Scott Galloway on money, marketing, and masculinity

0:07Welcome to Mixed Signals from Semaphore Media, where we are talking to the most important and interesting people shaping our new media landscape. I am Max Taney, media editor here at Semaphore, and with me as always is our editor-in-chief, Ben Smith. How's it going, Ben? Good. Good to be here. This week on the show, we are talking to Scott Galloway. Now, if you're a podcast listener, if you're listening to this show, chances are you probably listen to one or maybe two or three or four of Scott's shows. He's got five or six of them and they are growing by the day. But he's currently the co-host of the Pivot podcast with Kara Swisher and hosts several other shows as part of the Prof G network through Vox Media.

0:50We'll ask him about building a podcast empire and how the left lost young men. That's something he's really focused on and what he wants to do to kind of get those people back. We'll also talk to him and ask him to try to get to name names in terms of the Democratic 2028 candidates who are just blowing up his DMs, requesting to get on one of his podcasts.

1:12Max:Yeah, I mean, Scott is one of America's great marketers and the thing he's now marketing is himself. Well, we'll ask him about marketing himself and other people, among other things, right after this.

1:34So, Ben, a few months ago, I broke the news in our newsletter that Scott Galloway was starting a new podcast with Vox Media. And it almost wasn't news because Scott has like five or six shows with Vox now. He is an important player in the podcast landscape. He's well known by a lot of people. And it's it kind of struck me as we were preparing for this episode that that wasn't always the case. This guy kind of just seemed to pop up on our radar one day and now is everywhere. He's hosting a new daily show every week with somebody different. I'm kind of curious, when did you kind of figure out who Scott was?

2:16And also, where did he come from? Who is this guy, basically? And why do people want to listen to him for seven hours a week?

2:22Max:Yeah, I guess I probably first learned of Scott as this guy I hadn't heard of who was Kara Swisher's co-host on Pivot. But the reality is he's a marketing guy and like a very successful one. He launched a brand strategy firm in 1992 in San Francisco called Profit, which takes credit, among other things, for the famous British Petroleum, BP slogan, Beyond Petroleum. You know, simpler times then. And, you know, it's a kind of funny niche in media, the sort of brand guru who comes in and tells you how to make people think of your company, basically, and ultimately how to sell things. And that's the lane he occupied.

3:00Max:He also started a research firm called L2 that he sold to Gartner in 2017, made a bunch of money. And, you know, I guess maybe a bit after he got rich, became himself a ubiquitous media figure. And the main sort of beneficiary of his marketing know-how is himself. And I think has sort of made his way into all of our worlds now as a game commentator on everything, certainly on the media. And he did a stretch on the New York Times board as well. But actually, particularly lately on masculinity. And I think he sort of discovered an underserved audience, which is young men. It's funny. I don't necessarily think young men are underserved in the media, but certainly they're underserved from his particular lens, which is he's the co-host of a show called Raging Moderates.

3:51So he's kind of trying to reach back out to younger men who've been alienated and who've kind of drifted further to the right. That kind of seems like it sums up his point of view, right?

4:03Max:Yeah, but he's kind of a self-help guru. He's not mostly talking to young men about politics. I think he's talking to people about finding ways to, like, you know, actualize themselves without just, like, eating raw meat and hating women. Yeah, and making your bed. He's like centrist Jordan Peterson, basically. Yes, that's exactly right. I think left of center Jordan Peterson. Left of, yeah. Jordan Peterson for future New York Times subscribers. And current New York Times subscribers, for sure. It's interesting to me, too, because, you know, he brands himself as Prof G. I kind of thought, you know, for a while when I was first starting to tune into his career and tune into one of his many podcasts, he refers to himself as Prof G.

4:44And that's his kind of podcast network. I kind of thought this guy is a he's a professor of marketing at NYU. And I was like, OK, whatever this guy is. He teaches he teaches a marketing class. Why does everybody want to listen to him all the time? He's also he is incredibly successful. I didn't realize that he was worth like$100 million. He had sold all of these companies that have done incredibly well. So I actually think that he kind of undersells himself by just referring to himself as a marketing professor from NYU. It's interesting.

5:12Max:Yeah, well, I mean, and also like, I mean, he's a real marketing professor at a real university. But the internet is full of people who kind of have phony academic credentials and no real business experience, whose only business is selling business advice. And I misread him as that at some point. But no, in fact, he is a real business guy. but also I think a real new kind of ubiquitous media figure. And that's in a way the thing I'm most interested in is like what is the business of being Scott Galloway? Well, sometimes we say our guest is here and they are not actually here waiting for us, but I'm getting a note from our producer that says Scott is actually here.

5:47So we should actually bring him in right now. Let's bring on Scott.

5:53Max:Thank you so much for joining us, Scott. Ben, it's always good to see you. Ben, you're actually, you know what? You're better looking in person. Like right here, you look good. You're actually a very attractive, handsome man in person. That's really kind of you to say flattery will get you everywhere. Is that like a tactic or is that? Ben was totally silenced by that. Ben was totally, I've never seen Ben just totally flummoxed before. Is this like some kind of reverse pickup artist tactic you're using on me, Scott? I find that it's important that part of progress is that when men begin to objectify other men.

6:24Max:Well, we're off to a great start here. but the masculinity is part of this. This show is going to be kind of the second half of the show and I did it. This is a media show and I did want to start by asking you about media, Scott. And I've realized like I knew who you were as a marketing guy and as a New York Times board member and I think I don't quite know when you became a media figure. Do you know when you, was there a moment when you looked up and thought, oh, like the business I'm in is the business of Scott Galloway and the media business? Well, so people, I love the saying, after working my ass off for 30 years, I'm an overnight success.

7:03Yeah. You know, I've been at this for a while. I would say the kind of the seminal moment was when I wrote my first book. So I've been an academic for 24 years. And also I've been a serial entrepreneur up until that point. And my dean said to me, said, if you want to be taken seriously and academically, you either have to do peer review research or write a book. I had no interest in peer review research. I find it's mental masturbation amongst colleagues trying to justify the accolades such that they can enter into a guilt that results in above-market compensation and student debt on middle-class households.

7:39I'm not a fan of peer-reviewed research. So I decided to write a book. My book came out in 2016, 2017. This woman named Kara Swisher, who was a tech journalist, invited me on our podcast. And she called me after our podcast and said, the numbers, you know, and Kara's had everyone from Bill Gates to Elon Musk on her pod. She said, the numbers show that this is the most downloaded podcast in our history. And this is my favorite part. She goes, I'm certain it was a mistake. So we'd like to have you come on again. So I went on a second time. The numbers were strong. And she said, why don't we start a podcast together?

8:14And the only podcast I had ever listened to, the first one I'd ever listened to, was the one I did with Kara. So I just fell into this medium. And when I sold my company in 2017, I was blessed with a really good problem with what I want to do. And I started just putting out content. I started books, speaking, newsletters, podcasts. So I sort of just fell, really just kind of fell into it accidentally. But I would say you asked for a moment. The moment where I quote unquote got became whatever the term is, a media small player, lowercase player is the podcast, start podcasting with Kara Swisher.

8:52Max:And did you know Kara or was that like because your on air relationship is so weird and intense? Like, was that a pre-existing off air relationship or did the whole thing kind of happen on the show? No, I wouldn't even I wouldn't even say we were friends for a good one or two years after we started the podcast. I have a lot of affection for Kara. I really like, in addition to learning from her professionally, where I really learned from her is she's an outstanding parent. I just sort of observe how she approaches parenting, and it's taught me a lot. She's also a really kind of passionate friend.

9:23She's also kind of fearless. I mean, I'm kind of waxing on here, but how many people can say they're a leader in their community? Like, I can't say that. I mean, so I have a huge amount of respect for it. But we were not friends the first year or two year. And we've had some clashes behind the scenes. She's used to getting her way. So am I. We both kind of run our own businesses. So we're used to people laughing at our jokes and deferring to us all the time. And so there's been some storming, norming, and forming in the relationship around certain issues. We really clashed on Israel. Well, but we it's one of the better working relationships I've ever had.

10:02And I've become actually quite fond of her and know her family and she knows mine. So it's worked out. It's worked out really well. But anyways, I owe I owe a lot of this to Kara as a reality. That's very sweet. I feel like she was, you know, she was she was negging you when she came on here. But I'm sure she would she would say the same. She suggested I think she said in The New York Times, you guys are making around thirty five million dollars each over four years. years and you gave a bigger number with this new deal that you guys have just signed with Vox. Is the$35 million a year, is that right, from podcasting?

10:35So first off, I'm self-conscious talking about this because a lot of my wealth porn is an attempt to get the affirmation of others by showing other people how rich I am, which I think makes me more interesting to other men and sexier to women.

10:51Max:Self-awareness is an incredible gift. So i'm just trying to be in touch with why is it that I feel compelled to make sure people know i'm really successful So first I recognize that some of that comes from an insecure place where the algorithms All want to shove wealth porn in people's face and we've conflated character with With wealth in the united states, but also there is a strategy and that is I think that not talking about money is a zeitgeist imposed on the middle and lower class households by the rich such that they stay illiterate about money and we aggregate a disproportionate amount of resources.

11:25I think it's important that people talk about money. If you want to be great at tennis or you want to be great at the geopolitics of Europe, you need to talk about it a lot. And so I encourage young people to talk about money, to share investment ideas. So I very openly talk about the money I make, the investments I make, the money I lose, dumb things I've done, smart things, I've not how much money I make. So with that, the pivot universe is about$10 million a year. The Prof G podcast universe will be close to 15 or 20 million next year. Wow. And these are very, and that's before speaking or newsletters.

12:01I'm in San Francisco right now. I get a, I probably make four to four and a half million bucks a year just in speaking gigs. So we make an exceptional living. But above a certain number, Daniel Kahneman, the Israeli-American psychologist, has written about it. Once you hit your number, just for your own emotional well-being, spend it or give it away. And that's what I've been doing. But the podcast business is an incredible business right now.

12:27Max:Speaking of the podcast business, because I think a lot of our listeners are one way or other in the media business. And I think thinking of—and you're in a bunch of businesses. You're doing speaking, podcasting, newsletters, classes. I'm curious in a sort of more straightforward way, kind of how those businesses compare and how you, I don't know, where you see the growth. Like is podcasts the explosive new business or is that the legacy business and education or whatever you're getting into now is where the growth is? I have an education startup for the last seven years, venture-backed, raised$37 million.

13:00That's been a really difficult business. The disruption in education that we all thought was coming has not happened.

13:04Max:Yeah, media just got all the disruption once again. 100%. And the businesses I'm in, education so far has been really tough. It's been an uphill battle. Books, Ben, you've written books, right? I wrote a book. So you know how fucking hard it is. I can't imagine people who try to make a living just writing books. It is really hard. It is so much harder than podcasting. No offense to podcasters. Good or bad, this is done in about 45 minutes. You turn in a shitty chapter to your editor, they're like, this is shit. Start over. Yeah, I did that. I think my editor told me it was the worst first draft he'd ever seen.

13:42Yeah, there you go. Not a good day. It's really about, I'm on my sixth book now and about halfway through any book, I think, I can't believe I agreed to do this again. The newsletter business is fine. That's really my therapy on Thursday nights. I talk about everything from the valuation of Tesla to what it's like raising boys. That's more just sort of my own personal therapy. I do that every week. The speaking business is fun and hugely lucrative. That's basically me monetizing my career. But the podcast business, and you guys will find this, it's like being in the NBA. And that is, if you make the NBA, it's an incredible living.

14:19But I was an athlete in college. I was one of the 2 ,800 people who have rode crew at UCLA. And 10 of us went to the Olympics. so 0.3 % of oarsmen and oarswomen at ucla have gone to the olympics in podcasting generously 0.1 % make money there are 1.6 million podcasts 600 ,000 put out content every week the top 600 probably are not economically self-sustaining it's probably the top 100 so at ucla i had three times i was three times more likely to go to the olympics which i did not do than have a successful podcast. I would bet two thirds of the listenership and 97 % of the revenue is captured by the top 100 because advertisers want scale.

15:06But once you bust into that top 100, the margins, once you get above a certain, you know, this shit just isn't that expensive, no matter how, you know, sophisticated the bookshelf is or cool that clock is behind Max. Once you hit 100, 200, 500 grand a year in revenue, it's 90 % margin. And then the dirty trick of podcasting is that because I've been in it so long, I have large subscriber bases and my podcasts are automatically downloaded, which counts as a listen. So there's a natural mode around the business. And what I've been able to do is use my RSS feed to launch brand extensions. So Prof G Markets, which is our fastest growing podcast, Prof G's Raging Moderates with Jess Tarloff, Prof G Conversations, which basically is a call and show modeled after Frazier.

15:53and you know my first year in podcasting i think i did 70 or 80 thousand dollars in revenue and as i said this year we'll do about 20 million and once you get above a certain number the margins are just extraordinary so podcasting has become a winner take all uh industry but if you're fortunate to be one of those that's been in it a while it's a hugely prop these are hugely profitable small businesses is the way i would describe it yeah it's interesting the advertising

16:16Max:business kind of i feel like was out of fashion for a while but this is the nice thing about advertising is that the margins can be great once you hit a certain point. Well, just to talk about real briefly why podcasting is the fastest growing ad-supported medium, and that is advertising has become a tax that the technically illiterate and the poor have to pay. If you're watching a lot of advertising, it means you're 76, white, and watching MSNBC waiting for the next opioid-induced constipation medication ad to come on. It is not a good business. Only old people or the poor are being subjected to ads.

16:51The majority of young people with any money are watching Netflix and on Spotify. But podcasting is one of the few mediums where people will endure the ads. And the average age of an MSNBC viewer is 70. They know who they're voting for. They know what car they want. They're not spending money on stupid shit to signal their worth as a mate. And advertisers hate those people because they're rational. What they want is young people in their mating years who make stupid decisions and buy high-margin shoes and coffee and stupid cars. That's who they want to reach. You just described a podcast listener.

17:23The average demographic of a podcast listener is a 34-year-old male who makes really stupid decisions because they're trying to spread their seed to the four corners of the planet and trying to signal wealth and will buy stupid high-margin products. So what you've seen is advertisers have now discovered podcasting. In addition, the person who is probably more responsible for Max and Ben's income right now or your increase in your income that you'll derive from podcasting is Donald Trump. Because when Donald Trump went on Joe Rogan and instead of going on cable news, went on podcasts, that played a huge role in his election because the 40 million YouTube views, the 15 million audio downloads he got, But for Vice President Harris to have matched that exposure, she would have had to go on MSNBC, CNN, and Fox every night for three hours for two weeks.

18:13So what you're about to see, you are going to see over the next three years an enormous reallocation of capital out of local news stations, who political parties are spending money on because they assume, okay, old people watch local news to get their weather, to podcasting. Because Donald Trump showed that podcasting is the new arbiter of who gets elected. So we have seen our listenerships up 20 % this year, but our revenues are up 50 % or 60 % because all of a sudden big advertisers – remember how shitty our ads were just two, three years ago? Now it's Range Rover, right? Yeah. Now it's Oracle.

18:48So this medium is, A, one of the few mediums that people endure advertising, and, two, Donald Trump showed the whole world that this is the audience you want. Yeah, I think the podcast business was really happy when we all decided to call the last election the podcast election. And I think that that's definitely something that advertisers have picked up on. It'll be interesting to see whether the local TV ads, all the political money that goes into local TV ads will move more into digital. I mean, you know, we saw this with the mayor's race here in New York, right? Cuomo's super PAC spent a bunch of money on local TV ads and it did literally nothing because Zoran could make, you know, good viral videos that got, you know, young people excited and got 20-year-olds knocking on the door to my apartment trying to get me to vote for him.

19:32Yeah.

19:36We have to take a short break, so we'll be right back with more from Scott right after this.

19:51I was listening to your show, several of your shows this week. And, you know, you were talking about the weekend that you just had in Ibiza. And you were talking about doing Ecstasy or Mali and going to Ibiza, which I thought was so fun. And if you're in Ibiza and not on one of those substances, you might be in the minority. But I'm kind of curious, like, do you feel like because you're doing so many hours of podcasting every day And because people have kind of gotten to know you and that they kind of like you, are you living your life on these podcasts? Like how much of your life is going into all of them?

20:21And what are you keeping away from that? Is it like 90 % of your life is playing out across the various shows? And I don't know. Where's the boundary, I guess? Well, as you've highlighted, my boundaries are probably a lot more dotted line than most people. Yeah, look. I live out loud on the podcast. I think of myself as fairly strategic and a lot of the content I put out there it does fall under the auspices of some sort of strategy even if it's flawed and I think the biggest strategy or the white space that I try and occupy that's just huge open field is for a straight white man to talk about his feelings and the content that gets the most reaction hands down is when I talk about I'm a six-year-old man that hasn't gotten over the death of his mother and I talk about it.