{"id":82575,"date":"2022-10-27T17:15:00","date_gmt":"2022-10-27T21:15:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=82575"},"modified":"2022-11-10T12:16:35","modified_gmt":"2022-11-10T16:16:35","slug":"the-big-four-tech-companies","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/the-big-four-tech-companies\/","title":{"rendered":"The Big Four Tech Companies: The Secrets to Their Success"},"content":{"rendered":"\n

Just how big are the big four tech companies? What are the four deep human desires that these companies appeal to?<\/p>\n\n\n\n

The Four\u2014Amazon, Apple, Facebook, and Google\u2014are among the largest companies in the U.S., and their products and services infiltrate every aspect of American life. In The Four<\/em>, Scott Galloway takes a hard look at these technology companies that dominate the modern marketplace.<\/p>\n\n\n\n

Keep reading for an explanation of just how pervasive these companies are and the two factors that are major contributors to their continuing success.<\/p>\n\n\n\n\n\n\n\n

The Size and Pervasiveness of the Four<\/h2>\n\n\n\n

As of 2018, Apple, Alphabet (Google\u2019s parent company), Amazon, and Facebook were the first, second, third, and fifth-largest companies in the US, respectively (the fourth was Microsoft). The big four tech companies all had market caps in the hundreds of billions\u2014$888, $773, $748, and $534 billion, respectively. <\/p>\n\n\n\n

(Shortform note: Market cap, short for market capitalization<\/a>, means \u201cthe total dollar market value of a company\u2019s outstanding shares of stock\u201d (in other words, the price per share multiplied by the total number of outstanding shares). For example, a company with 10 million shares selling at $100 a share would have a market cap of $1 billion. Market cap is used in the investment community to determine a company\u2019s size and value, and is considered a more reliable indicator than sales or total assets. As of 2022, Apple, Alphabet, and Amazon were still in the top five biggest companies in America by market cap<\/a>, but Facebook (Meta Platforms) had dropped to number six, and Microsoft and Tesla had risen to second and fifth places, respectively.)<\/p>\n\n\n\n

The Four\u2019s products and services infiltrate almost every aspect of American life.<\/strong> We use Amazon to purchase everything from garden tools to groceries to streaming movies. We communicate on Apple phones and work on Apple computers. We stay connected with friends and family on Facebook. And we rely on Google for answers to every imaginable question.<\/p>\n\n\n\n

In fact, says Galloway, 64% of US households have Amazon Prime. Amazon controls 44% of US online commerce and has a 77% share of voice technology. Apple, the most profitable company in history, earns 79% of the profits of the global smartphone market<\/a>. Out of the 7.5 billion people in the world, 1.5 billion use Facebook on a daily basis. Additionally, Facebook owns four of the top five mobile apps in the US\u2014Facebook, Facebook Messenger, Instagram, and WhatsApp. Together, these apps (along with their web versions) consume approximately 50 minutes of each of their users\u2019 typical days. Google commands a 92% share of the internet search market and fields 3.5 billion search queries a day. <\/p>\n\n\n\n

(Shortform note: Since The Four<\/em> was published, these companies\u2019 products have become even more omnipresent in the daily lives of Americans and people worldwide. As of 2022, 76.6%<\/a> of US households had an Amazon Prime subscription. Approximately one billion people around the world in 2019 were using more than 1.4 billion individual Apple products<\/a>. Facebook had almost 2 billion<\/a> daily users, who spent an average of 88 minutes a day<\/a> on Facebook and Instagram combined. Although Google doesn\u2019t publish exact figures, some estimates place the average number of Google searches per day at 8.5 billion<\/a>.)<\/p>\n\n\n\n

The Vision of the Four<\/h2>\n\n\n\n

Galloway claims that the success of the Four is due in part to the fact that they each started with a simple vision that attracted major capital investment<\/strong>.<\/p>\n\n\n\n

For example, notes Galloway, Amazon managed to raise more than $2.1 billion in investors\u2019 money before it broke even, relying on a simple story: \u201cEarth\u2019s Biggest Store.\u201d It told this story via the business and tech media, which resulted in the market bidding Amazon\u2019s stock higher. Backed by so much cheap capital, and therefore not reliant on profit, Amazon was able to take huge risks and sustain significant failures, allowing it to grow rapidly.<\/p>\n\n\n\n

(Shortform note: Some commentators have noted that, while the origin stories of the Four involve people dreaming up visionary ideas in a dorm room or garage, this is a far cry from the way the tech industry works today<\/a>. Startups still have the ability to succeed based on a simple vision that attracts capital, but to do so they often have to rely on the platforms created by the Four. For example, many companies, Netflix among them, don\u2019t have the internal capabilities to store all of their content, so they have to pay Amazon\u2019s cloud computing subsidiary, Amazon Web Services, to store their content on Amazon servers.) <\/p>\n\n\n\n

The Four\u2019s Ability to Appeal to Our Deepest Desires<\/h2>\n\n\n\n

Galloway argues that, in addition to benefiting from a simple story that attracts cheap capital, the success of the Four is due to the fact that they appeal to our deepest human desires: for consumption (Amazon), procreation (Apple), love (Facebook), and God (Google). <\/p>\n\n\n\n

Desire #1: Consumption<\/h3>\n\n\n\n

Galloway believes that our desire to buy products on Amazon can be traced back to our earliest ancestors. For 90% of human history, he explains, we were a hunter-gatherer society<\/a>. Over-accumulating was a question of survival: The more stores of food and other necessities you had on hand, the more likely you were to survive natural disasters such as famine or drought. Galloway says that we have retained our ancestors\u2019 instinct to collect as many goods as possible\u2014and Amazon makes it easy to satisfy that instinct by giving us almost immediate access to all manner of consumer goods. Modern capitalist society<\/a> further reinforces our instinct for accumulating goods by positioning consumption as a noble act that improves the economy.<\/p>\n\n\n\n

Other Instincts Driving Consumption<\/strong>

In The Consuming Instinct<\/em><\/a>, marketing professor Gad Saad suggests that our drive to consume is even more powerful than Galloway claims. Saad argues that our desire to consume everything from burgers to cars stems not only from our survival instinct<\/a> but also from several other Darwinian instincts: to help others and to help those who help us.

Our instinct to help others\u2014in particular, those with whom we share genes\u2014means we\u2019ll spend money to support our family and friends. And the instinct for reciprocity leads us to make purchases in order to pay back others for having helped us, as well as to create debts that others must then pay back to us. According to Saad, although culture plays a role in consumerism, we\u2019re also at the mercy of these innate evolutionary forces when making purchasing decisions<\/a>.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Desire #2: Procreation<\/h3>\n\n\n\n

According to Galloway, when we purchase Apple products, we\u2019re similarly motivated by an innate need\u2014in this case, the need to procreate. He claims that people want luxury products like Apple phones because it makes them more attractive to prospective partners.<\/strong> Only about 1% of the world can afford Apple products\u2014so carrying one signals to others that you\u2019re in an exclusive group of wealthy, successful individuals. This makes you a more desirable mate from the standpoint of natural selection<\/a>.<\/p>\n\n\n\n

(Shortform note: Galloway suggests that, according to the principles of natural selection, wealthy individuals are more attractive than non-wealthy individuals. Research both supports and refutes this claim: Across cultures, wealthy men<\/em> are more likely to reproduce, but wealthy women<\/em> are less likely to reproduce<\/a>. In addition, male wealth more strongly correlates with reproduction in subsistence societies, whereas the correlation is weaker in industrial nations.)<\/p>\n\n\n\n

Apple is able to sell low-cost products at premium prices precisely because these products have become luxury goods emphasizing scarcity, exclusivity, and aesthetics. Galloway says that, due to its status as a luxury brand, Apple is the only one of the Four likely to survive in the long term.<\/p>\n\n\n\n

(Shortform note: In Contagious<\/em><\/a>, marketing expert Jonah Berger explains why a product\u2019s perceived scarcity and exclusivity result in increased sales. He argues that when a company emphasizes its product\u2019s scarcity and exclusivity, its customers feel special because they\u2019ve managed to access something that is out of reach for many\u2014they\u2019re part of a group that not just anyone can join. This, in turn, causes customers to brag about the product as a means of gaining \u201csocial currency.\u201d<\/a> The more they talk about the product, the more \u201cword of mouth\u201d marketing they generate. Berger contends that this word-of-mouth advertising<\/a> is the primary driver of a product\u2019s sales and ultimate success.)  <\/p>\n\n\n\n

Desire #3: Love<\/h3>\n\n\n\n

Facebook can help fulfill our deep need for love and relationships<\/a><\/strong>, says Galloway. He cites a 75-year, $20 million Harvard research study finding that the strongest indicator of happiness over a person\u2019s lifetime is the depth and meaningfulness of their relationships. Facebook fosters those relationships by allowing us to stay connected with friends and family no matter how far away they are or how long it\u2019s been since we\u2019ve seen them.<\/p>\n\n\n\n

(Shortform note: The study cited by Galloway began with 238 Harvard students in 1938 and reached many of its conclusions prior to 2008, when Facebook became available to the general public. The study found that happiness comes not from wealth or fame, but from close<\/em> relationships<\/a>. However, the study didn\u2019t comment on whether Facebook could help foster or maintain those close relationships<\/a>; its conclusions related solely to in-person, rather than online, relationships.)<\/p>\n\n\n\n

Desire #4: God<\/h3>\n\n\n\n

Finally, Galloway equates Google to a modern god.<\/strong> People entrust Google with questions that they\u2019ve never asked anyone else before: Approximately one out of every six search requests are completely novel questions. In addition, the fact that Google provides organic search results (in other words, you can\u2019t pay to appear higher up on the list) increases user trust in the company. Users see Google as a benevolent, omnipresent part of their everyday lives.<\/p>\n\n\n\n

(Shortform note: Former Google product manager Tristan Harris claims that, far from being a benevolent god, Google steals our time and attention to help it sell more ads<\/a>. Like other Big Tech platforms, Google is designed to be addictive, says Harris. The more time we spend on these companies\u2019 platforms, the more likely we are to view ads or purchase something from their advertisers. Because they rely on advertising money to enable them to provide their \u201cfree\u201d service to consumers, they have every incentive<\/a> to do whatever they can to keep our attention trained on their platforms.) <\/p>\n","protected":false},"excerpt":{"rendered":"

Just how big are the big four tech companies? What are the four deep human desires that these companies appeal to? The Four\u2014Amazon, Apple, Facebook, and Google\u2014are among the largest companies in the U.S., and their products and services infiltrate every aspect of American life. In The Four, Scott Galloway takes a hard look at these technology companies that dominate the modern marketplace. Keep reading for an explanation of just how pervasive these companies are and the two factors that are major contributors to their continuing success.<\/p>\n","protected":false},"author":9,"featured_media":82577,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[45,104,9],"tags":[785],"class_list":["post-82575","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-marketing","category-psychology","tag-the-four","","tg-column-two"],"yoast_head":"\nThe Big Four Tech Companies: The Secrets to Their Success - Shortform Books<\/title>\n<meta name=\"description\" content=\"The big four tech companies appeal to our deepest human desires. 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