The Prof G Pod with Scott Galloway - Office Hours: Tesla’s EV Charging Partnerships With GM and Ford, the Death of Reddit As We Know It? and Prioritizing Happiness When Making College Decisions

Episode Date: June 28, 2023

Scott gives his thoughts on Tesla becoming the EV charging standard. He then takes a question about Reddit’s decision to begin charging for access to its API. He wraps up with advice about making college decisions and says the key is asking yourself, “where will I be happiest the next four years?” 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.

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at propgmedia.com. Again, that's officehours at propgmedia.com. First question. Hello, Scott. This is Mike from Columbus, Ohio. Ford and General Motors both announced that they would be adopting the Tesla supercharger standard. I believe this is game-changing as Tesla superchargers are light years ahead of the hot pile of garbage that is Electrify America and any other public charging network solution currently available. My question for you is, should Tesla transition from being a car company to being a supercharger company? I would believe that the margins that Tesla could obtain from licensing out the supercharger standard and operating that network be significantly higher than the manufacturing-intensive,

low-margin automotive business? Always appreciate your thoughts. Thank you. Now, Mike from Columbus, Ohio. It's a really thoughtful question, and I'm sort of pregnant with a comment, and that is, you think that it would be a good transition for Tesla. And there's a lot of merit to what you're saying. By the way, let's bring this back to Ohio. When my dad got divorced and married his third wife, I think it was number three, he got transferred to the headquarters of O.M. Scott's in Worthington, I'm sorry, in Columbus, Ohio. And we lived in Worthington, Ohio. And I used to caddy at Worthington Country Club.

I was 13. I think I was about 5'8", 110 pounds maybe. And I used to haul around two. I used to do double bag, two Ram golf bags in the 90 high humidity degree weather in Ohio in the summer. I mean, it is shocking. I didn't die from a heat stroke. do this. And I think I would get 12 bucks, maybe 15 bucks if the young woman or the woman of lunch who I was catting for on a Saturday would pay me. Shit, that was tough work. But it builds character. But it builds character. Also a nice place to live. Fireflies, summer barbecues, nice people. I like Ohio. Anyways, what do we have here? Some background. General Motors is following its rival Ford and partnering with Tesla to use their charging network and technologies. And I believe starting in 2025, both 12,000 of Tesla's chargers using an adapter. GM CEO Mary Barra told CNBC that because of this deal, GM expects to save up to $400 million of her previously announced $750 million investment building out EV charging.

Investors are seeing this as a win-win situation and view this as a stride toward establishing a unified charging standard for the next American market. Both GM and Tesla stocks were up about 3% during after-hours trading when it was announced. Elon Musk has said that this will really even the playing field, continuing that the most important thing is that we advance the electric vehicle revolution. He's so fucking full of shit. I mean, seriously, this guy could not be—he would do anything to level the playing field. This is amazing for Tesla. And it's no accident.

I think the stock's up 20% or 30% in the last month. This is amazing for Tesla. And it's no accident. I think the stock's up 20 or 30 percent in the last month. What is this? If a Tesla Falcon X or Model S is the iPhone, this is the app store. This is them establishing the operating system of the standard that all other apps will be built on top of. They are now the operating system for charging. And I don't know what that means in terms of pricing power, what the agreement means in terms of their ability to charge for access to their charging station, but they have now built out the infrastructure. That's what these firms do. They build out an infrastructure that everybody has to use, and then they run away with it,

because once everybody throws in the hat and is using theirs, that gives them, the incumbent with the infrastructure, more and more capital, And no one can make the requisite investment to catch up to Amazon's overnight infrastructure, to catch up to Netflix's $18 billion a year of content investment I would imagine charging is a very high margin business. But Tesla has essentially launched the App Store. And if you really look at what, if you really break down what is the most profitable business for Apple, which drives, I don't know, a trillion of the $3 trillion business, maybe one and a half trillion of it is the iPhone, a half a trillion is the other hardware, but one trillion plus is the app store, and they've established the operating system for apps. And is that what Tesla's doing here? I think there's a link between its stock going fucking haywire such that the wealthiest man in the world now doesn't pay his bills. Thanks for the question. Question number two. Hey, Scott, this is Joe from Hood River. Love the podcast. I've been following you since the early days with Kara. Anyway, I'm curious been following you since the early days with Kara. Anyway, I'm curious of what you make of the situation with Reddit. Reddit has been gearing up for their IPO for what feels like almost a decade. I've been on Reddit for about 12 years. I migrated over from Dig. Both of these sites had this concept of being the front page of the

internet. It's where you'd start your day, get your news, have some discussion. And as far as the social media platform goes, I don't use any other social media. And in listening to critics of social media, they describe Reddit as having the internet equivalent of urban planning and community involvement, community leadership. So they kind of think about it as the good one. And I tend to agree with that. I like Reddit, but I'm not loyal to Reddit. And so I look at what CEO Steve Huffman is doing, frankly, just antagonizing its users. And the value proposition of Reddit, as far as I can tell, is really twofold. One is you've got these rich discussions and a lot of content being created that can be used to train LLMs. Reddit's talked about doing this.

And then like every other social media platform, it's advertising. So Reddit's never been profitable by their own admission. Scott, I'm curious, in desperation to get this IPO out the door, do you feel like Reddit and Reddit's leadership has overplayed its hand? Do you think users will go to another disruptor, which feels, frankly, pretty easy to stand up? This is super interesting. So Reddit has been the company that was going public soon for a while now. According to Bloomberg, Reddit submitted confidential IPO documents at the beginning of 2022, aspiring to go public with an estimated valuation of about $15 billion. Think about that,

$15 billion. In late May, Fidelity cut Reddit's valuation by 41%. This comes after Fidelity led Reddit's $700 million funding round in 2021, where Reddit was valued at $10 billion. So, what they're saying is they think it's worth around $6 billion. Anyways, in early June, the Wall Street Journal reported that Reddit would be laying off about 90 employees or 5% of its staff and shrunk its hiring plans by two-thirds. These developments happened as Reddit pushes to monetize its data. CEO Steve Huffman announced that starting July 1st, Reddit plans to charge third-party apps with higher usage needs.

Reddit says 90% of third-party apps will continue to have free access, but bigger third-party apps will have new API costs of millions of dollars. The app Apollo confirmed it will cost them about $20 million a year under this new price point or price scheme, which means that they claim means they would have to shut down. As a result of this announcement, moderators overseeing 7,000 subredders went on strike. These moderators aren't paid. However, researchers at Northwestern University estimate moderators aren't paid. However, researchers at Northwestern University estimate moderators on Reddit contribute $3.4 million worth of labor every year. Look, there's two sides to this trade. I understand Reddit's kind of shaggy and granola and has this community feel, but folks, that's a wrap, okay? They're a for-profit company. They

have investors that want to make money. They have employees that want to develop economic security for them and their families. So getting a huge following with free products or a freemium model and then kind of flipping on a switch and starting to charge people. Well, folks, Twitter did the same thing. What do you think Meta did? Remember when Meta offered brand pages? Hey, Nike. Hey, Adidas. Have a page, a brand page, and you will own your

own captive consumer pool. You'll have a million, two million, three million evangelists, and you'll have direct access and direct communication capability with them. But you need to advertise to build up your community on your brand page. And they got into wars, and the number of people they had on their brand page was sort of a proxy for the brand equity. And then boom, over the night, just kidding. You have to go through us. You're not going to know who they are. You got to advertise.

And we're not going to let you know who, in fact, signed up for the Nike brand page. A friend of mine, Mike Lazaro, a super impressive entrepreneur, started a company called Buddy Media that used to be basically in the business of, I think, managing and maintaining these brand pages and sold for $700 million to Salesforce. If he'd sold six months later, if he could have sold, it would have been $70 million. So his timing was good there. But this is nothing that almost every tech company doesn't do. It all comes down to who has the leverage here. If there's enough large customers who have a substitute and decide that that substitute is a better value and they leave, then Reddit's going to have to rethink its strategy. My gut, my gut is this too shall pass, that it's a very vocal minority. I would love to see the numbers. I would speculate the actual traffic has not gone down very much. And you have a company that's losing money. So they've got to make money if they want to go

public. And this is their leverage. So there's two sides to this trade. Does the customer want to continue to patronize Reddit or will Reddit inspire such a gag reflex that people don't see it as a good value and they start losing traffic and engagement and ultimately revenues? This is just this is what capitalism is. My bet is that this passes and that Reddit goes public and that it's a monster IPO because I think a lot of water is building up behind the dam. There are hedge funds that do nothing but invest in IPOs and the IPO market has been in a deep freeze. Did you see the Kava IPO? Oh my God, I don't even know what Kava is, but it doubled on its first day of trading. What the fucking, what the Kava? What the Kava? Kava de Vasco, wasn't that an explorer? I think it's meant a head of a cow. Kava de Vasco, that's right. Remember the explorers you learned in the fifth grade? Anyway, I don't buy the preciousness of these people. This is nothing that every company doesn't do. When they have leverage, they raise their prices. You know, is it a little bit harsh? Is it a little bit incongruent from what people thought the brand was? Is this almost like a co-op that wasn't supposed to bank money? Maybe. But I would bet that this vocal minority gets less and less screechy and that they go public and it's a pretty big valuation here. In sum, in sum, you know, we live in a capitalist world. If you don't like

what Reddit's doing, go find another platform. We have one quick break before our final question. Stay with us. 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. ConstantContact.ca for your free trial. ConstantContact.ca. Welcome back. Question number three. Hi, Scott. This is Joe from Toronto. My son is a rising high school senior and is contemplating where to apply to university in

the U.S. next year. He's generally intent on pursuing a career in business and is interested in things like finance and business analytics. He's especially passionate about how data is used in sports. However, he's also shown considerable aptitude in courses like AP History, AP French, and Music. His marks are quite good all around, and when he applies himself, which is consistently, he performs very well and should have some pretty good options for post-secondary. My question is this. If you were counseling a high school student today, or perhaps more pertinently, if you were advising your own kids, would you recommend to a young person who's interested in business that they should pursue an undergraduate degree in business,

or would you favor a more broad-based liberal arts approach during undergrad and eventually do an MBA post-grad? For some added context, I graduated with a degree in political science and French and now teach brand architecture and storytelling as a college professor at a business school. His mom did an HBA and an MBA and is currently a high-level investment executive. So he has solid influences from each path. By the way, you're not settling a bet for us or arbitrating divergent parental points of view here. We both see the merits of either approach, and so I'm interested in your point of view as someone who's both taught in a biz school and was a biz school student himself. What would your advice be? Thanks very much, Scott. My son and I enjoy listening to your

podcast together during our time in the car. So, Joe from Toronto, the nicest thing almost anyone ever says to me is that they listen to this with their son or their daughter. I was at the pool today and someone said that me and my husband listening to it, it just means a lot to me. It's nice to think you're solidifying relationships. I think the key to happiness is deep and meaningful relationships. And it kind of hit the lottery in terms of sons there's just so many amazing good schools. A Carnegie Mellon, I don't know if he's in that weight class in terms of elite schools, but it sounds like he's going to go to a great school. Most people don't have that opportunity or that money.

And I would suggest that sooner rather than later, those folks need to focus on a specific skill and find something they're good at, more vocational programming. And one of the things I don't like about America is that we seem to shame vocational programming and want to stuff everyone through a traditional four-year liberal arts degree. And not everyone is cut out for that. Having said that, it sounds like your kid is cut out for that. So what would I recommend?

I think once you get into a good school, first off, I think he picks a school where he wants to live for four years. I wouldn't focus on, I mean, did you know what you wanted to do at 18? I mean, he may think he knows what he wants to do. I thought I was going to be a pediatrician. And chemistry disabused me of that notion really fast. So I don't know, whatever your son is planning, what I would say is pick a great university where you think you're going to be really happy for four years, where you just, you go on campus and think, I think I could be really happy here. And then your first one or two years, take a little bit of all of it and see where your skills lie. You know, are you great at economics?

Are you just you just think, you know, I take the history really well and I'm really good at this because in terms of even if you want to go to business school and decide. And I think the MBA is an amazing graduate degree. It's kind of the athlete's degree. You can do anything with it. I think it's a fantastic degree. But to get into business school, you just need to be an impressive, well-rounded person. You don't need to have an undergraduate degree in business or finance. We love ballerinas. We love musicians. We like that stuff at business school. Now, granted, you're going to have those four years? Because America does a small number of things really, really well. We make the best weapons in the world. We make the best weapons in the world. No one can deliver violence around the world like the U.S. because of our brave men and women in uniform, the amount of resources we apply to it, our technology and our weapons. We do outstanding movies and media involving men in tights and capes. We're really good at that. We have the best software and technology in the world. If it's AI, it's American. What do we also do better than anyone in the world? College. The Michigan Wolverine football games, the quad, Royce Hall, concerts at Royce Hall at the

University of California at Los Angeles, you know, Gator Games at the University of Florida, computer science departments or, you know, the robotics department at Carnegie Mellon. We have the best hands-down university experience in the world. It is a singular experience. And what you want to say to your son, in my view, is where are you going to have the singular of singular experiences? What class do you take? What do you end up studying? It doesn't matter. If he goes to an elite school and he's good and he finds something he's good at, the rest will sort itself out. The rest will sort itself out. So don't let the tail wag the dog here at 18. Find a place he's going to be happy. If your son has the skills, hopefully, and the credentials to get into more than one university, get into a few and then call them

and start negotiating. We'd really love, we'd really love to come to Vanderbilt, but we're getting a scholarship at UVA, both amazing schools, by the way. What can you do for us? And guess what? Guess what? Especially among competitive schools, they usually will offer you something because they have something called yield. They want to see if 100 people get into Duke and UVA, they publish how many people chose each. And it matters a lot to them in terms of prestige and rankings and their self-aggrandizement and arrogance, which is in no short supply at universities. Anyways, let me just sum up by saying, good for you, man. Good for you, my brother. You got a son who's taken AP French and AP History and is thinking about going to college and doing well. That's amazing. That's amazing. One question for him. One question. Where do you think you're going to be happiest for four years? Let's ignore the subjects. Let's ignore the classes. Where are you just going to love life for four years? Thanks for the classes. Where are you just going to love life for four years? Thanks for the question.

That's all for this episode. If you'd like to submit a question, please email the voice recording to officehoursatproptomedia.com. Again, that's officehoursatproptomedia.com. This episode was produced by Caroline Shagrin. Jennifer Sanchez is our associate producer. And Drew Burrows is our technical director. Thank you for listening to The Property Pod from the Vox Media Podcast Network. We will catch you on Saturday for No Mercy, No Malice, as read by George Hahn, and on Monday with our weekly market show. 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 you use it for?

What tools are right for you? And what privacy issues should you ultimately watch out for? And to help us out, we are joined by Kylie Robeson, the senior AI reporter for The 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. Hello, I'm Esther Perel, psychotherapist and host of the podcast, Where Should We Begin?, which delves into the multiple layers of relationships,

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