The Prof G Pod with Scott Galloway
00:17:05 · Scott Galloway, S3
[00:17:05] S1: Yeah. That's right. It's... I I think as a dad, and we're getting into other areas where you just wanna help your kids become more like themselves, whatever that means. Alright. We'll be right back after a quick break. Ad[00:17:21] S3: This episode is brought to you by Google Chrome. You think you know a browser, but Gemini Chrome? That's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50 page restoration block or finally break down that long article you've had open for weeks. Gemini in Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses, setup required, compatibility, and availability varies 18 plus. [00:17:49] S1: Welcome back. Question number three comes from it's Christian Rees on Instagram. How do you build a meaningful product and service in an industry dominated by incumbents? Thoughts?
00:18:01 · David Senra
[00:18:01] S2: Okay. So one of my all time favorite. Maybe if I if I could only recommend one book. Okay. Say somebody's only... So they're only gonna take time to read one biography or autobiography of of an entrepreneur. I would recommend James Dyson's first autobiography. It's called Against the Odds. He was like... His late forties when he wrote it. He wrote another one in his seventies. They're both great, but the first one is excellent because it comes right after fifteen years of struggle. 5,127 prototypes James built before he built the first Dyson cyclonic vacuum that, you know, he owned, controlled, and it was up to his standards. And, you know, people owned vacuum cleaners for a lot longer. There was huge companies. There was companies he was competing against that were making, 500,000,000 a year just in Europe just selling vacuum bags, much less the vacuum cleaner. So his essentially, you know, mantra that he would repeat over and over again is like different difference for the sake of it. And so his point is like, well, if you're gonna walk into a store, right, why... I'm I'm the sixth vacuum cleaner you might see. You see the Hoover. You see all these other ones. They all look the same. They kind of function the same. So his point is like, he really liked attacking markets that he didn't have to create. So there's already existing products. People understand the value of it. They're already making the purchase. So his whole point is, like, the only way to succeed in an existing market where it's full of incumbents like this question is directed at was by being different. And so, obviously, not having a bag. It was the very first vacuum cleaner ever not to have a bag. So that was an invention. It was patentable. It was very valuable to the empire. The... He still owns 100% of Dyson to this day. And the rumor is, you know, he's been paying himself a couple billion dollars a year in dividends for a long time. And then... So he... The function of the machine was different, but then he also purposely made it look different. So you walk in, you you see six other... Or five other vacuum cleaners. She sees six one. It's clear. It's yellow or it's purple. So, like, the other ones don't have any color, so he made a different color. He made it clear because then you test the vacuum cleaner on the store.
00:19:55 · David Senra
This is when he first launched, and you could see the result, which is your... You... The dirt comes into the canister. So the dirt is hidden in in his competitors. Now I say, oh, I know it's working because I... Look at all this dirt that's coming in. It's in this canister. So I think he has the the the best framework for this. It's like you have to... There's no point in an existing market to just be the tenth or twelfth or fourteenth player. You know? All the profits, all the revenue, you know, power laws rule everything around us. It's gonna be dominated by the by the first, the second, or the third best company. So you don't... And he even says like, you don't even have to be better. His his happened to be different and better, but you can build a business just by being different. So that would... I think that's the way that he would answer that question.
00:20:39 · Scott Galloway
[00:20:39] S1: Yeah. I think that so total addressable market competitive dynamics. To a certain extent, think those are questions better left to capital and VCs. I think as an entrepreneur, your challenge is to find something you think you're really good at. And that is, you know, JCPenney's and Sears seemed dominant when Walmart was started. It didn't it didn't make a lot. It wasn't like you looked at a whiteboard and said, oh, I'm gonna open a low cost retailer that has supply chain competence in small towns that aren't being served by department stores. I think you probably decided I have these skills around this. I think as an entrepreneur, you wanna say, what am I really good at? Because even in industries that are dominated by big incumbents, the great thing about big incumbents is they have a tendency to overpay for anyone that seems like a threat. You don't have to go public and be Google. You just might wanna be a company that Google acquires. So I would more focus as an entrepreneur. I mean, if you say I want to start a search engine, you may want to check-in with some people around can you raise the kind of capital to start a search engine? But Walmart comes in, okay, retail's And then Amazon comes in, Amazon's over. No, especially retail, whether it was Lululemon or Sephora carved out incredible niches because they brought something, and like you said, the word used is differentiated. I think the challenge as an entrepreneur is what can I do that is just really different? I looked at this clothing brand called something Aces, or it's just this weird motorcycle brand, but they charge like $2,500 for a hoodie. And they charge, you know, 4,000 for a pair of jeans. And I look at this shit and I go, this makes no fucking sense for me. But these people had a vision for something entirely different. And they're obviously very good at it, and genius designers and merchants, and they built something worth tens if not hundreds of millions of dollars. So I'd be, you know, trying... An entrepreneur who's trying to assess is being led to a business based on the total addressable market in the white space, no. What are you amazing at? Like, what can you do better? What do you think you could do better than any... Are you truly artisanal and just are passionate about candle making? Do you have a vision for a different type of stationary?
00:22:57 · Scott Galloway
Do you think you understand technology and health care? So I think as an entrepreneur, let capital... And and have a series of advisers that can tell you when you're being a little bit, I wanna build nuclear submarines. Alright. Okay. Maybe that... Maybe we wanna think this through. But in general, I think the question for for employees zero one and two is, what could we do that we would do that we just... We'd be amazing at, that it would be hard for anyone to replicate? That right out of the gates, people would be really into our product because we can build something truly differentiated, as opposed to trying to pick a sector and then go into that where you just build a good product. Like what are what were you born to make, so to speak? Any closing thoughts before we move on?
00:23:44 · David Senra
[00:23:44] S2: I I agree with your point wholeheartedly. This idea is like, I'm gonna put it on a whiteboard. I'm gonna be like, oh, this is the the the TAM. Use... Sam Walton is a perfect example. Obviously, he he gave away the equity to his kids before it was valuable. But if, let's say, you know, all the wealth came from one person, which was him, if it was concentrated in one person today, it'd be it'd be like... I think the market cap was something like the family... Walton family wall to be something like $500,000,000,000. And he had one little store for... He had a... This was retail. This wasn't even discount retailing, which is what he got into with Walmart. He had one store for the first five years. He was just obsessed with retail. He actually... You you mentioned JCPenney and Sears. Sam Walton actually worked at JCPenney. He met the founder of JCPenney. He... The founder of JCPenney was a mentor of sorts for Sam Walton. And so what he learned by... He's like, hey. I really like retailing. I think I'm really, really good at retailing. And then he just stuck in that for the next fifty to sixty years, so much so that the the best opportunity of his life came twenty five years into his career, which was Walmart. He was in retail for, you know, two decades before he started his first Walmart. And I think you just nailed the... It ties to the differentiation point. It's because he's like, hey, discount retailing seems to be the future. I should get into this. What are the existing players? And at that time, Kmart was the biggest one. And so Kmart was doing these discount retailers, but they were in huge metropolises, huge cities. Sam's like, well, I don't have any money. I'm underfunded, and I don't know anything about big cities. I don't want to compete head on to to with Kmart. Why don't I try discount retailing out in these little towns of 6,000 people, of 2,000 people, of 10,000 people? And he writes in his autobiography, he goes, turns out there was way more business in these little towns than we could have ever predicted. So much of this stuff is not predictable. You can't sketch it out into a formula, you know, on day one. You just have to pick something. Think your advice is great. What do you like to do? What are you good at? And just stay in the game long enough to get lucky.