The Four by Scott Galloway
On Amazon, Bezos realized, every page can be a store and every customer a salesperson. And the company could grow so fast that there wouldn’t be any corners left for competitors to carve out a niche.
Brands are two things: promise and performance.
This kind of experimentation and aggression is what the military calls the OODA loop: “observe, orient, decide, and act.”
Huge investments in consumer benefits that stand the test of time—lower cost, greater selection, and faster delivery.
Amazon’s revolutionary timeline of capital allocation is what has been preached for generations in business school—total disregard for the short-term needs of investors in pursuit of long-term goals.
Mr. Bezos bifurcates Amazon’s risk taking into two types of investments: Type 1—those you can’t walk back from (“This is the future of the company”) and Type 2—those you can (“This isn’t working, we’re out of here”).
Bezos wrote in Amazon’s first annual letter, in 1997, “Given a 10 percent chance of a hundred times payout, you should take that bet every time.”
Most boards ask management: “How can we build the greatest advantage for the least amount of capital/investment?” Amazon reverses the question: “What can we do that gives us an advantage that’s hugely expensive, and that no one else can afford?”
Failure and invention are inseparable twins. To invent you have to experiment, and if you know in advance that it’s going to work, it’s not an experiment.”55
Most uber-wealthy people have one thing in common: failure. They’ve experienced it, usually in spades, as the path to wealth is fraught with risks, and often those risks end up being … well, risky.
It’s not stores that are dying, but the middle class—and, in turn, the businesses that serve that once-great cohort and its neighborhoods.
We are now in the multichannel era—a time when integration across web, social, and brick and mortar is crucial to success.
why should Amazon, the king of online retail, get into multichannel retail? Because e-commerce doesn’t work, isn’t economically viable, and no pure e-commerce firm will survive long term.
If you’re raising prices faster than inflation, without any underlying innovation, you’re ripe to be disrupted.
What’s clear is that we need business leaders who envision, and enact, a future with more jobs—not billionaires who want the government to fund, with taxes they avoid, social programs for people to sit on their couches and watch Netflix all day.
Luxury is not an externality; it’s in our genes. It combines our instinctive need to transcend the human condition and feel closer to divine perfection, with our desire to be more attractive to potential mates.
I’ve been advising luxury brands for twenty-five years and believe these firms, from Porsche to Prada, share five key attributes: an iconic founder, artisanship, vertical integration, global reach, and a premium price.
Cognitive psychology shows that attractive objects make us feel good, which in turn makes us more resilient in creative challenges.
Drexler recognized that while television could broadcast a brand’s message, physical stores could go much further. They gave customers a place to step into the brand, to smell it and touch it. The store, Drexler decided, is where he would build brand equity.
Rich people are more homogeneous than any cohort on earth.
Fill a room with middle-class people from around the world, and you have diversity.
The decision to pay a premium comes from an ancient and primal urge from the lower body—even while the brain yammers on about the rational stuff.
Apple’s business today is to sell to people goods, services, and emotions—being closer to God and being more attractive.
Don’t fight on other people’s terms. In other words, once you’ve made the jump to light speed as a tech firm, you need to immunize yourself from the same conquering weapons your army levied on the befuddled prey.
It’s not stores that are dying, but the middle class, and the stores serving them.
Facebook gestates intent better than any promotion or advertising channel. Once in pursuit, we go to Google or Amazon to see where to get it. Thus Facebook is higher up the funnel than Google. It suggests the “what,” while Google supplies the “how” and Amazon the “when” you will have it.
The study found that the depth and meaningfulness of a person’s relationships is the strongest indicator of level of happiness.
When you have the Facebook app open on your phone in the United States, Facebook is listening … and analyzing. Anything you do involving Facebook is likely to be gathered and stored.
Facebook argues that the phone isn’t “always listening” and that it never stores the raw audio when it is listening. The platform said explicitly on its help pages that it doesn’t record conversations, but that it does use the audio to identify what’s happening around the phone.
Facebook tracks and records your browsing history, including after you’ve logged off its app. It also tracks your location history, based on wifi networks your phone has accessed. Even if you turn off your wifi, your telco knows what tower you are near and can sell that data to companies.
Facebook has a product, Pixel, that’s installed on hundreds of thousands of websites and apps. It allows Facebook and advertisers to track your web and app activity, and serve you relevant ads. That pair of shoes following you around the internet? You’ve been targeted. What’s creepy is how good Facebook is getting at it and the number of platforms it can gather and share data across.
The whole is often less than the sum of its parts.
On the one hand information wants to be expensive, because it’s so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So, you have these two fighting against each other.
As Paul Newman explained in The Sting, the key to a great con is that the victim never realizes he was conned—indeed, he believes he is about to be a big winner right up until the last moment.
From the perspective of evolutionary psychology, all successful businesses appeal to one of three areas of the body—the brain, the heart, or the genitals.
For most businesses, the consumer’s brain is the ultimate buzzkill and competitor.
Apple’s marketing and promotion have never been traditionally sexy. The message is not that owning an Apple product will make you more attractive to the opposite (or same) sex. Rather—and this is common with great luxury brands—the message is that it will make you better than your sexual competitors: elegant, brilliant, rich, and passionate.
“Product” is experiencing a renaissance, and is the first factor in the T Algorithm. If you don’t have a product that is truly differentiated, you have to resort to an increasingly dull, yet expensive, tool called advertising.
One in six people start their search for products using Google, making it the equivalent of the second biggest (first is Amazon) retail store window in the world. Fifty-five percent start on Amazon.
Excellence, grit, and empathy are timeless attributes of successful people in every field.
Curiosity is crucial to success.
Steve Jobs took a lot of grief when he returned to Apple at the turn of the century and announced that he only hired As, because As only hired As, while Bs hired Cs—but he was right: winners recognize other winners, while also-rans can be threatened by competitors.
Don’t follow your passion, follow your talent. Determine what you are good at (early), and commit to becoming great at it. You don’t have to love it, just don’t hate it.
Regression to the mean is a powerful force, and the good luck (and a lot of it is luck) will cut the other way at some point.
A productive exercise for one’s own career is to ask: Where do I thrive in the alphabet? Think of companies and products having a life cycle, A–Z. Are you happiest at start-ups where you’re expected to wear a number of different hats (A–D), the inception/visionary stage (E–H), good at managing, scaling, and reinventing (I–P) … or can you manage a firm/product in decline, and do so profitably (Q–Z)? Few people are good across more than several letters. This exercise should help guide the firms and projects you work for and pursue.
The world does not belong to the big, but to the fast. You want to cover more ground in less time than your peers. This is partially talent, but mostly endurance.
