The Prof G Pod with Scott Galloway - 2022 Predictions

Episode Date: January 6, 2022

Scott discusses his predictions for the year ahead and reviews the ones he got right and wrong in 2021.  Scott also shares his thoughts on Apple’s big milestone of reaching a $3 trillion valuation.  Algebra of Happiness: stay in touch.  Learn more about your ad choices. Visit podcastchoices.com/adchoices

Support for this show comes from Constant Contact. If you struggle just 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 Support for PropG comes from NerdWallet. Starting your slash learn more to over 400 credit cards. Head over to nerdwallet.com forward slash learn more to find smarter credit cards, savings accounts, mortgage rates, and more. NerdWallet. Finance smarter. NerdWallet Compare Incorporated.

NMLS 1617539. Episode 128. Amelia Earhart became the first woman to fly across the Atlantic in 1928 I learned how to fly so I could overcome my biggest fear what is that fear of flying no dying alone go, go! Welcome to the 128th episode of the Prop G-Pod. The first episode of 2022.

It's becoming surreal, the years. They just keep coming. They just won't stop. It's like surreal, the years. They just keep coming. They just won't stop. It's like the news. It's like the FedEx guy dropping off more and more shit and more packaging that we consume. I've gotten very Northern European as I've gotten older, and I hate knickknacks and shit all around me, candles and crap and packaging. Anyways, or maybe I'm just getting older and want simplicity in my life. The simple things, it's the little things that matter going into 2022. I'm also going to biohack. I've decided I'm going to turn back the clock. I want to feel 56 again. Supposedly, supposedly,

you somehow cement or ossify the image of yourself when you're 38 or 39. And that is, you decide when you look in the mirror when you're 38 or 39 that that's how you are supposed to look and that's how you look. And so, from that point on, every time you look in the mirror, you think, Jesus Christ, what the fuck? How did I must be tired or this is a very bad photo day. No, you're just getting really old and ugly. I find, I find it's awesome to be young and good-looking, which is redundant. I wasn't especially good-looking as a young man, but I was young and I had hair and I was in good shape. So, you know, C above, young, good-looking. And now that I have totally, like, leaned into the ugly, I'm down with it.

I'm down with it. It was in between that it was tough. It was trying to hold on to some semblance of good looks and hair. That was the hard part. But now I've just literally crossed the chasm of grossness and I'm down with it. Just lean into the nose hair, lean in to the spare tire no matter how many times I work out, lean in to the triple chin, lean into being skinny fat. I am skinny yet fat, which is a really gross combination. Anyway, let's talk about what's going to happen in today's episode. Every year, we make predictions about what's to come in the year ahead. And we take a look back at the predictions we made the year before to acknowledge

the ones we got right and the ones we got wrong. And let's be honest, making predictions is a shitty business. The events that lead up to the realization of any prediction you make make it seem less extraordinary. For example, I predicted that AT&T was going to divest its Time Warner assets. At the time when I made that prediction, AT&T was saying that no, there was a ton of synergy. And on earnings calls, they were saying how well it was going. But then it was obvious as they moved forward that they were probably, and there were rumors, they were planning to circular, they were trying to sell it. So by the time it happened, it didn't seem surprising at all.

I said Bitcoin would hit $50,000 when it was at $18,000. And at the time, that was a bold prediction. Any asset you predict within the next, whatever, 12 months is going to go up almost threefold is bold. But because it incrementally crept up there when it happened, it was like, it felt like kind of a giant thud. Anyways, a shitty business. But as Eisenhower said,

planning is essential. Plans are useless. Or I think he said in reverse order. And predicting or predictions are useless. But predicting helps us imagine a future, helps us damage the muscle in between our ears such that it grows back stronger and also holds us accountable for thinking

what kind of world do we want to live in? And if we predict stuff, what can be done to either accelerate that good change or do things to get in the way of what might be a bad prediction. Anyways, I absolutely love predictions and we're going to take responsibility for decisions we make in the present,

also revisiting a prediction and asking why it did or didn't come to fruition provides insight as referenced before into the machinations of our world and whether we are progressing or regressing. What you're about to hear is our predictions live stream that took place on Tuesday, January 4th

with our higher education startup, Section 4. I started this company about two years ago. I'm sick of barking at the moon about how expensive graduate education has become, and I decided to help the world while trying to make a shit ton of money. Let's be honest, not in that order, not in that order. But we are a mission-driven organization. We do sprints around strategy, marketing, supply chain, analytics, storytelling, try to kind of cherry pick the best profs in the world. If this sounds like an ad, trust your instincts and deliver it at 10% of the price with 0% of the friction. By the way, if you can't afford one of our sprints, we have a very rigorous scholarship process

where you send us an email saying, I can't afford this, and we grant you a scholarship. So that's us feeling good about ourselves. That's my dog lying on my chest, and I think everything's all right with the world. Everything's all right. By the way, I have a great day in an edoxin, and I saw the most adorable TikTok today of a great day in an edshund. I think there's a unique bond, not only between man and

beast, but between Great Dane and Dachshund. I think it's a really unique peanut butter and chocolate combination. In case you're in the market for two dogs, find a Puerto Rican rescue dog that's somewhere between an Italian or a miniature pincher and a Dachshund and a Great Dane. Let's talk about their respective personalities before we bust into why you're here. Dachshunds are very deliberate. They will come up to you and say, okay, it's time to play. I feel like playing. And they'll bring a toy over and they'll ask you to throw it around for a little while and then they're done. And then they'll come up to you and say, okay, it's time for dinner. They also love to burrow.

The power of instinct is just so incredible. My dachshund is so happy just jumping on bed and burrowing well into the covers or when we go to the beach, he will just start digging and then lie in the hole. They're also incredibly aggressive or territorial dogs. I think they were initially bred to hunt vermin, and they will not back down. And it's almost kind of dangerous.

We have a German shepherd that lives next door to us that is not neutered, and this thing could kill our little gangster, and gangster just won't back down, which is kind of dangerous. So let's talk about the Great Dane. So our Great Dane, Leia, she is, I would best describe, what's the term, a really needy bitch. It's just always about her. From the moment you come downstairs and she body blocks you and says, you're going to pet me for the next 10 minutes. And it's more of that the rest of the day. And they're very sensitive, very emotional. And I find the Great Dane is a little bit more selfish than Gangster,

that it's just kind of all about her. But they are very loving, sweet, kind of dopey dogs. And it's an interesting contrast to their size because they look scary. I mean, when Leia growls, the entire house shakes. Anyways, good for you. What a thrill. What a thrill here with the dog whisperer. So, we'll start off this podcast by reviewing our 2021 predictions, review, hold ourselves accountable, and then bust into what we think will play out in 2022. By the way, hands down, best year ever, our 2021 predictions in terms of what we got right. That means this year, you should not do anything I'm predicting or invest across any of it because it probably means we're going to get all of it wrong. So before that,

we want to note a staggering and not surprising stat from Big Tech. Bloomberg reported that in 2021, Apple, Amazon, Alphabet, and Meta, that is Facebook, trying to create another weapon of mass distraction from what is Facebook,

the company that depresses our teens and weaponizes our elections and makes our discourse more coarse. But, hey, let's talk about the metaverse where none of us have legs. That sounds great. So, they added approximately $2.5 trillion in market valuation with Microsoft, Apple, and Alphabet leading the way in the S&P's 2021 gains. Back in July, I actually predicted that Amazon would be the first $2 trillion stock, and I got that wrong. As a matter of fact, Apple just breached $3 trillion, which is so impressive.

It took less than two years since it reached $2 trillion, and it took about 42 years to get to $1 trillion, and then another 24 months to get to $2 trillion, and then just 12 months to get to $3 trillion, which by that math, if that math is linear, it should be $10 trillion in about 72 hours. Not going to happen. Pretty comfortable predicting that's not going to happen. So this is, I think, what happens when you take, and they're the first to do this,

a tech company, and you take processing power, and you take network effects and the power of software and hardware in an increasingly digital world. And you do what Apple has done and no other firm in technology has been able to do. And that is you combine it with a luxury quotient. That is, essentially, they've become the only luxury brand in technology. And they've taken a page, I should say they've taken several hundred pages because it's not easy out of the luxury handbook. And they've spent tremendous time and effort

and human capital around design. I mean, do you know who the head designer is at Microsoft? No, but everyone knows John Ive. Their stores, they went vertical before it was cool and they thought about the brand as an experience and they are meticulous and arguably it's the strongest brand in the experience, and they are meticulous, and arguably, it's the strongest brand in the world.

I've never bought that. The strongest brands in the world are educational brands. Another talk show. Another talk show. But anyways, the Cupertino firm certainly didn't start out as a luxury brand. It pivoted here, and it was the best house in a shitty neighborhood in tech hardware. It was born in the world of cables, barefoot Steve Jobs, geekware, acronyms, and low margins. Then Jobs looked across the tracks

at the luxury part of town and thought, why can't I be the best house in the best neighborhood? It sort of saved their bacon because I would argue just until the last, until maybe the turn of the millennium, Apple was notoriously overpriced and underpowered. But these core associations of aspiration and thinking different made it such that you bought an Apple laptop, even if you, like me, had a small business. And every time you went to a client, it was a shit show trying to get the thing connected.

But everyone thought it was crazy for a tech company to open stores. None of these guys had stores. And actually, that's not true. Gateway had stores, but they were not executed very well. Do you remember those? Going cow spots, buy a Gateway computer. Right idea, wrong execution. I was on the board of Gateway Computer, which is about the weakest flex in the world. I was also on the board with Rick Snyder, who went on to be the governor of Michigan, and Ted Waite, who was at one point one of the wealthiest men in America. And this guy named Michael Dell

decided to go small and medium-sized business. Ted went consumer, and we kind of know how that went. So now Ted is only, I think, worth several billion instead of 70 billion, but he's doing just fine. Interesting guy, interesting guy. I enjoyed Ted. Anyways, this was crazy to open stores to go vertical, but Apple did it,

and Apple owned this luxury positioning and created these temples to the brand and took $7 billion out of pre-purchase branding and put it into distribution and opened stores that LVMH and Cartier envied. I would like to, if they opened a coffee store in an Apple store, I would go hang out there. I just think it's what they have pulled off there is so incredible.

The human capital, the fluke, the field, the design. And Apple stores embody for me what is something I'm constantly pulling out or was constantly pulling out as a consultant. And that is the hardest thing about retail and merchandising and design is not what you include, but what you don't include. And I find that everything they pick probably is one of eight things they could have had, but they decided the other seven weren't good enough and they took it out.

There's just a simplicity, ease, a fluidity of purchase, whether it's giving your credit card to the person in front of you so you don't have to go to, why is there ever a cash register? Why? With contactless payments,

why on earth would you ever go to a cash register? And why would youless payments, why on earth would you ever go to a cash register? And why would you ever need to go somewhere to find customer service? They're there, they come up, they help you, the clean wood. They've just done such an amazing job. It's easy to think of Apple

in the context of retail right now, but they absolutely broke entirely new ground. So what is this? What do we learn from Apple? A few things in terms of their march to $3 trillion. One, it's great to be a tech company. Two, zigging when other people are zagging. They went into stores when others didn't. I do think it brings up the two biggest innovations in business model over the last 20 years. One, a recurring revenue bundle.

Almost 20% of the revenue is now recurring revenue through services like Apple Music and Arcade. They've also consistently innovated around product development, the AirPods. If a standalone business would be, I think, the 53rd biggest business in the world. But at the same time, they were brave enough to disrupt themselves. They took essentially the iPod, was it called? Yeah, the iPod, and they turned it into a button on the iPhone rather than trying to hold on and protect those legacy assets at the cost of innovation. And then the other big innovation, or I think the biggest innovation, which is at the center of, I think, every huge accretion and shareholder value is supply chain. And that is they forward integrate it into stores, just as Amazon's big win, I think, is Amazon Prime and fulfillment. I think it's an interesting experiment

to go through the entire supply chain of your company, whether you're a consulting firm and the supply chain there is more about how you recruit and deploy human capital and what it means to have a remote labor force. Or if you're Urban Outfitters, which I was also on the board of, thinking about the supply chain around sourcing and how you need more heterogeneous supply chain because in a

market where people aren't quite as price sensitive, but if you can't get any tops into your 550 stores because 80% of them are coming out of a district in China. And also, what does it mean to have a company, a connected fitness device that when COVID happens, one part creates or kind of basically disrupts the entire supply chain? I'm, of course, talking about Peloton. What can technology liberate us from? And B, how does COVID and the dispersion of the way we interact with products to our smartphones, our smart speakers, but more specifically our home, how does that change the way we think about supply chain? Anyways, the first $3 trillion, I think that's absolutely dramatic. I think this is going to be a year where I'll make one kind of big prediction. I think we're going to see fundamentals reunite. We're already seeing it.

I was supposed to do a predictions event a couple weeks ago. We didn't use Zoom. Total shit show. AWS went down. There's always a good excuse for failure. And 12,000 people wasted a half an hour of their time waiting for me to come on and tell them that AMC and GameStop stocks are going to collapse, which I'm convinced they're going to. By the way, I said Virgin Galactic was going to collapse about four months ago, and it's off 60% since then. I also said that Alibaba was a great buy, and it's off 30%

since then. So anyways, tune in. I'll make a bunch of predictions, including predictions about sort of clean energy, i.e. nuclear energy, which I think is going to be a big deal in 2022. We're going to talk about stocks. We're going to talk about the metaverse. By the way, the metaverse is not going to be the Zuckerverse. Give me a fucking break. Give me a break. Thank God. Thank God they are not innovative at Facebook. They're incredible acquirers, probably the best acquirers in the world, but I wouldn't describe them as innovative. Anyways, I think it's going to be hilarious what's going to happen to the Zuckerverse. All right. Enough of that. Right after the break, right after the break, we're

going to bust into our live stream around predictions for 2022. It's so good to be with you. It's good to be back. Let's embrace the future. Let's party like it's 2022. I think COVID is coming to an end. I'm not saying be lazy. I'm saying go get a vaccine. I'm saying distance. I'm going to live my life. I'm going to live my life. I don't have a ton left, and it's going much faster than I would like. But I am going to embrace the shit out of my needy bitch, that Great Dane,

that burrowing dachshund, and these other beasts in my household called my sons. Onward! their investment approach, what learnings have shifted their career trajectories, and how do they find their next great idea? Invest 30 minutes in an episode today. Subscribe wherever you get your podcasts. Published by Capital Client Group, Inc. Hey, it's Scott Galloway, and on our podcast, Pivot, we are bringing you a special series about the basics of artificial intelligence. We're answering all your questions, what should Thank you. So tune into AI Basics, How and When to Use AI, a special series from Pivot sponsored by AWS, wherever you get your podcasts. Let's revisit 2021 uh so these were our predictions from last year from december of 2020 we made the following 10 predictions and we'll review them apple acquires peloton we did not get that right so so far that is wrong however however i am doubling down and one thing i'm not

certain it'll be apple i think it most likely will be Apple or Nike. But Peloton is not going to be an independent company by the end of 2022. Peloton is now about 90% less expensive than when I made this prediction last time. Why is that? Because Apple stock is up 50% and Peloton's is off 60% to 80%, meaning the dilution that a company like Apple would incur has gone from being a 3% to 5% dilution to less than a half a percent. In other words, they can pick this up right now for kind of spare change in the couches. It used to be not a bet-the-ranch acquisition, but an acquisition that would be a real blight if they got it wrong. In addition, Nike, which has a $250 billion market cap, Peloton's at $12 billion, it's no longer a bet-the-ranch acquisition for a firm

like Nike. It's an acquisition that, if they got wrong, would be an injury but not a career-ending injury. Put another way, Peloton's incredible shedding of market capitalization makes it an even more attractive target. And I do not believe this will be an independent company by the end of 2022. Why is Apple the most attractive acquirer? Because most of Peloton's problems have come from supply chain.

Who has the most robust supply chain in the world? Apple. Twitter hits $60 a share and Dorsey is ousted by June 2021. Okay, we got this right. Twitter's CEO, essentially incredibly negligent, deciding to spend

four to eight hours a week at what is, in my opinion, one of the most influential companies in the world. Once Elliott Management got on the board here, once there were real investors slash adults on the board, Mr. Dorsey was walking the green mile. I think he's incredibly innovative. I think he's a great CEO of Square, i.e. Block. I love that. Who do you work for? Block. Anyways, but he should have, the fact that it went on this long was ridiculous. I think this is a victory for corporate governance

and ultimately a victory for Twitter. So this is a company that has been a 10-year experiment in how it cannot compete with Google and Facebook. It needs to go to a subscription model. It needs to dramatically clear out all the toxicity and venom and bullshit in the bots and stop hiding behind bullshit like the First Amendment and command the space it occupies. This is the most influential company

with the greatest reach that is trading at such a low market capitalization, maybe with the exception of PBS or the New York Times. But this is a real opportunity for the new CEO to embrace a new business model and clean up the venom and toxicity in the sewer that is Twitter right now. It did hit $60 a share, and Dorsey was ousted, so we're giving ourselves that. Airbnb hits $200 a share and enters commercial real estate. Airbnb is my biggest holding financially. I love the company. I think the dispersion of

hospitality to these fallow assets called apartments, I think the CEO is fantastic. I think the move to relocate Afghani refugees or resettle was probably the most brilliant philanthropic move. It was needed, it was bold, did a lot of good, and it perfectly fit to the company's capacity to do something like that. You have a company that is probably the strongest brand in the history of hospitality. Nobody says, oh, I got a Hilton in Chicago. They say, I got an Airbnb. And it's been able to exit the stranglehold of Google and Facebook to acquire customers online. I think this is a juggernaut. And I think it will continue to rip higher.

I have not sold any shares. So the stock performance here has been pretty outstanding since the IPO where it priced at $68 a share. We predicted restoration hardware and other home stocks, including Sonos. We'd hit $1,000 and $40. I did not get this right. I got it partially right. Restoration Hardware is up 18%, which feels good, but let's be honest, underperformed the S&P. It had gone up substantially the year before. In sum, you have the GDP of Germany. You have $2 trillion to $3 trillion dispersing from commercial real estate, a $12 trillion asset class to the home. We are

not going back to work in anything resembling the same cadence or duration as we did pre-pandemic. So the result is that ratty carpet is going to become insufferable. You're going to decide to take advantage of low interest rates and upsize. For the first time in the history of the U.S., we have double-digit year-on-year housing prices increases in a low-interest rate environment. I think it's only going to get worse. I would hate to be buying a house right now, our first-time house. If you're selling a house and moving, fine.

You get, it's great to sell. It's terrible to buy right now, but I only see it getting better or worse depending on how you look at it. And we're going to see just this massive dispersion of that capital that was going into commercial real estate into residential. And Sonos did quite well. They did hit $40 a share and up 33% for the year.

We predicted that AT&T would divest Time Warner assets. This may not seem that bold now. It was bold when we made the prediction. AT&T had stated publicly they had no intention of shedding these assets and that they found tremendous synergy and opportunity in their content assets. And then, what do you know, a few months later, they decide to sell. I think this was absolutely the right thing to do. I can't think of a more cultural or a better example of a cultural misfit than Texas phone guys trying to deal with media execs in Los Angeles or New York. There was never any synergy

here. They overpaid for the property. Taking a step back from the wrong direction is a step in the right move. So AT&T leadership should be lauded for recognizing the mistake. We'll see how the new Discovery Plus, I think it's going to be called, shapes up. I believe this company will again be broken up. Why? Why? Because most media companies are either too expensive to buy or dual-class shareholder. The assets that include CNN and HBO and other iconic assets will be in play. They will be the only assets of this aspirational value that can be acquired. In addition, the shareholder base, which is constantly overlooked in terms of importance to a company,

is going to be the island of misfit toys. It's going to have legacy AT&T shareholders that are used to dividends. It's going to have some people looking for growth and willing to incur losses, but they'll be mixed together. The first time that Mr. Zaslav announces the calories of the expense of what's required to build a streaming network with the terrible taste of low growth. He'll pull off both of those things in one quarter, and his island of misfit toy shareholder base will throw up on that. The stock will be taken down, and somebody will move in and want either a breakup or want to acquire bits and pieces of what is the most iconic assets that are available in the universe over the next 12 months. We predicted that CNN would go behind

a paywall. Again, it doesn't seem that interesting now, but back then, they were stating that they had no interest in going behind a paywall. And the general conventional wisdom is that no one will pay for news. Well, we're about to find out. And not only that, not only that, who's following them behind a paywall? That's right. That's right. Chris Wallace, Holly Jackson, Anderson Cooper. I have no idea what they are thinking. No idea. work. So I was a WeWork bear, to say the least, and thought the $48 billion valuation was consensual hallucination between WeWork shareholders and the markets, which quickly unraveled. But they brought in a very seasoned real estate manager, Sandeep Matrani. I think it's a great concept. They got rid of sort of desk rental Jesus, cut a lot of costs, and also COVID came. COVID plays the hybrid work where a lot of companies, especially smaller companies, are going to want more flexible aspirational workspace with the fractured glass

and the IPA beer and reclaimed wood. I think the world is coming to WeWork, if you will. And we saw that and said at its recast valuation in the single-digit billions, this company made sense. And we were right. The company did get public. It's considered, it's doing quite well. It's flat since the offering to a little bit down, but let's be honest, this is a victory.

There was a risk this company was going to go bankrupt. There is an enormous structural shift around remote. I think we're underestimating what a huge impact that's going to have on society, whether it's our ability to meet people, whether it's how much time we spend with each other, the empathy we feel for people from different income or ethnic groups. I went to the movies the other night solely because I wanted to see, I want my boys to see more people that don't look, smell, and feel like them. And you are part of a collective when you share a sporting experience or a movie together.

And I think that connective tissue is really important. That's not what we're here to talk about. Although I did go to the Chelsea-Everton game and the Tottenham-Liverpool game. Hello, awesome! When I was in London, it just struck me how important it is for people who don't know each other to be in proximity with one another. And I think we really miss that. But having said that, these amalgams of steel, glass, and asbestos called office buildings are going to be like Peter Drucker reference. They're going to be like the Great Pyramids, and that is we'll come to marvel at them, but they won't serve any functional purpose. Think about this. Only 23% of Americans are back to work. Think about that. Our ability or our skill at renting our human capital to an organization has improved by leaps and bounds,

whether it's through Zoom, whether it's through different accountability metrics that the organization plays on you or puts on you. Think about the unlock here. Everybody thinks about this through the lens of what are the downsides of not being in the same room together. And there are some real downsides in terms of creativity, in terms of the kind of joie de vivre of being in the same room with people, and especially for the creative community or for high intensity jobs. But for the most part, you start from such a place of productivity. Think about how long it takes you to get ready to go to work when you are going to work, whether it's putting on a suit or a pantsuit, blow-drying your hair, putting on a clean shirt, getting to the mode of transportation, transporting yourself.

It used to take me, when I worked at Morgan Stanley at 1251 Avenue Americas, it took me 12 minutes from the moment I entered the building to get to my desk. Conservatively, all of that, all of that can take up to two hours a day. Times five through the week, that's 10 hours. Times 52, that's 520 hours. That's 13 weeks of time you're getting back if you can figure out a way to rent your human capital remotely. In addition, it costs somewhere between $20,000 and $30,000 for the corporation to house you in an office. So you're starting on January 1 with potentially three to four months of time, of additional time, and $20,000 to $30,000 to try and figure out how to bridge that delta between

the lost productivity of working remotely. I think that we're getting better at that. Bitcoin surpasses $50,000. Okay, that seems boring. It was $22,000 when we made this prediction. And it could have easily gone to two and everyone would have said, oh, well, of course it did. There was so much energy surrounding Bitcoin and so many smart people seemed so excited and so much capital had gotten in and said, I don't want to be sort of fear of being an idiot, phobia, is that what it's called? That I saw that, okay, you're about to get a whole entirely different asset class of investors who are going to invest in what will be the iconic property here. And that is a lot of people I felt were going to dip their toe into the crypto market.

And the shallow end of crypto is Bitcoin. It feels like the iconic cornerstone asset where you're unlikely to lose it all, but still gives you some exposure. We got that one right. I think it peaked at about $68,000. Roblox stock doubles from its offer price within six months. True story. I tried to find the CEO and invest in this company when it was a private company. One, because I read some incredible stats about Roblox. Get this, 50% of our kids under the age of 16 are on Roblox.

I also was very impressed with the amount of resources and people they were devoting towards content moderation. It's not perfect, but I think it's a lot better than some of the other social networks. And I love the idea of this distributed creator model where you essentially can create a game and it's up to the users to decide what games. They're the arbiters. It's truly decentralized gaming. I think this is an incredible company and wanted to invest.

And before the IPO said that this company was going to double in value. Well, I was wrong. Well, I was wrong. This company is up about 15x in value since its funding round in the private markets in 2020 when I was trying to get in. By the way, I did not get in. Video games, the entire video game sector is going to increase in value. Why?

Because as the Zuckerverse fails and all these people get all hopped up and horny for the metaverse, they're going to realize the linchpin or the content that drives the metaverse is gaming. FinTech will be the deep pockets, but gaming will be the hook or sort of the hero product.

And every gaming company is going to increase in value because it'll be rumored to be a great acquisition. The acquisition, the FTC and DOJ should not let happen, but would be the gangster acquisition for Facebook would be if they tried to acquire their acquired Epic, which I think will probably be the biggest or most successful IPO of 2022. But in sum, gaming is about to increase in value. There's really only two mediums growing that are of any real size, and that is streaming and video games. So let's talk about the following year, the next year, 2022. Can you get over that, 2022? Anyways, anyways, first off, our first prediction,

and I'm making the same predictions I was about to make when we were unable to deliver this a few weeks ago. I'm not editing it because I think that's cheating. But one of our predictions was the Times Person of the Year, which had not been announced yet, would be Francis Haugen. And I was so certain of this. Oh, my God. Hello. Wrong already. Wrong already. Who is Person of the Year? Yippee. It's Elon Musk. And at first I thought, OK, that makes no sense. And the more I thought about it, it in fact makes sense. Elon Musk does in fact mark the age. And Time's Person of the Year isn't someone, it's not meant to be someone who's aspirational or even popular or well-liked or even good for the world. Stalin and Hitler were both Person of the Year for Time, as was Donald Trump.

I'm not comparing any of them to the other. I think that's an insult to Stalin. Anyways, does that make any sense? Anyway, you get my meaning. But he does mark the age, right? Whether it's rockets, whether it's solar, whether it's EVs, incredible shareholder returns. Elon Musk, there's just no getting around it, marks the age. We have Tesla, which has a commanding share of the EV market, which is the fastest growing market and the most exciting market in manufactured goods. And we're seeing a change in business models. And I don't think you can underestimate the vision here. Specifically, my wrap around brand strategy, the sun has passed midday. And that is, I would argue, the 80s and the 90s were the brand era where you took a mediocre car, a mediocre shoe, a mediocre salty snack, and you wrapped it in amazing brand codes.

So American patriotism or European elegance or young and hot, whatever it might be, paternal love, maternal love, choosing mom's shoes, Jeff, pay $3 for this 30 cents of peanut butter paste. And that was how you printed money. And the icons of yesteryear, whether it was P&G, Unilever, or General Motors, adopted this algorithm of a mediocre product with incredible brown codes that they then pounded away using this incredibly efficient medium called broadcast media. Stuff the channel with your 60 to 80 points of margin and print money. That algorithm no longer holds. And it's really all about the product again and about innovation that's been unlocked with digital technologies. Next prediction, the Zuckerverse fails. This will be the biggest tech fail of 2022, hands down.

In July or August, we're going to start seeing all sorts of stories, hands down. And about in July or August, we're going to start seeing all sorts of stories, second-guessing, meta strategy, meta's name change, and they will probably leap for a huge acquisition in the second or third quarter when they realize this just isn't working. If you were able to establish a true metaverse, and right now we have metaverses,

whether or mini meta, call them mini verses. We have Twitter, we have FIFA, we have Fortnite, we have Roblox. But if there was one meta universe, the person who was in charge of that would effectively be the closest thing we have to a scientific God. So the idea that this might be a sociopath

and his lipstick on cancer at Facebook, basically being our God and goddess is not only frightening, it's dangerous. Coming up after the break. The 2022 business term of the year will be Super App. And that is there will be a race for super or specifically a company that tries to bring together several applications under one operating system.

And that is the Swiss Army knife of the Internet. Stay with us. Support for the show comes from Alex Partners. In business, disruption brings not only challenges, but opportunities. As artificial intelligence powers pivotal moments of change, Alex Partners is the consulting firm chief executives can rely on. Alex Partners is dedicated to making sure your company knows what really matters when it comes to AI. As part of their 2024 tech sector report, Alex Partners spoke with nearly 350 tech executives from across North America and Europe

to dig deeper into how tech companies are responding to these changing headwinds. And in their 2024 Digital Disruption Report, Alex Partners found that 88% of executives report seeing potential for growth from digital disruption, with 37% seeing significant or even extremely high positive impact on revenue growth. You can read both reports and learn how to convert digital disruption into revenue growth at www.alexpartners.com slash box. That's www.alexpartners.com slash V-O-X. In the face of disruption, businesses trust Alex Partners to get straight to the point and deliver results when it really matters. visitors, according to Indeed data, and a matching engine that helps you find quality candidates fast. Listeners of this show can get a $75 sponsored job credit to get your jobs more visibility at indeed.com slash podcast. Just go to indeed.com slash podcast right now and say you heard about

Indeed on this podcast. Indeed.com slash podcast. Terms and conditions apply. Need to hire? You need Indeed. The 2022 business term of the year will be Super App. And that is there will be a race for super or specifically a company that tries to bring together several applications under one operating system. And that is the Swiss army knife of the internet, mostly around transportation, mobility, food delivery, and payments, in addition to social, right? So we might have an operating system across everything from getting services to how we pay and receive and remit money to how we order groceries, deliveries, you name it, right? It all might be under one operating system that has one data set, which is very powerful. Now, why is it so powerful?

It's an attention economy. For every additional minute you get of an economy's time or of a nation's time, you get somewhere between $3 billion and $200 billion, depending upon the wealth of that nation and that cohort whose time you are capturing. American firms recognize this, and they are now, just as American firms were recruiting people out of big tech, big tech, or the four, are now recruiting people out of super apps. At Google alone, they've hired 300 people from Alibaba and Tencent just in the last five years. And two-thirds of those people, or 200, have been hired in just the last 24 months.

So they get how important Super App is, and they're now starting to poach from the true center of innovation, and that is India and China. I believe a key component of Super App will be some sort of social application, and that makes Twitter and Pinterest very ripe for acquisition. Pinterest is overvalued, but it's coming down. Twitter has come down. It's now at $40. If it goes into $30 range, you're going to see a lot of people start to sharpen their pencil. Specifically, Salesforce. The chairman of Twitter now is the co-CEO of Salesforce. The chairman of Twitter now is the co-CEO of Salesforce. My speculation is that it's

no accident that Mark Benioff, one of the most talented executives in the corporate world, decided to make a co-CEO about the time it was announced they were looking for a CEO. I would bet that Mr. Taylor, who's a very talented executive, was offered the CEO position at Twitter, went back to Mark, and Mark said, be chairman chairman and I'll make you co-CEO here. We know Mark Benioff wants the firm. He was talking about acquiring it when it was worth about $35 billion and his firm was worth about $80 billion, meaning it was a bet-the-ranch acquisition. But what's happened since then?

Again, similar to Peloton, Twitter has gotten a lot less expensive because its stock has gone nowhere. Meanwhile, Salesforce is worth $275 billion, meaning they can acquire it now for a 10% to 15% dilution instead of a 30% to 40%. So Twitter is now 60% off where it was the last time they thought about acquiring this firm. This means that Twitter and Pinterest are likely acquired, one or both of them, in 2022. And it'll be the nexus and one of the pillars for the first American company that'll claim super app status. So what would be unusual is if Jack Dorsey decided to reunite his sister wives and tried to acquire Twitter and said, we're the new Tencent. The company that says we are, in fact, the super app would get

huge momentum in its stock. I think the most likely acquirers will be fintech companies that have evaluations that the marketplace is very excited about but lack customer acquisition costs or lower customer acquisition costs, need to lower their customer acquisition

costs, and they lack people. In other words, Twitter sits on an incredibly shitty business model. What the fintech companies have is an amazing business model that the markets love, but they don't have the engagement or the customer basis of some of these social companies that sit on shitty business models. I think they can both solve those problems by reuniting. OpenSea valuation doubles. I'm actually a big believer in NFTs. A lot of people are calling it a scam. I think that Bitcoin and Ethereum survive, but the 90 plus percent of coins go away.

And there's going to be a lot of SEC and a lot of lawsuits filed around this. Now, why? Why am I bullish on NFTs? I think it comes down to sex, or simply put, art and collectibles are a function of signaling value through artisanship and power and money and resources. In pre-pandemic, this is how we met potential mates and friends. It's changed dramatically post-COVID. And that is all of a sudden, almost one in two relationships are starting online instead of one in five.

And how do you signal value when you can no longer pull up in your Maserati with your Rolex or however it is you try and signal value? The way you'll do this is with NFTs. And that is if you buy land on, is it Intraland? I forget what it's called. You'll be able to buy an NFT and signal your power and your worth as a mate online with NFTs. And just as we decided that having one Mona Lisa wasn't enough, so we would

create limited edition lithographs, two of 300, three of 300. The same thing's going to happen here. It's going to be all about signaling. It's going to be very powerful. I don't see why it's any less historic value of crypto. And I'm actually more bullish on NFTs. The thing I'm most bullish on is DAOs, the ability to decentralize the collection of capital for sole purpose or special purpose vehicles, I think, is very exciting. And we're going to see a lot more of it as soon as the gas fees or the transaction fees go down. This is how we used to signal, right? Order the 1942.

I'm a total douchebag, but because I order $120 tequila, it makes me interesting. Or I'm going to buy a really nice watch that I never look at, that I look at my iPhone for time, but I'm trying to signal masculinity. This is $2,000 of movements, steel and rubber that I paid $11,000 for so I can fill 56 again. Or a Birkin bag, what have you. NFTs are the new signaling. And we're going to see it across these metaverses. There will be sort of a symbiotic relationship between these metaverses and NFTs. Both will rise in value together. We're going to see an explosion

in the value of OpenSeas, and we're going to see an explosion in the value of iconic media and sports franchises. I think the value of everything from the Glasgow Rangers, go Rangers, go! Most storied football club

in the United Kingdom. We're going to see the value of every football team. That's what they call it over there. And every iconic media company that has assets, whether it's the still of Samuel Jackson and John Travolta pointing a gun at somebody. But these assets have probably increased 20 or 30% in value just because they're so NFT-rich.

I think Real Madrid, you're going to see record prices paid for sports teams and anything that a visionary says, I can probably begin extracting or mining an entirely new source of cash flow in the form of NFTs. I think DAOs are very exciting. We talked about the opportunity. The public or the private to public pop is basically you increase the potential supply of investors. And the same type of pop will probably happen to DAOs

where you can gather 10,000 plus people to organize around a sole objective around acquiring something. Okay, let's talk about the world of Elon Musk. I think effectively, you have Boom and Boring are going to increase in value. Virgin Galactic are going to go down. That's not Zuckerberg. But I think in terms of transportation, Boom, a supersonic company, and the Boring company are going to go up in value. I think Virgin Galactic could potentially go bankrupt or be sold for its IP. I think this company has demand constraints. I don't think there's that many people who pay $400,000 to go up 60 miles and float back down over eight minutes, and it's supply constrained. If they execute perfectly, they'll have capacity of 1,600 seats in 2025. I don't say this lightly, but that entire industry could be over in a flash. I predicted Virgin Galactic was a train wreck.

I did get this one right. The same day I said Alibaba was undervalued, that's gone down 30%, so I got that one wrong. And I think that the opportunity in transportation is about fast, not far, and we're going to see Supersonic make a comeback. I'm trying to invest in Boom. I think getting to New York

in three and a half hours from London is a huge value proposition. The richest people in the world have effectively built time machines that unlock our ability to spend more time with our families. Boom says you can get you from New York to London. The technology is much better

in three and a half hours versus six and a half hours, which I think is an enormous market to reunite the continental shelf. I also think boring moving underground and decreasing our commute time. Again, another time machine and unlock is super, super exciting. I'm going fast because I'm running out of time. I also think the last mile is incredibly exciting. Companies like Joker, Hybe, there's just some amazing last mile companies. It's sort of a reinvention, just as the Concorde was too early.

Urban Fetch and Cosmo were good ideas, but they were too early. I think what's really interesting is the notion of a 10-minute city, which Seoul is trying to produce for your 10 minutes from everything you need. Another prediction, I think fundamentals and valuations reunite. GameStop and AMC are below $10 a share, and the entire EV market is cut in half. I think there's a decent chance it could go down 80%. If Tesla went down 80%, it would still be worth more than Ford and General Motors. There are three reasons companies trade. They trade because of fundamentals or technicals or

stories or movements, which has been total bullshit. I still can't find any of these young people who supposedly their parents lost their house and this is their way of screaming or howling at the moon. All I see is a bunch of rich rowers from Harvard and the wealthiest man in the world pumping and dumping based on quote unquote, them being William Wallace. They're not, they're the King's guard.

These stocks were the most talked about stories in all of news. Keep in mind, right, the top searches for Google were these stocks. I don't think that's sustainable. And once they no longer become movements or brands, people are going to look at the fundamentals. And the bottom line is AMC and GameStop are shitty businesses, and they will reunite their valuation with the above term, shitty. The EV market, dramatically overvalued. I have been so wrong on this for so long, but I'm doubling down.

Call me a broken clock. Okay, when you don't have anything resembling a rational valuation, increase your TAM to climate change. Lucid is combating climate change. Rivian is sustaining life and enchanting our future generations. So they must change. This is where Rivian's potential lies.

Give me a fucking break. They're producing, they're bending steel and producing cars. By the way, I ordered a Rivian. I got 1.4 thousand likes. Very exciting. Even funnier, VC Braggs said,

rest in peace based on my purchase Rivian and I got 4,000 likes. That's funny. Anyways, space hauling is the exciting part of the space ecosystem. Space tourism is a ridiculous business that will end in tears if not a flash. I think Virgin Galactic continues to tank. It's already off 70%. And I think SpaceX is going to be worth more than Tesla by 2025. The morning news was

breathless with these ridiculous faux launches for all humanity. As a matter of fact, they spent more time covering these launches in the climate crisis. And as a result, these companies are tremendously overvalued. And the people that know these companies, specifically Virgin Galactic, are doing one thing. They're selling and they have been selling. Space tourism, space is a dangerous business. It has 41 degrees in New York. It's a balmy minus 102 in Mars. I will give you this. The view will take your breath away. Literally, there's no oxygen on Mars. And the radiation means slowly but surely your bones melt. This is a ridiculous premise. Space tourism, space exploration are stupid ideas. The real money is around space hauling. Why? We're going to go from 3,000 satellites to 50,000, and we need to put that stuff up

as efficiently as possible. SpaceX is blowing away the competition prediction. SpaceX is worth more than Tesla by 2025. We're going to see fintech firms acquire a lot of media companies. I believe that PayPal had the right idea going after Pinterest. I think it still might happen. They're just going to wait until Pinterest becomes less expensive and they go up in value, again, making Pinterest less expensive on a dilution value. We talked about the firms, what they need from one another.

We're going to see a lot of acquisitions of smaller content companies and things like newsletters. There will be very few independent content companies as they'll be snapped up for their passion, their NPS, and their engagement, which fintech companies can better monetize. I think we're going to see a Lux coin emerge. I think the ultimate gift from that midlife crisis guy to his fourth wife would be a coin that says you can have any 10 Chanel products out at any given time, plus a stylist. How much would that coin go for? I don't know, $100,000, $500,000? It'd be an easy way, literally an easy way, for Chanel to raise half a billion or a billion dollars overnight. I also think this might happen to universities. I don't

think this is a good thing, but I can see an organization like Stanford saying, if you pass certain entry requirements, because the hardest thing about Stanford is getting in, one person in your family can be pursuing a degree from Stanford at any time. You get lifelong learning, access to our community, access to the incredible content of our campus. What would a Stanford coin go for? We're only going to issue 100,000 and then that's it. We'll grow 4% a year. You'd say, well, it would just be all rich people. Rich people could buy coins and then designate them for low-income families. There'd be a way to try and make it more diverse. But I think overnight, Stanford, think about what would that coin go for? Anyone in your family can get a degree from Stanford if they meet certain

entrance conditions. Not the bullshit that our rejectionist culture goes through now, but just say you have to be competent enough to get a degree, which isn't that competent. But right now, we have a business model where people spend a ton of money over four years, and then we don't hear from, we don't contact you, and then we ask you for millions of dollars when you hit your 40s or 50s if we do a Google search and it ends up you work for a tech company. This will stretch over a lifetime. It'll change to lifelong learning, and we're going to try and figure out a way to monetize

one of the strongest brands in the world. It's not Apple or Google or Amazon. It's MIT, Stanford, and Harvard. I also think you could see a health coin, and that is Langone or Jackson Memorial or Cedars or Mayo would say, cradle to grave, your entire family, all the health care, the best health care. What a great gift for your family, for your kids. Give them a Langone coin and you know the entire family has health care.

Gets rid of the development department, gets rid of admin, gets rid of paying, gets rid of insurance. What would that coin go for? Overnight, these organizations could raise tens, if not hundreds, of billions of dollars. The Stanford endowment overnight could go from $42 billion to $142 billion. I'm not saying it's a good thing. I think it's going to happen. We're going to see a luxury brand leverage its scarcity and these technologies to produce a Lux coin.

Clean energy reconsidered, a little bit of a crusade here. If I told you there was a carbon-free, reliable energy, proven energy 24 hours a day, and that it was containable in terms of its externalities or its emissions, and a single generator could produce enough electricity to power all the homes in Philadelphia, we have it. It's been terribly branded. We need about 115,000 square miles of solar panels to get to power Earth. Or basically, we need to cover France in solar panels to fuel the Earth. I got a lot of shit for this because people are just so in love with solar and wind. I think they're great, but I don't think it's enough. And I think we should reconsider nuclear. And like that bumper sticker in the 70s said, more people have died in Ted Kennedy's car than a nuclear power plant. That is no longer true. More people have died in nuclear, but it's still one of the safest energy producing technologies. And I think it needs a rebrand. And I think it's part of any

serious sober conversation or how we attack climate change. The new Miami and Austin. I like cities. I think they're fascinating. 20 super cities will be responsible for two thirds of economic growth. One of the pieces of advice I give to any young person is get certified and get to a city as soon as possible. It's the best place to find something interesting to do,

the best place to find a mate, the best place to rally with people better than you on the court, which will make you a better player. I think the new city, if you will, or the city that's going to become very hot, it's not Miami, it's not Austin, I think it's Mexico City. Travel and leisure is destination. I'm biased. I absolutely love Mexico and I've been going there four or five times a year since I was a kid, but I think Mexico is about to have its moment in the sun. Specifically, Mexico City, which has a huge population, an educated population, a dense population, also is attracting a ton of visitors who want a lower cost of living. They don't have their head up their ass. They haven't politicized vaccines. 99%, get this, 99% of residents in

Mexico have had at least one dose of the vaccine. We're also seeing it's essentially COVID-free at this point. Dangerous words to say. Also, as companies look to diversify their supply chain, they will look for greater proximity. Mexico offers a great cocktail of lower regulation, lower wages, but greater, obviously, much, much better proximity to the United States. So, let's summarize. The Zuckerverse fails. The business of fast exceeds the business of far. Open sea valuation doubles. Twitter or Pinterest is acquired. Space hauling dramatically outperforms space tourism or space exploration. The value of the EV industry gets halved. Meme stocks

reunite with fundamentals and decline. The new city is Mexico City. Some form of Luxcoin emerges. Fintech becomes the ultimate acquirer of a lot of media firms. Francis Haugen is the Times First of the Year. Wrong. And our biggest regret will be what we have done to our teens at the hands of big tech or letting it happen.

Our top stock picks, Twitter again, OpenSea, SpaceX, and I'm going to throw in Alibaba as I believe Xi Jinping is wrapping the knuckles, not cutting the hands off of Chinese tech firms. And right now Alibaba is essentially Amazon at 70% off. I think it's going to come ripping back.

Algebra of happiness. I wrote in my blog that my cousin Andy had passed away last week and people have been very nice and supportive. So thank you. I was not close with Andy. I was closer with him when I was a young man. Andy was 52, tall, strapping, handsome guy who was in perfect health, diagnosed with COVID along with his 80-year-old mother and 55-year-old sister. His sister and mother were fine. He was admitted to the hospital with pneumonia, and it looked like things were getting better, and then crashed and died one morning. And, you know, entire family shocked. Andy chose not to be vaccinated. And this is not a lecture about getting vaccinated. If you're not vaccinated, I don't think there's any reaching at this point.

What it struck me, and I hope that people take away from, or I'm taking away from this tragedy, is that Andy and I really liked each other. And we were friends, very similar, both the kind of the oldest boys of that generation. He lived with me between my first and second year of graduate school, came over from London and

lived with me in Los Angeles when I was doing my internship at business school. And we just liked each other a lot. And we lost touch. And I kept thinking, well, why did we lose touch? And I think some of it is that because my career, I've been very fortunate. I've had a rewarding career and I've had a little bit of fame and people stay in touch with me. And that is they reach out and I become very spoiled. And that is people tend to make more of an effort with me because they see something I've written and they ping me. And as a result, I don't make much of an effort to stay in touch with people because I assume everyone else is going to stay in touch with me. And the majority

of people aren't going to do that because why would they? Why would they make all the effort? And I think that's what happened with my relationship with Andy. Life gets in the way. And I never made kind of the requisite or the reciprocal effort to maintain that friendship. And nothing gets in the way like death. And I will never speak to, see, or spend time with Andy again. The real tragedy here is not my friendship or relationship with Andy being capitated, but that he leaves a nine-year-old son or survives a nine-year-old son. But the lesson that I take away, and I hope all of us take away, is that, and I'm doing this, is I'm writing down a list of people that I care about,

and I think I would really enjoy extending and cementing the relationship, but I'm going to not assume that the responsibility for staying in touch is entirely on them. So if you have the time, put together a list, and it can be a small list of people that you, for whatever reason, have lost touch with, but you would enjoy reaching out to and re-engaging with because you just, more than,

or not more, but as much as this tragedy, the thing that was so just striking about it was just how shocking it was. No one, no one saw this coming. Our producers are Caroline Chagrin and Drew Burrows. Claire Miller is our assistant producer. If you like what you heard, please follow, download, and subscribe. Thank you for listening to the Prop G Pod from the Vox Media Podcast Network. We will catch you next week on Monday and Thursday.

2022. Support for the show comes from Alex Partners. Did you know that almost 90% of executives see potential for growth from digital disruption? With 37% seeing significant or extremely high positive impact on revenue growth. In Alex Partners 2024 Digital Disruption Report, you can learn the best path to turning that disruption into growth for your business. With a focus on clarity, direction, and effective implementation, Alex Partners provides essential support when decisive leadership is crucial.

You can discover insights like these by reading Alex Partners' latest technology industry insights, available at www.alexpartners.com. That's www.aleixpartners.com slash V-O-X. In the face of disruption, businesses trust Alex Partners to get straight to the point and deliver results when it really matters. Support for this podcast comes from Klaviyo. You know that feeling when your favorite brand really gets you. Deliver that feeling to your customers every time. Klaviyo turns your customer data into real-time connections across AI-powered email, SMS, and more, making every moment count. Over 100,000 brands trust Klaviyo's unified data and marketing platform to build smarter digital relationships with their customers during Black Friday, Cyber Monday, and beyond.

Make every moment count with Klaviyo. Learn more at klaviyo.com slash BFCM.