Category Archives: Investment

Book Review:- The Four, Scott Galloway (ISBN 9780735213654)

A COMMENT ON THE COVER OF THIS BOOK states that you’ll never look at Amazon/Apple/Facebook/Google the same way again, which is true. Galloway brings out the corporate personality of each company. Unlike many business books he tells you things you couldn’t have worked out for yourself.

The section on Apple is notable for the way he recasts Steve Jobs as a marketing genius who transformed Apple from a technology to a luxury company, going against the conventional thinking about distribution: “Jobs understood, as none of his peers did, that whereas content, even commodity products, might be sold online, if you wanted to sell electronics hardware as premium-priced luxury items, you had to sell them like other luxury items”, with a bricks and mortar retail presence.

You may remember the portentous TED presentation asserting that Apple’s success was because the motivation of their people (The “Why”) communicated itself to customers. This was never very convincing, and it was always hard to find other companies whose success could be explained the same way. I’m grateful to Professor Galloway for showing that, although the Apple story is unparallelled, it’s a triumph of marketing, not a semi-spiritual journey.

What’s Amazon’s core competence? The conventional business book would cite the operational capabilities, engineering or brand. For Galloway, the reason is “…its appeal to our instincts. The other wind at its back is a simple, clear story that has enabled it to raise, and spend, staggering amounts of capital”.

He has plenty of comment on the other two companies, and the book is full of quotable phrases, but the real value is the way he puts the elements together. For example, in the mass marketing funnel he says that Facebook is in the high position: “It suggests the ‘what’, while Google supplies the ‘how’ and Amazon the ‘when’ you will have it.”

A growth investor will find this book helpful in deciding whether the valuations of these companies are an accurate reflection of their future prospects. There’s an equally useful survey of contenders like Microsoft, Tesla and Walmart.

Professor Galloway appears from time to time on the Bloomberg Surveillance programme and his book was Surveillance Book of the Year.

The clip is worth listening to as Galloway suggests that there’s a possibility that these companies will be broken up by the government. I didn’t see that in the book and it’s something else that investors will need to think about. You’ll also note that Mr. Galloway doesn’t use the “F-word” on Bloomberg. In the book he doesn’t seem to be able to manage without it, which is irritating.