Office Hours: Tesla’s EV Charging Partnerships With GM and Ford, the Death of Reddit As We Know It? and Prioritizing Happiness When Making College Decisions

Scott gives his thoughts on Tesla becoming the EV charging standard. He then takes a question about Reddit’s decision to begin charging for access to its API. He wraps up with advice about making college decisions and says the key is asking yourself, “where will I be happiest the next four years?” Music: https://www.davidcuttermusic.com / @dcuttermusic Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Scott Galloway?

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• 0:48Speaker 01

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• 1:26Scott Galloway?

  Welcome to the Prof G Pod's Office Hours. This is the part of the show where we answer your questions about business, big tech, entrepreneurship, and whatever else is on your mind. If you'd like to submit a question, please email a voice recording to [email protected]. Again, that's [email protected]. First question.

• 1:44Speaker 02

  Hello, Scott. This is Mike from Columbus, Ohio. Ford and General Motors both announced that they would be adopting the Tesla Supercharger standard. I believe this is game-changing as Tesla Superchargers are light-years ahead the hot pile of garbage that is Electrify America and any other public charging network solution currently available.

• 2:09Speaker 02

  My question for you is should Tesla transition from being a car company to being a supercharger company? I would believe that the margins that Tesla could obtain from licensing out the supercharger standard and operating that network be significantly higher than the manufacturing intensive, low margin automotive business. Always appreciate your thoughts. Thank you.

• 2:35Scott Galloway?

  And Mike from Columbus, Ohio. It's a really thoughtful question and I'm sort of pregnant with a comment and that is you think that it's, it would be a good transition for Tesla. And there's a lot of merit to what you're saying. By the way, let's bring this back to Ohio. When my dad got divorced and married his third wife, I think it was number three, he got transferred to the headquarters of O M Scotts in Worthington, I'm sorry, in Columbus, Ohio. And we lived in Worthington, Ohio. And I used to caddy at Worthington Country Club. I was 13, I think I was about five foot eight, 110 pounds maybe. And I used to holler around two, I used to do double bag, two ram golf bags in the 90 high humidity degree weather in Ohio in the summer.

• 3:19Scott Galloway?

  I mean, it is shocking. I didn't die from heat stroke. And I do this and I think I would get 12 bucks, maybe 15 bucks if the young woman or the woman of lunch who was, I was caddying for on a Saturday would, would pay me. Shit, that was tough work, but it builds character, but it builds character. Also a nice place to live, fireflies, summer barbecues, nice people. I like Ohio. Anyways, what do we have here? Some background, General Motors is following its rival Ford and partnering with Tesla to use their charging network and technologies. And I believe, starting in 2025, both will begin to install Tesla's charging port known as NACS. I don't know if that's NACS or NASIS, but I think it's just NACS instead of the current industry standard CCS.

• 4:04Scott Galloway?

  And by spring 2024, GM and Ford vehicles will have access to 12,000 of Tesla's chargers using an adapter. GM CEO Mary Barra told CNBC that because of this deal, GM expects to save up to 400 million of her previously announced $750 million investment, building out EV charging. Investors are seeing this as a win-win situation and view this as a stride toward establishing unified charging standard for the next American market. Both GM and Tesla stocks were up about 3% during after hours trading when it was announced. Elon Musk has said, That this will really even the playing field, continuing that the most important thing is that we advance the electric vehicle revolution. He's so fucking full of shit. I mean, seriously, this guy could not be, he would do anything to level the playing field. This is amazing

• 4:47Scott Galloway?

  for Tesla. And it's no accident. I think the stock's up 20 or 30% in the last month. What is this? If a Tesla Falcon X or Model S is the iPhone, this is the App Store. This is them establishing the operating system of the standard that all other apps will be built on top of. They are now the operating system for charging. And I don't know what that means in terms of pricing power, what the agreement means in terms of their ability to charge for access to their charging station, but they have now built out the infrastructure. That's what these firms do. They build out an infrastructure that everybody has to use, and then they run away with it. Because once everybody throws in the hat and is using theirs, that gives them, the incumbent with the infrastructure, more and more capital,

• 5:29Scott Galloway?

  and no one can make the requisite investment to catch up to Amazon's overnight infrastructure, to catch up to Netflix's $18 billion a year of content investment, to catch up to the App Store. I mean, Google couldn't catch the App Store. So this, quite frankly, I don't think this is great for GM or Ford. It is great for Tesla. And I would imagine charging is a very high margin business. But Tesla has essentially launched the App Store. And if you really look at what, if you really break down, what is the most profitable business for Apple, which drives, I don't know, a trillion of the $3 trillion business, maybe one and a half trillion of it is the iPhone, a half a trillion is the other hardware, but one trillion plus is the App Store, and they've established the operating system

• 6:10Scott Galloway?

  for apps. And is that what Tesla's doing here? I think there's a link between its stock going fucking haywire, such that the wealthiest man in the world now doesn't pay his bills. Thanks for the question. Question number two.

• 6:23Speaker 03

  Hey Scott, this is Joe from Hood River. Love the podcast. I've been following you since the early days with Kara. Anyway, I'm curious of what you make of the situation with Reddit. Reddit has been gearing up for their IPO for what feels like almost a decade. I've been on Reddit for about 12 years. I migrated over from Dig. Both of these sites had this concept of being the front page of the internet. It's where you'd start your day, get your news, have some discussion. And as far as the social media platform goes, um, I don't use any other social media. And in listening to critics of social media, they describe Reddit as having the internet equivalent of urban planning and community involvement,

• 7:08Speaker 03

  community leadership. So they kind of think about it as a, as the good ones. And I tend to agree with that. I like Reddit, but I'm not loyal to Reddit. And so I look at what CEO Steve Huffman is doing, uh, frankly, just antagonizing its users. And the value proposition of Reddit, as far as I can tell, is really twofold. One is you've got these rich discussions and a lot of content being created that can be used to train L L Ms. Reddit's talked about doing this. And then like every other social media platform, it's advertising. So Reddit's never been profitable, uh, by their own admission. Scott, I'm curious, in desperation to get this IPO out the door. Do you feel like Reddit and Reddit's leadership has overplayed its hand?

• 7:53Speaker 03

  Do you think users will go to another disruptor, which feels frankly, pretty easy to stand up?

• 7:58Scott Galloway?

  Uh, this is, uh, super interesting. So Reddit has been the company that, you know, was going public soon for a while now. According to Bloomberg, Reddit submitted confidential IPO documents at the beginning of 2022, uh, aspiring to go public with an estimated valuation of about 15 billion. Think about that, 15 billion. And late May, Fidelity cut Reddit's valuation by 41%. This comes after Fidelity led Reddit 700 million funding round in 2021, where Reddit was valued at 10 billion. So what they're saying is they think it's worth around 6 billion. Anyways, in early June, the Wall Street Journal reported that Reddit would be laying off about nine employees or 5% of its staff. And shrunk its hiring plans by two thirds. These developments happened as Reddit pushes to monetize its data. CEO Steve Huffman announced that, starting July 1st,

• 8:42Scott Galloway?

  Reddit plans to charge third-party apps with higher usage needs. Reddit says 90% of third-party apps will continue to have free access, but bigger third-party apps will have new API costs of millions of dollars. The app Apollo confirmed it will cost them about $20 million a year under this new price point or price scheme, which means that they claim, means they would have to shut down. As a result of this announcement, moderators overseeing 7,000 subredditors went on strike. These moderators aren't paid. However, researchers at Northwestern University estimate moderators on Reddit contribute 3.4 million worth of labor every year. Look, there's two sides to this trade. I understand Reddit's kind of shaggy and granola and has this community feel. But folks, that's a wrap. Okay, they're a for-profit company.

• 9:26Scott Galloway?

  They have investors that want to make money. They have employees that want to develop economic security for them and their families. So getting a huge following with free products or a freemium model and then kind of flipping on a switch and starting to charge people. Well, folks, Twitter did the same thing. What do you think Meta did? Remember when Meta offered brand pages? Hey Nike, hey Adidas, have a page, a brand page, and you will own your own captive consumer pool. You'll have a million, 2 million, 3 million evangelists, and you'll have direct access and direct communication capability with them. But you need to advertise to build up your community on your brand page. And they got into wars and the number of people they had on their brand page is sort of a proxy for the brand equity. And then boom over and then they said, just kidding. You have to go through us. You're not going to know who they are.

• 10:11Scott Galloway?

  You got to advertise and we're not going to let you know who in fact signed up for the Nike brand page. A friend of mine, Mike Lazaro, a super impressive entrepreneur, started a company called Buddy Media that used to be basically in the business of, I think, managing and maintaining these brand pages and sold for 700 million to Salesforce. If he'd sold six months later, if he could have sold, it would have been 70 million. So his timing was good there. But this is nothing. Then almost every tech company doesn't do it. It all comes down to who has the leverage here. If there's enough large customers who have a substitute and decide that that substitute is a better value and they leave, then Reddit's gonna have to rethink its strategy. My gut, my gut is this too shall pass, that it's a very vocal minority.

• 10:56Scott Galloway?

  I would love to see the numbers. I would speculate the actual traffic has not gone down very much. And you have a company that's losing money. So they've got to make money if they want to go public. And this is their leverage. So there's two sides to this trade. Does the customer want to continue to patronize Reddit? Or will Reddit have inspire such a gag reflex that people don't see it as a good value? And they start losing traffic and engagement and ultimately revenues? This is just, this is what capitalism is. My bet is that this passes and that Reddit goes public and that it's a monster IPO, because I think a lot of water is building up behind the dam. There are hedge funds that do nothing but invest in IPOs. And the IPO market has been in a deep freeze. Did you see the Kava IPO? Oh, my God, I don't even know what Kava is,

• 11:41Scott Galloway?

  but it doubled on its first day of trading. What the fucking, what the Kava? What the Kava? Kava de Vasco, wasn't that an explorer? I think it was meant head of a cow. Kava de vodka, that's right. Remember the explorers you learned in the fifth grade? Anyway, I don't buy the preciousness of these people. This is nothing that every company doesn't do. When they have leverage, they raise their prices. You know, is it a little bit harsh? Is it a little bit incongruent from what people thought the brand was? Is this almost like a co-op that wasn't supposed to bank money? Maybe. But I would bet that this vocal minority gets less and less screechy and that they go public and it's a pretty big valuation here.

• 12:26Scott Galloway?

  In sum, in sum, you know, we live in a capitalist world. If you don't like what Reddit's doing, go find another platform.

• 12:35Scott Galloway?

  We have one quick break before our final question. Stay with us.

• 12:43Scott Galloway?

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• 13:27Scott Galloway?

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• 14:00Scott Galloway?

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• 15:13Scott Galloway?

  Welcome back. Question number three.

• 15:15Speaker 04

  Hi Scott, this is Joe from Toronto. My son is a rising high school senior and is contemplating where to apply to university in the US next year. He's generally intent on pursuing a career in business and is interested in things like finance and business analytics. He's especially passionate about how data is used in sports. However, he's also shown considerable aptitude in courses like AP History, AP French, and Music. His marks are quite good all around and when he applies himself, which is consistently, he performs very well and should have some pretty good options for post-secondary. My question is this: if you were counseling a high school student today, or perhaps more pertinently, if you were advising your own kids, would you recommend to a young person who's interested in business

• 16:00Speaker 04

  that they should pursue an undergraduate degree in business? Or would you favor a more broad-based liberal arts approach during undergrad and eventually do an MBA post-grad? For some added context, I graduated with a degree in political science in French and now teach brand architecture and storytelling as a college professor at a business school. His mom did an HBA and an MBA and is currently a high-level investment executive. So he has solid influences from each path. By the way, you're not settling a bet for us or arbitrating divergent parental points of view here. We both see the merits of either approach and so I'm interested in your point of view as someone who's both taught in a business school and was a business school student himself. What would your advice be?

• 16:45Speaker 04

  Thanks very much Scott. My son and I enjoy listening to your podcast together during our time in the car.

• 16:51Scott Galloway?

  So Joe from Toronto, the nicest thing almost anyone ever says to me is that they listen to this with their son or their daughter. It just, I was at the pool today and someone said that me and my husband listened to it. It just, it just means a lot to me. It's nice that, um, I don't know, it's nice to think you're solidifying relationships. I think the key to happiness is deep and meaningful relationships. And it makes me feel relevant. It makes me feel masculine. It makes me feel successful to think that this content helps strengthen that connective tissue. Anyways, congratulations. You have a son that is taking AP History, AP French, and Music and applies himself. You're kind of, you've kind of hit the lottery in terms of sons. This is sort of a good problem.

• 17:36Scott Galloway?

  Sounds like your kid is on track to go to an elite university, whether that's a Michigan, or a Tulane, or a Vanderbilt, or, you know, a Claremont. You know, there's just so many amazing, good schools. A Carnegie Mellon, I don't know if he's in that weight class in terms of elite schools, but it sounds like he's going to go to a great school. Most people don't have that opportunity or that money. And I would suggest that sooner rather than later, those folks need to focus on a specific skill and find something they're good at, more vocational programming. And one of the things I don't like about America is that we seem to shame vocational programming and want to stuff everyone through a traditional four-year liberal arts degree. And not everyone is cut out for that. Having said that, it sounds like your kid is cut out for that. So what would I recommend?

• 18:19Scott Galloway?

  I think once you get into a good school, first off, I think he picks the school where he wants to live for four years. I wouldn't focus on, I mean, did you know what you wanted to do at 18? I mean, he may think he knows what he wants to do. I thought I was going to be a pediatrician. And chemistry disabused me of that notion really fast. So I don't know, whatever your son is planning, what I would say is, pick a great university where you think you're going to be really happy for four years, where you just, you go on campus and think, I think I could be really happy here. And then your first one or two years, take a little bit of all of it and see where your skills lie. You know, are you great at economics? Are you just, you just think, you know, I take to history really well and I'm really good at this?

• 19:02Scott Galloway?

  Because in terms of even if you want to go to business school and decide, and I think the MBA is an amazing graduate degree, it's kind of the athlete's degree. You can do anything with it. I think it's a fantastic degree. But to get into business school, you just need to be an impressive, well-rounded person. You don't need to have a degree in, an undergraduate degree in business or finance. We love ballerinas, we love musicians, we like that stuff at business school. Now granted, you're going to have to take a GMAT and you have to show some ability to a certain base level of finance. But I would say more importantly, your criteria should be taking your son on college, a college tour, which by the way, I think is a really fun thing to do with your son, and really say, where are you going to just be happy and thrive?

• 19:46Scott Galloway?

  Like, where are you just going to love those four years? Because America does a small number of things really, really well. We make the best weapons in the world. We make the best weapons in the world. No one can deliver violence around the world like the US because of our brave. Men and women in uniform, the amount of resources we apply to it, our technology and our weapons. We do outstanding movies and media involving men in tights and capes. We're really good at that. We have the best software and technology in the world. If it's AI, it's American. What do we also do better than anyone in the world? College. The Michigan Wolverine football games, the quad, Royce Hall, concerts at Royce Hall at University of California at Los Angeles, Gator games at the University of Florida,

• 20:30Scott Galloway?

  computer science departments, or the robotics department at Carnegie Mellon. We have the best, hands down, university experience. It is a singular experience. And what you want to say to your son, in my view, is where are you going to have the singular singular experiences? What classes you take, what you end up studying, it doesn't matter. If he goes to an elite school and he's good and he finds something he's good at, the rest will sort itself out. The rest will sort itself out. So don't let the tail wag the dog here at 18. Find a place he's going to be happy. If your son has the skills, hopefully, and the credentials to get into more than one university, get into a few and then call them and start negotiating. We'd really love, we'd really love to come to Vanderbilt,

• 21:13Scott Galloway?

  but we're getting a scholarship at UVA. Both amazing schools, by the way. What can you do for us? And guess what? Guess what? Especially among competitive schools, they usually will offer you something because they have something called yield. They want to see if 100 people get into Duke and UVA, they publish how many people chose each. And it matters a lot to them in terms of prestige and rankings and their self-aggrandizement and arrogance, which is in no short supply at universities. Anyways, let me just sum up by saying, good for you, man. Good for you, my brother. You got a son who's taking AP French and AP History and is thinking about going to college and doing well. That's amazing. That's amazing.

• 21:55Scott Galloway?

  One question for him. One question. Where do you think you're going to be happiest for four years? Let's ignore the subjects. Let's ignore the classes. Where are you just going to love life for four years? Thanks for the question. That's all for this episode. If you'd like to submit a question, please email a voice recording to [email protected]. Again, that's [email protected].

• 22:28Scott Galloway?

  This episode was produced by Caroline Shager and Jennifer Sanchez is our associate producer and Drew Burrows is our technical director. Thank you for listening to the Profite Pod from the Vox Media Podcast Network. We will catch you on Saturday for No Mercy No Malice, as read by George Hahn, and on Monday with our weekly market show.

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