Matt Britton YPO Presentation

You guys hear me? Okay? So I speak all around the world, and this one is a little. It's outside the norm for me because I'm speaking to incredibly talented, incredibly successful, incredibly accomplished people. So usually I try to tell young college students what the future of the world was or people who are is. Or people are stuck in big corporations, how they can kind of get their way out. I'm speaking to a bunch of entrepreneurs here, so I had to think differently about how I was going to deliver this presentation relative to the ones I've done in the past. And I start to think about my experience in ypo. I've been in YPO now for two and a half years, and before joining ypo, I was never in anything that was even close to ypo. I started my first company out of college. I always hired people younger than me because that's all I could kind of afford. I did have a board of directors, but they didn't really tell me what to do. I kind of drove my own business. And I wasn't really exposed to a peer group of successful people my age until I enter ypo. And when I joined ypo, I remember sitting at one of the first interviews to try to get into ypo. It's not that bad. Don't worry about it. I'm sitting at a table and I see this little black thing on the table, and I'm like, is that a BlackBerry? And the guy's like, yeah, I have a BlackBerry. And I saw two or three at the table. And then a couple of my people in forums have Blackberries. There's one right there. How many Blackberries are in the room right here? OK, this is 3% of the global market share of BlackBerry in this room right now. OK? I think YPO is 99% of the global market share of Blackberries, which means something. It means that. Why do people use blackberries? Because you can type easy. You don't need any of those frills. Like, screw Instagram. None of that matters. Right? And that's how a lot of people I think, in ypo think is that they're in legacy businesses. How many people here are in finance? Okay. Or real estate? Okay. So my experience, and obviously there's other industries surrounding it, whether it be manufacturing, retail, and there's an emerging group of people in technology and software, et cetera. But my experience is a lot of people who are in these legacy businesses that have so many zeros next to them that are doing things the way they've already always been done. They're at incredible risk of being disrupted. So while your BlackBerry might work for you now, I'm not picking on the two blackberries, because that's just an analogy for kind of not embracing what I call Youth Nation, which is Youth nation is the new world that we're living in right now. And this new world has been created by the millennial generation, which is basically anyone that's between the age of 21 and 38 years old. So does anybody in here a millennial? I see one. I know one. Wow. So lots of millennials here. So for you guys, the things that we're going to be talking about, you probably don't have blackberries, but for those of you in the room, a lot of the things I'm going to be talking to you about today, you're probably going to know about. And I'm going to see a lot of head shakes. And for those of you who don't, who aren't millennials, it might be new information. Why? Why are millennials different? Because the millennials are the first generation, actually grew up with the Internet in the household. So when I was 12, 13, 14 years old, and if I wanted to research something, I had to go into Encyclopedia Britannica. Anybody you guys do Encyclopedia Britannica or actually pick up the phone and call people, right? My world was different. Millennials who grew up in the Internet, in the household, I believe millennials and Gen Z, which is generation that comes right after them, their brains are completely wired differently. The access to information, the real time communication, the power that they hold in their hands is greater than the power that NASA had when we were kids. And if you think about it in that way, and you think about the fact that millennials have not filled the C suite yet, right? Because the Oldest millennials are 37, 38 years old, they're just starting to fill the C Suite. Obviously there's the Mark Zuckerbergs of the world, who have changed the world in an early age. But what you're going to start to see happening when millennials fill the C suite is a massive change start to happen in legacy businesses. Because people are going to walk into large institutions and say, why does the printer paper still have the holes on the side of it? Why is there a blinking 12 on the VCR? And why do you even have a. Why haven't these companies move forward yet? And they're going to start to do things differently. And my experience in my forum and talking to a lot of people in YPO is there's just not a Lot of knowledge of what's actually happening in the world because there's not really a need to know because business is really good right now. But my goal today is actually future proof. Everybody in this room to give you at least one idea that you might not have known of in terms of how things are changing. You can actually apply to your business. So I'm gonna try not to talk so pie in the sky that it's gonna be inspirational. There will be some inspirational, will be some less, but more. I want to give you guys something tactical. You can leave this room and actually improve the way you go about business, whether you're more efficient or you can communicate more easily to your millennial employees, or maybe you can integrate a new technology in the way you go about doing business to increase your profit margins. So that's what I want to accomplish today. A couple of things about me. I talk incredibly fast. I usually put about 90 slide presentations together for 45 minute presentations. So I go kind of two slides a minute. If I'm too fast for anybody, just go like this. It's totally cool. I have my Twitter handle on each slide. How many in here use Twitter? Okay, so Twitter, first of all, side note, is a great tool to keep in touch with your industry. Many people I've spoken at yto don't use Twitter. It doesn't mean that you actually have to tweet. It doesn't mean you have to produce content. But if you are in real estate, there are people out there undoubtedly that you want to know what they're thinking and what they're feeling. There's reporters out there that work for the real deal. There's people that are creating software in the real estate industry. You want to know what they're thinking and feeling at any given time. And just reading a trade publication won't do it for you. One thing you can do on Twitter is create a list. You can create a list of people in real estate. I'm a Philadelphia Eagles fan. I create a list of all the reporters and all the players from the Philadelphia Eagles. And on game day, I just follow that list. But there's no reason why any of you in any industry shouldn't be on Twitter and curating a list of the people that are most meaningful amount to your industry. Cause you will learn so much that you didn't know before and they'll give you ideas on an everyday basis. So that right away is something that I would take as a homework assignment. You don't need to tweet. You don't even need to put your face next to the profile if you don't want anyone to know you're on social media. But you should be using it as a content consumption vehicle. Cause it'll give you knowledge. And as we all know, knowledge is power. For those of you who are on Twitter, my Twitter handle's on each screen, so if you have any questions, you can also tweet me as well. And we're gonna. I'm just gonna take a sip of water and we're gonna dive right into it. Sorry, technical issue number one is starting already. Here we go. Perfect. So when we were born, us Gen Xers and maybe some baby boomers in the room, we were staring into our mother's loving eyes. But when millennials are born, they're actually staring into a phone because their parents actually want to capture every single moment. By the time kids are 3, 4 or 5 years old, they're dressing as social media gurus or living in Williamsburg, wearing more expensive clothes than in bars. And by the time they're 10, 11, 12 years old, which is the age of my kids, how many people in this room have 10, 11, 12 year old kids? As you'll know, it's incredible in terms of them using a multitude of devices when they're in group work sessions, sharing their homework information in the cloud. Right. This is the world that we're living in. And as a result, as we all know, kids are growing up incredibly fast. The things that they can know at any given moment by searching their phone is completely mind blowing. By the way, there's a new app called Screen Time that's part of iPhone, which you can actually limit how long your kids spend on your phone and what they're able to access. So I would encourage all you guys to take a look at that because I know it's a big problem for parents of young kids. At the same time, I know all you guys know in this room that adults are growing up slowly. How many adults in this room are growing up slowly? I see a couple they know are growing up slowly. I'm growing up slowly as well because we're no longer in a rush to get old. And one of the main reasons why is we have access to what young people are doing. In the past, when my dad was 40 years old, he would have no idea who the modern day Justin Bieber was of his time because he could just lock himself out of it. He would have no idea what younger people were doing. But now we're in a world where anybody can access what Younger people are doing and has given people permission and privilege to act younger later in life. Take marriage for example. The average age of a married woman in the United States in 2010 was 27 years old. And it's going up to 29 years old. Look at the average age of women having babies for the first time. So people are pushing off pregnancy, they're pushing off marriages because they want to live younger later in life. How many of you have been to Burning man here? So there's a lot of YPO people that go to Burning man. And it's not uncommon to see a 60 year old there doing hula hoops at Burning Man. Eric Schmidt, who recently just left as chairman of Google, prior CEO of Google, arguably one of the most powerful companies in the world, got his job at Burning Man, a drug infused rave out in the middle of the desert, because Larry and Sergey, the founders of Google, flew him down there as sort of a cultural test to see if he would have the job. Imagine Gordon fucking Gekko doing that in the 80s dressed in a three piece suit. Would Gordon Gekko ever roll up the Burning man dressed like this? Probably not. This is a new face. That's the old face of corporate America. This is a new face of corporate America. And I think many companies that are operating right now still think that young kids want to be Gordon Gekko when the reality is they want the freedom and the mind frame of Eric Schmidt. And that is a big cultural change. And one of the biggest drivers of this is something I call status update is a new status symbol. Status update is a new status symbol. In the 80s, 90s and early 2000s, people would build their brands by the cars, houses, watches and sneakers they collect. It was the brands that people adored that showcased to society what they were all about. The social currency of the Gen Xers and the Boomers was stuff you rolled up with your American Express, you rolled in your cul de sac with your new Lexus, listening to Shania Twain, right, and your new cd. And people would know that you were of a certain status. Because if you think about it, back in the day, if you had an incredible experience like you climbed on top of Machu Picchu, right, or you met a celebrity and you got an autograph. Today it's a selfie and back then it was an autograph, or you sat front row in the game, or you didn't, but you kind of zoomed in and pretend like you sat front row in the game. The only people you could share those experiences with were the people who could see your own physical photo album. So experiences were not scalable as social currency because you weren't able to share them at scale. You could only share them to people who are right in front of you. But now, with the massive growth of Instagram, which is now nearing a billion users, experiences have replaced stuff as new social currency. And the status update being the new status symbol has changed the way that people spend their time, spend their money, prioritize their life in a way that I don't think many of us in the room can ever comprehend. And it's created a trend that I talk about in my book Youth Nation, called Diffty, which stands for did it for the Instagram, which means experiences are so powerful at the jobs you might get, the relationships and social circles you might get into, that people are pursuing them not only to enjoy them, but to prove that they were actually there. And it's not only young kids, it's parents that instead of watching their kids piano recital with their two eyes, are actually watching it through their phone because they actually want to take the video that no one's going to watch, including them anyway, but they want to prove that their kid can play piano and become the next Elton John. Right? This is Mission Peak in Fremont, California. Has anyone been to Mission Peak? So Mission Peak has been around for a very, very long time because it's a mountain, okay? But in the last two to three years, Mission Peak has been plagued by overcrowding, complaints from local visitors, pollution, no parking. Why? Well, if you look at the stock price of rei, REI hasn't tripled in the last three to five years. But all of a sudden everybody wants to go to Mission Peak. The reason why is that Mission Peak, although it looks like these three women climbed a 15 minute walk up a hill, and it's conveniently located next to two major highways. And there's a Starbucks right off the bottom of the parking lot, but at the top there's a pole that allows people to take the perfect selfie. And when you're in bed on a Sunday morning, feeling bad about yourself, eating your bagel sandwich that you just ordered in from Seamless, and you see these three women and they're your friends, you're going to be like, I need to get up and I need to actually be active. But these three women, they're going to go right back to their house afterwards and actually do the same thing. And that's one of the issues of modern day, is that we're comparing our everyday lives next to other people's Highlight reels. But the reality is these people's highlight reels is impacting the way that they're perceived. The same reason why people in Russia are renting grounded private jets to take Instagram photos. Now, these jets actually don't take off off the Runway, but it does have an elitist status symbol next to it. And it is important that people are sharing this. Has anyone been to Black Tap in New York City? So Black Tap is an amazing story. These sundaes cost 20 to $25, but the ingredients are no different than the ingredients that are out of Dairy Queen. If you try to take your kids to Black Tap on a Saturday or Sunday, there's lines around the corner. TaskRabbit is a great app for that, by the way. You go on, you hire a TaskRabbit, they wait in line for you, and you show up right when you're at the front of the line. Time is money. Another side tip for you. But why does Black Tap do so incredibly well? Because these pictures, when taken, actually allow the people they're sitting at the restaurant to showcase to their friends and their social circles that they got into this place, that they know about this place. I tried to take a bite of the sundae in the middle before my daughter had to take a picture of it. I almost lost my hand and my head in the process. So that's why companies like this are doing so well. It's not necessarily about the sundae or even about how it tastes, and it's about the way it looks. Now, you could say, that's terrible. It's so superficial. But isn't buying a Lexus versus a Toyota when it's the same company and the same engine the same? Is it holding out an American Express card and saying, membership have its privileges the same? So I don't think humans have changed. I don't think this generation is any different. I just think the world around them is different. And the way they build status is through experience. Overstuff. This is the Museum of Ice Cream. Has anyone been to the Museum of Ice Cream or heard of it? Wow. So that's shocking to me. Oh, wait, a couple people here have been in the Museum of Ice Cream. So they are now in four locations. Miami, New York, San Francisco, and LA. They sell out in 30 seconds to two minutes in every market they go to. And when you go to the Museum of Ice Cream, you don't learn about the pasteurization of the cowls or Ben and Jerry's illustrative history in building a great ice cream company. There's none of that. There's 10 to 12 rooms where you can go like this sprinkle room and take the perfect size selfie. And your kids do not want to go to the Louvre or the Tate Modern or the American Museum of Natural History. They want to go to the Museum of Ice Cream. And it's not just your kids, it's 20 year olds, it's 25 year olds. And the reason why is if they're going to spend their time and their money, they want a shareable experience. They want to be able to build their personal brand to them. They can access a picture of the Mona Lisa on their iPad. And for them, going to a museum in the traditional stench just isn't what it used to be. So we can hold on to the past and say they should want to go to these museums, but the reality is this is the new world that we're living in now. Do I believe Museum of Ice Cream is a fad? I do, but I think it's a genetic marker towards where we're moving in the future, which is that businesses need to have experiences at their core or young people or the new. It's not just young people anymore. Right? Because the millennials are about to be in the C suite, they're simply not going to care. All this is driving a global hospitality renaissance. Travel is more important than ever before. And the pie chart of expenditures. Travel continues to grow because it's the ultimate personal brand. Builder companies like Hotel Night that get you last second travel are exploding in popularity because travel has become so much more affordable. If you talk to a 21 year older these days that goes to a four year college, I would almost guarantee you they've been to Europe by now. Right? First time I went to Europe, I was 30. It just wasn't as accessible. There was no kayak, there was no price line, there was no easy ways to book travel. Travel's more accessible than ever before. And when people travel and they want to know where to go, they're not going on their photo's guidebook, they're actually going on Instagram. They're entering a location, they're seeing the most influential people, seeing where they went. And then they're going to go there. They're going to go there because it helps them build the brand. Sure, they'll do some sightseeing in the process, but when younger people travel, first and foremost is how do I capture this experience? That's everything. Events and festivals are bigger than ever before. This is the electronic daisy Carnival that happens every year in Las Vegas has more people that go to it every single year than went to Woodstock. An event that defined a generation. I was on the phone with Coca Cola last week. They said by far their fastest growing channel. Isn't Walmart, isn't Target, isn't Amazon. It's actually these live events because more and more people are looking to actually have these shareable experiences. Some people say technology brought people further apart. This is an example of actually how it's bringing them closer together. Tough Mudder. Anyone here? Tough mudder. Pay $350 so you can look and act like you're a Navy seal, right? Instead of going to a traditional fitness experience, you climb under dirty water and barbed wire. And oh, by the way, at every single station like this one, there's a photographer there just waiting to take the picture. Because if you couldn't take your phone with you and there was no photographer, this business would be nowhere near the smashing success that it is. Look at a company like Bally's Total Fitness. Great gym, clean environment, great equipment. Well, Bally's is now out of business. But you look at this, you look at Barry's Boot Camp, you look at Soul Cycle, right? You look at Color Run, which is a marathon where people show up wearing all white and they get doused with colorful powder. And the races aren't time. That's the future of the fitness industry. Now even fitness needs to become shareable. There's a reason why companies like these are taking off and all this is changing where people actually want to live, because urbanization is being driven as a result. Because in a 24 hour news cycle, the action is not happening in the suburbs. It's happening in major cities, which is creating a whole new version of the American dream for the millennial generation. It's essentially taking a U turn. The old notion of moving out to the suburbs. The white picket fence, two car garage, 1.7 children, right? That's what we grew up knowing. But now the cities are the life that this young generation imagines for themselves. They are choosing the proximity and the connectivity of an urban environment over the space and the privacy of suburban environments. And that's impacting so many industries that so many people in this room are in. It's driving gentrification. As we know where urbanization, along with Amazon, is knocking out mom and pop shops, driving up real estate costs. I live in Brooklyn. We all know what's happened to the real estate prices there in Brooklyn over the last 10 years. It's not Just Brooklyn outside New York, though it's open. Outside of San Francisco, it's Wynwood. Outside of Miami, it's Jamaica Plains. Outside of Boston, New York. You name a major city and I'll show you how the livable boundaries have been pushed outwards because young people don't want to leave. Richard Florida has a book called the Creative Class, which showcases how the transformation of the demographic blueprint of this country is being pushed inside out. The notion of the blue collar inner city worker is really no longer. This is a graph that shows the people in purple are the creative class, the people in tan are the service class, and the people in blue are the working class. Well, where are the people in blue in New York City anymore? They're simply not there. They are the ones being pushed out to the suburbs, the blue collar worker. And we're seeing it obviously transform before our very eyes. And this is creating major pressure on tremendous consumer sectors that have made up a big percentage of our GDP here in the United States and around the world. Most importantly, the two places where consumers have spent the most amount of their discretionary expenditures. Cars. First and foremost, the price of gas, tolls, parking insurance, and actually paying for car, combined with the ease and ubiquity of Uber or Lyft, makes that a no brainer for young people. Which is why there's talk of Uber going IPO at $120 billion worth more, way more than the market cap of GM and Chrysler and Ford combined. Because I think the market knows that this is the future of the automotive industry, which is why in 2017, for the first time since the financial crisis, auto sales were down. So you look at cars, one of the biggest discretionary expenditures for young people. Well, they're not spending it anymore because they're spending it all in experiences. Right? And then let's not even get started about home ownership. This is an incredible stat. Look at homeownership and what that happened in 2008. It dozed. Now you can all say, yeah, the financial collapse in 2008, sure, right. Well, what else happened in 2008? Well, social media took mainstream. Instagram took off, Facebook took off. Twitter was peaking. At that point, people realize that experiences are incredibly important. So those two things happening at once, people saying, oh, what? Mom and dad's home value is turned to what their 401k is turned to what? At the same time, oh, wait, I can actually be my own brand and build my own Persona using social media. I don't want to buy a home. I don't want to buy a car. So one question I always get from people who are kind of dissenters from what I'm talking about is where these kids get all this money to do all these experiences. Well, they're not buying cars and houses anymore. That's where they're getting money from. So that's a major change that's happening. And obviously you talk about the suburbs now, obviously it's not like this is in the Miracle Mile on the north shore of Long island, but you go across America and you see what's happening in shopping malls. They have incredible landscaping, but it's not because they're paying for it. Right? So shopping malls are going under. You look at, you know, all distressed properties in shopping malls across the country. It speaks for itself. Because what used to be the affluent urban environment, suburban environments, no longer exist because the affluent are staying in major cities. Is it binary? No. Are there wealthy young people still moving to suburbs? Sure. But the trends are really undeniable. And this is generating massive opportunity for the service sector. Because in the world where young people are living in 500 square foot studios or one bedroom apartments, their lifestyle is completely different. And the way they go about their life is completely different, which is opening up opportunities all over the place. Has anybody heard of Glam Squad? Okay, so Glam Squad is a service where it's an Uber type service. You hit a button, you have a team of stylists come to your house to do hair makeup blowouts, Right. For women who are going out before a night out. It's a great model for everybody. Because salons can't afford Main street real estate prices anymore. Right. They're getting priced out of the market. They can no longer afford it for the consumer. They don't have a car to jump in. It's much easier to have people go to their home. And if I'm l' Oreal or Maybelline or Revlon, I'm buying Glam Squad. Because these people also aren't rolling up to Target or Walmart anymore to shop. Right. They're ordering on Amazon. So how are you getting your products in people's homes? How are you getting first party data? There's a reason that Dollar Shave Club, which is a startup, got bought by Unilever for a billion dollars because they had a subscription service going direct to consumers for razors. So one big opportunity coming out of this is companies doing direct services to consumers. This is handy. People who live in cities, you hit a button, you have a cleaning service come to your house. If I'M Clorox or Procter and Gamble. I'm buying Handy because it actually gets my products, my detergent and my dishwasher soap in people's homes. Wag. WAG is a company that allows you to hit button that people walk your dog. If I'm Purina, I am buying WAG, right? Because WAG now, they just raised $300 million, by the way, dog walking app. But the reason why is it's not just because of their dog walking revenue. That's what people don't understand. The reality is now they have all the information of every pet owner in the US and if you look at the total size of the pet food and pet training and pet I have a dog, there's 80 categories that you could spend on the damn dog. So all of them, WAG is gonna be able to own that. And big companies are starting to take suit. IKEA bought Test Rabbit, that same company I told you to so you didn't have to wait in line for black hat sundaes. IKEA bought them because when you buy that dresser, which is supposed to be 108 pieces, but only comes with 105 and you can't put it together now you can pay them more money to have somebody actually put it together for you. And now IP has this intravenous selling model. Under Armour bought a company called MapMyFitness, which is a jogging app, because they could sell shoes, which is a product. But now with MapMyFitness, they can track how people run and they have their data and they can go back to them and upsell them. So you're gonna see more and more consumer packaged goods companies get into services and as a new way to penetrate the consumer and get first party data. Another huge trend as a result of this is called collaborative consumption or the sharing economy, which is a notion that many products in categories that people would never think would be shared in the past are being shared. This is Rent the Runway. Rent the Runway allows a woman to rent that dress for $75, which would normally cost $1,200 to buy and return it the next day. And an Instagram age where once you actually post yourself wearing a dress on Instagram, you can never wear it again, which is insight that I'm hearing from the other gender. This is an incredible model because it allows you to spend those savings on experiences. So think about that. Sharing high end luxury clothing. This company's nearing a billion dollars in valuation and now is a men's watch club where you can actually get a New high end men's watch every month, the showcase, without owning it, right? So you're sharing that, you're sharing your music. You're not buying your music. Using Spotify to access your music. One of the one things Steve Jobs got wrong, he thought people want to own their music, they still want to access their music. So we're seeing many platforms actually turning to a sharing environment versus an owning environment. And all this is transforming the fabric of the global workforce. Many young people are realizing right now that they can pursue gigs instead of jobs and have an enviable lifestyle within this new millennial framework. When we were growing up, it's be a doctor, be a lawyer, right? Work your way up the C suite. That's the way to a six figure job, which in the 80s was a really big deal. Right now you needed to actually be able to afford a studio or a parking space here in Manhattan. But that no longer exists anymore. The average age of a company in the Fortune 500 is nearing only 10 years old. So working at a company that you know might not be around forever really isn't a good strategy. And that's why you see companies like WeWork hitting valuations of over $20 billion. Now people could say wework's a fad. And I know a lot of people in real estate think WeWork is a fad, that in a down economy that's gonna go bust. But look at this article that just came out the other day. Google now has more contract employees than full time employees working at their company. Google does. This is a company that's in no need of cash. They're not doing it to save money. They're doing it because they want the flexibility and to deal with seasonal fluctuations and have different types of talent coming to their workforce. So I do believe this WeWork model where for those of you who don't know what WeWork is, it's you spend 250 hours, you rent a desk, and there's different people in different industries and it has a culture that rivals Google. And you get a receptionist and you get conference rooms and you get a massage therapist, and you get health benefits. I think this is the future of the workforce. A lot of times I have parents come up to me after I talk and say, are my kids totally screwed? What should they do? And they always have the same advice. Go deep into an art or deep into a science. Going deep into an art, being a designer, being a copywriter, being a creator, doing things that the machines can't, or going deep into a science Being a coder, being an engineer, learn how to build and operate the machines. But anything in the middle, being a jack of all trades, master of none, getting a degree in liberal arts, right? It's much cheaper for your boss to tell somebody in Costa Rica or India or China what to do than to tell your kid with $100,000 of student loan debt what to do. Right? So the reality is you need to have a marketable skill set that's deep into an art or deep into a science. And you could basically monetize that marketable skill set in a variety of different ways without relying on big companies. And that's a major change that's happening. And big companies are following suit. They're now moving into cities. So you have Visa moving from Foster City, California to San Francisco. You have McDonald's moving from Rosewood, Illinois into Chicago. You have General Electric moving to Stanford into New York. Big companies. Kimberly Clark moving from Neenah, Wisconsin. How are they going to hire great talent in Nenah, Wisconsin towards Chicago? Because all these companies know that if they want to attract the millennial workforce and urban environment, they need to leave these huge campuses where they moved out for tax concess in the 80s, back into major cities to redefine their headquarters. And yes, they can have as many people, so they're going to have contracting workforces through freelancers. So that's a big deal. And I think it's going to continue to stay the barbell. Economy is probably the number one piece of advice I give to anybody going in business, which is there is opportunity in two places in this country. On the value side and on the luxury side, there's not much opportunity in between. For the first time since the 20s, 0.1% of the population controls nearly 20% of the wealth. The eight richest men in the world have as much wealth as the poorest 50% of citizens on earth. So that's it on a global basis. But in the US there's tremendous opportunity. On the value side, there's Dollar Tree, Dollar Store, Dollar General, right? There's Vizio that sells flat screens for $199, Kia selling automobiles for 13,000. Ryanair, the fastest growing airline. And on the luxury side, since the luxury side still does veer older towards Gen Xers, there's still a ton of opportunity with luxury brands. And there's JetSmarter, a private jet rental club. And there's Blade that flies people back and forth to the Hamptons so they don't have to sit in traffic for four hours. Guilty. Right. So these are incredible services and they're not stopping. The iPhone can get away from selling with a phone for the same person. You can buy a house in Detroit. Right. So that's actually happening right now. But who's losing in this world? Well, the Gap is losing. Why is the Gap closing down more stores? Because they sell $100 jeans. Well, the value side is buying $25 lead jeans from Walmart and the luxury side is buying $250J brand jeans from boutique and Soho. And not many people are buying $100 jeans. And I think there's $100 jeans in almost every single category. American Airlines is $100 jeans. Delta solid. They went upstream to Delta 1, right. Even JetBlue went upstream to Mint. And then there's Ryan and Spirit Air, where you pay for the peanuts. Right. But you see American sitting in the middle, or tide. Tide is $100 jeans. Why? Because the wealthy, affluent urban mom is buying method detergent with organic ingredients because she's not bringing that crap into her home. Right. And the value side, they can't afford to spend the extra $2 on Tide, so they're buying private label store brand detergent. And Tide is in the middle. Coca Cola, same thing. They're buying Vita Cocoa because they want more healthy ingredients for the luxury sector, while the value side is actually buying store brand RC Cola from Walmart. So one of the biggest issues facing so many big companies right now is that they play in the middle in a world where there is no middle. We're a tale of two countries right now. We hear about it every single day. And I might even go a second into that territory. Right? But we all know that we're a tale of two countries. And because we're a tale of two countries, from a business perspective, it's a terrible thing. From a social perspective, from a business perspective, there's opportunities on two sides, and you need to play into those two sides. And this is all obviously creating tremendous opportunity for large companies. We all know about Amazon. This is what most luxury doorman buildings look like in major US Cities every single day. This is what my apartment looks like at the end of every single day as well, actually inside my apartment, where obviously we know that more and more things are being consumed by Amazon in the world where people aren't actually getting into their car. The average Amazon prime customer, which does service the luxury end, got $1,300 of revenue per customer last year, is going to get $3,000 per customer this year. And the next couple years they're going to get that number up to 6, 6, 7, $8,000 a year per prime customer. Which is why I think their market cap has no end in sight. They just bought a company called Ring, which is a connected doorbell device, which basically means you can ring your doorbell, see who's on, see on your phone who's ringing it and tell them to open the door. Well, who benefits the most from that? Amazon. That's why Amazon bought Ring. They want to make it easier for people to actually buy. You know, in every category. They bought Whole Foods, so they're going down in low involving categories. They're going into perishables, they're going to get into auto soon. They provide convenience. And in a world where people are running around a million miles a minute, pursuing experiences and living in cities, time saving is the ultimate benefit. All these companies on this list, all the big companies that make packaged goods, Coca Cola, Procter and Gamble, Unilever, Mondelez, Johnson and Johnson, you name them, I wouldn't be surprised if every single one. And I'm not gonna use that part of the video because I'm on camera now, because most of them are my clients, right? But I would not be surprised if every single one of them is out of business in 10 to 15 years because they have rising natural products costs, right? Shrinking margins. The impact of Chinese tariffs are obviously gonna destroy these companies. But most importantly, the power of their brand is shrinking. Cause it used to be if you worked for Procter and Gamble or you worked for Coppertone, right? Let's say you sold suntan lotion and you went down to Bentonville, Arkansas and you went to Minneapolis and you got extra shelf space at Target and Walmart. You were taking your family to Aruba for Christmas. It was all good because as long as you had a couple inches in shelf space, your product was going to move off the shelves. But two things are happening. A, your sunscreen is being bought from Amazon now. So it doesn't matter how much shelf space you have, people are buying there on the luxury side. And the value side. Oh, those same targeted Walmarts, they're creating store brand suntan lotion that's $3 cheaper. And the world where people are worried about making the mortgage payment, which suntan lotion you think they're gonna get for their kid. And this is the problem for so many of these companies, which is why if you look at the most valuable brands in the world, this is a 2017 study, there's no Coca Cola or Nike here or Hershey's. They're all utilitarian brands. Because while I was growing up, I was told by Spike Lee that if I wore Air Jordans, I'd be a better basketball player. And I quickly realized it didn't work. So those brand stories that we believed growing up didn't really take hold. And I think consumers have gotten smarter. And what they know right now is that all products you can buy are good enough. The brand doesn't really matter, and the brand they really care about are utilitarian brands, brands that make people's lives easier. Uber makes our lives easier. Google makes our lives easier. So if you're a brand, you want consumers to care. You can't just be about selling your product anymore. You need to focus on the consumer and making their lives easier. Some companies, like Brandless, that just raised $50 million is betting. They're betting brands don't matter at all. They're creating a company based on the notion that brands don't matter at all. They're selling products in almost every category for $3 each. They're sharing the ingredients, but they're all ingredients that, you know, there's no triglycerides in their ingredients. Right? But there's no brands, and they don't spend any money on advertising. And they're betting that consumers having trust in the quality of the ingredients is going to make somebody buy their maple syrup over Aunt Jemima. Right? Who cares if you've never heard of the brand? It doesn't matter. I just want good maple syrup for my Sunday pancakes. And that's why this company, I think SoftBank, actually just put another $200 million in to it because consumers are really gravitating towards it. Away Luggage. Anyone here of Away Luggage? So Away Luggage has an iPhone charger built into it. This company is now doing $35 million in sales started by two women in their late 20s, which is an amazing story. It's about utility. If you're going to buy a Samsonite or Tumi Luggage versus this, and this has the iPhone Charger, I'm going to buy this. So what do these big companies do, these traditional brands? What do they need to completely rethink their model? If I'm Cascade and I sell dishwasher detergent, I'm not going to spend more money on advertising or shift my ad spend to Snapchat. I'm going to reinvent my entire business model. I'm going to buy Westinghouse, a defunct company that makes dishwashers. I'm going to make small dishwashers that fit into drawers at apartment Buildings. I'm going to make these devices smart that they only take Cascade. And when it runs out, it's going to automatically order more from Amazon. And I'm not going to sell to Walmart and Target. I'm going to call Related and XL and the biggest real estate companies and sell my dishwasher to those buildings. Because now I have an intravenous selling model. I have an ecosystem. The same way Apple has their phone in your hand, I'll have my dishwasher in your house. And is Cascade gonna do, is whoever the company behind it, Clorox or png? Of course they're not. There's no way they're gonna do it. Cause in order for them to do this, their stock price is gonna have to go down for a couple years to bounce back up. And they're all white male, board on golden parachutes, can't afford to let the stock price go down. So they're going to wait it out. And by the time they need to make change, they're going to be Blockbuster or Toys R Us. So this is a perfect example. Somebody will do this and it's not going to be the leaders. And that's why the current leaders are going to be gone. And that's where there's so much opportunity in innovation. Voice is massive. How many of you have an Alexa device in the house? Okay, so those of you who didn't, my biggest piece of homework is spend $50 and buy an Amazon Alexa dot device $50. You could swing it, have it in your house and play around with it. Because while it might not mean a lot today, voice is going to be more important than typing. In five to 10 years, it's going to become the way that people enter information into devices more often than not. And Amazon's already seeing it, and Amazon's taking advantage of it. And Amazon is basically using this Alexa infrastructure to take down legacy brands. For example, if you have an Alexa, which I do, I have like 20 of them and I want to order batteries and I say, alexa, send me door cell batteries. Alexa will say, I will send you Amazon Basics batteries. So you know, Alexa, sell me door cell batteries. She said, I will send you Amazon Basics batteries. Basically what Jeff Bezos and Amazon's Betty is that the ease and ubiquity of ordering a product without even picking up your phone, let alone leaving your couch, will outweigh the value of Dora Cell or Energizer or a multi billion dollar brand. And they're probably right because our Amazon, I trust Amazon Basic battery is actually more than dooracell right now. And dooracell spends billions of dollars of brand equity. And that's the future that we're moving in is utility really means everything. And Alexa has the chance to become the ultimate utility. Some high level stuff to wrap it up. Google, I think the Facebook, Apple, Amazon, Google, the big four is probably most at risk and the biggest reason why is 95% of their revenue comes from search. And in the world where I'm speaking into Siri and asking Siri where the closest pizza place is, Apple can now dictate who delivers that search. They have the last mile. They have their device in our hands. Google's trying with Android, they actually tried to buy Motorola, they actually tried to create their own device. Didn't work out so well. Microsoft tried to get in mobile with Windows Phone, they tried to buy Nokia. Didn't work out so well. And with the affluent set, Apple is really it. If somebody texts you and it comes up green, it's like really not great socially for young kids that are trying to date. So I hope you people on blackberries are married but so it's tremendous power for Apple to have the device in people's hands. It's tremendous power for Amazon to actually have the Alexa in people's homes. It gives them power over a company like Google. That one is a software company. So I think they're gonna have and that's why Microsoft is betting big on Surface and hardware. They're all trying to get into it. Facebook just launched and a device in the home that allows you to video conference or understanding it. Television is the other big shoe to drop. I'm in the advertising driven industry, you know, multi, multi, multi billion dollar industry. Most of it 80 billion a year in the US alone is spent on television advertising and it's gone to traditional TV networks. ABC, NBC, Fox. But if you ask a kid 11 years old what Fox is, they'll tell you it's an. If they ask you what ABC is, they'll tell you it's an Alphabet. Because young kids have no idea what a TV network even is. They don't tune into TV right. They tune into YouTube, they tune into individuals. Yet most of these brands that are about to die are spending almost all their money on traditional television. And one day very soon your TV is going to become a giant iPad hanging on your wall where most kids go off to TVs at Best Buy as long as Best Buy is still here and they try to swipe the TV because you should be able to swipe it. And that's where TVs are going to become. You're going to be able to swipe your tv. And while the Apple TV looks like this today, where you can actually still go to networks, almost like you're tuning in, what's happening in this world. The brands are people and people are brands. And consumers don't want to tune into networks, they want to tune into people, which is why the most popular handles on social media are people, not brands. Right. So I think the future of TV looks more like this, where there's going to be people. The Beyonce channel you can tune into. Right. The Neymar soccer channel, which is content about him. The Kevin Durant channel. Right. That you could tune into. That's what this new generation wants to do. They want to follow people. In the 90s, reality TV got big on MTV with like the Real World. And then there was American Idol and Big Brother and Survivor and it took over television in the late 90s. And the reason why was it was telling us all something that people are more interesting than scripted characters. And then social media came, the ultimate voyeuristic media consumption trend. Right. Well, I think it's only going to continue moving forward. And all this is creating massive shifts where in the tech medium, advertising space. It started off in Silicon Valley. Everybody wanted to be there where the technology was. Then it shifted to Madison Avenue because it all had to be paid for. Now it's in Hollywood because everybody needs content and eyeballs. Right. You see Netflix and Amazon prime and Apple and Xbox all going for content, unfortunately. Right. Because I'll shift the next is Washington because I think the regulation that's going to happen with these four companies is going to be real. Obviously it depends on what happens next week and next couple of years. But I think a lot of these companies are a big risk. And what could happen to Facebook is what happened to Microsoft in 90s. The beginning broken apart. It's almost inevitable. Just. And it's gonna be interesting to see what happens there. So Facebook is still incredibly important and it's actually one of the main things I think I want to impart on you in terms of specific tips. So I'm gonna leave you guys with seven individual very tactical things that from talking to people in ypo, I don't think you guys are doing and this is industry agnostic that I think you should do. So hopefully one out of the seven will work for you guys and if you know all seven well, then hopefully you at least enjoy the energy and enthusiasm that I gave you guys today. So, number one, this is really small here. So I'm learn how to buy Facebook ads. Now, you might think this is crazy, but I can tell you it is one of the biggest opportunities that you can have in any business. No matter who we are, whether we sell to consumers or businesses, there's a certain amount of people that can actually make our year, right? So if you're selling to the real estate sector, right, there's people who are looking for apartments or maybe people who are putting up listings. If you're selling to doctors, you're only selling to doctors, right? It's very finite who you're going against. Using a platform like Facebook, which doesn't only allow you to market on Facebook, but Instagram and messenger, right, you actually can reach billions of people, but only the right people you need to reach, you could spend. So I do public speaking aside from running a software company. And I had a gap of about a month where I was looking for paid public speaking. And I spent $127 targeting 1,000 of the biggest speaking bureaus. And I made well over six figures in speaking fees from the $127 spent. That's how impactful it was. And it happened in three days because not everyone sees it. I just target people who work for X amount of companies. So whether you learn it or somebody that works for your company knows how to learn it, it is a massive, massive, massive opportunity. And it's an arbitrage right now. It won't be there forever. But B2B is actually the biggest opportunity on Facebook to reach the type of people that you want to reach. 2. Crowdsource creative. I went to many of your websites, your B2B websites, and they're not very good, especially on mobile. And you probably hired a design agency and paid them 10 to $15,000 to create them. Where Squarespace is a platform where you can have a college kid create a website for $1,000 that will look amazing, is optimized for the iPhone and the iPad, that will look better. There's no. This isn't even listed Squarespace. I skipped it. This is Crowdsourcing Creative, which is 99 designs. But back to Squarespace, it's a platform you can license to actually build a website instantly. Look into that if you're creating a cheap B2B website and tear down what you overpaid that agency to do and rebuild on Squarespace because it'll let you update it yourself on the way to work. When you're an Uber, it's so easy and useful. And not enough people are actually adopting it. 99 designs are when you could crowdsource creative. If you have a logo, you need design, you need collateral. You could spend $200 and by tonight you could actually crowdsource designs. Actually get designs for anything you're looking to build without calling or actually talking to anybody. It's an incredible tool. I designed my logo for my software company and I'm in a tech space. Do not you designs. It's just incredibly useful tool to actually get creative done very quickly. Thumbtack. So this great videographer here who joined us today. I film all my speaking presentations. And last night at seven o' clock at night I went on thumbtack and for $600 found a videographer to come here to actually videotape this. So if you need videography, any sort of professional services, very quickly you go on thumbtack and instantly you can have people show up and actually take care of that for you. Imagine how many times you wish, whether you had an off site for your employees or you actually want to create a quick video or you want to record something even personally that it'd be great to have production services at your fingertips. Thumbtacks is amazing to do that. This is a big one. Personal contact management. So many of you guys have contacts that you've built through the years, either through college, through alumni networks, you name it. But over the years, it's hard to keep in touch with people. A tool like compactually creates a personal CRM system for you. Very easy. You put people in buckets. It could be your very rich friends, right? It could be your friends who can help you. It could be your very poor friends. It could be your friends that are in a certain industry. And it could remind you to email them every quarter, every year and actually make sure that you're keeping in touch with people who matter most to you. And I can tell you from personal experience, it's incredibly impactful to keep your network warm over time. And this actually allows you to do so very easily. We've talked about Squarespace. Shopify, for those of you guys who are in commerce, is an incredible B2B sales tool that I would definitely look at. And then lastly, and probably most importantly for people who run companies. And by the way, I'm gonna send all you guys this entire deck so you don't have to take pictures or anything. It's all good. I should have said in the beginning, but I kind of like the paparazzi angle from here. Slack is. And for people like Josh March, who's like a very progressive millennial who runs like a hot software cup, he's like, duh, Slack. But for many of you guys in this room is and for people like Josh March, who's like a very progressive millennial who runs like a hot software company like duh Slack. But for many of you guys in this room, I know you don't use slack. And Slack is an incredible tool for collaboration with your employees. It allows all your employees to share what they're working on at any given moment. And Whether you have 5, 10, 20, 100 or 1,000 employees, it will change the way you do your business. You'll know what everyone's working on. You can easily recognize people, you can share information quickly. You can learn what's going on in your company. So the reason this company has a multi billion dollar valuation as many companies on this list do, but this is a no brainer that you should deploy no matter what company you're in, no matter how big or small your company is. So I'm going to take a drink of water and a deep breath and I think we're going to open up for questions. But thank you guys. Hi, Matt. Hey, Ron.

So I have a question.

Yes?

I struggle with these issues that you discussed there.

Okay.

And I think you gave a lot of fascinating insights about things like off site workers and all these increased benefits and things like that. The one issue that I miss that I always, the people who run my company always tell me to do all these things you're talking about is I always say if I let you from home, work from home, where do I get my increased productivity? All these things you're talking about are about costs. What always concerns me is where's the, you know, how do we make our money from these things that we're consistently investing much more in? These things are all for me as an entrepreneur, cost Mac.

So I would, I would argue, because I've run a business of 500 people and I would argue that's the worst way to get productivity because when people work for a full time job, they often get comfortable. I'll walk behind people and they'll be looking at their Gmail and they'll quickly switch the tab because they don't really want to be there. They're sitting around because they feel like they have to be there. Where if you're hiring independent contractors, you could actually hire them based upon output. You actually don't need to pay their health benefits. You don't need to worry about all the things, all the entitlements that big companies have. So if done the right way, just because, I mean, IBM is almost completely remote at this point. So it doesn't mean that you lose productivity. But yes, it is a risk. It just depends on how you structure it.

Can you give examples of midsize small businesses that do, like, what you're talking about? Like, do you think that for a mid sized business, small business, that freelancers, all that stuff, you can get the same price?

So I don't think it's binary. So like there's a company called WordPress that is worth over a billion dollars. It basically was Squarespace before Squarespace powers half the Internet. They don't have an office. Right. So that's a, that's completely the other side. IBM is shifting, obviously. Google is an example of 50%. I personally think that you need an office, but I also think that you need to tap into specialists as contractors to deal with fluctuations in your business. Right. Like think about it. You run a PR firm that's very successful. You win a big client, like you hire employees and then when you lose the client, then you have to fire the employees, where, maybe that's where it would work. But it's different for every business. And I'm not saying it's right or wrong, I'm just saying it's happening. Right. Google has 50% of the workforce as contractors. It's a fact. WeWork's worth $20 billion. It's a fact. These things, I think, mean something when they mean something that you are not a personal choice of. I guess the best way to answer. Yes.

Well, first, phenomenal presentation.

Thank you.

For someone who speaks fast, you were great.

Thank you. Appreciate it.

But I mean, really, truly one of the best presentations I've heard in a very, very long time. And everything you say is very, very interesting. And it's really dedicated towards the millennial market. But how long can this millennial market go for? I mean, when you think about the world right now, the number one car company in the world owns no cars.

Yeah.

The number one hotel company in the world owns no hotel rooms. You know, so. But how long can these things continue? I look at, I have employees that are out. I mean, confidentially, I have a male employee use that for five weeks for maternity leave. How long can this continue in the millennial world where they want to work from home? Because in my opinion, I agree with Line, I'm not going to get the same productivity if they're looking at Facebook or Instagram at work for 20 minutes. They're doing it for three hours at home. So how long can this really take place? Maybe I'm just living in the past, but I look at all these things.

Well, just to clarify, on a contractor basis, you might not be paying them hourly, you might just pay them on a deliverable.

But then I'm never getting the correct worker. I'm never getting the person who's going to say, I'm dedicated to this. I'm in it for the long term.

Can I just say, as a millennial.

And who does have people who work from home? Like, do you ever work from home? And do you look at Instagram for three hours just because you.

I'm not on social media, but I do work from home from time to time.

Thank you. It.