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 nonwriting resume includes stints as the chief strategy officer at Microsoft, CEO of the PR firm Burson-Marsteller Worldwide, chairman of 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 a number of examples that are changing how we approach everything from business and investing to public policy and our personal lives.
In this segment, they pick a pair from the Love and Relationships chapter: couples in which the wife is the bigger breadwinner and the husband takes the primary role in caring for the kids and those optimistic pairs for whom at least one partner is on their third marriage (or more).
A full transcript follows the video.
This video was recorded on Aug. 16, 2018.
David Gardner: 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!
Mark 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 [Match.com 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.