Pivot - The FTC's New Rules, Sony's Fall, and Starbucks 86's a Vax Mandate

Episode Date: January 21, 2022

Kara and Scott delve into Peloton's uphill battle, and what the proposed Microsoft-Activision Blizzard deal means for Sony. Also, they unpack Kara's interview with FTC chair Lina Khan. Plus: A listener question about vertical integration. Send us your Listener Mail questions, 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. Hey, Scott, have you gotten my room ready for Miami yet? Well, you know, I'm a super host on Airbnb. And I've kind of figured out the unlock. I show up in a Speedo that says, Grande Eduardo y los Melisas, which of course means Big Ed and the Twins. And the first thing I do is I sit my guests down and I say, okay, shut the fuck up. Here are my rules. First rule, don't ask me where the bathroom is. It's the room with a piece of wood with a hole in it. Figure it the fuck out. And then I tell them I'm going to drop by randomly that I have a key. And what do you know? What do you know? One star.

No, I'm actually, I am not going to be staying at your place, although I am bringing the clan down at some point during this horrible, horrible, freezing cold winter here. But I will be down there in a few weeks for our event, our pivot event. And I'm very excited to get out of ICE prison here in D.C. We just got Brian Chesky of Airbnb joining us as a guest. CEO of Airbnb. He had just announced that he's going to live in Airbnbs around the country two weeks at a time. So he'll be in a Miami.

Yeah, there's a term for that. It's called being rich. The wealthiest people in the world spend their summers in Aspen, Saint-Tropez, and Montauk. Yeah. And he's like, ooh, well, smell you. Well, he's going to stay in Airbnbs. We're going to ask him about it. And he's going to be at our Pivot MIA conference.

I don't get that. Why? He does it all the time. He's testing the product. Kara, I've heard it announced that I'm spending the summer in different Mandarin orientals around the world. It's going to make a real statement. It's going to be inspiring. No.

It's going to be inspiring. No, I think it'll be good. It'll be interesting. There's a lot to talk to him about, right? We've got a lot of amazing guests and more to come. I used to think I wanted to be Andrew Ross Sorkin. Now I think I want to be Brian Chesky. Yeah, we'll talk about Andrew Ross in a second.

But it'll be interesting. There's lots of issues around that. But it'll be nice to be in Miami. It'll be nice. You know, of issues around that. But it'll be nice to be in Miami. It'll be nice. You know, Lucky's coming. My brother's coming. There's a whole Swisher clan headed. I'm sorry.

We're supposed to talk about our guests, and you're doing a name check on the family members coming? That's going to sell a lot of tickets. No, Brian Chesky's coming. The head of Goldman is coming. Go ahead. You can name check. CEOs, WeWork, Airbnb, New York Times. The Smith brothers and their new thing.

We got crypto stuff coming. I think we've got a psychedelics thing happening. Oh, CEO of Goldman Sachs, David Solomon, and also colleagues Aswath Damodaran or Jonathan Hyde, or as my students say, the guys that actually know what the hell they're talking about. And actually teach students and treat them with respect, those guys. There you go. So anyway, so I'm excited to come down there. And actually teach students and treat them with respect. Those guys. There you go. So anyway, so I'm excited to come down there. And you better not be wearing a Speedo. I did say you were going to serve everyone mocktails on the beach.

What? That's a crime. Mocktails are a crime against humanity. I was trying to be respectful of people who don't drink. I was trying to be respectful. Mocktails. Yeah, we're going to have mocktails. We're going to have cocktails, too, and everything else.

So it should be really interesting. We're very eager to push forward where things are going. Tuesday night. Tuesday else. So it should be really interesting. We're very eager. No mocking of the tales. To push forward in where things are going. Tuesday night. Tuesday night. Yeah, it's a party. Tuesday night, we're doing a total march. We start outside with drinks, then we head to the cabaret at the Faina.

That's the next night. We end up at that speakeasy, the Saxony, late at night. Yeah. Yeah. It's going to be a lot of Scott drankin'. Come for the CEO, stay for the substance abuse. Yeah. Boom!

Yeah, Scott will be the late night host. I go to bed at like 10 o'clock. Anyway, we're very excited about it. Well, you know what our vision for this thing is? What is it? Our vision for this thing is if Mark Andreessen and Stephen Hawking had a kid, it would be this conference. That doesn't make any sense. That's your vision.

That doesn't make any sense. That's kind of gross. Anyway, please come. Please sign up. We're very excited. It's coming of gross. Anyway, please come. Please sign up. We're very excited. It's coming soon, and we're very excited about being in Miami. Anyway, today, speaking of which, some of the issues we're going to talk about there, the latest in antitrust, including some news from my interview with Lena Kahn.

I also had an Elizabeth Warren one up today, and they both talked about the issue. We'll look at the fallout from the Microsoft Activision deal. We're going to try something new. It's a little game called Elevator Pitch. So stick around for that. We always try to have new features on this show, new things like our conference and this. We're always trying to be fresh. Yeah, we're so innovative.

Anyway, first, Peloton's uphill battle is getting steeper. The company has brought in McKinsey, which is, I don't know if it's a good sign or not. You would know better. Problem solved. Review costs and potentially cut jobs reportedly in its apparel division. I do wear one of its Allie Love bras, by the way. This comes amid news that Peloton Insiders sold nearly $500 million in stock before the price plummeted in November. That includes its CEO, John Foley.

He sold about 16% of his whole thing. That's a lot, excluding options before September. Usually, these things happen normally, but that's a big one. One Peloton employee told CNBC morale is at an all-time low. So, I mean, this was a flying high company that we both like, actually, as a product. But what do you think? I think it's primed for sale. That would be my guess, primed for sale. Yeah, you're right. It hit about $170. It's at $30 now. And it's a bad look when I think CEOs should have planned sales. I think it's just when a stock gets his, you know, it's their right. He didn't do anything illegal here. It's there, but I think it's a better look if you just have planned

sales where a certain amount of shares are sold, you know, kind of at predetermined dates. It does look, it makes shareholders angry when they see that the CEO realized this company was overvalued. So this company's in a lot of, you know, it's hit a speed bump. A lot of it was just, it was riding so high, but there's going to be what I call a 70% off sale bin. And we've talked about this, where companies swoop in and say, we're giving you a chance to shake the etch-a-sketch here and move on yeah and i just gotta think that they're getting calls from every banker in the world i still believe i used to think it was going to be apple now i think it's going to be nike but it does a host of people who could talk themselves into buying well they're also it's interesting the others mirror sold itself to lululemon they

others got out while the getting was good i think in a lot of ways and the question, was this going to be its own thing with the subscription, as we talked about? Because that's a really strong thing, is having a subscription relationship. We've been pro-Peloton. But at the same time, you know, some of these missteps have been problematic, including the pandemic ending and people wanting other things probably get over-Pelotoned, right? I guess, or something I have for sure, although I use it regularly. Well, you know how you know if someone has a Peloton. They tell you. Jesus Christ. It's like they're on it once a week so they can talk about it four

times. Yeah, but I think it loses its appeal. All these things that you were doing, Zoom is down, all these things are down, and it was definitely a pandemic stock. But it's interesting to see where they move it into because people, you know, what's going to stay regular and what's not going to stay regular as a practice post-pandemic. Yeah. But it's more than that. They have supply chain issues, morale issues. They actually had negative growth. So there's a lot going here. And a lot of it was just the stock.

I mean, it's easy to say these stocks are 70%, 80% off, and we understand, but they probably should have never reached those heights. They got kind of to a crazy town. Yep. Indeed. Indeed. So now it's just wait and see what happens there and what McKinsey does. You know, you can't be smaller. I'll tell you that. You got to really move to the next level if they want to become more global. I still have mine. I put it in the middle of my living room. It's my favorite piece of artwork other than the turquoise marble peacock I keep in the fireplace. Yours is in your garage, your Peloton, as I recall. It is in the garage. It is in the garage. It sits there in a set next

to the Tesla. Actually, you like Peloton. I can't do it. I don't have the discipline. Yeah, yeah, yeah. I like the instructors. Jesus Christ. Yes, they're great. I think they have a great product. Hello, Cinemax. They have a great product. Oh, stop it. Anyway. Oh, come on.

No, I shall not go there with you. They're wonderful people. Hoo-wee. Anyway. Another thing, Starbucks, it's interesting, all these changes, the pandemic changes, is canceling its planned vaccine or test mandate for employees following the Supreme Court's ruling last week. They had sort of happily gone into it and been very aggressive about it. And that ruling found Biden's vaccine mandate couldn't apply to big businesses since COVID isn't a threat unique to workplaces.

Starbucks CEO John Culver said in a memo the vast majority of employees are fully vaccinated. They probably feel like it's done and that it's not a negative for its business. I definitely, if they had not had the vaccination thing, I probably wouldn't have gone in necessarily, or it would have been thinking about it. I definitely have thought about it with airlines. Also canceling the mandate, GE, keeping the mandate, Goldman Sachs, United Airlines, Tyson Foods, Citigroup, Carhartt.

Some of Carhartt's customers are calling for a boycott. My son wears Carhartt a lot. In-office mandate, American Express, Deloitte, Facebook, Google, Lyft, Salesforce, Uber, as we noted, Jamie Dimon had noted that. But Starbucks has 200,000 employees in the U.S. and 56% of Americans say they support vaccine requirements for employers. So it's an interesting moment. I think people are trying to do the move on from the pandemic thing. What do you think? Well, look, I think it was great that they did the mandate, but it's probably, so first off, at NYU, for example, we not only have a vaccine mandate, I just got a message

saying I had to upload proof of my booster. So different firms are taking different approaches, distinctive of what the Supreme Court has said, thinking that by the time that there's a lawsuit filed against them to try and enforce, you know, this really is to a certain extent the company's decision at this point. And I feel like they're using the law as a backstop for their narrative. And I think at the end of the day, Starbucks' workforce is under so much pressure because of what you call the greater reassessment, which I think is the right term, that every QSR, every restaurant, whether it's Domino's, Starbucks, Panera, Chipotle, they are really struggling with a staff of 12 that are supposed to show up every morning and five don't show. And so the vaccine mandate was just another

headache that caused another one or two people not to show up. So look, at the end of the day, I think Starbucks has made the decision not to comply with the law, if you will, but to say we're at a point where the trade-offs for us from a company standpoint aren't worth the mandate. Also, I think more generally, and you've said this, I think that the majority of us are sort of at a point where we're vaccinated, it's going endemic. There was an article yesterday I saw, I think in the New York Times, saying that at this point, if you're fully vaccinated, COVID is more contagious, but no worse than catching the flu. But at the same time, you talk to your brother, and he points out that 50 to 100,000 people are likely still going to die from this.

But I think people who are vaccinated are kind of like, look, best of luck to you, but I'm going on with my life. So I don't think there's going to be much pushback here. What are your thoughts? I agree. I think post-vaccination, I think that's sort of the attitude of most people. I did a really interesting sway, it's coming out Monday, with some experts. And they had different opinions, honestly, I mean, which was good. And it's okay to have different opinions. They weren't that far off everything else. But the idea is, look, if you're vaccinated and boosted, you'll be fine, most likely. And it's not, it's not, it's, they're like, it's not zero, it's not one, it's somewhere in there, you've got to assess your risk, essentially, and it's not that high.

And so, it was interesting, I'm not saying people shouldn't be careful, by the way, but it's really, and I can't stand sort of the gloaters like CCC, they're, broken clock is right twice a day, essentially. It was very dangerous for a long time to have that attitude. And so anyway, so I think it makes sense. I was thinking, would I go into Starbucks or not? I think they've gotten most of their employees vaccinated.

So I think that they sort of feel like it's safe. They reported that, right? Did they give a number? Yeah, it was high. It was very high. It was super high. It was like it's safe. They reported that, right? Did they give a number? Yeah, it was high. It was very high. It was super high. It was like, I don't know, 80, 90, something like that. And I think that that's one of the things. It's like they can come out and not antagonize the people that they need to work there. And again, they're a restaurant business. Let's not forget that. Anyway, we'll see what happens. But Americans do support vaccine requirements at certain things.

And I do think individual companies should be making these decisions now. And then they just deal with the workplace however they feel like it. You know, we're doing it. You don't have to come in. Whatever you want. You know what I mean? That kind of thing. And then we'll see.

The ones that were just doing it for virtue signaling, we'll probably dump it pretty quickly. But we'll see. I think they'll decide based on the reaction from their employees. Well, hopefully, it does look like infections, at least in Florida, and I believe in New York, are starting to come down. Deaths are up because there's a lag. But it looks like, and we've been here before, but hopefully, it looks like we're headed in the right direction. Yeah, we'll see. So anyway, and then hopefully kids can get vaccinated. Although some of the people when I was talking to, they were sort of like, Kara, you're, you know, the one I'm worried about is the golden child because she can't get vaccinated.

But they said, one, it's coming sooner than you think. And two, you are more at risk, Kara, for getting really sick than your unvaccinated child. They were showing me statistics. And I was like, oh, okay. But still, you But still, no matter what it is, it's an emotional thing to be worried about your children. And people that give parents a hard time about this should hush themselves, I think, in lots of ways. Hush, hush, please, hush. Don't talk to me.

It's emotional. Anyway, time for our big story. I had a really long interview with Lena Kahn yesterday, me and Andrew Ross Sorkin. Give us the cliff notes. I will give you. And please don't tell me that it's a really interesting podcast and I should listen to it. Go ahead. It was actually in the studio.

I had makeup and I was with Mr. Sorkin, your favorite Canadian. You, Andrew, and Lena? Yeah, yeah, yeah, yeah. We did it on CNBC. Yeah, that's how we did it. We did a live one on CNBC. And then it was, I think, her first really long, first TV interview and the first very long one. And so we talked about a lot of things.

Like, it wasn't just one or two things. It was in the wake of two things. One is the Microsoft Activision deal, which, of course, they didn't know about or nobody knew about. And then her and John Cantor, who's the assistant attorney general for antitrust, had just started to release, trying to come up with new guidelines for mergers, which are related to antitrust, which haven't been updated in a long time. And so they're looking beyond price increases to determine if the customers are being harmed, including labor, the effect on labor. They're looking specifically at

digital things because they think these networks are different than other companies in consolidation. And looking at things like harms to privacy and quality degradation is a word Khan kept talking about as they evaluate mergers. They're going to get comments and then they're going to they're going to see what they're going to do about those. But they're coming soon. One of the things that she talked about a lot, and I think she's correct, is how severely under-resourced they are. She really articulated it, even though they're trying to enforce the law and said there might be retroactive enforcement of deals that went through without proper scrutiny. That's what she thinks she's specifically talking about Facebook. I think one

of the things she talked about was how little money they have. And of course, Congress still hasn't, that one of the bills that was supposed to give them $500 million more, both those agencies got, you know, got turfed because of the, one of the Biden social spending bills. And then it was in there. And then the other one, which has passed the Senate by Senator Klobuchar and Senator Grassley to raise merger fees, is still sitting in the House. So they don't have more money. And they're being, you know, on a real basis, they have less people dealing with more mergers, which have doubled. There's 4,000 this year or something, and people are just shoving them through the pipeline because they know they can, you know, they can run through the gate without having to pay their ticket.

because they know they can run through the gate without having to pay their ticket. Well, in the U.S., year on year, M&A transactions are up 140%. And in the last 40 years, the FTC staff has been cut in half. There were twice as many people working in the FTC in 1980. Yeah, that's what she noted. And mergers have gotten much bigger, much more complicated. Did anybody use my favorite term, hipster antitrust? Yes, they did. Yes, they did.

Andrew did. He quoted Larry Summers, who I got to say, I've got some issues with Larry Summers, but call it Brandeisian. Brandeisian. We asked her how to pronounce it because she's the only lawyer among us. And she said, she scoffed. the only lawyer among us. And she said, she scoffed. You could hear the thought bubble above her head, which was Larry Summers. Well, just, but it is the key distinction, and that is 40 years ago or so, we decided to adopt kind of the antitrust, I don't know, Bible, if you will, was from Bork out of Chicago that said that there was one test and you could

distill it down to one test, and it was the consumer pricing test. And that is as long as it didn't increase prices and there was no consumer harm, you were fine. But the problem is that just isn't an appropriate metric for a free service like Google or Facebook. And I would also argue that the costs we incur from the monopoly that is monopolies that are Google and Facebook are non-economic harms. And ask anyone with Google and Facebook are non-economic harms. And ask anyone with teen girls about those non-economic harms. But the hipster antitrust viewpoint or Brandesian, it says, okay, let's look at income inequality. Let's look at wage growth.

Let's look at competitiveness. Let's look at labor markets. Yeah. And that's just a more thoughtful prism to look at the harm here. And we need to go back to that. And I think she's absolutely from that school of thought. She sort of started it. She was the one who wrote that famous paper on Amazon. And one of the things that was interesting to me, I think she was sort of lowering expectations saying, look, we're working hard, we're trying to enforce, we're trying to do deterrence, but these giants are coming at us and we will continue to fight. I think that's what she was, you know, I think it was very deft on her part. At the same time, it's true, right? And she literally kept saying over and over again, this idea of these qualities, the degradation of quality is the word she kept using, which is an interesting bunch of words. Interesting bunch of words. And the attacks on her. We talked about the recusal efforts, which they have lost so far in court.

The judges have been like, of course they picked her because she was the way she is. So cut it out, Google. I think Facebook. They're also doing the same thing at Cantor. But Apple and Google, for example, are still going on the offensive. In a letter to lawmakers, Apple said that planned antitrust bills, which are separate. We also talked about Congress and what it needs to do to change antitrust bills, would make iPhone users vulnerable to malware attacks. In a blog post, Google's chief legal officer said the new rules would force Google

to include spammy services in its search results, among other risks. So they're like, if we're not allowed to do what we want to do, all hell's going to break loose. We're keeping the streets clean, essentially, is what they're saying. And the industry pushback doesn't even address the new bill from Democrats that would block digital advertisers from targeting ads to users. So, you know, it's a real face-off. And we'll see if, you know, Apple and Google and all the others are in a better position

because they're rich and powerful and shoving these mergers right through. One executive said to me, like, look, they'll give us a hard time. They'll shake us down a little while and then they'll say yes. So whatever. Like it's a dance. It's still a dance. And so she's got to win. She can't like mount like sort of Don Quixote-like efforts without some kind of win. But the ability to move forward with Facebook was a win when they refiled the case against Facebook, which the judge had pushed back on the FTC. So we'll see. She was very impressive.

Very impressive, I think. Yeah, and this argument that I believe Meta and Google are both saying, look, or Apple, I think. Is it Apple and Google that are stating that all hell will break loose and we keep the clean? It's exactly the same argument that the mob makes when you give them protection money. They say, look, we ensure that the streets are safe and that the violence is kept to a minimum and you pay us protection money. This is the exact same argument. Okay, it's illegal. You're paying us rents. You shouldn't have to pay. But we keep, you know, we keep things from getting too out of control. Well, you know, we'll take our chances. Get the hell out of here and stop extorting us.

I think these arguments go nowhere. I think they can't get away from these numbers in terms. You know, they will also do the China. We talked a little bit about the China thing, and she was like, okay, but it's not that. Fine. Sure, China's a threat. And they're making, of course, that argument that China has more cameras, et cetera, pointed at us than anywhere else with TikTok or whatever services they're using. They're allowed to buy gaming companies. Let's talk about taxes.

Yeah. You know what the greatest tax on creativity ever levied? What? Ever. It's the App Store. Well. If you're a really thoughtful person who's blessed with the skills and the certification to understand the intersection between creativity and technology, the manifestation of that is something called an app. And if you want your app to ever see the sunlight, you got to pay 20 to 30% to one firm in Cupertino. So the most prosperous creative

minds in the world outside of art in business, if you will, are all paying a 20 to 30% tax on one firm that is charging the greatest tax in history on creativity is the App Store. We need more points of distribution and more options such that the new kind of new generation of creatives can get sunlight to things without, I mean, 20% to 30%. The average company, if you're really lucky, has 50 some cases. But go ahead. The average company, if you're really lucky, has 50 some cases. But go ahead. Well, and they say small businesses, to be fair, small businesses like 0.2 don't pay anything.

But if you think about margins on a company, the margins you get, you're hoping for 50 to 60 points of margin, maybe more if you're in a digital space. So, you're giving half your profits to the gatekeeper? I mean, it's just – Yeah. They have an argument to be made about safety. They have an argument. But, you know, we can be the only ones who can protect you is probably not true. It's just not true. There's other options, you know, other search options. Google could be labeling any non-Google results as spammy. Like, only us can do it is the kind of thing. Only I can save you.

I can save you. Exactly. Come on. So, you know, I think people are sort of onto this, and at some point they have to acknowledge 90-some percent of this to, you know, 80% of an ad market is just problematic. Now, there's two more besides China will be there's lots of competition, TikTok, and by the way, China, for Facebook. Or, hey, in the gaming industry, and there is, there's, you know, guess what? China owns, through Tencent, owns lots of big things like Supercell and Riot Games and a big chunk of Epic, which is an American company. And they don't get regulated. Why are we getting regulated?

We'll talk about that in a minute. But, you know, that's the idea. Like, look what happened with competition for all of us. We'll be gotten by competition. And again, that's fine, but it's not, there's no regulation. I think she's got a real uphill battle, that's clear. But a really smart regulator, I think, you know, there's been some controversy because she's opened up meetings, she's very urgent, and I think maybe some of the FTC haven't been as urgent over the past few years. And, of course, she has to deal, which I didn't talk about, with just her imagery, right?

She's a young woman of color who is just clearly like a prodigy, kind of legal prodigy kind of person. And I think, and not experienced at running anything, obviously, but so smart. And she did work on David Cicilline's committee, and they did a great job. So, I think probably her coming at them is probably like, what's this? You know, that kind of thing. And they can play on that. They haven't explicitly done it, but they've implicitly sort of been like, who is this person who deigns to question us? So, I like, I think she's a tough, she's a tough one. So. As always, they're conflating issues. They have a real legitimate argument or concern around if we can't access Chinese markets, how can they, how can we, or why would they expect to be able to access our markets in an unfettered fashion? That's an honest conversation. And I think if,

in retrospect, we look at one thing that we will begrudgingly admit that Trump got right was China to say, look, this seems to be more of a one-way relationship or the relationship here or the benefits are asymmetric. I always thought Google and Facebook love having Twitter and Pinterest because it's like they can look at these weak competitors and say whose brand and awareness is not as big as Google or Meta. But it's in kind of they can say, oh, there's different social media networks. Meanwhile, they do about one – they do about 3 to 5 percent of the revenue of Google. They're really not competitors. I work with a lot of people who spend a lot of money on these platforms. You don't ever hear them talk about Twitter or Pinterest when they pull out their checkbooks. They just don't. I mean, the big money is reserved for two platforms. The question is not whether they have competition. The question is, if you went in and broke them up, would the ecosystem get healthier? Would there be more

tax revenue, more jobs, more competition, more startups? What would happen to the ecosystem get healthier? Would there be more tax revenue, more jobs, more competition, more startups? What would happen to the ecosystem if you broke up? Because technically, every monopoly can feasibly, you know, Netflix says my competition is time. So, the term competition, in my opinion, ends up creating somewhat of a side conversation. It's simple. somewhat of a side conversation. It's simple. If we broke up Facebook,

would we in fact have more child safety, likely more innovation, likely a company that had to adhere to or attempted to say to platforms, look, advertise on us and we won't weaponize these platforms with extremist content. Would every advertiser, every company in the world perhaps get some margin back

because we lower the rents? And the answer to all these things is yes, yes, yes, yes. Okay. So, just because you point to Pinterest and say we have competition, it doesn't matter. Yeah. I think one of the interesting other interviews I did was with Elizabeth Warren, who was talking more about taxes, you know, and Elon Musk, and of course, addressed being called Senator Karen by him, and she sort of dismissed him for that. And one of the things she talked about was paying their fair share that kind of thing which she always does i did make the point to her like well then change the friggin laws i sort of channeled you like it's your fault you know if the tax structure it is the way not you in particular senator warren but you in general you know if you there's a tax structure why shouldn't he avail

himself to it? And secondly, he is paying taxes when he needs to. But, you know, you can't expect people to just line up and want to pay taxes necessarily or shame them into it. It was interesting. It was an interesting discussion. I like Senator Warren, but they definitely, all these people who, and the personal attacks on her are ridiculous, just stupid. And, you know, I don't know why they do that. I really don't. I can't even begin to understand that kind of mentality.

But I think they've got to change the tax structure at this point if that's the problem, instead of saying how greedy they are. I don't think it really plays as well as they think it does, because I think people admire. Yeah. And you can look at Musk and say, look, he's cutting costs at NASA. He's doing this, he's doing that. And that's where he should be arguing, right? Like, I'm doing good things too. So, if you want to change the laws, change them. But them indulging in the insults of her seems ridiculous on some level. Well, you said something, and this is my favorite part of the program where I get to virtue signal, but I did a Zoom with a bunch of young men that are affiliated with this

My Brother's Keeper group. It was a wonderful organization, and someone used the term Karen. And I said, be clear, Karen is the new bitch. And that is when men are angry and want to make a misogynistic comment or a sexist comment about some behavior that they have no honest or thoughtful response to, they call the woman a Karen. I'm like, what is the male equivalent of Karen? There is none. It's a sexist, just, we should strike the term Karen from our vocabulary. And anyone who says it is trying to find a more elegant way to call a woman a bitch when they have no evidence and argument to push back on her behavior. It's just, again, these individuals, as brilliant as they are,

have to let their inner child develop an outer man. Calling someone a Karen is basically saying, you know, you give up or you want to make a sexist comment about somebody. It should be struck from the vocabulary. And I'm not someone who thinks we should, you know, that certain words are dangerous or whatever. Fine. It's a word. It's in our vocabulary. But be clear.

You're just calling someone, you're just calling always a woman a bitch when you hear the term Karen. That's what it's used for. It's interesting that both these people pressing and the third being Amy Klobuchar, are all women. It's really, I mean, there are men involved. There's Grassley and Warner and this and that. But some of the loudest voices are women. It's very easy to insult them, you know, using sexist terms. He's not calling Bernie a Karen.

He called him something. Yeah, he said, no, he said, he said, I forgot you were alive. He basically made an ageist comment, right? Yeah, yeah, yeah, yeah, yeah. Something like that. So let's go to the Trump playbook. Let's go alive. He basically made an ageist comment, right? Yeah, yeah, yeah, yeah. Something like that. So let's go to the Trump playbook. Let's go to a sexist or an ageist comment. Have a real argument.

And she was like, I'm happy to have a discussion about taxes, please. Let's do that instead of you calling me a fucking Karen bitch. And then she's like, I'm going to slay you. She gives as good as she gets. Anyway, two good interviews. Did you ask her, though? Did you press on her? It's like, well, how come you've been ineffective in passing progressive tax legislation? And what did she say? Well, they're Republicans.

They're Republicans, yeah. Okay. I mean, what a dysfunctional system that all these people can take advantage of. Anyway, let's go on a quick break. When we come back, we'll talk about Microsoft Activision's impact on Sony and others and take a listener mail question. online scammer. What do you see? For the longest time, we have these images of somebody sitting crouched over their computer with a hoodie on, just kind of typing away in the middle of the night. And honestly, that's not what it is anymore. That's Ian Mitchell, a banker turned fraud fighter. These days, online scams look more like crime syndicates than individual con artists. And they're making bank. Last year, scammers made off with more than $10 billion. It's mind-blowing to see the kind of infrastructure that's been built

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

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

but opportunities. As artificial intelligence powers pivotal moments of change, Alex Partners is the consulting firm chief executives can rely on. Alex Partners is dedicated to making sure your company knows what really matters when it comes to AI. As part of their 2024 tech sector report, Alex Partners spoke with nearly 350 tech executives from across North America and Europe to dig deeper into how tech companies are responding to these changing headwinds. And in their 2024 Digital Disruption Report, Alex Partners found that 88% of executives report seeing potential for growth from digital disruption, with 37% seeing significant or even extremely high positive impact on revenue growth. You can read both reports and learn how to convert digital disruption into revenue growth at www.alexpartners.com. That's www.alexpartners.com.

In the face of disruption, businesses trust Alex Partners to get straight to the point and deliver results when it really matters. Alex partners to get straight to the point and lock out Sony's PlayStation console. That's a worry. Meanwhile, shares are up for smaller. I don't think they would do that, but we'll see. That would be a real shot across the government's bow. Meanwhile, shares are up for smaller game publishers like Capcom, whose titles could become the subject of a bidding war. Epic's involved in it. There's all kinds of companies that could be for sale. What was interesting was Khan didn't address it, couldn't address it because there's nowhere to go. But I'm sure they're looking at it as they are the Amazon MGM deal, et cetera.

But it's one of the things that's interesting about the Microsoft people and the Activision people is off the record, I can say the words. I'm not going to say who said it. But they're like, distant third is their favorite expression. And China. Distant third, China. It was like said twice. I was like, okay. And in fact, they are by revenue behind China's Tencent and then Sony.

So there's plenty of room here to argue that it's a competitive market. And at the same time say, oh boy, if one company or two companies get a hold of this that have the AI and infrastructure to be building the next version of the metaverse, because that's the other argument they make. If you want the metaverse, people, you need to do this. It's going to be interesting. It's a really interesting moment in terms of this purchase, which is enormous, Microsoft's biggest. So what do you think? Well, what I found interesting from a market standpoint is that Sony shareholders believe the acquisition is going through

and took the stock, as you said, down $20 billion, whereas Activision shareholders aren't quite as certain it's going to go through. And there's an entire industry around Merge merge arb where when a merger is announced, usually if it's announced at $100, occasionally it goes above because they think it's going to solicit other bidders at a higher price, but usually it trades at a discount to the announced price until the transaction is closed and then the merge arb guys come in and they make a living saying they assess the likelihood the merger will go through. And if they think it's probably going

to go through, they go in and they buy the stock at a 5%, 10%, 15% discount and just wait for three to six months and boom, get what they feel is fairly risk-free or a great risk-adjusted return. And what's interesting here is that the discount from the announced price is much greater than it usually is, which means that Activision shareholders don't believe or think there's a real risk this thing gets blocked. But at the same time, Sony, it's clear the market in general just feels like maybe things have gotten too rich for everybody because they're looking for any excuse to take a discount off the stock. Well, we'll see. It's interesting. I think one of the, you know, I think this is going to go through. I said last week it wasn't. Maybe they

have to do something, but they've got bigger fish to fry here and they don't have enough. There is too much competition. They'll shake them down a little bit and demand this and that. That's exactly right. I would bet, you know, 70% likelihood that it goes through, but they say, but you have to divest these assets or these titles. Yeah. They'll say, we're mean, see, we're going to let you do this, but we're standing watch and you've got to spin X, Y, and Z, or you've got to get rid of this game or something. And you can't bar games from other platforms. You've got to sell the Cartoon Network or something. You know, it's like with the Time Warner acquisition. They'll say, okay, you know, you've got, that's it. We can't let this go through.

So you've got to divest adult swim. There is arguably a lot of competition here. At the same time, you can see the coalescing happening in real time, right? That it's Microsoft. And I think one of the things, everything, of course, everyone goes metaverse because metaverse is why they need to do these things and they need the heft. But there are only a few companies. If you're in the gaming business, I think most gaming people I talk to are like, we need some real technology now, right? We need some really heavy-duty AI and cloud, et cetera, et cetera, machine learning, this and that.

And they all say they're not capable of doing it. It's expensive and difficult where games are going. And so there's only a few, Microsoft, Amazon, Facebook. I'm surprised Facebook hasn't moved in here more significantly. I think they're probably the most wary of doing any acquisitions. It would be Google, Microsoft, Amazon, Facebook have the capabilities, right? So of the American companies. And then, of course, there's Tencent, which owns so much more gaming than you realize.

It's crazy what they own. And including U.S., very significant amounts of U.S. companies. One of the executives said something to me, which I have no basis, in fact, from saying it, but they're like, I don't know why we're fine with China pointing all these cameras and microphones at us, at the US, and not regulating that. And then they're worried about us. And I'm like, worried about all of you. I don't know what to say. But I think they'll definitely raise that, you know, boogeyman, the China boogeyman. So it's going to be an interesting time. But there is, this is a global industry, and it's going to be really hard for it not to consolidate more and more for time. So we'll see. Agreed. We'll see. So before we get to our listener question, we want to try something new. We're going to pick a startup and talk about its

funding. This is Elevator Pitch. In our inaugural round, we're going to look at a company that I like a lot. I use it a lot. I've used it for years. 1Password. I pay them every year. I find them incredibly useful. They just closed a $620 million series funding round. That brings a valuation of nearly $7 billion, which seems small to me.

1Password has more than 100,000 paying customers. As I said, me being one of them, over 500 employees. You know, this is an interesting thing. These things also seem like they should get bought up by different companies, but maybe not. Maybe they should be separate. What do you think of this company? I'm thinking this is probably inexpensive. I had never heard this about this company until just now, but I'm immediately drawn to it because there's a few things, the three things I hate most in my life are shoelaces, keys, and passwords. I don't think I've ever remembered a password. I just, all day long, I sit there getting new emails to re-verify or get a new password.

But anyways, it sounds like the only question I would have here, I bet it's a great business, 100,000 paying. So what do they pay? What do you pay each year? It's not small. I feel like $50. I don't know. Okay.

So let's say it's $100,000. That would be only $5 million a year on a $7 billion valuation. This sounds to me like a really interesting business, but here's the fear. The fear is does it become a feature that another player just kind of turns on? Well, Apple kind of has it, right? Apple has it, tries to provide you with passwords, you know, those long things. Do they? Yeah.

Yep. They want to double their size. They want to double their size in the password management systems. And it's a Canadian firm, by the way. My advice to these guys. FYI. It's Canadian? It's Canadian.

Oh, well, we hope they win. Okay. Go ahead. Invest. Everyone should win. Okay. Go ahead. Invest. Everyone should invest. Yeah. No, look, the only advice I would have, I was speaking to a friend yesterday who has an interesting business.

It's kind of a restaurant lounge slash membership kind of Soho house kind of thing. And we were talking about raising money. My advice to the entrepreneurs here would just simply be if you're going to raise money at $7 billion on what is either a five – it sounds like, I don't know, $100,000 at $50. I don't know. Maybe it's more. I mean, they're trading. Anytime you're raising money at like a massive multiple of revenues, unless you're already independently wealthy, and this is the lesson entrepreneurs, take some money off the table. If there's excess demand for the round, which probably will be here because it sounds like the lesson entrepreneurs, take some money off the table. If there's excess demand for the round,

which will probably will be here because it sounds like a hot company, put some money in your pocket. So I can't speak to the valuation, can't even speak to the business. All I can say to the entrepreneurs is take some money off the table. That way it's a win no matter what happens.

Because to me, based on what you said and this valuation, this feels vulnerable to me. One of the things is, it was a consumer password company for people like me. But now it's really focused on businesses. It's 100,000 companies, including Slack and IBM use it. Oh, that makes sense. And so that's where it's going to be doing that.

And the CEO, Jeff Shiner, said humans are not built for security. You make it simple for people to stay safe online. Obviously, again, if you have an iPhone, it has a password system, but I don't even understand. This is the one area that, you know, he's talking about this, the simplification of make it easy to forget the complexity of security really, to me, is a huge opportunity. I just, I sit there, it's the one place where even 1Password, which I think is one of the easier ones, I'm still confused by it. I just am like, you know. And what's interesting is their investors are really sort of top level.

Iconic was one of them. Just came into this C-Round, Lightspeed Ventures, Tiger Global, and Accel, which was a previous investor also. These are sort of top level venture capitalists in here. Revenues is supposed to come in around $150 million. And businesses now account for 60% of its revenue, which is interesting. So, $150 million, it's an enterprise business, so it's trading at about 40 to 50 times revenues. Does this say what the growth is? No, they did not. Here's the interesting thing. This

is from a CNBC story. Firms are charged from $7.99 per user per month, while one password's consumer customers pay $2.99 a month for access. There is a monthly one and a yearly one. It's not that much. It's actually not that much. I thought it was more than $2.99. But it's one of the biggest security fundings, you know, which is interesting. And I still think it's an enormous opportunity. There's a bunch of others like LastPass. I've tried all of them. But I do think it's either an acquisition target or something else, or that this is an area that should be separate. But security solutions are only going to be more and more important. They have,

you know, there's going to be biometric stuff. And that's not as secure. It's not as secure as complex passwords. And obviously, as you know, from talking to any security person, these are broken instantly. So I don't know, I think it's both an opportunity and also, you know, how can it grow when there's these giants sort of running the show? Anyway, there you go. Look, what I clearly got wrong was I was assuming it was an all-consumer business, and it was 100,000 paying consumers. Obviously, what this is 100,000 customers, including places like Home Depot, right? That it's enterprise 60%. I'm, you know, and this is whenever I talk to people, whenever I hear about multi-billion dollar valuations at 30 to 50 times the revenues, I'm always like, sell. This is, it's because I'm always a half

glass empty. But the thing you said that strikes me is when I think about biometrics, I think about clear. I would like an invasion of privacy as long as there's regulation on top of it that ensures they're not doing anything weird with the data. I would like to go back to where we were in the 70s, where I could walk my dad literally to the plane at Orange County John Wayne Airport, and there was no security, no boarding pass, and they basically just scan your eyes and say, okay, this is your seat, and maybe they communicate to you through your AirPods. And whether it's vaccination status,

reservations at a restaurant, I'm all down. Walking, going in, grabbing a pair of antenna shoes and leaving the store, and you're automatically billed because it scans your irises. And then it says into your AirPods, a pair of on shoes, $129, or you leave a restaurant and they say, what would you like to tip? I think there's an enormous opportunity for convenience around biometrics. I'd like clear to be distributed everywhere. I think it's really powerful because you go to a Premier League soccer game or a sporting event, and it just takes so long to get the right,

bring the stuff up on your phone, get the tickets. And it's also, it's stressful. Anyways, I think biometrics and security and simplification are enormous opportunities. But gentlemen, add passwords, sell. The dog says sell. I say it's a good opportunity. Anyway, all right. Well, that's where it's going to go. Next week, you know which one we're going to do? Tom Brady's new NFT startup autograph, which got $170 million from people like Andreessen Horowitz and others. We'll talk about that. It's got some. Andreessen Horowitz that's trying to decentralize the world so they can further centralize power and wealth.

Yes, exactly. Kleiner Perkins is here. FTX is Sam Bankman-Fried. And The Weeknd is involved in this one. Weeknd is so talented. That guy is so talented. That's going to be our next week's autograph. Tom Brady's so dreamy.

He's dreamy. Don't be investing in someone's dreamy. Nobody listen to Scott's. That counts for a lot. That counts for a lot. Dreamy does not count for anything.

Anyway. They're more likely to be successful. Hate to say it. You heard it here. Okay. All right, Scott. We're going to pivot

to a listener question. You've got, you've got. I can't believe I'm going to be a mailman. You've got mail. This one came in the email, so I'm going to read it a listener question. You've got, you've got, I can't believe I'm going to be a mailman. You've got mail. This one came in the email, so I'm going to read it. Hi, Kara and Scott. Notice they said Kara first.

You've talked about startups that need to go vertical to improve things like- You mean pivot with Kara Swisher and Scott Galloway, even though that's not alphabetic? You talked about startups- Not that I've noticed that. Well, you've talked about startups that need to go vertical to improve things like shareholder value, cost efficiency, and competitiveness. You've also talked about companies like Amazon or Google who are too big and stifle innovation by buying smaller companies. How do you determine the threshold between a company that's too big and one that needs more vertical integration?

Is that something that needs to be regulated? Love the show. Neil from Alberta, Canada. That's a Scott question. Go for it, Scott. from Alberta, Canada? That's a Scott question. Go for it, Scott. The two moves that have created more shareholder value than any business or strategy moves in history are one, the recurring revenue bundle where it's Amazon Prime or Apple Arcade, whatever, a move to recurring revenue is what Adobe did. It massively takes your company from a transactional

business to a relationship-driven business. But the second is verticalization, where we've been talking a lot about this. And I always say to companies, the moment you feel you're in a moment of capital power, and this is a good lesson for every company right now, map out your entire supply chain from where you get the resources and the products and the materials to where it's manufactured, to where it's assembled, to how it's distributed, to how it's sent to the DC, to where it's retailed, to how it's supported, how it's returned. Ask yourself where you are in that supply chain and if you should be thinking about forward or backward integrating. Because in the 80s, the most creative move in retail was going into private label. When Walmart said,

we can come up with a cola that's 90% as good as Coca-Cola for 40% of the price. And JCPenney said, we can come up with a denim brand called Arizona that's 80% as good as Levi's for 50% of the price. And they built a billion dollar denim franchise. And then you look at Apple

forward integrating into retail. I mean, verticalization, if you, in an exercise I like to do with companies, I was on the phone yesterday. I don't think I'm speaking out of school. I don't think they care. I don't think they care. I was on the phone yesterday with Canada Goose, which is a brand I love.

And I'm like, okay, if Canada Goose has a $4 billion market cap right now. Right? Yeah, the coat people. Very expensive coat. Canada Goose, yeah. I have one. They're wonderful coats. You have one, right? I've seen your one. I Goose, yeah. I have one. They're wonderful coats. You have one, right?

I've seen you have one. I have one, but then I've decided to wear my Zara one because it's more comfortable. But go ahead. It's cheaper. It was cheaper. I've seen you in that Canada Goose. It's like, how about some Cara with your jacket? It's a Zara.

Literally, it's a little head. It's a little poof of hair. I like the Zara one better than the Canada Goose. But go ahead. Keep going. You're offending me. Anyways, they're good people, and they're Canadian. They're headquartered in Toronto. They're good people. So Canada goose, go through the exercise of saying, all right, what if you had a crystal ball and it said,

Canada goose, you're worth 15 billion now in three to five years. Your market cap had quadrupled. And then you had to guess what had happened, what series of actions took place that quadrupled our market cap. And I'm like, well, what if your growth was supercharged? I'm like, yeah, that might double your stock, but it wouldn't quadruple it. Well, all of a sudden, outerwear became hot, really hot. I'm like, yeah, that again wouldn't quadruple it. shareholder value, is when you take a transactional company and move to recurring revenue, or you take a company that forward integrates into retail or reverse integrates into producing their own products. Verticalization and recurring revenue bundles are the only way you can kind of 3-5x your

company. So I think it's something every company should constantly be thinking about. Then when is it too big, then? How does it stifle innovation when they buy these small companies? Well, that's more the Lena Kahn question. That's a different question. Vertical mergers was of discussion between the Justice Department. They're on the same page, they say, about vertical mergers.

Yeah. Yeah. It's an interesting. How should we vertically integrate, Scott? Well, I don't know. We could have an event in Miami. Hello. Is that vertical?

No. Hello. We're in events. We're in events. Oh, I think we should make our own headphones. I don't know, verticalization is what we should do. Anyway. Really? No, that's a tough business. I know that, but let's vertically integrate everything. You and I know nothing about technology.

I know, but let's vertically integrate. That should be a pickup line at a bar. Would you like to vertically integrate? I guess it would be horizontally integrate. Anyway, sorry, what? The way we would verticalize, we'd be more horizontal. And that is we would go to adjacent products and content. For example, we could start a newsletter. But probably the more obvious one is the one we're doing, and that is forward integrate into events. The other thing we could do is reverse integrate and be a platform for other podcasters. But it's something, whenever you get to a point where you have additional capital and brand momentum, you absolutely want to be thinking about verticalization. Because the only way you maintain the kind of margins that we all want for outsized valuations is to control more and more of the experience. Yep, that is fair. But I think it's something that every company, small, medium, big, should be thinking about

every year. Let's map out our supply chain and all that. The supply chain, if you really think about COVID-19, the real impact of COVID-19 is that every company and supplier has totally rethought their supply chain because all of a sudden you wake up and you can't get stuff out of Shenzhen or it's stuck on a ship or- Well, you're not going to have a pandemic every 100 years, right? Although, you know, at some level you're like, yeah. But a crisis is a terrible thing to waste. This is an enormous opportunity. You can also overprepare.

Or even thinking about your own supply chain. You can have a lot of fun with this. What is your supply chain for renting your human capital to the organization? How do you get there? What do you do to prepare to get there? What's the certification? How do you interact? How do you get there? What do you do to prepare to get there? What's the certification? How do you interact? How do you deliver that product?

And now look at how it's changed with remote work, with unbundled education, with competition, with new ways to rent your human labor and say, how should I be thinking about the supply chain as it relates not only to my own human capital, but my own happiness? Constantly thinking about my supply chain. I am. And also, I have a lot of toilet paper, just so you know. Anyway, that's a great question, Neil, from Alberta, Canada. My supply chain is excellent there. Send us more. If you've got a question you're curious about, go to nymag.com slash pivot

and submit it for the show. All right, Scott, one more quick break. We'll be back for predictions. Thumbtack presents the ins and outs of caring for your home. Out. Uncertainty. Self-doubt. Stressing about not knowing where to start. In. Plans and guides that make it easy to get home projects done. Out. Word art. Sorry, live laugh lovers. In. Knowing what to do,

when to do it, and who to hire. Start caring for your home with confidence. Download Thumbtack today. 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 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. Okay, Scott, give us this week's prediction. I have none, except I keep saying Pinterest is going to get sold. That's all I say.

I think we should create a theme here, and that is what I'll call the 70% off bin. And you said this around Pinterest. I've been saying it forever around Twitter. But when you have a certain class of companies that have doubled or tripled in value, whether it's a payment platform or whether it's Salesforce, and then you have other companies that are 70% off, like a Peloton, a Twitter, a Pinterest, then what you effectively have is these companies. a Twitter, a Pinterest, then what you effectively have is these companies, in terms of those companies acquiring those companies, those companies are now 90% less expensive. Because if Salesforce were to acquire Twitter, it would be a 10% dilution instead of a 40% dilution four years ago. And so I think my prediction is, I just want to throw another one in the 70% off bin, that it would be of real strategic value. All right. The Filings Basement.

What is it? What's in Filings Basement? There you go. It's Roku. Oh, you said this before. It's still not cheap. You thought they'd be a buyer, though, before. Is that correct?

They still might be. My prediction last year was they were going to be a buyer or seller, but they topped out at about $500 a share. They're now at about 180, but they have about a 56 million person customer base. I think Comcast is 30 million and trades at a quarter of a trillion. And what you want here is you want either the content that's so powerful that it differentiates the distributions, such as the acquisition by Microsoft, who has the distribution but went and got fantastic content with Activision. Or you want distribution that's so powerful that you can benefit or advantage certain content. And it just strikes me, Roku, with 56 million households that have these things and at a market cap of $24 billion. It seems to me that either,

I mean, there's a lot of players that could benefit. Let me throw out a weird one. Walmart could buy Roku. Walmart is, I think, the largest seller. They have so many roads. All those people leave them. Walmart is the largest retailer of televisions. What if they were to bundle Roku? They also, no one talks about it. Walmart has its own streaming network. What if Comcast bought Roku? Roku right now represents massive distribution and influence across 50 million households, and it's 70% off its high. And also, I think the acquirer that's going to announce something big, I guess this is sort of a prediction 1A, Comcast needs to do something. And it has a quarter of a trillion dollar market cap. What are they doing over there?

And it's a very impressive company. Lovely guy, I have to say. One of the more. Is he? He's so polite. I've never, you know, I went from Rupert Murdoch to Brian Roberts and I couldn't, such different people. What a gentleman Brian Roberts is. Not that Rupert Murdoch to Brian Roberts, and I couldn't – such different people. What a gentleman Brian Roberts is. Not that Rupert's particularly rude, but he's just –

Is he Canadian? No, but he's just – for someone who, you know, he grew up rich and he inherited his company. He's done a lot with it, obviously, very much like Rupert did a lot with it. Biggest company in Philadelphia. A lot of – both of them took strong businesses of their fathers and built it into bigger things. But I have to say, he's a gentleman. And it doesn't matter at all. It doesn't matter.

But I'm saying, you're right. What are they doing? Let's go. Let's go, Comcast. Gotta move. So it always, you said something that struck me. It always blows me away. And you're one of these people, when I meet rich kids who work really hard.

Yes. Because if I'd grown up with money, the only two things I know would have been in my life are a Range Rover and a cocaine habit and sprinkling a few male prostitutes. I am so impressed with people like you and Brian Roberts. And I meet these people all the time that grew up with money and still work hard. I don't know what you're thinking. I don't know. I don't know because my mother didn't impress us. And my brothers are also very hard workers. Yeah, your brother's a baller, too.

Both of them, actually. And your other brother, the coal guy. Yeah, he is. He really is. They're hard workers. And my kids are hard workers. Louie, I was so impressed. What was...

Louie worked so much this year. His work ethic was... It must be ingrained in our family or something, because... Well, but that was what I was going to ask. And I'm being very serious now. Yeah. Can you distill it down to one attribute that was in the home that created... I mean, this is literally the book

we all want to buy as parents. What is the secret sauce for instilling grit? I won't even call it character because I don't know, you know, that's a different ball of wax. But in terms of working hard and really going for it and making the kinds of sacrifices. I was a little worried about my kids, but then Louie turned out to be such a hard worker, such a good employee, such a, like, really goes the extra mile.

I know, I know. They're amazing. No, but no, I'm just saying I was surprised because I thought I was worried about that. I don't know because my mom was not a big pusher of us working. She wasn't like standing over us saying, study, study, work, work, work at all. So there was no pressure there. My dad, of course, came from almost nothing and worked his way up, but died very early in our lives. Hard worker, but from nothing. Again, you know, he was sort of the more typical kind of, I'm going to make it, you know, from my modest upbringing. Not poor, but modest. And I don't know. My grandfather came from a poor background, worked his butt off, and made a lot of money. So that was, again, he was more typical. I don't know what it is. I don't know why my brothers and I work so hard.

I don't know. I don't think anybody does. I don't know. We just like it. We like it. We found things we like, actually. My older brother loves medicine. He would have been fine in technology, too. I love what I do. And my little brother loves law, I think, or business and stuff. So, I think we love what we do. I have no idea. That's the brother we want to meet. That's the brother we want to meet.

Yeah, we'll never meet him. That's the guy we never meet. He won't meet him. Unless he comes down. He drives down to Florida. Who knows? He's not. He's shy. He's a shy one. Jeff and I have all the look at me-ism. So, anyway, he's super smart. He's super, super smart. And despite our political differences, he's a lovely guy. Anyway, okay, Scott.

How big of you to overcome his political affiliation and just be his sibling? No, come on. You've really grown, Kara. He's way too smart. My mom, I'm going to give her a pass because she's like hopped up on Fox News. My brothers should know better. She looks good. She looks good.

She's stylish. That's important. I heard her and Tom Brady are starting a company. She is within miles of you. Just remember that. She is there and she has landed in the sunshine state. So just be ready. No, don't tell her to come on by.

We don't want her in a car. Uber is the only thing she's allowed to do. Anyway, she's there. And I was like, so how is it? She went, eh. She's never happy anywhere she is. How is it? It's okay.

You've abandoned me. Yes, you could. Look at the ocean. It's beautiful. It's lovely. I did. Why do you care? Anyway, Scott, that is the show.

Are your kids hard workers? Do you imagine they're beginning to be hard workers? Sure. You work like an engine. I mean, a working engine. I think about this a lot. Yeah. If anybody wants to believe, or if, you know, the big argument in raising kids or just in evolution or biology

has always been nature versus nurture. That's always been the argument. If you ever want to fall on the side of nature, just have two kids. Because I have one kid who's something out of a Hallmark Channel movie, literally comes in in the morning. This morning, he asked me if I wanted him to make me breakfast before he headed off to school, carrying a backpack that was like 300 pounds because he studied so hard. And the other one will come in and it's no joke. He's literally a terrorist, constantly assessing the household

for weaknesses and vulnerabilities so he can strike. And it's like, how did, I mean, we just haven't treated them that differently. So it is, I mean, you can manicure around the edges, but my sense of children is they just come to you. Something in the batter. I think so too. They're just hard workers. That's what

I think. I think it's just the way people are. Something or other. Who knows? Who knows, Scott? So my nicknames for them are the terrorist and favorite. Is that wrong? Is that wrong? Do not do that. Do not do that. That's the show. We'll be back Tuesday for more.

And again, we'll be in three weeks or so. We'll be in Miami. So sign up for our lovely conference. It's going to be great. We have some great people coming. All right. Read us out, Scott. Today's show was produced by Lara Naiman, Evan Engel, and Taylor Griffin.

Thanks also to Drew Burrows, Mia Silverio, Ernie Andretat, and Janine this episode. Make sure you subscribe to the show on Apple Podcasts. If you're an Android user, check us out on Spotify or, frankly, wherever you listen to podcasts. Thanks for listening to Pivot from Vox Media. We'll be back next Friday for another breakdown of all things tech and business. Pivot Miami featuring DJ Soul, David Solomon, and DJ Galloway, or my stage name, Post Facts.