Nobody starts out in the C-suite. Members of Fortune’s Most Powerful Women community tell you how they navigated corporate America to get to the top

Trailblazers

 Thank you. [INTERPOSING VOICES] All right. OK. Cool. Good morning. I'm Anna Maria Chavez. I'm the chief executive officer for Girl Scouts of the USA. How do you feel being a woman has influenced your career path? [MUSIC PLAYING] You know I think being a woman, being a mother has really influenced the way that I look at things. I had two amazing women who mentored me. My grandmother who taught me at a very early age the importance of education because she never was able to receive an education. And then my mother who was one of the first women to run for public office in southern Arizona. As an adult when I transferred my skills to the law, I had seen her take on so many things, even without a law degree. So as a lawyer, I thought, well, private education I should be able to do so much more for society. As a young woman growing up in southern Arizona where there wasn't a lot of resources, when I think back and people asked me, so did you have obstacles, did you have barriers? I'll be honest. I have lot of adults who kick down a lot of barriers for me. That's why I'm so grateful and honor to be the head of the Girl Scouts because I give girls hope everyday. It was the 100th anniversary of Girl Scout Houston, Texas. I was looking out the audience and had brought to Houston the young woman who I introduced to Girl Scouts. She was a positive force in her school. She did everything she could to help her Girl Scout sisters. Irene is a bright girl who is, unfortunately, faced some challenges. And at the end of the year, the Girl Scout year, I learned that through all of this, Irene, since the age of nine, had been homeless. A couple of years later, she was traveling all over the country speaking on behalf of youth and she had become a national spokesperson for kids like her. Her life had been changed because Girl Scouts and I'm on stage and it hit me I was being a role model how powerful is that. There are going to be other women that are going to follow you, they're going to have it a little bit easier because you broke through that barrier for them. 

The Girl Scouts CEO Is Kicking Down Barriers for Young Girls

Careers

She tells us how in our new series “Trailblazers”.

Susie Gharib hosts Fortune 500 CEOs and business leaders from around the globe, and explores the ins and outs of their companies as well as their approaches to leadership

On Leading

 Brad, let's talk a little bit about leadership. You are the founder of Uptake. It's a little more than a year old, and it's growing. But you also have been the founder and director of many other companies that you've started, and you're still actively involved with them. So how can you be an effective leader with all of these enterprises? You need to focus as a leader is the answer. The fact that I have involvement at the board level of a number of companies, I think makes me a better CEO, because I have the ability to sort of jump in and out of a lot of different stories and understand patterns. But my focus is on Uptake. What is your leadership style as a CEO? At age 46, my leadership style is still a work in process. But if you came to Uptake tomorrow and watched all day, what you'd see is quick, clear decision-making. What you'd see is a very explicit acceptance of trying and failing, versus a, hey, get it right. Let's not screw it up. I want to keep velocity moving. And I think you'd find values. Curiosity. You'd find these things that are not just random words, but I mean, look, we have philosophy classes for our company. About what? About the philosophy of life. Now, you don't have to go if you don't want to. But you'd be amazed how many people at Uptake take philosophy as part of something that we offer, because you should be curious. You should want to find what's out-- you know, what's your purpose beyond coming to work. Who are you? Because if you're a better person, we are a better company. Many people say that Silicon Valley is the go-to place if you want to find talented entrepreneurs, and you want to know about the next new thing. You bucked that trend, and you started uptake in Chicago. Tell us why. We started Uptake in Chicago, number one, because that's our home. Number two, because specifically for Uptake and our collaborative disruption model in the industrial internet, this is an asset to be in the manufacturing heartland of this great country. The relationships that we have with iconic leaders in these globally relevant industries are uniquely powered and empowered by this Midwest-based team that we've built. So I think that in the case of Uptake, really exquisitely, being in Chicago is a huge asset. And Brad, I'm sure along the way, you've gotten some advice about how to run a company. Tell us what has been the best advice you've gotten on the subject of leadership. Best advice is from Sam Zell, who has been a mentor to me for 25 years, and an extraordinary relationship. And the advice is very clear. Great leaders, great entrepreneurs, understand how to balance risk and reward, get emotion and all the other polluting biases out of the way. So they understand risk. They evaluate the right reward clearly. They make a decision whether the risk will be paid for by the possible reward. Then they hustle like hell to make sure that they get that reward with all their resources. That is great advice. 

Do Philosophy Classes Help a Company Prosper?

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Eastworld Spotlight

 CLAY CHANDLER: Restarting the economy will be the top item on China's National People's Congress which convenes in Beijing today. China's GDP collapsed last quarter by 6.8%, its worst performance since Mao's Cultural Revolution. How quickly can China recover? How will it cope with rising unemployment and increased trade tensions with its most important trading partner, the United States? Has the global pandemic transformed the Chinese economy, and in what way? For the answer to these and other questions, we're joined today by Andy Rothman who is the Investment Strategist for Matthews Asia. He's joining us from San Francisco and he has lived and worked in China for more than 20 years, and is one of the savviest China hands we know. Andy, thank you for joining us. ANDY ROTHMAN: Thanks, Clay. Great to be here. CLAY CHANDLER: Here in Hong Kong, we're all watching the movement of the government in Beijing as they convene for the National People's Congress. What's your take on the health of China's economy as they convene this policy meeting? ANDY ROTHMAN: I've been calling this the worst economic numbers since the Tang Dynasty. [LAUGHTER] And the recovery has been considerable. China's economy clearly is not back to normal and probably won't get back to normal this year, but we're in the early stages of a V-shaped recovery right now. And I think the real challenge is going to be for the last 20%. How long is it going to take us to get back to normal? So it won't be a complete V. I think the last part of the upper section of the V is going to be a bit of a struggle and might not come until next year. But you know, things are picking up at a really good clip, much better than I would have expected a few months ago. CLAY CHANDLER: Do you have a target for the GDP figures for the end of the year? What sort of range are you looking at? ANDY ROTHMAN: No. You know, I really don't care. I've been arguing for years that the GDP growth rate in China is not only the least accurate economic statistic but also, especially for investors, the least important statistic. You know, if you were to tell me what the real GDP growth rate is going to be three quarters from now, that wouldn't change the way that I think about the economy or the way that we invest. So I'm much more focused on the more micro numbers-- what's happening to consumer spending, fixed asset investment, industrial production, housing sales, auto sales, things like that. CLAY CHANDLER: So let's talk about some of those numbers. What are you seeing in each of those categories? ANDY ROTHMAN: Well, what we're seeing is the Chinese consumer is back and we are well on our way towards a pretty broad consumer recovery. And I think on a relative basis, compared to the rest of the world, China is going to continue to be the world's best consumer story. So let's take a look at autos, for example. We had a really steep collapse earlier this year, but it's come back dramatically. In fact, autos are the one category where the growth rate in April was actually faster than it's been for about 18 months. New home sales are not back to normal, but pretty close to that. Those are big-ticket items. That indicates that the middle class and wealthy Chinese-- which is a big part of the country-- have not only enough money to buy a new car or a new home, but enough confidence in the future that they're willing to make a purchase like that. And on top of that, less expensive things like smartphones. Sales really picked up in April and we're up about 20%, I think, year over year. CLAY CHANDLER: You know, there's a lot of political debate about pulling out of the Chinese market and decoupling in the United States right now, but can multinationals afford to just sacrifice the growth that they could get in China? ANDY ROTHMAN: No. [LAUGHTER] This whole conversation about decoupling is, in my mind, just nuts. We're talking about the two largest economies in the world decoupling? How does that make sense for either economy? How does that make sense for any company that's going to be asked, for political reasons, to do that? I mean, if a company is in China, they've done it for business reasons. Isn't that kind of a bedrock foundation of how we work here in the United States, that companies should make decisions based on what's good for business? Now, if you talk about investment by major American companies in China, the vast majority of them are investing in China to produce goods to sell to Chinese people. So if they bring that production back here, what does that do to them selling, let's say, cars for GM? Which, by the way, sells more cars every year in China than it does in the United States. Apple produces in China, both to sell around the world, but also in China. So I think that decoupling is just not a realistic option. CLAY CHANDLER: Let's talk a little bit about investors and what this all means from their perspective. Do you see any sentiment among investors that it's time now to pull back from China? ANDY ROTHMAN: Over the last decade, every year on average, China has accounted for about one third of global economic growth. That's a larger share of global growth than from the US, Europe, and Japan, combined. The vast majority of American investors are, I think, significantly underweighing exposure to that driver of global growth. In terms of how investors are looking at it now, we're coming off a year, last year, where the Chinese economy and Chinese-listed companies in general performed really well. And this year, the Chinese stock market has been significantly outperforming the S&P. And so, I think a lot of investors are taking another look at whether they or their clients have enough exposure to that engine of global growth. So I have two recommendations for investors. First is you really need to probably spend a little bit more time understanding the dynamics of the Chinese economy beyond what's in the headlines. Because even if you or your clients don't own any Chinese equities, what happens in China has a big impact on your portfolio because companies like GM, Apple, Tesla, Nike, Nvidia, Qualcomm, Intel, Dolby-- it's a long list-- get 20% or more of their global revenue from China. So understanding that support. If you want to understand what Jay Powell is going to do next, understanding what's happening in China is important. So that's the first point that I emphasize. The second is, with China accounting for about a third of global growth every year-- and that share might well go up right now because of what's happening with the pandemic-- do you and your clients have enough exposure to that driver of global growth, especially to what I've been calling for, like, a decade now the world's best consumer story. CLAY CHANDLER: Let's talk for a second about these trade tensions because they seem to be heating up again. Is there a risk that the trade agreement will come unstuck as a result of all this? ANDY ROTHMAN: Let's go back to mid-January when the trade deal was signed. At that time, it was clear that this was more of a political deal rather than a trade deal. It was a political deal in the sense that, in President Trump's campaign to win the presidency, he made a big deal about reducing the deficit, and this was all about trying to focus on those numbers. Now the deal that the Chinese government signed in January had purchasing targets from the United States that were completely unrealistic from the get-go, even if the pandemic had not come. The increases that they were agreeing to make were totally unrealistic. And now with the pandemic, there is absolutely no way they could get there. If you look at the data so far this year, it's really clear-- to me, at least-- that Xi Jinping really wants the deal politically to work. He has significantly increased Chinese purchases of agricultural products from the United States. Pork, soybeans, cotton, for example, are up significantly over last year, and up over 2017, which is the base year. So I think this is a message from the Chinese side that they'd like this deal to work as best as it can in the current circumstances. And I think those numbers give the President optionality. He can say, yeah, OK, because of COVID-19 they weren't able to meet the targets but they've been doing their best. Or he can say, they're not even close to meeting their targets and therefore I'm going to break the deal because they haven't lived up to their end. CLAY CHANDLER: And do you have a sense of which of those two options he's likely to choose? ANDY ROTHMAN: It's difficult to predict. I'm a little bit nervous because a few weeks ago was the first time I heard the President express some doubts about the deal, but he hasn't gone beyond that. So what I'd be looking for is what the President says and what he tweets. I'm especially going to be keeping an eye out for whether the President speaks harshly about Xi Jinping as an individual, because right now Xi is one of the few world leaders who, I think, hasn't gotten a kind of schoolyard dictate from the President so far. CLAY CHANDLER: [LAUGHING] Yeah. ANDY ROTHMAN: If that happens, that might be an indicator that things are not going well on the trade deal. CLAY CHANDLER: Unemployment has to be somewhat of a concern right now for Xi Jinping. The latest numbers from the Statistics Bureau indicated 6% for urban unemployment. That figure isn't very representative, obviously, of the full picture in China. It doesn't tell us what's happening with all these migrant workers. What's your guess as to what the actual unemployment rate is now in China, and how many people are out of work and not able to find a job? ANDY ROTHMAN: Yeah, unemployment is a significant issue. And, you know, there are two things that I worry about as risks which could derail the economic recovery that's in its earliest stages now. One would be a second wave of the virus. And I was much more worried about that, actually, about six weeks ago when they started opening up. But over that period of time, they've been able to manage to keep the number of new cases and deaths quite low. So that seems less of a problem. The bigger problem right now is unemployment and especially what's happening to very small, privately owned companies, which are the engine of growth in China just like they are here in the United States. The unemployment problem has been significant. I think, my best estimate is that back in February at the peak of the virus outbreak in China, there were probably 70 to 80 million urban workers who had either lost their job or were unable to return to their job. So that's an unemployment rate of close to 20%. But I think today that's come down by about half, so maybe 35, 40 million unemployed or unable to return to work? Let's say they're working for a restaurant that hasn't reopened yet because there aren't enough customers. So that's an unemployment rate of maybe 8% to 10%. That is significant. It's not so bad when you compare it to the rate in the United States right now. But it seems that the government's done enough to cushion the impact of that because we're not reading about social unrest, social instability. CLAY CHANDLER: Does this imply that China needs to embark on a very ambitious stimulus program that needs to ease monetary policy in some way? Or is it able to stay the course? ANDY ROTHMAN: I'm not expecting a dramatic stimulus because right now, the organic recovery seems to be holding up. The Chinese government's certainly capable of doing a dramatic stimulus but I think they won't do that unless it's really necessary. At the same time, they have to do a little bit more than they have been doing right now. CLAY CHANDLER: I wonder if we could talk for just a second about the tensions in the tech sector between the US and China. How do you see this standoff over national security and technology with some of China big tech giants playing out? Is there an endgame here where we reach a solution? Or does it just continue to get worse? ANDY ROTHMAN: I think it's likely to continue to get worse over the next six months, at least, through the US presidential election. CLAY CHANDLER: Mm-hmm. ANDY ROTHMAN: Frankly, I'm a little bit puzzled about what the objectives are here. From one perspective, you're right that China is very dependent on semiconductors either produced by American companies or with American intellectual property, IP. China imports, by value, more semiconductors than they import oil. So one question to ask is, is this actually a net positive for our national security in the United States for China to continue to be dependent on American semiconductors? Or is it better for US national security to force them into a rapid plunge, into building their own semiconductor production and design facilities? The engineers here in California who don't have an interest in Huawei way tell me that as long as Huawei gear and 5G is installed on the periphery of the network, and that Nokia and Ericsson equipment are at the central core, that the risks are not that great and can be significantly mitigated. Then you have to think about what the impact will be on American technology companies that are getting a significant share of their revenue from China. So Qualcomm, for example, I believe gets about 2/3 of its global revenue from China. Intel's is about 25%. TI's is a significant share. If they were to lose those markets, what would that do to the R&D budgets of those companies and their overall financial health? CLAY CHANDLER: Do you see one kind of impact of the pandemic being that it actually encourages Asia to trade more with itself and perhaps less with the United States? ANDY ROTHMAN: Oh, that's already happening. In the first quarter of this year, ASEAN became China's largest trading partner and the share going to Europe and the US went down a little bit. If I was a policymaker in Washington right now and I was worried about the race to global superiority in economic terms between China and the United States, I think the biggest risk of the US falling behind China right now is related to the virus. If the US opens too soon and opens without the same kind of preparation that is being undertaken in the Asian countries, then we risk a second wave or even a third wave, which is going to delay the economic recovery considerably. And that would give China time to catch up in some ways. And so, if I'm thinking longer-term, reopening in a smart way in the United States is probably more important to our economic competitiveness vis-a-vis China and the rest of the world than worrying about semiconductor sales to Huawei. CLAY CHANDLER: Although the virus didn't start in the United States, China has managed to cope with it in a more efficient way. And it's done greater damage than almost any of the things that we've been discussing about China in terms of undermining US competitiveness. ANDY ROTHMAN: Yes, I agree, and let me add two points to that. One is that, while China has done a remarkable job of containing the virus and dealing with it in general after January 23, which is when they locked down Wuhan. CLAY CHANDLER: Yeah. ANDY ROTHMAN: But this is not just the success of an authoritarian, one-party regime. Look at what South Korea has done. Singapore, New Zealand, Japan. So this can be done in democracies. The other point I'd make is that China did make major mistakes early on. There is compelling evidence of cover-ups by local officials in Wuhan and Hubei province in late December and early January. And at some point, there needs to be a reckoning for that, but that should come after the virus is contained globally. CLAY CHANDLER: Andy, I want to thank you for sharing your insights with us. This has been a fascinating discussion and very illuminating about some of the most important trends in the global economy today. We look forward to staying in touch with you and having further conversations in the future. Thank you, Andy Rothman. 

Eastworld Spotlight: China’s path to economic recovery 

Uncategorized

Andy Rothman of Matthews Asia joins Fortune’s Clay Chandler.

China’s path to economic recovery 

Andy Rothman of Matthews Asia and Fortune’s Clay Chandler discuss.

Watch: China’s path to economic recovery 

Exploring how business and life have changed as a result of the COVID-19 pandemic.

New Normal

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Fortune Explains

 There was absolutely no explicit comment or evidence from the hackers. They were angry about a movie interview, and they're doing it for that reason. This particular hack was apparently sparked by the fact that they were making a movie that depicted Kim Jong Un, the leader of North Korea. This is a film where the interesting part started after the film was actually filmed. So the movie is sort of infamous as a tale of a talk show host who decides he's going to interview Kim Jong Un, the leader of North Korea, and he falls in with the CIA and becomes sort of their agent to go on a mission to North Korea and assassinate its leader. And studio chiefs had all signed off on that idea. They're a little nervous about it, but they had going forward. In June of 2014, when the CEO of Sony saw the movie, he got very nervous about what he had seen. He was very worried about causing conflict between Japan and North Korea, which had always had very difficult relations. This was before any threats of any sort. So he called the CEO of Sony Pictures, Michael Lynton, and Lynton started to scramble to try to distance Sony Corporation, the Japanese company, from this movie. Roman was very upset. He was mortified at the appearance that this film, which was all about satirizing a brutal dictator was being reedited to appease a brutal dictator. So there's a big internal conflict between the filmmakers and the studio, and it played out over the next few months over the biggest issue, which was the reediting of the final scenes where Rogen and Goldberg characters commandeer a tank and kill Kim. It was very gory, very graphic. You see his melting face. You see his head pop. That was the original version of it. And Kaz Hirai, the CEO of Sony Corp, was very intent on having that change. But very shortly after that, within days, North Korea went ballistic and started issuing threats against the studio. They weren't saying anything about cyberattacks at that point or hacking or any of that sort, but they were ominously warning that Sony would suffer for it. They continued to promote the film and planned a very wide release, and then the hack took place. The hackers threatening an attack on the order of 9/11. Instantly, the movie becomes an incredible hot potato. Movie theaters say they don't want to show it, so Sony is left sort of seemingly at odds and they announced that they're not going to try to show the movie because their opinion, no movie theater will show it. Sony was very harshly criticized, including by the president of the United States. Yes, I think they made a mistake. We cannot have a society in which some dictator someplace can start imposing censorship here in the United States. Now that's not who we are. Sony was absolutely flayed. And frankly, nobody in Hollywood came to their defense. Then they found a coalition of different people or companies who would show it. They announced they would show it video on demand. Some smaller chains announced they would show it too. So ultimately, it was a sort of a multi-step rollout with some video on demand, some smaller theaters. Ultimately, Apple and Sony even itself made the film available on their video on demand networks. 

The Interview: A costly decision for Sony (Part 1)

Fortune examines Sony’s disastrous hack and goes deep inside the studio before—and after—the attack took place.

Exploring the latest gadgets, gizmos, and gear at the cutting edge of technology, from e-bikes to gaming and way beyond

What The Tech

[GREEN HILL ZONE PLAYING] So today we're playing the Sega Genesis Mini. It's a remake on the classic console that came out in 1989. 16-bit graphic technology. The most advanced video game system in the universe. The Sega Genesis was released in North America in 1989 and sold 30 million units. At the time, it was Nintendo's biggest competitor. Even though the Sega Genesis Mini is definitely a lot smaller than its original counterpart, they tried to stay true to the original design. You've got the same buttons. You've got the reset button, which actually works. And they've got the power button, which is pretty important. But they also added some details like the volume button. It doesn't actually work, because there's no actual place to put your headphones, but it just shows that they really tried to stay true to the original design. You've got the same vents, and it all really looks similar. Just a little bit smaller. The new 16-bit console comes with 42 games. It's actually twice as many as the SNES has came out with, which was its direct competitor when they were both actually on the market, and they're the same price. Some of the games include Sonic, Street Fighter. You've got Mega Man, and it also has two new games to the system, which are Darius and Tetris. If you're trying to figure out which of the 42 games to play, there's a number of ways that you can actually list them. One is alphabetically, which is pretty simple. Or by genre, you can go by number of players, since you can play with one or two players. You can also go by release date if you want to play in the order they came out in. You can also view the games as if they were on a shelf. It's a really cool look, but it's not the most useful. There's also a fun Easter egg if you change the language to Japanese. It changes the cover art to the ones that were released in Japan, and the interface also gets a different look. You've also got some options for how you play. You can stick to the original 4:3, ratio or you can stretch it out to 16:9, which is what most movies are now. And if you do stick to 4:3, you can also change with the background on the side looks like. You can just stick to black panels on the side or you can have Sonic in this stereo system, or a pixel background. It also has a CRT filter, which is supposed to mimic the look of old TVs, but it ends up mostly just looking darker and it doesn't always complement the games very well, so you might just want to stick to HD. I definitely wasn't a big fan of the controller. Definitely very loud and clicky, and it feels like you've got a long way to go before you actually trigger the button. There might have been some slight latency, but nothing too crazy. I had a lot of fun playing the Sega Genesis Mini. It's really great, especially for someone like me. These games came just before my time, so I didn't get to play them growing up. If you're someone like me who's always been curious about the games that came before what you play now or if you grew up loving these games, it's probably something you want to pick up. For $80, it's not cheap, but for 42 games, it's a decent deal. [GREEN HILL ZONE PLAYING] 

Sega Genesis Mini: The Best Console Remake On The Market

Following in the retro console trend footsteps of Nintendo and Sony, the Sega Genesis delivers on near perfect emulation and a huge collection of games.

Balancing The Ledger

[MUSIC PLAYING] Welcome to Balancing the Ledger, where we hash out the latest news as it relates to cryptocurrencies, blockchain, fintech and beyond. I'm Robert Hackett. I'm Jen Wieczner. And today we're joined by Andrew Nusca, who is our L.A. bureau chief at Fortune, also our digital editor. Thanks for having me, guys. Let's start off by talking about Facebook. Everybody is bashing Facebook right now. They're under a lot of heat, a lot of pressure from customers and from regulators. What's going on? There have been a series of reports at this point about this company called Cambridge Analytica. And it's a very technical situation. But in essence, it involves data going through Facebook's network, and whether or not it should have been used for nefarious purposes, I suppose you could say. And it's really a bad look for the company, because the company has kind of been very insistent that it didn't have a problem. And now it clearly has a major problem. And one of the great things about blockchain that people are hyping up, they say, oh, this is an opportunity for people to take control of their data again. Jen, do you see an opportunity for blockchain to kind of pose an alternative to Facebook? Absolutely. Yeah. There's a number of companies that are saying now, well, if you could only keep control of your data with blockchain technology, then this is a way that you wouldn't have to give it over to companies like Facebook, which are centralized entities, which is exactly what blockchain was invented for to get around-- blockchain being a decentralized ledger, where you could potentially keep your own records and not have to entrust it to some of these companies that have proven time and time again that they cannot be trusted with your data. But that's kind of a difficult thing here, to get a bunch of users on board with a new technology. We're all on Facebook. Our parents are there. They've got-- The world is on Facebook. They've got billions of users. Yeah. I don't even know what Mark Zuckerberg's mission statement is at this point. It's probably something related to damage control. But it seems like it's going to be difficult to get people to move on to some kind of blockchain-based alternative. I think right now there's definitely a groundswell of people who want something else. I'm sure you've both seen folks saying, I'm going to delete Facebook or get off of it or stop using it, or some-- Elon Musk, we've seen. The WhatsApp founder, Brian Acton. That's right. That's right. And there's something there. I don't know if it's actually going to happen. But there's something there. But here's the problem. That's kind of at odds with Facebook's varied business model. Facebook is, whether they say it or not, a media company. And setting aside the fake news problem and the content idea, they're a media company in the sense that they sell against advertising. They're selling our content against advertising. And if we keep our data, then they can't easily target. It restricts their ability to do all of the things that make them money. Why would they do this? Well, there are some companies actually that are now trying to do just that. They're targeting the advertising space. For example, there's a blockchain company called Shopin, that's working with companies like Facebook, but mostly for retailers, where you would actually keep control of your own data. So you wouldn't have to stop shopping or using the companies that you like, but at the same time, you would be able to take control of your data, whereas also giving it to those companies so they could do their targeting. It just-- they would not actually own your data and then be able to give it away freely. So I think there's potential value in that. Yeah. That could work. I mean, I think that the thing that's very clear is not so much that we don't have control over our data, because Facebook does make a lot of that possible, it's just impossible to find, but that we don't know what data is out there, and what-- we don't feel like we have a good sense of it. That seems to be the bigger problem to me. Based on advertising, let's segue into some big news in the cryptocurrency world, which is all of these big publishing platforms are banning cryptocurrency ads. It actually started with Facebook earlier this year, Alphabet followed suit. And now this week we have Twitter jumping on board and saying no to initial coin offering ads. Jen, why should they get rid of these advertisements? Well, I think it's a long time coming. I mean, we've actually seen not just questionable ads where they're marketing ICOs that may be illegal and other products and trying to take advantage of consumers. But often, they're actually phishing scams, which we've seen, where they're actually doing spoofs, making it look like these are ads for products that consumers are actually searching for in the cryptocurrency space, that then turn out to be malicious sites that suck up their data and take their money. So this is not just a problem with spam. It's actually a problem with scams and consumers getting taken advantage of. Yeah. That's a great point. Lots of the thought leaders in the cryptocurrency world, like Vitalik Buterin, the creator of Etherium. Somebody will tweet under him and say, hey, I'm giving away free ether. Send your address this way. But it's a scammer. It's somebody who's posing as him trying to dupe people into sending their own bitcoin that way, or ether. You don't want to take candy from a stranger. And you also don't want to take crypto. Exactly. Exactly. So this advertising thing, there have been ads following me around the web. I know this, like, crypto genius reveals the next bitcoin. Have you seen these? I haven't. Have you gotten these? I haven't. But you guys are further in, I suspect, than I am. You must have a better ad blocker than we do. Yeah. Seriously. Look, I step back on these a little bit, though. I cringe because it's like, OK, do we really want to get rid of the entire category-- alcohol, tobacco, firearms, and cryptocurrency? These are the things that plague our society? We certainly don't ban other kind of financial instrument ads. Well, speaking of banning, there's also now this issue where on the very blockchain itself could be some illegal material, such as child pornography, such that if you actually own a copy of the blockchain, which as many people do if you're mining it, if you're using it, you keep a copy of this on hard drive, that could be illegal. Yeah. So some researchers recently came out with a paper in a science journal. And they said that actually, yeah, it could be illegal to own a copy of the blockchain. The blockchain's very premise is to be distributed, owned by lots of different people out in the public. But you've got some nefarious actors who are embedding terrible things, like child abuse imagery inside of it. In my opinion, I think that the way that stuff is encoded in data, it's not like it's actually the image itself. So I think that there is-- you could parse that point. That's true. You'd have to actually make the decision to know it was child pornography and click on it in order to actually download the image. Otherwise, it's just encrypted material that's just on this blockchain, but you're not actually-- it's not actually visible to you. And you'd have to actually intentionally see it if you wanted it to, which is a different thing. Because I assume most people who are using the blockchain technology are not actually looking to see that type of material. And this might be an opportunity for the law to start catching up. Because I'm no legal expert here. But I recall that it's really around possession. So if it's merely possession, that's kind of a challenge in that circumstance that we're talking about here. And obviously, you wouldn't blame Verizon or AT&T or your internet service provider just because they have that kind of material passing through their tubes, their wires. Do we really want that, too? I agree, yeah, intent is a huge thing here, but the technology is just unprecedented. Let's take a turn and talk about a story that you recently wrote about-- Sure. --college students who are using their loans to buy cryptocurrencies. Oh, my gosh. Yeah. Tell us what's going on here. This is a silly little thing, but it's kind of amazing. Because I have college loans, and I couldn't fathom doing this. But this is before my time. There is a small study that was done-- not a large one, not a scientific one-- basically asking students if they had been using any of their student loan money of any kind to buy cryptocurrencies. Now, of course, you shouldn't be doing this to begin with, because your student loan money should be used for educational purposes by definition. It seems like that's part of the premise of taking a student loan out. Well, OK, Sure. If you have a crypto-- They're calling it living expenses or something? --class, yeah. Sure. I mean pizza, crypto-- Blockchain 101. --books, bitcoin. But what I don't-- what's amazing. So it was about one in five students were doing this in this very small study. Again, setting aside the moral, or it's certainly not a legal problem, it's kind of amazing the notion of taking something that is a very, very solid financial instrument, a student loan, and putting that money into vault. I mean, it's leverage. You're learning about leverage right there. And we also saw people buy mortgages with crypto, or they were taking out mortgages in order to buy cryptocurrency. Which just seems so safe. That's what you want to do with your home is invest in probably the most volatile thing you can invest in right now. It's a crazy thing. Obviously, somebody is going to come out ahead and say that they won. But so many people are going to come out behind, especially now with the way the market's going. I really hope that people are not doing this in earnest and putting their loans up for Bitcoin and whatever else. You just have to remember, you shouldn't ever invest more than you are willing to lose. People like Vitalik Buterin, everyone else who's expert on this. People know because they have lost everything. The thing about a loan, you've got to pay it back. Right. Right. Right. Well, that's all we have time for. Andrew, thank you for joining us. Thanks for having me. Signing off, I'm Robert Hackett. I'm Jen Wieczner. And we'll see you next time. [MUSIC PLAYING] 

Balancing The Ledger: Facebook, ICO Ad Banning, and Child Pornography on the Blockchain

The latest in fintech, crypto and blockchain news.

Find out what happens when CEOs, founders, and other business leaders get out of the office and into the products and services their companies make, whether it’s breakfast with a cereal CEO or sampling sweets with a candy shop founder

Out of the Office

 Steve, thank you for having breakfast with me today. [MUSIC PLAYING] So I was going to ask you, what your favorite cereal was, but can you give me your top three. That would be-- I have four kids, so giving like I wouldn't tell you what my top three, four favorite kids are. Do you have a favorite mascot? Now that one, that's a little bit the same question, but I have to say Tony. Tony? Tony the Tiger. Can you give me your best impression? There great. Rice Krispies or Cocoa Krispies. Rice Krispies, I think. Why? Because we do Rice Krispies treats as well and we sell lots and lots of those. The treats? Yes. Breakfast or dessert? Both. Both. Why not? For breakfast. Yeah, and lunch. [MUSIC PLAYING] You playing three on three versus Snap, Crackle and Pop, what other two teammates do you choose? Tony the Tiger and Toucan Sam. Because Tony can box out anybody and Toucan can fly straight up to the rim. And what are you doing? Watching. What are your thoughts on having breakfast for dinner? Absolutely. Do you do that often? Yes, very much. Is there a breakfast food you just can't stand? Anything from any my competitors. You're only allowed one Pop Tart flavor for the rest of your life. What is it? Chocolate. Thank you, Steve. Now let's eat. All right. 

Out Of the Office: What Kellogg's CEO Steve Cahillane Really Thinks About Breakfast

Health

And whether or not it's OK to eat it for dinner.

What is cryptocurrency? Are we headed for another crash? Get answers to where money is going, and where it might take you, in the days to come

The Future of Money

 [MUSIC PLAYING] I don't know what the future of bitcoin is. I have no idea. Anybody else think they know? Sorry. A future for bitcoins. I'm so torn. No one knows exactly what the future of bitcoin is, but one thing that's for certain is it's not going away. The technology is out in the wild and is being learned from and modified, and in some incarnation, the problems that it solves and the things that people need out of it will stick around. It's hard to say, right? I mean, there's a lot of competition coming from other cryptocurrencies. Some people see bitcoin as a stored value. Everyone should be buying it to hold it to prevent against a global meltdown of government. Other people believe that bitcoins need to be a cryptocurrency, peer to peer payments, et cetera. So it was a different view on it. I think it will end up being a better way to store value in countries where the currency is, like, pretty volatile. Bitcoin has all the same attributes as gold-- it's finite in supply, it's scarce, it's divisible, it can't be counterfeit. But what bitcoin lacks in history and, arguably, cultural significance, it more than makes up in accessibility and utility. Bitcoin is creating a whole new set of federal rails, you can move money around the world, you can make micro payments. Anybody who has a mobile device can now save money, and that's super, super powerful. [MUSIC PLAYING] I look at it as the genie is out of the bottle. And what we see is not just that genie being blockchain or crypto, but the fact that what we previously thought of as only in the domain of kind of sovereign nation states like money, now, via technology and software, we can do and accomplish in a decentralized way. I think blockchain is definitely an interesting processing model. Coins and currencies have to be issued by central banks, that's what I believe, to be controlled by governments. You know, if not controlled by an entity, it's hard to regulate it and it's hard to avoid any money laundering finding a way to manage this. It's important. Blockchain can help there, but bitcoin is-- I don't think it has a long run. The role of bitcoin is growing as a non-sovereign, digitally stored value that is private and uncensorable. And I think that's highly compelling for many, many people all around the world. My expectation would be that it will grow both in terms of its value and it will grow in terms of its ultimate utility. [MUSIC PLAYING] 

The Future of Bitcoin According to 8 Executives

Finance

Some are bullish, while others are bearish.

Fortune tech staffers debate whether certain tech trends will take off or fall flat

Tech Debate

[MUSIC PLAYING] Amazon has released a new product. It's called the Fire TV Stick. It's a Google Chromecast competitor. And it's awfully cheap. Erin, do we need another piece of Amazon hardware? I think this is going to be successful, first of all, because it is inexpensive, even cheaper for Prime members, and it competes with Google Chromecast-- Sure. --which has already taken away a lot of market share from the existing competitors, like Roku or Apple TV. The problem is that Amazon has a very mixed track record with hardware. The Kindle has been a huge success. The Amazon Fire Phone, not so much. Terrible. Probably one of the biggest failures that they've had as a product launch. The Amazon Fire TV, the jury's still out. It's still a little bit too early to say. But I think that it's looking good. They've doubled the amount of apps on there. And they seem to be eating away at market share. So this is just an extension of that. See, the thing that's interesting about this whole kind of war that's going on over kind of television is that it's not about the TV, or the dongles, or anything at all. It's really about the content ecosystem. So Amazon clearly wants you to buy into their Prime membership. It costs money to join. But then you can get streaming as well as some pretty fast shipping. They're battling against Google and Apple in this regard and, of course, a little bit Roku. Right. Right. But here's the problem with that. The problem is that they're entering a dying, like, industry. You know, there's already 20 million Rokus out there. People aren't going to buy another device here. They're just going to get smart TVs, and Amazon is already late to that game. But these content ecosystems aren't dying. So, OK, they'll move a lot of these Fire TV Sticks and just like Google moved a lot of Chromecast. Right. It's a short-term game but they'll win. Exactly. But the important thing is the ecosystem. So no matter what piece of hardware goes out, they'll get you to buy in and have an account with them. And that's the important thing perhaps. For one show that always brings the heat, come to Fortune.com for more tech debate. [MUSIC PLAYING]

Tech Debate: Amazon Fire TV Stick

In-depth videos exploring the issues and stories from the pages of Fortune Magazine, providing additional scope and detail on some of our most fascinating deep-dive stories

Fortune Magazine Features

[MUSIC PLAYING] It was supposed to be the biggest public offering of all time, finally giving global investors a chance to make money on Saudi Arabia's vast oil reserves. But now because of a mix of geopolitics and royal intrigue, the IPO of Saudi Aramco, the national oil company of Saudi Arabia and by far the biggest energy company in the world, may be the IPO that never was. But we're getting ahead of ourselves. Let's go back to April 25, 2016. [NON-ENGLISH SPEECH] [NON-ENGLISH SPEECH] This is Deputy Crown Prince Mohammed bin Salman. In April 2016, he unveiled his plan for the economic future of Saudi Arabia, Vision 2030. And while there's a lot that the country hopes to accomplish by 2030, most of these hopes hinge on the country putting 5% of Saudi Aramco on the public market. That's right, when we said the IPO would be the largest in history, that's only with the company putting 5% of itself up for sale. Wall Street analysts estimate Aramco's total market value is somewhere between $1 trillion and $1.5 trillion. And 5% of that would really help the country's economic outlook. The crash in crude oil prices that started in 2014 has taken a toll on Saudi Arabia. Oil accounts for roughly 97% of the country's export earnings. The sale of 5% of Saudi Aramco would offer a quick injection of revenue for the government to help diversify the economy. Right now the country's economic future is entwined with oil's. Vision 2030 is an attempt to change that. But the IPO fought an uphill battle from the start. Saudi Aramco currently only has just one stakeholder, the Saudi king. Until now the company's assets have been a black box. And many suggest that the identification of a market value is not in the royals' best interest. Saudi Arabia has maintained for decades that it has 260.8 billion barrels of recoverable oil reserves. But that number has never fluctuated. Any changes would impact the valuation and maybe not favorably. And then there are problems for potential shareholders. It could be risky to take on only a portion of a 5% minority stake in a company largely reporting to the needs of the Saudi government. But it seems as though an alternative to the IPO has gained momentum. The Financial Times reports that the oil mammoth may be considering a private share sale instead. The buyers? Analysts' best bet is China. And the deal makes sense. Saudi Aramco wouldn't need to publicly reveal anything, and China would have a new tap. Saudi Aramco, for its part, still insists the IPO process remains on track. But will letting in the light with an IPO really be worth it? 

Unraveling the World's Largest IPO

Energy

Saudi Aramco, the world's biggest energy company, is headed for an IPO. But will the plan go off without a hitch?