Uber is 'disruptive and drunk', weWork is 'just drunk', and Pivot turns 1!

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Hey, Pivot listeners. Today's show officially marks one full year of Pivot.

In that time, Scott and I have talked every week from studios in Nantucket to basements in Paris and London to live stages at South by Southwest. And it's always been audio magic.

But of course, this week to celebrate our first year, we've had our first technical snafu, and Scott, through no fault of his own, had to call in from Florida.

So bear with us this one week because our sound quality isn't quite up to Pivot's standards. Thanks for hanging in for all of our antics and hijinks so without further ado here's the show

hi everyone this is pivot from the vox media podcast network i'm kara swisher and i'm scott galloway and kara i'm locked and loaded and just waiting on instructions from saudi arabia on what to do next

i'm waiting

you're waiting from saudi arabia just like the president i'm waiting for our allies the saudis to tell us oh my goodness god there's actually a really disturbing story about the whistleblower.

I think that's going to be interesting. We're going to have to talk about that next week.

It's developing. But we've been experimenting a lot on the show recently, going live, bringing on guests.
But today, Scott, today

is Pivot's one-year anniversary.

I remember. I remember.

It's so nice to know. You know what? The reality is, I don't think anyone else in the world could put up with your shenanigans or tolerate my awesomeness other than your channel.

I think that's opposite, if you want to turn that around, Black Spider-Man. It's just like, it's opposite.
Like you are shenanigan full, and I am here to pull you in. I think most people feel that.

I think most people feel that. That is what's going on here.
No,

in all seriousness, there is no one in the world I would rather offend for the rest of my life than you, Katie. Oh, well, thank you so much.

You know, people have literally, I was at a parent-teacher thing last night at the school, and like three people were like, you and Scott, ah,

like on and on. I was like, I don't like like being at those things in the first place, but I have to say, people like our little game, our little, our little witty banter and stuff like that.

Yes, we are. Hashtag we are awesome.
We are awesome. Which we remind everybody of all the time.
But listen,

we have done a recap. So behold this mighty recap of some of our timeless banter from our first year of our podcast, Matrimony.

Scott, where are you?

Rebecca Q. The Wagner.

That's right. A quick shout out to my dozens and dozens of messages.
Bitches, I am back.

Liberating you from thoughtful conversation.

General Gestalt, you know, they say the saying is, if you're not paying for something, you are the product. And that's how they treat us.
They treat us like a product that's inanimate.

And I just, they aren't showing a certain level of respect, I think, for their consumers.

I was talking to someone pretty high up at one of the tech companies who isn't one of those social power. And they're like, you know what's amazing?

Around the world, like in New Zealand and Australia and Europe, they're already like making moves about how to fix this. And like

here we're just deciding whether it's a problem. But that's the myth, Kara.
It's ridiculous. I would agree.
I didn't think of that. I'm like, you're right.
They're like debating the problem

and then not telling you. about these breaches to me is again the same problem that there is not a federal law that requires immediate immediate disclosure of these hacks

You and I are doing an off-Broadway show. We are? It's going to be a mistake.
Oh, my gosh.

She's a lesbian journalist. He's an angry, depressed professor with erectile dysfunction, and their wacky neighbor is Evan Spiegel.

Come on. You'd buy tickets for that.
I don't think so. You'd buy tickets for that.

Sad.

That's a sad place. All right.
Fails. Wow.
What a. I'm sort of speechless.
I don't know what to make of that. I'm speechless.

I don't know what to make. I don't know if that.
Was that a low light? Are they trying to get us canceled?

Did some editors say,

let's shit in the pond here and make sure there's not a year too?

You know what? Your Wagner thing. What's your music theme for this year?

Wagner, whatever. What's your music? Oh, I'm kind of going down with the DJs.
I'm in the midst of a Bezos scale midlife crisis, so I've decided I like DJs, which is totally ridiculous.

Calvin Harris is my new man. I'm really into Calvin.

What do you listen to? What does Karen Wisher listen to?

Whatever my sons are listening to, it's often hip-hop I don't understand. That's really pretty much it.
They get, you know, they, they, they, last, the other night, they put on some old song.

Like, we have sonos in our house, like in the walls, essentially, and they just put it on in my room all the time, and that's what I listen to.

But in general, country music, Scott, I like country music. Do you listen to country? I do.

I love country music. I don't just listen to country music.
I love country music. Oh, my gosh.
I would not have guessed that. Jesus, take the wheel.
Jesus, take the wheel, Scott.

That's all I have to say. Fantastic.
Anyway, I'm going to give you kudos because of

WeWork. We work.

Let's roll the tape of your prediction of yours has come true.

If you look at WeWork, WeWork is now, by a lot of analyses, the floor they own in a large building is technically worth more than the building itself that it leases that floor from.

And it's hard to see what kind of network effects or technology.

Yeah, it just doesn't.

I think WeWork is going to be in the news for all the wrong reasons. January 2020, that was January of this year.
Scott, you have to say your big word:

gangster. Boom.
That's right. Thank you.
B-double-O to the M. Hello, fans.
That's right, ladies. Watch this shoulder.
Spread a little, Scott.

People are literally giving you a lot of credit for taking this down. I get side credit, but you're getting all the big credit for taking this thing down.

You know who gets credit or what?

You know what gets credit here? What? Math. Math, basically.
This was just great. Anyone who could do math said, okay, this makes no sense.
But

it's been, actually, we got Aswat the Motor and my colleague at NYU did a fantastic analysis of the company.

But probably more than anything or any topic I've written about or spoken about, I've gotten more attention or inbound inquiry and more press attention on this. And then you kind of, you weighed in.

But it's...

It's been a really fascinating

week. They've pulled, you know, it's gone, think about this, it's gone from $47 billion in value to less than $10.
It's probably more like five right now.

So what we've seen in the last 30 days is arguably the greatest shedding of shareholder value of the last since 40 years. Well, just one shareholder, right? SoftBank.

Like, they're the ones that bought in big, and maybe some, I don't think there were others, were there? Well,

there's quite a few investors or people that are

ranging from J.P. Morgan to Adam Newman to the employees.
But that's, you just touched on what the real, the next shoe to drop here, and that is

the stories that are going to start coming out are the impact this is going to have on SoftBank.

Because SoftBank's two biggest investments from their Vision or their First Vision fund were Uber and WeWork. And someone's going to start marking their book.

And already, their largest investor, the sovereign from Saudi Arabia, has said that they're only going to reinvest the profits from fund one, i.e., zero.

That's the most polite way of saying we're not investing in Vision 2 fund. And And also the

Muvalada, I'm sure I just mastackered that fund out of the I think it's the UAE, has said that they're reducing the size of their investment or their commitment for a fund too.

So this is eerily reminiscent of the 80s when everyone freaked out about the Japanese coming in and buying studios and golf courses the same way everyone's been freaking out about this dirty money coming in.

And you know what?

Kind of the best revenge is they lose money. Yeah, exactly.
And that is they're probably going to lick their wounds and go home.

So we're probably going to kick this money out accidentally by showing them really shitty returns at the hands of charismatic, kind of gross, you know, charismatic idolatry-driven founders who take money, take a billion dollars and turn it into $50 million.

Well, what I want to know is the due diligence.

I have to say the Wall Street Journal has been doing a great job on this. They wrote a story today about this pot smoking, which I thought you might like that part of the equation.

He was on a plane, and I think the lead is, you know, it was lit, no, really. He was high, really, you know, kind of thing, talking about smoking pot and running around the world in the planes.

And one of the things that I was struck by was one of the companies that I just even missed it was a wave pool company.

He likes to surf, and he bought it, one of those companies that takes pools and makes them into wave pools. And I thought, where was the due diligence on any of this?

Where's the board? Honestly, you know, and they added, interestingly, Francis Freif, who was at Uber,

and it's just, you know, who had been there under Travis trying to reform Travis, which is a similar link. She's been on a board that SoftBank has an investment in.

But it's really quite, you know, Uber is one thing because

it's an economic issue. I don't think you think it's this kind of thing, correct? I mean, differentiate them if you can.

I mean, one, it's the economic business model is really problematic unless you raise prices and even then it's a problem, correct?

Well, Uber, to Uber's credit, what they both have in common is they're both shitty businesses with almost nonexistent margins, which means that as they scale the business, they just scale the losses.

So economically and structurally, they're both terrible businesses. That's what they share.

What Uber has done, though, and deserves credit for and might be able to pivot or flywheel out a great business, is that it is truly an innovation.

The ability to use software to connect these fallow assets or utilize these fallow assets that only get 4% utilization, known as cars, and then this excess labor force, if you will, that's desperate to have part-time work.

It really is a

true innovation. And it has, I don't know about you, but Uber did have

a real impact on my life. And I think it impacts millions of people's lives.
I wrote about this week in the Times.

I wrote about not using cars. And of course, that's part of the many ways I transport myself right now.
It's via Uber and Lyft and

taxis and car sharing. So, absolutely.

But here's the thing. SoftBank has all this money.
And by the way, it's not just these two companies. They were spending money around Silicon Valley.

I mean, I had so many VCs call me, like, what, like, what they would offer 200 million. And sort of, if you wouldn't take it, they give it to your competitors.

There's so much, so much, not just dirty money from the Saudis, but like so much money. And even now,

interestingly, the Saudis perhaps will have even more money with the raise in oil prices

because of the attack that happened there. But

how to clean this up? Let's talk about solutions, Scott. Because right now, the company said they're looking forward to our upcoming IPO, which we'll expect to be cleaned up by the end of the year.

We want to thank all our employees' members. They said they're going to keep going forward.

Yeah, that's a lie. Okay, I got that.
Okay, so

what would you do? If you were Adam Newman, you had fantastic hair, as you wish you did, what would you do right now?

Well, I'd grow it down to my waist and I'd pretend I'm Cher, and I'd totally cross-chest all the time. That's the first thing I would do.
And I would love it. I would love it.

And people would love if I could turn back.

All right, sorry.

Going back to your point, there is a difference between drunk and disruption. Uber

is both disruptive and drunk. What WeWork and SoftBank are is drunk, and that is they believe that they can be disruptive forces by showing up with more capital and investing more money.

So SoftBank saw themselves as disruptive to the investment marketplace, and we're coming in and blowing out of the water everyone from Andreessen Horowitz to Kleiner to Sequoia by offering better terms and more money.

What it ends up was that wasn't disruptive, it was drunk. We were came in and took out,

leased a floor in an office and invested massively and then charged a good price for the consumer. And it wasn't really disruptive.

They did evolve the co-working office sharing experience, but it was more drunk than disruptive. So the markets are starting to discern the difference between truly disruptive and just drunk.

So what's true disruptive? That's the name of your next book.

Move along. There you go.
I like it. D squared.
So what do they do?

This is a company that could go public and call it 2022. The first thing is they either need to bring an adult supervision or a president with some

or a COO with some credibility that can calm the markets and rein in what is what I'd call this sycophantic, very strange culture that the Wall Street Journal is talking about.

The media is now in full pile-on mode, going after kind of character assassination, which I don't like. But they've now decided that everything about this guy, he's no longer Jesus Christ.

He's, you know, he's something much worse than us. He's Satan.
So, but what do they need to do?

Bring in new management or supplement the management? They absolutely need to bring in a real board that can pretend to be adult supervision and fiduciaries for all shareholders.

They need to declassify the stock. They need to focus on margin expansion as opposed to growth.

They need to go from a margin expansion mindset with a differentiated product as opposed to just a growth mindset. They need to reprice their options such that their key employees stick around.

And they need to start reporting more robust financials without all these bullshit, what I call fraud splaining metrics. And

Scott, you're like

a lot of fascinating things today. But community-based EBITDA, every academic in the world swallowed their tongue when they heard this shit.

Or earnings before everything is what they might as well call it.

But this is a, if they, and not only I get rid of all the shit, the we live, the we grow, the we, the we, like, what the fuck stand up.

That sounded like people sitting around a table and attaching things. Like we drinking, we go bars, we this.

That's ridiculous. You can see a bunch of young, not very experienced business people sitting around coming up with these schemes, essentially their schemes.

And then an adult conversation with their investors that says, all right, you fucked up. You put in $12 billion.
This is a nice company worth $3 to $5 billion that can build real value.

We're going to go public in 2021. We are cutting the shit.
We are focused on margin expansion. We're going to pretend we're a real business here and get everything back on track.
It requires...

But at the end, it's just a real estate rental business, right? I mean, I just like, so they can't really get to like anything even close to that.

And then the competition, there's so many co-working spaces now, like everywhere. And it's got a good brand.
They do have a brand.

They do have a brand. And if you do go into some, I have been into some of them and thought this is a nice place to work.
They have created something differentiated here.

A differentiated product can command margins. It could be a company worth $3 to $5 billion.
They've invested $12 billion. They need some difficult conversations with their investors.

They need to reprice, remark, recast, reprice the options, focus on margin of business. This company can absolutely do that.
Let me ask you the key question. Will it do that?

That's the correct question. I think it comes down to leadership at the board level.

Who on the board actually has the sack and the perspective to say, do we want to go to zero or do we want to have a three to five billion dollar company that creates taxes, jobs, economic security for people and moves this market forward and is a real viable company?

I think it's an open and honest conversation and to say, look, we got to put down We got to put down the crackpipe here. Enough is enough.

You know, a crisis is a terrible thing to waste. This is a crisis.
This thing is not going out in the next couple months or even the next year. But there is an opportunity to hit the reset button and

you know, wake up from the consensual hallucination that has taken place between the investors, the market, and the management team and try and recast the thing. I don't know if it's going to happen.

It has to happen from the board level. And obviously, Adam has to play in a role.
Oh, and take the 10x voting shares down to 1x, boss. You're not 10 times as smart as your shareholders.

Do you think I should do an interview with Adam?

What do you think? There's been a push on the internet for me to do an interview with Adam Newman. They might do it.
They might do it. I've

been interested. I've inquired.
I don't know if you're invited. I'll be honest with you.

Yeah, I don't, I don't, I don't. I actually heard.
What would you ask him?

I'm trying to get an interview with him. Interestingly, the guy who I dealt with with Travis Kalanik many years ago is now working for WeWork.
So I'm kind of bothering him, of course.

He's like, oh, I'm sure he's like, Jesus Christ, this girl again.

But what would you ask? What would be your very first question if I do manage to finagle an interview with Adam Newman?

After we light up a doobie, apparently. But go ahead.

In 30 to 45 days, you've experienced the greatest destruction. You've ever seen probably what is one of the greatest destructions in shareholder value of the last 10 years.

Granted, you were responsible for the run-up. What have you learned and what do you plan to do? How do you recover? I think the obvious questions are the interesting ones.
Yep.

And also, there's been, do you acknowledge that this kind of cult of personality that's infected Theranos, in some ways infected big tech? Do you feel you suffer from that?

Do you bear any responsibility for creating a culture where the idolatry and cult-like environment there led to a certain delusional nature that tried to ignore the basic math of business and capitalism?

It's just, you know, there's a lot of fun questions to hear.

And just be like, you know, I would hope at some point during the interview, when he breaks into the power of we and collective consciousness, you say, boss, you're not here to enable people's consciousness.

You're renting fucking desks.

What if he cries?

No, I'm

kidding. Listen, we got we work.
Pivot, pivot, have WeWork on our belt here. What do we need to fix next?

What do we need to next? What do we need to fix? Oh, by the way,

tell us about your interview with the tallest man running for president. It was very good.

It was very good. It was an interview with Mayor de Blasio.
I think a lot of people were like, okay, this was, like, I don't live in New York. I know people hate him.

Like, I know there's all kinds of issues around him in New York. I focused on subways, transportation.
facial recognition, the things that I want to know about.

And actually, it was a really interesting conversation. You know, he tries to be a charmer.
That's his whole thing is, I'm so charming, but it's so obviously charming.

He's trying to be obviously charming. And he is, you know, I think he doesn't, I think he needs to talk more to the New York City Press Corps, which he doesn't do.

You know, I think they don't like that he works out in Park Slope all the time and doesn't do enough mayoring.

So, you know, it was interesting. I think you'd find it fascinating.
I went a different direction because, and I did say, I just don't think you can win. Like, I don't know why you're doing this.

And his answer was, why can't I? Like, I don't know what to say to that. Okay.

Why can't he sure

he's got a job running the 11

i know

that would be that was the answer i made but nonetheless um it was interesting we the stuff around the two things that were interesting is he was not so much for um less cars it was he was worried about the elderly and things like that that was his concern and then he was not so much against facial recognition uh he he thinks it's useful as as as his police chief does in a city like new york under constant threat of terrorist attacks so interesting

interesting it was interesting i thought i had had a good time with it. I had a really interesting time.

And same, speaking of power men, I had an interview with Steve Schwartzman, the highest paid investor ever, very close to President Trump.

I couldn't get him off that President Trump had been much maligned, part, which is exhausting to not, you know, him not blaming the Democrats for everything.

But he did have a really interesting discussion about teachers being tax exempt, teachers' salaries being tax exempt, and also a $15

minimum wage, which was cool. The richest guy, the highest paid guy, wants everyone to get $15 an hour.
But listen.

I love that stuff.

But

what conservatives would say is, and he is a conservative, is that people find their woke values after they've banked their $50 billion. Yeah, yeah, he gets that.
Anyways,

it's the right move. The one thing I would add.
He's a complex character, because a lot of his philanthropy is really quite amazing. At the same time,

his almost ridiculous defense of Donald Trump. I can see why he wants to support him for tax freeze and everything else.

And we talked about that a la carte idea. I don't like everything he says.
I'm like, it's not an a la carte presidency. You have to take the whole, you know, orange ball of wax, in my opinion.

Orange ball of wax. You will, you have to post to Twitter today is a picture of you and De Blasio.
Okay. You guys must look like a different species.

We didn't stand next to each other because he's so friggin tall and I look like a hot. I love that.
You walking around. My favorite TV moment of the year was when they filmed you

and Mark Benioff walking around the Salesforce office. He looked like he was about to eat you.
I mean, you literally looked like...

Listen, I want to get you. You look like Gulliver.
In today's episode, episode, which I

was

praising you a lot, we had a bonus pivot episode where you talked to Jason Del Rey, who hosts Recode podcast Land of the Giants, on whether Amazon should be broken up or not.

By the way, Amazon Pay is not coming back as a sponsor because of Scott Galloway, but that's fine, whatever. So it seems appropriate to bring up this new Amazon story.

It changed its search algorithm in ways that boost its own products.

And the Wall Street Journal again reported that despite misgivings from its own internal engineers and lawyers, it recalibrated its search engine to further promote its own goods, which is not great.

11% of all products used on Amazon come from sponsored listings. That's up three percentage points.

And in 2017, the European Union fined Google $2.7 billion, the largest antitrust fine in history, for unfairly favoring its own services over its rivals.

This was its shopping product. So this was really an interesting story.
What thinks you of this? Go right ahead, because they're not coming back as a sponsor ever. So go right ahead.

Well, this comes, as you would say, this comes as absolutely no surprise pusher, right? This is...

So look, Amazon's not doing anything different. I did a bunch of work for Levi Strauss and Company in the 90s, and they were frustrated that

they would advertise Levi Strauss and company on sale to get people into a JCPenney's, and then they would put at the front of the apparel section with better lighting and better signage their private label Arizona, which grew to be a billion-dollar private label brand, better margins.

So any retailer doing whatever they can do to pimp their own private label where they get greater margins, that's absolutely nothing new.

And like most things with Amazon, it's not that they're doing anything different than any other retailer. We've just never seen anyone do it this well and this rapaciously.

Yeah, and seeing the data, they get more data on everybody.

We had the away founders, and they're like, we're not selling on Amazon. No way.

No way. Even though it's a great distribution, like these are the away luggage things.
They're like, because Amazon is already doing rip-off versions of their products.

Yeah, it's and it's I remember three years ago in the office, we got a bunch of Alexas and we started telling the interns to bark commands at it and then log what Alexa was recommending around e-commerce.

And we would ask for batteries. Alexa, can I have double E batteries? And it would recommend its private label.
And then if you said no, it would keep recommending other basics.

And then it would say, I'm out of ideas, even though it carried DuraSpell and Energizer. So Alexa Shocker has been programmed to have a selective memory.
Right, exactly.

This is what your interns do. I'm sort of stuck when you have your interns yell at Alexis.

And then we take them drinking. And then we take them drinking.
Oh, my God.

Similar to what Adam. But

it's not anything new. There is going to be, we're going to see some sort of legislation.
Yeah, we're going to, something's got to happen here.

It's probably like everything else going to come going to come out of Europe.

What say you on this? I say it's a problem. I say it's a big problem.

I think it's a bigger problem than you think. I think it's related to products.

I think they've got a lot of enemies from the big packaged goods companies, you know, everyone from away up to the packaged goods company.

So they've got an array of people that can really turn some screws in Washington for sure and elsewhere. And

sort of FUD the situation. Interestingly, I had an argument with Jeff Bezos about this so long ago about NCAPs.
I covered retail.

And at the time, they were sort of insisting that they would never do something like NCAPs.

And NCAPs in stores, of course, as you know, is they pay to be on the NCAP of a supermarket, which is the end of the aisle because people buy stuff, grab stuff more there.

And he was like, this is not something we'd ever do. And of course, they ended up doing it.
Like, you know what I mean, pushing their own stuff and everything else. And

I remember having an argument with him at a TED conference of all places. But

it's just, of course, it's naturally what they do, but the amount of data they have, the amount of access, and the ability to block people, if they're seen as the only online platform, the only true online platform, they could be in, I don't know about break them up kind of things, but there certainly could be repercussions for the company, for sure.

Oh, 100%.

So speaking of repercussions for the company, Mark Zuckerberg's in Washington. He has not called me for dinner.
He had dinner with Senator Warner and some other senators.

They actually sent out a Pressley's admitting they had dinner. I don't know why.
I got a Pressley's this morning. I'm like, was Jeffrey Epstein there? Because otherwise, who cares if he has dinner

with

the senators.

But one of the things he

was talking about this week was the Supreme Court for the social media platform.

And he wrote a blog post which noted, the court will be an advocate for our communities, supporting people's rights of free expression, making making sure we fulfill our responsibility to keep people safe.

As an independent organization, we hope it gives people confidence that their views will be heard and Facebook doesn't have alternate power over their expression. So,

you know, I volunteer as tribute to be the Supreme Court justice, but

what do you think about it? Is it a band-aid? It seems insane to me, but I don't know. I'd love to hear your thoughts.
They'll fund it.

I think it's, again, I think it's brilliant delay and obfuscation, and that is they've modeled it out after our government, government, and that is you have a president, Mark Zuckerberg, appointing a Supreme Court to deal with difficult issues.

They've even framed it like a Supreme Court. That's the analogy we're using, where there's appointments and they're an independent body and they deal with the same.

Except that Facebook appoints them, right?

Well, exactly. But to be fair, the president appoints,

but has there's checks and balances around congressional approval.

But the problem is,

the nice thing about our Supreme Court is that once a justice is on the court, he or she cannot be removed, giving them intellectual freedom to do what they think is the right thing and the notion and what you have here is the this committee they're just and not only that the decisions of the supreme court are enforced by people with guns and badges and that's the two key things that are missing here is that one at any point mark zuckerberg can disband this thing and he's you know he's dear leader for life and there's nothing to say that these decisions will have any teeth.

So I find this is brilliant, but it's just basically delay and obfuscation.

So Mark Zuckerberg, whenever he's faced with issues around, okay, teen suicide has been directly linked to your gross negligence.

And you've thrown your latest beard, your $2 billion beard, Cheryl Sandberg, has kind of worn out her welcome. She's been kind of spent.
So now we need a new beard.

And the new beard is going to be this faux Supreme Court. And we'll talk about it.
They'll make some decisions.

And that way he can throw up his arms with really difficult issues around our elections being perverted or teen depression or hate crimes, and he can just throw up his arms and we've sent it to our Supreme Court and I will abide by whatever they say as long as I like what they say.

So

look, I think this is, again, more masterful delay and obfuscation. I think it's total bullshit.

If they want an editorial, call it, you know, if you want an editorial oversight board like the New York Times has or something like that, good, I get it.

But to pretend this in any way somehow addresses the problems in that you don't need to take responsibility for them or act on them or the governing body.

It's pushing off power. It's pushing off the responsibility.
I would be interested. What do you think if they put us on the board? What would we do? Trouble.

All I can think about is a robe. I would just like to have that kind of robe and just show up and

statement. I want to sit at a desk higher than everybody else and bang my gavel.

I am so Sandra Day O'Connor. I think she's a guy.

Loosen up, Sandy baby. Remember that?

Oh, my God. Brains and empathy.
We had one of the best stories last year about how she's taken care of her

husband who's Stephanie Alzheimer, who's fallen in love with someone else. I found that one of the most touching stories.
It was. I like Sandy Baby.
Anyway, Scott, we have to take a quick break.

You're not going to be on the Supreme Court, just so you know, you're not going to get to wear a robe unless you just do it by yourself at home.

When we get back, we'll talk wins and fails and predictions.

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welcome back to Pivot, where me and Judge Roy Bean are celebrating a year of pivot. Let's do what we do.
I'm Judge Judy. Judge Judy.

I love Janine Pirro. Janine, you're Judge Judy.

You know, she makes like $11 billion. I know.
I love that. She deserves every penny.
Judge Pirro, that's who you should be, Judge Pierrow, whatever. That lady.
Man,

I'm here to talk about. Oh, my God.
She's a nightmare. Let's do what we do best.
Roast some big fails of the week. Scott, what have you got for fails besides WeWork?

You've already chewed on that particular. Well, look, my fail is this, what I'll, I'll politely term this asshole culture that's developed in D.C.

as evidenced by Corey Lewandowski showing up, basically

mocking the body that he wants to join. And it just says, okay.

It's like interviewing for a club and mocking the admissions committee.

He sat in front of Congress or that committee on the first impeachment hearing, and he was so disrespectful. And it's like, let me get this, boss.
You're planning to run for Senate.

You want to be up there with them, and you're sitting there mocking them, being incredibly disrespectful. And it struck me that this is, and Democrats are guilty of this too, that D.C.

is now a place to go be an asshole, to be strident, to make your point, to be ideologically driven, and not to get anything done.

Whereas at the state level, because of things like they have to balance their budget each year, there's some level of comity, comity, there's some level of consensus, there's some level of a recognition that we have to work together.

So I think what we're seeing is this bifurcation between people pursuing public service at a state level where they might be assholes, but occasionally they're prone to fits of sanity and bipartisan action, whereas literally D.C.

has become come one, come all, come one, come all assholes who just want to make strident points. The freedom caucus.

They're also all playing to the president. There was that other congressman who talked fast.
I was like, who is that? I don't even know. I don't want to say his name because I don't even know it.

But it's like, literally, they're all like playing for just Donald Trump. And I was watching Linduski and I thought, what in the world happened to him when he was a kid that makes him such an asshole?

Like, you know what I mean? Like, he thinks it's funny. He's like that prankish asshole that was always in school with you.

There was always a guy like him when I went to high school and college and everywhere else and in workplaces. And doesn't, no, actually, you don't have him in workplaces because they get replaced now.

But

it's a really interesting, like, weird.

I have this feeling it's not going to end well for him in general. Like, I wanted to, like, fast forward 20 years for this guy and then think, oh, no, no, no, this isn't going to be.

Yeah, no, I think, look, I think he has a future in the armed services where he's killed by his own troops. I think this guy is, I mean, he's just such a

difficult,

you know, it's just, as you can tell how you're getting older. You know, what really offends me now, this is, in addition to thinking I might want to go on a cruise and you know

one of the ways you can tell you're getting older. I really it really upsets me when people don't show some level of respect for institutions.
Agreed. Agreed.

It's just it's just okay, boss, you really want to break down the institutions that are

helping take care of our old people, defending our shores.

You really want to insult these institutions that have taken two and a half centuries and are arguably the most precious institutions globally. Sure,

they have their faults, but they're the least bad of their kind. And by the way, you're planning to run for Senate? I know.
You know what my son said?

He was watching it on one of the news things, and all he said is he looked and he goes, what a dick.

Yeah. Perfect.

And I go, anything else? He goes, no, he's just a dick. What a dick.

So that's my lose. Okay, win.
What's your win?

My win is something boring. It's the S1.
And that is people are calling and saying, you know,

what killed WeWork. And this is a real victory.

This IPO was death by S1, and that is the disclosure here did its job. And that's when the shit hit the fan as people started reading through the disclosures and looking at the math.

And they realized, okay, this thing doesn't make sense.

And it's really, I think, a real victory because what could have happened here and almost did happen was that the markets maintained, you know, kept tripping on its ayahuasca or halcyon.

The thing went public.

And you would have had this destruction in value, but it would have been, the costs would have been paid or the destruction in value would have been incurred by retail investors.

So the S1, to a certain extent, that required disclosure from the SEC in the form of a prospectus that educated the market, potentially saved retail investors $40 plus billion dollars of losses.

So while I'm critical of the SEC, I think they're really more there to protect management than to protect investors.

I think the disclosure documents that are required for a company to go public, which, by the way, don't exist

with many markets, did its job. The math showed up and said,

we're going to protect the markets from this. And then, as I said, the next big stories are going to be not only on SoftBank, but also we didn't talk about this, the blast zone impact on JP Morgan.

So my win is the disclosure and death by S1. And

our system does have some checks and balances. And I think it's a victory that saved retail investors tens of billions of dollars.
Here's my win.

Automatic, which bought a Tumblr run by a guy I like very much, Matt Mullenwick, who's going to come on Recode Decode.

He just raised $300 million in Series D from Salesforce Ventures at a post-money valuation of $3 billion. I think he's slowly been building.
I haven't looked at the numbers.

I don't have them, but I think it's really interesting.

He's really been running that business for a decade or more, just slowly, quietly. I just like that kind of entrepreneur.

I haven't looked at the numbers to see if it's worth what they're paying, but I certainly do appreciate someone who spends all their time sticking to their knitting and trying to build their business into a viable.

I like that. I like that kind of personality.
And what does the business do?

It does like WordPress. It does WordPress and all ki it has all WordPress, WooCommerce.
They have all kinds of they just bought Tumblr. Just it's not very fancy, I'll tell you that.

You know, he's very interested in commerce. He has a lot of commitment to good journalism.
I just we we were on the WordPress platform when we were at All Things D and loved it.

And, you know,

it's a nice product. And it just like I just like I like when good guys win, I guess.
And I need to look at the numbers, obviously.

But it's I I'll talk to him about him when he comes on the podcast. But it was interesting.
And then I think I don't know if this is a win or lose, but Airbnb has said

intends to grow go public. I don't I can't tell in 2020 with a billion dollars in revenue, but I think they definitely face a lot of headwinds in terms of what they're doing to neighborhoods.

And I think Brian Chesky is one of the more laudable CEOs among this class, someone who will face problems and discuss them. But he definitely has

a lot of challenges of what what impact Airbnb has on neighborhoods.

I got an interesting tweet this morning saying they're ruining Amsterdam's neighborhoods because nobody lives there anymore and the return of drug dealers and things like that. And so

that's that, I don't know if it's a win or lose, but it'll be interesting. Speaking of S1s, when we see that one, when that one comes out.

I wonder to what extent those stories are being fueled by the hotel industry that rightfully is upset that they have to pay all these taxes and then this company comes in and

pays taxes. They pay taxes.

I just did something. I paid a lot of taxes when I was using it.

It's added in. They pay hotel taxes and things like that.

They pay that same level of taxation that hotels pay on the house. It seemed pretty high to me.

I don't know on the top of my head, but there was definitely a tax element of my payment, and it was not small.

So it's just the idea of people clomping through previously

regular people living neighborhoods, right, and not staying in tourist kind of things.

It'll be interesting. It'll be an interesting IPO.
And he is someone, you know,

again, this is a business that's super interesting from lots of points of view. And he's had ups and downs on on executives there, but he seems to have

he's a very intense guy. He's a very intense guy.
It'll be interesting. It'll be interesting to see.
So I hope it's a win.

I hope both of those things are a win because I would like to see more really solid, as you say, companies. Like you said, you said

when you were wearing the lesbian Zoo Tech and Lesbro shirt the other day, you know, it's the return of like businesses that are trying to make money and not growth, but really actually trying to build real businesses.

You're a good influence.

Any predictions? Any no, that's you, my friend. I don't predict things.
You're the king of predictions. I predict you're going to make a prediction.

There you go. So, again, and I'm circling back to my

the earlier story. There's going to be a really big story coming down the pike around the impact of the blast zone of on the blast zone of SoftBank.
That's the big story here.

Is the Vision Fund I think the Vision Fund could be on the precipice of an implosion that makes the WeWork story look like you know, look like an Easter, Easter brunch.

It's just this is the world's largest investment fund right now. I mean,

$100 billion.

Right?

It just reminds me, you know, business like real estate is a bit of a local business.

And it kind of has some really interesting implications, and that is, and I understand the lack of moral clarity around taking money or dirty money, but at the end of the day, in terms of our own economy and our own prosperity, there is an argument around cash their check, cash their check.

And our revenge is, quite frankly, they come in with a dollar and they leave with 20 cents.

And it props up or it gives American entrepreneurs the ability to go play in traffic and innovate.

And when the Japanese start showing up and buying our TV studios or our movie studios and our golf courses, and when the Japanese, again, show up and start funding entrepreneurs, you know, look out below because typically it's like I have a lot of friends who, once they made money in San Francisco and Tech, decided they wanted to to be film producers.

Right. And I'm like, okay, but to be clear, you're not going to get your money back.
The objective is just not to lose that much money. It's consumption.
And I think a lot of gambling.

Yeah, a lot of global investors have kind of America entrepreneur innovation envy. So they come in with large checkbooks, and it almost always turns out badly for them.
Yeah.

They should just buy bonds. They shouldn't buy like treasury bonds.
Right. Buy an ETF.

Buy Vanguard, right?

They buy apartments in New York. That's going down, too.
Luxury sales in New York are going down. It must be hard for you there, Scott.
I'm kidding. Did you know that? Thanks for that.

Thanks for that. No, but big luxury apartments are down.

Yeah, no,

it's a perfect storm brewing in New York, luxury real estate, but Crimea River.

Anyways,

so look, the big story here, the big story here that hasn't been

SoftBanks Vision Fund and what has really gone on here.

It's going to be fascinating. Somewhere at at the Wall Street Journal, the New York Times, someone's going through each investment.
So six of their investments have gone public.

Four of them are down since the IPO. I agree.

You could see this one coming. You could, I've been down there.
100%. 100% seeing this.
You know, I do have a prediction.

We're going to Canada next week, and I think Justin Trudeau's in big trouble with this brownface thing. Both a fail, by the way.

I don't know what you can do about things you did 30 years ago, but there's been a third picture of him. He seems to have enjoyed doing either black or brownface quite a bit.

There's three, there's one video, two, one video, or two videos, and two pictures. And they're quite ex there.
You know, I went to look at it with my kids. We're like, how bad could it be?

And then we're like, whoa, that's bad. Pretty bad.
What's the context? Like, what was happening? He was at an Aladdinite party for one. And again, we were like, how would he just put some?

Like, it is full. Like, it's a crazy picture.
It's like, wow, that took a lot of time to do that.

And then another one, he's fully

black body, like, black face, not just that, and then dancing around.

So it's not good.

It's not good for just. My question to you, and the bigger story is:

do you think that's disqualifying? Do you think he should resign as

I don't know? I don't know. I think, look, whatever you, I think it's terrible.

It was 30 years ago, so I'm like, okay, you put that into it. And then at the same time, you're like, wow, you might have said it at the time, this stuff.

He might have gotten ahead of it when all that stuff was going out in Virginia. I mean, that guy's still governor, right?

You know, I'm not sure it's disqualifying, but it sure is from a political point of view, because he's such a progressive. He's so known as Mr.
Sensitive, like you know, handsome, sensitive guy.

I think, I think that's where it hurts. It's like, just from a political point of view, it's problematic on every level.
And it's a good thing because Canada's sort of mixed.

People are like, who cares? It was 30 years ago, and another group is like, what's the big deal if you do that? And then there's another group saying, this is a big deal.

So I tend to go with the this is a big deal group, but it's a problem. And we're going there next week so we can talk about it live in Toronto at Elevate.

It's supposed to be the south by southwest of Canada. And we have like, we have fans there, Scott.

It's going to be, I'm really excited about it. I hope Trudeau survives this mostly because I think he's dreamy.
Right, and I think that's a huge asset and a global leader.

And also, my big geopolitical genius strategy was to prompt and goad Trump into invading Canada and pulling a reverse merger where their leadership takes charge of our country. That was my plan.

I thought that would, that we invade them and then they, it's a reverse merger, their management takes over. Okay.
So that's

Adam Newman is dreamy and you didn't stop you from attacking him like a relentless hyena. But okay, all right, dreamy.

A relentless hyena.

You know what? The big dog went up to that purebred Afghan, smelled its butt, and said, this is a labradoodle.

I think it was labor. It was all about the hair.
I think it was all about hair envy, and you just decided that was enough. That's what I think happened there.
Anyway.

He definitely knows how to roll on a golf stream, lighten up. This guy knows how to roll.
You're just jealous you weren't invited. Anyway, 100%.

It's a good week for Scott Galloway. It's a good week for Carris Fisher because this is an awesome first year of pivot, Scott.

I don't love you, but

I don't love you, but I really, really like you. How about that?

I appreciate your time. I admire you.
I admire you from afar.

There you go. Very far.
I have warm feelings for you. I'm trying to get something that's not quite love, but

I have occasionally warm feelings for you. You know what my favorite moment of yours is? Hands down?

It happened a couple weeks ago at that event when you said your favorite lesbian was Senator Lindsey Graham.

I just love that. Only you could say that.
I am dying to say that, but only you can say that.

On with that guy. I just can't.
I'm sorry. I just can't.
I can't even. I can't even, as he might say,

you know what I mean? I can't even. Anyway, Scott, it's been an awesome first year.
We got to go. We'll see you next week in Toronto, okay? We're flying up there for first class.

We're going to have some poutain and donuts and stuff like that. It's going to be really fun.
People stare at it. I can't wait.
I can't wait. Take it to a Leafs game.
No. That's Canada.

Best hockey in the world.

I'm going in and out. I have children, my friend, and I have more children coming, so I got duties.
Anyway, today's show was produced by Rebecca Senanez and Eric Johnson.

Eric 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.

And if you liked this week's episode, leave us a review. Thanks for listening to Pivot from Vox Media.
We'll be back next week for another breakdown of all things tech and business.

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