the industry. Anything we can do for us,

he did.

Um there's a power of not knowing.

>> Yeah.

>> Right? It's very magical. Sometimes when

you know too much, like I turned down a

$100 million live-action film by

Universal when I was 40. When I was 26,

we we created Air Hogs, which you told

me that you played with. And at the time

>> at me, not Carol.

>> [laughter]

>> All right. All right.

>> And and uh Air Hogs is an airplane. You

pump it up. You play with it. It flies

around 45 seconds. Um and [snorts] we

>> we spent a year and a half developing

the product, brought it to market. It

took our company from $7 million in

sales to $35 million in sales. And we

did hundreds of millions of dollars

worth of sales post that in it flying

toys. But three quarters of the way

through in the development, we found out

that Hasbro and Mattel passed on the

product.

And they passed for good reason, but you

know, for us we thought about we thought

about the issues for a while. And you

know, we were just like we can figure it

out. And I think if we were older we

would have actually not done it.

>> Well, talk to us about really your first

product and Earth Buddies. And like

>> Carol, you want to go way back?

>> I do want to go way back. Um it's like

adorable and I think we have pictures

and stuff, but I just you know, you go

through meeting with someone at Kmart.

But initially it was the wrong buyer and

getting to the right person and how

maybe if you had been 40 years old it

wouldn't have played out.

>> Correct. Um well, when we started our

business

>> I know I'm jumping, but

>> No, but it's fine. So we we came across

this product called the the Earth Buddy.

Little

nylon grass little softball you put them

in water grows grass for hair. We

decided we're going to make 5,000 pieces

for Mother's Day. So that's what we did.

And 2 months later we had an opportunity

to go down to Kmart. It was through a

contact of Anthony

>> Yeah, Kmart back in the day was Amazon

today in the '90s.

>> Right.

>> Thank you. And I drove down from

Toronto.

Did not stay in a hotel cuz we were

saving money. Got [snorts] there for the

9:00 meeting.

Pitched the buyer for 30 minutes and

after 30 minutes he looks at me and

says, "I'm not the buyer for this

product."

>> But you pitched again.

>> I pitched again cuz I didn't believe

him. I was slightly paranoid at 23. So I

pitched him for another 15 minutes and

he says to me, "I'm not the buyer."

>> You pitched him again.

>> I say to him, "No." I say No, I say,

"We're going to give you the product on

consignment sales."

>> That's [laughter] right.

>> And then he says to me, "I'm not the

buyer." So I figure if I'm giving him

the product for free and he's not taking

he's really not the buyer.

>> [laughter]

>> So I said, "You know, I drove from

Toronto, who is the buyer?" And he went

back to his office. He's such a

gentleman. He came back and gave me a

piece of paper and on it was written

Adrian Sachs. I shook his hand, took my

box of Earth Buddies and I start walking

around Kmart Corporation looking for

this buyer.

And so lucky I was like 23. I think

everybody thought it was like bring your

kid to work day.

>> Right. Right.

>> And I got so lucky and she was sitting

at her desk and I pitched her for 30

seconds. She said, "Okay, I'll give you

a meeting at 3:30." I go downstairs. The

other guys that I was with the garden

department they're like, "What

happened?" Said said a meeting. Let's go

for lunch. I said I'm not going

anywhere. I stayed in the lobby, okay,

till 3:30. I came up.

And then as I'm walking into her office,

I see on the left side of her bookshelf,

she has seven other competing products.

So I know I'm in the right office.

>> Right.

>> And then I do quick math. Before I get

into the chair, I drop my price from 265

to 165.

>> [laughter]

>> And I sit in the chair, I pitch her, I

tell her everything about Earth Buddy so

far. I tell her about Campus Faces

business that we started at university.

And then after 15, 20 minutes, she does

the most magical thing. She turns around

and she grabs the vendor book, which is

to become a vendor.

>> Yeah.

>> And she gives it to me. She says, "I'm

going to order 48,000 pieces from you

and if it does well, I'm ordering half a

million for Christmas."

And I was so stunned and

it was like I was shocked and then when

I left, I asked her for something.

>> You walked away with something.

>> That's right. You've done your homework.

>> [laughter]

>> So she was the horticulture buyer and

she had a gnome. She had a bunch of

gnomes in her office. So I asked her for

one of the gnomes. I still have it

today.

But it was the most amazing thing

because she had she had seven other

companies she could buy from and she

decided to buy from us and I think it

was A cuz I got in the room

and B she was rooting for young people

because two years later she called me

and she said, "Will you go to Detroit

and speak to some inner city youth?" And

I was like, "Of course."

And uh yeah, and then that changed the

whole trajectory of our company.

>> So in in that and if if we play out that

that moment again that was so pivotal

for you and and your company, is it

about

that you were so young you felt like

this was all you

had to do or all you needed to do? This

was your purpose in life. Was it because

it felt like

you were in a low risk time? Like what

was it about where you were in life that

that made you as a 23-year-old sit there

and say, "I'm not going to take no for

an answer."?

>> Is it you or is it like society that was

just made you feel like

>> I'll tell you something deep. I mean, I

I got identified at 10 years old with

learning disability called dysgraphia.

And so I grinded my way through school,

and school was super tough for me. Can

you You write about that in the book?

Can you explain what that is and what

was challenging for you?

>> It's dysgraphia is the inability for you

to get your thoughts out through your

hands. And so my handwriting is very

illegible, even for myself. And so when

I'm writing, sometimes when it becomes

illegible, I got to go back and rewrite

it, and then I lose my train of thought.

So an exam that would take you probably

or anybody an hour takes me 2 or 3 hours

to do.

So I just had to grind my way through

school. I was super fortunate that I got

identified and I got accommodations.

Um and I I think it's

it's one of the

greatest um

injustices

in society where people don't get

identified cuz a lot of people don't get

identified, and it costs $6,000 to get

an assessment today, which is super

expensive for people.

Um

and people with learning disabilities

have so much to contribute. So I was one

of the lucky ones to make it through.

And I think it was just my tenacity of

like that constant grinding, grinding,

grinding that when I was in the When I

was in front of her, I was like, you

know, I was in the in the store I

I was like, I'll find the bear. I'll

figure it out, you know, like I'll just

I'll just figure it out. I've

I've been figuring it out my whole life.

>> I actually told a friend of mine who who

has who's had to fight for assessments

and and and was telling her your story

cuz she has a son. And and it was like

heartening to hear it.

>> Yeah, it's this It's very difficult. I

mean, I'll tell

God I don't have kids, but God willing

if I have kids, I do not want them

growing up with learning disability.

It's very difficult.

>> Um we've only got about a minute or so

left here. Just The thought of like in a

society where we do push everybody to go

to college and stuff, what would you

say? And college is great, but

>> I think it's very personal. I think

going to post-secondary education is

such a gift. And life is long, and if

you have the opportunity to go and study

and learn, and you know, I know it's

very expensive, but if you can afford

it, if if can come out with not so much

debt or no debt at all or whatever it is

that meets you,

but to be able to learn is fantastic.

The ability to have friends for life as

a result of going to university is

fantastic. So, I'm a big proponent, but

it's not for everybody

and it's very personal to your own life.

>> And you also like we didn't get into it,

but what you talk about risk and when

you embrace risk, what comes along with

it, but by also rejecting it, there's

also a cost to that, too. So, so many

different lessons and so I think

relevant to the time that we're in.

Ronan, thank you so much.

>> much for having me on, guys.

>> Ronan Harary, his book is No Experience

Necessary: Why Betting on Yourself in

Your 20s Is the Best Decision You'll

Ever Make. And will you bring back that

toy for Tim?

>> Yeah, no problem.

>> Air Hog, [laughter] I mean, yeah.

>> Also, the company

>> talk about toys.

>> Dollhouse, Kinetic Sand, which is used

in every preschool in the United States.

>> PAW Patrol, Ms. Rachel,

yeah.

>> There's a lot of stuff.

>> Spin Master is behind it.

>> I'll start with Earth Buddies. Well, it

actually then in college, the stuff you

guys are doing. Good stuff. Come back

soon.

>> Thank you so much.

>> We'd love to continue.

>> Our thanks to Ronan Harary, author of No

Experience Necessary and the co-creator

of PAW Patrol. And that wraps up the

weekend edition of Bloomberg

Businessweek from Bloomberg Radio. Thank

you so much for joining us. Be sure to

tune into Bloomberg Businessweek daily

Monday through Friday starting at 2:00

p.m. Wall Street time on Bloomberg

Radio, Bloomberg TV and on SiriusXM

[music] Channel 121. I'm Tim Stenovec.

Have a good and safe weekend, everyone.

>> This is the Bloomberg Businessweek daily

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>> Oh.