Tech’s Four Horsemen of the Apocalypse: Amazon, Facebook, Google, Apple

This is a great talk (hat tip Wolf Richter) on the outlook for the four dominant tech companies by Scott Galloway of L2, ” a think tank for digital innovation,” and Firebrand Partners, an activist fund. He’s also a professor of marketing at NYU, specializing in brand strategy and luxury marketing. There’s only one small bit of his presentation with which I take issue. He remarks in passing that the economy, based on the proliferation of Uber-based services, will be great for employment and terrible for wages. Those two can’t readily co-exist.

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  1. Larry

    Interesting takes. I have been assuming that people would not be buying an Apple Watch because it would not represent a significant luxury brand. But perhaps I overlook the vanity of wealthy people and aspirational people who will shell out for the thing.

    1. Yves Smith Post author

      Agreed. His definition of luxury is too low end. Real luxury buyers will still buy Rolexes on the cheap end and Piagets and other collectable watches on the high side. Recall Tom Perkins mentioning that he got a $300,000 watch as a gift from the guy who built his yacht.

      An Apple watch might be what these guys wear when slumming….

  2. Llewelyn Moss

    Uber-based services economy will be a disaster for workers. No benefits (ie health insurance, 401k, etc), crappy pay, no dependable work assignments, workers have to provide their own insurance. Great for the Oligarchs tho — per usual.

    1. RUKidding

      And don’t forget that with Uber/Lyft, the “taxi” driver has to provide her/his own car, pay her/his own insurance, pay her/his own maintenance, gas, GPS system, phone, etc. Same, too, for most independent contractor tech workers – they have to provide their own tech equipment, which usually needs to be the more expensive high end type, plus pay for their own Internet service provider, pay for other software they use, plus pay for other equipment, telephone charges, etc.

      It’s a brave new world where the worker gets to PAY a lot for the “privilege” of enriching some already obscenely wealthy Oligarch. And don’t forget to grovel & tug your forelock whilst “working” for the PTB.

      1. jrs

        Contract tech work has proliferated (more than ever it seems, more than even in the dot com days it seems). But as for having some setup at home, I don’t know, I think most tech workers already do have some, if not necessarily a full setup, at home, even if they have a full time job. If they have to support at home, to keep up with technology etc. etc.

    2. Denis Drew

      Don’t despair yet.

      First: if an employer and a mob union boss were to conspire to fire any worker who roused any objections about said phoney deal among co-workers — that sounds like fair game for RICO and the Hobbs act to me.

      Now: what legal difference with that if an employer and union busting “consultants” conspire to fire any worker who tries to rally the troops to stage a federally prescribed process to establish collective bargaining? FYI, It fits the legal definition of extortion if an employee lts on to a customer that they will only get the full service they are paying for if a little extra money moves under the table to the employee — that’s all it takes to fit.

      It’s at least very arguable that union busting employers and “consultants” are violating RICO/Hobbs. It took the FBI about ten years to get around to hitting the mob with RICO. Eventually the gov got around to hitting hit prolife sit-in demonstrators with RICO — got off only because prolfe wasn’t seeking monetary gain. A dissenting judge (Breyer?) thought that prolife had in fact “taken” control of the providers’ businesses to “own” it for themselves. The union busters are for certain taking control of the employees’ labor market processes (we might say by process of elimination) — with unquestionably monetary motives.

      Not looking to jail half the businessman and all the man consultants in the land — just trying to get them to lay off — of only for a while. ;-) Here’s how we can hope it will work: when the first RICO/Hobbs cases initiate all the union busters should head for the hills until the cases work their way through the various circuits and up to the USSC.– not wanting to make themselves liable to whatever fines or jail or law suits while the issues hang.

      Meantime, we can organize the country right out from under them. Hopefully, by the time whatever decision comes down it will be too late — the country will be organized anyway.
      – – – – – –
      New economic/political angle on right-to-work: If Wisconsin and others weaken labor ability to bargain — Wisconsin and friends will lower the amount of income extracted by their state from the other 49 states! Dumb. If that notion gets around we may never see another right-to-work state.

    3. JoRogan

      This is how it has been in Silicon Valley for decades. 38% of the work force is independently contracted. no benefits, long hours, no employment protection (at will hiring contracts, zero notice). But most are very happy with the arrangements and especially freedom associated with being indy.

      Difference between tech indy’s and Uber drivers are the level of ‘wages’. In SV they are set pretty high – Uber – not so much. We’ll see though how Uber deals with such independence in its ‘work force’ – especially when that work force decides to set fare prices themselves so that they can cover their nut. Sharing economy right?

  3. craazyboy

    Sounds like a great big train crash to me.

    E-Tail lusts after the Walmart biz model? And visa-versa. The solution to shipping cost is to externalize them using the independent contractor pizza delivery person model ( whom makes his/her car payments with foodstamps and collects Obama Care frequent payer points from the IRS.) Buy out the Post Office and turn it into a ….Post Office????

    Recognize that the Rich can’t possibly spend enough – so sell luxury branded products to the “middle class”?

    Society is now driven by the advertising model – we all tweet with our thumbs to our cyber friends. Language becomes brand names and ad slogans tied together with only the necessary grammatical bits. (Cheerio, old chapstick. Haven’t Googled you in a while. iPhone me sometime…)

    I’ll propose a new career for the Americas domiciled resident-consumer. Personal Consumer Associate. You get hired by a rich guy to help them spend all their money!

    1. mle.detroit

      Recognize that the Rich can’t possibly spend enough – so sell luxury branded products to the “middle class”?

      Exactly right, per Tom Geoghegan in “Only One Thing Can Save Us”: the Rich make money by lending to the “middle class” at credit card rates so the MC can keep on consuming.

    2. hunkerdown

      All that after they’ve spent their whole lives tirelessly training for the position of product? You’re cruel.

  4. Rosario

    Products and services all built on the shoulders of government money, all of them, and these companies are called the great innovators. Bass-ackwards. I’d task anyone to look up a single innovation from these companies that didn’t have its foundation built at a university or lab with the risk entirely fronted by government money, and there is absolutely nothing wrong with that. Except the CEOs of each would have us believe they have vast wings of buildings occupied by women and men wafting test tubes with a background of whirling machines cranking out the next big thing that will save humanity. Also, I want renewable energy, renewed/updated infrastructure (water, electricity), better public transit, public healthcare, and an expanded commons, not crap brought to my door for convenience (at huge energy cost), new ways of bloating my ego (without the direct sensual experience), Google/Apple cars (further alienating far more efficient public transit) and Apple watches (who cares). Glowing distractions for easily distracted people.

  5. pathman

    Yeah, this is all great until the limits to growth begin to shine brightly. This all presupposes this is some sort of sustainable wasting of non-renewable resources. It will hit a wall and it will come crashing down taking much of the population with it. It should be interesting in a horrific train crash sort of way.

  6. susan the other

    well… I’m not really sure what to say about that barrage… I think maybe I won’t buy anything at all…

  7. Aaron

    I probably shouldn’t comment on this sort of thing, because what I always put out ultimately boils down to “rearranging deck chairs, blah, blah, blah.” I’m convinced that all of this is ultimately pointless blathering. I think that the big trend in retail is a return to small business, modest tech retail. Social media? Whatever, it’s a distraction at best. Watches–Jesus really? So some of this is important to the investor class. So some of this is important to those who want a make money now–the hustlers. Screw the hustlers. Dude, Scott, you seem like a smart guy. I know that there are costs to getting tenure or that choice bit of land, condo, whatever. But please consider your dignity.

  8. EmilianoZ

    He said something very interesting about the 1%. He said they were very homogeneous whereas there is a lotta diversity in the 99%. I guess that’s part of the reason we can never get a traitor from them. They’re all the same. But that’s still surprising. You should get an outlier from time to time. FDR comes to mind but that was a long time ago.

    1. different clue

      But FDR wasn’t a traitor to them. He was a long-term savior to them, in his own conscious mind as well as in reality. It wasn’t FDR’s fault that his class was too dumm to understand his goals and vision.

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