Scott Galloway · 36:47
Fine 14 year olds to work for $5 an hour, but we don't allow that. We have child labor standards, and it's enough already. We've seen since 2009, the NASDAQ has quintupled. CEO salaries up 300%, and minimum wages exploded from $7.25 to $7.25. So to your... To the representative sleeping outside, get some rest, sleep indoors, and then pass fucking minimum wage legislation, $15.18 bucks an hour across the nation because there will always be states run by Republicans.
Kara Swisher · 37:14
Well, that was a huge pushback when they tried. They did try. Let's be fair. They did. They tried. It didn't work.
Scott Galloway · 37:20
Well, in the words of the Jedi Master, there is no try. They have failed us. There's do or do not, and they have failed to raise minimum wage. Well Okay. I... It's great you're sleeping outside. Pass fucking legislation.
Kara Swisher · 37:31
Yeah. Republicans focused on mask mandates will not be allowing that to happen because they're protecting business. But business... I think business does understand this. And when amaz... I'll tell you of all all the things that's gonna matter. Amazon raising at $18 a year over there at Panera or
Scott Galloway · 37:45
That's right.
Kara Swisher · 37:45
You know, Wendy's. You see all these signs everywhere. Like, there's a couple of places not opening in my neighborhood because I'm... I'm not workers. Guess what? You're have to raise the rates. That's it. And and maybe not make as much money and maybe go out of business. Like, that's really... And a lot of these things, they absolutely... These small businesses operate on the on the slimmest of margins. And so that's the problem. I mean, obviously, a whole kind of thing's gotta go into rents, gotta go
Scott Galloway · 38:08
down costs. You know what Germany does? What? Germany mandates that a certain percentage of your board of directors has to be representatives of your workers. And what do you know?
Kara Swisher · 38:17
Oh, I agree with that. For years, I've thought that.
Scott Galloway · 38:20
They haven't had the same massive erosion in the middle class because guess what? There's a bunch of middle class people on the boards of these companies.
Kara Swisher · 38:27
And and and it creates... As you're... As we were just talking about with Meg and Kelly, it creates an ability to to see each other. I know it sounds dumb and protect... Possibly woke to you, but I think the ability to see each other is is very powerful.
Scott Galloway · 38:39
I
Kara Swisher · 38:39
agree. Very powerful. 100%. Alright. We'll see what happens here, but I think they should have to do 20 above 20. You know, we should just stop eking little wins from the rich on this topic. You know, Jeff Bezos when he was bragging about everybody paying for his trip, I don't think that was a good quote for him to to make.
Scott Galloway · 38:57
It's another weapon of delusion where they say all these small businesses which we, romanticize and up idolatry of the small business person and we make a cartoon of it, it's not. There is no free lunch. If you wanted to do federal minimum wage at $20 an hour, which would be dramatic, I. E. Up 140%, 120%, who we would transfer wealth from is the cohort that has aggregated more wealth and economic power than any cohort, that is the shareholder class. And that is the majority of corporations would still stay in business. They just wouldn't be as profitable, and the share price would go flat or go down.
Kara Swisher · 39:32
Maybe they could pay their CEOs a little less.
Scott Galloway · 39:34
Well, yeah, it's hard to engineer that because that anyways, that's another talk show. But the bottom line is the shareholders have done really well. They've done really well. And so the notion that all of a sudden every cupcake bakery and dry cleaner that we love and we make a cartoon of is going out of business, no. It means the owners, the people who own shares, who by the way, the wealthiest people in America are small business people who we again romanticize. But it's the shareholder class that has basically overrun government.
Kara Swisher · 40:04
You're completely right. All right, Scott. We're gonna pivot to a listener question.
Scott Galloway · 40:09
You've got you've got... I can't believe I'm gonna be a mailman. You've got mail.
Speaker · 40:13
Hey, Scott and Cards. Jason from London. I'm a big Peloton fan, and I'm just curious what are your thoughts on Apple Fitness plus as it continues to scale? Is there space for both of them to be successful, or is a combination of fitness... Apple Fitness plus plus the pandemic kind of coming to an end, going to hurt Peloton's long term business? Will it be like Apple Music chopping into Spotify's low margins, or is there space for both to make a lot of money? Thanks.
Scott Galloway · 40:41
I think that's the perfect analogy. I think this is the next Spotify versus Apple Music and that is Peloton is more innovative. The specific crowds out the general focus is a fantastic means of differentiation. Peloton I think is an amazing company. I think their content, their celebrities, the profiles, they've built the platform, the compensation, a connected device, their ability now to go to private label apparel. And not only that, some of the highest NPS scores of any consumer company in the world that's created one of the most rabid passionate passionate fans. A decent percentage of their revenue comes from an app or their fitness app, which is recurring revenue and is not linked to a connected device. And Apple Fitness is going to start to take share from them with an inferior product. But guess what? They control
Kara Swisher · 41:27
It's not a bad product. Let me be clear. It's not a bad product.
Scott Galloway · 41:30
It's inferior to Peloton.
Kara Swisher · 41:31
It... Yes. That is true.
Scott Galloway · 41:33
Yes. Apple Music isn't a bad product, but it's inferior to Spotify.
Kara Swisher · 41:37
I'm gonna push back on that. Both my kids switched over to Apple Music, and there was no reason for they love Spotify. They think the product is
Scott Galloway · 41:44
But why did they switch? Because it's integrated with other things? Because there's a No. No. No. Well, why did they switch?
Kara Swisher · 41:50
They like the product better. I asked them.
Scott Galloway · 41:53
Really?
Kara Swisher · 41:54
Both of them did. I'm still on Spotify.
Scott Galloway · 41:55
Yeah.
Kara Swisher · 41:56
I think it's it's it's competitive. It's competitive for sure. There were some certain things they liked about it better than other things, and it had nothing to do with integration. But go ahead.
Scott Galloway · 42:04
I think this is... That's the perfect example. And Apple will do a great job here. They will figure out I mean having the billion wealthiest people in the world who tend by the way, there is a correlation between wealth and success and working out. And I'm going to go off script here, but the biggest one of the biggest life hacks you can do as a young person right now is finding something that takes four to six hours a week that's unproductive and reallocated into physical fitness. I gave up golf when I moved to New York and I took that six hours I was spending a week on golf and decided I was going to be in great shape. And the benefits, the accoutrements, the self esteem of being in great shape are more powerful than even golf. I love golf.
Kara Swisher · 42:44
Would agree.
Scott Galloway · 42:45
And so this fitness is a gift and I think it's great that Apple's going into fitness, but I would predict they'll come up with a good, not a great product, and they will start to put real pressure on Peloton because they own the rails. They can put they can put this thing in front of everybody.
Kara Swisher · 43:00
I do agree with it here. It's a really interesting issue. I think if you notice Peloton cut the prices on its original Mhmm. People think there's a lot of pressure. There can be a lot of slowdown because of the pandemic. I I don't... Haven't used mine as much only because I'm very busy with code coming up, I will get by. I was thinking I gotta get back to it. And I like it. But I'm not gonna gonna go back to, say, SoulCycle or anything outdoor... Outside. I'm gonna continue. That's the product I'm gonna use. But what's what's... What they're competing for here is time. And if Apple makes it easier for you, you're certainly gonna use it. And with a good product, with a strong product. So it's definitely a challenge for Peloton. We... Scott and I have always talked about Apple buying Peloton. I still think that's gonna happen. What do you think?
Scott Galloway · 43:44
I've never seen two brands, line up better than Peloton and Apple. And then when when you think about the war for your attention and trying to find an accretive acquisition in terms of cementing or strengthening that interface and that attention with a cohort that Apple absolutely wants. I think the most powerful people in the world, the most influential people in the world have one thing in common and that's Peloton. Whenever I hear someone has a Peloton, I'm like, oh, that person's influential or wealthy. That is the cohort you want. Now the valuation is pretty striking but at this point at $2,500,000,000,000 in valuation, it would be about a 2% dilution for Apple. So I've always thought Apple is going to wait till Peloton maybe hiccups and come in or maybe they've already approached them. I don't know if there'd be any trust there. I don't think so.
Kara Swisher · 44:33
No, it's sort of like Amazon MGM.
Scott Galloway · 44:35
But if you think about two brands that feel clean, somewhat feminine, somewhat elegant, but at the same time wealthy, almost like luxury hits hardware and tech, I think of two brands. I think of Apple and I think of Peloton. They could go from kind of letter c to letter l in fit. They would basically own fitness.
Kara Swisher · 44:56
I would agree. I think you're absolutely right. I think you're a 100% right. We'll see what happens. We're gonna continue. And then when it happens, we're gonna say we're the best, aren't we?
Scott Galloway · 45:03
No. No. No. Look. Evangelical lesbians, we're more humble than that, Keel. We're more humble than that. We're gonna have us an election.
Kara Swisher · 45:10
Pull out the
Scott Galloway · 45:11
We're gonna have us an election.
Kara Swisher · 45:13
Listen, boss hog. Anyway, that was a fun question. Send us more. If you got questions you're curious about, go to nymag.com/pivot and submit it to the show. Alright, Scott. One more quick break. We'll be back for predictions. I want a good one from you.
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— Predictions segment begins —
Kara Swisher · 46:28
Okay, Scott. Give us this week's prediction. I would like prediction. I have just a short one. I'm staying away from the capital because of this j six rally that's apparently I
Scott Galloway · 46:38
don't even know what that is. What is that, Kara?
Kara Swisher · 46:40
It's a rally of, like, super MAGAs. They're like the the ones with the guns. MAGAs? Just like all... Whatever. They're they're coming town and they're they're carrying apparently, and the District Of Columbia is preparing for it, and I am staying in my neighborhood and not moving. Anyway, they're all coming. We'll see. You know, people are worried. There's gonna be some bad things happening, but we'll see if they try their ridiculous tactics over again.
Scott Galloway · 47:07
So my prediction is I think the SPAC market may have officially jumped the shark. I've been reading the investor deck of a company called Aspiration. Have you heard about this? It's a former Elizabeth Warren protege or someone who worked in Senator Warren's office as the founder. It's a credit card company or a debit card company actually that you fund and you get good cash back. And they claim to be very carbon neutral. You can allocate your funds to invest in an ESG like fund. And they also provide consulting to companies. And this thing literally looks like of like WeSG, so to speak. It's supposed to go out at $2,100,000,000 valuation. As far as I can tell, it's a kind of a small debit card company. But they've taken advantage they call themselves I love this sustainability as a service. They claim their consulting revenue is going to go from $4,000,000 to $50,000,000 And it's basically a debit card company, for all I can tell, that sends out a card that is not plastic. Okay, there's real innovation there.
Kara Swisher · 48:11
What is it? Like bacon?
Scott Galloway · 48:13
Some sort of material or something that doesn't or degrades or doesn't degrade. Got I think it's Leo DiCaprio or Drake involved. You got celebrity got
Kara Swisher · 48:23
to the real woke people. I'm not down that road.
Scott Galloway · 48:26
You got celebrity influencers, you got ESG, you got sustainability as a service, and you got SPAC. And supposedly this thing is trying to get a $2,100,000,000 valuation. It's 50,000,000 from consulting, 50,000,000 from their money management or debit card business. It's supposed to go out at 21 times revenues. I look at this thing and I'm like, okay, this makes absolutely no fucking sense. And if you look at what's happened to SPACs in the last sixty days, I think this could if this thing gets out, I don't know if it will, I think it's going be the poster child for literally Fonzie jumping over a shark. So I'm looking at this company called Aspiration and new SPACs. Only two SPACs got out in July and one was off 16%. Oh, and my favorite is they have something called MEBITA or EBITDAM. And that is EBITDA No, before hold on, EBITDAM. EBITDA before their marketing expense. And your only real expense in a company like this is marketing. They want to tell you what their profits are before their marketing expense, which reminds
Kara Swisher · 49:28
Show me just to torture them.
Scott Galloway · 49:30
Which reminds me of community based EBITDA at WeWork where they said, all right, we're a real estate company and we're gonna we're gonna present our profits before real estate costs. So we have it all here. EBITDAM I
Kara Swisher · 49:42
hate to say the right is just deconstructing itself. We don't have to do anything. And then we close
Scott Galloway · 49:46
this stuff. This isn't the right.
Kara Swisher · 49:48
No. It's a left. I get that. I'm just saying we should stop doing stuff like that laughable stuff.
Scott Galloway · 49:52
The crown prince of Wokastan trying to cash in.
Kara Swisher · 49:55
That. That's what I'm saying. We shouldn't do... We should... Like, go with the Gavin Newsom strategy. Like, just say nothing, look handsome, etcetera. Yeah. Okay, Scott. That is really horrifying. We'll see how it goes. Let's see. We'll check-in on how it does. Okay? We will check-in. That stuff.
Scott Galloway · 50:09
That's right. We'll keep tracking it.
— Predictions segment ends —
Kara Swisher · 50:10
Alright, Scott. That is the show. We'll be back on Tuesday for more. Lots of news happening. As always, you can submit a question to the show at n y mag dot com slash pivot. We really appreciate them. That one on Peloton was great. Scott, read us out.
Scott Galloway · 50:24
Today's show is produced by Lara Naaman, Evan Engel, and Taylor Griffin. Thanks also to Drew Burrows. Ernie Ingertaut engineered this episode. Make sure you subscribe to the show on Apple Podcasts. Or if you're an Android user, get an iPhone. And also check us out on Spotify or, frankly, wherever you listen to podcasts. Thanks for listening to Pivot from Box Media. We'll be back next Friday for another breakdown of all things tech and business. You and I are gonna roll with Who? Governor Newsom.
Kara Swisher · 50:49
We are.
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Scott Galloway · 51:46
online
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