Don't Chase Your Passion, Do This Instead | Scott Galloway

Key Takeaways

And one of the things you said is don't follow your passion. People who are already rich tell you to follow your passion. You should follow your talent. Can you unpack that? Can you explain what you mean? >> I wanted to be an athlete. That was my passion. And then I going to UCLA was a blessing because I figured out pretty quickly that I wasn't in the 0.1% you need to be in to make your living as an athlete. And there's a fair there's some pretty basic axioms that should guide your career choices around where you invest your most precious capital and that is your time, your human capital. The first is the sexier the business, the lower return on investment. You want to be in fashion, the arts, movies, modeling, sports, unless you get really, you know, incandescent green lights from a very early age that you're going to be in the 0.1%. try and make a living somewhere else and then do that on the weekends and that is if you uh the SAG after the most talented actors in the world it's hard to get a SAG after union card you have to actually be in something these are the most talented actors in the world 182,000 of them 87% of them don't qualify for health insurance because they don't make more than $23,000 in a given year so the key is finding not finding your your passion but finding your talent and and committing to developing mastery. And if you can develop mastery in anything that has a 90 plus% employment rate, which 98% of sectors enjoy, the economic accutrants, the camaraderie, the prestige, the relevance, just the sheer joy of mastery will make you passionate about whatever it is. And I'm passionate about taking care of my kids. I'm passionate about being able to step in and help my aging father. I'm passionate about. I'd rather be Raphael Nadal or Federer, but kind of I'd rather be me than the number three or number four tennis player in the world because I have financial security. I get to go to Wimbledon on my own terms and not be as nervous and not throw up or before a match. So, yeah, I'd rather be Nadal, but pretty much anyone else playing tennis, I'd rather be. And I got there with boring companies. So the the the less sexy a business, the higher the return on investment. So I would suggest that we stop, you know, think about, well, what could I be good at? I think that's what your 20s are for, workshopping stuff and and also getting it wrong. I started in investment banking and I was terrible at it. I didn't like them, they didn't like me, and I had to go back to business school and just start workshopping where could I be great? Where what industry could I be great in? So don't, you know, find what you're good at and then get great at it and then be a DJ on the weekends. >> The book from my understanding is that it's basically talks about the people who have money and the people who don't and what are the commonalities between the winners and the losers. And you have I've read this for years. There was this awesome Fast Company article about you and I've seen you say this in videos where you were shockingly calculating when starting your last company L2. I think you said something like uh Deote did a study. They did a study that shows what's the difference between the people who sell their companies for five to 10 times revenue versus those who just sell it for one or two times. And you had these like four or five things and it was uh they own a niche, they have recurring revenue, tech is at their core, and that they're international. And then finally, they have defensive IP. And then you went on and said how like in your 40s when you were starting L2, 40s and 50s, you were like only focused on money. You said, "I worked my ass off. I was there at the office at 2 am. You said, "Uh, but I don't regret it." You said it was totally worth it. And when you were starting L2, I don't really know too much about that industry or that business other than a handful of articles. Were you that calculating with working backwards from an exit? And by the way, the story ends with you selling it for $120 million. >> 160 boss. Jesus. Get your facts right. And by the way, I'm number one on Amazon today. I don't know if I told you that. Um, yeah. I I I didn't have a lot of money and for me work was about getting economic security. I was very focused on money and I'm not saying that's the right way. It was just my way and I had done a lot of analysis and the study you're referring to said okay there are companies that sell in any industry they you know the lowest 10 percentile the upper decile of the valuations they get taken out at. And this study looked at the common features of the companies that got sold in the top desile and it was all the things you talked about and that's literally how I shaped the business model. I opened a London office right away. I instead of charging consulting fees I said pay me a quarter of a million bucks a year and I'll answer your toughest questions using data. Um we focused on luxury and then consumer brands. We broaden our niche a little bit. We spent I raised $17 million to create a series of technology and scraping tools such that I could collect more data points than anyone in the world such that when the inevitable guy from the analytics department came in with his arms crossed to play gotcha um they just couldn't argue with our data. We just collected more data than anyone in the world on these issues and tried to distill it down to something actionable. So I was very focused on exit and we sold for eight times revenue. So yeah, my basic pitch to people was you're going to work your ass off and I'm going to try and get you to, you know, e I'm going to try and get you to where your parents were 20 years earlier. And if you're looking for balance, this isn't that place. Um, if you're really into management or other things, tell me and I'll I'll I will try and like shape a a role around what's important to you. But we are a small business going allin to try and create economic security for us and our families. With Prop 2 Media, we're about 14 people now. I purposely didn't take outside capital. I'm not on that hamster wheel again. I'm not trying to jones for an exit. I'm trying to build something interesting that has relevance that has a little bit more impact on the social issues we think about and also pay our people really well. I used to pay people below market and give them equity and I was throwing nickels around like there were manhole covers because I wanted to have a profitable company I could sell. Now my priorities have changed and the people who join the company I tell them this isn't the kind of company that gets sold but what I'll do is I'll share I'll give you equity or participation in my book deals. You know you are a junior analyst you get one or two% of any book deal I get. You get you know try and create some economic upside for them. My natural starting point is that people come to work to develop economic security for them and their families to increase their currency, their currency in the marketplace experience and also to develop relationships. The workplace is a great place to meet friends, mentors, additional, you know, co-founders and we spend a lot of money on we saved with co we gave up our office. We save about $800 or $900,000 a year on an office cuz of course as a narcissist I had to have this amazing office in Soho which is stupid. And I have this rule at work or not this rule about this benefit. If any four of them are together they get my credit card. They can go to Broadway or they can go to Tulum and they've done those things without asking my permission. As long as there's four of them they got my credit card. And the number one source of retention I think the key to building a small business is retention. Because if you find good people, you just don't want them to be with you a year two years and go to Google because the switching costs are enormous. And if you find someone good, your job as an entrepreneur or the CEO is just to create an environment where they want to stick. Retention of employees, in my opinion, is just huge. And I find or I read a study, another study on this and it said the number one source of retention or the number one lever for retention, people think it's compensation. People think it's culture. It's whether or not that person has a friend at work. If they have a friend at work, they look forward to going to work and they are less likely to leave. And so what I try and do, everybody interviews everybody when we hire people, but these kids, it's really inspiring. They'll go like six of them will go on vacation together. They'll say, "Scott, you're speaking in Hamburg, Germany. All six of us are going to come." And and they have a great time together. They like each other. And it's really it's a powerful kind of business weapon, if you will. Now, I don't think you can do that where as a company scales beyond 50, 100 people. Um, but I found for a small business, it's really powerful. >> And is the trick there that you don't try to be their friend? Cuz I've had that problem before where I'm I wanted to be the friend and that made the management a little bit messy. Uh, and I realized it's it is much better for me to not be the friend and not be included in in the the hangs. Uh, the whole company functions better. Even though even personally, I was like, "Oh man, they're all going out without me." But actually, it was far better that it went that way. >> I always had a healthy sense of what the the border was. Me, me and my kind of my president of my committee and the uh partner at L2, we're both about the same age. And we have the same view. We have parties all the time. We show up early. As soon as [ __ ] starts getting a little like crazy, we leave. >> Yeah. >> We a We don't need to see them see them drunk. They don't they definitely don't need to see me drunk. And my attitude is what you're interesting or what you're saying, Sean, is really interesting. And that is I'm just coming to the realization as a dad, um, I'm not their friend. I'm their dad because it was really upsetting to me that my kids didn't kind of I don't want to say they don't want to be my friend, but I just naturally assumed that my kids would adore me and be really into World War II history and CrossFit because that's what dad is into. And guess what? They're not. And what I realize is I'm not I'm not their friend. I'm there to be their dad. And it's kind of the same way. I think I work with such young people. I think the you know the average age is probably 30 or 34 cuz I'm there. But the mean or the median is like 25. It's basically a bunch of kids, overeducated, super ambitious kids. And it's easy. They're doing dinner and drink somewhere. I show up for dinner. I leave before dessert. And then they can, you know, they can enjoy each other without thinking they're being judged by by Scott. Uh, so yeah, I don't I don't I don't um I draw sharp relief between um you know, work and fun with those guys. I I love it. I go out with them, but I go out for the first couple hours and I then I disappear so they can they can have their own fun. >> I love the uh if four of you together, you get my card. That's an amazing little tidbit. Uh I'm I'm here to collect little lessons learned from you today and that's uh that's one immediate one for me. >> Thanks man.