The Prof G Pod with Scott Galloway
00:00:00 · Scott Galloway, Ed Elson
[00:00:00] S0: Support for the show comes from Apollo. Whether it's funding growth, modernizing operations, or strengthening their balance sheet, CEOs and CFOs need more than capital. They need a financing partner with the scale, flexibility, and certainty to help them execute. Apollo provides access to long duration capital and a broad range of financing capabilities, helping companies develop customized financing solutions designed at an efficient cost of capital. Learn more at apollo.com/capital. Support for the show comes from Brex. If your best finance people are doing expense reports, chasing receipts, or grinding through month end close, it's time to get Brex AF, agentic finance that eliminates that work before it starts. Learn more at brex.com/af. That's brex.com/af. [00:00:54] S1: Scott, you started an ecommerce company in the .com era. What would be your advice to founders building in the hottest sector right now, specifically AI?
00:00:54 · Ed Elson, Scott Galloway
[00:00:54] S1: Scott, you started an ecommerce company in the .com era. What would be your advice to founders building in the hottest sector right now, specifically AI? [00:01:03] S0: The market's frothy. If you have a good idea and it has anything to do with AI, you're gonna be able to raise a ton of capital. When capital's cheap, take advantage of it. Raise a shit ton of capital, but don't don't make the mistake of believing that because you raised a lot of capital and that you're supposed to... Your company is worth a lot that it's actually worth that. Take a real disciplined approach to spending. Whenever I've raised a ton of capital cheaply, that company oftentimes struggled. Your ability to raise capital says something about your business, but it's not the full story. So if the market's right, access the market, raise as much as you can, over raise, but at the same time, call on a different side of your brain and throw nickels around like they're manhole covers. And, you know, spend money, but be really judicious because, just because you can raise a lot of money doesn't doesn't mean your company deserves it. [00:01:51] S1: What was your approach to spending when you were building Red Envelope?
00:01:54 · Scott Galloway
[00:01:54] S0: I've always been very scrappy. We were very penny wise and probably pound foolish. And then we raised, I don't know, $20.30, and then 60,000,000 from Sequoia and Western Presidio and all these brand name VCs, and we started spending money like drunk sailors. Don't I think, you know, that... It just... There's a cycle here. You're in something hot. Every VC is gonna try and encourage you to go faster until you run out of money, at which point they'll come in and cram you down. So I would resist the temptation to spend aggressively. It's really nice to have a lot of money in the bank. If you find a customer acquisition channel that is really paying off, then, yeah, put the hammer down and hire people and, you know, make some investments. But I I just can't tell you how many times I have seen people who, because they access a ton of capital, they think they should spend it, and they think that they're gonna be able to get a good return on it. Because keep in mind, when you're raising a lot of capital, it means other entrepreneurs are raising a lot of capital, which means customer acquisition costs are going up. The price for employees is going up. So I think it's just better to on the side of not spending enough as opposed to spending too much. A lot of people disagree with me. When capital's cheap, you know, make some mistakes, spill some capital. That's fine. I'm on the board of a couple of these companies right now. They're just spending too much money, and everyone's in consensual hallucination that because the category is hot, it means that, you know, we should spend aggressively. I'm like, spend aggressively when there's metrics that justify So, anyways, raise as much as you can, but spend as if you're probably not going to be able to raise again.
00:03:31 · Ed Elson, Gabe Stengel
[00:03:31] S1: Welcome to First Time Founders. It's been eighteen months since ChatGPT launched, and the market's still going crazy for AI. At the same time, though, workers are anxious. From lawyers to accountants to writers to artists, AI threatens to replace replace them. In fact, one third of American professionals fear that AI companies will make their job obsolete. My next guest might have started one of those companies. After working hundred hour weeks in investment banking, he realized that much of the work he was doing could be done by AI. So three years ago, he built one. His AI model can analyze earnings, assess transcripts, create decks. In essence, it's your own personal analyst. And even more remarkable, some of the biggest banks in the world are already using it. This is my conversation with Gabe Stengel, founder and CEO of Rogo. Welcome. How are you feeling? [00:04:33] S2: Good. Thank you for having me. [00:04:35] S1: This is your first podcast. Right? [00:04:36] S2: It's my first podcast ever. [00:04:38] S1: And you recently had a Business Insider profile. Do you feel, kind of famous now? [00:04:44] S2: You know, it's getting to me. It's getting to me.
00:04:44 · Gabe Stengel, Ed Elson
[00:04:44] S2: You know, it's getting to me. It's getting to me. [00:04:47] S1: We'll see. We should be clear. I've been friends with you for about, I think, six, maybe seven years. And I've been looking for the right moment to do this. And I think now is the right time. I mean, you just announced a $7,000,000 seed round. You've officially launched commercially. You're now serving some of the biggest hedge funds and some of the biggest banks in the world. And your company is now doing what I think a lot of bankers speculated and feared it might do, and that is it's it's doing their job. Just as an example, I use Rogo, and I'll ask it to compare the price to earnings multiples of the biggest social media companies, and it pulls it right up. You could ask it what are CEOs saying about AI and the implementation of AI at x y z company. It pulls it up, and it will deliver the answers with footnotes from SEC filings, from investor presentations, transcripts, etcetera. So I just wanna start with the question that I think most of Wall Street would wanna ask you, which is, is AI going to replace bankers? [00:05:58] S2: No. I think bankers would actually be happy if if it could replace a lot of the PowerPoint and Excel work that they do. But the reality is that we're a long way away from from full automation. And we're a helpful tool. We make people smarter. We make gathering materials quicker. We make putting together PowerPoints and research memos a little bit more efficient. We're not replacing anyone.
00:05:58 · Gabe Stengel, Ed Elson
[00:05:58] S2: No. I think bankers would actually be happy if if it could replace a lot of the PowerPoint and Excel work that they do. But the reality is that we're a long way away from from full automation. And we're a helpful tool. We make people smarter. We make gathering materials quicker. We make putting together PowerPoints and research memos a little bit more efficient. We're not replacing anyone. [00:06:20] S1: Are you sure that a banker should believe you when you make that statement? I mean, tell me more about why you're not replacing anyone. Yeah. Because it feels We're replacing the word of you.