(#12) Mercedes and software, Whatsapp wills start to deliver and Innovation at Google
All in on Artificial Intelligence. Across all board meetings the CEO’s are asking the same question: How can we incorporate Chat GPT and alike in our strategy? Let’s discover this in this newsletter.
AI as a distraction
Snap moved from “we are probably never going to make a profit” to “let’s see what we can do with Chat GPT”.
From WSJ: "Snap on Monday also signalled it was making a bet on OpenAI’s technology. The company known for its Snapchat app said it had begun rolling out its own AI experimental chatbot to users who subscribe to its $3.99 a month subscription service, Snapchat+." LINK
Some ideas on Snap:
1/ From my last newsletter: "Search engines will move to utility (ie. replacing lawyers, marketing specialists etc) to…entertainment."
2/ Investors like this move because software companies can’t build physical products. (Snap tried glasses, small drones and others and.failed)
3/ Snap, the parent company of Snapchat, lost money in 30 out of the last 31 quarters (see picture below)
4/ Snap was the most affected company by the implementation of Apple’s ATT, hence confirming that their Ad strategy is basically brand advertising. Unfortunately, they are not in META’s position with loads of cash in invest in AI & algorithms (which are very cash intensives)
Lesson? Try anything that can work until the new gatekeepers will knock at your door (ie. the end of free money)
Zoom is having his own adolescent crisis
Many forget that in 2021 Zoom had a larger market capitalization than Exxon. Fast forward, in 2022 the company barely made a profit of $1bn while Exxon did $56 bn.
EVs means much less (employed) people
ICEs have 10x more spare parts than EVs. Moreover, the competitive advantage moves to scale (ie. gigafactory), design, distribution…and software (ie. autopilot and entertainment).
The latter one will play a crucial role because (1) this requires a totally new skillset and (2) very good software developers are rare and always better paid by Google and alike. (ie. +$150k / year and stocks)
Few people really understand these 👆🏻 and their consequences.
McKinsey is doing layoffs too
The company announced “Project Magnolia”, a move designed to cut 2,000 jobs. When it comes to consulting companies the cuts are two-fold: (1) support services (because they don’t bring revenue) and (2) low performing consulting positions. (sometimes also Partners and Associate Partners that achieve their targets). LINK
Newsletters all the way
Whatsapp announced the plan to create their own newsletter service. My takes on this:
1/ The market is already saturated, with three winners (probably one will remain): Mailchimp, Substack and Behiiv.
2/ Receiving newsletters directly in chat than in email can be a better experience. Most of the world is consuming mostly mobile (ie. they don’t even have laptops/PCs)
3/ Somebody at Whatsapp realised that they need to deliver a product; not sure if they really want to build a supper-app, like WeChat. LINK
Mercedes Benz OS
The German manufacturer announced their new E-class car in…the USA. What is different this time is that the company realised their cars need cameras and large screens. With this series they are testing the waters.
In the meantime, the new lucky customers will be able to join video conferences and/or create for TikTok. LINK
Innovation at Google
Or better said, lack of innovation. In this context I mentioned in my previous newsletter about the wartime vs. peacetime CEO and the need for change.
We all know by now that the company is mainly focused on its cash cow: ads. Everything else is relative. Here is a message from an app founder that was acquired by Google in 2020. In a Medium post he says:
“The way I see it, Google has four core cultural problems. They are all the natural consequences of having a money-printing machine called “Ads” that has kept growing relentlessly every year, hiding all other sins.
(1) no mission, (2) no urgency, (3) delusions of exceptionalism, (4) mismanagement.”
To be fair, all large corporations have these problems. LINK
Revolut reported for…2021
Sifted.eu is reporting the first profit for Revolut, one of the newcomers in banking (ie. fintechs). There is not to be said by the fact that instead of reporting in September 2022 (already late by all standards) they reported in March 2023 for 2021. Crazy! Sifted.eu, Revolut reporting
What drew my attention:
1/ Gross Margin improved from 33% in 2020 to 70% for 2021 (ie. software eats the world)
2/ Probably most of the profit (all?) came from crypto commissions.
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Not everyone is happy with Chat GPT
JP Morgan restricts employees from using ChatGPT. There are companies that are afraid to lose ownership of customer information or, even worse, source code by typing into the chat. Expected move. LINK
AI tools that will save you time
Large Language Models (Chat GPT & co) - learn how to use them. LINK
Steve Jobs in 2001 said, “1,000 songs in your pocket.”
Spotify in 2023 says - “AI DJ in your pocket”
From Spotify: “Personalization is at the heart of what we do at Spotify—just think of fan-favorite playlists like Discover Weekly, or our annual Wrapped campaign. The beauty of these experiences is our ability to deliver the right piece of music for that exact moment in time, and maybe even connect you with your next favorite artist in the process. We’re building on that innovation by harnessing the power of AI in an entirely new way. And today, we’re excited to share that we’re taking our personalization to a whole new level with DJ.”
AI will not kill the DJs, but they will wound them. For companies like Spotify this means more revenue.
ChatGPT: A Meta-Analysis after 2.5 Months
Hint! People like it and see its potential. LINK
El Salvador has bought 1,391 Bitcoins since January 2022. LINK
Everything that is subsidised or doesn't have real competition is getting more expensive. (e.g. from education to housing)
Payscale made this research on 248,000 people in 2019. Image what the new percentages we have now: LINK
Cars “Made in China”
China is moving along the manufacturing line and becomes the second global car producer, surpassing Germany. Due to their advantage on the EV supply chain, preferential chips access and others they succeeded to be regarded as an attractive option to other Asian automakers.
9 viral phrases that explain China’s work culture. LINK
The co-founders of Instagram quit META to create their…social network. First step: news based on an algorithm. Based on the adoption, this can transform into a social network. LINK
Superlink — Interesting service that lets you buy your name as a domain. Doesn’t work for all names though. LINK
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