How Amazon, Apple, Facebook and Google manipulate our emotions | Scott Galloway

How Amazon, Apple, Facebook and Google manipulate our emotions | Scott Galloway

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00:09
[Applause] so this is the first and the last slide each of my 6400 students over the last 15 years has seen I do not believe you can build a multi-billion dollar organization unless you are clear on which instinct or organ you are targeting our species has a need for a superb in our competitive advantage as a species is our brain our brain is robust enough to ask these really difficult questions but unfortunately doesn't have
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the processing power to answer them which creates a need for a super being that we can pray to and look to for answers what is prayer sending a query into the universe and hopefully there's some sort of divine intervention we don't need to understand what's going on from an all-knowing all-seeing super being that gives us authority that this is the right answer will my kid be all right you have your planet of stuff you have your planet of work you have your planet of friends if
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you have kids you know that once something comes off the rails with your kids everything melts and your universe to the Sun that is your kids will my kid be all right symptoms and treatment of croup in the Google query box one in six queries presented to Google have never been asked before in the history of mankind what priests teacher rabbi scholar mentor boss has so much credibility that one in six questions posed to that person have never been
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asked before Google is our modern man's to God imagine your face in your name above everything you've put into that box and you're gonna realize you trust Google more than any entity in your history let's move further down the torso one of the other wonderful things about our species is we not only need to be loved but we need to love others children with poor nutrition but a lot of affection have better outcomes than children with good nutrition and poor
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affection however the best signal the best signal that you might make it to be the nut part of the number one fastest-growing demographic in the world centenarians people live the triple digits there are three signals in reverse order your genetics not as important as we'd like to think so you can continue to treat your body like and think that Oh uncle Jill lived in nineteen five the Diamont caste it's less important than you think number two is lifestyle don't smoke don't be obese and use pre-screen get rid of about two-thirds of early cancers and
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cardiovascular disease the number one indicator or signal that you'll make of the triple digits how many people do you love caretaking is the security-camera we call the low-resolution security camera in our brain deciding whether or not you are adding value Facebook taps into our instinctive need not only to be loved but to love others mostly through pictures that create empathy catalyze and reinforce our relationships let's continue our journey down the torso
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Amazon is our consumptive gut the instinct of more is hardwired into us the penalty for too little is starvation and malnutrition open your cupboards open your closets you have ten to a hundred x times what you need why because the penalty for too little is much greater than the penalty for too much so more for less is a business strategy that never goes out of style it's the strategy of China it's the strategy of Walmart and now it's the strategy of the most successful company in the world
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Amazon you get more for less in your gut digest send it to your muscular and skeletal system of consumption moving further once we know we will survive the basic instinct we move to the second most powerful instinct and that is to spread and select the strongest smartest and fastest seed to the four corners of the earth or pick the best seed this is not a timepiece I haven't them wounded in five years it's my vain attempt to say to people if you mate with me your children are more
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likely to survive than if you mate with someone wearing a swatch watch the key to business is tapping into the irrational organs a rational is Harvard Business School in New York Business School term for fat profit margins and shareholder value high caloric paste for your children know you love your choosy mom why choosing moms choose you if you love your kids more the greatest algorithm for shareholder creation from world war ii to the advent of google was
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taking an average product and appealing to people's hearts you're a better mom a better person a better Patriot if you buy this average so versus this average so now the number one algorithm for shareholder value isn't technology look at the Forbes 400 take out inherited wealth take out finance the number one source of wealth creation appealing to your reproductive organs the Lotter is the number one wealthiest man in europe LVMH numbers 2 & 3 hmm and Inditex you want to target the most irrational
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organs for shareholder value as a result these four companies Apple Amazon Facebook and Google have disarticulated who we are God'll of consumption sex the proportion and your approach to those things is who you are and they have reassembled who we are in the form of for-profit companies at the end of the Great Recession the market capitalization of these companies was equivalent to the GDP of Niger now it is equivalent to the GDP of India having blown past Russia and Canada and 13 and 14 there are only five nations that have
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a GDP greater than the combined market capitalization of these four firms something is happening though the conversation just a year ago was which CEO was more jesus-like who is running for president now the worm has turned everything they're doing is bothering us we're worried their tax avoiders Walmart since the Great Recession has paid sixty four billion dollars in corporate income tax Amazon has paid one point four how do we pay our firefighters our soldiers and our social
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workers if the most successful companies in the world don't pay their fair share three that means the less successful companies have to pay more than their fair share Alexa is this a good thing this is despite the fact this is despite the fact that Amazon has added the entire market capitalization of Walmart to its market cap in the last 19 months whose fault is it it's our fault we're
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electing regulators who don't have the backbone to actually go after these companies Facebook lies that you regulators and say it would be impossible for us to share the data between our core platform and our proposed acquisition of whatsapp approve the merger they approve the merger and then spoiler alert they figure it out and the use says I feel lied to we're finding you a hundred and twenty billion dollars about 0.6 percent of the acquisition price of 19 billion dollars if Mark Zuckerberg could take out an
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insurance policy that the acquisition would go through four point six percent wouldn't he do it anti-competitive behavior a two and a half billion dollar fine three billion of the cashflow three percent of the cash on Google's balance sheet we are telling these companies the smart thing to do the shareholders driven thing to do is to lie and to cheat we are issuing 25 cent parking tickets on a meter that costs $100 an
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hour the smart thing to do is like job destruction Amazon only needs one person for two at Macy's if they grow their business 20 billion dollars this year which they will we will lose fifty three thousand cashiers and clerks this is nothing unusual this has happened all through our economy we've just never seen companies as good at it that's one Yankee Stadium of workers it's even worse in media a Facebook and Google grow their business 22 billion dollars this year which they will we're gonna lose approximately a hundred and fifty thousand creative directors planners and
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copywriters or we can fill up two and a half Yankee stadium's and say you are out of work courtesy of Amazon we now get the majority of our news from our social media feeds and the majority of our news coming off of social media feeds is fake news I am not allowed to be political or use curse words or talk about religion and class so I can definitely not say Zuckerberg has become Putin's I definitely cannot say that their defense
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Facebook is not a media company it's a technology company you create original content you pay sports leagues to give you original content you run advertising against it boom you're a media company just in the last few days Sheryl Sandberg has repeated this lie that we are not a media company Facebook has openly embraced the margins of celebrity and the influence of a media company yet seems to be allergic to the responsibilities of a media company imagine McDonald's we find 80% of their
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beef is fake and it's giving a sense of alight us and we're making terrible decisions and we say McDonald's were pissed off and they say wait wait we're not a fast-food restaurant we're a fast-food platform these companies and CEOs wrap themselves in a neon blue pink rainbow and blue blanket to create an illusionist trick from their behavior each day which is more indicative of the spawn of Darth Vader and Ain rant why
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because we as progressives are seen as nice but weak if Sheryl Sandberg had written a book on gun rights or on the right or on the pro-life movement would they be flying Sheryl to can know and I'm not doubting their progressive values but it foots to shareholder value because we as progressives are seen as weak they're so nice remember Microsoft they didn't seem as nice and regulators stepped in much earlier than the regulators now who would never step in
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on those nice nice people I'm about to get on a plane tonight and I'm gonna have a guy named Roy from TSA molest me if I am suspected of a DUI on the way home I can have blood taken from my person but wait don't happen to the iPhone it's sacred this is our new cross it shouldn't be the iPhone X it should be called the iPhone cross we have our religion it's Apple our Jesus Christ as Steve Jobs and we've decided this is holier than our person or our house or our computer we have become
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totally out of control with the gross idolatry of innovation and of youth we no longer worship at the altar of character of kindness but of innovation and people who create shareholder value Amazon has become so powerful in the marketplace it can conduct Jedi Mind Tricks it can begin damaging other industries just by looking at it Nike announces the distributing on Amazon their stock goes up every other Footwear stock goes down when Amazon stock goes up the rest of retail stocks go down because they assume what's good for Amazon is bad for everybody else they
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cut the cost on salmon 33% when they acquire it Whole Foods in between the time they announced the acquisition of Whole Foods I'm going to close Kroger the largest pure-play grocer in America shed a third of its value because Amazon purchased a grocer one eleventh the size of Kroger I got very lucky I predicted the acquisition of Whole Foods by Amazon the week before it happened this is me boasting I said this publicly in the media this is the largest acquisition in their history they've never made an acquisition over a
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billion and people ask how did you know this so I'm letting this very impressive audience in on the secret how did I know this I'm gonna tell you how I knew I barked it alexxa all day long and trying to figure out what's going on alexa by whole-milk I couldn't find anything for whole milk so I've added whole milk to your shopping list then I asked Alexa buy organic foods the top search result for organic food is plum organics baby food
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banana and pumpkin twelve pack of four ounces each it's 15 dollars total we didn't like to buy it and then as often happens to my age I got confused Alexa by Whole Foods I have purchased the outstanding stock of Whole Foods incorporated at 42 dollars per share I have charged 13.7 billion to your American Express card I thought that'd be funnier we've personified we've personified these companies and just as when you're really
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angry over every little thing someone does in your life in relationships you got to ask yourself what's going on here why are we so disappointed in technology and I believe it's because the ratio of 1% pursuit of shareholder value and one and 99% the betterment of humanity the technology used to play has been flipped and now we're totally focused on shareholder value instead of humanity 100,000 people came together for the Manhattan Project and literally saved the world technology save the world my mother was a four year old Jew living in London at the outset of the war if we
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had not warned the foot race towards splitting the atom would she she have survived it's unlikely 25 years later the most impressive accomplishment arguably ever and are in all of humankind put a man on the moon four hundred and thirty thousand Canadians British and Americans came together again with very basic technology and put a man on the moon now we have the 700,000 best and brightest and these are the best and brightest from the four corners of the earth they are literally playing with lasers relative to two slingshots relative to
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the squirt gun they have the GDP of India to work out and after studying these companies for ten years I know what their mission is is it to organize the world's information is it to connect us is it to create greater comity of man it isn't I know why we have brought together I know that the greatest collection of IQ capital and creativity that their sole mission is to sell another Nissan my name is Scott Galloway I teach at NYU and I appreciate your time not planned but you prompted some
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questions in me Scott that was a spectacular rant is this like Letterman when you do well it calls me on to the cow you're going to the heart of the conversation right like everyone's aware that you know after years of kind of worshipping Silicon Valley yes suddenly the worm has turned and in such a big way I mean to some people here will just feel like you're piling on you're kind of kicking the kids who've already been kicked to pieces anyway don't you feel any empathy for them at all
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none whatsoever look this is this is the issue it's not their fault it's our fault they're not concerned with their poor profit companies they're not concerned with the condition of our souls they're not going to take care of us when we get older we have set up a society that values shareholder value over everything and they're doing what they're supposed to be doing but we need to elect people and we need to force ourselves to force them to be subject to the same scrutiny that the rest of business and doors full-stop there's there's another narrative that is arguably equally
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consistent with the facts which is that there's been that there actually is good intent in much of the leadership I won't say everyone necessarily many of the employees and that many I mean we all know people who work in those companies and they still are pretty convincing that their mission is to do stuff so the alternative narrative is that there have been unintended consequences here that the technologies that were unleashing the algorithms that were attempting to personalize the internet for example
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have kind of been a resulted in weird effects like filter bubbles that we weren't expecting and be made themselves vulnerable to weird things like oh I don't know Russian hackers great creating accounts and doing things that we didn't expect isn't the unintended consequence a possibility here I don't think so I'm pretty sure statistically they're no less or better people than any other organization that has a hundred thousand or more people I don't think they're bad people as a matter of fact I would argue that there's a lot of very civic
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minded decent leadership but this is the issue when you control ninety percent points of share in a market search that is now bigger than the entire advertising market of any nation and you're primarily compensated and trying to develop Economic Security for you and the families of your employees to increase that market share you can't help but leverage all the power at your disposal and that is the basis for regulation and it's the basis for truism throughout history that power corrupts they're not bad people we've just let we've just let them get out of control
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but so maybe the case is you ever say I know at least a bit Larry Page for example Jeff basis I don't actually believe they wake up thinking I've got to sell a Nissan I don't think they think that I think they are trying to build something cool and are probably in moments of reflection as horrified at some of the things that have happened as we might be so is it is there a different way of framing this I'm to say
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that the when your model is advertising that there are dangers there that you have to take on more explicitly I think it's very difficult to set an organization up as we do to pursue shareholder value above all else they're not nonprofits they're they're the reason people go to work there's they want to create Economic Security for them and their families mostly first and foremost and when you get to a point when you control so much economic power you use all the weapons at your disposal I don't think they're bad people but I think the role of government and the
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role of us as consumers and people who elect our officials is to ensure that there are some checks here and we have given them the mother of all hall passes because we find them just so fascinating it's got eloquently put spec to actually put Mark Zuckerberg Jeff Bezos Larry Page Tim Cook if you're watching you're welcome to come and make the counter-argument as well start thank you so much thanks thank you [Applause]

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