The Prof G Pod with Scott Galloway - Office Hours: Should I Short Meta? The World Cup in Qatar, and How to Acquire New Customers

Episode Date: November 2, 2022

Scott takes a question about shorting stocks like Meta and Twitter. He then shares his opinion on the ethics of attending the World Cup in Qatar, and suggests methods for acquiring new customers. (Note: this episode was recorded prior to Elon Musk taking Twitter private). Music: https://www.davidcuttermusic.com / @dcuttermusic Learn more about your ad choices. Visit podcastchoices.com/adchoices

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cards, savings accounts, mortgage rates, and more. NerdWallet, finance smarter. NerdWallet Compare Incorporated. NMLS 1617539. Welcome to the ProfitG 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 officehoursatprofgmedia.com. Again, that's officehoursatprofgmedia.com. First question. Hi, Prof G. This is Matt S. in Taos, New Mexico. Recently on Pivot, you heavily criticized meta and its overbetting on the metaverse play. With that being said, do you feel that shorting meta

stock would make sense? On that same theme, with your premise of Twitter stock really being worth $13, but trading around 50 per share, would shorting Twitter also be a good move? Matt from Taos, New Mexico. Thanks for the question. It's an easy one on Twitter because you're not going to have or be able to short it. My guess is it's going to close on Friday, the deal, and it'll no longer be a publicly traded stock with options that you can buy or sell. So let's focus on meta. I believe they're estimating they're going to spend somewhere between $60 to $70 billion trying to reinvent the world or a three-dimensional version of the web in the world or cross work, entertainment, education. And I just don't think it's going to work. And

there's a lot of evidence that it isn't working. Having said that, I would not want to short. In general, I don't like shorting stocks. Occasionally, I write calls, which I guess is the same thing as shorting stock, but I have the financial capacity to absorb a large hit. If you're going to short a stock, I think you want to make sure that you plan for a black swan event and that it wouldn't take too much of your wealth, if you will. So I think it's something that, and I don't mean to infantilize lower middle income households, but it's a very risky strategy. It's kind of low probability, high severity outcome if things go wrong. And generally speaking, I think the right investment strategy is to buy stocks long that you think are good companies, diversify, maybe even buy low-cost ETFs or index funds, and just ignore them for a long time. The cohort that's outperformed the S&P is dead people because they weren't trading their stock. So I worry that when I hear a young man

talking about shorting a stock, that he's going to be spending too much time investing his human capital staring at a phone. Also, I think meta is probably, and I hate to say this, I think it's probably a buy right now. I think it trades at a earnings multiple of around 11. And the core business is just an exceptional cash spigot. I mean, it's just Meta's business or its core business, even though it's no longer growing or growing as fast, is an incredible business. And the kind of fever dreams of Mark Zuckerberg around reinventing the world such that he can become our scientific god and start pelting us with Nissan ads when we roam around some weird version of the earth without legs. The stock has been taken down, in my view, probably too much. I would argue, and I sold my Meta stock about four or five years ago because I realized how

hypocritical it was for me to shitpost them every day and still own the stock. But I would not want a short Facebook stock right now or MetaStock. I think it's probably, and I hate to say this, I think it's probably a buy. But again, you sound like a young, thoughtful man. And unless you're in this business and hedging a portfolio or have PhDs on staff and supercomputers and 40 accounts at Bloomberg, you're competing. You're on the wrong side of a trade as a retail investor usually, unless you go long-term and invest in good companies and have a long enough time horizon such you're in that business or you have enough wealth to absorb a shock. You don't want to lose sleep thinking about whether Meta's earnings are going to be good or bad. Anyways, long-winded way of saying just say no.

Twitter, you know, a whole different talk show. But again, that thing probably closes in a few days after, a couple of days after we hear this. So you won't have the opportunity there. Anyways, Matt, thank you very much for the question. And congratulations on living in such a beautiful part of the world. Question number two. Good morning, Professor G. My name is Juan from Vancouver, Canada.

My question is, I love soccer and I am a huge fan of it, but I do feel that I'm being kind of hypocrite on how the World Cup is going to be held in Qatar and all the issues they've had. And to be honest, I'll be the first one to say that I'm going to watch every game and to a certain extent, look the other way. Would you say that we are complicit in allowing this to happen? And also, what do you think about it? Juan from Vancouver, thanks for the thoughtful question. Qatar is notorious for human rights abuses, whether it's violence against women, gay people, minorities, restrictions on freedom of expression. Not to mention what could probably be accurately described as slave labor of migrant workers.

The Guardian broke the news that more than 6,500 migrant workers have died in Qatar since it won the rights to the World Cup. Qatar is partaking in sports washing, you could argue, trying to distract from their human rights abuses by bringing attention towards popular sports, that is, the World Cup, which to a certain extent, you could argue, legitimizes a corrupt authoritarian regime, similar to what Saudi Arabia has done with the live golf tournament. Also, I'm going. I went to the World Cup in Russia. I think that, so let me be honest, the reason I'm doing it is because my desire to have that type of life experience and engagement with my boys who are 12 and 15 wins for me versus some of my concerns around

participating in this wallpapering or this sports washing. So, I don't, if you're looking for moral clarity here, I definitely don't have it. But where does it stop, right? I mean, we all have to have our own line. Should we not, the World Cup in 2026, I think, or I forget when it is, is coming to America. Do we not go to the games in Texas because of their restrictive abortion laws? I mean, where does it stop? And what I think you should do is have your line. But what I don't like is when people try to shame other people. I think people have to make their own decisions around this.

I also think that America can be accused of being somewhat hypocritical when we try and get all righteous. And at the same time, we seem to be normalizing anti-Semitic comments and normalizing misogyny in this nation. So, look, here's where I am. I think you have to make your own decision and just say, okay, what are my values here? Am I having a problem? Am I really uncomfortable going? Then make that decision. But try and ignore, or not ignore,

but don't do it because you're worried about getting sanctioned by some orthodoxy. And at the same time, if you don't want to spend that money and you want to spend it somewhere else, good for you. I think everyone has to have their own code around this stuff. And just being very blunt, I don't like the way these nations behave or some of these nations treat those people. At the same time, my desire to have once-in-a-lifetime experiences with my boys wins here. Judge me. 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, 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. Support for this show comes from Constant Contact. You know what's not easy?

Marketing. And when you're starting your small business, while you're so focused on the day-to-day, the personnel, and the finances, marketing is the last thing on your mind. But if customers don't know about you, the rest of it doesn't really matter. Luckily, there's Constant Contact. Constant Contact's award-winning marketing platform can help your businesses stand out, stay top of mind, and see big results. Sell more, raise more, and build more genuine relationships with your audience through a suite of digital marketing tools made to fast track your growth. With Constant Contact, you can get email marketing that helps you create

and send the perfect email to every customer, and create, promote, and manage your events with ease, all in one place. Get all the automation, integration, and reporting tools that get your marketing running seamlessly, all backed by Constant Contact's expert live customer support. Ready, set, grow. Go to ConstantContact.ca and start your free trial today. Go to ConstantContact.ca for your free trial today go to constant contact dot ca for your free trial constant contact dot ca welcome back question number three hi scott my name is jack and i'm from nottingham in england i enjoyed your books before and post corona and i love the podcast

my question is about b2b marketing. I co-founded a company which sells optimization software and our product is proven to outperform the competition but we're still looking for our first customer. As we're unestablished I'm struggling to get prospective customers to give me the time of day. My main strategy so far has been to contact managers on LinkedIn but my messages usually get ignored. We could spend money on adverts in industry magazines or hire stores at exhibitions, but I feel all I really need is the opportunity to demonstrate our software directly to customers. Can you offer any advice? Thanks for listening. I'm a Chelsea fan like you, so maybe I'll see you at Stanford Bridge one day.

Jack from Nottingham, England. Welcome to the world of entrepreneurship, where that first couple of clients are just so incredibly difficult. Most small businesses take two to three years to turn a profit. Software, even longer. It can take up to two years before consumers trust your brand. According to Sprout Social, 55% of consumers learn about new brands from social media. You mentioned LinkedIn. LinkedIn is actually an incredibly effective place to market a new product. According to data from LinkedIn, it was rated as the top platform for B2B lead generation. Brands have seen a 33% increase in purchase intent for mad exposure on LinkedIn.

And 40% of B2B marketers surveyed indicated LinkedIn as the most effective channel for driving high quality leads. I feel like I need to disclose that LinkedIn sometimes advertises, but this was data we put together. And I like to think there wasn't any influence from LinkedIn on this. This is not a paid ad, if you will. So at L2, the way we got leads was through content marketing. We'd put out white papers or research or rankings and then only give them a taste of it. And they wanted to download the full report. They'd have to give us their email. We had biz dev people who would just smile and dial

and call people off of LinkedIn. One of my closest friend's sons just literally has done this entire career for software companies. He pings people on LinkedIn and tries to set up meetings. You should be able to, I would think, given the strain in the growth part of the market, find a biz dev person or just a very hungry young woman or man who is willing to smile and dial,

if you will, or ping people on LinkedIn with a little bit of support with some paid ads to get enough meetings where you should get some feedback from the marketplace. So it doesn't make sense to me that you can't find a way or can't find any introductions. I also just leverage my personal network. Granted, I'm blessed because I went to business school, so there are a lot of alumni. So can you tap in any sort of professional networks or pony up and spend the money to go to a conference and see if you can get a speaking slot or maybe buy a booth or what have you. But again, I want to be clear. It's like fucking hand-to-hand combat. It is hard, especially those first half a dozen or dozen clients. So leverage every contact you can. Try and get meetings. Try and get introductions.

Go to conferences. A little bit of advertising with very, very granular metrics on social and on Google, Google keywords, some stuff on meta. I think LinkedIn sounds perfect for this. And don't spend a lot of money. Don't do advertising. That's just, that makes no sense for a small business. You want to throw around nickels like they're manhole covers.

If you're frustrated and depressed and questioning every decision you make, there's a word for that, entrepreneurship. Anyways, Jack, keep on keeping on and best of luck to you and your firm. and depressed and questioning every decision you make, there's a word for that, entrepreneurship. Anyways, Jack, keep on keeping on and best of luck to you and your firm. That's all for this episode. Again, if you'd like to submit a question, please email a voice recording

to officehours at profgmedia.com. Thank you. Network. We will catch you next week. Tune into AI Basics, Verge, to give you a primer on how to integrate AI into your life. So, tune into AI Basics, How and When to Use AI, a special series from Pivot sponsored by AWS, wherever you get your podcasts. 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.

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