Matt Britton Live At Social Media Strategies Summit - NYC- 10/19/17 (tech generation) (keynote)

Did I just hear Rihanna's here, by the way? I heard Rihanna's here. I got really excited for a second. Are there any millennials in the audience? Get those millennial hands up. So it used to be when I spoke at a conference and there were millennials in the audience, I'd be like, holy shit, you're really young. But actually, it's not even really the case anymore. In fact, the youngest millennials are actually 21 years old, so they're kind of aging out. So the millennials as the new hot, young, disruptive generation, aren't really the people who we once thought they were. But millennials, without a question, are the most important generation in history. And I often get asked why. Because brands are obsessed with millennials, the media is obsessed with millennials, et cetera. And my simple answer is millennials were the first generation that grew up with the Internet in the household. Think about that for a second. So I just missed the millennial generation, although I certainly act like a millennial. But when you grew up with the Internet in the household, the access to information, the intuitive understanding of technology, the, the ability to communicate in real time, im speak to friends late at night, that makes your brain wired completely differently than the rest of us. The way that you think about things, the way you look at a car and you say, I should be able to hit a button and actually get this car. And what's really fascinating to me, having worked with half the Fortune 500 over the last 15 to 20 years, is that the C Suite is not yet filled with millennials. The C suite is filled with boomers, Gen Xers who did not grow up with the Internet in the household. For them, they don't understand things that way, which is why so many brands still are in a broadcast model, which is why so many brands don't really understand the nature of data driven marketing or communicating with consumers on a one to one basis. And the one thing that gets me most upset about big brands is they talk about the Mark Zuckerbergs and Evan Spiegels as sort of the gods of this world and the future innovators. But the 20 and 30 somethings in their organization are buried seven floors below them and never actually have a voice. Most large Fortune 500 companies have boards full of old white men. And I love old white men. My dad is an old white man. But there's plenty of room in a diverse world for more voices coming out. And it's those companies that are disrupted. It's those companies that are looking the wrong direction. While some new upstart actually takes away their business. So one thing I implore on large organizations is create a shadow board. Find five to seven young people in your organization, and actually make your board of directors report to them. Why aren't we evolving quickly enough? Why doesn't our mobile interface work right? Because these people who did not grow up in the household, do you just think everything is fine? Because it's the way it's always been and it's really hard to change, you know, existing mindsets. So it's just one thing that I kind of find frustrating over and over again with companies, and they wonder why they're. Why their companies aren't growing. They wonder why they're getting disrupted. So it's super interesting to me. So as the millennials are getting older and it's kind of time to start to look at the legacy of the millennial generation. Because 10, 20, 30 years from now, we're going to look back at the millennial and say they were actually the ones that really changed the world. They were the ones that grew up with the Internet in the household. They are the ones that created the Googles and the Facebooks and these incredible companies of our time. And then looking back of the legacy of the millennial generation, there's certain things that will stand out, and those things that will stand out will last. And they will certainly be a big hallmark of Gen Z. I often get asked about Gen Z, this next generation, how they can be different from Gen Y. And I just think it's going to be more Gen Y ness, more mobile, more faster, more data. But it's going to be nowhere near the same break as Gen X to Gen Y. So when you think about Gen Z and you look at their future, the world that they're going into, it's going to be completely different. The class of 2025 are kids that are about 10 years old right now. They're going to be graduating college in 2025. And actually, when you think about the that and you're like, wow, high school, rather. And when you think about the world that they're going to be heading into and the world that people who are graduating college are going to be heading into, it's going to be a much different world, and it's going to be a much different world because of those millennial legacies. So what I'm going to talk about today is the world according to the class of 2025. Now, I'm not going to talk about flying cars and all this jets and shit. Right. It's going to be stuff that actually is real. Some change is happening more quickly than we think is going to happen. And I'm going to talk about that. Some. Some is further out, like the VR stuff that I think a lot of brands kind of prematurely jump into. I don't think is going to happen as quickly, but there are some things that are going to happen much quickly because, make no mistake about it, the rate of change is accelerating faster and faster and faster. Some of the things I'm going to tell you today, you're going to say you're crazy. But then if I told you eight, nine, ten years ago that you'd be able to talk on your phone in high def to somebody in Ghana by hitting a button for free, you'd probably say I was crazy. Or if you could hit a button and without talking to a driver, get in the car and they take you anywhere. And you'd leave without even saying anything. You'd say it was crazy over and over and over again. And those changes are nothing close to the changes that are going to be happening because, again, the rate of change is accelerating. So, class of 2025, it's really fascinating. Just some side notes. I talk very fast. If you need to take notes, you need to slow down a little bit. Just kind of go like this. I can take it. I'll slow down a little bit. Also, you can tweet at me atttyb, and I'll try to actually get some of your questions at the end of the presentation. Also, my Twitter handle's on every slide, in case you forget that. And sometimes I actually need to come up for air and take a deep breath and grab some water. But besides that, I'm going to be getting you guys information, so you're going to be drinking from a fire hose. I hope you guys enjoy it. I hope this is the best 45 minutes of your week. So let's dive into it. So who are they? Who is the class of 2025? So let's think about it. We talk about this as the generation that millennials grew up with the air in the household. Well, Gen Z grew up with and is going to grow up with the Internet and the phone in their faces. They're going to be born with the phone in their faces. I'm involved with a charity called Pencil of Promise that builds schools in underprivileged areas around the world. And I was in Laos in Southeast Asia, and I went to a town, a small, remote village with no running water, no electricity, and I showed a kid there, my phone, more importantly, his face on my phone, right? I showed so he could look at the camera. He was painting it and it was the first time he had ever seen his face because they don't have mirrors there. So they actually had never. This child actually didn't even know what he looked like. Just think about that for a second and think about the world we're living in here and more privileged nations like the United States, where kids actually are growing up and the first thing they see maybe when they're five minutes old, is a phone in their face. They're going to see their face right away. Think about actually what that does to them when they're that age. And then when they're age 3 or 4, they're already learning how to be a hipster, right? They're already being dressed up with very expensive clothing and one to move to Brooklyn, actually being a social media marketing expert and actually being a hipster and understanding how to use all this type of information. And then by age 9 or 10, they're coming up with group committees where they're working together. Kids are in school right now using Google Docs, shared information. Collaborative technology at such a young age is absolutely fascinating. Kids are walking up the TV screens and trying to swipe them because they think that should be swipeable. And they're actually probably right. This is the generation that's growing up for. Think about at that very young age. We're not talking about, they're getting indoctrinated later in life from the second they're born. They have a phone in their face, they're learning how to be a hipster, they're collaborating with one another. And this is the generation. And also they're going to be incredibly diverse by the time kids graduate in 2025. It's not going to be an all white generation, not even like it is right now. But brands continue to overlook diversity probably because of the makeup of most of their boards. Right? But look at this. By class of 2025, only half of the the people who graduate are going to be white. And you see the diversity continuing in this country. And it's going to happen no matter what any political regime wants to do. This is a diverse nation and it's going to kind of continue. And I think the brands really need to understand that. And they need to understand that they're not just talking to the rich New York population, but this world is much different. And I think that that's going to be a huge change in the way that marketers go about their consumer base, where would they be graduating from? So education is probably the biggest laggard in our society right now, especially here in the United States. If you think about the fact that in most schools we're teaching kids calculus and how to solve these complex art and mathematical problems where you could just talk into Siri and Siri will give you the answer instantly. It almost doesn't make sense. Why are we teaching kids handwriting if they're just going to be typing moving forward? Meanwhile, our counterparts in Japan are being taught how to write algorithms at age 9 and 10. And when we compete with them on the global economy, who do you think is going to win? So education is really looking in the rearview mirror. And I think that parents of children need to understand that you don't need to push your kids to get straight A's. You need to teach your kids to be an A student in one thing, be great at one thing, have a specialized skill set. Because actually being a jack of all trades, a master of none, is actually not a good thing. I can't tell you how many times I've gotten burned by hiring an Ivy League school student who actually had straight A's. But there wasn't really one thing that they could help me in. And the fact is that if you have to grow up and walk into work every day, one day being told what to do, it's gonna be much easier for your boss to tell somebody in China or Costa Rica or India what to do for much cheaper. You need to actually come in and actually add value. And when parents ask me how they should teach their kids to succeed in this new world, I say you either have to go deep into an art, deep into a science, deep into an art. Is being creative, being a designer, being a copywriter, doing something that actually machines will not be able to do, or being deep into science, being an engineer, being a coder, learning how to operate the machines. If you sit yourself in the middle, then you're going to be out of a job. And in this world, where it's headed in this digital divide, it's going to be a real issue for this next generation, which is really a problem for parents that are telling kids you have to go to a four year college. Because if you think about it, this is my first breath, rare if you think about it, you know, going to college, getting that four year degree. In a lot of ways, kids go to follow their dreams, but when they come out, they can do anything but follow their dreams because they're Deep in student debt. And a lot of legislation change right now is going to make it impossible to walk away from student debt. So it's causing a lot of kids coming up that rethink the notion of four year college. Is going to college as as far four year schools where I'm cracking up 250, 300, $400,000 in debt. Is that really how I want to come into the working world? Aren't I so far behind? Which is driving a huge renaissance in trade schools, which I think is fantastic. Growing up we looked at trade schools as kind of like lower level, but trade schools. Now if you're going to learn how to be an engineer, if you're going to learn how to have that marketable, specialized skill set, then maybe trade schools isn't such a bad thing. A very close friend of mine, Adam Braun, started a startup called Mission U. Mission U looks at the four year education in a lot different way. First of all, it's not four years, it's less. It could be as little as two years. And the way Mission U works is there's no tuition. The tuition is a percentage of your future income. So they are so confident that they're going to actually place people that a percentage of future income will pay down your tuition, so you're not getting into debt. They partner with some of the leading future employers, whether it's Google or Warby Parker or Microsoft, who have partnered with these companies to help craft their curriculum based upon the skill sets that they need moving forward. There's no physical campus, although they have cohorts that are in certain markets and they meet together from time to time. But it's far and beyond a virtual campus environment. But this is, I think, really in the right direction of what the future of education needs to be. But you look at the legacy, you, you know, prestige of getting a college degree and a lot of people are going to still go in that direction. But the fact is that it's leaving many people coming into the workforce under prepared and in a lot of cases in debt. So I think that the notion of education moving forward needs to change and needs to change not just at the college level, but all the way down to kindergarten, what kids are taught because the teachers did not grow up in the digital generation. And a lot of them are going to be long gone, unfortunately, by the time these kids have to make a living and the things that they're being taught. Even the most progressive schools that you see in some of the most progressive cities, like here in New York, still fully understand where the world is headed. So I think the big issue and it's something that needs to be tackled where they will live. So this is the traditional version of the American dream, right? You moved to the burbs, you had a nice house, you had a white picket fence, two car garage, maybe two kids and a dog, right? You'd roll up in your Lexus into the cul de sac, maybe bumping some Shania Twain and you park in your parking lot with the back of your car full of bags from Target that you just bought. This was the American dream. This is what we thought of. You owned that house, you had a mortgage on the house, that was the bedrock of your savings. This was, there was traditionally maybe even a one income household where one person would work, one wouldn't, one would take care of the kids, et cetera. Well, the version of the American dream has taken a U turn from the millennials and I think it will every generation pass because the city is the life, is the life that many millennials have that they imagine for themselves. Schools are becoming better, parks are becoming safer, there's more action and the 24 hour news cycle where a 40 year old see what a 20 year old's doing every second and there's so much action going on. The city is where it's at. Which is why real estate prices in places like Brooklyn and New York are up over 100% on a 10 year period. And, and the suburbs are up only 2 to 3%. And it's not just Brooklyn outside New York, but gentrification and the livable boundaries of cities are expanding outward almost everywhere. Oakland outside of San Francisco, Wynwood outside of Miami, et cetera, et cetera, et cetera. Because the millennials don't want to leave. And when they don't want to leave and we run out of space in the urban Metropolis center, then the space goes out and out and out. I was at the Barclays center at a Jay Z concert a couple nights ago. How cool am I? And Jay z rapped about 560 State St. Which is an apartment building where he used to actually have to sell drugs out of to get by, right? Well, in 560 State street you can buy a two bedroom or three bedroom apartment, but it's going to cost you millions of dollars. And 560 State street is right across the street from the Barclays center which is a multi billion dollar entertainment complex of which Jay Z is a part owner of. So that is gentrification, sort of in a nutshell, bottled up but it's actually happening everywhere. Gentrification obviously has tremendous downsides to society. You know those mom and pop businesses that have been around for 10, 20, 40 years that all of a sudden have to go out or the people who can't afford to live where they actually grew up. So. And in every progression of society though, there was upside and downside. With the airplanes were invented, people said it's going to take people away from their families. They were right. My brothers live in Los Angeles. That sucks. Right? But I wouldn't be able to have been, you know, in California a couple days ago and be here today if I had to take a stagecoach there. Right. So with every progression, society there is positive and negatives. And I think people living in cities is actually going to have the same thing, one of which is not going to be able to buy houses anymore because living in cities is so expensive, which we'll actually get into. So they don't have the house, they don't have the cul de sac. They have this, which is a very small one bedroom, in this case a studio 6, 700 square foot apartment which you're paying in upwards of $3,000 a month for in areas like New York and San Francisco. And in this space they don't have room for all this shit that they're collecting from Target anymore. Right. That's actually not what they're buying. Another thing that's interesting is just the psychographics of cities itself. So I was in Washington D.C. at a presentation that I did and I pulled up this graph. Didn't have time to pull up the New York equivalent, but I'm sure it looks somewhat the same. The purple is your, your creative class, right? Those are the people that are in creative industries, the people who, who are keeping an art. The service class is actually people who are in the middle who connect the working class and the creative class. And then you see the light blue or the working class, well, I don't see any white blue on this. Right. It's mostly all purple. So the notion of the inner city blue collar worker is actually really no longer. The reality is the blue collar worker is being pushed to the suburbs and the creative class is sacrificing the space and the privacy of the subject suburbs for the intimacy and connectivity and action of the cities. They don't need all that space anymore, which has a trickle down effect into how they buy, how they spend their time, et cetera. And it's happening in every city across the country. Growing up in the city, the city used to be a scary place to live. And now you won't see that anymore. You don't feel that anymore. And this is a big reason why. And it's happening all over the place. And this also impacts where they're going to work. Companies are saying that millennials want to stay in the cities. And when they're seeing that, they're taking their suburban enclaves like Pepsi and Purchase, New York or Microsoft and Redmond, Washington or Visa in Foster City, California, and they're collectively moving their headquarters back to cities so they can be closer to millennials. Because millennials have no interest in commuting to the suburbs all day. And when they're doing it, they're saying we don't have as much space anymore and maybe we shouldn't have as many full time employees anymore. In a world where there's truly tremendous pressure on Wall street to drive earnings and bottom line profits, a lot of these companies are getting addition through subtraction by not having as big as a full time workforce and tapping into freelancers and the free agent economy, which on the flip side, on the employer side, really provides a new version of the American dream. The average company in the Fortune 500 in the 50s and 60s was around for 30 and 40 years. The average age of a company in the Fortune 500 now is 6, 7, 7, 8 years old. So that whole notion of graduating college, getting a job at a very reputable company, and working your way up the corporate ladder to the C suite is actually no longer. There's ma. There's tremendous disruption, technological disruption. So the fact is that's no longer a tried and true theory. So if you're coming out with hopefully one of those specialized skill sets like being a YouTube search engine optimizer, right? Or a Ruby on Rails software developer, instead of going to work for a company, you can be a freelancer and actually live the life of your dreams. You can eat Doritos and drink Mountain Dew and play Xbox and make half a million dollars a year because you can work with several different companies and you don't have to stay put in one area. You can actually work from anywhere you want. For companies, they win because they can contract their full time workforce, adjust for seasonality and fluctuation of their business, and then tap in the skill sets they need. And for the individuals, they are not riding their ticket on the basis of one company, they can be. So that is an incredible opportunity for young people to grab it. Also now Obamacare, if it stays, actually makes health insurance shorts more viable for people who actually want to be freelancers, because you can stay in your parents plan for longer. So there's so many reasons right now why the freelance boom is happening. And when people are freelancers, these are the type of jobs they're in. So these are the keynotes of freelancers. You'll see a lot of them are deep in art, a lot of them are deep in the science. These are people who take up skill sets. They go on third party sites and they market their services to companies. Companies bring them in, they make money. The taxes aren't withheld so they can write off their laptop and their Starbucks and everything they want to. So it actually works for the individuals as well. All this is driving a huge boom in the collaborative workspaces. Have you guys all heard of WeWork? So we work is the fastest tenant of commercial real estate here in New York and in many markets around the world. We worked with billion valued over $20 billion, started by two guys in their late 20s, now they're in their 30s. I can't believe how old they are. And they've only gotten to 20 billion in valuation. What WeWork does, it allows me to rent a desk across from the snazzy guy in a blue button down for maybe $200 a month. He may be a, I don't know, an accountant. And the guy next to me might be a copywriter and the guy to the right might be a developer or a graphic designer. I basically rent that desk and we work as locations all around the world. So if I want to work out of LA next week, or I want to work out of London the week after, I actually still have an office to go to. It's a cultural that rivals Google. And I can rent conference rooms, share. Receptionists even have benefits. Sometimes they have massage therapists. So all of a sudden you have all the benefits of working for a company, except you get to be the CEO of you. That's why WeWorks are popping up everywhere, because this actually plays into the freelancer or gig economy. So think about it. You're growing up, you're a hipster at age 3, you're not going to a traditional school, you're learning that marketable skill. And as soon as you have learned that marketable skill set, maybe from a place like Mission U, you're on your way and you're working at WeWork, and you're the CEO of you, and you get to build your own little empire, not worrying about is my company going to get bought, is my boss going to get laid off? And I have to work for some terrible person that's going to make my life miserable. No. Now I'm actually in control. How are these people going to buy? Well obviously it's no mystery that these people are going to be buying more and more on mobile devices more often than ever before. And not just the low involvement everyday purchases, but almost everything. We talk about Amazon's complete domination of retail. So instead of your car being packed with all these Target bags, now the doormans of many New York City buildings have to contest with the ever stacking Amazon boxes that are actually in their lobby. You could say, well, does that mean that they're continuing to buy as much stuff? Well no, because many of these boxes have one thing in them. They're buying less stuff because they don't have as much space in their apartments anymore. But it's one click easy shopping and that's changing obviously the dynamic of consumers view of consumerism, of everyday consumption, the way they're buying is really fascinating to me because as I mentioned, so I got an argument a couple years ago with a school teacher saying they shouldn't teach handwriting in school anymore and she was absolutely flabbergasted. But now I don't even believe they should teach typing in school for much longer because the way that we're going to be entering information to a digital device is not going to be typing either. It's going to be speaking. This is one of those innovations going to happen a lot more quickly than we think. So if you look at Microsoft with Cortana, Apple with Siri, Google with Google Home, Amazon with Alexa, right? These are the most powerful sophisticated companies in the world that are investing in voice technology because they know that anything can save consumers time. They're going to gravitate towards, which is why Amazon is stepping on the gas so much with their Alexa system. If there's one piece of advice I give any of you guys practically leaving to understand where the world's going, spend $50 on Amazon Echo Dot. That's all it is, $50. Buy it today from Amazon, get it in your house tomorrow and just play with it. See how it works. Because it's in the early days, but the later and middays are going to happen much more quickly than we think. And in a world when people are ordering stuff over a voice device, let's just say with Amazon Alexa and say you want to buy batteries. And I actually tried this Amazon Alexa order me batteries, I will send you Amazon basic batteries. Alexa send me Duracell batteries, I will send you Amazon basic batteries in a very robotic, programmatic voice. Why? Because Amazon is betting that the ubiquity and ease of ordering over a voice driven device will trump the power of a multi billion dollar brand like Dorcel that Procter and Gamble has invested billions of dollars in. They're actually dang that the brand doesn't even matter. What's more important than the brand is your time, your ability to actually get the product you want. And batteries today is toothpaste tomorrow and laundry detergent the next day. And the low involvement categories and brands Amazon just announced they're getting into the women's fitness apparel space. Look out Lululemon, because if you want to order yoga pants and they're just as good and they're coming from Amazon Basics, will you care? Some people will, some people won't. There's some categories like fashion, that brand might always matter. But I don't think anybody is getting clout with the brand of their batteries. Right. Or the branded or toothpaste. And that's not building personal brands anymore which we're getting into. But so consumers don't care as much. And Amazon now has the power with the distribution. They have the last mile to really be able to screw up a lot of the power of a lot of brands, a lot of categories, which is super, super fascinating to me. And more and more consumers are going to start to see how easy it is to order over voice and they're going to see how it makes much less sense to type or actually look into a visual interface when actually conducting commerce. Which leads me to think that the future of the phone, another thing that's going to happen much more quickly than people think, is actually isn't going to be the phone. I think this is what the future of the phone actually looks like. Which is why Amazon's investing in AirPods. Because so much of what you do, whether it's send email or post the same status update or text somebody or order something or search for something, you theoretically don't need to look at a screen. You know, I could say Siri, what's the five best pizza places near me? And Siri will tell me. And actually that puts a lot of pressure on Google because since Apple has the last mile in the devices, then Apple can decide who delivers those search results. And maybe it's not coming from Apple, which is why Google now is trying to buy or has bought the and I said they were trying to for a while and they actually did, the manufacturers of the Pixel phone, because they know that they need hardware because hardware is the last mile. Amazon's investing in Alexa because it's hardware. Hardware is the last mile. And in the world of voice, hardware matters more than ever before. Because the power of the brand is not going to be something that's actually visible in terms of what the phone is going to look like. And this is just, this is some Jetson shit. I'm going to throw it out there. I think contact lenses are going to be the wearable that's going to hit mainstream because people who don't wear glasses don't like wearing glasses. Very simple insight. And those contact lenses will initiate augmented reality. Another thing is going to come very close because if you. And for those of you who don't know what augmented reality is, I can take my phone and say, I'm walking through the streets, I'm like, oh, that's a cool apartment building. I want to see how much it is. I'm like, Holy shit, it's $7 million. Because I actually lay over the building with my phone. Or I'm at Target. I want to see how much, you know, this, this bottle of pie costs. I can overlay it and I could see and then maybe I'll buy it on Amazon for cheaper, which I'm sure that Target will. But that is augmented reality. And the augmented reality kit is actually being built into the new Apple iOS. And when the iPhone 10 comes out, you're going to see augmented reality come very quickly into mainstream usage. We kind of saw with the game Pokemon Go, which exploded. We had these zombies chasing imaginary figures throughout Central park for a couple weeks, which is super trippy. But that's going to, that's going to happen more and more moving forward. And in a world where there's contact lenses and you can initiate augmented reality, you know, by looking at things, I actually might be able to look at all you guys and see what companies you guys all look at work at if you opt in. So it's like, I want, I don't care about you. I want to go talk to the guy who works for Coca Cola because I want to get his advertising dollars. I'll just like be a heat seeking missile at a conference, looking around for him, you know, awkwardly stare at somebody's badge. I can just do it without them even knowing it. So that's maybe the world. Yeah, looking forward to that. Also. Another thing in terms of how people are buying is this whole notion of one touch or the uberfication on demand of services. So Glam Squad is a great example of that. Where Instead of having to go to a salon before a big night out, a bunch of women could actually push a button and have stylists come to their apartment and do blowouts, makeup, get their hair done, all those things with one touch. So for Glam Squad, in a world where more and more people are staying, in the cities where real estate prices are going up, a lot of business models actually can't afford for Main street rent costs, right? So for a company like this, a salon, they actually don't have to have a physical place. They're. They're essentially a virtual business with a distributed workforce where you can hit a button and have these people come to your house. There's zeal that does it with massages, there's handy that does it with cleaning services, there's dry cleaning services that have distributed workforces which will come and pick up your clothes and send it to a far floor. This is going to really change how people buy because again it gets you convenience, it saves you time, you don't need to go anywhere and it actually is a great business model. So look for the on demand or uber vacation of services to be another way that changes where people buy moving forward. And I think it's only going to continue. What will they buy? Well, retail changing and one interesting thing about retail is when you know the real estate prices get too high and when businesses say you know what, we can't afford it anymore and they shut down. There's a 2500 square foot retail spaces available. One of three things usually opens up a Starbucks because Amazon has not gotten in the coffee business yet, although they are in Seattle. But they can't, they might be delay. We'll deliver in two hours. But you need coffee now, right? Dwayne Reed, because pharmacies are signed that people still need to go to very quickly or a bank because there's a big sector of the society that still feels like actually need physical cash and need banking. So you're going to have a Bank of America, a Duane Reade, a Starbucks walk out here on the Upper east side, you'll see a gazillion of them, right? But in almost every other business, especially in non durable categories like let's say clothing for instance, you're going to see a lot of fashion retail starting to go under because it just doesn't make sense anymore. You're going to have the big flagship from 5th Avenue for Louis Vuitton and Prada and big brands. But over time you're going to see retail really start to get swallowed up. Across from our offices, a huge three story Best Buy. And I lost a pair of my earphones and I can't hold the iPhone next to my ear. It's just like so thin. I can't do it. So when I'm on conference calls, I also read that you can get brain cancer from it, which freaked me out. So I never hold the phone up next to my phone. And I had an hour long conference call. So I went across the street at the Best Buy and there's a woman in front of me waiting to buy something and she's fumbling through to get her rewards. I'm looking at my watch and obviously as you guys can tell, I'm not somebody who can stand in one place very easily. And I'm like, I gotta get out of here. I can't start to freak out. I can't do this anymore. And I left and I'm on the escalator down to the lobby so I can walk out. On the way down, I ordered a pair of earphones on my phone and I actually did the ordering process on the escalator ride. And it's going to actually be to me tomorrow. As I look back with 17 employees and this huge complex in the middle of SoHo Manhattan, I'm thinking there's no way the Best Buy is going to be here anymore. This is going to be a residential apartment complex. And to three years if I can't have an experience like this, no one's having experience like that. That's actually the future of retail. Retail and shopping and this whole notion it's just simply not going to be the way it is anymore. And people aren't spending money on a lot of things that they used to. Because in a world that people live in, cities, buying cars is no longer a rite of passage. The cost of buying a car when combined with the cost of gas, tolls, parking, insurance for people who live in cities makes no sense. They're going to Uber with E and ubiquity of Uber and Lyft and accessing a car over owning it. A lot of auto companies really have to redefine their model because young people do not want to buy cars anymore. And guess what? They really no longer think they can buy a house either. When I came in the city in 2001, I knew I couldn't buy a townhouse because only the Rockefellers could afford townhouses, right? Well, now people look at that with apartments because apartments, one bedroom, started at $1.5 million. People move in and say, I'm never going to be able to buy an apartment. But you know what? I'm going to be a freelancer, right? I'm going to rent out my apartment when I travel somewhere else and rent somebody else's apartment when I'm there. And I'm going to live that flexible war style. I no longer have to be bound to a certain city by a mortgage or by a car payment, which for them fits into their lifestyle. So they're not buying cars as much. They're not buying houses as much. They're actually not even buying clothes as much. You're going to see a big ad campaign for a company called Rent the Runway, which has has an incredible business model where if women want to go out and they want an expensive dress, they don't need to spend a thousand dollars on a fancy Diane Van Furstenberg dress anymore. They can rent one for $75, take an Insta with it. No one's going to know that you actually don't even own it. Your secret is safe with me. Return it the next day, right? And you save $925, right? You don't have big closets anymore in the city anyway. And you know what? You can wear a cool new dress every single time. And that's why Rent the Runway is exploding. People are now even accessing their clothing over buying it, which is interesting. There's a company where you can rent watches every month and they send to you. So access over ownership is incredibly fascinating to me. The one thing Steve Jobs got wrong is he thought that people were going to own their music. So itunes was about buying songs, but then Spotify came on with a rental model, right? You could access their music. And Apple followed suit by buying Beats. And it turns out that people actually would rather access their music over owning it. Plus, because as it turns out, there's only so many times that one can listen to Despacito. So as a result, music taste changes. It's much easier to access your music as well. How will they spend their time? Well, one thing that is for sure is that people are not prioritizing getting married and starting a family earlier in life. The biggest reason, without a doubt, is obviously Tinder. But there's actually more reasons. There's two income households. It's more expensive to live in cities. People can't afford to have children early in life and actually start a family, nor do they actually have space. You look at the average age of woman when she gives birth for the first time in the 70s, it was shockingly 22 years old back in the, before the Betty Draper era. And now in 2011, it's now nearing 26 years old. The average age of a male having a child for the first time is over 30 for the first time time ever. So people are acting younger later in life because they're starting families later in life. They're singer single for much longer in life. So it used to be this was the vision of success, right? We all remember the movie Wall street, we all remember Gordon Gekko and a pre meltdown Charlie Sheen, right? And who's had a great recovery. So it seems so good for him. But you know, this was the vision, you know you would. It was all about capitalism, you know, making more money and buying that next big showpiece like a, like a Maserati, right? That was a Gordon Gekko world showing up in a suit every day, right? But now this is the modern day version of success. Here you have Eric Schmidt, now the chairman, used, formerly CEO of Google, arguably the most powerful company in the world, at Burning man, right? And, and fitting in well at burning man, where 95, being pretty, pretty nice and lenient, are on drugs at any given time, right? And Larry and Sergey, the first founders of Google, actually hired Eric Schmidt because they ran into him, the Burning man, and said, wow, this guy is great for our culture. So people are acting younger later in life. Imagine Gordon Gekko rolling up the Burning Man. I don't think this guy's fitting in at Burning man, right? What does this mean? It means that people are acting younger later in life. It means now it's socially acceptable for somebody like Eric Schmidt to actually be at Burning man, which means that they're re prioritizing what's important and when they're reprioritizing what important, they are saying that the status update is more important than the status symbol. The status update is more important than the status symbol. Experiences are the new social currency. This so collecting things, owning stuff that no longer makes you cool. No one is Instagramming the picture of their new Toyota Camry. Why? Because before Instagram, if you had an incredible experience, you traveled to some far off remote destination, you couldn't show people at scale that you did that. You would just have to show people the pictures that you had right in front of you. But now you can use experiences, social currency at scale. So if you get a selfie with a dj, or you sneak up to get a good seat at the game, or even it's not your seat, you just sneak up to get the pictures that people think you had better seats or if you zoom, you're not fooling anyone. We know those aren't really your seats, but you get my point. Everyone kind of does it. They try to take these experiences and show that that's kind of an extension of who they are. That's the new social currency. It's not showing off brands. So the age of consumerism in the 90s and early 2000s with bread, Benetton, Fubu, Gap, all these brands that people Rolex, Oldsmobile, all these brands that people use the status symbol that no longer holds water anymore. People don't have houses and cars, so you can't show them off as much anymore anyway, so it's the experiences which is creating a huge trend which fascinates me that I wrote about in my book Youth Nation called Diffty, which Sanford did it for the Instagram. And what that means is experiences are so powerful and potent at building one's personal brand that people pursue experiences not even so much to enjoy them, but to prove that they were actually there. And it's not just kids trying to get selfies with JB's, right? It's all you guys out there right now who that are watching your kid's piano recital. And instead of watching with your own eyes in high def, you're looking at it through your phone, right? I was at a Coldplay concert at the Beacon Theater in the Upper west side a couple years ago and Chris Martins actually said, for once, can everybody just put their phone down for a song? And actually everybody did. And I was like, wow, this is what it like back in the day when people actually went to college and they had a concert and actually looked at the music. But diphty is driving everything. It's impacting how people spend their time, how they spend their money. If they can achieve that experience, it might change the job that they get, the relationship that they get through, even who they marry. So they are bringing their phones everywhere to capture those experiences, to actually build who they are. This is Mission Peak in Fremont, California. It's been around for a very, very long time because it's a mountain. Okay, Mountains usually don't pop up overnight, but in the last couple years, Mission Peak has been plagued by overcrowding, complaints from local visitors, pollution. Why? Because Mission Peak is conveniently located off of two major highways. And while it looks like these people just climbed up Mount Everest, it was actually only a 10 minute climb. And conveniently at the top, there's a pole where people can take the perfect selfie. And now all of a sudden, Everybody is rugged, everybody's outdoorsy, everybody. You can go out, get this picture and actually be home watching Keeping up with the Kardashians by 10:15 in the morning and all that, people won't know and they just thought you said spent four hours on a very rugged hike. And those pictures that these people are taking are going to be shared and will drive somebody's perception of who they are. And that perception will impact their life. So they are going to spend time doing things that they wouldn't normally do if their phone was broke for the day. They probably wouldn't even go to this mountain at all. So because here people are looking at how they spend their money quickly, differently, and they're booking travel last second with, you know, tools like gtfo, which stands for get the Flight Out. And this is an amazing app. On Friday, you see what the farthest place you can fly away to for the cheapest amount of money. Oh, $200 to go to Columbia this weekend. Guess we're all on the Columbia this weekend. You go there, check it off the bucket list after you take pictures. This isn't something that's planned through deep research, through a travel agent or photo fotors. Three to four weeks out, this is planned. Sometimes, you know, five, six hours before you head to the airport, you hit a button, you go. And if the price matches, this is where you're spending money. Not on a car payment or a mortgage. It's on the last second travel. It's also impacting how industries are actually evolving. There's a company called Valleys, who some of you guys might remember, a gym company. Perfectly fine gym, very clean, great modern exercise equipment. You go in, you'd work out you had a membership. Well, guess what? Bally's is bankrupt right now. Because Bally's, while being very efficient at providing a gym for people, didn't provide experiences. And what's taking over things like Color Run. So Color Run people show up. It's a global phenomenon, cost 200 to $300. Actually run it. You show up. Everybody wears white T shirts. The second you show up, you're doused with colorful power, creating a perfect Instagramable moment. Unlike the Kenyans that run 26 mile races in under two hours, these people have their cell phones out at all times taking pictures of everything they're doing. And unlike the marathons, these races are untimed and people who finish are treated by a free concert from a live dj. This is the future of fitness. There's Tough Mudder where people spend 300 hours to climb through freezing cold water and under barbed wire to prove that they are basically an army recruit. This is somebody who's very rough and rugged. Why else would they spend that much money to actually do that? This is actually driving, you know, people to do things in different ways that they've never done before because it's not exciting. Taking a picture of you on the row machine at Bally's. And that's how the fitness industry and so many categories are being changed. So what brands will they seek? So the brand, the brands of tomorrow are nothing like the brands that we actually have today. And there's a big reason why we are living right now in a barbell economy. And this barbell economy is something that's not going to change anytime soon. Unfortunately. For the first time since the 20s, 0.1% of the population controls nearly 25% of the wealth. And while things might seem great here on the coast of New York or out in San Francisco or Seattle, if you travel to places like Detroit, St. Louis, Pittsburgh, Cincinnati, in Cincinnati, in the Westin the nicest hotel there, there's a lock and a passcode on the door of the bathroom to keep the homeless people out in Cincinnati. That's not the case that even the Marriott here in New York, York, right? The jobs in middle America being offshored and outsourced and even companies like Apple, you know, they're not making their iPhone in the middle of America, they're outsourcing it to China. Because if they did in the middle of America, the thousand dollar iPhone X would probably be $2,500. So as a result, in the middle of America, it's being wiped out. And from a business standpoint, it's creating a haves and have nots where there's really only opportunities in two areas. On the value side of the equation and the luxury side of the equation. The value side of the equation. Dollar tree, Dollar store, Dollar General, Walmart, everyday low prices. Vizio selling flat screens for $199. Right? Spirit Airlines, home of the Bear Fair, $39 to go from New York to Boston. They'll charge you if you bring a bag or even for a bag of peanuts. But it's okay because for some people they'll forego their bag of peanuts because they can't afford to think otherwise. So the value side equation is, is actually there's opportunities there if you can win on supply chain innovation, provide, you know, great sourcing, providing the best possible product for the lowest possible price. And on the luxury side of the equation you have Apple rolling out with $1,000 phone and not blinking and actually expecting 40 to $50 million orders. There's Blade, which is a company which allows people to shuttle back and forth from New York City to the Hamptons for six to seven hundred dollars to save you to two and a half hour drive. These companies have cannot sell seats in these helicopters quickly enough. Especially in a world of DY where everyone's going to obviously get the selfie in front of the helicopter before they leave. Who's struggling? The Gap. Why? Who's buying 50 jeans? You have people that are going to buy the $20 Le Jeans at Walmart or you're going to be people who buy the A jeans and 7 and citizens jeans for $200 in SoHo. But no one's buying $50 jeans. Which is why Gap is closing 40% of their scores stores their sister company, the Old Navy. Which sectors caters to the value sector. Well, they're doing just fine. I'm in resort selling hotel rooms for 2,300 hours a night. Well, they're doing just fine. Right. So if you're in the middle, you're gonna lose. You need to figure out. And companies are figuring that out. Delta with Delta 1 they're slowly pushing upstream, you know, so companies are saying which direction do I go to? I mean Victoria's Secret, it was great because this isn't even a socioeconomic split. But they said, you know, our $50 bras catering to 50 year old woman is only is going to disenfranchise the use. So they came out with pink which is kind of their entry level version of the brand. So while that's not hitting the value sector, you can almost look at the established Gen X and boomers and the up and coming Gen Z as another way of segmenting your brand. But we are in a barbell world and if you're stuck in the middle, it's if you're going to lose. So either go super super super luxury or super super value. And those are the opportunities. I also question the future of brand and this company really fascinates me. It's called Brandless and they just raised $50 million. And what brandless is doing is selling everyday low involvement products for $3 each. Like maple syrup. Like Aunt Jemima is not a brand that's actually going to get you social status anymore. So why spend 4.99 on a bottle of Aunt Jemima maple syrup? We spend $3 on better quality ingredients. So basically what they're betting is consumers really just care about the ingredients and not the brands and low involvement categories. So we're actually going to sell all these products for $3 each. Not going to spend any money building individual brands like the P and G type model. And we think this is the future, especially in a voice driven world. So I think people are also going to buy in a way when they buy, when they're not spending money on experiences, they're not going to, they're going to deep prioritize law involvement categories by, you know, private label brands at big retailers and invest in platforms like Brandlist. And then there's companies that are figuring out how to go direct like Away, which is started, which I love. Two women in their late 20s started this company away suitcases for $200 each. Only one model of suitcase only sold direct. Great customer service. The suitcase had an iPhone charger connected to it, which is kind of a big point of differentiation. They're building a great business by going direct, understand their consumer having their own data, not selling through a third party channel where they don't know who they're a customer of. Obviously the groundbreaker in the space of Warby Parker. One thing about Warby Parker, who is challenging Exotica, who is the 800 pound gorilla in the eyewear category is they started off online but now they're building, well, choice physical retail stores in high density urban areas. And when you walk into a Warby Parker you'll see that on both sides of the store they actually have the same product. It's a mirrored structure because they know that less is more. They're focusing on simplicity. In a world where choices can be paralyzing to a consumer, how will they watch with their couch? So I've been saying this for a very long time, but the television is going to become a giant iPad hanging on your wall. I've actually been saying it for 10 years, but actually think something happened in the last couple weeks that make this more true than ever before, which is that Apple and Amazon both announced that they're making television sets. And they are doing it because they know that the television and the computer will be one. And this is going to happen much sooner because I can tell you 10, 11, 12 year old kids have no idea what NBC, CBS, Fox or ABC is. They've never even heard of a TV network. So here are brands spending 90% of their dollars on TV networks where the future consumer doesn't even know what a TV network is, literally does not even know what it is. And in a world where the TV is a giant iPad Hanging on your wall and your TV is a connected addressable device. While the Apple TV looks like this, this today which focuses on networks, tomorrow it's going to look a lot like this. The networks are going to be people, these are individuals that have their own audiences and channels. It's going to be live sports which is going to obviously continue to grow as a huge way for to actually engage consumers. And it's going to be shows directly like shows like billions, right? And shows like this is Us, they might not even have to sell their show to a network anymore. They can go direct. And when the consumer wants to engage in this giant iPad on your website wall, your TV being swipeable, which is what young people think it should be, you can pick a show. And when you pick a show, you can either say I want to buy it and I have any TV commercial or get it for free and I'll be marked you as an individual. But in the barbell economy, does that only mean the value sector is going to be accessed via paid tv? That's an interesting point. But in a world where the TV's a giant iPad and all, regardless, it's going to be an addressable device. Which means that Joe's Pizza is going to be able to advertise to people with the 1 mile of their location during the super bowl, right? It's no longer going to be these Horrible cookie cutter 18 to 49 Nielsen demographics where you're throwing stuff at a wall. Advertising is moving further and further down funnel to performance based data driven because you actually know who you're actually going about. The NFL is the most watched wide program for now amongst both male and female viewers in the us. But every commercial during the NFL games are targeted here, you know, GMC trucks, Bud Light, etc. Because they know it's harder to get the male generation. But there's no reason that Victoria's Secret or a female driven brand shouldn't be able to advertise towards women. It just doesn't know which screen a woman is actually watching. But you're going to be able to soon. And I think it's all going to be powered by Facebook, which I believe Facebook is on its way to becoming a trillion dollar company because they actually have the data. And when you're watching a TV as a giant iPad on your wall, you're going to be in a logged in Facebook statement who will influence them. So as I mentioned, you know obviously that this generation, they don't know individuals, they don't know networks, rather they only Know, individuals, kids are going into YouTube, you know, the Kardashians, I often say, have more of an impact on media and culture than the Beatles in their generation get tons of hate mail when they say that. But actually I'm not saying in terms of actual talent, I'm saying the model that they actually brought to light, which is build a high engaged audience who cares about people's lives on traditional media and television through Keeping up with the Kardashians. And then they all built their own individual audiences on social voyeuristically showcasing their everyday lives. And now every time these women travel somewhere, stay somewhere, buy something other people buy, which is actually the definition of influence. When Kylie Jenner post Fit T a weight loss T cell supplement on Instagram, Fit T's website crashes, they the product sells out instantly. Instantly. That is influence, right? So if you want to hire influencers after they ever have anything close to this, and obviously most people won't, but tell me how you sold five products, what are you influencing? Purchase up. Because if we're in a down funnel world, that's really what it's all about. And if people can't influence purchase purchased by their fashion habits or their understanding of technology or the ability to curate great travel experiences which influence how people buy, they're actually not really influencers. And this is the future. Because the fact is, if you had to get a message out right now to a lot of people say you had to get you unlimited money, you would not call Sumner Redstone, right? You would not call Rupert Murdoch, you wouldn't call these big media companies and spend money. You would call Chris Jenner, you would call Super Braun who represents Justin Bieber. You would call the biggest celebrities in the world. Because people are brands and brands are people, people are brands and brands of people. And these individuals are the people who are now have the voice, who now have the power. The networks no longer have the power. And it goes all the way downstream because there are 12 and 13 year olds walking by Manhattan you wouldn't even recognize right now that actually had more notoriety and influence than Tom Hanks or Tom Cruise. Because these kids are logging in every single day and that's their version of the new network. Obviously with Instagram going live, it's going to even make that facilitation go even faster and make the full circle of the Internet and TV all kind of become one. And then lastly, what companies will shape their world? So we talk about, I'm going to finish up with this. You talk about, you know, a world where there's a digital divide and there's haves and have nots. And in my opinion, if you want to be successful moving forward or you want your child to be successful, as of now, you either need to work for or touch the ecosystem of these four companies. Google, Apple, Facebook, and Amazon. There's a brilliant NYU professor named Scott Galloway who actually is just coming up with a book. I'm plugging him nonstop, and he doesn't even know it. I should actually reach out to him. Let me get myself a cut. But basically, these companies are so powerful. So he wrote a book about these four companies, and what he does is he creates an equivalent for each company, these companies, to a really important human psyche. So Google he compares to God. If you think about it, it kind of makes sense. Do I have cancer? Does she love me? Right. When will the world end? Is Trump secretly good? Right. People. People ask all these type of questions. They think Google knows everything because they are looking towards a higher form. We all want a higher form to go to something that transcends everyday life, who can give us the answers we're looking for. So people look at Google as God in a lot of ways, in their own life, in the world, where in a lot of sectors, especially the millennials, they will tell you that religion is less important than it was. It's obviously a fanatical base, but religion for everyday consumers does not play the role that it once did. Apple is sex. And if you think about.