The Prof G Pod with Scott Galloway - Office Hours: Doing Business With Russia, Competing with Industry Giants, and Choosing the Right Hire

Episode Date: October 18, 2021

Scott answers a question about Google and Apple’s decision to take down a Russian voting app. He then explains why finding a niche to serve is crucial to competing against industry Goliaths as a small company. Scott also offers advice to an expanding business on whether to hire an employee for a marketing or business development role.  Music: https://www.davidcuttermusic.com / @dcuttermusic Learn more about your ad choices. Visit podcastchoices.com/adchoices

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NMLS 1617539. Welcome back 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, visit officehours.propgmedia.com. Again, that's officehours.propgmedia.com. Again, that's officehours.propgmedia.com. First question. Hey, Scott, it's Mark from Albany, Georgia. I was wondering what your opinion was of Apple and Google recently removing an opposition voting app on Friday, September 17th. It could have helped disseminate information to Russian voters.

Their media, which is state TV, does not provide an even-handed view of any opposition candidates or ideologies. And of course, their internet would censor the same. These apps were supposed to help voters focus on which opposition candidates might have a chance, but I guess no more. Seems like between supporting information delivery for voters versus supporting a corrupt regime. These companies chose the latter. What about the do no evil of Google and Apple's protection of privacy? Is this the new paradigm where shareholder profits are paramount? Anyway, thanks in advance and love the show. By the way, I think I met you back in the day at our fraternity at UCLA. Thanks again.

Wow. I wonder what your last name is, Mark. I wonder. That's interesting. at our fraternity at UCLA. Thanks again. Wow. I wonder what your last name is, Mark. I wonder. That's interesting. We're fraternity brothers, but you didn't give me your last name. Mark from Albany, Georgia. Trying to think. I'm trying to go back. I don't remember much of that as I was drunk or high most of the time. Not all of the time. It's not easy to get a 2.27 GPA at UCLA because that means you get less than a 2.0 several times and you go on academic probation. And then if you get another sub 2.0 GPA, you go subject to dismissal. So I would just figure out a way to get a couple Bs that would give me another two or three semesters before I get kicked out again. And it's all your fault, Mark. You, you were the negative influence on me. Not that I know who you are, but you led me down that path. Good times. Love it. Give money back to UCLA

such that kids with their shit together, and a lot of them there, can have some of the opportunities afforded to me. Anyway, that's not why I went there. So look, Mark, I think it's easy to be a purist on this stuff. And what happened here, there's just no getting around it. It's upsetting. Apple and Google removed the Navalny app named after prominent Russian opposition leader Alexei Navalny on the same day that Russian opposition leader Alexei Navalny, on the same day that polls opened for parliamentary elections. According to CNN, the Navalny app offered recommendations for casting strategic votes to unseat incumbents from Putin's party, United Russia.

Russian authorities, who claim the app is illegal, prompted the app's removal when they threatened to prosecute Apple and Google employees based in the country. So there's no getting around it. This is a corrupt country. And we have two choices. We either operate in corrupt countries, and there are a lot of them, or we leave because they will kick us out if we do not comply with their laws and they get to make the laws. So the question is, would we be better off or do we think the world would be better off and our place in the world by not operating in Russia? That's what it comes right down to. And in certain instances,

we decided to not do that. Google picked up and took their ball and went home after it was clear that China wanted them to share information and was stealing their IP. I don't know. I think I probably, I kind of land on the side of big tech in that it is very hard to find moral clarity around doing business in nations that are corrupt. And I probably ultimately side with Apple and Google and say that Russia is, I would even go as far as say Russia's our enemy. They're like this power whose influence is waning. Their economy is, I think, one-twelfth the size of ours. It's basically a kind of a gas station with nuclear weapons. And as a result, they act out. I think they're very smart and very strategic and are using social media platforms, see above Facebook, to tear us apart by constantly

inciting more coarse discourse on these platforms with millions of bots. Supposedly two-thirds of the metrics being reported in terms of ad viewership are bots. And I think a lot of those come out of China and Russia who said, I know we can't compete with the U.S. on economics, on innovation, or on military, so let's atomize the competition. Let's tear them apart internally. Let's have them start eating their young.

Let's have them start hating each other. And I think they've been very effective at it. For the cost of an aircraft carrier, not even the cost of an aircraft carrier, the cost of a small frigate, they can hire tens of thousands of people in troll farms to find people with any influence and antagonize them or to incent fights on Twitter or to spread misinformation. I think that's exactly what they're doing. So it's a corrupt nation. But I would like to see us take more and more money out of that nation,

whether it's Samsung or their own technology. I think we're sort of playing into their hands if we exit those nations. I would rather see us continue to have the economic engine that we are. Does that say we should do business with every country? No, but be clear that void of technology will be filled by other players, probably Chinese players, should we decide to exit. So difficult to find moral clarity.

I probably come down, I think it's easy to be a purist, but I think what's probably best for America is to hold our noses and recognize that if we wanna operate in these countries, we gotta comply with their laws, even if their laws are corrupt. So I'm like, cash their rubles and then reinvest in a great democracy,

reinvest in regulation that cleans up the shit off of Facebook where Russia is fucking with us every day. Tough one, tough one. Trying to think of who you are. Will we pledge brothers? Anyways, definitely one of the many reasons I can no longer run for governor of Florida is because of my years in the fraternity. That shit's definitely going to come back to haunt me. Worth it. Worth it. Question number two. Hi, Professor Scott.

My name is Nikhil, and I am based in Melbourne, Australia. I will be joining a tech firm called Supermicro very soon over here as a sales manager. And I am up against giant firms like HPE, Dell, and Lenovo, who have captured a large chunk of the server market. Knowing our team is very small when compared to theirs, what sort of a sales strategy do you think is effective in going against Goliaths knowing I am David? Thank you very much. Nikhil, you sound so refined. You sound like someone who's sort of the ultimate, I don't know, concierge or chief of staff or some billionaire nemesis. Anyways, so the global server market is now worth more than $23 billion. HPE and Dell are tied for leadership in the industry. Together, they account for about a third of the total market revenue. So it's not a concentrated industry.

The two biggest players account for 31%, whereas the two biggest players in digital marketing are 80%, Google and Facebook. Or the two largest e-commerce companies, just one, is 50% of all online revenue, i.e. Amazon. Or there are two companies, Apple and Google, iOS and Android, respectively, that are probably 90% of the global operating systems for handhelds. Anyways, what is the strategy? It's pretty simple. The specific crowds out the general.

When you're smaller, you got to go very, very focused, very niche, you know, servers for the biotech industry or servers for a certain type of company or servers that are more green, whatever it might be, the specific crowds out the general. And you need to basically go to places where you can be so laser focused that for that specific niche or need, you're going to be the superior offering. Because the big guys, quite frankly, don't look at small markets. They look at niches as sort of like, is that worth our time? In order to move the needle, if we're 15% of a $23 billion market, we're a $5 billion market, we don't go after $10 million niches. So, you got to go very

niche and very specific. I don't see any other way to compete in any industry against large companies. But guess what? The great thing about large companies is they're large. They become very bureaucratic. They become very slow. They have a lot of advantages, but small companies have advantages too. And I generally find that a lot of companies like to deal with small players.

You can be better at relationship management, better at customer services. I started Red Envelope going up against big players in e-commerce. I started Profit Brand Strategy going up against very big consulting firms. And I started L2 going up against big players and e-commerce. I started Profit Brand Strategy going up against very big consulting firms. And I started L2 going up against very big analytics companies.

And now I'm starting Section 4 going up against huge multi-billion dollar organizations called the universities. And in every instance, if you find a niche and you can do a better job through focus, intense focus, and quite frankly, just out fucking hustling them, you can carve that niche. And then what you want to do better job through focus, intense focus, and quite frankly, just out fucking hustling them. You can carve that niche.

And then what you want to do with a small company, what is your objective with a small company? It's to find half a dozen, a dozen, two dozen clients that will be your evangelist. To over-serve them, even if it means late nights and losing some money initially, you need to create a core of evangelists who say, I'm going to this company, I'm going to take you with me, or I'm going to give you the email, refer you to a buddy of mine at this company. That is what it's all about. Your product strategy, all studies to the following test. How do I create a small chorus of intense evangelists for my offering? And the way you're going to do it, my brother, is through focus, the specific crowds out the general. We'll be right back. 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, what learnings have shifted their career Hello, I'm Esther Perel, psychotherapist and host of the podcast Where Should We Begin, which delves into the multiple layers of relationships, mostly romantic. But in this special series, I focus on our relationships with our colleagues, business partners and managers. Listen in as I talk to co-workers facing their own challenges with one another and get the real work done. Tune into Housework, a special series from Where Should We Begin, sponsored by Klaviyo.

Welcome back. Question number three. Hi, Prof. J. Congrats on your CNN gig. Hopefully you are not too cool for school to answer another question. Thank you for all you do. We are a small business out in California ready to make the next move, which is a new hire. Do we hire a biz dev person

or a marketing person? These are two completely different roles, I understand. Ideally, the person can do both, but where should their focus be? Getting new business or getting the word out there? Thank you again. Hope to hear from you. Thank you, son. Son from California. I'm going to go out on a limb here and assume that your parents were hippies. And I like that you think daddy is cool, but let's be honest,

I make a room cooler by leaving it, but thank you anyways. So there are about three quarters of a million open business development positions in the US on LinkedIn and about 620,000 open marketing positions. So the key is just to find, I'm a big believer in hiring great athletes, that even if somebody doesn't have the perfect background for the job description,

you kind of have your list of what you want in a person. And then my grandmother used to say this, and she was talking about mating or boyfriends and girlfriends, and that is you have your list of what you want in a person. And then my grandmother used to say this, and she was talking about mating or boyfriends and girlfriends. And that is you have your list and then you fall in love and you tear up your list. I think you do the same when hiring. And that is when you meet someone good,

when you meet a great athlete that just feels like they'd be good at whatever they did, you hire that person. Especially in a small business, you need a series of great athletes. You need a team of decathletes that can kind of play a lot of different sports. I don't know the specific situation in your company to answer biz dev versus marketing.

My bias is towards biz dev. Traditional marketing, as I think you've identified here, is it's a very difficult way to measure customer acquisition, spending money on PR and general advertising. But if you're a B2B, and I don't know what your business is, at the end of the day, the best thing you can do for your brand is to sell your product to people, get revenues in the door, and have people love it. And so, a B2B person that helps find customers, especially if it's B2B, is I would, where my kind of bias would be. Again, I know nothing about your business, so this is a difficult one. At L2, one thing I would sort of say more generally is I've always been more of a product person, and that is we had a creative team of eight people and animators trying to make the product come alive at L2,

our analytics company, to make beautiful product come alive at L2, our analytics company, to make beautiful content and beautiful reports and research before we had a salesperson. And that is, I think that in an era of social media and kind of this networked economy, that truly breakthrough products break through and get a decent amount of oxygen on their own. So I think marketing to a certain extent in B2B has given way to true 10x better products. You got to just be product obsessed. And if the product really sings, people will find it. And again, you want to create those evangelists. So not knowing your business. I mean, small companies have a difficult time spending any real money, getting any real heft in terms of marketing. And all your marketing should be very data-driven,

customer acquisition, online. I hate to say it, Google and Facebook are probably kind of the only games in town. Maybe a little bit of PR if you can get it. But more than anything, in a small company, you want to hire someone fantastic. And my bias here, again, big asterisk, big footnote, I don't know your business, is around someone who's going to go out and grab revenue. The focus has got to be, how do we make a much better product? Once you have a better product, the marketing and the biz dev

and everything else kind of falls into place. Anyway, son, sorry I can't be more specific. Son from California, son from sunny California. I was in Beverly Hills last weekend, pink robe, Beverly Hills Hotel, big sunglasses, Cobb salad, iced tea. Hello, magic. Hello, Southern California magic.

That's all for this episode. Again, if you'd like to submit a question, please visit officehours.profgmedia.com. Again, that's officehours.profgmedia.com. Our producers are Caroline Shagrin and Drew Burrows. Thank you. What software do you use at work? The answer to that question is probably more complicated than you want it to be. The average US 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. Hey, it's Scott Galloway, and on our podcast, Pivot, we are bringing you a special series about the basics of artificial intelligence. We're answering all your questions. What should Thank you.