The Four is a great book

I recently read The Four, subtitled The Hidden DNA of Amazon, Apple, Facebook, and Google by Scott Galloway.  I heartily recommend it.  It is informative, engaging, and at times humorous.  The author is a professor at NYU, who founded Red Envelope and continues to work at L2, a digital strategy company that he also founded.  Galloway is a noted crank, who delights in tweaking the powers behind various technology behemoths.  He has an irreverent youtube video that predicts where Amazon will locate its second headquarters that is worth watching. https://www.youtube.com/watch?v=3baKe4B3eyI

Instead of doing a straight review of the book, I’m going to highlight some of the factoids that struck my fancy.  The book is full of them and various other insights that will reward your reading.

52% of US household have Amazon Prime.

Stores in high end malls have average sales of $800/s.f., which is a 57% increase from 2005.  Stores at B and C grade malls have average sales of $374/s.f., an increase of 13% since 2005.  Apple stores have average sales of $5,000/s.f.

The market cap of retail stores in the US totals $24 trillion, for telco companies $1.4 trillion, and for media companies $602 billion.  I always appreciate factoids that provide scale.  To wit:  grocery stores have a market cap of $800 billion, more than Google, which itself is more than the eight biggest media companies combined.

Retail is a major employer; as of 2015 there were 3.4 million cashiers, 2.8 million sales people, and 1.2 million clerks.  That’s almost 7.5 million people.  Any technology that disrupts their employment will have profound consequences for the country.

Apple’s share of the smart phone market is 15%; its share of the profits from the smart phone market is 80%.  The author believes that Apple is a luxury brand company, not a technology company.

Disney has 20 million customers per year at its various “worlds.”  Apple averages a million customers per day at its stores.  This is a stunning comparison – akin to the best of Harper’s Index.

Here’s another:  8% of children born into the bottom quintile of income attend college, 84% of children born into the top quintile do.  I think money might have something to do with it.

On a typical day, one sixth of the people on Earth use Facebook.

At the time Instagram was sold to Facebook for $1 billion, it employed 19 people.  It is now worth $50 billion.

Approximately one year ago, Google accounted for 60% of the growth in digital advertising, Facebook for 43% of the growth, and all others for negative 3%.  Between them Google and Facebook account for just over 50% of digital advertising.

One sixth of the questions posed to Google on a given day have never been asked before.

Humans can recognize 1,500 people on sight.

The book is full of opinions and information that makes you think, including

• the five factors that determine the success of a luxury brand
• Facebook’s aversion to being called a media company
• how the New York Times bungled making money from its content on the internet
• the eight attributes of a company that can rival the scale and scope of Amazon, Apple, Google, and Facebook
• the eight companies most likely to join The Four to create The Five
• the keys to personal and business success
• attributes of an entrepreneur

Among the crazier ideas in the book is that Apple should use its cash hoard to start a college that would be free to students.  Companies who hire the graduates would be charged a fee.

There is much more.  Read the book.  If you can’t or don’t want to, read a different book.