Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
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Speaker 1: Business Week with Carol Masser and Jason Kelly on Bloomberg Radio.
Speaker 1: Bomberg Business Week, Yeah, Friday, wrapping up the week, close
Speaker 1: to it. What do you make it this week? Um man?
Speaker 1: I think there's a lot more about kind of getting
Speaker 1: back to work and getting back to normal. I still
Speaker 1: think the city is going to be tricky for us,
Speaker 1: but I think, you know, we hit it off with
Speaker 1: a really smart medical conversation. I think it's in our
Speaker 1: weekend show. But it just you know, Manhattan versus the
Speaker 1: rest of the world. So we know Manhattan's trickier just
Speaker 1: because of the amount of people and just the structure
Speaker 1: of how we work in a very dense city. But
Speaker 1: I do feel up more optimism, and we certainly saw
Speaker 1: it play out in the markets. I mean, the Dow
Speaker 1: up three point seven this week, the S and P
Speaker 1: Jason up more than three percent, and the Now's up
Speaker 1: two percent, so there definitely was some enthusiasm in the markets.
Speaker 1: I do worry though about some of these other tensions,
Speaker 1: but I don't know how much is because it's an
Speaker 1: election year, or how much is some real tensions that
Speaker 1: might complicate the economy bouncing back. Yeah, I worry about
Speaker 1: those tensions too. I mean I worry about the tensions
Speaker 1: that are geopolitical. I worry about the tensions that are domestic,
Speaker 1: you know. I mean, I think we all have watched
Speaker 1: with you know, horror, everything that went on uh in Minnesota,
Speaker 1: and then you know, you sort of factor in the
Speaker 1: social media aspect of this, and you know, Twitter has
Speaker 1: been at the four of all of that. And man,
Speaker 1: do we have the perfect person to talk about that.
Speaker 1: I have to say our next guest, I was gonna
Speaker 1: energize when we talk with him. He's New York Times
Speaker 1: bestseller his book The Four The Hidden DNA of Amazon, Apple, Facebook,
Speaker 1: and Google. He also wrote The Algebra of Happiness, which
Speaker 1: if you have not read you should. You should also
Speaker 1: check out his video that's online. Uh. He's professor at
Speaker 1: n y use Stern School of Business. Delighted to have
Speaker 1: back with us, Scott Galloway, professor as we said, at
Speaker 1: the school. And he's on the phone in Delray Beach, Florida. Scott,
Speaker 1: So nice to have you here with us. How are
Speaker 1: you doing? Has your family, has your team? Everybody? I hope? Okay, um, well,
Speaker 1: thanks very much, Carl. Good to be with you. That's
Speaker 1: a generous question. Yeah, we're all. We're all doing really well.
Speaker 1: I think this is if you're blessed to have a job,
Speaker 1: if you can work from home, if you're healthy, and
Speaker 1: if you're and I check all those boxes, you're doing great. Well.
Speaker 1: Go ahead, Jason, Well, I was just going to say,
Speaker 1: I mean, we were getting ready for this show today, Scott.
Speaker 1: And as a veteran broadcaster podcaster, first of all, as
Speaker 1: an aside, your voice has been in my head all
Speaker 1: week because I've been listening to a phenomenal podcast that
Speaker 1: you contributed to called We Crashed about we Work, And
Speaker 1: maybe we'll talk a little bit about that later. But
Speaker 1: as we were getting ready for the show and watching
Speaker 1: everything that's going on with Twitter this week, both Carol
Speaker 1: and I were saying, we got to get your take
Speaker 1: on this. What's the thing that you're taking away from
Speaker 1: all this sturm and dragging between the President and Twitter. Well,
Speaker 1: so I think I think Twitter's real crime is it
Speaker 1: a share price didn't go up. I think Facebook if
Speaker 1: if Twitter is a dumpster fire of damage to the
Speaker 1: commonwealth and a rage machine, Facebook is a mushroom cloud.
Speaker 1: But Facebook appears who have entered into sort of this
Speaker 1: unholy deal with the President, so it appears that the
Speaker 1: President isn't going after Facebook. I think the opportunity here
Speaker 1: the most elegant regulation his regulation that addresses the externality,
Speaker 1: which is an underlying business model that creates division and
Speaker 1: says hey and team depression and the likes, and at
Speaker 1: the same time unlock shareholder value. I think this is
Speaker 1: an opportunity for Twitter to consider a subscription model. I
Speaker 1: think a large population of us out there who are
Speaker 1: somewhat addicted to Twitter, and organizations to count on it
Speaker 1: to disseminate information would pay money for it. And if
Speaker 1: you look at the three most successful media companies of
Speaker 1: the last ten years, it's Facebook, Google and Netflix. And
Speaker 1: Netflix is not doing damage to our teams or to
Speaker 1: the commonwealth because one is subscription and one is ad driven.
Speaker 1: So I think that's this time to address the underlying
Speaker 1: cancer here and not just the symptoms. And that is
Speaker 1: an ad driven model as opposed to a subscription model.
Speaker 1: And I hope the Twitter board shows some leadership here
Speaker 1: and decides to move to a subscription model because the
Speaker 1: thing that is causing all the problems there is an
Speaker 1: ad base model that encourages rage. Yeah. Well, you know,
Speaker 1: it's interesting. I was thinking about this, Scott, you know,
Speaker 1: the role of social media generally and Twitter in particular.
Speaker 1: You know, is it is it more social you know,
Speaker 1: which means we kind of just let it, let it
Speaker 1: do its thing, or is it more news media you
Speaker 1: know when and that and with that comes responsibilities and accountabilities.
Speaker 1: I mean, I have to say I love that Twitter.
Speaker 1: I feel like funally has a little bit of a
Speaker 1: spine here in terms of saying, there's a lot of
Speaker 1: information out there, but how do you see it? How
Speaker 1: would you teach it to your students? Well, it is
Speaker 1: a media company that osman media companies and media companies
Speaker 1: have a responsibility and they they do try and be
Speaker 1: They said, we don't want to be the arbit of truth.
Speaker 1: And I think most people want our our media firms
Speaker 1: and companies sitting at the helm of the Bob's let
Speaker 1: of information for the population to at least try to
Speaker 1: be the arbiters of truth. And that in fact, truth
Speaker 1: is a thing. And people immediately go to this notion
Speaker 1: of First Amendment. And what you have on Twitter and
Speaker 1: Facebook is that the more incendiary or damaging a statement,
Speaker 1: the more engagement it creates, and thereby more nissan ads,
Speaker 1: more older values. So you have um antivactors, white supremacists,
Speaker 1: conspiracy theorists who who are getting more than their fair
Speaker 1: share of oxygen because of drive shareholder value. And this
Speaker 1: is kind of the mother of all externalities. And if
Speaker 1: you look at the rise of white white supremacy, if
Speaker 1: you look at extreme nationalism, if you look at the
Speaker 1: demonization of immigrants and incidences around hate crimes, if you
Speaker 1: give those that data set and the rise of social media.
Speaker 1: To a statistician here, she will tell you that the
Speaker 1: two are correlated. And so we have an existential threat
Speaker 1: from the largest platforms ever constructed by man that are
Speaker 1: driven based on an algorithm that tears its social social fabric.
Speaker 1: So the key is how do you maintain the great
Speaker 1: paste that's all the shareholder value. There are some wonderful
Speaker 1: things about these networks, but get rid of the calories
Speaker 1: and that as the rage. And again I think it's
Speaker 1: moving to a subscription model. But I think if you know,
Speaker 1: Jack Dorsey doesn't have an own hot Hooly alliance with
Speaker 1: with Um the president, if his stock had been up tenfold,
Speaker 1: he would have shark repellent in our capitalist society. To
Speaker 1: damage our society is bad, but to not have your
Speaker 1: shares go up as worse. So Twitter is in a
Speaker 1: difficult spot. Well, let's continue our conversation with Scott Galloway,
Speaker 1: Professor of Marketing at n y U s Sturing School
Speaker 1: of Business, New York Times best selling author. His most
Speaker 1: recent book, which he joined our show to talk about
Speaker 1: when it came out, was The Algebrow Happiness Notes in
Speaker 1: the Pursuit of success, love and meaning and Scott, I
Speaker 1: gotta ask you. You know, we talked a lot about
Speaker 1: Twitter and what could be done there, and Facebook and
Speaker 1: what's happening. We've had a lot of conversations with folks
Speaker 1: in Silicon Valley who say Silicon Valley will be forever
Speaker 1: changed by this pandemic, maybe in a good way, maybe not.
Speaker 1: What's your take? It's an interesting question. I think. I
Speaker 1: think there's several dimensions there. I think on a a
Speaker 1: shareholder level, I believe that big tech is going to
Speaker 1: consolidate or further consolidate the market, take advantage of the
Speaker 1: stress and the ecosystem, make some great acquisitions of companies
Speaker 1: that are going to be on sale, and will Facebook
Speaker 1: and Google will emerge from this pandemic Instead of controlling
Speaker 1: sixty cents on the dollar, there control seventy cents on
Speaker 1: the dollar. And I think the market senses this. And
Speaker 1: if you owned a hundred dollars with of Amazon, Apple, Facebook,
Speaker 1: and Google on January one, you know, I think are
Speaker 1: out fourteen or seventeen percent of a year. So the
Speaker 1: pandemic is a calling of the herd, and people are
Speaker 1: betting that the elephants that survive will have more foliage
Speaker 1: posts the calling when the rains return, and the big
Speaker 1: tech will be big winners here. Amazon is about to
Speaker 1: announce the first sort of fully vaccinated supply chain through
Speaker 1: a massive investment in distancing protocols, additional compensation, and they'll
Speaker 1: really be the only firm in the world that can
Speaker 1: offer kind of end to end near COVID free products
Speaker 1: services vendors, which when you think about it, is just
Speaker 1: a staggering opportunity, not like what Disney is trying to
Speaker 1: do with professional sports bringing sports back to sort of
Speaker 1: a COVID free environment in Orlando. So I think on
Speaker 1: a shareholder level, they win. In terms of San Francisco,
Speaker 1: I think there's been a reversal of this incredible trend
Speaker 1: over the last thirty years where human and financial capital
Speaker 1: has flown have fled into cities. As of January, that
Speaker 1: was estimated the two thirds of all economic growth would
Speaker 1: happen in twenty supercities. That has probably been reversed. And
Speaker 1: it's not that San Francisco and New York won't be
Speaker 1: great places to live, are great places to do work.
Speaker 1: It's just they're likely going to see some cost pressure
Speaker 1: and housing prices come down But the places that get
Speaker 1: crushed are the people who had to commute in UH
Speaker 1: and have no reason to be in paying a thousand
Speaker 1: dollars of foot for a home in Grantwich, Connecticut or
Speaker 1: Short Hills. But I can pay three hundred dollars of
Speaker 1: foot in any one of a hundred different suburbs around
Speaker 1: the nation. I think those areas get just crushed. So
Speaker 1: that stays with us, right, We've seen it, you know,
Speaker 1: Scott already from the Big Banks talking about you know,
Speaker 1: not bringing work back to the city and creating shops outside,
Speaker 1: you know, in the suburbs of the same thing as
Speaker 1: you said, you know, Silicon Valley, Twitter saying hey, you
Speaker 1: want to work from home permanently, that's okay. So that
Speaker 1: is a significant shift going forward. It is, although it's
Speaker 1: sort of there's a lot of celebration among big tech
Speaker 1: companies employees about work from home and the worrior the
Speaker 1: fear I see is that if Mark Zuckerberg can move
Speaker 1: your job to Denver, he's likely going to move it
Speaker 1: to Bengalore, India. And that is the ability to put
Speaker 1: on a suit, put on you know, UH, to look good,
Speaker 1: get ready, manage the interpersonal relationships navigate and motivated team
Speaker 1: in person, FaceTime politics, whatever you want to call it
Speaker 1: at headquarters is of skill. And to think that people
Speaker 1: are going to get to work from home and go
Speaker 1: to a low cost environment for free is naive. This
Speaker 1: is going to be an opportunity for big tech to
Speaker 1: substantially reduce they're human costs. And what we're gonna end
Speaker 1: up with is the most valuable companies in the world
Speaker 1: with an even smaller full time employee base. Keep in mind,
Speaker 1: the largest work from home company in the world right
Speaker 1: now is Uber. Is that a good thing. Seven million
Speaker 1: of their driver partners technically work from home, and as
Speaker 1: a result, Uber has been able to to skirt minimum
Speaker 1: wage and health insurance regulations. So I think work from
Speaker 1: home is a double edged sword. Yeah, we definitely saw
Speaker 1: the wholes come out because of the virus. I do
Speaker 1: we just got a couple of minutes or so left here, Scott.
Speaker 1: I do want to ask about um your piece in
Speaker 1: the Washington Post where you talked about creating US Corona Court,
Speaker 1: you know, akin to the Peace Corps and some other
Speaker 1: issues missions that are out there. Tell us about that.
Speaker 1: I think it's really provocative and could be something that
Speaker 1: really could make a difference. Well, I think there's a
Speaker 1: huge opportunity here, Carol, if you think about our economy
Speaker 1: is dependent upon pretty much or our society to a
Speaker 1: certain extent, is dependent upon the apex of the relapse
Speaker 1: and the fall are hopefully the lack thereof and the
Speaker 1: flattening the curve, if you will, is simply a function
Speaker 1: of testing, tracing and then isolation. And I would argue
Speaker 1: the weak link is tracing where we only have tracers
Speaker 1: in the United States, mostly focused on food born illnesses
Speaker 1: and STDs, and it's estimated we need between two hundred
Speaker 1: thousand and four hundred thousand. We also have about a
Speaker 1: third of the four million kids who were supposed to
Speaker 1: show up for a freshman fall classes saying they're thinking
Speaker 1: about a gap here. So I wonder if there's an
Speaker 1: opportunity similar to the Peace Corps, similar commission the Latter
Speaker 1: Day Saints, where we arm this kind of army of
Speaker 1: super soldiers who are largely I don't want to say immune,
Speaker 1: but more resilient to COVID nineteen, train them in handheld technologies,
Speaker 1: and create an army of tracers similar to what South
Speaker 1: Korea did to suppress the curve, and not only would
Speaker 1: we ideally suppress the curve, but maybe award them tuition remission,
Speaker 1: give them more opportunities for college. And as importantly, the
Speaker 1: reason we were able to pass such incredible brown, groundbreaking
Speaker 1: legislation in the fifties, sixties, and seventies is over somewhere
Speaker 1: we're going to happen. Two thirds of our leaders elected
Speaker 1: leaders have served in uniform together where they put country
Speaker 1: in front of politics, and I think we need that
Speaker 1: sort of reunification, if you will, and recognition that greatness
Speaker 1: is in the agency of others. And I think it's
Speaker 1: time to have a core of young people who serve
Speaker 1: their country. Yeah, there's been a tremendous disconnect um with that, UM, Scott,
Speaker 1: thank you so much. Truthfully, Jason and I were still
Speaker 1: looking forward to getting some time with you, and I
Speaker 1: really appreciate it, UM, and I wish we had kind
Speaker 1: of another hour to talk with Scott. Take care of Scott,
Speaker 1: be well, uh and stay safe. Scott Galloway, Professor of
Speaker 1: n y U Stern School of Business, on the phone
Speaker 1: in Delway Beach, Florida. His books the best seller The
Speaker 1: for the Hidden DNA of Amazon, Apple, Facebook, and Google,
Speaker 1: and do check out the algebra of Happiness, pursuit of success,
Speaker 1: love and what it all means. As I mentioned, there's
Speaker 1: a great video to out there online. Thanks so much
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