Scott Galloway & Matthew Prince Fireside Chat

Professor Galloway, it's so great for you to join us here on on Cloudflare TV. This is Cloudflare's 10th anniversary and you know really wanted to talk about what you've seen over the last 10 years and and you know I really I've always appreciated the predictions that you have for the future but you know I wanted to start with something I think you're in Florida now which is obviously a sort of hotly contested battleground state. Last night was the first U.S. presidential debate of 2020. Did you did you watch it? Yeah I would say I endured it more than I watched it. I mean did anyone really watch that? It was I had to actually pause it and take a break and get back to it. I thought it was did you watch it Matthew? I did although I had to I had to hide in a room because I was afraid that if I did it anywhere where my where my wife was that we might not have television anymore because she would have thrown a shoe through it. But it was it was it was it was interesting. If you were if you were advising the Biden campaign what would what would be what would be your advice for the for the next debate? I don't do it. Just say that debates are a construct that are dependent upon certain pillars and one of those pillars is a certain level of manners, respect for the decorum, a certain adherence to the truth, a certain respect for the moderator, and I would just peace out. And I would say I'm happy to do town halls where I can take aggressive questions and be pushed back on. I'm not afraid of a debate but I'm not going to get into a room with someone who has no respect for the room. I just wouldn't do it. I don't I think Biden kind of comes off the win by decision last night because he didn't he didn't win it but Trump lost it. And if you look at the poll numbers it looks as if Biden is fairly markedly ahead. So I think at this point more debates with Trump are nothing but downside for Biden. I just don't even know how you respond to that. I don't so I would say peace out. I just would refuse to do it. Is there a do you think there's a is there a brand strategy that makes sense for sort of the approach that the Trump or the Trump campaign took or is it or is the again it was that there there were times where it definitely felt like he was the strong powerful dominating force there although although again you know plenty of times also I mean just really didn't respect as you said this or the quorum of what a debate should be. So if you look at history typically the most effective tool or weapon against an oligarch or a strongman is humor because they tend to be humorless. They don't tend to be very light and fun people. And you know I'm really sad. One of the things I think the strongest voice against Donald Trump would have been Al Franken. And so I would have said that if you can try and find one liners that are humorous because I just I think that's one kind of punch that Trump can interrupt or counterpunch against. But Biden you know I think Biden has a sense of humor but I don't think he's inherently a funny guy. Barack Obama was actually a funny guy or he appreciated it and he had top comedy writers writing one liners for him. But I would have said that the key here is to remain calm let him and think of one liners and trying to rest this with humor. It's not going to out yell him. He's not going to there is no arguing over facts because the facts seem to lose all all adherence here. It's a tough one though. I don't I've been asked by people in the campaign for help which is usually is usually just sort of a thinly veiled request for money. They pretend to want to hear what you say. But my my belief has been it's about it's about humor sticking to the message and at this point piecing out because you felt three emotions last night. You felt I felt really rattled by the whole thing. I remember when we were in school and you'd see these videos of a legislative body in Asia where it would break into a fistfight or some debate in Eastern Europe and the debaters would start throwing water on each other and you think oh my gosh that would never happen here. It wasn't even and we're that that we're that now. And it really made me for the first time really just very kind of almost bereft and sad about America. The second was I was quite frankly frustrated that we didn't have a candidate on the Democratic side who could more crisply deftly cleverly respond. I think look I think I think Joe Biden has lost a step. But the third thing is I did feel a sense of relief. You know he still has step. He was still able to look into the camera. He clearly still has his faculties and this narrative that the Trump campaign has tried to put forward that he's feeble didn't really play out last night. But I just thought I mean I'm I don't know about you I'm traumatized from the thing. It literally ruined my night and I'm I can't get it out of my head today and I wonder how much of America feels traumatized by what happened last night. Well it just again regardless of which side you're supporting it was just it definitely was not it didn't it didn't feel like any there was any real substance to it. It was just it was it was just theater and bad theater. And it was it was I had the same reaction. I was I was I was depressed by it. So you've you've had a really I mean interesting career from the board of The New York Times to marketing professor consultant. I only recently realized that I spent a lot of money with your campaign as a younger version myself trying to impress women that I was dating when you ran and started Red Envelope. What is like what's been your favorite job across across all of all of those different things. Oh definitely teaching. I've always seen myself as a teacher. I'd initially planned to get a doctorate and I had a family sickness and capitated and at an MBA but I always knew and gave myself 10 years to go back to teaching after I graduated from business school. But you know if they'll have me the only thing I have business card I know I'll carry for a long time is is a teacher a professor. But teaching is my my anchor. It's it's where I get my identity. It's what I enjoy. What is it about that you that you enjoy. I just find the environment I think the pursuit of truth is regardless of the conventional wisdom regardless of who it offends as long as your heart is in the right place and you're pursuing the truth. I like that basic premise. It fits my personality well. I love the idea of the notion of a university that's placed outside of the city so we can say provocative things that might offend the sensibilities of the establishment. I think universities are fantastic environments young people trying to better themselves. And it was also transformative for me. I'm the son of a single mother who lived and died a secretary and the generosity and vision of California taxpayers and the regents in the University of California are are the reason why I'm here with you today because I got to go to UCLA and Berkeley for undergrad and graduate school for a total tuition of seven thousand dollars. So it's pretty easy to conflate luck with talent and I I don't. I recognize that my my livelihood my economic security my selection set of mates my opportunities professionally and personally have all come from the big hand of government and higher ed. So for me it's it's it's just wonderful to be back involved on the other end. And it's you've you've been in my class. Teaching is fun. It's a nice group of people looking to better themselves. It's also been good for me professionally just selfishly. It's a great platform. I'm not sure. Yesterday I was on I'm bragging now I was on CNN BBC and Yahoo. I'm not sure they give a shit what Scott Galloway thinks but they seem to they seem to be interested in what Professor Galloway thinks. So it's been it's been great for me. I enjoy it. I can see you doing it Matthew. I can see you teaching at the University of Utah or BYU or somewhere like that. It's a very rewarding way to explore your ideas and and and manicure them and feel as if you're doing something you know bigger than yourself so to speak. Yeah it's it actually it so I taught for quite a while at a law school in Chicago and and really really loved it. Kept doing it as long as I could even as we started Cloudflare and then this Cloudflare got bigger and bigger. And it's always you know people ask me what would you do after after Cloudflare and and I've always thought you know going back to teaching. It's just it's such a way to that like that especially you know in sort of the Socratic style of teaching that that I did in law school and I saw you do in your your class. I mean it's the not knowing what a student is going to say and being constantly surprised having to stay on your feet. There's there's a there's a performative aspect of it but it's also this incredibly intellectual aspect and I find it I find it really incredibly rewarding. And so you know I relate to you with that. I also am wearing a John Barbados shirt so I'm just trying to be as much like you as I possibly can. There you go. So you know at the same time you know you you this you have this sort of love of the academy but you've also been incredibly critical of it. And obviously that the fact that tuitions have gone up so much faster than inflation you know and I and and there's part of me that you know it seems like you're trying to sort of recreate your classroom outside of the traditional university and expand access to it. How how how much is that. How much do you think that that can re replicate what it is. How how much can we really create that educational experience outside of it. You know you've you've said that obviously you can go to UCLA and go to Harvard. That's an incredible experience that the president of Princeton once said that if you took the entire entering Princeton class and put them on a desert island for four years and then came back they probably would have gained as much knowledge as they did other otherwise. I'd actually argue the same is true of Pepperdine and and DeVry and that the one of the challenges especially with online education is that so much of education is not you know the great person speaking and educating it but it's learning from your classmates and having that experience. How do we replicate that in in the future. You know that is a more cost effective and much more democratized access to these experiences. So I'll take that in two chunks. One is the kind of the role of higher ed in our society and how things have changed because I've become quite publicly critical of it. And then to how do we replicate or maintain that kind of university experience. We spill into adulthood and and and where you know ideas collide. So I think that a lot of the nobility and social good that is higher education has been starched out by self -aggrandizement and arrogance amongst faculty and administrators. I feel that we have lost the script that we no longer view ourselves as public servants but luxury brands. Every year we brag that we turned away 70 80 88 percent of our applicants which is in my mind tantamount to bragging that you turned away 9 or 10 people that showed up at a housing shelter last night. At my alma mater UCLA when I applied the acceptance rate was 60 percent and I didn't get in on the first round. And then I applied and the truth has a nice ring to it. I said you're either letting me in or I'm installing shelving the rest of my life. And they had the latitude and the bandwidth to let an unremarkable kid in. I had a 3.1 GPA but I didn't test well either. But the University of California had the the bandwidth to let people in and then give them a great education for a low amount of money. Since then tuitions are up 1400 percent and universities take pride as do their alumni in becoming luxury brands by choking supply. And Stanford has tripled the number of applications they did 20 years ago but they have increased their freshman seats by one seat because they like the idea of being Hermes. Which is fine. That's their right. But their endowment should not be taxed or should be taxed. They are not non-profits. They serve no social good. And unfortunately in the United States we like to think we're a meritocracy. We're not. We're a caste system. And the means or the agent of that casting is whether you go to college where you'll make three to four times the income of someone who doesn't attend college and specifically where you go to college. And to get into an elite university you're 77 times more likely to get into an elite university if you're from a household that's in the top 1 percent. And then we smear Vaseline over the lens and put lipstick on the cancer and Neosporin on how morally corrupt we'd become by letting in some freakishly remarkable kids from middle and lower income households. But I can mathematically prove to all of us that 99 percent of our children will not be in the top 1 percent. So slowly but surely higher ed has morphed from being the lubricant of upward mobility and this great liberator that embodied the American dream to the ultimate agent of the caste system in the United States. And I believe we have stuck our chin out. Name another product that in the last 30 or 40 years you wouldn't be able to tell if the product had changed. Walk into my class now, walk into it 20 years ago. I'm using PowerPoint instead of overheads. But other than that, same facilities, same recruiters, same methods. But it used to be 2,200 bucks. Now it's 7,000. Last night I taught 280 kids on Zoom. That's $2 million for 12 Zoom classes. That's 160 grand a class, mostly incurred in debt that delays household formation, delays marriage, delays more risk averse to start businesses, creates this economic despair and incredible pressure on young families. And we like to think that, oh, it's because we deserve it and we're noble. I can't imagine an industry where a reckoning is more overdue. The fists of stone of COVID-19 are coming from higher ed and it is vastly overdue. And I'm looking forward to it. It couldn't happen to a nicer group of people. Now as it relates to going all online and what we would miss, I think we have a tendency, and you and other firms have proven this, the fastest way to process information is binary. It's zero, one. So when we talk about online education, it naturally goes to this argument of, well, it's either the traditional college experience or it's all remote. And it's not. It's an and or it's both. I'm working with the Regency University of California right now. And I've said, look, they keep saying we can't let in more people to UCLA because we're space constrained. I'm like, well, let's be honest. Fifty percent of the cost accounting class could probably be taught asynchronously. You could flip the classroom. And if we take 50 percent of our classes and we do it elegantly with small and big tech and some of the tools that guys like you are providing, we can probably have fairly small erosion in the actual academic experience and double the capacity because the stuff you're talking about, the socialization, the opportunities for leadership, the getting your heart broken, the joining crew and pushing yourself harder than you ever have before. That stuff scales really well. The agents of socialization are incredibly innovative and they can scale really well inside a small space with very little technology. They're really good at that stuff. We have used as an excuse, the regulator, the governor, this notion of faculty and space means that Scott Galloway can only teach 160 kids in brand strategy. And I said, I'm not coming back on campus. So there's a vaccine. So they said, can we remove the cap? And I said, fine. So now I'm teaching 280 kids, but they're still charging seven thousand dollars. But what that means is there's 120 fewer kids to be spread across the rest of the marketing faculty, which means over time they should put some of those people on an ice floe or they should hold us more accountable or they should lower my compensation or they should lower tuition. That's the opportunity. The opportunity is to dramatically reduce the cost of education, dramatically increase the acceptance rate so we can start giving unremarkable kids remarkable opportunities. Education right now is all about how do we turn the top one percent into billionaires? That's bullshit. That's not our mandate. Our mandate is how do we take unremarkable kids and turn them into millionaires, which is what higher ed did for me. So we need to return to the script of the University of California and great public state systems in the 80s and 90s that wanted unremarkable kids. We need to fall back in love with the unremarkables. And I think that technology and remote are a component of scaling the amazing experience you're talking about. They will never replace it. I mean, some people just want to Cal State educates a half a million kids. Eighty eight percent are commuters. They only charge seven thousand for in-state, seventeen thousand for out of state. You know, online for them isn't much of an erosion in experience. Where did you go to school, Matthew? I went to a lot of different schools, but a small liberal arts school in Connecticut and then law school in Chicago and then business school in Boston. So does that mean you went to Harvard or using that bullshit? I went to school in Boston thing. I'm using that bullshit. Yes. OK, anyway. So when you go to Harvard, that's that's an incredible experience, right? That is you can't replicate that. And if you're fortunate to have that experience, you should absolutely do it. I would argue Harvard and all Ivy League schools that have a total enrollment, that's about the same as Ohio State and Florida State, no longer in the business of education. They're in the business of providing classes to the children of their limited partners. I don't think I don't think there are anything resembling a social service. I could argue the research is doing some good, but they're not teaching. They're not. That's not what they're there for. That's not their mission. Their luxury brands. Elizabeth Warren accused Pete Buttigieg of having a fundraiser in a wine cave. She's been teaching in a wine cave for the last three or four decades. We can't. That experience is amazing. And that if you're fortunate enough to be able to afford and have access to that experience, then for God's sakes, go to Michigan, go to Harvard, go to University of Texas at Austin, go see the Hurricanes play in Miami. I mean, that's there's not there's nothing like it. There's nothing like it. But if we want to really move back to the massive education, the massive upward mobility, we're going to have to leverage tech. We're going to have to leverage remote learning and take a lot of unremarkable kids and give them some sort of certification, give them some sort of skills so they, too, can have that on ramp to the same kind of American dream. You and I have participated in this information economy, which, quite frankly, and hopefully it'll change, has mandated that you have some level of certification. So my my question for you would be, does Cloudflare ever hire non-college grads into what I would call the the the the the altitude where they can really make a have a robust, high paying career at Cloudflare? Yeah, I think that that's one of the things that I actually really like about our team is that we've got people who've got PhDs who are sitting next to people who didn't graduate high school. And and in tech, that's actually one of the things you can really evaluate if somebody is good at that. It's a lot harder to do that as a lawyer or do that as any of these other other careers where you you have to have certifications that that come behind it. But but that, you know, especially early on when when we when we when we struggled, I think we learned that that there that talent is is equally distributed. And I actually don't know. I mean, of my direct reports, I think that I know less where less than half of them went to school because that becomes so much less of of a of a differentiator because we can measure on so many other other other factors. So that complexion and the approach you're taking is, first off, highly unusual. And second is really the key to breaking the wheel here, because we zero in on these Wall Street Journal rankings that are creating a caste system. We zero in on acceptance rates. We zero in on critics like myself who start punching from the inside. But the only way this all changes is when the most aspirational companies in the world, whether it's the World Bank, Cloudflare, Google or Zalando or, you know, ByteDance start start saying there are opportunities here and the security badge isn't a bachelor's or a master's in engineering from a top school. Until that happens, everything else I'm talking about is noise because everybody wants to be a part of the greatest of the greatest wealth creation engine in the history of mankind. And that's U.S., the U.S. corporation and U.S. corporations to this point have outsourced their H.R. to basically U.S. News and World Report and have said, OK, what's our weight class? We pay a lot. We're a prestigious industry. OK, we're going to we're venture capital or private equity. 70 percent of our partners are going to come from Harvard or Stanford Business School. All right. We're at Google. We'll expand the lens. We'll expand the perspective and we'll recruit at the top 40 business schools because there's some high EQ people from 20 to 40. Right. We get the kids at Northwestern, the kids, you know, the kids at Georgia Tech, the kids at UW Madison have good personal skills. But until we start saying not only we're going to expand the lens, but we're going to come up with some means of certifying, assessing and evaluating people beyond their college degree. All of this, all of this casting is based on two things, how wealthy your parents are and if you're fortunate enough to be freakishly remarkable from the age of 15 to 17. I mean, I see the kids that get into NYU, freshmen are either these freakishly remarkable kids who work so hard and somehow ended up with a patent or building wells by their junior year in high school. I wasn't like I don't know if you were like that. I was not like that. I was smoking dope and watching Planet of the Apes over and over. Or they have rich parents who get them tracking into the education industrial complex at a very young age and get them tracking. And to me, that's just that's just so un -American. So I think it's great that Cloudflare is doing that. I'd like to see a ranking that says what are the most prestigious companies in the world have added the most shareholder value as a function of the ratio of people who didn't go to an elite university or didn't get a degree? I think that those companies are going to change the world. Well, and so much of it also is if you just look at the research, having diversity of thought and diversity of opinion gives you so much more likelihood of coming up with what the right answer is. And so I've always been puzzled where you've got I have friends who graduated from MIT or something else and went on to start successful companies, and they just try to hire everyone that comes out of MIT. And I'm like, it's great to have one or two people from MIT, but I want to have also the diversity of experiences because it just makes it significantly more likely that you're going to come up with what the right answer is over time. So we'll see. Before I met you in person, I think John Battelle introduced us in person. But before that, I'd read your book and watched the videos you put together, and you come across as this just larger than life personality. And when you get on a topic that you care about, you really are sort of like a dog with a bone, and it's good. And I was struck when I met you with John, and actually even at the beginning of this interview, that you actually seem much more like a reserved, introverted person. Which is the real Scott Galloway? I think the answer is yes. I'm glad we're talking about my favorite topic, me. But generally speaking, my family describes me as a low -key, intense introvert. I don't enjoy being around people. I don't enjoy people much. I'd rather just be home with my family. And I'm paid to be an extrovert, and that's what I do nine to five. But when I'm not working, I don't especially enjoy other people outside of my family. And I know how terrible that sounds. I see myself growing very long nails and peeing in bottles for the rest of my life. Do you get really passionate about, like, when one of your kids doesn't put the dishes away, or shut off the light? You've got, you know, the soliloquy, which is there to present that's sort of similar to what you just presented here, or when you're on CNBC? No, I mean, I bet we play a similar role in the household. I like to be very engaged with my kids, and I'm sure you are. Oh, you don't have kids yet. Oh, my gosh. Anyways, but no, I'm basically, I'm the pushover at home. You've got, gosh, I can't wait to, I'm really interested to speak to you in five, six years after you've entered down this. But I think, would you describe yourself as the same at home as you are at work? To some extent, but not fully. I mean, we all play different roles. Where I saw the biggest difference is how I am when I teach, versus how I am, you know, in other parts of my life. One is so performative, and it's, you know, you're putting on a mask. It's like doing theater at some level, and it's a different thing. That works for a little while in company land, but at some point, you know, everyone gets sick of your shtick. And so I think I've sort of reverted, I think, much more to who I really am at work as well as at home. Although I think you have to be pretty, you know, a lot more thoughtful. Well, actually, that's probably not true. I think you probably have to be really thoughtful in both circumstances, because there's a lot of assumptions and things that you do in both of those environments. Which, you know, did you read Brian Armstrong's blog post that he wrote about the idea? It came out the other day, and it was sort of non-controversial, and then it blew up yesterday on whether or not as a CEO, you needed to be fostering conversations at work on politics and what was going on. And Brian sort of said, and Brian's a smart guy, he said, listen, we're a company, and we should focus on doing what a company does. And so discussions of politics and everything else, we should leave those at the door. That's sort of the opposite of what, you know, the bring your whole self to work and what I call like the Mark Benioff, we're going to take on causes. What's the future of the CEO? Do we all have to be experts on everything? Or is Brian right, and we're going to shift back toward really focusing on what it's like to be, you know, just focused on the mission of the business? It's an interesting question. I think it's situational, and what I find is it's generational. I was raised where you don't talk about that stuff at work. The way you would respect a variance of views is that you don't bring it up, because naturally, when you're the CEO, whatever view you consciously or unconsciously put forward, other people have an incentive to agree with you or feel some pressure to agree with you. And it's an easy way to alienate people. And unfortunately, we've moved to this vibe in our country where we have trouble, and this is a mistake I made until I was an older man, separating the person from the ideology. And I'm a progressive person. And I generally found that when I found someone was very, very conservative, that I didn't want to have a relationship with them, that I immediately kind of wrote them off and didn't want to interact or establish any sort of friendship. And, you know, you're shutting off 47 or 48% of America when you think that way, whatever side you're on. So I think people are having a tough time. What I've been so shocked at, and I don't know if you've seen this at Cloudflare, but the companies I'm in, people under the age of 30 or 35, there is no avoiding politics for them. They see some of the things happening, especially Black Lives Matter, as being so important and so core to who they are. And so they demand that the company take a stand. This sort of silence is violence. And it's a weird time. You know, for the last four centuries, you and I as straight white guys walked into a room and we were right. And for the first time in 400 years, when we walk into a room, we're wrong. And I mean, the first reaction is, well, it's about time. But it's a precarious place, I find, in Crimea River. But if you try, I'm having a difficult time walking the tightrope. I'm very interested in politics. I think of myself as a progressive. I'm comfortable bringing that stuff into work and talking about it. But I find that generally speaking, that the younger people sort of look at me and say, you're doing it wrong. You're helping wrong. And I get in, I've really stepped in it a couple times. But I find almost there's no avoiding it. So the answer is, and I'll put it back to you, is I don't know. I'm not a, by no means am I a role model. I have a unique ability to say the wrong thing at the wrong time and offend people. My saving grace is I tend to offend everybody. So no one cohort gets more upset than the other. But I don't know if we'll end up going back in a few years to a general level of the way it was before, where we decide that the way we respect each other's viewpoints is to say, this is an organization that is here to create shareholder and stakeholder value, and that the downside of expressing your political views are sometimes just not worth it, and we should keep that stuff out of work. And I hate these virtual walkouts that companies do. I think that's what Cesar Chavez would do if he was a bitch. I can't stand that stuff. But anyways, how do you manage that balance? Well, thankfully, we've got 13 seconds left, so I can't answer it. But I do think that there is a, there's certainly a lack of leadership that we're seeing in a top -level society. And so I think that puts a lot more of it on people like you and people like me. Thanks, Scott.