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Kara Swisher · 1:11
This episode of pivot is brought to you by Microsoft Azure to amplify your ideas and achieve more with artificial intelligence and advanced analytics on Azure, your trusted cloud. Start your free account today at azure.com/trial. That's azure.com/trial. Hi, everyone. This is Pivot from the Vox Media Podcast Network. I'm Kara Swisher.
Scott Galloway · 1:41
And I'm Scott Galloway.
Kara Swisher · 1:42
And we're just about through with 2018 on the show. We usually break down the big news stories of the week, but this week, we're gonna take on the whole year. Scott, let's talk about all kinds of issues for 2018.
Scott Galloway · 1:53
Let's.
— Predictions segment begins —
Kara Swisher · 1:54
So let's start, with the top, which was obviously Facebook and Cambridge Analytic and the whole Facebook thing. Right? Yeah. Would you say that was the top story this year?
Scott Galloway · 2:04
Yeah. Think so. I think that... No doubt about it. The notion that this might lead to the breakup in in the beginning of eighteen. So I do a series of predictions. I get a lot of them wrong, but they're fun to talk about. But one of the predictions was that the breakup of big tech begins in '18. And I'm curious about that. Do you think that's... Would you say that's correct or incorrect that the breakup of big tech has begun?
Kara Swisher · 2:27
I think the contemplation about the strength of big tech and whether they should be regulated has begun. I don't think there's gonna be any breakup.
Scott Galloway · 2:34
So you think you think the immunity that'll kick in here or the blowback will... The form it'll take will be regulation, not antitrust?
Kara Swisher · 2:40
Yes. Yeah. Well, I don't know. I don't know. I think that certain companies, antitrust is one... But I... It's... You only have one shot at these companies. And so which company do you shoot out? Which one is the right one? Is it Amazon? Is it Google? Is it... You know, Google hasn't been shot at yet by any of the regulators, if you think about it. And they've been around much longer than Facebook and other companies.
Scott Galloway · 2:57
Yeah. They're the luckiest, though. Mean, have the ultimate heat shield in the Zuck and and Ms. Sandberg. Facebook's the best thing that happened to them, because they're probably more frightening.
Kara Swisher · 3:04
Right.
Scott Galloway · 3:05
They would be, so let's talk a little bit about Google and Facebook. I wanna propose a solution, you tell me why this does or doesn't work.
Kara Swisher · 3:11
But one
Scott Galloway · 3:12
of the scariest things about our economy right now is the fastest growing parts of our economy are, in tech at least are search, cloud, mobile, hardware and social. And you can't start companies in those industries because there's a big dominant player or a duopoly. So we have innovation being cauterized. I feel this is the era of non innovation. So the notion of breaking them up, let's start with Google. 93% of intention to action is controlled by one company, which I think is a bad idea.
Kara Swisher · 3:42
Explain intention action, please.
Scott Galloway · 3:44
Okay. I type in how to overthrow my government. Is the first piece of content I get a voter registration form or instructions on how to build a dirty bomb? And I'm not suggesting we put search back in a bottle, but is it cool or are we down with one company controlling 93% of that process? What's the most, I'm gonna get existential here. What's the most important process? Is it when a solar flare comes off the sun and heats us? Yeah, that's pretty important. Is it the moment of life or conception? A lot of dispute over that, that's pretty important. But intention to action 3,000,000,000 times a day, that's a pretty important process, Absolutely. And we don't know how they're figuring it out and they don't wanna tell us and one company controls 93% of it. So the question is, well, how do you break up that concentration? And my answer here, and I want to hear your feedback, is that you spin, you force a breakup of YouTube, and in the first corporate strategy meeting of YouTube, they decide that the way they all get homes in the Hamptons or NAPA or whatever it is they do with their stock option appreciation, is they start doing text based search. And in the first corporate meeting of Google sans YouTube, they decide to start doing video search because they're no longer coordinating. And we have two viable players overnight, and I think that that's good for the world, good for the planet, good for the economy.
Kara Swisher · 4:56
Right. These these breakups. I... It is interesting. I was thinking this on the subway coming down here. I was thinking about Amazon, for example. Mhmm. They... I was trying think, what would get Amazon? Obviously, having all this information about what people buy and sell and and what, things of other people's that they buy and sell. So what they have a proctoring... All the brands sort of pushing back on Amazon. Amazon knows what everybody buys and sells because... So it could start to understand what businesses are good to invest in or not. So they have extra data information that allows them to facilitate dominance in other areas. And so that's... Is that is that antitrust? Is that that that... I was just thinking, wow. They really do know how much toilet paper sells and what kind and where. They have more information than Walmart ever did Yeah. Because they know about everybody's toilet paper sales. And so it's just... I was just thinking, is that an undue advantage? Is that actionable? Is that something people should be worried about? If they are one of the bigger sellers, they can, of course, make the argument. They're one of the... There's so much retail going on. That's their argument. They're only 2% of retail or whatever the number they always throw out. But it's a really interesting question is how much... When you... You don't just sell things. You have the data about things selling. And so that was interesting. And the same thing with Google. They don't just have... They don't just yield the search results. They know what everybody is searching on. And so you have this... I've always called Google the database of human intentions. I mean, if you go to Google... People don't realize you go there, you used to go there, and you used to see words coming across the Google system. They used to have... They have a ticker tape, essentially, that went by, or they sometimes have it on stairs and things like that. And you'd see things like like horses, condoms, this. So you'd be like, what are people searching for? Like, you were... I you were... I would sit there and try to figure out what the intention was, and you just realize that it's all of human intention and... Which is hard to quantify, but they certainly can. Again, they have undue advantage, as Yelp has said, as other people have said, over what peep... Knowing... Paths are made by walking, they know where everybody's walking. And I think that's... That to me is a really interesting... Like, I'm not a lawyer, but that's a really... Who... If everyone knows where everyone's going, the companies that know where everybody's going are the most powerful purveyors of anything.
Scott Galloway · 6:59
Yeah. If you're if you're on the platform, you shouldn't be competing with the downstream providers. It's like owning all the railroads and you get to see not only what's on the rails but where it's going, the profitability of it. So when you see that shipping jackets to Minnesota is just a great business, high margin and then you start opening jacket stores and then maybe not providing access to the same communication or same transportation of those jackets as you were before, that the platform shouldn't be competing. In terms of legality, the current antitrust law does not support the breakup of these companies because it's kind of the Bork consumer test. And how do you decide who how do you say that something is creating consumer harm when it's free? And I would argue that with Google and Facebook, we've conflated the end consumer with the actual consumer. I think the consumers here are the advertisers. And there's real consumer harm because P and G and Unilever have no choice. And as a result, they're paying unfair or undue risk.
Kara Swisher · 7:52
No marketer has any choice. They have to be there, right?
Scott Galloway · 7:55
100%. I mean, they're all I think most of them are really upset by what's going on, but they cannot reduce their advertising.
Kara Swisher · 8:02
Television doesn't work anymore, it doesn't have the And same
Scott Galloway · 8:05
not only that, the analysts have broken out their online growth from their offline growth. And their online growth is much more important, and the only way they can drive online growth is going to one or two players, and that's Facebook or Google. Amazon is more frightening in the sense that it can move markets without actually competing. It can take the value of any consumer stock down 30%, thirty days, and 30 press releases because everyone's just so shit scared of them. And also this very strange dynamic where they have access to infinitely cheap capital. We've never had a company get to be the most valuable company in the world, which they were for a hot minute two weeks ago, without ever having to achieve meaningful profitability, which creates this dynamic that no company can compete with. The only company that's sort of similar is Netflix. If you really look at Netflix financials, you could argue, all right, they're outspending everybody without this demand to be profitable. And you might say, well, that's fine. That's great for the consumer. Long term, I don't think it is because we don't know what we're missing. Try and start an e commerce company right now. It's nearly impossible to get an e commerce company funded right now. And everyone gets excited about OAY and Casper. I I think they're all sort of... They all kind of vary between fucked and semi fucked, and we all wanna think that they're gonna be great. It's very hard
Kara Swisher · 9:18
too to think big to that that others fail. It's not too big to fail. It's too big
Scott Galloway · 9:23
They're so dominant.
Kara Swisher · 9:24
They're so dominant.
Scott Galloway · 9:25
The old Brandesian notion of antitrust was based on channel power. Lena Khan kinda wrote the seminal piece, this 27 year old law student who's shaking up antitrust. But, you know, the the anticompetitive behavior across all of them, too dominant in every market, cauterizing.
Kara Swisher · 9:43
And they don't compete with each other.
Scott Galloway · 9:44
They mostly stay in their swim lanes, although you're starting to see them pump up a little bit against each other. But it feels like there's a little bit
Kara Swisher · 9:50
of I I I liken it to semi trucks running down the highway. No one can get by. Like, five of them or three of them
Scott Galloway · 9:56
or whatever. Yeah. You end up in the tire well. Yeah. So what happened to that company?
Kara Swisher · 9:59
Can't go around any of them
Scott Galloway · 10:00
Yeah.
Kara Swisher · 10:01
At all. And the media companies can't go around them. ECommerce companies can't go around them. And and what... One of my themes for this year, I think, over the next year is gonna be this, where does innovation come from, and what's in its way? And it seems to me these big companies are in the way of
Scott Galloway · 10:14
innovation. Four things are in their way. Yeah. Amazon, Apple, Facebook, and Google. Mhmm.
Kara Swisher · 10:18
Well, Apple, would you put Apple in there?
Scott Galloway · 10:20
So app... I believe Let's
Kara Swisher · 10:21
talk about that. Apple, the first trillion dollar company, then was Yeah. Pushed aside in that.
Scott Galloway · 10:26
Yeah. One of one of the predictions one of the predictions was that... And I've been making this prediction for four years, was that Amazon would pass become the most valuable company in the world and become more valuable than Apple. And it happened for about three minutes a couple weeks ago. But look at Apple. Apple pre installed on a billion iOS devices an absolute horrible music service. It's not a good music service. Spotify is far superior. But two quarters ago, Apple Music started growing faster in The US than Spotify because it's preloaded. And that's the whole
Kara Swisher · 10:55
I know that's just it. My kid just started using it because he liked it better.
Scott Galloway · 10:58
Like Apple Music?
Kara Swisher · 10:59
He did. They all are shifting to it. He told me. He's like, all the kids are going Apple Music. Was like, what? From Spotify? He
Scott Galloway · 11:04
doesn't use Spotify Discovery that you like Apple Music?
Kara Swisher · 11:07
I'm just telling you.
Scott Galloway · 11:08
That's just blown my world up. So... But you have this advantage where if you're already pre installed on everything and then you can charge a 30% tax to Spotify and then you're slow getting them the tools they need to update it for the iOS, you know for the App Store, should companies be in that business when they own the access, should they be going vertical and competing with these guys? Right. And try and start a music streaming company right now. It's just... You can't. It's near impossible. So It's
Kara Swisher · 11:34
big. It's the giant. It's land of the giants.
Scott Galloway · 11:36
Well, and the data's terrible too. We've talked about this metric before, but there were twice as many new businesses being formed every day in the Carter administration than there is now. And there's this false notion that we live in an era of innovation. No. We don't. We live in an era
Kara Swisher · 11:47
of innovation. Wither innovation. It's coming from China. It's coming from elsewhere.
Scott Galloway · 11:51
So that's your notion. If I turn it back to you said, if your theme is where is innovation coming from, you think it's coming from China?
Kara Swisher · 11:56
I think it's coming from not here.
Scott Galloway · 11:57
Yeah. Not here.
Kara Swisher · 11:58
Not here. Not invented here. And we invented everything. Alright. We're gonna take a quick break. Stay with us. Coming up next, we'll hear an advertiser segment from Microsoft Azure about digital mapping.
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Kara Swisher · 13:55
Alright. We're back. This is Kara Swisher. I'm with Scott Galloway. We're talking about sort of predictions for 2018, trying to wrap up and some things that Scott predicted and what did or did not come true. One of the things you talked about a lot, Scott, was, tech spins, that there was gonna be a spin of AWS, Amazon's AWS. There was gonna be a spin of Instagram. There haven't been any spins, Scott.
Scott Galloway · 14:17
Yeah. It's coming. Alright. I think I think AWS, I think it'll be done prophylactically. We talk about this, and I'm one of the... On the spin, it'll be one of the 10 most valuable companies in the world.
Kara Swisher · 14:26
I asked the head of AWS, and he said he wasn't looking for a spin.
Scott Galloway · 14:29
And what's he going to say?
Kara Swisher · 14:31
Well, see, he really was quite definitive. Was he? He said there's no need
Scott Galloway · 14:34
makes for so much money.
Kara Swisher · 14:35
Yeah, but he's already wealthy beyond compare.
Scott Galloway · 14:38
So some behind the scenes gossip. When I was on the board of The New York Times, I suggested we spin about.com because the management team had bought this thing to use it as digital earrings to accessorize an analog body. And it was growing fast. And at one point, was worth $1,000,000,000. I'm like, let's spin this thing. It's ridiculous. And I made a huge mistake. And that is I mentioned the spin to some of the people at about, and they were all like, great, we're going to be rich. And I got so taken to the woodshed by everybody else, said, don't talk about a spin. And of course, it ended up being worth, you know, 200 or 300,000,000, and they sold it for less than they bought it. But that was... Tech spends usually do really well. They look at eBay and PayPal.
Kara Swisher · 15:21
Okay.
Scott Galloway · 15:22
Instagram, I think, would be an interesting spin, although I think that's less likely. But AWS, think, is is coming down.
Kara Swisher · 15:28
Okay. All He said no. He said no. He he was pretty definitive. And he's
Scott Galloway · 15:31
That's like asking a board if they support their CEO. They all say yes until the day they fire them.
Kara Swisher · 15:36
Okay. All right. So Amazon Web Services is a spin. It would be one of the biggest companies. It's the fastest growing part of that company. That's the other part is whether it should be pulled out of that company.
Scott Galloway · 15:44
That's right.
Kara Swisher · 15:45
It would be instantly become one of the 10 most valuable companies in the world, with a huge multiple, and it's obviously in an area that's competitive, and yet they dominate... They have been dominating.
Scott Galloway · 15:53
And no pure play way to play the cloud right now as an investor.
Kara Swisher · 15:56
Right. Exactly. I mean, you you can buy Microsoft. You can buy Google. You can buy
Scott Galloway · 15:59
You have to crawl over a search engine. You have to crawl over a software company. No pure play to play.
Kara Swisher · 16:03
Well, why doesn't Google spin off its cloud business?
Scott Galloway · 16:05
That's actually a really good question.
Kara Swisher · 16:07
Yeah. They just... The the head of it just left. They have a new head of it.
Scott Galloway · 16:11
Is that right?
Kara Swisher · 16:11
Diane Green.
Scott Galloway · 16:12
Yeah. They could do they could do
Kara Swisher · 16:14
A spin.
Scott Galloway · 16:15
The same thing. But think about AWS. AWS is a market leader.
Kara Swisher · 16:18
Right.
Scott Galloway · 16:19
And it's it's growing faster. Is it growing faster? It's the market leader.
Kara Swisher · 16:23
Alright. I get... They should probably... Will spin AWS off. You say? I don't I don't... They... He said not. I was... He... I believed him. I believe... Whatever people tell me, Scott, these tech people, I just believe whatever they say.
Scott Galloway · 16:32
Okay. So one I got right, Facebook stock peaks in 2018 and it And it's off 33%. And you know what actually might go after, it might be the remedy for Facebook, is at some point if the stock keeps going down, is that you might see shareholders start to put... It might be capitalism that steps in here and fixes things because I think it peaked at about $2.15. I think it opened today at 135 or 130
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Scott Galloway · 16:55
big drop. It is a big drop.
Kara Swisher · 16:57
Okay. Where's it going? Let me give you a prediction for us.
Scott Galloway · 16:59
Well, I've already made that prediction. I think it's going a lot higher because I think all the headline news doesn't translate to a deceleration in business, and the company looks on most traditional metrics cheap. By the way, full disclosure, I own all of Big Tech because I love owning monopolies and growing markets.
Kara Swisher · 17:12
Okay. Alright. Facebook spinning off Instagram. You see them doing that? That could cause them... Give them some money?
Scott Galloway · 17:17
Yeah. That's probably less likely, but I think you're going to see... Again, I think you're gonna see a spin among big tech, prophylaxically,
Kara Swisher · 17:23
carcinogenic drugs. Not purchasing. Not buying more things.
Scott Galloway · 17:26
It's kinda hard for them to buy stuff that's... That raises any sort of DOJ attention right now. I think that there's stuff they'd like to buy.
Kara Swisher · 17:33
To spin out, not spin in?
Scott Galloway · 17:34
I think there's gonna be a big spread.
Kara Swisher · 17:36
What would they like to buy?
Scott Galloway · 17:38
That's a really interesting question. So personally, I think Netflix should buy Spotify. I think they would own subscription subscription media. Media. That would be And Spotify is down about 20% from the IPO. And it would be, I think, about a 10% dilution for Netflix.
Kara Swisher · 17:51
Spotify has not gotten into video.
Scott Galloway · 17:53
Yeah. But that's... Talk about peanut butter and chocolate. Yeah.
Kara Swisher · 17:55
That's a fair point. Oh, I like that one. Okay.
Scott Galloway · 17:57
Video and audio. Okay. And then one one subscription fee. And they'd... I think that would be super, super powerful. What do you what do you like? What do you think is that It's
Kara Swisher · 18:06
a good one. I hadn't even thought of that one.
Scott Galloway · 18:07
No? Netflix and Spotify.
Kara Swisher · 18:08
Yeah. Never thought about that.
Scott Galloway · 18:09
Yeah. That that feels right.
Kara Swisher · 18:11
I thought someone might buy Netflix.
Scott Galloway · 18:13
Really two companies that have the balance sheet now. Right. Not even Disney. Right? It's A
Kara Swisher · 18:18
while ago, I thought someone would have bought it, but they didn't. No one did. Yeah. Either they... I'm sure they were offered money. Maybe they just didn't do it.
Scott Galloway · 18:24
Yeah. So another one of my predictions, I thought Disney was gonna be a viable competitor to Netflix. It hasn't happened. I thought Disneyflix was gonna launch, but instead they're trying to figure out, it's the innovator's dilemma, how they protect these businesses. So they're talking about these subscription based verticals, so in sports and in kids. And they need to take a lesson from Netflix and just offer Disneyflix. So seven days early, access on the next Star Wars film, your best cabins on Disney cruises.
Kara Swisher · 18:51
Do you think they have the innovation and energy to do that?
Scott Galloway · 18:55
I think Disney's remarkable.
Kara Swisher · 18:56
Okay.
Scott Galloway · 18:56
I think they're remarkable. The problem is they have current investors and they want to change a tire going 60 miles an hour and not, and maintain their current profitability. And they have to hold hands, and Bob Iger is one of the few people that has the credibility to do it and say, we're gonna say profitability weighed down, but we're gonna be in 20,000,000 households with one recurring revenue Disney like product. And unfortunately, it doesn't look like they're
Kara Swisher · 19:17
gonna there. Comes into your other prediction about the Rundle, the revenue bundle. Recurring revenue calling it? The Rundle?
Scott Galloway · 19:22
The Rundle. Is that awful? Need something better.
Kara Swisher · 19:24
Like something Amish people do on their wedding night.
Scott Galloway · 19:27
I that's the dirtiest thing I've ever heard you say. Baby, it's it's Rundle time.
Kara Swisher · 19:33
So Scott, despite the fact that you're using it as a strange sexual term, what actually is a Rundle?
Scott Galloway · 19:39
So it's a shitty it's a shitty term that means recurring revenue bundle. I need something better like brundle or... But you know, recurring revenue bundle.
Kara Swisher · 19:46
Okay.
Scott Galloway · 19:47
So there's a lesson here. And that is we as humans don't understand the pace of time. And that is we constantly underestimate it. I go Equinox, $150 a month. I work out three times a week. So it's 12 times, $12 a workout. The reality is I work out once every six weeks. It costs me $200 Okay. To go hang out at Equinox once every six weeks. So you want a business that's tied to the clock. And how that translates to a business model is recurring revenue. Okay. And that's why software companies and syndicated research trade at a multiple of revenues. And shitty companies like media that are transactional or retail where you have to reinvent your business every 20 four hours Right. Traded a multiple of EBITDA. So I think every company that adds more than $510,000,000,000 in value in 2019, the fastest growing part of their business is going be a recurring revenue.
Kara Swisher · 20:33
Recurring the relationships Netflix they
Scott Galloway · 20:36
is recurring revenue.
Kara Swisher · 20:37
Recurring revenue.
Scott Galloway · 20:38
Spotify is recurring revenue.
Kara Swisher · 20:39
Have thing. Recurring revenue.
Scott Galloway · 20:40
So every business in America that's over 10 or $20,000,000,000 and wants example, Restoration Hardware and Gary Friedman was considered a technological Luddite, but probably the best merchant in the last 20 Restoration Hardware membership program, are you a member of that? Yep. It seems like something you would do. No. No?
Kara Swisher · 20:59
No, don't know.
Scott Galloway · 21:00
It's 100 or $150 here, 95% of their transaction volume. They've grown their revenues 20% or 30%, but their stock is up 150%. So every company is now sitting looking at the board saying, how in a low growth environment do we grow our revenues 20%, maybe 30% over the next five years but double our stock price, which doesn't make sense. The only way you can do that is through a different business model. And that all points to one direction, that's recurring revenue.
Kara Swisher · 21:24
How do we get recurring revenue, Scott?
Scott Galloway · 21:25
So how would we move to recurring revenue? This is the thing you need in recurring revenue, and that is you have to be like Adobe who did it. They used to sell Macromedia Director for 1,200 or $1,300 and they said, we're just going to start charging $25 a month. First off, you need real leadership because you've to take profitability down. Second The thing unfortunately you need that's the harder part is you need massive capital. Because in order to get people to commit to a long term relationship I think everything comes down to as you can probably tell biology and sex. And in order to get someone to commit
Kara Swisher · 21:51
I'm waiting for this one. Go ahead.
Scott Galloway · 21:52
Here it comes. Let's rundle, baby. Anyways, if you... But think about it. In order to get to get you into a monogamous relationship,
Kara Swisher · 22:01
it Yeah.
Scott Galloway · 22:01
There has to be a lot on the other side. To say I'm giving up all the rest, it's like that William Heard movie, The Year of Living or Eastern Promises. Okay. Well, not Eastern Promises. Whatever. Anyways, he says, William Heard is this total mobster, and he says, I've just never met one that made me wanna give up the rest. So Right. In order to get someone to enter into a monogamous resistance relationship, you have to offer them a lot. And the way you do that was just with an unbelievable offering. So Netflix, a billion dollars of content for every $1 a month. So how do we do it? Vox would need to come up with substantial capital and figure out a way to charge people a monthly fee for access to their content, put it behind a wall, take profitability way down, and pray that people start pulling out the credit cards. But on 50% of the revenue, they could have three times the value. But you have to cross the precipice and hold hands and go through the fire and be armed with a massive amount of capital to convince people to enter into this, again, this monogamous
Kara Swisher · 22:54
business But not everyone has that. Like Nike, you could see that. You'd want to buy their whole you believe in the Nike brand, for example. Or a blank brand.
Scott Galloway · 23:02
I don't know if you're having
Kara Swisher · 23:03
Whole foods could For be a relationship you might want to your
Scott Galloway · 23:06
health, right? And say, but even take Nike out.
Kara Swisher · 23:09
Amazon would be Whole Foods, right?
Scott Galloway · 23:11
I'm having problems with my knee. I'd rather go to an orthopedist that's Nike approved, that maybe claims to understand more about aging athletes. I would love a Nike, a set of pre approved ingredient branded Nike hotels that have a certain level of quality of gym, maybe have your vapor shoes there, whatever they're called, have concierge that's focused on fitness, and food that's just not like prediabetes turned into a menu. So I think there's opportunities. There's a series of brands that would let you say, okay. Take me off the table. I'm yours. I love you, and I'll enter into this long term relationship. That's my... I think that's huge. I think every company including
Kara Swisher · 23:49
this one is really about thing. I think my prediction for next year as we go on and we talked about is these IPOs that are going to happen with finally, we're back in IPO land with some of
Scott Galloway · 23:57
And what do you think is the biggest Uber. Uber. Okay, that's the biggest
Kara Swisher · 24:01
step. Airbnb.
Scott Galloway · 24:02
Does that work though?
Kara Swisher · 24:02
I don't know.
Scott Galloway · 24:03
I mean, if Uber doesn't come out at $120,000,000,000 do think the markets they have Uber has to come up with the ability to say we're a platform and start delivering food or finding other businesses that are more out of world.
Kara Swisher · 24:14
Oh, Uber Eats is becoming really quite substantive. Yeah.
Scott Galloway · 24:18
Do you use Uber Eats?
Kara Swisher · 24:19
I do. I... It's interesting. It's a big... It's between them and Caviar? It GrubHub? Well, Caviar is no. That's not a strong player.
Scott Galloway · 24:24
That's been
Kara Swisher · 24:25
owned by Twitter still.
Scott Galloway · 24:26
It is owned by Twitter.
Kara Swisher · 24:26
Yeah. Which is weird.
Scott Galloway · 24:28
I love it, by way.
Kara Swisher · 24:28
Love But the the other ones are Grubhub and was the other competitor. Then Postmates. Got it. And there's another one. There's another one. DoorDash.
Scott Galloway · 24:40
There's a lot
Kara Swisher · 24:41
Yeah. Of market for DoorDash, think, is one of the bigger ones because they've got a lot of deals with, the Chipotles of the world and stuff like that.
Scott Galloway · 24:47
So you're talking about IPOs. Have Airbnb, Uber, Pinterest. What are supposed
Kara Swisher · 24:50
to Maybe be Pinterest.
Scott Galloway · 24:51
Don't know. You don't think Pinterest gets out? I don't know. Supposedly it's a billion in revenue. Yeah, it's if Conde Nast reinvented itself for a digital age. I like that other one, Houzz, I
Kara Swisher · 24:59
don't know,
Scott Galloway · 24:59
Houzz Houzz on You've met
Kara Swisher · 25:00
her, the CEO is the one who's really great.
Scott Galloway · 25:03
That's super impressive. So what if you had to if you were going to buy money in the private markets right now banking on an IPO that pops, which is your favorite?
Kara Swisher · 25:11
I I don't know they pop, but I think Airbnb, if they execute it correctly. If they execute it... If they get into, like, they're they're thinking of a travel more than travel in for content they're thinking about, which is kind of adjacent, not just the magazine, but other travel content. Yep. You know, you could see them... If they did it right, if they did... But they're, you know, they're running into more competitors. That's the issue is they run right into... If they start to get into planes and everything else, that's a that's a buzzsaw. But that that means they have to execute beautifully.
Scott Galloway · 25:37
They could potentially... Airbnb would
Kara Swisher · 25:38
be They are classy, though. They're classy.
Scott Galloway · 25:40
A decent nominee for most innovative company of 18. Their Airbnb experiences Yep. Where they
Kara Swisher · 25:45
merchandise But it's big yet. It's not big yet.
Scott Galloway · 25:47
But it's growing.
Kara Swisher · 25:48
I know.
Scott Galloway · 25:48
5000% a year.
Kara Swisher · 25:49
Yes. It's... That's the thing. It's dollar to do. They do is well done. So I always like a company. I I use their products a lot as a consumer, and I like them.
Scott Galloway · 25:58
Have you used their luxury offering where they have someone help you check-in and
Kara Swisher · 26:01
I match have. Your I like it. It's well done.
Scott Galloway · 26:02
So tell me about it. What is it?
Kara Swisher · 26:04
I don't use Airbnb as well much. Done. It's just I've used... It's... They're plus properties. I'm about to use one. I've used them a couple times, and they're great.
Scott Galloway · 26:10
So you like Airbnb. You'll stay at Airbnb over in a hotel? Yes. And why is that?
Kara Swisher · 26:15
If they got into hotels, I would use their hotels.
Scott Galloway · 26:17
But why? What what is that about?
Kara Swisher · 26:19
Everything they do is easy. I just click on it. It's just like I... I'm I'm looking for a place for the summer, and I looked at
Speaker · 26:24
the RVO and others and different things.
Scott Galloway · 26:26
And You like Airbnb?
Kara Swisher · 26:27
I like their selection. I like the way it looked. I like the way the site worked. I liked I liked my credit card there. I had a problem. It was solved in a second. The place I was renting, there was some construction going on next door, and the person who was renting told me they don't have to necessarily, but they did. And I was able to unbook... And when when she was... If she unbooked me, she would have lost a point as a special member, yeah, with a special host or whatever. And if I had unbooked, I would have lost a certain amount of money. So Yeah. But there was no... There was a real problem there, but that I didn't wanna stay somewhere. There was backhoes in Hawaii. And so they just handled it well. They're just... I mean, maybe some carrots. So sure. I don't know. But it was just like... It's just an easy platform to use, and I like the platform. And it sounds like an ad for everyone, but I use it a lot. I'm trying to think of things I actually use. I use the New York Times app. I use Airbnb. I use Amazon. I'm trying to get things at heart. Uber? Yes, I do. It works really well.
Scott Galloway · 27:20
Yeah. My Airbnb I don't use Airbnb, but I have a story. I used it once in Geneva because I couldn't find a hotel. But I live in, or just until recently, lived in faculty housing, which is the ugliest blocks, the ugliest buildings in Manhattan that looks like public housing in Gdansk, Poland. But once you get to a certain level of whatever it is we are, you get faculty housing. So I'm in faculty housing and I said, oh, I should put it on Airbnb because I'm out of town a lot. We had all these pictures taken put on Airbnb. Like within six hours, I got a letter from the housing department, NRA students saying you violated housing policy. We're kicking you out of faculty housing.
Kara Swisher · 27:53
Oh my God.
Scott Galloway · 27:54
And I had to call the dean and go, this hurts my feelings. This hurts my feelings. And they backed down. But anyways, I almost got kicked
Kara Swisher · 27:59
out of faculty housing. All right. So you're trying to do a scam.
Scott Galloway · 28:02
I didn't know. Alright. I think
Kara Swisher · 28:04
about putting my places on Airbnb. I just think I never would think of that. And I don't... You know?
Scott Galloway · 28:08
As long as you're not in faculty housing yourself.
Kara Swisher · 28:10
I'm not. I own my house. I just don't want people in my house. That's my issue. It's like, I actually want people
Scott Galloway · 28:14
I think you should brand it. Carrie Swisher's house. I think you'd a premium.
Kara Swisher · 28:17
My thing.
Scott Galloway · 28:18
Such Come in. See how I live. See my cats.
Kara Swisher · 28:21
No. There'll be no cats there. I would not leave my cats. Yeah. Like, people from Airbnb. Anyway, that's gonna be an interesting IPO. The Uber IPO is gonna be interesting. We'll see how that... How the market... If there's a... The big... The small r recession Yeah. Or the big r recession, it's gonna be an issue. That'll affect everyone this year. And I think that's the last thing we should talk about recession. If there is, we're all sort of screwed. Correct?
Scott Galloway · 28:42
Well, isn't it time? Carl Quintanilla at CNBC... By the way, do they they keep inviting you back? I haven't invited
Kara Swisher · 28:48
back. Weekly.
Scott Galloway · 28:49
I used to be too.
Kara Swisher · 28:50
I'm on track with them.
Scott Galloway · 28:51
Oh, you do? They don't
Kara Swisher · 28:51
invite me.
Scott Galloway · 28:52
So you get paid? Yeah. Okay. I'm free, and they don't invite
Kara Swisher · 28:54
me back. Right. Maybe you're
Scott Galloway · 28:55
just By the way, CNBC, you
Kara Swisher · 28:57
We're hurt fighting my conference.
Scott Galloway · 28:59
Anyways, yeah, got that going for me. Great. So the where were we? Oh, these guys, like Recession. Recession, a little r. Okay.
Kara Swisher · 29:07
Where where did we get from Carl? What's your, I don't understand, why
Scott Galloway · 29:10
are we Oh he mentioning put out a great tweet this morning, apologies, put out a great tweet this morning saying did we really think this was gonna unwind easily with all this quantitative easing, the unbelievable market ascent we've had over the last ten years. I read this tweet and I'm like, oh god, I wanna sell everything because he's probably right. But yeah, it's time. I just hope we time it perfectly such that the president gets blamed for it.
Kara Swisher · 29:30
Right. Yeah, it's On that note.
Scott Galloway · 29:31
It's definitely
Kara Swisher · 29:33
So I think that will affect the IPOs, it'll affect all these businesses.
Scott Galloway · 29:37
You realize there's about one third or two thirds fewer stocks than there were thirty or forty years ago. So I think a lot of these companies are signaling that they might so I think Pinterest, who's threatened to go public every year for the last five years, is basically saying we're for sale, come bias. Yeah. Because I don't think their revenue has accelerated as fast as they had originally projected. The projections around Pinterest revenue five years ago, but they'd be somewhere between 3 and 5,000,000,000 now. And they're only at 1,000,000,000, which is still an incredible company. And I'm shocked no one's just shown up and offered a Me Too product like Zuckerberg and just put them out of business. Yeah.
Kara Swisher · 30:07
He's busy.
Scott Galloway · 30:08
I don't think that company ever gets public. I think they're basically raising their hand and saying, you know, a lot of them. Rent the runway. There are a lot of these companies who said they were gonna go public or have threatened to go public and can't quite seem to get out. So I don't think... I think maybe one or two of those guys get out.
Kara Swisher · 30:21
Get one or two and then the rest get bought. Or
Scott Galloway · 30:24
Yeah. Or just continue to, you know, decide the timing's not right or whatever.
Kara Swisher · 30:27
Yeah. Just wait it out.
Scott Galloway · 30:28
Yeah. That's right. Because we're we're only... We're gonna end up with It's tough. Four
Kara Swisher · 30:31
It's gonna be kind of an year next year.
Scott Galloway · 30:32
We're gonna end up with five public companies.
Kara Swisher · 30:34
Your prediction is an year.
Scott Galloway · 30:36
It's tough. It's tough to get out. We'll see. I'm hopeful. Yeah. But I don't I don't know.
Kara Swisher · 30:40
Alright. My theme, wither innovation. Where does innovation come from? That is gonna be my theme for 2019.
Scott Galloway · 30:44
Yeah. But you said... You you referenced it geographically. Yes. Be geographic. Okay. But I would argue that the center of all innovation and no company can create more than $10,000,000,000 in value in a year unless it's a bike ride from university and that we need a massive investment in universities. That's where I think innovation happens is right around in and around a university. That will
Kara Swisher · 31:04
be one of the many things we'll discuss next year.
Scott Galloway · 31:06
Okay. So geography. What about culture? What about culture inside of a company? What's a culture of innovation?
Kara Swisher · 31:10
Oh, I don't know. That's a big topic, Scott.
Scott Galloway · 31:12
That is a big topic.
Kara Swisher · 31:13
That is a big topic. You know, just depends. It's certainly not what's going on on Facebook. There's a lot of morale problems there right now.
Scott Galloway · 31:17
And so that's an interesting question though. So Facebook Watch, it sounded I read an article on it, it actually sounded pretty innovative and pretty like they were doing a pretty good job. I thought, my god, it's impressive. Anyone gets anything done over there right now.
Kara Swisher · 31:29
Yeah. Well, we'll see.
Scott Galloway · 31:31
Have you thought about a Facebook Watch program? No. Never. Now my team watches you on that damn Twitter thing where you just talk and then the
Kara Swisher · 31:37
They love it. I'm doing it tomorrow. Or maybe today. I might do it today. I might do it now from NBC Headquarters. From
Scott Galloway · 31:42
NBC Headquarters.
Kara Swisher · 31:43
Yes. I am. I'm gonna wander around SNL and search for Kate McKinnon and ask her out on a date. What do you think?
Scott Galloway · 31:48
Jimmy Fallon. Actually, Kate McKinnon. She's she's the... Wow. Is that... She's an incredibly impressive
Kara Swisher · 31:55
talent. I'm just gonna wander around.
Scott Galloway · 31:56
What a talent. Gonna wander?
Kara Swisher · 31:58
No. What do you you think? All lesbians know each other? No. Jesus Christ.
Scott Galloway · 32:02
So I had all sorts of answers for that, and I decided, you know, I'd rather not end my career, and I kept it to myself.
Kara Swisher · 32:07
Yeah. Keep it to yourself. In any case, Scott, happy 2018. I'm looking forward to 2019. This has been a bad year.
Scott Galloway · 32:15
And I hope you get to Rundle Kate McKinnon. I'm sorry. I'm sorry. Excuse me. Put that back in. Where's my comfort monkey? Where's my comfort monkey?
Kara Swisher · 32:24
Alright, Scott.
Scott Galloway · 32:26
By the way, you, me, and Kate McKinnon Scott. I think enough. South Beach
Kara Swisher · 32:29
That's enough, Scott.
Scott Galloway · 32:30
We could kill it.
Kara Swisher · 32:31
Is enough.
Scott Galloway · 32:32
We could just slay it.
Kara Swisher · 32:33
And say your rude and obnoxious
Scott Galloway · 32:36
thoughts from 2009. They're like, look at the old Can
Kara Swisher · 32:39
I just tell you, me too is not over, Jess? Let me just tell you
Scott Galloway · 32:42
that. Christ.
Kara Swisher · 32:43
Anyway, we'll be back in 2019. Thank you so much, Scott.
— Predictions segment ends —
Scott Galloway · 32:47
Thank you, Kira. I hope all
Kara Swisher · 32:48
will back next week and into the new year. Rebecca Sinanis produces a show. Nishad Kerwa is Vox Media's executive producer of audio. Thanks also to Eric Johnson. Thanks for listening to Pivot from Vox Media. Join us next week for more of a breakdown on all things tech and business. If you like what you heard, please subscribe on Apple Podcasts or wherever you're listening. Keeping up with your competition is important. Taking the lead with unmatched innovation, that's impressive. And that's what's possible when you build your next generation of smart apps on Microsoft Azure. Clear the way for unparalleled productivity with end to end development and management tools. Integrate cloud capabilities across your environment with the only consistent hybrid cloud. Discover transformative insights through artificial intelligence and real time data and scale across more global regions than you'll get from any other cloud provider. Because every business in every organization, small and large, old and new, has something to gain by reaching beyond the limits of an on premises data center. What will you achieve when you come to the cloud? Get started with a free account and twelve months of popular services at azure.com/trial. That's azure.com/trial.
