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Hi, everyone.

This is Pivot from the Box Media Podcast Network.

I'm Kara Swisher.

And I'm Scott Galloway.

Kara, we're at it again this week, live and in person in New York City to talk about our favorite things to our favorite audience.

Who's our New York's our favorite audience?

They're all our favorite audiences.

Every city we go to.

We met up at the podcast upfronts to do a live episode of Pivot and hear about all the other amazing shows coming up for Vox this year.

But really, we were the show.

Plus, look out.

We also have our own special announcement in this episode.

Wait for it, Kara.

Wait for it.

Hey, New York City.

We're happy to be at the podcast upfronts.

Yeah.

Looks like we have to bring this show home and have a great podcast.

We have lots of things to talk about.

Scott, what are you most excited about?

Most excited about general.

Podcasts and podcasts.

In podcasting.

Well,

what podcasts do I like the most?

No, what are you most excited about?

It's the only

ad supported medium that's growing.

Think about advertising.

For most of you who represent advertisers, advertising, let's be honest, has become a tax that the poor and the technologically illiterate have to pay.

It's kind of shit we foist on people in order such that they can afford substandard media and anyone who has any options gets to watch media without being cursed by advertising.

This is the only medium where people seem willing to endure advertising to have options.

So podcasting is an exciting place to be.

You know this is a room full of advertisers, right?

That's all right.

I like you better than he does.

He loves advertising.

That's not true.

Some advertisers, but it's true.

Podcasts are really an interesting advertising meeting.

I think people have these relationships and they're much more creative than other advertising.

I'm enjoying actually reading so many of the things.

But you're going to start reading because we're going twice a week, correct?

We have so much advertiser interest.

They cannot get enough of you and I together.

That's it.

They're hoping someday we're going to marry, which will never happen.

I was just on the Bill Simmons podcast, which I love.

He just hit his 200 million downloads.

And it was a really good discussion because what I really like about Bill Simmons, I think about what we have and what all the Vox Media ones have, is a lot of substance.

I can't stand the word snackable for millennials or that millennials like things in a twitchy way.

I think everybody likes substance, they like entertainment,

they like something more.

And I think the good thing that's happened with podcasts with us at least is that there's a lot, there's more substance here than you think, even though we just banter and make bad jokes.

We were talking about this offstage, but the medium really is the message.

And I'm curious how people respond to you when they've read your articles.

But if I get, literally, I can tell,

if someone approaches me about something that I don't know, I know which medium that they're approaching me about.

If it's someone who high-fives me and it's sort of a bro romance, I know it's a video.

If someone comes up and wants to share a moment and really look you in the eyes, it's something they read that you wrote.

And if somebody comes up to you and talks, speaks to you as if you're their friend and you don't know them, it's from a podcast.

There's something, the medium really is the message, and there's something about the intimacy of being in someone's ears where they feel as if they know you and they're forced to listen to you because they don't have the distraction of visuals.

Whereas the written word really seems to move people.

Right, and it is a different group of demographic people.

Usually on the streets of San Francisco, I get inundated by tech bros, essentially, who want to say hi.

But with the podcast, I'm struck by how many different people from different walks of life do come up to me.

They're always asking me about you, which is disturbing on some levels.

But it's really interesting how many different people do have

different demographics, different ages, different kinds of people, which I think is really interesting.

So that's why we're going to go twice a week, because people seem to love it.

It's growing like crazy, and we have tons of advertiser interests.

So we're very excited.

So, right now, let's get into the news.

So, I think we have to start with WeWork.

Have we killed them yet or not?

So, it's pretty interesting.

Today, I don't know what's going on here.

I actually have some friends here who know more about this than I do, but somebody is leaking that, and I think it's We, We is saying they are opting for or prefer a debt package from JP Morgan as opposed to an equity effectively crammed down or total washout by SoftBank, their initial equity investor.

And supposedly, the terms of the financing deal of $5 billion to keep them alive from JP Morgan-led consortium would be a 15% interest rate, which would be $750 million a year in interest.

So, this is a company right now losing $60 million a week.

And I like to put everything in terms of a private jet, which I don't own.

So, this company is losing a Gulfstream 650 extended range every week.

And the interest on the debt it needs to stay alive would be one Bombardio Challenger 300 per week, 2010, 2011, to 2,100, 2,200 hours.

You've been watching succession too much.

Literally, in order to keep a co-sharing office concept alive, in 2020, we need to throw the Turkish Air Force at WeWork.

I mean, I don't understand how it is feasible, and I'm going to double down and I'll come back to this.

I don't understand how this company doesn't at some point in the next four to eight weeks do the calculus that the only way out of this inexorable downward spiral.

And everyone says, Oh, you're a Debbie Downer, you're dancing on their grave.

No, I was dancing at their grave, but before anyone knew they were dead, so to speak.

I don't see how this doesn't involve a bankruptcy offer.

A bankruptcy operation.

How do you bail yourself out with 15%

payment in kind

of that?

I just want to say that.

Would he recover from a bankruptcy?

I think they're going to have layoffs as soon as this week,

substantive layoffs.

That's a given.

This week.

That's my prediction.

And then, how do they survive a bankruptcy?

Well, a bankruptcy, actually,

think of this as a retail concept with 550 stores.

Bankruptcy was kind of invented for retail concepts, because what you get to do then is you get to go cherry-pick the stores or the leases that are working.

Whereas now they've got to try and go negotiate with four or 450, call it landlords, or figure out a way to get out of these things early.

A bankruptcy really, I mean, people think of bankruptcy as the end all.

No, bankruptcy is a uniquely and wonderful American thing because in America we have this sort of cultural norm that

we don't embrace failure, but we tolerate it and we say there are assets here and we want to give this company an opportunity to survive.

So under the auspices or the cloud cover of bankruptcy, we're going to let this company figure out a way to restructure and have a chance to move on.

There is value here.

Some of these co-working facilities, likely on a unit economic basis, make sense and work well.

Probably two or three hundred don't.

But without the cloud cover of a bankruptcy where you're saying to your landlord, all all right, either work something else out or it's zero, I don't see any way out of that.

How valuable is the brand itself?

Is it or can just anybody just replicate a version of it?

Oh no, they've evolved the space.

We all know it.

Even just general awareness, if you were all of a sudden to decide I need a co-working space,

the first,

you very rarely, 97% of all purchase dollars go to things you have initial awareness of, right?

That's why the first page on Google is 99.9% of value and the first listing is about 70% of all value.

It's the same way in terms of your consideration set.

So the fact that the first thing you think of, if you think of shared workspace, is we, that's enormously valuable.

That may be worth it.

That can go down very quickly.

No doubt.

But it's worth, but then again, it comes back to value.

It's worth hundreds of millions, maybe even single-digit billions, but it's not worth, according to Goldman Sachs, who estimated the company was worth somewhere between 60 and 90 billion about 45 days ago.

Oh, great fiduciaries for any of you giving your money to them in terms of private wealth management.

But by the way, the CEO is an awesome DJ.

Just a fucking awesome DJ.

We're going to talk about that.

Their shares are down.

Look, there are real assets here.

On a unit level of the 550

locations, you got to imagine 150 to 250 work really well.

I mean, I don't know how many of you have been in Dewey Work.

They have evolved the concepts.

Some of them are really cool.

But the problem is this needs to move from a growth story to a margin margin story.

And I don't think you can get it.

I think you're wrong.

I think these are just like shitty retailers that are trendy and then aren't.

And people are going to move on really quickly from these things.

Yeah, but that's enough.

A trendy retailer can be a lot of people.

But then it's just a kind of an okay real estate business.

It's not like anything like,

I don't know what they're going to do with the wave company, the pool wave company.

So you think it goes

totally away?

Go away.

No, I think it's a bankruptcy and it comes out the other end, a much smaller, much healthier company.

Perhaps.

I don't think it's that

hair on fire company.

let's relate it to another company to a certain extent we work has gone through the fire and it's like if you want to rip off the band-aid rip it off fast to a certain to a certain extent they're blessed now look at the other side there's uber which has to pretend it's a growth story right right now the co-working business is a shitty business that has negative margins right now ride hailing is a shitty business with negative margins but dara kasrashahi has entered into concentral hallucination with the marketplace that this is still a growth story uber whether it's next month or next year, is going to have to move to a margin strategy where they exit certain regions and they also increase the wages of their drivers such that they can comply

around minimum wage.

And they raise prices.

And all of a sudden their growth is going to plummet.

And the company people are going to realize this might be a nice business, but it's no longer a growth strategy.

And their equity is going to be cut in half at a minimum.

That's already happened for We.

So they can move right to the margin story, but they need to do it under the auspices of a bankruptcy.

So

what you're going to see play out over the the next 90 days at WeWork is going to play out over the next 18 months at Uber.

We're seeing what's about to happen to Uber, but more painfully and more slowly.

So the Band-Aid at Uber is being ripped off centimeter by centimeter as we realize this is not a high-margin business.

They just acquired something called Corner Store because they're trying to figure out our stock is inflated.

We got to find other businesses as quickly as we can because even though our stock has been hammered, lost, a shed, a third of its value, it's still ridiculously overvalued.

So we need to go find another.

So essentially, we're not going to get the vertical lift and takeoff vehicles that they promised us.

Yeah.

Yeah, we'll be lost.

That's not going to happen.

Not going to happen.

All right.

And they're going to get out of self-driving.

That's going to be all the big companies.

See, I think you believe in self-driving.

I think it's one of those technologies that's totally overhyped and won't get here nearly as fast as we think.

Well, we'll be dead, but it won't matter.

It's going to get here.

I can't say that about anything.

Well, all right.

There's going to be a lot of things that are going to come after you die, Scott, in case you're interested.

By the way, did you notice I'm sick and my voice is deep?

I said you sounded like Brenda Beccaro.

Anyway, Goldman sees a 26% drop in profits in Q3.

Their tech stocks are struggling, and it shows the bank took paper losses on its stake in Uber, among other companies.

How are failed tech IPOs affecting?

the financial industry.

We got Palantir and Airbnb coming out, presumably, next year.

So Goldman is seeing the financial problems with it.

DJ

DJ David or whatever his name is.

DJ Soule.

Okay, whatever.

I've trolled the worst night lounges in Jersey City trying to find DJ Soule.

Okay, all right.

By the way, he's an awful DJ and a worst fiduciary.

He came to code this year and I told him, he asked if he could do DJ and I said, absolutely not.

But go ahead.

So JP Morgan announced today also they beat.

And everyone's going to blame it on tech.

I think this is a brand strategy problem.

I think Goldman's luster and margin came from being exclusive and a highly differentiated product that offered scarcity.

It's the luxury brand of financial services.

And I think when they start going into retail banking, when they start being the bank behind a credit card company, it is effectively a flaw in their strategy where they are now deciding to compete with lower margin competitors.

So they'll blame it on Peloton or losses from Uber, but I think strategically Goldman has given up the core asset of being the premier place that human capital wants to go.

When I was trying to take my company public in the late 90s, 90s, we all dreamed of a Goldman on the left side of the tombstone.

And I think slowly but surely they're eroding that, pursuing the power.

But who's taking over for that?

That's the correct strategy.

I think a lot of the niche companies that have spun out that aren't subject to public scrutiny and don't have the same quarter-to-quarter growth considerations are becoming the new Goldman's.

But I think it's a failure in brand what Goldman's going through right now.

All right.

Okay.

Mark Zuckerberg.

I'm going to see him in D.C.

this week.

He's speaking at Georgetown.

I heard he's currying favor with all the powerful people.

That's what I'm saying.

Not the powerful people, specific powers.

He's been hosting dinners and meetings with right-wing pundits.

He has off-the-record chats with everyone from Tucker Carlson, my friend,

Tucky,

who always has such nice things to say about me.

Senator Lindsey Graham.

Last year, Lindsey Graham insinuated that Facebook could become a monopoly.

They've been hanging out at his various homes.

He's got several homes.

He's not having dinner with Elizabeth Warren.

Instead, he's snarking on her at meetings of Facebook.

What do you think of this?

And at the same time, they decided to reiterate a policy this week that politicians can lie in their ads, which then Elizabeth Warren bought an ad, did a fake ad on Facebook, which I thought was rather clever of her.

What's going on here with Mark and Tucker Carlson?

What do you think?

I've been doing all the talking.

What do you think is going on?

I think

they are the most reactive company on the planet, and they think they're under some sort of,

Elizabeth Warren means business.

A lot of her, you know,

she's got one policy where they're they're going to, some of the negligence that Facebook has done would be a criminal act.

She's been very serious about it.

She's very,

I don't know, she's very clever in coming back at them.

She's been consistent at coming back at them.

I think the fake ad thing was, I don't know if anyone's paying attention, but it was really, it scared the Facebook people.

I think the fact that he's so riveted to her, like that he mentions her, I mean, one person.

He's endorsing.

Yeah, one person in Silicon Valley was saying the way he could stop her is by endorsing her.

But

that they're worried about her.

And she brings, every tech executive just cringes when they hear her name.

And she said she's not accepting any money from them.

She's going to give back money that she got from tech people.

She is, of course, doing a lot of buying on Facebook and everything else, probably the most of any candidate.

But at the same time, she's sort of kicking him in the teeth any chance she gets.

Well, so imagine that it had been discovered that Vox had not put in place the requisite safeguards to ensure that the intelligence arm of Russia had weaponized Vox and potentially suppressed the vote in Key Swing State.

Something tells me Vox would, A, a 99% likelihood Vox would be out of business, and there'd be 100% likelihood that if we were allowed to stay in business, we wouldn't be taking political advertising.

We'd just say, let's just take this cycle off, because we're not very good at that.

I think they should take it off.

Well, okay, they're not, right?

And to their defense, the ads they accepted from

the Trump campaign, a lot of broadcast networks accepted.

But the notion that Facebook is taking political ads and has said there's already evidence of meddling is outrageous.

All right.

But in terms of them hosting the dinners, though, you think that's a smart move then for Facebook?

And all of them are sort of visiting Trump and visiting the right wing.

Not all of them, but they've all visited the White House.

They were

initially very against and very complain about immigration and stuff like that.

They've quieted down quite a bit.

They're worried about Macon Bel Rahim at the Justice Department.

They're worried about the FTC.

They're worried about, and they're trying to influence it now, presumably.

Yeah,

I think it's going to backfire.

And I think the breakup has begun.

I think they're going to be broken up.

We've talked about this.

I think it's happening.

Probably going to happen at the state level, not the federal level.

And all we need is kind of, if things get scary again around our elections, I just can't imagine, I can't imagine why they would decide to take that sort of risk because if some

I think they're under the impression, they're totally immune.

So for example, remember two years years ago there was a bunch of news.

You're in the advertising business.

At my old firm L2, we used video as top of the funnel to drive inbound inquiries and then we'd sell into large corporations.

And so we were constantly trying to figure out how to get videos of our crazy founder to get more reach, more penetration, more plays.

And YouTube, we were getting at somewhere between three and five cents a view.

And then all of a sudden everyone was talking about Facebook video.

Yeah, and people invested in it.

People invested.

Vox did the same thing.

So we got feedback that we were getting views on Facebook at a half a penny.

So we took our own pretty much our entire budget and we switched to Facebook.

And we were told that we were getting views at a fraction of the cost of YouTube or other vehicles for customer acquisition.

And then we have since found out

that that was total bullshit.

They lied.

And there's absolutely no recourse.

The only recourse is $40 million to whatever ad agencies were so pissed off and had enough money to actually be a thorn in their side that they cut a check for $40 million, which I think is about, I don't know, 11 hours of cash flow.

So the notion that this company has any concern or regard for

good faith with partners, think about how many companies, I don't know how many people in the room literally pivoted their media budgets.

How many companies went in and out of business based on totally false metrics?

And a lot of people would say, well, shame on you for

allocating your spend without third-party verifiable metrics.

I'm like, you're right, we screwed up, we trusted them.

But what seems to be weird is we keep screwing up and we keep trusting.

No,

I think media companies have moved along, moved on to other places, and I think are still trying to figure out where it works, where they're media companies have moved on from Facebook?

No, they're not moved on, but they understand that those Facebook video and all the focus, and they've moved far away from it.

I think most of them, it was interesting.

They came to me actually early on when they were doing that and said they would like you to, you know, they offered all those different things.

They want you to do it.

And I was like, where's the money?

Where's the actual money and the actual numbers?

And they were like, you know, you'll get more famous.

They had all kinds of things.

And I didn't do it because I thought it was a waste of time at the time.

But what's interesting is that I think most publishers know this, but don't know where to go.

Like, I think YouTube still remains the best option, correct?

That's what, and I don't have, my data is anecdotal on this, but I found in terms of small and medium-sized business, to find actionable funnel, you know, hard metrics around video and targeting that YouTube was far and away.

YouTube and Twitter for marketing.

That's pretty much, I think.

We're still not reached that moment where anything really works well.

Well, the reality is

Facebook and Google.

TikTok.

Should we and I do dance videos on TikTok?

God, that's an awful thought.

Yes.

We should do a TikTok video.

Facebook and Google work.

Facebook and Google, but not Facebook video.

No, Facebook video doesn't work.

But Facebook and Google as a whole work.

I mean, unfortunately, we've entered the experimentation experimentation phase.

And to a certain extent, Snap and Pinterest have carved out little niches.

My theory is that Facebook and Google keep them alive and don't put them out of business, which they could do with a Jedi mind trick in about three minutes just so they can say they have competition.

Twitter is more dependent upon Trump's reelection than any individual in the world.

Jack Dorsey will benefit economically more from Trump's reelection than any individual on the planet.

If you look at their stock price, it's down 50%.

Trump gets elected.

It's doubled since then.

So he's not going to be thrown off that medium.

Well, that's, I mean, if we were making 110% of the profit at Vox, we could get up here and do pretty terrible things, and they would tolerate us.

So it times that by 10.

There is no individual that is more important to the economic well-being of Twitter employees than the Trump re-election.

All right.

Okay.

All right.

Last big story breakdown, the tough one.

Bill Gates met with Jeffrey Epstein many times after his convictions in 2008.

Does this matter?

The New York Times reports that Gates had visited Epstein at his house numerous times.

He flew on his plane,

which brings the question around judgment.

In his email to colleagues for one of these visits in 2011, he said, His lifestyle is very different and kind of intriguing, although it would not work for me.

That is not a great email, I think, in general.

Is this a big deal, or how big, you know, tech ties to this?

There's a lot of tech links with Jeffrey Epstein, there were.

This one is obviously problematic for Gates.

Yeah, well, I'll ask you.

I mean,

why do we care?

Why do adjacencies to people create guilt?

That's a fair question.

I think the question is, what was he,

after knowing a lot of these people had dinner, after a conviction?

You think an adjacency is okay after a conviction of that?

Supposedly in our society, with most people, we say if they've been convicted of something and they've served their time, supposedly it's a progressive ideology.

I mean, in the fullness of knowledge now, none of us would have anything to do with them.

But in America, we like to think that when someone is convicted and they serve their time, they've made their payment to society.

And to be on their plane or to be associated with them,

are we guilty if we hire an ex-con?

Is that a bad thing?

You're affiliating with a criminal.

Well, a former criminal.

Why is this any different except we know what we know about it?

I think if you're, they don't, these people do not live like you and I.

And I think if you're Bill Gates, you need to vet people you're hanging out with.

You just can't, like, because of what could happen later.

And when there's,

there was a whisper network about Epstein, I think, among the very wealthy people.

And they understood what was happening with him.

And I think that they, I don't think they understood the extent of it

or how bad it was.

And maybe some of them did, by the way.

And that's the bigger worry, I think, is more revelations coming out.

But I do think if you're the world's, among the worlds are just people you have to be careful about the company you keep, or else it's going to come back.

And it's amazing that nobody vetted this or gave him any kind of advice of not to

know who you're going to be in a room with.

Or we as a society need to get out of this shaming culture where we look for reasons to embarrass rich and famous people.

Okay, Bazona's jet.

Who gives a fuck?

I mean, that's okay.

I don't know.

I think it's just a job.

I don't know what all of you have done.

And if you offer me a ride on your jet somewhere, I'm probably going to say yes and I'm not going to vet you.

I mean, it's just...

kind of enough already.

It's just a shaming industrial complex.

I'm going to disagree with you.

I think the leaders have to like show a little bit more judgment.

It shows really bad judgment.

I think having that dinner, Joey Ito, you thought that was fine to take that money and hide it from them.

That one you didn't think.

Well, okay, so this is at MIT.

The academic industrial complex,

the relationship between the quality of a university or the rankings is directly correlated to its endowment.

They're under constant pressure to raise money.

All right.

So if someone wants to give money, and I'll go further than that, cash is check.

Should his heirs, who's better off with Jeffrey Epstein's money, his heirs or MIT?

Why is it bad that cash is checked?

I'm going to draw a hard line of pedophiles.

Okay,

I'm going to do that, and I feel good about my decision.

And I think they went to great lengths to hide it.

That's

what got them in trouble.

Not just that.

They knew it was a problem.

So why in that meeting, I would like to have been in that meeting where nobody said, This is a problem.

Maybe not so much with the pedophile money.

Okay, maybe we can go find another rich person.

And that's the link link to Gates, right?

Well, it's somehow, there's somehow, there's a whole group of people that are still being sorted out.

But there was a guy named Boris Nikolik who was his science advisor.

They all went to Ted at some point.

Ted is somehow involved.

There's all kinds of different places.

There's a whole, if you go, if you live in this world, and I have been to a lot of these events,

they have these dinners, and then...

Gates is at one table talking his head off and

they sort of do these sort of smart people dinners.

And so they bring in a few academics, they bring in some science people, and then they essentially entertain the rich people.

That's really what it is.

But your thesis is that if you're a billionaire, the onus is on you to do more diligence around the people in the room than you or me.

I think I'd go, I really shouldn't be on the planes of someone convicted of problem

sex offenses.

And I would have investigated him.

And especially with Epstein, because Epstein was well known, was young girl, young women.

And I think you're the richest guy in the world.

You should have like real good detectives.

I think.

That's fair.

I already have really good detectives at my level.

Okay, quick break time.

We'll be back with more live pivot in New York City.

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All right, enough with the ads.

It's time for Pivot.

All right, so wins and fails this week.

What are your wins and fails?

We're going to get get to predictions.

Because my prediction last week was

this is turning into soda, but my win is National Mental Health Day or World Mental Health Day.

I think I like this notion of unlocks, and that is what are easy things we can stop doing to unlock happiness or prosperity.

And I think that the stigma of mental illness is something that we need to address.

The notion that we had, I was really moved by a tweet, and it's public so we can talk about it, but Jason Delray talked about

how therapy has helped him after the death of his mom.

But I think even just people talking, especially men talking about the struggles, I've had struggles such that it's something we can open up about.

And by the way, one of the best therapies for this is just talking about it.

So I think this is a fantastic unlock that we're getting more comfortable with the struggles we all have.

And I think it's something that can

assuage and relieve a lot of pain and suffering.

And I like where we're headed on this, that

really handsome men like Jason and myself are comfortable.

It's not that funny.

It is, because Jason is handsome, you're right.

Anyways,

my win is World Mental Health Day

on

October the 10th.

How about yours, Kare?

What's your win?

Oh, I was going to do something self-aggrandizing that I predicted Michael Bloomberg would think about entering the presidential race.

And indeed.

You predicted that last week.

Yes, because we need another person, 70-plus candidate.

We need another 77-year-old.

Right, right.

There does seem to be an opportunity.

Right.

My fail is Facebook and Libra partners who are abandoning SHIP rather quickly, which we said was going to happen.

Libra, dead on arrival.

Who would have known the centralization of MasterCard with the culture of Uber and the corruption of Facebook, and it's not working?

Who would have funk it?

Who would have thunk it, right?

I know the three steps to tyranny are to take control of the media, then you get control of the money, and then you get control of the military.

Yeah.

And Facebook's done such a good job of the media, let's get control of our money.

I don't think they're doing an army.

Well, yeah, but the first two get you the third.

I see, okay, fine.

But in any case,

Libra looks bad.

And I love David Marcus's thing.

He's like, this is just a temporary setback.

We have big announcements to come when every major...

I mean, that guy can really...

I wrote him, I go, well played, but it's not going to work.

Talk about spinning chicken shit into chicken salad.

That thing, the only thing that is more ridiculous is them trying to convince you to put a camera in your house from a guy who puts tape over his own camera.

Yeah.

Right?

That's better than that.

That's the guy we should have.

Portal is new.

Portal is the new portal.

Yeah, that's over.

But

my fail is Facebook, in my opinion, abusing

agencies and this whole miscalculation of metrics and then a $40 million fine.

I mean, it's just, anyways, Facebook.

Facebook, my fail.

Two more things before we go.

Any exciting startups you see on the horizon, anything that just is like that is cool?

Ton of startups?

Yeah.

Yeah.

I'm inspired.

What inspires you?

There's a ton of them.

I think the guys at Morning Brew and the Hustle do a great job making email cool again.

It's one of the few mediums that hasn't been monopolized by a monopoly, and you can actually figure out a way to build a business, which is email.

There's no monopoly in email, so it's a medium.

I mean, that's what happens.

When monopolies own a medium, you can't start startups in that medium whether it's video or social or search can't survive but no one fortunately has monopolized email there's a company started by some Sterngrads called Pepper which is direct-to-consumer undergarments Rally Roads is a great startup that mutualizes classic cars as an asset class

I'm a bigger startup I'm pulling for rent the runway.

I think they kind of define that category.

I love that they handled their crisis and they were very transparent about it.

There's a ton of inspiring startups.

Unfortunately, there aren't enough, but I see, yeah, I think there's a ton of inspiring information.

Do you see this as a period of time when SoftBank is pulling back all this money of startups coming back?

Because startups have sort of been on the ropes a little bit.

Yeah, but

SoftBank right now doesn't look to be pulling back.

I mean, where we are, the market's going to correct SoftBank because we're in this very strange situation where 76% of companies filing for IPOs in 2019 were were not public.

And in 2009, one in 10 were not public, or 9 in 10, excuse me, were not profitable, or 9 in 10.

So it's very easy.

By the way, the last time we hit this ratio of nonprofitable companies, 3 and 4, filing for public offerings, when was that?

What year was that?

I'll give you one guess.

2001.

1999.

Right before you.

So it's very difficult to time the markets.

But the notion that it's not different this time, oh my god, history may not repeat itself, but it is rhyming like you cannot cannot believe right now.

It was literally about 75% in 1999 of companies filing aren't profitable.

We've hit that number again.

For the first time since 1999, private equity valuations are greater as a multiple of earnings in the private market than companies are in the public markets.

We are literally breaching, if you will, the same dams that happened in 1999.

These valuations are just out of line.

These valuations are ridiculous.

But I don't see innovation in advertising.

I don't

I don't see any new innovation because of these two big companies sort of controlling anything.

I don't see a lot of innovation in consumer, anything really fascinating.

Sort of.

Sort of.

It's a lot of more innovation in commerce.

There's a little more innovation in commerce.

What startups do you like?

I'm looking at things like ag tech, like things you, like cow sensors and things.

You put things on cows.

You put like little Fitbits on cows.

They put Fitbits on cows, and then you find out what they're hanging and doing.

And there's also facial recognition for cows.

I think that's really interesting, like where they are in the field, how much they ate, that kind of stuff.

I think it's just interesting.

I think

nobody's doing it.

So I think it's really, I do, ag tech is a big thing.

I'm just telling you, like how we do, how we do crops, how we figure out what to plant, what's thriving.

You should be a partner at SoftBank.

You sound like you're right in there.

I'm just telling you, I'm fascinated by this stuff.

Cow tech.

Cow tech.

I'm just telling you, cow tech.

You just sit, you wait and see how we're going to figure out food and things.

And the next, that is a big area.

There is.

Climate change tech.

I think that is a thing that I would, I'm going to spend a lot of time being focused on.

Climate change.

And I've said this over and over again.

The next.

The world's first trillionaire will be the person who solves our climate change, which is so this week alone, like

in Montana, in Tokyo, and then just the news that the Trump administration is going to start logging another forest that we haven't done forever.

I I mean, it's just, there's so much opportunity for someone to come in here and find solutions to these problems.

The problem is the solutions are boring and don't create trillionaires.

If we planted another trillion trees,

I just feel like, and then space tech.

I think space tech is really interesting.

I do.

I'm very, it's a longer-term thing.

Same thing with urban mobility, and you don't agree with men and transportation, but you're completely wrong.

I just think that that kind of stuff, the big thoughts, I'm a big thinker now, Scott.

Enormous.

You're mired in the tiny

dwarf amongst the predictions.

My prediction, WeWork will have massive layoffs very soon.

Well, that's not a prediction.

All right, what is it?

It's already happening.

All right, okay.

Yeah, so I'm doubling down.

Somebody leaked today, either JP Morgan or Adam Newman or somebody at WeWork is trying to position to get a better deal from SoftBank in terms of equity terms.

Okay.

But I just don't see how this thing doesn't involve a bankruptcy.

I don't see how you

cut costs this fast.

And the other prediction is there's just going to be such a re-evaluation of venture growth.

I mean the data,

SoftBank literally violated every basic norm of good venture financing.

One is distance from where you invest is inversely correlated to returns.

So if you're an investor and you live in Chicago, you want to invest in Illinois.

It's literally the drive test.

And if you look at their investments, they're literally the returns are inversely correlated to distance.

The further they got away from Tokyo, they made in a ton of money.

And Alibaba, they got smoked when they went nine time zones to New York.

Anyway, thank you so much for being here.

We've got to get out.

We will be back.

We will be back with Pivot Live twice a week very soon, I think super soon.

And then we're going to Stanford University next week for a live pivot.

Neither of us got into Stanford, so fuck them.

We're coming back.

Go Bears.

Go Bears.

And we expect swag from them, and we are going to show them that we would have been good Stanford people.

Tripled the number of applicants, quintupled their endowment, but haven't increased their freshman seats.

One seat.

Not a good for society.

Go Cardinals.

All right.

Anyway, thank you very much.

This is Live Pivot from New York.

This is Scott Galloway, and I am Karen Trister.

Thank you.

Thank you.

That's our show.

Lovely to see you as usual, Scott.

Great to see you in the greatest city in the world, Carol.

That's right, New York City.

We've made it here.

We can make it everywhere.

That's a song.

Don't sing.

Don't start singing.

Start spreading the Carol.

No, no, stop.

I'm going to.

He's with the dog.

Oh, God, Scott's singing.

So I guess I'm going to move on very quickly.

By the way, if you're interested in learning more about the media and entertainment businesses, there's another podcast from Recode that covers just that.

It's called Recode Media with Peter Kafka.

Every week, Peter interviews the smartest people in tech, media, and the entertainment field to find out what happens when those things collide.

Subscribe to Recode Media for free right now in Apple Podcasts or your favorite podcast app.

Anyway, today's show was produced by Rebecca Sinanes and Eric Johnson.

Erica Anderson is Pivot's executive producer.

Thanks also to Rebecca Castro, Drew Burroughs, and Nishat Kirwa.

Make sure you subscribe to the show on Apple Podcasts.

If you like this week's episode, leave us a review.

Thanks for listening.

Full apologies for Scott's singing.

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

Someone get him out of here.

Come here, Bob.

Get in here.

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

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