Skip To Content


Scott Galloway@profgalloway

Published on May 18, 2018

Hawaii’s Kilauea volcano has erupted, sending ash clouds 30,000 feet into the sky. There’s a volcano going gangster on our 50th state, and nobody seems to care. Hundred-year weather events seem to be happening every hundred days. Similarly, ridiculously stupid actions or words from our leaders used to get our attention, but now the high-velocity vomiting that DC sprays across the airwaves has numbed us. But that’s another post.

A volcanic eruption gets the most attention, as it’s spectacular. But the real damage comes from fissures. A volcanic fissure is a vent through which lava erupts, usually without any explosive activity.

As business often mimics biology and nature, it’s interesting to think about the eruptions in business over the last 20 years and the subsequent fissures. Often there isn’t an explosion, just a linear crack and lava that begins destroying everything in its path.


I believe Jeff Bezos’s 1997 investor letter was the eruption that changed the business world, or maybe Amazon itself is the eruption. Mr. Bezos’s vision has upended the natural order in business, and we’re still discovering fissures. The market’s infatuation with Mr. Bezos’s long-term focus on value, selection, and convenience, and the firm’s progress against those nonperishable truisms of consumerism have allowed Amazon to substitute profits with vision and growth. By the end of 2018, Amazon will be the most valuable firm on earth, and will have arrived without ever achieving meaningful profitability.

There are fissures emerging everywhere:

— When a firm can reinvest 100 cents on the dollar, every year, for longer than anybody else, they will eventually … win. The most recent fissure is in the largest consumer category, grocery. Amazon is overlaying their operational excellence and 0% ROI hurdle on the $800 billion grocery sector. As society bifurcates into serfs and lords, so does our economy — a series of duopolies with one firm serving the top 10%, and the other everyone else. There is a duopoly emerging in grocery, Amazon / Whole Foods and Walmart. The Sears of our generation, Kroger, will be a shadow of itself in a decade or less.

— Lava will emerge in unexpected places. As the traditional balance of many points of distribution (grocers) to a finite number of great brands (CPG) flips, and distribution consolidates while long-tail brands proliferate, we’ll see CPG firms leak value to Walmart and Amazon. This will create more opportunistic infection for the advertising industrial complex as advertising firepower/spending moves to nonspenders (Walmart and Amazon) from big spenders (CPG firms).

— A regressive corporate tax policy is beginning to spew lava. Our tax code did not foresee the most valuable firm in the world operating at break-even. When the most successful firm in the world pays little to no corporate tax, then less-successful firms have to pay more, and we’ve institutionalized a regressive corporate tax structure. We’ll likely see some form of AMT or VAT tax on firms that have figured out a way to move capital from the commonwealth (pay no tax) to shareholders.

Steve Jobs: iSavior

Many in the Valley would posit Steve Jobs’s life dented the universe. No, but his death changed society on Earth. Personal brands and celebrity burn bright from the flame of excellence. The fuel that keeps these fires raging is premature death. As nations become more affluent and educated, church attendance and reliance on a superbeing decline. However, the need for idols and sherpas only increases as our lives and the world we live in get more complex. As the religion of innovation emerged, we needed a Jesus who died for our sins … early. Steve Jobs’s death at 56 cemented the deity of the Innovator.

Steve Jobs, under oath, denied his blood (his daughter) so he could avoid child-support payments. At the time he was worth $250M. Yet Apple continues to display his visage and memory in godlike staging at Apple’s mecca-like events and product launches. We’ve distorted the most basic truth: that the path to a better world is more loving, engaged parents … not a better fucking phone.

The fissures here are disturbing and dangerous. We no longer worship and the altar of character and kindness, but billionaires and innovators. We’ve lost the script to prosperity and humanity — checks and balances. We have government and business leaders who live profane lives. Paying for sex and then paying people to not disclose the encounter is tacky and embarrassing. However, mocking the disabled and punishing children is profane. We have a profane president.

I Am Jesus

Our more powerful leaders, tech CEOs, demonstrate little regard for the commonwealth that fueled their atmospheric success. CEOs whose personal fortune is greater than the budget of the state they grew up in, Texas, who find purchase in gaming the commonwealth, with offers of prosperity, so they can soak the commonwealth and grow their wealth to the state budget of California, the fifth largest economy in the world.

Billionaires with multiple degrees from prestigious schools who offer students money to drop out of school and want to build floating nation-states to avoid taxes. CEOs who are sanctimonious about privacy, yet engage in massive tax avoidance, hiding the GDP of Denmark in cash overseas, where their effective tax rate is 4%. A CEO who controls the algorithms that determine the content and mood of a population greater than the Southern Hemisphere (plus India), who proposes a third class of stock such that he could sell all stock, have no economic risk, or even work at the firm, and continue to oversee his flock of two billion. When you decide you should be the leader and arbiter of truth for 2 billion people for life… haven’t you decided you are Jesus?

Sith Lords

We live in a capitalist society. I tell my students that given their skills and good fortune, they have an obligation to garner economic security and begin registering that power against noble aims. So yes, buy Facebook stock, but also vote and support candidates who will hold these firms to the same scrutiny we apply to other firms. We elected people who regulated tobacco so fewer of our mothers, daughters, and sisters would die. We then elected people who demanded that the largest industries incur huge expense to reduce the damage to our planet. Finally, we elected people who demanded firms not distribute weapons of war in a haphazard manner resulting in children being murdered. Note: Everything I just said, except for the last sentence, is true.

People claim that network effects will only put us back in the same place in twenty years regardless, so why fight it. “The world is what it is.” No — the world is what we make of it, and we need to elect officials who will subject these firms to the same scrutiny we apply to the rest of business, and restore balance to the force.

Similar to the Sith Lord Darth Vader, the leaders of big tech may be remembered as tragic heroes whose original motivations were for the greater good before their fall to the dark side. However, I see good in them. But they need our help. Power corrupts, and they’ve chosen a dark path. It’s not too late. But it is our burden.

Life is so rich,



Comments are closed.

Join the 500,000 who subscribe

To resist is futile … new content every Friday.