L2 Founder and Chairman Scott Galloway has long predicted the winners and losers of technology and retail. Some of those predictions have been wrong (Pinterest and Twitter’s decline) and others right. Onstage at Cannes Lions, Galloway presented his take on which three companies would be the most valuable in the world: Uber, Facebook, and Apple.
Facebook: Not only has Facebook’s revenue surpassed the entire magazine industry, this online mogul has implemented one of the most successful pivots and bait & switches in the entire world. After convincing brands to build up their online communities in hopes of ad-free reach, Facebook began to charge brands to interact with those fans. The social media platform placed a paywall between the two, telling brands to assume their organic reach was zero.
Facebook’s transition to a mobile-first company was impressive as well. It now obtains 64% of its revenue from mobile advertising.
And perhaps most integral to its success, Facebook has more federated IDs than any major tech company.
Uber: Scott Galloway predicts this company – which embodies combination of Rand and Darwinian philosophies – will be worth a trillion dollars. Uber is promising to do the work of UPS, FedEx, United States Postal Service, GM, Amazon, and Seamless. But is what’s good for Uber good for the rest of the world?
As of January 2015, Uber had 162,037 active drivers in the U.S. and has since attempted to keep their status as contractors instead of employees. More people work for Uber than the MTA and Delta, but Uber employees have no access to health insurance, unemployment compensation, paid holidays, or any of the benefits of full-time employees. Furthermore, Uber has plans to eliminate even the cost of hourly wages by making self-driving cars. Last month, Uber made headlines by poaching a sizeable group of robotics engineers from Carnegie Mellon University.
Apple: Apple is set to disrupt the luxury industry. It has the pillars of a luxury brand: craftsmanship, an iconic founder, an exceptional price point, vertical control of distribution, globally recognizable, and with a self-expressive benefit. With the launch of the Apple Watch, it launched a nail into the coffin of wearable tech.
The secret to Apple’s success is its appeal to all sections of the human torso.
What about companies that will shrink in value in the next few years?
The television industry has been raising prices for ads and cable, even though viewership growth has been in decline. Between 2014 and 2015, hours spent watching video declined to 4:15 hours, while consumers’ time spent watching digital video increased.
The audience for digital video is small in the U.S. relative to other wealthy countries:
And the social landscape will become a winner-take-all system, forcing smaller brands to be consolidated into larger ones.
As the dramatic decline in user engagement on Google+ shows, only a certain number of social platforms can exist in the long run.
An overlooked winner in social media: Linkedin. It has 347 million monthly active users, and is expanding globally. The company has built a moat, with recent college grads as its fastest-growing consumer base.
As we move toward an economy of a few dominant players who can produce more with less (workers), jobs and wages decrease. That has huge implications for society, which Galloway discusses in his presentation. See full video here.
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