1 00:00:00,160 --> 00:00:02,960 Speaker 1: Masters in Business is brought to you by proper Cloth, 2 00:00:03,520 --> 00:00:08,080 Speaker 1: the leader in men's custom shirts, with proprietary, smart sized 3 00:00:08,119 --> 00:00:12,520 Speaker 1: technology and top rated customer service. Ordering a custom shirt 4 00:00:12,600 --> 00:00:16,319 Speaker 1: has never been easier. Visit proper cloth dot com to 5 00:00:16,520 --> 00:00:22,279 Speaker 1: order your first custom shirt today. This is Masters in 6 00:00:22,360 --> 00:00:27,400 Speaker 1: Business with Barry Ridholts on Bloomberg Radio. This week on 7 00:00:27,480 --> 00:00:30,520 Speaker 1: the podcast, we have a repeat visit from one of 8 00:00:30,560 --> 00:00:34,640 Speaker 1: our most popular guests. His name is Professor Scott Galloway. 9 00:00:34,760 --> 00:00:38,760 Speaker 1: He teaches digital brands and marketing at the n y 10 00:00:38,920 --> 00:00:43,040 Speaker 1: U Stern School of Business. I first kind of came 11 00:00:43,080 --> 00:00:47,200 Speaker 1: into contact with Professor Galloway h through a famous video 12 00:00:47,320 --> 00:00:53,760 Speaker 1: he did called the Four Horsemen of the Internet about Facebook, Amazon, Google, 13 00:00:54,240 --> 00:00:58,360 Speaker 1: and Apple. And he is one of those people who 14 00:00:58,560 --> 00:01:03,320 Speaker 1: is just a fast sating study, a person who does 15 00:01:03,400 --> 00:01:06,160 Speaker 1: deep dives into the things we kind of take for 16 00:01:06,240 --> 00:01:11,640 Speaker 1: granted about technology, about marketing, about how we interact with 17 00:01:11,720 --> 00:01:14,560 Speaker 1: some of our favorite products. And he does it in 18 00:01:14,600 --> 00:01:17,399 Speaker 1: a way that's not purely academic. He formed a number 19 00:01:17,440 --> 00:01:23,119 Speaker 1: of companies um L two red envelope profit and and 20 00:01:23,319 --> 00:01:26,520 Speaker 1: sold them for uh tons of money. And and so 21 00:01:26,600 --> 00:01:31,120 Speaker 1: he's more than just a theoretician. He's an actual practitioner. 22 00:01:31,760 --> 00:01:35,240 Speaker 1: He's always fascinating. We always have a delightful conversation every 23 00:01:35,240 --> 00:01:37,840 Speaker 1: time I I have him in the studio. UH. He 24 00:01:37,880 --> 00:01:39,880 Speaker 1: has a new book coming out next year, so we'll 25 00:01:39,880 --> 00:01:42,760 Speaker 1: have an excuse to bring him back when that UH 26 00:01:42,880 --> 00:01:46,319 Speaker 1: comes out. In the meantime, with no further ado, my 27 00:01:46,480 --> 00:01:53,280 Speaker 1: conversation with Scott Galloway. This is Masters in Business with 28 00:01:53,360 --> 00:01:58,800 Speaker 1: Barry Ridholtz on Bloomberg Radio. My special guest today is 29 00:01:58,880 --> 00:02:02,000 Speaker 1: Professor Scott Alloway. He hails to us from n y 30 00:02:02,080 --> 00:02:05,600 Speaker 1: U Stern School of Business. He is the author of 31 00:02:05,640 --> 00:02:09,600 Speaker 1: the Digital i Q Index, a global ranking of prestige 32 00:02:10,280 --> 00:02:13,840 Speaker 1: digital competence. He has been ranked one of the world's 33 00:02:13,840 --> 00:02:19,320 Speaker 1: fifty best business school professors. He founded several companies, red Envelope, 34 00:02:19,680 --> 00:02:23,880 Speaker 1: Profit l two. He has also been recognized by the 35 00:02:23,919 --> 00:02:28,080 Speaker 1: World's Economic Forum as one of the Global Leaders of Tomorrow. 36 00:02:28,360 --> 00:02:32,000 Speaker 1: Professor Scott Galloway, Welcome back to Bloomberg. Thanks very good 37 00:02:32,000 --> 00:02:34,320 Speaker 1: to see you. What brought you to my attention a 38 00:02:34,320 --> 00:02:36,919 Speaker 1: few years ago was a video that you had done. 39 00:02:37,200 --> 00:02:41,240 Speaker 1: It was a conference appearance about the four horsemen and 40 00:02:41,320 --> 00:02:45,240 Speaker 1: they were Amazon, Apple, Facebook, and Google. So so why 41 00:02:45,240 --> 00:02:49,000 Speaker 1: don't we start with those. Let's talk about Google. In 42 00:02:49,040 --> 00:02:51,480 Speaker 1: a recent L two video you did, and you also 43 00:02:51,600 --> 00:02:54,760 Speaker 1: speak every year at the Digital Brands Conference d l 44 00:02:54,800 --> 00:02:59,880 Speaker 1: D I think conference. Um, you talked about Google low 45 00:03:00,000 --> 00:03:04,920 Speaker 1: its price eleven percent and yet it increased its total 46 00:03:05,240 --> 00:03:10,840 Speaker 1: ad revenue. They seem to really be dominating online advertising. 47 00:03:10,840 --> 00:03:13,440 Speaker 1: Can imagine how difficult all those whether you're competing with them, 48 00:03:13,480 --> 00:03:17,920 Speaker 1: your clear channel, outdoor, uh, you're the New York Times, 49 00:03:17,919 --> 00:03:20,160 Speaker 1: your hearst, and you have a company that's able to 50 00:03:20,400 --> 00:03:24,359 Speaker 1: a competitor's able to increase its revenues and lower its 51 00:03:24,400 --> 00:03:27,120 Speaker 1: prices eleven percent, And initially the analysts thought that was 52 00:03:27,160 --> 00:03:29,320 Speaker 1: a sign of weakness because their cost per click was 53 00:03:29,360 --> 00:03:32,520 Speaker 1: going down, but effectively, Google every year gets more and 54 00:03:32,520 --> 00:03:34,280 Speaker 1: more competitive. It's like, how do you know if an 55 00:03:34,320 --> 00:03:37,640 Speaker 1: industry is right to be disrupted? They raised their prices 56 00:03:37,680 --> 00:03:40,400 Speaker 1: faster than inflation when they'll underlying increase in innovation. You 57 00:03:40,400 --> 00:03:43,520 Speaker 1: could argue that media or television is incredibly right to 58 00:03:43,520 --> 00:03:46,240 Speaker 1: be disrupted and increase the prices much faster than inflation 59 00:03:46,600 --> 00:03:51,040 Speaker 1: while viewership has gone down, whereas Google is probably the 60 00:03:51,160 --> 00:03:55,040 Speaker 1: least disruptible business right now in media because every year 61 00:03:55,080 --> 00:03:57,640 Speaker 1: it gets substantially better, and they keep loaning their prices. 62 00:03:58,000 --> 00:04:02,600 Speaker 1: So the other um leader in digital advertising is Facebook. 63 00:04:03,800 --> 00:04:05,600 Speaker 1: Are they ever going to be able to give Google 64 00:04:05,600 --> 00:04:07,240 Speaker 1: a run for their money? Oh? They already are. I 65 00:04:07,240 --> 00:04:08,960 Speaker 1: mean between the two of them, and it really is 66 00:04:08,960 --> 00:04:12,040 Speaker 1: a duopoly if you look at all a digital marketing. Uh, 67 00:04:12,320 --> 00:04:15,040 Speaker 1: Facebook and Google accounted for a hundred and three percent 68 00:04:15,120 --> 00:04:17,159 Speaker 1: of the growth. Now what does that mean. It means 69 00:04:17,200 --> 00:04:19,839 Speaker 1: that if you aren't Facebook or Google and you're in 70 00:04:19,839 --> 00:04:24,880 Speaker 1: digital marketing officially, the industry is in structural decline. So 71 00:04:24,920 --> 00:04:27,520 Speaker 1: if you work for anyone who's attach platform, search engine 72 00:04:27,560 --> 00:04:30,839 Speaker 1: optimization and agency doing media planning online, your business like 73 00:04:30,920 --> 00:04:33,600 Speaker 1: newspapers and magazines is in decline. So let's talk a 74 00:04:33,640 --> 00:04:37,159 Speaker 1: little bit about Facebook. You said their pivot to mobile 75 00:04:37,720 --> 00:04:40,839 Speaker 1: was one of the greatest shifts of a large corporation 76 00:04:41,279 --> 00:04:43,920 Speaker 1: in history, arguably the most agile company in the world. 77 00:04:43,920 --> 00:04:46,240 Speaker 1: Three years ago, zero percent of the revenue from mobile. 78 00:04:46,520 --> 00:04:48,320 Speaker 1: Mark Zuckerberg said he did not believe in kind of 79 00:04:48,320 --> 00:04:50,599 Speaker 1: the app economy, thought it was all gonna be about browsers. 80 00:04:50,920 --> 00:04:54,200 Speaker 1: And he was wrong and pivoted and turned the fire 81 00:04:54,240 --> 00:04:57,800 Speaker 1: hose of great management, great engineering talent, and now I 82 00:04:57,839 --> 00:05:01,920 Speaker 1: think about eighty center the revenue comes from mobile. It's 83 00:05:02,240 --> 00:05:05,039 Speaker 1: it's it's hard to imagine a pivot. We all saw 84 00:05:05,120 --> 00:05:07,080 Speaker 1: mobile coming, but yeah, who wasn't able to get The 85 00:05:07,680 --> 00:05:11,320 Speaker 1: New York Times This is this is the most impressive 86 00:05:11,600 --> 00:05:13,880 Speaker 1: agile pivot I think in the history of business. Now 87 00:05:13,920 --> 00:05:16,160 Speaker 1: you've also previously called them one of the greatest s 88 00:05:16,200 --> 00:05:19,200 Speaker 1: bait and switch set ups of all time. Why is 89 00:05:19,240 --> 00:05:24,240 Speaker 1: that so? The general the general promise from Facebook was 90 00:05:24,360 --> 00:05:27,280 Speaker 1: invest in your Facebook page, Nike, and you're gonna have 91 00:05:27,320 --> 00:05:29,960 Speaker 1: this incredible asset. You're gonna have a captive marketing or 92 00:05:30,000 --> 00:05:32,120 Speaker 1: a captive asset, which will be people who have raised 93 00:05:32,120 --> 00:05:34,800 Speaker 1: their hand and said I have an affinity for Nike, 94 00:05:34,839 --> 00:05:36,640 Speaker 1: and then you'll be able to communicate directly to them 95 00:05:36,680 --> 00:05:39,800 Speaker 1: that you'll have an asset. In order to build this asset, 96 00:05:39,800 --> 00:05:42,039 Speaker 1: you had to advertise, and Nike know the firms spent 97 00:05:42,200 --> 00:05:44,919 Speaker 1: millions of dollars advertising to build their fan community. And 98 00:05:44,920 --> 00:05:47,359 Speaker 1: it was nice because it had this vanity metric of 99 00:05:47,360 --> 00:05:49,719 Speaker 1: how many fans you had. It became a symbol of 100 00:05:49,720 --> 00:05:52,440 Speaker 1: whether a company got it or not based on how 101 00:05:52,480 --> 00:05:55,200 Speaker 1: many how many fans you had on Facebook. And then 102 00:05:55,320 --> 00:05:58,800 Speaker 1: once kind of that, that hundreds of millions of spending 103 00:05:58,839 --> 00:06:01,159 Speaker 1: to build these communities with sort of done. Facebook turned 104 00:06:01,160 --> 00:06:04,039 Speaker 1: around and said, just kidding. If you want to reach 105 00:06:04,080 --> 00:06:07,560 Speaker 1: these people, you've got to advertise and organic reach. That 106 00:06:07,680 --> 00:06:10,680 Speaker 1: is the percentage of Nike's messages that reach their end 107 00:06:10,800 --> 00:06:14,920 Speaker 1: fans went from a down to eight, five or three. 108 00:06:15,000 --> 00:06:18,239 Speaker 1: It's tantamount to you building a house, putting the finishing 109 00:06:18,240 --> 00:06:20,000 Speaker 1: touches on it, putting the lock on the door, and 110 00:06:20,040 --> 00:06:21,960 Speaker 1: then the county shows up and says, chess kidding, you 111 00:06:22,040 --> 00:06:23,880 Speaker 1: don't own the house. We do. I think this was 112 00:06:23,920 --> 00:06:26,680 Speaker 1: one of the greatest bait and switches in corporate history. 113 00:06:26,760 --> 00:06:29,720 Speaker 1: What did that do to the trust factor of corporations 114 00:06:29,720 --> 00:06:32,840 Speaker 1: wanting to advertise on Facebook? I think it was temporary 115 00:06:32,880 --> 00:06:36,000 Speaker 1: because there's so much momentum. It's such an outstanding product. 116 00:06:36,279 --> 00:06:39,040 Speaker 1: They have such power that and h and quite frankly, also, 117 00:06:39,080 --> 00:06:40,800 Speaker 1: I think they've done such a great job managing their 118 00:06:40,839 --> 00:06:43,320 Speaker 1: image because I think their management team is likable, which 119 00:06:43,320 --> 00:06:46,800 Speaker 1: I think is incredibly important. People have largely overlooked it. 120 00:06:47,240 --> 00:06:48,760 Speaker 1: If you want to, if you want to figure out 121 00:06:48,760 --> 00:06:51,000 Speaker 1: a way to like somebody, you figure it out. What 122 00:06:51,080 --> 00:06:53,919 Speaker 1: about a fatigue? Is something that certainly is an issue 123 00:06:53,960 --> 00:06:57,080 Speaker 1: these days. Yes, so the the engagement levels, the percentage 124 00:06:57,080 --> 00:07:00,000 Speaker 1: of people interacting with a piece of content on Facebook 125 00:07:00,160 --> 00:07:04,560 Speaker 1: or of their posts are sponsored, meaning they're basically advertising. 126 00:07:04,880 --> 00:07:07,279 Speaker 1: And he started right into your right into your feed. 127 00:07:07,279 --> 00:07:10,320 Speaker 1: One of six pieces of content is someone's paying to 128 00:07:10,360 --> 00:07:13,559 Speaker 1: get in front of you, interrupting, interruption advertising no different 129 00:07:13,560 --> 00:07:17,040 Speaker 1: than television. However, the interaction or the percentage of people 130 00:07:17,120 --> 00:07:19,640 Speaker 1: are liking, sharing or commenting on that comment on that 131 00:07:19,720 --> 00:07:22,920 Speaker 1: content has declined in the last nine months, so you 132 00:07:22,960 --> 00:07:25,600 Speaker 1: are seeing what you would call ad fatigue glow now. 133 00:07:25,600 --> 00:07:28,400 Speaker 1: Having said that, they have other properties and tons of 134 00:07:28,400 --> 00:07:31,920 Speaker 1: different ways to monetize, but the core platform does does 135 00:07:31,920 --> 00:07:36,000 Speaker 1: seem to be experiencing ad fatigue. And what about Facebook 136 00:07:36,040 --> 00:07:39,360 Speaker 1: Live and Facebook Native Stories? Is that going anywhere or 137 00:07:39,440 --> 00:07:43,160 Speaker 1: what's the outlook on that? So I I personally believe 138 00:07:43,160 --> 00:07:46,880 Speaker 1: that the biggest innovation or the most the thing to 139 00:07:47,000 --> 00:07:50,160 Speaker 1: watch right now is from our one of their properties, Instagram, 140 00:07:50,240 --> 00:07:54,720 Speaker 1: specifically Instagram Stories, because it is squarely going after Snapchat 141 00:07:54,920 --> 00:07:57,120 Speaker 1: and what's interesting and I think the most interesting piece 142 00:07:57,120 --> 00:07:59,760 Speaker 1: of data in the world of media right now is 143 00:07:59,800 --> 00:08:03,960 Speaker 1: to look at snapchats user growth and daily active users 144 00:08:04,520 --> 00:08:07,680 Speaker 1: once Instagram launched Story as a direct competitor, and what 145 00:08:07,680 --> 00:08:13,000 Speaker 1: you've seen a Snapchat's growth has decelerated dramatically since Instagram 146 00:08:13,080 --> 00:08:16,960 Speaker 1: launched Stories. So people think Snapchat is the Facebook of video. 147 00:08:17,720 --> 00:08:20,400 Speaker 1: My thesis is that, in fact, Facebook is the Facebook 148 00:08:20,400 --> 00:08:23,960 Speaker 1: of video, and it's coming after Snapchat. And it's fun 149 00:08:23,960 --> 00:08:26,680 Speaker 1: to speculate, but I think Snapchat goes public, goes crazy 150 00:08:26,760 --> 00:08:28,760 Speaker 1: on first day of trading because people haven't had access 151 00:08:28,800 --> 00:08:30,720 Speaker 1: to a unicorn in a while. But I think it's 152 00:08:30,720 --> 00:08:33,360 Speaker 1: gonna be ground zero for ringing the bell at the 153 00:08:33,400 --> 00:08:36,000 Speaker 1: top and be one of the greatest. I think we're 154 00:08:36,000 --> 00:08:38,400 Speaker 1: setting ourselves up for something that might be the spark 155 00:08:38,480 --> 00:08:41,800 Speaker 1: that torches the market with Snapchat. I'm Mary rid Hilts. 156 00:08:41,840 --> 00:08:45,160 Speaker 1: You're listening to Masters in Business on Bloomberg Radio. My 157 00:08:45,200 --> 00:08:48,520 Speaker 1: special guest today is Professor Scott Galloway of n y 158 00:08:48,640 --> 00:08:52,120 Speaker 1: U Stern School of Business. He is an expert on 159 00:08:52,760 --> 00:08:57,640 Speaker 1: Internet technology, digital marketing, branding, and let's talk about one 160 00:08:57,640 --> 00:09:02,880 Speaker 1: of the biggest companies in that base. Amazon. Last time 161 00:09:02,920 --> 00:09:06,040 Speaker 1: you were here, we talked about why you thought the 162 00:09:06,040 --> 00:09:10,200 Speaker 1: stock was overvalued, wouldn't go anywhere. You very famously issued 163 00:09:10,200 --> 00:09:13,720 Speaker 1: a mia Kalpa Online said pretty much that marked the 164 00:09:13,760 --> 00:09:17,280 Speaker 1: start of the next major leg up um. What do 165 00:09:17,320 --> 00:09:20,280 Speaker 1: we think of Amazon today? So first off, yeah, I 166 00:09:20,800 --> 00:09:23,080 Speaker 1: was a hundred and ten percent wrong on that. My 167 00:09:23,120 --> 00:09:26,480 Speaker 1: initial thought was that the futures about multi channel retail. 168 00:09:26,600 --> 00:09:29,199 Speaker 1: Their fulfilming costs were escalating, and I thought that they 169 00:09:29,200 --> 00:09:31,120 Speaker 1: were going to need to buy a multi channel retailer. 170 00:09:31,280 --> 00:09:34,480 Speaker 1: The delivery costs also had had hats going up in billions. Yeah, 171 00:09:34,520 --> 00:09:36,440 Speaker 1: it continues to but now now people see it as 172 00:09:36,440 --> 00:09:39,120 Speaker 1: an asset, not a liability, and there's some some merit 173 00:09:39,200 --> 00:09:42,760 Speaker 1: to that. So at the time, I thought, okay, Apple 174 00:09:42,760 --> 00:09:44,920 Speaker 1: would be the first trillion dollar company because somebody's going 175 00:09:44,960 --> 00:09:47,520 Speaker 1: to get there, And what Apples pulled off is exceptional 176 00:09:47,800 --> 00:09:50,520 Speaker 1: lowest price or low cost provider because of their supply 177 00:09:50,600 --> 00:09:53,400 Speaker 1: chain power. But at the same time the margins premium 178 00:09:53,400 --> 00:09:56,319 Speaker 1: price products, so the volumes of Toyota with the margins 179 00:09:56,320 --> 00:09:58,800 Speaker 1: of Ferrari, which makes for the most profitable company in history. 180 00:09:58,840 --> 00:10:02,320 Speaker 1: Now Amazon, Amazon is the most disruptive company and the 181 00:10:02,360 --> 00:10:04,560 Speaker 1: largest economy in the world. And if you look at 182 00:10:04,559 --> 00:10:06,720 Speaker 1: the moats and a number of distinct businesses they would 183 00:10:06,720 --> 00:10:09,840 Speaker 1: have that would probably be greater than a hundred billion 184 00:10:09,840 --> 00:10:12,360 Speaker 1: dollar businesses on their own, they have the most apples 185 00:10:12,480 --> 00:10:16,160 Speaker 1: right up there. But now you have aws, um, you 186 00:10:16,240 --> 00:10:19,840 Speaker 1: have the core platform itself. It looks as if Amazon 187 00:10:19,880 --> 00:10:22,959 Speaker 1: Prime and their media properties are turning into a juggernaut. 188 00:10:23,360 --> 00:10:25,480 Speaker 1: Possibly the brill growth business for them is that they're 189 00:10:25,520 --> 00:10:28,040 Speaker 1: going into the business of selling picks as opposed to 190 00:10:28,040 --> 00:10:32,840 Speaker 1: mining for gold, leasing planes, leasing tractor trailers. Um, they're 191 00:10:32,880 --> 00:10:37,520 Speaker 1: going after FedEx and UPS twillion in market cap between DHL, 192 00:10:37,600 --> 00:10:40,440 Speaker 1: FedEx and UPS, and I think Amazon's decided they want 193 00:10:40,480 --> 00:10:42,000 Speaker 1: most are all of it. I think most of us 194 00:10:42,040 --> 00:10:45,960 Speaker 1: are who have e commerce companies or brands are going 195 00:10:46,000 --> 00:10:48,640 Speaker 1: to start using Amazon not only as a as a 196 00:10:48,679 --> 00:10:52,240 Speaker 1: platform with Amazon Marketplace, but using Amazon to deliver the 197 00:10:52,320 --> 00:10:54,720 Speaker 1: last mile when you say a ws' referring to the 198 00:10:54,720 --> 00:10:58,760 Speaker 1: cloud services that they offer. I have a funny Amazon story. 199 00:10:59,120 --> 00:11:01,440 Speaker 1: So I have a treadmill in my basement and I 200 00:11:01,440 --> 00:11:04,880 Speaker 1: have a tele flat panel TV which have plummeted in 201 00:11:04,920 --> 00:11:08,720 Speaker 1: price smart TVs inches four hundred dollars. I want to 202 00:11:08,720 --> 00:11:12,120 Speaker 1: hang it. You know. It sits there for a week 203 00:11:12,240 --> 00:11:14,800 Speaker 1: with the drill for a month. Finally I'm like, I'm 204 00:11:14,800 --> 00:11:16,600 Speaker 1: gonna go back to the store. I got it and 205 00:11:16,640 --> 00:11:18,720 Speaker 1: have them hang it. They want more to hang the 206 00:11:18,720 --> 00:11:22,480 Speaker 1: TV than the TV cost, and so I start looking 207 00:11:22,480 --> 00:11:25,160 Speaker 1: on let me find a place to look online and 208 00:11:25,200 --> 00:11:28,719 Speaker 1: I never even heard of Amazon Home Services. What is this? 209 00:11:29,360 --> 00:11:32,760 Speaker 1: It's sixty nine dollars that one of the local stores 210 00:11:32,800 --> 00:11:35,520 Speaker 1: wanted four fifty to hang it. So I set up 211 00:11:35,520 --> 00:11:38,120 Speaker 1: an appointment. The guy shows up, He hangs the TV 212 00:11:38,320 --> 00:11:40,440 Speaker 1: for sixty nine bucks. I say, who else do you 213 00:11:40,440 --> 00:11:43,680 Speaker 1: work with? And he reels off everybody, and I said, 214 00:11:43,760 --> 00:11:46,439 Speaker 1: those are all wildly disparate price points because I get 215 00:11:46,440 --> 00:11:49,400 Speaker 1: paid the same. It's the same drill, it's the same stuff. 216 00:11:49,720 --> 00:11:51,840 Speaker 1: He goes, I've done three houses on a block where 217 00:11:51,840 --> 00:11:54,320 Speaker 1: the costs are sixty nine dollars, three hundred dollars, and 218 00:11:54,320 --> 00:11:57,320 Speaker 1: five hundred dollars. It's me. And then I start looking 219 00:11:57,360 --> 00:12:00,640 Speaker 1: at the Amazon services that are offered. It pretty much 220 00:12:00,640 --> 00:12:04,079 Speaker 1: everything for your house. Where are they going to stop growing? 221 00:12:04,120 --> 00:12:07,120 Speaker 1: Where do they draw the line or are they just 222 00:12:07,400 --> 00:12:11,400 Speaker 1: completely no market is too far for them. I think 223 00:12:11,400 --> 00:12:13,960 Speaker 1: when it comes to your low consideration purchases or your 224 00:12:14,000 --> 00:12:17,839 Speaker 1: high consideration purchases that you don't enjoy auto insurance, I 225 00:12:17,880 --> 00:12:20,920 Speaker 1: think Amazon wants all of it. And what's interesting about 226 00:12:20,960 --> 00:12:25,400 Speaker 1: Amazon and one of the incredibly impressive things the hardware 227 00:12:25,440 --> 00:12:28,240 Speaker 1: innovation of two thousand and sixteen, even though it came 228 00:12:28,240 --> 00:12:30,360 Speaker 1: out earlier in that was the Echo. And if you 229 00:12:30,400 --> 00:12:32,280 Speaker 1: have do you have an Amazon Echo? I do not. 230 00:12:32,760 --> 00:12:34,360 Speaker 1: So you get one of these things and it literally 231 00:12:34,440 --> 00:12:36,040 Speaker 1: kind of blows your mind because you get a glimpse 232 00:12:36,040 --> 00:12:38,520 Speaker 1: into what the future of retail and commerce might be. 233 00:12:39,080 --> 00:12:41,280 Speaker 1: You could you put these things around your house and 234 00:12:41,400 --> 00:12:44,120 Speaker 1: literally at this void, at this volume, you know, you 235 00:12:44,120 --> 00:12:46,880 Speaker 1: see Alexa and it says yes, and you make a 236 00:12:46,920 --> 00:12:50,640 Speaker 1: request order an Uber add tied to my shopping basket. 237 00:12:50,720 --> 00:12:53,560 Speaker 1: And when you start thinking about the frictionless nature of voice, 238 00:12:54,160 --> 00:12:56,720 Speaker 1: you start thinking about Amazon's purchase history, the fact they 239 00:12:56,760 --> 00:12:59,160 Speaker 1: have your credit card one click ordering, the reputation for 240 00:12:59,240 --> 00:13:01,760 Speaker 1: value they have, the fact that they have a warehouse 241 00:13:02,160 --> 00:13:05,640 Speaker 1: within twenty miles of the population, which is miss it's 242 00:13:05,720 --> 00:13:08,480 Speaker 1: misleading because it's really eighty percent of the disposable income 243 00:13:08,480 --> 00:13:11,240 Speaker 1: of the US. You have what I believe, and by 244 00:13:11,280 --> 00:13:13,439 Speaker 1: the way, I don't know this. I don't work directly 245 00:13:13,480 --> 00:13:16,120 Speaker 1: with Amazon. I believe that they're headed is something called 246 00:13:16,160 --> 00:13:18,959 Speaker 1: Prime squared or some something similar to that, they'll announce 247 00:13:18,960 --> 00:13:21,040 Speaker 1: a test area and they'll say, Barry, we know a 248 00:13:21,040 --> 00:13:23,439 Speaker 1: lot about you. We're gonna install these echoes all over 249 00:13:23,440 --> 00:13:26,400 Speaker 1: your house. Whenever you need anything, you calibrate up or down. 250 00:13:26,920 --> 00:13:29,319 Speaker 1: We send you two boxes three times a week, ones 251 00:13:29,360 --> 00:13:31,680 Speaker 1: with your stuff, the second you put stuff that you 252 00:13:31,720 --> 00:13:34,080 Speaker 1: don't want back in the box, and we calibrate some more. 253 00:13:34,480 --> 00:13:37,880 Speaker 1: And over time, we're gonna take your entire retail ecosystem 254 00:13:38,640 --> 00:13:42,800 Speaker 1: off the table from everybody else, and of everything you 255 00:13:43,000 --> 00:13:45,079 Speaker 1: order in your life that you don't enjoy order and 256 00:13:45,160 --> 00:13:47,400 Speaker 1: you enjoy looking for cars, you want to go, You 257 00:13:47,400 --> 00:13:49,840 Speaker 1: want to go buy that bmw z A, your wife 258 00:13:49,840 --> 00:13:52,600 Speaker 1: wants to buy that pair of Christian lebutan's the other 259 00:13:53,480 --> 00:13:56,640 Speaker 1: cent of stuff you don't enjoy buying. Amazon is going 260 00:13:56,679 --> 00:13:59,079 Speaker 1: to do for you automatically. They're going to do a test, 261 00:13:59,240 --> 00:14:01,400 Speaker 1: most likely in a college town. They're gonna announce the're 262 00:14:01,400 --> 00:14:04,440 Speaker 1: gonna take prime from dollars a year to eight thousand. 263 00:14:04,480 --> 00:14:06,920 Speaker 1: The stock is going to be per per user. Perhaps 264 00:14:07,000 --> 00:14:09,040 Speaker 1: all the stock is gonna become anti gravity and go 265 00:14:09,040 --> 00:14:11,160 Speaker 1: to a trillion dollars. I think Amazon is the first one. Again, 266 00:14:11,200 --> 00:14:13,560 Speaker 1: So here's why I haven't gotten the Echo. I have 267 00:14:13,720 --> 00:14:18,839 Speaker 1: two experiences, three experiences with voice recognition software. One is 268 00:14:18,880 --> 00:14:23,960 Speaker 1: Google Voice, which is sort of hilarious garbled thing. The 269 00:14:24,040 --> 00:14:27,760 Speaker 1: second is Siria, which, if you read the Demnuota correct, 270 00:14:27,800 --> 00:14:30,640 Speaker 1: is one of the funniest collection of of typos. And 271 00:14:30,640 --> 00:14:34,240 Speaker 1: we've all experienced really embarrassing things because of the way 272 00:14:34,280 --> 00:14:37,400 Speaker 1: that works. So I looked at Echo as just another 273 00:14:37,560 --> 00:14:42,040 Speaker 1: mediocre voice recognition product. You're telling me that's not true. Well, 274 00:14:42,520 --> 00:14:45,800 Speaker 1: they're trying to Google an Apple trying to it's probably 275 00:14:45,800 --> 00:14:49,800 Speaker 1: more ambitious. They're trying to do it more around utility. 276 00:14:49,800 --> 00:14:53,000 Speaker 1: Find find me an Applebee's, or how do I get here? 277 00:14:53,160 --> 00:14:57,960 Speaker 1: Or call Barry. Alexa is alright, get me information, use 278 00:14:58,000 --> 00:14:59,880 Speaker 1: it for search engine. My son does it to test 279 00:15:00,080 --> 00:15:03,920 Speaker 1: geography skills and capital skills. But they're positioning it around commerce. 280 00:15:04,280 --> 00:15:06,960 Speaker 1: And when you think about the easiest place to make 281 00:15:06,960 --> 00:15:12,160 Speaker 1: decisions around commerce, seamlessly saying Alexa, you know, barbecue eight 282 00:15:12,280 --> 00:15:15,320 Speaker 1: people Friday night, and it immediately goes into your purchase history, 283 00:15:15,320 --> 00:15:18,560 Speaker 1: your preferences, your brand preferences, and puts together a package 284 00:15:19,040 --> 00:15:23,160 Speaker 1: of additional additional ribs imported beer. But I p A 285 00:15:23,200 --> 00:15:25,400 Speaker 1: because that's what you like and then a selection of stuff, 286 00:15:25,400 --> 00:15:27,960 Speaker 1: and it begins to calibrate and can get it there 287 00:15:28,000 --> 00:15:31,400 Speaker 1: within two hours. Because of their fulfillment network, you at 288 00:15:31,440 --> 00:15:33,360 Speaker 1: some point to sort of throw in the towel and 289 00:15:33,360 --> 00:15:36,840 Speaker 1: realize that Amazon is the only retailer that matters, is 290 00:15:36,880 --> 00:15:39,280 Speaker 1: the only retailer I need in my life. And as 291 00:15:39,280 --> 00:15:41,400 Speaker 1: we get more, we get busier and busier and suffer 292 00:15:41,400 --> 00:15:44,080 Speaker 1: from more and more time poverty. The opportunity for voice 293 00:15:44,160 --> 00:15:48,560 Speaker 1: artificial intelligence, an incredible investment they've made in fulfillment infrastructure 294 00:15:48,920 --> 00:15:51,600 Speaker 1: will result in a value proposition where you might decide 295 00:15:51,760 --> 00:15:54,320 Speaker 1: all the shopping and decisions I make around commerce in 296 00:15:54,360 --> 00:15:56,440 Speaker 1: my life, except for the ones I love, I am 297 00:15:56,440 --> 00:15:59,720 Speaker 1: just going to outsource to Amazon. You also have an Amazon. 298 00:16:00,320 --> 00:16:03,200 Speaker 1: To a certain extent, the game is sort of already over. 299 00:16:03,240 --> 00:16:05,920 Speaker 1: I play I Play Texas holding poker every every few 300 00:16:05,920 --> 00:16:08,120 Speaker 1: weeks with a bunch of guys, and at some point, 301 00:16:08,160 --> 00:16:11,360 Speaker 1: when one player has most of the chips, he or 302 00:16:11,440 --> 00:16:14,040 Speaker 1: she's already won because they can muscle everybody out by 303 00:16:14,080 --> 00:16:17,280 Speaker 1: just going all in until they finally win. Amazon basically 304 00:16:17,360 --> 00:16:20,520 Speaker 1: is at that point their access to capital is probably 305 00:16:20,560 --> 00:16:23,520 Speaker 1: they've had access to cheaper capital for longer than probably 306 00:16:23,520 --> 00:16:26,160 Speaker 1: any company in modern history, and as a result, they're 307 00:16:26,160 --> 00:16:29,960 Speaker 1: basically muscling everybody out. I'm Barry Ridholtz. You're listening to 308 00:16:30,040 --> 00:16:33,560 Speaker 1: Master's in Business on Bloomberg Radio. My special guest today 309 00:16:33,720 --> 00:16:37,479 Speaker 1: is Scott Galloway. He is a professor of brand strategy 310 00:16:37,520 --> 00:16:40,760 Speaker 1: and Digital Marketing at the n y U Stern School 311 00:16:40,760 --> 00:16:43,120 Speaker 1: of Business. He is the author of the Digital i 312 00:16:43,280 --> 00:16:47,040 Speaker 1: Q Index, named one of the world's fifty best business 313 00:16:47,040 --> 00:16:51,240 Speaker 1: school professors. He's founded and sold a number of of companies. 314 00:16:52,040 --> 00:16:55,440 Speaker 1: We were talking about Amazon before and how they had 315 00:16:55,440 --> 00:17:01,960 Speaker 1: a clearly defined mission. What is the problem with Apple's 316 00:17:02,160 --> 00:17:05,760 Speaker 1: mission description? Well, there there isn't one. The others have 317 00:17:06,240 --> 00:17:09,760 Speaker 1: various succinct and compelling missions that are the the investment 318 00:17:09,800 --> 00:17:12,960 Speaker 1: the investment community understands and demands. Apple does not. It's 319 00:17:13,000 --> 00:17:16,160 Speaker 1: not entirely clear what Apple is trying to achieve long term. 320 00:17:16,240 --> 00:17:19,000 Speaker 1: So as a result, Apple has become a what have 321 00:17:19,080 --> 00:17:21,200 Speaker 1: you done for me lately? In the investment market, it's 322 00:17:21,200 --> 00:17:24,080 Speaker 1: evaluated in the context of every product release, and if 323 00:17:24,080 --> 00:17:27,720 Speaker 1: that product doesn't revolutionize the world, which many have, the 324 00:17:27,760 --> 00:17:31,119 Speaker 1: stock gets taken down. So you have you have the 325 00:17:31,160 --> 00:17:35,600 Speaker 1: other horsemen, Facebook, Amazon, and Google trading it anywhere between 326 00:17:35,680 --> 00:17:38,720 Speaker 1: kind of twenty and sixty times, and you have Apple 327 00:17:38,760 --> 00:17:41,880 Speaker 1: trading at seven to ten. So you could argue Apple 328 00:17:41,960 --> 00:17:44,640 Speaker 1: could be the first trillion dollar company if it just 329 00:17:44,760 --> 00:17:47,280 Speaker 1: got a story, if it just said this is what 330 00:17:47,320 --> 00:17:49,480 Speaker 1: we're about and where we're headed. So I'm a mac 331 00:17:49,560 --> 00:17:53,680 Speaker 1: head going dating back to my nine classic Mac Classic, 332 00:17:54,119 --> 00:17:57,760 Speaker 1: and to me, the Apple story was always it just works. 333 00:17:58,480 --> 00:18:05,000 Speaker 1: When the competition was Compact, HP, IBM, dell Um, they 334 00:18:05,000 --> 00:18:07,760 Speaker 1: didn't just work windows back in those days. Was it 335 00:18:07,880 --> 00:18:13,240 Speaker 1: was a nightmare. And we've seen a variety of innovations, 336 00:18:13,720 --> 00:18:17,480 Speaker 1: starting with the iPod. There was nothing new about that technology. 337 00:18:17,520 --> 00:18:19,560 Speaker 1: It was all off the shelf stuff. They put it 338 00:18:19,600 --> 00:18:23,399 Speaker 1: together in a way nobody else did iPod, iPhone, iPad, 339 00:18:23,960 --> 00:18:28,080 Speaker 1: I Watch. Have they run out of innovation or or 340 00:18:28,240 --> 00:18:31,679 Speaker 1: are we still milking the last five major products? So 341 00:18:31,720 --> 00:18:33,080 Speaker 1: that seems to be the key question. A lot of 342 00:18:33,080 --> 00:18:36,240 Speaker 1: people would say our air pods really the design breakthrough, 343 00:18:36,280 --> 00:18:39,679 Speaker 1: the you know, the wireless earpieces. Is the Apple Watch 344 00:18:39,840 --> 00:18:43,880 Speaker 1: really kind of the legacy of the most creative industrial 345 00:18:43,880 --> 00:18:45,880 Speaker 1: engineers in the world. So a lot of people would 346 00:18:45,880 --> 00:18:48,680 Speaker 1: say that. I would say that Apple was theoretically suffering 347 00:18:48,680 --> 00:18:52,159 Speaker 1: from low te It appears as if it's it's lost 348 00:18:52,200 --> 00:18:56,000 Speaker 1: its mojo. Having said that, you know, it just has so. 349 00:18:56,080 --> 00:18:59,040 Speaker 1: It has such an incredible brand, It has so much 350 00:18:59,040 --> 00:19:03,600 Speaker 1: credibility around anything, you know, any item, and quite frankly, 351 00:19:03,640 --> 00:19:06,199 Speaker 1: it's trading it. It's still trades it. You know, it 352 00:19:06,240 --> 00:19:09,160 Speaker 1: feels you're you're in this business right. It doesn't feel expensive. 353 00:19:09,200 --> 00:19:11,560 Speaker 1: It feels like, I mean, basically bury It's up in 354 00:19:11,600 --> 00:19:14,240 Speaker 1: the last couple of months because people just with no 355 00:19:14,359 --> 00:19:17,639 Speaker 1: real catalyst. So here's here's the crazy data point we 356 00:19:17,800 --> 00:19:21,720 Speaker 1: pulled together when we were doing research for for this show. 357 00:19:22,240 --> 00:19:26,400 Speaker 1: You take the Apple cash hoard, just the cash dollars 358 00:19:26,400 --> 00:19:29,920 Speaker 1: it has. There are only thirteen companies in the SMP 359 00:19:30,080 --> 00:19:35,639 Speaker 1: five that their entire worth is greater than Apple's cash 360 00:19:35,760 --> 00:19:40,080 Speaker 1: ord That that's astonishing data point, which which raises the 361 00:19:40,160 --> 00:19:42,280 Speaker 1: question what they should do with all that cash. But 362 00:19:42,400 --> 00:19:44,600 Speaker 1: let's come back to that. I want to talk about 363 00:19:44,680 --> 00:19:48,440 Speaker 1: the Apple Watch, which people have called kind of a failure. 364 00:19:48,520 --> 00:19:51,080 Speaker 1: But when you look at the numbers and you look 365 00:19:51,119 --> 00:19:55,280 Speaker 1: at what they've done to the Swiss watchmaking group, let's 366 00:19:55,320 --> 00:19:57,560 Speaker 1: let's talk about it. That is the Apple Watch a 367 00:19:57,640 --> 00:20:00,399 Speaker 1: successor failure. I notice you're not wearing one. I'm not 368 00:20:00,640 --> 00:20:04,439 Speaker 1: so the And this goes back to what Apple strength 369 00:20:04,560 --> 00:20:07,080 Speaker 1: is This thing on my wrist. I haven't wound it 370 00:20:07,320 --> 00:20:10,320 Speaker 1: in five years. If I'm honest with myself, it's my 371 00:20:10,359 --> 00:20:14,680 Speaker 1: attempt to signal masculinity and success to the opposite success 372 00:20:14,680 --> 00:20:17,280 Speaker 1: opposite sucks. I think men who wear expensive watches are 373 00:20:17,280 --> 00:20:20,560 Speaker 1: basically trying to communicate two women. If you mate with me, 374 00:20:20,640 --> 00:20:22,480 Speaker 1: your kids are more likely to survive than if they 375 00:20:22,480 --> 00:20:24,919 Speaker 1: mate with someone wearing a swatch. So this is a 376 00:20:25,600 --> 00:20:29,119 Speaker 1: door winnie or feathers period to feathers, they have no 377 00:20:29,320 --> 00:20:33,040 Speaker 1: very little utility, and Apple's genius has been figuring out 378 00:20:33,080 --> 00:20:35,159 Speaker 1: a way to make a tech item feathers. Apple has 379 00:20:35,200 --> 00:20:38,800 Speaker 1: effectively decided they want out of the technology hardware business, 380 00:20:38,800 --> 00:20:40,680 Speaker 1: which trades at a multiple of EBITA, and they want 381 00:20:40,680 --> 00:20:42,280 Speaker 1: to be in the luxury business, which trades at a 382 00:20:42,440 --> 00:20:45,560 Speaker 1: multiple of revenues. It's a far superior business. The only 383 00:20:45,600 --> 00:20:48,080 Speaker 1: way they can sustain their margins is by having what 384 00:20:48,119 --> 00:20:51,240 Speaker 1: we would refer to a self expressive benefit. Apple has 385 00:20:51,320 --> 00:20:55,160 Speaker 1: become the ultimate display of wealth. If you do a 386 00:20:55,200 --> 00:20:58,679 Speaker 1: heat map by operating system Android versus iOS. It is 387 00:20:58,720 --> 00:21:02,280 Speaker 1: a heat map of wealth. Manhattan lights up iOS, You're 388 00:21:02,280 --> 00:21:06,440 Speaker 1: going to the suburbs. It's Android, the new feather. If 389 00:21:06,480 --> 00:21:09,600 Speaker 1: you have an iPhone, it means you're more likely to 390 00:21:09,720 --> 00:21:13,920 Speaker 1: be successful, educated, and have a random sexual experience. This 391 00:21:14,080 --> 00:21:16,399 Speaker 1: is this is the reason that they have the highest 392 00:21:16,440 --> 00:21:18,760 Speaker 1: margins in that industry. And the iPhone is the first 393 00:21:18,800 --> 00:21:22,439 Speaker 1: technology product whose margins have not eroded. Is the product 394 00:21:22,520 --> 00:21:25,320 Speaker 1: is matured because they've figured out it's a luxury brand, 395 00:21:25,359 --> 00:21:27,880 Speaker 1: it's not a technology brand. So one of your presentations 396 00:21:27,920 --> 00:21:31,320 Speaker 1: you talk about the mobile phone as the defining technology 397 00:21:31,359 --> 00:21:38,359 Speaker 1: of our age. Apple captures the profits Samsung captures, which 398 00:21:38,400 --> 00:21:41,679 Speaker 1: includes some overlap because they're a big supplier to Apple. 399 00:21:42,160 --> 00:21:45,439 Speaker 1: The rest of the industry or negative fights the losses. 400 00:21:45,480 --> 00:21:48,600 Speaker 1: And Apple versus Samsung is illuminating because they've taken different 401 00:21:48,600 --> 00:21:52,280 Speaker 1: approach to Samsung, invest two to three times the amount 402 00:21:52,280 --> 00:21:56,000 Speaker 1: of their top line revenues and traditional advertising and digital marketing. 403 00:21:56,119 --> 00:21:58,920 Speaker 1: So what does Apple do with all that excess capital 404 00:21:59,480 --> 00:22:02,320 Speaker 1: they have open stores. Most people would say that Apple's 405 00:22:02,359 --> 00:22:04,680 Speaker 1: genius has been the iPhone. I would argue that Apple's 406 00:22:04,760 --> 00:22:08,000 Speaker 1: genius move over the last thirteen years was building four 407 00:22:08,320 --> 00:22:11,480 Speaker 1: and fifty temples to the brand in eighteen markets called stores. 408 00:22:11,640 --> 00:22:14,600 Speaker 1: I'm Barry Ridhults. You're listening to Master's in Business on 409 00:22:14,640 --> 00:22:18,080 Speaker 1: Bloomberg Radio. My guest today is Scott Galloway. He is 410 00:22:18,119 --> 00:22:21,879 Speaker 1: a professor of Digital brands and Marketing at n y 411 00:22:21,960 --> 00:22:25,480 Speaker 1: U Stern School of Business. Last time we had you on, 412 00:22:25,800 --> 00:22:30,520 Speaker 1: you caused a little bit of UM controversy with your 413 00:22:30,560 --> 00:22:34,240 Speaker 1: infamous letter about millennials. We talked about it, So let 414 00:22:34,280 --> 00:22:38,640 Speaker 1: me ask you the question, do you love or hate millennials? 415 00:22:39,200 --> 00:22:42,040 Speaker 1: Oh gosh, you know it's easy to hate millennials, but 416 00:22:42,080 --> 00:22:45,600 Speaker 1: I would for all the complaints the business owners UM 417 00:22:45,800 --> 00:22:47,760 Speaker 1: put forward. At the end of the day, there's two 418 00:22:47,800 --> 00:22:49,680 Speaker 1: sides of the transaction. And the reason why we put 419 00:22:49,760 --> 00:22:52,320 Speaker 1: up with millennials and they are more expectant, more difficult 420 00:22:52,359 --> 00:22:54,920 Speaker 1: to manage, is because they're more talented than we were 421 00:22:54,920 --> 00:22:59,400 Speaker 1: at their age. The access to technology, the increase in education, 422 00:22:59,440 --> 00:23:05,520 Speaker 1: more kids are graduating from college is exceptional. They they 423 00:23:05,520 --> 00:23:08,000 Speaker 1: are the most talented generation. There's a price to it, though. 424 00:23:08,040 --> 00:23:10,680 Speaker 1: They want to talk about their careers. When I got 425 00:23:10,720 --> 00:23:12,480 Speaker 1: my first job at Morgan Stanley at u c l A, 426 00:23:12,560 --> 00:23:13,960 Speaker 1: we had a career talk once a year in the 427 00:23:13,960 --> 00:23:16,320 Speaker 1: form of a bonus and it lasted about fifteen minutes 428 00:23:16,680 --> 00:23:19,040 Speaker 1: and that was about it. It was so the notion 429 00:23:19,080 --> 00:23:21,680 Speaker 1: of going into my boss's office and saying, I want 430 00:23:21,680 --> 00:23:24,120 Speaker 1: to have a career talk, you know, six weeks after 431 00:23:24,160 --> 00:23:27,640 Speaker 1: I started, and I can't I can't even fathom the response, 432 00:23:27,800 --> 00:23:31,800 Speaker 1: but I would have received. But at l two, the 433 00:23:31,840 --> 00:23:34,720 Speaker 1: most inspiring people that I think, the thing I enjoy 434 00:23:34,800 --> 00:23:37,639 Speaker 1: the most is um is the kids that we have, 435 00:23:37,720 --> 00:23:40,399 Speaker 1: some twenty two to twenty eight year olds, and I 436 00:23:40,400 --> 00:23:42,639 Speaker 1: would describe them, and this is a sexist statement, and 437 00:23:42,760 --> 00:23:47,919 Speaker 1: mostly women. High school paledictorians are now women, mostly athletes, 438 00:23:48,119 --> 00:23:51,199 Speaker 1: the competitive grit in their background and and it's kind 439 00:23:51,200 --> 00:23:52,960 Speaker 1: of pasted it to say it that I'm not not 440 00:23:52,960 --> 00:23:54,280 Speaker 1: not necessarily think it's a good thing. But went to 441 00:23:54,320 --> 00:23:58,800 Speaker 1: outstanding universities, they have real academic, strong academic training from 442 00:23:58,840 --> 00:24:02,400 Speaker 1: the best institutions. These people are, you know, they feel 443 00:24:02,400 --> 00:24:04,800 Speaker 1: as if they could be the junior senator from Pennsylvania. 444 00:24:04,880 --> 00:24:08,240 Speaker 1: These twenty six year olds, they are so inspiring. At 445 00:24:08,240 --> 00:24:12,600 Speaker 1: the same time, they're used to feedback, they're used to recognition, 446 00:24:12,800 --> 00:24:16,360 Speaker 1: they're used to clarity around roles and compensation, and these 447 00:24:16,400 --> 00:24:18,960 Speaker 1: are all things when you think about it, we demand 448 00:24:18,960 --> 00:24:20,480 Speaker 1: as we get older and we have more currency in 449 00:24:20,480 --> 00:24:23,520 Speaker 1: the marketplace. They've just figured it out earlier. The ones 450 00:24:23,560 --> 00:24:25,760 Speaker 1: that aren't good it seems to have, you know, they 451 00:24:25,760 --> 00:24:27,359 Speaker 1: don't maybe don't have the skills, but they seem to 452 00:24:27,400 --> 00:24:29,280 Speaker 1: hold on to some of the negative attributes, and those 453 00:24:29,280 --> 00:24:31,119 Speaker 1: the ones to get all the all the press. But 454 00:24:31,320 --> 00:24:34,120 Speaker 1: on the whole, millennials have built L two for us 455 00:24:34,119 --> 00:24:37,239 Speaker 1: and I'm I'm I'm a fan. The fascinating thing is 456 00:24:37,320 --> 00:24:40,800 Speaker 1: for guys who are our age and we're not that 457 00:24:40,880 --> 00:24:44,840 Speaker 1: four apart in years, technology is something we've learned for them. 458 00:24:45,040 --> 00:24:49,280 Speaker 1: It's a native language, it's something they grew up with 459 00:24:49,320 --> 00:24:54,720 Speaker 1: as infants. You start playing with an iPad, right, it's 460 00:24:54,760 --> 00:24:58,040 Speaker 1: just there. Um, all right, So let's let's talk about 461 00:24:58,080 --> 00:25:00,399 Speaker 1: some of the other things that for For those of 462 00:25:00,440 --> 00:25:04,680 Speaker 1: you listening, you should definitely check out Professor Galloway's videos 463 00:25:04,720 --> 00:25:10,240 Speaker 1: on YouTube. They're incredibly informative and often entertaining. A line 464 00:25:10,280 --> 00:25:12,560 Speaker 1: you said not too long ago I thought was fascinating 465 00:25:12,800 --> 00:25:17,760 Speaker 1: is advertising is a tax on the poor? Explain so 466 00:25:18,359 --> 00:25:22,399 Speaker 1: effectively technology is allowing us to opt out advertising. Um. 467 00:25:22,760 --> 00:25:24,360 Speaker 1: I love modern family. I don't know if you watch 468 00:25:24,400 --> 00:25:27,439 Speaker 1: Modern shortly, but I now downloaded from my tunes for 469 00:25:28,200 --> 00:25:30,520 Speaker 1: even though I could download it as quickly from ABC 470 00:25:30,800 --> 00:25:32,959 Speaker 1: dot com, because ABC dot com makes me watch nine 471 00:25:32,960 --> 00:25:35,680 Speaker 1: minutes of commercials. I think just as we become numb 472 00:25:35,720 --> 00:25:38,800 Speaker 1: to mass shootings in the US, we become numb to advertising. 473 00:25:38,840 --> 00:25:41,800 Speaker 1: I think advertising is so ubiquitous but at the same 474 00:25:41,840 --> 00:25:45,440 Speaker 1: time so terrible. We were talking about age. I'm gonna 475 00:25:45,640 --> 00:25:47,200 Speaker 1: I've worked out my whole life. I'm at an age 476 00:25:47,200 --> 00:25:49,480 Speaker 1: where I can no longer to impact sports when I'm swimming, 477 00:25:50,160 --> 00:25:52,879 Speaker 1: and swimming is typically the first few minutes are shocked 478 00:25:52,920 --> 00:25:54,560 Speaker 1: your system, no fun. I'm not gonna be able to 479 00:25:54,600 --> 00:25:56,000 Speaker 1: do this very long. Then you get into a rhythm 480 00:25:56,040 --> 00:25:58,440 Speaker 1: and you get gone. I think great storytelling on television 481 00:25:58,520 --> 00:26:00,639 Speaker 1: is like that, where it takes a while, sometimes two 482 00:26:00,760 --> 00:26:03,720 Speaker 1: or three episodes into the season to really get into it. 483 00:26:03,760 --> 00:26:06,880 Speaker 1: I find I'm just finally starting to get into season six. 484 00:26:06,960 --> 00:26:10,159 Speaker 1: I think it is of Homeland. I equate advertising to 485 00:26:10,280 --> 00:26:12,520 Speaker 1: your first eleven minutes in the pool and then someone 486 00:26:12,600 --> 00:26:15,960 Speaker 1: takes an enormous dump in the pool and they it's shocking, 487 00:26:16,119 --> 00:26:19,840 Speaker 1: it's out of character, it's it's disturbing. You have to 488 00:26:19,880 --> 00:26:22,119 Speaker 1: stop swimming and listen to and clean it up for 489 00:26:22,160 --> 00:26:25,880 Speaker 1: two minutes. That is advertising. So technology is allowing us 490 00:26:25,880 --> 00:26:27,960 Speaker 1: to opt out. You're gonna have the New York Times 491 00:26:28,000 --> 00:26:30,879 Speaker 1: dot com without advertising soon. And the reality is they 492 00:26:30,920 --> 00:26:33,520 Speaker 1: don't get that much money from you. It is such 493 00:26:33,560 --> 00:26:35,520 Speaker 1: a game of scale. The New York Times only gets 494 00:26:35,520 --> 00:26:38,040 Speaker 1: two dollars and seventy cents a year for littering that 495 00:26:38,040 --> 00:26:41,000 Speaker 1: that gorgeous journalism with all sorts of ads. Modern Family 496 00:26:41,040 --> 00:26:45,240 Speaker 1: only gets fifty five cents an episode per viewer. Business 497 00:26:45,240 --> 00:26:49,600 Speaker 1: Insider Barry only get sixty five cents a year from 498 00:26:49,640 --> 00:26:53,920 Speaker 1: making you endure all those irrelevant, obsolete and obtuse ads 499 00:26:53,920 --> 00:26:57,359 Speaker 1: that slow the load time. Advertising is becoming attacks the 500 00:26:57,400 --> 00:27:00,680 Speaker 1: poor and the technologically illiterate pay. So does that mean 501 00:27:00,760 --> 00:27:04,200 Speaker 1: to companies like Google and Facebook if we're just becoming 502 00:27:04,200 --> 00:27:08,199 Speaker 1: oblivious to these ads, Well, Google, you're sort of asking 503 00:27:08,200 --> 00:27:10,000 Speaker 1: for the ads. I mean, Google has the most relevant 504 00:27:10,000 --> 00:27:11,880 Speaker 1: ads in the world because you're the one saying I'm 505 00:27:11,920 --> 00:27:14,439 Speaker 1: interested in auto insurance. And then it says, all right, 506 00:27:14,480 --> 00:27:17,200 Speaker 1: these are the organic listings about insurance companies or articles 507 00:27:17,200 --> 00:27:19,760 Speaker 1: on auto insurance that have credibility of that people search for. 508 00:27:20,359 --> 00:27:22,879 Speaker 1: But along the right rail, we're gonna let auto insurance 509 00:27:22,960 --> 00:27:26,120 Speaker 1: companies advertised. So it's almost like you're asking for the advertising. 510 00:27:26,720 --> 00:27:29,639 Speaker 1: Facebook is still interruption advertising. I think they're gonna have 511 00:27:29,680 --> 00:27:31,920 Speaker 1: to get into different businesses because I do think there 512 00:27:32,000 --> 00:27:34,480 Speaker 1: is at at some point every media company is going 513 00:27:34,520 --> 00:27:38,720 Speaker 1: to have to offer a non ad supported product. But 514 00:27:38,960 --> 00:27:43,600 Speaker 1: these these companies are content is so compelling. Most probably 515 00:27:43,640 --> 00:27:47,040 Speaker 1: most successful media company in the world, uh Google, because 516 00:27:47,080 --> 00:27:48,600 Speaker 1: you've wanted the ads. I would say, the second most 517 00:27:48,600 --> 00:27:51,399 Speaker 1: successful media company in the world last thirty years, Bloomberg. 518 00:27:51,680 --> 00:27:55,000 Speaker 1: And guess what it's not outsupported, it's subscription base. A 519 00:27:55,119 --> 00:27:58,919 Speaker 1: survivability index for all media companies globally is very easy. 520 00:27:59,320 --> 00:28:01,760 Speaker 1: Take the percent into the revenues they're getting from subscription 521 00:28:01,840 --> 00:28:04,479 Speaker 1: versus advertising. The part of this house that makes a 522 00:28:04,480 --> 00:28:09,200 Speaker 1: ton of money. It's a sub subscription. So the more advertising, 523 00:28:09,280 --> 00:28:12,639 Speaker 1: the weaker the longevity. You'd rather be HBO than ESPN 524 00:28:12,720 --> 00:28:15,840 Speaker 1: right now. You reference not too long ago, The Winner 525 00:28:15,880 --> 00:28:18,200 Speaker 1: Take All Society, which was a book in the mid 526 00:28:18,320 --> 00:28:21,640 Speaker 1: nineties by Robert Frank, a prior guest on masters and business, 527 00:28:21,880 --> 00:28:23,919 Speaker 1: and essentially says, no matter where you look. You can 528 00:28:23,920 --> 00:28:25,639 Speaker 1: look in sports, you can look at actors, you can 529 00:28:25,640 --> 00:28:28,760 Speaker 1: look at music, you can look in companies. There's a 530 00:28:28,800 --> 00:28:31,760 Speaker 1: winner in a given space, and then everybody else comes 531 00:28:31,760 --> 00:28:34,439 Speaker 1: in third. What does this mean for technology? What does 532 00:28:34,440 --> 00:28:38,320 Speaker 1: this mean for content? It's dramatic, and you you do 533 00:28:38,400 --> 00:28:41,040 Speaker 1: this for a living. There are of the SMP five hundred, 534 00:28:41,600 --> 00:28:44,920 Speaker 1: there are only thirteen companies that beat the index five 535 00:28:45,000 --> 00:28:47,680 Speaker 1: years in a row. It's unbelievable. So every you know, 536 00:28:48,280 --> 00:28:50,320 Speaker 1: it's it's never been better to be a winner. And 537 00:28:50,400 --> 00:28:53,239 Speaker 1: unfortunately we have this lottery economy because those companies get 538 00:28:53,280 --> 00:28:56,880 Speaker 1: a tremendous amount of heat in advertising and publicity. We 539 00:28:56,960 --> 00:28:59,920 Speaker 1: assume there are more winners than there are now. The 540 00:29:00,000 --> 00:29:03,160 Speaker 1: winners are enormous. You hit it, hit it big. It's 541 00:29:03,160 --> 00:29:05,920 Speaker 1: never it's never been a better time to remark, be remarkable. 542 00:29:05,960 --> 00:29:09,440 Speaker 1: Access to global markets, the ability to scale your intellectual property, 543 00:29:09,800 --> 00:29:12,400 Speaker 1: the ability for good products and good people to get 544 00:29:12,400 --> 00:29:14,600 Speaker 1: it out there on whether it's linked In or Facebook 545 00:29:14,720 --> 00:29:18,160 Speaker 1: or just consumer discovery. There's never been a worse time 546 00:29:18,200 --> 00:29:20,760 Speaker 1: to be good. You know, It's the way I think 547 00:29:20,800 --> 00:29:22,240 Speaker 1: of it is. When I got out of business school, 548 00:29:22,280 --> 00:29:24,920 Speaker 1: we all made eighty five thousand dollars and some made 549 00:29:24,960 --> 00:29:28,320 Speaker 1: seventy and some made a hundred. But now in my class, 550 00:29:28,360 --> 00:29:31,000 Speaker 1: I teach two classes a hundred twenty kids, I can 551 00:29:31,000 --> 00:29:32,440 Speaker 1: tell you there's gonna be a billionaire in one of 552 00:29:32,440 --> 00:29:35,080 Speaker 1: my classes tonight. One of the things you said was 553 00:29:35,120 --> 00:29:37,680 Speaker 1: that it's never been easier. I'm gonna just keep throwing 554 00:29:37,720 --> 00:29:40,400 Speaker 1: your own clues. It's never been easier to be a 555 00:29:40,400 --> 00:29:43,480 Speaker 1: billionaire in this society, and it's never been harder to 556 00:29:43,600 --> 00:29:47,200 Speaker 1: become a millionaire. The compact is breaking down. You go 557 00:29:47,320 --> 00:29:49,480 Speaker 1: to undergrad you study hard, you got a good job. 558 00:29:49,520 --> 00:29:52,200 Speaker 1: You got to graduate school. You're a good citizen. You 559 00:29:52,280 --> 00:29:55,400 Speaker 1: work hard, you get the credentials, you you you get 560 00:29:55,480 --> 00:29:59,680 Speaker 1: a partner that's also, you know, a contributor to Economically, 561 00:29:59,760 --> 00:30:01,680 Speaker 1: it's not unreasonable to think you could save a million 562 00:30:01,720 --> 00:30:05,200 Speaker 1: bucks over twenty thirty four years and retire a millionaire. 563 00:30:05,760 --> 00:30:07,640 Speaker 1: That's getting harder and harder to do. But at the 564 00:30:07,680 --> 00:30:12,240 Speaker 1: same time, everyone has an outside shot at becoming part 565 00:30:12,240 --> 00:30:16,760 Speaker 1: of something unbelievable in becoming a billionaire. The other kids 566 00:30:16,760 --> 00:30:18,920 Speaker 1: in my class, I think there's gonna be a decent, 567 00:30:19,120 --> 00:30:22,200 Speaker 1: non zero percentage of my class that's going to end 568 00:30:22,280 --> 00:30:26,800 Speaker 1: up getting unlucky, getting getting having some dents in their 569 00:30:26,880 --> 00:30:28,760 Speaker 1: career background, which, by the way, they won't be able 570 00:30:28,800 --> 00:30:33,120 Speaker 1: to gloss over because LinkedIn creates MLISS transparency and will 571 00:30:33,160 --> 00:30:36,760 Speaker 1: be excluded from quote unquote the information economy, and will 572 00:30:36,880 --> 00:30:41,800 Speaker 1: end up living with their parents until they're fifty or sixty. 573 00:30:42,640 --> 00:30:45,560 Speaker 1: We are we are entering an economy where it's winner 574 00:30:45,560 --> 00:30:48,800 Speaker 1: take all, and we don't have you know, we don't 575 00:30:48,800 --> 00:30:51,680 Speaker 1: believe an income distribution. We liked because there's some very 576 00:30:51,680 --> 00:30:56,280 Speaker 1: well advertised success stories. People would rather everybody if people 577 00:30:56,320 --> 00:30:59,400 Speaker 1: play the lottery because it's statistically as bad for us. 578 00:30:59,440 --> 00:31:01,840 Speaker 1: We know it's not good, but hey, baby, my numbers 579 00:31:01,840 --> 00:31:05,240 Speaker 1: are gonna win. My wife teaches fashion illustration and designed 580 00:31:05,320 --> 00:31:08,760 Speaker 1: to high school students, and in the high school they 581 00:31:08,880 --> 00:31:13,200 Speaker 1: actually when they're doing career canceling with these kids, warn 582 00:31:13,280 --> 00:31:16,480 Speaker 1: them you anything you put on Facebook, anything you put 583 00:31:16,480 --> 00:31:19,760 Speaker 1: on Instagram, anything you put on Twitter is part of 584 00:31:19,760 --> 00:31:24,360 Speaker 1: your permanent record, and you're affecting your career chances ten, twenty, 585 00:31:24,480 --> 00:31:26,960 Speaker 1: thirty years down the road. This stuff never goes away. 586 00:31:27,000 --> 00:31:31,080 Speaker 1: It's a new credit score. It's unbelievable. Um let's talk. 587 00:31:31,120 --> 00:31:33,920 Speaker 1: Since I mentioned Twitter, let's talk about Twitter another quote 588 00:31:33,920 --> 00:31:37,200 Speaker 1: of yours. A good board cannot save a bad company, 589 00:31:37,240 --> 00:31:40,440 Speaker 1: but a bad board can ruin a good company. What 590 00:31:40,440 --> 00:31:45,000 Speaker 1: what's the problem with Twitter? A negligent board? Unforgivable the 591 00:31:45,040 --> 00:31:48,840 Speaker 1: fact that they've decided that, whatever it is, two thousand employees, 592 00:31:48,960 --> 00:31:51,840 Speaker 1: a great product should be subject or should be led 593 00:31:51,840 --> 00:31:55,000 Speaker 1: by a part time employee needing the ceo CEO and 594 00:31:55,080 --> 00:31:58,120 Speaker 1: I don't know him. Uh my, he sounds like a 595 00:31:58,120 --> 00:32:01,560 Speaker 1: product fishionary. But to say that a company is complicated 596 00:32:01,560 --> 00:32:04,920 Speaker 1: and environment as competitive, where as many people, uh the 597 00:32:04,920 --> 00:32:06,520 Speaker 1: way they have as many investors, where they have as 598 00:32:06,560 --> 00:32:08,800 Speaker 1: many people trying to make a living from the fortunes 599 00:32:08,880 --> 00:32:11,840 Speaker 1: or misfortune of Twitter, to decide that a part time 600 00:32:11,960 --> 00:32:14,280 Speaker 1: CEO is the right guy, how do you say to 601 00:32:14,320 --> 00:32:16,600 Speaker 1: the rest of the management team, by the way, almost 602 00:32:16,640 --> 00:32:19,840 Speaker 1: all of whom have left. This thing is like rats 603 00:32:19,840 --> 00:32:22,000 Speaker 1: off a ship right now. How do you say to them, 604 00:32:22,400 --> 00:32:24,680 Speaker 1: this guy at twenty five hours a week is better 605 00:32:24,720 --> 00:32:27,200 Speaker 1: than you at fifty hours a week, and it's such 606 00:32:27,200 --> 00:32:30,800 Speaker 1: a great platform, and it's a fantastic product. You you 607 00:32:31,080 --> 00:32:33,600 Speaker 1: literally have negligence on behalf of the board to put 608 00:32:33,680 --> 00:32:36,440 Speaker 1: up with this. It's part of our idolatry of innovators. 609 00:32:36,640 --> 00:32:38,800 Speaker 1: A young guy who's very impressive shows up in a 610 00:32:38,840 --> 00:32:41,520 Speaker 1: black turtle knock neck and they think we've reincarnated Steve 611 00:32:41,600 --> 00:32:47,200 Speaker 1: Jobs and and they it is very very dangerous strategy 612 00:32:47,280 --> 00:32:49,640 Speaker 1: to compare anyone to Steve Jobs and assuming it's gonna 613 00:32:49,680 --> 00:32:53,160 Speaker 1: happen again, so we end up, like in an abusive relationship, 614 00:32:53,240 --> 00:32:57,160 Speaker 1: we end up taking abuse that we shouldn't. It's it's ridiculous. 615 00:32:57,200 --> 00:32:59,959 Speaker 1: He's gonna go down. He's gonna go down as one 616 00:33:00,000 --> 00:33:03,000 Speaker 1: of the worst CEOs in tech. And it's not his fault. 617 00:33:03,040 --> 00:33:05,920 Speaker 1: It's his board's fault. Boards have a fiduciare responsibility. The 618 00:33:05,960 --> 00:33:08,680 Speaker 1: board of Twitter is negligent. We have been speaking with 619 00:33:08,680 --> 00:33:12,080 Speaker 1: Professor Scott Galloway of n y U Stern. If you 620 00:33:12,200 --> 00:33:15,360 Speaker 1: enjoy this conversation, be sure and check out our podcast extras, 621 00:33:15,360 --> 00:33:18,360 Speaker 1: where we keep the tape rolling and continue chatting about 622 00:33:18,400 --> 00:33:22,600 Speaker 1: all things digital. We love your comment, feedback and suggestions. 623 00:33:22,600 --> 00:33:26,080 Speaker 1: Please write to us at m IB podcast at Bloomberg 624 00:33:26,120 --> 00:33:29,000 Speaker 1: dot net. Check out my daily column on Bloomberg View 625 00:33:29,040 --> 00:33:32,520 Speaker 1: dot com. Follow me on Twitter at rit Halts. I'm 626 00:33:32,600 --> 00:33:36,760 Speaker 1: Barry Hults. You're listening to Masters in Business on Bloomberg Radio. 627 00:33:37,280 --> 00:33:39,680 Speaker 1: Hey guys, let me ask you a question. Do you 628 00:33:39,720 --> 00:33:43,240 Speaker 1: have trouble finding dress shirts that fit well? Thanks to 629 00:33:43,320 --> 00:33:48,200 Speaker 1: proper Cloth, ordering custom shirts has never been easier. At 630 00:33:48,240 --> 00:33:52,480 Speaker 1: proper cloth dot com, you can literally order a high quality, 631 00:33:53,000 --> 00:33:57,240 Speaker 1: perfect fitting custom shirt in less than five minutes. Create 632 00:33:57,280 --> 00:34:00,800 Speaker 1: your custom size by answering just tens and book questions, 633 00:34:01,400 --> 00:34:04,320 Speaker 1: no need for measuring tape or trips to the tailor. 634 00:34:04,920 --> 00:34:09,320 Speaker 1: Perfect fit is guaranteed. Remakes are completely free, and expert 635 00:34:09,360 --> 00:34:13,440 Speaker 1: staff are standing by to help. For premium quality, perfect 636 00:34:13,440 --> 00:34:19,080 Speaker 1: fitting shirts. Visit proper cloth dot com Custom shirts made smarter. 637 00:34:20,080 --> 00:34:23,480 Speaker 1: Welcome to the podcast, Professor Gallie, Thank you so much 638 00:34:23,880 --> 00:34:26,120 Speaker 1: for being Scott. I don't know what the hell'll call you. 639 00:34:26,200 --> 00:34:31,560 Speaker 1: Scott's good. During the break, we were talking about what 640 00:34:31,760 --> 00:34:35,239 Speaker 1: happened to comments in general, and I said, when I 641 00:34:35,280 --> 00:34:37,760 Speaker 1: was writing Bail Out Nation, I would put a post 642 00:34:37,840 --> 00:34:41,479 Speaker 1: up online do five hundred to seven hundred words. People 643 00:34:41,480 --> 00:34:45,520 Speaker 1: would give me comments, suggestions, ideas, sources. I was writing 644 00:34:45,520 --> 00:34:48,799 Speaker 1: that in real time relative to the crisis. I mean 645 00:34:48,880 --> 00:34:53,600 Speaker 1: the was due August two tho eight, and then that 646 00:34:53,640 --> 00:34:59,160 Speaker 1: weekends was do all hell broke loose? And so it 647 00:34:59,200 --> 00:35:01,759 Speaker 1: got extended to December thirty first, but I'm writing it 648 00:35:01,800 --> 00:35:06,280 Speaker 1: in real time. My readers are really my co authors. 649 00:35:06,320 --> 00:35:10,040 Speaker 1: They did a tremendous amount of work. You publish a ton, 650 00:35:10,239 --> 00:35:13,239 Speaker 1: especially on YouTube. What's going on with some of the 651 00:35:13,239 --> 00:35:17,920 Speaker 1: comments on on YouTube? What is that? Like? Them are 652 00:35:17,960 --> 00:35:21,160 Speaker 1: really supportive, interesting dialogue. The comments when they don't agree 653 00:35:21,160 --> 00:35:23,800 Speaker 1: with you are generally respectful, but that two or three 654 00:35:23,800 --> 00:35:27,680 Speaker 1: percent can be pretty rattling. And everybody I like to 655 00:35:27,680 --> 00:35:29,560 Speaker 1: put up this persona that, Oh, I don't care, I 656 00:35:29,600 --> 00:35:32,719 Speaker 1: can take it, I don't care what other people think. Yeah, 657 00:35:32,800 --> 00:35:35,320 Speaker 1: and it rattles me some of you when people really 658 00:35:35,400 --> 00:35:38,360 Speaker 1: say these incredibly person and what's weird? Does some of 659 00:35:38,360 --> 00:35:40,520 Speaker 1: them seem to research you and try and find something 660 00:35:40,560 --> 00:35:43,560 Speaker 1: that's gonna gonna upset you or even even frighten you. 661 00:35:43,640 --> 00:35:47,520 Speaker 1: So there's an element of it that's really disturbing. What's interesting, though, 662 00:35:47,560 --> 00:35:49,520 Speaker 1: is that if you think about that, the notion of 663 00:35:49,600 --> 00:35:53,439 Speaker 1: identity and that is Facebook forces you to say who 664 00:35:53,480 --> 00:35:56,359 Speaker 1: you are in some feature and it's created, I think, 665 00:35:56,400 --> 00:35:59,000 Speaker 1: a more civil platform. And even when you think about 666 00:35:59,040 --> 00:36:01,000 Speaker 1: the power of identity or around Uber, you wouldn't get 667 00:36:01,000 --> 00:36:03,000 Speaker 1: in the back seat of a driver that hadn't been 668 00:36:03,680 --> 00:36:06,000 Speaker 1: seeing his or her face makes me feel more comfortable, 669 00:36:06,040 --> 00:36:08,000 Speaker 1: and they wouldn't likely let a stranger get in the 670 00:36:08,000 --> 00:36:10,520 Speaker 1: back seat that they couldn't track down with their credit 671 00:36:10,560 --> 00:36:13,680 Speaker 1: card number or their identity. So this notion of identity 672 00:36:13,760 --> 00:36:17,200 Speaker 1: as it relates to Facebook, Uber and even Airbnb, I 673 00:36:17,239 --> 00:36:20,239 Speaker 1: would argue that the identity technology is really what's made 674 00:36:20,239 --> 00:36:23,080 Speaker 1: air and b Airbnb a twenty five or thirty billion 675 00:36:23,120 --> 00:36:26,680 Speaker 1: dollar company or value company is a really powerful notion 676 00:36:26,680 --> 00:36:28,320 Speaker 1: in the Internet age. But I think it's good that 677 00:36:28,480 --> 00:36:32,040 Speaker 1: people that platforms decide to force people to say this 678 00:36:32,120 --> 00:36:34,480 Speaker 1: is who I am, and it creates a more civil 679 00:36:34,560 --> 00:36:37,840 Speaker 1: environment because all of a sudden people turned very mean online. 680 00:36:38,000 --> 00:36:41,480 Speaker 1: Your colleague and n y U are run Sunda. His 681 00:36:41,600 --> 00:36:45,640 Speaker 1: book on the sharing economy, goes over how originally the 682 00:36:45,680 --> 00:36:50,319 Speaker 1: eBay rating system companies like Airbnb and you Uber, and 683 00:36:50,320 --> 00:36:52,200 Speaker 1: I thank you. I should have referenced him my whole 684 00:36:52,560 --> 00:36:55,880 Speaker 1: song I just busted into around identity. I was was 685 00:36:55,960 --> 00:36:58,400 Speaker 1: ip theft from Professor cinder Rog and I got it 686 00:36:58,440 --> 00:37:02,040 Speaker 1: from a roun so to friends. I absolutely was ripped 687 00:37:02,080 --> 00:37:04,919 Speaker 1: off his comments there. I use n y U as 688 00:37:05,000 --> 00:37:09,520 Speaker 1: a as my research bench. I think I've had six 689 00:37:09,560 --> 00:37:11,879 Speaker 1: different professors from n y U, and if you had 690 00:37:11,880 --> 00:37:15,760 Speaker 1: in Columbia, I think we're up to ten the academic 691 00:37:16,120 --> 00:37:20,480 Speaker 1: intellectual capital in New York with Wharton an hour that 692 00:37:20,520 --> 00:37:23,279 Speaker 1: way and Yale an hour that way. Is just it's 693 00:37:23,280 --> 00:37:26,000 Speaker 1: an astonishing amount of and we have to get you 694 00:37:26,040 --> 00:37:28,480 Speaker 1: out to one of the the dinners we have with 695 00:37:28,600 --> 00:37:32,960 Speaker 1: various Nobel Prize people. UM. So, the other thing I 696 00:37:33,000 --> 00:37:39,360 Speaker 1: wanted to ask you about, relevant to UM, relevant to 697 00:37:39,440 --> 00:37:44,080 Speaker 1: the to the comments situation is what does that have 698 00:37:44,360 --> 00:37:49,920 Speaker 1: to with Facebook? Since they're making you identify who you 699 00:37:49,960 --> 00:37:54,279 Speaker 1: are instead of having really vociferous comments, you end up 700 00:37:54,320 --> 00:37:59,040 Speaker 1: with fake news that gets passed along repeatedly. That seems 701 00:37:59,080 --> 00:38:04,000 Speaker 1: to be the Facebook equivalent of the the angry egg 702 00:38:04,200 --> 00:38:09,279 Speaker 1: on Twitter, UM or just the insane comments on YouTube. Well, 703 00:38:09,560 --> 00:38:12,400 Speaker 1: the scandal of we talked about Echo being the product 704 00:38:12,480 --> 00:38:14,680 Speaker 1: of two thousand and sixteen. The scandal of two thousand 705 00:38:14,719 --> 00:38:17,000 Speaker 1: and sixteen, and we just don't know it yet was 706 00:38:17,040 --> 00:38:19,239 Speaker 1: fake news. It's going to get It's going to get 707 00:38:19,280 --> 00:38:21,920 Speaker 1: bigger and bigger in terms of the damage we we 708 00:38:22,040 --> 00:38:26,040 Speaker 1: perceived or that has actually happened to society. Of our 709 00:38:26,080 --> 00:38:29,839 Speaker 1: news is now digested and absorbed from social media. Eight 710 00:38:29,960 --> 00:38:31,840 Speaker 1: percent of the news coming out of social media the 711 00:38:31,840 --> 00:38:34,640 Speaker 1: week running up to the election was fake news. And 712 00:38:34,680 --> 00:38:36,640 Speaker 1: one of the issues I personally have a Google and 713 00:38:36,840 --> 00:38:39,080 Speaker 1: Facebook is this notion that if you look at their 714 00:38:39,120 --> 00:38:42,600 Speaker 1: vocabulary and words matter, they're trying to avoid the word 715 00:38:42,680 --> 00:38:46,239 Speaker 1: media to describe their companies are saying their platforms. And 716 00:38:46,239 --> 00:38:49,360 Speaker 1: the analogy I would use Barry is that if McDonald said, alright, 717 00:38:49,360 --> 00:38:51,520 Speaker 1: eight percent of the beef we're serving you is fake 718 00:38:51,560 --> 00:38:54,000 Speaker 1: and giving you encephalitis, and as a result, you're making 719 00:38:54,080 --> 00:38:57,640 Speaker 1: bad decisions. We're not responsible for it because we're not 720 00:38:57,680 --> 00:39:00,919 Speaker 1: a fast food restaurant. We're a fast food plot form. 721 00:39:00,960 --> 00:39:04,000 Speaker 1: And I think these companies trying to absolve themselves of 722 00:39:04,040 --> 00:39:06,640 Speaker 1: the responsibility and the damage they've done by calling themselves 723 00:39:06,680 --> 00:39:09,840 Speaker 1: platforms and not media companies. By the way their media companies, 724 00:39:09,840 --> 00:39:13,040 Speaker 1: they create content, they sell advertising against that content. Boom, 725 00:39:13,080 --> 00:39:16,040 Speaker 1: you're a media company. But they need to do a 726 00:39:16,200 --> 00:39:19,880 Speaker 1: quarter of the fact checking and the resource investment that 727 00:39:19,960 --> 00:39:22,319 Speaker 1: the New York Times and Bloomberg making ensuring that what 728 00:39:22,360 --> 00:39:26,120 Speaker 1: we are digesting is not fake and making us sick. 729 00:39:26,440 --> 00:39:30,320 Speaker 1: This is the scandal of two thousand and sixteen, hugely 730 00:39:30,400 --> 00:39:32,840 Speaker 1: damaging to our society. There was just an article in 731 00:39:32,880 --> 00:39:35,879 Speaker 1: the New York Times this weekend about you know, there's 732 00:39:35,880 --> 00:39:39,879 Speaker 1: all sorts of of ransomware. Um, not so much where 733 00:39:39,880 --> 00:39:42,439 Speaker 1: they're taking over your computer, but there are people who 734 00:39:42,440 --> 00:39:46,799 Speaker 1: have figured out how to game Google search algorithms, and 735 00:39:46,880 --> 00:39:48,880 Speaker 1: so they dig up You want to talk about digging 736 00:39:48,960 --> 00:39:53,720 Speaker 1: up stuff? They dig up from people because it's public. 737 00:39:53,840 --> 00:39:56,080 Speaker 1: We've moved all this stuff from the from the government 738 00:39:56,120 --> 00:40:02,080 Speaker 1: sphere to the public sphere. Uh, mug shots. Someone's arrested 739 00:40:02,120 --> 00:40:05,719 Speaker 1: forty years ago, thirty years ago for driving under the influence. 740 00:40:05,760 --> 00:40:08,040 Speaker 1: That mug shot is there. It shows up in the 741 00:40:08,120 --> 00:40:11,799 Speaker 1: first page of Google searches and Google and so it's 742 00:40:11,840 --> 00:40:15,279 Speaker 1: not It says it's there for information purposes. They will 743 00:40:15,360 --> 00:40:19,120 Speaker 1: take the mug shot down for a fee and that 744 00:40:19,280 --> 00:40:24,880 Speaker 1: sort of um, blackmail shouldn't be. Google has a responsibility 745 00:40:24,880 --> 00:40:27,759 Speaker 1: for that. Well, I do think that is different because 746 00:40:27,760 --> 00:40:29,600 Speaker 1: you canna make a bomb threat with the phone and 747 00:40:29,680 --> 00:40:32,160 Speaker 1: I don't think the phone company is liable, but when 748 00:40:32,680 --> 00:40:36,160 Speaker 1: when the search algorithm. But but I do think it's different. 749 00:40:36,200 --> 00:40:40,000 Speaker 1: When Facebook is is got eighty percent of the content 750 00:40:40,040 --> 00:40:44,120 Speaker 1: flowing through its platform is fake news? Is it that much? 751 00:40:44,239 --> 00:40:47,800 Speaker 1: Is pily The week leading up to the election about 752 00:40:48,440 --> 00:40:50,680 Speaker 1: the news coming out on the candidates was quote unquote 753 00:40:50,680 --> 00:40:54,960 Speaker 1: fake news. The respective parties turned up turned up the volume. 754 00:40:55,000 --> 00:40:58,360 Speaker 1: I think at that point when they're when they're their 755 00:40:58,440 --> 00:41:02,880 Speaker 1: their media channels, their platform have literally become totally toxic 756 00:41:02,920 --> 00:41:06,960 Speaker 1: and totally misleading, I think they have a responsibility to 757 00:41:07,000 --> 00:41:08,680 Speaker 1: make a statement. And what they've done so far is 758 00:41:08,680 --> 00:41:12,279 Speaker 1: they're so remiss to alienate anyone on the far left 759 00:41:12,360 --> 00:41:15,000 Speaker 1: or the far right, because, as Michael Jordan's said, Republicans 760 00:41:15,040 --> 00:41:19,239 Speaker 1: buy shoes to everybody watches ads, so we don't care 761 00:41:19,280 --> 00:41:22,160 Speaker 1: how crazy you are. We want We don't want to 762 00:41:22,160 --> 00:41:25,799 Speaker 1: alien anybody, and we want the entire market. We want 763 00:41:25,840 --> 00:41:29,480 Speaker 1: everyone watching on on our platform. And it's sort of 764 00:41:29,600 --> 00:41:31,200 Speaker 1: enough is enough. They're gonna have to come up with 765 00:41:31,200 --> 00:41:34,600 Speaker 1: some standards, kick some people off, squelt some content, be acute, 766 00:41:34,600 --> 00:41:37,160 Speaker 1: and they'll be accused of censorship. But they're gonna have 767 00:41:37,239 --> 00:41:39,400 Speaker 1: to acting the same way a lot of these media companies, 768 00:41:39,440 --> 00:41:42,120 Speaker 1: including Bloomberg, Herst kind of out there's gonna have to 769 00:41:42,160 --> 00:41:45,440 Speaker 1: be something resembling editorial standards. You need to lose the 770 00:41:45,480 --> 00:41:49,440 Speaker 1: ten percent that's toxic. And otherwise they're from a business perspective, 771 00:41:49,480 --> 00:41:53,440 Speaker 1: they're putting the at risk the people they're monetizing it. 772 00:41:53,560 --> 00:41:57,440 Speaker 1: Once people come to realize, hey, this platform is a disaster. 773 00:41:57,640 --> 00:42:01,080 Speaker 1: I think that's been Twitter's big mistake, and they're just 774 00:42:01,280 --> 00:42:06,160 Speaker 1: now taking steps to not so much kick people off 775 00:42:06,160 --> 00:42:09,520 Speaker 1: the platform. The latest thing I've been reading about is 776 00:42:09,560 --> 00:42:11,960 Speaker 1: if you're identified as a troll or someone who is 777 00:42:12,000 --> 00:42:15,680 Speaker 1: harassing people because they're gay or black, or Jewish or 778 00:42:15,680 --> 00:42:19,239 Speaker 1: what have you or Muslim um, they're basically not gonna 779 00:42:19,320 --> 00:42:22,320 Speaker 1: let you put names in tweets, so you'll be able 780 00:42:22,360 --> 00:42:26,120 Speaker 1: to harass people without identifying them. And it's it's just 781 00:42:26,200 --> 00:42:27,520 Speaker 1: lost in the breeze and no one will see it 782 00:42:27,600 --> 00:42:29,920 Speaker 1: or hear it. But and this is this is you know, 783 00:42:30,360 --> 00:42:32,840 Speaker 1: this gets me to trouble. But effectively, most of the 784 00:42:32,920 --> 00:42:36,600 Speaker 1: leadership of these companies wrap themselves in a progressive blanket 785 00:42:37,400 --> 00:42:39,279 Speaker 1: to a certain extent because a I think they have 786 00:42:39,400 --> 00:42:42,440 Speaker 1: personally those viewpoints. But also it's awfully convenient because as 787 00:42:42,440 --> 00:42:46,880 Speaker 1: a whole, progressives are perceived as being really nice but weak, 788 00:42:47,440 --> 00:42:50,000 Speaker 1: and conservatives are seen as being smart but mean. And 789 00:42:50,040 --> 00:42:52,040 Speaker 1: if a smart but mean person was running the most 790 00:42:52,040 --> 00:42:54,600 Speaker 1: powerful company in the world Google, Facebook, Amazon, or Apple. 791 00:42:54,680 --> 00:42:58,080 Speaker 1: Regulators would step in early, so it's convenient for them 792 00:42:58,120 --> 00:43:00,799 Speaker 1: to be seen as kind of nice and cuddly Granola. 793 00:43:01,000 --> 00:43:02,839 Speaker 1: But the reality is, I don't think you can really 794 00:43:02,840 --> 00:43:05,080 Speaker 1: claim to be a progressive if the company that you 795 00:43:05,120 --> 00:43:07,440 Speaker 1: have a lot of power up has become weaponized by 796 00:43:07,440 --> 00:43:11,120 Speaker 1: the far right. So I see hypocrisy everywhere everywhere here. 797 00:43:11,360 --> 00:43:17,680 Speaker 1: These companies, these these individuals prostitute the progressive values in 798 00:43:17,800 --> 00:43:20,160 Speaker 1: order to soften the image of their companies such that 799 00:43:20,239 --> 00:43:23,920 Speaker 1: they avoid regulatory scrutiny. At the same time they have 800 00:43:23,960 --> 00:43:26,319 Speaker 1: allowed their companies to be weaponized by the far right. 801 00:43:26,480 --> 00:43:29,239 Speaker 1: I find it. I find contradiction in it everywhere I 802 00:43:29,440 --> 00:43:31,440 Speaker 1: use um. I've done a lot of work and a 803 00:43:31,440 --> 00:43:34,200 Speaker 1: lot of writing on minimum wage, and I've been talking 804 00:43:34,239 --> 00:43:37,200 Speaker 1: about we have this grand experiment going on in Seattle, 805 00:43:37,239 --> 00:43:40,960 Speaker 1: in San Francisco and other cities that have been aggressively 806 00:43:41,080 --> 00:43:45,080 Speaker 1: raising the minimum wage. Google what is the minimum wage 807 00:43:45,080 --> 00:43:47,879 Speaker 1: for Seattle and it comes up twenty dollars an hour, 808 00:43:48,000 --> 00:43:51,000 Speaker 1: which isn't true. That's in five years. It's twenty dollars 809 00:43:51,040 --> 00:43:53,560 Speaker 1: an hour. If you're this large, if you're this it's 810 00:43:53,719 --> 00:43:57,279 Speaker 1: fourteen or twelve or fifteen, depending on which city you're 811 00:43:57,320 --> 00:44:00,680 Speaker 1: you're talking about. And yet you know Google tries to 812 00:44:00,719 --> 00:44:04,400 Speaker 1: do the first slot is the answer to your question 813 00:44:04,719 --> 00:44:08,520 Speaker 1: as opposed to sources with the answer, And what's taken 814 00:44:08,560 --> 00:44:12,120 Speaker 1: place is that it's actually shows up as twenty dollars 815 00:44:12,160 --> 00:44:15,239 Speaker 1: an hour, which is wrong. Today the minimum wage in 816 00:44:15,320 --> 00:44:18,759 Speaker 1: Seattle is fifteen an hour. So people have figured out 817 00:44:18,800 --> 00:44:23,239 Speaker 1: how to game Google for ideological reasons. There's you know, 818 00:44:23,280 --> 00:44:27,000 Speaker 1: you can't organize the earth information if the information you're 819 00:44:27,040 --> 00:44:30,040 Speaker 1: providing is inaccurate, so they need to get on top 820 00:44:30,080 --> 00:44:32,840 Speaker 1: of that. Well that that's the exact point you're talking about, 821 00:44:32,960 --> 00:44:36,120 Speaker 1: the paid versus organic listings, and organic listings do have 822 00:44:36,280 --> 00:44:40,400 Speaker 1: some sort of credibility or or check. And again someone 823 00:44:40,440 --> 00:44:44,319 Speaker 1: has someone has game that, and Google would rather not 824 00:44:44,360 --> 00:44:48,239 Speaker 1: do anything, nor Facebook to suppress anybody from any viewpoint 825 00:44:48,680 --> 00:44:52,319 Speaker 1: around either giving them eyeballs or money. And they're going 826 00:44:52,360 --> 00:44:54,680 Speaker 1: to have to step in and say we have some standards. 827 00:44:54,760 --> 00:44:57,279 Speaker 1: It'll cost the money, but in the long run I 828 00:44:57,280 --> 00:45:00,000 Speaker 1: think they'll be better off. Well, the alternative is enough 829 00:45:00,040 --> 00:45:02,720 Speaker 1: people coming around and saying I can't trust Google anymore. 830 00:45:03,160 --> 00:45:06,000 Speaker 1: By the way, the reason Google became Google is I 831 00:45:06,080 --> 00:45:10,440 Speaker 1: can trust Google because of their crowdsourced algorithm. Their page 832 00:45:10,520 --> 00:45:13,920 Speaker 1: rank worked better than everybody else. Once it becomes clear 833 00:45:14,160 --> 00:45:17,600 Speaker 1: that too often that no longer works and you're getting 834 00:45:18,320 --> 00:45:22,360 Speaker 1: a gained answer that's inaccurate their business model. You know, 835 00:45:22,440 --> 00:45:25,480 Speaker 1: they don't have a moat. Their motive is essentially they're 836 00:45:25,520 --> 00:45:29,520 Speaker 1: better than everybody else. Once that folds away, they're in trouble. 837 00:45:29,640 --> 00:45:32,160 Speaker 1: So they should really they should protect that like the 838 00:45:32,200 --> 00:45:35,480 Speaker 1: crown jewels, and they don't. I I think you're absolutely 839 00:45:35,560 --> 00:45:38,399 Speaker 1: right there. I would argue that Google so far has 840 00:45:38,440 --> 00:45:42,799 Speaker 1: more credibility than any than any objectively evaluated entity in 841 00:45:42,840 --> 00:45:44,719 Speaker 1: the world. And we've talked about the last time I 842 00:45:44,760 --> 00:45:46,680 Speaker 1: was there. I think Google is a modern man's God 843 00:45:46,800 --> 00:45:50,279 Speaker 1: that as we become more educated and wealthier are the 844 00:45:50,360 --> 00:45:52,560 Speaker 1: number of people who attend church or or think of 845 00:45:52,600 --> 00:45:54,920 Speaker 1: religion is playing a large part of their lives decreases. 846 00:45:55,320 --> 00:45:59,000 Speaker 1: But modern day anxieties around sickness, why do bad things happen? 847 00:45:59,080 --> 00:46:02,839 Speaker 1: What happens after we die? Um, those anxieties either stay 848 00:46:02,880 --> 00:46:05,719 Speaker 1: flat or increase, So the decline in the belief or 849 00:46:05,960 --> 00:46:09,680 Speaker 1: or the ability to get comfort from religion and concert 850 00:46:09,719 --> 00:46:12,000 Speaker 1: with increasing anxiety, has created this void, and I think 851 00:46:12,040 --> 00:46:14,480 Speaker 1: Google is has filled that void. One out of five 852 00:46:14,600 --> 00:46:16,880 Speaker 1: queries to Google have never been asked before in the 853 00:46:16,920 --> 00:46:20,440 Speaker 1: history of mankind. Think about a friend or rabbi, a 854 00:46:20,520 --> 00:46:24,040 Speaker 1: priest that one out of the questions they get have 855 00:46:24,160 --> 00:46:26,560 Speaker 1: never been asked before. Because I have so much credibility Google, 856 00:46:26,600 --> 00:46:29,000 Speaker 1: Google is a modern man's god. You used to be 857 00:46:29,480 --> 00:46:32,000 Speaker 1: looked to the skies pray will my son be all right? 858 00:46:32,160 --> 00:46:35,200 Speaker 1: Now it's Google query symptoms and treatment of croup. So 859 00:46:35,280 --> 00:46:37,359 Speaker 1: now here's the problem with that? And this goes back 860 00:46:37,400 --> 00:46:40,840 Speaker 1: to them protecting the crown jewels. I've had doctors. My 861 00:46:40,920 --> 00:46:44,279 Speaker 1: favorite quote from a friend who is a doctor, what 862 00:46:44,360 --> 00:46:47,160 Speaker 1: he says all the time is, of course, your Google 863 00:46:47,400 --> 00:46:50,359 Speaker 1: searches the equivalent of seven years of medical school. It's 864 00:46:50,400 --> 00:46:54,839 Speaker 1: the same thing. So whether it's um any of the 865 00:46:54,880 --> 00:46:59,640 Speaker 1: online medical things, if if you put any if you 866 00:46:59,680 --> 00:47:02,520 Speaker 1: put any symptoms into Google, you will come up with 867 00:47:02,520 --> 00:47:05,800 Speaker 1: a list of things. And if you're a hypochondriac, Google 868 00:47:05,840 --> 00:47:09,759 Speaker 1: certainly is your your best friend. But the problem is, 869 00:47:09,920 --> 00:47:13,400 Speaker 1: I don't know how trustworthy, especially in the age not 870 00:47:13,480 --> 00:47:17,400 Speaker 1: only of of vaxer's But let's use the phrase agnetology, 871 00:47:18,000 --> 00:47:23,200 Speaker 1: culturally constructed ignorance, whether it's global warming or vaccines or work. 872 00:47:23,239 --> 00:47:25,600 Speaker 1: You way down the list of things that you know. 873 00:47:25,719 --> 00:47:28,120 Speaker 1: Nine eleven was an inside job and it's just a 874 00:47:28,200 --> 00:47:32,440 Speaker 1: run of insanity. That sort of stuff has found more 875 00:47:32,480 --> 00:47:36,680 Speaker 1: and more fertile ground to grow in in the Internet era. 876 00:47:37,080 --> 00:47:39,800 Speaker 1: There was some advantage to when there was only three 877 00:47:39,840 --> 00:47:43,000 Speaker 1: broadcast stations because that sort of junk never made it 878 00:47:43,080 --> 00:47:46,640 Speaker 1: past the gatekeepers. So did a lot of positive things 879 00:47:46,719 --> 00:47:49,439 Speaker 1: never made it past the gatekeepers. So now we have 880 00:47:49,800 --> 00:47:53,480 Speaker 1: to a fire hose, and it's becoming increasingly challenging for 881 00:47:53,480 --> 00:47:57,200 Speaker 1: people to identify what is accurate and what is false, yeah, 882 00:47:57,280 --> 00:47:59,720 Speaker 1: and and what's interesting in the face of those problems, 883 00:47:59,719 --> 00:48:03,160 Speaker 1: so Google still is the most trusted I believe it's 884 00:48:03,160 --> 00:48:07,160 Speaker 1: the most trusted entity in the world. Really, what if 885 00:48:07,239 --> 00:48:09,879 Speaker 1: you you were talking about hospital right here, right now, 886 00:48:10,000 --> 00:48:12,080 Speaker 1: all of a sudden, you get very worried about a 887 00:48:12,120 --> 00:48:16,399 Speaker 1: health do you what do you do for immediately? Well, 888 00:48:16,440 --> 00:48:19,040 Speaker 1: you you do both because you need it takes two 889 00:48:19,040 --> 00:48:21,759 Speaker 1: weeks to see the doctor unless you're you're bleeding out. 890 00:48:22,480 --> 00:48:25,040 Speaker 1: And second, the next thing you do is look for 891 00:48:25,120 --> 00:48:28,359 Speaker 1: hospitals with a specialty of what have you suspect? Well, 892 00:48:28,360 --> 00:48:30,480 Speaker 1: not even looking for a hospital, but you start trying 893 00:48:30,520 --> 00:48:34,080 Speaker 1: to self diagnose and understand more about it. I do 894 00:48:34,160 --> 00:48:37,279 Speaker 1: believe the Google has right now more authority than any 895 00:48:37,520 --> 00:48:41,800 Speaker 1: entity likely in history of mankind. That's astonishing. I only 896 00:48:41,840 --> 00:48:44,880 Speaker 1: have you for uh so many minutes left, so I 897 00:48:44,920 --> 00:48:48,640 Speaker 1: wanted to get to my favorite questions. God, I have 898 00:48:48,800 --> 00:48:50,759 Speaker 1: runs and runs of stuff that we're not going to 899 00:48:50,880 --> 00:48:56,239 Speaker 1: get to before I forget. The biggest winner of Netflix, 900 00:48:56,520 --> 00:49:00,560 Speaker 1: Netflix operating system for joy in our lives. Um you 901 00:49:00,600 --> 00:49:04,360 Speaker 1: look at in some I think that the economy is 902 00:49:04,400 --> 00:49:06,560 Speaker 1: bi for Kate. There's only two sets of winners, and 903 00:49:06,640 --> 00:49:09,279 Speaker 1: it's a small number of companies what I refer to 904 00:49:09,280 --> 00:49:12,879 Speaker 1: as Benjamin Button companies that companies at aging reverse when 905 00:49:12,880 --> 00:49:15,239 Speaker 1: you turn on ways and you use it, it gets better. 906 00:49:15,280 --> 00:49:18,400 Speaker 1: The majority of products from the economic titans of yesterday, 907 00:49:18,400 --> 00:49:22,080 Speaker 1: General Motors and Unilever. They age when I when I 908 00:49:22,160 --> 00:49:24,880 Speaker 1: used a car, when I use toothpaste, that declined and value. 909 00:49:24,960 --> 00:49:28,239 Speaker 1: The companies that are garnering the disproportionate spoils of our 910 00:49:28,280 --> 00:49:30,720 Speaker 1: modern day economy are Benjamin about the age and reverse. 911 00:49:30,760 --> 00:49:32,520 Speaker 1: Every time you do a Google search, it gets one 912 00:49:32,600 --> 00:49:35,320 Speaker 1: three billionth better the product. Every time you turn on ways, 913 00:49:35,680 --> 00:49:39,560 Speaker 1: it gets better for everybody company, right, That's right, Facebook, 914 00:49:39,600 --> 00:49:41,560 Speaker 1: every time you use it, the product gets better for 915 00:49:41,600 --> 00:49:45,080 Speaker 1: everybody else. That's one set of winners. The other set 916 00:49:45,080 --> 00:49:49,320 Speaker 1: of winners are the companies that help other companies reduce costs, 917 00:49:49,320 --> 00:49:52,759 Speaker 1: accenture most successful services company in the world. It's effectively 918 00:49:52,800 --> 00:49:57,600 Speaker 1: helping big companies cut costs, outsourcing companies helping companies cut 919 00:49:57,680 --> 00:50:01,239 Speaker 1: costs so effectively our economy. The winners are barfecating in 920 00:50:01,280 --> 00:50:03,759 Speaker 1: the companies that age in reverse or companies that take 921 00:50:03,800 --> 00:50:07,160 Speaker 1: care of the aged. You're either you're either Benjamin Button 922 00:50:07,320 --> 00:50:09,399 Speaker 1: or you're dying, or you're you're caring for the sick. 923 00:50:09,520 --> 00:50:11,440 Speaker 1: Those are the two companies that are working right now. 924 00:50:11,480 --> 00:50:15,000 Speaker 1: We began by referencing the four horsemen. It's always the 925 00:50:15,040 --> 00:50:17,879 Speaker 1: next natural question is who's the fifth? So I went 926 00:50:17,880 --> 00:50:19,839 Speaker 1: off in at Tangent there with my whole Benjamin Button wrap. 927 00:50:19,880 --> 00:50:24,320 Speaker 1: But I effectively think Netflix does take information around your viewership. 928 00:50:24,640 --> 00:50:27,200 Speaker 1: It's very simple, but it's very powerful. Last night, I'm 929 00:50:27,200 --> 00:50:30,280 Speaker 1: watching House of Cards season four, episode eight, and Netflix 930 00:50:30,320 --> 00:50:32,920 Speaker 1: is smart enough to go if Scott like season four 931 00:50:32,960 --> 00:50:35,839 Speaker 1: episode eight, we think he's gonna like season four, episode nine, 932 00:50:35,880 --> 00:50:38,200 Speaker 1: and they start auto playing it. And it sounds basic, 933 00:50:38,800 --> 00:50:41,480 Speaker 1: but it is the notion of of of an artificial 934 00:50:41,520 --> 00:50:43,359 Speaker 1: intelligence figuring out what you want. And if you look 935 00:50:43,400 --> 00:50:46,000 Speaker 1: at my home scream on Netflix, it has a bunch 936 00:50:46,000 --> 00:50:49,880 Speaker 1: of stuff I want to watch. There are now more people, 937 00:50:50,120 --> 00:50:54,520 Speaker 1: more millennials. More millennials watch Netflix or have Netflix than 938 00:50:54,560 --> 00:50:58,600 Speaker 1: have cable TV. So arguably Netflix should be worth more 939 00:50:59,239 --> 00:51:02,399 Speaker 1: then all of TV. If you think that millennials are 940 00:51:02,520 --> 00:51:04,799 Speaker 1: the generation, they have the most disposed b income, they're 941 00:51:04,800 --> 00:51:06,200 Speaker 1: the ones that are going to go into the primary 942 00:51:06,239 --> 00:51:10,080 Speaker 1: earning now. I think they do. I think also they 943 00:51:10,160 --> 00:51:14,360 Speaker 1: do a fantastic job. The iOS is our mobile system 944 00:51:14,600 --> 00:51:17,800 Speaker 1: for what i'll call the utility in our life. Amazon 945 00:51:17,920 --> 00:51:20,719 Speaker 1: is our operating system for commerce. Facebook I think it's 946 00:51:20,719 --> 00:51:23,319 Speaker 1: a little bit our operating system for loving relationships. And 947 00:51:23,360 --> 00:51:25,879 Speaker 1: I think Netflix is becoming our operating system for joy. 948 00:51:25,960 --> 00:51:27,799 Speaker 1: I think it's got an opportunity to be a two 949 00:51:27,880 --> 00:51:30,760 Speaker 1: or three D billion dollar market cap company. And Amazon 950 00:51:30,960 --> 00:51:34,880 Speaker 1: Video actually will immediately start playing the next episode and 951 00:51:34,960 --> 00:51:37,080 Speaker 1: to tell it until you tell it to stop, it'll 952 00:51:37,200 --> 00:51:39,719 Speaker 1: it'll just check right into that, all right. So let's 953 00:51:39,760 --> 00:51:43,160 Speaker 1: go into our favorite. We didn't do Biggest Losers though 954 00:51:43,239 --> 00:51:48,759 Speaker 1: biggest loser snapchats. Now we said that earlier Snapchat. You 955 00:51:48,760 --> 00:51:50,279 Speaker 1: think the I p O is going to be the 956 00:51:50,360 --> 00:51:53,680 Speaker 1: mark the high price of of Snapchat. I think I 957 00:51:53,680 --> 00:51:55,759 Speaker 1: think it'd be better for our economy if it did well, 958 00:51:55,800 --> 00:51:58,080 Speaker 1: because we need a third player in the ecosystem outside 959 00:51:58,080 --> 00:52:00,560 Speaker 1: of Google and Facebook. But I think ap chat is 960 00:52:00,600 --> 00:52:04,520 Speaker 1: gonna get public go crazy because of pent up demand 961 00:52:04,520 --> 00:52:08,400 Speaker 1: from retail investors who have been excluded from Uber and Airbnb, um, 962 00:52:08,520 --> 00:52:10,400 Speaker 1: and then I think it's gonna and then it's going 963 00:52:10,440 --> 00:52:12,399 Speaker 1: to be sort of a slow, slow moving train wreck. 964 00:52:12,600 --> 00:52:15,359 Speaker 1: Here's who I have down for your losers theme from 965 00:52:15,800 --> 00:52:19,960 Speaker 1: seventeen traditional advertisers. We talked about them. Twitter, we talked 966 00:52:19,960 --> 00:52:22,840 Speaker 1: about them, Yahoo, we talked about them. Here's when we 967 00:52:22,840 --> 00:52:27,359 Speaker 1: didn't talk about Pinterest. Why is Pinterest a loser? Fantastic, 968 00:52:27,520 --> 00:52:30,919 Speaker 1: fantastic product, not a great business. Uh, immature management team 969 00:52:30,960 --> 00:52:32,719 Speaker 1: that thinks it's in the business of art, not in 970 00:52:32,760 --> 00:52:34,640 Speaker 1: the art of business. Again, another failure on the part 971 00:52:34,680 --> 00:52:37,120 Speaker 1: of the board. And one of the things about venture 972 00:52:37,160 --> 00:52:39,120 Speaker 1: capital is if you manage to get you have an 973 00:52:39,120 --> 00:52:41,399 Speaker 1: obligation to get the highest valuation possible. But the problem 974 00:52:41,480 --> 00:52:42,959 Speaker 1: is when you raise money and I think at twelve 975 00:52:43,040 --> 00:52:46,040 Speaker 1: or thirteen billion dollar market a little rich, Well, then 976 00:52:46,080 --> 00:52:48,920 Speaker 1: you've got all these prefs um the companies should have 977 00:52:48,960 --> 00:52:51,080 Speaker 1: been bought for five billion and everybody would have done 978 00:52:51,120 --> 00:52:54,160 Speaker 1: really well. But now they convinced people invest in twelve 979 00:52:54,200 --> 00:52:56,960 Speaker 1: or thirteen, it's effectively only three or four buyers of 980 00:52:57,040 --> 00:52:59,960 Speaker 1: pinterest of all the brands we track at L two, 981 00:53:00,000 --> 00:53:03,759 Speaker 1: we don't know any actually buying advertising on Pintra. So 982 00:53:04,120 --> 00:53:05,919 Speaker 1: I think again, this is a failure of a board. 983 00:53:05,920 --> 00:53:08,320 Speaker 1: There's very few CEOs that can go from A to Z. 984 00:53:09,000 --> 00:53:11,960 Speaker 1: I think they have a genius CEO in terms of product, 985 00:53:12,120 --> 00:53:13,879 Speaker 1: he's not the guy to take it to the next level. 986 00:53:13,880 --> 00:53:15,840 Speaker 1: And the board has failed to make the hard decisions 987 00:53:15,840 --> 00:53:21,360 Speaker 1: around that management turnover. There has been an absolute uh. 988 00:53:21,440 --> 00:53:24,840 Speaker 1: The word I would want to use debacle. I was 989 00:53:24,840 --> 00:53:27,680 Speaker 1: gonna I was gonna use another term, but I was 990 00:53:27,680 --> 00:53:32,200 Speaker 1: gonna say cluster something, but cluster debacle. Cluster debacle. So yeah, 991 00:53:32,239 --> 00:53:34,120 Speaker 1: I think it's a I think it's a fantastic company. 992 00:53:34,120 --> 00:53:38,160 Speaker 1: I think it's wildly overvalued. Twitter overvalued, most overvalued company 993 00:53:38,160 --> 00:53:42,719 Speaker 1: in the world right now. We Work seventeen billion dollars. 994 00:53:42,880 --> 00:53:45,160 Speaker 1: We looked at a we Work space and it was 995 00:53:45,280 --> 00:53:48,520 Speaker 1: fantastic if I was forty years younger and in the 996 00:53:48,560 --> 00:53:52,680 Speaker 1: world of tech, these tiny little scrape great company, great concept, 997 00:53:52,840 --> 00:53:55,400 Speaker 1: might even be worth a billion dollars. But right now, 998 00:53:55,440 --> 00:53:57,000 Speaker 1: if you look at WE Work, it's trading at four 999 00:53:57,800 --> 00:54:01,000 Speaker 1: thousand dollars per customer. A little if their valuation stiff. 1000 00:54:01,239 --> 00:54:03,640 Speaker 1: If you take the majority of that WE Work buildings 1001 00:54:03,680 --> 00:54:05,640 Speaker 1: there in and you take the floor they've leased and 1002 00:54:05,640 --> 00:54:08,080 Speaker 1: put in a cool coffee bar, a great market, great concept, 1003 00:54:08,080 --> 00:54:10,520 Speaker 1: great business model, and it is a great business and 1004 00:54:10,560 --> 00:54:13,520 Speaker 1: a great business model. But that floor is now worth 1005 00:54:13,600 --> 00:54:16,960 Speaker 1: more than the entire building they're leasing that floor. So 1006 00:54:17,200 --> 00:54:19,839 Speaker 1: is it a great company, yes, is it a great idea? Yes? 1007 00:54:20,239 --> 00:54:24,399 Speaker 1: Is it worth ten to twenty of what it's worth now, yes, 1008 00:54:24,520 --> 00:54:26,680 Speaker 1: most overvalued company in the world. You know, it's the 1009 00:54:26,760 --> 00:54:29,480 Speaker 1: same thing as a Regius or there's a handful of 1010 00:54:29,520 --> 00:54:33,840 Speaker 1: companies that do the office shares. They just made it younger, hipper. 1011 00:54:33,880 --> 00:54:36,960 Speaker 1: There's a bar and a and a coffee lobby, coffee 1012 00:54:36,960 --> 00:54:39,160 Speaker 1: lounge in the ground floor. The one on Brian Park 1013 00:54:39,760 --> 00:54:43,160 Speaker 1: is funky and hip. They do a fantastic. Look. Twitter 1014 00:54:43,200 --> 00:54:45,320 Speaker 1: is an amazing company. I think it's worth a billion 1015 00:54:45,320 --> 00:54:48,160 Speaker 1: two billion dollars, which puts it at about se worth 1016 00:54:48,239 --> 00:54:51,320 Speaker 1: less than it is now. All of these companies are amazing. 1017 00:54:51,360 --> 00:54:53,440 Speaker 1: I'm not taking anything away from them. The problem is 1018 00:54:53,440 --> 00:54:56,720 Speaker 1: when you layer in their valuation, they make no sense. 1019 00:54:56,760 --> 00:54:58,920 Speaker 1: So let's talk about a couple of other things on 1020 00:54:58,960 --> 00:55:03,799 Speaker 1: your loser list. Jet dot Com recently purchased by Walmart 1021 00:55:03,920 --> 00:55:06,279 Speaker 1: three and a half billion dollar, hair plugs, trying to 1022 00:55:06,280 --> 00:55:09,520 Speaker 1: make it, trying to make Walmart going through a midlife crisis, 1023 00:55:09,600 --> 00:55:12,560 Speaker 1: trying to hang with the cool kids, not recognizing it's 1024 00:55:12,560 --> 00:55:15,040 Speaker 1: a mature company that should be slowing down its campex 1025 00:55:15,040 --> 00:55:17,680 Speaker 1: and reduced, you know, in spending a ton of cash 1026 00:55:17,680 --> 00:55:20,719 Speaker 1: back to Shriff says, we we have a culture problem. 1027 00:55:21,120 --> 00:55:24,000 Speaker 1: The most expensive aqua higher and history three three and 1028 00:55:24,040 --> 00:55:25,680 Speaker 1: a half billion dollars, or about six and a half 1029 00:55:25,719 --> 00:55:28,839 Speaker 1: million dollars per employee, will be the biggest write down 1030 00:55:28,960 --> 00:55:32,640 Speaker 1: in the history of retail. And what about Dollar Shave Club. 1031 00:55:32,680 --> 00:55:36,359 Speaker 1: You you've said another another great company, Dollar Shave Club 1032 00:55:37,840 --> 00:55:40,920 Speaker 1: billion dollars I think about I think about three and 1033 00:55:40,960 --> 00:55:44,640 Speaker 1: a half million dollars per employee, losing money supposedly had 1034 00:55:44,680 --> 00:55:48,279 Speaker 1: discovered a new model for acquiring customers online. To Lette 1035 00:55:48,280 --> 00:55:51,319 Speaker 1: spent fifty million dollars on TV advertising last year. Dollar 1036 00:55:51,400 --> 00:55:54,759 Speaker 1: Shave Club spent fifty five million dollars on TV advertising. 1037 00:55:55,080 --> 00:55:57,600 Speaker 1: The biggest winner in the Dollar Shave Club acquisition was 1038 00:55:57,640 --> 00:55:59,600 Speaker 1: Procter and Gamble, who at a competitor taken out of 1039 00:55:59,600 --> 00:56:03,520 Speaker 1: the market place on Unilever's balance sheet. That's fantastic. All right, 1040 00:56:03,560 --> 00:56:05,680 Speaker 1: so let's get to my favorite questions before we run 1041 00:56:05,719 --> 00:56:09,120 Speaker 1: out of time. We've talked about your background, although I 1042 00:56:09,200 --> 00:56:12,040 Speaker 1: have to ask your at U C, l A and Berkeley, 1043 00:56:12,160 --> 00:56:15,839 Speaker 1: right schools all the way through, just like you. That's right. 1044 00:56:15,840 --> 00:56:18,440 Speaker 1: I went to sunny stony Brook. We the joke was 1045 00:56:18,840 --> 00:56:21,520 Speaker 1: Berkeley the stony Brook of the West, but last week 1046 00:56:21,560 --> 00:56:23,759 Speaker 1: it was twenty degrees. Do you do you feel like 1047 00:56:23,840 --> 00:56:26,040 Speaker 1: you miss a little bit of California when New York 1048 00:56:26,080 --> 00:56:28,640 Speaker 1: weather gets like anybody is from California. When you come 1049 00:56:28,680 --> 00:56:31,160 Speaker 1: into l A. And you get in your car and 1050 00:56:31,200 --> 00:56:33,920 Speaker 1: you got in an outburg, which is my my pattern, 1051 00:56:34,239 --> 00:56:37,000 Speaker 1: you sort of wonder what was I thinking ever leaving here? 1052 00:56:37,160 --> 00:56:38,759 Speaker 1: But then you're there for a week and you're like, oh, 1053 00:56:38,800 --> 00:56:41,160 Speaker 1: now I remember I don't know, it's pretty nice out there. 1054 00:56:41,239 --> 00:56:44,480 Speaker 1: It's fantastic if you and are a New York guy 1055 00:56:44,520 --> 00:56:47,200 Speaker 1: so born and Bread were born in Bread. To me, 1056 00:56:47,760 --> 00:56:51,400 Speaker 1: California would be fantastic if you could follow the neutron 1057 00:56:51,480 --> 00:56:54,680 Speaker 1: bomb and start over my second I love California, But 1058 00:56:54,840 --> 00:56:57,440 Speaker 1: every time I'm there, I'm like, oh, now I remember 1059 00:56:57,440 --> 00:57:00,760 Speaker 1: what my second life midlife crisis. I'm moving alley, running 1060 00:57:00,760 --> 00:57:04,200 Speaker 1: a port, losing money in movies, and and and and 1061 00:57:04,200 --> 00:57:09,160 Speaker 1: and dying under suspect circumstances. I'm looking forward to it. Well, affair, 1062 00:57:09,160 --> 00:57:12,000 Speaker 1: I'll tell you my favorite San Francisco story that's like, oh, 1063 00:57:12,040 --> 00:57:16,880 Speaker 1: that's I love this place. But I consider myself, you know, 1064 00:57:17,040 --> 00:57:20,640 Speaker 1: socially progressive, left of center New York liberal. And I 1065 00:57:20,680 --> 00:57:23,320 Speaker 1: go out there and I'm Mattil of the Hunt. They 1066 00:57:23,400 --> 00:57:28,360 Speaker 1: think they think I am like Genghis Khan. They're just oh, 1067 00:57:28,400 --> 00:57:31,400 Speaker 1: so you're really an extreme right wing or I'm like, no, 1068 00:57:31,680 --> 00:57:35,840 Speaker 1: you people are crazy. I'm pretty center center left. You're 1069 00:57:35,920 --> 00:57:39,960 Speaker 1: just astonishing um And I repeat this over and over. 1070 00:57:40,440 --> 00:57:44,240 Speaker 1: I love California. I have family in Lahoya. We spend 1071 00:57:44,240 --> 00:57:47,120 Speaker 1: time out there. One of the most beautiful place Newport 1072 00:57:47,200 --> 00:57:52,360 Speaker 1: beach spectacular. San Francisco is a world class city. Beautiful 1073 00:57:52,360 --> 00:57:55,800 Speaker 1: city in America. I can't imagine. And every time when 1074 00:57:56,040 --> 00:57:58,760 Speaker 1: you look, you travel a lot. Every country I go to, 1075 00:57:58,840 --> 00:58:01,480 Speaker 1: every city I go to, I'm like, this place is fat. 1076 00:58:01,600 --> 00:58:04,640 Speaker 1: Like we were in Copenhagen not too long ago. I'm like, Wow, 1077 00:58:04,680 --> 00:58:07,280 Speaker 1: this is a great city. I'm not sure I could 1078 00:58:07,280 --> 00:58:10,880 Speaker 1: live here, but it's a fantastic city. San Francisco. Every 1079 00:58:10,880 --> 00:58:12,600 Speaker 1: time I'm there, I'm like, I could live here, And 1080 00:58:12,640 --> 00:58:15,040 Speaker 1: then by the end of the trip it's like, you know, 1081 00:58:15,280 --> 00:58:17,960 Speaker 1: I can. I don't know. They would not put up 1082 00:58:17,960 --> 00:58:21,000 Speaker 1: with my New York stick there for very long. I 1083 00:58:21,040 --> 00:58:22,760 Speaker 1: get away with it here, I can't get away with it. 1084 00:58:22,800 --> 00:58:27,720 Speaker 1: There is there goods all right, So let's talk um, 1085 00:58:28,920 --> 00:58:32,720 Speaker 1: I'll do the abbreviated version of our favorite list early mentors. 1086 00:58:32,760 --> 00:58:34,919 Speaker 1: Who are some of the people that influenced the way 1087 00:58:34,960 --> 00:58:40,680 Speaker 1: you think about business and digital So probably my first 1088 00:58:40,800 --> 00:58:43,760 Speaker 1: business manner was a guy named David Anker who inspired 1089 00:58:43,760 --> 00:58:45,720 Speaker 1: me in my second year of business school, and I 1090 00:58:45,760 --> 00:58:47,280 Speaker 1: decided that's what I wanted to do with the rest 1091 00:58:47,320 --> 00:58:49,560 Speaker 1: of my life. He's a professor considered the father of 1092 00:58:49,640 --> 00:58:53,919 Speaker 1: modern management. I had some really nice, uh kind of 1093 00:58:54,400 --> 00:58:57,480 Speaker 1: older brother father figure like people who are mentors for 1094 00:58:57,600 --> 00:59:01,960 Speaker 1: me right out of business school. UM, I got Impat Connolly, 1095 00:59:01,960 --> 00:59:04,040 Speaker 1: who just retired as CMO of Williams Nooma, has been 1096 00:59:04,200 --> 00:59:06,520 Speaker 1: a kind of a mentor for me as an adult 1097 00:59:06,560 --> 00:59:10,120 Speaker 1: adult person. UM, as an adult Warren Hellman invested in 1098 00:59:10,160 --> 00:59:14,520 Speaker 1: everything I did, the venture, the buyout guy out there. Uh, 1099 00:59:14,560 --> 00:59:17,080 Speaker 1: it's some great some of my clients said. Profit I 1100 00:59:17,080 --> 00:59:20,600 Speaker 1: got named Gorge Shank, who was the CMO of Levi's Canada, 1101 00:59:20,640 --> 00:59:23,080 Speaker 1: was very generous with me. There was just some nice, 1102 00:59:24,600 --> 00:59:27,440 Speaker 1: very nice, you know, decent people who took an interest 1103 00:59:27,480 --> 00:59:30,479 Speaker 1: in me and we're very good to me. I feel 1104 00:59:30,560 --> 00:59:33,520 Speaker 1: very blessed that way. I was raising a single parent household. 1105 00:59:33,520 --> 00:59:36,000 Speaker 1: My dad was around, but we I didn't live with him, 1106 00:59:36,160 --> 00:59:39,720 Speaker 1: and uh, I was very fortunate at a very young age. 1107 00:59:39,760 --> 00:59:42,880 Speaker 1: A lot of you know, older mostly men, took an 1108 00:59:43,000 --> 00:59:46,040 Speaker 1: interest in me professionally and we're very generous with me. 1109 00:59:46,840 --> 00:59:49,800 Speaker 1: So I consider myself very fortunate around mentors. And anyone 1110 00:59:49,800 --> 00:59:52,440 Speaker 1: who doesn't have mentors, it's gonna be tough to be 1111 00:59:52,560 --> 00:59:55,080 Speaker 1: successful because you need people on your shoulder who can 1112 00:59:55,080 --> 00:59:56,840 Speaker 1: give you advice even when they're not around, because you 1113 00:59:56,840 --> 00:59:58,080 Speaker 1: get to know him and you get to kind of 1114 00:59:58,160 --> 01:00:01,560 Speaker 1: channel how they would handle a given situation. So those 1115 01:00:01,600 --> 01:00:05,440 Speaker 1: are mentors. What about business people or other professionals who 1116 01:00:05,560 --> 01:00:09,000 Speaker 1: influenced the way you approach business? You run one very 1117 01:00:09,000 --> 01:00:12,920 Speaker 1: successful business currently. A few of your prior businesses, profit 1118 01:00:13,080 --> 01:00:16,160 Speaker 1: and and red Envelope both were very successful. Who who 1119 01:00:16,160 --> 01:00:19,120 Speaker 1: were the big influences from a business perspective? You know? 1120 01:00:19,160 --> 01:00:21,040 Speaker 1: So my dad gave me a bunch of Peter Jarker 1121 01:00:21,080 --> 01:00:23,040 Speaker 1: books when I was younger, and I read those and 1122 01:00:23,160 --> 01:00:24,760 Speaker 1: I tried, you know that that was sort of the 1123 01:00:24,800 --> 01:00:28,800 Speaker 1: basis I think for how I approach business. But I 1124 01:00:28,800 --> 01:00:33,320 Speaker 1: wouldn't say like any one person, our individual stands out. 1125 01:00:33,360 --> 01:00:35,880 Speaker 1: I don't. I don't model myself. You know. The only 1126 01:00:35,920 --> 01:00:37,680 Speaker 1: thing you guys to get older, you have a code. 1127 01:00:37,680 --> 01:00:40,080 Speaker 1: And I'm openly critical of a lot of managers. And 1128 01:00:40,920 --> 01:00:43,400 Speaker 1: every person I admire in history has one thing in common. 1129 01:00:43,400 --> 01:00:46,800 Speaker 1: They've given powerful people a hard time. And I think 1130 01:00:46,800 --> 01:00:48,800 Speaker 1: it's okay to be critical of people as long as 1131 01:00:48,800 --> 01:00:50,560 Speaker 1: they're more powerful than me. So that gives me a 1132 01:00:50,680 --> 01:00:53,959 Speaker 1: very broad target set. Punch up as opposed to punching down. 1133 01:00:54,120 --> 01:00:56,560 Speaker 1: It's if you're being critical of people who have the 1134 01:00:56,600 --> 01:00:59,560 Speaker 1: same or less influencer power than you do, that's not 1135 01:00:59,640 --> 01:01:02,560 Speaker 1: being it of color. Starting at cattle, you're just bowling. 1136 01:01:03,400 --> 01:01:09,200 Speaker 1: So the people I admire most in in journalism and uh, 1137 01:01:09,240 --> 01:01:11,040 Speaker 1: you know, I wouldn't say in business, but have never 1138 01:01:11,080 --> 01:01:14,320 Speaker 1: been afraid as long as you're not being means spirited 1139 01:01:14,600 --> 01:01:17,400 Speaker 1: call out other business people. But I wouldn't say I have, 1140 01:01:17,560 --> 01:01:20,280 Speaker 1: like you know, there's so many incredible people you can 1141 01:01:20,320 --> 01:01:22,480 Speaker 1: look to now in business and Lincoln learn so much 1142 01:01:22,520 --> 01:01:26,080 Speaker 1: about them. But I'm more about, you know, historical figures. 1143 01:01:26,080 --> 01:01:29,280 Speaker 1: I'm I'm a big fan of Winston Churchill and um, 1144 01:01:29,320 --> 01:01:31,200 Speaker 1: you know, folks like that. But I wouldn't I wouldn't 1145 01:01:31,200 --> 01:01:33,560 Speaker 1: say there's any kind of dominant I'm not a religious person. 1146 01:01:33,640 --> 01:01:37,040 Speaker 1: I'm not. I don't have what I call a course 1147 01:01:37,040 --> 01:01:39,160 Speaker 1: set of a course set of people I looked to 1148 01:01:39,320 --> 01:01:41,840 Speaker 1: for first off. So so let me digress a bit, 1149 01:01:41,880 --> 01:01:45,960 Speaker 1: because you just referenced something interesting. Um, the CEO of 1150 01:01:46,080 --> 01:01:50,280 Speaker 1: under Armour came out and said, uh, some positive things 1151 01:01:50,360 --> 01:01:54,280 Speaker 1: about President Trump. He's asset to the business community. Their 1152 01:01:54,600 --> 01:01:59,000 Speaker 1: single biggest endorser, Stephen Curry and the Golden State Warriors 1153 01:01:59,280 --> 01:02:01,280 Speaker 1: came out and said, well, he's right that he's an 1154 01:02:01,280 --> 01:02:04,520 Speaker 1: asset if you drop the E T. And then that 1155 01:02:04,520 --> 01:02:07,160 Speaker 1: that got a little viral, and then the question became 1156 01:02:07,560 --> 01:02:10,320 Speaker 1: they had the CEO of under Romer and Curry had 1157 01:02:10,320 --> 01:02:15,400 Speaker 1: a conversation apparently all is well there what happens with 1158 01:02:15,560 --> 01:02:19,360 Speaker 1: the consumer society where we just saw what happened with 1159 01:02:19,440 --> 01:02:23,200 Speaker 1: Nordstrom dropping the Avanca line. Is this going to be 1160 01:02:23,240 --> 01:02:27,720 Speaker 1: a litmus test amongst consumers and or their high profile spokespeople. 1161 01:02:27,840 --> 01:02:31,200 Speaker 1: So in the movie Broadcast News, William Hurst asked Albert Brooks, 1162 01:02:31,280 --> 01:02:34,920 Speaker 1: what do you do if your real life outpaces are 1163 01:02:34,960 --> 01:02:37,240 Speaker 1: as better than your dreams? And Albert Brooks turns him 1164 01:02:37,240 --> 01:02:41,680 Speaker 1: and says, keep it to yourself. And that's so Kevin 1165 01:02:41,720 --> 01:02:45,040 Speaker 1: playing handled it poorly. I can almost guarantee you that 1166 01:02:45,080 --> 01:02:46,760 Speaker 1: when you're the sea of a consumer company and you 1167 01:02:46,840 --> 01:02:52,600 Speaker 1: come out for or against anybody half it's just so 1168 01:02:52,640 --> 01:02:54,919 Speaker 1: I'm not faulting him for less than half this time. 1169 01:02:55,240 --> 01:02:58,080 Speaker 1: I'm not faulting him for being positive. It's it would 1170 01:02:58,080 --> 01:02:59,960 Speaker 1: have been the same stupid move if you've been critic 1171 01:03:00,320 --> 01:03:04,160 Speaker 1: of the president. Nords From handled it correctly. They basically said, look, 1172 01:03:04,240 --> 01:03:06,400 Speaker 1: her stuff's not selling. They even said, we like her, 1173 01:03:06,440 --> 01:03:08,280 Speaker 1: she's nice, we like her and her team, but the 1174 01:03:08,280 --> 01:03:11,160 Speaker 1: stuff is not selling. This is a business decision. In 1175 01:03:11,360 --> 01:03:16,240 Speaker 1: some political views from the CEO are are best kept 1176 01:03:16,280 --> 01:03:19,800 Speaker 1: to yourself. And when when Trump draws you in, I 1177 01:03:19,840 --> 01:03:22,560 Speaker 1: think you have a writer or an obligation to respond 1178 01:03:22,640 --> 01:03:25,520 Speaker 1: in a soufful a way as possible. But actually a 1179 01:03:25,560 --> 01:03:27,920 Speaker 1: lot of the CEOs of handled really well. I think 1180 01:03:27,960 --> 01:03:30,080 Speaker 1: the CEO Ford has handled it really well. I think 1181 01:03:30,560 --> 01:03:33,360 Speaker 1: I think Nords from handled it very well. What about 1182 01:03:33,360 --> 01:03:37,880 Speaker 1: the delete uber campaign which which basically forced him, the 1183 01:03:37,880 --> 01:03:41,600 Speaker 1: CEO of Uber, off of Trump's business advisory board. Yeah, 1184 01:03:41,720 --> 01:03:44,400 Speaker 1: consumers are getting very savvy around how quickly they can 1185 01:03:44,480 --> 01:03:46,520 Speaker 1: rally around an issue, and then they're smart to hit 1186 01:03:46,600 --> 01:03:50,040 Speaker 1: people in their pocketbook. That's when that's when you really 1187 01:03:50,080 --> 01:03:54,120 Speaker 1: see action. Right. Boycott used to be more or less meaningless. 1188 01:03:54,200 --> 01:03:56,280 Speaker 1: Every now and then one would have an effect. But 1189 01:03:56,440 --> 01:04:00,320 Speaker 1: between Facebook and others, Twitter and other social media, it 1190 01:04:00,400 --> 01:04:04,120 Speaker 1: seems that Boycott's can be organized and put into place 1191 01:04:04,720 --> 01:04:07,400 Speaker 1: much more quickly and much more effectively than than Withdrew 1192 01:04:07,440 --> 01:04:09,800 Speaker 1: in the past. Yeah, it's an exciting time from that 1193 01:04:09,920 --> 01:04:11,960 Speaker 1: end because you can rally people do a good cause. 1194 01:04:12,760 --> 01:04:16,480 Speaker 1: Travis being forced off of Trump's Business Advisory Council was a, 1195 01:04:17,000 --> 01:04:20,600 Speaker 1: you know, a pretty pretty interesting thing. But the politics, 1196 01:04:20,720 --> 01:04:25,560 Speaker 1: the politicial politicization, if you're a politicalization of every company's 1197 01:04:25,600 --> 01:04:27,640 Speaker 1: now has become relard. You know. I don't mean I 1198 01:04:27,680 --> 01:04:30,840 Speaker 1: find I love politics, and I'm exhausted by it all. 1199 01:04:30,960 --> 01:04:34,120 Speaker 1: It's every day just you know, I just want to 1200 01:04:34,160 --> 01:04:36,480 Speaker 1: watch I just want to watch Modern Family and once 1201 01:04:36,480 --> 01:04:40,920 Speaker 1: a while and not have politics, you know, have I 1202 01:04:40,960 --> 01:04:43,760 Speaker 1: can't even watch MSNBC and Rachel Matto. And I wonder 1203 01:04:43,840 --> 01:04:46,760 Speaker 1: if this is kind of officially another leg down to television, 1204 01:04:46,800 --> 01:04:50,400 Speaker 1: because I think TV and medium and politics have literally 1205 01:04:50,440 --> 01:04:53,080 Speaker 1: just exhausted us and we're ready for about a thirty 1206 01:04:53,160 --> 01:04:56,840 Speaker 1: year break. Except I just saw this headline the other 1207 01:04:56,920 --> 01:05:01,640 Speaker 1: day for the first time. Colbert Beach Jimmy Fallon, Falons, 1208 01:05:01,680 --> 01:05:05,280 Speaker 1: considered a sort of nice guy inoffensive, has had Trump on. 1209 01:05:05,480 --> 01:05:15,640 Speaker 1: Colbert has been hammering Trump. So has um who follows Fallon. Yeah, 1210 01:05:15,680 --> 01:05:18,480 Speaker 1: they and their voice has been to push back against 1211 01:05:18,840 --> 01:05:21,360 Speaker 1: the president. It's good for it's not even good politics, 1212 01:05:21,360 --> 01:05:24,160 Speaker 1: it's good. Did you see SNL on Saturday? No, of course, 1213 01:05:24,200 --> 01:05:27,560 Speaker 1: the god the opening is hilarious. But it's not just 1214 01:05:27,600 --> 01:05:29,000 Speaker 1: the opening. I don't know if you saw the last one, 1215 01:05:29,040 --> 01:05:33,640 Speaker 1: it was literally the entire show, this segment with Kelly 1216 01:05:33,680 --> 01:05:41,640 Speaker 1: and Conway. Yeah, Jack Taper's uh yeah, that was just 1217 01:05:42,200 --> 01:05:45,000 Speaker 1: that was six minutes of and you know the White 1218 01:05:45,000 --> 01:05:49,320 Speaker 1: House is watching watching it, seething, fuming. Yeah, it's it's 1219 01:05:49,360 --> 01:05:51,800 Speaker 1: just so, I mean, it's just so we're like, we're 1220 01:05:51,840 --> 01:05:56,240 Speaker 1: just totally in uncharted territory. And I personally, I mean, 1221 01:05:56,320 --> 01:05:58,720 Speaker 1: I have fantasies about this. I've done some activists investing 1222 01:05:59,160 --> 01:06:01,000 Speaker 1: if Twitter goes, but oh, ten, I want to signal 1223 01:06:01,080 --> 01:06:02,280 Speaker 1: it now. I don't think. I don't think I have 1224 01:06:02,320 --> 01:06:04,160 Speaker 1: to follow thirteen D here, but I'd like to buy 1225 01:06:04,560 --> 01:06:07,640 Speaker 1: some between one and two percent of the company former group, 1226 01:06:08,240 --> 01:06:12,280 Speaker 1: renominate everyone but Jack Dorsey, and shut down the potus 1227 01:06:12,280 --> 01:06:15,240 Speaker 1: and the real Donald Trump's account based on really, I 1228 01:06:15,240 --> 01:06:19,240 Speaker 1: think he's violated their code of conduct well, harassed people, 1229 01:06:19,480 --> 01:06:23,400 Speaker 1: hate speech. I think they have. They have been inconsistent 1230 01:06:23,440 --> 01:06:27,800 Speaker 1: in their application of their standards around I think we're 1231 01:06:27,800 --> 01:06:30,680 Speaker 1: all afraid, but I think we got to turn that 1232 01:06:30,720 --> 01:06:35,640 Speaker 1: thing off. My hope for the election was when November 1233 01:06:35,680 --> 01:06:38,400 Speaker 1: fourth came and went that's it, We're done no more 1234 01:06:38,920 --> 01:06:43,360 Speaker 1: and that if anything, it just became louder in one side. 1235 01:06:43,440 --> 01:06:45,280 Speaker 1: But what do you you're a markets guy, Barry, markets 1236 01:06:45,320 --> 01:06:47,480 Speaker 1: have gone up? What do you think? What's gone on here? 1237 01:06:47,520 --> 01:06:51,480 Speaker 1: Why are the markets you know? Yeah, well, first the 1238 01:06:51,560 --> 01:06:54,800 Speaker 1: narrative about about what was going on. I think what 1239 01:06:55,000 --> 01:06:59,520 Speaker 1: misunderstood it. Markets are looking at a trillion dollar infrastructure spends. 1240 01:06:59,720 --> 01:07:03,400 Speaker 1: That's stimulative. Big tax cuts may create deficits down the road. 1241 01:07:03,800 --> 01:07:06,120 Speaker 1: Nobody was a bigger deficit spender than Reagan. It was 1242 01:07:06,160 --> 01:07:09,680 Speaker 1: fantastic for the stock market. So you you rejigger the 1243 01:07:09,720 --> 01:07:14,040 Speaker 1: corporate tax code, you repatriate two trillion dollars of Apple 1244 01:07:14,080 --> 01:07:17,640 Speaker 1: and everybody else's staships overseas, it comes back. You're looking 1245 01:07:17,680 --> 01:07:20,680 Speaker 1: at you know this is there could be. Most people 1246 01:07:20,720 --> 01:07:22,760 Speaker 1: look at the markets as they time it from the 1247 01:07:22,800 --> 01:07:25,080 Speaker 1: bottom in March O nine and say left the market 1248 01:07:25,120 --> 01:07:28,280 Speaker 1: seven years old. That's the long definition of a secular 1249 01:07:28,320 --> 01:07:31,280 Speaker 1: bull market. We broke out to the new highs, and 1250 01:07:32,680 --> 01:07:34,960 Speaker 1: which means this market is three or four years old 1251 01:07:35,000 --> 01:07:37,600 Speaker 1: as a new bull market, and you've had a number 1252 01:07:37,600 --> 01:07:41,080 Speaker 1: of twenty resets. People tend to forget that. So if 1253 01:07:41,080 --> 01:07:43,720 Speaker 1: this market is three or four years old. Hey, the 1254 01:07:43,800 --> 01:07:48,400 Speaker 1: last correction which we had January of last year. Remember 1255 01:07:48,440 --> 01:07:51,280 Speaker 1: the whole conversation people were saying that as January goes, 1256 01:07:51,320 --> 01:07:55,000 Speaker 1: so goes the market. H that was our seven. We 1257 01:07:55,120 --> 01:07:58,080 Speaker 1: could be a dozen years left from two thousand and 1258 01:07:58,160 --> 01:08:01,000 Speaker 1: this could really run. Plus, you look at the rest 1259 01:08:01,040 --> 01:08:04,000 Speaker 1: of the world. If you want to invest cheaply, emerging 1260 01:08:04,040 --> 01:08:08,120 Speaker 1: markets are really cheaply. If you want to invest aggressively, 1261 01:08:08,760 --> 01:08:11,720 Speaker 1: you look at the worst place in the world, a 1262 01:08:11,720 --> 01:08:14,680 Speaker 1: combination of Japan and Europe, and you invest there. But 1263 01:08:14,760 --> 01:08:19,200 Speaker 1: the United States is expensive because we we weren't the 1264 01:08:19,280 --> 01:08:23,120 Speaker 1: multiple that Apple and Google and Facebook do. Everything is 1265 01:08:23,520 --> 01:08:25,760 Speaker 1: as bad as people feel, as much as the middle 1266 01:08:25,760 --> 01:08:29,560 Speaker 1: class is getting squeezed, as much as the popularist uprising 1267 01:08:29,640 --> 01:08:34,200 Speaker 1: call it Trump, called it Brexit, call it Leapan and France. Overall, 1268 01:08:34,600 --> 01:08:39,120 Speaker 1: we're the ones who came through the financial debaccle which 1269 01:08:39,160 --> 01:08:42,280 Speaker 1: we essentially caused. We came through with the best We 1270 01:08:42,280 --> 01:08:44,320 Speaker 1: We ripped the band aid off first. We didn't do 1271 01:08:44,360 --> 01:08:48,320 Speaker 1: what we should have, but we did something we We 1272 01:08:48,479 --> 01:08:52,360 Speaker 1: basically bailed out a bunch of banks. We propped up 1273 01:08:52,720 --> 01:08:56,160 Speaker 1: a bunch of financial system that was ready to collapse. 1274 01:08:56,720 --> 01:08:58,280 Speaker 1: I would have done it differently. I would have sent 1275 01:08:58,360 --> 01:09:01,680 Speaker 1: everybody to bankruptcy court if I was benevolent dictator, and 1276 01:09:01,720 --> 01:09:03,719 Speaker 1: you would have been much It would have been more painful, 1277 01:09:03,760 --> 01:09:06,320 Speaker 1: but you'd be much healthier that much sooner. But here 1278 01:09:06,400 --> 01:09:09,160 Speaker 1: we are, seven years later. We have a functioning economy, 1279 01:09:09,400 --> 01:09:14,200 Speaker 1: essentially under five percent unemployment. So we're the you know, 1280 01:09:14,400 --> 01:09:17,519 Speaker 1: we're we're the cleanest shirt in the in the hamper, 1281 01:09:17,560 --> 01:09:21,760 Speaker 1: so to speak. And so that's why the economy and 1282 01:09:21,800 --> 01:09:25,160 Speaker 1: the market continues to go higher. How are you interviewing me? 1283 01:09:25,600 --> 01:09:28,200 Speaker 1: You're listening to Masters in Business with Scott Galloway. I'm 1284 01:09:28,240 --> 01:09:31,400 Speaker 1: here with my guest, Barry Ritholtz. So so let's go 1285 01:09:31,479 --> 01:09:34,200 Speaker 1: back to our questions. You mentioned Drucker. What are some 1286 01:09:34,280 --> 01:09:36,400 Speaker 1: of your favorite books? By the way, all you need 1287 01:09:36,439 --> 01:09:38,280 Speaker 1: to do is pull my string. I said, I'm gone 1288 01:09:38,840 --> 01:09:42,439 Speaker 1: that I've watched you. I've watched you. I was awake 1289 01:09:42,479 --> 01:09:45,400 Speaker 1: through most of that was pretty good. Favorite books? What 1290 01:09:45,439 --> 01:09:48,160 Speaker 1: are some of your favorite books? You sent it every time. 1291 01:09:48,400 --> 01:09:50,840 Speaker 1: So there are a few things I'm embarrassed about because 1292 01:09:50,840 --> 01:09:52,320 Speaker 1: I like to think of myself as educated. I don't 1293 01:09:52,320 --> 01:09:54,960 Speaker 1: speak a second language, and the red and The reality 1294 01:09:55,000 --> 01:09:57,320 Speaker 1: is I read a ton. I don't read a lot 1295 01:09:57,360 --> 01:09:59,320 Speaker 1: of books. The books that changed my life for the 1296 01:09:59,360 --> 01:10:01,559 Speaker 1: Peter Darker works, which one is give me the titles? 1297 01:10:02,040 --> 01:10:03,719 Speaker 1: What is it the Twenty Minute Matter or The Modern 1298 01:10:03,760 --> 01:10:09,320 Speaker 1: Manager or his his early one about the Austrian economy. Um, 1299 01:10:09,880 --> 01:10:12,080 Speaker 1: this is really obtuse to my dad sent me, But 1300 01:10:12,560 --> 01:10:15,880 Speaker 1: I forget the titles. And then and then influence on 1301 01:10:15,960 --> 01:10:17,880 Speaker 1: me is I'm kind of a war buff. I read 1302 01:10:18,120 --> 01:10:19,920 Speaker 1: when I was in high school. I read all the 1303 01:10:19,920 --> 01:10:24,439 Speaker 1: Herman Wok books, Warren Remembrance, the Winds Shore Um. And 1304 01:10:24,439 --> 01:10:26,840 Speaker 1: I also just loved John Irving books. I think he's 1305 01:10:26,880 --> 01:10:33,400 Speaker 1: just so strange. John Irving. Did you like that movie? 1306 01:10:33,520 --> 01:10:36,880 Speaker 1: Probably Robin Williams's best film? Really? Yeah, I would. I 1307 01:10:36,880 --> 01:10:38,559 Speaker 1: would challenge that. I'm gonna have to come up with 1308 01:10:38,600 --> 01:10:41,960 Speaker 1: a list. What would you like that better? Uh? Dead 1309 01:10:42,000 --> 01:10:50,479 Speaker 1: Poets Society? Yeah, um, good morning. But he's a he's 1310 01:10:50,520 --> 01:10:54,200 Speaker 1: a minor character in in good Will hunting Dead Poets Society. 1311 01:10:54,280 --> 01:10:57,600 Speaker 1: He's I would really have to And on the comedies, 1312 01:10:58,080 --> 01:11:01,519 Speaker 1: you know, some of his comedies were Mrs Doubtfire is 1313 01:11:01,560 --> 01:11:04,200 Speaker 1: a hilarious and he's wonderful and another one he's bringing. 1314 01:11:04,240 --> 01:11:06,439 Speaker 1: I think it's called twenty four our photo. He's actually 1315 01:11:06,439 --> 01:11:09,240 Speaker 1: better at playing a psychopath than a comedian. I haven't 1316 01:11:09,240 --> 01:11:12,160 Speaker 1: seen that. I heard good things about that. So so 1317 01:11:12,320 --> 01:11:16,599 Speaker 1: herman woke Peter Drucker and yeah, that's what I'm That's 1318 01:11:16,600 --> 01:11:19,880 Speaker 1: what I'm sticking with. There's a scene in the Reason 1319 01:11:19,960 --> 01:11:23,320 Speaker 1: I have an issue with Garp. There's a scene where 1320 01:11:23,520 --> 01:11:26,120 Speaker 1: he's in the driveway. We won't go into the details, 1321 01:11:26,560 --> 01:11:28,920 Speaker 1: but he's got the woman with him when he's be ended. 1322 01:11:29,240 --> 01:11:33,240 Speaker 1: I think that scene ruined the book for me. Low budget, 1323 01:11:33,360 --> 01:11:37,559 Speaker 1: low budget gender transition. Yes, exactly. It was before Tranny 1324 01:11:37,720 --> 01:11:41,600 Speaker 1: was a that's a good that's a good scene. It's horrific. 1325 01:11:41,680 --> 01:11:44,639 Speaker 1: In the plays his mother, she's outstanding in that as well. 1326 01:11:45,320 --> 01:11:47,800 Speaker 1: There's some she must have been excited to get a 1327 01:11:47,800 --> 01:11:51,200 Speaker 1: casting called to be Robin Williams mother. It's like than 1328 01:11:51,280 --> 01:11:53,759 Speaker 1: Sally Field was cast as Tom Hanks's mother and Forrest 1329 01:11:53,800 --> 01:11:55,680 Speaker 1: Camp and I think she was six years older than him, 1330 01:11:55,720 --> 01:11:59,439 Speaker 1: all right, I isn't wasn't Robin Williams older than her? 1331 01:11:59,720 --> 01:12:01,320 Speaker 1: I don't know. I don't remember. It could have been that, 1332 01:12:01,560 --> 01:12:03,360 Speaker 1: all right. I know. I only have a fine amount 1333 01:12:03,400 --> 01:12:07,000 Speaker 1: of time, let's talk about, um, what you do to 1334 01:12:07,080 --> 01:12:10,240 Speaker 1: keep mentally and physically fit outside of work. You mentioned 1335 01:12:10,240 --> 01:12:14,120 Speaker 1: you swim, Yeah, I'm I'm I'm actually pretty into physical fitness. 1336 01:12:14,160 --> 01:12:16,320 Speaker 1: I trying to cross fit three or four times a week. 1337 01:12:16,360 --> 01:12:19,360 Speaker 1: It's how your niece, I've been really blessed without stuff, 1338 01:12:19,400 --> 01:12:21,760 Speaker 1: I think. I think physical fitness is a gift from God. 1339 01:12:21,960 --> 01:12:24,639 Speaker 1: It's my anti depressant. It keeps me sort of even 1340 01:12:24,720 --> 01:12:27,320 Speaker 1: keel sort of. I struggle with anger, I get piste 1341 01:12:27,320 --> 01:12:30,360 Speaker 1: off and stuff I shouldn't. But working out for me 1342 01:12:30,439 --> 01:12:32,920 Speaker 1: has just been a real Like I said, I'm just 1343 01:12:33,160 --> 01:12:34,840 Speaker 1: a gift from God. And I tell my kids in 1344 01:12:34,880 --> 01:12:37,720 Speaker 1: my class that if you are in good shape, you're 1345 01:12:37,760 --> 01:12:40,040 Speaker 1: gonna make more money, You're gonna be happier, You're gonna 1346 01:12:40,080 --> 01:12:42,040 Speaker 1: have more sex, You're gonna have more options in terms 1347 01:12:42,040 --> 01:12:44,479 Speaker 1: of who you mate with. You're gonna feel more confident, 1348 01:12:44,479 --> 01:12:48,599 Speaker 1: You're gonna be a better person to your friends, your pets, um, 1349 01:12:48,680 --> 01:12:51,439 Speaker 1: your neighbors. That it is absolutely one of the most 1350 01:12:51,560 --> 01:12:53,519 Speaker 1: one of the things you find that's consistent across the 1351 01:12:53,560 --> 01:12:56,640 Speaker 1: most successful people in business. It's not that they went 1352 01:12:56,680 --> 01:12:59,599 Speaker 1: to great schools, it's not that there you know, it's 1353 01:12:59,640 --> 01:13:02,120 Speaker 1: not that they're religious. The thing you find among almost 1354 01:13:02,160 --> 01:13:04,599 Speaker 1: all of them is they exercise every day. So I'm 1355 01:13:04,640 --> 01:13:09,960 Speaker 1: gonna do a really brief digression the anger issue referenced. 1356 01:13:10,479 --> 01:13:13,960 Speaker 1: That's a hot amber, hot coal that's in the core 1357 01:13:14,000 --> 01:13:16,280 Speaker 1: of your being. And you know how if you're ever 1358 01:13:16,320 --> 01:13:18,960 Speaker 1: working with a fire, you can you can blow on 1359 01:13:19,040 --> 01:13:22,960 Speaker 1: that and and get that amber going again. In all 1360 01:13:23,000 --> 01:13:28,840 Speaker 1: of your presentations, that's a very channeled focused anger with 1361 01:13:29,000 --> 01:13:34,120 Speaker 1: all of the virtual removed. It's and I share your 1362 01:13:34,680 --> 01:13:38,600 Speaker 1: that issue, but my wife says to me, where the 1363 01:13:38,640 --> 01:13:41,960 Speaker 1: hell does all this anger coming? Um, I don't know 1364 01:13:42,000 --> 01:13:44,240 Speaker 1: what it is, but it's it's a it's a fuel 1365 01:13:44,280 --> 01:13:47,920 Speaker 1: source that you can tap and redirect. And when I 1366 01:13:47,960 --> 01:13:53,599 Speaker 1: watch you take a part um a particular segment, and 1367 01:13:53,600 --> 01:13:55,880 Speaker 1: and again I'm gonna repeat for people, if you are 1368 01:13:55,920 --> 01:13:59,760 Speaker 1: not going on YouTube and seeing Galoway's videos on a 1369 01:14:00,040 --> 01:14:02,560 Speaker 1: clear basis as well as the d l D presentation, 1370 01:14:03,200 --> 01:14:07,600 Speaker 1: would you always make entertaining and you always you're fearless 1371 01:14:07,640 --> 01:14:14,360 Speaker 1: to embarrass yourself, So you do George Michael and and 1372 01:14:14,439 --> 01:14:18,680 Speaker 1: they're always entertaining, but they're filled with data, filled with information. 1373 01:14:19,040 --> 01:14:24,040 Speaker 1: But I could see that there is a driving something 1374 01:14:24,200 --> 01:14:27,759 Speaker 1: that you want people to get to the correct answer, 1375 01:14:28,240 --> 01:14:30,160 Speaker 1: and it's frustrating that the role looking in the wrong 1376 01:14:30,160 --> 01:14:32,559 Speaker 1: place and all coming to the wrong decision. So maybe 1377 01:14:32,600 --> 01:14:34,960 Speaker 1: anger and frustration or two sides of the same coin, 1378 01:14:35,280 --> 01:14:38,760 Speaker 1: but that's pop psychology for one. That's what I see 1379 01:14:38,840 --> 01:14:42,280 Speaker 1: driving you as getting people to the right place. I 1380 01:14:42,360 --> 01:14:44,400 Speaker 1: think you're being generous. I just think I have some 1381 01:14:44,800 --> 01:14:48,839 Speaker 1: chemistry that's all screwed up and anchor off of negative. 1382 01:14:48,880 --> 01:14:50,760 Speaker 1: Given how fortunate I am, I don't think there's anything 1383 01:14:50,800 --> 01:14:52,680 Speaker 1: I can blame it on. In my childhood. There's there's 1384 01:14:52,720 --> 01:14:54,799 Speaker 1: no one I can blame it on, single single parents, 1385 01:14:54,800 --> 01:14:56,880 Speaker 1: there's that could be it. I had a great mom, though, 1386 01:14:56,880 --> 01:14:59,360 Speaker 1: and I had a nice upbringing. You know, this isn't 1387 01:14:59,400 --> 01:15:01,879 Speaker 1: a sob story. We had a nice life, So it's chemical, 1388 01:15:02,280 --> 01:15:05,160 Speaker 1: you know. She and I got to take vacations and 1389 01:15:05,200 --> 01:15:08,040 Speaker 1: we had a nice relationship, and I went to nice 1390 01:15:08,040 --> 01:15:10,760 Speaker 1: schools and had nice friends. But I'm definitely gonna be 1391 01:15:10,800 --> 01:15:13,120 Speaker 1: on something. I think as the the side effects of 1392 01:15:13,120 --> 01:15:16,519 Speaker 1: the antidepressant's lesson and my anger increases, those lines are 1393 01:15:16,560 --> 01:15:20,599 Speaker 1: going to cross and I'm ready. Our last two questions, Um, 1394 01:15:20,600 --> 01:15:22,640 Speaker 1: so you work with a lot of students and millennials. 1395 01:15:22,680 --> 01:15:24,840 Speaker 1: What sort of advice do you give someone who says, 1396 01:15:25,280 --> 01:15:28,599 Speaker 1: I want to go into filling the blank technology digital content. 1397 01:15:28,680 --> 01:15:30,400 Speaker 1: I think about this lot a couple of things. One, 1398 01:15:30,840 --> 01:15:33,080 Speaker 1: don't follow your passion. Most people will tell you to 1399 01:15:33,080 --> 01:15:35,559 Speaker 1: follow your passion. Unfortunately it's every speaker at lunchtime and 1400 01:15:35,560 --> 01:15:38,599 Speaker 1: stern is already rich. Figure out what you're good at, 1401 01:15:39,280 --> 01:15:42,599 Speaker 1: and then try and really expand and and being great 1402 01:15:42,640 --> 01:15:45,920 Speaker 1: at something. We'll give you the currency and the economic 1403 01:15:46,240 --> 01:15:48,720 Speaker 1: reward and the psychological words such that you'll start to 1404 01:15:48,800 --> 01:15:51,160 Speaker 1: love it. So your job as a young person is 1405 01:15:51,200 --> 01:15:54,599 Speaker 1: to figure out something you're good at, not not your passions. 1406 01:15:54,640 --> 01:15:56,519 Speaker 1: I was I was meant to be quarterback of the Jets. 1407 01:15:56,520 --> 01:15:58,360 Speaker 1: I have a good plan of vision, a decent arm 1408 01:15:58,400 --> 01:16:00,840 Speaker 1: I would have been loved it, but I wasn't. I 1409 01:16:00,920 --> 01:16:03,720 Speaker 1: was mediocre at it as an athlete growing up. Uh 1410 01:16:04,200 --> 01:16:06,519 Speaker 1: what I ended up being semi grade at? With starting 1411 01:16:06,560 --> 01:16:09,280 Speaker 1: starting companies and analytics. Find out what you're good at. 1412 01:16:09,560 --> 01:16:12,519 Speaker 1: Get to a business that has recurring revenue. Recurring revenue 1413 01:16:12,520 --> 01:16:15,200 Speaker 1: companies are valued at a multiple of revenues versus a 1414 01:16:15,240 --> 01:16:17,320 Speaker 1: multiple of ibada. You want to be in a recurring 1415 01:16:17,320 --> 01:16:19,759 Speaker 1: revenue company you want to be, in my opinion, getting 1416 01:16:19,800 --> 01:16:22,080 Speaker 1: more tactical the two technologies the next three to five 1417 01:16:22,160 --> 01:16:25,040 Speaker 1: years our voice and messaging. I'd want to find companies 1418 01:16:25,040 --> 01:16:28,400 Speaker 1: in the ecosystem of voice and messaging. Get to a 1419 01:16:28,600 --> 01:16:31,400 Speaker 1: city two thirds of the economic development is going to 1420 01:16:31,479 --> 01:16:34,200 Speaker 1: be in within a bike ride of a major world 1421 01:16:34,240 --> 01:16:36,760 Speaker 1: class engineering university. Make sure you live near one of 1422 01:16:36,760 --> 01:16:39,320 Speaker 1: those and get into that ecosystem. You pointed out that 1423 01:16:39,400 --> 01:16:42,919 Speaker 1: most of the major successful companies in the SMP fire 1424 01:16:43,040 --> 01:16:47,400 Speaker 1: are all right near a major university of renowned university. 1425 01:16:47,439 --> 01:16:49,240 Speaker 1: How can you tell if a kid successful, how long 1426 01:16:49,240 --> 01:16:50,360 Speaker 1: does it take him or her to get to the 1427 01:16:50,360 --> 01:16:51,960 Speaker 1: biggest city in their country? And then how long does 1428 01:16:51,960 --> 01:16:55,320 Speaker 1: it take them get to London in Europe, Shanghai, Shanghai, Beijing, 1429 01:16:55,400 --> 01:16:58,400 Speaker 1: or Hong Kong or Singapore in Asia, or San Francisco, 1430 01:16:58,600 --> 01:17:02,240 Speaker 1: New York in the US. Our most talented human capital 1431 01:17:02,360 --> 01:17:06,320 Speaker 1: is flocking to these barter town, full full body contact 1432 01:17:06,320 --> 01:17:09,639 Speaker 1: business centers, and your your ability to get the skill set, 1433 01:17:09,640 --> 01:17:13,280 Speaker 1: the competitive nature, the grit, and the opportunities is very geographically. 1434 01:17:13,320 --> 01:17:16,559 Speaker 1: Sense of the intellectual capital is there. And our final question, 1435 01:17:17,040 --> 01:17:20,599 Speaker 1: what is it that you know about technology, digital brands, 1436 01:17:20,680 --> 01:17:24,599 Speaker 1: marketing startups today that you wish you knew twenty plus 1437 01:17:24,720 --> 01:17:30,879 Speaker 1: years ago when you began. It sounds very um pasting. 1438 01:17:30,960 --> 01:17:36,360 Speaker 1: It's not that, not that romantic, but um. In the 1439 01:17:36,720 --> 01:17:39,559 Speaker 1: one of my venture capital Larry Bonds, has successes in 1440 01:17:39,560 --> 01:17:43,720 Speaker 1: the agency of others, trying to find good people and 1441 01:17:43,760 --> 01:17:47,320 Speaker 1: then overcompensate, show empathy for them, really trying to figure 1442 01:17:47,320 --> 01:17:49,479 Speaker 1: out what it is they want and make your success. 1443 01:17:49,560 --> 01:17:53,000 Speaker 1: Is there such that they're loyal to you? UM. I 1444 01:17:53,040 --> 01:17:54,880 Speaker 1: think I was a little bit more Darwinian as as 1445 01:17:54,920 --> 01:17:58,479 Speaker 1: as a younger person. And also just get to a 1446 01:17:58,520 --> 01:18:03,280 Speaker 1: business with um recurring revenue. I know that sounds ridiculous, 1447 01:18:03,320 --> 01:18:07,240 Speaker 1: but the business of software is it's a better business. 1448 01:18:07,280 --> 01:18:09,599 Speaker 1: The business of owning a gym versus part private training 1449 01:18:09,680 --> 01:18:12,720 Speaker 1: is a bet. Being the insurance company that gets the 1450 01:18:12,720 --> 01:18:15,320 Speaker 1: bills everybody every year as opposed to the doctor, the 1451 01:18:15,360 --> 01:18:18,639 Speaker 1: healthcare provider. Recurring revenue I think sorts at and get 1452 01:18:18,720 --> 01:18:21,559 Speaker 1: towards something that is one or two degrees separated from 1453 01:18:21,600 --> 01:18:24,960 Speaker 1: the plumbing price and processing power or something around technology 1454 01:18:25,200 --> 01:18:28,559 Speaker 1: technologies eating the world. We have been speaking with Professor 1455 01:18:28,640 --> 01:18:31,679 Speaker 1: Scott Galloway of n Y u Stern School of Business. 1456 01:18:31,760 --> 01:18:35,519 Speaker 1: If you want to learn more, go to his YouTube channel. 1457 01:18:35,560 --> 01:18:39,479 Speaker 1: Just search for Scott Galloway at L two. Or we 1458 01:18:39,520 --> 01:18:41,120 Speaker 1: didn't talk about your book. You have a book coming 1459 01:18:41,120 --> 01:18:44,360 Speaker 1: out in September. We'll revisit that when that book comes out. 1460 01:18:44,439 --> 01:18:48,880 Speaker 1: Winners and Losers. Who's publishing that portfolio? Penguin, Random, Random House, 1461 01:18:48,920 --> 01:18:52,080 Speaker 1: not self published. You should be just barely. If you 1462 01:18:52,200 --> 01:18:54,400 Speaker 1: enjoy this conversation, be sure and look up an inch, 1463 01:18:54,479 --> 01:18:56,559 Speaker 1: down an inch on Apple iTunes. You can see any 1464 01:18:56,600 --> 01:18:59,679 Speaker 1: of the other hundred and thirty such conversations. I would 1465 01:18:59,680 --> 01:19:02,759 Speaker 1: be miss if I did not think my booker, Taylor Riggs, 1466 01:19:02,800 --> 01:19:06,959 Speaker 1: my recording engineer Medina, or Michael Batnick, my head of research. 1467 01:19:07,520 --> 01:19:10,400 Speaker 1: I'm Barry Retults. You're listening to Masters in Business on 1468 01:19:10,439 --> 01:19:14,120 Speaker 1: Bloomberg Radio. 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