Alexa, who is Scott Galloway?
He is an Australian professional soccer player.
We had a stellar time at the KNOW Identity 2018 conference in Washington, D.C. in March 2018. Prior to heading down to D.C., we shared which sessions we were the most excited about – and they did not disappoint. Over the next few weeks, we will be sharing some of the highlights and our favorite moments from the panel sessions and the various keynotes.
The opening keynote at the KNOW Identity 2018 conference was on The Break Up of Big Tech by Scott Galloway, who is “a professor at the NYU Stern School of Business, … founder of Red Envelope, Prophet Brand Strategy, and L2 Inc. … His book, The Four (Portfolio Penguin, 2017), debuted on the New York Times and Wall Street Journal bestseller lists in the hardcover non-fiction and hardcover business categories” (OWI).
Galloway’s keynote took us through The Four and the various influences Amazon, Apple, Facebook, and Google have on our lives and the economy – and he spared no feelings in a delightfully humorous and engaging way. He paints The Four as our new brain, our source of love, our consumptive gut and Apple is sex. Their ability to tap into basic human instincts has aggregated more market cap than a majority of nation’s GDP.
The rise of these four to the top has been swift. In 2006 the five largest companies included Exxon, GE, Microsoft, Citi, and Bank of America. Now it’s all big tech – Apple, Alphabet, Microsoft, Amazon, and Facebook. Now that they are at the top, Galloway explained exactly why they should now be broken up.
Galloway was quick to jump into the depths and point out that there’s no real consequences for these companies. While they are fined for breaking regulations, we, as voters, are allowing it by not electing officials who enforce the regulations appropriately. When Facebook was fined $122 million dollars for providing incorrect and misleading information about its acquisition of WhatsApp, he showed how the fines incurred were less costly than price to do these correctly with that $16 billion dollar merger. Similarly, Google incurred a $2.7 billion dollar antitrust fine in the EU, 3% of their cash on hand, and their stock rose.
He continues on to discuss online advertising. “Two players own the future” – Facebook and Google. As their revenue grows, everyone else’s is declining.
Facebook has arguably won mobile by owning six of the top ten most downloaded apps on Android (WhatsApp, Facebook Messenger, Instagram, Facebook, Facebook lite, and Messenger lite, in case you were wondering.)
Facebook has won mobile in other ways as well. Back in 2015, the world spend an average of 20 minutes a day on Facebook. That number has only climbed to 35 minutes a day. In the U.S. we now spend about four hours a day on mobile, with the top five apps (Youtube, Facebook, Snapchat, Instagram, and Twitter) accounting for nearly half of that time.
The key to competitive markets is that no one company has too much power. Galloway compellingly argues that we should break up the big four because we’re capitalist – these markets are no longer competitive. Regulation and Anti-trust busting will oxygenate the market when done carefully and methodically.
Galloway explores one of his two metrics of a great nation – the success of the middle class. It shouldn’t come as a surprise that ours (the US) isn’t doing all that well. Galloway suggests that we’re no longer looking to create millionaires, but the first trillionaire.
Galloway ended his keynote with a prompt for the audience: in two ecosystems, one with The Four, and one where The Four are broken up into 11 companies, which would provide a more diverse ecosystem? Which one would have a broader tax base, more jobs, more millionaires, and maybe fewer billionaires? The answer becomes rather obvious – more smaller companies creates more diversity. “Search your feelings, you know this to be true,” he finished with a strong message, “It is time to break these four up because we are capitalists!”
Think he spared Amazon? He did not. Our next post in this mini-series will focus on Scott Galloway’s thoughts on Amazon.
Missed us at KNOW Identity and don’t want to wait until next year to chat with us? Let’s talk!