Office Hours: LinkedIn’s Learning Opportunity, P&G and Unilever’s Gangster Move, and Making Cities Affordable

Scott answers a question about how LinkedIn can become a stronger platform for educational content. He then shares how consumer packaged goods giants can innovate to stay relevant, and offers his thoughts on what would make tech hubs more livable. 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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• 1:26Scott Galloway?

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

• 1:43Speaker 03

  Hey Prof G, Michael here. Brand Strategy Sprint alumni and a resident of the great city of East Virginia. My question is about LinkedIn. You've talked a lot about it being a great platform, but could they do more with content creators? Over the last two years, there's been an explosion of influencers and writers on LinkedIn, all making great content. Could LinkedIn use this to overhaul its stale and outdated LinkedIn learning platform? My thought is TikTok meets MasterClass with all the best content creators in one place. And of course, they would be paid. Thoughts?

• 2:12Scott Galloway?

  Michael from Richmond. That's a thoughtful question. I love LinkedIn, mostly because I find it's a more civil place. Why is it more civil? Because you, I think, two basic reasons. One, you have to have your identity. I think identity is so powerful. We're talking about Airbnb. The reason Airbnb and Uber work is because of identity, specifically. The driver has to be pre-screened and the person in the back of the car, the organization has your identity. So if you steal from the driver, they know who you are. You're not gonna let just anyone show up and crash in your apartment, but they have their identity. You also can hold responsible the owner of the apartment if they don't live up to the contract because why? We have their identity. And I think the same is true with LinkedIn, and that is you're just less likely to slander

• 2:54Scott Galloway?

  somebody. You're less likely to make hateful comments. You're less likely to be a total racist or weirdo or misogynist when your actual identity is on the platform. I think that's something that the, all the different platforms need to do a better job enforcing. Also, there's a general notion that anyone on LinkedIn, you might at some point in your life ask for a job. So I think people just tend to be, they just keep the temperature a little bit lower. I like it a lot. I find that I try and keep my temperature a little bit lower. I try and play my role. I don't get back in people's faces. I have noticed, though, it is getting a little more coarse in the last 12 months. I don't know if that's because more people are spending more time on LinkedIn,

• 3:32Scott Galloway?

  but I do find that you do get a little bit more of that dunking, bro-y feel on LinkedIn. It's still a much better than a place like Twitter or Facebook or some of the others that can just be just a fucking sewer. But anyway, so the idea of them overhauling sort of their stale learning platform, I've always thought, so I started coming called Section 4, which is an online education company. And entrepreneurs will say they never think about the exit, right? They just wanna build a great company. That's sort of bullshit. In the back of my mind, where I was thinking about an exit. And I've always thought that the most likely acquire, if someone said, okay, Section 4 was acquired, I always thought, okay, the most likely acquire,

• 4:18Scott Galloway?

  if I had to guess, would be LinkedIn. I think LinkedIn has an incredible opportunity to get into education. They have made some purchases in the education space. I think they bought Lynda with that. I think that was LinkedIn for over a billion dollars. I would argue their video and their education are somewhat, are pretty anemic right now, pretty flaccid in their opportunity to do kind of higher-end.

• 4:43Scott Galloway?

  Asymmetric and symmetric learning are really powerful. And also to partner with, say, an ASU who's very innovative and very open minded, or a Purdue, and start offering some sort of certification, maybe partner with some land-based universities and offer some offline component. I think education is going to be a hybrid. I don't think it's going to be all online or all offline moving forward. I think it's going to be a mix of the two. But LinkedIn has the capital, they have the credibility, they could absolutely get into certification. Microsoft could say, we're going to hire 2,000 or 3,000 people out of these online certifications programs brought to you by LinkedIn. So I think it's a huge opportunity, education. It's a $750 billion business in the US. It's about $2 trillion, I think globally. The costs have skyrocketed without really any increase in outcomes in terms of the

• 5:27Scott Galloway?

  salary you get. And also, we have this crazy rejectionist culture with our offline institutions where they artificially restrict supply so we can all feel good about ourselves, that we got into a school that no one can get into now. So I think it's a huge opportunity. I'm sort of in violent agreement with you. And to date, they really haven't executed across it. So LinkedIn, LinkedIn University, LinkedIn Micro Certification, things like Health Tech, things like cybersecurity, that just seems like a win. Or maybe even lifelong learning, you sign up for a premium product that is membership based, that gives them more recurring revenue. Again, one of the reasons Microsoft was the most valuable company in the world for a short time last year, and I think it's number two or three now, is that LinkedIn has been an outstanding asset.

• 6:09Scott Galloway?

  But it does feel like an asset that's been lying fallow, that if they were to get into some sort of recurring revenue education offering, they'd sort of commanded the space they occupy. So I think that's a great idea. So thank you, Michael, from Richmond. I'm kind of, I'm kind of down with that and agree.

• 6:24Speaker 04

  Question number two. Hey Scott, it's Fletch calling from London. Quick question. If you were an activist investor taking a board seat on one of the large CPG conglomerates, think PNG or Unilever, what's the gangster move? What can these companies do? They seem to have been caught with their shoelaces firmly tied together with regard to anything digital. How do they, you know, elite frog competition? What's the move for them? Does it simply break them up? What would you recommend?

• 6:57Scott Galloway?

  Fletch from London. What's with all the cool names from whatever? I'm Scott from Delray Beach. That blows. Fletch from London? CBG and What's the Unlock there? I've worked with both P and G and Unilever and the majority of CBG firms are the bigger ones. And they would ask the same question, what's the unlock? So I thought they were in real trouble because if I look at the advertising industrial complex, it's collapsing on itself. And that is the basic notion that you pummel people with advertising to cement these very aspirational associations such as you can produce a mediocre product, stuff it through these non-aspirational channels of Kroger or JCPenney's and then hope that people will buy your shitty salty snack, sugary drink, or a tennis shoe, or shitty car out of Detroit,

• 7:42Scott Galloway?

  and pay ridiculous margins because it makes them feel more American, or more younger, or more European, whatever it might be, or more maternal. I think the sun has passed midday on that. At the same time, so I reverse engineer and say, okay, the companies that have, are dependent upon the advertising industrial complex are in trouble. And I think that's playing out. I would say it's kind of playing out with Facebook. Facebook is the Yellow Pages just 40 years ago. The Yellow Pages are an incredible business, but they weren't far enough down the funnel. And I think that's what's happening a little bit to Facebook right now. So what can they do? And I spent a lot of time with a lot of people at P and G and Unilever talking about it. One, their stocks never really went down that much. Nelson Peltz went in, got a board seat. I thought it was ridiculous for P and G to circle the wagons the way they did.

• 8:27Scott Galloway?

  The easiest way to shut an activist up, and I speak from experience here, is just to put them on your board and say, fine, come on in. The water's just fine, and you can deal with the same problems we're dealing with. And if you have any brilliant ideas, we're up to it. But instead, P and G pulled the same bullshit, kind of reflex, gag reflex, that we're in charge, and anyone who would question our authority, we're going to fight tooth and nail. Huge distraction, hugely. This is what happens when you go into a new situation, including when you're an activist that goes into a board. You find out in quick order that you're not as smart as you thought, and they're not as dumb as you'd hoped. And that they're dealing with these issues. Now, P and G and Unilever, here's the thing. They're both remarkably innovative. It is not easy to manufacture a diaper or a razor.

• 9:10Scott Galloway?

  Unilever has been fantastic at benchmarking. When I say benchmarking, I mean going into the Indian market and finding out what type of moisturizer is selling like crazy that feels crafty and authentic and new and different and basically copying it and then leveraging their capital and their distribution. So Unilever is very innovative, considered one of the best media buyers in the world. P and G has fantastic innovation, Tide Pods, the way they're packaging. They're world-class companies. Now, my go-to around what they should do and what I recommended is really falls into the same song that is the Serenade of the Dog. And that is one, recurring revenue bundle or subscription, that they should probably

• 9:50Scott Galloway?

  get together and say, all right, let's look at food, let's look at home products, let's look at laundry, and let's offer people an amazing deal and just go into recurring revenue and say, we're going to learn from you and we're going to just automatically fulfill all these wonderful products across the home, in your refrigerator, in your drawers, and we're just going to automatically fulfill it with great products and we're going to go put you on a subscription model. That was kind of what I recommended. They tried a couple of times at P and G. I think they had to go much broader and much bolder, and that is reach across different categories and really try and take decision-making down, saying, we're going to adjust and calibrate using technology. And if you're the recent college grad or you're the family with two people, that's

• 10:32Scott Galloway?

  quote-unquote, "the heartland of America," maybe you don't have a price point that's very high, so you want generics, you want good value. Maybe you're what's called the urban sophisticate, you know, you're the banana republic person and you want sort of accessible cool. And they merchandise across, and if I were them, I would all bind together to offer products and information across kind of corporate boundaries here. That was my first idea. My second idea was that... I think they need to go vertical. And that is, and I've mentioned this a few times to drinks companies. Think about what Sephora did for the beauty industry. I can't figure out why someone hasn't done that to the drinks industry. When I go into Sephora, I'm not into makeup. I'm not into beauty, but I love going into Sephora. I just find the products there, the presentation, the packaging and the cast,

• 11:17Scott Galloway?

  that is, the people that work there, inspiring. And I think they've done an amazing job with the experience and the process of discovery and the in-store environment. And I can't figure out why the places I buy alcohol feel like I might get shot. They're just not, you know, Liquor Barn? I mean, they're just, oh, God, I'm going to hear it from Liquor Barn. Or going into a 7-Eleven or a bodega. I mean, it's just, they're just awful. And you think about such an incredibly high margin, high price point, wonderful product with all the ceremony. There's got to be something between, you know, 7-Eleven and going wine tasting in Sonoma. There's got to be distribution that is somewhere in between. So the CPG companies, one, a recurring revenue bundle, a subscription model. And two, going vertical.

• 12:01Scott Galloway?

  And that is offering branded P&G Unilever, maybe they do it together, stores that offer, that give them an opportunity to really bring their brands to life. Those are sort of my two go-tos. But I think these are actually pretty good companies. So I'm not, when I looked at them, I thought they were going to have a much tougher time. Their stocks, to me, feel like they're not crazily undervalued. And what you're talking about here is operational activism. And that is not get rid of the CEO or sell the company. It's reconfigure the divisions and the org structure, which is real hard work. Thanks for the question. We have one quick break before our final question. Stay with us.

• 12:42Scott Galloway?

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• 13:27Scott Galloway?

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• 13:45Scott 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.

• 14:28Scott Galloway?

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• 14:56Scott Galloway?

  Welcome back. Question number three.

• 14:58Speaker 05

  Hey Prof G. My name's Cameron and I work as a firefighter for a medium-sized city in Silicon Valley. Although home to some of the country's largest and most innovative companies and record high evaluations, firefighters and their families are struggling to be able to live near the communities they serve. Anyone hired in the last decade and trying to afford a home is usually moving two to five hours away. Some are even starting to move their families out of state. This also makes it hard when trying to hire as people are becoming interested in working somewhere they can afford to live. Add on top of that all the budget challenges we faced with COVID-19 and my city's in a very dire staffing shortage. This isn't unique to firefighters. It includes teachers, hospital workers, and many others.

• 15:40Speaker 05

  My question to you is, what can cities do to help capture more of the revenue companies are making without totally stifling growth and incentivizing them to move or outsource? Are there any good examples you've seen anywhere in the world? I know a collaborative solution exists. I just don't know if it exists yet. Curious to hear your thoughts. Thank you.

• 15:59Scott Galloway?

  Wow, Cameron from Silicon Valley. That's a really interesting question and it's sort of the age-old problem that a lot of cities face around trying to attract people to support infrastructure. The median price for a Bay Area single-family home reached $1.13 million in September of 21. That's up 16% year-over-year. Our guest, Margaret O'Meara, wrote that tech hubs, including Silicon Valley, Austin, and Seattle, first emerged alongside massive public investments in education, research, technology, and infrastructure. Those investments meant that people from modest backgrounds were not only able to afford to live in those hubs, but also benefit greatly from the opportunities created there. That's changed since the 70s when political leaders embraced tax cuts rather than social spending as the chosen vehicle for economic growth.

• 16:42Scott Galloway?

  And since then, the federal budget for research and advanced technologies has steadily declined as have state budgets for higher education. To quote Professor Omera, "For every job gained, regions sacrificed tax revenue and funnel limited resources away from wider public needs." We've just slowly but surely decided to privatize a lot of the gains that were brought by public investments, specifically, public investments in R&D, whether it was space, defense, the internet, and we've privatized the gains from those investments as opposed to reinvesting those proceeds in public infrastructure. So, some additional thoughts here. I think it's government investment. I think when government goes in and regulates and tries to create rent control, for example, I think that's a terrible idea.

• 17:25Scott Galloway?

  Rent control ends up ultimately being housing discrimination. Santa Monica had rent control and what it meant was every landlord was giving their $300 a month apartment to this rich, white yuppie couple. Co-ops are housing discrimination in New York, where we get to interview people and ask if they're planning to have kids. Literally, someone on my co-op board asked someone who was trying to buy an apartment there. I found these things just so ridiculously weird and offensive. Anyways, I don't like rent control. I think it makes sense for city councils to only approve projects or use their leverage to approve residential projects if they include a certain amount of low-income housing, but that should be pushed down to the local level.

• 18:07Scott Galloway?

  I do think that we're probably going to need to have some sort of, I don't know, interstate tax. I think that when Elon Musk benefits from the huge investments that California's made in its education system, and then when he's sitting on top of a $200 billion long-term capital gain, that if he pieces out to Austin and just in time to start liquidating some of that and pay 0% state taxes back to California, that feels wrong. There's something wrong there. He states, "Well, I'm going to pay taxes," or California taxes on my options, and that's true. Options are taxed at... Where you vested them. And so even though he hasn't monetized his options, if he's vested half of them over a four-year vest, if he was in California for those two of those years, he has to pay the 13% or the 14%.

• 18:52Scott Galloway?

  I think we're going to end up with something similar on capital gains, and that is they're going to look at where you actually registered the gains and make an estimate and come after you if you moved from New York to Florida or from California to Texas, what have you. So the first is what I would just call basic tax equity. And then we're also, I think capitalism in the market is going to sort of be left to take care of some of the rest. And that is if the fire station can't find fire workers or firemen or firewomen, they're going to have to raise their prices and the city's going to have to decide whether they're going to pay them more to attract them. There's two sides to every trade and people have to decide where they want to live. And if people keep moving or keep leaving California to go to Texas or Nevada, then

• 19:36Scott Galloway?

  at some point, those companies and those governments are going to have to figure out what to do about it. For the better part of a century, everyone was moving to California. So I think this is a natural part of the cycle where the taxes and some of the urban blight means people are leaving. I think that's probably a good thing. Cities like products. They ebb and flow in terms of how attractive they are. The migration here in the US is pretty obvious. It's kind of based on two things. It's sunshine and low taxes. But I don't think there's a silver bullet. I think 80 to 90% of this has to be left up to supply and demand and quote unquote, the invisible hand of the market. But institutions can do something about it. And also, I just think baseline that individuals who benefit from these massive investments

• 20:18Scott Galloway?

  in infrastructure should have to pay based on where they accreted that wealth. They shouldn't be able to just peace out and recognize a huge economic gain. Who's moving to Miami? A VC sitting on top of $100 million in a capital gain. When I meet someone who's moving to Miami, I even sometimes say to them, let me guess, you're about to sell a shit ton of stock in something or register a huge capital gain. Anyways, thanks for the question. That's all for this episode. Again, if you'd like to submit a question, please submit a voice recording by visiting officehours.probtgmedia.com.

• 20:55Scott Galloway?

  Our producers are Caroline Shager and Drew Burrows. Claire Miller is our assistant producer. If you like what you heard, please follow, download and subscribe. Thank you for listening to the Prof G Pod from the Vox Media Podcast Network. We will catch you on Thursday.

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