Deep Cuts at Twitter, FTX Hack, and Friend of Pivot Joe Coscarelli

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Hi, everyone.

This is Pivot from New York Magazine and the Vox Media Podcast Network.

I'm Kara Swisher.

And I'm Scott Galloway.

How you doing today?

What's going on?

What's happening?

Today's a good day.

I had lunch with this super smart guy named Andy from

JP Morgan.

So I'm making friends.

I'm trying to get out and have play dates.

You need to have play dates.

Yeah, I do.

It's really critical for you.

You need little friends to hang around with.

100%.

I was thinking about you.

I was watching The Crown.

I'm catching up on The Crown, the new season.

Yeah.

It's quite good.

I remind you of Camilla.

That's who I remind you of.

No, she has more hair than you do.

So no.

No.

And Camilla's underrated.

Anyway, I love the crown.

It makes me think of Britain.

I really like it.

It's really good.

The Queen is pretty pissed at Prince Charles.

But anyway, today we'll talk about Twitter's rapidly shrinking workforce and also the mystery of FTX's disappearing funds.

And we'll speak with New York Times Joe Coscarelli about how Atlanta has become the center of hip-hop.

He's one of my favorite writers about us, and he does an amazing online interview show with a lot of musicians.

I think he could give us some insight into where the music business is going too.

But first, the New York Times is reporting that Amazon will lay off nearly 10,000 employees.

The cuts will come from its retail and HR divisions, probably as expected, as well from its devices team, which works on things like Alexa.

This is not as many.

They hired so many people over the pandemic, 500,000, something like that.

Also, at Disney is planning to freeze hiring and cut jobs, according to a memo from Bob Chapic.

The company will look for every avenue of operations and labor to find savings.

The company's streaming service lost almost $1.5 billion last quarter, and Chapic has promised streaming will become profitable by 2024.

The new Star Wars show is getting great reviews called Andor, which many people love.

And more layoffs, right?

That's really what's happening.

It's a there's a time to plant and a time to reap.

Or a time to kill.

There's, yeah.

Yeah, look, who would have thought it?

We've been talking about this for a while.

And if you just look at the math, if you look at the expense, the exponentially increasing expenses around growth companies that are usually people,

you have

and you have revenues that are coming out of the pandemic as sort of pre-pandemic and that as they're declining, they all lead to the same place.

Same place.

The only thing, the only suggestion I would give to these companies, I'm having a lot of these calls right now with CEOs and the CEOs of the boards I'm on, go deeper than you want because

Americans and CEOs are just naturally very optimistic.

And they like to think that any correction is just a V and it'll snap back very quickly.

They do.

You've talked about this a lot.

For company to want to not cut more, correct?

I mean, that's really.

Yeah, but your ability, the way I see it is one, when you go deeper than you want, it's like laying off people.

And I realize these are real people.

But first off, these folks are the most rehireable people in the economy.

Yes.

These are overeducated people

who are very talented and work for the ones we're talking about, who work for places like Amazon and Disney.

Their problem won't be getting another job.

Their problem will be that they're under the delusion that they're more important than they are.

And that is they will go to an organization and they'll expect to get four days of pet bereavement leave.

And that is

they have had a marketplace that has told them over and over and over, whatever you want, whenever you want, you're special.

And when someone tells you you're special, it's easy to believe them.

Sure.

And they were special.

Let's just say they did get things for a long, this has been what, 15 years of this, 13 years of this.

Yeah, it's been so

in human nature.

When the markets are good, you don't go, oh, things are crazy and irrational.

What you say is, oh, this is normal.

And then when they collapse, you go, okay, this is an exogenous event.

Now, maybe this is the return to normal.

But you're going to see,

my prediction is simple.

You mentioned Amazon and Disney's layoffs.

Times that by three to five.

That's the number of people who will be laid off in the next 24 months.

We have an increasing interest rate environment.

It's going to do its job.

People are going to stop, are going to start spending less money.

Disney actually had really robust park attendance.

It's got an amazing business, but it's in an arms race and it's spending too much money.

Amazon way overhired, way overhired.

Right.

But every great company, I don't, any company you look at that we talk about has gone through periods where they realized they got out over their skis, they grew too fast in areas that didn't pay off, and they got a criminal rationalist.

And the wonderful thing about America, and what I tell my CEOs, is the faster you move to fire, the more generous you can be with people.

I mean, it just makes sense.

If we might have fired you in three months, fire them now and give them six months, not three months, severance.

And also, the wonderful thing about America is that the faster you let a company fire people without the government getting in the way or regulation, the faster you can rehire them.

It is not easy to get hired in France because guess what?

Every company goes, Jesus, let's think twice because it is impossible to fire this person once they are on the payroll.

So

it's easy to tackle from the steep seats.

I know it's still, there's still pain.

I think it's, I think it's, this is a generation people used to up and to the right, and it's not up and to the right.

And, you know, I know a few people have been laid off.

And I saw one of them last weekend in New York who I'm not going to say the company they work for, but they were asking me, when do you think the IPO is going to be?

And I said,

maybe you should think about when the layoff is going to be.

And that company laid off right away and they got laid off.

And it was interesting because they were waiting for this IPO to happen.

There are no IPOs.

I mean, literally, there are no IPOs.

Well, exactly.

But it still was this idea.

They were in this head, like, oh, it's just a delay of the IPO.

I'm like, no, they're going to, they have to lay off.

They have, if they're going to get to an IPO.

And that's exactly what happened at Airbnb before he went, did the IPO.

Anyway,

interesting times and more to come, we suspect.

Would this be a bad time to ask Bankoff to pay for my vasectomy?

Yes, it would be.

That would be a bad.

Look, Fox is not going to escape this either.

Never mind.

I'll do it myself.

No company is going to escape this.

None.

Very few few companies.

Yeah, agreed.

Anyway, Apple and Epic are back in court.

Epic will once again argue against Apple's restrictions on third-party payment processes.

This is the thing they sort of lost.

This time, before the Ninth Circuit, the appeals court ruling may take up to six months.

If the cases go to the Supreme Court, it likely won't be resolved until 2025.

If Apple is successful, could companies leave iOS entirely for payments?

OpenSea, one of the most popular NFT marketplaces, already does this.

You can't buy NFTs in its iOS app, pushes you to the desktop browsers.

Apple is getting more aggressive with its 30% cut.

Last month, it announced that it will take a cut of boosted posts on social media networks like Facebook and Twitter.

That's advertising, essentially.

So this will be an interesting case.

This is just going to wind on forever.

Apple kind of won the last round.

Eventually, there'll be a resolution, but it's not going to be for a long time.

I don't know.

What do you think?

Yeah, this is...

This is actually, so there's news and there's noise.

This is news, and it really is monopoly behavior.

And what's so extraordinary about this, it's one thing,

I mean,

I'm a shareholder in both Epic and Apple, and I am absolutely 100% on Epic's side here.

And to me, this feels like you buy a jacket and the retailer gets a gross margin on it.

And essentially, Apple is a retailer here.

But then every time you use that jacket, you're supposed to pay,

you know, Super Dry or Canada goose again.

I find it very strange that just because you have the app,

any purchase within the app, you then have to spiff back to the mob.

I mean, it feels

called a vig.

A vig.

Yeah.

And

if there were more than two app stores, and really, there's really only one app store for anyone who is a storyteller, is wealthy, or has any opportunity for a random sexual encounter, that's called an iOS user.

Yeah, but there's their Android's big.

But go ahead.

All right.

You know what, Carol?

Let's be honest.

When you have Android, it kind of is like saying to the world, you know, life didn't pan out the way I'd hoped.

My brother just shifted from Android to Apple.

He has to come over.

Yeah.

And I mean, it's sort of like when you roll up in a Mazda or you carry a Discover card, nothing wrong, nothing wrong with it.

But it's kind of saying, you know,

things haven't really panned out.

No, that's not true.

That's not true.

100%.

All right.

In any case, it's a big big.

So they have a monopoly on the 14% of the wealthiest people globally.

And it's one thing if you have a monopoly and you charge 30%, which on its own feels like predatory pricing to me, but then anything you do in-app from that point forward so i think the argument they may make is it's not a commission for the app store it's the price of using ios if you want to do any transaction on ios

but they get 80 margin it's like a 20 billion dollar i'm not even talking about the app economy or the initial big on the initial purchase but the in-app purchases post download of the app they get something like 20 billion dollars at 80 points of margin we've just it's a good business it's a good business.

I think this will be an interesting case.

And

they did lose on the first round,

Epic did.

But they're going back and forth.

You know, they were very confident they were going to win in the courtroom here in D.C.

But it'll be interesting to see what the appeals court does and then what the Supreme Court does.

There's been very little tech regulation or tech legal stuff that they've lost.

This would be a big one for sure.

And maybe we'll have some people on for both sides of the argument, which would be interesting because I agree with you.

It's a big deal.

But okay, let's get to our first big story.

Twitter is shrinking over the weekend.

The company laid off over 4,000 contractors without warning.

That's nearly four-fifths of the entire contract workforce.

Although many people thought, how did they hire that many people?

Many people who used to work there.

The contractors worked across the company, including in content moderation.

One person who's not showing a lot of moderation, the chief Twit, he tweeted insults at Senator Edward Markey over the weekend after the senator tweeted about the risks of impersonators.

Although Markey was a little heavy-handed as far as I think he was.

He also amplified, this is Elon, also amplified conspiracy theories about FTX, money laundering, and the Democratic Party.

That was interesting.

And he complained about the costs of feeding employees and gotten his Twitter spat with one of the program's administrators, which is exhausting because it's such nonsense because these companies paid for the food and used to argue with me of how much it was worth it.

If they want to cut the cost, just cut the costs and stop making a thing of it.

Anyway, I had a whole show on Elon today.

I mean, his and my long time relationship, and it was called Now He's Just Somebody That I Used to Know, which was a song, of course.

That's right.

Thank you.

It was almost we have to talk about Elon, but then I thought a little too serial killer.

Anyway, and then he appeared at an event in Bali, I mean, virtually, where he said he was super tired and nobody should be him.

Tiniest, world's tiniest violin on that one.

What's the goal here?

I wish he would like fix the company.

I don't know what to say.

He wants to build great features, but he's spending a lot of time tweeting stupid things and alienating people.

What do you think?

What do you think here?

Let's talk about positive positive things.

Did you see the image when he was piped down?

He looked like he was on trial in the future.

Yeah, I agree.

He doesn't need me to feel sorry for him.

And

people don't want you to feel sorry for them.

I always say, when sympathy is not something that menace is.

They don't ask for it.

But it just felt,

I continue to believe, and this is armchair psychology, this guy is unfolding before our eyes.

Unfolding, you mean unbundling, unwinding,

coming undone, whatever.

Coming undone is the right.

Yeah.

He does the most insanely

non-graceful, stupid,

mean things.

And you can find hundreds, if not thousands, of really smart people

who see the genius in it and assume it's all part of some master plan.

Maybe they can't explain what it is, but you're playing checkers, he's playing chess.

That's exactly the right analogy.

Yeah, you got a lot of that.

I saw you got a lot of that.

As much as you would like to think this is all part of some master plan and that Twitter is going to emerge from the ashes and be amazing, and that he's going to put us on Mars and he gets it and we don't.

No, he's a brilliant man who's going to move the world forward and he should get all that credibility.

But be clear, he's incredibly fallible.

And when you fall into this dangerous notion that we have Jesus Christ, whether it's a guy who says, make America great again,

we got to stop this cult.

Jesus Christ.

They're not there.

Let me just interject.

I think the nation is healing in that regard.

I think

the repudiation of Trump, I think a lot of people are like, a lot of people, I'm getting more of like, oh, wait a second, after all this, maybe he's not so smart.

I think a lot of people are wising up and not immediately buying the cod swallop that tech pushes at you about these brilliant people.

That to say, like you said, let's be, let's be kind.

These are really special people in many ways and smart.

And they were there at the right time, whether it's luck or, you know, there's an expression, is it smarter to be lucky or lucky to be smart?

And so I think it's a combination of those things.

I would give, I always give credit.

Like when I have people are like, see, he was an idiot the whole time.

I'm like, oh no, his car and rocket stuff is really quite impressive.

Like, and they're like, it's not.

And I'm like, you know what?

You don't have to like him, but for goodness sake, acknowledge what's special here.

This is not special.

And I'm not sure what's going on.

I mean, do you think he says he wants to build things?

He's cutting costs.

That makes sense.

I don't think that doesn't make sense.

The way he's doing it is casually cruel.

And I do think when I saw that number of contractors and several people wrote to me, they're like, that was a lot of contractors.

And I agree, that was too many.

And that's how you cut and raise contractors to save costs and because it's easier because they work for third parties, by the way, for the most part.

And so it's, it's, you don't save costs and health benefits, but you, that's how you're easier to fire.

That's what I'm saying.

That's correct.

Yeah, exactly.

So I see that happening.

I was surprised by how many there were, and I could see that's a very easy thing.

The food thing is just nonsense.

Whatever.

just cut the cost you know whatever so is google google's doing the same thing last year they were cutting food costs but i i don't know what the goal here is is he trying to buy up twitter's dead does he want to kill it and write it off as a loss does he want to go bankrupt is he just mad that he has to own it and so he's doing a giant billionaire tantrum.

I don't know.

I don't know.

I called a bunch of people this weekend, and everyone has a theory, but everyone's sort of unifying around

nobody knows because the latest theory that he's intentionally trying to bankrupt it doesn't really make a lot of sense because he'd wipe out the equity and then they'd have to put the company up for bid and a higher bidder could come in.

A judge would not look favorably on him in bankruptcy court.

But if you look at, I got someone sent me a list of the debt.

If you look at the debt here and the interest payments, he's already in trouble.

The company's already, my guess is

not able to make its debt payments.

So he's going to have to call back his equity players.

He's going to have to do more forced selling and file more forms.

This has just gotten, you've never seen an acquisition get this ugly this fast, but there's something, and I don't know if I got the pronunciation right here, but an orega, ouriga.

Do you know what that is?

No.

It was a title given to a slave charged with accompanying a Roman general who

and the general charged with accompanying a Roman general that was awarded a triumph through the streets of Rome.

So, you know, they basically have ticker tape parades for a general who conquered another army.

Yeah, I see Cleopatra.

Go ahead.

The slave, slave, the Auriga, was appointed by the Senate, and this Auriga was charged with a relatively simple task, and that is to follow the general and on a regular basis, whisper into the ear of the general during the succession, memento homo.

And that means, remember, you are only a man.

Oh, wow.

And I thought that was so powerful.

Wow.

That

this, you know, what was considered one of the greatest civilizations

said, right at your biggest moment, that's when you need to be reminded consistently by somebody that you are only a man.

And I feel like Elon Musk has never needed an Auriga more than anyone.

You know what?

I need to get you one.

I'll be your, I'm kind of your Auriga.

You kind of are my Auriga.

I am.

Oh, come on, Scott.

Usually I'm like, what?

Huh?

You text me late at night and get angry at me.

I do not.

I haven't done that in a long time.

Like, it was literally twice, and you're like still recovering.

Because Cheryl Samberg called you and read you the Riot Act, and you still wanted to hang out with her and her fancy friends.

No, I I did not.

I have not seen Cheryl in years.

Anyway, it's a tough time.

And

one company is buying up ads on Twitter.

It's SpaceX.

That's kind of interesting, moving money between his companies.

Now, advertisers who have left Twitter, General Mills, Audi, General Motors, Pfizer, Volkswagen, Mondele, which is the maker of Oreos.

I think Eli Lilly's not too happy about those fake tweets.

They've been spending a lot of time getting rid of those, which is a waste of time because he shouldn't have done the thing in the first place.

So now he's caught more costs.

So the advertising is not there.

It's really, I mean, I have talked to all of the advertisers and they're like, no way am I going in here, which is kind of interesting.

Everyone's looking for an excuse to pull their advertising from any channel.

And he's given them the mother of all excuses over and over.

It's easier to put it over at Facebook or wherever or not at all or just keep it for yourself.

He's also going to court on Monday, it was just today when we're taping this to defend his Tesla pay package from a shareholder lawsuit.

They call him a part-time employee.

That's sort of the Jack Dorsey argument, I guess.

He's certainly spending a lot of time on this and tweeting ridiculous things.

So he does have other jobs.

I really think corporate governance matters.

And that is that it's in some ways it's along the line of this Auriga.

And that is you need people who aren't you, who are fiduciaries, remind you of when you're not supposed to do stuff.

And I'll give you an example.

In late 99, coming off of red envelope, I had a shaved head, a degree from Berkeley.

I was young.

I had a good rap.

I could raise tens, if not hundreds of millions of dollars for those companies in this space called the internet.

And I was very full of myself.

And I went and raised $15 million at a pre-money valuation of $35 million to start an e-commerce incubator in New York called Brand Farm.

Not because it made sense to start it in New York, but mostly because I wanted to live in New York and wanted an excuse to relocate to New York.

And I had Goldman Sachs, JP Morgan, Maveron, all wonderful investors and like a who's who of wealthy, successful people.

And I raised the money and my company that I'd started, started Profit, a brand strategy firm, I said, I want them,

I want them to do the brand strategy and the positioning for all these companies I'm going to push out or punch out, like kind of like in Idea Labs, but in New York.

And my board,

my board at Brand Farm said, this is an inner-party deal.

They may be the best firm for it, but you need to bid it out.

And we would prefer that you had an arm's length

vendor here.

And by the way, at a minimum, the board at Tesla, I can guarantee you two things.

Good corporate governance would be for a group of board members to just check it and go, make sure that we're getting as good or better rates on Twitter.

Yeah.

Yes.

That SpaceX is getting value for their money, and this makes sense.

And I can guarantee you that did not happen.

There is no checks and balances here.

There is no board.

By the way, SBFs, do you know who is on his board?

Who?

Nobody.

Yeah, that's right.

Oh, he's

in the condo.

The condo.

We have a board.

No, condo kids, the condo kids.

And I mean, that is sort of like peak,

I mean, a pretty basic question.

If you're going to give money to an exchange of a 30-year-old, and I'm an ageist, I believe President Biden is too old to govern, and I think 20-somethings are too old, are usually too young, are usually too young to be fiduciaries for tens of billions of dollars in

other people's money.

And if you don't have the self-awareness to go, you know, I haven't figured it all out since I just got out of, you know, since I just got out of MIT.

And anyway, if you if you weren't self-aware enough to surround yourself with a group of people who can give you advice on this stuff and by the way Musk has never had this Elizabeth Holmes had a board a lot of old guys and smart guys but you know I'm just saying and what's happening to Elizabeth Holmes that's that's that's an interesting one I know I'm just saying you just you can get around these people and the Tesla board is a rubber stamp come on and I like some of the people on it but you mean his brother well among other people his brother's on the board I know yeah you don't can't have your brother on the board stop me stop stop right now Ariga That means I am the general.

And I'm an Ariga to you.

Zenor Alissimo Jungle Cat.

So let me just say one thing to you, Scott.

Memento Mori.

I'm going to say that at every show.

Memento Mori.

I'm going to whisper it into your ear.

I'm going to scream it at you, really.

I surround myself with people who push back all the time.

Too much, actually.

Anyway, we advise that you focus on the company and not at creating weird conspiracy theories around food and Sam Bakeman-Free.

Did you ever have any interaction with SBF?

Did you know that?

Yes, one time.

I didn't have him at code.

He wanted to, we had thought about it, and then I didn't really understand it.

Like you said, I was like, I don't know what he's doing, and it feels sketchy.

And he seems like the most stable of this sketchy group, but it's still a sketchy group.

And then he wanted to do it from remotely.

And I just, no, I just never did.

And then one time I had to do a remote thing.

New York Times dragged me into something.

It was like a five-minute conversation for their staff.

And

I was incompetent to the task.

I didn't know enough.

So I just luckily

missed that interview.

I probably would have been tougher.

I thought Matt Levine did a great interview with him where he essentially said, what you're running is a Ponzi scheme.

And he agreed with him, which was kind of interesting.

All right, Scott, let's go on a quick break.

When we come back, a mysterious hack is the least of FDX's problems.

And we'll speak with a friend of Pivot, Joe Coscarelli, about Atlanta, hip-hop, and Spotify.

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Scott, we're back.

The collapse of FTX has somehow gotten worse hours after firing the bankruptcy on Friday.

The exchange was potentially hacked.

Crypto assets worth hundreds of millions of dollars were stolen from the exchange.

An FTX administrator warned users to delete all FTX apps and avoid the website, calling it malware.

Oh, that's great.

Meanwhile, there are new revelations about Sam Bankman-Fried, who resigned as CEO.

He was the second-largest donor to Democrats in the midterm election.

Another FTX CEO, Ryan Solomay, gave millions,

almost nearly as much, to Trump-backed Republicans.

Bankman-Fried was a large investor in Sequoia and other VCs to the tune of $500 million.

In a very good move by Elon Musk, he did not take Sam Bankman-Fried's money and actually questioned whether he had it.

Smart on Elon's part.

Over the weekend, as his net worth dropped from $16 billion to zero, he appeared to be playing video games online.

He, of course, left a wake of charitable giving.

All his charitable giving stuff, which was quite extensive and performative, which that was the one thing that made me kind of, huh, what is he up to?

Those people all quit.

They were all effective altruists, is what they pushed, which I thought was just, that I thought was nonsense.

The FTS was based in the Bahamas, not the U.S.

He never really left there except for some times.

The U.S.

was working on regulatory regimes around it, but never finished it, hadn't finished it yet around crypto, et cetera.

I don't know if better regulation could have.

They were working on it.

They were working on it and pretty quickly compared to other tech legislations.

I mean, there's just so much here that's going to come out.

And it would be the Jesus Christ of investing if there was an organization that was a Catholic church.

I think you could argue that Sequoia Capital are the best investors in the world.

They just consistently are one of the best performing venture capital firms in the world.

So I know this first party party information.

Yeah.

Sam Bankman-Fried was calling people.

He'd probably done some scenario analysis and thought, I need to short my balance sheet.

He was calling funds in March and raising billions.

And I know a fund that agreed to invest $2 billion.

And the fund, as they do, said, we need audited financials.

And his response is, we don't have audited financials.

On Telegram, I'll send you some bullet points.

about the company.

That's how he was raising money.

Oh, and he got it right.

And he got the money.

Sequoia put out this memo that they've since since deleted, basically lauding his genius and pointing to him as.

Was that a blowjob?

Oh, my God.

As the type of genius they invest in.

Slurp, slurp is what I thought when I was.

So that investment went from 200 million to zero.

Yeah.

And it goes back, and I want to take out of this, other than being Monday morning quarterback,

a key investment criteria, recognize.

You know, nobody is as, you know, as smart as you think or as dumb as you'd hoped.

And the key to investing, in my view, is diversification.

Because even if you think, I remember when I got into a Kleiner-Perkins deal, I was, I got him, I got to invest in something called Della and James, which was a wedding site.

It was,

and I'm like, oh my God, I'm getting in a Kleiner deal.

That's all.

Yeah, because I think Profit was doing their brand strategy.

And so they gave us the opportunity to invest.

And I thought, oh, my God, these are the smartest people in the world.

And I found, I scraped together a quarter of a million dollars, which was a lot of money for me back then.

Still a lot of money.

It went to zero in like eight months.

Wow.

I mean, it just, how did you feel?

You know, like I've, I've gotten used to that emotion.

So, this is interesting because the Binance CEO, CZ, who, by the way, better be careful himself, tweeted, calling this a shit show and saying all of the crypto will be blamed, even if it's one guy's fault.

The crypto community has been lobbying for more oversight, including Sam Bank and Freed by the CFTC.

I know there's, I've been talking to both the CTFC people and SEC people.

They've been going back and forth.

They say they're being more cooperative than before.

Obviously, withdrawals are rising.

A lot of these other companies are getting sucked into the maelstrom.

Binance has issues of its own, let's just say, you can read about very extensively.

What's amazing is that everybody has been covering this really well.

I found out a lot of stuff probably after the fact.

What's most interesting is two people, actually, Michael Lewis, who just literally is always in the right place, has been following Bankman Fried for six months now.

Now he's going to be selling rights to the book.

I remember him telling me this in an interview.

He previously wrote The Big Short.

Hopefully, I think he'll probably write an honest book.

He will probably get the ding that why didn't he report it at the time?

But, you know, he's not, he's a book.

He's a book writer.

No, he's not a drug.

Michael Lewis has a reputation for never letting the truth get in the way of a good story.

Oh, stop it.

Hold on.

He's a fantastic storyteller, but if you look at the actual data around Billy Bean and Brad Pitt,

it's not that exceptional.

Anyways, I think he's a great storyteller.

In any case,

we're saying the same thing.

He's in the right place.

And the same thing with Walter Isaacson, who's written many books on Ben Franklin.

He wrote, obviously, the Steve Jobs book.

He's been trailing Elon.

Michael Lewis deserves everything he's received.

He's a fantastic storyteller.

He is not a journalist.

This will make for a great Netflix drama.

And here's my point.

This whole crypto thing, by the way, if you become an acronym, I think that means you're about to kill a journalist or go bankrupt.

Yeah, it's not a good idea.

It's not a good forward-looking indicator when all of a sudden your name becomes an acronym.

Like SG.

I can't call you SG.

No one calls me that.

See, I'm still in the running.

No one calls me that.

But anyways, if you look at the entire crypto market.

Wait, what's your middle name?

I don't even know what that is.

I'm not telling you.

Come on, then I can make one.

You are very reckless with my emotions.

Just what is your middle name?

Do you want to, can I?

Yeah, I want to.

Seriously?

Honestly?

Seriously.

I honestly want to.

I don't have a middle name.

My parents were poor.

My parents were lazy and didn't give a shit and didn't think long enough to give me a middle name.

I don't have a middle name.

My dad wanted to name me Scott with one T after Scotland, which would have been really cool.

And by the way, if they just moved me to Scotland and gave me long enough for me to have a Scottish accent with my rap and a Scottish accent.

Hello, play.

Hello.

You know what I would have named you?

Ewan?

Barbara.

You would have named me Barbara?

Barbara Galloway.

But go ahead.

This is, if you look at the crypto market, and I'm thinking about doing a blog post on this, news versus noise coining or parroting Jessica Yellen's great site.

But if you look at the crypto market, it's much more spectacle than significant.

The entire market capitalization of the crypto market is $800 billion.

Yeah, it's not very good.

Amazon has shed more value than the entire value of the crypto market.

So while it's going to make for a great Michael Lewis-produced docudrama, keep in mind, Kara,

as literally this quote-unquote layman moment was happening Thursday and Friday, what did the markets do?

The markets ripped up.

Nobody cares.

So

it's so interesting.

Yeah, and we're fascinated.

It's the same way.

Again,

another example, 3,750 layoffs of Twitter, three times the news stories of a layoff that's a third of the size.

Amazon loses Facebook and value.

Yeah.

That's right.

So the crypto market is more spectacle now than it is significant.

All right, let's bring in our friend of Pivot.

Joe Coscarelli is a cultural reporter for the New York Times, focusing on pop music.

He's also the author of Rap Capital, an Atlanta story about how Georgia's most populous city has become the center of the hip-hop world.

Welcome, Joe.

We're not hip-hop experts.

My sons are.

So we appreciate you coming on, but there's a lot of things we want to talk about around your book and also Spotify and the music world and online.

I know you're super well versed in that.

So talk about the book itself.

Atlanta has taken the hip-hop crown, and most of its history has been New York and L.A., I believe, according to my sons, but I quizzed them this morning.

Tell us a little bit about how Atlanta became this.

That's about right.

You know, traditionally, New York and LA are thought of as the hip-hop centers.

You know, there's been

stuff out of Chicago over the years.

Yes, you know, the UK is big right now, but you know, basically for the last 30 years, Atlanta has been this sort of pesky upstart and it just keeps taking the crown over and over again.

And that starts with groups like Outcast and La Face Records.

You know, Usher came out of Atlanta, TLC.

Some record men in the the 90s really started making a name there because it was a black mecca, right?

It's this place that's known for civil rights.

It's known for historically black universities and colleges.

There's a real, just a creative energy there, and it's also affordable.

It's the south, but it's a city.

And from then on, they created this infrastructure and it just allowed generation after generation of sort of more experimental rap artists to really come from nowhere.

Killer Mike is there, right?

Yeah, Killer Mike came out of the same dungeon family scene that Outcast did.

And you just get these, it has a small-town feel.

And I think that that's really important for any music scene.

You know, you think of Laurel Canyon in the 60s and 70s, or you think of London for punk music and post-punk in the 70s and 80s.

And it's these groups of people who

grew up together, their family, their friends, their rivals.

Right.

And they really.

And they create communities.

I mean, I interviewed Killer Mike about that, about the ability to communicate.

And it's not just hip-hop, there's others.

But so talk about the impact of hip-hop because it seems like hip-hop dominates everything now.

People tried to ignore the influence of hip-hop for so long, ever since the late 70s, early 80s, when it really became mainstream.

People were saying, oh, this is a fad.

And this is, you know, we've seen this with rock and roll as well.

But now we're at a moment where hip-hop is outlasting rock in terms of its flexibility as a genre and its cultural dominance.

You see it in tech, you see it all over the internet, TikTok,

every slang word that people are using comes from rap music.

And even people who don't know who these modern artists are, their influence trickles down, or more accurately, it trickles up through, like you're saying, your sons, through young people, through teenagers.

This is the youth music of my lifetime.

And you see it, you know, in

sports and in business, you know, all these

Fortune 500 companies, they're trying to borrow cool from these rappers.

Is it because of streaming?

And is that what has made it more so as it's moved forward or not?

Streaming really revealed, I think, that rap was the dominant mode for music and popular culture.

It sort of changed who the gatekeepers were, and it allowed us to see in raw numbers on Spotify, on Apple Music.

Go open your iPhone and go to the Apple Music charts.

And it is dominated, you know,

songs one to 100.

Like you said, maybe a little bit of Taylor Swift in there.

But these are rap artists, and these are regional rap artists, specifically, you know, southern storytellers really, really dominating this conversation.

And yes, streaming, I think, just opened people's eyes to this.

And now you have all of the old-fashioned companies and gatekeepers trying to play catch up because they see where the raw energy is.

Rap, I would say maybe with the exception of superhero films, it's the dominant cultural force in entertainment last 20 or 30 years.

Money, popularity, everything.

What do you think of the pillars that led to that moment?

It had to be more than just the music.

It had to be, I always think of it as sort of cultural appropriation, that the music you listen to is the culture you want to absorb personally.

What were the pillars that made this, you know, in those last two or three decades, the moment for rap?

And I'm also curious if you see any of those moons lining up around another art form.

I mean, youth culture has always been about danger and sex and pissing off your parents.

And we've seen that

rock and roll, yeah.

Yeah, since NWA, except the rock and roll is not risky anymore.

Rap is where the, is, is, it's subversive, it's fun, it's, it's party music, but it's also telling you stories about, you know, a world that you might not get to see every day.

And I think it works on two levels and that's something that i really wanted to drive home in the book is that there are people who relate to this music firsthand this is you know music that is telling of underprivileged neighborhoods of of racism in america of of forgotten of a forgotten generation of specifically young black men and and people relate to that struggle and i think that you know when when you have a when you have a groundswell of of neighborhood stuff and this is why atlanta has always been so great is because even in the internet era, the Atlanta stuff is really happening on the ground.

It's a grassroots scene.

These artists are local celebrities, sometimes even before they start making music, from just being guys who are known to, you know, however it is, get money and be in the club and see each other.

Like national for country.

Exactly.

Like national for country.

And there really is this grassroots scene.

And then you get the kids from all around the country who want to borrow some of that cool.

and i think that we've always seen that in youth culture and and rap music is youth culture they're also very active on social media like seeing tick tock and things you've used all these things there's a real different relation between artists and fans now i think in a lot of ways that there's these direct relationships how does that affect it because it feels as if

that they follow the people, not the labels, not nothing.

The way they discover stuff is so different than the way we did.

We sort of got an album drop and then you, you know, very traditional ways, but the way way they discover stuff is really fast, and how they trade it among themselves.

Like, I found this.

Definitely.

What about this?

Yeah, the fan base that is so intelligent online and so young.

And rap was really primed for this because rappers were always sort of making their own way.

And then, when technology democratized the tools needed for the industry, when you didn't have to go to a studio and spend hundreds of dollars for an hourly recording session, you could just do it on your laptop, upload the shoot a video in your house, upload it to YouTube, start an Instagram page, make your own dance craze.

This is just, this is all, this is like a DIY culture.

And then you have the corporations that can swoop in and take it international, but it's really, and this happened from the jump.

You think of somebody like Soldier Boy.

I don't know if you guys remember that dance craze.

You know, that was almost 20 years ago at this point, but he was one of the first rappers to, you know, be on MySpace, to be promoting himself hands-on with the crowd.

And

this is something that has just grown grown and grown and grown and the these artists can do it basically by themselves well you're also talking about entrepreneurship one of the reasons i wanted to interview killer mike is because he had a lot of things going on now he had a bank he had a restaurant or a club and all kinds of things and and so can you talk about the entrepreneurship yeah so whereas you think of rap music you think of of success this is music that comes from struggle you have to start from nothing basically or you have no credibility and then unlike you know in rock or in punk, you know, you think of the independent rock of the 80s and 90s, and selling out was the antithesis of the ethos.

Whereas in rap, it is all about what you can achieve, and it's all about showing other people from your neighborhood that you came up with, the people, you know, who might not have made it out, what is possible.

And I think because of that, there's a real, you know, think of Jay-Z, one of the best-known businessmen in America at this point, and someone who is looked to as a hero.

And then, for every Jay-Z, there's hundreds of local artists who do the same thing for their direct community.

And I think it's all about the proximity because

from behind our computers, we might look at these guys and think, oh, what's with all this jewelry?

What's with these car, you know, these fancy cars, these big houses, the materialism of rap.

But

this is coming from a place that was told over over and over again in America that

it could never achieve anything.

These echelons of the art world, the stock market were not for them.

And I think

when you overcome what some of these guys

and women have overcome,

these material possessions are trophies and their armor, and they're a middle finger.

They're an FU to America and the power structures

that we live under.

Well, there's an authenticity to it that resonates with people.

I wanted to talk about Spotify.

Sure.

Because I know you've thought a lot about it.

And what I see from a consumer and a business standpoint, I don't think any company has distilled an entire medium down to a searchable icon.

I think what Spotify has pulled off here is just nothing short of remarkable.

And at the same time, it's off 75% from its high.

It's worth $16 billion, which isn't a lot.

It's below its IPO price.

I mean, from a consumer standpoint, you look at Spotify and you would just go, remarkable, this should be worth more than Amazon or Meta.

Or that's what I would think if I didn't know the business.

Where's why has this business from a shareholder standpoint not worked?

People don't value art.

I don't know how else to put it.

You know, I think the idea, like you're saying, that you can have

almost the entire recorded history of human music at your fingertips for however much it is, $9.99 a month.

And the labels are making a ton of money, right?

This rest, Spotify and streaming in general, rescued an industry that was that was long gone when they got off their highs of selling a you know a little plastic disc for $20.

And when that train stopped, people thought it was a wrap

for this industry.

But I think that we see this over and over again in the arts, and especially because the labels are the ones really making money off of this.

Artists out here are struggling.

You see artists complaining

about the fractions of a penny that they're making.

Unless you're a Drake or a Taylor Swift

or a little baby,

people aren't really making money off of these streams.

But I think

it's hard once people realize that everything

is just there for you.

The math just isn't there to be able to support all of these record companies and also the artists for

the Piddly monthly fee that we're paying.

And also there's endless new discovery on TikTok.

One of the things was the rise of Trump.

And one of the things I was noticing, some of them,

he was a popular figure in rap for a long time.

He's in hundreds of songs.

Talk a little bit about the political aspects of this because they certainly had negative responses to Trump, but he was also something to manipulate for entertainment, too.

I mean, Trump is nothing if not a pop cultural icon.

And throughout the 90s, you know, he's been courting rappers for 20 or 30 years.

There's a Nancy Joe Sales piece in Vibe from the 90s about Trump hanging out at clubs with rappers.

And up until his very last day in office, he was doing this.

He pardoned Lil Wayne and Kodak Black in his last wave of

his magic wand.

And you saw this in his relationship with Kanye as well.

He's always after the black community, and they see him as a outlaw in a similar way.

There's a kinship there, I think, between certain rappers and Trump in the way that he's been able to say and do whatever he wants, but also in his tackiness, his flashiness, and his vulgarity, his willingness to put his wealth front and center.

And I think that that's been complicated.

You know, there's, I mean, hip-hop, just like the black community, is not a monolith.

There are as many anti-Trump songs as there are pro-Trump songs.

But

he operates in this celebrity milieu, and he's always been able to maneuver his way around it.

Now, you mentioned Kanye.

I mean,

you've just had the same reaction we all have when we hear his man.

Look, I will say this: Kanye is a sneaker mogul who used to rap.

He hasn't been really relevant.

And now he's not a sneaker mogul anymore.

He really hasn't produced anything relevant in a while, has he?

Almost nothing of note.

This guy's gotten away with saying whatever he wants for decades.

And, you know, I think he just continued to push it.

You know, I think you're a billionaire.

You're removed from your roots.

You're removed from your music career, which is the thing that initially people paid attention to you for.

And we see this over and over again with the richest and most powerful people in the world.

We've noticed.

Yeah, as soon as people stop telling them no, they're just going to keep pushing and pushing.

And I think, look, I mean, Kanye is in his mid-40s.

Like, he's...

His time is up in the rap world.

And he, you know, he's had this success in fashion and as an influencer and as a provocateur

um but but you know i think he's out of he's out of runway right now and

you know last question how the mental health stuff you know how the mental health stuff interacts with that is like you know way above my pay grade joe would you counsel someone to go into the music business right now

Do you think it's a good business?

At 22, just out of college, I'm interested in music.

I'm interested in tech.

I'm interested in, you know, pharmaceuticals.

Would you counsel

for or against going into the music business?

I think if you want to be behind the scenes, there's more opportunity than ever.

I think the streaming services, you know, the labels, the publishing companies, you see, you know, you see private equity hedge funds getting in the catalog business.

I think this is a booming business right now with streaming.

I think being an artist has always been.

an unforgiving field.

I think fame is a disease.

I think wanting fame is a disease.

Look,

if you want to be a musician, it better be the only thing you could think about at any given moment.

And it better be in the top 0.01%, right?

Exactly.

But on the business side, sure.

I think there's definitely innovation

to be found and money to be made.

All right, great.

What's the next capital, rap capitalist?

Or what's the upstart now?

I mean, New York is coming back.

There's these drill scenes in Brooklyn and the Bronx.

Unfortunately, they are quite tied to gun gun violence and tragedy, especially among young people.

But look,

this is America, and people can't look away from that stuff.

That's what we want in our movies, in our TV, and in our music is violence and drama.

I've been listening to a lot of drill.

Well, good for you.

Not by choice.

Not by choice.

But nonetheless, I know a lot about it now.

Anyway, the book is called Rap Capital, an Atlanta Story.

It's out now.

Thank you, Joe Coscarelli.

We really appreciate it.

And people should watch out for Joe's amazing stuff on the New York Times.

His videos make me understand stuff I don't understand.

I think they're wonderful.

Thank you so much.

Thanks so much.

Thanks for having me.

This was fun.

Nice to meet you, Joe.

He's a thoughtful writer.

I've always liked him.

Yeah, he's a great writer working for the New York Times, writing about rap culture.

I mean,

it says something really wonderful about America.

Scott, one more quick break.

We'll be back for wins and fails.

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Okay, Scott, let's hear some wins and fails.

My loss is America has always been about individuals and exceptionalism, and I think it's gone too far.

And a big source of comfort for me is atheism and believing that there is no Jesus Christ.

And I think that as America has become more educated and wealthier, our reliance on a superbeing or church attendance goes down, but we still try to find these all-knowing individuals that will lead us to the promised land.

And I think it's gotten out of control.

And we'll call it a cult of personality, but the big fails, if you will, and this is a good thing, the big fail last week was individuals or this Jesus Christ idolatry of the individual, believing that everything a tech guy, a tech person does is

genius and they're infallible, believing that a 30-year-old

is not subject to any sort of corporate governance and believing that

he is infallible, believing that an individual who

consistently

Kerry Lake or Donald Trump or whoever it is are bigger than our democracy and you should trust them.

And then when they say that there's voting irregularities, even though they have absolutely no evidence of that, that we should defer to them because they're Jesus Christ.

Last week was a really

was a fail for these cult-like figures.

And it directly goes to my win, and that is my win is institutions.

And institutions matter.

The connective tissue around a nation, a culture are our institutions.

It's what binds us together.

And whether it's the electoral process and the democratic process and the largest democracy in Latin America, Brazil is holding peaceful transfer power, whether it's the Arizona Electoral Board, which appears to be holding, whether it's run by a Republican named Bill Gates, weirdly enough, but go ahead.

Whether it's the SEC or FINRA that people are all of of a sudden finding have value, that these institutions that actually think about this stuff and try and protect retail investors,

that

institution called FDIC Insurance, what do you know?

It has value.

So this was, I think, a big week.

Terrible week.

The future is healing.

I'm not an optimistic person, Kara.

Last week was a wonderful week for the West.

Ukraine?

Ukraine?

In the last year.

NATO, the European Union, the U.S.

dollar, the Fed, I think, is doing this.

My meeting was G, calming things down.

Anyone who decides that they are bigger than the electoral process.

And also, we've had not very many, but we have had some Democrats who lost elections.

The Georgia election was largely, in my view, won by a person who said, I refuse to fall prey to this notion around election misinformation.

The Republican mayor won, and I think in large part because he was seen as sane.

He wasn't falling into this idolatry of innovators or this cult worship.

So our institutions matter.

Last week was an enormous win for institutions across the West.

All right.

Mine, I would say, I haven't seen it yet, but I really want to.

Black Panther, Wakanda, Forever.

See him.

Oh, don't tell me yet.

Scores $180 million opening weekend, highest November debut ever.

By the way, Sam Sanders, host of the New York magazine podcast, Intuit, talks with New York Times cultural critic Wesley Morris, another fantastic guy at the New York Times, about what big franchises like this actually owe fans.

Did you love it?

Did you love it?

Well, you're going to love it.

So it's a little slow in parts, but it's a great movie and it's an important film because, and I apologize, I'm hijacking your win.

Yeah, you are.

For the last 30 or 40 years, I don't know, the last 400 years, we've been romanticizing and film like really strong, good-looking white dudes.

This movie

has so many strong,

beautiful women of color.

Angela Bassett, nominated.

Oh, I love her.

Who should have won Best Actress Actress for What's Love Got to Do With It is an amazing

actress.

She is wonderful in this.

And the whole movie has all these incredibly strong, beautiful women of color.

Tell me more.

I love Angela Bassett.

She's one of my favorite actresses.

I would put her near the top of my favorite.

I love her.

I find her poignant and beautiful and funny, everything else.

The other thing is Dolly Parton, speaking, which gets $100 million from Jeff Bezos for being herself.

She gave away to charity.

I thought that was great.

Well, it's good to see Dolly finally have some money.

No, but she's giving it away to charity.

Good, good.

Give away Jeff Bezos some money.

Give all the money to Dolly Parton to give away.

And he announced he's giving his money away, right?

Yeah, yeah, she's giving his money away.

But nonetheless, Dolly Parton should run it all.

And then Carrie Lake's failure here is she's been such a nasty piece of work.

Awful.

Terrible American.

And I have to say, terrible American.

Nailed her rather.

And by the way, someone who made fun of Trump's weight a couple of years ago made fun of the Republicans a couple of years ago.

And then had the, I'll tell you why she lost.

She had to insult a dead dead man, John McCain, in front of McCain's supporters.

Like, get out of here.

Who says to voters, get out of here?

I don't want you, Republican voters, when you're running as the Republican candidate.

You know, they gave her a big fuck you, and she's not going to lose by a lot, but it looks like she's losing right now.

And it's well deserved, given what a nasty piece of work.

Gasoline-encrusted, nasty piece of work.

100%.

Some serious Fade Dunaway plays Joan Crawford energy.

Whatever, just bad.

And both of those are nicer.

It just deserves.

And by the way, SNL, if you haven't seen it, Cecily Strong nails it.

Oh, my God.

She sounds like it was creepy.

It was just fantastic.

Go do yourself a favor.

Anyway, that's our wins and fails.

Nature is healing and things are getting better, we hope.

And Scott is making friends in London.

Memento Mori, as we like to say.

There you go.

We want to hear from you.

Send us your questions about business tech or whatever's on your mind.

Go to nymag.com/slash pivot to submit a question for the show or call 855-51-PIVOT.

Scott, that's the show.

We'll be back on Friday.

For more, please read us out.

Today's show was produced by Larry Naiman, Evan Angle, and Taylor Griffin.

Ernie Intertot engineered this episode.

Thanks also to Drew Burrows and Meal Severio.

Make sure you're subscribed to the show wherever you listen to podcasts.

Thanks for listening to Pivot from New York Magazine and Box Media.

We'll be back later this week for another breakdown of all things tech and business.

Memento Homo.

You are only a man.

This month on Explain It To Me, we're talking about all things wellness.

We spend nearly $2 trillion on things that are supposed to make us well.

Collagen smoothies and cold plunges, Pilates classes, and fitness trackers.

But what does it actually mean to be well?

Why do we want that so badly?

And is all this money really making us healthier and happier?

That's this month on Explain It To Me, presented by Pureleaf.