Pivot - Will Casper go public? How will Softbank’s latest fail affect Asia? And how will Sundar Pichai move Google forward?

Episode Date: January 14, 2020

Kara and Scott talk about Casper's S-1 and how it compares to other internet retail companies like Away and Warby Parker. We also get a rant out of Scott on Softbank's latest fail: their hotel chain OYO let-go a huge percent of their staff in Asia. In Friend of Pivot we hear from New York Magazine reporter Olivia Nuzzi about whether Congress or Twitter has more power to reign in Trump. In wins and fails Kara and Scott talk about the exit of Alphabet's top lawyer amid sexual misconduct allegations across the company. Also a Scott gets a surprise pop-quiz on Norwegian cuisine. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Support for Pivot comes from Virgin Atlantic. Too many of us are so focused on getting to our destination that we forgot to embrace the journey. Well, when you fly Virgin Atlantic, that memorable trip begins right from the moment you check in. On board, you'll find everything you need to relax, recharge, or carry on working. Buy flat, private suites, fast Wi-Fi, hours of entertainment, delicious dining, and warm, welcoming service that's designed around you. delicious dining and warm, welcoming service that's designed around you. Check out virginatlantic.com for your next trip to London and beyond, and see for yourself how traveling for business can always be a pleasure. to get your customers to notice you, Constant Contact has what you need to grab their attention. Constant Contact's award-winning marketing platform offers all the automation, integration,

and reporting tools that get your marketing running seamlessly, all backed by their expert live customer support. It's time to get going and growing with Constant Contact today. Ready, set, grow. Go to ConstantContact.ca and start your free trial today. Go to ConstantContact.ca for your free trial. ConstantContact.ca. Hi, everyone. This is Pivot from the Vox Media Podcast Network. I'm Kara Swisher. And I'm Scott Galloway sitting across from a very dapper Kara. You know how I can tell you've been on television? Hi. You wear makeup.

I have makeup. I have a lot of makeup on. I tried to take some off. It's disgusting. Yeah. I don't like it. Do you like it? Do you like my makeup?

I think makeup ages women. I do, too. I think I like it in some more wrinkles. I think that really attractive women, their sheer, like what I'll call beauty comes out when they don't wear makeup. Yes, I agree. They force me into it and then they slick back my hair. They just, I don't know what to do about it. There's nothing I can do about it.

Yeah, I would just grow it out like Cher and just show up and just say. Do you know what I'm going to do? I'm going to show up with my baby. That's my new plan. That's your new thing? On the air and I'm not going to say a word. I'm just going to walk on the set with my baby and see if they stop me. What do you think?

Yeah. I'm going to talk about motherhood. Like, hey and see if they stop me. What do you think? Yeah. I'm going to talk about motherhood. Like, hey, I'm a working mom. What do you want? Yeah, bring the baby. Bring the baby. Yeah, and everyone will totally freak out. That would absolutely freak out.

There'll be a national discussion about working parents. You'll spawn it. I'll spawn it. I'll bring Alexis Ohanian with his baby. I would bring Evan Spiegel and have him breastfeed the baby on live TV. That's how I think you create a national discussion. If we're really going to turn up the volume here.

Evan. Evan Spiegel. I just sound like he's as lovely as ever. Yeah. You like Evan. I do. I do. I think he's creative.

I like a creative person. And he started off as a big pain. Our first lunch, he was such an asshole to me. Really? He had complained about some dumb, stupid quote. I was like, you are so thin-skinned. You better get used to it. Get used to it, yeah.

You better get your saddle on and start to get some, you know. He should definitely take his money and just start a boy band. You think? Yeah. A Korean boy band? He's got those movie star good looks. He had that beautiful sweat t-shirt on that looked like it cost $4,000. Yeah?

Yeah, it looked good on him. So speaking of guys with good hair that should start a boy band, you created quite a stir this morning. You interviewed Speaker of the House Paul Ryan. Yeah. At NRF. I didn't interview him. I was on stage with the head of NRF interviewing us about tech and the economy and this and that. I did it with Janet Yellen last year, but Janet knew a lot more about the economy.

But he did okay. He was warned about me before it started. So just Janet Yellen of Berkeley? Janet Yellen, Fed chair. Yeah. Janet Yellen. She's one of the most impressive women of the last 50 years. He was prepared, though. Someone apparently warned him that I was trouble.

He's a smart guy. He is. He's very smart. His eyes are all fucked up, but he's smart. It was interesting because he was doing – someone said he was arguing Atlas Shrug while I was trouble. He's a smart guy. He is. He's very smart. His eyes are all fucked up, but he's smart. It was interesting because he was doing, someone said he was arguing Atlas Shrug while I was doing a sophisticated analysis of the tech and economic landscape around tech.

I think he was doing his typical, we don't need any regulation, it needs self-regulation. I think that's where he went wrong. The market will figure it out. Yeah, the market will figure it out. And the reason it hasn't been regulated is because Congress doesn't know anything. And I'm like, they don't know anything about lots of other industries.

This needs some regulation. They can't self-regulate. And then he was saying that Wall Street was self-regulated. I'm like, there's like a zillion laws and there's the SEC and all kinds of stuff. So it was interesting. He was interesting. I'm going to try to get him on the podcast because I think it's – I got in one dig about – he was talking about being – you've got to have a being down the middle and I was like that worked out

so well for you within the Trump administration trying to be compromising or thinking that you can change people on these sides right now. Yeah, him coming on your podcast is what you call a no-win situation. No, he's sharp. Like whoever lets him do that. No, I know he's sharp but his constituency, that does nothing for him. By the way, what does Paul Ryan do now? Well, he's a professor at Notre Dame.

He gave me a card, and it says former Speaker of the House on it. That's a pretend job. Where is he making his money? Is he a lobbyist? Is he on boards? I don't know. I don't know. But I think he's teaching.

He sure is teaching, and he lives in Janesville, Wisconsin, it says, Speaker of the House of Representatives 2015. So we got our revenge on him. He's in Janesville. Yeah. Damn you to Janesville, Wisconsin, it says. And it says Speaker of the House of Representatives 2015. So we got our revenge on him. He's in Janesville. Yeah. Damn you to Janesville. Yeah. He's – I bet a lot of lakes.

I think he's doing a lot. I'm sure he's doing a lot of consulting. I'm sure he's joined some – I mean it seems like the way people go – it didn't seem like he was going to run for office. Yeah. I think he was genuinely wanted out. He's the wrong guy for the era, right? This is an era of so many extremes and he's's sort of a reasonable, down-the-middle kind of guy. I think he's very likable.

Yeah. He's very tall. Oh, he's tall. He's very tall. I did not know that. Well, I'm very short, but he's very tall. Yeah. Yeah, he's way over six feet tall.

Did you get a picture of him with you? Yes, I did. We definitely have to get a Land of the Giants montage going with you with huge people. They're all huge. He's not Mark Benioff tall, but he's tall. He's not that big. He's tall. Like David Gregory tall? Oh, no. David Gregory is way tall. He's really tall. He's really tall. He's like Manute

Ball. Obama was really tall. Obama's tall? Very. They're all tall. All the big politicians are tall. Well, if you're tall and you have a deep voice, you can get your own podcast and be the dog. Trump is tall. Trump is tall? He's a big man. Trump all tall. All the big politicians are tall. Well, if you have tall and you have a deep voice, you can get your own podcast. Be the dog. Trump is tall. Trump is tall.

He's a big man. Trump is tall. He's not just big. He's big, but he's also tall. So not that this isn't fascinating. Let's go down to the stories. Okay. So tomorrow I've got to interview Pinterest CEO Ben Silberman about all kinds of things.

Super nice guy. We'll see. We'll talk about that on Thursday. And doing well. And actually a decent stock buy right now. Yeah. Ben Hammered. Yeah. So I'll ask him all about that. If you have any questions, let me know. So We'll talk about that on Thursday. And doing well. And actually a decent stock buy right now. Yeah. And hammered. Yeah.

So I'll ask him all about that if you have any questions. Let me know. So let's talk about the big stories. You know, we're going to start with the alphabet legal head David Drummond leaving, but I think we have to talk about Tesla, the valuation going through the roof, way up. All these people that were bears are turning into hugging Elon Musk. Yeah. The stock, some of the things are in the 600s.

You mean they're predicting the stock. They're predicting, yeah. But people who had been quite negative on them. Yeah, yeah. Investors who had been negative on them are back now positive. It's really just tearing up the stock market. Yeah. What do you think of this?

Because you had been on the opposite. I'm not to remind you. Tesla, yeah. Tesla is one of those things that just the rabid support it has. So now Tesla, the valuation of Tesla is now greater than General Motors and Ford combined. So basically Tesla is now worth as much or almost as much, I guess, if you have Chrysler still out there, as the entire U.S. auto industry. I think it's crazy overvalued. I mean, I hated this thing.

As you know, at $300, so at $400, I can't see how this thing as, you know, at $300 or at $400. I can't see how— $600 was the valuation, $612 or something like that. Well, isn't it a little over $400 now? Yeah, I know, but that was the estimate. Yeah, the projection. Yeah, I don't— It was sort of like Amazon at $400, if you remember, 20 years ago.

Yeah, look, good for the world, good for the planet. He's a genius. I wouldn't get near this stock. What would you have to do to grow into that valuation? Continue to— Make more cars, sell more cars. Yeah, hit targets, show the kind of margins they have, velocity, and also probably convince people that they're not a car company

but some sort of tech company that creates some sort of payment system that's high margin that's more around tech. And then autonomous driving. What about the talking Tesla that he announced? He's always got someone up to speed. Yeah, one that'll talk to you. Yeah. No, they're incredible.

Oh, no, he had a talking Tesla. Yeah, and what is it going to say to you, though? Hello. I don't know. You know, like the talking kit from— Why so down, Scott? What's wrong? Move or I'll run you over.

Come on. Seriously, man. Well, talk to pedestrians. They have been. I mean, the cutest thing that Tesla – I had kind of one of those nice moments of engagement. You can play and you should do this to your boys. You know your Tesla can dance. Yeah, I know.

I never – they've done it for me. I don't care. No, that's cute. I want my car to dance. Yeah, so look. I'm almost a bit – I'm like the dog that's been hit by the car a million times by Tesla fanboys because I keep getting it wrong. So they really were like Scott's an idiot. Yeah, I would not.

But now they act like I've come back to Christianity because I said I was clearly wrong. That was big of you. We welcome you back into the crazy fucking weirdo whatever we are. All the shorts are just as big jerks as ever because I said, look, this guy is great with the drama. He's great with the announcements. It's a very exciting story. And they were like, you're doing an ad for Tesla. I'm like, I also said there's math involved here that doesn't seem to pencil out.

And I was like, the economics don't work unless he sold more cars and does it more efficiently. So, you know, no matter what you say on either side of this divide, they're both crazy, both sides. Yeah, it's hard. I just find it – I just find it – We don't like either side. Love the company. Love're both crazy, both sides. Yeah, it's hard. I just find it, I just find it. We don't like either side. Love the company, love the company, love the product, hate the stock, would not get anywhere near it. And by the way, just for the record, I don't short stocks. I don't think it's bad karma and I don't do it. Well, speaking of stocks you don't like, Casper, S1, you have some things to say about this. Casper, I haven't said anything public about it. I'm looking at it. But you have some things to say. Yeah. I know the guys at Casper. They came in and met with me a couple of years ago.

And I like the management team. They're a group of bright young men. I think it's almost all dudes. Good at branding. It's a nice brand. There's a lot to like here. The quote-unquote sleep economy. People are spending more time thinking about that third of their life. The reveal, the packaging when you undo the box. It's really, it's kind of a neat moment. And one of the keys, I think the thing that builds the biggest market capitalization company isn't even actually the company itself,

but the industry it's disrupting. So media was a flat business. It wasn't even a growth business, but it had incredibly opaque, near corrupt players that were consolidated. An awful ball experience. Yeah, and you didn't know what you were getting and they were purposely keeping all their data behind a wall. And in comes these fists

of stone, Facebook and Google. So when you think about the sleep industry or where you buy mattresses, I mean, think about retail and mattresses pre this explosion in sleep. It's kind of like the basis of a Quentin Tarantino movie. You expect some people on the run to jump into a mattress store and start taking hostages and killing people. It's just a very strange retail environment. So highly disruptible. Sleep economy is big. A nice brand.

I think good management. This company should absolutely not be a public company. So tell me about the S1. It's not an Adam Neumann-level disaster. Oh, no. This is crazy, but it's not insane. This is like, I don't know, Kansas crazy, not Florida insane, right? This is just... So, look, $310 million. Kansas crazy. I don't know. That just popped into my mind. It just popped into my mind. Go Jayhawks.

Pennsylvania crazy? Okay, whatever. West Virginia crazy. So, okay, $310 million in revenues. They grew 20% last year. And Derek Thompson, a writer for The Atlantic and a cool cat and a great podcast called Crazy Genius, kind of summarized in his tweet. He said, it's a company that takes $400 in kind of foam and cotton and sells it for $1,000. Good business, 60 points of margin. But 20% of return, so they hold on to $400. And then they spend $560 on SG&A and marketing, so they lose $160 per mattress, wash, rinse, repeat. And that's fine if you're a company that's growing or scaling like crazy or a tech company that has some sort of flywheel effects. But there's none of that here.

It's a specialty retail direct-to-consumer. They're now multi-channel, which is nice, 60 stores. But when Williams-Sonoma went public, it was profitable. When restoration hardware went public, especially retail, they were profitable. So this is really a sign of the era, and that as a company like this, the fact that they can even think they can get public is sort of strange. The other thing that kind of tells Goldman, I think, as a lead banker, I had breakfast with a senior exec from Goldman, and Goldman's core attribute is its reputation as an accelerant and continues to attract the best and brightest.

And as you would imagine, this guy was just super smart and super impressive. And he was asking me about their brand positioning. I'm like, Goldman's brand positioning is very simple. It's we're fucking Goldman Sachs. Goldman doesn't take Casper public. This company probably doesn't get public because it's not scaling. It's a cute company. They miss their window.

By the way, I told these guys I asked for advice two years ago, and I said I have three pieces of advice. Sell, sell, and sell. Two. Likely acquirer would be, I think Target was looking at making an investment. But just as Walmart made some kind of irrational— Like Dollar Club guy who sold, Dollar Shave Club guy sold. Well, he sold to Unilever, but— Right, but he sold—

Get out. Sell to an old company trying to find Botox to look younger and needs an aqua hire, whether it was Walmart with ModCloth, Bonobos, Jet. Their opportunity was to sell to a midlife crisis, big company that needs that talent, needs that direct consumer, maybe goes big and bad in sleep. But I'm curious to see what internet analyst Goldman props up to basically engage an unbelievable creative writing. And there's more of these. There's more. There's purple. There's a whole bunch of them. See, that's the key. That's actually, that's the key negative attribute. And the reason why this company either doesn't get public or gets public, and Goldman does a great job of distributing this stuff, and is down 30% to 50%

in the first 12 months, because very few barriers of entry, Tuft & Needle, Purple, which did a reverse merge and it has a $500 million market cap right now. So this is a company. It's a nice company. It should not be public. The gangster move here, Cara, but the VCs won't do it because they're still drunk on their valuations, would be to create a new age William Sonoma and to roll up away Warby Parker and Casper and consolidate some of the back end, do a better job of targeting, have more clout.

Okay. All right. Interesting. I like this creativity out of your brain today. This is smart. Well, I'm ramping up the edibles. Okay. I thought so. I'm flowing. I love it. Okay. So you were not impressed with this S1. You were not impressed with this. This is a cute retailer.

Also, people don't buy that many mattresses. You buy one. It's a cute retailer. I bought one in five years. A nice retailer with 20% negative operating margins. My son, I'm not going to buy another one for a while. And not scaling. I mean, do you have any thoughts on this? I'm going to go with you on this.

I think you're completely correct. I think they should have done something earlier, sold it. They should have sold it. They missed the window. I thought all of them should have sold it. 100%. The interesting ones, though, will be the gangster in the category is Warby Parker because, again, you have— Well, they have something else going on.

That's more—I like that business. Yeah. Yeah. Because the industry there is highly disruptible. Like Luxottica, the $7 billion business that does a shitty job, those aviators you wear that cost $220, cost $18 to produce. I buy all my other glasses at Warby Parker. And the distribution is awful, going to a sunglass hut. I mean the distribution is terrible.

And it's not – that's actually a difficult business. They do a fantastic job of merchandising. And if you give me – if you say, okay, who are Casper's true competitors? I can rattle off a bunch, but who are Warby Parker's true competitors? Just the other opticians that I don't go to anymore. Who do a shitty job. And by the way, I buy three pairs of glasses in a year. Oh, unbelievable, right?

Every year. Hugely disruptive. They're not great glasses, but they're beautiful glasses. And I don't care. I actually like them as disposable in a weird way. Fastest zero to a billion in specialty retail ever was Old Navy with this gangster algorithm of 80% of gap for 50% of the price. And Warby Parker came in with the Old Navy gangster algorithm and said, we're going to be 80% of those $1,100 prescription lenses from Tom Ford you bought. We're going to do 80% of that for literally 15% of the price. And it

gives you and me the confidence. When I go buy glasses at Warby Parker, I buy three and four because it's like, I don't have to love it. I just have to like it because it's 99 bucks. Nice looking glasses though. So they raised money at $2 billion. Great design, great supply chain. They're on top of design. They're not edge design, but they're not. And like not 80 other competitors coming for launch. And they're not $200. Away is a unique product category.

Again, a shitty industry, the luggage industry that is not innovative. They've innovated. So in order. Speaking of which, that CEO is back. She's back. But in order of what I'll call valuation or in order of investment thesis, you would go Warby number one, Away number two. And Casper is kind of a distant third. Casper, what will be interesting is if Casper does what we does and kind of shits

in the pond for direct-to-consumer IPOs. Because if this doesn't get out, which I think it might not, what I think is really going on here, and I apologize, I'm drowning out about Casper, I think these guys have said, we're in a corner, we're up against it. Purple got out with this reverse merger. We need to get out before Away or War beat. But I think they don't even plan to go public. I think they're basically saying a target or someone come take us out. We're for sale. That's probably true. All right, speaking just very briefly, SoftBank backed hotel startup Oyo fired thousands of people in China, India this week. Reportedly, Oyo has let go of 5% of their 12,000 employees in China and 12% of its 10,000 person staff in India.

Scott, you've talked about OYO. Give me a short rant here. A short rant? And again, it's another soft bank disaster along with the pizza delivery, which we all knew that was coming. We're talking about Florida and when we hear like some serial murderer is caught because he shows up to an olive garden with his victim's blood on his dogs. You just know that guy's from Florida.

because he shows up to an olive garden with his victim's blood on his dogs. You just know that guy's from Florida. When you hear about a company like Oya, which makes no sense, has a 26-year-old, bad consumer reviews, 80% of the people working there have been there at work for less than 12 months. They're fraudulently inflating the number of rooms on their platform. I mean, it's just $3.5 billion raised at a $10 billion market cap, loaning the CEO money against his share so he can invest more. And the smartest guys in the room, White House and Sequoia Capital,

are not only after seeing this company from the inside out, they're not only not investing in their pro rata rights, they're actually selling shares. They're getting the hell out of Dodge. So we know this must be a soft bank company. And what a shocker it is. This is a train wreck. And unfortunately, it might have more externalities, whereas we was more spectacle than historic. This could be historic because India, which now has 24 unicorns, they added nine last year. The ecosystem is more fragile here. The fear is that this might cast a pall over the entire Indian unicorn ecosystem. This is not only a fucking disaster from an investment standpoint. It sounds borderline fraudulent. And when any of you have fraud involving bribery and there's reports that they were bribing officials and letting them stay in their places so they wouldn't write up health violations or all sorts of – they have tax authorities now looking into it.

The definition of corruption is fraud that involves bribery. And so the smell or the stench of corruption is starting to seep into oil. This is a train wreck. And then on a—I'm going to get professorial. They're here in New York. I saw one. I was walking down the street on 47th Street, I think it was. But that's a key point, and that is the world of global branding, and I think a lot about this. Brands are hard to build. Global brands are very difficult to build. Nestle, one of the greatest brand builders in the world, less than 10% of their brands are in more than one country and less than 1% of their brands are in more than 10 countries. It is very hard to build a brand

that permeates cultural boundaries. So you're immediately asking, well, Scott, tell us what brands do make good for global brands. It's effectively the categories where the cohorts look and smell and feel the same around the world make for great global brands. So CTOs wear bad logoed sweatshirts, are out of shape, and they buy Huawei and Microsoft, right? Rich people are some of the most boring people in the world. They send their kids to Ivy League schools. They engage in massive tax avoidance. They party in St. Barts, and they wear Hermes.

So luxury brands, tech companies make for good global brands. Services companies, the CFOs and chief strategy officers, CEOs, all want to hire McKinsey and Goldman. They make for good global brands. But budget hotels, if you look at the hotel industry, who are the only brands that have scaled globally? The luxury guys. Four Seasons, Mandarin Oriental. As soon as you get into budget, as soon as you get to most health sex or value, the people who buy budget hotels do not look and smell and feel the same around the world.

From Australia, it's hostilers roaming around the world. It's a different cohort. And the notion that they can build a global brand in budget hotels, I think it's naive and ignores basic business. I'm thinking a lot about mattresses and cheap hotel rooms. I'm not going to go into it. There you go. All right. I'm going to stop you.

That's called a weekend for me. I'm going to stop you. That's called a weekend. But, you know, it's another black eye for Softman, including the pizza service, which also has some issues. Well, who would have thought the robotic pizza company? That was like – Who would have thought that wouldn't work out? I think they called me.

I'm like, no, I just can't even. Who would have thought that wouldn't work out? I can't even me. I'm like, no, I just can't even. Who would have thought that wouldn't work out? I can't even. Someday, someday, someday there will be robotic food delivery. Well, I have that business in my house. It's called my toaster oven. All right. I made pizza.

We're moving on. Actually, I did it last night at 1230. All right. We're going to take a quick break. And by the way, I watched four episodes of The Morning Show. I have done a 180 on The Morning Show. It's good. It's a very good show.

It's good. It's a very good show. All right. Are you done talking? Yeah. I'm chatty. I like your – you're being brilliant. I'm chatty. show. All right. Are you done talking? Yeah, I'm okay. I like you. You're being brilliant. I know you are, but you're being brilliant. So I'm letting you go on.

I'm letting you go on because you're actually being brilliant. You're smarter than Paul Ryan, but that's okay. All right, Scott, it's time for a quick break. We'll be right back with a friend of Pivot, some wins and fails, and a surprise pop quiz for Scott. Fox Creative. This is advertiser content from Zelle.

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Scott, I really want to talk about Trump saying that his reason for taking out Soleimani was because he had planned attacks on four U.S. embassies, which his people who work for him can't make any claims to see such intelligence. Meanwhile, the Democrats are racing to limit Trump's war powers. The House approved resolution to restrict Trump's authority to strike in Iran. The Senate will be voting on that resolution this week. There's a lot of unhappy people in the Senate, include lots of Republicans. So we reached out to a friend of Pivot, New York magazine reporter Olivia Nuzzi. She of the Rudy Giuliani texting fame. She writes amazing work, actually is amazing. She did a great Joe Biden piece recently, too, for insights on how it might actually affect the Trump presidency.

Let's go to tape. Any attempt to put a check on Donald Trump's powers abroad is going to be stifled somewhat by the fact that he just tweets whatever it is that he's planning on doing or whatever it is that he's done. And that then ultimately becomes the United States policy. That is how he's making policy. It's how he's making policy domestically. It's how he's made foreign policy in the past. It's how the military establishment and the national security establishment as his own White House staff has learned about decisions that he's made.

I'm very skeptical that any action that Congress takes to kind of rein him in will really be effective when he has access to this megaphone that enables him to declare policy with the push of a button. OK, well, this is something I've written about before. This is obviously clear. Who has more power to rein Trump in, Twitter or Congress? In January of 2018, for those who do not remember, Twitter declared that, quote, blocking a world leader from Twitter or removing their controversial tweets would hide important information. Who has more power?

Voters. I mean, you and I have talked about this. You can't take – I don't think you can take the president off Twitter. Not take him off. This has – he has more power using it. I wouldn't take him off. You know that. I don't think that.

I think paid advertising is a very different – I like what they did around paid advertising because of the abuses. But I think you don't take him off. I don't know what you do. I don't know what you do. 100 percent. You vote him out. I think he has an incredible tool in Twitter. He's using it as a governing vehicle. Oh, he will go down as the guy that earned the most or gained

the most. No individual has gained more that isn't a shareholder from social media than the president. The president is the 140 character president, but it's just so strange. Can you imagine she communicating and dictating and governing by TikTok? I mean, it's just so strange. Can you imagine Xi communicating and dictating and governing by TikTok? I mean, it's just so strange when you think about it. But it's somewhat effective. It actually is. It makes things happen, which is amazing. And Congress doesn't seem to—you know, they're sort of in this, we're going to restrict the world powers, we're going to stop them.

And it just doesn't. Like, even when he wasn't correct about these four embassies, even his own people won't get it. It doesn't matter. Like, he can say it, and he repeats it on social media or whether he's on Fox News or wherever he is. That's another basic error, though, of communication strategy. And that is it's never the action that gets in trouble. It's a cover up. If the administration had just come out and they said, well, why did you kill him?

Well, he's been the strategist and the supporter behind a bunch of proxy battles that killed Americans. When you do that, eventually, when we get an opportunity, we take your ass out. I think, and then that's it. And then stop talking. Stop talking. And instead, they're like, well, we had evidence of imminent attacks. That's where they blew it. It's like, well, no. But did they blow it? Does it matter that he lies? And then they say, don't say anything. Oh, 100%. If they just said, bad guy, we had our shot, we took it, end of story next. And instead they came out and felt like they had to justify it by lying and saying they're imminent attacks. Oh, no, imminent attacks.

And now we're all dissecting what it means, the term imminent. They should have just said America's memory is long and our reach is far. So guess what? You kill American soldiers anywhere, sleep well, boss. We're coming for you at some point. And then it should have been, as you said, seen. They should have said nothing else. They didn't need to justify it.

Instead, they came out and started lying. Yeah. I do think the interesting thing is that they are having a hard time knowing what to do with him. It's sort of like a toddler that goes and does everything. You can't – you're trying to use all these reasonable ways to deal with him in old ways. It reminded me of Paul Ryan. I was talking to someone on the way down, Eric Anderson, in the thing. And I was like, the reason he succeeded is because he was doing it the way it was done.

He thought he could handle it. This is the way we did it. And Trump just ran circles around him in that regard. No, it's like a 15-year-old is taking control of the house. I can, you know, I could handle it. And then, you know, that was, I think it was one of his quotes allegedly he said, and he couldn't. And the same thing with Twitter.

They can't, they don't know what to do. It's very good for them though. You can literally – if you look at Twitter stock price, it's a smile and a trough when Trump was elected and it's gone straight or it's recovered substantially. It's had a dip but it's recovered substantially since Trump. Wins and fails. I'm going to go with this leaving of David Drummond from Google. Yeah, let's talk about that. You've been reporting on that.

What kind of – give us a little bit of backdrop on what happened. I've known David a long time. I was there at the early days. Well, you know, he's been there a long time. Let's have one. But he was also leaving the company with no exit package following sexual misconduct allegations. He had been going – it was a long and complicated story of many sides. And he has his point of view and the person who he went out with.

He was with someone who worked for him and then he had a kid with her. It was super complicated. And she was alleging that he had gone out with more employees. There's now an investigation. He's at the center of it, an internal investigation that's reaching all over Google, by the way, around him. And then the $90 billion exit package was given to Android co-founder Andy Rubin who was found to have credible allegations of sexual misconduct for the company.

It led to the Google walkouts in 2018. And Larry Page was running the show during all this time, right? Or Eric Schmidt. And, you know, Sergey had his own thing around someone he went out with at work who was going out with another person who ran Android.

You know, it just, it was, it's sort of like the chief legal officer was in charge of who probably should have been – Dictating policy around this stuff. Pure than Caesar's wife kind of thing. Yeah. These startups are complicated because a lot of people do go out with each other. So it's kind of a – Larry used to go out with Marissa Mayer a long time ago. Right.

So you see – it's very common in startups. But I think what it is is that as they got more powerful, they didn't put stuff into place that was very clear. And then there was another person who went over to Uber. It just went on and on and on. And there's now these investigations going on around all of that in the management. You know, I think what's happening is Sundar Pichai, who has been the one to move in and clean some of this up, you can see his sort of invisible hand everywhere. I know his way. I think he's cleaning it up quietly.

And I don't know if it's going to be cleaned up quietly. I think this report is probably going to get out in some fashion or maybe there's some litigation. And what he's trying to do is clean it up quietly because he's a good guy and he's actually, you know, and move it away and move Google into the next era. But there definitely was very loose management around this particular, they've done a great job in lots of things, interesting culture, interesting way to do business, amazing business itself. But in this particular aspect about their personal lives, which were very messy within the company, in some ways that were OK, other ways that weren't OK, but it was – certainly was messy and some of it true sexual harassment. It's just a question of whether Sundar can clean

this up quietly. Do you know what I mean? He's like the cleaner. I don't know. I'm going to talk to him a little bit about this when he comes to code soon. It's definitely, there's got to be a new era of Google. And I think they had to first move the founders out. And it's linked a little bit to this investigation, even though they touted it as if it's time to move on, like why now? a little bit to this investigation, even though they touted it as if it's time to move on, like why now? They've got him moving on, David, who's been there forever. So now all the – Eric's gone.

They moved him out. So the question is, you know, there's no – now it's the new era essentially. Yeah, and I hope that – Or a better era. So unfortunately because a lot of this is titillating. It makes for great clickbait. The conversation here is more around outrage and a lot of hyperbole. And what I think is neat, and I'm hopeful, I don't know if this will win or not, I think we're moving into the era of what I'll call the calibration or nuance around this. And that is an important conversation, but hopefully it catalyzes some calibration. So some examples. When I've been on media and they use the term sexual misconduct, they use it as an umbrella to encapsulate CEOs who've had consensual relationships with vendors and people who have attacked women in their office. And there's a difference.

Some of these people should be in prison. Some should be in prison, some should be fired. And I think some of the other calibration that's required here, and I think this is where I would move to or where we're moving to, is as someone who serves as a fiduciary for shareholders and boards of directors. And that is when you have a large group of people in a confined space and they're sharing intense experiences, and specifically if they're young, they're supposed to establish relationships, have sex, and have children. They're supposed to do that. They're not supposed to abuse their power. You take a risk. If you ever do anything with someone junior to you, you are opening yourself to liability. But I've had several marriages catalyzed and fomented and starred in kids and economic security and people who love each other at work. And the notion that

at the beginning, they all had their lawyers get together and decide to go have coffee is just a little unrealistic. Young people, when they share intense experiences in close proximity, are gonna have sex. And I think that there's a difference. And the difference is that once you get to a certain executive level, there's some outstanding benefits about being an executive at a place like Google. A, you make tens of millions of dollars. B, people laugh at your stupid fucking jokes all the time. C, you get restaurant reservations in mediocre restaurants in San Jose. E, you get to come on and speak to interesting people like Kara Swisher. You know what else you get to do? You get to have your fly

up and fucking locked, boss. There's just no, when you reach a certain level in a company, full stop, you take your sex and your personal relationships off campus. So I think we need to calibrate. I think there's a difference between young people who are trying to find mates, who can't bring a company down, who aren't in a position to leverage crazy power to abuse other people. Once you get to a certain level, and I think they're going to need to define it. Once you hit VP, we don't want to hear from you. You take this shit off campus. You find somewhere else. One of the things that's interesting here is I think the tonality of not dealing with serious allegations of

sexual harassment and the way it was done at the company. And I think, you know, you're right. The companies are messy. And lots of things are messy. Well, mating is messy. Yes, but there is, I think it was led to an idea within the company of not seriousness when this was going on with

this chief legal officer you know one of the founders uh top executives and and so there is a difference in the behaviors yeah but it just mushes all into a thing when these exec when it seems like there's a lack of time and it did bleed down into other parts which is why you led to the google walkout because it did there wasn't a rigorous idea behind it or discussion of it because they couldn't talk about it, you know, because again, some things were fine, some things that were not fine. And it just was it was it was they they didn't create clarity.

And I think that was it. And then when serious allegations came, they were either covered up or pushed away or people didn't think you could say something or, you know, the same thing that happened at Uber, this book by Susan Fowler is coming out. You know, this guy who was the high performer, like tolerated more, that kind of stuff. Some like words, the way that people talk to each other. Anyway, it just creates a messy situation at the very, and there were not just one. It was more – it was lots of executives. And so that's what I think. And then you had an executive of ultimately running it, Larry, who didn't do anything about it, like who didn't seem to do anything about it.

Now, this new CEO is clearly quietly doing something about it. I know a lot about what he's doing, and I think that's the thing. And the question is can you do it quietly? Okay, but isn't the point of all this, this has created a lot of controversy. There's a lot of people who put up with a lot of bullshit. Ideally, don't we come out of the other end of this with some, as you point out, clarity? That if I'm running Google America, if I get a promotion, I'm running Google Canada. It's just never been stated at Google.

It's black and white. I'm not here to get laid. I know that, but you know companies. But even if people are impressed with me and pretend that I'm interesting, I don't pursue that on this level. That's just part of being a senior executive at a company now. The CEO, I think, is trying to – but the thing is, can he do it quietly? That's what's – he's like that. That's his nature, not to shake boats.

And he doesn't have full power because guess who has the power? The founders. Around this stuff, they'll have the power, though. Yes, I assume because he could walk, right? Okay. My win? Yeah. Meghan Markle and Prince Harry.

Say more. Come on. I just love it. I love it. I love the whole thing. I love them stepping away. I like their entrepreneurship. I love them copywriting and trademarking the shit out of themselves. I like the whole nine years.

And I just like, I think they could have been nicer to the queen. I don't know why I have a soft spot for. I'm watching The Crown too much. But I just love this whole like, it just shows you that this is just a business. This is just a business like any other. But doesn't it make sense? Because effectively, royalty used to be the like any other. But doesn't it make sense? Because effectively, royalty used to be the uber rich. But if you can be uber rich, you can live like royalty. You can join the Soho House, go to St. Bart's and roll in L.A. in a Porsche. I don't go to St. Bart's.

Do you go to St. Bart's? I sure do. You know why I do? I sure don't. You know why I do? Because I can. Because I can. It's wonderful. You were just there, weren't you?

Yeah, I was there. Yeah, that's what I've heard, but I'm not going. Nonetheless, you enjoy yourself. But I'm proposing a swap. Your shallow lifestyle. I'm willing to be Prince. I'm willing to change my name to Shamu so they can call me Shamu, Prince of Wales. That's good royalty humor. And then I

still think when Charles and Diana had Harry they should have named him Up so they could call their family Up, Chuck, and Die. Oh, jeez. More good royalty humor. Oh, my God. More good royalty humor. You're just—

By the way, both of those Joan Rivers jokes, God rest her soul. Okay. Before we go, we got a listener response from Thomas Hegelund, who is horrified by Arlac—not Arlac—Scott's lack of understanding about Norwegian cuisine on last week's show. So pop quiz, Scott, what is smalahov, also called smalahovid? I can't pronounce this right. Smalahovid? Is it 1A, an almond-based flourless fermented cranberry cake baked in a wood-burning stove, an alcoholic beverage made from distilled honey and salt water, a dish made from a sheep's I have no idea.

Come on, pick one. C. Oh, you're right. The dish made from sheep's head originally eaten before Christmas. By the way, the grosser the dish, the better the tasting. Remember on sweetbreads? How did you know that? How did you pick that?

I would think it was a flourless and fermented cranberry cake. It seems so Norwegian. They stuff a chicken up a duck's ass and it tastes amazing. It could have even been an alcoholic beverage from a distilled honey and... All right. Okay.

How is rakfisk prepared? Rakfisk. Okay. Rakfisk. Okay. Do I have... Trout, sometimes char, salted and fermented

for two to three months or even up to a year, then eaten without cooking. Oh, God. Rib of lamb that are first salted, then dried, and sometimes smoked, steamed over birch branches. Yeah. Dried whitefish, normally cod, but ling and burbo are also used,

treated with lye. Oh, wow. I don't think it's lye. Becca, you're brilliant. I think it's A. Oh, my God. Are you, like, reading over my thing? No, I travel a lot.

All right. Okay. The dog goes to Northern Europe. Why were you so ignorant about Norwegians' food? Trout or sometimes char, salt or- By the way, do you spend much time in Northern Europe? Do you spend much time there? Sometimes.

I don't travel. Yeah, they get it. They just are, like, happy and like each other. So we have Rogfisk and Smalahov, which I'm sure I badly pronounced. I'm so sorry for our Norwegian friends. Thank you for the education, Thomas. A hundred percent. All right, yeah.

AP Norwegian food. We'll do German food next. Yeah. All right, we'll do German food. Yeah, the answer to everything is pork. Remember, if you have questions about a story you're hearing in the news for us to answer, email us at pivot at voxmedia.com to be featured on the show. Today's show is produced by Rebecca Sinanis.

Erica Anderson is Pivot's executive producer. Thanks also to Rebecca Castro and Drew Burrows. Make sure you've subscribed to the show on Apple Podcasts, or if you're an Android user, check us out on Spotify or wherever you listen to podcasts. If you like the show, please recommend it to a friend. Thanks for listening to Pivot from Boxmedia. We'll be back next week for another breakdown of all things tech and business.

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