Mark Zuckerberg’s leaky staff and the silver lining to WeWork’s downfall

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Kara Swisher: Hi, everyone. This is Pivot from the Vox Media Podcast Network. I'm Kara Swisher.

Scott Galloway: And I'm Scott Galloway.

Kara Swisher: So, Scott, it's a pretty slow news week this week. What do you think?

Scott Galloway: Yeah, just sort of sit back, pull the lazy boy back, crack open a Mike's Hard Lemonade, and let's examine the shit show that is our life and the world that surrounds it. It's amazing. This is like every week. Only a couple days ago it was Ukraine gate. And now we have shooting immigrants in the legs. We've got all kinds of coups.

Kara Swisher: Just in the legs though, Scott.

Scott Galloway: Just in the leg. I mean, we're a humanitarian people, Kara. Just in the leg. We don't want to kill them. We just want to maim them. Maim them for the rest of their lives because they're doing so well already. We want to just give them that extra little horror show that they can take away from the United States of America.

Kara Swisher: So much stuff. And WeWork obviously continues. Yeah. All right. So much to do. But first of all, the big story breakdown. We're going to do a little something different. On Tuesday, friend of the show Casey Newton, who you call Schmacy, from The Verge, broke a big story. Someone inside Facebook secretly recorded Mark Zuckerberg talking to employees for two hours about Elizabeth Warren, TikTok, and his refusal to testify in several countries, among other topics. Scott, you and I are definitely going to have some things to say about this. But first, we're going to play a mini interview I did with Casey on Tuesday, right after he broke the story. Let's take a listen.

[Audio clip begins]

Kara Swisher: Casey, thank you so much for having me back on Pivot.

Casey Newton: Yeah.

Kara Swisher: So tell me, tell us what you did today. You had an astonishing scoop. By the way, you've had amazing scoops all year around social media, including around content moderators on Facebook that were just devastating and beautifully reported. But today, boom.

Casey Newton: Well, thank you. So the story today was somebody shared with me two hours of leaked audio from internal Facebook meetings where Mark Zuckerberg held a Q&A with his employees. They could come up to the mic, ask whatever they wanted. And in them, he makes a variety of newsworthy comments about his plan to sue the government in the event that Elizabeth Warren gets elected and tries to break them up, how they plan on crushing competitors like TikTok, and all sorts of other things.

Kara Swisher: So let's unpack a couple. Go through the main ones. The first one is suing the government.

Casey Newton: Yeah. Someone asks, what are we going to do in the event of an attempt at a breakup? How seriously are we taking this? Zuckerberg says that in the event that Warren wins, he predicts that there will be a case where they try to break up Facebook. And Zuckerberg predicts that they will win. He says that they just have a better case and that if you broke up Facebook, they wouldn't be as good at fighting election interference and all sorts of other things.

Kara Swisher: Because they've been so good so far.

Casey Newton: Yeah, well, his argument is because we are big and because we have so much money, we can actually invest in fighting this stuff. The dig that he takes at Twitter is, he says this is why Twitter isn't as good at fighting election interference. They can't invest as much as we can. The amount of money we've invested in security is larger than the revenue of their whole company.

Kara Swisher: Let me just say in the words of Matthew McConaughey in that fine movie that he did, *How to Lose a Man in 15 Days* or whatever, bullshit. What do you think? You don't have to have an opinion. But it's really an astonishing claim given their poor record even if they've improved the situation.

Casey Newton: I see it from both sides. When Facebook was really small and was limited to college dorms, it was also really good at fighting election interference, because nobody tried because it was small. I think there's a good case to be made for a small size. The more social networks you have, the more communication platforms there are, the more friction there is if you're a bad actor. If you're a Russian agent and you want to swing the election, what if you had 40 places you had to go attack instead of three or four? I think that's a big factor that often gets left out of the size discussion.

Kara Swisher: Agree. I think innovation in small companies, of which Facebook sits over like lard on chicken soup, is the problem. There's not enough of these things to be able to do this. To claim otherwise, that bigness is great, is shocking from a company that's trying to be innovative. It sounds like Microsoft, actually.

Casey Newton: Well, sure. You see this over and over again where there will be some upstart competitor and Facebook takes it apart, figures out how it works, clones it, launches it in some other country, perfects it, and then it takes over the world. We saw it with Instagram stories, and I'm sure we'll see it again.

Kara Swisher: Another part of the story is where he talks about TikTok.

Casey Newton: Somebody says, TikTok is up and coming. What are we going to do about it? Zuckerberg talks through how we built an app called Lasso, and now we're taking it to countries where TikTok isn't already big, and we're going to perfect it there. Then we're going to take it to places where TikTok is big, and we're going to compete with it directly. Really interesting insight into how they handle these threats tactically.

Kara Swisher: I call it shoplifting. Why don't they think of this in the first place? Look, you know I have my teens, Louie and Alex. They don't use Facebook. They use Instagram sometimes. But come up with a product as good. TikTok might be a start.

Casey Newton: Yeah. But you can't because you're too big. They have a division called New Product Experimentation, NPE, I think it's called, and they are trying to do that. They brought in some founders of social companies that had initial success, and they're going to try to create a homegrown success, but they haven't been able to do it at a large scale in a long time. It's very Microsoft-y. It's like, why don't we just open Snapchat and copy whatever they're doing.

Kara Swisher: That's what it feels like. In terms of the tonality of this, that was what I was struck with. I have seen it, and I know it, and I keep telling people. He had just been up on Capitol Hill wearing his suit and tie, visiting President Trump, being super earnest. "Senator, I'm here to really cooperate with you. I'm interested in regulation. I'm interested in this." And he just got off with a great easy fine from the FTC, $5 billion, which should have been 10 times the amount. So why have this attitude? I guess he can't hide it. Underneath the disdain for Washington and any kind of control on their nonstop party in Silicon Valley, they're victimized if they don't do it. That's what I felt, the victimization. Poor little me.

Casey Newton: Yeah, I mean, in the transcript, there are many places where he is deferential to the government, talks about wanting to work with the government. And of course, it's easy to say that because usually government regulation winds up benefiting the entrenched powers. There's actually very good self-interested reasons to want regulation, and I think Zuckerberg wants them. When you're hearing him say, "We're going to go to the mat and fight," part of the job of being a CEO is to be a cheerleader. When the troops are restless, you stand up and you say, "Don't worry about it. We got this. We're putting together a team. We're going to go fight them." I think this is exactly what you would expect somebody in Zuckerberg's position to say.

Kara Swisher: Oh, you're so kind, Casey. That's why you're so good. That's why this piece is so good. It just lays it out there. It's like, let's hear from Mark Zuckerberg, which I think is important. He lets it out sometimes. In interviews with me, by accident, he trips and then you see. But I think it's really fascinating to hear his voice. You really get his point of view that I am familiar with, and I think you are. And I think that's why he shared it on his own Facebook page. They fell a little bit backed into a corner because it sort of looked like he was talking about the government behind its back, so they wanted to get out in front of it.

Casey Newton: Yeah, Zuckerberg posted it on his own page and said, "This conversation wasn't supposed to be public, but now it is. Go take a look."

Kara Swisher: The dog eats itself.

Casey Newton: Yeah, so we do appreciate the link from Zuckerberg there. Thanks, Mark. They want to kind of take ownership back of the narrative. That's actually a smart move on their part.

Kara Swisher: Where does it go from here? What do you think the impact is going to be? Washington's all like, "Ah." The tractors are like, "Ah." And then the tech bros are like, "So what? Big deal."

Casey Newton: Yeah, my mentions have mostly been Elizabeth Warren stans saying, "Yes, queen." But there have also been a lot of Silicon Valley tech people saying, "What a smart and thoughtful leader." Honestly, to me, that just makes me feel good as a reporter. In a case like this, who cares about my opinion? Just read it and think about it and reflect on the size and power of this company and what it means. Watch him talk about it more candidly than he usually does in public. To me, that's the value of it.

[Audio clip ends]

Kara Swisher: So, Scott.

Scott Galloway: Yes.

Kara Swisher: Schmacy, what do you think? What do you think is the most newsworthy item in that story? Or what do you think is most surprising?

Scott Galloway: I think you get a viewpoint of him. I think overall, a lot of this stuff. The Warren thing is not a surprise, of course, but he hasn't said it publicly. So that's interesting, the disdain of Warren. I think the fear of TikTok, which we know they have to have, but he says it, obviously sort of his bluster about them because they're real good. I think it's a very typical meeting that a lot of people are in in Silicon Valley. But at the same time, nobody gets to hear it. He puts on his best big boy pants and tie and comes to Washington and it's all nothing burgers. And this is an actually interesting discussion. That's my takeaway.

Scott Galloway: Yeah, I thought the thing that struck me as someone who has never managed a big company, but I manage small and medium-sized companies, is that people are recording his conversations and then turning it over to Casey Newton. That would send a chill over me every time. I don't know how big or how small these meetings were, but it's reminiscent of everyone deciding to blow a whistle on Mark Zuckerberg.

Kara Swisher: I thought the interesting thing, first off, you're right. The big winner here is Senator Warren. He's kind of identified her as the most likely candidate to win the nomination. The other thing that was sort of interesting was their strategy to take on TikTok. If you look at Lasso, their response to TikTok, which is a direct ripoff, it doesn't look like they've been putting the resources into it that they've put into other products. I was under the impression that they were just going to adopt or shoplift some of the features of TikTok into Instagram and then use their billion users on Insta versus their 500 million on TikTok to try and overwhelm it. I also wonder if in the last month TikTok has lost any momentum. TikTok is really interesting. It's at that point where it's either going to bump up against the Titanic, the big ship, the mother ship that is Facebook, and bounce off of it, or it's going to actually ram it and show that the disruptor can be disrupted. But I didn't find anything that surprised me.

Kara Swisher: Right, but you're an insider, Scott. Here's the thing. I'm an insider. People's obsession with the leaker. Listen to what he's saying. Who cares who leaked on him? There's a million people on these things. It happened to Tim Armstrong many years ago with the pregnant thing. It's happened to Bush. It happened to Romney. This is something everyone's got to realize. They're on all the time. And courtesy of Mark Zuckerberg, everybody's on all the time. Too bad that he gets taped. I don't care. It's a typical insider media obsession. I think it's just that he actually spoke like he actually speaks. He's got to understand that everybody is listening at all times. Maybe he didn't get that lesson. I'm not sure why he didn't. This is a man that covers up his camera. He's got to know people are listening. The tonality is very defensive. It feels like I've been in a Google all-hands like this, and they were even more out there trash talking people.

Scott Galloway: I thought the most interesting part, there's so many interesting parts to this, but the interesting part I thought was the trashing of Twitter. What's the point? That was petty. It was so Gatesian to me, who was his mentor. He seemed very vulnerable for someone who shouldn't be vulnerable in any way. I thought that was what was interesting about it.

Kara Swisher: Yeah, the Twitter comment was sort of telling. I'm convinced that they keep Twitter in business so they can claim they have a competitor that they could crush at any moment. Also, the notion, this kind of national champions argument, that we're the only ones that can solve the problems of our own making, that size matters. They are building. There is an argument that the amount of R&D they're investing, they're making these nation-state-like investments in cybersecurity or whatever you want to call it, election hacking. But there's some pretty simple solutions here. One, if they refuse to take any political advertising and they implemented mandatory identification for people on the platform, which would substantially slow their supernova business model. But there are some, I don't want to call them easy fixes, or if they did what is going to probably happen to them, be broken up. If they're too big to fail, if they're too big to be broken up and their size creates natural monopoly-like benefits, like a power company, a utility, where it makes sense to have one big player as he is arguing, then we regulate those companies. We call them natural monopolies, and we put in regulators, and we say, "Okay, we're going to see everything you do. We're going to make sure that you're not squashing competition. We're going to make sure that you're not enabling bad actors." It's kind of one or the other, boss. Either you're too big to be broken up, or you're the only one. The natural monopoly argument, you need to be regulated, or you're going to be broken up. Common carrier or something like that.

Scott Galloway: We'll be talking a little bit about Trump on Twitter in the next point. But I do think that they were super defensive. One thing that continues to strike me about Facebook is that he never talks about products. He talks about copying other people's products. He talks about fighting back the government. Where's the talk about things they're making? This has always been a company that is not as interested in the product as they should be. That's why they have to use these muscly things. I think if he focused more on product, he'd be better off. His own product that he thinks of himself, not that he copies from other people. This has been an ongoing story at Facebook. He's always scared of something and then they copy it and they're either successful, whether it's a phone, whatever is the hot thing of the day. He's sort of in the "only the paranoid survive" mentality. But I really wish he would just use his creativity and maybe make something fresh and original. That's my disappointment with Facebook. It's just a dull company. I wish they would focus on that. Maybe it's just not this company. It's a copycat. A really good copycat. Walmart did that a lot. A lot of companies do that. They have one good idea and then they copy the rest of their lives.

Scott Galloway: One question I have for you. Does this make Elizabeth Warren more likable because Facebook is so unlikable? Someone on Twitter yesterday was tweeting, "Here's how Mark can stop Elizabeth Warren. Support her."

Kara Swisher: Well, first off, I don't think it's fair to say they're not being innovative around new products. Haven't you gone out and purchased the Portal TV? They now have a product where you can turn your home television into the monitor for Portal TV, and you put a soundbar above it.

Scott Galloway: Someone gave it to me, and I'll put it in the closet and cover it with a blanket.

Kara Swisher: No, not the actual Portal. But anyways, does it make Elizabeth more likable?

Scott Galloway: No, it makes it more formidable. I get asked for predictions a lot around 2020. My current prediction, subject to change, is Warren losing to Trump. I just don't think... She has run the best campaign by far of the Democrats. She has so much momentum right now. She looks like she's going to be the nominee. This sounds awful, and I'll vote for her and I'll canvas for her, but the incredibly impressive older white woman who is substantive and not likable, we've tried that, and it was a disaster. She's kind of Angela Merkel minus the charm. I just think that doesn't work. But she right now has the most momentum. No doubt about it. She's the one that he sort of anointed. One of the brightest people in the world said she's going to be the nominee. If anyone came out of that conversation as a winner, hands down, it was Senator Warren. By the way, she had 12,000 people there at Union Square Park last week.

Kara Swisher: I think you're underestimating her and her likelihood. You might be right.

Scott Galloway: I'm not underestimating her. I think you're overestimating the U.S. public.

Kara Swisher: And the rot in the Trump administration right now. It's pretty ugly. Look at the piece on the... we're not joking about these shootings. Everybody's dropping a dime. I covered this as a reporter. This is going nowhere but down. Everyone is going to drop a dime.

Scott Galloway: Yeah.

Kara Swisher: And he doesn't have control of it. He's got really shitty people around him. They're not like killers. It's not like it's Lee Atwater and company around him. This is like the Dumb and Dumber. It feels like the B League.

Scott Galloway: Yeah. So we'll see.

Kara Swisher: A lot of his stuff is just a mistake. Everything he's doing is... As someone who's watching every episode of *The Apprentice*, this is the moment everybody got tired of him. Everybody got tired of him. I remember that moment and the ratings went down. His ratings are about to dip rather significantly.

Scott Galloway: Well, it'd be interesting. I've always believed it's all about the economy. If we hit, quote unquote, his growth agenda and juicing the marketplace with $2 trillion in debt results in Q1 and Q2 of next year unleashing growth, and there's an argument for it, or if we go into recession.

Kara Swisher: Let me just read a quote from *New York Magazine*. Thank you for mentioning me in that article and Pivot. I appreciate it.

Scott Galloway: Did I not? No, you didn't.

Kara Swisher: No, it's okay. It's all about you, Scott. "CNBC wants to be friends with Jamie Dimon, Masayoshi Son. It's hard to believe that the prom queen is addicted to diet pills and a heroin addict. The fall from grace here has been so dramatic and yet so fucking obvious." That was a great quote. Thanks for that.

Scott Galloway: That was a hell of a quote. Thanks for that.

Kara Swisher: How do you feel about this? Like, it's a distressed asset. That's what you wrote.

Scott Galloway: Yeah. This is so interesting because I don't think in the history of business we've seen a decline this great. We've seen falls this precipitous or happen this fast. 24 days ago, Goldman was estimating this company was going public at $60 to $90 billion. Now it's not only zero. Let's play this out. You're the two guys, Sebastian and the other one. Gunter? Martin? They're great. You're the new co-studios. You have basically six months. They run out of money. They have $2.5 billion in cash. They have to give a half a billion dollars in reserve because of loan covenants. So you've got $2 billion to play with. But you're burning $60 million a week or $700 million a quarter, which means you hit a flaming wall at the end of Q1. SoftBank is the only one that will put money into this. There's nothing worse than losing $12 billion than losing $14 billion. These guys have to come back with such an incredible triage plan that says we're firing 500 people a week. We're closing 40 WeWork offices. We're in negotiations with people everywhere, HR lawyers everywhere, avoiding lawsuits everywhere. They have to come back with a plan to Masayoshi Son to say, "Look, if you put another $1 to $2 billion in, which they will need some additional capital, in two years, if we execute perfectly, this thing might be worth $3 to $5 billion." The cold, hard calculus that begins to emerge for SoftBank and Masayoshi Son, who is the only source of capital at this point and their only life raft, will be, "You know what? We should just rip the Band-Aid off now, declare Chapter 11, and then we can blame it on Adam Neumann." In three months, they're going to own this. The risk-adjusted upside here is going to be much less than the risk-adjusted downside, given all the risks. I think there's a good chance in the next four to eight weeks, we decide, "You know what? It was Adam's fault. We didn't realize it would have gone on here." And they declare bankruptcy through the whole thing. Then they cherry pick out one or 200 offices and restructure the thing, or it might be a prepack.

Scott Galloway: The other interesting question here is on those $700 million of sales, not all of them were sales. Some of them were lines of credit. A lot of them were mortgages on big buildings for Adam Neumann. The really interesting question here is he is absolutely going to have to go into the unicorn protection program. There's going to be such anger towards him.

Kara Swisher: Does he get to keep all the money?

Scott Galloway: It's not clear. That's the correct question. If it was lines of credit and any sort of debt, the question is, was it secured by his stock? At which point the people who are screwed are J.P. Morgan and the people who lent him that money guaranteed by the stock, which is worthless because he'll just say, "OK, boss, here's your stock." If you can't pay them back, what will be really interesting is did he sign personal guarantees? If he signed personal guarantees, there's a chance we might see two bankruptcies here: a corporate bankruptcy and a personal bankruptcy. The terms WeWork, Adam Neumann, and bankruptcy are going to be bandied around more in the next few weeks. But I'm obsessed with this.

Kara Swisher: So do you feel guilty, Scott?

Scott Galloway: Do I feel guilty?

Kara Swisher: Yeah.

Scott Galloway: I feel it's your fault the whole time. I do, but not for this. I have a lot of things in my life I've felt guilty for. WeWork is not one of them.

Kara Swisher: No, the problem is the business. You're right. You're just pointing it out.

Scott Galloway: There's an enormous silver lining here. Adam Neumann, SoftBank, and unfortunately employees are the ones that incurred $50 billion in notional losses. Had the consensual hallucination gone on for another 30 days, then it would have been retail investors that would have lost $50 billion. They would have incurred the downside here. I actually think this is probably the biggest victory for the markets, although it's already queered the IPO class for 2019. Remember our prediction at the beginning of the year that the IPO class would lose more money than it made? We're about to get there. It got off to a strong start. Two-thirds of them have lost money. On a gross basis, the IPO class is probably going to be a net loser by the end of the year. Everyone's saying we're going out later in the year. Airbnb looks at the shit show that is these IPOs and says we're going to do a direct listing. There's so many ramifications. The NYSE and the NASDAQ are going to get hurt. Investment banks are going to lose IPO fees. There's a whole ecosystem of lawyers. The entire IPO has been threatened by this notion. All because of you.

Kara Swisher: Yeah, that's right. You're going to take Trump down. There's a bunch of hounds, but there's only one dog. That's the Grande Pharaoh. Here he is. Look at him. He's just back from the groomer.

Scott Galloway: There is going to be no living with you anymore.

Kara Swisher: Anyway, it's time to take a break. When we get back, we'll talk about wins and fails and our predictions this week. We'll be back after this.

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Kara Swisher: Okay, we're back now. We talked about Facebook. We talked a little bit about your WeWork situation, We Scott. Scott, there's a lot going on this week. What is your first win or fail?

Scott Galloway: Well, first off, Kara, you don't know much about me because you continue not to make the requisite investments in our relationship. But we, the Galloways, got a new puppy. We got a dog.

Kara Swisher: Is that a fail or a win?

Scott Galloway: Well, I don't know. We'll see. That's a big commitment.

Kara Swisher: It is a big commitment.

Scott Galloway: To join our... we have a dog, a 13-year-old Vizsla, a Hungarian Vizsla, who's just been an enormous source of joy for us. We got her about the same time our oldest son was born. I really wanted a steel blue Great Dane. I grew up with a Great Dane. I think they're such gentle giants. I've just dreamt...

Kara Swisher: Great Dane? That's your dog?

Kara Swisher: I want two things. I want two material things in life. I want a steel blue Great Dane and I want a Bombardier Challenger 300 with a Devon 10-seat configuration.

Scott Galloway: To put the steel blue Great Dane on, presumably, because you're not going to ever travel again. If I say to people, hey, let's go to Vegas, like, I'm not going to Vegas with that guy. But if I say, hey, let's go to Vegas, I'm like, Challenger 300. They're like, yeah, I'll go with that guy. He's interesting. So anyways, that's not going to happen. So I kind of defer to the steel blue Great Dane. Totally indulgent, way too big a dog.

Kara Swisher: That's a huge frigging dog. I have like rescue dogs, tiny rescue dogs.

Scott Galloway: Well, okay, so that's the story. So my family, of course, comes home with a rescue dog from Puerto Rico that we think is a dachshund. I'm not sure. It could be a Doberman as far as we know. But I was thinking, Kara, I think it's nice. I was all bummed out at the beginning. Like, the only thing I wanted was a steel blue Great Dane, blah, blah, poor me. But I think it's nice. I was thinking about the fact that I get overridden so much as a function that I have attached to people and that I'm no longer in control of my life. In the short term, it's sometimes frustrating, but it's a good thing that there are people that just have taken away a lot of my decisions, if you will.

Kara Swisher: So you didn't get this dog. You don't have this dog.

Scott Galloway: Oh, no, we have a dog. We have a tiny little – we think it's a dachshund. I don't know what it is. I mean he's a lovely little guy.

Kara Swisher: What's the dog's name?

Scott Galloway: Well, that's the thing. I had a naming contest on Twitter. And everyone – the two biggest names were Newman and Gangster. And so, of course, I loved Gangster. And I did my best job on my 9- and 12-year-olds. I'm like, we're calling it gangster. And they said they thought it was hilarious. And I'm like, no, we want to call it Felix. So, Kara, we settled at Felix.

Kara Swisher: Oh, my God. So, Felix, the rescue dog, is now in the Galloway household. Felix? Felix is a cat, a wonderful, wonderful cat. Oh, that hurts. Oh, you're right. There was a cat named Felix. You should have stuck with gangster. In that one, you should have made up and taken the name. I don't get the Jetta. I don't get the Great Dane. I get the rescue Puerto Rican mutt called Felix.

Scott Galloway: Someday. I'm going to get you a Great Dane someday.

Kara Swisher: I appreciate that.

Scott Galloway: For your dotage.

Kara Swisher: I'm going to get you a great day. And then it's going to make you break a hip, and I'm going to feel slightly bad about that.

Scott Galloway: Yeah, those things get hip dysplasia.

Kara Swisher: I'm going to get hip dysplasia pretty soon. Probably not. The two of you could have bad hips together. I probably wouldn't feel bad. There you go. There you have it. All right. So your win is your dog. Your win is your kid. My win is my dog. I have two fails. Do you have any fails?

Scott Galloway: I have two fails. No, go ahead. Go for it. Right. So the first is I think that in every cohort, if you will, there are laws that we're all subject to. But every cohort kind of has its own code, and that is a certain set of rules that they abide by. And academia, for the most part, like venture capitalists, we don't say critical or we try to avoid saying outright critical things of each other. There's peer review where you actually question each other's research. But as a whole, you don't see a Harvard economist calling a University of Chicago economist an ass or an idiot. VCs, have you noticed, venture capitalists, it's full-body contact competition, but they never – they have kind of this white guy cashmere club, as you would call it, where they don't say never anything negative about each other. World leaders have a code, and that is they don't assassinate each other. They've decided if we start killing each other, it's just generally bad.

Kara Swisher: Well, every now and then, but go ahead.

Scott Galloway: Yeah, but for the most part, we're really fond of this thing called life. So as a general rule, we don't assassinate world leaders. And we also, as a rule, the mob has a rule, and that is they don't go after families. They don't kill families because they're all fond of their families, and they sort of have an unwritten pact that we don't go after families.

Kara Swisher: Yeah.

Scott Galloway: I would be – if I was Donald or Ivanka or what's the other one? The one that's on us all. Eric Trump or Tiffany. I'd be very worried right now because basically what Donald Trump has said is that it's okay to go after kids. And when he enlists foreign governments to kind of go after Hunter Biden and basically accuse him of things that he could end up in jail for and use the office to attack the children. They're not true according to every single report. But go ahead. If they were, well, look, according to Fox, there's real credibility there. So I believe it. Anyway, at some point, there's going to be another president. And at some point, that president's going to have political allies across the geopolitical spectrum. And what if that president decides to go after, you know, Don Jr.? I bet there's a... it just he just doesn't get it. He doesn't realize, look, you don't go after people's kids with these BS accusations and trying to enlist foreign governments to go after people's children.

Kara Swisher: Yeah, he'd never do that because he never does anything like that. Come on. This is like his whole jam is just fucking with society.

Scott Galloway: It is so short-sighted and it shows such a lack of perspective around his own family. It's just – it's a total break of code.

Kara Swisher: He's a toxic narcissist. How else would he do this? He doesn't care about his kids. A tarsicist. A tarsicist. He doesn't care about his kids. And then my other loss is that people – I don't think the media has been focusing around we on what is kind of, in my view, one of the more interesting stories in that it's just 30 days ago. there were 3,000 to 5,000 new millionaires. And that is the employees that had been at WE longer than two or three years probably all had at least a million dollars in equity value based on the valuation they were certain they were going public at. And I've been in these shoes before when I was in my early 30s and Red Envelope was supposed to go public at a $600 to $800 million valuation. It is impossible when you get near the goal line not to start counting your money. It's impossible. I heard from someone from WME this week about that. They're like, I was buying a house.

Kara Swisher: Well, it's impossible. Not buying a house, no.

Scott Galloway: It's impossible for your husband not to be looking at bigger houses. It's impossible not to call your parents and say, hey, let's start looking into that family cruise and reunion we've always wanted. It's impossible to think, wouldn't it be great to get a two-bedroom and think about another kid? And you can imagine 3,000 to 5,000 people have literally gone from, say, $1 to $10 million in wealth they had to zero. And it's like, oh, well, okay, it's easy to be cynical. It couldn't happen to a nicer group of people. But you know what? That's a lot of heartache. And you're about to see a level of animosity unleashed. Think about this. I'm a nice person. I work hard. I make $130,000 as a VP of operations at this cool company called We, which after taxes, isn't a lot of money, barely enough money to think about a kid living in Hoboken or Brooklyn. And all of a sudden, Oh, but wait, I have $3 million in WE and I've worked my ass off for the last three years and listened to all this Jesus talk, but it's finally paying off. I'm finally going to have a nest egg here. Oh, wait, am I going to have health insurance? I mean, that's the question now. Am I going to have to apply for COBRA to have health insurance? So there's, I think, the real toll here. Everyone's talking about SoftBank. Who gives a fuck? They're going to be fine.

Kara Swisher: Yeah, I don't care if they have this money.

Scott Galloway: It's the real tragedy here. If there is a tragedy is the employees of WEI who are really, I would imagine, really feeling hurt right now.

Kara Swisher: You have ruined the Brooklyn real estate market single-handedly. Single-handedly. Do you think? I feel great because I can buy there now. But here's the deal. It's not just them. It's also like I've heard from people at William Morris and some of the other companies that have seen real declines. We never talked about WME. We never talked about that. It's a collection of great assets that aren't profitable. So I always thought, how does this thing get out?

Scott Galloway: Yeah, it didn't. That's kind of Hollywood adventures in private equity and rolling up. It'll be interesting to see. There's actually a clause in there, if I read the S1 correctly, that their core asset, which is the UFC, the cage fighting, is if they didn't get it public, it reverts back to KKR, I think. And that's kind of the crown jewel. So it's going to be very interesting what happens there over the next several months.

Kara Swisher: Yeah, they've got to pay the agents more. There's got to be a lot more investment just like with the way these agents can go anywhere. I think they're nervous. And by the way, this is not a group of people that likes to – we'll just tuck their tails in and be sad at a coffee shop in Brooklyn that they didn't get to have the house they wanted, the apartment they wanted. This is a group of people who are super aggressive that don't like this. And smart. And by the way, very talented, full disclosure, I'm represented by WME.

Scott Galloway: If you are wondering why on earth a guy like me has representation, trust your instincts. But it kind of it makes sense They represent Oprah Adele and a dog.

Kara Swisher: And a dog.

Scott Galloway: A dog I had meetings with them.

Kara Swisher: There you go. WME I had meetings with them. I'm not represented by anybody. I've had meetings with all of them. I don't want to be represented by anybody.

Scott Galloway: Oh, you have scary representation, and her name is Kara Swisher. That's right.

Kara Swisher: I just feel like every time I'm in these meetings, I'm like, I'm smarter than you. Like, I don't know.

Scott Galloway: That's dangerous. That thought is dangerous, by the way. They pet you, don't they? They bring you special drinks and stuff like that.

Kara Swisher: They're actually super smart people. I know they are, but I don't care. and, you know, and they see you. I like the WNN people. I do. It's just, I don't care. You know what they do? You know what they do that's interesting? And this is what's interesting about representation of any sort. It's easier for other people to fight for you than you sometimes. It's easier for them to have interesting or difficult conversations. And also a really good fiduciary or evangelist for you, whether it's a mentor, whether it's an agent, they can see you in a different light. And that is not even necessarily a better light, but they see you in a different light. And the reality is... I don't like people fighting for me.

Scott Galloway: Oh, Kara, everyone needs people fighting for them.

Kara Swisher: I'm like the Irishman. Everybody needs people fighting for them.

Scott Galloway: I want to see that movie so badly. Everybody needs someone fighting for them.

Kara Swisher: All right. Okay. So you say. Not Kara Swisher. In any case, my fail of the week, I wrote a column in the New York Times about Mr. Trump on Twitter. Now, interestingly, I didn't say for them to kick them off, but everybody took it that way, which was fascinating. I just suggested that he's a dangerous—

Scott Galloway: Your article is getting a lot of pushback. It is. It's not just pushback. You wrote that summarized for the people out there. I'm going to represent you. I'm going to pretend I'm Erica who fights for you every day. Tell us about that article. Tell us about that seminal piece that's created all this stir.

Kara Swisher: I was just making the point that he's continually violating it. And this one that he did sort of halfway with the pastor, you know, using his talking about civil wars, was dangerous. And, like, think about it. Think about what you're allowing your platform to be used for. And then last night he did it that it's a coup, a regular impeachment inquiry, which is completely normal. It's not completely normal, but it's not out of bounds of this country. It's done in the correct process, just like the whistleblower has been doing things the correct way. He's saying words like coup on Twitter. The president is – I'm just saying this is – we're in a different zone and maybe you should – maybe we should think hard about what this means. And everybody came in. There wasn't a lot. There was also support of it. It's really interesting. Kamala Harris, for example, was like, kick him off Twitter. But other people had good ideas. Maybe limit his likes. Maybe not limit retweets. Maybe do something to indicate that this kind of language, like the president of the United States, saying something's a coup that is dangerous. And you can just look at any of the rules of Twitter that he's done. And I'm not saying it's an easy situation. And I wrote they'd be daunted by the incredible responsibility. And so I just want people to think about what is happening here because essentially it's been hijacked by those who want to take, as I said, advantage of its porous and sloppy rules and poorly enforced rules. And so it's just an interesting situation. And it's scary. And I wanted to point it out. And then everyone's got on their high horse whether they're like, First Amendment, which I'm like, it doesn't apply to Twitter. Like I just – I have to sit there and explain people what the First Amendment is, which is exhausting. And then free speech. And I'm like, eh, not so much. It's not really a thing actually. And then you have others that say knock them off at Twitter. I just want to hear all the things. I was just trying to cause a ruckus, which I think I did.

Scott Galloway: So you right now remind me of Toronto, Denver, and Columbus, Ohio when they submitted their RFP or their proposal to be the HQ2 of Amazon. And it's just so adorable that you think that you have any chance this is going to happen.

Kara Swisher: Oh, I don't think it's going to happen. Oh, I do not think it's going to happen.

Scott Galloway: All you need is a stock chart of Twitter from the IPO to Donald Trump's election. It basically gets cut in half. And since the day he was elected, it's doubled in value.

Kara Swisher: Yeah, but look what happened when I started suggesting regulation four years ago.

Scott Galloway: Donald Trump has given Jack Dorsey a half a billion dollars. Every employee at Twitter is going to go into that voting booth.

Kara Swisher: I want them to feel bad. And they're going to pull Trump. No, I'm going to tell you I want them to feel bad. I want them to feel terrible. I want them to feel awful about what's happening on that thing. And that's my job. I'm just going to point it out. I am so addicted to Twitter. You're not addicted to Twitter?

Scott Galloway: I am a little bit, but that's okay. I hate myself for it. I'm addicted to it. If it went away tomorrow, I'd be fine. Like, I don't care. Like, I like it. You know, it's like I liked a lot of things. And so I think that they – I think it's just an interesting thing just to – you're like hypercynical. I think there are – once you start – like, we work.

Kara Swisher: Hypercynical? You suggested the math issues. I have people fighting for me, Kara. No, I'm just saying. I have representatives. You suggested WeWork's math was off, and look what happened. I suggested a couple years ago that maybe tech responsibility is something we should think about and continue to bang on that drum and look where we are. I think we do have impact stuff.

Scott Galloway: We're fucking nowhere.

Kara Swisher: Yeah, look where we are. No, you're wrong. Bang louder. You're wrong. Bang louder. You need representatives banging with you.

Scott Galloway: No. We need champions. Where's Erica? Stop trying to get me an agent. Oh, God. Why would I pay him 15% of my creativity? I'll be your agent. I would love to represent you. Unless I have to, like a lawyer. Unless I have to, I'm not hiring. That's scary. I hire smart people who work with me. That's what I do. That's not to say. I don't have smart people. Anyway, we're not going to argue about this. You need people to pet you up and down all day. That's what you need.

Kara Swisher: Yeah, that's exactly what I need at this point.

Scott Galloway: You need a Great Dane is what you need. Now, predictions. Predictions.

Kara Swisher: Wouldn't that be awesome? Okay, so I'm the one trick pony here. In the next 60 days, we have a bankruptcy at We. Okay. So 60 days, bankruptcy. All right. And then what is the next Jesus founder that's going to be ousted? You know, that's a really—I read that in the script. I don't know. I haven't—I mean, I've been so focused on this is—you know, right now there really is only one Jesus, and he's in, you know, the Unicorn Protection Program. We haven't seen or heard much from him. You know these people better than I do. Is there anyone that kind of is guilty? I call it the yoga babble index. Is there any company or individual who you think is kind of off the Richter scale in terms of their level of ratio of bullshit? You know what? Companies used to have numbers and then narratives. So someone accused Mark Benioff of this yoga babble and talking about society. But when you deliver the numbers first. He delivers the numbers, yeah. You have the right to engage in some yoga babble. And it's actually a good thing. It's numbers then narrative. And what a lot of young CEOs in the unicorn era have flipped is they think they can skip the numbers part and move right to the narrative around improving the world. But do you see that ratio of yoga babble to bullshit? What company are you looking at now? Yoga babble or not? Which one are you like, mm-mm, no, no, no. What's your – So the company I would love to see numbers on is Palantir.

Scott Galloway: Yeah, that's interesting.

Kara Swisher: I would be very curious to see what that looks like, and I'd love to see the S1 on that.

Scott Galloway: We will. We will. WME didn't get out. I didn't think that was Yoga Babble. I thought that was just a collection of assets. They were trying to pull a WPP where they smooth out a bunch of great assets, but the problem was WPP was very profitable and WME wasn't. I just couldn't figure that out. Peloton is probably going to get pelted. It's a great company. It's wildly overvalued. But I don't see – I'm trying to think if there's another company that's engaging in this sort of Yoga Babble. And I don't. I haven't identified it. I haven't seen the next one.

Kara Swisher: And also, I want to... Well, Uber. You've been whacking at Uber.

Scott Galloway: Well, that's old news. That thing's off 50% to 80% in the next 24 months because they've got to maintain the growth story. Who is going to play? Ronnie Mola from Rico asked on Twitter who will play Adam Neumann in the movie. And one of our producers, Eric Johnson, said it should be Adam Driver who plays Kyler.

Kara Swisher: That's perfect, isn't it? That's perfect. You like that? That's perfect. I like it. Although, I'm absolutely lobbing or throwing my hat in. I want to play Rebecca Neumann. Don't you think I'd be an awesome Rebecca Neumann? And seriously, look at me. Imagine me with black hair and like a dress. By the way, I have more legs than a bucket of chicken as a woman. I have perfect legs for a woman. Anyways, and I just want to be in this scene where she meets with people for five minutes and says, I don't like your energy. You're fired.

Scott Galloway: I like that. Oh, my God. I don't know if that's mythology. You do that already. I think you do that already.

Kara Swisher: I got to do an investigative look into Scott Galloway's company. I'm going to talk to your employees and see what they have to say. Chipotle, after hours, a little Cialis. That's about it. That's about it. Who's going to play you in the movie? Who's going to play Scott Galloway in the movie? If you could pick and it's not Scott Galloway.

Scott Galloway: Bruce Dern. We're bringing back Bruce Dern.

Kara Swisher: You don't know Bruce Dern? Oh, my God. Of course I do. That's perfect. Coming home.

Scott Galloway: Yeah, I know. Everyone says that. Or either him or we're bringing back underrated tennis star Ivan Lendl. Either Ivan Lendl or Bruce Dern. The big dog story.

Kara Swisher: Ivan Lendl?

Scott Galloway: Yeah. And by the way, not that I'm obsessed with.

Kara Swisher: The tennis player? Remember him? Yes.

Scott Galloway: Let's get creative. You need a representative to be creative. See me in a different light. That's right.

Kara Swisher: Oh, my God. What do you work for? Ari Emanuel? He calls me now and again, you know.

Scott Galloway: Does he?

Kara Swisher: He's a funny guy. I'm thinking of bringing him back to code this year because he was so crazy when he was there. But I think maybe not so much he's going to want to talk right this year.

Scott Galloway: I like the idea of the two of you next to each other. That's definitely a chocolate and peanut butter.

Kara Swisher: Oh, you'll be on the stage for that one. Oh, yeah. That's right. Because he's scary. He'll scare the shit out of you. He'll promise that. So, Kara Swisher, what are you up to? We're talking about code. Code's like seven months off, and you're already pimping it. I'm already pimping it. I'm working on that. I'm going to have a baby soon.

Scott Galloway: That is crazy. I just think that's crazy.

Kara Swisher: I'm doing tons and tons of interviews. We got a live pivot in New York in two weeks, I think. We've got a live pivot in San Francisco. It's pretty much Scott Galloway and the baby. That is really my life at this point. It's a sad situation.

Scott Galloway: That makes me feel warm all over when you said that. That was nice. Thank you. Good stuff. And only one of them is whiny, crying, and spits up all the time.

Kara Swisher: There you go. They're both adorable, though. They're both adorable.

Scott Galloway: Yeah, that's exciting. Exciting for you. Exciting for you.

Kara Swisher: That's what you tell the dog and Scott Kelly. Sit. All right. Enough of us. I'm sick of us, and I love us. All right. We've got to peace out here. Wrap it up. Bring it home. I've got to go out and buy canned food from my Civil War 2020 bunker. Anyway, I will talk to you next week. I'm so excited for you and your dog and everything else. And really, you did a great job on WeWork. I kid all much. But really, it's a public service, you pointing that out.

Scott Galloway: Yeah, right. And us amplifying it. It's a public service, Scott Galloway. I salute you. Thank you so much. Thank you, Cara.

Kara Swisher: Today's show was produced by Erica Anderson and Eric Johnson. Thanks also to Rebecca Sananis, Rebecca Castro, Drew Burrows, and Nishat Kirwa. Make sure you subscribe to the show on Apple Podcasts. If you like this week's episode, leave us a review. If you have suggestions for what you want to hear us talk about on the future show, send us an email, pivot at voxmedia.com. We've got to bring back some reader mail soon. Thanks for listening to Pivot from Vox Media. We'll be back next week for another breakdown of all things tech and business. Thank you.