—Bloomberg by Bloomberg, 2019
At 8:30 a.m. London time on April 17, 2015, traders at Bloomberg Terminals around the world suddenly saw their normally hyperactive screens offer one alarming message—“CONNECTION LOST.” Across the globe, Bloomberg users groused and howled as the markets stalled. In Britain, officials in the government’s debt management office were so nervous about the sudden outage that they delayed a treasury bill auction worth more than $4 billion.1
It was as if some huge plug in the central Bloomberg socket had suddenly been dislodged, instantly shutting down a global network of 320,000 machines. Some traders took to Twitter—“If markets move, but there is no Bloomberg Machine operational to report it, does it make a sound?” asked one. Another reported, “Millions of traders are looking out the window for the first time in years.” And the Daily Mail speculated mischievously that the entire blackout was caused by a Coke spilled somewhere on one of the main Bloomberg servers.
Within about two hours, most of the terminals were back running after the Bloomberg company declared an “internal network issue” and began to reexamine the “multiple redundant systems,” which had failed one by one.2 The sudden loss of Bloomberg power had embarrassed the army of computer engineers at the company, but the global outage also sent out another blunt reminder of the Bloomberg hold on financial data, research, analytics, and news. In the years since 1982 when Mike Bloomberg and his team of smart, young techies created the Bloomberg machine, it had grown from a curiosity to a necessity. The Financial Times called it “the central nervous system of finance.”3 Institutional Investor described “a one-stop, perma-blinking information pleasure dome encompassing data, news, analytics and much much more—the financial product world’s answer to the Broadway show.”4
The reckoning also alerted a small army of hopeful competitors. For them, the Bloomberg Terminal was too big and too complex and far too expensive for the normal needs of finance. The “breach”— how some financiers had called reports about Bloomberg News reporters spying on terminal use in 2013—had already energized a group of bankers to look elsewhere. And any weakness in Bloomberg’s fortress would ignite talk of another potential “Bloomberg killer.”
Bloomberg liked to scoff at the latest competitor, but he was known for having such a competitive drive that his dismissals often sounded faintly hollow. He had always argued that the best defense against potential rivals was to keep moving. “As long as we continue to be driven by our forward-thinking culture, instead of looking over our shoulders and following what the competition is doing,” he said, “we’ll be fine.”5
Bloomberg, the salesman, could quickly list the reasons that his machine had survived and prevailed in the marketplace. Better data, better research, better customer service, better employees, better you name it. Plus, they kept going back to the customers to ask what they needed, what worked and what didn’t. But beyond that chest-thumping was a tough competitive heart. He showed it at his company when it became clear they needed to move fast to outpace some rival who had come up with a good idea. Outpace it or adapt it.
* * *
Thomson Reuters was causing the most dyspepsia at Bloomberg in 2014 after the established news organization linked up with a group of bankers who had created a financial chat service called Symphony. The group, Symphony Communication Services, which included Goldman Sachs, Bank of America, Bank of New York, BlackRock, Inc. Citigroup, Credit Suisse, JPMorgan Chase, and others, put up $66 million and6 went straight for one of the most popular parts of the Bloomberg system—the internal email. When a terminal user told a business associate to “Bloomberg me,” it was like a secret handshake among the power brokers in finance. If you had a Bloomberg system, the internal email provided contact with the 320,000 others who had enough money and probably clout to have a Bloomberg. This was not standard email, not Gmail with nearly a billion users worldwide. This was Bloomberg’s instant messaging for the top tier in global finance—or anybody with a $24,000 terminal.
The CEO of Symphony, David Gurle, later claimed that the firm didn’t actually want to kill off Bloomberg and its expensive email. They merely wanted to expand the messaging to thousands of workers beyond the corporate boardroom. Instead, he described it as moving from Bloomberg’s private, gated road to a superhighway that allowed more kinds of traffic (including young quants on motorcycles or bots, as robots were now called).7
But Bloomberg LP reacted in a surprising way to the Symphony challenge. Normally, to have any Bloomberg service you had to buy the big package, which included messaging. Bloomberg suddenly began selling the message service for $10 a month to other employees in a company that had already purchased the Bloomberg systems (but perhaps didn’t have a Bloomberg of their own).8
By late 2018, still another threat loomed. Blackstone, the investment behemoth, bought a majority stake in the massive Thomson Reuters data and news business. The move was quickly seen as setting up a mega-battle between Stephen Schwarzman, chairman and CEO of the Blackstone Group, and Michael Bloomberg.9 Schwarzman, who founded the Blackstone private equity firm in 1985 with former commerce secretary Peter Peterson, later built it into what Forbes described as “the world’s largest buyout firm” with $500 billion in assets by 2019.10 But the differences between the Bloomberg and Schwarzman were also political. Bloomberg had become a big giver to Democratic candidates in 2018, Schwarzman contributed to Republicans. The political divide could only add to the tension between the two camps.
Blackstone’s new venture with Reuters would be called Refinitiv, and it immediately led the pack of at least six others out there trying to tap into the $30 billion data market11 dominated by Bloomberg.12 One of the most inventive was Money.net, created by Morgan Downey, an engaging Irishman who once ran Bloomberg’s global commodity division. Downey offered what he hoped would be the people’s terminal. Instead of $24,000 a year for a Bloomberg by 2019, Downey said he was charging about $1,500 a year. Like other competitors, Downey disparaged Bloomberg’s system as old-fashioned and overly complicated. As he put it, Bloomberg is “your grandfather’s trading tool.”13 Of course, a lot of those grandfathers ran corporations and governments around the world.
By the beginning of 2019, however, Bloomberg had still managed to beat the competition and stay on top with his gold standard machine. Douglas B. Taylor, managing director of Burton-Taylor International Consulting, estimated that Bloomberg led the market with nearly 33 percent, with Reuters (or Refinitiv) the closest competition at 22 percent. Others trailed with bits and pieces of the market, in the single digits or less.
“Any news of Bloomberg’s demise is greatly exaggerated,” Taylor said in early 2019. One of the top analysts of the market data and analysis business including the privately owned Bloomberg, Taylor said that, except for Reuters, Bloomberg’s competitors were nibbling around the edges. And Bloomberg LP’s revenues were rising to more than $10 billion in 2018. As for potential Bloomberg killers, he added that “generally the people that come after Bloomberg’s business end up as roadkill.”14
In the meantime, Bloomberg had redirected his company’s main focus to the terminal users, still his core business, and, as the company grew stronger each year, he turned to one of his favored pastimes, giving out all sorts of advice to young entrepreneurs about how he became such a powerful billionaire. Besides the mantra—get in early, work hard, don’t go to the bathroom (a joke, maybe), and leave late—occasionally he looked back more at nearly thirty years of success and mentioned another requirement—luck.
“People that are successful think they’re smart, and I think they’re lucky, me included,” Bloomberg said. “We started [the Bloomberg Terminal] at the right time, but if we’d zigged instead of zagged it wouldn’t have turned out that way . . . I think what happened with our luck is we did something that nobody else did; so the competition in the beginning wasn’t there.”15
Later, he added: “We had what Jeff Bezos would tell you was the reason for most of h
is success—first mover advantage. Because by the time they realized that, ‘Oh, what Bloomberg was doing is valuable and people will take the data from him because he has done something else with it,’ it was pretty hard, late for them to catch up.”16
That did not mean he was lucky enough to let things slide. Chairman Bloomberg, who had a maxim for everything, made it clear to his employees that to compete in their hyper-fast world, the company had to grow and adapt constantly. “Growth makes us a moving target. No growth makes us a sitting duck.”17 Or, a corollary: “Any supplier who offers today what it sold yesterday will be out of business tomorrow.”
He still claimed he didn’t worry about competitors who are always promising to deliver a cheaper, faster, easier machine. As he put it dismissively, “They compare Bloomberg, an operating F18 jet fighter, with their still-being-developed witch on a broomstick.”18
By 2019, the fighter jet was still working just fine for Michael Bloomberg.
27
GIVING BACK
“When I get to heaven, I’m not sure I’m going to stand for an interview. I’m going right in.”
—Bloomberg to CBS’s 60 Minutes, 20171
Michael Bloomberg is a generous billionaire. He has been repeatedly ranked as one of the top donors in the country by The Chronicle of Philanthropy, coming in second place in 2018 after Jeff and MacKenzie Bezos, who gave away $2 billion to Bloomberg’s $767 million.2
Bloomberg had already signed the Giving Pledge along with Warren Buffett, Bill and Melinda Gates, and more than one hundred other wealthy people who promised to give away at least half of their fortunes before they died.3 Bloomberg vowed to do even better. When asked about his philanthropy, Bloomberg would often say that he planned for his check to the undertaker to bounce, a view that echoed Andrew Carnegie’s famous line that “the man who dies rich, dies disgraced.”4
Over the years, Bloomberg has given privately and publicly. His personal generosity was often reflexive and heartfelt—from millions for hospitals and facilities in Israel and Johns Hopkins, his beloved alma mater, to much smaller gifts to friends, employees, even his critics and people he hardly knew. Most of his public giving has been strategically directed to improve the health of the planet and its people—including an emphasis on curbing guns, obesity, tobacco, and climate change. There would still be plenty of money left to support his other pet causes—money for the arts and education and innovations, particularly in cities. And he would carve out millions for his favored candidates who supported climate change and gun control and anybody but President Donald Trump.
Privately, Bloomberg seemed to seek out people in trouble. When he learned that the wife of one top city employee had leukemia, Bloomberg got her into an advanced medical program. A professor once told a Bloomberg employee that he was having heart trouble. “Next thing I knew, the helicopter took me to Johns Hopkins” to see Bloomberg’s preferred cardiologists. He paid for the funeral of a campaign worker whose family was struggling. And he reached out to people in trouble. “He called my mom every day when she was dying,” the son of a Bloomberg friend reported. And if he knew you were fired, Bloomberg was often among the first to offer support and a reminder that being axed did not mean you had been extinguished as a human being. He had been there.
Even some of his political opponents were visited by Bloomberg’s better angel. The late Wayne Barrett, a veteran investigative reporter for the Village Voice, had repeatedly scorched Bloomberg in print. “I really hammered the guy,” he said, “because that’s what I do.”5
To cite only one example of Barrett’s Bloomberg work, when the mayor used his money and political clout to run for a third term—breaking his own promise to retire after two terms—Barrett wrote an article with the headline “The Transformation of Mike Bloomberg: How the Benevolent Billionaire with No Political Debts Ended Up Owning Us All.”
Yet, when Barrett was ill and in the hospital, the head nurse came running down the hall one day and burst into his room. “It’s the mayor on the line,” she said breathlessly, holding out her cell phone.
“For ten or more minutes, he was telling me what a good journalist I am and wishing me good luck and all that. It was totally surprising,” Barrett recalled. Plus, he noted, his care improved considerably.
And then there were the little surprises, flashy reminders that he had deeper pockets than most. Early in his first term, Bloomberg and a few city officials stopped at a Greek diner for a late-night meal. The owner rushed over and said how honored he was to have the mayor and how the food was on him. The mayor smiled and said thank you. Then, as he left, he pulled out a hundred dollar bill, gave it to the waiter, and said, “Have a good night.”6
There are plenty of these stories—the sudden handout, the calls to those in pain, the help finding good medical care. Was this, as one skeptic put it, guilt for gilt? Maybe. But a more generous explanation was that Bloomberg had the power to help and enjoyed using it.
Like his peers, Bloomberg gave to museums and major charities, but his public philanthropy was different for one major reason: he had been a mayor for twelve years, and he knew the gritty problems that cities faced every day. He would argue that cities were where changes could be made for the better—not in Washington, where politics too often had hardened into perpetual gridlock. As a result, his public giving began to focus on cities, and he concentrated on finding smaller innovations that could be adopted by urban areas across the world.
Shortly after he left city hall, Bloomberg appeared before a group of philanthropists and their representatives to explain his view. The “public sector traditionally hasn’t innovated very well,” he said, because there are “powerful disincentives” in case the new idea is a flop. “If there’s anything that scares elected officials, not to mention their consultants, it’s failure. The press magnifies failure. They harp on it. They sensationalize it, and opponents exploit that so politicians play it safe.” A waste of taxpayer money on a faulty experiment simply writes the political ad for an opponent, he said. So, “That’s where philanthropy comes in,”7 he said.
* * *
Bloomberg Philanthropies, the umbrella organization created in 2006 to manage his many charitable ventures, operates in an elegant Stanford White mansion on East Seventy-eighth Street in Manhattan.8 Bloomberg purchased the historic building in 2006 for a somewhat high, pre-2008 crisis price of $45 million, and, after substantial renovations, he opened his charity headquarters there a short time later.9 The grand residence was once owned by one of New York’s oldest and richest families, whose most famous member in the nineteenth century was Hamilton Fish, governor of New York, U.S. senator, and secretary of state. The house was built for his son, Stuyvesant Fish. Outside there is still a wrought-iron fence with a fish theme, a reminder of the family’s golden days.
Behind a somber exterior, the doors now slide open to a burst of light and glass, with transparent stairs and walls and a variety of art, from very ancient to very last week. Bloomberg’s own favorite is a seventeenth-century painting called The Library of Euclid by Domenico Maroli,10 which dominates one wall. It shows Euclid of Megara disguising himself as a woman because Megaran males were banned from entering Athens, where Socrates was teaching. Elsewhere, a collection of the latest contemporary art changes more often than the seasons. It is a see-through workplace where people are laboring with a visible intensity, and in some ways, this formidable glass castle feels like an architect’s version of the man himself. Staid on the outside, full of energy and unpredictability on the inside.
Bloomberg Philanthropies has been a small operation for the largesse it dispensed over the first dozen years. Some two hundred employees around the world scrambled to find worthy recipients for grants that ranged from a few thousand dollars to tens of millions. Bloomberg planned to dole out more with every birthday with $10 billion of his $50 billion–plus fortune promised by the end of 2019 at age seventy-seven.11 (He sometimes said he planned to live to 125, which would giv
e him a little extra time to spread his wealth around. But if he pushed the wrong pedal on the helicopter or skied into a tree, of course, like the heirs to the Rockefeller and the Carnegie fortunes, his trusted friends and family could take over.)
Bloomberg put his most-important employee, Patti Harris, in charge of his charity, even though, at the time, she was still his top deputy mayor with plenty on her schedule. She was already the chief guide for Bloomberg’s political adventures; she had untangled many of his problems at city hall; and she was generally the one who made certain that his job and his life ran as smoothly as possible. Now she would add control over the organization created to give away billions of dollars in five main areas: public health, arts, government innovation (especially in cities), education, and the environment.
“Patti has been the eyes and ears. She’s been the moral standard. She’s been the disciplinarian. She’s been the one with common sense,” Bloomberg explained in an interview in 2018. “She’s the one that ties together the family, the foundation and the company.
“It’s hard to overestimate the value that Patti has brought to the city and to the worldwide philanthropy and this company. Now she is my confidante. Everybody knows that.” Bloomberg was at a glass table in his New York office that day. He nibbled blueberries, passing them around. Suddenly he grinned, unable to resist a little aside. “She already bought a coffin for me and a burial plot. She said, ‘You want to go see it?’ I said, ‘No, I’m not going to see it. I’m going to be six feet underground, for chrisssake.”12
* * *
By most accounts, Bloomberg’s philanthropy was very “Bloombergerian,” the term often used by many in the Bloomberg network. That usually meant that the boss demanded they find or create the data—find numbers for an “unmet need,” as his workers said. Then his staff tried to find a way to meet that need, and finally, Bloomberg asked for reports on what had worked and what hadn’t.
The Many Lives of Michael Bloomberg Page 35