Speaker 1: So in our world, there are folks that don't need
Speaker 1: any introduction. That really include Scott Galloway, author of many books,
Speaker 1: The for the Algebra of Happiness, most recently Post Corona.
Speaker 1: He's Professor of Marketing at n y U Stern School
Speaker 1: of Business. He has founded several companies, and he's host
Speaker 1: of the upcoming The prop g Show right here on
Speaker 1: Bloomberg Quicktake. Delighted to have him back with us. Scott
Speaker 1: Galloway on the phone in Florida. How are you, um, great?
Speaker 1: Thanks for setting out him. Possibly no pressure there, Mr Galloway,
Speaker 1: I'm not worried, so so listen, we want to hit
Speaker 1: you on a couple of things. First of all, um,
Speaker 1: the Facebook news today, It kind of I think we
Speaker 1: thought there was going to be a solution of Trump
Speaker 1: on or not the platform, and he's banned, but the
Speaker 1: company still has to make a decision down the road
Speaker 1: about ultimately long term. Why do you make of this
Speaker 1: news and how should social be treating people like Donald
Speaker 1: Trump and others? Well, they should be. Anyone who is
Speaker 1: responsible for us sort of misinformation around a specific domain,
Speaker 1: in this case election interference should be banned from the platform.
Speaker 1: So you know this is this is Facebook's attempt to
Speaker 1: abdicate responsibility. This oversight board. I think it's got the
Speaker 1: charm of the legal of Nations, with the effectiveness of
Speaker 1: the United Nations. I think it's a total abdication of responsibility.
Speaker 1: And what they said was we're going to hurry up
Speaker 1: and do nothing. We're going to make them. It's kind
Speaker 1: of the mother of all non decisions. I'm glad he's
Speaker 1: not back on the platform. But it's typical, It's typical Facebook.
Speaker 1: It's it's kind of just more delay an obfuscation. Well,
Speaker 1: how how has it been so easy for Twitter and
Speaker 1: Snap to make their decisions about President Trump, but it's
Speaker 1: been so tortured for Facebook and for Google's YouTube. You know,
Speaker 1: That's that's a really interesting question. I think I think
Speaker 1: Google and uh, Facebook, to a certain extent, are still
Speaker 1: trying to hold onto this myth that they're just a platform.
Speaker 1: I think that they are. They aren't niche kinds. What's
Speaker 1: interesting is that there's definitely sort of a purity trade.
Speaker 1: And what do I mean by that? If you look
Speaker 1: at pinterestome Snap, they've outperformed their peer group and they're
Speaker 1: largely seen as having less noxious, toxic content, and Twitter
Speaker 1: since kicking Trump off the platform had sort of the
Speaker 1: strongest run in several years. So it appears there's sort
Speaker 1: of an immunity trade or a purity trade. I think
Speaker 1: Facebook and Google still want to try and cling to
Speaker 1: the notion that we want all content, all the time, anyone,
Speaker 1: regardless of the damage it does, and they're still kind
Speaker 1: of holding to that kind of zeitgeist there. Um, they
Speaker 1: don't see themselves as niche players. I think they're they're more,
Speaker 1: they're they're less less focused on pleasing anyone audience just
Speaker 1: don't want to just they'll be mildly upsetting to everybody,
Speaker 1: you know. Sarah Fryar Bloomberg News putting out a story
Speaker 1: saying that maybe Facebook has to provide more options for
Speaker 1: Donald Trump types, saying that there should be a way
Speaker 1: for Donald Trump, his thoughts and other Trump figures to
Speaker 1: exist on social media without kind of all the amplification
Speaker 1: that many of these platforms provided. These are sours words
Speaker 1: to be fair, Um, do you agree with that that
Speaker 1: there needs to be another option if we believe in
Speaker 1: freedom of speech? And I understand your point about misinformation,
Speaker 1: but how do we treat this? Scott? Yeah, that's a
Speaker 1: tough problem. But I think we can inflate freedom of
Speaker 1: speech with freedom of reach, and that is the conversation
Speaker 1: around anti vac is a worth while conversation we should have.
Speaker 1: There are people who want to have a conversation around
Speaker 1: white supremacy, and those conversations should be had. The question
Speaker 1: is whether for profit entities should have algorithms that purposely
Speaker 1: seek out that type of controversial, very upsetting content and
Speaker 1: elevate it exponentially beyond what it would get organically because
Speaker 1: it is so noxious, because it is so heinous, it
Speaker 1: creates enragement. An enragement equals engagement, which equals more Nissan ads,
Speaker 1: which means that Facebook gets wealthier. So the question is
Speaker 1: should we have this miss models that purposely linked profits
Speaker 1: to the enragement, division and polarization of our society. Should
Speaker 1: there be some sort of tax? But there's notions somehow
Speaker 1: that everybody deserves voice, These firms have, these individuals have
Speaker 1: massive voice. The question is should we the most profitable
Speaker 1: companies in the world be engaged in a business model
Speaker 1: with the end up being handmates This edition or where
Speaker 1: a capital police officer is bludgeon to death with a
Speaker 1: fire extinguisher because these algorithms are amplifying the most controversial content.
Speaker 1: So in our world there are folks that don't need
Speaker 1: any introduction. That really includes Scott Galloway, author of many books,
Speaker 1: the for the Algebra of Happiness, most recently Post Corona.
Speaker 1: He's Professor of Marketing at n y U s during
Speaker 1: School of Business. He has founded several companies, and he's
Speaker 1: host of the upcoming The prop g Show. Right here
Speaker 1: on Bloomberg Quicktake. Delighted to have him back with us.
Speaker 1: Scott Galloway on the phone in Florida. Scott Galloway, Um,
Speaker 1: is Apple taking too much? Does Does Epic have a
Speaker 1: point here? Because at the end of the day, you know,
Speaker 1: Apple's argument is, hey, we are giving you access to
Speaker 1: the customers, and we're making this a safe place for
Speaker 1: our customers to to access your apps. Yeah. I think
Speaker 1: that's the argument. That they've made a staggering investment to
Speaker 1: ensure safety, and they've made a huge investment in laying
Speaker 1: down the rails, and they should be able to charge
Speaker 1: what they want to access those rails. The question is
Speaker 1: if you start seeing everything that's being transported on those
Speaker 1: rails and you see that certain goods are going to
Speaker 1: a certain area and you decide wow, based on that. Inside,
Speaker 1: we'd like to start a competitive business Apple Music, and
Speaker 1: we're going to tax our competitor and maybe promote our
Speaker 1: own products. Are you, in fact in a monopoly position?
Speaker 1: The app store really is the regulatory achilles heel. I
Speaker 1: think they're gonna lose on this one. I would have
Speaker 1: gone further than this, but this is it's very difficult
Speaker 1: to argue that they're not imposing or not taking advantage
Speaker 1: of the fact they own the rails to compete with
Speaker 1: the with the other products that access those rails. So
Speaker 1: it's in fact there's monopoly power here at scale, and
Speaker 1: an argument that they need to have one player and
Speaker 1: that size is good for everybody. Then they're a utility
Speaker 1: and their prices should be regulated. I think they're all
Speaker 1: wet on this one, all right, playing a little bit
Speaker 1: of Devil's Advocate, And maybe it's not apples to Apple, Scott,
Speaker 1: But what about a Walmart that you know how it
Speaker 1: squeezes its suppliers or an Amazon where it gets a
Speaker 1: piece of everything that's sold on its platform. Um, I
Speaker 1: know it's not, like I said, maybe an equal comparison
Speaker 1: but is it that much different? Yeah, I think it is, Carrol,
Speaker 1: because I think Walmart is about eight or nine percent
Speaker 1: of retail and the app store on iOS is about
Speaker 1: of all dollar volume that goes through apps. So if
Speaker 1: you want to be a player in the app economy,
Speaker 1: there really is only one place. An iOS is where
Speaker 1: the majority of people go to actually spend money on apps.
Speaker 1: So if Walmart gets market share of all retail, then
Speaker 1: it's apples to apples, all right, So listen, one thing
Speaker 1: you know. I wanted to ask you. Tim and I
Speaker 1: both wanted to We were thinking about coming off of
Speaker 1: Warren Buffett and Brickshire Hathaway's annual meeting this past weekend,
Speaker 1: and Warren Buffett put up a slide. It was the
Speaker 1: top twenty market cap global companies in nine. It was
Speaker 1: named like Toyota, General Motors x on, IBM, six U
Speaker 1: S companies fourteen from other countries. He pointed out Scott
Speaker 1: that none of the twenty are on today's list of
Speaker 1: the top twenty market cap companies, and he says it's
Speaker 1: a reminder of extraordinary things that happen in nine. Not
Speaker 1: the Dark Age is not a backward time. So I'm curious,
Speaker 1: how do you think about today's top ME market cap companies,
Speaker 1: whether it's Apple, Google, Amazon, you wrote about them in
Speaker 1: the four Should we think in twenty years from now
Speaker 1: or I don't know, ten years, they're not going to
Speaker 1: be the juggernauts that they are. Well, look, a basic
Speaker 1: truism is that everything everywhere eventually ends, and at some
Speaker 1: point these companies will be de thrilled. The question is
Speaker 1: what kind of damage do they do between here and
Speaker 1: now by not returning to our proud legacy of anti trust.
Speaker 1: And that is a T and T eventually would have
Speaker 1: been unseated, but we went in and broke it up
Speaker 1: into seven companies and we on unleash treme disinnovation, cell data, Fiber.
Speaker 1: Each of those seven companies ended up being worth more
Speaker 1: than the original within ten years. So my argument is sure,
Speaker 1: at some point everyone is dethroned. But between now and then,
Speaker 1: is there an opportunity to oxygen a the economy, to
Speaker 1: increase job growth, increased taxation, increase M and A by
Speaker 1: doing what we have always done, and that is when
Speaker 1: a company becomes an invasive species, we go in and
Speaker 1: we break it up. It's overdue. Anti trust is absolutely
Speaker 1: overdue here which companies need to be broken up right now?
Speaker 1: The answer is yes, but like I mean, well, except
Speaker 1: for Apple. Apple would be hard to break up because
Speaker 1: elegant anti trust means you unlock value. It's not a punishment,
Speaker 1: it's a liberation for all stakeholders. All stakeholders except the
Speaker 1: CEO who wants to sit on the iron throne of
Speaker 1: Olive Estro. It's not just the king of the North.
Speaker 1: Apple would be tough because who would get rights to
Speaker 1: the brand? So Apple ends up You regulate the app store.
Speaker 1: But Amazon gets broken up, as does Facebook and Google. Wow.
Speaker 1: And by the way, yeah, I owned shares and all
Speaker 1: those companies except Facebook, and we're all going to make
Speaker 1: money on the day of their breakups. Talk about that though,
Speaker 1: Is it because you know a w S by itself
Speaker 1: is worth more than a w S as part of Amazon?
Speaker 1: That's that's exactly the correct question. In two the most
Speaker 1: valuable company in the world will be an AWS. It
Speaker 1: was fun prophylactically, the fastest growing, largest player and the
Speaker 1: most profitable, most fastest growing sector in history. The cloud
Speaker 1: will be the stock that every hedge fund manager, every
Speaker 1: girl who gets her bombits that gets as a gift.
Speaker 1: Everyone will own a w S stock. Most valuable company
Speaker 1: in the world in four years is AWS. It'll be
Speaker 1: an n f T though right it's not going to
Speaker 1: be an actual certificate. We're back at it, Carroll. I know,
Speaker 1: I know, well, you know you wrote about these four companies.
Speaker 1: I mean, who are the companies who are there? What's
Speaker 1: the technologies that you think are going to be kind
Speaker 1: of the replacement for the Apples and Google? Today you
Speaker 1: talked about the cloud. I get that. Are there other
Speaker 1: things on your radar that you're thinking Listen, we're just
Speaker 1: not talking about it enough. But these are the ones
Speaker 1: that are going to be the big market gap companies
Speaker 1: of the future. There's a lot of incredible companies. The
Speaker 1: incredible technology is. The unfortunate thing is it's usually the
Speaker 1: same players that we're The biggest unlock coming out of
Speaker 1: the pandemic is we might have an opportunity. Virtual visits
Speaker 1: to doctors went from less than one percent. There's an
Speaker 1: incredible opportunity to start pushing out primary healthcare to hundreds
Speaker 1: of millions Americans and take healthcare from the disease driven,
Speaker 1: defensive industry to a defensive, health driven industry. That's a
Speaker 1: good news, it's going to create trillions of dollars in value.
Speaker 1: The bad news, the company that will be the fastest
Speaker 1: growing healthcare company in the world will be Amazon. The
Speaker 1: voice is the most exciting technology. Who dominates that? Amazon?
Speaker 1: The cloud? Who dominates that? Microsoft? Amazon? And oh y
Speaker 1: a Google. So there's some incredible companies just off the list.
Speaker 1: The shopifies the rope, who's the salesforces the Ali baba.
Speaker 1: But these companies continue to outpace all the rest. A
Speaker 1: lot of big numbers doesn't seem to apply to these guys.
Speaker 1: I don't know if we've watched Apple's earning of fifty
Speaker 1: plus percent of the revenues I phone up sixty plus
Speaker 1: percent sales in China, when they increase their margins and
Speaker 1: their services revenue, it's just it's just staggering. Hey, Scott,
Speaker 1: I want to end just with a personal question to you.
Speaker 1: So I know it's something that you think about a lot.
Speaker 1: After I read the Algebra Happiness. You talked about it
Speaker 1: with Jacqueline Novograts on your podcast The Prop Show a
Speaker 1: couple of weeks ago, um about what it means to
Speaker 1: be a good parent. You asked her that question, and
Speaker 1: I know it's something you think a lot about. But
Speaker 1: as I'm raising my young son, talk to me about
Speaker 1: what you've learned raising a couple of kids. And we
Speaker 1: have about asked you and you got, oh gosh, we're
Speaker 1: gonna need a bigger bout. So first off, if you
Speaker 1: if you drove by my house and you heard the screaming,
Speaker 1: you might not want to ask you that question. Look,
Speaker 1: I think what I've the takeaway I've got coming out
Speaker 1: of this pandemic as a dad is that my I
Speaker 1: always saw my role is to discipline and to teach
Speaker 1: and to backup mom and to set boundaries. And what
Speaker 1: I've come to the conclusion of is that what I
Speaker 1: need to do more of is just be someone who
Speaker 1: loves them and demonstrates and cements that every day we're
Speaker 1: going to leave it on that. That's a great, great
Speaker 1: way to finish up. Hey, Scott, thank you so much,
Speaker 1: take care of yourself and and look forward to uh
Speaker 1: talking to you again. And I always appreciate all the
Speaker 1: time you give us. Scott Galloway, Professor of Marketing, ny
Speaker 1: uster In School of Business, author of many books check
Speaker 1: them all out, and uh he's doing things in education
Speaker 1: too with his Section four companies so highly recommend you
Speaker 1: Google that as well.