The Prof G Pod with Scott Galloway - Office Hours: Airbnb-Friendly Apartments Program, How Do We Get Men to Show Up for Family Planning? And On Being A Critical Thinker

Episode Date: March 22, 2023

Scott discusses the Airbnb-Friendly Apartments Program and Airbnb’s potential in the long-term apartment rental space. He then shares his thoughts on why men struggle to engage when it comes to family planning. He wraps up with advice on how to be an original, critical thinker.  Music: https://www.davidcuttermusic.com / @dcuttermusic Learn more about your ad choices. Visit podcastchoices.com/adchoices

I just don't get it. Just wish someone could do the research on it. Can we figure this out? Hey y'all, I'm John Blenhill, and I'm hosting a new podcast at Vox called Explain It To Me. Here's how it works. You call our hotline with questions you can't quite answer on your own. We'll investigate and call you back to tell you what we found.

We'll bring you the answers you need every Wednesday starting September 18th. So follow Explain It to Me, presented by Klaviyo. Welcome to the PropG Pod's Office Hours. This is the part of the show where we answer your questions about business, big tech, entrepreneurship, and whatever else is on your mind. If you'd like to submit a question, please email a voice recording to officehours at propgmedia.com. Again, that's officehours at propgmedia.com. I have not seen or listened to these questions. First question.

Hi, PropG. Connor here from Toronto, Ontario. A longtime listener. I have not seen or listened to these questions. First question. It's a pilot program with Graystar, one of the largest apartment owners in the world. And it's a program to allow renters to Airbnb out their place for a few weekends a year to earn some additional income. It allows landlords like the Graystars of the world to the most recognizable hospitality brand in the world, and their beautiful website and listening experience and their eyeballs and their reach to rent out their apartments. giant that is. And the moment that it decides or finds a way to crack the code to get into the long-term apartment rental space, that they could be well positioned to do so. And so I'm curious, what are your thoughts on this? Have you read into the Airbnb-friendly apartments program? And what do you think about Airbnb starting to dip their toe into the long-term apartment rental space? Once again, I love the show. Thank you so much for your time and everything you do with it. Thanks so much. Thanks for the question, Connor from Toronto. I was conceived in Toronto. Every year, my dad and I go to the opening game of the Leafs at the Air Canada Centre. Every year,

I ask him if he wants something off his bucket list. That's the only thing he wants every year. Anyways, love Toronto. Don't know where I was going with that. So just some context here. As you referenced, in November 2022, Airbnb announced the launch of its Airbnb- as not good for the vibe, not good for the value of their apartments. Although you would think if you could monetize apartments, it would increase the value. As I think about it, I think the primary opponents of Airbnb have probably been state and local municipalities who wanted that hotel revenue or hotels themselves. Very powerful lobby who pay a lot of taxes who didn't want a competitor. My understanding is Airbnb actually pays hotel taxes or hotel-like taxes now in many municipalities. Currently, there are 175 apartment buildings being showcased in more than 25 major markets, including Los Angeles, San Francisco, and Seattle. Apartment buildings are able to charge the primary tenant up to a 20% fee for each Airbnb use.

Buildings are also able to implement restrictions on how many nights per month a tenant can host. And the building management has the ability to review listings and deactivate them if they do not follow the building standards. According to Airbnb's findings from buildings in test mode, tenants hosted about nine nights per month, averaging about $900 per month. So why is this happening? Obviously, there's an increase in demand for remote work. Tenants are looking for ways to supplement their income due to rising cost of living. And this is a way of saying for the landlord to say, if we can't fight them, join them and say, look, we'll let you do this. We just want our beak wet, if you will, or wetted or lubricated. Give me some Benjamins.

Daddy needs a little love if love is paying the owner of the apartment money such that you can do something which you probably should be able to do anyways. I don't think, to your core question, Airbnb goes vertical in apartments. The Airbnb model is so attractive and gets such a greater multiple than REITs because it doesn't own the capital. Its margins and its operating income and its leverage are just so dramatic because it has employed what effectively every hotel company has employed. Hotels no longer own hotels. What do I mean by that? Westin, the Four Seasons, I think the Four Seasons only owns one or two of its own hotels. What they do is they have somebody else, specifically the richest guy in that city, comes in and buys the hotel because he wants to say he owns the Four Seasons in Hawaii. I think Michael Dell owns all the Four

Seasons in Hawaii. They run it in exchange for running it, managing it, staffing it. They get between 8% and 12% of top line. So in good years, they make a lot of money. In bad years, they just make a decent amount of money. But it's an amazing business, and they don't have to take the capital risk of spending a couple hundred million dollars, if not more, on a property in Mauna Loa. Mauna Loa, I don't even know if that's a place, but it sounds nice. It's a great business, the management business. And effectively, Airbnb is a management company. It doesn't have to go out and spend tens, hundreds of millions, billions of dollars on the actual asset itself. And so its leverage on capital and its margins are gigantic. And if they started going vertical into actual apartment properties, I think that changes the complexion of their unit economics and maybe even worse, re-rates the multiple the market assigns to their stock. If they were going to go vertical, if they were going to own properties, I think they would probably go into hotels because it strikes me that Airbnb is mostly individuals who want a short or medium-term solution. It's not

someone moving for two or three years looking to Airbnb. That brand means nomadic exploration, the joy of exploration. It's an aspirational, kind of aptly feeling, design-centric brand. I can see them buying one big, cool, not upscale, but aspirational hotel such that people had a plan B if they wanted to stay somewhere and get the amenities of a hotel and maybe be part of something a little bit more social. But I would imagine Brian Chesky, who's a very smart guy, says, why mess with an amazing business model? And that is utilizing other people's fallow assets. So I don't see them going vertical. And if they do, I think it'll be in hotels.

But it's an interesting question. Thanks for the call. Go Leafs. Question number two. Hey, Prof G, thanks for taking the question. I've loved the show for a long time. I particularly love the way that you talk about modern masculinity being in crisis. And my question stems around how you think that crisis of masculinity applies to the way we

approach fertility and particularly fertility challenges today. The context here is I run product for a fertility tech company called Daveris, and we do behavioral interventions to help couples and individuals improve their fertility potential and the reproductive outcomes. And you can guess in the couples program probably that there's a lead partner and a secondary partner. And without fail, the lead partner who's driving the purchase and then the experience itself is always the woman in a heterosexual relationship. And my hypothesis is that guys just are really, really find it hard to engage with infertility and even with like baby fever or like wanting to get pregnant. And I'm curious your hot takes on how the crisis of masculinity might apply to

some of these stats that we're seeing in product. And I think more broadly, like, how can we get guys to show up differently when they're half the equation to make a baby with someone that, in theory, they love and want to start a family with? Thanks for the question that has all sorts of landmines for me to say something stupid and get canceled. But it's an interesting question. And also, your company sounds really cool. And not only is probably going to kill it from an economic standpoint, but it's also, I imagine that's pretty rewarding. By the way, back to me, I was a sperm donor, junior year in college, paid for my entire year of college as a sperm donor. True story, went with two friends who were both water polo players.

These guys were blonde gods. I was blonde, I'll give myself that. And they were much smarter than me. And they do this total of like 360 tests on you, including pictures of you with nothing but your underwear on, an IQ test. And then the part of the story that I really love because it's profane and funny,

and it's also true is they give you a VD test. Now, if you have never had a VD test, as a man, let me just put it this way, it is highly invasive. And because I had not, to that point, had a VD test, it was also very unexpected. And so, they took this, basically this Q-tip on the end of a steel wire and took it somewhere where nothing had gone before, and I fainted. And the next thing I remember is waking up with a semicircle of very concerned nurses and executives at the Santa Monica Fertility Clinic asking me if I was okay. And the first thing I said in my sort of hazy state was, you're never going to want my sperm now, are you? Anyways, that was my experience. And despite my concerns about the feinty Scott Galloway, I got called three or four times a week to come in and make my deposit, so to speak.

And I got paid $35 a shot for something I was doing regularly anyways. And that $140 a week in 1984 basically paid for my junior year in college. And I kept doing it. Ultimately, my mom made me stop because she said, your daughter's going to marry her brother by accident. Anyways, there's my sperm donor story. There's my fertility story. I think, I don't know if this is a recent thing. I don't know if kind of men showing up or not being as excited about having a baby is a masculinity thing. I think it's very anthropological. And that is women feel the need to breed. They feel the need to have children. Men feel the need to have sex. And I think men are very excited about having sex and less excited about having children.

And so, and the downside of sex or the cost of sex is a much lower risk for men because they're around for seven seconds. That's optimistic, by the way, whereas a woman has no choice or very little choice, but to be around for at least kind of 18 or 21 years. So, I think women feel a greater obligation, are better planners, are probably more mature earlier in life. And also, I think women have, the window is just different for women than it is for men. So, men don't feel the same sense of urgency, I don't believe. I think they wake up and say, I would really like to practice making a baby today. A study published in the International Journal of Environmental

Research and Public Health in 2019 found that women and men have different approaches to the diagnosis and treatment of infertility. The study revealed that having your own child is more important for women than for men. 49% of men were ready to accept the lack of offspring, whereas only 24% of women were ready to accept it. Let me just finish here, and that is, I would say 50% of the people I know,

of the couples I know, have had trouble getting pregnant. And that is you spend your whole life or most of your adult life trying not to get pregnant. And you take for granted that when you want to get pregnant, you will. And what you find out is that's not always the case. I know a lot of people that have struggled to have kids. What also has happened is that almost all of them, as a matter of fact, everyone I can think of eventually figured it out. Thanks for the question. We have one quick break before our final question.

Stay with us. The Capital Ideas Podcast now features a series hosted by Capital Group CEO, Mike Gitlin. Through the words and experiences of investment professionals, you'll discover what differentiates their investment approach, you'll discover what differentiates their investment approach, what learnings have shifted their career trajectories, and how do they find their next great idea? Invest 30 minutes in an episode today. Subscribe wherever you get your podcasts.

Published by Capital Client Group, Inc. Welcome back. Question number three. Hi, Inc. Welcome back. Question number three. Hi, Scott. My name is Michael, and I'm a 25-year-old supply chain engineer located in Minneapolis, Minnesota. I consider myself relatively well-informed on things like business and politics, largely thanks to a combination of your podcast and reading the daily news and nonfiction books.

The problem is I find that I have a passive relationship with this information. I often find myself regurgitating canned takes or opinions instead of creating unique analyses on my own. My question is, how might you recommend someone practice distilling information absorbed through the media into independent, thoughtful analyses? I want to hone my ability to be a critical thinker on complex matters so that one day I may be able to be less of a thought consumer and more of a thought creator. Thanks to you and your team for the outstanding work you do. Cheers. Well, first off, implicit in that is a really nice compliment. Thank you, Michael. It's a super interesting question. And I don't know, you know, this kind of comes down to how can you be more creative or a more original storyteller?

And so let me just come clean. There's very few things I do that are original. Almost all of my sayings are parroted from someone else. I try and give attribution where it is warranted or where I can remember who said it, I will immediately, the jokes I read at the beginning of this show are usually from the internet. Sometimes they're mine. Most of the time they're from the internet.

I don't think there's anything wrong with that. The greatest physicists in the world, 99% of what they're doing is not original work. It's stringing together other people's work or looking at it through a lens differently. So I don't know if there's an exercise such that you can become a more critical thinker. What I can tell you is that you can be hugely successful by being inspired by and learning from and adopting other people's storytelling and insights. There's very little that's original out there.

I was a consultant for most of my career, and I like to think of myself as a creative person, but the basis of consulting is you don't need to be creative. You just need to benchmark every other creative thing that's done out there, see what's working, and see what might fit the company you're consulting to. Occasionally, I'll have what I'll call an original thought, and I try and run with it. So, I'll give you an example. I do think there's something around, and I'm in Riyadh today and gave a speech today, and I thought, okay, there are emissions. And I thought, well, all right, we know there are emissions, but emissions are a function of turning one substance into another for economic gain. And I think there's some insight there, and probably someone else has said that. I probably heard it somewhere else.

What I thought was the insight was I said, okay, the emissions of turning attention into advertising into money has created these tremendously noxious fumes of rage, teen depression, polarization, weaponization of elections. I think that is an original thought. And so, when I have an original thought, I really try and go with it and expand it and come up with analogies and examples and then find data. And it's the data that brings it to life. I don't know how original a thought that is, but it's one, finding other people's, 98% of my slides on stage, and I basically communicate for a living and like to think that there's some insight and creativity there, are people's ideas and you reference them told in an interesting

way. And then when you do find something that you think is original, really try and expand on it and go to town with it. But my brother, don't believe you can't be one of the most creative people in history and also just be somebody who is inspired by other people's work. Every major retailer, special retailer in America, I mean, effectively Pottery Barn and Restoration Hardware, you know what they do? Some of the most, I mean, you go out into those stores and want to buy everything. They find other artisans, the true creative people,

and they rip off their work. And they say that they're inspired by, right? That's the actual legal term. So, yeah, when you find something original, you have an original twist of phrase or a unique way of looking at something, bounce it off people, see what they think, massage it, hold onto it, develop it. But the fact that you're even thinking this way and you're cognizant of other people's interesting ideas and writing them down, at least mentally, means you got 99% of the hard work done. Thanks for the question.

That's all for this episode. Again, if you'd like to submit a question, please email a voice recording to officehoursatprofgmedia.com. Again, that's officehoursatprofgmedia.com. This episode was produced by Caroline Shager Thank you. We'll catch you on Saturday for No Mercy, No Malice, as read by George Hahn, and on Monday with our weekly market show. What software do you use at work? The answer to that question is probably more complicated than you want it to be. The average U.S. company deploys more than 100 apps, and ideas about the work we do can be radically changed by the tools we use to do it.

So what is enterprise software anyway? What is productivity software? How will AI affect both? And how are these tools changing the way we use our computers to make stuff, communicate, and plan for the future? In this three-part special series, Decoder is surveying the IT landscape presented by AWS. Check it out wherever you get your podcasts.