The Prof G Pod with Scott Galloway - Office Hours: Is Nuclear Power the Future?, Is the Brand Era Over?, and What Are Scott’s Reading Recs?

Episode Date: April 17, 2024

Scott gives his thoughts on why he thinks nuclear energy is the future. He then speaks about the advertising sector, specifically the shift from the brand era to the supply chain era. He wraps up with book recommendations to a listener looking to fill his summer reading list.  Music: https://www.davidcuttermusic.com / @dcuttermusic Subscribe to No Mercy / No Malice Pre-order "The Algebra of Wealth," out April 23rd Follow the podcast across socials @profgpod: Instagram Threads X Reddit Learn more about your ad choices. Visit podcastchoices.com/adchoices

Support for this show comes from Constant Contact. If you struggle just to get your customers to notice you, Constant Contact has what you need to grab their attention. Constant Contact's award-winning marketing platform offers all the automation, integration, and reporting tools that get your marketing running seamlessly, all backed by their expert live customer support. It's time to get going and growing with Constant Contact today.

Ready, set, grow. Go to ConstantContact.ca and start your free trial today. Go to ConstantContact.ca for your free trial. ConstantContact.ca Support for PropG comes from NerdWallet. Starting your slash learn more to over 400 credit cards. Head over to nerdwallet.com forward slash learn more to find smarter credit cards, savings accounts, mortgage rates, and more. NerdWallet. Finance smarter. NerdWallet Compare Incorporated.

NMLS 1617539. 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 officehoursatpropgmedia.com. Again, that's officehoursatpprofgmedia.com. Again, that's officehoursatprofgmedia.com. First question. Hey, Prof G. This is Barbaros from IncuraBC. Thank you for all the great work that you do. Also raised by a single mom, I admire all the conversations that you have, especially the ones with Ed and Kara. My question is on energy. Seeing large companies like Amazon buying a nuclear-powered data center and purchase agreements of fusion energy by Microsoft from Sam Altman's Helion, I wonder if you think we'll transition to nuclear energy in the years ahead. What do you think? Is nuclear soon, or are we going to magically just skip it and get the fusion. Again, I love the podcast. I think you and Heather are sharing incredible information here for no charge. And of course, also looking forward

to the launch of Algebra of Wealth. Thank you. Barbaros from Vancouver. I'm going to Vancouver next week. I'm going to be speaking at TED for the first time, and I'm excited to not only speak at TED, also a little bit nervous. One out of our very 150 speaking gigs,

I have a panic attack. I can't figure out why. It has something to do with size. I think it might have something to do with jet lag. I don't know. That's not a good sign, flying into Vancouver. But anyways, I think this would probably not be the time to have a panic attack during a TED Talk. Anyways, my blood pressure is going up just thinking about it. Jesus Christ, Barbaros, you're making me anxious. Anyways, I'm going to Vancouver. Look, I'm a huge fan of nuclear. More people have died in Ted Kennedy's car than in a nuclear power plant. I just can't figure out why on earth. All the nuclear waste that's been produced by every nuclear power plant could be in a six-foot tall container that would cover, I think, one football field. To me, it just seems like a no-brainer that we should be going hard on nuclear.

And unfortunately, it's really out of vogue. We've actually reduced the number of power plants in the U.S. Germany basically shut them down. It became very politically incorrect. And it has been a disaster for us reducing our reliance on nuclear. So there's a massive— I think we're going to turn to all of it. I think we're going to use more fossil fuels. I think the price of oil is going to go up. We're going to have to do all of it. Why? The growing computing demand for AI,

according to the International Energy Agency, since 2010, data centers have used about 1% of the world's electricity. But a researcher at VU University Amsterdam School of Business and Economics says the energy required for global data centers could increase by 50% by 2027 just due to AI. Tech companies are also seeking energy solutions to address environmental concerns. For example, Amazon has said their new data centers are part of a broader effort to invest in carbon-free energy, complementing its wind and solar projects with nuclear energy. Beyond AWS and Microsoft, cryptocurrency mining firms are increasingly adopting renewable and nuclear energy to reduce their carbon footprint, with examples including Aspen Creek's commitment to renewables and Terrowolf's nuclear-powered mining facility. I'm just a huge fan of nuclear, and there seems to be a ton of innovation, like little nuclear power plants that are the size of a container or a semi-truck that can power a small town or city, and then nuclear fusion,

little nuclear backpack can power a household. So I think it's really exciting, and I think we're going to see a lot of it. And energy, I mean, when you just think about where AI is headed and just the amount of compute and the energy it's going to take is just striking. That's another reason I just have been so fucking skeptical of crypto. It's a genius. It's genius to figure out a way to create the illusion of scarcity through finite coins being minted or mined. But Christ, we created something that consumes the electricity of Argentina that was like we invented it. It didn't. Anyway, don't get me started. But yeah, I think that you're going to see

a ton of this kind of innovation. And is it going to be nuclear? Is it going to be solar? Is it going to be wind? Is it going to be thermal? Is it going to be coal? Is it going to be oil? The answer is yes, all of the above. Just like we've always figured out our ability to innovate around apps that can soak up all the additional power offered by additional processing power, we will hands down, I believe, our demand for new sources of energy will outstrip not only new sources of energy, but our existing sources of energy. Quick fact, I didn't know this. Number three producer of energy globally or of fossil fuels is Russia. Two is the Kingdom of Saudi Arabia. Number one, the good old U.S. of A. Anyways, thanks for the question, Barbaros.

Question number two. Hi, Scott. Matt here and a big fan of your podcast. Question number two. the biggest advertisers in the world. Even Tesla, famously averse to advertising, is now paying for media to try to differentiate versus the growing EB market. As someone who also falls this closely, there's been a golden age of advertising effectiveness research from professors like Byron Sharp showing the value of paid media. I'd be curious how much of your successful ProfMedia business, ProfG Media business, is supported by advertising. I work in the space, so I'm obviously biased, but curious if you've amended any of your opinions here. Thank you for all you do and go Gunners. Go Gunners. I love that. Look, I make these provocative statements that if you're advertising, it means your product sucks. And I've also said, and this is, I think, more true,

if you constantly are having dinner with strangers, it means you're selling an undifferentiated product. So if you're in the services business and your job is to have these full relationships with people, it means you're all selling the same damn widget and you're dependent upon relationships. One of the things I loved about, I started a brand strategy firm. And basically, we were good at what we did, but there were a lot of good firms out there, interbrand, doing brand strategy. And the way we got business is I would develop sort of these proxy father-son relationships with the CMO or the CEO. And I found it just fucking exhausting. They were really interesting, wonderful men, and they were all men. This was in the 90s, but I'm an introvert, and I just found it difficult. I vacationed with clients. I mean, it was just so much. But anyways, I do think advertising is

sort of a tell for a company that doesn't have a truly differentiated product. And I would push back that the tech companies, yeah, they advertise a lot, but as a percentage of their top I said, why wouldn't you start a TikTok competitor? I still, by the way, think they should partner with an AI firm and buy a hopefully divested TikTok. But he said, no, we use TikTok as free advertising. It's amazing. We give them a certain number of clips and it's fantastic marketing for us. And they don't spend a lot of money, I don't think, on marketing. And I think the companies that, the companies that have had the most shareholder value over the last 10, 20 years have a few things in common. One, they're typically asset light. Why build a factory when you can just design the chip and video? Why invest in expensive real estate when you can just create a platform and take fees? Airbnb, why buy and maintain cars when you can just create software, a thick layer of software on top of them? That's Uber. They tend to have recurring revenue streams that are more predictable, like a software company. But also, I have found they tend to be less reliant on advertising. And the thing about advertising, one of the reasons Google largely killed the traditional ad business, and I think it has, Google loses or gains the value of IPG, WPP, Publiscy, and Omnicon every day. Those guys used to be the big swinging dicks, and now they basically work, and they beg for the crumbs off of the Google and Meta

cookie, if you will, is that those companies have difficult times finding attribution or building it. Basically, all the research that Condé Nast or IPG does all leads to one place. You should spend more money on our advertising, right? And it's kind of bullshit. And it's kind of a model where the lack of attribution was both the sin and the opportunity in the sense that brand building is difficult to reverse engineer to specific sales. So there's been a dearth of it, which probably means it's going to offer higher ROI and direct response advertising, specifically meta and alphabet with their unbelievable targeting. I mean, well, you only have 70% of your budget in digital marketing. It should probably

be more. I mean, every year these companies just take more and more share of an industry. Advertising is a weird industry. It's always like one and a half percent of GDP. It doesn't go below that. It doesn't go above it. So this is not a growth industry, but you have some companies that are going 20 and 25 percent a year, everyone from Meta and Alphabet to TikTok, which means they are sucking the oxygen out of the room for the other folks. Does that mean traditional-based advertising and brand billing is going to go away? No, but it's going to be a shitty place to work or invest. If you're absolutely in love with it or you're scaling and have senior level sponsorship or you're rounding third, then by all means stay there. But if you're younger, don't love it.

I just think it's going to get more and more difficult for the traditional advertiser slash brand building complex. And this is from someone who made a really good living preaching about brand. I think things have generally changed. I think we've moved from a brand era, and I don't want to call it an innovation era, to a supply chain era. Most of the big, big advances in shareholder value, in addition to being asset light, recurring revenue, lack of advertising, have been supply chain. So, you know, my brother, I just, and I'm a professor of brand strategy. I think the era of brand, the sun has passed midday, and Don Draper has been drawn and quartered. Thanks for the question. We have one quick break before our final question. Stay with us.

Welcome back. Question number three. Hey, Scott. I'm currently finishing up my first year at business school, and I'm starting to think about my summer reading list. I'm looking for some advice on books to read outside of the assigned books in cases I've been reading in school. What's on your to be more transparent. I don't read a lot. Oh, that's not correct. I read a shit ton. I don't read a lot of books. I wait till I know a book is, everyone says it's amazing and then I'll read it once and I'll highlight stuff and I spend a lot of time on it.

It takes me three months to read a book because I try and cement different things about the book and make them part of my narrative and really learn from them. But I don't read a lot. The books that my producer thinks I would like to recommend to you are The Way of the Champion, Pain, Persistence, and The Path Forward

by Paul Rabel. Oh, I know Paul. Paul's a wonderful guy. I don't know if the book's any good, but he's like this incredible guy. He's basically the Michael Jordan of lacrosse, kind of the greatest lacrosse player everywhere. According to my producer, the book is a guide to embodying a winning mindset with memorable stories and lessons for how to be a pro in all areas of life and sports, business, and relationships. If you met this guy, you'd want to figure out what is the secret sauce to being Paul Rabel. He's an impressive man. The Anxious Generation. Oh, my God, we haven't talked enough about this. How the Great Rewiring of Childhood is Causing an Epidemic of Mental Illness by Jonathan Haidt. Jonathan is the most influential scholar in the world. If you have kids, this is

a must read. I'm going to stop there because everyone's already bought this goddamn thing. It's number one on every list in the world. I did get a book the other day, and I've started actually reading it, which is unusual for me. And it's called The Age of Revolutions, Progress and Backlash from 1600 to the Present by Fareed Zakaria. It's fantastic. And I'm already sort of, you know, parroting some of Fareed's thought leadership. Look, some books that kind of changed my life, The Winds of War by Herman Wook. I'm just fascinated with World War II history and it gave me a perspective for how just brutal and important war is and has been to shaping our society, specifically World War II. That's probably not light reading for somebody.

The world according to Garp, I just thought it was so strange, and it gave me an appreciation for how just weird and wonderful people are, just that people are just so fucking strange. I think John Irving kind of changed my life. It just gave me an appreciation for the eccentricities of people. What else have I read recently? Sapiens, that's one of those books that I read a couple times because I got so much insight from it. If you're interested in management theory, anything from Peter Drucker, I loved Observations of a Bystander. I thought that was just super interesting. But there's just so much good shit out there. What else have I read recently that I really, really enjoyed? Oh, and another book I'm rereading just because I saw the movie is Dune. I remember, it's really interesting.

Books for me are like music. The ones I read in high school and college are kind of cemented in my brain. Anyways, a ton of good stuff out there. And let me know what you come up with. Post it and we'll write a review on it. But what a nice problem to have. What books am I going to read this summer? That's all for this episode.

If you'd like to submit a question, please email a voice recording to officehours at prop2media.com. Again, that's officehours at prop2media.com.