Analyzing Scott Galloway's BI Interview Regarding the Business Effects of Covid-19
Hello. Everybody.welcome, hi. This, is a Wednesday. Hey sorry. I'm starting a few minutes late we've, had some technical glitches with, LinkedIn life things. That sometimes happen, but it looks like we're good to go I hope. Everything, is going, through a little loud and clear and yes. Welcome once, more to a soliloquy, from a very secluded, soapbox. And. Wednesdays. Are usually, either about blockchain or about business, and today. We're going to talk business and. What. I want to do today is just, a, day, of cycle I read a really, good. Interview piece it, was with a guy called Scott Galloway. He is a professor, at, New York University, and I. Just. Want to go through and comment, on the on. The the analyze. Sort, of the points that he was making and, why. I thought it was so insightful so. Once. This live, stream is over I will include the link to the Business, Insider, interview, that they, did of Scott Galloway sand you can go and check out the original as well but. Now I'm just gonna walk it in and I think it's a good analysis, because you know these soliloquies. Have always been about how. Do we as entrepreneurs come, out of this crisis, on top and part. Of that is, thoughtful. Analysis. Of where we are what's, going on and what are the consequences of. Everything. We're living, through so. First of all who is Feliway, well he is a marketing, professor at New York University, he. Is specialized. As he's an expert on the three big for tech companies so, Apple, Google Amazon and. Gosh. Last, one dropped my head right there I'm not sure yeah, Facebook yeah. So he's. As he, specializes, in that but he is also an entrepreneur he, is this not in preaching. From some ivory tower with no real, world experience so Scott. Galloway he's been in the trenches he's run his own businesses, he's some of them have prospered, some of them. Failed. Like, all great entrepreneurs, and. That's. Just part of the of, the journey as we speak and, he. Did this interview on business since why there and he started with with core concept, and he, said you know corporate. CEOs. All. Would have been about capitalism, on the way up and socialism. On the way down okay and. He's. Calling them out on being. Hypocrites is what he's calling them out because you know he says that when, times are booming and business is going great they're all about rugged, individualism. They're all about, self-sufficiency. They're all about you know a lot of these quote. Libertarian. Ideals, you know that, based. On a supposed, meritocracy. You. Know they're and, while, they've been doing this they've been, massively. Buying back their stocks. Instead. Of provisioning, for bad times and you. Know stock buybacks have, value. They are good for shareholders. And. You. Know his sort, of inside joke there isn't also very good for CEO compensation because. The stock price keeps going up and that's good for their year-end.
Bonuses, So. But. You. Know the core message here is you can't have your. Cake and eat it too, okay. So. You. Know here's the deal if you're. All about businesses. Being you, know capitalism. You know, do. Your best you. Know make, the most out of every ounce of resources, you have climb the ladder to you, know succeed, and, reap the rewards. Then, when, times get really, bad. Then. You've. Got to be willing to take the pill right you can't then start, shouting, and saying oh. They. Own me out you know you. Know I want stimulus, money I want bailouts, I mean I'm too big to fail I'm you, know say, you know you. Know save my business and I'll maybe, save. Some of my workers, some. Of them. While. Massively. You. Know taking an axe to their to, their to their workforces. The reasons Galloway, talks about this is because you know he's, saying this look this isn't if, you're gonna if, you're gonna be a big boy on the way up and and you know take them in the billions and billions in profit then, if, your business if you haven't provisioned, for bad times and your business goes under well goodbye a tough luck that's that's, no big deal you know that's just part of the game and. That all, of the stimulus, monies should be focused on actually. Helping the people that, are suffering, the consequences of, that and not bailing out businesses, that were, less. Than. Frugal. Let's say. So. You, know I think that is a very. Interesting point of view I really like the metaphor capitalists. On the way up and socialists, on the way down because, it we're seeing that a lot in and you know the. The flip side of that is maybe the, problem. Isn't so. Much now that we you. Know I think that we should be helping you, know preserving. Helping to keep you know the solid businesses afloat was a good idea the administration. That is. Leaving. A lot to be. You. Know to be, desired, but. The. Truth is if we're going to take that route then we ought to take the other route on the way up which is you know why is it that we don't have decent. Health care why is it that we they're you know allowing people to work in jobs, that won't, keep them above the poverty line, you. Know maybe if, we're gonna be socialists, on the way down we ought to be a little, bit more carrying, on the layout, anyway. That being said he. Goes on and the interview, is much longer than that but, that was a starting point and then he says you know. One. Thing that we can't we shouldn't do is think that just because we, applaud. At 8 p.m. every afternoon the frontline workers, the health care workers the nurses the doctors the. Supermarket. Workers that we have you. Know we've we've done our bit that's it we've given them a pat, on the back we clapped for them every evening and you. Know that's. It you know well they're not heroes if with them $9, an hour ok. We. Should be really, thinking about you, know that some of these, jobs. That we thought were not, so critical, they are and now they're suddenly essential. Well, maybe they deserve to be compensated as, such and maybe. You, know that. Would be better. For society, in general. Than. What, we've done is building, a model, that is you, know it's, so top heavy and, so. Bottom, flimsy. That, you, know many. Of our essential, services are struggling just, to, keep providing. So. You. Know they aren't heroes if we just pay em 80 bucks an hour 9 bucks an hour ok, but, now he gets in then he goes on and he starts doing an analysis, with me with the interviewer, about. You. Know the, fundamentals. Of what this crisis. Is showing us about our economy and about the way that, our businesses, are working and, and he. Makes an argument that this, koban, 19 crisis, isn't, really, just a change event but. It's more of an accelerant, what it is diamond has pushed forward. Trends. That, were already. You. Know well on their way okay. And you know and he doesn't talk about this as much but you know one of those could definitely be, the trend towards automation and the trend towards, you. Know the, loss of a lot of you. Know frontline. Working. Jobs to, automation, and we're, going to see that I'll put that in there as well as a shout-out. To our, buddy, Andrew yang. That. That. Is, definitely. A trend that has been accelerated. Okay, and in some industries, it's been accelerated, right.
Off The cliff okay. But. Scott. Galloway in the interview talks he starts off talking about health care and he. Says any, posits, that big, tech companies are going to be entering the healthcare market very soon and, in a big way and. It does any any expenses, from an economic, standpoint that. Basically. You, know Amazon Apple, Facebook. You know they, aren't going to over. The next ten years you. Know double, or triple their there, the revenue, or you know they're there just. By selling. A few more Alibaba. Articles, at a better price okay, that's not going to give the kind. Of. Structural. You. Know, growth. That. These, companies need to justify. Still, being you know leaders in the tech industry and, you. Know, maintaining. It even, more weight, in the market and so, the, big four are going to look for opportunities, and they are and he. Starts, off saying that. Health. Care which is one of the infamously. Poorly. Managed, industries. Which. By, the way. One. Could argue is why is it even an industry, and not a service, just but, that's that's for another day. Is. Right, for destruction, and there's. So much room, for improvement. That. Tech. Companies, like Amazon. Like Apple like Facebook, or Google are. Definitely. Eyeing, that as a massive. Revenue stream. For, the future for the and starting, very soon be. It with new, models be it with telemedicine, be, it with, you. Know more efficient. You. Know medical. Delivery services, you know fulfillment. Services, you, know maybe it's a new, take on you, know just a fundamental way that health care is provided in, the US. Scott. Talks about moving it away from. Centralized. In physical. Locations, densely. Physical locations, like hospitals, and spreading it out healthcare, out so that this is more easily delivered, in a, distributed, way okay. So, that. Was the first industry who talked to them the, second industry, he really, crashes, into his education, and he. Says that you know as an accelerant, we're seeing now. Massively. Illustrated. How. You. Know some of the most prestigious, higher. Institutions. Of higher learning are. Being exposed, that you, know a handful, of Zumba classes isn't, worth sixty eight thousand, dollars a year. Okay and. You. Know when you look at you. Know universities, around the world the, u.s. is. Like. Health care very peculiar, okay. And while. It's true and he goes into that that, some of the most important. Names in. Education. You, know the biggest brands the. Yale's that the the Harvard, the Stanford. You know these these are immensely, powerful brands. And that, they're going to winter weather this storm okay, he, talks and let's talk a little bit about how he says they're gonna transition, to a different model but. He. Says that the, way, that it you know they they've been over the last 3040. Years they've just been turning themselves into luxury, brands, you. Know that require. Instead. Of trying to. Leverage. Their their. Teaching. Capacity and, their capacity to empower. Human. Beings for better future, on a broad. Scale they. Focused, it down to a minut, little scale of the you. Know basically the wealthiest of the wealthiest and and they, position. Themselves as, the, Louise recons or the channel, so that you know the. The. You know the dumpee own, champagne. Of. Education and, they've. Completely. You know ignored, the rest of the market and. What's. Happening now is that we are seeing that oh well, you know if you take away the. Or. Reduce. The the. Mystique. Of being on campus, and being in a you know in a. Very elite. Setting. You know with the the. Stone, building to me and you. Know all of the experience. Of you. Know these institutions. And you, sort of take that into varnish, off and you, look at just the cold. Truth, of what, the students, are receiving which is education. And now, that's being packaged, in zone classes, it, doesn't, stand that the value proposition, doesn't stand up it's not worth it and. You. Know what, that does as he said some 10 years MIT. Instead. Of bringing, in three I was in freshman year like they do now which, is very I need them very small they're gonna be bringing in 30,000, and they're gonna be doing that on a massively. Decentralized. Scale, so. That you, won't necessarily need. To go to MIT to do it I mean the. Same with Harvard these big brands are gonna leverage their. Ability, to, open. The doors to much, broader audiences, without. Sacrificing. The quality of, the education, and. What. That's going to do is, it's going to kill off an, enormous. Level of the second tier, educational. Institutions, the ones that are just it's almost almost, just as expensive, but don't have that power of branding and.
He. What, he says in the interview that many, schools, are just not going to open again and the, fall not gonna fall ever many of the you know universities, right now are just not going to come back the, good of the guard no, it's not the center of state you, know state, universities, and and I'm, not saying that I don't think he was saying, that 80 percent of you know universities, are gonna disappear a big. Swath of the middle tier that second, tier is gonna suffer mightily. Because. They don't have the brand strength to weather this storm like that but. They also you. Know they're under the same. Microscope. Is, it worth it to pay that kind of money for, you. Know to sit. At home and listen to a professor. Lecture, you over ISM. Maybe. You know maybe that's a big question, that's so he really, jumps. Into education. Into the into, the interview then, he talks about retail, and. Another. Case this is accelerating. A trend, retail. Was already, suffering okay, there, was no doubt I mean you know Macy's was cutting stores, you know some. Retail is it was, is is is is doing okay very specialty, sort of things like the peaking, max and you know Ross and you know some of those brands. Are doing all right. But. This. Kovat crisis, whether it's Dennis it just push. That forward and we're gonna see and. He just comes right out and this was before j.crew announced the bankruptcy, yeah. Actually, May. Before. Him that that was something. That was going to happen and obviously there had been rumors. There. Are going to be a lot of big brands that are trying to make it I mean when we talk about birds going bankrupt. And. Listen necessarily, mean that the brands are gonna go away forever but they but they're gonna hurt and they're gonna go through and. Definitely, it's gonna wipe out a lot of shareholder, value so. You. Know, and. They didn't makes a really.
Interesting Comment he says you know this is almost the perfect scenario, for, Amazon. Or Walmart, if. They hadn't sat down and written. A letter to Santa Claus, and said. Santa. Claus could you give me could. You close all my competitors. Physical. Stores could. You, you. Know could you make. Supply chains you, know the. Less, efficient, supply chains crash you. Know if you just start writing down the things that are happening this has been an immensely. Positive. Thing for for. Amazon for Walmart. Because. This. Acceleration, has just put, the wind in their back from, that okay, and it's, kind of like the big brands, of education. They are going to weather this they're gonna come out on top and this. Is sort, of why I was, telling you I've, been talking so much about over. These live straightens is that you want to be positioned to be coming, out on top, and you don't have to be an Amazon or a Walmart to do that but you do need to be added, ly looking, avidly. Questioning. Your strategy, avidly. Measuring. The wind from where it's coming and how it's going to affect your business and your industry in your market okay. So. Yeah. He. Talks also about small business and he says you know right now it's a terrible time to have a small business and if you're, you. Know we I did, a whole. Event couple of these about, business resilience you know I have a business, resilience, checklist. If you want it feel. Free to leave a comment below and I would get you the link to it, it. Is a tough time it is a terrible, time to be a small business owner right now I mean it's uncertainty, it's it's. It's early okay, we all are, I mean I'm not gonna just. Sit here and tell you things are peachy. Peachy gooey for me but there you know we're, fortunately, in a in a decent situation, but we, have clients, in in our business that hasn't really. Slowed. Down extra stock no. But. What. He does go on further to say is that in six to twelve months it is probably going to be an amazing time to start a new. Business, because. Of if, the the fact that starting. Businesses, in. The. Recession, is actually, a, really. Good. Factor, for success why. Because. Talent. Costs are more are lower, you. Can get good people for less money real, estate costs are lower, raw. Material, costs are lower and, it. Also just. Starts. The company, with a mentality, of being scrappy. With Google you, know. Down. In the trenches, and that. Culture. Which. Is required, in, a you, know in a, market like you, know in a down market and if you're starting in that down market you already add that mentality, then. That. That, is a very healthy way to start a business and get it to grow okay, so, I thought, that was really interesting that he says you know okay we're stuff right now but if you can make it for another, six twelve months. You. Know things are gonna be great for, smaller businesses. And. Then, the last part of the interview is about you know what strategy, should people, be considering. Right now and how do you how. As individuals, do we think about you, know our own our.
Own Needs. And positioning. Ourselves in, the market you. Know he starts off by saying take a strategic point of view which is something we've been doing on these live streams from the very beginning and I've been talking to you about take. A strategic point, of view really think through the, consequences and. The realities, and don't, let yourself fall, into the trap of thinking that things are going back to where they were because, they're not and, everything. That was before will, not be in the future it will be to be different, okay. He. Goes on to say here in the middle, doing an MBA or, doing a degree program, or you know you're, in. The middle of Law School by, all means finish okay. You. Know your that. Certification, will, will, be a value, and you've already invested that, there's, no reason to not finish it so that. Is one by piece of advice he gives but, he says if you're considering, starting, he would say hold, ah don't do it cuz so maybe now isn't a great time to start doing that you, know an MBA or to make a big career switch now it's going to require a big, investment, you, know it's not a good time he, says high school seniors take a gap year it's. A great you know it's, been proven that that is sometimes very, healthy for, for. Young. People to do anyway. And right. Now you. Know you. Might be immensely. Surprised, at how the landscape, is different a year from now so. You. Know he, actually comes out super he's he never see professor Manson, and not in his best interest to tell people not to go to university right, but, he said hey this is a this, is a time, to actually be. And parents. Should be, encouraging. Kids to consider. Taking a gap year. But. Not just just, to waste, the time and sit on your fingers ago you know drink beers at the you, know at the lake which you, know it's. Okay to do every once a while as well but. But. Instead use this this time to. Do some online learning to do some reflecting to do some preparation that. Doesn't, necessarily require. You. Know outline, a lot, of money a lot of resources, but can provide immense, value, on, the back end okay, so. You, know think about where, the puck is going not. Where it is right now but, where it's going and really. Skate. To where it's gonna be but I think that's a hockey metaphor, I have no idea about hockey I, am, a. Complete. Finger. In love regarding, hockey but I get the metaphor you, don't speak to where the puck puck, is you skate to where it's going to be when. You get there so I. Thought. That was really great advice, anyway. I thought the interview, was a really, good. He's content, I will, once. This is I'll. Go in and put the link into the comments so you can you can check out the original as well there's a video of it as well on the business, insider piece anyway. I hope you've enjoyed this if. You've got any questions for me leave them in the comments, below if you think I said anything was absolutely, crazy well. You can you can shout at me below or you could also go talk to Scott Galloway it's, up to you anyway, thank you very much for listening in I appreciate, it very much, take care stay safe and talk to tomorrow.