1,1 Million people watched Scott Galloways DLD- talk on “The Four Horsemen: Amazon, Apple, Facebook & Google“. We are excited to welcome the DLD superstar, number cruncher and NYU professor back on stage in Munich on January 20-22. Scott kindly answerd us three leitmotif-questions about "Reconquer" in advance:
Do we need to reconquer our markets?
We’re at a place where Amazon, Apple, Facebook, and Google (or the Four as I like to call them) have become so big and so powerful that they are largely able to break the law, avoid paying taxes, and are hollowing out the middle class at a rate faster than we’ve never seen before. Amazon, for instance, pays a much lower corporate income tax rate than other US companies. Between 2007 and 2015 Amazon only paid 13% of its profits in taxes. In contrast, the S&P 500 average was 27%. For economies to thrive, companies need to hand over about ¼ of their profits but the Four are treated differently. In the same time period, Apple only paid 17% in corporate income tax, Google paid 16% and Facebook just 4%. Facebook and Google were responsible for 103% of the growth in digital marketing in 2016 (effectively putting any other digital marketing firm into structural decline), and in 2017, Amazon proved its ability to desolate entire sectors of the economy simply by announcing its interest in them (Kroger stocks fell nearly 15% at the announcement of the Whole Foods acquisition and Blue Apron’s stock fell 11% on the heels of Amazon filing trademarks for home meal kits). We’re in a winner take all economy where very small groups of individuals are making enormous profits while employing very few. It’s not a matter of whether or not we need to reconquer the markets, but how.
How have the most influential companies impacted the world we live in?
In one sense, big tech companies have created an ecosystem rooted in connectivityand access. They open the doors to technology, information, and have generally made the consumer's life easier. We’ve builtour lives around their irresistible products/ services (iPhones/ Amazon Prime) and platforms (Facebook/ Google) and are unlikely to give them up anytime soon– the 3000 photos on my iOS device is just one of the (many) reasons why I won’t be getting an Android anytime soon. As such, we find ourselves in a situation where, unlike ever before, we worship at the altar of big tech. There is a gross idolatry of innovators where consumers, society, and legislators have become blind to the domination of the press and markets by the big Four. Consumer stocks now move for three reasons. 1. The underlying performance of the stock. 2. The macro-environment. 3. What Amazon is or isn’t doing in that sector. We are inching towards an environment where these companies are taking on roles once performed by governments with too much power in the hands of too few.
What is your most pressing topic at the moment?
I believe (know) that the markets are failing. The perfect storm is brewing and it’s the beginning of the end for big tech.