0:00:00.000,0:00:03.802
[This talk contains graphic language[br]Viewer discretion is advised]

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So, this is the first and the last slide

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each of my 6,400 students[br]over the last 15 years has seen.

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I do not believe you can build[br]a multibillion-dollar organization

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unless you are clear on which instinct[br]or organ you are targeting.

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Our species has a need for a superbeing.

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Our competitive advantage[br]as a species is our brain.

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Our brain is robust enough to ask[br]these really difficult questions,

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but, unfortunately, it doesn't have[br]the processing power to answer them,

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which creates a need for a superbeing

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that we can pray to[br]and look to for answers.

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What is prayer?

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Sending a query into the universe,

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and hopefully there's some sort[br]of divine intervention --

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we don't need to understand[br]what's going on --

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from an all-knowing, all-seeing superbeing

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that gives us authority[br]that this is the right answer.

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"Will my kid be all right?"

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You have your planet of stuff,

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you have your planet of work,

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you have your planet of friends.

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If you have kids,

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you know that once something[br]comes off the rails with your kids,

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everything melts,

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in your universe[br]to the Sun that is your kids.

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"Will my kid be all right?"

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"Symptoms and treatment of croup"[br]in the Google query box.

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One in six queries presented to Google[br]have never been asked before

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in the history of mankind.

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What priest, teacher, rabbi, scholar,[br]mentor, boss has so much credibility

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that one in six questions[br]posed to that person

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have never been asked before?

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Google is our modern man's God.

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Imagine your face and your name[br]above everything you've put into that box,

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and you're going to realize[br]you trust Google more than any entity

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in your history.

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(Laughter)

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Let's move further down the torso.

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(Laughter)

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One of the other wonderful things[br]about our species

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is we not only need to be loved,[br]but we need to love others.

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Children with poor nutrition[br]but a lot of affection

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have better outcomes than children[br]with good nutrition and poor affection.

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However, the best signal[br]that you might make it

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to be part of the number-one fastest[br]growing demographic in the world --

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centenarians, people[br]who live to triple digits --

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there are three signals.

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In reverse order: your genetics --[br]not as important as you'd like to think,

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so you can continue to treat[br]your body like shit

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and think, "Oh, Uncle Joe lived to 95,

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the die have been cast."

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It's less important than you think.

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Number two is lifestyle.

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Don't smoke, don't be obese,[br]and prescreen --

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get rid of about two-thirds[br]of early cancers

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and cardiovascular disease.

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The number one indicator or signal[br]that you'll make it to triple digits:

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How many people do you love?

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Caretaking is the security camera --

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we call the low-resolution[br]security camera in our brain --

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deciding whether or not[br]you are adding value.

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Facebook taps into our instinctive need[br]not only to be loved,

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but to love others,

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mostly through pictures[br]that create empathy,

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catalyze and reinforce our relationships.

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Let's continue our journey down the torso.

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Amazon is our consumptive gut.

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The instinct of more is hardwired into us.

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The penalty for too little[br]is starvation and malnutrition.

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Open your cupboards, open your closets,

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you have 10 to 100x times what you need.

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Why?

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Because the penalty[br]for too little is much greater

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than the penalty for too much.

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So "more for less" is a business strategy[br]that never goes out of style.

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It's the strategy of China,

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it's a the strategy of Walmart,

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and now it's the strategy of the most[br]successful company in the world,

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Amazon.

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You get more for less into your gut;

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digest, send it to your muscular[br]and skeletal system of consumption.

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Moving further,

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once we know we will survive,[br]the basic instinct,

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we move to the second[br]most powerful instinct,

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and that is to spread and select[br]the strongest, smartest and fastest seed

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to the four corners of the earth,

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or pick the best seed.

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This is not a timepiece.

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I haven't wound it in five years.

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It's my vain attempt to say to people,

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"If you mate with me,[br]your children are more likely to survive

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than if you mate with someone[br]wearing a Swatch watch."

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(Laughter)

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The key to business is tapping into[br]the irrational organs.

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"Irrational" is Harvard Business School's[br]and New York Business School's term

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for fat profit margins[br]and shareholder value.

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"High-caloric paste for your children."

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No?

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You love your choosy mom.

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Why choosy moms choose Jif:[br]you love your kids more.

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The greatest algorithm for shareholder[br]creation from World War II

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to the advent of Google

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was taking an average product[br]and appealing to people's hearts.

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You're a better a mom,[br]a better person, a better patriot

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if you buy this average soap[br]versus this average soap.

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Now, the number one algorithm[br]for shareholder value isn't technology.

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Look at the Forbes 400.

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Take out inherited wealth,[br]take out finance.

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The number one source of wealth creation:

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appealing to your reproductive organs.

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The Lauders; the number[br]one wealthiest man in Europe, LVMH.

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Numbers two and three: H&M and Inditex.

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You want to target the most[br]irrational organs for shareholder value.

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As a result, these four companies --[br]Apple, Amazon, Facebook and Google --

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have disarticulated who we are.

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God, love, consumption, sex.

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The proportion in your approach[br]to those things is who you are,

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and they have reassembled who we are[br]in the form of for-profit companies.

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At the end of the Great Recession,

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the market capitalization[br]of these companies was equivalent

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to the GDP of Niger.

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Now it is equivalent to the GDP of India,

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having blown past[br]Russia and Canada in '13 and '14.

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There are only five nations

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that have a GDP greater[br]than the combined market capitalization

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of these four firms.

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Something is happening, though.

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The conversation just a year ago[br]was, which CEO was more Jesus-like?

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Who was running for president?

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Now the worm has turned.

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Everything they're doing is bothering us.

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We're worried they're tax avoiders.

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Walmart, since the Great Recession,[br]has paid 64 billion dollars

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in corporate income tax;

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Amazon has paid 1.4.

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How do we pay our firefighters,[br]our soldiers and our social workers

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if the most successful companies[br]in the world don't pay their fair share?

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Pretty easy.

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That means the less successful[br]companies have to pay

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more than their fair share.

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Alexa, is this a good thing?

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This is despite that fact --

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(Laughter)

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This is despite the fact

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that Amazon has added the entire[br]market capitalization of Walmart

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to its market cap in the last 19 months.

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Whose fault is it? It's our fault.

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We're electing regulators[br]who don't have the backbone

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to actually go after these companies.

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Facebook lies to EU regulators

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and says, "It would be impossible[br]for us to share the data

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between our core platform[br]and our proposed acquisition of WhatsApp.

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Approve the merger."

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They approve the merger and then --[br]spoiler alert! -- they figure it out.

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And the EU says, "I feel lied to.

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We're fining you 120 billion dollars,"

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about .6 percent of the acquisition price[br]of 19 billion dollars.

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If Mark Zuckerberg could take out[br]an insurance policy

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that the acquisition would[br]go through for .6 percent,

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wouldn't he do it?

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Anticompetitive behavior.

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A two-and-a-half-billion-dollar fine,

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three billion of the cash flow,

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three percent of the cash[br]on Google's balance sheet.

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We are telling these companies,[br]"The smart thing to do,

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the shareholder-driven thing to do,

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is to lie and to cheat."

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We are issuing 25-cent parking tickets

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on a meter that costs 100 dollars an hour.

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The smart thing to do is lie.

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Job destruction!

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Amazon only needs one person[br]for two at Macy's.

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If they grow their business 20 billion[br]dollars this year, which they will,

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we will lose 53,000 cashiers and clerks.

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This is nothing unusual;

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this has happened all through our economy,

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we've just never seen[br]companies this good at it.

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That's one Yankee Stadium of workers.

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It's even worse in media.

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If Facebook and Google[br]grow their businesses

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22 billion dollars this year,[br]which they will,

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we're going to lose approximately[br]150,000 creative directors,

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planners and copywriters.

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Or we can fill up two-and-a-half[br]Yankee Stadiums

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and say, "You are out of work,[br]courtesy of Amazon."

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We now get the majority of our news[br]from our social media feeds,

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and the majority of our news[br]coming off of social media feeds is ...

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fake news.

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(Laughter)

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I am not allowed to be political[br]or use curse words,

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or talk about religion in class,

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so I can definitely not say,

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"Zuckerberg has become Putin's bitch."

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I definitely cannot say that.

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(Laughter)

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Their defense:

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"Facebook is not a media company;[br]it's a technology company."

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You create original content,

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you pay sports leagues[br]to give you original content,

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you run advertising against it --[br]boom! -- you're a media company.

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Just in the last few days,

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Sheryl Sandberg has repeated this lie,[br]that "We are not a media company."

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Facebook has openly embraced[br]the margins of celebrity

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and the influence of a media company

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yet seems to be allergic[br]to the responsibilities

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of a media company.

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Imagine McDonald's.

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We find 80 percent of their beef is fake,

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and it's giving us encephalitis,

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and we're making terrible decisions.

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And we say, "McDonald's,[br]we're pissed off!"

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And they say, "Wait, wait --

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we're not a fast-food restaurant,

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we're a fast-food platform."

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(Laughter)

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These companies and CEOs wrap themselves

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in a neon-blue pink rainbow[br]and blue blanket

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to create an illusionist trick[br]from their behavior each day,

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which is more indicative[br]of the spawn of Darth Vader and Ayn Rand.

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Why? Because we as progressives[br]are seen as nice but weak.

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If Sheryl Sandberg had written[br]a book on gun rights

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or on the pro-life movement,

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would they be flying Sheryl to Cannes?

0:10:05.856,0:10:07.014
No.

0:10:07.038,0:10:09.182
And I'm not doubting[br]their progressive values,

0:10:09.206,0:10:11.278
but it foots to shareholder value,

0:10:11.302,0:10:13.371
because we as progressives[br]are seen as weak.

0:10:13.395,0:10:15.803
They're so nice -- remember Microsoft?

0:10:15.827,0:10:17.324
They didn't seem as nice,

0:10:17.348,0:10:21.621
and regulators stepped in much earlier[br]than the regulators now,

0:10:21.645,0:10:25.330
who would never step in[br]on those nice, nice people.

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I'm about to get on a plane tonight,

0:10:27.184,0:10:29.902
and I'm going to have a guy[br]named Roy from TSA molest me.

0:10:29.926,0:10:33.107
If I am suspected of a DUI[br]on the way home,

0:10:33.131,0:10:35.799
I can have blood taken from my person.

0:10:36.554,0:10:39.622
But wait! Don't tap into the iPhone --

0:10:39.646,0:10:41.066
it's sacred.

0:10:41.090,0:10:42.529
This is our new cross.

0:10:42.553,0:10:44.162
It shouldn't be the iPhone X,

0:10:44.186,0:10:46.182
it should be called the "iPhone Cross."

0:10:46.206,0:10:48.372
We have our religion; it's Apple.

0:10:48.396,0:10:50.171
Our Jesus Christ is Steve Jobs,

0:10:50.195,0:10:53.481
and we've decided this is holier[br]than our person, our house

0:10:53.505,0:10:54.805
or our computer.

0:10:54.829,0:10:57.346
We have become totally out of control

0:10:57.370,0:11:01.163
with the gross idolatry[br]of innovation and of youth.

0:11:01.187,0:11:03.658
We no longer worship[br]at the altar of character,

0:11:03.682,0:11:04.839
of kindness,

0:11:04.863,0:11:08.441
but of innovation and people[br]who create shareholder value.

0:11:08.465,0:11:11.359
Amazon has become so powerful[br]in the marketplace,

0:11:11.383,0:11:12.945
it can conduct Jedi mind tricks.

0:11:12.969,0:11:15.959
It can begin damaging other industries[br]just by looking at them.

0:11:15.983,0:11:19.147
Nike announces they're distributing[br]on Amazon, their stock goes up,

0:11:19.171,0:11:20.977
every other footwear stock goes down.

0:11:21.001,0:11:24.010
When Amazon stock goes up,[br]the rest of retail stocks go down,

0:11:24.034,0:11:27.343
because they assume what's good[br]for Amazon is bad for everybody else.

0:11:27.367,0:11:31.736
They cut the cost on salmon 33 percent[br]when they acquired Whole Foods.

0:11:31.760,0:11:34.867
In between the time they announced[br]the acquisition of Whole Foods

0:11:34.891,0:11:36.065
and when it closed,

0:11:36.089,0:11:38.360
Kroger, the largest[br]pure-play grocer in America,

0:11:38.384,0:11:40.119
shed a third of its value,

0:11:40.143,0:11:46.522
because Amazon purchased a grocer[br]one-eleventh the size of Kroger.

0:11:47.167,0:11:48.395
I got very lucky.

0:11:48.419,0:11:51.836
I predicted the acquisition[br]of Whole Foods by Amazon

0:11:51.860,0:11:53.204
the week before it happened.

0:11:53.228,0:11:55.916
This is me boasting; I said[br]this publicly in the media.

0:11:55.940,0:11:58.321
This was the largest[br]acquisition in their history,

0:11:58.345,0:12:00.680
they'd never made[br]an acquisition over a billion,

0:12:00.704,0:12:02.822
and people asked, "How did you know this?"

0:12:02.846,0:12:06.065
So I'm letting this very impressive[br]audience in on the secret.

0:12:06.089,0:12:07.284
How did I know this?

0:12:07.308,0:12:09.278
I'm going to tell you how I knew.

0:12:09.302,0:12:12.052
I bark at Alexa all day long

0:12:12.076,0:12:13.988
and try to figure out what's going on.

0:12:14.012,0:12:17.408
(Scott Galloway) Alexa, buy whole milk.

0:12:17.432,0:12:19.699
(Alexa) I couldn't find[br]anything for whole milk,

0:12:19.723,0:12:21.966
so I've added whole milk[br]to your shopping list.

0:12:22.463,0:12:23.749
SG: Then I asked,

0:12:23.773,0:12:26.915
(SG) Alexa, buy organic foods.

0:12:26.939,0:12:29.082
(Alexa) The top search result[br]for organic food

0:12:29.106,0:12:32.079
is Plum Organics baby food,[br]banana and pumpkin,

0:12:32.103,0:12:34.120
12-pack of four ounces each.

0:12:34.144,0:12:35.767
It's 15 dollars total.

0:12:36.419,0:12:37.612
Would you like to buy it?

0:12:37.636,0:12:39.635
SG: And then, as often happens at my age,

0:12:39.659,0:12:40.819
I got confused.

0:12:40.843,0:12:43.633
(SG) Alexa, buy whole foods.

0:12:44.050,0:12:47.584
(Alexa) I have purchased the outstanding[br]stock of Whole Foods Incorporated

0:12:47.608,0:12:49.397
at 42 dollars per share.

0:12:49.421,0:12:53.282
I have charged 13.7 billion[br]to your American Express card.

0:12:53.306,0:12:54.686
(Laughter)

0:12:55.884,0:12:57.491
SG: I thought that'd be funnier.

0:12:57.515,0:12:59.013
(Laughter)

0:12:59.037,0:13:00.720
We've personified these companies,

0:13:00.744,0:13:04.179
and just as when you're really angry[br]over every little thing someone does

0:13:04.203,0:13:05.698
in your life and relationships,

0:13:05.722,0:13:07.026
you've got to ask yourself,

0:13:07.050,0:13:10.100
"What's going on here?[br]Why are we so disappointed in technology?"

0:13:10.124,0:13:12.803
I believe it's because the ratio[br]of one-percent pursuit

0:13:12.827,0:13:13.994
of shareholder value

0:13:14.018,0:13:16.559
and 99 percent the betterment of humanity

0:13:16.583,0:13:17.968
that technology used to play

0:13:17.992,0:13:19.147
has been flipped,

0:13:19.171,0:13:22.538
and now we're totally focused[br]on shareholder value instead of humanity.

0:13:22.562,0:13:25.841
One hundred thousand people came together[br]for the Manhattan Project

0:13:25.865,0:13:27.326
and literally saved the world.

0:13:27.350,0:13:28.661
Technology saved the world.

0:13:28.685,0:13:32.372
My mother was a four-year-old Jew[br]living in London at the outset of the war.

0:13:32.396,0:13:35.501
If we had not won the footrace[br]towards splitting the atom,

0:13:35.525,0:13:37.213
would she have survived?

0:13:37.237,0:13:38.400
It's unlikely.

0:13:38.854,0:13:40.161
Twenty-five years later,

0:13:40.185,0:13:44.618
the most impressive accomplishment,[br]arguably, ever in all of humankind:

0:13:44.642,0:13:45.794
put a man on the moon.

0:13:45.818,0:13:49.442
Four hundred thirty thousand Canadians,[br]British and Americans came together,

0:13:49.466,0:13:51.297
again, with very basic technology,

0:13:51.321,0:13:52.639
and put a man on the moon.

0:13:52.663,0:13:56.270
Now we have the 700,000[br]best and brightest,

0:13:56.294,0:13:59.739
and these are the best and brightest[br]from the four corners of the earth.

0:13:59.763,0:14:03.843
They are literally playing with lasers[br]relative to slingshots,

0:14:03.867,0:14:05.154
relative to the squirt gun.

0:14:05.178,0:14:07.450
They have the GDP of India to work at.

0:14:07.474,0:14:10.004
And after studying[br]these companies for 10 years,

0:14:10.028,0:14:11.684
I know what their mission is.

0:14:11.708,0:14:14.332
Is it to organize the world's information?

0:14:14.356,0:14:15.861
Is it to connect us?

0:14:15.885,0:14:18.809
Is it to create greater comity of man?

0:14:18.833,0:14:19.995
It isn't.

0:14:20.019,0:14:21.915
I know why we have brought together --

0:14:21.939,0:14:26.248
I know that the greatest collection[br]of IQ capital and creativity,

0:14:26.272,0:14:28.126
that their sole mission is:

0:14:28.286,0:14:30.416
to sell another fucking Nissan.

0:14:30.466,0:14:34.213
My name is Scott Galloway, I teach at NYU,[br]and I appreciate your time.

0:14:34.237,0:14:38.580
(Applause)

0:14:42.654,0:14:44.129
Chris Anderson: Not planned,

0:14:44.153,0:14:47.113
but you prompted[br]some questions in me, Scott.

0:14:47.137,0:14:48.208
(Laughter)

0:14:48.232,0:14:50.540
That was a spectacular rant.

0:14:50.564,0:14:51.929
SG: Is this like Letterman?

0:14:51.953,0:14:54.869
When you do well,[br]he calls you onto the couch?

0:14:54.893,0:14:58.560
CA: No, no, you're going to the heart[br]of the conversation right now.

0:14:58.584,0:15:04.718
Everyone's aware that after years[br]of worshipping Silicon Valley,

0:15:04.742,0:15:06.596
suddenly the worm has turned

0:15:06.620,0:15:08.154
and in such a big way.

0:15:08.178,0:15:11.583
To some people here, it will just feel[br]like you're piling on,

0:15:11.607,0:15:14.997
you're kicking the kids who've already[br]been kicked to pieces anyway.

0:15:15.021,0:15:17.386
Don't you feel any empathy[br]for them at all?

0:15:17.410,0:15:18.807
SG: None whatsoever.

0:15:19.259,0:15:21.206
Look, this is the issue:

0:15:21.682,0:15:23.495
it's not their fault, it's our fault.

0:15:23.519,0:15:25.635
They're for-profit companies.

0:15:25.659,0:15:28.206
They're not concerned[br]with the condition of our souls.

0:15:28.230,0:15:30.818
They're not going to take care of us[br]when we get older.

0:15:30.842,0:15:34.584
We have set up a society that values[br]shareholder value over everything,

0:15:34.608,0:15:37.051
and they're doing what[br]they're supposed to be doing.

0:15:37.075,0:15:38.444
But we need to elect people,

0:15:38.468,0:15:40.552
and we need to force[br]ourselves to force them

0:15:40.576,0:15:42.247
to be subject to the same scrutiny

0:15:42.271,0:15:44.399
that the rest of business[br]endures, full stop.

0:15:44.423,0:15:46.145
CA: There's another narrative

0:15:46.169,0:15:49.792
that is arguably equally[br]consistent with the facts,

0:15:49.816,0:15:56.648
which is that there actually is good[br]intent in much of the leadership --

0:15:56.672,0:15:58.423
I won't say everyone, necessarily --

0:15:58.447,0:16:00.018
many of the employees.

0:16:00.042,0:16:03.116
We all know people who work[br]in those companies,

0:16:03.140,0:16:06.906
and they still are pretty convincing[br]that their mission is to --

0:16:06.930,0:16:10.168
so, the alternative narrative[br]is that there have been

0:16:10.192,0:16:12.264
unintended consequences here,

0:16:12.288,0:16:14.382
that the technologies[br]that we're unleashing,

0:16:14.406,0:16:18.984
the algorithms, that we're attempting[br]to personalize the internet, for example,

0:16:19.008,0:16:25.317
have A, resulted in weird effects[br]like filter bubbles

0:16:25.341,0:16:26.835
that we weren't expecting;

0:16:26.859,0:16:29.925
and B, made themselves vulnerable[br]to weird things like --

0:16:29.949,0:16:32.645
oh, I don't know, Russian[br]hackers creating accounts

0:16:32.669,0:16:34.644
and doing things that we didn't expect.

0:16:34.668,0:16:39.700
Isn't the unintended consequence[br]a possibility here?

0:16:39.724,0:16:40.930
SG: I don't think --

0:16:40.954,0:16:42.486
I'm pretty sure, statistically,

0:16:42.510,0:16:45.376
they're no less or better people[br]than any other organization

0:16:45.400,0:16:46.937
that has 100,000 or more people.

0:16:46.961,0:16:48.569
I don't think they're bad people.

0:16:48.593,0:16:50.222
As a matter of fact, I would argue

0:16:50.246,0:16:53.066
that there's a lot of very[br]civic-minded, decent leadership.

0:16:53.090,0:16:54.254
But this is the issue:

0:16:54.278,0:16:58.517
when you control 90 percent[br]points of share in a market, search,

0:16:58.541,0:17:02.076
that is now bigger than the entire[br]advertising market of any nation,

0:17:02.100,0:17:05.810
and you're primarily compensated[br]and trying to develop economic security

0:17:05.834,0:17:07.866
for you and the families[br]of your employees,

0:17:07.890,0:17:09.345
to increase that market share,

0:17:09.369,0:17:12.498
you can't help but leverage[br]all the power at your disposal.

0:17:12.522,0:17:14.439
And that is the basis for regulation,

0:17:14.463,0:17:16.919
and it's the basis for the truism[br]throughout history

0:17:16.943,0:17:18.286
that power corrupts.

0:17:18.310,0:17:19.513
They're not bad people;

0:17:19.537,0:17:21.769
we've just let them get out of control.

0:17:22.310,0:17:26.344
CA: So maybe the case[br]is slightly overstated?

0:17:26.368,0:17:28.688
I know at least a bit --

0:17:28.712,0:17:30.686
Larry Page, for example, Jeff Bezos --

0:17:30.710,0:17:33.379
I don't actually believe[br]they wake up thinking,

0:17:33.403,0:17:35.231
"I've got to sell a fucking Nissan."

0:17:35.255,0:17:36.764
I don't think they think that.

0:17:36.788,0:17:42.344
I think they are trying to build[br]something cool, and are probably,

0:17:42.368,0:17:43.688
in moments of reflection,

0:17:43.712,0:17:47.583
as horrified that some of the things[br]that have happened as we might be.

0:17:47.920,0:17:51.655
So is there a different way[br]of framing this,

0:17:52.294,0:17:57.491
to say that when your model[br]is advertising,

0:17:57.515,0:18:02.022
that there are dangers there[br]that you have to take on more explicitly?

0:18:02.637,0:18:07.274
SG: I think it's very difficult[br]to set an organization up as we do,

0:18:07.298,0:18:09.477
to pursue shareholder value[br]above all else.

0:18:09.501,0:18:10.798
They're not non-profits.

0:18:10.822,0:18:14.385
The reason people go to work there[br]is they want to create economic security

0:18:14.409,0:18:15.783
for them and their families,

0:18:15.807,0:18:17.107
mostly first and foremost.

0:18:17.131,0:18:20.424
And when you get to a point where[br]you control so much economic power,

0:18:20.448,0:18:22.844
you use all the weapons at your disposal.

0:18:22.868,0:18:24.454
I don't think they're bad people,

0:18:24.478,0:18:27.619
but I think the role of government[br]and the role of us as consumers

0:18:27.643,0:18:29.318
and people who elect our officials

0:18:29.342,0:18:31.490
is to ensure that there[br]are some checks here.

0:18:31.514,0:18:34.030
And we have given[br]them the mother of all hall passes

0:18:34.054,0:18:36.106
because we find them just so fascinating.

0:18:36.130,0:18:39.288
CA: Scott, eloquently put,[br]spectacularly put.

0:18:39.312,0:18:44.706
Mark Zuckerberg, Jeff Bezos,[br]Larry Page, Tim Cook, if you're watching,

0:18:44.730,0:18:47.709
you're welcome to come and make[br]the counterargument as well.

0:18:47.733,0:18:48.961
Scott, thank you so much.

0:18:48.985,0:18:50.146
SG: Thanks very much.

0:18:50.170,0:18:52.541
(Applause)