The Next Billion-Dollar Bitcoin Idea: Inscriptions and Ordinals

Transcript

This isn't your average business podcast, and he's not your average host. This is The James Altucher Show. Today on The James Altucher Show. Scott Galloway has successfully been predicting the future on my podcast every single time he's been on. So he came on when he wrote the book before about Facebook, Amazon, Netflix, Google. He wrote a book called The Algebra of Happiness. And now I don't know how he got this book done so fast and got it out there, but the book is called Post Corona From Crisis to Opportunity. This book is the map of what's going to happen next in the economy, for the virus, in every industry from education to technology to healthcare and on and on. Scott is so good at kind of seeing these trends and how they will play out, and it's always a pleasure to talk to someone like this. He's so intelligent. Without further ado, Scott Galloway. Once again, Scott Galloway on the podcast, author of The Algebra of Happiness and also author of the very prophetic The 4, which was about all your favorite companies, Amazon, Netflix, Apple, Facebook. Is that is that the 4? I think I got them. Yeah. Amazon, Apple, Facebook, and Google. Google. Right. Yeah. How can I forget that? Can't even remember four numbers anymore. How's it going? Good. You forgot about you forgot about the book that's coming out November 24th. Why do you think I'm on this Joey Bag O' Donuts podcast? I'm here to pimp my new book, James. I I know because I've read it post corona from crisis to opportunity. And, also, I was gonna ask you, how'd you get the book out that fast? Like, I got a book deal before the pandemic. It's not coming out until February. How did you clearly, you you got the inside track. So I I have a great book agent, Jim LaVine, and we went out with the idea and almost a finished manuscript. Usually, it's money as the lead criteria for how you select your publisher, how much money they're willing to give you in the terms. And I I only had one criteria, and that is how soon can you get this out because, obviously, this is perishable. And Amazon came back with a a great deal and said we'll get it out fast. And then my publisher that did my previous two books, Penguin Portfolio Random House, great name that rolls right off the tongue, came back and said they'd match it. And then, and I I think this is interesting because you write books, but, typically, it's it is a weird industry. From pencils down, it's at least 6 months. And what we did was we printed out all the transcripts from my podcast, from my blog, tried to string it together with a narrative. I have a team of about 5 people working on it, came up with a 250 page narrative, and then I spent basically all of August editing, adding, and trying to turn it into something turn it into a book. But we took a bit of a shortcut and adopted other mediums and used a different way of writing a book. But this will be record speed of anything I've ever done. By the way, I don't think the way I'm assuming then you're saying you posted articles in different places, then maybe stitched them together and rewrote a little to kind of make it seamless as a book? Well, yeah, but it was even more than that. They took all of my Prop g podcasts and pivot podcasts, and they would print out the transcripts. And then they would use human and, or, human and, organic intelligence and some form of artificial intelligence to group all that text into 3 different buckets, basically, the markets, education, and society. And then we would start, and then we tried to turn it into, a narrative. And then I went back in. You know, the initial draft of 250 pages read like a run on sentence, and I spent a ton of time editing and shaping and, you know, all the stuff you go through with a book. And, of course, you have those 5 or 6 moments anyone who's written a book is like, why the f**k did I ever agree to do this again? By the way, that happens on every single book I ever write. And then I finish the book, and I write the next one. It's like that hormone that supposedly is released with women when they give birth. It makes them forget how painful childbirth is. Otherwise, they would never do it again, and the species would go extinct. Same thing happens with bugs. But the speed here was key because I thought I wanna get this out as quickly as possible. But, yeah, this, this was short and violent. And as usual, you make predictions about what's gonna happen next, what's gonna be disrupted next, what's the future of different industries. It's all good. But how are you doing? How did you how did you do during you came on the podcast in March where we talked about the pandemic a little, but what's been going on? Did have you enjoyed life? Did you get sick? You know, you don't like to you don't like to say this out loud, but if you if you're blessed with good relationships, if you're blessed with some level of economic security, if you're at a point in the trajectory in your career where you're on the back nine as opposed to the front nine, you're living your best life. It's just not and I and I feel I I don't take any pride in saying that. But for a lot of people, COVID 19 has been some inconvenience vastly overweight by an increase in wealth. I own tech stocks, which have rocketed up. More time with Netflix, more time with your kids, less commuting. My life was 200 days on the road. I traveled a quarter of a 1000000 miles a year. I know you do speaking gigs. I do speaking gigs. I was in the client services business with l 2. So I used to commute from Florida, where we both are now, to New York, Sunday through Thursday. I've taken 10 or 12 hours a week of airports and planes out of my life. So, you know, again, I'm conscious of the fact that this is white privilege, extraordinary, blessed, self conscious saying it. But, if someone had said to me 6 months ago, we want you to spend a ton more time with your kids, a ton more time watching, you know, The Queen's Gambit and and The Mandalorian, And we want you to have time to write a book, and you can do all your talks and teaching. I'm teaching 280 kids in 2 hours remotely, and you can spend a ton of time at home. I would have said, where do I sign up? Having said that, knowing a quarter of a 1000000 Americans have lost their lives, obviously, is incredibly devastating. I don't know what lies around the corner for all of us. But, yeah, the last 6 months, I don't wanna pretend that it's been rough on me. It hasn't. It's been it you know, quite frankly, it's been a it's been a nice time in my life, and I I I cringe even saying that. How about you, James? Yeah. I mean, I'm similar. I mean, I work on almost every project I do. I work from home, and the things that I do outdoors were all closed down. And I have a wife and 5 kids, and so I've it's plenty of people to keep me company. And and you're right. Like, I well, here's what happened, though. So I probably saved about 30 hours a week on things I would normally do outside the apartment that I no longer had. But you tend to fill up the time. Like, I ended up writing 2 books instead of just 1 and doing all sorts of other activities. So it's been good for that as well. Although I've missed other things, I've filled up the time almost too much. It's an opportunity. Everyone has an opportunity to say, alright. What do you leave behind? You leave commuting behind. Are there certain relationships you leave behind? Are there aspects of your career you leave behind? Are there certain elements of spending you leave behind? Like, this is an opportunity to take the Etch A Sketch that is your life and shake it and redraw some lines. I think it's a really interesting opportunity. You know, I would say, be the man your your kids think you are, to sit down and say, there's my professional life, there's my spiritual, my emotional life, and there's my relationships. And is this an opportunity to hit a reset button and, you know, maybe leave some stuff behind? What what what was the biggest thing you hit reset on? I'm trying I I'm a I'm a I'm a selfish person, and I'm self aware to know that. I'm trying to invest more in relationships at work. I'm trying to be more generous, but I'm trying to be, you know, like I said, the man my kids think I am before they're too old to recognize I'm sort of full of s**t. I'm trying to be a more generous person. I'm trying to be less selfish and less self absorbed, and not every f**king thing that happens in the world immediately think, well, how does it affect Scott to try and absorb that and think, okay. How does it affect the people around me? Just be more mindful of other people and other people's feelings and emotion. Trying to leave some of the selfishness behind. Well, what's what's an instance you can point to where you could say that's an example? I'm trying to, there's some people in my life that, struggle with substance abuse, and I'm trying to be more supportive and mindful and less judgmental. I'm trying to move to how I help and be less judgmental. And what I found is, to date, I was this is how you should run your life. I'm smart. Clearly, you're f**ked up, and I'm smarter than you. And this is how you you know, like, tough love. And instead of just providing, love and support that's sort of unconditional. And it's difficult for me to get there because I see them making mistakes, and I wanna intervene or inject myself because I'm very good at living other people's lives for them. I've spent my whole life giving advice. So when you're good at it and you make a good living at it, you start to believe your your advice is is good. And and even if you can advise the CEO of a Fortune 500 company and get paid well for it, it doesn't mean you have any license to advise people on their life. And I'm I'm just trying to be less judgmental with some people in my life who are, struggling with substance abuse. Oh, I'm sorry to hear about the the people, but and I'm sure your advice is is good for them. But, yeah, sometimes so there there's a lot of good books about how to, particularly for friends and relatives and loved ones of people who are addicted to something, about how to basically change or help on changing their behaviors without directly saying to them, like, hold on a second. I'm just gonna get this book right here. Hold on. It's, like, 3 feet from me, but I gotta get it. This this is a really good book that was highly recommended beyond addiction. Mhmm. How Science and Kindness Help People Change a Guide for Families. Mhmm. So that was highly recommended when I was in a similar situation. So, Scott, did we do it right? Did we do it wrong? And what's next? You you write all about it in post corona, which I highly recommend for to anyone who is scared about what's gonna happen next. In some cases, you might be more scared, but let's let's talk about it. Like, sometimes when I look at the the data, I think, oh my god. Nobody has any clue the horror that is going to happen next. And other times, I'm a little bit more hopeful because I think, ultimately, it's hard to actually know. But there is some I'm probably the most scared that I've been since I've started, you know, writing about these topics. Look. Our superpower as a species is cooperation, and we've decided to put Kryptonite around our necks or whatever those things were they put around their neck with at at the X Men prison that Deadpool went to. I don't know what that device is called, that immediately assuage or emasculate your superpower. We've decided to ignore our superpower as a species. We're not cooperating. In almost any company, there's best practices. If the CFO of one company starts reporting earnings one way and it results in a higher multiple, you can bet every public company in the world within 2 quarters is reporting that. We adopt best practices. If we have a better cell phone tower made in Siemens, Germany, the Chinese all of a sudden figure out a way at Huawei to start producing a remarkably similar cell phone tower. Yet you have Taiwan with, I don't know, 60 deaths across 21,000,000 people, and yet we have in New York, you know, 26 or 28,000 deaths. There's been absolutely there's been almost no cooperation across borders around how to handle, you know, withdrawing from the World Health Organization. It's been the worst practice possible in terms of ignoring our powers as super species. So I would say as the West has done an abysmal job, and then we try and make ourselves feel better by saying, oh, the nations have handled this well. Singapore and Taiwan and South Korea, they're more compliant, which is our, basically, our bulls**t xenophobic way of saying, oh, they're pussies, and try to fall back on our macho sense of Americanism. No one. We were compliant in World War 2. When we found out that the Japanese had cut off our access to rubber in the South Pacific, we started driving 30 miles an hour. We didn't ask for a government stimulus. We bought war bombs. We converted the the Chrysler factory in 2 weeks into a factory punching out Bradley tanks. We were compliant. We have given up on citizenship. It appears to me we have, you know, or we've outsourced citizenship to our frontline workers. We have decided that sacrifice is not part of our DNA. As Americans, we ignore the massive sacrifices that people have made such that we can say bulls**t things like, I'm not wearing my mask to Walmart because that's tyranny. Jesus Christ. You want f**king tyranny? Go about 70 years back and find yourself a 17 year old boy in Germany, and then you're gonna find out what tyranny is. Anyways, I think as a species, as the west, we've ignored our superpower. And then as Americans, our superpower is optimism. And, unfortunately, our optimism has been a comorbidity. And and, look, I I just wanna sorry to interrupt, but this is what I I mean when I say I've been feeling more scared than ever. Normally, back in the 2008, 2009 financial crisis, I was on CNBC all the time as an optimist. I was so optimistic. They stopped having me on for a little while because they everybody thought it was just all doom and gloom. Like, every time there's been a crisis, I've been super optimistic until now where it there's so much uncertainty. It's hard to be you would be stupid to be just be blindly optimistic. Well alright. So Barry Ritholtz's podcast master of business, I've been on 5 times. I've been on your podcast 3 times. I think you're the only person other than Barry I've been on a podcast multiple times with, and I think you are I'm not you know, I'm I'm blowing smoke a little bit, but it's it's mostly real smoke. I think you're a clear blue flame thinker, and that is we have learned that optimism typically can bring you out of a crisis. It can bring you out of a war. If you're optimistic and get behind a war effort, it can literally win a war. It it can bring you out of economic crisis. When James Altucher goes on CNBC and says, things are gonna get better. Buy stocks. And people feel more optimistic and, you know, someone says, hey, honey. Let's go buy a Hyundai. Buyer days ahead. That can literally pull you out of an economic crisis. It can literally win wars. Optimism in a pandemic is a comorbidity. Oh, we don't need to worry. Have friends over. Oh, don't worry. We gotta live our lives. Oh, don't worry. I I I can't imagine an enemy 1 4 100th the size of a human hair. Look how healthy and handsome and good looking everyone is around me. We've gotta live our lives. Let's pick the kids up from school. Let's have friends over. Let's go out. Let's live our lives. We'll get past this because we're exceptional. We're exceptional. And guess what? The virus didn't get a memo regarding our exceptionalism or our desire to return to normalcy. And this comorbidity of optimism has absolutely been our Achilles' heel. And your your fears right now set aside some very hopeful news yesterday on the vaccine, and I'm hopeful, but we still haven't let that weigh in around the distribution and the fact this is not a very robust vaccine in the sense that you have to refrigerate it. It takes 2 doses. So set that aside. That's very exciting. We have not yet experienced a winter with COVID 19. And loosely speaking, if you look at outbreaks, if you look at hot zones, one of the key drivers and the key signals is when people have to spend time indoors. It started spiking here in Florida about the time it started getting really hot, and we all had to withdraw to air condition closed spaces. When the northeast, when the Midwest, when the rust belt, when it starts to get cold up there, this could get really f**king ugly. I mean, really world class ugly. And nobody wants I think we have to think of citizenship, and that is if you have the resources I think guys people look at you and me and think we're a little bit neurotic, and that might be mostly true. But if you have the resources to distance, and a lot of people don't, a lot of people don't have the resource. A lot of people have to throw their diabetes medication and diet Cokes and an Igloo and head out and drive their Uber. A lot of people take their jobs and their roles as health care workers very seriously, thank god, and they put themselves in harm's way. But if you don't have to put yourself in harm's way, if you're blessed with the economic security, with people at home that love you, and the ability to do a podcast or write or do things digitally, I think you have a national obligation to distance because it's not the fear of getting this thing that you should be afraid of. It's the fear of getting it and passing it on to someone vulnerable and becoming a no to transmission. And I still don't think that basic basic premise of citizenship has has weighed in. We wanna blame the administration. We wanna blame our governors. We wanna blame the CDC, whatever it might be. But I think this has reflected very poorly on a lack of citizenship and sacrifice on, call it, the general public in the US. And I think you are right to be scared. I think this is, you know, we got so distracted with the election that we're looking up and saying, oh, record levels of infections, record levels of hospitalizations, which inevitably may not lead to record levels of deaths, but we are losing more people per day right now than we have lost in any crisis. We are losing more people per day right now than we lost in World War 2, the AIDS crisis, the Vietnam conflict. We have never had this velocity of death in any crisis in America, and it kinda feels as if we've said, okay. The worst thing to happen to us, James, is that the virus doesn't have brown skin or wear a turban. We would absolutely rally around that. If the enemy if the enemy was killing a 1,000 people a day and worshiped a different god or had different colored skin, you wouldn't believe the sacrifice we would all be capable of. But because it's a pathogen, because it involves science, because it's something we can't wrap our head around, our response has been incompetent, if not reckless. It has really exposed the soft tissue of America in my view. And the and it it exposed something else, which you, you know, you mentioned quite a bit in your book, which is that the economic lockdown after 2 months, so I'm talking basically toward the end of April, early May, basically, the entire economy had collapsed. I mean, there's no other way to put it. Like, the average American had $400 of savings. The average restaurant okay. And there's 100 of thousands of restaurants. The average restaurant in the US had only 16 days of cash on hand before this pandemic started. Now they've all been closed 6, 7, 8 months. They're all out of business. I mean, there there's an argument to be made. And, again, this is all with best intentions. Close down the restaurants. Have 25% capacity. Do this. Do this. But the reality is, like, in New York City where it's gonna be cold for a good 5 or 6 months, 95% of restaurants are gonna probably go out of business unless there's help or unless they don't close. I don't know what they do. But, you know, this is all of the the destruction from the pandemic, which I agree is has been horrible, is going hand in hand with the fragility of the economy, which I honestly don't see a pathway to normalcy from this. And I'm trying hard. Like, we all are pretending like things are normal now when there's another stimulus package probably coming, and, you know, we're still I I tell people, and you mentioned it in the book too, a lot of the $2,000,000,000,000 in the last stimulus package has not been spent because it was kinda allocated incorrectly that it's still just sort of existing in bank accounts and not doing much else. It hasn't really done what it was supposed to do, which is increase the velocity of money, increase inflation, get people excited about buying things in their community, and and so on. And I doubt the next stimulus will do it either. There are several stats that just blow my mind and kind of illuminate the proportion of this crisis, and one of them is that we have been tracking savings rates, the percentage of income Americans save by household for, I think, 40 or 50 years. It hit a new record this last quarter. Americans have never saved as much money. We're in a crisis, and Americans have never saved as much. Our savings rate is in an all time high. And then the individuals, a lot of these individuals who appear to be getting checks from nowhere have decided to open an account on Robinhood and then lever up because the market's been ripping back up and buy what I would refer to as story stocks, the stocks they hear on CNBC, the stocks that you and I talk about, incredible companies that are disruptors. And then asset prices go to multiples that they have never achieved before. Apple usually trades at 12 to 15 times earnings. It's trading at 38. And the wheel spins, and the rich get richer. I would argue that the stimulus there'll be some very well publicized stories about the woman who owns the cupcake bakery, who managed to get through this and not fire employees, or every one of those. There's there's 5 small business people that, in my opinion, didn't need it, and the companies and the organizations and people that needed it didn't get enough of it. We're gonna spend $3,000,000,000,000 minimum. If you took the bottom medium of households, the households that make less than $60,000 a year, you coulda cut each of them a check for $60,000 and said, don't worry about health care. Don't worry about food. Don't worry about putting yourself in harm's way. Instead, we allocated $3,000,000,000,000 to I mean, we're gonna find out that PPP, that we're gonna find out 80% of it went to companies that didn't need it in my view. So I don't think the stimulus has been well planned. I think we've we've gone after protecting the wrong people. This notion that, oh, it's unprecedented. Don't let the airlines go out of business. What's a pandemic is not unprecedented. We've had several in the US in the last 100 years. What's unprecedented is an 11 year bull economy that gave everyone the sense that, oh, you didn't need to save money. Oh, you could use all of your free cash flow. We're an airline. We could use 94% of our free cash flow to buy back stock. And if it there's a rainy day, don't worry about it. It's always skies are blue. And to a certain extent, they're right. The government's weighing in and bailing them out because they have names like American or Delta. And for some reason, we identify we somehow think of airlines as being these great employers and Americans, so we're gonna go in and bail them out. But we have not prepared for this. We've put 40 to 50% of the population through strange fiscal policies, through regressive taxes in a position where they don't have, what, 4 weeks of savings. We put a ton of companies in a position where they thought, oh, I'll just lever up and do share buyback. No company that engage in share buybacks should get a single dollar of federal help. That's ridiculous in my opinion. And we have you know, when you have capitalism, rugged capitalism on the way up, and then you have socialism on the way down, that's called cronyism. And I think this has exposed a level of cronyism, which is really, really unhealthy, but you're absolutely right. Our economy our economy was dysfunctional, and it's gone dystopian. When you have an acceleration in wealth of a quarter of a $1,000,000,000,000 among the wealthiest 8 people in America, and then you have a situation where you could have record evictions, 1 in 3 people supposedly are having are more than 30 days behind in their rent. Oh, yeah. In New York City, 1, and maybe it's 1 in 3 now, but 1 in 4 haven't paid rent since March. So what is gonna happen when that eviction moratorium is over? January 1, I think it's it's over for everybody. So some of the big shifts. Right? The tectonic shifts. Like, what what is gonna change here? You're talking about housing. Think about think about, the way I the the way I see it is, COVID 19 was this earthquake offshore, and the waters are forming and turning into these tsunamis. What are the tsunamis such that we could ride them or benefit from them as opposed to just being overwhelmed by them? One of them you just mentioned, and that is I think there is going to be a multi several $100,000,000,000 transition or reallocation of capital out of commercial real estate into residential. My first job was 1251 Avenue in the Americas where I worked for Morgan Stanley, 88 floors, lived at work because I was working in investment banking, and they average 85100 people a day there. They track how many people for security reasons. Now the last 3 months, it's averaged 500. It's not going back to 85100. Oh, the Time Life building is the same way on on kind of across the street from there. That's the building. It's called Time Life now. Oh, yeah. So yeah. They've they've been at 5% capacity almost this entire time when they could be up to I think they could be up to 50% now. And when I go to the companies or ask the CEOs of these companies what's going on, the reality is bandwidth is 10 times faster than it was in 2008, 2009. They're and they've they've done all the surveys or they've studied all the surveys. Companies are actually depending on the industry, but companies are on average more productive. Employees enjoy it more, and companies are saving costs. Like, every floor in that building is is the the rent is enormous. It costs just the average American company. It costs between $24,28,000 a year to house or office, come up with the snacks, and security and air conditioning for every employee. So say you split that with the employee and give 12,000 to your shareholders, give 12,000 back to your employee. Now there is some situations. It's gonna create a ton of interesting opportunities, and there's all these second order effects. Okay? So we're gonna have a destruction minimum of 20 or 30% in terms of demand destruction for commercial real estate. That means 50 to 60% of the office REITs go out of business because they're levered. Right? That means that a ton of restaurants are basically dependent upon the lunch crowd go out of business. And then you see on the other side on the residential, you see restoration hardware stock hitting an all time high. You see lumber prices skyrocketing. You see Pulte Homes, a builder down here in the southeast, hitting new record highs. Right? But you're also gonna see some interesting societal opportunities, and that is you're gonna see online dating or different communities. I think whether it's Peloton or Equinox, I think these guys could start off for online dating because 1 in 3 relationships begin at work. And what happens when you're 24 and you can't find your mate? You can't make friendships at the same velocity. You can't establish professional relationships because you're at home. I mean, it's, again, it's better to be lucky than good. You and I are lucky. You and I are on the back 9 of our careers. We have our relationships. We have professional trajectory. But younger people do wanna go back into the office, and the one anomalous thing about this is that if you look at Facebook and Amazon and Google, they're actually doubling down on office space, or at least Amazon and Google. They're renting more space, and Facebook is in Midtown in Manhattan recognizing that the secret sauce of their company is a woman who's a Dartmouth grad, who's double e. And she wants to be in an office, and she wants to be in Manhattan. And that should be our next conversation is how cities are gonna do. But it's interesting. Some tech companies, Pinterest, are tearing up their lease and writing big checks. I cut my landlord a check for a $1,000,000 to get out of my lease, But there are other there are some companies who are doubling down and saying we need young people. But on the whole on the whole, the reallocation of capital out of commercial into residential is gonna be just staggering. That is one of the big waves coming out of this pandemic. So let's let's talk about that for a second because I don't know if people really understand what it means. So residential real estate's very different from commercial real estate. And a lot of residential real estate, for instance, in the city is I don't wanna say the majority, but there's a lot of mom and pop landlords, bought an apartment in the seventies. Now they live somewhere else. They rent it out to students or 600,000 students normally who go to New York City. All of that's going away. So we don't let's hold put a pin on that for a second because that's unclear. But commercial real estate, it's usually these big companies own these buildings, rent out office space. But now the the bottom floor is gonna be empty forever because nobody's taking a restaurant space and saying, boy, I can't wait to start my first restaurant in New York City now. Like, that's gonna take time, if ever, to replace these things, and floors are gonna go empty. And these commercial lenders, they're overleveraged too. They're overleveraged like any other American. They can't pay their money back. What's going to happen? And people think prices are just gonna go down overnight. That's not true either. Oh, there's price discovery. They're right now, they're in the state what what I call denial, and that is if you hear a CEO of an office REIT on an earnings call, they talk about how everyone can't wait to get back to work. Yeah. There are some people who can't wait to get back to work. There are a lot of people there are a lot of people who aren't going back to work, who have figured out a way to have the currency and the leverage and the support at home and the technology to not go back to work. And then there are probably the biggest cohort is people who will go back to work, but they just won't go back as much. They're much more comfortable, and their boss is much more comfortable with them working Thursday, maybe Friday from home, which is gonna create just unbelievable demand destruction. And the question is who registers the losses? And this kinda goes to the future of New York, and I know you have some thoughts around this. But if you think about there's just no getting around it. The people who own who have the mortgages on those big buildings, who own retail office space are gonna get crushed. And then, ultimately, residential will get hurt in New York because I don't know what you do with those midtown office buildings other than convert them to condos. I just don't know what you could do with them. They're you know they're not gonna need as much office space, as much retail space. I think they get converted to residential, which puts huge pressure on residential. But what we have in New York is over the last 20 years, real estate prices have outpaced inflation, and it's now $25100 a square foot for a nice lock downtown. If that comes down to 1500, that's not the end of the world. I think New York could actually become younger. If crime doesn't come back, if the tax base doesn't get eroded too much, if we continue to attract innovators and companies and young people, you could see New York getting less expensive and younger, which isn't necessarily a bad thing. The other fork in the road is what happens if it digresses into a cesspool of no services because we can't afford to support our services because all the whales that were providing a ton of tax revenue, including James Altucher, all moved to Florida. Right? So what happens? Are we starting an inexorable downward spiral, or are we gonna have a 2 or 3 year reformation where it comes back? Great place to be a young person because it's less expensive, and there's a bunch of cool little startups that wouldn't have dreamt of starting a company in Manhattan. Another city, San Francisco, I just think is screwed. San Francisco for a product would be best described right now as bad but expensive. LA as well. I think LA's somewhere in the middle. It'll be interesting with LA because what'll be interesting is that's more about the streaming wars and media, and I still think LA is a great place to live, mostly because of In N Out Burger and the Hollywood Bowl and Zuma Beach and all that good seppin'. San Francisco right now is a hellscape. It's crowded. I always thought Fox News should broadcast every day from there if they wanted to make a point about progressives and say, you have totally progressive government sitting on top of the wealthiest metro in the world, and this is what you get. You get veterans defecating on the street. I mean, it is just it is an ad for what happens when far left takes over a municipality, and I say that as a proud progressive. San Francisco is just a lesson on what you know, how not to run a city right now. Also but but, arguably, New York City, I mean, I initially put down my thoughts in mid August, and it's now almost 3 months later. And the data is so much worse than it was in August. So what do you think happened? New York 3 years from now. What's your 3, 5, 10 years from now, where's New York in your view? Well, so your two scenarios, I hear both of those scenarios quite a bit. Yep. And the young scenario sounds great. Like, oh, price will go down. Young people, artists, entrepreneurs will move in. I don't think just just logistically, just the physics of it, it can't happen within 5 years, 10 years. Who knows? Who knows if it ever can happen? Because what's gonna happen first is everybody's gotta prop up prices for as long as possible to meet their debt covenants, to to not be screwed on the next people who rent from them, and, you know, they're in denial. Meanwhile, all these the the ecosystem of Midtown, the ecosystem of Broadway is down. Mhmm. So all like you mentioned, all these restaurants are gonna go out of business. All these hotels are going to go out of business. But, critically and, you know, tourism's plummeted, so that means sales taxes are down. So, basically, every part of your tax base, every single spot where you get revenues and profits in New York City is is gone. I mean, there's a 1,000 people a week moving just from New York City to South Florida. Yeah. Vacancies are at an all time high. Yeah. And, and everybody's, there's no velocity of money in New York. Not to get technical, but if you get a dollar, you spend it, it goes to Seattle, goes to Amazon. It doesn't go to the local store anymore. So there's no prosperity that comes from just general circulation of money. So that's another thing that's hitting the city. The remote is not going away because of for so many reasons, productivity cost, but also liability savings. Nobody wants to get sued by someone who gets the pandemic, you know, at work. And so what's gonna happen? Garbage collectors are fired, teachers, EMT workers, police, you know, firemen, all city workers, and then it there's the deaths spiral down because then fewer businesses move in, fewer tourists, fewer residents. 600,000 students are going to school remote. And I look. I've talked to so many people now, like, from mayoral candidates to administration officials to congressmen to people in the Federal Reserve. Mhmm. No one has any I've come up with some solutions just brainstorming, but the solutions are really difficult. Yeah. So, like, I mean, it gets you can see how, the flight I would say conservatively, it's probably 1 in 2, but 1 in 3 people I know that make over call it $1,000,000 a year, People who make a very good living, who lived in the Northeast have called me in the last 6 months and want inform I've been living I've lived in Florida for 9 years and want information about Florida, about schools. I'm not exaggerating, like 50% of anyone I know in the Northeast that makes over $1,000,000 a year has called me in the last 3 months and said, tell me about schools in Delray. Tell me about housing. It's unbelievable the migration that is being inspired by basically sunshine and low taxes. The the optimistic scenario around around New York is that okay. So you know there's gonna be huge pain registered. And I think I'm hoping a lot or most of that pain is registered by people who've made a very good living the last 20 or 30 years buying and extracting rents from commercial and retail real estate. The the families, the REITs that own those properties are just it's just gonna be a bloodbath. The question is, is the crisis deep enough where we say, okay. We start to rethink our relationship with some unions and some workers in New York. I'm a member of a union. I'm pro union. But when it takes when it costs 11 times as much to build a mile of subway in New York as opposed to any other major city, probably things have gotten out of control, and the crisis might provide cloud cover to somewhat right size our municipal expenditures. And no governor, no mayor has had the cloud cover to do that because if the subway goes on strike, no one remembers always trying to right size the economics of our city. All you remember is you can't get to work and you're pissed off. So I think there might be an opportunity there. The the biggest thing the the the reason why the glass may be half empty here is as someone who has if you take a list of the 20, quote, unquote, super cities around the world, from Hong Kong to Sydney to Paris to Seoul to LA to San Francisco to New York, I have spent 60 days at least in 17 of them. And New York is singular. Everything is fighting for number 2. Everything is fighting for number 2. Young, ambitious, creative people who wanna make magic with their lives and their work go to a city. They go to a city. The really ambitious people in the world all have this notion where they gotta whether it's Louis Vuitton hiking into Paris barefoot, you know, whether it was explorers going into Madrid or to Lisbon to raise money so they could get a ship and take off and try and conquer new worlds, The most talented people in the world are drawn to cities. And the best city in the world, if you like cities, is singular, and it's the city we're from. It's New York. And so I I think you are always gonna get this crazy alchemy of human capital drawn to the greatest city in the world. I don't think I think London takes a big hit. I'd say London maybe is number 2, or some people would say, oh, no. It's it's Sydney. That's too f**king far. Or Hong Kong. Who wants me to honk I mean, it's just I can go through them all. On Paris, try and find a great scene at a bar or a lounge on a Wednesday night in Paris. It isn't there. It isn't there. I agree with you. And here's what I appreciate the most about New York compared to every other city that you just mentioned is there's a diversification of subcultures. So no matter what you're interested in, that subculture not only exists in New York, it's the best version of it on the planet. Yeah. No matter what you're interested in. But the problem is even those subcultures are dispersing. I mean, the good the optimistic news about the country is that all of these skills and talented people and money are going to the 2nd tier cities, Dallas, Denver, Austin, Nashville, Charlotte, even Philadelphia or or or Miami. Yep. But I'm scared for New York, and I think it's a lot of the leadership. And I'm not just talking about De Blasio. Everyone trashes him because he deserves it, but it's just everybody is in denial. Yeah. Hey. Look. I I don't think there's any getting around it. It has 3, 5, maybe maybe even 10 years of pain. But as long as we have that attraction to the best and brightest young people, and I still think it's there, I think if, you know, if I think if New York or Brooklyn goes to a $1,000 a foot instead of 2,000 and Manhattan goes from a 1 bedroom, you know, a 1 bedroom apartment goes from 4000 to 2,000, the people that get hurt and the people that benefit there, I'm not sure the city doesn't come out of this as strong or stronger. I just think it's a decent amount of pain. If you look at economic history, cities actually do well post pandemic. You wouldn't think they do, but cities typically go for the 20 or 30 years post pandemic. They usually do pretty well. Granted it's situational. I wonder if just New York and San Francisco just priced themselves out of the market, and then all of a sudden someone woke up and said, oh, wait. Saint Louis has a great university and a really great cost of living. You know, Philadelphia is 80% of New York for 40% of the price. So, wait, Miami is 98% of New York, and in some levels, a 110% of New York for 70% of the price. And then Miami will get too expensive. You know, there's sort of a rebalancing here is the way I would is the way I would describe it. But I wonder if in a little bit of time after that pain, if there's leadership what you're talking about, I don't see anyone running for mayor right now, maybe the guy from Citibank. There's gotta be some really sober, hard decisions to right size New York, and I hope that crime doesn't come back. I think that's a big, big variable is if we can use technology to ensure crime doesn't come back. I don't know about you. For the first time in 20 years when I was walking around New York, I was cognizant of the people around me, and I never felt that way before. I'm like, this feels, this feels like I need to be mindful of my surroundings, which is probably every woman out there is like, well, welcome welcome to my life, boss. But I never just never felt unsafe in New York last 20 years. I felt unsafe when I moved there right out of college in the early nineties to work for Morgan Stanley. But last 25 years, never a fear anywhere, Anywhere. Yeah. And then in the last 3 months, I've a few times I've been out in the East Village or other places and thought, okay. I gotta be mindful of where I am right now. What I'm worried about is how much am I in denial and ever or is everybody in denial about not only in Europe, but the the rest of the country, the rest of the world? Because look at all the malls. Right? The malls have already replaced the town square all over the country. And now you have Neiman Marcus, JCPenney's, all these other big prime tenants of these malls are bankrupt. They're not coming back in many of them. All of these things have a death spiral to them. So less you know, what's the great thing about malls? The location. So so less people will start moving around them and and on and on and on. And this is just one situation. What's gonna happen when the IRS is a mess this year or when, I don't know, every like, here we're right now, we're seeing the stock market go up. So one of the theories I have about the stock market going up, of course, Starbucks is going up. Every mom and pop coffee shop has gone out of business. They basically have finally become a monopoly by accident by just simply shutting down all the, restaurants and cafes that were not financially secure, which is essentially 99% of them. So this is gonna continue for a while. Yeah. But what you're having is this you know, again, COVID 19 is more of an accelerant than a change agent. And every year, we were seeing the 2 or 3 biggest players in every category garner more and more share. And I don't care what industry is. Big ag, big pharma, big tech, quick serve restaurants, the biggest players that are best capitalized who can play offense when everyone's playing defense are garnering more and more share. The most oxygenating act we could perform right now on the economy. If we wanted to put an EpiPen into our economy right now, it would be to massively overfund the DOJ and FTC and go industry by industry and break up companies left and right. The share, the dominance, the market capitalization that the top 2 or 3 companies in every sector are garnering is extraordinary. And you're talking about, you know, the food industry used to be very robust. If JPMorgan goes out of business, they he can call, Jay Powell and say, you better bail me out or I'll take down the global economy. If McDonald's calls and says, you better bail me out, we'll take down the global economy and say, no. You're not. People have a lot of options in terms of food. But we're moving towards a less more fragile ecosystem around several dimensions. You wanna think about panic? What if Walmart and Amazon had on the same day in April said, we have massive outbreaks of infections in our warehouse and distribution centers. We have to close down our website and our supply chain. If Amazon and Walmart had said, we're not able to deliver food or essentials, you would have seen people that that would've been, honey, grab your glock. We're going to Publix, and we're taking what we need. You could've had wholesale panic because we have become too reliant on a small number of retailers. And even in fast casual dining where you think it's so robust, it's kinda coming down to Starbucks, Domino's, Chipotle, Panera. There's like a few big players that have the technology and the capital to survive this and deliver you your food at home where you need it or cater to you. But there are just way there's way too much concentration of power and wealth, and all this has done is accelerate that. And we've gone from this dysfunctional economy to this dystopian. Show me if you look at the S and P 500 and you disarticulate it into deciles, the biggest 50 companies are up 10%. The bottom 50 are down 10%. The next bottom 50 are down, like, 30%. The marketplace has said, there's 2 types of companies you wanna invest in. You wanna invest in unregulated monopolies. Big tech is up 60% year to date. Before the pandemic, post pandemic, they're up 60%. And then the other cohort that's performed really well is companies that are too big to fail because the market senses on the way up, they get to capture the gains, and on the way down, they get bailed out by the government. And this is really unhealthy. When the drivers, the economic success of our society largely stems from either monopolies or companies that are too big to fail, you lose the engine of growth. You lose the engine of job growth. You lose the engine of innovation, which is small and medium sized businesses. We need to absolutely oxygenate the economy and go in and have the mother of all trust busting. So so could it be that the financial security, though, of an Amazon and a Walmart because because not only are they they're both too big to fail and they're profitable. They have a 1,000,000,000 customers all around the world and and so on. Do you think that's what keeps them going during times of hardship like a pandemic? Else, they might have closed down. I think you could say that about Walmart, but I don't think you can make that. I think if if Amazon is forced to spend AWS, I don't think that makes them any more susceptible to put to a pandemic. I don't I mean, I think if that's true, if there's true natural monopoly effects, then they should be if there's true monopoly benefits, then they should be regulated as a monopoly. There's benefits to having Florida Power and Light. You and I have one supplier of electricity, and there's benefits to that. I buy it. Okay. So what do we do? We regulate it, and we regulate prices, and we regulate that they don't put solar companies out of business or whatever it is. So it's one or the other. If if I don't buy the natural monopoly argument, I think that these companies would be able to serve their consumers really well and be more robust, and I think we're gonna find out all sorts of innovation. I think Google search engine hasn't increased much. I think it's more focused on taking you to a place they can monetize as opposed to a better place for your information. Try to do meta search around searching this podcast for a discussion around New York, and you can't do that on search. I don't think search has really innovated in several years. Why? Because they don't need to, or the majority of the innovation is around how do we get Scott and James to click their second click to be to be a PLA or a place we can further monetize. So I think we're gonna find that there's just as we found in Bell Labs with with cell, with fiber, with data, with optics, I think we're gonna find there's a ton of innovation waiting to be unleashed, when we break up these guys across tons of sectors. Look at Uber. Uber is spending all their time and energy. Uber and Lyft is spending all their time and energy and money, a quarter of a $1,000,000,000 to pass proposition 22 to emasculate workers' rights instead of trying to figure out how they become profitable. So I I think these big companies inevitably start focusing on the wrong things and start focusing on things that aren't don't unleash creativity. Talk about, you know, down here, I'm I spent too much time thinking about my taxes. I have this cohort of people, super smart people, who should be figuring out solutions to housing or coming up with vaccines. Instead, they're trying to figure out they're trying to help people avoid taxes. I mean, the the complexity is a tax on the poor. Our tax system has become just so ridiculous with people who are in the top 1% paying a lower tax rate. And why? A lot of its complexity and all these different tax avoidance schemes. Well and if you think about it, these things generationally, like, over decades, lead to much greater income inequality. And people don't think of income inequality in terms of generations. They think, oh, Jeff Bezos is worth a 100,000,000,000. The janitor at Amazon's worth nothing. That's income inequality. But what happens is is that all the people who are get skilled at avoiding taxes, their kids all marry the kids of other people who are skilled at avoiding taxes, and then they have kids who are skilled at avoiding taxes. Meanwhile, on the other end of the economy is the people who never have any savings, and their kids inherit that and marry other kids to people who don't have savings. It's that America's not as, what's it called when you could move up classes a single generation? Or income income mobility? Yeah. Mobility. America is not as mobile with with class as people think. I mean, there is class mobility by built into the system, but people aren't don't use it as much as people think. Hence, generation over generation, tuitions get get greater and greater, rents get greater and greater, and then it be really becomes haves and have nots. And this pandemic is just kind of like you said, it's just accelerating that right now. So, a lot there. So just some examples. We are losing a generation of leaders and scientists right now. And in our public schools, low income kids and middle and higher income kids, and there's not a lot of higher income kids left in our public schools, so that's created a whole problem in a casting. But in the public schools, low income kids largely kept pace on math and science with their middle income cohort, their peers. Once we hit the pandemic and we went to remote learning, lower income kids have dropped off the face of the earth. 50% of them have fallen well behind their middle and upper income peers. Why? Because mom has to go to work. She can't stay at home and and sit next to the kid when he or she is doing their math work. Their iPad gets stolen or their iPad is out of date. Maybe they don't have broadband. And you have distinctively ethical issues here, and do we really wanna live in a country like that? We're gonna lose a whole generation of doctors, scientists, leaders, ministers, counselors, because these people are We're gonna see just as Giuliani likes to take credit for the reduction in crime and it ends up according to the authors of Freakonomics being a function of Roe v Wade that we didn't have an entire generation of kids born into households that couldn't afford to take care of them. We're gonna see a generation of kids, in a decade from now that just aren't prepared, aren't prepared for society that fell off the map, and we're gonna reverse engineer it to this pandemic where we decided to put 2 to $3,000,000,000,000 in the hands mostly of people who didn't need it. And then we let an entire generation of young people, fall off the map. Well, add to that too, the $1,600,000,000,000 in student loan debt. An entire generation of kids has never been so burdened with debt. They have to work. They can't start companies or or take chances or take or be innovative. So, again, like, I wanna be optimistic, and, you know, there are opportunities. Right now, there's more opportunities to start a business than ever probably, but it's hard to weave through the macroeconomic possibilities here because there's not that many. I mean, we're gonna get another stimulus. We're gonna there's gonna be more money in the system. Money in the system flows like in a in a in a poker table. The people who don't know how to play poker, you want them to have the most money because then it'll end up in the hands of the peep like, you it'll end up in the hands of the richer people at the table. There's velocity. Yeah. Yeah. So you mentioned 2 things, starting a business and then higher ed or student debt. You're an entrepreneur. I'm an entrepreneur. I think the best time I think it's gonna be a great time to start a business in 1 to 2 years. Real estate will be less expensive. People will be less expensive. Companies and purchasers will be open to buying from new businesses. If I look at the 9 businesses I've started and I try and find the signals to distinguish the winners from the losers, the only thing I can discern is when I started companies in a recession, they succeeded. And when I started companies in boob times, they failed. Your cost base, your DNA, your sobriety, your grit is just a company comes out battle trained when it started in a recession. You get overpriced people, overpriced real estate, consensual hallucination that you can wallpaper over a s**tty business with cheap capital when you start a company at a boom time. Almost every company I've started when the economy is hot has failed. Almost every company I've started in recession has done well. In 1 to 2 years when we're kind of in what I call I think is we're gonna be in a full blown recession, if not worse, it's gonna be a great time to start a business in my view. Having said that, you have to be in a position to have the credentials, to have the demographics, to have the the benefit. And when I say demographics, you know, it's just easier for white males to raise money in a city than it is for a black female to raise money in a in a in a small town. There's just no getting around that. And you're credentialing. Right? Ideally, you dropped out of Harvard and went to work for Bridgewater. You know, there's just a certain profile for people who are able to access venture capital, but it is gonna be a great time to start a business. I see a silver lining around higher ed and what you were getting to a student debt, and that is if the crisis is deep enough, I think these fists of stone are coming for me and for higher education. And that is we have raised tuition, 3 times as fast as inflation, 1400% over the last 30 years. And a lot of parents and households for the first time are really stepping back and saying, is this worth it? And the top 20 schools will all benefit. They'll get stronger. They'll maintain their pricing power. But there might be an opportunity for the big land grant universities, the University of Texas System, the Cal State System, Florida State, Michigan, who educate 2 thirds of our students to embrace technology, small and big tech, and massively increase supply. Stop this whole bulls**t trying to be a luxury brand and brag about the fact that UCLA, when I got in, was 60% admittance, and now it's 12%. Stop that. Just stop it. Ignore the rankings, and go back to our rightful place of income mobility and taking unremarkable kids and moving them up, dramatically lower tuition, dramatically increase acceptance rates, and also get rid of this bulls**t gestalt complexion notion in the US that the only path to success involves a traditional 4 year liberal arts degree. There's gotta be other paths. We need companies you know, in terms of a reset, big companies have to get rid of this notion that you need a security pass and a bachelor's degree from a world class university to work there. That means your company isn't adding value to society. You know, the the primary people that are able to get a degree, there's 2 cohorts that can get a degree from an elite institution. Children of rich kids are 77 times more likely to gain admittance to an elite university if you're from the top 1% income earning households, and then what I refer to as freakishly remarkable 15 to 17 year olds. And that's the Vaseline for all this, or that's the Neosporin. Oh, we let in some remarkable kids from the inner city. Well, guess what? 90 I can prove to us that 99% of our children are not in the top 1%, and the mission of higher ed is not to turn the top 1% into billionaires. It's to give the other 99% a chance to be in the top 1%. That's what we're supposed to be doing in higher ed. We have totally lost the script. So I think there's hopefully an opportunity. I'm working with the Regents University of California. I'm like, stop thinking about UCLA as a place that is constricted by our classrooms and the amount of tenured faculty and this notion that, oh, we have to maintain our brand. No. You don't. Double the admissions. If you take 50% of your classes online, you double supply, and we can double admissions. And we don't have just freakishly remarkable kids wandering around here. We just have remarkable kids. You know you know what also, like, you could do is a lot of kids are better served right now. Instead of taking a remote class at UCLA or Stanford or whatever, they're taking remote classes at Coursera, but having the credits have reciprocity with the UCLA's of the world. Well, that's a huge innovation. So a company like Outlier, an interesting company. And my company, Section 4, does online, and we're trying to do elite marketing and strategy electives at 10% of the price of an elite university. So we're basically saying, alright. You don't get the certification, but you get the experience for 10% of the price. 60, 70% of the experience for 10% of the price. And then what you're talking about, a company called Outlier is doing, and they said, okay. Calculus is a something like a 2 or a $3,000,000,000 business. Undergrads will spend 2 or $3,000,000,000 in tuition on calculus or some crazy number. It's been taught the same way for a 100 years. Let's find someone amazing at it. Let's try and use technology and incredible graphics and design and infographic to create a pretty good online experience, maybe even better than a mediocre in person experience, and let's charge kids $300 instead of 6 or 7,000, which is what you pay at a private liberal arts institution. They're saying, okay. Let's do an arbitrage here. There might be an arbitrage around 2 year junior colleges, where more kids go to junior college for 2 years, which delivers education at much lower cost, and then they transfer to the kinda name brand school. But we absolutely have to stop preying on the hopes and dreams of the middle class and affect what you described as this transfer of wealth of 1 and a half $1,000,000,000,000 that makes them more risk averse, stops them from forming households. I do see that as an opportunity, though. I think the crisis is forcing the marketplace to rethink education. I think the arrogance and self aggrandizement that defines university leadership has been their chin that they keep sticking out, and I think the fist of stone of COVID 19 are coming for it. The reckoning is overdue. But I'm hopeful we're gonna come out of this with increased admittance rates, increased supply, and lower costs. It's time. Just like, you know, Manhattan real estate got way out ahead of itself, tuition in my industry has gotten way out of ourselves. We're not we're not luxury brands. We're public servants, and we need to return to that. And if you were a young young person in your early twenties now, what entrepreneurial opportunities would you start thinking about? So we talked about waves. Right? Residential, anything involving the home is gonna boom, and there's a ton of opportunities. And I try to think, okay. What are the waves? Because I think it's better to be good at Google than great at General Motors. You know, it's just I go surfing once a year, and when I go to when I go I went to Baja where the waves are perfect. I can convince myself I know how to surf, and then I come back to Florida where the waves are just Florida, and I realize I can't surf. So you wanna get to where the waves are great. You wanna get in front of a big wave. There's some huge waves forming. We talked about 1, the transition from commercial real estate to residential. Another huge wave, probably the biggest wave in the last 30 years, other than maybe the Internet, if you will, is the reallocation of capital around health care that will no longer flow through hospitals and doctors' offices, but flow through smartphones, smart cameras, and into your home. If you think about it, James, 99% of the people who contracted, endured, and developed the antibodies for the novel coronavirus didn't enter a doctor's office, much less a hospital. And regulations have come crumbling down because of emergency measures. You doctors can now communicate directly with their patients. They can prescribe things over digital. They can have pharmaceuticals delivered directly to the house. They are figuring out where every Wednesday, I have a nice woman come to me and test my entire family for COVID 19 just as a general practice. I think Amazon Prime is, as a feature of Prime, gonna start offering diagnostics and testing. I think they will deliver your package and then rub a swab in your nose or some form of that, or there'll be an app that does something like that, or there'll be a just as you have an espresso coffee maker, I think there'll be a some sort of diagnostics tool in your kitchen that helps your family be healthier and absorb health care through a distribution mechanism called your home. Just as ecommerce was shifting distribution by taking stores and turning them into warehouses and then taking your house and turning it into a store your computer into a store, 17% of our economy or approximately $4,000,000,000,000 is about to get thrown up in the air and land in places other than a hospital and a doctor's office. I think people wanna not only get treated at home. I think they wanna die at home. You know, I think that hospitals are gonna become the place just as advertising has become a tax on the technologically unsophisticated or the poor, I think hospitals and doctors' offices are gonna be the new Android or the new ad supported media. I think if you end up in a doctor's office or a hospital, it means that life hasn't worked out for you because I think that health care is gonna move to the home. So you asked me, where would I wanna be? If I were just an economic animal, I'd wanna be in remote, health care or telemedicine. I think that is gonna mint the first trillionaire. I think the start ups there are gonna be huge. So there's already, like, software, like remote video software so that doctors can see patients. There's all the rules for privacy, encryption, and all that kind of stuff. What other stuff in telemedicine do there's a lot of, mental health care telemedicine. There's a lot of, prescription doctors doing telemedicine for easy prescriptions. What other kind of stuff do you see? So yes to all of that times 10. I I've just made my first investment in telemedicine. I I invested in a chemical 98.6, and it's primary care delivered over your phone, and they sell through the enterprise. So for $200 a month, you know, an Exxon or a Sandoz or a Warby Parker can provide to all their employees primary care on their cell phone. And if someone says, I'm not feeling well. I think I have a UTI. They answer a series of AI driven questions that gets them to the right doctor, and the doctor's informed when he or she comes on. And then the doctors get to work from home. They have more flexibility. And 30% of the outreach from covered 98.6 patients is people communicating with them while they're in a meeting. They're making it so seamless and frictionless to manage your health care, and then someone might say the person on the line goes, yeah. It is it sounds like a UTI. Answer me the following things. I've written you a script. It'll be there within 60 minutes. And the idea is getting off your heels and onto your toes because a big part of the costs around health care and loss of productivity is that we play defense around it instead of offense. We don't wanna go to the doctor. We hate the loss of anonymity. Doctor's offices, maybe with the exception of gas stations, are the worst retail in in America. It's retail. What other retail imagine going into a Nordstrom or Sephora and the person behind the register has a a a plexiglass thing that they slide back, and they ask you to fill out a bunch of paperwork that you already filled out before you can buy anything there. And then they ask you to wait, and then you go in, and the person who's there to sell you the product and make money comes in, seems stressed out, and is there for maybe 10 minutes and leaves and writes you a script to go get another test somewhere else. No. You can't get your La Roche Posay here at Sofia. I you gotta wait. You gotta talk to me about it, and then I'm gonna write you a script to go to Macy's and buy the sunblock you need. And then you gotta come back and come back, and I'll tell you if you got sunburner. I mean, it's just this is retail, and the retail is so poorly managed. The entrenched the entrenched incumbents have made so much money, specifically insurance companies, that they have gotten in the way of any sort of innovation, and I think COVID 19 is breaking down a lot of those barriers. And I think you're gonna see innovation across these incredibly, across these distribution systems we call our handhold phones and smart cameras and voice. I think you're gonna be able to ask Alexa, Alexa, do I have a fever or a cold? And it'll ask you a series of questions. Maybe go to a touch base screen, and I think it's gonna be able to tell you, and then it's gonna say, alright. We own PillPack. We'll send you your Z Pak or whatever. I think there's just gonna be so much. I mean, this is it's lit it's the biggest sector in our economy, and it's about to go through a change that I think will be more transformative and more violent, if you will, than the shift from terrestrial retail to ecommerce. So first and foremost, health tech. Right. And I do think that is a, positive for the economy just because look at all the costs all all the extra costs baked into the system, whether it's insurance, whether it's the doctors, whether it's the health care system as a whole, whether it's the FDA. There's a $1,000,000,000,000 of extra cost baked in there every year probably. Well, your point is a valid one. We we tend to look at health care through the lens of economic costs and loss of productivity. What about the noneconomic costs? A mother who has a childhood suffering from childhood diabetes, and let's be honest, it's usually the mom, spends 10 to 12 weeks a year of her life managing that child's health care. Imagine if you were able to free up most of that. Imagine how much more money that woman could make. Imagine how much more time and care she could provide across the rest of the household. Imagine how much more self care such that she doesn't end up sick or mentally ill at some point in her life. There are think about how much time it takes to go get well. Just the friction and the bulls**t and the anxiety around the delivery of health care. It's ripe. It's gotten more expensive, and the outcomes aren't any better. Right? The life expectancy in the US has gone down 3 of the last 4 years. Infant mortality is still not even in the top 10 in terms of nations. The outcomes, unless you're wealthy, have not gone well. So health tech, number 1. Ed tech, number 2. My industry is a $700,000,000,000 industry in the US. Tonight, I'll teach 280 kids, James. I have 280 kids taking brand strategy. They each pay $7,000. That's 1 I think that's about $2,000,000 to listen to me do what I'm doing here with you for 12 nights. Right? A $170,000 a night. I thought, Jesus Christ. What are the margins on that? The margins on this class, and granted, this is exceptional because I get to come on podcasts like yours so kids wanna take my cla*s. Margins must be 95 points. So what other product in the world gets $2,000,000 at 95 points of margin? Can you name one? Because I I came up with 1. I could only think of 1 product. I mean, in terms of gross margin, I would say Google. Okay. But that they you know, but an individual yeah. They have near perfect they have near a 100% margins. But, I mean, a specific product, I am ordering this I'm ordering brand strategy for $2,000,000 knowing that it's an they're getting 95 points or 97 points of gross margin. The only thing I could come up with is there's a drug, I think it's from Pfizer, for a rare blood disease. Oh, I know this one. It's like 12,000 a month to take this. Oh, no. It's 2,100,000. 2,100,000 a month? This there's a new drug. There's a I'm sorry. It's for a, a muscular atrophy ailment, and the drug is basically a cure. It's a miracle drug. It's a very rare devastating disease that's fatal, and you basically waste away and then die. And this drug cures it. Full stop, cures it. And it's not a huge market in terms of numbers, so they charge 2,100,000. So my brand strategy class and a life saving drug, and I at least I say, alright. The life saving drug has crazy f**king technology. Some genius, some immigrant technology spent his whole life, never kissed a girl, never never went to the movies, never bought a nice car, just said I want a better humanity and worked their a*s off their whole life to come up with this miracle drug. And then the company sitting on top of it said, I know. We're gonna charge $2,000,000 for it. Okay. I get that. I almost I don't wanna say they deserve the $2,000,000, but I get it. I get $2,000,000 I get $2,000,000 because a bunch of kids want economic security. They wanna be able to support their families. They wanna be able to support their husbands and their kids. They wanna have a nice life. They wanna help their parents. They wanna live the American dream, so they gotta spend $2,000,000 on Scott Galloway. That's just wrong. Right. And this is where and this this even is related to the discussion on cities, but this is related to disruption theory. So as a product or a service gets more expensive because their customers want more and more features and are are are used to kind of a upwardly sloping price curve, these products and services are easy or or commonly disrupted. But because of regulations in in education, regulations in health care, and so on, classic disruption theory is itself disrupted by government regulation. Well, we create barriers of exit or bear we we create accreditation. Right. These are the most powerful brands in the world, to be clear. Nobody spends a 100 no one gives Apple a $100,000,000 to put the name their name on the side of a building on their campus. They'll do that at a university. You know? Apple has nothing on MIT, Stanford, or NCI. These are the strongest brands in the world. In addition, we have, like a cartel, decided that, okay. We're Stanford. We get triple the number of applications we got 20 years ago. f**k that. We're not gonna let anyone else in because we're all drunk on luxury, And every alumni and every donor likes the idea of putting their name on a more and more exclusive Hermes bag as opposed to a Coach bag. And every alumni likes saying I went to Stanford even though if you didn't if you couldn't get in now think about it. Everybody brags I couldn't get in now. Well, okay. That means your kid's not getting in. So there's this there's this crazy exclusivity that's terrible, drunk on exclusivity. We have, we're gonna need to rethink tenure. I work with one of the finest faculties in the world. I think a third of them should be put on an ice flow. They're not only unproductive, but they get obstructionist because they feel the relevance is slipping from them. And everything points to one thing in higher education, whether it was inviting kids back in the midst of a pandemic, pretending that we were gonna have some sense of normalcy. Every decision that administrators and tenured faculty have made over the last 20 years, in my view, is all with one aim. How do we reduce our accountability and increase our compensation? And we have gotten to a point, and and the the the basic the underlying notion of disruption is if you raise prices faster than inflation with no underlying increase in productivity, which we have done in education. If you walked into a class in in a university 30 years ago, the fashion is different. They're drinking tab, not vitamin water. They have, you know, old Dell Computers or or legal tablets instead of their phones. That's about it. It hasn't changed a hell of a lot. I got PowerPoint versus overhead projectors, but it hasn't changed a hell of a lot. What's changed what's changed is the tuition and the lack of accountability and the compensation of administrators. 97 of the 100 highest paid public officials in the state of Massachusetts work for the University of Massachusetts. We have created programs and vice chancellor positions and benefits. We have become totally drunk at the trough. There's a bit of a 2 class tier system at universities where you have your tenured faculty and then you have your clinicals, you have adjuncts and your lectures who don't make very much money at all, who carry most of the water. But there needs to be class traders of deans who refuse to award tenure, who start taking a hard look at the cost, most of which are human and personnel cost, and also the opportunity, the fastest fastest 0 to a 1000000000 retailers in history, there's a lesson here, were Old Navy, 80% of Gap for 50% of the price, and JetBlue, 80% of Delta and American for 50, 60% of the price. Give people 80% of something for half the price. That is a great c**ktail. Somebody is gonna come into education with a decent brand, maybe not a great brand, and offer 80% of what most of us think we're getting in terms of certification education for 50% of the price. I think, so you asked me. Health tech, edtech, in my opinion, are probably the 2 biggest areas. Fintech is enormous, so you know more about that than I do. I just think the whole system of cash and payments and contactless is gonna be enormous. Unfortunately, places like ecommerce, hardware, social are all controlled by monopoly. So people come into my office, I wanna go to work in ecommerce. I'm like, that's great as long as you're gonna work for Amazon. Don't fool yourself. They're going to work in ecommerce for, you know, any of these other guys is a good idea. They're getting the s**t kicked out of them too. I mean, I guess there's some you know, like, you mentioned Shopify in in your book. Like, there's some companies that have been innovative and and people wanting to avoid the Amazon seller ecosystem or signing up for Shopify instead. Kids are selling clothes on places like Depop and Poshmark. So there's, like, up and coming competitors that will get acquired by an Amazon at some point. So, like, nothing is material now for Amazon. Amazon could buy everything and then not even disclose it. Look. Amazon could buy Airbus and Boeing with the cash they have in their balance sheet right now. So you're you're right, and that's a good correction. The probably the most innovative company in the last 10 years in North America is Shopify. And it's an interesting lesson that when something becomes so dominant, there's opportunity to be the uncola of that business. So for example, Shopify is basically the non Amazon Amazon. Amazon partners with the retailer the way Avaris partners with a host. It doesn't end well for the retailer. Right? They say, okay. We get the data. We get custody of the consumer. We get the branding. We get the packaging. You basically just get, increasingly lower lower margin fees for us to take your product and put it on platform because we control, every day, we control more and more traffic online. Websites, ecommerce sites are probably mostly gonna go away. Shopify comes in and says, okay. We'll give you the great taste of Amazon. We'll give you fulfillment. We'll give you a platform. We'll give you infrastructure. We'll give you delivery, But you get to hold on to your data. You get to maintain custody of consumer. You decide the packaging and boxing. You decide what goes in the box. We are truly a service provider. We are a partner. And they're even doing things like they're they they're gonna do a partnership with TikTok where they might be able to provide with their service videos, short form videos that display your product if you're a small surf shop. I mean, they are doing some just they might even implement some sort of subscription fee or prime like feature built into Shopify that you can adopt. This company, which is now worth more than Federal Express, Simon Properties, and throwing DHL, I mean, an incredibly innovative company. The non Uber Uber or the non share share economy company that I'm very bullish on is Airbnb. They've said, okay. We don't need we have an incredible mode instead of just having you you and I could start a ride hailing company in New York, local supply riders or drivers, local demand ride hailers. To start Airbnb, you need local supply. People are willing to rent their apartments, and you need global demand because 95, 97% of the people in an Airbnb in New York tonight are from somewhere outside of New York, and a lot of them are outside the country. Well, maybe not right now, but typically. And this company, I I'm really impressed with them trying to they're putting aside stock for their hosts. They've decided they want out of the kind of the exploitation economy that is what I would argue is is ride hailing, and they're trying to start their hat white. They still have some issues around housing stock and housing prices. There's real issues, but I would describe their hat as being kind of gray, which feels vanilla white or Everest white compared to Instacart and Uber. So I think Airbnb is gonna be a monster. I think that's my next kind of big tech, if you will. You know, a lot of the industries you're talking about are all have this one hidden word behind it right now, which is remote. So whether it's Right. Telemedicine percent remote. Yeah. Even education, fintech, all this stuff. So we're we're doing this podcast, for instance, on Zoom. What's what happens to these companies? Do they I I I wonder if there's an arc where companies like Zoom start to intersect with media because there's no reason we can't be doing a show right here that we toggled as public and people could log in and be in an audience and watch it, and then it's recorded and saved and people will watch later. There's no reason this couldn't be a whole network right here. Well, okay. So all the all the home stocks took a beating yesterday, but they when people say they take a beating, they were off you know, they're down 3% off their 2 or 300% gains, whether it's Peloton or Zoom. Zoom is now worth more. Because of a vaccine, which may or may not be anything. Right. They're probably it's probably a decent opportunity to buy right now. But, anyways, let's look at Zoom. Worth more than the US auto industry. I think it's got about is it? I think a 1000000000. 1000000000. Oh, god. I mean, just just staggering. Right? Yeah. So where does Zoom go? Because if you're on the strat if you're the head of strategy for Zoom, you're like, okay. We gotta almost any acquisition we make is accretive, so they should be calling every investment banker in the world and saying, what do you have for me? And the question is, do they go, you know, horizontal into some sort of entertainment, or do they go vertical into some sort of communications? If I were Zoom, I'd think about buying, you know, a Telefonica, some of, like, tier 2 telcos in Europe. I would try and solidify my position in communications and really, really stick out my elbows around frictionless communication, which is in their mission statement. But, you know, I look at a company that's worth this much, and I look at their revenues, and I think, okay. I don't see how organically you grow into that valuation. I don't see how they do it. Yeah. I agree. I mean, they have 700,000,000 customers, but they're not, like, I never have paid Zoom a dime. I use, you know, some company account or whatever. But there's like I wonder that's a good point, though. They could start buying companies like Twilio, which has, you know, SMS, you know, text agreements with every phone company in the world and, you know, start doing you know, allowing people to do more, calling into meetings through, something like a back end like Twilio. Yeah. Well, even Twilio's got a $42,000,000,000 market cap in this environment. It's hard to find a a public company to buy. That's for sure. Yeah. I wonder. I mean, even I was I was looking at AT and T. Right? I mean, if you think about COVID, it's taken the winners, and it said, where are you gonna be in 10 years? And it discounts it back at record low interest rates, which results in record multiples on revenues, enterprise value, however you wanna talk about it, across the story stocks or the perceived winners or the perceived disruptors. At the same time, AT and T is at a 5 year low. Right? So mostly because of failed acquisition of Time Warner, what I think was a failed acquisition. So are there opportunities for someone like Zoom to go buy Vodafone and say, alright. We're gonna take that EBITDA, that customer base, and we're gonna integrate traditional phone service. You know, should Zoom be the operating system or the telco that does the deal with handsets? I don't know. I think Zoom right now, Zoom has such cheap currency to go I'd be I'd be going shopping like crazy. Should they be buying Mercado Libre? Yeah. Or what about an HBO Max? And then you have to get Zoom to watch your favorite a b HBO shows. Well, HBO Max, owned by Time Warner, owned by AT and T, probably probably the greatest fall from grace in streaming video. This was the original gangster, the luxury brand, the Hermes. HBO was always about not what was on it, but what wasn't on it. And HBO had greater trial across anybody. When something came from HBO, you assumed it was better quality. They they created a culture that attracted and retained the best talent. And in the last 2 years or 3 years at the hands of AT and T, they have absolutely f**ked this thing every which way. They have said, let's junk it up with the Big Bang Theory. Let's call it HBO Max, HBO Go, HBO Now, HBO Joey Bag O' Donuts, and it's just so hard to tell what HBO is. And who's slipping into that gorgeous brand positioning of curation less is more? Apple TV plus with all vertical, all original content. It hasn't been great content so far, but they are stealing HBO's position. And HBO has decided to compete on bulk with Amazon and with Netflix, and they don't have nearly the firepower or the budget. So HBO will go down as a case study in one of the most flawed strategies that has resulted in one of the greatest erosions in brand equity in the shortest amount of time. HBO was probably the premier streaming video platform just 3 years ago, and now they can't get people to sign up. Disney Plus has more. Amazon has more. Netflix has more. And, also, all the HBO shows are on Amazon, and they can't really give that up. Like, that's you know, Amazon's got a lock on those shows, so I don't need to get HBO. I got oh, I get HBO through Amazon Prime. Yeah. It's it's it's maddening for me because I think of HBO. I think of The Sopranos. I think of anything with, you know, the the Larry Sanders show. I think of one of my favorite shows, 6 feet under. I think HBO had some of the most the best moments in media history, an incredible positioning as a luxury brand. Right. They it cost them $75,000,000 to get an Emmy. It cost Amazon 350. They literally had the best culture in the world for creativity, and then AT and T comes in and says, let's scale it and starts chunking it up with all this crap. It's just it's like brand heresy. No. Every, I mean, HBO was really making its biggest arc in the nineties and the early o o's because that's when you start having the Larry Sanders show and the Sopranos and all those things. Yep. And it was like you say, it was a great company culture. I worked there then, and almost everybody I worked there. HBO? Yeah. For about 4 years. What did you do at HBO? So I did all of their websites, and then I convinced them. I convinced Jeff Buechis to let me do original web shows just like they do original TV shows, and it was a I had I had an exceptionally fun job. I basically created my own job, which was doing, you know, shows, but then I would put on the web. And then, occasionally, they would give me money to shoot as a pilot. So it was a I I had a fun time, but what was great was learning from I mean, every executive at HBO ended up leaving to become the CEO of some other media company. Like, that was the training ground of all the executives of the entire industry. So for a while, it was it was the best. And now it's, like you say, it's just it's just a name now. It's nothing. But what am I talking about? I mean, just to give you a sense of how the pandemic is accelerating everything, you had this very uncomfortable feeling in LA that, oh, big tech is starting to play in our sandbox. In a matter of 6 months, tech driven media has absolutely featurized Hollywood. Now what do I mean by that? LA and these companies, Time Warner, Paramount, Universal, I mean, these companies were just titans, culturally, economically, HBO. And overnight, the tanks from Cupertino and Seattle have rolled in and Netflix with so much capital that they've basically featurized business. They featurized the entertainment business, and that is Apple is offering $6,000,000,000 of content for $6 a month. So a $1,000,000,000 of content for $1 a month. Netflix is offering a $1,000,000,000 in content for every 60¢. They're gonna spend $20,000,000,000 on content this year for 12 or $14. And then Quibi, a stand alone entertainment company, comes in with, you think, $1,600,000,000, great storyteller, Jeff Katzenberg, amazing executive Meg Whitman. But that comes down to they were trying to charge $7. That comes down to, like, $4 or $6 for a $1,000,000,000 of content. Because no media company makes any economic sense anymore unless you have cheap capital like Netflix, or you can monetize it by selling another handset or paper towels. So overnight, the entire media ecosystem has become a feature to sell more of the core product of big tech. You've taken what is one of the most robust impressive industries in America, and overnight I mean, everyone was saying, well, big tech's coming for us. It it it was like it it got so late, so early for media, so fast. These companies what the f**k does Comcast do? Peac**k. What is Peac**k? Disney with unbelievable assets is flat over the last 5 years. One of the most incredible companies with unbelievable assets can't figure out what to do right now. Why? Because the deepest pockets in the world that can monetize content through other businesses that trade at a much higher multiple are coming in and flooding the market with amazing programming that the traditional guys just can't compete with economically. So we have an entire industry that has become a feature of big tech. Yeah. I mean, that's why I think there's so much uncertainty now. You know? And uncertainty is always a a a poison for the stock market, but I think the stock market's living large on the stimulus, which hasn't really been absorbed by the economy. It's like it's like one of those, you know, things you eat, which it never gets digested in the stomach. This stimulus money that came in has never been digested by the economy, and it just floats up into the stock market without being fully digested into the system. And then there's gonna be another stimulus package, which is neither here nor there philosophically for me. Like, I hope that people who are hungry get some of the stimulus and can eat again. I mean, they've been eating, but, you know, they there there's been a lot more poverty lately. And I don't know. I just don't know what's gonna happen. I think it's I think the next year is gonna be very telling. And, politically, we're so polarized that that stretches people apart, you know, in terms of the cooperation you mentioned at the beginning of the podcast. Just don't know what's gonna happen. I hope. I mean, I'm trying. I'm a little I'm like you. You and I are brothers from another mother. I think we see things the glass is half empty. By the way, everybody claims to be an optimist. Without pessimists, it's a very dangerous world. You have to have people who say, well, have we thought through x? You wish there had been more people who had been pessimists about the likelihood of a pandemic. When Bill Gates was saying there might be a pandemic, he got really low ratings on TED because everyone's like, Jesus Christ. That guy's a downer. And you so you need pessimists. Right? We need to we need to or or realists, whatever you wanna call it. I do think there's some opportunity there. I'm very hopeful, James, around this election. I think that American voters, 75,000,000 of them, have said yes to science again. I think we've said yes to immigrants, our superpower as a country, our secret sauce. Immigrants, I think we've said yes in a weird way, and I say this as an atheist. I think we've said yes to Jesus. Jesus started with love the poor. I don't think we were loving the poor. I think we're moving back to more I think we've said yes to capitalism. Capitalism is not organic. It requires empathy. It requires a certain level of redistribution of income, or it does not work. I think we've reembraced capitalism, and I think we've said yes to being a good man, being a good dad. I mean, you're a father. What the f**k do you say about Trump to your kids? I have 10 13 year old boys, so you should the president is the most modeled individual for young boys in the world and hopefully young girls. Like, what what behavior were they supposed to model? So I hope we have illuminated a flare for the world to say, be less nationalist, be more cooperative. I hope we're maturing a generation. Everyone says Gen z and millennials are such expecting jerks. I hope they look at us and say, you know, we need to stop arbitraging, taking s**t out of the earth, earth, and spewing s**t into the air. We need to start arbitraging people who don't have a college education and get them to payday loan with their car. We need to start reembracing the North Atlantic Treaty and join hands with our brothers and sisters in Europe. We need to learn from Asian nations in terms of innovation. We need to you know, we just need to get our heads out our asses and embrace science, embrace cooperation, embrace brotherhood, embrace sisterhood. So I'm I'm hopeful we're we're maturing a generation of younger people. I'm hoping that America has has lit the candle again for other western nations to say that empathy, that capitalism, that loving the poor is absolutely back. We have opened the biggest can of stain remover in the history of mankind, so I'm actually very hopeful. I come off this last week feeling and let me put it this way. I hate my life less and less every day, James. Well, that is good news, particularly from the author of the algebra of happiness. Also, most recently, the the author of I was I was gonna bring up the title to, to make sure I get the subtitle right. Post corona, from crisis to opportunity. From New York Times bestselling author, Scott Galloway, and it really is the blueprint for how to think about the world. But even if you agree agree with everything or you agree with nothing, it's a great blueprint to how to think about the world for the next year, 2 years, 3 years. You break down all the the parts of the economy, the you know, where where we're gonna need help, where we might not. And, once again, Scott, it's always a pleasure having you on the podcast. Come on again soon. I appreciate that, James. Stay safe, brother. Thanks, Scott.