(audience applause)
- So, growing up in the liquor business
I've always learned that it's super hard
to compete with alcohol so,
everybody back there do your thing.
You're not hurting feelings.
So, thank you so much for having me.
I figured, to be very honest,
especially as I've been walking around the room
and seeing so many familiar faces.
I don't think this group necessarily needs me
to sit up here and pontificate.
Now it's a little dark
and I was hoping to convert this
a little bit into Q&A
so maybe at some point we'll turn on the lights
or I'll just, I'll roll with it,
but I guess the thing that
I want to really talk about is
the thing that I've realized that
I've been spending the last 20 years
of my life on which is attention.
I think if I synthesize what I've been up to.
What gives me the honor of sitting up here
in front of all of you is that
at a very young age
and I mean going back to lemonade stands.
When I was seven years old
I had a three lemonade stand franchise
and my friends worked the lemonade stand
and I would literally, this is real
and now thinking back to it it's so, so crazy.
I would literally think it was fun at seven years old
to walk up and down the streets of Edison, New Jersey,
sit on the grass and the corners of streets
and try to figure out which poles, which trees
were the most interesting to put signs on
based on watching human beings drive
and try to follow their eyes and figure out the spots.
And as sick and fucked up as that sounds to me,
it's interesting that that was literally
the blue print for the rest of my life.
When I did baseball card shows
and I was making $3-4,000 a weekend when I was 12
I now remember, oh it's weird,
I would actually spend the first
4 hours of a baseball card show
walking the entire show, watching the market,
coming back and then setting up my table
based on how mine was different than everybody else
and that ultimately manifested. Where are we?
That ultimately manifested somewhere way out there
in Short Hills Springfield, New Jersey
where my dad had a liquor store
and I got dragged in when I was 14
and I basically spent all my days,
15 hours a day, Saturday and Sunday
and every weekend of my teenage and high school years
watching how people walked through that liquor store.
Ultimately, the internet came around
and in 1996 I launched one of the first
e-commerce wine businesses in America
called WineLibrary.com and I went on to
build that business from a three
to a $60 million business
on the same thesis, which is
where is overpriced attention
and where is underpriced attention?
When I look around this room, startups,
consultants, V.C.'s, you know, business leaders.
I'm curious, because this is a smart room.
I'm curious if even all of us are actually stunningly
and grossly underestimating what's about to happen.
Right, so for example.
Shooting the shit here a little bit, retail.
Like, retail is about to get way worse.
Like, like, when like.
It's been interesting the meetings I'm in, like
if people think what, you know,
what's gonna happen in retail
one little pred... and this is a prediction.
This is a flat out guess,
but this has been running through my mind
the last 100 days which is
there's a lot of retailers
that are going out of business
and all of us look at them and go,
"Yeah that makes sense, yeah that makes sense."
If we God forbid have a retailer that seemingly is healthy
go out of business in the next six months.
It really just collapses that whole infrastructure.
Everyday, everybody knows here
what's happening with their behavior, right?
And so, we see this happen in difference sectors,
but then I was like, okay
retails in a really scary place because if you care
about big data and analytics
we're starting to get to that threshold where there's
enough direct to consumer business happening online that
basically the infrastructure of leases and bills
really gets scary and will clearly play out.
It's not going backwards.
You know, every trend that we're living through
it's not coming back.
You know I'm in a ton of fucking meetings
with trillion dollar companies
whose new game plan is tried and true.
Which is always the tale tell to
it's fucking over, right?
Because they're hoping.
And so, retail, cool, next.
A place where I'm far more confident
of what I'm talking about.
Which is media.
We have traditional media companies
whether they're Print, Hearst, Condé
or you know, Viacom, you know and Fox
like the gig is up.
Like we got another 24 to 36 months,
but when you talk about
$80 billion in TV advertising,
like, that's gonna play out,
like it over, like, O.T.T. is real.
Facebook comes out with it's O.T.T. product in a month.
You know, and the same way that you didn't think
you'd watch a Netflix until there was House of Cards.
You don't think you're gonna watch a sitcom
or show on Facebook until something comes out
that you are gonna watch.
And so today with Alexa
when you look at the gangster level in which Facebook
and Amazon are innovating.
Not giving a fuck about wall street and short term ROI
and investing for the long term.
It's just very clear to everybody smart in here.
What I'm curious about though is are we just
underestimating the whole thing.
Is the internet now hitting real maturity
22, 23 years into consumer internet.
1995, Windows 95 normal people went on.
I know there's some nerds in here,
but normal people went on around that time.
(audience laughter)
And so are we just hitting that crescendo moment?
Because you've got incredible trends.
When I think about CPG brands
and the absolute fascination I have over the next decade
of watching the biggest brands in the world:
Proctor, Unilever, J&J, Coca-Cola, Pepsi.
Go through channel conflict wars with Walmart
and Costco and Target.
DTC is putting so much pressure.
The internet is the middle man.
And bookstores and black car services
just got caught first.
And so everything's coming.
I have sat in my office on the 25th floor
of this beautiful building in the last 100 days
and have sat down with founders who have started
direct to consumer fashion brands that have gone from zero
to between $3 and 10 million in revenue
in one year on the back of having pretty people
on Instagram post about it.
- [Woman] mmhmm.
- When you start understanding
and this is my macro for all of us.
I think everybody here needs to start understanding
that every incumbent is not gonna lose
to another incumbent.
They're losing by the death of 1,000 cuts.
Right? It's not that Ralph Lauren
which is going through what it's going through.
It's not that LVMH or Coach is putting them out of business.
It's that there's 4,000 brands that are gonna do
$4 million in revenue next year.
And that shit adds up.
And that's just happening everywhere
and we're living through the long tail.
It's even happening in the most innovative places.
There's a lot of people here that have not quantified
how underpriced influencer marketing is yet.
Yet, even in that world, disruption has come
because the long tail influencers of
25 to 50,000 followers are starting to disrupt
the people that are overpriced with a million followers.
I mean, it's happening so fast.
I'm watching very smart people jump into things
three years after it actually happened
with four years ago talk,
and that creates enormous disruption.
And so I guess, the one thing that I would say
again, seeing a lot of faces that I know here.
So we've got real top to bottom,
CEOs of billion dollar companies
people that are starting startups.
I think we really need to calibrate several things
which is there's an obnoxious amount of opportunity
because people are under valuing where the attention is.
The attention is in the cell phone.
Our cell phone is the remote control of our lives.
Period. End of story.
There's nothing remotely close to as important
as the cell phone and when you start understanding
that over 50% of the time spent on the cell phone
is spent on seven to 10 core apps
which are social networks and throw in YouTube in there
or whatever you want to call it.
You're talking about more than half of the time
we spend on cell phones on things called Facebook,
Twitter, Instagram, Snapchat, and YouTube
and all of the sudden social media goes away
from being a slang term that people think
is an after thought or a sprinkle
and it starts becoming the foundation of communication
in our society.
And so I implore
and one of the things that I'm very fascinated by
so for example, I think Facebook videos are the great
underpriced opportunity to change your business.
So if I'm a SaaS B2B business in this room
doing $500 million in revenue
instead of getting booths at trade shows
and buying ads in B2B magazines,
I know that I could run a video on Facebook
that's two minutes and 18 seconds long
and I can target employees of any company I want
and the copy and the opening line of the video could be
does your CIO know?
And I know that that CIO will then get 700 people
or 17 people or she will get 14 people sending that video,
and that becomes a gateway to business development.
People are just not practitioners.
This room is filled with people
who have a whole lot of things to say about stuff,
but have never actually done it.
There's a lot of opinions here on buying Snapchat filters
in the open marketplace. (crowd laughs)
There's a lot of opinions here.
You like that? It's true.
And I say it because I do it in every other thing
that I don't know what the fuck I'm talking about in, right?
I've got opinions on everything.
But what's been fascinating is that people got opinions
on what's actually happening, but they're not practitioners.
We have a massive disconnect between headline reading
and practitionership in the modern day
of running businesses and marketing.
And that is an enormous arbitrage of opportunity
and it's also the preview to a whole lot of carnage.
And so, I don't know.
I think as somebody who's most comfortable in chaos,
think this is gonna be the best.
I desperately want Wall Street to melt,
I want, I'm so tired of all these peacetime generals,
these CEOs that have been navigating
the last seven years of good times.
I think we need a massive correction,
I would prefer it.
And in that correction there will be enormous opportunity
because the biggest brains in the world,
overhead and infrastructure,
is based on a world that doesn't exist anymore.
And you know what's funny?
The 13-15 faces that I'm able to
actually see with the lighting,
you all know.
(audience laughter)
I can see it. You all know.
I'm not so smart, I'm just saying it.
And I'm saying it, not because I'm noble,
but because my economics are tied up in it.
And so, one thing I would tell this extremely smart group,
is the most fascinating thing about the last
20 years of my career,
is that people say shit they don't believe,
because of short-term economics,
which eliminate all their
long-term economic opportunities.
And so this group, needs to debate that.
Because this room is filled with that,
and in that is outrageous opportunity.
So if you work somewhere,
and you believe something else,
I highly recommend you put it on the record
'cause everybody in that room will remember,
when shit hits the fan,
and the people that are historically right, win.
And that is going to be very important
for your actual livelihood.
Right now, you may be pandering to
what's good for your livelihood, for your bonus right now,
but when shit hits the fan, you get negated,
and debt, it's a detriment for being historically incorrect.
So, I would implore everybody to look at the macro math.
To understand what's really going on.
We live in a world Kylie Jenner got paid 1.3 million dollars
last week, to post one picture on Instagram and Snapchat.
And guess what, it was a good fucking deal.
It was.
And so, I think people are holding on to a reality
that doesn't exist anymore, so,
I'm pumped.
(audience laughter)
And I hope you are too, because if you are,
that means that you haven't bought that,
you know, people love to make,
I was with a client, CMO, and she was razzing on retail,
and I was like, but you're doing the same thing
with your corporate career in here.
Your infrastructure, your golden handcuffs,
are their leases.
So I dunno, I think it's an interesting time,
and I really appreciate your attention.
I'd love to do a little Q&A if anybody's interested
so, thanks for having me.
(audience applause and cheers)
Q&A?
Anybody have any questions?
About anything, randomly?
Yeah.
- [Man] You said on the, thank you sir,
- Shh!
- [Man] You said on the cell phones, with the issue,
50 percent plus people are,
- Yes, yes.
- [Man] Spending all of their time on cell phones
seven to ten apps.
- Yes.
- I don't wanna say that those apps are, kind of,
time-wasting, that might not be the word,
but what happens, what are the next,
seven to ten big apps,
and what are people going to be doing?
- I have,
so, I have no fucking idea.
(audience laughter)
You know, I get a lot of credit cause I was an early
investor in Facebook and Twitter and
Snapchat and these things,
but they've already, they already made it.
The only thing I do is, I'm a practitioner,
I think it's a good idea to wake up in the morning
and look at the top 200 apps in the app store or at Appway
and look at data, and download the app and play with it.
I'm not guessing, these things have already made it,
I'm just moving a little bit faster
than the rest of the market, right?
Now, I don't think they're time-wasters,
because I think escapism is a core need for human beings.
So, whether it's reading a book, or watching TV,
I watch grown men run into each other, you know?
'Cause I love football, but that's my escapism
from my, right?
So, I don't judge people doing that thing.
You know what's funny?
I don't care, right?
I think way too many people here debate
and have a romantic point of view
of how they want the world to be,
I just react to the way the world is actually acting.
Who am I to judge?
I was told as a kid,
playing video games was a waste of time.
I'm watching kids making $15 million a year
play eSports. (audience laughter)
Shit changes, right?
And so, I think that, I'm not sure,
but what i will say is this,
the only great arbitrage to the internet itself,
that is even out there, is VR.
But, as I was talking to somebody earlier,
I believe that consumer VR is quite far away.
To me, I react to reality,
nobody here knows somebody that's
spending three hours a day on VR.
Everybody here is spending seven hours a day on their phone.
When you start adding up your time on the,
we're already, in theory, living in VR.
We're living through our phone.
Do you know how many people here went hiking this weekend,
to take the selfie,
to PR themselves, to the fucking friends?
(audience laughter)
There is consumer behavior that is happening,
that we are grossly underestimating to why,
and things of that nature,
so I don't know, but what I will tell you is
I day trade attention.
My life, until I die, will be
why does slime matter to eight year olds, right?
Why did spinners happen,
why do people care about Logic and Russ,
why are they spending so much time on Instagram,
and I don't judge, I just react and sell.
Maybe pass her one, please?
The lady right there.
How are you?
- Hi, great.
So I know you have this thing with bots now,
so what are some of your favorite bots
that you're chatting with?
- [Gary] So I am, you know the funny part is,
I am obsessed with that space,
but I'm more paying atten--
you know it's funny, like for example,
I don't consume content.
I'm not necessarily using a bunch of bots that I'm
looking at what's going on with,
meet courts, and Reddit, and some media companies,
and then, and then retailers,
there's a small yogurt startup that's got a real
great messenger bot that's doing extremely well.
But what's really weird about the way I roll,
I don't spend much time doing any of this shit,
I spend all my time watching you do it.
- [Woman] Would you chat with my robot?
- Would I? Sure.
- [Woman] There's a robot that just says
bro back to everything you said.
- I'm a little bit more into,
(laughing)
I'm in. (audience laughter)
Any other questions?
Yeah, let's bring it over here.
Here, I'll switch with you, you can give me that one.
- [Sid] Hi, it's Sid, so,
- [Gary] Shh, guys.
- I will be presenting the dying vertical of retail,
as you painted, I work for Under Armor.
- [Gary] Listen, I have a 50,000 square foot wine store
right across the river, I'm in it too.
- [Sid] So, we'll work it together.
- Yeah, we'll figure it out.
- [Sid] But so, for a brand like Under Armor,
we've traditionally had success
doubling down on sporting assets,
and endorsements. - [Gary] Yes.
- And yeah, it's worked well for us,
we've had the (inaudible)
so, if you think about the long tail, influencer network
talked about, you could probably
imagine brands like (inaudible), right?
- [Gary] I'm super aware of your business, we've done some stuff.
To me it's interesting right,
in a world where you have
Cam Newton and Jordan, and Brady and Steph,
you also are in a place where you're not
fully even supporting people like Julio Jones
'cause you have a long tail, and yet there's people
even further down the long tail,
that you have,
I think that, it's a sports endorsement,
and fame arbitrage,
guys, fame is the ultimate arbitrage in our society.
So it's a great business model,
I think that, most of your athletes at this point
are locked into contracts that grossly overpay them
on their influence.
Because we locked them in, in a world that has shifted.
So it's going to be really interesting to see what
you and your two or three competitors are gonna do.
Obviously you've seen your direct competitors
in a shoe space go in a different direction and
go towards music, you know,
it's one thing for Yeezys to happen,
it's another thing to watch what
Rihanna's doing with Puma,
like this is real.
Right, and then, back to what I was talking about earlier,
there's a ton of little micro things going on under,
you know, collaborations, what Beep is doing,
and others, and so,
it's interesting,
I think Under Armour has a very traditional
Nike-like blueprint, I really do from afar,
I think that it'll be,
I'm gonna tell you one of the things
that I'm most excited about, as a fan of business,
is to actually see what you guys do
over the next two or three years.
'Cause I think there's opportunities
for you to innovate, out of necessity.
- [Sid] Yeah, no, I think that's right,
I think it just sort of goes back to the fact that
the space you're talking about, where do you invest,
where do you go, and I figure ultimately
everything's a prioritization,
I think the decision you have to make,
based on what's most important.
- [Gary] But that's when you
overspend on things in an old world,
so for me, I'd much rather allocate $300,000
in production and distribution around Julio Jones
in an Atlanta area,
than spend the ridiculous production value
to launch a Steph Curry shoe,
doing a commercial during the NBA playoffs.
Not that you're right and I'm wrong, or vice versa,
I just think that's how it's gonna play out.
- [Sid] Yeah, looking forward to that.
- Yeah. - [Sid] Thanks.
- Done? Thank you guys.
(audience cheers and applause)
(jazzy music)