Scott Galloway · 24:34
And the only reason they're still alive is because Google said, no. No. Keep them around so we can say we have competition. And with literally twenty four hours, Google could do whatever they call their Panda thing and put DuckDuckGo out of business. It's already out of business.
Kara Swisher · 24:46
We're gonna let them
Scott Galloway · 24:46
survive for a little bit.
Kara Swisher · 24:48
Except that. Therefore we have to have regulators like Marjorie.
Scott Galloway · 24:50
I agree.
Kara Swisher · 24:51
I'm with In order to stop that. What I'm asking you is what do you think about the idea of behavioral versus contextual advertising?
Scott Galloway · 24:58
So throughout marketing the primary form of targeting has been demographics. So we assume that all people of a certain age and a certain ethnicity want to buy the same things. And it's been pretty effective and it's actually been a great way to sell advertising because it's you know I don't know which 50% of my advertising is wasted. I know 50% is wasted, I just don't know which in the industrial complex of advertising has benefited from that. Contextual is trying to just basically figure out a way to say alright we're in the right environment you know, as evidenced by the term contextual. But the real gangster move here that built hundreds of billions of dollars in value is the ability to behaviorally target. And that is if a 22 year old Latina who wants a BMW versus a 65 year old retired white guy, the reality is if they are both on BMW's side outfitting the BMW, we know they're both into BMW regardless of their demographics. So behavioral targeting, quite frankly, has resulted in a reallocation of hundreds of billions of dollars in the advertising industrial complex.
Kara Swisher · 26:02
What's your fail?
Scott Galloway · 26:04
So my new kind of, so the most
Kara Swisher · 26:06
Besides the Game of Thrones finale, which I know you're very disappointed. Oh well, it's over. Move Move along.
Scott Galloway · 26:11
And I tell you what, you know what they could have done? They could have just had the last scene be the dragon melting the throne. Boom. Anyways, okay. So my fail, the most the most overvalued company... Private company in the world went public, Uber, and it's gonna get cut in half from here. And now the new From
Kara Swisher · 26:28
here, from here, which was already cut in half. So 30?
Scott Galloway · 26:31
If you were to take Uber and say it was worth $35,000,000,000 I think you have a difficult time justifying that valuation, which means that it's... That's... And by the way, that's half the valuation right now.
Kara Swisher · 26:42
Yeah exactly.
Scott Galloway · 26:43
I do think the market is starting to exit this hallucination phase. I think we're all the lights are coming up in the club, we did x for as long as we could and it's like oh fuck now it's bright outside and I mean we're looking at this stuff. By way, another one of our predictions that the unicorn class would lose more money off of the first trade. I think that's already the case. Think if you like, some have done really well. Beyond Meat obviously, Zoom great company, I think Slack's gonna do really well. You and I love Airbnb. Anyways, the most overvalued private company in the world now no longer qualifies because it's a public company, Uber, and is now the most overvalued public company in the world. The other, now the most overvalued private company in the world is WeWork. I And WeWork
Kara Swisher · 27:26
would love to whack on that guy. All right go ahead, whack away.
Scott Galloway · 27:28
Well okay, so loses as much money as it makes, leases companies for ten years and then marks it up by putting in really interesting cultural amenities and a vibe. I think they do a great job but it's amazing. Mean think about it, if you're a small business person you're paying $10,000 it's costing them 20,000 to house you right now and there's nothing, there's no network effects, there's no real technology here And when shit gets real, you know, the terrible thing about recessions is they always happen, the wonderful thing is they always end, but they do always happen and we're overdue. And when you wake up to this company with ten year leases in a recession where people are no longer willing to pay this kind of money or don't want or just decide to work out of their den or their homes, this company goes from negative 100% EBITDA, which is a new record, to negative 200%. And the thing that really bothers me about WeWork is that when a company feels like they have license to start inventing their own accounting standards, and rather than now reporting EBITDA, now reporting now rather than reporting EBITDA like most companies, they've decided they've come up with a new metric called community based EBITDA. I mean, pretty soon they're gonna say, like, EBITDA for them is gonna mean earnings before everything else. Right? That's what we wanna
Kara Swisher · 28:42
an old trick. That was an old trick of AOLs. They all had... They all have done that.
Scott Galloway · 28:46
That's exactly. Look what... And look how that movie ends. The most overvalued private company in the world, WeWork, if the markets screw up here and let this thing go public, it could literally torch the entire market because this thing is really, in my view, they've got valued at $40,000,000,000 or I think they were out trying to raise at $40,000,000,000 for a company that just economically absolutely makes most sense. Anyway, community based EBITDA is my fail of the week. What's your fail? Did you do a fail?
Kara Swisher · 29:18
My fail. Yes. I didn't do a fail. I'm gonna do a fail. I think Trump having the fit at Nancy Pelosi. He bites every... Every time she picks up, she puts the football out. He kicks it and falls over, and she pulls it away. I just... I'm like, I am fascinated by that relationship. I oddly ran into her at an event this weekend, sat down with her and, of all people, Hillary Clinton, was really interesting to have the two of them together.
Scott Galloway · 29:37
Are you Hillary and Nancy?
Kara Swisher · 29:39
Yeah. Yeah. Exactly. It was weird. It was Washington. It was so Washington moment.
Scott Galloway · 29:42
I just hope there's not a dragon involved. Watch out. You guys get a dragon and watch out.
Kara Swisher · 29:48
I would I would use that dragon frequently. So, so, anyway, so I was really fascinated by his reaction. And, of course, he... It seemed like he had it all planned because he had that weird sign, which was weirder than ever, the sign that he had in front of the podium of the White House, which is like, we have gone real downhill here. And I wonder who made that sign, that sad intern who... I kept thinking, who's the sad intern who had to make this? And then I thought it must have been Jared because the because the font font was all off. So, but, but I was fascinated by that because he seemed to have planned his little thing, but she seems to have won that. You know what I mean? Like, it's interesting. I don't know. It's a... You know, this is all inside politics, but I sort of was fascinated by how, you know, how you can't stand the heat, get out of the kitchen, and this is a very hot kitchen in Washington. And it was... I don't think it matters, but I think it was a fail. I think it was a weird it was a weird fail that he keeps walking into with her, and she's... And she plays it beautifully, I think. I don't know if you think that.
Scott Galloway · 30:43
The the house speaker, you know what? The house speaker, she's a gangster. I mean, she has... And I... I'm going back. I think I'm I'm... Senator Feinstein and Nancy Pelosi have sort of made me revisit the notion that at my ages, because I didn't support either of them because bottom line is I thought they were just getting too old. And it bothers me when these senators and it's almost always been male senators who decide that the Senate is their retirement home. And you know what, she's amazing. She's just, I think she's just been an incredibly thoughtful, measured, and I mean, the clapback. She she doesn't have a incendiary tone to her. She's just the literally the adult in the room.
Kara Swisher · 31:25
She seems to control the caucus really well too.
Scott Galloway · 31:28
Yeah. And there's... But there's another... There's a bigger thing at play here, and there's... You'll love this. I went on Fox last week, and it was it was capitalism versus socialism week at Fox. They actually had that week. And and wait. Just so you know, it's clear that socialism probably won. I'm gonna bet that socialism won. Anyways, but there's so much BS or just there's so much misunderstanding out there around what actually socialism means. And tariffs are an enormous kind of socialist act.
Kara Swisher · 31:56
It is.
Scott Galloway · 31:57
And we have this tariff war.
Kara Swisher · 31:58
I agree.
Scott Galloway · 31:59
And it feels like up until now, the markets have largely shrugged off a trade war believing that saner minds would prevail. And I think what we have now is the markets are starting to go, wow, this could get ugly. The Huawei thing is pretty serious.
Kara Swisher · 32:13
Right, they could bar other American companies there.
Scott Galloway · 32:15
Apple has lost the value just in the last, I think three weeks of almost you know, every media company or just add up, they've lost 70 or $80,000,000,000. They've lost the equivalent of Ford and BMW because At of some point she's gonna say, you know what, it's gonna go, alright, we're going the heart of America. We're gonna go after Apple. It's Trump, I actually think Trump's right on this one. It's just of course going about it all wrong as opposed to doing it multilaterally with Europeans who's all alienated and speaking with a much bigger stick. What he fails to realize, they keep saying, well, we're a bigger economy. We can hurt them more than they can hurt us. And he's absolutely right, but the problem is it's similar to when we went into Vietnam and Ho Chi Minh said, look, they'll... We'll kill some of their people. They'll kill a lot of our people. They will tire and they will go home. Mhmm. We can hurt China more than they can hurt us, but China will close down towns. They'll close down entire cities because of this. If we close down a farm, we have MSNBC out there and and Trump says he's gonna bail them out. We do not have the tolerance or the stomach No. That China has to disrupt our economy. They play for the long game, and you're seeing Apple starting to go, oh, no. Might... Shit might get real around... This is going from a border skirmish to an all out trade war. And who's handling it? The worst businessman in the world as evidenced by his tax returns. But literally the worst businessman in the world is now in charge of multilateral talks between the two largest economies.
Kara Swisher · 33:52
I think you're a 100% right. I think you're exactly... He's directionally correct and tactically wrong typically in this case in this case.
Scott Galloway · 33:58
Better said. That was better said.
— Predictions segment begins —
Kara Swisher · 34:00
Thank you. It's a pithy. I'm a pithy person. So your prediction was the one you made earlier, which was Tesla. Right?
Scott Galloway · 34:05
Tesla. Sub $100 talks about acquire... Or going... Or actually going private. Mhmm. And it won't be a $420 a share.
Kara Swisher · 34:12
One then since that was... You did it before. Do you have another small prediction?
Scott Galloway · 34:15
Let's... Well, let's do one about politics. Do you have any predictions around politics?
— Predictions segment ends —
Kara Swisher · 34:20
I do not. I do not. I think I I do not right now. I'm interviewing Pete Buttigieg soon, which I think will be interesting.
Scott Galloway · 34:26
Be really exciting.
Kara Swisher · 34:26
That should be good. I have lots of questions for him.
Scott Galloway · 34:28
There, Pete.
Kara Swisher · 34:29
I think I think, Warren will become more and more popular. I think she's... There's something she's hitting some... I was Agreed. 10 different people not in Washington, in other places that are... That were... Are regular people, I guess, regular people who seem to be intrigued by the stuff she's... They like her
Scott Galloway · 34:44
so much. Define regular people who are regular people?
Kara Swisher · 34:47
Well, not not like Washington creatures. Not Washington creatures. Got
Scott Galloway · 34:50
it. Got it.
Kara Swisher · 34:51
They were just intrigued by her policy. Like, they... The people do wanna talk about substantive things, and I do think people are interested much more in substance than people realize. I think this whole, like, noise fest is not what people are interested in.
Scott Galloway · 35:04
We'll talk about the patriarchy. You've seen, okay so we have Kamala who's probably the most qualified candidate. We have Senator Warren who is arguably the intellectual leader of the Democratic Party right now. She's the only one that actually can go beyond a talking point and talk about this stuff. Although Senator Bennett just put out a plan on climate change that I thought was pretty substantive. But she is really the intellectual thought leader. She's willing to actually put stuff down on paper and do the work and take a stand. But what do you know? Who are the leaders? By far who's crushing it? Two two old white guys in their seventies. Right? Biden and Sanders.
Kara Swisher · 35:37
I think that... I think that's because there's a differentiator. Do you wanna win, or do you wanna take the high road? And I think that's that's the split. I think that's the same thing with the impeachment. Do you wanna win, or do you wanna really do what's right? And so that's, I think, where we are as a country because we're... I think at least the Democrats are so desperate to get rid of Trump that they are gonna go with what what works. And that's, you know, that's just where we are.
Scott Galloway · 35:59
That's an interesting point. So I have a question for you. Do you think the Democrats should start impeachment hearings?
Kara Swisher · 36:04
I do not. I don't think it... I don't... I think it's largely ceremonial because it doesn't go anywhere in the senate, and I think they should... I don't say beat him at the ballot. It just doesn't... It just creates havoc, and we have to... It just it just doesn't I don't think people... I think people are... They wanna talk about real topics, and there's Yeah. They want things to move forward, and it only creates more acrimony and means no legislation and his stupid tantrum, which he looks like a big giant baby, which baby Huey that he is. But it doesn't it doesn't get us where we wanna go, and I don't... And I think people have less interest in that than than anything else. Yeah. And so I... It's too confusing too. It's very clear that that that that Mueller wanted congress to act because he couldn't, because he couldn't. And so I... It doesn't really matter. Like, people just don't want the grifter to get off. Well, we might have to let the grifter off and win on the real... On the things. And so the question is, can we have an election free of of interference by foreign bodies? We'll see about that. But we can talk about that next week.
Scott Galloway · 37:03
There you go.
Kara Swisher · 37:04
Scott, thank you so much.
Scott Galloway · 37:06
What are up for Memorial Day?
Kara Swisher · 37:07
I'm going to the beach. I'm going to the beach with
Scott Galloway · 37:10
Where is the beach?
Kara Swisher · 37:10
With a lot of family. A lot... Like, way too much family. Way too much family.
Scott Galloway · 37:14
Okay. When you say beach, where?
Kara Swisher · 37:15
Rehoboth Rehoboth Beach, Delaware. My friend has a house in
Scott Galloway · 37:18
in Rehoboth.
Kara Swisher · 37:19
That's right. That's where I'm going.
Scott Galloway · 37:20
I do not... For some reason, I just don't see... I could've I could've guessed a thousand beaches, and I wouldn't said Brooklyn.
Kara Swisher · 37:26
Happen to be in DC, and so therefore, that's where I'm going. And then I'm getting ready for Code, and I'm very excited for you to come to Code. I'm Yeah. It's really
Scott Galloway · 37:33
Everyone says... I get invited to the one in freaking Arizona. Everyone says that place you used to have it is beautiful, and I end up in the desert.
Kara Swisher · 37:39
Don't see this. There was... That's hot. We had to move it. I'm not even gonna go into why we had to move it. It's union issues that we could not go over, but it's not it's not a different one. It's the same conference. It's we had to move it. That's just the way it goes.
Scott Galloway · 37:50
Do I look like someone who gets a
Kara Swisher · 37:52
hot stone massage? Do
Scott Galloway · 37:54
I look like I need a hot stone massage?
Kara Swisher · 37:56
I think you need one for sure.
Scott Galloway · 37:57
Seriously. But
Kara Swisher · 37:58
we're putting you in a beautiful... One of the most beautiful resorts in America and you're complaining, but that's alright.
Scott Galloway · 38:03
I don't... Who are the who are the one or two speakers you're most excited about? I'm doing the Kellyanne Conway. Buy here buy her jewelry. I'm totally pimping you right now. Who who are the one or two most speakers you're most excited about other than me?
Kara Swisher · 38:13
All my... All of them. I like all of them. I think all of
Scott Galloway · 38:16
The CEO... The head of YouTube is gonna be there. Right?
Kara Swisher · 38:19
Yes. Susan. Yes.
Scott Galloway · 38:20
That's right. Yeah. Yeah. Yeah. Doing tremendous damage to the world. I'm looking forward to
Kara Swisher · 38:23
meeting her. Okay. Good. Okay. Well, I want you get up and ask questions of her. Anyway, Scott, we gotta go. Alright.
Scott Galloway · 38:28
Kara, happy Memorial Day.
Kara Swisher · 38:30
Go. How's your book signing going?
Scott Galloway · 38:31
You know, Stephanie Ruhl, total gangster. We hosted 400 people last night at Stern. Thank you. Yeah. You asking. For It made me feel very loved and appreciated.
Kara Swisher · 38:39
Yeah. Your book is doing well. Right?
Scott Galloway · 38:41
Yeah. It's doing... Yeah. It's doing... I've sold literally, Cara, we've sold dozens and dozens of copies. Good. Okay. Read
Kara Swisher · 38:48
Scott Galloway's book. It's called By Storb. The algebra of happiness.
Scott Galloway · 38:53
Thank you, Kara.
Kara Swisher · 38:54
Thanks for that. Bye. And I'm hope... Hope to your party... Your book party in New York next week. I mean, in two weeks.
Scott Galloway · 38:59
Oh, it's gonna be fabulous.
Kara Swisher · 39:00
Anyway, alright. That's great. Okay. Nishat Kerwa is the executive producer of Pivot. Thanks also to Eric Johnson. Thanks for listening to Pivot from Vox Media. We'll be back next week for more of a breakdown of all things tech and business. Make sure you subscribe to the show on Apple Podcasts, TuneIn, or your favorite podcast app. If you like this week's episode, leave us a review.
