WHEN: Today, Wednesday, August 12, 2020
Following is the unofficial transcript of a CNBC interview with Facebook COO Sheryl Sandberg from CNBC’s Small Business Playbook: The Path Forward virtual event on Wednesday, August 12th.
Mandatory credit: CNBC’s Small Business Playbook: The Path Forward event.
Realtime Transcription by www.RealtimeTranscription.com
JIM CRAMER: Mr. Wonderful as wonderful as ever. If you’ve been watching this whole program, you’re getting some great advice. But now we’ve got someone who I think offers more to small business than anyone in this country right now. I’m talking about Sheryl Sandberg. She’s the Facebook COO. I want to thank you so much for joining us for CNBC’s Small Business Playbook event. Sheryl, how you been?
SHERYL SANDBERG: Thank you, Jim. I am really glad to be here. And I think we all need to be focused on small business in these times of economic challenge for everyone. I’m grateful to you for your continued focus on this.
JIM CRAMER: Look, you guys are the ones who are doing it. Now, I want to start by getting people to know the real Facebook. You have done a remarkable job with small business, and what I want to know is, how many small businesses are you helping, not just in the United States, but around the world, and what you do for them?
SHERYL SANDBERG: So, there are 180 million small businesses around the world who use our free tools, and we have 9 million advertisers. And so, look, before Coronavirus, a third of small businesses even in the U.S. didn’t even have a web presence at all, and that’s because it’s expensive and hard to set up a web presence or a mobile website or a mobile app. So what do we do? We put them online for free. With no money and just minutes, you can set up a presence on Facebook or Instagram, and you can migrate online. And that was pretty important because the digital transformation was happening before Coronavirus. But now, in a world where people aren’t even leaving their homes as much, it’s become much more important, and that’s why we see so many more small businesses using all the free tools we put out there.
JIM CRAMER: Sheryl, yours is truly a grassroots effort, which is something I love because you know I love small business. And I think a lot of people have affinity groups. Can you help them figure out how they can actually make a little bit of money off the affinity groups so they can keep growing and growing? Because I know you like small business, but you like medium business that started as small business from Facebook.
SHERYL SANDBERG: That’s right. Our goal is for any small business to grow into a medium business and even a large business. And you’re right, so much of this starts with someone’s personal interest. I know you love great stories, and I’ll share one. There is an organization called — business called The Tiny Tassel out of Charleston, South Carolina. It’s a woman named Mimi. She was making jewelry as, you know, a creative outlet, total hobby. Her mother was making handmade clothing. They started selling it. Now, at first they opened a little store and they were selling in person. Then, Coronavirus hit. So they came to Facebook. They joined Facebook Shops, and now they’re continuing to sell and grow their business online. And that’s what we see, is people taking their passion and their ingenuity and their entrepreneurship and creating businesses for themselves, which are so critically important in this time of mass unemployment.
JIM CRAMER: I want to dig down into that Charleston, South Carolina story. There are many single women in this country, some have had setbacks, some are trying to strive, make it in a very tough time. I bet a high percentage of the businesses that get started on Facebook are from the single women, who are very much unrepresented in this country and often are given a very bad deal because of divorce or because this society has, as you would know better than anyone, a glass ceiling, whether we like it or not.
SHERYL SANDBERG: No, that’s right. You see amazing entrepreneurship from women and women of color. It’s worth noting that today is Black Women’s Equal Pay Day, which means that a white man and Black woman both start working on January 1, 2019, and to earn what that man earned by the end of the year in 2019, a Black woman has to work until today. My foundation is putting out a report tomorrow on the state of Black women in corporate America, and it shows what this data shows, is that Black women are systematically overlooked and not given the mentorship and sponsorship and opportunities, and we need to fix that. I think one of the reasons you love small business and I love small business is there’s no corporate hierarchy in a business you start. You are in charge, you can make those decisions. And at Facebook, our goal is to give you the tools you need to make it as affordable and easy as possible.
JIM CRAMER: Well, you know I challenge you and your CEO, Mark Zuckerberg, to do more for minorities – I didn’t really have to challenge, because it was in your DNA. But if you can talk, you mentioned your foundation. But the company specifically earmarked a lot of money for minorities, and it’s not talked about. Talk about it.
SHERYL SANDBERG: No, that’s right. We did our first grant program after Coronavirus, we did 100 million for small businesses globally, 40 million went to the U.S. And then there was so much interest and so many applications from Black-owned businesses and minority-owned businesses that we did another 100 million in the U.S. for Black-owned businesses alone. And that’s going to small businesses, to nonprofits that serve the Black community, and to Black creators. And we really believe that there’s so much more to do to give people a shot to make sure that they continue to grow and serve these important communities.
JIM CRAMER: Can you talk about how your company helps small business and doesn’t compete with them? No need to mention who does, but I think it’s a different ethos and, again, not talked about.
SHERYL SANDBERG: Yeah. I mean, look, our business is small business. We put free tools out there, and we sell advertising. That is our business. And the great, great, great majority of the people who use those tools are small businesses, 180 million, as I said, around the world. And we should think a little bit about the role of personalized ads in this. So I’m going to share an example that I love. There is a bar called the Bru Florida Growler Bar in Odessa, Florida, and they sell growlers. And, you know, before Coronavirus, they were doing most of their sales in their bar. Well, they came to us very inexpensively. They were able to buy personalized ads. They wanted to show their ad only to adults age 25 to 64 who live within 5 miles of their bar. We’re the only place that does that at scale, and we did it. We do it in a very privacy protected way, we don’t give any information to the bar. We take the ad and show it. And now their business is thriving. They are selling three times more growlers now than they were before Coronavirus forced them to close. Big businesses can buy large advertising. They don’t need personalized ads. They can target the entire country, but small businesses can’t. So the services we offer and the cost effectiveness of those personalized ads is a life line for small businesses and one that I think we all want to keep our eye on as this economic recovery, hopefully, starts to come into play and we help small businesses grow.
JIM CRAMER: Well, I’m really glad you brought this up, because my friend Gary Vaynerchuk, who is also part of our program, Gary Vee, whom I knew because the one library that was down a block from me said without any prompting from me, did not even know where I was coming from in terms of my championing Facebook for individuals and for small business – he said: Look, the ROI – he had calculated the return on investment for an ad on Facebook, and he said it was outrageously cheap versus everyone else. Why is that?
SHERYL SANDBERG: Well, that’s because we can personalize. Because again, in a very privacy protected way, we take your ad, and in this case, you know, we show it only to the people who are adults, who are living within five miles of that bar. Or only to people who are dog lovers if you are a dog service that you are trying to advertise in a local area. So it is our ability to personalize that makes this so high ROI because for a lot of businesses, if they try to advertise, they are wasting money. You have to take out an ad in a local area and you are showing your ad to many people who don’t want to see it because they are not interested. Our ability to use data in a privacy protected way to personalize those ads is why small businesses can use us to grow. And I think it is really important for them, but also really important for job recovery. More than half of the growth in jobs in this country over the last many years has come not from big businesses, but from small. And that is why those personalized ads have been so important.
JIM CRAMER: All right. Well, let me put my stock hat on for a moment, because again, I do Mad Money every night. I think there are a lot of people who said, geez, there are some huge consumer package good companies that are boycotting Facebook. Facebook, therefore, must be ineffective, or Facebook must be in trouble. Why is it that people do not understand that the real joy, I think, of Facebook is finding the small businesses that are starting out that use Facebook, and if the consumer package goods guys want to go over for now, they want to leave for now, because they can’t stay out for long because you have too many people, that it really doesn’t impact your earnings per share.
SHERYL SANDBERG: Well, we just reported earnings, and that’s what you’re referring to and we did have a strong quarter. We care about all of our clients and all of our partners, and the large ones and the small ones are super important to us. We’re going to continue to work to make sure we provide great products. Those products should work across the spectrum of businesses, as we continue to grow our business, but more importantly, continue to grow the business of our clients out there; most of which are, as you say, small businesses.
JIM CRAMER: I get confused by the political narrative. For instance, the candidate running for the Democratic party, Joe Biden, and now his running mate, Kamala Harris, who I bet are both sensational people. But Joe Biden: breaking up Facebook deserves a really hard look. And we know that Miss Harris has often thought about that. Do you think they understand that small businesses create the jobs; we are in a – close to a depression in terms of the number of jobs lost and the last thing you want to do is take a company that has created a lot of small businesses and make it the target when there are so many others that are more deserving of that role.
SHERYL SANDBERG: Well, we know that there’s real concern about the size and the power of the American tech companies, both here in our own country and also around the world. And it’s our job to work with anyone who is in office, whether they’re in the Senate or anywhere around the world, to address those concerns. We do think the size of what we offer is part of why we can help so many small businesses grow. And we are a platform company, and we are a platform on which small businesses are powered, and we’re going to continue to focus on that and make massive investments. And it is helpful that we have the resources to make those investments to continue to grow small businesses around the world.
JIM CRAMER: Sheryl, you referenced Shops. I thought Shops is one of the most inspired ideas your company has ever had. The stock has gone up 70 points since it started. Can you describe what it means for the person who is watching this and says, you know what? I’ve got something to do. I know I don’t have a job right now, but I have this craft, I have this skill, I think I could have a shop. What do I do?
SHERYL SANDBERG: You go to Facebook.com/business. Everything you need is there, and there’s all of our tools which are available to help you get online, set up for free a mobile presence and start selling if you want to. What Shops do is they give you additional functionality. We provide it for free. We’re first rolling it out. But it lets you take your product catalog, the products you offer, upload it to Facebook or Instagram, personalize it and customize it so it has the look and feel that’s yours, and then hopefully do more with your customers. Jim, we get ideas from people like you who are champions of small businesses, we get ideas from the small businesses themselves. We’re going to keep investing and rolling out functionality. We are working on payment solutions, we are working on how to reach the right audience, we are working on making those advertisements cheaper and even easier for businesses to use. We’re also working on training. Jim, one of the things you said to me when I was on this show a couple of times ago, you said that we need to make training available because small businesses – it needed to be online, it needed to be accessible whenever they had a minute because they’re super busy and they can’t necessarily show up at any specific time. So with your encouragement, we launched our Summer of Support online training sessions. There are 30 classes. You can go online and take them whenever you want. 15 million people have watched them, giving them exact ideas on here’s how you market, here’s how you find the customers, here’s how you build a credible online presence. So we’re going to continue to roll out those free tools, and we’re grateful for your encouragement.
JIM CRAMER: My wife belongs to a site. She will get mad at me that I’m going to mention it, but it’s called What Would Virginia Woolf Do? And it started, I know, how fabulous is that, right? It’s for women of a certain age who don’t know what an affinity group is, and everyone loves it. And it would not exist without your company. It just couldn’t exist. And I think people don’t get that there are companies of some size that have brought great income to people who otherwise wouldn’t have it that would not exist without Facebook. And, yet, the narrative that I often read about Facebook is that you sold some data at some point, or that you don’t have 30,000 people trying to weed out things that shouldn’t be in there. And I’m always surprised that the individuals who are your ambassadors have not been able to speak up for Facebook, other than to me in a very private way. And you know I think that that’s – I’m trying to change that narrative, you know that.
SHERYL SANDBERG: Well, look, we appreciate it. And we have real issues to address. We’ve worked hard to address them. I think one of the most important issues the country faces that we’re really importantly focused on is voting. Later this week, we’re going to launch our voting information center, because we want to make sure people get accurate information on how to register and where to vote. That was important in any election, but with the Coronavirus concerns about polls closing and how do I do this now in a more online world, that’s even more important. So we’re going to be launching that later this week. We also have a pretty ambitious effort, I think the most ambitious out there, which is a goal of registering 4 million people to vote in this election. We helped register 2 million the last two cycles. But we take our responsibilities and our civic responsibilities very seriously. And we hope when it launches, people will check out the voter information center.
JIM CRAMER: For a moment I just – look, you know I care about our country and small business. But there are remarkable things that you’ve done overseas. Anyone who looks at the financials, it’s pretty clear that your organization is doing this around the world. Again, I want to go back to something that you and I think are very important: minority businesses around the world and single women who have been unrepresented in the class – and so many single women make so much less – how do we close the gap?
SHERYL SANDBERG: So one way of closing the gap is entrepreneurship. Businesses can be started by women. Those businesses do incredibly well. We see that often businesses by women are more active on Facebook, and that makes sense. When you take down the traditional barriers that have long benefited men more than women, it makes sense that more women and people of color and women of color, so important always, but on Black Women’s Equal Pay Day, a good moment to note that, are able to use those tools because they’re broadly available to anyone. Online tools are something anyone can use. And I think you’re right that these tools are even more important for people who have a harder time in the traditional power structure of business.
JIM CRAMER: Now let’s go back to that great example that you mentioned. How did that person and that bar know to do this and, yet, so many others just haven’t figured it out?
SHERYL SANDBERG: Well, that’s why we launched the training that you encouraged us to launch. So, we do have 15 million people who have done it. But, look, I think necessity is the mother of invention – not my quote, someone else’s – and a lot of businesses that had to migrate online. I’ll give you another example. Out of Nashville, Tennessee there is a company run by a couple called 80/20 Fitness. They call themselves that because they say it’s 80 percent nutrition and 20 percent exercise. Well, they are a small gym. They had to close, like so many others. But they used Facebook Live, and they migrated a lot of the services they were able to provide to clients by providing them online. Would they have done that before Coronavirus? I don’t know, probably not. But everyone always says, don’t waste a crisis. This is an opportunity for small businesses to build technology and to build user abilities that they needed anyway, because the digital transformation is happening. And I think we see a lot of small businesses taking advantage of this opportunity to learn how to sell online because they have to. But I think that those are skills that are really going to serve them well going forward, even once – hopefully soon – the world comes back to normal.
JIM CRAMER: One of my favorite other companies that does similar things to you, Constellation Brands, which is Modelo and Corona, has decided that the minority population is so underserved in this country, that if someone in the minority population has a great idea for a drink, they will help fund that company. Have you ever thought, perhaps, about funding or helping to fund some minority companies that otherwise might not be able to get started that could grow?
SHERYL SANDBERG: So we definitely talked about financial support for small business. The form it’s taken for us to date has been grants, with our original 100 million for Coronavirus and then our 100 million for Black businesses and nonprofits in the U.S. But we are really looking for ways to continue to invest in small businesses. I think the best thing we do is to invest – build tools, give them free tools that they can use to grow; invest in things like Facebook Shops, and I think that’s where we’re going to stay focused.
JIM CRAMER: All right. Now, we know that we are in a terrible pandemic, and it is small- and medium-sized businesses not doing well, versus, say, the big stocks that we follow. What advice do you have in general for our country about what to do about small- and medium-sized business? You know we’ve got a jam up in Washington. Which side you’re on, I don’t care; you’re on the nation’s side. What can they do in Washington to help the very clients that we’re talking about?
SHERYL SANDBERG: Well, obviously, we need to provide the financial support that people and businesses need, and that’s something our government has to do. And you also asked what can we all do. Well, I think we can all support small businesses. Because, even though our shopping patterns may have changed, we’re still buying our food, we’re still buying the basic things we need. And I think making sure we support the local businesses around us, as consumers, is great. You can also spread the word. When you have a great experience with a product or a service, particularly if it’s one your friends don’t know about, that’s a great time to post. You can do that on Facebook and Instagram, or old-fashioned call them up. But help small businesses. We also did something else. We launched during this Donations for Small Businesses. We’ve had donations for a long time for nonprofits. People do birthday fundraisers for nonprofits they love. I never really thought we would launch Donations for Small Businesses, but we did, because people want to donate to the small businesses in their community. And gift certificates. We launched that, too. Gift certificates are a way you can pay now for a service you can get later when businesses open up. For those that have the ability, it’s a really nice way to support a business and say: I want to make sure you’re still there when these businesses can open up. There is a lot every single person can do.
JIM CRAMER: Well, Sheryl, as someone I know who is a small business supporter and also a small business person who is blessed to have another job, I think I’m going to go to Donations today, with my wife Lisa, and figure out who else we can help who are less fortunate. Sheryl Sandberg, Facebook COO, thank you so much for joining us. CNBC’s Small Business Playbook event. Great to see you.
SHERYL SANDBERG: Thank you for having me.
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