Scott Galloway on the break up of big tech – notes and video from DLD18

I’ve been mostly travelling since the DLD conference, so just catching up on my notes and reflections now.

Scott Galloway was one of the people I was really keen to see speak in Munich. His recent book The Four was one of my best reads of 2017 – I bought several copies for our office and recommend on Brilliant Noise reading lists for our digital mindset and leadership programmes.

What sets Galloway apart from most tech commentators is that he does his homework, brings fresh insights and lays out his thinking in an engaging but above all provocative style. This year’s theme of his annual DLD talk was close to the bone for many of the attendees – the break up of big tech.

Galloway repeated and build on the themes in his book about “the four” – Amazon, Google, Facebook and Apple – essentially that they are now so big that they are destroying more value than they are creating. Amazon and Facebook seemed to take the most flak in the talk.

Here are some themes and highlights, depending on your point of view:

  • Facebook is a media company and disingenuous in pretending it isn’t: “[Facebook says] We can’t be arbiters of the truth and you don’t want us to be.’ No, we’d like you to try.”

The four treat fines from breaking the law as costs of doing business. In proportion to the size of deals they are getting “$25 parking tickets”.

While Amazon dwarfs all other retailers it pays hardly any tax (see below).

What happens when the most successful companies in the world don’t pay taxes? Simple, the less successful companies pay more taxes. We have opted for a regressive corporate tax system.

The four will destroy almost 200,000 jobs in the advertising industry.

These have been fantastic vessels for the transfer of wealth from the rest of the world to the United States and from the middle of the United States to the coasts.

He also used “the shitshow” of Amazon’s HQ2 location selection process. US cities effectively bid against one other to be the one that waived its tax and other. Laws the most to attract the company to settle there.

At one point he suggested that the Chinese response to big tech had been effective from a national security point of view – ban the US company, support local versions of e-commerce, search and social and effectively lock them out. “There haven’t been any concerns about Russian hackers interfering with elections in China.” The fact it is a totalitarian regime probably helps too, though, right?

At times, then, you could think that Galloway was completely in tune with the protectionists of the hard left and right. In fact, he showed a clip of him being introduced on a Fox News show as a socialist – although one suspects that Fox’s owners would love to Google and Facebook hobbled or broken up by governments. But Galloway insists that his call for the four big tech giants to be broken up is driven by capitalist logic. Like Microsoft in the 90s, he says, the big tech companies are shutting down challenger companies – think Facebook’s assimilation of Snap’s features – and need to be constrained to allow the next generation of tech innovators to emerge. Without the anti-trust suits against Microsoft, Google and Facebook might never have emerged.

This claim was categorically denied by The Second Machine Age author, Andrew McAfee on a later panel that morning. Microsoft was beaten in some markets by the Four because it failed to execute fast enough or well enough in search or mobile, says McAfee, and the responsibility to deal with their excesses is down to citizens and consumers.

Will it happen? If it does it will be the EU leading the charge, since US regulators seem to have no interest in hampering companies that hoover up the world’s cash and data so efficiently. Also, Galloway’s says: “The break up of big tech will not be easy because Jeff Bezos is smarter than all of us.”

You can watch the whole session here:

Lastly here are Galloway’s predictions for 2018. He started the session by showing all of the things he called wrong last year – but he still has a pretty good hit rate.

Cabbies at the gate – Uber’s CEO at DLD18

Arriving at the DLD conference shortly before Uber CEO Dara Khosrowshahi took to the stage there was a real buzz in the streets. Not delirious VC fanboys or ride-hailing fans, but a group of Munich’s taxi drivers none too pleased to welcome Travis Kalanick’s successor to the city.

Protest was a theme that connected Khosrowshahi with his street-critics. He was wearing a t-shirt proclaiming “We are all dreamers”, a protest slogan referencing the Dreamers, children of illegal US immigrants whom had been given the right to stay in the US under Obama-era legislation.

Khosrowshahi was interviewed by Tanit Koch, Editor in Chief of German tabloid Bild. She noted her personal preference for Uber after a two-year feud with taxi drivers in Berlin who, despite being legally obliged to, would refuse and verbally abuse her whenever she tried to pay with a credit card.

Like Satya Nadella at Microsoft, Khosrowshahi is clearly differentiating himself from his predecessor by sounding like a leader that reasonable people might actually want to be associated with.

He was keen to stress that turnaround of the company’s culture was going to be down to creating great teams, not any dazzling acts of genius by him:  “There’s an obsession with the cult of personality in Silicon Valley, and to me, that’s just BS.”

He helped the company define its values, but rather than dictating homilies from on high, Khosrowshahi led a crowdsourcing effort to define the behaviours that employees wanted to exemplify in their everyday work. The input from thousands of employees was curated and refined by the employees – “We were editors, not authors”, he said.

While Uber is still not profitable, it is getting more focused and also looking for more sources of revenue. UberEats will be the biggest food delivery service in the world this year, he claimed.

Like many other speakers who actually have skin in the driverless car game, Khosrowshahi was quick to play down how quickly autonomous vehicles would become a reality on our roads. He did confidently predict that within 10 – fifteen years another long-time futurist dream, the flying car, would start being used “maybe not in Europe but certainly in places like Dallas, Texas.”

All the while during the talk, overhead hung a kind of flying car – the Volocoptor – suspended from the conference hall roof.