Scott Galloway
Scott Galloway has been more honest about money — how he made it, how he lost it, how he still worries about it despite having plenty — than almost anyone else who has appeared on My First Million. That honesty is his competitive advantage.
The Algebra of Wealth
Galloway’s formula is simple: focus times stoicism times time times diversification. The book built around it — The Algebra of Wealth — hit number one on Amazon on its launch day. He told Sam and Shaan about it in a tone that was equal parts pride and self-awareness: “I’m addicted to strangers’ affirmation, which is kind of pathetic at my age.”
The formula’s most useful piece is the stoicism variable, which Galloway defines functionally: life is not about what happens to you — you can’t control that — but you can control how you respond.
He struggles with this personally. He admits it. He once said something that didn’t come out right at a book event, went home, lay in bed unable to stop thinking about it even though the event had gone well. He’s been off Twitter for nine months because five or six weekends had started with something he read there and ended badly.
“When you’re down, it’s more about the chemistry in your head than any legitimate reason to be down.”
Follow Your Talent, Not Your Passion
Galloway’s most cited advice contradicts what successful people usually tell young audiences.
“The sexier the business, the lower the return on investment.” SAG-AFTRA represents the most talented actors in the world — 182,000 of them — and 87% don’t qualify for health insurance because they make less than $23,000 a year. The people telling you to follow your passion are already rich. They followed their talent and got lucky, then retrofitted a passion narrative.
His alternative: find what you could be genuinely good at, commit to developing mastery in it, and let the passion follow. “If you can develop mastery in anything that has a 90-plus-percent employment rate — the economic security, the camaraderie, the prestige, just the sheer joy of mastery will make you passionate about whatever it is.”
His own path: investment banking (terrible at it), business school, brand strategy firm Prophet (grew to a couple hundred people, sold for $33 million), activist investing (interesting, not particularly skilled), NYU marketing professor (stayed), L2 (the big win).
Engineering L2 Around an Exit
Galloway was calculating about L2 in a way that made Sam’s jaw drop. He had read a Deloitte study identifying the common features of companies that sell in the top decile of their sector: they own a niche, they have recurring revenue, technology is at their core, they’re international, they have defensive IP.
So he built L2 around that blueprint. London office opened immediately. Instead of consulting fees, he charged a quarter million dollars a year and answered brands’ toughest questions using proprietary data. He focused on luxury and consumer brands. He raised $17 million to collect more data than anyone in the world on his chosen topics, so the inevitable analytics skeptic couldn’t argue with the numbers.
He described the culture to Sam: “If you’re looking for balance, this isn’t that place.”
L2 sold for $160 million in 2017 — eight times revenue. The timing was good: he got swept into what he believes will be remembered as the greatest extended bull market in history (2008 to the present). He’s explicit that luck was involved. He’s also explicit that you have to have your sails up to catch the wind.
Losing It All, Twice
Galloway started an e-commerce company — wanted to be the Walmart of pet supplies. Invested a million, got a million and a half back. Started Red Envelope, a gifts company that went public on NASDAQ in 2002.
He got into a fight with the board, did a proxy fight, took over the board, put more of his own money in. Then 2008 arrived. There was a UPS strike. A software malfunction sent 10,000 gifts to the wrong addresses over the holidays. A Wells Fargo analyst pulled the credit line. The stock went from seven dollars to zero in eleven days. The company declared chapter 11. Galloway lost nearly everything.
The recovery was possible, he says, because he never had debt and always lived below his means. He was able to start again. L2 came out of that restart.
His advice: put a statute of limitations on anything bad that happens to you. A business that goes under — mourn for two or three months, then get back to sending emails and meeting people. “Time goes really fast and your skills atrophy and it’s a downward spiral.”
Churchill’s line: the key to success is the ability to move through failure without losing your sense of enthusiasm.
Still Financially Anxious
Perhaps the most surprising thing Galloway reveals on the show: he’s worth more than $100 million and still worries about money constantly.
“I sleep with one eye open.”
He’s given away every dollar of current income for five years, trying to catch up to the non-philanthropic Scott from the first 45 years of his life. He still tries to make a lot of money. He still feels insecure. When Sam admitted the same thing — walking away from a $20 million exit at 31 and still feeling anxious — Galloway responded: “When you talk about being worth $100 million-plus and not feeling secure — I have the same thing.”
His theory: not talking about money is promoted by wealthy people so that the middle class doesn’t understand how the system actually works — who pays 45% taxes versus 17%, and why. Transparency about money is, in his framing, a form of honesty that has political implications.
Communication as Craft
Sam called Galloway one of the best communicators he’s encountered. Galloway’s response revealed his method: a kitchen cabinet of people he wants to mimic. He reads carefully, writes down phrases that land, builds a bank of language.
He reads Daniel Kahneman’s Thinking, Fast and Slow multiple times. He reads Sapiens multiple times. “If you’re reading something and you don’t take away things you’ll remember, you haven’t really read it.”
He is inspired by George Carlin, Madeleine Albright, Muhammad Ali. “Build a kitchen cabinet of people you want to mimic.”
Sam had created a ChatGPT trained on 150 of Galloway’s blog posts to generate phrase ideas. Galloway’s phrase bank includes things like: “Greatness is in the agency of others.” His signature: “Life is Rich.”
Sam tried to compete with his own swipe file — a few sharp phrases. Galloway’s response: “I love those. You win, by the way. I’m putting away my phrase book.”
He was not putting away his phrase book.