The Four by Scott Galloway
The Hidden DNA of Amazon, Apple, Facebook, and Google
The Four is an overview of Amazon, Apple, Facebook, and Google, briefly covering the past, present, and future of each. The most insightful parts for me were the details on the business philosophy of luxury brands such as Apple.
My Favorite Quotes
- Simplicity is the ultimate sophistication.
- Most uber-wealthy people have one thing in common, failure.
- It has never been a better time to be exceptional or a worse time to be average.
- Only by exposing yourself to failure is real accomplishment achieved.
- The path of riches is the path of living below your means and investing in income-producing assets. Rich is more a function of discipline than of how much you make.
- Determine what you are good at early, and commit to becoming great at it.
- In addition to big tall walls, where can I dig deep moats?
- What if we did it this way?
Most retailers trade on the stock market at a multiple of profits times eight. By comparison, Amazon (at the time of the writing) was trading at a multiple of forty times profits.
The Six Major Stages of Retail Evolution in the United States and Europe
- The Corner Store
- Department Stores
- Shopping Mall
- Big Box Retail
- Specialty Retail
Amazon’s Two Types of Risk-Taking
According to Jeff Bezos
- Risks you can’t walk back from
- Risks you can walk back from
Amazon takes on many of the type two experiments.
Given a 10% chance of a 100x payout, you should take that bet every time. -Jeff Bezos
Most uber-wealthy people have one thing in common, failure.
Five Key Attributes Shared by Luxury Brands
- An iconic founder
- Vertical integration
- Global reach
- Premium price
Apple’s language of luxury is simplicity.
For example, the “1,000 songs in your pocket” slogan for the iPod.
Simplicity is the ultimate sophistication.
Cognitive psychology shows that attractive objects make us feel good.
Luxury brands define their own universe.
Iconic brand consistency, among luxury brands, is achieved by key design elements, such as:
- A cube or cylinder as an entry
- Clear glass staircase
- Open space
- Minimal interiors
- No inventory in-store, products are brought out to purchase
Steve Job’s decision to transition from a tech to a luxury brand, is one of the most consequential and value-creating insights in business history.
Technology firms can scale, but they are rarely timeless.
Technology firms experience the traditional company life cycle at an increased speed.
Every successful firm in the digital age needs to ask, “In addition to big tall walls, where can I dig deep moats?” (old economy barriers that are expensive and take a long time to dredge and for competitors to cross)
- Apple has done this superbly by continually investing in the world’s best brand and in its stores.
- Amazon does this by building expensive and slow-to-get-built warehouses.
- Google has server farms, blimps that will beam broadband to earth.
- Facebook has the fewest old-economy moats.
Visit Google Trends to see what the world is searching for now.
Great companies see value where others don’t or are able to extra value where others can’t.
According to the author, most successful businesses appeal to one of three areas of the body:
Anyone leading a company needs to understand which organ your company inspires.
People Exist in Groups of a Finite and Specific Size. These numbers repeat themselves throughout human history.
- One mate (2 people)
- Very close friends (6 people)
- Number of people we can work with efficiently as a team (12 people)
- People we recognize upon seeing (1,500 people)
Eight Factors Pevalant Among the Four
- Product Differentiation
- Visionary Capital
- Global Reach
- Vertical Integration
The majority of stakeholder value created over the last decade has been a function of removal.
Major Shifts in Marketing
- Demographic targeting
- Social targeting
- Behavioral targeting
Final Thoughts and General Notes
What a successful career strategy looks like in this brave new world.
It has never been a better time to be exceptional or a worse time to be average.
The difference between good and great can be 10% or less, but the delta in reward is closer to 10x.
Emotional maturity is critically important.
Curiosity is crucial to success. What worked yesterday is out of date today, and forgotten tomorrow.
Time to reach 50 million users:
- Telephone = 75 years
- Television = 13 years
- Internet = 4 years
- Angry birds = 35 days
Successful people go to work every day not dreading the next change, but asking “What if we did it this way?”
Be the person who comes up with practical, and crazy, ideas worth discussing and trying.
Play offense, for every four things you are asked to do, provide one deliverable or idea that was not asked for.
Ownership is a standout skill. Be more obsessed with the details, and what needs to get done, than anyone on the team.
Accomplishment is a habit that can be cultivated and repeated. Only by exposing yourself to failure is real accomplishment achieved.
Steve Jobs announced that he only hired “A”s because As only hire As, while Bs hire Cs.
Winners recognize other winners, while “also-rans” can be threatened by competitors.
Innovation is a function of ideas having sex.
Advice on Managing Young People
- Clear objectives
- Invest in them
The path of riches is the path of living below your means and investing in income-producing assets. Rich is more a function of discipline than of how much you make.
If your boss isn’t fighting for you, you either have a bad boss, or you are a bad employee.
Take responsibility for your own career and manage it.
Determine what you are good at early, and commit to becoming great at it.
The most common trait of CEOs is a regular exercise routine.
Most successful people have the time to reflect on important questions. Including, “why am I here?” and “what mark to I want to leave?”
You need to ask for help if you want to be successful.
You also need to get in the habit of helping people junior to you.
Different Stages of Business Life Cycles and the Type of Leadership Required
- Startup – requires an entrepreneur
- Growth – requires a visionary
- Maturity – requires an operator
- Decline – requires a pragmatist
Serial entrepreneurs share three qualities
- Higher tolerance for risk
- Can sell
- Too stupid to know they are going to fail
Three tests or questions to determine if you are an entrepreneur:
- Are you comfortable with public failure?
- Do you like to sell?
- Do you lack the skills to work at a big firm?
Big firms are great platforms that can scale your skills. (if you are not an entrepreneur)