What Actually Motivates People, and Is America Losing Its Edge?

0:11Welcome to Office Hours of Prop G. This is a part of the show where we answer your questions and we just might feature it in our next episode. Question number one, I have not seen these questions. Our first question comes from Reddit. Jackie on Hudson says, Hi, Prof G. I'm writing to you about the subject of motivation. As a mom of two boys myself, I find that they are surrounded by lots of distractions. Do you think that desire is hardwired or can be learned? I know not growing up with a lot of money has been a huge motivator for you. Is there common ground that you see in many of your young hires?

0:47Thank you for your time and congratulations on your book. That's a nice question. Jackie, so let me be clear. I'm not one of these productivity hackers that does an ice plunge. I go to bed around 2.30 and I wake up around 9.30 or 10 in the mornings. I basically futz around. That's the thing about living in London. Everyone, you know, basically no one's awake till noon. And I usually work till about eight or 9 p.m. But I'm not one of these productivity peoples that has a list every day. So what I will say is, just as it relates to your own sons, I don't mean to abdicate responsibility or rationalize them being lazy, but I didn't get my shit together until I was 25.

1:25And I had a health scare in my family. Basically, my mom got sick and was very motivating for me. And what do you know? Science says that the prefrontal cortex, the gas on or the CEO of the brain for a man doesn't catch up to a woman until the age of 25. What did help me was guardrails. And I'll talk about three guardrails. One, I had things that forced me to get out of the house. So in college, I could have easily just smoked pot and listened to REM and Lloyd Cole and the commotions and the English beat, which are awesome, which are awesome. And stayed in my fraternity room or just occasionally gone on campus.

2:04But I joined crew and having to get up at 445 in the morning and having to push myself that hard and having the guardrails of a varsity sport was really helpful for me. getting a job, and more specifically a job where I had to go into an office at Morgan Stanley. I had to put on a tie. I had to think, well, do I really want to have a third drink when I got to get up tomorrow at O'Dark 100 and commute downtown with a tie on, and also having a boss and having that intense environment. I think you want to put yourself in intense, challenging environments as a young man, and you do have to make that decision.

2:37You can prod them, but that was really helpful. And then going out with friends, being social and having a romantic relationship was really important for me. It not only was hugely beneficial for me to have someone who just liked me a lot. I didn't have that confidence until I had, I think, I don't know, I had some of it for my mom, but it was just very nice to have a girlfriend. And also she put guardrails in place for me, you know, stop smoking so much pot or I'm going to stop having sex with you, which was very motivating. So you can't, what can I tell you? Routine, get them out of the house, ask them to limit their screen time, get them involved or ask them to get involved in as many things that gets them out of the house.

3:21I don't care if it's a church group, a nonprofit, volunteering, for God's sakes, a job, gotta make some money. If you're living at home, you gotta pay some rent. I don't care if it's being a task grabber or ride hailing, you gotta make some money. And I also find trying to emphasize fitness for mental health. And also, I mean, the reason why women are attracted to men with muscles and are in shape is not that they're attracted to big pecs. It's just they're attracted to competence and people who clearly can commit to something and show some discipline. So I don't know what the, it's all situational.

3:54I don't know if you have any leverage over your boys. If they're living with you and they're cashing your checks, you have some leverage. You have to pay rent. You need to get a job. But I think structure for a young man is super important, specifically guardrails. And also their success is going to be inversely correlated to the amount of time they spend indoors, trying to encourage them to be out as much with friends as much, meeting people. So what worked for me? Sports, a job, in office. I think remote work is a fucking disaster for young men, friends, relationships, and also just incorporating exercise into my life.

4:31These are stories a bit of privilege because I think people sometimes from low-income homes don't have that kind of access, but I grew up not in a low-income home. I call like, I was affectionately saying me and my mom were upper, lower, middle class, but I think trying to prod them or help them across those dimensions can be helpful. Anyways, two boys, what a blessing. Question number two. Hi, Scott and Ed. I'm Betty from Edmonton, Canada. At the Toronto Pivot Live event, Scott said that innovation basically stops the Canadian border. My daughter, who now lives in the U.S., argues that Canada's stronger social safety net kills ambition and makes people less hungry to innovate.

5:14My question is, how would you strengthen the U.S. social safety net without dampening the country's innovation engine or ambitious culture? And second, do you think the U.S. could adopt any parts of Canada's safety net without losing what makes its economy dynamic in the first place? Thanks. I'd love to hear both of your takes. That's a really thoughtful question. Okay, so just some data. The U.S. and Canada spend about the same share of their economies and social programs, but they do it. They spend it very differently. Canada mostly uses public benefits. The U.S. leans heavily on private ones like employer health insurance and pensions.

5:55On average, a family gets about$21 ,000 a year in support from Canadian provinces, compared with about$12 ,000 a year from U.S. state programs. When it comes to startups, the U.S. massively outperforms Canada in scale. Canada needs about 55 % more investment to produce a single big startup success. And over the last decade, U.S. venture capital exits totaled$2.6 trillion, compared to just get this 56 billion. So about 40 or 50 times the outcomes of startups in the U.S. And the U.S. produced more than 4 ,000 exits over 10 million. Canada had fewer than 200. So the trade-off is in security versus upside.

6:38Canada offers a stronger safety net that isn't tied to having a job. In the U.S., health care and benefits are often tied to work. So losing a job or a startup can mean losing coverage too. And some, America has more upside and Canada delivers more protection. And some, we're more of winners and losers here. My father used to say affectionately that America is a terrible place to be stupid. The safety net here is basically a cement ground with spikes on it, but your upside is kind of unlimited. There's some other things at play. I think, I mean, this is a multi-dimensional issue. So think about who came to the U.S.

7:13They were people trying to escape religious persecution, and they kept heading West and might have to eat their niece or nephew along the way, and they got bogged down in the Rockies. And then what do you know? The most innovative companies and the biggest exits in history are all on the West Coast. And so we have just a risk-taking DNA where people start crazy shit that sometimes ends up being crazy genius. And because of the outcomes here, it creates a virtuous upward spiral where there's just a tremendous amount of risk capital that's drawn to the U.S. In the U.S., there's$5 million for every startup.

7:44And in Europe, there's$1 million. So there's just more capital here. People are more willing to take risks, which goes to your kind of societal dynamic. And that is, for example, in Germany, biggest economy in Europe, not that innovative, at least on the startup scene. specifically you can come out you can get start getting some vocational training in your senior year in high school in germany and go to work for a middle stock whatever it's called a mid-sized company and manufacturing make 60 to 80 000 euros maybe your partner is a nurse make 120 000 euros 140 and you can go to a beer garden that also has a trampoline park and get a reasonably priced apartment and have a nice life.

8:25So the downside, you can have a reasonably nice life, middle-class life on not a lot of money in Germany. At least it was that way a few years ago. I don't know if they've been impacted by the same rampant inflation we have around education and housing. But what that does is it creates a bit of a disincentive around taking big risks. So there's definitely a downside to a social safety net and a lifestyle where you don't need to take these risks. Whereas in the U.S., everybody thinks, okay, if I start the next big company, I might in fact be on a boat with hot models and be speaking to Andrew Ross-Organ at the deal book conference and be doing ketamine with the wealthiest man in the world, whatever it is.

9:05The upside here is just so huge that people, and the downside is so fucking ugly. And every day, 210 times a day you're notified by you get someone vomiting their faux wealth on your phone. So it creates a lot of motivation. I also think it creates a great deal of anxiety. I'm not sure we should have the same social safety net as Europe or the U.S. where people are somewhat doing trade-offs around should I work, should I not work. Universal child care, in my opinion, should be also a national program because you can do it at scale, deliver it more efficiently, more effectively, and also draw more women into the workforce or more domestic partners or both the husband and the wife or the husband and the husband, there's my land acknowledgement, into the workforce because Americans work.

9:51I think that's one of the reasons why we're so successful as work is kind of central to our brand, even though only 160 million of 350 million Americans actually work. That was a lot. So how do we relieve some of the anxiety while not removing the incentives, but I don't want this to be a Hallmark Channel. We do believe in winners and losers here. And I'm actually a fan of not having the same level of social safety net that disincentivizes work as they have sometimes in Europe and in Canada. At the same time, though, I don't think a cancer diagnosis should mean that you're about to go bankrupt.

10:27Thanks so much for the question. We'll be right back after a quick break.

11:00Thank you.

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12:18Welcome back. Our final question is from Clay Davis on Reddit. They say, what do you think about the effects of private clubs and the long tail effects of a community having gathering places for people of different economic means? Wow, that's a good question. Private members. Okay, so just some data here. Demand for private clubs is rising. About 60 % of clubs say they grew membership in 2022 and 2023. For example, Soho House with over 180 ,000 members across 40-plus locations. They've stopped admitting new members in LA, New York, and London because they're simply too crowded. And now they're going private in a$2.7 billion deal after going public in 2021, which is interesting because the hard part about this business model is it's based on not scaling.

13:01It's based on keeping it smooth. Membership clubs should not go public because implicit in going public is the notion that you're going to continue to grow. Now, they could argue they're going to grow geographically, but the whole point of a members club is that you want to get into clubs that you shouldn't get into and that everyone there is more interesting, richer, or hotter than you. That's the whole point of a members club. Even so, the money is real. The private club market hit about$32 billion in 2024 and is on track to reach$59 billion in 2033, roughly 7 % annual growth, outpacing most of the hospitality industry.

13:36So let's just do a review. I'm absolutely, I love this conversation because I'm obsessed with these things because I'm a, what's the term? Douchebag. I like to go somewhere where I know I can get a reservation, where I can get in, where the crowd is curated. If that sounds obnoxious, yeah, but fuck it, I've worked really hard. What does it mean? Look, it's capitalism. And as people hurt or they want to divide into little tribes, they want to find their people. And it starts in high school, then it goes on to college. Basically, life is just high school with different apparel and different price points.

14:10So this is going to happen. It started in the UK, these members clubs. It's moved to the US. Look, they're going to happen. So to say you don't like it, well, you don't like capitalism. I do. There is a part of it that bothers me in the sense that I worry, where do young people who aren't working for a hedge fund or Google, where do they go to meet when the most, quote unquote, attractive or fortunate or people with rich parents get to go to these super cool places and then the other 90 % just don't have access. And when I was in New York for the first time, when I was a younger man, I remember going down to like the shark club with our friends.

14:47We'd like plan a strategy for how we were going to walk up and what we were wearing because it was face control, which is obnoxious, but you could potentially get in even if you weren't, they didn't have members clubs. It was just, you tried to get into these clubs or you waited in line, try to catch eye contact with the doorman. And there's a certain amount of skill and a certain amount of, and by the way, a lot of times I wouldn't get in, you know, have you seen me anyways? But in a way that was a little bit, even more egalitarian, even the face control, there's always going to be a selection set.

15:15There's always going to be a velvet rope around on the hottest places, whether it's through pricing, membership, or some sort of face control outside. That's just the species. We're competitive. We always want to upgrade. And so creating a natural barrier to signal exclusivity creates aspirational value and scarcity. It's just a good business model. But I do worry there aren't enough. If I were going to start a, I've been approached about starting members clubs. I'm not interested in starting a members club. I would consider starting a bar that was relatively inexpensive where people could just go and have a good time and have good music.

15:49And it was reasonably priced because I think we need more third places for people. And I was actually thinking of investing in a company called Putt Shack that also has these, I think they're called wave gardens, because I think we need more third places for people to go with their families or friends that are outside of the home. A third place is technically a place you don't work, you don't sleep. So yeah, the fact that everything's being sequestered behind a velvet rope and young people have even fewer places to meet if they're not killing it or don't have wealthy parents, it bothers me. So what could we do about it?

16:21I don't know, maybe tax credit for third places that aren't, that are open to everybody. So I think this is a problem and it trickles all the way down to our social life, specifically these clubs. So what do I think we should do? Quite frankly, I think there should be a new classification organization of, I don't know what you call it, private or like a new douchebag tax that if you're at, you know, if you're a membership at Chez Margot, you fly a private plane, you're in private school, you pay a VAT tax and that money gets reinvested in education and third places for the bottom 99 in that community.

17:00And that's a progressive tax. I just wouldn't have a problem with that. And I think you could figure out the type of establishment that qualifies for that tax. and then on the other side, give tax credits or exemptions to public schools, to third places that don't have any sort of exclusionary element to them. So what's the answer here? Let's tax the super rich and the places they go at a progressive rate. And then let's reinvest in our public infrastructure such that it's so fucking good that more and more of us have the same experience and we're all invested in this experiment called America.

17:33That's all for this episode. If you'd like to submit a question, please email a voice recording to officehoursofproptamedia.com. Again, that's officehoursofproptamedia.com. Or if you prefer to ask on Reddit, just post your question on the Scott Galloway subreddit, and we just might feature it in an upcoming episode.