The Prof G Pod with Scott Galloway - Office Hours: What’s Going On in the Retail Sector, The Future of AI-driven Mental Health Care, and How Can I Help My Child to Become a Great Storyteller?

Episode Date: May 24, 2023

Scott gives his thoughts on the current state of the retail industry, specifically how they can reevaluate their investments in technology. He then speaks about how AI is impacting the mental health space. He wraps up with a discussion on storytelling. 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 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 officehours at PropGmedia.com. Again, that's officehours at PropGmedia.com. I have not heard or seen these questions. First question. Hi, Prop G. Elizabeth from Brooklyn here. I wanted to get your thoughts on what's going on in the retail sector right now. I work for a tech company that

caters primarily to fashion retail brands. And we're seeing a lot of these companies laying off large numbers of their tech teams, even as a lot of those teams work on initiatives to improve the business efficiency and profitability. I think the challenge is that retail generally caters to short-term demand, and that simply just doesn't jive with some of the longer-term investments that tech entails. And I think these layoffs are probably an example of that friction between short-term and the long-term. I recall you saying previously that as an investor, there are simply too many things that can go wrong in retail. And it's hard going out there if you're not one of

the Nikes of the world. So how would you advise these retail brands on how to stop being so short-term thinking while still successfully navigating this near-term uncertainty? And what's your outlook on retail, especially maybe fashion retail over the next few years? Thanks. Thanks for the thoughtful question. So I actually ended up in retail. I started a company called Red Envelope. I ended up consulting to a lot of retailers. My first client, big client, was Williams-Sonoma. And generally speaking, retail is, I think it's the toughest business I've ever worked in. I mean, tech is the most volatile because you have zero revenues, zero revenues, zero revenues, and then you might get sold for a billion dollars,

or you just may never get to, I mean, something like one out of 10 software companies ever get to revenue. It ends up being a kind of a feature, not a product. And then one out of 10 of those get to 10 million in revenues. But the upside is so dramatic in tech that it pays, if you spread your bets out or you find the right company, it pays for all the losers. Retail is just, there's a million ways to die in retail. You got to get real estate right. You got to get human capital right. You got to get merchandising right, which I think is actually the hardest thing in retail. You know, speaking of Red Envelope,

the smartest thing we ever did, we hired, we took a merchandising driven approach. I'm like, everything's about voice. And that is Lululemon brings together these, you know, original technical fabrics and a feel of health. And I think there's, retail's, in a sense, kind of a state of stasis, and that is they just don't know what to expect or where to invest.

Do you invest in real estate? Were people going to come back into the stores? Do you continue to invest in technology, recognizing there's deeper-pocketed players ranging from Amazon to Farfetch? So sort of pity the retail company trying to figure out what to do right now. The thing that strikes me, I think retailers are actually being pretty smart. I would probably reduce my investments in technology unless it was some sort of AI-driven technology. I think everyone decided that we don't know what to do, we don't know what to expect, but the brave new world of everything is tech. And sometimes these retailers don't get the best technology people, right? Sometimes the best tech people go to tech companies. And there's also a lot of the advances in technology, whether it's the cloud or generative

AI, are all about, quite frankly, doing more with less. And so if you're Walmart, you have to have a massive technology team. But I'm not sure if you're Lululemon, do you need several hundred engineers? Maybe, maybe not. And so I think they're smart right now to pull their horns in. And why is that? So retail sales are stronger than expected. We've been waiting for a recession, and we've been a month away from a recession for about 18 months now, and it hasn't happened. And retail sales have actually been pretty strong. But effectively, if you look at the data, about $100 billion a month is coming out of people's savings. People are spending about $100 billion more than they have. And so what we're looking at at the back half of the year, at the beginning of 2024, people are going to start running out of money.

And that's going to impact retail first. And I think retailers probably read the same economic data I do and have said, we need to kind of get ready for here is quite frankly, getting in fighting shape and cutting costs. Also, we've had such a bull market in the economy for the last 13 years, we've stuffed so many calories down the esophagus of companies that were working in the form of capital and specifically investments in technology. I think there's fatty deposits everywhere. If Meta and Google and Amazon are laying off people, that probably means that Target and ASOS and I'm trying to come up with retailers here and Lululemon should be thinking about where they can cut costs. Lululemon is a phenomenon, by the way. That company is like, it's one of the most valuable companies in Canada. They keep pulling a rabbit out of the hat. I mean, absolutely incredible. But I would bet a lot of retailers are looking at their employee workforces and the extraordinary

investments they made in technology and saying, did this really pay off? Is there opportunities with technology to reduce our technology costs? And also, as always, the person that's having an impact on retail, even though he's not in retail, is Elon Musk specifically. He laid off 80% of his workforce and nobody noticed. The advertisers noticed, but they didn't notice the reduction of workforce.

They noticed what an asshole he is and so they stopped advertising. But as a consumer of Twitter, would you know that they laid off 80% of the people? So a lot of companies are saying, how can we have the great taste of reduced costs or layoffs under the cloud cover and pending recession without the calories of losing a lot of our revenue? So the pain that you sense, the pain you're seeing, my only prediction, more. Thanks for the question. Question number two.

What's up, P-Dog? This is Ryan from Paris, the city of love. Just kidding. Anyway, my question today is about the future of mental health caring. We know that mental health is a huge issue today, especially with the new generations. And you talk often about that. The approach to it still looks fragmented to me today. You know, it feels like a trial and error approach.

Like, hey, let's try psychedelics, medicines, therapy, therapy with VR, nutritional psychology, and so on. So when are we going to approach this holistically and maybe leverage technologies like AI to create a personalized plan and even create communities where like-minded people can come together to revive social bonds that are lacking today?

So I wanted to know what are your thoughts on the topic and thank you for your work. I'm a huge fan. Thanks, brother. Paris, arguably the most beautiful city in the world. I would absolutely love Paris if it wasn't inhabited by Parisians. Oh, my God. That's got to be a hate crime.

Anyways, with respect to a holistic approach to health care, it does feel as if there's a lot, we become so specialized that there's a lot of people that know a lot about a very narrow thing, and most people know nothing about a lot. And that is, I agree with you, generative AI, where you feed in your data set of all of your healthcare records, and it says, okay, this is kind of what's going on with this person. Can anyone really tell me what's going on? And then to distribute the healthcare away from the healthcare industrial complex and want you to come to a store called a doctor's office, which is the worst retail experience in the world, with the exception maybe of grocery and gas stations, and have someone pull back a slide, not even stand up, not even make eye contact and say, fill out this paperwork, which you have filled out about 4 million times before, and create all these barriers between you and the person who actually delivers the value, a holistic approach using data makes a lot of sense. The big unlock you referenced, the big unlock you referenced, and that is remote care around mental health. And the need has never been greater. The American Psychiatric Association estimates there are more than 10,000 mental health related self-help apps. Nearly all are unapproved so far by the FDA. Most of the apps offered

structured therapy. Basically, the patient gets responses to specific problems with a workbook-like approach. An example might be Wobot, I think it's called, which is designed to help young adults experiencing stress and wellness difficulties. Unfortunately, so far, it doesn't look as if these apps we can indicate or point to success here. A study published in the JMIR Mental Health Journal revealed that the proportion of apps developed using evidence-based framework is unacceptably low. Fuck, that's a disappointment. Outside of apps, the application of generative AI in healthcare looks more promising in areas like clinical decision-making and risk prediction. The government has been taking note of the flood of AI hitting the market and is turning to regulation as a solution. Both the Department of Labor and the FDA announced

last year it was ramping up its efforts to exercise enforcement. So I'm still very excited about remote healthcare, specifically mental health. I think just acknowledging you have an issue, reaching out and starting to do something about it is really important. I think talk therapy, obviously, I don't want to underestimate the importance or some people need some sort of pharmaceutical intervention. I have my own self-care, if you will, and I'm going to share it. And it's not obviously approved. This is not financial advice. It's not medical advice. I'm just being very open and honest around what I do when I am not feeling well. And that is I recognize that I struggle with depression in the form of anger. I hold on to grudges.

I get angry at other people. But more than anything, I get very angry at myself. And I get super upset at a mistake I made. I turn it into a big deal. It's like acid in my veins. And then a couple days later, I am so deflated and down. I have trouble just thinking about anything other than just what a fucking idiot I am and what a disappointment I am to myself and everyone around me. And I realize objectively that is something else taking over my

brain because I, you know, as much as I screw up, I have a wonderful life and a lot to be very thankful of. I have, you know, blessings the size of Saturn and I have mood, you know, the size of something much smaller than Saturn. I don't know what the right analogy of Saturn, and I have mood, you know, the size of something much smaller than Saturn. I don't know what the right analogy is here. So, I have an acronym around what makes me feel better. And I would argue that there's no downside to saying, when I feel down, what gets me out of this and trying to set an algorithm or some sort of methodology or map for things that make you feel good. Nietzsche said, look at all the things, look at all the situations in your life that give you reward,

that make you feel fulfilled. What are those situations? What are the common attributes of those situations? The sensation, the work, the people, the context of that situation, and try and build a life that has more of that. I intervene with the following thing, and I call it SCAFA, S-C-A-F-A. The S, the S is for sweat. That's what resets my system. I sweat right away. I think that exercise is totally underrated as a treatment for mood and mental health disorders. C, clean. I try and eat really clean. And for me, that means eating at home. Get rid of the trans fats, the butter, all the shit that's stuffed into food when you eat outside or eat at restaurants and salt because it tastes much better and gets you addicted to it. But I eat at home really clean, organic. A for abstinence. Not the kind of abstinence you think,

but I love alcohol and THC, but I cut them out. When my head's in a weird place, I'm like, I'm just going to take a break and reset my system. And I don't need that sort of external stimuli, whatever you want to call it. And by the way, I'm not, I like both of those things. I'm a better version of me, a little bit fucked up. I've gotten more out of alcohol than it's gotten out of me. I like it. But during those times when I'm going a little bit dark, I just don't do it. F is for family, specifically time with my boys.

My boys are so demanding and can be such jerks that it takes me out of my head and thinking about me, me, me all the time. And I find the restorative. And then the final A is for affection. Mammals are meant to touch, being around my dogs, again, being around my family, flopping on the couch, just a sense of community and proximity to other people. Back to your original question, yeah, I hope there's some sort of holistic approach. That's the promise of AI, is that you feed into it a data set and it comes back and gives you a better view of your world. I think healthcare needs to go from a defensive, disease-driven sector to an offensive, health-driven sector.

I think that's the opportunity, the disbursement of medical advice on our smartphones and our smart speakers. And also, getting to Paris more often. Hello, Paris. I want to go to the new Cheval Blanc Hotel there because I'm fancy. Because I'm fancy. I absolutely love Paris. Anyways, congratulations on living

in what is arguably the most beautiful city in the world and for the thoughtful question. Thanks. 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. 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.

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Question number three. Dear Prof. G, this is Dr. C from Toronto, Canada, and Sao Paulo, Brazil. Welcome back. Question number three. years in management consulting, including eight years as a partner, I got to see the upside of superior storytelling. This is, in essence, what partners do in consulting or investment banking or any other senior positions. As a parent, on the other hand, I have been experiencing mostly the downside of storytelling, either in the form of honest incompetence, when there is subpar fact checking or no fact checking at all, or dishonesty in the form of misinformation. Dishonest storytelling is certainly what populists and or dictators do best. Given the downside of storytelling, I have two questions for you. First, what do you do as a parent so that your child can become a savvier consumer of stories?

And second, as an educator, do you think universities should do more on how to become better consumers of stories? Thank you for your wonderful podcast series. This is a thoughtful question, Dr. C., that touches on a bunch of things. There's raising kids to be good storytellers, and then there's sort of this post-truth world that we're entering that's really unfortunate. As it relates to raising storytellers or good storytellers, I remember thinking, you know, I do so much virtue signaling on this program and I pretend to be such a better father than I actually am. And I've been talking about how important storytelling is for a while. And I'm like, well, okay, boss, what are you actually doing about it to try and help your

kids be better storytellers? So I've been doing, you know, dumb things like at dinner when, you know, my 12-year-old won't, you know, be quiet, but my 15-year-old won't say anything. I tasked the 15-year-old with starting a conversation. When they're telling me stuff, I ask them to continue. What I'm going to start doing, I haven't done it yet, moving to Canada, their drive across the U.S. in an Austin mini metro when my mom was seven months pregnant. And they're enthralled by it. And I think that them hearing stories, I hope, gets them to be better storytellers. The schools, I'll give it to them, are trying to pull that out of them. My son went to this wonderful school,

or my son's called Gulfstream, and their eighth grade, every eighth grader has to stand up in front of the entire community of the school, including the parents, and do a 10 or 15-minute talk. And my son did his talk on whaling and the whaling industry in Nantucket. God, could that be a wider topic? Seriously. All of a sudden, I just felt exceptionally Caucasian and privileged. Anyways, and it's great. And he thinks about it, and he has to do it with slides. And, you know, he's nervous about it. And it's hard for a 13-year-old to stand up in front of people. The only competence I have is communications, right? I just, I know how to communicate. I know

how to write. I know how to put together slides. I know how to, a good twist of phrase, right? And that is how I've made my living. And I immediately recognize with younger people, they have to be able to be good storytellers if they want them to be a businessman consulting. If you're really amazing with technology, but you can't spin a story, that's the COO or the CTO max. You can be less good and a great storyteller, and you call that woman CEO. The ability to communicate your ideas and attract capital, human and financial, is the whole shooting match. How do you get people to be good storytellers? One is practice. Two is different mediums. I would start with the written word. I think if you can express your thoughts cogently by writing them

out, the other stuff's going to get much easier. And then just practice, and specifically a lot of confidence in trial and error around speaking in front of people. And I'm credited with being a good communicator and a good speaker. I get paid a lot of money to speak, and I have panic attacks. Sometimes I get so fucking nervous, and I freak out, and I get on stage, and I I start talking and I start gasping and swallowing air and I feel as if I'm dying and the whole audience freaks out because I look like I'm in the midst of a heart attack. And so if you're nervous in front of people, if you think I can just never do it and I need to avoid it, think again. Think again. This is how I make my living and I get panic attacks. And you have to

get over it. You have to figure it out. I'm not suggesting you're going to be Tony Robbins, right? I'm not suggesting you're going to be Maya Angelou, but you got to have a certain minimum acceptable presentation skills. It's painful. Take classes, go to Toastmasters, whatever you need to do. I am trying to figure out a way to put my kids in context where they get more of that, more experience at that, creative writing, et cetera. The second part of your question, I'm really worried about a post-truth world. The biggest fear I have about generative AI is I would say, okay, give me 10 tweets about how vaccines alter your DNA that sound real and like they came from a medical

established agency or a medical think tank. And it'll produce 10 tweets that are false, have no scientific verification or scientific veracity, but sound kind of real. And veracity has really become a function of who is the loudest and who has the biggest following, right? If Donald Trump says a lie long enough, it starts to become less of a lie. What do we do about that? I don't know. Invest in organizations that have fact-checking, whether it's the Wall Street Journal or PBS or the BBC or, you know, love them or hate them, the Post and the New York Times, they have a viewpoint, but they do take fact-checking very seriously. Don't advertise on Fox News. It should be called Fox Entertainment, where the anchors coordinate to spread information and lies that they know are lies because they

think it'll inflame their audience and sell more hearing aids. I mean, that bullshit is really, that's mendacious. That's an abuse of your position and society. What else can we do? Remove Section 230 or have carve-outs such as these social media algorithms. If they are circulating lies that result in teen depression or misuse of medical treatment or a belief that an election is rigged when they know it's not rigged, they should have the same type of liability they have out now with a carve-out around sex trafficking. If you put information on Facebook, the results and the trafficking of a minor, meta is liable. And guess what? It reduced it a lot. So do we want to reduce election misinformation, vaccine misinformation, medical information, data or content that gives kids

suicidal ideation? Oh, no, it'd be too complex. No, you could do it. They could absolutely do it. Just give them financial incentive to do it. And some, I haven't figured this out, but I recognize the importance. I'm trying to do some things that help my kids develop those skills. Some of them are uncomfortable. I don't have definitive answers. I just know if we want to appreciate the truth, we have to appreciate the truth and reward those that are fact-checking and punish those that believe they can turn a lie into the truth by just telling it over and over. Thanks for the question. Dr. C. from Toronto, the friendly, clean Canada. Go Leafs! Go Leafs! That's all for this episode. If you'd like to submit a question, please email a voice recording to officehoursatpropgmedia.com. Again, that's officehoursatpropgmedia.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 Prop G 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 markets show. 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.

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