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The days when it seemed Elon Musk could do no wrong are long over. Some of the controversies surrounding the world’s richest person comes from his everywhere-everything-all-at-once celebrity status, not to mention his brazen business stances and willingness to amplify misinformation and conspiracy theories, most recently hurricane relief efforts.
But the latest round of disapproval comes from investors who were unimpressed with Tesla’s much-hyped “We, Robot” cybertaxi reveal last Thursday night. How unimpressed were they? Tesla’s already battered stock dropped more than 8% after markets opened on Friday. Musk arrived at the invite-only event at Warner Brothers movie studio in Burbank, California in a self-driving Cybercab, which looks like a smaller and more rounded version of the blocky Cybertruck, reports Forbes Richard Nieva. The Cybercab has no steering wheel or pedals inside and has doors that open upwards. Musk said Cybercabs would go on sale by 2026 and cost less than $30,000, but he’s known to have been wildly inaccurate with timelines. (Nieva writes Musk has promised a fleet of robotaxis every year since 2019.)
Tesla is not the first company to work on robotaxis, and stories of the problems self-driving vehicles face have been in the headlines for more than a year. Cruise’s self-driving taxis had their permit to operate in California revoked earlier this year after incidents involving pedestrians, while Alphabet venture Waymo has been slowly ramping up its technology and partnerships as it slowly deploys more vehicles on the roads in Phoenix, San Francisco and Los Angeles. Forbes’ Alan Ohnsman writes that Waymo is much closer to launching a self-driving taxi than Tesla.
Musk’s new vision for Tesla seems to have robotaxis at its center—not more affordable electric vehicles, which Tesla reportedly put on the backburner to develop the Cybercab. Analysts found Thursday night’s presentation underwhelming, vague and lacking detail. And Tesla’s original business of creating electric vehicles has been slowing down, with its stock dropping earlier this month on lower-than-expected Q3 car deliveries. It seems clear that investors want something different from Tesla right now—or at least focus on personal vehicles and not self-driving taxis. The company is scheduled to deliver its quarterly earnings next week, so we’llthe company will have another opportunity to see how far Elon Musk’s choices are from those of investors.
The business and investor community relies on Crunchbase’s detailed data and statistics when looking at startups, funding and opportunities. When Chief Product Officer Megh Gautam came aboard just over a year ago, his goal was to integrate AI into the platform to make this data both more useful and user-friendly. I talked to him about Crunchbase’s AI journey, and an excerpt from our conversation is later in this newsletter.
ECONOMIC INDICATORS
Headline consumer price index inflation in September was 2.4%, the lowest rate since February 2021, according to reports last Thursday. Even though the lower rate looks promising, some analysts are still wary of the U.S.’s economic progress. Economists forecast a 2.3% inflation rate, so while inflation overall is moderating and coming down to policymakers’ target 2%, there are many who think it should be happening faster. This is the first time inflation figures have missed economists’ projections since March. Markets dropped a bit on Thursday’s CPI report, but rebounded on Friday, with the S&P 500 closing above 5,800 for the first time.
As economic figures are getting closer to what policymakers have deemed “normal,” the likelihood of another big interest rate cut at next month’s meeting of the Federal Reserve Open Market Committee is dropping. According to CME FedWatch, 88.5% of economists expect a quarter-point cut at the meeting, while the other 11.5% expect no action. Minutes released last week from September’s meeting, when the Fed cut rates by a half percent, showed a divide among members. While a “substantial majority” supported the 0.5% cut, “some” wanted a smaller 0.25% cut—including member Michelle Bowman, who cast the first dissenting vote on interest rates since 2005.
Regardless of rate cuts, recent revisions to Bureau of Economic Analysts data show that the economy is getting back on track on the consumer side. Forbes senior contributor Bill Conerly writes that consumer savings were 78% higher than previously projected, meaning consumers have more spending power.
HUMAN CAPITAL
Not only has Boeing hit a stalemate in negotiations with more than 30,000 Pacific Northwest workers, but the company also expects huge earnings decreases and announced sizable job cuts. The aerospace company said Friday it will cut 10% of its total workforce, about 17,000 people. In a statement, CEO Kelly Ortberg said the company is in a difficult position, and it needs to “make structural changes to ensure we can stay competitive and deliver for our customers over the long term.” Boeing, which is scheduled to report its latest quarterly earnings next week, issued a preliminary statement last week that estimated a loss of $9.97 per share.
The company had been negotiating with the International Association of Machinists and Aerospace Workers since they went on strike a month ago. Last week, Boeing withdrew its pay raise offer as negotiations between both parties fell apart. Boeing released its “best and final offer” last month: raises totaling 30% over four years, a ratification bonus of $6,000 and the reinstatement of an annual productivity bonus. The aerospace workers want raises, but are also pushing for the reinstatement of Boeing’s pension plan, which has been replaced with a 401(k) plan. Boeing filed an unfair labor practice charge against the union last Thursday, saying that they were not bargaining in good faith, “did not seriously consider” the company’s proposal, and made “non-negotiable demands” they could not meet, the Seattle Times reported. The strike has already cost Boeing nearly $5 billion, according to an analysis from Anderson Economic Group reported by CNN.
NOTABLE NEWS
Starting this quarter, Home Depot corporate staff will be required to spend some time outside their offices in the company’s trademark orange aprons. All corporate employees, including executives and remote workers, will have to work at least one eight-hour shift at one of the company’s retail stores each quarter. Forbes senior contributor Jack Kelly writes this is intended to bridge the gap between the home improvement giant’s corporate office and its retail business, ensuring that all of the staff members who make decisions that impact the stores have some context and understanding of the retail floor. It’s an uncommon policy, but Kelly writes a similar program at DoorDash, requiring all corporate employees to do at least one delivery a month, is generally seen as a positive initiative promoting empathy and understanding at the business.
TOMORROW’S TRENDS
How Crunchbase Is Using AI To Help Decision Makers
After working at online companies including Twilio and Dropbox, Megh Gautam joined Crunchbase as its chief product officer in summer 2023. He came to the company inspired by the possibilities of generative AI, planning to use the technology on Crunchbase’s vast troves of company and funding data to make the service more useful. Crunchbase has rolled out several new AI-enabled features, including smarter search and filters, and Predictions and Insights that aim to tell more of the backstory behind how a company is doing and how it’s likely to fare in the future.
I talked to him about bringing AI to Crunchbase, improving the platform’s utility, and what the future holds. This conversation has been edited for length, clarity and continuity. A longer version is available here.
Tell me a little bit about your plans to build Crunchbase’s services and use AI.
Gautam: We’ve been investing in old-school AI for a while, where we had prediction models and regression models. When the gen AI and LLMs came to life, I was singularly focused on how this helps solve our customers’ needs. One of my colleagues was like, ‘It’s AI in the service of what?’ We have to be really thoughtful about what problems we are solving for our customers.
I’m a big proponent of the jobs-to-be-done methodology, which is customers, prospects— people “hire” the product to do a job for them. For the intern, it is finding a job. For the CEO, it is how do I raise more money, it’s finding investors. If you know what you’re looking for, Crunchbase has the highest quality data. It’s all a winner-take-all market because we are serving this market. We know exactly what queries are working. We’re optimizing for that.
We were basically like, there’s an easy way for us to use the benefits of OpenAI, Claude and all of the other systems to make our jobs easier, and to build the foundation to serve our customers better. We took some of the new-school learning gen AI LLMs to build a score for what companies people are looking at. Because at the end of the day, [users are asking], “Is this worth my time? Is this company growing?” Instead of you having to dig through when was the last time they raised, who was the lead investor, how many follow-on rounds have they had?— we’ll just tell you: This company is growing, according to us. That was one huge foot into the door, for us to make the questions that our customers are asking for obvious.
That gets us to the top of the pyramid. We have to help people make decisions. My thesis when I walked in was, Crunchbase can help people make better decisions.
On this journey with Crunchbase, is there anything you’ve found surprising, in either a good or bad way?
When I joined, we made a dedicated effort to listen to all of our customers. This included customers who’ve been around for a while and customers who we lost. It was fascinating, the Swiss Army knife of use cases which we are being used for. Two is how much of the new things and improvements we’re building that don’t even make it to our customers because we haven’t done a great job of telling them how it relates to them. Straddling those two—making sure we have a consistent pulse check with our customers, and we do as good a job as we can of telling people, ‘There [are] new things here that can help you with your job’—really connecting with our customers’ use cases and their jobs to be done. I worked at Dropbox before, where we did everything from media creation to personal files. As you can imagine, it’s pretty horizontal. Everyone can use it for a lot of things. But I find myself just shocked at how many different kinds of use cases Crunchbase [has], from regular prospecting to VCs to interesting use cases that I would never have thought of. It’s geographically disparate..
A big part of having brand recognition is to live up to and guide the market onto a journey where we continue to be trusted. As a steward of that, I find that to be the most incredibly rewarding and surprising—in a good way—part of the job.
What kind of advice would you give to other companies that are trying to get on the same sort of an AI journey, taking what they have and using AI to make it serve customers in a way it hadn’t been able to before?
One of the decisions we made early on that I’m thankful for is we’re pretty flexible. We haven’t been backed into a particular architecture or horizontal model provider. As things change in the market as a whole—and you’ve seen how the LLM leaderboard changes basically on a weekly basis—we are able to pivot and absorb the best of all the worlds available to us. [Suggestion] two is really leaning in on what’s different. It’s either your data or your workflow or some sort of an edge which you provide with the combination of them, and really leaning into that. AI has brought what I would call the barrier to everything way down. You have people chatting with an agent to do something, instead of having to learn UI. Simplifying, bringing interactions into the fore and not relying on a complex suite of levers and checks and boxes to go get their work done is a critical part of it.
FACTS + COMMENTS
Amazon Pharmacy announced major expansion plans last week, increasing the reach of its same-day medication delivery using its logistics and automation technology.
20: New cities that will have Amazon Pharmacies, including Boston, Dallas, Minneapolis, Philadelphia and San Diego
45%: Proportion of U.S. customers Amazon estimates will be eligible for same-day delivery of prescription medication by the end of 2025
‘We’re re-envisioning medication delivery to focus on what customers need to better engage in their health’: Amazon Pharmacy VP John Love said in the announcement
STRATEGIES + ADVICE
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Messages from presidential candidates are everywhere nowadays, and no matter who wins, some of those strategies and tactics will continue to resonate. Here are some personal branding lessons executives can learn from candidates through the years.
VIDEO
QUIZ
A new Sam’s Club store in Grapevine, Texas, is testing an innovation for the warehouse chain. What is it?
A. It’s a themed store, only selling electronics
B. It has no checkout lanes, with shoppers using an app to scan purchases
C. It’s virtual shopping only, and all purchases are either delivered or picked up curbside
D. The vast majority of stockroom employees are replaced by automation
See if you got the answer right here.