The Prof G Pod with Scott Galloway - Office Hours: The Power of Identity, the Labor Shortage, and the Key to Relevance

Episode Date: July 20, 2022

Scott shares his thoughts on how Apple could help clean up the internet with its biometric technology. He then answers a question about why there are so many open jobs right now, and offers his number one tip to entrepreneurs on how to stay relevant. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Join Capital Group CEO Mike Gitlin on the Capital Ideas Podcast. In unscripted conversations with investment professionals, you'll hear real stories about successes and lessons learned, informed by decades of experience. It's your look inside one of the world's most experienced active investment managers. Invest 30 minutes in an episode today. Subscribe wherever you get your podcasts. Published by Capital Client Group, Inc. 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 visit officehours.propgmedia.com. Again, that's officehours.propgmedia.com. First question. Hi, Scott. This is Sebastian, 25 years old, from Munich, Germany. Recently lost a grad. You recently shared via LinkedIn Apple's announcement regarding the password replacement via this concept of passkey with Face ID and Touch ID.

And I would like to know from you the following. If you combine this feature with the thoughts of Kevin Roos from New York Times presented in your recent ProfG podcast on the dangers of AI in the near future, where he says that you should maybe imagine an internet where the vast majority of content is created by bots and AI, doesn't that maybe indicate that Apple's passkey idea might have way bigger consequences than just making it easier to log into web accounts, but more like creating an easy way of human verification regarding content of any kind? So what are your thoughts on this? Given the current Musk Twitter issue,

this definitely has a certain relevance. Do you think that Apple, by way of first changing the way we use passwords, will sublimely add a new simple way of human verification and identification on the internet. Sure, there exists Rechapter and that stuff, but I mean,

the user experience is terrible and I don't like it. Keep up the good work. You influence my personal as well as my professional career a lot. Sebastian from Germany,

thanks for the question. And it always amazes me when people can think and speak that fast in a second language. One of our very talented people here at Prop G is a woman named Maria Petrova. And Maria is initially from Bulgaria. She speaks four or five languages.

And she will proofread. When we do a book, we have a book coming out called Adrift American 100 Charts, available in September. And she's the last line of defense, and she proves it. And this is someone who understands nomenclature, diction, grammar better than anyone at the firm who grew up speaking English. I mean, that's just so impressive. Anyways, I'm impressed, Sebastian, that you're so articulate and can think and process so fast in a second language. Okay, back to your question. So first off, some data. According to a study from Imperva, malicious bots accounted for more than a quarter of internet traffic in 2021. I don't believe that. I think it's more than half.

Good bots, such as those that make online content discoverable, account for 15% of traffic. I think we always have a need for both-side-ism here to talk about good bots. Are there really good bots? Okay. The bad bots vastly outweigh the good bots, and humans account for the remaining 58%. According to the study, bad bots are harder to detect than good bots, what a shocker, because they interact with applications the way a human would. Hmm. Some sort of philosopher issue or mindfuck there. They're apparently becoming more advanced, and the most evasive kinds of bad bots account for about two-thirds of all bad bot traffic. They're also designed to get past the defense mechanisms that are currently standard across the Internet. So this is a big issue, and big tech likes to pretend it's an intractable issue.

It isn't, and one of the big remedies here is, as you point out, identity and some sort of biometric identification. Now, Big Brother and Black Mirror and conspiracy theorists will get all freaked out about that. Well, let me tell you, there's already biometric identification. I like biometric identification. I want clear. I want to be able to just walk into a stadium when I go see Chelsea play Liverpool and then say, okay, just let them in, no security. I think at some point, you shouldn't have to have 95-year-old grandmothers walk through a metal detector. They have never in the history of commercial aviation disrupted a flight. What's important is that you have thoughtful people passing regulation that says you cannot weaponize someone's biometrics and start following them around and going fishing expeditions for crime. You can't put technology back in a bottle. You can't say, okay, stop or hold up. That's a Luddite.

Stop advancing technology here. What you can have is a very thoughtful layer of laws that say, all right, even if you can identify someone using their facial recognition technology, we as a government are not going to track people. We're going to scrub that data, that unless they're accused of a crime against the state or it falls under terrorism or some sort of child endangerment, we just don't use that data. So I think it's more about the laws than it is about the technology. Identity has huge upside. Uber and Airbnb are a function of identity. And that is you would be unlikely to get into the back of a stranger's car. And a stranger would be unlikely to let you get into the back of their car unless there was really powerful identity constructs.

And that is every driver, they know who they are. If they do something bad to you, they can track them down immediately. And if you pull a gun on the driver, the Uber account says who you are, and they can track you down really quickly. If you let someone into your apartment, into your house, Airbnb says there's a certain amount of trust because we have their identity. So I think that stuff is super powerful. And here's the thing, you want to talk about the fastest means of cleaning up all the vile shit on Twitter and Instagram and Facebook and YouTube? Identity. Why is LinkedIn just more civil? Because everybody says, well, that's probably a real person. And at some point in my life, I might ask that person for a job. So people are just more likely to say,

you fucking fuck, you shouldn't be teaching, and I'm showing up to your house and murdering you. And I've literally had messages like that on Twitter. You don't get those on LinkedIn. Supposedly LinkedIn is having some of the same problems, but its problems are it's a dumpster fire compared to the nuclear mushroom cloud that is Instagram, Twitter, Meta, and YouTube. So enforcing identity is incredibly powerful. And I'm excited about this technology. And Apple has proven itself to be, I think, a pretty responsible fiduciary for our data. I think we want age gating and more forced identity. I want to know who the fuck you are when you say these things. Because if you were forced to say some of the vile shit that people say on Twitter with your identity in your face, you know what? You wouldn't say it. You wouldn't say it. You wouldn't say it. Thanks for the question, Sebastian. Next question. Hello, Professor G. This is Dave from Parker, Colorado. I had a question about the unemployment numbers. Currently, they say there are two jobs for every person looking. And I was curious to

get your opinion on what the cause of the supply problem was. Studies have shown our immigration policy over the last five years has cost us over 2 million workers. Of the over 1 million deaths in the U.S. to COVID, about 45% of those were of working class age between 18 and 65. I also heard, but haven't seen any numbers, that the folks in their mid-50s to mid-60s opted for early retirement. But does that really account for the low supply? Thank you. Love the show. Keep up the good work. Dave from Parker, Colorado. I immediately assume anyone from Colorado is just good at life. Congratulations on your good judgment to live in the great state of Colorado. So as of June 1st, the unemployment rate in the U.S. held steady at 3.6% for three months straight.

It's hard to think of a recession when there's just this kind of full employment. That basically means anybody who wants a job can get one. You may not get the job you want, but if you really want to work, you can find a job when unemployment is at 3.6%. According to the Labor Department, there were a record 11.9 million open jobs in March. And as you said, there were about two open jobs for every unemployed person. Before the pandemic, there were always more unemployed people than there were available jobs. Think about that. Post-pandemic, two open jobs for every person looking for a job. Pre-pandemic, there was more people looking than there were open jobs. That's wild. Why has that happened?

Why has that happened? The number of people who quit their jobs in March and April hovered around record highs of 4.4 million per month, but most of them left those positions for better offers. As far as retirement goes, 2.5 million people more than expected retired in the first 18 months of the pandemic. By the end of 2021, the retired population reached nearly 52 million people, up 15% in five years. That's extraordinary. That trend may be reversing, though, as roughly 1 million formerly retired folks have reentered the workforce in 2022. I think that's more my gut would be that when stocks were at a crazy high the last one or two years, a lot of people looked at their 401ks and said, I can retire,

and said, I'm going to retire a little bit early. I don't want to go to work. I have to put up with a mask or put up with the public. Or I like the idea of hanging out with my grandkids or just taking a breather and I can afford to. And then all of a sudden, in the last six months, they can afford less to retire. So they're thinking about getting back in the work environment, or maybe they want to get out of the house, or maybe they just enjoy working, whatever it might be. But I don't understand where all these people went. The great resignation here, or more aptly, the great reassessment, is just striking here. At Panera, a company I was on the board of, we used to have a job fair, 100 people show up, 12 offers, 8 people show up on Monday morning. Now it's 10 people show up, 4 offers, and two show up. I don't know if it's a sense of entitlement. I don't know if it's people deciding, I'm going to take advantage of mobility and gig work and Airbnb and leave a high cost area so I don't need as much money. I don't know if it's money they save from the stimulus

that gives them more options. But the workforce has basically, for the first time, especially frontline workers, and there's some real benefits to this, have more leverage than they've had in 40 years. And I think that's great. I'd like to see a much higher minimum wage. I think it's forcing companies and the ecosystem to take money out of shareholders' pockets and redistribute it to labor, which I think is overdue. If you look at productivity relative to wages, productivity has steadily climbed the last 40 years. But wages among lower middle income workers has been flat, meaning there's been trillions of dollars in surplus economic creation, trillions of dollars in value creation over the last 40 years in our economy. Where has it gone? It's gone to shareholders. So the shareholder class, it's been disco,

champagne and cocaine for the last 40 years, but our frontline workers and our laborers, if you will, it's just been flat. Now they haven't done worse. That's a bit of a myth, but they haven't done any better. And when you have your Instagram account showing you how everyone is killing it in the shareholder class,

and you're struggling to pay for your kid's college, which by the way, has absolutely exploded in terms of cost, you feel bad. You feel shamed. You feel upset. And the ultimate compact of a society is that you're going to do better than your parents. For the first time in our nation's history, a 30-year-old man or woman isn't doing as well as his or her mom was at the age of 30. The gray resignation here, I don't understand where these people are going. I think people are reassessing life. I think COVID may have said life is short. And I think also people have recognized this myth

that they're supposed to be loyal to organizations. Don't be loyal to an organization. An organization is a legal entity. It's not gonna love you. It's not concerned with the condition of your soul. Be loyal to people. And if you're working at a great platform that has an incredible culture and an amazing business, and it's going to continue to pay you really well and have that mole removed, then fine. Be loyal to your family and be loyal to healthcare and be loyal to

economic security. But the notion somehow that you owe some goodwill to a legal entity, it's just staggering what has happened around how labor is being reshaped. Let me go back. So the bottom line is I don't have a good answer for what has caused the supply imbalance other than to say that if you keep wages flat and all this power constantly accretes to management versus labor, at some point the market rips back. And I think the market is ripping back in a vicious way. And I think it's a good thing. Thanks for the question. We have one quick break before our final question. Stay with us. Support for this show comes from Constant Contact. You know what's not easy? Marketing.

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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. Welcome back. Question number three. from Ecuador. He lives in Mexico. So yeah, right off the bat, I live in Mexico because I saw a fairly successful YouTube channel slash production company a couple years ago and wanted bigger challenges

and what bigger challenges there than the biggest, most thriving Spanish-speaking content market there is. That being said, I recently moved from Mexico City to Merida, which is off the coast of the Yucatan. And I haven't had an issue being remote since I moved here. But seeming as the streaming wars have ramped up,

and I've read your book about how you had to stay relevant while you were taking care of your mother. What I wanted to ask, what are your recommendations and heuristics as far as telling me relevant when you're not living in the zip code where everything's happening? So far, being remote and having my business partner, who's still based in Mexico City, has worked marvels and it hasn't made much of a difference.

But how can I go that extra mile to stay very much visible to the stakeholders, you know, the people that I sell content to. And thank you very much. Love the show. Love Pivot. Love everything. Bye.

Martin from Ecuador. Thank you so much for the thoughtful question. You bring up a host of really interesting issues. So the first thing is I hope you take time to pause and reflect on your success and your talent. It sounds like you're very talented at your age. You sounded, I don't know, kind of 30s, 40s, but to have started a creative firm and been able to monetize and sell it means you're very talented. So well done and congratulations. I think that entrepreneurs need

to be in cities. There's no getting around it. Two-thirds of economic value is going to happen in the 20 super cities globally. When you play tennis, when you play with someone better than you, your game rises. And it's the same way in cities. When you're in a city, you're at a concentration of great tennis players. Everybody there is pretty good. Cities are expensive, they're competitive, they're noisy, and it basically weeds out. If you're sort of someone like, yeah, I'm not that into work and, you know, I'm smart, I'm not that smart, I kind of work to live, I don't live to work, guess what? That person doesn't end up in a city because cities are full body contact capitalism. They attract the best and brightest. They spit people out like there's no tomorrow because they're so hard to stay because they're so fucking expensive and competitive. But here's the thing, everything's situational. If your partner is sort of the front man or front woman around clients and you're the operations person managing a remote team where you can maybe do the arbitrage of getting developers less expensively in a place that has a lower cost of living, fine. Another company I was on the board of, Olapik, had this

incredible operation in Cordoba, Argentina, where they have a fantastic engineering university. And we had someone down there managing them and that just worked really well. But if it's a client-facing business, and I get the sense it is in a creatively driven business, if you're really ambitious, I would suggest you want to have as many people, especially senior people, in the city. Meeting people, having lunches. I'm going to LA today. I will just do four meetings a day. I live in Delray Beach, Florida. I love it here.

I can afford to do this. It's a lifestyle arbitrage. It's fantastic. We live near the beach. I take my kids boogie boarding. I love the lifestyle. I have never figured out a way. I have never made a dollar in Florida.

Whatever it is I do, thought leadership, whatever you want to call it, it just doesn't happen for me down here. I'm in a position now where I can do that. Why I'm in a position now? Because I spent 10 years in San Francisco. I spent 10 years in New York putting up with all the expense and the bullshit and the constant nonstop work and did reasonably well there. And it gave me the economic opportunity to move somewhere else. Some people opt out early and say, I don't want to be in a city. I'm blathering on here. If you're ambitious and you want to outperform your peers professionally and economically, get to the city. It's situational. If your partner accomplishes all that front-end work or client-facing work in the city and you manage a remote workforce, then I get it.

But if you really want to excel, if you really want to kind of get in fighting shape, if you really want to be a baller, so to speak, one word, city. That's all for this episode. Again, if you'd like to submit a question, please submit a voice recording by visiting officehours.profgmedia.com. Our producers are Caroline Chagrin and Drew Burrows. Claire Miller is our associate producer. If you like what you heard, please follow, download, and subscribe. Thank you for listening to the Prof GPod from the Fox Media Podcast Network. We will catch you on Thursday. 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.