Intro
In this episode of “The Prof G Pod with Scott Galloway,” Scott discusses the business of podcasting, the pros and cons of stock buybacks, and the challenges of leaving a job to start a business. He shares insights into the podcasting industry, the profitability of podcasts, and the importance of having a strong following. Additionally, Scott delves into the concept of stock buybacks and their impact on companies. Lastly, he offers advice to an individual considering leaving their job to start their own small fund.
Main Takeaways
The Business of Podcasting
- Podcasting is a growing industry, but it’s a tough business for 99.8% of people in the field.
- There are about 4 million podcasts in the world, with ad revenue in the US just shy of $2 billion in 2020.
- The industry has very low barriers to entry, but there are no barriers to entry, so there is a lot of competition.
- To do it well, it requires some money and a team of people, with probably the top 500 podcasts being profitable.
- Having a following through other media channels can help to gain momentum and success.
- Pivot and PropG are successful podcasts with high CPMs due to their audience of high-earning executives in the media and tech worlds
- These podcasts are small businesses with teams of 4-5 people, but can become profitable quickly if successful
- Income inequality exists in podcasting, with only a small percentage of podcasts making real money
- Podcasting should be done for the right reasons, such as passion or expanding reputation, rather than solely for making money
- Podcasting can be done from anywhere with a remote kit, offering flexibility in lifestyle
The Pros and Cons of Stock Buybacks
- Stock buybacks are when a company buys back its own shares from investors, reducing the number of shares available and making each remaining share more valuable. Companies use buybacks for various reasons, including consolidating ownership.
- Share buybacks are a very efficient way of returning capital to shareholders and can be more tax-efficient than issuing dividends.
- The downside of share buybacks is that they may be prioritized over long-term growth and investment in the company, as decisions are often based on what will move the share price up.
- There is a debate on whether share buybacks should be discouraged or taxed to encourage companies to invest in the future and create new jobs.
Leaving Your Job To Start A Business
- An individual is considering leaving their comfortable job to start their own small fund
- They have investors interested in backing them and have had conversations with owners interested in selling their businesses
- They have a newborn child and their spouse is nervous about their plans
- The individual’s risk-averse Italian immigrant parents do not support their decision
- The decision should be based on having enough savings to support the family for two to three years without financial stress
- Consider going out on your own for the opportunity to be wealthy through carried interest
- A private equity firm’s success is based on assets under management (AUM)
- Find someone with a stronger contact base to help raise capital
- Being an entrepreneur is stressful and nerve-wracking, but the upside is enormous
- Have enough savings to maintain current lifestyle for 2-3 years without financial stress, and be honest with your partner about the risks and potential outcomes
Summary
The Business of Podcasting
Podcasting is a rapidly growing industry, but it is challenging to succeed in. With millions of podcasts competing for listeners, it requires dedication, investment, and a strong team to stand out. The top 500 podcasts tend to be profitable, but income inequality exists within the industry. Having a following through other media channels can provide a significant advantage, and podcasting offers the flexibility to work remotely.
The Pros and Cons of Stock Buybacks
Stock buybacks, where a company repurchases its own shares, can be a beneficial strategy for consolidating ownership and returning capital to shareholders. However, they may come at the expense of long-term growth and investment in the company. The debate surrounding share buybacks centers on whether they should be discouraged or taxed to encourage companies to prioritize future investments and job creation.
Leaving Your Job To Start A Business
Deciding to leave a comfortable job to start a business requires careful consideration. Factors such as financial stability, investor interest, and personal support play crucial roles. It is essential to have enough savings to sustain the family’s lifestyle for a few years and be transparent with your partner about the risks involved. While entrepreneurship can be stressful, the potential rewards, such as wealth through carried interest, make it an attractive venture.
Conclusion
The podcasting industry offers immense opportunities for those passionate about sharing their knowledge and expanding their reputation. However, it requires dedication, investment, and a unique approach to stand out in a highly competitive market. When it comes to stock buybacks, striking a balance between returning capital to shareholders and investing in future growth is crucial. Lastly, leaving a job to start a business involves careful planning, financial stability, and open communication with loved ones. The potential rewards are significant, but success is not guaranteed.
