Scott Galloway is a professor of marketing at the New York University Business School. In The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google, he analyzes the success of four major technology firms. He provides a list of their strengths, and near the end a list of competitors. While Galloway is an engaging speaker, the length of this book is artificially expanded by dubious claims and heavy political signaling. He clearly wants to be a pundit and pop intellectual. Ultimately, you are better off listening to his talks than buying this book.
Galloway’s focus is on the importance of luxury brands. Luxury is a high margin business, and (along with finance) luxury businesses are the most valuable business in the world. Certainly, these two facts are related to each other! An important aspect of luxury is controlling the customer experience, through vertical integration of both delivery and story — marketing. The most insightful passages of The Four analyze two of these tech giants as luxury companies, and two as luxury-destroying companies.
Two of the four analyzed companies, Amazon and Apple, focus on controlling the user experience with their brand. Both Apple and Amazon have their own retails stores (Apple Stores and Whole Foods, respectively). This allows the control over inventory and store design, makes it easy to identify high margin products customers are interested in and take those business for themselves (such as Amazon Essentials or Apple dongles), and of course freeze out potential competitors. Interestingly, Galloway mentions in passing he was once on the board for the computer maker Gateway 2000, which had its own line of retail stores since 1996 — two years before Apple announced its own retail line. Of course Apple won and Gateway lost, but as Galloway was a board member of Gateway, some discussion of his personal failure at testing his own theory would have been interesting.
By contrast, Facebook and Google are brand-destroying companies. They have no physical interaction with the customer, and effectively place a barrier between brands and consumers. Even if you “like” a company on Facebook, for instance, you are unlikely to see that company’s posts unless they pay for an advertising campaign on the site. Likewise, while Google at least sells devices (Google Home, Pixel) and provides an operating system or two (Android, Chrome OS) these are not profit centers in themselves but serve to protect their advertising monopoly. Because Galloway sees corporate success through the lens of marketing, this makes him much more cautious about these firms than others.
Galloway provides an extended case study of the failure of the New York Times to adapt to the digital age. He gives the example of the Times as a potential luxury information brand whose value was being diluted first by Google and then by Facebook. Working for an investment firm, he suggested that the Times remove all of its content from all digital platforms except its own and an exclusive digital partner. His goal was either a buy-out of the Times at several times its existing market cap, or the creation of a media conglomerate that could monopolize a small but high-income mix of landing pages on the web. Galloway identifies the failure to do this, caused by the immense benefits Google and Facebook provide in the short term for abandoning the direct link to the customers, as a cause of the New York Times‘ long term decline.
This material would cover at most one-fourth of the books’ length. The rest is an aggravating collection of signaling to specific political factions, including what-in-retrospect seems like the assumption of an activist Democratic president in the White House. Extended and irrelevant asides to the importance of banning end-to-end cryptography, income redistribution, references to the “creative class,” and so on.
Galloway is well worth listening to, even if this book is not worth buying. He has an excellent hour-long interview on the Triangulation podcast that I highly recommend. The Four is not as detailed a corporate history as Console Wars, as good of a biography as King Larry, or as solid a personal advice book as many others. Skip the book — watch his interviews or speeches.
I listened to The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google in the Audible edition.