Pivot - Going after venture capital culture and the unicorn industrial complex

Episode Date: October 11, 2019

Kara and Scott talk about feuds with VC's, billionaires paying fewer taxes than the working class and tech companies folding to Chinese state media pressure. They take a listener mail question about Sidewalk Labs and the right way to make smart cities. They're concerned with the Turkish president's use of Twitter to announce an invasion of Syria. A win is Andrew Yang's $10-million boost in Q3. And Kara comes with her own prediction this week, that Michael Bloomberg is going to jump into the presidential race. (Also a big warm welcome to the Pivot team's newest favorite member, Kara's baby, Clara Jo!!) Learn more about your ad choices. Visit podcastchoices.com/adchoices

Support for Pivot comes from Virgin Atlantic. Too many of us are so focused on getting to our destination that we forgot to embrace the journey. Well, when you fly Virgin Atlantic, that memorable trip begins right from the moment you check in. On board, you'll find everything you need to relax, recharge, or carry on working. Buy flat, private suites, fast Wi-Fi, hours of entertainment, delicious dining, and warm, welcoming service that's designed around you. delicious dining and warm, welcoming service that's designed around you. Check out virginatlantic.com for your next trip to London and beyond and see for yourself how traveling for takes forever to build a campaign. Well, that's why we built HubSpot. It's an AI-powered customer platform that builds campaigns for you,

tells you which leads are worth knowing, and makes writing blogs, creating videos, and posting on social a breeze. So now, it's easier than ever to be a marketer. Get started at HubSpot.com slash marketers. Get started at HubSpot.com slash marketers. Hi, everyone. This is Pivot from the Vox Media Podcast Network. I'm Cara Swisher.

And I'm Scott Galloway. So, okay, before we get into my favorite topic, me. So, a beautiful little girl. Congratulations, Cara, to you and Amanda. That's wonderful. Yeah. I have some advice for you. Thank you. Cara, to you and Amanda. That's wonderful. Yeah. I have some advice for you. All right.

Oh, my God. But first, I give— You know, I have children, so I have some experience in the children department. Yes, but I've had children more recently. All right. Okay. You know, there's actually— Would they change? This is a biological fact.

A hormone releases—it's like starting a business or writing a book and having birth are the same thing, and that a chemical hormone is released that gives you amnesia around how awful having babies are. It isn't awful. What is this drama? First off, I have advice for new dads. Who's the dad in the relationship? And I realize that's probably a hate crime. Yes, it's incredibly sexist.

Oh, but even more sexist? Which one's the man in a lesbian relationship? I have tests for this. I have two tests. All right, okay, go ahead. If there's a really tight parking spot, who parks the car? Me. Okay.

And who gets the big piece of chicken? The big piece of chicken? Like if there's a bigger piece of chicken on the plate, who gets it? There's no argument over chicken in this relationship. Anyways, those are my two tests for who the dad is. That is an insane set of— Let me help you out here. I don't know if it's sexist or stupid.

Yes. The answer is yes. Okay. So advice to new fathers, right? I do build the things, but I just like building them. Advice to new fathers. I've had kids more recently. The first thing is you need to know. I'm a cool mom is what I am, but go ahead.

You need to know babies suck. No, they don't. No one. No. No one. Okay, total evidence. Yeah. No one will hang out with babies except the mom and people who are paid to hang out with them.

Other babies won't even hang out with babies. Well, I do it every week here on Pivot. And then there you go. I'm trained. Oh, that's a good one. Burn, burn. And then they get, but here's the good news. They get less and less awful.

And then they refuse, they can't put their shoes on, and then they refuse to put their shoes on. But here's the thing. It gets less and less awful every day. This is so wonderful. And also, it's nice that emotionally secure, economically secure, good people are having kids. I think that is the most hopeful thing. I also think it's really nice that you're having kids at your age because you're older than me. You're the Tony Randall of lesbian journalism.

Seriously. Did you just reference Tony Randall? Does anyone who listens know who that is? He's like, he had kids at 73. Did he? Okay, you're the Martin Sorrell of tech journalism. Let me just explain something to you. That is awesome.

I am young at heart, and I can have babies any time. No, and you look good. But just keep in mind, when the kids—you'll be teaching this cat how to drive when you're in weight. When do you think? Dead. 105. 105. Approximately dead.

It's fine. Yeah. I am good at— That is exciting. I love the children. I love it. This is the best baby, 105. Dead. Dead. 105. Approximately dead. It's fine. Yeah. I am good. That is exciting. I love the children. I love it. This is the best baby too. It is not that hard.

I know people want it like, everyone's like, oh, is it going badly? I'm like, no, it's going great. People don't want to hear that. Everything's great. Good for you guys. It's really good. The baby sleeps. Great delivery.

Oh, in two words. It's amazing. My last two pieces of advice. First is night. Second is nurse. Overresource the shit out of that thing. I get that. She's not so hot on the night nurse thing.

But we'll see where it goes. It's fine. The baby's great. Listen, I have no complaints. Beautiful baby, healthy baby, a little bit early. But I'm very happy with the situation. And now I have a girl, which is making me absolutely convinced. My goals on this planet are to make it equitable for women and men to behave correctly in the world.

I now have even more. I have two sons who are wonderful, and I now have a daughter. So it means a lot to me that the world's a better place. But speaking of babies that you're pissing off, a lot of VCs on Twitter that I know in Silicon Valley. Yeah. I don't know these guys. Tell me. Give me their biographies.

Well, you have Jason Calacanis and Keith Raboy, both whom are pretty loudmouthed venture capitalists in Silicon Valley. Jason, of course, is well-known for Silicon Alley Insider. He does the launch. He's done all kinds of – he's kind of a media person. He had a whole bunch of companies. Well-known Tesla owner. Keith is a longtime entrepreneur and venture capitalist. He's been around PayPal, a whole bunch of companies, a well-known Tesla owner. Keith is a longtime entrepreneur and venture capitalist, has been around PayPal, a whole bunch of stuff. And both of them have been on my podcast.

Oh, they have? Yes, they have indeed. And for some reason, did they go after you? Explain what happened. Should we do an original reading of what happened? Yeah, but let me provide some context. So first off, I did not know these guys, so I pulled up Jason's book, and it's something about angel investing. He has a lot of books, yeah.

But the subtitle is How One Man Turned $100,000 Into $100 Million. Okay. So if you're friends, I think we scrape together $100,000 and give it to Jason because he can turn it into $100 million, and I could use the $100. I'll give you $51 if I can have $49. And then Keith Rabois, how do you say his last name? Rabois. I can have 49. And then Keith Rabois.

How do you say his last name? Rabois. Yeah. He is the most successful venture investor in history. And you know how I know that? He tells you. He tells people on Twitter that he's the most successful venture investor. Anyway, so I wrote a piece.

They're the louder venture capitalists, I would say. Yeah. So I wrote a piece last Friday. No mercy, no malice, talking about SoftBank and Masayoshi Sano, where I basically accused Masayoshi Sano of being a money launderer. I talked about how our democracy was fraying. Yeah. But the thing that invoked— I don't know why this would bother them, but go ahead. The thing that invoked the most crime against humanity reaction was I actually suggested

that some of the portfolio companies of these guys might be overvalued. And so this is a crime, this is literally a crime against humanity. And they weighed in and be very aggressive, you know, discrediting me, you know, intimidating others with their money, constantly talking about their success. And it got, it just struck me. He called you irrelevant, correct? No, no, not just me. There was actually some interesting discourse. Someone pointed out Tesla's market share, which I thought was interesting. Someone else was talking about. Jason's a big friend of Elon's and a Tesla investor, also an Uber investor. He's also an Uber investor. Yeah. And then, of course, I said,

if you don't stop threatening Professor Gallery, I'm going to, you know what I'm going to do to your friend. Yeah, I appreciate you weighing in. And then they're like, big sister. Yeah, I know, big sister came in and started yelling at him. But I actually will damage their Teslas. Well, no, but I want to make sure I didn't get this right. Keith Robo's exact tweet was, I said, I didn't have insider exodus, but I've co-founded nine firms. And he responded, any of them successful, question mark, definition, 10 billion or more,

or change the world? We'll change the world. So there you go. We got or change the world? We'll change the world. So there you go. We've got to change the world here. Right. We've got to change the world. They're arrogant. They're arrogant.

And it's just this idea that they hung the moon and there's nothing they could do that's wrong, and that's typical. But speaking of which, talking about, you know, the expression is they're born on third base and they think they hit a home run almost all the time. Scott, for the first time in history, billionaires paid lower tax rate than the working class. Hmm. Two.

Hmm. You know what I'm doing there, Tara? I've been listening to podcasts that try to up my game, and the only thing I've taken away is that the most famous podcast daily, all that guy really does is occasionally goes, hmm. Anyways, so. Two economists in the University of California, Berkeley, released a study of the average tax rate paid by the 400 richest families in the country, which I assume includes you, was lower than the rate. I'm 401. I just missed it.

Was lower than the rate paid by the bottom half of American households. Just so you get some numbers, because I know you need, you like data, Scott. Yeah. The wealthiest 400 families had a 23% tax rate, which was down from 47% in 1980. And in 1960, 56%. The working class tax rate remains the same, around 24.2%. Wow. Yeah, and if you start doing kind of the math, I've been helping my 12-year-old with his math, and it's like solve for. And if you look at solve for, bottom 50% have had the same tax rate, and the top, the 400 wealthiest households in America have gone from 60 to 40 to 20. And yet, our government spending

has stayed static. And that means who's paying for it? And the answer is debt. So, what we've decided is that our new gross idolatry of the dollar has translated into cutting taxes for the wealthy. The taxes haven't gone up or down for the rest of us for the most part, but they've gone dramatically down for the wealthiest Americans in America. And we haven't increased our GDP spending or our government spending hasn't gone down either. So this all translates to additional debt. And when you think about debt at its most simple form is that we're pulling prosperity forward for all of us. And so what this really means is, this translates, is that we've decided to not pay it forward, but borrow

it forward and pull the prosperity of our children and our grandchildren forward to lower the taxes for the wealthy. It's also really stupid for people in the top 0.1 percent because there is a very basic dynamic, and that is when nine families are worth more than the southern hemisphere, the southern hemisphere figures out a way to take away their money. And it's happened across nations everywhere repeatedly, especially in Central America, where a small group of wealthy people make incremental rationalizations to not share their wealth, co-opt the government, and then ultimately someone shows up at the door and says, you need to leave within 24 hours or we're killing you and your family.

And then a new government comes in that's totally fucked up and socialist and fascist, and it all starts over again. You know, what's interesting is that it's very similar to what you're talking about, Jason and Keith. We know better. We know we deserve the money we get. There's no fix in the system. We didn't get this because of a fix.

We're not trying to pawn off shitty companies onto people and then acting like we're smart, and when things go wrong, we don't take responsibility for them. It's really a rationale of wealthy people, which is some people absolutely deserve the money they get, and they made it. We need billionaires. Jeff Bezos, from nothing, Jeff Bezos created that company.

But now he's getting advantages. You know what I mean? Like, it doesn't take away from his accomplishments to say he doesn't deserve extra special advantages right now. Look, it isn't the fault of these guys. You'd like to think that they're bigger. You'd like to think that they'd have more humility and recognize their blessings and kind of, you know, there for the grace of God go I. I think the real problem is our government has lost the ability to prevent a tragedy of the commons. And that is, and I relate to this, if you tell a 30-something-year-old white guy he's Jesus Christ,

he's inclined to believe you. And then when he gets access to his senator, all of a sudden, I'm getting access to senators. And I'm starting to believe it's because I'm just fucking awesome, not because I'm wealthy and I'm starting to give money to senators, which is the reason I now have dialogue with senators. And then when I start to get a $10 million, my first $10 million in the company I sold tax-free, I think, well, it's because of my genius. I will always talk me into believing I'm just a fucking genius. The problem is we're supposed to think long term and elect people that would say, you know what? It really doesn't make any sense to have these incredible tax deductions and lower tax rates on billionaires. And we have a government that is not preventing a tragedy of the commons.

But expecting, you know, we'd like to shame people into calling on their better angels. It doesn't typically happen. What's interesting, what happens is they get together and say that we'd like to shame people into calling on their better angels. It doesn't typically happen. Yeah, what's interesting, what happens is they get together and say that we're going to give it all away. We're going to do these convoluted charities where they control everything. Put a big name. And then say, thank you so much. Thank you so much. Like, I don't want to thank them.

I'd just like to tax them. That's all. That's 100%. It's the Pablo Escobar effect. He sponsored soccer teams and built parks. But there is, I think it's the government's, you know, I think the government or the citizenry has a responsibility to elect people who will get rid of this nonsense. It's incredible. We are now officially a regressive tax system. We have a lack of discourse around social media where it's not, let's learn from this disagreement. Let's shame people. And my money is my virtue. I show up with more money, so I'm right. Yeah, it's interesting. And there are good

arguments to be had around over-regulation and everything else. It just moves off to other things. And I think all of us, anyone who's ever created a company knows regulation really can really be a hindrance in a bad way because it's not smart. But at the same time, certain tax-paying things are not. Everyone deserves it. I'm an anti-regulation guy. Let's have one tax. All right? Let's do what Reagan did. Let's get rid of the capital gains tax, which goes, tax deduction, which goes to rich people. Let's get rid of mortgage tax. Who owns homes? Rich people. You could absolutely take— Well, they've done that in California. You could take—that's right, they have done that. You could take a lot of regulation out to try and create—complexity favors the wealthy. Yeah, it does.

Because we can afford accountants and strategists. So, yeah, I think there's a huge opportunity to take regulation out and free up and create some sort of leveling up, if you will. Well, they also have a lot of lobbyists, so I don't think it's – speaking of which, you know, in terms of how these companies behave from an ethical point of view, Scott, Apple had taken down its app that was used by Hong Kong protesters to track police. HKmap.live from the App Store was approved by Apple. And then because authorities in Hong Kong said protesters were using it to attack the police, Apple took it down because it was facing mounting pressure. Apple took it down because it was facing mounting pressure. Obviously, the NBA got into it over the tweets that one of their coaches put up. And it's the latest tech company to get embroiled. But all these media and tech companies which have business in China are really – it's really going to get ugly, I think, for those businesses that are entwined in China.

Yeah, it's just so – to a certain extent, all the woke washing that's gone on, you have companies now are expected to weigh in on this. And there's something about sports teams where people very closely link them with America and take very seriously what they say. If a smaller company had said something like this, or even a bigger company, I'm not sure they would have gotten the blowback. But we hold sports teams or sports franchises very dear to kind of a representation of America. And so the scrutiny there is pretty difficult. But look, at the end of the day, they chose money over principles. And

a lot of companies do that. The NBA's charge is to grow shareholder value. I'm not sure it's there to protect American values. They were trying to roll it back a little bit. They were trying to walk it back, right? Right, yeah. Look, it's a tremendously difficult position for everyone involved. And I find the MBA commissioner is a pretty thoughtful guy. He's – that can't be easy. What does Apple do? What does Apple do?

Like, it's gotten huge. What do you do? What would you do if you were running one of those companies? You know, to be blunt, I just don't know. I think this is why they get paid a lot of money. I think it's a very difficult position. And, you know, I think they'd all like to go back to the days where there's no politics involved. Well, that's not going to happen.

Today, this week, President Erdogan, he's not a professor. That hurts. I know. Turkey announced via Twitter he would be invading Kurdish-held section of northern Syria after Trump sort of let him do it. Yeah, invited him in. Where they want to house serious refugees. So, again, where is Jack Dorsey here? Like, this is, like, stuff is happening on his platform that is killing, that people are dying of.

Yeah, they don't. Look, whether it's the Biden kind of conspiracy theory that Facebook's running ads on, again, there's a fairness. There's an honest advertising act that was proposed in 2017 that Mitch McConnell has refused to come up for a vote. That would be a start. Jack Dorsey has got – the good folks at Twitter have more running on Trump's presidency than anyone else in terms of their own economic well-being. It's just strange that people are – world leaders are now announcing invasions via Twitter. It's also just incredibly— They're good about this. They're governing via Twitter. It's just crazy, right? And then what's also really disappointing is that America,

who gets it wrong all the time, but we're pretty good at when, you know, the American ambassador, who has made a lot of the wrong decisions in Saigon waited around until all of the allies tried to. And I'm sure people are going to correct me on this. But we waited around and we tried to get our allies out of Saigon, recognize they were going to be murdered if they stayed. We have taken our alliances and our allies very seriously. And when someone via Twitter and some sort of half-baked notion comes out and says we're going to turn our back on our allies, it's not only the wrong thing to do. It absolutely diminishes our power and influence moving forward. Well, I think Trump is the only one who did it.

He got attacked even by his bosom buddy, Lindsey Graham, which was interesting. Of course, who's a revolting person as he shifts back at, well, like a weather vane, you know, support Trump. Oh, come on. He's this show's favorite lesbian. By the way, that's your term, not mine. That's your term. Lindsey Graham. He's no lesbian.

We don't want him in our group. Whatever. I don't know. I have no idea where that guy comes from in terms of his principles. I can't figure it out. But you've seen a lot of our men and women in uniform just horrified by the notion that we're walking away from people who have risked their lives and stood shoulder to shoulder with us? And the last thing I want to talk about is the Matt Lauer thing.

Oh, gosh. Mr. Media, tell me. It's so dangerous for a white male to ever comment on anything of this nature. The impact of this book, this Ronan Farrow book, Catchin'. I was at the famous Woodward interview with Jodi Kantor and Megan Tewy. What did you think of the Woodward interview?

You wrote something on that. Oh, it was horrifying to be there. I had my sons there. I brought my sons because I thought it was important that they hear

these two amazing reporters. But what upset you about it? I saw your article on it. His obsession was sex when it was about power and the two women reporters and not because they were women.

Two reporters were like, do you understand the latest in gender issues around the work? It's a workplace issue. It's a power issue. And he kept coming back to sex. And then he kept asking it as if he was like Mr. Watergate,

but it wasn't appropriate. And the crowd went crazy and started attacking him appropriately, by the way. I don't love a heckler, but boy, were they right. And it just was like one of the most tone-deaf interviews I've ever seen in my life. And it was so frustrating. It was interesting to have my kids there. And even they're like, what is he doing? Like, they even understood the latest in gender issues around the workplace.

So it was really, it was disturbing. And, of course, it sort of pointed out the issue. But this Matt Lauer thing, besides his speaking of boneheaded response to it, to the issues of whether he raped someone, was problematic. But I think it has more repercussions at NBC and all through media. I think it's going to be – it's going to keep on – this – Ronan Farrow is a one-man wrecking ball in terms of – Oh, yeah. I mean, he's – it's incredible that he's definitely got – I don't know how many Pulitzers he's already won. But it seems like any time you see something explosive, it's by him.

Yeah, exactly. So what happens to these companies? What does Comcast do? As more revelations come out that they cooperated with – one of the revelations in the book I was reading, they cooperated too much with Harvey Weinstein as opposed to the New York Times, which didn't. What happens when these – I'll give you my PC answer and then what is practically happening. What I found is the way you solve this, it's pretty straightforward. You put more women in senior leadership positions.

Yeah. And again, I'm virtue signaling on steroids here. All of my companies, the majority of senior managers have been LGBT or female. And that hasn't been affirmative action. It just kind of happened that way. The majority of companies I've started have been in San Francisco or New York. That's kind of the talent pool. And this shit doesn't happen.

When you have diversity, it's senior management, but it doesn't happen in nearly the propensity. Right, well, in succession this week it did, but go ahead. In succession it did? Yeah, this week. I missed it. Oh, my gosh, I didn't watch that. Shiv, Shiv, a woman, but go ahead. Keep going. Oh. I didn't watch that. Shiv. Shiv, a woman. But go ahead.

Keep going. Oh, I didn't see that. That's good stuff. But in general, I think that solves a lot of the problems. When you have a monoculture, you're going to have just more problems. So what's really happening? What's going to happen? But what's really happening now is you have an inability, or what's happening, I think, at the board level,

is what's really difficult is an inability to calibrate. Whereas I think before the calibration was incorrect, it's like, all right, we're like the fatherhood of corporate white guys, and we're going to reassign people who fucked up to a different parish and just sort of ignored what's gone on here. And now it's hang everyone. Now you do the fear of backlash, the fear of the PR. You just, you just, I don't want to call you overcorrect, but we're having trouble discerning between a speeding ticket and double murder. And women have a good point. They say, well, look, all right, we'll abuse you for the next 1,500 years and we're all even. You know, a lot of guys are claiming there's an overcorrection going on.

But it's kind of become – it's like when the – I don't know, the Russians came into Berlin. They were pretty pissed off, right? I think there is some anger here. I think there's some justified anger. But what I find is happening mostly is if a complaint comes up, there's very little due process and there's very little calibration. It feels like at some point there's going to need to be some sort of an ability to create nuance around what was the offense here? What is the appropriate response? I've heard this from a lot of men.

You don't buy it. What's your viewpoint? They got to go. Well, that's what's happening. They're all out. I mean, I'm not talking about Matt Lauer. I'm talking about you hear a complaint. Somebody complains that, oh, this person got, you know, handsy in a photo or something.

Just like Joey Ito made a bad decision back when. That one to me was. This is the MIT guy? MIT guy. He made a bad decision. Got to go. Got to go. Get him out. Bad decision. Right MIT guy? The MIT guy. He made a bad decision. Gotta go. Gotta go. Get him out.

Bad decision. Right. Sorry. You know what I mean? Like, bad decision. But okay. Lots of people lose their jobs over bad decisions.

I don't... I see that. Does their career ruin? Should they be toxic? Should they not be someone you hire again? Someone else can hire them. I'm just saying.

In this case, I suspect there's going to be a lot of departures higher up and stuff. The reality is, as a, as a, you know, a 6'2 white guy, I have never felt physically intimidated by work.

I've never felt physically, and I can't imagine how just devastating that must feel. And then to not be able to report it and to think that you're going to be... Just even, like, let me tell you something about the baby. We were in the hospital. They got the form. What does it say on it?

Parent, father, mother. Right. This was 17 years ago when San Francisco, for example, changed it eventually. But when I saw that, again, 17 frigging years, I got furious and I let loose on the thing. I'm like, what are you doing? Why does it say – why don't you change the frigging forms? And I'm a privileged... What if you're a single mother and you don't have a father? Do you need to be reminded of that?

Well, the whole thing, there's all this paternity. I read the whole thing and I thought I was furious and I was brought back to 20 years ago when there was and here I am a very privileged person I have lots of money, lots of power, and there it was. I did not have any rights right then. And it was sort of like, I did not have any rights right then.

And it was sort of like, and then I was told I have to be married to be on this. And it just went on. And it was sort of like, and I called a lot of people. I know the right people to call, but it's just the way it is. And so it just, I remember just, again, it was 20 years later and it's still the same form. And I sort of was like, and I get straight people don't understand it. But if you just had a baby and you get a form like that saying you are not a legitimate parent, it's not only depressing, it's rage-inducing. And I have to tell you, it just was fast. It was just, I get it.

I get why people are mad. What I would say to current responses, I actually think straight people do understand that. We just need help. I mean, we just need help. I do think there's an education process. And just hearing you say that makes me more empathetic, and I get it. And if I had been in the hospital and filled out that form, I wouldn't have noticed it. I'm so sorry to the woman I yelled at, but she deserved to be yelled at.

Someone had to be yelled at. Anyway, we're going to go to the break now. When we get back, we're going to talk about more serious issues. More serious stuff? More serious, less serious stuff when we get back. We're here with Pivot in a very special episode with Scott Galloway. Fox Creative. This is advertiser content from Zelle.

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It's a more development of our relationship. Oh, wait, better than a stream about Twitter. I found out something fun on Twitter this morning. Let's lighten the mood. All right, quick. Did you know that the second lady, Karen Pence, her first husband, was one of the inventors of Cialis? I found that out on Twitter today. Wow. Isn't that amazing on Twitter today. Wow.

Isn't that amazing? I think I gotta like Vice President Pence now. Oh my god. First off, I didn't know she was married before. Yeah, that's true. Anyways, Twitter does add value. Not that there's anything wrong with that. Thank you so much, Scott, for that. Your favorite thing, Cialis and Sativa. Just trying to lighten the mood. We have to get to listener mail.

This comes from Toronto. We were there. Canada. We love Canada. Anyway, it's this— Nicest people in the world. It's about Google Sidewalks Labs, a division of Alphabet that is designing a district in Toronto's waterfront to, quote, tackle the challenges of urban growth. The American dream is alive, Cara. It's just alive in Canada.

So we reached out to Anne Kavoukian. She is a privacy expert and former privacy commissioner of Ontario. She was working with Sidewack Labs in Toronto, but she resigned from that position a year ago, I think it was, because she had concern about how the data they collected would be used.

I don't know why you'd worry about Google collecting data. Here's what she had to say about that. The problem arose when they created a model for an urban data trust where they said, we understand that people want not just Sidewalk Labs to be controlling this data, but others should be involved, like the municipal government, the provincial government, Waterfront Toronto, of course, and various levels involved in terms of the actual companies themselves, IT companies, of course, and various levels involved in terms of the actual companies

themselves, IT companies, et cetera, delivering these technologies, will all form this, what they called an urban data trust. And then they said the following, which is what led to my resignation. They said, and of course, we'll encourage companies to de-identify data at source, but we can't make them do that. We have no control over what these companies do. And that's the minute I knew that everything was going to fall apart. Because you see, personally identifiable data, it's a treasure trove. Everybody wants to collect personal

information and then use it for advertising, marketing, etc. And the minute they said that, I knew there was no way we could preserve this as a smart city of privacy. I'd be interested in your views. You know, I had said that, for example, Bill Gates is thinking of creating a smart city. And I said to Waterfront Toronto, let's create a great smart city of privacy here. And then we can pitch it to them and they could use that as a model. And hopefully others all around the world can use it as a model. So I'd be interested in your thoughts.

Thank you very much. Oh, my God. Bill Gates creating a smart city. All right, Google's statement on this, Zagwit Labs is committed to implementing the company, the principles of privacy by design. Though that question is settled, the question whether other companies involved in the Keysight product would be required to do so is unlikely to be worked out soon and may be out of sidewalks hands. Okay, they're washing the hands of a third party for these reasons and others. Dr. Kavoukian has decided that does not make sense to continue working as a paid consultant to Sidewalk Labs, and Sidewalk Labs benefited greatly from her advice, which helped the company formulate the strict privacy policies it has adopted and looks forward to calling

on her from time to time for her advice and feedback. It doesn't sound like she wants to help them because she thinks it's bullshit. This came up in Toronto, and my initial thought was that, I actually think it's sort of a neat idea and partner. I like private-public partnerships. And you basically, I thought you had the right response that I learned from. And you said, you know what? I don't want Google building our cities. I want our governments building our cities. And it kind of goes back to the original story about billionaires paying less in their quote-unquote fair share. And the reason that these cities have to turn to these deep pockets is because they don't have the money to build smart cities themselves anymore.

Right. Just by giving away public transportation, giving away prisons. I'll take you into space because NASA is not doing it because their budget has been cut. So it's generally – it's a reallocation of resources that when it comes to civic issues, we need cities to do it. Even like, talk about data hacks, right? Think about how many corporations have had data hacks and everyone makes fun of the government. The most sensitive information in the world is probably on the CDC who gets information

on- We can't get Trump's taxes. God, why isn't that linked? The IRS hasn't been hacked. Why is that not been linked? The IRS is the most secure organization in the world. Everybody mocks government employees. You know what?

They have provided. Yeah, but in terms of security, you know, in terms of the names of assets and agents and CDC and health information, the government is proving itself to be a hell of a lot more competent than the private sector. So I kind of come around to your thinking. I really like the guy running Sidewalk Labs. Have you met Dan Dockruff? Yes, I have many times. He strikes me as a really thoughtful guy.

I just think the whole premise, first of all, there's third-party companies involved here. There is Google, which is the biggest information-sucking sound in the universe. It sounds bad on every level. What could go wrong, right? It just like, pay more taxes and let's build some more stuff or be part of the solution where you're highly monitored by people who are elected. Like, they're not elected. They just like.

100%. I just feel like, look, maybe we make bad choices in our elections, but they're elected and nobody picked Google and nobody picked Facebook and nobody picked any of these people. And so how do you have consent to what – just the ways this – it's like facial recognition. The ways this can go, I can think of 20 bad outcomes and maybe four good ones. I'm actually a fan of facial recognition as long as it's controlled by people who are elected at the end of the day. I believe in facial recognition. And it's problematic.

And so I just – how the data gets used, how it gets de-identified, who will have access, how will it be used? There's so many questions. And the fact that this woman and so many others are, like, quitting and being thoughtful about it, I think her issue was these third party. And then Google says this. It may be out of Sidewalk's hands. Well, if it's out of their hands, why not have partners who agree to very strict rules of this? You know, there's lots of ways. It's, again, pretending they don't have power over this. Oh, speaking of private corporations overstepping their boundaries and threatening our health as a nation, what did we predict

in June and the June 20—I think it was the June 23rd, I'm looking at our producer, Rebecca Sonos, about Libra when it was announced? What did we predict? That. It was DOA. We said it was June 23rd, I'm looking at our producer, Rebecca Sainez, about Libra when it was announced. What did we predict? That. It was DOA. We said it was going nowhere. And then in this past week, it looks like MasterCard and Visa are pulling out. I mean, this was such an easy one. It just amazes me.

Success creates a level of arrogance that's very dangerous. That anyone at Facebook thought, oh, this is a good idea. This will fly. This makes sense. Well, it feels innovative and new. It was. And by the way, currency should be reformed. It's a great idea. A stable coin is genius. If you look at the construct, this is genius. A Walmart, a, I don't know, a JP Morgan, I don't know who's going to

fear Amazon because I think they're more trusted. Somebody is going to do what Facebook has done elegantly to WhatsApp, Snap, and every other innovative firm. They're going to pick their pocket. You're going to see another stable coin from someone in six months. It's just not going to be from the good people at Facebook. No, they think they are.

But anyway, this smarts, what a smart city should look like. Cities need to get smarter, 100%. I just don't want- Isn't that an IBM ad? Smart city? I haven't even been talking about smart, but no one takes IBM seriously, right?

They're not threatened by IBM. I don't want to stack rank who would be more appalling in terms of running our cities. But definitely Bill Gates. No, thank you. Yeah, I think he's wonderful. You don't like Bill Gates? I like Bill Gates, but I don't want him making a decision on smart city. I'm sorry.

I love the stuff he's doing abroad, and they need it desperately. And in some cases, it's great when these billionaires put money into places where government doesn't have enough throughput to make it happen. But in this country, we need our government. We do have a functional government in a lot of ways. Sort of. Sort of. But we do. We do.

We do. Let me just tell you. I don't pay bribes every five minutes to do something. I don't have, like, you know, I think I would like their expertise. And at the same time, I don't want them to control it. That's literally, they don't want them to control it. Literally, they don't want to just join in a model of stone soup. They want to control every aspect.

And I get why they want to. I get it. They think of government as incompetent. Well, and they think they're being good. But it all comes back to one thing in terms of Google. And the reason why Toronto has to go hat in hand to Google for a smart city is that in the United Kingdom, Google reported 7 billion pounds sterling in revenue and for the purposes of taxes reported a profit of 50,000 pounds. That's the kind of thing. If they didn't pay your taxes, just pay.

Like, that's the kind of thing. Just pay your taxes. Anyways, we're in agreement. We're in agreement here. We're in violent agreement about smart cities. I think I should design a smart city. Anyway, wins and fails. There's so many.

There is so many. You go for it. What's your fail and win? My win is the economists from Berkeley who are pointing out this notion of income inequality. I think data as a force of moral good is really powerful. You're a big data man. Well, it's powerful, right? The thing that disappointed me about this Twitter exchange is there was just an absence of data around, okay, I disagree. Here's my data. I disagree. I'm rich, which means I'm right.

My fail is obvious. My fail is this, and I'm a product of it and I've experienced it, this culture in Silicon Valley where people have mistaken their blessings for talent. And I think this smells like 1999 and everyone says it's different this time. So this leads right into my prediction. I thought the biggest news story of the year was going to be WeWork. By the way, coming here, I got off on floors 16 and 17. You know what those floors are here? WeWork.

I thought I'd died and gone to heaven or hell. And I'm like, does this mean I'm in heaven or hell? Anyways. I know they kidnapped you or something. They're here. Yeah. And they pulled me out, put me under a drug, kidnapped you or something. They're here. Yeah. And they pulled me out, put me under a drug, and now I no longer have a kidney. I don't know what that means.

That's their new business model. And it's being rented out. That's their new business model. It's being rented out. Anyways, I thought it was going to be work. No, now I think it's going to be SoftBank. I'm pretty sure, like, last night. Who's your next target, Scott Gell?

When I have four—let me see. When I go out to dinner, I'll usually have one target, Scott Gell? When I have four—let me see. When I go out to dinner, I'll usually have one or two drinks, and then afterwards I'll have—let me see. It's another seven. And the next day, most of my decisions are bad decisions. And I think that SoftBank's incredible poor judgment around we perhaps means that they've demonstrated poor judgment around other investments. So I'm looking at their other real estate investments, specifically OYO, Compass, and Open Door. Failed to come. Well, what I think we're going to have is a new prediction is that I think this level of arrogance—

Keith Verboer is a big investor in Open Door. But go ahead. Is he really? Yes. Oh, delicious. I've interviewed this guy. Son delicioso. It's going to be on my podcast.

Anyway, so— This week or next week. It's going to be on my podcast. Anyway, so the abundance of capital, the abundance of cheap capital, a level of arrogance, all this bullshit rhetoric around genius and magic and this Jesus complex. I have been here before. The big story next year, the beginning of the year, we said the unicorn class was going to lose money, which was heresy because the previous year IPOs were up about 18%. The year before that, they were up 79%. This year, year to date, they're only up five, which means they go down a little bit more. And this year, IPOs and unicorns have been a net loser. Next year, prediction, take every private company worth over a billion dollars now that's a private company, and I think we can add them up,

and I'll do this, and I'll publish it on my blog, is going to be cut in half next year. Okay. The amount of consensual hallucination. Slap, slap, slapping you. The amount of consensual hallucination between the markets, the unicorn industrial complex, trying to shame people for having a thoughtful conversation around valuation. I have been to this movie before. We are going to see the valuation of private company unicorns cut in half in 2020. You have literally just slapped Jason

Callaghan in the face, and you are saying, we hawking at dawn, Jason. I will be your second. Is he the guy that turned $100,000 into $100 million? Yes, that's right. That's right, Jason. He's coming. I'm bringing him to the end. We're going to go for a drink set. He's a good drinker. Is he? Yeah, you'll enjoy it. You'll become best of buddies. You got that in common.

Okay, just my win is Greta Thunberg is poised to win the Nobel Peace Prize. You really think she's going to win? I don't know. I think it would be great because it would drive Trump crazy. That's really pretty much why I want her to win, although she's really quite an interesting – she's a 16-year-old climate activist who organized the climate strike early this month. And so I think – I just – I don't know. She's a 16-year-old climate activist who organized the climate strike early this month. And so I think I just – I don't know. She's a win.

And so is – speaking of which, Andrew Yang presidential campaign made $10 million in Q3. You're happy about that, the Yang gang? I feel like I started – I'm the one who started to really – Oh, it's all about you. You're definitely the Yang gang. I did. No, but people made fun of me when I interviewed him. And I was like, no, this guy's got some interesting ideas and it will resonate with people.

There's 40 points up for grab here. So who is it going to go to? Warren? I've been doing all the talking here. You said the young people. You're going to have someone, some Democratic president. Bloomberg's coming in. Oh, my God.

I would love that. Do you really know that? Do you think that? That's my prediction. I'm going to make a Kara Swisher prediction. I never get to make it. You think Bloomberg's coming in? You're Mr. Prediction.

You suck up all the prediction. Say more. Bloomberg's coming in. You think he's coming in? You're Mr. Prediction. You suck up all the prediction. Say more. Bloomberg's coming in. You think he's coming in? Coming in. Why wouldn't you? Well, we need more old people in the race. Jesus Christ.

A chicken in every pot and depends in every cabinet. I mean, come on. Enough already with the old dudes. Bloomberg's coming in. I would love it. Bloomberg's coming in. He's competent. He's ran the 11th largest economy in the world.

He blew it. He choked the last two times. Bloomberg, you choked. That's what you did. He wouldn't need to take any money from anybody. The conservatives like him. Appoint Stacey Abrams as his VP. I'm only going to serve four years.

And then she gets it. She'd be great. I'm here to repair and restore. Yep. I'm just telling you. I like it. I like it. The other one, the other long shot, you know who would have double digits if you got in right now?

What? It would be if Gavin Newsom announced. Oh, I love Gavin. You know. I love that Gavin Newsom. He's very lovable. He's my friend. I like him.

I like him. I think he's a good— So you think there's going to be a new entrant? Oh, my God. I could possibly— An entrant. President Pelosi if this impeachment thing— Jesus Christ.

This is literally like— President Pelosi. This is like, I mean, Golden Girls. Yes. I mean, Christ. You'll really have to hang with me. I will know all the presidents. I'm just saying. You keep saying that. I'm just saying. You always say that. If any of these people get in You'll really have to hang with me. I will know all the presidents. You keep saying that.

I'm just saying. If any of these people get in, we can go to the White House. You and I could stay in the Lincoln bedroom together. It would be great. I like that. Platonic, but, you know. I have a lot of mixed emotions when you say that. But in general, I'm in.

And we don't even have to buy anything. In general, I'm in. And then, ending on that, Keith Raboy and Jason Galacanis will be wishing they were us because we will be in the Lincoln bedroom. Yeah, I'm sure they're jealous. Yes. With their fleet of Teslas. Their fleet of Teslas. Okay.

All right, Scott. I love talking to you about tech and business. Thanks for saying that. I've got babies to raise and columns to raise. A new baby. That's so exciting. I know. I'm so excited.

That's really—that's awesome. She's a wonder. She's a real wonder. It makes you happy about the earth. Anyway, we'll be back together again in New York this week and in San Francisco. And I hope that you're glad I'm here. By the way, I got rejected from Stanford twice. So did I.

I got rejected from Stanford just once. Wow. We know what we're going to go back and say. I was also rejected from the University of Indiana, University of Texas, Michigan, Duke, Cornell. And you know who let me in? The generosity and vision of the University of California taxpayers and regents, UCLA and Berkeley. Only two colleges that ever let me in. Wow, I've only gotten to Georgetown.

I don't think I'm in Georgetown. No, but it was a backup then. It was a backup. What's a Georgetown a backup to? It was 109 years ago. Since you're pointing out I'm an old mama. This is the widest conversation ever. This is seriously like, oh, my God. In any case.

I'm wider. No, you're wider. You're wider. No matter how we slice it, Scott Galloway, you're wider and maler than I am. Well, slightly. Maybe. Probably not, actually. Let me restate that.

You're not. I'm wider and maler than you are. I'm hanging out with Karen Pence's first husband. That's what's happening. You too. That's what's happening here. That's what's happening here. I will see you live in New York's first husband. That's what's happening. You too. That's what's happening here. That's what's happening here.

I will see you live in New York this coming week. That's awesome. I'm very excited that our relationship is moving to another level. Anyway, today's show was produced by Rebecca Sinanis and Eric Johnson. Eric Anderson is Pivot's executive producer. Thanks also to Rebecca Castro, Drew Burrows, and Nishad Kerwa. Make sure you subscribe to the show on Apple Podcast. If you like this week's episode, leave us a review. Thanks for listening to Pivot from Vox Media. We'll be back

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