Scott Galloway is a marketing professor at the NYU Stern School of Business and the founder of business intelligence firm L2. Galloway stopped by this week’s episode of The Bottom Line with Henry Blodget to explain how the big four became successful. Following is a transcript of the video:
So let’s talk about the big four, Amazon, Apple, Facebook, and Google. Effectively, what you have here is companies that have grown their value in the last eight years to the equivalent of the GDP of South Korea. We’ve never seen this kind of wealth creation so the question is how have they been able to do this?
And I would argue that they tap into these very basic instincts. I think Google is God — we used to pray to say “will my kid be better?” Now, we type in symptoms and treatment of croup and we get a more credible answer back. I think Facebook is love — love is empathy , a function of empathy is your interactions and your contact and your intimacy and I think Facebook is creating that. It’s an instinct to want to love and be involved in other people’s lives. Amazon is consumption — the more stuff you have, the more likely you are to survive through the winter and attract mates. And Apple is sex — Apple has become specifically — this item has become the ultimate badge of wealth, success. Apple is sex.
We’ve taken God, we’ve taken love, we’ve taken consumption, we’ve taken sex, we disarticulated those four things and reassembled them in the form of the enterprise with shareholder value and have created more economic value across the small number of people than ever before. These four companies are who we are, disarticulated and then reassembled to benefit 800,000 people who are making a ton of money.
The economic titans of the 20th century, General Motors and Unilever loosely speaking, they created somewhere between $US100K and $US250K in shareholder value per employee. And that built a lot of middle class families. Hundreds of thousands of employees making a good living around the world. Facebook has created approximately $US23 million per employee in shareholder value. So it’s great if you work for Facebook, it’s great if you own the Ferrari dealership in Portola Valley, it’s great if you own real estate in San Francisco but the question is, is it good for society when so few households are benefitting so much relative to the economic titans of yesteryear that used to spread not as much money but spread it across a much wider base.
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