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Partner vs. Parasitoid

Scott Galloway@profgalloway

Published on October 20, 2017

A micropredator eats a tiny bit of the host, and a parasite eats a chunk. The parasitoid feeds on the host from the inside out until the host dies, and then leaves (think Alien films). The predator shows up and eats the host.


It would be difficult to think of three retailers who have fallen farther faster than Toys”R”Us, Borders, and Target. The first two declared bankruptcy, and Target is a shadow of itself, shedding 32% of its value in 2.5 years. Despite being the lone survivor here, Target has likely lost the most value and opportunity. Fifteen years ago, in a survey of what retailer was the most innovative and likely to thrive in an era of disruption, most would have chosen Target. It was viewed as the hipper, more innovative foil to Walmart.

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What do the three have in common? All are big box retailers, distribute other people’s brands, and … outsourced their e-commerce to Amazon. Amazon partners with retailers the way a parasitoid partners with a host. It’s easy to empathize with the firms who entered into these agreements 15 years ago. These retailers’ online sales were likely only 2–4% of sales, and developing that channel was costly and not a competence of any of these firms. Traditional business strategy would dictate outsourcing a non-core, yet expensive, part of the business.

However, soon after, the growth rates in e-com became more than incremental revenue from a different channel, but a proxy for a firm’s embrace of, and preparedness for, the future. The sales from these partnerships with Amazon didn’t meet expectations for either party. The skills deficit these firms accrued was an opportunistic infection adding to their generally poor health. Except Target, they didn’t have the strength to fend off the infection.

In general, the most powerful, best-performing firms make terrible partners. Why? Because they don’t need you, so unless the terms are dramatically in their favor, they’re not likely to enter into the agreement to begin with. Even more damaging, as all of life is just high school reliving itself, these partnerships are like dating someone much better looking than you — a recipe for an abusive relationship. The temptation to be seen at the quad with the hot gal or guy leads firms to believe that no, she really likes me, and this will end well. The most powerful firm of the nineties was also the worst firm to partner with, Microsoft. Ask the music and print industries how partnering with the most powerful firms of the aughts, Apple and Google, worked out.

Firms just can’t help themselves. Coming out of any big agora of the business elite, a flurry of press releases about partnerships with a big firm hit the wires. They mostly read like this: Old-economy firm X announces transformative partnership with (Amazon / Apple / Facebook / Google) to bring a new world of X, leveraging the unique and complementary skills of X and (Amazon / Apple / Facebook / Google).

A plethora of partnerships are announced. What’s distinctly less common is press releases revealing a beat on earnings due to firm X’s partnership with (Amazon / Apple / Facebook / Google).

But wait, there’s more. Two retailers, Kohl’s and Morrisons, have recently announced partnerships with Amazon. Both on the surface make sense, and neither will work. This isn’t to say partnerships are a bad idea; however, as in any relationship, there needs to be some balance and a healthy respect and fear that the other might leave you for the hot new exchange student. Kohl’s should be partnering with Macy’s and Nordstrom to get scale around digital marketing and fulfillment. Nike, Under Armour, and Adidas should be partnering to build the equivalent of Sephora in activewear. They’re competitors, not enemies.

There is also opportunity for an old-economy firm to partner with one of the Four in areas where the Four are getting the shit kicked out of them by one of the other three, to restore balance. For example, Google actually needs Walmart to have any chance of scaling an online grocery offering. P&G, Unilever, Williams-Sonoma, and LVMH should be holed up in a bunker with Google trying to figure out how they, jointly, fight Alexa in the home.

Just as the British, Russians, and Americans overcame their differences when Panzer tanks rolled into Slovakia, firms need to ask themselves if they can defeat the enemy on their own, and who’s a real threat to their existence vs. a competitor. The tanks are here. Spend some time discerning the logo that adorns them.



I grew up in Westwood. My elementary school, Fairburn, was a public school in walking distance from the condo my mom and I lived in. The student body was all white, except for a couple Asians and a black kid. We were raised to believe we were all created equal, and the environment was relatively harmonious.

Then I went to Emerson Junior High, where there was bussing. About a third of the students were black kids, who sat on a bus an hour each way to get from downtown to school. We also had a decent Latino contingent. And … we learned to dislike, even hate each other. I remember, after being dragged into a bathroom my third week of school and getting beaten up, avoiding black kids.

There was a group of white kids, we called them “surfers,” who were terrible students, had long hair, and took pride in getting into fights with Latino and black kids. There was a gang contingent among the Latino kids, and rumors spread, though I never saw any real evidence of this, that they carried knives and weren’t afraid to use them. One day after school, one of the surfers, Jeremy, jumped on the side of the bus, clinging to an open window, screaming racial slurs directly in people’s faces. A boy inside the bus took off his hard-heeled shoe and slammed it on Jeremy’s fingers. One of his nails popped off. A kid named Jeff grabbed the nail and registered a substantial bump in popularity displaying the nail to people he deemed worthy during lunch time.

Three months into seventh grade, my two best friends’ parents pulled them out of Emerson and enrolled them in Windward, a tiny private school in Santa Monica. They would take field trips to Catalina Island to study sea life for their marine biology class. I told my mom I wanted to go to Windward. She gave me one of my first real lessons in economics: “We can’t afford private school.”

It seemed as if the teachers at Emerson were angry and hungover a lot. Emerson defined the term “warehousing” youth. Most of the affluent white kids transferred throughout the first year, leaving a student body from middle and lower income households. We had black against white softball games and, though technically an integrated school, we self-segregated on campus. There was little commingling until the ninth grade, when you began to see friendships form across racial boundaries. My closest friend was a Mormon kid, Brett.

We then went to University High School in Santa Monica, which had a similar demographic makeup. A strange and nice thing happened: we all began to get along. I still hung out with Brett, but also was friends with Ronnie Drake, a black kid who lived in Bell Gardens and was starting middle linebacker for the University Warriors football team. Our mascot was a Native American with a headdress, screaming as if he was mid-battle. The mascot has since been changed to the Wildcats, but that’s another post.

Ronnie’s dad was a reverend who would bellow, when I would visit, “Somebody feed this boy.” I drove a Renault Le Car and wore cut-off shirts, Top-Siders with no socks, and Vuarnets. Ronnie drove a Buick, liked silk shirts, and also wore Top-Siders. I was hoping to get into a UC campus, and Ronnie was hoping to get a football scholarship, which he did, to Linfield College in Oregon.

We all studied, partied, and took ski trips to Mammoth together. After being color-blind in elementary school, we were again color-blind in high school. We lived in different neighborhoods, listened to different music, and wore different clothes. But the things that united us overrode our differences. We were all awkwardly spilling into adulthood, establishing the links between effort and achievement, trying to figure out who we were, what attributes we wanted to develop, and what was next given your grades and early indications on your potential. It wasn’t a given that we were all going to college, nor would even get a job.

As Abraham Lincoln said, “I don’t like that man. I must get to know him better.” It’s not that we didn’t like each other. We just needed to get to know one another better.

Life is so rich,



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