The Four
Author: Galloway, Scott
Notes by: Jacopo Perfetti.

Chapter 1 The Four
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a retailer that refuses to pay sales tax, treats its employees poorly, destroys hundreds of thousands of jobs, and yet is celebrated as a paragon of business innovation.
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A computer company that withholds information about a domestic act of terrorism from federal investigators, with the support of a fan following that views the firm similar to a religion.
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A social media firm that analyzes thousands of images of your children, activates your phone as a listening device, and sells this information to Fortune 500 companies;
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An ad platform that commands, in some markets, a 90 percent share of the most lucrative sector in media, yet avoids anticompetitive regulation through aggressive litigation and lobbyists.
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are these entities the Four Horsemen of god, love, sex, and consumption? Or are they the Four Horsemen of the apocalypse?
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is a retailer worth more than Walmart, Target, Macy’s, Kroger, Nordstrom, Tiffany & Co., Coach, Williams - Sonoma, Tesco, Ikea, Carrefour, and The Gap combined.
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By achieving a paradoxical goal in business — a low - cost product that sells for a premium price — Apple has become the most profitable company in history.
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One of every six minutes online is spent on Facebook, and one in five minutes spent on mobile is on Facebook. 17
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No institution has the trust and credibility of Google: About one out of six queries posed to the search engine have never been asked before.
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General Motors created economic value of approximately $ 231,000 per employee (market cap / workforce). 21 This sounds impressive until you realize that Facebook has created an enterprise worth $ 20.5 million per employee
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the Four hate each other. They are now competing directly, as their respective sectors are running out of easy prey.
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The Four are engaged in an epic race to become the operating system for our lives.
Chapter 2 Amazon
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THIRTY PERCENT OF U.S. households have a gun, and 64 percent have Amazon Prime. 1, 2 Wealthy households are more likely to have Amazon Prime than a landline phone. 3 Half of all online growth and 21 percent of retail growth in the United States in 2016 could be attributed to Amazon. 4, 5, 6 When in a brick - and - mortar store, one in four consumers check user reviews on Amazon before purchasing.
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Fundamental to business is the notion that in a capitalist society the consumer reigns supreme, and consumption is the most noble of activities.
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the well - publicized successes in retail, coupled with low barriers of entry and the dream of opening one’s very own “shoppe,” have created an industry that is overstored and, like most industries, in a state of constant flux.
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Of the ten biggest retailers in 1990, only two remain on the list in 2016.21
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Amazon, born in 1994, registered more revenue after twenty - two years in 2016 ($ 120 billion) than Walmart, founded in 1962, did after thirty - five years in 1997 ($ 112 billion).
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Dead man (retailer) walking begins with margin erosion — the cholesterol of retail — and ends with endless promotions and sales.
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In the United States and Europe, there have been six major stages of retail evolution.
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The Corner Store Retailing in the first half of the twentieth century was defined by the corner store. Proximity ruled the day.
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Department Stores London’s Harrods and Newcastle’s Bainbridge’s catered to a new market segment: emerging and affluent females who no longer felt bound by a chaperone.
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Call of the Mall As America barreled toward midcentury, the car and refrigerator meant we could drive farther to get more stuff we could store safely longer. Advances in distribution led to fewer visits, bigger stores, more selection, and lower prices. Department stores evolved into the mall.
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The Big Box
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The value proposition was clear and compelling: when you shop at Walmart, it’s similar to getting a promotion — you get a better life, featuring Heineken instead of Budweiser beer, and Tide instead of Sun detergent.
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Specialty Retail
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Walmart was the great leveler. But most consumers don’t want to be equal; they want to be special.
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The march toward “more for less” created a vacuum for consumers looking for expertise and a social signal of something aspirational about their lives.
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The retailer that truly defined the specialty retail era was The Gap. Rather than spending money on advertising, The Gap invested in store experience, becoming the first lifestyle brand.
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The E - Commerce Opportunity
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Bezos saw a technological shift, then used it to reconstruct root and branch the entire world of retailing. E - commerce would be a shadow of itself, had Bezos not brought his vision and focus to the medium.
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being virtual, Amazon can scale to hundreds of millions of customers, and scale across almost every retail industry, without the traditional drag of having to build brick - and - mortar stores and hire thousands of employees.
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In the early days, Amazon focused on books and hunters — people on a mission, looking for a specific product.
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Bezos knew he could migrate to things people weren’t used to buying online yet, like CDs and DVDs.
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To outrun competitors and reinforce the core value of selection, Amazon introduced Amazon Marketplace, letting third parties fill in the long tail. Sellers got access to the world’s largest e - commerce platform and customer base, and Amazon was able to balloon its offerings without the expense of additional inventory.
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Amazon Marketplace now accounts for $ 40 billion, or 40 percent, of Amazon’s sales. 33 Sellers, content with the massive customer flow, feel no compulsion to invest in retail channels of their own. Meanwhile, Amazon gets the data and can enter any business (begin selling products themselves) the moment a category becomes attractive.
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Scale is power, and Amazon was able to offer prices no brick - and - mortar retailer could afford.
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for the better part of Amazon’s first fifteen years in existence, traditional retail CEOs were apt to remind people that e - commerce only accounted for 1, 2, 3, 4, 5, 6 … percent of retail. There was never a concerted effort to respond to the threat until Amazon had enormous fangs and unlimited capital — it was too late.
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The company increased the number of robots in its warehouses 50 percent in 2016.39
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Amazon Go, a cashier - less convenience store, the firm entered the brick - and - mortar business.
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Other retailers, once again rocked back on their heels, are now scrambling to eliminate their own checkout processes.
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Echo is the speaker - like cylinder, and Alexa is its artificial intelligence,
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Amazon’s customers trust it so much that they’re allowing the company to listen in on their conversations and harvest their consumption data. This will give Amazon deeper penetration into the private lives and desires of consumers than any other company.
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Leveraging big data and unrivaled knowledge of consumer purchasing patterns, Amazon will soon meet your need for stuff, without the friction of deciding or ordering. I call this concept Prime Squared.
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Just as we witnessed the percentage of people working in agriculture decline from 50 percent to 4 percent in a century, we’ll see a similar drop over the next thirty years in retail.
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Pretty soon it will know more about our shopping preferences than we know ourselves. And we’re cool with that — we will have voluntarily handed over all that information.
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Amazon raised $ 2.1 billion in investors’ money before the company (sort of) broke even.
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Through storytelling, outlining a huge vision, Amazon has reshaped the relationship between company and shareholder.
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The Story: Earth’s Biggest Store. The Strategy: Huge investments in consumer benefits that stand the test of time — lower cost, greater selection, and faster delivery.
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Amazon has trained the Street to hold them to a different standard — to expect higher growth but lower profits.
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That enables the company to take the (substantial) incremental gross margin dollars it earns each year and plow more capital back into the business — and avoid that whole tax thing. And that in turn funds the digging of deeper and deeper moats around the business.
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Through earnings call after earnings call, Amazon reinforces its vision of growth, downplays profits, and reminds its shareholders that it doesn’t ever pay dividends.
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It’s storytelling, but in a Harry Potter way, where the next story is better than the original.
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Mr. Bezos bifurcates Amazon’s risk taking into two types of investments: Type 1 — those you can’t walk back from (“This is the future of the company”); and Type 2 — those you can (“This isn’t working, we’re out of here”). 52
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“biggest mistakes in business history,” the majority of results are risks that firms failed to take, such as Excite and Blockbuster
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History favors the bold. Compensation favors the meek.
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They play not to lose, and shareholders reward them for it — until those shareholders walk and buy Amazon stock.
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As Bezos also wrote in that first annual letter: “Failure and invention are inseparable twins. To invent you have to experiment, and if you know in advance that it’s going to work, it’s not an experiment
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This failure gene is at the heart of Amazon’s and, more broadly, the U.S. economy’s success.
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Most uber - wealthy people have one thing in common: failure.
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Amazon did not turn its first profit until Q4 2001, seven years after its founding, 61 and has dipped in and out of profitability ever since.
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while the world still thinks of Amazon as a retailer, it has quietly become a cloud company — the world’s biggest.
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Amazon Media Group, the company’s advertising business, grew 58 percent year - over - year
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Amazon is building the most robust logistics infrastructure in history.
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The final brick in Amazon’s strategy for world domination is its use of shitloads of assets piled up online to conquer the retail landscape offline.
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So, stores are here to stay — if we are careful what stores we’re talking about. But so is e - commerce. Ultimately, the real winners will be those retailers who understand how to integrate both. Amazon aims to be that company. We are now in the multichannel era — a time when integration across web, social, and brick and mortar is crucial to success.
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Amazon’s fulfillment costs have grown 50 percent since Q1 2012.93 That’s not sustainable, unless Amazon can garner membership fees and charge others to use its infrastructure … which is exactly where the company is headed.
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The sun has passed midday on the brand era.
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Brands are shorthand for a set of associations that consumers use for guidance toward the right product.
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when shopping habits migrate online, the design and feel of a product matter much less. There is no visual merchandising, no endcaps with carefully displayed products.
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With voice, consumers don’t know the price or see the packaging and are less likely to include the brand in their request. Fewer and fewer searches contain a brand name. 94 Consumers are willing to price - compare several brands, and Amazon gives them just that opportunity. The death of brand, at the hand of Amazon, and in particular Alexa, can be foreshadowed in search queries.
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Death, for brands, has a name … Alexa.
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The reason Jeff Bezos is advocating a guaranteed income for Americans is he has seen the future of work and, at least in his vision, it doesn’t involve jobs for human beings. At least not enough of them to sustain the current workforce.
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Amazon’s growth will result in the destruction of 76,000 retail jobs this year.
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Amazon isn’t unique among the Four in this regard: all do more with less, and all put people out of work.
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Amazon now offers everything you need, before you need it, delivered in an hour to the 500 million wealthiest households on the planet. Every consumer firm can pay a toll to access an infrastructure less expensive to rent from Amazon than to build itself. Nobody has the scale, trust, cheap capital, or robots to compete.
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Amazon’s triumph will mean a lot of losers — not just individual companies, but entire industry sectors.
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Obviously, grocery is one of those doomed sectors. It had it coming. This, the largest consumer sector in America ($ 800 billion107), has been where innovation goes to die.
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Restaurants will suffer too, as meal prep at home will be made easier by lightning - fast delivery
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The biggest loser? Easy: Walmart.
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The wealthiest man in the twentieth century mastered the art of minimum - wage employees selling you stuff. The wealthiest man of the twenty - first century is mastering the science of zero - wage robots selling you stuff.
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hard — or impossible — to compete with a giant who doesn’t need to make money, 115 and who reinvests earnings into deeper moats against the competition
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Google is, relatively speaking, losing to Amazon. Amazon is Google’s largest customer and is better at optimizing search than Google is at optimizing Amazon.
Chapter 3 Apple
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anybody who matters in the consumer world is for Apple.
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We thus have, in essence, fetishized the iPhone, and in the process opened the door to a new kind of corporate extremism to emerge.
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The resulting two - tiered system creates a winner - take - all environment that adds further fuel to the flames of inequality.
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The sector that has inspired Apple’s modern - day strategy is the luxury industry.
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The Cupertino firm controls 19.2 percent of the smartphone market, but captures 87 percent of global smartphone profits
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When luxury works, the act of spending itself is part of the experience.
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likely only 1 percent of the world can (rationally) afford them — and that’s how Apple wants it.
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luxury brands
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share five key attributes: an iconic founder, artisanship, vertical integration, global reach, and a premium price.
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1. An Iconic Founder
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Nothing builds a self - expressive benefit brand more effectively than the constant personification of the brand in the form of one person, especially the founder.
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CEOs come and go, but founders are forever.
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Dying removes the icon from the inevitable judgment of everyday existence, including aging, and elevates persona to legend — ideal for a brand.
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It doesn’t matter if the iconic founder was a jerk in real life. Apple proves this. The world has created a Jesus - like hero worship of Steve Jobs. In reality it appears that Steve Jobs was not a good person, and a flawed father.
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2. Artisanship
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Success in luxury comes from minute attention to detail and expert, almost superhuman, craftsmanship
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Apple’s language of luxury is simplicity, the ultimate sophistication.
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As an old iMac ad put it, Apple technology is “Simply amazing, and amazingly simple.”
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3. Vertical Integration
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The stores, of course, changed the tech industry — and advanced Apple as a luxury company.
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Walk up Fifth Avenue or the Champs Élysées, and you see Vuitton, Cartier, Hermès, and Apple.
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It wasn’t the iPhone, but the Apple Store, that defined Apple’s success.
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4. Global
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Rich people are more homogeneous than any cohort on earth.
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Fill a room with middle - class people from around the world, and you have diversity.
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The global elite, by contrast, is a rainbow of the same damn color.
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That’s why it’s easier for luxury brands to permeate geographic boundaries than mass market peers.
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Apple also runs a global supply chain.
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5. Price Premium
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High prices signal quality and exclusivity.
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If Hermès marketed a scarf for $ 19.95, most existing customers would lose interest.
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The most likely to tank under the Apple onslaught are the mid - level luxury companies, the ones selling stuff for less than $ 1,000
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On the other hand, that $ 51 billion lost to Apple shouldn’t affect platinum brands, such as Porsche or Brunello Cucinelli. Their customers can afford everything, and don’t have to choose.
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Steve Jobs’s decision to transition from a tech to a luxury brand is one of the most consequential — and value - creating — insights in business history.
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Apple is the only firm among the Four Horsemen, at least for now, that has thrived post the original founder and management team.
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technology firms experience the traditional company life cycle at an increased speed.
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Apple recognized that the CEO after Steve Jobs needed to be an operator who understood how to scale the firm.
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Apple’s business today is to sell to people goods, services, and emotions
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You used to be what you wore, and some now believe you are what you eat. But who you really are has become what you text on.
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Jobs understood, as none of his peers did, that
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if you wanted to sell electronics hardware as premium - priced luxury items, you had to sell them like other luxury items.
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And once you had accomplished that, you could sell almost anything in that store — as long as it was elegant, stylishly boxed, and shared the common design tropes with its more expensive peers.
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It is why Apple commands margins that no tech company has ever enjoyed, having scaled impossible heights — the premium - priced product, and the low - cost producer.
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barriers to entry.” They are nice in theory, but, increasingly, traditional walls are showing cracks,
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once you’ve made the jump to light speed as a tech firm, you need to immunize yourself from the same conquering weapons your army levied on the befuddled prey.
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network effects
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IP protection
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developing an industry standard — monopoly — ecosystem
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However, I’d argue that digging deeper moats is the real key to long - term success.
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digital sales are still only 12 percent of retail. 44 It’s not stores that are dying, but the middle class, and the stores serving them.
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The middle class used to be 61 percent of Americans. Now they are the minority, representing less than half the population … the rest being lower or upper income.
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Google and Samsung are both coming for Apple. But they are more likely to produce a better phone than to replicate the romance, connection, and general awesomeness of Apple’s stores.
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So, every successful firm in the digital age needs to ask: In addition to big, tall walls, where can I build deep moats?
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Apple has done this superbly, continually investing in the world’s best brand, and in stores.
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Luxury insulates the Apple brand, and hoists it above the price wars raging below.
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At some point, does Apple have an obligation to spend its cash?
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My suggestion: Apple should launch the world’s largest tuition - free university.
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As the world rushes to STEM, the future belongs to the creative class, who can envision form, function, and people as something more — beautiful and inspiring — with technology as the enabler.
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the same sickness all of us academics are infected with: the pursuit of prestige over social good.
Chapter 4 Facebook
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IF SIZE MATTERS (it does), Facebook may be the most successful thing in the history of humankind.
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The company owns three of the five platforms that rocketed to 100 million users the fastest: Facebook, WhatsApp, and Instagram.
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People spend more time on the platform than any behavior outside of family, work, or sleep.
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Facebook is gaining influence faster than any enterprise in history.
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If you look at the influences that convince a consumer to spend money, Facebook has flooded the awareness stage, the top of the marketing funnel.
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What we learn on the social network, and especially on Facebook’s subsidiary Instagram, creates ideas and desires.
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No other media firm in history has combined Facebook’s scale with its ability to target individuals. Each of Facebook’s 2 billion users has created his or her own page, with years’ worth of personal content.
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Facebook, by analyzing every bit of data about us, might come closer to understanding us than our friends.
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Relationships make us happier.
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The study found that the depth and meaningfulness of a person’s relationships is the strongest indicator of level of happiness.
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At its best, Facebook both taps into our need for these relationships, and helps nourish them.
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When friends post pics of their new baby, we get a delicious hit: dopamine.
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Empathy is what makes us more human. The explosion in images distributed on social media platforms has led to more empathy,
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single people communicate more on Facebook. It’s part of the preening of courtship. But once they enter a relationship, communication plummets.
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The Facebook machine tracks this and runs it through a process called “sentiment analysis” — categorizing positive and negative opinions, in words and photos, of each person’s level of happiness. And as you might expect, coupling significantly increases happiness (though there appears to be a dip following the initial euphoria).
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What do most of these firms have in common? They use the peanut - butter - and - chocolate combination of receptors (users) and intelligence (algorithms that track usage to improve the offering).
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This is tantamount to a car that becomes more valuable with mileage. We now have a Benjamin Button class of products that age in reverse.
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Wearing your Nikes makes them less valuable. But posting to Facebook that you are wearing Nikes makes the network more valuable. This is referred to as “network effects” or “agility.” Not only do users make the network more powerful (everyone being on Facebook), but also when you turn on Waze, the service gets better for you based on others’ experience, updated in seconds to calibrate traffic patterns.
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Facebook. It crushes on both reach and intelligence.
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Facebook is a Burmese python consuming a cow. While the cow goes in, the snake takes its shape. After digesting, it returns to its normal shape, but bigger.
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The birthing, and killing, of new products makes Facebook the most innovative big company on earth.
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Much of this innovation comes gratis. Facebook benefits from the ultimate jujitsu move: it will likely become the largest media company on earth, and it gets its content, similar to Google, from its users.
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By comparison, the big entertainment companies must spend billions to create original content. Netflix is shelling out more than $ 100 million for each season of The Crown and will spend $ 8 billion on content in 201821
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When you have the Facebook app open on your phone in the United States, Facebook is listening … and analyzing. Anything you do involving Facebook is likely to be gathered and stored.
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Facebook has a product, Pixel, that’s installed on hundreds of thousands of websites and apps. It allows Facebook and advertisers to track your web and app activity, and serve you relevant ads.
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you carry a cell phone and are on a social network, you’ve decided to have your privacy violated, because it’s worth it.
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But the Cambridge Analytica scandal in March 2018 revealed that most of us were unaware the extent to which our personal data was being used.
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Facebook’s interests are increasing its user base and time spent on the site. That entailed sharing your data with third - party apps without your knowledge, and despite being warned specifically against this practice by the FCC in 2011.33
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Deleting Facebook doesn’t do much to protect your personal information from being misused. The site has already harvested your data, created a detailed data set on you, and made it part of the ad targeting it offers to millions of advertisers. Even if you delete Facebook, it has Pixels on other sites you go to that will keep adding to its data set.
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Combined, Facebook and Google control 51 percent of global mobile ad spend, and their share grows every day.
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Advertisers need Facebook much more than Facebook needs any one, or thousand, advertisers.
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virtual reality, and that’s where Facebook stole the march on the industry.
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“VR will open up new worlds.” Spoiler alert: it hasn’t.
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Virtual reality is the mother of all head fakes.
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VR will be to Zuck what Gallipoli was to Churchill, a huge failure that shows he can be (very) wrong, but won’t slow his march toward victory.
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old media isn’t going away; it will just be a shitty place to work or invest.
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The Times sprayed bullets across their feet letting Google crawl their data. With Facebook Instant Articles, the Times and other media firms participating in the program put the gun in their mouth. We have learned nothing.
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Forty - five percent of Americans, and much of the world, turns to Facebook for its news.
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Yet Facebook doesn’t want to be seen as a media company. Neither does Google.
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Because media companies only get a mildly insane valuation,
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Another reason
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Respectable companies in the news business recognize their responsibility to the public and try to come to grips with their role in shaping the worldview of their customers.
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Not everything is clicks and dollars. But for Facebook, it is.
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Facebook’s sole mission is to make money. Once the company’s success is measured in clicks and dollars, why favor true stories over false ones?
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one click = one click.
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Pizzagate — the conspiracy theory that the Hillary Clinton campaign was running a child prostitution ring out of a pizzeria
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Nine percent of the electorate and 46 percent of Trump voters believed it was true.
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Fake news stories are a far greater threat to our democracy than a few whack jobs wearing white hoods.
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Getting rid of them would force Facebook to accept responsibility as the editor of the world’s most (or second most) influential media company.
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Facebook attempts to skirt criticism of its content by claiming it’s not a media outlet, but a platform.
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Facebook has become, de facto, the largest news media firm in the world. The question is, does news media have a greater responsibility to pursue, and police, the truth?
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It’s easier to fool people than to convince them they’ve been fooled.
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Only human fact checkers can ascertain if a story is fake or not, and how high on the scale of credibility.
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Facebook already has rules — it famously deleted the iconic image from the Vietnam War of “Napalm Girl”
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The AI did not recognize it. But Pizzagate was okay, since it was “free speech.”
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Facebook has embraced the healthy gross margins and celebrity of a media company, but is allergic to the responsibilities of a media firm.
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The majority of media firms accept the responsibility of applying an expensive attribute: discretion.
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The fulcrum is reverence for and maintenance of Facebook’s profit margins, versus ensuring the world’s largest media firm can’t be weaponized by our enemies.
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Vladimir Putin. The most innovative thing of 2016 wasn’t the Apple Watch or Alexa, but Russia’s weaponization of our pride and joy, Facebook.
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The greatest threats to modern civilization have come from people and movements who had one thing in common: controlling and perverting the media to their own devices in the absence of a fourth estate that was protected from intimidation and expected to pursue the truth.
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A disturbing aspect of today’s media duopoly, Facebook and Google, is their “Don’t call us media, we’re a platform” stance. This abdication from social responsibility, enabling authoritarians and hostile actors to deftly use fake news, risks that the next big medium may, again, be cave walls.
Chapter 5 Google
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Believers are more likely to survive than their atheist friends. 2 However, religion in mature economies is dying.
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Over the last twenty years in the United States, the number of people who claim no religious affiliation has increased by 25 million.
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More than anything else, we want to know.
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The logical part of the brain, the cerebrum, is able to (mostly) calm the reptilian fear brain with facts.
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Google answers every question.
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if you have a smartphone (88 percent of consumers) 8 or an internet connection (40 percent), 9 you can have any question answered
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Apple is considered the most innovative company in the world. 10 Amazon, the most reputable (whatever that means). 11 Facebook is thought of as the best firm to work for. 12 But the trust we place in Google is unrivaled.
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Google bolsters its godlike pose by denoting clearly which search results are organic and which are paid. This boosts confidence in its search, since it seems to be untethered from the marketplace.
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organic search preserves neutrality, while paid content allows ad revenue.
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Similar to other horsemen, Google tends to drive prices down, not up. Most consumer firms push in the other direction. They spend a lot of time trying to calculate the maximum price they can charge
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Google works differently, which is why it has grown dramatically year after year after year. And like the other horsemen, it sucks the profits out of its sector.
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the string of search queries that come barreling out of our lizard brains … that’s where the really crazy shit can be found.
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We believe, naively, that nobody (but the Big Guy) can listen to our thoughts. But let’s be clear … Google too is listening.
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There are 3.5 billion search queries a day, 20 so in essence the search algorithm gets one three - billionth better every time you search.
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But that’s not always the case.
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Traditional marketing sorted us into tribes: Latinos, hicks, retirees, sports fans, soccer moms, and so on.
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But with Google, our queries — along with the photos, emails, and all the other data we provide — identify us as individuals with distinct problems, goals, and desires.
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Google leaves the hard, expensive stuff to others and just gives the people what they want after they’ve raised their digital hand and said, “I want something like this.”
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Even better, Google pairs people with companies, via AdWords, before they may even know what they want
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Google and Facebook do a better job extracting value from Times journalists than the management of the Times. I believe if the Times had refused to let any of its content on the Facebook or Google platforms, those younger companies would be worth at least 1 percent less. New York Times articles give these platforms tremendous credibility, and the Times in return gets … very little.
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Here’s the rub: as it was handling those searches, Google also was learning — better than the Times itself — exactly what the paper’s readers wanted and were likely to want in the future. And that meant Google could target those Times readers with far greater precision and make more money from each ad. As much as ten times more. That meant we were exchanging dollars for dimes. We should be running our own ads on our sites. What idiots we were.
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We committed one of the great missteps in modern business history. Overnight we took a luxury brand, spread it through sewer - like distribution, and let the sewer owner charge less for it than we were charging in our own store, through subscriptions.
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If Apple has managed to achieve a degree of immortality by converting itself into a luxury goods company, Google has accomplished the opposite: it has made itself into a public utility.
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Its market dominance is so great that it’s in perpetual risk of antitrust suits at home and abroad.
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So, despite its enormous market dominance — the greatest of any of the Four — Google is also uniquely vulnerable.
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Google may have had just one product (that made money), but it was world changing, and the company did everything right.
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behind the curtain, Google was undertaking one of the most ambitious strategies in business history: to organize all of the world’s information. In particular, to capture and control every cache of productive information that currently existed on, or could be ported to, the web. And with absolute single - mindedness, the company has done just that.
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Google’s control of knowledge is now so complete, and the barriers to entry by competitors so great (look at the marginal success of Microsoft’s Bing), that the firm might maintain control for years.
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Congress and the Justice Department might just decide the search engine is a public utility and regulate the firm as such.
Chapter 6 Lie to Me
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STEALING IS A core competence of high - growth tech firms.
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As with professional athletes, we tend to focus on the stories of the few who make it — and not the thousands who never get past the minor leagues.
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The sins of the horsemen fall into one of two types of cons. The first is taking — which often means stealing IP from other companies and repurposing it for profit, only to viciously protect that IP once they’ve amassed a lot of it. The second is profiting from assets built by someone else in a manner unavailable to the originator. The first means that the future horsemen don’t have to depend upon their native ingenuity to come up with innovative ideas — and throwing lawyers at those who try the same thing to them means they won’t be victims, too. The second is a reminder that the so - called first - mover advantage is usually not an advantage.
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horsemen, arriving later (Facebook after Myspace, Apple after the first PC builders, Google after the early search engines, Amazon after the first online retailers), get to feed off the carcasses of their predecessors by learning from their mistakes, buying their assets, and taking their customers.
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Con # 1: Steal and Protect
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Theft has been the strategy of business leaders and nations for centuries. Leveraging other people’s ideas to inspire new inventions and stronger iterations is at the foundation of many successful firms. Apple wasn’t the first to create a smartphone. Google wasn’t the first to build a search engine. They just figured out a way to do it better — a lot better.
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Perhaps the most obvious “theft” in recent tech is Facebook’s continuous adoption of Snapchat’s features.
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The point is not that young companies just “steal” things to become great, but they see value where others don’t, or are able to extract value where others can’t. And they do so by whatever means necessary.
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Con # 2: Not Stealing, Just Borrowing
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Another way the Four cheat is by borrowing your information, only to sell it back to you. Google is a good example.
Page 156 · 2301
information could be given away free with one hand, while made very, very profitable with the other.
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It takes advantage of the declining costs of distribution by giving its users access to a world of previously expensive information, then extracts billions in value by being the new gatekeeper.
Page 159 · 2344
Facebook gets its users to create the content, then it sells that content to advertisers so they can advertise to the users who made it.
Page 159 · 2346
Facebook built its foundation on a second lie,
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“Build big communities and you will own them.”
Page 159 · 2348
Hundreds of brands invested hundreds of millions on Facebook to aggregate enormous branded communities hosted by Facebook. And by urging consumers to “like” their brands, they gave Facebook an inordinate amount of free advertising. After brands built this expensive house, and were ready to move in, Facebook barked, “Just kidding, those fans aren’t really yours; you need to rent them.” The organic reach of a brand’s content — percentage of posts from a brand received in a fan’s feed — fell from 100 percent to single digits. Now, if a brand wants to reach its community, it must advertise on — that is, pay — Facebook.
Page 160 · 2355
Nike paid Facebook to build its community, but now less than 2 percent of Nike’s posts reach that community — unless, that is, they advertise on Facebook.
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Brands eagerly pumped money into building Facebook communities before realizing they weren’t their own. Sellers are quick to join Amazon, believing the platform provides them access to a new swath of customers, but then find themselves in competition with Amazon itself.
Chapter 7 Business and the Body
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all successful businesses appeal to one of three areas of the body — the brain, the heart, or the genitals.
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Gray Matter The brain is a calculating, rational thing. To do its job, the brain weighs costs and benefits, balancing tradeoffs by the millisecond.
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This translates, in the business world, to lower margins. For most businesses, the consumer’s brain is the ultimate buzzkill and competitor.
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handful of companies address their customers’ brains, appeal to our rational selves, and manage to win.
Page 165 · 2425
Bighearted The heart is a vast market. Why? Because most of our actions, including purchases, are driven by emotion.
Page 165 · 2428
The heart is also powered by the greatest force in history: love.
Page 166 · 2440
Love is also the key to seasonal promotion,
Page 166 · 2442
For a marketer, each string tugging at the consumer’s heart translates to margin. There’s (among others) beauty, patriotism, friendship, masculinity, devotion, and above all, love. These are values you can’t put a price on — but marketers do.
Page 166 · 2447
The digital age, with its transparency and innovation, has declared war on the heart.
Page 167 · 2457
Erogenously Yours With appeals to the heart increasingly difficult, brands that appeal to the genitals are thriving. These organs drive desire and the relentless instinct to procreate. After survival, nothing rings louder in our ears than sex.
Page 168 · 2467
We’re irrational and generous when under the influence.
Page 168 · 2468
Luxury brands have understood this for centuries. They bypass cognition and love, tying their business to sex and the broader and pleasure - packed ecosystem of mating rituals.
Page 169 · 2485
Google. It speaks to the brain,
Page 170 · 2506
Facebook, by contrast, appeals to our hearts.
Page 171 · 2520
Apple has migrated further down the torso. Its self - expressive, luxury brand appeals to our need for sex appeal.
Chapter 8 The T Algorithm
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Among the Four, these eight factors are prevalent: product differentiation, visionary capital, global reach, likability, vertical integration, AI, accelerant, and geography.
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1. Product Differentiation
Page 177 · 2586
The key competence around building shareholder value in retail used to be location.
Page 177 · 2587
Then it was distribution.
Page 177 · 2589
We then moved to an era of product,
Page 177 · 2594
As discussed in the second chapter, we are again back to an era of product, as new technologies and platforms — be it Facebook or Amazon user reviews — let consumers conduct diligence across a broad array of products in a fraction of the time it used to take to shop.
Page 177 · 2598
the injection of digital “brains” into otherwise static, inanimate products has ushered in a new wave of innovation in which custom, personalizable apps can be quickly downloaded and upgraded
Page 178 · 2608
All of a sudden, products driven by technology and defensible IP are the bomb.
Page 179 · 2617
When brainstorming for new ideas, entrepreneurs have a tendency to focus on what can be added — how to enhance the experience — instead of what can be taken away, thus making it less painful. But I’d argue that the majority of stakeholder value created over the last decade has been a function of removal.
Page 179 · 2628
while it may seem that the value explosion brought by the technology revolution comes from the addition of new features and capabilities, its greater contribution comes from removing obstacles and time killers from our daily lives.
Page 179 · 2630
Friction is everywhere. For example, there is a ton of friction in transportation. That’s why Uber saw an opportunity,
Page 180 · 2634
paying is friction, and it is disappearing
Page 180 · 2636
Each of the Four has a superior product. It sounds old school, but Google really does have a superior search engine. The Apple iPhone is a better smartphone. The cleanliness of Facebook’s feed — coupled with the “network effect” (the fact that everybody’s on it) and a constant stream of new features — makes it a better product. Amazon redefined the shopping experience and expectations: from 1 - click ordering to getting your product within two days
Page 180 · 2641
“Product” is experiencing a renaissance, and is the first factor in the T Algorithm.
Page 180 · 2643
2. Visionary Capital The second competitive factor among the Four is the ability to attract cheap capital by articulating a bold vision that is easy to understand.
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Google’s vision: Organizing the world’s information.
Page 181 · 2648
Facebook’s vision: Connecting the world.
Page 182 · 2663
The strength of visionary capital begets competitive strength. Why? Because you can more patiently nurture assets (invest) and place more bets on more pockets of innovation
Page 182 · 2669
3. Global Reach The third factor in the T Algorithm is the ability to go global. To be a truly large, meaningful company, you need a product that leaps geographic boundaries and appeals to people on a global scale.
Page 183 · 2686
Apple today defines what it means to be global: the brand has largely been accepted in every sovereign nation.
Page 183 · 2687
Facebook has 83 percent of its users outside the United States4
Page 184 · 2693
4. Likability The world of commerce is regulated. Government, independent watchdog groups, and the media play a large role in a company’s growth. If you are perceived as a good actor, a good citizen, caring about the country, its citizens, your workers, the people in your supply chain that get you the product, you have created a barrier against bad publicity
Page 186 · 2730
5. Vertical Integration The fifth factor in the T Algorithm is the ability to control the consumer experience, at purchase, through vertical integration. All of the Four control their distribution. If they don’t produce the product, they source it, they merchandise it, they retail it, and they support it.
Page 186 · 2732
Levi’s went from $ 7 billion to $ 4 billion from 1995 to 2005 because it didn’t have control of its distribution.
Page 188 · 2755
6. AI The sixth factor in the T Algorithm is a company’s access to, and facility with, data. A trillion - dollar company must have technology that can learn from human input and register data algorithmically
Page 188 · 2765
The new marketing is behavioral targeting. And it works: nothing can predict your future purchases like your current activities.
Page 188 · 2769
Thanks to artificial intelligence we now can track behavior at a level and scale previously unimaginable.
Page 190 · 2795
No one has been able to aggregate more intention data on what consumers like than Google. Google not only sees you coming, but sees where you’re going.
Page 191 · 2812
Amazon has 350 million credit cards and shopper profiles on file. More than any company on earth, it knows what you like.
Page 192 · 2821
7. Accelerant The seventh factor in the T Algorithm is a company’s ability to attract top talent. This requires being perceived by likely job candidates as a career accelerant.
Page 193 · 2839
8. Geography Geography matters.
Page 193 · 2842
The ability to develop and lubricate a pipeline with the best engineering talent from one of the best schools in the world is the eighth factor in the T Algorithm.
Page 194 · 2850
In addition, two - thirds of the world’s GDP growth over the next fifty years will occur in cities. Cities will not only attract the best talent, but manufacture the best talent.
Chapter 9 The Fifth Horseman?
Page 195 · 2867
Two of them, Facebook and Google, dominate categories that did not exist twenty - five years ago. The other two, Amazon and Apple, are in well - established sectors. But while Amazon has overwhelmed its competition through brutally efficient operational prowess and access to cheap capital, Apple led product innovation and secured leadership at the high end
Page 196 · 2875
We also can’t presume that the current Four Horsemen are all guaranteed to hold their positions for decades to come.
Page 196 · 2884
Now, let’s look at the contenders.
Page 197 · 2886
Page 198 · 2894
size matters, and nobody manages more retail trade than Alibaba. It makes up 55 percent of China’s e - commerce, and 54 percent of packages that travel via Chinese post originate from an Alibaba business.
Page 199 · 2923
Alibaba comes up short on visionary capital and has struggled to master storytelling — not just with consumers, but with investors, as Alibaba’s opaque governance clouds the story.
Page 199 · 2927
a critical limitation to Alibaba’s long - term success is the company’s entanglements with the Chinese government.
Page 201 · 2949
Page 202 · 2964
This is a horseman - grade achievement around storytelling.
Page 202 · 2964
quite a few variables stand between Tesla today and becoming a Fifth Horseman at some point in the future.
Page 202 · 2966
set up vast networks of charging stations and service stations
Page 202 · 2969
Compare Tesla to our criteria.
Page 202 · 2969
Its product is unparalleled in quality
Page 202 · 2972
Tesla controls the customer experience in a way that no other car company has done,
Page 202 · 2976
Tesla’s most revolutionary change to the auto industry is not its electric engine — everyone is building those — but its proximity to the customer.
Page 203 · 2982
In April 2017 Tesla surpassed Ford in market value despite selling 80,000 cars in 2016 vs. Ford’s 6.7 million.
Page 204 · 3000
Still, there remain two big obstacles to Tesla in its race to the stable.
Page 204 · 3000
First, it’s not yet a global firm — the majority of its business is done in the United States.
Page 204 · 3001
Second, Tesla doesn’t have a ton of customers, so it doesn’t possess data on individual behavior at scale yet.
Page 205 · 3004
Uber As I write this in March 2018, around 2 million people drive for Uber (called “Driver Partners”), 22 which is more than the total number of employees of Delta, 23 United, 24 FedEx, 25 and UPS, 26 combined.
Page 206 · 3026
fails on vertical, as the cars are owned by the drivers, who often work with competitors.
Page 206 · 3026
Not owning cars has helped them scale fast, but it makes them vulnerable, as they have no analog moats.
Page 206 · 3027
Uber also has considerable big data skills — it knows where you are, where you’re going, where you’re likely to go, and it’s all linked to your identity.
Page 206 · 3034
Uber is more than just a car service. In fact, taxis are to Uber what books were to Amazon.
Page 206 · 3035
The real prize is leveraging its massive driver network (and soon, its massive self - driving car network).
Page 208 · 3059
The leave of absence narrative showed poor judgment on the part of the board, letting a bad situation get worse. Under pressure from investors, Kalanick resigned the following week.
Page 208 · 3073
Unfortunately for Uber, the market it’s disrupting is a heavily regulated one, and Uber benefits greatly by its attitude that it is not subject to the same regulations as traditional taxis.
Page 209 · 3079
Uber’s business model has been attacked for undermining employment relationships and creating unstable, low - wage work that can dry up without recourse.
Page 210 · 3091
Page 210 · 3092
With nearly 12,000 stores in 28 countries, it generated more revenue than any other company in the world in 2015, as it has every year in this century. 42
Page 210 · 3099
In late 2016 Walmart acquired for $ 3 billion,
Page 210 · 3101
it has a horseman skill: storytelling.
Page 210 · 3105
The firm has access to immense capital, but it’s not cheap,
Page 211 · 3108
Walmart is not very likable, as they are the largest employer in the world with more minimum - wage workers than any other U.S.
Page 211 · 3113
Page 211 · 3114
Windows still powers 89 percent of desktop computers
Page 212 · 3126
Microsoft has found new growth via its cloud offering,
Page 212 · 3133
Microsoft’s other growth story? LinkedIn.
Page 213 · 3142
Page 214 · 3155
Airbnb has another moat regarding product. Specifically, the liquidity of their product. Liquidity translates to having enough suppliers and customers who can be matched to make the service viable.
Page 215 · 3165
Their weakest point is their lack of vertical integration
Page 215 · 3168
Page 215 · 3173
the company still recorded $ 80 billion in revenue in 2016, and every year the mix shifts from legacy computer hardware toward high - margin services and recurring relationships.
Page 215 · 3176
IBM has a new, more handsome lead character in their story: Watson.
Chapter 10 The Four and You
Page 218 · 3203
no young person today should be ignorant of the Four and how they’ve reshaped the economy.
Page 218 · 3208
it’s never been a better time to be exceptional, or a worse time to be average.
Page 218 · 3209
That’s one of the major effects of the disruptive environment created by the rise of the lottery economy, wherein digital technology creates a single market in which one leader can capture the overwhelming majority of gains.
Page 219 · 3211
The bad news: there are more predators. The good news: the big fish in the big pond has a phat life.
Page 219 · 3217
Thanks to LinkedIn, everyone is on the global job market all the time. If you are exceptional, there are thousands of firms looking for, and finding, you. If you are good, you are now competing with tens of millions of other “good” candidates all over the planet — and your wages may stagnate or decline.
Page 220 · 3227
what behaviors help achieve the extra 10 percent? The
Page 220 · 3228
Excellence, grit, and empathy are timeless attributes of successful people in every field.
Page 220 · 3237
talent and hard work only get you in the top billion on the planet. There are other,
Page 221 · 3239
Nothing is more important than emotional maturity — especially for people in their twenties,
Page 221 · 3240
There are fewer and fewer fields in which a person reports to work with a single boss, a specific set of tasks, and the expectation that those parameters won’t change frequently or significantly.
Page 221 · 3241
By comparison, the digital - age worker must often respond to numerous stakeholders and shift between roles throughout the day — an environment that favors the mature.
Page 221 · 3243
How well someone manages their own enthusiasm through those cycles is important
Page 221 · 3247
People who are comfortable taking direction and giving it, and who understand their role in a group, do better than their peers when lines of authority get murky and organizational structures are fluid.
Page 221 · 3252
self - awareness, self - regulation, motivation, empathy, and social skills.
Page 221 · 3253
this skill favors women.
Page 222 · 3262
the future really is women.
Page 222 · 3262
The digital age is Heraclitus on steroids: change is a daily constant. In almost every professional environment, we are expected to use and master tools that did not exist a decade ago, or even last year.
Page 222 · 3264
organizations have access, essentially, to infinite amounts of data, and what might as well be an infinite variety of ways to sort through and act on that data.
Page 222 · 3265
At the same time, ideas can be turned into reality at unprecedented speed. The thing Amazon, Facebook, and no less hot firms, including Zara, have in common is they are agile (the new - economy term for fast).
Page 222 · 3267
Curiosity is crucial to success.
Page 222 · 3267
What worked yesterday is out - of - date today and forgotten tomorrow — replaced by a new tool or technique we haven’t yet heard of.
Page 222 · 3268
the telephone took 75 years to reach 50 million users, whereas television was in 50 million households within 13 years, the internet in 4, … and Angry Birds in 35 days. In the tech era, the pace is accelerating further: it took Microsoft Office 22 years to reach a billion users, but Gmail only 12, and Facebook 9.
Page 223 · 3276
Be an owner, in every sense of the word — your task, your project, your business. You own it.
Page 224 · 3281
If you want to be a white - collar success in the digital age, the clearest signal is attendance at a prestigious undergraduate school.
Page 224 · 3288
College grads make ten times more, over their lifetime, than people with just high school degrees.
Page 224 · 3291
go to college — you may even learn something. But even if you don’t, a brand - name college on your forehead will be your greatest asset until you have assets, and it will never stop opening doors.
Page 225 · 3295
No one likes to admit it, but the United States has a caste system: it’s called college.
Page 225 · 3305
the best schools will disrupt the system, not Massive Open Online Campuses (MOOCs) at mediocre colleges.
Page 225 · 3307
The friends you make on campus can be just as valuable.
Page 226 · 3311
The cost of college is ruinously expensive; four years’ tuition, plus room and board, at even a second - tier school can run you a quarter million dollars.
Page 227 · 3329
Winners, first and foremost, have to be competitors. You cannot win without stepping on the field, and it’s only by taking that risk (you may get beaned in the face), exposing yourself to failure, that real accomplishment is achieved.
Page 227 · 3337
Get to a City
Page 228 · 3342
More than 80 percent of the world’s GDP is generated in cities, and 72 percent of cities outperform their own countries in growth.
Page 228 · 3353
push the limits of your comfort zone by consistently pimping your attributes.
Page 228 · 3353
What’s your medium?
Page 229 · 3356
You need a medium to spread your awesomeness
Page 230 · 3381
Try to get equity as part of compensation
Page 231 · 3390
Nobody becomes superwealthy through paychecks — it takes equity in growing assets to create real wealth.
Page 231 · 3396
The path to rich (es) is a path of living below your means and investing in income - producing assets. Rich is more a function of discipline than how much you make.
Page 232 · 3405
The strategy is serial monogamy. Find a good employer where you can learn new skills, garner senior - level sponsorship (somebody who will fight for you), get equity / forced savings, and fully dedicate yourself to that company for three to five years. Don’t burn mental energy on your external options unless your current situation is awful.
Page 233 · 3417
Stay Loyal to People, Not Organizations
Page 234 · 3428
Take responsibility for your own career, and manage it.
Page 234 · 3428
People will tell you to “follow your passion.” This, again, is bullshit.
Page 234 · 3431
Don’t follow your passion, follow your talent. Determine what you are good at (early), and commit to becoming great at it. You don’t have to love it, just don’t hate it.
Page 235 · 3445
Nothing is ever as good or bad as it seems. All situations and emotions pass.
Page 235 · 3446
Regression to the mean is a powerful force, and the good luck (and a lot of it is luck) will cut the other way at some point. So, many entrepreneurs who make a lot of money on one venture turn around and lose a lot of it because they believe the victory was due to their genius and they should go bigger. At the same time, when beaten down, realize you are not as stupid as the world, at that moment, seems to think you are.
Page 235 · 3452
Go Where Your Skill Is Valued
Page 237 · 3465
Job stability counts if you want to have kids.
Page 237 · 3466
Join a band on weekends. Learn photography at night. Work on it a little at a time, until you have a nest egg to unleash it fully.
Page 238 · 3480
Ask for and Give Help
Page 238 · 3490
the hardest to find are the pragmatists.
Page 239 · 3494
Serial entrepreneurs share three qualities: a higher tolerance for risk can sell too stupid to know they are going to fail
Page 239 · 3496
Highly rational and intelligent people are usually not good entrepreneurs, especially serial entrepreneurs, as they can clearly see the risks.
Page 240 · 3508
The pragmatist CEO has no romantic notions about the company’s glory days (mostly because he or she wasn’t there) and never falls in love with the firm.
Page 240 · 3512
Where do I thrive in the alphabet? Think of companies and products having a life cycle, A – Z. Are you happiest at start - ups where you’re expected to wear a number of different hats (A – D), the inception / visionary stage (E – H), good at managing, scaling, and reinventing (I – P) … or can you manage a firm / product in decline, and do so profitably (Q – Z)? Few people are good across more than several letters.
Page 243 · 3551
In tech, many long tails are atrophying. Take digital advertising, for example. Facebook and Google accounted for 90 percent of U.S. digital advertising revenue growth in 2016.
Page 244 · 3571
Balance is largely a myth when establishing your career.
Page 245 · 3575
The world does not belong to the big, but to the fast. You want to cover more ground in less time than your peers.
Page 246 · 3592
how do you know if you’re an entrepreneur?
Page 246 · 3593
The traits of successful entrepreneurs haven’t changed much in the digital age: you need more builders than branders, and it’s key to have a technologist as part of, or near, the founding team. There are three tests or questions: Are you comfortable with public failure? Do you like to sell? Do you lack the skills to work at a big firm?
Chapter 11 Yes, and Now What?
Page 250 · 3645
They are organizations that have aggregated enormous power. Power corrupts, especially in a society infected with what the pope calls the “idolatry of money.”
Page 250 · 3646
These companies avoid taxes, invade privacy, and destroy jobs to increase profits because … they can.
Page 251 · 3649
The Four have created huge consumer value, incredible shareholder gains, innovation, and hundreds of thousands of high - paying jobs. They are a source of national pride. But there are drawbacks: the Four are not held to the same standards as the rest of business. The result is an ecosystem that favors the big and reduces competition.
Page 251 · 3660
Merely having your smartphone on your desk causes impairment of cognitive capacity. 3 The health effects of smartphones and social media are especially pronounced among children and adolescents.
Page 253 · 3689
Together the horsemen employ about 780,000 employees — the population of Charlotte, North Carolina. 19 If you combine the value of the Four Horsemen’s public shares of stock, it comes to $ 2.7 trillion. 20 That means our 2.0 version of Charlotte contains nearly as much wealth as the gross domestic product of France, a developed nation of 67 million citizens.
Page 254 · 3713
Unilever has a $ 150 billion market cap spread over 169,000 middle - class households. 22, 23 Intel has a $ 219 billion market cap and employs 107,000 people. 24, 25 Compare that to Facebook, which has a $ 448 billion market cap and 25,105 employees.
Page 255 · 3731
Over the past decade, Amazon, Apple, Facebook, and Google have aggregated more economic value and influence than nearly any other commercial entity in history.
Page 256 · 3748
The Four have so much power over our lives that most of us would be rocked to the core if one or more of them were to disappear.
Page 257 · 3761
By appealing to something loftier than mere profit, the Four are able to satisfy a growing demand among employees for so - called purpose - driven firms.
Page 258 · 3777
They Avoid Taxes
Page 258 · 3780
Between 2007 and 2015, Amazon paid only 13 percent of its profits in taxes, Apple paid 17 percent, Google paid 16 percent, and Facebook paid just 4 percent. 33 In contrast, the average tax rate for the S & P 500 was 27 percent
Page 260 · 3792
They Destroy Jobs The destruction of jobs by the Four is significant, even frightening.
Page 264 · 3851
If you don’t believe in the addictive aspects of these platforms, ask yourself why American teenagers are spending an average of five hours a day glued to their internet - connected screens.
Page 264 · 3860
The following are reasons I believe the Four should be broken up.
Page 264 · 3865
I believe that the primary purpose of the economy, and one of its key agents, the firm, is to create and sustain the middle class.
Page 265 · 3871
The upward spiral of an economy depends on the circular flow between households and companies. Households offer resources and labor, and companies offer goods and jobs.
Page 266 · 3878
Yet the productivity boost and the elevation of the consumer to modern - day nobility have created a dystopia in which we’ve traded well - paying jobs and economic security for powerful phones and coconut water delivered in under an hour.
Page 266 · 3885
Society is bifurcating into those who are part of the innovation economy (lords) and those who aren’t (serfs).
Page 267 · 3887
It’s never been easier to be a billionaire, or harder to be a millionaire. It’s painfully clear that the invisible hand, for the past three decades, has been screwing the middle class. For the first time since the Great Depression, a thirty - year - old is less well - off than his or her parents at thirty.
Page 267 · 3892
the bifurcation effect seems to be gaining momentum. It’s likely the biggest threat to our society.
Page 268 · 3903
The Four, by contrast, have managed to preserve their monopoly - like powers without heavy regulation.
Page 268 · 3905
Nevertheless, the Four’s exploitation of our knee - jerk antipathy to big government has been so effective that it’s led most of us to forget that competition — no less than private property, wage labor, voluntary exchange, and a price system — is one of the indispensable cylinders of the capitalist engine
Page 269 · 3921
During the trial, one witness reported that Microsoft executives had said they wanted to “cut off Netscape’s air supply” by giving away Internet Explorer for free.
Page 269 · 3926
but it’s worth asking whether Google
Page 269 · 3927
would exist if the DOJ hadn’t put Microsoft on notice regarding the infanticide of promising upstarts. In the absence of the antitrust case, Microsoft likely would have leveraged its market dominance to favor Bing over Google, just as it had used Windows to euthanize Netscape.
Page 269 · 3930
The concentration of power achieved by the Four has created a market desperate for oxygen.
Page 271 · 3954
34 percent—Amazon’s share of the worldwide cloud business66 44 percent—Amazon’s share of U.S. online commerce67 64 percent—U.S. households with Amazon Prime68 71 percent—Amazon’s share of in-home voice devices69 $1.4 billion—U.S. corporate taxes paid by Amazon since 2008 $64 billion—U.S. corporate taxes paid by Walmart since 2008.71 As of February 2018, Amazon has added the entire value of Walmart to its market cap in the past six months.72 What about Facebook? Eighty-five percent of the time we spend on our phones is spent using an app.73 Four of the top five apps globally—Facebook, Instagram, WhatsApp, and Messenger—are owned by Facebook.
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Google, for its part, commands a 92 percent share of a market, internet search,76 that’s worth $92.4 billion worldwide.
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Why should we break up big tech?
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because we understand that the only way to ensure competition is to sometimes cut the tops off trees, just as we did with railroads99 and Ma Bell.