Uber is 'disruptive and drunk', weWork is 'just drunk', ...

What this episode covers

Happy 1st anniversary to Pivot! Kara and Scott talk about weWork's halted IPO (we'll take partial credit). They talk about Amazon manipulating its algorithm to present more of its own products in search. Facebook is making its own "Supreme Court", is it just a band-aid? Should Kara Swisher be one of the Justices? (Yes). Fail: Trudeau -- and the (STILL) Governor of Virginia -- wearing black face. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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TRANSCRIPT · AUTO-GENERATED

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Go to vanta.com slash calm. Hey, Pivot listeners, today's show officially marks one full year of Pivot. In that time, Scott and I have talked every week from studios in Nantucket to basements in Paris and London to live stages at South by Southwest. And it's always been audio magic.

But, of course, this week, to celebrate our first year, we've had our first technical snafu. And Scott, through no fault of his own, had to call in from Florida. So bear with us this one week because our sound quality isn't quite up to Pivot standards. Thanks for hanging in for all of our antics and hijinks.

So without further ado, here's the show. Hi, everyone. This is Pivot from the Vox Media Podcast Network. I'm Kara Swisher.

And I'm Scott Galloway. And, Kara, I'm locked and loaded and just waiting on instructions from Saudi Arabia on what to do next. I'm waiting. You're waiting from Saudi Arabia.

Just like the president, I'm waiting for our allies to the Saudis to tell us what to do next. Oh, my God. There's actually a really disturbing story about the whistleblower. I think that's going to be interesting.

We'll have to talk about that next week. Yeah. It's developing. But we've been experimenting a lot on the show recently, going live, bringing on guests.

But today, Scott, today, it's Pivot's one-year anniversary. You remember. It's so nice to... You know what the reality is?

I don't think anyone else in the world could put up with your shenanigans or tolerate my awesomeness other than you. I think that's opposite. If you want to turn that around, black Spider-Man. It's just like, it's opposite.

Like, you are shenanigan full and I am here to pull you in. I think most people feel that. I think most people feel that that is what's going on here. In all seriousness, there is no one in the world I would rather offend for the rest of my life than you, Kara.

Oh, thank you so much. You know, people kind of literally... I was at a parent-teacher thing last night at the school and like three people were like, you and Scott! Like, on and on.

I was like, I don't like being at those things in the first place, but I have to say, people like our little game, our little witty banter and stuff like that. Yes, we are... Hashtag, we are awesome. Which we remind everybody of all the time.

But listen, we have done... We have done a recap. So behold this mighty recap of some of our timeless banter from our first year of our podcast matrimony. Scott, where are you?

Rebecca Q. Vivagner. That's right! A quick shout out to my dozens and dozens of messages.

Bitches, I am back! Liberating you from thoughtful conversation. General gestalt, you know, they say the saying is if you're not paying for something, you are the product. And that's how they treat us.

They treat us like a product that's inanimate. And I just... They aren't showing a certain level of respect, I think, for their consumers. I was talking to someone pretty high up at one of the tech companies, who isn't one of those social platforms.

And they're like, you know what's amazing? Around the world, like in New Zealand and Australia and Europe, they're already like making moves about how to fix this. And like, here, we're just deciding whether it's a problem. But that's the myth, Kara.

That's ridiculous. I wouldn't think of that. I'm like, you're right. They're like debating the problem.

And then not telling you about these breaches, to me, is, again, the same problem that there is not a federal law that requires immediate disclosure of these hacks. You and I are doing an off-Broadway show. We are? Let's get the same song.

Oh, my gosh. He's the lesbian journalist. He's an angry, depressed professor with erectile dysfunction. And their wacky neighbor is Evan Spiegel.

Come on! You buy tickets to that. I don't think so. You buy tickets to that.

That's a sad play. All right, fails. Wow. I'm sort of speechless.

I don't know what to make of that. I'm speechless. I don't know what to make of that. Was that a low light?

I was actually trying to get us canceled. Let's shit in the pond here and make sure there's not a year two. You know what? Your Wagner thing.

What's your music thing for this year? Wagner, whatever. So I'm kind of going down with the DJs. I'm in the midst of like a Bezos scale midlife crisis.

So I've decided I like DJs, which is totally ridiculous. Really? Calvin Harris is planning me out. I'm really into Calvin.

What do you listen to? What does Kara Swisher listen to? Whatever my sons are listening to. It's often hip-hop I don't understand.

That's really pretty much it. You know, the other night they put on some old song. Like, we have Sonos in our house, like in the walls, essentially. And they just put it on in my room all the time.

And that's what I listen to. But in general, country music, Scott. I like country music. You listen to country?

I do. I love country. I don't just listen to country music. I love country music.

Oh, my gosh. I would not have guessed that. Jesus Take the Wheel. Jesus Take the Wheel, Scott.

That's all I have to say. Anyway, I'm going to give you kudos. Because we work. We work.

Let's roll the tape of your prediction of yours has come true. If you look at WeWork, WeWork is now, by a lot of analyses, the floor they own in a large building is technically worth more than the building itself that it leases that floor from. And it's hard to see what kind of network effects or technology. Yeah, it just doesn't.

I think WeWork is going to be in the news for all the wrong reasons. That was January of this year. Scott, you have to say your big word. Gangster.

Oh, boom. That's right. Thank you. B double O to the M.

Hello, fans. That's right, ladies. Watch the shoulders. Spread a little scotch.

People are literally giving you a lot of credit for taking this down. I get side credit, but you're getting all the big credit for taking this thing down. No, you know who gets credit or what? You know what gets credit here?

What? Math. Math, I guess. Anyone who could do math said, okay, this makes no sense.

And, um, it's been, actually, we got, um, Aphrodite, my colleague at NYU, did a fantastic analysis of the company. But, but probably more than anything or any topic I've written about or spoken about, I've gotten more attention or inbound inquiries and more press attention on this. And then you kind of, you weighed in, but it's, it's, um, it's been a really fascinating, uh, uh, week. They pulled, you know, it's gone.

Think about this. It's gone from $47 billion in value to less than $10. It's probably more like five right now. So what we've seen in the last 30 days is arguably the greatest shedding of shareholder value of the last.

It's just one shareholder, right? SoftBank. Like, they're the ones that bought in big and maybe some, I don't think there were others, were there? Well, there's, there's quite a few, there's quite a few investors.

Yes. Of course. Yes. From JPMorgan, Adam Neumann to the employees.

But that's, you just touched on what the real, the next shoe to drop here. And that is, uh, the big, the stories are gonna start coming out on the impact this is going to have on SoftBank. Because SoftBank's two biggest investments, uh, from their vision or the first vision fund were Uber and WeWork. And someone's going to start marking their book.

And already one of their largest investors, the sovereign from Saudi Arabia, has said that they're only going to reinvest the profits from fund one, i.e. zero. That's the most polite way of saying, we're not investing in vision two fund. And also the, the Mubadala.

I'm sure I just massacred that fund out of the, I think it's the UAE, has said that they're reducing the size of their investment or the commitment for fund two. So this is eerily reminiscent of the 80s when everyone freaked out about the Japanese coming in and buying studios and golf courses the same way everyone's been freaking out about this dirty money coming in. And you know what? The kind of the best revenge is they lose money.

Yeah, exactly. And that is, they're probably going to lick their wounds and go home. So we're probably going to kick this money out accidentally by showing them really shitty returns at the hands of charismatic kind of gross, you know, charismatic idolatry driven founders who take money, take a billion dollars and turn it into 15 million. Well, what I want to do is do diligence.

But, you know, there's the fact is that the Wall Street Journal has been doing a great job on this. They wrote a story today about this pot smoking, which I thought you might like that part of the equation. He was on a plane. I think we're going to go public in 2021.

We are cutting the shit. We are focused on margin expansion. We're going to pretend we're a real business here and get everything back on track. It requires a plan.

Because in the end, it's just a real estate rental business, right? I mean, I just like, so they can't really get to like anything even close to that, you know. And then the competition, there's so many co-working spaces now, like everywhere. And it's got a big brand.

They do have a brand. They do have a brand. And if you do go into some, I have been into some of them and thought, this is a nice place to work. They have created something differentiated here.

A differentiated product. Can't command margins. It could be a company worth three to $5 billion. They've invested 12.

They need some difficult conversations with their investors. They need to reprice, remark, recast, reprice the options, focus on margin of business. This company can absolutely stay here. Let me ask you a key question.

Will it do that? That's the correct question. I think it comes down to leadership at the board level. Who on the board actually has the sack and the perspective to say, do we want to go to zero or do we want to have a three to $5 billion company that creates taxes, jobs, economic security for people and moves this market forward and is a real viable company?

I think it's an open and honest conversation and to say, look, we got to put down. We got to put down the crack pipe here. Enough is enough. You know, a crisis is a terrible thing to waste.

This is a crisis. This thing is not going out in the next couple of months or even the next year, but there is an opportunity to hit the reset button and wake up from, you know, wake up from the consensual hallucination that has taken place between the investors, the market and the management team and try to recast the thing. I don't know if it's going to happen. It has to happen from the board level.

And obviously Adam has to play a role. I'll take the 10X voting shares down to one X. You're not 10 times as smart as your shareholders. You think I should do an interview with Adam Newman?

There's been a push on the internet for me to do an interview with Adam Newman. I might do it. I might do it. Now it might be interesting.

I've inquired. I don't know if you're invited. I'll be honest with you. That's to say.

Yeah, I don't. I don't. I actually heard the conversation. I'm trying to get an interview with him.

Interestingly, the guy who I dealt with with Travis Kalanick many years ago is now working for WeWork. So I'm kind of bothering him. Of course, he's like, oh God, he's like, Jesus Christ, this girl again. But what would you ask him?