The loneliness epidemic impact on American Business

So behind me is a movie theater here in San Antonio, Texas. And if you could see, like, it's kind of peak time. I'm here on a Sunday afternoon. And the parking lot is absolutely deserted. Like, nobody is here, right? I mean, it's maybe a tenth full. And you can see it in the numbers. This isn't the only movie theater. 27% is the amount of decline that we've seen in movie ticket sales just since 2003. So it's down about 30% in the past 20 years. And this one's so bad that this particular chain of theaters has had this for sale sign up for a while trying to sell the thing. You can see this sign's been here for a while. This is radically different than the way things would look when I was a kid, right? I used to come to this movie theater 35 years ago, uh, and it was packed. Like, you couldn't get a parking space. Parents would be dropping off kids and carpooling them, uh, and we would all be in here trying to get in and see a movie. It was a place to see and be seen. Because we were trying to get out of the house, basically. But today, man, totally different. It's not just movie theaters that are feeling the problem. If you go look at the statistics, and there was an article that kind of brought this topic to my attention today, so I'll put links to all that stuff in the comments below. But if you look at what's going on statistically, the average American is spending 100 minutes more per day in their house than they did just 20 years ago. In other words, You and I on average are spending an hour and a half more each day in our house and not leaving it. You can see where this goes. If people aren't leaving their house, it has a huge impact on business. And for a lot of small businesses, it's going to be really freaking scary if you can't get people to come out to your shop or your store or your restaurant or your bar or whatever kind of service you're offering. So this video will talk about this trend and then talk about what we could do if we are business owners or CEOs. Deal with the situation. Hey, I'm Michael. I'm a 20-year-plus, uh, small business owner. Uh, I am a business nerd. Uh, I have invested in businesses, I've incubated them, I created them, I bought them, I've sold them. Uh, I've been doing it for a while and I love teaching and talking about business. Uh, so that's what I do. If you like that sort of stuff, please subscribe to the channel, leave a comment below. So if you look at how we got here, the obvious first place to explain all this is what happened during the pandemic, right? So during the pandemic, we were all suddenly forced to live in our houses. You saw people upscale to nicer and better houses. You saw people go and buy a ton of stuff to basically make these amazing nests out of their houses. But that was part of the story, and that accelerated a lot of the trend that was happening. But by and large, we were already starting to be people who were just kind of more lonely and more stuck in our houses and not leaving and going out as much. And because of what happened during COVID practically the whole economy has reoriented itself to make it to where it's pretty good not to leave your house, right? You can get Amazon deliveries, you can get food deliveries, you can get any product that you want basically with a click of a button, and you can get totally entertained and connected to your friends. My kids, for example, they're on Discord all the time talking to their kids or talking to other kids, and they call that socializing. That to me as an older person feels like crazy talk, because if you want to socialize, you have to go see somebody face to face. But for them, it's totally different. And so we talk about this idea of remote work, but actually what's happening even beyond that is we're starting to all live remote lives. And there's a Princeton economist who kind of, uh, created this kind of term to describe what's happening with how we're all living. It's very easy just to live remote in everything. And this trend has gone even further in how we have started to design and remodel homes. So my buddy Bobby Fijian, who's a real estate developer and like a floor planning nerd, talks about how people are actually optimizing their homes incredibly well to basically support this remote life. Like every room has to be optimized for how do you get on a screen? How do you stay connected to the internet? Rather than kind of the way things used to look inside of homes where it was like, how do I entertain guests? How do I have dinner parties? How do I host a birthday party? All of that has gone by the wayside. And he describes what we're doing when we're building homes and designing them now is really building for this idea of aloneness. Like, how am I going to be as comfortable as possible and relaxed and optimized for this kind of remote living type thing? And a lot of what humans are doing here is just reacting to the change in the world around us. What's been happening since the 1950s and 1960s is, well, a couple things, but the first and foremost was the decline of what are called third places. And third places are the places that are outside of work and home. So your first place is home, second place is work, uh, the third place is these other places you go to, whether they're churches or coffee shops or, you know, civic organizations or clubs that you are part of. Well, the built world and our, our world itself has started to displace those ideas. So if you look at your typical Starbucks, for example, these days, many of them are getting optimized to encourage you to not hang out. Like, gone are the days like back in 19th century France, right? If you're familiar with kind of the West Bank of France and all that kind of stuff— Left Bank or Right Bank, sorry, not West Bank— like, they had a bunch of coffee shop discussions. In fact, some of like the original stock markets started in these coffee shops. But today, like, the built world is totally changing that. We started to build these suburbs where people were just trapped in their car and unable to connect with other people. Heck, Like I'm recording this video driving along and— safely, by the way— and I probably won't talk to a whole person during the entire putting together of this thing. Pretty nuts. So with the decline of these third places and other places you can go, basically we're in a situation now where people have tried to fill that gap. And what's filled that gap? Well, the internet and social media has come along. And, you know, this morning, for example, I didn't socialize with any friends face to face. but I talk to dozens of friends digitally and virtually, either through text messages or Slack messages or just talking on Twitter or X. And a lot of this leisure time that you find yourself in the house is very different than the leisure time that, say, my generation grew up in, right? I'm 50 years old, so I grew up in the '80s. We left the house to go have leisure time. We sometimes had the other type of leisure time, which was called sedentary leisure time. And I'll put a link to the sociologist below that defined this. But basically the idea is that sedentary, like, leisure time is watching the TV or doomscrolling TikTok or watching a YouTube video. And that type of stuff inherently affects your brain in a much different way than active socialization and active connection to other people. And part of the sedentary lifestyle and sedentary leisure is video gaming, right? I haven't talked about that yet, but if you have teenagers or Gen Z boys, there's a pretty good chance they are hardcore and spending time in video games. And none of this is new. Right? My generation who was alive growing up in the '80s and '90s, I went through the same phase as a teenager where I was addicted to video games. I don't play video games anymore, but apparently I am addicted to making YouTube videos. This change in consumer behavior is a good thing if you're in the sedentary leisure business. You provide video games or social networks to people or delivery services. But look, if you're expecting people to get out of their house to buy from your business, it's not a good change. This is bad for society too. Some studies have shown that the more lonely people feel— say you show a 5% less in the feeling of connectedness, in other words, you're 5% more lonely— that tends to correlate with a 5% reduction in your earnings and a 10% reduction in your overall happiness. Things are getting worse before they look like they're going to get better. There is a rise these days in people putting together AI social networks, Basically, they're social networks that don't have other people in them. They just have fake AIs that are basically in there acting like folks, whether they're supportive best friends or they're relatives who are there rooting for you. The whole thing is just a fake thing designed to make you feel less lonely. But the people who are using this, it's super interesting. Why would you want to talk to a whole bunch of AIs that way? Well, it turns out that, well, Gen Z has a lot of anxiety about a lot of things. And, uh, this is a great way to deal with connecting to other people and satisfying that desire without actually taking any risk. Perfect if you're a highly anxious person. And there's another possibility if you've watched the movie Her that will end up with situations where people have entirely fake friends that don't actually talk to other people. Uh, we're not that far off with the rise of the way the AI technology is working these days. You could basically have a conversation with it and you're gonna have a tough time figuring out if it's a real person or not. But wait, there's more. Gen Z is also tiny. There's just not that many of them. I'll put up on the screen the population pyramid for the United States. The declining birth rate in the United States— and well, it's not only the United States, but everywhere— is making Gen Z relatively tiny. If your business is depending upon young people coming out and suddenly it's competing with AI for attention and there's not that many of them coming out and shopping, That's a lot of reason to worry. I go out to the places like the movie theater that we just went to, or I go to different parks or events or concerts, and I'm like, where are all the people? Where are all the young people? Well, you know, declining birth rate, shrinking number of them. There's just not that many of them around. Okay, so enough of the depressing stuff. The good news is not all hope is lost. There is still an opportunity to adapt to what's changing in the world. And I bring you case in point, this restaurant. Kabobobs, located near my house. And I came here last Tuesday and I was blown away. Uh, look, it's pretty quiet right now because it's a Sunday morning, but when I came here Tuesday night last week at 8:30 PM, when nobody in San Antonio is shopping for dinner, this place was absolutely packed. It was full of folks all under 30. Oh, actually, that would explain why there's no customers. They're closed on Sundays, so makes a ton of sense. But look, here's what we have going on in this restaurant. It is perfectly optimized for what the Gen Z wants to do, right? They want to come in, they don't want to deal with waiters, they want to have a situation that's well-lit, clean, easily customizable, right? And it, well, could be done exactly as they want it. And look, this place was absolutely packed at a time when all the other restaurants in San Antonio were dying for business. I mean, what's genius here also is even the tables are set up in a way that's like super easy to socialize. You don't have to worry about hierarchy. You don't have to worry about any of that stuff. Like, just long tables with benches there. Oh man, kind of beautiful. This is a big point that we have to recognize as business owners and CEOs. The way young people want to socialize and interact, uh, it is totally changing from the way we did stuff. And, uh, we can either keep running the same play that we did that worked in the 1980s, like that movie theater we went to, uh, or we could change to adapt with the situation. And look, there's a lot of businesses that are doing that. Kabobobs is one, hugely successful, but there's some others that are doing it as well. And I did another video here on this channel about how young men are suddenly becoming extremely religious. They're returning to church in droves. And it's not all of them, but it's a lot of them. And one of the interesting things that came out of that video was how the churches that they, these men were going to, these young men in their 20s were going to, were radically different than kind of classic churches. They were not interested in going to Catholicism, right? Zero interest in that level of structure and kind of lack of personality and stuff like that. What they wanted to go to was something much more in the evangelical vein of stuff. Very casual, very connected, very real, very structured as well, but in a different way that allowed them to come in and feel like they were part of something that was very authentic and connected to the other people around them. This makes a ton of sense if you have people that are A) super hungry for connection with their fellow person, They're wanting to rebel, in the case of young men, against the way things have been done for a long time. And they're looking for authenticity, right? They're going to go try to find that in religion or in a church, and they're doing it in droves. There are totally opportunities to adapt to the change in the world. Behind me is this place, the Nowhere Bookshop. It's one of a growing number of independent booksellers located here in my hometown of San Antonio. And we've seen actually a huge growth in the number of independent booksellers since 2009. There's almost a 50% increase in the number of independent bookshops that have sprung up around the country. And what's making them work is they're not thinking just like their bookstores anymore. They're thinking about like their places and destinations for people. So places here like the Nowhere Bookshop, they're having events all the time. They're having the ability for people to come in and have meetups. And they have a little cafe in the back where you can come in and well, just socialize. Even big chains can do it too. Barnes Noble has recently shown a huge resurgence. That's a big, you book chain here that has kind of barely hung on for the past decade or so as the book business has totally cratered. But now they're operating their stores much like independent bookstores. They're letting the local managers start to connect more to the individual customers, bring on the right type of products for them, and supposedly it's working, at least in terms of the bottom line for Barnes Noble. There's also opportunities for people in this changing environment to open businesses that, well, weren't really successful or couldn't really work in the past. I don't have to drive out I don't have time to drive out to one today, but there's the emergence of these kind of board game cafes located in a number of different strip centers and malls around my town where people can go out and take what used to be an activity they did at their house—play board games—and do that with strangers and colleagues and folks like that in an environment, well, like, totally not at their house. Movie theaters are also changing as well to deal with this. And if you look at that same chain that we showed you at the beginning of the video, just 5 miles down the road is a brand new theater development that they've done, except the theater part is just a small part of what they're doing. It's a restaurant. It is an entertainment center. It has video games. It has all kinds of stuff that allow people to really do more than just go see a movie, but instead, you know, satisfy that need for socialization, entertainment. That is having to compete with what they could be doing in front of a computer at their house. I think the lesson here is, as it always is, right, which is markets, people, our social tendencies, they are always changing. And our job as business owners is to recognize those happening, see where there's tailwinds, see where there's headwinds, and then try to respond accordingly. And look, some businesses will, and sadly, some businesses won't, and they'll fall behind and get shuttered. That is just the nature of the game. And look, is it bad that so many people are spending so much time in their houses? You know, a big part of me, having grown up in an environment where we went out on our bikes and spent a lot of time outside and socialization was face-to-face, and, you know, back then you would go to your neighbor's house in the '80s and knock on the door and ask if Timmy could come out and play. And now my kids tend not to have anything to do with friends unless it's an organized playdate that mom or dad has put together. And, you know, there's a big part of me that makes that sad because I miss the spontaneity and the freedom that we had. I'm sad that my kids tend to not have it. But look, the world I grew up in was different than the world my parents grew up in. It was different than my grandparents'. I don't think it's neither good or bad. It just always tends to be different. And you know, you may disagree with that and think that, you know, we need to go back to a simpler time. But you know, progress is inevitable. You can't, you can't stop it. And if in 50 years if I've learned anything, it's that. So tell me what you think. Let me know in the comments below. Bye.