Pivot - Tech Stock Slump, Staff Morale Down at the FTC, and Guest Tripp Mickle

Episode Date: May 3, 2022

Kara and Scott discuss Amazon missing its earnings target, employee morale at the FTC, and Warren Buffet’s latest comments on the stock market. Plus, the Correspondents Dinner is back and workers behind union drives at Amazon and Starbucks may get a White House visit. Then, we’re joined by Friend of Pivot, Tripp Mickle to discuss his book, “After Steve” about Apple post Steve Jobs. You can find Tripp on Twitter at @trippmickle and can order “After Steve” here. Send us your Listener Mail questions by calling us at 855-51-PIVOT, or via Yappa, at 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, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher. And I'm Scott Galloway. So today we'll talk about Amazon's rough quarters,

see what's coming for the market. That's a big deal. Also, the FTC could use some TLC. And we'll speak with journalist Tripp Mikkel about his new book, After Steve, which charts the difficulties at Apple after its founder's passing. I had an interesting short meeting with Lorraine Powell.

Jobs, we're going to do something really cool, hopefully, at Code. So I was thinking about Apple quite a lot this week. Give us the dish on the weekend. You were fabulous this weekend. Yeah, I did. I had a great time. I, of course, didn't dress up at all as everybody else did. I did not go to the White House Correspondents Center because I did think it was a COVID soup of a situation. I hate it in normal times. And so, I did not want to go in these times because it's this sort of, it's the Washington Hilton ballroom and it's, I just don't like it. I've never liked it. But you went to all the parties. The bottom line is you'll take risks, but just, you won't

risk the Hilton, but you'll go hang out with Trevor Noah at a bar. No, I won't. That was indoors. It was like totally, utterly indoors. And it's like, feels like you're inside of a petri dish. It just does in general times. A lot of this stuff was outdoors, which is great, by the waterfront in Georgetown. There's one at the French Residence that was fun. There was one, where was the other one?

I don't know. I went to a lot of parties and they were nice. And I set myself out on the patios and just had people greet me and stuff. And I got to tell you, Scott, I set myself out on the patio and had people greet me. That is correct. That is correct. That is what I did.

You received people. I received people. That's how you do it. You know, I learned that from one of the big agents. I can't remember which one it was. He said he sits in a place and he waits for people to come to him. He doesn't mingle. You know, there's a term for that, virgin.

Yeah, okay. In any case, it worked. Just a memo to all young men. Don't do that. Go up to people and start talking to them. We have so many fans. I can't even tell you. It was crazy. It was really kind of crazy. Go on. It was like people love us. Who's the most famous interesting person that came up and asked about me. Me. Well, not you. Us. A pivot. Diane Lane likes our show. All these people came up.

Diane Lane? Yeah, I know, right? From A Little Romance? Simone Sanders, who used to work for Comleras, she was bowing and everything. It was really quite this crawl. Oh, I met Jen Psaki. That was interesting. She's very impressive.

Is she on MSNBC right now? Is that right? She is going, yes. And then I ran into Kevin Systrom was there, founder of Instagram. Susan Wojcicki was there. There were a lot of internet-type people there, which was nice. Senator Klobuchar was at some of the things, some of the parties. Senator Kay.

Yeah, everyone was loving on Pivot, I have to tell you. Good for us. Pivot, Pivot, Pivot. We are famous in a very weird way, especially among TV personalities. Hung out with Don Lemon a little bit, who looks good. D. Lemon. He looked great. We gated up, him and his husband and I and Amanda. We gated up, so it was good.

It was very good. Yeah, let's just hope we're famous and not infamous. That's my fear. Well, yeah, that's okay. I think it's okay these days. It doesn't really matter. I met Tony Blinken, Secretary of State. That was nice.

He's an impressive man. He is an impressive man. He's a very handsome man also. And he's got very good hair. He's got very good hair. It just was, I can't even remember now at this point. Oh, and then Tammy Hadid, you know, had this White House Correspondents Center brunch. Tammy didn't invite me.

That was. Tammy pretends to like me and. Tammy didn't invite me. That was— Tammy pretends to like me and then she didn't invite me? You could have come. You could have come. This is the famous one that she's had every year, and it was great. It was all outdoors, too. It was at Mrs. Graham's old house, which was—you could be indoors, but there's this beautiful outdoor area. They had a tent in, open tent and everything.

And it was—I had been there a million times when Mrs. Graham was living, when I worked at the Washington Post in my 20s. They actually have different events there. And it's, it was great. It's this old house nobody lives in, and it's owned by this guy named Mark Ein, who owns the Washington City Paper. And it was cool. It was cool. It was very, it was nice for chit-chatting with everybody. It was nice to chit-chat. Do you want to know what I did? No. What did you do? No, you do. Yeah, you do. You want to know what I did? No. What did you do? Yeah, you do.

Yeah, you do. You want to know what I did. Yes, what did you do? So I hung out with my, it was just me and my youngest, my 11-year-old boy. So it was literally, we did nonstop. We watched soccer. We took walks with the dogs, and we ordered pizza and wings three times from Anthony's Coal Fired Pizza. Oh, that's nice.

That's so nice. It was really nice. That's not what we did. We were fancy. Amanda and I were fancy this weekend. That's nice.. It was really nice. That's not what we did. We were fancy. Amanda and I were fancy this weekend. That's nice. And we had babysitters. We had babysitters.

I haven't watched any of it. Was there a highlight? How was Trevor Noah? What is your take on it? It was a bad look for much of a—there wasn't a lot of Republicans there, I'll tell you that. There were very few. Really? Why would they go?

Biden apparently went to the big one. I saw him on the dais there. I know there are questions about whether we should gather here tonight because of COVID. Well, we're here to show the country that we're getting through this pandemic. Plus, everyone had to prove they were fully vaccinated and boosted. So if you're at home watching this and you're wondering how to do that, just contact your favorite Fox News reporter. They're all here, vaccinated and boosted. All of them. They were. There were a lot. I saw Brett Baer, a whole bunch of them. I don't think Sean Hannity was there. In any case, speaking of the

White House, workers behind union drives at Amazon and Starbucks may be visiting the White House. That, of course, was President Joe Biden. He was very lively at the thing, and this is a big move by him. And it does, in weird ways, relate to Elon. The reason he doesn't mention Elon is because it's not a unionized shop. And I think that's wrong, because Elon is clearly the pioneer in electric cars and autonomous. I think it's really petty on their house, as I've said. But in any case, they're bringing in, it's unconfirmed, but if it comes to pass, this will be a reversal from previous statements. The Biden administration would not pick sides in the union efforts. Of course they are. So they may be at the White

House. What do you think about that? Well, it's interesting. After our guest last week, there was an interesting article in the New York Times saying that a lot of the union or the rejuvenation or new life that's been breathed into the union movement is a function of college grads who are making the money that they initially anticipated. That there's sort of, it's not the working poor, but it's college grads who've ended up in jobs that they didn't expect to be in. That they end up, that there's just more college grads that are baristas than ever. Sure. And that this has kind of brought new life and organizational skills and into the union movement.

I'm still curious to see the numbers, if you will, but the numbers, it's getting a lot of attention. So our guests last week, you know, I'm looking at the data because I'm realizing, as is often the case, I may be wrong here. I think this is a giant head fake, but I'm open to the notion that there is something structural taking place here. Yeah, we'll see. That was an interesting story. There is a lot of – listen, if you work at a media organization, whether it's the New York Times or Vox, you feel the strength of the union coming on.

of the union coming on. I've talked to lots of managers of lots of media organizations, and they are definitely, I think it's been a difficult road in general to understand what's happening. So I don't know. We'll see where it goes. And it's led by what this Times article talked about.

And so we'll see where it goes. I think you could really breathe life into, as you said, into the union movement. Isn't Vox union now? Yes, it is. Yes, it is. Yeah. But some of it, not all of it yet, I think, or I forget. Anyway, we are not in the union, but I have been in unions before I have you. In any case, it's an interesting time. We'll keep watching that with the White House, and especially if they focus in on Amazon and Starbucks workers, which I think are seeing the most activity. Obviously, Apple store workers, too, and some others.

But Amazon is where the action is, really, and Starbucks. Well, I heard that Bezos got divorced solely because he realized his marriage was a union. Get it? A union? Come on! That's good labor humor. That is bad labor humor. That's good labor humor.

Bad labor humor. Also, Warren Buffett had That's good labor humor. Bad labor humor. Also, Warren Buffett had some harsh words for investors looking to make a quick buck. The Oracle of Omaha, he just had his meeting, said the stock market has become, quote, almost totally a casino. Meanwhile, Charlie Munger lashed out at Robinhood, which he said encouraged gambling mentality. He also had some words for Bitcoin, which then Elon Musk attacked him for being old. I don't know why he's doing that. What a surprise. But that's not to say Buffett and company

hate gaming per se. He revealed that he had a 9.5% in Activision, which was interesting, which means he's done rather well. He said the buys are his bet that Microsoft deal will close. I guess he just did it. Interesting.

I like when Warren Buffett, I like when people get mad at him. I like his whole grumpy man thing, older man thing. So what do you think about this? I think Warren Buffett is an American hero. I mean, let me be clear. He's pulled off a little bit of a Houdini, and that is, it's kind of a hedge. It's an insurance company posing as an investment firm. The majority of their profits come from reinsurance. Insurance is the business that keeps on giving. I've said several times, if you meet somebody who makes a half a million dollars a year and is kind of likable but not very smart, chances are they're in insurance.

It's just an unbelievable business that plays off of fear, has all sorts of regulatory capture, and Berkshire Hathaway is essentially an insurance company. Warren Buffett, though, he's nice. He doesn't consume a lot. He has very interesting perspective. Oh, you haven't had dinner with him. Yes, he does. But go ahead. Well, you know what I mean. He doesn't have a—he's not on a boat. He ate his meal, a giant plate of French fries and potatoes, and half of my meal. But go ahead. Fine. I can't believe he hasn't, it just hasn't exploded, but go ahead. Go ahead. What I mean is he lives, I think he lives in the same house. He's been married for 50. He just strikes me as a nice representative of America versus some of the

other folks that are getting a lot of attention. And I think he's, my sense is he's a good man. And I think he's a good role model. And I like his approach to investing. He likes to say, we only buy stuff that we want to be in for a long time. He admits his mistakes. Yeah. I just like his approach. He answers the phone. It's very strange to call there. I'd call the beginning, sort of early in the internet phase, because he was very anti-internet, which I thought was a wrong call by him, because he said he didn't understand it. And I get that if he didn't

understand it. He missed quite a lot of upside by not being as big an internet investor obviously but he's an activision here um so i was i called him to ask get a quote when i was at the journal at the time i was like this guy should be in the internet space like he sort of didn't he thought it was also a casino much of it and much of it some of it was um and i i called said, I thought I was going to get a PR person, right? So, I called in. I got his secretary directly, and then he comes on the phone. He's like, hi, Kara. And I'm like, hi, Warren Buffett. It was so strange. And that's happened several times. How old is he now? I think the guy's an inspiration. I don't know. This was many, many years ago, but I had dinner with him relatively recently,

just before COVID. But you could summarize this year's, you know, they call it Woodstock Conversations. You could summarize it with one statement. Told you so. They're literally, oh, my gosh, are those guys feeling their oats, like going after. Yeah. Also, I think I don't like it when these – I think he deserves more deference than a lot of these new hedge fund managers and these libertarian weirdo takers. It's his record.

It's his record. It's his record. He doesn't like cryptocurrency. I think he's wrong about that one too. The crypto and Tesla Taliban come for anybody. I mean, I'm not comparing myself to Warren Buffett, but when I talk about Ethereum being an interesting one and I could see a bull case for Ethereum because of NFTs, people are like, you know, he's not that bad.

But if I don't say Bitcoin, I don't understand how it's going to be worth 100. Everyone's like, oh, he doesn't get it. They're just so binary in their assessment of everything. And also, but at the same time, I don't think it makes any sense for Charlie Munger to call Bitcoin evil. It's not evil. I mean, it really- Yeah, I think they should consider it. Both of them should consider it at least. You know what I mean? And not, it's— Yeah, I think they should consider it. Both of them should consider it at least. You know what I mean? And not—it's not similar to what they did around the Internet, but, like, you can—I'd like to hear what they think actually looking at it. That's what—instead of doing sort of a broad brush, I would have liked to hear their thoughts on it and their worries.

Well, here's the problem. When you're a little bit older and you don't understand something, you have a tendency to want to dismiss it because it threatens your way of thinking, right? It's a bit of a knee-jerk reaction. Where I do think they get it right is basically the way they go after Robin Hood. They look at this thing and they go, okay, this is just bad for the world, bad for the planet, a terrible investment. I think they got it right there. But this was their kind of like, I told you so meeting. The last few years, everyone's like, oh, Cathie Wood at ARC, she's the new Warren Buffett. And all these people saying, I'm the new Warren Buffett. And no, no, Warren Buffett is still Warren Buffett. And- Yep, I would agree. It's a marathon, not a sprint.

Yeah, so good for him. I think he's an inspiration. Yeah, yeah. It was interesting. I still think you should reconsider cryptocurrency. Anyway, let's go to our first big story. let's go to our first big story. The 2022 Reaper has come for Amazon. The commerce giant issued a disappointing earnings report last week. Some lowlights. Amazon missed its earnings target. It reported a loss of nearly $4 billion for the quarter and had its slowest year-over-year growth in two decades, which is probably not a surprise coming out of the pandemic. The market took notice on Friday. Amazon shares fell by 14%, wiping out over $200 billion of its market cap. It did a Facebook face plant, essentially. That's the stock's biggest one-day decline in 15 years. And Amazon's

not alone. In April was NASDAQ's worst month since 2008. And there could be more bad news for the stock market, which many people have been predicting a correction of a significant amount. The Fed is expected to raise rates because of inflation on Wednesday. It's going to be doing a lot of raising of rates. What do you think, Scott? What do you think? Give us some little Scottness. I'm just going to give a couple more facts. The NASDAQ composite, more than 45% of stocks are down 50%. More than 22% of stocks are down 75%. And more than 5 percent of stocks are down 90 percent. This is from Scott Galloway. So, give us your pontificate, please, if you don't mind. Well, we have an entire generation of entrepreneurs and investors that have never

seen a recession and see it as something that is worse against a crime against humanity. And the reason why every fiat currency has ultimately failed is the central bank and governments can't resist the temptation to be loved and pump trillions of dollars of stimulus into the market to prop up the market, which just creates more underbrush that once you have a reckoning, you have a super fire.

And if you look at Amazon, okay, I think it's 30 or maybe 35% off its 52-week high. And it's down more than Apple, but basically everything's getting taken to the woodshed here. Why? Because- It is. It is. I'm just going to look at Tesla today, but keep going. Yep. Well, you've never had, this is what we have. It was stupid to call inflation transitory. Now, it's of our own making. There's no free lunch. We took an obese patient, America, and we shoved 40,000 gallons of dryers down its throat in an overdone stimulus. Europe has the same

supply chain problems, but they aren't registering the inflation because they weren't as ridiculous with this stimulus. So what do we have? We're now starting to pay some of the hangover. And the only way you get your arms around inflation, unless there's some new invention in economic history, is by raising interest rates. And typically, every time we've raised interest rates at what most people are predicting the rate we're going to have to raise them is that you go into recession, which brings up a whole host of other things. So what you have in the NASDAQ is we're having what I would call a healthy drawdown, especially among the growthier stuff, but no one's being

spared here. And the fact that Amazon's down 20 or 30 percent, everyone's looking for reason. Granted, it did decline. A lot of the pandemic bump is being taken out of stuff. The core competence of any CEO right now is storytelling. And I don't think Andy inspires people. I think if Jeff Bezos had done that earnings call, he would have pivoted to something else. And his ability to say, yeah, we've taken a loss and positioned it as a positive because of our mass investments here. The other thing is if this stock goes below $2,000 a share, it'll be, I think, at about a trillion dollars. I think you'll see a spin of AWS. I think AWS is now worth more than the entire company. Which Andy has resisted, as you remember in an interview with me. Nothing like a 40%

decline in your stock price to get you to reconsider your strategy. Yeah, interesting. And if you look at, I believe you're going to see a lot of people sharpen their pencils and go, you know what? AWS on its own is worth a trillion dollars. So when a company is trapped in a conglomerate structure, the market doesn't like pure plays. I don't need Amazon to diversify for me. They're going to say- Really impactful on their actual business. No, it doesn't make their actual business look a lot better.

It really helps it. Well, the disposition of assets is accretive when it trades at the multiple of a business that's in decline. AWS is still pumping on all 12,000 cylinders. It is indeed. One, I think my sense of Andy is he's an amazing operator. Unfortunately, we're in an era where it's all about storytelling.

You know, he ran AWS. For those who don't know that, he was the one who thought it up and ran it and created it. I think he's a Tim Cook, Satya Nadella-like operator. I'm not worried about him. There's a difference though. Steve Jobs can't come back. Jeff Bezos can.

I think Jeff Bezos is going to pull a Howard Schultz, and I think he's going to come back in a year to two years. Do you think? I mean, literally, being the CEO of Starbucks is like being second lieutenant

of Vietnam. You're just not going to actually last very long. And when you see this stock for the first time, I mean, that actually is not that. From 1999 to 2001, people forget what this is like. This is like, we have never registered these types of declines except for 99 in 2007. And it's playing out again. And people are whistling past

the graveyard or they're focused on this other weapon of mass distraction called all this Twitter bullshit. But what's going on here is really striking. Just the big tech companies have lost the GDP of Mexico. They have. They have indeed. They have indeed. Although I'm just noticing Tesla's down just a little bit today. I thought it would go down more, but it has not. But here we are. I'm not making a prediction about Tesla. I'll just say this. And I'm not making a prediction about Tesla. I'll just say this.

Everyone, everyone is going to get their turn at the woodshed here. Market dynamics, market dynamics always trump individual performance. All right. And this market, there has never been an economy that has been able to raise interest rates at the rates I think we're going to have to raise them to get our arms around inflation that has not gone into recession. And to recalibrate supply and demand, in other words, is what you're saying. There's so much demand and little supply, et cetera, et cetera. You have no choice. We'll see. The only way we cool inflation—

I am returning the oligarch's yacht I bought you as a present. That's right. Finally investing in our relationship. And now you made me worried. The SS Cialis. I'm on a boat. Oddly, it came with a torture chamber below, but I thought you could use that and enjoy it. I'm not into pain.

No, that's not me. That's not my thing. All right. You know my safe word, right? No. Maybe. Maybe. That's good.

That's good. Okay, Scott, let's go on a quick break. When we come back, low morale at the FTC. We'll speak with a friend of Pivot, Trip Mickel. 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 crouched over their computer

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Scott, we're back. The FTC could use a morale boost. A survey found that employees' opinion of senior leaders dropped between 2020 and 2021, the year Lena Kahn took over as chair, and fewer than half of the FTC staffers who responded said they had a high level of respect for senior leaders in response to Kahn's agency-wide email committing to facilitating positive change. A new leader, she was supposed to be an ambitious regulator, has not been able to do what she has said she wants to do, lots of reasons. So, what do you think? What do you think? Or is she just forcing them to do their jobs? So, she's pursuing cases, but they haven't had this sort of big, you know, high-five win anywhere.

Yeah. So, I forwarded this story to you because I'm one of the people that was really excited about Lena Kahn's appointment. It's just a great story. And I think she's an incredible legal mind. I believe that she's in way over her head. And it just seems so obvious. I know a lot of academics. And I take the most impressive academic you've met. She's an associate professor at the age of 31, kind of a few years out of law school, I think, is put in charge of a bureaucratic organization with, what, 1,200 employees? It'd be like, I'm trying to think of an associate professor I've ever worked with. I've worked at NYU for 22 years. We have a very talented faculty. It'd be like all of a sudden dropping one of them into a 1,200-person company with a 300 – and I think – I don't know a single person that could do that. And we like to look at someone's attributes and someone's intellect.

And she's a high character, incredibly impressive person. She has little to no management experience. Right. And – I think it has to do with them not having any wins or movement. The movement is slow. Well, but whose fault is that? And whether it's her.

Well, it could be hers. It could be these. They were pushed back on the Facebook deal by a judge, and they had to redo their homework. She may be like, you did bad work before, which they did. And it may be that they don't have any. If they had a win, I think they'd be very happy. It's just that there's not. These cases are going forward, but it's slow going.

The court cases are problematic for them. The judges are problematic. But one of the things that FTC employees complain about is lack of information they get from above. It could be due to remote work. It could be pandemic-related, like coming out of the pandemic. I don't know. the pandemic. I don't know. There's so much demand for antitrust lawyers on the other side, maybe, that they are leaving. But the rates are the same of people leaving. This is dramatic. I mean, when people, when they quote unquote say senior leaders, it's really,

it's a proxy on her. And one of the most underrated attributes that people don't appreciate, One of the most underrated attributes that people don't appreciate, it's a singular distinct competence, is management. Your ability to manage an organization. And people incorrectly assume this is a good person who's super smart, which means they're a good manager. No, it doesn't. No, it doesn't. Management is like, it's like saying this is a high character, good person. They must be a great designer.

No, they're not. It's the same with management. This is a high character, good person. They must be a great designer. No, they're not. It's the same with management. There are – this is a unique skill set. And by the way, she has absolutely no experience in a management role. And you plump her into an agency. What would you do if you were there? If you were there? Lots of people come into agencies with very little – you know, Pete Buttigieg is running the Department of Transportation. I'm sorry.

He was at one of these parties, by the way. Mayor Pete? Yeah, he was giving an award to some veterans at Tammy's party. You know, he's in charge of, like, the infrastructure money. As I was sitting there and someone was making a joke about South Bend, I was like, oh, my God. Is this guy qualified to give away all that money? I think about that all the time. There's two types of managers, what I found, that are effective.

I've never run big companies, but I've run mid-sized companies, and I've coached and been on the board of CEOs with big companies. And there's two types of effective leaders or managers. The first is what I call the inspiring leader. They can stand up in front of a group of people, distill down to very basic understandable things, the North Star. This is what we're here to do. This is why you are here to do it. And this is why this is the right place and the right time for you to be here right now. And gives people a sense of connective tissue and that they're working for something bigger and says to them, when you show up here, you're appreciated, and this was a smart decision to be here, and they can paint a really exciting future. That's the inspiring

leader. Then there is what I call the player coach leader. And that person is so good at what they do and takes such an invested interest in other people's success. And my partner in my business, Catherine Dillon, is a player coach. And that is, she takes her chair. If someone is editing a document, she takes her chair, she goes and she sits next to this person and she says,

this was good. I'm going to show you how to edit a document. I'm going to show you how to edit a video. This is where you got it wrong here. And she's kind, but very direct.

And she teaches people how to be much better players. I'm, quote, unquote, what you would refer to as the inspiring leader. I like getting up in front of a group of my employees and painting the vision. The inspiring leader is effective over the short term but not usually the long term unless their job is to pull forward the future by raising cheap capital. It's the player coach. You even reference this with guys like Satya or guys like Tim Cook. I, quite frankly, I don't mean to be harsh.

I think she's neither. I don't think she's able to get up in front of FTC and get them excited and paint a vision. And I don't know if she's a good player coach. She's a world-class. Tim Wu is in the right seat. He's an inspiring, huge brain. And yet, think about all these people that the Trump people put in who are wholly incompetent. Okay, you're making my point.

That's decimated. You're making my point. I think the federal government feels overwhelmed, and especially the FTC. When I interview her, I felt, remember I said, she seems exhausted already. She seemed overwhelmed. I don't doubt it. I wouldn't say over her head because she's intellectually rigorous. It was, she seemed like she got in there and it's like, we can't do anything.

Like they're inert. And I think if you work at a place like that where you're not going to, they haven't gotten the funding because it got sucked up into one of the bills. It didn't pass. You're not getting any kind of wins. You're not getting any, if they had a win, they'd feel better instantly. But Cara, these are the same problems the FTC has faced for the last three decades. Yes. You've never seen this sort of decline in morale.

Well, I don't know. I think people are feeling bad about working for the federal government. And also, let me just say, again, let me compare her to Pete Buttigieg, which is a much bigger job. I'm sorry. If you're going to talk about qualified, then neither of them is qualified, really, in that regard. And by the way, I think they're both perfectly competent. So I'm not sure. There's sort of been a sort of government – That's a good question.

What is that? It would be interesting to see similar surveys at the Department of Transportation. I don't know. I don't know if they do those. But she needs to step in. She can be inspiring. I still think part of it has to do with who is this young woman of color who just came in here and is telling us what to do. Do you think there's a bias towards her by the rapid file?

I have seen it myself in places I've worked. I've watched it. And it's really, it depends on who's saying it. You know, if you Cyrano de Bergerac that and she looked like a certain way, I don't know. And I don't blame that for everything. But in this case, believe me, I don't. There's bad managers of all kinds. Yep. Anyway, she's got to get it around because they've got some real challenges. And they need to get some wins on the board, period. They need to.

That's exactly. Can you name anything the FTC has done? They have cleaned up some previous stuff. That's what they've done. Cleaning up is not enough. And getting it moving forward. But a win, no, no. All right. So now let's bring in our friend of Pivot. Trip Mikkel is a technology reporter at the New York Times and author of After Steve, a new book that charts the tensions between Tim Cook and Johnny Ive in the years before Ive's departure from Apple in 2019.

Welcome, Trip Mikkel. Hi, thanks so much for having me. No problem. So I've been thinking a lot about Apple this weekend. I've been thinking a lot about my code conference, for example. And I've been thinking about how to think about Steve after it's my 20th year of doing this. And he was the very first speaker at our first code. So I want you to just give us an idea of what you're, this is after Steve, the time after, which has been a long, long time, by the way. He died a very long time ago in real

terms and in terms of Apple, a very long time ago. So can you talk a little bit about sort of your premise of the book? It's designed to focus both on what Tim Cook has accomplished. You know, he's turned Apple into this multi-trillion dollar company. And then also, at the same time, the company has lost Johnny Ive, who was considered a creative soulmate of Steve Jobs. So the literal soul, in a way, of the company. And then more than that, in Johnny's departure, his growing disillusionment was really rooted in this idea that Apple was once a place where art led to commerce. And increasingly in the Tim Cook era, it became a place where commerce dictated art. And some of that's a consequence of just the size and scale of the company and the expectations

and demands of Wall Street. So you felt that, I would point to what you just said, Apple's never been bigger, never been more powerful, never you could create a company out of, you know, the software and services. It's been nothing short of a miracle what they've done there. Never good at that. AirPods, all kinds of things. So this romantic idea of Apple, which I've covered since a very long time, I'm very old, I always found a little twee, honestly. So talk a little, I did, I was like, oh, stop, you just make stuff. So why is that? Why was Johnny so important in that regard? What is missing given the results are pretty damn good? The results are tremendous, right? But the results are largely rooted in the past. You know, the twee era, if you will, is really the foundation of the success of today.

I mean, it's taking the iPhone and saying, well, what can we bolt onto this and create more sales opportunities out of? Now, whether that's services or whether that's the watch or whether that's the AirPods, they're all laid on this foundational device that was revolutionary and introduced in 2007. But, I mean, to just poke back at the twee idea, I mean, for people who work there and for you when you were covering it,

there did feel like something magical was happening. You know, if you go back and you look at the run of iMac, iPod, iPhone, iPad, I mean, it's really, you know, this wasn't just a single revolutionary device. This was a series of just cultural shaping devices that were introduced by Apple in that period. So you think they aren't as creative? You left out Ping. I don't know why. Their social network that lasted 14 minutes. But you think that that has been missing here

despite the financial success of everything else? You could say that the Model T is the foundation of the car industry and people have managed to figure out new and better ways to do it. But you think that it's missing this and that's deadly for it or just the way it is? If you talk to, Carrie,

if you talk to people who work at the company, they feel this more than people maybe externally feel it. And if you talk to some of the people who have worked on designing some of these products that have been so influential in all of our lives, if you ask them, okay, well, what's Steve Jobs' legacy? They'll say it was making amazing products that really changed the world. And if you ask them, well, what's been the legacy of the past decade?

They'll say making a fuck ton of money. You know, I think we can say that on this podcast. Yes, you may. Say fuck ton as much as you want. It's just, it's a different viewpoint on what they achieved. And they appreciate that that's a consequence of how big they were at the time that that transition happened between Steve Jobs and Tim Cook. And nice to meet you, Tripp. I really enjoyed reading some of this.

So it's harder to go from zero to 300 billion where Apple was when Steve Jobs passed away. It's harder to go from zero to $300 billion where Apple was when Steve Jobs passed away. But there hasn't been an individual who's created more shareholder value alive than Tim Cook or overseen it. He's gone from $300 billion to $2.7 trillion. So if you use that as a metric, he's the most successful operator in history. What struck me reading some of your thoughts was that doesn't this kind of indicate or isn't this a proxy for a larger shift in our economy? And that is Apple's gone from being sort of a brand or creatively driven organization to a supply chain and operationally driven company. And quite frankly, that's where the juice is. That's the story of Amazon.

And that this old era that we're nostalgic for of brand and creative, the sun has just passed midday on that. And Tim Cook really is. He's the CEO who's added more value than any CEO in history. Doesn't this represent a shift from creatively driven companies to operationally driven companies? And what's the negative in that, I think, also? What is the negative part of when that happened? Do you believe this shit, Tripp? She edits my questions. She edits my questions. What's the negative in that, I think, also? What is the negative part of when that happens? Do you believe this shit, Tripp? She edits my questions.

She edits my questions. What's the negative in that? I mean, there's no negative in that. I mean, but if you're working at the company, that experience is difficult to undergo. I mean, for those of us who are getting their products, we're, you know, there's a little less of a wow factor year to year, right? There's almost an understanding that, you know, there's a little less of a wow factor year to year, right?

There's almost an understanding that, you know, the new iPhone will come out and it will have, you know, another camera or more sophistication in the camera than the previous one. And so that's a facet of it. But Scott, I mean, the book, as you know, having read it, doesn't seek to diminish what Tim Cook has accomplished. Yeah, 100%. I think you highlighted it. It seeks to accentuate it.

Yeah. Yeah. I mean, his ability to anticipate, okay, we're going to introduce the watch. That's going to unlock some new sales for us. But we have to have that next step after that and to anticipate that they needed that and to introduce services on the back end of the watch. I mean, that is a testament to what he was able to do as an operator and somebody, I mean, there's an art to that too, right? There's an art to being sensible enough to say, okay, well, we need to continue to grow. What do we have? And pulling that lever at the right moment. You know this company as well as anyone. What are your thoughts

around the prospect of a car, of an Apple car? Do you think they're headed there? And do you think it's a good idea? I think they're headed there. I think the book highlights some of the challenges with why they're having a hard time getting there. One of the things, Kara, to get back to what Steve was able to accomplish, and the book really goes into great depth on this, and Johnny kind of carried this on with the watch, is inside Apple, someone needs to take on and drive a product forward. Steve did that for years. Johnny did that with the watch. The AirPods were born on the back end of the watch. I know Scott's a huge fan of the AirPods. Me too. Yeah, I think we all are. We all depend on those. But there hasn't been somebody as Johnny became wayward to kind of step in and lead that stuff forward. And not to mention, as Johnny was adrift, as the book

documents, you know, when he went to this kind of part-time arrangement, there was tension between his vision for what the car could be and some of the engineers' vision. And so, that's why the car never, it was never delivered in 2019 as they set an internal goal to do. But I do, you know, they're continuing to work on it. And one of the most interesting things that I came across as I worked on the book and as the book highlights is what they did to change the construction industry with Apple Park. Now, this seems like weird. Why are we going from cars to construction? But they wanted to do this amazing curved glass in the building. Nobody made glass like that in the world. But between their deep pockets, their engineering sophistication, and their design

demands, they were able to bring on a German company and get them to manufacture this glass at scale. And it's opened up new opportunities for architects everywhere. So if they can do that in the world of construction and architecture, you can only sit back and say, well, wow, if they brought that to bear in the world of auto manufacturing, we could really be seeing something incredible on the roads in the years ahead. Yeah. We'll talk about the glasses then, because I think they're closer to that, the idea of the AR. Because I've seen Tim in the interim, but one time, many, many years ago, all he could talk about was AR and Auburn football, which I was interested in the first, not so much the second. Can you talk a little bit about the glasses? Because that seems to still be illuminating a

lot of people there I talk to, this idea of AR glasses, not VR glasses, but AR glasses and where that is. According to the public reporting on that, they're certainly closer on AR glasses than they are on a car. I mean, they've had less difficulty in developing that. But again, that has taken time. And if you look back at the watch and the way the watch was introduced, and I cover a lot of this in the book, they introduced it early. And it took some persistence to get acceptance for that watch because it didn't have some of the functionality that people would expect. Like time, you know, telling the time constantly every time you looked at it, you know, you had to turn your wrist towards yourself in order for the time to show. And with the AR glasses, there's an open question as to whether or not that's going to be another product that when they introduce it, it's going to take persistence to get acceptance. The last specs I think I saw, Kara, were kind of a unit that looked akin to ski goggles.

And it's just hard to picture a lot of people adopting that. And I think Oculus has had trouble with that up to this point as well. Well, where do you think, if you had to bet, these companies are running up against a lot of big numbers, and that is they can't go after niche markets. I think if you look at Apple's stock and business, in order to maintain the kind of stock trajectory they've been on, they literally have to add like a quarter of a trillion dollars to their top line, which limits them. As far as I can tell, it means that they either go into healthcare or the automobile market. I just don't see where else they can go. It feels like every person who makes a certain amount of money has iOS, so they can continue to add to that. And then they recast it as a recurring revenue firm. That'll take their stock price up. But

they've got to find an enormous carcass, new carcass to feed off of. If you had to bet on what they're going to try, where they're going to try and find that quarter of a trillion dollars, what would your bet be? I would wager it's got to be auto, right? I mean, if you go back and you look at it, it's very perceptive that you highlight this, Scott, because if you go back and you look at what they were wrestling with shortly after Steve Jobs' death, they recognized that they were getting to the point where the law of large numbers were going to create headaches for them. So they were, Tim Cook literally said, like, we need $10 billion businesses. And if it's not going to be a $10 billion business, we can't pursue it. And internally, that created some of the frustration because some of the product leaps that they could have made in the years prior, in the decade prior, were foreclosed. They just weren't going to be big enough to make a dent for them. HomePod, for example, right? Is a speaker going to deliver enough sales for a company that large to satisfy investors in Wall Street? No. You're right, Scott, healthcare,

but that's still rooted in the watch. And it's been a slow and steady growth. It is a, I mean, if you look at the wearables business, which includes the watch and AirPods, it is a $38 billion business. It's become quite sizable and it's immune from any trust criticism at this point. So they can still squeeze and build that. It's just a question of, will they ever turn medical records into something that's profitable for them. They haven't quite shown that they're on that path yet.

Obviously, there's no right way of leaving a company. He was such a legend there, no matter what. And he's, you know, as a person, he's so interesting compared to most of the executives there. And Tim goes out of his way to be dullish, right? Trying to be sort of quiet and kind of brainy. Is there someone there that fulfills that role? That's the open question. That's what I'm eager to see unfold in the decade ahead. If you look back at Apple, the real alchemy of it has been kind of this series of pairs.

Art and commerce. Yeah. Well, they said the series of pairs, right? You had Jobs and Laws, then you had this decade that was really Jobs and Johnny Ive. And then though Tim and Johnny Ive are less close, like they were key to this most recent decade. And I think the key to Tim's success going forward is finding who he's going to team up with in the future. Anybody? Is there somebody you... The early evidence suggests that Johnny Shruji may be that person. He's clearly brought forward a lot of innovation in the chip sector that's unlocked a lot of value

for the company in its Mac business. But nobody like a Johnny Ive character, correct? What Johnny brought to bear, you could argue also, is like a bit of a legacy, right? I mean, if you look at products in the world, they are already shaped by what Apple has done in terms of its minimalism. And so, is physical design going to be, industrial design going to be the way forward for in a world where we're increasingly interfacing and interacting

with computers through voice or augmented reality? It's going to probably be software-driven. And so who is that person? At this juncture, I couldn't tell you, Cara. I think that's the question about Apple at this point. I can't think. They'd have to buy someone like Snapchat or bring in Evan Spiegel, who's quite creative. Or they could have bought Instagram, Kevin Systrom. Those are kind of more creative types of people.

Scott? What do people not understand about Apple? What is the biggest surprise for you writing this book? I think the biggest surprise for me writing this book was just getting such a deep appreciation for how after Steve Jobs died, the creative heart of the company wound up having the people who were on the outside, the operators, kind of come into the middle. And just how confusing that was for everybody, both those on the outside who found themselves in the middle and were having to adjust to how do we build a product and how do we make watch happen? And for those in the middle, working with the operators in a new way. There was just this real period of adjustment

in the wake of Steve Jobs' death, and Apple managed to navigate that. I think that's why we've seen this value unlocked, but it was not an easy road. No, no. Everyone thought he was going to fail. I remember that time they thought they couldn't do anything without Steve Jobs. One time when those stories were going around when he was sick, the one thing he did say to me, he's like, I'm not Willy Wonka. because he was also somewhat of a narcissist. So it was an interesting thing that they have managed to go on. But is there a game-changing product for them coming up? Are any of these, the car, the glasses, do you imagine that there's something coming that's really,

if you had to pick between those two, which is where they're headed, would that be it for them? All signs and all reporting indicate that glasses are first and car is second. And that's largely because of the challenges with each one and the technology that they have to bring along to make each happen. Is Hollywood a new product? I don't know. I mean, I'm enjoying Slow Horses. They're doing okay.

Yeah, I think it's been fantastic. Oh, it's great. That's great. Agreed. I've always felt that great companies have three or four people that can be the next CEO. And you just don't hear a lot of names that, you know, the heir apparent. Are there any heir apparent to Tim Cook? Are there any air appearance to Tim Cook?

There's a tremendous amount of respect within the company for Jeff Williams, the COO, who's now running the design team and has been really involved in product ever since the watch. There's some other names that Tim has brought into the fold, like Deirdre O'Brien, who also came from the operations side. But do you hear these names often in the same way you say you heard like Jimmy Ivins or Angela Ahrens? No. Even Philip Schiller, remember him? Wait, is he still there? He's still there. Sure is. He's a fellow. They're all still there. It's so fascinating with this group of people. It's scary. You'd appreciate that. Somebody was telling me that they'll have to take some of these people out in a body bag. They just love the company that much. Well, they're also remarkable that they have been together for so long. I'll never forget, Walt was retiring and there was a little party with all of them.

And I was like, it was all like the old guys. And I'm like, and they're still running everything and they're still there. They were remarkably resilient for a management group, despite all the tensions and various fighting that goes on at any company. I have a last question, regulatory issues. Apple's trying very hard to pretend it's not a monopoly or say it's not. It's been declared not a monopoly by a judge. And their argument being that Android is bigger. And in the scheme of all phones, they aren't.

But they're certainly facing a lot of headwinds around the App Store and the marketplaces and the other things they compete in. How much of a risk is that for the company? They're playing a game of App Store Jenga right now. Every once in a while, Europe or the U.S. will kind of poke at a piece and put it on top. And it's just a question of when that whole game of Jenga kind of collapses and what that means for their business, because the App Store itself has been such a driving force for their explosive growth in the past decade.

Absolutely. Everybody should read it. It's called After Steve. It's by New York Times reporter Trip Mickel. How does Apple like it, Trip? You know, I don't... I'll give you the answer. They don't. They don't. Tim commented on it, on some of the thrust of the reporting that's at the back of this book and said

that it distorts relationships and narratives and facts and so on and so forth. So that tends to be their... They don't is my answer to you, and it's a good thing. Probably means it's accurate. That possibly, yeah. Anyway, it was very funny. I said no comment when I was hearing some of the complaints. Anyway, I just said, oh, good.

I can't wait to read it. I'm so excited. Anyway, it's a terrific book. Again, After Steve by Tripp Mikkel. Thank you so much for having me. It's great to see you guys. Thanks, Tripp. All right, Scott, one more quick break.

We'll be back for predictions. As a Fizz member, you can look forward to free data, big savings on plans, and having your unused data roll over to the following month. Every month. At Fizz, you always get more for your money. Terms and conditions for our different programs and policies apply. Details at fizz.ca. All right, Scott, it's time for predictions. I'd like you to make one. Please do. I think that, so as I was saying, everyone's

getting their kind of turn, you know, at the woodshed here. And that is, it just doesn't seem like anyone gets out of this alive. There's just very few companies that are going to go untouched from their pretty significant drawdown. And I just think everyone's in this consensual hallucination that we can continue to avoid recessions forever. But anyways, the company that, because of this weapon of mass distraction called the shit show at Twitter, we're not talking about a lot of stuff that's really important. But I think that's a business story that a lot of people are missing, is what Netflix did to the entire media ecosystem. They basically sucked a quarter of a trillion dollars out of traditional media, whether it was movie

theaters or the cable bundle. And now they've lost a quarter of a trillion dollars. But what no one's focused on is I think the company that is feeding off the Netflix carcass is a company that now commands more attention than Facebook and Instagram combined, but has a content budget of zero versus 17 billion at Netflix. And that is 100%. And the company that has increased more in value than any company in the world over the last 12 months in the face of everyone going down 30%, 40%, 80% is TikTok. And if you look at its metrics, if you look at it has the short-form DOPA, ADHD characteristics of this kind of new generation of people that need constant DOPA. of this kind of new generation of people that need constant dopa.

And at the same time, it's managed to avoid some of the shit show that is Facebook. It does have at least a perception of increased moderation. And it's basically the most, we got to stop thinking of it as a social media platform. It's basically streaming.

Entertainment. Without- I've always thought of it as entertainment. Without a content budget. It's Netflix. What would Netflix be worth if it didn't have to spend $17 billion a year on content? That's what TikTok is.

One of the things that's interesting, this new antitrust bill that got out of committee, of Amy Klobuchar's, the YouTubes of the world and others are all nervous because TikTok won't be under the $600 billion thing. And they might, that these companies might have to, there's gonna be a lot of pushback and they're using TikTok as the cudgel.

If we have to reveal things, why doesn't TikTok? So it'll be interesting. They're gonna be in the crosshairs of a lot of this fighting over these costs. The fact that they don't get marked every day because their stock is not public has been such a huge benefit for them because this is what would have happened.

People are coming for them though. Meta has been cut in half. Amazon's off 30%. Apple's held its own. Google is flat, maybe a little bit down. I bet if TikTok was a public stock, it'd be up substantially and everybody would be going.

Let me just say people are coming for them. That's my feeling. That's my prediction. And then just on an anecdotal level, I was vacationing with some friends a few weeks ago. And they, like me, have boys. And the dad said, look at this. And the kid said, can we be excused? And he said, watch my 11-year-old.

And he went over. And he takes, he says he does this every day after lunch. He takes his phone. He lies on his side. He pulls up TikTok. And it was so reminiscent. Remember all those images of the monks in opium dens where they just lie on their side and love life? It's true.

I can't watch TikTok because you get sucked into it. Oh, my God. It's so entertaining. I just watch this. As you know. And you know what? Don't do it. I don't get on.

I find if I go on TikTok, the algorithm, I can look up and it's an hour and a half later. And it's the closest thing to a modern day opium den. It's so fascinating, especially, I'm telling you, I watched an hour of Air Fryer the other day and I was like, stop, Kara. And I was happy. I was very happy, more so than being on Twitter. I was like, I'm getting off of Twitter. I'm going on to TikTok. I have a burner phone. It was weird. It was weird. I agree. But people are coming for them in any case.

I could watch for hours. What is yours? Chiropractors adjusting people. Who would have known? Oh, nice. Dogs, which I knew. And then very attractive people talking about systemic racism who forgot to put their bra on. I also find that just fascinating.

I find that really interesting. There is our entire relationship. I watch air fryer content and you watch that. Chiropractors adjusting people? That one I could see.

Who would have thought that? There's a guy in Chicago that can literally make like your ankles and your hips.

I just had a chiropractor appointment and I was so happy. I got cracked in the neck and even the chiropractor was such a deep crack. It was such a deep crack that the chiropractor appointment and I was so happy. I got cracked in the neck. Even the chiropractor was such a deep crack. It was such a deep crack that the chiropractor did this.

Oh, like that, which was disturbing. But nonetheless, it was very pleasing. Anyway, there we have it. Send us your questions. Go to nymag.com slash pivot to submit your question for us or call 855-51-PIVOT. The link is also in our show notes. Scott, that is the show. We'll be back for more on Friday.

That was a relatively Elon-free thing. I liked it. It was very nice. Thank God. We talked about really important things. We'll be back. I'm sure there's something crazy that's going to happen by then, but we'll see what happens.

And we'll be back Friday for more. Scott, read us out. Today's show was produced by Lara Naiman, Evan Engel, and Taylor Griffin. Ernie Ingetot entered in this episode. Thanks also to Drew Burrows and Neil Saverio. Make sure you subscribe to the show wherever you listen to podcasts. Thank you 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. Kara, I will see you on Thursday. Will you receive me? Will you receive the dog?