Book review of The Four: The Hidden DNA of Amazon, Apple, Facebook and Google by Scott Galloway

The big four, Apple, Amazon, Facebook and Google, have generated unprecedented wealth and inspiration. But there’s another side to their success story. These excerpts from Scott Galloway’s The Four: The Hidden DNA of Amazon, Apple, Facebook and Google deconstruct the strategies that lie beneath their accomplishments.

Book review, The Four: The Hidden DNA of Amazon, Apple, Facebook and Google, Scott Galloway, Scott Galloway books, author  Scott Galloway
Google’s headquarters in Mountain View, California, US.

Over the last twenty years, four technology giants have inspired more joy, connections, prosperity, and discovery than any entity in history. Along the way, Apple, Amazon, Facebook, and Google have created hundreds of thousands of high-paying jobs. The Four are responsible for an array of products and services that are entwined into the daily lives of billions of people. They’ve put a supercomputer in your pocket, are bringing the internet into developing countries, and are mapping the Earth’s land mass and oceans. The Four have generated unprecedented wealth ($2.3 trillion) that, via stock ownership, has helped millions of families across the planet build economic security. In sum, they make the world a better place. The above is true, and this narrative is espoused, repeatedly, across thousands of media outlets and gatherings of the innovation class (universities, conferences, congressional hearings, boardrooms). However, consider another view.

The Four Horsemen

Imagine: a retailer that refuses to pay sales tax, treats its employees poorly, destroys hundreds of thousands of jobs, and yet is celebrated as a paragon of business innovation. A computer company that withholds information about a domestic act of terrorism from federal investigators, with the support of a fan following that views the firm similar to a religion. A social media firm that analyzes thousands of images of your children, activates your phone as a listening device, and sells this information to Fortune 500 companies. An ad platform that commands, in some markets, a 90 percent share of the most lucrative sector in media, yet avoids anticompetitive regulation through aggressive litigation and lobbyists.

This narrative is also heard around the world, but in hushed tones. We know these companies aren’t benevolent beings, yet we invite them into the most intimate areas of our lives. We willingly divulge personal updates, knowing they’ll be used for profit. Our media elevate the executives running these companies to hero status—geniuses to be trusted and emulated. Our governments grant them special treatment regarding antitrust regulation, taxes, even labor laws. And investors bid their stocks up, providing near-infinite capital and firepower to attract the most talented people on the planet or crush adversaries. So, are these entities the Four Horsemen of god, love, sex, and consumption? Or are they the Four Horsemen of the apocalypse? The answer is yes to both questions. I’ll just call them the Four Horsemen.

How did these companies aggregate so much power? How can an inanimate, for-profit enterprise become so deeply ingrained in our psyche that it reshapes the rules of what a company can do and be? What does unprecedented scale and influence mean for the future of business and the global economy? Are they destined, like other business titans before them, to be eclipsed by younger, sexier rivals? Or have they become so entrenched that nobody—individual, enterprise, government, or otherwise—stands a chance?

Pages 1-3

Show Me the Trillions

While billions of people derive significant value from these firms and their products, disturbingly few reap the economic benefits. General Motors created economic value of approximately $231,000 per employee (market cap/workforce). This sounds impressive until you realize that Facebook has created an enterprise worth $20.5 million per employee . . . or almost a hundred times the value per employee of the organizational icon of the last century. Imagine the economic output of a G-10 economy, generated by the population of Manhattan’s Lower East Side. The economic value accretion seems to be defying the law of big numbers and accelerating. In the last four years, April 1, 2013–April 1, 2017, the Four increased in value by approximately $1.3 trillion (GDP of Russia).

Other tech companies, old and new, big and bigger, are losing relevance. Aging behemoths, including HP and IBM, barely warrant the attention of the Four. Thousands of start-ups fly by like gnats hardly worth swatting at. Any firm that begins to show the potential to bother the Four is acquired—at prices lesser companies can’t imagine. (Facebook paid nearly $20 billion for five-year-old, fifty-employee instant messaging company WhatsApp.) Ultimately, the only competitors the Four face are . . . each other.

Safety in Hatred

Governments, laws, and smaller firms appear helpless to stop the march, regardless of the Four’s impact on business, society, or the planet. However, there’s safety in hatred. Specifically, the Four hate each other. They are now competing directly, as their respective sectors are running out of easy prey. Google signaled the end of the brand era as consumers, armed with search, no longer need to defer to the brand, hurting Apple, who also finds itself competing with Amazon in music and film. Amazon is Google’s largest customer, but it’s also threatening Google in search—55 percent of people searching for a product start on Amazon (vs. 28 percent on search engines such as Google). Apple and Amazon are running, full speed, into each other in front of us, on our TV screens and phones, as Google fights Apple to be the operating system of the product that defines our age, the smartphone.

Meanwhile, both Siri (Apple) and Alexa (Amazon) have entered the thunderdome, where two voices enter, and only one will leave. Among online advertisers, Facebook is now taking share from Google as it completes the great pivot from desktop to mobile. And the technology likely creating more wealth over the next decade, the cloud—a delivery of hosted services over the internet—features the Ali vs. Frazier battle of the tech age as Amazon and Google go head-to-head with their respective cloud offerings. The Four are engaged in an epic race to become the operating system for our lives. The prize? A trillion-dollar-plus valuation, and power and influence greater than any entity in history.

Pages 6-9
Excerpted with permission from Penguin Random House

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First published on: 19-11-2017 at 03:46 IST