By now, you know the higher education system in the United States is broken. You didn’t need COVID-19 to prove it.
Because even before the postsecondary education industry was forced to pivot to remote learning en masse, a caste system was rapidly bubbling up within its ranks:
It sucks that students can’t go back to campus to do things like learn and network and party in person. But that’s not the real tragedy. This caste system is, according to today’s guest and NYU Stern professor Scott Galloway.
As Scott sees it, the system has enabled us to completely lose sight of the importance of unremarkable students—those who might not be MIT material, but deserve a shot at college (aka the ticket to improving your socioeconomic standing).
In this episode, Scott tears apart that system (and almost every other system, for that matter) in a wide-ranging conversation about the future of higher education. Some buzzy sneak peeks:
You don’t want to miss this episode. Listen now.
Business Casual - Scott Galloway.mp3
Kinsey Grant, Morning Brew business editor and podcast host [00:00:07] Hey, everybody, and welcome to Business Casual, the podcast from Morning Brew, answering your biggest questions in business. I'm your host and Brew business editor, Kinsey Grant. And now, let's get into it. [sound of a ding]
Kinsey Grant, Morning Brew business editor and podcast host [00:00:18] My guest today had this to say about our topic du jour earlier this summer. Quote, They are soon going to become The Walking Dead, end quote. Want to take a guess what he was talking about? Well, after a week of content that we put out here on Business Casual, I bet you can guess. He was talking about the middle-of-the-pack universities here in the United States. The tier-two types that can't quite earn the bragging rights of an Ivy League school, but still want to charge like they can. My guest thinks some 1 to 2,000 of those kinds of universities will go out of business in the coming years. A prediction that bold, metaphors that intense—my guest today could only be one person. Professor Scott Galloway. Scott, welcome to Business Casual.
Scott Galloway, Professor of Marketing at NYU Stern School of Business [00:01:00] Mrs. Big Time. I knew you when. Right. I knew you when. I knew you when you were just like some, I don't know, I don't what I would call, but now —
Kinsey [00:01:09] [indistinct] not this. [laughs]
Scott [00:01:09] Now, an enormous, big time. Big time. Or as I call you, BT, 'cause we're very close. We're very [indistinct].
Kinsey [00:01:15] We are. We are.
Scott [00:01:17] Congratulations.
Kinsey [00:01:18] Thank you. Thank you very much. I appreciate it. I have to say that it all started with you. For our listeners out there —
Scott [00:01:23] Go on. Say more.
Kinsey [00:01:23] I'll run through some of Scott's accomplishments. You're a professor of marketing at NYU Stern. Founder of several companies, L2, Red Envelope, Prophet, best-selling author of "The Four" and Algebra of Happiness," co-host of the Pivot podcast, one of our favorites here at Morning Brew and Business Casual. But I would have to say, arguably, your biggest accomplishment to date is that you were guest number one on Business Casual.
Scott [00:01:46] That's right.
Kinsey [00:01:46] My very first interview.
Scott [00:01:46] The inaugural. Yeah, I was it.
Kinsey [00:01:49] And I told you before, but it remains the most downloaded episode that we've ever had.
Scott [00:01:53] I'm sorry. Repeat that. I didn't hear that. What was that?
Kinsey [00:01:55] It was the most downloaded episode. [laughs]
Scott [00:01:57] That's right. Gary V. OK, I'm sorry. Ray Dalio. All those people—they don't have anything on the dog. OK. Better looking, more successful, more money doesn't mean anything in the podcast world.
Kinsey [00:02:10] Doesn't mean anything.
Scott [00:02:10] Doesn't mean anything.
Kinsey [00:02:11] It's all about the numbers, [indistinct]. That's exactly right.
Scott [00:02:13] That's right. That's right.
Kinsey [00:02:14] So, Scott, I'm excited to have you. I love talking with you. You're obviously someone who people have really, really requested come back on the show. So excited to get some time with you. This week on Business Casual, we've been tearing apart why exactly right now kind of feels like it might be a turning point, for better or worse, in the higher education system. Talking about ways that higher education in the U.S. is broken, ways that we can fix it, ways it's not working for everyone, at least in the current form. And how the answers to all of those questions change, because now every university is—or most universities—are Zoom universities. So with that in mind, let's start here. I have a question. So obviously, I've got a lot of questions. Here's my first one. [laughs]
Scott [00:02:54] Sure.
Kinsey [00:02:54] The total 2020 to 2021 cost of attending Harvard College without financial aid is $49,653 for tuition and $72,391 for tuition, room, and board, and fees combined. Would you pay that right now?
Scott [00:03:11] For Harvard?
Kinsey [00:03:12] Yeah.
Scott [00:03:13] 100% yes. So it's situational. I think I read somewhere that a four-year experience at Yale costs about a total of $380,000. So if you're a middle- or upper-middle-class family that's paying, say, a 30% tax rate, you're talking about $700,000 in pretax income to send one daughter or son to Yale. And, by the way, still hugely worth it. And the reason why is that these elite universities—you're talking about the Ivy League, you're talking about really a luxury brand—they're more spectacle than historic. Only 64,000 total students at the Ivy League. Florida State has 75,000. Ohio State has 55,000. But we talk about them a lot because of their elite nature and just how much press they get.
Scott [00:03:56] But when you get into Harvard, you basically get into the top rung. You're royalty of what is a caste system in the United States. And we like to think we're a meritocracy. That's bullshit. We're a caste system. But instead of the caste system that exists in Europe, where it was dependent upon your last name, the thing that thrusts you into the upper echelons of income trajectory and trajectory of power, economic security, and stature in the U.S. is where you go to college.
Scott [00:04:21] And it's loosely, not crudely, or loosely speaking, your trajectory in your 20s and 30s, which largely dictate your economic trajectory the rest of your life, is based on the trajectory you have—the slope of your jet engines coming off the aircraft carrier, which is the thrust is really the degree that stamped on your forehead. And even more than the education, even more than the experience, really what we're selling is the certification. And where did you go to school, Kinsey?
Kinsey [00:04:49] I went to Washington and Lee University.
Scott [00:04:51] OK. So that is a good school, not a great school, from a certification standpoint. It says that you're smart. It says that you're good at what you do. But it's not Harvard. It's not MIT. When you come out of Harvard or MIT, it says one or two things about you. It says you either have rich parents or it says you are freakishly remarkable between the ages of 15 and 17. And both of those cohorts corporations love, because wealthy people, the kids of wealthy people, make for great wealth managers at Goldman Sachs because their parents, friends all have a bunch of money. When you're freakishly remarkable from 15 to 17, it probably means you're going to continue to be freakishly remarkable through your 20s and offer incredible return on investment. Pay you $80,000, $100,000, $150,000 at Google.
Scott [00:05:32] Quite frankly, the dirty secret of corporations as you're a lot more productive and less of a pain in the ass and willing to work harder because you haven't collected dogs and kids [indistinct] the 40-year-old who's making $400,000 a year. So those organizations essentially certify their value-add in the admissions process, and that is all the value-add happens when you get that admissions letter. What I think you're going to see, is you're going to start to see kids apply to Harvard and MIT that a really incredible, get in and not go and then put on their LinkedIn profiles that they were admitted to Harvard.
Scott [00:06:03] Because it's the certification—and not only the certification that you got in and graduated—but mostly that you just got in because the real value-add is in the admissions department. Washington and Lee basically gets—probably has like a 15% to 20% admit rate, meaning that filter is so fine that they are spending a lot more time than corporations, the armed services, even government, saying, all right, let's look at this person's accomplishments. Let's look at their test scores. Let's get people to write long, thoughtful recommendations. Let's maybe interview them.
Scott [00:06:31] What they've done is they've said, all right, HR departments of the biggest corporations in the world, we're going to serve up a group of incredibly filtered, qualified people that have never committed a felony, are emotionally stable, can play well with others, have the grit of sports likely, or had the bandwidth to go build wells in Africa in between their junior and senior year. All these wonderful things that are sort of forward-looking indicators of success or—or just have rich parents.
Scott [00:06:59] So this is this certification you get from Harvard. The cynical way to look at Harvard is it's now a streaming service. They spend billions of dollars on intellectual property. They deliver via broadband. Apple+ is 60 bucks a year. Netflix is 150 bucks a year. Harvard is a streaming video platform that costs $58,000 a year. But the certification you get, effectively when you're just admitted to Harvard, much less when you graduate, is probably worth millions. Now that's the luxury brand. They're still worth it. When we start talking about the rest of the college industrial complex, which is 99.5% of the students to go elsewhere, it's a different situation.
Kinsey [00:07:41] Right. So, Scott got this brings up a lot of questions here. I think, number one, thank you for telling me I went to a good, not great, school. You're right. [laughs]
Scott [00:07:50] Let's be honest. Let's be honest.
Kinsey [00:07:51] You're right. We should be honest. So with this pivot to online learning for so many campuses, do you think that it's something that, you know, would stick? I was talking to Chegg CEO Dan Rosensweig, and he communicated to me that he thinks it should be something. When we think about what the average college student is like, it's not the fall leaves and football games. It's often 25-plus, maybe have kids at home, are usually working 30-plus hours a week in addition to taking classes. So what does the future look like? Does it look more online because of this experience we're doing or going through fall 20 20?
Scott [00:08:23] Again, it's situational. So back to the Ivy Leagues. They'll double-down on their exclusivity. They have so much money. They have small campuses. They can vaccinate the campus. They'll double-down on this Dead Poets Society exclusive test every day, reconfigure the dorms, distancing. I don't want to say it'll be largely unchanged, but they'll maintain kind of their positioning. The opportunity is that two-thirds of college students go to a public school or a state-funded school.
Scott [00:08:53] And the opportunity is, in this under the notion of a crisis is a terrible thing to waste, is to use a mix of small and big tech to try and decrease the delta between the offline and the online experience, such that I believe we're headed towards a hybrid model. And the opportunity is that the exclusivity that we're all drunk on his academics has resulted in Washington and Lee, I bet, has not increased its freshman seats, but the tuition is probably up 1,200% in the last 30 years. Stanford has trebled the number of applicants, but hasn't increased their freshman seats.
Scott [00:09:25] And we all like that as alumni because we think our degree gets more valuable. But it's a tragedy for younger people in middle-class households because what they're finding is increasingly they're paying Mercedes, Ferrari prices for what is a Hyundai, then a Hugo, then an old Honda. I don't know if I got the quality right there. If you, in fact, have 50% of classes online. In a lot of classes, the reality is you could probably do almost as good a job online for some of these courses or some of these classes or take half of them. If you take half of your courses online, you effectively double the size of the campus. So an example: I typically teach 160 kids [indistinct] my brand strategy class.
Scott [00:10:03] The reason it's 160 is because of space constraint. The class only holds 160 seats, they cap out at 160. Because I said I'm not coming back on campus until there's a vaccine, they said, well, fine. And I want to be clear. NYU has not placed any pressure on any faculty to come back on campus until they're willing to. They've said, well, can we uncap your enrollments? And I said, absolutely. So I have 400 kids—they capped my enrollment of 400—and boom. So we're gonna end up in this weird situation where the dirty secret of universities is about 30% of the faculty use the adjuncts, clinicals and lecturers teach 80% of students. It's going to go to 10/90, because if my enrollments have gone from 160 to 400, that means 240 students are not taking other electives.
Scott [00:10:47] And one of the reasons you've seen faculty deploy weapons of mass distraction to try not to embrace technology is they see the writing on the wall. And that is unless you're an outstanding lecturer—and this is happening across every industry when technology comes in—the best radiologists in the world and the best finance professors in the world are going to see their currency increase massively and everyone else is going to incur a fairly substantial decrease in their currency. That is what network effects, that was what globalization, that's what digitization of delivery does. So you've had a lot of campuses and a lot of university leadership, many of whom I have heard from in no uncertain terms, calling me grossly negligent and reckless.
Scott [00:11:25] They have a vested interest in the status quo, because university leadership and a lot of tenured professors get by on this peanut butter-chocolate combination. If they're B+ or B- instructors, and they do A- or B+ research, once they no longer get any sorts of enrollments because the kids, if they're paying $7,000 a class, want to take the one person they think is best for calculus or brand strategy, and they are no longer really relevant as teachers, they'd best be doing A or A+ research, and a lot of them don't. This is a huge threat not only to universities, but to the faculty who, as a result, have kind of really held off technology. They haven't embraced it.
Kinsey [00:12:03] Well, we talk so much about how untenable the cost structure is for so many of these universities, how so many of them are going to go to the wayside, go out of business, because they won't be able to handle the next, quote, unquote, generation. This seems like a fairly obvious place to start cutting costs. Shouldn't we just get rid of the professors who aren't doing as good a work? I mean, would that make sense? Why hasn't that happened?
Scott [00:12:25] Well, you're speaking like a private sector CEO. I think, through a mix of self-aggrandizement, arrogance, and tenure, we as faculty have decided that we're very noble and we should raise our salaries faster than inflation. And there are a lot of adjuncts and clinicals who do a great job and are underpaid. But a lot of university administrators are making 3, 400, $500,000 in [indistinct] benefits. They have lifetime employment—tenure. We have social services for the underemployed, called food stamps and welfare. And we have social services for the overeducated, called tenure. And it's an immovable object.
Scott [00:13:01] They have literally legally guaranteed lifetime employment. You also have the [indistinct] of these campuses, where you have fixed costs. So it's very hard to cut costs. I think this reckoning is coming. I think it's overdue. I mean, think about—can you think of another product—the price is over $100,000 and the gross margins on it are 70, 80, 90%. That hasn't changed in 40 years. I mean, look at Ferrari. Look at some of the highest-margin products in the world. Look at a Ferrari. Look at an iPhone. The cars and the phones from 30 years ago are much different. If you walked into the majority of undergraduate classes across the majority of universities in America, you wouldn't know that you weren't in 1992. They really haven't changed a hell of a lot. What's changed? What's changed?
Scott [00:13:45] The person—the consumer—is paying four times the tuition. What's changed? Their parents are taking on unsustainable levels of debt that, by the way, they can't discharge even in bankruptcy. What's changed? Kids are getting married later. They're forming households later. They're less likely to start businesses because we threw, again, a mix of self-aggrandizement and arrogance, are comfortable with keeping class sizes the same, keeping our salaries increasing. And what does that translate? Massive debt on young people.
Scott [00:14:17] And we still like to believe that, oh, we make these strident statements that it's important we reopen the campus in the fall. No, it's not. It's important we don't spread the fucking virus. What's also important is we move back to the '80s and '90s, when the unremarkable son of a single mother immigrant, who lived and died a secretary, could get into UCLA—I, yours truly, because they had 40% acceptance rates. And they could take chances. They could take chances on unremarkable kids.
Scott [00:14:45] Now, they have no bandwidth to take chances on unremarkable kids. And unremarkable kids and unremarkable households don't have the confidence to borrow $400,000. Education used to be the upward lubricant of the middle class. Now it's just become a caste system. We need to dramatically rethink how we lower costs using a mix of big and small tech, university leadership has to get their head out of their asses and realize they're public servants, not luxury brands.
Scott [00:15:14] States have to fall back in love with the unremarkable and stop cutting funding to universities. We need an entirely different mindset around our approach to education. And we need to fall, as a country, we need to fall back in love with the unremarkables and give them access to a remarkable education at a decent price. We have totally lost the script around education and the wonderful role it can play in our society. Oh, my God, I sound so indignant. I sound so indignant.
Kinsey [00:15:43] [laughs] You don't sound indignant, Scott. You sound like you. And we will get more of that undeniable Scott wisdom in just a second. But first, a short break to hear from our partner. — And now back to the conversation with Scott Galloway.
Kinsey [00:15:57] Scott, I wonder if COVID-19 and maybe just the last six months or so in general, have in any way moved the needle in terms of these changes that we're talking about? These changes like decreasing prices and increasing access and falling back in love with the unremarkable. Has COVID-19 helped to progress these changes?
Scott [00:16:15] 100%. So it all comes from one—there's one fascinating chart, and Derek Thompson from The Atlantic introduced this to me. And that is if you look at ecommerce, basically ecommerce started getting its mojo in 2000, and every year, roughly speaking, since then, it's grown by one percentage point, and that is, every year another one percentage of total retail sales goes through digital channels. And standing in March of 2020, we had 18% of sales vis-a-vis digital channels, i.e., ecommerce. In 10 weeks, it went to 28%, and we're not going back.
Scott [00:16:46] So we had a decade acceleration in ecommerce in 10 weeks. And essentially that's happening across almost every industry. And a really basic strategy or process that I'm taking the companies I work with through, is take the two or three most dominant trends in your industry and just extrapolate them 10 years. That's where we are now. And the same thing is happening in universities, and that is we saw unsustainable levels of tuition increases.
Scott [00:17:12] We saw unsustainable levels of cost increases. We saw unsustainable levels of admittance rates declining. We saw unsustainable levels of dependence upon foreign students who pay full freight. We were letting in more and more and more foreign students because we like to think it's for diversity. That's bullshit. We let them in because they pay full freight. If you have 20% international students at a university, that means 40% of their cash flow is coming from international students.
Scott [00:17:40] All of these trends have rocketed 10 years. We knew universities were going to face a reckoning. Everyone was expecting it to happen in a decade. But COVID is really more of an accelerant than a change agent. So none of these trends were things we weren't expecting. We just were expecting to face them in the fall of 2030, not the fall of 2020. And universities aren't prepared.
Kinsey [00:18:03] I wonder what the lesser of two evils is here. Say that I am running a university. I have to either make a decision, to say students can come back on campus or to say we're going to try to charge you less for tuition, but it's going to be online. What's the best possible outcome from the two of those? I think about my alma mater, Washington and Lee. They're welcoming students back to campus for a shorter semester and no fall break under the guise that that will actually keep people from spreading the disease in a small town with no hospital capacity at all, basically.
Kinsey [00:18:35] So it's either that or it's we can't charge you. And maybe W&L is a bad example because they do have a pretty gigantic endowment. But maybe the two options are come back and you might make [laughs] everybody sick and it might turn out terribly or don't come back, but we'll have to charge you less. What do you pick?
Scott [00:18:55] So W&L—they're gonna be fine because of that endowment. And it's a good university. This is how the waterfall, or the destruction, plays out. And that is the tier one universities—the Harvards, the MITs, the Caltechs—they're fine. There 10, 20, maybe 30% of the kids don't show up. They just go into their massive waiting list. And the kid who got into Washington and Lee but was waitlisted at Penn, gets pulled up. And then Washington and Lee's fine.
Scott [00:19:22] They have to go much deeper into their waiting list, but they still have a big waiting list. They're fine. And then you turn to a tier three school—or tier two school—and I'm not going to make any names because every time I say name, I hear from thousands of people that I am not helping. And they turn to their waiting list and they don't have them. There are hundreds, if not thousands, of universities that have 80% admittance rates. They have no waiting list. And then overnight they're in massive financial stress. So this combination of tier two branding, high tuition, high dependence on international students' revenues, and low endowment—those are the comorbidities of death in COVID-19.
Scott [00:19:58] Now, what I think they should be doing is saying, look, this is going to be an impaired experience, but being honest with parents, and saying, we need your kid to stay home. And we realize it's a nuisance. And by the way, it's a free country. If you want to send your kid back to Lynchburg or to Madison and have them get their own apartment, fine. And maybe we even rope off the lawn for distancing, have some events, but we are not going to let them go into a class. Do you realize the class I teach in, and it's similar to almost every other classroom at colleges, the windows don't even open. They're sealed. They're sealed for temperature-controlled reasons. [chuckles]
Scott [00:20:34] So I think you have to have an honest conversation, close the campus, say to parents, this is gonna be a deeply impaired experience, but we need your support. We're going to cut tuition by 10, 30, 50%. A few have reduced tuition, but it's mostly been kind of just symbolic, not by amount. Lean on the alumni to step in. Lean on the states to step in. And not be the super-spreaders. I'm trying to work with Universal California on this issue. And my concept, or vision, if you will, is a grand bargain where we say to alumni and the government, give us 20% more funding. Step up here.
Scott [00:21:09] And in addition, we're going to embrace small and big tech such that we can reduce the cost per student of education delivered by 20%, which, if you do the math, lets us increase the number of seats we have by 50%. And we're going to reach further into households, middle class, and lower-income house households such that if you're just remarkable but not freakishly remarkable, you can now go to a great school.
Scott [00:21:32] Again, that's the opportunity here. And that's what I think we should be focused on.
Kinsey [00:21:36] Yeah. Period. Mic drop. And I have to say, we did a survey just asking people what exactly they took issue with campuses—not reopening, going online. And so many of them were, well, it's really hard to focus when I'm at home. Well, tough shit. [Scot laughs] Just get over it. [laughs] There are bigger fish to fry.
Scott [00:21:52] Start working on boring shit. [laughs]
Kinsey [00:21:55] Yeah, [laughs] exactly. And I mean, I get it. I would be disappointed for sure if I were 18 years old and somebody told me my freshman year wasn't going to happen the way that it was supposed to. And I know that, you know, empathy muscles work differently then. But, that said, achieving this hybrid model is important, it sounds like, obviously. And I want to figure out a little bit more how that happens. So talk to me about this idea of a big tech crossover with higher ed.
Scott [00:22:21] So I went to the [indistinct] School of Business for my MBA and I was a graduate student instructor for Christina Romer, who went on to be, I think, the chief economic adviser for Clinton. And she would do this big [indistinct] lecture with 400, 500 people in a room, very orchestrated. Outstanding lecturer. And then twice a week, the TAs, or the GSIs, we'd break into smaller groups of 20 and 30 people and mostly go through problem sets and answer questions, very interactive. And I would argue that big [indistinct] lecture could probably be done online with the right lighting, the right production values, incorporating using the medium.
Scott [00:22:59] Having guest speakers come in. Have Austan Goolsbee or Robert Reich Zoom-bomb in and say, I'm here to talk about a concept. You can do some amazing things with this medium that are impossible in person. And then maybe in person, we have the stuff that's more interactive. The term they use in academia is a flip classroom. And just taking, say, 30, 50% of it online takes the constrain of the campus itself, which has been used as the throttle, the governor of enrollments, it says at UCLA, we're not going to welcome 8,000 freshmen. We're gonna welcome 12,000.
Scott [00:23:36] And this is going to open up a ton of incredible upward mobility and opportunities for more households. And we're going to reduce the cost because the cost per student, we can start to decrease. So I think a mix of big and small tech and also falling out of love with being luxury brands. The head of Harvard admissions stated that he could have doubled the size of his freshman class without sacrificing any quality. I mean, at some point, they're just all remarkable. And the question is, well, with a $38 billion dollar endowment, why aren't you doing that, boss?
Kinsey [00:24:06] Right. Absolutely. But, Scott, I have a big follow-up on that, that will harken back a little bit to what we started this episode with, with this concept of acceptance as a ticket to success. We'll get to that in just a moment. But first, a short break to hear from our sponsor. —
Kinsey [00:24:22] And now back to the conversation with Scott Galloway. So, Scott, I want to try and reconcile here what you brought up at the beginning of this episode—that all it really takes in some cases is getting that acceptance. That's enough to put on your LinkedIn and become an attractive candidate for a job. If you get into one of these big name schools, one of these luxury good schools, how do we reconcile that with trying to expand access such that so many more people can put that on their LinkedIn? Can the two happen at the same time or do they detract from one another?
Scott [00:24:50] I know we're not there yet, but I do think we're going to end up—what's kind of the profile of a billionaire now? It's a kid who got into Harvard, dropped out, and then went to work for a hedge fund, and then started an internet company.
Scott [00:25:02] So I think you're going to start to see kids say, yeah, I got into the following five schools. That'll be a form of certification. I think there's gonna be microcertifications. Eric Schmidt is talking about a two-year [indistinct] bridge program, where you're focused on artificial intelligence or cybersecurity and has a direct pipeline into government jobs. We have different types of certification, we're a certification economy. So I think there's gonna be enormous opportunities. We're going to lose standardized testing. But I wouldn't be surprised when an entire new industry of testing pops up that says, OK, maybe didn't graduate from Caltech, but take the following tests. And if you can program Python, we'll give you the certification.
Scott [00:25:41] If Google got into the certification business, It would be a multi-billion-dollar business. If they said, we're going to test people on product management or STEM or programing or Python or Ruby Rails, or—I'm using '90s nomenclature here—I think a lot of people would take that certification very seriously. What we're gonna have to move to also—and there's so many angles we have to attack this with—is the heads of recruiting for the best corporations world are also going have to change their mindset.
Scott [00:26:07] Today, what they primarily—they've short circuited the hard work and they've said, I'm just going to only take people with four-year degrees. Not only am I only going to take people in four-year degrees, I'm only gonna take people with four-year degree from the top 1% of schools as ranked by U.S. News and World Report, or, if I'm the CEO of Goldman Sachs and I went to Hamilton, we'll also recruit at Hamilton. We'll recruit at Harvard, Yale, Stanford, Cal, and Hamilton because David Solomon, or D-Sol, as I like to call him, went to Hamilton.
Scott [00:26:36] So, we're gonna have to change the viewpoint of corporate America that there are outstanding kids out there that for one reason or another, didn't get the opportunity to go to an elite university.
Kinsey [00:26:47] But how do we do that? I mean, how do you—is it a complete undertaking to try to change the minds of every person who's doing the hiring in the United States right now?
Scott [00:26:58] Well, I think you're going to have to have other forms of certification and other programs. But I think the biggest corporations in the world, who like to think of themselves as serving their stakeholders, need to figure out, with the help of other organizations—and again, it goes back to certification—is there a career path for people other than the traditional four-year elite university career path? Are we comfortable with a society—it's just awesome to be in the top 1% in this country. The top 1% in this country live a better life than anywhere in the world. And we're so in love with the top 1% that we keep deciding to cut their taxes and give them more opportunities. And where that all starts is this elite education.
Scott [00:27:40] And we need corporations who kind of set the tone here. A kid coming out of MIT can make $100,000 to $140,000 his or her first year out of MIT. That's sets a trajectory in terms of your savings, opportunities—and you get to go to work for Google. MIT, Google—by the time you're 30, you're making $300,000 a year. You know, Alabama Community College—junior college. You're lucky if you're making $50,000. And you've got to think, all right, might there be people in each of those groups that look, smell, and feel like each other but just haven't had the opportunities?
Scott [00:28:16] So into that void, we need to [indistinct] government, we need to see a change in the viewpoint of recruiters. We probably need to shift our mindset that the only means of a decent future isn't going to college. We probably need more vocational schools, similar to what they do in Germany. And the thing about COVID is it's just—we had an unhealthy economy 10 weeks ago. Now we have a dystopia. What universities or education systems have been absolutely hit the hardest? Hit the hardest?
Scott [00:28:43] The vocational programs. Who goes to vocational programs? Kids from middle- and lower-income schools because you can sort of communicate brand strategy over Zoom, but you can't help someone place a syringe using Microsoft Team. So nursing schools are getting hit hard. Welding schools. Schools we go to to learn how to be an electrician. This shit's getting just kicked so hard in the gut. And what do you know? Those are the schools that have been tremendous upward mobility for lower- and middle-income kids.
Scott [00:29:12] We have literally gone from an economy with very unhealthy trends around income inequality, around racial discrimination. And we have woken up in a fucking dystopia. And if we don't get on a war footing here and say, OK, we have to self-correct like crazy, we really have to rethink education, we have to think about income mobility. We are going to have to really, you know, paddle the patient here. We are overnight in Blade Runner, Hunger Games or, well, whatever you want to call it. But all of the really unhealthy trends have extended dramatically out. And it is frightening.
Kinsey [00:29:48] Yeah. And I think it's worth taking a second just to recognize the long-term implications of all of these things. I mean, it's not like we have the conversation about higher ed and it ends. It's over. There is a domino effect here and education impacts just about everything. So, Scott, thank you so much for coming back on Business Casual. Amazing, as always. I always love having these conversations with you.
Scott [00:30:08] Can I go nuts on something happy? Because I feel like I've been really cynical and I'm a dropping a lot of f-bombs. So the pandemic, Kinsey, I think there is a meaningful opportunity and a profound opportunity. And I think the meaningful opportunity is if you are in a position where you can work from home, I think this is a period where you want to lap the competition. I'm a big believer in variance. When other people aren't working, you should be working. And there's an opportunity to lap the competition. That's the meaningful opportunity.
Scott [00:30:35] I think a profound opportunity in all of this, though, is, Lenin has this great quote: Often decades. Nothing will happen in decades, and then sometimes decades can happen in weeks. And I think we're in one of those periods where decades are happening in weeks. And I think there's a really profound opportunity for the repair and cementing of key relationships. I think this is a tremendous opportunity to move to a caregiver role for your parents. I think it's an opportunity to re-evaluate your relationship with your siblings, to ask yourself if something were to happen and you would have to, you know, tragically say goodbye to someone over FaceTime, is your relationship where you want it to be?
Scott [00:31:13] I think it's an opportunity to reach out to friends who, maybe because of perceived slights or competitive bullshit or [indistinct] great friendships, but I think if you can show that kind of generosity and grace in this crisis—and this is the crisis of our generation—there's an opportunity to strengthen and cement relationships in weeks what might otherwise take decades. So I think there's a meaningful, opportunity professionally, but I think there's a profound opportunity with respect to the repair and cementing of key relationships.
Kinsey [00:31:43] I love it. And I hope that everybody will walk away thinking about that too—that this is more than just a business opportunity. Let's actually use it. Never let a good crisis go to waste. Scott, thank you for coming back on Business Casual.
Scott [00:31:56] Thank you.
Kinsey [00:32:03] Thank you so much for listening to this episode of Business Casual. Like I mentioned, Scott was the very first guest on this show, almost a year and four-plus million listens later, we've put out some really cool content, if I do say so myself. So if you're new here, go check out some of our earlier episodes, like Scott's from September or LinkedIn chief economist Karin Kimbrough from June. Maybe even venture capitalist Ben Sun from last fall. Just a couple suggestions. Thanks for listening, and see you next time. [sound of a ding]