Peloton's Executive Shuffle, Peter Thiel's Meta Exit, and the Future of Fintech with Jeremy Allaire

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Kara Swisher: Hi, everyone. This is Pivot from the Vox Media Podcast Network. I'm Kara Swisher. And I'd like to talk to you about your car's extended warranty. We're doing product placement now.

Scott Galloway: We're doing product placement. Two things, Scott Galloway. Please stop sending me that Adidas boobs tweet. Stop sending it to me or I'll report you to the gazpacho police.

Kara Swisher: Yeah. Would you like some Nazi secret police with your grilled cheese sandwich? This is like, there's so many good memes. I have to say one was the gazpacho police are in cahoots with the Antifa or the Progressives. I forgot who did that one. But George Conway did the "Progressives must be really going crazy for this." Anyway, go ahead.

Scott Galloway: Sorry. Yeah, Adidas was not hacked. That was actually, they intended to do that? I guess. I don't know. Just boobs everywhere. I don't know.

Kara Swisher: Yeah, yeah. I guess they're just showing there's lots of boob types, which women, of course, already know. But thank you for the photo display. I remember meeting with the CEO of Lululemon.

Scott Galloway: Yeah.

Kara Swisher: Really impressive guy who was the CEO of Sephora, Calvin. And he went on for 10 minutes talking about the relationship between fabrics and breasts, and we sat there and just kind of nodded our head for a while. But I guess it's actually, sports bras are quite complicated technology, which I did not know.

Scott Galloway: Oh, yes.

Kara Swisher: Well, I'm wearing one right now, and I'm enjoying it quite a bit. In any case, the joke we were making—

Scott Galloway: You got your right. Welcome to America.

Kara Swisher: The joke we were making was about Marjorie Taylor Greene calling Gestapo. I think that's what she was going for, gazpacho. Everyone's having a good time on Twitter with it because she's an idiot. That said, she's dangerous. She's still dangerous, as dumb as she might be. And all these malaprops, Trump makes them all the time. It didn't matter. In any case, she's—

Scott Galloway: No, Nancy Pelosi asking people to stop stock trading and everything. It's very reminiscent of people— The gazpacho.

Kara Swisher: Exactly. It's not a false analogy. There's a lot of historical parallels there. It's truly not a lot of times that you can make a Nazi joke. I'll tell you that. But she manages to allow us to. In any case, that is an interesting story, the Congress doing that. We talked about that yesterday, which is interesting. Who predicted that? I think someone listened to us.

Scott Galloway: Well, you thought Pelosi wouldn't do it because she was against it. But then she said, "I'm going to go with the constituency." And you know what? She's leaving. So she can make money afterwards. She'll make a lot of money. They've already made it.

Kara Swisher: I would love to, quite frankly. I like the speaker. I love her fashion more than anything. I think that's very important.

Scott Galloway: Yeah.

Kara Swisher: Especially for the third in line to the president, she needs to look good and she looks better than— we haven't had some great dressed speakers, which is, I think, really upsetting.

Scott Galloway: She does. But she's— I would like to see her husband's trades. I think it's just insane that these people— Senator Burr, what's gone on here. I just can't get over the facts. I know him pretty well. He doesn't strike me as a cheater, but you're right.

Kara Swisher: Well, that's the thing. They're not cheating. That's the problem.

Scott Galloway: Right, yeah. They're not cheating any more than Elon is moving to Texas. That seems like— I know, but it seems as if he did that, that would put him in the target zone. I don't know. Who knows? But nonetheless, I think you were correct in that. You can't even help yourself in some ways. You know stuff and you know stuff, right? And you talk at home. You think you're just being smart.

Kara Swisher: Yeah.

Scott Galloway: You find out a pandemic is about to break out the next day and you think, "Well, maybe I'll just sell a few things." Or you find out, "Oh, we're about to commit a billion dollars to Moderna. Maybe I'll buy a few shares for my grandkids, my great, great, great, great grandkids because I'm 140 years old and refused to leave."

Kara Swisher: Yeah. It's a different kind of insider trading. It's a weird, sort of plain sight one. But in any case, it's probably the right thing to do. But then again, who's going to run for office, right? Only rich people or maybe not rich people. It's really— I don't know. I'm just saying.

Scott Galloway: This is the reality. And that is unless you have insider information, there's probably no good reason according to most of the finance academics to stock pick. You're supposed to put your money in low-cost ETFs. There's a lot of studies showing that stock picking doesn't work.

Kara Swisher: Yeah, for most people.

Scott Galloway: For them to say they want to engage in capitalism is just saying, "No, they want to engage in insider trading." Because if they were to put their money in a blind trust or put it in low-cost ETFs with trading windows, that research shows they're not going to do any worse than the rest of us. So unless you're on to something, this is— if they can't pass this, they literally can't pass anything. They can't pass anything. And what I'm dying to see is if that one bullshit piece of legislation goes through that your penalty is confiscation of your salary.

Kara Swisher: I'm telling you.

Scott Galloway: I'm running for Senator Dog 2022. I'm going to give all six years up, and I'm going to go to Washington with the sole purpose of starting a hedge fund, and I'm going to be transparent about it based on insider information.

Kara Swisher: Well, I'll enjoy that. Well, I'll enjoy you here in Washington. We'll hang out all the time.

Scott Galloway: I'm going to set up meetings with Lina Khan to find out about FTC actions coming up, Jerome Powell to get his view on interest rates, head of the Department of Defense. I told you, go watch that Eddie Murphy movie. I'd be awful, but I wouldn't be any more awful than anyone that's going on.

Kara Swisher: You need to serve the people. You need to have more civic feeling, integrity.

Scott Galloway: I'm very civic-minded.

Kara Swisher: Yes, you are. Okay, today we'll talk about Peter Thiel stepping down from Facebook's board, Peloton shuffling at C-Suite. We'll speak with Jeremy Allaire, CEO of the fintech company Circle, about what 2022 will bring for the world of cryptocurrency. Circle. Circle. Circle. Circle. That's it. He used to have a video company, if you remember. I'm totally blanking on his video company, but I yelled at him once for a full hour about his shitty video company. This was back in the day when we were trying to get video up online. It wasn't shitty. It just was early.

[Transition]

Kara Swisher: Anyway, Amazon wants five-star talent and it's ready to pay top dollar. Everybody is sort of upping the ante. The company will raise its max base pay for corporate and tech workers from $160,000 to $350,000. Amazon says more increases will follow for, quote, "most jobs globally." The internal post noted, "This past year has seen a particularly competitive labor market," you think. Late last year, Apple paid out a surprise bonus of up to $180,000 in an attempt to stop software engineers from leaving for big tech competitors. Huge jump, huge amount of money on the bottom line. I guess they weren't paying people enough. And being at Amazon isn't enough. Correct?

Scott Galloway: This is really interesting. If you think about it, wages are under incredible upward pressure right now, especially in the information economy. And the other thing— and I actually, in a weird way, it's sort of related to Thiel leaving Facebook's board— is that these companies, so you have Facebook whose stock has declined. So anyone who's joined, anyone who still has a lot of shares that haven't vested or have unvested options, your equity compensation at Facebook or Amazon at a mid-level to executive level, the majority of it, at least psychologically, is from the expected value of the increase in your equity award. So there's a lot of people, probably several thousand people at Amazon or Facebook, that have several million dollars in equity value that has vested. So they think, "Okay, I'd like to go to this cool little startup, but every month I continue to stay here, I make another $40,000, $60,000, $100,000, $200,000 in additional equity value." Then all of a sudden, Facebook throws up on their earnings, and it goes from being worth $3 million to $400,000, or it goes from being worth $400,000 to zero. So all of a sudden, people start returning the calls of headhunters. Typically what happens in a mature company is the compensation shifts from equity compensation to current compensation because a company, even like Amazon and Google that are doing really well, their stocks don't double.

Kara Swisher: Yeah.

Scott Galloway: Well, their stocks don't double from here. So if they go to a smaller startup that's doing really well, it's very conceivable that the equity value of their options could quintuple in the next three to four years. So it just becomes a different dynamic. The other thing I find fascinating about Amazon, and I do think Amazon is the most visionary company and forward-thinking company of the last century, arguably. Look at what they did in the beginning, Kara. They kind of— no one has zigged when everyone else has zagged in terms of investments like Amazon. Amazon said, "Let's take our biggest expenses. Let's look at fulfillment. And let's not only overinvest in it, but we're going to so massively overinvest in it because we have access to cheap capital that we'll be able to rent it out to other people." I was in e-commerce in the 90s and every e-commerce player did the same thing. We'd all go to the Kentucky-Ohio border and ask somebody, "Can you get our shit there within seven days for four bucks a box or three bucks?" It was lowest common denominator. It was terrible service. They went the exact opposite way and overinvested. Then they overinvested in processing power. Then they overinvested in media. And now I'm not sure. I'd be curious to get your thoughts here. But I think Amazon says as we move towards more software and services away from manufacturing, which is more about inventory, more about warehouses, and you're moving bits instead of moving atoms, I think they've said, "We're going to make a staggering overinvestment in human capital." I think they've said, "We have the cheap capital. Let's become like Netflix." As usual with a company, it's not Jeff Bezos here, but the people who he trained, they have an opportunity to get people and they'll do it.

Kara Swisher: They've always spent. Look, this is a company that's always spent for whatever their need is and has relied on Wall Street to let them do it. And in this case, unless it's— look, Facebook is reeling, their stock is still strong. They've got the opportunity to do this. So why not? I just feel that this is sort of in there and they need the people. This is a company that needs lots of people. They need everybody working for them. I think they're still going to face enormous challenges with unions, et cetera. The bigger they are, the harder they'll fall in that regard. So they've got to at least be having people questioning whether they need to be part of a union, right? Like, "Well, they're kind of nice to me. What do I need this for?"

Scott Galloway: Well, the unions are losing it. So far.

Kara Swisher: So far. It doesn't mean they're going to. They lost a big one?

Scott Galloway: Yeah, they're coming back. That's not true. There's all kinds of activity.

Kara Swisher: So I think that they're going to have to, not just the competitive labor market, but the union challenges and the ability of this, as we talked about, this reassessment of people to move anywhere they want right now. So they want to lock this kind of thing in. I think it's just smart. It's smart on their part. It doesn't cost them that much. They look good. It helps in all kinds of ways. And they don't look like they're sort of living off the backs of other people as quite as much, which I think people think about quite a bit. Every time someone delivers, I'm like, "What does that person make?" And I don't, of course, do anything about it, but it still is in your mind about this company, how they treat their workers.

Scott Galloway: I'm bullish on Amazon.

Kara Swisher: I am too. I am too. I think they make the moves. Do you realize last year, in the last 12 months, they've hired more people than the population of Miami?

Scott Galloway: Yeah. Amazon hires more kids out of my class. 10% of my class will go to Amazon. I teach 280 kids. 30 will go to Seattle. And it's just hilarious. They come into my office hours. They never want to talk about strategy or brand strategy. They always want to talk about their job offers. And they'll say, "I've got a job offer from McKinsey or Goldman or Sunbank. Or I've got an offer from Amazon." I'm like, "Stop wasting my fucking time. You got plaid, Pearl Jam, and bad coffee in your future. Everyone goes to Amazon." Young people are insecure. So they always go to the brand. And Amazon right now has the best brand in terms of an employer.

Kara Swisher: Yeah, I think that. And they all— Amazon must get, I bet they get a 90% yield on their job offers. Maybe. I bet almost everybody they make an offer to comes there. But who's going to struggle here? Who's really got to think about this? Is Facebook with their stock decline?

Scott Galloway: Yeah.

Kara Swisher: Because all of a sudden the perceived compensation of their employees has gone down a lot. Everybody. And it depends on where you want to live. But Apple stock is not down.

Scott Galloway: No, I get it, but it's where you want to live. Apple stock is off 5% from the high. Apple is kind of an interesting place to live. Anyway, we'll see what happens there. But it's a smart move on their part.

[Transition]

Kara Swisher: Tesla has been subpoenaed by the SEC over something Elon Musk tweeted again.

Scott Galloway: Oh, hate to see it, Kara. Don't go on. Hate to see it.

Kara Swisher: All right. All right. Hate to see it. Elon polled his Twitter followers asking whether he should sell 10% of his shares. Regulators want to know if Tesla complied with the settlement agreement from 2019 that said Elon's tweets about the business would be vetted by a company lawyer. I think they're just testing the enforcement here, picking this particular one.

Scott Galloway: They're not testing it, Kara. They're ignoring it.

Kara Swisher: No.

Scott Galloway: He's waving his fat middle finger in the face of the most noble organization in the world, the U.S. government. What does he call it? He has a name for it. He has a funny name for the Securities and Exchange Commission.

Kara Swisher: You know, this was a settlement that came after he tweeted that he was taking Tesla private. You mean market manipulation? They're testing if he's— it's like sort of the consent decree, if they're doing what they said. So we'll see. It was an odd tweet for sure. I was like, "Oh, no, the SEC's got to react." It takes them a while, though, I'll tell you that. I don't know if anything will happen, honestly. He knows.

Scott Galloway: I'm not sure either, because let's be honest, billionaires play by different rules. Or he does, and he just dares them to do something.

Kara Swisher: Dares them to do something is sort of his brand, speaking of brands. Good luck. He'll go out there. And sometimes he loses, like in the pedo trial, and sometimes he didn't lose that one.

Scott Galloway: He didn't lose, he won in the pedo trial.

Kara Swisher: Right, I'm sorry. Sometimes he wins like in the pedo trial and he so far hasn't really lost that much, right? He hasn't really lost anything.

Scott Galloway: Well, for blatant market manipulation, they fine him 0.1% of his net worth.

Kara Swisher: But part of the agreement was— I mean, this is what he tweeted at me that I was an insufferable numbskull when I said, "Okay, this poll is bullshit. You've already filed to sell these shares. You're clearly planning to do it."

Scott Galloway: Yeah.

Kara Swisher: And you're not allowed— I mean, this, again, is the most blatant violation of— when you have a penalty and they say, "All right, you have to do community service or we're sending you to prison," most people do their community service. So he's violating the conditions of his settlement. Guess what? Welcome to Trump tearing up all documents of the U.S. government. Do you really think they're going to get him on it? He just can do it. I don't like these rules. I'm going to blow your stop sign. And there's no repercussions. So I don't know what to say. But what I don't get, I think everybody, and I don't like it, every company I've run, I have a board of directors, and they get in my face about stuff, and they put up guardrails. And you realize that greatness is in the agency of others. You get a good board. He clearly has absolutely no board because someone on the board would call him and say, "Elon, how is this helping you or our shareholders?"

Scott Galloway: What are they going to do? Honestly, I think this shows that if you don't want to run the rules, you don't have to. Like, you don't. Maybe for some people there's repercussions, but not this guy. So there you have it. He's going to— I just don't think anything's going to happen. It's just, he doesn't like the stop signs where they are.

Kara Swisher: There's a stop sign. I don't like it. I blow it all the time. And Amanda's always like, "You just decided this." And I'm like—

Scott Galloway: You run a stop sign.

Kara Swisher: It's not a stop sign. It's a light that I don't like.

Scott Galloway: You're a rebel.

Kara Swisher: I just don't like it. It says you have to take a right. And I'm thinking it's stupid. So I always take a left. And I'm not going to say where it is. Just to— you're going to show a signal when you go the wrong way, regardless of where you're going.

Scott Galloway: No, I don't like it. I don't agree with the government's decision on this light. So I just don't do it. Don't stand too close to your flame. You might get burnt.

Kara Swisher: People do it all the time in little ways. And this guy doesn't like the rule and he thinks it's dumb. So he does what he pleases. So they either have to come down really hard and then he makes them look stupid, which is— it's just, he's going to win. If you break little rules like this, and there are little rules, they really are. It just shows you there's nobody there. Just like with Trump, he ripped up all the things. Trump did one thing after the next. Everyone like, "He can do that?" And he did. And he got away with it. And worse.

Scott Galloway: Sometimes I rip the label off clothing that says, "Do not remove."

Kara Swisher: Oh, well, there you go. That's right. I'm just saying. It's just like, there's no repercussions. And they're just proving that.

[Transition]

Kara Swisher: Speaking of no repercussions, the Canadian protesters are staying in the headlines. There's not as many of them. There's a lot of fact-checking— they're not as big as people think they are. But nonetheless, it's effective. A small group of people can be very effective. Drivers and pickup trucks and cars blockaded the Ambassador Bridge between Detroit and Windsor. I've been on this bridge. Their protests against COVID measures, inspired by the Freedom Convoy, have occupied Ottawa for only two weeks. The Ambassador Bridge is the busiest international crossing in North America. Lots of trade goes across it. 27 percent of all U.S.-Canada trade, which is incredible at one bridge. Let's fix that. It's a privately owned bridge. So, it's just that they're— I think their imagery is not great because I think a lot of Canada is pissed now at them. Now they're just irritating pains in the necks. But it's growing, too. There's groups of people that like to make trouble. And this is how they do it in Canada instead of invading the capital, I guess.

Scott Galloway: Well, actually, it's how they do it in France. I remember coming in from Charles de Gaulle, which I can't stand, which is maybe next to Miami. I walked. I had to walk that one time. A mile.

Kara Swisher: You're right. It's crazy.

Scott Galloway: And then trying to get into town and someone said, "Oh, there was this trucker strike and they'd parked at the exits." It took us literally four hours to get into Paris. And the farmers and the tractors.

Kara Swisher: That happened to me. I walked. I got out of the cab, walked a mile to the airport. I don't find this— I don't have a ton of sympathy. I'm not down with the good truckers in France or in Canada. My view is they should take pictures or just record who the trucks are stopping and go confiscate 10% of them. Problem over. Sorry, boss. Our truck now.

Scott Galloway: I guess.

Kara Swisher: I think this is a form of economic hostage taking. I really think it's—

Scott Galloway: It is a thorny problem for governments. I'll tell you that. How do you do this right without causing a melee?

Kara Swisher: Well, it's striking at the economy when it's— it's striking at the economy when it— just because you can strike at a place that's weakest.

Scott Galloway: Yeah.

Kara Swisher: I mean, there's collective bargaining. I would bet Canada has stronger pro-labor laws than we do. But I'm like, take pictures, show up, confiscate 10% of their trucks. Word will get around. They'll stop. Once you have a little bit of attention, they're high on their own supply here. And it works. And what they're doing, though, of course, is the violence and the Nazi symbolism and just crude behavior. I don't know. I just, I don't think they have to win.

Scott Galloway: There's Nazi symbolism?

Kara Swisher: Yeah, yeah, yeah. Yeah, that's the whole thing. Yeah, they've got all kinds of things.

Scott Galloway: Oh, my God. Who do they think they are? Gazpacho?

Kara Swisher: There's gazpacho. They're drinking a lot of gazpacho up there. Anyway, we'll see. We'll see where it goes. But I think the government has a real authority problem to deal with them. They've got to come down hard and a lot.

[Transition]

Kara Swisher: Anyway, let's go to some listener mail. You've got— you've got—

Scott Galloway: I can't believe I'm going to be a mailman.

Kara Swisher: You've got mail. This week, our listener mail inbox was full of reasons why you're not watching the Olympics. Lots of you said time zones were the issue. One person even said it's because you can't gamble on figure skating. We also heard a lot of opinions like this one from Gabe in California.

Scott Galloway: That's good. Gabe in California. Play the tape from Gabe.

Kara Swisher: [Reading listener mail] "The problem is, how do you watch it? I tried hard during the Summer Olympics to find a good option. The Peacock app is a joke. The curated content is terrible. So it needs innovation desperately. I would love to become obsessed with the Olympics again, but I can't find it anywhere that I watch entertainment. And that's the fundamental problem."

Scott Galloway: That's interesting. That's the fundamental problem. I don't know if that's the case. I think it's that our nation is all split up. We go off to our little streaming things. We used to all be part of a little town and we'd all gather around for the Olympics. And now we have other options. I just— there were no options before. I think it's that we're not a collective anymore as a group of people. We like what we like. We'll watch what we watch. But I haven't used the app, so I don't know. What do you think?

Kara Swisher: Well, I think you're both right in the sense that consumer behavior is really powerful. Remember, only a few Olympics ago, it was sort of two, four, and seven. Not only got a lot of viewership passively, you put on the evening news with Tom Brokaw or whatever, but Channel 4, NBC, was right there and so present for you. Whereas, one, you now have 400 channels and not even 400 channels, but technically your options are 4,000. Twitter. Because everything's streaming and on demand.

Scott Galloway: Yep.

Kara Swisher: And then you have so many other things pulling your attention. And also, to have to get to a channel and run through hoops, the individual is absolutely right. It's not easy. It used to be super easy to watch the Olympics. Now you have to actually think about it and maybe download an app or subscribe. And then you run past something on Netflix or whatever. I think it's— I don't think we're a collective anymore. It's incredible that NBC paid more than $7 billion for the rights. I wonder who'll buy them next, 2032.

Scott Galloway: Time zones, people have— times have been easier.

Kara Swisher: It's probably going to be that Matt Damon back crypto thing. Be bold. Time zones are always the issue. I don't think that's as big a deal. I don't know. And maybe they are, but they haven't seemed to be. I don't recall being like you watch it the next day. But also, that is actually true in terms of you know what happened, right? You can read what happened. And before, you didn't quite know what happened if the newspaper wasn't there. Things have changed. Things have changed, and people don't want to watch them in a big group. And it's a smaller group of people. And there's nothing— there was nothing on, but now there is. So Gabe from California's message came in on our new phone line. You can leave us a voicemail at 855-51-PIVOT, or as always, drop us a line at nymag.com slash pivot. But leave us a voice message. We like our new thing. And leave us nice messages. We like say hi to Scott or, you know, he needs the love.

Scott Galloway: You think? You think?

Kara Swisher: Anyway, it's an interesting topic. I was watching the Olympics for two seconds yesterday. And then I went to Netflix or HBO. I don't even remember. I watched The Gilded Age. That's HBO. It's not very good. I'm watching—

Scott Galloway: Oh, really?

Kara Swisher: I'm watching Euphoria. I'm freaking out about having kids.

Scott Galloway: Oh, yeah. Don't watch that. I don't watch that. My kids watch it, but I don't watch it. By the way, I was just looking up on TV, Kara. You know, in order to get viewership up, the Olympic Committee, and it's happening tonight, has introduced a new sport, a new game. They have pinball. And by the way, I'm betting on that deaf, dumb, and blind kid.

Kara Swisher: That's good. That's good Olympic humor. Oh, my goodness.

[Transition]

Kara Swisher: In any case, let's get on to our first big story. Peter Thiel is leaving the Meta board. He reportedly wants to focus on electing Trump-aligned Republicans in the midterms. Two of his protégés are currently running for the Senate, J.D. Vance in Ohio and Blake Masters in Arizona. I think Blake worked for him. Thiel has donated $10 million to political action committees backing each candidate. He's donated to a candidate challenging Liz Cheney in Wyoming. He was very active in the Trump administration, obviously, and I think a lot of people blame him for Facebook's bear hug or blame or compliment him, depending on who you are. So he's always been sort of a controversial board member. When he sued Gawker, that was a moment where they had to say something about it, saying he's a private citizen doing that. So what do you think about this? I don't know a lot of why he left. Honestly, I haven't really called around or anything like that. Maybe he just was tired of it or whatever. I'm not sure. Very close to Mark Zuckerberg. Very big influence on Mark Zuckerberg, for sure. Made a fortune, both of them together, at Facebook. Was one of the first people who believed in Mark Zuckerberg, for sure. He also had investments in lots of things. Clearview AI. He was an investor in Palantir that had some beefs with Facebook back and forth. He's a really interesting person. And he obviously put a lot of his Meta stock in a Roth IRA, which means that if he cashes out in 2027, he gets the money tax-free, et cetera. So what do you think, Scott? Peter Thiel is quite a character.

Scott Galloway: Yeah, I think this is what it is. I don't know if there's a backstory here, but he's been on the Facebook board over a decade. I think he invested a half a million dollars at a valuation of like $6 million. He's made tens of billions from Facebook. And I think that he's decided if he wants to be really politically active, which he wants to be, he probably shouldn't be on the board of a company that has been very correctly sort of politicized. So this makes sense. And Peter Thiel, I don't agree with his politics, but he strikes me as someone who's very self-actualized. He kind of knows what he wants and he doesn't really care what other people think. He's like, "I'm going to— this is what I think is right. This is what I'm going to do and, you know, have at it." He doesn't strike me as someone who's dancing to his own drum. I've always admired that he strikes me as someone who knows what he wants and doesn't really, you know, it's like, "Okay, I'm here to please me, full stop."

Kara Swisher: That is true. But he's going to get very politically active and he doesn't— he's probably just— what has he not accomplished?

Kara Swisher: But what he does is he joins the list of the most impressive people in America, and that is the most impressive people in America have left the Facebook board. But unlike Peter Thiel, they usually leave after a year when they realize that Mark Zuckerberg is insincere about cleaning up Facebook. I mean, Erskine Bowles, Susan Desmond-Hellman, Ken Chanal, all went on this board, looked around. Don Graham. All went on this board, looked around and said, okay, I can help. I can figure this out. These people always have big egos. I can coach this young man. He probably seems sincere about wanting to do the right thing. And then they go, OK, this guy's full of shit and doesn't care. I'm out of here. I mean, it is these folks have all left so much money on the table to leave. All right, but Thiel wasn't this person. Thiel is a great admirer of Mark Zuckerberg. He's been there. And a very big influence on the stuff that many people think are problematic. You know, he's been a big influence, especially the lean towards Trump.

Scott Galloway: Yeah, but it strikes me that this is what it is. He wants to be very involved. He doesn't need the headache. He's got the money. He's literally Koch brothers light. He's going to be probably the most dominant political force of 2022 with his money. Very strategic, very smart. I mean, he's probably the biggest threat to Representative Cheney right now because he's clearly not. I mean, there were so many. Think about it. Think about the societal norms and pushback and you become a pariah. He's basically a billionaire that got pissed off at a media company and put them out of business. That has a lot of very unusual, uncomfortable notes to it. He doesn't care. He doesn't care. He's like, I can put a media company out of business that wrote things that I didn't like.

Kara Swisher: He definitely has some opinions. He's definitely, you're right, Koch brothers behind the scenes, but sort of in front of the scene. People know he's there. He's not super quiet about where he goes. I think he wants to be the most powerful person on the Republican side, for sure. He also continues to invest. He's in Rumble, which just offered Joe Rogan $100 million to leave Spotify and join its service, which that's exactly what I would do if I was Rumble. He's got a lot of detractors. Josh Marshall at Talking Points Memo tweeted, "Peter Thiel is leaving the Facebook board, says he wants to spend more time with fascism," which was not very nice. But, J.D. Vance is a fucking clown as far as I can tell. I heard he loves gazpacho. He's a shit stirrer is what I would call him. I used to talk to him a little bit more, but I haven't talked to him a long, long, long time. He's a shit stirrer. That's his whole thing, is he wants – he doesn't like the way society is. He rails against elites, even though he's gone to a lot of elite institutions and has sort of moves in those circles. He sort of backs the common man kind of thing, even though he's not a common man. So you're right. It's sort of Koch. He has ideas about this government and what it should be or not be, and it's not quite burn it all down, but it's not, he's not pleased with the way our government is and what it's doing. And he's got ideas about society and liberals and all kinds of things. And it's all over the map, interestingly enough. Has invested all over the place. Sometimes it's worked. Sometimes it hasn't. But certainly that one bet he made on Facebook was a good one.

Scott Galloway: That's all I needed. And it has paid off. I think I'm like most people. I'd like to do edibles with him and Angela Lansbury and just see what happens. See how it plays out. Just see where it goes.

Kara Swisher: Anyway, I think it's probably he may have thought this is enough with Facebook. I don't need this anymore. Done. I've done my work. Capital D, done. I've moved along. And so when Peter Thiel got in, it was like nothing. Back in the day in Max, he's made a fortune. Like he's made a complete fortune.

Scott Galloway: No, he's made the GDP of Colombia. I mean, that's one of the greatest venture investments of all time. But he's done a lot of strange stuff. He's not afraid to fail either. He did a hedge fund for a while.

Kara Swisher: Well, the idea I really wasn't a big fan of was he was giving people $100,000 to drop out of college. And this is from a guy who had undergraduate and graduate degrees from Stanford. And it's like, well, it worked pretty well for you, boss. And then there was some reports about that didn't work out that well for those kids. But he's definitely, you got to give it to him. He's kind of his own dude.

Scott Galloway: He is. I'd love to sit and talk with him again.

Kara Swisher: Okay, Scott, let's go on a quick break. When we come back, Peloton is spinning, and we'll speak with Circle CEO Jeremy Allaire about USD Coin.

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Kara Swisher: Scott, we're back. Peloton CEO is out. So are 2,800 employees. John Foley announced he'll move into the role of executive chairman. I suspect he's not out. He's still around. Barry McCarthy, a former CFO at Spotify, will take over as Peloton CEO, a very well-regarded executive. I know him a little bit because he worked at Spotify. He worked at Netflix, I believe. Meanwhile, the company is laying off 28% of its workforce, or as I said, 2,800 people. Not to worry, they will not – laid off employees will get one free year of Peloton.

Scott Galloway: Oh, wow.

Kara Swisher: In an earnings report, Peloton says it lost almost $440 million last quarter. So what prompted this? This guy didn't have to. He controls a majority of shares. Maybe he said, I'm getting out of the way here. I'm putting in a professional to shake things up. It surged 25% after news of the shakeup, for example. And Amazon and Nike are supposedly looking at it.

Scott Galloway: This surprised me. And I think it probably indicates that things are even worse than we think because for the CEO and insiders control the company here. And I would have thought optically and I think he would have said, look, just give me – let me get out of this and then I'll declare victory and leave. Let me get out of this really ugly part of the company's history. And the fact that they and he decided no you out means it may even be worse than we think in terms of supply chain and operations and overexpansion.

Kara Swisher: So when I saw this, I was shocked because a small group of people control the company.

Scott Galloway: A lot of people were, not just you. Lots of people. And what this says is it is really bad. Either the numbers that they're seeing in the supply chain problems or customer acquisition or churn, whatever it might be. It is really ugly because usually if the company is – what I would have thought on the board, they would say, okay, we need – I would have thought with someone who's the founder, they would want to stabilize things and say, okay, just right the ship, get it stable, and then move. And then you'll announce that you're going to chairman. So to make this change right now under the auspices of an activist and all the shit that's going on, it really says.

Kara Swisher: And all I have, the investors and –

Scott Galloway: He's still executive chairman. He controls the majority of Peloton shares. He's out of the limelight. I don't know. We'll see. The activists want him out of that too.

Kara Swisher: Yeah, the activists have no power here. They'll declare victory. I just – I'm just saying they want him out as executive chairman too. It must be really – Things must be really bad. The numbers that – I don't know. This particular executive, let me read you a comment from someone I asked around. I met him. You always meet the CEO and not the CFO. CFOs are critically important. He's smart. He focuses on the fundamentals. He understands LTV well and knows how to generate it. He's no nonsense, has high standards, is demanding in a rational and reasonable way, but never ducks individual responsibility. He's self-deprecating in a way that I think indicates a pretty healthy relationship with himself. So kind of – this was – I called 10 people. They all love it. He sounds like us if we were nothing like us. In any case, he's got a lot to do. He looks like a whiskey commercial. He's very handsome. He looks like, I drink Ballantine's.

Scott Galloway: He does look like a whiskey guy. I think he's a no-nonsense kind of guy, and he wants to be a CEO, and here he is. So he's got a lot to do with it. Laid-off employees reportedly crashed an online all-hands meeting where the new CEO was introduced and left angry comments, of course. Who knew the death of Mr. Big could cause all this? I can't believe they offer this as part of severance a year of Peloton. Question is, is it a pandemic stock destined to die or not? And that's, I have to say, I think the users love this product. So it's a great product. I love it. We'll see.

Kara Swisher: We'll see. Let's bring in our friend of Pivot. Jeremy Allaire is the co-founder, chairman, and CEO of Circle, the digital payments company behind the USD coin. That's a digital stablecoin pegged to the U.S. dollar. Last year, Circle announced plans to go public via SPAC and perhaps more ambitiously, its intention to become a, quote, full reserve national commercial bank. I've known Jeremy for a long time. I was just joking with him. He had a company called Brightcove that we used. It's an early, early video company that we used on All Things D, and I would call and yell at him all the time because it didn't work. But I apologize now because I realize how difficult it was.

Jeremy Allaire: Apologies accepted.

Kara Swisher: Okay. I remember how stressful that was when you were going live with video at the event. It was like a major new thing.

Jeremy Allaire: Yes, totally. And actually, Walt and I wanted you to build something where we would talk to each other and yell at each other, and we couldn't do it. And now, of course, I have Scott here.

Scott Galloway: In any case, one of the other things is Jeremy was one of the first people. You have built that. You have built that. FYI, you have built that.

Kara Swisher: I know that. I get it. In any case, he was also one of the first people to talk to me about blockchain, him and Wences Casares. were the very first people, as I recall. And he was very, he moved to that very quickly. And we had a conversation in 2017 of what is blockchain and other things. And you just, you just put out, you put it in newspapers or a thing called print and things like that. So can you talk a little bit about what you're, why you did that? Explain what you just did.

Jeremy Allaire: Yeah, absolutely. I mean, so, I mean, there's like this big question that is kind of running around mostly in Washington, but certainly on Wall Street and in other financial capitals, which is, there's sort of this perception that there's now a kind of digital currency space race. China is building the ECNY, it's coming out of the Olympics, and everyone's to some degree is kind of freaking out, saying, where's the U.S. on this? And you've had a kind of a Federal Reserve that's been doing some research, publishing some white papers. And I think the question is sort of how can the United States lead in this space? And our view, and we have a lot of conviction around this, is that the U.S. is actually already winning this so-called digital currency space race because dollar digital currencies that are built on the public internet, that are built on an open model that is reflective of the kind of nature of the internet itself, kind of open, permissionless, interoperable, built on standards. It's a free market competition that builds on that. That has given birth to this extraordinary, very high growth, very dynamic industry. And it's not without risk. There's lots of issues. No one's saying there shouldn't be regulation or anything like that. As you noted, we're sort of, as we say, all roads lead to the Fed. We believe we ought to come under federal government supervision. But I think the argument that we wanted to make, and in some ways we took over like homepages and yes, we put stuff in print in a number of publications and throughout DC is the answer here is not let's start a big government R&D project that's going to take three to five years and itself introduces some pretty dramatic and potentially high risk privacy concerns, market competitive concerns, technology, obsolescence concerns, et cetera, but get behind what's actually winning and embrace a model that is, in fact, what has made the West largely successful in being the leader in technology innovation on the internet. So that's sort of the argument we want to make.

Kara Swisher: So isn't it right? I mean, you're sort of saying like, sort of like Facebook is doing, please regulate us, but you don't regulate us too much. I mean, you revealed last year under investigation by the SEC. We had Gary Gensler on last year talking about this. Isn't it appropriate, especially in financial areas, for the government to do this? You're essentially saying they're going too slow in that they could muck up the works, which was sort of early internet people talked about this. As you know, you were around.

Jeremy Allaire: Yeah, yeah. Well, there's a few things. I mean, like we have, we've sought out regulations since 2013 when I started this. We became the most regulated company in crypto. We begged for licenses. We went after trying to do that because we understood that if you're sitting between the existing financial system and this new crazy world of the open internet of money and blockchains, there's a lot of risk. There's a lot of issues. There's fraud. There's consumer protection. There's money laundering. There's all this stuff. So we've sought that out. And now, as this has gotten really big, I mean, USDC grew 10,000% in the last two years, 1,000% last year. We've issued about 10 billion new in circulation just the last 30 days. It's getting quite large, and it's only going to get bigger. And this is now something where we believe that this ought to sit under kind of a federal supervision model. Like all of this fintech stuff, as you know, has basically been born out of what I call the fintech laboratories of the United States, which are the states. Money transmission, all the payments companies, they're all kind of more lightly regulated at a state level. Our view is that this kind of infrastructure, what we call kind of market infrastructure for dollars on the Internet, is potentially systemically scaled. It's potentially has this enormous reach. So we just think we need to be thoughtful about what those regulations are. It's a square peg, round hole question, right? If you just take the existing payment system and try and apply that to this, you're not going to get all the same benefits that come from an infrastructure like this. So you just need to be thoughtful. And that's in some ways what Treasury has said. Let's have Congress act. Let's define new statutes that are specific to this whole area.

Scott Galloway: Nice to meet you, Jeremy. Thank you. I feel as a crypto is like interest rates and that is we all pretend we sort of understand what's going on or the relationship with the economy. Can you explain what a stable coin is and why the primary points of differentiation? I assume you think there's value versus a typical cryptocurrency. And also, I'd love to just understand Circle's business model.

Jeremy Allaire: Yeah, sure. So, the term stablecoin, I'm not a huge fan of the term, but it is what we have. That's what people are calling these things. And when we refer to USDC, we describe it as a dollar digital currency. We don't say it's a stablecoin, but everyone calls this a stablecoin. But fundamentally, the problem that we set out to solve and or the opportunity that we saw was that if you could take what we think of as traditional money, which is actually basically the liabilities of a central bank or the liabilities of the U.S. treasury, treasury bonds and central bank money, and you could express that in a digital currency form. So essentially give it the characteristics and capabilities of what we think of as a cryptocurrency, which is a digital cash-like instrument that can transact instantly anywhere on the internet. It's open and interoperable like other protocols on the internet. It can move with extremely low cost. So you give it all, you kind of give it these internet superpowers, as I like to call it. You give it those capabilities. But you're backing it by and you're basing it on the fiat currency. And really, for us, that means essentially like cash and short-term U.S. government treasury. So everyone understands, oh, this is like cash. And you give it the characteristics of the internet. And then once you have that, you have an extraordinary ability to use those dollars on the internet. And so that's essentially the problem we set out to solve. Those coins on the internet.

Scott Galloway: So why is that different than a PayPal or Venmo for the regular person?

Jeremy Allaire: Well, this is like, yeah, you'll appreciate this. This is like, what's the difference between internet email or the web and AOL? Yeah. Well, one is based on open interoperable standards. Anyone can connect to it. It's totally open and global and lots of developers can build around it. Another one's a walled garden. And what's the walled garden look like? So it's the walled garden metaphor. And I think the history of like payment systems and digital payment systems is essentially a bunch of walled gardens. But stable coins answer the question of sort of everyone should be able to instantly interact and exchange value, no matter what digital wallet you use, no matter what financial service you use, you should have that same level of reach and interoperability that the internet gives you. And that's what stable coins provide. And we see that in the ad that we took out, we talked about the hundreds of different digital wallets that support USD. You see $2.4 trillion in transactions on the internet last year with it. And this is just the start, right? I think this can ultimately be orders of magnitude larger than the sort of first generation of digital payment systems on the internet.

Scott Galloway: Don't stablecoins sort of bifurcate utility from speculation? And that is, I want the transmissibility. I want the divisibility. I want the open standards of a cryptocurrency. but I don't want to buy and pay in Solano because it could go down 20% in the next 24 hours.

Jeremy Allaire: Totally. Yeah. I mean, we use dollars because they're, relatively speaking, price stable. I mean, the Fed's mandate is to attempt to achieve price stability, right? And right now it's 7% inflation, but more or less, 2%, 3%, 4%. People can then use it as a unit of account. It's useful. People don't buy and sell goods and services using commodities because it's insane. And so you can trade commodities. That's important. And you can speculate on commodities, but you can't really use them as a medium of exchange efficiently.

Scott Galloway: What's the use case, though? Because the use case I keep thinking of is remittance payments across borders where you get rid of the incredibly onerous fees. So it's an incredible tax cut on people sending money home. I think if there's someone who wants out of the Argentinian peso and there's currency controls, circumvent them by. But what is the primary breakdown, the three or four biggest use cases of a stablecoin?

Jeremy Allaire: Yeah, sure. So I jokingly like to say, when people ask what's the use case of USDC, I'm sort of like, what's the use case for a dollar? Well, there's a lot. And so literally it's, you might use it to make a micropayment for a piece of scarce digital intellectual property, a.k.a. an NFT. At one end, at the other end, you might have someone who's using it to bilaterally settle a huge trade for $500 million and everything in between.

Kara Swisher: And not subject to FINRA or Sirificius and all the – if you send money – if you wire money overseas right now, it's like you're trying to get a mortgage. It gets held up. It gets examined. It is really challenging.

Jeremy Allaire: And this is a vexing problem, of course. And digital currency solves a big part of the problem. There's some incremental things that I think still need to be solved. But, yeah, I mean, the concept of just a cross-border payment is kind of insane when you step back and think about it.

Kara Swisher: It is indeed.

Jeremy Allaire: Right? Like, when's the last time you sent a cross-border email or had a cross-border web browsing session? It just doesn't make any sense. And I think we're on the cusp. And people who use digital currency are already living in the future. They're living in a world where, you know what, it doesn't matter. I'm on the internet. I'm a piece of software on my device, and I'm just exchanging value peer-to-peer with anyone else, no intermediary. It's fast. It's cheap. It's secure. It's private. People are living in the future with that, and regulators are catching up. But coming back to your question, what are the use cases? They're evolving really rapidly. So stablecoins were born out of the need for – this is where the name came from – the need for people to get out of an instable price volatile thing like Bitcoin and into a price stable thing like a dollar. And so they were created for what I call the crypto capital markets. They were created to sort of be the liquid dollar that could move at the speed of blockchains, because everyone who was trading was moving at the speed of blockchains, and sit there. That's evolved. So now, interestingly, to the other examples that you've given, we've seen this incredible growth. And it's interesting to see since the start of COVID, you can actually chart the growth of stablecoins. It's been incredible. And there's global demand. And the global demand is from people who want to hold digital dollars in a secure way. And correlating to that has been this extraordinary growth in what's called DeFi. And so USDC, for example, plays a huge role in DeFi. And DeFi provides people with a way to store their dollars securely and then earn interest on them. And so the blockchains have given birth to essentially open interest rate markets. And these are interest rate markets that any individual in the world can participate in. You literally can connect your wallet. You can effectively lend your USDC and earn a passive year.

Scott Galloway: So you're mimicking the world as it was. How do you relate then to, you just mentioned Bitcoin. What analogy would you have them to your excellent AOL example, for example?

Jeremy Allaire: Yeah. Well, I mean, I think, if each of these kind of digital currencies are like open Internet protocols, Bitcoin is a really powerful open Internet protocol. And I think it has very compelling attributes as a secure store of value. And I mean, people say this all the time. It's digital gold, etc. But I think that's quite accurate. So the concept here is simply that from a long perspective, governments around the world are really including the United States are massively in debt, are issuing a lot of money to continually refinance that debt, and are fiscally irresponsible. And that's everywhere. And in some places, it's horrible. And that means that those fiat currencies have a structural problem. So from a long-term perspective, a non-government, non-sovereign, secure, tamper-resistant, scarce, well-defined monetary policy store value is actually quite compelling, but you're not going to use it to buy cookies and milk and pay rent. And so there's this interplay between an open internet of value exchange that's built on the biggest reserve currencies in the world, which we think will be massive and be used massively. And these store value currencies, which are frankly savings instruments more than anything.

Scott Galloway: So gold is the thing you're using. And I think gold's the wrong analogy because I think gold is such a relic and it has no utility. I mean, jewelry is interesting, but it doesn't have actual utility in the same way that Bitcoin. And Bitcoin brings the monetary effectiveness of gold, but to a digital asset that can actually move at the speed of the internet.

Kara Swisher: You can't carry gold around, is your point.

Scott Galloway: You can't carry gold around. I just want to jump in here because right before you got to the interesting stuff, Kara interrupted you. And I want to assure you that she never does that. She never does that. I've never seen Kara interrupt anyone.

Kara Swisher: Oh, my God.

Scott Galloway: But you were about to get to what the yield is on your USDC. What is potentially the yield you can get? And answer a fundamental question I've always had and I don't understand. How can that yield be so much greater than the yield a bank gives you on cash stored in a certificate of deposit?

Scott Galloway: Yeah. So the best way to think about this is, there are capital markets. Banks participate in capital markets. They give out a bunch of loans, package that loan up, and sell it to a capital market. Then hedge funds or whoever else buy up those loans. The banks might be making 4%, 5%, 6%, 7% on those loans, and they make a spread of like 3%. That's the model. When you put money in a checking account, they're not really paying you anything. That's a source of deposits for them that they then use to create money, loan it out, and have that loan book on the other side.

What's happened with digital currencies like this is the developers have basically built protocols that are themselves borrowing and lending markets. The market to borrow and lend is a piece of software on the public internet. It's a public protocol, not a company. Anyone that wants to borrow and lend from each other does that through the protocol itself, running on a virtual machine and a smart contract on one of these networks. That's what makes them decentralized.

Individuals, households, or firms can take their stable coins or other digital assets and lend them to the protocol. People on the other side borrow it. The well-known protocols are like Aave and Compound. They've essentially created capital markets in software on the internet. All the risk management, collateralization, and liquidation is open and transparent because it's all open source. Everything happening in that market is real-time auditable because it's on a blockchain. Everyone can see the risk.

First of all, it's an extraordinary innovation and breakthrough. But secondly, the borrowers of capital are willing to pay a high interest rate. If the borrowers are willing to pay 6% for dollars on these markets, the protocol generates income, and people who participate generate a piece of the fee. That piece is then passed along to the lender. That's basically it.

Kara Swisher: You don't have a bank as an intermediary. Yeah, you just kill the bank.

Scott Galloway: Yeah. It's like self-driving banks is the concept you're going to talk about. It's scary, actually.

Kara Swisher: Yeah, it is. Don't use that one. I would not use that one. So I have one last question. There was a lot of friction between your sector and U.S. regulators with Federal Reserve Chairman Jerome Powell, Treasury Secretary Janet Yellen, SEC Chair Gary Gensler. Gensler called it the Wild West in his testimony. You said it's critical. Let me read you a quote: "I think it would be great if there was a clear set of rules in the banking system in the United States around crypto asset lending that doesn't really exist. We see it as a really important product here with a lot of growth." So what is the one thing you need the government to do right now to make it not the Wild West?

Jeremy Allaire: The thing I'm focused on is very aligned with what the U.S. Treasury Department is proposing. There was testimony to Congress last week from Undersecretary Nellie Lang, and she's going to the Senate next week. There are people in Congress working on legislation. We'll see if Congress can do something, but they're working on legislation to say: if you are a dollar stablecoin issuer, here's what you have to do. You have to have the following reserve requirements, liquidity requirements, audit requirements, money laundering requirements, controls, et cetera. We're going to define a charter for that. You've got to register with the U.S. Treasury Department. You're going to be supervised by the U.S. Treasury Department, and in some cases supervised by the Fed as well, depending on the full scope of your activity. That's what's needed. That's basically what the White House has said they'd like to see.

It's devil in the detail stuff. There are things that could go too far or too little. But that's the essence. The other thing is we need definitions so that accountants know what these are. They can treat them like cash and cash equivalents so that corporations, financial institutions, and households know they're dealing in dollars. Right now it's amorphous. You need definitions and U.S. Treasury supervision. You need to do that on a national level.

Kara Swisher: Which they have not done. All right, Scott, last question. Quickly, business model and how do you establish any sort of sustainable advantage as a USDC or a stablecoin?

Jeremy Allaire: On the business model, we operate a couple of key businesses. The first is our stablecoin market infrastructure. That's a mouthful for what we do with USDC, but we have ambitions to do other currencies beyond the dollar. We operate that, scale it, support it, support the whole ecosystem that builds on it. We monetize it through the reserves. The reserves are growing. There's $52 billion in circulation. There's an interest rate environment. We monetize through those reserves. That's one big piece. It's quite significant given the interest rate environment and how fast this is growing.

Similar to a traditional bank, you have money, you're a custodian, you loan it out at a higher interest rate. We don't loan it out. We are full reserve.

Kara Swisher: You facilitate. They facilitate the loan.

Jeremy Allaire: Yeah. And that's the second piece. Once people are living in digital currency instead of legacy dollars and the legacy banking system, we provide a whole suite of accounts for businesses that want to transact in this, use it in their payment systems, integrate it into their own applications. We provide ways for people to lend it and borrow it. That's purely in the digital currency itself, not in the legacy bank system. We're conducting new commercial finance activities on top of blockchains using the digital currency itself. We call it our transaction services and our treasury services. It looks a little bit like a commercial bank. That's a second piece that we monetize and is growing fairly quickly.

In terms of competitive advantage, I come at this from the angle of internet platforms and technology platforms. I look at this as building an open platform for dollars and money on the internet. It's about developer adoption, scaling the ecosystem that uses this, making it as widely accessible as possible. It's a network effects business. The more people who plug into the protocol, the more utility it has, the more demand there is to use it. The more people who have the format, it's like, why did MP3 win? Because everyone put it in devices and it worked. The more people who have the format and hold it, the more utility value it has. It has really strong network effects. That is the core. It's like an internet platform. Developers, applications, integrations, distribution. That's how we maintain the competitive advantage we have right now.

Kara Swisher: All right. Jeremy, sounds exciting. You're going to help me find my Bitcoin someday? I did buy some back then when you told me to. You're one of the two people that told me to buy. I lost it, Jeremy. I don't know where it is.

Jeremy Allaire: No, no, no. You're not like that guy who's in the dumpster in England.

Kara Swisher: I'm that guy. I don't have 500. I think I bought 10 on your advice and the advice of Wenceslas Casares. I don't have it, Jeremy. We could have a pretty good time in Vegas with that jungle dog.

Jeremy Allaire: We could. We could.

Kara Swisher: But again, Jeremy was one of the earliest persons who told us. And I apologize for yelling at that video, but it didn't work. In any case, Jeremy, thank you. Good luck. This is a really important issue. It's critical instead of figuring out how these financial instruments are going to work for regular people and throughout our economy. It's very exciting. It's still a very exciting arena. Thank you, Jeremy. I really appreciate it.

Jeremy Allaire: Thanks, Kara. Thanks, Scott.

Kara Swisher: All right, Scott, one more quick break. We'll be back for predictions.

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Kara Swisher: Okay, Scott. Predictions. Go ahead. Make a prediction. Obviously. We didn't expect the Peloton guy. We'll see if it sells.

Scott Galloway: Well, first off, go Rams. Let me just say that.

Kara Swisher: Is that a football team?

Scott Galloway: No, it's an off-off Broadway play that we're going to together.

Kara Swisher: Oh, okay. Good to know.

Scott Galloway: Anyways, my prediction is Coachella is doing something interesting. They're selling 10 tokens or NFTs—I think they call it a token—that gives you lifetime access to the music festival. So far, the highest bid is $75,000. This is the beginning. This is the tip of the iceberg. You're going to see in 2022 what I call Luxe Coins emerge. Organizations trying to monetize the scarcity value of access. If I were Chanel or Hermes, I would issue 10,000 coins for access to all Hermes products anytime with a stylist. It would be such incredible signaling and the perfect gift for every guy's fourth wife. I think they could raise billions overnight.

Kara Swisher: How do you account for that in terms of accounting of the cost, like things you owe later? I'm just putting my accountant hat on.

Scott Galloway: You'd get the cash up front. You might not be able to recognize the accounting revenue, but you would raise billions of dollars overnight. Get rid of these stupid development departments, get rid of the admissions department. I'll give you another one. A Langone, a Cedars, or a Jackson coin. Cradle to grave healthcare, no insurance. Say you're a parent. What do you leave your kids in your will? A stable coin for their family that says, cradle to grave, anyone with your last name gets great health care at Cedars or Langone for the rest of their life. They could raise billions.

The scarcity, monetizing—they'll use technology. There's a technology overhang. There are so many things you could do to get upfront payments around scarcity value from universities to hospitals to healthcare to aspirational events. Burning Man could issue a coin that says whoever owns this coin for the rest of their life gets to be in the best art or whatever it is.

Kara Swisher: We'll see how many they'd sell with those. Yeah, the best yurt. Yurt? Is it yurt? They have to provide the yurt. I think I'm going to go to Burning Man this year. I've never said it. This feels like it could be that island. What was the island? I can't even remember it anymore. That everybody—Fyre Festival.

Scott Galloway: Oh, my God, I love that.

Kara Swisher: This feels Fyre Festival to me. But okay, sure.

Scott Galloway: Jesus Christ. Don't even use the term Fyre Festival when our Pivot Miami conference kicks off in 72 hours. Don't even say.

Kara Swisher: Yes, we will have bologna sandwiches for you all. Speaking of which, I will see you soon, Scott.

Scott Galloway: Oh, we almost had Emily Ratajkowski. That would have felt very Fyre-ish.

Kara Swisher: No, no. She was like one of the models promoting Fyre Festival. Was she? No? Is that misinformation? I'm looking it up because I have to fact check you in real time.

Scott Galloway: Okay, all right. Here's the deal. You're correct.

Kara Swisher: You seem so disappointed.

Scott Galloway: It was a post about the Fyre Festival. Yeah, I know probably a little too much about Emily Ratajkowski. I hope I'm saying that.

Kara Swisher: Anyway, we'll be back on Tuesday for more from Miami. I will be with Scott in person in Miami. We'll both be wearing our Miami clothes. We'll have such a good time. The weather will be warm. Scott, I'm looking forward to seeing you in person.

Scott Galloway: Yeah, likewise. It's going to be fun. And please read us out.

Kara Swisher: Today's show was produced by Lara Neiman, Evan Engel, and Taylor Griffin. Ernie Indertod engineered this episode. Thanks also to Drew Burrows and Miel Silverio. Make sure you're subscribed to the show wherever you listen to podcasts. Thanks for listening to Pivot from New York Magazine and Vox Media. We'll be back next week for another breakdown of all things tech and business.

Scott Galloway: That deaf, dumb, and blind kid sure plays a mean pinball.