Editor’s Note: No Mercy/No Malice is a column from Professor Scott Galloway, where he shares various reflections on business, tech, and life that on his mind each week.
Apple’s market capitalization breached $1T this week.
I’m a bit sanguine, as I’ve been predicting, with enormous confidence, that Amazon would get there first. It’s not easy to be wrong dozens of times, on national media, every week for three years, but I’ve managed. Oh well, I started predicting the ascent when the Seattle firm was worth $200B, and now it sits at $870B. So maybe I get the “most improved” ribbon.
What significance does $1T have? Not much. There will be a ton of fawning over the storied rise of the company. In America we personify firms and start to worship them. Apple is the Jesus/LeBron/John Ritter of our age. Note: I threw in John Ritter to make sure you were paying attention. If John Ritter were still alive, I believe that, if he and I were friends, he’d visit me if in the hospital and call to congratulate me when I got tenure (which will never happen, as I’m a clinical professor). However, if it did…John would call. Apple Inc. wouldn’t.
These companies are not concerned with the condition of our souls, nor will they take care of us when we get older. I feel as if the wider public and our elected officials forget this when tech giants avoid taxes, compete unfairly, or when executives of these firms choose their own wealth instead of the well-being of the commonwealth.
Steve Jobs will get more credit than he deserves. Mostly because he’s dead, and the easiest/hardest way to spread Vaseline over your accomplishments is to die early. Ever see James Dean or Marilyn Monroe act or sing, respectively? Tim Cook deserves more credit than he will receive, as the firm accrued almost $700B under his watch. And who has added the most value in their tenure as CEO? You guessed it, the wealthiest man in the world, Jeff Bezos ($890B). These and other fascinating observations, which provide almost no real insight, are littering inboxes with emails from Quartz/Axios/NYT/etc.
However, it’s (sort of) rewarding to think about milestones, and take pause to think about other titans of industry and how we measure success. First off, firms that become the most valuable in the world (e.g., PetroChina, IBM, Cisco, Microsoft) typically go on to underperform the market. Most blame the law of large numbers. However, maybe this will change due to networking effects. The media will see this as a reflection on the health of tech. Sort of. I’d argue that, similar to the Dow, Apple’s stock has become the wellness index for the global rich. Apple commands 14% of the global smartphone market, and the rest is (mostly) Android. However, Apple garners 87% of the profits from the smartphone market. Consumers have two choices, spend a shit-ton of disposable income on a luxury item or get a phone for free and have your data/privacy molested.
According to a University of Chicago study, an iPhone was the single most accurate predictor of wealth. There is a positive correlation between your income and the likelihood you have an iPhone. So, just as driving a Ferrari says you’re killing it, or have your priorities totally fucked up, or both, owning an iPhone is the easiest way to communicate your sexual strength. This ability to communicate better status is how a product that costs $370 to build sells for $999… which is amazing. Apple’s move from the tech sector (brain) to the luxury sector (genitals) has enabled it to reap unthinkable margins for a computer company.
So, Apple’s ascent to $1T is a function of Steve Jobs’s vision and Tim Cook’s stewardship. However, the chaser here is wealth inequality, which usually precedes self-correcting mechanisms: war, famine, or economic depression. The 40% of Americans who are Apple owners (assuming they roughly correlate to the wealthiest in the country) control more than 98% of the nation’s wealth. These 40% can afford to pay more for their phone/service/apps than the 60% pay for their healthcare. I believe few things could better predict our social fabric unraveling than Apple hitting $2T in value. Yay. Capitalism.
It’s instinctual to “manage to the test.” The metrics we value are the guardrails of our intentions, actions, and values. We all have an internal FitBit/Apple Watch, trying to hit certain metrics in different areas of life. Your metrics, and the numbers that loom large for you say a lot about who you are. The metrics that are never far for me — good, bad, and ugly:
Net Worth. I think a lot about money. I realize how awful that sounds. When I didn’t have much of it, I didn’t track it. And even now, when I know my portfolio has been beaten up, I don’t check my brokerage accounts for a few days, as I don’t want to get bummed out and know that (most of the time) they’ll recover. Like most things in life, your gains and losses in the market are never as good or bad as they seem. I’d much rather work in private equity or venture capital than a hedge fund, as having a scorecard every day is just plain stressful.
Wealthy people claim they don’t think much about money. That’s bullshit; they are obsessed with money. The notion that rich people don’t think about money is an attempt to dampen resentment (e.g., revolution) from the 3.5B people who have fewer assets than the wealthiest 12 individuals. What, like, rich people got there because they are just so benign and talented, it just happened (oops, I’m rich)? People who tell you to follow your passion are already rich. They have doggedly pursued a path and have been obsessed with success for a long time. They want to sound inspirational and give you a sound bite, because the truth that success requires 60–80-hr weeks for several decades doesn’t get applause in graduation speeches.
Every wealthy person I’ve known measures their net worth in frightening detail, and often. You have to stay nimble, or you stand to lose a lot. We live in a capitalist society, and the amount of money you have is a forward-looking indicator of the effectiveness your healthcare, the comfort of your home, the harmony of your marriage, and the quality of your children’s education.
6:2/187. My height/weight. I used to be 6 foot 3, but according to my doctor I’ve shrunk an inch. He found this normal, amusing even. I do not. I’ve been the same weight since college, but its distribution has shifted, dramatically. My height/weight and general strength are a big source of focus for me, as I was painfully skinny growing up. When I arrived at UCLA I was 6:3/157. Joining the crew team and having access to three meals a day (via Jeanne, the cook at ZBT fraternity) resulted in 30 new pounds of muscle. Soon after the weight gain, women started noticing me — which was awesome. Since then, I associate strength/muscle with worth as a mate. As I’m losing muscle strength, and haven’t found other sources of security/worth, I’m struggling with this whole aging thing.
580. In my late twenties, I had trouble getting a mortgage for my first home out of college, as my credit score was 580. It wasn’t that I didn’t make money, but I was too irresponsible/immature/stupid to pay my bills on time. I’ve always felt I have a big “580” sign above my head.
90K and 500K. My Twitter following and the average number of views Winners & Losers gets each week. I’m not addicted to social media, don’t enjoy it that much, but I’m addicted to feedback/affirmation. I read the comments and check the likes/retweets a couple times a day. I’m addicted to the drip from the dopamine bag in my pocket.
2x/year. My father is dying. Nothing imminent, but he’s 87, which generally speaking means the end is more near than far. The last five years I’ve seen him (at most) 2x/year. I wallpaper over this in my mind, as I actively make his life more comfortable and call him every Sunday. However, any honest appraisal yields a coarse truth… I’m not the son I want to be.
400. For the last 15 years I have taught, on average, 400 students a year. I like the kids; they (mostly) like me and feel as if I am adding value. A bunch reach out to me on a regular basis and express gratitude and admiration, which makes me feel relevant.
3, 4, and 2. I’ve started 9 companies. 3 were wins, 4 were failures, and 2 were somewhere in-between. I don’t believe any culture, other than the US, would have given me this many chances.
July 16, 2003: The day my mom passed away. She raised me alone, on a secretary’s salary. It was me and her against the world. I miss her every day.
$8.8K: Total tuition for both my undergraduate and graduate degrees from UCLA and UC Berkeley. The generosity of California taxpayers and the vision of the Regents of the University of California changed my life.
3x/day: I kiss my boys at least 3 times each day. It’s the first and last thing every day for us. I hope it confirms my love for them, and it makes me feel better about myself.
Benchmarks, metrics, and milestones range from the meaningless to the profound. Accountability and insight are the byproduct of math. Numbers yield insights about markets, how value is created, and how we want to live our lives. A review of the metrics in your life is a healthy exercise. In sum, I need to visit my dad.
Life is so rich,