Pivot · Oct 18, 2019

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Automatic transcript of the end of the episode, from 22:35. Speakers are labeled by software and may contain errors. Highlighted passages are Scott’s predictions.

Kara Swisher · 22:35 Very wealthy people. And they understood what was happening with him. And I think that they... I don't think they understood the extent of it, or or how how bad it was. And maybe some of them did, by the way. Yeah. Then that's the bigger worry, I think, is is more revelations coming out. But I do think, if you're the world's... What... Among the world's are just people you have to be careful about the company you keep, or else it's gonna come back. And it's amazing that nobody vetted this or gave him any kind of advice of not... Scott Galloway · 23:02 Because we don't know who you're Kara Swisher · 23:03 gonna be in a room with. Scott Galloway · 23:04 Or or we as a society need to get out of this shaming culture where we look for reasons to embarrass rich and famous people. Okay was on his jet. Who gives a fuck? Mean, that's okay. Kara Swisher · 23:13 Don't know. Think it Scott Galloway · 23:13 should I don't know better what all of you have done. And if you offer me a ride on your jet somewhere, I'm probably gonna say yes and I'm not gonna vet you. Mean, it's just kind of enough Nobody. Nobody. It's it's this shaming industrial Kara Swisher · 23:24 complex I that we 90 think the leaders have to like show a little bit more judgment. It shows really bad judgment. I think having that dinner... Joey, thought that was fine to take that money and hide it from them? That one you didn't think. Scott Galloway · 23:38 Well, okay, so... Kara Swisher · 23:39 This is at MIT. Scott Galloway · 23:40 The academic industrial complex, the relationship between the quality of a university or the rankings is directly correlated to its endowment. They're under constant pressure to raise money. Kara Swisher · 23:51 Alright. Scott Galloway · 23:51 So, if someone wants to give money, I'll go further than that. Cash his check. Should his heirs... Who's better off with Jeffrey Epstein's money? His heirs or MIT? Is it bad Kara Swisher · 24:02 to I'm cash his gonna draw a hard line at pedophiles. Scott Galloway · 24:05 Okay. Fair enough. Kara Swisher · 24:06 I'm gonna do that and I feel And good about my I think they went to great lengths to hide it. That's... The cover And therefore knew Scott Galloway · 24:14 The cover up There was a is what got them in trouble. Kara Swisher · 24:16 I think not just that, they knew it was a problem. So why in that meeting, I would like to have been in that meeting where nobody said... Scott Galloway · 24:22 This is a problem. Kara Swisher · 24:23 Maybe not so much with the pedophile money. Maybe Fair we can go find another rich person. Scott Galloway · 24:28 And that's the link to Gates, right? Kara Swisher · 24:30 Well, somehow, there's a whole group of people that are still being sorted out. But there there was a guy named Boris Nikolik who was his science They all went to TED at some point. TED is somehow involved. There's all kinds of different places. There's a whole... If you go... If you live in this world and and I have been to a lot of these events. Yep. They they have these dinners and then Gates is at one table talking his head off and and and they they sort of do these sort of smart people dinners. And so they bring in a few academics, they bring in some science people, and then they they essentially entertain the rich people. That's really what it is. Scott Galloway · 25:05 But your thesis is that if you're a billionaire, the onus is on you to do more diligence around the people in the room than you or me. Kara Swisher · 25:12 I think I'd go, I really shouldn't be on the planes of someone convicted of problem Right. Sex offenses. If... And I would have investigated him. And especially with Epstein, because Epstein was well known. It was young girl, young women. Yep. And I think you're build... You're the richest guy in the world. You should have like real good detectives. That's I think. Scott Galloway · 25:32 That's fair. Kara Swisher · 25:33 I I already have really good detectives at my at my level. Okay. Quick break time. We'll be back with more live pivot in New York City. [Ad break] Scott Galloway · 26:35 Alright. Enough with the ads. It's time for pivot. Kara Swisher · 26:39 Alright. So wins and fails this week. What are your wins and fails? We're gonna get to predictions. My prediction last week was Scott Galloway · 26:45 This is turning into soda, but my win is National Mental Health Day or World Mental Health Yeah. I think, I like this notion of unlocks and that is what are easy things we can stop doing to unlock happiness or prosperity. And I think that the stigma of mental illness is something that we need to address. The notion that we had, I was really moved by a tweet, it's public so we can talk about it, but Jason Delray talked about how therapy has helped him after the death of his mom. But I think even just people talking, especially men talking about the struggles, I've had struggles, such that it's something we can open up about. And by the way, one of the best therapies for this is just talking about it. So I think this is a fantastic unlock, that we're getting more comfortable with the struggles we all have. And I think it's something that can assuage and relieve a lot of pain and suffering. And I like where we're headed on this. That really handsome men like Jason and myself are comfortable. It's not that funny. Kara Swisher · 27:54 Is, because Jason is handsome, you're right. Scott Galloway · 27:55 My win is World Mental Health Day. Really? On October Very the tenth. How about yours Kara, what's your win? Kara Swisher · 28:05 Oh, I was gonna do something self aggrandizing, that I predicted Michael Bloomberg would think about entering the presidential race, and indeed. Scott Galloway · 28:12 You predicted that last week. Kara Swisher · 28:14 Because we need another person, 70 candidate. Scott Galloway · 28:17 We need another 77 year old. Right. Right. There does seem to be an opportunity. Kara Swisher · 28:21 Right. My fail is Facebook and Libra partners who are who are abandoning ship rather quickly, which we said was gonna happen. Scott Galloway · 28:28 Libra dead on arrival. Who would have known the centralization of Mastercard with the culture of Uber and the corruption of Facebook and it's not working? Who would have thunk it? Who would have thunk it? Right? I know the three steps to tyranny are to take control of the media, then you get control of the money and then you get control of the military. Yeah. And Facebook's done such a good job of media, let's get control of our money. Kara Swisher · 28:51 I don't think they're doing an army. Scott Galloway · 28:54 Well, yeah. But the first two gets you the third. Kara Swisher · 28:56 I see. Okay. Fine. But in any case, Libra looks bad. And I love David Marcus's thing. He's like, this is just a temporary setback. We have big announcements to come whenever I Scott Galloway · 29:07 mean, that guy can really... Kara Swisher · 29:08 I wrote him, I go, well played but it's not gonna work. Scott Galloway · 29:11 Talk about spinning chicken shit into chicken salad. That thing... The only thing that is more ridiculous is them trying to convince you to put a camera in your house from a guy I don't who puts tape over his own camera. Kara Swisher · 29:22 Yep. Right? Yep. That's bad. Scott Galloway · 29:23 The guy I wish Kara Swisher · 29:24 Portal is new. Portal is the new portal. Scott Galloway · 29:26 Yeah. That's that's over. But my fail my fail is Facebook, in my opinion, abusing Kara Swisher · 29:31 I'm being mean to Facebook. Scott Galloway · 29:31 Agencies and this whole miscalculation of metrics, metrics and then a $40,000,000 fine. I mean it's just... Anyways. Alright. Facebook. Facebook, my fail. Two Kara Swisher · 29:41 more things before we Yes. Any exciting start ups you see on the horizon? Anything that just is like that is cool. Scott Galloway · 29:49 Ton of startups? Yeah. Yeah. I'm inspired. Kara Swisher · 29:52 What inspires you? Scott Galloway · 29:54 There's a ton of them. I think the guys at Morning Brew and The Hustle do a great job making email cool again. It's one of the few mediums that hasn't been monopolized by a monopoly and you can actually figure out a way to build a business, which is email. There's no monopoly in email, so it's a medium. I mean, that's what happens. When monopolies own a medium, you can't start. Startups in that medium, whether it's video or social or search can't survive, but no one fortunately has monopolized. Email, there's a company started by some Stern grads called Pepper, which is direct to consumer undergarments. Rally Roads is a great startup that mutualizes classic cars as an asset class. I'm a bigger startup. I'm pulling for Rent the Runway. I think they kind of define that category. I love that they handled their crisis and they were very transparent about it. There's a ton of inspiring start ups. Unfortunately, there aren't enough, but I see, yeah, think there's ton of inspiring Kara Swisher · 30:48 interesting Do we people see this as a period of time when SoftBank is pulling back? All this money of startups coming back? Because startups have sort of been on the ropes a little bit. Scott Galloway · 30:57 Yeah, but SoftBank right now doesn't look to be pulling back. I mean, where we are, the market's gonna correct SoftBank because we're in this very strange situation where 76% of companies filing for IPOs in 2019 were not public. And in 2009, one in 10 were not public or nine in 10, excuse me, were not profitable or nine in 10. So it's very easy. By the way, the last time we hit this ratio of non profitable companies, three and four filing for public offerings, when was that? What year was that? I'll give you one guess. Kara Swisher · 31:29 2001. Scott Galloway · 31:30 1999. Kara Swisher · 31:31 Right right before you. Scott Galloway · 31:32 So it's very difficult to time the markets, but the notion that it's not different this time, oh my god. History may not repeat itself, but it is rhyming like you cannot believe right now. Right. It was literally about 75% in in 1999 of companies filing aren't profitable. We've hit that number again. For the first time since 1999, private equity valuations are greater as multiple of earnings in the private market than companies are in the public markets. We are literally breaching, if you will, the same dams that happened Kara Swisher · 32:04 Since in '19 since these '90 are just out of line. These valuations are ridiculous. But I don't see innovation in advertising. Don't see much innovation. I don't see any new innovation because of these two big companies sort of controlling anything. I don't see a lot of innovation consumer, anything really fascinating. Scott Galloway · 32:22 Some DTX or some fun things. Sort of. Of. It's a Kara Swisher · 32:25 lot more innovation in commerce. There's little more innovation in commerce. Scott Galloway · 32:29 What startups do you like? Kara Swisher · 32:31 I'm looking at things like ag tech. Like things you... Like cow sensors and and things... What? You put things on cows. You put like little... Like Fitbits on cows. They put Fitbits on cows and then you find out what they're hanging doing and there's also facial recognition for cows. I think that's really interesting like where they are in the field, how much they ate, that kind of stuff. Think it's just interesting. I think it's like nobody's doing it. So I think it's really... I do. Ag tech is a big thing. I'm just telling you, like how we do how we do crops, how we figure out what to plant, what's You Scott Galloway · 33:04 should be a partner at SoftBank. You sound like you're right in there. Kara Swisher · 33:07 I'm just telling you, I'm fascinated by this stuff. Yeah. Cow tech. Scott Galloway · 33:11 Cow tech. Kara Swisher · 33:12 I'm just telling you, cow tech. You just sit, you wait and see how we're gonna figure out food and things. And the next, that is a big area. Scott Galloway · 33:18 There is. Kara Swisher · 33:18 Climate change tech. I think that is a thing that I would, I'm gonna spend a lot of time being focused on. Climate change. And I've said this over and over again, the next... The world's first trillionaire will be the person who solves our climate change, which is so... This week alone, like in in in That is a in in in Tokyo, and then just the news that the Trump administration's gonna start logging another forest that we haven't done forever. Mean, it's just... There's so much opportunity for someone to come in here and find solutions to these problems. Scott Galloway · 33:48 Yeah, the problem is the solutions are boring and don't create trillions. We planted another trillion trees... Kara Swisher · 33:54 That's crazy. Just feel and then space tech. I think space tech is really interesting. I do. I'm very... It's a longer term thing. Same thing with urban mobility and you don't agree with transportation but you're completely wrong. Scott Galloway · 34:06 Yep. Kara Swisher · 34:07 I just think that kind of stuff, the big thoughts. I'm a big thinker now, Scott. Enormous. You're mired in the tiny Scott Galloway · 34:13 No, no. A dwarf — Predictions segment begins — Kara Swisher · 34:14 among My the prediction, we will have massive layoffs very soon. Scott Galloway · 34:19 Well, that's not a prediction. Are It's already happening. Kara Swisher · 34:22 Alright. Okay. Scott Galloway · 34:23 Yeah. So, I'm doubling down. Somebody leaked today, either JP Morgan or Adam Neumann or somebody at WeWork is trying to position to get a better deal from SoftBank in terms of equity terms. Kara Swisher · 34:36 Okay. Scott Galloway · 34:36 But I just don't see how this thing doesn't involve a bankruptcy. I don't see how you cut cost cut cost this fast. And the other prediction is there's just gonna be such a reevaluation of venture growth. I mean, data... SoftBank literally violated every basic norm of of good venture financing. One is distance from where you invest is inversely correlated to returns. So if you're an investor and you live in Chicago, you want to invest in Illinois. It's literally the drive test. And if you look at their investments, they're literally the returns are inversely correlated to distance. The further they got away from Tokyo, they made in a ton of money in Alibaba. They got they got smoked when they went nine time zones to New York. — Predictions segment ends — Kara Swisher · 35:24 Anyway, thank you so much for being here. We've gotta get out. We will be back. We will be back with pivot live twice a week very soon. I think super soon. And then we were go... We're going to Stanford University next week for a live pivot. Neither of us got into Stanford, so fuck them. We're coming back. Scott Galloway · 35:45 Go bears. Kara Swisher · 35:45 Go bears. And we expect swag from them, and we are gonna show them that we that we would have been good Stanford people. Scott Galloway · 35:53 Triple the number of applicants, quintupled their endowment, but haven't increased their freshman seats. One seat. Not a good for society. Go cardinals. Kara Swisher · 36:00 Alright. Anyway, thank you very much. This is live pivot from New York. This is Scott Galloway, Scott Galloway · 36:05 and I am Caren Swisher. Kara Swisher · 36:06 Thank you. Thank you. That's our show. Peter Kafka. Every week, Peter interviews the smartest people in tech, media, and the entertainment field to find out what happens when those things collide. Subscribe to Recode Media for free right now in Apple Podcasts or your favorite podcast app. Anyway, today's show was produced by Rebecca Sinanis and Eric Johnson. Eric Anderson is Pivot's executive producer. Thanks also to Rebecca Castro, Drew Burrows, Nishat Kerwa. Make sure you subscribe to the show on Apple Podcasts. If you like this week's episode, leave us a review. Thanks for listening. Full apologies for Scott singing. We'll be back next week for another breakdown of all things tech and business. Scott Galloway · 37:17 Donna, on. Come on. Kara Swisher · 37:21 Someone get him out of back, get in here.