Michael Bloomberg: Building an Empire, Leading New York and Giving Away Billions

0:00Hi everyone, I'm Nikolaj Tangen, the CEO of the Norwegian Soren Wealth Fund, and today I'm in New York I'm in the Bloomberg offices. Now, normally when I'm in the Bloomberg offices, I see a journalist or an anchor. But today, I'm seeing the man himself, Michael Bloomberg.

0:25I'm very careful to not be a journalist. The one thing you can't do is get involved in the journalism if you're going to have good journalism. So there's one guy, John McClathwape, who runs it. Mike, you just have one of the most extraordinary journeys in American business, starting Bloomberg, being mayor for 12 years, being one of the most important philanthropists. And so perhaps we can just go all the way back the day that you— I was born at an early age. Yeah, you were absolutely. No, let's start with Salman Brothers, because you were, you know, strangely enough, you were at some stage laid off.

1:03And then the next day you started Bloomberg. So what do you think then? I was, grew up in Massachusetts. Father was a bookkeeper, made$6 ,000, the best year of his life. I was a Boy Scout. I was a C student. I always made the top half of the class possible, was my gag line. And when I was getting out of school, I went from college to business school at Harvard. I was lucky enough to get in. But when I was ready to graduate, I thought I was going to go to Vietnam. Partially, we were involved in that war. This was in 1966, a very nasty war in a very nasty ways. Americans treated the troops who we drafted and sent over to risk their lives.

1:54Some of them came back in boxes. and some were lucky enough and didn't. But we were just treating people terribly and so I signed up to go. I could get a commission as a second lieutenant in the Army. I thought you'd be safer as a second lieutenant than as a private. Turns out not because the second lieutenants led the charge over the barbed wire, going out into the jungle, and a lot of them were killed. It turns out at the last minute, one month before graduation, I have perfectly flat feet and they didn't take anybody with flat feet. And so all of a sudden, I wasn't going to go to Vietnam and I'd not thought at all about what I was going to do with my career.

2:34And then you went into banking. I asked a friend of mine, Steve Fenster, who is a very smart guy, since unfortunately died of cancer. And Steve, I said, what should I do? He said, go to Wall Street. I said, where is that? What do they do? He said, just do it. I said, who do I call? He said, call Salomon Brothers and Goldman Sachs. I said, what's that? Who are they? Just do it. So I called both. One sent me down with an airplane ticket. One sent me down with a train ticket from Boston to New York. And both of them made me an offer. One offered$14 ,000 a year, the other$9 ,000 a year. I like the people at the$9 ,000 one better, just who I happened to meet that day.

3:18and I said to the head guy, look, here's my budget,$5 for Subway and newspapers and food, $125 for rent every month. I can't afford to go to work for you for$9 ,000. We said, how much do you need, kid? And I did the math quickly and I split the difference. I said, $1 ,100,$1 ,100. And he said, fine,$9 ,000 salary,$2 ,500 loan. And he got up and he walked out of the room. And I didn't know if I had a job or not. But I assumed I did and came in a month later when I finished school. And then there was a bonus at the end of the fiscal year, September 30th. I got$500 bonus, forgiveness of the loan.

4:09The next year, I got a$2 ,000 bonus, forgiveness of the loan. Now, in the end, it worked out fine. Don't feel sorry for me. But I'll never forget that. People make the mistakes of going to work for a place where they get paid the most. And that's not particularly when you're young. That's not what life's about. You've got to get experience. You've got to build friendships. You've got to try things and see what works and what doesn't. and all these young people just looking at the wrong thing. What is my position? What am I going to be called? Do I have a title or what? When you're 25 years old and you're getting out of school, not where you should focus.

4:49But you took all the experience you had from Salomon and kind of put that into the startup of Bloomberg. Now, how did you come up with the idea? Because it was quite revolutionary at the time. I had worked on a trading desk, and we had a couple of screens. the screens showed the prices of either stocks or bonds. And it showed the last sale or the valuation. And it showed plus or minus an arrow or a different color. But there was nothing on your desk that let you do what you needed that data for. And people never didn't think about that. Well, why would I need the data? I want my drawer graph. I want to do a calculation.

5:32I want to send a message, any of those kinds of things. And the computer could do it, but nobody had put it together. So I thought, why don't we build a computer to do it? Now, keep in mind, when I was doing this, PCs have not been invented then. Nobody believes that. There was a date before Apple, and I wanted to have a computer, but they didn't exist. So I hired an engineer, Ron Harris, a nice, very smart guy, and I would go up on Saturdays and work in his barn. He had a little lab set up, and I'd solder in the capacitors and resistors and the circuit boards, and we made our own computers. Now, fast forward until two years later when PCs were invented, and I said, we're getting out of the PC business.

6:27That's not what we do well. We couldn't possibly compete in here. And so we just bought a few of the first PCs and junked the other stuff. And the rest is history. Now, if you come into our offices in New York, you will see Bloomberg screens all over the place. Why have you been so successful? Why has Bloomberg been so successful? I think we focused on building something that was useful. didn't try to make it into something that it wasn't. There was a need. Nobody really thought that having that computer in the middle that I just described was useful. And by the time it was done, which was three years before we really had a customer, it was too late for anybody to catch up.

7:28Now, since then, there are plenty of people who have good products, but they only do one or two of the 10, 20 things that we do. And the real world is you've got to have lots of different inputs and be able to adjust to different kinds of customers and different markets and that sort of thing. And we just focused on building the best thing we could and not necessarily always listening to what the customers want. I've always asked, and customers can be very valuable, but that doesn't mean they are able to think in the terms of what we could do with a computer, for example. So what are some of the things you put into the computer which they didn't know that they needed?

8:14You put in the terms of, in the case of a bond, the maturity date, and maybe a call date at the beginning wasn't even that, and a coupon, and today's date. And then there's a formula you can use to calculate the price of the security at a given yield or vice versa.

8:38We just kept adding functionality, didn't increase the price, kept going and sitting with people and asking them what they wanted and watching them try to use what we had. I'll never forget this. It's a good story. Glenn Walner, one of our employees, really smart, tall, nice guy. He was going to give a demonstration to somebody like you who headed a big organization and asked me to come along. Fine. We'd like to do so. We get there, and in those days, we were still using the Bloomberg-built hardware. So he brings in this box with a cathode ray tube in it, the picture thing, and then there was one that had the computer in it, and there was one that had the keyboard in it, and one that had the power supply in it.

9:30And he plugs in all these wires, and everybody's sitting around watching him doing this. And then he turns to me, and he says, Darn it, I forgot the power cord. I just wanted to take a swing at him after all of this. We finally got an introduction to this bank. I forget who it was. And he was going to blow it because he didn't. So don't worry about it at all. I've got my open source briefcase. And he took out. He had printed out copies of every single screen that we produced and could show it to them. And everybody had a good laugh about it. They bought in. They ordered a couple computers or two or three, maybe not more.

10:10right then and there. But the point of the story is it's that kind of preparation, that kind of willingness to keep going and not to let little things get in the way.

10:26In your book, you talk about the important cultural aspects, and one of them is to outwork other people. And this is an example of that, right? What does it mean in practice to outwork other people? Well you don't say no, you don't give up, you put a balance in life, you still want to be able to go out and you know have a life, a family, so it's balancing hard work with enough time off to not get worn out or that sort of thing. But you are, so when are you, you are now 83 right? 83 and happy to be, my My ambition is to be 84. Are you still in the office most days? I've been taking some Fridays off, which is a little bit embarrassing.

11:11But yes, fundamentally, I like to come in. Yeah. And when are you here in the morning? I get up at 5.15 automatically. If I didn't even set the alarm, I probably would. Girlfriend and I both get up. I take a shower, do some exercises with a trainer a couple times a week, and then go to work. and I'm here by 7 at the latest, maybe a little bit earlier. Is this the kind of work ethic which everybody in Bloomberg has? An awful lot do. People here, we have very low attrition rate. People here like to be here. At least they tell me they do, and I think it looks to me like they do. And when I go to visit a customer, I'll always take along a few salesmen or maybe an engineer or two.

11:57And I will say I am just impressed with how well-trained they are and how focused they are in a nice way. You also talk about the importance of taking risks and encouraging people to take risks. What type of risks do you want people to take? Well, you have to try things. You know, it's a stupid idea, but maybe it might work. You can't do all the stupid ideas, and not all of them will work. But just because it's not conventional doesn't mean you shouldn't take the shot and do it. When somebody comes to me and they want to try something, I say, well, try it. I can't believe it's going to work. And I try to ask questions and explain to me what's going on.

12:45But if they have a gut feeling that it's going to work, you want to encourage them. even if I'm right and it doesn't work. If you try something here and it doesn't work, you can go back and I'll make sure that you and I are seen walking together telling a joke to each other. I want people to understand you don't have a penalty if things don't work. Quite the contrary, the fact that you tried is a plus and that's going to help your career. Some people put their offices in cheap places to save money whilst you put them in the most expensive places. and you make great offices. Well, it's fascinating.

13:26I read in the paper every day another company is going to use AI to get rid of the people who aren't paid very much, who deal with their customers. Last time I checked, a really important group was your customers and you don't want to pull away from giving as much service to them as you can. Same thing with the physical location. I want you to come into the office and that sort of thing. I'll never forget the first time we opened an office in Tokyo. We hired one guy, and I was there at the time. And he couldn't start until his parents came to see the office and approve it. Now, it was a dumpy little thing in an office building or something, and I've long since lost the name.

14:18But I'm a believer that you want to have people like what they're doing, be proud of what they're doing. The most important asset this company has is its employees. So for that reason, you certainly want to provide as good facilities as you can. Now, you don't have to go crazy, but you can find things to make people proud of where they work, that they can bring their friends in and some envy saying, look, this is where we're different. And it's, you know, I've been doing it for 44 years with the exception of 12 years. I went to City Hall in the middle. and we've always tried to get the best facilities.

15:07One of our employees yesterday was in a head-on collision with a drunken driver, seven broken bones, she said, and I called her this morning in the hospital. Her husband was there, expressed my condolences, assured them that our insurance policy, you can't spend more on insurance than we do. It covers everything. And they shouldn't worry about that. They, of course, our HR department had already contacted, been over, and they know how to take care of people. But we have 26 ,000 employees. Yeah, but so you've got 26 ,000 people and you call somebody who's in an accident. If you have 26 ,000 people, you're probably going to have somebody that either they or their spouse or their child is injured or dies every week.

15:58and those calls I always make. Sometimes I have to have a translator on the phone because I don't happen to speak whatever language they do. It just says to everybody that I consider and the management considers and your co-workers consider that you're valuable and that you're a nice person and that we're in this together and we're going to have success together. What are some of the other leadership principles that you have? You certainly take care of your people. You give them a chance to have upward mobility. You know, I talk to you and I'd say, you say, you know, you're happy where you are, great.

16:42You say, you know, but you'd like to move. OK, do a good job here and that'll be the end of the road. They're not going to guarantee you when, but you've got to do the job now. And I always say to them, when I say, who built that? Don't say me. Say I or whatever. Say oh, he did it. I was lucky enough to help him. Now everybody knows you're lying. But two things. One they think better of you because you've given credit elsewhere. And number two, that other guy or woman owes you something now so you'll get a helicopter. around but I just I think it's treating people as human beings and understanding what they that they have aspirations as well and they have fears and and where did you learn where did you learn this I don't know I think you know I had my parents uh my father died from heart failure he'd had rheumatic fever as a kid and that caused your heart to go crazy when he was 50.

17:52My mother lasted to 102 at 101 and a half. She was still going out every day by herself. My mother never saw a kitchen she liked, so she would go to a restaurant every night. And they were the ones that gave me values. I remember one time we sat around a table, and my father, it was his idea. My sister and I, my sister's two years younger than me, and my mother and father around the square table. And every night my father would pick on somebody, including himself, but he'd try to go around. And you had to describe what you did that day, and then everybody else had to get into the conversation for 20 minutes or so on discussing it.

18:43But you learned how to talk and reason and defend and all of those things when you were very young.

18:56Why did you decide to run for mayor? I think, somebody asked me that recently, and I think it is, I was really annoyed that you kept reading that you couldn't do anything about education. and the kids were getting the teachers unions really, which I understand the teachers union, they're to defend, not the students, they are there to defend the teachers. And I understand that, but somebody's got to stand up for the kids. And the elected officials tend not to because the teachers unions are very good at establishing contacts and making the elected officials think that the teachers union has a great deal of say in their reelection, which is what they really care about.

19:46So the test scores were going down, and everybody said you couldn't do anything about it. And I thought to myself, that's not true. I think you could do something about it. And out of that, I decided I'd run. Everybody thought I was crazy. Nobody thought I had a chance. It was the luck of the drawer at that point in time. You had the right opponent who wasn't very much of a candidate or whatever. But, and you just got lucky and got elected. So during those 12 years, the average living age in New York increased by three years? Increased by three years. Test scores went way up. Yeah. I mean, what did you do?

20:36For example, if somebody's sleeping on the doorstep, letting them sit there doesn't, to me, make a lot of sense. It's not very, I don't know what quite the right word is. It isn't very helpful, not helpful, but you're not a nice person if you don't help them. And you can do something about it. People say, can't do that, can't educate the kids, can't fix the traffic. That's not true. If you can pull people together and explain and have a good policy, and that means having good people around you. Most of the people, an awful lot of them, that worked for the city of New York while I was mayor came to work for Bloomberg Philanthropies and are still there 20 years later.

21:28and why they do it because they get a chance to change the world. What's the main difference between running a company and running a city? I think most of the principles are pretty much the same. You cannot be as free to do anything you want. You can do it if you're the owner. You have to understand you're not the owner in the case of dealing with the public. But the public, if you explain to them what the problem is and how you're going to fix it, and you put your career on the line for them, and then build credibility as things work, it's amazing how you can change things. I convinced the teachers union to go along with us and lengthen the school day and that sort of thing.

22:19It wasn't easy and it was very expensive because they wanted to have their salaries grossed up for it. But we went and we sent a social worker and a police officer to that person sleeping on the doorstep. Convinced them to come in and we'll give them a shower, give them some clothing, give them a bed to sleep in. and then take them home because an awful lot of the homeless have left home in an argument and they don't know how to get back in. And I think there's solutions like that, testing. And we showed that test scores would go up. There was a gap between black and Latino kids here and white and Asian kids here.

23:04Nobody could get rid of that gap. It stayed the same, went up and down a little bit based on other things. We cut the gap in half. And it wasn't by bringing the top down. It was by bringing the bottom up. And could we have done more after 12 years? Maybe. I don't know. But it brings us to your commitment to philanthropy. Where did that come from? Because you have now given away more than$20 billion. I remember my father. We talked about philanthropy around the dinner table when that rotation of who was going to do the talking at my house that I talked about. My mother collected money for an organization, Hadassah, which helped people in Israel.

23:47I cut lawns for the Boy Scouts to raise money for them. Sold Christmas wreaths for them. Shoveled snow for them. Finally, after a number of bad starts, I realized you've got to know which way the plow's coming and put the snow on the upside, I'd not plop back in. But I think it was at home. We talked about charity, certainly. And then, you know, I'm in an enviable position. I don't need another set of golf clubs, but I do want to have the satisfaction of maybe saving somebody's life or helping a kid get an education or curing a disease. That's heady stuff. You sit there and before you close your eyes and go to bed, it's like, oh, aren't very many people have done those things.

24:42And I'd like to do it. I've taken care of my children. They are both very philanthropic. They both have charities of their own. They've started because of my former wife, who's still one of my best friends, and I talked about it all the time. They give away part of their own money every year. Why is the Jewish community outperforming everybody else when it comes to philanthropy? I don't know if it's true around the world. It certainly is in New York, and my assumption is it is in America every place. I guess it's just part of the culture. For me, I give away virtually all the profits of the company.

25:31It's enormous amounts of money and you can really see the results. I was down in Baltimore and one of the things we're doing is there's a company here, they sell glasses, eyeglasses like yours. And if you buy a pair of eyeglasses, they give a pair of eyeglasses. And so we added$75 million to that. They just did it with small amounts of money. and I was in Baltimore and I sat next to a second grader and she tried to, she's talking to an old guy, you know, it's not easy for her, but we talked. And I said, you know, now we have these glasses and look here, you can pick the color and they have all different colors for kids.

26:17And she said, I want this, no, I want this. Finally picked the color and she put the glasses on and she started crying. I can see, I can see. Maybe they never knew that she needed glasses. They never thought about testing her eyes or whatever. And I did check in two days ago this week. No connection to today, but checked in. She still has them, hasn't lost them yet. But if they lose them, the principal of the school knows the call and we'll give them another one. How do you decide on where to allocate the money, who to give to? A little bit of it is who asks you or brings the need to your attention.

26:59So I have a number of friends here who give away enormous quantities of their own money. And when they call and say, I'm supporting this, we're going to try to, or Bill Gates, for example, we can end polio. It would be amazing if you could do it. And he was making progress and he needed some help. And so I'd be happy to do something with him. And I don't know, we gave$100 million and another$100 million. We still are, there's still polio in a couple of countries. And it's, why do they do it? Because Gates can explain what he's doing and it's a good idea. And when I want to do something that I think is a good idea, I'll call him.

27:44And he'd be happy to help in the same ways. And I have a number of friends like that, but they just have this belief that you can make the world a better place because, at least in my case, I get pleasure out of it. I mean, it's really nice to be able to, and I don't go around bragging to people about it, it's nice to be able to say I did something. There's a woman who's been with me for 30 years, Patty Harris, she runs the foundation. and we, Ali Jaffin with her, and there's about 350 people there because when we make a gift, we follow up and make sure you do what you promised. And I just, in fact, bought another building just down the street because we're going to run out of space where we are now.

28:36But it's sitting with them and we talk about, you know, should we do this? Should we do that? what's the likelihood of them succeeding is it well run you they may be a great idea but if they have absolutely no clue how to make it you can give them some help and and we do help a lot of people who are giving away money by training them and for example we work against guns illegal guns John Feinblatt runs it And they've made a big difference passing laws that require you to have a permit or don't sell to minors or things like that. And I'm not opposed to the right to have a gun, but letting kids have guns is absolute outrage.

29:25And also, if you have a gun in your household, your gun, and you hide it away all the time, You're 20 times as likely to get killed by that gun than if the gun wasn't there. Oh, wow. And it's because the kids, you know what kids will do. You look in your mother's pocketbook and you look at what's on the top shelf up there and that sort of stuff. And with Patty and Allie, we go over and then we have, Anthony Williams works on the environmental stuff. and we just paid for a new satellite up there to look for methane. Methane is worse than coal even. You can now, however, see it come out of the ground.

30:08Typically, it's when they're drilling for oil. And then we'll call up and say, you know, look, you can sell that methane and make money out of it. Most of them, I didn't realize that and they want to go along. We've closed over half of the coal-fired power plants in Europe, and I think it's about 75 % of the coal-fired power plants in America. So, it's been very successful. We have a long ways to go, yes, and the planet is warming at a rate that is going to be cataclysmic for everybody. But you can sit around and say, well, I'll just throw my hands up. I can't do anything. No, we're going to keep working and see what we can do.

30:49You mentioned your shelf, and I appreciate you haven't got a gun on your shelf, but you You have some Spanish books on your shelves. You are a diehard believer in lifelong learning, and you are the best example I can think of. So how do you continue to learn? Well, I mean, this morning I was studying irregular verbs in Spanish. If you said to me, should you spend your time learning a foreign language, I can tell you Apple now has earplugs that will translate for you. and the software is in the phone but whatever and um you know so you can talk to anybody in any language so so why do you then try to learn irregular verbs i'm not an athlete i come from a family where sports was never mentioned in the house um and so i picked up a sport picked up golf because it's something you can do on your own and i needed some intellectual thing and so So I got a D in French, and I went to school.

31:56And when I went to college, there was a German requirement. This was in 1960. Why German? Because nobody had translated the science during World War II. And so I thought there was a requirement to learn to speak German. Three days in German class, I changed the engineering school. I was never going to learn German. But that was something I always, I failed at it or didn't have the guts to go along with it. And so why not try it? Do you think you'll ever retire? No, but I think that I would change what I'm doing to give more opportunities. I've already appointed two people to be, one to be the chief executive officer, one to be the president.

32:42But I want you to be comfortable that if I drop dead, the services we're providing to you will be continued. Mike, what do you want your legacy to be?

32:58For example, Johns Hopkins, my alma mater, is one of the great universities in the country. And they do enormous amount of research and help enormous amount of people get educated and save their lives and culture and all that sort of stuff. And I want to make sure that people go back and say, you know, he really was a guy who cared about other people and then did something about it. I don't think they're going to remember me as a great golfer. It's the most ridiculous thing I do, and I'm obsessed with it. So why? But I'd like to think, and I think also my kids. my parents made a very big difference in my life.

33:44Museum of Science in Boston made a very big difference in my life. The Boy Scouts made a very big difference in my life. And I'd like to say thank you to those organizations. So I support the Boy Scouts, I support the museum. Well, you for sure care about people and you've done more about it than anybody has. I know, I mean, what an incredible life. Thank you very much. But you can do it too. Everybody can do it at a different scale. And, you know, volunteer and go in and help and put food in for deliveries of free food. And there's things you can do. And it's just so satisfying. I don't understand why people don't do it.

34:27Great, Blaise Vance. Thank you.