♪ carol: welcome to "bloomberg businessweek." jason: we are here at harvard business school in boston. this special edition of bloomberg businessweek be school. --b-school. carol: trade tensions ahead of next week's g20 conference.

great to have you here. great to be here. we are going to get into that in a moment. let us talk about the pride issue. there are a bunch of stories. >> here we are almost 50 years after stonewall. that anniversary is coming up. we are the middle of pride month you -- month. we thought this was the moment to market that moment with this cover and package of stories. jason: how do you choose the stories? >> what we wanted to look at was a consumer element but also how companies and also elements of how the workplace and courts are impacting a lot of this. it is a little bit of a smorgasbord and that was the intent because there is so much we could possibly say on this topic. carol: as the reporting shows, there is still a lot of legal pushback when it comes to the lgbtq community. joel: there is still some

supreme court cases that will be heard that could fundamentally change the nature of gay rights in america. still. jason: joel weber, stick with us because you will be back with us to talk to us about where we are in harvard. carol: staying with this week's special pride week section, walmart is the country's largest retailer and biggest employer it has long been an outside face of change. jason: and a shift towards healthier food, and the company's decision to launch a a new line with lesbian talk show host, ellen degeneres. >> this is a big change from two years ago. she came out in 1997. the cover story on "time." all of a sudden, her show on tv a year later, canceled. she could not get work for three years. she did not get work from a big sponsor until amex in 2004.

america had a long struggle with this notion of incorporating lgbt into the mainstream. and walmart as well had a long struggle with this. this is not target. walmart went through and had to deal with the national gay and lesbian chamber of commerce in 2005 and so many of its employees and conservative groups griped about it, that they then dumped that and said we are no longer going to get involved in things that are controversial. they did not support the large corporations that pushed the court to get gay marriage approved. now, america has changed and walmart followed. jason: part of the reason they were able to do that was ellen and you go through the numbers, she is insanely popular. >> she is on tv every day and one day, twice.

she is a good person. -- a good person for brands. she is one of those things that now transcends her individual background. she is a brand in and of herself. she is the oprah of today. she is as family-friendly as you can get. carol: you're talking about the cycle for ellen. popular, not popular, and popular again as americans became more comfortable with homosexuality and the lgbtq community. here we are at another juncture where we are questioning legally that community is under pressure again. >> the supreme court now has three cases pending for next session that deal with the idea of employment rights or employment protections for lgbtq employees. by now, you can now be fired for

being lgbt in a little more than half the states. there are no legal protections. i think a lot of people think that because so much has happened in the last 20 years with the court upholding the right for gay sex and marriage equality going through but instead, in the employment arena, you can discriminate legally in a lot of places and a lot of places do. the court will have to decide that and we don't know how that will work out and play because the court is more conservative now than it was. the argument before the court is whether the 1964 civil rights act covers people because of sexual orientation. it was not written that way. it has been interpreted in that way by some courts but not others. carol: you can find that and more in this week's special pride business section. including a special riveting

interview and a haven for the lgbtq community in an unlikely place, china. jason: a new cryptocurrency. you and it has a trust problem. carol: and our special trip to the harvard business school. we sit down with a harvard alum. this is "bloomberg businessweek." ♪

carol: welcome back to "bloomberg businessweek,"

i'm carol massar. jason: and i'm jason kelly. listen to bloomberg businessweek everyday from 2:00-5:00 wall street time. catch up on our daily show and listen and subscribe to our podcast. carol: and you can find us online at businessweek.com and our mobile app. we are here at harvard business school in boston. jason: first, facebook this week unveiled plans for a new cryptocurrency. the latest developments are undoubtedly being watched by regulators wary of the social network's dominance. we spoke with sheryl sandberg in france. >> we know we have a lot of people to work with. this is a heavily regulated space. we need to talk to people and that is what we are doing. we are then going to launch. carol: we got more from joel wiesenthal who keeps a measured

watch on the cryptocurrency world. joel: it is incredibly ambitious. if it were to gain traction, it could be a potential game changer. the closest analogy i think of is not only existing money but the android operating system and google essentially becoming a de facto platform for so much of the world. i think libra wants to do that for money. if you think of the different networks that exist, payment networks around the world, they are not interoperable. the flipside is it is going to be incredibly hard. even if they could get the execution right to and the partners right and the product is easy, dealing with financial regulations, the most tightly regulated aspect of any industry in any country around the world, and somehow navigate all of those regulatory bodies, it will be so difficult.

i wonder if it'll even get off the ground. jason: let us go back one step. what does it look like to me as a facebook user if i wanted to pay carol for a pez dispenser? joel: there will be a new currency called the libra. it will be pegged to a basket, heavily weighted towards the euro, the dollar, the yen and the pound. the world's most stable currencies. in theory, if you wanted to start using this currency, you could go to an exchange and there would be regulated exchanges that comply with local regulations. you could put in $100 and get back x number of libra. you might do it through the facebook messaging app. you could do it in theory from a contactless payment from your phone. they do not anticipate normal

day-to-day use in countries because most payment systems work fine. if the two of you were in different countries, it is not so easy to send someone money. there are all kinds of tricky aspects. if you wanted to do something more complicated like send someone remittances from a developed economy to an emerging market, it gets more complicated. if you wanted to set up remittances on a regular basis or something that automatically takes out part of your paycheck, it gets even more complicated. i think they wanted to build a platform so others would build the apps to make it easier. carol: it has to have a consistent value so it would be considered worthy for people to use it. joel: the volatility of existing cryptocurrency renders them

unusable for these types of purposes, which is why we mostly see them for speculative purposes. black markets. the grey market. things you're not supposed to do under the law. and you accept the volatility risk. they argue that the system in which the libra is backed up by currency held in a bank will make it unvolatile and both the sender and receiver can be roughly certain of the value. carol: several stories out of silicon valley including how facebook and google are among companies that are picking up experts in narrow science. jason: do not call me a birdbrain. here is our editor on bird brains in silicon valley and more. >> animals have been studied by

neuroscientists, but this science has been on the edge of the academic mainstream has become popular. tech companies all over the world, but especially silicon valley, are interested in understanding how brains work and applying that to ai and other futuristic things. carol: and voice recognition software. max: if you are trying to make siri work better, this gets into complicated stuff but ai basically tries to figure out how the human brain works and then mimic that in software. to the extent that we are able know me and to understand how humans form connections, in theory, that could help software an will make connections and and allow siri to understand what you are saying when you mumble. jason: we thought this would end up in a script of "silicon valley." you are a great chronicler of

the valley, how does this fit in? max: the whole idea of ai has been hot for a long time. i would say one of the easier pieces to parody of this is the human brain interface. scientists and doctors have worked on this because if you were to create a brain interface, you could help people with amputations. i jason: from neuroscientists to rock 'n roll, a hard pivot but this is a first-person story. -- fascinating, first-person story. a cool element online. max: vernon silver is the foremost led zeppelin copyright correspondence. he has written a number of memorable stories about a with

-- dispute with led zeppelin over "stairway to heaven." he stumbled on a quirk of u.s. copyright law which is full of these weird quirks which is that before 1978, a piece of music to have a copyright had to have the sheet music filed with the u.s. copyright office. and if it did not, in theory, according to some legal interpretations, that would mean that a lot of guitar solos which were improvised where the record label did not file a deposit copy with the government are basically open season. vernon went to the copyright office and started pulling all of these well-known, iconic pieces of music including from bruce springsteen, leonard skynyrd and started putting together this frankensong as a demonstration of the absurdity of u.s. copyright law.

and we have this amazing will on bloomberg businessweek's website which will allow you the reader to assemble your own frankensong with public domain riffs. jason: some of the best-known parts of the best-known songs are free game. max: exactly. this may get worked out in the courts. this led zeppelin suit is still playing out. if a judge were to say that there is a piece of recorded music that could get a copyright. just having the recorded music is not enough. carol: coming up, trade talks. jason: and more from our visit to the harvard business school. we meet with jonathan nelson. ♪ jason: welcome back to

"bloomberg businessweek." carol: you can listen to us on the radio on sirius xm channel 119. am 11 three oh in new york, one 06.1 in boston, 99.1 fm in washington, d.c. jason: in the bay area, and london and through the bloomberg business app. turning to a topic we cannot stay away from, trade. president trump and chinese president xi are scheduled to sit down. carol: they will have an extended meeting at the g20 summit next week. we have a preview of the meeting. shawn: this is a big deal. the leaders of the world's two largest economies to hash out their differences. we do not know how this will go.

there is a possibility, a best case scenario that they agree to a bit of a truce and more talks. no one thinks we will get a bigger deal but there is also, and this is not a small possibility, that the leaders meet, they don't agree on anything, and we go into what is starting to look like an all-out economic war between the world's two leading economies. a pretty big deal. carol: i love this line in your story -- president trump has the gun barrels pointed at china. talk about setting the table here. we have seen a bunch of tweets this past week. he is aiming at so many different people going into this meeting. shawn: i tried to sit down and count how many of the g20 that

donald trump was in a possible trade war with and i came up with seven or eight including india and mexico. the tariff threat is still there in terms of the immigration agreement with mexico. the president said after 45 days, if he does not see progress, he will go ahead there. india slapped retaliatory tariffs on the u.s. after trump decided to take them off a preferential trade list they have been on for a long, long time. the big deal besides china hanging over the horizon is the threat of auto tariffs. the president has already ruled that imported cars, for example your subarus and bmws, are a threat to national security and the question is, what will he do about it?

he really likes the idea of hitting the eu and japan with tariffs, which no one in the auto industry can be said likes and no one outside of the u.s. thinks would be a good idea for the global economy. we are already seeing a global growth slowing and these gun barrels he has aimed everywhere are only contributing to the uncertainty and helping to put a damper on growth. jason: i feel you were one of the first people who told us or described this as essentially weaponizing trade in many ways. it is happening against a backdrop we should point out of the president of the united states wanting to get another four years in the white house. he was also launching that this week in florida. this is a key political talking point which i have to think informs the way he is going to osaka. shawn: it is not just weaponizing trade anymore.

if you look at his comments about the european central bank and mario draghi, essentially that mario draghi is laying out the case for further stimulus to try to help boost the european economy which looks like it is slowing down -- you are talking about weaponizing monetary policy. weaponizing the dollar. his main complaint is about the euro there. donald trump has a conception that he has grabbed that national security is about more simply than the weapons of war. that it is about economic security. jason: someone familiar with washington and geopolitics, that is four-star general stanley mcchrystal. >> i spoke with him about today's tumultuous times and one

of his own, and that is a rolling stone article that ended his career. >> it came out at two in the morning. it was entitled the runaway general. you know you have a problem. there had been tension between the defense department and the white house. not personal. i got along well with president obama. there was tension over the strategy. this thing explodes and i am in afghanistan and as soon as it came out, i knew there was a problem. i was asked to fly back to the united states to speak to the secretary of defense. but still, as i get on the plane for the 17 hour flight, my 86-year-old father in florida, i know he is seeing the news cycle every day. people who do not know what is going on are opining on the media about it. my son in college is seeing it and then my wife of 34 years is seeing it. as we are flying back, 17 hour flight time and i get an email

from three privates. and privates do not normally write to four-star generals. i had met them and gone on an operation with them and we had a special relationship. they said, we heard about this article and if you let that reporter around and these are things they were said, we don't think that was very smart. i was reading this email saying -- whoa. they say however, general, we , know you and love you and no matter what happens, don't forget that. you get that from three privates. to unitedat -- you go states, he asks what is going on, and i said i did not know what was going on. i didn't have the background. i just knew there was a conflagration. carol: had you read the article by this time?

>> yes. i did not think it was accurate. that didn't matter. the president has a problem from my team and it is my responsibility. not his. i prepared my resignation and i offered it to president obama. i said, if you want me to go back and keep command, i will do that. if you want to give me a dressing down, we can do that. whatever is best for the nation. he was an incredible gentleman. he said i will accept it. we had a short conversation. here is the point. i walked out of that room. i had been four years at west point. born in an army hospital. everything in my life had been military. 34 years as an officer and in an instant it is done. carol: you can check out that full conversation. coming up, more from our day at harvard business school. we zero in on new data on business schools. jason: and we have more from thomas h lee partners.

this is bloomberg. ♪

♪ jason: welcome back to "bloomberg businesswek." i'm jason kelly. carol: still ahead, harvard business school. jason: we sit down with an alumni as well as jonathan nelson, founder and ceo of providence equity. carol: first up, new data from surveys out this week. jason: and joel weber is back in boston with more on that.

never really resting. >> absolutely. this is a franchise for us and one we never stop talking about. that is what makes this data so interesting. instead of looking at a ranking like we usually do, this looks at student debt. we surveyed a lot of our respondents about how much that they have incurred. most of the conversations are the undergrad student debt, so this takes it to a different level. carol: the average amount is what? >> six figures. this brings up the tension. we know how much students and graduates are carrying and how much longer it takes to pay that off. the return of investment on education is really what this becomes about. how much is this education actually worth? jason: and ultimately, for many, it is a lot. a career maker, a game changer.

>> and what horizon should you use to evaluate this? the moment you walk out of school is a big number, but your earning potential will be greatly expanded. carol: tell us about some of the other coverage you guys did. >> the package continues to evolve as a figure out the best ways to slice and dice it and talk to respondents. i think the student debt one is the tip of the iceberg. it really reveals a concern that everyone has as they grapple with the next decision they're going to have to make in their life. again, it goes back to the idea of is this going to be the best long-term investment i can possibly make? jason: thank you so much. while we are at harvard, we are catching up with a bunch of prominent alumni. carol: and that includes boston-based bain capital with $105 billion in assets under

management. john coddington is a comanager and is hoping to put that money to work. >> health care is a big area for us. we invest early, late, and through credit funds. health care has always been a big part of our strategy. health care itself, we are going deeper and deeper. life sciences, for example. we want to be in the inflection capital business. we did a strategic relationship with pfizer. we took their entire platform, carved out, put it into a new company, and are building a company that will be a leading cms player. you don't see private equity traditionally do that, but we have those capabilities. carol: you have that depth of knowledge. >> and scale of capital. capability to understand, to

build companies, and to deploy large-scale capital. jason: what are you avoiding right now? >> anything high-priced. carol: where are you finding things most high-priced? >> we have been of the view that ever since recovery, where a lot of money has gone into stability kind of deals, deals that are low growth, that do not have continuity, they are stable. a lot of of people are going into those safe haven and paying for that stability, leveraging it to higher and higher levels every year. in that perspective, we think there is a risk for stable assets that have been overpriced because of the liquidity and credit support it got from central banks. carol: what are other areas you find interesting? >> we have a thesis on disruptive consumer brands.

canada goose is the most famous, but we have done several stories where we take disruptors who are appealing to a new type of consumer who are trying to undermine the traditional methods. we have disruptive beauty brands we brought to market. carol: botox does well around the world, so i hear. >> extremely well in korea. even virgin cruises is intended to be disruptive. it is doing it differently. it has an appeal to a millennial customer, not just the older crowd. jason: is it because they are better at going direct? what is the secret to disruption? >> it is much more direct to in consumer, much more consumer insights around micro-behaviors. will the aggregation of everybody wanting a particular

toilet paper is very different today. you have a lot of micro grants that are appealing to some segments of the population. jason: as we heard from joel weber, new data from businessweek shows top u.s. b-school students are piling on more debt. carol: we sat down to speak about the future of the mba. >> it is the flagship. but we also have thousands of executives to hone their leadership skills. we have a program that change the next generation of faculty. we have a publishing arm which takes ideas from outside of the world and our newest venture, harvard business school online. carol: i was actually checking that out. it is amazing. >> and we are trying our best to make sure that is just as

engaging as our classrooms. jason: when you think about what happens after they leave here, you work very closely. a lot people make a big investment come here in some fashion, whether as an executive or learning online. how has that changed and what are you seeing in that evolution? >> the most interesting thing i see among students is that they are interested in purpose in their careers. it is not all about the paycheck. the paycheck is important, but they are trying to have both purpose and a decent paycheck. that changes how they think about their careers. carol: you have got a story online talking about student debt, specifically mba candidates. i'm curious about the conversations you're having here in terms of return on investment, where students are looking at the amount of debt

they have to take on the go to a great institution. tell me what you guys are talking about. >> our students asked questions about returns on the investment, and we like that they have had good reasons to question it. tuition costs have risen over time. they also have to take off two years out of the workforce to come here. so we have to make every day count. and we have done a few things to try and make sure we have the mba program be accessible to anyone with the talent and drive to be admitted. it is important we bring in anyone who has that talent. we have generous financial aid. about half of our students have financial aid. the typical packages $80,000 the two years they are here. the revenue of the mba program is about $140 million.

we give 40 million back in financial aid. the other thing we have done is we have frozen the tuition and increased financial aid to make sure the mba is affordable and accessible. in particular, to get the great diversity we need on our campus. jason: up next, we speak with some of harvard business school's most prominent alumni. carol: that includes the copresident of thomas h lee partners and the providence equity ceo and founder. jason: this is "bloomberg businesswek." ♪

jason: welcome back to "bloomberg businesswek." carol: join us for bloomberg businessweek every day on the radio from 2 p.m.-5 p.m. wall

street time. check out our podcasts at itunes, soundcloud and at bloomberg.com. jason: and find us online at businessweek.com and through our mobile app. carol: we are here at harvard business school. jason: another of the school's prominent alumnus class of 81 scott sperling, copresident of thomas h lee partners. they have an aggregate value of over $150 billion. scott: we have always been investors in growth-oriented companies. if you go back through our history, we have looked through sectors that have growth. we try to five sectors with good, long-term secular growth drivers. we try to invest to build them into a much better enterprise. we are building buying companies that have proven to be cash flow generative and bring our own expertise to bear so we can

improve all of the key business processes of these companies in ways that allow them to take market share to grow revenue rapidly and to be more efficient in generating various metrics of profitability. jason: given everything going on in the world, are you a buyer or seller? scott: both. net is hard to say. depending on the quarter, we we have been enourmous sellers. enormous sellers. we have acquired a series of companies in that space. we think that is a 20 year growth trend. it has been a very lucrative area for us in terms of returns. fin tech has been an area we

have been in for a long time. carol: having said that, what do you think about facebook? scott: i have never been that big of a believer want to be frank, in cryptocurrency. largely seen as an investment vehicle then a mode of currency exchange. i think that is the differentiation they are trying to make, we will see if it works. i am old-fashioned. i always believed sovereigns should be the ones who issue currency. but what do i know? jason: what is it like raising money out there. what are you hearing from investors in general? scott: private equity has been a strong performer. we have all seen the data. it has outperformed asset classes. it outperforms in periods of extreme economic difficulty. that has increased the popularity of private equity over the course of the last decade and 4-5 years.

carol: this next guest tends to keep a low profile. business school alum jonathan nelson, ceo and founder of providence equity. jason: he helped launched hulu, the yes network, and create t-mobile. johnathan: we started in distribution. if you think of media, there is distribution, satellite and cable television, now telco's and streaming. you can have a conversation

without thinking about direct to consumer. and then we moved into content. we are still in both. distribution, which today is mobile and cable. we were in satellite. and then in content. content, for us, the white-hot center of valuable content is not just tv, and those definitions are stretched. is sports. sports is most valuable live which is interesting because you cannot time shifted. the value of sports dips a dramatically when you do not areas when it is played. many have tried to go into a cocoon when we couldn't watch sports. you don't look at your phone typically. i don't want to know the score. even if you succeed in isolating yourself the experience is not , the same. you know that all of the fans you share a passion with already know the answer. and so it is devalued. we love that about sports because of its power, it's passion. it is one of the antidotes to piracy.

just like live theater, you can pirate it and it is not worth anything. sports is like that. jason: you have invested in interesting ways. iron man, diving certifications. so what is next? how do you continue this investment thesis? jonathan: it is unending. there is no no such thing as figuring out what is around the corner. so that has been an unending exercise. we have been pretty good about, but you can't stand still. by the way, i can't say what is right around the corner, we are working on it now. carol: you could, but you know. jonathan: i think that this notion that media will belong to

only the largest companies, no, what is true and is often confused with that is that franchise, what it takes to be of scale has increased. but there is plenty of room for disruptors. if you ask a ceo, the leadership will tell you privately that they feel threatened as they have never been before. franchises are fragile. that is good news for folks like us who are starting companies or investing in small companies and need to compete with behemoths. sometimes, it is mutualistic, it works well together. that is true in content and distribution for us. it is true even in new media. carol: also joining us on site -- jason: hbs alumni class of 2009. she is head of asset management

in blackstone. carol: and during the obama administration, she oversaw taxpayer investment in chrysler. >> we think of ourselves as blackstone's opportunistic investment platform. the fund was founded in 2011 on the heels of the financial crisis to take care of an imbalance in the supply and demand of certain assets. banks had a lot of non-core assets they were looking to sell. they had been eliminated or heavily regulated out following dodd-frank and the volcker rule. it was one of our large lps and saw a interesting and unique opportunity to take advantage of that dislocation. carol: what are the opportunities for you folks? >> we are seeing a number of market dislocations across the

background. one of the interesting things is that we have a flexible investment mandate. we can invest in any industry or any part of the capital structure. we are finding unique opportunities. not looking at common equity or debt, but looking at preferred or other heavily structured securities. carol: does it matter the industry? >> across the board. jason: one of the flexibility to flexibilities you have is these partnerships with investors. >> slightly different than the traditional equity funds, but you are right. we can hold for a longer duration, we can do things that are slightly different, one of the benefits. carol: i think about how much time we talk about these big macro issues, whether it is trade, the fed, how does that factor into your discussions?

>> absolutely. one of the challenges in having a portfolio as large as the one we have and as diverse as it is, we touch a number of different geographies. everything from argentina to indonesia to new zealand. carol: busy. >> quite busy. so we are always monitoring a number of different factors. all of those will impact our existing portfolio but also create opportunities for us. carol: now about something if you are doing a little bit of cooking. jason: next up, a summer food special in this week's pursuits section. carol: a little bit of intrigue there. this is "bloomberg businesswek." ♪ carol: welcome back to

"bloomberg businesswek." jason: you can also listen to us on the radio on sirius xm channel 119. in new york, in boston, washington, dc -- carol: in the bay area, in london, and of course, on the bloomberg business app. a summer food special. jason: our editor joined us on the rise of superfood and a special powder that is a more powerful hero than most. >> super foods, that is a label that gets thrown around a lot. you can find a justification for everything from wine to ? chocolate. but there are some foods that are truly superfood. and this is like the best superhero in an avengers movie. carol: what is it? >> a powder that comes from a leafy bush growing in drought-resistant bushes. the himalayas a long time ago.

they have since grown it in sub-saharan africa, they are growing it in haiti. it is amazing, one of the few greens that is a complete protein in the way that meet and banks are -- meat and eggs are. it also has vitamins and is proved to be a good ingredient in beauty products. if you check some of the cool face bombs out there, even deodorant, you can find it. and it has the ability to bond the bacteria and purify water, which is also helpful. a superfood, truly. jason: why isn't it more widespread? >> it has been hiding in plain sight and health food stores. it is invariably sold as a powder. there has been a focus in new york on african food, and there is a really great african cafe uptown. they are putting it in a latte, for instance.

jason: what is the flavor? kate: it is like matcha or spurina. like matcha but more green. a private chef founded it at a farmers market in hollywood, so you are starting to see a fresh. the leaves look at tiny bit like spinach leaves. if you added to your diet or your smooth, you will feel great. -- your smoothie, you will feel great. carol: it is also helping the communities that produce it. kate: there is a company started by woman in the peace corps. the locals recommended it to her and she has used to empower communities. it is good in places where they cannot grow a lot of foods

because it is a diehard crop. it's solved a lot of problems. she brought it to haiti -- it solves a lot of problems. she brought it to haiti. carol: bloomberg businessweek is available on newsstands now. jason: what is your must-read? carol: a must listen and must watch. the interviews and the opportunities to be here at harvard business school, tapping into the professors, and their very elite alum. jason: i really like the takeout of the disney section and the story about ellen degeneres and walmart. how much has changed in a short amount of time. carol: a full 180. and you can find more stories on businessweek.com. jason: and check out our business week podcast. carol: more bloomberg television starts now. ♪ ♪

emily: i'm emily chang and this is the "best of bloomberg technology" where we bring you all our top interviews. slack makes its public debut but not by the usual path. and facebook reveals plans for its own cryptocurrency but lawmakers are pushing back. and we have an exclusive sit down with sheryl sandberg who responds to the controversy.