Scott Galloway · 47:14
As good as Levi's for 50% of the price. And they built a billion dollar denim franchise. And then you look at Apple forward integrating into retail. I mean, verticalization, if you and an exercise I like to do at companies is like, I was on the phone yesterday I don't think I'm speaking out of school.
Kara Swisher · 47:33
Don't care. I think I
Scott Galloway · 47:34
was on the phone yesterday with Canada Goose, which is a brand I love. And I'm like, Okay, if Canada Goose has a $4,000,000,000 Right? Market cap right Yeah. The coat would be
Kara Swisher · 47:43
very expensive.
Scott Galloway · 47:44
Canada Goose, yeah.
Kara Swisher · 47:45
I have one.
Scott Galloway · 47:46
They're wonderful coats. You have one, right? I've seen
Kara Swisher · 47:48
you in I have one, but then I've decided to wear my Zara one because it's more comfortable. But go ahead, it's cheaper. It was cheaper.
Scott Galloway · 47:54
I've seen you in that Canada Goose. It's like, how about some with your jacket? Literally, it's a little head. It's a little poof of hair.
Kara Swisher · 47:59
This is... I I like the Zara one better than the Canada Goose. But go ahead. Keep going.
Scott Galloway · 48:05
You're offending me. Anyways, they're good people, and they're Canadian. They're headquartered in... They're headquartered in Toronto. They're good people. So, Canada Goose, go through the exercise of saying, all right, what if you had a crystal ball and it said, Canada Goose, you're worth $15,000,000,000 now in three to five years. Your market cap had quadrupled. And then you had to guess what had happened, what series of actions took place that quadrupled our market cap. And I'm like, well, what if your growth was supercharged? I'm like, yeah, that might double your stock, but it wouldn't quadruple it. Well, all of a sudden outerwear became hot, really hot. I'm like, yeah, that again wouldn't quadruple it. The only way you have these massive increases of shareholder value is when you take a transactional company and move to recurring revenue, or you take a company that Ford integrates into retail or reverse integrates into producing their own products. Verticalization and recurring revenue bundles are the only way you can kind of three, five x your company. So I think it's something every company should
Kara Swisher · 49:04
constantly When be is it too big then? How does it stifle innovation When they buy these smaller
Scott Galloway · 49:09
Well, that's more the Lena Con question. That's a different question.
Kara Swisher · 49:11
Vertical mergers was of discussion between the Justice Department. They... They're on the same page, they say, about vertical vertical mergers.
Scott Galloway · 49:18
Yeah.
Kara Swisher · 49:19
Yeah. It's an entry. How should we vertically integrate, Scott?
Scott Galloway · 49:23
Well, I don't know. We could have an event in Miami.
Kara Swisher · 49:25
Hello. Is that vertical?
Scott Galloway · 49:26
No. Hello. We're in events. I think we
Kara Swisher · 49:29
should make our own decisions what we should do
Scott Galloway · 49:32
anyway. Really? No. That's a tough business.
Kara Swisher · 49:34
I know that, That's tough business.
Scott Galloway · 49:36
You and I know nothing about technology.
Kara Swisher · 49:38
No, but let's vertically integrate. That should be a pickup line at a bar. Would you like to vertically integrate? I guess it would be horizontally integrate. Anyway, sorry, what?
Scott Galloway · 49:46
The way we would verticalize, we'd be more horizontal, and that is we would go to adjacent products and content, for example. We could start a newsletter. But probably the more obvious one is the one we're doing, and that is forward integrate into events. The other thing we could do is reverse integrate and be a platform for other pod casters. But it's something whenever you get to a point where you have additional capital and brand momentum, you absolutely want to be thinking about verticalization. Because the only way you maintain the kind of margins that we all want for outsized valuations is to control more and more of That the
Kara Swisher · 50:18
is fair.
Scott Galloway · 50:19
But I think it's something that every company, small, medium, big, should be thinking about every year. Let's map out our supply chain. And not only that, the supply chain, if you really think about COVID nineteen, the real impact of COVID nineteen is that every company and supplier has totally rethought their supply chain because all of a sudden, you wake up and you can't get stuff out of Shenzhen or it's stuck on a ship or
Kara Swisher · 50:42
Well, you're never gonna... You're not gonna have a pandemic every hundred years. Right? Though, you know, at some level, you're like, yeah.
Scott Galloway · 50:47
But a crisis is a terrible thing to waste. This is I know. But I'm overprepare.
Kara Swisher · 50:52
You can also overprepare.
Scott Galloway · 50:54
Or even thinking about your own supply chain. There's... You're having a lot of fun with this. What is your supply chain for renting your human capital to the organization? How do you get there? What do you do to prepare to get there? What's the certification? How do you interact? How do you deliver that product? And now look at how it's changed with remote work, with unbundled education, with competition, with new ways to rent your human labor, and say, how should I be thinking about the supply chain as it relates not only to my own human capital, but my own happiness?
Kara Swisher · 51:22
Constantly thinking about my supply chain. I am. And also, I have a lot of toilet paper, just so you know. Anyway, that's a great question There you Neil from Alberta, Canada. My supply chain is excellent there. Send us more. If you've got a question you're curious about, go to nymag.com/pivot and submit it for the show. Alright, Scott. One more quick break. We'll be back for predictions.
[Ad break]
— Predictions segment begins —
Kara Swisher · 53:20
Okay, Scott. Give us this week's prediction. I have none, except I keep saying Pinterest is gonna get sold. That... That's all I say.
Scott Galloway · 53:26
I think we should create a theme here, and that is what I'll call the 70% off bin. Mhmm. And that is... And you said this around Pinterest, I've been saying it forever around Twitter, but when you have a certain class of companies that have doubled or tripled in value, whether it's a payment platform or whether it's Salesforce, and then you have other companies that are 70% off, like a Peloton, a Twitter, a Pinterest, then what you effectively have is these companies in terms of those companies acquiring those companies, those companies are now 90% less expensive. Because if Salesforce were to acquire Twitter, it would be a 10% dilution instead of a 40% dilution four years ago. And so I think my prediction is I just want to throw another one in the 70% off bin that it would be of real strategic value. All right.
Kara Swisher · 54:13
The Filings basement. What is it? What's in Filings basement?
Scott Galloway · 54:15
There you go. It's ro... It's Roku.
Kara Swisher · 54:18
No. You keep saying
Scott Galloway · 54:19
you said this before. It's still not cheap.
Kara Swisher · 54:21
Thought they'd a buyer, though, before. Is that correct? If I... So I've...
Scott Galloway · 54:24
They still might be. I... My prediction last year was they were gonna be a buyer or seller, but they topped out at about $500 a share. They're now at about one eighty. But they have about a 56,000,000 person customer base. I think Comcast is 30,000,000 and trades at a quarter of a trillion. And what you want here is you want either the content that's so powerful that it differentiates the distributions, such as the acquisition by Microsoft who has the distribution but went and got fantastic content with Activision, Or you want distribution that's so powerful that you can benefit or advantage certain content. And it just strikes me, Roku with 56,000,000 households that have a percent in a market cap. Yeah. And and at a market cap of 24,000,000,000. Mhmm. It seems to me that either... I mean, there's a lot of players that could benefit. Let me throw out a weird one. Walmart could buy Roku. Walmart is, I think, the largest seller of
Kara Swisher · 55:24
All those people leave them.
Scott Galloway · 55:25
They have so many... Walmart is the largest retailer of televisions. What if they were to bundle Roku? They also... No one talks about it. Walmart has its own streaming network. Yep. What if Comcast bought Roku? When... If you... Roku right now represents massive distribution and influence across 50,000,000 households, and it's 70% off its high. And also, I think the acquirer that's gonna announce something big, I guess this is sort of a prediction one a, Comcast needs to do something. And it has a $250,000,000,000 market cap, and it's a very impressive company.
— Predictions segment ends —
Kara Swisher · 56:00
Lovely guy, I have to say. One of the more
Scott Galloway · 56:02
Is he?
Kara Swisher · 56:03
He's so polite. I've never... You know, I haven't went from Rupert Murdoch to Brian Roberts, and I couldn't... Such different people. What a gentleman Brian Roberts is. Not that Rupert's particularly rude, but he's just... Is he Canadian? No. But he's just... For someone who... You know, he grew up rich and he inherited his company, and he's done a lot with it, obviously, very much like Rupert did a lot
Scott Galloway · 56:25
Biggest company in Philadelphia.
Kara Swisher · 56:27
A lot of... Both of them took strong businesses of their fathers and built it into bigger things. But I have to say he's a he's a gentleman. And it doesn't matter at all. It doesn't matter. But I'm saying you're right. What are they doing? Let's go. Let's go, Comcast. Gotta move.
Scott Galloway · 56:41
So that... It always impart... You said something that struck me. It always blows me away. And you're one of these people when I meet rich kids who work really hard. Yes. Because if I'd grown up with money, the only two things I know would have been in my life are a Range Rover and a cocaine habit, and sprinkle in a few male prostitutes. I am so impressed with people like you and Brian Robertson. I meet all these people all the time that grew up with money and still work hard. We do. I don't know what you're thinking.
Kara Swisher · 57:05
I don't know. I... You know, I don't know. Because my mother didn't impress us. Oh, okay. My brother is... Are also very hard workers.
Scott Galloway · 57:12
Yeah. Your brother's a baller too.
Kara Swisher · 57:13
Both of actually. Them,
Scott Galloway · 57:14
And your other brother, Yeah, the coal he
Kara Swisher · 57:16
is. He really is. They were hard workers. And my kids are hard workers. Louis, I was
Scott Galloway · 57:20
so impressed. Louis worked
Kara Swisher · 57:22
so much this year. His work ethic was it must be ingrained in our family or something because
Scott Galloway · 57:28
Well, that was what I was going to ask. And I'm being I don't want serious now. You distill it down to one attribute that was in the home that created I mean, is literally the book we all want to buy as parents. What is the secret sauce for instilling grit? I wouldn't even call it character because I don't know... You know, that's a different ball of wax. But in terms of working hard and really going for it and making the kinds of sacrifices and
Kara Swisher · 57:55
choices worried about my kids, but then Louie turned out to be such a hard worker, such a good employee, such a... Like, really goes the extra mile. I know. I know. They're amazing. I'm so surprised. Because I thought I was worried about that. I don't know. Because my mom would... Was not a big pusher of us working. She wasn't, like, standing over us saying, study, study, work, work, work at all. So there was no pressure there. My dad, of course, came from almost nothing and worked his way up, but died very early in our lives. Hard worker, but... And from nothing. Again, you know, he was sort of the more typical kind of, I'm gonna make it, you know, from my modest upbringing. Not not poor, but modest. And, I don't know. My grandfather came from poor background, worked his butt off, and made a lot of money. So that was again, he was more typical. I don't know what it is. I don't know why my brothers and I work so hard. I
Scott Galloway · 58:45
don't know. I don't think anybody does.
Kara Swisher · 58:46
I don't know. We just like... We like it. We found things we like, actually. My my my older brother loves medicine. He would have been fine in technology too. I love what I do, and my little brother loves law, I think, or business business and stuff. So Mhmm. I think we love what we do. I can't... I I have no idea.
Scott Galloway · 59:02
Brother we wanna meet. That's the brother we wanna meet. That's the guy we we He will never meet. Never meet.
Kara Swisher · 59:07
He won't meet him. Yeah. Unless he comes... He drives down to Florida. Who knows? He's not... He's he's shy. He's a shy one. Jeff and I have all the look at me ism. So anyway, he's super smart. He's super super smart. And despite our political differences, he's a lovely guy. Anyway, okay, Scott.
Scott Galloway · 59:24
But how big of you to overcome his political affiliation and just be his sibling?
Kara Swisher · 59:28
No. Come on.
Scott Galloway · 59:29
You've really grown, Kara.
Kara Swisher · 59:31
He's way too smart. My mom, I'm gonna give her a pass because she's, like, hopped up on Fox News. My brother should
Scott Galloway · 59:36
know better. She looks good. Looks good. She's stylish. That's important. Yes. I heard her and Tom Brady are starting a company.
Kara Swisher · 59:42
She is within miles of you. Just remember that. She is she is there, and she... We have we have... She has landed
Scott Galloway · 59:47
Come on by lucky.
Kara Swisher · 59:48
In the sunshine state. So just be ready. No. Don't tell her to come on by. We don't want her in a car. Uber is the only thing she's Anyway, allowed to she's there. She's... And I was like, so how is it? She went, she's never happy anywhere. She... How is it? No. It's okay.
Scott Galloway · 1:00:03
You've abandoned me.
Kara Swisher · 1:00:04
You've abandoned me. Good. Look at the ocean. It's beautiful. It's lovely. I did. I did it.
Scott Galloway · 1:00:09
Why do you care?
Kara Swisher · 1:00:11
Yeah. Anyway, Scott, that is the show. Are your kids hard workers? Do you imagine they're going to be hard workers? You're... You work like an engine. I mean, a work
Scott Galloway · 1:00:23
I think about this a lot. If anybody wants to believe, or if the big argument in raising kids or just in evolution or biology, it's always been nature versus nurture. That's always been the argument. If you ever wanna fall on the side of nature, just have two kids. Because I have one kid who's something out of a Hallmark Channel movie, literally comes in in the morning. This morning, he asked me if I want... He want... If I wanted him to make me breakfast before he headed off to school, carrying a backpack that was, like, 300 pounds because he studies so hard. And the other one will come in, and it's no joke. He's literally a terrorist constantly assessing the household for weaknesses and vulnerabilities so he could And it's like, how did... I mean, we just haven't treated them that differently. Yeah. So it is... I mean, you can manicure around the edges, but my sense of children is they just come to you. Something in the batter.
Kara Swisher · 1:01:15
I do... I think so too. They're just hard work. I don't... I... That's what I think. I think it's just the way
Scott Galloway · 1:01:19
people Something in the batter.
Kara Swisher · 1:01:20
Something or other. Who knows? Who knows, Scott? But you
Scott Galloway · 1:01:22
So my nicknames for them are the terrorist and favorite. Is that wrong? Is that wrong? Jesus. Anyways.
Kara Swisher · 1:01:29
Do not do that. Do not do that. That's the show. We'll be back Tuesday for more. And, we'll be in three weeks of so we'll be in Miami. So sign up for our lovely conference. It's gonna be great. We have some great people coming. Alright. Read us out, Scott.
Scott Galloway · 1:01:42
Today's show was produced by Lara Naaman, Evan Engel, and Taylor Griffin. Thanks also to Drew Burrows, Mia Silverio, Ernie Intertaut, engineering this episode. Make sure you subscribe to the show on Apple Podcasts. If you're an Android user, check us out on Spotify or, frankly, wherever you listen to podcasts. Thanks for listening to Pivot from Vox Media. We'll be back next Friday for another breakdown of all things tech and business. Pivot Miami featuring DJ Soul, David Solomon, and DJ Galloway or my stage name, Postbacks.
