every week on Pivot, we take a sharp, unfiltered look, the technology and media industries and highlight examples, winning leadership. And when it comes to leading a successful business time and again, entrepreneurs and executives from across industries share this incredibly simple secret turned to the experts for help.

That's why small and medium sized businesses rely on trying for human resource solutions, no matter what industry Aaron trying a tailor strategies for your organization to grow with confidence.

Learn more about how trying its industry tailored HR can work with your business at china dot com. That's t r i n e t dot com Hi, everyone. Welcome, Pivot from the Box Media Podcast Network. I'm Cara Swisher, founder of Rico Deco. And I'm joined by my no mercy, no malice. Co host Scott Galloway. Hey, Scott, How's it going? Where are you this morning?

I'm in New York. Care of the box was downtown. Where is

Cara Swisher? I'm at the Fox Studios in D. C. And the District of Columbia in Washington. So this is our first show. Everyone's looking forward to it. They think we're gonna do bad things, which is really interesting from the reaction on Twitter, but let's hope so. Bad things. And which of you know I pulled people to say What? What is our photo look like? And I don't know which one you thought was best, but I got my favorite. One was Cagney and Lacey is really gonna be lit this season

in by the first of the second Lacey. I was about the way in, but

totally Cagney.

Hello, Helen. So obviously, I thought I thought we were literally the new sitcom on Brava where you're you're the year, the tough but lovable cop. And to be on the wacky neighbor that just discovered meth.

But it's good. That sounds great. That's all right. Well, let's get into discussions this week. We've got a lot to talk about. Um, and we're going to start first with our 1st 2nd which is a big story breakdown. Um, I think the big story this week is Instagram, and I've been spending a lot of time talking to people on Facebook about what happened here. I have a very good sense of what happened. Um, but I just sort of like your thoughts out of the gate, and then I will give my thoughts on that.

Well, you're the insider here. My sense is that when founders some my company was recently acquired 18 months ago by Gardner and when a company's acquired, it's not if, but when the founders gonna leave. I think the clock starts right away. Control is a very addictive substance, and founders are used to control. So the fact that they were there six years, actually, it is pretty impressive. The question of us, her back to us. It seems like a lot of these departures air coming at the same time. Is there something wrong in Mudville?

Well, yes, I think. I think actually, I don't think it's too long. I think they wanted to stay. I don't think they wanted to go. I think they liked working there. They were hoping to work there their whole lives. I think that their whole lives, but a long time as long as they could be creative and be in charge of things. But I think what happened is after Cambridge Analytica, after all kinds of stuff. Mark Zuckerberg asserted himself, especially cause Instagram was sort of the engine and Facebook was not anymore. And so I think This was a story, a situation with just say what it is.

Kevin Systrom and my Krieger, who created Instagram, left the company's suddenly on Monday without telling you. They just did it. All of a sudden. I think they were pushed really hard by a lot of changes in Facebook that they thought room to their product essentially. So I don't think this was so we'll just go. I think they didn't want to go and left under duress from my purse.

A press release kinda validates, because if you read the press release clearly Facebook did not approve. It is, it says we're looking for to explore my creativity again. It's basically sort of we're going to start something else. And for whatever reason, we couldn't We couldn't find it here. That was not brought to you by Facebook press ways. But what are some of the points of tension?

Do you have any way, Ricou? Everything. Everything would tweak. Think they, for example, a stupid thing, But it was important to these people. Is the imposition of ads the way they were gonna impose ads? I think they always resisted. Um I think when they were when they're sharing things to Facebook and back and forth. One of the great drivers of growth was being shared back and forth, essentially for both sides. And so when you shared things from instrument to Facebook, it used to say it was from Instagram. And then there'll be a link back and it created lots of referrals back to Instagram. But you created on Instagram and Facebook removed that.

So it looks like you posted on Facebook. Looks like you're using Facebook. I found that incredibly deceptive. And I think they did too. Like I think they're more. Both Mike and Kevin, whom I know really well, are very much more in the consumer camp than they are in the Let's help advertising camp.

And what about the what was What is the general mood of Facebook after? And I described it is here the last three Thanksgivings for a Facebook executive. It's great to see you. You're awesome. It's great to see you. You're amazing. It's good to see you. You're ruining America. I mean, isn't there a ton of attention right now among senior? Exactly.

There's executives who are close to Zuckerberg and the ones that aren't the Internet. I mean, like, I think it's I think they're very one of the things that I kept getting from a lot of people on the Zuckerberg side here. And it was very clearly Mark Zuckerberg pushing this whole thing thes changes in instagram that the founders did not like and the more control he was trying to take. Um, I think the ones that are inside with him or I don't want to say Kulti, but they agree with him and they kept saying, You know, Mike and especially Kevin are team players and I'm like You need fewer team players and more people that disagree with you, you know what I mean? Like, it was an interesting thing. So I think there's a tension within the company of people who are in with the current administration and not in the current administration. And there there's there's people on both sides and this was the most potent example, and what I think was worst about it is, in effect, product like you can talk all you want about ruining democracy and the Russians in this inept. This actually affects product, and when product starts to get affected, I think that's when companies go downhill.

It's funny you say that. It's It's Silicon Valley. It's through the through that kind of lens of Silicon Valley. And that is, you know, our democracy and Russians. Yeah, that's a concern with the product.

That's what goes down. I'm like, you think they're gonna go down over. The Russians are not going down with the Russians going down when their product is shooting. That's it. You know what I mean? Like, that's That's all I'm saying is, of course, that what they've done, is it gross mismanagement and use of their platform? But what's really going to kill them is something much different. That's that's just went, and I think it bears out when products go. That's when companies go.

Yeah, the consumer has the final say here and who wins here? Whenever there's a senior level departures, there's a sucking sound upward. Who's the new man or woman

against a man named Adam Necessary, who was brought in? He's very close to Mark Zuckerberg. He's very confident person, but he didn't found the company that's you know what I mean, Like, he didn't found the company. And so, um, you know these were two really smart entrepreneurs at their peak, and I'm not sure they weren't like laying around. They weren't like resting investing in anyway. And so I think that's always. It's always a mistake to remove creative, interesting founders on, and that's I think it's missed. Earnings is a big mistake.

It's so interesting because pre jobs founders of in starting companies since I was 25 pre jobs, we were considered a crazy liability that our shelf life was once the company got a CFO and then veces brought in gray hair management post jobs, especially after his successful return. The Apple now we're seeing is invaluable to the DNA and should be kept at all costs. It's literally

they're helpful. Like Look at Travis Count. Look at some others, you know? I don't know. All right, Next thing, um, we're gonna talk about these. Attorney General Jeff Sessions is meeting with state Attorney General's about tech industry biases. Put on your tinfoil hats, everyone. Attorney General Jeff Sessions is talking about the power of the tech industry with a group of states attorneys general. Or is it turning whatever about bias on social media against conservative viewpoints? Scott Is this real? What can the state ages actually do about this? Or is it just a lot

of well, actually, the red state A G play is how it sort of tobacco. God was taken down. So there is something here, and I've always felt that the war against big tech will be waged out of Brussels or from a red state. A G who sees a blue Line past from the ages mansion to the governor's mansion is a populist argument against big tax. So the a G Army is an effective fighting force against big tag. The problem is that where you're going to see with sessions, the administration continue a pattern of snatching defeat from the jaws of victory. And that is their Israel anticompetitive concern here. The rule is these companies have just become too influential, bad for the economy, but a host of reasons anti competitive practices. But they're going through the wrong door here. This notion that there's a bias against conservatives, it's just so ridiculous These,

You know, these guys Well, I'll tell you what I think. I know. I know these people. I don't know them as well as you. They don't lean left at work that only right, they leaned down. And anything that gets the more engagement in more Nissan ads is cool with them. Regardless of the political standpoint and the notion that conservatives have some other voices have been squatting. Lester Holt is not giving a platform Thio Alex Jones, you know the most. Trump has a direct pipeline to 54 million users, despite violating the terms of use every goddamn day on Twitter. So the notion that this has been anything but amazing the far left and the far right is just

rid. I think they really are put. You know, I sit there and like, That's not what you should. You should be focusing over here over here, they're actually doing bad things here. They're not, and it's just it's just it's one of these things where it's gotten politicized, obviously, as everything has. And then it's a waste of time. And this is an opportunity missed to do actual focus on things that matters such as, Ah, anti anti competitive, you know, and the competition,

all kinds of things that are really of concern and the growing power of these different companies on our country, and instead they're sitting around here saying that Diamond still can't talk. They can't talk. They never stop talking like it is really interesting that they fixate on this. It's like it's like it reminds me a lot of when conservatives fixated on gay rights. If you remember, they just went on and on and on. I think they lost so much ground on that one because they were never gonna win that one. They were never, you know, it was It was just,

I don't know. It just had a great line in one year articles that said that the people complained about being silenced, the ones who never

shut up. Yeah, yeah, that's right, they don't and there's plenty of places t talk online here. You just can't talk on some of these platforms, and I just don't know what they could. They actually do. What could these What are these State attorney's actually do? Force them into what I mean? It's a legal quagmire of loss like you cannot. I don't think you couldn't force any

of these things. They're just because this could have been a bipartisan issue and you have the far left and the far right concerned about these companies growing influence. But instead they're going to turn it into your bad for conservatives. Which means they're gonna lose the far left in terms of the any, any attempt to sort of rain these guys in. It's just it's it's It's reminiscent of the Amazon Washington Post a ham handed attack from Trump, where he basically undercut legitimate concerns about Amazon.

Yeah, so why did they do it? What's the just I dress? I don't

I just you know, I I have such a terrible time predicting this administration. I don't understand 95% of what they dio, so it feels this very political. And it's unfortunately there's really harm here. This could have been a bipartisan effort, and what's gonna happen is big tech is gonna respond thoughtfully in a measured way with data. Big tech, one of the big Tex gonna act presidential, the other is president and you're you're gonna see you're gonna see. It's like I don't I don't know what the analogy is. It's It's a complaining, you know, complaining about minimum wage because you want you want young people to smoke more. It's okay. We should raise minimum wage. But that's not why. And you end up, you end up contaminating the whole argument.

Anyway, I think I think they're gonna slip right out of there. And by the way, they should slip right out of this. This isn't saying this is just a waste of time and, you know, again focusing on things. And then we'll get, like, 2 60 tweets from Trump about the silliest of things when we should be focused on bigger things. Okay, we're gonna take a quick break, and then we're gonna pivot to Snapchat and Amazon every week on pivot. We take a sharp, unfiltered look at the technology and media industries and highlight examples of winning leadership when it comes to leading a successful business. Time and again, entrepreneurs and executives from across industries share this incredibly simple secret turn to the experts for help.

That's why small and medium sized businesses rely on trying it for human resource solutions. No matter what industry you're in, trying to tailor strategies for your organization to grow with confidence, learn more about how trying it's interesting, tailored. HR can work with your business at trianon dot com. That's t R i n e t dot com Incredible starts here trying it. We're back and we're gonna talk about Snap and Amazon. Explain for the people

the situation. So Amazon. It's Snapchat. Announced a partnership earlier in the week where you'll be able to use Snapchat, too. Ah, zero in on a product and it will be recognized kind of visual search and you'll be cute or prompted with that product page on Amazon. So the link between social and commerce, it's ah, you know, it caused a lot. It got rightfully I got a lot of interest cause one snap needs something. I mean, this is a company care. I believe this country's going out of business, that I do not believe it will be a prediction. It snap will not be an independent company by the end of 2019.

Independent. You mean CEO not

100%? Well, that's that's the correct question. So, first off, 10 to 100,000 kids every week say, Hey, have you tried this new version of Snap called instagram stories and they switch And so the

Metrix team I gotta pay might have caught a break here with Kevin and my gone by the way in and insert.

But I I I think the ventures probably deep deep enough to be fine. But anyways, you have a situation where I think they're only. There are a limited number of buyers, so snap. Even though it's people talk about how its stock has gotten crushed, it's still got a market cap of $13 billion. So I believe the stock gets cut in half again. But any acquisition is sort of an eight or a $10 billion check, and there's a limited number of companies that can buy a company that's not making a lot of money for 8 to $10 billion to the universe gets very, very narrow

fast. Come

on, It's either Google or Amazon. And you said to me and I had not thought about this a month ago that the only guy that Evan Spiegel would wanna work for is basis. I mean, I know it won't be able to be Facebook

or Apple or Apple. He

did what you work for, to quit, but Apple is not

that acquisitive. They're not getting near it.

They're not that inquisitive. And I think days Oh, says. All right, you have a core constituency, the guy stuff and buy stuff irrationally. High margin coffee, flying it, tennis shoes. You know they're crazy, right? We love teenagers because they're stupid because they spend all their money.

I bought high margin coffee yesterday.

Easy's Did you get your kids a pair of those Anyways,

I don't want to show you my shoes

and then, But so the other. The other real, I think. Instant piece of information here is the former VP of finance from Amazon's not a CFO of, um of, of, of snap. And basically the CEO and his top finance people become like twins that can communicate non verbally because it's very important that CFO on the VP of finance, sir. But I call the CEO source of truth so I can see this guy, the CFO, calling Jeff and saying, Look, this is the deal with our company. This is why it makes sense for you and them literally short circuiting an acquisition

that makes this might be. And what about Google? Make the

Google? I don't I don't think I have a good argument for Google. They don't try to be in social it hasn't worked. I don't know if you need to be. You know, I just

They don't just stay in the robots. They don't. They just can't even remember when they were doing google claws or whatever that was. I was like, Oh, stop. It's painful. And they had, like, one of the original ones with

orchid. If you remember,

you remember where I went? Orc. It was This little guy named Orchid worked there, and he created one of the earliest social networks right on par with Facebook and others. And it got very popular in, like Brazil and some other time. Some strange was remember

social networking Brazil. That's

remember steel and a few other small countries. And I remember a Google executive saying, You know, we're really big in Brazil and I go way to lose it like Brazil as compared to, you know, like Facebook was killing in the United States and else in bigger markets, and it was just he was a great guy. He still is around, but he's I don't think they killed the thing off, but they just can't do social. They can't, they just shouldn't. It's it's painful to watch

so that was No traditional media company can afford that shack and why and losing money. But Amazon AFI if they think they can pick this thing up for 10 billion, which would be a 1% solution on a trillion dollar market cap and capture a core constituency that gets them traction among high margin products maybe gives them another entry point. Gets more people on their heads with entertainment. Maybe they stream stuff from AM from Amazon Prime video. There might be a pony in there somewhere.

I like that. I like it. I like it. I'm going with you. I agree with you on this one. I don't think there's any other brothers. I except for an Asian company. One of the good guys.

Yeah, we checked him. And Jeff Sessions says it's a security risk.

Right? So yes. Oh, yeah. Is what goes on on Snapchat.

They're they're they're gonna weaponize our youth. Kara, it's coming for us. Thea Army wrote the robot army of AR 15 year old boys was coming for

us. Yeah. Yeah. So I have to say I have two kids they still used. They use it as a communications tool. That's what they use it as 100

stories. Have they tried it or don't know about

it or they you know they do, But I think it actually goes along. General, I think more girls use instagram stories. It's interesting, he's he's use it sometimes. But just the other day I was like, How are you, like Answer me? And one of my sons goes over the museum and I was like, What? And I go, you go. You put a pretty pictures there. That's all it was, not fun or use school or utilitarian. It was just a museum. That's what I thought. It was very smart, actually.

Goat Greatest all time this week. What inspired you?

I think. Craig Newmark Funding the markup. It's being done by Julia Angwin, who actually went to school with and some others were getting together to look a big tech to look at issues around big tech. And I think that Greg has I did a great podcast with Craig Newmark. He started Craigslist, obviously, um, and he's been giving a lot of money of journalism efforts. Hey, give one to a school recently, a big school, $20,000,020 million increments Essentially, I made a lot of money from Tech, and he's using it to support journalism. I think it's a great thing. He's an unusual and something odd character in Silicon Valley.

Um, and I think he's really enjoying his media mogul hood in this way. And it's a very different way from others like Mark Benny off time and and, Ah, the Rain, Powell Jobs and Jeff Bezos. It's it's really trying to really support traditional journalists into doing with the golden card.

Well done, Craig. Nice. And so I had a moment of inspiration. I carry. Yesterday I met one of my heroes legitimately one of my heroes. You Commissioner Margaret. Margaret

Vester. Investigator. Yes.

And so I'm on the train back for Miss Ella. And I see this woman outlining met her on the analyst's report. Nice doctor on the train and analysts report. And what? You know what? She was doing? All she was highlighting this report. She was knitting. How awesome. She got off the train. I introduced myself, took a picture with her. But this is a This is a woman who is fearless fighting for the middle class and is fiercely intelligent. Just really

excited a whole series about her. She's incredible. She's a Margaret. Jessica is the EU commissioner who has been sort of making every text cos life a living hell and it's great to watch. I've interviewed twice, and I think she's really quite something. She's like a super here on day hater intact. They just they're polite

about it. But I would argue she's only public official in the world right now whose testicles have descended when it comes to dealing with big.

You don't need testicle. You don't need testicle. Do you understand it? No. Taking back the inappropriate for the left calls. We're not using way. We're taking your taking the reference

to the left. Cara, why don't you write on the inappropriate You and I

know it's not words I like using well think we'll come up with new metaphors. All right, I'm not trying to be politically correct, but there are other ways we can use. All right, absurd quote of the week. Anything

comes back to. I'm

sure you have so much. It's so absurd. I think the the stuff around instagram the the fact that Facebook had no response to this because they were obviously taken unawares. These guys just came in and, you know, they had been dropping bombs all over these guys for months on doing different things and messing with the thing. And even though they did sell it, I get that they still had given them enormous autonomy and then just changed the rules of the game. And so these guys just left. I, like, drop the mic and laughing. That

was coming, by the way From the stars. Timepoint Worst trade in history. Best trade on the bar

side. Yes, it is. Although they

did get a lot of stock. So

they did this. Well, I think they're gonna walk away with hundreds of millions of dollars.

Just a lot of my worst piling on here. That your favorite person said. She said she was drunk, right? Okay. Okay, then Then all bets are off. She was drunk. Anyways,

you know what's interesting about Trump? He doesn't drink it all like myself. He doesn't think it also he has. He doesn't. You know, I don't care of star. It's wonderful. No, I don't trust Marius. As

Winston Churchill said, I've gotten more out of alcohol than it's gotten out of me. Trust more TV, More alcohol. Boom! I'm out.

All right. Thank you. All right, so last segment our predictions. Because because you have to make a prediction every week. Now, just so you know, I don't have to be right, eh? So, what is your, uh what is your What is

your prediction? Despite one, we've already made one, and that is by the end of 19. Snap is no longer an independent company.

All right, that's a good one. Okay. You have any others?

Uh, I think Facebook and I'm talking about book because I own all of the attack, but I think Facebook is, um I think the stock is remarkably undervalued. And to be clear, bad for America. Bad for the planet. But I just think the stock is going to scream when people realize that, probably they're gonna get through this, and they're gonna start posting just enormous numbers. It's gonna turn into Apple years ago. Religious looks just incredibly cheap.

All right? And marks, however, still

at the helm. Oh, yeah. Well, why do you say that? How could he not be about What do you think this is? He's got clings to power like he makes an African dictator look charming. How on earth does Mark Zuckerberg leagues leave two classes of stock? How can

you leave? I just think this one was bad. This was not a good look. I'm sorry. I just Russia when you start to know the rushing, of course, the Russian thing. But I think he flew out of that one. I think this one, he's not gonna fly out of Kevin Systrom and

Marty think that's how Mark Zuckerberg

was just telling you. You just Oh, my God, It's like Al Capone and taxes. I'm just telling you, it's If this is it's not. It doesn't leave him Beloved.

There's no, really, like, they're like Trotsky bigger.

We'll just, you know, Brian Acting, who was one of the founders of What's Up? Just gave a long interview about how Facebook you just that stuff starts. That stuff starts is this is a sucky place to work, and then you get hated and then I don't know. It's just I just e just it's not. It's it's got bad juju all around. That's all I'm saying. Good stuff. It's stuff anyway. All right, Scott, we

have to get out of here. You have to get out of there. I'm I am. I'm embarrassingly available.

No, are you? I have to get either. I'm going to New York for a New York friends that I have agreed to appear. And I'm talking to some some lovely top women executives about how Silicon Valley's doing. And then I'm doing an interview with Samantha Bee about all kinds of things, including an app she's doing tonight, which

I helped her with. So curious what she looks like in person.

She's lovely, She's shy. She's Canadian, right? So she has

that says it all.

You think she's coming

by the way, that's back in an appropriate thing. That is, technically a racist stereotype.

But I'm going out. How do you get 100? And you

get 100 drunk fraternity guys out of your pool in Canada? Oh, God. Let's get out of the pool.

We're taking up acting inappropriate. No, you're not. Canadians is far, okay? And I love Canada bythe. I'm

going to Canada. Why not? I'm going to Toronto. No.

All right, Well, enjoy yourself. Why don't you tell that joke? We Oh, all right. Anyway, thank you for joining Scott, looking for two talking everybody. Thanks for listening To pivot from box media on our first show. Join us next week for more breakdown of all things tech and business. If you like what you heard, please subscribe on apple podcasts or wherever you're listening.

Every week on Tibet, we take a sharp, unfiltered look at the technology and media industries and highlight examples of winning leadership when it comes to leading successful business. Time and time again, entrepreneurs and executives from across industry share this incredibly simple secret turned to the experts for help. That's why small and medium sized businesses rely on Try Net for human resource solutions no matter what. Industry Aaron trying it hailer strategies for your organization to grow with confidence. Learn more about China's industry tailored HR and how they can work with your business. Trying it by calm at try net dot com.