Pivot - Uber is 'disruptive and drunk', weWork is 'just drunk', and Pivot turns 1!

Episode Date: September 20, 2019

Happy 1st anniversary to Pivot! Kara and Scott talk about weWork's halted IPO (we'll take partial credit). They talk about Amazon manipulating its algorithm to present more of its own products in search. Facebook is making its own "Supreme Court", is it just a band-aid? Should Kara Swisher be one of the Justices? (Yes). Fail: Trudeau -- and the (STILL) Governor of Virginia -- wearing black face. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Today's show officially marks one full year of Pivot. In that time, Scott and I have talked every week from studios in Nantucket to basements in Paris and London to live stages at South by Southwest, and it's always been audio magic. But of course, this week, to celebrate our first year, we've had our first technical snafu, and Scott, through no fault of his own, had to call in from Florida. So bear with us this one week, because our sound quality isn't quite up to Pivot's standards. Thanks for hanging in for all of our antics and hijinks. So without further ado, here's the show. Hi, everyone. This is Pivot from the Vox Media Podcast Network. I'm Cara Swisher. And I'm Scott Galloway. And Cara, I'm locked and loaded and just waiting on instructions

from Saudi Arabia on what to do next. I can't believe you said that. You're waiting from Saudi Arabia? Oh, God. Just like the president, I'm waiting for our allies, the Saudis, to tell us what to do next. Oh, my God. There's actually a really disturbing story about the whistleblower. I think that's going to be interesting. We're going to have to talk about that next week.

Yeah. It's developing. But we've been experimenting a lot on the show recently, going live, bringing on guests. But today, Scott, today is Pivot's one-year anniversary. You remember. I remember. It's so nice. You know what?

The reality is I don't think anyone else in the world could put up with your shenanigans or tolerate my awesomeness other than each other. I think that's opposite. If you want to turn that around, Black Spider-Man, it's just like it's opposite. Like you are shenanigan full and I am here to pull you in. I think most people feel that. I think most people feel that that is what's going on here. And in all seriousness, there is no one in the world I would rather offend for the rest of my life than you. Oh, well, thank you so much. You know, people have literally – I was at a parent-teacher thing last night at the school, and like three people were like, you and Scott, aha, like on and on. I was like I don't like being at those things in the first place, but I have to say people like our little game, our little witty banter and stuff like that. Yes, we are – hashtag we are awesome.

We are awesome. Which we remind everybody of all the time. But listen, we have done a recap. So behold this mighty recap of some of our timeless banter from our first year of our podcast, Matrimony. Scott, where are you? Rebecca Q. the Wagner. That's right.

A quick shout out to my dozens and dozens of messages. Bitches, I am back. Oh my God. Liberating you from thoughtful conversation. It's the General Gestalt. You know, they say the saying is, if you're not paying for something, you are the product. And that's how they treat us.

They treat us like a product that's inanimate. And I just, they aren't showing a certain level of respect, I think, for their consumers. I was talking to someone pretty high up at one of the tech companies who isn't one of those social platform. And they're like, you know, what's amazing around the world, like in New Zealand and Australia and Europe, they're already like making moves about how to fix this. And like, here we're just deciding whether it's a problem. But that's the myth, Kara. It's ridiculous. I would agree.

I didn't think of that. I'm like, you're right. They're like debating the problem. And then not telling you about these breaches to me is, again, the same problem that there is not a federal law that requires immediate, immediate disclosure of these hacks. You and I are doing an off-Broadway show. We are? What's it going to be? Sing songs?

Oh my gosh. Guitar? She's a lesbian journalist. He's an angry, depressed professor with erectile dysfunction, and their wacky neighbor is Evan Spiegel. Come on! You'd buy tickets for that. I don't think so.

You'd buy tickets for that. Sad, sad. That's a sad play. All right. Fails. Wow. I'm sort of speechless. I don't know what to make of that.

I'm speechless. I don't either. I don't know what to make. I don't know if that, was that a low light? Are they trying to get us canceled? Did some editor say, let's shit in the pond here and make sure there's not a year two? You know what? Your Wagner thing. What's your music theme for this year? Wagner, whatever. What's your music theme for this year? Oh, I'm

kind of going down with the DJs. I'm in the midst of like a Bezos scale midlife crisis, so I've decided I like DJs, which is totally ridiculous. Really? Calvin Harris is my new man. I'm really into Calvin. What do you listen to? What does Karis Wisher listen to? Whatever that my sons are listening to. It's often hip hop. I'm really into Calvin. What do you listen to? What does Kara Swisher listen to? Whatever that my sons are listening to. It's often hip-hop I don't understand. That's really pretty much it. They get, you know, they last. The other night, they put on some old song.

Like, we have Sonos in our house, like, in the walls, essentially. And they just put it on in my room all the time, and that's what I listen to. But in general, country music, Scott. I like country music. You listen to country? I do. I love country. I don't just listen to country But in general, country music. Scott, I like country music. You listen to country? I do. I love country. I don't just listen to country music.

I love country music. Oh, my gosh. I would not have guessed that. Jesus take the wheel. Jesus take the wheel, Scott. That's all I have to say. Fantastic. Anyway, I'm going to give you kudos because of WeWork.

WeWork. Let's roll the tape of your prediction of yours has come true. If you look at WeWork, WeWork is now, by a lot of analyses, the floor they own in a large building is technically worth more than the building itself that it leases that floor from. And it's hard to see what kind of network effects or technology. Too good to be. Yeah, it just doesn't. I think WeWork is going to be in the news for all the wrong reasons.

That was January. That was January. There you go. That was January of this year. Scott, you have to say your big word. Gangster. Oh, boom. That's right. Thank you.

B-double-O to the M. Hello, fans. That's right, ladies. Watch this shoulder. Spread a little, Scott. People are literally giving you a lot of credit for taking this down. I get side credit, but you're getting all the big credit for taking this thing down. No, you know who gets credit? Who? Or. I get side credit, but you're getting all the big credit for taking this thing down.

No, you know who gets credit? Who? Or what? You know what gets credit here? What? Math. Math. This was just great.

Anyone who could do math said, okay, this makes no sense. But it's been, it's been actually, we got, Aswath Damodaran, my colleague at NYU did a fantastic analysis of the company, but probably more than anything or any topic I've written about or spoken about, I've gotten more attention or inbound inquiries and more press attention on this. And then you kind of – you weighed in.

But it's been a really fascinating week. They pulled – it's gone – think about this. It's gone from $47 billion in value to less than 10. It's probably more like five right now. So what we've seen in the last 30 days is arguably the greatest shedding of shareholder value of the last since... Well, just one shareholder, right? SoftBank. Like they're the ones that bought in big and maybe some, I don't think there were others, were there? Well, there's quite a few investors or people that are impacted,

ranging from J.P. Morgan to Adam Neumann to the employees. But you just touched on what the next shoe to drop here, and that is the stories that are going to start coming out are the impact this is going to have on SoftBank. Because SoftBank's two biggest investments from their vision or their first vision fund were Uber and WeWork. And someone's going to start marking their book. And already one of their largest investor, the sovereign from Saudi Arabia,

has said that they're only going to reinvest the profits from fund one, i.e. zero. That's the most polite way of saying we're not investing in Vision 2 fund. And also the Mubalada, I'm sure I just massacred that fund out of the – I think it's the UAE – said that they're reducing the size of their investment or their commitment for a fund too. So this is eerily reminiscent of the 80s when everyone freaked out about the Japanese coming in and buying studios and golf courses the same way everyone's been freaking out about this's dirty money coming in and you know what they're kind of the best revenge is they lose money yeah exactly and that is they're probably going to lick their wounds and go home so we're probably going to kick this money out accidentally by showing them really really shitty returns at the hands of charismatic kind of gross you, you know, charismatic, idolatry-driven founders who take money, take a billion dollars and turn it into 50 million. Well, what I want to know is the due diligence.

You know, I have to say the Wall Street Journal has been doing a great job on this. They wrote a story today about this pot smoking, which I thought you might like that part of the equation. He was on a plane, and I think the lead is, you know, it was lit. No, really. He was high, really, you know, kind of thing, talking about smoking pot and running around the world in the equation. He was on a plane. I think the lead is, you know, it was lit. No, really. He was high, really, you know, kind of thing, talking about soaking pot and running around the world in the planes. And one of the things that I was struck by was one of the companies that I just even missed it was a wave pool company. He likes to surf, and he bought one of those companies that takes pools and makes them into wave pools. And I thought, where was the due diligence on any of this?

wave pools. And I thought, where was the due diligence on any of this? Like, where's the board? Honestly, you know, and they added, interestingly, Francis Frive, who was at Uber. And it's just, you know, who had been there under Travis trying to reform Travis, but which is, you know, a similar link. She's been on a board, but SoftBank has an investment in, but it's really quite, you know, Uber is one thing, because it's an economic issue. I don't think you think it's a this kind of thing, correct? I mean, differentiate them if you can. I mean, one, it's the economic business model is really problematic unless you raise prices. And even then, it's a problem, correct?

Well, Uber, to Uber's credit, what they both have in common is they're both shitty businesses with almost non-existent margins, which means that as they scale the business, they just scale the losses. So economically and structurally, they're both terrible businesses. That's what they share. What Uber has done, though, and deserves credit for and might be able to pivot or flywheel out a great business, is that it is truly an innovation. The ability to use software to connect these fallow assets or utilize these fallow assets that only get 4% utilization, known as cars, and then this excess labor force, if you will,

that's desperate to have part-time work, it really is a true innovation. And it has, I don't know about you, but Uber did have a real impact on my life. I think it impacts millions of people's lives. I wrote about this week in The Times Uber did have a real impact on my life. Sure. I think it impacts millions of people's lives. I wrote about this week in The Times. That is a true innovation. I wrote about not using cars.

And, of course, that's part of the many ways I transport myself right now. It's via Uber and Lyft and taxis and car sharing. So absolutely. But, I mean, here's the thing. SoftBank has all this money. And, by the way, it's not just these two companies. They were spending money around Silicon Valley. I mean, I had so many VCs call me, like, what?

They would offer $200 million and sort of if you wouldn't take it, they'd give it to your competitors. There's so much, not just dirty money from the Saudis, but, like, so much money. And even now, interestingly, the Saudis perhaps will have even more money with the raise in oil prices because of the attack that happened there. But how to clean this up? Let's talk about solutions, Scott, because right now the company said they're looking forward to our upcoming IPO, which we'll expect to be clean by the end of the year. We want to thank all our employees members. They said they're going to keep going forward. Yeah, that's a lie. Okay, I got that. Okay, so what would you do if you were Adam Neumann? You had fantastic hair, as you wish you did. What would you do right now?

Well, I'd grow it down to my waist and I'd pretend I'm Sharon. I'd totally cross-dress all the time. That's the first thing I would do. And I would love it. I would love it and people would love me. If I could turn back time. That's the first thing I would do. And I would love it. I would love it. And people would love me. Going back to your point, there is a difference between drunk and disruption. Uber is both disruptive and drunk. What WeWork and SoftBank are is drunk. And that is they believe that they can be disruptive forces by showing up with more capital and investing more money.

So SoftBank saw themselves as disruptive to the investment marketplace, and were coming in and blowing out of the water everyone from Andreessen Horowitz, DeKleiner to Sequoia by offering better terms and more money. What it ends up was that wasn't disruptive, it was drunk. WeWork came in and took out at least a floor in an office and invested massively and then charged a good price for the consumer. And it wasn't really disruptive. They did evolve the co-working office sharing experience, but it was more drunk than disruptive. So the markets are starting to discern the difference between truly disruptive and just drunk.

So what to do. Drunk, disruptive. That's the name of your next book. Move along. There you go. I like it. D squared. So what to do? Drunk, disrupted. That's the name of your next book. Go. Move along. There you go. I like it. D squared. So what do they do?

This is a company that could go public and call it 2022. The first thing is they either need to bring an adult supervision or a president with some or a COO with some credibility that can calm the markets and rein in what is what I'd call this sycophantic, very strange culture that the Wall Street Journal is talking about. The media is now in full pile-on mode going after kind of character assassination, which I don't like, but they've now decided that everything about this guy, he's no longer Jesus Christ. He's, you know, he's something much worse than that. He's Satan. So, but what do they need to do? Bring in new management or supplement, but what do they need to do?

Bring in new management or supplement the management. They absolutely need to bring in a real board that can pretend to be adult supervision and fiduciaries for all shareholders. They need to declassify the stock. They need to focus on margin expansion as opposed to growth. They need to go from a margin expansion mindset with a differentiated product as opposed to just a growth mindset. They need to reprice their options such that their key employees stick around. And they need to start reporting

more robust financials without all these bullshit, what I call fraud-splaining metrics. Scott, you're like a font of fascinating things today. But community-based EBITDA? Every academic in the world swallowed their tongue when they heard this shit. Earnings before everything is what they might as well call it. And not only that, get rid of all the shit, the we live, the

we grow, the we like what the fuck stupid brain fart I had today. That sounded like people sitting around a table and attaching things like we drinking, we go bars, we this. It's ridiculous. I could see a bunch of young, not very experienced business people sitting around coming up with these schemes, essentially their schemes. And then an adult conversation with their investors that says, all right, you fucked up.

You put in $12 billion. This is a nice company worth $3 to $5 billion that can build real value. We're going to go public in 2021. We are cutting the shit. We are focused on margin expansion. We're going to pretend we're a real business here and get everything back on track. It requires- But at the end, it's just a real estate rental business, right? I mean, I just like, so they can't really get to like anything even close to that. And then the competition, there's so many co-working spaces now like everywhere. And it's got a good brand. But they do have a brand. They do have a brand.

And if you do go into some, I have been into some of them and thought, this is a nice place to work. They have created something differentiated here. A differentiated product, can't command margins. It could be a company worth $3 to $5 billion. They've invested 12. They need some difficult conversations with their investors. They need to reprice, remark, recast, reprice the options, focus on margin of business. This company can absolutely be saved here. Let me ask you the key question. Will it do that? That's the correct question. I think it comes down to leadership at the board level. Who on the board actually has the sack and the perspective to say, do we want to go to zero or do we want to have a three to five billion dollar company that creates taxes, jobs, economic security for people and moves this market forward and is a real viable company? I think it's an open and honest conversation and to say, look, we got to put down we got to put down the crack pipe here.

Enough is enough. You know, a crisis is a terrible thing to waste. This is a crisis. This thing is not going out in the next couple of months or even the next year. But there is an opportunity to hit the reset button and wake up from, you know, wake up from the consensual hallucination that has taken place between the investors, the market and the management team and try and recast the thing. I don't know if it's going to happen. It has to happen from the board level. And obviously, Adam has to play in a role. Oh, and take the 10x voting shares down to 1x, boss. You're not 10 times as smart as your shareholders. Do you think I should do an interview

with Adam Newman? What do you think? There's been a push on the internet for me to do an interview with Adam Newman. They might do it. They might do it. I've inquired. I've inquired. I don't know if you're invited. I'll be honest with you. Yeah, I don't. I actually heard from a couple of people. What would you ask him? I'm trying to get an interview with him. Interestingly, the guy who I dealt with with Travis Kalanick many years ago is now working for WeWork. So I'm kind of bothering him, of course.

He's like, I'm sure he's like, Jesus Christ, this girl again. But what would you ask? What would be your very first question if I do manage to finagle an interview with Adam Newman? Like, I'm sure he's like, Jesus Christ, this girl again. But what would you ask? What would be your very first question if I do manage to finagle an interview with Adam Newman? After we light up a doobie, apparently. But go ahead. In 30 to 45 days, you've experienced the greatest destruction. You've ever seen probably what is one of the greatest destructions in shareholder value of the last 10 years. Granted, you were responsible for the runoff.

What have you learned and what do you plan to do? How do you recover? I think the obvious questions are the interesting ones. And also there's been, do you acknowledge that this kind of cult of personality that's infected Theranos, in some ways infected big tech, do you feel you suffer from that? Do you bear any responsibility for creating a culture where the idolatry and cult-like environment there led to a certain delusional nature that tried to ignore the basic math of business and capitalism? It's just, you know, there's a lot of fun questions to hear. And just be like, you know, I would hope at some point during the interview when he breaks into the power of we and collective consciousness, you say, boss, you're not here to enable people's consciousness.

You're renting fucking desks. Just stop. What if he cries? No, I'm kidding. I'm not kidding. Listen, we got WeWork. Pivot, have WeWork on our belt here. What do we need to fix next?

What do we need to fix? Oh, by the way, tell us about your interview with the tallest man running for president. It was very good. It was very good. It was an interview with Mayor de Blasio. I think a lot of people were like, okay, this was – like I don't live in New York. I know people hate him. Like I know there's all kinds of issues around him in New York.

I focused on subways, transportation, facial recognition, the things that I want to know about. And actually it was a really interesting conversation. You know, he tries to be a charmer. That's his whole thing is I'm so charming, but it's so obviously charming. He's trying to be obviously charming. And he is, you know, I think he doesn't, I think he needs to talk more to the New York City press corps, which he doesn't do. You know, I think they don't like that he works out in Park Slope all the time and doesn't do enough mayoring. So, you know, it was interesting. I think you'd find it fascinating. I went a different direction because – and I did say I just don't think you can win.

Like I don't know why you're doing this. And his answer was why can't I? Like I don't know what to say to that. Okay. Why can't he? Sure. He's got a job running the 11th. I know.

That would be – that was the answer I made. But nonetheless, it was interesting. The stuff around – the two things that were interesting is he was not so much for less cars. He was worried about the elderly and things like that. That was his concern. And then he was not so much against facial recognition. He thinks it's useful as his police chief does in a city like New York under constant threat of terrorist attacks. So interesting.

Agreed. Interesting. It was interesting. I had a good time with it. I had a really interesting time. And speaking of power men, I had an interview with Steve Schwartzman, the highest paid investor ever, very close to President Trump. I couldn't get him off that President Trump had been much maligned part, which is exhausting to him not blaming the Democrats for everything. But he did have a really interesting discussion about teachers being tax exempt, teachers' salaries being tax exempt, and also a $15 minimum wage, which was

cool. The richest guy, the highest paid guy wants everyone to get $15 an hour. But listen. Yeah, I think, I love that stuff. But, you know, what conservatives would say is, and he is a conservative, is that people find their woke values after they've banked their $50 billion. Yeah, yeah, he gets it. Anyways, it's the right move. The one thing I would ask you— He's a complex character because a lot of his philanthropy is really quite amazing.

At the same time, his almost ridiculous defense of Donald Trump, I can see why he wants to support him for tax reasons and everything else. But, you know, and we talked about that a la carte idea. Like, I don't like everything he says. I'm like, it's not an a la carte presidency. You have to take the whole, you know, orange ball of wax, in my opinion. Orange ball of wax. Well, you have to post to Twitter today a picture of you and de Blasio. Okay.

You guys must look like a different species. I shall do. We didn't stand next to each other because he's so frigging tall and I look like a hobbit. Oh, I love that. You walking around. My favorite TV moment of the year was when they filmed you and Mark Benioff walking around the Salesforce office. He looked like he was about to eat you. I mean, you literally looked like – Listen, I want to get this –

He looked like Gulliver. In today's episode, which I'm praising you a lot, we had a bonus pivot episode where you talked to Jason Del Rey, who hosts Recode podcast, Land of the Giants, on whether Amazon should be broken up or not. By the way, Amazon Pay is not coming back as a sponsor because of Scott Galloway, but that's fine, whatever. So it seems appropriate to bring up this new Amazon story. It changed its search algorithm in ways that boost its own products. In the Wall Street Journal, again, reported that despite misgivings from its own internal engineers and lawyers, it recalibrated its search engine to further promote its own goods,

which is not great. 11% of all product views on Amazon come from sponsored listings. That's up three percentage points. And in 2017, the European Union fined Google $2.7 billion, the largest antitrust fine in history, for unfairly favoring its own services over its rivals. This is not, this was its shopping product. So this was really an interesting story. What thinks you of this? Go right ahead, because they're not coming back as a sponsor ever. So go right ahead. Well, this comes, as you would say, this comes as absolutely no surprise to the publisher, right?

So look, Amazon's not doing anything different. I did a bunch of work for Levi Strauss & Company in the 90s, and they were frustrated that they would advertise Levi Strauss & Company on sale to get people into a JCPenney's, They would advertise Levi Strauss and Company on sale to get people into a JCPenney's, and then they would put at the front of the apparel section with better lighting and better signage their private label Arizona, which grew to a billion-dollar private label brand, better margins. So any retailer doing whatever they can do to pimp their own private label where they get greater margins, that's absolutely nothing new. And like most things with Amazon, it's not that they're doing anything different than any other retailer. We've just never seen anyone do it this well and this rapaciously. Yeah, and seeing the data.

They get more data on everybody. We had the Away founders, and they're like, we're not selling on Amazon. No way. You know, no way. Even though it's a great distribution. Like, these are the Away luggage things. They're like, because Amazon's already doing ripoff versions of their products. Yeah, and I remember three years ago in the office, we got a bunch of Alexas and we started telling the interns to bark commands at it and then log what Alexa was

recommending around e-commerce. And we would ask for batteries, Alexa, can I have, you know, double E batteries? And it would say, it would recommend its private label. And then if you said no, it would keep recommending other basics. And then it would say, I'm out of ideas, even though it carried Duracell and Energizer. So Alexa Shocker has been programmed to have a selective memory. Right, exactly. Around other products. This is what your interns do? I'm sort of stuck on you having your interns yell at Alexa.

And then we take them drinking. And then we take them drinking. Oh, my God. And what do I them drinking. And then we take them drinking. Oh, my God. And what do we do, Adam? But it's not anything new. There is going to be – we're going to see some sort of legislation. Yeah, we're going to – something's got to happen here. It's probably like everything else.

Going to come out of Europe. What say you on this? I say it's a problem. I say it's a big – I think it's a bigger problem. I think it's a bigger problem than you think. I think it's related to products. I think they've got a lot of enemies from the big package goods companies. You know, everyone from Away up to the package goods companies. So they've got an array of people that could really turn some screws in Washington, for sure, and elsewhere.

And sort of FUD the situation. Interestingly, I had an argument with Jeff Bezos about this so long ago about end caps. I covered retail. And at the time, they were sort of insisting that they would never do something like end caps. And end caps in stores, of course, as you know, is you pay to be on the end cap of the supermarket, which is the end of the aisle because people buy stuff, grab stuff more there. And he was like, this is not something we'd ever do. And, of course, they ended up doing it. Like, you know what I mean, pushing their own stuff and everything else.

And I remember having an argument with him at a TED conference, of all places. But it's just, of course, it's naturally what they do, but the amount of data they have, the amount of access, the ability to block people, if they're seen as the only online platform, the only true online platform, they could be in, I don't know about break them up kind of things, but there certainly could be repercussions for the company, for sure. Oh, 100%.

So speaking of repercussions for the company, Mark Zuckerberg is in Washington. He has not called me for dinner. He had dinner with Senator Warner and some other senators. They actually sent out a press release admitting they had dinner. I don't know why. I got a press release this morning. I'm like, was Jeffrey Epstein there? Because otherwise, who cares if he has dinner, you know, with the senators. But one of the things he was talking about this week was the Supreme Court for the social media platform. And he wrote a blog

post, which noted the court will be an advocate for our community, supporting people's rights of free expression, make sure we fulfill our responsibility to keep people safe. As an independent organization, we hope it gives people confidence that their views will be heard and Facebook doesn't have alternate power over their expression. So, you know, I volunteer as tribute to be the Supreme Court justice, but what do you think about it? Is it a Band-Aid? It seems insane to me, but I don't know. I'd love to hear your thoughts. They'll fund it. I think it's, again, I think it's brilliant to lay an obfuscation, and that is they've modeled it after our government, and that is you have a president, Mark Zuckerberg, appointing a Supreme Court to deal with difficult issues.

They've even framed it like a Supreme Court. That's the analogy they're using where there's appointments and they're an independent body and they deal with tough issues. Except that Facebook appoints them, right? Well, exactly. But to be fair, the president appoints, but there's checks and balances around congressional approval. There's a Senate, yeah. But the problem is once, the nice thing about our Supreme Court is that once a justice is on the court, he or she cannot be removed, giving them intellectual freedom to do what they think is the right thing. And the notion and what you have here is this committee, they're just, and not only that, the decisions of the Supreme Court are enforced by people with guns and badges. And that's the two key things that are missing here is that one, at any point, Mark Zuckerberg can disband this thing and he's, you know,

he's dear leader for life. And there's nothing to say that these decisions will have any teeth. So I find this is brilliant, but it's just basically delay and obfuscation. So Mark Zuckerberg, whenever he's faced with issues around, okay, teen suicide has been directly linked to your gross negligence. And you've thrown your latest beard, your $2 billion beard, Sheryl Sandberg has kind of worn out her welcome. She's been kind of spent. So now we need a new beard. And the new beard is going to be this faux Supreme Court. And we'll talk about it. They'll make some decisions. And that way he can throw up his arms with really difficult issues around our elections being perverted or teen depression or hate crimes, and he can just

throw up his arms and we've sent it to our Supreme Court and I will abide by whatever they say as long as I like what they say. So, look, I think this is, again, more masterful delay and obfuscation. I think it's total bullshit. If they want an editorial, call it, you know, if you want an editorial oversight board like, you know, the New York Times has or something like that, good, I get it. But to pretend this in any way somehow addresses the problems in that you don't need to take responsibility for them or act on them. It's the same thing.

It's pushing off power. It's pushing off responsibility. I would be interested. What do you think if they put us on the board? What would we do? Trouble. All I can think about is the robe. I would just like to have that kind of robe and just show up and make a declarative statement. I want to sit at a desk higher

than everybody else and bang my gavel. I am so Sandra Day O'Connor. I think she's a gangster. All right, loosen up, Sandy baby. Remember that? Oh my God. Brains and empathy. She had one of the best stories last year about how she's taking care of her husband who's suffering from Alzheimer's or who's falling in love with someone else. I found that one of the most touching stories of 2008. I like Sandy, baby.

Anyway, Scott, we have to take a quick break. You're not going to be on the Supreme Court just so you know you're not going to get to wear a robe unless you just do it by yourself at home. When we get back, we'll talk wins and fails and predictions. Fox Creative. This is advertiser content from Zelle. When you picture an online scammer, what do you see?

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Judge Judy. I want to be Judy mostly. You're Judge Jeanine Pirro. You know, she makes like $11 billion a year. I know. I love that. She deserves every penny. Judge Pirro. That's who you should be, Judge Pirro, whatever, that lady. she makes like $11 billion a year. I know. I love that. She deserves every penny. Judge Pirro. That's who you should be, Judge Pirro or whatever. That lady. Man, I'm here to talk about.

Oh, my God. She's a nightmare. Let's do what we do best. Roast some big fails of the week. Scott, what have you got for fails besides WeWork? You've already chewed on that particular. My fail is what I'll politely term this asshole culture that's developed in D.C. My fail is this, what I'll politely term this asshole culture that's developed in D.C. as evidenced by Corey Lewandowski showing up, basically mocking the body that he wants to

join. And it just says, OK, it's like interviewing for a club and mocking the admissions committee. He sat in front of Congress or that committee on the first impeachment hearing, and he was so disrespectful. And it's like, let me get this, boss. You're planning to run for Senate. You want to be up there with them. And you're sitting there mocking them, being incredibly disrespectful. And it struck me that this is and Democrats are guilty of this, too. The D.C. is now a place to go be an asshole, to be strident, to make your point, to be ideologically driven and not to get anything done. Whereas at the state level, because of things like they have to balance their budget

each year, there's some level of comity, there's some level of consensus, there's some level of recognition that we have to work together. So I think what we're seeing is this bifurcation between people pursuing public service at a state level where they might be assholes, but occasionally they're prone to fits of sanity and bipartisan action, whereas literally D.C. has become come one, come all assholes who just want to make striding points. The Freedom Caucus. They're also all playing to the president. There was that other congressman who talked fast.

I was like, who is that? I don't even know. I don't want to say his name because I don't even know it. But it's like, literally, they're all like playing for just Donald Trump. And I was watching Lynn Duskin. I thought, what in the world happened to him when he was a kid that makes him such an asshole? Like, you know what I mean? Like, he thinks it's funny. He's like that prankish asshole that was always in school with you. There was always a guy like him when I went to high school and college and everywhere else and in workplaces.

No, actually, you don't have them in workplaces because they get replaced now. But it's a really interesting, like, weird... I have this feeling it's not going to end well for him in general. Like, I wanted to, like, fast-forward 20 years for this guy and then think, oh, no, no, no, this isn't... Yeah, no, I think, look, I think he has a future in the armed services where he's killed by his own troops. I think this guy is, I mean, he's such a difficult, you know, you can tell how you're getting older.

You know, it really offends me now. This is, in addition to thinking I might want to go on a cruise and, you know. No. One of the ways you can tell you're getting older. It really upsets me when people don't show some level of respect for institutions. It's just, okay, boss, you really want to break down the institutions that are helping take care of our old people, defending our shores. You really want to insult these institutions that have taken two and a half centuries and are arguably the most precious institutions globally. Sure, they have their faults, but they're the least bad of their kind. And by the way, you're planning to run for Senate? I know. You know, my son said he was

watching, he was watching one of the news things. And all he said is he looked and he goes, what a dick. Like, that's what he said. Yeah, perfect. And I go, anything else? He goes, no, he's just a dick. What a dick. Like, that's what I'm saying. So that's my lose. Okay, win? What's your win? My win is something boring.

It's the S1. And that is people are calling and saying, you know, what killed WeWork? And this is a real victory. This IPO was death by S1, and that is the disclosure here did its job. And that's when the shit hit the fan as people started reading through the disclosures and looking at the math. And they realized, okay, this thing doesn't make sense. And it's really, I think, a real victory because what could have happened here and almost did happen was that the markets maintained, you know, kept tripping on its ayahuasca or halcyon. The thing went public and you would have had this destruction

in value, but the cost would have been paid or the destruction in value would have been incurred by retail investors. So the S-1, to a certain extent, that required disclosure from the SEC in the form of a prospectus that educated the market, potentially saved retail investors 40 plus billion dollars of losses. So while I'm critical of the SEC, I think they're really more there to protect management than to protect investors. I think the disclosure documents that are required for a company to go public, which by the way, don't exist with many markets, did its job. The math showed up and said, we're going to protect the markets from this. And then as I said, the next big stories are going to be not only on SoftBank, but also, and we didn't talk about this, the

blast zone impact on J.P. Morgan. So my win is the disclosure and death by S-1. And our system does have some checks and balances, and I think it's a victory that saved retail investors tens of billions of dollars. Here's my win. Automatic, which bought Tumblr, run by a guy I like very much, Matt Mullenweg, who's going to come on Recode Decode. He just raised $300 million in Series D from Salesforce Ventures, a post-money valuation of $3 billion. I think he's slowly been building. I haven't looked at the numbers. I don't have them, but I think it's really interesting.

He's really been running that business for a decade or more, just slowly, quietly. I just like that kind of entrepreneur. I haven't looked at the numbers to see if it's worth what they're paying, but I certainly do appreciate someone who spends all their time sticking to their knitting and trying to build their business into a viable. I like that. I like that kind of personality. What does the business do? It does WordPress. It does WordPress.

It has WordPress, WooCommerce. They have all kinds. They just bought Tumblr. It's not very fancy, I'll tell you that. He's very interested in commerce. He has a lot of commitment to good journalism. We were on the WordPress platform when we were at All Things D and loved it. And, you know,

it's a nice product. I like when good guys win, I guess. I need to look at the numbers, obviously. I'll talk to him about I need to look at the numbers, obviously. But I'll talk to him about them when he comes on the podcast. But it was interesting. And then I think – I don't know if this is a win or lose, but Airbnb says it intends to go public. I can't tell in 2020 with a billion dollars in revenue.

But I think they definitely face a lot of headwinds in terms of what they're doing in neighborhoods. And I think Brian Chesky is one of the more laudable CEOs among this class, you know, someone who will face problems and discuss them. But he definitely has, you know, a lot of challenges of what impact Airbnb has on neighborhoods. I got an interesting tweet this morning saying they're ruining Amsterdam's neighborhoods because nobody lives there anymore and return of drug dealers and things like that. And so I don't know if it's a win or lose, but it'll be interesting, speaking of S1s, when we see that one, when that one comes out. I wonder to what extent those stories are being fueled by the hotel industry

that rightfully is upset that they have to pay all these taxes and then this company comes in and can basically... Oh, it pays taxes. They pay taxes. I just did something i paid a lot of taxes when i was using it um it's added in they pay hotel taxes and things like that they pay the same level of taxation that hotels pay it seemed pretty high to me i don't you know i don't know on the top of my head but there was definitely a tax element of my my payment and it was not small um so it just be just the idea of people clomping through previously regular people living

neighborhoods, right, and not staying in tourist, you know, kind of things. It'll be interesting. It'll be an interesting IPO. And he is someone, you know, this, again, this is a business that's super interesting from lots of points of view. And he's had ups and downs on executives there, but he seems to, he's a very intense guy. He's a very intense guy. It'll be interesting. It'll be interesting to see. So I hope it's a win.

I hope like both of those things are a win because I would like to see more really solid, as you say, companies – like you said. You said when you were wearing the Lesbian Zoo Tech and Lesbro shirt the other day, you know, it's the return of like businesses that are trying to make money and not growth, but really actually trying to build real businesses. You're a good influence. Any predictions? No, that's you, my friend. I don't predict things. You're the king of predictions. I predict you're going to make a prediction. There you go. So again, and I'm circling back to my, the earlier story, there's going to be a really big story coming down the pike around the impact on the blast zone of SoftBank. That's the big story here is the Vision Fund. I think the Vision Fund could be on the precipice of an implosion that makes the WeWork story look like an Easter brunch. It's just this is the world's largest investment fund right now.

Run by, not CSU Sun, right? It just reminds me, business like real estate is a bit of a local business. And it kind of has some really interesting implications. And I understand the lack of moral clarity around taking money or dirty money. But at the end of the day, in terms of our own economy and our own prosperity, there is an argument around cash their check, cash their check. And our revenge is, quite frankly, they come in with a dollar and they leave with 20 cents. And it props up or it gives American entrepreneurs the ability to go play in traffic and innovate. And when the Japanese start showing up and buying our TV studios, our movie studios,

and our golf courses, and when the Japanese again show up and start funding entrepreneurs, look out below. Because typically, it's like I have a lot of friends who once they made money in San Francisco in tech decided they wanted to be film producers. And I'm like, okay, but to be clear, you're not going to get your money back. The objective is just not to lose that much money. It's consumption. It's like gambling. Yeah, a lot of global investors have kind of America or entrepreneur innovation ambience, so they come in with large checkbooks, and it almost always turns out badly for them.

Yeah. They should just buy bonds. They should buy, like, treasury bonds. Yeah, right. Buy an ETF. Buy Vanguard, right? Buy an apartment in New York. They buy apartments in New York.

That's going down. Two luxury sales in New York are going down. It must be hard for you there, Scott. I'm kidding. Did you know that? Thanks for that. Thanks for that. No, but big luxury apartments are down.

Yeah, no. It's a perfect storm brewing in New York luxury real estate, but cry me a river. Anyways, so look, the big story here that hasn't been told yet is SoftBank's Vision Fund and what has really gone on here. It's going to be fascinating. Somewhere at the Wall Street Journal, the New York Times, someone's going through each investment. So six of their investments have gone public. Four of them are down since the IPO. I agree.

You could see this one coming. You could. 100%. 100%. You know, I do have a prediction. We're going to Canada next week. And I think Justin Trudeau is in big trouble with this brownface thing. Both a fail, by the way.

I don't know what you can do about things you did 30 years ago. But there's been a third picture of him. He seems to have enjoyed doing either black or brown face quite a bit. There's one video or two videos and two pictures, and they're quite – I went to look at it with my kids. We're like, how bad could it be? And then we're like, whoa, that's bad. That's bad. What's the context?

What was happening? He was at an Aladdin night party for one. And again, we were like, how would he just put some – like it is full. Like it's a crazy picture. It's like, wow, that took a lot of time to do that. And then another one, he's fully in black body, like black face, not just that. And then dancing around. My question to you.

So it's not good. It's not good. My question to you and the bigger story is do you think that's disqualifying? Do you think he should resign as president? I don't know. I don't know. I think, look, whatever you – I think it's terrible. It was 30 years ago, so I'm like, okay, you put that into it.

And at the same time, you're like, wow, you might have said it at the time, this stuff. He might have gotten ahead of it when all that stuff was going on in Virginia. I mean, that guy is still governor, right? I'm not sure it's disqualifying, but it sure is from a political point of view, because he's such a progressive. He's so known as Mr. Sensitive, like handsome, sensitive guy. I think that's where it hurts. It's like, just from a political point of view, it's problematic on every level. And it's a good thing, because Canada's sort of mixed. People are like, who cares? It was 30 years ago, and another group is like, what's the big deal if you do that? And then there's another group saying, this is a big deal. So I tend to go with the this is a big deal

group, but it's a problem. And we're going there next week. So we can talk about it live in Toronto at Elevate. It's supposed to be the south by southwest of Canada. And we have fans there, Scott. It's going to be, I'm really excited about it. I hope Trudeau survives this, mostly because I think he's dreamy. Right, okay. And I think that's a huge asset and a global leader. And also, my big geopolitical genius strategy was to prompt and go Trump into invading Canada and pulling a reverse merger where their leadership takes charge of our country.

That was my plan. I thought that we invade them, and then it's a reverse merger where their leadership takes charge of our country. That was my plan. I thought that would, that we invade them and then they, it's a reverse merger, their management takes over. Okay. So that's kind of ruined. Adam Neumann is dreamy and he didn't stop you from attacking him like a relentless hyena. But okay. All right.

Dreamy. A relentless hyena. You know what? The big dog went up to that purebred Afghan, smelled its butt, and said, this is a labradoodle. This is a labradoodle. I think it was all about the hair. I think it was all about hair envy, and you just decided that was enough.

That's what I think happened there. Anyway. He definitely knows how to roll on a golf stream, lighten up. This guy knows how to roll. You're just jealous you weren't invited. Anyway, Scott. 100%. This is a good week for Scott Galloway. It's a good week for Kara Swisher because this is an awesome first year of Pivot, Scott. I don't love you, but I really, really like you. How about that? I appreciate your credibility. I admire you. I admire you from afar.

There you go. Very far. I have warm feelings for you. I'm trying from afar. There you go. Very far. I have warm feelings for you. I'm trying to get something that's not quite love, but I have occasionally warm feelings for you. You know what my favorite moment of yours is? What? Hands down. It happened a couple weeks ago at that event when you said your favorite lesbian was Senator Lindsey Graham. I just love that.

Only you could say that. I am dying to say that, but only you can say that. Come on with that guy. I just can't. I'm sorry. I just can't. I can't even. I can't even, as he might say.

You know what I mean? I can't even. Anyway, Scott, it's been an awesome first year. We got to go. We'll see you next week in Toronto, okay? We're flying up there first class. We're going to rock the shit out of that fish. We're going to have some poutine and donuts and stuff like that.

It's going to be really fun. Maple syrup. I can't wait. Can't wait. I'll take you to a Leafs game. No. Best hockey in the world. I'm going in and out.

I have children, my friend, and I have more children coming, so I got duties. Anyway, today's show was produced by Rebecca Sinanis and Eric Johnson. Eric Anderson is Pivot's executive producer. Thanks also to Rebecca Castro, Drew Burrows, and Nishat Kerwa. Make sure you subscribe to the show on Apple Podcasts, and if you like this week's episode, leave us a review. Thanks for listening to Pivot

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