The Prof G Pod with Scott Galloway - TikTok, Espionage, and the Eurasia Group — with Ian Bremmer

Episode Date: August 18, 2022

We’re sharing Part II of our conversation with Ian Bremmer that took place back in June. Today, Ian discusses his thoughts on TikTok’s potential threats and the type of espionage he’s paying attention to. We also learn more about Ian’s firm, Eurasia Group, including its business model and clientele. Follow Ian on Twitter, @ianbremmer.  Learn more about your ad choices. Visit podcastchoices.com/adchoices

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NMLS 1617539. Episode 187. 187 was a number of minutes where trump did nothing to stop the capital siege dirty dancing premiered in 1987 the princess bride also premiered in 1987 people born in 1987 zach afron blake lively kendrick lamar and frank ocean true story my girlfriend asked me to reenact that scene from dirty dancing i agreed and went to a holiday camp and slept. Go, go, go! Welcome to the 187th episode of the Prop G Pod. If you're a weekly listener of the show,

then you know that I am on vacation for the month of August, scot-free August. Yeah, that's kind of a relief, isn't it? If you're new to the show, then let's break down how our pod usually works. Every Thursday, we open the show by offering insights and analysis of the top business stories that involve companies, products, and trends we're paying attention to.

Then we bring in a blue flame thinker to help us make sense of the broader economy or society. But since I am out of August, je ne sais quoi out, je ne sais quoi in Saint-Tropez, I am not in Saint-Tropez. I've been to Saint-Tropez once and I felt like I was on the outside. I wasn't on a boat. I didn't know any wealthy oligarchs and I was just kind of roaming around town looking for $400 dinners. Felt like I was on the outside looking in. Anyways, that's my Saint-Tropez experience. And today's episode, we're sharing part two of our conversation with probably one of my

three favorite guests, Ian Bremmer. We spoke with Ian back in June and had so much to cover with him that we broke the interview into two parts. Just this guy is just a great thinker, a big brain. He's kind of the Doogie Howser of geopolitics. He was at college, I think, at the age of 14, and then Stanford. Anyways, you kind of get the sense this guy has been, I don't know, running on 12,000 cylinders since he was a wee little child. In part two, Ian and I discuss the geopolitical threat of TikTok.

We also learn about Ian's firm Eurasia Group, including its business model and the importance of employee retention. The geopolitical threat of TikTok, understated, overstated? Well, I don't think that it's, I think it was overstated at the beginning when, you know, it was, we've got to ban these guys. You know, either they have to sell to a U.S. corporation or we're not going to allow them in. I think there's a big difference between a tech company that is directly involved in critical infrastructure that matters for the security of the United States. Its semiconductors are more important than a social media network. For example, well, I mean, look, the funny thing is the Chinese consider a social media network to be critical to national security, right? Which is one of the reasons they don't let Facebook into China. Because if you're China and the Communist Party is the ultimate sovereign authority and they have control over

what you can and can't say, and to a degree, they're trying to have control over what you say and what you can and can't think in terms of Tiananmen Square. I mean, young Chinese citizens don't even know what it was. Don't even know that it happened. I mean, the complete whitewashing of the genocide against the Uyghurs, the issues in Tibet, the Hong Kong handover, and the absence of rule of law, the Chinese abrogation of that agreement. I can go on and on. If you're the Chinese government, there are reasons for you to believe that a social media company is actually critical to your national security. But that's not the way we define national security in the United States, and at least not yet. And I personally am thankful for that because it allows you and me to have this conversation on air and say whatever

the hell we want. Now, that may not be true in 10 or 20 years' time. I'm going to fight like hell to make sure it still is. But as long as that's the case, it strikes me that TikTok is kind of part of the general architecture of our economy. And while it should be regulated more effectively than it presently is, and I'm not super happy about what the driving dynamics of surveillance capitalism means for how those business models affect and infect our way of thinking, I don't have a problem necessarily with it being Chinese as opposed to any other sort of country of origin. The notion that the CCP doesn't have influence over every Chinese company, to me, just seems naive. I actually think our involvement around national security issues with big tech is more

involved than is publicly acknowledged. But maybe that's me and my conspiracy theory, but tendencies. But I see a real danger here. I think TikTok, I think TikTok is now commands like 1% of global attention. And it's even more among young people. And they could just say to the folks who control the algorithms, you know, when you have a really thoughtful person talking about how capitalism isn't working, when you have somebody talking about how America has really lost its way and is fraying. And by the way, all that content is here and we produce it. We want to put the thumb on the scale. We want more young people to see these videos instead of Ian Bremmer thoughtfully

saying, yeah, we have problems, but let's be honest, we're still doing as well or better than anyone. And there's, you know, just realistically, you got to be, you know, the USD is stronger than it's ever been. We're going to suppress those thoughts and that content, and we're going to elevate the other. It strikes me this is a real, and I didn't think this three, six months ago. Yeah. No, look, I've given thought to the same concerns. I would tell you that to the extent that I am worried near term about how the Chinese might use such a network nefariously, I'd be more concerned about our political leaders that are engaging in conversations and searches in, in behavior that is scandalous, that suddenly allows, affords the Chinese

the ability to engage much more effectively in espionage and blackmail. I'm, I'm much more worried about, for example, uh, our, uh, that democratic Congressman from California, what the hell's his name? Oh, no. Oh yeah. The one that was sleeping with Fang Fang. Uh, yeah. The one that was sleeping with Feng Feng. Yeah. Anyways. Yeah. Come on. We need his name. He's an idiot. But I mean, you know, that's not just him. There's you know, how many hundreds of hims are there out there for Democrats and Republicans? It's not clear to me. I want to help the Chinese have access to that kind of information that they can use against us. Of course, by the way, we do that to them really effectively too, but that's something that I'd be more worried about. Swalwell, Eric Swalwell, I knew it would come to me eventually. I don't know why I somehow blacked that name out of my consciousness, but I am less worried about the Chinese government

putting their thumb on the scale, maybe for a slightly naive and old-fashioned reason, which is that I think these companies in the US and in China move so much faster than the governments do. I think that literally the governments are playing catch up really fast to try to understand the beginnings of the influence that these companies actually have. And I'm not saying the Chinese government won't get there in five or 10 years, and then maybe we need to rethink what our rate policy needs to be as a consequence towards them. But right now, you know, when I look at the average member of Congress in the United States, and when they question Mark Zuckerberg in terms of like how we do and don't think about regulating the Facebook. I think that actually China's challenges and understanding what the hell a TikTok is actually doing are more equivalent

than you think. So just FYI, Ian was referencing a representative, Eric Swalwell, who was actually a former presidential candidate in addition to a California Democratic representative. Like two hot seconds. Yeah. Yeah, there you go. But this was essentially a honey trap. Hot woman finds him just irresistible. And anyways, it goes from there.

Haven't the Russians been doing this forever? A bit of a digression here, but this is the kind of the basis of, I mean, this is kind of the ABCs of data and everyone and their kids being on it, it just does afford the Chinese government much more of that capacity. So, I mean, you know, do you want a hundred, you remember, I think it was a Chinese company that was trying to buy Grindr, right? I think, I thought they did. I don't think they did. I think it was actually prevented for a national security purpose. And, you know, I expect it was like,

let's make sure that they can't go after Lindsey Graham. Yeah, that's our, that's, by the way, that's our soundbite for Twitter. That was great. Yeah, it's, I find TikTok, I'm just, I'm fascinated by it. And my sense is that they're sandbagging their numbers because they don't want people to know just how powerful it is. Scott, are you on TikTok? Yeah, I am. But I could slip and break a hip every time I'm on TikTok. It's one of those

technologies where it just makes me feel really old. I've troubled my crypto and TikTok. I understand crypto sort of. I sort of get TikTok, but I've aged out of both of those things. I can't wrap my head around. I will say that anyone, and I want to use this as a segue into talking a little bit about the Eurasia Group and your business. One of the keys to accelerating your business faster than the economy relative to your competition is embracing new mediums. And we have always tried to do that, even though it's uncomfortable and hard. You know, it's just easier to go on CNBC every couple of weeks or write an op-ed for Barron's or whatever. And you realize that if you want to grow faster than the economy, you got to embrace this new stuff. So we have a huge listenership of entrepreneurs or budding entrepreneurs, young people looking to try and allocate their most precious capital or

their human capital. And both of us, we were colleagues at NYU before you went to Columbia. And I had a company called L2 that worked with global brands on their digital competence. You work with global brands and large financial institutions and trying to assess geopolitical risk and then inform financial decisions and try and link financial markets with geopolitics in the Eurasia group. And then one of our colleagues, Nouriel Roubini, had a global economic consulting group. Absolutely. Yeah. And we always talk about, there's a disproportionate amount of attention on unicorns, talking about the TikToks or the snaps of the world. There's a whole main street, I don't even call it main street, a whole university street economy of businesses like ours that present real fantastic opportunities for

young people. And then going into academia or what I'll loosely call thought leadership, if you're good at what you do and you work your ass off, there's a ton of opportunities to build enterprises. So with that long intro, I would just love to know more about the Eurasia Group, the business model, how you guys generate enterprise value, how many people work with you, and just to understand the Eurasia Group as a business.

Sure. Look, I mean, in a sense, the Nouriel Roubini analogy is a good one. Also, you'll remember a little older than all of us, Dan Yergin, who wrote the Pulitzer Prize winning book, The Prize, which was the book on the oil industry. And he started a company as an energy economist called Cambridge Energy Research Associates, CERA. They have C have Sarah Week, which is like the global confab on energy, everyone comes through. And what he did on energy, I basically wanted to do and have done on global politics. The idea being that people out there increasingly need to understand how

changes in the global political landscape are going to affect the economy, are going to affect the marketplace, and are going to affect their individual business. That's what we do. And we have, we do that by geography, we do it by theme, you know, in other words, geotechnology and sustainability and climate and global health and, you know, all the rest. And we also, by sector, and we also do it in terms of macro versus micro. And about 200 folks full-time. 200 people. And is the product research, events, consulting? What do you offer and what's the business model?

Is it subscription? The product is primarily advisory work where we are doing a lot of – I write a piece every week that everyone that's aligned with us certainly gets. We put out research how we think. But to take that and then really apply it, you're using us as you would a good law firm where we're getting to understand your institution and we're applying our knowledge to that, to those specific challenges, opportunities, and the rest. I also started a little media company, which is less about making money and is more about taking a lot of our proprietary research and our understanding of the world and trying to make people a little bit less anxious about global politics called GZERO Media. We have an events business as well that's aligned with that. It's also GZERO Events that's a little more public facing. So a lot of other things that we're doing, but the core of the business in terms of what's driving the revenue is that advisory work. And again, the interesting challenge that we have is we don't do business, for example, in China or in Russia. We don't do, not just with the governments, but with the private sector companies either, because if there's no rule of law, the level of pressure that our analysts would be under

not to speak their mind, not to write what they really think would be high. If you're a bank, it doesn't really matter because nobody's paying you for that research anyway. That's just headline table stakes. It's more of a marketing exercise. If you're Standard & Poor's, you're Fitch or Moody's, actually the people that you are rating are literally paying for the ratings, which strikes me as a conflict. But if you're us, the authenticity of the research is literally the entirety of the product. That is what we do. It's who we are. So my voice must be like as honest. I can get it wrong, but I have to get it honestly wrong. I can't get it wrong because I was in someone's pocket.

That's the end of our brand. And that has to be true for our organization as a whole. We'll be right back. Hey, it's Scott Galloway. And on our podcast, Pivot, we are bringing you a special series about the basics of artificial intelligence. Thank you. 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. more complicated than you want it to be. The average US 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. So you might have a crypto analyst, a hedge fund based in London, wants to understand how China banning mining affects crypto or the shifting in terms of mining. You have an analyst

that shows up that might send research. They have access to a portal. Do they pay like a consulting firm an hourly fee? Do they pay an annual membership based on the access or the size of the company? What's the business model? Yeah, the business model is usually that those, it's very rarely subscription. It's either monthly retainer, or it's project work, or it's a, you know, most, usually it's a blended version of that, where, you know, you're looking at what you're doing for the firm, and you're putting together, you know, kind of like a proposal of here's what you really need from us, this is what we can do, and here's what we're going to charge for.

So, I mean, usually to do good work for an organization, you're getting to know them for a few months before you're doing any actual work, and you kind of both understand each other's capabilities and needs before you start. And I'd love to be able to bill every client while we're figuring that out because it does take a fair amount of work and frequently you'll do it and then they decide to walk away and you've wasted that. So it's important as you're scoping and you're

relationship building that you're not just following any potential lead. It has to be credible. But we've been around for 24 years now. Companies know us. And so it's not like we're not coming in and having to say from scratch, let us tell you who we are. They know who we are. It's more a question of how we can be directly relevant to them. our organization that truly understand the business model, understand who they're talking to, the more likely it's going to be a long relationship. I mean, the upside of losing the occasional client before they become a client is once they become a client, it tends to be very sticky. And what's the friction in the business? Is it capital? Is it clients? Is it finding good analysts? in the world, like coming directly out of a master's in international affairs from the Kennedy School or SIPA or NYU. Those people all want a couple years at Eurasia Group. But when you're talking about someone who's mid-career in their 40s, those people at my firm have all sorts of offers. So we are fortunate to have them and they can leap. And so, you know, you need to, it's, you constantly need to be, you need to manage them well, you need to give them great opportunities.

It's not just about comp and, and frequently they'll go to clients and it's great when they go to a client because it builds a good relationship. But you know, when you only have 200 people and you know, 40, 50 of them are like absolutely indispensable to a whole bunch of relationships, you need to make sure indispensable to a whole bunch of relationships. You need to make sure that those people are as sticky as possible and also that you have a robust HR network, alumni network that you can work constantly because 200 is not a huge firm. I mean, it feels big to me because in our field, we can do so much and we have a lot of brand on the back of that. I mean, I'm delighted with it, but it's not a big firm.

We're not talking about like, you know, Apple or P&G. And so that I think when you're talking about a firm that's that small, human capital is just absolutely critical. And I've generally found that people who are outstanding content producers or sole contributors or thought leaders such as yourself, and I don't know this to be true. It's again, I'm speculating, don't necessarily make great managers. Do you have someone, quote unquote, running? I mean, you're clearly Mr. Outside here. Do you

have someone running the business? Oh yeah, we have I will. So one of the things that I am best at is understanding that I should not be running the company. And by the way, Dan, Dan, Dan Yergin had the same. He had this guy, Jamie Rosenfeld, who he was working with, with day one. Anyone that meets Dan knows that Dan should not be running a company as well. It's very obvious. He's a thought leader and he's a great communicator and he's external facing. Now, of course, I don't know if you know this, Scott, but when I started the firm, there's no outside investment in the firm. So, I mean, this all started from me and grew organically. Never raised capital. Never raised capital. So, for the first five years, even 10 years, I just didn't have enough money or experience to hire a good CEO. But I did

have enough money and experience to hire someone who was a bad CEO that was at least as good as me. And that at least took all of that off of me. So we made some mediocre decisions, but we could still grow. We now have a world-class CEO and we have all sorts of management capability and I don't second guess those people. So what advice a 25 young person is like, I've got the certification, I've got the thought leadership, I love being a bit of a wonk, I love writing, and I want to build a company and have outsized influence in economic security, what fields, what domains, what regions would you say there's a white space in, in terms of, if you were going to say to somebody, all right, the next Eurasia group should look like this?

I'd probably either focus on the broad climate space or I'd focus on the broad climate space. Hmm. That makes sense. Or I'd focus on the broad technology space. And when I say technology, you need to focus. But it could be biotech. It could be crypto. But I mean, it's the analytics of that stuff, right? And I started Eurasia Group and I applied it to Eurasia. That is, our name is from that part of the world because I got my PhD from 89 to 94. My God, I suddenly like, I was in the middle of 15 new countries that we had just literally created from whole cloth

and how they were going to relate in a globalized economic environment where the politics were not easy. That's how we started. If you were starting one of these firms, I wouldn't want to start too global unless you had a good reason to, because it's not credible for a young person. A young person needs to start. I just think you have to start with content. And the thing that worries me about some of the young people that I see starting organizations that feel a little like this is they go really big. They go really global and really like, I'm going to change the world from day one. And it ain't incredible. Like just people won't pay attention to that. Yeah. The specific

crowds out the general, I would say start with a narrow niche and expand from there. And I will make this my last question. Most importantly, what are you doing this summer? What does Ian Bremer do over the summer? Um, I will go, I mean, I work, uh, for the first couple of months, so I'm outside a hell of a lot more, a lot of tennis, a lot of running every morning, but that's not so different. Um, no, I'll be in Nantucket, uh, from the last week of July till through labor day. And, uh, you know, all my close friends come out, um, and we do some, some wonkery and we do a lot of barbecuing, a lot of beaching, um, and an enormous amount of outdoor activity. Like I there's, I I'm, I'm usually, I feel fantastically energized, but also absolutely exhausted by the end of every day.

And I'm a morning person, and I will fall asleep on folks at dinner. And for me, that is a sign of a fantastic evening when you've got your friends around you, and it's a great meal. And by 10 o'clock, they're all talking, and you're sleeping at the table. That just feels wonderful. Ian Bremmer is a political scientist and the president and founder of Eurasia Group, the world's leading political risk research and consulting firm, and GZERO Media, a company dedicated to providing intelligent and engaging coverage of international affairs. Ian's credited with bringing the craft of political risk to financial markets, creating Wall Street's first global political risk index, the GPRI, and for establishing political risk as an academic discipline. He joins us from his home

in, are you in New York, Ian? Where are you right now? I'm in New York. I am indeed. And his latest book, which is a New York Times bestseller, The Power of Crisis, How Three Threats and Our Response Will Change the World, is available now. Ian, thanks so much. Always really illuminating. And thanks so much for change the world is available now. Ian, thanks so much. Always really illuminating. And thanks so much for taking the time to do this. Always love talking to you, Scott. Thanks so much, man. Our producers are Caroline Shagrin 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 Prop G Pod from the Vox Media Podcast Network. We will catch you next week. Say somebody is us, but 20 years younger. Actually, you're younger than me. 25, 28. I'm old. I'm 52. What are you, 57?

I'm 57. Fuck, that hurts. Anyways. 25, 28. I'm 52. What are you, 57? I'm 57. Fuck, that hurts. Anyways. I'm sorry. I'm sorry. Thanks. I'm sorry it hurts. I'm not sorry you're 57.

You know, you're out there. You're robust. Here we go. You're frequent and shirtless. You keep doing that to yourself. I don't know why you do that with me. Support for this podcast comes from Klaviyo. You know that feeling when your favorite brand really gets you. I don't know why you do that with me. Over 100,000 brands trust Klaviyo's unified data and marketing platform to build smarter digital relationships with their customers during Black Friday, Cyber Monday, and beyond.

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