Ask Us Anything: AI Effecting Entry Level Jobs + The Value of Personal Brands

0:00I'm Adam Schwab. I'm Adir Shifflin. And this is The Contrarians with Adam and Adir.

0:09And we're back. Episode 198, Ask Us Anything, where you ask us questions about business, big tech, entrepreneurialism, or anything you think we're going to help you with, and we will answer them. Mike, the chief questioner after himself is in the room. Over to you. Question one this week comes in from Dan. Given the ability of AI to automate and execute operational and administrative tasks, does this create concern for the next gen of grads and taking what was once their entry into the workforce? Your thoughts? Mr AI, I'm shocked that we get an AI question. It's a great question. Yeah. I mean, is it bad news for the person who, I don't know, was like typeset laying out, I mean, is it bad news for the scribe that was handwriting books when the printing press came out.

0:59Or the guy who was cleaning up horse manure in 1850. I think the answer to that is, well, that's maybe an even better example because the answer is definitely and thank goodness. That is a bad job. And I think a lot of these entry-level jobs, like a lot of the stuff that grads are doing, they have to do. It's not good work. It sucks. Like they go to university or... Like when I was a lawyer, it was terrible work. Like you go and do five years of university and then you get out of university and you basically do the equivalent of picking up horse when you were behind a cart. I'd say worse. Worse.

1:31As a lawyer. And so good if that stuff's wiped out. So I think the answer is yes. I think it's the better question. And then what do they do, right? What do people do and what do firms do? Because if you don't have the junior people to then become the senior people, do you have the flow of people who can actually ever become senior? That's a good question. And so I'm not, I mean, firstly, I think the mid-level people are more at risk than the junior people by the way because they cost much more money and their stuff can also be heavily augmented and also younger people are more inclined to use AI I think yeah they're more adaptable yeah I was in a this is a slight tangent but you'll get the gist of it I was in a cafe the other day that's unusual this cafe does not serve anything but full cream milk or oat milk and so that's it there's the milk do you have one of those two things I have to have full cream milk do you usually have one of those two things I usually have skim milk okay but I make the sacrifice because it's such a nice cafe okay and so these three older women came in by older I mean they were in their 70s and they wanted almond milk and there was this whole interaction between the owner and the three ladies and they very politely just like left and went somewhere else because they wanted almond milk and then the owner had a chat with me about what I thought about that and I thought he did a good job handling it and then I said why doesn't he have these other milks because it's too hard to stock all these different milks and he thinks they taste bad and he cares a lot about the taste of coffee and he's not rude about it at all he's like I completely understand if it's not right for you.

2:56Yeah. Like I'm not offended at all and he's very polite about it. And I said to him, this is my overarching thing, feel, and this is how it relates to what you just said now. I think one of the ways that you become old is not with the number of years you've been alive, but your preparedness to adapt to situations that are new and different. Yeah. And I felt like those three women, they just like reinforced being old by not trying something different or coping. and I feel the same way about AI in the workforce. If you have a child's mind and want to embrace new things and be curious, this is a great time.

3:35It's scary, but it's also incredible. It's exciting. But if you are just trying to kind of keep doing what you're doing, I think no matter whether you're senior, junior, in the middle, it's going to be bad news for you. That's my gut feel. I think the biggest area we'll see job wipeouts isn't necessarily in white-collar. You're going to see some white-collar impacts, but I don't think it's going to be as impactful as one of the most, I think the most common job in the US is driving, whether it's truck driving, cab driving. And I think that should all become autonomous, certainly within the decade.

4:05The question is how, like we've got Elon Musk having, like obviously got Waymos on the road, but Elon Musk now rolling out three more cities. So you're going to have now two significant autonomous players. There's going to be a lot of people who used to drive a vehicle and generally get paid, maybe not as much Uber, but certainly truck drivers get paid extremely well because there's a lot of skill involved in driving a truck. I can't do it. Sure. But that will become almost certainly autonomous. And that's a huge number of people who will need to find other skills and other jobs. And that will be a shock because the thing is that people that predominantly listen to this podcast work in roles where there's like a computer involved.

4:37And the people that are driving trucks, and by the way, they're earning many hundreds of thousands of dollars a year. It's not an easy job. I know you know. Turning a truck around is incredibly difficult. It's just very stressful. Lots of time pressure. Yeah. And so the thing is that they're going to be shocked. because they're not fixated with AI. They're not sitting in front of a computer. They're probably not listening to the podcast. They should be. Truck drivers listen up. Yeah, well, we're their biggest supporters. And they're in the car anyway. Just put us on. That's true. Don't say that because you'll do a nine-hour podcast.

5:07The city of Melbourne truck driver's got to handle. So I think young people, junior people, are going to need to find different things to do. But junior people are hungry and cheap. So I'm always going to be employing junior people. I think it's the middle ones that are more at risk. Yeah, that's a great point. And as Scott Galloway says, AI is not going to take a job. Somebody who understands AI is going to take a job. And you've talked a lot about it on the pod. Just start understanding how to utilise AI and you'll be fine. Just maybe not in the same role you're doing now, but you'll be fine.

5:39And I think that you're answering the question. The role will be better. You'll do a better role. The stuff that AI is doing is the stuff that sucks. Yeah, it's high repetition, low intellect. Yeah. So I think, yeah, like I think the, it's much too early to tell what the long-term effect of AI is going to be on the workforce. Yeah, I think we can pretty safely tell that driving jobs are in trouble. Other than that, it's hard to tell, I agree. Which is less the kind of AI that we're talking about here. It's probably LLM, like large language model-based stuff. And that is more computer vision and sensors.

6:11But AVs is highly AI dependent. Yeah, for sure. My question number two. Great answers, guys. question two comes in from Lucy. What do you think the value of a personal brand is in a social media centric world? Are you better off building your own personal brand and sharing your expertise through that rather than building another brand? Well, that depends. So what do I think the value of social media is? Negative to society as a whole, but very positive to selling stuff. to individuals using it. Yeah, I don't think it's great. But then the quick - No, I mean, sorry. I don't mean using it like Instagram.

6:52I mean using it to sell stuff. Yeah, so I think - We grew this podcast on LinkedIn, essentially. It was our main channel in the market. So we benefited significantly from it. And way more people will know what would loosely be called our personal brands than the podcast brand per se. Although that's changing to a degree, I think. Yeah, but originally, definitely people that were looking for it would have searched your name rather than searching for it. Or they would have seen me post about it, yeah. And so, you know, personal brand is not a new concept. Just those words used in that strange way is a new concept.

7:26People used to call it reputation. Yeah, absolutely. Maybe that would be another word for it. Totally. It's exactly what it's called. And so what is the benefit of a reputation? And now you get much more ability to broadcast your reputation. And so obviously a reputation matters more when more people are aware of your reputation. but I don't think the fundamentals have changed, which is if you try to fabricate a dishonest reputation, you can substitute personal brand for that word, people see through it and that damages your reputation and then that makes you less desirable and less believable.

7:58And if you craft an authentic reputation, then that's a good starting point. But then if you don't know what you're talking about, that's not going to, people will work it out eventually. And so my answer is I'll use LinkedIn as an example, as the social media I'm most familiar with. Yeah, you're very familiar with that. Very familiar. Although I haven't been as familiar recently. I think the thing to do on LinkedIn is to go and write things that are not vacuous or self-congratulatory or just like, you know people make fun of Donald Trump because Donald Trump behaves like what he thinks a rich person would behave like.

8:38And like now he is rich, but it's not exactly what rich people really behave like right like they don't have gold toilets as a general rule maybe louis the whatever had one but they didn't go well for him right and so um and so i think that the trick is not to behave on linkedin the way you think someone super professional will behave but just try to be respectful and authentic in the way you interact and i think that is the best personal brand slash reputation to cultivate and i think it's important in this age to i'm always thought if you're trying to build your brand on call it's called We'll just use LinkedIn as the proxy because we're not really going to talk about Instagram and TikTok.

9:11It's not our thing. Which is the main place people build. It certainly is, yeah. Like influencers. Yeah. Which, I mean, like that word. Can we just say? You hate that word. That's a terrible word. I don't mind it. Well, what does it mean, influencer? It means it influences people's buying behavior. Good ones do, for sure. Absolutely do. I know, but there are an awful lot of people, when you read about them, they say, I'm a this and an influencer. Content creator. Yeah, content creator is a little bit different to an influencer, right? Like they make content, but it might not be their channel that they pump it out across.

9:41Yeah, usually it's one and the same to a large degree. I would use a lot of content creators and pay them to create content for brands. But I don't really pay them for their reach because it's not that good, right? We tend to do both. Use both, yeah. And so the people that you use, they probably do influence decisions. But it seems like there's a lot more people claiming to influence than people being influenced. and so I just think a lot of this talk about influencer is not really influencing I think in terms of like generally travel influencers because travel is important like travel people don't know what they want to do they don't know where to go they want a trusted source and going to a salty lux for Maldives for example who's probably the number one Maldives influencer who works with us quite a lot when she posts about Maldives and she'll create the content she'll video and very high quality like as high quality as any media publisher when she posts to her channel which is significant and we usually do as a collaboration that's creating content and it's influencing people She's the top of the pyramid.

10:35Yeah. She's the top of the pyramid. Absolutely. And so I completely agree with you on that. I'd almost call it like a travel celebrity, right? I'm talking about... I know, but the base of the pyramid is very wide. Forget the base. The base is... But that is where most of... Not Lucy who's asking the question, but the majority of people that call themselves influencers, you would have seen this happen. You see people going into a store and they start videoing themselves in the store, on the phone, doing all sorts of stuff. That's not an influencer. So that's someone yelling into the vacuum of space, right?

11:04And so I just have issues. My main comment and view is this. If you have something, if you want to post because you like posting, then I'm all in favour of that. And just post authentically and respectfully and see if people are interested in what you're posting. And if you're trying to create this fabricated brand because what you want to be is an influencer and not have to work, then I think that largely backfires. And it works for some people. But in the end, the inauthentic, they get caught out in the end. And I would be much more inclined to say to people, try to represent accurately the best version of who you really are as building a brand.

11:45And as for creating a different brand, I think if we would have tried to build this podcast, not talking so much about who we were and where we came from, it wouldn't be as successful. I think the media landscape today is that individuals using their own reputation and reach slash personal brand is a more effective way to build something than the more traditional way of trying to build it around a new brand. I think if you think about it, if you go back to first principles here, if you're trying to be a content creator slash influencer, you really can provide two things to the viewers. One is entertainment.

12:20So you could be providing, you can be an influencer who shows, I'm going to Coachella and this is the video, I'm going to Bec Judd video on Coachella. I find that, I'm happy to watch that. It's like entertainment for 30 seconds. And people really do buy what Beck Judd is wearing. Yeah. Which, by the way, she's not very well known outside Victoria. And Perth. Oh, and Perth, yeah. The other thing you can do if you're not creating entertainment, you're educating people. So you could be saying this is – and there's a limited number of people who can do this, whether it's on Twitter, whether it's on X or Insta or TikTok.

12:49If you're educating someone how to cook something or educating somebody on business or like you do on politics. So I think if you're doing one of those two things and you've got some credibility with the information you're providing, then by all means go do it. But unless you're doing one of those two things, it's kind of pointless. The biggest influencers, I think, on social media are not product influencers. They're opinion influencers, mostly for worse and sometimes for better. They're people that go and espouse their views on particular things, often politics. The algorithm rewards people that espouse extreme views.

13:25Those people go and pick up 5 million followers, then they spout their hate of one or another. The Tucker Carlson to those people. Yeah, well, Tucker Carlson is a mainstream celebrity because he was on cable TV. He was on Fox. But there are people whose names, thankfully, I've forgotten. Like Nick Foyntes, for example, the rabid anti-Semite. So is he only from social media? Yes. All right, so that's a good example. The incel anti-Semite. Unfortunately, that is predominantly what is amplified from a personal brand perspective on these social networks. I think that's its whole other problem. But, I mean, overall, like, you're not going to be Bec Judd.

14:00I mean, you're definitely not going to be. But, like, someone is not going to be that. I don't mean Chris Judd either. That's true. That's true. I mean, that would be even more impressive from my point of view. And so, consequently, I think people have to be realistic. That is the top of the pyramid. The one that you work with on Meldives is the top of the pyramid. And we work with probably 100 influencers, all of which are towards the top of the pyramid. And so how much do you think the 20 most popular influencer in an area gets paid relative to the number one? 100th? Where you make money, where you can make real bankers and influencers where you start creating brands.

14:37It's the Jenna Kardashian model of creating a brand and monetizing the product brand essentially. So I've got an audience. Now I'm going to make my own thing to sell to the audience. and if we look at that in brutal business terms, because I can have these massive gross margins because I don't have to give away to someone else and also my marketing costs are much lower because I'm using my existing audience to sell to. Absolutely. Yeah, that's a good point. That's the model. That's the model that really elevates the strategy. We'll go to a super quick break. Back with our third question in just a moment.

15:16and we're back question number three michael duncan sends in our last question this week really excited to hear your answers to this one are the ever-growing communities of property investors reducing the overall productivity of this country wealth accumulators over business builders over to you what's the remind me the guy wealth of nations adam smith well this is adam smith's life thinking isn't it it's that um people getting rich is really good for the broader society makes everyone richer provided they make their money from productive assets and property is not a productive asset and probably if adam smith was here at this table which would be a great and probably weird interview, he would probably espouse very heavy taxation on property gains, I guess.

16:10I mean, you would know more about this than me. I know a bit about Adam Smith, but I wouldn't say I'm an expert. But I think the point is valid and that Australia has a massive productivity issue. And especially if you look at Sydney property, property prices are really driven by the marginal investor and how much the marginal investor slash the marginal home buyer, obviously, is willing to spend. And we have a situation here where people use incredible amounts of debt to bid up the price of, as you say, a passive asset that doesn't generate any real income other than the rent it generates from the shelter.

16:38But it's not a productive asset. It's not a factory that's making stuff and significantly improving the livelihoods of people who work in the factory and people who buy the good. You should say, what do you mean when you say productive? What does productive mean? I would call productive something that creates a positive externality. So it produces something that you can sell or creates value. So if you look at, and I saw the great piece on the value that, talk about Tim Cook's reign at Apple. Tim Cook recently announced his retirement. And you look at an iPhone, say iPhone costs$3 ,000, and Apple makes$1 ,500 of that in profit.

17:11But the value of that iPhone to society, so I wouldn't pay$3 ,000 for an iPhone if I wasn't getting$5 ,000 of inherent value. So you've got that arbitrage of value, plus all the employees are getting value. That's right. Plus all the people who supply, like the Foxconn's are getting value. So there's a whole value chain being provided by this iPhone. that's well in excess of the$3 ,000 price, it's probably like$10 ,000. That's a highly productive asset across the world. A home, by example, is someone you spend money and yes, you can live in this home, but other than living in it, which can be substituted by another home or another type of home, there's no productive benefit from it.

17:43And so what about when people say this? What about when they say, well, this is some productivity that comes out of the home. One is all of like, I'm saying builders, builders, real estate agents, all of those industries. And then the second thing is when I sell it, especially if I sell it to a foreign buyer, then all of that money comes to me and then I can go and deploy that money inside the economy, buying lots of coffees and avocado. What's the export argument? That you're exporting property to a foreign buyer. That's right. You can argue, yes. But there's a finite pool of property to export, right?

18:15It means somebody else has to buy another property and the price goes up. Yeah, but what about the first argument? That's a better argument. I think it'd be hard to make a case that there's productivity in real estate agents because that generally attacks on the transactions. So I don't think there's any real value being created there. Like, they create value for the vendor. I mean, it's a horrible thing for you to say, but it's economically hard to disagree with. But I said that about lawyers, which I was one. So it's not just I'm saying that. But like, if you look at real estate agents, they create value.

18:39I've been on the record vendors should use real estate agents. They get an uptick. But I don't think they create value to society as a whole. It's a transfer of wealth from the buyer to the seller. So that's what I mean about real estate agents. In terms of builders, yes, but the question is, could that builder be building something more productive than simply shelter? A factory. Yeah, a factory or a commercial shop or whatnot. So there is a small amount of value, but relative to what otherwise could be created, I think housing is a fairly unproductive asset. Don't forget, it also depreciates.

19:07Buildings depreciate over time significantly. You've got to rebuild it. So that's a problem for the buyer. We're continually having to reinvest in this asset. And Australia simply spends too much money on court land. And we're talking about this a lot. Whenever a government, not every bit of government spending, but pretty much most government infrastructure spending, especially public transport, that gets capitalised in the value of the land. So landowners benefit from government spending. So there's massive transport. So when they built a station at Crow's Nest in Sydney, a metro station, all of the property around that station went up in value.

19:42And the rents go up as well. And the rents go up. So it's bad for the people who are renting. They've got to spend more. It's good they get closer to the station. They've got to spend more to get that. The people who benefit are the owners. And that's where it's such an unproductive way to accumulate wealth versus creating a business and employing people, like employing 500 people at Catapult. That's a far more productive way. That's a good way of saying it. So if I make a$2 million profit on selling a property, almost nobody has benefited from that except me. And if I make a$2 million and if it's my own house, I didn't even pay tax on it.

20:15And if I make$2 million of profit from running a company, I've number one paid tax on that$2 million. But number two, lots of other people have benefited as a consequence of me doing that. And so I think it is impossible to argue against the notion of this question, which is, is the fixation with wealth creation on investment property in Australia negative to overall productivity growth in the country? Absolutely it is. Because also, like debt, debt is a good thing in productive assets. It gives you leverage for more productivity. but debt in this country like so much of it is skewed towards property investment the other thing i dislike about property investment this is probably more of a personal productivity than necessarily an economic argument but if you look at someone who makes money in business they've had to outsmart outwork outwit maybe get out luck against other people who are doing the same thing versus if you invest in property all it is is you've probably got lucky you've used debt for the bank and the and the price has gone up because the government's built a trade you took I mean, you got rewarded for the risk that you took.

21:16I mean, not in buying your own home, but in buying an investment property. Like, there was a risk it would go down. There was a risk interest rate would go high. But there's no skill in buying a property. You're just going through emotion. I'm not sure I agree with that. Like, I'm not really much of a property investor, and I should have been much more of a property investor. But, like, I think figuring out which property to buy, where is a skill. But think of all the boomers who invested in Sydney 30, 40 years ago and have made 10x money on that using debt. That is lucky. There's no skill involved in that.

21:40That's not at the top of the luck curve, though. There's a lot luckier things that people have made more money. I take your point. The luck skill curve it is. Every person in business has had a lot of luck and a lot of skill. Don't get me wrong. But property is mostly luck and very little skill. Yeah, mate, you mean passively holding property. Yeah, exactly. Yeah, I largely agree with that. I think that's getting harder, is my guess, when I look at it. I'm not talking about property development, which is very different. That's hugely risky and takes a lot of skill. There's a bunch of stuff you've got to do.

22:08Yeah, passively buying and holding property. Buying an investment. I'm talking about buying one or two investment properties. There's very little skill in that. And if it goes up, it's generally just due to good fortune. Especially because, it's my last thought on this matter, like if you really look at when property rose in Australia, there was a period from the late 90s to the mid 2000s where property was rising 12 % to 15 % a year. And a huge chunk of property growth over the last 30 years was in that window. So not only do you have to be lucky with property, but if you held it in that window, So that's where you got a lot of the growth.

22:42Absolutely. And if you look at property prices, they follow money supply almost identically. So what you've seen is as the government prints more money, inverted commas, property prices go up. Not a great amount of skill in just following the money supply. You could also just bought gold the same way, I guess. But that was three amazing questions. As always, smartest listeners in the world. Listen to the Catrines podcast. We'll see everybody on Tuesday for our big episode. Thanks for listening.