Unicorn Ecosystem? Scott Galloway

https://www.citylab.com/life/2017/11/big-tech-and-the-city/546827/

Of The Four, three are located in Silicon Valley, and one is located in Seattle. What do you think this kind of geographic clustering means?

There’s just no getting around it, there’s something in the water on the West Coast: an optimism, a risk-taking, a land of second chances, combined with the fact that it has some of the best engineering universities in the world. It’s Berkeley or Stanford or Caltech; even the UW [the University of Washington in Seattle] has come a long way. I don’t think you can find a company that’s built more than $10 billion in shareholder value in a three-year period that isn’t a bike ride away from a world-class engineering university.

Lots of people talk about “the rise of the rest.” Do you think there are any cities that can compete with San Francisco or Seattle in generating one of these big companies?

Find the universities that are gaining the most traction in engineering or STEM and you’re going to find an ecosystem that can produce a unicorn. My money would be on St. Louis, because of Washington University, which is starting to attract the finest human capital in the nation. Whoever gets the smartest 18-year-olds, 10 years later, they get a unicorn. Pittsburgh is also a great candidate because of Carnegie Mellon. You know how they say “follow the money”? I say follow the university rankings, specifically for engineering schools.


Three of the big four, Apple, Google and Facebook, have suburban campuses. But in your book, you talk about the advantages of being located in the urban center, like Amazon is in Seattle. Looking to the future, which of these two models—the suburban campus, or the urban headquarters—will prevail?

One hundred percent, urban. It’s like a reverse blast zone: Everyone’s being sucked to the epicenter. Even Facebook has acquiesced. Kids are getting sick of being on these buses from San Francisco and commuting down to Facebook or Google. All of the large tech companies that didn’t have campuses in San Francisco are building them.

With that preference for urban environments, do you think cities like New York or Boston might have an increasing advantage in producing leading tech companies?

New York is going to boom with the introduction of a third world-class university. There’s NYU, there’s Columbia, and now there’s Cornell Tech on Roosevelt Island. Within a long bike ride of each other you have three of best universities in the nation—and that concentration is intoxicating for companies.

In your book, you extoll Amazon’s purchase of Whole Foods as well as Apple’s decision to open stores. Many people are talking about the “retail apocalypse,” but you say having a physical presence is an important advantage for these companies.

The rumors of the death of stores are greatly exaggerated. We’re going through a cyclical, not structural, downsizing in stores, simply because the square footage of malls grew at double the rate of the population from 1970 to 2015. In the United States, we have three times more square footage of retail space than Britain, and 50 percent more than Canada. But the strategic role stores play in a company’s health—its brand health—is only increasing in importance. The decision that created more shareholder value than any decision in the history of business was Apple’s decision to forward integrate into this dying medium called “stores.”