SPECIAL

INS IDE T HE WO RST D E AL EVER ISSUE N EXT B IL L I ON -D OLL A R START UP S

KANYE VS. KYLIE T HE H I DD EN D E BT B UB B LE

Pfizer CEO

A NEW,
ALBERT BOURLA
Betting $1 billion on
a vaccine by fall

“THIS IS NOT

BETTER
BUSINESS AS
USUAL.
FINANCIAL
RETURNS SHOULD
NOT DRIVE
ANY DECISIONS.”
CAPITALISM IS
EMERGING.
RIGHT NOW.
THE PANDEMIC IS EXPOSING FISSURES AND
ACCELERATING NECESSARY INNOVATION.
A PRESCRIPTION FOR AMERICA’S FUTURE
PLUS: TOP 25 CORPORATE
FIRST RESPONDERS
 June/July 2020 Volume 203 | Number 3

2
INSIDE
CONTENTS

COVER STORY

54 | Greater
Capitalism
Our economic
system suffered from a
number of preexisting
conditions—inequality,
education gaps,
cronyism—before
Covid-19 arrived.
But it’s already busy
reinventing itself into
something better,
MARTIN SCHOELLER FOR FORBES

fairer and smarter.

Plus: The Top 25
Corporate First
Responders
By Randall Lane

ON THE COVER: ALBERT BOURLA BY JAMEL TOPPIN FOR FORBES J U N E / J U LY 2 0 2 0

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 Three’s Company

Brynn Putnam missed the

opportunity to expand
her first company. She’s
determined not to repeat the
mistake with her home fitness
4 innovation, Mirror.
CONTENTS

92

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JUNE/JULY 2020

64 74 84 92 102

Pfizer’s Covid Dukes of Worst. Mirror, Mirror Hibernation

Moon Shot Moral Hazard Deal. Ever. On Your Wall Nation
Albert Bourla has boldly Thanks to the Federal After Eric Baker was Peloton isn’t the only As America lurches
predicted that his com- Reserve’s low-rate reli- fired from StubHub, home fitness gadget toward reopening,
pany will develop and gion, big companies have the ticketing giant he suddenly prospering Forbes sent some of our
distribute a vaccine by spent the last decade cofounded, he tried to in the coronavirus era. best photographers to
this autumn. The first gorging on debt. Instead even the score by raising Former ballerina Brynn chronicle what the
look inside a $1 billion of heading into bank- $4 billion to buy it back. Putnam has hit a $300 world’s strongest econ-
bet that could change ruptcy, though, they’re Weeks later, the coro- million gusher with an omy looks like when
the world. now being propped up navirus destroyed the interactive workout de- it’s fast asleep. We’ve
by the government. business. Revenge isn’t vice that you can hang never seen anything
By Nathan Vardi
always sweet. up anywhere at home. like this—and with luck
By Antoine Gara and
Plus: Next Billion- we’ll never see it again.
Nathan Vardi By Noah Kirsch
Dollar Startups 2020 By Caroline Howard
By Amy Feldman

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15 | Celebrity 100
From Kylie to Yeezy: how
top-earning stars turned the
business of fame into $6.1 billion.
6
20 | Sound Prognosis
Indian doctor Arvind Lal joins
CONTENTS

the ten-figure club thanks to

his company’s Covid-19 tests.

22 | 30 Under 30: Table Setters

Home cookin’ in 30 words or less.

24 | World of Forbes
Around the globe with our
36 international editions.

26 | Conversation
Tracking wealth as the world
economy falters. 15

CONTRARIAN
42
LEADERSHIP

29 | The Man Getting America

Back on Track
Billionaire Wes Edens bets that the
U.S.’ transit future is passenger rail.
By Alan Ohnsman and Antoine Gara

TECHNOLOGY
36 | Intelligence Agents
Normally, humans train AI systems
to replace them. ASAPP’s software
trains customer-service reps to be
better humans.
Plus: The year’s top 50 AI startups
By Alan Ohnsman and Kenrick Cai

ENTREPRENEURS

JAMEL TOPPIN FOR FORBES (ABOVE); ULTRADISTANCIA FEDERICO WINER

40 | The Bureaucrat Wrestler
As the lodging industry collapses,
Warren Meyer has found a sure thing.
One problem: government lawyers.
By William Baldwin

STRATEGIES

42 | Dirty Moves
The Navajo nation had dreams
of a clean-power future. But
coal just won’t let it go.
By Christopher Helman
11 | Fact & Comment
INVESTING
Better health care at a bargain.
By Steve Forbes 46 | Optimism Rules
Scottish firm Baillie Gifford’s $245
112 | Thoughts On ingenuity. billion portfolio is perfect for life
under lockdown. By Antoine Gara

FORBES.COM J U N E / J U LY 2 0 2 0
 SIDELINES
Rays of Hope
8 Like every business in America, we’ve had to rethink
everything about what we do and how we do it. As
I write this, a few minutes past midnight, the Forbes
FORBES
team is producing the magazine you’re holding from
a red-brick colonial in Charlottesville, Virginia, an
apartment in Brooklyn, a basement in Kansas City,
an Airbnb in Saratoga Springs, New York (that’s
me), and a few dozen other places besides.
Many who are reading this are surely facing
challenges that were unfathomable even three
months ago. To all those who are, let me assure
you that we understand, and we’re here to help.
I would also like to pass on a simple message:
hope. These are hard times for most, growth times
for some—and instructive times for all. Everyone
was a business genius in 2019. These, by contrast,
are the moments when greatness truly shines, even
if that greatness translates into just hanging on.
There’s hope on page 54, as I delve into how the
pandemic is accelerating the progression of capital-
ism for the better at an unprecedented pace. More
hope on page 64, as Nathan Vardi for the first time
reveals Pfizer’s moon-shot project to have a vaccine
ready for distribution later this year. And yet more
hope on page 92, as Amy Feldman shows what
happens when great timing meets a great idea.
And here’s one more story of hope. We’ve lately
restructured everything we do at Forbes—and the
results have exceeded our highest expectations. Our
team has never produced better journalism. And in
turn, we’ve never had a larger audience: 115 million
domestically and 210 million globally, which make
us the biggest business site in America and the
world, respectively.
Whatever success looks like to you at this difficult
moment, know this: It can be done.
—RANDALL LANE, CHIEF CONTENT OFFICER
FORBES.COM
June/July 2020 • Volume 203 | Number 3
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 “With all thy getting, get understanding”
FACT & COMMENT
By Steve Forbes, Editor-in-Chief
Better Health Care at Bargain Prices!
Can you imagine the United States having
a health care system that delivers better out-
comes than those we get today at a cost that
is 75% less? That number is not a misprint or
a fantasy; it’s the reality in Singapore, where
there is universal coverage. Life expectancy
is 85, more than five years better than in the
U.S. Decades ago, Singapore seriously lagged
the U.S; now, infant mortality is lower and
other medical metrics in the city-state are
also better than they are here.
Doctors and health-care practitioners are
every bit as good in Singapore as they are
here, or just about anywhere else in the world. Many get
trained in the U.S. or at top-flight schools elsewhere. The
nation is always scouring the world for best practices and
cutting-edge technologies. That’s right—Singapore’s hospi-
tals and clinics don’t hesitate to buy the latest and the best
equipment and devices.
Just look at the prices of medical procedures in Singa-
pore. In the U.S. heart-bypass surgery will set you (and your
insurer) back some $130,000. In Singapore? $18,000. A hip
replacement costs 72% less and a heart valve 92% less.
Drug prices there are a fraction of ours. Insurance premiums
are inexpensive—about $50 for those under 20 years of age and
a little more than $1,000 a year for those in their late 80s. More-
over, if you pursue bad habits, such as overeating or smoking,
your premiums go up. Unlike in the U.S., individuals pay for
the policy, so it’s portable, not tied to their jobs. Therefore,
Singapore has a robust individual-insurance market.
Does Singapore accomplish this by underpaying physi-
cians? Nope. The after-tax incomes (Singapore’s income-
tax rates are a fraction of ours) of general practitioners and
specialists are about equal. And docs in Singapore aren’t
plagued by malpractice costs or countless
hours spent filling out insurance forms.
As this year’s election campaign heats up,
the issue of health-care costs will come to the
fore again. Unfortunately, the issue will be cast
as the system we have today versus some ver-
sion of a European-style single-payer system.
Neither model resembles what Singapore does.
So what does that country do?
Sean Masaki Flynn’s extraordinarily impor-
tant—and, so far, largely ignored—book The
Cure That Works (Regnery, $28.99) gives the
answers in straightforward prose. You’ll be rub-
J U N E / J U LY 2 0 2 0
11
bing your eyes in disbelief: Health care can
indeed be inexpensive, first-rate and easily
accessible to everyone.
The bottom line: Capitalism with safety
nets works! Singapore has the most free-
market-oriented medical system anywhere.
The U.S., in contrast, has a third-party
system—providers, patients and insurers/
government. And it’s the third parties that
are the drivers here. Hospitals, for instance,
know their revenues depend more on how
well they negotiate with insurers than on how
well they satisfy patients. This leads to the ut-
terly strange situation of prices almost never being posted!
In Singapore the dynamic is a two-party system. The pa-
tient is in charge, just as the consumer is in almost every
other market. Essentially, all workers pay a chunk of their
salary into the equivalent of a health savings account. But
they—not the government—own the assets. From that ac-
count an employee pays premiums for insurance to cover
catastrophically expensive medical conditions as well as
routine medical expenses. What isn’t spent remains in the
account and grows. Because most people don’t suffer from
chronic conditions, the overall value of these accounts in-
creases, and they now equal nearly four and a half years’
worth of the country’s total yearly medical outlays.
Another crucial factor in Singapore’s system: All health
care providers, including pharmacies, must post the prices of
everything. No hidden $25 charge for a Tylenol pill! Bills are
simple so that the customer understands exactly what he or
she is being charged for. Hospitals and clinics compete for a
patient’s business; thus, they provide good service at low cost.
If you want a fancy hospital room, you’ll pay extra; if you want
a bare-bones one, where you’re in a space resembling an army
barracks with plenty of other patients, you’ll save
money. But what’s amazing is that regardless of
your choice, the care is the same! There’s no dis-
tinction in the quality of care because of income.
Contrast this pricing transparency with what
we have in the U.S. Flynn rightly compares our
situation with a Third World bazaar, where you
haggle with a merchant for an item. It’s hard to
make price comparisons with other merchants
without spending an inordinate amount of time.
The Singaporean government does supply
subsidies for the indigent or if someone suf-
fers some catastrophe, but unlike in the U.S.,
FORBES.COM
 Steve Forbes Cont.
these are not budget-busters because
free-market competition keeps prices
eminently reasonable.
Competition also slashes adminis-
trative costs. Flynn explains how these
costs rocket upward in the U.S., thanks
12 to our third-party system. He cites the
example of a specialist he once visited.
The doctor was a solo practitioner who
• FACT & COMMENT
had one person to do the scheduling
and other routine office chores, and two
other people to file those complicated
insurance claims and fight with insur-
ance bureaucrats over any contested
reimbursements. His insight: Those
two people also mean at least two more
people on the other side. Five people for
a single physician. No wonder admin-
istrative costs always balloon. Worse,
insurance company profits depend on
the volume of claims. That’s not a great
incentive to control expenses, the way a
real consumer market would.
Singapore also teaches a sobering
lesson regarding drug approvals. Any
medication or device is generally okay,
as long as it has been approved by any
of the major foreign drug-regulatory
agencies, such as the FDA, the Europe-
an Medicines Agency, Australia’s Ther-
apeutic Goods Administration, Health
Canada and Japan’s Pharmaceuticals &
Medical Devices Agency.
But here’s the kicker: Unlike the
FDA, Singapore asks only that a drug
be proven to be safe, not whether it is
actually efficacious. Singapore dem-
onstrates that a medicine that doesn’t
work as advertised will quickly fail in
the marketplace. That was also true
in the U.S. until FDA protocols were
drastically changed decades ago. Amaz-
ingly, and counterintuitively, experi-
ence demonstrates that the do-no-harm
approach adopted by those non-FDA
agencies is as effective and far less cost-
ly than what we’ve been doing since the
1960s. The FDA’s immensely rigid, cost-
Introducing
What’s Ahead
The new podcast hosted
by Steve Forbes.
Subscribe now on iTunes
or GooglePlay Store.
FORBES.COM
ly, elaborate and time-consuming meth-
ods have sent drug prices through the
stratosphere, with no overall positive
benefit. In fact, they’ve cost the lives of
countless thousands of patients desper-
ately waiting for life-saving medicines
stuck in the FDA’s bureaucratic maw.
What about single-payer systems
such as those in Canada, the U.K.,
France and elsewhere? Flynn bluntly
shows how they control expenses: by ra-
tioning. You wait and wait to visit a spe-
cialist and, depending on your age and
condition, you may not be treated at all.
Could a free-market health-care ap-
proach work in the U.S.? Of course. Two
examples where this is already being used
are elective cosmetic surgeries and LASIK
eye surgeries, which aren’t covered by
insurance. Nonetheless, demand for
both has zoomed. Results? Outcomes
have improved, and prices, adjusted for
inflation, have dropped by almost 50%
for LASIK operations and 25% for cos-
metic procedures over the past 20 years.
The state of Indiana provides an-
other example. Back in 2007 it offered
state employees the option of taking a
high-deductible policy with a health
savings account (HSA). The deductible
was $2,750, with Indiana putting that
amount each year into the employee’s
HSA, which became the employee’s per-
sonal property. The worker would pay
20% of costs above that, up to $8,000;
anything above that was covered 100%.
The total out-of-pocket expense in a
year was thus capped at a bit more than
$1,000. Employees in this plan reduced
their spending 35%, because they sud-
denly had an incentive to get value for
their health-care dollars, such as choos-
ing generic drugs over the more expen-
sive brand names and visiting acute-
care clinics instead of rushing to a more
costly hospital emergency room.
Flynn’s irrefutable bottom line: We
should vigorously pursue high-deduct-
ible health insurance policies with
HSAs that would cover the deduct-
ible and be paid for by the employer,
combined with posted prices for every-
thing offered by providers.
Conditions may be ripe for such a
profound change. Employers are already
going for high-deductible policies, but
many are not attaching them to robust
HSAs. In addition, HSAs are hobbled
by unnecessary restrictions, such as a
ban on using them for over-the-coun-
ter medicines. As a start, Washington
should require insurers to offer such
policies in addition to their tradition-
al ones and should remove those HSA
constraints.
By the way, Indiana is also success-
fully pioneering a Singapore-like ap-
proach for its Medicaid program.
Muscular Mystery
A Conspiracy of Bones—by Kathy
Reichs (Scribner, $27). Our heroine,
forensic anthropologist Temperance
Brennan (many of
the character names
in this book are
memorably origi-
nal), is recovering
from a neurological
aneurysm (plenty of
headaches and self-
questioning about her
grip on reality), the murder of her boss
and doubts about her beau when, in the
middle of the night, she thinks she spies
a mysterious figure outside, lurking
about in a trench coat. He disappears
when she goes out to examine the situ-
ation. Brennan then receives a series of
text messages, each with a grisly pic-
ture of a corpse whose head and body
have been eaten by what turns out to be
feral pigs. Her investigation is made al-
most impossible by her new boss, Mar-
got Heavner, who badly wants to force
Brennan out. In a previous job with
her, Heavner had fatally compromised
a murder case by spilling nonpublic in-
formation to a popular crackpot radio
host, and Brennan called her out on it.
This tale has plenty of well-ex-
ecuted twists and turns involving miss-
ing children, the ugliness of the Dark
Web, old missile sites turned into lux-
urious condominiums, the mysterious
sinking years before of the ferry Estonia
with a catastrophic loss of life, a weird
sibling relationship and more. If all this
doesn’t temporarily take your mind off
our Covid-19 woes, nothing will.
J U N E / J U LY 2 0 2 0
EVERY LIT TLE THING
IS EVERY THING.

10th Gen Intel®

Core™ i7 processor
The new XPS 13
Device to match your drive
Call a Dell Technologies Advisor at 855-341-5261 or learn more at
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BE THE CHANGE.
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international disaster relief.
 W H AT ’ S WHO’S
NEW NEXT

15

FRONTRUNNER
The List

CELEBRITY

100
JAMEL TOPPIN FOR FORBES

From Netflix to Yeezy: How this year’s top-earning

stars turned the business of celebrity into
$6.1 billion, $200 million shy of last year’s haul.

J U N E /2 0
JU20
LY 2 0 2 0 FORBES.COM
 Why insist on paperwork? When dealing with
such oversized ambitions, verification is key.
The Coty sale backed up our estimate, based on
the value of Kylie Cosmetics, that Kylie Jenner
16 was the world’s youngest self-made billionaire.
(Her net worth has now fallen below $1 billion
as Forbes has reevaluated her business amid the
FRONTRUNNER

pandemic.) But new filings released by Coty lay

bare one of the family’s best-kept secrets: Ky-
lie’s company is substantially smaller than she
claimed. Kylie and her mother, Kris Jenner, who
helps run the business, had been insisting that
Kylie Cosmetics was generating over $300 mil-
lion in revenue every year since 2016—even go-
ing so far as to provide Forbes with tax returns,
which she signed and says were submitted to the
IRS. While we can’t prove that those documents
were fake (though it’s likely), it’s clear that Ky-
lie’s camp has been lying. The filings indicate that
sales were just $125 million in 2018, not $360
million as her reps had previously claimed. Then

I
there’s Kylie’s skin-care line, which it said did
$100 million in sales in less than two months last
year; the filings show it was actually “on track” to
end the year with revenue of $25 million.
Pressed for answers on the many discrepancies,
the typically chatty Jenners did something out of
character: They stopped answering our questions.

n one of the biggest celebrity cash-outs

of all time, Kylie Jenner agreed to sell 1. Kylie Jenner 11. Rush Limbaugh
$590.0 MIL • PERSONALITY $85.0 • PERSONALITY
51% of her Kylie Cosmetics to beauty
giant Coty in November. Her cut: $540 2. Kanye West 12. Ellen DeGeneres
million before taxes, by Forbes’ esti- $170.0 • MUSICIAN $84.0 • PERSONALITY
mates—more than Wall Street thought it was worth,
3. Roger Federer 13. Bill Simmons
and more than enough to crown her this year’s top- $106.3 • ATHLETE $82.5 • PERSONALITY
earning celebrity. Right behind her at No. 2 is brother-
in-law Kanye West, who brought in all but $10 million 4. Cristiano Ronaldo 14. Elton John
$105.0 • ATHLETE $81.0 • MUSICIAN
or so of his estimated $170 million in pretax earnings
from his high-end sneaker brand, Yeezy. 5. Lionel Messi 15. James Patterson
But this cash-grabbing clan would rather talk about $104.0 • ATHLETE $80.0 • AUTHOR
their “billions” than their millions. “It’s fair to say
that everything the Kardashian-Jenner family does is 6. Tyler Perry 16. Stephen Curry
$97.0 • PERSONALITY $74.4 • ATHLETE
oversized. . . . To stay on-brand, it needs to be bigger
than it is,” says Stephanie Wissink, a consumer prod- 7. Neymar 17. Ariana Grande
uct analyst at Jefferies. That’s what led Kanye to open $95.5 • ATHLETE $72.0 • MUSICIAN
his books to Forbes in April to prove he’s a billionaire.
8. Howard Stern 18. Ryan Reynolds
America’s hip-hop genius sent over documents out- $90.0 • PERSONALITY $71.5 • ACTOR
lining the massive royalty checks Adidas sends him,
plus an accounting of his assets, all the way down to 9. LeBron James 19. Gordon Ramsay
JAMEL TOPPIN

$88.2 • ATHLETE $70.0 • PERSONALITY

$297,050 worth of livestock on his Wyoming ranches.
We pegged his net worth at $1.3 billion. (Kanye main- 10. Dwayne Johnson 20. Jonas Brothers
tains he’s worth well more than double that.) $87.5 • ACTOR $68.5 • MUSICIANS

FORBES.COM J U N E / J U LY 2 0 2 0
 43. Billie Eilish 54. James Harden
$53.0 • MUSICIAN $47.8 • ATHLETE

44. Rory McIlroy 55. Giannis Antetokounmpo

$52.0 • ATHLETE $47.6 • ATHLETE
17
45. Simon Cowell 56. Jennifer Lopez
$51.0 • PERSONALITY $47.5 • MUSICIAN

FRONTRUNNER
45. Jerry Seinfeld 57. Anthony Joshua
$51.0 • COMEDIAN $47.0 • ATHLETE

47. BTS 57. Pink

$50.0 • MUSICIANS $47.0 • MUSICIAN

48. Kim Kardashian West 59. Deontay Wilder

$49.5 • PERSONALITY $46.5 • ATHLETE

49. Drake 60. David Copperfield

$49.0 • MUSICIAN $46.0 • MAGICIAN

49. Jared Goff 60. Rihanna

$49.0 • ATHLETE $46.0 • MUSICIAN

49. Judy Sheindlin 62. Lin-Manuel Miranda

Ryan Reynolds $49.0 • PERSONALITY $45.5 • ACTOR

The hotshot who plays a billionaire on Netflix’s 52. Akshay Kumar 62. Luke Bryan
Six Underground and stars in its upcoming film Red Notice $48.5 • ACTOR $45.5 • MUSICIAN
collected $48.5 million from the streaming giant in the
past year, more than anyone on this list; all together, the stars 53. Conor McGregor 64. Backstreet Boys
here pulled in $220 million from Netflix, up 200% from 2019, $48.0 • ATHLETE $45.0 • MUSICIANS
bringing the five-year total to nearly $600 million.

21. The Chainsmokers 32. Rolling Stones

$68.0 • MUSICIANS $59.0 • MUSICIANS

22. Dr. Phil 33. Mark Wahlberg

$65.5 • PERSONALITY $58.0 • ACTOR

23. Ed Sheeran 34. Tyson Fury

$64.0 • MUSICIAN $57.0 • ATHLETE

24. Kevin Durant 35. Marshmello

$63.9 • ATHLETE $56.0 • MUSICIAN
JASON MENDEZ/GETTY IMAGES (ABOVE); GREGG DEGUIRE/GETTY IMAGES

25. Taylor Swift 35. Russell Westbrook

$63.5 • MUSICIAN $56.0 • ATHLETE

26. Tiger Woods 37. Ben Affleck

$62.3 • ATHLETE $55.0 • ACTOR

27. Kirk Cousins 37. Diddy

$60.5 • ATHLETE $55.0 • MUSICIAN

28. JK Rowling 39. Shawn Mendes

$60.0 • AUTHOR $54.5 • MUSICIAN

28. Post Malone

$60.0 • MUSICIAN
40. Vin Diesel
$54.0 • ACTOR
Billie Eilish
Winner of five Grammys this year. When We All Fall Asleep,
28. Ryan Seacrest 40. Lewis Hamilton Where Do We Go? was the No. 1 album of 2019, with 3.9 million
$60.0 • PERSONALITY $54.0 • ATHLETE units sold. She reportedly collected $25 million from Apple for
a documentary about her life and career, and if the coronavirus
31. Carson Wentz 42. Jay-Z hadn’t killed her arena tour, she might have cracked the Top 20.
$59.1 • ATHLETE $53.5 • MUSICIAN

J U N E / J U LY 2 0 2 0 FORBES.COM
 87. Bon Jovi 91. Oprah Winfrey
$38.0 • MUSICIANS $37.0 • PERSONALITY

87. Lady Gaga 95. DJ Khaled

$38.0 • MUSICIAN $36.5 • MUSICIAN

18
87. U2 95. Kiss
$38.0 • MUSICIANS $36.5 • MUSICIANS
FRONTRUNNER

90. Naomi Osaka 97. Sebastian Vettel

$37.4 • ATHLETE $36.3 • ATHLETE

91. Canelo Álvarez 98. Serena Williams

$37.0 • ATHLETE $36.0 • ATHLETE

91. Damian Lillard 99. Angelina Jolie

$37.0 • ATHLETE $35.5 • ACTOR

91. Paul McCartney 100. Mohamed Salah

$37.0 • MUSICIAN $35.1 • ATHLETE

Travis Scott
He played the Super Bowl for free, but his Astroworld tour
grossed $53.5 million in 2019, the year’s top hip-hop road
show. He followed it with a free Fortnite concert series for over
27 million viewers—far more than saw Astroworld—when the
pandemic hit, helping boost sales of his Cactus Jack products:
sneakers, action figures and more.

64. Tom Brady 75. Adam Sandler

$45.0 • ATHLETE $41.0 • ACTOR

64. Phil Collins 77. Phil Mickelson

$45.0 • MUSICIAN $40.8 • ATHLETE

67. Drew Brees 78. Julio Jones

$44.8 • ATHLETE $40.5 • ATHLETE

68. Novak Djokovic 78. Metallica

AXELLE-BAUER-GRIFFIN/GETTY IMAGES (ABOVE); CHRIS HYDE/GETTY IMAGES

$44.6 • ATHLETE $40.5 • MUSICIANS
Naomi Osaka
69. Will Smith 80. Jackie Chan A mix of Japanese and Haitian heritage (and a monster
$44.5 • ACTOR $40.0 • ACTOR
backhand) make her a dream for marketers including Nike,
70. Blake Shelton 80. Rafael Nadal Nissan and a dozen others that signed endorsement deals with
$43.5 • MUSICIAN $40.0 • ATHLETE the 22-year-old ace ahead of the Tokyo Olympics. Back-to-back
Grand Slam wins and a massive overseas following have made
71. Sean Hannity 82. Heidi Klum Osaka the top-earning female athlete for the first time.
$43.0 • PERSONALITY $39.5 • PERSONALITY

71. Sofia Vergara 82. Travis Scott

$43.0 • ACTOR $39.5 • MUSICIAN Edited by Zack O’Malley Greenburg and Rob LaFranco
Reported by Kurt Badenhausen, Kellen Becoats, Madeline Berg,
73. Celine Dion 84. Kevin Hart Dawn Chmielewski, Hayley Cuccinello, Abigail Freeman, Chase
Peterson-Withorn, Christina Settimi, Ariel Shapiro and Chloe Sorvino
$42.0 • MUSICIAN $39.0 • COMEDIAN
ME TH ODOL OG Y: This list ranks “front of the camera” stars
74. Kyrie Irving 85. Klay Thompson worldwide using pretax earnings from June 2019 through May 2020
$41.9 • ATHLETE $38.8 • ATHLETE before deducting fees for managers, lawyers and agents. Figures
are based on information from Nielsen Music/MRC Data, Pollstar,
75. The Eagles 86. Katy Perry IMDB, NPD BookScan and ComScore, as well as interviews with
$41.0 • MUSICIANS $38.5 • MUSICIAN industry experts and many of the stars themselves.

FORBES.COM J U N E / J U LY 2 0 2 0
 Trust.Whittier.

When you’re not sure of your next move,

who do you turn to for advice?
These are unprecedented times, filled with change and challenge. For
many, it’s given us pause to reexamine priorities and goals. Whether
taking a closer look at your investment portfolio, initiating a succession
planning strategy or even more immediately, ensuring the long-term
stability, security and well-being of those closest to you — we are here
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Contact Tim McCarthy | 626.463.2545

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 New Billionaire
SOUND PROGNOSIS
20 Dr. Arvind Lal joins the ten-figure club as his labs conduct thousands
of Covid-19 tests each day across India.
FRONTRUNNER
I
n late March, as the coronavirus
sent India into a nationwide
lockdown, Dr. Arvind Lal, 70,
sprang into action. His Dr. Lal
PathLabs, one of India’s largest
diagnostic chains, quickly won regulatory
approval to conduct Covid-19 tests, becoming
one of the first private labs able to test the
country’s masses.
That’s been a boon for the publicly traded
company, which is now conducting several
thousand Covid tests per day across its labs in
New Delhi, Kolkata and Indore. While the tests
themselves do not add significantly to revenues,
the company is benefiting from favorable
sentiment toward the diagnostics sector. Shares
are up 19% since Prime Minister Narendra
Modi instituted India’s lockdown on March 24,
enough to make Lal—its chairman, he owns a
57% stake in the chain—newly a billionaire.
FORBES.COM
In addition to the tests, which the company
says require nasal and throat swabs and can
produce a result within 48 hours, it rolled
out sample-collection vans to help speed the
process, and trained staff in contamination
avoidance. “We conduct regular training drills
to ensure that safety protocols are maintained,”
says Vandana Lal, Lal’s wife, a pathologist
who heads its clinical research and R&D. In
May, however, the Delhi government, which is
monitoring Covid testing in the city, launched
an inquiry into discrepancies in the firm’s test
reports. The company did not respond to a
request for comment on the inquiry.
Last year Lal PathLabs—which operates more
than 200 clinical laboratories and nearly 6,500
sample-pickup points across India—brought in
revenue of $174 million.
Lal’s path to billionaire status began in 1977,
when he was 28. He had earned his medical
degree and was taking a postgraduate course
in pathology at India’s Armed Forces Medical
College in the city of Pune. After his father
died suddenly, Lal returned home and took
over management of the diagnostic lab and
blood bank his father had founded in 1949. He
expanded it through a series of acquisitions and
took it public in 2015.
His daughter, Archana Lal Erdmann, a
geneticist, is a non-executive director at Lal
PathLabs. Lal’s son, Anjaneya Lal, is a freelance
wildlife photographer.
Trend Lines
NEW BILLIONAIRE BY ANU RAGHUNATHAN
DOUBLE SHOTS
Those who love Scotch and tequila (usually)
know better than to mix the two when
drinking. Thankfully, the same isn’t true
for distilleries. In 2019, the Scotch Whisky
Association relaxed its rules to allow
brands to age the spirit in casks formerly
used for tequila. First up is Chivas Extra
13 Tequila Cask ($45), which debuts in
July. And if you prefer the opposite twist,
Don Julio Reposado Double Cask ($65)
is matured in ex-Lagavulin casks. Either
way, you get hit with both barrels.
 Is Your
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 30 Under 30

TABLE SETTERS Book Value

Leaders from
the worlds of
22 Home cookin’ with the Forbes 30 Under 30, in 30 words or less. business, academia,
entertainment and
politics share
what’s on their
bedside table.
Benjamin Chesler 28
COFOUNDER, IMPERFECT PRODUCE

Grocers won’t stock misshapen

fruit and veggies. Imperfect sells
this “ugly” produce for up to 30%
off. Since 2015, it has prevented
116 million pounds of food waste. Daniel Dines
Billionaire
cofounder and
CEO of UiPath
Yuni Sameshima 29
& Joey Petracca 29
COFOUNDERS, CHICORY

This New York–based startup embeds

virtual shopping carts into thousands
of online recipes, enabling home chefs
to order ingredients with one click.
The Erl-King
Revenue last year hit $6 million. by Michel Tournier

There’s no better
Sierra Tishgart 30 author than this
French novelist to
& Maddy Moelis 29 read in the time of
COFOUNDERS, GREAT JONES Covid-19. Through
his books I’ve
A set of five of their ceramic, steel or discovered that
cast-iron cookware (in Millennial- studying others’
radical differences
targeting colors like “broccoli” and gives a lot of

30 UNDER 30 BY MARLEY COYNE. DIEGO PATIÑO FOR FORBES (LEFT); SAM KERR FOR FORBES
“blueberry”) runs $395. They’ve insights about
oneself. Tournier
raised $3.4 million; backers include understood social
superchef David Chang. distancing before
it was a term;
he’s a master
of exploring the
Nick Ajluni 26 & Nick Guillen 29 hermit’s mind.
COFOUNDERS, TRUFF HOT SAUCE In The Erl-King
(Atlantic Books,
Six ounces of their white-truffle 2013) he introduces
hot sauce can be yours for $35 at Abel Tiffauges, an
atypical character
retailers including Whole Foods and whose thinking
Neiman Marcus. The Nicks’ company is incongruous
is now worth $25 million–plus. with our mental
models. The book
follows his journey
from prisoner of
Laureen Asseo 28 war to becoming
FOUNDER & CEO, FRESH N’ LEAN the “ogre” of a
Nazi school. There,
For those who like cooking with the he steals young
Aryans from their
stove and the microwave, Fresh N’ families—a direct
Lean delivers ready-to-zap organic analogy to Nazism
meals straight to the doorstep. itself. A strange
novel for a strange
Revenues in 2019 were $41 million. time.

FORBES.COM J U N E / J U LY 2 0 2 0
 ANGOLA ARGENTINA
Double- and Matías Botbol sold his
triple-stacked popular social-media app,
sammies are Taringa, for an estimated
the specialties $10 million last year to
at Dooh Ponto, Buenos Aires–based
a fast-growing IOVLabs; now he’s working
burger chain on crypto projects for
with seven Taringa’s 30 million users.

WORLD
locations (one
with its first
24 drive-through).
FRONTRUNNER

OF
AUSTRIA BOLIVIA

FORBES
Across the planet, our 36 licensed
The government
hopes building
schools, hospitals
and other infrastruc-
ture will help revive
the economy. None-
theless, says Aldo
editions span five continents, Sulzer Limpias, the
28 languages and 24 time zones. president of Santa
Coronavirus closed the slopes early Cruz’s Chamber of
They all share the same mission: Construction: “This
at ultra-popular Kitzbühel, Austria;
celebrating entrepreneurial it hopes additions made in 2018 is going to be a very
capitalism in all its guises. for year-round sports will help it difficult year.”
reopen this summer.

CAMEROON CHINA
BRAZIL BULGARIA Cameroonian
fashion
Entrepreneurs Krasen entrepreneur
and Zhechko Kyurkchiev Imane Ayissi
kicked off an emergency created a $2,300

GEORGIA: NATA SOPROMADZE/FORBES WOMAN GEORGIA; ISRAEL: NIR SLAKMAN; KAZAKHSTAN: ANDREY LUNIN; SPAIN: ABBEYCOM
anti-Covid fund for their blue tie-dye suit—
home city of Shumen with a resembling
$55,000 donation. “There is medical scrubs—
no way we can protect the to benefit a
factories if we do not protect Covid-19
the city,” says Krasen, whose

BY KATHERINE LOVE. BRAZIL: CAROL CARQUEJEIRO; CAMEROON: IMANE AYISSI STUDIO; COLOMBIA: KIWIBOT-RAPPI;
fundraiser. Gap and Zara rely on customer-service soft-
company, Ficosota, makes ware from Hangzhou Raycloud Technology
diapers, wafers and more. and its new billionaire, Tan Guanghua, 34.

“The moment is not one of

crisis. We are experiencing CYPRUS CZECH REPUBLIC EGYPT
a real war, something un- Cyprus is working with Once a CDC expert,
precedented,” says Laércio Greece and Israel to Hend El Sherbini is now
Cosentino. He should know: turbocharge efforts at CEO of Giza-based Inte-
His software maker, Totvs, reviving tourism in the grated Diagnostics Hold-
managed to survive both region, including agreeing ings, which operates 400
the dot-com crash and the on some common safety labs, many now processing
2008 financial crisis. measures across borders. coronavirus tests.

COLOMBIA
SoftBank-backed Rappi,
a delivery unicorn,
“Dr. Hope” is the coverline
partnered with robotics
of a Forbes Czech profile of
startup Kiwibot to put
scientist Tomáš Cihlář, a top
robo-pizza couriers on
Gilead Sciences researcher
Medellín streets during
working on potential Covid-
the pandemic.
19 treatment remdesivir.

FRANCE GEORGIA GHANA

In the pre-coronavirus Director Lana Gogo- Among the
days, Jérémy Vosse’s beridze, 91, debuted stars of Forbes
luxury concierge her Golden Thread Africa’s Under
business catered to at the Tbilisi film 30 package:
clients wanting villa festival in December. Ghanaian
and yacht bookings; Its plot is especially Lewis Appia-
now he’s busily hunt- resonant now: gyei, 16, who
ing down doctors, An ailing elderly wants to be
funeral planners woman finds herself Africa’s first F1
and high-end chefs confined to her world champ.
who deliver. apartment.

FORBES.COM J U N E / J U LY 2 0 2 0
 GREECE
HUNGARY
Media mogul Zoltán Varga
has 25 print magazines
including Nők Lapja
Greece, which relies
heavily on tourism to (Women’s Journal) and
power its economy, has is working to digitize his
empire, adding paywalls
seen owners of short-term
rentals slash prices. around brand extensions
such as videos.
ISRAEL
“We are flourishing in chaos,”
says Diagnostic Robotics CEO
Jonathan Amir, who created a
map tracking Covid-19 spread
and symptoms through a daily
survey. Entrepreneurs gave 900
ideas to the State of Israel’s Inno-
vation Authority within one week
of its call for submissions.
SOUTH KOREA LATVIA
Manufacturer Leap High
is making high-tech glass
screens that display
information like maps and
weather conditions directly
on vehicle windshields.
Gints Gūtmanis’ innovative
ad agency in Riga special-
izes in animation and
has picked up U.S. clients
including Colgate and Nike.
PORTUGAL ROMANIA
Putting together the latest
Under 30 list meant video
chats with finalists, who
were asked to sum up their
lockdown mindset in as
few words as possible.
Some examples in the sub-
missions: “trust,” “solidarity”
and “perseverance.”
Today Filipe de Botton
makes coronavirus test-kit
tubes—far from the plastic
Yoplait packaging with
which his father began
Logoplaste back in 1976.
SPAIN
When does economist
Leopoldo Abadía, 86,
think the economy
will return to normal?
“Never,” he says. “[Coro-
navirus] is not a crisis,
but a total change.”
J U N E / J U LY 2 0 2 0
INDIA INDONESIA
“We have not been a remote-
working country culturally,”
admits Lenovo executive
Rahul Agarwal, who fronts
a package detailing how
Indian businesses plan to
adapt their workforces.
“Managers will need to
rewire their thinking.” Telehealth startup
Alodokter, founded by
Nathanael Faibis, saw surg- 25
ing demand among its
ITALY JAPAN users at the start of the
coronavirus crisis.
FRONTRUNNER
“The globalized world—as
we have understood it so
far—will never be the same
again,” billionaire Stefano KAZAKHSTAN
Pessina, who runs Wal-
greens’ parent company, “Any crisis [is] a time
tells Forbes Italy. “This will
be crucial in thinking about
of opportunity,” says
Nurlan Smagulov, who
reconstruction.” has quickly converted his
Astana Group’s Hyundai
Yahoo Japan CEO Kentaro and Subaru dealerships into
Kawabe suggested he pose virtual showrooms.
for the Forbes Japan cover
wearing a face mask to
make a statement about
leadership and promoting
workplace safety during
the pandemic.
MEXICO NICARAGUA
Managua-based Cosecha POLAND
Partners sources and
distributes seeds, beans Credo Ventures, a top
European investment fund,
and cacao from small-scale
rural farmers that traditional is unicorn hunting across
supply chains ignore. the continent—and hopes
newly focused bets on Polish
startups like Warsaw-based
Displate, which prints art on
National oil company metal canvases, pay off.
Petróleos Mexicanos lost
$18 billion in 2019. Its
predicament is worsening—
with new proposals to SLOVAKIA
reduce spending 70% and
direct its limited remaining
resources to its 25 most
productive fields.
RUSSIA
Moscow’s nightlife will Magna, an NGO founded
“revive like a phoenix,” by Slovaks, has focused
predicts Timur Lansky, on helping child victims
who dominates the city’s of epidemics in countries
party scene after open- including Congo. Its efforts
ing some 30 clubs and are now focused domesti-
restaurants over the last cally on Bratislava’s fight
three decades. against the coronavirus.
THAILAND UKRAINE VIETNAM
Forbes Ukraine debuts
with a ranking of the
country’s richest including
Vlad Yatsenko (net worth
$300 million), cofounder of
a London-based “neobank”
called Revolut.
Only eight of Thailand’s 50
wealthiest got richer in the
past year. One of them was
Red Bull heir Chalerm E-retailer Tiki was the hero
Yoovidhya; the drink of Hanoi and Ho Chi Minh
co-created by his grand- City, pledging to deliver
father brought in about 1 million orders during April’s
$6 billion in revenue. lockdown within two hours.
FORBES.COM
 CLEANING CREW
Norwegian billionaire Kjell Inge
Rokke made his fortune emptying
the oceans of oil and fish. Now he’s
building a superyacht to tidy up the
mess. Noble, or a mere reputational
26 “greenwash”? Readers were divided.

CHRIS FLAHERTY: “This is a classic

FRONTRUNNER

move out of the Carnegie/Rockefeller

playbook. But usually they wait until
they have consistent negative press
and perception before they make a
steward-of-the-environment play.”

@NELO_SIMON: “Good luck

Conversation on his discovery. It’s always
good to try something @MONKEY-

WEALTH EFFECTS
new. [Rokke’s] intentions WRNCHARMY:
and motivations are really “This is a basic
interesting.” function of how
capitalism works.
Destroy and exploit
everything, and then

I
t’s no surprise that more than half of the 2,095 people on offer platitudes
Forbes’ new list of the World’s Billionaires (May 2020) are about how you can fix
@OUTWARD_RANT: it. We are doomed.”
less wealthy than they were last year. In fact, the billionaire “The Titanic was an
ranks thinned by 226 people in the first two weeks of March experiment in grandeur
alone as the coronavirus outbreak ravaged global markets. also. The world has
a way of testing out
Amazon’s Jeff Bezos took the crown as the world’s richest person ($113 bil- experiments.”
lion) for the third year running. He was followed by Bill Gates and LVMH’s @WEIZHANGATMOS:
Bernard Arnault. In fourth place was Warren Buffett—but to plenty of “ ‘I’m part of the problem,’
readers, the folksy financial oracle remains the star of the show. “Buffett [Rokke] admits. I’m sorry
he looks at it that way. He
is low-key, most impressive,” @Alexkratochwill noted via Instagram. “In provided fish and petroleum
the game like a seasoned vet, nothing fancy, but still up top.” Others were products for people who
SALIL MUSALE: wanted those things. And
rankled by our material focus. “Read the room,” one admonished, scolding “Not really inspiring many people drive their car
us for focusing on immense riches amid a pandemic. “Y’all are celebrating after the damage to eat fish, then complain
caused.” about overfishing and cli-
wealth hoarding during a time of global financial crisis and insecurity,”
mate change at dinner.”
tweeted @MxKantEven. “All I feel is rage.”

SHIRELLE PEARSON:
“Better late than never!
THE INTEREST GRAPH Kudos for doing what
you can to reverse the
4,800,000 views Forbes’ World’s Billionaires List 2020 harm you cause.”

257,000 The Forbes Midas List 2020

210,270 The Ultimate Quarantine: This Oil Billionaire Is Building the World’s Largest Superyacht—and Claims It Will Help Save the Oceans

115,261 Trump’s Net Worth Drops $1 Billion as Coronavirus Infects the President’s Business

75,747 Larry Ellison Reveals His Big-Data Battle Plan to Fight Coronavirus in Partnership With Trump White House

68,776 Masayoshi Son Talks WeWork, Vision Fund and SoftBank Under Siege
BY KRISTIN STOLLER

65,298 All Eyes on Zoom: How the At-Home Era’s Breakout Tool Is Coping With Surging Demand—and Scrutiny

8,768 THE BOMB: Billionaire Drop-offs: Hundreds Fall Off the 2020 List Amid Pandemic-Induced Market Plunge

FORBES.COM J U N E / JJUUNL Y
E 2020
Coronavirus.org Artwork by Shepard Fairey | Amplifier.org
In Schools
and Now Beyond
Across America, schools are closed. Millions of students are facing challenges that threaten to stand in
the way of their success in school and life. At Communities In Schools, we go wherever we’re needed and
do whatever it takes to connect vulnerable students to the support they need in the classroom and beyond.
While schools are closed, we’re working in and across communities to bring resources like meals, household
supplies, and educational materials to the kids that need them most.

See how you can help students impacted by school closures: CISnational.org/COVID19

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 D A R E T O D O D I F F E R E N T LY

29

LEADERSHIP
By Alan Ohnsman and Antoine Gara Photograph by Pete Barrett for Forbes

The Man
Getting
America
Back
On Track
As the world grapples with how to
make travel safe in the age of coronavirus,
private equity billionaire WE S EDE N S is
betting $9 billion that America’s
transportation future is passenger rail.

J U N E / J U LY 2 0 2 0 FORBES.COM
30

S
CONTRARIAN • LEADERSHIP

Shouting over the noise of

diners at a Mexican restaurant on the floor of a
casino, buyout billionaire Wes Edens has come to
Las Vegas, one of the cities least friendly to mass
transit, to talk about passenger rail. “It’s not like
I had Lionel train sets in my basement,” he says.
“I wasn’t a train nut, but I love riding on trains.
It’s my favorite form of travel.”
Even a couple months ago, that was audacious
talk from the casual, sandy-haired 58-year-old
who made his fortune with Fortress Investment
Group and who co-owns the NBA’s top team, the
Milwaukee Bucks. In a post-Covid world, as peo-
ple settle in for a period of minimal travel, espe-
cially if it involves being squeezed among others,
a bet on train service sounds downright crazy, es-
pecially since it comes with a $9 billion price tag.
Edens’ vision: tax-exempt bonds to create
high-speed train lines linking Orlando to Miami
and Las Vegas to Southern California. He sees a
service modeled on the Paris-to-London Eurostar
and is so confident the plan will work that he’s
put more than $100 million of his own money
into it. If things go right, his trains could haul
nearly 20 million passengers in 2026, generate
annual revenue of $1.6 billion and operating
profit of almost $1 billion a year.
“Great fortunes are generally made by solving
the most obvious problems,” Edens says, woven
leather bracelets on his right wrist jiggling each
time he lightly thumps the table. “Drive from Mi-
ami to Orlando with your family; drive from Los
Angeles to Las Vegas. It’s a bad experience.”
So is the money pit known as U.S. passen-
ger rail. Amtrak, since its creation in 1971, has
consumed $52 billion of public funds and nev-
er made money. Its best year was the $30 mil-
lion operating loss it reported in 2019. But inside
those numbers, bloated by mandates from var-
ious members of Congress to run coast-to-coast
operations in a country with little appetite for it,
there’s a bright silver lining: Amtrak’s high-speed
Sunshine Station Acela service along the congested I-95 corridor
West Palm Beach is between Washington, New York City and Boston
the current terminus earned $334 million in operating profit last year.
for Wes Edens’
Brightline service to In other words, find the right regions and pas-
Miami. “We’ll know senger rail can work wonderfully.
how it does in 2023.”
“The lack of passenger travel by train in this
country is a travesty,” Edens says. “It’s a gigan-
tic opportunity.” His role model: the 19th-century
industrialist Henry Flagler—cofounder of Stan-
dard Oil with John D. Rockefeller—whose rail
projects essentially made the state of Florida ec-
onomically viable.
Edens and Fortress took over Flagler’s South
Florida rail line for $3.5 billion in 2007, and as
his ambition blossomed, he pitched its potential
to governors on both coasts. The effort paid off.
He secured tax-exempt bonds over the last two
years to expand his Brightline rail service from
Miami north to Orlando, a project with total con-
struction costs of $4.2 billion. In April, he won a
$600 million private-activity allocation from Cal-
ifornia. Up to $2.4 billion worth of bonds from
that award, provided to California by the federal
government, can in turn be sold to private inves-
tors. If all goes as planned, by 2023 the train will

FORBES.COM J U N E / J U LY 2 0 2 0

be whisking passengers from Las Vegas to a far-
flung Los Angeles suburb in 85 minutes at speeds
of up to 200 miles an hour. The $5 billion desert
train also snagged private-activity financing from
the federal government worth $1 billion and is
awaiting a bond allocation from Nevada.
“His ideas are so big,” says friend and Los An-
geles Lakers owner Jeanie Buss, a co-owner of
Edens’ Cincoro tequila brand alongside Michael
Jordan and the owner of the Boston Celtics. “We
need thinkers like that in this country, people
who see possibility and opportunity, because
we’ve kind of lost that as a country.”
His public-private financing model is also ex-
actly how big-ticket infrastructure will get built,
says former HUD secretary and San Antonio may-
or Henry Cisneros, who chairs a firm that special-
izes in securing funds for such projects. “There’s
pioneering work being done of a financial na-
ture to unleash private capital,” he tells Forbes.
“If there’s sufficient incentive to ensure that the
[projects] will get built and can be moneymakers,
there are investors and entities in our system of
capital that want longer-term investments.”
Edens’ grand plans are compelling; his modern
Florida and West Coast trains mean thousands
of construction jobs when they’re most needed,
considering the unemployment and economic
carnage wrought by Covid-19. But his track re-
cord suggests delivering them isn’t a certainty.
After owning Flagler’s railroad for a dozen
years, the return for Edens and Fortress investors
remains uncertain. According to Forbes’ analysis
of public pension and securities filings, Edens and
Fortress plowed about $2 billion of equity into
their rail bet, struck at the apex of the 2007 real
estate and buyout bubble, and they’ve yet to re-
coup all that cash. Staring down a near-total loss
on his career—and his rail wager—at the market
bottom, Edens has spent a decade-plus quietly
clawing investors back to even. Now, any mean-
ingful next act hinges on his train bet paying off.
Florida-based Brightline is the starting point.
Funded in 2017 with $600 million in private eq-
uity and tax-exempt bonds, the only private U.S.
passenger line began operating a 67-mile ser-
vice in the dense corridor between Miami and
West Palm Beach the next year. Its sleek yellow-
black-gray-and-white Siemens trains chug along
at a top speed of just 79 miles an hour. Bright-
line coaches feature soft white-and-blue interi-
ors, roomy seats and free Wi-Fi. Passengers book
through its app or at digital kiosks, and company
president Patrick Goddard, a Dublin native with
a luxury-hotel background, says premium cus-
J U N E / J U LY 2 0 2 0
The Vault
NEXT STOP: THE FUTURE?
“We’re looking at the
end of one civilization
and the beginning of
another,” said Shervin
Pishevar, the voluble VC
then leading the Hyper-
loop project. The rail net-
work remains incomplete 31
today, underscoring the
“dozens of engineering
and logistical chal-
CONTRARIAN • LEADERSHIP
lenges” that Pishevar
and other would-be train
tycoons face: “from
earthquake-proofing
. . . to alleviating the barf factor that comes with
flying through a tube at transonic speeds.” It might
be finished around 2030, though Pishevar won’t be
there. He left Hyperloop in 2017 amid sexual-harass-
ment allegations (which he denied). —March 2, 2015
tomer service is a priority.
But it’s far from a moneymaker. Last year it
carried just over 1 million riders, with $22 mil-
lion in revenue and a $66 million operating loss.
That doesn’t concern Edens, who says the cur-
rent operation is just a taste of what’s coming.
A big moment will arrive in 2022, when Bright-
line opens 170 miles of new track north to Orlan-
do, funded with $2.7 billion of tax-exempt bonds
and investor cash. Trains traveling up to 125
miles an hour will haul passengers between Or-
lando’s airport and Miami in about three hours,
an hour faster than by car. The ridership target
is 6.6 million people in 2023, the first full year
of service. Brightline also has a branding deal
with Richard Branson’s Virgin, renaming its Mi-
ami station Virgin MiamiCentral in 2018, and is
in talks to add a second Orlando station at Dis-
ney World and an extension to Tampa.
“Wes is a spirited investor and has a true pio-
neering spirit with these major investments in U.S.
infrastructure and, in the case of Miami, real urban
regeneration,” Branson tells Forbes. Virgin’s deal
with Brightline hasn’t included any investment.
Markets have been more skeptical. After rais-
ing $1.75 billion in high-yield tax-exempt bonds
at a whopping 6%-plus coupon in April 2019,
Brightline’s debt trades below par. “Even though
the early results are somewhat delayed and some
people have criticized them as a disappointment,
it’s still in an early stage of the ramp-up,” says
John V. Miller, head of municipal fixed income
at Nuveen, a holder of $1.4 billion, or 80%, of the
project’s total debt.
Edens’ West Coast plan is 180 miles of track
connecting Las Vegas and Apple Valley, Califor-
nia, a high-desert city 90 miles east of Los Ange-
les whose claim to fame was being home to sil-
FORBES.COM
 The Man Getting America Back on Track Cont.

ver-screen singing cowboy Roy Rogers, his wife,
Dale Evans, and his trusty horse, Trigger. Edens
bought 300 acres there for a train station and
parking structure. Trains on the line will be fully
electric—a move that pleases California officials
32 because they’ll eliminate vast amounts of ex-
haust and CO2—and run alongside Interstate 15.
In contrast to California’s highly criticized pub-
CONTRARIAN • LEADERSHIP
embarking on a 12-year odyssey to make his in-
vestors whole, leaning on his skill for making
money in lowbrow areas of finance such as sub-
prime lending. He repositioned failing bets like
Nationstar Mortgage, which became a servicer of
subprime mortgages as banks exited the troubled
business, eventually selling it for over $1 billion in
HOW TO PLAY IT 2018. Fortress pressed this idea, opportunistically

According to
licly funded high-speed rail project, state treasur- buying large portfolios of ailing subprime mort-
Bruce Flatt
er Fiona Ma sees no local risk if it flops. “There’s gages to service from AIG and Citigroup, which
When times are
no hit to California taxpayers,” she says. “It’s just tough, having it also exited in 2018 at a $3 billion–plus profit.
the allocation of [federal] bonds.” capital that can’t “We went into the financial crisis high on heli-
The trim, 6-foot-1 Edens, dressed in a low-key be redeemed from um,” says investor Michael Novogratz, Edens’ for-
flighty inves-
black pullover, white T-shirt and chinos, navi- tors is critical. A mer partner, who went on to make a fortune bet-
gated an unlikely path to his new-age industrial- permanent war ting on cryptocurrencies. “Wes did a lot of really
chest is the ballast
ist vision. The grandson of a homesteader raised of Wes Edens’ new
crafty things” to claw his way back, he adds. “He
near Helena, Montana, he was educated at Ore- industrialist vision kind of salvaged what would have been a real di-
gon State and cracked into Wall Street in 1987 at in infrastructure. saster for investors and his reputation.”
He’s up against
Lehman Brothers. After making partner, he left billionaire Bruce Unable to corral large amounts of money for
in 1993 for fledgling bond manager BlackRock Flatt of Canada’s buyouts from pensions, Edens found the cash by
before founding Fortress in 1998. Brookfield Asset turning Fortress into a financial alchemist, shuf-
Management,
Entering 2002, Fortress was mite-sized, with who oversees an fling assets around and conjuring six public com-
just $1.2 billion in assets, but it grew quickly. empire with $60 panies in a six-year stretch. He spun out four new
billion in cash to
Edens’ first two buyout funds, raised amid the invest in Covid-
listed firms between 2013 and 2015 that manage
dot-com bust, were among Wall Street’s best per- crushed markets assets in media, mortgages, senior housing facil-
formers, and Fortress became a giant in hedge and permanent ities and golf courses—and which pay Fortress
capital vehicles
funds and managing complex pools of debt. As- worth $100 bil- hefty fees. Edens also shifted a large infrastruc-
sets soared 25-fold over a five-year stretch. Edens lion, including ture fund into a vehicle called Fortress Transpor-
outraced billionaires such as Blackstone’s Ste- infrastructure, tation and Infrastructure, which houses rail facil-
where Brookfield
phen Schwarzman and Henry Kravis of KKR recently closed on ities and aircraft leasing operations and was list-
by taking Fortress public in February 2007. Its a dedicated $20 ed in 2015. In 2019, he created yet another public
billion fund. The
shares soared 89% on their first trading day; cash will help it
concern, New Fortress Energy, with a burgeoning
Edens and his partners became billionaires. add bargains to liquefied natural gas business and a goal to sup-
The coronation was premature. Fortress de- a portfolio with ply hydrogen for electric-power generation.
16,500 kilometers
scended into freefall as Edens, armed with $9.4 of natural-gas The moves yielded Edens unheralded wind-
billion of buyout funds raised in 2006 and 2007, pipelines and 6.6 falls and new fee streams. When Fortress sold it-
made mistake after mistake. He bet on a sub- million electricity self to SoftBank in 2017, earning Edens and his
and gas connec-
prime lender, Nationstar Mortgage, just before tions, 22,000 partners a pretax $1.4 billion, 40% of the fees
defaults soared, and pressed an $8.9 billion buy- kilometers of it earned that year were paid to Fortress by the
railroad tracks, 13
out of casino operator Penn National Gaming, port terminals and
companies Edens had devised. The pandemic hit
costing the firm a $1.5 billion termination fee 51 data centers. many of them hard because of their heavy expo- HOW TO PLAY IT BY ANTOINE GARA. PATRICK WELSH FOR FORBES
when Fortress pulled out. Even a wager on ski- “The one thing sure to mortgages, real estate, newspapers and
that really matters
ing—Fortress’ 2006 takeover of Intrawest, the is that a busi- aircraft leases. But the newer ones, particularly
owner of Whistler, Steamboat and Squaw Val- ness can make it the rail and energy business, are now his focus.
ley—was a catastrophe. When the 2010 Vancou- through this period “At this point in my life, I’m more of a build-
intact and without
ver Olympics arrived, Edens was warding off undue harm,” Flatt er,” Edens says, adding, “upgrading our nation’s
foreclosure threats and working to sell assets says. “It’s usually a infrastructure and building high-speed trains
function of having
like Whistler. From 2008 through 2010, investors made prepara-
can be this generation’s Hoover Dam and Ten-
pulled $12.8 billion from Fortress, which posted tions before the nessee Valley Authority.”
$3.2 billion in combined losses during the crisis, tide went out.”
and its stock plunged. Edens spent years salvag-
ing bad investments. “It’s hard to express how FINAL THOUGHT
difficult 2007, 2008 and 2009 really were in the “INFRASTRUCTURE IS MUCH MORE
business,” he recalls. IMPORTANT THAN ARCHITECTURE.”
With his back against the wall, he got creative, —Rem Koolhaas

FORBES.COM J U N E / J U LY 2 0 2 0
 NAVIGATE
UNCERTAIN TIMES
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 CUSTOM ADVERTISING SECTION
Participants in the Comcast 2019 ERG Mentorship Program’s capstone event.
BUILDING
Always on the lookout for learning
opportunities, Carla Stanley jumped at
the chance to participate in Comcast’s
CAREERS
2019 Employee Resource Group (ERG)
Mentorship Program. A f irst-time
mentee, she was paired with Kristy
THROUGH
Mullen—a former mentee who had
stepped into the mentor role.
The match couldn’t have been more
perfect. Stanley is a customer account
MENtoRING
executive who works with Comcast’s small
and medium-sized business customers.
Mullen, senior manager of customer
ser v ice strateg y a nd operations for
Xfinity Mobile Care, is passionate about
This article is a feature story from supporting employees who are on the front
Comcast NBCUniversal’s 2020 lines of customer care.
Values Report. Read the full report at Both women have found camaraderie
comcastcorporation.com/valuesreport. and career support through Comcast’s
ERGs—employee-led organizations across
all business units that help us build a more
inclusive and collaborative workplace.
“Mentorship is important to our company
and our efforts to retain top talent, engage
our employees and promote diversity and
inclusion,” says Karen Dougherty Buchholz,
Comcast’s chief diversity officer and senior
vice president of administration. “Having
people who are invested in helping others to
reach their career and personal goals is vital
to our culture and to creating opportunities
for professional success throughout our
employee base.”
During the nine-month mentorship
program, Stanley and Mullen met at least
once a month, either in person or over the
phone, and often traveled to each other’s
workplaces to gain new perspectives on
the company. They participated in events
facilitated by ERG Mentorship Program
leaders and had informal conversations
and email exchanges to discuss career
development opportunities and challenges.
Stanley, for example, hopes to leverage her
experience in the program to explore future
job possibilities at the company.
“The mentorship program exceeded my
expectations,” says Stanley, a member of
the Black Employee Network, the Women’s
Network and the MyAbilities Network
ERGs. “I was willing to stretch myself and
push myself into new situations, and I
learned so much. It opened my eyes to all the
opportunities that exist at Comcast.”
Each year, the program builds toward an
optional capstone project that challenges
mentees with researching and developing
strategic business plans, which they
present to an executive panel of judges.
As part of the 2019 winning team, Stanley
learned what it takes to bring a new idea
to market and how to create and present a
successful business case.
The ERG Mentorship Program helps
engage employees, retain talent, prepare
future leaders and strengthen diversity,
inclusion and equity within our company.
Both Stanley and Mullen say they would
participate again and have encouraged
their peers and colleagues to apply.
“People usually talk about mentoring in
terms of what the mentee gains from the
mentor,” says Mullen. “But I also gained a lot
as a mentor. It made me a better listener, a
better coach and a better communicator and
leader. Getting to know Carla and helping
shape her goals and vision for her future has
been a fantastic experience.”
At the intersection of people,
technology, and communities,
Comcast NBCUniversal is working
to build opportunity for all.
Read our 2020 Values Report at
comcastcorporation.com/valuesreport
 CONTRARIAN
By Alan Ohnsman and Kenrick Cai
Intelligence Agents
36
CONTRARIAN • TECHNOLOGY
Normally, humans train artificial-intelligence systems to replace them.
ASAP P ’ s software trains customer-service reps to be better humans.
I If you’ve ever felt your
blood boil after sitting on hold for 40 minutes
before reaching an agent . . . who then puts you
back on hold, consider that it’s often even worse
on the other end of the line. A customer-service
representative for JetBlue, for instance, might
have to flip rapidly among a dozen or more com-
puter programs just to link your frequent-flier
number to a specific itinerary.
FORBES.COM
TECHNOLOGY
Photograph by Janie Osborne for Forbes
“Imagine that cognitive load, while you have
someone screaming at you or complaining about
some serious problem, and you’re swiveling be-
tween 20 screens to see which one you need to be
able to help this person,” says Gustavo Sapoznik,
34, the founder and CEO of ASAPP, a New York
City–based developer of AI-powered customer-
service software.
Unbound
ASAPP CEO
Gustavo Sapoznik
near Bozeman,
Montana. The
New Yorker and
passionate pilot
flew west during the
Covid-19 pandemic.
Sapoznik remembers just such a scene while
shadowing a call-center agent at a “very large”
company (he won’t name names), watching the
worker navigate a “Frankenstack” patchwork of
software, entering a caller’s information into six
different billing systems before locating it. “That
J U N E / J U LY 2 0 2 0
was an eye-opening moment.”
The problem has only gotten worse during the AI 50: America’s CRESTA
pandemic. Call centers for banks, finance com-
panies, airlines and service companies are being Most Promising CUSTOMER SERVICE
Assists customer-service
agents in real time.
overrun. Call volumes for ASAPP’s customers
have spiked between 200% and 900% since the
Artificial-Intelligence DATAIKU 37
crisis began, according to Sapoznik. Making call
centers work isn’t the sexiest use of cutting-edge
Companies SOFTWARE DEVELOPMENT
Develops tools for enterprises

CONTRARIAN • TECHNOLOGY
AI, but it’s a lucrative one. to build AI apps.
According to estimates from Forrester Re-
ABNORMAL SECURITY DATAROBOT
search, global revenues for call centers are around CYBERSECURITY SOFTWARE DEVELOPMENT
$15 billion a year. In all, ASAPP has raised $260 Scans inboxes for Makes software for companies
million at a recent valuation of $800 million, per malicious emails. to develop AI models.
data from Pitchbook. Silicon Valley heavy hitters
including Kleiner Perkins chairman John Doerr AISERA DEEPMAP
WORKFLOW SOFTWARE AUTOMOTIVE
and former Cisco CEO John Chambers are on Automates IT, sales and Produces 3D maps for
ASAPP’s board, along with Dave Strohm of Grey- customer-service tasks. self-driving vehicles.
lock and March Capital’s Jamie Montgomery.
Clients include JetBlue, Sprint and satellite TV AMP ROBOTICS DOMINO DATA LAB
ENVIRONMENTAL ENGINEERING SOFTWARE DEVELOPMENT
provider Dish, all of whom who sign up for multi-
Makes robots that identify Provides tools for data
year contracts contributing to ASAPP’s estimated and sort recyclables. scientists.
$40 million in revenue, according to startup
tracker Growjo. ANDURIL INDUSTRIES DOXEL
ASAPP has drawn this investor interest by flip- DEFENSE PRODUCTIVITY SOFTWARE

ping AI on its head. For years engineers have per- Builds surveillance systems Detects and tracks
for national-security purposes. construction-project problems.
fected artificial intelligence to perform repetitive
tasks better than humans. Rather than having ANYSCALE DRIFT
people train AI systems to replace them, ASAPP SOFTWARE DEVELOPMENT PRODUCTIVITY SOFTWARE
makes AI that trains people to be “radically” Helps software developers Builds chatbots to automate
more productive. make machine-learning apps. customer interactions.
“Pure automation capabilities are [used] out of
an imperative to reflect costs, but at the expense
ASAPP DRISHTI
CUSTOMER SERVICE PRODUCTIVITY SOFTWARE
of customer experience. They’ve been around Assists customer-service Creates data sets by digitizing
for 20 or 30 years but they haven’t really solved agents in real time. human actions in factories.
much of the problem,” Sapoznik says. ASAPP’s
thinking: “If we can automate half of this thing ATOMWISE EMBARK TRUCKS
HEALTH CARE AUTOMOTIVE
away, we can get to the same place by making Discovers drugs with medical Creates software for
people twice as productive.” potential. self-driving trucks.
The company is a standout on Forbes’ second
annual AI 50 list of up-and-coming companies to AURORA EXTRAHOP
AUTOMOTIVE CYBERSECURITY
watch, rated highly for its use of artificial intel-
Makes software for Detects cloud cybersecurity
ligence as a core attribute by an expert panel of self-driving cars. threats.
judges. Its focus on using AI to keep humans in
the loop is also what sets ASAPP apart, although BIOFOURMIS FIDDLER LABS
it’s competing in the same call-center sandbox as HEALTH CARE SOFTWARE DEVELOPMENT
fellow AI 50 listees Observe.ai of San Francisco Monitors patients’ health Helps companies build and
using wearables. monitor AI apps.
and Cresta, which is chaired by AI legend Sebas-
tian Thrun, the Stanford professor who greenlit BLUE HEXAGON GENESIS THERAPEUTICS
Google’s self-driving car program. CYBERSECURITY HEALTH CARE
ASAPP’s focus is natural language processing Detects network or cloud Discovers drugs with
and converting speech to text using proprietary cyberattacks. medical potential.
technology developed by a group led by a found-
ing member of the speech team for Apple’s Siri.
CEREBRAS SYSTEMS GHOST
HARDWARE AUTOMOTIVE
Its software then displays suggested responses or Builds computing chips Puts self-driving tech into
relevant resources on a call-center agent’s screen, for AI use. conventional cars.

J U N E / J U LY 2 0 2 0 FORBES.COM
 Intelligence Agents Cont.
GONG
PRODUCTIVITY SOFTWARE
Analyzes sales
conversations.
38
HIVEMAPPER
DATABASE SOFTWARE
Turns video footage into
3D maps.
CONTRARIAN • TECHNOLOGY
ICERTIS
PRODUCTIVITY SOFTWARE
Analyzes businesses’
contract risks.
KARIUS
HEALTH CARE
Looks for pathogens in
blood tests.
KRISP
TECHNOLOGIES
COMMUNICATION SOFTWARE
Removes background
noise from calls.
LEMONADE
FINANCIAL SERVICES
Sells insurance using bots.
L I LT
PRODUCTIVITY SOFTWARE
Assists human language
translators.
MOVEWORKS
PRODUCTIVITY SOFTWARE
Resolves IT tickets
autonomously.
NURO
AUTOMOTIVE
Produces self-driving
delivery robots.
OBSERVE.AI
CUSTOMER SERVICE
Analyzes customer-
service calls.
P O N Y. A I
AUTOMOTIVE
Makes software for
self-driving cars.
RECURSION
HEALTH CARE
Discovers potential drugs
for rare diseases.
SAFEGRAPH
DATABASE SOFTWARE
Creates data sets by
tracking commercial
spaces.
FORBES.COM
SCALE AI
SOFTWARE DEVELOPMENT
Helps engineers speed up
AI development.
SHIELD AI
DEFENSE
Makes mapping drones
for national security.
SIGOPT
SOFTWARE DEVELOPMENT
Develops software for
enterprises to build AI
models.
SYNACK
CYBERSECURITY
Spots cybersecurity
vulnerabilities.
TEXTIO
PRODUCTIVITY SOFTWARE
Gives suggestions on how
to improve writing.
TUSIMPLE
AUTOMOTIVE
Builds self-driving trucks.
TWOXAR
HEALTH CARE
Discovers drugs with
medical potential.
UIPATH
WORKFLOW SOFTWARE
Creates bots that carry
out repetitive processes.
UNITY
TECHNOLOGIES
SOFTWARE DEVELOPMENT
Provides software for app
or game development.
UPSTART
FINANCIAL SERVICES
Partners with banks to
price loans.
VISE
FINANCIAL SERVICES
Offers financial planning
and management.
VIZ.AI
HEALTH CARE
Analyzes stroke risk from
brain images.
ZEBRIUM
PRODUCTIVITY SOFTWARE
Detects and resolves
software problems.
minimizing the need to toggle between applica-
tions. Sapoznik and his engineers also studied
the most effective human representatives, trying
to replicate their expertise into ASAPP software
via machine learning. That software then coaches
call-center staff on effective ways to respond to
customer queries and tracks down critical infor-
HOW TO PLAY IT mation. If a caller asks how to cancel a flight, for
According to
example, ASAPP software automatically pulls up
Karina Funk
helpful documents for the agent to browse. If a
If call centers
sound inefficient, customer reads a 16-digit account number, it’s in-
imagine how stantly transcribed and displayed on the agent’s
clunky local gov- screen for easy reference.
ernments’ systems
are. Plano, Texas– When things go right, companies using ASAPP
based Tyler Tech- technology see the number of calls successfully
nologies makes
software to bring
handled per hour increase from 40% to more
disjointed opera- than 150%. That can mean lower stress for call-
tions for cities and center workers, which in turn reduces the high
states under one
digital roof. For turnover associated with that line of work.
instance, it moves A licensed pilot with a fondness for classical
state courts from music who studied math at the University of Chi-
paper to electronic
records and lets cago, Sapoznik first applied his coding skills to
residents pay their
utility bills online,
his family’s real estate and financial business in
earning multiyear
Miami. “I’d been doing some work in investments
contracts as large where you build machine-learning product capa-
as $85 million. bilities to trade the markets. The impact there is
Karina Funk, who
that there’s a number that goes up or goes down,”
co-manages
Brown Advisory’s he says. Merely making money didn’t excite him.
$2.4 billion (assets) Sapoznik hopes that optimizing call centers is
Large Cap Sus-
tainable Growth just a start for ASAPP, which he founded in 2014.
Fund, has a He’s actively searching for similar “gigantic-size”
$60 million stake
in Tyler and thinks
business opportunities with “brokenness and tons
demand for its of interesting data.” He thinks ASAPP can do that
services will only because it’s built like a research organization—80%
grow. “They can
of its 300 employees are researchers or engineers.
handle everything
from a 911 call to “The exciting thing about ASAPP is not so
a jail admission much what they’re going after now, but whether
digitally,” Funk
says. “Their work is or not they can go beyond that,” says Forrester
imperative in what analyst Kjell Carlsson. “They, like so many of us,
we’re experiencing
now with Covid.”
see the incredible potential of [using] natural
HOW TO PLAY IT BY JEFF KAUFLIN; PATRICK WELSH FOR FORBES
language processing for augmented intelligence.”
Summarizing ASAPP’s potential, Sapoznik
draws on his experience as a pilot—in aviation,
automation has steadily transformed the cock-
pit. “It’s increased safety from a pretty dramatic
perspective, and it hasn’t gotten rid of pilots
yet,” he says. “It’s just taken away chunks of
their workloads.”
FINAL THOUGHT
“THE COMPUTER CAN DO MORE
WORK FASTER THAN A
HUMAN BECAUSE IT DOESN’T HAVE
TO ANSWER THE PHONE.”
—Joey Adams
J U N E / J U LY 2 0 2 0
In uncertain
times, you can be
certain of this:
Your generosity
will make
a difference.

Today, thanks to donors like you, The Salvation Army is helping those affected by COVID-19.
We are there for the most vulnerable in our community. For those whose wages are gone, for those
who need food, for those who have no place to call home, and for so many others who desperately
need help and hope in this time of crisis. To see how you can continue to make a difference in your
community, give today at SalvationArmyUSA.org.
 CONTRARIAN ENTREPRENEURS
By William Baldwin Photograph by Tim Pannell for Forbes

The Bureaucrat Wrestler

40
CONTRARIAN • ENTREPRENEURS

As the lodging industry collapses amid the pandemic, entrepreneur WA R R EN M E Y E R has found
the only sure thing. His biggest obstacle: government lawyers.

W Warren Meyer, hospitality

entrepreneur, looks out with pity on his industry.
“There are restaurants that are closing for good,”
will break even this year, which counts as a big
win for his decimated field in 2020.
It boils down to the old real estate axiom of loca-
tion, location, location. While it may be years before
people crowd into a hotel lobby, they are clamoring
to get into his establishments: Meyer’s Recreation
Resource Management runs campgrounds and
trailheads on publicly owned parkland in eight
states. His clients: the U.S. Forest Service, state and
Happy Campers

Warren Meyer,
not far from his home
office in Phoenix.
While some travel
companies are off
95%, his bookings
for June are up 5%
from last year.

he says. “Airlines have to give up half their seats.” county park departments and dam owners like the
Relatively speaking, he’s prospering: As Memorial Tennessee Valley Authority. They are sometimes
Day approached, a third of his 150 locations were grudging partners, a reflection of the belief among
gearing up to open, and he’s anticipating that he environmentalists and policymakers that there is

FORBES.COM J U N E / J U LY 2 0 2 0
 something villainous about a capitalist making a
profit off public land. But as predictably as autumn
leaves falling, government agencies running short
of cash want to discuss a lease.
At every location, Meyer says, he pays more in
rent to the government than he keeps for himself
as profit. Most of those agencies were losing money
on the campground before handing it over to RRM.
The pandemic is a mortal threat to the travel in-
dustry, but not to RRM. Most of its visitors (2.4 mil-
lion last year) live within a gas tank’s drive of their
destination. And to locked-down America, the great
outdoors never looked so appetizing. At one of his
Arizona camps, Meyer says, a hundred frustrated
customers jumped over closed gates to use a park
illegally. “A lot of government campgrounds were
built with social distancing as the ethic,” he says.
The price is right, too: usually between $22 and
$26 a night, with a 50% discount for Forest Service
visitors, roughly a third of them, who whip out a
senior-citizen pass. A site with a hookup to electric,
water and sewer lines is a few bucks extra.
Economic chaos, paradoxically, may even help
Meyer expand. In the recession a decade ago, as
legislative appropriations for maintenance and
improvements dried up, state park departments
begged him to sign on and pay for amenities like
cabins and new bathrooms. Which he’s willing to
do, if the lease is long enough. His contracts run
from five years to 50.
Ask Meyer what magic he works to turn a gov-
ernment money loser into a private-sector money-
maker, and this 58-year-old libertarian will give you
an earful. It boils down to this: A for-profit conces-
sionaire is motivated to make an operation more ef-
ficient. A government agency is motivated to make
it less efficient. In the government, he says, “pay and
prestige are based on size and staffing.”
A government parks department hires environ-
mental-science graduates who collect full-time
salaries and costly benefits. With rare exceptions,
RRM hires retirees who live in their own RVs at a
campground. A lot of them are couples who split
up the chores. Most of them are on Medicare. They
work part-time and start at minimum wage.
Worker exploitation? Maybe not. Most of the
400 workers return for the next season. Meyer gets
5,000 applicants for the 50 to 100 vacancies.
PATRICK WELSH FOR FORBES
It was spluttering about left-wing economics
that got Meyer ensnared in park management. Not
quite two decades ago he published a blog post
about privatizing government services. A reader
who owned a park concession company wanted to
know if Meyer had the courage of his convictions.
Buy me out! Meyer did.
J U N E / J U LY 2 0 2 0
And so, at age 40, Meyer left freelance consulting
and applied his degrees, in engineering from Princ-
eton and business administration from Harvard, to
making park visitors comfortable. It’s a hazardous
line of work. A bear slashed a camper (Meyer set-
tled a damage claim); an alligator took a liking to 41
a Florida swimming hole used by children. But for
HOW TO PLAY IT Meyer, the scariest critters walk on two legs.
CONTRARIAN • ENTREPRENEURS
by William Baldwin
RRM took over a park in California suffering
Aging suburban-
ites, furloughed,
from a serious case of deferred maintenance. Gov-
quit the workforce, ernment inspectors came in and condemned a
sell their homes deck with rotting wood. Meyer obediently had the
and buy RVs.
Who’s a winner? deck removed. Then he was cited for removing the
Winnebago Indus- deck without a deck-removal permit. “I thought I
tries. It will suffer was going to jail,” he says. He escaped that con-
a viral dip this
year, with plants tretemps only to get in trouble with California
shut down for a authorities again for putting a kiosk on a parking
period, but it will
recover quickly; its
area. The offense: failing to do a soil analysis. To
enterprise value satisfy the bureaucrats, RRM had the asphalt cut
is 12 times Ebitda. open, took a soil sample, then replaced the asphalt.
Another survivor
in the post-pan- Ferocious lawyers lurk everywhere, especially
demic economy in California. A state law mandates a half-hour
is Equity LifeStyle unpaid lunch break. Some workers there asked
Properties, a real
estate invest- Meyer, in writing, for permission to work through
ment trust that their break so they could earn an extra half-hour of
owns land rented
out for manufac-
pay. He agreed. Then a lawyer showed up with de-
tured homes and mands for damages. The arrangement was invalid
motorhomes. It’s because there has to be a separate lunch document
a cross between
trailer parks, for each day rather than one document for all the
resort destinations days. Gotcha! Meyer settled the case.
and retirement He refused to settle the lawsuit from the Califor-
communities. It’s
tracking a power- nia worker who claimed she was intimidated by
ful demographic her manager—who, as it happens, was her sister.
trend. ELS’s en-
terprise/Ebitda is
But getting the case dismissed cost Meyer $25,000.
high at 27 but not The absurdities of contending with the govern-
unjustified. ment as landlord, regulator and adjudicator would
William Baldwin is exhaust the patience of most business owners. For
Forbes’ Invest-
ment Strategies
those who can withstand the torment, though, the
columnist. rewards are ample enough. Meyer says that in a
good year RRM clears a high single-digit profit
margin on revenue of $14 million.
Meyer has 6,000 camping spots in his empire.
There are another 380,000 sites on public land
that he could go after, and he aims to double the
size of his operation within a few years. “If I want-
ed to sit on the beach I could sell for three times
Ebitda,” he says. “But I wouldn’t be able to put the
money in Treasurys and get the same cash flow.”
He plans to keep at it, braving the elements.
FINAL THOUGHT
“THE CIVIL SERVICE: A DIFFICULTY
FOR EVERY SOLUTION.”
—Lord Samuel
FORBES.COM
 CONTRARIAN STRATEGIES
By Christopher Helman Photograph by Taylor Castle for Forbes

Dirty Moves
42
C O N T R A R I A N • S T R AT EG I E S

For generations, the N AVAJ O relied on coal mining for good jobs and to fill the tribal coffers.
But with the end in sight for unclean power, the tribe created a company
to get them through the transition—yet, unbelievably, it bought them more mines.

I
How could the way out of coal be . . . more coal?

Itʼs a hardscrabble
existence for many of the 175,000 Na-
vajo who live on the 27,000 square
miles of tribal lands that stretch across
the borders of Utah, Arizona and New
Mexico. The median household income
hovers around $30,000 a year, and
more than a quarter of homes have no
electricity. In early May, the corona-
virus was spreading so fast that New
Mexico blockaded roads in and out of
Gallup, the picturesque town on the
edge of the Navajo nation known as
the “heart of Indian country.” The pan-
demic followed a particularly tough
winter for some families. In November,
the Kayenta strip mine and the Navajo
Generating Station it supplied, both on
tribal lands, finished shutting down,
eliminating 800 relatively high-paying
jobs and a free source of coal used by
Miner With a Cause many Navajo to heat their homes.
“What makes us different is So now, the Navajo Transitional
the sense of duty we owe to Energy Company (NTEC) trucks coal
the people and the land,”
says NTEC chairman around the reservation. Tribe members
Timothy McLaughlin,
shown in his Spokane, queue to get a load dumped into their
Washington, law office. pickups from a Bobcat dozer. “They’d
love to have a good job and a gas fur-

FORBES.COM J U N E / J U LY 2 0 2 0
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 nace. But it’s just not the reality,’’ says NTEC chair-
man Timothy McLaughlin, a 40-year-old attorney
who grew up on the reservation and spent three
and a half years as a federal environmental law-
yer before turning to tribal law. It’s hard to worry
44 about your carbon footprint, he adds, “when the
alternative is freezing to death.”
Delivering free coal is a strange task for NTEC, HOW TO PLAY IT
C O N T R A R I A N • S T R AT EG I E S

by Jon Markman
which is already an odd entity. The company was
Brookfield Renew-
created seven years ago with the express purpose able Partners
of transitioning the Navajo through the twilight earns money
of the coal business. It planned to do that in two by investing in
renewable power
ways. First, by taking over mining operations on projects globally.
the reservation from big international compa- It has 5,288 hy-
nies, thereby keeping more money in the tribe to droelectric, wind
and solar power
accomplish NTEC’s primary goal: to help the Na- generation and
vajo build up other industries to replace disap- storage facilities
located in North
pearing coal royalties and jobs. Everything began and South Amer-
according to plan: In 2013, NTEC took over own- ica, Europe and
ership of the Navajo Mine from BHP Billiton, sav- Asia. Apart from
scale, Brookfield’s
ing 700 jobs at the mine and the accompanying investment appeal
Four Corners power plant. It’s been a good in- is its objective to
vestment, generating $233 million in cash for the achieve 12% to
15% annualized
tribe under NTEC’s watch. total returns, in-
So in 2018, Navajo leaders asked NTEC to con- cluding a healthy
cash distribution.
tinue the strategy and negotiate to acquire the The current annual
Kayenta mine and Navajo Generating Station. dividend yield is
What NTEC did instead almost defies belief. Un- 4.4%. The mean
revenue forecast
able to agree how to share future decommission- for 2020 is $3 bil-
ing costs with the current owners, who wanted lion, an increase of
to cap their liability costs, NTEC walked on the 2% year over year.
Free cash flow in
deal. The owners shut down the power plant and 2019 was $1.02
mine, wiping out $40 million a year in coal royal- billion, or $5.81 per
share. That’s more
ties, about a quarter of tribal revenue. than enough to
Then, last August, NTEC announced a deal to maintain a strong
acquire three enormous mines in Wyoming and cash dividend and
make new invest-
Montana from bankrupt Cloud Peak Energy for ments to grow the
about $100 million and the assumption of all business.
cleanup costs. The acquisition increased NTEC’s Jon D. Markman
coal output more than tenfold to nearly 60 mil- is president of aren’t even on Navajo land.
Markman Capital
lion tons, 9% of total U.S. tonnage, making the Insight and editor NTEC CEO Clark Moseley, a 68-year-old min-
Navajo America’s third-largest coal miners. of Fast Forward ing engineer, says the Cloud Peak deal was just
Tribal leaders were shocked. NTEC, although Investing. too good to pass up and insists NTEC couldn’t
owned by the tribe, was set up as a semi-autono- discuss confidential negotiations, even with tribal
mous organization. It wasn’t required to consult leaders. “The purchase was a unique opportunity,
with the tribe on the purchase—and it didn’t. Na- as we could never have acquired anything close
vajo President Jonathan Nez branded the move to this potential revenue stream in the open mar-
ULTRADISTANCIA FEDERICO WINER

“disrespectful” and yanked the tribe’s financial
backstop of NTEC, forcing it to pay more for hun-
dreds of millions’ worth of surety bonds (mine
decommissioning insurance, basically). “The tide
was moving toward renewables,’’ Navajo Vice
President Myron Lizer, who was elected with Nez
in 2018 on a green-energy platform, told Forbes.
“Now we own four coal mines”—three of which
ket,” he says. In the year before NTEC acquired
the three mines, Cloud Peak generated $67 mil-
lion in gross profit on $832 million in revenue.
This might just be a case of a carpenter who
sees every problem as a nail. Moseley has spent
five decades working in the coal industry, and
mining has been the reservation’s economic
lodestone for just as long. The Four Corners re-

FORBES.COM J U N E / J U LY 2 0 2 0

gion has some of the nation’s richest coal beds, Expiration Date
and thousands of mining jobs paying an average NTEC’s Navajo Mine
of $100,000 once provided a foundation for the in San Juan County,
New Mexico, produces
Navajo middle class. But it couldn’t last. The in- 4 million tons of coal
exorable death of the Navajo coal industry began a year but is expected
to close in 2031, as the
nearly two decades ago when California decided Arizona utility it ulti-
mately serves moves
that power generated by burning coal was too to green power.
dirty to use. Neighboring states followed that
lead. Across the U.S., the amount of coal being
burned in power plants is at a 42-year low.
Good thing NTEC isn’t relying only on do-
mestic demand, then. One overseas customer is
Japanese utility Jera, which has contracted to
buy about 1 million tons of coal per year from
NTEC. That tonnage will help fuel the two new
coal-burning power plants Jera is building in
J U N E / J U LY 2 0 2 0
45
C O N T R A R I A N • S T R AT EG I E S
Fukushima Prefecture, where they will replace
the electrical output of the nuclear reactors that
melted down in 2011.
All well and good, but it’s hardly transitioning
away from coal or improving relations with tribal
leaders. “We’re conscious of their reaction and
understand their position,” says NTEC chairman
McLaughlin. “Moving forward we’ll make sure
we communicate on a constant basis.” They’ve
already communicated their next move: investing
in a rare-earths mine in west Texas.
FINAL THOUGHT
“DOING A BAD THING FOR A GOOD
END JUST SOURS THE GOOD.”
—Janice Hardy
FORBES.COM
 CONTRARIAN INVESTING
By Antoine Gara Photograph by Murdo MacLeod for Forbes

Optimism Rules
46
CONTRARIAN • INVESTING

Scottish money manager BAI L L I E G I F FO RD didn’t see the pandemic coming,

but a positive attitude toward the overpriced momentum stocks in its $245 billion

W
portfolio turned out to be perfect for life under lockdown.

When analysts and

portfolio managers pitch ideas at Edin-
burgh, Scotland, investment firm Baillie
Gifford, there’s one rule everyone must
follow. For the first 20 minutes, anyone
speaking about the idea has to be posi-
tive, contributing only to the bullish case
for the stock. Say anything critical and
you’re swiftly escorted from the room.
The optimism rule is designed to
thwart what the partners believe is a
natural tendency for smart people to be
skeptical and shoot down ideas prema-
turely. But these days the rule takes on
even more meaning as despair over the
pandemic spreads. Like nearly everyone
in the Western world, the firm’s 1,317 em-
ployees are no longer able to congregate
at its headquarters, where an imposing
sign over the entrance reads ACTUAL INVES-
TORS THINK IN DECADES. NOT QUARTERS.
“One of the things we feel is absolutely
incumbent on us at this moment is to
encourage the companies we back to be

It’s Always Sunny in Scotland

GUTTER

Baillie Gifford partner James

Anderson, pictured in his Edinburgh
garden, prefers perennials.

FORBES.COM J U N E / J U LY 2 0 2 0
 brave,” says James Anderson, 60, a co-manager of
Baillie Gifford’s flagship strategies and a 37-year vet-
eran of the 112-year-old investment firm. Baillie Gif-
ford has gone so far as to mail letters to its portfolio
companies, encouraging CEOs to forestall layoffs
and cost cutting. It even offered new capital so they
could maintain their growth plans.
It’s an unusual stance for a large asset manager to
take in a business landscape fraught with risks. But
among fund managers, Baillie Gifford, with its $245
billion under management, is an outlier. The firm
pays little attention to traditional valuation metrics
such as earnings per share or price/earnings ratios.
It’s singularly focused on three things—growth,
competitive advantage and staying power—and it
doesn’t mind parking its investors’ money in stocks
that would make value investors seasick. Here’s a
sampling: Zoom, the now-ubiquitous video-chat
company, which has a price/earnings ratio of 400;
e-commerce upstart Shopify, at 50 times revenues;
online furniture merchant Wayfair, which lost
$1 billion in 2019, double that of the prior year. But
these very stocks, plus a good number of the 30 to
50 others held in each of their 14 mutual fund port-
folios, are exactly the companies benefiting from
existing trends accelerating during the crisis.
Name a hot coronavirus stock, and Baillie Gif-
ford discovered it and built a massive position
before the virus spread. The firm has long-held
multibillion-dollar positions in Alibaba, Amazon,
Tencent, Microsoft and Netflix. Newer buys include
Zoom, Covid-19 vaccine hopeful Moderna, digital
health upstart Teladoc and online textbook seller
Chegg. It’s a large shareholder in Wayfair, which
first plunged as Covid-19 spread, then rose eightfold
when sales skyrocketed as quarantined customers
made home improvements. Baillie Gifford is also
a top holder of surging Covid stocks Grubhub and
Peloton, the cycling platform many are using to
burn off their “quarantine 15” weight gain.
Baillie Gifford’s returns to investors in 2020 have
been nothing short of miraculous. Scottish Mortgage
Trust, the $10 billion flagship Anderson co-manag-
es, and a newer Long-Term Global Growth Fund
with $40 billion in assets, are up about 20% year
to date, beating the S&P 500 index by 30 percent-
age points. Both have posted similar average annual
returns over the past five years, more than doubling
the index. The firm’s newer funds centered on U.S.
companies driving “Positive Change” have also done
well, climbing as much as 25%. Even funds that are
down have trounced their benchmarks.
While private equity firms and corporate chiefs
GUTTER
have spent the past decade making companies lean
and leveraged (see story, page 74), Baillie Gifford’s
J U N E / J U LY 2 0 2 0
stock pickers ignore all that and seek out compa-
nies investing in research and technology. They
particularly like projects that might not be imme-
diately profitable but could propel the economy a
decade from now. Quantitative investing is all the
rage, but the Scottish firm is moving in the other 47
direction, trading little and spending its research
budget sponsoring literary prizes, investigating new
CONTRARIAN • INVESTING
philosophical ideas and endowing university chairs
in genetics and computational biology.
Based in Edinburgh’s 18th-century “New Town,”
a short walk from the city’s medieval “Old Town,”
Baillie Gifford is too big and too old to be dismissed
as simply lucky. The firm was founded in 1908,
shortly after the Panic of 1907, by Colonel Augustus
Baillie and barrister Carlyle Gifford.
The colonel had made his name fighting in the
Second Boer War, while his partner, Gifford, later
became known for helping finance Britain’s World
War II effort by selling the crown’s trove of overseas
How to Play It
FAANG STOCKS OF TOMORROW
Baillie Gifford picks poised for post-pandemic success.
COMPANY BULLISH CASE
Denali Therapeutics Promising treatments for disorders like Alzheimer’s.
Sea Ltd. ADR Tencent game distributor, e-commerce platform for Asia.
Adyen NV Global payments platform—think Paypal and Square in one.
Ecolab Boom times ahead for this office-cleaning-products firm.
Reliance Industries May become the Amazon of India.
SOURCE: BAILLIE GIFFORD
assets, largely to investors in the U.S.
One of Baillie Gifford’s first trades was to lend
to tire makers, believing Henry Ford’s pioneering
Model T automobile would revolutionize the world.
After World War I, the firm decided America was a
compelling “emerging market,” and built positions
in railroads including Union Pacific and Atchison,
Topeka and Santa Fe, eventually investing 20% of its
assets in the United States. In the 1960s, it was an
early investor in emerging Japan.
When the internet stock bubble popped in 2000,
Baillie Gifford suffered a setback, but as investors
fled companies like Amazon, the firm backed Jeff
Bezos’ vision. It was Amazon’s remarkable resilience
and success that birthed the firm’s think-happy-
thoughts-first, be-critical-later approach. Its timing
was perfect. Technology giants like Amazon, Google
and Microsoft are now carrying the S&P 500. “We
started noticing that big companies got better and
got stronger, and their returns got greater as they
FORBES.COM
 Optimism Rules Cont.
grew, rather than the reverse,” Anderson says.
“If you can just hit one or two of those exception-
al companies that really drive markets over the long
run, then they’ll pay for the inevitable mistakes,”
says Tom Slater, 42, who co-manages some flagship
funds alongside Anderson. By 2012, the firm latched
48 onto emerging trends like cloud computing and
Asian tech leaders like Alibaba and Tencent.
Following the crowd for Baillie Gifford has led to
INVESTING
some big misses, including Eike Batista’s ill-fated
Brazilian oil company OGX, Vestas Wind Systems,
LendingClub and Nio. It also holds stakes in trou-
bled Airbnb and luggage maker Away. But wins like
its 100-fold return on Amazon, 16-fold return on
Tesla and a 17-fold gain on Naspers, the South Afri-
can conglomerate that owns 31% of Tencent stock,
have more than made up for its dogs.
Seeing the Forest for the Trees
Although Tom Slater, partner in
charge of Baillie Gifford’s U.S.
Equity Team, studied computer
science and math, he’s no quant
when it comes to investing.
FORBES.COM
Little Big Picture Baillie Gifford’s home base—Edinburgh, Scotland—can
rightly be called the wellspring of modern economic
AULD RELIABLE theory. In 1776, Edinburgher Adam Smith published his
timeless classic The Wealth of Nations. Even over the
2.7 million
past 15 years, Smith’s work has been outsold by few
3M other business books—save for that modern retelling
copies
of acquiring and dispensing wealth: Freakonomics.
2M
1M
287,000 274,000 106,000 17,000
Freakonomics The Wealth Capital in the Free to Choose Das Kapital
by Steven Levitt of Nations Twenty-First by Milton and by Karl Marx
and Stephen by Adam Smith Century Rose Friedman (1867)
J. Dubner (1776) by Thomas (1980)
(2005) Piketty (2013)
SOURCE: NPD BOOKSCAN
Some $35 billion of Ballie Gifford’s capital is in-
vested in China. Big holdings include surging de-
livery companies like Meituan-Dianping and bud-
ding e-commerce platform Pinduoduo. In Europe it
owns HelloFresh, a meal-kit delivery company, and
the Amazon of Latin America, MercadoLibre.
London-listed Scottish Mortgage Trust holds most
of Baillie Gifford’s private investments, including
stakes in Stripe, Ginkgo Bioworks, the biological engi-
neering pioneer, and CureVac, the Bill Gates–backed
coronavirus vaccine firm President Trump reported-
ly wanted to buy. The Scottish trust has risen fivefold
over the past decade. Among its mutual funds avail-
able to U.S. investors, Long Term Global Growth and
U.S. Equity Growth have performed best.
Baillie Gifford proudly embraces ESG (environ-
mental, social and governance) investing. The firm
says it works with Amazon on sustainability and
worker conditions, encourages Google to pay more
in taxes and voted against what it viewed as rich
executive-pay packages at Apple.
What about the billions Baillie Gifford has reaped
from its investment in Tesla, whose owner, Elon
Musk, might be the poster boy for bad corporate
governance? According to Anderson, Baillie Gif-
ford grew concerned about Musk’s “pedogate” Twit-
ter battle during the 2018 rescue of children from
a cave in Thailand, as well as his infamous “$420”
tweet about taking Tesla private, which led to SEC
sanctions. But it still voted in favor of Musk’s recent
$50 billion–plus incentive package, the largest po-
tential payout in corporate history.
Says Anderson, “I think it’s incumbent on us
to back the extraordinary appetite for beneficial
change and to look past any bumps in the road.”
Proving that optimism can pay, so long as you
don’t sweat too many details.
FINAL THOUGHT
“THE WORLD IS FULL OF MAGIC
THINGS, PATIENTLY WAITING FOR
OUR SENSES TO GROW SHARPER.”
—W.B. Yeats
J U N E / J U LY 2 0 2 0
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 FORBES AFRIC AN RENAISSANCE ADVERTORIAL

AFRICAN RENAISSANCE
DEMOCRATIC REPUBLIC OF CONGO:
Opportunities Expand as
Reforms Take Shape
By Editor in Chief, Forbes African Renaissance
WĂƵůdƌƵƐƞƵůů

ĞŵŽĐƌĂƟĐZĞƉƵďůŝĐŽĨŽŶŐŽWƌĞƐŝĚĞŶƚ&ĠůŝdždƐŚŝƐĞŬĞĚŝ

WĂƵůdƌƵƐƞƵůů &ŽƌďĞƐĨƌŝĐĂŶZĞŶĂŝƐƐĂŶĐĞ ƌĞĐĞŶƚůLJŵĞƚǁŝƚŚĞŵŽĐƌĂƟĐZĞƉƵďůŝĐŽĨŽŶŐŽWƌĞƐŝĚĞŶƚ&Ğůŝdž

dƐŚŝƐĞŬĞĚŝĂŶĚDŝŶŝƐƚĞƌŽĨ&ŝŶĂŶĐĞ^ĞůĞzĂůĂŐŚƵůŝƚŽĚŝƐĐƵƐƐŶĞǁĚĞǀĞůŽƉŵĞŶƚƐĂŶĚƌĞĨŽƌŵƐŝŶƚŚĞĐŽƵŶƚƌLJ

ƐƚŚĞůĂƌŐĞƐƚĂŶĚƉĞƌŚĂƉƐŵŽƐƚĞdžĐŝƟŶŐ dŚĞŶĂƟŽŶŽĨĂƉƉƌŽdžŝŵĂƚĞůLJ#ϬŵŝůůŝŽŶŝƐ capital investment opportunities. Over

ĐŽƵŶƚƌLJƚŽĨŽůůŽǁŝŶĨƌŝĐĂƚŚĞĞŵŽĐƌĂƟĐ now on the cusp of economic prosperity. the past several months, Tshisekedi’s
ZĞƉƵďůŝĐŽĨŽŶŐŽ;ZŽīĞƌƐƐŝŐŶŝĮĐĂŶƚ The DRC holds tremendous potential in leadership team has successfully started
opportunity for investors. The DRC’s story the context of untapped mineral deposits, developing innovative mechanisms to
starts with mineral wealth, yet there are
ƐŽŵĞƐƵƌƉƌŝƐŝŶŐŶĞǁĐŚĂƉƚĞƌƐďĞŝŶŐǁƌŝƩĞŶ
under President Tshisekedi’s leadership.
The central African nation is endowed
with over $24 trillion worth of mineral
riches, including copper, diamonds and
ŚƵŵĂŶĐĂƉŝƚĂůŵĂŶƵĨĂĐƚƵƌŝŶŐĐĂƉĂďŝůŝƟĞƐ
and agriculture. Today, it stands as a
beacon of persevering success—one that
serves as a model for other central African
ŶĂƟŽŶƐ"
Fresh Leadership Accelerates Growth
propel the country towards accelerated
growth.
Within the bustling capital city of Kinshasa,
evidence of this growth is widely apparent.
From the improved road infrastructure to
ƚŚĞŝŶŇƵdžŽĨĐŽŶƐƚƌƵĐƟŽŶĐƌĂŶĞƐĐƌŽǁĚŝŶŐ
coltan. Its natural resources supply the
consumer electronics market, and fuel
ƚŚĞƉƌŽůŝĨĞƌĂƟŽŶŽĨƌĞŶĞǁĂďůĞĞŶĞƌŐLJĂŶĚ
ŵĂŶLJƚĞĐŚŶŽůŽŐLJŝŶŶŽǀĂƟŽŶƐ"
The DRC shows remarkable resilience in
the face of global economic uncertainty.
1 African Renaissance
President Felix Tshisekedi and Minister of
&ŝŶĂŶĐĞ^ĞůĞzĂůĂŐŚƵůŝĂƌĞůĞĂĚŝŶŐĞīŽƌƚƐ
to continue growing and diversif ying
the economy. At the same time, they
are working to fur ther strengthen
ŵƵůƟŶĂƟŽŶĂůƌĞůĂƟŽŶƐŚŝƉƐĂŶĚŝŶƚƌŽĚƵĐĞ
ƚŚĞŶĂƟŽŶ'ƐƐŬLJůŝŶĞƚŚĞƐƚĂŐĞŝƐďĞŝŶŐƐĞƚ
for a new wave of economic expansion.
Despite global uncertainty, the country’s
vibrant economy has shown signs of
structural integrity that are a testament
to its leadership and values. While GDP
 FORBES AFRIC AN RENAISSANCE ADVERTORIAL

growth slightly declined to 4.4% in 2019 ŽƉƉŽƌƚƵŶŝƟĞƐĂŶĚĂŐƌŽǁŝŶŐŵŝĚĚůĞĐůĂƐƐ ŽďũĞĐƟǀĞƐŽĨŵLJĂĚŵŝŶŝƐƚƌĂƟŽŶ!

compared to 5.8% in 2018, year-on-year
inflation decreased to 4.6% in 2019 from
7.1% in 2018. While global commodity
and macroeconomic shock s af fec ted
the countr y ’s substantial ex trac tives
sector, economic stability has prevailed
and opportunities for growth are
in addition to a decrease in bureaucracy
ĂŶĚƌĞĨŽƌŵƐŝŶŐŽǀĞƌŶŵĞŶƚƌĞŐƵůĂƟŽŶ Tshisekedi has addressed inherited issues
ŽĨĐŽƌƌƵƉƟŽŶĂŶĚƉƌŽƉĞƌƚLJƌŝŐŚƚƐŚĞĂĚ"ŽŶ
Since taking office in January 2019 after He acknowledges that the DRC can only
being elected in the country’s first-ever be more attractive to foreign capital if it
peaceful transfer of power, Tshisekedi’s can drastically reform these problems.
By reducing corruption and

abundant.
Since October 2019, Tshisekedi and
ŚŝƐĂĚŵŝŶŝƐƚƌĂƟŽŶŚĂǀĞĞƐƚĂďůŝƐŚĞĚ
more than 80 reforms to attract
foreign capital to the DRC. Improving
the business climate and its ability
to attract investors is among his
administration’s most important
ŽďũĞĐƟǀĞƐ
“
Investors in the DRC can take
advantage of the nation’s mineral
wealth, agricultural opportunities and
a growing middle class, in addition
to a decrease in bureaucracy and
reforms in government regulation.
strengthening property rights,
ŚĞŝƐĐƌĞĂƟŶŐĂƐLJƐƚĞŵƚŚĂƚǁŝůů
be able to generate the right
incentives to attract and retain
investors.
Beyond developing internal
controls to bet ter empower
the private sector, President
Tshisekedi is reviewing the
c o u n t r y ’s t a x a n d c u s t o m s

“My government and I are resolutely
committed to mobilizing all
necessary efforts to further clean up the
business climate and provide a framework
for private investment,” says Tshisekedi.
ZĞĨŽƌŵƐĞƐŝŐŶĞĚƚŽƩƌĂĐƚĂŶĚ
^ƚƌĞĂŵůŝŶĞ/ŶǀĞƐƚŵĞŶƚ
Investment opportunities have grown
exponentially as recent government
reforms have helped global institutions
see significant growth potential in the
DRC. Today, investors can take advantage
ŽĨƚŚĞŶĂƟŽŶƐŵŝŶĞƌĂůǁĞĂůƚŚĂŐƌŝĐƵůƚƵƌĂů
“
actions and commitments illustrate the
desire of his new government to make the
DRC an attractive destination for foreign
ĐĂƉŝƚĂů,ŝƐĂĐƟǀĞƉƵƌƐƵŝƚŽĨĐŚĂŶŐĞŝŶƚŚĞ
ĨƵŶĚĂŵĞŶƚĂůĨŽƵŶĚĂƟŽŶƐŽĨƚŚĞĐŽƵŶƚƌLJŝƐ
immense and his work to date has shown
ŚŝƐĂďŝůŝƚLJƚŽƚĂŬĞĂĐƟŽŶ
dŚĞĐŽƵŶƚƌLJŝƐĮƌŵůLJĐŽŵŵŝƩĞĚƚŽĂƐĞƌŝĞƐ
of reforms to improve the business climate,”
says Tshisekedi. “Improving the business
climate and the economic attractiveness
of the DRC are among the most important
ƉŽůŝĐŝĞƐhůƟŵĂƚĞůLJƌĞĨŽƌŵƐĂŝŵ
toward a more favorable tax
system for the private sector. In addition
to the bolstering the national Investment
ŽĚĞǁŚŝĐŚŽīĞƌƐƐƵďƐƚĂŶƟĂůƚĂdžďĞŶĞĮƚƐ
ƚŚĞZŝƐĂĐƟǀĞůLJůŽŽŬŝŶŐŝŶƚŽĞƐƚĂďůŝƐŚŝŶŐ
Special Economic Zones that offer even
ŐƌĞĂƚĞƌďĞŶĞĮƚƐ
^ƚƌƵĐƚƵƌĂůŚĂŶŐĞƐĚĚƌĞƐƐĚƵĐĂƟŽŶ
,ĞĂůƚŚĐĂƌĞĂŶĚWŽǀĞƌƚLJ
A s one of central Africa’s anchors of
commerce and development, the DRC has
been often mischaracterized as a nation

ZDŝŶŝƐƚĞƌŽĨ&ŝŶĂŶĐĞ^ĞůĞzĂůĂŐŚƵůŝǁŝƚŚĨƌŝĐĂŶĞǀĞůŽƉŵĞŶƚĂŶŬWƌĞƐŝĚĞŶƚŬŝŶǁƵŵŝĚĞƐŝŶĂ

African Renaissance 2
 &KZ^&Z/ EZE/^^EsZdKZ/>

struggling to overcome its perpetual ĞǀĞůŽƉŝŶŐĐŽƌĞŝŶĨƌĂƐƚƌƵĐƚƵƌĞƚŚƌŽƵŐŚŽƵƚ ƉŽƚĞŶƟĂůůLJƚŚĞǁŽƌůĚƐůĂƌŐĞƐƚŚLJĚƌŽƉŽǁĞƌ

ĐŽŶŇŝĐƚƐĂƐŝƚĂƩĞŵƉƚƐƚŽƌĞĂĐŚŝƚƐƉŽƚĞŶƟĂů ƚŚĞĐŽƵŶƚƌLJŝƐĂůƐŽĂƚŽƉƉƌŝŽƌŝƚLJdƐŚŝƐĞŬĞĚŝ ƉƌŽũĞĐƚĂŶĚĂŶŝŶƐƚƌƵŵĞŶƚĂůƉĂƌƚŽĨĨƌŝĐĂƐ
ŝƐƐƚƌŽŶŐůLJĐŽŵŵŝƚƚĞĚƚŽƌĂƉŝĚůLJƌĞĚƵĐŝŶŐ ĨƵƚƵƌĞĞŶĞƌŐLJƐƚƌĂƚĞŐLJdŚĞĚĂŵŚĂƐƚŚĞ
dŚĞdƐŚŝƐĞŬĞĚŝĂĚŵŝŶŝƐƚƌĂƚŝŽŶƌĞĐŽŐŶŝnjĞƐ ƚŚĞƐŝŐŶŝĨŝĐĂŶƚŐĂƉŝŶďĂƐŝĐŝŶĨƌĂƐƚƌƵĐƚƵƌĞ ƉŽƚĞŶƟĂůƚŽŐĞŶĞƌĂƚĞϯ%ϬϬϬDtŽĨĞŶĞƌŐLJ
ƚŚĞŚŝƐƚŽƌŝĐĂůĐŚĂůůĞŶŐĞƐŝƚŵƵƐƚĂĚĚƌĞƐƐ ŝŶƚŚĞƚƌĂŶƐƉŽƌƚĂŶĚĞŶĞƌŐLJƐĞĐƚŽƌdŽ ĂŶĚǁŝůůŚĞůƉƉŽǁĞƌ^ŽƵƚŚĨƌŝĐĂŽƚƐǁĂŶĂ
 ŵ Ž Ŷ Ő  ƚ Ś Ğ Ɛ Ğ ĂŶĚŶŐŽůĂ
Ă ƌ Ğ  ǁ Ğ Ă Ŭ Ğ ƌ  Ă Ŷ Ě
non-inclusive &Žƌ ůŽŶŐĞƌ"
ŐƌŽǁ ƚŚ ĂĚǀĂŶĐĞĚ term electric
Ě ŝ ů Ă Ɖ ŝ Ě Ă ƚ Ğ Ě infrastructure
ŝŶĨƌĂƐƚƌƵĐƚƵƌĞ ĂŶĚ ŶĞĞĚƐ ĚŝƐĐƵƐƐŝŽŶƐ
ǁĞĂŬ ŐŽǀĞƌŶĂŶĐĞ ǁŝƚŚƉƌŝǀĂƚĞƐĞĐƚŽƌ
d ŚĞ ŶĂƚŝŽŶ Ɛ ŶĞǁ participants are
ů Ğ Ă Ě Ğ ƌ Ɛ Ś ŝ Ɖ  ƚ Ğ Ă ŵ ƵŶĚĞƌǁĂLJƚŽĚĞǀĞůŽƉ
ŚĂƐĂůƌĞĂĚLJƐŚŽǁŶ ƐŵĂůůĞƌŵŝĐƌŽ"ĚĂŵƐ
a great willingness ƚ Ś Ă ƚ  Đ Ă Ŷ  Ɛ Ƶ Ɖ Ɖ ů LJ
ƚ Ž  ŝ Ŷ ƚ ƌ Ž Ě Ƶ Đ Ğ power in several
structural reforms ĚŝīĞƌĞŶƚƉĂƌƚƐŽĨƚŚĞ
t o c r ea te a m o r e ĐŽƵŶƚƌLJ
stable economic
Ğ Ŷ ǀ ŝ ƌ Ž Ŷ ŵ Ğ Ŷ ƚ  Equipped with
dŚĞŵĂŝŶůĞǀĞƌƚŽ &ŝŶĂŶĐŝĂůdžƉĞƌƟƐĞ
Đ Ž ŵ ď Ă ƚ  Ɖ Ž ǀ Ğ ƌ ƚ LJ
ŝ Ɛ  ƚ Ž  Ɛ Ƶ Ɛ ƚ Ă ŝ Ŷ Ă ď ů LJ dŚĞZƐDŝŶŝƐƚĞƌ
ĂŶĚ ƐƵďƐ ƚ ĂŶƚŝĂůů LJ Ž Ĩ  & ŝ Ŷ Ă Ŷ Đ Ğ  ^ Ğ ů Ğ
increase national zĂůĂŐŚƵůŝ ŝƐ ƚĂƐŬĞĚ
ǁ Ğ Ă ů ƚ Ś  ǁ Ś ŝ ů Ğ ǁŝƚŚĂƚƌĞŵĞŶĚŽƵƐůLJ
e n su r i n g i t s b e s t ĚŝĨĨŝĐƵůƚĐŚĂůůĞŶŐĞ+
ƌ Ğ Ě ŝ Ɛ ƚ ƌ ŝ ď Ƶ ƚ ŝ Ž Ŷ   Ő ƌ Ž ǁ ŝ Ŷ Ő  Ă Ŷ Ě
dƐŚŝƐĞŬĞĚŝŶŽƚĞƐ ŵ Ă ŝ Ŷ ƚ Ă ŝ Ŷ ŝ Ŷ Ő  ƚ Ś Ğ
Ğ Đ Ž Ŷ Ž ŵ LJ  Ž Ĩ  Ă Ŷ
,ŝƐ ĂĚŵŝŶŝƐƚƌĂƚŝŽŶ President Félix Tshisekedi and President of France Emmanuel Macron ŝ ŵ ŵ Ğ Ŷ Ɛ Ğ  Ă Ŷ Ě
ŚĂƐ ƚ ĂŬĞŶ ĂĐ ƚŝŽŶ ďLJ ĚŝǀĞƌƐĞĐŽƵŶƚƌLJ/ŶĂǁŽƌůĚ
ƉƌŝŽƌŝƟnjŝŶŐĞĚƵĐĂƟŽŶĂŶĚŚĞĂůƚŚĐĂƌĞĨŽƌŝƚƐ ĂŵĞůŝŽƌĂƚĞƐŽŵĞŽĨƚŚĞŶĞĂƌ"ƚĞƌŵĐŽŶĐĞƌŶƐ ŽĨĐŽůůĂƉƐŝŶŐĐŽŵŵŽĚŝƚLJƉƌŝĐĞƐƵŶĐĞƌƚĂŝŶ
ŝŶŚĂďŝƚĂŶƚƐ&ŝƌƐƚƐƚĞƉƐŝŶĐůƵĚĞŵĂŬŝŶŐďĂƐŝĐ ŚŝƐĂĚŵŝŶŝƐƚƌĂƟŽŶŚĂƐƐƚĂƌƚĞĚĂƉƌŽŐƌĂŵƚŽ ĚĞŵĂŶĚĂŶĚŐĞŶĞƌĂůŵĂůĂŝƐĞǁŝƚŚŝŶƚŚĞ
ĞĚƵĐĂƚŝŽŶĨƌĞĞƚŚƌŽƵŐŚŽƵƚƚŚĞĐŽƵŶƚƌLJ ƌĞŚĂďŝůŝƚĂƚĞƵƌďĂŶƌŽĂĚƐŝŶŽƌĚĞƌƚŽĞĂƐĞ ŐůŽďĂůďĂŶŬŝŶŐƐĞĐƚŽƌƚŚŝƐƚĂƐŬŵĂLJƐĞĞŵ
ĂŶĚƌĞŚĂďŝůŝƚĂƟŶŐĂŶƵŵďĞƌŽĨŚĞĂůƚŚĐĂƌĞ ƚƌĂŶƐƉŽƌƚĂŶĚĚĞĐƌĞĂƐĞĐŽŶŐĞƐƟŽŶ ĚĂƵŶƟŶŐĂƚƟŵĞƐ,ĂŝůŝŶŐĨƌŽŵ'ĂŵĞŶĂĂ
ĐĞŶƚĞƌƐ dŚĞƐĞ ŝŶŝƚŝĂƚŝǀĞƐ ĂƌĞ ĨŽĐƵƐĞĚ tŚŝůĞƚƌĂŶƐƉŽƌƚŝŶĨƌĂƐƚƌƵĐƚƵƌĞƌĞŵĂŝŶƐĂ ƚŽǁŶŝŶŶŽƌƚŚĞƌŶZDŝŶŝƐƚĞƌzĂůĂŐŚƵůŝŝƐ
ŽŶƌĞĚƵĐŝŶŐƚŚĞĨŝŶĂŶĐŝĂůďƵƌĚĞŶŽŶƚŚĞ ĐŚĂůůĞŶŐĞƉĞƌŚĂƉƐƚŚĞďŝŐŐĞƐƚĐŚĂůůĞŶŐĞ ŶŽƐƚƌĂŶŐĞƌƚŽƚŚĞƐĞƚLJƉĞƐŽĨĐŚĂůůĞŶŐĞƐ
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ŐŽŽĚƐ largest infrastructure
projects ever
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ŝŶĐĞŶƟǀĞƐĨŽƌŝŶǀĞƐƚŽƌƐŝŶĂƌĞĂƐŽƚŚĞƌƚŚĂŶ ĂŵƚŚĞĐĞŶƚĞƌƉŝĞĐĞ
ƚŚĞĞdžƚƌĂĐƟǀĞƐĞĐƚŽƌ ŽĨƚŚĞ/ŶŐĂĂŵƐĂƐ President Félix Tshisekedi and Pope Francis

3 ĨƌŝĐĂŶZĞŶĂŝƐƐĂŶĐĞ

WƌĞƐŝĚĞŶƚ&ĠůŝdždƐŚŝƐĞŬĞĚŝĂŶĚ^ĞĐƌĞƚĂƌLJ#'ĞŶĞƌĂůŽĨƚŚĞhŶŝƚĞĚEĂƟŽŶƐŶƚſŶŝŽ'ƵƚĞƌƌĞƐ
and over time, it has developed the
capability to shield itself to some degree.
As the former director general of the
General Directorate of Taxes, Yalaghuli is
ĞdžƉĞƌŝĞŶĐĞĚĂƚŝŵƉƌŽǀŝŶŐƚŚĞŵŽďŝůŝnjĂƟŽŶ
of revenues and contributing to the
ƌĞƐƚŽƌĂƟŽŶŽĨƚŚĞďĂůĂŶĐĞŽĨƉƵďůŝĐĮŶĂŶĐĞƐ
President Tshisekedi and Minister Yalaghuli
work in partnership to implement prudent
fiscal and monetary policies and develop
Z>ĂŶĚƐĐĂƉĞWƌĞƐŝĚĞŶƚ&ĠůŝdždƐŚŝƐĞŬĞĚŝĂŶĚĨƌŝĐĂŶZĞŶĂŝƐƐĂŶĐĞĚŝƚŽƌŝŶŚŝĞĨWĂƵůdƌƵƐƞƵůů
FORBES AFRIC AN RENAISSANCE ADVERTORIAL
frameworks for the nation’s future. In
2019, further advances to the nation’s
stability were made as the DRC agreed to a
ZĞĨĞƌĞŶĐĞWƌŽŐƌĂŵǁŝƚŚƚŚĞ/ŶƚĞƌŶĂƟŽŶĂů
Monetary Fund. The three-year program
demonstrates the leadership’s willingness to
implement courageous reforms necessary
to improve the country’s macroeconomic
environment. Through the program, the IMF
loaned $370 million to the DRC government
ƚŽŚĞůƉƌĞƐƚŽƌĞŵĂĐƌŽĞĐŽŶŽŵŝĐĂŶĚĮŶĂŶĐŝĂů
stability, and improve governance and
transparency.
Minister Yalaghuli ’s prior experience
working with international agencies has
ƉƌŽǀĞĚŝŶǀĂůƵĂďůĞŝŶƚŚĞĐƵƌƌĞŶƚƐĞƫŶŐ,Ğ
ǁĂƐŝŶƐƚƌƵŵĞŶƚĂůŝŶŶĞŐŽƟĂƟŶŐĐŽŽƉĞƌĂƟŽŶ
agreements with major international
institutions including the International
Monetary Fund, the World Bank Group and
the African Development Bank.
ŽƵŶƚƌLJŽĨKƉƉŽƌƚƵŶŝƟĞƐĂŶĚ/ŵŵĞŶƐĞ
WŽƚĞŶƟĂů
Through development of infrastructure and
the improvement of its overall business
climate, the leadership of the Democratic
Republic of Congo has proven its ability
to accomplish goals necessary to bring
ƉƌŽŐƌĞƐƐĂŶĚĐŽŶƟŶƵĞĚĞĐŽŶŽŵŝĐŐƌŽǁƚŚ
/ƌĞŵĂŝŶĐŽŶǀŝŶĐĞĚƚŚĂƚƚŚĞƚƌĂŶƐĨŽƌŵĂƟŽŶ
ŽĨŽƵƌŶĂƚƵƌĂůƉŽƚĞŶƟĂůŝŶƚŽĞīĞĐƟǀĞǁĞĂůƚŚ
for the benefit of our people requires a
ƐƚƌŽŶŐĂŶĚŝŶŶŽǀĂƟǀĞƉƌŝǀĂƚĞƐĞĐƚŽƌ!ƐĂLJƐ
Tshisekedi.
As the Democratic Republic of Congo
ĐŽŶƟŶƵĞƐƚŽĚĞǀĞůŽƉĂŶĚĐƌĞĂƚĞĂǁĞĂůƚŚŽĨ
ŽƉƉŽƌƚƵŶŝƚLJĨŽƌŝŶƚĞƌŶĂƟŽŶĂůŝŶǀĞƐƚŽƌƐĂŶĚ
ŝƚƐĐŝƟnjĞŶƐƚŚĞĚĞǀĞůŽƉŵĞŶƚŽĨĂďƵƐŝŶĞƐƐ"
friendly environment is vital for the country
to become a superpower within the African
ĐŽŶƟŶĞŶƚ
African Renaissance 4
GREAT
THE TREND

54

The coronavirus pandemic is transforming the

CAPIT
What’s emerging is something better,

FORBES.COM
ER
economic system day by day, hour by hour.
55

ALISM
fairer, smarter—and it’s happening right now.

BY R A N DA L L L A N E

FORBES.COM
 T
56
THE TREND
The surreal year 2020 produces a personal
Groundhog Day effect. The clock moves at one-
quarter speed as the time-numbing diversions
and necessities of a century ago, from jigsaw
puzzles to yeast, fly off the virtual shelves. Si-
multaneously, though, the world is transform-
ing at a pace unlike any experienced since World
War II. In a matter of weeks, seismic, perma-
nent shifts have occurred in how we work, learn
and transact. The most significant shift is taking
place in our economic system itself.
Capitalism, the greatest engine for prosperity
and innovation ever created, was already under
strain before the coronavirus pandemic. Despite
a decade of impressive economic growth and
FORBES.COM
job creation, a plurality of Americans still re-
ported feeling as though the system was rigged,
that hard work and playing by the rules no lon-
ger ensured success. “It is scary when you had
the lowest unemployment, the lowest African-
American unemployment, the lowest Hispanic
unemployment, the lowest women’s unemploy-
ment,” says Michael Milken, who has sat in the
middle of several of these cycles, “and that’s how
people felt.”
Those feelings have only accelerated this
spring, particularly among the young. At the
end of February, during the last week of the
pre-Covid era, Forbes surveyed 1,000 American
adults under age 30 about capitalism and so-
cialism. Half approved of the former; 43% re-
garded the latter positively. Ten weeks, 80,000
deaths and 20 million unemployment claims
later, we repeated the exercise, and those al-
ready dismal results had flipped: 47% now ap-
prove of socialism, 46% of capitalism. You can
see those changing sentiments playing out in
public, as ideas such as universal basic income,
rent amnesties and job guarantees move rapidly
from the fringe to the mainstream.
Amid the chaos and the disorienting para-
digm shifts, though, something profound is also
happening: The Invisible Hand is operating on
itself with dispatch.
As one of the patron saints of capitalism, Jo-
seph Schumpeter, could tell you, the creation
of a new system requires the destruction of the
old. So count Milton Friedman’s legacy as an-
other coronavirus casualty. It was already on
life support; even the fusty Business Roundta-
ble declared last summer that Friedman’s share-
holder-first dogma no longer held sway over
its members. The funeral rites can now be wit-
nessed at any grocery store or aboard any UPS
truck, where the low-paid heroes previous-
ly termed “unskilled workers” are now known,
with respect, as essential. Pity the CEO who ar-
gues for paying them as little as possible in or-
der to protect the quarterly dividend.
The Too Big to Fail playbook from the last
meltdown has proven archaic as well. From
crowdfunding to cryptocurrency, the economic
action became decidedly more bottom-up dur-
ing the 2010s, and a pandemic taking partic-
ularly cruel aim at the entrepreneurs running
businesses like restaurants and barbershops has
many sharpening their pitchforks. Shake Shack
founder Danny Meyer never embraced Milton
Friedman—his customers, employees, neigh-
bors and investors mostly worship him. But
when his large, well-capitalized, publicly trad-
ed hamburger empire had the temerity to take
a federal Paycheck Protection Program (PPP)
J U N E / J U LY 2 0 2 0

Robert loan, the public outcry could have melted choc-
olate custard, prompting Meyer to quickly re-
Smith turn the check.
Finally, we’ve ended the era of economic incre-
mentalism. Slow and slight improvements don’t
cut it right now; “as good as” isn’t good enough.
The times demand systemic solutions greater
than what we had before. Greater Capitalism.
If Friedmanism worshiped profits above all,
this Greater Capitalism measures return on in-
vestment in all facets. Yes, it incorporates a large
dose of the stakeholder economy that has slow-
ly made headway over the past few years. But
its roots lie not in big companies but in small
businesses and entrepreneurs who ask for lit-
MARTIN SCHOELLER FOR FORBES
tle more than a fair chance and a level playing
field. If practiced correctly, Greater Capitalism
will encourage the kind of smart, long-term, ac-
cretive actions that create permanent solutions.
Three binary formulas, “greater thans” all,
encapsulate what’s been emerging over the past
few weeks. History is unspooling in real time.
J U N E / J U LY 2 0 2 0
PART
I 57
THE TREND
Equal Opportunity >
Equal Outcome
The virus has exposed larger fissures afflicting this
country, as communities of color have suffered
disproportionate death, sickness and joblessness.
Robert Smith, the richest self-made African-
American, with a net worth of $5 billion, had al-
ready been focusing on creating more opportu-
nity for young blacks, most famously by wiping
out the student debt of Morehouse College’s class
of 2019 in the commencement address heard
’round the world. Watching April’s clumsy PPP
rollout—the first $350 billion tranche gobbled
up within days by the bigger, better-connected
companies that knew how to play the game—in-
furiated him.
In the three weeks leading up to the sec-
ond tranche, Smith looked for a solution. The
core problem: PPP money had been chan-
neled through the Small Business Administra-
tion’s electronic system—a system only the ma-
jor banks could access. “Seventy percent of Afri-
can-American neighborhoods don’t have banks,”
Smith says. Even if they did, Smith estimates that
some 90% of African-American businesses are
sole proprietorships lacking the clubby bank re-
lationships that helped usher larger clients to the
front of the line.
So Smith went where these small entrepre-
neurs access the financial system—credit unions,
minority depository institutions and more than
1,000 community-development banks—and
paired them with the larger institutions that
had access to the SBA clearinghouse. The great-
est software-industry dealmaker of his genera-
tion, Smith used one of his fintech companies,
FinAstra, to create a patch, and then sent a per-
sonal plea to the 30,000 chapters of the National
Council of Black Churches to let those previously
shut out know they too had access to this lifeline.
During the PPP’s second tranche in May, 90,000
loans were processed in this manner.
Not every barrier has an altruistic billionaire
willing to ram through it, though, which helps
FORBES.COM
 explain why so many, especially Millennials and
those in Gen Z, have soured on capitalism’s 21st-
century variant. If the current system doesn’t of-
fer them equal opportunity to succeed, prom-
ises of more equal outcomes will carry the day.
For younger generations to experience America
as the land of opportunity, the root inequalities
need to be ripped out—now.
58 That starts with the education system. Getting
into college once offered a ticket out, a near-sure
path to the upper middle class. Compare today’s
THE TREND

debt-laden and rightfully cynical college grad-

uates with the returning heroes of the Greatest
Generation, America’s most upwardly mobile,
largely courtesy of the G.I. Bill. Service-for-col-
lege proposals suddenly abound anew, most no-
tably in Michigan, where Governor Gretchen
Whitmer has put forward a “Futures for Front-
Liners” initiative that will provide a tuition-free
path to a college degree or technical certificate
for those who performed essential services dur-
ing the pandemic.
Even without government intervention, the
Invisible Hand is doing its own work. For this
entire century, colleges, serving a customer base
that could tap endless wells of guaranteed loans,
had little incentive to mind costs. With virtu-
al education immediately made universal, the
genie is out of the bottle. “A lot of issues can be
changed here,” Milken observes. “Do you really
need $50,000 a year to get a quality experience?”
Answer: no. For the first time in over a gen-
eration, higher education will be subject to mar-

TOP 25
ket pressure—the need to provide a better prod-
uct at a lower price. “The economic model for ed-
ucation was broken,” says former Babson Col-

CORPORATE FIRST
lege president Kerry Healey, who now oversees
the Milken Institute’s Center for Advancing the
American Dream. Healey predicts that one-

quarter of smaller colleges will ultimately merge
or cease to exist. That’s entirely healthy, and over-
due. The survivors will have to provide that first
rung on the ladder of the American Dream: a col-
lege degree with less debt, a clearer path to the
jobs of the future and training opportunities for
everyone, not just 18-year-olds.
The same dynamic is playing out in America’s
other bloated behemoth, health care. Like on-
line education, telehealth has moved from future
theory to universal reality in a matter of weeks.
Good experiences will translate into rapid adop-
tion, and the results are almost preordained:
RESPONDERS
Forbes’ new ranking, developed in conjunction with research
partner Just Capital, assesses how well the 100 largest
employers among U.S. public companies mobilized to
meet the challenges of the coronavirus in terms of
supporting and protecting workers, customers and
communities. It analyzed the efforts of these companies
across 22 categories, from relaxed attendance policies
to community relief funds, on a rising scale of 1 to 5. The
numbers were then averaged into an overall composite
MAX-O-MATIC FOR FORBES

higher reach, lower costs. Should the paradigm
not just shift but be broken, it will reduce anoth-
er stress point for middle-class America.
The key as we emerge from the coronavirus na-
dir: permanently baking these playing-field level-
ers into the system. That’s the focus for Smith as
score. The rankings are a snapshot of the policies unveiled
by these companies from mid-March through May 7; they
say more about intention than implementation. Like the
pandemic itself, the response to Covid-19 has been fast-
moving, unprecedented and powerful. But it remains to
be seen whether its effects will be temporary or lasting.

FORBES.COM J U N E / J U LY 2 0 2 0
 he joins forces with strange bedfellows includ-
ing Nancy Pelosi, Steve Mnuchin, Chuck Schumer
and Ivanka Trump in an effort to turn his software
patch into a simple “lender in a box” infrastructure.
Smith envisions a system in which big banks,
as a condition of participating in the SBA pro-
grams, continue to act as a conduit for the fi-
nancial institutions that serve the underbanked,
whether urban or rural. A uniform software suite 59
will render the process seamless, and by bun-
dling these small loans—which traditionally de-

THE TREND
fault at lower than average rates—for second-
ary markets, the banks get a new business line,
and the small borrowers get access to a massive
amount of new capital. “The ROI on that is enor-
mous,” Smith says. “You can jump-start the en-
tire small- and medium-size business ecosystem.”
From there, Smith’s ambition is grander still:
a new American Dream empowered by a “busi-
ness in a box” software suite that for, say, $50 a
month democratizes entrepreneurship by offer-
ing payroll processing, payment systems, sched-
uling, withholding and similarly intimidating
chores. Just as powerfully, such a product would
automatically provide the kind of visibility that a
bank would need to make a loan.
How long until the lender-in-a-box model
could become a fully funded, permanent part of
the financial system? “Nine months from right
now,” Smith asserts.
And what would the timeline have been ab-
sent this crisis? Smith pauses, then laughs. “Who
knows?”

VERIZON COMMUNICATIONS
1 TELECOM PART

II
• Offered extra compensation for full-time employees still working
in the field or in offices.
• Held back on cutting service for customers struggling to pay
because of the pandemic.
• Launched a Covid-19-specific leave-of-absence policy that
provides 100% of pay for up to eight weeks, reduced to 60%
of pay for up to 16 weeks.

TARGET
2 RETAIL
• Raised wages for more than 300,000 front-line workers.
Stakeholders >
Shareholders
• Offered 30-day paid leave for employees 65 or older,
pregnant or with underlying medical conditions.
• Implemented measures to help ensure a clean and safe
Ever since the pandemic sent New York work-
shopping environment for customers and staff.
ers home in March, Verizon CEO Hans Vestberg
has convened a virtual war council at 8 a.m. dai-
AT&T
3 TELECOM
• Provided parents excused time off.
ly. “The cadence of decision making is virtually
unheard of,” says Vestberg, who estimates that at
least twice a day, he has to make a call that he’ll
• Raised worker pay. be judged against five years from now. From the
• Donated $10 million to expand online learning. beginning, his 10-person team decided to address

J U N E / J U LY 2 0 2 0 FORBES.COM
 every issue through a four-part prism with a spe-
cific hierarchy: employees, then customers, then
WALMART
society, and then, last and least, shareholders.
“This time around, you have to have your com-
pass clear,” he says.
4 RETAIL
• Committed almost $1 billion for special cash bonuses for
So what does stakeholder capitalism look like U.S. hourly associates.
at Verizon? Of his 145,000 employees, Vestberg • Hired 200,000 workers, more than half of whom are temporary.
Some came from hard-hit industries such as restaurants and
laid exactly none off. Those in the field have got-
hospitality.
60 ten hazard-pay bumps; anyone in the company
• Established Covid-19 sick-leave policy with up to two weeks of pay.
who contracts the virus gets 26 weeks of paid sick
leave. The 120,000 staffers working from home,
T- M O B I L E U S
THE TREND

many hired for tasks that currently don’t exist,

are dispatched to help on company-wide projects
or Verizon’s volunteer efforts. The goal is more
than a paycheck—it’s designed, at a challenging
time, to provide purpose.
Vestberg treats his employees the way an elect-
ed official treats his constituents. He polls them
every two weeks to gauge his performance and
determine the issues he needs to focus on. And
he’s transparent, holding the corporate version
of Andrew Cuomo’s press briefing every day at
noon. “We have nothing to hide, what we’re do-
ing, our processes,” he says. He quickly expand-
ed his audience beyond just his workers, airing
his “briefing” live on Twitter so anyone—custom-
ers, vendors, Wall Street analysts—could jump
in. More than 50,000 typically do.
As for its customers, Verizon has pledged not
to end any contracts right now for those who
can’t pay. It’s the right thing to do at a time when
personal connectivity is as essential as electricity.
And it’s the smart thing to do for a company tra-
ditionally valued by some multiple of customers.
“If you cut them off, they never come back,” Vest-
berg says. For society, Verizon has provided ev-
ery high school student in America with a New
York Times subscription, handles connectivity
and devices for kids at 350 schools and hosts free
streaming “Pay It Forward” concerts every week,
with performances from the likes of Billie Eilish
and Chance the Rapper.
The shareholders? Wall Street seems to have
accepted its place in Verizon’s pecking order. “So
far, no one has pushed back,” Vestberg says. It
should assuage the analyst crowd that on Forbes’
first-ever Top 25 Corporate Responders list (see
page 58), which leverages data generated by Just
Capital across 22 different criteria of the mo-
ment, from customer protection to emergency
dependent care, Verizon took first place.
Of course, it’s easier for a high-margin, tech-
nology-driven company like Verizon to do the
right thing. But low-margin retailers like Dollar
General, Walmart and Target also made the Cor-
porate Responders list. Target, the runner-up to
Verizon, gave its 300,000-plus front-line work-
ers a $2 per hour raise; added paid sick leave,
FORBES.COM J U N E / J U LY 2 0 2 0
5 TELECOM
• Granted unlimited smartphone data for current customers
with data plans through June.
• Relaxed attendance policy for workers.
• Provided additional paid time off.
LOWE’S COMPANIES
6
RETAIL
• Spent $160 million on increased pay and bonuses for employees
since March.
• Extended emergency leave.
• Set aside relief funds.
STARBUCKS
7 RETAIL
• Established a new mental-health benefit.
• Expanded its backup care policy.
• Sent thermometers to company-owned stores.
HOME DEPOT
8 RETAIL
• Added 240 hours of paid time off for full-time hourly employees
age 65 and older or determined by the CDC to be high-risk.
• Handed out thermometers to workers at stores and distribution
centers to perform health checks before shifts.
• Donated N95 masks to health-care providers.
JPMORGAN CHASE
9 FINANCIAL SERVICES
• Offered tellers $1,000 bonuses.
• Established several relief funds.
• Granted all employees extra paid leave.
THE KROGER CO.
10 RETAIL
• Expanded sick and emergency paid-leave policy.
• Made testing available to front-line employees.
• Offered a temporary $2 per hour pay increase, or “hero bonus,”
through mid-May.
MCDONALD’S
11
FAST FOOD
• By April 9, had donated $3.1 million of food to local communities.
• Expanded its paid-leave policy.
• Company leaders cut their base salaries.

CHARTER COMMUNICATIONS
12 TELECOM
• Increased wages for all hourly employees by $1.50 and vowed
no layoffs or furloughs through at least June 19.
• Added two weeks of paid sick time for Covid-related illnesses;
gave every employee an additional 15 days of flex time to care
for children or other dependents.
• Pledged not to terminate service or charge late fees for
customers facing economic difficulties linked to Covid-19.
BANK OF AMERICA
13 FINANCIAL SERVICES
• Established a $100 million relief fund for local communities.
• Vowed not to have layoffs linked to coronavirus through 2020.
• Paid workers for a full-time schedule even if their hours were
reduced; raised overtime pay for call-center employees to twice
the normal hourly rate.
CENTENE
14 HEALTH INSURER
• With Feeding America, committed to donating 1 million meals
a month for 12 months.
• Covered the cost of Covid-19-linked treatments for Medicare,
Medicaid and marketplace members.
• Provided staffers with 10 additional days of paid leave; for those
who remained in the office, granted a one-time payment of $750.
ANTHEM
15 HEALTH INSURER
• Committed $50 million in relief funds.
• Waived customers’ out-of-pocket costs for Covid-19 tests and
treatments; provided up to 80 hours of employee paid leave.
• Provided reimbursement of internet fees for hourly workers.
ALPHABET
16 TECHNOLOGY
• Committed over $800 million in grants, funds and other aid.
• Allowed workers to remain remote through 2020.
• Offered free access to Google Meet videoconferencing
capabilities for G Suite customers through September 30.
C V S H E A LT H
17 RETAIL
• Announced plans to fill 50,000 jobs.
• Waived charges for home delivery of drugs.
• Announced a backup dependent-care policy.
APPLE
18 TECHNOLOGY
• Voluntarily closed stores around the world and continued to pay
hourly workers.
• Helped find and donate more than 30 million masks to frontline
medical workers.
• Released mobility data-trends tool to aid efforts to combat
Covid-19.
so employees don’t feel compelled to turn up at
work with symptoms; provides backup child and
elderly care; and expanded a fund to help work-
ers with financial hardships.
If that sounds like a lot of employee focus
right now, so be it. That’s what Americans want.
As part of the Forbes Just 100 list, Forbes’ re-
search partner, Just Capital, has surveyed more
than 100,000 Americans about how they define 61
a good corporate citizen. The overwhelming an-
swer, every time: how they pay and treat their
THE TREND
employees.
In this new Greater Capitalism, treating em-
ployees well doesn’t mean a conflict with busi-
ness necessities. It just means giving them proper
respect. A few weeks ago, Airbnb founder Brian
Chesky did something historic: He laid off near-
ly 1,900 employees, or about 25% of his work-
force—and was applauded for it. Yes, the packag-
es were generous: a minimum of 14 weeks’ sever-
ance, accelerated equity vesting, an Apple laptop
and 12 months of paid-for health care. But the
key for Chesky: compassion. He explained why
he felt compelled to make such cuts, and then
treated his ex-colleagues like friends rather than
corporate detritus. Instead of recruiting, Chesky
redeployed his human resources department to
place laid-off workers and created a public alum-
ni directory to showcase them. “I have endeav-
ored to make principled, versus business, deci-
sions,” Chesky tells Forbes. “Business decisions
maximize outcomes, whereas principled deci-
sions are made regardless of the outcome.”
A similarly principled citizen’s mindset drives
Albert Bourla, arguably the most important
CEO in America right now (see story, page 64).
The Pfizer chief has pledged to have a vaccine
ready for widespread distribution to vulnerable
populations this year, defying the conventional
18-month projections.
Bourla risks two things. First, $1 billion on a
product that’s surely a long shot for any single ef-
fort. “Speed was of paramount importance—and
it had nothing to do with return on investment or
how much it would cost, because it all sounded
like a rounding error,” Bourla says. “What is im-
portant is a solution for a vaccine.”
Second, he risks some face, since he’s more
likely overpromising and under-delivering than
vice-versa. “Our contributions to how we solve
this crisis should drive all decisions,” he says with
a shrug. He adds: “It is very important to have
open communication right now in real time for
everyone. . . . Someone else making a vaccine
maybe will learn something from us.”
Crises can go two ways: They can sow division
or spur magnanimity. The Greece-born Bourla
clearly aims for the latter. Pfizer’s vaccine moon
J U N E / J U LY 2 0 2 0 FORBES.COM
 shot is a collaboration with BioNTech, run by
Uğur Şahin, a Turk. While their native coun-
WALGREENS BOOTS ALLIANCE
tries famously despise each other, the CEOs have
promised they’ll share raki together once the
vaccine is developed. “There is only one enemy,”
19 RETAIL
• Conducting daily health checks of select employees.
Bourla says. “The virus and time.” • Relaxed attendance policy and expanded paid sick leave.
• Gave full-time hourly employees in stores and distribution
centers a bonus of $300.
62
PART
FORD MOTOR
20

III
AUTOS
THE TREND

• Promised to continue to provide health insurance to employees

who elect to take sabbaticals.
• Top 300 executives deferred between 20% and 50% of salary.
• Pivoted to produce respirators and masks for Covid-19
protection.

Solutions Today >
Solutions Tomorrow
As the pandemic hit, Ray Dalio, whose Bridge-
water Associates is both the largest and most
hyper-rational hedge fund in the country, no-
ticed something: As the kids of his native Con-
necticut were dispatched to attend school from
home, the economically disadvantaged were
doomed to fall further behind. Many were food-
deprived, living amid density that both deprived
them of private space and increased their likeli-
hood of getting sick. And 22% did not have ac-
cess to any home computer, much less one of
their own, or reliable connectivity.
“I saw a real tragedy,” Dalio says. “And I saw a
bunch of people pull together to say, ‘This must
not happen.’ ”
Lubricated by an earlier $100 million pledge
from Dalio, matched by the state of Connecti-
cut, that “bunch of people”—including Bill Gates
and Microsoft, Michael Dell and Dell Comput-
er, and the legislative and educational leaders
of the Nutmeg State—got 60,000 fully loaded
computers delivered to low-income students.
For Dalio, who Forbes estimates is worth $18
billion, that decision was a no-brainer: an ROI-
driven result at the heart of a Greater Capitalism.
It’s also a harbinger of where philanthropy is go-
ing right now.
A subset of intellectuals have been railing
against philanthropy of late, arguing for confisca-
tory tax rates to prevent the richest from having
such societal influence. It’s lousy economic pol-
icy—while most billionaires have already girded
for some kind of tax increase no matter who wins
the 2020 election, Beatles-style rates would sup-
press growth more than generate revenue.
CIGNA
21 HEALTH INSURER
• Gave employees 10 days of emergency paid time off for
Covid-19-related absences.
• Offered free home delivery of medicine and waived
out-of-pocket costs for Covid-19 tests.
• Temporarily boosted pay of U.S.-based employees with
worksite-essential roles by 20%.
DARDEN RESTAURANTS
22 RESTAURANTS
• Granted paid sick leave to hourly employees.
• Senior leaders accepted pay reduction.
• Established an emergency-pay program for idled hourly workers.
PEPSICO
23 BEVERAGES
• Expanded paid sick-leave policy.
• Vowed to invest some $50 million globally into affected
communities.
• Offered enhanced benefits to all U.S. employees, with
additional pay for frontline workers.
DOLLAR GENERAL
24 RETAIL
• Installed sneeze guards at registers.
• Instituted special store hours for vulnerable seniors.
• Set aside approximately $60 million in employee-
appreciation bonuses.
WELLS FARGO
25 FINANCIAL SERVICES
• Suspended residential-property foreclosure sales, evictions
and involuntary auto repossessions.
• Paying U.S. non-exempt employees double their hourly rate for
time worked over 40 hours per week.
• Launched temporary on-site nurse service at 56 of its
largest U.S. sites.

FORBES.COM J U N E / J U LY 2 0 2 0

It’s also lousy public policy. Democracy is
Ray Dalio structurally poor at long-term outcomes. The
cost of imprisoning a person—financially, much
less socially—is many multiples of what it would
have cost to educate and nurture him proper-
ly. But good luck persuading politicians to in-
vest in 20-year outcomes when they’re simulta-
neously tempted by the sugar high of immedi-
ate action. Philanthropy can serve as risk capital
for problems, proving concepts and making the
mistakes that governments don’t dare.
MARTIN SCHOELLER FOR FORBES
But philanthropy, as currently practiced, has
invited such scrutiny. Despite large subsidies in
the form of upfront tax breaks, some $4 trillion
mostly sits around perpetually waiting for the
problems of tomorrow to arrive rather than sys-
tematically attacking the problems of today. By
law, charitable foundations must put at least 5%
J U N E / J U LY 2 0 2 0
of their assets to work every year—and for most
of them, that 5% floor is also a ceiling. Mean-
while, the 730,000 trendy donor-advised fund
accounts have managed to score the same tax
breaks without any annual minimum outlay
whatsoever.
The pandemic has highlighted this prob-
lem. At no point in our lifetimes has the pub-
lic need been greater—and yet, because endow- 63
ments have fallen in tandem with the market,
the amount of philanthropic activity is likely de-
THE TREND
creasing.
And so key players are using this moment to
morph philanthropy with an emphasis on trans-
parency and a “give while you live” philosophy.
Exhibit A: 43-year-old Twitter and Square co-
founder Jack Dorsey, who recently made head-
lines for pledging $1 billion toward the corona-
virus crisis and related problems—and has been
logging his donations one by one in a public
Google Doc.
In May, a group of more than 275 philanthro-
pists and professionals, led by the $100 million
Wallace Global Fund, formally called on Con-
gress to double the minimum outlay for foun-
dations and donor-advised funds, for the next
three years, to 10%—a move that would put an-
other $200 billion to work. “It’s not about be-
ing a financial headstone that forever marks
your coffin,” says Abigail Disney, one of the sig-
natories. “This should be about what the world
needs, not how people remember you.”
Meanwhile, according to insiders, various
signatories of the Giving Pledge have been
holding discussions regarding whether to move
past the group’s famous agnosticism about
when and where to give (other than at least half
their fortune before or when they die). Ideas in-
clude a pooled response fund to tackle Covid-
related issues and efforts to encourage the give-
while-you-live ethos. (No decisions have yet
been made.)
The stakes right now couldn’t be higher. Eco-
nomic tumult emboldens the fringes. During
the Great Depression, communism, isolation-
ism and nativism all surged—and that was be-
fore social media. Instead, a decade after the
Depression, American businesses were the envy
of the world, and American workers achieved a
quality of life their parents and grandparents
couldn’t have fathomed.
We’re at that same crossroads right now: to-
ward a Greater Capitalism, or a continued so-
cietal fraying, and the sobering alternative that
this would all be for naught. “We will have a
revolution of one type or another,” Dalio says.
“Either it’s going to be bad. Or we can do this
thoughtfully, together.”
FORBES.COM
 P F I Z E R’S
THE PROFILE C O R O N AV I R U S

64

COVID
BY N AT H A N VA R D I

MOON
A L BE RT BO U R L A H AS
BO L DLY P R E D ICT ED
H I S C O MPA N Y M IG H T
F I ND A N D DI ST RI BU TE
A VAC CI N E BY TH IS
FA LL . TH E F IR ST LO O K
I N SI DE A $ 1 BI LL IO N
B ET TH AT CO UL D
CHANGE THE WORLD.

P H OTO G R A P H BY J A M E L T O P P I N

FORBES.COM
 65

FORBES.COM
 IN
66
THE PROFILE
T H E M I D D L E O F M A RC H , P F I Z E R
C H I E F A L B E R T B O U R L A B E A M E D I N TO
A W E B E X V I D EO C A L L W I T H T H E L E A D E R S
OF THE A M E R I C A N P H A R M A C E U T I C A L
G I A N T ’S VACC I N E R E S E A RC H A N D
M A N U FAC T U R I N G G RO U P S.
The two teams had worked late into the night on a ro-
bust development plan for Pfizer’s experimental Covid-19
vaccine and told Bourla that they aimed to make it available
lightning-fast. It could be ready sometime in 2021.
“Not good enough,” Bourla said. The faces of the re-
searchers tensed up, and conscious of the Herculean effort
that had taken place, Bourla made sure to thank them. But
he also kept pushing. He asked if people on the call thought
the virus might come back in the fall, and what they expect-
ed would happen if a vaccine were not available when a new
flu season hit at the same time, an issue the federal Centers
for Disease Control raised weeks later.
“Think in different terms,” Bourla told them. “Think you
have an open checkbook, you don’t need to worry about
such things. Think that we will do things in parallel, not se-
quential. Think you need to build manufacturing of a vac-
cine before you know what’s working. If it doesn’t, let me
worry about it and we will write it off and throw it out.”
Says Mikael Dolsten, Pfizer’s chief scientific officer: “He
challenged the team to aim for a moon shot–like goal—to
have millions of doses of vaccine in the hands of vulnerable
populations before the end of the year.”
FORBES.COM
On the first Monday of May, Pfizer dosed the initial batch
of healthy American volunteers in Baltimore with an ex-
perimental Covid-19 vaccine it developed with Germany’s
BioNTech. Bourla was informed immediately. The follow-
ing day, in an interview from his home in suburban Scars-
dale, New York, he pointed out that it normally takes years
to accomplish what Pfizer had just done in weeks. “How fast
we moved is not something you could expect from the big,
powerful pharma,” he said. “This is speed that you would
envy in an entrepreneurial founder-based biotech.”
A Greek veterinarian who worked his way up the Pfizer
corporate ladder for 25 years before becoming CEO in 2019,
Bourla says nothing in his career could have prepared him
for this moment. But he does believe the massive corporate
transformation he has led—steering a behemoth conglom-
erate (2019 sales: $51.8 billion) deeper into the high-risk,
high-reward game of developing new patented medicines
and away from generic drugs and consumer products like
Advil and Chapstick—has prepared Pfizer.
For Bourla, 58, the last four months have been a roller-
coaster, an unending series of setbacks and victories. Pfizer
is not alone in the race. Most of the world’s biggest pharma-
J U N E / J U LY 2 0 2 0

Shot of Hope ceutical companies, including Johnson & Johnson,
Volunteers receive Sanofi, AstraZeneca and Roche, are throwing ev-
injections of Pfizer’s erything they can at Covid-19.
experimental Covid-19
vaccine in early May Some experts feel Bourla’s timeline—a via-
at the University of ble vaccine in a matter of a few months—is simply
Maryland School of
Medicine in Baltimore. unrealistic. Undeterred, Bourla has tasked hun-
Pfizer is running
tests in three other dreds of researchers to scour Pfizer’s trove of ex-
U.S. cities: New perimental and existing medicines to look for
York, Cincinnati and
Rochester, New York. potential therapies. Early on, he openly autho-
rized having discussions and sharing proprietary
information with rival firms, moves unheard of
UNIVERSITY OF MARYLAND SCHOOL OF MEDICINE
in the secretive world of big pharma. Bourla has
made Pfizer’s manufacturing capabilities avail-
able to small biotech concerns and is in talks as
well to make large quantities of other companies’
Covid-19 drug candidates.
Pfizer’s most prominent effort is its work with
Mainz, Germany–based BioNTech, an innova-
tive $120 million (2019 sales) outfit that is most-
ly known for making cancer medications. The
resulting experimental Covid-19 vaccine works
with messenger RNA, a bleeding-edge technol-
J U N E / J U LY 2 0 2 0
67
THE PROFILE
ogy that has never resulted in a successful treat-
ment. Pfizer is hoping to get emergency-use au-
thorization from the U.S. government for the
vaccine by October. Its unique strategy is to rap-
idly pit four different mRNA vaccine candidates
against one another and double down on the
most likely winner.
In preparation, the company is shifting pro-
duction at four manufacturing plants to make
20 million vaccine doses by the end of the year
and hundreds of millions more in 2021. Bourla
says Pfizer is willing to spend $1 billion in 2020
to develop and manufacture the vaccine be-
fore they know if it will work: “Speed is of para-
mount importance.”
While the vaccine effort is getting most of the
public’s attention, Pfizer is also rushing to start
a clinical trial this summer for a new antiviral
drug to treat Covid-19. Additionally, it’s involved
in a human study that seeks to repurpose Pfiz-
er’s big arthritis drug, Xeljanz, for later-stage
Covid-19 patients.
FORBES.COM
68
THE PROFILE
“Being the CEO of a pharma company that can
make a difference or not in a crisis like this is a
very heavy weight,” Bourla says. “Even the way my
daughter or son ask me, ‘Do you have something
or not?’ Every person who knows me does the
same. You feel if you get it right, you can save the
world. And if you don’t get it right, you will not.”
I
n January, Uğur Şahin, the bril-
liant immunologist who founded
BioNTech, read an article about
Covid-19 in The Lancet. Şahin
built BioNTech to hack human
cells to go after diseases, particularly cancer, and
he thought similar tech might work against the
coronavirus. Soon after, Şahin spoke to Thom-
as Strüngmann, the German pharma billion-
aire who for years has backed Şahin and his
wife, immunologist Özlem Türeci, in their ven-
tures. “He said, ‘This is a big disaster.’ He said
the schools will be closed, that this will be a pan-
FORBES.COM
demic,” Strüngmann says, referring to Şahin. “He A New Reality
switched most of his team to the vaccine.” Pfizer CEO Albert
In February, Şahin (who is also now a billion- Bourla under
lockdown in his
aire, as BioNTech’s stock has soared) called up suburban New York
Kathrin Jansen, who heads vaccine research and home, from which
he has directed his
development for Pfizer. Şahin told Jansen BioN- troops to “make the
impossible possible.”
Tech had come up with vaccine candidates for
Covid-19 and asked if Pfizer would be interest-
ed in working with him. “Uğur, you are asking?”
Jansen replied. “Of course we are interested.”
Over the last few years, scientists have become
intrigued by the idea of using messenger RNA,
the genetic molecule that gives cells protein-
making instructions, to develop medicines for
cancer, heart disease and even infectious virus-
es by transforming human cells into drug facto-
JAMEL TOPPIN FOR FORBES
ries. Because SARS-CoV-2, as the coronavirus is
formally known, is an RNA virus, researchers like
Şahin focused on the idea of giving mRNA the
cellular machinery to make proteins that would
create virus-protecting antibodies.
An mRNA vaccine has huge advantages over
J U N E / J U LY 2 0 2 0
 “A B I L L I O N D O L L A R S I S N OT G O I N G T O B R E A K U S .
A N D I D O N ’ T P L A N TO LOS E I T.
I P L A N T O M A K E S U R E W E US E T H I S P RO D U C T.” 69

THE PROFILE
a traditional one. Because it can be made directly from the to break us. And, by the way, I don’t plan to lose it. I plan
genetic code of the virus, it can be invented and entered into to make sure we use this product,” Bourla says. “You never
clinical trials in a matter of weeks, rather than months or know until you see the data. So yes, we are going to lose a
years. But there’s a big downside: No one has ever success- billion if ” the vaccine doesn’t work.
fully made one. What makes Pfizer’s approach unique is that it’s testing
BioNTech is not alone in pursuing an mRNA vaccine. four distinctive vaccines—different mRNA platforms that
Moderna Therapeutics, a biotech in Cambridge, Massachu- are supposed to induce a safe immune response. The com-
setts, also got going in January and has launched a big hu- plex trial will start by testing different dosing levels of the
man trial for its mRNA vaccine, backed by $483 million four vaccines in 360 U.S. volunteers and 200 in Germany,
from the federal government. Moderna is likewise aiming to eventually expanding to around 8,000 participants.
produce millions of doses per month by the end of the year. The U.S. trial was designed to evolve so the company
Pfizer was already comfortable with BioNTech. Two years could quickly stop testing any one of the vaccines if immu-
ago, the two companies inked a $425 million deal to de- nogenicity data show it is not producing enough antibodies
velop an mRNA flu vaccine. Pfiz- to confer virus protection. The
er was intrigued by the potential companies are making adjust-
of an mRNA approach to short- ments on the fly. BioNTech re-
circuit the process of developing cently realized one of the vaccine
a vaccine for a new strain of the candidates should be dosed at a
flu every year. That same flexibil- lower level to be safe—an ear-
ity and speed appealed to Bour- ly fling of a monkey wrench into
la when it came to working with the plans.
a partner on a potential vaccine There is considerable skepti-
for Covid-19. cism among experts that Pfizer’s
On March 16, Bourla convened goal of providing millions of dos-
Pfizer’s top executives and in- es to vulnerable populations by
formed them that return on in- the fall is possible. Drew Weiss-
vestment would not play a role mann, whose University of Penn-
in the company’s Covid-19 work. sylvania laboratory has worked
First Time
“This is not business as usual,” with BioNTech on mRNA vac-
Bourla told them. “Financial re- Uğur Şahin, the Turkish-born CEO of BioNTech. cines for infectious diseases, re-
The German outfit was founded 12 years ago,
ANDREAS ARNOLD / PICTURE ALLIANCE / GETTY IMAGES

turns should not drive any deci- but despite considerable promise it has yet cently told Forbes it is simply not
to bring an approved drug to market.
sions.” known if an mRNA vaccine can
Pfizer signed a letter of intent prevent infectious disease.
with BioNTech the next day. The Jansen, Pfizer’s vaccine re-
contract they finalized in April makes no mention of com- search chief, expects that Pfizer and BioNTech will have a
mercialization. Pfizer is bringing its enormous manufactur- better idea around the beginning of July as to which of the
ing, regulatory and research capabilities to the effort. BioN- four vaccine candidates is the most promising and whether
Tech is bringing the basic science. their hyper-accelerated timeframe is feasible. The company
At the same time, Bourla made the decision to spend will likely move just one or two of the most promising vac-
$1 billion on the project, so if the vaccine works, it can cines to more advanced trials.
be made available this autumn. Pfizer will also be on the “It’s not easy. As a matter of fact, it has never been done
hook to pay BioNTech an additional $563 million if every- before—I can’t give you a probability,” Jansen says. “An un-
thing goes according to plan. “A billion dollars is not going precedented crisis, such as the ongoing pandemic, requires

J U N E / J U LY 2 0 2 0 FORBES.COM
 unprecedented action. Albert was the first to see that and
act on it, and to provide the support and the environment
for us to think and act boldly.”
W
hen Albert Bourla started his run at the top
of Pfizer in January 2019, he removed the
bulky brown table from the CEO’s con-
70 ference room and did not replace it, re-
arranged the chairs in a circle and put up
photographs of patients on the wall. The idea was to pro-
THE PROFILE
mote open discussion and remind people about the real
purpose of a pharmaceutical company. Soon after, other
Pfizer employees began to put pictures on their desks of pa-
tients they know or love.
The unorthodox way Bourla took to the pinnacle of cor-
porate power started in Greece’s second-biggest city, Thes-
saloniki, a northern port city on the Aegean Sea. He grew up
middle-class—his father and uncle owned a liquor store—
as part of a tiny Jewish minority that survived the German
occupation and the Holocaust.
A love of animals and science drove Bourla to become a
veterinarian. At Thessaloniki’s Aristotle University, he was
known for playing the guitar and singing, and during the
summers worked as a European tour guide. He joined Pfiz-
Making It
Pfizer is stockpiling inventory of its existing vaccines
and injectable drugs to free up manufacturing capacity
to make a Covid-19 vaccine later this year.
er’s Greece office in 1993, working in its animal-health divi-
sion, beginning an ascent that saw him move his family to
eight cities in five countries, including Poland and Belgium.
By 2014, Bourla was a high-level executive at Pfizer’s
Manhattan headquarters on 42nd Street, where, among
other things, he ran Pfizer’s vaccine and cancer divisions.
FORBES.COM
He brought a Mediterranean flair to the buttoned-up con-
glomerate. His group meetings were boisterous, echoing
through the otherwise largely silent corridors. He forced
company units to express their metrics in terms of how
many patients they were helping, not merely in terms of
dollars and cents.
Ian Read, Pfizer’s Scottish-born CEO at the time, had re-
versed the company’s fortunes on Wall Street, where its stock
had been badly underperforming, by repurchasing lots of
shares and divesting businesses that sold baby formula and
animal medicines. Less visibly, Read reinvigorated Pfizer’s
drug pipeline in its core vaccine business and empowered
Pfizer’s researchers to develop targeted therapies, particular-
ly for cancer, as some of its mass-marketed drugs, like the
cholesterol-lowering blockbuster Lipitor, went off-patent.
Bourla’s last job before ascending to the C-suite was as
head of Pfizer’s innovation group. He approached the posi-
tion as though he was running a life-sciences venture capi-
tal firm. He forced each of his six business units, which in-
cluded oncology, vaccines and rare diseases, to compete for
financing. “I was telling all of them, ‘I’m your boss, I am pri-
vate equity, the one who has the better ideas will get the
money,’ ” he says. “A company that has the scale of Pfizer
and the mindset of a small biotech was always my dream.”
“Albert has a sense of urgency, and that is coming out
in the way he is marshaling the company’s resources
behind trying to develop a vaccine or treatment for
Covid-19,” says Read, his former boss. “He is a char-
ismatic people person, energizing groups of people to
get the job done.”
Bourla’s urgency was evident after a difficult week-
end in February when he realized that Covid-19 was
not going to be just a problem for China. On a call
the following Monday morning, Bourla fired off in-
structions to Pfizer’s top brass. He told the science ex-
ecutives to make sure the company’s labs remained
open, and that Pfizer needed to contribute to a med-
ical solution to the pandemic. “If not us, then who?”
Bourla said. He instructed the manufacturing group
to make a list of Pfizer’s drugs—including those that
treat heart failure and opportunistic bacterial infec-
tions—that would be in high demand in a pandemic
and make sure they wouldn’t be hampered by produc-
tion bottlenecks. He then officially informed the board
that he was pivoting the company toward Covid-19.
One day in the midst of this retooling, Pfizer direc-
tor Scott Gottlieb, who used run the FDA, left the com-
UNIVERSITY OF MARYLAND SCHOOL OF MEDICINE
pany’s Manhattan headquarters, and within hours his
fears were coming to pass: Reports were emerging
from California indicating community spread in Amer-
ica. That evening Gottlieb posted a Twitter thread: A
long fight could be ahead, one requiring shared sacri-
fice, he said—but partly because of Bourla’s efforts at Pfizer,
he could also say that development of vaccines and therapeu-
tics was already underway.
“Albert laid out early why it was so important to put up the
enormous resources of Pfizer without an eye toward the busi-
ness bottom line,” Gottlieb says. “Coming up with a vaccine
J U N E / J U LY 2 0 2 0
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 “THE BETTER IDEAS W I L L G E T T H E M O N E Y.
A C O M PA N Y W I T H T H E S CA L E O F P F I Z E R
72
A N D T H E M I N D S E T O F A S M A L L B I OT EC H
WA S A LWAYS M Y D R E A M .”
THE PROFILE

could change the course of human history. That is literally
what’s at stake, and big companies have the ability to scale
up manufacturing and run big trials in a way not available to
small product developers.”
searchers figured out which could work best.
Conducting preclinical work on the selected compounds,
however, was difficult. Pfizer had trouble finding a lab that
could perform the proper assays. The company had scaled
down its antiviral research a decade ago and no longer
owned a suitable biosafety lab to work with the live virus.

I
n the middle of March, Bourla decided to At one point, Bourla feared the lack of a lab would delay
publicly release Pfizer’s plan to share data the clinical-trial process. But a separate government medi-
from its Covid-19 research with rival phar- cal agency helped Pfizer find a good one in the Netherlands.
maceutical companies. He promised to use There have been “multiple moments of bad news coming
any excess manufacturing capacity and even to spoil the good news you had three hours earlier,” Bourla
shift production at Pfizer’s says. Pfizer’s laboratory work
facilities away from its own has since shown one of its pro-
products to make Covid-19 tease inhibitors, initially de-
treatments from other com- veloped to battle SARS, to ex-
panies. “You know the saying,” hibit antiviral activity against
Bourla says. “Beware [of] SARS-CoV-2. Pfizer is now
what you wish for.” aiming to start a human trial
Since then, Pfizer has heard for that antiviral, which is ad-
from 340 companies. It has al- ministered intravenously, by
ready given technical support the end of the summer.
to some of them and is on the Another Pfizer drug getting
brink of signing large man- attention is Xeljanz, a rheu-
ufacturing agreements with matoid arthritis pill generat-
others. It is also in discussions ing $2.2 billion annually. It
with additional firms that is seen as a potential way to
need financing for their own “Quick Kill” tamp down the massive im-
Covid-19 therapies. That’s how Kathrin Jansen, Pfizer’s vaccine-research mune response to Covid-19
“Will my kids go to school chief, describes its approach to its four vaccine that overwhelms some infect-
candidates: Terminate any vaccine that’s not showing
next fall?” Bourla wonders. it can produce sufficient neutralizing antibodies. ed patients. Pfizer is support-
“I’m also part of society. You ing a Xeljanz trial in Italian
cannot stay silent.” Covid-19 patients, as well as
At a video meeting of Pfizer’s board of directors in late another U.S. trial that will test a different arthritis medi-
April, Bourla was asked what would happen if multiple vac- cine, an experimental drug that targets the Irak-4 protein,
cine makers were successful. That would be the best possi- against the virus.
ble outcome, he replied, because enormous amounts of vac- While all this is going on, of course, Bourla still needs to
cine could be quickly produced. run the rest of Pfizer. He recently planned a symbolic visit
Beyond the holy grail of a vaccine, Pfizer is also trying to to a Pfizer plant—none has closed—but after making the ar-
come up with therapeutic solutions. The researchers tasked rangements, he was informed that he would not be allowed
with combing through Pfizer’s molecular database became to enter because he was not deemed essential.
intrigued by several of its antiviral compounds that might “I don’t know if I was ever prepared for something like
attack the virus by stopping it from reproducing. After Pfi- this,” Bourla says. “But you feel that you need to suck it up
PFIZER

zer got the DNA sequence of the coronavirus in January, re- and rise to the occasion because that’s what you have to do.”

FORBES.COM J U N E / J U LY 2 0 2 0
 When
my mom
was diagnosed with cancer,
I towanted
have access to
her
the best
treatments
available.
SONEQUA MARTIN-GREEN
Stand Up To Cancer Ambassador

Photo By
MATT SAYLES

THAT’S WHY I’M SO PASSIONATE ABOUT EXPANDING AWARENESS

OF CLINICAL TRIALS
You want the best treatments for your loved ones. My mom’s cancer was treated using a therapy
made possible by clinical trials. I want all people diagnosed with cancer to have access to the
treatments that will make them long-term survivors, like my mom.

Cancer clinical trials may be the right option for you or a loved one. The more information you
have about clinical trials, the more empowered you will be to seek out your best treatments.

Learn more at StandUpToCancer.org/ClinicalTrials

Stand Up To Cancer is a division of the Entertainment Industry Foundation (EIF), a 501(c)(3) charitable organization.
74

It’s Raining Debt, Hallelujah!

For a decade, chief executives

of the world’s largest companies
welcomed Fed-sanctioned debt
on their balance sheets and made
themselves and their shareholders
rich. Covid-19 has turned the
strategy into an addiction.

FORBES.COM
 T H E I N V E S T I G AT I O N

MORAL HAZARD
75

T HANKS TO TH E
F EDE RA L RES E RVE’S
LOW-R AT E R EL IG IO N,
BIG COMPA N IE S HAVE

S PEN T THE LAST D ECAD E

GORGI NG ON DE BT,
SOME RECKLE SSLY.

BUT INST EAD OF HEA DIN G

TOWAR D BANK RUPTCY,
T HE Y ’R E NOW BEING PROP PED
U P BY TH E GOVERNMENT.

DUKES
BY A N T O I N E G A R A A N D N AT H A N VA R D I
of
I L LU S T R AT I O N BY I S R A E L G . VA R G A S
 → When chief executive
76
Doug Parker took the pilot’s
seat at American Airlines in
T H E I N V E S T I GAT I O N

December 2013, it seemed as

though clear skies were ahead.
His U.S. Airways had finally bagged a major entering a new golden age. Carriers like Amer-
partner by agreeing to combine with bankrupt ican had mastered the science of dynamic fare
American. The new company would emerge with pricing, and now nearly every seat on every flight
modest debt as the nation’s largest airline, with was full, maximizing revenue and efficiency.
only three domestic carriers left among its glob- Hailing the arrival of a “new American” by ear-
al competitors. ly 2014, Parker was eager to please Wall Street.
The financial crisis was well in the past, the “I assure you that everything we’re doing is fo-
economy was humming and travel seemed to be cused on maximizing value for our shareholders,”
he said on a call with investors.
Over the next six years, Parker borrowed heav-
ily, tapping capital markets no fewer than 18
B LU E- C H I P times to raise $25 billion in debt. He used the
D E BT J U N K I E S money to buy new planes and shore up Ameri-
can’s pension obligations, among other things.
FEW COMPANIES HAVE BEEN ABLE TO RESIST A host of passenger fees for additional baggage,
THE LURE OF LEVERAGE. BELOW ARE ARE SOME OF more legroom, in-flight snacks, drinks and more
THE BIGGEST BORROWERS.
helped swell the bottom line to $17.5 billion in
NET DEBT- combined profits from 2014 to 2019. Keeping
2010 2019 TO-REVENUE
COMPANY NET DEBT (BIL) NET DEBT (BIL) INCREASE his pledge, Parker declared a regular dividend in
2014—American’s first in 34 years—and began
Eli Lilly $0.2 $13.5 70.1x
buying back billions of the airline’s stock.
FedEx 0.1 16.8 67.0
“Holding more cash than the company needs
Becton, Dickinson 0.5 19.2 17.1 to hold is not a good use of our shareholders’
Exxon Mobil 6.6 49.7 10.1 capital,” he reasoned. That was music to hedge
Freeport-McMoRan 1.0 8.0 10.0 funders’ ears as they piled into American stock.
Church & Dwight 0.2 2.1 8.2 Even Berkshire Hathaway’s Warren Buffett
LyondellBasell Industries 1.9 12.4 7.9 bought a chunk of the company. Out of bankrupt-
Parker-Hannifin 1.0 8.8 6.6 cy, its stock took off almost immediately, doubling
McKesson 0.8 9.9 5.7 during Parker’s first year on the job. For his man-
Conagra Brands 2.6 10.4 4.6
agerial brilliance, Parker was rewarded with an-
nual compensation surpassing $10 million.
Halliburton 1.8 8.2 3.7
Fast-forward to April 2020, and a contagion
DISH Network 3.6 11.4 3.2
known as SARS-CoV-2 has leveled the travel in-
Wynn Resorts 2.0 8.2 2.6
dustry. American Airlines is flat broke, in part
Coca-Cola 12.1 33.0 2.6 because of Parker’s profligate spending. Now the
Campbell Soup 2.8 6.9 2.3 U.S. government has agreed to advance it $5.8
billion in the form of grants and low-interest
Source: Factset, Sentieo, CreditSights

FORBES.COM J U N E / J U LY 2 0 2 0
 loans—the largest payment to any airline in the
government’s $25 billion industry bailout pack-
age. Many hedge fund investors have sold their
shares, as has Berkshire Hathaway. American
stock is now worth just one-third of the $12 bil-
lion Parker spent on buybacks alone.
Despite recent boom times, American’s balance
sheet is a disgrace. Over the last six years, Park-
er added more than $7 billion in net debt, and to-
day its ratio of net debt to revenue is 45%, about
double what it was at the end of 2014. American
says it plans to pay down its debt “aggressively” as
soon as business returns to normal.
Debt-laden American Airlines is not an out-
lier among the nation’s largest corporations,
though. If anything, its financial gymnastics
might well have been a playbook for board-
rooms around the country. Year after year, as
the Federal Reserve pumped liquidity into the
economy, some of the biggest firms in the Unit-
ed States—Coca-Cola, McDonald’s, AT&T, IBM,
General Motors, Merck, FedEx, 3M and Exx-
on—have binged on low-interest debt. Most of
them borrowed more than they needed, often
returning it to shareholders in the form of buy-
backs and dividends. They also went on acquisi-
tion sprees. Their actions drove the S&P 500 in-
dex ever higher—by 13.5% on average annually
from 2010 through 2019—and with it came in-
creasingly rich pay packages for the CEOs lead-
ing the charge. The coup de grâce was President
Trump’s 2017 tax cut, which added even more
helium to this corporate-debt balloon.
According to a Forbes investigation, which
analyzed 455 companies in the S&P 500 In-
dex—excluding banks and cash-rich tech giants
like Apple, Amazon, Google and Microsoft—on
average, businesses in the index nearly tripled
their net debt over the past decade, adding some
$2.5 trillion in leverage to their balance sheets.
The analysis shows that for every dollar of reve-
nue growth over the past decade, the companies
added almost a dollar of debt. Most S&P 500
firms entered the bull market with just 20 cents
in net debt per dollar of annual revenue; today
that figure has climbed to 38 cents.
But as the coronavirus pandemic cripples com-
merce worldwide, American corporations face a
grim reality: Revenues have evaporated, but their
crushing debt isn’t going anywhere.
A year ago, Federal Reserve chairman Jerome
Powell sounded an alarm, but he could barely be
heard above the roar of the ascendant stock mar-
ket. “Not only is the volume of debt high,” said
Powell last May, “but recent growth has also
MCDONALD’S
been concentrated in the riskier forms of debt.
. . . Among investment-grade bonds, a near-rec-
ord fraction is at the lowest rating—a phenom-
J U N E / J U LY 2 0 2 0
enon known as the ‘triple-B cliff.’ ” Powell was
referring to the fact that a large number of com-
panies’ bonds were dangerously close to junk sta-
tus. “Investors, financial institutions and regula-
tors need to focus on this risk today, while times
are good.”
Powell has stopped preaching. Facing the
frightening prospect of widespread corporate
insolvencies, the Fed on March 23 announced 77
a credit facility designed to support the corpo-
rate bond market. Two weeks later, the central
T H E I N V E S T I GAT I O N
bank stunned Wall Street by saying it would go
into the open market to buy junk bonds as well
as shares in high-yield bond ETFs.
All told, the Federal Reserve is now earmarking
$750 billion, supported by $75 billion from tax-
Since 2014, McDonald’s has been
able to return more than $50 billion
to its shareholders. The special sauce
in its success? Debt.
payers, to help large companies survive the pan-
demic—all part of its $2.3 trillion rescue package.
“We have a buyer and lender of last resort,
cushioning pain but taking over the role of the
free market,” groused Howard Marks, the bil-
lionaire cofounder of Oaktree Capital, in a memo
April 14. “When people get the feeling that the
government will protect them from [the] un-
pleasant financial consequences of their ac-
tions, it’s called ‘moral hazard.’ People and insti-
tutions are protected from pain, but bad lessons
are learned.”
The lesson to corporate-debt junkies is clear:
Taxpayers be damned, the federal spigot is wide
open. In the last two months alone, according
to Refinitiv, no fewer than 392 companies have
issued $617 billion in bonds and notes, includ-
ing a record number of triple-B issues, piling on
still more debt that they may not be able to pay
back. As Warren Buffett observed during Berk-
shire’s annual shareholder meeting on May 2,
“Every one of those people that issued bonds in
late March and April ought to send a thank-you
letter to the Fed.”
FORBES.COM
 A
merica’s foremost corporate citi-
zens—companies found in near-
ly every retirement account—did
not become debt dependents all
by themselves. It took some prod-
ding, mostly by Wall Street’s savviest participants.
Take the case of McDonald’s, known for restau-
rants in nearly every town in the U.S., its icon-
78 ic golden arches offering fast, budget-friendly
meals to billions.
It all started before the 2008 crisis, when bil-
T H E I N V E S T I GAT I O N
egy by selling company-operated restaurants
to franchisees, just as Ackman had wanted. To-
day, 93% of the 38,695 McDonald’s worldwide
are operated by small entrepreneurs who cover
maintenance costs and pay the parent company
rent and royalties for the privilege of operating
in its buildings, using its equipment and selling
its food.
The new and improved “asset light” McDon-
ald’s no longer manages cumbersome assets; in-
stead, it receives those payments and is sitting on

lionaire investor Bill Ackman began agitating
the Chicago-based burger behemoth, demanding
that it divest most of its 9,000 company-owned
stores to independent operators in order to buy
back $12.6 billion in stock. McDonald’s success-
fully repelled the hedge fund activist, but during
the recovery, its growth stalled.
Starting in 2014, McDonald’s chief executive,
Don Thompson, began piling on leverage to fund
share repurchases. A year later his successor,
Steve Easterbrook, amped up Thompson’s strat-
tens of billions in debt. From 2014 through the
end of 2019, McDonald’s issued some $21 bil-
lion in bonds and notes. It also repurchased more
than $35 billion in stock and paid out $19 billion
in dividends, returning over $50 billion to share-
holders, far in excess of its profit ($31 billion) over
that period.
That was just fine by Wall Street. McDonald’s
became a hedge fund darling, its shares more
than doubling during Easterbrook’s tenure, from
2015 to 2019. His reward was $78 million in gen-

R AC E TO T H E TO P
CORPORATE DEBT HAS SKYROCKETED TO MORE THAN $10 TRILLION, ACCORDING TO
THE ST. LOUIS FED, BUT IT MAY ULTIMATELY BE OVERTAKEN BY THE GOVERNMENT. SAID
JEROME POWELL ON 60 MINUTES: “WE’RE NOT OUT OF AMMUNITION BY A LONG SHOT.”

$12,000 B
Nonfinancial corporate Total assets of the
business; debt securities and Federal Reserve
loans; liability, level
$10,000 B

$8,000 B

$6,000 B

$4,000 B

$2,000 B

0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: Federal Reserve Bank of St. Louis

FORBES.COM J U N E / J U LY 2 0 2 0
 erous pay packages over five years.
The risk added to McDonald’s balance sheet
has been dramatic, however. In 2010, the com-
pany carried just 38 cents in net debt per dollar
of annual sales, but by the time Easterbrook was
fired in late 2019 amid news of a workplace af-
fair, it had $1.58 in net debt per dollar of revenue.
Today its net debt stands at $33 billion, nearly
five times greater than before the financial crisis.
Its bonds are rated triple-B, two notches above
junk, down from their A rating in 2015.
With most of its restaurants nearly empty dur-
ing the pandemic, McDonald’s stock initially fell
by almost 40%. Thanks to the Fed’s intervention,
though, McDonald’s debt, which at first slumped
to 78 cents on the dollar, recovered along with
the stock, as the company quickly raised an addi-
tional $3.5 billion. McDonald’s insists that it en-
tered the crisis with a strong balance sheet and
overall financial health. It recently suspended its
share repurchases.
The startling truth, though, is that the burger
giant’s leverage is actually modest compared to
one of its foremost competitors, Yum Brands, the
$5.6 billion (revenue) owner of Pizza Hut, Taco
Bell and KFC. After Greg Creed took charge as
CEO in 2015, activist hedge fund managers Keith
Meister, of Corvex Management, and Daniel
Loeb, of Third Point, took big positions. By Oc-
tober of that year, Meister was on Yum’s board of
directors; days after his appointment, the com-
pany said it was “committed to returning sub-
stantial capital to shareholders” and spinning off
its Yum China division, which generated 39% of
its profits.
Over the next year, Creed borrowed $5.2 bil-
lion to fund $7.2 billion of stock buybacks and
dividends. Yum retired some 31% of its common
shares, and as expected, its stock price doubled
to over $100 by the end of 2019. Shareholders
were thrilled, but Yum’s financial staying pow-
er was severely compromised. In 2014, Yum had
just $2.8 billion of net debt, accounting for 42%
of net revenue; by 2020, that figure had swelled
to $10 billion, or 178% of net revenue. Heading
into the coronavirus economy, Yum was a bas-
ket case, but thanks to the Fed and a $600 mil-
lion bond issue in April, it will live to see anoth-
er day.
Yum management scoffs at the idea that the
Fed helped in any way. “We’re not aware of Fed-
eral Reserve intervention in the high-yield mar-
ket or in our ability to issue $600 million of high-
yield bonds,” the company says.
Like McDonald’s, Yum sold many of its com-
pany-owned outlets to independent franchisees.
Without access to capital markets and the Fed’s
HEINZ
largesse, their future isn’t so certain. Yum is giv-
J U N E / J U LY 2 0 2 0
79
Even Warren Buffett’s Berkshire
Hathaway got caught up in the great
T H E I N V E S T I GAT I O N
debt binge. His investment in debt-laden
Kraft Heinz has been a big loser.
ing some of its franchise owners a 60-day grace
period to make their royalty payments. David
Gibbs, who replaced Creed as CEO in January,
speculated at the end of April that if need be it
would take over the franchises and sell them off.
Of course, some argue that the de facto lev-
eraged buyouts of publicly traded companies
like McDonald’s and Yum were actually pru-
dent given the Federal Reserve’s decade-long
easy-money approach to monetary policy. “As
a corporate finance matter, it was almost irre-
sponsible to overfinance with equity given that
[debt] was unbelievably cheap,” says Arena In-
vestors’ Dan Zwirn.
According to the St. Louis Federal Reserve, as
of the end of 2019, non-financial business debt
totaled $10 trillion, climbing 64% from the be-
ginning of the decade. “Every penny of the quan-
titative easing by the Fed translated into an equal
match of corporate debt that went into share buy-
backs, which ultimately drove the share count of
the S&P 500 to the lowest level in two decades,”
says economist David Rosenberg. “This was a
debt bubble of historic proportions. . . . Then
again, nobody seemed to mind as long as the gra-
vy train was still operating.”
I
f there were an award given for
corporate recklessness, however,
few would challenge mighty Boe-
ing, the world’s largest aerospace
and defense manufacturer and the
nation’s single biggest exporter. Once the pride of
industrial ingenuity in America, Boeing has been
hypnotized by the lure of financial engineering.
Starting in 2013, the Chicago-based compa-
ny decided it would make sense to commit nearly
every penny of profit, and then some, to its share-
holders. It sent $64 billion out the door—$43
billion worth of buybacks and $21 billion in div-
idends—saving little under CEO Dennis Muilen-
FORBES.COM
 berg to cushion against the industry’s expected
hazards, such as manufacturing difficulties, labor
disputes and recessions.
After two of its 737 MAX planes crashed with-
in five months and the FAA grounded the air-
craft in 2019, Boeing’s aggressive financial pol-
icies were exposed, and it was forced to turn to
debt markets for emergency cash. The compa-
80 ny, which had essentially no debt in 2016, end-
ed 2019 with $17 billion in net debt. This March,
Boeing drew fully on a $13.8 billion credit line
T H E I N V E S T I GAT I O N
to contend with the grounding of air travel, and
Standard & Poor’s downgraded its credit rating
to the lowest rung of investment-grade.
Boeing flirted with a bailout, initially asking
the government for $60 billion for the aerospace
industry. But in late April, chief financial officer
Greg Smith told investors the Defense Depart-
ment was taking steps to bolster its liquidity, and
that the Coronavirus Aid, Relief and Economic
Security (CARES) Act had helped it defer some
tax payments. Boeing also began weighing fund-
ing options from programs run by the Treasury
and Fed. “We believe that government support
will be critical to ensuring our industry’s access
to liquidity,” said Boeing’s new CEO, David Cal-
Given its woes, much of Altria’s
$12.8 billion investment in e-cigarette
maker Juul may vaporize—but the
avalanche of debt it has issued
isn’t going away.
houn, on April 29. The next day, Boeing launched
a $25 billion bond offering, eliminating the need
for a direct bailout. The issuance, which in-
cludes bonds that aren’t redeemable until 2060,
was oversubscribed, as institutional investors no
doubt assumed that Boeing’s recovery was a mat-
ter of national importance to the government.
While delivering cash back to shareholders
was an obsession of Boeing’s CEO, becoming a
giant in entertainment via acquisitions has been
the hallmark of Randall Stephenson’s 13-year
tenure as CEO of AT&T. Since his start atop the
143-year-old company once revered as Ma Bell,
FORBES.COM
Stephenson has spent more than $200 billion—
mostly on acquisitions of DirecTV and Time
Warner, among others, but also on stock buy-
backs and the telecom’s $2 annual dividend. All
told, Stephenson piled on almost $100 billion in
new net debt. “AT&T is the most indebted non-
financial company the world has ever seen,” says
telecom analyst Craig Moffett.
Hedge fund shareholder Elliott Management
minces few words when it comes to Stephenson’s
antics: “It has become clear that AT&T acquired
DirecTV at the absolute peak of the linear TV
market,” Elliott said of the $67 billion purchase in
a September 2019 letter to the board. As for the
$109 billion Stephenson spent on Time Warner,
“AT&T has yet to articulate a clear strategic ratio-
nale for why AT&T needs to own Time Warner.”
Elliott, long known for rattling corporate cag-
es, contends that Stephenson’s worst deal was
his $39 billion run at T-Mobile in 2011. “Possibly
the most damaging deal was the one not done,”
Elliott said in the same letter, referring to the
year-long waste of corporate resources capped
by AT&T’s ultimate withdrawal from the deal,
which forced it to pay T-Mobile a record $6 bil-
lion breakup fee. “[AT&T] capitalized a viable
competitor for years to come,” Elliott’s letter said.
Elliott and other investors were no doubt feel-
ing ripped off by AT&T. Unlike Boeing, whose
debt gorging and buybacks caused its stock to
soar, AT&T’s shares have gone nowhere for a de-
cade. What the debt-dependent duo do have in
common is that financially, at least, they bear lit-
tle resemblance to their former blue-chip selves.
S
hocking as the pandemic of 2020
has been to the global econo-
my, the fallout from a decade of
debt binges by corporate giants
might be only beginning. The
landscape is littered with companies suffering
from self-inflicted wounds. A prolonged reces-
sion could push some overleveraged firms to-
ward insolvency, especially if interest rates rise
and the Treasury’s multitrillion-dollar “save the
economy at any price” plan makes inflation do
the same.
Altria, the seller of Marlboro cigarettes, in-
creased its net debt from $10 billion to $26 bil-
lion over the past decade, spending most of its
operating cash flow on dividends and share re-
purchases and wasting $15 billion on stakes in
Juul Labs and cannabis company Cronos Group
with little payoff. The cigarette merchant now
holds $1.31 of net debt per dollar of annual rev-
enue, up from 58 cents in 2010.
ALTRIA
For most of its 118-year history, Minnesota’s
J U N E / J U LY 2 0 2 0
4 th
October
8&9, 2020
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 3M, the maker of N95 masks, Post-It notes and
Scotch tape, carried almost no leverage. From
2010 to today, however, its net debt has swollen
17-fold to nearly $18 billion, or 55% of revenue.
Standard & Poor’s downgraded 3M’s bonds in
February, and it was among the first issuers to
tap unfrozen bond markets in late March.
O’Reilly Automotive, the $10 billion (revenue)
82 Missouri-based auto-parts retailer, has been one
of the decade’s stock market darlings. The family-
run business discovered cheap debt in the 2010s,
T H E I N V E S T I GAT I O N
using it to buy back $12 billion in stock and re-
tire nearly half its outstanding shares. Over the
decade, its net debt ballooned almost 12-fold to
$4 billion. O’Reilly took on another $500 mil-
lion, just in case, on March 25.
General Dynamics, known for its Navy ships,
CEO Vicki Hollub has boosted Occidental
Petroleum’s net debt nearly fivefold
since 2016. Covid-19 and oil’s collapse
have put Oxy on bankruptcy watch.
Gulfstream jets and government contracts, had
little debt in 2010, but since CEO Phebe No-
vakovic took over in 2013, it has bought back
about $13 billion in stock and paid out $6 bil-
lion in dividends, finishing last year with $11
billion of net debt.
IBM has been a buyback champion for years,
paying 90% of its free cash flow to shareholders
to return $125 billion to them from 2010 to 2019.
Big Blue’s debt, including customer financing,
has grown from 17% of net revenue to 70%, with
FORBES.COM
$52 billion in net debt currently outstanding.
Even Berkshire Hathaway got caught up in
the great debt binge. In 2013, Buffett teamed
up with Brazilian private equity firm 3G Cap-
ital, cofounded by billionaire Jorge Paulo Le-
mann, to buy H.J. Heinz for $28 billion and,
two years later, Kraft Foods for $47 billion. The
resulting company was stocked with brands of
yore such as Jell-O, Velveeta and Oscar May-
er—as well as $30 billion of debt. After floating
a $143 billion takeover of Unilever that would
have reportedly required $90 billion of addi-
tional debt, business at the massive food con-
glomerate began to spoil.
Kraft’s market capitalization has plunged
from $118 billion at its peak in February 2017 to
$38 billion, and Berkshire Hathaway’s shares,
which are carried on its books at $13.8 billion,
now trade for just $10 billion. In February, both
S&P and Fitch cut Kraft’s bonds to junk. Kraft
Heinz maintains that its balance sheet, and the
demand for its brands, are strong.
In the oil patch, meanwhile, many are too
sick even to take advantage of the Fed’s gener-
osity. Vicki Hollub, the CEO of Occidental Pe-
troleum, has increased its net debt nearly five-
fold since she took over in 2016, to $36 bil-
lion, not counting the $10 billion in preferred
financing Hollub took from Buffett. Her $55
billion takeover of Anadarko Petroleum closed
last August—just in advance of the worst oil-
price plunge since the 1980s as Russia and Sau-
di Arabia flooded markets with supply early
this year. With West Texas Intermediate crude
hovering near $30 a barrel as of press time, Oc-
cidental looks to be heading for restructuring
or even bankruptcy.
If Oxy is allowed to go bust, though, it will
probably be the exception. The U.S. govern-
ment can’t afford to let market forces alone dic-
tate the future of too many companies. Already,
retailers Neiman Marcus, J.Crew and JCPenney
have filed for bankruptcy. The Federal Reserve
has made it clear that to try to avoid global eco-
nomic devastation worse than that seen during
the Great Depression, it regards the nation’s
largest publicly traded companies as, basical-
ly, too big to fail. “The Fed and Treasury have
essentially created a new moral hazard by so-
cializing credit risk,” wrote Scott Minerd, CIO
of Guggenheim Partners.
BlackRock is predicting an expansion of the
TIM PANNELL FOR FORBES
Federal Reserve’s balance sheet by a “stagger-
ing” $7 trillion by the end of the year.
In some ways, it seems, the Fed’s actions are
tantamount to trying to cure addiction by in-
creasing the dosage of the very substance the
addict is abusing.
J U N E / J U LY 2 0 2 0
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 T H E S AG A

WORST.
84

DEAL.
EVER.
BY N OA H K I R S C H

FORBES.COM
 After Eric Baker was fired from
StubHub, the ticketing giant he
cofounded, he tried to even the
score by raising $4 billion to buy
it back—weeks before coronavirus
utterly destroyed the business.
Revenge isn’t always sweet.
SHUTTERSTOCK
 It’s
86
THE SAGA
Thanksgiving Eve 2019, and Eric Baker is already celebrating. “There
has never been a better time to be in live events,”
he says giddily, knowing that he’s positioned to
profit from pretty much all of them. Two days
earlier, Baker had announced the biggest deal
of his life. His online ticket marketplace, Viago-
go, would buy its larger rival StubHub from eBay
for $4.05 billion. It was a tale, for Baker, of tri-
umph and revenge. He had cofounded StubHub
at Stanford Business School; then his cofounder
kicked him out, spurring him to covertly launch
Viagogo overseas. November’s announcement of-
fered Baker a shot at redemption. “It’s personally
satisfying to have my two babies together and be
able to reunite them,” he said then.
Three months later, on February 13, the deal
closed. Baker, 47, whose company had paid with
a combination of $2 billion in debt and $2 bil-
lion in cash, had created a global colossus that
sold millions of event tickets last year, bringing
in $1.5 billion in combined annual revenue. His
23% stake in the new firm put him close to be-
coming a billionaire.
Then came the pandemic.
As the coronavirus rippled further into Asia,
then across Europe and into North America,
stadiums shuttered, artists canceled tours and
Broadway shows went on hiatus—wiping out at
least 90% of StubHub and Viagogo’s revenues,
analysts estimate. StubHub furloughed two-
thirds of its U.S. staff in late March. Around the
same time, Moody’s downgraded the companies’
outlook from stable to negative.
“[It’s a] spectacular misfortune to have shelled
FORBES.COM
out $4 billion four weeks before the entire in-
dustry locked down,” says Eric Fuller, a consul-
tant who tracks the ticketing market. Though
the firms have limited overhead—they stock no
inventory of their own—Fuller thinks StubHub
could soon file for bankruptcy unless it secures
a bailout. (StubHub declined to comment, but a
spokeswoman told the Sports Business Journal
in April that it “is not going bankrupt.”)
It gets worse. The British government has
launched an antitrust investigation into the ac-
quisition, forcing Viagogo and StubHub to keep
operating separately until at least June. Viagogo
says it is cooperating with what it calls a routine
investigation. Not only has that delayed efforts to
streamline the businesses, but Baker can’t even
call the management team at StubHub to help
them navigate the crisis, even though he owns it.
Success is nearly always a matter of some luck
and good timing. In this case, Baker—who de-
clined repeated requests for a follow-up interview
—had neither. It’s rare that you can judge a deal
within months of completion, but the verdict on
this one is absolute: Baker’s purchase of StubHub
will go down as one of the worst deals in history,
closed just days before the pandemic eviscerated
the live-events business that, with regard to ticket
reselling, he had so gleefully cornered.
B
aker’s résumé—Harvard, Stanford,
McKinsey, Bain—reads like a man-
ual on how to get rich. Credit that
trajectory, perhaps, partly to the dy-
nasty in which he grew up. His ma-
ternal grandfather was a real estate entrepreneur,
and his paternal grandfather ran Baker Industries,
a security company that operated armored cars.
Baker’s father, Malcolm, eventually took over the
family business, which was acquired in 1977 for
$118 million (roughly $500 million today).
“It was always driven into me, the excitement
of trying to build something, be your own boss,
control your own destiny,” Baker says. “I didn’t
really know how that would manifest.”
He started by enrolling at Harvard, where he
studied government, then followed a frequent-
ly trodden path to McKinsey in search of “a lot
of money.” But he quickly grew bored. “It wasn’t
necessarily for me,” he said in a 2012 interview at
USC. “It’s a lot of very high-IQ people who aren’t
tremendously commercial all the time.”
Two years into the job, in 1997, Baker jumped
to the private equity firm Bain Capital, helmed
at the time by Mitt Romney. “Obviously, I was
the low man on the totem pole,” he says, but “I
learned more in my two years at Bain Capital
than anywhere else I’ve ever been.”
J U N E / J U LY 2 0 2 0
 87

THE SAGA

It was during his time at Bain, according to There he met Jeff Fluhr, a square-jawed first- Big Return
Baker, that he first hatched the idea for an on- year student with his own private equity pedi- StubHub partnered
line ticket marketplace. His girlfriend wanted gree. The two entered a version of Baker’s con- with lending company
Affirm this year to
FOCUS ON SPORTS/GETTY IMAGES

to see The Lion King on Broadway, but tickets
were scarce, requiring him to look on the second-
ary market. “ ‘How do you do it?’ ” he remembers
thinking. “ ‘Do I go on a street corner?’ I’d have
to look online and find a ticket broker and pay
through the nose. It wasn’t a lot of fun.”
He kept the idea in his back pocket until he
landed at Stanford Business School the next fall.
cept into Stanford’s annual business-plan com- let buyers finance
petition. Among dozens of entries, they were tickets to the Super
Bowl—at sky-high
named one of six finalists. interest rates ranging
from 10% to 30%.
But on the day of the finals, the pair didn’t
show up. “We wanted to stay under the radar
screen of potential competitors,” says Fluhr, who
has since cofounded the VC firm Craft Ventures,
which has made investments in Houzz, Twilio

J U N E / J U LY 2 0 2 0 FORBES.COM
 and Warby Parker, among others.
From there, the founders’ paths diverged
for the first time. Fluhr dropped out of school
to work on the business with a small team, in-
cluding Jeff Lawson, who is now the billionaire
founder of Twilio. It was risky: The dot-com bub-
ble had just burst. “We were sort of swimming
against the current,” Fluhr says.
88 Baker stayed back at Stanford, though he of-
fered input on the side and retained an equity
stake. “He didn’t initially want to commit,” says
THE SAGA
an early StubHub employee. The site launched in
October 2000 without him.
By the time Baker rejoined in June 2001 as
president, Fluhr, who was then
CEO and the firm’s largest individ-
ual shareholder, had already sub-
stantially refined the business plan:
Brokers or regular ticket holders
could list their tickets on the site;
StubHub would take a cut from
both buyer and seller. (Its fees now
average 23%.)
By 2004, even as business was
booming, the founders were clash-
ing. According to a later report in
Fortune, Baker wanted to focus
on partnerships with major sports
leagues, while Fluhr sought to grow
StubHub as an independent enti-
ty. “It’s not the first time people have
[had] a falling-out,” Baker said last
November. “Just the way things were
structured, Jeff owned a little bit
more stock than I did.” According to
Baker, the board and Fluhr wanted
him out. “They just said . . . ‘You’re
gone. You’re fired. Leave.’ ”
Baker thought about traveling the world for
a year. Then he had a better idea. When he left
StubHub, the company had never asked him
to sign a noncompete agreement. “I think the
thought process was, well, ‘Gosh, Eric is the sec-
ond-largest shareholder, he’s not going to com-
pete,’ ” Baker recalls. That was wrong. Barely a
month after getting let go, while planning the
first leg of his trip, to London, Baker realized his
former colleagues were years away from expand-
ing into Europe. He decided to beat them to it.
W
earing a powder-blue button-up—
no tie, as always—Baker made his
grand reveal in Europe in Au-
gust 2006. After a year of stealthy
planning, he held a press launch
for Viagogo, flanked by executives from Man-
chester United and Chelsea Football Club, its in-
FORBES.COM
augural partners. “[StubHub] didn’t know that
I’d done it until we made the announcement,”
Baker told Forbes. “I think they were shocked.”
He had little time to revel in his revenge. The
next year, eBay acquired StubHub for $310 mil-
lion. Baker opposed the deal, thinking Fluhr &
Co. had sold out too early, as he later told the
Wall Street Journal. Outvoted, he pocketed the
cash and returned his focus to Europe.
Employing a business model similar to Stub-
Hub’s, Viagogo attracted a glitzy roster of in-
vestors including Steffi Graf, Andre Agassi and
LVMH’s billionaire founder, Bernard Arnault.
Lest he be forced out of yet another company,
Baker gave himself supervoting shares that guar- Archrival
anteed him total control. “I modeled it after Pu- Jeff Fluhr, StubHub’s
tin and the Politburo,” he quipped in 2012—years cofounder, cashed out
in 2007. He tried the
before self-imploding founders Adam Neumann startup thing again in
and Travis Kalanick made such terms unsavory. 2012 with Spreecast, a
social video platform,
Baker claims Viagogo grew faster than StubHub but it shut down four
years later.
did in its early years, and by 2011 the platform
was processing hundreds of millions of dollars in
transactions each year. By 2019 it processed bil-
lions, profitably. Forbes estimates its gross profit
margin stood at 25% last year, even as it compet-
ed in a crowded field against Ticketmaster, Vivid
Seats, Eventbrite, SeatGeek and, yes, StubHub—
whose margin was slightly lower.
But a litany of negative press accompanied
that ascent: Artists griped over inflated tick-
et prices; customers complained of hidden fees
and counterfeit listings. In 2018, Margot James,
JEFF CHIU/AP
then the U.K.’s Minister for Digital and the Cre-
ative Industries, declared on BBC Radio: “Don’t
choose Viagogo. They are the worst.”
J U N E / J U LY 2 0 2 0
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 “There’s always been controversy,” Baker told
Forbes in November. “You’ve got to educate peo-
ple when you’re disrupting things. . . . We need
to do a better job of that. And that’s what we’ve
been doing.”
B
ack in the U.S., eBay, StubHub’s
90 parent, was under pressure of its
own. For nearly a year, the com-
bative billionaire Paul Singer and
THE SAGA
his hedge fund, Elliott Manage-
ment, had been needling the firm to sell off non-
core assets, including StubHub. And Elliott rare-
ly loses a fight. Singer famously spent 15 years
warring with the government of Argentina over
bond payments, which resulted in a $2.4 billion
payout to his firm in 2016. In this case, for eBay,
that proved a huge stroke of luck.
For his part, Baker refused to worry, even
when the World Health Organization labeled
Covid-19 a global health emergency on January
30, two weeks before the deal closed. The shot at
redemption was just too enticing to pass up: He
had learned a hard lesson years earlier when he
decided not to drop out of Stanford and go all in
on StubHub, costing him equity and, eventual-
ly, his job. This time he wagered with conviction.
He went ahead with the deal, funding it with
debt as well as more money from his top two inves-
tors: the VC firm Bessemer Venture Partners and
Madrone Capital Partners, a private investment
firm affiliated with the Walton family, of Walmart.
(Neither would comment for this story.) As Baker
calmly noted on CNBC just after the acquisition,
“Right now, [the virus] has been isolated to Asia.”
Baker’s confidence now looks brash from the
vantage point of a world that changed overnight.
Cancellations came crashing down like a tsuna-
mi: Madonna, March Madness, Nascar, South
by Southwest, Broadway, Oktoberfest in Munich
and Wimbledon.
Customers demanded refunds en masse. In the
U.S., StubHub balked, except where legally prevent-
ed from doing so. Instead it began offering vouch-
ers worth 120% of the original purchase price—a
reversal of its usual refund policy. The problem: It
didn’t have the money. For years, StubHub operat-
ed on a “float” system. When it processed a transac-
tion, it immediately gave the seller its cut of a ticket
sale, even if the event was months away. Once the
coronavirus hit, clawing back payment from thou-
sands of sellers simultaneously was unlikely.
“There’s no possibility that they could refund
all the money without raising additional funds,”
says Eric Fuller, the live-events consultant. Cue
the social-media firestorm and, possibly, law-
suits. (In April, a Wisconsin man filed a class-
FORBES.COM
action suit against StubHub, seeking $5 million.
The company declined to comment.)
“A lot of these companies that live month to
month or on three-month horizons are going to
have issues surviving,” says Fred Rosen, who ran
Ticketmaster from 1982 to 1997. But, he adds,
“The minute live acts [start] again, there would
be StubHub 2. . . . The concept of the business
doesn’t go away. It’s a question of how long can
you survive when it’s raining?”
For now, Baker’s firms are still solvent. In March,
Moody’s reported they had over $400 million in
cash, enough for at least a few months, the agency
posited. There are also the deep pockets of Baker’s
investors, assuming they would risk throwing more
money at a company with an uncertain future.
Pro Roster
Viagogo gained
credibility thanks to
early investors such as
(from top) tennis pros
Steffi Graf and Andre
Agassi, and luxury-
goods titan Bernard
Arnault, whose
Groupe Arnault is
still an investor.
RINDOFF PETROFF/SUU/GETTY IMAGES; CHRISTOPHE MORIN/BLOOMBERG
The problem is that nobody knows what comes
next. StubHub and Viagogo will likely be some of
the last businesses to rebound. They rely not just
on live events—which will likely need a vaccine
before they can fully recover—but also on excess
demand for those events that forces buyers to the
secondary market. That could take years.
My, how quickly things have changed. “We
think we’re at the intersection of two very good
trends,” Baker said prior to the acquisition. “One
is what I call globalization, because the world is
a smaller place, and two is live events.” Then the
winds changed direction, and carried with them
Baker’s momentum. He closed the loop on his
story. Just not the way he wanted.
J U N E / J U LY 2 0 2 0
Rashmita and her two-year-old daughter,
Smruti, live in a poor, remote village in India.
For a long time, the little girl was listless
and Rashmita didn’t know why. But she got
her answer when Smruti was diagnosed with
severe acute malnutrition, and she found
help through ChildFund’s nutrition initiatives.
“Now,” says Rashmita, “she has such joy.”

Working in 24 countries, ChildFund connects

children living in poverty with the people and
resources they need to grow up safe, healthy,
educated and skilled.

CHILDFUND.ORG
 THE LIST NE XT BI L LI O N -D OL L A R STA RTU P S

MIRROR,
HAIR BY JALISE WRIGHT; MAKE-UP BY ALIANA LOPEZ

FORBES.COM
 Peloton isn’t
the only
home fitness
gadget 93
suddenly
prospering
in the
coronavirus
era. Former
ballerina

BRYNN
PUTNAM
has hit a
$300 million
gusher with
an interactive
workout
device that
you can hang
up anywhere
at home.

RORRIM ON YOUR WALL

BY A M Y F E L D M A N P H OTO G R A P H BY J A M E L T O P P I N F O R F O R B E S
 ON
94
N E X T B I L L I O N - D O L L A R S TA RT U P S
March 13, as New York prepared to move indoors
to slow the spread of the coronavirus, Mirror
founder Brynn Putnam closed the offices of her
high-tech fitness startup and sent her nearly 100
employees home. The former ballerina now hun-
kers down in her Greenwich Village apartment
with her husband, Lowell, also an entrepreneur.
The couple alternates who gets to be on Zoom
from the bedroom and who watches their 3-year-
old son, George, in the living room.
The only thing that’s easy: working out. Put-
nam brought home two of her fitness compa-
ny’s eponymous interactive Mirrors. One is in
the bedroom, the other in the guest bedroom. “If
[Lowell] wants to box and I want to do yoga, we
can,” says Putnam, 36.
With a market capitalization above $13 bil-
lion and a product and marketing campaign
that have become a meme, Peloton has emerged
as the buzziest fitness company of the corona-
virus era. But privately owned Mirror is hot on
its heels, with a single advantage Peloton can’t
match: compactness. At 22 inches wide, 52 inch-
es high and 1.4 inches deep, Putnam’s product
looks and acts like a regular mirror. Turn it on,
though, and users see an instructor teaching the
class (as well as their own reflection so they can
work on form); software provides personalized
modifications in the corner of the screen and
helps track fitness goals. Members pay $1,495 for
the Mirror and an additional $39 a month for ac-
cess to an array of livestreamed classes including
cardio, barre, strength training and yoga in 15-,
30- and 60-minute increments.
FORBES.COM
Upon Reflection “No one had thought about putting a screen
Brynn Putnam into a mirror and having it be a workout plat-
missed the form,” says Kevin Thau, general partner at Spark
moment to
expand her Capital, one of Putnam’s early investors. “It seems
boutique fitness obvious in hindsight, but it wasn’t before.”
studio beyond
three locations— Brick-and-mortar gyms and fitness studios are
a mistake she’s
determined not an almost $100 billion business, according to the
to repeat with International Health Racquet and Sportsclub
Mirror. “I had a
bit of a chip on Association. When Putnam launched the prod-
my shoulder from uct in September 2018, five years after Peloton
Refine,” she says.
first started connecting bikes, she was betting on
a gradual, continuing shift toward home fitness.
Now with millions of people stuck in their homes
and desperate for exercise, she’s riding high, with
sales surpassing her already aggressive projec-
tions—and a spot on our Next Billion-Dollar
Startups list, one of 25 private companies Forbes
bets will become unicorns. “We’re seeing Christ-
mas in April,” Putnam says, noting that Mirror’s
JAMEL TOPPIN FOR FORBES
tens of thousands of members are now working
out an average of 15 times a month, up from 10.
While Putnam and the company zealously
guard their numbers, Forbes estimates that rev-
enue reached $45 million in 2019 and will surge
past $100 million this year, which Putnam con-
J U N E / J U LY 2 0 2 0

firms. While the obvious focus is growth, Putnam
now says she expects Mirror to turn profitable by
early next year.
“It’s definitely one of the most exciting highfli-
ers in the portfolio,” says Ben Lerer, managing part-
ner of venture firm Lerer Hippeau, which had pre-
viously backed Warby Parker, Allbirds and Glossi-
er. “This can be a very big business, as big as Pelo-
ton, over a shorter period of time.” To date, Putnam
has raised $72 million from Lerer Hippeau, Spark
Capital and Point72 Ventures, the VC firm of hedge
fund billionaire Steve Cohen. Its last raise, in Oc-
tober, brought in $34 million and valued the com-
pany at just under $300 million. Putnam, the sole
founder, is worth at least $80 million—and after the
Covid-19 boost, probably much more. Her challenge
going forward: ensuring that Mirror becomes the
new normal, versus a fleeting pandemic trend.
ILLUSTRATIONS BY JAYA NICELY
B
rynn Jinnett Putnam grew up on
Manhattan’s Upper East Side, the
daughter of a lawyer and a stay-at-
home mom. At age 3, she started
dance lessons. “One of their earliest
stories of me was that they took me to a restaurant
J U N E / J U LY 2 0 2 0
NEXT BILLION-DOLLAR
STA RT U P S 2 02 0
FOR THE SIXTH YEAR in a row, Forbes has teamed up
with TrueBridge Capital Partners to search the country
for the 25 fastest-growing venture-backed startups
95
most likely to reach a $1 billion valuation. TrueBridge
asked 300 venture capital firms to nominate the
companies they thought were most likely to become
THE LIST
unicorns, while Forbes reached out directly to more
than 100 startups. Then came the deeper look, as
we analyzed finances for roughly 140 of them and
interviewed founders. This list represents the 25 we think
have the best shot of reaching the billion-dollar mark.
Edited by Amy Feldman
ACORNS
FOUNDERS:Jeff Cruttenden, Walter
Cruttenden; CEO: Noah Kerner
EQUITY RAISED: $257 mil
ESTIMATED 2019 REVENUE: $50 mil
LEAD INVESTORS: Bain Capital,
e.ventures, Greycroft,
NBCUniversal, PayPal, TPG Capital
For $1 a month, its app “rounds
up” each debit- or credit-card
purchase to the nearest dollar
and automatically invests it.
Acorns, which has 7.7 million users and $2.3 billion in assets under
management, also offers retirement and checking accounts for
$2 and $3 a month, respectively.
ALGOLIA
FOUNDERS: Nicolas Dessaigne, Julien Lemoine; CEO: Bernadette Nixon
EQUITY RAISED: $184 mil • ESTIMATED 2019 REVENUE: $50 mil
LEAD INVESTORS: Accel, Alven, SaaStr Fund, Salesforce Ventures
Looking for an online class on Coursera’s website, or checking
NPR for your favorite radio show? You might not know it, but
you’re using Algolia’s software. Those companies and the likes
of Twitch, Under Armour and Slack are among 9,000 businesses
that rely on Algolia to power the search boxes on their sites and,
in turn, increase online engagement and revenue. Visitors make
3 billion searches a day with the San Francisco–based firm’s help.
ANDELA
FOUNDERS: Iyinoluwa Aboyeji, Ian Carnevale, Nadayar Enegesi,
Jeremy Johnson (CEO), Brice Nkengsa, Christina Sass
EQUITY RAISED: $181 mil • ESTIMATED 2019 REVENUE: $50 mil
LEAD INVESTORS: Chan Zuckerberg Initiative, CRE Venture Capital,
Generation Investment Management, Spark Capital
From its headquarters in New York, Andela works to solve the
tech-worker shortage in the United States by identifying and
training software developers in Africa and then embedding them
into the remote engineering teams of companies like Microsoft,
Facebook and Google.
FORBES.COM

BENCHLING
FOUNDERS: Ashu Singhal,
Sajith Wickramasekara
(CEO)
EQUITY RAISED: $114 mil
ESTIMATED 2019 REVENUE:
96 $21 mil
LEAD INVESTORS: Alkeon,
Andreessen Horowitz,
N E X T B I L L I O N - D O L L A R S TA RT U P S
Benchmark, Menlo
Ventures, Thrive Capital,
Y Combinator
Wickramasekara was an undergrad at MIT when he came
up with the idea for a cloud-based CRISPR design tool
to help scientists. Eight years later, Regeneron, Gilead,
Genentech and hundreds of other companies use its
collaborative R&D software. As many customers rush
to come up with vaccines and treatments for Covid-19,
Benchling is on call as needed—but has also stopped
pushing software updates to those whose projects
require total lockdown.
CAPSULE
FOUNDER: Eric Kinariwala (CEO)
EQUITY RAISED: $270 mil • ESTIMATED 2019 REVENUE: $100 mil
LEAD INVESTORS: Glade Brook Capital, TCV, Thrive Capital
Customers in New York City who hate standing in
line at a pharmacy can place orders by text or app
to have prescriptions delivered for free within two
hours. During the coronavirus crisis, “[Capsule] went
from something that was a convenience to essential,”
Kinariwala says.
COALITION
FOUNDERS: John Hering, Joshua Motta (CEO)
EQUITY RAISED: $125 mil • ESTIMATED 2019 REVENUE: $27 mil
LEAD INVESTORS: Hillhouse Capital, Ribbit Capital, Valor
Equity Partners, Vy Capital
Cybersecurity insurance firm Coalition helps companies
recover up to $15 million in losses from ransomware
attacks, extortion, fraud and security breaches. It also
helps prevent those losses by scanning the internet to
detect vulnerabilities and alert users to potential threats.
Cofounder Motta was formerly with the CIA.
COCKROACH LABS
FOUNDERS: Ben Darnell, Spencer Kimball (CEO),
Peter Mattis
EQUITY RAISED: $195 mil • ESTIMATED 2019 REVENUE: $5 mil
LEAD INVESTORS: Altimeter, Benchmark, GV, Index
Ventures, Redpoint
Cockroach Labs provides a cloud-based relational
database and software to manage data anywhere
at scale. CEO Kimball says its databases are super-
resilient—like notoriously tough-to-kill cockroaches—and
shield its nearly 100 clients, including Bose, Comcast and
Netflix, from outages or system failures.
FORBES.COM
where someone was singing and playing live music
onstage,” she says. “I had found my way to the stage
and was dancing with the singer.”
At age 7, she joined the School of American Bal-
let, cofounded by George Balanchine. Her debut with
the New York City Ballet was noted in the New York
Times with a photograph of her and two friends. That
year, she played the Bunny in The Nutcracker.
Some dancers only dance; others have addition-
al interests. Putnam was in the latter category. “My
dad said to me, ‘It would be great if you could learn
some actual skills,’ ” she recalls. She studied Russian
literature and culture at Harvard.
After college, she went on the road with the Penn-
sylvania Ballet and Les Grands Ballets Canadiens de
Montréal. During the off months in New York, she
taught ballet and toning classes. Boutique fitness stu-
dios were booming, and it was an easy way to bring in
cash. When she retired from ballet a decade ago, she
sought to open her own boutique studio.
At the time, she had just $15,000 in person-
al savings, so she wandered the streets of Manhat-
tan searching for whatever strange off-market space
she could find. Walking past an Orthodox church
on the Upper East Side, she heard people speaking
Russian and struck up a conversation, in Russian,
with the minister and some parishioners. The chat
soon switched to English, and she learned they had
a space available. In 2010, Refine Method was born.
“The catch was that every Sunday we had to turn it
back into a church,” she says.
Another catch: There wasn’t enough space for
standard equipment. So she jerry-rigged a solution
with the help of her husband, who, aside from hav-
ing cofounded fintech startup Quovo (acquired by
Plaid), grew up sailing as a member of one of Bos-
ton’s blueblood families (his great-grandfather
founded Putnam Investments). The device they
built was a series of sailing pulleys and resistance
bands that could serve as a wall-mounted weight
machine, enabling each person to do strength train-
ing exercises with just two feet of space. “It looked
kind of like an S&M den,” she recalls.
Clients raved about Refine, and Putnam expand-
ed the studio into a mini-chain. By 2016, though,
newly pregnant and suffering from severe morning
sickness, working out in a club no longer appealed
to her. Peloton was booming, but Putnam didn’t
want a bike in her apartment. Nor did she like the
content and interactivity of the streaming apps she
tried. Her aha! moment came when she upgraded
Refine, adding more mirrors, and got rave reviews
from her clientele. “I realized a lot of the technol-
ogy I had been thinking about could be put in a mir-
ror,” she says.
Putnam built a crude prototype in her kitchen
with a cheap tablet from Amazon, a piece of glass
and a Raspberry Pi, a small, low-cost computer of-
J U N E / J U LY 2 0 2 0
 P E LOTO N vs . M I R RO R
EXPANSE
AS THE IN-HOME FITNESS BATTLE INTENSIFIES, FOUNDERS: Tim Junio (CEO), Matt Kraning, Shaun
UPSTART MIRROR IS BETTING ON ITS VERSATILITY, Maguire
LOWER PRICE AND SMALLER FOOTPRINT TO COMPETE EQUITY RAISED: $136 mil • ESTIMATED 2019 REVENUE: $30 mil
AGAINST INDUSTRY BEHEMOTH PELOTON.
LEAD INVESTORS: Founders Fund, IVP, New Enterprise
Associates, TPG Capital
97
Cofounders Junio and Kraning came up with the idea
for Expanse while serving as consultants to Darpa,
the Department of Defense’s research arm. Today the

THE LIST
San Francisco–based startup provides customers such
as CVS and PayPal with an overview of their internet-
connected assets including domains, IP addresses and
cloud infrastructure, enabling them to monitor online
vulnerabilities and cyberattacks.

PELOTON MIRROR FIVETRAN

Focus Connected bikes and Interactive mirrors FOUNDERS: Taylor Brown, George Fraser (CEO)
treadmills EQUITY RAISED: $60 mil • ESTIMATED 2019 REVENUE: $15 mil

CEO John Foley, Brynn Putnam, LEAD INVESTORS: Andreessen Horowitz, CEAS, Matrix
competitive former ballerina Partners, Y Combinator
cyclist and the and owner of a Fivetran, whose name is a play on IBM’s 1950s coding
former president of boutique fitness system, Fortran, centralizes an organization’s data from
Barnesandnoble.com studio in New York siloed sources using prebuilt connectors. So far the
company has constructed more than 130 automated
Year Product 2013 2018 connectors to data sources such as Salesforce, Oracle
Launched and Dropbox. Customers include Square, DocuSign
and ClassPass.
Valuation $13.7 billion $300 million

Revenue $1.2 billion $45 million GONG

Cost $2,245 for the bike $1,495 for the Mirror, FOUNDERS: Amit Bendov (CEO), Eilon Reshef
or $4,295 for the plus $39/month EQUITY RAISED: $133 mil • ESTIMATED 2019 REVENUE: $30 mil
treadmill, plus $39/ subscription
month subscription LEAD INVESTORS: Battery Ventures, Norwest Venture
Partners, Sequoia
Footprint 4 feet by 2 feet (bike) 22 inches by Its software automatically ingests and scans a user’s
1.4 inches communications with customers—emails, phone calls
or video chats—to detect who is ready to pitch for an
Viral Moment Peloton’s 2019 Alicia Keys’ upgrade or at risk of closing their account. “It’s like
holiday ad gets Instagram post having Google versus a human-curated directory,”
viciously mocked and about getting a says CEO Bendov.
turns into a meme Mirror for the 2018
holidays draws
635,000 views HOMEBOUND
Sources: Peloton, Mirror, Forbes research FOUNDERS: Jack Abraham,
Note: Revenue for 2019 calendar year. Peloton’s market cap as of May 15, 2020; Nikki Pechet (CEO)
Mirror’s valuation as of latest funding round, in October 2019.
EQUITY RAISED: $53 mil
ESTIMATED 2019 REVENUE:
$10 mil
ten used by do-it-yourself hobbyists.
LEAD INVESTORS: Atomic,
By the time she had a prototype viable enough to Fifth Wall
raise funding, she was seven months pregnant, and
After devastating
as she sought guidance from entrepreneurs and in- wildfires ripped through
vestors, many told her to hold off. “I met with a lot California’s wine country
of other founders who said, ‘It’s great you’re doing (where Abraham and
Pechet have homes) in
this, but I think you’re going to meet resistance. 2017, the cofounders started Homebound in nearby
They don’t like backing solo founders, they don’t Santa Rosa to help other homeowners rebuild—managing
like backing solo female founders and they certainly each step from building permits and insurance claims to
don’t like backing solo female founders who are sev- design and construction.

J U N E / J U LY 2 0 2 0 FORBES.COM

IRONCLAD
FOUNDERS: Jason Boehmig (CEO), Cai GoGwilt
EQUITY RAISED: $84 mil • ESTIMATED 2019 REVENUE: $10 mil
LEAD INVESTORS: Accel, Sequoia, Y Combinator
Customers including Mastercard, Staples and Reddit
98 work with Ironclad’s team of legal engineers to customize
software and automate contracts to make them easier
to process, edit, share and reference. Chief technical
officer GoGwilt is an ex-Palantir engineer; CEO Boehmig
N E X T B I L L I O N - D O L L A R S TA RT U P S
en months pregnant,’ ” Putnam says.
But she didn’t want to wait. She had seen boutique
fitness chains like SoulCycle and Barry’s Bootcamp
turn into behemoths, while Refine, which she still
owns, was stuck at three outlets.
She ultimately closed her seed funding with Le-
rer Hippeau from the hospital on November 15,
2016, the day her son was born. “Don’t mess with
Brynn,” says Lerer, who agreed to invest after seeing
her janky prototype. “She is extraordinary at getting
people to believe in her vision and follow her.”

is a former investment banker and corporate lawyer. Putnam and a small team figured out the fitness
regimens from her kitchen table. Then came the en-

LYRA HEALTH gineers, whom Putnam parked at a WeWork. “There

was always stuff everywhere, attachments and mir-
FOUNDERS:Dena Bravata, rors and different prototypes and ideas,” says Abby
David Ebersman (CEO),
Bales, a personal trainer who now serves as Mirror’s
Bob Kocher, Bryan Roberts
EQUITY RAISED: $176 mil
ESTIMATED 2019 REVENUE:
$50 mil
LEAD INVESTORS: Glynn
Capital, Greylock
Partners, IVP, Meritech
Capital, Tenaya Capital,
Venrock
Lyra Health partners with
companies such as eBay, Pinterest and Starbucks to offer
mental-health benefits to their employees. More than
1 million workers have access to Lyra’s 3,000 therapists,
coaches and physicians. Even before Covid-19, about
50 million Americans suffered mental-health issues each
year. Now the coronavirus pandemic further stresses
Americans and puts a spotlight on mental health. Lyra
expects revenue to double this year, to $100 million.
CEO Ebersman left his job as Facebook’s chief financial
officer in 2014 to tackle the problem.

MIRROR
FOUNDER: Brynn Putnam (CEO)
EQUITY RAISED: $72 mil • ESTIMATED 2019 REVENUE: $45 mil
LEAD INVESTORS: Lerer Hippeau, Point72 Ventures,
Spark Capital
Its $1,495 tech-enabled mirrors serve as home gyms;
customers then pay another $39 a month for unlimited
exercise classes in everything from cardio and strength
to yoga. (See story, page 92.)

MOVEWORKS
FOUNDERS: Jiang Chen, Vaibhav Nivargi, Bhavin Shah
(CEO), Varun Singh
EQUITY RAISED: $105 mil • ESTIMATED 2019 REVENUE: $10 mil
LEAD INVESTORS: Bain Capital, Iconiq Capital, Kleiner
Perkins, Lightspeed
With the help of AI, the company automates IT support
using natural language processing so that tasks such as
unlocking accounts or adding colleagues to email groups
can be resolved technologically rather than with the help
of an actual IT person. Customers include Broadcom and
LinkedIn.

FORBES.COM J U N E / J U LY 2 0 2 0
scientific advisor. Product testing? Early on, Put-
nam dragged a Mirror prototype to the Refine stu-
dio to see what loyal customers would think. “It was RIPPLING
very large, like huge, with a lot of metal, and it was FOUNDERS: Parker
not the easiest thing to move around,” says Kailee Conrad (CEO),
Combs, who was then an instructor and director of Prasanna Sankar
programming at Refine and is now Mirror’s VP of EQUITY RAISED: $100 mil
fitness content. “My fiancé was driving the U-Haul, ESTIMATED 2019 REVENUE:
and I was in the back of the van with Brynn, and we $10 mil 99
were literally holding this hunk of a mirror that was LEAD INVESTORS: Initialized
wrapped in an old blanket.” Capital, Kleiner Perkins,

Putnam says her lack of technical expertise was
an advantage because it enabled her to focus on the
few things customers cared about rather than trying
to build a perfect product. For her, what mattered
was that the Mirror be an inch deep or less, look
frameless and have the right balance between trans-
THE LIST
Y Combinator
Four years after Zenefits’ controversial founder Parker
Conrad resigned under pressure, he’s back with
Rippling. The startup’s software manages employee
payroll, benefits, hardware and applications all in one
place, making sure that onboarding of employees goes
smoothly and saving small and medium-sized businesses
time on administrative work.

Pandemic
Workouts
SHIPWELL
FOUNDERS: Gregory Price (CEO), Jason Traff
Mirror’s eight
instructors, EQUITY RAISED: $47 mil • ESTIMATED 2019 REVENUE: $30 mil
dressed in bright
colors (never LEAD INVESTORS: Fifth Wall, First Round Capital,
black, because Georgian Partners
they’re filmed
against a black Helped by AI and machine learning, Austin, Texas–based
backdrop), teach Shipwell offers freight tracking and analytics to help
50 types of classes improve efficiency and save customers like Premier
that thousands
stuck inside can Packaging and Crystal Geyser millions in shipping costs.
stream whenever “With the global pandemic, companies realize the
they want. supply chain is no longer back-office,” says cofounder
Traff. “It is mission critical.”

SIGNAL SCIENCES
FOUNDERS: Nick Galbreath, Zane Lackey, Andrew
Peterson (CEO)
EQUITY RAISED: $62 mil • ESTIMATED 2019 REVENUE: $30 mil
LEAD INVESTORS: Charles River Ventures, Harrison Metal,
Index Ventures, Lead Edge Capital, OATV
Signal Sciences protects companies’ web apps from
cyberattacks. Demand for the Los Angeles company’s
product is booming as work that used to happen on
intranets now happens over the open web as employees
work from home. The three founders met as developers
at Etsy, where they designed cybersecurity for the site’s
e-commerce operations.

SMARTRENT
FOUNDER: Lucas Haldeman (CEO)
EQUITY RAISED: $102 mil • ESTIMATED 2019 REVENUE: $35 mil
LEAD INVESTORS: Bain Capital, RET Ventures, Spark
Capital
SmartRent brings smart-home technology, such as
smart locks and thermostats, to multifamily properties.
The Scottsdale, Arizona, startup charges up to $1,000
for installation and hardware, plus $5 to $10 a month.
The smart locks let potential tenants take private, self-
guided tours of vacant apartments, a service expected
to be particularly important during the pandemic.

J U N E / J U LY 2 0 2 0 FORBES.COM
 mission and reflection. “The member doesn’t care
what the back of the mirror looks like because it’s
SOLUGEN hanging on the wall, and the member doesn’t care if
FOUNDERS: Gaurab
it weighs 50 pounds versus 60 pounds,” she says. “I
Chakrabarti (CEO), was ruthless, and we were able to make good deci-
Sean Hunt sions on time, cost and quality.”
EQUITY RAISED: $80 mil After two years of design work, Putnam launched
ESTIMATED 2019 REVENUE:
the product, now made in Mexico, in September
100 $12 mil 2018. Though that was six months later than she
LEAD INVESTORS: Founders
hoped, it went off without any major flaws, a big win
Fund, Y Combinator for a complex piece of electronic equipment.
N E X T B I L L I O N - D O L L A R S TA RT U P S

Solugen developed strains

Three months later, she was at her in-laws’ house
of gene-edited bacteria for Christmas, hoping sales would be strong. “I
with enzymes that can heard my cousin scream from the other room—Ali-
turn corn sugar into chemicals usually made by breaking cia Keys had posted on Instagram her family gift-
down oil. The Houston outfit can then biologically
produce ingredients for hand sanitizer and clean up ing her a Mirror,” Putnam recalls. In the video, Keys’
wastewater. Next up, CEO Chakrabarti hopes to develop children lead her to a closed door and tell her not to
sustainable fertilizers for farmers. yell out, but as soon as she sees the Mirror mount-
ed to the wall, she begins to shriek and dance with
SUPERHUMAN excitement.
Soon, Mirror was attracting other celebrity cli-
FOUNDERS: Conrad Irwin, Vivek Sodera, Rahul Vohra (CEO) ents, and Putnam was promoting their names as a
EQUITY RAISED: $51 mil • ESTIMATED 2019 REVENUE: $20 mil seal of approval: Reese Witherspoon, Ellen DeGen-
LEAD INVESTORS: Andreessen Horowitz, First Round eres, Gwyneth Paltrow and Kate Hudson, among
others. “It was this funny network effect that started
Superhuman, which charges Gmail and iPhone users
$30 per month, claims to help users get through emails to happen,” she says. “In the early days, orders would
twice as fast in pursuit of “inbox zero”: an inbox clear come in and your jaw would drop because there
of messages requiring a response. Its founders sold were so many celebrities.”
their previous startup, plug-in Rapportive, to LinkedIn
in 2012. The mix of fitness, glitz and technology turned
out to be the perfect combination for Putnam, who
signed on influencers and put up billboards, rather
TALLY than first building a following with targeted Face-
FOUNDERS: Jason Brown book and Instagram ads, as most direct-to-consum-
(CEO), Jasper Platz er startups do. “We knew from the early days we
EQUITY RAISED: $92 mil were launching not just a new product, but a new
category,” she says. “I knew we had to have a launch
ESTIMATED 2019 REVENUE:
$20 mil where the brand seemed bigger than it was.”
LEAD INVESTORS:

Andreessen Horowitz,
Cowboy Ventures, Kleiner
Perkins, Shasta Ventures
Tally helps people pay
off credit-card debt
by extending lines of credit and using an algorithm to
prioritize bill payments based on interest rates. The
company currently manages $500 million of debt, a
number likely to grow as consumer debt mounts.
TRAY.IO
FOUNDERS: Dominic Lewis, Alistair Russell,
Richard Waldron (CEO)
EQUITY RAISED: $109 mil • ESTIMATED 2019 REVENUE: $15 mil
LEAD INVESTORS: GGV Capital, Meritech Capital, Mosaic
Ventures, Spark Capital, True Ventures
Its workflow-automation tools help businesses with such
tasks as generating marketing leads and processing
payments. Founded by British expats in 2012, the startup
bootstrapped for years. Now customers such as Zendesk
and GitHub pay $595 and up a month.
P
eople have posited that fitness was
destined to move to the home since
Jane Fonda released her first work-
out tapes in 1982, and the cycles of
home versus gym have ebbed and
flowed since then. The difference this time? Tech-
nological advances that offer a more personalized
experience and a way to track your own results.
“This is here to stay. It’s not a fad,” says Jed Katz,
managing director at Javelin Venture Partners,
who personally invested in Peloton but is not in-
vested in Mirror. “It’s addicting, it’s convenient and
the content has gotten so good.”
For Joe Popson, a 32-year-old IT support manag-
er in New York, that’s been the case. Although he pre-
viously struggled to go to the gym, since he bought
a Mirror last May he’s been working out five times a
week, generally starting his day with 15 minutes of
dance cardio, and has lost 20 pounds. With Mirror, he
says, he loves that he can see both the instructor and

FORBES.COM J U N E / J U LY 2 0 2 0
himself as he works out, and that afterward he can in-
teract with the instructor on Instagram. “They’ll send
you a fire emoji or a ‘100’ emoji or put you in their sto-
ry,” he says. “It goes back to making you feel incredi-
bly connected, especially at a time like this.”
Putnam incentivized her talent, making eight
founding trainers full-time staffers with stock op-
tions. They’re encouraged to focus on teaching the
class and delivering an entertaining experience,
as software handles the music and any necessary
modifications based on customer input.
Then came the coronavirus and social-distancing
“WE’RE SEEING CHRISTMAS IN
APRIL,” SAYS BRYNN PUTNAM,
NOTING THAT MIRROR’S TENS OF
THOUSANDS OF MEMBERS ARE
NOW WORKING OUT AN AVERAGE
OF 15 TIMES A MONTH, UP FROM 10.
mandates, which Alex Alimanestianu, former CEO
of Town Sports International (parent of New York
Sports Clubs) and an advisor to Mirror, terms “an ex-
istential threat to a lot of gyms.” In May, Gold’s Gym,
with 700 locations worldwide and minimal digi-
tal strategy, filed for Chapter 11 bankruptcy. There
have been reports that Town Sports or 24 Hour Fit-
ness could well be next. Publicly traded Town Sports
is now worth just $12 million and has nearly $200
million in debt coming due in November. It issued
a “going concern” warning in a regulatory filing this
spring but did not respond to requests for further
comment. 24 Hour Fitness said in a statement that
it is “considering a broad range of options.”
Unfortunately for Putnam, others have also done
the math. Beyond Peloton, there’s now Tonal, which
offers a smart home gym powered by 3D modeling
and artificial intelligence; Hydrow, which sells smart
rowing machines; and FightCamp, which sells inter-
active home boxing and kickboxing classes. Mean-
while, the big gyms are turning to digital home fitness
to help salvage their businesses. This spring, Equi-
nox, the gym chain with nearly 100 clubs across the
U.S., launched Variis, a streaming platform that of-
fers free digital classes to its members and also pairs
its SoulCycle workouts with an at-home bike (priced
at $2,500). There’s even a competing interactive mir-
ror from startup Echelon, which it calls Reflect.
Putnam’s plan to stay ahead: Position Mirror
as a third screen for the home. “I think of a Mir-
J U N E / J U LY 2 0 2 0
TRUSTED
HEALTH
FOUNDERS: Matt Pierce,
Lennie Sliwinski (CEO)
EQUITY RAISED: $25 mil
ESTIMATED 2019 REVENUE: 101
$28 mil
LEAD INVESTORS: Craft
THE LIST
Ventures, Felicis Ventures,
Founder Collective
Trusted Health helps
match nurses with hospitals that need them, a booming
business right now. The cofounders met at Hired, where
they learned about marketplaces and adapted that
knowledge to nursing, spurred by the experience of
Sliwinski’s mother, a nurse.
WEAVE
FOUNDERS:Clint Berry, Brandon Rodman (CEO),
Jared Rodman
EQUITY RAISED: $152 mil • ESTIMATED 2019 REVENUE: $50 mil
LEAD INVESTORS: A.Capital Ventures, Catalyst Investors,
Crosslink Capital, Lead Edge Capital, Tiger Global
Management
The Lehi, Utah, company’s software enables dentists,
optometrists and other professionals to better
communicate with their customers. For $595 a month,
Weave’s customers can text, email or call patients to
schedule appointments or handle billing.
Additional reporting by Elisabeth Brier, Alex Knapp,
Alex Konrad, Christian Kreznar, Samantha Sharf,
Glenda Toma and Alexandra Wilson
ror as the next iPhone,” she says, without iro-
ny. She has already added meditation classes
in partnership with Lululemon, the yoga cloth-
ing brand, and launched personal training ses-
sions at $40 a pop, which are now happening
remotely from trainers’ homes. Next up: phys-
ical therapy and rehabilitation sessions, though
it’s not clear if insurance companies would cover
them. Long-term, she thinks Mirror could ulti-
mately be used for telehealth, therapy and a host
of other interactive applications, conjuring an-
swers with the ease of Snow White’s Evil Queen.
In fact, Putnam has been getting calls non-
stop from people who want to talk about part-
nering to use the screen for chat, scrapbooking,
education and a million other things. It’s a bit
overwhelming. “In a business that is growing
so fast and that has so much potential, how do
you stay disciplined about saying no?” she says.
“That has been the hardest but most important
lesson of the past 18 months.”
FORBES.COM
 HI
T H E P H O T O E S S AY

Powered Down

Empty Tesla charging stations on the

29th Street Mall in Boulder, Colorado,
April 9. “And we have a lot of Teslas in Boulder,”
photographer Jamie Kripke says.
102
JAMIE KRIPKE

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BERNATION
NATION
As America lurches toward reopening
from the coronavirus pandemic, Forbes
sent some of our best photographers
to chronicle what the world’s strongest
economy looks like when it’s fast asleep.
We’ve never seen anything like this—and
we hope we’ll never see it again.
BY C A R O L I N E H O WA R D P H OTO D I R E C T I O N BY R O BY N S E L M A N

J U N E / J U LY 2 0 2 0 FORBES.COM
 BOULDER, COLORADO

104

Lovin’ It

Business is great at a
McDonald’s drive-through
in Boulder, however.

“It was hard to see huge businesses like Target and McDonald’s appear to be
thriving while small mom-and-pop shops are clearly struggling or failing.
The contrast was striking. I found myself thinking about how spending
money and consumerism are such a big part of our lives, and hitting the
pause button makes that more apparent. We’re all thinking more about
what you need versus what you thought you needed, or just wanted. I hope
we come out the other end with a different perspective.”
—J A M I E K R I P K E

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 Road to Nowhere

Boulder’s East Pearl

Street, usually a packed
thoroughfare

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N E W YO R K

“I was here for 9/11, but that was completely different. There was still
life in other parts of the city. Now there’s no activity anywhere. Nothing.
I never felt so isolated before. I was all alone. Walking in the Financial
District, it was like the Everest of business was frozen. I know I’ll never see
anything like this again. I had no business being down there.”
—J A M E L T O P P I N

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107

T H E P H O TO E S S AY

No Transportation, No Trade Easy Riders

(Left) A look down Fulton Street in (From top) A lone cyclist rolls
lower Manhattan past the Oculus through Manhattan’s Financial
transit station to the World Trade District; the normally bustling Wall
Center, April 7 Street subway station

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 BOSTON
Traffic Jammed

Unsold and unneeded vehicles crowd the lot at Kelly Nissan in

the Boston suburb of Lynnfield, Massachusetts, April 8.
Photograph by Michael Prince

108
T H E P H OTO E S S AY

DETROIT

The Only Game in Town

Two girls play catch in the empty

parking lot outside Comerica Park,
home of the Detroit Tigers, April 8.
Photograph by Ryan Garza

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Pick Your Spot

Not hard to find a place to park outside Macy’s in Peabody,

Massachusetts, March 31
Photograph by Michael Prince

S A LT L A K E C I T Y

Come Fly With Me

Terminal 2 at Salt Lake City

International Airport, April 8.
Photograph by Tim Pannell

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110
T H E P H OTO E S S AY

Sorry, We’re Closed Skeleton Crew

(From top) A shuttered Walgreens (Right) A promotional Corona beer

on Drumm Street in San Francisco, sign reflected on the window of a bar
April 8; a parking lot at the Palo across from Oracle Park, where the San
Alto offices of Google the same day Francisco Giants play, April 8

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 S A N F R A N C I S C O / P A L O A LT O

“I went to the places where I typically would be doing shoots of startups and
big tech companies like Google. I wanted to walk those streets again and
see what it feels like now. It was a much more grim experience than
I thought it would be. There was a feeling that I shouldn’t be out here.
I’m used to being in San Francisco and finding a spot to duck in to check
email, grab a cup of coffee. Nothing was open, so there was no place to take
a break or collect your thoughts. Palo Alto had a different uneasiness.”
—T I M O T H Y A R C H I B A L D

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112
“I am a brain, Watson. The
rest of me is mere appendix.”
—Sir Arthur Conan Doyle
“The world is in perpetual
motion, and we must invent
the things of tomorrow. . . .
Act with audacity.”
—Madame Clicquot
“I just invent, then wait
until man comes around to
needing what I’ve invented.”
—Buckminster Fuller
“Even if the situation or
challenge is very complex,
usually the simplest solution
is the one to go with.”
—Roxanne Quimby
“They were a strange and
mercantile people, these
Americans. One never
knew what they might
come up with next.”
—Lauren Willig
“Fear is an excellent
motivator. I find that it
really brings out the true
ingenuity of a creature.”
—M.D. Elster
“It will be found, in fact,
that the ingenious are
always fanciful, and the
truly imaginative never
otherwise than analytic.”
—Edgar Allan Poe
“The more I pushed myself to
get over my fears, I realized
that my imagination was the
thing that stopped me.”
—Amy Vitale
“ Facts aren’t everything; at
least half the battle consists in
how one makes use of them.”
—Fyodor Dostoevsky
“ Whenever I found out
anything remarkable, I put
down my discovery on paper,
so that all ingenious people
might be informed thereof.”
—Antonie van Leeuwenhoek
FORBES.COM
THOUGHTS ON
Ingenuity
“They tried to be too
clever, and that was their
undoing.”
—Agatha Christie
“Only a mind free of
impediment is capable of
grasping the chaotic beauty
of the world. This is our
greatest asset.”
—Oliver Bowden
“ You might be poor, your
shoes might be broken, but
your mind is a palace.”
—Frank McCourt
“Falsity cannot keep an idea
from being beautiful. There
are certain errors of such
ingenuity that one could
regret their not ranking
among the achievements
of the human mind.”
—Jean Rostand
“Be alert and of sober
mind. Your enemy the
devil prowls around like
a roaring lion, looking for
someone to devour.”
—1 Peter 5:8
Creative Creation
November 10, 2008
“Shell-shocked businesses and consumers won’t recover
rapidly from the trauma of recent months, especially as
we now cope with recession,” Steve Forbes wrote the last
time the world was falling apart. How to shore things up?
He made a number of practical suggestions, such as
thawing out credit markets and keeping the dollar strong.
The futurist George Gilder sounded a more philosophical
note: “The real source of all growth is human
ingenuity and entrepreneurship, which often thrive in
the worst of times.” Gilder was right. Those two pillars of FINAL THOUGHT
capitalism provided the foundation for the bull market “Ponder the genius exhibited
that would soon begin and run longer than any in history. in discovering substitutes
for scarce war materials. . . .
The research laboratories
of private enterprise have
SOURCES: THE GARDEN INTRIGUE, BY LAUREN WILLIG; THE CASE BOOK OF SHERLOCK
HOLMES, BY ARTHUR CONAN DOYLE; FOUR KINGS, BY M.D. ELSTER; CRIME AND
wrought miracles.”
PUNISHMENT, BY FYODOR DOSTOEVSKY; THE MYSTERIOUS AFFAIR AT STYLES, —B.C. Forbes
BY AGATHA CHRISTIE; ASSASSIN’S CREED, BY OLIVER BOWDEN; ANGELA’S ASHES,
BY FRANK MCCOURT; THE MURDERS IN THE RUE MORGUE, BY EDGAR ALLAN POE.
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You Can
Help
Turn Things
Around

You might think ending extinction

means going to the ends of the Earth.
But sometimes, saving the world is as
easy as showing up. Your support is
vital to the San Diego Zoo’s mission of
protecting animals all over the world.
Join us in making a difference—together,
we can be heroes for wildlife.
ENDextinction.org

San Diego Zoo Global is involved in

conservation projects in more than 70
countries, including for gelada monkeys,
African penguins, and lemurs, species
you can see in the San Diego Zoo’s
Conrad Prebys Africa Rocks.

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