Scott Galloway Explains Who Gets Hosed From WeWork’s IPO Disaster

NYU Professor of Marketing, Scott Galloway, explains who is affected most by WeWork’s postponed IPO. Between J.P. Morgan and SoftBank, SoftBank is going to see the impact sooner.

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Scott Galloway Explains Who Gets Hosed From WeWork’s IPO Disaster

Jeff Bezos On Breaking Up And Regulating Amazon

Amazon CEO Jeff Bezos and Axel Springer CEO Mathias Döpfner discuss the need to regulate large tech companies, the possibility of breaking up Amazon, and the importance of scrutinizing big institutions.

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Following is a transcript of the video:

Döpfner: But, your most prominent critic at the moment is the President of the United States. People are even saying that he may be willing to prepare initiatives to break up Amazon, because it’s too big, it’s too successful, it’s too dominant in too many sectors, or for varied other reasons, including the fact that he doesn’t like the “Post”. Is this break up scenario something that you take seriously, or do you think it’s just a fantasy?

Bezos: For me again, this is one of those things where I focus on and ask our teams to focus on what we can control, and I expect – whether it’s the current US administration or any other government agency around the world – Amazon is now a large corporation and I expect us to be scrutinized. We should be scrutinized. I think all large institutions should be scrutinized and examined. It’s reasonable. And one thing to note about is that we have gotten big in absolute terms only very recently. So we’ve always been growing very fast in percentage terms, but in 2010 just 8 years ago, we had 30,000 employees. So in the last 8 years we’ve gone from 30,000 employees to 560,000 employees. You know in my mind I’m still delivering the packages to the post office myself. You see what I’m saying? I still have all the memories of hoping that one day we could afford a forklift. So obviously my intellectual brain knows that’s just not the case anymore. We have 560,000 employees all over the world. And I know we should be scrutinized and I think it’s true that big government institutions should be scrutinized, big non-profit institutions should be scrutinized, big universities should be scrutinized. It just makes sense. And that’s, by the way, why the work at the “Washington Post” and all other great newspapers around the world do is so important. They are often the ones doing that initial scrutiny, even before the government agencies do.

Döpfner: The general sentiment concerning the big innovative tech companies has changed. Facebook, Google, Amazon, Apple – they used to be seen as the nice guys in T-shirts that are saving the world. Now they are sometimes portrayed as the evil of the world. And the debate about the Big 4 or the Big 5 is heating up: Professors like Scott Galloway and “The Economist” are suggesting a split-up, other powerful people like George Soros are giving very critical speeches at Davos, and the EU Commission is taking pretty tough positions here. Do you think that there is a change in the mindset of society, and how should the big tech companies, how should Amazon deal with that?

Bezos: I think it’s a natural instinct, I think we humans, especially in the western world, and especially inside democracies are wired to be skeptical and mindful of large institutions of any kind. We’re skeptical always of our government in the United States, state governments and local governments. I assume it’s similar in Germany. It’s healthy, because they’re big, powerful institutions – the police, the military, or whatever it is. It doesn’t mean you don’t trust them, or that they’re bad or evil or anything like that. It’s just that they have a lot of power and control, and so you want to inspect them. Maybe that’s a better word. You kind of want to always be inspecting them. And if you look at the big tech companies, they have gotten large enough that they need and are going to be inspected. And by the way, it’s not personal. I think you can go astray on this if you’re the founder of a company – one of these big tech companies, or any other big institution. If you go astray on this, you might start to take it personally. Like “Why are you someone inspecting me?” And I wish that people would just say, “Yes, it’s fine”.

The Psychological Reason Why Being Open To Failure Often Leads To Success

Scott Galloway, professor of marketing at the NYU Stern School of Business and the author of “The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google,” shows how some of the biggest successes in tech have also had major public failures. He explains why failure is an important aspect of success. Following is a transcript of the video.

Scott Galloway: So there’s a famous chart that shows — it says, what people think success is and it has a straight upward line and then what success really is, and it’s a jagged, multi-art adventure. And that is accurate.

Scott Galloway, professor of marketing NYU Stern and the author of “The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google.”

If you are not in your own professional life and your professional career kind of wiping out and getting beaned in the face every once in a while, you aren’t trying hard enough. And these companies are great at failure.

They’re fantastic at taking big risk. Putting metrics on them and just as importantly pulling the plug and performing infanticide on projects that aren’t working and then moving on to the next thing. Whether it was auctions or the phone with Amazon or Facebook and some of their targeting, all of these companies have had huge missteps, but it just doesn’t matter because they on average win.

They have a great batting average. And as Jeff Bezos said, they’ll take a risk, a one-in-10 risk if they think it can pay off 100 times.

That isn’t the way traditional companies think. Old-economy companies typically won’t green-light anything unless it has more than a 50% chance of winning, and then even worse than that, after it’s launched, and it’s become the pet project of people at the top, everyone else enters into consensual hallucination with the CEO that this thing is working and sometimes let this kind of gross, ugly child live longer than it should.

So, one, these companies are more disciplined about taking more risk, but they’re also more disciplined about pulling the plug on these things.

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Why Peter Thiel Is Wrong About Dropping Out Of College

Peter Thiel is offering a $10,000 fellowship to young entrepreneurs who drop out of college. While it’s tempting, Scott Galloway reveals why it is awful advice. Following is a transcription of the video.

Scott Galloway. Professor of marketing, NYU Stern. Despite how outrageously expensive college is, it’s still a pretty good plan B.

If a billionaire shows up and offers you $100,000 to drop out of college, punch that person in the face.

It’s sort of, in my opinion, obscene that a billionaire with an undergraduate degree and a graduate degree is running around the nation trying to convince people to drop out of college.

It appears that it worked pretty well for him. If you look at new millionaires over the last 20 years, the vast majority of them have two things in common.

One is they work out every day. Physical fitness is very important in terms of your own levels of confidence and avoiding things like depression and having more energy every day.

But the number one thing all these folks have in common?

They went to college.

I just think it’s obnoxious that a man who went to Stanford and then got a law degree and became a billionaire off of the credibility he was able to raise money off of is now telling kids to drop out of college.

I think it’s f—— obnoxious. I mean if Steve Jobs or if Bill Gates was doing it, they have some credibility or some license to say it, but a guy with a graduate degree?

Drop out of college?

I tried to do this through Berkeley, and they didn’t want to do it.

I said to Berkeley, I said ” I’ll give kids, pick 10 smart kids”– I just endowed a scholarship at Berkeley and said “let’s track 10 of them versus the 10 that Thiel… and we’re going to win.”

And they said, “well, we don’t want to embarrass the other kids.”

But who would you bet on? 10 Berkeley grads, who are smart students with a college degree or…

There are always going to be the JAY-Zs of the world. There’s going to be the Kobe Bryants. There’s going to be the Mark Zuckerbergs, the people that drop out of college.

You should assume you’re not that person and go to college.

Editor’s note: A previous version of this video stated that the Thiel Fellowship offers $10,000 to its fellows. The actual figure is $100,000 and has since been corrected.

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Scott Galloway Says Amazon, Apple, Facebook, And Google should be broken up

At Business Insider’s IGNITION conference, Scott Galloway gave a blistering presentation on why “The Big Four” — Amazon, Apple, Facebook, and Google — should be broken up. Galloway is a professor of marketing at the NYU Stern School of Business and the author of “The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google.”

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IGNITION 2017 LIVE – Day Two: Morning Session

BUSINESS INSIDER’S FLAGSHIP CONFERENCE IS BACK!
Convene the biggest names and most innovative leaders in media, marketing, and technology. Add Business Insider’s unique blend of hard news and big ideas… and you have IGNITION.
Featuring: Henry Blodget, Scott Galloway, CNN president Jeff Zucker, Lawrence Lessig, Tucker Carlson, New York Times executive editor Dean Baquet, Washington Post executive editor Martin Baron and Emily Bell, founding director of the Tow Center for Digital Journalism at Columbia University.

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Why Retail Businesses Should Hire Humans, Not Robots

Scott Galloway, professor of marketing at NYU Stern School of Business and the author of “The Four: The Hidden DNA of Amazon, Apple, Facebook and Google” says that employing a huge fleet of robots does not always benefit a business’ bottom line. Human employees offer an advantage for retail businesses even during a time when tech companies are increasingly pushing robots as replacements. Following is a transcript of the video.

Scott Galloway: To give you a sense of just how powerful Amazon is, when Amazon opened one store, Amazon Go — whose key feature was that it used artificial intelligence to get rid of cashiers.

Effectively, you heard this giant scream across the US labor force where of the 11 million cashiers in the US — that’s more than primary teachers in terms of actual numbers — about 3 of those 11 million probably lost their job. They just don’t know it yet.

And in every retail boardroom, we’re talking about store optimization which is Latin for “fire people.” I believe however the opportunity in retail is to invest in not artificial intelligence but organic intelligence.

People no longer go to stores for products. So the winners in retail, The Home Deports, the Best Buys, the Sephoras are investing in their “Blue Shirts,” their “Golden Aprons,” and their “Cast.”

Because if you are going into a store, you want someone there. You want the most impressive supercomputer in the history of the world. And that is an individual who is well-trained.

So while tech is zigging, there’s an opportunity for retail to zag. Starbucks is the original gangster here, spending more money on benefits than they do on coffee.

When you go into a Starbucks you feel better about the experience because the person behind the counter, the barista, actually seems to be enjoying their job, or feel as if they are getting paid well and learning something.

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Scott Galloway On Why Amazon Is So Successful

Scott Galloway, professor of Marketing at NYU Stern and the author of “The Four: The Hidden DNA of Amazon, Apple, Facebook and Google”, explains how Amazon’s “Type 2” investments are the key to its incredible success. Following is a transcript of the video.

Scott Galloway: So people ask what Amazon’s core competence or advantage is, relative to the other members of the four and it comes down to storytelling. And that is Jeff Bezos’ essential rap has not changed in 15 years and it’s a pretty intoxicating visionary rap, where they’re gonna invest massively across some consumer truisms that aren’t perishable: value, convenience, selection, speed.

And the marketplace keeps bidding up the stocks. As a result, they have access to cheaper capital than any company in modern history. Amazon can now borrow money for less than the cost of what China can borrow money. As a result, they are able to throw up more stuff against the wall than any other firms. If the phone doesn’t work, if it fails, if auctions don’t fail, it’s a speed bump for them, whereas, other companies will probably be either put out of business or see their stock cut in half.

Some Plan B investments that had worked, they launched a company based on their own infrastructure and storage needs called “AWS” that now everyday, adds the entire capacity that they needed when they launched it for themselves internally, and is the number one share leader and what is the most profitable, fastest-growing business in tech to cloud with triple the share of the number two, Microsoft. This year, Amazon will spend $4.5 billion on original television content, second only to Netflix, who increased their budget to $2 billion when they heard Amazon’s footsteps behind them.

Amazon can go into non-core categories and show up and be dominant in record time because they have access to cheaper capital. Effectively, this company is playing unfair and winning.

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Scott Galloway Predicts Who Amazon Should Acquire Next

Amazon purchased Whole Foods a little less than four months ago. Whole Foods products are already appearing on Amazon, and Alexa devices have made it to the shelves of Whole Foods.

With this just the latest in a long list of companies Amazon has acquired, we were wondering who would be next. To answer that question we brought in Scott Galloway, a professor of marketing at NYU Stern School of Business and the author of the new book, “The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google.” The following is a transcript of the video.

Scott Galloway: Next acquisition for Amazon would be Nordstrom. I think the most logical, or strategically rational, acquisition for Amazon would be Nordstrom.

Amazon now has a license to get into the wealthiest refrigerators in the nation. And they are targeting the wealthy with their acquisition of Whole Foods, but they still don’t have license or permission to get into our closets because the aspirational beauty and fashion brands don’t want to distribute through Amazon; however, buying Nordstrom would get them those relationships overnight.

Nordstrom is an exceptionally well-run company. They’re in Seattle. This thing just fits kind of hand-and-glove; however, there’s an X factor here. And the X factor is that Nordstrom is family controlled, meaning the decisions are made around the Thanksgiving dinner table as opposed to its shareholder meeting. So we’ll see.

But likely the acquisitions that’ll take place will be little unknown companies that help fill out, or fill in, some holes in their fulfillment network. But you can also see the company going after some niche cable networks, maybe an AMC or a Scripps, as they realize original content creates intensity across those 60% of US households that are now Prime members by going in and picking up some cable broadcast companies.

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