Scott’s Thoughts on Noncompete Agreements, Surveillance Pricing, and How to Be a Great Storyteller

Scott speaks about the FTC’s decision to ban noncompete agreements, specifically why it’s another great move from the agency’s chair, Lina Khan, to rein in the power of large companies. He then discusses FTC’s recent investigation into surveillance pricing practices among eight companies, and wraps up with advice on how to be a good storyteller. Music: https://www.davidcuttermusic.com / @dcuttermusic Subscribe to No Mercy / No Malice Buy "The Algebra of Wealth," out now. Follow the podcast across socials @profgpod: Instagram Threads X Reddit 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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• 1:18Scott 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. Hey, Prof G. Hey, Scott and team. Hey, Scott. Hi, Prof G. Hey, Prof G. Hey, Prof G.

• 1:29Speaker 02

  Hi, Prof G.

• 1:30Scott Galloway?

  If you'd like to submit a question, please email a voice recording to [email protected]. Again, that's [email protected]. So with that, first question.

• 1:41Speaker 03

  Hey, Prof. This is Jack, coming to you from horse and bourbon country in Lexington, Kentucky. My question today is about non-compete clauses. I work in medical device sales, specifically in spine surgery. And so because I have a highly specialized field, I'm subject to a non-compete clause in my employment contract. And so my question to you is, from a personal level, is this even going to affect me, the supposed Lina Khan and FTC ban on non-competes? I saw on the news recently that the ban was upheld in the courts and is supposed to go into effect in a couple of months. So does that mean that all of our existing contracts are now void? And how do you differentiate between giving employees the freedom to strike it out on their own and build something for themselves?

• 2:24Speaker 03

  Versus maybe switching companies and taking very, very protected IP with them and leaving the door open for IP lawsuits left and right. And apart from all of that, will this even matter? Is it ever going to come into effect or will it be stuck in litigation for years and years? Until maybe Trump gets elected and fires Lena Kahn and we all pretend this never happened. I'd be curious to hear your thoughts and I appreciate all of your content.

• 2:47Scott Galloway?

  Thanks for the interesting question. So what are non-competes? They're labor contracts that prohibit workers from taking a new job with competitors or starting a competing business during a set amount of time after their employment with a company. This can sometimes be years long. Typically, though, if you go on what's called garden leave or non-compete, they have to pay you during that time. Sometimes, though, a non-compete can mean you just can't go to work for anyone who is considered a competitor. According to the FTC, nearly one in five Americans, about 30 million people, are subject to non-compete agreements. Many experts believe non-compete agreements are behind the stagnation in middle-class income workers pay. The FTC ban on non-compete agreements is scheduled to take effect this fall on September the 4th. According to the FTC, the new ban on the non-competes could lead to the creation of

• 3:31Scott Galloway?

  8,500 new businesses per year and wage increases totaling $300 billion per year. President Biden fully supports a ban on non-compete agreements, saying that they are designed simply to lower people's wages. So what will happen to your non-compete contract? According to the FTC, existing non-competes for the vast majority of workers will no longer be enforceable after the rules effective date. Existing non-competes for senior executives who represent less than 0.75% of workers can remain in force under the FTC's final rule, but employers are banned from entering into or attempting to enforce any new non-competes, even if they involve senior executives. Employers will be required to provide notice to workers other than senior executives who are bound by an existing non-compete that they will not be enforcing any non-competes against them.

• 4:16Scott Galloway?

  Uh, okay. So my view on this is non-competes are horrible for the economy. And I, there are few things I love more about the Biden administration and the competent people they hired that don't end up in jail or don't end up, I don't know, saying their boss is an idiot than what he has done at the DOJ and the FTC with Lena Kahn and Jonathan Cantor. I, so let's look very meta. Corporate profits have had an all-time high, an all-time high. Meanwhile, wages as a percent of GDP have been flat for 40 years. Consumers or workers have not gotten a raise unless they're in the top kind of 10%. Why? Because every

• 4:57Scott Galloway?

  fucking thing we do is a transfer of work and time, i.e. money, from young to old, poor to rich, and from workers to shareholders. There's a healthy tension between capital and labor. And during, for example, the 60s and 70s, it got out of control and labor became too profitable and there were no profits in corporations and the stock market went sideways, hugely mediocre returns for the better part of 20 years, and it was hard to attract investment capital and grow. And so labor had too much power. And there was a series of regulation, the activist investor popped up, and since then, since then, Washington has been weaponized by corporations and almost everything that happens favors the corporation

• 5:40Scott Galloway?

  and shareholders. And this is all tied back to compensation that has increasingly been focused on shareholders. The result is a war on labor and non-competes are a manifestation of that. Do you realize there are now sanitation workers, i.e. trash men, and even hairstylists that are subject to non-competes? These are total bullshit. Now, if you're a very senior level executive that is making millions of dollars and has access to the most sensitive IP of the company, those non-competes will still be enforceable for a while. I get that. I get that. If you're the one top engineer figuring out an LLM for Meta and Microsoft calls and says, wow, we'll pay you 50 million bucks, maybe you should be forced to take

• 6:23Scott Galloway?

  a year or two year off because of the IP. However, however, confidentiality and NDAs cover that type of IP theft. It's not like it's IP theft Lollapalooza. I've been subject to non-competes. When my company, L2, was acquired by Gartner, They had two forms of retention. One was a non-compete. And as soon as I said, I am out of here. I hated here. And that's being generous, saying hate. They immediately started sending me nastograms with on legal letterhead, saying, if you do anything that competes with Gartner, anything at all, we're going to sue you to the ends of the earth. The better way to create a non-compete is, quite frankly, is money. And they did that as well. And it's one of the reasons I hung around for 14 months, not 14 days. Let's just say it was a cultural misfit.

• 7:07Scott Galloway?

  The dog in a large corporation headquartered in Connecticut. Good people, just not my people, if you will. And I wasn't theirs. Anyways, this is an outstanding move by the FTC and by the Biden administration. This transfers some of the power, some of the economic well-being back to labor. Who are you most worried about? Shareholders? Or a single mother who's a hairdresser who can't go to another fucking hair salon because she signed a non-compete in order to feed her and her family? This is total bullshit. This is what government is supposed to do. Non-disclosure agreements? No fucking way. This is wonderful legislation. They should have never existed. You want people to stay with your company? Then here's an idea. Pay your people.

• 7:52Scott Galloway?

  Phew, that was indignant. All right. Question number two.

• 7:56Speaker 04

  Hey, Prof G, this is Kevin from Boston. Huge fan, been listening to you and following you since your now infamous WeWork article. A lot of the things you say about, you know, so the country, the markets, you know, being a father, being a man, just really resonate with me. And I really appreciate all you, all you do there. My question is around this concept of surveillance pricing. I'm not sure you've seen it, but the Federal Trade Commission issued an order against eight companies that, you know, offer products and services that incorporate data about consumers' characteristics and behavior that determine what they end up getting charged. Right? It's, it's not a surprise that this sort of practice happens, right? General market.

• 8:40Speaker 04

  But the, I'm curious to get your take on whether or not you think this is illegal. I have a Federal Trade Commission should, should kind of opine on it. You know, what they should focus on. I know you're a big advocate for higher regulation. Very, very curious to hear your take and appreciate your response and all you do.

• 8:56Scott Galloway?

  That's a really interesting question. The FTC has ordered eight companies to provide information on how they use personal data to set prices based on individual shopper characteristics. The FTC aims to understand the surveillance pricing market where the consumer data, including credit card information, location, and browsing history, may lead to different prices for the same product. The FTC noted that third-party intermediaries reportedly use technology, including advanced algorithms and AI, to do so. FTC Chair Lina Khan said that firms that harvest Americans' personal data can put people's privacy at risk. Now firms could be exploiting this vast stream of personal information to charge people higher prices. The eight companies the FTC sent orders to include Mastercard, Revionics, Bloomreach, JP Morgan Chase, Task Software, Proz, Accenture, and McKinsey & Company.

• 9:40Scott Galloway?

  I'm curious why McKinsey & Company is involved there. I have two minds here. I think this happens all the time. I think if you're browsing or coming into a site from one site that says you're probably a certain consumer, I think they can do variable real-time pricing. There's real-time pricing based on when you buy. Think about pricing discrimination of an airline. If I want to fly Friday to Sunday last minute, I may pay four, six, eight times the price for the exact same seat as someone who booked three weeks before and is staying more than seven days. Because clearly, they've figured out, all right, I'm a business traveler, which means someone else is paying, which means I'm fairly price insensitive. So there's all sorts of discriminatory pricing. It happens.

• 10:25Scott Galloway?

  Prices change on hotel sites, I've noticed. The thing I really don't like, which I think is illegal, when I bought football tickets for Premier League, I'll be shopping for tickets, I'll put them in my cart, I'll wait a minute, and they'll say, oh, I'm about to check out. The price has gone up. I think that is probably illegal, and those companies will probably get swiftly, I don't know, punished, if you will, as they should. But I believe the price discrimination should be legal. You know, I mean, to a certain extent, I used to get student discounts. Is that surveillance pricing? Where you know someone is a student, so you offer them a discount? Seniors, you know, they do it by age. You do all sorts of stuff that, quote-unquote, leverages your personal data to give you different pricing. I'm in favor of competition. Breaking these guys up, not over regulating how they determine their pricing.

• 11:11Scott Galloway?

  So I'm sort of on the side of businesses a little bit here that should have the opportunity to charge a business person more. Uh, but I do think most of these problems go away if you just have more competition. And as a rule, they're charging everyone less money because they know, you know, their competitors, B, C, and D will do the same. Uh, I think this will be interesting. I appreciate the question. Sorry, it's not a more thoughtful question, but in sum, I think pricing discrimination and different prices for different people has been going on forever and will continue to go on one way or another. What we need is more competitors in the marketplace. Thanks for the question. We have one quick break before our final question. Stay with us.

• 11:53Scott Galloway?

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• 12:38Scott Galloway?

  You can download the Bilt app and join the membership for where you live at joinbilt.com/propg. That's J O I N B I L T dot com slash propg. Use our link so they know we sent you.

• 12:53Scott Galloway?

  Support for the show comes from Upwork. Trying to scale your business? At some point, you're probably going to hit a point where you need some help. Sometimes the best way to break through that is bringing in the right talent at the right time. Upwork can help. Upwork is a one-stop platform where you can find, hire, and pay expert freelancers across more than 125 categories. Whether you need specialized skills for a single project or extra support to keep up with demand, it's easy to connect with experienced professionals, review their work, and find the right fit. You can move faster without taking on the commitment of full-time hires. And for businesses that need the very best talent, Upwork Business Plus provides access to the top 1% of freelancers on the platform. AI-powered matching connects you with qualified candidates in under six hours, cutting down the time spent searching.

• 13:36Scott Galloway?

  Upwork also takes care of contracts, payments, and other administrative tasks, so you can spend less time managing logistics and more time focused on what's next. Visit upwork.com/profg right now and post your job for free. That's upwork.com/profg to connect with top talent ready to help your business grow. That's U.P.W.O.R.K. com/profg. Upwork.com/profg. Support for the show comes from Vanta. As AI adoption grows, so does your company's security risks and requirements. New frameworks, audits, and vendors keep piling on, but your team isn't getting any bigger. Most compliance tools promise automation, but you're really stuck doing all the work

• 14:18Scott Galloway?

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• 15:00Scott Galloway?

  That's spelled V.A.N.T.A.com/profg for $1,000 off. Welcome back. Question number three.

• 15:14Speaker 02

  Hey Scott, Mickey here from Denver, Colorado. I love listening to your show, not just because of the content, but because of the way it's delivered. You have an authentic style, and it keeps the listeners coming back for more. A few episodes ago, you mentioned that it took you a long time to find out that storytelling was one of your core competencies. I was fascinated by that because I'd never heard it described as a core competency before. So here's what I'd like to know. What was your journey like? How did you get from being a timid rambler to the expert storyteller you are today? What advice do you have for those of us who want to add storytelling to our set of skills? And finally, how do you take an abstract talent like storytelling and turn it into a

• 15:57Speaker 02

  practical skill for building a business? Thanks for all the inspiration. Can't wait to hear what's next.

• 16:02Scott Galloway?

  Uh, Mickey from Denver. Your voice sounds like it was generated by AI, but it's nice. You could do voiceovers. You could do like a local dealership. You could be like, hi, this is Mickey from Ford of Basalt, Colorado. Come on in to check out our new F-150 Lightning. Anyways, you have a nice voice. Okay, what was the question? Storytelling. The first time I kind of noticed it was when I was eight. And that was my father. I just started recognizing that people seemed to gather around my father and were just enthralled by him. Whatever room he went into, a semicircle would form around him. And I remember asking my mom, why do people like dad so much? And she said, he's charming.

• 16:46Scott Galloway?

  And my dad has this Scottish accent and is funny and has a strong jawline. He's quite handsome. And he would tell these stories and these jokes and a twist of phrase. And then he would do what is the easiest way to get people to laugh at your joke. He would bust out in laughter after he ended his joke. And he was also had a good turn of phrase. He was thought of himself as kind of a big picture thinker. And he would have people over and regal them with stories about, you know, what is the key to a successful management? It's a good job description. And he, I just noticed very early that kind of storytelling and being able to hold a room was really important. And then it wasn't really storytelling, but I wasn't, in kind of junior high school and

• 17:29Scott Galloway?

  high school, I was exceptionally tall, exceptionally thin, and I had really bad skin. And that wasn't a recipe for getting a ton of dates. And I found that. My ability to get a date or have someone hang out with me or have friends hang out with me was a specific form of storytelling and that was humor. And I really spent a lot of time thinking about, not thinking about, but trying to be funny. I won most comical and Steve Martin, I'm dating myself, in my high school poll, which is kind of a thing around storytelling. I didn't really decide, oh, I was going to be a great storyteller. And the first time I thought I might have a talent for this was in graduate school, I was selected, I love this because I get to talk about me, in graduate school from

• 18:12Scott Galloway?

  Berkeley, I was selected as the student speaker to give the commencement speech at our graduation ceremony. Other people recognizing that you have a decent gifted gab makes you think, wow, maybe I could make a living at this. But I never even then thought of myself as a storyteller or someone who's going to make a living there. But what has really helped me is, I would say, there's really kind of, there's a few things. One is, I think to be a great storyteller, you need to be a competent writer. I think writing, the ability to write and string together your thoughts in long-form writing helps organize and kind of really strain the muscle. I think writing is the most difficult thing I do, but it damages the muscle and it grows back stronger across all communication. I think that is the base. If you show me an incredible storyteller, I'll show you someone, even Ronald Reagan

• 18:57Scott Galloway?

  wrote Lovely Notes, who can write fairly well. Then the second, it sounds very passe, but getting a lot of practice. Now, keep in mind, for 22 years, I stood up in front of 60, 100, 300 consumers and told a story for 80 minutes called A Class at NYU Stern, where they were paying me a lot of money to be very entertaining and insightful and educational for 80 minutes. See, above, I charged my classes, at one point, we're getting $170,000 in tuition per class. And then consulting is essentially storytelling through writing, through PowerPoint. So what are we going to do? We're hopefully going to have some talent, but you can't control that. We're going to get comfortable writing. We're going to put ourselves in a position of speaking in front of others, which can be painful, but it's important to do that early. And then we're going to find a medium. And I do this in my class.

• 19:41Scott Galloway?

  There are so many mediums now to be a storyteller. TikTok, Medium, writing long-form posts on Medium, Substack. Texting is a form of communication. Obviously, writing books, writing articles, speaking. I mean, there's just so many, putting out. You know, putting out YouTube videos, whatever it might be, your ability to tell a story on a different medium is, in my opinion, the key skill. So what are you going to do? You're going to start practicing. You're going to pick a medium. You're going to say, what would it mean to be on the top 1% of people on Instagram? That means I would need this many followers and this type of engagement. I do this in my class. I task everyone with picking a medium and saying, I'm going to be in the top 1% on LinkedIn by the time this class ends. And you figure out the nuance and the subtleties of storytelling

• 20:22Scott Galloway?

  in that medium. Be clear. This is the gangster skill. Storytelling, storytelling never goes out of style. It is enduring. 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]. This episode was produced by Caroline Shager. Jennifer Sanchez is our associate producer and Drew Burrows is our technical director. Thank you for listening to the Prop G Pod from the Vox Media Podcast Network. We will catch you on Saturday for No Mercy, No Malice,

• 21:06Scott Galloway?

  as read by George Hahn. And please follow our Prop G Markets pod wherever you get your pods for new episodes every Monday and Thursday.

• 21:15Speaker 05

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• 21:43Speaker 06

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