Roblox IPO, Facebook doesn't think it has an antitrust problem and a listener question on PlayStation5

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Kara Swisher: Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher. And this is Piers Morgan. No, it's not. I need a job. I need a job. He never shuts his pie hole. The new co-host.

Scott Galloway: Well, yeah, that's the problem. He actually speaks his mind.

Kara Swisher: No, he doesn't speak his mind. Give me a break. He was like ghosted by her on a date, which he talked about extensively, and then got obsessed.

Scott Galloway: Oh, my God. He was ghosted by who?

Kara Swisher: Meghan Markle.

Scott Galloway: Oh, really? I did not know that.

Kara Swisher: Yes, try to keep up with this shit.

Scott Galloway: I did not know that. Let me tell you.

Kara Swisher: He talked about it. Like, he was like, "Oh, she never called me back." I get all my news from Fox and CNN. Listen to me. He doesn't get to speak his mind. He's like a weird—he does this constantly attacking women.

Scott Galloway: Really? You really think it's targeted towards women?

Kara Swisher: I think it's a weird obsession with her. He goes all out on her, and it's really odd. He was ghosted by her. That's what he said.

Scott Galloway: That is a good dish.

Kara Swisher: I think he used the word "ghosted," yeah. So that's what that guy was referring to. He doesn't speak his mind. He's a pig in the way he talks about people. It's just gross. Actually, it's an insult to pigs. It's an insult to pigs.

Scott Galloway: Hmm. Tell us how you really feel.

Kara Swisher: I just find it ridiculous that you immediately run to saying he speaks his mind. Any drunkle can say anything at a dinner party and it's A-OK with you. I just don't think it's the case. I'm sorry. I would draw the comment. Pierce, Pierce, you know, this is outrageous. And I'm looking—you know what? If they don't bring Alan Alda in as the new daytime host, I'm going on strike.

Scott Galloway: Listen, who am I on the show with right now? You get very smart.

Kara Swisher: Yeah.

Scott Galloway: Someone who's only ridiculously fucking liberal instead of wants their statue cemented in the history of wokeness.

Kara Swisher: No, he is like—he has a history of doing this. He has a history. This is like every white man continues to be a trend that is always at the top.

Scott Galloway: I'm all of those things. I am all of those things.

Kara Swisher: Always at the top. They're always aggrieved. They're always victims. They never get to say what they want. Well, he has like whatever million people on his Twitter feed. He's got a TV show. He's got a column. And then he claims victimhood. It's exhausting. It's exhausting.

Scott Galloway: I agree. This is exhausting. What's our next story?

Kara Swisher: Our next story. BuzzFeed announced massive layoffs of the Huffington Post. BuzzFeed acquired the Huffington Post from Verizon Media last month. And, of course, it announced layoffs. A lot of the stuff they did—people are very good reporters who are more focused on reporting. A lot of the people that stayed are more who—not the people that stayed, but they're focusing more on obviously numbers and things like that. So what do you think about that?

Scott Galloway: That's just—I don't know about you, but I have just had it with angry, white, aggrieved media companies. I have just had it.

Kara Swisher: By the way, these are pretty white brands.

Scott Galloway: I can see where this show is going. It's kind of like you yelling at me about being a liberal.

Kara Swisher: Yeah, that's clearly where it's headed. One of us is yelling at the other. That's clearly where this is headed. This is like SNL. You remember "Jane, you ignorant slut"? This is where we're headed.

Scott Galloway: Yeah, I remember that. I'm glad you said that. It was a great show.

Kara Swisher: So anyway, what do you think of these consolidations of media companies? It's just going to continue.

Scott Galloway: Well, look, kids—when I say kids, I mean students will come into my office hours. They never want to talk about the topic. They want to talk about careers. And they talk about digital media and digital marketing as if it's this robust ecosystem. Digital marketing is an outstanding career as long as you go to work for Facebook or Google. If you look at media companies, we tend to think that the proxy or the forward-looking indicator of success is old media versus new media. We go, "Oh, it's legacy is a newspaper, which means it's going out of business, but it's online, which means it's going to accelerate." The reality is that Huffington Post and BuzzFeed are much less durable than the New York Times company or even Gannett. They have not figured out a customer acquisition model. They haven't figured out retention. They are constantly getting gamed by Google and Facebook who starch all the margin out of the traffic that they try and get there. Basically, the internet is all flowing through a couple of touch points. If you aren't one of those touch points, you just slowly but surely leak value. We're seeing a huge consolidation. There will be probably one or two winners that are able to consolidate, lay off people, and get to profitability. I think actually our company, Vox, it looks like it might be the last woman standing, so to speak. But BuzzFeed and Huffington Post, quite frankly, lists. I've never understood the attraction of HuffPo. I never understood its positioning. I never understood its differentiation.

Kara Swisher: Well, it was sort of first out there with a lot of this stuff. I mean, you know what I mean? But what is, in your mind, what is Huffington Post's editorial view? I don't understand. BuzzFeed has lists. I'll give it that. They have lists. Well, they have more than that, but they have some very excellent reports. But what does the Huffington Post stand for in your mind in terms of editorial view?

Scott Galloway: I don't know. I think they bought it for traffic, I guess.

Kara Swisher: I guess for traffic is what I assumed they bought it for at the time, at that moment, because of that. But they did manage to acquire some—I think Ariana went all over the world opening Huffington Post Canada, which they closed down completely, and some other things. I understood it in a bigger sense, but not in an actual sense. It didn't make any sense to me to be opening outposts all over the world just because.

Scott Galloway: She's a visionary. But the thing is, a company that's able to raise cheap capital, which the Huffington Post was able to do, what you want is promise and then performance. The reality is a visionary like Ariana and the notion of having journalism on the web and having celebrity journalists every once in a while—although those two are oxymorons. The bottom line is the performance hasn't matched the promise with BuzzFeed or Huffington Post.

Kara Swisher: That's an excellent way to put it. That is an excellent—it's going to be hard. I think probably there's news around a SPAC around BuzzFeed, of course, as there is around Fox and others. But there's definitely a lot more noise around BuzzFeed right now. So you wonder if they're trying to clean it up for a SPAC situation.

Scott Galloway: Yeah, I'd say the momentum—and we're pretty critical. We're not afraid to bite the hand that feeds us. But I would argue that the momentum at Vox is different than the momentum at BuzzFeed right now.

Kara Swisher: It is different. I think our momentum is actually—I think we actually have momentum right now. And I would argue that the—and it may be just the media coverage of BuzzFeed—but I would say the momentum, at least the perception, is the momentum is not good.

Scott Galloway: Well, you want to go into any public offering. The one thing SPACs aren't doing yet, and they probably should, is going after distressed properties. You would much rather be a shitty growth company—when I say shitty, I mean buying growth in non-economic terms—than a company that has real assets but is declining in revenue. SPACs will get there eventually. SPACs will start going after distressed properties.

Kara Swisher: Yep. 100%. It's just an interesting time for media once again, but I think you're not going to see the end to consolidation as these things sort themselves out. Maybe they can make their money via NFTs or some other way.

Scott Galloway: I'm joining Pierce Morgan's SPAC. I want you to watch him for 10 minutes. It's the aggrieved white male SPAC.

Kara Swisher: You're not like him. Let me just say.

Scott Galloway: Well, thanks for that. Thanks for that.

Kara Swisher: But in any case, just watch him for 10 minutes. I like Chelsea Handler. He and her got into it. I always thought she was great. She's great. I never understood why he picked a fight with her. You can watch him for 10 minutes and you'll get the whole point. Anyway, I will stop with the aggrieved white man thing. Although there was an interesting story.

Scott Galloway: Oh, yeah. I'm sure we're never going to hear that talk track again.

Kara Swisher: Well, it's just like every day.

Scott Galloway: Well, I'm glad that's over.

Kara Swisher: Glad that's over. God, and they go on and on about Dr. Friggin' Seuss, these people. What is their problem?

Scott Galloway: Can we talk about that for a moment?

Kara Swisher: Yes.

Scott Galloway: That's just a capitalist move.

Kara Swisher: Yes, exactly. The publisher has just decided we will sell more of these books if we get rid of certain shit that offends people. It's just a capitalist move. And then Fox has decided we're going to offend those same people because there's money in it. Both are capitalist moves. They're using it as a thing. You saw the—whatever his name is, Kevin, whatever the heck, the minority leader that keeps liking and disliking Trump, who's such a stupid windmill. Anyway, he was reading—

Scott Galloway: A stupid windmill.

Kara Swisher: He went back and forth.

Scott Galloway: That's very good. You should be in journalism. "A stupid windmill." I don't think I've ever heard those two words together.

Kara Swisher: Listen to me. I'm just saying it's exhausting.

Scott Galloway: Well, you're a charming nuclear reactor.

Kara Swisher: Okay. That's good. I'd say I'm going to have to get you.

Scott Galloway: That's why you put up with my aggrievedness, my whiteness, and my maleness.

Kara Swisher: One thing that's nice about your aggrieved white maleness is you're often right on certain things. Let's go to the big story.

Scott Galloway: Just because I'm angry doesn't mean I'm wrong.

Kara Swisher: That's true. Here's the big story. Roblox went public this week. Let's talk about the company and what's next for the video gaming market. The Silicon Valley video game company opened its first day of trading at $64.50 a share, that was up more than 43% from the reference price of $45. That valued Roblox at $41.9 billion, up from $4 billion just over a year ago when you were talking about it, Scott. In the last year, $56.9 billion was spent on gaming in the U.S. That's up 27% from 2019. Not a surprise, a lot of people at home. So what up? Talk about it.

Scott Galloway: Well, I don't know if you remember, but a certain podcast in Q3 of last year said this thing was a gangster when it was valued at $3 billion and said it was going to be a monster IPO.

Kara Swisher: So why did you—walk us through your thinking on that so people can understand your genius.

Scott Galloway: Well, it's not even a video game company. It really is a platform. What they have done is they've learned from the sins of the father. They've recognized that, okay, what does Facebook do really poorly? One, they lie to us and try and feign concern about the well-being of our children. This company actually has made substantial investments in content moderation.

Kara Swisher: They have indeed.

Scott Galloway: It is truly a platform where it tries to more than just stroke their fingers through the hands of their creators and then put a bullet in their head and starch all the margin from their creators. A third of their revenue was going to actual creators.

Kara Swisher: That's an interesting business plan.

Scott Galloway: Yeah. I mean, they paid out to their creators a quarter of a billion people, and they're not actually in the business of development. They're in the business of creating a platform. Then it's more dispersion. It's like, okay, the people at Activision or Blizzard shouldn't get to decide what 11-year-olds want, what video games they want to play with. If you're an individual who comes up with an idea for a fun, cute little game involving pigs and farms, and 11-year-olds love it, we just get it out there. We disperse, we leapfrog the traditional video game industrial complex, and we give you a portion of those rents. No one video game, I think, has more than 10% market share. The numbers are just staggering here. Over 50%—there are more people under the age of 18 on Roblox than there are not.

Kara Swisher: So this is arguably—it's interesting doing this thing, which you're just saying, taking these sins of the people before them and making it a safe gaming platform for kids. It is important. I had the longest time struggle with my kids and the video games. Because these large platforms that put them out—but it just creates something that—it's interesting, any of these companies taking the mistakes made, like a Shopify to an Amazon or something else.

Scott Galloway: That is exactly the right analogy. Thank you. Exactly the right analogy. So they're up 12% again today.

Kara Swisher: So how does this whole space, not just Roblox, but what else should we be watching? Let's make this—

Scott Galloway: Well, there's what I call the immunity strategy or the zag strategy. That is when a huge player is creating hundreds of billions of dollars in market capitalization and it's zagging. For example, it is using massive investment to create so much traffic no one can compete with it. Then slowly but surely partnering with its retailers on its platform the way the virus partners with a host—keep it alive just long enough so you can soak it dry, i.e. Amazon. Then Shopify comes in and says, "You know what? We're not going to be obsessively focused on the consumer and as a result basically treat our customers, our retailers, like shit. Yes, our partners. We steal their data. When their business becomes too profitable, we vertically integrate into it. We decide what goes in the box. You don't know who the consumer is." Shopify said, "We are absolutely going to focus. We're going to zag. We're going to let the retailer control the customer. We're going to give you the data. We're going to give you the branding. We're going to let you decide what goes in the box." What is Public doing? Disclosure, I'm an investor. Robinhood, the number one player, has created $30 billion supposedly in market capitalization if Goldman Sachs is willing to be a total hypocrite and take this company public. What does Public say? "We're not going to sell order flow. We're not going to be bro-y. We're going to have 40% women." There is an enormous strategy of shareholder value creation around what I call the zag. When any one company creates the type of slipstream or air cover that creates hundreds of billions of dollars, look at the externalities. Look at the viruses it's creating and say, "What immunities could we bring to market that are totally different than what's happened here?" There's going to be TikTok is zagging. That should be your next book, Zag. TikTok is zagging against social, against video platforms. It's trying to be cleaner. It's trying to be more optimistic. It's not allowing people to start insulting each other in the comments section. Your analogy is exactly the right one. Roblox is saying—

Kara Swisher: Talk about where this goes because this idea—again, it's up 12% again today. I think it likes creators is what you're saying.

Scott Galloway: That's the second part. The respect. Creators get tired in a system that's more predatory. It's an abusive relationship. YouTube is very good at publicizing the 15 people that make a million dollars on YouTube. But there are 15 million creators on YouTube making less than a dollar. Because YouTube figures out a way to starch almost all of the margin out of the relationship. They have been incredibly greedy. Roblox is saying, "Okay, the key here is our partners, our creators." Even TikTok is trying to be more generous with their creators and say, "All right, how do we get the secret sauce here? Leveraging other people's creative talent." Where I think it heads is, I think there is a zag in every major market. Your guy from Neva, he's creating a zag to Google.

Kara Swisher: Yeah, he's trying.

Scott Galloway: He's saying, "Okay, what's the problem with Google? Google started out as the best place to get to the right information, and slowly but surely, Google has become a place that takes you to another place they can further monetize." Why? Because the advertising model is the tobacco to nicotine. It's the shit that gives you cancer. Your buddy at Neva said, "I'm going to make it subscription-based, and I won't have the temptation. Then my focus will be to take you to the best place based on your query." That is a Zag strategy. By the way, I think that company is going to be a monster. They just closed their seed round, I think. He strikes me as incredibly impressive.

Kara Swisher: Yeah, he did just cover it. He did. He's a really interesting guy. I had him tell a class of mine, and he was talking to the students why he did it. He said, "I felt like I was part of something very menacing," essentially, which was interesting. All right. So what's next for the video game industry? What happens to the big ones that sort of—it was like the record industry. They pick winners, shower them with attention, and also take a lot of their value, essentially. That's how the video game industry works. You have these big video gaming companies that then publish these things. Same thing with the book industry, everything.

Scott Galloway: It's dispersion. Bring it home to dispersion.

Kara Swisher: Well, effectively, dispersion is kind of a pedantic, aggrieved white male way of saying, "When you leapfrog the traditional players." So Warner Brothers and Wonder Woman 1984 have leapfrogged traditional movie theaters. They've said, "Look, it's better for us. We'll create more shareholder value if we pulse HBO Max by creating value and not taxing people by saying you either got to see a movie or wait 12 weeks." These guys have said, "We're going to leapfrog the traditional gatekeepers." What would be interesting is if Sony or Microsoft create their own platforms and piss off the big game developers and say we're going to let individual creators have access to this platform.

Kara Swisher: So I think it's really exciting. Roblox at this valuation, I'm not a buyer. I think it's an amazing company. But you know who else is zagging that just filed for their IPO? It's Coursera.

Scott Galloway: Coursera said, "Okay, there's this traditional enforcer of the cash system called elite universities, and we're going to zag and try and bring the cost down." They went to MOOCs, and then they went to short-form courses. According to their S1—I think they just filed to go public—they did a quarter of a billion dollars in revenue. My point is, and I think this is the lesson to young people, when you see, for example, Tesla. Tesla now has—even with its—Tesla has sold off 35% in the last like four weeks, which is extraordinary.

Kara Swisher: It's had a sell-off because—there's lots of reasons, but go ahead.

Scott Galloway: But it's still—it's unfair to say it's a sell-off because it's worth a half a trillion dollars. It's worth the entire automobile industry even after its sell-off. That is going to attract competitors. An interesting analysis, if you're in the automobile industry or you're just a young person trying to think through strategy, is to say, "What are the externalities or what are the negatives of Tesla? And what automobile company could zag?" Because everyone's zigging.

Kara Swisher: That's a tough one because of the difficulty of the technology.

Scott Galloway: 100%. But it's an interesting exercise to go through. I'm just using this as an example. By 2030, Volvo said they're going all electric. By 2035, GM said. So everyone's zigging. Is there an opportunity around something else? My point is, as a species—

Kara Swisher: How about a giant gas-guzzling car? What do you think?

Scott Galloway: Well, that was what saved Detroit.

Kara Swisher: Yeah, yeah. I mean, do you remember the first time you saw Hummer? And you thought, "Oh my God, the species is going to go extinct."

Scott Galloway: Yeah, but the Ford 150s, you're right. That was the winner car.

Kara Swisher: So I think, anyways, I love the Zag. I love the Zag. The most innovative companies of the last 10 years, I think, have been companies people don't talk about.

Scott Galloway: I like Zag. I'm going to call you Zag from now on.

Kara Swisher: You're a zag.

Scott Galloway: Zag? You're zag. You're a zag. That would be your superhero name. You'd just zag all over the place. You'd be like, "Scott, calm down. Slow down."

Kara Swisher: I like that you're looking at me in the context of a superhero versus the aggrieved white guy.

Scott Galloway: Many superheroes are, if you think about it—Iron Man.

Kara Swisher: No, the nemesis is.

Scott Galloway: Iron Man's pretty aggrieved. He's always mad.

Kara Swisher: That guy's not aggrieved. That guy's a gangster.

Scott Galloway: He is, but he's often mad. Tony Stark? He's mad. There's a lot of mad superheroes. I would say Hulk is an aggrieved white guy.

Kara Swisher: Oh, yes. He's basically a scientist that didn't get tenure.

Scott Galloway: The majority of my colleagues at Stern are the Hulk minus the muscles and good intentions.

Kara Swisher: Oh, man. Nothing like a mad professor, mad woman. Oh, yeah. That's scary. That's it. I'm going to throw my PBS tote bag at you if you continue this.

Scott Galloway: That was good. I just thought that. I like that.

Kara Swisher: You don't like tenure, so they must love you, right? They must love you.

Scott Galloway: Yeah. Yeah. No, I'm very popular around those parts right now.

Kara Swisher: Yeah, someone mentioned that to me. I was in an NYU class—

Scott Galloway: About how much they don't like me?

Kara Swisher: No. Someone mentioned that. They were using euphemisms like, "Well, Scott's an interesting character. Scott, you know, he causes a lot of discussion around here." They were trying to write around what they were. I was like, "What are you trying to say? He's a pain in the ass. Is that what you think?"

Scott Galloway: No, he's a breath of fresh air.

Kara Swisher: Right.

Scott Galloway: He's a breath of carbon monoxide when the garage door has been closed.

Kara Swisher: Oh, it was funny. No, I got to give it to him. They are so much more generous and patient with me than I would be with me.

Scott Galloway: Yeah. Unfortunately, the deans have been wonderful, generous people.

Kara Swisher: Anyway, what are we talking about? Where are we? Bring us back in. Scott, we're talking back to Scott again.

Scott Galloway: All right, we're going to go to a quick break.

Kara Swisher: When we come back—that was a very good call on Roblox. I'm going to give you credit there.

Scott Galloway: There you go. That's right. Is that what you need to this week? Road to the blocks. Road to the blocks. Good job.

Kara Swisher: Wait, before we go, you know what the most exciting news?

Scott Galloway: What?

Kara Swisher: I got a video, a text message video of a kid dunking.

Scott Galloway: Uh.

Kara Swisher: And it was that—oh my son—yes—your son is dunking—I know—that is very exciting—I have like 20—he like—he made me go—I actually had fun—I didn't think I would have fun because I so little—and that's the time I had a basketball—basketball's great—I was sixth grade—basketball's great—you know what? He had a great time. He goes to the local neighborhood court here in Shaw and plays with all the kids there. And they were all wearing masks. It was nice.

Scott Galloway: The mean streets of Calorama. Is that what you're trying to get your street cred? He was like getting out and meeting people in the neighborhood. It was nice.

Kara Swisher: Can you just not take a nice thing? I'm sorry. There was no mean streets here. I never think there are mean streets here. There's lovely people who live in this neighborhood. So anyway, he had a great time and it was nice. And he does. He throws down. I saw that video. I watched it several times. He does. I have lots of them. That's exciting. It's really—he can reach the top and throw the ball in. He's very tough.

Scott Galloway: That's called a dunk, Kara. That's what it means to dunk.

Kara Swisher: I know. Reach up and throw it down. I know. I know. You know what I did? I tried to pull his pants down. That's what I tried to do.

Scott Galloway: Nice. I was trying to beat him. You pantsed him?

Kara Swisher: Actually, you never listen to my other things because you ignore me completely. But I interviewed Spike Lee today, and we had a long discussion about basketball.

Scott Galloway: You're kidding.

Kara Swisher: Yeah.

Scott Galloway: How was he?

Kara Swisher: Great. Funny. It's a really fun, easy interview. NYU. NYU. That's right. He talks about NYU. He did not talk about Scott Galloway, though, just so you know.

Scott Galloway: Okay. We're going to go on a quick break. When we come back, we'll talk more about the legal battles in big tech and a listener mail question.

[Ad break]

Kara Swisher: Scott, we're back. Facebook is asking a federal judge to dismiss antitrust lawsuits by the Federal Trade Commission and the state's attorneys general. The company is arguing that the government has no valid basis for alleging the social media giant is suppressing competition. This is the first legal move in the company. It's going to be a long time, I think, since antitrust charges were handed down in December. Meanwhile, this week, a bill that would allow news outlets to bargain with tech platforms over the distribution of their content was introduced to a bipartisan group of lawmakers. So what's happened in Australia is coming here. It's called the Journalism Competition and Preservation Act. That sounds sad, I have to say, and it's being touted as a way to save local news. It looks a lot like what happened in Australia. So things are a-moving. What do you think? What's going on here? Obviously, Facebook's got to slap back. It's going to be interesting.

Scott Galloway: I see this as it's coming down to a battle between a lot of the judges that were appointed by the Trump administration that never—I think are probably more sort of Bork antitrust. They're more about let the markets go where they go. Although we'll see. This has been a bit of a bipartisan issue versus two total gangsters, Professors Tim Wu and Lina Khan. They've both been appointed to posts within the administration. You do not want to fuck with these guys. Lina Khan is going to the FTC or allegedly. She's got to get through the approval and stuff. And Tim Wu is joining the National Economic Council.

Kara Swisher: That's right, right, Andy?

Kara Swisher: Yeah, I've had both of them. I think we've had both of them on our podcast. And they're both just – she's an inspiration. She's like 17 and is a legal scholar. And Tim has the ability to just bring stuff down to kind of very basic – like you listen to him say something, you go, well, that makes sense. So I think it's super exciting that both of them are in the administration. I think they're exactly the kind of people that you want wrestling with these issues such that you can trust that they will come up with really thoughtful decisions that are somewhere between – that recognize the grays and the importance and the need for capitalism, free markets, but at the same time recognize the concentration of power that's occurred here as well for the economy.

Scott Galloway: I think the signal – Tim is joining the technology and competition policy at the National Economic Council and the FTC. They're considered anti-tech. Like if you had to put them in a bucket.

Kara Swisher: Well, I wouldn't even say, I don't know. They're not anti-tech. They're anti-monopoly. Right. And I think that what we fail to realize is that breaking up monopolies will be really good for tech. It just might not be good for Facebook or Google CEOs. I think it's going to be good for their shareholders. I think it's going to be great for their employees to have more organizations bidding or trying to rent their talent. I think it's going to be great for the markets, great for job growth, great for taxation. So I would argue that professors Wu and Khan are very pro-tech. I just think they're anti-monopoly, which, by the way, is a very Republican capitalist positioning.

Scott Galloway: Although Republicans are not saying we shouldn't mess with success is often their argument. They seem to be less sympathetic. This feels like a bipartisan issue to me.

Kara Swisher: Yeah, it does. It does. I think it would be really interesting to see what kind of influence they'll have and the road to confirmation. Because when there was a report of Khan's nomination, whether it was true or not, Mike Lee, who I think he's really won many cards short of a deck, he said that Khan's nomination, if true, was deeply concerning. And he criticized her youth and experience. It's just ridiculous. She's really, you know, saying like— Lena Khan? She's a kid, essentially.

Scott Galloway: Ms. Khan, no doubt, has a promising career ahead of her career.

Kara Swisher: What, he's saying that like it's a bad thing?

Scott Galloway: But being less than four years out of law school.

Kara Swisher: I know. I was like, are you kidding? You know who's president? We don't want to have Strom Thurmond figuring out how to regulate. Let's get Strom Thurmond dug up from the grave and ask about search. I know. Right, right. So anyway, so, and then he said her views on antitrust enforcement are also wildly out of step with a prudent approach to law. I mean, honestly.

Scott Galloway: She's fucking John Travolta in step.

Kara Swisher: Yeah, exactly.

Scott Galloway: She is literally on the disco floor with that young woman's step. She's got step, Kara. She's got step. I think he's just, he's really lost the narrative, as they say.

Kara Swisher: And then David Cicilline, who she worked for, worked with Kahn during the tech investigation, said it would have a major victory for locally owned businesses, workers, and everyone who's been negatively affected by the dominance of big tech. She worked for him on the antitrust. Best congressional hearing I have ever witnessed. Absolutely. She was in the background, and Representative Cicilline put on a master class.

Scott Galloway: Master class.

Kara Swisher: Agreed.

Scott Galloway: Agreed. I guess I'm too young.

Kara Swisher: Are you kidding? I wouldn't say that about Mark Zuckerberg when he was 24. What a brilliant person he is.

Scott Galloway: No, he's an innovator, Kara. He's an innovator. It's just ridiculous. No, you're an innovator. He never had another job, Mike. If you're young and worth a billion dollars, you're an innovator.

Kara Swisher: Yeah.

Scott Galloway: And you're a great American. But if you're young and a woman, you're inexperienced.

Kara Swisher: Yeah, exactly. And a woman of color. So Tim's book, his 2019 book, was The Curse of Bigness, Antitrust in the New Gilded Age. Obviously, there's a lot of books coming out. It's a great book.

Scott Galloway: Yeah. That is a great book. I read like two books a year, and that's one of them. That was an outstanding book.

Kara Swisher: Yep, and also Biden's being very careful not to put too many tech people in big positions, like big prominent positions. They don't want to do, there was a rumor that Eric Schmidt was going to be in the administration role, and I think progressive groups were like, mm-mm, mm-mm, mm-mm, like that kind of thing. I think that's a tough one. Yep, yep, so this is going to be interesting. So Facebook's obviously going to fight back hard here. They're going to hire every lawyer that they can get their hands on and try to push back on this. But I do feel like this is— The worm is turned.

Scott Galloway: Worm is turned.

Kara Swisher: Worm is turned. We'll see. They could have some wins. They could have some wins. They're very clever people. There's some really books that are coming out that are not so pretty. There's Shira Frankel and Cecilia Wang, who are from the New York Times, have a book coming out in July that I think is not—it's called The Ugly Truth, I think it's called. Facebook, that's the name of the book. So I think there'll be a lot of reporting on what happened within there just right when this stuff is coming out so we'll see, we'll see. I'm going to look it up anyway, we're going to move on to listener mail. Alright Rebecca, please play the question. It's for Scott I think.

[Listener Mail Segment]

Listener (John): Hi Scott and Kara. Scott, this is a former student of yours leaving a message here. My name is John, based in Los Angeles, and I have a question for you about what's going on with the Sony sale of the PlayStation 5 console. It seems like there's a significant violation of the Consumer Protection Act here. The Consumer Protection Act is clear that we have the right to be informed about the quality, quantity, potency, purity standard, and price of goods to protect the consumer against unfair trade practices. Sony and its retail partners have done nothing to stop bots from buying all the stock. How is this not a violation of the Consumer Protection Act? Thanks.

Scott Galloway: So first off, John, it's great to hear from you. I love hearing from my 5,500 alumni. So thanks for reaching out.

Kara Swisher: Wait, you have affected 5,500 young minds? Infected or affected?

Scott Galloway: I said infected.

Kara Swisher: Infected, yeah. Go ahead. Keep going. Sorry.

Scott Galloway: Thanks for that. But anyway, so scarcity value is really interesting. And essentially, like everything, it's linked to instinct. And that is previous generations or in olden days, you were really smart instinctively. Or it was an instinct to become obsessed over scarcity. If you sensed a scarcity of food, supposedly we have a third of the spinal ganglia of our brain is in our gut. You became obsessed with finding food. The moment there was a scarcity of it, you became obsessed with finding a mate if there was a scarcity, because survival and propagation are really important. And that is still with us, this notion that the moment we perceive whether it's artificial or not, and it usually is artificial, scarcity, the value, the perceived value of that product skyrockets.

So in this case, you go buy a Panerai watch and you go into any Panerai store and they're going to tell you, we don't have that model or there's only seven. And it's not because there's a supply constraint on the parts and movements. It's because luxury has mastered or tapped into the instinctive need of scarcity. And they create artificial scarcity to increase the value. The latest real gangsters around perceived scarcity are these new NFTs that are trying to convince you that if I create just one digital application of this video or piece of art, that it might be worth millions of dollars. That is really tapping into what I'll call instinctive overdrive around scarcity value.

And in this instance, what Sony has decided is if some people, some actors, whether they're good actors or bad actors, move in with bots and create the illusion of scarcity, it drives up the value. And all of a sudden, we become very focused, even obsessed, in getting the PS5. The problem is the person that pays for that is just the average household that just wants a PS5 when it comes out. So, do you – what is the tradeoff? Schools, universities, higher education have massively tapped into this bullshit notion of scarcity. Harvard has the endowment, the supply, the technology to increase their freshman class tenfold. But they want to create scarcity because they're drunk on luxury and believe they're Hermes, not public servants.

So scarcity value and understanding it and understanding how to leverage it and trade off short-term revenues to create an obsession, an instinctive obsession with getting more of that product is an incredibly dev business strategy. And that's all that's being applied here. The question is whether or not – does it violate FTC or does it violate antitrust? I don't know. At what point does a bot become a person? If I leave my computer and program something to notify me, is that a bot or is that a person? I don't know. But I think the interesting thing here is how great brands and companies leverage scarcity value.

Kara Swisher: Yeah, yeah. And yet not powerful for consumers.

Scott Galloway: Well, there is some psychic reward to believing that you got something that has scarcity value.

Kara Swisher: I don't even know. We still have to talk about NFTs at some point, which we will. You know what? It's been seven minutes. It's been seven minutes and I want to trigger you. Piers Morgan, he's my hero.

Scott Galloway: He's my hero. He's my hero. I think he makes a lot of sense. A lot of sense.

Kara Swisher: Okay. All right. All right. We're going to take one more quick break. That was an excellent answer, Scott. I'm going to be really nice to you today because that's the only thing that seems to work.

Scott Galloway: Today. Today.

Kara Swisher: Well, that's a great goal in a partnership. You know what? We're in a long-term partnership now.

Scott Galloway: Is that what you say to your wife? Tell you what, I'm going to be nice to you today. Here's the situation. I think we've just struck a long-term partnership. And you're like, what? Just a minute. You're like, no, oh no, oh no, I'm stuck with this lady for a while.

Kara Swisher: You're the future ex-Mrs. Galloway, just in a professional sense.

Scott Galloway: We will delve into that situation later, but right now we're going to take one more quick break and we'll be back for predictions.

[Ad Break]

Kara Swisher: Okay, Scott, prediction time since you're so good on Roblox. And one thing I will note, I predict you're going to be on Bill Maher's show. Go on. I don't know what you're talking about. What did you say? You've been invited finally to the Bill Maher show. Tell me about how you feel about that. What are you going to talk about?

Scott Galloway: I think I'm at the end of the day, I think I'm like Lyle Lovett. And that is they bring me on a talk show, hoping that Julia Roberts will come on. I think that they're using me to get to you, but I don't care.

Kara Swisher: I know. I think I want you back. Anyways, anytime I meet someone who's nice to me, I'm like, does this person want me on their podcast or are they just trying to get to Kara?

Scott Galloway: Anyway. You're my gator. You're the gating mechanism for Kara Swisher.

Kara Swisher: Anyway, tell me what you're going to talk about. What do you think your themes are?

Scott Galloway: I don't know. My guess is we're going to talk about Megan and Harry and there's a one in three chance I'll be canceled.

Kara Swisher: Oh, yeah.

Scott Galloway: And we're going to talk about – I'd watch Piers Morgan before you mouthed off about him. But go ahead. Go ahead. The honest truth is I don't know what we're going to talk about. I imagine we'll talk about my book, Post-Corona, From Crisis to Opportunity.

Kara Swisher: Yes, good idea.

Scott Galloway: But Larry Whitmore, who's, as you said, is lovely and funny, is on the show, as is Anna Gerwitch. Is that her name? She's a wonderful author that talks about family dysfunction, which is redundant.

Kara Swisher: Right in your wheelhouse.

Scott Galloway: That's right. Yeah, there you go.

Kara Swisher: That's great. That's going to be good. Everybody tune in for Scott. Is this week?

Scott Galloway: It's tomorrow. I got to be honest. It's a dream of mine. I love Bill Maher. I think he's courageous and funny.

Kara Swisher: You and he will truly spark. You're of the same mind in many ways, I have to say. You have a lot of us. Agree, angry old guys, white men. No, but I think you'll both feel like you'll bond. I think you'll bond. I think you'll bond rather well. Are you going to do it long? Are you going to Los Angeles? It's kind of fun to be on there.

Scott Galloway: Yeah, I'm flying out there this afternoon. Unfortunately, it's not as much fun. They are very responsible and it's inspiring. They do rapid tests the same day. No congregating. Studio audience is distanced. They're taking it very seriously. As a matter of fact, they have two panelists instead of three, so everyone can sit more than six feet apart.

Kara Swisher: Yeah, you'll have fun. It's a great set. It's a really fun set. And also, there's two bed and there's usually a party afterwards. You're not going to get to go to that. That just sucks. That just blows.

Scott Galloway: Maybe you can have a vaccinated party. Maybe you and like who else in California is having real troubles getting everyone, although some people are getting that.

Kara Swisher: It seems rather disorganized everywhere, of course, as I've discussed. Okay. What is your actual prediction?

Scott Galloway: So I, like, Roblox, gangster, kind of re-engineering or dispersion of video games. I think the IPO to watch, and I need to dig into the S1. I need to understand the pricing. But I think the term Coursera and Coursera IPO are going to be terms that are going to be in the business news and on CNBC a lot. And I think the Coursera IPO, I'm not going to predict what the IPO is going to do until I dig in and understand the numbers, but their consumer pickup here and revenue here and the company is still losing money. But Coursera, if the IPO cements and the lead up to the IPO cements their brand as sort of the leader and the pioneer in the dispersion of campus to online learning, you could have a company that could really rock it on its IPO and pull the future forward with that additional capital.

So anyways, my prediction is that just as no one had heard about Roblox four months ago and now everyone's talking about it, we're about to go through the same upward cycle of awareness and value creation just through perception around Coursera.

Kara Swisher: Did you notice that Sundar Pichai answered our question about Google Courses?

Scott Galloway: He did?

Kara Swisher: Yes, Sundar himself did.

Scott Galloway: Yeah. He's so likable.

Kara Swisher: I know, isn't he? Did he tag me or did he just tag you?

Scott Galloway: He did. He tagged you. Don't worry. I miss that. I miss that.

Kara Swisher: He said, it was a response, and he said, "Professor Galloway and Kara Swisher, we just announced, is now open for Google career certificates in data analytics, project management, and UX design." And then he specifically tagged you and me.

Scott Galloway: Wow. Isn't that nice?

Kara Swisher: Yeah.

Scott Galloway: Okay, don't break them up. I like them. I like them. I mean, that's how easy it is, right? I'm like, well, maybe Google isn't that bad. That's so likable.

Kara Swisher: Yeah. Yeah, he answered your question. You said, "Was wondering about the same thing when someone asked, Ryan Merrill asked, whatever happened to Google's certification program you and Kara Swisher talked about nearly a year ago?" And then Sundar answered. He weighed in.

Scott Galloway: He weighed in. Could be transformative. A little bit more. 50,000 plus have graduated from our IT support certificate and have prepared for careers in IT. We're now adding Google career certificates in data analytics, project management, and UX design, expanding our consortium of employers of hiring graduates.

Kara Swisher: There you go. That's nice. 50,000 people.

Scott Galloway: Yeah. There you go. That's serious.

Kara Swisher: There you go. That's nice. You're making an impact, Scott. You're having a—

Scott Galloway: Oh, yeah. This is all about me. Thank you. You seriously, you play me like a fucking fiddle. You're like, okay, I've smacked him a little too hard. You're like, oh, I heard you going on Bill Maher. You literally play—

Kara Swisher: I'm happy for you. You're going, you'll enjoy it. I think you'll be great. And more people should have a little Scott guy.

Scott Galloway: Two things. Two things. The first is I feel very manipulated. And second, I like it. I like it. I like it. It works for me.

Kara Swisher: Well, the whole world will get to see. It works for me. The world of HBO Max, at least. We'll get to see the Scott Galloway we all know.

Scott Galloway: Okay, that's the show.

Kara Swisher: I'm excited to watch you on Bill Maher. We'll be back on Tuesday. You can tell me about how it went, how Los Angeles is. I love Los Angeles.

Scott Galloway: Love L.A. I love L.A. As soon as I get vaccinated, I'm flying out to L.A. I'm going to go get a Cobb salad at the Beverly Hills Hotel. I'm going to go to Carney's. I'm going to go to In-N-Out Burger when we land at the airport.

Kara Swisher: Oh, that's a good idea. There's a good one on the way to Bill Maher's show.

Scott Galloway: Love L.A.

Kara Swisher: Yeah, I love LA. There's a great lunch place. It's so inside, though. I don't know what their rules are right now, actually.

Scott Galloway: See, my fraternity brothers at dinner at a place called Massas or Mastos in Malibu?

Kara Swisher: Yeah, yeah, it's Mastros.

Scott Galloway: Mastros?

Kara Swisher: Yeah.

Scott Galloway: Wow, you're so down in LA. I love LA. I spend a lot of time there.

Kara Swisher: I miss it so—I miss it much. I have many friends there. Anyway, go to NY—have a good time.

Scott Galloway: Thank you.

Kara Swisher: At nymag.com slash pivot to submit your questions for the podcast. The link is also in our show notes. Scott, don't forget to wear your mask, too, because that's the new season.

Scott Galloway: A hundred percent. Even though you've been vaccinated.

Kara Swisher: Anyway, read us out.

Scott Galloway: Today's show was produced by Rebecca Sinanis, Ernie Indra Todd, engineered this episode. Thanks also to Hannah Rosen and Drew Burrows. Make sure you subscribe to the show on Apple Podcasts. If you're an Android user, check us out on Spotify or, frankly, wherever you listen to podcasts. If you like the show, please recommend it to a friend. Thanks for listening to Pivot from New York Magazine and Vox Media. We'll be back next week for a breakdown of all things tech and business.

Kara Swisher: Is Kara's son can jump really high and push that round thing down. It's called a dunk.

Scott Galloway: Dunk. Throwing down. Dunk. The Swisher children, the Swisher boys. Throwing down.