EV Truck Race, Retail Spending Stop, Coinbase Layoffs, MLS on APPL

June 15, 2022
This Wednesday we’re surveying the consumer landscape starting with the standings in the EV Truck race. We also talk about retail spending shifts, Coinbase’s about face with its staff, and finally, streaming for a sport that actually makes sense from a consumer’s standpoint.
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Cyber truck release is more than a year away still, behind most other EV truck launches

  • Ford Lightning, EV Hummer, Rivian R1T already rolling
  • EV Silverado Spring 2023 and GMC Sierra in the Fall
  • EV Ram expected in 2024
  • Ford Super Duty in 2025
  • New leaked cybertruck photos suggest dual screen layout, adding instrument cluster, which has been blacked out until now, to the standard Tesla center screen
  • Take Away: A head start doesn’t mean you’ve won the race, but it sure is an advantage

Economists predict retail spending growth slows to near stop in May

  • Economists surveyed by The Wall Street Journal expect that retail sales—a measure of spending at stores, online and in restaurants—rose a seasonally adjusted 0.1% in May from the previous month, easing from April’s 0.9% increase

The Commerce Department is set to release May retail-sales data today at 8:30 a.m. ET

  • Take Away: Affordability is key. The right inventory is where it starts.
  • Coinbase lays off almost a fifth of its entire workforce (1100 employees)
  • CEO Brian Armstrong accepted accountability for his decision to drastically overscale over the past 2 years and cited need to manage expenses and increase efficiency
  • News was delivered via personal emails as company emails were shut off prior to notifying those affected in a very empathetic tone in the company memo
  • Take Away: In times of volatility, those with the best fundamentals win.

Apple will be the exclusive streaming partner for MLS until your kids are grown (10 yrs)

  • MLS season ticket-holders will automatically have access to MLS’ streaming service on the Apple TV app
  • Take Away: Consumers want it all in one place and don’t want to work to get it there

SPEAKERS

Kyle Mountsier, Paul Daly


Paul Daly  00:25

Yo, it is Wednesday, troublemakers Wednesday. And when Mark McCarthy says on social media that we replace ESPN First Take for him with this show. I know he's just got to bring the Heat Man. That's a high bar. That is a high bar,


Kyle Mountsier  00:44

he sent me that message. And I was, it was 10 o'clock at night and I was like, hit the floor. I was like, Okay,


Paul Daly  00:51

we're gonna post that up, we're gonna post that up on our LinkedIn. But like, look, it is really cool to know that the energy that we're trying to bring this morning and the information is valuable to people's day.


Kyle Mountsier  01:04

It's so good and yours that we put our heart and soul into it. Like we really wake up, we start sharing articles, we start sharing stuff, right? In the morning, we take stuff from the previous day, and we just pack in as much energy as much information as much like thoughts and ideas to kind of like the thing going and we just want it to be that for so many people. And since the thing.


Paul Daly  01:25

Good morning, Melvin. Good morning, Colby. Good. It's good to see you here popping in on live streams. I didn't get to talk about what we're talking about today. But today we're talking about the Eevee truck race, we're talking about retail spending and how it's kind of like little grinding to a halt there. Coinbase had a couple layoffs, right. And the last story is what I'm most excited to talk about for you, Kyle, the MLS is going to be an apple,


Kyle Mountsier  01:47

y'all better just give me a whole nother


Paul Daly  01:49

we're gonna we're gonna end on that one. We're gonna end on that one. Because when we're curating the day shows really we do. There's a lot of like downer news to talk about these days. Right? And like, no one wants to show up to hear about the downer things right. So maybe if we talk about the bad news, in a good way, just getting a little for all of you, Robin Hood Men in Tights fans out there, you know exactly what I'm talking about. But no, I mean, we have to talk about the real news. But at the same time, we get to talk about some fun stuff. So we always try to like, bring a little balance to the force in the morning show. But so before we talked about that, we got to we got to talk about it. So do calm for just a second. Because we can't we can't talk about a coup yet. But we locked the presenting sponsor yesterday. And we collaborator, Paul collaborator, hurry, man, oh habits, man, how many we've had 178 sales calls, where we told everyone that sponsors are now collaborating,


Kyle Mountsier  02:42

right? And I say, sponsored, no, we got a collaborator. And I'm really excited because this is what's cool. We get around the table with so many people, industry partners, and they're like, yeah, that's, that's actually what I want to do, that they are tired of the like, just put my name on a banner, there's something active about the way that brands want to be recognized. And I think that, that dealers are also acting in that way, they're not gonna just want transactions, we want to be recognized as something that you remember. And so for us to kind of give that to the industry, hopefully, and give some of that impetus. We're really excited about that.


Paul Daly  03:23

So we have we have a presenting collaborator, that is, you know, we're in the final stages of just locking in some details, we have a bunch of other collaborators that have already signed up. And we have some really fun and incredible activations, from our collaborators into this event, it is going to be anything but normal, anything but standard, we're starting to release some information about the venue, we're going to release some videos really soon, where we're going to do walkthroughs of all the rooms we're going to be. And so if you haven't yet, unfortunately, if you're an industry partner, and you're not at an event, collaborators slash sponsor, tickets are very, very limited, because we only have 600 seats, 400 of them automatically allocated to dealers. And so we have 50, industry partner tickets going that are going to be available, the only ones that will be available are going to go to our pre signup list, which already has more a lot more than 50 people on it. So if you want to be in the running for one of the industry partner tickets and get a spot where you can buy a ticket as an industry partner, go to asotucon.com and sign up on the pre registered list. And we said this yesterday, we'll say it again, if you have the poet, if you know what that is. That was an NFT that we issued. On our year end extravaganza in December, we said we're going to have some utility into it. We know this is one of them. If you have the poll app, and you're on that pre signup list, you automatically are going to have the ability to buy a ticket. So there's there's a little bit of a insider thing that's going to happen. So go to asotucon.com Sign up for the pre register list. Even if your dealer you'll be the first to know about everything that's coming out and we have so much more to announce. And we're like three months away. That's


Kyle Mountsier  04:53

when we realized that yesterday we're on a car like less than three months. Let's go Alright, we got some news to get news. Alright guys, let's get into it. Let's get into it. So cybertruck Spa tell us a little bit about there's a whole bunch happening. And


Paul Daly  05:08

so the cybertruck cybertruck was the first Evie truck to be announced, if you remember feels like forever ago at this point. And it was like look at this weird looking thing. Wow, that looks amazing. Oh, I lucked out when Evie trucker be able to tow this much do this much, right. And then it kind of went in his big hiatus where it's just like, oh, it's delayed, delayed, delayed COVID Delayed delayed. Now they're saying that they're expecting it in q3 or q4 of 2023. So it's not this year, you have more than a year to wait, which means that traditional OEMs I know I hate calling them traditional OEMs. But you just know what we mean we say it. We have all these other Eevee trucks that now have beat it or will beat it to the market, which provides a great opportunity for just evey truck makers. Right. So we have the Ford lightning. We have the Evie Hummer that's rolling around that thing's cheap, too. Like I should buy two of those. I wonder how many Chevy bolts Evie Hummer costs a lot. The rivian r1 T. They're already out. And then coming soon spring of 2023, the electric Silverado and the GMC Sierra, and then maybe the cybertruck. So I think it's a it's it's an interesting way we never would have predicted this 24 months ago. No,


Kyle Mountsier  06:19

you wouldn't have and I what I really think is interesting is some of these new OEMs that are coming into the market are recognizing just how hard it is to scale manufacturing. Right? And do it you know, you think about the number and types of factories that GM or Ford have on hand to produce the 20 Plus models that they currently have in their inventory. And the minimal level of retooling that it's going to take to go from ice truck to evey trunking instead of like, oh Tesla started, we need to build a whole manufacturing process to get this vehicle out. Like it's not like you can you know,


Paul Daly  07:03

did they did also say we're going to stamp the body out of one piece of you know, unobtainium, I don't know what you call it, whatever stainless steel. Right? But still, but still your point holds? Yeah,


Kyle Mountsier  07:16

it's it's like all of the production, all of the manufacturing, all of the supply chain management, all of the all of the distribution model is just something that, you know, you think about kind of taking the cue and then leap frogging is a real opportunity. And actually, you know, back to asotucon, we're really excited to most likely have Jim McKelvey there at speaking and, you know, maybe shouldn't have announced that yet. But even if he's not, the book, the innovation stack has really been impactful to us. And this is a place where legacy OEMs as well as, like dealerships have the opportunity to go, let me pull the best from all these worlds, pull it together, and then look at the competition and go, Great. Now I can move forward. We've been talking about this a lot actually, in the in the idea of like, a siloed approach to technology or a multi conglomeration of technology that actually allows you to be more impactful in the customer experience and OEMs are taking that from the Evie perspective as a takeaway for me,


Paul Daly  08:19

right? It's used as many things as you can that already exist, and stack them in a new way for OEMs. Just, there are a lot of things that already exist for them, right, that just aren't available to you as manufacturers. So, you know, there's also a few other things in the article that we linked up, bought a news article, you know, some leaked photos of the interior of the cybertruck that, you know, kind of show a little bit of the center instrument cluster or the the instrument cluster that we hadn't seen before. And, you know, so there's two links in there in the show notes or in the podcast notes,


Kyle Mountsier  08:47

you can definitely bet on the fact that Apple CarPlay 2.0 is definitely a part of as part of,


Paul Daly  08:54

that'd be an interesting collab. I don't know, did they play well together? I guess? I don't know. I guess, I don't know. Actually, I don't know enough about the Tesla operating. We


Kyle Mountsier  09:03

have the tire phone coming out at the same time as the Tesla truck. Who knows Good grief that comes with it.


Paul Daly  09:09

Okay, moving on. Moving on. So, Wall Street Journal article, a economists surveyed by The Wall Street Journal predicting that retail spending growth is slowing, or will slow to a mere stop. And they think their report is coming out today. And we'll find out what the actual number is. But the prediction is that like it's going to show that retail spending has not has stopped growing, right, or is, you know, dropped back to almost like, you know, point 1% Or something like this. You know, and this is a poll really based on a measurement of spending at online and retail stores in restaurants. And, you know, the report comes out today. So we'll see, we'll see about Yeah.


Kyle Mountsier  09:48

And I think just to like clarify, it doesn't mean that consumer spending is stop, it just means that the growth has stopped, right? Oh, it's just leveling out. It's like okay, we're just cut Continuing as things are because over the past couple years, we've seen this increase continually of consumer spending, meaning people are, are taking those disposable dollars and spending that at a higher rate every single month. And that's slowing to like a, like a leveling off like a plateauing? Well, a plateau is


Paul Daly  10:19

one way to think about it, you know, how it just visually in my mind is you're kind of doing this with your hand, you know, those rides like the buccaneer ship that you go on. And it just swings from one way, and it swings another way. And if you've ever been on that thing, you know what that moment is when you get to the pinnacle, and it slows and then it stops. You know what comes after that right? The other direction. So yes, we're either plateauing or we're just at the tip of that fig. And that Buccaneer ships about the head down the other way, they gave a great example, in this Wall Street Journal article, I'm gonna read it from there of a gentleman named Logan Bell, who's 33 years old works in Chicago as a bartender and substitute teacher, he said, he's driving for only essential reasons now, such as commuting to work, so he can save money on gas, he said, he's watching his spending at the grocery store by cutting down on purchases of red meat, and opting for cheaper alternatives such as pork and non organic chicken. So that's just I thought that was just like a real like, a human element of like, Hey, this guy, this guy is actually this is how his behaviors are changing, right? Gas is too expensive grocery store, he's got to watch his budget when maybe he was just spending more freely before. And I think all those things added up together, just indicate, you know, people paying attention. So honestly, these are the


Kyle Mountsier  11:29

here's, here's what's weird. And I'm just going to encourage people on this one, right? It's like, the all the reports from like, banks, credit cards, all of the places are still saying there is a high level of disposable income in the market. Or disposable, like, like net assets, right? Yep. Yep, we're seeing consumer spending. So at some level, we have the capacity as a culture to flip the script. And I know that our audience is like just this much of a culture, but like, we can actually flip the script and just stop tell, like, we were telling the story, because we want you to be aware, but not fearful of this future. And I just think that, like there is there is a there's a pullback, right, because you see inflation and you see interest rates, but at the same time, there's still disposable assets that that are in bank accounts. And so figuring out how to leverage those leverage that communication to make sure that that you are encouraging spending within businesses is I don't think a bad thing.


Paul Daly  12:35

No, I don't I don't think so either. And, you know, situations across economic skills are very different. Right? And unfortunately, such situations like this hit, hit, you know, the, the lower income levels the hardest, the first, right and then but we usually see is like in so it really the question is how deep does it go? Because like you said, The article also does mention, you know, that this gentleman has like a nest egg of savings. Funny that you mentioned that, right? I said that like you never know, in case like another COVID Like thing happens, right? So I think it obviously changes people's mentality, like your grandparents, right? They would save everything, they wouldn't waste anything, because they lived through a period where they didn't have a lot, right. So you're just gonna see the mindset change. You know, we talked about this yesterday, we're gonna keep beating the drum is that the takeaway from stuff like this, is that for dealers, like affordability is like just becoming the most important thing when it comes to inventory, right? And the things you can control, specifically used car inventory, having the inventory and do what you need to do to get the inventory that actually matches the mentality, and the economic status, or the economic, at least mindset of the people in your market. No two markets are the same, are really going to be something that you can control that in the end will win. Alright, so we're gonna go from some, some some bad news. We're just gonna go from some news to some other new know Coinbase we talk about crypto a lot, right? Coinbase laid off a fifth 1/5 20% or 1100 people from its workforce. Nuts. And because because there's the scale of so I thought, so there's a company memo and I kind of I linked it up in here. I got question marks on just one. I couldn't look it up, but this this might change. Okay, so a CEO Brian Armstrong said, I take accountability. We scaled too quickly, too aggressively. And now we have to control our expenses if we're going to make it and I did link up this this the memo that he sent out because at first glance, you know, they they actually release this memo and then basically turned off the email accounts of anyone who was going to be let go and they notified them specifically through their personal email account. And I was like, wow, that's That's harsh. Right and then I read this and I thought that it was a really great way to empathetically handle a tough situation right scale really quickly, all this momentum and Frenzy they got sucked up in it now that to scale back so they can be out operationally efficient and weather the storm. And he said, If I'm going to read this for a sec, because I think it's cool, like it's just a cool lesson, if you're affected, you will receive this notification in your personal email. Because we made the decision to cut access to Coinbase systems for affected employees, I realized the removal of access will feel sudden and unexpected. And this is not the experience, I want it for you. Given the number of employees who have access to sensitive consumer data. It's unfortunate, it was unfortunately, the only practical choice to ensure that not even a single person made a rash decision. And then it goes on to say everyone affected will have a minimum of 14 weeks severance plus an additional two weeks for every year of employment with coin base for months of health benefits and access to talent hub to help you find another place you will also talented and I know you'll find a great place and we'll do everything we can to help you


Kyle Mountsier  15:45

not just access to talent hub, where members of coin bases team will work to connect you with open positions at other firms, including portfolio companies from Coinbase ventures and other top crypto VC funds. Bingo. So I just is the most active you could possibly be and I get like the data access that that a person has at Coinbase like cutting off that email if you start to look at it


Paul Daly  16:09

objectively dangerous. Absolutely. It only takes one, right? Yep. Oh, it takes one and your headline everywhere and millions of people could be affected. And it was really a responsible thing. So at first, I winced a little bit at the headline. And then actually, when I read it, I was like, that's actually pretty, pretty good leadership move. I mean, anyone who has been a leader knows that you have to make decisions that everyone's not gonna agree with those decisions. And if you lead with care and empathy, you know, I mean that that's sometimes all you can do, right? It's just the way it is. So there you go, we got all that stuff out of there. Right?


Kyle Mountsier  16:41

Look, let's talk let me just say, Okay, let's finish because Brian benstock David speeds back to friends of ours have have consistently in this has kind of started to become an a phrase that a lot of automotive is using. And a lot of just every, like, every business is using this fix the roof while the sun is shining. And I think that like right now Coinbase is cutting and other companies are a leading indicator of the clouds coming right in some way. Right? It doesn't matter what it is, at minimum interest rates are going up. And so there is some cloud in consumer affordability or purchasing behavior. Right. So if, like, if you haven't started fixing the roof, now's a really, really good time.


Paul Daly  17:33

I think I just felt a drizzle, you know, when it's like, isn't raining. I think that someone else was like, Yeah, I felt one too, right. We're there we are there. That's a really great, that's a really great point. So like, in the times of volatility, right, take away the fundamentals always when fundamentals when in volatile times, and volatile times, if you haven't noticed, all right, the last or even save it to the end, because I knew we were gonna need it after all that, man, I'm gonna let you do this one, because I just got excited for you. Because your killer morning.


Kyle Mountsier  18:05

You know, I like all of the social media, things that are associated with soccer, find their way to the top of my feed 100% of time, it's like, and that advances over automotive, just because I just I'm so passionate about it. And yesterday, MLS and Apple announced that Apple acquired the rights to 10 years of exclusive streaming now. I'll give the one issue and then and and all the good. The one issue is they have talked about what it is, yeah, they've pulled back on all local broadcast networks. So you know, there is the loss ratio on like local broadcast networks and and, and those providers being able to play these games in a local sphere. But I'm just convinced that the experience on Apple and the attention to like the global brand of soccer and bringing it to MLS is just going to be so Right. Like I think they're going to do some cool stuff experientially, the notification network around the whole brand is going to be really cool. And shoot. It really it's a perfect brand match because of the type of fan base that follows soccer typically is a very kind of like innovative forward thinking typically younger demographic, especially in America. And I just think that for soccer fans for MLS it is absolutely the right move. And look, here's the thing, if you if this is like locking in a TV partnership for the NFL 15 years ago, right in like a height of TV viewership growth to be locked in for 10 years is like hedging against so much ad sponsored dollars. It is nuts with the level of growth in soccer right now.


Paul Daly  19:56

So in case you missed it in the midst of all that passion The layman's terms are that if you want to watch a soccer game, you'll be able to watch it in one place with one subscription in the Apple ecosystem for 10 years.


Kyle Mountsier  20:11

So wait, there's more. And this is where like businesses have to get. Billy Mays. Businesses have to get this right. Is they gate Apple is giving access to the streaming service in the Apple App to all season ticket holders. So watch, that's my favorite season ticket holders. And you increase subscription services, which on both sides increases access to sponsor ad dollars


Paul Daly  20:40

sponsor ad dollars, and it just increases the awareness of the brand and the sport in general, right? You think and think of like, how do you get people to be a soccer fan? Right? Because that's where, like, yeah, you can buy the rights for the existing base. But the hedging, like the investment, saying like, hey, like 10 years from now, we're still gonna have a lock on this thing, or at least nine years from now. But just think of how old your kids are gonna be in 10 years. I know Dang, my life is gonna be way different in 10 years, but not they won't be different. I can watch MLS on Apple, which, if my life doesn't change will mean my life doesn't change at all. But yeah, I'm thinking I really do have this hunch that like, I'm gonna like, get into get into soccer. I just have the field. I mean, maybe it's because we're together but you said soccer people are my people and I can get that I can get that. I know we took you on a little bit of a trip today. But that's okay, because Wednesday's are good for trips. So go out there think about these things. But don't panic, right? Just do control the things you can do. And go to a show to conduct calm and pre register because you want to see what September