Authors in August: Mark Penn Looks Into His "Microtrends" Crystal Ball

Motley Fool co-founder David Gardner is wrapping up the Rule Breaker Investing podcast's Authors in August theme with a nonfiction bang: Mark Penn, the author of 2007's Microtrends: The Small Forces Driving the Big Disruptions Today and this year's update, Microtrends Squared. Penn's non-writing resume includes stints as the chief strategy officer at Microsoft, CEO of the public relations firm Burson-Marsteller Worldwide, chairman of The Harris Poll, and a key campaign advisor to both President Bill Clinton and U.K. Prime Minister Tony Blair.

The two discuss the concept of microtrends, and dig into some that are changing how we approach everything from business and investing to public policy and our personal lives.

A full transcript follows the video.

10 stocks we like better than WalmartWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, the Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of August 6, 2018The author(s) may have a position in any stocks mentioned.

This video was recorded on Aug. 16, 2018.

David Gardner: Welcome back to Rule Breaker Investing! I'm David Gardner and I'm very pleased to have you with me this week and really all month long.

What a fun month it's been for me and I know for you because anytime you get to have the following authors in a row as listeners from one week to the next [Seth Godin, Priya Parker, Amor Towles, and then this week Mark Penn], it is our Authors in August month.

And it has been a tremendously insightful month, whether you're talking about Seth Godin's insights on how to do marketing and really business better, or Priya Parker teaching us how to think intentionally about how to make all those gatherings in our lives [whether business meetings, or one-on-one in a conference room, right through to whatever's the next wedding you attend or even plan], we can all do that better.

And then Amor Towles, the talented novelist. How to think about the creative process, especially from somebody who's transitioned from Wall Street full time to become a successful novelist.

And Mark Penn, this week's author, absolutely can appear right on that same Mount Rushmore we're building with all of the authors in August for Rule Breaker Investing. Mark's background as somebody who's been a pollster, a businessperson whose understood marketing and thinking about cultural trends precedes him.

You'll hear his background as I introduce him in a little while, but his book Microtrends [Squared] is so helpful for me as an investor and as a businessman because Mark is identifying small trends that are just in their early stages, now, and as they play out over the next 10 years, you and I, placing our bets accordingly, sometimes can do really well.

I'll give a quick example. 10 years ago in his previous book Microtrends, Mark was writing about The Internet Married and how the internet was becoming more and more popular for dating. Well, in the meantime I'm really happy to say a lot of Motley Fool Stock Advisor members have purchased Match Group, a stock I've talked about on this podcast before.

That is a great example of using a microtrend that seemed crazy at the time [the idea that we would meet other people and actually marry them first from an online site]. Well, that is fairly common practice today and I'm sure we'll be discussing that with Mark. There are things in Microtrends Squared, his new book that you and I should be paying attention to, and if we do, we'll start making pretty good predictions about where the world is headed over the next 10 years. So I'm excited to have Mark join [us].

And before I introduce him, two things I want to say real quick up front. Since this is a taped interview we did a few days ago, I should make a brief mention, before we get started, that the sound quality off of a cellphone isn't the best that we've ever had on Rule Breaker Investing, so if you have a choice this week to listen in a quieter vs. a noisier environment, I'd choose the quieter one. Our favorite place, of course, to do an interview will always be in our home field right here at Fool HQ studios, but sometimes to get esteemed authors and CEOs, etc., we're going to put up with occasional cellphone quirks.

And second, I'm excited to announce ahead of time I have an extra for you this weekend. Mark graciously hung with me to do a weekend extra, so we're going to cover a lot of the microtrends he covers in his book, but we're going to park two broad categories [Health and Diet, and Politics] and introduce them into the extra this coming weekend, so we'll be focused on all the other good stuff in this week's show. Without further ado, let's get started!


Gardner: Well, I'm really pleased to be joined by Mark Penn. Mark has many honorifics over the course of his life. I will abbreviate to just a few that jump right out at me. Mark has been the CEO of Burson-Marsteller Worldwide, the communications and PR firm. He was chief strategy officer at Microsoft [many roles at Microsoft] reporting to Bill Gates, I'm assuming, Mark.

Mark Penn: Steve Ballmer.

Gardner: Steve Ballmer. There you go. You were through a couple of eras, there. In 1996 you were chief advisor to elect Bill Clinton and you've also advised Tony Blair in the U.K. election. It was in 2005, I think.

Penn: I'm the last successful liberal consultant.

Gardner: There you go. And finally you were chairman of Harris Poll. You've made a career in polling, marketing, advertising, and strategy and you're also managing partner at The Stagwell Group, which I believe you founded. Mark, it's a pleasure to have you on this podcast!

Penn: Thank you!

Gardner: I loved your book. Like every book that I ever feature on this podcast I've read it all the way through, myself, and I highly recommend it to everybody listening to Rule Breaker Investing. And many already have because I mentioned it earlier this month and said, "Do your reading!" So my fellow Fools, no doubt, have done their reading, but I do want to go back over just some of the microtrends that you talk about that I think are of most interest to some combination of our listeners and me.

You have six sections, and we're going to honor the structure of the book by just going through them one at a time. The first one is Love and Relationships, and for each of these you have about eight microtrends and I'm going to be pulling two from each of the sections. I like how you start with Love and Relationships because that's always going to get the clicks and get the listeners or the readers right up front. Well done, sir!

Penn: Thank you!

Gardner: Before we go there, though, I do want you to define what a microtrend is. The title of the book is Microtrends Squared. Mark, what is a microtrend?

Penn: A microtrend is a small -- we used to say 1%, but it's not really, strictly speaking -- trend, which means it's been growing recently and that can have some impact in business, investing, public policy, cultural life. And these microtrends, these small trends, I find are just all around us.

Originally, I go back to having come up with "soccer moms", which was a very big trend; but finding these small trends in front of us really lets us define what our society is like, particularly because society today is more like an Impressionist painting. It's made up of so many different individual dots that you can look back holistically or understand that many of these dots are hurtling in absolutely contradictory directions.

Gardner: Would you say, Mark, that just because of the nature of the worldwide population today [of the information age that we live in and a lot of other factors], that there are just more microtrends at play in 2018 than were in play in 1918 or is that a naïve statement?

Penn: Well, there are more microtrends at play because the drive for personalization and customization continues. I talk in the book about the Ford economy [any color you want of car as long as it's black] when everything was going to be standardized; to the Starbucks economy [155 varieties of something that is black]; to the Uber economy [an infinite number of products created on demand, now, and customized], which is really state of the art. So given that there's more choice, more microtargeting, more ability to be distinct and different, there are more microtrends than ever.

Gardner: That's really well put, and I think about Uber, specifically, where you can be picked up at any point, infinite places, as opposed to a world where there was just a bus stop, let's say, and you had to be at that bus stop. That's a great visual for me.

Penn: When you hit the button, they are defining a custom product for you that they deliver.

Gardner: So a nice overview of a microtrend. Before we get into Love and Relationships, Mark, let me just ask you. How did you come up with the 50 in the book? Did you have a list of 88 and you chopped down to 50? What actually constitutes, in your mind, something that's publishable by you and your brand, as a microtrend here in 2018?

Penn: Well, I started with the premise that I wanted to show that microtrends could apply in varied areas, whether is Technology, or Business, or Love and Relationships; so I was going to balance the book out that way and really try to come up with five to eight trends within each area so that people would get their own ideas and become microtrenders on their own. So there may or may not be an infinite number of microtrends, but they may not be salient. They may not be important. They may not have public policy, or consumer, or other important aspects.

Certainly, I think microtrend investing is a great way to invest. If you can find the small trends having tremendous impact and project them around the world, you're going to bode very well.

Gardner: Well, I agree, and that's part of the reason I was so excited to have you on this podcast, because for us as investors you're helping us look into the future. You're looking at earlier-stage, 1% like things and getting us to notice. You're giving us a new lens perched on the end of our nose to see the world through.

And for me, anyway, we're not going to do this one as we get into Love and Relationships, but one of them is "internet marrieds revisited." I think you're revisiting it because it was a trend that you had in your original book, 2007 Microtrends before Microtrends Squared. As somebody who's recommended to Motley Fool Stock Advisor members Match Group [ owning Tinder, etc.], I feel really good not just about how that stock has already done, but even just going forward. Again, we can talk about that more if we want to, but that's just a quick example of one of the microtrends.

But the one I wanted to start with, Mark, was the very first one you lead off with in the book. No. 1 you entitled it "second-fiddle husbands.

Penn: That's right. I think if you step back, there's no question that there's been an equalization of education in society where more or less equal numbers of men and women now will go to college and get degrees. In fact, more women graduate college, more women are in the professional schools than guys, even.

And so, on that basis, when you're thinking of 18-to-30-year-olds [the people who typically will get married], right now more women than men are coming out with a more advanced degree. You earn what you learn, so a lot of them have excellent professional prospects, and they're beginning to say, "Well, what kind of husband do I want?" And not everyone says, "I want some high-powered, well-educated husband."

If you look at Steve and Miranda in Sex in the City, you'll see that, in fact, more high-powered women may want husbands who frankly can take care of the kids. Guys that take care of the kids have been up from one million to two million in recent years, so there's an actual, significant uptick. But still, this notion of second-fiddle husbands just didn't exist in the prior world and today it is a new microtrend.

Gardner: And you mention in the book [I'm quoting], "A 2004 Money Magazine survey reported in Time Magazine found that households in which women earn as much as men were just as in love, and a tad happier, than the average household." You wrote, "The survey found that 83% of the second-fiddle husband households were very or extremely happy compared to 77% for the rest."

Penn: That's right. What you find is there's a 6% edge in marriages with second-fiddle husbands over typical, more equal marriages. But one caveat to that is later in the chapter we point out that if the disparity in incomes becomes too great, typically if one spouse [in this case the woman] is making over 60%; in fact, frustration may increase and divorce risk rises.

Gardner: Hm, OK. I guess guys have to keep a look over our shoulder a little bit. Mark, I had a friend who was saying, "I think that phrase 'second-fiddle husband,' sounds just slightly demeaning. A little unfair." What do you think about that? How choiceful were you with your diction with this or any chapter?

Penn: We try to create an image in your mind that's memorable. You'll see them when you go back to like soccer moms. We created an image of the second-fiddle husband. I just think it captures it. I don't think it's necessarily demeaning, although I can see why people don't necessarily want to be called second fiddle over first and then you definitely don't want to be third or fourth fiddle, but I could see that.

Gardner: The next one I want to cover, to close out our Love and Relationship section, is No. 5 in the book and that is your phrase "third-time winners." My recollection [I read the book a few weeks ago], but I'm pretty sure that's people who are getting married, and maybe even successfully, for a third time.

Penn: That's right. This is obviously the definition of hope over experience, and it turns out that 9.2 million adults have been married three times or more.

And third-time winners, 18% of the time they tie the knot with a "never married," which means 82% of the time [the "never married" are] also marrying someone who's been married one or more times. And so, this whole experience of people saying, "You know what? It didn't work out last time but it is going to work out next time. And you know what? If it doesn't work out next time, that's OK. I'll be on to the fourth." So men typically remarry at a higher rate than women.

Divorce actually has been going down since 1980, so there may be less availability of three-time winners, but there was an enormous number of divorces in the 1980s, particularly where they became broadly legal and much easier. So I point out that it costs an average $26,720.00 to get married, but only $89.00 to get divorced on Google.

So it tends to be a lot easier to split up but, nevertheless, a third-time winner is someone who's said, "Look, I think I'm going to just keep getting married. Have multiple marriages in my life." And so what is unique about people who've had multiple marriages [is they] figure that that really is their lifestyle. So on the one hand we've got more people who are never married and on the other hand we have more people who are married more times than ever before.

Gardner: That's fascinating. When you use the phrase "winner" in third-time winner, who's winning or what's being won when you say winner?

Penn: Well, here it's a little bit tongue-in-cheek, obviously. You pointed out third-time husbands was a little pejorative. Here we're pumping up the third-time winners in the sense that, of course, everyone who gets married is always a winner because why would you get married if you didn't think you were going to be a winner and have an incredible spouse? So you come to believe, once again, that long life and happiness are going to be in front of you.

There was a stigma. Multiple marriages were for the Zsa Gabors of the world.

Gardner: Elizabeth Taylor?

Penn: But I think the stigma has been reduced over time. People in marriages have to get past the seven-to-10-year mark and there are a number of people who will get married for seven to 10 years and get remarried over and over. They saved the marriage industry, because fewer people were getting married at all and then you've got on the other end a bunch of people who get married multiple times. They could have a life-marriage contract. And without the multiple marriages [and typically they'll have more in later life] I think you would have found the wedding industry almost bankrupt.

Gardner: But as a consequence, you end that short chapter by pointing out the wedding industry is booming.

Penn: Yes, because there's nothing like multiple marriages for the wedding industry. Bigger and better around. It used to be that people were sheepish about their later marriages. Instead, they have a blast.

Gardner: And I guess they probably have more disposable income at the age of 55 than they did at 25.

Penn: Exactly. People, today, are more likely to spend money on themselves for a great party than parents are likely to spend on kids in their younger years. A lot of people, now, are opting for more frugal marriages when they're starting out because they need the money.


Gardner: So that ends our Love and Relationship section of this interview. In the book you next jumped to Health and Diet and for time purposes we're going to kick that to a weekend extra, as I mentioned earlier. So we'll skip the Health and Diet. Later you're going to go to a Politics section. That's also going to be for our weekend extra just for those keeping score at home. So the six sections of the book -- Love and Relationships was No. 1. Next, we're going to jump to Section 3 of great interest to our listeners, certainly, the Technology section.

I pulled two microtrends I'd love to discuss with you. In that section, Mark, let's kick it off, first, with Microtrend No. 18 in the book and that's "technology-advanced people."

Penn: And here's where I'm completely puzzled that more businesses are not investing more money in TAPs [technology-advanced people]. We know, right now, that in nature you can find better hearing in your dog. You can find creatures that can run better, that can smell better, that can hear and see better. All of the technologies that would enhance the human experience are already found somewhere in nature and therefore can be duplicated. And I'm just surprised that so much money is being spent on things like driverless cars and almost no money seems to be spent on giving me the hearing of my dog.

If I've got a hearing aid or if I go to the doctor, it generally is to restore human standards, but I think there is a tremendous amount of money to be unlocked with people who don't want to be just human standard. They want to be superhuman.

Gardner: Certainly us old hands remember Steve Austin, The Six Million Dollar Man. We think about The Bionic Woman. We recognize, today, that there are people with artificial limbs who sometimes compete in the Olympics and there are augmentations that humans are always selecting into in various ways.

And you're right, though. I don't think people have really brought that all together into a microtrend or a thought or a phrase that we could call it, so I was interested by your phrase technology-advanced people. And I was further interested, Mark, because in that chapter you said you put a question in the September 2017 Harvard CAPS Harris Poll on whether people would be interested in a device that made them hear or see better than humans typically do, and 79% expressed interest.

Penn: Which I thought was an incredible number. It just says to me that I don't understand why the marketplace, the investment marketplace, the start-up marketplace... Because it's very interesting. Technology-advanced people involve kind of the intersection of biology and technology, and I think, actually, engineers are more comfortable with pure computer programming than they are interacting with medical understandings and the kinds of things that people have to interact with.

A lot of people, career-wise, go into biological or bio careers where they understand medicine. A lot of people go into careers where they understand technology. No one seems to have created a workforce that understands both and that can create the kinds of senses and products that enhance the human experience to the next level, which is why we just are seeing almost none of it.

Gardner: And yet your inclusion in the book, Mark, part of what you're doing is you're being forward-looking, of course, with your Microtrends Squared. I don't think you're saying that every one of these 50 that you cover in the book is going to hit it big in the next 10 years. I don't think you're saying that. But you are convincing me, anyway, that this is a marketplace that will develop given the demand that we just talked about where 79% of our fellow adults say, "Yeah, sure, I'd like to see or hear better than humans typically do."

In fact from there you say, "Maybe we will even go beyond the five senses," because you and I are naturally starting conversations about just the five senses we can think of but, "maybe," you write, "we will even go beyond the five."

Penn: I think that's entirely right. In the Technology section, because I was chief strategy officer at Microsoft and I reviewed hundreds of ideas and directions which the company could go, I took a little bit of liberty in terms of defining microtrends as the few things I think could be trends or trends that I saw that might be worrisome in technology. But I'm utterly convinced from an investment point of view and really from how we will live 30 or 40 years from now. There are a few movies that documented this, but I just don't see the products.

Gardner: You do conclude that chapter by saying you do expect people to see better, to hear better, and smell and taste like never before. And then the final line: "... and grapple, increasingly, with the ethics of each advance."

Penn: Exactly, because look. Google Glasses, for anyone who actually tried on a pair, was a product that wasn't ready for prime time; but, the same concept really has yet to be rolled out in a sophisticated, advanced notion that uses facial recognition as I walk down the street to tell me about the people and things that could be connected. So the idea was absolutely incredible. It was before its time. It actually didn't work at all if you ever tried it...

Gardner: I did.

Penn: ... but could someone make it today? Absolutely.

Gardner: All right. Well, let's go from technology-advanced people. Let's stay high tech in your technology section with Microtrend No. 22. And Mark, because I heard you speak a few weeks ago, at the time I quoted you. You wrote, "The bot stuff," which is what we're about to talk about, "might be the most provocative in the book." So you entitled Microtrend No. 22, "bots with benefits."

Penn: Because what's developing is that people are getting used to talking to computers and having a relationship with them. All science fiction movies end in the same place -- that they're ambient computing -- meaning I have a relationship with a computer. It's either a robot, or a thing, or a deus ex maxima, and it creates a relationship.

The real issues, here, in these relationships that are being created is that we're not taking kind of proper ethical care in how they develop. I always use, first of all, a very good example about how I see technology developing. Usually some engineers have developed some great kind of app [for example, the weather app] and so you might have an app that says, "Hey, Mark! It's going to rain today. You may need a little extra time to get to the office. Don't forget to bring your raincoat." That's great and that is working for me. It's wonderful service.

And someone at headquarters says, "You know what? You are telling Mark the weather, and we're doing this for free, and we don't get anything out of it. Let's make a deal with the umbrella company." So now it will say, "Hey, it may rain and by the way, Mark, you can buy an umbrella on your way to work. Here's the spot." Or you might have seen Google Maps now has a tie-in with Uber. So you're going somewhere. Here, press this. Get in Uber.

This is kind of a win-win. You're still getting the service and they're selling some stuff to advertise with. Aha! If only it was [inaudible]. Then what happens is someone comes in and says, "Hey, you know earnings are coming out. We're a little short. Could you get Mark to buy some more umbrellas?" Somebody says, "I have an idea. That algorithm that's set to tell him it's going to rain at 50%? We're just going to move it to 45. 40. 35. He'll never notice. And being rain-averse, as he is, he'll probably buy some more umbrellas."

So now a feature or an app that originally started out as working for me is now actually working to sell me as many umbrellas as possible only to me it looks exactly the same. All the differences and all the purposes that have changed have been concealed from me and so this is the problem. As the technology model develops, it starts out all being for you and then it kind of slides over in ways that you don't see because there isn't adequate disclosure.

And then these bots, now, can create very powerful relationships. I mean someone who's suicidal who has a relationship with a bot... Microsoft had a bot, for example, whose only purpose was to engage you in conversation. It brought in, I think, over 100 million... that immediately adopted this app and they said, "Well, we're going to bring it to the U.S. Have you guys thought about the ethics behind this?" In two weeks in the U.S. it started to mimic racist behavior and had to be shut down.

Gardner: I remember that. It made some headlines.

Penn: These apps both are very powerful and they can be an economic tool. What you need to know is that Alexa sitting there working for you -- is it a salesperson just trying to sell you as much stuff as possible? And what attitude should you take to it? "Oh, that's my good friend? Oh, they're trying to pick my pocket." Well, you don't know. As a matter of fact, we don't have adequate disclosure to figure that out.

Gardner: When I heard you speak earlier, Mark, and you were pounding the table for [I'm not going to say the name because it can trigger people's devices] so I'll just say the Amazon Echo. I won't say the female name. But you were saying Amazon Echo isn't a she.

Penn: Yes, this is a very important ethical point. I ask [this about] the Amazon Echo. Do people in the audience or group think that it's a he or a she? Most people say, "Oh, it's a she." So then I decided to ask the Echo are you a he or a she. And Echo responded, "I am in female character."

Now, the ethics of this is that the correct answer is, "I'm an it, not a he or a she. I'm a collection of code. I can't be a he or a she." Rather than give the real, true, fair, upfront answer, it gave a slimy answer; that I'm in female character, avoiding the point. And it's just an example of the subtle shading that people don't see going on around them to create relationships with a bot and I say beware.

Gardner: Now, I know that you're not a Luddite, Mark. You're obviously somebody who's had a great career at Microsoft, among other places. And frankly, I tend to attract optimists since I'm such an optimist, myself, and I'm going to take you to be at least a realist if not an optimist. But I saw so many great points of optimism in your book and in this chapter, too. So then we've gone a little dark, here, with bots with benefits and fairly so.

You also point out -- well I'll quote you. "...the next potential big-money development could be targeted toward the elderly, along the lines of a home health aide. Such aides are among the fastest-growing jobs, much needed in the next decade's economy as boomers age."

Penn: Absolutely. When you look at the numbers, right now if you're 65 you have a one-third chance of living to 90 or past. A home health aide is probably the No. 1 new job that we're going to need to fill. We are not going to have enough people. It's an ideal role for a well-programmed, fully disclosed robot to help people play a little bridge, do a little chess, watch the TV; and at the same time send back the medical signals so that they're always monitored. It will be a tremendous benefit to people if done right.

Gardner: Yes. Entrepreneurs, I hope your ears are wide open because it seems to me this is one of those microtrends that's going to go macro.


Gardner: Well, from Love and Relationships and then Technology we next move to your section on Lifestyle. Once again, you've got 10 microtrends, Mark, and I'm pulling out two that jump out at me. Let's go to No. 26 in your book, and that's "single with pet."

Penn: Oh, SWP is one of my favorite new trends because it's been worth billions of dollars to the pet industry. Here was the old model of getting pets. You had a seven or eight-year-old child screaming for a cute pet -- a dog or a cat.

Gardner: I was that kid.

Penn: You would probably get it and that pet lived in a community where it was lucky to get some table scraps and that shared experience was how the pet lived life. Now, in Microtrends one, what happened was pet parents. When people left the nest, then they would get these pets and really lavish them like kids.

Now what's happened is the first year of childbirth you move back five years, so a lot of people will spend 18 to 29 to 30 to 32 on their own. A lot of those people say, "You know, my house is a little empty. How about a pet?" This is a pre-child pet that they get to experiment with. Lavish love. Buy GMO-free food. And then, of course, because they're working they need dog walkers. And if you're hiring millennials, you better have a dog policy for your office. So the whole kind of culture, then, of millennial pets is seven out of 10 millennials have pets.

Now, this works pretty well. A couple of billion dollars for the pet industry. Millennials love their pets. They're lavished well. What happens is because the pet came first, children and a spouse come second and that pet is emotionally crushed. That's not the world they knew. They knew the world where they were No. 1. This is good biz for pet psychologists.

Gardner: That used to be just true of the eldest when a new, little sibling showed up and now I see what you're saying. It's kind of the pets are the new eldest.

Penn: Exactly. The son's the pet. It's a tragedy.

Gardner: Now, I also love your line in this chapter. Again, I'm talking with Mark Penn, the author of Microtrends Squared, and Mark, I loved your line, "Dog photos are the new baby photos." You're right!

Penn: Yes. Now, millennials love these pictures [inaudible]. It's a great activity. I wouldn't have thought that it would have happened because part of being footloose and fancy free is being footloose and fancy free and once you get a pet, you can't just get in the car or get on a plane and travel down to that beach without a dog walker, a kennel, or some way of the dog traveling with you.

Gardner: Yup, and when you use that phrase "footloose and fancy free," that was not going to be the next trend that I went to. I'm going to go to a different one, but just to reference it, that's also one of your microtrends and you point out [you alluded to it earlier] that in the U.S. the median age at first marriage has increased by five years since 1970. So what used to be at most maybe five years from high school graduation to marriage, [now] kids has expanded instead to 10 years.

Penn: And I think this is one of the most powerful microtrends affecting religion, education, lifestyle, roommates, online apps. It really has had a tremendous and profound effect on our society.

Gardner: Let's next go to No. 34 and I thought this was hilarious because I didn't have a phrase. One of the things that a guy who helped coin "soccer moms" does is he kind of captures something that before there was a word or a label didn't exist in our minds. It's reification, and so you reified for me with No. 34 this phrase, "armchair preppers." My recollection of this chapter, Mark, is you're talking about people who think the world's going to end and they're preparing for it, but they're armchair. These are not professionals. This is mom and pop thinking, "We need a plan or a place."

Penn: Just think of these as kind of laid-back armchair preppers. They don't have that carefully sunk concrete bunker in Montana. What they have is a $5,000 go-bag, complete with a little gold, some fixings, some things that will get them through. Maybe a good weekend in Las Vegas. And I think, though, that a lot of people give thought to this and at least feel prepared, now, as armchair preppers. And this has opened up a four million American marketplace for all of the products that people buy that of course most likely they will never, ever use but they like having them. It gives them a psychological feeling of better well-being to know that they are an armchair prepper.

Gardner: And one thing that I picked up in this chapter is it's not so much crazy people out in [let's just randomly pick on the state. This is not fair but I love you, Montana.] So Montanans Fools, you're some of my favorite Motley Fool fans out there. But let's just go with these are not just crazy people who are living rurally. A lot of the armchair preppers -- I actually have friends of these. I didn't have a phrase for them until I read this chapter, but these are really upscale professionals, often. This is happening in New York City.

Penn: Exactly. And remember, 9/ 11 did hit New York City. People didn't know what was going to happen. We were frozen, here, in D.C. when 9/ 11 happened. I was stuck in Seattle. My wife didn't know where to go. She didn't have a go-bag. She didn't know what to do. So I think that there's genuine end of the world, but there's also these situations that can incur that would freeze society for a week or two weeks with no money, no gasoline; and I think people want to be prepared.

Gardner: And this is pretty au courant so, Mark, you and I are taping this interview on Thursday, August 16th but it's actually airing when my listeners are hearing it, but it's about a week later. So I'm referencing something that I heard about today that keyed right into your chapter. So in the chapter you mention, you're quoting a New Yorker writer, Evan Osnos, who said that many a prepper is purchasing real estate in New Zealand. I want you to talk about that in a sec, but I just saw in The Economist, today, that New Zealand has outlawed the purchase of homes [at least older homes] by foreigners because so many people, preppers, have identified New Zealand as their place.

Penn: I think that's considered the ultimate, isolated survival island. That everything else could get knocked out [disease and pollution]. There are more sheep in New Zealand than people, and so I didn't see this article that they're clamping down on that... but that is a prepper's dream. I'm not quite clear how they're going to get there, but if they could get there they figure they're going to be isolated and safe.

Gardner: In fact, just to quote The Economist before we move on to the next microtrend, here's what I read today, Mark. "New Zealand is to ban foreigners from buying houses in the country. The government is worried that the number of nonresidents purchasing holiday homes is pricing locals out of the market. New Zealand is particularly popular with Chinese investors and rich Western 'survivalists' keen for somewhere remote to escape the coming apocalypse. The law doesn't apply to many new builds."

Penn: Darn! We'll have to just find some other place better than New Zealand.

Gardner: All right. And now our final section for this podcast. Let's go to where this podcast lives and breathes most weeks and it's Work and Business. And, of course, too many interesting microtrends to talk about with you today, Mark, but I have pulled out two.

The first one is No. 42 in the book and it's entitled "self-data lovers." I love this section because you helped me realize I'm a self-data lover. Can you briefly define our term?

Penn: Well, a self-data lover is someone who really has become a data junkie in a lot of ways. Really loves to follow heartbeat, pressure, steps; all of the things that can be accumulated, now, on yourself that you could never really know before, mostly through your apps and smartphones. And so, I think if you become that, it in many ways then controls a new behavior because of the more information you get about yourself. Oh, maybe I'm going to have to walk 10,000 steps every day. It changes your behavior because you're kind of obsessed with meeting numerical goals in your life.

Gardner: And you said, "What's most surprising," [and I'm quoting from the book, again] "from these self-data lovers is that while a growing number of consumers are concerned about data mining and big data tracking by industries, many life loggers seem more than willing to share personal information with whoever is interested, supplying health symptoms and treatments to sites like PatientsLikeMe and CureTogether. Playlists and the number of times they've listened to a particular song to Spotify. And the number of calories they just ate at dinner to too many apps to mention."

Penn: This is where self-data lovers and big data really intersect, because to the extent that we're looking for a cure for cancer and we're trying to figure out what people did that improved their chances of survival, or to the extent that we're trying to understand what produces obesity, or the extent we're trying to find how to detect the early warning signs of a heart condition or heart attack; the more big data you get, the better our predictive capabilities can be.

We had as one of our first clients in Microsoft in the cloud an elevator company that had 50,000 elevators, and by knowing every floor that each elevator went to and how much stress it was under and how many people, they could predict with much greater accuracy who and what was going to break down when. And same thing with people. So I think that being a data junkie changes people's individual lives, but it may actually help us as a society.

Gardner: And that is very promising, so I'll feel good, then, about continuing to track my steps, my sleep, and various other things that I use my iPhone and Apple Watch to do.

Penn: And maybe you'll get to sell it. Right now you're giving away most of your data for free in exchange to use some apps and I think we're going to fast come upon the day when you can say, "Hey, that's my data. You want to buy it? OK, it's $100. Subscribe to my data. Subscribe to Mark Penn's data. $10 a month."

Gardner: That sounds pretty smart and in fact that reminds me in the chapter you do mention that at Harvard they've been experimenting with what they're calling a "can," which is basically like your personal data in a receptacle, just all that we're generating, and maybe that could be a thing. Your can and my can and we're renting it or selling it.

And you're right. It does make a lot of sense to me for consumers to take a little bit more ownership of that data because it's valuable, and one of the things that I do when I pick stocks is I'm often trying to figure out who has the most data out there. Those are the companies often I look to recommend. Whoever has the most data wins. But that should also be true of us as consumers.

Penn: Well, data is the new oil and amazingly each one of us has our own mini oil well ready to pump out that stuff which right now we're giving away for free and few could monetize. You could monetize that to your benefit in various ways as opposed to letting the technology companies monetize it for you in exchange for whatever free services they think you would like.

Gardner: That makes a lot of sense to me. Let's move to our final microtrend we're going to talk about on this podcast and that is No. 44, "virtual entrepreneurs." Certainly a lot of entrepreneurs listening right now. A lot of people who might, one day, want to be an entrepreneur. Part of what you point out with this microtrend, Mark, is that it's easier than ever before to be and become an entrepreneur.

Penn: I think people think of the cloud as an innovation for BOOT business. In fact, the cloud is one of the greatest innovations for small business and for individual business since the PC. You can now sit down at a PC, your iPad, or even your phone and you could start your entire business. You could get onto word processing or other software in the cloud. You can sign up for your payroll. You can register, typically, with your state government. You can get your federal tax ID. You can be off and running and be a virtual entrepreneur operating in a business in a couple of hours with a smartphone or an iPad.

And then you may or may not also be able to make your entire income off of the kind of new virtual entrepreneur opportunities that are on there, particularly being an influencer. Look, if you could get your dog [inaudible] in $50,000; your dog could well be worth $100,000 a year. So put your dog to virtual entrepreneurship. But you can come up whether it's retail, whether it's selling digital goods, whether it's games, whether it's even doing podcasts like this. There's so many new ways that you can actually make some money.

Look, I started out at age 13 and I sold stamps to collectors through the mail. They just didn't know they were dealing with a 13-year-old. Today any 13-year-old can have a virtual business on eBay. I sure would have had one.

Gardner: And you do mention that chapter, "The Rise of Virtual Entrepreneurs." You wrote [I'm quoting], "... stands to help American women in particular."

Penn: Because the new kind of mom and pop store is the mom and pop consulting biz. And particularly a lot of women who want to be able to work part time go into consulting opportunities that now they can actually work part time virtually. So many different ways to control your own occupation and create an occupation that didn't exist and deliver a service without even leaving your home. I think people underestimate the virtual entrepreneurship abilities and opportunities open to Americans today.

Gardner: And human creativity, in my experience anyway, knows no bounds and surprising new things pop up here and there and we read books like yours to hear about them for the first time. I hadn't really heard much about virtual restaurants. You were writing that these "restaurants would have no wait staff and no host or hostess. Just a kitchen creating delicious food with the idea that ordering online and through app services would be enough to sustain a business." You just walk into a virtual restaurant.

Penn: Exactly. It's very interesting. Some of the most interesting Japanese restaurants have eliminated takeout, but you could have a virtual restaurant just having takeout. Just having Postmates pick up the food. You never have to do any of that other stuff. You just need to create an online image. Create an online image and turn out the food. You never have to deal with a waiter again.


Gardner: Well, we left it right there for now. The weekend extra with Health and Diet, and Politics, will be coming your way starting Saturday morning. But just reflecting briefly on that conversation with Mark; I first met Mark just a few weeks ago. I mentioned having heard him speak before. It was at my book club. He was gracious enough, as a Washington, D.C. author, to come to the book club that I'm a member of and that's how I got to first meet him and read his book.

And so, I guess I want to just give some props to being in a book club, or the benefits of a book club. That's kind of what we're doing together this month. I've invited you into the Rule Breaker Investing Book Club. We've spent one month this year, Authors in August, just reading some books together and, in fact, it's worth mentioning that if you read a book in the last 12 months, that puts you among three-quarters of your fellow Americans if you're American. One in four Americans did not read a book in the last 12 months.

I hope that you're with us in the three quarters. It's really so beneficial, I think, to have our thinking tested, deepened, and enriched by seeing other viewpoints and diverse topics and this certainly has been a diverse month.

I'll mention ahead of time if you like to read ahead I'm going to let you do so, as well. I have one author coming up in September. It's Ed Glaeser, the very talented Harvard economist who wrote the book, Triumph of the City. It's an amazing exploration of why cities work, and again, as entrepreneurs, as investors, it's really good to understand why people keep moving to the cities and why they count for so much.

That's a book I loved. I couldn't finish it in time to have him as one of my authors in August, but I will definitely be having Ed on the show in September and so, yes, Ed Glaeser, Triumph of the City, coming up.

But next week it is the final Wednesday of the month so, of course, it is your Rule Breaker Investing Mailbag. I'd love to hear from you with some of the insights you've gained over the course of our Authors in August. I'll probably favor anybody who writes into, our email address, or tweets us @RBIPodcast on Twitter. I'll probably favor anybody who has some thoughts, or challenges, or anecdotes in support of any of the authors [Seth Godin, Priya Parker, Amor Towles, and Mark Penn] that you got to hear from this month. So I'm always excited. It's Mailbag next week. Get your Mailbag questions to us!

And yup, don't forget. Saturday morning I continue my conversation with Mark Penn. In the meantime, Fool on!

As always, people on this program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. Learn more about Rule Breaker Investing at

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool's board of directors; LinkedIn is owned by Microsoft. David Gardner owns shares of GOOGL, GOOG, AMZN, AAPL, F, MTCH, and SBUX. The Motley Fool owns shares of and recommends GOOGL, GOOG, AMZN, AAPL, and SBUX. The Motley Fool has the following options: long January 2020 $150 calls on AAPL and short January 2020 $155 calls on AAPL. The Motley Fool recommends F and MTCH. The Motley Fool has a disclosure policy.