Scott Galloway 2

Supported by Greenhaven Road Capital, finding value off the beaten path.

Scott Galloway was on the FT Alphachat podcast and talked Amazon, CPG, Amazon, Apple, Whole Foods (Amazon).

Galloway has this advice for companies:

1/ Nail the boring stuff. “It’s the boring stuff that’s creating shareholder value.”  Things like capital allocation and supply chain management matter more and more. Don’t think boring stuff matters? We do, and so does Royce Yudkoff and Brent Beshore.

2/ Open stores. Well done these are excellent investments. “Stores are where you go consummate the relationship,” said Galloway. Apple’s path may be one to follow, told wonderfully in The One Device by Brian Merchant.

3/ Staff those stores with great people. “Customers no longer go to stores for the product, they go for people.” Good organizations create decentralized systems that empower employees to solve customer problems. Pete Carroll said this applies to football, Phil Knight wrote this about Nike, and Ben Rich wrote it about Skunk Works.  Good companies will also train their staff to listen – which is sometimes all you need to do in a negotiation.

4/ If you have a media brand make sure that at least half your revenue comes from subscriptions. Less than that said Galloway, and you’re in trouble. Tren Griffin explained how this might work for the streaming audio services:

“How can the SSP music streamers become more like Sirius XM? First and foremost, they must start working to improve each of the unit economics variables and become more like Sirius. These variables discussed below are all important, but nothing is more important for the SSP music streamers than improving gross margin (#2). Without a gross margin fix, nothing else matters.”

5/ Have a great product. “People come to me and I tell them, ‘build a better mousetrap and the brand will take care of itself.'” People used to wrap things up in “shiny paper” but now it takes a great product. Ryan Holiday has said this is his best marketing advice too. In the Griffin post he wrote, “The best way to retain customers is always to have a fantastic product.” It’s what the Instagram team did.

 

6/ Be an excellent tracker. Galloway said:

“We’ve voted with our pocketbooks and said that as long as there is a coupon at the end of it or the offer is more relevant–violate my privacy…You confide more in Google than your priest or any friend.”

7/ Watch out for Amazon. “I’ve never seen a company execute so well.” In addition the cheap capital, Galloway thinks Alexa is “a game-changer.” The question CPG companies need to answer is; ‘In what ways are we better than Amazon?’

In his interview about Harry’s, Andy Katz-Mayfield talked about this. He’s away that Harry’s has to be different from Amazon and Dollar Shave Club. Easier said than done.

Warren Buffett said at the 2016 Berkshire Hathaway meeting, “We don’t look at something like that (Amazon.com) and try to beat them at their own game. They’re better than we are at that, and we aren’t going to try to out Bezos Bezos.”

Charlie Munger said about this in general, “Figure where you have an edge—and stay there…If you play games where other people have the aptitudes and you don’t, you are going to lose. And that is as close to certain as any prediction that you can make. You have to figure out where you have got an edge. And you have got to play within your own circle of competence.”

 

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