Pivot · Sep 6, 2019

Is Uber super f*cked? Let’s ask “Super Pumped” author Mike Isaac

Automatic transcript of the end of the episode, from 27:05. Speakers are labeled by software and may contain errors. Highlighted passages are Scott’s predictions.

Scott Galloway · 27:05 And created all the value for themselves. And that the suckers are the are the actual endowments and institutions and unions and pension funds that have been hyped up on the stock who... Because so many people have made so much money in Facebook and Google stock, think the same thing is gonna happen. And so, you know, the kind of the the venture industrial complex has decided to capture all those gains as long as they can foist this shit. And let's be clear, it is shit on the marketplace. Case in point, the the company that Mike wrote that book about. I mean, Uber, I don't... Mike, I'm curious. My guess or no, I think Uber is literally going... Is gonna lose 80% of its value in the next twenty four months. Your turn. Kara Swisher · 27:43 Oof. Oof. Your turn. Guest · 27:44 Oh my god. Kara Swisher · 27:45 Mike, comment. Guest · 27:49 I don't know if I would say 80%. I do think that they're gonna... They they are in for a hard time. Look. They're they're they're... Dara's sort of come in and supposed to have this reputation of being the the guy who's gonna whip it into shape. And I think culturally, he has. I think he's sort of brought a lot of the internal dynamics around, and that's that's a good thing for them. But I think financially, it's just... It's a brutal business to be in, and it's gonna be a brutal business for the the near future. So I don't think... It's it's hard for me to say that, you know, the bears are gonna just suddenly change their minds in the next year or so because it's Kara Swisher · 28:25 Thing is people do like it. I mean They're being subsidized. Yeah. It's it's product, people. Like, it may not be a economic product. Alright. So your fail, Mike? Guest · 28:33 I I hope you guys didn't talk about this last week before, but the Twitter... Jack's account getting hacked. Kara Swisher · 28:39 We did a little bit, but go right ahead. I just cover that. Guest · 28:41 Please. Here's the thing. Please. It was Please. Kara Swisher · 28:44 The reason it I am down for Guest · 28:47 so funny and sort of ironic is because they used a method from a company that they acquired to grow in low latency regions throughout the world. So, like, if you just do texting, SMS texting as you're Kara Swisher · 29:03 key to do on Twitter. Guest · 29:04 Right. Totally. And that's that's... So so, like, imagine if you're going to push your product into developing regions and and, you know, they don't have high speed connectivity or whatever, that was like a indispensable tool for their growth in a lot of ways. And then it ended up becoming the thing that took their CEO out. And now they just, I think yesterday, said that they have to actually disable the option because it's too dangerous for anyone. Kara Swisher · 29:28 Right. The the president's account can get hacked. Right? Because he uses his phone. Although, honestly, what would you... What would be the difference? You know? Alabama. It was under siege. Guest · 29:38 Oh my god. Kara Swisher · 29:38 Like, you really wouldn't know if it was different. It would be like, oh, this is way too logical. Guest · 29:42 At this point. Kara Swisher · 29:43 Yeah. Sharpie gate. So I can't believe either you didn't talk to Sharpie. I wanna I wanna talk to the Sharpie people. I can't believe they made him special Sharpies. That's what I wanna understand. They did. He talked about it. Oh my god. They made... He didn't like the color, so they made them all black with his signature on it. I just... Sharpie, you have a lot to answer for in terms of your Sharpie situation. Alright. Those are very good. So what do you think is gonna happen there? So... At Twitter. I'm Guest · 30:10 I'm, like, I'm really, like, worried about them. They just seem like they're stuck in the same place than they have three years ago. You know? And I think Jack had this sort of this... You know, a lot of a lot... There's a lot of credit when you're a founder coming back to a company or being in a company. You just get... Mean, know, this... You just get, like, credit of, like, I'm the founder. And I think, originally, when he came back, he was supposed to be this, you know, mythical guy who can fix Twitter, and they haven't really done Kara Swisher · 30:36 a lot. No. You know? Guest · 30:37 Yeah. And I wonder if that's just his method or if that's just the product and what it is or whatever. But Kara Swisher · 30:43 go to their healthy conversation meeting? Guest · 30:44 I did not. Kara Swisher · 30:45 Is that you? Yeah. Neither of us did. We would... They didn't invite us. Did you see that? They had a meeting where you could go watch them debate healthy conversations. I think someone bid at the New York Times, and I was like, really? We weren't invited. Mike and Cara weren't invited to this. Guest · 30:57 They're very cerebral in how they think through, like, policy, but it just doesn't seem to translate into action, which worries me. Kara Swisher · 31:03 Good point. All right. Those are very good wins and fails, and obviously, the Brexit thing. We'll talk about that next week, Scott, because it looks like it's Downton Abbey with bad haircuts. Anyway, let's dig into some listener mail before we get to predictions. Speaker · 31:16 Mhmm. Hi, Kara and Scott. This is Eric Ryback in Red Hook, New York. A clothing rental company I'd never heard of is buying Lord and Taylor. So I'm interested to know more about the clothing rental business. I assume there are some things people will rent, but other things people would still want to buy. I'm not talking about underwear, but for instance, everyday dresses you would still buy, but special dresses you might rent. Do I have that right? And how does that then integrate with owning a department store? Thank you. Kara Swisher · 31:48 Scott, our listeners are smarter than us. Do you understand that? Are you are you getting that sense? Scott Galloway · 31:53 You mean they're smart. Kara Swisher · 31:54 Okay. You you take this one. These rental companies, I think it's a... I've talked about this. I think it's a really big trend. A lot of millennials I know are renting everything, not just not just special occasion dresses and wedding stuff. I think it's a big trend, and we're about to interview, a lot of different people at CodeCommerce about this. One of these... One... It's one of the topics. What do you think of these fashion rental companies? I think people are willing to do this. Scott Galloway · 32:15 Yeah. This is a... I think it's a fascinating space, and it's arguably going to be one of the most disruptive forces in retail. Because if you think about department stores, you know, they've just gotten the crap kicked out of them. They're sort of in the eighth inning of their life, whether it's Macy's, Nordstrom, Kohl's, they're all off somewhere between 2070% if you loop in JCPenney's. The bottom line is I'm... No millennial will take an escalator to sharp... To shop. You can do a strategic strike into a Sephora and get you La Roche Posay in three to seven minutes. Anytime you step into a Sears or... Well, actually, there are no more Sears. But every time you step into a JCPenney's or Nordstrom, you're there for thirty minutes. It's just not how America wants to shop any longer. And then you combine that with sustainability. You combine that with young people don't mind wearing other people's clothes. You combine that with the fact that a 30 year old for the first time isn't making as much money as his or her parents were at 30, meaning they need to buy more with less. And you're looking... And then and then it looks as if projections are that rental or resale is gonna be a bigger business than fast fashion. So all you need to think about is the type of wealth that was created for fast fashion families in Europe, the second and third wealthiest families in Europe, and you think about the kind of wealth that's gonna be created in resale, and you're looking at massive disruption. Now what people are missing around this is it's too late. Department stores have already been disrupted. They're already dead. Maybe they don't know it yet, but they're pretty much already dead. Who it's really gonna disrupt is specialty retail. Because if you have a huge explosion in the amount of clothes being getting useful new life or being recycled, it's gonna put huge pressure on the initial or the first time sales organization. And the majority of specialty retail apparel is from specialty retail and the number of the number of leases held by... Or the lease space or the square footage space in malls from specialty retailers and apparel is collapsing as evidence of that. So great question, but disruption is on its way at the hands of resale, but the big losers are gonna be specialty retail. They're about to get their turn at the woodshed. Kara Swisher · 34:19 Specialty retail. With you. I think people... I think young people are very willing the way they're willing to do Uber and cars and and hotels hotels and and Airbnbs, and they're able to rent almost anything. I think I I... Actually, my column in the New York Times this week is again about my car, the fact that I don't own a car. It's an update. Guest · 34:36 Did you get rid of your car? Kara Swisher · 34:37 Yeah. I got rid of my car. I'm doing an actually. Yeah. Yeah. So I think people are willing to think about renting everything, like, in terms of of stuff that they don't need beyond just, you know, a dress for a wedding or a prom or what... Or a tuxedo or anything else. But the people are very willing. And, obviously, Eric from Redhook, not underwear. I think that is always gonna be probably Guest · 34:59 in niche dating space. Kara Swisher · 34:59 No. No. It's not. Alright, Mike. Now you've spent too much time with Scott Galloway that you're making dirty underwear to Scott Galloway · 35:06 your ears. Guest · 35:06 My brother. Kara Swisher · 35:07 You can't come to Scott Galloway · 35:07 Let's roll. Kara Swisher · 35:08 No. No. I can't have two of you. Listen to me. Guest · 35:12 I don't wanna get canceled. I don't wanna get — Predictions segment begins — Kara Swisher · 35:13 You're getting canceled right now. Alright. Last section, predictions. Predictions, boys. I'm not gonna make a prediction this week. Again, I'm giving it over to Mike. Your prediction, we already made mister mister gal... Professor Galloway, which was Yeah. I think I think the firewall is gonna gonna get out. Scott Galloway · 35:30 Think the immunities are kicking in. I think where the markets are prone to fits of sanity and rationality or, you know, rational thinking is starting to seep in, and I don't think WeWork is gonna get public. And it's gonna be... It's... I think it's I think it's the market's finally saying enough. So my prediction is WeWork, despite cutting their valuation in half today, doesn't get out. And I have a question before Mike gets to his prediction. Mike, do you take Uber? Oh. Guest · 35:58 So, you know, it's funny. I got into this in in the book a little bit, but I I stopped taking Uber not even for ethical reasons, but for just, like, my sources wouldn't meet me if I used it or had it on my phone because they knew how deeply they were able to track location and things like that. So I did stop for about two years. I should tell you about that. It's all messed up. But but now I I I would say I rely primarily on public transportation, but I do use Uber, Lyft, and Flywheel, and Juno if I'm in New York sort of equitably. But but I I would say, yeah, like, I try to stick to but... Muni and Bart in the subway when I can. Kara Swisher · 36:36 Interesting. Yeah. Interesting. Alright. Prediction? Guest · 36:39 So this is gonna be kinda nerdy, but I think Dropbox is going to have a very big product revamp. And and the the straw that broke the camel's back was Chrissy Teigen tweeting how much she hated Dropbox's new products because it was bloated and gnarly. And if you use Dropbox, it's definitely gotten a lot more difficult to use as just a product. It's very Kara Swisher · 37:03 sort feature heavy. The first place. Guest · 37:05 And that's the thing. Like, I think that, like, cloud services are supposed to be very simple from the outset. And once you sort of lard it up with a bunch of new features and stuff, it gets gnarly. And then your core, like, normal simple user gets angry, and then you have Chrissy Teigen tweeting angry things about your company online. So they're freaking out. They're having a four alarm fire over there, and I think they're gonna have a a big revamp in the next Kara Swisher · 37:27 few weeks. Snapchat. Remember redid its Guest · 37:30 Yeah. When everyone freaked out about the the redesign or whatever. I think that just... Like, yeah. I don't know if it was a Jenner or someone that that complained, but once you get Kara Swisher · 37:38 Louis Swisher complained, and I forwarded it to Evan Spiegel. Guest · 37:41 And that's it. That's what Kara Swisher · 37:41 they Swisher's pissed at it. He loves you. Guest · 37:43 When you get those level of complaints, I think that actually drives the companies into that oh, shit moment. Kara Swisher · 37:49 Good one. Scott, see how creative Mike Isaac is? That was a good one. Scott Galloway · 37:52 A thing. I'm starting to feel a little bit threatened. Starting to feel a little bit threatened. You know, Mike, every generation Kara Swisher · 37:59 backups to back ups for you, my friend. That's right. Backups to backups. Scott Galloway · 38:02 That's right. Kara Swisher · 38:03 Scaramucci's on the list. Uh-oh. Isaac is on the list. There's a lot. Scott Galloway · 38:07 So... But every generation has kind of a seminal moment, whether it was JFK or the Vietnam War or Reagan saying, you know, mister Gorbachev bring down this wall, as a kind of a a tell a tell for this generation. The seminal moments are Chrissy Teigen saying she doesn't like Dropbox and also Jeremy Renner closing down his app, the escape back square. Guest · 38:29 That is my favorite story. Scott Galloway · 38:31 Isn't that the best where like minded fans could come talk about Jeremy? And and buy stars, and it was weaponized. The platform was weaponized, and he decided the best thing for for the the polity and for society was for him to shut it down. And I thought this is perfect if it had been signed by Mark Zuckerberg. Kara Swisher · 38:49 Yeah. I know. This is really good. Alright. We're gonna finish up. Mike, what do you think of his prediction? Just really... What do you think of of of the prediction that Uber Guest · 38:58 work one? Kara Swisher · 38:58 Not the WeWork one, but he was talking about Uber, the same thing, that it's gonna be enough. Is that gonna... Is it gonna be enough for Uber? Make a prediction. Guest · 39:05 I don't... I mean, don't I know. I'm having a really hard time thinking that they're gonna come out of this soon. I Right. And I and I don't think that they're gonna get any leeway in the near term. I think it's just gonna be a lot of pain in a very... In the... Over the next few years, over the next two years, at least. — Predictions segment ends — Kara Swisher · 39:20 Excellent. It's so nice having you here, Mike Isaac. Thank you. It's so nice to have back. Listen to me. What's the name of the book? Guest · 39:26 The book is super pumped, the battle for Uber in stores right now. Kara Swisher · 39:30 In stores right now. And, also, it was excerpt in the New York Times. Guest · 39:34 That's right. Kara Swisher · 39:34 As as Scott said, your your PR people are doing a great job. Guest · 39:37 It's a Kara Swisher · 39:37 great read. It's a real... If you like Bad Blood or that was John Kerry Hughes' book Yeah. It's that kind of book, and it's great. And, actually, having written a lot about Uber, you know, we also broke a lot of stories and stuff like that, I found out stuff I did not know, Guest · 39:49 which is Oh, yeah. Kara Swisher · 39:51 Is great. And, yes, the student has surpassed the... No. No. You haven't. I mean Guest · 39:56 You're being kind. Kara Swisher · 39:57 But try. He's an amazing reporter, and she... He does... Covers Facebook and stuff like that. And maybe we'll have you on to talk about when you write your book. Yeah. Anyway, Scott, we're gonna be together in New York. Remember? Scott Galloway · 40:07 Yes. I'm Kara Swisher · 40:07 excited you some Scott. Guest · 40:09 Scott, don't get canceled. Kara Swisher · 40:11 Don't... I... I'm sending you some literature, and they... And so we're gonna be lying person. You're gonna be on your best behavior. Scott Galloway · 40:17 The lesbian. Kara Swisher · 40:17 Oh, no. Guest · 40:18 I'm ready. Kara Swisher · 40:19 Let me explain to you. Let me explain to you. There are very people that are just... You don't wanna cross this militia etherege. I'm just telling you. They... Speaking of Carrie, I just... Carry a lot of things you don't wanna get hit with. Anyway, we're gonna be talking at the annual Lesbian Zoo Tech Summit in New York. It's actually... There's one in New York. There's one in San Francisco. We're gonna do the New York one, and he's gonna be on his best behavior. And these are really talented, diverse women women and nonbinary women in the field of technology. It's gonna be an honor to be there. Scott Galloway · 40:49 And sure. Well, hey. Mike, congratulations and well done. I think the book... It sounds like the book's off to a great start. And both of us, Kara and I, know how difficult and what a labor of sort of love these things are. So well done and congratulations on the book. Kara Swisher · 41:01 Well done, Mike Isaac. You're the best. He's also a sweetheart. 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, and Nishat Kerwa. Thanks again to Mike Isaac for joining us. Hey. May... How did they find you, Mike? Guest · 41:19 You can go to Twitter and find me at at Mike Isaac. Yeah. Kara Swisher · 41:23 He's kinda crazy on Twitter. Guest · 41:24 Yeah. I wouldn't recommend it. Follow. Kara Swisher · 41:25 Anyway, make sure you subscribe to the show on Apple Podcast. If you like this week's episode, leave us a review. Thanks for listening to Pivot from Vox Media. We'll be back next week for another breakdown of all things tech and business. 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