This may or may not worry you depending on your point of view. IBM has deployed a super intelligent face mask surveillance system for businesses (or government) to discreetly track face mask usage by employees, customers, and anyone who enters a building where their system is installed. The platform will send alerts to the powers that be if anyone is either not wearing a face mask properly or not wearing one at all.
Presumably, if the tech savvy eye in the sky notices an infraction it will quickly enable management and their enforcement teams to confront the individuals to rectify their face mask violation. How dare they! It will also monitor in real-time crowd density, social distancing, and elevated body temps of those who are entering an establishment.
IBM Cloud released a video narrated by Ian Smalley (below) that explains how their technology works to enable any business or government to surveil and enforce mask usage:
Here is a really cool way that Edge Computing is being used to help businesses reopen and operate safely. We know face masks can substantially reduce the transmission of aerosol borne viruses. But sometimes people forget to wear them properly or at all. IBM Edge Application Manager places analytical workloads with Edge enabled cameras that can recognize face masks and determine if they are being worn effectively.
Since analysis is being performed at the camera the video data and individual privacy are protected. You also avoid the expense of transmitting, storing, or analyzing that image data any further. Alerts are sent every time the camera detects improperly worn or non-existent face masks. Then it sends the aggregated data back to the IBM Maximo Worker Insights platform allowing you to highlight face mask activity in your facilities.
It’s pretty amazing stuff and that’s only scratching the surface. IBM Application Manager is also using Edge Computing to monitor crowd density, social distancing, and elevated body temps of those who are entering an establishment.
In a surprise move, Oracle has emerged as the frontrunner to be the US partner for TikTok.
The Trump administration instituted a ban on TikTok that goes into effect mid-September, unless a buyer could be found to take over US operations. Microsoft, partnering with Walmart, emerged as an early prospect before Oracle also threw its name in the mix.
Before a deal could be finalized, however, the Chinese government changed its export rules governing what technologies could be exported. It’s believed the new rules directly impact the algorithm TikTok uses for recommendations and engagement. As a result, potential buyers had to start looking at alternative ways to make a deal happen.
According to CBC, ByteDance has rejected Microsoft’s bid in favor of Oracle. None of the involved parties are commenting, so it remains to be seen what a potential deal looks like.
According to the Wall Street Journal Microsoft is partnering with tech startups as part of its fierce battle to win the cloud war against Amazon, Google, and others. Microsoft just announced today a global strategic alliance with cloud security startup Abnormal Security. The deal is straight forward. The fast-growing startup moves its platform to Azure and Microsoft will offer Abnormal Security to its huge list of enterprise customers. Amazon has been employing this tactic as well per WSJ.
In the latest deal with Abnormal Security, Azure customers can purchase Abnormal Security directly via Microsoft co-sell and through the Azure Marketplace. Microsoft says that all purchases count towards enterprise Azure commitments.
“Microsoft for Startups is committed to helping B2B startups use the Microsoft platform to scale their business quickly and deliver innovative AI-powered solutions to enterprise customers,” said Jeffrey Ma, VP Microsoft for Startups. “Abnormal has hit the ground running, seeing success with Fortune 1000 companies in a short time, and we’re looking forward to joining forces to further accelerate their security solution to our global customers.”
Evan Reiser, Co-founder and CEO at Abnormal Security said, “When considering the right cloud infrastructure, startups need to look at both the technology platform and the business opportunity. As a cybersecurity company, we were very intrigued with Azure’s inherent security, privacy and AI offerings and as a startup, Microsoft’s go-to-market support and access to the largest enterprises is unmatched. We decided that to be a high-growth company selling to the Fortune 1000, it made business sense to partner with Microsoft and move our business to Azure.”
“Abnormal’s unparalleled market traction is a testament to incredible value being delivered to their customers and the ability to protect organizations from these cyberattacks that have cost them over $2b. I couldn’t be any more excited to see the accelerated growth with Microsoft co-selling the solution,” said Saam Motamedi, General Partner at Greylock Partners.
It’s definitely a win-win for Microsoft and startups like Abnormal Security. Microsoft gets a fast growing startup exclusively on its platform and Abnormal Security gets access to Microsoft’s massive connections with enterprise companies.
Walmart has partnered with Zipline to deliver health-related products directly to customers. “We are teaming up with Zipline to launch a first-of-its-kind drone delivery operation in the U.S.,” says Tom Ward, Senior Vice President of Customer Product at Walmart. “The new service will make on-demand deliveries of select health and wellness products with the potential to expand to general merchandise.”
Walmart will begin testing drone delivery early next year near their Arkansas headquarters. Zipline specializes in delivering medical supplies and other critical products for businesses via its unique drone technology. So far the company has made 58,436 commercial deliveries so far.
“Zipline will operate from a Walmart store and can service a 50-mile radius, which is about the size of the state of Connecticut,” said Ward. “And, not only does their launch and release system allow for quick on-demand delivery in under an hour, but it also eliminates carbon emissions, which lines up perfectly with our sustainability goals. The operation will likely begin early next year, and, if successful, we’ll look to expand.”
“As we continue to build upon the foundation of innovation laid for us by Mr. Sam, we’ll never stop looking into and learning about what the next best technology is and how we can use it to better serve our customers now and into the future.”
“In five or ten years from now, I’d be surprised if (Peloton wasn’t available as part of a subscription),” says Peloton CEO John Foley. “I think there’s a there for sure. It’s not something you’re going to see in the next year. We didn’t need to have it yet but I love moving in that direction.”
Peloton said in their Q2 earnings release that paid Peloton Digital subscriptions grew 210% year-over-year as they reduced the price of Peloton Digital to $12.99 and extended their Digital free trial period to 90 days during March and April because of sheltering in place restrictions that were in place around the world. Peloton also launched integrations with the four leading over-the-top TV platforms including Amazon Fire TV, Android, Apple TV, and Roku.
John Foley, CEO of Peloton, discusses the likelihood that the company will eventually offer subscriptions for its internet-connected fitness products instead of requiring an expensive purchase:
Moving In The Direction Of A Subscription
In five or ten years from now, I’d be surprised if (our connected fitness products weren’t available as part of a subscription). I think there’s a there for sure. It’s not something you’re going to see in the next year. We didn’t need to have it yet but I love moving in that direction. It’s all in the name of affordability for our members, our current members, and new members, and making sure they feel incredible about the value.
One thing I will point out is that my favorite metric last Q4 which was ended July 1, 2019, our subscriptions were used 12 times a month on average. This year, thequarter that just closed, they were used close to 25 times a month on average. So when you’re paying us $39 a month and getting 25 workouts from your household it’s close to $1.50 per workout. It’s just insane value. We’re very excited about that and we’re going to continue to push with more content and more access to our content.
Bike+ Is Now The Best Bike In The World
To the extent, we are having a hard time making bikes fast enough at the current price you would say we don’t have to change the price at all. Of course, we are with our better best strategy. With the better best we can have the premium product, the best product in the world, which the new Bike+ that we came out with this week is. Bike+ is now the best bike in the world and it’s at just under a $2,500 price point. Over time, it allows us to do a lot of creative pricing.
Right now, the original bike that’s the best cardio machine on the planet loved by millions is under $1,900. From a finance perspective, it is under $49 a month which we’re very excited about. We do think that as we grow the SAM and TAM globally price point for our products is going to matter so we’re getting out in front of it.
Peloton Moving Toward Subscription Model, Says CEO John Foley
“Our digital business is up 127 percent,” says Kroger CEO Rodney McMullen. “When you look at what our customers tell us and one of the reasons why our digital business is so strong is things that are personalized. We continue to look at what the customer wants and needs and then how do we serve those. What we find are our store teams, our pickup associates, and delivery is very important.”
“Customers are at the center of everything we do and, as a result, we are growing market share,” noted McMullen in their earnings release. “Kroger’s strong digital business is a key contributor to this growth, as the investments made to expand our digital ecosystem are resonating with customers. Our results continue to show that Kroger is a trusted brand and our customers choose to shop with us because they value the product quality and freshness, convenience, and digital offerings that we provide.”
Rodney McMullen, CEO of Kroger, discusses how their digital business has been particularly key to powering their massive growth amid the COVID pandemic:
Digital Business Is Up 127 Percent
Customers are continuing to shop in our stores. When they shop in our stores, the count is down but the amount they spend per visit is up significantly. Also, our digital business is up 127 percent. Customers continue to engage in that. What we’re finding is that in markets where COVID is having a lower incident rate or where it is having a higher incident rate, it really doesn’t have that much of a difference. The thing that’s exciting is that people are finding they enjoy cooking and they enjoy eating as a family. It’s really all those things together that gave us the confidence to go out with the (earnings) guidance that we did.
We’re really looking at this for the long term, what’s right for the customer today and what’s right for the customer two or three years out. The increased volume has allowed us to leverage some costs. What we’re doing is taking some of that and sharing it with the customer by waiving our pickup fee. Also, we’ve continued to do promotions throughout the pandemic and we continue to share some of that with the customer. We really do fundamentally just believe the customers will reward us once we get out of the pandemic as well. It’s just the right thing to do and it’s the right thing to do to help a customer’s budget go a little further.
Digital Business Is Strong Because Of Personalization
For us, it’s the whole total experience. When you look at what our customers tell us and one of the reasons why our digital business is so strong is things that are personalized. We also do incredibly well on fresh. Customers tell us and they expect that our fresh is really good and good relative to our competition. It’s really all of those things together. We’ve had a membership program for a long time and you didn’t have to pay for it. It’s fuel rewards and we do loyal customer mailings and all those things.
We continue to look at what the customer wants and needs and then how do we serve those. What we find are our store teams, our pickup associates, and delivery is very important. We are making sure we have that total balance of the experience both from a people standpoint, a price standpoint promotion, and then kind of sealing the deal with fresh products as well.
Digital Business Is Up 127 Percent Says Kroger CEO Rodney McMullen
As the TikTok negotiations run into trouble, President Trump has indicated he has no intention of extending a ban deadline of September 15.
TikTok has earned the ire of US officials with repeated accusations of privacy and security violations. As a result, officials have repeatedly labeled it a threat to national security and Trump announced a ban that is scheduled to go into effect September 15.
Microsoft and Walmart joined forces and emerged as early frontrunners to buy the social media platform’s US operations. Oracle also expressed interest, with Trump speaking favorably about a possible deal. Unfortunately, for the first time in years, the Chinese government altered its export rules to prohibit selling technologies that include AI, impacting TikTok’s algorithm.
It’s unclear if a deal will be able to be reached, although Trump has made it clear there will be no extension granted.
Amazon’s plans to use autonomous drones for package delivery took a big step forward with FAA approval to begin testing.
Amazon Prime Air has been working toward the use of drones to deliver packages to consumers in 30 minutes or less. According to Reuters, the FAA just approved the company to begin testing of its autonomous drones, joining UPS and Alphabet’s Wing division.
The drone service could represent a big cost savings to Amazon, while giving the company a competitive advantage, in terms of the speed of delivery. At the same time, there are still a number of challenges to address. As more people rely on online shopping, porch piracy has become a major issue. It’s a safe bet there will be an equally big problem with ‘package poaching’ as Amazon’s drones take to the sky.
Either way, the FAA’s approval to begin testing is an important step in widespread adoption of drone deliveries.
If something is too good to be true, it probably is. That’s a lesson many people are learning about Techno Android phones.
Techno phones have become extremely popular in Africa, where they have supplanted long-time favorites Samsung and Nokia. While the phone looks nice and has modern functionality, its biggest selling point is its price. Techno phone can be had for much less than competing brands.
According to an investigation by BuzzFeed News and Secure-D, the price was actually much higher. The investigation showed that preinstalled malware was stealing people’s data, interrupting chats and phone calls with popups, as well as secretly installing apps that subscribed people to services—in effect stealing their money.
What makes the whole debacle worse is the fact that the maker of Techno phones, Transsion, specifically targets some of the world’s poorest communities. Their business model has been so successful that, as BuzzFeed points out, they’re the fourth-largest phone maker in the world, behind Apple, Samsung and Huawei.
Transsion, of course, has denied wrongdoing, saying the issue originated with a supply chain vendor. They went on to tellBuzzFeed:
“We have always attached great importance to consumers’ data security and product safety. Every single software installed on each device runs through a series of rigorous security checks, such as our own security scan platform, Google Play Protect, GMS BTS, and VirusTotal test.”
They failed to explain, however, how the malware made it on the phones if they have “a series of rigorous security checks.” Even if Transsion is telling the truth, their incompetence alone borders on criminal.
Walmart is getting in on the TikTok action, joining Microsoft’s bid to purchase the beleaguered social media platform.
TikTok has gone from one privacy and security scandal to the next, culminating in the Trump administration instituting a ban that will go into effect on September 15, unless a buyer can be found. Microsoft has emerged as a frontrunner, although Oracle has also expressed interest.
Now it appears that Walmart is joining Microsoft in its bid, seeing a unique e-commerce opportunity.
“The way TikTok has integrated e-commerce and advertising capabilities in other markets is a clear benefit to creators and users in those markets,” reads the company’s statement. “We believe a potential relationship with TikTok U.S. in partnership with Microsoft could add this key functionality and provide Walmart with an important way for us to reach and serve omnichannel customers as well as grow our third-party marketplace and advertising businesses. We are confident that a Walmart and Microsoft partnership would meet both the expectations of U.S. TikTok users while satisfying the concerns of U.S. government regulators.”
It will be interesting to see what Microsoft and Walmart can make of TikTok, should a sale be successful.
“Amazon then has turned around and supported a bill in California to say that every other online marketplace that’s not acting like a retailer (as Amazon is) should be held strictly liable,” says Etsy CEO Josh Silverman. “So Craigslist or eBay or Etsy should have liability. This is going to have tremendous consequences for the 3 million sellers on Etsy and for all sorts of small businesses all around the country should Amazon prevail in this fight. It’s really an anti-competitive act from amazon to consolidate their market power.”
Josh Silverman, CEO of Etsy, discusses how Amazon is using its financial power to cynically support legislation it was previously against for the sole purpose of crushing smaller competitors such as Etsy:
Wolf In Sheep’s Clothing To Protect Amazon’s Market Power
I think this is an important issue and it’s important for everyone in America. This is a wolf in sheep’s clothing designed to protect Amazon’s market power and extend Amazon’s market power. It’s dressed up to look like consumer protection.
Here’s what’s going on. Consumers, of course, need to be protected if something goes wrong with a purchase. There’s a long history of law that says if you buy something from a retailer and something goes wrong that retailer is strictly liable. It also says if you buy something on a marketplace the vendor on the marketplace is liable but the marketplace itself is not. Think if you buy something from a flea market, the landlord who owns the parking lot is not liable, it’s the person you bought it from at the flea market.
Tremendous Consequences For Etsy Should Amazon Prevail
So the question, and there’s been a gap in recent law, what happens when a marketplace starts to look and act like a retailer? We don’t need California to come and pass a law on that because the California judiciary just settled that issue last week. They said Amazon looks like a duck and smells like a duck so it acts like a retailer. It exerts control, it picks the inventory, it stores the inventory in its warehouses, it pick-packs and ships the inventory, it puts it in an Amazon box and it delivers the box to your door in an Amazon van. It said Amazon meets the standard of acting like a retailer and therefore it should be liable like a retailer.
Amazon then has turned around and supported the bill in California to say, well then every other online marketplace that’s not acting like a retailer should be held strictly liable. So Craigslist or eBay or Etsy should have liability. This is going to have tremendous consequences for the 3 million sellers on Etsy and for all sorts of small businesses all around the country should Amazon prevail in this fight.
Anti-Competitive Act By Amazon To Consolidate Market Power
Amazon has previously been fighting these kinds of bills for years. It’s so cynical. They lost this court case because the court found that they act like a retailer. So they’re now strictly liable in the cases where they act like a retailer. The court didn’t find that they do it every time. The court set a standard for what are the tripping points. They gave guidance for other courts on when is a marketplace actually acting so much like a retailer that they should be held strictly liable. Amazon would trip that wire most of the time.
Amazon then flipped and said well this is an inconvenience for us but it would be a crushing burden for small businesses, for our competitors, for people like Craigslist or Etsy. They’ve now backed a law saying since we have to do this because we act like a retailer we want all online marketplaces to also be held liable even if they don’t act like a retailer. The reason is that this is so complex that a smaller place, a marketplace like Etsy, which never touches the merchandise, which doesn’t fulfill, which doesn’t pick pack and ship, simply can’t comply. It’s really an anti-competitive act from amazon to consolidate their market power.
Etsy CEO Josh Silverman: Anti-Competitive Act By Amazon To Consolidate Market Power
“It’s a remarkable time in that we’re witnessing the beginning of a seismic shift in terms of consumer preference in how they want to buy their food,” says FreshDirect CEO David McInerney. “What we’ve seen is within the cities that we operate, New York, Philadelphia, DC, we’ve seen the urban dwellers migrate out to the suburbs. As they migrate out they are taking FreshDirect with them.”
David McInerney, CEO, and co-founder of FreshDirect, discusses how the pandemic has caused a boom in how people want to buy their food:
Witnessing Seismic Shift In How Consumers Want To Buy Food
Overall, the growth continues to be tremendous both in the cities and in the suburbs. It’s a remarkable time in that we’re witnessing the beginning of a seismic shift in terms of consumer preference in how they want to buy their food. What we’ve seen is within the cities that we operate, New York, Philadelphia, DC, we’ve seen the urban dwellers migrate out to the suburbs. As they migrate out they are taking FreshDirect with them.
When you combine that with this iconic truck that we have that everybody knows and then new customers in the suburbs see it and word of mouth goes on. Then all of a sudden we are seeing really explosive growth there as well. Frankly, it’s something that we like a lot. We like the suburban customer because they have really big pantries. They really value fresh food. We’ve had a good time with it thus.
Customers Moved To Suburbs But They Are Coming Back Soon
We’re sort of on the sidelines watching (when people will go back to urban areas again). We are talking to a lot of our customers. The truth is we are hearing from some that they plan on staying wherever they are, whether that’s in a suburb in our trading area or somewhere else in the country. But I think there are a fair amount that are coming back and we’re planning as such. We’re planning to see a significant migration back in September for all three cities.
While the ramp-up will probably not be as strong as we’ve seen in earlier years we’re still expecting growth. There’s also a big chunk of our business which is in the offices. We do a corporate office business as well and that has been pretty much non-existent. We think that will take more time to ramp up but we see that coming back to some extent in September as well.
FreshDirect CEO David McInerney: Seismic Shift In How People Want To Buy Food
“The ultimate solution for Uber and Lyft is autonomy,” says Loup Ventures Managing Partner Gene Munster. “If this employee model simply doesn’t work you are going to see these companies push even harder into autonomous systems simply eliminating the drivers. However, this will attract more competition. I think the two best companies positioned within that would be Google and their Waymo initiatives and also Tesla and how they are going to vector into the ridesharing market.”
Gene Munster, Managing Partner at Loup Ventures, discusses how California in forcing drivers to be employees may ultimately speed up the efforts of Uber and Lyft to go fully self-driving and thereby simply eliminate all human drivers:
What Would The Drivers Want?
Both Uber and Lyft are in a tight spot. There was reprieve today. But this topic is not over with this vote coming November 3rd and California’s influence that they can have with other states. If you put all of this together and think about if these changes to employees across the country, it could be a 15 percent increase (in costs). This is effectively their profit margins.
I do want to caution the voters of California and also some of the lawmakers on one aspect. What would the drivers want? Most of these drivers use both apps, both Lyft and Uber. If they are employees they likely will be restricted from jumping from app to app. That would cut down some of their rides and cut down what they will be paid on an hourly basis. I don’t think that the right path here is as clear for the drivers in simply becoming an employee.
Ultimate Solution For Uber and Lyft Is Autonomy
The ultimate solution for Uber and Lyft is autonomy. If this employee model simply doesn’t work you are going to see these companies push even harder into autonomous systems simply eliminating the drivers. One of the unique things about Lyft and Uber is it is a two-sided marketplace. They have drivers and riders. In an autonomous world you don’t need drivers. Essentially, that would leave Lyft and Uber with their key asset, their brands around movement. I think that is an asset but I don’t know if it is worth $55 billion.
What I really take away from this is that over the next few years there are going to be ups and downs related to this regulation. Longer term, we know where this is going. Cars should be autonomous for safety reasons and productivity reasons. Ultimately, ridesharing with Uber and Lyft is going to be fully self-driving. This topic we are discussing today is going to be largely irrelevant.
Lyft is already testing self-driving rides in Las Vegas
Google and Tesla Will Compete With Uber and Lyft
There are some key nuances to an autonomous ridesharing business model. As I mentioned, there is a two-sided marketplace. That’s really what makes Lyft and Uber special today. One of the sides of the marketplace, the drivers side of this, is under some pressure right now. But if we eliminate the drivers side then you don’t even have a marketplace. You are just trying to get consumers to ride. That opens up new competitors. There are about six of them that are trying to get there.
The autonomy option is a better option for Lyft and Uber than what they currently have with humans driving. For an investor it’s a more profitable option. However, ultimately it will attract more competition. I think the two best companies positioned within that would be Google and their Waymo initiatives and also Tesla and how they are going to vector into the ridesharing market.
I Would Put My Money On Lyft
Assuming their ballot initiative wins in November, I’m in the Lyft camp. This is partly because I like their focus just on the US and on ridesharing. I think that the Uber Eats business, while its had a tremendous tailwind, it will get progressively more competitive and it’s tougher to make money in that business.
Ultimately, if I had my choice I would put my money on Lyft. There is another X factor here. There is something subtle about Lyft’s culture. It is a more investor friendly culture and that influences my view.
Ultimate Solution For Uber and Lyft Is Autonomy, Says Loup Ventures Managing Partner Gene Munster
“We had to learn to work in different ways to become more digital and to put data to work in different ways,” says Walmart CEO Doug McMillon as he reflected on the release of their blowout financial results. “Basically, to create a seamless experience for customers. We don’t want them to sense any difference as it relates to our brand whether they are shopping inside a store, picking it up, or having it delivered. All of those differences and channels that we might have thought about in the past need to be erased and taken away.”
Doug McMillon, CEO of Walmart, discusses how the company has changed to become more digital over the last couple of quarters in response to the pandemic:
Ecommerce Was Very Strong
I would like to say thank you to all of our associates around the world and here in the US. They did a great job. You can imagine how challenging it is in this environment to go to work everyday and serve customers and keep the supply chain moving. Whether it’s in our stores, our Sam’s Club’s, or our distribution centers they have done a great job.
Customers have been responding in waves as we’ve gone through the first and second quarters. Not surprisingly, they got really focused on things they needed to stock up to be at home for a long time at first. Over time, as we got through the second quarter and stimulus checks came in to play and people were at home, we certainly saw them buy things like laptops and tablets and fishing equipment and bicycles. Things that were related to home decor as they were at home thinking about their environment inside and outside the house we certainly saw them respond with what they were buying. Ecommerce, in particular, was very strong.
Technology Phenomena Happening Around the World
I’ve been in retail for almost 30 years and it’s really exciting when so many things can be done using technology. We can save customers time and expose them to so much more choice than we could previously. Our ecommerce assortments are broader as retailers and that’s certainly true at Walmart. We sell first-party owned inventory as well as through our marketplace. Now they can pick up their phone or be at home and open up their laptop and shop in so many different ways and have access to so many different things. It’s a lot of fun to be able to try and serve them in that way. That phenomena is happening around the world.
You can use your app to do pickup and our stores. You can use your app to have the product brought straight to your house. Obviously, you can come in the store and we are learning how to use technology inside the stores in different ways to save you time. It boils down to access to assortment and an ease of shopping here in the US and around the world that people haven’t experienced before. That’s happening in Mexico, Canada, China, India, and all over the world.
We Had To Become More Digital
There have been a lot of changes inside the company. We had to learn to work in different ways to become more digital and to put data to work in different ways. Basically, to create a seamless experience for customers. We don’t want them to sense any difference as it relates to our brand whether they are shopping inside a store, picking it up, or having it delivered. All of those differences and channels that we might have thought about in the past need to be erased and taken away. Our teams have been doing a great job doing that.
The outcome of that is this ease of shopping that’s unique and different. In our case, we’ve got so many stores so close to customers around the country it gives us a big advantage especially in being able to deliver quickly. We’ve got an express delivery system here in the United States that commits to delivering orders from our stores in less than two hours. That’s now in more than 2,000 stores and coming to stores all over the country. We are actually delivering a lot faster than two hours so far. That’s a great experience.
We believe that this is something that we can build on along with having great stores where you want to come in from time to time, stock up, and experience what’s new. Really, we think that this omni world of retail is what will end up being the winning strategy over time.
Scale Can Sometimes Be A Disadvantage
Scale can sometimes be an advantage and sometimes it’s a disadvantage. Speed also matters a lot. Creativity matters a lot. What I’m proud of is how our team is responding to create new solutions for customers. Ultimately, whether Walmart grows or not is all up to them. We are serving families, moms and dads, and customers that have a lot of different choices. Even during the pandemic period with ecommerce and all the chains that were open there was still a lot of choice.
We’ve got to compete to earn their business everyday and that’s the approach we take. Our team has really stepped up during this period and even before the pandemic to drive change and to create more solutions for customers.
Walmart CEO Doug McMillon: We Had To Become More Digital
“I don’t think we are ever going to see a return to the old New York,” says New York resident and entrepreneur James Altucher. “Sixth Avenue is empty. Something like 30-50 percent of the restaurants in New York City are probably already out of business and they’re not coming back. The offices in Midtown where most of the millions of workers go to work in New York City, why are they empty?”
James Altucher, author, podcaster, entrepreneur, and angel investor says that New York City isdead forever. Altucher discusses how the forced business closures have permanently altered how business is done making it unnecessary for employees to remain in this high cost and highly taxed city:
Manhattan Offices May Remain Empty Permanently
Sixth Avenue in Manhattan is empty. Something like 30-50 percent of the restaurants in New York City are probably already out of business and they’re not coming back. The offices in Midtown where most of the millions of workers go to work in New York City, why are they empty? They are allowed to be open but most companies now are encouraging workers to be remote. Citigroup, JPMorgan, Google, Twitter, and Facebook, they want employees to be remote for maybe years or even permanently.
This completely damages not only the economic ecosystem of New York City, the restaurants, transportation, office buildings, and commercial real estate but what happens to your tax base when all of your workers can now live anywhere they want in the country? And not even just in the suburbs either. They are going to go to all of the cities like Nashville, Miami, Austin, and Denver. They are leaving the city because they can work in places that have a cheaper cost of living and a lower tax basis.
What happens to the tax revenues of New York at the same time that deficits are soaring? All of these numbers and apocalyptic statistics what’s going to reverse that? It’s only going to get worse.
We Are Never Going To See A Return To The Old New York
I was born here and I’ve lived here for my whole adult life and I have five kids in New York City. But yes, I don’t think we are ever going to see a return to the old New York. The good news is that this means financial, creative, and artistic opportunities are going to be dispersed for the first time throughout the entire country now. It is not going to be isolated to just a few spots like New York, San Francisco, or L.A. Everybody is going to have opportunity.
What makes this different is bandwidth is ten times faster now than it was in 2008. People really can work remotely now and have an increase in productivity.
We Are Never Going To See A Return To The Old New York – James Altucher
California Assembly Bill 5, which has been upheld in a recent court ruling, literally bans the right of an individual to work for themself according to California Assemblyman Kevin Kiley (R). The law will ban hundreds of different professions and especially the hundreds of thousands of jobs created by the gig economy over the last decade.
Here is how California Assemblyman Kevin Kiley describes the laws impact:
This law, California Assembly Bill 5, has made it impractical for Uber and Lyft to operate here. Everyone saw this coming. We’ve known this whole year that this law has been devastating for people. It’s actually devastating not just for Uber and Lyft but for hundreds of professions in California.
This law, AB-5, has basically banned being an independent contractor or an independent worker. It says you have to be in the employ of someone else. They are shutting down Uber and Lyft and that will leave 100,000 of their drivers out of work. We have millions of Californians who also rely on their services. It’s going to be yet another blow to our economy which is already doing about as bad as any state in the country.
California Law Kills Uber and Lyft And The Entire Gig Economy
“We said every single opportunity is a moment where we have to pivot and move fast,” says Airbnb CEO Brian Chesky. “What actually happened was, first of all, you have to have the mindset, a mindset of hope, of optimism, and of resiliency, that we’re going to get through this. And not only are we going to get through this but every one of these crises is going to lead to a new point of innovation. Let’s look for moments and a moment happened.”
Brian Chesky, co-founder, and CEO, Airbnb, discussed with author and podcasterSimon Sinek how the pandemic crisis motivated the company to be more innovative:
Every Crisis Should Lead To A New Point Of Innovation
Andy Grove, one of the founders of Intel, said that bad companies are destroyed by a crisis, good companies survive a crisis, but great companies are defined by a crisis. I wanted us to be in that third bucket. So much of it is mindset. If you think you’re going to win, if you think that this is going to define you in a positive way and you’re going to learn something from it and it’s going to make you stronger, it kind of happens. So much of your mindset as the leader becomes the psychology of the organization and that psychology really becomes a collective consciousness. It becomes real.
So that was the thing. We said every single opportunity is a moment where we have to pivot and move fast. What actually happened was, first of all, you have to have the mindset, a mindset of hope, of optimism, and of resiliency, that we’re going to get through this. And not only are we going to get through this but every one of these crises is going to lead to a new point of innovation. Let’s look for moments and a moment happened.
In Just 14 Days We Pivoted The Entire Product Line
With social distancing, we had to shut down in-person Airbnb Experiences. Airbnb is known for homes but we also have three-hour activities that you can book with people all over the world. They got paused. Suddenly, we started doing listening sessions with our hosts. It’s important, by the way, to listen and be curious. I don’t think it’s so much in life that you have to have ideas as much as it is to be a receiver for ideas. It’s not my job to have an idea and it’s not our job for any of us to have ideas. We need to be receivers. We’re like radio antennas, we just got to get on the right signal and people will tell you things.
People told us they wanted to host but since they can’t do it in person, can they offer them online? At first, I thought to myself, no you can’t offer them online. We’re about connections in the real world. Then, I thought, well if that’s the case there’s not going to be a lot of connections anytime soon. So we quickly realized that we should get in on this. So within 14 days, we pivoted the entire product line to offer online experiences. Now we have 800 experiences and 200 Olympians including Jackie Joyner-Kersee. They do these activities where you can actually go online and meet them and remotely be on an Experience with them.
Preservation Mode Is A Very Dangerous Place To Be
I think so much of it was turning on a dime. I never wanted to just be focused on survival. If you focus on survival that’s probably all you’re going to get. All these other companies I saw were like just shuddering their businesses and just in defensive mode and preservation mode. I think preservation mode is a very dangerous place to be. The more resources the company accumulates the more they start worrying about losing things. It’s like a parent with an overactive amygdala putting the helmet on their child before they go outside because you’re worried something’s going to happen. They can never live their life.
It’s the same thing with a company. You have got to be concerned but not so concerned that you protect the company from itself and you’re afraid to do anything and you’re just preserving resources. Actually, that’s the worst possible thing ironically for shareholders. Shareholders need the company to grow. This weird obsession sometimes that some people have with serving shareholders is not actually in the shareholder’s best interest. They need companies to create value and therefore they need to be focused on doing new things people love. That’s what needs to happen to create value.
Airbnb CEO Brian Chesky: Every Crisis Should Lead To A New Point Of Innovation
“Cloud, in general, has been a big winner as a result of the work-from-home trend,” says Five9 CEO Rowan Trollope. “We’re one of those companies that have done well. AT&T was last quarter and then another big partner this quarter with CDW. This is a very exciting growth opportunity for us to build on the acceleration. We can build on that now with this extended reach with AT&T and CDW.”
Rowan Trollope, CEO of Five9, discusses how cloud businesses have benefited from the accelerated work from home trend and Five9 is no exception:
Cloud Is The Big Winner Of Work From Home Trend
Cloud, in general, has been a big winner as a result of the work-from-home trend. We’re one of those companies that have done well. CDW was a great announcement for us in this quarter. It should be a really big partnership. Probably the biggest partnership that we have announced frankly is actually AT&T which we announced last quarter. That was actually an exclusive deal. CDW is not exclusive.
AT&T is white labeling Five9 as their lead offer and they are moving incredibly fast. These partners, and particularly at AT&T, you don’t normally think about a telco as moving fast but there is something else in the water at AT&T at this point. Rich Shaw and the team over there who run AT&T for Business have just been super aggressive.
Exciting Growth Opportunity To Build On The Acceleration
There was a long drawn out process and selection process where they look for the best product in the world. They ultimately settled on Five9. AT&T was last quarter and then another big partner this quarter with CDW. They (CDW) have incredible coverage in the US.
At the end of the day, it’s really simple, we can now knock on that many more doors. There are now hundreds and hundreds of sellers, maybe thousands of sellers in these partners out there knocking on doors selling Five9. This is a very exciting growth opportunity for us to build on the acceleration, we accelerated to 29 percent last quarter. We can build on that now with this extended reach with AT&T and CDW.
Cloud Is The Big Winner Of Work From Home Trend, says Five9 CEO Rowan Trollope
“Tim Sweeney, CEO of Epic Games, feels that Fortnite is large enough and scaled enough and that Apple needs Fortnite more than Fortnite needs Apple… and Google too for that matter,” says Alex Kruglov, CEO of pop.in. “Tim very intentionally wanted to get kicked out of the store. There is no other way to explain what they did so that they can make this very public and so they can have a lawsuit.”
Apple and Google Must Reduce The Tax On Developers
I definitely like the idea of challenging both the Apple store and the Google store in getting them to reduce the tax that they charge all of the developers. There are two potential issues here. Issue number one is that the tax is decided by Apple and Google and can be changed at any time. There is nothing that developers can do because there is no other place we can go to. There is no other way to get on the devices and a person usually has only one device.
Secondly, kind of similar to TicketMaster in the 90s, when Pearl Jam went against them, they control the entire ecosystem. This includes the ability to advertise within your store to get your app downloaded. I love Apple’s clean well-lit ecosystem. I love what they’ve built. But if there is a bigger player who has leverage who can help the rest of us run more successful and profitable businesses I am all for it.
Apple Needs Fortnite More Than Fortnite Needs Apple
Tim Sweeney (CEO of Epic Games) is doing this very deliberatively. There is no question about it. If you follow Tim on Twitter or just in general, you know that he has been on this campaign for quite some time, since before they started their own ecosystem. Epic has its own store and they let developers opt-in to their fee system where they charge 12 percent.
He feels that Fortnite is large enough and scaled enough and that Apple needs Fortnite more than Fortnite needs Apple… and Google too for that matter. Tim very intentionally wanted to get kicked out of the store. There is no other way to explain what they did so that they can make this very public and so they can have a lawsuit.
Apple Under Pressure To Reduce App Store Fees
Apple has been perceived as the good guy. Then on the other side with Google where with Facebook they are monopolistic given that they control essentially the entirety of the advertising system. So where do I think this ends up given the scrutiny that Apple is facing? I think that there is a very good chance that they will come back and reduce the fees and also opt-in to something firm as opposed to the set of rules that are all over the place.
This is a pretty inexpensive way for both Apple and Google to say they are listening (to developers). We’ve heard the developers and we are going to do the right thing. I’m predicting this but this is definitely not what they have done over the last decade.
Apple Needs Fortnite More Than Fortnite Needs Apple says Alex Kruglov, CEO of pop.in
“I think taking 30 percent from app developers is egregious,” says Alex Kantrowitz, publisher of the Big Technology newsletter. “It feels like protection money to me. As long as the company continues to rely on other people’s money to make its bottom line it’s going to turn slodgy, slow, bureaucratic, and I think it will eventually fall apart. Apple should back down because rent collecting is bad for its business long term.”
I don’t think it’s any accident that Epic went right after Apple’s brand which Apple has worked very hard to cultivate. Apple is a luxury product. What Epic is doing is trying to make this a battle for Apple where it says, do you want 30 percent of our revenue in the app store? Now you have to go from a company that everybody looks up to to a company that owns what it does, which is rent collects on the app store and takes 30 percent of our revenue.
That’s why Epic has had this public relations campaign ready to go. It’s why it spoke about Apple’s history in the lawsuit. It’s why this was so planned, one move after the other, to show the public that this is actually what Apple is. If Apple is going to take our money they better own what they’re doing.
Apple Taking 30 Percent From Developers Is Egregious
What do developers get from the 30 percent that they pay Apple in terms of the revenue that they hand over to stay on the app store? They get the right to exist, that’s one thing. They get quick payments, that’s another. What else are they getting and is that amount of money actually worth it? Would they be paying anybody else that amount of money unless that other person had a monopoly?
I don’t think it is worth it. I think 30 percent is egregious. It feels like protection money to me. Maybe we get somewhere in the 10 -15 percent range, that seems like the right amount for a developer to pay to Apple because Apple does provide some value. But the number right now is just totally out of whack and it exists because Apple has a monopoly on that store. It’s good that we are seeing somebody challenge what Apple’s doing.
Apple Is The Only Show In Town For Developers
Apple is basically the only show in town. If you don’t like what’s going on inside Walmart you go to your neighborhood store. If you don’t like what’s going inside the Apple app store where are you going to go? Maybe you can go to Google but Google is doing the same exact thing. I do think that Apple should definitely charge developers for what they’re getting.
The question is do developers have any wiggle room so that they can have an opportunity to negotiate with a company like Apple? What Epic is showing is that is not really the case. This is how markets (should) work. You want to have the ability for the supplier and the demander to figure out a price that makes sense versus the supplier just setting the price and your sort of out of the market otherwise.
Apple Will Eventually Fall Apart If It Doesn’t Back Down
Apple should back down because rent collecting is bad for its business long term. You have to decide as a business, do you want to make your money milking your asset or do you want to make your money innovating into the future? Right now Apple has decided that it wants to be a rent collector. It’s worked out fine under Tim Cook, I won’t deny that. If you think about Apples’ long term sustainability does it want to build a culture where it’s business is taking a fee off of other people’s businesses or does it want to force itself to invent its way into the future?
If I’m Apple I’m thinking long term. I want to have a more inventive culture, not a more asset milking culture. As long as the company continues to rely on other people’s money to make its bottom line it’s going to turn slodgy, slow, bureaucratic, and I think it will eventually fall apart. If I’m Apple, the case right here is to back down and think about where I’m going in the long term and it should be in an inventive way and not a rent seeking way.
Alex Kantrowitz of Big Technology: Apple Will Eventually Fall Apart If It Doesn’t Back Down
Lyft is warning it may join Uber in shuttering operations in California following a preliminary injunction classifying its drivers as employees.
Uber, Lyft and the state of California have been locked in a battle over how to classify the two companies’ drivers. Under the Assembly Bill 5, gig workers are considered employees if they are critical to a company’s business. The law has profound implications for companies like Uber and Lyft, whose entire model is geared around independent contractors.
In his ruling, the judge granted a preliminary injunction preventing Uber and Lyft from classifying their drivers as independent contractors, effectively making them employees. While both companies plan to appeal the ruling, according to The Verge, Lyft President John Zimmer made it clear that losing the appeal would result in Lyft leaving the state. In a call with investors, he said: “If our efforts here are not successful it would force us to suspend operations in California.”
Uber and Lyft’s case will have far-reaching consequences for the gig economy in California and beyond.
