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Yogababble 📿

Scott Galloway@profgalloway

Published on September 27, 2019

Malcolm Gladwell writes about a fascinating episode in history. Neville Chamberlain’s first plane ride was a trip to meet Adolf Hitler. The British Prime Minister was taken by Hitler’s charisma. He believed the German leader when he promised not to invade Czechoslovakia. After his triumphant return from Germany, Chamberlain took the non-aggression pact Hitler had signed and waved it from his window at 10 Downing Street. Five months later, Hitler invaded Czechoslovakia. The people who understood Hitler, who got it right, never met him. 

George W. Bush, after meeting with Putin, said, “I looked the man in the eye. I found him very straightforward and trustworthy — I was able to get a sense of his soul.” Our intelligence officials, who never got to hang with Vlad, had to rely on his actions instead of his soul. They were less convinced. 

The boards of Theranos and WeWork included former and future Secretaries of Defense, Supreme Allied Commanders, and billionaire CEOs of iconic firms. These individuals can assess geopolitical markers, troop movements, and business trends better than anybody on the planet, maybe in history. But put a young woman from Stanford in a black turtleneck, or a guy with great hair, in the same room, and these global leaders couldn’t recognize blatant fraud. 

According to CNBC, this week the We board fired CEO Adam Neumann. No, the board didn’t fire him. The media, academics, and math fired him. The board enabled him and either was a co-conspirator in the fraud, or they were just idiots. Who did they replace him with? Art Minson, co-president and CFO, and Sebastian Gunningham, vice chair of the board. Their first act? Art and Sebastian announced they’re selling the $60 million Gulfstream 650 that they had bought/approved.

The board appointed two of their own to fix the problem of their own making. This lack of self-awareness as a governing body is evidence that We’s coworking spaces have kombucha, and the board room has MDMA. Art is the Ruth Madoff of the unicorn class. She either knew what was going on, or she’s an idiot. I’m hoping CNBC will report Ruth Madoff has been appointed managing partner for SoftBank’s Vision Fund 3. 

Perhaps they are being advised by JPM, who told the board the valuation range on the IPO was $40-60 billion, or Goldman, who valued it at $60-90 billion. Goldman has been aggressively pitching me to manage my money for the last five years. They invited me to the premiere of Solo: A Star Wars Story, which is definitely worth 1 percent a year on my assets. So, as my new wealth managers, would Goldman have piled me into We stock if, on the IPO, they were able to get in at the low-low valuation of $47 billion? Is Goldman more focused on the short-term underwriting fees ($130 million) vs. serving as a fiduciary for their wealth management clients? Or are they just idiots? I’ve been trolling the worst after-hours lounges in Jersey City to track down CEO David Solomon / DJ D-Sol to find out. Mr. Solomon is an awful DJ, and a worse fiduciary. 

The Yogababble Index®

The brand era manufactured the notion that inanimate objects could take on animate characteristics. Objects and companies could be personified — likable, young, cool, patriotic. Corporate comms execs began to scale the charisma and vision of the founder. Overpromise and underdeliver has become a means for access to cheap capital (“We’ll have a million autonomous Teslas on the road within 12 months”). You could fake it till you make it. The lines between charm, vision, bullsh*t, and fraud have become so narrow as to be one line.

The MDMA of capitalism is the corporate communications exec. According to LinkedIn, there are more corporate comms personnel working for Bezos at Amazon (969) than journalists working for Bezos at the Washington Post (798). When firms are still searching for a viable business model, the temptation to go full yogababble gets stronger, as the truth (numbers, business model, EBITDA) needs concealer. When I show up at MSNBC, they put some crazy foundation syrup in a plastic bottle attached to a hose, ask everyone to stand back, and spray my head as if the makeup artist were the last line of defense against reactor 4 at Chernobyl. 

So, we looked at the S-1 language of a bunch of tech firms and made a qualitative assessment of the level of bullsh*t. Then we looked at their performance one year post-IPO. We believe there is an inverse correlation that may be a forward-looking indicator for a firm’s share performance. 

Yogababble scale 1-10: 
1/10: I’m a professor of marketing who likes dogs.
5/10: I’m the Big Dawg.
10/10: I am a spirit Dawg that unlocks self-actualization.

Mission: “To make video communications frictionless.”
This is accurate. Zoom is a video communications company. It offers less friction, as demonstrated by a higher NPS score (62) than Webex (6).
Bullsh*t rating: 1/10 
Stock return 6 months post-IPO: +122% 

Mission: “To unlock the potential of human creativity by giving a million creative artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by these creators.” 
OK, sort of. Hard to see how Celine Dion is unlocking human creativity.
Bullsh*t rating: 5/10
Stock return 1 year post-IPO: +9% 

Mission: “On the most basic level, Peloton sells happiness.”
Nope, similar to Chuck Norris, Christie Brinkley, and Tony Little, you sell exercise equipment.
Bullsh*t Rating: 9/10
Stock return 1 day post-IPO: –11% 

The chart below summarizes our research.

The markets appear to be emerging from a psychotic break from reality. The ugly process of repricing risk has begun. The market’s reaction to Uber and Lyft was the Monday morning sunrise ending a young Robert Downey Jr. Miami weekend binge. The shelving of the We and Endeavor IPOs was the market preemptively taking keys away, arresting the bender before it starts. 

Adam Neuman’s real innovation, so far, is cooking a drug that appears to have no hangover or side effects. WeChrist shat in the punch bowl. People in hazmat suits showed up, gave him $700 million, and asked him to leave — they’ll take it from here and try to clean up his mess. Mr. Neuman wasn’t fired, he was liberated. The con artist formerly known as Adam is leaving with more money ($700 million) than the firm is currently worth.

I can relate to the mix of hubris, success, and Christ complex that leads you to believe your business efforts deserve a vision worthy of your genius — if not to distract you and your investors from the reality of how hard it is to build an entity that takes in more money than it spends, while growing. When the board, CEO, and bankers transfer the vicious hangover to retail investors, the distraction becomes malfeasance.

My new firm, Section4, was going to “Restore the Middle Class.” My colleagues rolled their eyes so hard I wondered if they’d been coached by my 12-year-old son. Then we were “NSFW Business Media” or “Streaming MBA.” We’re trying to figure it out. Next week, I’ll tell my board we’ve assembled a group of talented people, are producing short-form video and podcasts, and hope to educate and inform. We’ll go from there. 

I’ve come to the realization that we’re not bringing joy to the universe. We are not Chipotle.

Life is so rich,

P.S. I’m back on YouTube. This week we sniff around SoftBank’s unicorn stable and unpack Compass. 



  1. Mathieu says:

    Someone should build an ETF tracking highest NPS products/companies in all industries

  2. Mary E Keane says:

    You say: The brand era manufactured the notion that inanimate objects could take on animate characteristics. Following that observation, the IPO era manufactured the notion that ideas in themselves, with scant, if any, proof of concept, could take on millions in funding in a single day! It is a wonderful world. Thanks for your engaging commentaries, which I only just now became aware of through a series on WeWork on Wondery.

  3. Christopher Cavalalro says:

    you should be my money manager

  4. Imelda Ticzon says:


  5. Lachlan Crowther says:

    Ignore my last post, it looks you have rated smile direct club if that is ‘smile’ on your graph

  6. cttola says:

    Rings true to the cannabis industry

  7. Brian says:

    These board rooms need

  8. Bill Preston says:

    Not sure what to say

  9. Bora Can Sekerel says:

    Stock performance for one year after IPO is not a good indicator of company performance as it gets affected by factors such as 1) Under/overvaluation of the IPO stock price, 2) market timing, 3) industry performance. However, the article has a point on “fluffy” value propositions.

  10. J:Lai says:

    There are companies that have a valid business, but are just obscenely over-valued in the present climate, like Peloton. Then there are companies that have basically no chance of ever becoming profitable businesses but are just machines to extract value from VC and private investors, WeWork being perhaps the most egregious example. Where do you see ride-share in this? Do Uber and Lyft exist only because they are selling at below cost? Or is there some scenario in which someone provides this service at scale and makes money doing it?

  11. Juho says:

    That’s cool and I’m sure you have a point. But the dashed line you use to show there’s a direct linear correlation… That’s not necessarily right.

    • Gabe says:

      I am sure the objective was not to show any linear relationship. As the author states, an observed inverse relationship. If you add age of the organisation it becomes more apparent.

  12. Carole Lynn Duffy says:

    This sentence is perfection: “When I show up at MSNBC, they put some crazy foundation syrup in a plastic bottle attached to a hose, ask everyone to stand back, and spray my head as if the makeup artist were the last line of defense against reactor 2 at Chernobyl. “

  13. Thiago Oliveira says:

    Sublime, crystal clear. Greetings from Brazil!

  14. AARON M says:

    You should trademark Yogababble and sell it as a service to institutional investors looking for the next stock to short/go long – great stuff, Scott!

  15. Pierre says:

    Enghouse Systems Ltd just bought Zoom biggest competitor Vidyo for less than $50M. The company never made money and spent $100s of millions on sales. The backers had enough! One day the Zoom shareholders will feel the same.

  16. Saurabh says:

    Was loving every bit of it TILL the point you took a dig at Tesla (and Elon). Please keep Elon & his world-changing/humanity-saving companies out of all this. I love reading and listening to your content, but when you go after Elon, it just ruins it all.

    • Brad says:

      The 737 Max-sized opportunity for self-reflection on the cult of Elon just flew over your head, with stall warnings screaming.

  17. SP says:

    As a medical researcher, I can with high confidence tell you that the field knew well before the WSJ piece that Theranos was a complete fraud: 1) they refused to publish in peer-reviewed journals (even ultra-paranoid big pharma does that); 2) the board was comprised entirely of big names meant to dazzle (Kissinger, Mattis, Schultz, Nunn, et al) but no one with experience in/knowledge of biomedicine. You can, as proven by Uber, bullshit your way into the markets, but that doesn’t work with the FDA.

  18. Pete says:

    Freedom comes with responsibility. One is free to yogababble up to the point where fraud kicks in. The recipient of yogababble is free to question any and all assertions. Buyer beware has redeeming qualities. Trust is and should be fleeting. Assume responsibility for the risks you take and all will be well.

  19. Michael says:

    Comparing Theranos to WeWork is ridiculous. There was no fraud at WeWork – you use the word a lot without ever backing it up.

    • Adam says:

      1) the way that they were counting expenses as revenue? Sounds like fraud to me. 2) oh, the birdies have not remotely begun to sing…

    • Duarf Rotceted says:

      Look it up Michael: Fraud: ‘In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right.’

  20. Abbi Vakil says:

    As long as you’re looking at Softbank & it’s portfolio companies in the Real Estate sector, take a look at OYO, which is the WeWork of Hotels…

  21. Thierry Austin says:

    So sad the financial community woke up in time for this one and avoid us a nice opportunity to make $100k shorting the WE insanity .. but don’t despair true believer , another opportunity will soon rise up in radioactive kombucha (beyond drink :), or Uber jet ski spin off (Austin lake courtesy) .. and the GS and Jp of the world will show us the way to another splendid display of their ethics and credibility:). As for Scott , man , are you trying to ruin the party of shortsellers and woke up us mere mortals :)?

  22. Greg Wimmer says:

    Thanks Scott!

  23. david fishman says:

    DJ D-Sol …. Lord have mercy 🙏

  24. Rob Hoehn says:

    Man I’m so pissed Goldman Wealth management didn’t take me to see Solo.

  25. Kristoffer Nolgren says:

    So what I get from this is that if you want a high valuation, you should yogababble.

  26. Tony says:

    Well said, easy/entertaining to read/digest. “Strenth to your sword arm”. MA

  27. Paul says:

    Great work again Scott. Analyses on point. That chart had the best x-axis lol

  28. Yoda Babble says:

    Yoda says — the diff between Peloton and Soul Cycle is that you can spin in your own home….. The diff I see is that Peloton looses 200mm on 950mm of sales. Soul Cycle apparently has been profitable for a while and makes ~25% profit margin.Oh and Soul Cycle dosent need a $50mm new studio in NYC, another $50mm studio in Germany and a $100mm corporate HQ in manhattan. What these people smoking?

  29. Big B says:

    Great article! If I may be allowed to not pick, the right way to plot the correlation between bullshit and returns, the bullshit markets must be placed “pre facto” and returns tracked over time to eliminate all bias. To be fair, it’s not that I disagree with your ratings, but hey, I may be biased too. Hence the pre-facto tag of the independent variable. Cheers!

  30. Jim says:

    Let’s party like it’s 1999! And on another note, Peleton is just another fad in the endless series of machinery that will NOT make you into Chuck Norris. Destined for the back of the garage.

  31. Kent says:

    Good shit! Really good shit!

  32. K says:

    This article is hilarious keep up the good work spirit dawg.

  33. Peter says:

    It sounds like you maybe provided just some of the data in the graph you display, but with the 16 firms you display here, the negative association is fully driven by the three observations at the low end. (I transcribed the data and the correlation coefficient goes from ~-0.57 to ~-0.07 when the three low bs companies are removed; the slope of new line is almost flat). The overall trend you describe here seems to be backed by other evidence but that graph isn’t helping you here, I don’t think. ✌🏽

    • AZ says:

      I like what you’ve pointed out..but honestly beacuse Scott admits that the assessment of the BS level is qualitative, I focussed more attention to the individual data points rather than looking at the best fit line in the given graph.

  34. sue says:

    excellent as usual.

  35. Andrew says:

    Actually Holmes does NOT have a college degree let alone one in Biology.

  36. J. Peterson says:

    Eagerly awaiting your assessment of Magic Leap!

  37. AW says:

    I like your methodology, but it’s wildly unfair to include Peleton performance of one day in an analysis of mission statement BS and one year performance. To be honest, it smacks of confirmation bias and undermines your broader point.

  38. ian says:

    I don’t think that line through the middle is how regression works. All I see is a blob with no correlation with 3 outliers.

  39. Brian Mooney says:

    Hey Scott, think you should stop holding back and say what you really mean 😅

  40. Mike B says:

    My God…….Scott I love you.

  41. Karina says:

    you crack me up… your writing is truly infotainment at its best… tell your board.

  42. Mike says:

    The G*ldman burn is ridiculous. I lol’d at work.

  43. Elle says:

    When is America ever going to realize how pointless and destructive capitalism is to human beings and oh….. everything else? I get the whole “we love money” thing. Yet there are so many more important things. How about oh… nature, music, seeking your creator, relationships, human beings, other living creatures, and the other big thing – THE PLANET!! Money and greed produce nothing – emptiness. Everything else I mentioned creates memories that will last a lifetime. Those are priceless. You do not need mounds of money for that. You need a soul. The greedy bastards who hoard all the money…. they don’t have the soul to share their hoards. To the point that MULTIPLES OF MILLIONS suffer in poverty and some are starving. SICK.

    • Edwin says:

      Is the lesson in all of this that Kool-Aid is deadly or that Kool-Aid spiked with cyanide is deadly? I think it’s the latter.

    • Ellen says:

      @Edwin The cyanide is in the recipe now, because there’s no one there to regulate its manufacture.

  44. Bob says:

    Great piece. Please keep these coming.

  45. Layton Lassiter says:

    Maybe the best one yet!

  46. AriasFco says:

    Awesome. Great job Scott.

  47. Andrew says:

    If you’re going to borrow heavily from Malcolm Gladwell to set up your piece, you should probably cite him.

    • Maria Petrova says:

      Andrew, I’m a copy editor on No Mercy. A couple of us source what Scott sends. I assumed this came from Scott’s history knowledge (quite extensive, he watches war documentaries at night, which is my personal idea of hell). We usually don’t link historical anecdotes, because they tend to be well known. Anyway, we fixed it. Thanks for your comment.

  48. Tom says:

    You are the OMC(Original Master Card)…priceless.

  49. Yulia Konovnitsyna says:

    Always a refreshing perspective, Scott!

  50. D. Kapoor says:

    I may never be in the rooms that you get to be in Scott, or walk in shoes that you walk in. So, thank you for taking us for vicarious excursions and looking at the world from your unique perspective. Now, I’ll go back to my pursuit for enlightenment by buying a pair of shoes dipped in unicorn sperm.

  51. Bob says:

    What’s the deal with a Celine Dione references?

  52. Tommy says:

    Savage. Love it

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