Should We Be Worried About the Economy?, Scott’s Thoughts on Founder Mode, and the High Divorce Rate for Military Couples

Scott discusses the state of the U. S. economy, specifically how it is both prosperous and unevenly distributed. He then speaks about ‘Founder Mode’ and the evolution of how founders are seen in Silicon Valley. He wraps up with a conversation on the high divorce rate in the military and whether benefits such as Basic Allowance for Housing (BAH) contribute to that. 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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• 1:19Speaker 02

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• 1:48Scott Galloway?

  Welcome to the Prop 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]. So with that, first question.

• 2:07Speaker 03

  Hey, Prop G. This is Steve from Denver. You've commented a number of times recently on how the economy is doing better than people are giving it credit for, including the episode with Kyla Scanlon about the vibe session. However, there are countless headlines just today about the latest revision to the jobs report, which has nearly 820,000 jobs downward.

• 2:26Speaker 03

  My question is, do these seemingly constant downward revisions give you any pause? Thanks for your time and stop being so nice to Ed.

• 2:33Scott Galloway?

  Hundred percent. I'll stop being less nice to Ed. It's just, I feel bad for him. He's a lonely young man. Back to your question, I think a lot of it is AI. I think essentially AI is sort of the perfect landing lights for a soft landing. What is a soft landing, you might ask? It's trying to cool the economy because you have inflation while not pushing it into recession, which is not easy to do. It's like landing an air, I don't know, it's like landing a propeller plane on an aircraft carrier. It's really fucking hard. In high seas, if you will. What does AI do? It reduces costs while increasing productivity. Who was it? William Gibson? Who was it that said, "The future is here, it's just not evenly distributed"? I think the same is true of our economy and that is great. Everyone's

• 3:18Scott Galloway?

  saying the economy is up, better GDP growth than the rest of the G7, lower inflation than the rest of the G7, which is a Goldilocks economy. That's great, but my life just seems to be getting harder and harder. And there was this fascinating study I read the other day that said, "If you look at France, which we don't kind of look to as a model for economic growth, if you were to take out the top 1% of income earners over the last several years, the bottom 99 in France have done better than the bottom 99 in the US." And that's exactly what we have, is we have an economy that's pretty prosperous, but it's not evenly distributed. And this is infecting every country. I saw another stat that just blew my mind. I'm here in the United Kingdom. If you take out London out of the equation,

• 4:01Scott Galloway?

  if you lifted London and all of its prosperity and very, very wealthy households in London out of the UK mix, the average household income in the United Kingdom would be equivalent to Mississippi, which has, I think, the greatest levels of poverty in the United States. So essentially, the UK is not a very prosperous nation surrounding this uber concentration of wealth called, one of the greatest concentrations of wealth in history called London. So I would argue that the economy is actually doing fairly well. Our fiscal policy, our tax policy makes the same mistake over and over, and that is people on the far right and economists or some economists who are these free market weirdos will claim that.

• 4:46Scott Galloway?

  The middle class is a naturally occurring organism? No, it isn't. Anyone who's done anything resembling any sort of study of economic history says that the middle class is an anomaly. And typically, what happens is there's a group of people who are very smart, very well-connected, very hard-working, very lucky. They get rich and they start weaponizing government. And people right now, wealthy people in America, don't think they're weaponizing government, but they just happen to like, okay, just make sure that when it comes to soybeans, if I'm a soybean farmer, that we continue to tax the shit out of foreign soybeans and subsidize my industry. And they aggregate so much power and so much money that at some point, the bottom 99% decide, you know, the fastest way to double our income would be to kill these 1% or to tell them to leave the nation, to pack their bags and they're out of here.

• 5:31Scott Galloway?

  And then they nationalize their business. That doesn't work very well. And the whole cycle kind of starts over and over again. And the question is, are we getting to that point in the United States when six people control more wealth than the bottom 50% of America? And I think you're seeing some populist movement. You might call it populist, you might call it recalibration. But unless we consistently invest or reinvest, redistribute, whatever the fuck you want to call it, money, capital into the middle class, we're going to have lower birth rates. You have to have a middle class of men that are attractive to women and men who are not economically viable are not attractive to women. Yeah, I said it. And there's a lot of evidence that shows that. And we need a middle class that is thriving. They fight our wars, they buy our products, they are the citizens we need.

• 6:15Scott Galloway?

  They generally, we need them to be supportive of programs that provide civil rights, women's rights, you know, to basically make a society great. Circling back to your question, our economy in aggregate is killing it. The problem is, the future and prosperity are in fact here in America. It's just not evenly distributed. Thanks for the question. Question number two.

• 6:38Speaker 04

  Hey Scott, it's Greg calling from Nova Scotia, Canada. I'm a father of three boys, a husband and a business owner. I would really appreciate your thoughts on Brian Chesky's comments that he made recently around Founder Mode. I'm curious, as you grew and scaled your businesses, you talk openly about having a key person that was the operator for you. But how did you negotiate and manage your your structure? Was it a stovepipe? Was it fairly flat? Did you do skip level meetings? Or did you really stay out of the day to day operations of the business and leave it to your ops manager? I would appreciate your thoughts on this and I appreciate all that you do. Thank you.

• 7:23Scott Galloway?

  What do you know, Greg's from Canada, the nicest, most intelligent. How do you get 100 drunk fraternity brothers out of your pool? Hey guys, would you please get out of the pool? Boom, that never gets old, eh? Anyway, this Founder Mode thing, I found it fascinating. So Founder Mode is the idea that, I think what Brian was trying to say is that he brought in all this professional management. The company got off track and he needs to kind of take the reins and get more obsessed about the product. And there are, and the quote unquote professional management doesn't work out. That's actually, there needs to be some nuance there. By the way, I'm a huge fan of Brian Chesky. Airbnb is one of my biggest stock holdings. Look, there is a lifecycle to companies. And as they go through that lifecycle, as they go from startup

• 8:08Scott Galloway?

  to venture backed to growth, to public company, to mature companies, to declining companies, to distressed companies, right? They require different management across those parts of your life. There are some people that are so talented that they can traverse all of those ages, if you will, or all of those components of the lifecycle. Most CEOs cannot. Because back in my day, in the 90s, when I was starting companies, founders were seen as a necessary evil. And once the company was real, you brought in some guy with gray hair from IBM, or Oracle, or something, and the VCs basically kicked out the founder, and if the founder was lucky, he or she could stay chairman. Then came Steve Jobs, and they brought in John Sculley,

• 8:51Scott Galloway?

  who was hugely ineffective, the guy from Pepsi. And then they brought back the crazy fucking founder, and he took the company to be the most valuable company in the world. Or, actually, that's not true. He took it to 300 billion. Tim Cook has actually taken it to 3 trillion. Isn't that weird? Tim Cook has actually overseen a 10 or a 9x increase in market capitalization, but Steve Jobs is our Jesus Christ. By the way, a guy who denied his blood under oath such that he could avoid child support payments when he was worth a quarter of a billion dollars. Hey, that's the guy I want my boys to role model after. But, oh, okay, he made a great fucking phone, so let's pretend he's Jesus Christ. Anyway, what you have is the pendulum is falling the other way. And that is VCs and the community has basically decided that founders are the new Jesus Christ, and that you need that DNA.

• 9:35Scott Galloway?

  And I've experienced it on boards where we put up with so much bullshit from founders because he or she was employee zero. I think it has swung back way too far. It probably peaked in terms of it swinging back with Adam Newman, where his board just listened to this ridiculous bullshit, where he was crashing the equivalent of two Bombardier Global Expresses into a mountain every week. He was losing $100 million. Anyways, Greg from Nova Scotia, that's not your issue. Or, that's not your question. So, his notion is you go founder mode, you're kind of all over everything, and professional management comes in and screws up companies. No, they don't. The best companies, typically speaking, have brought in professional managers. Satya Nadella, Tim Cook, they've all added more market cap than the original founders. Now, it's probably harder to go from 0 to 1 billion in market cap

• 10:20Scott Galloway?

  than it is to go from 1 to 10 billion, or 10 to 100 billion, or, in the case of Tim Cook, 300 billion to 3 trillion. Or, in the case of Satya Nadella, I think he's taken it from, I don't know, 800 billion to 3 trillion, whatever it is. So I was on this panel of CEOs and it was a CEO, I think, from Away or Rent the Runway, this digital firm and me. And they said, they asked us, what is your approach to management as a CEO? And one person said, well, for me, it's all about creating a culture that empowers people. Another person said, I think it's really important to identify what their roles and responsibilities are and constant measurement and feedback, but feedback that's empathetic. And then they turned to me and said, my management strategy is I am all fucking over everyone

• 11:04Scott Galloway?

  all the fucking time. That is what founder mode meant for me. I was involved in everything and I just don't think there's any getting around it. I think if you're serious about being an effective founder and growing a profitable company, or a company worth, you know, that creates shareholder value, I just think you gotta be all over everyone all the time, including yourself. I think you gotta show that you came to play, be obsessive about the product. When I was running L2 for the first, maybe even first eight years of the company, nothing was allowed to leave and go to a client unless I proved it first. I felt like I had the voice. I had an attention to detail. I like to write. I'm good at it. I'm like, I want to see everything before it goes out. I find that this whole founder mode zeitgeist coming out of the valley is more, basically more idolatry of innovators,

• 11:45Scott Galloway?

  that founder mode is somehow, they're not talking about the founders of auto supply parts companies. They're talking about the founders of tech companies and somehow they are smarter and know better than the rest of management, than the rest of companies, than the rest of America, than the rest of the world. And it falls into this bullshit notion that somehow these people have more insight into the happenings of the world and have more ability to fix problems. As a matter of fact, I would argue they've done more to fuck up the world than actually help it. Is that true? Is that fair? Maybe that's not fair. Definitely meta. Definitely meta. By the way, my dog is asleep here next to my desk because we went founder mode on a walk this morning. Oh my God, we chased some squirrels. We said hi to a lot of people, hi to a lot of people, which freaks everybody

• 12:27Scott Galloway?

  out because the Great Dane, which looks mobly like a cross between a horse and an elephant, just got beautiful elephant-like coloring, is just, you know, Great Dunes are so funny, though, like shove their hindquarters into you as a means of affection. Whereas the little one looks really cute and innocent. It'll take your fucking thumb off. It'd be like, hello, and like, you know, and then I'm following the dog around at night trying to pick up his shit to see if I can find the neighbor's thumb. Not true. Funny, though. Funny. Anyways, don't know where I was headed with that, other than to say, thank you for the question.

• 13:00Scott Galloway?

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

• 13:07Scott Galloway?

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• 13:52Scott Galloway?

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• 14:09Scott Galloway?

  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 by hand, chasing screenshots, validating controls, and playing catch-up when audit season comes around again. Vanta works differently. The Regentech Trust platform is built to scale with you, not slow you down. With over 1,400 automated tests across 400-plus integrations, Vanta collects evidence and monitors your controls year round, cutting your audit prep by 82%. Plus, you can access the Vanta agent everywhere you work, whether your team is in Vanta every day or living in tools including Claude

• 14:52Scott Galloway?

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• 15:16Scott Galloway?

  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 by hand, chasing screenshots, validating controls, and playing catch-up when audit season comes around again. Vanta works differently. Their regentic trust platform is built to scale with you, not slow you down. With over 1,400 automated tests across 400-plus integrations, Vanta collects evidence and monitors your controls year-round, cutting your audit prep by 82%. Plus, you can access the Vanta agent everywhere you work, whether your team is in Vanta every day or living in tools including Claude or Cursor. Want proof?

• 16:01Scott Galloway?

  Over 16,000 fast-growing companies like Ramp, Ryder, and Harvey save time and resources while scaling fast with Vanta. Learn more at vanta.com/profg and get $1,000 off. That's spelled V-A-N-T-A dot com slash profg for $1,000 off.

• 16:25Scott Galloway?

  Welcome back. Question number three.

• 16:27Speaker 05

  Hey, ProfG. This is Natalie. I'm calling in from Northern Virginia. Appreciate you taking my question and for all the work you do on the pod. I am in my early 20s and I just graduated college with an econ degree. I am a financial analyst at a pretty big government contracting firm, and I love my job. My boyfriend also just graduated college. He commissioned as an officer in the Marine Corps, and we've been together almost four years. We both come from military families, so I'm pretty familiar with the lifestyle I'm about to enter into as a future military spouse. So I'm not sure if you're familiar with the term BAH, but I'm gonna have to explain it for my question, so I'll give a short overview.

• 17:12Speaker 05

  BAH is Basic Allowance for Housing, and it's essentially a housing supplement for a soldier who lives off-base. It can be used for whatever the soldier wants, because it's just added into their paycheck with their normal pay. The other part of this is if a soldier is married or has a kid, they get even more added to that BAH payment every paycheck. An 18-year-old out of college, or I'm sorry, an 18-year-old enlisting right out of high school has huge incentives to marry the first person who shows a remote interest in them because the benefit to them is between six and 12 grand a year. Do you agree with me that this is an outdated policy that incentivizes soldiers to get married too young

• 17:56Speaker 05

  and contributes to the high divorce rate in the military? I'd love to hear your take on this and thanks for everything you do.

• 18:03Scott Galloway?

  So first off Natalie, it just makes me feel really good about America. We have people in their early twenties who are as impressive and as articulate as you, a degree in economics and are connecting and marrying someone who's going into the Marines as an officer. I just kind of want to wrap myself in the flag right now. So back to your question, according to data from the US Census Bureau, those who have served in the military tend to have higher divorce rates. In 2022, the rate for divorce among all active-duty members was 3%. So that's higher than the, actually the, I think that's annually, every 3%? I don't know. Anyways, it's higher. I think you would need data to support that thesis because is it the fact they get married young?

• 18:47Scott Galloway?

  You would need to control it for things. In other words, compare enlisted people or compare people in the service who get married at 25 or 30 versus those who get married at 18. I'm remiss to get in the way of any program that puts more money in the pockets of young people and especially young people starting families. I think the family unit, I've kind of come 180 on this. When I was your age, I'm like, I'm never getting married and I'm never having kids. I'm a selfish person. I like to work. I'm fine on my own. I do my own thing. And you know, I'll have relationships, but I'm not interested in this construct called marriage that was invented by a bunch of. Gay dudes in a church who wanted to make sure that women didn't struggle with poverty. Women are doing fine on their own. They don't need marriage. I don't need marriage.

• 19:29Scott Galloway?

  I had this kind of what I thought was evolved, hip, cool vision of marriage. I wouldn't have gotten married had I not had kids and raising kids was a competent partner is the most rewarding thing in my life. So I was all wrong about it. Kids are becoming a luxury item. So I just don't like the idea of doing anything that would get in the way of supporting young families. And I would imagine, and this is just pure speculation, that the stresses placed on a military family, specifically with the person serving being gone all the time, would be, that is what it would be really difficult on marriages, that it's not economics or it's not getting married too young, although I agree that's not a great idea. The idea of getting married at 18 seems just strange and like kind of, I won't call it bound for

• 20:11Scott Galloway?

  failure because a lot of them stay married the rest of their lives. But God, I mean, at the age of 23, I was different than I was at 18, much less 33 versus 18. You really are, especially men at 18. They really are boys. But this is a long way of saying, I don't really know. But I think the problem, quite frankly, is not putting enough money. I think if we wanted to lower divorce rates, we'd actually put more money in the pockets of young people. Thanks so much. And again, you just make me, hearing about you and your fiance, it just makes me proud to be American. 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].

• 21:03Scott Galloway?

  This episode was produced by Caroline Shageran. 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, 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.

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