Office Hours: App Store Fees, Remote vs. In-Person Learning, and Spending Time with Sick Loved Ones

Scott answers a question in reference to Elon Musk’s comment about Apple’s App Store, and whether Amazon is also part of the problem regarding the high fees for developers. Scott also discusses why he thinks in-person learning is a superior method compared to online learning in certain circumstances. He then gives a listener advice on navigating how to spend their time when a loved one is dying. 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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• 1:27Scott 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, and again, I do not see or listen to these questions before they are submitted. So that raw, authentic, unfinished, you know, what is it? The uncut version, the, what was it called? The Criterion Uncut version, where you go buy a LaserDisc for some reason and think it was going to be a new movie because they include a two-minute scene that justifiably was cut out of the movie. Anyway, anyway, first question.

• 2:09Speaker 02

  Hey, Prof G. I hope this voice note finds you well. My name is Ori. I work in tech here in Perth, Western Australia. And while I would normally have loved to ask your opinion about the relevance of the traditional big tech companies, I thought I'd rather ask you about the recent tweet put out by Elon Musk about what's going on between Epic And the fees they pay to Apple and their app store and whether or not Tesla is going to get involved in that debate. This got me thinking, what about Amazon and their app store? Surely there's billions of dollars worth that goes through there. Are they paying Apple that? I can't imagine Jeff Bezos is happy with that. Or do Amazon have a separate

• 2:53Speaker 02

  agreement with Apple and their app store? Would love to hear your thoughts on this. Thanks so much.

• 2:59Scott Galloway?

  So, Ori from Perth. By the way, I'm big in Australia. I'm, I mean, I'd like to be big in Japan because I love Japan, but I'll settle for, actually, that's, I think I'd rather be big in Australia. I have sort of a bond with Australia. They're nice, fun, mavericks, into sports. I just love, I think I'm kind of, well, my father was born in Australia. True story. Born into a wealthy family. I think it was the McVickers family. Now, that's not true. He was born out of wedlock and his mother, my grandmama, Nana, Nana, she was a maid, house cleaner, whatever the politically correct term is now, for

• 3:42Scott Galloway?

  a very wealthy family, a shipbuilding family. I think they were called the McVickers. And she had a kid out of wedlock, wedlock, and one of the women, the daughters, was getting super old for that age, like 25, and hadn't found a guy and said, I will adopt this child and I will give you and your boyfriend a bunch of money, but you have to leave Australia. They didn't want to deal with anything. You're going to go back. They were planning to go back to Scotland anyways because my, I guess my grandfather, pop pop, never met him, never met him, died of a brain tumor at 53. By the way, by the way, people always talk about how they're going to live to 110 because they are, they have crazy genetics. I have outlived every one of my grandparents except for my grandma. Three of the four were dead

• 4:25Scott Galloway?

  by the time they were my age. The average life expectancy of my grandparents is pretty much dead. They all passed away in their early 50s. That's comforting. That's comforting. Anyways, back to Australia and the life that my father was supposed to have. And my grandma agreed. And she recognized that, I don't know what she was thinking, maybe that her son would have this incredible life of privilege and she'd have the money to move back to Scotland. And as is often the case with mothers and sons, at the last minute, she decided no. And she panicked and went to her boyfriend and said, we need to get on a ship today for Scotland. Anyways, my dad always says that he could have been a McVicker, that he would have had a much different life. Instead, he ended up growing up in Depression era Scotland

• 5:10Scott Galloway?

  and not having a pot to piss in and is very dysfunctional about money. But anyways, hold me, hold me. That's my story about Australia. Okay, bring it back, Scott, bring it back. Perth, Perth, the most remote city in the world, as identified by a city that is furthest, a city over a million people, that is furthest from another city that also has a million people. I've always, I have this image of Perth, I've never been there, that it's like California in the 60s, it's extraordinarily beautiful. And I always thought, maybe I'll just move to Perth and buy some crazy house on the beach for like $18,000, which is no longer true because China has turned Australia into its sort of supply chain around minerals and resources and the Australian economy has boomed and shit is expensive now in Australia.

• 5:54Scott Galloway?

  I mean, it is really, they are dealing with massive real estate, the same price inflation, same we're dealing with. But anyways, that's not what you asked. In terms of, in terms of Apple, so I think that the App Store is going to be regulated. People talk about antitrust and I think Amazon, Facebook and Google will all be broken up or will decide to spin companies prophylactically. In the case of Google, I think they'll spin YouTube. I think Amazon at some point will spin AWS, which will be the most valuable company in the world once it's spun, or a few years after it's spun. But you can't, it's difficult to break up Apple because elegant antitrust results in companies that are broken up and more competition, but it also doesn't kneecap the company. And the hard part about trying to break up Apple. Would be who gets domain over the core asset, which is the brand.

• 6:38Scott Galloway?

  So I think the big issue there is the App Store that is effectively acting as a toll booth through the entire Internet. Musk is right. It is kind of a global tax on the Internet because about, I think about 80% by dollar volume goes through the iOS App Store. The market share is much more balanced in terms of Google and iOS in terms of app downloads. But given that the billion iOS users just have more money and seem to be more confident or more willing to pay for the apps on iOS, it controls, it dominates the app economy by fees. And a 30% fee results in, as an example, all the streamers, whether it's Netflix or Hulu

• 7:18Scott Galloway?

  or Peacock, pay somewhere between 3% and 12% of their total revenues to Apple because that is where a lot of people go to download these apps. So this really is a monopoly that is charging what a lot of people think is a useless tax. Think about Spotify. Think about Spotify. They are now directly competing, or Apple Music is now directly competing with Spotify. Is that a fair fight when one company, one company basically has a 30% advantage? And that is, Apple doesn't levy on itself a 30% tax, so it can reinvest at a much more aggressive rate than Spotify. They also see who's downloading Spotify.

• 7:57Scott Galloway?

  They can also deprioritize Spotify when people type in music search or if they type in Spotify. Apple can basically put front and center, "Apple Music." So this not only goes to the useless fees, but what it means to own the rails. Should you be competing with companies on your platform when you're the platform? And I think most antitrust would say no. At least that's what I believe. So that is coming. In the meantime, the battle that has sort of brought this to the fore is Epic wants to be able to sell products inside its app and doesn't want to be able to take, have to pay the 30%. And is also letting other developers, said other developers, "If you sell this stuff

• 8:39Scott Galloway?

  inside our ecosystem, we'll charge you 10%, not 30%." And Apple said, "This is a violation of services. Any revenue that happens has to kind of flow through us in the app and such that we can take our tax." And said, "It's a violation of services and shut down." Epic, or I think took the app off the App Store, which is basically like saying, okay, we're gonna, you know, essentially shut your store down. It's like, you know, being an app and not being on the App Store in iOS is like having a store but putting it on Mars. It doesn't matter how good the store is. I think you're gonna see something here. And Apple tried to at least nod to this and said that they were gonna reduce their fee on small businesses. And this was somewhat just purely symbolic, because the amount of revenue this impacted

• 9:23Scott Galloway?

  was like, maybe only 3%. Amazon introduced a small business or a similar small business accelerator program, which will reduce the commissions Amazon takes on app developer revenues for smaller business from 30% down to 20%, similar to Apple. But, like, at the end of the day, you know, it's hard not to start to extract higher rents than our market when you have monopoly power. And that's what you do. And you start believing that you're the one, that it's your genius and that you deserve that 30%, and Apple will put out all sorts of information, they probably believe it, that the investment they make, the security they provide, is worth a 30%. And I think probably a lot of their folks would agree with them. This also feeds up into something bigger. And I realize I'm droning on. I realize I'm droning on.

• 10:08Scott Galloway?

  That's what Perth does to me. But you have, essentially, when Tim Cook comes out and is very indignant about privacy, what he's saying is, I don't like the internet-supported, or, excuse me, the advertising-supported internet, because I don't get fees on advertising. He doesn't get any fees, nor does Apple from this podcast, as far as I can tell. It builds momentum, it builds credibility, it builds attention on iOS by having a great podcast, being a great distributor or marketplace for podcasts. But unless it's a fee for the app that doesn't do advertising, he doesn't make any money. So what do you know, he's not a fan of advertising and the privacy violation and the tracking that good advertising involves. And I think this is principled, and I'm not saying I don't agree with him, but it's awfully

• 10:51Scott Galloway?

  convenient, because I think Tim Cook would like to move to a world where there is no advertising and everyone has to pay for their media, i.e. apps, and he gets 30% of it. There's some downside there, and that is there's a fear and a legitimate argument that there's a group of people that wealthy people are the people who get to consume or have access to media that's fact-checked, that is legitimate, and that the rest of the world has to get ads not only pelted at them, but ends up in a business model where the entire focus is on attention, so they start creating novel content, i.e. content that is not true, to keep people engaged. Because the bottom line is conspiracy theories and misinformation is much more interesting than just sort of fact-checked

• 11:33Scott Galloway?

  information. You know, things are getting reasonably better. It's just not a great headline. Anyway, I think that this is not over. I think Apple is going to incur some sort of regulation, and Epic is expediting that as it's basically saying, look, this is a real problem. The App Store regulated Facebook, Amazon, and Google, I believe, are going to incur some sort of actual antitrust breakup. Ori from Perth, Ori from Perth, thanks for the question. Next question.

• 12:01Speaker 03

  Hi, Prof G. Jeff here, reaching out from New Zealand. The question to you is about the future of higher education and the role of real-time interaction compared with pre-recorded lessons. I recently watched a Netflix documentary about babies that mentioned a study where they exposed nine-month-olds to a new language by having someone read to them. After something like 12 lessons, the baby's language skills in the new language were as good as babies' native to that language. But when the lessons were provided on video, babies didn't really absorb any of it. I'm currently a PhD student, and last year when the lockdown started, I took several online courses through EdX and Coursera out of general interest in just to improve my skills. There'd be times where, if I could ask a question or talk with a classmate, it would have allowed me to complete some of the assignments successfully, whereas I would find myself sometimes skipping things because I wasn't taking it for credit, and I figured some learning was better than nothing. So when I heard about that study

• 12:45Speaker 03

  in babies, it made me wonder how my experience in those classes would have been different if they were in person. So I'd love to hear your thoughts on this. Is a recorded version of the best calculus teacher in the world better than an average teacher who can interact in real time? Thanks so much.

• 12:56Scott Galloway?

  Wow, Jeff from New Zealand. Oceana, or whatever you call this, the South Pacific, what do you call it way down there, other than it's really, really nice and really fucking far? I think we'd all live in New Zealand, Australia, if it wasn't so damn far. Anyways, Jeff from New Zealand. By the way, where's everyone from? That first guy from Perth sounded like a Bond nemesis. He had one of those accents that was like, I was educated in Switzerland, and my father, I don't know, was some gazillionaire in Western Australia, and now I will rule the world! Anyway, I don't, where are you from, Jeff? You're not from New Zealand. Anyway, anyway, so.

• 13:30Scott Galloway?

  This is a really interesting question, and it's something I struggle with. And that is, so I typically teach my brand strategy class at NYU in person. And one, it's just much more enjoyable. There's an electricity, there's a buzz. I think it's much better for them. I think they absolutely tune in, they're more engaged. I find teaching on Zoom, or this what we'll call asynchronous, exhausting. And what we found in online ed, one of the things we're most proud of at section four is that we have completion rates of 70%. Now, get this, the average completion rate of asynchronous higher ed is 10%. Because there's no buzz, there's no electricity, and there's no accountability. When you're speaking to someone live, and you look away, or you look bored, they might

• 14:15Scott Galloway?

  be offended, or you just wouldn't do that. Whereas if they're on video, you might just go to the refrigerator, or you might just turn the video off, you just might not pay attention. So peer-to-peer feedback that's synchronous and live just has much more buzz, much more intensity. And what we try to do is make as much stuff live as possible. We have a lot of lessons that are recorded by video, and we spend a ton of money trying to make them really engaging and high production value. So we recognize we're competing with the refrigerator Netflix. But live stuff, live classes, TAs, interaction, group projects where you're meeting either in person or live on video. And then we do live streams, which is really strange for online ed, where the professor

• 14:59Scott Galloway?

  actually does a course live, or a session live. But what we found is that there's a huge difference between asynchronous, recorded and live. And I also think the next step is in person. I just don't think there's anything that replaces it. So the question you have is, would the best calculus teacher in the world be better on video than someone live? And I think it's just how big is the delta? But I think a good calculus teacher live, and that buzz and that interaction you get from people, is probably better than the video of the best calculus teacher. Because people still want to go to class, even though they can probably find the best astronomer in the world on.

• 15:42Scott Galloway?

  Doing a TED Talk, they still do opt for the in-person experience. You're also getting all sorts of ancillary benefit. The rush, the feel of, you know, this thing called the, the real world. It's just totally, totally different. Another kind of observation I made is my, the majority of my current income, the majority of my income comes from investing. But the majority of my current income, or short-term income, or salary, or cabbage, whatever you want to call it, comes from speaking. What I found is, on a regular basis, I'm not a regular basis. I'd say once every three or six months, I piss off a client. And when I say piss off, I'm, part of my rap is I'm vulgar and profane. And it's not an act. It's, so it's not really part of my act, part of who I am.

• 16:26Scott Galloway?

  Because I am a profane and vulgar person. It's not, I'm not doing it to offend people. I'm not doing it to try and get attention. It's just the way I think. I think with expletives, I think in a profane way, I think most people do actually. And most of the time, it works. Most of the time, it lands. And sometimes it doesn't. And when I'm in-person speaking, I can register that this is not the type of crowd, and the body language I'm getting doesn't lend itself well to me talking about problems with my prostate. It's just not going to land. And then in other places, I know it will. And you can't register, you can't get that, those atmospherics remote.

• 17:08Scott Galloway?

  And so there's just a lack of connection with the audience, a lack of EQ, a lack of learning, which I think can be reverse engineered to some of the things you're talking about. So in sum, in sum, I think it's all about the delta between the quality. But there's just no getting around it. In-person is just, it's superior. And actually, universities have decided, especially the top or the elite schools, to be back in-person. NYU has put, you know, drawn a line in the sand. And we'll see what happens with like the next Delta Plus or Delta Comfort variant. If shit continues to get realer and realer again. Jesus Christ, can you believe we're here again? Anyway, they've said everyone needs to be back and they're going to do all the classes in person because they realized that in order to charge $7,000 per class,

• 17:52Scott Galloway?

  Jesus Christ, can you believe that? They need to have the maximum experience and they realized that the maximum high impact experience is in person and they need to offer that experience to justify those types of margins. Jeff from New Zealand. Jeff from New Zealand. I know of a lot of very wealthy people who basically have a giant go-bag called a home in New Zealand and they're planning to move down there if there's another crash or it ends up being a nuclear mushroom cloud somewhere. That's a nice thought. That's a nice thought. Thanks, Jeff. We have one quick break before our next question. Stay with us.

• 18:29Scott Galloway?

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• 19:29Scott Galloway?

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• 20:14Scott Galloway?

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• 20:36Scott Galloway?

  Welcome back. Question number three. Are we going down under again? Are we going down under?

• 20:43Speaker 05

  Hey Scott, this is Jimmy from Massachusetts. I'm a day one listener of the show, and I took your advice last year when you said young people should do a Corona core year. While the dog's idea never made it into public policy, I did the next best thing and joined AmeriCorps to work with at-risk youth in my home state. I love the work that I'm doing, and they're even paying for my master's in data analytics. So, thanks for the advice. Now, while I'm normally pretty good at balancing a lot of opportunities, my sister's terminal brain cancer diagnosis last month has made it a little difficult to choose how I spend my time. So, my question for you is this: How did you choose to spend your time with your mother in her last few months? Take us back to that time. How did you decide between watching Frasier with her,

• 21:26Speaker 05

  taking the work call, or just taking time for yourself? And lastly, thanks for all you do. You've been a great voice, guided me through these hard times without even knowing it. So, stay well.

• 21:38Scott Galloway?

  Jimmy, I'm so sorry.

• 21:42Scott Galloway?

  There's just getting around this. This just fucking sucks. I'm very sorry for you and your sister. So taking care or caring for or making these types of decisions are deeply personal. A lot of it comes down to your situation. I write a lot about time I spent with my mom. But my situation was I was in a position where I had some economic security and some flexibility. And it sounds like you have some flexibility. And a lot of it comes down to who else is around. And again, this is, these are deeply personal decisions and you have to do what feels right.

• 22:23Scott Galloway?

  The thoughts I would share with you are that I think you want to have this terrible thing influence how you spend your time, but not, I think you want to put, I think you want to shape your life to trying to spend more time with your sister, but I don't think you want to put your life on hold. And that is your sister's, if your sister's, your sister's terminal. So everything we do is terminal. Everyone here, the mortality rate is 100%. We all have a finite amount of time. It sounds like your sisters might be more finite, which means that you and the people close to her probably want to allocate more time than you would otherwise in her remaining time.

• 23:07Scott Galloway?

  And it sounds to me like you'll do that. But at the same time, I don't think your sister would want you to totally put your life on hold. I don't think that's healthy for anybody. So that balance and that sweet spot is kind of up to you and the dynamics of the relationship and the resources. But a few things that I did that were fun was I went through music and media with my mom. I imagine you and your sister are probably a similar age. Just spending a lot of time together. Try to stay, I don't want to call it upbeat, but you know, don't make it too strange or awkward. You're still brother and sister. You should still fight and argue. Think about caring for the caregivers.

• 23:52Scott Galloway?

  I can't imagine how hard this must be on your parents. So giving them opportunities for breaks or being supportive for them. You will not regret spending time or a lot of time with your sister, but you should also recognize That your life is important and you should continue to make progress around your life. Does that mean you maybe put off more grad school or moving to another city? Yes. Does it mean you stop working? Probably not. You should probably continue to do the good work you're doing. But to summarize, yeah, absolutely. Recognize that time with

• 24:31Scott Galloway?

  your, this loved one has become, the present value on it has become much more important. And so you're going to spend more time there. But also your life and, and progress in your professional and personal life is also really important. Spend time looking after the caregivers. And also treat the relationship as a brother sister relationship, not a patient caregiver relationship. Because, you know, she just wants to be around her brother. She wants to, she wants to hold on to kind of what, I would imagine what her life is. If I sound like I'm struggling here, I am struggling here. This is, this is one of those things that's impossible to, I think impossible to offer like the right advice. I don't know

• 25:15Scott Galloway?

  if there's a right way here. I think you just have to decide what your way is. Jimmy from Massachusetts, I am thinking about you and your sister. Godspeed you both. Thanks for the question.

• 25:32Scott Galloway?

  So Algebra of Happiness, I think that I did an Algebra of Happiness a couple of weeks ago, just on the importance of crying, because it's, A, it's cathartic, and B, it helps you get in touch with your emotions around what's important to you, and also what you're worried about losing. And our last question from the young man who is, whose sister's been diagnosed with terminal brain cancer. The reason we're sad, the reason we grieve is because we have wonderful things in our life that we're worried about losing or that we are going to lose. And there's a great quote from Juan Division of All Things on Disney Plus. And it goes something like this, "What is grief if not love for persevering?" And

• 26:18Scott Galloway?

  If you shut yourself off from grief, if you haven't experienced grief, it means you've never really loved anyone intensely. Everything, everywhere ends. And it sounds like this young man is going to lose his sister. All of us know tragedy. All of us will know someone we love who will get sick and die. And the grief itself is a function of how rich and how much love has been in your life. And so, in sum, we all want, we all want love in our life. We all want relationships that matter. But a function of that is that we're all going to have grief.

• 27:01Scott Galloway?

  And again, you know, what is grief if not love persevering? We all want love in our life. And that disappointment is a function of, of the things we've achieved and the wondrous things in our life. What is grief if not love persevering?

• 27:18Scott Galloway?

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

• 27:33Speaker 06

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