New CEOs for Nike, Starbucks and Boeing — Who's Next?

Bob, how is the big city treating you?

[00:00:22] Bob Lang: Oh, it's great, Chris and Lindsay. Actually, what's fascinating is that the town here is really packed and we walked around Times Square and some other areas and Of New York City down in Soho as well, too, but it's a town. It's packed. I really couldn't understand why, but then I realized that the U.

N. General Assembly meeting is going on this week, and it was last week as well, too. So the, town is packed with a lot of people. It's not just at the meeting, obviously, but you know, here we are at the end of summer, beginning of fall. We have a lot of people traveling right now.

[00:00:52] Chris Versace: Yeah, so Bob, that's the exact reason or one of the reasons why I'm not there joining you because my flight, as I was explaining to some folks, got waylaid with multiple ground stops, VIPs, and all this other nonsense before my flight was ultimately canceled. So I'm still, I'm still at the home office, the home base.

Lindsay, checking in with you. How are you?

[00:01:12] Lindsey Bell: I'm good. I'm still here in Charlotte. Everything's good. The weather's starting to get a little more fall like but still warm for the South. One thing I've been surprised because I lived in New York City for a long time in Charlotte. I'm surprised at how hot it stays here.

Like, I thought Charlotte was a little more north.

[00:01:30] Chris Versace: So I'll tell you what, Lindsay, in 1998, I moved from New York down to the D. C. area in northern Virginia. And one of the great things about it. Is that the spring comes earlier and fall is extended, so you really do have more more you know, fun time, if you will, in the spring and the fall compared to, you know, Connecticut or, you know, that other state up there in the New England where Bob lives, but that's a whole nother story.

Anyway, folks, got a full show for you today. We're going to be talking about CEO turnovers. Why is that happening? What companies might be next? We, you know, the Fed is talking about progress on deflation, but we're seeing deflation in EVs. Why is that happening? Is it a good thing? Or is it indication that there are problems out there in EV land?

And finally, who do you trust more, folks? Companies or the government? With all that, we'll be right back.

All right, Bob and Lindsay, let's get, let's get started here. Let me give you a little bit of a primer here because, you know, last few weeks we've heard about a CEO moving from Chipotle to Starbucks. And then last week, not quite out of the blue, but the CEO of Nike, he's out, they're bringing back an old guy in who used to be there before.

But, you know, if you would just look at those two, you would say, wow. That's, that's kind of high profile. Something must be going on. But here's the deal, folks. If you look at the data from Challenger Gray and Christmas, the same folks that bring you the monthly job cuts report, something I love to dig into all the way through the first four or five months of the year, over a thousand CEOs in the U.

S. have left their post. That's up over 20 percent. Compared to the same period in 2023. What's even more surprising is that 2020 three was up significantly compared to 2022. So, you know, if you think there's a lot going on in the labor market, there's a lot going on in the c-suite as well. Lindsey, you're the firm, you're the person here through the shift who really focuses on employment, the jobs market.

What do you make of this?

[00:03:46] Lindsey Bell: Yeah, I mean, CEO turnover. It's like you said, it was really it hit a new all time high in 2023. It's going to exceed that allegedly in 2024. And I think it just goes to show that all this change at the top is happening because there's been poor company performance, despite what you see in the stock market.

There's a lot of companies that are struggling for a lot of different reasons. Also, there's a bunch of strategic shifts going on. And I think that there's just a need for new leadership skills too at the top. So I think all that's being taken into consideration, but I think when you look at who is taking these new CEO spots, a lot of times there's been research done by Russell Reynolds, they show that a lot of the new CEOs that come in are internal candidates versus external candidates. the question I have? Is that a good thing? Or is that a bad thing? Right? There's also Bloomberg did a really great article on what is old is new again.

I guess you can say in the example, the Nike CEO, the new CEO that they brought in there was, was had spent a lot of time at Nike before retiring and now he's coming back. But the. The point that they make that the Bloomberg article pointed to a study from UNC. And it said that these rebound boomerang CEOs, let's call them, right?

Mm-Hmm, , they don't necessarily have better performance when they come back in, into the seat. In fact, their stock performance is 10% worse than an external candidate or, or another internal candidate that that hasn't sat in the CEO role before. So.

[00:05:18] Chris Versace: Well, you know, it's funny because depending on how long they've been gone, the landscape could have changed significantly.

So, I'm thinking of the Nike move. Right. You've got a reinvigorated Adidas. Everybody I know is wearing Adidas, but there's also on there's Hoka, you know, the landscape has really changed. And I, at least in that environment. And I almost think that Nike is just totally missed it right now. You can't always rule them out, but I'm not really sure with bringing, you know, someone from the past in, especially when there's this push for being more direct to consumer through the internet, through apps like, you know, that really mushroomed.

After the pandemic, you know, how much experience does this guy have that's going to allow him to do so much better of a job? I'm not sure. Bob, what do you think?

[00:06:05] Bob Lang: I look at it this way and how much underperformance are shareholders and boards of directors willing to accept and for how long of a period?

Because I think they give a lot of these CEOs a lot of rope. But, you know, when you look at these two names that you mentioned in isolation, Starbucks and Nike, these are, iconic brands, but in retail and retail, I know Lindsay's had a lot of experience in her past with retail, there's really a short rope.

Of life for some of these guys, if they're not performing as well, or if they let the competition catch up to them, let's face it, you know, who's the competition for Starbucks these days? Well, one of the names that we've put in our street pro portfolio, Dutch brothers is a, is a good competitor for Starbucks.

There've been a host of other ones of their private companies that are starting to nibble at the market share of Starbucks because of the failure of the previous CEO. And how much are these boards of directors willing to take in terms of pain before they start to make changes.

Nike, same situation. Chris, you mentioned it with the hokas, with the adidas and the on shoes. These competitors have been picking up market share at the expense of Nike for years now. And finally, they booted this John Donahoe out of the C suite here. And and brought in a veteran. The only worry that I have, if I'm a shareholder of Starbucks or Nike Chris and Lindsey, is it too late?

Have they made these changes too late in the game for them to make a difference and to regain their stature as the, the primo Brands that they were from yesteryear. What do you think?

[00:07:37] Chris Versace: I agree with that, but I, I, I want to get back to this notion that the landscape has changed, right?

Because it's really important, not, not just from consumer preferences, but the consumer experience. And I think this really gets to the heart of Starbucks and why they're having one of these problems. In that, I, I, I would dare say that even if Howard Schultz himself came back, he would have a very tough time fixing Starbucks today because There is something very different about Starbucks today than when he was there.

And that is the mixed blessing and curse of mobile ordering.

[00:08:11] Lindsey Bell: Oh yeah.

[00:08:12] Chris Versace: it has really shaken things up. You know, I have been into a Starbucks in line and I got to be honest with you. I get, I get. peeved don't know why I'm using a 1950s word, but I get peeved. And the reason I get peeved is because it's all about servicing the mobile order and servicing the drive thru as if, hey, you person in line in front of me, I don't even see you.

And it drives me bananas. And if you're wondering if I've walked out, I have.

[00:08:44] Lindsey Bell: I know that feeling. I learned that the hard way. I used to go to the same Starbucks before work when I was in New York City. And this was pre pandemic and mobile was just starting to happen. And I same thing. I would stand in line and the line would actually be decently long and it was just like, we weren't even there was everybody that did the mobile order.

So I learned very quickly. I have to put the mobile order in my phone. Before I get in the subway, and then it'll be ready when I get there.

[00:09:09] Chris Versace: The only other thing, sorry to go on a rant here guys, but the only other thing that really drives me bananas is when you're in line at Chipotle, and I gotta be careful, I can't use the kind of language that I normally would here.

But some individual gets in line with a list of like 8 to 10 burritos or bowls or some combination thereof, and it's only one person, meaning they're doing the lunch order or the dinner order, and I know it's just me, but it drives me nuts because it just takes forever. In this case, use the app or like we did back in the day.

Fax the order in. I know I'm sounding old.

[00:09:46] Bob Lang: so, Chris, what I was going to say is this is that I do your point about it's a competition and so forth. And I think 1 of the problems that. You know, these brands, for instance, Nike and Starbucks have had a problem with is in terms of pricing.

They price themselves way too high, and these other companies can come in and undercut them with if not as good a product, maybe it's a superior product. In a lot of cases, I hear a lot of people talk wearing these hokas. My wife wears the Hoka's as well. they come in with these brands a little bit, quite a bit less expensive.

And that's just how they're, taking market share. And I think it's an important point there that you make about the competition and the competition, frankly, is not going to go away. So they have to do a little bit better down the road.

[00:10:24] Chris Versace: So I have three pairs of Adidas, including white Stan Smith's and two others.

And I have two pairs of Hoka's. No Nikes. What does that tell you?

[00:10:36] Bob Lang: Yeah, it tells you, you probably could get one pair of Nikes for all five of those pairs of shoes that you have.

[00:10:40] Chris Versace: Well, or it tells you I have wide feet. Take your pick. Lindsay, you got something to add?

[00:10:44] Lindsey Bell: Well, I was going to say to bring this back to the CEO turnover comment.

I do think that, the reality here is that these new CEOs need new skill sets because the world has changed. Not only has it changed from a technological perspective or consumer preference perspective, but also an employee. preference perspective. And not only that, with AI and other things, the world is moving very quickly.

And the term agile, which was popular not that long ago for for the way to operate a company or a business unit that I think that even it looks slow compared to what we're going to be going through now and into the future. Things are changing much more rapidly. And I think CEOs that have led it. In the past may not quite understand that for the future.

And so I do think that it takes a different mindset to lead at this point in time. But that being said, it's, something very important to watch because Korn Ferry did a study. They talked about how this constant turnover in leadership, because it's reached a level of 11% of newly appointed CEOs.

They usually part ways within their inaugural year. 11%. Isn't that crazy? And so that can impact an organization's momentum. They make that point. And it creates ripple effects too. It creates employee uncertainty. Right.

You know, so I have friends that work at companies that have a new CEO come in and they don't lay out their business strategy or their plan immediately. And there's just this level of uncertainty and then it makes you as an employee want to look for another opportunity because you don't know what your future is.

[00:12:17] Chris Versace: What about though when the management teams strategy isn't getting it done right? And there's a great example here. You know, Intel, right? They used to be, you know, the chip company dominating the P. C. Market.

And, you know, if you look over the last few years, Their share in the P. C. Market is under attack. They're getting their lunch eaten in the data center market. They've had this notion of, oh, we'll become a foundry and compete with T. S. M. And others nowhere. In fact, they're losing money on their manufacturing operations.

It's kind of a disaster. So, you know, in an instance like that, you would have to say, This company is lost. Perhaps it is time for the CEO to go and either the company get acquired or new blood has to come in and kind of take the reins. Because I have to be honest with you, Lindsay and Bob, I understand the comment you made, Lindsay, about, you know, a lot of new CEOs are kind of coming up through the ranks.

But it sounds to me like, at least in the case of Intel, they really need a different strategy.

[00:13:23] Bob Lang: I was a little surprised to hear that statistic from Lindsay about the turnover, but you know, to a certain extent, not too surprised because you do get a lot of activists coming into take spots on these, boards and they have probably less patience than most shareholders do.

And seeing the performance improve in some of these, brands, they're not going to let some of these brands just go away. There's a lot of value in, in Starbucks. There's a lot of value in Nike is even a lot of value in Intel don't, don't ask me what the value is now anymore, but I'm sure there is some value there in, in the name and the brand.

So there's a lot of activists coming out here these days, taking a much bolder role in steering the management team to do whatever it takes to, do well. And if that means booting the CEO, well then so be it.

[00:14:11] Chris Versace: Yeah. I just, you know, that, that comment of do whatever it takes, you know, that always sounds good.

But I would much rather have a management team come in with a well defined, well thought out, well planned strategy, right, to find footing and then move forward. change for change's sake can be dangerous. I think we saw that, not, not to go back to Starbucks, but, Schultz was going to be out, they needed to name somebody, they found somebody who candidly should not, never have had that job.

Not, not that he's not a smart person, it's just that if you looked at his background and where he came from, you would be like, what does this have to do with running a multifaceted retail business? So I digress. Guys, any other companies out there that you think, you know, perhaps it's time that there's a change at the top.

[00:15:02] Lindsey Bell: I think Bob had it like a nice list. So I'll let him take that one away.

[00:15:06] Chris Versace: All right.

[00:15:06] Bob Lang: so I think Lululemon is one on my list that I think that could be the one to boot their CEO. I mean, their, chairman is the founder of the company. And I know from listening to him recently, he's very dissatisfied with the performance of the company.

They've much like Starbucks and Nike. they're a high end retail brand and they have competitors like the gap, which has Athleta and a few other names as well. That are undercutting them and taking some market share. So the stock of Lululemon has taken a beating over the past year, year and a half.

And, the last two earnings reports have just been, been awful and they can't seem to get out of their own, way. They're writing inventory down like crazy. And here we are coming up on the holidays. Lindsay and, I think they've got some issues, they've got some trouble and if they don't have some good sell through this year, I think there's going to be some, some changes at the top.

What do you think?

[00:15:58] Lindsey Bell: Yeah, no, I think that's, that's true. It's kind of similar to the Nike story, right? So I think that the CEO turnover thing is, it's going to, it's a trend that's going to continue, right? Especially for these companies who stocks have lagged, who have sales have lagged and probably ones that really are lever to the consumer because the consumer has become quite particular about where they're spending their money.

[00:16:21] Chris Versace: Let me, let me ask you guys a question. Do you, have you guys found any new brands through social media, whether it's Facebook, LinkedIn, Instagram, or what have you, that you've actually purchased from?

[00:16:35] Lindsey Bell: I have. So Instagram. I've actually bought a couple different things, some stuff for my kids, some shoes for my kids that I absolutely love.

I would have never found the brand if it wasn't there. I've got a couple pieces for myself through influencers. But yeah. I mean, I, I've definitely bought off of Instagram influencers.

[00:16:55] Chris Versace: So, so the reason I asked that question is, the reason that , meta is so successful and people want to advertise through meta is because they are where the eyeballs are.

It's as simple as that. I'm wondering, are other smaller companies that when you aggregate them up. Are they having a bigger dent than we might be realizing because they're able to leverage the use of social media far better than some of these larger brands? Lindsay, what do you think?

[00:17:23] Lindsey Bell: I think it's partially that.

I also read an article in Harvard Business Review over the weekend about nano and micro influencers. Those are folks with 10, 000 or less and the impact that they're actually having for smaller brands because they're super niche and super focused. The ROI for advertisers can be much higher for smaller companies at least.

And I was just having this conversation with my husband about think about the sparkling water market. This, this idea just popped into my head this week. You know, there are only, we're only one or two generic brands, right? I don't even know back in the day. And then LaCroix came into the market. Remember the Oh,

[00:17:59] Chris Versace: you're talking sparkling water.

Yeah, yeah, yeah. Oh, not only do Coke and Pepsi have brands, but there's other private label brands. So like Harris Teeter has a brand, Wegmans has a brand, and the like, and it's, I think it's all touching into the shift in consumer preference away from sugary beverages and concern about artificial sweeteners.

And in fact, at Tematica, we used to have a well, we still do. We still do. We don't really flex it very much these days. A cleaner living theme. And, you know, if there were more companies that kind of were moving in that direction, boy, that would be a great area. But I digress.

[00:18:36] Lindsey Bell: Yeah, my point was simply that there's a lot of smaller brands that are coming in creating these flavored, sparkling waters.

And I think it's just an example of what we're probably going to see with a lot of different consumer products going forward is it's going to be a fragmentation. This is my big prediction. I think there's gonna be more fragmentation like in in many different industries, not just sparkling water or whatever.

I just I think that that's. The future.

[00:19:05] Chris Versace: Yeah, but you know what fragmentation means? Fragmentation in the short term means consolidation in the longer term. We both know this.

[00:19:11] Lindsey Bell: Yes. That's right. Very true. All

[00:19:14] Chris Versace: right. All right. Hey, Bob, why don't you actually, let's let Lindsay wrap up this section of the podcast because again, she deals with a lot of these things in the shift newsletter, Lindsay, take it away.

[00:19:25] Lindsey Bell: Yeah. No, I think this, increase in ceo turnover. I think it's just a sign of the times I think it's something that's going to continue and I think for Investors that are investing in stocks that have ceo turnover. It's just going to mean more volatility and Yeah, and I just think that these CEOs feet are going to be held to the fire and they're not going to be given, to Bob's point, they're not going to be given as much time to create a business strategy and then execute that change.

So it's, it's going to create a little more volatility, I think, in some of these, these securities.

[00:19:57] Chris Versace: All right. Well, we'll see what's next with Intel. We will see if you are right with Lululemon, but let's move on. You know, the topic of inflation is one that we have talked about ad nauseum, but it seems that there is actual deflation happening as demand falls, believe it or not, in the EV space.

And it sounds a little surprising, I guess, because, you know, Elon Musk, he's everywhere. People are talking all about Tesla, and I am even seeing more Cybertrucks on the road. And look, I don't want to get on Elon Musk's bad side, but, man. Those things are ugly. I don't really, I don't really know why someone would want to buy that thing other than to say, hey, guess what?

I bought that thing. it's kind of like in the eighties and nineties when you would have a Porsche or something like that. Hey, look at me. That's the only thing I could think of. Maybe I'm wrong, but overall, we are seeing EV sales really start to, start to sag. If we take a look in Europe you know, there are, they're falling big time.

Even in California, EV sales are starting to slump. In the month of, what was it? Oh, in the second quarter, sorry. They were down about 1. 2 percent year over year. The prior year, up 55%. And you know, some of this could be the cost of just because they're higher priced. You know, we really haven't seen those entry level SUVs really kind of take off.

But some other reports are talking about other factors. One of them that we know very well is the lack of charging infrastructures out there, ie charging stations. We know there's been a lot of talk out of the government and the Biden administration about building out the EV charging network, but we also know that's been extremely slow, but now we're starting to see these prices fall.

Lindsay, does this make you want to step in and buy an EV?

[00:21:54] Lindsey Bell: I don't know. I'm not an EV person. I don't think, but I think what's changed is what's really important is that the federal tax credit, the changes in how you get that is really impacting the ability to buy these cars. Because like you said, they're They are very high priced.

You've seen Tesla cut prices. And so that's, that's changing the math and how to, to purchase an EV and and so a lot of folks are, are leasing these cars because you're able, there's a loophole now in the leasing component of buying, of Whatever leasing these cars, I guess is the is the term and so because of that loophole you can get you have better greater Access to that seventy five hundred dollar federal tax credit than if you actually bought it

[00:22:40] Chris Versace: Which is ridiculous.

[00:22:41] Lindsey Bell: That's crazy, right?

[00:22:43] Chris Versace: So what happens lindsay? I I lease a car I get a seventy five hundred dollar tax credit when i'm done I turn the car in do I have to give back any of the seventy five hundred dollars because I no longer have the car You

[00:22:54] Lindsey Bell: No, because actually the dealer, the manufacturer gets the credit because they own, they're the ones that own sold the car, right?

So that's how that works.

[00:23:04] Chris Versace: Silly. Bob, are you, you're in the market for a new car? Are you you looking at an EV by chance?

[00:23:10] Bob Lang: I think I'm going to pass on that one, Chris, I'm, just not comfortable. Fully with EVs and then, you know, with the whole charging station situation, you know, if I go on a long drive, I know, Tesla has been in the market here and for building a lot of these charging stations, but some of these other companies like, like blink have, have really failed to put up enough stations there to help service all of the EVs that are out there in the United States.

So I'm a little bit skeptical right now. Of course, I'm a little bit slow to come to these, come around to some of these new devices and new technologies as well. Anyway, but

[00:23:47] Chris Versace: you still using a Motorola StarTAC, Bob?

[00:23:50] Bob Lang: Oh, a flip phone and everything like that. You know, it works.

It worked great for me, but you know, to, Lindsay's point over here, as far as the rebates are concerned, I think that that's a huge concern. I think a couple of years ago, when it looked like those rebates were going to sunset and go away, that a lot of these EV companies like Tesla and some of the other companies that were starting to build these, EVs like Ford and General Motors.

BMW and Toyota, pure EVs. They were, they were worried. They were scared that they were going to be stuck with a lot of inventory. And, you know, since then we, we did hear that Ford kind of shacked up their creation and they're just going back to the regular models and maybe the hybrids.

[00:24:27] Chris Versace: I think you're seeing a shift. I think, you know, like, tends to be the case. There's a lot of enthusiasm for the new new thing in this case, EVs and, all the majors were trying to make a push into that. Obviously, it hasn't taken off the way they thought. So it'll be interesting. In the September quarter earning season to hear what they have to say about that.

If they're taking any write downs, it does make me wonder about the future for, you know, other standalone EV companies, Rivian, for example Fisker and others out there. But it is interesting though, too, because it's a little bit of a political item. You know, I believe that there's some legislation trying to be passed coming out of the White House of preventing either Chinese EV imports or Chinese EV part imports.

it's kind of interesting to see. It's almost as if I don't want to say this to be a bad guy, but the White House is trying to protect, one of their big agenda items, which is, of course, EV adoption.

[00:25:23] Bob Lang: clean energy. Yep.

[00:25:24] Chris Versace: Yeah. Yeah. Any other thoughts, Lindsay?

[00:25:27] Lindsey Bell: No, I mean, I think that's right. I mean, it's interesting to even just like Bob has some thoughts to looking at Tesla's stock price over the past year. I mean, in April, that stock was down like 45%. On a year to date basis, and now it's back to just this week. It's back to even because we think deliveries are going to be good.

They're going to talk about robo taxi and how their self driving technology is going to be profitable in the coming weeks. So, I think people are focused on that. But I think the volatility and that speaks to the volatility and the future of the market, at least as it currently stands. I don't know, Bob, what do you have?

You look at Tesla stock.

[00:26:03] Bob Lang: Yeah, I agree. And, and, you know, Tesla stock's been real strong, I've been looking at that Robotaxi event coming up. in a matter of weeks, it's, probably going to be a sell on the news event, Lindsay. And I think that the stock has gone up quite sharply since the start of August.

and I think people are just getting hyped up and excited about this, but I don't see that this is going to be the. The one jewel that is going to carry Tesla out to new all time highs again. I just don't see it. I do think it's still years down the road before they really perfect this thing.

I know in San Francisco, Chris, they have Waymo's everywhere and there are still a lot of people are, concerned and worried about. riding in one of those things, you know, this is the Google self driving a car that takes takes people around. And I think that it's going to take a long time for people to adapt to that sort of car.

[00:26:52] Chris Versace: Well, Bob, you won't, you won't buy an EV. Are you going to step foot into a robo taxi? Come on.

[00:26:57] Bob Lang: I'll buy an EV before I step into a robo taxi.

[00:27:02] Chris Versace: Yeah, I mean, so the robo taxi event is kind of an interesting coming together of pieces for Tesla, right? Obviously AI, autonomous driving and the EV itself.

Mapping, you know, blah, blah, blah. But, you know, rolling it out in a city or 2 or a couple cities to demo. It is 1 thing having widespread adoption is an entirely different thing. And I'm sure it's going to require a lot more regulations. Being met perhaps not even, you know, national or on the federal scale, but perhaps state to state.

So it is interesting, but I think there's gonna be a lot more questions coming out of this event than some folks might realize. All right, Bob, before we move on to our final topic and topic of the day. Wrap it up.

[00:27:47] Bob Lang: Yeah. So the EV market I think it's getting a little bit more saturated and more people think, and it proves it with the numbers that you, suggested that EV sales have really come down quite, quite sharply from where they were even a year ago.

And I think the adoption of, people trying to add an EV into their, their family here and an electronic vehicle, you Is I think that idea is, starting to get old and stale. Lindsay had some, some great points about how the charging stations, the infrastructure, not quite there yet.

And, and I think that once we come around to that, if it does start to mature and get a little bit better, I think we're talking years down the road. Before we see a little bit more adoption of this, but some of the numbers you gave out were pretty stunning, not too surprising, but pretty stunning the fact that they've dropped so far down that we'll have to see how things go in the year ahead.

[00:28:37] Chris Versace: All right, before we start our final uh, topic of today's podcast, I'm going to ask each of you a very pointed question, one word answer, please. Bob, who do you trust more? Companies or the government?

[00:28:51] Bob Lang: Company.

[00:28:52] Chris Versace: Lindsay, who do you trust more? Companies or the government?

[00:28:56] Lindsey Bell: Neither.

[00:28:58] Chris Versace: Ah, so you're saying, you're saying that

[00:29:02] Lindsey Bell: Hey, I,

[00:29:02] Bob Lang: I didn't get that choice.

[00:29:04] Chris Versace: Hang on, hang on, hang on. That's because you don't think outside the box. Lindsay, kudos to you for thinking outside the box. But I'm going to tease you a little bit and I'm just curious. Are you saying that you don't trust either companies or the government? Because between the two of them, it's a bunch of marketers and liars?

[00:29:20] Lindsey Bell: I know, I guess I should have said it depends. But yeah, I mean, if I had to pick one or the other, I'd Pick corporate over over governments, but yes, the problem is it's all comes down to marketing and self service and self interest rather than the interest of the people. Let's put

[00:29:37] Chris Versace: agreed agreed agreed.

And, you know, there was some I believe there's a Pew study out there from Pew research that says only about. Two in ten Americans actually trust the government. it's unbelievable that the trust in the government is that low. I can understand it, given all the nonsense that we've seen on, you know, social media, campaign promises, and it, it is unbelievable.

Ugly out there. I mean, I you know, it is absolutely amazing. But I do wonder, though, if some of the things that we're seeing particularly on the front that they might start to erode people's trust in companies. And I'll be up front, right? Like of all the companies that I deal with. And products that I use in and around the house, the one company that I and maybe this is blind faith, but the company that I have the most trust in is Apple.

I am happily trapped in the Apple ecosystem. I have said this before. But I do wonder, though, as AI in particular starts to be used more and models have to be trained, does it open the door for some concern for that trust to be eroded? Not just at Apple, but at other companies, too. And I say this because apparently In a bid to train its a I model linked in is using user data.

And the thing is, they have automatically auto enrolled people by changing their terms and their terms and conditions that most folks just go. Oh, yeah. Okay. Click. Boom. Like you're kind of given access to your data without recognizing it. And I just wonder if we're gonna see more of this.

[00:31:14] Lindsey Bell: See, the LinkedIn thing, by the way, confused me a little bit.

Like, I agree with you. I think we talked about it on another episode about how AI connected to consumer brands or consumer services and products definitely instills a sense of mistrust or, you know, caution among the consumer, at least. But when I look at the LinkedIn thing, what I think about, like, from a business perspective, right, you, whatever business you run, You own data, you own data of your customers.

So you know what they're doing. What buttons are they clicking on? What are they interested in? And you use that data to improve your business or your service that you're offering, right? And so I was reading through some of the LinkedIn stuff, and to me, I was confused because it sounds like they, I think where the problem lies is that they're, they're actually analyzing people's posts, like whatever you, Chris Versace, right?

And posts and. Images that you include in that post on LinkedIn. They're going to analyze if that post does really well in their AI tool they're going to use your post as an example or as they should For someone else's post more engagement, which which benefits them. But so I think they need to be a little more clear about what exactly is happening.

And then even the toggling on and off, which they've, they've tried to, like, kind of step back on since this news broke and people got really upset about it is, is, is really just. Kind of helping people understand that if you toggle off the AI tool, that means you can't use it. If you so choose to use it to write a post or to update your profile or whatnot.

So I think there's just a lot of like gray areas in this. Space and I think that clarity is what's going to help the consumer get get more comfortable.

[00:33:01] Chris Versace: I agree. Now, Bob, let me let me switch gears with you on this real quick. So, you know, in in the age that we live in you know, cyber attacks are pervasive.

Right. And all companies are vulnerable. And what's interesting to me is that even though companies are being attacked and data is being compromised, that really hasn't slowed down people using, you know, some of the products and services. It could be because we're just ingrained. It could be just, you know, a rote habit, that sort of thing.

But what do you think it would take to either damage a person's trust in a company or, flip it around, build their trust in a company?

[00:33:41] Bob Lang: So basically, I think that the company's like meta here have to come in and be a little bit more responsible. There's names, you know, like, as you mentioned, LinkedIn here, which is certainly owned by Microsoft. They have to be a little bit more responsible when it comes to using the data.

Otherwise, they lose that trust from their customer. And if that's the case, listen, you know what? we talked about the trusting the corporation. Versus trusting the government. I don't see that that meta, for instance, as an example, is a company that people really want to want to put their faith and trust in and Twitter being another one and Twitter or X, if you want to call it that, but these companies here are using data to their own advantage.

And frankly, with the oncoming onslaught of AI here, I mean, what more are these companies going to do to take advantage of the data? And. The privacy issues are quite extreme.

[00:34:35] Lindsey Bell: Chris, what I would say is that corporations have a responsibility to protect the data that they, they own and that they have access to. And I think that. To go back to what I said, it's just, they also have the responsibility to clarify how they're using that data because I think they've always used the data.

We just haven't known it. We, it hasn't been attached to the word AI to help them sift through all the data. And so I think it's, it's a messaging situation in my mind for companies to really kind of get in front of, and that's why distrust. And we, you talked about distrust in the government falling off a cliff, distrust in big.

Business has fallen off a cliff as well as small business has actually remained. We're talking about small business earlier. Small business confidence has remained relatively very high versus. Many other institutions in this country.

[00:35:29] Chris Versace: So Lindsay, let me let me just take what Bob was saying. So I'm kind of curious here.

He's saying that meta needs to do better. You know, obviously, it's had, you know, trust issues in the past. We'll see what happens through this election cycle. But have you stopped using all of Metis products?

[00:35:44] Lindsey Bell: No, I haven't. And, you know, I think too, it's ingrained into so many of our daily lives that it's hard to stop using it.

But to your point, again, the messaging Apple has done, they've stood up for the consumer and been like, we're going to protect your privacy with all the apps that you can access on our phones and things like this. So they've done the right thing. They've caught slack on the, the other way for that. But, but I think it's, it's, Up to the companies to stand up and to, to Bob's point, to really do the right thing and protect their data and, and then communicate that to their customers.

[00:36:17] Chris Versace: Agreed. Agreed. I totally agree with you guys. You know, it is a responsibility on companies to educate us on how they're using our data, but they also have to win our trust as consumers, particularly if they want us to be repeat consumers. But one other quick thing, and I'll use this as part of the wrap up here before we move on.

You know, it is interesting, because in order to effectively release AI models, whether they're large language models or increasingly small language models or SLMs, the reality is that companies need data to train these models on. You know, I said this a long time ago that I think that, when folks were all gaga about Microsoft, don't count out Google because of where they are in terms of search and what they have with YouTube.

They are a force in my opinion, but I also think that we can all agree that the conversation we had last week with, HealWell and their partner company, WellHealth, sets HealWell up extremely well in the healthcare AI space. And folks, I'm going to wrap up this portion of the podcast by saying you should listen to our special Why the Buzz podcast with HealWell AI. Because One, you're going to learn a lot more about what's going on in health care and AI, the challenges, the tribulations, the opportunities. But you'll also want to hear how this management team is harnessing five to six million visits a year in Canada to build its AI tools.

With that, we'll be right back.

All right, that's a wrap for this edition of the podcast. Folks, let's see what the team learned this week. Bob, make it quick, because your connection is not good.

[00:38:09] Bob Lang: Yeah, so the EV market, boy, I'll tell you something. It's been a space where there's been some great growth. Great innovation and some great investments done.

But I think that it's slowing down quite a bit. And you nailed it with some of the statistics there and the sales drop off from 2023, we could see a little bit more of a challenging environment in the market over the coming years until things start to settle down and people get a little bit more comfortable.

We're gonna be talking about Buying electronic vehicles. For now, with gas prices coming down, we didn't even talk about that. It makes it an easier decision for somebody to buy a gas fueled vehicle As opposed to an electronic vehicle. We'll see how it goes.

[00:38:50] Chris Versace: Lindsay, what do you got? I

[00:38:52] Lindsey Bell: think to me, the takeaway is, is lies in that last topic.

And it's the word trust. I think if you go through all the topics that we talk about, we started with CEO turnover. I think part of that is, is trust amongst all of their stakeholders, right, which is is partially to blame for a lot of the turnover at the top. Then we talked about vehicles like Bob gave a great just summary right there and it's trust in the system and the infrastructure and the pricing and all that and and the tax credits.

So, I think there's a lot of trust to be found there that to help solidify that business model. Then, obviously, we talked about corporate versus government. trust, and I think there's a lot of work to do on both sides there. But at the end of the day, all these topics kind of point to the small business having the advantage because they're the ones with the trust in their corner.

I don't know. What do you think, Chris?

[00:39:44] Chris Versace: I think you're being backed by the small business administration. That's what I think, Lindsay. That's that's the 2nd or 3rd time you mentioned that. No, I'm kidding. I'm kidding. Of course. You know, to me, I think that the. You are right, Lindsay, that I think trust is a, is a topic, an underlying topic that cut across all three of the podcast segments today, no question.

But I do think that this notion that CEOs have a shorter and shorter runway to come in and fix problems, I almost wonder if that's self perpetuating because, tankers, as they say, take time to turn, and then once they start to move a little more, move a little more, they pick up momentum, then they start to whip, and that's really when you see the turn happen.

I almost wonder if we're being kind of too short term in giving some management teams or new management teams the time that they need to really fix the problems. Because I think we all know that just like a duck, companies are, you only see certain things on top, but if there are problems underneath, they are paddling like hell.

Odds are there's a lot more going on that we don't know about. Perhaps, perhaps a little more structural perhaps it could be, something on the inside of the company. We don't know. But I think it means that sometimes. You can't cut bait too quickly with a new management team. That's kind of my takeaway.

But we'll revisit this topic, I'm sure, in a future podcast. And with that, folks, I want to thank you for listening. We will be back next week with another podcast. Remember to listen out for that Why the Buzz conversation with HealWell AI. And between now and then, if you need to find anything from Bob Lang, explosiveoptions.

net, Lindsay Bell, The Shift, and I'm Chris Versace, you can find me over at the Street Pro Portfolio. Thanks for listening.