Humanoid Robots, Building a Service Business, and Why CEOs Won’t Save Democracy

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Speaker 2 Welcome to Office Hours of Prop G. This is the part of the show where we answer your questions about business, big tech, entrepreneurship, and whatever else is on your mind.

Speaker 2 If you'd like to submit a question for next time, you can send a voice recording to officehours at profgymedia.com. Again, that's officehours at propgmedia.com.

Speaker 2 Or post your question on the Scott Galloway subreddit, and we just might feature it in our next episode. First question.

Speaker 3 Hey, Prof G, Franco calling in from Madrid, Spain. I'd love to get your take on the humanoid robotics market.
There's been a lot of movement lately.

Speaker 3 Tesla pushing with Optimus and VCs pouring money into players like Figure AI and Unitree in China. The technology seems to be advancing fast with AI.

Speaker 3 But what do you think it'll take for humanoids to move from controlled environments into truly production-ready autonomous tech?

Speaker 3 And do you see this becoming a real business within the decade or more like another moonshot like autonomous vehicles? Huge fan of you and all the ProvG shows. Thanks for all you do.

Speaker 2 Morgan Stanley projects this could be a $5 trillion market by 2050 with roughly 1 billion humanoid units in use. In other words, that's them saying they have no fucking idea.

Speaker 2 By 2050, by 2050, we could collide into Pluto. I don't, I love these things.
They're like, in 20 years, it could be a $1 trillion.

Speaker 2 I mean, the analyst writing that is going to be dead probably in 20 years. So who cares?

Speaker 2 They see adoption ramping up slowly until the mid-2030s and accelerating as costs fall and AI capabilities catch up.

Speaker 2 Goldman is more conservative. They estimate the humanoid market will reach $38 billion by 2035, with roughly 1.4 million robots shipped once.
Hardware costs decline about 40%.

Speaker 2 For context, there are already more than 4.5 million industrial robots operating today, and that base grew 9% last year. So the broad automation trend line is strong.

Speaker 2 Component makers are also gearing up. ID TechX expects a 14X expansion in humanoid parts and sensors within the decade, roughly a $10 billion market just for the guts of these machines.

Speaker 2 On the funding side, venture money is also pouring in.

Speaker 2 China has taken the lead here. Unitry's low-priced models and government-backed manufacturing giving an edge over U.S.
rivals, at least for now.

Speaker 2 And then with respect to Tesla and their Optimus, Musk has said that Tesla could start selling Optimus by the end of 2025, even talking about thousands of units next year.

Speaker 2 In some, he's full of shit. I don't even know he's full of shit.
I know he's not full of shit here. I don't think he's ever.

Speaker 2 Weren't we supposed to have a million autonomous taxis by like 2021 or 2018? Elon Musk is engaging in this ultimate weapon of mass distraction.

Speaker 2 Don't look at the fact that I have the most valuable automobile company in the world, and yet my automobile company is declining, is eroding revenues faster than any automobile company in the world.

Speaker 2 And I'm getting my lunch eaten by everybody, including BYD, which produces a Tesla-like vehicle at about 40% of the price.

Speaker 2 So I'm going to do all these jazz hands and say, look over here, robots, Robovin, XAI, Spade.

Speaker 2 Look anywhere, but at the fact I'm wrapping steel around an engine or a battery and i'm trading and i'm worth more than every automobile company in the world which makes no fucking sense so he's trying to say anything to give people the illusion of distraction that it'll be something else anyways back to robots most analysts expect real commercial traction before 2035 primarily in warehouses logistics and manufacturing but not in our living rooms the trillion dollar promise is still decades out but within the next 10 years we'll likely see humanoids doing repetitive labor in structure environments my viewpoint on this as someone who doesn't know the space very well is the following.

Speaker 2 I think in B2B, it's going to exceed expectations. I think in B2C, it's going to fall well short of expectations.
I don't think people want to. I don't like having a nanny in my house.
I just don't.

Speaker 2 And the idea of a robot having any sort of context or nuance to go get me my tea and cookies, maybe, I don't know. But

Speaker 2 if you look at these data centers, if you look at some of the factories, the

Speaker 2 Ford Advanced Manufacturing Factories in China, they say they don't even turn the lights on because there's no humans in them. So I think them

Speaker 2 roaming around the house, I don't know, maybe they'll take your dog for a walk. I don't know, maybe those things that deliver your food.
I don't think it's going to work.

Speaker 2 I think there's going to be a lot of military applications. They're going to be fucking frightening in space age, but they'll be very effective.

Speaker 2 But the idea that we're going to have robots watching our dogs and hanging out with us and bringing us our dinner, yeah, I just don't. I don't think so.
Anyways, that's my view.

Speaker 2 Question number two:

Speaker 4 Hey, Prof G.

Speaker 4 I'm 20 years old, living in Vancouver, Canada, and I'm currently three quarters of the way through an electrical apprenticeship.

Speaker 4 Because the trades pay so well, about a year and a half ago, I was able to buy a condo and utilize it as an investment property.

Speaker 4 Currently, I'm in the process of starting my own electrical company while I'm still an apprentice so I can be up and running and ready for business when I finally get my license in about a year.

Speaker 4 Do you have any tips on how to run a services-driven business and how to differentiate from all the other other businesses that are around?

Speaker 4 Additionally, what advice do you have for a young entrepreneur slash landlord who doesn't want his 20s to pass him by by growing up too early?

Speaker 4 It's worth noting that although I don't drink or do drugs, I took the money that I would have spent on nights out partying and bought a speedboat with it. Thank you for all the content you put out.

Speaker 4 Connor from Canada.

Speaker 2 I like the speedboat part. Okay.

Speaker 2 The point of differentiation between a product business or a product-based or a manufacturing-based business, we have a physical thing you can touch, and a services-based business is one word, relationships.

Speaker 2 I have run services-based businesses my whole life.

Speaker 2 I started a strategy firm when I was 26 called Profit.

Speaker 2 And the last firm I sold was a firm called L2, which was basically another, we called it Business Intelligence, which is just a fancy word for strategy. Those companies are based on relationships.

Speaker 2 And the reason why Profit did well was I had a strong relationship with the CEOs or the CMOs of Levi's, William Sonoma, Dreyers. These were my first clients.
And it was sort of everything.

Speaker 2 And because there's a lot of good firms out there doing good work, but they want to work with people that they like. They feel

Speaker 2 my advantage was I was 26 and I developed sort of these proxy big brother, little brother, father-son relationships with people who wanted to help me and liked me and thought I was smart.

Speaker 2 And you have to do good work. That's table stakes.
But then it's all about relationships.

Speaker 2 And it's no accident that in the advertising or the consulting business, the people tend to be very good looking and very charming.

Speaker 2 So the first thing is you have to be very social, get out there and have the ability to establish relationships with clients in the services industry. That's just kind of everything.

Speaker 2 The second is a product-based company is about obviously people and engineers, but it's a lot about your IP and distribution and capital you raise.

Speaker 2 Services business is really the team of the best players wins. So as the head of a services company, you are constantly thinking about recruiting.
And that is, you meet someone who's smart and good.

Speaker 2 What do you do? Would you be interested in coming to work with me?

Speaker 2 And then, if you are fortunate enough, if you get your first six or 10 people, if there's two or three, hopefully, that are really good, you give them one, three, five, 10% of the company, and you say, you're a partner in this business now, and I need you to do really well.

Speaker 2 But I made sure that all of these people felt like they were owners in the business.

Speaker 2 Because if you're fortunate to find someone who's really good, that's everything, because their ability to really wow the client and build strong relationships is everything.

Speaker 2 So, one, you have to be very good at establishing relationships and spending a lot of time fostering those relationships.

Speaker 2 Two, you really do need to think a lot about finding that initial team of really outstanding people. That's what a services company lives and dies on, full stop.
And then

Speaker 2 what else would I say about the services business? I'll give you the upsides. It doesn't take a lot of capital.
You make good money. It's an incredible training.
I'll give you the downsides.

Speaker 2 It's really tough on your relationships. It's very demanding.
It is hard to make money in your sleep. I used to get on when I was running profit.
I used to get on.

Speaker 2 Audi was like one of our biggest clients. He used to get on a plane from fucking San Francisco to Munich and then get in a car and drive to Ingolstadt, which is the armpit of Central Europe.

Speaker 2 And then do a meeting the next day and try and convince them that the Audi brand identity should be the modern art of motion. I came up with that and I thought it was great.

Speaker 2 And then they would tell me there's no real word for modern art or motion in German. And I'd have to fly back and say, I'm just going to hit the drawing board again.

Speaker 2 And on the way over, I would literally be in the back of the galley of the coach section because it was my company.

Speaker 2 We didn't have any money with a bunch of kids trying to pull together slides and then figure out where the Kinkos was in Munich. This was, I'm dating myself to go print out.

Speaker 2 I mean, it was just so fucking stressful. Oh, God.

Speaker 2 Literally getting hard palpitations just thinking about it. Ton of stress, really hard on your relationships.
And that's why I sold my first room. I wanted out.
I was sick of managing people.

Speaker 2 I was sick of managing clients. I found, and Jesus Christ, I'm getting a headache just thinking about it.

Speaker 2 So real upsides, real downsides. But again, just to summarize, you got to be social, got to have the ability to create really strong relationships.
Got to overserve your first three clients.

Speaker 2 They need to be evangelists for you. I mean, they just got to feel like you do anything for them.

Speaker 2 You would jump on a grenade for them because You want them to be evangelists for you. Those first three or five clients are kind of everything.

Speaker 2 Spend a lot of time trying to get to three or four outstanding people, then give them big chunks of the firm such that they won't go anywhere.

Speaker 2 The only way to get people to act like owners is to make them owners and also recognize the upsides and downsides of what it means to be in a services business.

Speaker 2 Go Canada!

Speaker 2 Thanks for the question.

Speaker 2 We'll be right back after a quick break.

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Speaker 2 Welcome back onto our final question, which comes from Reddit.

Speaker 1 User sincerely true asks, hi, Scott. I recently finished Why Nations Fail, and there's a section on preventing authoritarianism.

Speaker 2 They recommend mobilizing a broad segment of society, including unions, churches, and business organizations.

Speaker 2 How can the Democratic Party or other movements better mobilize business organizations and leaders in the fight for democracy when so many have backed Trump? Oh, God, I wish I knew.

Speaker 2 I have been shocked at how little resistance and pushback there's been from the corporate world.

Speaker 2 And I'm not sure you're going to find it from corporations because in America, it is so tempting to just try and get from a million and worth to 3 million to 5 million, from 1 billion to a billion.

Speaker 2 America is just all pretty much about how much stuff you have because how much stuff you have is really the health care you can provide yourself and your children, the opportunities you can provide your children, how hot or not hot your husband or your wife is, how interesting of parties, how nice of vacations.

Speaker 2 The market has become so stratified. When I was a kid, my dad's boss had a slightly bigger house, but kind of lived in the same neighborhood and we all were at the same summer club or country club.

Speaker 2 He had...

Speaker 2 You know, he had a Ford Thunderbird. My dad had a Grand Torino.
I mean, it's a slightly better life, but it was in striking distance. Now,

Speaker 2 you know, people who don't make a lot of of money are flying spirit airlines and watching drunk people physically abuse each other and then having to de-plane while everyone

Speaker 2 while this guy gets escorted off by airport security.

Speaker 2 And really rich people get to fly on a Gulfstream 650 where they can watch Netflix and do FaceTime on the plane and have some really hot dude bringing them mimosas on the plane.

Speaker 2 And oh, if they're 30 minutes late because they want to grab an additional 30 minutes with their kid over dinner, they just text their pilot.

Speaker 2 I mean, the delta between what it means to be middle class and what it means to be rich in this country has gone from

Speaker 2 three inches to fucking

Speaker 2 2 million miles. And so the incentives to make the incremental decisions to become wealthy are just so incredibly dramatic.

Speaker 2 And one of the best ways to get wealthy right now is to play into the authoritarian's handbook.

Speaker 2 People start showing up with golden Kergrave tacky trophies and saying, I love spending time with Melania. Jesus Christ, Tim Cook, what a fucking coward you are.
Literally, what a coward you are.

Speaker 2 Right up there with Bob Iger, literally, Neville Chamberlain in a cashmere sweater, minus the dignity. All these people bending a knee.
And why do they do it?

Speaker 2 Because they feel a lot of responsibility. They're fiduciaries for their shareholders, and the temptations to make more money are so huge.

Speaker 2 And Trump, to his authoritarian credit, has created a bright blue line path between kissing his ass and ignoring democracy and not engaging in capitalism and engaging in cronyism because you will get richer.

Speaker 2 Right. So these guys, if we're waiting on the better angels of companies, of CEOs to show up, don't hold your breath.

Speaker 2 You know, Sam Altman, all these fucking douchebags showing up and bending a knee so they can get richer, so they can get their 8 billion instead, you know, from 7 billion.

Speaker 2 I've been hugely disappointed. What can they do? I don't know.
I don't think it's up to them. I think it's up to us.
I think 7 million people showing up for a protest is important.

Speaker 2 I think voting is really important.

Speaker 2 I am moving back to the United States early because I want to be in the fight. How am I going to be in the fight?

Speaker 2 I am going to use my social media platforms and this platform and my writing to try and inform people around what I think is going on, why I think it is wrong, and methods for pushback.

Speaker 2 I think donating money to candidates, I'm going to try and...

Speaker 2 Bring a bunch of candidates on my other podcast, Raging Moderates, to elevate their profile. I'm going to give some money.
I'm going to do a tour and try and bring attention to

Speaker 2 Democratic candidates for Congress. I don't think we can rely on the better angels of companies.
I think it has to be voters. I think it has to be citizens.
I think it has to be protest.

Speaker 2 I think it has to be talking to your friends about what's wrong with this.

Speaker 2 I think it has to be, I'd like the idea of a national economic strike where people stop buying shit on a certain day or targeting certain companies with specific ass.

Speaker 2 So I think there are things we can do, but I think waiting on the better angels of CEOs, don't hold your breath. It never fucking happens.

Speaker 2 We're always hoping that Cheryl Sandberg is different because she cares about gender balance. She wrote a book about it.

Speaker 2 Despite the fact she came up with a business model to encourage teenage girls to start cutting themselves, she cares. She cares.
And then it was Sam Altman with his hush tones. His hush tones.

Speaker 2 These are fears we worry about. Thank you, Senator, for the question.
Fuck you. With your synthetic relationships and deciding that porn's okay.

Speaker 2 By the way, the collision of porn and synthetic relationships for young men is a disaster waiting to happen.

Speaker 2 What happens when a 15-year-old boy approaches a girl at the cool kids table and gets rebuffed? And there's a word for that.

Speaker 2 It's called being a 15-year-old boy and decides, you know what, I have this incredible synthetic AI brought to be my Musk or Sam Altman that will...

Speaker 2 perform erotic acts for me and tell me I'm great and it's funny and knows exactly how to keep me glued to my computer.

Speaker 2 And before I know it, I lose all mojo to talk to strange women or spend money trying to take a woman to movies. I don't talk to my dad.
I don't talk to my sister.

Speaker 2 And I wake up fucking 30 years old in a basement playing video game, obese and anxious. That is literally where we're headed.

Speaker 5 Too much?

Speaker 2 Too much? So I think it's more vocal pushback. But boss, if we're waiting on corporations,

Speaker 2 the Army isn't showing up. Next with a question.

Speaker 2 That's all for this episode. If you'd like to submit a question, please email a voice recording to officehours at profitmedia.com.
Again, that's officehours at propgmedia.com.

Speaker 2 Or if you prefer to ask on a Reddit, just post your question on the Scott Galloway subreddit, and we just might feature it in an upcoming episode.

Speaker 2 This episode was produced by Jennifer Sanchez. Our assistant producer is Laura Jannair.
Jew Burrus is our technical director. Thank you for listening to the Props GPod from Propsy Media.

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