Pivot - Pivot LIVE! From the 2019 Code Conference

Episode Date: June 14, 2019

This week's Pivot is live from the Code Conference in Arizona. Kara and Scott talk regulations for the tech industry and why we need more female CEOs so we don't feel bad about firing the bad ones. Also, our hosts review some of their old predictions and see just how spot on they were about Lyft, Snap, and more. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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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. Now, I'd like you to give it up for Pivot, Kara and Scott's weekly podcast that offers unfiltered insight into the way technology is shaping business and culture across media, advertising, politics, and more. You know, with great power comes great scrutiny. Here's Kara Swisher and Scott Galloway. Oh, nice music. Hey, everybody. All right. Okay. So we usually do this separately often in San

Francisco or DC and Scott is in New York, and sometimes we do it together. And we've done one, what went on? Are you trying to be me? Yeah. Well, it's not working. Yeah, I want to be Burt Blackrock. Better yet, I'm Angie Dickinson. Okay, all right. Nobody understands that reference but me. You'll get it. Okay, all right. In any case, we did it at South by Southwest. It was a great,

it was our most downloaded podcast so we need a lot of energy from you because we want this to be our most downloaded podcast but we did a great one from South by Southwest lots of predictions and if you know Pivot

basically we just insult each other and then discuss the issues of the day essentially correct? Oh you changed your glasses I did now you're doing the I got self-conscious all right

so we're going to start doing it and I'm going to do it the way we do it everyone the, the hi, the hello thing. Okay? Let's light this candle. All right. Light, light. Okay.

All right. Hi, everyone. This is Pivot from the Vox Media Podcast Network. Cheers, please. We're live. We're live from the Code Conference this week. I'm Kara Swisher. And I'm Scott Galloway.

So I'm glad you're here, Scott. I'm glad to be here. What do you think of my empire? What do you think of my empire? I think this is like a wedding in Tennessee in 2020. Almost everyone I've met here is related to you. Yeah, okay, all right. I see cousins, nieces, ex-wives, people carrying your baby. You're literally like a nation state powerful person in an oil producing nation.

This is just strange and inappropriate, but I'm thrilled to be here. Okay, good. Okay. You know. And these don't work, but I think they make me look younger. Yeah. I think the likelihood that I end up making out with Maureen Dowd at the coffee bar goes up about threefold to zero with these.

Okay. By the way, that makes the news cycle. I mean, the dumpster fire that was that Susan Wojcicki thing yesterday. Yeah. That's one thing. But come on, me making out with Maureen Dowd, what do you think? Seriously? Is that a hate crime? As usual, Scott, inappropriate discussion of people's sex lives. But last week you did talk about your penis, so that was nice. Somehow you related it to Facebook. Don't criticize my hobbies, Kara. Okay. All right.

So here's the deal. We have a lot to talk about. We've got 30 minutes. We've got to make predictions. We would like predictions from you all. What we're going to do is talk about some of the issues. So let's start with Susan Wojcicki, the interview that Peter Kafka did here. Yep.

Thoughts? Well, I'll flip it back to you in about 30 seconds, but I think you have to cut her some slack because this is my first code. And if you do any hard analysis, if you're a tech executive, on a risk-adjusted basis, you just shouldn't do an interview because the downside is asymmetrically disproportionate. So anybody that shows up

and is willing to take questions under hot lights and under the scrutiny they're under deserves some credit. She is like that. She does show up. She's an executive. She shows up. She deserves some credit. Yeah, absolutely. And I thought Peter Kafka was forcefully undignified. I thought he did a great job. But this is the reality. It's beyond her. It's beyond the interview. And you

summarized it perfectly. The whole thing's gotten away from them. Right. And there's this weird gestalt they're trying to create that's a myth, and there's a bunch of myths we need to bust, and that is for some reason there's some sort of societal or primitive or species right to post shit on these platforms. There's not. They talk about First Amendment. These committees have no obligation to the First Amendment. They don't give a shit about the First Amendment. That's a fallback position to try and allow millions or billions of pieces of content that they don't pay for it, that they don't have an obligation to screen, such that they can have a supernova business model. And here's the bottom

line. Media companies have been making discretionary calls with one of the most expensive things in the world, and that's called human nuance. And they've decided they don't want to implement that, so they default to bullshit like the First Amendment. Right. It's got nothing to do with it. Anyways, I said I would kick it back to you. So what would you do if you were her? Like, she didn't have a lot of answers. They said they're working on it.

A lot of the things we talked about, it was like, so sorry. We'll try to do better. We're working on it. Is it workable? Oh, it's very workable. They need to break it up, and they need to be subject to the same scrutiny. If you and I said something here that got reverse engineered to a 70% increase in admittance to emergency rooms of self-cutting among young girls and depression, we would be in a world of hurt.

For some reason, we've decided, or in the Content Decency Act, we've exonerated big tech because they're quote-unquote nascent technology firms from the same scrutiny as every other media firm. So it's not only imposing new regulation, it's removing old regulation, and it's breaking them up. Because in the first corporate strategy meeting of YouTube post the breakup, they say, I know, let's get into search. And before you know it, there's one company with like 70% share of search instead of 93, and there's one with 25. And in the first corporate strategy meeting of Google post the breakup, Google goes, I know, let's one with 25. And in the first corporate strategy meeting, a Google post to break up Google goes, I know.

Let's get into video. Right. And then two video companies. One goes, how are we going to get P&G to advertise on Google, Tube, or YouTube? One goes, I know. Let's go to these nice people at P&G and say, you know what? We're going to make this a safe place for teams. You know what? Head of Ford who served in the military, we're going to honor the nation's sovereign security.

And we're going to make the requisite multi-billion dollar investment to ensure this platform isn't weaponized by the foreign intelligence arm of a Russian government. Competition is the key. These people will never make a connection between what they're doing and the perversion of our democracy and teen depression. Tobacco executives never made the connection between tobacco and cancer, because when it's raining money, your vision gets blurred right the nra will never make the connection between the sale of assault weapons and the murder of children and the youtube ceo will never make the connection between unfettered content and the radicalization of young people they will never make they come from an idea that you should be, it's really prevalent there in Silicon Valley,

that open platforms, the way the words they use, open platforms, we don't want to edit people, you don't want me in charge of this. And some days I'm like, I don't particularly want you in charge, but I do want someone in charge. Like, you know, it's come out of Mark Zuckerberg's mouth so many times. And I literally, I'm like, no, you know, you definitely should go. But other people, yes, you may leave, you may leave. You may leave the room and take your billions and give it away to people that need it, that kind of stuff. But it's meant to stop discussion about it, is what it is. And then when you go at them, they're like, how could you as a journalist favor this? I said, I favor not giving neo-Nazis massive mainstream platforms. I just do. I'm going to go with that one. I think it's a good

thing. And at the same time, they should be able to put websites. They should be able to do all kinds of things, but not when they become threatening and dangerous. And I think the question is, what is dangerous? And that's the issue. So what would you do if you were her? It's too late. So let's be honest. She's doing her job. Her job is to make a shit ton of earnings for her shareholders. We think at these conferences that we're going to call on their better angels, and we're going to outline the problems, and then we're going to shame them, and they're going to show up, and they're going to reduce their earnings in order to be a better organization. Well, don't hold your breath, folks. That is not their job. Their job is to grow earnings. A for-profit

organization is the powerful engine of a capitalist society. We have decided that is the gangster move around building the most productive economy in the world. But if you don't have referees on the field, Tom Brady, who is a lovely man, will always make incremental decisions to cheat if you allow him. Because the rewards for cheating are so great that you will make those incremental rationalizations in your mind and not take responsibility for the massive destruction and damage that Sheryl Sandberg and Mark Zuckerberg do every day to the world. They will make incremental decisions and rationalizations such that one can be worth $65 billion and the other can be worth a billion. Because when you're worth that kind of money, you'll go into an echo chamber and a lot of people will tell you that you're awesome. It's the government's responsibility to put

referees on the field. It's like this ball is deflated. So who's really fucked up here? All of us. We have not elected the people who have the backbone and the sack to regulate these companies like we have regulated oil companies. Yeah. And this is the argument we have. Okay, I'm going. Okay, go, go. Here he goes. This is the bullshit argument we have. Okay, I'm going. Okay, go, go. Here he goes. This is the bullshit argument we have. We make this binary decision because we're all busy and we all digress to a zero-one binary way of processing data because it's the fastest way

to try and solve big problems. And we try to decide, is big tech good or bad on a net basis for the world? And the problem is the world net, because usually we end up with on the whole, they're good. So don't do anything. Pesticides are a net good for the world, but we have an FDA. Fossil fuels are a net good for the world, but we have an emission standards. So let's acknowledge big tech is a net good for the world, but we need something resembling some sort of sane regulation from our elected leaders. And they have literally lost the script and been asleep at the switch. They have. They have just woken up. Agreed. Agreed with all this. I don't think she can do it.

No, nothing she can do. All right. So one of the things we talked about here is spinning off, spinning off. That was Andy, we talked about it with Andy Jassy. I'm going to get back to you. What would you do if you were Susan? You know better than I do. I would spin it off. I would spin it off. I would spin it off and then do exactly that. Then you're in a competitive position and there's an advantage to being blank and there's a disadvantage to being blank. So I think that's, and removed from Google.

I remember when it happened. I wrote about that because Yahoo almost bought, and Terry Semel, who was the CEO of Yahoo at the time, they were off by a very small amount of money. And he was worried about the copyright issues at the time. Having been a Hollywood executive, a major Hollywood executive, he was worried about the copyright issues. At that time, that was the big issue between YouTube and that was their big business challenge. It wasn't neo-Nazis. It was copyright. And so I think they didn't go into Yahoo. And then Google bought it. Google had Google Video at the time.

That's what people don't realize. There was a section of the company. It was a competitive situation. But when they bought YouTube, I remember talking to Sergey Brin about it. And he said, we had to buy it. It was existential for us to own video on the internet too. Like we had to have it no matter the price. And so that was a really interesting moment.

I remember him saying that to me. No matter what it was, directionally, we had to have that. And the same thing with advertising that they bought, the advertising technology. And so I think spinning it off is exactly right. And so one of the things we talked about when we asked spinning off to Susan, she was like, like that, I'm not thinking about that. When we asked it to Andy Jassy, I don't want to talk to analysts. I don't want to spin off AWS. Facebook, not a good idea to spinoff Instagram or WhatsApp or whatever. And so they just don't want to be CEOs. Either they don't want to be CEOs or they think it's a bad idea. And then their counter argument is the bigger we are, the better, and then hence China, because of China.

And so that's where they go. I think spinning it off is exactly. Yeah, yeah. But to say you're in favor of a spinoff is like saying in front of the king, I want to be king. Right. It means the next day you're executed. Right, yeah. So let's be clear. Every senior executive at every tech company wakes up in the morning and looks in the mirror and says, hello, Mrs. CEO. These are not modest, humble people. And the reality is Susan does better in

a spin. Because this is who wins. In a spin, the economy wins. Shareholders win. We'll come back to that. The markets win because of competition. They're easier to regulate. There's more job growth, more VC-backed companies. The only people that lose in spins are the CEO of the seven realms. Because then they just become the CEO of Westeros, and they can't justify their competition. I knew you'd get to Game of Thrones. It's over. Scott, it is over.

Oh, it's never over. It's over. It's never over. It's over. They're doing a prequel. You need to move on to something else. They're not doing a prequel. The Prince of Dorne gangsters coming back. No, he's not. Come on. How hot is that guy? He's over. They're doing a prequel. You need to move on to something else. They're not doing a prequel. The Prince of Dorne gangsters coming back.

No, he's not. Come on. How hot is that guy? He's dead. How hot is that guy? He's dead. Kills people. He had his head crushed.

Does everybody. You're good looking. I'm doing you. I'm killing you. That guy's coming back. Anyways, I don't know. How did we get here? He doesn't have a head.

Everybody wins in a spin except the current CEO. And guess what? Who's in charge? And guess what? The board's not because of two class shareholder companies. But I think- So you talked yesterday, besides your brief sojourn into lesbian fantasy with Mackenzie Bezos and Sheryl Sandberg- It could happen. No, it couldn't. It could happen. It could not happen. I'm speaking from experience. It could not happen. But you did talk about firing CEOs, too, besides the spin-ins. You talked about firing them. If you did this, you would get fired, and nobody gets fired. Well, here's the thing, and I get pushback on this. There's a perverse dynamic in big tech,

and this is true in corporate America. And that is because there's only 23 female CEOs of the S&P 500, because women have to navigate this Hunger Games-like environment in big tech to get to the C-suite, once they're there, they become a protected class. Marissa Mayer should have been fired well earlier before the company was acquired. Sheryl Sandberg, I can't tell you how many boards I've been on that have fired people for a fraction of the negligence, the gross negligence she has demonstrated.

But what about Mark? Come on. Well, hold on. Mark should be removed. But let me just back up. I'll do that. I'm going to talk about women in tech and then I'm going to come back.

So this is the bottom line. We need a lot more female CEOs so we don't have this existential crisis firing them. And when it comes to Mark, the answer is simple. I'm on the board of a company, and about eight months ago, the controlling shareholder, a hedge fund who put us all on the board, there were some tense decisions to be made, called and said, just here to remind you that we can remove all of you at any point. And we really want X to happen. And we as a board had the right response. And that is, we get it. We're big boys and girls. But until that point, we're going to do exactly what we think is the right thing, is do shareys for all shareholders. It, in my view, is impossible for the board of Facebook, who in my view should be shamed and their names should be more well-known than they are, not to get together at 4.59 during

executive session at the end of the next board meeting and say, this has gotten away from him. Good guy. It's time to move on. He's a big shareholder. The DNA of the company is important. Founders are important to companies. I'm a founder, so I'm biased towards them. We're going to kick him to chairman, and we're going to bring in someone that the market's like. It's just time. It's just time. That's not a crime against him.

I've been floating. I've been playing Brad Smith's name. And then they issue a press release saying, we have removed Mark Zuckerberg as CEO and asked him to be chairman. He is chairman. Okay. Removed from the CRL. Thank you. And then the next morning he has to decide if he goes full Cersei and fires the entire board. And I don't think he will. I think it's full Danny, but go ahead. Full Danny? Yeah. I don't think he will. I think he does the math and goes, I'm probably going to invite all kinds of regulation, controversy. I don't think he's

going to burn the village to save it. So let's be clear. The board falls back in this notion that they can't do anything. Oh, they can do something. Every day they deny their fiduciary responsibility not only to shareholders, and there'd be incredible shareholder exposure. Again, can I bring you back to reality? Sure. That board is not going to do it. Fair enough. Why do you say that? Mark Andreessen, Peter Thiel. No, 100% no. And the ones that were more difficult, I would say Reed Hastings, Erskine Bowles. They left.

They left. Okay, here's the thing. Ken Chennault, very decent man. Maybe Ken. High principal man. He raises his hand at 459. This is my view as leadership. And he says, I can give you a million reasons why we need to fire this guy right now.

We can make it honorable. We can say it's his idea. Most firings are that. You make it their idea and you say, what's the narrative? And then Ken goes, all right, if all of you are this batshit crazy and refuse to be good fiduciaries for the Commonwealth, for the health of teens, fine. I'm not going to be a party to it. And I'm going on record with the New York Times tonight at 5.01 PM saying that it was time to fire him. And I resigned when the board refused and start shaming these people. No one's going to remember Ken for the money he makes on Facebook board being complicit in what is the most damaging organization

in the modern economy. Someone is going to remember someone on that board who raises their hand and says, you know what, I'm willing to stab the prince. And if I get, whose grandkids are going to be ashamed of grandma or granddad because they decided it is time for Mark Zuckerberg to move on? I don't know. Who's going to be ashamed of grandma? Or who's going to say grandma was a badass and saw danger and went out on a limb and tried to move this guy away from the most dangerous. This is the most dangerous person in the world right now. Trump is gone in 18 months, maybe 56 months. Putin biology will set in in six to 10 years and take care of him.

This is an individual who is trying to encrypt the backbone of the communications network of a population greater than the Southern Hemisphere plus India. Somebody needs to step up and remove this guy as CEO. That's how they create their legacy. That would be the ultimate gangster move for our economy. Facebook board, there is a leader amongst you. Show it. No one's going to remember you for showing up every three months for free dinner and making money. Okay. All right, Scott. All right. Good for you. Let's see what we can do. We should be on the board, don't you think? Oh, yeah. I was just asked to be on the board of a big company. I heard about that. Yeah, you can't say what it is, but nonetheless.

You check a lot of boxes right now. I do check a lot of boxes. I don't think they should let me into any board, but nonetheless. It's interesting because there's a whole debate of whether journalists should be on boards. On the other hand, if you want boards to change, why not have difficult and obstreperous people on them? Anyway, so it's a whole debate of whether journalists should be on boards. On the other hand, if you want boards to change, why not have difficult and obstreperous people on them? Anyway, so it's a big debate. You know who did well yesterday, by the way? What? A.G. Salzberg.

I feel good. So 60% of world leaders get the New York Times every day in some format. Yeah. Including in places you would think not read. The New York Times literally kind of indicates, says to the free world and the non-free world, this is what's important. Yeah. The most powerful country in the world.

He was great. I've spent a lot of time with him. And I liked him when I heard him. And then, okay, so he's in charge of what the world kind of sets the agenda. And then you had Susan and some other people from Facebook saying, we're in charge of what billions of people see. And I was much more comfortable with him. Yeah.

I was much more comfortable thinking, this is a thoughtful guy taking responsibility and really understands the space that he occupies. By the way, family-run businesses, I'm on the board of much of them. There's this cartoon that it's jerks running around going, but dad said this. Rising to the CEO position of a family-run company is actually really, really difficult. He's not CEO, he's. There's a British guy, Mark Thompson. Don't kid yourself. I don't. I don't.

Arthur had Janet do all the hard decisions, but he was the CEO. AG gets to call the shots. Yeah. He makes the big decisions. The other guy does all his work. Yeah. Okay.

All right. Okay. All right. We're going to move on. We've got to do wins and fails. All right, we're going to move on. We're going to do wins and fails. images of somebody sitting crouched over their computer with a hoodie on, just kind of typing away in the middle of the night. And honestly, that's not what it is anymore. That's Ian Mitchell, a banker turned fraud fighter. These days, online scams look more like crime syndicates than individual con artists. And they're making bank. Last year, scammers made off with more than $10 billion. It's mind-blowing to see the kind of infrastructure that's been built to facilitate scamming at

scale. There are hundreds, if not thousands, of scam centers all around the world. These are very savvy business people. These are organized criminal rings. And so once we understand the magnitude of this problem, we can protect people better. One challenge that fraud fighters like Ian face is that scam victims sometimes feel too ashamed to discuss what happened to them. But Ian says one of our best defenses is simple.

We need to talk to each other. We need to have those awkward conversations around what do you do if you have text messages you don't recognize? What do you do if you start getting asked to send information that's more sensitive? Even my own father fell victim to a, thank goodness, a smaller dollar scam, but he fell victim and we have these conversations all the time. So we are all at risk and we all need to work together to protect each other. Learn more about how to protect yourself at vox.com slash zelle. And when using digital payment platforms, remember to only send money to people you know and trust.

The Capital Ideas Podcast now features a series hosted by Capital Group CEO Mike Gitlin. Through the words and experiences of investment professionals, you'll discover what differentiates their investment approach, what learnings have shifted their career trajectories, and how do they find their next great idea. Invest 30 minutes in an episode today. Subscribe wherever you get your podcasts. Published by Capital Client Group, Inc. You go first. Win. Gosh, that's a good question. Win this week. Do you want to fail?

I want to fail. I'll do a fail. The Uber situation. I've been doing all the talking. While you were here, Uber lost its COO and CMO, which I think is a big deal. Barney Hanford and Rebecca is the woman who came on. The CMO is less interesting. They put it all under Jill Hazelbaker, who used to be at Google. Thank you. And lots of places. Jill is really interesting. She was briefly at Snapchat on my advice, and she left and is now at Uber. She's highly competent.

But the COO was somewhat controversial with inside the company, and they decided that more people need to report to Dara. I texted Dara last night, like, what the fuck's going on? He did not reply. And I'd like to get him publicly to talk about it, but it seems to me they seem to want to be closer to the people. So I think, I have a feeling it might be a fail or an adjustment so close after what is somewhat of a disastrous IPO effort. Now, some people say it's early on in the game, but it was interesting. This is really unusual because people say it's early on in the game, but it was interesting. This is really unusual because, and it's a very negative forward-looking indicator that

all is not well, because typically you set everything going into an IPO. You make sure your management team's set. You make sure your earnings are booked. And the idea that they're having this sort of turnover right now is really difficult. I met with the CTO of Ford who's here last night. So Ford, 210,000 employees, average wage is about 28 bucks an hour. Healthcare, I would imagine, for 90% of those people. So imagine 200,000 people, there's probably, I don't know, 30 or 40 babies every week born into health insurance, born into a middle-class wage. Uber, Uber, class wage. Uber, Uber, 22,000 employees. Splitting the value of double afford, 22,000. Oh, but wait, 4.1 million driver partners who don't have health insurance, don't have minimum wage protection,

and make on average $9.25. Sheryl Sandberg was the ultimate lipstick on cancer for the last few years. It's now Dara Khaswishahi, who is the head of a shameful organization. We have legitimized the notion that it's okay in the United States to move towards an economy with 3 million lords being served by 350 million serfs. That was not the Uber IPO. That was the lords take revenge on the serfs IPO. It's an outrage that we let this shit continue. All right, then you are a socialist. No, I outrage that we let this shit continue. All right, then you are a socialist. No, I'm kidding. I agree with you. I agree with you. I agree with you. Hello, you're a social... That guy. Why do you go on with that guy? I go on Fox once a week because I like to go behind enemy lines. Yeah, okay. And by the way, a lot of it is a script. A lot of it is bullshit. They're actually fairly nice, smart people. Yeah, right. And they get talking points

every day. Oh my God. I don't even start with they're very nice people behind the scenes. That's bullshit. I'm sorry. That's so much. You just don't like Tucker because he's not nice. No, we invited Tucker Carlson, and he said he was coming, and then he said he wasn't. But Tucker and I are going to go at it together. It's going to be great.

It's going to be fantastic. We're going to compare our elite private schools, of which he paid more for his. He called me an elite, and I'm like, you went to a school that was four times more expensive than mine. Clearly, you're not bothered by this. It bothers me. Fucking asshole. I just feel like he's an elite, too. Fine. Here we go. I'm just saying. Here we go.

All right. In any case, he also called me no talent, which really, I'm like, okay, I can be a jerk, but I'm not no talent, okay? No, you're talented. You're exceptionally talented. I wanted to be accurate about my negative qualities. You're exceptionally talented. Yes, it bothers me. Anyway, your wins and fails, because we've got to get to predictions. Okay, so my win is I've been thinking a lot about John McCain. I talked about this yesterday.

Or in Arizona. Yeah, I think he's a tremendous role model. The guy enlisted in the Navy, flew thunderbolts over Vietnam. Supposedly wasn't a very good pilot, by the way. Everyone has their faults. And was shot down and refused offers if he- Because he was from a famous family, a military family. From a famous military family.

Went on. Imagine the low points in his life and decided that he was going to fight for the dignity of humanity and was always full stop. There is no such thing as an enhanced interrogation technique. This is torture. Stop it. Full stop. Can you imagine any of our, I don't want to get into names, but imagine our current leadership adopting a child? That's what the McCains did. I mean,

this guy, real honor and role model, represents Arizona very well. Okay. All right. Your fail? My fail is the myths that big tech continues to propagate at conferences like this around. They were moving to a nationalist argument around, don't break us up, that the Chinese with their AI-weaponized companies are going to come for us. And there's no evidence that 11 smaller, more nimble companies wouldn't be just as good. And also, the China threat is totally overrated. The Chinese are fantastic at supply chain, innovation, and intellectual property theft. They're not good at building global brands. There's probably not a single Chinese brand in

your life right now. They're terrible at going abroad. Chinese brands don't travel. Do not be worried. I agree with you. The notion that, and I'm not trying to pile on Susan, but when you asked her about breaking up, or Peter did, excuse me, she said, well, you just got to be careful. There's a lot of unintended consequences of breakup. Oh my God. Facebook and Google are the land of unintended consequences, not antitrust. Antitrust is probably the most predictable government action in history. Try and think of an antitrust action that didn't work. It's like one of the few things. We screw up wars. We have bad taxes. The government screws up all the time. They mostly

get it right, and they don't get enough credit for mostly getting it right. Antitrust, they're batting 1,000. Every time they break up companies, we look back and go, yeah, that was the right thing to do. So the notion that they're making the nationalist argument. Oh, and the other one I like is we're the only ones with the scale to fix the problems that we created. It's the scale that's getting them into all the trouble. They can't manage it. So enough already. Just stop it.

Just stop it. Okay. So now we're going to do predictions now, Scott. I like your anger. It's very controlled, though. You didn't jump up or anything, which is nice. Okay. We're going to do predictions now, Scott. I like your anger. It's very controlled, though. You didn't jump up or anything, which is nice. Okay. We're going to do something a little different.

Being in Arizona in June. It's hot, yeah. You're welcome. Okay. We're going to do something a little different for today's prediction segment. We're playing some of our past predictions and talking about what changed since we made them. We've got to do this fast. We've got a very short amount of time. Let's start with something we discussed back in February, whether it be this be the year that big tech gets regulated. This is from February 15th. Let's play the clip.

What was your message to these Congress people? Well, you know my message. My message is that these organizations have become invasive species. They are Sith Lords who started out benign and then turned to the dark side of the force. And unless we arm you, our representatives, with insight and data and the backbone and wherewithal to break up what have become invasive species, that we're going to continue to kill innovation in our country. Our tax base is going to erode. The middle class is going to continue to experience flat wages.

The government is here to serve the governed, not the governors, and these companies have become the governors. So the Sith Lords. The Sith Lords. That's really interesting. I just had Shoshana Zuboff on talking about this. She has a book called Surveillance Capitalism where she has exactly the same messages,

the hijacking of everything by these companies and for more dire, even more dire predictions from her in terms of what's going to happen. Do they hear you? Do they, do they, because you know I've been banging this drum for a while too. So do they hear, hear your messaging? They hear you. They agree.

They nod their head. And they are totally befuddled as to what to do about it. All right. In this show, we thought probably not. They get regulated. What do you think now? Very quick. Yes.

It's happening. It's happening. It's happening. Yes. Just today, DOJ, Matt Macon, Delrahim, who I also did a good podcast with, was laying out the arguments for antitrust. A lot of regulators, a lot of things. David Cipollone at Congress. Saying that consumer harm is not the only litmus test.

Yep. All right. So we'll change that. Yes. Yes. Okay. Clip two. Which is going to be terrible for my career.

Right. I'm like basically MSNBC if a Democrat gets elected. All right, yes. Okay, clip two. Which is going to be terrible for my career. Right. I'm like basically MSNBC if a Democrat gets elected. All right, okay. Okay, all right. You can become a, you can go to Fox. By the way, us on stage listening to ourselves on radio, this is like narcissism gone crazy, isn't it? Yeah, yeah, I like it.

Okay, next one. Snap has the same two-class shareholder system. You have a young man who's already a billionaire. And if it wasn't a two-class shareholder company, I think they probably would have sold by now. And this is a problem with two-class shareholder stocks is right now he doesn't really need to be a fiduciary for other shareholders. He's off to the races. He thinks he has a viewpoint or a vision, which he has been totally unable to articulate what it is exactly they're going to do here. You know, the redesign didn't work. They're getting killed.

Well, he had a very good vision initially, right? It's a really fresh vision. Everyone stole it. Oh, sure. It's a great company. And I find, I have to say, of a lot of the people I talk to, I really enjoy talking to him because I always have a really, he's a visionary is a good word. He actually, you're always like, oh, I didn't thought of it that way. But you're right. It's the execution. Visionary, vision can only get you so far. But the CFO leaving, it kind of punctures another prediction we had a few months ago where I thought that Amazon was a likely

acquirer because the CFO was a 20-year veteran of Amazon. And the fact that someone who was at Amazon for 20 years, you could hardly describe this person as a flake or someone who just kind of goes off half-cocked, leaves Snap after six months, is a very negative forward-looking indicator. I got it wrong. I thought Twitter was going to be below $10 a share right now.

Snap. Snap and Snap, which I believe that if Mark Zuckerberg was more honest, he'd call Instagram stories Snap. I thought Snap was going away. And they've both held. The earnings, they've both held. All right, clip three. And then we're going to bring, if there's predictions from the audience, next clip.

Let's revisit our Lyft prediction. How's that going? How's that working out? Not good. Not good. So Uber's this week. We nailed the prediction on Lyft. So Uber, let's talk a little bit about Uber. Uber's coming out. OK, that's that going? How's that working out? Not good. Uber's this week. We nailed the prediction on Lyft. Let's talk a little bit about Uber.

Uber's coming out. They keep coming. They keep lowering the price range. It's now down to 90 building. I'm not sure, and it's much more fun to talk about dramatic predictions, but I've decided my prediction around Uber in terms of the stock is going to be met. I think this thing is being perfectly manicured and measured to a small pop, and that's about it, and I think it'll hold steady.

So we mostly got that right, but be clear. Ride hailing is going to shed more value than the majority of the S&P 500 companies are worth in the next 6 to 12 months. Lyft makes absolutely no sense. It's in a terrible business, and it has no other businesses, and it's burning cash. Ride-hailing is a terrible business. Uber has assets. Uber is a global brand. The globally affluent, typically the first and last brand they see when they're on the road is Uber, and it's shown a flywheel effect. It spun out Uber Eats, which is a great business.

So Uber could execute perfectly and take advantage of all their great assets and be worth half what it's worth right now. The valuation makes no sense. But fixing the Lords and Surf's problem. There you go. Which they won't do, but we don't seem to be that jonesed up to fix it.

Lyft could literally go away. Lyft is, there's no justification for Lyft's business. It's the number two without the global brand, without the flywheel effect. It's a terrible business. All right. Do we have any predictions from the audience? I don't know if we do. Any predictions? Did they send them forward? All right. One more prediction, Scott Galloway, and then we'll get out of the way for the other podcasts. I just, the prediction yesterday, the market's got it wrong. When they announced the FTC and DOJ said, okay, you take Amazon and Facebook, we'll take Google, or we'll take Alphabet and Apple. And

the markets hammered these companies. They got it wrong. These companies are going to skyrocket in value over the next six months because analysts are going to start recognizing that these companies, WhatsApp is going to be an incredible company. It's an independent company. Thank you. This is a stock call. I think if you were to buy all four of those stocks, I think they're up between 10% and 20% in the next six months as the markets start to realize that spins are going to be amazing for shareholders. Okay. We have just a little time. I'm going to do instant predictions with Scott Galloway, Ms. Cleo of my life. All right. You know who that is, right?

I don't. Okay, forget it. Don't worry about it. It's perfect. Okay. Prediction on when Zuck will get removed as CEO. You just have to make short answers here. I think it's within, I'm always early.

I think it's within 12 months. I think it'll be within 12 months. We have come to accept, and this is a general unfortunate problem, I think, in our society, that we just have to accept it, that the world is what it is. No, it's not. The world is what we make of it. Put pressure on the board to take a leadership stand. We can absolutely remove this guy. All right. When will Trump get impeached, or will he win in 2020, Scott Galloway? What do you think? I get this wrong. I'm terrible at politics. No idea. No idea.

No idea. I have no idea. Either. I don't know. Either. I don't think they will do the impeachment. Nancy Pelosi's not going to bend. I think she's making a political calculation,

and she's taking the flack for it. She knows she has to protect those areas that are pro-Trump or concerned about other things besides the impeachment, and so she's going to just take all the flack from her left and not do anything. She's a very savvy political calculator. Whether it's the right thing or not, she wants to win back the... Yeah. She wants to win.

All right, will he win 2020? I don't know. I don't know. I don't know either. Is Kevin Systrom John Snow back from the dead? We're going to end on that. That's a good one. That's good. He could come back. Okay, so here's a big problem with our economy right now. And I say this as someone who's sold companies. When you sell a company, you get a lot of money. The economy and venture has largely

been described as a conspiracy between the venture capitalists and the CEO founders. And the CEO founders, and I'm one of them, do really well on acquisitions. But in exchange for doing really well financially, we sign, as does the senior management, these very onerous non-competition and non-solicit agreements. A non-solicit agreement says that if you go do anything else or you leave, you can't approach, you can't hire anyone from the company. Now, what does that do? It suppresses wages. So someone making a good living has one fewer employer to come after them and offer them a job. So it suppresses wages. Two, it suppresses innovation because some of the most talented people in tech, Jan Kuhn, Kevin Systrom, now cannot start a company because they sign these

non-competes. So when a company acquires a company, the best thing that happens is that it becomes very successful. The second best thing that happens is it isn't successful. They close it down and they cauterize that branch and they take a competitor off the marketplace. So all of a sudden what you have is the most productive, innovative companies and people in the world are cauterized. And in every industry, this isn't true of big tech only. It's true across every industry. The top two players used to control 20% to 30% of market share. Now they control 50% to 60%. It also can be very ugly. They gave all that money to an executive at Google who had sexual harassment issues

because they didn't want him to compete. It can be used lots of ways. In any case, is he Jon Snow? Is he going to go, and then come back and save the day? Although, frankly, all the women saved the day. That is such an important question. I want to give that some time. All right.

All right. Next week, we'll be back to answer whether Kevin Systrom is Jon Snow in the continuing nightmare that is my life talking about Game of Thrones. I appreciate it. Come on. I gave up at the castration. Whatever, you like Avengers. Jesus Christ. You know what? You know what? I'm not even going to say it.

Quick survey, and we'll report back. How many people are Avengers? How many people are Avengers? Avengers? That's like eight people. Okay, how many people are Game of Thrones? Oh, that's right. That's like eight people. OK, how many people are Game of Thrones? Oh, that's right. That's how we roll. Dragons for everyone. You get a dragon. You get a dragon. You get a dragon. All right. As usual, a small insight into my life. Anyway, Camila Salazar produced our show today. Nishad Kerwa is Pivot's executive producer.

Thanks also to Eric Johnson, who's just the best. He's fantastic. Thanks for listening to Pivot from Vox Media. We'll be back next week for another breakdown of all things tech and business. Make sure you subscribe to the show on Apple Podcasts if you like this week's episode. Leave us our view. Ladies and gentlemen, Scott Galloway.

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