The Prof G Pod with Scott Galloway
The Reddit Hotline Is Open: Scott on Generational Wealth, Dirty Jokes & A Bull Case for Reddit
Wed, 26 Mar 2025
Scott weighs in on the school choice debate and whether vouchers could make private education more accessible. Then, he breaks down Reddit’s stock struggles—and why he still sees it as a strong long-term investment. Plus, we’re introducing something new: The Reddit Hotline, where we pull questions straight from Reddit. Scott answers listener questions on generational wealth, exclusivity in business, and where he draws the line with his dirty jokes. Want to be featured in a future episode? Send a voice recording to officehours@profgmedia.com, or drop your question in the r/ScottGalloway subreddit. Learn more about your ad choices. Visit podcastchoices.com/adchoices
Chapter 1: What is the introduction to the Reddit Hotline?
Welcome to Office Hours with Prof G. This is the part of the show where we answer questions about business, big tech, entrepreneurship, and whatever else is on your mind. Today, we've got two great listener questions lined up. And then after the break, we're introducing something new. The Reddit hotline. Oh, my God. It's not the red phone. It's not the bad phone.
It's the Reddit hotline where we pull questions straight from Reddit. If you'd like to submit a question for next time. You can send a voice recording to officehoursofpropertymedia.com. Again, that's officehoursofpropertymedia.com. Or if you prefer to ask on Reddit, post your question on the Scott Galloway subreddit. That's scary. Which shit must be flying around on that thing.
And we just might feature it in our next episode. By the way, just a little bit of insight. Let's bring this back to me. So we did in South by Southwest, we did a party or Vox did a party, which is basically where they feature all their quote unquote talent or lack thereof, the podcasters to try and get advertisers to advertise more on our podcast. And they let out some information.
Basically, Vox, like every other organization, holds onto information like nuclear codes because an asymmetry of information creates advantage for the people who have the information. But they did let out the following, that one of our, or our fastest growing segment of anything I do across this entire, let's be honest, I'm a total podcast tour. I'm like, hey, hey, stranger, what's your name?
Another podcast? Sure, why not? But the pod that's doing or growing the fastest is actually Office Hours. And Office Hours, the vision for Office Hours was when my mom and I, I moved in with my mom for about eight months when she was very sick. And one of the things we used to do was we would watch her favorite show, Frasier, and I based Office Hours on the Colin show on Frasier. Anyways, welcome.
Hi, this is Dr. Crane, and I'm listening.
First question.
Hi, Prof G. This is Brian from New Jersey, and I want to say thanks for doing such a great job offering an analysis on a wide range of topics and your genuine concern for people despite party politics. I'm involved with a small, successful school adjacent to New York City that exists solely on tuition.
Last week, I heard you talking with Jess Tarlov about school choice, but the reality is not everyone who sends their children to a private school are doing so from a place of excess. The public schools in our area are overcrowded and parents have little to no say about what their children are learning or experiencing.
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Chapter 2: How does Scott Galloway view school choice and vouchers?
The problem is I think it results in a lot of obesity, anxiety, young people without the skills to thrive in this economy that don't have a lot of economic power and probably, I don't want to say get exploited, but leverage for minimum wage that should be $23 an hour, not $7.25 based on productivity or just inflation. So
I feel as if the public school system is yet another example of not a direct conspiracy, but the accidental conspiracy of creating the bottom 90% who become very cheap inputs for shareholders of bigger companies that know how to manage the information economy and end up, quite frankly, just being exploited and paying
a lot of money for shitty sugary food and then becoming obese and then being handed over to the diabetes industrial complex. So I don't, part of that system though is I think that when I look at healthy societies where there's low childhood obesity, they have a private school option, but essentially there's just much more focus on the resources and measurements for good public schools.
On average, American public school teachers make roughly $70,000 annually, while their private counterparts make about $50,000. So you're absolutely right. It appears that on average, public schools are paying people 40% more. Because quite frankly, you end up with probably a more difficult situation with a lot of low-income kids that probably bring a lot of anger.
Maybe a single-parent home where the parents can't be involved in the kid's life. whatever the excuse is, but public school teachers, the market is saying we need to pay them more and private schools don't have to pay as much. Despite this, private school students consistently score better on assessments in almost every subject and some,
Teachers' increased wages don't necessarily correlate with better outcomes. Why? Because the public school system is riddled with bureaucracy, quite frankly. And I think this kind of buttresses your point. In America, there are four times as many administrators in the public education system than there were in the 1950s.
In 2015, the New York State School Board Association found that firing an incompetent teacher takes an average of 830 days and costs $313,000. The good news? School choice bills or laws that allow states to award vouchers to the parents of students in non-public schools are on the rise. This is true even across party lines.
A 2024 poll of registered voters found that 83% of Republicans, 69% of Independents, and 70% of Democrats say they strongly or somewhat support school choice. I am really torn on this because what I have seen is the net effect of school choice or vouchers just subsidizes wealthy people who were going to send their kids to public or to private schools anyways.
And this is Pulse Marketing, but my kids were at this lovely private school in Gulfstream, Florida called Gulfstream that costs 18 or 20 grand. And the idea that we were going to give people in the local community, we'd get $10,000 towards a school. I think all that would have done was of the 230 families, 200 of them would have just got a $2 million tax break.
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Chapter 3: What are the challenges of the public school system according to Scott?
And Reddit at that time was toggling based on the metric you looked at somewhere between the third and the fifth most trafficked site in America and was going public in a market cap of $5 billion. Because to that point, they had not done a great job of monetizing that incredible attention. However, I believe over time, you can monetize attention. It just depends.
I remember looking at these charts 20 years ago, where newspapers were 10% of attention, but 30% of advertising, and the internet was 50% of attention, but only 15% advertising. I remember, okay, this is pretty easy. Find the internet companies that are commanding attention, and eventually these things are gonna calibrate and equalize. And I saw the same thing here.
And the stock went out at, was priced, I think, at 35 or 38, shot to 60, and then went as high as 240, and has now been cut in half with a drawdown. So as we're recording this, their stock has been cut in half in the past month after Q4 earnings that reported underwhelming user growth, but that's still up. I think that still means it's tripled or quadrupled since its IPO.
Global daily active unique users rose 39% year on year to an average of 102 million, just missing analyst expectations of 103 million. Why did it get hit so hard? The new meeting expectations in the internet economy is blowing them away. That's the expectation. The expectation is that you're going to blow away expectations.
Although Reddit was now or is now the six most visited website in the world, it's worth 50 to 60 times less than other sites that command that same attention, including Google, YouTube, Facebook, and Instagram. So what do I think? I think this company is still a good long-term hold. It's got a market cap
now of $22 billion, which for a guy like me, one of my many flaws as investors, I anchor off the cheapest it's ever been. Yeah, it went public at a valuation of $5 billion. It traded to $7 or $8 billion that day, and now it's at $21. But it peaked at $40. It's come down. I think Reddit is a good long-term hold.
I just think, again, if you buy into this notion that eventually monetization catches up with attention, I think it's a good long-term hold. Having said that, my general advice is the following. low-cost index funds, because nobody can pick stocks over the long term and outperform the market.
Even Warren Buffett will tell you that they were investing in an unusual time with a lack of information and the asymmetry of information or your ability to find alpha or stocks that were undervalued was much greater, the likelihood of doing that than it is now. Warren Buffett, who is arguably the best investor in history, is telling people not to be stock pickers. So having said that,
I believe that you can take 30% or should take 30% of your money and have some fun and invest in single stocks or single asset classes where you think you have some sort of insight or you believe that they're undervalued. And this might be that. What I would also suggest, though, is that two-thirds plus of your net worth is put in low-cost index funds. And here's a bit of the wrinkle there.
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Chapter 4: What is Scott's analysis on Reddit's stock and future potential?
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We asked and read it delivered. Let's bust right into it. All right. Armand8194 asks, Scott, something used to preach as exclusivity as a great marketing tactic. No is the sexiest word in the English language. I always say that. But recently you've been releasing more and more podcast content. Can you reconcile the two? Yeah, so it's a fair point, and I worry about this a lot.
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Chapter 5: Why does Scott recommend low-cost index funds over stock picking?
And then I see my 14-year-old playing with his flat seat and I see a seven-year-old woman roll by, I'm going to coach and I think this is just wrong. And I say to my partner, the kid should not be in business. And she says, well, fine, if you want to fly with coach and coach with them have added because they don't allow kids alone back in coach. So the reality is my kids know they have money.
The good news is that I find a kid's approach to money or anything else is that the parents have less impact than you think. And that is as parents, we like to think we're engineers, we're not, we're shepherds. And that is we get to choose the land they graze on, point them in the right direction, decide what they eat. But the sheep comes to you. And what I have found is one of my sons
He won't even let me buy stuff for him. I'll take him out and I'll say, hey, we went to Sunspiel, this great kind of British brand that's supposed to be the casual brand for James Bond. And I wanted to buy him a cashmere hoodie and it was 230 pounds. He's like, I'm not buying this. I'm like, no, you're not buying it. I am. He's like, no, no, no, I'm not going to spend this kind of money on it.
He just is physically uncomfortable with spending money. And I don't know where he got that because even when I didn't have money, I was very comfortable spending money. I was... You know, I haven't had a spending problem, but I've always been, I like to thank someone who enjoys life and is not afraid to spend money. Whereas my other son is like, will pop up and go, can I have two then?
So, and we just haven't treated them that much differently. I think about this a lot. I'm going to put some money aside so they can have, always have access to housing, always have access to education. But my plan is to spend it all before I go. My approach to spending is pretty promiscuous. I spend a lot of money. Every year I meet with my team at Goldman, I look at how much money I made.
I already have my number and any additional money above that in terms of net worth, I either spend it or I give it away because I want to make sure my kids have some advantage, housing, access to education, but I don't believe in dynastic wealth. I know a lot of rich kids. I wouldn't say they're any more fucked up than other kids, but they're no less fucked up than other kids.
So I don't think you're really giving much advantage to your kids with extraordinary wealth. Is it a competitive environment? Do you want them to have some of the opportunities that you've worked so hard to give them? Yeah, I want my kid to be able to live where he wants to live, to pick the career he wants to pick, which is obviously an extraordinary advantage.
But just being blunt, I'm going to offer that to my children. I think you use money... with your kids to lever up or lever down. If one of my kids decides to teach public school, I'm going to probably give him a decent amount of money. If one is doing nothing and kind of just a ne'er do well, or, you know, I'm not going to give that kid any money.
So I think you have some control over it, not a lot, but it is something I think about all the time. And my approach, My way of expressing concern about this problem is I am spending money like a fucking gangster in the 50s just diagnosed with ass cancer.
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