Galloway - The Four: the Hidden DNA of the Tech Giants

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. Theyve put a supercomputer in your pocket, are bringing the internet into developing countries, and are mapping the Earths 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.

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 arent benevolent beings, yet we invite them into the most intimate areas of our lives. We willingly divulge personal updates, knowing theyll be used for profit. Our media elevate the executives running these companies to hero statusgeniuses 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. Ill 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 nobodyindividual, enterprise, government, or otherwisestands a chance?

This is where the Four stand at the time of this writing:

Amazon: Shopping for a Porsche Panamera Turbo S or a pair of Louboutin lace pumps is fun. Shopping for toothpaste and eco-friendly diapers is not. As the online retailer of choice for most Americans, and increasingly, the world, Amazon eases the pain of drudgerygetting the stuff you need to survive.

Yahoo! Finance. https://finance.yahoo.com/

As I write this, Jeff Bezos is the third wealthiest person in the world. He will soon be number one. The current gold and silver medalists, Bill Gates and Warren Buffet, are in great businesses (software and insurance), but neither sits on top of a company growing 20 percent plus each year, attacking multibillion-dollar sectors like befuddled prey.

Apple: The Apple logo, which graces the most coveted laptops and mobile devices, is the global badge of wealth, education, and Western values. At its core, Apple fills two instinctual needs: to feel closer to God and be more attractive to the opposite sex. It mimics religion with its own belief system, objects of veneration, cult following, and Christ figure. It counts among its congregation the most important people in the world: the Innovation Class. By achieving a paradoxical goal in businessa low-cost product that sells for a premium priceApple has become the most profitable company in history.

Facebook: As measured by adoption and usage, Facebook is the most successful thing in the history of humankind. There are 7.5 billion people in the world, and 1.2 billion people have a daily relationship with Facebook.

Google: Google is a modern mans god. Its our source of knowledgeever-present, aware of our deepest secrets, reassuring us where we are and where we need to go, answering questions from trivial to profound. No institution has the trust and credibility of Google: About one out of six queries posed to the search engine have never been asked before. What rabbi, priest, scholar, or coach has so much gravitas that he or she is presented with that many questions never before asked of anybody? Who else inspires so many queries of the unknown from all corners of the world?

A subsidiary of Alphabet Inc., in 2016 Google earned $20 billion in profits, increased revenues 23 percent, and lowered cost to advertisers 11 percenta massive blow to competitors. Google, unlike most products, ages in reverse, becoming more valuable with use. The insights into consumer behavior Google gleans from 3.5 billion queries each day make this horseman the executioner of traditional brands and media. Your new favorite brand is what Google returns to you in .0000005 second.

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). Imagine the economic output of a G-10 economy, generated by the population of Manhattans Lower East Side.