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- [00:00]
Scott Galloway
Foreign.
- [00:06]
John Evans
Ladies and gentlemen, welcome back to Uncensored cmo. Now we have got a returning guest in this episode and perhaps the most controversial, most uncensored guest of all time, Professor Scott Galloway. He is absolutely incredible. Now we got Scott together with Rory Sutherland and it's the very first time they have ever been together in a room. Recorded this in front of a live audience. And this is going to come to you in three parts. Part one is this conversation you're going to hear now with me and Scott. Next week we'll have me and Rory. And then after that, we've got an extra special episode where the two of them go head to head trying to answer some of the biggest questions in marketing. You're absolutely going to love this. Scott does not hold back whatsoever. So strap in, get ready, and here we go. Well, thank you for doing this. And we met last year, didn't we, around the launch of your book?
- [00:56]
Scott Galloway
Yeah, thanks for having me.
- [00:57]
John Evans
A couple of expected things happened after that, and something unexpected for me. So podcast did brilliantly. We got loads of social downloads. The thing that I. That shocked me was the amount of negative opinion and abuse that goes on, like, generally online. I just wasn't ready for it because.
- [01:12]
Scott Galloway
I mean, you're new to that.
- [01:14]
John Evans
Yeah, I know. I was like, whoa. I mean, I'm used to like 5 or 10%, but I'm like, dude, man, what's going on? It's like, cool. Like, yeah. How do you. How do you cope with all that?
- [01:24]
Scott Galloway
The honest answer is not well. I've gotten much better at it. It used to really. Everyone, I think, has a certain level of addiction. Addictions are. Addictions are part of our species. Right. We came off the savannah. There was an absence of sugary, salty and fatty food. So when we have access to it, we gorge. There was an absence of free play, free, safe play. There was an absence of mating opportunities. So when we have access to that stuff, we. Institutional production has outpaced our instincts, and so we develop addictions to trans fats, to gambling, to porn, because we haven't had scaffolding on our instincts. What's interesting is GLP1 drugs might be scaffolding on our instincts, bringing instincts up to institutional production. But I think it's important to ask. I think everybody has a certain level of addiction. It's just what it is. And I think it's trying. It's important to try and figure it out. My addictions are money. My whole life I've been totally. I can tell you how much I'm worth at this moment. And then I can tell you again how much I'm worth tomorrow at noon, because I check my phone and I look at my socks. I conflate money with being able to take care of my mother, which was important to me when I was younger. And I conflate money with relevance among male peers and how attractive I am to women. And I realize how crass that sounds, but I think it's accurate. I think a lot of men, a lot of people suffer with an addiction to money. And then. And it still controls me. I hit my number seven years ago. I'm very lucky. But I'm still totally obsessed with money. And then the second thing is, I'm addicted to the affirmation of strangers. And I have to consciously think, why do I care more about what someone says to me on threads than some days I care about what my kid thinks of me? That's a problem, right? And so I've tried to modulate it. I think understanding your addictions helps you deal with them. And I've gotten much better the last three to five years at modulating and disassociating. I'll read a couple comments, and then I stop. And there's. There's some wonderful. I mean, a couple things to deal with it. My atheism helps me. I'm. I'm pretty much 100% convinced I'm going to look into my kid's eyes at some point and know our relationship is coming to an end. I don't think this is a dress rehearsal. I think this is it. And what's comforting about that is that everyone here is going to be dead really soon, and so am I. And the people I'm worried about, what they think of me, it really doesn't fucking matter. They're going to be dead really soon, and so am I. So why wouldn't you squeeze as much juice out of this lemon called life as possible and not be that concerned with what other people think? That really helps me, knowing that I'm embarrassed. Oh, Everyone that I'm worried about is going to be dead soon, and so am I, so it really doesn't matter. And then the other things that really help is one of my role models, a guy named Sam Harris who has a wonderful podcast. And he says, if you have economic security and people who love you unconditionally, and I have both those things, you have an obligation to speak out regardless of the blowback. And so if I don't get on a regular basis, Real hate online, I feel like I'm not doing my job. And also, sometimes I need to acknowledge, sometimes I get it wrong, sometimes I say stupid shit, sometimes I'm just blatantly wrong and I deserve pushback. The other thing that's sort of the other observation is I wish LLMs and AI could crawl the real world because. And I'm curious if you agree with this, but when I'm out in the real world, in the, you know, the terrestrial organic world, people couldn't be more lovely. I mean, they just couldn't be nicer. Even when they disagree with you, they come up and they say, I disagree on this issue. But you have a comp, you have a civil conversation. People are funny, nice, warm, generous and. But the LLMs AI isn't crawling that world. It's crawling the online world, where I think a lot of bad actors. This sounds paranoid, but doesn't mean I'm wrong. If I were Russia or China, if I were the GRU or the ccp, I couldn't be beat us kinetically, military or economically. I would try and divide us internally and I would weaponize millions of bots to get people arguing with each other. And I think that's what they're doing. And also, if I were angry and there was no reprisal, there was no threat of violence or no opportunity to have sex with that person, I would behave much worse. And I think that's what we do online. People are much more civil in person. I hate anyone on campus with a mask. I don't. I think we should. I think it should be against university policy at NYU to let anyone with a mask on if they're going to make political speech because it lets them decide, okay, I can engage in really hateful, uncivil speech. I think the same is true online. I would like identity verification. And if you. I think people should be able to and justified or forced to have their identity. Now, the woman rights lawyer in the Gulf, fine, we can figure out anonymous accounts. But this bullshit that the platforms weaponize that. Oh, they always bring up the notion of some sort of civil rights issue around anonymity. I think anonymity has been terrible for society. I think these algorithms promoting rage, tearing at the fabric of our society. But to circle back to your original question, it very much impacts me. A lot of people say, oh, it doesn't bother me. I don't worry about it absolutely. Occasionally when I think of probably the 10 mental health episodes I've had over the last three or four years, I'd say three or four of them have Been triggered by something that I will never meet. As far as I know, it's not even a person has said about me online. And you think, okay, how healthy is that? Now I'm a man who's successful, who has people who love him, has economic security, can modulate it. Imagine what it does to a 15 year old girl, right, where she can never leave the cafeteria at high school. And you don't know what people are saying, you don't know what she's reading. So I can modulate, but I have, I want to be clear. It absolutely upsets me and bothers me some of the stuff you hear online. I'm called Professor Genocide online because of my support of Israel. And you know, just regularly people referring to me as Professor Genocide, like that just feels like shit. That feels awful, right? But I think, okay, do I, do I stand by what I say? Is it worth it to me to say these things? And ultimately the answer is yes.
- [07:36]
John Evans
I don't know if you saw the, probably did the Unilever CEO the other day announcing a massive shift in spend on social 20x increase in influencers. The irony there is that what would those CEOs be saying to their kids about social media? They're probably stopping their kids using phones, but at the same time pumping loads of money. So is there a disconnect between morally what we think's right and where the money's going?
- [08:01]
Scott Galloway
Yeah, but I'm sort of giving up, waiting for the better angels of CEOs to show up. And that is in America and to pretty much not the same extent, but almost the same extent in the uk. You're right. Your liberties, your access to family planning. I'll use that as an example. Roe v. Wade, right? Outraged in the U.S. now we basically overturned. It's the first time I think ever America's taken away a right and it's basically taken away. We've taken away a woman's right in certain instances. Access to family planning, abortion. The reality is I could be in the deepest, most conservative place in the United States and anyone in my life has access to mesophestrine. Why? Because I'm rich. The richest man in America got to decide who was president. If anybody comes for me for free speech or tries to intimidate me, I can lawyer up like there's no tomorrow. Bring it on, bitches. I can say whatever I want. I have the ability. I can meet with senators if someone tries to disappear me to an El Salvadoran prison. I've given so much money to different senators. And representatives you can bet I'll get out that someone will know, because I have resources. And one of the things that's so just incredibly disappointing is how much money and rights and constitution and democracy have become purely correlated to money. And the whole point of a constitution and rights and a democracy is to protect the lower 50. It's not to protect the top 1% are always fine. They buy their own rights, they buy their own access, they buy their own democracy. Right? But we keep waiting for the better angels of CEOs to show up and expect them to change the world and be social engineers. And I find that you shouldn't hold your breath that at the end of the day, their job is to create as much economic security and shareholder value for them and their employees and their shareholders. And I know that sounds very cynical. I have served on seven public company boards, 14 boards you can reverse engineer almost anything, they always do to what adds shareholder value. Even the person that stands up in the conference at L'Oreal or Unilever and talks about the rights of women and bullshit. It's virtue signaling meant to make young people feel better that they're working at a corporation that cares. I'm not saying they don't care about their employees. I'm not saying they're mean people. I'm not saying they're generally good people. But there's so much incentive in a capitalist society to be rich, so much incentive that it is almost impossible not to make incremental decisions. Where you see research that says one in eight girls in the UK cites Instagram as a key cause of her depression, that's Sheryl Sandberg. Sheryl Sandberg saw the same research saying, here's research showing that we can identify when a girl is social, is psychologically really depressed and weak and feeling vulnerable. And that's the exact right time to serve her a beauty ad. And she saw that research and played on it. She invented a business model that just makes kids feel shittier about themselves while roaming around the nation signing books about the important topic of gender balance in the workplace. Her boss weaponized her femininity, used it as a weapon to put Vaseline over the lens of what just a mendacious, terrible company this has been for society, because the incentives to be rich, if you're rich enough, you'll just find people all around you telling you you're a great person regardless of what you've done. Elon Musk thinks he's a great guy. He's surrounded by people telling him he's great for America, that he's a hero, that he's a great dad, despite the fact he's been concurrently sued by two separate women for sole custody of their child because he hadn't seen the kid since it was born. Right. I think he sleeps really well at night. So the incentives are so incredible in a capitalist society to maintain wealth that the idea that CEOs are going to forego shareholder value to improve the world, there's a little bit of that. Not a lot. Not a lot. So this is what we need. We need laws. We need to create an incentive system where if a girl who's 14, if the algorithms at Facebook and Pinterest pick up, that this kid is having suicidal ideation. And the algorithm automatically spits back an email that says verbatim, here are some images on suicide we thought you might find interesting. And there's an image of a noose. Pills and razors. And then the parents wake up that morning and the kid is gone. Someone needs to go to fucking jail. Instead of shaming CEOs, thinking that they'll do it on their own, that they'll decide not to have algorithms figure out that. Rage. We used to think you're in branding. We used to think that sex sells. We found something better. It's rage. We didn't know that until the algorithms popped up. It's much better than sex. Right? We always thought sex was the thing that would get the most engagement. It's not. It's rage. But thinking that these folks that we keep waiting on, the better angels of CEOs, all this bullshit, that we need our corporate leaders to step into the void. Oh, my God, Give me a fucking break. They're going to do whatever gets them at Gulfstream in their second home in the Hamptons. I've seen it up front. Up front. And these all hands meetings where they talk about helping women feel better about themselves or embracing, you know, let's. Oh, we're American Eagle Outfitters. You're not. You're not obese. You're finding your truth. No, you're not. You're finding fucking diabetes. But it's good for shareholder value. And then we get to hand them over to the industrial diabetes complex. And we have an industrial food complex that makes them addicted to sugary, shitty food. So we'll try and come up with social justice issues and pretend that we care. We just need to come out of the closet. Corporations are doing their job. They're maximizing for shareholder value. And they're good at that. That doesn't mean they can't be good citizens. They should pay their people well. They should be good citizens. But if you're waiting on them to solve society's biggest problems, good luck to us all. That's not their job. Their job is to create a shit ton of shareholder value with full body contact violence called competition. Our job is to elect people who will tax them. And then our job is to figure out what portion of that tax funding goes to our Navy, our parks, food, pensions for veterans. And also to have laws to create incentives such that if kids are killing themselves, someone in your organization is going to go to jail. And once you have those incentives in place, the geniuses will figure out how not to send a 14 year old girl images of suicide. That shit's still going on. If you had a parking meter in front of your house that cost $100 an hour, but the ticket was a dollar, you would break the law. And that is the incentive system in place right now with the majority of our digital platforms because of section 230, because of their ability to weaponize government with regulatory overrun. The incentives are just to break the law or to keep, or let me put it this way, to pretend to care about you and your kids. But they don't. They don't. We need something more optimistic.
- [14:50]
John Evans
Well, I was going to ask you if you've seen adolescence. Have you seen it? That'll take us down another route. But have you seen that?
- [14:58]
Scott Galloway
Who's seen it?
- [14:59]
John Evans
Like, that's pretty powerful, right?
- [15:01]
Scott Galloway
So these are issues I think about a lot. I had to. I'm not addicted, but I abuse alcohol and marijuana. I'm a better version of me, a little bit fucked up. And I'm not embarrassed to admit that that's not an addiction. I enjoy both those things. I'm like Winston Churchill. I've gotten more out of alcohol than it's gotten out of me. I have to have a drink. Everyone was sending me this thing saying, you got to watch adolescence. And I, I mean, I knew what was gonna happen like right away because I'd read about it and literally from the opening credits where you see the pictures of the families, I'm like, oh, fuck. Right? And so I. This show, I literally had to have a drink before watching. It's an outstanding piece of creative. It's also really inspiring. I know a lot of you aren't creative. That something like that low budget can just. It's the most popular show in the world right now. It's number one on Netflix, the number one platform. And it's Just so inspiring that people that can tell that important story with that level of creativity, the thing that's so creative about it, it's done in one shot. The entire episode is done in a one hour uncut shot. I mean, I don't know where they found that kit. My God, to do this, but it is so if you have boys, and I would say girls, but more so boys, because the story's about a boy. It is rattling. And I think it's really important work because I think the most overlooked cohort in America. And now there's research that just came out, a report called the Lost Boys in the uk, We've never seen a group of people fall further faster in a Western society than young men and boys. And by the way, women have never ascended faster. Globally, more women are seeking tertiary education than men. By the way, this is an amazing thing. This is a victory. We should do nothing to get in the way of it. In the US, women under the age of 30 are making more money than men under the age of 30. More single women in the US own homes and single men, it's now 40, 60 male to female. In college, it'll probably be 2 to 1 grads because men drop out at a higher rate. So women are killing it. And that. And I want to be clear, that's a victory. And we can also acknowledge that women still face huge issues, specifically in the corporate world when they decide to leverage their overreason to have kids and they drop to 77 cents on the dollar. There's still huge obstacles facing women. Right? Incredibly disappointed. I did a bunch of interviews in the pod with and I've signed these women and women were saying, we live in New York. They're like, I don't feel safe around men. I'm like, really? You don't feel safe? Like, no, I don't feel safe. And most of the women in the room said, if I'm in an uncontrolled atmosphere on the subway or on the sidewalk in New York, and there's men, I don't feel safe. And I thought, God, that's just so incredibly disappointing that women have to go through their lives not feeling safe. Anyways, my point is it's not a zero sum game. And I always feel like I have to add that because people hear me talking about men and they immediately conflate me with Andrew Tate and think I'm a misogynist. And I don't think I am. But this cohort has fallen so far so fast. If you walk into a morgue in the United States and you find five people who've died by suicide, four of them are men. So men are committing suicide at four times the rate of women. And if any other special interest group was committing suicide at four times the control group, we would weigh in with programs. But we don't do it because of the unfair advantage we registered. And it was unfair. I'm older than you, so I'll just say me being born in the 1960s, white, heterosexual male. From 1945 to 1995, maybe 2000, the US grew their economy more than the rest of the world had grown its economy in the previous three centuries. So just an unprecedented level of prosperity in one economy. And then they took that unprecedented amount of prosperity and they crammed it all into one third of the population, white males. I mean, when I was, I raised $120 million for my startups in the 90s and I never met a female founder who was raising money. And I know it never dawned on me, like maybe, maybe it's more than they just have different priorities. Maybe they just don't have the opportunities I had. I mean, very few, I knew very few non whites raising money. And it just kind of never dawned on me, well, okay, maybe America culturally has decided to shove all the opportunity to one third of the population. So the hurricane level wins in my sails. Unprecedented. And I acknowledge that. Right? I'm not humble. I'm a fucking monster. I'm talented, I'm really hardworking. But the reason I have such extraordinary prosperity, or a lot of it, is not my fault. But at the same time, should a 19 year old male pay for the benefit of my prosperity? Does he owe the world something and deserve a lack of empathy because of the unearned privilege I received? I've been having this conversation for five years. You want to talk about online? The comments, when I talk about young men now have entirely turned 180. It's gone from, well, you had a 3,000 year head start, your hair wasn't on fire when women were struggling. Or maybe women should just get their shit together. Okay, okay, Professor Tate, or you're as gross as George. Those were literally all the comments. Now the comments are, thank you for your leadership. And the reason the conversation has changed is 1, the data is just so overwhelming that people can't ignore it. And the people who have really pivoted the conversation and made it a much more productive conversation are one cohort, Mothers. Mothers are weighing in from both sides of the political spectrum. Feminists, hard right women. And saying something is going on with my son. I get so many of these emails and I'll distill it down to one typical email. I'm a single mother. I got three kids, two girls, one son. One of my girls is in Chicago in pr, one is at Penn in graduate school, and my son is in the basement playing video games and vaping. I mean, you can literally, I don't know how many of you have observed just a tangible difference in the emotional and economic viability of young women versus young men in our society. It is just striking. And there's all these factors. It's complicated, it's biological, it's sociological, it's economic. But the decline in the success of boys and young men is just striking. Anyways, long winded way to say, I think adolescence is so powerful, right? Touches on the father son relationship, touches on economics, touches on social media, touches on incel culture, touches on misogyny. It really is. It's so powerful that the bottom line is it's incredibly rattling. You need to brace yourself to watch it. Long winded way of saying, yes, I've seen it.
- [21:48]
John Evans
We've got a few TV advertisers in the room, actually. So it also shows the power of drama and storytelling. I know when we last met, you were, you were saying that the future belongs to the storytellers. And I just think that's a really, really good example, isn't it, of the power of cultural storytelling, you know, on something that matters a lot.
- [22:04]
Scott Galloway
It's super inspiring. The two top programs on Netflix are a superhero film that costs two or $300 million and this thing, which I doubt cost too. So it's just like breakthrough creative and storytelling and vision and risk taking still has incredible upside. You know, I just, I just find it very reaffirming that a show like that gets such resonance. It's the right show at the right time.
- [22:28]
John Evans
Yeah, totally. I wanted to pick up on a comment I saw you make the other day about strategy, which is doing. Choosing to do the hard things, which I thought was quite neat, actually, in terms of like where success comes from. Can you explain a little bit more about that? Because I thought it was a really useful insight.
- [22:44]
Scott Galloway
I teach strategy at NYU Stern. When I was 26, I started a strategy firm called Profit, which is a brand strategy firm. And I sold it 10 years later to Dentsu. And for me, when people ask what strategy is, there's, you know, there's kind of academic terms. I would say the easiest way to explain strategy is answering one question. What can we do that is really hard, right? We look at the market, we look at trends, environment, access to capital, we look at our strengths, what do we get out our distribution, our culture, IP that we have. And we cut a swath between the two to say, what could we do that is really, really hard, right? Netflix spending $18 billion a year on content because they have access to the capital markets because they tell a great story, that's really hard for anyone else to do. Apple can't spend $18 billion on content. That is really hard. Bringing together an amalgam of artisans and creating this artificial scarcity and having the discipline not to produce more and more bags that we sell for $18,000 that cost $1,200 to produce, and having a couple hundred years of heritage that no one else can replicate, that is really hard to do. Hi, we're Hermes. We're worth three times more than Nike as of today's trading day. What can we do? That is really, really hard. And I think that's what strategy is. What could you do that 99% of your competition at some point probably couldn't follow? And that's for me, what all strategy comes down to is like, how hard would it be for someone else to do this? And then the biggest mistake I think that we make in strategy. I'm fond of personal parables, but my nose goes to the right. I'm glad you. I sit here because I'm. This is my handsome side and because my nose goes to the right and. And the reason my notes goes to right is when I moved to New York, other than going to sax clubs, I used to box. And my trainer convinced me that I, you know, it's like you have pretty fast, good hand, hand speed. I like to think I'm an athlete. He said, you should enter this tournament. And so I entered a boxing tournament. I'm 62190 and someone who is 5, 8, 1, 90 and 28 and knows how to box looks like Mike Tyson compared to me. So ding. That's all I remember. Ding. And that's literally all I remember. And then I remember like thinking, God, it's so bright in here. And it was because I was on my back looking at lights and my nose has never gone back to the left. Anyways, strategy. I thought that if I was hitting a speed bag that doesn't hit back or a trainer who's paid not to hit me back, that that's the competitive environment I was going into. No, it's not. And most people make decisions thinking they're punching a speed bag. And what they don't ask themselves, they come up with a great idea. This is a good strategy, but they don't go to the next step. And that is, once we do this, if it works, how will our competitors respond? They usually don't ask that second question because there's usually very few things you can do that will be successful, that your competitors can't respond almost immediately. And most firms, when developing strategy, don't ask themselves, well, what happens when the marketplace hits back? Because it will. We're not competing against a speed bag or a trainer that we're paying. And those are basically the first two questions I ask. What could we do that's really hard? And then if we're able to do it, all right, maybe they can't hit us back if it's really hard. But don't assume that you'll be successful and competitors won't respond. I find that's where people are most unrealistic, is they think they're operating that twilight zone where the guy got to click stop a watch and time would stop for everybody else, but he could keep moving. That's not. That's not how the competitive marketplace works.
- [26:32]
John Evans
You invest in a lot of businesses. You've run and owned a lot of businesses yourself. When you assess a business opportunity, what are you looking for? What sort of things signal a good investment to you?
- [26:43]
Scott Galloway
It's pretty situational in terms of where I put my money. I would say first and foremost, I do a class on. My most popular session is the last class. I do something called the Algebra of Happiness. I struggle with depression and anger, which probably comes to as no surprise anyone's been listening the last 20 minutes. But the way I try and get better at happiness is I learned. I read every study on happiness, and then I wrote up a distillation of every study, basically every peer review research done on happiness. And I kind of put it into a book so I could learn about it and try and be better at happiness. I think happiness or a lack of depression. And I'm not saying that some people don't need pharmaceuticals and intervention. I'm not saying that. But for me, I thought if I want to get better at happiness or be. Be better at not being upset and angry all the time, I need a practice the same way if I wanted to be good at tennis, I would practice. So anyways, wrote a thing on happiness, and I forget the question.
- [27:37]
John Evans
I was thinking, you talk about a lot of businesses. You invest in businesses. Last session, how'd you Pick a good investment.
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Scott Galloway
Last session. I'm not even drunk. Last session. Last session of the class, I give the kids just a ton of advice. And most of the kids. This is proximity bias. Most of the kids in my class, if I ask them where they expect to be, they expect to be in the top 1% economically by the time they're 35. And then they use the word balance, which cracks me up. I'm like, who expects to be making, you know, all right, do you expect a balance in your life? Yes. I'm like, are your parents rich? No. Okay, give up the term balance if you expect to be in the top 1%. Anyways, the tip, the pro tip, I give the people who are. I was just an economic animal. I didn't want to save the whales. I didn't want to be a good person. I wanted to be economically secure. Full stop. That's all I wanted. And one of the keys around that, in terms of the return on your investment, what do you have? When you're young, you have an abundance of human capital and not a lot of financial capital. So the key is, where do you apply your finite human capital? Because that's the capital you have. And the reality is, the less sexy an industry, the greater the return on your capital. I mean, we're just talking about the creative industry. You have to be in the top 1%. If not the top 0.1%, you have to be in the one top 1%. There are 180,000 SAG AFTRA union members. That's the union for actors and directors and creatives. Last year, 83% didn't qualify for health insurance because they didn't make $23,000. So the. And by the way, it's not easy to get into SAG aftra. You have to be talented. This means you've done something worthwhile that expresses your creative chops. And basically, it has almost an 80% unemployment rate. Right? You want to be in modeling, sports, nightclubs, hospitality, fashion, anything that sounds cool, fine. I don't want to crush your dreams. But if you aren't getting bright, bright green signals that you might be in the top 10, 1.1%, go do something that sounds much less romantic. Because the worst advice given to people at nyu. At nyu, we invite two types of speakers. One really impressive credentialed people or billionaires. We've just decided once you have three commas around your net worth, you have insight into life. And they always end the session with the worst advice you can give to a young person. Follow Your passion. Anyone telling you to follow your passion is already rich. And the guy telling you to follow your passion made his billions in iron ore smelting. Here's what you do when you're young. You want to find out what you're good at and what you could be amazing at, right? And ideally in an industry that has a 90 plus percent employment rate and 95% of industries have a 90 plus percent employment rate. And if you go into those industries and you're really outstanding and you have the skills and the talent, no kid dreams of being a tax lawyer. The top 10% of tax lawyers probably make over a million bucks a year. The top 1% fly private and have a much broader selection set of mates than they deserve because they went into something that didn't have an overabundance of human capital such that every tax lawyer is employed. Businesses I invest in. A friend of mine's opening a members only club. I don't know if you've been to New York. These members clubs are opening every two weeks. We're going very London. He's opening a members club for creatives in the music industry. Sounds so cool. I'm like, I want to be a member. No way. I'll invest. Another friend of mine. Another friend of mine is starting a software company to help healthcare maintenance workers schedule their shifts. I want to put a gun in my mouth just talking about it. I'll write him a check. I'll write him a check. The more boring and unappealing a business sounds, the more money there is in it business. Most businesses have a infant mortality rate of somewhere between 70 and 80%, meaning somewhere between three years they're gone, they're out of business. The business in the US that has the highest survival rate is senior care. Because people don't want to be around old people. Oh, I can't wait to start a business where I'm taking care of people with memory loss and I have to change their catheters and deal with expectant, stressed out kids in insurance claim. I mean, it's a tough business. There's nothing romantic about that business. I mean, you could argue giving people the dignity at the end of the life is incredibly rewarding. There is nothing romantic or sexy about that business at all. 93% survival rate because people don't want to go into it.
- [32:12]
John Evans
Now you've been an entrepreneur many years. What can people in corporate life learn from being an entrepreneur and vice versa? Or do you think they're incompatible? Because I know you talk about, you know, entrepreneurs Kind of don't make very good corporate execs.
- [32:26]
Scott Galloway
Well, first off, we romanticize entrepreneurship. People think I have some special skill or they, they have more respect for me than someone who's done as well as me. The only real job I had was out of ucla. I started Morgan Stanley and my stallmate stayed there for the next 30 years. Still there. He's vice chairman. Makes a ridiculous amount of money. I make a ridiculous amount of money. We got together and we compared notes and it's striking how similar our net worth is. The amount of stress I have in ups and downs I have endured versus him. His life, his economic life and professional life has just been this. I mean, there's been some downs, there's been some market corrections, but I mean, I've been, I'm rich. Oh, I'm not rich. Or I'm really rich. Oh, I'm divorced and now I'm really poor. Oh, I'm rich, sort of rich. I mean, just crazy amount of stress cycles dealing with people, dealing with clients, dealing with investors. It's just being an entrepreneur is so romanticized. And the majority, 70% of entrepreneurs are in entrepreneurship because they have no other choice. And that is the majority of entrepreneurs are immigrants. They can't get a job at Google. Unilever isn't calling them. They don't have a college degree from an elite university and no gaps in their resume and a friend internally recommending them. That just always looks really good, right? So if you have access. Kids come to my office hours and they never want to talk about strategy. They basically want to talk about their job, their career prospects. And the conversation I get the most goes something like this. I have an offer from Salesforce, Google, but I'd really like to start my business. Don't be fucking stupid. Go to Google and they're shocked. They think I'm going to say, go for it, be an entrepreneur. The most amazing platforms of economic security in history are Western companies, large companies, they'll pay for your mold to get removed. They have incredible platforms. They bribe politicians, they have regulatory capture, they have lawyers to threaten small companies. They have such advantage now. There's a tremendous amount of bullshit you're going to have to endure politics. You're going to have to get emails from people regarding decisions that make no sense. Inevitably, almost right away, someone much less talented and smart than you will get promoted over you. That's just a given in the corporate world. That's just going to happen almost right away. Oh, this person's an idiot. Did you hear who Just got promoted. That is just the corporate. The only thing you can guarantee in the corporate world is a series of small injustices. But if you have the ability, if you have the ability to play well with others, to be patient, the arc of corporate justice does. It's jagged, but it bends up into the right. And they have tremendous advantage. Right? No S&P 500 company right now is going to go out of business in the next three years. They might lead the S&P 500, but they're not going to go out of business. So if you have the skill. I did not have the skills. I'm not saying that as a humble brag. I just wasn't any. When I was in Morgan Stanley, anytime more than four people went in a conference room, I'm like, are they talking about me? I was so insecure not knowing what was going on. I didn't have the skills. I couldn't read the room. I didn't have the patience. I couldn't handle it when someone who I didn't think was as smart as me was making more. I didn't have the maturity to handle a big corporation. So if you are in and also if the only real skill in being an entrepreneur that is totally is exceptional is how risk aggressive you are. And most people who go to work for a corporation, once someone's already at a corporation, I'm like, you know, you're probably not that risk aggressive. If things are booming and you meet someone who can raise a lot of money and it takes the risk way down, maybe you'll think about it. But if you're not a. The majority of great entrepreneurs don't come from great schools. They're definitely going to come. If you're at a business school probably means you're not, I hate to say it, you're probably not an entrepreneur because that's the risk free route to economic security. The most talented entrepreneurs, some of them are mostly immigrants. The greatest number of them, the most talented entrepreneurs that make a shit ton of money are generally undergrads. And the ones that are crazy successful usually started undergrad and then left. That's how risk aggressive they are. And just to go to a broader point about risk aggressiveness, about willing to take, willingness to take big risks. If you want to create a culture of entrepreneurship in an organization, you're going to have to give people cloud cover to take risks and say, okay, if this doesn't work, we're not going to fire you or demote you. And also, what big companies aren't good at is killing things because they have money. And that is if you're a small company and it's not working, you got to pivot right away. If someone's not working out, you got to fire them right away. You're nimble, you're agile, you're adapting to a warfront mentality. When you're a corporation, someone senior came up with an idea and you all want to kiss his ass and make him feel good because that's how you get promoted. And it's usually a he. Not always, but usually. And so you pretend that this little ugly monster of a child is beautiful even when it's not working. And the thing that I see really kills entrepreneurship at small companies is, is they let shit go on too long that's clearly not working. And the best companies say, okay, we wanted to have a phone, Facebook, it isn't working. We wanted to be in auctions. Amazon launched an ebay. It's not working. They pull the plug on it, right? Apple is quietly pulling the plug on their headset, which never made any sense, but they're pulling the plug on it. They'll pretend that they'll say they're updating it or. But no, they've decided this isn't working, folks. Pull the plug on it. The best big companies protect people and say you can take a risk and also have a willingness to perform infanticide on their ideas. And also entrepreneurship is vastly romanticized. The best way to get rich, or the most certain way to get rich is with a US or European corporation, and you get rich slowly. They'll have four savings plans, 401ks, stock options, maternity leave. I mean, the maternity leave at my startups has been like, okay, you know, what do you need? Two, three days? What do you need, right?
- [38:51]
John Evans
Anyways, okay, the room is mainly full of CMOs. I'll just mention that before I say this next question. You said recently that the CMOS days are numbered. What were you thinking and what should CMOs do?
- [39:05]
Scott Galloway
So I've got a lot of pushback on this. The exact quote that went viral was, CMOs like, second lieutenant in Vietnam, you're going to be dead within probably two or three weeks. And that got an interesting reception. Look, the CMOS I worked with and I haven't been in your ecosystem in a while. I got out. I got sick of selling needless shit to people. It's just not what I want to do for the rest of my life and playing on their insecurities or the need to feel younger or whatever. And so I'm not in your ecosystem as much as I used to be. But generally speaking, the CMOs I dealt with were primarily in charge of broadcast advertising and branding and design. And their job was to hire an agency that would take 8 to 12% of media and collect awards based on how much money they spent. I realize that is not the CMO of today and it can't be. And I would argue that the best CMOs to survival, the notion of spending a lot of money on broadcast media and hoping that's going to work. Think about broadcast media. From 1945 to again 1995, all of America was watching one of three channels five hours a day. I mean you could capture everybody. And there was no such thing as Netflix. Everything was ad supported so you could reach the entire nation. And then like three evenings and a 32nd spot on the Academy Awards was I think $800,000 and reached three times as many people. Now I think it's 5 million and reaches a third. So the ROI has gone down like 96%. We didn't realize how incredibly inexpensive broadcast media was. It's now the market has realized there's too many competitors that came in for that unearned margin with technology and just disrupted the entire industry. What does a CMO do? I think as a cmo you got to think of yourself as sort of the chief internal services organization. Are we going to establish advantage with supply chain? If you're the chief marketing officer at Amazon, the way they've developed a brand is through incredible supply chain. What can I find inside the company that is literally going to do the best job of innovation and cementing us as a quote unquote great brand? And it's, I gotta be honest, it's probably not gonna be broadcast advertising or thinking about the logo or hiring and firing an agency. And I realize that most of you don't think you do that, but most CMOs I dealt with came out of an environment where they were trying to think of a great breakthrough campaign that would change sales. And if you look at every company that's built more than $100 billion in market cap within a three year period in the last 20 years, they all have one thing in common. They spend almost no money on traditional advertising. So who's the, let me ask you this, who's the best? If you were to pick one company that is arguably the best at advertising over the last 20 or 30 years, who would you pick? McDonald's. Oh, that's interesting. That's funny. So I would have picked Nike. I think Nike's the best advertising. Nike is at a 10 year low. Their stock. Find me a company that has built their brand and sees their core competency as advertising. I'm going to show you a stock that's underperformed the market. It so the world has changed so dramatically that I think, you know, Don Draper has been drawn and quartered. So what I think of is if you're the cmo, I think of you as almost you're the chief internal strategy officer or you're the chief internal consultant and you're there to say, okay, how do we get the most margin? How do we get unfair advantage? And that might be through really boring shit. It might be through. I think the best thing we could do is to figure out a way to leverage AI to have much more robust, forward leaning, accessible customer service. I think that's the best thing we can do for our quote unquote brand right now. But, and I don't know if this is still the case, but the majority of the CMOs I worked with came out of an advertising background and we're still looking for the next breakthrough campaign that would somehow lift sales. All of a sudden I think those people, I think their days are numbered. And whether it's, you know, we just see someone, I just met an impressive person from TikTok, TikTok, meta and Alphabet will grow their revenues this year by, I don't know, 20 to 30 billion. The market's not growing that fast, so that means it's getting taken out of other forms of branding, specifically ad supported media. If you're in your 40s or 50s and in the ad supported media ecosystem and doing well and you have senior level sponsorship, ride it out. But if you're in your 20s, what I tell people is be very careful. If you're in an ad supported medium, be very careful because, you know, the number of people actually, I mean, let me just piss off everybody. Advertising is the tax that the poor and the technologically illiterate pay. How do you know you're rich? You're not subjected to advertising? I've figured out a way. I never want to see an ad for an opioid induced constipation medication. I avoid them all. Everything I watch is subscription. I'm not interested in ads. If you're in a wealthy city in Paris, there's a regulator that goes to every park and says, you are not allowed to see an ad from a green space in Paris because it's a wealthy city. Go to a poor nation, there's branding everywhere. Being pelted at you. So I think that if you're in the ad supported ecosystem, you want to be thinking about, okay, those dollars are going to leak to one of a small number of direct players and to other means of building those associations with consumers. And Apple sort of kicked this off. They took six and a half billion dollars out of broadcast advertising and put it into 550 leases of temples to the brands called the Apple stores. I'd like to live in one of those places, right? Those are the coolest gathering places I think of the last 20 years. But that was a visionary move. We're going to take money out of broadcast and the best thing we could do for the brand is have a distribution channel that it would be really hard to replicate. Where do you buy an Android phone that is really cool? Seriously, where do you buy an Android phone that isn't depressing, right? Where it's a telco company with a guy with a name tag and bad lighting and bad carpeting and then you go into an Apple store and you think, these are the people I want to hang out with Anyways, long winded way of saying I think the CMO that survives is a chief strategy officer, chief supply chain officer. But the era of cheap broadcast advertising, that sword that built Nike, that built Estee Lauder, that built Unilever, that built P and G, by the way, every one of them clients of mine at my last firm. That sword is getting duller and duller. And show me a company that's become reliant on traditional branding to build shareholder value. I'm going to show you a company whose stock has underperformed the market the last 10 years.
- [45:50]
John Evans
Talking about Apple, I bought an iPhone 16 the other day and the guy in the store, like the store you described, said, look, basically it's the same as the 15, the 14, the 13 and the 12 and there hasn't been much progress as there in kind of the hardware. But I was at Adobe conference last week and what I saw in AI in the last six months is just mind blowing. So it seems like that's where the big step changes are going. So from an AI point of view, what should marketers be, where's the action going to be and what should we be thinking about?
- [46:20]
Scott Galloway
I'm an AI optimist so let me back up. So I think AI is a different type of technology every year. I do a bunch of predictions about the economy, stocks and my prediction around AI is that if you think about jet transportation technology, my parents immigrated from Glasgow and London respectively, in the late 50s, early 60s, they crawled across the ocean terribly seasick, nine days to get to the US and it was expensive. Now if you book ahead, you can get from London, New York in seven and a half hours for about 400 pounds. That technology has changed the world economically. You can, you can look at GDP and the number of jets in the air and they're somewhat correlated. The number of jets coming into a nation largely indicate how robust its economy is. That technology. On Saturday, I'm going to see seven colleges with my son. We're going on a college tour in five days because of jet transportation technology. It's an unbelievable unlock, right? As of now, the entire industry, if you take all of the profits and all of the losses in the entire airline and aircraft manufacturing industry, it's just a break even. It still hasn't made money. Remember Eastern and Laker Airlines? And I mean remember all these. So many of them have come and gone. And Boeing and Airbus have been massively subsidized, right? Air France is bailed out every few years. I mean these companies, it's just a shitty business. Now how did that happen? They were not able to establish competitive differentiation. Regulatory capture, distribution capture. And the huge beneficiaries have been stakeholders, not shareholders. And there are certain technologies that come along where the winners are us. And there aren't a small number of companies able to ring fence the technology and make trillions of dollars in market value. The PC industry, we were able to put $30 million worth of computing on your desk in 1970 and 1990 for less than $3,000. All of us have PCs now. Think about how. Think about the unlock of PCs economically. In 2006 I raised $70 million and I bought 10% of Gateway Computer. I don't know if any of you know Gateway. I realized that's like the weakest flex in the world. And then I went in and said we need to sell the company. I did my activist thing, went on the board, we ended up selling it for 900 million. We were the second biggest computer manufacturer in the world behind asus. We made three times more many PC, three times as many PCs as Apple. Second largest company in what is a tectonic technology shift. And we sold for $900 million. Tomorrow Meta or Alphabet will lose or make $900 million in five minutes in trading days because no one was able to capture that value. I now believe after the introduction of Deep Seek that no one small set of companies is going to be able to capture trillions of dollars with AI Because I think AI is going to reverse engineer AI and not let any one company get ahead of it. When you ask deepseek, what LLM are you? For two weeks, it said, I'm chatgpt. And I just love the fact that the first job that AI destroyed was AI. I think there's something deliciously ironic about that. And we have come to believe that every time there's a big shift in technology that some group of people, small group of companies is going to be able to make trillions of dollars. I think this might be one of those technologies where society wins. I think there's enormous opportunity for companies to leverage this overfunded technology that you will win if you understand. And that is. I started a company called section that does AI upskilling for the enterprise. So L'Oreal will come to us, L'Oreal or Unilever, and say we have 300 or 400 media planners. Just make them 10% better. How do they use AI to become 10% better? So trying to create a culture that says, all right, we have this new thing on our desk called PCs. You need to learn how to use them and create incentives. Because I don't think AI is going to take your job. I think someone who understands AI is going to take your job. And so what I try and do, because as I get older, I have a tougher time with new technologies. I hang out with my son and I have a second screen, and anything I'm doing, I try to ask AI Mid journey. Claude, obviously, chatgpt. And I'm trying to just get better at everything I do using AI. I initially thought my next book would be written by AI, and I learned really fast. It sounds like a computer wrote it. It's not good for writing, original writing. I don't find it's really great for finding good data. And I have to ask it twice because the first time it gets it wrong. So frustrating. I'm like, that doesn't sound right. It says, oh, I'm sorry, I'm wrong. I'm like, could you check your own work, for God's sakes? Anyways, But I think there's tremendous opportunity in marketing to get much more efficient, come up with new ideas, brainstorm for new things. It's all in the prompt. Think of it as a thought partner. Think of it as a coach. Give it massive amounts of information, upload stuff. I'm at that age where I'm obsessed with my health. So I get tests on every bodily fluid and substance on my body, and then I get a report from some German startup and I upload it to AI and it all comes back and says drink less. But it basically it can tell me just unbelievable things and I start thinking about businesses. Well, is there a way I could help people? Mothers whose child has diabetes? A mother whose kid has diabetes spends five months of her year managing that child's diabetes between referral specialists arguing with the insurance company. This is Obviously in the U.S. mike, what if you just were really niche with AI and said all right, for mother, a small business for mothers with kids with diabetes, 100, 200 bucks a month use this AI and this LLM is customized to help and we claim we'll give you one to two months of your year back by streamlining telling you how's the best way to make claims for this? What are the best prescription drugs? How do we talk to a AI enabled pharmacy to get you the prescriptions you need more easily? How do we set up automatic insurance claims using AI? And okay, if you invest a little bit with us and you give us 100 bucks a month, we'll give you a month. For 1200 bucks, we'll give you a month of your time back a year. I just think your greed glands start going like wow, think of all the things I could do here. So I would just think of AI as a tool and you're a samurai and if you don't learn how and guns have come along and if you don't learn how to use, you know, muskets, you're going to lose. Or a better analogy is when the tanks, Panzer tanks rolled into Poland, the Polish army fought them on horseback and it didn't, the battle didn't last long. So there are now other companies with Panzer tanks. And you better get good at driving tanks right, this new technology. But I think it's really exciting and I think all the catastrophizing is BS that it's going to destroy all these jobs. I might be wrong here. Every technology destroys jobs in the short term and then it creates more jobs. We thought automation was going to put 60% of auto workers out of business. And some jobs on the shop floor did go away, but we didn't envision heated seats or car stereos. And now the global auto industry employs more people than it did pre automation. So I think we'll see some short term job destruction. But I think a lot of you are going to get your green glands going around different things you can do using AI. I think there's going to be a ton of startups I think the net job creation will actually be positive. The downside to AI is not weapons. I don't think it's ever going sentient. I'm not a philosopher, but there's always a kill switch somewhere. I think we can manage it. We manage nuclear weapons, bioweapons. I'd like to think we could manage AI. The real threat of AI that I see is loneliness, and that is the number of men and now a smaller group of women doing searches for AI girlfriend and having relationships. It's the movie. Her is gone parabolic. And I worry that we're developing or evolving a new species of asocial, asexual male that ends up very lonely and very depressed and very dangerous, mostly to himself. But I think AI is expediting that new species of asocial man.
- [54:29]
John Evans
Right, that's. That's a nice thought, isn't it? Going back to where we started out, I asked LinkedIn for some questions for this conversation. We got 180 or so of them. The one that got voted the most, which I thought was fascinating, is what one thing have you been profoundly wrong about and why?
- [54:46]
Scott Galloway
What one thing?
- [54:47]
John Evans
What one thing? Yeah, if you had to pick one or the most profound thing.
- [54:51]
Scott Galloway
Well, the one I get. When Tesla was at 30 bucks, I said it was going to get cut in half and it went to 400.
- [54:56]
John Evans
You're right. Just a bit. A bit early.
- [54:58]
Scott Galloway
I thought Twitter would. I thought the creditors would take claim to Twitter because he would decide not to make his payments. I was wrong about that. I've been wrong a lot, a lot of stuff. What have I been most wrong about? We're going to need a bigger boat. I've been wrong about a lot of stuff. And I make a series of predictions every year. It's my most popular YouTube, usually each year. And I think the thing about predicting is it's a shitty business because if you get it right, the events leading up to the prediction make it seem less visionary or bold, make it seem obvious when it happens. But if you get it wrong, Twitter and people just remind you that you got it wrong. But the whole point of a prediction and why I think scenario planning is so interesting, it's not to be right, it's to foment a conversation that makes you kind of better at developing a series of actions across multiple scenarios. I love scenario planning. For organizations, the key isn't to guess the right scenario. The key is to predict a number of scenarios and then develop strategies that play best against the most of them. Right. That's I think that's the real. That's the real trick or the benefit of scenario planning. But oh my gosh, I've been wrong about so much. I thought that AI valuations are going to peak. Last year they didn't. They went up. I thought Disney and Warner Brothers stocks would recover. Last year they didn't. Yeah, I got, I get a good, I don't know, third or half of my predictions wrong. And some things I get terribly wrong. Yeah. So a lot.
- [56:32]
John Evans
Thank you very much for listening or watching Uncensored cmo. I hope you enjoyed that. If you did, please do hit the subscribe button wherever you get your podcast. If you're watching, hit subscribe there as well. I'd also love to get a review. Reviews make a big difference on other people discovering the show. So please do leave a review wherever you get your podcasts. If you want to contact me, you can do I'm over on X censoredCMO or on LinkedIn where I'm under my own name, John Evans. Thanks for listening and watching. I'll see you next time.