The Truth About the Entrepreneurship Boom, and How to Manage Cash Flow as a Founder

Scott Galloway explains why the solopreneur boom isn't actually distorting the jobs report, breaks down how founders can survive a brutal early cash flow crunch, and shares how he thinks about talking to his kids about complicated family relationships. Want to be featured in a future episode? Send a voice recording to [email protected], or drop your question in the r/ScottGalloway subreddit. Plus, you can now call or text Scott a question at our new Office Hours hotline: ‪(201) 472-3656‬. 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.

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• 1:06Scott Galloway?

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• 1:36Scott Galloway?

  Welcome to Office Hours with Prof G. 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 for next time, you can send a voice recording to officehoursofpropgmedia.com. Again, that's officehoursofpropgmedia.com or post your question on the Scott Galloway subreddit and we just might feature it in our next episode. Question number one comes from Cheddar Ben on Reddit. You recently spoke about the explosion of single person businesses. Are these businesses and gig work dramatically skewing the jobs report in a way that has never happened before?

• 2:11Scott Galloway?

  So yes-ish. The jobs report is actually built from two different surveys. The headline number everyone reacts to is payrolls added ex jobs is derived from a survey of company payrolls. So by design, it only counts people on an employer's books. It doesn't count the self-employed or most gig workers at all. That's why the boom in one person businesses can't be inflating it. The second survey, the household survey, which asks people directly whether they're working, is the one that does capture solo businesses and gig work and what actually sets the unemployment rate. So in sum, the growth in single person businesses isn't skewing the jobs number. It's showing up in a different survey, but it's leaving that headline payroll figure increasingly blind to how many Americans are really earning a living and how they're doing it.

• 2:57Scott Galloway?

  So there was the quote unquote, the entrepreneurship boom. I'd call it a boomlet because some of it is misleading. There were almost 6 million new business applications last year, the most on record in the 20 plus years that the census has kept track. But it turns out the majority of these businesses are not expected to become companies that have an intention of hiring people and have any payroll. So in other words, there's more people starting a food blog where they'll be the employee, the only employee as opposed to starting a restaurant where they might hire 10 or 20 people. Also, there's a romanticizing of entrepreneurship and the number of people who self identify as a CEO or a founder has exploded because people see those people as the new rock stars.

• 3:41Scott Galloway?

  One in three US adults say they plan to start a new business or side hustle in 2026, up 94% from last year. What I would be interested to see is how much, I mean, I think about, I immediately go when I think of this to the creator economy and just how hard it is and how few people can make a sustainable living there. And I think these numbers hide how many people are using this as a side hustle, maybe to supplement income from another, in addition to another primary earner in the household or because they enjoy it or because it gives them flexibility. But I think the creator economy is slightly better. I mean, the long tail is better. So I was going to say it's like the NBA. It's not, it's better than that. But when you look at how many, how many views you need to garner to earn a decent

• 4:26Scott Galloway?

  living, you have to be exceptionally talented, working your ass off and get huge resonance across a bunch of platforms just to make and be thinking about content creation every day and be outstanding at it. In some, it's a hell of a lot easier to make a living being an insurance adjuster or an actuary than it is to be a creator. I find that the creator economy is romanticized, it's cool, but it's very misleading. And a lot of these jobs numbers hide what I think is sort of a deep underbelly. And that is there aren't nearly as many jobs being created by sustainable, enduring, well paying job openings, if you will. I appreciate the question.

• 5:11Scott Galloway?

  Question number two comes from Jeff from Honolulu.

• 5:14Speaker 07

  Hi, Prof G. This is Jeff from Honolulu, Hawaii. I'm currently in my 16th year of naval service, planning to close out my military career at the 20 year mark in 2030. My spouse is a talented nurse practitioner and together we've launched a geriatric primary care practice in Hawaii. She delivers the medical care and I manage the business operation. While Hawaii allows independent practice for nurse practitioners, the startup learning curve is brutal. Federal law limits Medicare reimbursement for nurse practitioners to just 85% of the physician rate. When you factor in Hawaii's high state taxes, general excise taxes, and a 20 to 30 day lag on insurance claims, our accounts receivable are ballooning with thin margins. It's a massive cash flow squeeze for a small but growing practice without deep corporate

• 5:59Speaker 07

  capital reserves. We are committed to filling a massive primary care deficit here in Hawaii and see every day the positive impact made on families providing quality care for their elders. But I need to make this model sustainable before my final military transition. My question for you, when you were building your early companies like Profit Real Two, how did you survive those fragile early cash flow crunches and razor thin margins? What specific levers should a capital constrained startup pull to make it through this phase? Thanks for your time and all you do on the pod.

• 6:34Scott Galloway?

  Yeah, thanks for the question. I think you're, a lot of people, your question is going to resonate with a lot of people. You can have a very successful business and have huge cash flow problems. As a matter of fact, the faster you're growing, the more cash flow you need. So let me zoom out. The business you're in, I believe, I don't know if it's called senior care or nursing homes, has the highest success rate of any new business. I think restaurants, it's like 17% or around in five years. I think it's 94% for the sector you're in. So in your background, being in the service, the discipline you bring, it sounds like your wife has real domain expertise. It sounds to me like you're in a good spot. Now, the problem is short term cash flow.

• 7:16Scott Galloway?

  And while I'm not an expert on this, and I say this from a position of privilege because I typically had some money to finance them myself.

• 7:26Scott Galloway?

  The first is an obvious one, throw nickels around like they're manhole covers. You just have to be all over everything all the time. What is this payment? Look at the things that kill you, automated payments. Do you need big office space? No. Do you need, you know, just, just do everything you can to minimize expenditures. I just, whenever I started a business, I was all over every cost all day long, all day long. And don't fall into the trap of thinking that spending business makes a business. It's making money that makes a business. And I've made that mistake over and over. I kept leasing big office space, thinking somehow that made the business real. And then a couple of times I had to give the office space back because I couldn't justify it and I ended up losing a shit ton of money in the form of the deposit.

• 8:12Scott Galloway?

  By the way, I think coworking is absolutely the way to go initially in a company or if you can, just work out of your home. Now, there are a lot of innovations around, around financing and managing cash flow. If you have a solid business, I think there's a lot of financial innovation startups. I think SoFi might be one of them that will do what's called factoring. And that is if you can show them contracts and recurring revenue, they will give you a loan against those secured by those future cash flows. This is something I think you should use AI for. I would double check it with multiple LLMs in case it hallucinates and gives you bad information. But I would imagine if you have steady cash flows, you should be able to borrow against

• 8:57Scott Galloway?

  those cash flows or if you have contracts with people who move in or Medicare payments. The government is a slow payer, but it's a dependable payer and you should be able to finance those cash flows. So one, you're in a great business, I think. Two, throw nickels around like they're manhole covers. And three, investigate what, what financing or factoring options are out there to borrow against your, what feel like fairly secure cash flows. Thanks and good luck with the business. We'll be right back after a quick break.

• 9:36Scott Galloway?

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• 13:01Scott Galloway?

  Welcome back. Question number three comes from a listener text. Parent-child relationships are complex, messy, tough, and can be rewarding at any stage of life. As a middle-aged man, I celebrated my elderly parents' 60th wedding anniversary recently with my wife and teenage son and daughter. If not for this party and my speech, I'm not sure my kids would have been exposed to the complexity of my relationship with their grandparents. You have shared openly how your parents have influenced your life on your podcast. Are there any specific strategies you have to teach, share about the complexities of these relationships with your kids? Thank you for all you do. Huh.

• 13:38Scott Galloway?

  I had what most people would describe my relationship with my father as complicated. It wasn't. It was pretty simple. He wasn't that involved in my life, and I resented him for most of my adult life and then decided to forgive him and our relationship got much better. So it's actually a pretty simple relationship.

• 13:54Scott Galloway?

  The question is, I don't talk a lot about it. My kids are 15 and 18. And to a certain extent, I kind of don't want to burden them with my bullshit and my baggage. And I don't, you know, what I try to do is model what I think is healthy behavior and just kind of be the dad that I would have liked my dad to have been. And also, I feel like a land acknowledgement here. My dad was better to me than his dad was to him. Look, I think you can be open and honest and have discussions as they get more adult, but if your kids are anything like mine, they got their own shit and they're thinking about, you know, the hoodie they want and what girl or guy they like at high school. I don't know. I don't think, I think as your adult children ask you about your parents,

• 14:39Scott Galloway?

  you can be transparent about the struggles you've had or where the relationship is strained. But I would see it through the context of maybe, maybe just, I don't know, just show them what a good parent-child relationship is. And I don't know if you need, I don't know if you need to share that with your children, your own trials and tribulations with your own parents. I don't, I think that you want to just show them what a healthy relationship and demonstrate what a healthy relationship is between the parent and the child. And also just benefit, you know, err on the side of generosity around your, your parents. A huge unlock for me was, and I don't know if you're struggling with this, but I used to approach relationships as sort of a transaction,

• 15:24Scott Galloway?

  sort of a capitalist mindset, and measure what I was getting versus what I was giving. And when I measured that against my father, I thought, I'm a much better son to him than he is to father to me. And I used to resent it and go dark on him. And then I woke up and realized that the key to relationships is not keeping score, but outlining or identifying the kind of son, father, husband, coworker you want to be, and just trying to live and acquit to that standard instead of keeping score, because you'll naturally inflate your own contribution and diminish theirs. And also with your parents, just try and, and I don't know this situation, but most situations is your parents are highly imperfect, but they tried.

• 16:07Scott Galloway?

  And also, they're going to be dead soon. And I just, I haven't heard many people say, after their parents were gone, I'm angry, I forgive them. I should have given them a harder time. I think it mostly goes the other way. So I would really try and err on the side of generosity for your own sake. I just think it feels good to forgive and move on, if you will, and try and enjoy their relationship. But in terms of communicating it to your children, let it happen organically. Let it be a pull, not a push, if they want to hear more about it. But the ultimate means of communicating what was good and bad about your relationship with your parents is just to demonstrate the good stuff

• 16:52Scott Galloway?

  and model the good behavior with your own kids. I appreciate the question.

• 16:59Scott Galloway?

  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]. Or if you prefer to ask on Reddit, just post your question on the Scott Galloway subreddit and we might feature it in an upcoming episode.

• 17:17Scott Galloway?

  This episode was produced by Jennifer Sanchez and Laura Janer. Kami Rique is our social producer. Brad Williams is our editor. Andrew Burrows is our technical director. Thank you for listening to the Prop G Pod and Prop G Media.