Pivot - “The Apple “Rundle” is anemic, the California brain drain (California’s exodus) and a prediction on Palantir’s direct listing

Episode Date: September 18, 2020

Kara and Scott talk about Apple's "rundle" and their push into the fitness space. They also talk about celebrities freezing their Instagram accounts in protest of Facebook. In listener mail, they discuss how California can save its "brand". And in predictions, Scott shares thoughts on the Palantir direct listing. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Podcast Network. I'm Cara Swisher. And I'm Scott Galloway. And Cara, I have been officially or I have selected or volunteered to be a subject in the phase three trials of a vaccine. Really? Are you lying or telling the truth? I took it yesterday. It's the Russian vaccine. And I don't want anyone to worry about me. I'm feeling fine.

My debut book, Red Honour, Glossava za Donalda Trumpa. Oh, my God, I'm Russian. I'm Russian. That's good vaccine humor. There's no good vaccine humor. That's good vaccine humor. The only person who can make vaccine humor is probably Bill Gates, I'm guessing, at this point. That's good humor.

Good vaccine humor. Let me just say, there's a lot of back and forth over when the vaccine's coming. Trump keeps, the actual scientists keep saying no in testimony in front of the Senate or in front of Congress. And I think it was, yeah, it was the Senate. And Trump keeps saying three weeks. But I feel like it's, we have to get a vaccine. Although from reading a lot about it last night, actually, I was reading a lot for an interview I'm preparing for.

It's going to be a long, long, long time before we get one. You think? Yes. No, I don't think. Well, what have you heard? I think there's just so many conflicting views. Well, it's not a heard. I read scientists, not politicians. Oh, Jesus Christ. Just give me a fucking opinion, smarty pants. It's going to be two shots a long time from now. So the end of 2021 into 22 before everybody gets it. There's going to be a small amount of people that get it, and then it's going to take forever. So we're not going to be out of this thing for a while. That's the best case scenario, just so you know.

Yeah. Well, Fauci said that, right? He said by the end of 21, life really won't be back to normal, he thinks, until the end of 21. Yes, people are going to be vulnerable to this for a long, long, long time. So just whatever trumps is about three weeks, he's smoking something, something, long, long time. So just whatever Trump's is about three weeks, he's smoking something, something, smoking something, something. But he always does that. He just lies without recourse, which is, you know, one of his special realities. Let's get into the stuff we were talking about. So Amazon announced it is offering podcast

streaming on Amazon Music. We could, yay for us, I guess. And then Spotify stock film. What do we think of this? And then Trump is jumping at the idea to do a four-hour debate with Joe Biden on the Joe Rogan podcast, which Joe Biden should not do. But probably will not do. A lot of activity in the podcast market. Well, if you think about where video went, the playbook there is the only real way to differentiate is through original content. And it's very expensive and risky to try and back music artists. And the model right now, the kind of entrenched players, the record labels have figured out a way that it just doesn't, you know, even Jay-Z can't figure out his own kind of direct-to-consumer infrastructure.

They're not an oligopoly, but they're sort of a triopoly. And so if Spotify wants to go vertical, they can either forward integrate into hardware or they can reverse integrate into content. And when they reverse integrated into content, they found the place that they could differentiate in an exploding medium was, you guessed it, podcasts. And you could spend a billion dollars and have a decent, stable podcast content that potentially differentiates your service.

A billion dollars behind Taylor Swift and Beyonce, who knows what happens, right? Right. They would probably want two or three hundred million bucks just for their next couple albums. So it makes sense. And you know what's going to happen is it's good for the jungle cat and the dog because now there's more bidders trying to find original content around podcasting. And there are over a million podcasts, but I bet literally less than 100 or 200 are self-sustaining. And they're inexpensive. I was just face-to-face with a friend of mine who happens to be an actor, Sean Hayes, who's on Will & Grace. And I noticed he was... Jack.

Jack, he's great. He was number three on all of Apple podcasts with his thing called Smart List. He's doing with Jason Bateman and Will Arnett. And they bring on a surprise. They each have to surprise each other with a guest every episode. It's a great idea. And they're all very funny. It's just essentially three white guys, funny white guys sitting around talking. And he's number three now, which is, and I was like, how did you do that? And he said he self-funded it. Like, it wasn't his agent. There's no barriers of entry,

but the problem is there's no moats either. Yeah. And the celebrity podcast, the celebrity podcast haven't had staying power. Remember Alec Baldwin's podcast was hot for a while. It's a very difficult medium.

I mean, to sustain. That's what I was telling him. That have sustained. I said, you're a lazy celebrity. You probably can't sustain it. But in any case, it's a mean, there's really just a handful that have sustained it. I said you're a lazy celebrity. You probably can't sustain it. But in any case, it's a really, it's an interesting time and it's an interesting time for podcasting.

Do you think Joe Rogan should, Joe Biden should go on Joe Rogan's show? The Joe should go on the Joe show? No. Look, at the end of the day, the person who's up in the polls wants to minimize all exogenous risk. In debates, there's always an opportunity for exogenous risk. And if you believe the polls, and you know, everyone's nervous, right? We're all scared to believe the polls. But if you do believe the polls, it looks like he is, Biden is markedly up. It looks like it's going to even be difficult for Trump. In most elections, it would be, a lot of media companies, had they not been hit by a car in, in, in 2016 would be saying that it's basically over. And the campaign wants to

minimize, you know, Speaker O'Neill never used to debate his opponents because he didn't need to. Didn't need to. And right now, I, I personally, I just don't think Biden should, should debate him. I think it, I think there's less opportunity for a gotcha moment when they're not standing next to each other or sitting next to each other. Yeah, and Joe Rogan will gotcha him because he's, of course, back in trouble. Yeah, but I think Joe would actually try to be even-handed because it would be a big moment of credibility for him. I actually think he would do a good job. I think he's

an interesting guy with a different viewpoint, although I know you're not a big fan. I think he would do a good job. But I don't think, if I'm advising the Biden campaign, and by the way, I think Obama and the Clintons got together and said, okay, playtime's over, Joe. Here is who is advising you. I think he is getting very smart advice. I think they'd say, all right, come up with excuses, but we're just not going to debate this guy. Unless we go below four or five points margin, there's no reason to debate him. Just say no. Yeah. And then lastly, I have a little banter.

I think he shouldn't do it. It's perfect for Trump to like wander around and talk. It's like it's a perfect Trump format. And start lying. Yeah. You know, he loves to talk. I mean, like the other day, he was just going on and on and on, like lying. And you can't stop the lies, right?

You can't do the lie checks. It would be Joe Biden checking lies, and on, like lying. And you can't stop the lies, right? You can't do the lie checks. And it would be Joe Biden checking lies, and it would be exhausting. He's not sleepy, but the lies, you know, if you ever watch, I think it's Daniel Dale who does the rundowns of lies. I was just thinking of him. Oh, my God, that guy. This is his moment. He's like that guy, Baghdad, the general, that guy's going. That guy's going to have action figures. He is so good. He's so good. Oh my gosh, that guy's good. He's good.

So Republican senators led by Marco Rubio are asking Trump to reject the TikTok deal, or I wrote about it this week. I'm on the same side as Josh Hawley and Marco Rubio, oddly enough. What do you think about that, very briefly? I mean, it's essentially a glorified vendor deal from what a lot of us can tell, but it's not clear what's going on and whether it's, it was just a lot of noise from Trump. It feels like it. Basically, every Republican senator that wakes up in the morning and looks in the mirror and says, hello, Mr. President, including Marco Rubio, who Florida citizens have been funding an extended

and failed presidential win. I think literally every moment of every day, Senator Rubio is trying to figure out what gets him a bigger turnout in Des Moines. I think that is all he does. And what you're going to see, especially if the margin between and the polls between Biden and Trump remains at eight points, all of a sudden, all of a sudden, Republicans are going to find something they haven't come across in about four years. They're going to find their testicles. And you're already seeing it. You're already seeing them starting to say, okay, I'm not on board with this. All of a sudden, they're finding their backbone. And if in two weeks, Biden is still up by eight points, you're going to see all of a sudden a lot of leadership from Republican senators saying,

I disagree with the president. And this is just the latest example. And they're right. This thing is – the CFIUS review, if CFIUS has any integrity, it just doesn't make any sense. Well, the national security, the cybersecurity agency has to sign off on it, really. And if they say no and then they approve it anyway, which they apparently can do, which is – I don't hate to use that term with this administration, it'd be something. I can't even tell what it is, but Oracle's not the owner and the Chinese get to keep the company.

That's really, that's kind of what's happening here. It's a follow-on financing. Yeah, as we said, yeah. That's all it is. We're going to go on to big stories. The Apple Rundle has arrived and their new fitness service is giving Peloton a run for its money. I just want to point out, Scott, when I'm giving you your due about Apple's stock being up some 40%, you said it would be, even though, as you noted, revenue hadn't necessarily changed that much. At Apple's annual event this week, the company announced their new subscription program, Apple One. The service will include Apple Arcade, Apple TV+, iCloud, Apple Music, and other services starting at $14.95 a month. Plus, they introduced their new Apple Fitness+, which will function much like Peloton streaming recorded classes by top fitness trainers.

by top fitness trainers. The move has been rumored since August, and Andrew Ross Sorkin and I talked about it while Scott was out, but the dog is the rundle expert. Scott, in December of 19, you predicted the Apple stock would be up on a move on the rundle. Boom, I guess.

Is that how I say it? Boom? You can do it. Go ahead. Go ahead. Do the boom. B to the double O to the M. That's right.

Recurring revenue bundle. No one had ever heard of it. Apple. There's a really interesting business lesson for almost any company. And that is, all right, all right. We're going to be in a low growth economy. We can't double our revenues, but we need to double our stock price or our stakeholders are just going to invest their human and their financial capital in Zoom or Peloton. And the only way you can do that is to do what Apple has done. But Apple has not increased their earnings one buck in the last 18 months. Their stock's up 150% because 23% of their revenue now comes from recurring revenue, specifically services. What do you think of

this particular rundle? I feel like more should be in there. It's anemic, right? I felt it was not a good rundle. It's kind of, I don't know, it's the bad news bears of apps all strung together, and it's cute, and it's nice, and you like everything. You do save some money. But here's the thing, an effective rundle, and everybody, CEOs call me all the time and say, all right, we want to move to a recurring revenue bundle. And I'm like, all right, are you willing to invest billions of dollars and take your earnings down? Because the metaphor is monogamy. And that is, if you're going to go all in on someone and give up all the rest, it better be an incredibly strong value proposition.

Sure. When Amazon says, all right, two-day free delivering on all your orders, that is like, okay, I am hot. Let's bunker down for the next 50 or 60 years and procreate. I am going to go all in on you. I'm not going to cheat with eBay or any other one else. It is really, it's got to be a compelling offer. And right now it's just not a very compelling offer. You got music, you got games, you got Apple TV Plus, you got some cloud storage, and they're basically testing their fitness app. But the mother, the gangster move here is very obvious. And it's two words, first word, I, second word, phone. The opportunity for Apple is to take the real leap. And Tim Cook's one of the few people that has the credibility, the capital, and the brand to do this. And to take their Apple Care and their iPhone package,

which I think is about 35 bucks a month, and basically say to the top two, 3% of the world that are all iOS users, for $100 or $150, $200 a month, we'll give you all of this, all these kind of, you know, tier two apps. Plus, we'll give you your iPhone, your iPad, your AirPods. And by the way, boss, you're going to get everything 30 days before anybody else. We're not even going to tell you we're going to ship it to you. Don't you want the iPhone 30 days before everybody else? Wouldn't you take it? I would take it. I'd say just ship it to me. Because the biggest mistake that companies make and marketers make is believing that choice is a good thing. No, we want less choice. We just want to be more confident in

our choices. There are many statistics on that, happiness and lack of choice. Well, I don't know about you, but I have decided when I go to restaurants, I do believe that research that you only have a certain number of good decisions in you every day. So I try and not make decisions around anything that's not important. I try to defer to somebody else and I want to focus my decision calories on things that matter. So I don't order food at restaurants anymore. Just whoever I'm with, I'm like, I like the way to work. Every single day.

What's that? I do. I eat the same sandwich every day. Really? Yeah. What is that sandwich? I like it. It's a turkey sandwich with a cheese and coleslaw.

So you're a sandwich monogamous. I like it. I am a sandwich monogamous. But I agree with you. I think this rundle is anemic. That's a very good way of putting it. It's not a, I was like, I get much more. I do love my Amazon rundle.

I do. It's like useful. The delivery, it gets there quick. I'd like more stuff from them. I want more in my rundle. They took their core offering, e-commerce.commerce. The only successful rundles in the world. Spin it up a little bit for me. You know what the test of a rundle is? It's not whether it's a good value. It's not whether

it's interesting. It's whether it's a fucking IQ test. If you have an IQ over 80 in a credit card, you have Amazon Prime. If you have an IQ over 60 in a credit card, you have Netflix. This is not an IQ test. It kind of takes some time. You have to trade it off. And you also have to have an adjunct that makes the core offering that much better. Panera is offering unlimited coffee for $19.95 a month. They've signed up a million people. Why?

Because it's an IQ test. Of course, why wouldn't you do that? Yeah, I agree. Anyway, I think it's anemic, but it's beginning something big. Rich people are very parsimonious. Rich people do like their things, and you do recognize value. You do. There is a value.

Not in terms of saving money. It's like, this is easy for me kind of thing. I like a Rundle. I agree, this isn't a good enough Rundle. I don't want any of it. I don't want Apple Arcade. I sort of want Apple TV, I guess, plus iCloud. Well, I already get that, right?

And then I buy storage a little bit, but it doesn't cost that much. And music, I already get that, right? And then I buy storage a little bit, but it doesn't cost that much. And music, which already costs that much. So it doesn't, I don't know. I don't know. We'll talk about Apple Fitness Plus. This is something they're doing in competition with Peloton,

although more people like the actual device of Peloton, which is the bike or the treadmill, than anything else. And they also like the trainers. I don't know if Apple can really compete without an actual device. It's super interesting. And there's another business lesson here. You want to get in front, demographics are destiny, and you want to get in front of migration patterns. So, if you were to invest in home builders or infrastructure companies in Texas and Florida,

you're going to be just fine because one of the great migrations is being really driven by two factors, and that's sunshine and low taxes. And then the other, the biggest migrations probably in, gosh, consumer history are about to take place. And the first is 18% of GDP is up for grabs because healthcare is being blown up. Then the $700 billion higher ed cartel is being blown up. And also the sweat industrial complex. We are not, just to your previous points, we are not going back into a dark, damp soul cycle or Barry's bootcamp in the next 18 months. And in addition, and the reality is around COVID-19, and we don't speak about this out loud,

there has never been a good time, Kara, to be in really good shape. There has never been a good time to commit to eating better, a better time to commit to getting fit and strong and being robust. Because if you believe Angela Merkel and that 60% of us at some point are going to have COVID-19, you're going to look back on all the mornings you got up and took a run or got on your Peloton or did some pull-ups or, you know, whatever it is, and you're going to think, you know what, that was probably a pretty good idea. Yeah. And I think the fitness industry has been basically 30 to 40% of it has been shut down.

Yeah. So, what do you think of this thing? I'm going to make you land the plane here. Well, okay. So, I think it's okay. So I think fitness is a huge opportunity. I have not tried Apple Fitness. I wonder if they can. Here's the thing. Apple's competence at the end of the day, a lot of people would say it's software. I still believe it's hardware.

I think iOS is beautiful, but I think it's the iPhone and the actual MacBook that are extraordinary and singular. And I don't see how they ever really make a big move in this without some sort of vertical integration into hardware. What do you think? I agree. They have to have the bikes. I'm going to tell you something, although I sound like an elitist. I just bought a new Peloton because— You bought a second Peloton.

No, well, no. I'm trading mine in. They're giving me an enormous amount of money for it. Now, that was left at my house, so I didn't pay anything for it, this Peloton. But I'm getting a substantive amount of money for it, the old one. They're taking it out of my house. They're bringing the new one. And so, when I do the... If I had a fitness club or something like that, it's actually somewhat affordable because I usually used to have a fitness club membership or something like that. And so it's actually like once you take the return and the service is so good, they show up and stuff like that, it's not that bad when you zero it out, right, essentially. And so I bought one because I love the device.

I love the – just like I love the device. I love the, just like I love the iPhone, or I love the Mac. And so, they have to have a device, because I don't want to use their Apple Fitness Plus thing just to save money. I like the whole experience, you know? Well, and Apple's not about saving money, right? And think about how much money is up for grabs. I used to spend- And if they can rent them, that's really interesting, if you can rent these. I used to spend $240 a month to go hang out with really hot gay men in Lululemon. It's called Equinox. And that $240 is up for grabs. Yeah. Well, that's what I was saying. This isn't costing me that much comparatively at all. But what do you

think? Do you think they acquire Peloton? Do you think they come out with their own device? I don't know. They're definitely going to go vertical. They're the best manufacturers of technology products in the world. Do they partner with someone? Do they come out with their own? Peloton, despite that commercial, is a great brand right now. Even though the stock is up like a crazy amount. But it's indications. It might be too expensive, and it also might raise antitrust concerns, but it's an incredible product. It has the highest NPS scores of almost any consumer product in the world right

now. Speaking of antitrust, it's had significant issues after Epic Games sued the company, and then Apple's hitting back pretty hard, saying they started the fire. Will that affect their moving into things like this? Well, that's the issue here, is that people can say, this is a great example of, again, how monopolies are bad. And that is, they're stringing together this kind of, it's called Apple One. It should be called apple meh and that is apple music is sort of the second or third best music offering apple tv plus is sort of the third

or fourth best tv offering but because they're all tied together and because they can put it at the top of the app store you search for anything and it's like all you see is ads it's like how netflix made everybody watch the birdcage or whatever it was called, the bird box, which was just a shitty film. Apple can basically shove this bundle or this rundle down almost everyone's throat. And everyone that competes with the specific apps is going to go, wait, we're so much better than this app. But because they control the rails, it's another example. It'll be used as Exhibit 38B in the antitrust case against Apple, or even not antitrust, but the case that says that the app store needs to be regulated. It really is an example of how, you know, it was pretty quick.

Yeah, but it's, I mean, it's dramatically up. It's up again, but it went down when Apple announces. I just don't, I didn't even, I didn't even think about downloading it. And so did Spotify on the Amazon news. I like the products I have. And it would have to be substantively better. It would have to integrate into my device. Really compelling. I don't.

Yeah. And Peloton has an app or a program. Yes, they do. A fitness program distinct of the device. I don't use it that much. It's about 10% of their revenue and it's growing fast. It feels like they are really coming, really coming into each other's swim lane. It's going to be very interesting to see what happens in what I call the sweat industrial complex. Who do you bet for

on this one? Who do you bet for in this particular fight? Well, I think the answer is yes. I think it's great to be Monopoly and it's great to be the key innovator with the winds of COVID behind you. I don't think it's either or. I think Peloton and Apple are both going to do really well. So they're like the Netflix of fitness, essentially. Do really well. But at the same time, you know who gets hurt? Who gets really hurt? Okay, so this is so indicative of our economy.

There's one innovator that makes billions of dollars, and we think it's an innovation economy. Okay, that's one. It's Peloton. But think about all the companies that are going to go out of business. Yeah. SoulCycle, a great company, is going to go out of business. Equinox, a great company, is going to go out of business. All owned by the same guy. Oh, the guy related. Yeah. SoulCycler, great company's going to go out of business. Equinox, a great company's going to go out of business. All owned by the same guy.

Oh, the guy related. Yeah. Yeah, related. But even, I got a look and a chance to invest in CrossFit. I do CrossFit. You know, CrossFit, I still think they carve out a niche, but all these great, small. Yeah. What happens to Orange Theory, another fantastic company located here in Boca Raton?

Yeah, they're open. Yeah, that's got to be, I fantastic company located here in Boca Raton? They're open. Yeah, that's got to be. I think their revenues are probably 20 or 30% down. I won't go in there. You wouldn't go into an Orange Theory? I did. I used to use it quite a bit. I liked it.

It was a kind of, I liked the workout and I did it like twice a week because I thought it was kind of fun. Like, right. It was just gave some variance. Once or twice a week. I won't go in there. It feels like a COVID soup. I'm the same way. I won't go into a room where people are working out.

It feels like COVID soup. There's too much exhale. Yeah. Once the vaccine, I'll go back. There are things like that. I rumble. There were a whole bunch of them. I tried different ones out. There was sort of like going out to fast fashion stores, you know what I mean? Or something like that. But not now. Not now. They all are in dank basements. You know what was the most humiliating thing about crossfit the last time i was there before covid broke out it's all you all compete against the clock you have to conduct a certain amount of rounds against the clock and uh and everyone gets done it's basically a bunch of lesbian firefighters and 25 year old male bartenders on human growth hormone it's some

of the like most strongest inspiring people in the world and me. And you know what they started doing? Literally. So everyone would finish and start fist bumping and I'd be over there flopping on the ground trying to do my burpees. And Kara, I'm not joking, they would surround me and start clapping and saying shit like, it's so- Go loser. And they would go, they would literally, they would surround me and they'd say shit like, it's so great you're here. And I'd be like, get away from me it was so humiliating you never mess with a lesbian firefighter it's so great you're here it's so great you're here yeah fuck you well oh you're the sad little little i'm that guy i'm that guy oh's so cute. Isn't he cute doing his, doing his burpees? Come on, Scotty. You can make it

to the finish line. Oh, Scotty. Trying to get my am rap. Scotty. Good try. Now I work out outside, which is wonderful.

Good try, Scotty. I'm going to call you Scotty from now on. I know. Listen, we're going to take a quick break, Scotty. We'll be back to talk about celebrities freezing

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Okay, we're back. Let's talk about a couple of issues at Facebook this week. Some of Hollywood's biggest stars are boycotting Instagram for 24 hours to protest misinformation. Hate speech. Celebrities, including Kim Kardashian West, joined with the Stop the Hate for Profit campaign. This is the coalition of civil rights organizations that had organized the ad boycott on Facebook back in July. Earlier this week, a whistleblower, former employee at Facebook, said executives the

company ignored or were slow to address issues around international governments using the platform to spread misinformation. It was a devastating essay that she wrote on media. Meanwhile, the Wall Street Journal is reporting that the Federal Trade Commission is gearing up for an antitrust law by the end of the year. Meanwhile, the Wall Street Journal is reporting that the Federal Trade Commission is gearing up for an antitrust law by the end of the year. Also today, there's more sort of evidence of them not being able to control this platform. In this case, a message that's been going around that's been shared a lot saying for people to attack BLM and Antifa, people to get ready for attacks and stuff like that, which has been shared more than most things by President Trump. And so it continues this continuing.

Now, the celebrities got made fun of for doing this. And of course, this group, Stop Hate for Profit, has been effective with the ads, although who knows if it has a real impact. But what do you think? People made fun of celebrities for, oh, my God, 24 hours, you're killing us kind of thing. What are your thoughts on this? Continues, that was my point. I think it's performative and totally ineffective. And it's just sort of, oh, that'll show them you're taking 24 hours off of Instagram. Come on. I don't know. Fine. They have voices. They're important voices. I think their heart's

in the right place. I don't see any real downside here. But in terms of actual effect and the advertiser boycott, look, at the end of the day, what they should do is testify in front of Congress. What they should do is host fundraisers for senators who are willing to do the hard work and advance antitrust. But the notion that anyone gives a shit that Khloe Kardashian is taking 24 minutes off of Instagram in protest, it's just, who cares? I agree with you. I agree. I agree. It's easy to dunk on these people. But this is the continuing, like, eventually you think this has any impact on regular people not using it or what, like, ew, just these little signals. What would Stop Hate for Profit do? I mean,

they tried the ad. What do you do? You've talked about jail. You've talked about jail time, I think, is what you're... You hold them liable. Look, one of the reasons we keep having these too-big-to-fail and financial crises is there was, no one was arrested from the financial crisis. The algebra of disincentive, you know where the algebra of disincentive has worked really well? Is around Varsity Blues. I would bet if either of us got a call when our kid was trying to get into college and said, hey, for $250,000, I can get your kid into UCLA, a big upgrade from where they're going now, USC, we would say no thank you and hang up the phone because we have seen Ann Pecky do a perp walk. We've seen Felicity Huffman do a perp walk. The algebra incentive is simple.

Also because it's wrong, Scott. Because it's wrong. It's also because it's wrong. I don't even need to see a perp walk. But go ahead. Okay. But you have clearly higher ethical standards than the rest of us. But anyways, just in case for the rest of us, the algebra of disincentive is the likelihood or the probability of getting caught times the punishment has to be greater than the expected upside. And again, that algebra, it's working with Varsity Blues and paying someone to take your kid's SAT, that works. That's government working. Where the algebra of disincentive is turning the algebra of incentive is around big tech. And also, quite frankly, financial institutions that absolutely have really kind of didn't pay any sort of price. No financial executive went to prison in the meltdown of 2008. Anyway, my point is,

yeah, all this stuff is just, it's almost good for Facebook because it gives people the illusion that they're being punished or something is happening. The FTC is no longer a regulatory body. It's the cheapest insurance company in the world that says for 1% of your market cap will indemnify you against future legal action against anything you've done. So look, the algebra of disincentive needs to be revisited. I think there needs to be huge fines or a perp walk across big tech. I think it's getting that serious. What do you think? Interesting. And what would be the perp walk for? Oh, I don't know.

Inciting genocide, perjury, multiple instances of perjury, fraud. It feels a lot like Trump in a lot of ways because he just keeps violating the law. Although, is he violating the law? He's lawless. And then there's no way to enforce it. It feels like you're sort of a sheriff in a small town, a western town, and you can't do anything about, you know, the villain that enters town and is breaking up the saloon and everything else. I just, it's like, what is the actual, that's the thing, is how do you actually get them doing that perp walk? Well, here's the thing. You know, what Stalin said about when death is a tragedy, millions of deaths are a statistic. I think these individuals have learned that. I think Facebook would be in more trouble if it had done kind of one or two bad things versus 200.

Because you start focusing in on, I think if poor, if incompetence, two people died in an embassy in Benghazi, and it's a tragedy because we put a name to their face. But when we have 5% of the world's population and 25% of the infections and probably, I don't know, 100,000 to 300,000 more deaths based on negligence and incompetence, there's no longer faces attached to it. It's a statistic. If you're Robin Hood, rather than maybe stealing from one trader or one account holder, if you incrementally steal from millions or hide information and you continue to violate, you continue to ignore teen depression, it becomes a statistic, not a tragedy. And so the key around breaking the law or acting unethically is to do it thousands or

millions of times in a small incremental way. And I think these companies have learned that. I think they've gone after Lenin's statistical approach and said, all right, if I'm Donald Trump, if I insult every cohort, then I'm irreverent. But if he were just to go after, if he were just to mock disabled people, he'd be in trouble. But no, I'm going to mock women. I'm going to mock people of color. I'm going to be xenophobic. And then it all becomes, well, he's just irreverent. And there's no specific crime to zero in on. Right. Right. So here, in this case, it's got to be the federal

government initially doing things like FTC, I would assume. I think when it comes to our biggest problems, whether it's climate change, whether it's income inequality, or whether it's the growing power, unfettered power, unchecked power of big tech, the only countervailing force that has ever arrested any real true evil over the last hundred years has been either fantastic journalists, law enforcement, but specifically it's been the U.S. government. We have to step in and regulate. And the government gets it wrong all the time, but the heart is in the right place. And they're the only one with the scale and the authority and the checks and balances to hold private power accountable. And when it doesn't hold private power—

All right. Kim Kardashian, any claps, will you? You're not giving her any claps. Who's this? Kim Kardashian. I'm kidding. Look, good for them. Good for them.

Yeah. Kardashian. I'm kidding. She does. Good for them. Good for them. But until the attorney general says, all right, if you continue to do this, if we find people are being pulled out of cars in India and hanged, we are going to reverse engineer it to someone's liability at the corporation that is in charge of this platform. There's certainly a lot of evidence, especially all these whistleblowers. They're coming out of the woodwork over there, you know, with example after example after example. So we'll see. All right, Scott, let's go to a listener mail question. Let's play it.

You've got, you've got. I can't believe I'm going to be a mailman. You've got mail. Hi, Scott and Cara. This is Robin calling from Seattle. As I experience and read about the heat waves, fires, and smoke up and down the West Coast, I've been thinking specifically about the evolution of California's brand and how that could affect those of us in the Pacific Northwest. For a hundred years, California was a sort of American

promised land, its massive population growth due to year-round sunshine and enormous economic opportunity. But weather is no longer the attraction it was as climate change has brought record heat, droughts, and massive love the state. What do you think are the longer-term impacts of all this on how we view California? Thanks, and I love the show. Cara, I'd like to get your thoughts on this, the brand California. I've been talking to a lot of people in California about this.

A lot of people are doing this. They're moving out, which is interesting. They are moving out of, I mean, this last thing with, you know, San Francisco had done rather well in the COVID area, so they were sort of bumping along pretty well compared to most of the state, although Los Angeles was hit harder and didn't have as much ability to fight it off. But I think that's absolutely true. I don't know what the brand, I always think it comes back because it's a beautiful state. It's

a gorgeous place to live. There's so many, there's, you know, there's just a different kind of thinking out there. It really truly is. You're just living here. I can feel sort of the lard above my head. You know what I mean? Like, it's not as innovative. It just isn't. Everyone's pretty satisfied to be here. And I always think about it like, the people who kept going, what kind of people were they, right? And then there's the people who said, yeah, Pennsylvania will do just fine. Or I'm stopping at, you know, here, I'm stopping. Utah. Yeah, Utah or whatever. Well, Utah takes a lot to get there. But, you know, I don't know. It's a really good question because there is,

you know, there are all the issues around homelessness, around traffic, around earthquakes, around these fires now. It sort of adds to, like, it's a lot. It's a lot. And I don't know what these tech companies are going to do since this is where they are and this is where they meet with each other. So a lot of people are moving out. I just don't know if it doesn't then coalesce back to it when things are calmer. I don't know. What do you think? Well, I'm a native son of California. I spent the first 35 years of my life in California, and I have a huge debt to the generosity and vision of

California taxpayers and the Regency of the U.C. I don't think they're... California is singular. It is the most beautiful, interesting society geography in the world. It is to America, the America brand, what Air Jordan is to Nike, what the Mercedes Gullwing is to Mercedes. It is singular and an unbelievable, it's the crown jewel, in my opinion, of America. The crown jewel of California, in my view, is state education. If you think about even big tech, there's been, show me a company that's created more than $10 billion of shareholder value within 12 months, and I'll show you a company that's in a bike ride of a fantastic California educational institution. I think

Cal State, half a million kids. UC, I think they should double, go back to where we were in the 80s where unremarkable kids had remarkable opportunities. I think a huge investment in education. I think they should embrace their love of immigrants and progressive policies. I think that whole state should become a sanctuary state and say, if you're smart and hardworking, please come here. I think absolutely embracing the Latino culture has been a huge boon for us. On the flip side, because I don't want to sound like a total liberal, I think that the state legislature is going to have to take a harder line against unions because taxes and costs have become totally unmanageable in California. But, like, in forest management and climate change, it's all terrible.

But at the end of the day, California is where people keep going to reinvent themselves and take risks. And it happens to be the most beautiful place on earth. So I don't think there's anything wrong with California that can't be fixed with what's right with it, but it's gonna have to bring down its costs. But I'd say embrace your progressiveness, embrace your embrace of immigrants and embrace state-funded education. I think California, you know,

California will have ups and downs as long as they have that desert, that ocean, the Hollywood Bowl, that, you know, it's just an extraordinary state. There's very few people that drive from San Diego to Orange County to Laguna to Los Angeles to Zuma to Santa Barbara to San Luis Obispo to San Francisco to Carmel and think, you know what? I wouldn't mind living here. It's just, it's extraordinary. Should we do that drive?

Should we do Highway 1? Cowboy is extraordinary. Like, you know, like a Corvette could be disastrous. Oh, you know it. We should do that. You know it the most. We should do a podcast. You know it the most.

Yeah, it is. I feel like, you know, definitely my friends are like on their last legs there. And I have a house there. I miss it, but I miss it. I really do. Despite all the issues. I think it's really hard to, it has a draw that's very hard to explain. And it's cause it's, it's so like, it's,

it's got a lot of possible, but there's definitely like, you're definitely like, good God, this is too much. This is one too many. Um, you know, we'll see a lot of people did, we're like today, there was a lot of postings, you know, of those sort of apocalyptic Blade Runner photos in San Francisco, for example, I'm just focusing on that because I live there. I've lived there. I live in DC now, but you know, you see those photos and then today there were all these beautiful blue sky photos and everyone was like last week, this week, and you know, they were happy. They were sort of, had forgotten that, which is interesting. So,

and there is a really strong ability to slough things off. I think it's a question of whether tech companies, having people, just specifically tech companies, having people in the same place, despite this being a digital industry

and everyone talking about work from home, et cetera, et cetera, et cetera, there is a thing about analog proximity that makes an exciting culture. A hundred percent. And what you said before, the people who kept going, there's a reason that venture capital, the people who venture are in on the way.

It's in our DNA. You take the biggest risk takers in the world, left Europe, got on a barf barge called a boat for nine weeks, got to the U.S., and then the ones that said, I'm willing to take more risk, kept heading west. And I'm not only willing to take more risk, I'm ridiculously fucking hardy. I can survive snakes and scurvy and, well, they didn't have scurvy, whatever was killing them. Scurvy. And then I could get past the Rockies in a fucking wagon.

Scurvy. killing them. And then I could get past the Rockies in a fucking wagon. The people, the DNA, the people ended up in California is pretty awesome DNA. Or I am going to risk my life and figure out a way to immigrate here because I want to work hard and I want to make money and send it home. It's like God didn't DNA of risk-taking, creativity, concern for family, wanting a better life. It's just all of it. It is more creative. Oh, my gosh. You're literally mating, like, I don't know, the two hottest, smartest people in the world. It's like, it's literally California is the army of offspring of Gisele and Tom Brady.

And then throw in Madeleine Albright for, like, empathy and IQ or something. It's got the best DNA in the world. How does California not survive? So, a questioner. Sorry. We are pro-California. We think we, you can't, we can't fix what is right with California. You said it was like an old, what's right with America, what's wrong with that.

There's nothing wrong with California that can't be fixed with what's right with California. All right. Who, what state? Yeah. what's right with California. All right. What state decided to have had an elected official, an elected official who decided on the steps of city hall to break the law and marry Kara Swisher and her first wife? What other state would do that? What other state would do that? What other state would say, Kara, we are not going to deny you the same pain and suffering as the rest of us. No, we are not going to.

We are not going to deny you the bullshit. I'm getting married again. And this construct invented by a bunch of dudes who didn't want. I'm getting married again. Anyways, don't get me started on marriage. I'm getting married again really soon. You'll hear about it. I know you are.

I'm doing the mini wedding. I'll hear about it. I'll read about it in the post. I know I'm doing a mini wedding and the big one you'll get invited to. But we're doing a mini wedding because we have to. That was the most backhanded insult I've ever had. I can't, it's just my family. You're on the mass one.

You're on the big one. You're on the big, oh wait, I get to miss the Zoom call with you and a bunch of dogs and your kids and their curling irons and their hot girlfriends. I don't get invited to that? Let me just tell you, there'll be no Zooming in this wedding.

There'll be no Zooming. There'll be no Zoom wedding for Kara Swisher. Thank you very much. Hey, I've had the Russian vaccine. I'm safe. Listen to me. You'll come to the good wedding, the one with the dancing, okay? I'll bring vodka.

All right. Oh, God. I'm rethinking my invitation. You have to not embarrass me. Do you understand? That's my role. We're going to put you and my mother at a table. That's what's going to happen.

And then you virtue signal by just being horrified at me. I'm not horrified. I'm going to have a table of troublemakers, and you and my mother will be the main people together. Lucky's a little fashion plate. Me and Lucky will hit the dance floor, class up the joint a little bit. Class up the joint a little bit. Class up the joint a little bit. All right, Scott. One more quick break. We'll be back. Dr. Swisher will give me a hard time. He's become like my new dad. He emails me when he thinks I'm

out of line. I know that. I love it. I love it. My brother's the best. He's in California, speaking of which. All right, Scott. One more quick break. We'll be back for predictions. Be back for predictions. Support for this podcast comes from Anthropic. You already know that AI is transforming the world around us, but lost in all the enthusiasm and excitement is a really important question. How can AI actually work for you? And where should you even start?

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There's several we've done well on. There's another one that we were right. We were getting credit for. Oh, that people would drop pay of people as they moved out of the Silicon Valley area. we've done well. There's another one that was, we were right. We were getting credit for, oh, that people would drop pay of people as they moved out of the Silicon Valley area. But that was, they were doing that already. I don't feel like that was a prediction, but maybe you do. So I'm fascinated by, one, I'd like to think the immunities are kicking in. I wonder if CFIUS is going to reject this deal. But more specifically, I think a really interesting

dynamic in the public markets. Did you see the Snowflake IPO? I did. Tell me, talk about it. I think it's really interesting. Well, biggest software IPO in history, incredible cloud company. And in contrast to another tech company.

Data storage, but go ahead. Another, yeah, it's basically cloud for databases. Another company that's trying to go public and take advantage of this froth around tech is Palantir. And it'll be very interesting if the markets, how much sanity has crept into the markets because everything that Snowflake is, 3,400 clients growing 150% a year, incredible path to profitability, great logo or client renewal, great dollar renewal, which are really the two things any business needs to look at, logo renewal and dollar renewal. And we should talk about them

more at some point. But it kind of is the best of tech in the web. And I think Palantir is the worst. 17 years and $3.5 billion spent to build a company that does $700 million in revenue and loses $500 million. And three of its clients are 30% of the revenue, 120 total clients. If you think of it, Snowflake is like Google. You can start small, see if it works, ramp up your spending. Whereas Palantir is like a big ad agency that says you need three or five million bucks just to get started, and it takes a ton of time. It's really more of a services company. It's more like an Accenture. And if you look at the private markets, I'm fascinated with these secondary exchanges, and I went on to figure out if I could buy some Palantir shares, how much it would be.

It's trading at 15 to 20 billion. And most recently, they're making signals that they're going to value it at 10 billion. So Palantir now has negative momentum. And then the really, really scary thing here, Cara, that no one's talking about, that no one's talking about but you and me. So Facebook arguably is a global operating system for the consumer world, ex-China. And the second most influential person and what has been the most damaging organization of the last 50 years is Peter Thiel. And Peter Thiel is the founder of Palantir and is also proposing series or class F shares such that they control or he controls, along with the other co-founder, Palantir.

And their stated mission is to be the operating system of government. So let me ask our consumers and our citizens and our senators and investors, do you think it's a good idea to have Peter Thiel as the second most important person at the operating system for consumer world, who wants to be the controlling shareholder for an operating system that figures out the algorithms behind camera surveillance and who gets targeted for FBI scrutiny. It's sort of, you know, it's either like, okay, heads he wins, tails we lose. This company financially is a fucking disaster. They're trying to create distraction by being all secretive and spy versus spy. And we are not like Silicon Valley.

Yeah, you're not like Silicon Valley. You haven't learned how to be profitable. And we have Peter Thiel is going to be who wants to be the controlling shareholder and most influential person in Facebook and now the operating system for surveillance. What could go wrong, Kara? What could go wrong? So my prediction is the markets, I think the markets get it right, similar to the fire door that got slammed shut on WeWork. I think the fire door is going to slam shut again on Palantir. It is a shitty business. I mean, a shitty, concentrated, service-like business that does not have the metrics of a SaaS company. And it's going to be controlled by an individual who has arguably, arguably been the invisible hand behind Facebook.

He's been the only one that hasn't left the board. And now he wants to be the controlling shareholder behind the operating system for our government? Yes, he does. Come on. Talk very quickly about the economics of this. You focused in on that, that this is sort of everyone will not be able to read and understand how it doesn't make money.

Well, you have a company that's 17 years old that's raised and spent over $3 billion and can't figure out a way to be profitable. It loses 60 cents on the dollar. It spent $1.2 million

on $ 750 million in revenues. And it's got 120 clients. It's got terrible renewal rates. And also, I think it's some very bright people there. I think some incredibly bright people, specifically every kid you know that got to level 20 in Dungeons and Dragons is working there now. It's just incredibly, I think it's got a strong culture. I think they do good work. I think at $700 million in revenues, it's worth what Accenture is worth, which is three to five times the revenue. It's worth $3 to $4 billion.

And also, I want to be clear. I like that Palantir has decided to do work for the government and said we're not going to do work for foreign adversaries. I like that. But it shouldn't be a company controlled by one man. That's dangerous. So this is a good company, but already they have negative momentum because they are not growing as fast as other SaaS companies and they're more, they have not figured out a way to get to profitability. And then we have a CEO who claims to be a socialist who's paying himself $15 million a year. Like I said, this company is the Rudy Giuliani of tech. And I think the

firewall has been triggered. I think Snowflake is an example of an incredible SaaS company, 3,400 clients, an ability to start up with a low investment, incredibly scalable, built on better technology. Palantir is built on old technology, which quite frankly has a lot of critics. And they won't release the renewal rates and the dollar renewal because they're shitty. A lot of people try the product and don't like it. So, Palantir or the stock? That's the correct question. It's going to be an interesting test. If Palantir gets out and Robinhood traders just go, oh, it's Palantir. It's got that weirdo Peter Thiel, who's also a crazy genius in terms of investor, and it gets bid up by kids in their basement, I think that's going to be another signal that we are in for a massive scary correction. If the markets do what they're supposed to do, I think the markets are going to get a

taste of this thing and throw up all over the table and say, no, not here. So it is an interesting test whether the halo of Snowflake brings, pulls Palantir up in its wake. It's supposed to do a direct listing anytime. It's supposed to do a direct listing, I think, in the next 30 days. They should get it out before the election because then suddenly he's less powerful. Again, you should be a journalist. That's the right question. That's the right question. And that is the key to being the biggest asset here is Peter Thiel and his relationships with the administration. And the biggest risk is Peter Thiel and his relationships with the administration. And the biggest risk is Peter Thiel and his relationship with the administration. Because do you think the Democratic administration is going to want to cozy up to Peter Thiel? So I think this guy has

crossed the line of an effective oligarch that is now so close and his proximity to Trump has infected him. And I think if a Democratic, Jack Dorsey and Peter Thiel have more of their economic wealth on the line other than Donald Trump, are more invested in Donald Trump and Mark Zuckerberg, more invested in Donald Trump's reelection than any individual. That's the real prediction that I just dragged out of you. All those companies. We will talk about it our next show. This idea of who's in trouble. What do you think? What do you think happens with Palantir? Do you think it gets out? What do you think happens? I think, I look, I go to the economics, Scott.

I think it really is troubling that it can't make money. But that doesn't mean it won't. It doesn't mean that it shouldn't. It's just that others are doing rather well in an area. So I think they do a lot of hand-waving around their secretiveness and their CIA background and their magic Peter Thiel sauce. You know what I mean? I think there's a lot of hand-waving going on.

And by the way, Peter Thiel has had a lot of failures too, right? He's done very well. Let's be clear, he's a brilliant guy. I don't agree with him on a lot of things, but he's a brilliant guy. But there's a lot of hand-waving going on at this company, and it doesn't mean they don't have products that are worthy. But if you can't figure out a way to make money after all this time, when all the wind is at your back, including support of this Trump administration, I don't know what, I don't

know what. That's how I feel. Thank you. Well said. Well said, Cara. Thank you. Today's episode was produced by Rebecca Sinanis, our sound engineer is Fernando Finite. Erica Anderson is our executive producer.

Special thanks to Drew Burrows. If you like what you heard, please download, subscribe, wherever you listen to your podcasts. My WP, Colonel Munglosovov at the Donald Trump.

Oh my God, Cara, it's happening. It's happening. It's happening. We'll see you next time. into real-time connections across AI-powered email, SMS, and more, making every moment count. Over 100,000 brands trust Klaviyo's unified data and marketing platform to build smarter digital relationships with their customers during Black Friday, Cyber Monday, and beyond.

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