“GAFA” – Scott Galloway spends roughly 90% of his time dealing with the four biggest digital companies in the world. But how does the NYU prof see the state of digital in Germany? And what advice would he give up-and-coming entrepreneurs and why does he feel Germany should be churning out more unicorns? In this OMR Podcast exclusive, Galloway sits down with OMR founder Philipp Westermeyer to answer these questions and more.
Tough Love for the Big Four
While talking to OMR founder Philipp Westermeyer in the OMR Podcast, Galloway stayed true to form delivering a searing critique of the new monolithic conglomerates. “The reality is, we have four monopolies that are sucking most of the oxygen out of the room.” However, Galloway isn’t going after them, because they have done anything wrong in his view. In fact he started out writing his best-selling book The Four as a “love letter to these companies.” Yet, the current ecosystem is such that “it is difficult for smaller businesses to gain any traction without being spotted by and then executed by one of the big four.”
“Zalando is experiencing D-Day part 2”
This existential crisis is, of course, also felt beyond the shores of the US of A. While Galloway sees Zalando as the most impressive German internet company (“kind of the closest thing in the world to a high-end Amazon”), he sees them under direct threat from Bezos’ empire. “Amazon’s expansion of fulfillment facilities in Europe is D-Day part 2 as you are seeing the Americans landing millions and millions of troops on the shores of continental Europe.”
Despite the biggest shark seeming to circle Zalando, Galloway feels their recent IPO was a good enough move, even if he won’t be snapping up any shares, as the current trading price corresponds to a larger EBITDA multiple than Amazon’s. “That is quite the pressure being placed on the company.” Galloway is also skeptical of whether or not Zalando will be able to maintain its success moving forward. “Zalando is fantastic, they do a great job—but Amazon will damage them,” says the marketing prof.
I’m not trying to be the best
While he paints a bleak picture for the future of Zalando, it’s the type of no-holds-barred analysis that audiences have come to expect from Galloway, off-the cuff and unchained. But for someone who began as an entrepreneur, his style hasn’t always been so cutthroat. “When you are in business, a big part of your job is to not piss people off. But now I try to write these things unafraid. As long as you’re not being malicious, I try to speak as openly and honestly as possible.”
This honesty has made him an in-demand speaker on the international circuit and a go-to guest for US news outlets. Although his fame is rising and his works are read by millions around the world, he says he is not trying to be the best at what he does. “I’m trying to be the only one at what I do.”
Props for Mathias Döpfner
The latest development is yet another instance of proof for Galloway that Amazon needs to be broken up: “The fact that the sheer amount of capital that Amazon has can determine whether or not a fantastic company like Zalando survives raises larger existential questions.”
Another German company that Galloway is impressed by is publisher Axel Springer. “Mathias Döpfner is a real visionary and possibly one of the best CEOs in Europe,” says Galloway. He went on to say that while Axel Springer is a fantastic company they are in “a dying business and they need to reinvent themselves. They want to get off their heels and get on their toes.” In the NYU prof’s eyes, Business Insider and Emarketer were both very shrewd acquisitions, even if Axel Springer overpaid for BI. “I wouldn’t be surprised if you see Axel Springer do a lot in the US.”
For a man from SoCal living in NYC, Galloway seems to be well aware of the happenings in Germany, and for good reason. He has close familial ties to Germany and spends significant time in the Fatherland as his wife hails from Munich. They are both big fans of the country, drive Mercedes and BMWs and have even taught both of their children German. But there is also a professional debt the Galloway has to Germany: he first gained international notoriety after his video was shown at Burda’s DLD.
Where are the German unicorns?
Despite ample reason for optimism, Galloway is a bit surprised that “with the infrastructure Germany has, there should be more German unicorns” (companies with a billion-dollar valuation). Germany is the largest economy in Europe, a ton of great universities. It has all the ingredients to build unicorns.”
To hear what else Galloway had to say about medium-sized German companies, what they and other smaller companies can do to survive and what the real motivations were for writing his scathing rebuke of the four biggest digital players in the world in his best-selling book The Four, check out the latest episode of the OMR Podcast.
The podcast at a glance:
- On his background and what did he do before getting to NYU (0:50)
- On the group he led that tried to take over the New York Times (2:00)
- On why he writes such open and personal newsletters? (3:11)
- On how his life changed after selling his business? (6:27)
- On how his work compares to journalism? (8:29)
- On how his tenure take-over attempt of the New York Times went? (10:00)
- On if Axel Springer’s acquisition of Business Insider surprised him? (11:00)
- On if he follows other Germany companies? (12:30)
- On how his personal connection to Germany came to be (16:40):
- On what goes on behind the scenes before he can go public with his predictions (19:51)
- On why he sold L2? (20:50)
- On what he would recommend Germany companies do to be prepared for the future (24:45)
- On which German companies have impressed him the most (34:55)
- On which sectors hold the most potential for new companies (35:45)
- On why it’s important to break up big tech (36:58)
- On who approached him after calling for the break-up of big tech (43:36)
- On who inspires him and who does he learn from? (48:32)
- On if he think now is a good time to found a media company (51:15)