The Making of Silicon Valley — with Margaret O’Mara

Margaret O’Mara, a professor of history at the University of Washington, joins Scott to discuss how tech has and will continue to shape the economic map of the US, as well as the importance of public investment in the tech sector. Follow Professor O’Mara on Twitter, @margaretomara. Professor O'Mara's book recommendation: The Republic for Which It Stands Scott opens with his thoughts on Amazon and Google’s advantage over Facebook, specifically when it comes to digital advertising. Algebra of Happiness: a week of learnings. 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?

  Support for the show comes from Northwest Registered Agent. Your business identity is everything that makes your business legitimate and professional. With Northwest Registered Agent, you don't just form a business, you start a complete foundation built for privacy, credibility, and growth. That includes registered agent service, a business address, operating agreement, domain, website, professional email, phone number, and built-in privacy. In other words, your home address, personal email, and phone number stay private. Don't pay hundreds or thousands of dollars for what you can get from Northwest for free. Visit northwestregisteredagent.com/profgfree and start using free resources to build something amazing. Get more with Northwest Registered Agent at northwestregisteredagent.com/profgfree.

• 0:49Speaker 01

  This episode is brought to you by Michelob Ultra. Good times mean competitions between you and your friends, like seeing who can throw some pigskin the farthest or rush the field the fastest. Winner gets an Ultra. Because it's not just a superior-like beer, it's also giving fans superior access to their favorite sporting events. Superior is worth playing for. Visit michelobultra.com/superioraccess to enter. Enjoy responsibly. Copyright 2026 Anheuser-Busch InBev Michelob Ultra Beer, St. Louis, Missouri.

• 1:18Scott Galloway?

  Episode 137. Morgan Freeman was born in 1937. Supposedly, Mr. Freeman has been accused of sexual abuse, which means he can no longer play God, just priests.

• 1:30Speaker 02

  Go! Um, sorry, Scott, but that's not correct.

• 1:34Scott Galloway?

  What's not correct?

• 1:35Speaker 02

  That Morgan Freeman has been accused of sexual abuse. I'm not really sure where you're getting that from, and I don't want people to even think that's true.

• 1:42Scott Galloway?

  Ah, I get it. So I get it. But it's okay to be vulgar, right, Caroline? We just have to fact-check, like any responsible media organization, before we put out misinformation that not only slanders an individual, but perhaps spreads misinformation on, I don't know, maybe vaccines. But it's our right to be vulgar. I just, we just need to qualify it. Is that correct?

• 1:59Speaker 02

  Correct.

• 2:00Scott Galloway?

  Anyways, on to the show. Go, go, go!

• 2:11Scott Galloway?

  Welcome to the 137th episode of the Prob G Pod. In today's episode, we speak with Margaret O'Mara, the Howard and Francis Keller endowed Professor of History at the University of Washington. We have all these ridiculous titles in academia such that we can put people's names in front of ours who give money. So we can have tenure and begin to become unproductive and hemorrhage money, but then we used to plant that inefficiency with student debt. Not to say that Professor O'Mara isn't fantastic, I'm just, I don't know where I was going with that. Anyway, she's outstanding. She's outstanding. And she teaches at the University of Washington undergraduate and graduate courses on, in US political and economic history, urban and metropolitan history, and the history of technology. She's also the author of three books.

• 2:55Scott Galloway?

  We discussed with Professor O'Mara how tech has and will continue to reshape the economic map of the US, as well as the importance of public investment. Our producer Carolyn was very excited about tracking down Professor O'Mara and really enjoyed the conversation with her. She's clearly a clear blue flame thinker. And University of Washington, it just has such a nice feel, such a nice brand, great place to see a football game, by the way. And every year, we used to get our asses kicked by their rowing team or their crew team. Anyways, what's happening? What's happening? It appears that the lunch cafeteria, the cafeteria of big tech has, is fed up with the Lindsay Lohan of technology, and that is Facebook.

• 3:39Scott Galloway?

  And that is they've decided to kick Facebook out of big tech, at least in terms of market capitalization. Facebook is now sort of big tech-ish after it threw up and hemorrhaged about 180 billion dollars in market cap after reporting poor user growth and poor earnings. Think about this, all the shit, all the scandal, all the teen depression, all the thread store democracy, all the privacy violations, and it took an earnings miss to take the stock down 20 odd percent. All right, so let's look at some other earnings reports. Amazon brought in, get this, $31 billion in advertising revenue last year. That's more than Microsoft, Snapchat, and Twitter combined. While this may only represent 7% of the company's total 2021 revenue, the majority of this

• 4:23Scott Galloway?

  type of revenue comes from sponsored products that show up when you search for, say, a pair of Nikes, Energizer batteries, or Pantene shampoo. More on this in a minute. At the same time, Alphabet registered record annual revenue of $200 billion in the same year, with Google's advertising business continuing to make up roughly 80% of total revenue. Meanwhile, meanwhile, Facebook suffered its largest one-day stock drop in the company's history, shaving off about $230 billion in market value. I said it was 180, it was 230 billion. Wow, imagine that. They lost the value of Boeing, Airbus, and throw in Ford and General Motors in one day. This all came after reporting a decline in profits and the number of daily users, which declined for the first time in their 18-year history. Just to give you a sense of scale here,

• 5:08Scott Galloway?

  The Wall Street Journal reports that Facebook's market decline was more than the individual market capitalizations of 472 companies in the S&P 500. So, they lost, basically, the value of every company in the S&P 500 except for 28 of them. Meta's CFO cited several headwinds as the reason behind the company's weak performance, including increased competition for people's time, see above TikTok, and Apple's iOS changes last spring that made it so users have to opt into ad tracking. So, what's happening here? What can we learn from this latest round of earnings? What's the 411? What's the end to the site? What's going on here? What the fuck? Question mark. See above, profane and I'm vulgar, live with

• 5:49Scott Galloway?

  it. We're entering what we would call, or this is an example of what we would refer to as the funnel wars, and that is slowly but surely, Amazon and Google are flexing their advantage over Facebook regarding their ability to utilize search as a positive advertising mechanism, rather than relying on targeting you with all sorts of obnoxious ads. Facebook, Google, and Amazon have long controlled US digital ad spend, making up nearly 2/3 of the market. But Facebook's Achilles heel has been that despite its incredible breadth over a billion users, actually, I think it's like 1.8 billion, but anyways, it doesn't go that deep. It has very little access to the point of purchase. Remember, the reason companies spend billions on advertising is to drive ultimately to a consumer purchase.

• 6:33Scott Galloway?

  So the further you get down the funnel, think of the funnel as awareness, intent, and then purchase. That's why essentially the shit or the shelf space at the register or the checkout where your kid grabs stuff and you have to put it back, that is the most expensive shelf space in the store. And the most expensive shelf space in the store that is the internet is search, because you're pretty much, when you type in BMW 318i, 36-month lease deal, Delray Beach, you're basically saying, "I'm pretty close. So I'm pretty goddamn far down the funnel." Facebook is where people congregate for socializing, for news, for entertainment. So it's a great place to get messaging and advertising in front of a lot of people. But it is more about awareness and reinforcing associations, what we traditionally think of as branding, as opposed to going full funnel or further down the funnel, which is more valuable.

• 7:17Scott Galloway?

  But Amazon, Amazon is by virtue of the company and the offering, already starts pretty far down the funnel. People are in the store. Did you know there's more money spent on what's called shopper marketing? That is, the displays, the cardboard displays showing Tom Brady at the end of an aisle saying, "Bud Light, $9.99 six-pack." I have no idea what six-packs cost right now. I'm like, if I were president, they would be horrified that I do not know what anything costs. I do not go into grocery stores. I order in, I eat out, or someone else buys my food. I don't think I've been in a grocery store other than to buy Advil or vitamin water or, I don't know, something, something, in a long, long time. Anyways, but when you're in the store, you are down the funnel.

• 8:02Scott Galloway?

  You're ready to buy. So brands spend more money in marketing inside the store than they do outside on traditional branding. Amazon is that store. People actually buy things. And Google is where people are looking for or putting together their lists, assembling their list of things they want to buy. So Amazon and Google are further down the marketing funnel, towards the bottom, where the purchase actually happens and makes them a stronger place to put in this type of advertising. I don't even like calling it advertising, right in front of the consumer who have their credit cards out and are ready to go, or better yet, their credit card's already saved and on file. To date, Facebook has overcome this advantage with massive amounts of data and claims of pinpoint targeting. But there's more and more evidence that Facebook's targeting isn't nearly as good as the company claims.

• 8:46Scott Galloway?

  And so as a result, we are seeing a massive shift in value from Facebook down the funnel to Google and Amazon to search. Why did Amazon have such an impressive quarter? Well, one, That $30 billion in advertising revenue may seem like a small amount of Amazon's total revenue, but it's got to be 95-plus points of margin versus, you know, the teens or 20s or 30s in margin for the other stuff where you actually have to fulfill atoms versus fulfilling bits. In addition, it's search. They shouldn't call it Amazon Media Group, they should call it Amazon Search Group. So what can be learned here? What should Meta do? Let's pretend we like Meta and we don't think that they're mendacious fucks depressing our teens and weaponizing our elections. They're doing it. They are saying, okay, we've got to get control of the end distribution.

• 9:30Scott Galloway?

  And they're trying to do that with their virtual reality labs. They've gone from $1 billion in sales to $2 billion, although it cost them $10 billion to get there. With the Oculus, they're trying to have an end device and control the end distribution. They are going vertical. This is the right thing to do. And also, they're making a massive visionary, staggering investment in trying to keep that unbelievable growth engine humming. However, however, I don't think the tactics personally work. I think that the Oculus is a flaming bag of shit. I just don't see people wearing this thing. I think the metaverse is already out there. Basically, people are going to declare victory on the metaverse because they're going to claim that video games are the metaverse and it's growing. So whatever happens here, there's so much capital going into the metaverse, we're all talking about it. Renaming the company Meta was genius.

• 10:14Scott Galloway?

  That was such an elegant brand move because it changed the conversation away from depression and from insurrection to the brand-new future of the metaverse. But the tactics, specifically the Oculus, I don't think Facebook has ever made a thing that has worked. It's not easy. Apple is obviously great at it, maybe best in the world at it. Amazon is pretty good at it. Google can't do it. And in a distant fourth is Facebook, as evidenced by the anemic sales of the Oculus despite the massive investment. I think we're going to start to see this thing unwind in three to six months when the data begins to support. That this is kind of Magic Leap version 2.0. And that is, it's an interesting idea. And but tomorrow never becomes today, so to speak. So I think they're doing the right things.

• 10:58Scott Galloway?

  They're diversifying their revenues. They're trying to figure out end distribution. They're trying to fight back. They're not afraid to make huge investments. But I think the combination of the full frontal attack of TikTok, Apple kicking them up the funnel by taking their targeting, regressing their targeting or taking their targeting abilities back five or 10 years, plus a misguided investment in distribution known as Oculus, is going to be an incredible blow to Meta. Now, having said that, its core business, look at its core business. It's still crazy. This is an amazing business. It'll still be worth several hundred billion dollars. But I would argue that the things, it's going to be a rough 12 or 24 months for Facebook.

• 11:43Scott Galloway?

  I think that will actually ease up the pressure on them, the regulatory pressure, as people begin to see that, oh, competition works and you don't need to break them up. And we don't need to to go after them, that the marketplace is handling it themselves. It'll be very interesting to see if TikTok continues to play the key role here. What's the key role for TikTok? Why don't I jump around? Their ability to convince consumers and regulators across Western Europe and the United States that there is somewhat of a Chinese wall, Chinese wall, ironic fitting here, between the company and the CCP's ability to weaponize this data and begin telling or programming content that our 15-year-olds see that they should not join the US Army

• 12:25Scott Galloway?

  or that US democracy and capitalism are not working. First evidence of that on TikTok. And oh, my gosh, they are in trouble. They are not accessing capital markets. But at the same time, I imagine they have to thread the needle of ensuring that democracies don't feel that they're weaponized AI Chinese warriors coming for our babies, but also not piss off the CCP to the extent that they say, hey, we're willing to go gangster on you and basically put your company out of business, as they've done with some. Tutoring companies and what they appear to be doing with Didi and also disappearing Jack Ma. Jesus Christ. Yeah. Yeah, complain about America, everybody. Go, go start a company in China and start mouthing off and see what happens. Anyways, anyways, it's gonna be interesting, folks.

• 13:09Scott Galloway?

  It's gonna be interesting. Oh, by the way, did you see there are rumors that either Amazon or Nike are in talks to acquire Peloton? Who would have thunk it? Who would have thunk it? Oh, my God. Oh, my God, is he for real? Is he for real? Should we stab him with the fork? Should we stab him with a fork to make sure that he's not the devil and can see into the future? No. I also said that Alibaba was a great buy at $180 a share and it's now, I think, down to $120 or $130. So anyways, I get it wrong a lot, but occasionally, occasionally, we hit gold. We hit gold. And also, who's been added as a third potential suitor? Apple. So it looks like we may have not only gotten this one right, but even picked the right suitors.

• 13:54Scott Galloway?

  This is a great buy, a $9 billion entree into the metaverse known as Peloton. The companies with the two best supply chains are, one, Apple, number two, Amazon. They come in, they lay over Peloton with this cold, comfortable blanket of supply chain excellence. And what's gonna happen? Because they have a dual-class shareholder company that will give the shareholders a 30% or 40% premium. But the people who make bank here are John Foley, who just became chairman and the new CEO, who was the former CFO. And Amazon will say, you know what? We'll give you an earn-out deal, which will be just outrageous because we can scale this thing 10x by rolling it into Amazon Prime. Or you're on your Peloton and it pops up, would you like to buy the entire outfit of your instructor?

• 14:37Scott Galloway?

  Would you like to commit to having a better diet the next seven days as you get off of your ride? Oh, we were taking on a bike ride through Paris. Would you like to book a trip? I mean, there's just... The possibilities are endless. They're endless. I'm exhausted just thinking about it. Anyways, the problem, or one of the many problems with the dual-class shareholder structure is a lot of the value will leak from the shareholders to the individuals who control the sale of the company. And that's what I don't like about it. It just accretes too much power to too few individuals. That's the problem with the difference between democracy and autocracy, is that the temptation to sacrifice the rights of the many for your own benefit, i.e. cronyism, become too great. And the same thing happens with dual-class shareholder companies. Anyways, bit of adaption, bit of adusion. Anyways, it's gonna be very

• 15:20Scott Galloway?

  interesting, right? What have we learned? What have we learned? Vertical matters? Vertical matters? And also, also, that the metaverse, the cheapest metaverse for sale right now, is in fact Peloton. We'll be right back for our conversation with Professor Margaret Omara.

• 15:38Scott Galloway?

  Support for the show comes from Bilt. Most of us work hard to earn our keep, but usually there's no one around to hand you a cookie when you successfully pay your monthly housing bill. No one except Bilt, that is. Bilt has expanded from their original renter rewards program, and they have a lot more going on for members now. For example, members can earn points on mortgage payments, too. Every housing payment gets you points that get you a lot more than baked goods, such as flights with top travel partners, including United and Hyatt, Lyft rides, Amazon.com purchases, and much, much more. Here's another benefit of Bilt membership. You also get access to what they call a neighborhood concierge. You can make restaurant reservations, book fitness classes, and find new local spots, all while rewarding you at more than 45,000 merchant partners. It's simple. Being a renter

• 16:21Scott Galloway?

  and now owning a home feels a lot better with Bilt. You can download the Bilt app and join the membership for where you live at joinbilt.com/provg. That's J-O-I-N-B-I-L-T.com/provg. Use our link so they know we sent you.

• 16:38Scott 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 Regent 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?

• 17:23Scott 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 prof G for $1,000 off.

• 17:55Scott Galloway?

  Welcome back. Here's our conversation with Margaret O'Mara, professor of history at the University of Washington and author of The Code: Silicon Valley and the Remaking of America. Professor, where does this podcast find you?

• 18:06Speaker 03

  I'm in Seattle, Washington, on the campus of the University of Washington where I teach history.

• 18:10Scott Galloway?

  That would make sense. That would make sense. All right, let's bust right into it. For Wired, you recently wrote an article where you said you don't have to travel far in Silicon Valley to find a techno-libertarian proclaiming that the sector's success is purely the result of entrepreneurial hustle and that the best thing government can do is get out of the way, but that conclusion ignores history. All right, so start there. What can history tell us about the state of high-tech economies?

• 18:38Speaker 03

  That the government played a really critical role in starting the flywheel going, but it's the way that it happened that actually helps us explain both the magic and also the collective amnesia about how it all went down.

• 18:52Scott Galloway?

  Mm hmm.

• 18:52Speaker 03

  It really starts in the 1940s in earnest with the military spending of the war and especially the Cold War, which involved a lot of spending on small electronics and communication devices, which happened to be things that Stanford University and a few startups nearby founded by alumni, including notably Hewlett Packard, just founded in a garage in 1939. That's what they did. And so all of this money just flew westward into California. All of these companies, electronics companies located there to kind of get on the military industrial complex bandwagon. And for the first two decades of this valley's existence, the defense industry and also

• 19:37Speaker 03

  the space industry, NASA, the Apollo program, was responsible for a main part of the book of business of Silicon Valley companies, including some of its most iconic early venture-backed startups like Fairchild Semiconductor.

• 19:50Scott Galloway?

  It feels like it's more psychological than historical that people, especially I find this infects the valley. There's a conflation of luck and talent where there's, you know, they think that everything is a function of, quite frankly, they correlate their success and failure with the individual as opposed to the circumstances. The, and I agree, there's just a ton of massive government subsidies and investment that have been a function or kind of put wind in the sails. When you look historically at societies that are at this point now looking forward, do you think, well, history repeats itself and this is likely to happen over the next decade?

• 20:33Speaker 03

  History doesn't repeat itself. There are patterns. There are common characteristics and tendencies and human nature that we can read back. Look, history gives you lots of reasons to be pessimistic, for sure, particularly when you're taking an honest and frank look at it. But also, I think there's plenty of reason to be optimistic and to look at possibility. And look, the Cold War is not going to, we're not going to sort of replicate that moment, the moment of, you know, kind of serendipity and opportunity and people being able to take advantage of getting on this incredible escalator of business creation and upward mobility. But there, you know, when we look back, we do see it's possible that the US government

• 21:18Speaker 03

  can put its thumb on the scale to advance the state of the art of really blue sky technology when there's political will and imagination to do so. That it is possible to not only invest in tech, but invest in people, invest in people that aren't maybe, you know, already part of the power structure, already don't easily come into it. And let me, let me tell you, like, the history of Silicon Valley actually is a really, really instructive in this way. Look, Silicon Valley is, then and now, is no model of diversity. It has been a very white, very male place throughout its history. But if we go back to the 50s and 60s, that the young men who were, who were part of that were, by and large, people from pretty humble backgrounds. Bob Noes, who's co-founder of Intel, he's from, you know, preacher's kid from small town Iowa.

• 22:01Speaker 03

  Yeah, Gordon Moore grew up in a, you know, tiny little cottage, you know, working class kid. These were scholarship students. These were people without connections. If they'd had connections, they would have stayed east and gone to work for a Fortune 50 company or their father's law firm. They were, they were coming west because they didn't have other options. And they were able to take advantage of this public finance, publicly financed education, you know, GI Bill, public higher ed, like the University of California, and as well as this money that's flowing into the industry.

• 22:34Scott Galloway?

  Would you look, have you looked at cities at all? I think of Seattle, San Francisco, now Austin, Boston. There are certain regions that just create a tremendous amount of stakeholder value due to the explosion of technology in those regions. Is there, is there an alchemy to this? If you're advising a mayor or a government official on how do you create these epicenters of wealth creation? What's the magic and the mystery that comes together?

• 22:58Speaker 03

  Yeah, there is, there is a decent amount of magic, but there, but there also, I think, is something of a formula that we see not just in tech hubs, but kind of across human history, like start from the very beginning. Which is, you know, there are core competencies that, that create capacity, but those are sparked and able to scale by what I identify as three things. One is you need resources, you need money, capital. You need someone with, you know, you need the Medici to make bank so then they can be patrons of, you know, the artists and commission, commission great art. So you need, you need that. Second thing you need is institutions. So you need spaces for people to create stuff that is free from market pressure. So in this, now we would say it's universities.

• 23:40Speaker 03

  So you look at the geography of tech now, you've got University of Texas at Austin. You've got in Boston, you have MIT and Harvard. You have in the Bay Area, you've got Stanford and Berkeley. Here in Seattle, you've got the University of Washington. That is, those, those spaces are critical. It's talent production, it's idea production. And the third thing is a little squishier, which is quality of life. And, and we think, now we think of like, oh, it's, you know, that's perks and whatever. It's, it kind of changes over time and space, but think about the things that make a place attractive and sticky. So when you have a super mobile workforce, you want a place that it would make sense for people to choose to move to and stay there. And that can also be affordability and good schools and that stuff.

• 24:22Scott Galloway?

  Yeah, I always thought that it started, I've said that there's, it's difficult to find a company that's created more than 100 billion in market capitalization that isn't a bike ride from a world-class engineering university. Shouldn't, I mean, isn't it all about Paul Allen giving the University of Washington, what was it, a hundred million dollars? That universities really are, because kids graduate, they start a company, they decide they want to stay, they get sold, they make a ton of money, and they decide to, to start their own venture capital firms in that region and wash, rinse and repeat.

• 24:55Speaker 03

  Yeah, yeah. I think that's right. I mean, the other thing, and this is a, this is a hard message for whether you're a mayor or a entrepreneur to hear, but part of the other secret is time, right? So all the places we're talking about have been at this for a while.

• 25:08Scott Galloway?

  Yeah, generations, yeah.

• 25:09Speaker 03

  So even at UW, we had, you know, in the 1920s, Boeing was helping to jumpstart the first aerospace engineering program in the world here. Stanford, actually Stanford's story is really interesting. I mean, Stanford is kind of really unique. It's a private university that had a lot of flexibility to remake its curriculum pretty comprehensively, which it did in the early 50s, to bump up physics and engineering and the things that the Cold War military industrial complex needed. And there were also trade-offs. There were other programs that shrunk and were less, got less attention. Not, public universities can't do that. You know, the place I work can't, can't do that. It's there to serve the people

• 25:53Speaker 03

  of the state of Washington, among other things. Berkeley can't really do that. But yeah, you need, you need higher ed. And it's, again, it's not just the tech. It's not just tech spinoffs. It's people. It's people power.

• 26:06Scott Galloway?

  And do you think, I mean, it's something I'd be curious to hear your point. One of the things that bothers me about these great universities is they've adopted sort of this rejectionist feel to them, that they take pride in their exclusivity. I don't know if the same is true of the University of Washington, but the stat my listeners are sick of hearing is when I applied to UCLA, it was 72% acceptance. Now it's 12. Do you see the same thing happening? I'm curious what your thoughts are, being another insider at an educational institution, around how they're evolving or not evolving?

• 26:36Speaker 03

  I mean, look, it's a finite resource and demand has increased, right? So part of this is more, and then you have this sort of new model of the way kids apply to college, which is they apply to a whole bunch of them. And, and so that, that affects the, the metrics. I think one real, one piece of the puzzle that is missing is on the economics of higher ed, and particularly public higher ed, which used to be extremely affordable.

• 27:00Scott Galloway?

  Yeah.

• 27:00Speaker 03

  Like really cheap. Like Berkeley was 50 bucks a semester. So, you know, these people that I write about in my book, Who were coming up in the, you know, the homebrew generation, all these people who are the, you know, instrumental to the Silicon Valley we know today, they're, they're going to college for, for cheap, including Stanford was really cheap. So, you know, the price tag is also, I think, a piece of that and just the debt that a lot of people, particularly first gen college attendees, carry when they're leaving is pretty damaging. And, and, and that's a, that's a result, certainly in the public university size, of, of state disinvestment in higher ed. It's not been very fashionable to pour money into universities. But that,

• 27:44Speaker 03

  that state investment is, you know, you can't get Paul Allen to finance to undergraduate tuition. But so the money that, that comes in from private sources is, is directed in different, goes to different things. And so there's real, been a real kind of austerity politics that has been damaging to the kind of, again, accessibility and affordability was part of the, the magic here in the middle part of the 20th century, and that's diminished.

• 28:11Scott Galloway?

  Oh, gosh, agreed. UCLA, I spent my total tuition undergrad and grad for degrees from UCLA and a graduate degree from Berkeley. Total tuition all seven years was $7,000. It's just, just crazy. So, talk a little bit about the politics in the valley. You wrote that they're neither left nor right, but can be defined as techno optimism, the belief that technology and technologies are building the future that the rest of the world, including government, needs to catch up. I'll, I'm more cynical than you. I find that they'll say anything and believe in any politics that says, don't regulate me and don't hold me responsible for these silly things like diversity, or paying taxes, or

• 28:54Scott Galloway?

  regulation. That they don't look left, they don't look right, they just look down at their Benjamins. That defines their politics.

• 29:01Speaker 03

  Yeah, yeah, I mean, look, you know, Silicon Valley grew large and wealthy in a 40-year period that was also a time when, you know, government was, you know, not in fashion, right? Big government was unfashionable on both left and right. Skepticism in institutions was increasing and, you know, the technologies we use, social media platforms, all those things are obviously, you know, increase that, that can increase that skepticism because of all the information flowing across them. But that was a pre-existing condition, you know, we sort of starting from the Vietnam and Watergate era. So it's a really interesting politics in the valley, which is, yeah, again, you know, there are a lot of people who have not only, you know, first were, were kind of choosing

• 29:43Speaker 03

  to focus their attention on computer hardware and software as kind of a small P political project of we're going to connect the world, we're going to put a computer on every desk. And once that's, those conversations are happening, that all of the messiness of the divisions of the world and all the failure, all its failures are going to be overcome. And this abiding belief that there must be a better app for that, so to speak, there must be a better technological path to affix to it, is something that actually is, you know, even some of those in Washington, who are the fiercest, you know, pro tech regulation lawmakers, some of those conversations are kind of like, well, can't you just make the algorithm, you know, work in a way that does X, right?

• 30:27Speaker 03

  And, you know, the answer is sometimes there isn't a tech answer. Maybe the answer is big P politics and, and the messy reckoning of, you know, real life, old school interactions, you know, and look, techno optimism is also fueled by the fact that tech has made a lot of people a lot of money. I mean, there's, you know, it is kind of replaced, you know, became the new Wall Street and the dot com boom and, and certainly has scaled up even more in terms of a destination where people are coming not just to build things, but also thinking that perhaps that's going to make them incredibly rich, as it has so many other people.

• 31:05Scott Galloway?

  So we like to think, or I always thought that when I lived in San Francisco, we got the sense that innovation literally stopped once you got about seven miles from SFO. And if you look at China, they've arguably produced companies that in many ways are more innovative than ours. And in terms of product development and speed to market, they are arguably kind of neck and neck. What is it about the relationship, or how is the relationship different between public and private sector there? And what do you think is good and bad about each system?

• 31:37Speaker 03

  It's a, well, it's a very different look. It's, you know, we haven't had, and we talk about a, you know, it's the tech Cold War, and it's a very different political system, a lot of the Soviet Union in the United States. But the thing that's tricky is that's different from, say, the US, from the original Cold War, is that in the Soviet era, they built their own self-contained computer systems. Behind the iron curtain, there were those computers. And then on the other side of it, there were other systems. And now Chinese, when it comes to tech, the systems themselves, not only are supply chains entangled with one another, but the tech itself is very hard to unwind in terms of the technologies that are inside the machine, inside the router, so to speak.

• 32:21Speaker 03

  You know, China has, in many cases, you look at what China's doing now, and they clearly looked at what the US did in the 50s and 60s, took notes, and is doing much, many of the same things at a time that the US is not doing that at scale, investing in advanced technologies, higher education en masse, kind of finding, you know, favored industries. But it is a much, you know, there has been a public-private entanglement in the United States since the get-go. The US has, you know, encouraged industrial development through indirect spending. That's certainly how the Cold War money flowed. That's one reason it was so hard to see and to acknowledge, because it was flowing to private entities and universities. But in China, that's different, right? There's a different kind of command and control structure and accountability.

• 33:06Speaker 03

  And governments, the CCP at all levels, is much more intensely involved in operations. And it's, you know, I don't think I have a clear answer yet on the sort of the ultimate meaning of that, because I do see American-style capitalist democracy as an integral part of the Silicon Valley story, that what happened here was quintessentially American phenomenon and the structure of...

• 33:34Speaker 03

  How tech hubs grew and how they've continued to thrive is very much a reflection of American political culture. So in a different place and context and history, it's going to be, it's going to shape up quite differently.

• 33:47Scott Galloway?

  We'll be right back.

• 33:54Scott 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 Regent 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

• 34:37Scott Galloway?

  or Cursor. Want proof? 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 prof G for $1,000 off.

• 35:02Speaker 01

  This episode is brought to you by Michelob Ultra. Good times mean competitions between you and your friends, like seeing who can throw some pigskin the farthest or rush the field the fastest. Winner gets an Ultra. Because it's not just a superior light beer, it's also giving fans superior access to their favorite sporting events. Superior is worth playing for. Visit michelobultra.com/superioraccess to enter. Enjoy responsibly. Copyright 2026 Anheuser-Busch InBev Michelob Ultra Beer, St. Louis, Missouri.

• 35:33Scott Galloway?

  You touched on the diversity or the lack of it. And I was shocked, I saw this one stat that said 40% of venture capitalists are from Harvard or Stanford. And then I thought, it's probably worse if you look at capital allocated. It might be, and I don't know this, but I would bet it's bigger than 40% of capital allocated is from people who come from Harvard or Stanford. It just feels as if, for some reason, this industry evolved in a very homogeneous way, more so than most industries. It's not the West Coast. The media industry developed with a lot of people from different backgrounds. There's just, even finance feels as if it's got more diversity. There's something about the Valley, and especially venture capital, that feels very milquetoast. Any thoughts?

• 36:18Speaker 03

  Yeah. You know, it's funny. I think this goes to something that's both Silicon Valley's great advantage and its Achilles' heel when it comes to bringing new voices into the conversation to make better products. Frankly, that's why diversity matters, not just because you're checking a box, which is that it's the networking, right? Silicon Valley was, kind of grew up off to the side of the main action of American and global capitalism. It was tightly connected to flows of capital coming out of Wall Street and old money. It was tightly connected to Washington because of the Cold War and the space race. But it was kind of, you know, it was a place that grew apricots and prunes and had about three restaurants that all closed around nine o'clock.

• 37:02Speaker 03

  And you were, it was a very small town. And you had, it was a single industry town. It was a company town that was built around tech. And in those early days, engineering programs were entirely white and male. There weren't, there wasn't significant inflows of immigration, you know, kind of meaningful immigration until the 1970s, which was transformative and critically important. But also, it was just a very, it was a, you know, where did the original... The OGs of the whole industry, where did they all come from? They didn't all come from elite programs necessarily, nor elite backgrounds. But they were coming from engineering environments, MBA programs that, you know,

• 37:46Speaker 03

  then Harvard Business School didn't let women in, right? So these are incredibly homogeneous places they're coming from. So this is the pattern. This is what Steve Jobs described as handing the baton down from one generation to the next, which again, incredibly generative and critical to understanding why Silicon Valley is able to do what it does. You have people who are executives, operators in one tech generation. They have a big exit. They become VCs in the next. Then they pick the winners of the future generations. And it isn't just, as you know, and your listeners know, it's not just money. It's mentorship. It's showing people how to run a company. It's showing how a bunch of 22-year-olds who might be good at engineering but don't

• 38:26Speaker 03

  know anything else, it's being there, connecting them in with the right lawyers and the right marketing and PR people and all of the kind of wraparound services that you would need. You know, all of these kind of qualitative factors are shaping these decisions in ways both conscious and often unconscious. No one put a sign on the door saying, "No girls allowed." But effectively, that did play out that way.

• 38:54Scott Galloway?

  I'm curious what your thoughts are. So, and again, my questions are always pregnant with a comment, so I'll just be transparent. I find it very nihilistic and strange that the wealthiest people out of the valley either wanted to a different universe or want to go to a different planet. And I'm curious what your thoughts are about the metaverse as a concept, a focus of all this additional capital and kind of latest obsession. What do you think of the metaverse and what it says about technology?

• 39:25Speaker 03

  Well, I think the metaverse, you know, it is a success to a point in that we're all talking about the metaverse when it's a bunch of hypotheticals.

• 39:33Scott Galloway?

  Where or not, yeah.

• 39:34Speaker 03

  Yeah, I mean, look, it reflects the huge mountains of cash these companies are sitting on, right, the concentration of capital and they've got money to spend and they've got money to spend on R and D. It also reflects the need to for the next new thing, right, that the constant need to iterate and build on. I just have a lot of questions. I wonder, you know, these are, you know, new products or new ideas that are moving on without solving the problems inherent in the old idea, like the problems of social media and the disinformation and harassment and those sorts of things, of privacy and saying, well, we're going to address that as we get to it.

• 40:16Speaker 03

  But at a time when trust has been eroded in some of these companies, it seems like a real challenge to convince users, particularly new users, that this is a great thing. I'm also just wondering, after two years of pandemic life, when we've all had full body immersion in screens and have perhaps have new appreciation for those real life connections that were, you know, not normal for most of the planet for the last two years, if something that is immersing us in an even more immersive digital environment is that attractive.

• 40:54Speaker 03

  But hey, look, I'm a history professor, I'm not a futurist, and I readily, you know, I know that I may be proved wrong, but I don't quite see, I see this, you know, I also see in whether you're flying to space or building a metaverse, I also see this is a product of people who've spent a lot of time reading sci fi. And that has, and that's been true for a very long time in the tech industry, that those imaginaries, those utopias and dystopias have really shaped people's thinking and that, not necessarily in a way that speaks to the rest of us.

• 41:34Scott Galloway?

  I wonder, I'll put forward two theses and you tell me what you think. I wonder if it's the opposite, that we have an entire generation of young people who have gone into the metaverse and they may never come out, that they're playing video games so long and they spent so much time online socializing because they weren't in school, that they're, I don't want to say trapped there, maybe the optimistic way to look at it, they're just more comfortable in the metaverse. And then my second concern is that, especially among young men, the chasm between the quality of their life in a fake universe and a fake reality, then their reality in terms of socialization, their ability to attach to school, attach to a job, attach to a mate,

• 42:18Scott Galloway?

  makes the metaverse more and more appealing. And that, you know, it's sort of like those futuristic movies where I'd rather just be, you know, numbed up and plugged in and just checked out. This is, you know, it's the alternative, the real universe, is becoming less and less appealing for a lot of people. So anyways, is this a dystopic future? Are we going to go, I hope you're right. I hope we go back to our herb gardens and playing soccer and going on dates. I hope that happens.

• 42:49Speaker 03

  Well, look, technology is never happening, occurring in the vacuum, right? It's a product of the society and adoption is reflecting what's going on in the bigger world. And I think this, you know, why did social media take off in the way that it did? Partly because these other gathering places, these other opportunities for people to come together and form communities in real life had eroded. People were moving far away from the places they grew up. They weren't, you know, they were living in, you know, sprawling suburbs and where it was more challenging and where these, they were working all the time and didn't have time to, you know, go bowling and do all the things that, that used to be more common hallmarks of, of American adolescence and adult life.

• 43:32Speaker 03

  And, you know, I think there's also this kind of economic, the economic inequality, the lack of, of true economic opportunity that

• 43:42Speaker 03

  So many Americans feel the instability of working class jobs, the gig economy, the, again, the erosion of solidarity and a feeling of optimism about the future, which is structural and material and has to do with politics. And, you know, these are bigger things, not individual choices necessarily. But I see that in the, you know, not only in the talking about virtual worlds and, and, and gaming and, but although, you know, to be clear, I think with any wave of new technology that's sort of entertainment and absorbing, there's been a panic about, oh, are children going to be swallowed up by, you know, Hollywood

• 44:24Speaker 03

  films, silent films were considered to be just the devil's work in the 1920s because everyone was going to the movies all the time. And there was, everyone was convinced that young people were going to be lost to, you know, Mary Pickford.

• 44:34Scott Galloway?

  Elvis shaking his hips.

• 44:35Speaker 03

  Buster Keaton. Yeah, it was just, so it's all relative. But I think there's, there's a, you know, the, I, thinking about crypto, right? And web three and these, and decentralized finance and the way that, you know, and, and Robin Hood and GameStop and, you know, the, the way that young men in particular are getting involved in those markets as a way to, you know, and partly because they feel boxed out by and alienated from these traditional financial institutions. They can't get a piece of it. So maybe this is a way in.

• 45:06Scott Galloway?

  So a couple of final questions. Economic history, you look at this, you study it. No one can, no one has a crystal ball. But when you look at the market, what, do you have a sense, if you were to say, over the next two or three years, this played out, would, are there certain scenarios in the markets that you think are more likely than others?

• 45:25Speaker 03

  Hmm. Yeah, well, you know, it's a boom and bust economy. What goes up must come down. And stack, tech has certainly had notable booms and busts. You know, I think the Fed is, in the last half century, the Fed has been a critical orchestrator of, of, of the possible and, and tech has grown up in that, that world. So I think the sort of where, what the central bankers do, do and don't do is going to have, you know, if the tap on this, right now, the, you know, venture capital, venture capital used to apply to kind of a relatively small band of, of investment finance, right? It was venture capitalists were sort of these guys and they're mostly on Scandale Road and there may be a few other places. And now venture capital involves.

• 46:11Speaker 03

  All of these sovereign wealth funds. I mean, the people who are playing and in venture backed companies is enlarged. So what do I see that happened? I'm thinking not just of the dot com boom and bust, which I am thinking a lot about, where you did see a lot of froth, but then after the bust, you saw some fundamentals emerge and the valley itself was left with more wealth after the bust than it entered the boom with considerably more. So even though, and that created a runway for companies like Google and Facebook and

• 46:51Speaker 03

  the next generation to grow, the generation of platform companies. And I think regulation is going to be, the regulatory conversation is going to be significant. I'm also thinking a lot about 1873 and 1893 and the various panics and market volatility of the 19th century and how regulation, antitrust enforcement and putting guardrails on big companies and limiting what they did and forcing them to share a little bit of the goodies in terms of the things they invented was instrumental. I think a lot about Bell Labs and how a consent decree forced AT&T to share the transistor as a piece of technology so that silicon semiconductor companies in Silicon Valley could build off of it and iterate on it.

• 47:31Speaker 03

  That sort of sharing of ideas and deconcentration of money, power and ideas and talent is pretty necessary if we're able to get to where we, a real generative tech economy again.

• 47:45Scott Galloway?

  I like that, deconcentration. I'm a big fan of deconcentration. So final question, Professor, for those of us who recognize as we get older that understanding some basics or understanding more about history is just such a fantastic context for decision making and understanding how we got here. What three or four books would you recommend for those of us who want to do a master class in history, if you will?

• 48:18Speaker 03

  My gosh. Well, that's a very hard question to pose to a history professor I'm talking to from a room full of books, and it's hard to choose just one. It's like choosing your favorite children.

• 48:26Scott Galloway?

  We'll give you three or four. And by the way, I'm going to take two away from you because I've asked this question to Neil Ferguson, to a variety of historians, and the two that always come up, and I'm not going to let you pick them, are Sapiens and Guns, Germs, and Steel are the two that I hear the most.

• 48:42Speaker 03

  Yeah, they're not on my list.

• 48:43Scott Galloway?

  Oh, go on.

• 48:45Speaker 03

  And I think that's really telling, actually. This is aside. This is not what you asked me. But the histories that certainly tech leaders glom onto are the big ones, the big, sweeping narratives that kind of give coherence to millennia. Yeah, meta trends, big history, big data. And I think there are real limits to what insight you can get from that. I think that where you get more insight is in the more granular stories of human failings and triumphs, of having a deeper sense of context and contingency and

• 49:28Speaker 03

  the things that went well because of happenstance and the things that went well because someone actually did something, you know, meaningful and deliberative. So here's, I'm going to throw out one that was, I'm sure no one has suggested, which is The Republic for Which It Stands, which is a big mammoth bookstop of a history by Richard White, who was a professor of history at Stanford. He recently retired. And it's about the Gilded Age. The first one starts with, and Reconstruction, so it's 1865 to 1900, roughly speaking, the American history of that period. It's part of the Oxford History of the United States, which

• 50:11Speaker 03

  is a really great series of original monographs, not textbooks, but kind of big books about a period by leading historians. And what Richard does is he is showing a nation that is both struggling to recover from the Civil War materially, politically, racially, socially, reckon with industrialization and capitalism and what to do about capitalism and how does, what's the role of government and balancing this new States and markets, it's super interesting and it's incredibly relevant for where we are right now, if you're ready for a big meaty book. That's the sort of big history that I

• 50:53Speaker 03

  think really gives us insights that are applicable, useful, relevant, as well as just understanding more about how we got to now.

• 51:04Scott Galloway?

  Understanding more about how we got to now. Margaret O'Mara is the Howard and Francis Keller endowed professor of history at the University of Washington. She's also the author of three books, Cities of Knowledge, Pivotal Tuesdays, and The Code: Silicon Valley and the Remaking of America. She joins us from her home in Seattle. Professor, thanks for your time and stay safe.

• 51:25Speaker 03

  Thanks for having me, Scott. It was great to be here.

• 51:35Scott Galloway?

  Okay, Algebra of Happiness. It's been a, not a tough week, but a learning week, which is usually learning around some of the controversy surrounding Spotify and for us, the decision to pull Prop G off of Spotify. Received some really thoughtful emails, and I'm genuine in saying I appreciate those emails. They've been very civil. You sound as if you're hearing from a friend who's trying to help you. And the general gist is, the writer says, I think you did the wrong thing here, that we live in this dangerous era of cancel culture where people want to shoot and ask questions later. The dissenter's voice is really important, that speaking truth to power even offends people or challenges the conventional wisdom, just as people challenge the wisdom around masking. And it looks like a lot of them were right. People challenged the conventional thinking around the severity

• 52:16Scott Galloway?

  of lockdowns, and it looks like there was some truth to that, that we have to appreciate the dissenter's voice, that Joe Rogan didn't bring any malice, that he was just generally trying to create or hear the other side of the conversation, and that you are getting on a very slippery slope and we expected better from you. I agree with most of that. And I really do believe that these people are trying to be genuine and not engaging in, I don't know, an opportunity to try and dunk on me. So I appreciate it. I hear you. I agree with a lot of what you said, but let me be clear. This isn't even for me about Joe Rogan. This is about Spotify. Specifically, I think, media companies, including all the media companies I work with. Have a responsibility based on the gravity of the subject and the influence to do some

• 53:01Scott Galloway?

  baseline level of fact checking. I think that Spotify could have solved this problem by just sitting down with Joe Rogan and its other content that it controls and says, guess what? We're bringing in somebody who can fact check around health-related issues. It won't really interrupt the programming, but if you say on your program that vaccines alter your DNA, we're probably going to ask you to either push back or we're going to take it out. This is, for me, is a nod to science. It's a nod to vaccines, which every piece of data coming out shows that they have more and more efficacy. It's a nod to my cousin Andy, who passed away from COVID. And as far as I can tell, the only reason he passed away was the bad decision to not get a vaccine. So I don't think there's both sides here. I don't think there's two sides to this debate.

• 53:44Scott Galloway?

  What I don't like, what bothers me, is the piling on that is taking place, specifically people whipping out their guardians of gotcha costumes, loading up or loading into the time machine with editing software and going back and making a person look terrible by taking a couple dozen years of content, finding the worst moments, stringing them together out of context, and then engaging in the politics of personal destruction. I think that is bullshit. I think this is about Spotify not behaving like other responsible media companies, full stop. I think it's about capitalism, Indiari, or whoever, or Mary Trump, or yours truly have the right not to work with Spotify. I'm not going to engage in, is cancel culture bullshit, or piling on, or...

• 54:28Scott Galloway?

  I think comedians get a lot, get a very wide berth around societal issues, whatever you want to call it. I think around health issues, we all have a responsibility in a pandemic to really keep our shit tight and fact check. What I have also learned, one, that if you are inconsistent, no one has moral clarity. I advertise on Facebook, I have advertised on Google, they are much worse about this topic than Spotify. And initially, I thought, I'm not going to pull my stuff off of Spotify because I knew I would get criticism for advertising on Facebook. That is entirely fair, that criticism. I also believe, I also believe that it's almost impossible to live a life of moral clarity in a capitalist society, because you need to make a living, you need to provide

• 55:10Scott Galloway?

  economic security for you and your family, and you're going to find that the moment you erect a glass house, stones are going to start flying. But that shouldn't exonerate you, or shouldn't make you less willing to try and do the right thing across every individual situation when you can do the right thing. The other thing I've discovered, and this is a good thing, is what I would refer to as off-the-mat in yoga. They talk about how if you spend 90 minutes focusing on balance, and being mindful and in the moment, and doing exercise, that your behavior off-the-mat gets better. You start eating better, you start trying to be kinder. And what I have found is since deciding to pull my content or prof G from Spotify, my off-the-mat behavior is getting better. I've reached out to the CEO of Section 4 and asked, what would happen to our business

• 55:52Scott Galloway?

  plan if we decided to stop advertising on Instagram or Facebook? What would it mean for our plan? And even if it took our revenue down, should we think about it? I am seriously considering, and I'm not advertising on YouTube at the moment, but stopping advertising there. So let me finish where I started. I really appreciate people reaching out. The comments have been really thoughtful, really civil, and people took a lot of time, and it's almost as if you're hearing from a friend who cares about you. They have been constructive, and quite frankly, moving that people would take that amount of time to try and... They generally think they're trying to help me, and I appreciate that. Also, I think we should all think about being brave. Even if you don't live a life that is a ball that is perfectly round and rolls perfectly

• 56:34Scott Galloway?

  across the surface, that doesn't exonerate us from trying to do the right thing across every individual situation. And also, when you take a stand, there is an added benefit, and that is your behavior off-the-mat improves.

• 56:47Scott 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 next week on Monday and Thursday. And one quick reminder before we sign off, we answer your questions about business trends, big tech, career pivots, and whatever else is on your mind every Monday on the pod. To submit a question, please visit officehours.profgmedia.com. Again, that's officehours.profgmedia.com to submit a question.

• 57:16Speaker 04

  We just moved into our new house and I didn't realize just how close we were to the neighbors. That's when my friend told me about blinds.com. Blinds.com isn't a medication, but it can improve how you feel about your home. Customers who shop at blinds.com experience excellent customer service from consultation to installation. Side effects include increased privacy and better sleep. Talk to your partner today and see if blinds.com is right for you. Visit blinds.com to order your free samples.

• 57:46Speaker 05

  When you shop pickup at Kroger, you can expect the savings you love and fresh groceries selected just for you. Our associates are committed to getting every detail right, carefully handpicking your items, checking for quality and freshness, and packing your order with care. Because bringing you fresh, quality groceries is what we do best. And right now, enjoy $20 off your first online order of $75 or more. Restrictions apply. See site for details. Kroger, fresh for everyone.