How Amazon, Apple, Facebook and Google manipulate our emotions

So this is the first and the last slide
each of my 6400 students

for the last 15 years have seen.

I do no believe you can build
a multibillion dollar organization

unless you are clear on which instinct
or organ you are targeting.

Our species has a need for a superbeing.

Our competitive advantage
as a species is our brain,

our brain in robust enough to ask
these really difficult questions,

but unfortunately it doesn't have
the processesing power to answer them,

which creates a need for a superbeing
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 superbeing

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 you have kids,

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

everything melts,

and your universe,
to the summit, 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 priest, teacher, rabbi,
scholar, mentor, boss

has so much credibility

that one in six questions
posed to that person

have never been asked before?

Google is our modern man's God.

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

and you're going to realize you trust
Google more than any entitity

in your history.

Let's move further down the torso.

(Laughter)

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 affection.

However, the best signal
that you might make it

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

centenarians,

people who live to triple digits --

their are three signals.

In reverse order,

your genetics --

not as important as you'd like to think.

So you can continue to treat
your body like shit

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

the die have been cast."

It's less important than you think.

Number two is lifestyle.

Don't smoke, don't be obese, prescreen --

get rid of about two-thirds
of early cancers

and cardiovascular disease.

The number one indicator or signal
that you'll make it to 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.

Amazon is our consumptive gut.

The instinct of more is hardwired into us.

The penalty for too little
is starvation and malnurtition.

Open your cupboards,

open your closets,

you have 10 to 100 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 a the strategy of Wal-Mart,

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

Amazon.

You get more for less into 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 wound it in five years.

It's my vain attempt to say to people
if you mate with me,

your children are more likely to survive

than if you mate with somebody
wearing a Swatch watch.

(Laughter)

The key to business is tapping into
the irrational organs.

Irrational is Harvard Business School's
and New York Business School's term

for fat profit margins

and shareholder value.

"High caloric [paste] for your children,"

no?

You love your choosy mom.

Why choosy moms choose JIF:

you love your kids more.

The greatest algorithm for shareholder
creation from World War II

to the advent of Google

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

You're a better a mom,

a better person,

a better patriot

if you buy this average soap
versus this average soap.

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 Lauders;

the number one
wealthiest man in Europe --

LVMH.

Numbers two and three:

H&M and Inditex.

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

As a result,

these four companies --

Apple, Amazon, Facebook and Google
have disarticulated who we are.

God love consumption sex.

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

and they have reassembeled 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

in '13 and '14.

There are only five nations

that have a GDP greater than the combined
capitalization of these four firms.

Something is happening though.

The conversation just a year ago
was which CEO was more Jesus-like,

who was running for president?

Now the worm has turned.

Everything they're doing is bothering us.

We're worried they're tax avoiders.

Wal-mart, since the Great Recession,
has paid 64 billion dollars

in corporate income tax;

Amazon has paid 1.4.

How do we pay our firefighters,
our soldiers and our social workers

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

Pretty easy.

That means the less successful companies
have to pay more than their fair share.

Alexa, is this a good thing?

This is despite that fact --

(Laughter)

This is despite the fact

that Amazon has added the entire
market capitalization of Wal-Mart

to its market cap in the last 19 months.

Whose fault is it?

It's our fault.

We're electing regulators
who don't have the backbone

to actually go after these companies.

Facebook lies to EU regulators

and says, "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 EU says, "I feel lied to,

we're fining you 120 billion dollars,"

about .6 percent of the acquisition price
of 19 billion dollars.

If Mark Zuckerberg could
take out an insurance policy

that the acquisition would
go through for .6 percent,

wouldn't he do it?

Anticompetitive behavior.

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

three billion of the cash flow,

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

We are telling these companies

the smart thing to do,

the shareholder-driven thing to do,

is to lie and to cheat.

We are issuing ¢25 parking tickets

on a meter that costs $100 an 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 53,000 cashiers and clerks.

This is nothing unusual;

this has happened all through our economy,

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

That's one Yankee Stadium of workers.

It's even worse in media.

Facebook and Google grow their businesses
22 billion dollars this year --

which they will --

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

planners and copywriters.

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

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.

(Laughter)

I am not allowed to be politcal
or use curse words,

or talk about religion in class,

so I can definitely not say ...

"Zuckerberg has become Putin's bitch."

I definitely cannot say that.

(Laughter)

Their defense:

"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 percent of their beef is fake,

and it's giving us encephalitis,

and we're making terrible decisions.

And we say, "McDonald's,

we're pissed off."

And they say, "Wait,

wait,

we're not a fast-food restaurant,

we're a fast-food platform."

(Laughter)

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 Ayn Rand.

Why?

Because we as progressives
are seen as nice but weak.

If Sheryl Sandberg had written
a book on gun rights,

or on the pro-life movement,

would they be flying Sheryl to Cannes?

No.

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
on those nice, nice people.

I'm about to get on a plane tonight,

and I'm going to 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 tap into 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 is Steve Jobs,

and we've decided this is holier
than our person, our house

or our computer.

We have become totally out of control

with the gross idolatry
of innovation and of youth.

We no longer worship
at the altar of character,

of kindess,

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 they're
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 cut the cost on salmon 33 percent
when they acquired Whole Foods.

In between the time they announced
the acquisition of Whole Foods

and when it closed,

Kroger, the largest
pure-play grocer in America,

shed one-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 was the largest
acquisition in their history,

they'd never made
an acquisition over one billion,

and people asked, "How did you know this?"

So I'm letting this very impressive
audience in on the secret.

How did I know this?

I'm going to tell you how I knew.

I bark at Alexa all day long

and try to figure out what's going on.

"Alexa, buy whole milk."

(Alexa) I couldn't find
anything for whole milk,

so I've added whole milk
to your shopping list.

SG: Then I asked,

"Alexa, buy organic foods."

(Alexa) The top search result
for organic food

is Plum Organic's baby food,

banana and pumpkin.

12 pack of four ounces each.

It's 15 dollars total.

Would you like to buy it?

SG: And then, as often
happens at my age,

I got confused.

"Alexa, buy Whole Foods."

(Alexa) 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.

(Laughter)

I thought that'd be funnier.

(Laughter)

We've personified these companies,

and just as when you're really angry
over every little thing someone does

in your life and relationships,

you've 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 one-percent pursuit

of shareholder value

and 99 percent the betterment of humanity

that 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 saved the world.

My mother was a four-year-old Jew
living in London at the outset of the war.

If we had not formed the footrace
towards splitting the atom,

would she have survived?

It's unlikely.

25 years later,

the most impressive accomplishment,

arguably ever in all of humankind --

put a man on the moon.

430,000 Canadians, Britsh
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 slingshots,

relative to the squirt gun.

They have the GDP of India to work at.

And after studying
these companies for 10 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 commonty 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 soul mission is
to tell another fucking Nissan.

My name is Scott Galloway,

I teach at NYU

and I appreciate your time.

(Applause)

Chris Anderson: Not planned,

but you prompted
some questions in me, Scott.

(Laughter)

That was a spectacular rant.

SG: Is this like Letterman?

When you do well,

he calls you onto the couch?

CA: No, no, you're going to the heart
of the conversation right now.

Everyone's aware that after years
of worshipping Silicon Valley,

suddenly the worm has turned,

and in such a big way.

To some people here,

it will just feel like you're piling on,

you're kicking the kids who've
already been kicked to pieces anyway.

Don't you feel any empathy
for them at all?

CG: None whatsoever.

Look, this is the issue.

It's not their fault, it's our fault.

They're for-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
endures full-stop.

CA: There's another narrative

that is arguably equally
consistent with the facts,

which is that there actually is good
intent in much of the leadership --

I won't say everyone necessarily --

many of the employees.

We all know people who work
in those companies,

and they still are pretty convincing

that their mission is to do --

so the alternative narrative

is that there have been
unintended consequences here,

that the technologies
that we're unleashing,

the algorithms that we're attempting
to personalize the internet,

for example,

have a) resulted in weird effects
like filter bubbles

that we weren't expecting,

and b) made themselves vulnerable
to weird things like --

oh, I don't know,

Russian hackers creating accounts

and doing things that we didn't expect.

Isn't the unintended consequence
a possibility here?

SG: I don't think --

so I'm pretty sure statistically

they're no less or better people
than any other organization

that has 100,000 or more poeple.

I don't think they're bad people.

As a matter of fact,

I would argue that there's a lot
of very civic-minded, decent leadership,

but this is the issue.

When you control 90 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 them get out of control.

CA: So maybe the case
is slightly overstated?

I know at least a bit --

Larry Page for example,

Jeff Bezos --

I don't actually think
they wake up thinking,

"I've got to sell a fucking 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 that some of the things
that have happened as we might be.

So is there a different way
of framing this?

To say that when your model is advertising

that there are dangers there
that you have to take on more explicitly?

SG: I think it's very difficult
to set an organization up

as we do,

to pursue shareholder value
above all else.

They're not non-profits.

The reason people go to work there
is they want to create economic security

for them and their families,

mostly first and foremost.

And when you get to a point

where 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 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.

CA: Scott, eloquently put,

spectacularly 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.

Scott, thank you so much.

SG: Thanks very much.

(Applause)