Supreme Court and Social Media, Cybertruck Troubles, and Guest Matt Mullenweg

[Ad Break]

Kara Swisher: As marketing channels have multiplied, the demand for content has skyrocketed. But everyone can make content that's on brand and stands out with Adobe Express. You don't have to be a designer to generate images, rewrite text, and create effects. That's the beauty of generative AI that's commercially safe. Teams all across your business will be psyched to collaborate and create amazing presentations, videos, social posts, flyers, and more. Meet Adobe Express, the quick and easy app to create on-brand content. Learn more at adobe.com slash express slash business.

Kara Swisher: Rinse takes your laundry and hand delivers it to your door. Expertly cleaned and folded. So you could take the time once spent folding and sorting and waiting to finally pursue a whole new version of you. Like Tea Time You. Mmm. Or this Tea Time You. Or even this Tea Time You. Said you hear about Dave. Or even Tea Time, Tea Time, Tea Time You. Mmm. So update on Dave. It's up to you. We'll take the laundry. Rinse. It's time to be great.

[Intro music fades]

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

Scott Galloway: And I'm Scott Galloway.

Kara Swisher: So you headed west, Scott? Are you headed west to meet me?

Scott Galloway: I'm heading west. So I'll start off. I'm going to talk about my weekend.

Kara Swisher: Okay. I am interested in what you did. Not really, but go ahead.

Scott Galloway: I had oysters, but go ahead. I am. I'm actually feeling very fond of you lately. You've been very supportive. So anyways, I have my boys. And if my 16-year-old and I were just left at home, they would find us freezing and starving. Like, we do nothing. We're happy to do nothing. My 13-year-old goes on YouTube and says, "10 best things to do in London." And he'll plan out the entire weekend. And it's wonderful. And I just say, "You're in charge." And he said Friday, he said, "We're going to go to the world's fourth highest ranked food court in the world." I'm like, okay. So we go to Harrods Food Court. And it was amazing.

Kara Swisher: It's amazing. You've never been there?

Scott Galloway: I'd never been there. So it was me, my 13-year-old son, and what felt like every first date in London.

Kara Swisher: Oh, wow.

Scott Galloway: And we had just an amazing meal. And then, of course, we went up to the technology section because he likes to browse around. And then Saturday, me and both boys went to go see Chelsea play Arsenal at Stamford Bridge. And Chelsea, you don't care, but I'm going to voice this on you anyways. All right, Chelsea has literally spent a billion dollars on new players under this new owner Todd Boehly, who strikes me as a really nice man. Anyways, he also owns the Dodgers. And it's been a terrible season. And I'll tell you, the thing that makes for other fans, Premier League football is the other fans. The thing that makes owning a team really difficult is the fans. They are very harsh on the ownership. Chelsea goes up 2-0 against what is arguably the best team in the prem right now, Arsenal. And then in the last 20 minutes, Arsenal scores two goals and ties it up. And I was physically worried that if Arsenal scored a third, there would be a riot. But it was a big game, did that. And then yesterday, got on a plane, came here, hanging out with my sister and her kids. And then in about an hour and a half, I get on a plane and I'm going to come see you.

Kara Swisher: Oh my God, what a family time.

Scott Galloway: What a family time.

Kara Swisher: Yeah, it's a great weekend. What did you do this weekend?

Scott Galloway: Gosh, I had doctor's appointments, which I'm not going to bore you with. I have all my doctors still in San Francisco because I love them. I've had them for decades.

Kara Swisher: Should I be looking for a new co-host?

Scott Galloway: I have a list.

Kara Swisher: No, I'm good.

Scott Galloway: That's because that's why you're not going to be looking for a new co-host. I go to the doctors. I'm one of those people who is very assiduous in going to my doctors every year about everything. Not too much, not too little, just right.

Kara Swisher: Just the right amount of doctors. I still have this terrible cold, though. They're like, "It'll pass." That's really pretty much what they say. I'm in very good shape. Don't worry about it.

Scott Galloway: Well, speaking of doctors, my urologist, no joke, is starting a short-form video platform. It's called Dick Talk.

Kara Swisher: Oh, no, you're kidding me.

Scott Galloway: Okay. He doubles as a locksmith. It's called Cocksmith.

Kara Swisher: Oh, my God. Stop.

Scott Galloway: Do you want more? They're going to complain. Do you know four out of five urologists smell their own urine before they drink it?

Kara Swisher: Stop. Oh, my God. All right. Stop. You must stop. I'm stopping. Because I get complaints and I have to deal with them every time. You don't care about my-

Scott Galloway: I love how you get the complaints. It starts off, "How can you affiliate with him?" That's really where it starts.

Kara Swisher: And I'm beginning to come around to their way of thinking.

Scott Galloway: Daddy rings the register.

Kara Swisher: No.

Scott Galloway: Two words. First word, ka, second, ching.

Kara Swisher: No.

Scott Galloway: Ka-ching. And by the way, it's all the people pretending to be woke that like the dirty stuff.

Kara Swisher: Next show, you're no dick-dudes. Anyway, we're going to talk about important things, like the Supreme Court's latest ruling on the White House and big tech. Companies continue to struggle on how to address the Israel-Hamas war. And we speak with a friend of Pivot, Matt Mullenweg, another person who is a wonderful early person I've known for a long time. He's the CEO of Automattic, who has some news to share with his company. And he's actually an interesting person to talk about the power of big tech and others. He's a really interesting entrepreneur.

Kara Swisher: But first, the Washington Post published its in-depth story on Congressman Jim Jordan over the weekend. The article looks back on his time as the assistant wrestling coach at Ohio State and what he did and didn't know about the team doctor's sexual abuse scandal. In the interview for the piece, Jordan apparently tensed up during the questioning about the doctor, but continued to deny having any knowledge of abuse at the time. The Post interviewed 11 former Ohio State wrestlers from the Jordan era who said it was inconceivable that he didn't know about the doctor's behavior. I don't know what to say. He's going to stick with his story. He's obviously out of running for the speakership. I'm not sure it'll have any impact. He's just going to keep doubling down on that he didn't know, even though he should have known or he's in willful denial.

Scott Galloway: I'm not sure what to say. I'm conflicted here because this type of crime is so heinous that you'd like to think any whiff of this, any complaint, any evidence, any, not even a red flag, but a yellow flag, that you'd like to think that good people immediately run this thing down and make sure it's not true. Having said that, if you go back, I go back to the 80s and I imagine being a coach. I played sports in college and I imagine being a coach. I was so naive to the fact that these crimes even existed and they seem so alien that if you'd heard discussions of this and you were a junior coach, I can, quite frankly, empathize with either not knowing what to do or ignoring it or not believing it. And the reality is the vast majority of people that heard these rumors did nothing.

Kara Swisher: Yeah, that's true.

Scott Galloway: But the lesson here, I mean, it's just easy to judge, to go back to, you got to put yourself in the shoes of someone who's in their early 20s and a coach. But it's like my friend Dov Seidman says, it's not what you do, it's how you do it. And I think if Representative Jordan had said there were rumors, I heard about them, and I am ashamed that I didn't do anything. I want to apologize to all the victims. I feel horrified. I wish I'd been more of a leader here. But quite frankly, it just didn't seem believable at the time or I didn't know what to do. None of us knew what was true. I think if he'd said that, I think people would forgive and say, okay, put yourself in those shoes. Would you have been a real leader and figured this out? Or would you have made the easier decision to think that it was locker room talk or whatever? I remember calling one of the high school teachers in our high school, the gym teachers, his name was Chester. So we naturally called him Chester the Molester. Does that mean other teachers should have run it down because he had a nickname? So I think this stuff is really hard.

Kara Swisher: I'm going to take the opposite.

Scott Galloway: But let me just finish. Let me just finish. His guilt here is by lying about it. He's lied about it. He has said where he screwed up here is he has consistently said, "Heard nothing of the kind about it." And that is not true. There are a ton of people who have come forward and said he was in the room when people were talking about this. So I'm a bit conflicted here. And I do think there are a lot of people because, quite frankly, Representative Jordan sounds like a great asshole who want to see this guy be taken down. What are your thoughts?

Kara Swisher: All right. Here's the deal. He's intense. One of the things that was interesting in this article was how intense he was as a wrestler, how intense he was as a person, how directed. He was a real competitor, one of those real competitors. And you've met those types in sports, and I'm sure you have. I think nothing got in the way of his ambition. And so that's what made him deaf was his own ambition. He wasn't going to hear it. And he wasn't going to say anything about it. And to this day, I think he believes it. He believes he didn't hear it, but he heard it. The evidence here was that he heard it. He knew it. And I know there's rumors. There were rumors in high school about various and sundry people and nothing was done. Every school has that story of something like the rumor of the teacher that sleeps with the student, et cetera. I, as a 22-year-old, quit a job over something like this. And I'm sorry. It wasn't that hard. It really wasn't that hard. It was hard at the time. I was young. I wasn't sexually harassed. I witnessed it. I heard about it. I tried to do something about it. A friend of mine was sexually harassed and the guy settled with someone else we were testifying for. And to say we didn't know was impossible. Everybody knew. The other people in the office who are all Republicans, this was John McLaughlin, who ran the McLaughlin Group. They knew and they did nothing. And to this day, and I quit, I testified against him. The thing was settled and I quit the job. I changed my life. And I'm not putting myself out as a hero at all. And I think I was unusual to act. So I get people who didn't act. But someone who came up to me later, relatively recently, who knew about it and told me I must be lying. They said that to me when I said we have to do something about this. Came up to me, tried to apologize and said, "I'm really sorry I did that. I'm really sorry. I did know. I didn't do anything. I was concerned. I was young." Same thing. Wasn't that young. I was older actually than me by a lot. I was young. I didn't want to lose a job, blah, blah, blah. And they said, "Can you forgive me?" This was years later after denying it, being part of me having to quit. And I looked at this person and I said, "No, I don't forgive you. I don't forgive you at all. And I never want to see you again." I'm sorry. This was just heinous to have done this. And this guy, what happened here was much worse, I would say.

Scott Galloway: Yeah, but I think you just demonstrated a certain moral code, courage and leadership at 22 that most of us don't have at 22. Most of us are in our first job and we don't even understand. You'd like to think you have a moral sense of self and a code and that type of leadership that you expressed and demonstrated. But the reality is the majority of us don't. The majority of us don't have that kind of confidence and code and perspective at the age of 20, whatever.

Kara Swisher: I guess. But let me just say the person who knew, they all knew. They all knew. They've said it to me years later. And all of them are still failing by not saying something. So when this person came up to me, I was like, "Say it publicly. Call, write everybody." They didn't want to do that, right? It's water under the bridge. That was one of the phrases. And that when I knew I was like, "You will not be forgiven." There is no water under the bridge for this, for this woman. It changed this woman's life who got sexually harassed. I know that.

Scott Galloway: It comes back to the same thing. And that is, and I don't care if it's the people who work at Altria or Philip Morris, or the people who work at Facebook. When it's raining money, your vision gets blurred. And you decide to, when you're paid not to see something, it's amazing how your vision can get blurred. And the reality is the reason why John McLaughlin got away with this was everyone around was making money from him. And I mean, this happened at News Corp. There were abuses there that just shouldn't have gone on so long. And when there's clear signs, let me take it a big time, when there's clear signs that you're radicalizing young men, when there's clear signs that young girls are having greater degrees of suicidal ideation because of your algorithms, but you're making so much money, it's just easy to come up with reasons for why to ignore it.

Kara Swisher: I guess. And it takes, so I guess what I'm saying is, I don't find- I know why he did it. I was around people who did things like that. I saw it with other people. That's not what I'm saying. Now, today, he should say something. And he can't because he's doubled down. There's no reason not to acknowledge it now. And this is what's good about, I think there's a lot of, you could argue, there's a lot of negatives around cancel culture, whatever you want to say. But there were too many people in vulnerable groups getting abused for too long.

Scott Galloway: And something you said has always resonated with me. And that is when you're a white heterosexual male, you have to take a minute and take a breath and realize that you will never have the same level of empathy or understanding of this. Because, and you said this once, and it's always stuck with me, people who have never been victims have a difficult time understanding what it's like to be a victim. Because I don't, quite frankly, I'm not worried about crime because I've never been a victim of crime because no one fucks with me. And then if I'm out with my sister walking around the street, I can see she's very cognizant of what's going on around her because she is much smaller than me.

Kara Swisher: Yeah.

Scott Galloway: And I do think that men in the workplace and outside of the workplace who are just, quite frankly, physically bigger need to take a breath and go, your world is different. You have a different threat assessment.

Kara Swisher: Yeah, it's true. I think in this case, this guy's ambition was just so high he didn't see anything else.

Scott Galloway: And that was- Are we talking about Representative Jordan?

Kara Swisher: Yeah, I think you could see his intensity. But what do you think his ambition was? He was a junior wrestling coach. No, no, no, no, no. But he was a very competitive athlete. He was always on the, like, focus on the next thing. And I think he was always planning and plotting and stuff.

Kara Swisher: Anyway, speaking of someone who did take a stand, Jon Stewart and Apple are parting ways with the cancellation of Apple TV Plus' show, "The Problem with Jon Stewart," just days before the third season was due to start taping. It's really not clear what happened, but no one said anything publicly. I've asked Jon for an interview. They and Apple executives reportedly had disagreements over upcoming guests and potential show topics tied to China and AI. Not surprised. Any talks I've had with Hollywood that have to do with anything I'm making and Apple buying, selling to Apple is always, they're wary about me and topics. What topics would you discuss? Again, it's Apple's network. They can do whatever they want. But I talked to Stewart on Sway in 2022 and asked him about his decision to do the show with Apple specifically. Let's listen to what he said.

[Audio clip plays: Jon Stewart: "We wanted to try and create kind of a universe of information where we were boosting some of these voices and figuring things out. It's entrepreneurial material to some extent, but also within that, what Apple gets out of it versus like, I'm not sure what they want out of a content company. I really don't. I don't know. And in some ways, we might be antithetical to their business model. Honestly, I think Apple wants to sell iPhones. I think Amazon wants to sell toilet paper. Right. But that's what I mean, that it may not be in their interest to have a provocateur, but I do know they've been incredibly supportive and have given us the resources to do it."]

Kara Swisher: Well, until they didn't, right? So I don't know exactly what's happened here. So I'd be wary to say, I'd like to talk to the principals, but that was the word in Hollywood for sure. I was sort of waiting for him to get to China or things that they're uncomfortable with.

Scott Galloway: This is the same reason that Facebook's getting out of news. It's just on a risk-adjusted basis when you have other businesses. I mean, Apple is a $3 trillion market capitalization company and 95% of their products are produced in China. China makes no bones about saying your content and your views, we don't give a shit about the First Amendment. We have one party here. And if this party can be, it can swing back to the second party. If we're voted out of office, that's called revolution. And we end up hanging from telephone poles. So we take this stuff very seriously. We will oppress and put intimidation, economic intimidation on people who say things that are not in our interests. And Apple is in the business of producing devices, 95% of which or 90% of which are produced and manufactured in China. So they look at this and they go, we get it. We understand. I imagine they hated making this decision, but said, we got to be honest, boss, it sucks to be a grownup.

Kara Swisher: Have you noticed, everyone always says, everyone tries to excuse Elon Musk's behavior to say, he's got terrible impulse control.

Scott Galloway: Have I noticed? Yeah, I've noticed.

Kara Swisher: He's got terrible impulse control. But when it comes to China, he's very measured and thoughtful. He's like, "This is a difficult situation." And he stopped talking because his second biggest market is China. He's capable of control. So he's measured and has discretion when it involves his pocketbook. But when he knows he'll be protected by the First Amendment and red check trolls on his platform, he's very strident and has problems with impulse control.

Scott Galloway: But the interesting thing about Jon Stewart, first off, Jon Stewart is a gift to America and the West. He's just so insightful and courageous. And he softens the beach to change your mind with humor, which is the ultimate shelling of the beach to soften it such that you're open to changing your view. He can say things that are offensive to some people or that you might not agree with, but he gets away with it because of his art. And the reality is he could continue to do this show and have as much impact by just putting it on YouTube. I think he got a lot of money here and not a lot of, I think effort is what it will take. And I think he's kind of got a sweet life. I don't know. Apple, I can't imagine. I bet Apple said, "You're a flagship. We have more money than God. Here's 10 million bucks to host a round table once a week."

Kara Swisher: Yeah, I think more than that. I think he got a lot of money.

Scott Galloway: Yeah, I'm sure. I'm sure. And there's nothing wrong with that. He deserves to have a good life and have a lot of money. But if he's looking to continue to be a strong voice, he should. His interviews have gotten really good on this show.

Kara Swisher: I thought it was, I called him possibly irrelevant at the time because it was sort of not hitting all cylinders. And then it suddenly did. Some of those interviews he did were really powerful on big controversial topics. I was surprised Apple hadn't sort of been nervous before, but he couldn't get near China. He was doing stuff around book bans, whatever, a whole bunch of stuff.

Scott Galloway: Well, just some numbers. His first shows were viewed by 40,000 households. John Oliver's viewed by 850,000 households. The difference, though, is that John got traction. I bet quite a few of his clips got millions of views. That view he did of that representative or that elected official on gun control, that clip, everybody saw that. I mean, almost everybody.

Kara Swisher: Yeah, he did that several times on several topics. YouTube really is his distribution channel.

Scott Galloway: I would agree. Frankly, other than probably the 10 million bucks that Apple was paying him a year or more, in terms of his impact and his ability to reach people and influence them, if he wants, I mean, that's not an expensive show to produce.

Kara Swisher: No, I know. It'd be interesting. I do want him to come back and talk. I think he's super active around 9/11. He's about veterans and burn pits. First responders. He's done so much good work. I just want to find out what happened here. And I suspect it's a little more complex. Apple is much happier with shows like Ted Lasso.

Scott Galloway: The Morning Show.

Kara Swisher: Yeah.

Scott Galloway: Well, Ted, how can you not be happy with Ted Lasso?

Kara Swisher: I know. The Morning Show does hit some controversial topics. They're right about to go into abortion right now in the current season. And it's a little more edgy than you think, actually. I was surprised. There's an Elon Musk character on the show. It's played by Jon Hamm, of all people.

Scott Galloway: Really? I thought I couldn't figure out if that was Bezos or...

Kara Swisher: No, it's Musk.

Scott Galloway: I can't. It's the same Musk. I can't even focus on what he's saying. Jon Hamm is so dreamy. He's so handsome.

Kara Swisher: Oh, my gosh. Yeah, he's good. I think he's really good. We'll see where it goes. Anyway, Jon, come and talk. I'd love to talk to you some more.

Kara Swisher: Also, it's tough times for Tesla. Third quarter earnings down 37% from last year. Some troubling news, speaking of Elon, for the upcoming Cybertruck. On an earnings call with investors last week, Elon Musk seemed to be tempering expectations for the new vehicle. "We dug our own grave with Cybertruck," Elon reportedly said on the earnings call. It was a very erratic earnings call, highlighting production challenges and getting to cash flow positivity. Although we noted the demand was off the charts. Tesla announced a Cybertruck delivery event for November 30th. Maybe he's downplaying expectations. Who knows with this guy? The stock is down pretty significantly, and he spent the weekend speaking of dick jokes. He's like you, Dickipedia, and wondering why Wikipedia costs so much, just being an idiot. Could Cybertruck—

Scott Galloway: I think it's inappropriate when he says it. When I say it, it's funny.

Kara Swisher: I know. I have such a double standard. I don't know. Where is this? There's the Rivian is out. I see lots of them. The Ford F-150 Lightning is getting its problems in order. There's lots of choices here. And that thing is a choice. It's a choice to pick that car for sure.

Scott Galloway: Look, I just, and people remind me of this on Twitter and I'm not on, but I'm sure they still remind me 10,000 times a day. I think valuation and bottoms of valuation on companies ultimately rears its head in terms of stock price. And Ford trades at seven times in terms of enterprise value to EBITDA. And that is the stock price minus the debt, that valuation relative as a multiple of your profits. EBITDA is sort of a form of profits. At Ford, it's seven times. At GM, it's five times. At BMW, get this, it's four times. Tesla's multiple of enterprise value to EBITDA is 43 times.

Kara Swisher: Yeah.

Scott Galloway: And whenever I've had discussions with people, they want to immediately pivot to, "Oh, no, it's not a car company. It's a software company. Oh, no, it's an energy company." Because stockholders don't want to get into a discussion around the fact that this is metal being wrapped around four tires and a more innovative engine, the electric engine. This company deserves to be profitable. What they've done is inspiring. And I just think you're going to see the valuation come way down. And they are hitting the same issues of scale that any manufacturing or automobile company faces in that their margins are contracting, there's more competition, and it's hard to scale. It's not like a digital product where the marginal cost of production is near zero. You have to make these things. These are difficult, complex products. Anyways, but it's just the Cybertruck, I think it'll be interesting.

Kara Swisher: I have a bias. Did you put your name on the list or not? What do you think of it as a car? It looks really creepy looking, but whatever.

Scott Galloway: I think it looks like Battlestar Galactica meets Homer Simpson. I think it looks strange. I got on the list for a Rivian because I thought it looked pretty cool. But the Cybertruck to me just looks something out of a 1980s sci-fi movie. I don't get it.

Kara Swisher: Yeah, I don't know. I think there's probably a limited audience, but who knows? I just don't see a million people driving these things. It's a choice. Like, you know what I mean? It's like, okay, I'm going to take that looking car. And I'll tell you something weird. I think we've seen it too much. You think it's overexposed. I just have seen it. It's been around forever. Where's the freaking truck? Like, I've seen him throw things at it. I've seen him show it off. I've seen him drive it around town. But I'm like, everyone else has got their truck out. Let's go, dude.

Scott Galloway: There's still, though, this unique, and it's fairly new, peanut butter and chocolate to drive valuation of someone who's an iconic figure, who's a great storyteller slash visionary. And then using social media to massively increase your stock price, then getting access to cheaper capital, investing that cheaper capital, and then pulling away from the competition. One in three companies 20 years ago that went public were not profitable. Now two in three are not profitable. So the narrative is more important than the numbers. And to his credit, his narrative and his leveraging of social media, it's just unparalleled as evidenced by the fact that, I think 30 or 60 days ago, they put out this big press release announcing the Dojo supercomputer, leveraging AI, which helps gives them an advantage around modeling and creating scenarios around autonomous driving. The market goes, "Oh, wow, Elon Musk, AI," plus his ability to promote this on his social media channels. The core competence of CEOs now in the growth economy is storytelling. It's the ability to leverage these new mediums.

Kara Swisher: They're there. We'll see if people buy this truck. I just think I'm tired of it. I'm not saying it's warranted. I'm not saying it'll last. But I'm saying there's got to be actual sales here. No one gives a shit what Mary Barra says.

Scott Galloway: Right.

Kara Swisher: But they've got to be actual. Have her announce a supercomputer. I get it. No one cares. He's got to sell the cars and he's got to make them profitable. That's it. I don't think his narrative is as flexible as it was. But we'll see.

Scott Galloway: Yeah, I'll tell you what he should do. He should buy Jon Hamm and have Jon Hamm play him. That's what he should do. And then he'll be fine. I'm watching Mad Men with my 16-year-old, and all I keep doing is pausing it and going, "Just so you know, at work, that is not appropriate behavior. You're not supposed to do that. This is a show about what you're not supposed to do as a boss."

Kara Swisher: Anyway, let's get to our first big story. The Supreme Court is temporarily allowing the Biden administration to continue efforts to get social media companies to remove misleading posts. Late last week, the Supreme Court announced it was pausing an appeals court ruling that limited the government's ability to communicate with these companies. The court has agreed to hear the case this term in addition to several other social media First Amendment cases already on the docket. It's a win for the Biden administration, but I don't know in combating misinformation, at least for now. The original lawsuit claims that government officials censored protected speech by urging tech companies to modify posts involving COVID and the election. The case has already seen lots of back and forths with various appeals and injunctions. Missouri's attorney general, one of the parties who brought the suit, called the government's actions "the worst First Amendment violation in our nation's history." I don't know. It's interesting. What's the best argument for the government to make?

Kara Swisher: Well, the best argument is that we have First Amendment rights. And if we pass a law that says that social media firms — I mean, this is so ironic because Congress passed a law that said they're not subject to the same scrutiny of the content they put out as every other media company, called Section 230. But I would imagine the defense for the White House, the legal claim, is if we pass a law saying you can't say this stuff, then yeah, that's a violation of the First Amendment, which is the government passing a law that restricts free speech. But I think they have some rights to free speech and can say to these companies, "When you are saying these things and they get algorithmically elevated, and both of us, including the executives of your firm, acknowledge that there's no evidence that mRNA vaccines alter your DNA, can we work together to stop the spread of this obviously false information that is creating greater levels of death, disease, and disability? When there is a deep fake of Nancy Pelosi that makes her appear inebriated, can we all agree that this is fake, this is bad for voters, this is bad for America, and we'd like to know what you're doing to stop this?" Isn't that their First Amendment right?

Scott Galloway: It is not, Kara. You are a terrible lawyer. No. It's the government. They're speaking as the government, not as themselves. The government is not supposed to do that. It looks like it's quashing free speech.

Kara Swisher: I think that's their argument. Right. I think where the argument is... So even if it's not a law, you're violating the First Amendment when you're the White House.

Scott Galloway: You could be. You could be. I think the Supreme Court is exactly who has to weigh in here.

Kara Swisher: But, you know, the conservatives are also attacking, besides trying to silence academics as we've talked about before, the agency CISA, the Cybersecurity and Infrastructure Security Agency. I interviewed Jen Easterly, who's running it. This is the group that's trying to protect elections. The guy that Trump fired for saying the election wasn't stolen, if you remember that. They're trying to attack it, and its funding, the hard right Republicans. They think they've gone too far and are looking for ways to rein it in. This is very typical Rand Paul, but this is what he says: "CISA has blatantly violated the First Amendment and colluded with big tech to censor the speech of ordinary Americans." They're going to do some damage here.

Scott Galloway: Can I just ask you a question? And I'm generally asking for illumination, not to make a statement. Everybody talks about the power of the presidency. The most powerful thing about the presidency is the bully pulpit. And that is his — and it's always been a him to date — their ability to say something that endorses, cajoles, shames, sets a vision, tries to influence people and organizations' behavior. So is the basic argument here that the bully pulpit is fine, but if you're not doing it in public, you're doing it directly to a company, it's no longer the bully pulpit, it's a violation of the First Amendment?

Kara Swisher: Yeah. Yes, it could be. If it's the government speaking, I don't know. I think that's why it's got to go to the Supreme Court. Other cases on the court docket involve social media and the First Amendment. They may call for sweeping changes. Other cases involve whether public officials can block people on social media and whether state laws can regulate how social media companies moderate content. We do have an inkling of how some of the justices might approach the White House case based on this latest ruling. But Justices Alito, Thomas, and Gorsuch publicly dissented on the court's decision, with Alito calling out government censorship of private speech. They are on this case. They're not giving up. It has the same vibe as when they went after abortion and everything else.

Scott Galloway: They're not just the same group of people constantly bitching and moaning that their speech is being censored?

Kara Swisher: Yes, but I think it's a coordinated effort by a lot of these groups to hit academics, to hit government, to hit anybody who questions anything, because they do not want a government agency declaring an election free and clear, even though that's the job of the government. We have electoral boards. Isn't that what they're supposed to do?

Scott Galloway: I know, but CISA has done invaluable work, and Trump fired him anyway, and they still do invaluable work. But all these Republicans are bowing out of their help around election security, to their discredit. And now they're sort of crawling back a little bit, but they have to make these things about free speech.

Kara Swisher: We'll see. It's an important case at the moment.

Scott Galloway: It is, all of these are. And our Supreme Court should be the one to weigh in.

Kara Swisher: And I'm scared that they're going to weigh in in the wrong way, but we'll see. All right, Scott, let's go on a quick break. When we come back, CEOs and companies feel the pressure to weigh in on the Israel-Hamas war. We'll speak with a friend of Pivot, Automattic CEO Matt Mullenweg, who has some news to share about his company.

[Break]

Kara Swisher: Scott, we're back with a continuing debate over whether companies should speak out about the Israel war. We're seeing the consequences of doing so with a number of companies, CEOs, and entertainers this week. Let's start with an update to the Web Summit story we discussed last week. CEO Paddy Cosgrave announced over the weekend he's stepping down. This is after the backlash of his comments accusing Israel of committing war crimes. Scott, did the news of his resignation change your decision to pull out of Web Summit? Are you going now or what?

Scott Galloway: I was called by a couple of media outlets and I said, "I have no comment. My actions speak for themselves." And they said, "Well, off the record, are you going?" I'm like, absolutely not. And they said, "Why?" And I'm like, "Because this is meaningless." And I think it's an interesting lesson in corporate governance that the media has gone for this head fake of, "Oh, he's stepping down." Let me be clear. When you own 82% of a small company, stepping down as CEO is absolutely meaningless. All it means is he can go next week, he can get 82% of the profits, he's still in charge, he's still in control of the company. His card will say founder or chairman and not CEO.

Kara Swisher: An analog would be, remember all the shit that Chamath Palihapitiya and the owner of CrossFit, the CEO got a lot of grief for making what people perceived as insensitive comments?

Scott Galloway: Yeah, yeah.

Kara Swisher: They didn't ask Chamath to change his title from owner to shareholder. They said, "You need to sell your stake." I think the NBA said, "You got to sell your stake." They didn't tell the CEO of CrossFit, "Change your title to chairman and all is forgiven." They made him sell his stake.

Scott Galloway: And I just find it... When I managed small companies about the same size, I would immediately, as soon as someone was great and I was worried about them leaving, who was a senior person, I'd say, "You be CEO," because titles matter to people. But I was always in charge. You know why? I was the largest shareholder, and I controlled the board. I controlled all decisions. And be clear, Paddy Cosgrave — and you may decide that's enough, the public embarrassment, you might decide to forgive him, fine. But be clear, nothing has changed here. Nothing. He's still in charge. He will still get 82% of the profits. He will still make all the decisions. My bet is that whoever was actually doing all the work, they just give him or her the CEO title now. But I just find it hilarious that the media is acting as if this is some sort of change in anything. It's laughable.

Kara Swisher: I agree. It's laughable. When you own 82% of the company, if Bob Iger stepped down as CEO, he loses his compensation, he loses his authority. That's a big deal. When you're the 82% owner of a private company, the only title that matters is largest shareholder. You can call yourself General Consulate of Australia. It doesn't mean a damn thing.

Scott Galloway: No one doubts who's in charge of News Corp, the guy who controls all the voting shares.

Kara Swisher: Yeah, it's the Rupert Murdoch test. Is he gone? No, he's not gone after all the shit. The Dominion, the sexual harassment lawsuits. Oh my God, you're right. You're 100% right. It's risible. It's risible. Look up that word. It's a good word. Laughable is what it means. McDonald's is finding itself also in a difficult situation with franchises taking sides in the war. Early this month, McDonald's franchise in Israel said it would provide free meals to Israeli soldiers. Some McDonald's franchises in the Middle East have made statements distancing themselves from the Israeli franchise. Others made donations to Gaza in solidarity with Palestinians. McDonald's Corporation has said the company's top priority is ensuring the safety of its people and teams on the ground. Employees at Google, Meta, and Amazon are pushing management to speak out against the war, according to a report in The Washington Post. There was just today, a story about a woman at CAA who had a post criticizing Israel. She has big clients. Her name's Maha Dakhil. I'm not sure I'm pronouncing that right. Her clients include Tom Cruise, Natalie Portman, Reese Witherspoon, Anne Hathaway. She came under scrutiny, according to The Hollywood Reporter, for an Instagram post that had been highly critical of Israel and referenced genocide. The post was later deleted, and the agent apologized for the remarks, but she's resigning from her leadership role in the division. Around 20% of the largest companies in the S&P have issued formal statements on the Israel-Hamas war as of last week, according to Bloomberg. Nearly all of those 100 companies released public statements on Russia-Ukraine. So they're very wary here. We'll get to Dave Chappelle in a second, but first talk about companies very briefly.

Scott Galloway: It's situational. And the reason why you have a kitchen cabinet and you have a board of directors and you have thoughtful people, hopefully you surround yourself with, is one situation is not like the other. I don't think a small company hosting a web event in Lisbon has any obligation or, quite frankly, any rationale to weigh in here, especially when your comments are going to be seen in terms of the timing as being an apologist for terrorism. And on a shareholder basis, my advice to companies on political issues when I'm on the board is, unless we have operations directly impacted by this, unless we have people on the ground being impacted by this, unless it's a no-brainer — I think when Russia invades Ukraine and starts bombing maternity wards, I think that's a no-brainer. But the problem is when you take a political stand as the CEO, you're implicitly or explicitly putting pressure on your employees to agree with you. And if they don't agree with you, to be silenced. So my advice as someone on the board who's thinking on a risk-adjusted basis about shareholders, if you're McDonald's, I'm not sure you can avoid not making a statement about this because you have a big business in Israel.

Kara Swisher: Well, I feel for them. I don't want to pretend that I understand exactly what they should do. My advice to them would be, to the extent you can, stay out of this shit. You know who did a great job, I have to say?

Scott Galloway: Who's that?

Kara Swisher: Ziggy Marley said, "Free Gaza from Hamas." I was like, that's a very clear statement. And he condemned anti-Semitism and the attacks. You know, Biden's coming under increasing pressure from Arab Americans, too, as Israel prepares to invade. So this has lots of chapters for these companies. And then you have another person who, of course, when I saw it, I was like, of course he had to say something. Comedian Dave Chappelle had a show in Boston where he condemned Hamas, but also reportedly criticized what he called the war crimes in Gaza. This led to both tears and walkouts. I just don't think there's a particularly good answer in this situation, unfortunately, especially as things unfold. If all of a sudden Israel starts to get really aggressive in this — and it is an information war, and they have been aggressive — I see I'm correcting myself because I'm like, I'm not thinking it through.

Scott Galloway: Yeah. I want to channel my Jeffrey Sonnenfeld here or my Sam Harris. And that is when a comedian or anyone else says "this, but also this," I just don't think the moral equivalence exists here. They accused Israel of war crimes. And here's the thing: that is a damaging accusation because in Israel, there are war crimes. If you take hostages, that is a war crime. If you kill non-combatants, that is a war crime. If you take video of you killing a son and then you send the video to all of the son's contacts on his phone, including his parents, that is a war crime. If you murder and mutilate children in front of their parents, and then kill the parents, you force them to witness this before you murder them, that is a war crime. For Hamas, there is no such thing as a war crime. That is their approach to combat. And so when people say Israel is guilty of war crimes, they are acknowledging that Israel — and assuming that damages them and that's an insult — they are acknowledging that Israel lives in a superior society than jihadist fundamentalists who don't understand their approach to combat is war crime. And so to pretend that these two have any sort of moral equivalence is, quite frankly, outrageous and ignorant.

Kara Swisher: Well, we'll see where it goes. We've been talking a lot about misinformation on social media with the war. I assembled a panel this week to talk about it, and I want to play a clip from this BBC verified journalist, because you have to remember, there are people out there trying very hard to get it right, to get people good information, even if good information makes it really hard to decide what to say. Let's listen.

[Clip plays: BBC Verified Journalist: What we want to know, first of all, when was this piece of video filmed? Where does it come from? Who's the original source? Can we actually source the video to the person who filmed it, the platform where it was first shared? Because you put something on Telegram or on WhatsApp, then it travels across platforms. So just because you see it on TikTok or on Instagram doesn't mean that's where it came from. You have to source it. You have to find out who filmed this piece of footage, who first posted it online, and then you have to contact them and talk to them because they probably have more context. Then the second thing is, is this actually the entire footage? Is there a longer version? Have other people been at the scene where this video was filmed? Has it been edited?]

Kara Swisher: I appreciate journalists trying to do that. I still think even correcting the misinformation is... Still, you then get, what do you think, right? Even if you know exactly what's right. As you were noting, there are lots of reports about what happened on the attack on the Israeli citizens. A majority of viral misinformation about the Hamas war on X is being pushed by verified users, by the way, according to a recent study.

Scott Galloway: When you say verified, you mean people with a troll check, a blue check?

Kara Swisher: Yeah, troll check. Researchers analyzed the 250 most engaged posts in the first week of the war and found that verified accounts were responsible for 75% of that.

Scott Galloway: So let's just be clear. Verified account means you've paid $9 in some cases to spread misinformation or elevate your content to have some veracity, which you have not earned on your own.

Kara Swisher: Yeah, I agree. So it's a big information mess, which I think is the whole point. Let me just ask you lastly to bring in our guests in a minute. You pause, don't you, before you say things? Or maybe you don't because you have to be... It's not for fear. It's you don't want to upset.

Scott Galloway: I pause because I don't want to upset people. I'm like, I got to be thoughtful here rather than knee-jerk. Say something off the top of your head that you say so much in life. I think that's the problem I have more than anything.

Kara Swisher: I don't know. You don't want to...

Scott Galloway: Look, I'm conflicted here. I think if you have economic security and people who love you unconditionally, you have a moral obligation to speak your mind and speak the truth. Because I do find that over the last 10 or 20 years in academia and in media, there is a certain narrative that has emerged. It's like, "This is the narrative you're supposed to adopt." And if you veer outside of that narrative, you risk your economic livelihood or being shamed. And as a result, when we all start barking up the same tree, we get stupid. So I do think you have an obligation to speak your mind. I think on issues like this, to take a breath and try and understand both sides. Fareed Zakaria, similar to what you said about Ziggy Marley. When I interviewed Fareed Zakaria, he kind of summed it up perfectly in one very simple statement. He said, "I have a lot of empathy and sympathy for the people of Gaza. I have no empathy or less empathy and sympathy for Hamas." That to me sort of summarized it. To just be able to articulate and to be able to see the nuance of the situation here. But I don't buy the fact that NYU students, the fact that young people have conflated the struggles of people in Gaza with civil rights. I think they are incorrect. I don't... you can call them strident, but I think this is a situation here where there is a wrong and a right. And let me be clear, there are different forms of evil. There are different forms of wrong. I have said that far policies in Israel have done them no favor. You could argue that they are inhumane. I think that Netanyahu is a criminal. But you have to call out... there are shades of moral ambiguity, but there is a right and a wrong here. And I try to be... you don't want to diminish people. You don't want to make people feel bad. But what I see here is just a disturbing virus that is airborne that you can't see that is rooted in anti-Semitism. And I'm not trying to sound holier than thou here. On a risk-adjusted basis, it's not a smart idea. If I had a big company and I was the CEO, I don't think I would say these things publicly because I would be assuming that everybody feels the same way as I do. And I would be taking unnecessary risks with other people's economic livelihood. But I'm a 58-year-old that has a small company who has been blessed by America, who has been blessed by people who have risked life and limb to push back on anti-Semitism. So we have an obligation to speak up.

Kara Swisher: Yeah, I think that's well said. Well said. Anyway, let's bring in our friend of Pivot. Matt Mullenweg is the CEO of Automattic and co-founder of WordPress. In addition to WordPress, the Automattic portfolio includes Tumblr, Longreads, Pocket Casts, and more. Matt, it's good to see you. How are you doing?

Matt Mullenweg: Likewise. This is a little earlier than I'm used to getting up, but for y'all, happy to.

Kara Swisher: Yeah, I'm in San Francisco, so it's early for me too. For people that don't know, we started All Things D and Recode on WordPress. And I know Matt very well. He was a tremendous partner. And it was early. We were an early partner of yours. There were a lot of different platforms, and we just thought you had the highest quality platform. And you were always an excellent partner trying to figure out how to expand our little blog experiment.

Scott Galloway: And Scott, I think you use WordPress as well. No Mercy, No Malice.

Matt Mullenweg: Oh, dude, you owe me lunch and drinks.

Scott Galloway: We have been using WordPress across everything. You are, I mean, you've done what few people have done, and that is you've taken on the big guys and you're winning.

Kara Swisher: Well, that's what we're going to talk about. So this is our first Pivot exclusive. Talk about this acquisition of what you're buying and why, because it's in that vein of what Scott absolutely just said.

Matt Mullenweg: Yeah, and it's a new area for us. So Automattic, which is the holding company behind WordPress.com, WordPress Enterprise, VIP, et cetera, has worked in publishing for a while. We moved into commerce in 2016 with WooCommerce, which is like open source Shopify. And now we're going into messaging, which is a much more competitive area in a lot of ways. So we're doing this with an acquisition. It's a company called Texts.com. And it is a desktop app which has sort of reverse engineered all the protocols for all the different messaging apps. So it brings in iMessage, WhatsApp, Signal, Telegram, LinkedIn DM, Instagram DM, Messenger, all these different things into one interface, one program as a power user tool, kind of like a Superhuman for messaging. And yeah, we are announcing it on this pod. So thank you so much.

Kara Swisher: So why did you buy this? From your perspective, why does that help you? You've talked in the past about making Automattic the quote "Berkshire Hathaway of the internet." What do you mean by that? And what's the importance of doing this and sort of providing a smaller company rather than the bigs, I assume?

Matt Mullenweg: Some of it was born out of personal frustration. So I don't know if you have these multiple messenger apps. It's hard to track who you messaged on which one and everything like that. I found myself sort of getting very behind. And so I went out in the market and actually Automattic ended up making some investments in this space over the last few years, including in Element, which is a Matrix company, Beeper, which is another app which has some similar things but differently. And I came across Texts and was really just taken with the product. I also, I'd say finally, that I really enjoy working in areas that I feel like we can spend the rest of our lives on. And that are important to kind of human rights for freedom. Because as you know, everything we do is very user-centric and open source. So publishing, commerce, messaging, between those three, you cover a lot of the human condition. And they're complementary because, of course, when you publish, you want distribution for it. And so being able to work with all the different networks seems great. So the final reason is the regulatory framework. So products like this, I think, have a big risk of being shut down or blocked by the different networks.

Kara Swisher: The bigger ones?

Matt Mullenweg: Meaning the bigger ones have outsized control over people, correct. They could do subtle things like just block your clients or make it so your messages don't send. And I think right now with the regulatory frameworks, the antitrust frameworks, particularly the UK CMA, what's going on with the EU regulation, it would be a bad look for Apple, Google, Meta to block this because it's completely user-centric and it maintains 100% encryption. So it runs 100% client-side. So it's just as secure as their desktop apps.

Scott Galloway: Right, but you're fighting against bigger players, right? That can do what they want.

Matt Mullenweg: I would say we're not fighting per se in that they might not love this, but it's supporting all the networks. So it's not like an alternative network. So if anything, it'll make it maybe easier for people to stay connected or keep up with their WhatsApps or their LinkedIn DMs. Particularly, I think channels you might not check as much or they don't have a great interface, like a LinkedIn DM, which kind of gets a bad rep, but actually it can be really, really interesting. And sometimes I'll have like a gem in there and I just miss it because I don't log into LinkedIn very much.

Scott Galloway: Whenever I'm in a VC meeting and someone's pitching the company, if it looks like it's directly competing against anyone in big tech, the VC is like, "We're out. You can't compete against these guys." And you are. You're competing against players of much deeper pockets of capital who can bundle this with software that's everywhere. Like when you're in a strategy meeting thinking, okay, every day we compete against Microsoft, every day we compete against Adobe. What is it that you think entrepreneurs and companies like yours can bring to compete against the big players and actually not only survive, but thrive?

Matt Mullenweg: First is speed, and that's probably the most important. So big companies, with rare exceptions, typically have trouble moving as fast. Second is focus. So focus, I would say... you know, messaging is very, very important, but look how much trouble Google's had getting it right with infinite money, infinite resources. I think some related to focus is also the incentives of the managers or the people kind of running different divisions in these companies. And then finally, how can you use their weight or their size or their business model against them? So for example, with Tumblr, which is one of our products, all the other social networks are really dependent on advertising. So what we tried to do in the beginning after we bought it was create like a non-ad upgrade. So with messaging, all the big networks are really incentivized to get you to use their thing and they don't want you using anyone else. So they do various things to try to lock you in. Most notoriously, I would say iMessage, which of course is kind of Mac and iOS only. And they don't allow interop. In fact, in the US, there's a whole thing where teenagers get excluded from chat groups because they don't want to be the green bubble in the group. But we can say, "Hey, let's support all of this," which I would say is actually the far more user and customer-centric version because as users, we use all these things. And so the companies want to pretend you don't, but we all do. So that's also something we've taken a big approach for. So we just try to integrate with everything. Open source also makes that easy because people can write plugins for anything. So I think if you keep those three things in mind, you can compete with the big guys and in fact thrive.

Kara Swisher: Because they're all trying to keep people in there. They used to call it a walled garden, essentially, trying to keep people using their products over others. They're not trying to advantage the consumer. They're trying to advantage themselves. I'm curious, how are people using Tumblr? Why do you think they're still using it? And what are they using it for?

Kara Swisher: For better or worse, it has a little bit of a niche thing going for it, which is it's primarily kids under 25, which I actually wouldn't have expected before we bought it. And they like a few things there. One, it can be anonymous by default. So especially as you're growing up, you can kind of try on different identities. It's not attached to your name forever and ever. People love that they can follow fandoms or fan fiction is really big on there. Art and artists. This would be a much more creative network. And then finally, the other thing about it being mostly young people is their parents aren't on it and their teachers aren't on it.

Scott Galloway: So that's, obviously that doesn't work forever. If we like 10X Tumblr, you'd have a lot more parents and teachers on it. But today where it is in sort of like the 15, 20 million MAU range, it tends to be like-

Kara Swisher: What did you pay for it? What did you pay for it?

Scott Galloway: I love that question.

Kara Swisher: What did you pay for it? Like $3 million?

Matt Mullenweg: Yeah, we paid a de minimis amount. I think it's been reported $3 million, but it was free like a puppy. But the more interesting thing was a few years before that Marissa Mayer and Yahoo paid a billion for it.

Scott Galloway: So you bought it for 0% of the purchase price. I would argue that is arguably the best and the worst acquisition in history across one company. And you're on the right side of that trade.

Matt Mullenweg: Yeah. Yeah. Although he said it's like having a puppy, like they chew the shoes, right? It was kind of... usually in acquisitions, you have something where there's indemnifications or guarantees. We took on all the liabilities, all the lawsuits, all the everything that was pending with Tumblr. And we've invested a lot in it over the years. So internally, we actually budgeted a pretty big amount for what we'd need to invest to turn it around.

Kara Swisher: Right, right. So one of the things that's involved in this one and others, you're a big proponent of open source, whether it's on your platforms or AI. Explain why you think it's so important. Automattic launched an AI writing assistant for WordPress in June that can generate and edit text, for example. Explain where you are right now on open sourcing, because it does feel like the bigger players continue to grab all the good bits, essentially. Although it's interesting, in AI, that Meta has taken a more open source approach.

Matt Mullenweg: I believe it's not hard to see how more and more of our lives are influenced or actually kind of run by the software that we use, from everything, what defaults are in operating systems, what websites work or not on the web. Software, open source, particularly the GPL, which is the license we use for pretty much everything, comes with a bill of rights. For most software, you click through, and when you click on it, it's like, here's all the things you can't do, and here's how the company is protected, not you. The GPL gives four freedoms that are user-centric, that protect you. It's the freedom to use it for any purpose, the freedom to see how it works, the freedom to modify it, and the freedom to redistribute those modifications. This kind of Bill of Rights for software gives us agency, autonomy, allows us to be sovereign in our digital choices. As more and more of our lives become dictated by that, we're going to become less and less free if we're using proprietary software for the majority of our software. Now most people don't care about what I just said. So with WordPress, we were like, I was radicalized to this, open source is like my religion. But I was like, no one cares. So we just need to make the best software. So the approach we try to create is we just try to use these principles to create software that is super user centric. If we create a better user experience, people choose it. They might not know they're getting this thing that makes the world more free, the web more open, but they will. And if enough people do it, it actually influences the competition. We'll make the proprietary folks open up a bit more. For example, WordPress has a really open import and export format. We've tried to make it easy to leave. As Sting says, if you love someone, set them free. So this format is actually supported by all of our proprietary competitors like Wix and Squarespace, because it became the industry standard. I think that's a very powerful way that even if you're not a majority market player, you can influence the proprietary competitors to be more open.

Kara Swisher: Who do you see in terms of the big players? Who kind of keeps you up at night? If there was a big player, you thought, is it Adobe? Is it Microsoft? Who do you look up to and admire and think has the kind of power to come for you, if you will?

Matt Mullenweg: One thing I do think about is we try not to go head to head in a place where we don't have some competitive advantage. A good example of this is advertising. We do very little advertising. We try to allow word of mouth and community to spread our products. Partially because when we did do a lot of advertising, all of our competitors had so much more money than us. That kind of head to head fight, they could just outspend us by hundreds of millions of dollars. That's tough. With the big tech, the Microsofts, the Googles, Metas, we both compete in some areas, but we also partner in so many others. I do think that particularly with messaging, although they might not be able to do this themselves, this kind of multi-client thing, I think they're actually going to be happy that someone is doing it and someone independent, because it's something that they probably will need to do anyway. They're going to need to open up with coming regulation over the next year or two. This will actually be something they can point to and say, hey, we're glad this exists. I guess the final person who's intimated they might be working on the same thing, although it's just a tweet and you never know what to do with these, is Elon Musk.

Kara Swisher: Yeah.

Scott Galloway: Oh, yay.

Matt Mullenweg: Someone... he's a complicated Shakespearean character, but yeah. A head to head competition... I don't think I would ever go into the solar or the space rocket space because he is fiercely competitive and executed well in those areas over many years. So he would have a... this is this everything app or that everything gets joined at Twitter? It's hard to tell. I will say that in the software side of things, I don't think he's been as impressive so far as the hardware side.

Kara Swisher: You're so kind.

Scott Galloway: He's so nice.

Kara Swisher: He hasn't been as successful in the software side.

Scott Galloway: Yeah, that's an understatement.

Kara Swisher: But you did buy, you became a Blue Check subscriber. Not one of the trolls because you're not like that, but you wanted to see how the subscriptions work is what you tweeted, actually, which was interesting.

Matt Mullenweg: To be honest, a lot of what he's been doing with Twitter are things we had already tried with Tumblr. So I was very curious to see what the user flow was like. And honestly, I'm still a Twitter user. So I think I do want to normalize that we should be paying more for the services we use versus just expecting to get them for free, and then our data or our usage being sold to advertisers. I think it's a better business model to launch.

Kara Swisher: Most people don't disagree with that. It's a question of who you want to give your data to or who you want to have affiliated with. You didn't ever think of doing a social network when Twitter started to go off the rails a little bit here? Did you think about doing that rather than a texting platform?

Matt Mullenweg: Well, we bought Tumblr in 2019.

Kara Swisher: Yeah, it's not the same. It's sort of the same. It's not used the same. The user base is very different.

Matt Mullenweg: But if you look at the fundamental primitives of the capabilities, you could use Tumblr just like Twitter. And it was in kind of a rough spot. Since the acquisition, when it was bought for a billion dollars, it was kind of on a similar trajectory as Instagram and was actually purchased for a similar amount. I think when Yahoo got distracted with activist investors and Alibaba and all this other stuff, they didn't focus on it. That's when it withered on the vine. Then they got sold twice, the merger with AOL, the sale to Verizon. So it ended up without the focus. It was definitely a turnaround when we brought it in. But I wanted to see, could we do upgrades? Could we fix the algorithm, give people choice in the algorithm? So a lot of the same ideas. And also very humbling, most of that stuff we did did not work. People say they want to pay, almost no one does.

Kara Swisher: Yeah, that's true. So Matt, you're 39, really a young man. You're financially secure. You've built a great company. What box do you still want to check here other than the success of Automattic? What would you like to accomplish over the next 10 or 20 years?

Matt Mullenweg: First and foremost, I want to work on open source the rest of my life. To the extent I have a creative window when I have energy and the ability to work really hard on things, I want all the energy to go into things that are open source.

Kara Swisher: I understand you're passionate about open source, but what does success look like for Matt as a citizen?

Matt Mullenweg: When you use the word citizen, it reminds me of how I could contribute particularly to where I live, which is America. When I think there, I think philanthropy. Starting to do more in Houston, my hometown. I've done a lot in San Francisco, but not as much in Houston. Something I've been personally trying to learn more about is cybersecurity, which was kind of when I was young, I was in the hacker world. I just joined a board of a company called Field Effect in Canada to learn more about both the defensive and offensive side of cybersecurity. I do feel like over the next 10 or 15 years, that's going to be one of the major areas of great power conflict. It's already happening today, just behind the scenes. There's a digital Hiroshima once a week across major governments and companies. If there ever were a call to serve the country, I'm not good at most things. They don't need me on most things, but perhaps I could contribute on a cyber side.

Kara Swisher: How do you look at the current moment? Because here you're working with a young entrepreneur. I find young entrepreneurs a little more global, a little more tolerant, et cetera. How do you look at where everything has ended up?

Matt Mullenweg: I think why... I think Scott, you might've said this, like we should be slow to judge, quick to forgive. I totally messed up. There are examples. When I had coronavirus or a fever and I got spicy on Twitter, I only deleted a few tweets in my life, but I definitely made those mistakes where I said something I regretted later. Just remembering that that happens. What do I try to do? I try to blog more. I find that the process of writing to my site, ma.tt, which is my WordPress blog, slows you down a little bit and it doesn't have the feedback loops of a Twitter or a mailing list. Leading by example. We've been a big advocate of distributed work. We've been fully remote since 2005.

Kara Swisher: You have. Both pre and post COVID leading for that.

Matt Mullenweg: And that leading by example opened up the market for a lot of other companies to be distributed as well. Now it's kind of a standard thing. Most startups are. But prior, when we were early, it was almost impossible to get funding. VCs didn't believe you could build a big company like it. Having something where people could point to and say, hey, Automattic has 2,000 people. GitLab, which I was on the board of for a little while, it's a public company, $7 billion. Those examples make it a lot easier for future generations, future companies to follow that. I know it's overstated, but I think first principles thinking, particularly with moral sides of things, leads you to interesting areas. One example where we were totally wrong is we used to pay people in different countries or different cities in America different pay scales. In 2011, 2012, my colleagues, the employees of Automattic, started coming to me and saying, hey, I'm doing the same work as this other person. Why am I getting paid less by currency or cost of living? At the beginning, I had all the standard explanations, cost of living, the best prices, whatever. But it really haunted me. I started thinking, well, past 50 years of America, we've been saying same pay for same work. I'm not going to pay a man and woman differently or people of a different skin color. Why am I paying someone waking up or going to sleep in Pakistan or India differently than someone doing the exact same work in California? So we shifted that. It took a year or two because you can't do it all at once with finances. But we got to a place where we're same pay for same work globally, some variation in the short term with currency swings, but we always catch that up. That helped our hiring so much. All of a sudden, if you're making way more in Brazil, what are you going to do? You're going to tell the smartest people you know, the best engineers in Brazil, hey, go work for this company. They'll pay you way more than local competitors or even what Google or Facebook will in that same country.

Scott Galloway: You're a baller, Matt. I never would use that word for Matt.

Kara Swisher: Anyway, Matt, thank you so much. And again, it's texts.com. And it'll be rolling out a mobile thing. I'm excited to try it. It'll be interesting. You make great products. And thank you for all the stuff you did for us. I never thanked you, I guess, but thank you. Keep being you, my brother. You're doing great work.

Matt Mullenweg: Thank you both.

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

[Ad break]

Kara Swisher: Okay Scott, let's hear some wins and fails. Would you like to go first?

Scott Galloway: You go first, Kara.

Kara Swisher: I have to say The Morning Show is really good. I hate to say it.

Scott Galloway: It's funny. I've been watching that too.

Kara Swisher: Oh, together. We should watch it together and talk on the phone. I really think it's very spicy this season and really fun to watch with a really high-level group of people. Jennifer Aniston's great. Reese Witherspoon's great. The whole cast is great, some of which are not well-known actors like Jon Hamm, etc.

Scott Galloway: Who plays the chairwoman?

Kara Swisher: I ask that because she's a lesbian and I assume that all lesbians know each other.

Scott Galloway: She's outstanding.

Kara Swisher: I do. It's Holland Taylor.

Scott Galloway: Holland Taylor?

Kara Swisher: Yeah.

Scott Galloway: When she comes on that screen, I mean, she's a tiny woman in her 70s and she just owns the screen.

Kara Swisher: She is very good. Yeah, she's been with Sarah Paulson for a long, long time. And she's on a bunch of stuff. She's been in The Morning Show. She's on The Chair on Netflix. She's amazing. I love Holland Taylor. That's another win. You know what I think of when I watch that show? I am fascinated that Apple did it. It literally drips money.

Scott Galloway: It does. The production values there are just like, they clearly said to them, we want an amazing show. This is going to be a tentpole for Apple. And by the way, money's no problem. And not only that, it all shows up on the screen.

Kara Swisher: It really does. They do a really great job. I'll go to my fail in a minute. What is your win besides my win?

Scott Galloway: I just wanted to bring some attention to some young podcasters. A guy named Stephen Bartlett, Diary of a CEO, this 31-year-old kid out of the UK. Just such an impressive young man. He interviews CEOs. The thing I love about his podcast is he's putting on a master class on innovation around podcasts. I've done his podcast and he has these cameras rotating and he'll travel to LA to interview people in person. Then he does an amazing job with editing and post-production. He's just such an innovator, really young, doing an amazing job. From a standing start, he's now one of the biggest podcasts in the world. He's kind of a celebrity in London. Anyway, Stephen Bartlett, Diary of a CEO. A guy named Chris Williamson, another young man. He hosts something called Modern Wisdom. He's really courageous. He's been talking, before it was kind of cool, about some of the challenges struggling young men face. He's also this kid who was sort of a party boy, and he'll acknowledge that. Then he went very deep inside himself, a lot of meditation, a lot of work on himself, as he describes it. He kind of came out as someone who was really interested in ideas and leadership, and he started this podcast called Modern Wisdom, and it's doing really well. He focuses on the struggles that young men are facing in what I think is a very courageous and sometimes controversial way. Finally, this podcast, Young and Profiting, another young woman named Hala Taha. Hala's made some comments about the conflict in the Middle East, which I vehemently disagree with, but she does it in a way that I think she has personal connection to, and I think she's very raw and authentic about it. Her podcast talks about young people in business. She's doing really well. It's a very well done podcast. Anyways, my wins are these young podcasters doing interesting things, being very innovative, very courageous. And then my fail is just the media's head fake around that there's been any change. They think that someone gives up a title when they own and control the whole company, and they think that that has any sort of meaning. It just struck me as so hilarious that the business media and the media is taking Pat's quote unquote resignation as CEO as anything meaningful. It just struck me as, do these people not understand power and shareholder rights and governance? I think the media just totally missed this one. Anyways, those are my wins and my fails.

Kara Swisher: I have a lot of fails actually this week, but I think probably, you know, I was thinking of these deals they made with Sidney Powell and Ken, is it Cheeseborough? I call him Cheeseborough. I don't care, Chesborough. They better testify to something pretty significant. I think every one of these January 6th people should go into jail.

Scott Galloway: You think they're getting off too easy?

Kara Swisher: I do. I feel like maybe I don't know. I just want more insight into what's happening. Look, I think those people who went into the Capitol deserve the jail sentences, but it should be equal on some level. And these two are the ringleaders as far as I can tell, crazy, one particularly crazy, Sidney Powell. So I just feel like, okay, you better start talking and not be a waste of the largesse of the government on this thing. I just worry it could create even more cynicism about this whole thing. And obviously the big cheese is Trump. I assume that's why they're doing what they're doing. It's definitely worrisome to me, as is all politics right now. Congress continues not to be able to meet. I was heartened by Mitch McConnell boosting the Biden administration's attempts to pass these bills, these foreign aid bills. That showed some bipartisanship, which I was surprised and happy that he did that. He did the right thing in that regard. But we'll see if the House can get together. So I just want people not to hate on government. And sometimes I'm like, oh, can you let's hope that it matters what the deals they've done, the deals that are being done right now.

Scott Galloway: I have faith that they wouldn't. I mean, to your point, it feels to me that they're getting off easy. They're pleading to crimes that I don't believe will involve the prospect of jail time. But I would imagine the prosecutors there are smart and don't hand these things out cheaply. So I'm hopeful, actually. I would have liked to see Sidney Powell in jail, given how she behaved. And also Ken, who is the quieter one, but the brains of the operation.

Kara Swisher: Anyway, we want to hear from you. Send us your questions about business, tech, or whatever's on your mind. Go to nymag.com slash pivot to submit a question for the show or call 855-51-PIVOT. Okay, Scott, that's the show. We'll be back on Friday for more. Please read us out.

Scott Galloway: Today's show was produced by Lara Naiman, Zoe Marcus, and Travis Larchuk. Ernie Andretod engineered this episode. Thanks also to Drew Burrows, Mille Severo, and Gaddy McFain. Make sure you subscribe to the show wherever you listen to podcasts. Thank you for listening to Pivot from New York Magazine and Vox Media. We'll be back later this week for another breakdown of all things tech and business. Kara, have a great rest of the week.

Kara Swisher: All right.