1
00:00:02,240 --> 00:00:06,800
Speaker 1: This is Master's in Business with Barry Ridholts on Bloomberg Radio.

2
00:00:09,520 --> 00:00:12,400
Speaker 1: This week on the podcast, I have an extra special guest,

3
00:00:12,560 --> 00:00:17,239
Speaker 1: our first three timer, Professor Scott Galloway of n While

4
00:00:17,239 --> 00:00:22,959
Speaker 1: You Stern. Where do I begin to describe Professor Galloway.

5
00:00:23,400 --> 00:00:26,960
Speaker 1: I first invited him on the show after I saw

6
00:00:27,880 --> 00:00:32,919
Speaker 1: a YouTube video of him really describing for his students

7
00:00:32,920 --> 00:00:35,920
Speaker 1: at n y U Stern School of Business the four

8
00:00:36,000 --> 00:00:43,839
Speaker 1: Horsemen of the Internet. And he discusses everything from you, Google, Apple, Amazon,

9
00:00:43,880 --> 00:00:47,040
Speaker 1: and Facebook and the subsequent impact of all these companies

10
00:00:47,040 --> 00:00:49,520
Speaker 1: and what they have and where they're going, and how

11
00:00:49,560 --> 00:00:54,000
Speaker 1: they're affecting the rest of the world, of finance, of government,

12
00:00:54,080 --> 00:00:59,279
Speaker 1: and taxation, of technology, of employment it. There's nobody like him.

13
00:00:59,320 --> 00:01:05,080
Speaker 1: He just choose the scenery. Everybody loved his previous two conversations.

14
00:01:05,560 --> 00:01:08,039
Speaker 1: This one is very different. We talked about his new book,

15
00:01:08,120 --> 00:01:12,520
Speaker 1: The Four which discusses those four companies. Uh. He has

16
00:01:12,560 --> 00:01:16,680
Speaker 1: done work for most of these companies on a consulting basis,

17
00:01:17,120 --> 00:01:21,520
Speaker 1: and yet that doesn't stop him from really trashing them

18
00:01:21,560 --> 00:01:24,240
Speaker 1: when they deserve to be trashed about different things like

19
00:01:24,800 --> 00:01:28,280
Speaker 1: what they're doing two jobs in America, how they're impacting

20
00:01:28,319 --> 00:01:31,720
Speaker 1: the tax base of the federal government. And you know

21
00:01:31,800 --> 00:01:34,679
Speaker 1: he calls on all of these companies, especially Google and

22
00:01:34,720 --> 00:01:40,000
Speaker 1: Facebook as media companies, to be more responsible for what

23
00:01:40,080 --> 00:01:42,399
Speaker 1: they do. And uh it, I don't know how else

24
00:01:42,440 --> 00:01:46,559
Speaker 1: to say it. It's a fascinating conversation. With no further ado,

25
00:01:46,959 --> 00:01:54,280
Speaker 1: my talk with Professor Scott Galloway. My special guest today

26
00:01:54,560 --> 00:01:57,480
Speaker 1: is Scott Galloway of n y U Stern School of

27
00:01:57,520 --> 00:02:00,880
Speaker 1: Business as well as L two Inc. He is the

28
00:02:00,880 --> 00:02:04,600
Speaker 1: founder of a number of internet startups uh and he

29
00:02:04,720 --> 00:02:09,639
Speaker 1: specializes in digital branding. I first reached out to Professor

30
00:02:09,720 --> 00:02:15,160
Speaker 1: Galloway after seeing his four Horsemen of of the Internet

31
00:02:15,240 --> 00:02:19,000
Speaker 1: video on YouTube a few years ago. We've interviewed him

32
00:02:19,040 --> 00:02:22,840
Speaker 1: twice before for Masters in Business. He is not only

33
00:02:23,040 --> 00:02:26,680
Speaker 1: our first three times guest, he's likely to be the

34
00:02:26,720 --> 00:02:31,040
Speaker 1: only one. Scott Galloway, Welcome back to Bloomberg. Thanks very so.

35
00:02:31,520 --> 00:02:34,040
Speaker 1: Is this SNL DO. I got a jacket which it's

36
00:02:34,080 --> 00:02:36,239
Speaker 1: like the Masters. It's like a green jacket and it

37
00:02:36,280 --> 00:02:40,720
Speaker 1: says might be on the exactly exactly. It's it's all

38
00:02:40,760 --> 00:02:43,200
Speaker 1: good fun for everybody. Let's talk about your new book,

39
00:02:43,440 --> 00:02:47,920
Speaker 1: The four The Hidden DNA of Amazon Apple, Facebook, and Google.

40
00:02:48,800 --> 00:02:52,840
Speaker 1: The first question is why the four and why these four?

41
00:02:53,520 --> 00:02:58,400
Speaker 1: So I believe as consumer companies, these these companies have

42
00:02:58,440 --> 00:03:01,160
Speaker 1: tapped into a base against inc in a and have

43
00:03:01,280 --> 00:03:04,200
Speaker 1: had a bigger role or an outsized role on society

44
00:03:04,240 --> 00:03:07,400
Speaker 1: who we are as people and uh than almost any

45
00:03:07,480 --> 00:03:09,840
Speaker 1: organizations in history, much less companies. Also, I think there's

46
00:03:09,880 --> 00:03:13,160
Speaker 1: a tremendous amount to learn from these companies, and our

47
00:03:13,280 --> 00:03:15,639
Speaker 1: role as professors of business school, I think is to

48
00:03:15,720 --> 00:03:18,720
Speaker 1: help people develop the currency and skills so they can

49
00:03:18,760 --> 00:03:22,080
Speaker 1: create economic security for them and their families. And to

50
00:03:22,200 --> 00:03:24,800
Speaker 1: really understand these companies. I think it's to understand the

51
00:03:24,800 --> 00:03:29,200
Speaker 1: intersection between technology, innovation, media, and having have an advantage.

52
00:03:29,200 --> 00:03:31,400
Speaker 1: I think there's something we can all learn from really

53
00:03:31,480 --> 00:03:35,760
Speaker 1: understanding these companies. So if I'm a first year business student,

54
00:03:35,800 --> 00:03:38,920
Speaker 1: it's stern. What takeaway do I do I get from

55
00:03:38,920 --> 00:03:42,960
Speaker 1: these four? So first year is an interesting way to

56
00:03:42,960 --> 00:03:44,280
Speaker 1: look at it. I think the first year in business

57
00:03:44,280 --> 00:03:46,360
Speaker 1: school is one of the highest r o I investments

58
00:03:46,360 --> 00:03:48,360
Speaker 1: in individual can make. We take a kid who's making

59
00:03:48,400 --> 00:03:50,880
Speaker 1: seventy thousand tournament to a kid who's making six figures,

60
00:03:50,880 --> 00:03:54,320
Speaker 1: it's stern. Within fourteen months and the foundations of the

61
00:03:54,360 --> 00:03:59,120
Speaker 1: first year of management, operations, finance, and strategy. UH. The

62
00:03:59,200 --> 00:04:01,840
Speaker 1: second year, I think is mostly a waste. It's mostly

63
00:04:01,880 --> 00:04:04,600
Speaker 1: there so we can charge the kid's double tuition and

64
00:04:04,680 --> 00:04:07,640
Speaker 1: to satisfy the teaching requirements of tenure faculty that have

65
00:04:07,720 --> 00:04:10,200
Speaker 1: sort of lost their edge. If we were to stay

66
00:04:10,240 --> 00:04:13,240
Speaker 1: true to that that effort to increase the r o

67
00:04:13,400 --> 00:04:15,920
Speaker 1: I at the same velocity as the first year, I

68
00:04:16,000 --> 00:04:18,599
Speaker 1: think we would teach them about these four companies. So

69
00:04:18,640 --> 00:04:23,240
Speaker 1: I think there's tremendous, just tremendous advantage and insight to

70
00:04:23,360 --> 00:04:26,240
Speaker 1: really under understanding these four companies. The thing that you

71
00:04:26,279 --> 00:04:29,000
Speaker 1: take away your first year about these four firms is

72
00:04:29,040 --> 00:04:31,919
Speaker 1: that they tap into a very basic instinct, the appealed

73
00:04:31,920 --> 00:04:34,919
Speaker 1: to specific organ and if you want to be in

74
00:04:35,160 --> 00:04:36,640
Speaker 1: I think if you want to be relevant in business,

75
00:04:36,720 --> 00:04:38,800
Speaker 1: you really have to understand how these companies work and

76
00:04:39,200 --> 00:04:41,960
Speaker 1: how to leverage them. You said a specific organ can

77
00:04:42,000 --> 00:04:45,800
Speaker 1: you expert a little bit? So I think Google is

78
00:04:45,839 --> 00:04:49,160
Speaker 1: a modern man's God. Where our advantages as a species

79
00:04:49,800 --> 00:04:51,960
Speaker 1: is that we have a better brain, a brain that's

80
00:04:51,960 --> 00:04:54,960
Speaker 1: so robust you can ask incredibly complex, nuanced question. But

81
00:04:55,040 --> 00:04:57,560
Speaker 1: our brain isn't robust enough to answer these questions. And

82
00:04:57,600 --> 00:05:01,080
Speaker 1: as the society becomes more affluent and educated, it's dependence

83
00:05:01,160 --> 00:05:04,640
Speaker 1: upon a super being and church attendance goes down, But

84
00:05:04,720 --> 00:05:07,320
Speaker 1: our our questions don't get any easier simpler. So there's

85
00:05:07,320 --> 00:05:09,080
Speaker 1: a void that opens up and a need for a

86
00:05:09,120 --> 00:05:12,360
Speaker 1: super being. And our species is always needed and adopted

87
00:05:12,440 --> 00:05:15,400
Speaker 1: super beings. And I believe a modern man's god is Google.

88
00:05:16,040 --> 00:05:18,600
Speaker 1: Anyone who has kids knows that when something comes off

89
00:05:18,600 --> 00:05:20,400
Speaker 1: the rails with your kids, you throw up a prayer

90
00:05:20,440 --> 00:05:22,960
Speaker 1: into the sky, hoping that this all knowing authority will

91
00:05:23,000 --> 00:05:26,680
Speaker 1: process your query, look at everything out there, and then

92
00:05:26,720 --> 00:05:29,120
Speaker 1: send you back an answer, will my kid be all right?

93
00:05:29,160 --> 00:05:31,599
Speaker 1: We've all had that prayer if you have kids. Now

94
00:05:31,600 --> 00:05:33,799
Speaker 1: it's symptoms and treatment of croup typed into the Google

95
00:05:33,880 --> 00:05:35,760
Speaker 1: query box. So I think Google appeals to our need

96
00:05:35,800 --> 00:05:38,159
Speaker 1: for a super being, and it's a very cebral kind

97
00:05:38,160 --> 00:05:41,320
Speaker 1: of I don't know, attraction to the brain moving down

98
00:05:41,360 --> 00:05:44,120
Speaker 1: the heart. One of the wonderful things about our species

99
00:05:44,200 --> 00:05:46,440
Speaker 1: is we not only need to be loved. Kids or

100
00:05:46,520 --> 00:05:49,479
Speaker 1: babies that have more affection but not great nutrition have

101
00:05:49,560 --> 00:05:53,760
Speaker 1: better outcomes than kids with decent nutrition and small amounts

102
00:05:53,800 --> 00:05:56,719
Speaker 1: of affection. We need to love others. The strongest indicator

103
00:05:56,720 --> 00:05:58,280
Speaker 1: you're gonna make it to a hundred years of age

104
00:05:58,600 --> 00:06:00,240
Speaker 1: is how many people in your life do you care about?

105
00:06:00,240 --> 00:06:01,960
Speaker 1: How many people you love? And I think Facebook is

106
00:06:02,000 --> 00:06:04,960
Speaker 1: tapping into that instinct and letting us love its scale,

107
00:06:05,000 --> 00:06:08,320
Speaker 1: mostly through pictures that create empathy and greater connection and

108
00:06:08,360 --> 00:06:13,040
Speaker 1: reinforcing existing relationships. Amazon is our consumptive gut. It is

109
00:06:13,120 --> 00:06:15,880
Speaker 1: hard wired intoists just the notion of more. There's never

110
00:06:16,279 --> 00:06:18,960
Speaker 1: anything is too much. There's always a desire for more.

111
00:06:19,360 --> 00:06:22,800
Speaker 1: The penalty for too level throughout history has been starvation

112
00:06:22,839 --> 00:06:26,039
Speaker 1: and malnutrition, which is a terrible death. The penalty for

113
00:06:26,120 --> 00:06:29,400
Speaker 1: too much is lethargy, gluttony, and our age. Maybe it's diabetes,

114
00:06:29,400 --> 00:06:32,200
Speaker 1: but it has a pretty long lag. So open your cupboards,

115
00:06:32,200 --> 00:06:34,600
Speaker 1: open your closets. You have tend to a hundred x

116
00:06:34,680 --> 00:06:36,719
Speaker 1: more than you really need. It's really crazy when you

117
00:06:36,720 --> 00:06:39,040
Speaker 1: think about it, how much stuff we have. But it's

118
00:06:39,080 --> 00:06:42,279
Speaker 1: so hard wired into us. And the ultimate business strategy

119
00:06:42,520 --> 00:06:45,640
Speaker 1: is more for less. It's the business strategy of China, Walmart,

120
00:06:45,640 --> 00:06:48,960
Speaker 1: and now Amazon, which is our consumptive gut, taking and

121
00:06:49,040 --> 00:06:52,240
Speaker 1: stuff extracting what we need to survive and sending it

122
00:06:52,279 --> 00:06:54,720
Speaker 1: to our our vascular and our skeleton and muscular so

123
00:06:54,839 --> 00:06:56,560
Speaker 1: much how much lower can you go down the tour?

124
00:06:56,640 --> 00:06:58,680
Speaker 1: So you keep going. So the next place you go

125
00:06:58,839 --> 00:07:03,000
Speaker 1: is to the reproductive system. And once the strongest instinct

126
00:07:03,200 --> 00:07:05,599
Speaker 1: is to survive. Once you know you're gonna survive, and

127
00:07:05,640 --> 00:07:07,200
Speaker 1: most of us wake up in the morning aren't worried

128
00:07:07,200 --> 00:07:09,120
Speaker 1: about survival. We think we're gonna probably gonna go through

129
00:07:09,160 --> 00:07:12,160
Speaker 1: the day. So it moves to the second most powerful instinct,

130
00:07:12,160 --> 00:07:14,880
Speaker 1: and that is procreation. And I think Apple has tapped

131
00:07:14,920 --> 00:07:17,160
Speaker 1: into our need to be attractive to other people. It

132
00:07:17,240 --> 00:07:18,960
Speaker 1: used to be watched as it used to be cars.

133
00:07:19,400 --> 00:07:22,040
Speaker 1: But now among the innovation class, the way you signal

134
00:07:22,200 --> 00:07:24,400
Speaker 1: how attractive you are and that you have good genes

135
00:07:24,720 --> 00:07:27,160
Speaker 1: is that you have the disposable income, you have the education,

136
00:07:27,160 --> 00:07:30,320
Speaker 1: the innovation you think different. The iPhone is the new

137
00:07:30,480 --> 00:07:33,280
Speaker 1: signal that you are a good mate or a good

138
00:07:33,280 --> 00:07:35,679
Speaker 1: potential mate, and that you will pass along good genes

139
00:07:35,680 --> 00:07:38,160
Speaker 1: to anyone who decides to mate with you. Let's talk

140
00:07:38,200 --> 00:07:42,920
Speaker 1: about Amazon. Some of the statistics you you used to

141
00:07:42,960 --> 00:07:49,000
Speaker 1: discuss them are quite astonishing. Of us households have a

142
00:07:49,160 --> 00:07:54,400
Speaker 1: gun of households have Amazon Prime, and I think the

143
00:07:54,480 --> 00:07:57,840
Speaker 1: numbers gone up since you you wrote that, how did

144
00:07:57,960 --> 00:08:02,680
Speaker 1: Amazon become this behemoth? Amazon? Yeah, I think the number

145
00:08:02,680 --> 00:08:06,360
Speaker 1: of households now sixt some more households have a relationship

146
00:08:06,440 --> 00:08:08,200
Speaker 1: with Prime and have a landline phone or vote in

147
00:08:08,240 --> 00:08:11,760
Speaker 1: the two thousand sixteen elections ashing And if the trends continue,

148
00:08:11,800 --> 00:08:13,560
Speaker 1: in three years, more people are going to have a

149
00:08:13,600 --> 00:08:16,480
Speaker 1: cable pipe of stuff into their house visa the Prime

150
00:08:16,640 --> 00:08:19,600
Speaker 1: than have cable television. So who would have guessed that

151
00:08:19,680 --> 00:08:21,800
Speaker 1: that kind of one of the signals are symbols of

152
00:08:22,200 --> 00:08:25,240
Speaker 1: technology and innovation over the last ten years, would be

153
00:08:25,280 --> 00:08:29,440
Speaker 1: the more people have Prime than a landline phone. Amazon success.

154
00:08:29,920 --> 00:08:32,319
Speaker 1: Their core competence, I would argue, is not operations or

155
00:08:32,440 --> 00:08:34,800
Speaker 1: facility with data. It's storytelling. And if you go all

156
00:08:34,840 --> 00:08:38,640
Speaker 1: the way back to Bezos investor letter said we're going

157
00:08:38,720 --> 00:08:42,800
Speaker 1: to massively invest across these truisms, these non perishables of

158
00:08:42,880 --> 00:08:47,600
Speaker 1: consumer value. I think it was selection, convenience, and value.

159
00:08:48,360 --> 00:08:50,720
Speaker 1: And he's made these huge investments and stayed true to

160
00:08:50,760 --> 00:08:53,920
Speaker 1: that philosophy. And it's an intoxicating vision to outline this

161
00:08:54,559 --> 00:08:58,160
Speaker 1: enormous vision that results and UM and they make progress

162
00:08:58,200 --> 00:08:59,839
Speaker 1: against it every day. And as a result of this

163
00:09:00,040 --> 00:09:02,720
Speaker 1: incredible storytelling which has become, in my view, the core

164
00:09:02,760 --> 00:09:05,720
Speaker 1: competence of the CEO, the ability to tell a story

165
00:09:05,760 --> 00:09:09,080
Speaker 1: about what the company is trying to accomplish. Give me

166
00:09:09,920 --> 00:09:13,880
Speaker 1: a magnetic twenty seven year old founder with a great

167
00:09:13,920 --> 00:09:16,000
Speaker 1: rap and a degree from M I. T. And I'll

168
00:09:16,000 --> 00:09:17,760
Speaker 1: show you someone who can go raise fifty million dollars

169
00:09:17,840 --> 00:09:21,600
Speaker 1: right now. It's your ability storytelling. You know, we used

170
00:09:21,600 --> 00:09:24,240
Speaker 1: to call it salesmanship, but storytelling and the narrative you're

171
00:09:24,240 --> 00:09:27,160
Speaker 1: able to put together is really powerful. You see Jeff

172
00:09:27,160 --> 00:09:29,240
Speaker 1: Pezol speaking, want to you just want to buy stock.

173
00:09:29,880 --> 00:09:32,960
Speaker 1: And as a result, the storytelling has resulted in the

174
00:09:33,000 --> 00:09:35,360
Speaker 1: access to the cheapest capital I think in the history

175
00:09:35,360 --> 00:09:38,520
Speaker 1: of modern business. Amazon can access the debt markets for

176
00:09:38,559 --> 00:09:42,320
Speaker 1: a lower cost of capital than China, regardless of them

177
00:09:42,400 --> 00:09:46,520
Speaker 1: breaking even which is they've changed the compact with markets.

178
00:09:46,600 --> 00:09:48,800
Speaker 1: They invest a hundred cents on the dollar back and

179
00:09:48,840 --> 00:09:52,280
Speaker 1: the consumer experience and their stock continues to go up.

180
00:09:52,320 --> 00:09:55,840
Speaker 1: And we've never seen that before, so versus Facebook, Apple

181
00:09:56,320 --> 00:09:59,840
Speaker 1: or Google who have to invest sixties, seventy or only

182
00:10:00,040 --> 00:10:02,959
Speaker 1: ninety cents on the dollar back and the consumer experience.

183
00:10:03,280 --> 00:10:05,640
Speaker 1: Amazon invests all hundred cents on the dollar back in

184
00:10:05,640 --> 00:10:08,520
Speaker 1: the consumer experience, which means that they quite frankly, just

185
00:10:08,679 --> 00:10:11,440
Speaker 1: offer a better value to the consumer and are sort

186
00:10:11,480 --> 00:10:14,120
Speaker 1: of playing unfair, if you will. So let's talk a

187
00:10:14,160 --> 00:10:17,240
Speaker 1: little bit about playing unfair. Another quote of yours, I

188
00:10:17,400 --> 00:10:21,480
Speaker 1: really like the wealthiest man in the twentieth century mastered

189
00:10:21,520 --> 00:10:25,920
Speaker 1: the art of minimum wage employees selling you stuff. The

190
00:10:25,960 --> 00:10:29,760
Speaker 1: wealthiest man of the twenty first century is mastering the

191
00:10:29,800 --> 00:10:33,840
Speaker 1: science of zero wage robots selling you stuff. Is it

192
00:10:33,920 --> 00:10:37,160
Speaker 1: really that simple? Is it? Robotics and automation is a

193
00:10:37,240 --> 00:10:42,079
Speaker 1: defining advantage of Amazon. So to be fair, Amazon is

194
00:10:42,120 --> 00:10:44,520
Speaker 1: hiring a lot of people uh such that they can

195
00:10:44,559 --> 00:10:49,000
Speaker 1: take they can take more share of retail and other sectors,

196
00:10:49,360 --> 00:10:51,200
Speaker 1: and they'll be more efficient at it. And by the way,

197
00:10:51,280 --> 00:10:54,719
Speaker 1: we've seen this throughout economic history, that innovators figure out

198
00:10:54,720 --> 00:10:57,240
Speaker 1: a way to take a bunch of medium paying jobs

199
00:10:57,240 --> 00:10:59,680
Speaker 1: and turn them into fewer, higher paying jobs. We've just

200
00:10:59,760 --> 00:11:02,480
Speaker 1: never seeing people that's good at it before. So the

201
00:11:02,559 --> 00:11:05,240
Speaker 1: scale is on the speed. It's very hard to to

202
00:11:05,280 --> 00:11:08,120
Speaker 1: replace these these jobs that are going away as quickly.

203
00:11:08,520 --> 00:11:12,199
Speaker 1: So Amazon needs one person for every two that Macy's

204
00:11:12,320 --> 00:11:14,600
Speaker 1: or nors for need to service the same amount of business.

205
00:11:14,640 --> 00:11:17,160
Speaker 1: So if Amazon growth this business twenty billion dollars this year,

206
00:11:17,200 --> 00:11:20,079
Speaker 1: which they will, we're gonna lose about fifty thou people.

207
00:11:20,120 --> 00:11:22,360
Speaker 1: And what is kind of a flat growth, zero growth

208
00:11:22,360 --> 00:11:26,120
Speaker 1: retail economy, meaning um, the Yankee stadium. Fill it up

209
00:11:26,240 --> 00:11:29,760
Speaker 1: with cashier's, merchants and security guards and you're kind of

210
00:11:29,800 --> 00:11:32,400
Speaker 1: out of business. Now, they're not doing anything wrong, but

211
00:11:32,480 --> 00:11:35,520
Speaker 1: it's happening at a scale we haven't we haven't seen before.

212
00:11:35,559 --> 00:11:38,880
Speaker 1: Amazon really is trying to take humans out of the

213
00:11:38,920 --> 00:11:42,720
Speaker 1: equation with technology. And that's why it's so this notion

214
00:11:42,760 --> 00:11:45,280
Speaker 1: of apologize and getting pull up the notion of a

215
00:11:45,280 --> 00:11:48,040
Speaker 1: wall unless you're gonna build a wall to keep out robots,

216
00:11:48,720 --> 00:11:50,760
Speaker 1: you know, it doesn't it's not going to help much. Right.

217
00:11:50,800 --> 00:11:54,640
Speaker 1: It's automation that's destroying jobs, not not not not other label.

218
00:11:54,920 --> 00:11:59,280
Speaker 1: Let's talk about cashiers and technology. Yeah, Amazon sets up

219
00:11:59,360 --> 00:12:02,560
Speaker 1: their cash cheerless stores. You go in, you just shop,

220
00:12:02,559 --> 00:12:05,679
Speaker 1: and you leave. The store knows what you bought and

221
00:12:05,880 --> 00:12:09,880
Speaker 1: Ormaic automatically bills you. This is just a small, little

222
00:12:09,920 --> 00:12:13,600
Speaker 1: test run. What how did that ripple out across the

223
00:12:13,800 --> 00:12:17,320
Speaker 1: entire retail universe. When Amazon teeth this up, there are

224
00:12:17,320 --> 00:12:21,240
Speaker 1: more cashiers in the US and teachers, and probably a

225
00:12:21,240 --> 00:12:23,720
Speaker 1: third of them lost their job when that one Amazon

226
00:12:23,800 --> 00:12:27,520
Speaker 1: go store open. Because every retail boardroom now, and I

227
00:12:27,559 --> 00:12:30,479
Speaker 1: mean a lot of them, is talking about store optimization,

228
00:12:30,600 --> 00:12:34,560
Speaker 1: which is Latin for fire cashiers and what's interesting barriers.

229
00:12:34,559 --> 00:12:36,960
Speaker 1: If you look at the retailers that are surviving in

230
00:12:37,000 --> 00:12:40,400
Speaker 1: the age of Amazon, they're the ones making incremental investments

231
00:12:40,400 --> 00:12:44,160
Speaker 1: and what I would call not artificial intelligence board organic intelligence,

232
00:12:44,640 --> 00:12:47,320
Speaker 1: investing in the golden aprons at home Depot, the castles

233
00:12:47,360 --> 00:12:50,319
Speaker 1: of for the the blue shirts at Best Buy. People

234
00:12:50,360 --> 00:12:53,400
Speaker 1: no longer go to stores for people for products. They

235
00:12:53,440 --> 00:12:55,240
Speaker 1: go for people. If you're gonna walk into a store,

236
00:12:55,600 --> 00:12:57,480
Speaker 1: you want expertise. You want someone to get you the

237
00:12:57,520 --> 00:12:58,880
Speaker 1: right product and get you out of there as quickly

238
00:12:58,880 --> 00:13:00,959
Speaker 1: as possible. You want someone to make a connection with you,

239
00:13:01,200 --> 00:13:03,800
Speaker 1: because you can get the product online, probably for less.

240
00:13:04,840 --> 00:13:07,280
Speaker 1: I have no doubt about that. My experience has been

241
00:13:07,920 --> 00:13:10,640
Speaker 1: with home Depot, that they went through a period of

242
00:13:10,679 --> 00:13:15,240
Speaker 1: cutting head count and then Lowe's comes along and suddenly

243
00:13:15,520 --> 00:13:17,880
Speaker 1: Home Depot is starting to hire people again. And you

244
00:13:17,920 --> 00:13:20,680
Speaker 1: can find someone in the aisles, and I think the

245
00:13:20,760 --> 00:13:24,600
Speaker 1: competition force that are we gonna see that same move

246
00:13:24,640 --> 00:13:29,360
Speaker 1: towards expertise in other retailers or is it just these

247
00:13:29,880 --> 00:13:35,120
Speaker 1: narrow specialty retailers that requires an expertise? I think the

248
00:13:35,120 --> 00:13:37,920
Speaker 1: answers Yes, so William Snelma, you're gonna find someone's passionate

249
00:13:37,960 --> 00:13:40,840
Speaker 1: about cooking. But home Depot does a fantastic job. They're

250
00:13:40,960 --> 00:13:44,080
Speaker 1: very well trained. And again I would argue that the

251
00:13:44,160 --> 00:13:47,960
Speaker 1: opportunity is to zague Amazon zigging and make these big

252
00:13:48,000 --> 00:13:52,040
Speaker 1: investments and incremental human capital. The original gangster here is Starbucks.

253
00:13:52,559 --> 00:13:54,679
Speaker 1: They spend more money on employee benefits and they spent

254
00:13:54,760 --> 00:13:57,960
Speaker 1: on coffee beans. I use the app. It's fantastic. I

255
00:13:58,000 --> 00:14:00,079
Speaker 1: come out of the subway. I owe to break this.

256
00:14:00,240 --> 00:14:02,520
Speaker 1: By the time I walked the three blocks to my office,

257
00:14:02,920 --> 00:14:05,680
Speaker 1: it's waiting for me. Nobody else does that. Yes, So now,

258
00:14:05,800 --> 00:14:08,360
Speaker 1: based on the amount of money stored in on the

259
00:14:08,400 --> 00:14:10,280
Speaker 1: Starbucks loyal through program, I think they're one of the

260
00:14:10,280 --> 00:14:12,240
Speaker 1: ten largest banks in the US right now. It's a

261
00:14:12,520 --> 00:14:14,800
Speaker 1: It's probably the best use of an app of a

262
00:14:14,840 --> 00:14:17,800
Speaker 1: retailer out there. But what doesn't get as much press

263
00:14:18,120 --> 00:14:20,320
Speaker 1: because we're you know, we're all obsessed with innovation as

264
00:14:20,360 --> 00:14:24,400
Speaker 1: a relationist technology is this crazy rational investment they made

265
00:14:24,520 --> 00:14:27,680
Speaker 1: in Baristas. And when you walk in, not only does

266
00:14:27,680 --> 00:14:30,120
Speaker 1: the smell good, but I think there's a nice light

267
00:14:30,200 --> 00:14:32,920
Speaker 1: feeling because I think the people working there just don't,

268
00:14:33,000 --> 00:14:35,240
Speaker 1: you know, don't hate their jobs. They may be going,

269
00:14:35,320 --> 00:14:38,040
Speaker 1: they may be getting a degree in Arizona State. They

270
00:14:38,080 --> 00:14:41,160
Speaker 1: have health care and they can afford to get They

271
00:14:41,160 --> 00:14:44,000
Speaker 1: attract the best people, and I think that creates a

272
00:14:44,040 --> 00:14:47,400
Speaker 1: different environment. And look what they do. They make you

273
00:14:47,520 --> 00:14:49,840
Speaker 1: especialty coffee, and they get you in and out of

274
00:14:49,880 --> 00:14:53,239
Speaker 1: their really fast. And the people seem pretty friendly and

275
00:14:53,240 --> 00:14:55,400
Speaker 1: pretty nice. So I'm a big fan of believing in

276
00:14:55,440 --> 00:14:57,680
Speaker 1: and this is a big issue. I think what we

277
00:14:57,760 --> 00:14:59,640
Speaker 1: need is I don't want to say we need left

278
00:15:00,080 --> 00:15:03,000
Speaker 1: less Jeff Bezos, but we definitely needs more Henry Fords.

279
00:15:03,040 --> 00:15:05,320
Speaker 1: And that is people who say I could pay my

280
00:15:05,360 --> 00:15:07,520
Speaker 1: employees two bucks an hour, but I'm gonna pay him

281
00:15:07,560 --> 00:15:10,280
Speaker 1: five because I think it's important we build a middle class.

282
00:15:10,320 --> 00:15:13,320
Speaker 1: What I was really disappointed. I spoke at a big

283
00:15:13,360 --> 00:15:16,640
Speaker 1: investor conference right after Jeff Bezos and he said that

284
00:15:16,720 --> 00:15:19,560
Speaker 1: he was a big supporter of universal guaranteed income. And

285
00:15:19,600 --> 00:15:22,800
Speaker 1: originally I thought, what a great guy, progressive values, and

286
00:15:22,840 --> 00:15:26,160
Speaker 1: then I increasingly got disappointed that the arguably the best

287
00:15:26,200 --> 00:15:28,680
Speaker 1: mind in business, the person who probably has more insight

288
00:15:28,720 --> 00:15:31,240
Speaker 1: into the future of business, has kind of given up

289
00:15:31,280 --> 00:15:34,240
Speaker 1: on what I believe is a key component of American identity,

290
00:15:34,600 --> 00:15:36,800
Speaker 1: something that is key to our relevance. And I think

291
00:15:36,800 --> 00:15:39,760
Speaker 1: and and happiness as we get older, and that is

292
00:15:39,800 --> 00:15:41,800
Speaker 1: a job. And I'd like to see all of the

293
00:15:41,960 --> 00:15:45,200
Speaker 1: CEOs and tex say, our objective here is not only

294
00:15:45,200 --> 00:15:48,040
Speaker 1: to increase your older value. Our objective is to massively

295
00:15:48,160 --> 00:15:51,960
Speaker 1: increase this wonderful thing that serves as a key component

296
00:15:52,640 --> 00:15:55,560
Speaker 1: of our self esteem and our identity as a nation.

297
00:15:55,640 --> 00:15:58,600
Speaker 1: And that his work and a job. In the Amazon chapter,

298
00:15:58,680 --> 00:16:02,240
Speaker 1: you push back a little bid on on Bezos, saying,

299
00:16:02,280 --> 00:16:05,680
Speaker 1: if you're concerned about universal income, well, then why don't

300
00:16:05,680 --> 00:16:08,800
Speaker 1: you pay your taxes? So they're not doing anything wrong.

301
00:16:08,880 --> 00:16:13,080
Speaker 1: But just as an example, since the Great Recession, Walmart

302
00:16:13,600 --> 00:16:16,360
Speaker 1: has paid sixty four billion dollars in corporate income tax

303
00:16:16,360 --> 00:16:18,920
Speaker 1: and Amazon has paid one point four That's a huge,

304
00:16:19,000 --> 00:16:23,440
Speaker 1: huge disadvantage for Walmart because Amazon has mastered this new

305
00:16:23,480 --> 00:16:26,720
Speaker 1: compact with the marketplace with storytelling. Where run your business

306
00:16:26,720 --> 00:16:30,480
Speaker 1: a break even and you have no leakage to um

307
00:16:30,520 --> 00:16:33,480
Speaker 1: the government, and there's nothing wrong with that. It's it's

308
00:16:33,520 --> 00:16:35,960
Speaker 1: a brilliant strategy and the markets have put up with it,

309
00:16:36,200 --> 00:16:38,160
Speaker 1: but there is a social cost to them. Well, the

310
00:16:38,280 --> 00:16:41,600
Speaker 1: question is the following. If if the most successful company

311
00:16:41,600 --> 00:16:43,200
Speaker 1: in the world, which a lot of people would argue

312
00:16:43,200 --> 00:16:46,600
Speaker 1: Amazon is right now, pays no corporate income tax, how

313
00:16:46,600 --> 00:16:49,320
Speaker 1: do we pay Our soldiers are firefighters and our social workers,

314
00:16:49,920 --> 00:16:52,560
Speaker 1: and taxes are to a certain centers real some game.

315
00:16:52,640 --> 00:16:54,800
Speaker 1: The answer is, well, the less successful company has got

316
00:16:54,800 --> 00:16:58,120
Speaker 1: to pay more. And then people say, okay, But any

317
00:16:58,160 --> 00:17:00,640
Speaker 1: company could adopt a strategy go to or break even.

318
00:17:00,680 --> 00:17:02,560
Speaker 1: But what we have in the marketplace right now is

319
00:17:02,600 --> 00:17:05,080
Speaker 1: once you go profitable, there really is no going back.

320
00:17:05,800 --> 00:17:08,280
Speaker 1: If if a company, if any sort of old economic

321
00:17:08,320 --> 00:17:10,760
Speaker 1: companies said we're gonna make massive investments in technology and

322
00:17:10,760 --> 00:17:14,320
Speaker 1: go to break even, be punished by the market, and

323
00:17:14,359 --> 00:17:17,480
Speaker 1: they might they might inside or catalyze or ignite a

324
00:17:17,520 --> 00:17:20,399
Speaker 1: downward spiral, that bit would be inextorable. So it's an

325
00:17:20,440 --> 00:17:23,480
Speaker 1: unusual situation. Good for Amazon, they figured it out. But

326
00:17:23,560 --> 00:17:26,040
Speaker 1: I wonder if at some point, if this keeps happening

327
00:17:26,520 --> 00:17:28,879
Speaker 1: where all the companies that get the majority soak up

328
00:17:28,920 --> 00:17:32,439
Speaker 1: the majority of the cheap capital in the marketplace are

329
00:17:32,520 --> 00:17:34,520
Speaker 1: running a break even if we might end up in

330
00:17:34,520 --> 00:17:37,000
Speaker 1: a system like and I'm not saying this is the

331
00:17:37,080 --> 00:17:39,879
Speaker 1: right economic model, but in Brazil they have a taxation system,

332
00:17:39,960 --> 00:17:42,600
Speaker 1: or once you get to a certain point, you pay

333
00:17:42,760 --> 00:17:46,320
Speaker 1: a certain a mt on top line revenues. But should

334
00:17:46,320 --> 00:17:47,880
Speaker 1: should a company be able to get to a half

335
00:17:47,880 --> 00:17:51,000
Speaker 1: a trillion dollars in value and not pay any meaningful

336
00:17:51,040 --> 00:17:53,840
Speaker 1: amount of taxes? That's I don't know the answer to that,

337
00:17:53,880 --> 00:17:56,119
Speaker 1: but I think it's a question worth asking. So to

338
00:17:56,320 --> 00:17:59,000
Speaker 1: brick and mortar questions, I have to ask. One is

339
00:18:00,040 --> 00:18:04,440
Speaker 1: Walmart paid something like three point three billion dollars for

340
00:18:04,560 --> 00:18:08,399
Speaker 1: jet dot Com and you describe that as the most

341
00:18:08,440 --> 00:18:11,960
Speaker 1: expensive set of hair plugs for a corporate midlife crisis.

342
00:18:12,640 --> 00:18:14,800
Speaker 1: Was that a bad purchase, were they able to make

343
00:18:14,840 --> 00:18:18,120
Speaker 1: any hay of it, or was that simply a Amazon's

344
00:18:18,119 --> 00:18:20,400
Speaker 1: eating on launch. We have to compete. So I said

345
00:18:20,440 --> 00:18:21,760
Speaker 1: at the time that I thought it was going to

346
00:18:21,840 --> 00:18:23,639
Speaker 1: be the biggest write down in retail, and it was

347
00:18:23,680 --> 00:18:26,119
Speaker 1: a bad acquisition. And the bottom line is I was wrong,

348
00:18:26,800 --> 00:18:28,960
Speaker 1: because if you look at a year later, what's happened.

349
00:18:30,080 --> 00:18:33,080
Speaker 1: Walmart has been able to announce year on year e

350
00:18:33,200 --> 00:18:36,040
Speaker 1: commerce sales worth of sixty plus percent because it was

351
00:18:36,080 --> 00:18:38,639
Speaker 1: in a jet and being able to get their mojo

352
00:18:38,720 --> 00:18:40,680
Speaker 1: back and kind of get off their heels. For a

353
00:18:40,720 --> 00:18:43,159
Speaker 1: company that's got a three billion dollar market cap or

354
00:18:43,160 --> 00:18:45,760
Speaker 1: to seventy whatever it is now is worth three billions.

355
00:18:45,760 --> 00:18:48,320
Speaker 1: So was the company? Was Jet dot Com worth three billion?

356
00:18:48,440 --> 00:18:50,960
Speaker 1: I don't think so. Was it worth three billion to Walmart?

357
00:18:51,080 --> 00:18:53,280
Speaker 1: It looks like it was. I was wrong. So let's

358
00:18:53,280 --> 00:18:57,199
Speaker 1: talk about another giant acquisition, only this time it's the

359
00:18:57,240 --> 00:19:01,760
Speaker 1: opposite um uh an Internet play buying a brick and

360
00:19:01,800 --> 00:19:06,400
Speaker 1: mortar routine, which is Amazon buying Whole Foods. What does

361
00:19:06,440 --> 00:19:10,280
Speaker 1: Whole Foods do for Amazon? I think it's transformative. I

362
00:19:10,320 --> 00:19:13,440
Speaker 1: think the acquisition of Whole Foods will be to Amazon

363
00:19:13,560 --> 00:19:16,760
Speaker 1: what Facebook was, excuse me, what Instagram was to Facebook.

364
00:19:16,760 --> 00:19:18,280
Speaker 1: I think it's going to be the best acquisition of

365
00:19:18,280 --> 00:19:22,199
Speaker 1: the last since Facebook acquired Instagram. When you think about this,

366
00:19:22,359 --> 00:19:25,320
Speaker 1: very Amazon strategy is to create a relationship with you

367
00:19:25,359 --> 00:19:28,440
Speaker 1: that's so intense across prime that you begin to buy everything,

368
00:19:28,480 --> 00:19:30,640
Speaker 1: and they're going to move to artificial intelligence and zero

369
00:19:30,640 --> 00:19:34,439
Speaker 1: click ordering, zero click ordering, zerio click order. Explain that

370
00:19:34,480 --> 00:19:37,040
Speaker 1: this is the two box theory. Is that right, exactly right?

371
00:19:37,080 --> 00:19:38,879
Speaker 1: Pretty soon, they're gonna say, Barry, we know you, we

372
00:19:38,920 --> 00:19:41,240
Speaker 1: love you, you you love us. We have your credit card history,

373
00:19:41,320 --> 00:19:42,720
Speaker 1: we have we know where you live, we have a

374
00:19:42,760 --> 00:19:46,120
Speaker 1: warehouse within twenty miles of you. We're gonna we're gonna

375
00:19:46,160 --> 00:19:47,960
Speaker 1: start sending you stuff before you know you want it,

376
00:19:47,960 --> 00:19:51,000
Speaker 1: because we think we know, and we'll get right send

377
00:19:51,040 --> 00:19:54,960
Speaker 1: the stuff you don't want back and manicure using Alexa.

378
00:19:55,119 --> 00:19:57,359
Speaker 1: Say Alex, I'm leaving for two weeks. Alexa, send me

379
00:19:57,440 --> 00:20:00,879
Speaker 1: six quotes for auto insurance via email. Alexa, I like

380
00:20:01,359 --> 00:20:03,800
Speaker 1: stell our toy, I don't like lagunitas I p A

381
00:20:03,840 --> 00:20:06,040
Speaker 1: and you'll manicure it. And you're just gonna give all

382
00:20:06,080 --> 00:20:10,040
Speaker 1: your low consideration tedious purchases, which are kind of our purchases,

383
00:20:10,119 --> 00:20:14,879
Speaker 1: the junk stuff that we all have toilet paper. And

384
00:20:14,920 --> 00:20:16,320
Speaker 1: this is what if you know, I don't know that

385
00:20:16,359 --> 00:20:18,600
Speaker 1: if they're doing this, but if I was running Amazon strategy,

386
00:20:18,680 --> 00:20:20,440
Speaker 1: this is I'd be focused on a pilot test in

387
00:20:20,440 --> 00:20:23,080
Speaker 1: a college area called Prime Squared or zero click ordering.

388
00:20:23,560 --> 00:20:26,199
Speaker 1: They'll they'll do it, they'll announce it. There'll be some kinks,

389
00:20:26,280 --> 00:20:29,359
Speaker 1: people will love it. It'll go take prime household. Some

390
00:20:30,280 --> 00:20:32,120
Speaker 1: of your average men to seven thousand of stock will

391
00:20:32,119 --> 00:20:34,760
Speaker 1: become anti gravity. The entire world's gonna freak out, and

392
00:20:34,800 --> 00:20:38,520
Speaker 1: we're gonna break them up. Let's discuss the cult quote

393
00:20:38,600 --> 00:20:42,639
Speaker 1: unquote of Apple. How did that ever develop? So we

394
00:20:42,760 --> 00:20:46,719
Speaker 1: have our religion. We Steve Jobs is our Jesus Christ.

395
00:20:47,280 --> 00:20:49,440
Speaker 1: This is we no longer worship at the altar of

396
00:20:49,560 --> 00:20:52,520
Speaker 1: kindness or character. We worship at the altar of innovation

397
00:20:52,560 --> 00:20:56,399
Speaker 1: and shareholder value. And this is the individual whose vision

398
00:20:56,400 --> 00:20:59,480
Speaker 1: and genius created more shareholder value than any company in history,

399
00:20:59,520 --> 00:21:03,600
Speaker 1: which is effectively how we decide in a capitalist society,

400
00:21:03,640 --> 00:21:07,080
Speaker 1: who are Jesus Christ is? And the iPhone has become

401
00:21:07,119 --> 00:21:10,040
Speaker 1: the new object of dentification. It's the new cross. They

402
00:21:10,040 --> 00:21:11,960
Speaker 1: shouldn't call it the iPhone X, they should call it

403
00:21:11,960 --> 00:21:15,399
Speaker 1: the iPhone cross. It has a special place in our lives.

404
00:21:15,440 --> 00:21:19,000
Speaker 1: We we deem it holier than any other object in

405
00:21:19,040 --> 00:21:21,920
Speaker 1: the in the world, I would argue at this point,

406
00:21:21,920 --> 00:21:25,280
Speaker 1: and this is a company that decided we no longer

407
00:21:25,320 --> 00:21:27,159
Speaker 1: want to be the best house and the worst neighborhood

408
00:21:27,160 --> 00:21:30,040
Speaker 1: computer hardware which appeals to a rational organ the brain,

409
00:21:30,119 --> 00:21:32,560
Speaker 1: when the brain is a terrible competitor, starts out all

410
00:21:32,560 --> 00:21:36,119
Speaker 1: the margin. We want to appeal to the reproductive organs,

411
00:21:36,160 --> 00:21:39,520
Speaker 1: which are a rational decision making organs. And as a result,

412
00:21:39,640 --> 00:21:41,560
Speaker 1: people will decide they want to look cool, they want

413
00:21:41,560 --> 00:21:43,960
Speaker 1: to communicate success and innovation, and that they have good

414
00:21:44,040 --> 00:21:47,119
Speaker 1: genes to mates. And you end up with the margins.

415
00:21:47,160 --> 00:21:49,879
Speaker 1: And and this Apple has the operating margins somewhere between

416
00:21:49,880 --> 00:21:53,480
Speaker 1: our mes and Ferrari. So let's let's talk about that

417
00:21:53,480 --> 00:21:56,920
Speaker 1: a little bit. Because the iPhone accounts for less than

418
00:21:56,960 --> 00:22:01,760
Speaker 1: twenty of all of the smartphones shift globally, but it

419
00:22:01,800 --> 00:22:08,000
Speaker 1: accounts for the industry's profits. How can you dominate both

420
00:22:08,800 --> 00:22:12,840
Speaker 1: sales volume and margin. They've pulled off the impossible in

421
00:22:12,920 --> 00:22:18,040
Speaker 1: business through a focus on appeal to our desire to

422
00:22:18,040 --> 00:22:20,680
Speaker 1: be more attractive to others and becoming a luxury brand.

423
00:22:20,680 --> 00:22:23,439
Speaker 1: First tech company to become a luxury brand that is

424
00:22:23,440 --> 00:22:25,720
Speaker 1: both the low cost producer the most popular phone in

425
00:22:25,720 --> 00:22:29,679
Speaker 1: the world, outstanding supply chains. They secure the components at

426
00:22:29,680 --> 00:22:32,000
Speaker 1: the lowest price at the same time that the premium

427
00:22:32,040 --> 00:22:34,400
Speaker 1: price product. No company has ever pulled us off in history,

428
00:22:34,440 --> 00:22:38,520
Speaker 1: the auto equivalent would be um an auto company with

429
00:22:38,560 --> 00:22:41,120
Speaker 1: the margins of Ferrari in the production volumes of Toyota.

430
00:22:41,520 --> 00:22:43,720
Speaker 1: So as a result, Apple this quarter will do double

431
00:22:43,760 --> 00:22:46,800
Speaker 1: the profits Amazon has done in its entire history. Apple

432
00:22:46,840 --> 00:22:49,200
Speaker 1: will do more than the profits of the other three combined.

433
00:22:49,720 --> 00:22:52,879
Speaker 1: And you need to get Toyota, Daimler, Bend's, Unilever, and

434
00:22:52,960 --> 00:22:56,480
Speaker 1: PNG wrapped up to begin to talk about the profits

435
00:22:56,520 --> 00:22:58,560
Speaker 1: of Apple. We don't We really don't have a sense

436
00:22:58,600 --> 00:23:02,960
Speaker 1: for the scale of just an unbelievable profit machine Apple is.

437
00:23:03,480 --> 00:23:09,280
Speaker 1: So your big bold insight some time ago was that

438
00:23:09,400 --> 00:23:12,840
Speaker 1: Apple wasn't a tech company, but it was a luxury brands,

439
00:23:13,280 --> 00:23:17,360
Speaker 1: which is very counterintuitive and not especially obvious. How did

440
00:23:17,400 --> 00:23:21,160
Speaker 1: you work your way towards that that conclusion? The components

441
00:23:21,160 --> 00:23:25,600
Speaker 1: of our luxury brand, I mean, it's literally play for play.

442
00:23:25,320 --> 00:23:27,880
Speaker 1: They sat down in some room at some point and said,

443
00:23:27,960 --> 00:23:30,720
Speaker 1: we are a luxury brand. What do luxury brands have

444
00:23:30,760 --> 00:23:33,600
Speaker 1: in common? They have an iconic founder, right, so we

445
00:23:33,680 --> 00:23:36,880
Speaker 1: have that they have a focus on artisanship and design

446
00:23:37,040 --> 00:23:40,439
Speaker 1: and art. We have that they have a focus on

447
00:23:40,640 --> 00:23:43,760
Speaker 1: vertical retail. So Apple is much more like a Vetan

448
00:23:43,880 --> 00:23:46,560
Speaker 1: store than it is a best Buy, and that was

449
00:23:46,640 --> 00:23:50,080
Speaker 1: really the genius move that the crazy irrational decision afford

450
00:23:50,080 --> 00:23:52,159
Speaker 1: integrated into stores. I think it's the one decision that

451
00:23:52,160 --> 00:23:54,560
Speaker 1: created more shareholder value than any decision in the history

452
00:23:54,600 --> 00:23:57,240
Speaker 1: of business. Can you imagine Steve Jobs and only he

453
00:23:57,280 --> 00:23:58,879
Speaker 1: could have pulled us off going into his board in

454
00:23:58,880 --> 00:24:00,439
Speaker 1: the early two thousands said you know what, I have

455
00:24:00,480 --> 00:24:03,399
Speaker 1: an idea. We're doing okay, not great, but I have

456
00:24:03,440 --> 00:24:07,840
Speaker 1: an idea stores. This was when stores were literally starting

457
00:24:07,880 --> 00:24:10,960
Speaker 1: to begin their march downward and now they have between

458
00:24:10,960 --> 00:24:13,800
Speaker 1: five and six billion dollars and leases on stores. The

459
00:24:13,840 --> 00:24:17,720
Speaker 1: reason why Samsung is not is always behind Apple in

460
00:24:17,800 --> 00:24:19,880
Speaker 1: terms of brand equity and hasn't generated as much share

461
00:24:19,880 --> 00:24:22,600
Speaker 1: older value. It's not because of technology. They have more

462
00:24:22,640 --> 00:24:25,560
Speaker 1: software engineers and Microsoft. I would argue that the Samsung

463
00:24:25,640 --> 00:24:28,560
Speaker 1: Galaxy is a better phone. It's because they don't have

464
00:24:28,640 --> 00:24:32,120
Speaker 1: vertical distribution. Apple's decided, in order to control the experience

465
00:24:32,160 --> 00:24:34,600
Speaker 1: and be a luxury brand like a Batan of Bouteko Vanetta,

466
00:24:34,600 --> 00:24:38,560
Speaker 1: a Gucci, you gotta control the moment of contact with distribution,

467
00:24:38,760 --> 00:24:41,679
Speaker 1: and they made this crazy rational decision Afford integrate so

468
00:24:41,680 --> 00:24:44,399
Speaker 1: they have vertical retail, they put models on stage, they

469
00:24:44,400 --> 00:24:47,240
Speaker 1: put Christie Turlington. It's not a it's not a product launch,

470
00:24:47,280 --> 00:24:50,639
Speaker 1: it's a fashion show. They buy pages in Vogue magazine.

471
00:24:50,680 --> 00:24:55,720
Speaker 1: This is literally they have literally stolen the luxury playbook

472
00:24:55,800 --> 00:24:58,919
Speaker 1: and it has been the most enormously value of creating

473
00:24:58,920 --> 00:25:03,399
Speaker 1: decision in history. Low cost producer, premium price product. No

474
00:25:03,480 --> 00:25:05,439
Speaker 1: other business in the history business has been able to

475
00:25:05,480 --> 00:25:08,439
Speaker 1: pull this off. So somebody else you push back on

476
00:25:08,560 --> 00:25:12,040
Speaker 1: in the book is Steve Jobs, And you wrote you

477
00:25:12,040 --> 00:25:15,240
Speaker 1: would be amazed at how many people still believe, against

478
00:25:15,359 --> 00:25:20,120
Speaker 1: all evidence, that Steve Jobs actually invented all of Apple's

479
00:25:20,440 --> 00:25:25,080
Speaker 1: great products. So why the no warm fuzzies? Uh for

480
00:25:25,080 --> 00:25:30,040
Speaker 1: for the founder of of Apple. So I admitted least

481
00:25:30,040 --> 00:25:34,280
Speaker 1: Steve Jobs a genius, um, tremendous, tremendous wealth creation and

482
00:25:34,359 --> 00:25:37,719
Speaker 1: innovator and icon for a business. I think it's an

483
00:25:37,720 --> 00:25:40,159
Speaker 1: example of again that we worship at the altar of

484
00:25:40,240 --> 00:25:43,800
Speaker 1: innovation as opposed to kindness and character. There's some personal

485
00:25:43,840 --> 00:25:46,280
Speaker 1: attributes and behavior here that you wouldn't describe as being,

486
00:25:46,880 --> 00:25:49,679
Speaker 1: you know, making him a quote unquote wonderful man, but

487
00:25:49,760 --> 00:25:51,800
Speaker 1: he has largely seen I would argue as kind of

488
00:25:51,840 --> 00:25:55,639
Speaker 1: the hero of a capitalist society. So I don't I

489
00:25:55,720 --> 00:25:59,240
Speaker 1: think it's an indicator that that, you know, our heroes

490
00:25:59,520 --> 00:26:02,720
Speaker 1: are friend I don't know. I think the four we've

491
00:26:03,480 --> 00:26:06,560
Speaker 1: we've started to believe personify these companies and think of

492
00:26:06,560 --> 00:26:08,520
Speaker 1: them as heroes, and we need to be honest that

493
00:26:08,560 --> 00:26:10,240
Speaker 1: these companies aren't going to take care of us when

494
00:26:10,240 --> 00:26:12,600
Speaker 1: we get older. They aren't concerned with the condition of

495
00:26:12,600 --> 00:26:15,320
Speaker 1: our soul. They're they're for profit companies and they're doing

496
00:26:15,320 --> 00:26:17,960
Speaker 1: what they should be doing, and that's maximizing profits. But

497
00:26:18,560 --> 00:26:21,000
Speaker 1: I wonder sometime because we personify them, we have so

498
00:26:21,080 --> 00:26:23,359
Speaker 1: much admiration for this person, and we think with us

499
00:26:23,359 --> 00:26:25,879
Speaker 1: as being in a relationship, that we grant them the

500
00:26:25,920 --> 00:26:28,560
Speaker 1: mother of all hall passes and they are not subject

501
00:26:28,640 --> 00:26:31,320
Speaker 1: to the same scrutiny as the rest of business. Let's

502
00:26:31,359 --> 00:26:34,640
Speaker 1: talk a little bit about Facebook. You note they own

503
00:26:34,880 --> 00:26:38,000
Speaker 1: three of the five platforms that got to a hundred

504
00:26:38,040 --> 00:26:44,560
Speaker 1: million users the fastest, Facebook, WhatsApp, and Instagram. People I

505
00:26:44,600 --> 00:26:48,720
Speaker 1: recall laughed at the Instagram purchase. Oh look at this kid.

506
00:26:48,760 --> 00:26:50,760
Speaker 1: Doesn't know what the hell he's doing. He's wasting this money.

507
00:26:51,200 --> 00:26:55,639
Speaker 1: How did Instagram work out as a purchase. Yeah, you

508
00:26:55,680 --> 00:26:58,680
Speaker 1: know the answer, A billion dollars. Everyone's second guessed it.

509
00:26:58,680 --> 00:27:01,680
Speaker 1: It's probably worth similar between sixty billion now by most

510
00:27:01,720 --> 00:27:05,639
Speaker 1: traditional metrics. Probably the best acquisition and tech of the

511
00:27:05,720 --> 00:27:10,640
Speaker 1: last twenty years and a big bold bet. Just incredibly

512
00:27:10,720 --> 00:27:16,320
Speaker 1: smart visuals kept the growth going, maintain passion among millennials.

513
00:27:16,359 --> 00:27:19,399
Speaker 1: It's just a it's been a it's been a fantastic acquisition.

514
00:27:19,440 --> 00:27:21,560
Speaker 1: You were talking about apps. If the phone is the

515
00:27:21,560 --> 00:27:24,199
Speaker 1: most important screen in our lives and the most important

516
00:27:24,200 --> 00:27:27,760
Speaker 1: technology device of time spent on a phone is in

517
00:27:27,960 --> 00:27:30,920
Speaker 1: app and six of the top ten apps are owned

518
00:27:30,960 --> 00:27:34,000
Speaker 1: by Facebook. So the phone, the phone isn't a piece

519
00:27:34,000 --> 00:27:38,200
Speaker 1: of technology, it's basically the utility for Facebook Inc. It's

520
00:27:38,240 --> 00:27:42,240
Speaker 1: an app delivery vehicle or Facebook Wow. And I spend

521
00:27:42,280 --> 00:27:44,840
Speaker 1: as little time on Facebook as I humanly can. But

522
00:27:45,000 --> 00:27:48,600
Speaker 1: I'm not their prime demographic. Yeah, we're no longer the market, right.

523
00:27:49,280 --> 00:27:52,200
Speaker 1: It's millennials now having more disposed mile income than boomers,

524
00:27:52,840 --> 00:27:55,680
Speaker 1: and that's they're the most influential. And if you look

525
00:27:55,680 --> 00:27:57,560
Speaker 1: at what a lot of consumer brands now have in

526
00:27:57,640 --> 00:28:01,240
Speaker 1: common that are dramatically growing, they're sure holder value is

527
00:28:02,040 --> 00:28:06,040
Speaker 1: as a competence a core competence is Instagram. That's interesting.

528
00:28:06,280 --> 00:28:09,640
Speaker 1: So you're talking the book about the creepy factor. Um,

529
00:28:09,720 --> 00:28:11,800
Speaker 1: one of the reasons I spend so little time on

530
00:28:11,800 --> 00:28:15,080
Speaker 1: Facebook is that I've learned. If I'm logged in on

531
00:28:15,200 --> 00:28:18,480
Speaker 1: any device on Facebook and I'm looking at an AD

532
00:28:18,520 --> 00:28:20,720
Speaker 1: because I'm looking for some information. If I go to

533
00:28:20,720 --> 00:28:24,360
Speaker 1: a website, that damn ad follows me around the Internet

534
00:28:24,400 --> 00:28:27,040
Speaker 1: for the next four weeks, and I despise it. I

535
00:28:27,119 --> 00:28:30,119
Speaker 1: just I'm not looking to buy a corvette. I just

536
00:28:30,240 --> 00:28:33,159
Speaker 1: was curious as to some information on it. So the

537
00:28:33,200 --> 00:28:35,480
Speaker 1: only way to avoid that is to never be logged

538
00:28:35,480 --> 00:28:39,480
Speaker 1: into Facebook except for the moment you're using Facebook. I

539
00:28:39,640 --> 00:28:43,400
Speaker 1: find that creepy. The millennials don't really seem to find

540
00:28:43,400 --> 00:28:47,360
Speaker 1: that creepy at all. So that that's that's, you know,

541
00:28:47,400 --> 00:28:49,640
Speaker 1: triple a ball. That's not even the major leaders of creepiness.

542
00:28:49,640 --> 00:28:51,800
Speaker 1: Where you're talking about is retargeting, and that happens on

543
00:28:51,840 --> 00:28:54,000
Speaker 1: any website. They drop a cookie, it follows you around

544
00:28:54,000 --> 00:28:55,800
Speaker 1: the way. But the things you could do, you could

545
00:28:55,800 --> 00:28:57,640
Speaker 1: set up ad blockers, you could set up do you

546
00:28:57,680 --> 00:29:02,440
Speaker 1: know that you could retake some of your privacy Facebook?

547
00:29:02,520 --> 00:29:05,440
Speaker 1: You really are at the mercy of of Well, you'll

548
00:29:05,480 --> 00:29:08,200
Speaker 1: have scared creepier moments in this You'll be at I

549
00:29:08,200 --> 00:29:09,600
Speaker 1: I don't know. For some reason, I think you would

550
00:29:09,600 --> 00:29:13,240
Speaker 1: like Springston, or you at a Springsteen concert and your

551
00:29:13,240 --> 00:29:15,480
Speaker 1: Facebook app is open, which means it has a mic

552
00:29:15,840 --> 00:29:17,640
Speaker 1: and they use it to target ads, and you'll get

553
00:29:17,680 --> 00:29:20,120
Speaker 1: an ad for Springston's latest album. Where at the concert?

554
00:29:20,200 --> 00:29:23,520
Speaker 1: So it gets report that's right out of it, getting

555
00:29:23,600 --> 00:29:25,680
Speaker 1: right there. But here's the thing. Our generation is a

556
00:29:25,720 --> 00:29:29,760
Speaker 1: little bit freaked out about that stuff. The Europeans are

557
00:29:29,880 --> 00:29:33,480
Speaker 1: much more concerned with it. But millennial Americans, who are

558
00:29:34,000 --> 00:29:37,040
Speaker 1: kind of setting the tone for shareholder value creation, they're

559
00:29:37,160 --> 00:29:40,560
Speaker 1: very comfortable with with an invasion of privacy as long

560
00:29:40,600 --> 00:29:43,800
Speaker 1: as there's utility in it. So the number of people

561
00:29:43,880 --> 00:29:47,440
Speaker 1: clear their cookies is really small. The fact that Google

562
00:29:47,520 --> 00:29:50,880
Speaker 1: Maps is amazing, but Google knows where you are, and

563
00:29:50,960 --> 00:29:54,040
Speaker 1: could I find a creepy when Uber sends me a

564
00:29:54,120 --> 00:29:56,640
Speaker 1: receipts showing me what the path was I took to

565
00:29:56,640 --> 00:29:59,760
Speaker 1: get home and where I was the difference between the

566
00:29:59,800 --> 00:30:04,440
Speaker 1: two is my life experience with Google is I'm okay

567
00:30:04,480 --> 00:30:07,760
Speaker 1: with them having that that information because they don't creep

568
00:30:07,800 --> 00:30:10,880
Speaker 1: me out with it, but Facebook does. There's also a

569
00:30:10,920 --> 00:30:14,440
Speaker 1: different in complexion. When you listen to Eric Schmidt speak,

570
00:30:14,720 --> 00:30:17,120
Speaker 1: he goes out of his way to say that whenever

571
00:30:17,200 --> 00:30:20,240
Speaker 1: we release data, we anonymize. We get to go to

572
00:30:20,280 --> 00:30:23,200
Speaker 1: a lot of lengths not to connect specific identity with

573
00:30:23,240 --> 00:30:25,760
Speaker 1: your searches. Because if you really want to talk about

574
00:30:25,840 --> 00:30:29,800
Speaker 1: social chaos and the hack, it would be the worst

575
00:30:29,800 --> 00:30:32,880
Speaker 1: hack in the history of mankind. Is if someone hacked

576
00:30:32,880 --> 00:30:36,760
Speaker 1: into Google and could put post your name, your face

577
00:30:37,000 --> 00:30:39,800
Speaker 1: above everything you've put into a Google search query box.

578
00:30:40,360 --> 00:30:42,680
Speaker 1: I mean, you really think about everything you've put in

579
00:30:42,680 --> 00:30:46,200
Speaker 1: that search querry box, and you're going to get terrified fast.

580
00:30:46,280 --> 00:30:49,400
Speaker 1: Not only that's what incognito browsers are for, if you're

581
00:30:49,400 --> 00:30:52,800
Speaker 1: really doing something and no one doesn't temptable really well,

582
00:30:53,000 --> 00:30:55,800
Speaker 1: as far as I know, and I'm old school, I guess, well,

583
00:30:55,880 --> 00:30:58,560
Speaker 1: you're my senses, you're in the one percent I don't think.

584
00:30:58,640 --> 00:31:01,600
Speaker 1: I think most people do, and they have absolutely no

585
00:31:02,960 --> 00:31:08,040
Speaker 1: We trust Google with questions and information about ourselves, not

586
00:31:08,120 --> 00:31:10,280
Speaker 1: only what ailments but we have but we're worried about

587
00:31:10,280 --> 00:31:12,960
Speaker 1: getting not only what if we're getting divorce? Are we

588
00:31:13,040 --> 00:31:18,600
Speaker 1: thinking about divorce? There would be social chaos if Google

589
00:31:18,640 --> 00:31:21,800
Speaker 1: got hacked, now, that's the scariest thing that could happen.

590
00:31:21,960 --> 00:31:25,120
Speaker 1: But Eric Schmidt and Google are smart to put forward this,

591
00:31:25,920 --> 00:31:30,360
Speaker 1: at least the impression they understand how scary it might be. Facebook,

592
00:31:30,400 --> 00:31:35,080
Speaker 1: since Beacon concerns the age and the youth of the company.

593
00:31:35,120 --> 00:31:39,040
Speaker 1: The average age of Cleveland Cavalier's basketball players twenty nine,

594
00:31:39,040 --> 00:31:41,880
Speaker 1: the average age of a Facebook employees twenty eight. And

595
00:31:42,000 --> 00:31:44,400
Speaker 1: I believe that that youth means that they are not

596
00:31:44,560 --> 00:31:48,320
Speaker 1: quite as concerned about some of the stuff. Uh. It

597
00:31:48,360 --> 00:31:52,800
Speaker 1: feels as if while Google has the potential to be

598
00:31:52,880 --> 00:31:56,280
Speaker 1: the king of creepy, where it might happen is Facebook

599
00:31:56,280 --> 00:31:59,800
Speaker 1: because they seem less concerned. So let's talk about Zuckerberg

600
00:31:59,840 --> 00:32:05,240
Speaker 1: and Schmidt. These are two really fascinating ceo s. Let's

601
00:32:05,240 --> 00:32:08,040
Speaker 1: grade him. What do you Zuckerberg is? What is that?

602
00:32:08,200 --> 00:32:12,360
Speaker 1: Is that? His age? How has he done as a CEO? As?

603
00:32:12,600 --> 00:32:15,080
Speaker 1: Is he an upside surprise? Yeah? I think you've I

604
00:32:15,080 --> 00:32:18,320
Speaker 1: think you've you've, you've you've put him in a time machine.

605
00:32:18,360 --> 00:32:20,880
Speaker 1: I think he's really thirties now, like he's a he's

606
00:32:20,880 --> 00:32:26,000
Speaker 1: an extraordinarily talented young man. Best acquisitions in business history,

607
00:32:26,520 --> 00:32:29,280
Speaker 1: most successful thing in the history of mankind is probably

608
00:32:29,280 --> 00:32:32,280
Speaker 1: the Facebook feed. Over two billion people have a meaningful

609
00:32:32,320 --> 00:32:37,320
Speaker 1: relationship with Facebook. That's more than capitalism, communism. You know.

610
00:32:37,360 --> 00:32:39,240
Speaker 1: The only thing I could think that has more meaningful

611
00:32:39,240 --> 00:32:42,520
Speaker 1: relationships might be soccer. So there's just no getting around it.

612
00:32:42,600 --> 00:32:46,719
Speaker 1: He's He's an incredible you know, gonna first time Hall

613
00:32:46,800 --> 00:32:49,920
Speaker 1: of Fame CEO. I think it's fantastic. Mark Andreeson described

614
00:32:50,000 --> 00:32:53,720
Speaker 1: him as a learning machine, which is really fascinating because

615
00:32:54,240 --> 00:32:57,000
Speaker 1: that helps to explain why some of these acquisitions have

616
00:32:57,120 --> 00:33:00,560
Speaker 1: been so insightful. So ahead of the carb what about

617
00:33:00,640 --> 00:33:03,320
Speaker 1: what about Eric Schmidt? How do you rank him as

618
00:33:03,600 --> 00:33:07,959
Speaker 1: a Texis? All of these guys are incredible guys and gals.

619
00:33:08,600 --> 00:33:14,800
Speaker 1: They're all, I mean, just just incredible people managers who've

620
00:33:14,800 --> 00:33:16,600
Speaker 1: created a tremenishire holder value. I don't I don't think

621
00:33:16,600 --> 00:33:19,280
Speaker 1: there's any getting around it. I think Mark Zuckerberg has

622
00:33:19,320 --> 00:33:21,200
Speaker 1: had a very interesting fork in the road. I think

623
00:33:21,200 --> 00:33:26,040
Speaker 1: he has the ability right now to to really um

624
00:33:26,400 --> 00:33:29,000
Speaker 1: mess up Facebook and his reputation. I think we're on

625
00:33:29,040 --> 00:33:33,440
Speaker 1: the precipice of a seminal tobacco industry moment with this

626
00:33:34,200 --> 00:33:37,320
Speaker 1: potentially congressional hearings when remember in the eighties when tobacco

627
00:33:37,400 --> 00:33:40,280
Speaker 1: executives stood up in front of Congress and there was

628
00:33:40,280 --> 00:33:42,160
Speaker 1: a bunch of sixties something white guys and they all

629
00:33:42,240 --> 00:33:48,920
Speaker 1: lied Tobacco's addictive. We may have another, We may have

630
00:33:48,960 --> 00:33:51,120
Speaker 1: another one of those moments when a bunch of thirty

631
00:33:51,120 --> 00:33:53,320
Speaker 1: and fourty year old men and women stand in front

632
00:33:53,320 --> 00:33:56,120
Speaker 1: of Commress and say, we're not a media company. So

633
00:33:56,200 --> 00:33:59,040
Speaker 1: let's talk a little bit about that. Facebook and Google

634
00:33:59,360 --> 00:34:05,120
Speaker 1: are they meet your companies? There's no doubt in your mind. Okay,

635
00:34:05,160 --> 00:34:08,080
Speaker 1: Facebook spending a billion dollars in original content, spending money

636
00:34:08,080 --> 00:34:10,760
Speaker 1: on sports leagues for them to produce original content. Campbell

637
00:34:10,760 --> 00:34:15,839
Speaker 1: Brown gets hired to oversee news of Americans get six

638
00:34:16,360 --> 00:34:20,719
Speaker 1: of their news from Facebook, and you run content. I'm sorry,

639
00:34:20,719 --> 00:34:23,960
Speaker 1: you run advertising against this content? Sounds like media to

640
00:34:24,000 --> 00:34:26,840
Speaker 1: make I mean, I don't they define what it is

641
00:34:26,880 --> 00:34:28,640
Speaker 1: to be a media company. And then they come up

642
00:34:28,640 --> 00:34:32,440
Speaker 1: with these excuses, Well, we have more technologists than journalists.

643
00:34:32,760 --> 00:34:35,720
Speaker 1: The NBA has more people working in technology than players.

644
00:34:35,800 --> 00:34:37,879
Speaker 1: Are they a tech company or a sports league? There

645
00:34:37,800 --> 00:34:41,680
Speaker 1: are sports league the leverages technology. So your business model

646
00:34:41,719 --> 00:34:45,239
Speaker 1: that kind of defines who you are. They are. Facebook

647
00:34:45,280 --> 00:34:49,360
Speaker 1: has warmly embraced the celebrity, the margins and the influence

648
00:34:49,400 --> 00:34:52,640
Speaker 1: of a media company and has decided that they're allergic

649
00:34:52,719 --> 00:34:57,160
Speaker 1: to the responsibilities. It is totally unacceptable. So what can

650
00:34:57,200 --> 00:35:00,880
Speaker 1: we do to get companies like Facebook and Google to

651
00:35:01,200 --> 00:35:05,800
Speaker 1: accept their role as responsible media companies. It's a fair question.

652
00:35:06,080 --> 00:35:08,680
Speaker 1: Um so you saw it looks like the UK is

653
00:35:08,680 --> 00:35:11,520
Speaker 1: going to regulate them as media companies. I'm not entirely

654
00:35:11,560 --> 00:35:15,399
Speaker 1: sure what that means. Um you could. There's different ways

655
00:35:15,520 --> 00:35:19,520
Speaker 1: advertisers can boycott, consumers have to decide what what they

656
00:35:19,520 --> 00:35:22,520
Speaker 1: should do. But I think what's going to happen is

657
00:35:22,520 --> 00:35:26,000
Speaker 1: you're going to see the mother of all fines but

658
00:35:26,440 --> 00:35:28,560
Speaker 1: against one or more of these companies. But it's not

659
00:35:28,560 --> 00:35:29,920
Speaker 1: going to come from where we think it's going to

660
00:35:30,000 --> 00:35:31,880
Speaker 1: come from. It's going to come out of Europe. The

661
00:35:32,400 --> 00:35:37,080
Speaker 1: big war brewing UH is gonna start where a lot

662
00:35:37,120 --> 00:35:38,960
Speaker 1: of the major conflicts have started. It's going to start

663
00:35:39,000 --> 00:35:42,200
Speaker 1: in continental Europe, and you're gonna see them go after

664
00:35:42,560 --> 00:35:46,360
Speaker 1: um one or all of these companies. But the weaponization

665
00:35:46,600 --> 00:35:50,160
Speaker 1: of these platforms by an intelligence arm of Russia, in

666
00:35:50,200 --> 00:35:52,840
Speaker 1: my opinion, is the tipping point where people are just

667
00:35:53,120 --> 00:35:55,960
Speaker 1: fed up with these guys, So what is that going

668
00:35:56,040 --> 00:35:58,759
Speaker 1: to mean for their actual business? You know, if you

669
00:35:58,800 --> 00:36:04,000
Speaker 1: want to boycott somebody who's CEO said something really stupid

670
00:36:04,000 --> 00:36:06,440
Speaker 1: and not by their twinkies or whatever it is, you

671
00:36:06,480 --> 00:36:08,839
Speaker 1: can do that. Were you gonna go for search, where

672
00:36:08,840 --> 00:36:10,800
Speaker 1: you're gonna go for social media that really are in

673
00:36:10,880 --> 00:36:13,960
Speaker 1: competitors to either of these companies. I think you're right.

674
00:36:14,040 --> 00:36:17,279
Speaker 1: I don't think it actually impacts there, but I think

675
00:36:17,280 --> 00:36:19,120
Speaker 1: their earnings are going to be really strong in the

676
00:36:19,120 --> 00:36:20,640
Speaker 1: midst of all of this. Where I think it does

677
00:36:20,719 --> 00:36:25,200
Speaker 1: impact them is I think Washington, but most likely Brussels

678
00:36:25,360 --> 00:36:27,880
Speaker 1: is going to step in and regulate and or leving

679
00:36:27,880 --> 00:36:30,439
Speaker 1: the mother of all finds against them. You also, there's

680
00:36:30,440 --> 00:36:33,160
Speaker 1: a non zero probability here, Barry, that one or more

681
00:36:33,160 --> 00:36:36,440
Speaker 1: of these companies is banned from a European country. If

682
00:36:36,440 --> 00:36:39,400
Speaker 1: you're if you're Australia right now, and Amazons showing up

683
00:36:39,400 --> 00:36:40,960
Speaker 1: to Australia, I've been kind of calls from all the

684
00:36:41,000 --> 00:36:44,719
Speaker 1: big media outlets and stress saying, okay, Amazon showing up

685
00:36:45,160 --> 00:36:48,680
Speaker 1: if Amazon, if Australia looks at or any European country

686
00:36:48,760 --> 00:36:51,440
Speaker 1: looks at the countries that have let these guys in

687
00:36:51,600 --> 00:36:54,040
Speaker 1: and then looks at China. China let them in for

688
00:36:54,120 --> 00:36:56,000
Speaker 1: just long enough to steal their IP and back to

689
00:36:56,040 --> 00:36:58,759
Speaker 1: local entrepreneur, and then captured all the value themselves, so

690
00:36:58,840 --> 00:37:01,239
Speaker 1: basically knockoffs and rip offs, and then kicked him out.

691
00:37:01,920 --> 00:37:05,520
Speaker 1: Now that's not free trade, it's not our Western values.

692
00:37:06,600 --> 00:37:10,560
Speaker 1: Who who was smarter? Who was was? Is the Chinese

693
00:37:10,600 --> 00:37:13,520
Speaker 1: model the wrong model. If you're Italy and you had

694
00:37:13,680 --> 00:37:16,640
Speaker 1: you had the chance to do this again, letting Google, Facebook,

695
00:37:16,640 --> 00:37:20,279
Speaker 1: Amazon or Apple or support a local entrepreneur steal the

696
00:37:20,320 --> 00:37:23,480
Speaker 1: I P and do it yourself. Who's done better Italy

697
00:37:23,960 --> 00:37:27,000
Speaker 1: or China? No doubt about it. It's China. So we

698
00:37:27,040 --> 00:37:29,400
Speaker 1: may see one of these guys. I just wouldn't be surprised.

699
00:37:29,400 --> 00:37:34,319
Speaker 1: So you know what, Facebook, Google, you're out fascinating. Can

700
00:37:34,400 --> 00:37:37,560
Speaker 1: you stick around a little bit. We have been speaking

701
00:37:37,600 --> 00:37:41,000
Speaker 1: with Professor Scott Galloway of n y U Stern discussing

702
00:37:41,120 --> 00:37:44,879
Speaker 1: his new book The Four Uh. If you enjoy this conversation,

703
00:37:45,040 --> 00:37:47,600
Speaker 1: be sure and check out our podcast extras. Will we

704
00:37:47,680 --> 00:37:51,680
Speaker 1: keep the tape rolling and continue to discuss all things technology.

705
00:37:52,440 --> 00:37:55,880
Speaker 1: You can find that wherever Finer podcasts are sold. We

706
00:37:56,000 --> 00:38:00,960
Speaker 1: love your comments feedback and suggestions right to us at

707
00:38:01,680 --> 00:38:05,319
Speaker 1: m IB podcast at Bloomberg dot net. Check out my

708
00:38:05,480 --> 00:38:08,680
Speaker 1: daily column on Bloomberg View dot com. Follow me on

709
00:38:08,719 --> 00:38:12,560
Speaker 1: Twitter at rit Holts. I'm Barry rit Holts. You're listening

710
00:38:12,600 --> 00:38:30,840
Speaker 1: to Masters and Business on Bloomberg Radio. Welcome to the podcast.

711
00:38:30,920 --> 00:38:32,960
Speaker 1: Thank you Scott for doing this. This is I always

712
00:38:33,000 --> 00:38:36,760
Speaker 1: find it fascinating to speak with you about this. You

713
00:38:36,760 --> 00:38:40,320
Speaker 1: you are interested in many of the same things I'm

714
00:38:40,360 --> 00:38:46,920
Speaker 1: interested in, but from a very different context, perspective, UM viewpoint,

715
00:38:47,040 --> 00:38:53,759
Speaker 1: and I find it tremendously elucidating and interesting on subjects

716
00:38:53,760 --> 00:38:58,520
Speaker 1: that that I'm just completely enamored with. Before we get

717
00:38:58,560 --> 00:39:01,920
Speaker 1: to our usual stand podcast questions, there are some other

718
00:39:02,000 --> 00:39:05,600
Speaker 1: questions we didn't get to that I have to I

719
00:39:05,680 --> 00:39:09,160
Speaker 1: have to jump in on. Of course, I find your

720
00:39:09,360 --> 00:39:17,000
Speaker 1: responses and your your perspectives really very refreshing. UM. I'm

721
00:39:17,120 --> 00:39:20,680
Speaker 1: just wrestling rustling papers as I worked through this. UM.

722
00:39:20,760 --> 00:39:23,480
Speaker 1: One of the questions that I didn't get to on

723
00:39:23,520 --> 00:39:28,480
Speaker 1: Facebook was the concept that they pulled off the greatest

724
00:39:28,560 --> 00:39:32,040
Speaker 1: bait and switch in business history. Tell us about that?

725
00:39:32,719 --> 00:39:36,040
Speaker 1: So Facebook early on said you have these fan pages

726
00:39:36,040 --> 00:39:38,520
Speaker 1: and wouldn't be nice if someone could self identify as

727
00:39:38,520 --> 00:39:40,760
Speaker 1: a fan of the brand, raise their hand and follow

728
00:39:40,960 --> 00:39:44,800
Speaker 1: or like your page, your brand page. So it's set

729
00:39:44,800 --> 00:39:47,360
Speaker 1: off an arms race because it became a vanity metric

730
00:39:47,400 --> 00:39:49,399
Speaker 1: for whether the brand got it or not. In any

731
00:39:49,440 --> 00:39:51,799
Speaker 1: brand in any category that was number one in terms

732
00:39:51,800 --> 00:39:55,480
Speaker 1: of Facebook likes or fans, they started ranking them and

733
00:39:55,480 --> 00:39:58,360
Speaker 1: it was an It was an indicator and a proxy

734
00:39:58,400 --> 00:40:00,760
Speaker 1: for how innovative the company was. The way you built

735
00:40:00,760 --> 00:40:04,840
Speaker 1: this fan base was with advertising on Facebook, and companies

736
00:40:04,880 --> 00:40:08,320
Speaker 1: spent hundreds of millions of dollars building their fan bases

737
00:40:08,400 --> 00:40:11,840
Speaker 1: and their Facebook followings. And then Facebook said, you know what,

738
00:40:12,440 --> 00:40:16,600
Speaker 1: just kidding, we own these people. And the organic reach

739
00:40:16,600 --> 00:40:19,160
Speaker 1: went from a hundred percent, meaning all the content these

740
00:40:19,160 --> 00:40:22,840
Speaker 1: brands put out reached their fans, and it's now basically zero.

741
00:40:23,040 --> 00:40:25,520
Speaker 1: So this was the equivalent of you build a house,

742
00:40:25,600 --> 00:40:27,720
Speaker 1: you pay the county to pay your taxes, you're about

743
00:40:27,719 --> 00:40:29,640
Speaker 1: to move in, and the county shows up, puts new

744
00:40:29,640 --> 00:40:31,480
Speaker 1: locks on the door, and so it's just kidding, we

745
00:40:31,560 --> 00:40:33,360
Speaker 1: own it and you gotta rent it from us. I

746
00:40:33,360 --> 00:40:35,680
Speaker 1: think this was the greatest bait and switch in media

747
00:40:35,760 --> 00:40:37,960
Speaker 1: history in a in a in a long time, and

748
00:40:38,000 --> 00:40:40,400
Speaker 1: it speaks to Facebook's power because they were able to

749
00:40:40,440 --> 00:40:42,560
Speaker 1: get away with it, and then the new one. I

750
00:40:42,640 --> 00:40:45,440
Speaker 1: mean all these companies, any a company growing greater than

751
00:40:45,960 --> 00:40:47,879
Speaker 1: five or six percent of year in GDP, the core

752
00:40:47,920 --> 00:40:50,080
Speaker 1: competence is theft. It was a core competence of the

753
00:40:50,160 --> 00:40:53,719
Speaker 1: US in the nineteenth century, stealing textile and manufacturing technology

754
00:40:53,719 --> 00:40:56,600
Speaker 1: out of Ireland. In the UK. It's China's core competence

755
00:40:56,600 --> 00:41:00,160
Speaker 1: now over the last twenty years. And Facebook, Google, all

756
00:41:00,760 --> 00:41:01,800
Speaker 1: of them when at the end of day, what you

757
00:41:01,800 --> 00:41:03,640
Speaker 1: look at them. They're great at theft. They're great at

758
00:41:03,680 --> 00:41:07,000
Speaker 1: taking other people's content, slicing it up and charging for

759
00:41:07,040 --> 00:41:09,120
Speaker 1: it and convincing old media that this is the new

760
00:41:09,160 --> 00:41:11,120
Speaker 1: way of the world. The stupidest thing we could have

761
00:41:11,120 --> 00:41:14,000
Speaker 1: done at the New York Times was to buy onto

762
00:41:14,040 --> 00:41:16,120
Speaker 1: the slide that information wanted to be free and have

763
00:41:16,200 --> 00:41:19,040
Speaker 1: Google come into our servers, chop up our data and

764
00:41:19,080 --> 00:41:21,520
Speaker 1: then monetize it at ten x what we could monetize

765
00:41:21,560 --> 00:41:24,040
Speaker 1: it for because we didn't know how to we didn't

766
00:41:24,040 --> 00:41:25,960
Speaker 1: know how to do search. Let's let's talk about that

767
00:41:26,000 --> 00:41:29,080
Speaker 1: a little bit, because in the book, that's a very

768
00:41:29,120 --> 00:41:32,520
Speaker 1: famous quote. Information wants to be free, but that's really

769
00:41:32,560 --> 00:41:35,880
Speaker 1: only half the quote, isn't it. What what is the

770
00:41:35,880 --> 00:41:41,000
Speaker 1: other half of the quote? The no it you mean

771
00:41:41,040 --> 00:41:43,680
Speaker 1: the original quote, the original quote, well, the original it

772
00:41:43,719 --> 00:41:46,879
Speaker 1: was taken out of context, wasn't it. It's the person

773
00:41:46,920 --> 00:41:51,600
Speaker 1: who initially said it. Yeah, yeah, I said basically was

774
00:41:51,640 --> 00:41:54,439
Speaker 1: making the opposite point. But then Marissa Mare in front

775
00:41:54,440 --> 00:41:56,360
Speaker 1: of converse that information wants to be free, and it

776
00:41:56,400 --> 00:41:59,520
Speaker 1: all goes back to biology. Every old economy company wants

777
00:41:59,560 --> 00:42:01,319
Speaker 1: to be seen hanging out with the quarterback and the

778
00:42:01,360 --> 00:42:05,200
Speaker 1: prom coeen and announced a deal with Apple, Amazon, Facebook

779
00:42:05,239 --> 00:42:07,440
Speaker 1: or Google. By the way, anytime you're a can, anytime

780
00:42:07,480 --> 00:42:10,440
Speaker 1: your CS, you see all these old economy companies issuing

781
00:42:10,480 --> 00:42:13,920
Speaker 1: press releases talking about their quote unquote partnership with Google,

782
00:42:13,960 --> 00:42:17,160
Speaker 1: the partnership with Amazon. Usually these companies partner with old

783
00:42:17,160 --> 00:42:19,600
Speaker 1: economy companies the way of virus partners with a host.

784
00:42:19,640 --> 00:42:22,160
Speaker 1: What you never see is a press release from an

785
00:42:22,160 --> 00:42:25,120
Speaker 1: old economy companies saying our partnership with Facebook has resulted

786
00:42:25,120 --> 00:42:27,920
Speaker 1: in us beating earnings. Those are the press releases you

787
00:42:28,040 --> 00:42:31,839
Speaker 1: never see. Then Facebook had instant articles. Again, these old

788
00:42:31,880 --> 00:42:35,479
Speaker 1: media companies just don't learn and go on this thing

789
00:42:36,200 --> 00:42:39,160
Speaker 1: and recognize that all they're doing is making these guys

790
00:42:39,200 --> 00:42:41,760
Speaker 1: a new operating system instead of their own media companies.

791
00:42:41,800 --> 00:42:46,680
Speaker 1: It so these companies, all of us, and again I'm

792
00:42:46,719 --> 00:42:48,400
Speaker 1: going back to all of us, have been in a

793
00:42:48,440 --> 00:42:50,879
Speaker 1: relationship with someone much better looking than us and take

794
00:42:50,960 --> 00:42:54,040
Speaker 1: more abuse than we should. This is the equivalent of

795
00:42:54,160 --> 00:42:57,319
Speaker 1: entering into a relationship where you subject yourself to a

796
00:42:57,320 --> 00:43:00,160
Speaker 1: ton of abuse because these are the hottest guy, our

797
00:43:00,239 --> 00:43:03,520
Speaker 1: girl in the class. And it's happening across all of industry.

798
00:43:03,560 --> 00:43:07,040
Speaker 1: Everyone is deciding is trying to position themselves as the

799
00:43:07,160 --> 00:43:09,719
Speaker 1: leader or as the innovator, as cool and I get it,

800
00:43:09,760 --> 00:43:12,719
Speaker 1: and doing deals with these guys when the best thing

801
00:43:12,800 --> 00:43:15,680
Speaker 1: that the companies and sectors could do economically is buying

802
00:43:15,760 --> 00:43:19,560
Speaker 1: together and basically shut these guys off. In print media,

803
00:43:19,680 --> 00:43:22,200
Speaker 1: we should have shut Google off. We should have, and

804
00:43:22,239 --> 00:43:24,879
Speaker 1: I proposed this in a board meeting the New York

805
00:43:24,880 --> 00:43:27,799
Speaker 1: Times was basically lapped out of the room. The stupidest

806
00:43:27,800 --> 00:43:30,200
Speaker 1: thing we've ever did in print media was we let

807
00:43:30,239 --> 00:43:33,160
Speaker 1: Google crawl our data. Bloomberg doesn't let Google crawl their

808
00:43:33,239 --> 00:43:36,000
Speaker 1: data on their terminals. Why because they've gotten pretty used

809
00:43:36,040 --> 00:43:39,920
Speaker 1: that twenty dollar your feet fee. Because they realized information

810
00:43:39,920 --> 00:43:42,680
Speaker 1: doesn't want to be free. Information like the rest of us,

811
00:43:42,680 --> 00:43:46,840
Speaker 1: wants to be scarce and expensive. So we talk about

812
00:43:46,840 --> 00:43:49,479
Speaker 1: the coolest guys in the room, coolest girls in the room.

813
00:43:50,040 --> 00:43:54,120
Speaker 1: You talk about the four who are possible contenders for

814
00:43:54,200 --> 00:43:58,320
Speaker 1: number five. We haven't discussed Uber, we haven't discussed Airbnb.

815
00:43:58,880 --> 00:44:01,040
Speaker 1: Who do you have down is your fifth? If you

816
00:44:01,120 --> 00:44:03,759
Speaker 1: were going to bump someone out, who would move into

817
00:44:03,800 --> 00:44:06,000
Speaker 1: the fourth slot? So in the book, I have a

818
00:44:06,080 --> 00:44:08,000
Speaker 1: chapter on something I called the Tea algorithm, and I

819
00:44:08,040 --> 00:44:09,920
Speaker 1: try to set out six or eight factors that I

820
00:44:09,960 --> 00:44:12,040
Speaker 1: think are the underpinnings of all of these companies to

821
00:44:12,040 --> 00:44:13,920
Speaker 1: try and identify who could next reach a half a

822
00:44:13,960 --> 00:44:16,719
Speaker 1: trillion dollars in value. And I would have said a

823
00:44:16,760 --> 00:44:18,879
Speaker 1: year eighteen months ago it was Uber, because I thought

824
00:44:18,920 --> 00:44:21,120
Speaker 1: Uber could threaten Amazon and the last mile and me

825
00:44:21,239 --> 00:44:24,640
Speaker 1: sort of the last mile circulatory system for this incredible

826
00:44:24,719 --> 00:44:26,920
Speaker 1: last mile infrastructure that a bunch of people are going

827
00:44:26,960 --> 00:44:29,239
Speaker 1: to need, maybe self driving cars. I think they're no

828
00:44:29,280 --> 00:44:32,440
Speaker 1: longer in the running because because a it's clear that

829
00:44:32,480 --> 00:44:36,040
Speaker 1: they can't unlike Amazon, they can't spend their competition into

830
00:44:36,080 --> 00:44:38,520
Speaker 1: the ground. So I don't think it's gonna be Uber.

831
00:44:38,560 --> 00:44:41,759
Speaker 1: If you were to pick a fifth, my money right

832
00:44:41,800 --> 00:44:44,240
Speaker 1: now would be on In terms of the consumer business,

833
00:44:44,239 --> 00:44:47,440
Speaker 1: you might argue Microsoft's already the fifth horseman, But in

834
00:44:47,520 --> 00:44:49,560
Speaker 1: terms of the new unicorns, my money would be on

835
00:44:49,600 --> 00:44:51,640
Speaker 1: Netflix because at the end of the day, these four

836
00:44:51,800 --> 00:44:57,040
Speaker 1: operating systems or operating systems for media shopping information are connections.

837
00:44:57,760 --> 00:45:00,200
Speaker 1: Netflix has become an operating system for the second most

838
00:45:00,239 --> 00:45:03,120
Speaker 1: important screen in the house, and that's our television. The

839
00:45:03,160 --> 00:45:04,600
Speaker 1: best way to know who you are would be to

840
00:45:04,640 --> 00:45:07,080
Speaker 1: get your Google Search history. The second best way I

841
00:45:07,120 --> 00:45:09,160
Speaker 1: think to get a snapshot of someone who of who

842
00:45:09,239 --> 00:45:11,480
Speaker 1: they are is to look at their Netflix home screen.

843
00:45:12,120 --> 00:45:14,400
Speaker 1: Millennials spend more time watching Netflix and the rest of

844
00:45:14,440 --> 00:45:17,840
Speaker 1: cable television combined. So even if it's hundred and fifty

845
00:45:18,040 --> 00:45:22,080
Speaker 1: plus billion dollar market cap, Netflix should technically be trading

846
00:45:22,520 --> 00:45:24,719
Speaker 1: for more than the rest of cable television, all of

847
00:45:24,760 --> 00:45:26,520
Speaker 1: them combined. And I don't know if it is yet.

848
00:45:26,880 --> 00:45:30,040
Speaker 1: The mother of all battles everyone obsesses over Google versus Facebook,

849
00:45:30,120 --> 00:45:33,160
Speaker 1: or Walmart versus Amazon. The mother of all battles is

850
00:45:33,200 --> 00:45:36,480
Speaker 1: coming in two thousand and nineteen, and it's going to

851
00:45:36,560 --> 00:45:41,280
Speaker 1: be Amazon versus Netflix. So isn't the solution here because

852
00:45:41,320 --> 00:45:45,120
Speaker 1: Amazon and Apple are now competing on content, Why has

853
00:45:45,160 --> 00:45:47,960
Speaker 1: an Apple stepped up and brought Netflix. It makes perfect

854
00:45:48,040 --> 00:45:51,440
Speaker 1: sense and integrates well, and it allows them to really

855
00:45:51,560 --> 00:45:56,120
Speaker 1: prevents Amazon from running away via Prime. It's a super

856
00:45:56,160 --> 00:45:59,120
Speaker 1: interesting idea, Barry. And you know what everyone used to say, Well,

857
00:45:59,120 --> 00:46:02,040
Speaker 1: Disney could have worked acquired Netflix. Disney can't afford Netflix

858
00:46:02,080 --> 00:46:04,600
Speaker 1: any longer. Apple can do it with cash, which is

859
00:46:05,239 --> 00:46:08,200
Speaker 1: it's really interesting. That would be That would be really,

860
00:46:08,800 --> 00:46:11,560
Speaker 1: that would be earth earth shaking. I would like to

861
00:46:11,600 --> 00:46:14,160
Speaker 1: say I've been thinking about that for months, but literally,

862
00:46:14,160 --> 00:46:15,960
Speaker 1: as you were describing and it's like, oh, that's a

863
00:46:15,960 --> 00:46:18,080
Speaker 1: perfect I hadn't thought of that. I really hadn't thought that.

864
00:46:18,160 --> 00:46:20,880
Speaker 1: That's Apple is one of the few, maybe one of

865
00:46:20,960 --> 00:46:23,320
Speaker 1: two companies right now in the world that could pull

866
00:46:23,400 --> 00:46:27,359
Speaker 1: that off easily. And it makes sense. You know, the

867
00:46:27,400 --> 00:46:30,400
Speaker 1: Beats acquisition took a while to integrate. Night don't know

868
00:46:30,480 --> 00:46:33,719
Speaker 1: how successful is it has been on the programming side.

869
00:46:33,800 --> 00:46:38,280
Speaker 1: It has been successful on the hardware side. But Apple,

870
00:46:38,600 --> 00:46:41,040
Speaker 1: in my opinion, and I say this as a fanboy

871
00:46:41,960 --> 00:46:47,960
Speaker 1: Mac Classic, I find Apple software isn't as sharp as

872
00:46:48,040 --> 00:46:50,880
Speaker 1: it once was, and I have a running list of

873
00:46:50,920 --> 00:46:55,080
Speaker 1: complaints about so Richard Taylor keeps a list of plates

874
00:46:55,239 --> 00:47:00,120
Speaker 1: complaints about human cognitive eras, and that ultimately led to

875
00:47:00,239 --> 00:47:03,080
Speaker 1: his whole philosophy. I've been doing that with software, and

876
00:47:03,200 --> 00:47:07,000
Speaker 1: my beef about software isn't that it's eating the world.

877
00:47:07,040 --> 00:47:09,880
Speaker 1: It's that it's eating the world too slowly. We should

878
00:47:09,920 --> 00:47:12,840
Speaker 1: already be in the future and we're not. And I

879
00:47:12,880 --> 00:47:16,080
Speaker 1: could I have dozens of examples of why is this

880
00:47:16,239 --> 00:47:19,520
Speaker 1: so old school when it should know what I want?

881
00:47:19,680 --> 00:47:23,560
Speaker 1: By the way, Google comes closest to actually delivering what

882
00:47:23,600 --> 00:47:28,840
Speaker 1: I want, UM, but Apple Netflix, It just it'll solve

883
00:47:28,880 --> 00:47:32,320
Speaker 1: a lot of problems for both companies, including that deep,

884
00:47:32,360 --> 00:47:38,279
Speaker 1: deep pocket that Apple has for funding acquisitions, funding um

885
00:47:38,400 --> 00:47:41,600
Speaker 1: new content from Netflix. I think it's a super a

886
00:47:41,760 --> 00:47:45,480
Speaker 1: super interesting idea. You're gonna I mean Apple right now

887
00:47:45,520 --> 00:47:48,760
Speaker 1: is so interesting because if Apple so, I think Amazon

888
00:47:48,800 --> 00:47:50,560
Speaker 1: is going to get to a trillion dollars before Apple,

889
00:47:50,600 --> 00:47:53,319
Speaker 1: despite the fact Apples at about seven fifty, Amazons at

890
00:47:53,320 --> 00:47:56,200
Speaker 1: four fifty or five d And I think the seminal

891
00:47:56,320 --> 00:47:59,239
Speaker 1: moment that people will look back and say, how did

892
00:47:59,360 --> 00:48:04,000
Speaker 1: Amazon pass Apple? It'll be quite frankly Alexa beating up Siri,

893
00:48:04,640 --> 00:48:06,839
Speaker 1: which is one of my big beefs that they had

894
00:48:06,840 --> 00:48:09,080
Speaker 1: a five year head start over and they blew it.

895
00:48:09,120 --> 00:48:12,040
Speaker 1: They absolutely owned it three years ago, even just thirty

896
00:48:12,080 --> 00:48:14,960
Speaker 1: six months ago. If you said voice, you said Siri.

897
00:48:15,600 --> 00:48:19,600
Speaker 1: And now alexis market share in the home. Uh. You know,

898
00:48:19,640 --> 00:48:21,520
Speaker 1: you have one of those moments where you think, Wow,

899
00:48:21,560 --> 00:48:23,960
Speaker 1: this is the future my kids are now using. I

900
00:48:24,000 --> 00:48:26,319
Speaker 1: think it's called the Amazon show we have and it's

901
00:48:26,360 --> 00:48:29,720
Speaker 1: like remember the future from two thousand one Space Odyssey

902
00:48:29,760 --> 00:48:31,920
Speaker 1: where someone brings up a TV and starts talking to people.

903
00:48:32,200 --> 00:48:34,480
Speaker 1: It's finally happened my kids. My seven year old is

904
00:48:34,520 --> 00:48:36,640
Speaker 1: calling me on my phone and the quality is pretty clear,

905
00:48:36,760 --> 00:48:39,399
Speaker 1: it's very good. And then and then he says, by Dad,

906
00:48:39,440 --> 00:48:43,000
Speaker 1: he says, he says Amazon, hangout, Alexa hang up, just

907
00:48:43,080 --> 00:48:45,480
Speaker 1: like that, and it's just it is natural. So you

908
00:48:45,560 --> 00:48:50,840
Speaker 1: have an entire generation of kids getting used to having

909
00:48:50,880 --> 00:48:54,640
Speaker 1: a relationship with Alexa, who will be the arbiter of

910
00:48:54,640 --> 00:49:00,640
Speaker 1: the media and the things they buy. Amazon. I I

911
00:49:00,719 --> 00:49:02,680
Speaker 1: don't I don't like to make stock recommendations, but I

912
00:49:02,680 --> 00:49:07,200
Speaker 1: can't help myself Amazon. You know it's a double from

913
00:49:07,200 --> 00:49:09,200
Speaker 1: here recording. I think it's I think I think it's

914
00:49:09,200 --> 00:49:10,600
Speaker 1: a double and then we're going to freak out and

915
00:49:10,600 --> 00:49:14,480
Speaker 1: break them up. So Alexa. Alexa has this huge advantage

916
00:49:14,520 --> 00:49:17,960
Speaker 1: over Siri in that Alexa is jacked into your WiFi,

917
00:49:18,520 --> 00:49:21,719
Speaker 1: so it always has access to a huge database. And

918
00:49:21,840 --> 00:49:25,839
Speaker 1: perhaps I'm too harsh on Siri because it's dependent on

919
00:49:26,000 --> 00:49:29,320
Speaker 1: the cell connection, which I'm right here in midtown Manhattan.

920
00:49:29,360 --> 00:49:32,880
Speaker 1: In half the time calls drop, the data drops. It's

921
00:49:32,960 --> 00:49:35,840
Speaker 1: so last year, I'm in Rome and I discovered the

922
00:49:36,080 --> 00:49:40,440
Speaker 1: square Roman Pizza. It's it's not Sicilian pizza. It's something

923
00:49:40,480 --> 00:49:43,840
Speaker 1: totally different and it's delicious. We're gonna have an Alexa phone,

924
00:49:44,280 --> 00:49:49,719
Speaker 1: two prime members. The fire phone crashed and burns. Well,

925
00:49:49,760 --> 00:49:53,400
Speaker 1: we'll see what happens. My series story is one of

926
00:49:53,400 --> 00:49:56,240
Speaker 1: the guys in my office says, Roman Pizza just opens

927
00:49:56,320 --> 00:49:59,239
Speaker 1: up three blocks. We go over there, we eat it.

928
00:49:59,239 --> 00:50:02,359
Speaker 1: It's a meaning amazing money in pasta is the name

929
00:50:02,400 --> 00:50:05,359
Speaker 1: of it. I take a picture of the pizza. I'm

930
00:50:05,520 --> 00:50:09,440
Speaker 1: take a picture of the with my iPhone. I take

931
00:50:09,440 --> 00:50:12,400
Speaker 1: a picture of the store. It says Roman Pizza, and

932
00:50:12,440 --> 00:50:14,920
Speaker 1: I go to it's raining. I'm holding an umbrella. I

933
00:50:15,040 --> 00:50:18,560
Speaker 1: speak into the phone through Siri and I say authentic

934
00:50:18,760 --> 00:50:23,279
Speaker 1: Roman Pizza now in New York City, and you know

935
00:50:23,320 --> 00:50:25,920
Speaker 1: it's raining all my glasses on them. One handing it,

936
00:50:26,000 --> 00:50:30,239
Speaker 1: I hit send and when the tweet goes out, it

937
00:50:30,360 --> 00:50:34,920
Speaker 1: comes back authentic woman Pizza now in New York City.

938
00:50:35,200 --> 00:50:38,560
Speaker 1: And of course the responses on Twitter are hilarious. But

939
00:50:38,680 --> 00:50:41,200
Speaker 1: I'm right there saying, wait a second, I just took

940
00:50:41,200 --> 00:50:44,840
Speaker 1: a photo of pizza. I'm standing in front of something

941
00:50:44,880 --> 00:50:49,520
Speaker 1: that says authentic Roman Pizza. How did you mess this up?

942
00:50:50,120 --> 00:50:53,520
Speaker 1: What is woman pizza? Check a database? There's no such thing.

943
00:50:54,040 --> 00:50:57,920
Speaker 1: Roman pizza is a thing. And that sort of how

944
00:50:58,000 --> 00:51:03,239
Speaker 1: did Siri blow? That? Makes me wonder they really that

945
00:51:03,320 --> 00:51:07,759
Speaker 1: You're right? They absolutely blew it. Really and voice the

946
00:51:07,880 --> 00:51:11,800
Speaker 1: next battleground for trillions of dollars or hundreds of billions

947
00:51:11,800 --> 00:51:14,759
Speaker 1: of dollars in chreation and shareholder value, it's been the

948
00:51:14,760 --> 00:51:17,920
Speaker 1: phone screen for the last ten fifteen years. The next

949
00:51:18,000 --> 00:51:22,759
Speaker 1: major battleground is the home and its voice. That is

950
00:51:22,760 --> 00:51:25,160
Speaker 1: going to be the place that fortunes are made and lost.

951
00:51:25,320 --> 00:51:27,840
Speaker 1: Because when you think about where you make most of

952
00:51:27,880 --> 00:51:31,000
Speaker 1: your decisions, where there's a ton of influence around purchase,

953
00:51:31,160 --> 00:51:34,759
Speaker 1: around media, it's happening in the home, and you're not

954
00:51:34,920 --> 00:51:38,000
Speaker 1: necessarily attached your phone like you are when you're outside

955
00:51:38,000 --> 00:51:40,759
Speaker 1: of the home. And I'll tell you start to see

956
00:51:40,760 --> 00:51:43,279
Speaker 1: with your kids how frictionless and easy it is to

957
00:51:43,320 --> 00:51:47,000
Speaker 1: start barking commands into the sky. Just say it. Just

958
00:51:47,080 --> 00:51:50,239
Speaker 1: All you literally have to do is say Alexa, you know,

959
00:51:50,640 --> 00:51:54,239
Speaker 1: order me this, or Alexa, what time? Or Alexa, pull

960
00:51:54,360 --> 00:51:58,520
Speaker 1: up Scotland versus sloven you know, Slovenia World Cup Final

961
00:51:58,600 --> 00:52:03,680
Speaker 1: in your TV. We're going to have alexas in a

962
00:52:03,719 --> 00:52:06,560
Speaker 1: position to be our shepherd to the consumer world and

963
00:52:06,600 --> 00:52:08,919
Speaker 1: we'll get to be the arbiter of what we buy

964
00:52:08,960 --> 00:52:12,360
Speaker 1: and what we see. And whoever owns that voice is

965
00:52:12,400 --> 00:52:15,040
Speaker 1: going to be hugely powerful. You know, if I had

966
00:52:15,080 --> 00:52:19,680
Speaker 1: a guess five years ago, who would own voice? Google

967
00:52:19,800 --> 00:52:23,080
Speaker 1: is the company that has the technology to do that best.

968
00:52:23,719 --> 00:52:28,880
Speaker 1: We forget how spectacular YouTube is and Google maps. By

969
00:52:28,920 --> 00:52:32,120
Speaker 1: the way, YouTube another two or three billion dollar purchase

970
00:52:32,640 --> 00:52:35,720
Speaker 1: that on the day of announcement, the rising Google stock

971
00:52:35,760 --> 00:52:39,840
Speaker 1: price essentially paid for it. So YouTube was free and

972
00:52:39,840 --> 00:52:43,480
Speaker 1: and YouTube is always my pushback to oh, Google is

973
00:52:43,520 --> 00:52:47,160
Speaker 1: just a search company that is an immense repository of

974
00:52:47,360 --> 00:52:52,520
Speaker 1: video that is catalog structured searchable, so there is an

975
00:52:52,520 --> 00:52:55,759
Speaker 1: element of search, but it's some ungodly amount of a

976
00:52:55,840 --> 00:53:00,320
Speaker 1: billion hours a week or some crazy number of video

977
00:53:00,360 --> 00:53:04,840
Speaker 1: gets uploaded to YouTube every week, and then Google Maps

978
00:53:05,040 --> 00:53:08,840
Speaker 1: and street for you. The entire world is available to

979
00:53:08,880 --> 00:53:11,760
Speaker 1: you from your computer in a way that was barely

980
00:53:11,800 --> 00:53:16,160
Speaker 1: imaginable ten years ago. Yeah, Google is arguably the greatest

981
00:53:16,160 --> 00:53:19,400
Speaker 1: concentration of i Q in the history of mankind. It

982
00:53:19,520 --> 00:53:24,040
Speaker 1: probably dwarfs the Manhattan Project NASA. They do have, I think,

983
00:53:24,040 --> 00:53:27,120
Speaker 1: the smartest people in a great culture and focus on

984
00:53:27,160 --> 00:53:31,040
Speaker 1: engineering and and innovation, and you just can't count them out. It.

985
00:53:31,040 --> 00:53:32,799
Speaker 1: But they're playing catch up in the home right now

986
00:53:32,840 --> 00:53:35,239
Speaker 1: a little bit. They well, nest was supposed to jump

987
00:53:35,280 --> 00:53:38,719
Speaker 1: start them to the whole consumer side of things, the

988
00:53:38,760 --> 00:53:44,320
Speaker 1: self driving car. That's another bit of technological um wizardry.

989
00:53:44,360 --> 00:53:46,640
Speaker 1: Their way ahead of everybody else. Not that they're not

990
00:53:46,680 --> 00:53:49,759
Speaker 1: going to catch up, but you gotta You can never

991
00:53:49,880 --> 00:53:52,040
Speaker 1: count them out because they are so smart at what

992
00:53:52,080 --> 00:53:54,000
Speaker 1: they do, great, great at what they do, and have

993
00:53:54,920 --> 00:53:58,640
Speaker 1: share of a marketplace search that is now a bigger

994
00:53:58,640 --> 00:54:02,480
Speaker 1: by dollar volume market than the entire advertising market of

995
00:54:02,560 --> 00:54:06,040
Speaker 1: every nation, with the exception of the US. From a

996
00:54:06,160 --> 00:54:10,279
Speaker 1: pure traditional antitrust standpoint, they're the most vulnerable from regulation

997
00:54:10,360 --> 00:54:13,360
Speaker 1: because they have ninety plus points of share. I actually

998
00:54:13,400 --> 00:54:15,399
Speaker 1: don't think they're the ones that are gonna be broken up, though.

999
00:54:15,480 --> 00:54:18,359
Speaker 1: I think it's going to become more political and more

1000
00:54:18,680 --> 00:54:20,719
Speaker 1: sort of fear based, and I think it's going to

1001
00:54:20,840 --> 00:54:24,600
Speaker 1: be um either Facebook or Amazon, because I think people

1002
00:54:24,600 --> 00:54:28,319
Speaker 1: are gonna start getting angry. That's that's really interesting. So

1003
00:54:28,480 --> 00:54:31,040
Speaker 1: there are some questions I didn't get to. I asked

1004
00:54:31,040 --> 00:54:35,799
Speaker 1: who the fifth Horsemen was? Um? Your last comment makes

1005
00:54:35,840 --> 00:54:38,000
Speaker 1: me ask want to ask the other question of the

1006
00:54:38,040 --> 00:54:44,880
Speaker 1: four where history teaches us that every company is um mortal,

1007
00:54:45,560 --> 00:54:47,959
Speaker 1: which of these four companies is the first to die?

1008
00:54:48,880 --> 00:54:51,600
Speaker 1: So we even time about every every place you look

1009
00:54:51,600 --> 00:54:54,000
Speaker 1: at where Amazon is competing against the other three, it's

1010
00:54:54,040 --> 00:54:57,600
Speaker 1: winning and media Amazon Media groups growing faster than Facebook

1011
00:54:57,640 --> 00:55:01,759
Speaker 1: or Google Cloud. It's number one. And streaming video. They've

1012
00:55:01,760 --> 00:55:04,360
Speaker 1: gone from number seven share of primetime viewing, the number

1013
00:55:04,400 --> 00:55:08,080
Speaker 1: three computer hardware Amazon Echo is probably the most innovative

1014
00:55:08,160 --> 00:55:10,360
Speaker 1: hardware part of the last of years. The company that

1015
00:55:10,360 --> 00:55:14,160
Speaker 1: feels the most vulnerable right now, I would argue, is

1016
00:55:14,760 --> 00:55:17,120
Speaker 1: Facebook is Facebook. I think is in the midst of

1017
00:55:17,160 --> 00:55:22,080
Speaker 1: this unfolding case study and how not to handle a crisis.

1018
00:55:22,600 --> 00:55:25,600
Speaker 1: The damage a crisis influx on a company isn't a

1019
00:55:25,600 --> 00:55:28,960
Speaker 1: crisis itself, it's how it's handled. Thailand all came out

1020
00:55:29,000 --> 00:55:32,840
Speaker 1: of their crisis um stronger than ever because they overread

1021
00:55:32,920 --> 00:55:36,080
Speaker 1: the key is overreacting and in a positive way. They

1022
00:55:36,160 --> 00:55:39,600
Speaker 1: cleared every bottle of Thailand all from every shelf in America,

1023
00:55:39,600 --> 00:55:42,440
Speaker 1: even though that was absolutely not necessary. They knew exactly

1024
00:55:42,480 --> 00:55:47,279
Speaker 1: what they could have said in these four things, we

1025
00:55:47,280 --> 00:55:51,080
Speaker 1: can remove isolated incident data. DA don't worry about it, right,

1026
00:55:51,280 --> 00:55:53,799
Speaker 1: Exxon said, this isn't a big deal. I couldn't find

1027
00:55:53,800 --> 00:55:58,800
Speaker 1: the CEO. What we're seeing from Facebook is textbook how

1028
00:55:58,880 --> 00:56:02,200
Speaker 1: not to handle a crisis, a series of half measures.

1029
00:56:02,320 --> 00:56:04,960
Speaker 1: Two and fifty people. Okay, you're really angry about that.

1030
00:56:05,280 --> 00:56:07,800
Speaker 1: A thousand oh and by the way, it's impossible. We

1031
00:56:07,840 --> 00:56:09,520
Speaker 1: don't want to be arbiters of truth. Well, you sure,

1032
00:56:09,600 --> 00:56:12,960
Speaker 1: Cell can try Facebook, We're not a media company. Oh

1033
00:56:13,040 --> 00:56:16,719
Speaker 1: my gosh, we're about to have the tobacco testifying a

1034
00:56:16,760 --> 00:56:20,319
Speaker 1: Congress moment. If Sheryl Sandberg or Mark Zuckerberg stand in

1035
00:56:20,480 --> 00:56:24,040
Speaker 1: front of Congress and say We're not a media company

1036
00:56:24,080 --> 00:56:25,680
Speaker 1: that's going to be played for the next thirty years

1037
00:56:25,719 --> 00:56:29,680
Speaker 1: and say, see how this individual lied to us, and

1038
00:56:29,840 --> 00:56:32,200
Speaker 1: it's going to be embarrassing for them. They are a

1039
00:56:32,280 --> 00:56:35,759
Speaker 1: hundred percent of media company. They know it, they know it,

1040
00:56:36,000 --> 00:56:39,080
Speaker 1: and they're lying and trying to minimize. America loves to

1041
00:56:39,160 --> 00:56:43,960
Speaker 1: forgive what we hate is half measures. Martha Stewarton and

1042
00:56:44,120 --> 00:56:46,399
Speaker 1: go to jail for insider trading. She went to jail

1043
00:56:46,440 --> 00:56:50,359
Speaker 1: for obstruction of justice. That this is where they will

1044
00:56:50,480 --> 00:56:53,680
Speaker 1: end up because they will be forced to is Mark Zuckerberg,

1045
00:56:53,719 --> 00:56:57,080
Speaker 1: and he should skip to this point right now. This

1046
00:56:57,160 --> 00:57:01,160
Speaker 1: is what happened is unacceptable, regard ardless of the cost.

1047
00:57:01,520 --> 00:57:04,480
Speaker 1: I'm going to make sure this never happens again. And

1048
00:57:04,520 --> 00:57:07,160
Speaker 1: by the way, we're a media company and we accept

1049
00:57:07,239 --> 00:57:10,319
Speaker 1: our special role as being part of the fourth of State.

1050
00:57:10,719 --> 00:57:13,640
Speaker 1: He needs to show, in my view that he's not

1051
00:57:13,680 --> 00:57:18,840
Speaker 1: only a global citizen, but an American citizen. Our Facebook

1052
00:57:18,920 --> 00:57:22,040
Speaker 1: was weaponized by an intelligence unit of the Russian government.

1053
00:57:22,320 --> 00:57:26,600
Speaker 1: Bloomberg hasn't been weaponized by Russia. New York Times managed

1054
00:57:26,640 --> 00:57:28,560
Speaker 1: to keep us safe with ninety million dollars in free

1055
00:57:28,600 --> 00:57:31,080
Speaker 1: cash flow, yet Facebook can't do it with twelve billion

1056
00:57:31,080 --> 00:57:33,360
Speaker 1: and free cash flow. This isn't about the realm of

1057
00:57:33,360 --> 00:57:35,640
Speaker 1: the possible. It's about the realm of the profitable. Among

1058
00:57:35,680 --> 00:57:38,360
Speaker 1: Google and Facebook stand in front of Congress and say

1059
00:57:38,360 --> 00:57:41,120
Speaker 1: it's not possible. What they're really saying is it's not

1060
00:57:41,680 --> 00:57:44,400
Speaker 1: it's not possible for us to do this while maintaining

1061
00:57:44,400 --> 00:57:47,680
Speaker 1: our profitability, which in their eyes is the impossible. So

1062
00:57:47,720 --> 00:57:51,040
Speaker 1: are you asking too much of a thirty year old

1063
00:57:51,200 --> 00:57:55,280
Speaker 1: CEO who really doesn't have the breath of life experience

1064
00:57:55,320 --> 00:57:58,880
Speaker 1: and the understanding of history to recognize his role in it.

1065
00:57:59,160 --> 00:58:04,400
Speaker 1: I'm not using non behavior um or non action. I'm saying, hey,

1066
00:58:04,440 --> 00:58:07,520
Speaker 1: this is I don't care if he's the smartest guy

1067
00:58:07,520 --> 00:58:10,920
Speaker 1: in the room and the greatest learning machine ever, he's

1068
00:58:11,000 --> 00:58:14,320
Speaker 1: thirty one or thirty two years old. This is twenty

1069
00:58:14,400 --> 00:58:17,800
Speaker 1: years past his seasoning. Yeah, but that's the role of

1070
00:58:17,800 --> 00:58:19,560
Speaker 1: the board. The board is supposed to look at the

1071
00:58:19,600 --> 00:58:23,120
Speaker 1: CEO and service Producieri's not only for shareholders but all stakeholders.

1072
00:58:23,640 --> 00:58:26,280
Speaker 1: And when they see, Okay, we have this incredible company

1073
00:58:26,280 --> 00:58:29,640
Speaker 1: that's stown incredible returns to shareholders, but it's also threatening

1074
00:58:29,640 --> 00:58:33,240
Speaker 1: our democracy, then we as a board have to ensure

1075
00:58:33,440 --> 00:58:35,560
Speaker 1: that we are representing our stakeholders with the right of

1076
00:58:35,640 --> 00:58:38,480
Speaker 1: the wrong CEO and coaching this guy. But this to

1077
00:58:38,600 --> 00:58:42,920
Speaker 1: me seems pretty basic. This can't happen again. I'm going

1078
00:58:43,000 --> 00:58:45,200
Speaker 1: to make sure it doesn't. Keep in mind, with twelve

1079
00:58:45,240 --> 00:58:47,960
Speaker 1: billion dollars in pre cashual, they could hire fifty thousand

1080
00:58:48,040 --> 00:58:52,800
Speaker 1: people to screen identify controversial content or advertisers. They could

1081
00:58:52,800 --> 00:58:55,320
Speaker 1: spend a half a billion dollars a year on artificial

1082
00:58:55,320 --> 00:59:00,760
Speaker 1: intelligence technology to help these these ten thousand screeners I identify, sort,

1083
00:59:00,840 --> 00:59:04,320
Speaker 1: and distill controversial content, and it would reduce their free

1084
00:59:04,320 --> 00:59:09,720
Speaker 1: cash flow by ten percent. But to them that qualifies

1085
00:59:09,880 --> 00:59:15,200
Speaker 1: as impossible. It's just absolutely not true that they couldn't

1086
00:59:15,240 --> 00:59:17,280
Speaker 1: do away with all. Do you realize the defense we're

1087
00:59:17,280 --> 00:59:19,680
Speaker 1: talking about it was these ads were bought with a

1088
00:59:19,720 --> 00:59:22,880
Speaker 1: credit card and paid in rubles. This was literally and

1089
00:59:23,000 --> 00:59:26,360
Speaker 1: figuratively a red flag. It's not that hard to stop.

1090
00:59:26,960 --> 00:59:29,520
Speaker 1: So we haven't talked about Twitter, which isn't on your

1091
00:59:29,560 --> 00:59:33,000
Speaker 1: list or in the book other than mentioned in passing um.

1092
00:59:33,040 --> 00:59:35,720
Speaker 1: I know you have thoughts along social media about Twitter.

1093
00:59:36,040 --> 00:59:38,040
Speaker 1: What do you think? I don't know about you, but

1094
00:59:38,080 --> 00:59:39,840
Speaker 1: I've I used to be a Twitter hater, and I

1095
00:59:39,840 --> 00:59:42,280
Speaker 1: think it's because I'm a little bit jealous of Jack Dorsey,

1096
00:59:42,280 --> 00:59:44,760
Speaker 1: and it pisces me off that he gets to live

1097
00:59:44,800 --> 00:59:46,520
Speaker 1: as large as he lives while being a co CEO

1098
00:59:46,640 --> 00:59:49,480
Speaker 1: and as a board member of public companies and someone

1099
00:59:49,520 --> 00:59:51,760
Speaker 1: who thinks of themselves as a student corporate governance. I

1100
00:59:51,760 --> 00:59:55,840
Speaker 1: think it's just insane that, again, this gross idolatry of

1101
00:59:55,920 --> 01:00:00,040
Speaker 1: youth would let a board to allow an into a

1102
01:00:00,120 --> 01:00:03,240
Speaker 1: jewel in his thirties. I think he's forty now to

1103
01:00:03,280 --> 01:00:05,080
Speaker 1: be a co CEO of a company. What do you

1104
01:00:05,120 --> 01:00:07,640
Speaker 1: say to the rest of people working there fifty hours

1105
01:00:07,640 --> 01:00:10,120
Speaker 1: a week, this guy is better than you at twenty

1106
01:00:10,200 --> 01:00:12,960
Speaker 1: five hours a week eighty nine or of his net

1107
01:00:12,960 --> 01:00:15,720
Speaker 1: worth is that the other firms square that he works

1108
01:00:15,720 --> 01:00:17,280
Speaker 1: out of the afternoon. So what do you know? That

1109
01:00:17,400 --> 01:00:21,840
Speaker 1: stock has gone up? Twitter's is not so. And if

1110
01:00:21,840 --> 01:00:23,680
Speaker 1: you look at if you look at who works there,

1111
01:00:23,720 --> 01:00:26,160
Speaker 1: it's almost no one. Almost everybody has left a lot

1112
01:00:26,200 --> 01:00:30,240
Speaker 1: of people, a lot of big names have departed Twitter. Um, well,

1113
01:00:30,240 --> 01:00:32,560
Speaker 1: Steve Jobs did it. He did with Apple and Pixar.

1114
01:00:32,680 --> 01:00:35,360
Speaker 1: Why can't Jack Dorsey. I think it's a dangerous business

1115
01:00:35,400 --> 01:00:38,360
Speaker 1: strategy to assume you're Steve Jobs. I just don't think

1116
01:00:38,400 --> 01:00:41,560
Speaker 1: that's a good board strategy. Maybe he's but that's exactly

1117
01:00:41,640 --> 01:00:44,680
Speaker 1: what's happened. He's young, he wears a turtleneck, he has

1118
01:00:44,680 --> 01:00:47,480
Speaker 1: a lot of facial hair. You know, he's definitely a

1119
01:00:47,520 --> 01:00:50,440
Speaker 1: bright guy. Everyone's saying, oh, it's the reincarnation of Steve Jobs.

1120
01:00:50,480 --> 01:00:53,920
Speaker 1: That is a bad strategy from the board. Having said this,

1121
01:00:54,440 --> 01:00:58,360
Speaker 1: Twitter is relevant. Twitter is hugely relevant. I use the

1122
01:00:58,400 --> 01:01:00,040
Speaker 1: service of all the social media I think it's and

1123
01:01:00,080 --> 01:01:02,440
Speaker 1: when I enjoy the most, maybe exception of YouTube. You're

1124
01:01:02,480 --> 01:01:03,920
Speaker 1: on it. You have how many followers do you have? No?

1125
01:01:04,080 --> 01:01:07,880
Speaker 1: Very Okay, so you can communicate with the Rose Bowl.

1126
01:01:08,000 --> 01:01:11,040
Speaker 1: My partner has is coming up on a million. It's

1127
01:01:11,080 --> 01:01:14,320
Speaker 1: it's it's incredible. This is downtown Josh Brown, and he's

1128
01:01:14,360 --> 01:01:16,880
Speaker 1: got great voice on Twitter. But he gives great Twitter

1129
01:01:16,960 --> 01:01:21,120
Speaker 1: certainly does. He gives great tweets. But here's their challenge.

1130
01:01:22,080 --> 01:01:25,360
Speaker 1: The New York Times is super relevant, PBS is super relevant,

1131
01:01:25,480 --> 01:01:27,800
Speaker 1: BBC is super relevant, and they haven't created a ton

1132
01:01:27,840 --> 01:01:31,400
Speaker 1: of shareholder value. Is Twitter shaping up to be the

1133
01:01:31,440 --> 01:01:34,040
Speaker 1: New York Times? And then the sense that it's relevance

1134
01:01:34,160 --> 01:01:37,240
Speaker 1: far outweighs it's return to shareholders I don't think it's poor.

1135
01:01:37,240 --> 01:01:39,320
Speaker 1: I don't think it's well managed. I don't think it's

1136
01:01:39,320 --> 01:01:41,160
Speaker 1: been that innovative in terms of the product, and they

1137
01:01:41,200 --> 01:01:44,040
Speaker 1: haven't figured out a killer app to really start growing

1138
01:01:44,040 --> 01:01:48,160
Speaker 1: the ters. That's the killer app? Right are you? Has

1139
01:01:48,200 --> 01:01:50,840
Speaker 1: had changed anything for you? I I just haven't started.

1140
01:01:50,880 --> 01:01:53,000
Speaker 1: It's only a handful of people have access to it,

1141
01:01:53,040 --> 01:01:57,560
Speaker 1: and it's just a test run. But the whole beauty

1142
01:01:57,600 --> 01:02:00,800
Speaker 1: of the services here what you have to say. You've

1143
01:02:00,800 --> 01:02:03,160
Speaker 1: got a hundred forty characters, and if it's too long,

1144
01:02:03,680 --> 01:02:07,480
Speaker 1: do a tweet storm, reply to yourself, but allow the

1145
01:02:07,520 --> 01:02:09,720
Speaker 1: consumer to decide if they want to read more than that.

1146
01:02:09,760 --> 01:02:11,880
Speaker 1: But Twitter right now is like Snap and that it's

1147
01:02:11,920 --> 01:02:15,440
Speaker 1: it seems to have hit a floor in that well.

1148
01:02:15,480 --> 01:02:19,320
Speaker 1: I think I think the floor there. I believe Snap

1149
01:02:19,360 --> 01:02:21,920
Speaker 1: is going to go below bus, below tin Bucks, and

1150
01:02:21,920 --> 01:02:24,840
Speaker 1: then be acquired by Google. I think Facebook's hatred and

1151
01:02:24,880 --> 01:02:28,800
Speaker 1: it is hatred for Evan speakl is basically pushing Evan

1152
01:02:28,880 --> 01:02:32,200
Speaker 1: into the arms of Google and Facebook. If it were

1153
01:02:32,240 --> 01:02:34,400
Speaker 1: to ever get below tin Bucks to share would also

1154
01:02:34,440 --> 01:02:38,320
Speaker 1: probably be acquired Because Twitter, Twitter, excuse me, because they're

1155
01:02:38,360 --> 01:02:40,840
Speaker 1: so thank you. There's so few platforms that have any

1156
01:02:40,880 --> 01:02:43,600
Speaker 1: sort of following like that on social media, and you

1157
01:02:43,640 --> 01:02:46,400
Speaker 1: have big players including Apple and Google that it just

1158
01:02:46,440 --> 01:02:49,560
Speaker 1: haven't been able to figure out social Yeah. Google Plus,

1159
01:02:50,000 --> 01:02:52,520
Speaker 1: is that still around? I don't know if I don't

1160
01:02:52,560 --> 01:02:55,640
Speaker 1: think that it hasn't gotten shut down yet. Yeah, I don't.

1161
01:02:55,760 --> 01:02:57,680
Speaker 1: Occasionally you click on a link and you see someone's

1162
01:02:57,720 --> 01:03:00,920
Speaker 1: Google Plus profile, and yet and yet Google Hangouts and

1163
01:03:00,960 --> 01:03:03,760
Speaker 1: some of the other technologies are great. They're great to

1164
01:03:03,800 --> 01:03:08,080
Speaker 1: do video conferencing and other things. It's it's I give

1165
01:03:08,120 --> 01:03:10,280
Speaker 1: Google credit for throwing money and stuff and if it

1166
01:03:10,320 --> 01:03:12,600
Speaker 1: doesn't work, you have to move on. Who's better at

1167
01:03:12,640 --> 01:03:15,360
Speaker 1: that than Jeff Bezos. Yeah, we're not failing enough. Keep

1168
01:03:15,440 --> 01:03:18,080
Speaker 1: drying stuff. Yeah, and they're getting into social with Twitch.

1169
01:03:18,600 --> 01:03:21,320
Speaker 1: Yeah that's I mean, technically that's the only place that

1170
01:03:21,400 --> 01:03:25,360
Speaker 1: am Well, there's a few, but Amazon is now I

1171
01:03:25,720 --> 01:03:28,800
Speaker 1: keep going with Amazon capable of doing these Jedi mind tricks.

1172
01:03:29,440 --> 01:03:32,240
Speaker 1: So the value of Kroger's declines by a third between

1173
01:03:32,240 --> 01:03:35,160
Speaker 1: the time Amazon announces the acquisition of Whole Foods and closes.

1174
01:03:35,200 --> 01:03:37,360
Speaker 1: And this is a grocer that's one eleventh the size

1175
01:03:37,360 --> 01:03:41,040
Speaker 1: of Kroger. So I believe Amazon could take down the

1176
01:03:41,160 --> 01:03:44,600
Speaker 1: value of any consumer company that's publicly traded by a

1177
01:03:44,720 --> 01:03:47,720
Speaker 1: third within ninety days, just with press releases, it can

1178
01:03:47,720 --> 01:03:50,680
Speaker 1: look at someone and perform this Jedi like mind trick

1179
01:03:50,760 --> 01:03:54,720
Speaker 1: and begin inflicting pain without even touching the industry. On Friday,

1180
01:03:54,720 --> 01:03:56,640
Speaker 1: when they announced they were thinking about getting into drug

1181
01:03:56,680 --> 01:03:59,920
Speaker 1: store CBS and Walgreen's declient four and five percent or

1182
01:04:00,080 --> 01:04:02,960
Speaker 1: bactively even further down the food chain, the drug manufacturers

1183
01:04:03,000 --> 01:04:06,880
Speaker 1: declined because everyone is so scared of Amazon. So if

1184
01:04:06,920 --> 01:04:09,160
Speaker 1: Amazon put out a press release every day saying, you

1185
01:04:09,200 --> 01:04:11,680
Speaker 1: know what, we're going into overnight delivery, this is the

1186
01:04:11,720 --> 01:04:14,480
Speaker 1: seventh here's a picture of the seven fifty seven's we've leased.

1187
01:04:14,760 --> 01:04:17,960
Speaker 1: Here's a map of all the of all the locations

1188
01:04:17,960 --> 01:04:21,240
Speaker 1: that make this incredible fulfilment network, you would see I

1189
01:04:21,280 --> 01:04:23,680
Speaker 1: think FED, X, D, H, L and UPS lose ten

1190
01:04:23,760 --> 01:04:26,880
Speaker 1: to forty billion dollars in marketing within thirty days. So

1191
01:04:27,080 --> 01:04:30,200
Speaker 1: I can't imagine Amazon is happy with the three percent

1192
01:04:30,360 --> 01:04:34,360
Speaker 1: fee they have to pay credit card companies. Why hasn't

1193
01:04:34,400 --> 01:04:36,959
Speaker 1: Amazon ruled out a bank. I know they've ruled out

1194
01:04:37,360 --> 01:04:39,800
Speaker 1: their own credit card to capture some of that three

1195
01:04:39,800 --> 01:04:44,200
Speaker 1: percent back, but why not come up with a and

1196
01:04:44,240 --> 01:04:49,640
Speaker 1: by the way PayPal has now become tremendous in its size,

1197
01:04:49,800 --> 01:04:52,800
Speaker 1: why not come up with a direct way to do

1198
01:04:52,920 --> 01:04:55,960
Speaker 1: banking so that they can cut out Master, Corde, Visa,

1199
01:04:55,960 --> 01:04:58,480
Speaker 1: and m X and capture some of that three percent

1200
01:04:58,600 --> 01:05:00,960
Speaker 1: for themselves. So I'll give you my answer. Then I

1201
01:05:01,000 --> 01:05:02,440
Speaker 1: want to hear your answer, because I think you're going

1202
01:05:02,520 --> 01:05:05,440
Speaker 1: to forget more about the financial industry that I'm ever

1203
01:05:05,440 --> 01:05:09,280
Speaker 1: gonna know. I don't think it's if. I think it's when. Really, Yeah,

1204
01:05:09,320 --> 01:05:12,800
Speaker 1: I think they're gonna go head on prime, credit card,

1205
01:05:12,880 --> 01:05:18,520
Speaker 1: prime payment, why not prime mortgages Alexa? Send me four

1206
01:05:18,600 --> 01:05:22,120
Speaker 1: quotes from mortgage Alexa, ride a check right a check

1207
01:05:22,160 --> 01:05:27,480
Speaker 1: to you know Comcast for pay you know pay And

1208
01:05:27,520 --> 01:05:29,880
Speaker 1: they're going to go into the business. The only friction

1209
01:05:30,000 --> 01:05:32,680
Speaker 1: right now is they can hire smart people fast enough

1210
01:05:33,120 --> 01:05:36,160
Speaker 1: and bandwidth her attention. I think that with Amazon, it's

1211
01:05:36,200 --> 01:05:38,720
Speaker 1: not a consumer sector that will be in here's the criteria.

1212
01:05:38,960 --> 01:05:42,880
Speaker 1: Is it more than ten billion dollars? Is it profitable? Yeah,

1213
01:05:43,040 --> 01:05:45,520
Speaker 1: then it probably. The question is what will they do?

1214
01:05:45,560 --> 01:05:47,960
Speaker 1: The question is what won't they do. They're going to

1215
01:05:48,040 --> 01:05:51,400
Speaker 1: go after the biggest consumer sectors in the world, and

1216
01:05:51,480 --> 01:05:54,640
Speaker 1: banking has stuck its chin out banking really to me,

1217
01:05:54,720 --> 01:05:57,840
Speaker 1: seems very right for disruption. So the only reason I

1218
01:05:57,880 --> 01:06:00,320
Speaker 1: would say they wouldn't do that. As far I know,

1219
01:06:00,400 --> 01:06:03,200
Speaker 1: Walmart has been trying to build a bank for forever

1220
01:06:03,440 --> 01:06:06,680
Speaker 1: and it hasn't worked. There's a regulatory set of hurdles

1221
01:06:06,720 --> 01:06:09,400
Speaker 1: that doesn't allow it to take place. There are rules

1222
01:06:09,440 --> 01:06:13,880
Speaker 1: that prevents some form of a retailer from owning them.

1223
01:06:13,880 --> 01:06:16,480
Speaker 1: I don't know the specifics of it, but Walmart has

1224
01:06:16,520 --> 01:06:18,240
Speaker 1: never been able to do it, which is why if

1225
01:06:18,240 --> 01:06:21,560
Speaker 1: you walk into a b J's, a Costco, a target

1226
01:06:21,560 --> 01:06:25,520
Speaker 1: of Walmart, it's not Walmart Savings alone. It's some local

1227
01:06:25,680 --> 01:06:28,480
Speaker 1: bank that has a desk there, and you could get

1228
01:06:28,480 --> 01:06:31,160
Speaker 1: a credit card, a Walmart credit card, but it's an

1229
01:06:31,200 --> 01:06:34,520
Speaker 1: affiliate card. It's not really Walmart running the show. And

1230
01:06:34,560 --> 01:06:38,080
Speaker 1: I'm assuming something similar is taking place with Amazon. I

1231
01:06:38,120 --> 01:06:41,920
Speaker 1: honestly don't know. But the strange thing, from an academic standpoint,

1232
01:06:42,160 --> 01:06:44,600
Speaker 1: one of the pillars of academic thought or in business

1233
01:06:44,640 --> 01:06:48,880
Speaker 1: school is Professor Pallas notion. I think it was Michigan

1234
01:06:49,520 --> 01:06:52,240
Speaker 1: on core competence, and that is basically saying focus, find

1235
01:06:52,280 --> 01:06:54,760
Speaker 1: what you're good at the average that everything else, and

1236
01:06:54,800 --> 01:06:57,240
Speaker 1: stay focused. Amazon has totally blown that out of the water.

1237
01:06:57,320 --> 01:07:00,640
Speaker 1: If Nike had said we are going going to start

1238
01:07:00,880 --> 01:07:03,200
Speaker 1: filing patents to build warehouses in the sky and say

1239
01:07:03,280 --> 01:07:07,040
Speaker 1: that's ridiculous. If Starbucks said we're gonna spend four and

1240
01:07:07,080 --> 01:07:09,960
Speaker 1: a half billion dollars on original TV content, you say

1241
01:07:10,000 --> 01:07:13,280
Speaker 1: that's insane. None of those things are insane for Amazon,

1242
01:07:13,440 --> 01:07:16,920
Speaker 1: their businesses are no closer to those businesses than Starbucks

1243
01:07:16,920 --> 01:07:20,960
Speaker 1: are Nike. But can you could argue the streaming video

1244
01:07:21,040 --> 01:07:24,840
Speaker 1: Prime and Amazon Music services, Hey, you're buying books and

1245
01:07:25,040 --> 01:07:28,400
Speaker 1: DVDs and c d s from them in the first place. Okay,

1246
01:07:28,400 --> 01:07:32,880
Speaker 1: we're gonna move to digital. No nothing, you know, it's

1247
01:07:32,920 --> 01:07:39,000
Speaker 1: just home voice. These guys are filing their filing patents

1248
01:07:39,040 --> 01:07:42,480
Speaker 1: for small drones that can reassemble as larger drones to

1249
01:07:42,640 --> 01:07:45,880
Speaker 1: take bigger packages. They're talking about getting into drugs. They're

1250
01:07:45,880 --> 01:07:49,960
Speaker 1: talking about managing the being the prescription benefit manager for companies.

1251
01:07:50,600 --> 01:07:53,400
Speaker 1: It's totally blown the notion of core competence out of

1252
01:07:53,400 --> 01:07:57,600
Speaker 1: the water and everywhere they seem to go. Because in

1253
01:07:57,640 --> 01:08:00,960
Speaker 1: the analogy I would use as a or analogy, at

1254
01:08:01,000 --> 01:08:03,800
Speaker 1: the end of World War Two, the Germans had better morale,

1255
01:08:03,920 --> 01:08:07,120
Speaker 1: better equipment, better trained officers. But the Allies had thirty

1256
01:08:07,120 --> 01:08:09,520
Speaker 1: a gallons of gasoline for everyone. The Germans had because

1257
01:08:09,560 --> 01:08:12,000
Speaker 1: we cut off their supply routes. Amazon's the company that

1258
01:08:12,000 --> 01:08:14,680
Speaker 1: shows up at thirty a gallons of gasoline. They can

1259
01:08:14,760 --> 01:08:20,000
Speaker 1: overwhelm any sector which cheap capital and expertise in great execution.

1260
01:08:20,600 --> 01:08:22,800
Speaker 1: But even if it doesn't work, even if they're unprofitable.

1261
01:08:22,840 --> 01:08:27,000
Speaker 1: It's like, you know, will Amazon, Will Amazon be successful

1262
01:08:27,040 --> 01:08:29,360
Speaker 1: in banking Berry? I don't know, but I know they'll

1263
01:08:29,360 --> 01:08:31,720
Speaker 1: create a ton of chaos, trop a ton of napalm

1264
01:08:31,760 --> 01:08:34,160
Speaker 1: and burn a lot of villages finding out. I mean,

1265
01:08:34,160 --> 01:08:38,639
Speaker 1: they're going to absolutely wreak havoc in any industry before

1266
01:08:38,720 --> 01:08:43,040
Speaker 1: they even go there. They just you, you sang credibly

1267
01:08:43,760 --> 01:08:46,240
Speaker 1: because of your position in your dred ten thousand followers,

1268
01:08:46,240 --> 01:08:50,200
Speaker 1: and Amazon is clearly going into banking. If they just

1269
01:08:50,200 --> 01:08:52,559
Speaker 1: just sort of nodded with a press release and said

1270
01:08:52,560 --> 01:08:56,439
Speaker 1: we're looking at it, you'd see the banking industry shed

1271
01:08:56,600 --> 01:08:59,679
Speaker 1: the whole set and twenty thirty billion in market cap

1272
01:08:59,760 --> 01:09:03,439
Speaker 1: in for trading hours and access to capital as a

1273
01:09:03,520 --> 01:09:07,280
Speaker 1: key component of survival. So if you can begin squelching

1274
01:09:07,280 --> 01:09:10,920
Speaker 1: the oxygen of a company taking the oxygen out of

1275
01:09:10,920 --> 01:09:12,840
Speaker 1: the room before you're even in the room. So so

1276
01:09:12,920 --> 01:09:15,360
Speaker 1: when you show up with your oxygen mask and start

1277
01:09:15,520 --> 01:09:19,360
Speaker 1: fighting these people, wow, it's you know, let's starve them.

1278
01:09:19,400 --> 01:09:22,040
Speaker 1: Let's let's suck the oxygen out of the room before

1279
01:09:22,080 --> 01:09:25,479
Speaker 1: we show up. That's what Amazon is now capable of doing.

1280
01:09:25,840 --> 01:09:28,559
Speaker 1: So last question before I get to some of my

1281
01:09:28,840 --> 01:09:30,800
Speaker 1: standard questions, and we don't have to do all of

1282
01:09:30,800 --> 01:09:35,000
Speaker 1: them because you've done them before. You have a command

1283
01:09:35,320 --> 01:09:41,759
Speaker 1: over the topic, over the subject matter that few people do.

1284
01:09:42,720 --> 01:09:47,720
Speaker 1: How do you take that that academic lessons? How do

1285
01:09:47,720 --> 01:09:50,720
Speaker 1: you take your your course planner for the year and

1286
01:09:50,800 --> 01:09:55,479
Speaker 1: turn that into a book? Because really the book itself

1287
01:09:55,560 --> 01:09:59,680
Speaker 1: is an education about technology, about business strategies, about what

1288
01:09:59,800 --> 01:10:03,120
Speaker 1: the asked ten or twenty years, We're like, what is

1289
01:10:03,160 --> 01:10:07,120
Speaker 1: that process like to convert everything that's in your head

1290
01:10:07,880 --> 01:10:12,160
Speaker 1: into three You've written a book? Yeah, you know what

1291
01:10:12,160 --> 01:10:14,519
Speaker 1: it's like. It's it's miserable. It's like being in the Marines.

1292
01:10:14,520 --> 01:10:16,160
Speaker 1: You're glad you did it, but you know you probably

1293
01:10:16,160 --> 01:10:18,920
Speaker 1: would want to do it again. So you say that now,

1294
01:10:18,960 --> 01:10:21,599
Speaker 1: but wait ten years and will start coming back. That's right.

1295
01:10:21,720 --> 01:10:24,000
Speaker 1: It takes about a decade. That's right, it will come back.

1296
01:10:24,800 --> 01:10:26,960
Speaker 1: Look the key and I think a lot about right,

1297
01:10:27,000 --> 01:10:28,959
Speaker 1: because this is my first book. The key is deadlines.

1298
01:10:29,800 --> 01:10:32,960
Speaker 1: I do believe you can force creativity. And I write Wednesday,

1299
01:10:32,960 --> 01:10:36,120
Speaker 1: Thursday and Sunday nights and my kids and wife for asleep.

1300
01:10:36,160 --> 01:10:38,360
Speaker 1: And I find just forcing yourself to write for three

1301
01:10:38,439 --> 01:10:40,599
Speaker 1: or four hours is a very it's worth and most

1302
01:10:40,800 --> 01:10:42,880
Speaker 1: people right in the morning. But what I did here

1303
01:10:42,920 --> 01:10:44,479
Speaker 1: is I went through each of the companies. Then I

1304
01:10:44,520 --> 01:10:48,360
Speaker 1: talked about UM, what I thought are the key components

1305
01:10:48,360 --> 01:10:50,960
Speaker 1: of their success, how you would identify the fifth company,

1306
01:10:51,040 --> 01:10:53,320
Speaker 1: what can be learned? And then I talk a little

1307
01:10:53,320 --> 01:10:57,200
Speaker 1: bit about what a career advice for people in an

1308
01:10:57,320 --> 01:11:00,400
Speaker 1: in an era of the four and just how my

1309
01:11:00,479 --> 01:11:04,000
Speaker 1: goal you know, as an academic, UM, I have two goals.

1310
01:11:04,040 --> 01:11:06,439
Speaker 1: The first is to help others create economic security for

1311
01:11:06,479 --> 01:11:08,080
Speaker 1: them and their families, and the second is to be

1312
01:11:08,120 --> 01:11:10,280
Speaker 1: the most influential thought leader in the history of business.

1313
01:11:11,560 --> 01:11:14,280
Speaker 1: We'll see how the second goes. I hope you have

1314
01:11:14,320 --> 01:11:16,519
Speaker 1: a huge listenership, Barry, I need some help on the

1315
01:11:16,520 --> 01:11:19,000
Speaker 1: second one. Well, well, last time you were on I

1316
01:11:19,040 --> 01:11:22,040
Speaker 1: got emails for I can't tell for weeks after your

1317
01:11:22,160 --> 01:11:26,120
Speaker 1: your appearance so there was some resonance. It's not the show,

1318
01:11:26,200 --> 01:11:30,479
Speaker 1: it's not necessarily me. It's how does the guests present

1319
01:11:30,600 --> 01:11:34,400
Speaker 1: themselves in a way that other people well, but other

1320
01:11:34,520 --> 01:11:37,680
Speaker 1: people look, this is a shared That's the beauty of

1321
01:11:37,720 --> 01:11:41,320
Speaker 1: social is it's shared. People said, Hey, you're into tech.

1322
01:11:41,439 --> 01:11:43,880
Speaker 1: You have to listen to Galloway on Riddults show. He

1323
01:11:44,000 --> 01:11:46,639
Speaker 1: just choose the scenery. It's fifty percent lock, it's fifty

1324
01:11:47,040 --> 01:11:50,120
Speaker 1: timing and the rest of his talent. That I've been

1325
01:11:50,120 --> 01:11:52,479
Speaker 1: super lucky because I chose to study and think a

1326
01:11:52,520 --> 01:11:54,960
Speaker 1: lot about these four companies and they've become part of that.

1327
01:11:55,120 --> 01:11:57,960
Speaker 1: We've captured something with the zeitgeist here, and you know,

1328
01:11:58,040 --> 01:11:59,800
Speaker 1: it's just much better to be lucky than it is

1329
01:11:59,800 --> 01:12:05,960
Speaker 1: to be By the way, congratulations York Times bestseller. All right,

1330
01:12:06,000 --> 01:12:09,360
Speaker 1: so let's jump to some of our favorite questions. Tell

1331
01:12:09,360 --> 01:12:12,840
Speaker 1: me something people don't know about your background. Wow, I

1332
01:12:12,880 --> 01:12:15,320
Speaker 1: graduated with a two point to seven g p A

1333
01:12:15,439 --> 01:12:17,960
Speaker 1: out of U c l A. How did you ever

1334
01:12:18,040 --> 01:12:21,720
Speaker 1: get into grad school? Uh? They took a chance on me.

1335
01:12:22,120 --> 01:12:26,880
Speaker 1: I owe the university. I owe California taxpayers and the

1336
01:12:26,920 --> 01:12:30,120
Speaker 1: regents of the University of California because of their generosity

1337
01:12:30,200 --> 01:12:35,160
Speaker 1: and irrational, you know, confidence in in me a lot

1338
01:12:35,200 --> 01:12:39,000
Speaker 1: I was, so I got very lucky. Fran Hill, the

1339
01:12:39,040 --> 01:12:41,720
Speaker 1: director of Admissions of Hose School of Business, let me

1340
01:12:41,760 --> 01:12:44,880
Speaker 1: with a two point two seven g p A and um,

1341
01:12:44,920 --> 01:12:46,960
Speaker 1: I'm just I was born at the right time, in

1342
01:12:46,960 --> 01:12:49,719
Speaker 1: the right place, California, getting to go to the great

1343
01:12:49,720 --> 01:12:51,760
Speaker 1: in my opinion, one of the greatest upper lubricants in

1344
01:12:51,800 --> 01:12:56,400
Speaker 1: the history of of economy, you know, of society is

1345
01:12:56,439 --> 01:12:58,920
Speaker 1: the University of California. And you went to public school.

1346
01:12:58,960 --> 01:13:01,320
Speaker 1: I went to Sunni stone Brook with grades I would

1347
01:13:01,360 --> 01:13:03,120
Speaker 1: never be able to get into today. And I went

1348
01:13:03,200 --> 01:13:06,799
Speaker 1: to Benjamin Cardosa School of Law, part of you streaming university.

1349
01:13:07,160 --> 01:13:09,280
Speaker 1: My grades, they would laugh at me if I applied

1350
01:13:09,280 --> 01:13:12,479
Speaker 1: today with those. So it was lucky being at a

1351
01:13:12,520 --> 01:13:16,680
Speaker 1: different part of the demographic boom So you're in a

1352
01:13:16,760 --> 01:13:19,639
Speaker 1: in a valley, six board and sixty one not quite

1353
01:13:19,640 --> 01:13:22,519
Speaker 1: a boom er, not quite a gen X and lower

1354
01:13:23,040 --> 01:13:27,200
Speaker 1: application numbers. Yeah, So terrible grade, terrible grades is a

1355
01:13:27,240 --> 01:13:29,479
Speaker 1: is an undergrad I was a decent test taker, so

1356
01:13:29,560 --> 01:13:32,680
Speaker 1: I kind of skated by. I had bad grades, but

1357
01:13:32,720 --> 01:13:36,599
Speaker 1: I tested poorly, so that worked out well. Let's talk

1358
01:13:36,640 --> 01:13:39,439
Speaker 1: about books. Since we referenced your book, tell us about

1359
01:13:39,439 --> 01:13:41,120
Speaker 1: some of your favorite books. By the way, this is

1360
01:13:41,120 --> 01:13:49,000
Speaker 1: the most popular question that people. Sapiens is a wonderful book. Harari. Yeah,

1361
01:13:49,200 --> 01:13:53,080
Speaker 1: have you read the follow up book? I have, I haven't.

1362
01:13:53,080 --> 01:13:54,720
Speaker 1: I heard it's not as good. I think it's a

1363
01:13:54,760 --> 01:13:58,120
Speaker 1: little darker. Oh really, yeah, it's probably like it maybe.

1364
01:13:58,439 --> 01:14:01,000
Speaker 1: Um So some of my colleagues have written some great

1365
01:14:01,000 --> 01:14:03,640
Speaker 1: picks at Stern. Adam Alter wrote a book called Irresistible

1366
01:14:04,320 --> 01:14:08,680
Speaker 1: about how tech companies and consumer companies make their products addictive.

1367
01:14:08,840 --> 01:14:11,040
Speaker 1: And I think it's really instructive, and also with a

1368
01:14:11,040 --> 01:14:12,680
Speaker 1: couple of chapters on what you do with with your

1369
01:14:12,760 --> 01:14:16,880
Speaker 1: kids and building some bounds around your life. Um uh.

1370
01:14:16,920 --> 01:14:20,479
Speaker 1: A Nindo ghost a movie book called Tap. We've had

1371
01:14:20,560 --> 01:14:23,960
Speaker 1: him on. It's fascinating about the mobile technology and how

1372
01:14:24,000 --> 01:14:27,439
Speaker 1: it's changing everything. Good stuff there and a ruin fondaraj

1373
01:14:27,520 --> 01:14:30,920
Speaker 1: and the share economy. Uh so those are all kind

1374
01:14:30,920 --> 01:14:33,960
Speaker 1: of that's those are the most recent ones. Also a

1375
01:14:34,000 --> 01:14:36,200
Speaker 1: guest on the show. So you've done the full n

1376
01:14:36,320 --> 01:14:40,240
Speaker 1: y U Stern? Anything? Um, you ever read fiction anything

1377
01:14:40,479 --> 01:14:43,439
Speaker 1: not nonfiction? You know, I'm embarrassed to say it. I

1378
01:14:43,479 --> 01:14:45,680
Speaker 1: read so much for business. I don't have a lot

1379
01:14:45,720 --> 01:14:48,080
Speaker 1: of I don't read a lot for leisure. It's not

1380
01:14:48,200 --> 01:14:50,720
Speaker 1: something I have the same issue. By the way, you

1381
01:14:50,760 --> 01:14:53,200
Speaker 1: know this sounds terrible. I love television. I watch a

1382
01:14:53,200 --> 01:14:55,400
Speaker 1: ton of TV, and it's not something I'm proud of.

1383
01:14:55,479 --> 01:14:57,920
Speaker 1: But but television is great today. It's not when we

1384
01:14:57,920 --> 01:15:02,880
Speaker 1: were junk. Yeah, a talent capital best. This is a

1385
01:15:02,880 --> 01:15:06,400
Speaker 1: golden age. It's an embarrassment of riches. So much stuff.

1386
01:15:06,439 --> 01:15:11,760
Speaker 1: Watch Taboo, taboo. Haven't seen that fantastic? Um, what do

1387
01:15:11,840 --> 01:15:15,640
Speaker 1: you watch on Amazon Prime anything in particular? Or Netflix?

1388
01:15:15,680 --> 01:15:17,760
Speaker 1: What are your you know, I'm the I'm the same

1389
01:15:17,800 --> 01:15:19,599
Speaker 1: as I'm the same as. I've been watching Odd Mom,

1390
01:15:19,800 --> 01:15:21,960
Speaker 1: Odd mo Mount, which I find it hilarious. I'm a

1391
01:15:22,040 --> 01:15:25,040
Speaker 1: huge Game of Thrones fan. I mean, there's just so

1392
01:15:25,160 --> 01:15:28,000
Speaker 1: much good TV on all the time. I think the

1393
01:15:28,080 --> 01:15:31,000
Speaker 1: key to being a happier person is exercise and more television.

1394
01:15:31,280 --> 01:15:34,840
Speaker 1: Exercise and what television usually ual? It's exercising, more sleep.

1395
01:15:34,880 --> 01:15:37,040
Speaker 1: But but that'll work. And let me get to my

1396
01:15:37,120 --> 01:15:40,439
Speaker 1: last two questions, which um, I think are the most

1397
01:15:40,520 --> 01:15:44,680
Speaker 1: interesting questions. Are you watching the Vietnam document dvring It?

1398
01:15:44,800 --> 01:15:46,920
Speaker 1: And I had like nineties you know, I have so

1399
01:15:47,000 --> 01:15:51,200
Speaker 1: much stuff on the DVR that it's just really better

1400
01:15:51,240 --> 01:15:55,639
Speaker 1: than Civil War because some people really Uh, it's that's

1401
01:15:55,960 --> 01:16:01,240
Speaker 1: I will get to it eventually. I'm still only halfway through. Um.

1402
01:16:01,320 --> 01:16:06,599
Speaker 1: The four parts series are on music with UM, I'm

1403
01:16:06,680 --> 01:16:09,760
Speaker 1: drawn a blank on his name. Um it was. It's

1404
01:16:09,800 --> 01:16:14,280
Speaker 1: really fascinating from the I'll edit in the name of

1405
01:16:14,439 --> 01:16:17,479
Speaker 1: I'll figure it out. Um. You deal with a lot

1406
01:16:17,479 --> 01:16:20,120
Speaker 1: of students with millennials. What sort of advice would you

1407
01:16:20,320 --> 01:16:22,519
Speaker 1: give someone who comes to you and says, Hey, I'm

1408
01:16:22,520 --> 01:16:25,720
Speaker 1: thinking about a career in technology your business. What would

1409
01:16:25,720 --> 01:16:31,080
Speaker 1: you advise them? Uh, find a company of the recurring revenue,

1410
01:16:31,760 --> 01:16:33,840
Speaker 1: finding a find a place that it's like getting a

1411
01:16:33,880 --> 01:16:37,120
Speaker 1: second m b A within a couple of years. You know,

1412
01:16:37,760 --> 01:16:41,160
Speaker 1: don't give up on the myth of balance in this economy.

1413
01:16:41,160 --> 01:16:43,720
Speaker 1: It's so competitive. You may know someone who has a

1414
01:16:43,760 --> 01:16:47,240
Speaker 1: food blog, volunteers at the s p c A, stays

1415
01:16:47,240 --> 01:16:49,479
Speaker 1: in great ship. Assume you're not that person to vote

1416
01:16:49,600 --> 01:16:51,720
Speaker 1: five to ten years to doing nothing but working your

1417
01:16:51,720 --> 01:16:53,560
Speaker 1: ass off. And I realized that's not aspirational. But I

1418
01:16:53,600 --> 01:16:55,840
Speaker 1: don't know anyone who's successful who hasn't worked their ass off.

1419
01:16:55,840 --> 01:16:58,559
Speaker 1: For tender. I mean literally work NonStop for ten or

1420
01:16:58,600 --> 01:17:02,160
Speaker 1: twenty years. So prepare yourself for that. Try and stay

1421
01:17:02,200 --> 01:17:03,920
Speaker 1: in decent shape. I think it's the key to be

1422
01:17:03,960 --> 01:17:06,759
Speaker 1: physically fit and for confidence and strong whare you're in school,

1423
01:17:07,200 --> 01:17:09,559
Speaker 1: and as soon as you can, try and get executive

1424
01:17:09,640 --> 01:17:12,520
Speaker 1: level sponsorship. And if you don't have executive level sponsorship,

1425
01:17:12,560 --> 01:17:14,719
Speaker 1: someone who takes in a rational passion your well being,

1426
01:17:15,200 --> 01:17:18,519
Speaker 1: in your progress at work, switch companies. The key is

1427
01:17:18,560 --> 01:17:22,719
Speaker 1: finding someone who's gonna who's gonna help you and mention

1428
01:17:23,160 --> 01:17:26,840
Speaker 1: and provide, provide cloud cover and and your job in

1429
01:17:26,880 --> 01:17:28,880
Speaker 1: your twenties is to find something you're good at, not

1430
01:17:28,960 --> 01:17:31,120
Speaker 1: find something you're passionate about, because if you're good at at,

1431
01:17:31,120 --> 01:17:33,680
Speaker 1: the accouterments of success will make you passionate about it.

1432
01:17:34,000 --> 01:17:38,800
Speaker 1: And then finally, what do you know about technology, digital strategies,

1433
01:17:39,200 --> 01:17:43,200
Speaker 1: business ideas today that you wish you knew twenty or

1434
01:17:43,240 --> 01:17:47,280
Speaker 1: so years ago? By Amazon? Um, you know, I don't

1435
01:17:47,280 --> 01:17:49,680
Speaker 1: think of myself as a technologist. I think a lot

1436
01:17:49,680 --> 01:17:52,639
Speaker 1: of these technologies are huge head fix I saw someone

1437
01:17:52,680 --> 01:17:55,000
Speaker 1: on bloomber TV when I was talking about VR. I

1438
01:17:55,040 --> 01:17:57,320
Speaker 1: think virtual reality is a head fake. I think Internet

1439
01:17:57,360 --> 01:18:00,000
Speaker 1: of Things is a big head fake. I think, uh,

1440
01:18:00,200 --> 01:18:02,799
Speaker 1: three D printing. I mean, there's there's so many heathics.

1441
01:18:02,800 --> 01:18:05,240
Speaker 1: The two technologies that I think are really exciting where

1442
01:18:05,240 --> 01:18:07,760
Speaker 1: I was gonna what I would invest over invest would

1443
01:18:07,800 --> 01:18:11,679
Speaker 1: be voice and messaging. I think those two and then

1444
01:18:12,000 --> 01:18:16,000
Speaker 1: not virtuality but augmented reality. Microsoft is big on that

1445
01:18:16,040 --> 01:18:17,960
Speaker 1: these days. By the and by the way, we're gonna

1446
01:18:18,000 --> 01:18:20,439
Speaker 1: talk about them, they're the fifth Horseman, probably one of

1447
01:18:20,439 --> 01:18:22,960
Speaker 1: the best performing company's, best managed companies the last twenty

1448
01:18:22,960 --> 01:18:25,960
Speaker 1: four months. But anyways, um I would I would be

1449
01:18:26,080 --> 01:18:29,519
Speaker 1: very focused on trying to find in areas in and

1450
01:18:29,520 --> 01:18:32,959
Speaker 1: around of voice and how to take businesses to messaging.

1451
01:18:33,880 --> 01:18:37,280
Speaker 1: We have been speaking with Professor Scott Galloway of n

1452
01:18:37,400 --> 01:18:40,559
Speaker 1: y U Stern School of Business, author of the four

1453
01:18:40,800 --> 01:18:46,360
Speaker 1: The Hindiana of Amazon, Apple, Facebook, and Google. If you

1454
01:18:46,560 --> 01:18:48,920
Speaker 1: enjoy this conversation, be sure and look up an inch

1455
01:18:48,960 --> 01:18:54,320
Speaker 1: with down an inch on iTunes, SoundCloud, overcast, Bloomberg dot com,

1456
01:18:54,400 --> 01:18:56,920
Speaker 1: well wherever finer podcasts are sold, and you can see

1457
01:18:56,920 --> 01:18:59,800
Speaker 1: any of the other hundred and sixty or so such

1458
01:19:00,000 --> 01:19:03,559
Speaker 1: podcast we've had previously. I would be remiss if I

1459
01:19:03,600 --> 01:19:07,599
Speaker 1: did not thank the Crack staff that helps to put

1460
01:19:07,680 --> 01:19:12,960
Speaker 1: this podcast together. Medina Parwana is my audio producer and engineer.

1461
01:19:13,360 --> 01:19:17,480
Speaker 1: Taylor Riggs is our booker. Michael Batnick is head of research.

1462
01:19:18,080 --> 01:19:22,360
Speaker 1: We love your comments, feedback and suggestions right to us

1463
01:19:22,479 --> 01:19:27,160
Speaker 1: at m IB podcast at Bloomberg dot net. I'm Barry Ridholts.

1464
01:19:27,439 --> 01:19:31,080
Speaker 1: You've been listening to Masters in Business on Bloomberg Radio