← The Prof G Pod with Scott Galloway
The Prof G Pod with Scott Galloway
What Mayor Mamdani Is Getting Right (and Wrong), Career Risk, and Letting Your Kids Go
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Welcome to Office Hours with Prav Chi. This is the part of the show where we answer questions about business, big tech, entrepreneurship and whatever else is on your mind. If you'd like to submit a question for next time, you can send a voice recording to office hourspropertymedia.com again, that's officehoursopropertymedia.com or post your question on the ScottGalloway subreddit and we just might feature it in our next episode. Question number one I have not seen or heard these questions. Question number one comes from F. Sharpman on Reddit. They say As a co host of Raging Moderates, what do you really think of the new mayor? Both in terms of changing the economics of NYC and as a potential model for Democrats to learn from both emulating and avoiding. Okay, some data on what Mamdani the Mayor has done so far. I'm a Florida resident so I'm speaking to this as an outsider if you will. And what is probably as big as policy went so far, Mamdani partnered with Governor Hochul to launch free childcare for two year olds. I think that's wonderful. When I was a Resident of New York. Something that made me feel much better about the incremental 13% taxes we were paying while we were here was my son, my three year old, four year old son at the time was speech delayed and story ends well by the way. Just got into early decision to the college of his choice. So obviously he's thriving. But he wasn't speaking. Totally freaked out. Lovely young woman showed up twice a week and had him do a series of things to try and motivate him to start speaking again. And she was so skilled and so smart. And it was sponsored by the state, didn't cost us anything. And I thought this must make people feel so good about government. There are some things the government can do much better than the private sector. And the Republicans love of the private sector oftentimes makes a lot of economic sense. I think most things should be done by the private sector, but it goes too far. And really what they're doing is just cosplaying a love for lower taxes and small government because rich people can have their own government, their own healthcare, their own transportation, their own private security, their own schools. He's also issued an executive order to improve conditions in homeless shelters and city jails and move to end solitary confinement at rikers, enforcing a 2024 law banning it. This is a tough one, but the worst thing you can do to a human being or any mammal is to put them alone. Put your dog alone and see what happens. So I like that. Initiated a $4 million pilot program for modular public restrooms to improve access to sanitation citywide. Okay, fine, 4 million bucks. See if it works. Launched task forces to accelerate affordable housing development and cut bureaucratic delays. I love the idea of cutting bureaucratic delays. I'll come back to that. Publicly Reaffirmed New York sanctuary city policies which defines his stance towards federal authority and immigration enforcement. I don't quite frankly know how I feel about sanctuary cities. I think we should just have a sane immigration policy that embraces immigration but embraces legal immigration. And I think if we did a half assed decent job of immigration, we would need sanctuary cities. And that is, you're empathetic and you're thoughtful and recognize that the ultimate secret sauce is getting the best and brightest from around the world. But it needs to be legal immigration and that a lot of people wait in line for years on end and go through the right, you know, process and cost to be here legally. I do. At the same time the Republicans turned and Democrats turned a blind eye to it for the last 40 years. Because the 20 or 30 million odd undocumented workers, by the way, they're documented up the ass. They have phone contracts, Social Security cards, Netflix, driver's license. Why? Because we want to make sure we can document them to make money from them, but we just don't want to go through the process of admitting that we had the most flexible and profitable labor force in history, called the American undocumented worker, where they would melt into the country to pick our crops and wipe grandma's ass and serve you your Cobb salad for a fraction of the cost that it would cost. Because domestic workers don't want to roof. I renovate houses all the time and I can tell you no domestic worker wants to work outside any longer. And you think, well, it's putting pressure on wages. No, you just can't find domestic workers who will do it, quite frankly. Anyway, back to housing. I think his ideas on housing are pretty fucked up. And that is if you want to solve the housing crisis in Austin. Rents have plummeted. Why? Because they got rid of NIMBYism and they replaced it with YIMBYism. And it's little tweaks. So, for example, there used to be a regulation that for every apartment you had to have a parking space. It is really expensive and difficult to build parking. You have to go subterranean, which is expensive, or you have to buy more land. They got rid of that. Effectively. What housing represents in America is this bullshit awful UN American rejectionism and LVMH of our society. Where once I have a degree from an elite university, I want to pull up the drawbridge and applaud the dean and the basic ideology of making it harder and harder to get in. When I applied to UCLA, 74% admissions rate this year, 9%. Most alumni like that because it makes their degree more valuable. When people buy a home, all of a sudden they become very concerned with traffic and show up to local review board meetings. Taking housing permits out of the hands of bureaucrats. And I say that affectionately and putting it into the hands of homeowners is one of the worst things to happen to young Americans. And what we've seen is an acceleration in housing prices and an acceleration in the cost of college degrees. One the best means of establishing economic security, a sense of family, and also the certification you need to continue or to thrive in a capitalist society. And we've decided to LVMH the whole fucking thing. And we've decided at universities that were no longer public servants for Chanel bags and the same thing as infected housing in Minneapolis. So what do you do? You pass YIMBY laws and you provide tax credits to developers that make it economically feasible for them to develop. It's not a demand problem in New York that is killing people and creating a one bedroom that costs $5,500 and creating only three classes of people that live in New York, either tech Bros, finance bros. Or parents whose kids are putting them through New York. It's the fact that there isn't enough supply. So you apply, you provide. In addition to regulation around yimbyism, you weaponize the private development infrastructure with tax credits that encourage a massive amount of development. Rent freezes are just ridiculously head up your ass, make no sense. Failed Econ one state sponsored food lines. Which is what? State sponsored grocery stores. If there's one business we should leave to the private sector, it should be groceries. A shitty low margin business. And the idea that the person from the DMV is going to oversee what produce you have to choose from makes absolutely no sense. In sum, Mamdani, there's a lot Democrats can take away from him. He was on message, he's young, ran an amazing campaign, weaponized social media, stayed on message around affordability. And I thought he kind of won the election in one moment. I was watching the debate and I think the moment the mom Donamy kind of got wind in his sails, it took him to victory was when he said, when they were all asked where would you go? What would be your first place you would travel to after being mayor? And they all put on their virtue signaling and said, okay, I would go to Israel or Ukraine. And he'd said I'd go to Brooklyn or I'd go to Harlem. I'm the mayor of the city. That was absolutely the right thing to say. I also think some people who immediately want to call him or just think the worst of him need to try and give him a chance, give him a shot, be supportive of him. So I'm trying, I'm purposely trying hard not to shitpost him. Anyways, great city. I think this city, whether he's good or bad, is going to survive him, but I think New York's in a fucking golden age right now. Anyways, thanks for the question. Question number two.
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Hi, Professor Galloway, this is Tom from London. I recently left a very well paid career in marketing because I was bored out of my mind and decided to join a tiny five person consulting firm. The work is incredible, the clients are global and I'm more motivated than I've been in years. My one anxiety is this. The Founder. My boss is a once in a generation hyper charismatic leader. He is the product. If he got sick or decided to walk away, I'm pretty sure the business and therefore my job would disappear overnight. I see some parallels with Prof. G Media. So my question is, how do you think about legacy and key person risk from an employee's point of view? And what conversations should smart employees be having to protect their future? Finally, if we ever meet at Law of the Land, first pint's on me. Thanks.
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Law of the Land. This is a great pub started by Guy Ritchie. Love the pub. Happy to meet you there. Almost all small firms have key man risk or key woman risk. That's the nature of any small firm, specifically a services firm who controls or has relationships. I've had key man risk or key Scott risk at every firm I've started. At Profit, my brand strategy firm, I was the person that owned the relationships with our biggest clients. At Red Envelope, I raised all the money, at least initially. At L2, I was better at it. As I got older, I realized that the key to scale is pretty simple and that is the team of the best players wins. And I talk to a lot of founders of services companies and they'll say to me, and I'm bragging now, Scott, you've been able to scale your firm and sell these things for a lot of money. And we're having trouble doing that. And I say, well, okay, show me your cap table. And they say, what do you mean? I'm like, your cap table. Who owns your firm? Like, Well, I own 100% of it. I'm like, okay, that's the fucking problem. The best employees are the ones that act like owners. That's how you scale a company is you bring in a series of owners. You think about the company nonstop. And the only way to get people to act like owners is to make them owners. And that is. By the time I sold L2, I owned 40% and venture capitalists and employees owned the other 60. At profit, I owned 30% percent and venture capitalists and my co founder and employees own the other 70. At ProPG Media, as of last year, I didn't think this company was going to have enterprise value because of the things you're talking about. And then as of last year, the company is like, quite frankly scaling. And my green glands are going, I'm like, maybe there's enterprise value here. So I've started giving away equity. If you're in a small company, there's just no, you're just going to have Key man or key woman risk. And the key is, does that person. They don't have to be nice, you don't have to have friendship with them, but you have to believe that they have a vested interest in your success. And the easiest means of evaluating that is that are they giving you ownership that vests over four years? Are they giving you equity? Like, just don't talk to me. If you're a service owner, you don't understand why you can't attract good people when you want to own 100% of the firm. Yeah, no fucking shit. People. People don't. People aren't born just to make you awesome and rich. Anyways, I would just have a transparent conversation. I don't think there's a lot you can do. One, do you think this person is going to stick around? Do you think this person demonstrates excellence? Do you upside relative to this person? So you're taking risks, but in a small company, you're just going to have to endure that key person risk. The question is, are you being compensated for that risk? Because typically the upside is greater. But from a founder standpoint, the way you diversify away from yourself, I think about this every day is new products, outstanding people who kind of carry the ball. By the time I sold L2, we had several people, including people who now work at this company at Prop 2 Media, who were handling clients, handling revenue lines distinct to me, without me. And one of the keys to we got a multiple of eight times revenues when we sold L2. And one of the keys to that was I showed them my calendar and went through 2/3 of our members. We called them membership instead of consulting to get recurring revenue to get a higher multiple. But 2/3 of our quote unquote members had not seen from or met with me in the last year. And that's how we convince them. But how do you do that? You just hire amazing people. That's the key to scaling beyond key person risk. And again, you're taking more risk than in a big company. But you also should be getting compensated in the form of an equity grant. Thanks for the question. We'll be right back after a quick break.
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Welcome back. Our final question is from bina007 on Reddit. They say, how did you decide to send your kids to boarding school? What are the pros, cons? We are at that decision point and would appreciate the advice. That's a great question. It was sort of sold to me by my son and his mom. I was not a fan of it and quite frankly I hold some resentment and regret around the decision because I just wasn't ready to lose my boy. And at 14 he was gone. It was sold to me that he'd be home on weekends. He's home Saturday afternoon because he plays football Saturday morning. And even when I didn't see him, I liked knowing that he was upstairs. But here's the thing. Being a good dad is it's not about you. And he's independent. And from the moment he saw these boarding schools, he just fell in love and wanted to do it. And generally speaking, almost everybody I know who went to boarding school loved it. So I think it's good for the kids. I think sometime parents although I do think some parents just outsource parenting to boarding schools. I personally, to be honest, was hard on me. It's been great for him. I mean, the boarding school he goes to has something called the Wall of Honor and it's got 53 names of it and it's carved into marble. All these names who died in World Wars I and 2. He's basically living in a fraternity with 30 other guys and his friends are great kids. The quality of the education is amazing. They're on their own. They Got to start managing their own shit and making their own bed or not getting up on their own. I just. If you have an independent kid who wants to go to boarding school, you take a tour. I think that it's just such a personal decision. I don't have a checklist for who should go to boarding school and who shouldn't. And obviously this is a question of privilege because a lot of people don't have the money to go to boarding school. I would have been. It wasn't an option for me. I would have benefited hugely from the character and camaraderie of a boarding school. The pros is that they are pros. Developing young men and women. The good boarding schools, that's what they're in the business of, full stop. They're just very good at what they do and they have the resources to educate these kids in a rigorous fashion and give them character and give them just amount of the right amount of fun. And when they have to turn in their phones and when they don't, I mean they're just very. I have found the boarding school is very good at. The cons are really, really simple. Your kids out of the house before you want. I mean, there's no getting around it. That's the con. You know, all caps is you lose your daughter, your son sooner than you were expecting, or at least I did. I think most kids, if I look at my son's friends, are really high character kids who've really benefited from the experience and have had a great experience. You know, I suggest you just talk about it thoughtfully with the kid. Is the kid up for it? Does he or she want to do it? Go spend some time at the school and just make a decision as a family. I don't want to propose an algorithm that gets you to a yes or a no. I think this stuff is so personal. I did coach a friend of mine whose kid was at boarding school and was miserable. I'm like, okay, the first 30 days, yeah, it would kind of be weird if they were miserable or homesick. But if you're three, four, six months into this thing and the kid is miserable, then it's a do over. You put them somewhere else or bring them back home and this is what they did. And now the kid's thriving at a local school. I think that parents have a pretty good sense for this. If you're really engaged in your kid, especially mothers. Yeah, that's sexist. I'll stick to it. I think mothers are more intuitive about how their kids are doing than dads usually. On the whole, it's been a positive experience for us. It's been in the short term a negative experience for years, truly. But my son is thriving and developing into a lovely young man. So I guess it's a hands down, it's a net positive. Sorry I can't be more specific here. Thanks for the question. That's all for this episode. If you'd like to submit a question, please email a voice recording to office hourspropertymedia.com that's office hours@prophetymedia.com or if you prefer to ask on Reddit, just post your question on the Scott Galloway subreddit and we just might feature it in an upcoming episode. This episode was produced by Jennifer Sanchez. Our associate producer is Laura Gennar. Cami Reek is our social producer. Ju Bros is our technical director. Thank you for listening to the prop G pod from propg Media.