Book Review: “The Four” by Scott Galloway
Why Scott Galloway's 2017 book matters to all of us.
Scott Galloway is one of the most respected Business School Professors of our time. While he is widely celebrated on YouTube, this is his first book and its topic cannot be more relevant for our times. By “The Four” he means the four biggest and most influential companies of all time: Amazon, Apple, Facebook, and Google. In his book, he focuses on how these companies realized world dominance, and which problems they cause to our society and modern civilization. While the book has been written in 2017, its content is nevertheless relevant for us today. From the Four, I am only focusing on two of the Horsemen: Amazon and Apple.
While many only see a popular online retail shop when thinking of Amazon, it reaches far beyond these limits. Amazon has become the world´s most widespread, influential, and successful retailer in history, but if the curtain is pulled back, one will see that operates in many other branches of business. According to numerous surveys, in 2016 52% of all American households had Amazon Prime. This number has only grown since then. Nowadays, nearly everyone knows what kind of service one gets by being a member of Prime. Amongst retail businesses, Amazon also dominates another market: the cloud market. AWS, Amazon Web Services, now has the largest market share of all cloud services in the world and brings in more than 50% of the company´s income. While other companies struggle to be innovative, Amazon has the advantage of having unlimited capital, thanks to its investors and its policies towards dividend payments and profit sharing.
Amazon is in many ways dangerous to today´s society, including its drive to digitalize and operate all its processes with artificial intelligence, in other words, robots. The thrive and successful implementation of bigger and bigger market domination is hurting and/or destroying other companies, which will eventually be forced to let their workers go. One would think, this process means that Amazon is creating more and more jobs, since it is rapidly growing its business, and its profits. Sadly, the reality is that with the growing number of robots in retail warehouses, Amazon is not creating many jobs accordingly to their growth.
The book argues that one of the most successful business decisions ever made was turning Apple from a regular tech company into a luxury goods producer. Everybody loves luxury products, as they show significance amongst peers. Steve Wozniak and Steve Jobs were the masters of turning tech products into luxury items. Therefore, Apple generated 79% of profits in the global smartphone market, while only owning about 14.50% of the market share in 2016. Since then, these margins were only marginalized, to the account of Apple. The model of producing cheap goods and selling them for luxury prices is just the holy method of sales, and Apple is an expert at it.
Galloway´s most important criticisms towards Apple is the fact that it is being treated differently amongst other companies. The company is being seen as a God, and special treatment follows not only from regular consumers, but also from the judicial system in the United States. Apple created a whole new level of authority in our society as the world´s most valuable company (now valued at $2.2 trillion), but this also has its side effects. When a company can say no to the FBI while being asked to unlock an iPhone of a murderer in the middle of an investigation, you know that the company is not morally on the right path. Accordingly, it is troublesome that such a company does not cooperate with authority and does not have to follow the rulings of judges.