Motley Fool Hidden Gems Investing - Motley Fool Money: 04.04.2014

Episode Date: April 4, 2014

March jobs numbers come in light. The debate over high frequency trading rages on Wall Street. And Google pulls off an unusual stock split. We analyze the latest from Amazon, Barnes & Noble, GrubHub and share 3 stocks on our radar. Plus Twitter co-founder Biz Stone shares what it’s like to negotiate with Facebook CEO Mark Zuckerberg and why Wyle E. Coyote is an inspiring business leader.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Chris Hillenbrook. Everybody needs money. That's why they call it money. From Fool Global Headquarters, this is Motley Fool Money. It's the Motley Fool Money radio show. I'm Chris Hillen. Joining me in studio this week from Motley Fool One, Jason Moser. From Motley Fool Income Investor, James Early. And from million-dollar portfolio, Ron Gross. Thanks for being here, guys. Good to see you. Thanks for having us. We've got a hot IPO, a hot new device, and the hottest debate in the investing world. Twitter co-founder Biz Stone is our guest this week. And as always, we'll give you an

inside look at the stocks on our radar. But we begin this week with the big macro. The jobs report from March came out on Friday. Ron, a couple of the numbers, 192,000 jobs added, unemployment rate unchanged at 6.7%. Sort of a little bit of a Goldilocks. I was about, you took the words right out of my mouth. Didn't mean to steal your thunder. Goldilocks is a single word, though, right? Not words plural? Right.

I think that's right. I think it's good enough to say we're moving forward. It's not so good that it will cause the Fed to do something like taper more quickly or raise interest rates or any of those kinds of things, which the market loves its accommodative stance that the Fed has. So, you know, I'd love to see unemployment tick down, but flat is flat. we did have more people join the labor force, which is good. That still needs to continue to increase. That U6 number we talk about, a fuller gauge of employment, did tick up a bit just to

12.7 from 12.6. So not too troubling. But again, I would like to see these numbers continue to trend down. But for the time being, I think the Fed will remain accommodative, and the markets, I think, will move forward. But wasn't there a disproportionate amount of temporary hiring? That's one question I would have. The weather wasn't too good, obviously. It's a factor. But, you know, bigger picture, you know, what I wonder about for this country is sort of the globalization of the workforce. And this is something, not something that's going to obviously push away the American worker, but might shave off a few fractions of a percentage point at the margin.

I posted a creative project on Elance recently. People from Argentina, from China, from Romania are offering to help. And they all speak passable English. I mean, they're not fluent, but you wonder how much of that, how much work is no longer sort of bounded in by geography of having to be there. And what's that going to do to sort of the younger workforce these days? So, it's not just multinational corporations. James Early is exporting jobs. I didn't even do it, actually.

What have you got going on? I wasn't pleased with the offers I got. Jason, anything leap out at you in the report? I just kind of felt like as soon as this report came out, you could hear Janet Yellen just say, oh, thank God. I mean, the Goldilocks analogy, I think, is an apt one. It wasn't too good, it wasn't too bad, so they're not going to have to go back on the whole tapering thing, they're not going to have to speed it up. It was just about right to where they can leave it as the status quo for now. But I like what James was talking about there, because I think ultimately

what we're seeing is, even with jobs coming back, they're not paying very well. There's not a lot of money out there right now, and that's why we're not seeing inflation tick I mean, wages are outpacing inflation, but that's not necessarily a compliment, really. I mean, wages are still low. And I was listening to an interview on NPR where they're actually talking with just small business owners around the country. And sort of that boots-on-the-ground feeling is that, yeah, while there are some jobs coming back, a lot of them are just service-oriented jobs or not very well-paying jobs. And so that, consequently, is keeping spending relatively low, and the savings rate, consequently, is also at all-time lows.

Well, I don't listen to NPR. I'm a Howard Stern guy, but still. A couple weeks ago, the markets were a bit concerned about some comments Yellen made about when the Fed would start to tick up interest rates. But a few days ago, she made a comment in a speech that, really, she'd be looking at 5.2% to 5.6% unemployment before they started. to raise rates, which I think the markets clearly are happy about. I remember in college when unemployment was like 4%, maybe 4.5%. That was just the average, and that was really the target. I think those days are just over. I think you may be right. The hottest debate in investing this week started last Sunday night on 60 Minutes. Best-selling author Michael Lewis has a new book called Flash Boys about the world

of high-frequency trading, computers buying and selling stocks at super high speeds to take advantage of tiny changes in prices. James, the debate really evolved as the week went on, but Lewis set the tone on 60 Minutes when he said, look, the stock market is rigged. That was the word that people latched onto. He said the exchanges are involved. But as we were talking about before the break, right before the show, we're really talking about, in terms of the effect, it's the large institutional investors who are kind of getting hammered here a little bit. It is true, Chris. A lot of our orders don't even get to those big exchanges. It's just Joe Schmoes, although we are affected by the price discovery that happens that way. Now, I will say, just to frame this, something like 2% of the firms are actually high-frequency firms, although they might do half or sometimes even a slight majority of the trading volume.

A Purdue study showed that in 2009, the profits from these firms were only $5 billion, and that was down to $1.25 billion in 2012. So, it's kind of like the spam emailers of the market, right? They send a disproportionate amount of email through, but it bugs everybody in a small way. But it's not as big or profitable as people think. I mean, bottom line, if I were regulating this, mostly the high-frequency traders are competing against each other, by the way. So, it's not the long-term investors that they're stealing from so much. They're fighting each other, and they do have liquidity. I think we should do two things.

One is ban the sale of proprietary exchange data feeds that move faster. Number two, impose a tax on all trades lasting less than a second or two, something like that. Ron, one of the things that was fascinating to watch was how people started to take sides in this debate. And late in the week, we had on one side Charles Schwab saying, yes, this is a huge problem. And on the other side, Jack Bogle, the creator of the index fund, saying, no, this is actually good for small investors. Yes. So, this pros and cons to everything, as always there is. I think whenever someone has what we'll call an unfair advantage, that isn't great.

Does that filter down to the average everyday investor who wants to buy 100 shares of IBM on any given day? I don't think the person is harmed that much. Are mutual funds harmed? Are some pension funds harmed? There is probably an impact there. But again, I don't think it rises to the occasion of calling the whole stock market rigged. I think that's a rather alarmist word. People are already kind of skeptical of the stock market. I don't think that helps matters. And I hope it doesn't keep people out of the market. Ron, you and I both worked at hedge funds before. And we know that trading can be a dirty business, right?

I mean, people will literally go through your trash. People will call you up under different pretexts trying to find out what you own. There are people with these fancy algorithms who try to see how much size you're putting into the market. It's always been like that, and this was before high-frequency trading. It's just sort of one more thing

that is now being called out among many. Yeah, I think that's right, and as people get more sophisticated, it becomes easier to kind of jump ahead of a trade or an order that you see coming and you just jump ahead of that and you gain an advantage. If it rises to the occasion of really being unfair to the general investor, then I think regulation is necessary. Or the volatility scares the people away.

I mean, that volatility decreases value from the stock market. We had a flash crash. These computer systems are more complicated than we think. And it must be a big deal if the Purdue chicken people are getting involved. Back in January, Google paid over $3 billion to buy Nest, a company selling internet-connected thermostats and smoke alarms on Friday's shares of Google. We're down in the wake of reports that Nest has halted sales of its smoke alarm because it can accidentally be turned off during an emergency.

That sounds pretty bad, Jason, although when you consider the size of Google, probably this isn't a big deal. Yeah, I mean, it's not good. I mean, you obviously don't like seeing something like this. But I think as with any recall, I mean, recalls in general are more about how the company and management react or respond to the recall versus the actual recall itself, in most cases, at least. We look at GM, for example, and that is a great example of how not to handle a recall. They're paying the price now, and Mary Barra, who really didn't have much of anything to do

with it, is sitting there in a hot seat. I read through Nest's response to this, and I think it was very adequate. The CEO of Nest wrote a good letter about the recall and gave options to consumers who either own Nest products or want to buy Nest products. I think ultimately trust is a key factor. We were talking about this before the show. I think that as the smart home and the Internet of Things start to take over our lives, it's trusting that the devices are going to work. That's a hurdle that people are going to have to get over. We're already over that, at least in some capacity. Whether you have an iron at your house that turns off automatically after a certain amount of time, or your wife has a

hair straightener or whatever that turns off after a certain amount of time. That's a smart device to an extent there. But yeah, I mean, I don't think this is really any big deal for Google. I mean, Nesta's responding to this correctly, and it'll be water under the bridge in no time. Google also in the news this week for splitting its stock two for one. But Ron, this is not the typical split. The new class of non-voting Class C shares will trade under the ticker that we've come to know, G-O-O-G. The Class A shares, which had been trading under that, are now under a new ticker. Is that confusing enough for you?

G-O-O-G-L. It's a big pain is what it is. It's a pain. It also seems like it's more control of the company for Larry Page and Sergey Brin. That's exactly why they did it. The new shares don't have any voting rights. So while it is, in a sense, a stock split, you are not able to vote. They retain control of the company. They've been rather upfront about that. They've said, we're happy to let people participate in our profits, but not in the direction of the company. So, it's kind of a bookkeeping pain, if you will, but that's kind of all it is, probably. Don't you think that Google is probably one of those companies where, really, shareholders

shouldn't have too much of a say-so, anyway? I mean, it's not like we could guide them in how they develop their algorithms, or develop Google Glass, or whatever technology they're in the middle of developing now. So, I mean, like Ron said, they've been very forward about saying, look, you can join us for the ride, but we're calling the shots here. That's a company I don't have any problem with. I don't want to be involved in their operations, but things like corporate governance and voting for the board and things like that, I would rather them have less of a say over. I'm just bummed about the fact that the S&P 500 now has 501 stocks in it.

Yeah, it's kind of weird. It's happened before, but just for a few days, that was really a bookkeeping situation. This is a more permanent. Still 500 companies, 501 stocks. Come September 2015, this is actually going to happen, where they're going to open it up. Any company that has more than one class is now going to be included in the S&P 500. So there'll be still 500 companies, but there'll be 505, 506, whatever it is, stocks. Coming up, another week, another hot IPO. Stay right here. This is Motley Fool Money. As always, people on the program may have interests in the stocks they talk about, and The Motley Fool may have formal recommendations for or against,

so don't buy or sell stocks based solely on what you hear. Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser, James Early, and Ron Gross. On Thursday, Barnes & Noble was the No. 1 loser on the New York Stock Exchange. Liberty Media announced it is selling 90% of its stake, and shares were down big on the news. But before we go on, can you guys just remind me what they do again? Jason, this seemed pretty cut and dry. Liberty Media took a big stake three years ago,

essentially betting on the Nook e-reader. That's being phased out, so Liberty's taking their money and going home. Yeah. And I mean, like you said, they were betting on the Nook. And even though Liberty's walking away with a little profit here, at the end of the day, they got this one wrong. I mean, and that's OK. It's a reminder to all of us that we all get them wrong. But yeah, Now, since Barnes & Noble's earnings in late February, the stock was up 20%, and obviously that has all been erased. But this is not the endgame for Barnes & Noble. I mean, when we look at what this company does, it is still a big retail presence out there with their bookstores.

And that brings in 65% of their sales, more than 80% of their profitability. Now, yes, those sales have been falling, but not at a precipitous rate that implies the business is dead. And the comparison I like to use is when Circuit City went out of business, we all thought Best Buy was going to be able to take up all that market share. Didn't quite happen that way, but Best Buy is still in business in spite of Amazon's competitive threats. And I think that Barnes & Noble can exist much in the same way since Borders has disappeared. Even though Amazon is out there, Barnes & Noble can still exist. They just need to provide things that Amazon.com is not going to be able to provide,

whether it's author signings, writing workshops, or school book fairs. Those are the types of things that they need to focus on. On last week's show, we told you about the media event Amazon was holding April 2nd to provide an update on their video business. This week, they unveiled Amazon Fire TV, a set-top box to stream movies, TV shows, and music to your television, and it's a video game console to boot. I just want to go right down the road.

Ron, I'll just start with you. I look at all of the choices now and I'm more confused than ever before is there anything that you're seeing out there that makes you say I'm changing my habits as a TV consumer or are you waiting for it to shake out as a guy who just installed Roku

I said on the show last week of course now the new thing is out it's great yeah story of my life it looks interesting it's faster it has more memory it's voice controlled it has lots of games for people that like games which a lot of the other alternatives don't, like the Chromecast from Google and Roku,

who has games but not as much. It doesn't have HBO Go, I understand, which may be a big deal for some people. The Roku does. So, I mean, the speed and the memory, I guess, seems like good. But this is all good for consumers, and I imagine they will sell a bunch of them. I don't think it's a threat to Netflix, as I see some articles saying. James, any interest? You know, Chris, when my wife first started dating me, she came to my house, and the first thing she said,

well, where's your TV? I literally didn't have one, so I don't watch TV. I'm not the expert here. I defer to Jason Moser. Well, that would imply that I am an expert, which is not the case. However, we do have an Apple TV device at home. We have a Roku device at home. And tomorrow, I will be opening up my Fire TV that is on the way. Wow. Whoa. And really, for me, I have no desire to cut the cord whatsoever, but I do like these little streaming devices. And so, we're going to put it on one of our TVs in our house.

We have two. And, you know, give it a whirl. Maybe I'll give you a review next week. How about that? Sounds good. Grubhub, the online food delivery service, went public on Friday. Shares rose more than 40%. You buying, Ron?

No, thank you. I'll be a watcher. Come on. Daily average grubs are up to 107,900. Daily average grubs, did you just say? Daily average grubs. That's an official metric. It's in the S1.

Before we get to the stocks on our radar, you get delivery to your home. One restaurant for the rest of your life. What are you picking? One and only one. It's between Chinese or pizza from New York City. I'm going to say Chun Li Chinese from New York City. James? Sprouts Cafe, South Lake Tahoe, California.

Wow, yeah. I would go all out with Ruth's Chris Steak and Lobster Tails. I'm on the other side, Ron. I'm going Brooklyn Pizzeria in northern New Jersey. I don't blame you. I really don't. All right. Let's get to the stocks that are on our radar this week.

Ron Gross, you're up first. What are you looking at? I'm looking at Ruby Tuesday, RT, a company that has been- Speaking of restaurants. Speaking of, a company that has really not been doing well. They report on Wednesday. This is a company I look at for our deep value service. It's a turnaround.

Old management's out. New management is coming in, trying to fix things, getting away from that upscale concept that they tried, which just seems silly in hindsight. They own lots of their real estate, about half maybe of their stores. That interests us from a deep value perspective, so I'll be watching. And the ticker symbol? RT. James, what are you looking at?

Let me just tell you, the first time I went to Ruby Tuesdays, I got the most horrible migraine, and I got so sick, I won't get into it. Is that cause and effect? It's okay now. I sense I've gone back. It's a nice place. Buffalo Wild Wings and Ruby Tuesdays. James put both these guys out of business.

I think you just better not go out to dinner anymore. Veolia, V-E, is my company. It's a French water, sewage, municipal services company. I felt like a big idiot because I recommended an income investor, went down, I sold it. Then I re-recommended again and went down again. But now, in the past nine months or so, it's up like 76%. S&P is up 17%. So, starting to get some momentum.

I still see upside, about a 4% yield. All right, Jason Moser, what are you looking at? We're going ProtoLabs, P-R-L-B. And this is a company that gets lumped in with those 3D printers, but it's actually not a 3D printer. They're in rapid prototyping with more traditional injection molding. Growing their little corner of a $6 billion market there. I like the founder, Larry Lucas, is still involved with the business. And how can you not love a business that is responsible for the flume, Chris?

The flume? Yeah, they have a Cool Ideas Award in the flume. The breathalyzer for your smartphone was developed from Proto Lab's Cool Ideas Contest. So that's one to keep an eye on. I was going to say, because 3D printing seems like an industry that has grown to the point where, I'm just thinking back to Matty Argersinger being at the conference out in Las Vegas earlier this year saying, hey, look, a lot of these are going away. So they've got more bets than just 3D.

It is scary, and that's the thing. Proto Labs is differentiated in that regard. All right. Jason Moser, James Early, Brian Gross. Guys, thanks for being here. Thank you, Chris. What's it like to have a face-to-face negotiation with Facebook CEO Mark Zuckerberg? We'll find out from our guest this week.

Twitter co-founder Biz Stone is next. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. Let's talk accolades for a moment. Time Magazine named our guest one of the most influential people in the world. Vanity Fair named him one of the 10 most influential people of the information age. And if that's not enough, GQ named him Nerd of the Year in 2009.

Biz Stone is the co-founder of Twitter and author of the brand new book, Things a Little Bird Told Me, Confessions of a Creative Mind. Biz, thanks for being here. Oh, Chris, thank you so much for having me. Tell me, the Nerd of the Year trophy, is that somewhere prominently featured in your home? Because, you know, most influential person in the world, that's great and all. But I have to believe that for someone with your track record of success in the digital information age, the Nerd of the Year, that's got to be a special thing. Well, you know, they didn't actually give me anything.

What? And not only that, you have to temper these things with the fact that these are kind of backhanded compliments. I mean, nerd of the year is a little, like, what are you trying to say? And then if you look at the list of Time 100's most influential people in the world, that year also included Osama bin Laden. It's influential. It's not nice. So, you know, I always take these things with a grain of salt. All right. Let's get to some of the things in your book. And before we get to Twitter, you worked for a few years at Google. And one of the things that you write about and that I've seen you talk about is that Google, for all of its success, has either consciously or unconsciously prioritized technology over people. what did that do for you in terms of the way it affected the way you conduct your business and in

particular how did it affect the way you built twitter well this idea that you know i have in my head this simple ordered list number one is people number two is technology and sometimes i think um a lot of a lot of big tech firms just that they have it the other way around and it's such a simple ordered list, but it actually is incredibly powerful because once you decide to follow this order of people first, technology second, then you realize that no matter what you're building, it has nothing to do with the technology. It has everything to do with how people choose to use the technology. And so that's why, you know, I've come up with this sort of little descriptor for myself where I call myself an Internet guy who believes in the triumph of humanity with a little help from technology.

One of the things you write about in the book is how constraint inspires creativity. How much of Twitter's early success do you think is because of there's that constraint of 140 characters? Well, I think the 140-character constraint is more on the side of the people who are using Twitter. It forces them to be more creative. It forces them to think a little bit harder about how to get their idea across in that short two sentences. You know, very early on we saw people doing Twitter haikus, which of course they called twaikus. um but you know so that 140 characters i would say is more on the side of of the people using twitter helping to um encourage their creativity from from the point of view of constraint on our

side we were constrained um all around we were constrained uh people wise we just didn't have enough engineers we didn't have enough resources we were um we just didn't have enough people to do the work. We were constantly putting out fires and never really, for years, never really able to innovate, build, get ahead of ourselves. So that constant constraint, that constant sort of boxed-in feeling, I think made us work harder than the average bear. One of the things you write about in the book is how Facebook offered you half a billion dollars for Twitter back in 2008. Obviously, you turned it down. What's it like to get that kind of offer? And what was your thought process in turning it down?

I noticed that you phrased that as half a billion instead of 500 million, to make it sound even bigger. But actually, at the time, it was very, very strange. you know the 500 million dollar amount came from a joke we were driving down evan williams and i my co-founder of twitter one of them he and i were driving down to palo alto to meet with mark zuckerberg and we sort of came to the conclusion while i was driving down there that we didn't really we weren't really ready to sell our company so i said what if we just make up a number that's so ridiculously high that there's no way that anyone would ever agree to it. And to be perfectly honest, the highest number I could think of was $500 million.

I couldn't think any higher than that. So I said to Ev, $500 million. We had such a laugh about it. We were laughing so hard we couldn't breathe. And then when it came to the actual meeting and when it came to actually, you know, zuck saying you know i don't like to talk about numbers but if you throw out a number i can tell you yes or no and ev looked at me and then he looked at mark and he said 500 million and mark just said that's a big number and i said you said you say yes or no

um but uh you know it really came down to this it really came down to be to having to think about money abstractly you you have to separate it um you have to think about it as a resource um or think about it in some other abstract kind of way and try to separate it from what you what your intentions in life really are and we at that moment in time and at that point in time for the company, Twitter, we knew that we wanted to grow Twitter into a timeless, you know, a timeless company of enduring value. And we were just getting started and we had so much further to go. And so we just weren't ready to, I don't, I hate to put it this way, but to give up, you know, we wanted to go on that journey. So we, from

that point of view, it was a very easy decision to make. When you've lived without money for so long, and you think about it that way, it was difficult. Just like when I left Google. I left a lot of shares on the table at Google, and that was also a big decision to make. But I've had good luck in thinking about money abstractly and trying to follow my heart. I was going to say, that is one of the threads in the book, that money, for all that we covet in the world, money really does affect not only individuals, but it affects the culture, the environment at companies. It seemed like that was also the case as Twitter grew, that the bigger the company became, the more money that was involved, fairly or unfairly, that really did seem to have an

effect on the way people inside the walls at Twitter were relating to one another. Yeah. And, you know, I was somewhat, I don't know, I guess oblivious comes to mind. I mean, I was always thinking of us as this merry band of folks who were building something that we were emotionally invested in and we loved. And as the years went by, I didn't really realize how much value we had built and, you know, the fact that we had built this billion or multi-billion dollar brand name. And it really didn't occur to me until much later on that money might be a factor in some decision making for some people. But I always, you know, try to stay away from that way of thinking. And like I said, try to think of it more abstractly.

I have a theory on, I have a couple of theories on money, if you want to hear them. They don't have to do with Twitter, but if you'd like, I'd love to share my theories on money. Absolutely. I have this theory that when you have no money, when you're in debt, when you're deciding which bill to pay every month, that's like having absolutely no cushion. That's like having no cartilage in your knee. You know, it's like bone on bone. You're just, you're constantly on edge.

And that means that every little thing with your spouse, your partner, anyone, people at work, any little stupid thing suddenly becomes an enraging, you know, argument. And it's because you have no padding in life. You just feel like you're constantly on edge. And so I think of when you get just enough money, not extreme wealth, but enough money so that you can have a savings account, you can manage all your bills, that acts like an immune system for your life. And suddenly all of these things that would normally tip you over the edge don't. And so that's a really good thing. And then I have this theory on when someone becomes immensely wealthy, when they become mega rich, I feel like that just amplifies the personality of that person. So it just makes that person more of who they are.

And so money does change people, but I would say that it amplifies them rather than completely changes them. Let me go back to Facebook just for one question. Any tips for me if I ever find myself in a face-to-face negotiation with Mark Zuckerberg? Well, jokes don't really work. He's a very smart, shrewd business guy, and so joking around just doesn't work very well. So that's the advice I would offer there. Just get straight to the point. Coming up more with Biz Stone, this is Motley Fool Money.

Welcome back to Motley Fool Money, talking with Biz Stone, the co-founder of Twitter and author of the new book, Things the Little Bird Told Me, Confessions of a Creative Mind. Let's talk about your current venture in addition to this book, because you've got a new company, Jelly. For those who don't know, Jelly is a new way to search that allows you to tap into your social network to get answers. Let me say up front, I was very skeptical of Twitter early on, and now I'm on Twitter. I use it every day. It's one of the first things I check in the morning. I love it. So that's my way of prefacing my question about Jelly, which is, why am I using Jelly? If I've got Google or any other search engine, what am I getting from Jelly that I'm

not going to get from another search engine. I'm actually really glad to hear that you're skeptical about Jelly, too, because if you weren't, I would feel like something was wrong. Everything I've ever done, people have been skeptical about it. So that makes me happy. So what we've done with Jelly, my co-founder, Ben Finkel, and I realized that in the past 15 years, no one has really completely reimagined the way that we get answers to our questions our queries we've been using the same sort of oracles you know and so it occurred to us that it's been 15 years we live in a completely new media landscape everyone's connected everyone's mobile everyone's social you know in terms of social networking that sort of thing

So, what we've done is we've designed a better way to ask a question. And Jelly uses images, it uses maps and location, and most importantly, it uses people to get the answers to your questions. And we found that for a significant percentage of queries, you know, a human is just a fantastic source of information, of knowledge, of experience, so much better than just retrieving a document. So that's what we're taking on, and it's a huge challenge. I can't even believe we're doing it. When I decided, when we first came up with this idea, I almost got nauseous because I thought, are we really going to do this? Is this something that, jeez, we're going to do this all over again? We're going to do this big of a thing?

But it's a completely different sort of way of getting answers. It's just a better way. You are the CEO at Chelly. It's the first time in your life you've been CEO. You weren't the CEO at Twitter. what's it like being the CEO and and what do you know about the job of CEO now that maybe you didn't know or appreciate previously oh it's it's so great uh because I've had you know I've had a front row seat for so long now that I feel like I've been able to watch learn um you know steal

the traits that I think are fantastic, avoid the things that I've seen not work. You know, I guess what I'd say about being a CEO is that so much of it is about being communicative. You really cannot over-communicate with your team, with your investors, with the people who use your product because there's this i think there's just a natural element to humans going back to like this basic root sort of level uh where we fear the unknown and so when we're not hearing any kind of any information we assume the worst so being a great ceo i think half the job is just constantly updating people what's going good what's going bad if something's going bad

What are you doing to address it? That, I've found that is a big part of being a CEO. And the other thing is, the other thing that I value a lot is humor. I think humor is sort of a secret delivery mechanism for truth. And if you don't, if you're not having fun, if you're not sort of giving enough time to being jokey and that sort of thing, then you're doing it wrong. just a couple more questions and i'll let you go the subtitle of your book is confessions of a creative mind what do you think is the biggest misconception about creativity particularly as it relates to business well first of all it's funny my friend jack dorsey um when he saw the

book he said confessions of a creative mind what are you guilty about and i i didn't even i hadn't even realize i didn't even realize that that it could be read that way anyway um the biggest misconception about creativity i think is that you know is that some people are creative and other people aren't other people aren't which is just ridiculous everyone is incredibly creative it's just that not everyone has figured out how how to unlock their unique brand of creativity and some people have and it's it's a shame it's a shame that there's people who are walking around today who think they're not creative. They are. They're incredibly creative, and they just don't know it yet. So one of the reasons why I wrote this book was to allow people to take a fresh

perspective on their own life, to look at their life through my eyes, basically, which are admittedly hallucinogenically optimistic and aspirational lenses. But nevertheless, I hope on the subject of creativity that when people read things a little bird told me, they will realize that they have the power to be limitlessly creative, just like anyone. Lastly, because apparently you're not busy enough being the CEO of Jelly and all the other ventures you're involved in. You are also spending time helping to teach an MBA class at Stanford. The class of 2014 will be graduating soon. What's one piece of advice you have for whether it's graduate students or college students who are getting ready to go out

into the business world? The one key thing that I make sure to drive home in my lectures, both at Oxford and Stanford and Berkeley to folks who are going out and wanting to start companies, wanting to, you know, make it in the business world. The key thing that I've learned, and this is something I share in the book, is that you have to be emotionally invested in the work you're doing. um you know by no means is success guaranteed but failure is if you're not emotionally invested in your work and that's something i want i'm always trying to drive home to uh to young people who are going out and starting the book is things a little bird told me confessions of a creative

mind it is available everywhere so pick it up by all means biz stone thank you so much for being here. Chris, thanks for having me. That's going to do it for this week's show. The show is mixed by Rick Engdahl. Our engineer is Steve Broido. Our producer is Matt Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.