No Mercy / No Malice: Quitting Time

0:26Race the rudders! Tonight on NBC, Jimmy Fallon and Bozema St. John host a highly anticipated new competition show. I hired 10 creatives from all walks of life. They will be battling it out to see who can impress the world's biggest brands. This is a huge opportunity. This is the battle for the next big idea. This is not play play. We're spending millions of dollars. I'm so excited to embark on this adventure with all of you. Make the best idea win! On brand with Jimmy Fallon. Series premiere tonight on NBC. I'm Scott Galloway, and this is No Mercy, No Malice. Our society celebrates grit and perseverance.

1:08What else deserves attention? Knowing when to quit. Quitting time, as read by George Hahn.

1:20Few virtues are more celebrated in America than perseverance and grit. Commencement speakers offer a similar battle cry. Never give up! Jesus, what bullshit. Entrepreneurs aren't voted into the Hall of Fame unless they have a story about mortgaging their house to make payroll or cleaning the first apartments rented on the platform. Sir James Dyson made 5 ,126 prototypes of his bagless vacuum cleaner only to be rejected by every manufacturer in the UK. Jack Ma was rejected by Harvard 10 times. Grit is great. Perseverance is a virtue. But narratively, it's overrated. Greatness is a function not just of grit, but of talent, luck, where and when you are born, and knowing when to quit.

2:18Don't quit. Reboot. Quitting is onwarding. The point is that similar to not quitting, quitting is also a virtue. In fact, it's a necessity. The most successful prehistoric peoples were willing to leave a place when they observed a decline in prey or a change in the weather. Most CEOs have one thing in common. They are quitters. Specifically, your career trajectory will be steeper if every several years you switch jobs. Strangers from a distance find you more attractive than co-workers who can't help but look at you through the lens of when you join the firm. Our editor-in-chief at Prof G is an uber-talented young man straight out of Yale who needs guardrails, except he isn't.

3:12He's now a 51-year-old seasoned exec with several master's degrees. We've been working together for 27 years. Anything that offers substantial rewards comes with risk, a high likelihood of failure, which means you'll need to make several appearances at the plate before you connect with the ball. The top scorers in the Premier League miss half their shots. Great players, like great entrepreneurs and leaders, see the ball go wide, shake their head, and move on. If you want to be successful, you will likely need to quit the majority of your jobs, homes, friends, and investments. Your jobs, locale, investments, and relationships are commitments, not suicide pacts.

4:03What get labeled overnight successes rarely are, and the best way to become an overnight success is to work your ass off for 30 years. Most hugely successful entrepreneurs didn't hit it on their first venture. Mine was pushing a rubbermaid service cart full of VHS tapes for rent to law firms and ad agencies in L.A.'s Century City. Ever see Cousins or Turner and Hooch and work in the Century Plaza Towers in 1989? If yes, we've met before. I quit when my inventory of 1 ,100 tapes was stolen from my mom's garage. A better frame or narrative? I onwarded my firm, Stress Busters Video. It was acquired when I discovered my mother had homeowner's insurance.

4:52A big data study of 46 years of VC investments found prior failure to be, quote, the essential prerequisite for success, unquote. The key is learning from each mistake. Startups have a one in ten chance of success. That sounds intimidating, but really, it's exciting. because if you have the emotional resilience to start seven companies, you're likely to be the founder of a successful firm. I've started nine businesses, and most didn't work, but they all taught me something. My biggest professional failure was Red Envelope. Yes, we were backed by Sequoia Capital, Chanel, and Westin Presidio, and went public.

5:39But due to all that success, I didn't quit soon enough. It took more than a decade to fail. Brand Farm, an e-commerce incubator, was much less successful than Red Envelope. It was a bigger success for me, though, as it started and ended in just nine months. I closed the Series A in November of 1999, i.e., bad timing, saw the writing on the wall soon after and shut it down. In 2010, I founded business intelligence firm L2, bootstrapped it at first, then sold it in 2017 for$158 million, 27 months after our first and only round of financing. If success is the best thing, failing or quitting fast is the next best thing.

6:35Also, keep in mind that the market is bigger than any individual, and most of your success or failure is not your fault. Be humble when things work and willing to forgive yourself when they don't. Again, I'm not disputing the importance of perseverance. Quitting isn't the opposite of persevering. It's the raw material. Dyson's 5 ,126 failed prototypes were only possible because after each one, he shrugged, learned what he could, and put it aside to try again. That's 5 ,126 little quits. We have a mythology where the hero never gives up. Come back with your shield or on it, Spartan mothers told their sons.

7:23This attitude gets us in trouble, as people caught flailing have a map that only depicts one thing and one direction, the higher ground directly in front of them. Elizabeth Holmes famously said there was no plan B. Well, turns out there was a plan C, as she couldn't fathom B. Plan B was a bright future after starting a firm with a bold vision. Sadly, her prototype, like those of several hundred other tech firms, didn't work out. In America, we'd rather you go to jail than come home without your shield. I've seen marriages fall apart under the stress of one partner chasing an unrealistic dream, and companies go under, unable to pay employees, suppliers, or the federal government, like payroll taxes.

8:16The challenge is knowing which part of the script you're in. Are you at the moment where if you dig in, your perseverance will pay off? or are you somewhere in the first 100 minutes of the movie experiencing just one of a string of failures? Math offers a hint. You're likely to experience many more failures than successes, so if you know nothing else about your situation, be open to the notion, gasp, that this may be one of the failures and most important, that you and humanity will survive it. Quitting often requires walking away from years of invested time and capital. Our brains aren't wired for this.

9:04We're unable to recognize that sunk costs are sunk. One study asked participants to imagine they had bought non-refundable tickets for two different weekend trips, one costing$100, the other$50, but they'd inadvertently bought them for the same date. The$50 trip would be more fun, they were told. Which trip would they take? Irrationally, 54 % of people said they would go on the$100 trip. We hate walking away from an investment. Semi-quitting, i.e. diversifying, is a critical skill in good times as well. On the boards of startups at every subsequent round of financing, I encourage management and employees to take some money off the table.

9:57And increasingly, this is an option for small growth firms. It's amazing how the power pendulum has swung from VCs to founders. When I was starting companies in the 90s, VCs and bankers wouldn't tolerate this. Quote, that would send the wrong signal. Aren't you in this to win? Unquote. Quote, pro tip, if you have 80 plus percent of your net worth in one asset and people try to stop you from diversifying, they do not have your best interests at heart. It's a useful exercise to assess the underpinnings of any success you've enjoyed. For me, it's been three things. One, being born in America in the 1960s.

10:44The University of California, Pell Grants, the microprocessor, capitalism, and a tolerance for failure. Two, my mother's irrational passion for my well-being. Despite struggling with depression and anger, I've always been confident. I believe this is a function of an impressive person telling me every day in a thousand ways that I was wonderful. And three, I inherited the lever gene from my immigrant parents. My dad left Glasgow in a household of violence and alcoholism. My mother left London when her two young sisters were still in the Jewish orphanage in London. Among my close friends from college, I am not the most talented and we all had similar credentials.

11:34I'm one of the most successful professionally, as I was the only one willing to leave L.A. Investment banking in New York, starting tech firms in San Francisco, teaching in New York City, entrepreneur again living in Florida, now media, best description I can come up with, and living in London. These moves felt risky at the time, but they pale in comparison to the courage it took my mother to board a steamship headed to Toronto at 24, armed with an 8th grade education and 200 quid. Five years later, married and seven months pregnant, she left Toronto for San Diego. My parents' robust analysis of where to move?

12:20A. They read in the newspaper that San Diego had the best weather in America. I'm not suggesting you be reckless, get divorced, and head for Key West. Even Cersei Lannister had a high council and a hand, senior advisor. Spoiler alert, she stopped listening to them. Everyone needs their own high council. and you should not make any big decision without the benefit of their input. It's difficult to read the label from inside the bottle. However, the thing that often holds back people who are emotionally strong and talented is their hesitancy to leave, to quit. It's a vastly underrated strength. I just purchased tickets for the Carabao Cup.

13:10Tickets increased in price by 20%. when Liverpool manager Jurgen Klopp announced he was leaving the club. Liverpool's manager is quitting with his team in first place and his stature enhanced because he didn't feel he had the energy he owed the team. And the fans love him for his integrity. That's a form of strength. Nobody is paying as much attention to your failures as you are. So fear them. but don't let them paralyze you. When you do fail, don't feel you need to excuse them or blame others. Being gracious in victory is admirable. What's harder, but can pay greater dividends, is being gracious in failure.

14:01Express gratitude to everyone who believed in you and demonstrate grace to those who didn't. Shame and fear of embarrassment often hold people back from leaving and leading a better life. Carl Sagan's insight helps liberate me from that angst. Quote, We are mites on a plum, on a planet circling an unremarkable star on the outskirts of an ordinary galaxy which contains 400 billion other stars and is one of 100 billion other galaxies. Unquote. Nobody you care about or who cares about you will be alive in 100 years. Nobody will remember your successes or failures. To let fear devour your short time here is not to understand the most basic law of the universe, your insignificance.

15:03Why would any of us not enjoy ourselves and not love others with abandon? There's a wonderful line in the film Men Up. The lead character believes he knows the meaning of life. We're all just walking each other home. On your way home, i.e. success, reward, love, the key is not knowing or sticking to any one path. At 18, I was certain I was going to be a pediatrician living in Santa Monica. But investing in relationships so you'll know, no matter the route, there will be people walking with you.

15:44Life is so rich.