Pivot · Jun 19, 2020

Twitter’s new audio innovation, Apple’s dominance gets a closer look and a prediction on the impact of online trading apps on mental health

Automatic transcript of the end of the episode, from 31:06. Speakers are labeled by software and may contain errors. Highlighted passages are Scott’s predictions.

Kara Swisher · 31:06 Innovative, and I like any... You know, there's been lots of email apps, but, you know, Google continues to control and dominate and and honestly spy on you during it. I don't wanna use g... All the Gmail's iterations, and I'd like there to be a more vibrant, ability for others to do it. I don't know if email's the hill I would die on necessarily because I do think I'd like to get rid of email completely. But, it Mhmm. Speaker · 31:28 It Kara Swisher · 31:28 just sits there. Read the Brian Chen inter... Review. I thought it was quite fair, and I think so did Basecamp. But you should try it. It's it's fun. And there's a thing called Imbox, I m b o x, instead of inbox. Imbox. Anyway, I like it. You should try it. It's fun. Scott Galloway · 31:44 It's innovation? Imbox? Kara Swisher · 31:45 No. No. No. No. There's a lot of little innovations, like like pinning certain things, putting putting a file where your your bills go, saving things for later. It's just instead of having to star them and all these... There's no innovation in email by Apple or Google or anybody, and it's nice to see innovation. So I I I think that's great. So, anyway, anyway, we're gonna take one more quick break. We'll be back for predictions. [Ad break] Speaker · 32:44 Botox, onabotulinumtoxin A, prevents headaches in adults with chronic migraine before they start. It's not for those with 14 or fewer headache days a month. It prevents, on average, eight to nine headache days a month versus six to seven for placebo. [Ad break] — Predictions segment begins — Kara Swisher · 33:41 Okay, Scott. We've been making predictions about the next class of IPOs. It's been a strong one. We saw the stock market make some big gains this week. Either was a story in the journal about Speaker · 33:50 this, the tech you you you you sent me. What can we expect in Kara Swisher · 33:53 the coming weeks? It looks like the market... As as Susie Orman said, the market is not the economy. The economy is not the market, but the market rolls on. Scott Galloway · 34:00 Well, is an observation and a prediction. I think there's this incredible phenomena of the young male brain is especially risk aggressive and gets a lot of reward from taking risks. Kara Swisher · 34:14 And Scott Galloway · 34:15 one of the ways that manifests itself is in gambling. And gambling addiction is actually, I believe, the addiction that has the highest suicide rate, because you can get into a lot of trouble without people knowing. There can be external signals that you're in trouble. If you're a raging alcoholic, the people around you know it and will hopefully intervene. But you can lose everything with a gambling addiction before anyone even notices it. And so anyways, that goes to my prediction, just as I think we're gonna find out over time that Instagram has been the direct cause and also the concerted effort of the folks at Instagram to make it addictive has resulted in a lot of the the skyrocketing levels of self harm and suicide among teen girls. I think we have the same unfortunate forces at play here with online trading. And I'm hoping that the CEO of Robinhood really took pause. There was a young man, a 20 year old, This kid named Alex Kearns committed suicide, this 20 year old in Naperville. And they found on his phone Mhmm. The last thing on his phone was it said he was... It registered that he was down $700 in his trading app, his Robinhood app. And so you're seeing just a ton of young men trading. And then these apps, you know, there's zero commission, encourage margin, encourage leverage. And then these kids basically feel like there's no way out. Kara Swisher · 35:46 Yeah. Scott Galloway · 35:49 Anyways, I I... My prediction is I think these online trading apps are gonna be kind of the new Kara Swisher · 35:56 It's interesting, Scott. This is this is something that means a lot Scott Galloway · 35:59 to you. Sons, you think like, Jesus Christ. Would you... The the parents had no idea. The parents had no idea. Yeah. And it feels... It it has echoes. It has echoes of of Instagram and the impact it's having on our on our girls and our young women. And I wonder if there's the same very unhealthy, very unhealthy, addictive like qualities that these companies try and build into their apps. Well, a 100%. That is gonna result in the type of damage. Kara Swisher · 36:26 I'm curious because you were around for the last online trading boom when people were losing money and when E*TRADE and all the others, Ameritrade, and everyone was at home being their own, and and people got in a lot of trouble, doing it for the first time when they didn't remove, you know, a lot of the things. Now on one hand, it's great that you don't need to pay brokers fees and this and that and be, you know, sort of these... Speaking of taxes. How do you... How does that compare from your perspective? Is it is it different because it's a mobile app? It feels even more like gambling? Because that was, I recall Scott Galloway · 36:55 Oh, go on rabbit hood. They have confetti. Yeah. They have confetti. They've gamified it gamified it. They've clearly taken notes from gambling in terms of random rewards, a series of unexpected and random opportunities, visuals, colorization, gamification, also offering leverage and things like pull put option techniques to young people who have no background in investing. It's... There is something very ugly going on here. Kara Swisher · 37:27 Had thought about investing in this, or do you... How do you feel as an investor? You know, we we had this discussion about Jewel. We we had this discussion about Jewel, the same thing, the whole idea. Scott Galloway · 37:36 I'm thinking about investing in one of these companies, a company called Public. And the thing I like about Public is that it is not letting kids trade on leverage. It's not allowing certain types of options. Trying to, it's trying to foot to and let me be clear, there's some wonderful things about these apps to get young people interested in investing at a young age, to give them the opportunity to invest at a young age, to get them the ability to buy micro shares is an interesting thing. I think zero commissions is an interesting thing. So there's a lot of good that can come from this, just as there's a lot of good that can come from social media. The problem is, in order to scale and make money, you start going after the addictive side of the brain, you and you give them the opportunities to get into trouble. And there's no... I worry that the algorithms move the brain to a very ugly place where people feel they have no way out. Kara Swisher · 38:28 Same difference Scott Galloway · 38:28 as evidenced by this young man's suicide. Kara Swisher · 38:31 Yeah. So you would you Scott Galloway · 38:32 would imagine is becoming the new Instagram. Kara Swisher · 38:35 Yeah. So regulation status. Scott Galloway · 38:37 I don't know. I don't know what's... Or lawsuits. Kara Swisher · 38:40 They don't have the Scott Galloway · 38:40 same protection as the media companies. They don't they don't have two thirty, so we'll see. Kara Swisher · 38:45 Yeah. I think they will... I think they'll Scott Galloway · 38:46 be What do think is gonna happen? Kara Swisher · 38:47 I think there were lawsuits last time, so long ago when this was happening and it was a phenomenon. I think there will be... I think just like with Juul, you know, I remember meeting the Juul people very early, and they're like, all up into the right. And I was like, it's still cigarettes. I just don't see how you're gonna avoid cigarette issues in the way you advertise to young people. And the same thing here. I think once they start sort of preying on especially young people and they'll have those statistics and demographics with all kinds of gamification of this, you'll have... This is perfect for regulators. It feels predatory. It feels something that... So this is this is like... You could see a a state's attorney general going after this kind of stuff really quickly. Reminds me of the same the same, like, if we can take advantage of people, we will. And I agree with you. There's some great parts of kids learning how to how to invest, but it is, you know, what Susie was talking about last week. So I think this is a great prediction. So I think this is a great thing to talk about. But IPOs in general, do you have any? Like, they're coming. Right? The big ones are coming. You see no stoppage. Scott Galloway · 39:47 Yeah. The one I... The one the one I'm trying to get in on, I was... I don't like to give investment advice anymore. I just talk about what I'm trying to do. Mhmm. So I'm voting... Trying to vote with my feet. I'll likely be investing in the IPO of Lemonade only because... Not only because, A, I think the CEO, they're smart. I heard his interview with you. He strikes me as a very, very thoughtful, bright guy. Also, I think shareholder value creation is not only a function of the execution and the quality of the management team, but also the size of the opportunity for disruption. And when I think about one of the few industries that really has 10s of billions of dollars of margin they don't deserve, I zero in on insurance. And so I think and I'm hoping assuming I can get stock at a reasonable rate. I think the IPO of lemonade might be the best performing stock of the quarter or it's registered the biggest pop. Guess it's dependent upon how they price it. But lemonade, a disruptor in the highly disruptable business of insurance could be just a monster. Kara Swisher · 40:52 Smart guy. Insurance is just got shot. Really enjoy it. Scott Galloway · 40:54 How much money they're spending on TV. Kara Swisher · 40:56 I agree. Agreed. Agreed. Agreed. And insurance is Scott Galloway · 40:59 Do have any predictions, Kara? Kara Swisher · 41:00 No. I don't. I never do. I let you have them, and then you go out on a limb, and then sometimes it gets sorted off, and sometimes it doesn't. So I like to just watch as you do that, as you perform your high wire act, Scott. I don't like I don't like, like, when I see, tweets like, you got this wrong. You got... I don't I don't know what's gonna happen. All I do know is that... What? The key isn't what? Tell me... Give me a tip on predictions. Scott Galloway · 41:23 A key isn't to be right. It's to catalyze a conversation. Right? Kara Swisher · 41:27 Fair. Okay. I'll catalyze a conversation. People of Silicon Valley, as I've said a million times, you have to stop doing these Band Aid approaches to things like racism and diversity and actually do some actual actions to get to the root of the problem. You you have to do this. It's it's a it's a... Not just a moral imperative. It's a business imperative. And the more you don't do it, the more I find you to be just like every other shitty capitalist that exists. So if you wanna rise high, try harder. That's what I say. Thank you. Alright. There you go. How's that? How's that? Or is that just election? Scott Galloway · 41:59 Was that... Wait. Predictions or or indignant self righteous rants? Which part of the show are we in right now? — Predictions segment ends — Kara Swisher · 42:05 You know what? I'm right, though. I'm on the right side of history, and you know you don't need to have to listen Scott Galloway · 42:09 to me. But I'm right. Kara Swisher · 42:10 No. But here's Speaker · 42:11 the thing. I'm right. And that's the new book from Scott Galloway · 42:13 Kara Swisher, but I'm right. Kara Swisher · 42:15 I have a book. I'm writing a book. You're gonna be in it, and it's gonna be a tell all about your Foamer and other issues. Way. Scott Galloway · 42:22 There's not... Unfortunately, there's not a lot all to tell here. But, anyway Kara Swisher · 42:25 be new headlines about Scott Galloway and not just that he's the king of all media. Oh my god. I literally wanted... I literally Scott Galloway · 42:31 I'm the horror of all media. It's not that my media is that good. It's just I say yes to everything. Kara Swisher · 42:35 Why didn't it say the horror of all media? Why did not it say the horrible? I don't think so. That was Scott Galloway · 42:40 a true mess. Horrible media. Kara Swisher · 42:42 Literally, all the men have man crushes on you. It's a tongue bath, like, continually. It's fascinating. I'm just saying it's fascinating. Anyway, there's not gonna be a back a backlash against you, Scott. Not yet, at least. Anyway, do you have any plans for the weekend? We gotta go. We gotta go. Do have any plans for the weekend? Florida's having the COVID situation. I'm trying to get my mother out of there before Scott Galloway · 43:03 she More infections. Kara Swisher · 43:04 Wanders away into Scott Galloway · 43:06 number of infections in Florida. Yeah. No. We're sheltering in place and, you know, time with my boys and Yeah. All that good stuff. How about you? Kara Swisher · 43:14 Are you not putting the kids out to the lawn anymore? You finally figured out a way to get along together? Scott Galloway · 43:19 We... You know, we're we're we're having a great time. We've been watching actually the wonder years, and we've been watching Kara Swisher · 43:27 Oh, I love that. Fred Savage. Scott Galloway · 43:29 Oh, it's wonderful. And the way I bond with my 12 year old is everyone goes to sleep, and then he sneaks downstairs, and we watch killing eve together. So inappropriate. Kara Swisher · 43:37 Which one do you watch? Scott Galloway · 43:38 What? Appropriate. Kara Swisher · 43:39 What what do you watch? Scott Galloway · 43:40 Killing eve. Kara Swisher · 43:41 Oh, don't do that. Scott Galloway · 43:42 Killing eve. Kara Swisher · 43:43 What is wrong with you? Scott Galloway · 43:44 Oh, yeah. He loves it. He loves Kara Swisher · 43:45 it. I am going to do an intervention with the Florida, government in... Soon, very soon. So don't Scott Galloway · 43:52 just answer that. What are you doing this weekend, Kara? Kara Swisher · 43:54 I'm in Vermont. It's lovely here. It's lovely here, and I will be bicycling and, dealing with... I don't... The only thing... I love it here. It's quite beautiful, but the the bugs... I don't like bugs. And I like to work. I don't... I'm not a vacationer, Scott. I'm just not. I'm just not. I like to work. I like the big city. But I... It's beautiful here. It's a... Amanda's parents have a beautiful house, and, and it's it's lovely. It's lovely nature y and very pretty. So I think there will be maple syrup in my future at some point here. Anyway, don't forget if there's a story in the news and you're curious about and wanna hear our opinion on, email us at pivot@VoxMedia.com to be featured on the show. Scott, please read us out. Scott Galloway · 44:32 Today's show was produced by Rebecca Sonanes. Fernando Finete engineered this episode. Erica Anderson is Pivot's executive producer. Thanks also to Drew Burrows. Make sure you subscribe to the show on Apple Podcasts. Or if you're an Android user, check us out on Spotify Or wherever you listen to podcasts, if you liked our show, please recommend it to a friend. 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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