Pivot - Live from London: Recession Calling?

Episode Date: January 18, 2023

Kara and Scott visit London's "new Palo Alto" for a live discussion on Tim Cook's pay cut, Prince Harry's memoir "Spare," and what European regulation means for social media users. Also, banking's biggest Eeyore softens his predictions for a 2023 recession, while Britain takes another step towards Brexit. Send us your questions! Call 855-51-PIVOT or go to nymag.com/pivot. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Just go to Indeed.com slash podcast right now and say you heard about Indeed on this podcast. Indeed.com slash podcast. Terms and conditions apply. Need to hire? You need Indeed. Hi, Pivot listeners. Pivot's international tour continues. Scott and I recorded this episode live in jolly old London where Scott lives now.

Hope you enjoy it. Are we on? Are we on? Are we on? Testing. One, two, three. Can you guys hear okay? Okay, great. Fantastic. We're also taping just for, you know, live for Pivot,

which will be on Monday or Tuesday. Yep. And so we did this in Germany. It worked out really well. Scott is not taking off his clothes here, one hopes. Come on. No, no. Come on. No, no, no. Watch your shoulders, ladies. Who's bringing sexy back to the UK? Scott is not taking off his clothes here one hopes come on no come on

no no no watch your shoulders ladies who's bringing sexy back to the UK not you that's right not you not you in any way whatsoever okay

you want to take off your jacket to show everybody Rangers is that I have a story do you want yes let's bring this

all right right to me okay right so you move to London and what is the first thing anyone asks you I have a story. Do you want? Yes. Let's bring this right to me. Okay, right. So you move to London, and what is the first thing anyone asks you? Who do you support? And what I find is if you dare, my youngest likes Chelsea, my oldest likes Tottenham, mostly because my youngest likes Chelsea.

I go to a lot of Arsenal games because the stadium is close, and I love watching soccer play. And I find if you make the mistake of answering, who do you support in London, about a third of the people will say, way to go. You're part of the family. And the other two-thirds are like, we thought we could trust you. It is so tribal here. So this is very strategic. I support my father's club, Rangers, and no one is offended by that. Yeah. Because you don't find them a threat. They're a Celtics fan. Anyways, go Rangers.

Okay. Okay. I didn't understand one bit of that. I went to one of these stores today. My son wanted a Manchester City. Man City. And I said, oh, United, and he yelled at me. And I was like, fine, I'll get Manchester City. Good game last night. They lost. And when I was in the store getting it, I think I went to Lilywise or something, and I was looking through the things,

and three people were like, I hate them. And I'm like, I don't even know who the fuck they are. So it's fine. I don't care. It's very serious here. Yeah, it's very serious. And I literally was like, back off, British person. I also have no interest in U.S. football, so it's fantastic for me all around.

Anyway, so we're going to start this, and then we're going to get to questions. We love questions from the audience. Don't be shy. I'm going to start it like we start our show, and then we're getting into big issues and a range of stuff. And we have a lot to talk about. News is like breaking all over the place. Yeah. All right, let's go. Ready? Okay. From New York Magazine and the Vox Media Podcast Network, I'm Kara Swisher. And I'm Scott Galloway. And we are Pivot Live in London.

Just let me help you interpret. That's British for a welcoming sentence. Thank you. That was really nice. Thank you. I'm good at it. We're taping this in central London, the lovely Phoenix Court event space in Kings Cross. Thank you to Saul Klein of Local Globe.

We really appreciate it. As he just said, this part of town is called New Palo Alto, home to DeepMind, Google, The Guardian, Facebook, and more. I mean, I'm sorry, Meta. That's what they're calling themselves now. They still can't hide. Bessemer, Lightspeed, GC, Iconic, KOTU, and Sequoia have set up offices here in the past two years. Yeah, a lot of people here.

Douchebag. I'm sorry. Big progress. Big progress. Let me just give you a few quick stats about business and technology here. Today, the UK attracts more venture capital than Germany, France, Sweden combined. The US is still far ahead of all of those in general, but it's good. Good for you. In 2022, the UK... We're number three. We're number three. In 2022, the UK's digital economy hit $1 trillion in value, joining the US and China as the only other countries to hit the

trillion-dollar figure. Congratulations. After Beijing and San Francisco, London has rused more unicorns than any other city. So congratulations on that. So we're very excited to talk about London, and we have issues around the economy and venture capitals. But we do have to, since we're here, we have to move on to the topic that everyone in the United States is talking about, which is Harry, Prince Harry. I'm so sorry in advance. Nonetheless, it's a business hit. If you were a startup, this would be a hit. Prince Harry's memoir Spare is now the fastest selling nonfiction book ever. It sold 1.4 million copies on its first day. It's still rising in the US. They are love reading it. Here, they are hate reading it. Doesn't really matter. He's making a lot of money. A recent poll found that 41% of Britons think that

Harry's just doing this for the money. What a surprise. We all thought that in the U.S. already, and we love it. Among older Britons, 65 and up, Harry and Meghan have lower popularity ratings than Prince Andrew. Oh, that's not good. Anyway, nonetheless, he's very popular. Harry won on 60 Minutes, which was not a show that's the most exciting show in the U.S. anymore. 11.2 million people watched it.

They've never gotten those numbers. Before that, question of show of hands. How many of you are reading it or hearing it? Oh, wow. That's not very many people. They're lying. How passive aggressive of you all. How many of you are watching the Netflix series?

Oh, more so. Okay. All right. Viewers spent over 1.5 billion minutes watching it the first week, according to Nielsen. And the numbers are just going up. Love him or hate him. It's doing really well. And I just, Scott, what do you think?

Why? Why this book? And it's really reinvigorating book sales. It was bought by Burlesman, which owns Penguin Random House, which just had to end its merger with Simon & Schuster. Been a big hit. Yeah. Sort of like the Harry Potter of the time. I would argue, I mean, monarchies are failing around the world.

The idea of a bloodline creating some sort of majesty or attention or wealth based on bloodline is sort of a primitive concept. sort of majesty or attention or wealth based on bloodline is sort of a primitive concept. But we have one monarchy that has sort of maintained its status in the face of these headwinds, mostly because of a public servant that showed up for every 70 years and demonstrated grace and class, was sort of the definition of what it means to be a public servant. And I say that in a very complimentary way. be a public servant. And I say that in a very complimentary way. I think it's up for grabs whether monarchies anywhere in the world survive after the death of the queen, because they just don't make any sense. And they're kind of flying the face of an evolved democracy. I would argue that Harry and Meghan are the COVID-19 of monarchies. And that is you have a weak corpus. Monarchies are weak.

They have comorbidities. They don't make any sense. And this opportunistic infection called Harry and Meghan have come in. And that's my nicer way of describing them. I would argue right now, pornography, if you look it up in Merriam-Webster's dictionary, the first two definitions are an erotic act on camera. The third definition is an act that evokes such an emotional response that it's titillating. And I would argue that they're just monetizing the discretion that previous members of the family have decided not to go public with. Because what do you know, we hate our stepmom and the brothers fight. In America, we have a word for that. That's called family.

But essentially, they're the highest paid pornographers in the world right now. Now, I'm going to push back on that, first of all. There's been a lot of scandal around this family for many years, for all of those who watch The Crown, like most of the United States, again, which is fascinated with the monarchy. So this has not been a scandal-free family in any way. See Diana, see, you know, it goes back, see Princess Margaret, see Edward, you know, it goes back a long ways. And so what is interesting to me is why is this one getting so much resonance? And I was just thinking as you were saying that, because a lot of the book

and my friend Brooke Hamerling, who's here, talks about his, the last few days, has been reading me parts of it all surrounding his penis, which is really of no interest to me. But so I've decided to call it. Don't say anything. Don't say anything. I decided to call it Harry Potty. I know. It'll work for the U.S. So why do you think it's popular?

Lots of books are popular, but why is this? I never thought this would be a hit at all. And it's not just a hit. It's a hit on every platform it's on. Yeah, but isn't it they're just revealing things that other people have decided not to reveal and that we can't look away? I think the analogy is pornography. I think they're willing to—they're the Paris Hilton of this generation. Right.

They're willing to do things that other members— Or the Kardashians. They're willing to do things and other members— Or the Kardashians. They're willing to do things and show things that members of their family have previously not done. We're fascinated with royalty. But key to maintaining that imagery and that status is a certain level of mystery, which they are monetizing. And it goes beyond—there's a lot of examples, I think, of this lack of discretion. When Prince Harry talks about killing 28 soldiers of the Taliban- 25.

25, excuse me. Whatever, it's not true, but go ahead. You know, this me strong like bull bullshit masculinity, it's dangerous. There's a very strong code in the armed services around Western militaries. You don't brag about the people you've killed because all that does is it puts servicemen and women in the field in harm's way. But it's a compelling statement. I think this book is full of things that the monarchy has said, we don't talk about this stuff because we're trying to maintain the illusion of a certain proper level of behavior. And they've decided we're going to talk about it.

We're going to get paid $100 million for it. And we're going to reduce the image and the mystery of the monarchy. They're pornographers. What talent have they brought to the world? What goes from here? Where does it go from here for them and for the topic? I mean, again, what makes it a hit? Just because it's pornography.

That's your whole explanation for it. I forget the brother who abdicated. He showed a hell of a lot more discretion. This is the most famous family in the world. Except for the flirtation with Nazism, but go ahead. This is the most famous family in the world. And you've got two compelling characters. They're very attractive.

They moved to LA. They get Porsches. They joined Soho House. So we're all like... And then they start saying things like, oh, the family's racist. Or, I mean, they start saying these very revealing, uncomfortable things about a family that we're all obsessed with. And it's going to come at a huge price to what has been the last kind of remaining monarchy that kind of commands the space it occupies. I think it's terrible for Britain, and they're monetizing it.

That's their right. We can't look away. It's a train wreck. We couldn't look away. It's a train wreck. We couldn't look away from the Paris Hilton video. I immediately started searching for that thing online, right? How is this any different? They're willing to do and show what no one else has done and we can't look away. What's the talent here? Well, I think there's also social media is pushing it. They've got this. And also, by the way, I was shopping today from my family, just little things.

And there were so many Queen Elizabeth everythings. I think I have a tea cozy now, a little teacup, whatever. This is the tourism of this. And so this is just the other side, sort of the review show. We can't go on. I would argue they are reducing the margins on that. When my mom came to the U.S. in 1959 with two suitcases, she found room for her china with the queen on it. Because it meant so much to her.

And I would argue that they're reducing that. Okay. All right. All right. So let's get away from Harry now and let's get to our first big story. A big week for the economy. Global business and political leaders are headed towards Davos. I can't believe we weren't invited, Scott, for the World Economic Forum's annual meeting.

The big question on everyone's mind, are we in for a global recession? The IMF forecasts that a third of the global economy is headed that way. The UK, however, beat expectations by expanding one-tenth of a percent in November. Officials are—I know, right? Wow. Because of the new Palo Alto. Officials are creating social activities around the World Cup. That positive data could just mean another interest rate hike at the end of the month. So how many of you, show of hands, think the economy is worse after Brexit?

Everybody. Yeah. That is, everybody says that to me. And how many of you think Rishi Sunak is doing a good job? Oh, wow. Okay. But how many of you like the Labor Party head Starmer? Okay, not much either.

Okay, you're very thrilled about it. You're about as thrilled with your politicians as we are. So, meanwhile, over at the U.S., Treasury Secretary Janice Yellen says the nation could hit its debt limit on Thursday. In a letter to House Speaker Kevin McCarthy, Yellen warned that if the limit is not raised, the government will have to take extraordinary measures to avoid default. McCarthy says he wants hefty spending cuts where he agrees to raise the limit. We've been here before. Republicans did the same thing in 2011, and the country's credit rating was downgraded as a result. Lastly, earnings are in for big banks with mixed results. At the Bank of America, high interest rates made for slowing investment banking,

which is not a surprise. But BlackRock and Wells Fargo both missed revenue forecasts. Larry Fink blamed it on the turbulent markets. But meanwhile, Jamie Dimon, who's been a bit of a bear at JPMorgan Chase, says the US and he wasn't talking about the world as in for a mild recession. He had been talking about a much more major one. Scott, where is the economy going? It seems to be sliding around all over the place and depending on where you are. Well, so the honest answer is I don't know. But if you bucketed the world into developing market and then Europe and then the US, I would say the developing market is really screwed because they borrowed a lot of their

sovereign debt in dollars and Euro-denominated currencies and their currencies have been crushed. So you have certain nations that all of a sudden are going to have to come up with 50%, 70%, 80% of their budget just to make interest payments. So the IMF is going to have a lot of work to do. As usual, the developing nations are going to take the brunt of this. And then when you talk about the exogenous shock of a food shortage or an energy shortage, Europe is, you know, Europe's doing, you would call it just okay.

You have more inflation than we do and lower growth. Everyone was, I mean, there's a lesson here. The things you worry most about are not the things you need to worry about. And we were, remember all the headlines last year about how Britain and Europe was entering into this energy shortage that would result in people freezing? Natural gas prices are lower than they were pre-pandemic because we were worried about it and we did something about it. But Europe's economy is, I mean, you're talking about Brexit. I think there are few people in UK history over the last 50 years that have done more damage.

What's his name? Nigel Farage? Cameron. Cameron. Excuse me. I don't know enough about politics, but I'll make that statement anyways. But essentially, you have the worst of all worlds. You don't want to sell your products into the largest economy in the world, Europe, but you want to limit immigration pushing your own prices up.

So we want higher prices and lower productivity. Well done. Well done. It just, from an outsider standpoint that likes to think you understand economics, this should just make no sense. I can't figure out. And it's like you're snatching defeat from the jaws of victory because you have incredible, people want to live here, fantastic educational institutions. Pent-up demand. Pent-up demand. People who are willing to make big forward-leaning investments in technology. Your fintech community is thriving.

Germany has a bigger economy, yet you're stronger in tech. You have all the moons lined up and you're like, I know, how can we fuck this up? Is that not unsimilar to what the US is doing with immigration? I mean, one of the things I've noticed since I've been here, and this is just anecdotal, is people talking about not enough people in restaurants and retail stores, that they've had to close their businesses. This is super common in the U.S. now, is that the people that want to work, we're not letting in the country. And then the people in the U.S., there's two jobs for every person now. There's all these jobs available.

So everyone talks about, remember the whole, the scares 30, 40 years ago about overpopulation. The biggest crisis that's going to face our markets is not a lack of jobs. It's a lack of people. So while we talk about tech layoffs because we're obsessed with technology, non-farm payroll jobs relative to layoffs, layoffs are lower than they were pre-COVID than they are now. It's just that when we fire 12,000 people at Meta, the media goes crazy. The reality is there are not enough workers for their R jobs. Now, just the last part of this, the US, this sounds pro-America, but if you listen to my stuff, I like to think I'm sober about America. We're unique. We're about to reassert. US has never been this strong relative to its competitive unique. We're about to reassert. U.S. has never been this strong relative to its

competitive set. We're food independent. We're energy independent. Everybody in the world, if they have one option, usually would choose to come to the U.S. Our economy is growing, and yet inflation is crashing because the dollar is so strong. And we're, quite frankly, we've pulled dramatically. China's equivalent of their Dow is off two-thirds. A quarter of a billion people are either under full or partial lockdown. So I would say when people start shitposting America, it's like, where would you rather be right now? So Europe is sort of meddling its own issues, developing market terrible, but the US seems poised really well relative to its competitive side.

Yeah, except Trump and a bunch of our crazy people running Congress right now, which is a big issue, obviously. But one of the things that had been keeping that aloft are the U.S. tech companies, and the numbers are off considerably. And, of course, you read today Apple is releasing a mini version of Tim Cook's pay package. The company is cutting the CEO's compensation by 40% to less than $50 million. He'll have to get by. Shareholders, although he doesn't really spend money, if you know him. He eats not very much, and he dresses very good. That's what you call a power flex.

Whatever. That's Tara going, I know Tim Cook on an intimate level. No, I don't know him. I do not know him. He and I hang out, and we don't spend money together. I have noticed. Because we're like this. Me and I do not know him. We do not hang out. And we don't spend money together. I have noticed. Because we're like this. Me and Timbo are like this.

We do not hang out. I rub La Roche-Posay on the small of his back. And then we talk about our frugality. Anyways, go ahead, Flex Queen. We do not hang out

and we are not intimate. Yeah. We are really quite opposite. And literally the last live pivot we did, she was saying how she emailed Bob Iger because she was complaining about frozen string cheese.

Can I just say, let me just correct you. I texted him. All right. Sorry. Go ahead. I also have a secret email that I just text him. It's easier. Anyway, I'm sorry they don't talk to you,

but they do talk to me. None of them. Nonetheless, shareholders expressed displeasure with Cook, even though he's done an astonishing job for Apple stock over his tenure. Apple stock this year is down more than 20%, which is actually good for U.S. tech companies. Cook reportedly requested the cut himself. Over the past five years, you had noted that how much he had made, $500 million over the last five years? So, this is an interesting story. There's two things here. There's CEO pay. And CEO pay has gone from about 30 or 50 times the average worker's salary to more like 300. And the reason

why, as someone who's on a lot of boards, many power flags, is that you get to know the guy or gal running the company. And proximity, you like them and you want them to do well. They're working hard. They're really good. And a Towers parent consultant comes in and says, this is the median compensation for someone at this kind of company. And you think, well, Lisa's really nice and trying really hard. We're not going to pay her the median. We're going to pay her 20% or 30% above the median, which just creates this exponential effect where CEO compensation has grown just dramatically. Now, that's a whole different ball of wax, right? If you look at Tim Cook's compensation, though, he's made a half a billion dollars over the last five years. He's created about $1.5 trillion in market cap.

No individual has added more shareholder value under their supervision than Tim Cook. Let's look at someone else, Elon Musk. The most overpaid CEO in the world right now is Elon Musk. The most overpaid CEO in the world right now is Elon Musk. So if the media, again, if their hair on fire is about Tim Cook making 500 million bucks, what about the guy that made $12 billion and has taken his stock down 75% through his man-child reckless behavior? Back to you. Okay. All right. So do you think Elon Musk's pay should be cut then? Or he should cut it himself? Should more CEOs follow Tim's lead? Now, Tim, as we both know, is an adult. He tends to do the right thing. He's a very calm, reassuring presence in Silicon Valley. This is not Elon, obviously.

Not unsimilar in age, though. So he's sort of closer in age than you would think. Should other CEOs take the lead? And what can they do? No one's going to do anything about an Elon Musk-type character who's come along quite a bit in tech. This isn't about individuals. By the way, if you're talking about Tim Cook and Elon Musk, you're talking about two people who are like different species. I mean, it's just hard to compare the two in terms of mentality and the complexion and the way they present themselves. But this isn't

about CEOs deciding anything. Imagine you work your ass off, avoid all sorts of landmines, and finally become a CEO and your tenure is three to five years. And you see all of your buddies who made CEO making a couple hundred million bucks. Are you really going to say, no, I'm going to take my pay down to be a good guy or gal? No, you're like, fuck that. I want my Benjamins. You're going to do everything you can to maximize the outrageous payday such that you can do good things with it. But no one's going to say at your funeral, you know what Tim Cook did? He cut his compensation in his seventh year of CEO.

No one gives a shit long term. So every CEO is going to max. This is a story about boards. Now, I don't know this, but what I would bet had happened is that Apple's board said, we probably need you to cut your compensation. Let's make it your idea. I've never heard of a CEO proactively deciding to cut his compensation. I've never seen it. I've served on 20, 25 boards. I can see him doing this. Fair enough. You know him. You guys massage each other. But what you essentially have,

though, this is about governance. And the Apple board said, you're amazing. You deserve a half a billion dollars. And then another board, which includes a brother and people who are nothing but sycophants and a rubber stamp who say, yeah, go manage another company, be reckless, be stupid, damage our shares, say you're never going to sell our stock, then sell a shit ton. Let the brand get affected by your behavior off campus.

Tesla does not have a board. This is a story about governance. So I don't think this is about the CEOs. So you don't see any of it because all the tech stocks are off. And should those CEOs at least virtue signal that? Which one's the better one? Is it sort of Elon in the style of Trump? Sure, I didn't pay taxes. I'm smart. Sure, I cheated on my taxes. I'm smart. I figured out a legal way to cheat on my taxes versus a Tim Cook, who is the more responsible one. I'm doing what it takes. I'm taking it down. Do you see, I think tech CEOs are moving more towards Elon style than Tams. That's my take on it. But the person who decides the CEO's compensation, it's not up to Tim Cook, his compensation. It's not up to- It's because these boards are, you know, they're

all, they'll all do whatever the founders want them to do, essentially. There's very few. Until they're ready to fire them, they don't do anything. I've seen good boards say to controlled companies, no, your compensation should be there. I think good boards are willing to act as fiduciaries. Fiduciary is a wonderful word. Good boards are willing to act as fiduciaries. Fiduciary is a wonderful word.

When you're a board member, you're supposed to be representing the community, employees, shareholders. And good boards will say, yeah, you can fire me tomorrow. Maybe you're the controlling shareholder, but you should not be making this much money. I've seen that. And that's what good boards do. One of these companies has an outstanding board. The other is Tesla. So when you see him doing this, when should he then give himself more money? I mean, when do you see these tech stocks are really off?

And of course, they're bringing down the whole market. 20% off is actually quite good. I think Snapchat is 80. They're all in Alphabet. Meta's really lost an enormous amount of money. You don't see anybody discussing that. Compens. And then when do you think they're going to get back? We just talked about this mini recession. Who comes back from

this? And who is the CEO to watch in this case? I don't know who you would pick as the company that's going to reemerge sooner and who the CEOs are to watch. I think that's a longer conversation. sooner and who the CEOs are to watch. I think that's a longer conversation. But Tim Cook, to be down 20% is up in this market. Most of these companies are down 50% to 90%. By the way, we talk about big tech, Amazon, Apple, Facebook, and Google. It's no longer big tech. It's big Apple. Apple is worth more than the other three combined. So the fact that Apple is down, a year ago, I'm like, okay, I need money money and I sold. My two biggest holdings are Amazon and Apple. And I sold Amazon because I thought they would spin the cloud.

That ended up being the wrong decision. Amazon's off, I think, 50% or 55%. Apple being down 20%. And this is how compensation works. You say, all right, we're going to look at growth versus numbers, but we're also going to look at your performance relative to peers. And Apple's performance relative to their peer group has been stellar. And they're in position for a lot of things, including these glasses that are coming, which I'm getting you for your birthday. No, I'm not.

I'm not going to get them. Would you wear them if I got them for you? Or would you just pretend? I would wear anything you purchase me while you're around me and then I would... Give it to your sons. Okay, great, good. That sounds great. I think it's a very interesting

move by him, but he is unlike other CEOs. But you asked a question you're better suited to answer. What CEOs would you want? I think Apple will do great. I think they've done an amazing job

navigating this. I don't know about Meta. I think this bet they've made is very troubling for them. And I don't know where they go, left, right, center. And of course, it's all going to be clouded this week, this or next week. They're going to decide whether Trump comes back on the platform. That's going to suck up all the oxygen.

Advertising is down. He's in a mess of trouble. And there's no real business to go to. And certainly, we're not donning our Oculuses and living in the Metaverse anytime soon. There's no, just to talk about meta. So every year, I have a prediction stack, and I pick stocks, which is a dangerous business. But I pick three categories. Airbnb, I think there's going to be so much revenge travel in 2023.

Yeah, I agree. I was just going to mention that. People are planning, all right, fuck it, I'm going to Thailand. I'm taking all of my family. We could all be dead soon. I haven't traveled in two years. There's going to be an explosion in travel. And no one says, oh, I got a Hilton in London. They say, I got an Airbnb. I think this is the strongest band. I'm a shareholder in the history of hospitality. It's down 50%.

Number two, Chinese internet stocks. China's on sale right now, even with its massive run-up over the last 60 days. And then my third pick, and it's a company I hate, my third pick in terms of stock is Meta because the fiasco and ridiculous worst strategy in history of the Metaverse. I mean, I hate Meta. I could not have come up with a strategy this brilliant to kneecap them. I just couldn't have come up with this strategy. You might have. I might have. And I just love the idea of thousands of meta employees rolling down the 280 highway to waste their lives for the next several months trying to chase this fever hallucinogen that he has forced them all to take. So, fine. A legless world.

Do you realize right now? No, they have legs. Their horizon world, their metaverse, has a third of the traffic of MySpace. MySpace right now. MySpace right now. MySpace right now. Anyways, however, however, the stock's been unfairly punished because here's the thing. Still a great advertisement. Meta's core business is a cash volcano.

You're all still on Instagram. And a population the size of the Southern Hemisphere plus India still uses their products and loves them. Yeah. And the company, if you look at its price-to-earnings multiple, is trading like Unilever. So you're looking at a company. By the way, I think Unilever is an amazing company. But you're looking at a company that the moment they just tamp down

that ridiculous investment they're making, I think the stock doubles. Yeah, they still have got to find another business. Google did. Everybody finds it. They need a growth. Yeah, they need a growth. And that's going to be hard for them, and they can't buy anything because they just can't

buy a thing. And Microsoft's being stopped with just Activision, which is a very... It should go through. That one should go through because essentially the two big companies in gaming are Chinese and Japanese. And they're a distant number four, I think. It's some number that's

really surprising. I was surprised that the FTC and Europe went after them, but they did. And that, so if they're getting stopped, nothing, Meta can't buy a thing. They can't buy a thing at all. And neither can Apple, neither can any of them. So growth is going to be a very difficult issue for all the tech platforms.

And so that's why startups will be the way to go. Like where are those interesting opportunities such as chat, GPT and others, which is, Saul is correct. It, where are those interesting opportunities, such as chat GPT and others, which is, Saul is correct, it is a money-making story, not a story to help us all have better lives, which is how they've been spinning it for years. Fox Creative. This is advertiser content from Zelle. When you picture an online scammer, what do you see? For the longest time, we have these images of somebody sitting,

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Out. Beige on beige on beige. In. Knowing what to do, when to do it, and who related. Social media platforms are preparing to lose users. The UK is nearing the passage of its online safety bill, which would penalize networks that allow children to use their services. The move could force social networks to verify a user's age by making them upload ID or perhaps scanning their face. This is also a bill in California that copied it, essentially. Same woman involved in both efforts. Privacy advocates say the measures could chill speech.

Social media companies agree. They say verified identities will scare many users off. It's also full of problems to do this in privacy. It just goes on and on and on. Here in the UK, a set of Tory MPs want sharper penalties in the bill. They want social media executives to face possible jail time, one of your favorite things, if their networks fail to protect children. I think it's a heavy load to ask these companies to do. But is there any way to balance this anonymous speech, user safety,

especially younger people's safety? And we're not even getting into addiction, which I'll get to in an accident hate speech. Well, I think the EU regulation is really inspiring. And I think it's been smart. I think it's been thoughtful. And they're learning. GDPR, as far as I can tell, kind of punished. What it was supposed to do to big tech, it did to small tech. It made it harder for small and medium-sized media companies.

I don't think it's working. But I think they're learning from it. And the reality is that the financial services industry got its act together. People would say with Sarbanes-Oxley and regulation in the subprime crisis, I think it got its act together when it saw Michael Milken do a perp walk. And that is all of a sudden, every executive at a financial services company said, shit just got real. And we don't want to go to prison. And so we need to make the requisite forward-leaning investments in ensuring that we don't wake up one day and say, there were all of these anomalies and people got hurt,

but I'm sorry after getting my $50 million pay package. Until a big tech executive does a perp walk, none of this shit happens. Because if you're an executive at Facebook or at Meta or Google, you do the math. And here's the math. The smart thing to do is to break the law. None of us go to jail. The fines they come up with are nowhere near what our cash volcano is. A $5 billion fine, largest in history at the US, that's 11 weeks of revenues for Meta. So they just do the math. The algebra of deterrence, because the numbers are so big here, has gotten out of whack. And what's so exciting about this legislation, one, I think it makes sense. If something's illegal offline, if hate speech is illegal offline, why would it be legal online? And also, the greatest part of the regulation that's been proposed

is that when you're found guilty, your fines are a percentage of your global income. So all of a sudden, shit's about to get real for these folks. All right, but let me say, I usually say that I think that social media companies have been sloppy in their management and what they do and their information they give and the way they've conducted their businesses. Is it their fault utterly? And are they the ones that should go to jail or the people that perhaps abuse people online? That's where the focus should be. And to put it all on these social media companies,

make them the nannies of our society in some ways. I don't think they'll do that very well. And then there's all these problems around privacy, identity, being able to game the system. It opens up a raft of issues. Not that they shouldn't do something, but this seems such overreach by a government organization and problematic on every level. So was it Molly Russell, the young girl who committed suicide? She got emails from

Meta and Pinterest saying, here are images around suicide you may be interested in. And she was sent images of nooses, of pills, and of razor blades. Someone needs to go to fucking jail. And we can make all these excuses about how the world, that social media is just a small function of the world. But here's the thing, in order to scale, so they can create the cash volcanoes they scale, they take out humans, and they take out any reasonable safeguards that would go, no, we should not be sending a 12-year-old pictures of razor blades, right? We should just, the excuses and the backpedaling when we find out that they knew

Facebook's internal research, Meta's internal research showed that one in 12 girls in the UK were citing Meta and Instagram specifically as a cause of their depression and they delay and obfuscate and they hide it, someone at a minimum needs to get hit really hard economically. Then how do you do that? I mean, is it like, is it? I really do hate, I have lots of kids. I get

it. I get the thing. I just hate to think, like, who gets it then? Where is the proof that this is the case? Where are the research? I think there needs to be far more research and far more safeguards around privacy. The minute you get all these people's pictures, it just feels... I can anticipate the problems later

of having all this information, especially on kids, especially with face scans. Every time they say something, I think these are the people who fucked up everything and now they're going to not, who's going to monitor that? And then the answer is government. And I'm sorry, but no thank you, right? No thank you for the government to have this information too. And so it creates a surveillance economy that could be, that has second and third order effects that we are not anticipating because we're in a panic about whether it's addictive use of this stuff or people feeling bad about themselves.

Let me say, young women have been feeling bad about themselves for centuries. And it has very, you know, social media is the latest thing that makes them feel bad about themselves. It's gone on for a long time. It amplifies and weaponizes it in a unique way. But it's hard to know, who would you put in jail? Tell me. There'd have to be an email saying, yeah, we know we're giving 12-year-olds pictures of nooses and suicide, ways to kill yourself, but we're going to do it anyway. It would have to be something like that. What would be?

I think a big tech playbook is that these problems are really complex, right? These problems are really hard to solve. But they are. They actually are really hard to solve. No, I know that, but they are. They actually are. Hold on. But go ahead. If BBC or Channel 4 or whoever's over here at Canal knew that their programming was resulting in an increase in self-harm among teen girls, and they could reverse engineer it to that programming, and they found out that executives knew about it and ignored it and tried to delay and obfuscate it,

they would be in a lot of trouble. They would be in a lot of trouble. But because it's online and because it's tech and there are innovators, they hide behind this illusion of complexity. We talked about the weaponization of our elections and it couldn't be solved. We kicked one person off of Twitter and somewhere between 30 and 60% of all election misinformation went away overnight. The illusion of complex. These problems are hard. We care. We care, but these problems are hard. Oh, my God.

Here's an idea. Age-gayed social media. Yeah. Age-gayed. Why the fuck is any 14-year-old girl on Instagram? So she can start. She can be encouraged. Think about Instagram begins.

All right, but then- I'm on a riff. Hold on one second. I see that, but I'm going to stop you. I'm going to stop you on your riff sorry are you okay go ahead

what about you know fashion magazines what about this what about it goes on and on and on the tell like I don't want my kids

near euphoria like I wouldn't like them to watch it even though but there's no evidence that euphoria increases self harm

this reminds me of when video games they did this Al Gore's wife did it. And there was no evidence of that either. And yet there was a panic. There is peer-reviewed research, but the R on it, the correlation with teen girls

and self-harm is now peer-reviewed and they have shown a correlation. We talked about age-gating. Another thing, anonymity, which I'll call the cultural elite is their go-to. We need anonymity. Anonymity is cloud cover for terrible bad actors. I agree you need some anonymous accounts.

We always go to the edge of edge case, the human rights activists in the Gulf. We should be able to set up technology that if you want to talk about human rights violations in a developing market or a non-democracy, we can figure out a way to give you a voice. But all this bullshit cloud cover of I'm a tech elite, I get it. Anonymity has been a gift to bad players. If I go on and I say Putin is a murderous thug and I think a great victory of the West is kicking him in the nuts over and over, on Twitter, I get all the same things. Scott, love your work, but you've got it wrong on Russia. I'll get that about 40 times in my comment section. And then I click on it and I find out this isn't a real person. Well, I wonder who it is. If you get really vile, misogynistic, like crazy rape-like content,

it's under an anonymous account. Here's the thing. You have no anonymity. On the way home, you will be photographed in London something like, what, two dozen times? What we need, and this is where we part company, I trust the government a fuck lot more than I trust Mark Zuckerberg. I think our government is us. I think they do a great job. I think we've got to stop shitposting them. I think they do their level best. We need good judges to protect our privacy. We need thoughtful judges to protect our privacy. We need thoughtful judges to say when it's overreach. We need laws to protect us

when people go after people or whatever it is. But the notion that we've just decided to abdicate to anonymity and the wild west. I get that, but come on, government.

Come on. I disagree. It is not, it is literally, this is the, the internet is a friend of authoritarians. It's used and abused in countries, maybe not democracies, but the amount of information our government collects on us without our knowledge is rather vast.

We are – China just does it explicitly. We do it implicitly. And so it's something to think about when you're thinking about this. I'm going to keep going, but I'm going to stop here. But where is our government over – isn't a government underreach? No. Where do you think – There's legislative underreach, at least in the U.S., not so much here.

But the government is constantly taking pictures of every single thing. The most noble organizations in the history of mankind are the governments out of Western Europe and the United States, full stop. All right. I absolutely don't trust the government to protect our identities either. Also, not protecting people. Hate speech on Twitter is on the rise again for users outside of North America. Musk's layoff, and in America, I've turned off all my comments, unfortunately, it's a lot less fun to use it. Musk's layoffs have decimated teams responsible for content moderation in much of the world,

including Brazil, where a mob attacked the government buildings earlier this month. Online harassment can get worse. Researchers warn that AI chatbots could help bad actors scale up phishing attacks and harassment campaigns. Elon's removing all the safety switches everywhere, including technologically speaking. So what is the longer short-term fix? Long-term Finnish misinformation classes are a good model. There's a great story in the New York Times today about that. Also, TikTok, which is under siege in the U.S. and across the world, actually, for its links to China, is sharing details of a company reorg with U.S. lawmakers in hopes that transparency would show off its independence from the Chinese owner. ByteDance and ally fears of data sharing. You know, when you start talking about the thing you're talking about, I agree with you, they've been lazy and sloppy and made a mess.

That said, so has Fox News in our country, for example. Just let me give you just a weird anecdotal example is I put my mom in independent living. It's really great. She's decided to stay herself. But, you know, it's hard to get anyone to do that. But she's not watching as much Fox News because it just doesn't work there as well. And maybe she'll start doing it. She was watching CBS News.

We are on the same page factually again. And it's fantastic. And in a lot better mood. She's going to kill me when I do this because she's like, stop talking about me on your pivot show. And she likes Scott better than me. But it's really interesting to watch the removal of propaganda from her, because that's what it is. It's hateful, toxic propaganda and the mood change. And she may not agree with me, because she's still reading the New York Post and the Daily Mail, et cetera, like that.

But she certainly, it certainly, I had written a column about this around COVID when she did this. There are other avenues of information that can be just as bad and can make a very clear link because right now, Rupert Murdoch yesterday underwent, he was deposed in the Dominion case where everyone at Fox knew they were lying. So that was, I think, far more damaging. And then maybe they'll do a perp walk.

Yeah, but that's the right comparison. Let's talk about Dominion voting machines in a deepfake video of Nancy Pelosi seeming as if she's inebriated. When Fox talks about Dominion voting machines irregularity, they said these voting machines had been weaponized by Hugo Chavez in Venezuela. Ended up not true at all. And there's laws that if a traditional media company says stuff that's slanderous and has economic harm in a company, they can be sued in court. And Rupert Murdoch gets hauled into court. And by the way, every anchor on Fox the next week said, this was factually incorrect and we shouldn't

have reported it. The amount of emails and messages from your mom or other people about Dominion's voting irregularities on Facebook. What happened at Fox is a dumpster fire. The nuclear mushroom cloud of misinformation around Dominion on Facebook. But guess what? Because of Section 230, they're not subject to any sort of liability. Yes, we agree. A falsehood on Fox ties its shoes before a falsehood on meta gets ripped around the world.

We have decided for some reason nascent technologies deserve some sort of legal protection. You want to run, you want to err on the side of being more promiscuous with your regulation. These companies are now the most valuable companies in the world and can be the most damaging. So I can't for the life of me understand why they wouldn't be subject to the same obligations as traditional media. Why? I do agree on this. They remind me more of cigarette companies and how we're going to handle them. That sounds right.

You know, rather, that's what Mark Benioff had told me. Two quick things, then we'll get to wins and fails, because we've got to wrap up and get some questions from the audience. They're sharing details. Is there hopes for that, given the U.S. is creating all kinds of committees in Congress? Say more, Karen? Sharing details. Say more, Carrie? Sharing details. They're trying to be much more transparent about how they will keep, because a lot of states-

Oh, TikTok. Yeah, so again, back to my predictions. I think TikTok is going to be the next trillion-dollar company. And TikTok is hands down the most ascendant tech company in history. Not the most ascendant media company, the most ascendant tech, possibly the most ascendant company in history. It got to 100 million users like in a fifth of the time of Instagram, which used to be number one. And I also think that if

TikTok doesn't spin ownership and assets to Western democracies, it should be banned full stop. This thing is so addictive. If my son, if my 12-year-old had his druthers, he would put on diapers, go into his room, lay on his side so he wouldn't have to take bathroom breaks and just watch TikTok for 72 hours straight. I would like to do the same thing. I think it's an amazing product, but here's the thing, and we keep talking about it and I won't be redundant here. I think it's a propaganda tool. I think it's the ultimate weapon. Look at the equivalent of TikTok in China. It's the spinach version. They talk about people in Olympic training. They don't let anyone talk about politics or systemic racism or income inequality. No updates on the Uyghurs on Chinese TikTok. Anyways, but here's the thing. The reason why

I think it's going to be a trillion dollars is because there's so much money involved that the people who have a stake in this are going to figure out a way to put pressure on the owners of TikTok and say, okay, do we want this to go, do we want it to be worth $50 billion or a trillion? So $950 billion is a lot of incentives for a lot of different parties to figure it out. I don't see the Chinese letting go of this. I don't think so. You don't think they're going to agree? I don't.

They're going to try to do something where Oracle runs this and this is protected, and the U.S. will probably, because we're a bunch of wimps, sign off on it. Although there are some very active people in Congress that may not let it go, I mean, Republicans and Democrats. So we'll see where it goes. So much money. I get it, but I think the Chinese find this to be a valuable property and don't want to spin it off in any way.

And I don't think the owner or the people running it have any power. But they're faced with it being shut down. And this is the same reason why Shixian Bing has basically said, they've taken a message, a note out of the U.S. playbook, and they've said, okay, these tech billionaires are now more powerful than governments. We don't like that. So we're going to disappear them. Right. And we're going to bring them to line. Now, they've cut off their fingers, but I don't think they want to cut off their arms.

Because if they don't continue to bring tens of millions of people into the middle class, they're going to have a revolution. Yes, they could ruin this product if it gets banned in the U.S. for sure. I think they figured it out. And I don't know where it is in Europe, but definitely that will have a rolling effect. And it's entirely possible that it could happen. It could be banned in the U.S. It's a winning political thing for a lot of people, although it makes teenagers mad. They don't vote.

Anyway, let's hear some wins and fails now. We're going to wrap up and then we'll have questions from the audience. Do you have any wins and fails? I have a lot of them. I have a lot of them. Let me start. The fail, the Missouri State Legislature dress code, fuck them. That's pretty much what I have to say.

Do you know about this? Is that what you're talking about? They passed a, I don't know what even it is, a law for women can't show their arms with any kind of clothing. They've got to wear blazers. It's essentially, it's great. Which is strange because if you're an anchor in traditional media in the West, you're a woman, you have to show your arms. So you can't show your arms. It's all kinds of stuff.

It's really quite maddening. Why does Andrew Ross Sorkin get sleeves? I don't get it. I don't know. You have to be covered up. It has a Taliban-y feel. So it's really strange. I think it's repulsive and disgusting. I just can't believe it. I can believe it. It's Missouri. But it's part of the ongoing march of- It all comes down to time zones. In Germany, it's about 8 p.m. Here, it's about 7 p.m. And in Missouri, it's about 19.53.

Yes, exactly. Yeah, exactly. And it only applies to the women of the, I don't think there's a lot of men wearing sleeveless sheets, but nonetheless, they should. It looks good. It looks good. It looked good on Harry Styles, for sure. I was just in the Castro of San Francisco, and I was so relieved to see all the naked people. I can't even tell you. They look good. It was the wrong people that are naked, isn't it? No, no, no, no, no, no, not in the Castro. I remember when I was in high school, we used to sneak down to Malibu to this place that had a nude beach and be like, he should not be naked. Just shouldn't be naked. Anyway, sorry.

Okay. All right. How did that get to that from a very anti-female situation. But okay, fine. People are ugly. Okay, great. I think the win is this Sweden, this thing in Sweden, the enormous deposit of rare earth minerals. Really interesting. This is something that China's been eating up all across the world. Rare earths are crucial components for electric vehicles and wind turbines.

China dominates this trade. So discovery could have big impact unless they come and buy it up for European energy independence. Really important minerals. Mining and refining could take a decade or more, but we need them sooner because global EV sales surged last year to 10% of all vehicles, mostly in Europe and China.

The U.S. is starting to keep up, but it's still way behind. Tesla still leads, but it's going to be losing market share, and it has been. It's been growing, and the whole market's been growing, which is good for everybody, but it's mostly here in Europe and China, the two big bright spots. So this is, I think, a great thing. This is the rare earth metals. It's good to find them elsewhere.

I'd like to find more of them around the globe. Those are my wins and fails. What are yours? So my fail is the state of Florida, which seems to be home to people into crypto, seniors and domestic terrorists. I was heartened to see that the Supreme Court in Brazil is considering charges against Bolsonaro who said, okay, you created, you sow doubt about the sanctity of these elections. Your staff seems to have organized this. And if democracies start deciding, okay, elections, let's see how big a riot we can spin up, that could be a real threat to the entire West. So I like the fact, I think the fact that we're, I hope he's extradited.

And also the military was a little, there's a lot of reporting about how the military protected some of the rioters. And they're talking about, they've already arrested, I think, over 1,000 people. They're basically doing what we should be doing in the U.S., and that is holding domestic terrorists accountable for their actions. And by the way, they weren't hunting anybody. They went when the place was closed. It makes it almost look like a peaceful protest compared to what happened in D.C., and yet the Supreme Court in Brazil has decided to live up to the letter of the law as opposed to the U.S.

So, anyways, I don't think – everyone talks about moving on and coming together. I don't think we can do that until we decide that domestic terrorists are punished and liable for their actions, including the former president of the United States. The win – and this is highly emotionally manipulative and pandering. Okay. My win is Britain deciding to send 14 Challenger tanks to Ukraine. I think it's, we have been remiss in the West to send like visible hardware. We send stuff you don't think about, missile guidance systems, right? Or handheld missile systems.

And Britain is sending 14 tanks. And these things are incredibly intimidating, incredibly successful. It's essentially the most heavily armored piece of equipment that's on a battlefield with a cannon on it. And they're sending 14, and it's a first. And this is the emotionally manipulative part. Does anyone know why my mom kept going to the Elephant and Castle tube station in 1940 to sleep there. During the Blitz, my mom and her family slept in a tube station here. And I always talk about the difference between happiness is understanding that a lot of your success is not your fault, having some, recognizing your blessings, being grateful, A lot of your success is not your fault.

Having some, recognizing your blessings, being grateful, paying it forward. But it's also recognizing that just how fucking lucky you are. I'm here now because the British who said, okay, they were offered an incredible deal in 39. You keep the empire, we're going to keep Europe. Everything's fine. You're super unpopular. It was incredibly tempting to just sign some sort of agreement. And they said no. And the British, again, have a wonderful habit of saying to tyrannous murderers, fuck you.

And I think it's wonderful. And you're going to see more Western allies move in with hard armor as they talk about the spring offensive. But again, I think there's a lot of parallels with World War II here. We are supplying a lot of natural gas, just as we supplied frigates and P-51s and Tommy guns. We're providing a lot of the resources and a lot of the capital. But the Brits, again, show the leadership.

We're not gonna be cowed by someone who has nuclear weapons in the face of tyranny. So my win is that, again, the British people have decided, you know what? At the end of the day, you got to call a tyrant out for what he is, and we're going to take the risks. This is huge risk for Britain, but they're taking a leadership position. And by the way, it's an individual who runs your government, who from an outsider, I like this guy, son of immigrants. That's who should be making decisions, not the son of fucking monarchies.

Who cares? Let them make decisions. Go to Soho House. Get a Porsche. He's not precisely making decisions about anything except what he wants to wear that day. But go ahead. He has no power.

Harry has no power. Harry has no power. My point is, democracies, democracies have people, son of immigrants. I think that's a wonderful story. And I think, anyways, I'll go back to where I started. I think Britain's showing continued leadership in the face of tyranny and not taking the easy way out, as evidenced by sending tanks. I'm hoping you watch. In the next two, three weeks, we're going to see Germany send some of their amazing Leopard tanks.

And it's going to make a difference. All right. Okay. Scott, thank you. Let's take some questions from the audience. Yeah. Hi, my name's Paul. Hi, Paul.

I wanted to, I don't know, challenge something you said. You're always about accountability. Surely, I mean, you're going to moan, Harry and Meghan, isn't it they're holding the feet to the fire? I appreciate I'm a white guy, can't really talk about racism, but are they not holding the feet to the fire with some pretty egregious things that have gone on? Would that sort of change your view in terms of,

yeah, okay, it's $100 million, but doesn't what they're doing shine a light on some things that are pretty wrong? I guess it goes to their state of mind. I think that's a fair view, that your view is that they see this as an opportunity to be more transparent and improve the monarchy. I think that's a valid viewpoint.

I would argue they're just going for 100 million bucks. And that essentially, to summarize this, it's like, we don't like fame. Look at me! So I just don't believe them, that their intentions. But I think you're seeing that glass is half full, and I see it as half empty. But I think it's a valid point. Yeah, it is. But to me, it's half empty, but I think it's a valid point. Yeah, it is. But to me, it's a PR tit for tat is what's happening here, and they've just gotten the upper hand for now.

And, you know, I think the press does go along, and there's a great love of the monarchy among certain groups of press. And it reminds you of all the celebrity stuff that can be very deforming for society. I do think that, although I think they're perfectly welcome to do it. Anyway, next question. Hi, I'm Flora. Hi, Flora. I've got a question about internet advertising. So you've obviously been quite vocal about Post,

which is based on micro-transactions. And there's plenty of research out there to question whether internet advertising is actually value for money. And there's problems about lack of transparency in the digital ad market. Given that most of the internet is funded by digital advertising,

what do you think the future for the funding of the internet looks like? Is it going to continue being based on advertising? Are micro transactions going to be more popular or is it just going to be like billionaires subsidizing it? Would probably be my question. Okay. I don't think it's an either or on that thing. I do think the internet missed the

opportunity to do much more around subscriptions and you pay for something and it's worth it and therefore it's a cleaner place or whatever. It's just like anything else. That's a problem because not everyone can afford it. This is the argument that a lot of tech people make. That said, it essentially creates a situation where rich people get to live in the clean place and poor people get to live in the dirty place and dirty, nasty, toxic-y place. And so there should have been more attention to figure out a way to do loyalty or usage

or looking at things. Like there was never any creativity because they could just slap this stuff up and use your data that you gave them willingly without any government intervention about what they were doing. So why wouldn't they, right? Why wouldn't they take advantage of this?

So you do start to see the effectiveness going down, like rather severely. And that's kind of an interesting issue. If you look on Twitter right now, what the advertising is, it's really quite, it's like, I mean, cable, late night cable has better advertising and they do not have good advertising than Twitter has right now. And so you can see where it goes and there's all these scams and different things like that.

But I don't see advertising going away. It's just they've got to get more creative and useful. And you see useful advertising on TikTok, on Instagram. It's kind of good. It's just a question of what data it's using and whether you're a participant in it. But I see more subscriptions, Scott. So I'm an investor in Post News. Yeah, I'm an advisor. But the original, and Kara's an advisor, the original sin of the web was probably that we

didn't build in more seamless micropayments because it immediately evolved to an attention economy. And to capture people's attention at all costs with algorithms leads to these externalities. So the GRU is not weaponizing Netflix. New York Times does not depress teen girls. The subscription model just seems to be healthier for society. And I would argue it's going to evolve to both. You have the BBC, which is sort of forced subscription, I guess. But they try to call – I mean, I'm in the honeymoon phase here, right?

When I watch the BBC, I'm like, oh, they're trying to call balls and strikes. I kind of like this. And then you have the thick layer of for-profit advertising that's more entertaining, but quite frankly, it's just more sensationalist, like tune in at 11, right? Come back after the break. So I think that getting people the opportunity to pay five cents to read an article if they're interested in it and also give creators more money, I like the idea of subscription. So I'm hopeful that that gets, that making it easier to pay becomes a feature.

You've got to show people the value, though. Like, what's the actual value? And so I think they haven't been challenged because it's been so easy, and our government's let them do it through sucking up everybody's data and being giant, as Walt Wasberg used to say to me, rapacious information thieves. And that's what they are. That's what they really are. But I don't know if you saw today, Twitter is having a 50% off sale today. Serious. Twitter has said, if you give us a quarter of a million dollars, we'll give you $500,000

in advertising at today's rate card. They basically said, everything's half off. He's cutting the price on Teslas. He's cutting a 50% off. This tells you what a shit show it is at Twitter right now. They're selling the furniture tomorrow. I'm excited. I'm trying to buy the big bird. When you have to sell- Now, go look at my tweet. Go buy things. There's fantastic. You could walk out of here with a chair too. These are also, I know how much all of them cost. But they've got some good shit at Twitter.

They had good taste. And they're having a sale tomorrow from 7 a.m. to PT to 10 a.m. No media company in the world right now, even as hard as it is anywhere, is offering you media at 50% off their rate card. Yeah. And chairs. Eames chairs for $25. Should we go in the back?

Yeah, in the back there. We'll try to get to as many as possible. Hi, I'm Lisa Hsu, big fan of your podcasts. Thank you. Your portfolio podcasts. So I teach startup founders negotiation skills to help them create and claim value for the companies and the missions that they back.

So a question from them, the builders out there, how do you advise in this current climate of headwinds versus tailwinds? There's a lot more headwinds. I love the language that you used to describe it. How do you advise them on the balance of grit versus quit? Grit versus quit? Quit, yes. We hear the advice, just keep going.

But how do you know when you're building the next Airbnb versus Ask Jeeves? Right. Oh, meaning quit whatever you're doing. Yes. Wow. That's a good question. I mean, most founders that I've met, I think grit is the most important part. If they think they have a great idea, you should keep going with it.

But I'm a firm believer of quitting. I'm a big quitter. I leave people all the time when I feel like I'm not making a product I like, or I'm not having fun, whatever criteria I happen to meet, or I don't want to. I had a job where I, it was, I'm not going to say when it was, but someone's like, well, why are you leaving? I said, I just don't want to talk to you anymore. I can't say another word. And they were like, what? I go, really, I don't want to talk to you anymore. I'm sorry to tell you that, but it's a little awkward.

But I think there's power in leaving constantly. Scott's been someone who's been through all kinds of goings and leavings and changing companies. I think that's undervalued, the ability that they think you're jumpy or whatever. But you should really know your value and then figure out where you belong. But be willing to go is one of my strengths, I think. What about you? There's grit around working hard and making sacrifices.

There's grit around realizing if you're a young person and you have kids and you're in a startup and your relationships aren't as healthy as they should be and you're not as healthy as you should be and you're in 20 and you're 30s and you're thinking, shit, this is hard. I'm like, you're exactly where you should be right now

in your life. And I'd like to think that some of those trade-offs that, by the way, my wife is here that we both made, paid off. That's grit. But the best thing that can happen to you in a small company is success. The worst thing that can happen is,

the second best thing that can happen to you is quick failure. I started an incubator in 1999 in New York, backed by Goldman Sachs, Maveron, JP Morgan, and a host of like rich billionaire guys. Maveron, which was Howard Schultz's VC. Boom, we go in, the dot-com bubble collapses. Seven months later, I called him and said,

this shit makes no sense anymore. I returned what little money we had back. It flew into a mountain so fast. But you know what? That's a victory. Because failing fast is the second best thing that can happen. The worst thing that's happened to me professionally, I started a company called Red Envelope in 1997. And there was always signs of hope.

Always signs of hope. You kept going back to that. What was with that? I was just reading up on you on that. Yeah? Yeah. You kept returning back to that. What was with that? What was with that? I was just reading up on you on that. Yeah? Yeah. You kept returning.

Well, what would Tim think? Anyways. What's wrong with you? Let me finish. All right. So the worst thing that happened to me was it took me 11 years to fail. And there were certain moments where I should have just said, rather than trying to burn the village to save it and take on these horrible people, Sequoia Capital, I should have just left.

I should have just sold my stock and left. I should have just called it a day. But I thought, no, this is what leaders do. They never give up. Oh, there's a time to give up. You want to talk about leaving? Americans' core competence that's built into our DNA is we know when to leave. Oh, they're persecuting me?

I'm out of here. There's no economic opportunity. I'm moving west. So grit is your willingness to sacrifice things in the short term, to give it your all, to leave it on the field. But have a kitchen cabinet of people who say to you, okay, I've started nine companies. I'm three, four, and two. I've had more failures than wins. But all you need is one or two wins, especially in a great economy like the UK and the US, where we don't embrace failure. That's bullshit. But we tolerate it. And we let you move on to the next thing. So hopefully, you have some people in your life who can tell you, because it's very hard to read the label from inside of the bottle, that, boss, you've given it your all. But maybe

it's time for you and your investors and your employees to move on. I don't think there's any shame in that. What I hate to see is people will say, never say never, and just keep going and keep banging their hand. Hustle porn. We don't like hustle. Hustle porn. We hate it. That's the right term. Right here.

Hi, I'm Jamie. Thanks very much for coming to London. No problem. Scott, you talk often about the idolatry of innovators. We do have some, or I'd like to think so, some good role models in tech. The Collison brothers, for one, seems like a good example. Whitney Wolf possibly is quite a good example. Why do you not think we hold these people up in higher regard? Why do you think we're all obsessed with Elon Musk? I think that people like Brian Chesky and Mark Benioff, I do think- Tim Cook.

Tim Cook, I do think that they get decent recognition. Underpaid. But here's the thing. As a species, we can't decide to worship. It's just built into us to worship. But we get to decide who we worship. Our brain is big. Our competitive advantage as a species is. Our brain is big. Our competitive

advantage as a species is our brain is so big. We have to be expelled from the body too early. And we have this enormous brain that can ask very big questions, but it's not big enough to answer them. So into that void slips a super being or church. And as education or as societies become more educated and wealthy, the reliance on a super being in church attendance goes down. But we still need something to worship. So the closest thing that feels mystical or godlike is technology. I don't understand how the fuck this thing works. It feels like magic.

So the guy who invented it is worthy of our attention. The guy solving climate change or putting people on Mars. And these are the new idols. And I find it's dangerous because generally speaking, and every person I've ever known plays this out, everyone is fallible. But I think it's a dangerous level of idolatry that these individuals can turn off and on.

Battlefield technologies can sick their 110 million followers on people and intimate that they're guilty of sex crimes. I think we have fallen way too in love with these individuals. But to your point, we should probably do a better job of highlighting some of the people who are good role models. Yeah, I think people just like bad boys. You know what I mean? Like he just, he can't look away.

It's very much like Trump. He's very similar. When everyone was talking about him running, I thought he would win because I was like, oh, I see why. You know, here he is, this very moderately successful person who basically used his parents' money to make money and lied about a lot of it and went bankrupt a lot. But he was sort of a person's version of a rich, he was like a cartoon rich person in America. And he was entertaining and he was interesting and he said things that you wanted to hear. And it was really fascinating to watch it happen. I happened to be in Kentucky when he was saying they're going

to bring back the jobs, you know, he had done that. And that was one of his sales pitches to the people of Kentucky that were voting for him. And I went there too, because they were trying to also do Silicon, like tech stuff there. And I, I got in front of all these people who were like, sort of Trumpy, but also very much like, yeah, we're, coal is coming back. And I said, coal's not coming back. And when it comes back, it'll be robots who are going to do it because you people cost money to the rich people and they're going to fuck you 10 ways to Sunday. And by the way, our tech stuff isn't coming here either because you're not educated enough. So sorry, you're not getting anything. And, and actually people came up to me and say, thank you for telling the truth. I was like, they're all lying to you and you have to figure

something else out. I don't know what you can make here, thank you for telling the truth. I was like, they're all lying to you, and you have to figure something else out. I don't know what you can make here, but it's got to be something. And so, or not. They make fantastic whiskey and bourbon. Right, whiskey, whatever. I don't care what they make. I mean, some of the best. But you do see why Elon's—

Great resources? I'm sorry, go ahead. You see why Elon's attractive. He tells it like it is. The lords and ladies are running your show. Literally, the richest person in the world is talking to you about lords and ladies it's hysterical it's and then people like yeah man you're on our side i'm like are you kidding i don't think his feet touch the fucking ground i think people lift him and move him around you know the way they live and so

it's i you know just i think it he manifests other people's frustration with their lives and he sticks it to the man. And they always are like, oh, Kara, why are you being mean to him? He's sticking it to the man. I'm like, he is the fucking man. Like, he's the man. He's sticking it to you and regular people. And he's always punching down now.

We didn't do that before as much. But to your point about the idolatry of innovators, and specifically in America, I'd call it the idolatry of wealth. And granted, I'm in the honeymoon phase here, but something I've noticed about the UK versus living in the US, in the US, people ask you what you do. And it's basically kind of this mating ritual. I'm trying to figure out how rich you are. And that's kind of where you feel like the question is going. And here, people ask here, where are you from? And it's nice. And it doesn't, look, you're infected with the same capitalism, which I still think is the best system of its kind. But it seems a little bit more elegant here.

It seems a little less naked here. But again, like I said, I'm in the honeymoon. They're quietly assessing you behind the scenes. They're just not saying. All right, the last question was right. These are great questions, by the way. I'm Caroline. Caroline?

Caroline. Nice to meet you, Caroline. Nice to meet you. I was interested in your view on kind of remote working and whether it's a COVID blip. You've obviously moved recently to London. I know, for instance, a lot of the meta leadership team have also moved here and sort of scattered.

But I feel like, you know, one thing's for the most, a lot of people have actually behind closed doors said they kind of admired his stance on like cutting remote working. A lot of CEOs, I think, say behind closed doors, again, it doesn't really work. I'm interested in your view, now there's a recession, do you think employers are going to have less power on that and things are going to shift back?

That's a good question. I've been remote working for 30 years, so I've worked in the back of my house often. We've had offices, but they tended to be choice of whether you go in or not. I don't think it's a hybrid. I think people have to intentionally meet together as a group. I don't think everyone needs to go into an office.

I've never thought that. I used to hate going into newsrooms. I didn't find them particularly helpful because it was a lot of waste of time and a lot of waste of commuting, et cetera, and a lot of socializing, which is great, which is fine if you're young. But I think you've got to figure out a way to intentionally get your people together so it's in the productive times.

And the COVID has given people a chance to do this and have optionality of being in one place. I do think too much money was spent on headquarters and food and all that crap. It's just, when you go to any of these companies, it's, they're like little college campuses because they want to trap you there. And they used to try to trap you with the food

and the stuff and the dry cleaning, the haircuts and the massages and da-da-da, whatever, on and on. Now they just order you to be there, which is, I don't think helps very much either. Certain jobs, you could probably be more creative, but I don't think hybrid is quite right, but it's some mix of letting people be more flexible around kids,

around elderly, people taking care of elderly, because we don't respond to that. I think actually the most enduring change coming out of COVID, other than the politicization of science, will be remote work. And that is, it is here to stay. Now there's some nuance, and that is, And that is, it is here to stay. Now there's some nuance. And that is, we have a tendency to process stuff in zero and ones.

Back to nine to five or all remote. And the reality is 90% of companies will be somewhere in between. But if it's two to three days a week, you're talking about a net destruction in the demand for office space of 40%, which is a $12 trillion asset class. You're talking about a huge decline in the value of commercial assets that'll be all pumped into residential. Because all of a sudden, I don't know how many of you, I worked remotely all through COVID, decided, wow, our house isn't as nice as I'd hoped. And you start upgrading your house. So that money is going to get flushed into residential. There's some nuance here. It's an enormous unlock for people with kids. It's an

enormous unlock with people with aging parents. It's an enormous unlock for people with kids. It's an enormous unlock with people with aging parents. It's an enormous unlock if you're struggling, you have some sort of physical limitations, or maybe you can't afford to live. The people who've decided, everyone, show me someone who said, everyone's back in the office. I'll show you a wealthy guy who has someone taking care of his kids and can afford to live near work. They grew up in the before times, and they were

able to get into work, and that's how they were successful. So they say everyone else should be successful. There's a negative to this, though, and that is people under the age of 35, I would call it, who are still hunting for mentors, still hoping, hunting for colleagues, still hunting for mates. We don't like to talk about this. A third of marriages begin at work. The office is a feature, not a bug for young people. It's situational. I think it's a huge unlock. I don't think it's going back, but young people, get into an office.

It's a great place to establish relationships. I do think CEOs will figure it out. I think more productive. A lot of people are using the word intentional, which is kind of an unusual word, but you can do that. You can tell people where to be and when you want to do it. So we'll see.

That's a great question. All right, everybody. Thank you so much. We really appreciate it. This episode of Pivot was recorded live in London and produced partner from seed to the great Series A, and EMEA's most successful investor in unicorns at SeedStage. Ernie Entretat engineered this episode. Thanks also to Drew Burrows and Miel Saverio. Make sure you subscribe to the show wherever you listen to podcasts.

Thanks for listening to Pivot from New York Magazine and Vox Media. We'll be back later this week for another breakdown of all things tech and business.