1 00:00:03,240 --> 00:00:08,240 Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg Radio. Hi, 2 00:00:08,400 --> 00:00:11,640 Speaker 1: this is Barry Ridholts. You're listening to the podcast portion 3 00:00:11,760 --> 00:00:15,239 Speaker 1: of Masters in Business on Bloomberg Radio. I have a 4 00:00:15,280 --> 00:00:19,360 Speaker 1: fantastic guest today. And I know you guys are tired 5 00:00:19,360 --> 00:00:21,560 Speaker 1: of hearing me say that each and every week, But 6 00:00:21,840 --> 00:00:25,160 Speaker 1: when you have a guest who is fantastic, you just 7 00:00:25,200 --> 00:00:29,280 Speaker 1: have to say, this guy's fantastic. Scott Galloway, Professor of 8 00:00:29,800 --> 00:00:33,639 Speaker 1: Digital Branding and Marketing at n y U Stern Graduate 9 00:00:33,640 --> 00:00:37,080 Speaker 1: School of Business. I found this. I found some of 10 00:00:37,080 --> 00:00:41,760 Speaker 1: the work of of Scott Professor Galloway on YouTube and 11 00:00:41,880 --> 00:00:45,640 Speaker 1: he's done a number of really interesting videos. He does 12 00:00:45,680 --> 00:00:49,000 Speaker 1: a weekly video. But but the most fascinating thing I 13 00:00:49,040 --> 00:00:54,560 Speaker 1: saw of him was called the Four Horsemen of Technology, Apple, Amazon, Facebook, 14 00:00:54,560 --> 00:00:58,840 Speaker 1: and Google. And he did this presentation at a conference. 15 00:00:59,560 --> 00:01:02,720 Speaker 1: It was thing like nineties slides in fifteen minutes, and 16 00:01:02,800 --> 00:01:05,679 Speaker 1: it was really just a tour to force discussion of 17 00:01:06,080 --> 00:01:11,039 Speaker 1: what's going on in branding, in retail, in technology, and 18 00:01:11,560 --> 00:01:16,080 Speaker 1: it was really just an amazing um conversation. And so 19 00:01:16,760 --> 00:01:19,920 Speaker 1: I saw this, I started doing some research. Uh, he's 20 00:01:20,000 --> 00:01:21,680 Speaker 1: right here in n y U use, you know, ten 21 00:01:21,680 --> 00:01:26,160 Speaker 1: minutes from from the Bloomberg studios, and so I invited 22 00:01:26,240 --> 00:01:28,479 Speaker 1: him to be on the show, and to my great 23 00:01:28,680 --> 00:01:32,200 Speaker 1: uh surprise, he said yes, And so we had this 24 00:01:32,280 --> 00:01:36,680 Speaker 1: conversation and he is one of the most fascinating knowledgeable 25 00:01:36,720 --> 00:01:39,920 Speaker 1: people when it comes to those areas things like luxury 26 00:01:39,959 --> 00:01:45,080 Speaker 1: brands and marketing and the intersection of your your physical 27 00:01:45,680 --> 00:01:50,240 Speaker 1: stores with your online sites, with your social and mobile engagements. 28 00:01:50,880 --> 00:01:54,680 Speaker 1: And it's really quite a fascinating um conversation. We we 29 00:01:54,800 --> 00:01:58,960 Speaker 1: covered so many different things. It's really so interesting and amazing. 30 00:01:59,000 --> 00:02:02,280 Speaker 1: And as you'll hear, at a certain point, it shifts 31 00:02:02,320 --> 00:02:05,200 Speaker 1: from me, you know, doing the radio thing and asking 32 00:02:05,280 --> 00:02:08,840 Speaker 1: questions and having him answer to just a real conversation 33 00:02:08,880 --> 00:02:14,000 Speaker 1: about what is happening in the universe of technology and 34 00:02:14,080 --> 00:02:17,760 Speaker 1: retail and branding and Amazon and Apple and Google and 35 00:02:17,840 --> 00:02:21,239 Speaker 1: Facebook and Twitter and everything else. So I I really 36 00:02:21,280 --> 00:02:23,519 Speaker 1: had a great time sitting and chatting with him. He's 37 00:02:23,520 --> 00:02:25,079 Speaker 1: the sort of guy you would love to pull up 38 00:02:25,400 --> 00:02:28,080 Speaker 1: next to um in a in a bar, sit down 39 00:02:28,120 --> 00:02:30,320 Speaker 1: and have a beer and just talk about what's going on. 40 00:02:30,680 --> 00:02:33,600 Speaker 1: And that's pretty much what we did. A little cappuccino 41 00:02:33,880 --> 00:02:37,040 Speaker 1: and we were off to the races. So without any 42 00:02:37,080 --> 00:02:41,399 Speaker 1: further ado, here is my conversation with Professor Scott Galloway 43 00:02:41,520 --> 00:02:50,000 Speaker 1: of n y U. This is Masters in Business with 44 00:02:50,080 --> 00:02:55,480 Speaker 1: Barry Ridholts on Bloomberg Radio. My guest today is Scott Galloway. 45 00:02:55,520 --> 00:02:59,720 Speaker 1: He's a professor of Digital and Brands at and while 46 00:02:59,720 --> 00:03:05,480 Speaker 1: you learn, is that the correct title professor of Marketing. UM. 47 00:03:05,560 --> 00:03:09,839 Speaker 1: Welcome to Bloomberg. So before we get started, you may 48 00:03:09,880 --> 00:03:12,839 Speaker 1: not be well known to all of our listeners. Let 49 00:03:12,840 --> 00:03:18,000 Speaker 1: me go through your very very significant curriculum. Curriculum VITA 50 00:03:18,960 --> 00:03:21,240 Speaker 1: bachelor's from u c l A and then an NBA 51 00:03:21,360 --> 00:03:25,239 Speaker 1: from Berkeley. Currently Clinical Professor of Marketing, n y U 52 00:03:25,360 --> 00:03:29,440 Speaker 1: Stern School of Business. Author of the Digital i Q Index, 53 00:03:29,560 --> 00:03:33,120 Speaker 1: a global ranking of prestige brands. Will talk about that 54 00:03:33,200 --> 00:03:36,040 Speaker 1: in a little more detail. Named one of the world's 55 00:03:36,120 --> 00:03:41,160 Speaker 1: fifty best business school professors, founder of numerous firms L two, rent, 56 00:03:41,280 --> 00:03:46,440 Speaker 1: Envelope and Profit and named the World Economic Forums Global 57 00:03:46,560 --> 00:03:51,120 Speaker 1: Leaders of Tomorrow, which is a hundred individuals under the 58 00:03:51,160 --> 00:03:54,840 Speaker 1: age of forty whose accomplishments have had an impact on 59 00:03:54,880 --> 00:03:57,120 Speaker 1: the global level. You're also on the board or have 60 00:03:57,240 --> 00:03:59,840 Speaker 1: served on the board of Directors of Eddie Bauer, the 61 00:04:00,000 --> 00:04:04,200 Speaker 1: New York Times, Gateway Computer, and Berkeley's Hot School of Business. 62 00:04:04,640 --> 00:04:07,840 Speaker 1: Did I skip anything or is that No? That's great? Thanks. 63 00:04:07,880 --> 00:04:10,280 Speaker 1: So so let's talk a little bit about your background. 64 00:04:10,320 --> 00:04:15,000 Speaker 1: First of all, why would you leave Sonny, California? For Yeah? 65 00:04:15,000 --> 00:04:16,680 Speaker 1: It makes it makes no sense, right, That's one of 66 00:04:16,720 --> 00:04:18,359 Speaker 1: those things. Every time you're flying back into l a 67 00:04:18,520 --> 00:04:20,320 Speaker 1: X and you look around, you're getting your convertible, you think, 68 00:04:20,320 --> 00:04:22,800 Speaker 1: why did I ever leave? I just always wanted to 69 00:04:22,839 --> 00:04:24,160 Speaker 1: live in New York. You know what it's like. This 70 00:04:24,240 --> 00:04:26,800 Speaker 1: is if you're an energy, it's it's the center of 71 00:04:26,839 --> 00:04:28,800 Speaker 1: the world. Yeah, the helm of the bob sled, the 72 00:04:28,800 --> 00:04:31,520 Speaker 1: tip of the spear of the greatest experiment. The density 73 00:04:31,560 --> 00:04:34,560 Speaker 1: of culture, interesting people. Is a great place to live. 74 00:04:34,560 --> 00:04:37,000 Speaker 1: I love San Francisco, did my graduate workout there. Start 75 00:04:37,040 --> 00:04:39,159 Speaker 1: a bunch internet cominges. But it's a one industry town. 76 00:04:39,200 --> 00:04:41,840 Speaker 1: It's tech l as in one industry town, it's entertainment. 77 00:04:41,839 --> 00:04:43,680 Speaker 1: The thing one of the great things about New York 78 00:04:43,720 --> 00:04:47,040 Speaker 1: is the currencies of power and success here are are multiple. 79 00:04:47,880 --> 00:04:50,520 Speaker 1: There's a lot of different ways to kind of get 80 00:04:50,520 --> 00:04:52,400 Speaker 1: your groove on here and just just love it here. 81 00:04:52,480 --> 00:04:57,440 Speaker 1: Oh sure, business investing, theater, publishing, television, real estate is 82 00:04:57,480 --> 00:05:00,200 Speaker 1: just huge here, although it seems to be huge where 83 00:05:00,200 --> 00:05:03,040 Speaker 1: if we're looking around the country. Yep. So you come 84 00:05:03,080 --> 00:05:07,600 Speaker 1: to n y U as a professor, Um, what was 85 00:05:08,160 --> 00:05:10,440 Speaker 1: tell us a little bit about red envelope and profit 86 00:05:10,560 --> 00:05:14,200 Speaker 1: do very different companies. Sure, So started out of Morgan Stanley, 87 00:05:14,480 --> 00:05:17,560 Speaker 1: only real job I've ever had, and then I actually 88 00:05:17,560 --> 00:05:19,400 Speaker 1: got kind of sick, and when you get sick at 89 00:05:19,400 --> 00:05:22,520 Speaker 1: a young age, you reevaluate your forced maturity is kind 90 00:05:22,520 --> 00:05:24,360 Speaker 1: of forced on you and decided I didn't know what 91 00:05:24,400 --> 00:05:25,800 Speaker 1: I wanted to do, but you I didn't want to 92 00:05:25,839 --> 00:05:28,320 Speaker 1: be an investment banker. So did what anyone who is 93 00:05:28,480 --> 00:05:30,159 Speaker 1: fairly ambitious and doesn't know what they want to do. 94 00:05:30,200 --> 00:05:32,880 Speaker 1: I went back to graduate school and then got very 95 00:05:32,920 --> 00:05:35,560 Speaker 1: inspired by a guy named David Ocker, who was considered 96 00:05:35,560 --> 00:05:38,479 Speaker 1: the father of modern branding UH, and started coming called 97 00:05:38,480 --> 00:05:41,680 Speaker 1: Profit of Brand Strategy Firm, focused on his principles. We 98 00:05:41,800 --> 00:05:45,000 Speaker 1: grew that to about four people, really rewarding, but then 99 00:05:45,040 --> 00:05:47,400 Speaker 1: decided I didn't want to be in a services company. 100 00:05:47,400 --> 00:05:49,760 Speaker 1: I've always decided our thought of services company was really 101 00:05:49,800 --> 00:05:53,400 Speaker 1: a young man's business. You're kind of on your clients schedule, 102 00:05:53,600 --> 00:05:55,400 Speaker 1: and then was fortunate enough to get swept up in 103 00:05:55,440 --> 00:05:59,839 Speaker 1: the Internet era, started red Envelope, multi channel e commerce company, 104 00:06:00,320 --> 00:06:01,600 Speaker 1: and then on the day of the I p O 105 00:06:01,760 --> 00:06:04,320 Speaker 1: said this is great. I have some opportunities and some 106 00:06:04,360 --> 00:06:06,160 Speaker 1: flexibilities with what I want to do with my life 107 00:06:06,160 --> 00:06:09,360 Speaker 1: and decided to pursue there's kind of lifelong passion or 108 00:06:09,480 --> 00:06:12,120 Speaker 1: dream and teach and change my life. Moved to New York, 109 00:06:12,200 --> 00:06:14,560 Speaker 1: join the faculty n y U, and here we are. 110 00:06:14,880 --> 00:06:17,440 Speaker 1: That's that's a huge, huge set of changes in a 111 00:06:17,560 --> 00:06:20,080 Speaker 1: very short period of time. Yeah, it's it's but it's 112 00:06:20,080 --> 00:06:23,480 Speaker 1: been a lot of fun. So so you briefly were 113 00:06:23,520 --> 00:06:25,720 Speaker 1: at Morgan Stanley, so you have some experience in the 114 00:06:25,720 --> 00:06:27,520 Speaker 1: real world. How long have you been an n y 115 00:06:27,600 --> 00:06:29,760 Speaker 1: U F I joined the Faculty n y U and 116 00:06:29,800 --> 00:06:31,920 Speaker 1: two thousand and two, and it's been just it's been 117 00:06:31,960 --> 00:06:36,000 Speaker 1: thirteen great years. Just feel exceptionally, exceptionally fortunate to get 118 00:06:36,040 --> 00:06:38,880 Speaker 1: to teach at such a fantastic university. It's been, it's 119 00:06:38,960 --> 00:06:40,960 Speaker 1: it's just been wonderful. So let's talk a little bit 120 00:06:41,000 --> 00:06:44,560 Speaker 1: about the Digital i Q Index. This is something I 121 00:06:44,560 --> 00:06:46,960 Speaker 1: believe you were involved in creating. Was it two thousand 122 00:06:47,000 --> 00:06:49,640 Speaker 1: and ten. Is that right? Yeah, it's it was really accidental. 123 00:06:49,680 --> 00:06:52,520 Speaker 1: You can't get very far in academia without doing research, 124 00:06:52,680 --> 00:06:54,799 Speaker 1: and my background was in the e commerce. I thought, 125 00:06:55,279 --> 00:06:58,240 Speaker 1: there's there are metrics for return on equity and UH, 126 00:06:58,480 --> 00:07:01,800 Speaker 1: price earnings, carc quality with JD Powers, how many people 127 00:07:01,839 --> 00:07:05,360 Speaker 1: watch a program with Nielsen, But there really isn't a 128 00:07:05,480 --> 00:07:07,919 Speaker 1: measure or a benchmark for how a brand is doing 129 00:07:07,960 --> 00:07:10,880 Speaker 1: across its entire digital footprint. So architect and an algorithm 130 00:07:10,880 --> 00:07:14,480 Speaker 1: of eight hundred and fifty data points across site, digital marketing, 131 00:07:14,520 --> 00:07:17,200 Speaker 1: social and mobile, and then applied it against a hundred 132 00:07:17,200 --> 00:07:19,400 Speaker 1: brands and rank them, thinking it would be a piece 133 00:07:19,440 --> 00:07:22,880 Speaker 1: of academic research. Within about forty eight hours of releasing 134 00:07:22,880 --> 00:07:24,960 Speaker 1: it heard from about forty of the brands saying who 135 00:07:24,960 --> 00:07:27,400 Speaker 1: are you and why are you doing this? And recognized 136 00:07:27,400 --> 00:07:29,480 Speaker 1: there was a commercial opportunity. So I asked the dean 137 00:07:29,520 --> 00:07:31,120 Speaker 1: if we could spin out the I P and start 138 00:07:31,160 --> 00:07:34,080 Speaker 1: a private enterprise called L two, and n y U 139 00:07:34,200 --> 00:07:36,520 Speaker 1: was very generous with us and and said fine, as 140 00:07:36,520 --> 00:07:39,080 Speaker 1: long as your support of M y U and UH. 141 00:07:39,240 --> 00:07:41,560 Speaker 1: And that's it was really the birth of an accidental 142 00:07:41,600 --> 00:07:43,920 Speaker 1: business and now L two works with everyone from PNG 143 00:07:44,040 --> 00:07:47,400 Speaker 1: and Uni Leaver to Coach Tiffany, Nike, Samsung. So it's 144 00:07:47,400 --> 00:07:49,760 Speaker 1: been a lot of fun. So you talk about looking 145 00:07:49,920 --> 00:07:55,520 Speaker 1: at and evaluating a company across site, digital, social, mobile, 146 00:07:55,960 --> 00:07:59,840 Speaker 1: that's a pretty broad yet inclusive set of of data points. 147 00:08:00,000 --> 00:08:02,840 Speaker 1: It's the thinking behind that every place a consumer might 148 00:08:03,360 --> 00:08:06,120 Speaker 1: come into contact with a brand, so all the touchpoints 149 00:08:06,120 --> 00:08:09,320 Speaker 1: so and every brand has different strengths and weaknesses. And 150 00:08:09,360 --> 00:08:12,559 Speaker 1: regardless of how much capital you have, the cruel truth 151 00:08:12,560 --> 00:08:15,360 Speaker 1: of capitalism and investing in digital is you have to 152 00:08:15,400 --> 00:08:18,000 Speaker 1: pick your punches. So even a home depot or a 153 00:08:18,040 --> 00:08:21,400 Speaker 1: Sephora or a Vitan, organizations you would think would have 154 00:08:21,440 --> 00:08:23,480 Speaker 1: a ton of resources, have to pick their punches. And 155 00:08:23,480 --> 00:08:26,000 Speaker 1: the issue is you know what lever you're gonna pull. 156 00:08:26,040 --> 00:08:28,360 Speaker 1: If you're really about increasing your percentage of sales online, 157 00:08:28,400 --> 00:08:30,320 Speaker 1: you're gonna be more focused on side. If you're about 158 00:08:30,360 --> 00:08:32,839 Speaker 1: signaling innovation to a younger consumer, it's probably gonna be 159 00:08:32,880 --> 00:08:36,040 Speaker 1: around more around social. If you're trying to create a 160 00:08:36,080 --> 00:08:40,160 Speaker 1: loyalty program that has tremendous uses digital to connective tissue 161 00:08:40,160 --> 00:08:41,800 Speaker 1: between your store and your site, that's more about a 162 00:08:41,800 --> 00:08:44,560 Speaker 1: loyalty program and a mobile phone in the store, So 163 00:08:44,600 --> 00:08:47,319 Speaker 1: we're trying to create a benchmark sets the brands contract 164 00:08:47,360 --> 00:08:50,240 Speaker 1: their strengths and weaknesses relative of their competitive set and 165 00:08:50,320 --> 00:08:53,240 Speaker 1: help them shape the shape their digital roadmap and allocate 166 00:08:53,280 --> 00:08:57,439 Speaker 1: their human creative financial capital more efficiently. Because everyone agrees 167 00:08:57,480 --> 00:08:59,720 Speaker 1: that a better investment in digital is probably gonna get 168 00:08:59,720 --> 00:09:01,880 Speaker 1: your great to return than did than investments in some 169 00:09:01,920 --> 00:09:04,040 Speaker 1: other areas right now, but they don't know what they 170 00:09:04,040 --> 00:09:05,640 Speaker 1: don't know. They really don't know where to start. So 171 00:09:05,679 --> 00:09:08,319 Speaker 1: the ideas, how do you figure out how your digital 172 00:09:08,360 --> 00:09:11,120 Speaker 1: capital allocation foots your of all corporate strategy and how 173 00:09:11,120 --> 00:09:13,600 Speaker 1: do you drive stakeholder growth. I'm Barry rid Helps. You're 174 00:09:13,600 --> 00:09:16,480 Speaker 1: listening to Masters in Business on Bloomberg Radio. My special 175 00:09:16,520 --> 00:09:19,600 Speaker 1: guest today is Scott Galloway. He is a professor of 176 00:09:20,160 --> 00:09:23,880 Speaker 1: Digital Brands and Marketing at n y U and I 177 00:09:23,960 --> 00:09:26,760 Speaker 1: love your conversations. By the way, the way I found 178 00:09:26,880 --> 00:09:30,840 Speaker 1: out about you was the Four Horsemen video which is 179 00:09:30,880 --> 00:09:34,600 Speaker 1: all over YouTube, and some of the conversations you've had 180 00:09:34,640 --> 00:09:37,559 Speaker 1: about retail and the deep dive you do into that space, 181 00:09:37,880 --> 00:09:40,960 Speaker 1: which I find to be absolutely fascinating. So let's let's 182 00:09:41,040 --> 00:09:44,040 Speaker 1: jump into retail. I love this quote of yours. You 183 00:09:44,120 --> 00:09:48,439 Speaker 1: said retail stores are the new black explained so in 184 00:09:48,520 --> 00:09:51,240 Speaker 1: the turn in the world of e commerce, I believe 185 00:09:51,280 --> 00:09:54,160 Speaker 1: the pure play commerce has no future. That almost every 186 00:09:54,200 --> 00:09:56,400 Speaker 1: pure play commerce company is either going to open stores 187 00:09:56,480 --> 00:09:58,800 Speaker 1: or go out of business. That's a pretty radical position, 188 00:09:58,880 --> 00:10:01,840 Speaker 1: isn't it. Well? I would defend I think it's defensible. 189 00:10:01,880 --> 00:10:04,560 Speaker 1: I would I would challenge anyone to name the pure 190 00:10:04,559 --> 00:10:07,839 Speaker 1: plea e commerce company, and and and and let's talk 191 00:10:07,880 --> 00:10:11,640 Speaker 1: about whether this is a sustainable business or not. And effectively, 192 00:10:11,640 --> 00:10:14,680 Speaker 1: the consumer always gets what she wants. And there's there's 193 00:10:14,720 --> 00:10:17,520 Speaker 1: three doors here. There's a great e commerce site that 194 00:10:17,640 --> 00:10:20,600 Speaker 1: just has an e commerce offering. There's a great retail 195 00:10:21,080 --> 00:10:23,280 Speaker 1: concept with just bricks and mortar or maybe a week 196 00:10:23,480 --> 00:10:26,120 Speaker 1: e commerce site. And then there's door number three, a Saphora, 197 00:10:26,200 --> 00:10:29,480 Speaker 1: william Snowmer and Macy's that have great stores, grat e 198 00:10:29,559 --> 00:10:32,120 Speaker 1: commerce and use digital as a connective tissue for around 199 00:10:32,160 --> 00:10:35,120 Speaker 1: a loyalty program, and the consumer wants door number three. 200 00:10:35,160 --> 00:10:37,800 Speaker 1: I think the future looks more like Macy's and Williams 201 00:10:37,800 --> 00:10:40,080 Speaker 1: Snowman than it looks like Amazon or not a Porte 202 00:10:40,160 --> 00:10:43,239 Speaker 1: or Guilt. And where does eBay fit into that? Ecosystem. 203 00:10:43,360 --> 00:10:45,960 Speaker 1: I wouldn't describe you as a pure play retail. I 204 00:10:45,960 --> 00:10:48,280 Speaker 1: think of them as a marketplace, just to get between 205 00:10:48,320 --> 00:10:51,839 Speaker 1: a berness. They're not taking inventory there, They're they're a marketplace. 206 00:10:52,160 --> 00:10:55,560 Speaker 1: And speaking of inventory, you another quote of yours. We 207 00:10:55,640 --> 00:11:01,040 Speaker 1: have these incredibly flexible, robust warehouses cold stores explain. So 208 00:11:01,679 --> 00:11:03,840 Speaker 1: I've been a big fan of Amazon, and I'm actually 209 00:11:03,880 --> 00:11:06,000 Speaker 1: going a little bit bearish on it because I think 210 00:11:06,000 --> 00:11:09,440 Speaker 1: it's I think what Amazon has missed a little bit 211 00:11:09,520 --> 00:11:12,880 Speaker 1: is that in terms of consumer behavior, consumers value convenience 212 00:11:12,960 --> 00:11:15,680 Speaker 1: over speed, and that is if you were to order, 213 00:11:16,400 --> 00:11:20,520 Speaker 1: say you decided, I'm gonna spend more time outside at 214 00:11:20,600 --> 00:11:22,560 Speaker 1: my home in the North Fork and I need some 215 00:11:22,559 --> 00:11:25,240 Speaker 1: some block, so I'm going to order Laroche Puss, which 216 00:11:25,240 --> 00:11:28,160 Speaker 1: is this fantastic und block. You neither order an Amazon 217 00:11:28,440 --> 00:11:30,760 Speaker 1: and have it delivered to you in a day four hours, 218 00:11:30,760 --> 00:11:32,640 Speaker 1: two hours if they have their way, or you could 219 00:11:32,679 --> 00:11:35,120 Speaker 1: order it at sephora dot com and then bomb down 220 00:11:35,160 --> 00:11:36,880 Speaker 1: the elevator here and pick it up with the Sephora 221 00:11:36,920 --> 00:11:39,000 Speaker 1: two blocks away anytime between the hours of ten and 222 00:11:39,040 --> 00:11:42,320 Speaker 1: a PM. Click and collect or buy online pickup in 223 00:11:42,400 --> 00:11:45,120 Speaker 1: store is probably the biggest phenomenon retail in the last 224 00:11:45,160 --> 00:11:47,319 Speaker 1: couple of years, we didn't see a company it's coming. 225 00:11:47,360 --> 00:11:50,640 Speaker 1: It sounds very base, but it's hugely convenient to order 226 00:11:50,720 --> 00:11:53,480 Speaker 1: online and pick up in store. And these if it's 227 00:11:53,480 --> 00:11:55,199 Speaker 1: in the store, why do I have to order online? 228 00:11:55,200 --> 00:11:57,320 Speaker 1: Why could I just walk two blocks and do that? 229 00:11:57,440 --> 00:11:59,439 Speaker 1: Because people like to get the information, they like to 230 00:11:59,480 --> 00:12:03,120 Speaker 1: do the brow saying. Emotional and intellectual purchasing has moved 231 00:12:03,160 --> 00:12:07,280 Speaker 1: from the store to online. So for traffic to retail 232 00:12:07,360 --> 00:12:11,319 Speaker 1: down and five years by retail has grown two or 233 00:12:11,400 --> 00:12:13,920 Speaker 1: three percent a year. But what happens the following The 234 00:12:14,040 --> 00:12:17,839 Speaker 1: browsing and buying has moved online, The fulfillment, the transaction 235 00:12:17,880 --> 00:12:20,760 Speaker 1: and the pickup is still in the store. Think about cars. 236 00:12:20,760 --> 00:12:22,080 Speaker 1: Think about when you and I were a kid, we 237 00:12:22,120 --> 00:12:24,120 Speaker 1: used to go with our dad to that one area 238 00:12:24,240 --> 00:12:26,079 Speaker 1: town where we look at a car we'd actually kicked 239 00:12:26,120 --> 00:12:28,040 Speaker 1: the tires, take a car and it's test drive, look 240 00:12:28,080 --> 00:12:31,160 Speaker 1: at those brochures and negotiate the transaction. The number of 241 00:12:31,160 --> 00:12:33,600 Speaker 1: people now who have actually skipped the test drive has 242 00:12:33,679 --> 00:12:36,840 Speaker 1: doubled just in the last five years. We can go online. 243 00:12:37,920 --> 00:12:41,800 Speaker 1: Cargoes are prohibited from actually selling online, but effectively we 244 00:12:41,960 --> 00:12:44,599 Speaker 1: buy online. Now we go to a great configurator, we 245 00:12:44,679 --> 00:12:47,640 Speaker 1: start getting served ads by other automobile companies. We can 246 00:12:47,679 --> 00:12:49,800 Speaker 1: go to Audi dot com, build our a six down 247 00:12:49,840 --> 00:12:51,760 Speaker 1: to the leather piping on the seat. We can find 248 00:12:51,760 --> 00:12:54,080 Speaker 1: out how much the dealer paid for it. We can 249 00:12:54,120 --> 00:12:56,800 Speaker 1: get user reviews, and then we go into the dealership 250 00:12:57,000 --> 00:12:59,440 Speaker 1: armed with the exact car. We want the exact price range. 251 00:12:59,480 --> 00:13:01,920 Speaker 1: We know we should. So car dealerships are no longer 252 00:13:01,960 --> 00:13:06,320 Speaker 1: selling cars. They're really just warehouses fulfilling and consummating the transaction. 253 00:13:06,800 --> 00:13:09,640 Speaker 1: That's a great metaphor for what's happening in retail. Browsing 254 00:13:09,679 --> 00:13:13,160 Speaker 1: and decision making have moved online, even if the transaction 255 00:13:13,240 --> 00:13:15,920 Speaker 1: and the pickup are happening in retail. But bricks and 256 00:13:15,920 --> 00:13:18,520 Speaker 1: mortar plays a great, you know, really important role. It's 257 00:13:18,559 --> 00:13:21,240 Speaker 1: a great way to pick up stuff. It's a great 258 00:13:21,240 --> 00:13:23,960 Speaker 1: place to learn more about the transaction. It's a great 259 00:13:23,960 --> 00:13:28,480 Speaker 1: place to brand. These are powerful branding vehicles, these these 260 00:13:28,520 --> 00:13:31,120 Speaker 1: brick and mortar stores. So I think the new black 261 00:13:31,120 --> 00:13:32,880 Speaker 1: and e commerce is stores. A lot of them are 262 00:13:32,880 --> 00:13:35,840 Speaker 1: opening bricks and mortar. So you talk about um, the 263 00:13:35,840 --> 00:13:40,720 Speaker 1: biggest challenger to Amazon is stores like Macy's and I've 264 00:13:40,800 --> 00:13:44,079 Speaker 1: noticed over the past few years in terms of marketing 265 00:13:44,120 --> 00:13:46,840 Speaker 1: and displays within the stores. And I know they own 266 00:13:46,880 --> 00:13:48,920 Speaker 1: a variety of other stores. I think they own Lord 267 00:13:48,920 --> 00:13:53,200 Speaker 1: and Taylor or Bloomingdale's or some combination of um. But 268 00:13:53,280 --> 00:13:57,280 Speaker 1: I've I've noticed that they've really gotten very savvy about 269 00:13:57,400 --> 00:14:00,720 Speaker 1: their online and you show up at store, Hey I 270 00:14:00,760 --> 00:14:03,160 Speaker 1: have I like this, but you don't have it in black, 271 00:14:03,200 --> 00:14:05,240 Speaker 1: and you don't have it in a large They're like, oh, 272 00:14:05,240 --> 00:14:07,360 Speaker 1: we'll ship it to you for free. That's a new 273 00:14:07,400 --> 00:14:10,840 Speaker 1: thing from them, that thinking like an e commerce company, 274 00:14:11,080 --> 00:14:13,280 Speaker 1: not like a well we'll get a delivery in six 275 00:14:13,320 --> 00:14:15,200 Speaker 1: months and you can come check us out. Then. Yeah. 276 00:14:15,200 --> 00:14:17,400 Speaker 1: The most inspiring companies in retail for the last five 277 00:14:17,480 --> 00:14:21,240 Speaker 1: years haven't been Amazon or Netaporte. It's been Macy's in Nordstrom. 278 00:14:21,320 --> 00:14:23,880 Speaker 1: The crisis is a terrible thing to waste. Five years ago, 279 00:14:24,360 --> 00:14:27,400 Speaker 1: I advise Hedgephones and a large read came to us 280 00:14:27,840 --> 00:14:29,600 Speaker 1: the fund I was advising, and said, we want to 281 00:14:29,600 --> 00:14:32,640 Speaker 1: take a control position and Macy's or a large position, 282 00:14:32,680 --> 00:14:34,640 Speaker 1: and advocate for them to shut it down and sell 283 00:14:34,680 --> 00:14:36,680 Speaker 1: the underlying real estate, which is worth more than the 284 00:14:36,720 --> 00:14:40,720 Speaker 1: stock right now. They saw the future was not where 285 00:14:40,720 --> 00:14:43,680 Speaker 1: they were headed, and they made massive investments and leverage 286 00:14:43,720 --> 00:14:47,080 Speaker 1: their operational competence, their capital to cash flow to build 287 00:14:47,160 --> 00:14:50,960 Speaker 1: unbelievably strong e commerce offerings, connected that to their stores 288 00:14:51,280 --> 00:14:55,240 Speaker 1: and have fantastic multi channel offerings. Macy Stock is outperformed 289 00:14:55,640 --> 00:14:58,480 Speaker 1: Amazon over the last one, three and five years. Nordstrom 290 00:14:58,520 --> 00:15:01,880 Speaker 1: Stock is outperformed and Amazon the last several years. These 291 00:15:01,880 --> 00:15:05,680 Speaker 1: are incredible companies that have embraced the digital future and 292 00:15:05,720 --> 00:15:08,760 Speaker 1: have proven basically everybody wrong the future really is about 293 00:15:08,840 --> 00:15:12,520 Speaker 1: multi channel Macy's and Nordstrom's, I would argue most inspirational 294 00:15:12,560 --> 00:15:15,680 Speaker 1: retailers and have rewarded their shareholders of the last last 295 00:15:15,680 --> 00:15:18,640 Speaker 1: several years. So much for first mover advantage, at least 296 00:15:18,640 --> 00:15:21,160 Speaker 1: when it comes to Amazon. Yeah, Leonard Lottar at est 297 00:15:21,280 --> 00:15:24,160 Speaker 1: lottor another unbelievable company, Uh you know said it the 298 00:15:24,240 --> 00:15:26,360 Speaker 1: second mouse off and gets the cheese if you really 299 00:15:26,400 --> 00:15:30,080 Speaker 1: look at uh. Peter Golder, who's a where's a colleague 300 00:15:30,080 --> 00:15:31,760 Speaker 1: at Stern and now as a call as now as 301 00:15:31,760 --> 00:15:34,160 Speaker 1: a colleague at Dartmouth is probably the best scholar under 302 00:15:34,160 --> 00:15:35,640 Speaker 1: the age of fifty on the world of innovation. We 303 00:15:35,640 --> 00:15:38,360 Speaker 1: talked about Clay Christenson. We talk about but but Peter Golder, 304 00:15:38,360 --> 00:15:40,160 Speaker 1: in my opinion, is the kind of future of innovations 305 00:15:40,200 --> 00:15:43,040 Speaker 1: relates to academia, and the body of his study basically says, 306 00:15:43,040 --> 00:15:45,720 Speaker 1: if you talk about return to stakeholders, it's not the 307 00:15:45,760 --> 00:15:48,840 Speaker 1: first mover, it's the second. The true innovator. The guy 308 00:15:48,920 --> 00:15:51,280 Speaker 1: or the gal that goes first usually doesn't serve shareholders 309 00:15:51,280 --> 00:15:53,960 Speaker 1: that well. It's the person that comes in second. Apple. 310 00:15:54,560 --> 00:15:56,600 Speaker 1: Apple has been second at most stuff. They're not a 311 00:15:56,600 --> 00:15:59,200 Speaker 1: true innovator in the definition of the word. They weren't 312 00:15:59,240 --> 00:16:01,880 Speaker 1: the first into into object are in computing, they weren't 313 00:16:01,920 --> 00:16:05,240 Speaker 1: the first MP three player. They weren't the first mobile phone. 314 00:16:05,240 --> 00:16:07,760 Speaker 1: But they look at something, they improve upon it. They wait, 315 00:16:07,800 --> 00:16:09,640 Speaker 1: and they come in and make it more user friendly. 316 00:16:10,160 --> 00:16:12,600 Speaker 1: The department stores, the best retailers have often been the 317 00:16:12,840 --> 00:16:16,560 Speaker 1: second mover. So let's talk a little bit about brand 318 00:16:16,720 --> 00:16:20,160 Speaker 1: versus products. Because you've discussed this, you know what's easy 319 00:16:20,240 --> 00:16:22,600 Speaker 1: to fix a good product with a bad brand, or 320 00:16:22,800 --> 00:16:25,760 Speaker 1: a bad product with a good brand. I think it's changed. 321 00:16:25,800 --> 00:16:28,400 Speaker 1: I think and and I've devoted my life from a 322 00:16:28,440 --> 00:16:30,560 Speaker 1: majority of my professional life around brand. I've made a 323 00:16:30,640 --> 00:16:32,240 Speaker 1: nice living from it. But I think the sun has 324 00:16:32,280 --> 00:16:34,760 Speaker 1: passed midday on what I call the era brand the 325 00:16:34,800 --> 00:16:36,840 Speaker 1: eighties and nineties, the primary way to drive a lot 326 00:16:36,840 --> 00:16:39,240 Speaker 1: of shareholder value, Barry, was to have an average to 327 00:16:39,280 --> 00:16:42,360 Speaker 1: good product and then hire the best talent around brand 328 00:16:42,720 --> 00:16:46,400 Speaker 1: and create unbelievable intangible associations. Are a great brand, an 329 00:16:46,440 --> 00:16:49,680 Speaker 1: average shoe, an average cup of coffee, and the an 330 00:16:49,720 --> 00:16:51,640 Speaker 1: average beer and the best brand in the world. But 331 00:16:51,680 --> 00:16:54,760 Speaker 1: what do all these technological innovations and platforms allow us 332 00:16:54,760 --> 00:16:57,520 Speaker 1: to do? They allow us to share great ideas that 333 00:16:57,680 --> 00:17:00,600 Speaker 1: this show is generally better than other shows. It's going 334 00:17:00,640 --> 00:17:04,080 Speaker 1: to spread faster than anything before. I'm Barry Ridholds. You're 335 00:17:04,119 --> 00:17:07,080 Speaker 1: listening to Masters in Business on Bloomberg Radio. My special 336 00:17:07,119 --> 00:17:09,919 Speaker 1: guest today is Professor Scott Galloway of n y U 337 00:17:10,040 --> 00:17:13,720 Speaker 1: Stern School and L two Digital. Let's talk a little 338 00:17:13,720 --> 00:17:17,240 Speaker 1: bit about Amazon. Um, what is it that they're doing 339 00:17:17,680 --> 00:17:21,879 Speaker 1: wrong with their last mile strategy? So, first off, incredible 340 00:17:21,920 --> 00:17:25,600 Speaker 1: company and uh, Jeff Bezos arguably the best you have 341 00:17:25,640 --> 00:17:27,840 Speaker 1: the last ten years. I think they're two. Primary advantage 342 00:17:27,880 --> 00:17:30,560 Speaker 1: that has cost some tens of billions of dollars to 343 00:17:30,560 --> 00:17:33,240 Speaker 1: to erect have been this last mile, incredible last mile 344 00:17:33,240 --> 00:17:36,240 Speaker 1: infrastructure such that they can supposedly within twenty four months 345 00:17:36,280 --> 00:17:39,399 Speaker 1: at about fifty percent of American households of everything they 346 00:17:39,440 --> 00:17:42,560 Speaker 1: buy within two or four hours, which is incredible. And 347 00:17:42,600 --> 00:17:45,520 Speaker 1: then one click paying. I think we we overlook what 348 00:17:45,560 --> 00:17:48,480 Speaker 1: an incredible innovation is to be able to just touch 349 00:17:48,600 --> 00:17:51,240 Speaker 1: something and know that it's on its way. However, very 350 00:17:51,280 --> 00:17:54,720 Speaker 1: I would argue that some recent innovations erode those competitive advantages, 351 00:17:54,720 --> 00:17:57,200 Speaker 1: specifically Apple Pay. Some of the things Google is doing 352 00:17:57,240 --> 00:18:00,560 Speaker 1: are going to make want that one click payment advantage 353 00:18:00,640 --> 00:18:02,920 Speaker 1: a road in value. I think other people are catching up. 354 00:18:02,960 --> 00:18:06,160 Speaker 1: I think the most unusual or the thing that none 355 00:18:06,200 --> 00:18:08,560 Speaker 1: of us are expecting and and there's still some time 356 00:18:08,600 --> 00:18:10,800 Speaker 1: to see if it plays out, is actually believe Uber 357 00:18:11,000 --> 00:18:14,560 Speaker 1: is gonna give a lot of retailers the opportunity to 358 00:18:14,560 --> 00:18:17,560 Speaker 1: catch up very fast around the last mile without making 359 00:18:17,560 --> 00:18:20,040 Speaker 1: the same staggering investment Amazon has having to make it. 360 00:18:20,040 --> 00:18:24,480 Speaker 1: I think effectively, Uber has created a vascular system for business. 361 00:18:24,520 --> 00:18:27,199 Speaker 1: And when you have someone a smart person inside their 362 00:18:27,240 --> 00:18:29,680 Speaker 1: own car that they have paid for it without a union, 363 00:18:29,720 --> 00:18:32,240 Speaker 1: without without a uniform, and by by the way, I'm 364 00:18:32,240 --> 00:18:34,880 Speaker 1: not sure that's a good thing without health insurance. You're 365 00:18:34,880 --> 00:18:37,560 Speaker 1: effectively giving every retailer and every business in the world 366 00:18:37,600 --> 00:18:41,120 Speaker 1: that last mile competence that cost Amazon billions of dollars 367 00:18:41,320 --> 00:18:44,239 Speaker 1: for a fraction of the cost. So in some I 368 00:18:44,240 --> 00:18:48,359 Speaker 1: think the Amazon advantages, those two advantages are slowly being 369 00:18:48,359 --> 00:18:51,720 Speaker 1: eroded by other innovations. Let's talk a little bit about 370 00:18:51,720 --> 00:18:54,320 Speaker 1: both those things. I don't really see what the big 371 00:18:54,359 --> 00:18:56,520 Speaker 1: deal about one click is. I'll take the other side 372 00:18:56,560 --> 00:19:00,639 Speaker 1: because I've been on Amazon for well almost twenty years, 373 00:19:01,880 --> 00:19:06,840 Speaker 1: I want to say, and when I go to buy 374 00:19:06,920 --> 00:19:10,640 Speaker 1: something and I'm an Amazon Prime member, I kicking and screaming, 375 00:19:10,640 --> 00:19:13,520 Speaker 1: finally did it, and since then just love it the 376 00:19:13,520 --> 00:19:15,920 Speaker 1: past couple of years. So when I buy something, it's 377 00:19:16,160 --> 00:19:18,040 Speaker 1: which credit card am I paying? Is it the office 378 00:19:18,119 --> 00:19:20,280 Speaker 1: is at home? Which of the home cards is it? 379 00:19:20,359 --> 00:19:22,159 Speaker 1: Is it going to the office, is it going to 380 00:19:22,200 --> 00:19:24,560 Speaker 1: the house. Is it going to a third destination? So 381 00:19:24,720 --> 00:19:30,520 Speaker 1: for me, one click really never because I always and 382 00:19:30,640 --> 00:19:33,360 Speaker 1: what's the big deal? I select one of these four 383 00:19:33,400 --> 00:19:36,800 Speaker 1: credit cards, I select one of these four destinations. It's 384 00:19:36,880 --> 00:19:40,000 Speaker 1: it's not terrible. I love the idea of Uber being 385 00:19:40,040 --> 00:19:43,360 Speaker 1: that last mile. But let's think about that. The closest 386 00:19:43,840 --> 00:19:46,560 Speaker 1: Bloomingdale's to my house is. I live all the way 387 00:19:46,520 --> 00:19:48,119 Speaker 1: in the middle of nowhere on the north shore from 388 00:19:48,119 --> 00:19:51,239 Speaker 1: Long Island, but it's still twenty minutes away. If I 389 00:19:51,359 --> 00:19:54,400 Speaker 1: order something from Amazon and with Prime, it's usually there 390 00:19:54,440 --> 00:19:56,600 Speaker 1: within two days. I don't know if they're gonna get 391 00:19:56,640 --> 00:20:00,280 Speaker 1: it there all that much sooner. But I'm hating, you know, 392 00:20:01,000 --> 00:20:02,800 Speaker 1: I need something here? Does it's here in two days? 393 00:20:02,960 --> 00:20:06,040 Speaker 1: There's nothing I need right now that I can't drive 394 00:20:06,240 --> 00:20:09,280 Speaker 1: ten minutes and get so anything I'm watering, I'll get 395 00:20:09,280 --> 00:20:12,160 Speaker 1: here when it gets here. If I want something from 396 00:20:12,160 --> 00:20:15,479 Speaker 1: Bloomingdale's for them to send an Uber driver to my house. 397 00:20:15,880 --> 00:20:17,879 Speaker 1: If I was going to take an Uber ride to 398 00:20:18,000 --> 00:20:22,560 Speaker 1: my house, um, that would cost you know, thirty bucks 399 00:20:22,680 --> 00:20:25,960 Speaker 1: or so. So is there gonna be that much of 400 00:20:26,000 --> 00:20:29,720 Speaker 1: an infrastructure of deliveries that they're not just dropping off 401 00:20:29,720 --> 00:20:32,800 Speaker 1: one package, that dropping off ten things, and it's essentially 402 00:20:32,800 --> 00:20:35,119 Speaker 1: a rounding era to to a store like that. So 403 00:20:35,520 --> 00:20:37,480 Speaker 1: the short answer is no. But I would argue Barry 404 00:20:37,520 --> 00:20:39,800 Speaker 1: that the war of shareholder value isn't gonna be one 405 00:20:39,880 --> 00:20:42,240 Speaker 1: or lost over you. I think you're the anomaly, and 406 00:20:42,240 --> 00:20:44,719 Speaker 1: that I think the majority of shareholder and wealth creation 407 00:20:44,800 --> 00:20:47,879 Speaker 1: is going to be around serving people in urban areas, because, 408 00:20:47,880 --> 00:20:50,639 Speaker 1: to be blunt, that's where the majority of the wealth 409 00:20:51,320 --> 00:20:53,439 Speaker 1: is moving towards. I think we're creating a set of 410 00:20:53,480 --> 00:20:57,119 Speaker 1: supercities where the density of income and disposable income is 411 00:20:57,160 --> 00:21:00,440 Speaker 1: aggregating around a small set of supercity. So I think 412 00:21:00,440 --> 00:21:02,320 Speaker 1: Amazon still works for you. Quite frankly, I don't think 413 00:21:02,320 --> 00:21:04,240 Speaker 1: it works for Amazon. I think it's gonna be expensive 414 00:21:04,240 --> 00:21:06,680 Speaker 1: for them to deliver to you. They're Amazon's shipping costs 415 00:21:06,680 --> 00:21:10,320 Speaker 1: for six billion last year. They're going up a year. 416 00:21:10,359 --> 00:21:13,040 Speaker 1: They took him three billion in fees. That's not sustainable 417 00:21:13,119 --> 00:21:15,920 Speaker 1: even with Amazon's cost cheap cost of capital. You want 418 00:21:15,920 --> 00:21:18,399 Speaker 1: to see a celebrity deathmatch, wait till this holiday is 419 00:21:18,440 --> 00:21:21,719 Speaker 1: as Walmart has announced a prime light competitor at fifty bucks, 420 00:21:22,080 --> 00:21:25,320 Speaker 1: and they have stores. The thing that epitomizes this battle 421 00:21:25,320 --> 00:21:28,000 Speaker 1: in the advantage Walmart right now will have over Amazon. 422 00:21:28,040 --> 00:21:30,640 Speaker 1: As Amazon. Walmart has this great ad that says free 423 00:21:30,640 --> 00:21:33,280 Speaker 1: delivery if you pick it up in store. And do 424 00:21:33,280 --> 00:21:35,480 Speaker 1: you know a percentage of the population lives within a 425 00:21:35,560 --> 00:21:39,480 Speaker 1: drive of Walmart A lot that's not exactly delivery that's 426 00:21:39,520 --> 00:21:41,840 Speaker 1: going to the store and shopping. Yeah, but if if 427 00:21:41,840 --> 00:21:44,080 Speaker 1: it's waiting for you, it's packaged and you can bomb 428 00:21:44,160 --> 00:21:46,520 Speaker 1: right in and bomb right out. My prediction Amazon is 429 00:21:46,560 --> 00:21:49,320 Speaker 1: going to buy a gas station company. As fossil fuel 430 00:21:49,320 --> 00:21:51,119 Speaker 1: has become less relevant in our life, we're used to 431 00:21:51,160 --> 00:21:55,480 Speaker 1: bombing in left and right. Just what's happened in London. 432 00:21:55,520 --> 00:21:58,000 Speaker 1: They took the ticket kios that where people no longer 433 00:21:58,000 --> 00:22:00,399 Speaker 1: sell tickets. People can order their grosser reas it a 434 00:22:00,440 --> 00:22:03,000 Speaker 1: tube station and have them waiting for them at their 435 00:22:03,000 --> 00:22:06,359 Speaker 1: destination tube station. People don't mind picking up stuff. Was 436 00:22:06,400 --> 00:22:09,399 Speaker 1: it a missed opportunity for Amazon not to have grabbed 437 00:22:09,480 --> 00:22:11,879 Speaker 1: radio Shack with their thousands of stores. I think that 438 00:22:11,880 --> 00:22:14,720 Speaker 1: would have been a really interesting combination. But Amazon is 439 00:22:14,800 --> 00:22:18,000 Speaker 1: so smart, they have such such incredible access to capital. 440 00:22:18,080 --> 00:22:19,840 Speaker 1: I think they're going to do something traumatic. I wouldn't 441 00:22:19,840 --> 00:22:21,479 Speaker 1: be surprised if they buy the post office or take 442 00:22:21,520 --> 00:22:24,480 Speaker 1: a major investment in the post office. That's that's a problem. 443 00:22:24,560 --> 00:22:28,119 Speaker 1: Look what's happening. If you see job growth and job declines, 444 00:22:28,240 --> 00:22:29,879 Speaker 1: most of the A lot of the job declines are 445 00:22:29,880 --> 00:22:32,199 Speaker 1: coming out of municipal governments and government employees who are 446 00:22:32,240 --> 00:22:35,639 Speaker 1: under constant pressure. I wouldn't be surprised that Amazon strikes 447 00:22:35,640 --> 00:22:37,120 Speaker 1: to deal with the government to take over their less 448 00:22:37,119 --> 00:22:41,000 Speaker 1: performing post offices. That would be astonishing. I'm Barry ritt Holts. 449 00:22:41,040 --> 00:22:43,560 Speaker 1: You're listening to Master's in Business on Bloomberg Radio. My 450 00:22:43,600 --> 00:22:46,480 Speaker 1: guest today is Scott Galloway. He is a professor of 451 00:22:46,600 --> 00:22:50,479 Speaker 1: Digital marketing and Brands at n y U Stern. I 452 00:22:50,520 --> 00:22:53,080 Speaker 1: really love the video you did talking about the four 453 00:22:53,119 --> 00:22:57,800 Speaker 1: horsemen of technology, and um, we already discussed Amazon. Let's 454 00:22:57,880 --> 00:23:02,280 Speaker 1: jump right into Facebook. You call um first. You note 455 00:23:02,280 --> 00:23:06,119 Speaker 1: how Facebook has changed the taxonomy of relationships, which is 456 00:23:06,240 --> 00:23:09,919 Speaker 1: very significant for the way people interact socially. But the 457 00:23:10,000 --> 00:23:13,520 Speaker 1: question that I the statement I really liked was Facebook 458 00:23:13,600 --> 00:23:16,800 Speaker 1: has pulled off the greatest bait and switch in history. 459 00:23:17,119 --> 00:23:20,000 Speaker 1: Explain what you mean by that? Oh? Absolutely. Facebook convinced 460 00:23:20,080 --> 00:23:21,560 Speaker 1: some of the biggest brands in the world to spend 461 00:23:21,560 --> 00:23:24,720 Speaker 1: tens of millions of dollars to build these communities, uh, 462 00:23:24,760 --> 00:23:27,919 Speaker 1: you know, likes and fans, and these brands did it 463 00:23:28,160 --> 00:23:30,160 Speaker 1: because the notion was you'll get to own this community 464 00:23:30,160 --> 00:23:33,640 Speaker 1: and they'll be captive. What an unbelievable asset. But Facebook 465 00:23:33,640 --> 00:23:35,680 Speaker 1: then said, just kidding, put a walled garden around it 466 00:23:35,680 --> 00:23:38,840 Speaker 1: and in the organic reach on Facebook, meaning the percentage 467 00:23:39,000 --> 00:23:41,280 Speaker 1: of messages that channelle puts out to their community that 468 00:23:41,320 --> 00:23:44,920 Speaker 1: actually reached the channel community is now six percent, meaning 469 00:23:44,960 --> 00:23:49,120 Speaker 1: only one in sixteen messages reached them unless barry, they 470 00:23:49,160 --> 00:23:53,160 Speaker 1: pay and they advertise. So this was an incredible bait 471 00:23:53,200 --> 00:23:55,560 Speaker 1: and switch. These are not These are not communities owned 472 00:23:55,600 --> 00:23:58,560 Speaker 1: by the brands. They're owned by Facebook. Same things happened, 473 00:23:58,560 --> 00:24:00,480 Speaker 1: It gonna happen on Instagram or right now. It's a 474 00:24:01,119 --> 00:24:02,919 Speaker 1: organic reach. They will figure out a way to put 475 00:24:02,960 --> 00:24:05,880 Speaker 1: a paywall around it. But I'm shocked there isn't more. 476 00:24:06,320 --> 00:24:09,400 Speaker 1: If you will outrage, I admire Facebook for being able 477 00:24:09,400 --> 00:24:11,520 Speaker 1: to pull this off, but I think we forget how 478 00:24:11,560 --> 00:24:15,199 Speaker 1: important it is to be liked or cute as an organization. 479 00:24:15,200 --> 00:24:17,640 Speaker 1: Steve Bomber and Bill Gates were not likable or cute, 480 00:24:17,800 --> 00:24:20,520 Speaker 1: Sir again, Larry more likable, more cute. But the regulators 481 00:24:20,520 --> 00:24:24,440 Speaker 1: are getting angry at them. Facebook lean in the hoodie. 482 00:24:24,840 --> 00:24:27,600 Speaker 1: They have gotten a ton of license from Corporate America 483 00:24:27,720 --> 00:24:30,159 Speaker 1: and regulators. In my view, that has given them a 484 00:24:30,280 --> 00:24:32,560 Speaker 1: lot of leeway. I think what they've done has been 485 00:24:32,640 --> 00:24:35,120 Speaker 1: exceptional in terms of their ability to say one thing 486 00:24:35,200 --> 00:24:37,399 Speaker 1: and then do another for the for the benefit of 487 00:24:37,400 --> 00:24:39,480 Speaker 1: their own shareholders. And by the way, I say that 488 00:24:39,560 --> 00:24:42,200 Speaker 1: as an as an admirer, what they've done has been incredible. 489 00:24:42,480 --> 00:24:45,440 Speaker 1: And yet there's been issues about privacy and issues about 490 00:24:45,440 --> 00:24:47,840 Speaker 1: people's data. How does that? How do they as a 491 00:24:47,880 --> 00:24:50,000 Speaker 1: company deal with that or do they just shrug it 492 00:24:50,000 --> 00:24:52,360 Speaker 1: off and say, hey, man, get used to it. Privacy 493 00:24:52,400 --> 00:24:54,840 Speaker 1: is a thing of the past. Anyone who's talking about 494 00:24:54,840 --> 00:24:58,040 Speaker 1: privacy is typically someone like you or me, a guy 495 00:24:58,200 --> 00:25:00,480 Speaker 1: over the age of fifty. Young people don't seem that 496 00:25:00,520 --> 00:25:02,480 Speaker 1: concerned with privacy. At the end of the day, the 497 00:25:02,480 --> 00:25:05,159 Speaker 1: consumer behavior indicates one thing that people like to have 498 00:25:05,200 --> 00:25:07,560 Speaker 1: their privacy violated as long as there's a coupon or 499 00:25:07,600 --> 00:25:10,760 Speaker 1: more relevant offering. At the end of it, we want relevance, 500 00:25:10,800 --> 00:25:13,119 Speaker 1: and part of that relevance is observing our data stream 501 00:25:13,240 --> 00:25:16,760 Speaker 1: and then and then responding with a more relevant offer. Now, 502 00:25:17,119 --> 00:25:20,360 Speaker 1: the identity war is the secret war taking place online 503 00:25:20,400 --> 00:25:22,440 Speaker 1: and Facebook is winning, and that is the ability to 504 00:25:22,520 --> 00:25:25,879 Speaker 1: attach a specific identity with specific actions that you can 505 00:25:25,880 --> 00:25:28,840 Speaker 1: serve more relevant ads and charge more for those relevant ads. 506 00:25:29,119 --> 00:25:33,320 Speaker 1: Google cannot track specific identity on their core platform, the 507 00:25:33,359 --> 00:25:36,040 Speaker 1: search engine, and it makes sense. Neither you nor I 508 00:25:36,160 --> 00:25:38,199 Speaker 1: are comfortable with the idea of having our name and 509 00:25:38,240 --> 00:25:40,560 Speaker 1: our picture above a list of everything we have typed 510 00:25:40,600 --> 00:25:43,160 Speaker 1: into that query box. Right, all of us have typed 511 00:25:43,200 --> 00:25:45,280 Speaker 1: some crazy stuff into that box we would rather people 512 00:25:45,280 --> 00:25:47,359 Speaker 1: not know about. However, we're not as that's what the 513 00:25:47,480 --> 00:25:51,280 Speaker 1: incognito window. Yeah, that's where you're you know you you 514 00:25:51,080 --> 00:25:54,800 Speaker 1: you you erase your cookies. But with Facebook, for some reason, 515 00:25:54,840 --> 00:25:58,240 Speaker 1: we're not as uncomfortable with Facebook attaching our actions to 516 00:25:58,280 --> 00:26:01,720 Speaker 1: our specific identity on Facebook. So as a result, Facebook 517 00:26:01,760 --> 00:26:05,119 Speaker 1: is now tracking more identity data than Google and is 518 00:26:05,160 --> 00:26:08,679 Speaker 1: able to use their platform across the wider reb web 519 00:26:08,720 --> 00:26:12,439 Speaker 1: to serve more relevant targeted ads. Facebook is winning the 520 00:26:12,520 --> 00:26:15,280 Speaker 1: identity war now. I find I'll give you a perfect 521 00:26:15,320 --> 00:26:18,680 Speaker 1: example of something online that I find creepy and I 522 00:26:18,720 --> 00:26:21,560 Speaker 1: don't know if other people find the same thing. So 523 00:26:21,840 --> 00:26:25,840 Speaker 1: my wife and I were literally in a um florist 524 00:26:25,960 --> 00:26:31,000 Speaker 1: nursery um recently, and we see this hanging chair, beautiful 525 00:26:31,040 --> 00:26:34,560 Speaker 1: hanging chair. It's got cushions, it's really really odd, interesting 526 00:26:34,600 --> 00:26:39,040 Speaker 1: shape and scene price, and I just make note who 527 00:26:39,080 --> 00:26:42,119 Speaker 1: makes it? Necessarily let me look at it online? Where 528 00:26:42,160 --> 00:26:45,080 Speaker 1: it's a third cheaper and so okay. So now I 529 00:26:45,119 --> 00:26:46,879 Speaker 1: just want to get a sense of what the markup was. 530 00:26:46,920 --> 00:26:48,960 Speaker 1: I know with this more or less should go for 531 00:26:49,040 --> 00:26:52,600 Speaker 1: and I forget about it. Now wherever I go ads 532 00:26:52,640 --> 00:26:54,840 Speaker 1: for that chair of popping up and it's like, no, no, 533 00:26:55,080 --> 00:26:58,280 Speaker 1: I'm done with that. I'm moving on. Why are you 534 00:26:58,359 --> 00:27:02,040 Speaker 1: following me around the Internetive it gets annoying. It's contextual retargeting. 535 00:27:02,040 --> 00:27:03,880 Speaker 1: If you go to an Audie site, you're gonna start 536 00:27:03,880 --> 00:27:06,200 Speaker 1: getting served ads by Alexis and Mercedes because it looks 537 00:27:06,200 --> 00:27:07,960 Speaker 1: as if you're in the market for a car. Most 538 00:27:07,960 --> 00:27:10,840 Speaker 1: consumers actually like it. Most consumers rather have a relevant 539 00:27:10,840 --> 00:27:13,400 Speaker 1: ad on the right rail or their top. That's exactly 540 00:27:13,440 --> 00:27:18,000 Speaker 1: where most people. Most people actually like that. Embrace it. 541 00:27:18,080 --> 00:27:20,000 Speaker 1: The thing you talked about. The The other point is 542 00:27:20,520 --> 00:27:22,400 Speaker 1: show rooming. That is going in and trying to find 543 00:27:22,440 --> 00:27:24,480 Speaker 1: a different price. And there's been a lot of popular 544 00:27:24,520 --> 00:27:26,960 Speaker 1: press that this is bad for retailers. The majority of 545 00:27:26,960 --> 00:27:28,840 Speaker 1: the research shows when people pull out their phone and 546 00:27:28,880 --> 00:27:31,240 Speaker 1: price compare, they not only end up buying, they often 547 00:27:31,320 --> 00:27:33,879 Speaker 1: end up buying more because typically what they find, except 548 00:27:33,920 --> 00:27:36,200 Speaker 1: for the retailer you were in, they typically find they're 549 00:27:36,200 --> 00:27:38,560 Speaker 1: getting it around the best price for a good price, 550 00:27:38,600 --> 00:27:41,600 Speaker 1: and then they start reading news reviews, finding more products. Actually, 551 00:27:41,920 --> 00:27:44,919 Speaker 1: web rooming, being in a store and using your phone 552 00:27:45,080 --> 00:27:48,520 Speaker 1: is a creative to the host retailer. Really, that's fascinating. 553 00:27:48,720 --> 00:27:50,520 Speaker 1: I know that at one point in time best Buy 554 00:27:50,680 --> 00:27:53,440 Speaker 1: was a little discouraging them. Yeah, I think they've since 555 00:27:53,520 --> 00:27:56,360 Speaker 1: changed their tune. They have and only look at best Buy. 556 00:27:56,440 --> 00:27:58,840 Speaker 1: That's a great example of the war of how stores 557 00:27:58,840 --> 00:28:01,000 Speaker 1: are new black. If you order a flat screen TV, 558 00:28:01,680 --> 00:28:03,919 Speaker 1: it's gonna be it's gonna get to you faster if 559 00:28:03,920 --> 00:28:05,760 Speaker 1: you order from best Buy, because they're going to fulfill 560 00:28:05,760 --> 00:28:07,439 Speaker 1: it out of their store in East Hampton or some 561 00:28:07,600 --> 00:28:10,240 Speaker 1: some some store out there. Then Amazon will get it 562 00:28:10,280 --> 00:28:13,560 Speaker 1: to you because they're using these unbelievably robust, flexible warehouses 563 00:28:13,600 --> 00:28:16,080 Speaker 1: called stores. That that's amazing. So now let's talk a 564 00:28:16,119 --> 00:28:19,320 Speaker 1: little bit about Google, and I love you quote about Google. 565 00:28:19,680 --> 00:28:22,320 Speaker 1: It's the closest thing to God. You ask a question 566 00:28:22,320 --> 00:28:26,360 Speaker 1: and you get an answer. So how is Google losing 567 00:28:26,800 --> 00:28:30,359 Speaker 1: if we consider them God like? Sure? So when I 568 00:28:30,400 --> 00:28:32,800 Speaker 1: say God, you know, when what do you do? When 569 00:28:32,840 --> 00:28:35,040 Speaker 1: you pray? You send up information or a question hoping 570 00:28:35,080 --> 00:28:37,000 Speaker 1: that a higher source that's smarter than you will send 571 00:28:37,040 --> 00:28:39,000 Speaker 1: it back an answer. Right, is my kid going to 572 00:28:39,080 --> 00:28:42,640 Speaker 1: be Okay? Now you go onto Google and say symptoms 573 00:28:42,640 --> 00:28:44,680 Speaker 1: and treatment of croup, right, and it gives you back 574 00:28:44,680 --> 00:28:47,280 Speaker 1: what's going on? So I think it is somewhat godlike. Now, 575 00:28:47,680 --> 00:28:50,440 Speaker 1: having said that, I think that Google is going to 576 00:28:50,520 --> 00:28:53,160 Speaker 1: decline in value and influence. Why because there are one 577 00:28:53,200 --> 00:28:57,040 Speaker 1: dimensional company that hasn't had any success branching out much 578 00:28:57,080 --> 00:29:01,640 Speaker 1: beyond Android or Gmail nine percent of the revenues of 579 00:29:01,640 --> 00:29:04,680 Speaker 1: the profit from the search platform. Also, at the end 580 00:29:04,680 --> 00:29:06,400 Speaker 1: of the day, Bury the way it summarized it is 581 00:29:06,440 --> 00:29:09,240 Speaker 1: that this rapid change to a mobile world is not 582 00:29:09,440 --> 00:29:12,600 Speaker 1: good for Google. On a mobile phone, of our time 583 00:29:12,640 --> 00:29:15,440 Speaker 1: done in app, were less likely to search when we're 584 00:29:15,440 --> 00:29:17,800 Speaker 1: in app, which is not good for Google. A lot 585 00:29:17,840 --> 00:29:20,160 Speaker 1: of competitors popping up a billion queries a day on 586 00:29:20,200 --> 00:29:23,760 Speaker 1: Facebook of all products, searches now start on Amazon. So 587 00:29:23,840 --> 00:29:27,760 Speaker 1: that's so there were dominant, their dominant market share starting 588 00:29:27,800 --> 00:29:30,200 Speaker 1: to show some signs of weakness and cost per click 589 00:29:30,320 --> 00:29:32,680 Speaker 1: is going down and as a result, profits and revenues 590 00:29:33,120 --> 00:29:36,560 Speaker 1: have their profit and revenue growth. If you will have 591 00:29:36,560 --> 00:29:40,440 Speaker 1: have stalled, this is a one dimensional company, an unbelievable 592 00:29:40,440 --> 00:29:43,240 Speaker 1: revolutionary product. But I think my prediction is you're gonna 593 00:29:43,240 --> 00:29:45,520 Speaker 1: see a couple more minute earnings misses, and all of 594 00:29:45,560 --> 00:29:47,560 Speaker 1: a sudden, that company is going to find focus again. 595 00:29:47,800 --> 00:29:51,160 Speaker 1: The self driving cars, the broadband blimps, the wearables are 596 00:29:51,160 --> 00:29:54,080 Speaker 1: going to go away. What about this new app cold Now, 597 00:29:54,360 --> 00:29:56,800 Speaker 1: I don't know how familiar are with that that essentially 598 00:29:56,880 --> 00:30:00,560 Speaker 1: hovers over the whole operating system, and even within apps 599 00:30:01,200 --> 00:30:04,640 Speaker 1: brings up that exact sort of search behavior you would 600 00:30:04,640 --> 00:30:09,120 Speaker 1: discuss them. So you could never count Google out. They're 601 00:30:09,160 --> 00:30:13,280 Speaker 1: just they human capital, the people, the culture, just a 602 00:30:13,360 --> 00:30:16,680 Speaker 1: remarkably innovative company. But based on where they are now 603 00:30:16,720 --> 00:30:19,000 Speaker 1: relative their valuation in the marketplace, I think they have 604 00:30:19,080 --> 00:30:23,000 Speaker 1: some substantial competitive threats. And the thing about Google versus 605 00:30:23,000 --> 00:30:26,320 Speaker 1: an Apple or a traditional retailer is your one click 606 00:30:26,360 --> 00:30:28,960 Speaker 1: away from going to a competitor. So I think Google, 607 00:30:28,960 --> 00:30:32,360 Speaker 1: on a risk adjusted basis, has greater risk than some 608 00:30:32,400 --> 00:30:34,000 Speaker 1: of the other guys. And I think they're gonna leak 609 00:30:34,040 --> 00:30:36,640 Speaker 1: market share to Facebook. We didn't talk about YouTube everybody. 610 00:30:36,760 --> 00:30:39,200 Speaker 1: I just circled that question. Everybody talks about our YouTube 611 00:30:39,240 --> 00:30:41,680 Speaker 1: is gonna disrupt TV. I think Facebook is going to 612 00:30:41,760 --> 00:30:44,000 Speaker 1: disrupt YouTube for the first time ever. There are now 613 00:30:44,040 --> 00:30:47,200 Speaker 1: more native videos uploaded to the Facebook platform than links 614 00:30:47,200 --> 00:30:49,760 Speaker 1: to YouTube. I think you're gonna see Facebook start to 615 00:30:49,800 --> 00:30:52,200 Speaker 1: garner more and more share of our time in terms 616 00:30:52,240 --> 00:30:54,280 Speaker 1: of how how we watch video. I think it's moving 617 00:30:54,280 --> 00:30:58,320 Speaker 1: to Facebook. That's interesting since since you mentioned Apple as 618 00:30:58,360 --> 00:31:01,440 Speaker 1: the fourth enforceman, let stalk a little bit about Apple, 619 00:31:01,800 --> 00:31:04,600 Speaker 1: which you call a luxury brand, not so much a 620 00:31:04,600 --> 00:31:07,440 Speaker 1: technology dent. It's been the worst, it's been the worst 621 00:31:07,880 --> 00:31:09,719 Speaker 1: or the best house in the worst neighborhood for a 622 00:31:09,720 --> 00:31:12,360 Speaker 1: long time. And that's a tech hardware. That's just a 623 00:31:12,360 --> 00:31:15,160 Speaker 1: bad business, low margin. And they decided very Dell. Who 624 00:31:15,200 --> 00:31:17,520 Speaker 1: else is in that space. I was on the board 625 00:31:17,520 --> 00:31:21,200 Speaker 1: of Gateway Computer. I mean, it's just a difficult Our margins. 626 00:31:21,200 --> 00:31:23,880 Speaker 1: Our margins of Gateway were six percent. Try and operate 627 00:31:23,880 --> 00:31:26,600 Speaker 1: a business on six percent margins. It's just computer hardware. 628 00:31:26,600 --> 00:31:29,520 Speaker 1: It's just really difficult. They have effectively moved down the tour. 629 00:31:29,640 --> 00:31:32,480 Speaker 1: So we only do three things in business. We very 630 00:31:32,520 --> 00:31:36,760 Speaker 1: we appeal to the brain, rational decisions, low margin, transportation, food, 631 00:31:36,760 --> 00:31:39,520 Speaker 1: basic shelter. We appeal to the heart choosing moms choose 632 00:31:39,560 --> 00:31:41,960 Speaker 1: Jeff P. And G figured out that we're social animals. 633 00:31:42,160 --> 00:31:45,080 Speaker 1: The biggest predictor of life expectancy is how many people 634 00:31:45,120 --> 00:31:46,880 Speaker 1: in our life we love. It's not how fat or 635 00:31:46,880 --> 00:31:48,880 Speaker 1: how skinn you are. We how much we smoke. You take. 636 00:31:49,240 --> 00:31:51,320 Speaker 1: If you're new a new mother, you're gonna live. If 637 00:31:51,320 --> 00:31:53,640 Speaker 1: you're taking care of your parents, you're more likely to live. 638 00:31:53,920 --> 00:31:56,200 Speaker 1: P ANDNG figured that out post Worttle or two and said, 639 00:31:56,400 --> 00:31:59,360 Speaker 1: if you wash your kids in clothes and tied detergent, 640 00:31:59,400 --> 00:32:02,160 Speaker 1: you love them more. We have a need to love, 641 00:32:02,320 --> 00:32:05,080 Speaker 1: and and CpG firms tapped into that and then just 642 00:32:05,240 --> 00:32:06,520 Speaker 1: move down to the tour. So you go to the 643 00:32:06,560 --> 00:32:09,000 Speaker 1: second most powerful instinct in the world, and that's reproduction, 644 00:32:09,080 --> 00:32:12,640 Speaker 1: the self expressive benefit. The watch I'm wearing costs eight 645 00:32:12,720 --> 00:32:14,960 Speaker 1: hundred bucks. I paid a lot more to wear it 646 00:32:15,000 --> 00:32:17,880 Speaker 1: because I'm trying, in a vain attempt to intimate Italian 647 00:32:17,920 --> 00:32:19,560 Speaker 1: masculinity to the rest of the world, and on a 648 00:32:19,760 --> 00:32:22,160 Speaker 1: very base level, and I don't like to admit this. 649 00:32:22,520 --> 00:32:24,880 Speaker 1: I think I'm trying to signal to the opposite sex 650 00:32:24,880 --> 00:32:26,480 Speaker 1: that if you mate with me, your kids are more 651 00:32:26,520 --> 00:32:28,600 Speaker 1: likely to survive than if you mate with someone who's 652 00:32:28,640 --> 00:32:30,560 Speaker 1: wearing a Swatch watch, and I don't think in the 653 00:32:30,600 --> 00:32:33,360 Speaker 1: business world we're very honest or open about how strong 654 00:32:33,440 --> 00:32:36,560 Speaker 1: self expressive benefit is. Tesla is not an environmental car, 655 00:32:36,600 --> 00:32:38,600 Speaker 1: as an attempt to signal to the opposite sex. And 656 00:32:38,640 --> 00:32:42,760 Speaker 1: you can afford a hundred dollar car. Women were ergonomically 657 00:32:42,760 --> 00:32:45,440 Speaker 1: impossible six d dollar shoes because they're trying to solicit 658 00:32:45,440 --> 00:32:48,160 Speaker 1: inbound offers from those same men. I realize how base 659 00:32:48,160 --> 00:32:50,719 Speaker 1: and how awful that sounds, but it's the core of evolution, 660 00:32:51,080 --> 00:32:53,840 Speaker 1: and it's what has driven the best sector in the world. 661 00:32:53,920 --> 00:32:58,160 Speaker 1: Barry the luxury sector, Eschmont, larger market Captain, Deutsche Telecom 662 00:32:58,360 --> 00:33:01,840 Speaker 1: Este Lot or larger market capped w p P. Apple 663 00:33:01,960 --> 00:33:04,920 Speaker 1: is decided we want to be in that business, and 664 00:33:04,960 --> 00:33:07,000 Speaker 1: they have. They are the only company in history that 665 00:33:07,080 --> 00:33:12,080 Speaker 1: is successfully migrated down the torso a better computer, rational decisions, 666 00:33:12,080 --> 00:33:15,080 Speaker 1: saying to our heart emotionally with songs, and now they 667 00:33:15,080 --> 00:33:18,240 Speaker 1: are the ultimate self expressive benefit. You no longer signal 668 00:33:18,280 --> 00:33:21,000 Speaker 1: with your watch or your hoodie. You signal with your iOS. 669 00:33:21,120 --> 00:33:23,040 Speaker 1: If you own an Apple phone, you were saying to 670 00:33:23,080 --> 00:33:25,480 Speaker 1: the world, I am smarter, better educated, and have more 671 00:33:25,480 --> 00:33:28,160 Speaker 1: options in terms of who I mate with. The transaction 672 00:33:28,200 --> 00:33:30,880 Speaker 1: is complete to the Apple Watch. Apple is now the 673 00:33:31,000 --> 00:33:33,480 Speaker 1: ultimate luxury brand. It defines what it means to be 674 00:33:33,520 --> 00:33:34,960 Speaker 1: a luxury brand, and they're going to be the first 675 00:33:35,000 --> 00:33:37,920 Speaker 1: trillion dollar market cap company on the back of their 676 00:33:37,920 --> 00:33:42,200 Speaker 1: successful transition down the Torso and it become a luxury brand. Scott, 677 00:33:42,200 --> 00:33:44,600 Speaker 1: where can people find your work? What's the best way 678 00:33:44,600 --> 00:33:47,960 Speaker 1: for them? I know you have a YouTube channel for 679 00:33:48,200 --> 00:33:50,520 Speaker 1: L two. How do people find that? Other than thanks? 680 00:33:50,600 --> 00:33:53,240 Speaker 1: Plunching in Scott Galloway into YouTube. Thanks for asking L 681 00:33:53,280 --> 00:33:55,760 Speaker 1: two Inc dot com. Almost all our videos are there, 682 00:33:55,760 --> 00:33:58,440 Speaker 1: all right? That's great? And um be sure and check 683 00:33:58,480 --> 00:34:01,400 Speaker 1: out my daily column. I'm on Bloomberg View dot com. 684 00:34:01,720 --> 00:34:04,320 Speaker 1: Follow me on Twitter at rid Holt Scott. Your Twitter 685 00:34:04,400 --> 00:34:09,320 Speaker 1: handle is proft Galloway proft Galloway at Twitter. I'm Barry Ridhult. 686 00:34:09,360 --> 00:34:13,680 Speaker 1: You're listening to Masters in Business. I'm Bloomberg Radio. Welcome 687 00:34:13,719 --> 00:34:16,319 Speaker 1: to the podcast portion of our show where I take 688 00:34:16,400 --> 00:34:19,560 Speaker 1: my ear piece out and don't worry about time. Although 689 00:34:19,560 --> 00:34:22,399 Speaker 1: I'm getting better at kind of pacing that I used 690 00:34:22,400 --> 00:34:24,720 Speaker 1: to be so awful with that, you have no idea 691 00:34:24,800 --> 00:34:28,600 Speaker 1: how thinking about how much time do we have? It's 692 00:34:28,600 --> 00:34:32,320 Speaker 1: really a distraction and a and a disruption. So anyway, Scott, 693 00:34:32,320 --> 00:34:35,399 Speaker 1: thank you so much for doing this. I'm really I've 694 00:34:35,480 --> 00:34:39,000 Speaker 1: I've fallen in love with your videos. My wife is 695 00:34:39,000 --> 00:34:41,080 Speaker 1: a teacher and there's one thing I wanted to ask 696 00:34:41,120 --> 00:34:43,600 Speaker 1: you about. So I first I showed her some of 697 00:34:43,600 --> 00:34:45,719 Speaker 1: your video. She really she was like, Oh, that's kind 698 00:34:45,719 --> 00:34:49,719 Speaker 1: of interesting, like passing interest in her husband's life. But 699 00:34:49,840 --> 00:34:53,759 Speaker 1: then the letter, the email from the students, and she's like, 700 00:34:53,800 --> 00:34:56,600 Speaker 1: who is this guy? This is awesome. She's a teacher 701 00:34:56,680 --> 00:34:59,080 Speaker 1: and she has all sorts of headaches with kids like 702 00:34:59,520 --> 00:35:04,360 Speaker 1: everybody else does. Um tell us the derivation of the 703 00:35:04,480 --> 00:35:08,040 Speaker 1: get your s Together letter, which we can't curse over 704 00:35:08,040 --> 00:35:11,719 Speaker 1: the air waves. Um, how did that come about? You 705 00:35:11,800 --> 00:35:14,879 Speaker 1: just never know when you're fifteen minutes are gonna gonna hit. 706 00:35:15,080 --> 00:35:16,759 Speaker 1: And this was an email I got from a student 707 00:35:16,800 --> 00:35:18,919 Speaker 1: who walked into my class late, and then I kicked 708 00:35:19,000 --> 00:35:22,600 Speaker 1: him out of class. I kicked as per your class. 709 00:35:23,320 --> 00:35:25,640 Speaker 1: Also thing in general and gradgety school with coddle students 710 00:35:25,640 --> 00:35:28,160 Speaker 1: too much. And as a clinical professor, are you know 711 00:35:28,200 --> 00:35:30,560 Speaker 1: our mission is to try and prepare kids for the workforce, 712 00:35:30,600 --> 00:35:31,920 Speaker 1: and I think part of that is giving them a 713 00:35:31,960 --> 00:35:34,040 Speaker 1: sense of what the workforce is actually gonna be like 714 00:35:34,480 --> 00:35:36,880 Speaker 1: and trying to impost some standards on them. And one 715 00:35:36,920 --> 00:35:38,239 Speaker 1: of those is if you're late to my class, I 716 00:35:38,239 --> 00:35:40,319 Speaker 1: don't allow you in. And I didn't have late. Can 717 00:35:40,360 --> 00:35:42,359 Speaker 1: you show up two minutes late, five minutes or either 718 00:35:42,480 --> 00:35:44,479 Speaker 1: on time or you're not allowed in. It's hard, hard 719 00:35:44,520 --> 00:35:47,560 Speaker 1: military stuff. I have a theater seating for the kids 720 00:35:47,560 --> 00:35:49,879 Speaker 1: who work part time because I realized sometimes I can't 721 00:35:49,880 --> 00:35:52,120 Speaker 1: get downtown of time. At six fifteen, we let people 722 00:35:52,120 --> 00:35:56,160 Speaker 1: in for a theater seating, meaning meaning outskirts of the class. Yeah, 723 00:35:56,280 --> 00:35:59,080 Speaker 1: I know. At exactly six fifteen, we let in latecomers 724 00:35:59,200 --> 00:36:02,360 Speaker 1: for the part time Okay, after the first after the 725 00:36:02,400 --> 00:36:04,560 Speaker 1: first part of the first act, but this kid came in. 726 00:36:04,600 --> 00:36:06,440 Speaker 1: I kicked him out, and then he wrote a long, 727 00:36:06,480 --> 00:36:08,680 Speaker 1: snarky email to me about how we checked out three 728 00:36:08,680 --> 00:36:11,920 Speaker 1: other classes. Anyways, I got equally snarky back, and then 729 00:36:11,960 --> 00:36:14,680 Speaker 1: it got forwarded, and then Within and then dead Spin, 730 00:36:14,760 --> 00:36:16,799 Speaker 1: the sports blogging places picked it up. But it got 731 00:36:16,800 --> 00:36:18,360 Speaker 1: about half a million beaus, and at one point I 732 00:36:18,360 --> 00:36:20,040 Speaker 1: think the dean of the school was getting an email 733 00:36:20,120 --> 00:36:22,960 Speaker 1: either wildly in favor or wildly against what I had 734 00:36:22,960 --> 00:36:25,640 Speaker 1: done about every seven or eight seconds when it just 735 00:36:25,719 --> 00:36:27,959 Speaker 1: kind of blew up and it tapped into a vein 736 00:36:28,000 --> 00:36:30,640 Speaker 1: because one a lot of people feel as if, Okay, 737 00:36:30,640 --> 00:36:33,520 Speaker 1: this millennial generation is entitled, and we're very supportive of 738 00:36:33,560 --> 00:36:35,600 Speaker 1: my response. At the same time, a lot of people 739 00:36:35,600 --> 00:36:38,080 Speaker 1: were said, look, these kids are paying six thousand bucks 740 00:36:38,080 --> 00:36:40,200 Speaker 1: to take your class. If they show up a few 741 00:36:40,200 --> 00:36:42,560 Speaker 1: minutes late, you just need to suck it up and 742 00:36:42,600 --> 00:36:45,560 Speaker 1: deal with it. So it, like anything that goes viral, 743 00:36:45,640 --> 00:36:48,239 Speaker 1: I think it tapped into a bit of a controversy 744 00:36:48,239 --> 00:36:50,279 Speaker 1: of the time. It was about five or six years ago, 745 00:36:50,320 --> 00:36:52,160 Speaker 1: and every two years it gets fired up again. But 746 00:36:52,239 --> 00:36:54,560 Speaker 1: that that is not what I had hoped or expected. 747 00:36:55,160 --> 00:36:57,800 Speaker 1: What you know is the piece of literary work that 748 00:36:57,840 --> 00:37:00,759 Speaker 1: I would be known for. Well, you know, the generation 749 00:37:01,040 --> 00:37:04,160 Speaker 1: and the offspring of the baby boomers, who you and 750 00:37:04,200 --> 00:37:06,200 Speaker 1: I are really just on the other edge of that 751 00:37:06,280 --> 00:37:09,440 Speaker 1: where would be TwixT and between Gen X and and boomers. 752 00:37:09,960 --> 00:37:13,440 Speaker 1: But um, you know, they get participation awards for showing up, 753 00:37:13,480 --> 00:37:16,640 Speaker 1: and I think my wife tells me that they come 754 00:37:16,719 --> 00:37:20,680 Speaker 1: to school with that attitude, Hey I'm here, where's my trophy? No, 755 00:37:20,719 --> 00:37:23,520 Speaker 1: you gotta do something to earn a trophy. It's it's 756 00:37:23,520 --> 00:37:26,279 Speaker 1: a double edged sword. So about eighty people at LT 757 00:37:26,480 --> 00:37:28,439 Speaker 1: right now, I'd say the average ages around twenty six. 758 00:37:28,440 --> 00:37:30,640 Speaker 1: So work a lot with millennials. And the downside is 759 00:37:30,640 --> 00:37:32,719 Speaker 1: they are more entitled. Remember when we went to work, 760 00:37:32,760 --> 00:37:34,400 Speaker 1: If you can you imagine whyking your boss or your 761 00:37:34,400 --> 00:37:36,000 Speaker 1: first job and so I want to have a career talk. 762 00:37:36,440 --> 00:37:38,319 Speaker 1: I mean they would have said, okay, work your work, 763 00:37:38,360 --> 00:37:40,359 Speaker 1: your ass off, career talk over and get back to work. 764 00:37:40,480 --> 00:37:45,160 Speaker 1: And now these kids are very focused on their lifestyle balance, 765 00:37:45,280 --> 00:37:47,440 Speaker 1: things that we just wouldn't have had the guts to 766 00:37:47,480 --> 00:37:50,960 Speaker 1: bring up, having said, at least not till ten twenty years, 767 00:37:51,120 --> 00:37:55,440 Speaker 1: until we had some currency, tho, some divorces, something something right, 768 00:37:55,600 --> 00:37:58,759 Speaker 1: all of those things. But the flip side is there's 769 00:37:58,800 --> 00:38:00,880 Speaker 1: a lot of media tention on the net millennials, but 770 00:38:00,920 --> 00:38:02,920 Speaker 1: the reality is the more talented than you and I 771 00:38:02,960 --> 00:38:05,719 Speaker 1: were at the village. Oh yeah, the tools they've grown 772 00:38:05,800 --> 00:38:08,799 Speaker 1: up with, the skills they have garnered, just some of 773 00:38:08,800 --> 00:38:10,920 Speaker 1: these kids are exceptional. We wouldn't put up with this 774 00:38:11,000 --> 00:38:14,439 Speaker 1: otherwise these kids would have trouble getting job. The reason 775 00:38:14,480 --> 00:38:16,640 Speaker 1: they're can demand more of a balance in their life, 776 00:38:16,640 --> 00:38:19,120 Speaker 1: the reason they can demand more talks around their career. 777 00:38:19,520 --> 00:38:22,040 Speaker 1: The reason they can demand, uh, you know, wanting to 778 00:38:22,040 --> 00:38:24,360 Speaker 1: know what is the larger role that their job plays 779 00:38:24,400 --> 00:38:27,000 Speaker 1: in the world is because a lot of these kids 780 00:38:27,080 --> 00:38:30,600 Speaker 1: are outstanding that some of the some of the skills 781 00:38:30,680 --> 00:38:34,160 Speaker 1: they bring, the our ability to pull together information. Uh, 782 00:38:34,760 --> 00:38:37,640 Speaker 1: you can't force maturity, So that's still the same, you know. 783 00:38:37,840 --> 00:38:41,879 Speaker 1: But millennials are the most talented generation I have ever 784 00:38:41,880 --> 00:38:45,759 Speaker 1: worked with. Hands down. It's going to be it's gonna 785 00:38:45,760 --> 00:38:47,799 Speaker 1: be inspiring to see what they're able to build over 786 00:38:47,800 --> 00:38:49,760 Speaker 1: the next ten or fifteen years. You know. The debate 787 00:38:49,920 --> 00:38:54,000 Speaker 1: that that has been circulating about technology and robotics and 788 00:38:54,000 --> 00:38:57,640 Speaker 1: what it's costing in terms of jobs. I speak at 789 00:38:57,640 --> 00:38:59,360 Speaker 1: a lot of schools, I give a lot of speeches 790 00:38:59,400 --> 00:39:01,600 Speaker 1: around and one of things I'll never forget We went 791 00:39:01,640 --> 00:39:05,000 Speaker 1: to a wedding of my wife's cousin in Virginia and 792 00:39:05,040 --> 00:39:08,640 Speaker 1: we meet not only so I know the groom who 793 00:39:08,760 --> 00:39:11,200 Speaker 1: from he's this toll to now he's getting married, and 794 00:39:11,239 --> 00:39:14,239 Speaker 1: we meet some of his friends and the groomsmen. One 795 00:39:14,239 --> 00:39:18,760 Speaker 1: of the groomsmen created this perfect for college and Apple 796 00:39:19,080 --> 00:39:23,319 Speaker 1: iPhone case, the dumbest thing in the world. He has 797 00:39:23,320 --> 00:39:25,560 Speaker 1: built into the back of it a bottle opener, so 798 00:39:25,600 --> 00:39:28,600 Speaker 1: you could pop a beer you always have, right, Like 799 00:39:28,719 --> 00:39:31,400 Speaker 1: so obvious, And I'm like, oh, that's interesting. How are 800 00:39:31,400 --> 00:39:33,640 Speaker 1: you gonna manufacture this? He's like, oh, we have a 801 00:39:33,640 --> 00:39:35,600 Speaker 1: company in China. They drop ship. It was sound about 802 00:39:35,640 --> 00:39:39,640 Speaker 1: forty units a month. There's a kid who's twenty in college, Like, 803 00:39:40,600 --> 00:39:43,160 Speaker 1: and every time I go to a conference with young 804 00:39:43,239 --> 00:39:49,080 Speaker 1: kids with college students, that's sort of insane experience. They 805 00:39:49,160 --> 00:39:53,040 Speaker 1: understand forget roy and loyalty, forget company loyalty. The company 806 00:39:53,040 --> 00:39:55,240 Speaker 1: ain't gonna be loyal to you. They have no loyalty 807 00:39:55,280 --> 00:40:00,919 Speaker 1: back and they know that they're essentially um their independence. 808 00:40:00,960 --> 00:40:04,640 Speaker 1: They're they're you know, contract players, and they're aware of it. Yeah, 809 00:40:04,719 --> 00:40:07,000 Speaker 1: it's we we get We get angry at them because 810 00:40:07,040 --> 00:40:09,080 Speaker 1: most of us now are in principal positions where we 811 00:40:09,120 --> 00:40:12,400 Speaker 1: want to talk about loyalty because it serves our advantage. 812 00:40:12,920 --> 00:40:14,319 Speaker 1: But at the end of the day, I wonder if 813 00:40:14,360 --> 00:40:16,759 Speaker 1: they've figured it out. And you've talked about this, your 814 00:40:16,760 --> 00:40:18,879 Speaker 1: blogged the Big Picture, and we've talked about this a lot. 815 00:40:19,200 --> 00:40:21,480 Speaker 1: There are a lot of well publicized cases of these 816 00:40:21,560 --> 00:40:24,200 Speaker 1: kids who can tap into global markets and have extreme 817 00:40:24,719 --> 00:40:28,799 Speaker 1: wealth or success really quickly. There's a dark side of that, though, 818 00:40:28,840 --> 00:40:30,719 Speaker 1: and that is I think it's getting harder and harder 819 00:40:30,760 --> 00:40:33,160 Speaker 1: for these kids just to be solid citizens. Say they're 820 00:40:33,160 --> 00:40:35,440 Speaker 1: not geniuses, say they don't get lucky. I think it's 821 00:40:35,440 --> 00:40:38,040 Speaker 1: getting harder and harder just to punch out an average living. 822 00:40:38,200 --> 00:40:40,560 Speaker 1: And and you know, it gets into income inequality. And 823 00:40:40,960 --> 00:40:42,600 Speaker 1: I like a lot of the work that you've done 824 00:40:42,640 --> 00:40:44,200 Speaker 1: on this, and a lot of the work that your 825 00:40:44,239 --> 00:40:46,719 Speaker 1: past guest, Henry Blodge has done on this, but I 826 00:40:46,800 --> 00:40:49,480 Speaker 1: would when I look at my class versus fourteen years ago, 827 00:40:49,480 --> 00:40:51,440 Speaker 1: I got a hundred forty kids on every Monday night. 828 00:40:51,560 --> 00:40:53,320 Speaker 1: I think it's never been easier to be a billionaire. 829 00:40:53,360 --> 00:40:54,960 Speaker 1: I think someone in my class will be a billionaire 830 00:40:55,040 --> 00:40:57,920 Speaker 1: either through alternative investments, are starting a tech company. At 831 00:40:57,960 --> 00:40:59,759 Speaker 1: the same time, it's never been harder to be a 832 00:40:59,760 --> 00:41:01,200 Speaker 1: mill in there. And what I mean is to be 833 00:41:01,400 --> 00:41:03,960 Speaker 1: aggregate a million dollars, just be a middle class guy 834 00:41:04,000 --> 00:41:06,279 Speaker 1: or gal that aggregates some semblance of a living over 835 00:41:06,280 --> 00:41:09,560 Speaker 1: ten or twenty thirty years. The top, the most talented 836 00:41:09,600 --> 00:41:11,680 Speaker 1: people are going to aggregate wealth faster and in the 837 00:41:11,760 --> 00:41:14,680 Speaker 1: velocity we've never seen before. But the rest it's going 838 00:41:14,719 --> 00:41:16,560 Speaker 1: to be harder and harder just to be a solid 839 00:41:16,600 --> 00:41:19,120 Speaker 1: citizen when you when you look at the state of 840 00:41:19,120 --> 00:41:21,880 Speaker 1: the recovery as to what's been going on. You know, 841 00:41:22,080 --> 00:41:24,520 Speaker 1: I love the William Gibson quote the future is here. 842 00:41:24,520 --> 00:41:27,799 Speaker 1: It's just not evenly distributed. The same is true for 843 00:41:27,840 --> 00:41:30,880 Speaker 1: the recovery. And it depends on what industry you're in, 844 00:41:31,000 --> 00:41:34,080 Speaker 1: where you live in the country. You mentioned superurban centers, 845 00:41:34,400 --> 00:41:37,319 Speaker 1: so we travel around the country and visit clients. D 846 00:41:37,400 --> 00:41:40,120 Speaker 1: C is a house of fire. You go to Boston 847 00:41:40,600 --> 00:41:44,160 Speaker 1: and that's in New York. Obviously that's this ghast. Seattle 848 00:41:44,600 --> 00:41:47,080 Speaker 1: people tell me the recovery is terrible. Have you been 849 00:41:47,120 --> 00:41:50,799 Speaker 1: to Seattle? Seattle? Austin is a little smaller. I think 850 00:41:50,800 --> 00:41:53,560 Speaker 1: Austin is the fastest growing city in the country, but 851 00:41:53,680 --> 00:41:55,719 Speaker 1: Seattle is number two, and it's a big city with 852 00:41:55,800 --> 00:41:59,799 Speaker 1: a lot of industry and a lot of track. It's 853 00:42:00,000 --> 00:42:04,560 Speaker 1: most amazing. They're still actually fairly reasonable, at least compared 854 00:42:04,600 --> 00:42:08,640 Speaker 1: to San Francisco and Silicon Valley and and NAPA. That 855 00:42:08,640 --> 00:42:11,399 Speaker 1: that whole run of an hour north and an hour 856 00:42:11,520 --> 00:42:15,280 Speaker 1: south of the city of San Francisco is utterly insane, 857 00:42:15,320 --> 00:42:17,960 Speaker 1: it's lost its mind. We're creating a small a small 858 00:42:18,040 --> 00:42:21,360 Speaker 1: number of elysium like environments where the life is just 859 00:42:21,440 --> 00:42:24,080 Speaker 1: incredible there if you can afford access in the opportunities, 860 00:42:24,120 --> 00:42:26,760 Speaker 1: but most people can't afford it. In Europe it's London, 861 00:42:27,200 --> 00:42:29,879 Speaker 1: you can't. It's London in the seven Dwarves. If you're 862 00:42:29,880 --> 00:42:34,480 Speaker 1: an unbelievable systems application developers, saying Baconi Italy er in Marinello, 863 00:42:34,560 --> 00:42:36,319 Speaker 1: you end up in Milam within twelve months, and you're 864 00:42:36,320 --> 00:42:39,719 Speaker 1: in London within thirty six months. There is Look at 865 00:42:39,719 --> 00:42:41,360 Speaker 1: how and you've talked a lot about this. You know, 866 00:42:41,400 --> 00:42:45,239 Speaker 1: the top top one percent aggregating, but this isn't a 867 00:42:45,280 --> 00:42:51,160 Speaker 1: one percent thing. This is really like of the professionals technology, 868 00:42:51,640 --> 00:42:55,920 Speaker 1: there's a whole separate that the middle class has really 869 00:42:56,200 --> 00:43:00,440 Speaker 1: shrunk and the top one person. What's so differ today 870 00:43:00,480 --> 00:43:03,840 Speaker 1: is the top one percent, in the top one percent 871 00:43:04,360 --> 00:43:08,399 Speaker 1: are so far ahead of anything we've seen previously. If 872 00:43:08,440 --> 00:43:11,319 Speaker 1: you if you hold that aside, put put aside the 873 00:43:11,360 --> 00:43:15,840 Speaker 1: g fives and the hundred million dollar properties, just normal 874 00:43:16,120 --> 00:43:22,160 Speaker 1: insane wealth, hundred millionaires, that sort of top one percent, 875 00:43:22,280 --> 00:43:27,000 Speaker 1: top ten percent, top this recovery. I actually left out. 876 00:43:27,080 --> 00:43:30,560 Speaker 1: The most significant factor if you have a graduate degree, 877 00:43:30,640 --> 00:43:34,800 Speaker 1: if you have a any specific technical skill and degree 878 00:43:34,840 --> 00:43:39,399 Speaker 1: that goes with it. This recovery has been very, very tropic, right, 879 00:43:39,600 --> 00:43:42,400 Speaker 1: really good if you come out of college with an 880 00:43:42,400 --> 00:43:45,399 Speaker 1: English literature degree and you don't have a skill set 881 00:43:45,440 --> 00:43:48,560 Speaker 1: that you can take to one of those urban supercenters, 882 00:43:48,600 --> 00:43:51,399 Speaker 1: this has been a really terrible recovery. We were talking 883 00:43:51,400 --> 00:43:54,840 Speaker 1: about Facebook. Look at the innovative companies of the past. 884 00:43:54,880 --> 00:43:57,239 Speaker 1: You know, a Leaver a hundred and fifty billion dollar 885 00:43:57,280 --> 00:43:59,480 Speaker 1: market cap, has about a hundred and twenty five thousand 886 00:43:59,560 --> 00:44:03,239 Speaker 1: family being supported by Unilever, Intel more efficient, about a 887 00:44:03,320 --> 00:44:05,799 Speaker 1: hundred thousand people. A hundred fifty billion dollar market cap. 888 00:44:05,960 --> 00:44:10,520 Speaker 1: Facebook two billion dollar market cap, nine thousand people. That's amazing. 889 00:44:10,680 --> 00:44:14,200 Speaker 1: So you have more and more spoils going to fewer 890 00:44:14,239 --> 00:44:16,560 Speaker 1: and fewer people. And Facebook is a good company. It's 891 00:44:16,560 --> 00:44:18,480 Speaker 1: great if you're on the Ferrari dealership and pala Alto. 892 00:44:18,520 --> 00:44:20,360 Speaker 1: It's great if you own real estate in San Francisco. 893 00:44:20,440 --> 00:44:23,960 Speaker 1: It's great if you're serving the ecosystem of Facebook. But 894 00:44:24,000 --> 00:44:27,280 Speaker 1: I think these companies have so dramatically outpaced wealth creation. 895 00:44:27,320 --> 00:44:30,600 Speaker 1: These companies, the four horsemen, Apple, Amazon, Facebook and Google 896 00:44:30,640 --> 00:44:34,640 Speaker 1: have the population of Lexington, Kentucky or Corpus Christi, Corpus Christie, 897 00:44:34,800 --> 00:44:37,759 Speaker 1: and they have the GDP right the value of the 898 00:44:37,800 --> 00:44:41,560 Speaker 1: GDP of Spain or Australia. When you talk about and 899 00:44:41,640 --> 00:44:46,840 Speaker 1: they've effectively, I think, legislatively and and operationally done to 900 00:44:46,920 --> 00:44:49,319 Speaker 1: the US with the South canow militarily, I think they're 901 00:44:49,360 --> 00:44:52,640 Speaker 1: seceding from the nation barrier. They're ultimate, they're incredible tax avoiders. 902 00:44:52,640 --> 00:44:55,560 Speaker 1: It's all legal, but they're licensing their IP overseas and 903 00:44:55,600 --> 00:44:58,160 Speaker 1: avoiding taxes. They're telling women will pay for them to 904 00:44:58,200 --> 00:45:00,279 Speaker 1: freeze their eggs. They're telling people that they'll do better 905 00:45:00,360 --> 00:45:03,359 Speaker 1: DNA testing. They're giving them their own municipal transportation back 906 00:45:03,360 --> 00:45:06,120 Speaker 1: and forth and work. They've effectively succeeded from the nation. 907 00:45:06,120 --> 00:45:08,640 Speaker 1: They've said, we're smarter, we're better, we can create more wealth. 908 00:45:08,880 --> 00:45:11,560 Speaker 1: We're going to create a society outside of the normal 909 00:45:11,600 --> 00:45:14,600 Speaker 1: boundaries of the of the sovereign in the US, and 910 00:45:14,600 --> 00:45:16,359 Speaker 1: we're gonna operate in the Netherlands. I think they were 911 00:45:16,360 --> 00:45:19,040 Speaker 1: effectively seceding from the US and well, when we look 912 00:45:19,080 --> 00:45:22,440 Speaker 1: at Google as example, in San Francisco, a lot of 913 00:45:22,480 --> 00:45:25,520 Speaker 1: the complaints about the Google bus. You would think, who 914 00:45:25,560 --> 00:45:27,399 Speaker 1: cares they have a bus? Is that much more room 915 00:45:27,480 --> 00:45:30,840 Speaker 1: on on public transportation? But that's not the attitude in 916 00:45:30,840 --> 00:45:34,200 Speaker 1: San Francisco, is it. It's you have a lot of frustration. 917 00:45:34,239 --> 00:45:36,120 Speaker 1: I think a lot of the civil unrest has taken 918 00:45:36,160 --> 00:45:39,200 Speaker 1: place is a lot about the individual acts of violence, 919 00:45:39,239 --> 00:45:42,360 Speaker 1: but it's about frustration that there's just if you're in 920 00:45:42,400 --> 00:45:45,439 Speaker 1: this uber class, you have the right skills, the right 921 00:45:45,440 --> 00:45:48,879 Speaker 1: work ethic, it's never been a better time. But if 922 00:45:48,920 --> 00:45:53,200 Speaker 1: you're the ninety eighty percent below that, it's just harder 923 00:45:53,239 --> 00:45:55,720 Speaker 1: and harder to be at the average Joe. The heirs 924 00:45:55,719 --> 00:45:57,680 Speaker 1: to the Walmart portion the wall in the airs were 925 00:45:57,680 --> 00:46:02,160 Speaker 1: probably very decent. People have more wealth in the of America. 926 00:46:02,239 --> 00:46:04,120 Speaker 1: If there's gonna be a revolution in this country, it's 927 00:46:04,120 --> 00:46:06,879 Speaker 1: probably gonna start an aisle five of the Walmart. I mean, 928 00:46:06,880 --> 00:46:10,279 Speaker 1: it's just that if you have the right skills, it's 929 00:46:10,400 --> 00:46:13,480 Speaker 1: never been a better time. But that that quote unquote 930 00:46:13,520 --> 00:46:16,600 Speaker 1: population of people the right skills is getting smaller and smaller, 931 00:46:16,640 --> 00:46:19,319 Speaker 1: and more and more fruits have have act created to 932 00:46:19,320 --> 00:46:22,120 Speaker 1: those people. The good slash bad news is whenever this 933 00:46:22,200 --> 00:46:24,319 Speaker 1: has happened in history, it usually self corrects in the 934 00:46:24,360 --> 00:46:27,960 Speaker 1: form of war, revolution, or famine. That's the self correction. 935 00:46:27,960 --> 00:46:30,839 Speaker 1: Well that's not very encouraged. That isn't encouraging. So and 936 00:46:30,880 --> 00:46:33,359 Speaker 1: the funny thing is, you know, post War War two, 937 00:46:34,239 --> 00:46:37,520 Speaker 1: you could raise a family on a job as a 938 00:46:37,680 --> 00:46:42,000 Speaker 1: postman or a fireman, or or even a teacher or Hey, 939 00:46:42,040 --> 00:46:44,440 Speaker 1: if you were an accountant or a lawyer, you were 940 00:46:44,440 --> 00:46:47,520 Speaker 1: in the uppercross. You were doing really well. Now that 941 00:46:47,600 --> 00:46:52,799 Speaker 1: whole um low skilled jobs have have slid to the 942 00:46:52,800 --> 00:46:55,120 Speaker 1: bottom of the middle class and what used to be 943 00:46:55,160 --> 00:46:58,839 Speaker 1: considered high skilled jobs lawyers are accountants. Maybe accountants are 944 00:46:58,840 --> 00:47:00,560 Speaker 1: doing better in the lawyers. I think we cranked out 945 00:47:00,560 --> 00:47:04,279 Speaker 1: too many lawyers so sometime ago. But it seems like 946 00:47:04,360 --> 00:47:08,239 Speaker 1: the alignment and the strata has really changed. And it 947 00:47:08,280 --> 00:47:10,960 Speaker 1: comes back to the educational attainment. If you have the 948 00:47:11,040 --> 00:47:15,160 Speaker 1: right degree, in the right focus, the right the right sector. Hey, 949 00:47:15,200 --> 00:47:18,280 Speaker 1: these are great times. Everybody else is having having a challenge, 950 00:47:18,360 --> 00:47:20,880 Speaker 1: But those fruits were increasingly only being able to be 951 00:47:20,920 --> 00:47:23,520 Speaker 1: picked by people who were either exceptional or come from 952 00:47:23,520 --> 00:47:27,040 Speaker 1: wealthy families. The bottom death style of households eight percent 953 00:47:27,040 --> 00:47:28,920 Speaker 1: of the kids will go to college, the top decile 954 00:47:29,040 --> 00:47:31,200 Speaker 1: eight percent. And this is This is a real point 955 00:47:31,200 --> 00:47:32,920 Speaker 1: of personal passion for me. I was raised by a 956 00:47:32,960 --> 00:47:35,040 Speaker 1: single mother who lived and died a secretary. We didn't 957 00:47:35,040 --> 00:47:36,959 Speaker 1: have a lot of money, but we had a nice 958 00:47:37,000 --> 00:47:38,920 Speaker 1: life and I was able to go to public schools 959 00:47:38,920 --> 00:47:42,120 Speaker 1: all the way through undergrad US graduate school at Berkeley. 960 00:47:42,320 --> 00:47:45,360 Speaker 1: You know, if I didn't have the big handed government 961 00:47:45,600 --> 00:47:48,960 Speaker 1: and in very generous forward looking visionaries in the form 962 00:47:49,000 --> 00:47:51,319 Speaker 1: of the founders of the University of California, I just 963 00:47:51,320 --> 00:47:53,719 Speaker 1: wouldn't be here with you right now. That's the bottom line. 964 00:47:53,840 --> 00:47:56,920 Speaker 1: And those that same access. You know what my tuition 965 00:47:56,960 --> 00:47:59,440 Speaker 1: was UCLA in Berkeley was twelve hundred bucks a year. 966 00:48:00,040 --> 00:48:02,520 Speaker 1: And I'll beat you at I went to sunny stony Brook. 967 00:48:02,840 --> 00:48:05,080 Speaker 1: You know. The joke was the Berkeley is the stony 968 00:48:05,080 --> 00:48:08,160 Speaker 1: Brook of the West, and my tuition was four fIF semester. 969 00:48:08,280 --> 00:48:10,200 Speaker 1: And look and look at what it is now. It 970 00:48:10,320 --> 00:48:13,080 Speaker 1: is a it is a lot more and kids are 971 00:48:13,080 --> 00:48:15,960 Speaker 1: taking on student debt, more student debt than than than 972 00:48:16,040 --> 00:48:18,839 Speaker 1: credit cards. It's it's hurting the housing crisis. It's giving 973 00:48:18,880 --> 00:48:22,080 Speaker 1: them a huge, a huge head wind before they get out. 974 00:48:22,120 --> 00:48:24,600 Speaker 1: And I'm worried that, you know, kids just aren't going 975 00:48:24,640 --> 00:48:28,760 Speaker 1: to have the same unbelievable opportunities that I had, because 976 00:48:29,120 --> 00:48:31,880 Speaker 1: it doesn't seem as if the bottom of education is 977 00:48:31,880 --> 00:48:35,000 Speaker 1: the lubricant of upward mobility. My class and I this 978 00:48:35,080 --> 00:48:36,879 Speaker 1: is a man in the mirror test barrier. We charge 979 00:48:36,960 --> 00:48:39,239 Speaker 1: kids six thousand dollars to take my class. Have a 980 00:48:39,280 --> 00:48:42,239 Speaker 1: hundred twenty kids or hundred forty kids on a Monday night, 981 00:48:42,239 --> 00:48:44,960 Speaker 1: every time I walk into class. We're charging kids sixty 982 00:48:45,120 --> 00:48:48,400 Speaker 1: thousand dollars that night for one class, and the majority 983 00:48:48,440 --> 00:48:51,960 Speaker 1: of it is being paid for in debt. Something is 984 00:48:52,080 --> 00:48:54,800 Speaker 1: wrong here. We have to figure out a way and 985 00:48:54,840 --> 00:48:57,120 Speaker 1: now I'm really on my soapbox. We have to figure 986 00:48:57,120 --> 00:48:59,720 Speaker 1: out a way to give middle class kids with single 987 00:48:59,760 --> 00:49:02,000 Speaker 1: mother is the same opportunity to be in this chair. 988 00:49:02,160 --> 00:49:05,120 Speaker 1: And you know, I U in public about this. I 989 00:49:05,160 --> 00:49:07,960 Speaker 1: gave ten percent of my holdings in in my company 990 00:49:08,000 --> 00:49:11,279 Speaker 1: to the University of California, Berkeley, Los Angeles and n 991 00:49:11,360 --> 00:49:13,960 Speaker 1: y U because they've been so incredibly supportive. But I 992 00:49:14,120 --> 00:49:17,720 Speaker 1: really worry that our economy is under a huge threat 993 00:49:17,840 --> 00:49:20,200 Speaker 1: that the same number of people aren't gonna have access 994 00:49:20,239 --> 00:49:22,960 Speaker 1: to the unbelievable education that you and I had at 995 00:49:22,960 --> 00:49:25,200 Speaker 1: the same price, and the amazing thing is a lot 996 00:49:25,239 --> 00:49:28,960 Speaker 1: of these schools have enormous endowments. And it's not just 997 00:49:29,040 --> 00:49:32,399 Speaker 1: the I vys. You look at Harvard, Gale, Stanford. That's 998 00:49:32,440 --> 00:49:35,480 Speaker 1: a hundred billion dollars in endowment just amongst those three. 999 00:49:35,719 --> 00:49:39,359 Speaker 1: That's astonishing. So if they do nothing else, they're throwing 1000 00:49:39,400 --> 00:49:42,319 Speaker 1: off somewhere between five and ten billion dollars a year 1001 00:49:42,480 --> 00:49:46,560 Speaker 1: in revenue. That's insane, and how do they manage to 1002 00:49:46,640 --> 00:49:49,280 Speaker 1: charge But the same thing is happening there, So winner 1003 00:49:49,320 --> 00:49:51,920 Speaker 1: take all economy. It's the same things happening in education. 1004 00:49:51,960 --> 00:49:53,839 Speaker 1: And used the operative term there was a hundred billion 1005 00:49:53,840 --> 00:49:57,640 Speaker 1: dollar endowments and three schools. The schools the top five 1006 00:49:57,719 --> 00:50:00,200 Speaker 1: or seven endowments are growing at a much fast rate 1007 00:50:00,200 --> 00:50:02,960 Speaker 1: than everybody else. In education, we're ripe to be disrupted. 1008 00:50:03,000 --> 00:50:06,200 Speaker 1: We've tripled our tuition in the last fifteen years. Inflation 1009 00:50:06,280 --> 00:50:07,719 Speaker 1: is kind of two or three percent yere. We are 1010 00:50:07,800 --> 00:50:10,000 Speaker 1: so ripe to be disrupted. So people are looking for 1011 00:50:10,040 --> 00:50:11,600 Speaker 1: a tech player to disrupt us. You know it's going 1012 00:50:11,680 --> 00:50:15,879 Speaker 1: to disrupt education. Harvard, Harvard and m I T did 1013 00:50:15,920 --> 00:50:19,480 Speaker 1: the open open course uh the years. It's the same 1014 00:50:19,520 --> 00:50:23,160 Speaker 1: effect that's taking place across the economy. The top, the top, 1015 00:50:23,200 --> 00:50:26,480 Speaker 1: top guys are gonna create more power than anyone has. 1016 00:50:26,520 --> 00:50:28,959 Speaker 1: Harvarder said they could double their incoming freshman class without 1017 00:50:28,960 --> 00:50:32,279 Speaker 1: sacrificing inequality. They're gonna take some of that endowment. They're 1018 00:50:32,280 --> 00:50:35,160 Speaker 1: gonna say, take some technology, and I'm predicting they're gonna 1019 00:50:35,160 --> 00:50:38,080 Speaker 1: say Harvard, m I T, Stanford, and Berkeley. At some point, 1020 00:50:38,120 --> 00:50:40,120 Speaker 1: the top schools are gonna say here's here's the deal, 1021 00:50:40,520 --> 00:50:43,960 Speaker 1: free and we're gonna triple quadruple, quintuple. And then what 1022 00:50:44,000 --> 00:50:47,520 Speaker 1: does Indiana do? What does what does Fordham do? What 1023 00:50:47,640 --> 00:50:49,960 Speaker 1: does the university in Miami do? What do they do 1024 00:50:50,480 --> 00:50:53,000 Speaker 1: when the best ten or twenty percent of the population 1025 00:50:53,040 --> 00:50:56,200 Speaker 1: has access to the best schools for free and every 1026 00:50:56,239 --> 00:50:59,200 Speaker 1: every company worth its salt only recruits at those few schools. 1027 00:50:59,360 --> 00:51:03,200 Speaker 1: So how does Harvard, with this much physical space triple 1028 00:51:03,280 --> 00:51:07,200 Speaker 1: they're entering freshman classes it online only or people literally? 1029 00:51:07,239 --> 00:51:09,680 Speaker 1: Are they tripling the number of students in Cambridge? I 1030 00:51:09,719 --> 00:51:11,480 Speaker 1: think it's going to be a hybrid. I think they're 1031 00:51:11,480 --> 00:51:13,000 Speaker 1: going to be able to double the size of their 1032 00:51:13,000 --> 00:51:15,000 Speaker 1: class in the next five years and triple it over 1033 00:51:15,040 --> 00:51:17,720 Speaker 1: the next ten to twenty years because they'll make people 1034 00:51:17,719 --> 00:51:20,279 Speaker 1: more efficient. Let them take a lot of their lectures. Right. 1035 00:51:20,320 --> 00:51:22,759 Speaker 1: We talked about a flip classroom that actual teaching takes 1036 00:51:22,760 --> 00:51:26,000 Speaker 1: place online and we come together to discuss. Every university, 1037 00:51:26,040 --> 00:51:29,640 Speaker 1: including ours, is now building satellite campuses for all to 1038 00:51:29,640 --> 00:51:32,160 Speaker 1: talk about online. We just opened a campus and now Abudhabi. 1039 00:51:32,200 --> 00:51:35,880 Speaker 1: We opened a campus in Shanghai. Wharton's opening in Singapore, 1040 00:51:36,000 --> 00:51:38,719 Speaker 1: so we're opening all over the world. But it's like 1041 00:51:38,840 --> 00:51:41,560 Speaker 1: every other category. Where there used to be fifty players 1042 00:51:41,600 --> 00:51:43,840 Speaker 1: eating out a good living, there's gonna be two or 1043 00:51:43,880 --> 00:51:48,920 Speaker 1: three capturing of the profits. Unbelievable. That's interesting. Let's talk 1044 00:51:48,960 --> 00:51:53,240 Speaker 1: about some other sectors of the economy. Um, that that's 1045 00:51:53,360 --> 00:51:59,200 Speaker 1: right for disruption. Um. And I know we mentioned television earlier. Um, 1046 00:51:59,480 --> 00:52:02,680 Speaker 1: do you watch a Silicon Valley on HP love such 1047 00:52:02,719 --> 00:52:07,800 Speaker 1: a hilarious it's just it's just, you know, Mike Judge 1048 00:52:08,480 --> 00:52:11,640 Speaker 1: has done some interesting odd bowl stuff in the past. 1049 00:52:12,080 --> 00:52:14,360 Speaker 1: This seems to be the first thing I'm trying to remember. 1050 00:52:14,400 --> 00:52:17,520 Speaker 1: The future the name of the future show where everybody 1051 00:52:17,800 --> 00:52:21,080 Speaker 1: the movie he did, uh Idiocracy was a name of 1052 00:52:21,080 --> 00:52:23,480 Speaker 1: where everybody's just a blob sitting around TV wat sitting 1053 00:52:23,480 --> 00:52:26,400 Speaker 1: around a couch watching TV. And it was really sophomoric 1054 00:52:26,440 --> 00:52:29,120 Speaker 1: and goofy, And when I first saw the previews for this, 1055 00:52:29,200 --> 00:52:31,840 Speaker 1: I'm thinking, Hey, is this guy grown up enough that 1056 00:52:31,920 --> 00:52:34,400 Speaker 1: this is really going to be a serious and he 1057 00:52:34,480 --> 00:52:38,239 Speaker 1: seems to be has the tone perfect. I mean, it's 1058 00:52:38,280 --> 00:52:42,120 Speaker 1: just every time I speak to anybody on the venture side, 1059 00:52:42,120 --> 00:52:47,080 Speaker 1: on the private equity, totally totally dead on. And it's 1060 00:52:47,080 --> 00:52:49,080 Speaker 1: amazing to think that there's a whole part of the 1061 00:52:49,120 --> 00:52:52,200 Speaker 1: country where, for a hundred miles up the coast, that's 1062 00:52:52,440 --> 00:52:55,640 Speaker 1: half of what's going on. Yeah, it's just I mean, 1063 00:52:55,640 --> 00:52:59,440 Speaker 1: obviously it's an exaggeration, but I love Barely. Though it's barely, 1064 00:52:59,480 --> 00:53:02,960 Speaker 1: it's everything's good and root and reality. It's an exaggeration, 1065 00:53:03,000 --> 00:53:05,840 Speaker 1: but it's not like a gross parity. It's a slight exaggeration. 1066 00:53:06,040 --> 00:53:08,600 Speaker 1: You see some crazy stuff. But the the other show 1067 00:53:08,760 --> 00:53:10,800 Speaker 1: I always love to watch. I love Silicon Valley and 1068 00:53:10,840 --> 00:53:12,520 Speaker 1: I watched Girls, and I love Silicon Valley because I 1069 00:53:12,560 --> 00:53:14,960 Speaker 1: can relate to it so much, and I love Girls 1070 00:53:14,960 --> 00:53:17,280 Speaker 1: because I can't relate to it anyway. And I'm constantly 1071 00:53:17,520 --> 00:53:19,239 Speaker 1: is this what young people are really like? And I 1072 00:53:19,239 --> 00:53:22,279 Speaker 1: find it so fascinating because I don't know if you've 1073 00:53:22,280 --> 00:53:25,200 Speaker 1: ever watched Girls, but I've tried desperately and I just can't. 1074 00:53:25,560 --> 00:53:28,560 Speaker 1: It's it's literally wow, is this what kids are like? 1075 00:53:28,640 --> 00:53:30,480 Speaker 1: And the honest answers? I think it is, and so 1076 00:53:30,520 --> 00:53:34,080 Speaker 1: it's fascinating. It's almost like being a Vorior but Silicon Valley. 1077 00:53:34,480 --> 00:53:36,839 Speaker 1: You know. It really shows how some of the sausages made. 1078 00:53:36,880 --> 00:53:40,239 Speaker 1: And there's a series of well publicized entrepreneurs. But what 1079 00:53:40,360 --> 00:53:43,600 Speaker 1: people don't do is they don't realize we have a 1080 00:53:43,600 --> 00:53:46,319 Speaker 1: tendency to romanticize entrepreneurship. Kids come to me because I'm 1081 00:53:46,320 --> 00:53:48,040 Speaker 1: an entrepreneur and say I want to start a business, 1082 00:53:48,080 --> 00:53:50,120 Speaker 1: And I would say, if you have the skill set 1083 00:53:50,560 --> 00:53:53,440 Speaker 1: to go to a platform like a Bloomberg, like a Facebook, 1084 00:53:53,480 --> 00:53:56,759 Speaker 1: like a Google and navigate the politics there, be be 1085 00:53:56,920 --> 00:53:59,880 Speaker 1: effective as opposed to just being right. Something I've struggled 1086 00:53:59,920 --> 00:54:01,759 Speaker 1: with my whole career is a difference between being right 1087 00:54:01,800 --> 00:54:04,759 Speaker 1: and being effective than on a risk adjusted basis, you're 1088 00:54:04,760 --> 00:54:07,680 Speaker 1: better off going to work for a platform. Entrepreneurs are 1089 00:54:07,680 --> 00:54:09,440 Speaker 1: people who have no choice. It's like some being a 1090 00:54:09,440 --> 00:54:11,520 Speaker 1: doctor is a terrible job now, but some people have 1091 00:54:11,560 --> 00:54:13,359 Speaker 1: no choice. They just have to be doctors. Right. They 1092 00:54:13,400 --> 00:54:15,840 Speaker 1: were taking temperature since the age of six some people 1093 00:54:15,920 --> 00:54:18,520 Speaker 1: have to be in fashion. Entrepreneurship is the same way. 1094 00:54:18,560 --> 00:54:23,560 Speaker 1: And I think that show gets across just how difficult, scary, insecure, 1095 00:54:24,120 --> 00:54:27,759 Speaker 1: and sometimes you could kill yourself for seven or eight 1096 00:54:27,840 --> 00:54:29,560 Speaker 1: years or ten years or longer and end up with 1097 00:54:29,680 --> 00:54:32,400 Speaker 1: not only nothing, but less than nothing, you know, oh 1098 00:54:32,480 --> 00:54:36,359 Speaker 1: in your parents, your family, everything. And we don't talk 1099 00:54:36,400 --> 00:54:39,799 Speaker 1: a lot about that, but it happens more than it 1100 00:54:39,880 --> 00:54:43,120 Speaker 1: doesn't happen. Well, that's the reality is that the vast 1101 00:54:43,200 --> 00:54:46,640 Speaker 1: majority of startups, the vast majority of of new restaurants, 1102 00:54:46,640 --> 00:54:49,680 Speaker 1: of new retail stores from new businesses, hey, two years out, 1103 00:54:49,880 --> 00:54:52,640 Speaker 1: most of them are gone. That's just the simple numbers 1104 00:54:52,680 --> 00:54:56,399 Speaker 1: of it. And I'm glad the show isn't glorifying. Hey, 1105 00:54:56,760 --> 00:54:59,040 Speaker 1: hang out a shingle and and everybody get I p 1106 00:54:59,160 --> 00:55:01,359 Speaker 1: O s at a billion dollars ours. They're really making 1107 00:55:01,400 --> 00:55:04,279 Speaker 1: it clear that you could lose this company with one 1108 00:55:04,280 --> 00:55:08,400 Speaker 1: wrong decision anywhere along the way. They the litigation was 1109 00:55:08,480 --> 00:55:12,280 Speaker 1: really an insightful plot device, because you know that happens 1110 00:55:12,320 --> 00:55:14,680 Speaker 1: all the time. Yeah, and just the kind of full 1111 00:55:14,800 --> 00:55:17,440 Speaker 1: full body contact hardball that takes place. I worked with 1112 00:55:17,480 --> 00:55:20,160 Speaker 1: a lot of vcs who are very some are outstanding. 1113 00:55:20,239 --> 00:55:23,080 Speaker 1: Some are super aggressive to some of the stuff you see. 1114 00:55:23,080 --> 00:55:26,440 Speaker 1: It was really really rapacious. It's a it's a it's 1115 00:55:26,480 --> 00:55:28,960 Speaker 1: a full body contact sport in terms of a startup, 1116 00:55:29,000 --> 00:55:32,239 Speaker 1: specially a venture back startup. So so they there's one 1117 00:55:32,280 --> 00:55:36,440 Speaker 1: episode where they're doing their second round and suddenly they 1118 00:55:36,480 --> 00:55:40,800 Speaker 1: start getting they become more obnoxious to the vcs thinking 1119 00:55:41,080 --> 00:55:43,560 Speaker 1: making it look like they already have funded and everybody 1120 00:55:43,560 --> 00:55:46,480 Speaker 1: starts throwing money at them, and that leads to an 1121 00:55:46,520 --> 00:55:49,600 Speaker 1: interesting plot point, but it raises a question, what do 1122 00:55:49,640 --> 00:55:53,400 Speaker 1: you think about the valuations amongst startup these days? Is 1123 00:55:53,400 --> 00:55:56,239 Speaker 1: that something you look at? And here we are in 1124 00:55:56,320 --> 00:55:59,560 Speaker 1: the market where people have been talking about valuations being 1125 00:55:59,600 --> 00:56:03,200 Speaker 1: too it for two years and the market just well, 1126 00:56:03,400 --> 00:56:06,800 Speaker 1: the economists called the dot com crash perfectly. They just 1127 00:56:06,840 --> 00:56:10,920 Speaker 1: called and I'm on the board of several startups, and 1128 00:56:10,960 --> 00:56:13,480 Speaker 1: what I'm telling them is raise raise money right now. 1129 00:56:13,680 --> 00:56:15,400 Speaker 1: But you can't. Yeah, I don't know if it's I 1130 00:56:15,400 --> 00:56:17,880 Speaker 1: don't know if this is the best time to raise money, 1131 00:56:17,880 --> 00:56:20,360 Speaker 1: but I am pretty confident it's not a bad time. 1132 00:56:20,520 --> 00:56:23,160 Speaker 1: And in general, I think acid prices across the board 1133 00:56:23,160 --> 00:56:25,000 Speaker 1: because of low interest rates and things. You understand A 1134 00:56:25,000 --> 00:56:28,600 Speaker 1: lot better than I do are really high. And my 1135 00:56:28,719 --> 00:56:30,560 Speaker 1: senses you raise money when you don't need it, because 1136 00:56:30,560 --> 00:56:32,400 Speaker 1: when you really need it, it's typically pretty hard to 1137 00:56:32,480 --> 00:56:37,080 Speaker 1: raise money. So everybody, anybody who owns something, I'm saying, 1138 00:56:37,080 --> 00:56:38,719 Speaker 1: if you're in a position or for whatever reason, need 1139 00:56:38,760 --> 00:56:41,200 Speaker 1: to sell, then sell. But because I think it's a 1140 00:56:41,239 --> 00:56:43,120 Speaker 1: great time to sell almost anything. And if you're in 1141 00:56:43,120 --> 00:56:44,719 Speaker 1: a position to raise money or you think you might 1142 00:56:44,760 --> 00:56:47,239 Speaker 1: need to raise money, I'm a l two is a 1143 00:56:47,320 --> 00:56:50,759 Speaker 1: venture back company. We have fantastic nature cavalists firm called 1144 00:56:50,760 --> 00:56:53,880 Speaker 1: General Catalyst. But we're even thinking we don't need the capital. 1145 00:56:53,920 --> 00:56:56,520 Speaker 1: But it's just not a bad time to put another five, ten, 1146 00:56:56,600 --> 00:56:58,600 Speaker 1: twenty million bucks in the tank right now because you 1147 00:56:58,640 --> 00:57:01,880 Speaker 1: can get really solid evaluation, to say the least. Then 1148 00:57:01,920 --> 00:57:05,239 Speaker 1: and I'll tell you what my theory is. What's driving it. 1149 00:57:05,239 --> 00:57:06,960 Speaker 1: It has nothing to do with interest rates, it has 1150 00:57:07,000 --> 00:57:10,439 Speaker 1: nothing to do with the fed. Um. I'm a car guy. 1151 00:57:10,520 --> 00:57:12,480 Speaker 1: I've been a car first word I ever said was car. 1152 00:57:12,480 --> 00:57:16,800 Speaker 1: I'm a car buff and my whole adult working life 1153 00:57:16,800 --> 00:57:19,480 Speaker 1: there are a series of cars I would like to own, 1154 00:57:20,240 --> 00:57:23,040 Speaker 1: and they're now starting to creep up as I oh 1155 00:57:23,080 --> 00:57:27,120 Speaker 1: I can afford to buy a two thousand five for 1156 00:57:27,360 --> 00:57:30,800 Speaker 1: g T or a two thousand two BMW Z eight 1157 00:57:31,240 --> 00:57:34,520 Speaker 1: because when they were seventy five dollars and I was 1158 00:57:34,640 --> 00:57:38,080 Speaker 1: making sixty, I couldn't afford that. But the problem is 1159 00:57:38,200 --> 00:57:41,320 Speaker 1: that the Z eight is up to one seventy five, 1160 00:57:41,400 --> 00:57:44,040 Speaker 1: the GT is up to three hundred. As my income 1161 00:57:44,080 --> 00:57:47,080 Speaker 1: goes up, these cars go up. And the reason for this, 1162 00:57:47,200 --> 00:57:50,560 Speaker 1: to bring it back to start up valuations, there are 1163 00:57:50,600 --> 00:57:53,640 Speaker 1: only so many of them, and as we discussed before 1164 00:57:53,640 --> 00:57:57,360 Speaker 1: with the top one to there are so many people 1165 00:57:57,440 --> 00:58:00,880 Speaker 1: with so much money who desire those things that they 1166 00:58:00,920 --> 00:58:03,080 Speaker 1: don't care. They'll bid one fifty for a car that's 1167 00:58:03,120 --> 00:58:06,720 Speaker 1: really worth a hundred thousand dollars, or they'll bid fifty 1168 00:58:06,760 --> 00:58:09,720 Speaker 1: billion for Uber because they have to show Uber in 1169 00:58:09,800 --> 00:58:12,680 Speaker 1: their funds in order to make their limited partners happy. 1170 00:58:13,040 --> 00:58:16,200 Speaker 1: And so there's a limited number of of these goods, 1171 00:58:16,560 --> 00:58:19,880 Speaker 1: a limited number of these companies that at least appear 1172 00:58:19,960 --> 00:58:22,520 Speaker 1: to have some shot at at being a home run, 1173 00:58:22,880 --> 00:58:25,920 Speaker 1: and so everybody piles into the same. Look, look at 1174 00:58:25,960 --> 00:58:29,280 Speaker 1: the Ferrari market has gone insane. Like I've always thought, 1175 00:58:29,280 --> 00:58:32,240 Speaker 1: the Ferrari to seventy five was a gorgeous car, from 1176 00:58:33,200 --> 00:58:36,080 Speaker 1: one and later in the sixties the Dino. You could 1177 00:58:36,080 --> 00:58:38,720 Speaker 1: have picked up a Dino fifteen years ago for fifty thousand, 1178 00:58:39,720 --> 00:58:43,160 Speaker 1: fifty thousand dollars. They're half a million dollars. Now why 1179 00:58:43,200 --> 00:58:45,480 Speaker 1: because there aren't ten million of them. They made a 1180 00:58:45,480 --> 00:58:48,120 Speaker 1: few thousand. Half of them were wrecked on the track 1181 00:58:48,480 --> 00:58:50,600 Speaker 1: and the other half have been lovely restored and they've 1182 00:58:50,640 --> 00:58:55,160 Speaker 1: just completely But it's I see the same people buying 1183 00:58:55,200 --> 00:58:58,280 Speaker 1: those two seventy fives going to the art market and 1184 00:58:58,360 --> 00:59:02,400 Speaker 1: picking up the Jack Meddi sculptures or a bran cusio 1185 00:59:02,600 --> 00:59:05,760 Speaker 1: or whatever happens to float your boat, and piling into 1186 00:59:05,840 --> 00:59:09,120 Speaker 1: these private equities the best returns, the best industry in 1187 00:59:09,120 --> 00:59:11,160 Speaker 1: the world the last five ten years is this market 1188 00:59:11,200 --> 00:59:15,120 Speaker 1: surges has been the vanity economy. The vanity economy. Ferrari 1189 00:59:15,200 --> 00:59:17,080 Speaker 1: is anything that makes you more attractive or makes you 1190 00:59:17,120 --> 00:59:20,560 Speaker 1: feel more signaling to the opposite sex. Yeah, even even 1191 00:59:20,680 --> 00:59:22,640 Speaker 1: and a lot of people say, well, Scott, that's not true. 1192 00:59:22,800 --> 00:59:25,280 Speaker 1: I'm happily married. I just really like this ferrari and 1193 00:59:25,280 --> 00:59:26,600 Speaker 1: I bought it and I kept in my garage. And 1194 00:59:26,640 --> 00:59:28,320 Speaker 1: the questions, well, why does that make you feel good? 1195 00:59:28,800 --> 00:59:30,320 Speaker 1: Or people will so women will say, you know, I 1196 00:59:30,360 --> 00:59:32,880 Speaker 1: wear laprola under my work clothes and no one's ever 1197 00:59:32,880 --> 00:59:35,160 Speaker 1: going to see it. I'm happy. I'm in a monogous relationship. 1198 00:59:35,200 --> 00:59:37,400 Speaker 1: I'm not trying to attract anybody. The question is, well, 1199 00:59:37,400 --> 00:59:38,880 Speaker 1: why do you feel so good? It's because for the 1200 00:59:39,000 --> 00:59:41,920 Speaker 1: last ten million years, it's been pounded into us that 1201 00:59:41,960 --> 00:59:43,840 Speaker 1: we have this job to be more attractive to the 1202 00:59:43,840 --> 00:59:46,120 Speaker 1: other sex, such that we can find someone stronger, smarter, 1203 00:59:46,200 --> 00:59:48,320 Speaker 1: and faster than us to mate with. Such of the 1204 00:59:48,360 --> 00:59:52,360 Speaker 1: next generation is smarter, stronger, and faster. And this vanity 1205 00:59:52,400 --> 00:59:55,880 Speaker 1: economy the most successful people. There's a limited number of 1206 00:59:55,920 --> 00:59:58,840 Speaker 1: these objects because scarcity is what are scarcity values? What 1207 00:59:58,880 --> 01:00:00,640 Speaker 1: gives us the sense that it's sick? Those were really 1208 01:00:00,680 --> 01:00:03,280 Speaker 1: successful when you can only only so many people can 1209 01:00:03,280 --> 01:00:06,600 Speaker 1: buy and then long and ZN watch this unbelievably German 1210 01:00:06,920 --> 01:00:09,919 Speaker 1: watch Makeground by Richemont, and the prices have just gone 1211 01:00:10,200 --> 01:00:13,120 Speaker 1: just gone nuts, and it's totally irrational. And that's where 1212 01:00:13,120 --> 01:00:14,360 Speaker 1: you want to be in business. You want to be 1213 01:00:14,360 --> 01:00:17,360 Speaker 1: in an irrational part of the ecosystem because that irrational 1214 01:00:17,480 --> 01:00:19,800 Speaker 1: translates into great margins. I love the work you do 1215 01:00:19,840 --> 01:00:22,360 Speaker 1: on the signaling and the value of these different things. 1216 01:00:22,480 --> 01:00:27,720 Speaker 1: My my biology, my favorite biology discussion of what beauty 1217 01:00:27,880 --> 01:00:34,160 Speaker 1: is my favorite rationalization is or description maybe not rationalization is, well, 1218 01:00:34,200 --> 01:00:36,320 Speaker 1: beauty is a function of symmetry, and symmetry is a 1219 01:00:36,320 --> 01:00:39,120 Speaker 1: function of health, and that means that they'll be better 1220 01:00:39,200 --> 01:00:42,120 Speaker 1: able to reproduce the bare children. And so you're attracted 1221 01:00:42,160 --> 01:00:45,920 Speaker 1: to these supermodels not because they're so special, but because 1222 01:00:46,360 --> 01:00:52,480 Speaker 1: they meet all of the subconscious, instinctual inditia of health 1223 01:00:52,480 --> 01:00:55,160 Speaker 1: and the ability to procreate. And I don't know how 1224 01:00:55,200 --> 01:00:57,800 Speaker 1: solid the science is behind that, but I just love 1225 01:00:57,880 --> 01:01:01,520 Speaker 1: that rationalization. It makes so much sense along the signaling 1226 01:01:01,560 --> 01:01:04,000 Speaker 1: of the watches and all that other stuff. It really, 1227 01:01:04,320 --> 01:01:08,000 Speaker 1: when you put things in terms of evolutionary biology, suddenly 1228 01:01:08,040 --> 01:01:12,160 Speaker 1: a lot of irrational behavior starts to look less irrational. Yeah, 1229 01:01:12,200 --> 01:01:14,600 Speaker 1: it becomes highly irrational when you think about how important 1230 01:01:14,640 --> 01:01:17,560 Speaker 1: it is um that the next generation be better. That's, 1231 01:01:17,800 --> 01:01:20,880 Speaker 1: you know, Darwin, whatever you call it, the looks, what 1232 01:01:20,880 --> 01:01:23,120 Speaker 1: we're attracting this looks. I do think it bifurcates, though 1233 01:01:23,120 --> 01:01:26,240 Speaker 1: I think there's basics. Certain types of looks are more 1234 01:01:26,280 --> 01:01:29,400 Speaker 1: associated with infection or disease, and we have veered away 1235 01:01:29,400 --> 01:01:32,240 Speaker 1: from people who have those common characteristics, and I'm always 1236 01:01:32,240 --> 01:01:34,680 Speaker 1: worried I'm gonna I'm gonna say something off color here, 1237 01:01:34,680 --> 01:01:36,120 Speaker 1: and that's the quick end of my career, so I 1238 01:01:36,160 --> 01:01:38,880 Speaker 1: won't say what those things typically are. The second thing, though, 1239 01:01:38,880 --> 01:01:40,640 Speaker 1: I do think, is man made, and that I think 1240 01:01:40,760 --> 01:01:43,560 Speaker 1: clothes look better on people who are built like hangers, 1241 01:01:43,560 --> 01:01:47,920 Speaker 1: who are unutually thin, and because great organizations like Vogue 1242 01:01:47,960 --> 01:01:50,760 Speaker 1: have consistently wanted to make clothes look fantastic, I think 1243 01:01:50,800 --> 01:01:54,200 Speaker 1: there has been a man made, a man made training 1244 01:01:54,240 --> 01:01:57,439 Speaker 1: towards some unnatural body types. It's not like the days 1245 01:01:57,520 --> 01:02:01,720 Speaker 1: of of the Rubenesque window, which when Rubenesque women, which 1246 01:02:01,720 --> 01:02:04,280 Speaker 1: were a signal of wealth that you can actually you 1247 01:02:04,320 --> 01:02:07,800 Speaker 1: could be a little overweights, which signaled hey I have more. 1248 01:02:09,040 --> 01:02:11,120 Speaker 1: You know, I'm a cross fitter. I don't know if 1249 01:02:11,080 --> 01:02:14,160 Speaker 1: I've become one of these cross flash Yeah, there you go. Actually, 1250 01:02:14,160 --> 01:02:15,520 Speaker 1: my knees are killing me, but I think that's more 1251 01:02:15,560 --> 01:02:18,080 Speaker 1: function my age. But anyways, I think they tapped in. 1252 01:02:18,200 --> 01:02:20,800 Speaker 1: I think they tapped into this underserved marketplace, and that 1253 01:02:20,840 --> 01:02:23,480 Speaker 1: as women who don't necessarily want to be thin. If 1254 01:02:23,480 --> 01:02:26,760 Speaker 1: you look at the the the the workout industrial complex, 1255 01:02:26,800 --> 01:02:28,840 Speaker 1: it says to guys be ripped and be big, and 1256 01:02:28,960 --> 01:02:30,960 Speaker 1: I don't think that's always healthy, but I think there's 1257 01:02:31,000 --> 01:02:32,800 Speaker 1: benefits to being strong. But I think what it says 1258 01:02:32,840 --> 01:02:36,120 Speaker 1: to women is being naturally thin, and I think that's unhealthy. 1259 01:02:36,160 --> 01:02:38,920 Speaker 1: Won't cross fit, by the way six cross fitters or 1260 01:02:38,960 --> 01:02:41,800 Speaker 1: women has said to women is be strong and being 1261 01:02:41,840 --> 01:02:43,640 Speaker 1: strong as women can mean that you can be five 1262 01:02:43,680 --> 01:02:46,160 Speaker 1: five fifty pounds and you can still be really strong, 1263 01:02:46,200 --> 01:02:49,240 Speaker 1: and it's celebrated that and it has tapped into this 1264 01:02:49,480 --> 01:02:53,840 Speaker 1: wildly underserved population of women who are normal and strong. 1265 01:02:54,120 --> 01:02:58,200 Speaker 1: Did you see the Times article about the new um 1266 01:02:58,400 --> 01:03:01,920 Speaker 1: brands of cross fit? Close was so women who do 1267 01:03:02,120 --> 01:03:05,160 Speaker 1: cross fit they can't wear off the rack clothes if 1268 01:03:05,160 --> 01:03:07,680 Speaker 1: you're doing it strong enough, So you have these big 1269 01:03:07,760 --> 01:03:11,040 Speaker 1: muscular thighs and you're a little ripped on the shoulders 1270 01:03:11,040 --> 01:03:14,360 Speaker 1: and arms. Traditional women's clothes don't fit. I think it 1271 01:03:14,440 --> 01:03:16,760 Speaker 1: was the New York Times, but Wolf Jennal, I want 1272 01:03:16,760 --> 01:03:20,320 Speaker 1: to say Times about this whole new run of clothes 1273 01:03:20,800 --> 01:03:24,640 Speaker 1: that are designed for the CrossFit female body and women. 1274 01:03:24,680 --> 01:03:26,720 Speaker 1: It was invented by a woman who was a cross 1275 01:03:26,720 --> 01:03:31,680 Speaker 1: fit enthusiast, and it's become wildly successful. A real solid 1276 01:03:31,760 --> 01:03:37,200 Speaker 1: cross fitter female goes to the regular department store. Well, 1277 01:03:37,200 --> 01:03:39,240 Speaker 1: you're starting to talk about one that one of the 1278 01:03:39,240 --> 01:03:41,480 Speaker 1: best returns in retail have been plus size clothing. But 1279 01:03:41,520 --> 01:03:45,080 Speaker 1: you're also starting to uh segueing into something that's a 1280 01:03:45,160 --> 01:03:47,720 Speaker 1: tectonic shift in the world of retail. And one of 1281 01:03:47,720 --> 01:03:50,480 Speaker 1: the reasons why I think Nike is just gonna boom, 1282 01:03:51,560 --> 01:03:55,560 Speaker 1: Oh my gosh, what is athletic apparel? Or We've had 1283 01:03:55,560 --> 01:03:58,040 Speaker 1: a tectonic shift in the third largest consumer market in 1284 01:03:58,080 --> 01:03:59,600 Speaker 1: the world, and that US. For the first time ever 1285 01:04:00,000 --> 01:04:02,080 Speaker 1: in two thousand and fourteen, people are spending more money 1286 01:04:02,080 --> 01:04:06,400 Speaker 1: on sweatpants than on denim. You now see the denim 1287 01:04:06,920 --> 01:04:10,080 Speaker 1: the denim generation. But year olds in my office are 1288 01:04:10,120 --> 01:04:13,160 Speaker 1: not wearing Rachel Strugrats, the technology reporter for w w D, 1289 01:04:13,360 --> 01:04:15,280 Speaker 1: very fashionable woman. You know what she wears every day? 1290 01:04:15,320 --> 01:04:18,160 Speaker 1: Head to tell Nike. Really, people are spending more and 1291 01:04:18,200 --> 01:04:21,440 Speaker 1: more money that most the most the most popular brand 1292 01:04:21,520 --> 01:04:25,680 Speaker 1: among young wealthy millennials is Nike in apparel. People are 1293 01:04:25,680 --> 01:04:28,400 Speaker 1: showing up to work. The fabrics. It doesn't it's not 1294 01:04:28,440 --> 01:04:30,640 Speaker 1: just a bad pair of sweatpants. It says juicy on them, 1295 01:04:30,640 --> 01:04:34,320 Speaker 1: but these are interesting fabrics that look good. You're going 1296 01:04:34,400 --> 01:04:41,040 Speaker 1: to see athletic wear boom under armor Nike, they are 1297 01:04:41,040 --> 01:04:43,760 Speaker 1: gonna They're gonna boom the next ten years. And it's 1298 01:04:43,800 --> 01:04:46,520 Speaker 1: gonna be and and God help Leavi Strauss and Company, 1299 01:04:46,640 --> 01:04:50,800 Speaker 1: diesel Um any denim based company is going to be 1300 01:04:50,960 --> 01:04:53,000 Speaker 1: is going to be pushing a rock uphill the next time. Well, 1301 01:04:53,000 --> 01:04:56,720 Speaker 1: there's clearly far too many denim companies before this happened. 1302 01:04:57,080 --> 01:04:58,680 Speaker 1: Now that this is gonna happen, it will be interesting 1303 01:04:58,720 --> 01:05:02,720 Speaker 1: to see what sort of what sort of consolidation there is. 1304 01:05:02,960 --> 01:05:07,480 Speaker 1: So so let's talk about another UM signal out there, Twitter, 1305 01:05:07,760 --> 01:05:10,520 Speaker 1: Twitter followers, etcetera. You know, I may be a little 1306 01:05:10,520 --> 01:05:13,080 Speaker 1: ovo weight, but I got seventy Twitter followers, so I 1307 01:05:13,160 --> 01:05:15,720 Speaker 1: think that's worth thirty pounds or so. I could lose 1308 01:05:15,720 --> 01:05:20,400 Speaker 1: thirty pounds or um. But you've talked about how far 1309 01:05:20,640 --> 01:05:24,880 Speaker 1: Twitter is behind Facebook, and again for you and I 1310 01:05:24,880 --> 01:05:26,959 Speaker 1: I would bet you're much more of a Twitter user 1311 01:05:27,000 --> 01:05:28,640 Speaker 1: than you are a Facebook. Yeah, you and I were 1312 01:05:28,640 --> 01:05:31,160 Speaker 1: talking about this. Uh, you and I don't get Facebook. 1313 01:05:31,160 --> 01:05:33,760 Speaker 1: I would like to put a banner across my Facebook 1314 01:05:33,760 --> 01:05:36,400 Speaker 1: page that says there's a reason we haven't stayed in touch. 1315 01:05:36,640 --> 01:05:39,080 Speaker 1: I just don't like it. I don't get it. But 1316 01:05:39,120 --> 01:05:43,040 Speaker 1: as you don't care about your baby's doesn't interest done. 1317 01:05:43,320 --> 01:05:45,280 Speaker 1: It's but as Yoda said, you have to forget what 1318 01:05:45,400 --> 01:05:47,520 Speaker 1: you know. If you look at the numbers, Facebook's the 1319 01:05:47,520 --> 01:05:50,800 Speaker 1: most successful product in the history mankind. That's lessful than God, 1320 01:05:50,920 --> 01:05:53,760 Speaker 1: all a, Coca Cola, communism, whatever you want to call it, 1321 01:05:53,760 --> 01:05:57,360 Speaker 1: as relationships, meaningful relationships with two point four billion people 1322 01:05:57,400 --> 01:06:01,040 Speaker 1: across Instagram? What's happened Facebook? Anyways? Twitter? My basic rap 1323 01:06:01,160 --> 01:06:03,800 Speaker 1: is on Twitter, and I love Twitter, no doubt. It's 1324 01:06:03,800 --> 01:06:06,240 Speaker 1: a great company, no doubt. I think they've got a 1325 01:06:06,240 --> 01:06:08,600 Speaker 1: great management team. The question is are they worth worth 1326 01:06:08,640 --> 01:06:12,040 Speaker 1: more than coach Tiffany and and you know, throwing Abercrombie 1327 01:06:12,120 --> 01:06:14,800 Speaker 1: or Clorox combined. I just think it's wildly overvalued. And 1328 01:06:14,840 --> 01:06:16,400 Speaker 1: if you look at the user base, it appears to 1329 01:06:16,440 --> 01:06:19,640 Speaker 1: a flatline. And I would argue that their product innovation 1330 01:06:19,880 --> 01:06:23,560 Speaker 1: hasn't been nearly as robust as facebooks or even seen 1331 01:06:23,560 --> 01:06:26,160 Speaker 1: a way about. We tend to, as Americans, think of 1332 01:06:26,200 --> 01:06:28,360 Speaker 1: ourselves as being the home of innovation. Actually, if you 1333 01:06:28,360 --> 01:06:30,040 Speaker 1: look at the product roadmap of a lot of the 1334 01:06:30,080 --> 01:06:32,600 Speaker 1: social media platforms in Asia, we chat seen a way 1335 01:06:32,600 --> 01:06:38,200 Speaker 1: about Cow Cow talk line in um UH, South Korea 1336 01:06:38,200 --> 01:06:41,360 Speaker 1: and Japan, respectively, their product roadmap is actually more innovative 1337 01:06:41,400 --> 01:06:43,600 Speaker 1: than what we're seeing here. But I don't think Twitter, 1338 01:06:43,640 --> 01:06:45,680 Speaker 1: quite frankly, is innovated. And and if you look about 1339 01:06:47,880 --> 01:06:52,280 Speaker 1: we'll see that's exciting. Um I'm hedging because quite frankly, 1340 01:06:52,360 --> 01:06:54,440 Speaker 1: I don't know a lot about it. I think it's exciting. 1341 01:06:54,480 --> 01:06:56,840 Speaker 1: Real time partner loves it, uses it all the time. 1342 01:06:57,440 --> 01:06:59,080 Speaker 1: He's on the air a couple of a couple of 1343 01:06:59,120 --> 01:07:01,880 Speaker 1: days a week, and he'll pull up periscope. I have 1344 01:07:01,920 --> 01:07:03,520 Speaker 1: it on my phone. I have yet to set it up. 1345 01:07:03,800 --> 01:07:05,600 Speaker 1: He'll pull up periscope and say, all right, we're about 1346 01:07:05,640 --> 01:07:07,560 Speaker 1: to go on the air. He'll do a quick once 1347 01:07:07,600 --> 01:07:10,880 Speaker 1: around the studio and then bang, that's it and he 1348 01:07:10,920 --> 01:07:13,640 Speaker 1: gets real time back and forth. Another one you just mentioned. 1349 01:07:13,640 --> 01:07:15,720 Speaker 1: We're sitting here in Bloomberg and we're seeing all these screens, 1350 01:07:15,720 --> 01:07:18,040 Speaker 1: these these headlines come across these big beautiful screens, and 1351 01:07:18,040 --> 01:07:20,200 Speaker 1: we just saw the Pinterest announces you can now purchase 1352 01:07:20,240 --> 01:07:25,120 Speaker 1: directly from pins. I think that if Instagram tomorrow releases 1353 01:07:26,000 --> 01:07:34,280 Speaker 1: Instagram uh and says look curated pages of specific topics 1354 01:07:34,320 --> 01:07:37,040 Speaker 1: that you can pin your images too. I think Pinterest 1355 01:07:37,120 --> 01:07:39,600 Speaker 1: is going to decline in value. I think Pinterest product 1356 01:07:39,640 --> 01:07:42,640 Speaker 1: development has been almost zero the last twenty four months 1357 01:07:42,680 --> 01:07:45,240 Speaker 1: and is wildly overvalued. Granted I said that they were 1358 01:07:45,280 --> 01:07:48,800 Speaker 1: at five billion. I think you have essentially social media 1359 01:07:49,040 --> 01:07:51,120 Speaker 1: is basically Facebook in the seven doors right now. I 1360 01:07:51,160 --> 01:07:52,920 Speaker 1: think you're gonna see Facebook. And we said this during 1361 01:07:52,960 --> 01:07:54,520 Speaker 1: the brig. I think Facebook is gonna be the most 1362 01:07:54,600 --> 01:07:57,160 Speaker 1: valuable company in the world within five years. Granted I 1363 01:07:57,240 --> 01:07:58,800 Speaker 1: said that five years ago. I was gonna say, I'd 1364 01:07:58,800 --> 01:08:01,680 Speaker 1: say ten years. It might take longer. I said it 1365 01:08:01,760 --> 01:08:03,640 Speaker 1: five years ago. The Facebook was going to become the 1366 01:08:03,640 --> 01:08:06,440 Speaker 1: Internet of all time. Online is spent on Facebook. It 1367 01:08:06,480 --> 01:08:08,920 Speaker 1: goes to fifty one, and the Internet just the underlying technology, 1368 01:08:08,920 --> 01:08:11,440 Speaker 1: and Facebook is the Internet. But when you look at 1369 01:08:11,520 --> 01:08:14,520 Speaker 1: two and a half billion people, meaningful relationships dominating the 1370 01:08:14,520 --> 01:08:17,040 Speaker 1: funnel up and down, I just think they're an unbelievable 1371 01:08:17,080 --> 01:08:19,080 Speaker 1: jargonaut and they're gonna start to take share from Google 1372 01:08:19,120 --> 01:08:22,840 Speaker 1: and every other social media platform including Twitter. See that's 1373 01:08:22,880 --> 01:08:26,000 Speaker 1: really fascinating. Some of their advertising stuff. It's going to 1374 01:08:26,080 --> 01:08:29,439 Speaker 1: be interesting to see how they integrated because they have 1375 01:08:29,560 --> 01:08:33,960 Speaker 1: the ability to do wondrous things. They're a b testing 1376 01:08:34,040 --> 01:08:35,720 Speaker 1: and I don't know if we'll get to that. Will 1377 01:08:35,760 --> 01:08:38,240 Speaker 1: will circle back later about that. But some of the 1378 01:08:38,280 --> 01:08:41,719 Speaker 1: things I've been seeing that they do and hearing about 1379 01:08:41,760 --> 01:08:45,000 Speaker 1: that they do are astonishing. And I don't know how 1380 01:08:45,120 --> 01:08:48,360 Speaker 1: other marketers slash advotarser is going to be able to 1381 01:08:48,439 --> 01:08:52,280 Speaker 1: match the infrastructure because they have more you. You alluded 1382 01:08:52,320 --> 01:08:56,000 Speaker 1: to this earlier. They have so much information about you, 1383 01:08:56,320 --> 01:08:58,479 Speaker 1: who you are, what you do, you know. I love 1384 01:08:58,520 --> 01:09:01,440 Speaker 1: the story and this is way maybe there's some competition 1385 01:09:01,479 --> 01:09:06,160 Speaker 1: with Facebook. I love the story about target marketing to 1386 01:09:06,320 --> 01:09:09,160 Speaker 1: the pregnant d and dad goes into the store and 1387 01:09:09,240 --> 01:09:11,080 Speaker 1: yells at the manager and how dare you? You know, 1388 01:09:11,720 --> 01:09:13,599 Speaker 1: grows the paper, how dare you do this? And then 1389 01:09:13,640 --> 01:09:17,480 Speaker 1: a month later shows up to apologize, Hey, guys, we're right. 1390 01:09:17,760 --> 01:09:20,120 Speaker 1: Based on what her purchase history is through her credit card, 1391 01:09:20,120 --> 01:09:23,479 Speaker 1: they can track her. If other retailers can do that, 1392 01:09:23,920 --> 01:09:27,280 Speaker 1: do they stand a chance against Facebook? Or is it 1393 01:09:27,320 --> 01:09:29,840 Speaker 1: going to be Facebook and everybody else? So I think 1394 01:09:29,880 --> 01:09:31,640 Speaker 1: that's I think it's apples and oranges. I don't think 1395 01:09:31,640 --> 01:09:33,639 Speaker 1: facebooks in the retail business. As a matter of fact, 1396 01:09:33,680 --> 01:09:36,680 Speaker 1: social commerce has been one of the biggest head fix 1397 01:09:36,760 --> 01:09:38,840 Speaker 1: in business the last five years. There were what do 1398 01:09:38,840 --> 01:09:40,920 Speaker 1: you mean by that, well, a bunch of retailers in 1399 01:09:40,960 --> 01:09:44,000 Speaker 1: two thousand and twelve about seventeen retailers that whe track 1400 01:09:44,120 --> 01:09:49,559 Speaker 1: open stores. On Facebook you could buy something. There were 1401 01:09:49,600 --> 01:09:52,400 Speaker 1: three Social When you're at a bar, you don't want 1402 01:09:52,400 --> 01:09:54,240 Speaker 1: to buy. When you're looking taking your friends, you don't 1403 01:09:54,240 --> 01:09:57,040 Speaker 1: want to buy. But it doesn't matter it even if, 1404 01:09:57,040 --> 01:10:01,479 Speaker 1: even if these aren't platforms. Retail advertise is a huge market, 1405 01:10:01,680 --> 01:10:03,640 Speaker 1: and Facebook is going to start to take share and 1406 01:10:03,720 --> 01:10:06,880 Speaker 1: market cap from every other media vehicle in the world. 1407 01:10:06,920 --> 01:10:09,080 Speaker 1: They're gonna take it from ESPN, They're going to take 1408 01:10:09,120 --> 01:10:11,639 Speaker 1: it from w PP, They're gonna take it from pinterest. 1409 01:10:12,240 --> 01:10:13,920 Speaker 1: This is back to the notion of a winner take 1410 01:10:13,960 --> 01:10:17,040 Speaker 1: all economy. But you have top of the funnel with Instagram, 1411 01:10:17,240 --> 01:10:19,280 Speaker 1: would you could argue is already the most powerful platform 1412 01:10:19,280 --> 01:10:20,760 Speaker 1: in the world if you look at the community size 1413 01:10:20,800 --> 01:10:23,519 Speaker 1: times the level of engagement that it inspires top of 1414 01:10:23,520 --> 01:10:27,040 Speaker 1: the funnel, brand based, image based awareness. Then with Facebook 1415 01:10:27,080 --> 01:10:29,880 Speaker 1: you have unbelievable targeting in the mid funnel at scale, 1416 01:10:30,000 --> 01:10:32,160 Speaker 1: and then at the bottom you have What's app, which 1417 01:10:32,200 --> 01:10:34,280 Speaker 1: by the way, is strong in every market that Facebook 1418 01:10:34,439 --> 01:10:38,320 Speaker 1: wasn't strong and right, it was very, very um complementary acquisition. 1419 01:10:38,439 --> 01:10:41,120 Speaker 1: They're jumping the silos. They're starting to figure out what 1420 01:10:41,200 --> 01:10:43,559 Speaker 1: images you're looking at on Instagram and then and then 1421 01:10:43,600 --> 01:10:45,840 Speaker 1: target you on Facebook with more relevant ads, and at 1422 01:10:45,880 --> 01:10:47,759 Speaker 1: some point they're gonna be able to target you locally 1423 01:10:47,760 --> 01:10:49,920 Speaker 1: based on where you are on What's app. We have 1424 01:10:50,080 --> 01:10:53,960 Speaker 1: never seen, we have never seen anything like this. Very 1425 01:10:54,040 --> 01:10:56,840 Speaker 1: this is this is the most successful product in the 1426 01:10:56,960 --> 01:11:00,080 Speaker 1: history of mankind. It's nothing. It's a scene for a 1427 01:11:00,160 --> 01:11:04,719 Speaker 1: Minority report where where Tom Cruise walks into the store, 1428 01:11:04,760 --> 01:11:06,639 Speaker 1: they know who he is, they know what he's shopped at, 1429 01:11:06,680 --> 01:11:11,200 Speaker 1: the ads pop up specifically for him. Facebook is approaching 1430 01:11:11,200 --> 01:11:13,360 Speaker 1: that way. And look how smart they've been. Remember all 1431 01:11:13,400 --> 01:11:16,400 Speaker 1: the grief that everybody gave Mark Zuckerberg for buying Instagram 1432 01:11:16,479 --> 01:11:18,559 Speaker 1: nineteen people for a billion bucks. Now they say it's 1433 01:11:18,560 --> 01:11:22,360 Speaker 1: where billion dollars fantastic acquisition. Meanwhile, yeah, who goes and 1434 01:11:22,360 --> 01:11:23,880 Speaker 1: buy his tumber from one point one billion? And they 1435 01:11:23,880 --> 01:11:26,320 Speaker 1: never mentioned in earnings calls again, right, best acquisition in 1436 01:11:26,439 --> 01:11:28,960 Speaker 1: tech the last five years, Instagram, worst acquisition in tech 1437 01:11:29,040 --> 01:11:33,240 Speaker 1: the last five years, Tumbler, and then What's App perfectly 1438 01:11:33,280 --> 01:11:36,200 Speaker 1: complimentary every market they weren't strong, and this has been 1439 01:11:37,040 --> 01:11:39,040 Speaker 1: This has been the most nimble company in the world. 1440 01:11:39,160 --> 01:11:41,720 Speaker 1: Zero zero revenues from mobile thirty months ago, now two 1441 01:11:41,760 --> 01:11:45,240 Speaker 1: thirds of the revenue. And that's the huge shift once 1442 01:11:45,240 --> 01:11:49,280 Speaker 1: they cracked mobile, because I was skeptical about Facebook's valuation 1443 01:11:49,800 --> 01:11:53,920 Speaker 1: pre mobile, I did a reversal once they basically said, Hey, 1444 01:11:53,960 --> 01:11:56,320 Speaker 1: here's how much we're seeing and that was a huge, 1445 01:11:56,360 --> 01:12:00,720 Speaker 1: huge game change. Unbelievably nimble. Who's made better acquisition than Facebook, 1446 01:12:00,800 --> 01:12:03,679 Speaker 1: who's being able to retain talent better. They've also got 1447 01:12:03,720 --> 01:12:07,200 Speaker 1: the benefit of being seen as benign, so regulators aren't 1448 01:12:07,240 --> 01:12:10,479 Speaker 1: yet coming after them. Uh yeah, I think they made 1449 01:12:10,479 --> 01:12:13,880 Speaker 1: the most uh most valuable company in the world. That 1450 01:12:13,880 --> 01:12:17,040 Speaker 1: that's that's incredible. That's ah. We'll see if they can 1451 01:12:17,120 --> 01:12:22,080 Speaker 1: actually bypass Apple, And which raises the question how dependent 1452 01:12:22,360 --> 01:12:25,320 Speaker 1: is Apple on their next hit? I know that we've 1453 01:12:25,320 --> 01:12:29,479 Speaker 1: had a long run of really successful products. Are they 1454 01:12:29,560 --> 01:12:32,920 Speaker 1: a hit driven company or can they afford the watch 1455 01:12:33,200 --> 01:12:36,880 Speaker 1: the eye watch to be a little uh maybe not 1456 01:12:37,640 --> 01:12:40,200 Speaker 1: on iPhone or even an iPod for that matter. Yeah, 1457 01:12:40,720 --> 01:12:42,680 Speaker 1: I think they have their next hit product, and I 1458 01:12:42,720 --> 01:12:44,479 Speaker 1: don't think it's the watch. I think it's the iPhone 1459 01:12:44,479 --> 01:12:47,360 Speaker 1: sex Really, I don't know if you're an iPhone guy, 1460 01:12:47,400 --> 01:12:49,800 Speaker 1: But which one do you have? I got the six, 1461 01:12:50,400 --> 01:12:53,559 Speaker 1: My wife has the big one. The big one is 1462 01:12:53,560 --> 01:12:56,200 Speaker 1: too big to put in my pocket. She looked. Now, 1463 01:12:56,280 --> 01:12:59,200 Speaker 1: by the way, not a tech person like getting her 1464 01:12:59,240 --> 01:13:04,120 Speaker 1: to return voicemails like she texts. She she so totally 1465 01:13:04,400 --> 01:13:07,679 Speaker 1: loves this phone. It's easy to read, it does everything. 1466 01:13:07,720 --> 01:13:10,720 Speaker 1: It's the pictures, so she teaches a photography class. The 1467 01:13:10,800 --> 01:13:15,360 Speaker 1: pictures that you do on that phone are just just astonishing. Yeah, 1468 01:13:15,840 --> 01:13:18,520 Speaker 1: it does the Apple Watch. Is the Apple Watch successful? 1469 01:13:18,560 --> 01:13:19,960 Speaker 1: I think it is, but quite feely. I don't think 1470 01:13:20,000 --> 01:13:22,800 Speaker 1: it matters. I think the iPhone six is such an 1471 01:13:22,800 --> 01:13:26,400 Speaker 1: incredible product. And by the way, who loses Samsung? Oh 1472 01:13:26,439 --> 01:13:28,960 Speaker 1: my gosh, it's a Samsung killer. And you want to 1473 01:13:28,960 --> 01:13:32,920 Speaker 1: talk about Android. There were more Apple Watches sold on 1474 01:13:32,960 --> 01:13:34,960 Speaker 1: the first day of the Apple Watch and every Android 1475 01:13:34,960 --> 01:13:38,240 Speaker 1: device combined for the previous year. Really, Oh my gosh, 1476 01:13:38,360 --> 01:13:41,240 Speaker 1: that's unbelievable. Realized that Apple store on Fifth Avenue with 1477 01:13:41,280 --> 01:13:42,920 Speaker 1: the one below the General Motors building is going to 1478 01:13:43,000 --> 01:13:44,840 Speaker 1: do more sales in a year just that store than 1479 01:13:44,880 --> 01:13:47,360 Speaker 1: the entire wearables market. By the way, everybody thinks that 1480 01:13:47,400 --> 01:13:50,200 Speaker 1: the Apple watches evidence that the wearable's market is thriving. 1481 01:13:50,280 --> 01:13:54,360 Speaker 1: The wearables market is dead except for the Apple Watch. 1482 01:13:54,400 --> 01:13:56,719 Speaker 1: And the Apple Watch isn't a wearable. It's a second 1483 01:13:56,760 --> 01:13:58,720 Speaker 1: screen for your phone that's going to take all the 1484 01:13:58,760 --> 01:14:02,639 Speaker 1: discretionary income out of the wearable's market. Fit bit job 1485 01:14:02,760 --> 01:14:07,400 Speaker 1: on never going public, No way, the wearable's market is done. Aska. 1486 01:14:07,479 --> 01:14:09,839 Speaker 1: Anytime you're with a hundred people or more in an audience, 1487 01:14:09,960 --> 01:14:12,080 Speaker 1: how many people about a wearable? They all raise their hand. 1488 01:14:12,120 --> 01:14:15,360 Speaker 1: How many people are wearing a wearable? You got? What 1489 01:14:15,400 --> 01:14:19,360 Speaker 1: are you wearing? Which one you have? Um, it's okay. 1490 01:14:19,840 --> 01:14:22,360 Speaker 1: I don't love how poorly it sinks with the phone. 1491 01:14:22,400 --> 01:14:24,960 Speaker 1: Sometimes it does, sometimes it does in the battery last 1492 01:14:25,000 --> 01:14:27,920 Speaker 1: three days. I don't like the way this closes. If 1493 01:14:27,960 --> 01:14:30,879 Speaker 1: I have a better, if I I have zero brand loyalty, 1494 01:14:30,880 --> 01:14:33,559 Speaker 1: I've been using it because truth be told, I'm at 1495 01:14:33,640 --> 01:14:35,840 Speaker 1: nine thousand steps. Hey, I'm gonna make it to ten. 1496 01:14:36,200 --> 01:14:38,200 Speaker 1: And there are days when I'm doing fifteen and eighteen. 1497 01:14:38,240 --> 01:14:40,439 Speaker 1: And you know the only reason I'm not three hundred 1498 01:14:40,479 --> 01:14:44,880 Speaker 1: pounds is because I'm so I'm running around constantly what right. 1499 01:14:44,920 --> 01:14:47,000 Speaker 1: If it wasn't for that, I'd be a Macy's float 1500 01:14:47,560 --> 01:14:51,679 Speaker 1: um for Thanksgiving. But but, but I will tell you 1501 01:14:52,040 --> 01:14:56,240 Speaker 1: the fascinating thing about Apple and the phones is, you know, 1502 01:14:56,280 --> 01:14:58,840 Speaker 1: you see the Android market chair and how much Samsons 1503 01:14:59,160 --> 01:15:04,240 Speaker 1: Apple's capture about the profits in the phone space. For 1504 01:15:04,280 --> 01:15:06,439 Speaker 1: the first time in the history of South Korea or 1505 01:15:06,479 --> 01:15:08,280 Speaker 1: as long as it's been mobile phones, you're gonna have 1506 01:15:08,320 --> 01:15:10,519 Speaker 1: a mobile phone from a non domestic carry I have 1507 01:15:10,520 --> 01:15:13,519 Speaker 1: the number one market share, and that's the iPhone China 1508 01:15:13,640 --> 01:15:15,479 Speaker 1: never having before. It's Westman Samsung, which by the way, 1509 01:15:15,520 --> 01:15:17,000 Speaker 1: is a great company, and you can't count them out. 1510 01:15:17,040 --> 01:15:19,040 Speaker 1: I just think they're I mean, they're appliance as they 1511 01:15:19,120 --> 01:15:22,479 Speaker 1: do an amazing job. So diplomatic I work with all 1512 01:15:22,520 --> 01:15:26,320 Speaker 1: these guys anyway, So uh, but you look at the iPhone. 1513 01:15:26,320 --> 01:15:28,519 Speaker 1: There's gonna be more iPhone sold in China this year 1514 01:15:28,920 --> 01:15:30,680 Speaker 1: than in the US. And then just coming up in 1515 01:15:30,720 --> 01:15:33,360 Speaker 1: the elevator here, I realized the upgrade cycle has such 1516 01:15:33,360 --> 01:15:35,840 Speaker 1: traumatic potential because everyone has an iPhone, but they still 1517 01:15:35,880 --> 01:15:40,880 Speaker 1: have the five. So two things the iPhone, the successful 1518 01:15:40,920 --> 01:15:42,920 Speaker 1: migration to a luxury brand. Apple is going to be 1519 01:15:42,960 --> 01:15:46,040 Speaker 1: a trillion dollar market cab company. It you have never 1520 01:15:46,120 --> 01:15:49,400 Speaker 1: realized one of the core the core pieces of I 1521 01:15:49,479 --> 01:15:51,840 Speaker 1: P in the world of academia, Academias per Halla out 1522 01:15:51,840 --> 01:15:54,519 Speaker 1: of Chicago, this notion of core competents. Find one thing 1523 01:15:54,560 --> 01:15:56,679 Speaker 1: you're really good at, then do everything an industry standard. 1524 01:15:56,680 --> 01:15:59,120 Speaker 1: That's how the majority of great companies operated. What does 1525 01:15:59,120 --> 01:16:01,240 Speaker 1: an Apple's core comp prounced the best retailer in the 1526 01:16:01,280 --> 01:16:04,200 Speaker 1: world to the best retailer in the world, best store, 1527 01:16:04,320 --> 01:16:07,320 Speaker 1: the numbers on a square foot basis, there's nothing even 1528 01:16:07,360 --> 01:16:09,120 Speaker 1: close to it. There number one in retail in the 1529 01:16:09,160 --> 01:16:11,599 Speaker 1: world on a per square foot basis and five dollars 1530 01:16:11,640 --> 01:16:14,080 Speaker 1: per square foot. The number two is sifty at three thousand. 1531 01:16:14,200 --> 01:16:18,479 Speaker 1: There's a new number two warby Parker at about granted, 1532 01:16:18,520 --> 01:16:23,479 Speaker 1: small base, but what do they sells? But anyways, and 1533 01:16:23,479 --> 01:16:26,639 Speaker 1: then design, who's a better you know hardware? I mean 1534 01:16:26,800 --> 01:16:29,599 Speaker 1: this is a company with five or six core competence 1535 01:16:29,680 --> 01:16:33,000 Speaker 1: is it's blown out the traditional notions of a go 1536 01:16:33,120 --> 01:16:35,800 Speaker 1: to market strategy around business that we've ever had. We've 1537 01:16:35,800 --> 01:16:38,799 Speaker 1: never seen a company like this. Google has one public 1538 01:16:38,800 --> 01:16:42,120 Speaker 1: company search, Search and search right, nothing else could be 1539 01:16:42,160 --> 01:16:45,960 Speaker 1: taken public at Google. You probably have four to six 1540 01:16:46,600 --> 01:16:51,479 Speaker 1: fifty billion dollar plus companies within Apple that are distinct 1541 01:16:51,520 --> 01:16:54,320 Speaker 1: of each other. You know, iTunes could go public, the 1542 01:16:54,439 --> 01:16:59,120 Speaker 1: hardware company could go public. The iPhone you have so 1543 01:16:59,160 --> 01:17:03,280 Speaker 1: many company is operating on twelve cylinders in that company. 1544 01:17:03,320 --> 01:17:06,599 Speaker 1: We've never seen anything like that. It's amazing. So so 1545 01:17:06,680 --> 01:17:09,280 Speaker 1: let's there was a question I had for you about 1546 01:17:09,320 --> 01:17:13,160 Speaker 1: Apple earlier. How do you how do you compare Tim 1547 01:17:13,240 --> 01:17:16,720 Speaker 1: Cook to Steve Jobs? How good is Tim Cooked? He 1548 01:17:16,840 --> 01:17:19,479 Speaker 1: may be one of the most underrated CEOs in the country. 1549 01:17:19,600 --> 01:17:22,080 Speaker 1: I think he's I think it's fantastic. And you've run 1550 01:17:22,080 --> 01:17:24,320 Speaker 1: a company. I've run a company. You just see how 1551 01:17:24,400 --> 01:17:28,360 Speaker 1: damn hard it is to create value, and how and 1552 01:17:28,640 --> 01:17:33,040 Speaker 1: and and what both Steve Jobs, who has deservedly, you know, 1553 01:17:33,120 --> 01:17:37,679 Speaker 1: kind of attained icon status. Tim Cook, Oh my god, 1554 01:17:37,720 --> 01:17:40,400 Speaker 1: what unbelievably big shoes to fill. And he's slipped right 1555 01:17:40,400 --> 01:17:43,960 Speaker 1: into him. So every year one Buffett walkhings off for lunch. 1556 01:17:44,080 --> 01:17:47,880 Speaker 1: It goes for three or four million dollars. Tim Cook 1557 01:17:47,960 --> 01:17:50,080 Speaker 1: does one each year, and I was like, I would 1558 01:17:50,120 --> 01:17:52,240 Speaker 1: love to do that. I can't. I can't pass away 1559 01:17:52,280 --> 01:17:55,719 Speaker 1: two million dollars on lunch. You need that Ferrari, Right, Ferrari, 1560 01:17:56,240 --> 01:17:58,320 Speaker 1: it's two hundred thousand dollars. You can have lunch with 1561 01:17:58,360 --> 01:18:02,280 Speaker 1: Tim Cook to raise money for charity. How is that 1562 01:18:02,360 --> 01:18:05,120 Speaker 1: pop talk? That's what I mean by that's the most 1563 01:18:05,240 --> 01:18:09,320 Speaker 1: underrated CEO running the biggest company in the world. How 1564 01:18:09,400 --> 01:18:12,639 Speaker 1: is that not a million dollar lunch? Crazy? I'm gonna 1565 01:18:12,640 --> 01:18:15,599 Speaker 1: have lunch twice with them, crazy, great failure. That that's 1566 01:18:15,600 --> 01:18:18,840 Speaker 1: exactly right. Um. So we talked about design, design and 1567 01:18:18,880 --> 01:18:21,640 Speaker 1: brand with Apple, So what else do they need to 1568 01:18:21,640 --> 01:18:25,720 Speaker 1: do to move the needle? Or is there installed platform? 1569 01:18:25,800 --> 01:18:28,920 Speaker 1: Is there installed base so big that just that that 1570 01:18:29,080 --> 01:18:31,120 Speaker 1: upgrade cycle is enough to keep them going for a 1571 01:18:31,160 --> 01:18:34,559 Speaker 1: few years until the next hit comes along. My sense 1572 01:18:34,640 --> 01:18:37,479 Speaker 1: is between the watch, which is really a second screen 1573 01:18:37,520 --> 01:18:39,280 Speaker 1: for the phone, and anything you could do with the phone, 1574 01:18:39,320 --> 01:18:43,000 Speaker 1: whether it be you know, continue to approach on media. 1575 01:18:43,040 --> 01:18:46,000 Speaker 1: They announced their streaming service today. We'll see what happens 1576 01:18:46,000 --> 01:18:49,120 Speaker 1: with that. But there's so much opportunity there are there 1577 01:18:49,160 --> 01:18:51,559 Speaker 1: every every one of these companies and moving towards one place. 1578 01:18:51,600 --> 01:18:54,080 Speaker 1: They all want to be your global operating system hub 1579 01:18:54,120 --> 01:18:57,120 Speaker 1: I called gosh. They all want to control more time 1580 01:18:57,320 --> 01:18:59,479 Speaker 1: of your screen, time of your eyeballs, and your attention 1581 01:18:59,520 --> 01:19:02,320 Speaker 1: than any other firm, and Apples and probably the best 1582 01:19:02,360 --> 01:19:04,760 Speaker 1: position to do that among the people that matter most, 1583 01:19:04,840 --> 01:19:07,439 Speaker 1: and that's effectively higher income households. If you did a 1584 01:19:07,520 --> 01:19:11,120 Speaker 1: heat map of the iOS mobile system, it's basically a 1585 01:19:11,120 --> 01:19:14,559 Speaker 1: wealth map. If you're in Manhattan, you own uh, you 1586 01:19:14,600 --> 01:19:18,680 Speaker 1: own an iPhone and an iPad. If you're in on 1587 01:19:18,720 --> 01:19:20,519 Speaker 1: the island and some of the lower income areas, you're 1588 01:19:20,560 --> 01:19:22,280 Speaker 1: out of Jersey and some of them income areas, your 1589 01:19:22,360 --> 01:19:26,640 Speaker 1: Android and your PC. So Apple is effectively said and 1590 01:19:26,720 --> 01:19:30,240 Speaker 1: Apples tapping into this. They're getting in front of this wave. 1591 01:19:30,280 --> 01:19:33,000 Speaker 1: When we talk about unfortunately the wealthier aggregating more and 1592 01:19:33,040 --> 01:19:36,080 Speaker 1: more income. Apple only has what of a fifteen or 1593 01:19:36,080 --> 01:19:39,200 Speaker 1: tent market share, but they have share of mobile commerce 1594 01:19:39,200 --> 01:19:41,160 Speaker 1: because only wealthy people right now are shopping on their 1595 01:19:41,200 --> 01:19:45,439 Speaker 1: mobile phones. Wealthy people have iPhones. So who owns an iPhone? 1596 01:19:45,880 --> 01:19:48,200 Speaker 1: Everyone that matters. And when I say everyone that matters, 1597 01:19:48,240 --> 01:19:50,280 Speaker 1: I mean everyone that has a lot of disposing income 1598 01:19:50,320 --> 01:19:52,639 Speaker 1: and it is comfortable buying online and comfortable buying high 1599 01:19:52,680 --> 01:19:55,760 Speaker 1: margin products online. So I don't think I think all 1600 01:19:55,800 --> 01:19:58,439 Speaker 1: they need to do is keep improving the ecosystem for 1601 01:19:58,479 --> 01:20:00,840 Speaker 1: the iPhone and they're gonna add hundreds of billions of 1602 01:20:00,880 --> 01:20:03,120 Speaker 1: dollars in market cap. That's amazing. You know, in one 1603 01:20:03,160 --> 01:20:06,240 Speaker 1: of your videos, you show the heat map of operating 1604 01:20:06,240 --> 01:20:10,000 Speaker 1: system and exactly what you described, so you could see 1605 01:20:11,479 --> 01:20:15,000 Speaker 1: in Manhattan, Proper and Park Slope and and Morristown, in 1606 01:20:15,040 --> 01:20:18,040 Speaker 1: parts of Nasca County it's iPhone and all in the 1607 01:20:18,080 --> 01:20:22,800 Speaker 1: lower or or even middle income spaces, it was um 1608 01:20:23,840 --> 01:20:26,960 Speaker 1: the Android system. You also mentioned the purple areas that 1609 01:20:27,000 --> 01:20:30,360 Speaker 1: are Jurassic Park. Let's talk about that. Yeah, we infectionately 1610 01:20:30,360 --> 01:20:33,880 Speaker 1: called Midtown, which is purple lights up purple Jurassic Park. 1611 01:20:33,920 --> 01:20:36,439 Speaker 1: While with where all the dinosaurs with their blackberries are. 1612 01:20:36,560 --> 01:20:39,080 Speaker 1: And I don't know about you, but I missed my BlackBerry. 1613 01:20:39,200 --> 01:20:42,800 Speaker 1: I absolutely salivate when you didn't love the black hated it, 1614 01:20:42,880 --> 01:20:46,160 Speaker 1: hated it. And I'll tell you why, because my first 1615 01:20:46,439 --> 01:20:48,760 Speaker 1: the iPhone comes out and it was a T and 1616 01:20:48,800 --> 01:20:51,000 Speaker 1: T only, and I went and I got the iPhone 1617 01:20:51,080 --> 01:20:55,960 Speaker 1: and the first iPhone one was this beautiful, useless glass brick. 1618 01:20:56,320 --> 01:20:59,479 Speaker 1: It was just it was great unless you wanted to 1619 01:20:59,520 --> 01:21:02,519 Speaker 1: make up phone call. And back then, I supposedly a 1620 01:21:02,560 --> 01:21:05,000 Speaker 1: teen T is much better today, but back then it 1621 01:21:05,040 --> 01:21:08,160 Speaker 1: was utterly worthless in this part of area, a part 1622 01:21:08,200 --> 01:21:10,839 Speaker 1: of you know, New York and Essel County. You couldn't 1623 01:21:10,840 --> 01:21:13,200 Speaker 1: make a call within New York. State allows you thirty 1624 01:21:13,280 --> 01:21:17,679 Speaker 1: days to return a cellular country. So so the iPhone 1625 01:21:17,680 --> 01:21:19,479 Speaker 1: went back and I swapped it for a black beer. 1626 01:21:20,240 --> 01:21:22,680 Speaker 1: And for two or three years I used the BlackBerry, 1627 01:21:22,960 --> 01:21:25,360 Speaker 1: and I had the worst I'm a Mac guy since 1628 01:21:25,400 --> 01:21:29,880 Speaker 1: my classic, so I've been I've been a fanboy for 1629 01:21:29,920 --> 01:21:33,920 Speaker 1: a long time and I had the worst iPhone lust. 1630 01:21:34,240 --> 01:21:37,920 Speaker 1: But it was unusable for me, and I the whing 1631 01:21:38,000 --> 01:21:45,720 Speaker 1: m call it um. The basic concept of G, I 1632 01:21:45,840 --> 01:21:49,479 Speaker 1: really want this iPhone if only it would work for 1633 01:21:49,520 --> 01:21:52,720 Speaker 1: me was really really you know, frustrating. And then when 1634 01:21:52,840 --> 01:21:56,080 Speaker 1: finally it showed up on Verizon, that was it. It 1635 01:21:56,120 --> 01:21:59,439 Speaker 1: was get rid of the BlackBerry. Every time I used 1636 01:21:59,439 --> 01:22:02,920 Speaker 1: the BlackBerry was just reminded that it wasn't an iPhone. 1637 01:22:03,040 --> 01:22:06,000 Speaker 1: It was very, very frustrating. Yeah, it's it's it's been. 1638 01:22:07,200 --> 01:22:09,439 Speaker 1: I'm still I'm still envious of people who have their 1639 01:22:09,439 --> 01:22:12,360 Speaker 1: black but I missed the tactile keys. But talk about 1640 01:22:12,439 --> 01:22:16,519 Speaker 1: what's interesting is basically, in a two percent global growth economy, 1641 01:22:16,560 --> 01:22:19,080 Speaker 1: when a company's increasing market cap, the way Apple, it's 1642 01:22:19,120 --> 01:22:21,120 Speaker 1: increasing market cap. The question is, well, who's on the 1643 01:22:21,160 --> 01:22:23,120 Speaker 1: losing end of that? And we know they basically sucked 1644 01:22:23,160 --> 01:22:25,799 Speaker 1: all the all the all the life in the blood 1645 01:22:25,840 --> 01:22:27,840 Speaker 1: out of Rim. They're doing the same thing to HP. 1646 01:22:28,000 --> 01:22:30,200 Speaker 1: They're about to do the same thing to Samsung. The 1647 01:22:30,320 --> 01:22:33,240 Speaker 1: question is who's next. I think Apple is going to 1648 01:22:33,280 --> 01:22:35,479 Speaker 1: start to suck market cap out of the LVMH and 1649 01:22:35,520 --> 01:22:38,280 Speaker 1: carrying to the world in the j cruise of the 1650 01:22:38,280 --> 01:22:41,240 Speaker 1: world because there's only so much disposable income in the 1651 01:22:41,280 --> 01:22:43,679 Speaker 1: ecosystem to go to products that costs between three hundred 1652 01:22:43,720 --> 01:22:46,640 Speaker 1: and a thousand dollars and teen retailers who have been 1653 01:22:46,720 --> 01:22:49,800 Speaker 1: wrecked the last five years from a stock market perspective, 1654 01:22:49,920 --> 01:22:51,840 Speaker 1: staring at the navel is the product problems with the 1655 01:22:51,880 --> 01:22:54,519 Speaker 1: brand problems of a brand problems prodctblem, it's neither. It's 1656 01:22:54,520 --> 01:22:57,120 Speaker 1: an Apple problem. And that kids are now expressing their 1657 01:22:57,160 --> 01:23:01,479 Speaker 1: identity through their phone specifically there Apple phone, specifically there 1658 01:23:01,479 --> 01:23:04,960 Speaker 1: I found versus a hoodie. The hoodie, So the Abercromis 1659 01:23:04,960 --> 01:23:06,880 Speaker 1: of the world are no longer it. So let me 1660 01:23:06,880 --> 01:23:09,280 Speaker 1: show you why I don't really care about the BlackBerry 1661 01:23:09,320 --> 01:23:15,240 Speaker 1: anymore so. The speech to text feature which was awful 1662 01:23:15,840 --> 01:23:19,720 Speaker 1: in the first year and then was pretty good in 1663 01:23:19,760 --> 01:23:23,840 Speaker 1: the second year. Take a read of what I just did. 1664 01:23:24,400 --> 01:23:28,240 Speaker 1: It's picture perfect. It's letter for perfect. I hardly type 1665 01:23:28,240 --> 01:23:33,000 Speaker 1: anymore unless I'm on the subway, so it requires connectivity 1666 01:23:33,000 --> 01:23:36,040 Speaker 1: because it's basically checking. It takes what I say, it 1667 01:23:36,080 --> 01:23:39,800 Speaker 1: converts it to a formula to math, essentially sends it 1668 01:23:39,880 --> 01:23:42,640 Speaker 1: up to the cloud, brings it back down, compares it 1669 01:23:42,640 --> 01:23:47,080 Speaker 1: against a bajillion versions of this, finds out exactly what 1670 01:23:47,439 --> 01:23:52,320 Speaker 1: I'm saying, and the quality is it's so much better, 1671 01:23:53,120 --> 01:23:58,000 Speaker 1: um than it was. It's pretty usable. Typing on glass 1672 01:23:58,040 --> 01:24:01,599 Speaker 1: not my favorite thing, isn't it's it's I will say 1673 01:24:01,640 --> 01:24:04,400 Speaker 1: that the android, this thing where you can just sort 1674 01:24:04,400 --> 01:24:07,120 Speaker 1: of drag your fingers around. I think it is superior 1675 01:24:07,160 --> 01:24:12,320 Speaker 1: than the individual. But the the text dictation is now 1676 01:24:12,439 --> 01:24:15,000 Speaker 1: so accurate. The only problem is it's a different part 1677 01:24:15,040 --> 01:24:17,360 Speaker 1: of your brain to speak than to write. I find 1678 01:24:17,400 --> 01:24:19,360 Speaker 1: what I write is much better than what I say 1679 01:24:19,960 --> 01:24:22,800 Speaker 1: because it's a different lobe. Yeah, that's well. Look at 1680 01:24:22,800 --> 01:24:25,560 Speaker 1: the stories of different wornucks area, broke as area, the 1681 01:24:25,560 --> 01:24:28,840 Speaker 1: different aphasias. People who lose the ability to speak but 1682 01:24:28,960 --> 01:24:31,880 Speaker 1: can sing or can't read but can write. They just 1683 01:24:31,920 --> 01:24:34,839 Speaker 1: can't read back what they wrote. That sort of stuff 1684 01:24:34,880 --> 01:24:38,320 Speaker 1: is really fascinating to me. And look, when I wrote 1685 01:24:38,360 --> 01:24:40,519 Speaker 1: my first book, I thought, I'll just dictate, it'll take 1686 01:24:40,560 --> 01:24:43,080 Speaker 1: no time at all, and suddenly I discover, oh no, 1687 01:24:43,200 --> 01:24:46,320 Speaker 1: that's a very different part of it's a very different 1688 01:24:46,360 --> 01:24:48,439 Speaker 1: part of the brain, and it doesn't work nearly as well. 1689 01:24:48,680 --> 01:24:51,120 Speaker 1: If I write something out and then integrate it into 1690 01:24:51,160 --> 01:24:55,360 Speaker 1: my speaking process, it sounds much better than when I'm 1691 01:24:55,400 --> 01:24:58,400 Speaker 1: just what does that quote? If I'd had more time, 1692 01:24:58,439 --> 01:25:01,439 Speaker 1: I would have That's the thing about writing. I do 1693 01:25:01,520 --> 01:25:03,479 Speaker 1: think you try harder and you're more thoughtful about what 1694 01:25:03,520 --> 01:25:06,080 Speaker 1: you're actually communicating. So we never got to talk about 1695 01:25:06,080 --> 01:25:09,200 Speaker 1: the fifth Horsemen. Let's let's talk about that a little bit. 1696 01:25:09,560 --> 01:25:11,240 Speaker 1: So what we attempted to do is look at what 1697 01:25:11,280 --> 01:25:14,240 Speaker 1: are the common the underpinnings of the four horsemen that's 1698 01:25:14,320 --> 01:25:16,760 Speaker 1: enabled them to build these multi hundred billion dollar market 1699 01:25:16,800 --> 01:25:19,599 Speaker 1: cap companies. And we found several things. One a truly 1700 01:25:19,600 --> 01:25:22,920 Speaker 1: differentiated product, I mean something that's surrounded by IP that 1701 01:25:22,960 --> 01:25:26,120 Speaker 1: you couldn't replicate easily. You couldn't replicate Google Search Engine easily. 1702 01:25:26,120 --> 01:25:29,720 Speaker 1: You cannot replicate the phone, iPhone easily. You can replicate 1703 01:25:29,760 --> 01:25:35,240 Speaker 1: Facebook's primary platform's I mean these are protected really unbelievably 1704 01:25:35,280 --> 01:25:38,880 Speaker 1: differentiated products. Then visionary capital and that as someone with 1705 01:25:38,920 --> 01:25:41,040 Speaker 1: a big vision of Jeff Bezos has said We're going 1706 01:25:41,080 --> 01:25:43,160 Speaker 1: to be the world's biggest retailer. And then some progress 1707 01:25:43,160 --> 01:25:45,840 Speaker 1: against that vision that allows them to access capital at 1708 01:25:46,000 --> 01:25:49,080 Speaker 1: such a low cost that they can launch a phone, 1709 01:25:49,200 --> 01:25:50,880 Speaker 1: spend a couple of billion bucks on it, have to 1710 01:25:50,960 --> 01:25:53,720 Speaker 1: be a dud, and it doesn't really matter. They can 1711 01:25:53,760 --> 01:25:56,400 Speaker 1: have so much capital to go play in traffic and innovate. 1712 01:25:56,840 --> 01:26:00,200 Speaker 1: I think control of the end user experience vertical than 1713 01:26:00,840 --> 01:26:03,759 Speaker 1: luxury products are now sold through control channels. Your ability 1714 01:26:03,800 --> 01:26:06,280 Speaker 1: to control the end used product and have your brand 1715 01:26:06,280 --> 01:26:09,200 Speaker 1: be in front of the consumer is really powerful vanity 1716 01:26:09,560 --> 01:26:12,439 Speaker 1: uh self expressive benefit of brand that people want to 1717 01:26:12,479 --> 01:26:16,000 Speaker 1: associate with. So there's all these different factors. Maternal the 1718 01:26:16,320 --> 01:26:18,839 Speaker 1: companies have outed the most market cap, treat their employees 1719 01:26:18,920 --> 01:26:20,760 Speaker 1: really well, they're great places to work. So if you 1720 01:26:20,840 --> 01:26:23,519 Speaker 1: dook all those things and applied them to a bunch 1721 01:26:23,520 --> 01:26:26,479 Speaker 1: of great companies, who comes up as potentially could be 1722 01:26:26,880 --> 01:26:29,519 Speaker 1: the next big big thing. And some of the companies 1723 01:26:29,600 --> 01:26:32,000 Speaker 1: we came up with that have some potential. We talked 1724 01:26:32,000 --> 01:26:34,799 Speaker 1: about a couple of them. Nike has a lot of potential. 1725 01:26:35,360 --> 01:26:37,680 Speaker 1: I think Ali Baba when you look at six of 1726 01:26:37,760 --> 01:26:41,040 Speaker 1: all packages being shipped through China are coming from Ali Baba. 1727 01:26:41,040 --> 01:26:43,839 Speaker 1: When you get the product roadmap, you have a company 1728 01:26:43,880 --> 01:26:46,320 Speaker 1: that you know, is that kind of the best digital 1729 01:26:46,400 --> 01:26:48,280 Speaker 1: company in the fastest screen market in the world. That's 1730 01:26:48,280 --> 01:26:51,120 Speaker 1: a pretty good combination. A company that most people might 1731 01:26:51,160 --> 01:26:53,439 Speaker 1: not think of as potentially being in that same breath, 1732 01:26:53,439 --> 01:26:56,200 Speaker 1: but I think it's an amazing company. Is Starbucks? What 1733 01:26:56,280 --> 01:26:59,240 Speaker 1: are the twenties something thousand stores now? Two stores opened 1734 01:26:59,240 --> 01:27:02,719 Speaker 1: every day for the last seven years. Also, I would 1735 01:27:02,800 --> 01:27:06,040 Speaker 1: argue a technology company that serves hor beverages, the largest 1736 01:27:06,040 --> 01:27:09,160 Speaker 1: mobile payments company in the world. You have that. You 1737 01:27:09,200 --> 01:27:12,439 Speaker 1: have a Starbucks app one five One in five dollars 1738 01:27:12,560 --> 01:27:16,080 Speaker 1: go through the mobile app. Now, that's unbelievable, more successful 1739 01:27:16,120 --> 01:27:18,200 Speaker 1: than I've been using it for god knows how long. 1740 01:27:18,920 --> 01:27:23,000 Speaker 1: It's flawless, more than any other company in the world 1741 01:27:23,080 --> 01:27:26,760 Speaker 1: right now, and also incredibly maternal. They spend more money 1742 01:27:26,800 --> 01:27:31,120 Speaker 1: on employee benefits and they spend on coffee beings fantastic 1743 01:27:31,520 --> 01:27:35,240 Speaker 1: and not nine dollars and twenty three cents average order value. 1744 01:27:35,240 --> 01:27:36,800 Speaker 1: If they can figure out a way to get into 1745 01:27:36,840 --> 01:27:38,760 Speaker 1: food or into other things and get to twenty or 1746 01:27:38,760 --> 01:27:42,080 Speaker 1: thirty bucks transaction, you're probably looking at a company that's 1747 01:27:42,080 --> 01:27:44,920 Speaker 1: three to five billion dollar market cat. Starbucks is an 1748 01:27:45,080 --> 01:27:50,160 Speaker 1: unbelievable company that has had, in my opinion, just made 1749 01:27:50,680 --> 01:27:52,680 Speaker 1: we haveventimes sit with comes and say, well, we're not 1750 01:27:52,760 --> 01:27:54,479 Speaker 1: a tech company. Were apparent we're never going to be 1751 01:27:54,479 --> 01:27:57,000 Speaker 1: a tech I'm saying, if Starbucks can be a tech company, 1752 01:27:57,080 --> 01:27:59,240 Speaker 1: or can use technology to drive tens of billions of 1753 01:27:59,240 --> 01:28:02,639 Speaker 1: dollars in market appitalization, what's your excuse? No one would 1754 01:28:02,640 --> 01:28:04,599 Speaker 1: say of Starbucks as a tech company. Yeah, they are. 1755 01:28:04,760 --> 01:28:07,600 Speaker 1: That's how they've had it, tens of billions of dollars 1756 01:28:07,600 --> 01:28:10,040 Speaker 1: in market cap, the number one company or the company 1757 01:28:10,080 --> 01:28:12,719 Speaker 1: based on what i'll call the subjective algorithm we've applied 1758 01:28:12,760 --> 01:28:15,280 Speaker 1: against it. In my view, if I was to say, okay, 1759 01:28:15,280 --> 01:28:17,200 Speaker 1: what company now is trading at less than a hundred 1760 01:28:17,240 --> 01:28:19,200 Speaker 1: billion dollars but could be worth three to five d 1761 01:28:19,240 --> 01:28:21,240 Speaker 1: billon dollars in five to ten years, I would pick Uber. 1762 01:28:21,960 --> 01:28:24,639 Speaker 1: I think it's become the vascular system for business. We've 1763 01:28:24,640 --> 01:28:28,480 Speaker 1: never seen anything like that. It's it's adopted this strategy. 1764 01:28:28,520 --> 01:28:30,280 Speaker 1: When you look at the other things companies have had 1765 01:28:30,280 --> 01:28:32,320 Speaker 1: in common that have added hundreds of billions of dollars 1766 01:28:32,360 --> 01:28:34,280 Speaker 1: in market capit last few years, it is their parasites, 1767 01:28:34,360 --> 01:28:37,559 Speaker 1: and that is they're they're feeding off another organism. Someone 1768 01:28:37,640 --> 01:28:40,440 Speaker 1: else is creating the content. You create the content for Facebook, 1769 01:28:40,640 --> 01:28:45,400 Speaker 1: we create the content for Google. Uber is basically fed 1770 01:28:45,640 --> 01:28:50,040 Speaker 1: x ups without unions, without cap X. They buy their 1771 01:28:50,080 --> 01:28:53,240 Speaker 1: own car, without a uniform, without the right to strike, 1772 01:28:53,760 --> 01:28:58,000 Speaker 1: flexible labor meaning cheap labor. It's sort of a it's 1773 01:28:58,040 --> 01:29:02,400 Speaker 1: an a ran Darwinian dream from a shareholder standpoint. Uh, 1774 01:29:02,439 --> 01:29:04,919 Speaker 1: and they could potentially get into all sorts of businesses. 1775 01:29:05,000 --> 01:29:07,799 Speaker 1: I don't think Uber is a private drive, a private 1776 01:29:07,800 --> 01:29:11,080 Speaker 1: car company. I think Uber is effectively a last mass 1777 01:29:11,160 --> 01:29:15,040 Speaker 1: solution for millions of businesses that all are struggling with 1778 01:29:15,120 --> 01:29:19,559 Speaker 1: last mile That's fascinating. Way do you put Netflix into 1779 01:29:19,600 --> 01:29:22,360 Speaker 1: that ecosystem? Unbelievable company, I mean, but it's already it's 1780 01:29:22,360 --> 01:29:27,680 Speaker 1: already almost there. Right. What will be interesting is it's 1781 01:29:27,720 --> 01:29:30,160 Speaker 1: a great lesson and it's something that my industry we 1782 01:29:30,240 --> 01:29:32,439 Speaker 1: failed to learn that If you want to understand how 1783 01:29:32,479 --> 01:29:35,240 Speaker 1: likely you are to be disrupted. It's pretty easy. You 1784 01:29:35,320 --> 01:29:37,960 Speaker 1: just look at what is our prices relative to inflation, 1785 01:29:38,280 --> 01:29:40,120 Speaker 1: you know, and if our prices have gone way more 1786 01:29:40,120 --> 01:29:44,679 Speaker 1: inflation and there's no underlying innovation, Cable massive price increases, 1787 01:29:44,680 --> 01:29:48,639 Speaker 1: no innovation, everybody gets into it. Netflix, Uh, my senses 1788 01:29:49,160 --> 01:29:51,000 Speaker 1: could be one of those company. The thing that's scary 1789 01:29:51,000 --> 01:29:54,120 Speaker 1: about Netflix is the dumb pipe of cable riders. They 1790 01:29:54,160 --> 01:29:57,120 Speaker 1: still have a lot of power, and so even with 1791 01:29:57,160 --> 01:30:01,080 Speaker 1: net neutrality more or less passing, but there new FCC rules, 1792 01:30:01,120 --> 01:30:03,840 Speaker 1: but they still own the pipe. Yeah, they still own 1793 01:30:03,840 --> 01:30:07,880 Speaker 1: the pipe, right, so they can raise prices, I know. 1794 01:30:08,560 --> 01:30:12,080 Speaker 1: So I wonder if Netflix, Netflix, in my opinion, has 1795 01:30:12,160 --> 01:30:14,759 Speaker 1: one big hurdle that the other guys, the four Horsemen, 1796 01:30:14,760 --> 01:30:17,080 Speaker 1: don't happen to. That is they are not totally vertical. 1797 01:30:17,120 --> 01:30:20,040 Speaker 1: They don't control their distribution. They still have to go 1798 01:30:20,080 --> 01:30:22,920 Speaker 1: through someone else's pipe. By the way, how familiar are 1799 01:30:22,920 --> 01:30:25,519 Speaker 1: you with the history of of the Apple stores, since 1800 01:30:25,560 --> 01:30:28,800 Speaker 1: you're talking about controlling the vertical you you just made 1801 01:30:28,800 --> 01:30:33,280 Speaker 1: me think of something from back in the when it 1802 01:30:33,320 --> 01:30:36,040 Speaker 1: looked like Apple wasn't gonna survive. Are you are you 1803 01:30:36,080 --> 01:30:39,639 Speaker 1: plugged into the best buy Apple story? I'm not so. 1804 01:30:39,760 --> 01:30:43,799 Speaker 1: The first Apple stores were this ghetto in the corner 1805 01:30:43,800 --> 01:30:48,799 Speaker 1: of the PC section of Best Buy, because um, Apple 1806 01:30:48,880 --> 01:30:52,599 Speaker 1: had a real hard time getting people to pay more 1807 01:30:52,640 --> 01:30:56,160 Speaker 1: money for computers that the staff wasn't really all that 1808 01:30:56,280 --> 01:30:59,320 Speaker 1: familiar with. Everybody knew how to sell a Windows machine, 1809 01:30:59,360 --> 01:31:02,240 Speaker 1: everybody know how to sell a Compact or an HP, 1810 01:31:02,800 --> 01:31:04,680 Speaker 1: and so Apple cut a deal with best Buy. They 1811 01:31:04,720 --> 01:31:08,080 Speaker 1: set up these little I called them the Apple Ghetto 1812 01:31:08,160 --> 01:31:10,639 Speaker 1: the Mac Ghetto, and so it was four or five machines, 1813 01:31:10,680 --> 01:31:12,760 Speaker 1: some of which works, some of which were hooked up 1814 01:31:12,760 --> 01:31:16,479 Speaker 1: in properly, they were dusty, It was just ignored. And 1815 01:31:16,560 --> 01:31:19,439 Speaker 1: my thesis is that Steve Jobs walked into one of 1816 01:31:19,479 --> 01:31:24,200 Speaker 1: these places and said, you know what, making a gesture 1817 01:31:24,280 --> 01:31:26,920 Speaker 1: that we can't discuss here, and said, I'm gonna do 1818 01:31:27,000 --> 01:31:31,320 Speaker 1: it myself, and I'm tired of being dependent on these, 1819 01:31:31,360 --> 01:31:34,559 Speaker 1: you know, retail bumbs who don't want to sell my product. 1820 01:31:34,600 --> 01:31:37,280 Speaker 1: But what you're describing as the evolutional luxury in general, 1821 01:31:37,360 --> 01:31:40,120 Speaker 1: because effectively you had Rolex or you had Vitan. As 1822 01:31:40,120 --> 01:31:44,640 Speaker 1: a better example, Toner Gucci going into Bullocks or Macy's 1823 01:31:44,680 --> 01:31:46,240 Speaker 1: and saying, you know, they do a good job and 1824 01:31:46,280 --> 01:31:47,960 Speaker 1: not a great job. So I'm gonna start opening my 1825 01:31:48,000 --> 01:31:50,800 Speaker 1: own stores. So when did the Coach stores open up? 1826 01:31:50,800 --> 01:31:53,120 Speaker 1: When did the Louis Vuitton stores open up? Well, Coach 1827 01:31:53,160 --> 01:31:55,880 Speaker 1: has been has had more control their distribution, although sort 1828 01:31:55,880 --> 01:31:57,720 Speaker 1: of the dirty secret of Coaches at the majority of 1829 01:31:57,720 --> 01:32:00,439 Speaker 1: the retail sales come to their outlets, the majority of 1830 01:32:00,479 --> 01:32:04,280 Speaker 1: their profits. But and their outlets isn't the same stuff 1831 01:32:04,320 --> 01:32:06,559 Speaker 1: that's in the I believe it's custom product at a 1832 01:32:06,560 --> 01:32:08,240 Speaker 1: lower price point. And there's a lot of brands that 1833 01:32:08,280 --> 01:32:10,519 Speaker 1: do that. It's just trying to bandage that balance. But 1834 01:32:10,600 --> 01:32:12,519 Speaker 1: with luxury where you have last years for the first 1835 01:32:12,560 --> 01:32:15,080 Speaker 1: time more luxury goods are controlled, are sold through controlled 1836 01:32:15,200 --> 01:32:17,680 Speaker 1: vertical channels. If the way to summarize it as a 1837 01:32:17,760 --> 01:32:20,680 Speaker 1: brand building has moved from broadcast in other words, pre 1838 01:32:20,840 --> 01:32:24,120 Speaker 1: purchased advertising, PARNT trade shows. It's moved from there in 1839 01:32:24,200 --> 01:32:26,439 Speaker 1: terms of effectiveness to the store. And the guy that 1840 01:32:26,520 --> 01:32:28,680 Speaker 1: discovered that and created tens of billions of dollars in 1841 01:32:28,760 --> 01:32:33,920 Speaker 1: value for shareholders is Mickey Drag Slour absolutely largest apparel 1842 01:32:33,960 --> 01:32:37,120 Speaker 1: company in the world by Stouston Company at seven billion. 1843 01:32:37,160 --> 01:32:40,639 Speaker 1: Basic model was best advertising the world. Then stuff Army 1844 01:32:40,720 --> 01:32:44,840 Speaker 1: Navy stores with pile highs of five oh ones and 1845 01:32:44,880 --> 01:32:46,360 Speaker 1: they had the best outs of the world. And Mickey 1846 01:32:46,439 --> 01:32:48,240 Speaker 1: Jackson said, we can't afford to go tote toe, so 1847 01:32:48,240 --> 01:32:50,200 Speaker 1: we're gonna put all of that money and branding into 1848 01:32:50,240 --> 01:32:53,639 Speaker 1: the store. Bleachmond would more intelligent, attractive sales associates, bigger, 1849 01:32:53,880 --> 01:32:57,519 Speaker 1: bigger dressing room, scented stores, better real estate. The branding, 1850 01:32:57,640 --> 01:33:00,679 Speaker 1: he said, is moving to the store. Leave Strasson company 1851 01:33:00,680 --> 01:33:03,479 Speaker 1: exploded from seven billion of four billion in that time period. 1852 01:33:03,640 --> 01:33:05,920 Speaker 1: The gap went from something like two billion to eight billion. 1853 01:33:06,520 --> 01:33:08,439 Speaker 1: It's a huge shift. We don't give enough credit to 1854 01:33:08,520 --> 01:33:10,960 Speaker 1: him for. But branding is me from pre purchase into 1855 01:33:10,960 --> 01:33:13,920 Speaker 1: the store. Starbucks took advantage of that, and Luxury has 1856 01:33:13,960 --> 01:33:17,839 Speaker 1: seen that. You see Richmont making these staggering investments in stores, 1857 01:33:18,400 --> 01:33:21,439 Speaker 1: so high end distribution. The Achilles feal for Nike becoming 1858 01:33:21,479 --> 01:33:24,200 Speaker 1: up one of the four four horsemen. They have to 1859 01:33:24,240 --> 01:33:26,519 Speaker 1: control more of their distributions. They have a decent amount 1860 01:33:26,560 --> 01:33:29,560 Speaker 1: of stores, but it seems like there's one store per city. 1861 01:33:29,360 --> 01:33:32,400 Speaker 1: One in Seattle, there is one in in San Francisco. 1862 01:33:32,800 --> 01:33:35,519 Speaker 1: I think there's I know there's one here. Every now 1863 01:33:35,560 --> 01:33:38,240 Speaker 1: and then we see one pop up. But it's not 1864 01:33:38,360 --> 01:33:41,599 Speaker 1: like a giant chain. Yeah, it's I believe they only 1865 01:33:41,600 --> 01:33:45,560 Speaker 1: control about ten to fift of their distribution, so it's um, 1866 01:33:45,880 --> 01:33:47,720 Speaker 1: they're going if you. The one thing you see in 1867 01:33:47,720 --> 01:33:50,320 Speaker 1: common among these four horsemen is that they control the 1868 01:33:50,479 --> 01:33:54,880 Speaker 1: end experience. Whether it's Google, Apple, Facebook, and Amazon, they 1869 01:33:54,880 --> 01:33:57,679 Speaker 1: have vertical control. And that's that's because that, in my view, 1870 01:33:57,680 --> 01:34:00,720 Speaker 1: that's a prerequisite to become quote unquote part of the 1871 01:34:00,800 --> 01:34:05,160 Speaker 1: trillion dollar possible club. That's quite fascinating. All right, I 1872 01:34:05,200 --> 01:34:07,479 Speaker 1: know I only have you for so many minutes left, 1873 01:34:07,840 --> 01:34:10,679 Speaker 1: so let me get right to my favorite three questions 1874 01:34:10,720 --> 01:34:13,040 Speaker 1: or four questions, and I asked all my guests, and 1875 01:34:13,040 --> 01:34:15,960 Speaker 1: we'll get you out of here at a reasonable time. First, 1876 01:34:16,320 --> 01:34:18,760 Speaker 1: we have yet you talked about some of your mentors. 1877 01:34:19,160 --> 01:34:21,799 Speaker 1: We have not talked about any of your favorite books. 1878 01:34:22,800 --> 01:34:24,960 Speaker 1: What what sort of books do you really uh? Do 1879 01:34:24,960 --> 01:34:28,280 Speaker 1: you really enjoy? God, I'm just I'm embarrassed to say this. 1880 01:34:28,360 --> 01:34:30,120 Speaker 1: I don't read as much as as as I would 1881 01:34:30,160 --> 01:34:31,760 Speaker 1: like or as I should as an academic, because I'm 1882 01:34:31,760 --> 01:34:33,479 Speaker 1: reading all day, but I'm reading blogs like yours and 1883 01:34:33,520 --> 01:34:37,439 Speaker 1: other people's. Um, some of the books that have had Yeah, yeah, 1884 01:34:37,840 --> 01:34:40,200 Speaker 1: the basics like the Alchemist had an impact on me. 1885 01:34:40,360 --> 01:34:43,240 Speaker 1: I love now I'm sending like I'm seven year eighty, 1886 01:34:43,240 --> 01:34:45,519 Speaker 1: but I love reading books about military history. I find 1887 01:34:45,520 --> 01:34:48,839 Speaker 1: them fascinating, you know, guns, the early light or Herman Wooks, 1888 01:34:48,960 --> 01:34:51,519 Speaker 1: the wins of war. And then in terms of business, 1889 01:34:51,560 --> 01:34:54,760 Speaker 1: my father introduced me to Peter Drucker, a young observations 1890 01:34:54,760 --> 01:34:58,679 Speaker 1: of a bystander. Um, I find that stuff, uh really 1891 01:34:58,720 --> 01:35:02,160 Speaker 1: interesting still time least irrelevant today? Oh gosh, I think so. 1892 01:35:02,240 --> 01:35:04,479 Speaker 1: I think it is the father modern management. Is stuff 1893 01:35:04,520 --> 01:35:07,559 Speaker 1: is more relevant than is today. Also love some of 1894 01:35:07,600 --> 01:35:12,040 Speaker 1: the stuff from John Irving, you knowld according to guard 1895 01:35:12,680 --> 01:35:13,920 Speaker 1: I think it's I think it's just a lot of 1896 01:35:13,960 --> 01:35:16,040 Speaker 1: fun and just so strange. It's kind of I find 1897 01:35:16,040 --> 01:35:20,559 Speaker 1: it really really um So say next question, So you 1898 01:35:20,600 --> 01:35:22,320 Speaker 1: deal with a lot of millennials, you deal with a 1899 01:35:22,360 --> 01:35:25,400 Speaker 1: lot of people at the start of their career. What 1900 01:35:25,479 --> 01:35:27,920 Speaker 1: sort of advice do you give to somebody starting out 1901 01:35:28,320 --> 01:35:32,559 Speaker 1: in your space today? Find find a great platform, find 1902 01:35:32,560 --> 01:35:35,400 Speaker 1: a place you're gonna learn and it's not aspirational, but 1903 01:35:35,560 --> 01:35:37,679 Speaker 1: find some of your good at and work really really 1904 01:35:37,680 --> 01:35:40,840 Speaker 1: hard at it. Um and um. If you don't find 1905 01:35:40,880 --> 01:35:43,800 Speaker 1: yourself on a path, yeah, you're not if you're not 1906 01:35:43,840 --> 01:35:45,800 Speaker 1: fortunateough to find yourself on a path where it's something 1907 01:35:45,840 --> 01:35:48,400 Speaker 1: you love or you like. People say, find something you love, 1908 01:35:48,439 --> 01:35:50,280 Speaker 1: find something you like. I was the way I would 1909 01:35:50,280 --> 01:35:51,640 Speaker 1: say that, because if you like it, you're gonna be 1910 01:35:51,640 --> 01:35:54,360 Speaker 1: good at it. Um, think about graduate school. For all 1911 01:35:54,400 --> 01:35:57,080 Speaker 1: the for all the noise about and all the publicity 1912 01:35:57,080 --> 01:36:00,000 Speaker 1: about people dropping out of college, I still think school 1913 01:36:00,040 --> 01:36:02,439 Speaker 1: is a good plan. B. The Peter Field thing, you're 1914 01:36:02,479 --> 01:36:04,920 Speaker 1: not a fan, I think that is so frightening and 1915 01:36:04,960 --> 01:36:09,160 Speaker 1: so scary. I just you know, I'd love to pick 1916 01:36:09,200 --> 01:36:12,080 Speaker 1: ten kids at great public universities to match up against 1917 01:36:12,439 --> 01:36:16,240 Speaker 1: the ten heat. Look, if you're Steve, if you're Steve 1918 01:36:16,320 --> 01:36:20,519 Speaker 1: Jobs or Bill Gates, granted they're exceptional and and God 1919 01:36:20,560 --> 01:36:22,280 Speaker 1: love you if you're one of those one of those 1920 01:36:22,400 --> 01:36:24,880 Speaker 1: rare people that can, you know, take a calligraphy class 1921 01:36:24,880 --> 01:36:27,040 Speaker 1: and then drop out and start the start the MAC. 1922 01:36:27,439 --> 01:36:30,120 Speaker 1: But for the rest of us, you know, college is 1923 01:36:30,160 --> 01:36:33,960 Speaker 1: a pretty good plan. B. So, as we've seen in 1924 01:36:33,960 --> 01:36:36,479 Speaker 1: this recovery, to say the least, get get a great 1925 01:36:36,600 --> 01:36:39,519 Speaker 1: find a great platform, find something you think you like 1926 01:36:39,760 --> 01:36:41,519 Speaker 1: or you're good at, work your ass off, and if 1927 01:36:41,520 --> 01:36:43,800 Speaker 1: it's not working out in your mid twenties, think about 1928 01:36:43,840 --> 01:36:48,800 Speaker 1: graduate school and you know good karma. The really successful 1929 01:36:48,840 --> 01:36:50,360 Speaker 1: people what you find in the trade is they do 1930 01:36:50,439 --> 01:36:52,120 Speaker 1: spend a lot of time thinking about how can I 1931 01:36:52,160 --> 01:36:54,439 Speaker 1: help other people? Because it will come full circle. People 1932 01:36:54,439 --> 01:36:57,400 Speaker 1: do remember that. Um, what do you've seen that have 1933 01:36:57,720 --> 01:37:00,960 Speaker 1: changed in your industry and branding, him marketing, What are 1934 01:37:01,000 --> 01:37:04,960 Speaker 1: the big shifts over the past decade. Oh gosh, I 1935 01:37:04,960 --> 01:37:07,040 Speaker 1: don't want to say the death of creativity, but it's 1936 01:37:07,040 --> 01:37:09,680 Speaker 1: definitely revenge of the pocket pen protectors. And we've talked 1937 01:37:09,720 --> 01:37:13,480 Speaker 1: about Don Draper's dad. Created activity is not not a commodity, 1938 01:37:13,560 --> 01:37:16,959 Speaker 1: but you've had, You've had. It's more important to understand 1939 01:37:17,040 --> 01:37:19,600 Speaker 1: how to operate sales source and a database and CRM 1940 01:37:19,680 --> 01:37:22,000 Speaker 1: than to necessarily come up with the right copy or 1941 01:37:22,040 --> 01:37:26,000 Speaker 1: the most beautiful, inspiring creative ads. So it's moving more, 1942 01:37:26,160 --> 01:37:28,760 Speaker 1: much more towards zeros and ones than it is from tech. 1943 01:37:28,800 --> 01:37:33,000 Speaker 1: It's the guys who are cool and we're black are 1944 01:37:33,040 --> 01:37:36,560 Speaker 1: making less money, and it's it's it's the math and 1945 01:37:36,600 --> 01:37:39,160 Speaker 1: the chess club. And now at the same time, we 1946 01:37:39,200 --> 01:37:41,559 Speaker 1: have to produce people who understand have the maturity and 1947 01:37:41,600 --> 01:37:43,640 Speaker 1: management skills and the EQ and played with the right 1948 01:37:43,680 --> 01:37:46,280 Speaker 1: toys to manage those people, and it's hard to find 1949 01:37:46,280 --> 01:37:48,920 Speaker 1: them in the same body. But it's definitely headed towards technology. 1950 01:37:48,920 --> 01:37:51,280 Speaker 1: In the world of marketing and branding, we talked about 1951 01:37:51,320 --> 01:37:53,880 Speaker 1: brandings moved from pre purchased to purchase. Now it's moving 1952 01:37:53,880 --> 01:37:58,720 Speaker 1: to post purchase CRM, contextual retargeting, taking behavioral data. Um. 1953 01:37:58,760 --> 01:38:02,519 Speaker 1: But it definitely seems like tech is just eating eating 1954 01:38:02,520 --> 01:38:05,000 Speaker 1: the world. So I'm not a technologist, but I'd like 1955 01:38:05,040 --> 01:38:06,679 Speaker 1: to think I know enough about it to be dangerous. 1956 01:38:06,680 --> 01:38:08,840 Speaker 1: And I try and stay on top of stuff. So 1957 01:38:08,880 --> 01:38:11,479 Speaker 1: if you're you know, if you're starting your career, are 1958 01:38:11,560 --> 01:38:13,920 Speaker 1: guys like us, right, we're trying to stay relevant. You 1959 01:38:14,000 --> 01:38:15,960 Speaker 1: gotta be on Facebook, you gotta figure it out. You 1960 01:38:16,040 --> 01:38:18,360 Speaker 1: gotta go on Pinterest and start pinning stuff so you 1961 01:38:18,360 --> 01:38:20,080 Speaker 1: at least get it, or at least get it enough 1962 01:38:20,120 --> 01:38:23,639 Speaker 1: to hate it. Right, And because most people just they 1963 01:38:23,760 --> 01:38:27,080 Speaker 1: dismiss it. And when they dismissed, when they're dismissive something, 1964 01:38:27,160 --> 01:38:29,320 Speaker 1: or when guys our age are dismissive of stuff, it's 1965 01:38:29,360 --> 01:38:31,120 Speaker 1: basically their way of saying I don't get it, and 1966 01:38:31,160 --> 01:38:33,000 Speaker 1: scares the hell out of it. The comment I always 1967 01:38:33,120 --> 01:38:34,760 Speaker 1: get is like, I don't understand what do you do 1968 01:38:34,840 --> 01:38:37,840 Speaker 1: with Twitter? And my answer is always, hey, here's here's 1969 01:38:37,840 --> 01:38:41,160 Speaker 1: what you do. Find five hundred of the smartest people 1970 01:38:40,840 --> 01:38:44,720 Speaker 1: in areas that you're really interested in. I don't care 1971 01:38:44,720 --> 01:38:48,040 Speaker 1: if it's beer burgers in baseball, but follow those people 1972 01:38:48,120 --> 01:38:50,320 Speaker 1: and you will know more about stuff that you like 1973 01:38:50,800 --> 01:38:54,160 Speaker 1: and have access to more interesting stuff. It's like hiring 1974 01:38:54,360 --> 01:38:57,599 Speaker 1: a full time men's a research team. What could be 1975 01:38:57,600 --> 01:39:01,400 Speaker 1: bad about that? And the final question, My final question, 1976 01:39:01,439 --> 01:39:04,040 Speaker 1: I asked all my guests, what do you know about 1977 01:39:04,080 --> 01:39:07,000 Speaker 1: your field that you wished today that you wish you 1978 01:39:07,040 --> 01:39:10,640 Speaker 1: knew when you were starting out? What do I know 1979 01:39:10,680 --> 01:39:12,120 Speaker 1: about my field today that I wish to know I 1980 01:39:12,240 --> 01:39:14,599 Speaker 1: started out, Um, I would have focused more on how 1981 01:39:14,640 --> 01:39:16,439 Speaker 1: to learn how to build stuff. I would to learn 1982 01:39:16,479 --> 01:39:19,280 Speaker 1: how to code. I would have learned more about industrial 1983 01:39:19,680 --> 01:39:22,639 Speaker 1: engineering and design. I think the world the future belongs 1984 01:39:22,680 --> 01:39:25,160 Speaker 1: to the builders, not the browners. The people who know 1985 01:39:25,200 --> 01:39:27,600 Speaker 1: how to actually make stuff. That can be making a website, 1986 01:39:28,200 --> 01:39:30,840 Speaker 1: that can be figuring out how to edit radio show, 1987 01:39:31,360 --> 01:39:33,880 Speaker 1: but the people who build things. As opposed to my 1988 01:39:34,000 --> 01:39:37,200 Speaker 1: focus was always on the intangible associations and creating the theory. 1989 01:39:37,280 --> 01:39:39,960 Speaker 1: I wish I'd learned more about how to build things. 1990 01:39:40,000 --> 01:39:43,280 Speaker 1: So we've been speaking with Scott Galloway, professor at n 1991 01:39:43,400 --> 01:39:46,960 Speaker 1: y U Stern and founder of L two Digital. UM. 1992 01:39:47,200 --> 01:39:49,360 Speaker 1: Let's once again tell people where they can find you 1993 01:39:49,400 --> 01:39:54,040 Speaker 1: on Twitter, proft Galloway, proft Galloway and your website dot 1994 01:39:54,040 --> 01:39:56,320 Speaker 1: com L two ink dot com. Scott, thank you so 1995 01:39:56,439 --> 01:40:00,760 Speaker 1: much than this was. This was really fascinating. I think 1996 01:40:00,760 --> 01:40:04,640 Speaker 1: people really can enjoy this. If you enjoyed this conversation, 1997 01:40:04,680 --> 01:40:07,880 Speaker 1: and I can't imagine anybody did not look an inch 1998 01:40:08,040 --> 01:40:11,320 Speaker 1: upward or down on iTunes and you'll see the other 1999 01:40:11,439 --> 01:40:16,120 Speaker 1: forty seven or so uh such um conversations. Be sure 2000 01:40:16,120 --> 01:40:18,559 Speaker 1: and check out my daily column on Bloomberg View dot 2001 01:40:18,560 --> 01:40:23,120 Speaker 1: com and on Twitter follow me at Hults. I'm Barry Rihults. 2002 01:40:23,160 --> 01:40:26,040 Speaker 1: You're listening to Masters in Business on Bloomberg Radio.