NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

Beware the Coming Carnage in the Electric Vehicle Industry

Car buyers are no longer beating down dealers’ doors to get in line for the latest electric offerings, regardless of how smart the cars may be.

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

Nov 18, 2025

 

If you ever doubted that the electric automobile industry was rapidly becoming a pedestrian and commoditized business of wrapping steel around smarts, where the software was everything of value and the shell was simply the latest look-alike clone, the signs couldn’t be any clearer than they are today. We are reaching the point where the carnage is about to hit every car manufacturer who is trying to make a go of it in electric vehicles (EVs).  The public is increasingly taking a pass. All the German manufacturers are backing away from their electric-only focus. Mercedes just reported almost a 20 percent year-over-year sales slump.

Buyers are simply no longer beating down dealers’ doors to get in line for the latest electric offerings, regardless of how smart the cars may be. Tesla’s recent profits fell almost 40 percent and, while they sold more cars in the third quarter year-over-year, they earned less money per car due to price cuts and low interest loans.  However, as I suggested many years ago, it’s likely when all the dust settles that Tesla will be the last U.S. player standing that’s making a real business out of EVs and also trying to hold off the Chinese onslaught, even without being able to sell the highly-profitable clean-air credits to all the other carmakers or the other prior government incentives. Mercedes, for example, is getting killed in China by BYD and Xiaomi, with sales off 27 percent in the third quarter.

The tariff problems are substantial for all the foreign automakers, but even if you put the current tariff issues aside for the moment and ignore the expiration of the EV credit that incented domestic sales for quite a while earlier this year, the fact that—according to the Kelley Blue Book—the average price of new cars has risen above $50,000 (driven largely by EVs and luxury models) has nothing to do with the realities that the vast majority of car dealers are seeing every day in their stores. This “real world” scenario is reminiscent of the fact that the continued surge in the stock market is a grossly misleading metric for what life is like for the average American at the grocery store, gas station, or local greasy spoon restaurant. Inflation continues to rise, prices at the pump keep jumping, and every shopper sees the truth regarding the sad shape of the economy despite Trump’s daily lies.

The real early warning signal for the car guys isn’t simply the slowdown in new EV sales, which have not been successfully altered by aggressive price cuts that are simply cutting into the dealers’ profits. It’s what you see in terms of the product sitting on the floors of the showrooms these days. They simply can’t sell anyone on the idea of buying a used EV. Upfront in the store, they may have positioned all the fanciest high-end versions of the 2025 and 2026 models, but if you step into the second or third tiers of demos and used cars, the asking prices for the 2023s and 2024s EVs are simply shocking. These are typically low mileage trade-ins that the dealers had to grudgingly take in to make a new sale—typically not an EV—and the prices look to be around half of what they were originally listed and sold for. Depreciation in luxury cars has always been a dramatic hit in the first year (right after the buyer drives the car off the lot), but these prices are absolute fire sales, and they still can’t move them.

The truth is that if you ask an honest dealer what’s going on, they will admit that the EVs are tough and costly to service; their unhappy owners are still plagued by the scarcity and wait times of charging stations—even though range anxiety is largely a fiction for folks driving six-figure vehicles to begin with—and the dealership owners hate taking these cars back in trades because they can’t do anything with them other than sending them to auction. The very last thing a Cadillac dealer wants to see sitting on his lot is a used Tesla. Dealers make a material portion of their overall income from the sales of pre-owned vehicles and there’s simply no buyer appetite right now for taking in or taking over someone else’s EV problems at any price.

But if anyone is going to come out of these dramatic dips in demand, it’s likely to be Tesla because Elon’s interest and business have always been about the software and the massive amounts of driver data that his systems were capturing. I’m sure he’s interested in selling plenty of cars (although he’s already more likely interested in selling them to fleet operators of trucks and robot taxis), but the long run view—typically tech-centric—is always the same, and that’s a winner-take-all game.

There’s never going to be a future for the majority of the manufacturers in the U.S. to try to build, maintain or enhance their own unique control and software systems. It’s just a matter of time before they begin to license Tesla’s tools and systems just as they’ve all been buying credits from Tesla for some time and since they’ve already begun to provide adapters for their vehicles to use Tesla charging stations. The ultimate value and the critical margins are in the software and the captured data which informs and strengthens the Tesla algorithms—not in the platform/shell that they’re housed in. At the same time, in a very new and rare twist, it appears that Tesla may be getting ready to license Apple’s CarPlay for its vehicles. 

Interestingly enough, in a completely different industry, we’re finally seeing a similar phenomenon where meeting the need and demand for increased access and expanding the reach of the “software” is far more important to all the parties than exclusivity, competitive considerations, or the platform on which the product is delivered and enjoyed. Microsoft is adopting this expansion strategy in the computer gaming industry, where it has bought two leading game studios in order to grow its multi-platform content offerings. But its most dramatic move has been the recent Halo announcement. Microsoft’s Xbox has been the exclusive home of the Halo video game for the last 25 years and Halo’s success has been responsible in part for the successive launches of four generations of updated Xbox consoles.

But Microsoft just announced that the 25th anniversary version of Halo will also be available for Sony’s PlayStation. Sony and Nintendo are Microsoft’s most important direct competitors in the game space. It’s clear that the new MSFT plan is to provide its games, software and other properties everywhere and make them available on all of the various platforms. Selling software, data and games is a lot more lucrative than building cars or consoles. These days, it’s not clear that it makes sense to manufacture anything.

In fact, following the many earlier examples in the mobile phone industry, where Facebook and others struggled and rapidly failed to introduce their own proprietary phone hardware, or the fitness field, where dozens of players entered and quickly exited the dedicated hardware device competition, I wouldn’t be surprised to see Microsoft step away entirely from its console hardware offerings and focus all of its attention on its desktop computers and its online offerings.

Since Microsoft Windows is installed on about 75 percent of all desktops worldwide, it’s a pretty short step to turn them all into mini-Xboxes as well. An early indication is the development of a new genre of video games that sits on your desktop just above the task bar (taking up only a fraction of your screen) so that you can keep one eye on the action and jump back and forth from work to wasting time in no time at all.

This takes multi-tasking to an entirely new level and is a significant step up from the old one-button fake spreadsheets we used to use to hide our screens from roving supervisors. But it’s also a reminder as well that—for too many of us—multi-tasking is simply another word for trying to do a lot of things all at once and doing each of them poorly. The critical key to success is to focus on being productive, not just being busy.

 

HOWARD TULLMAN JOINS LISA DENT ON WGN RADIO TO DISCUSS CRYPTO AND THE ECONOMY

LISTEN TO THE SHOW HERE 

LISTEN TO THE SHOW HERE

NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

The Dangerously High Cost of Tolerating Trump 

Making government more efficient is an admirable goal. But this administration is bent on destroying it, putting our lives and businesses at risk. 

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

MAR 11, 2025

More than 50 years ago, the Canadian singer-songwriter Joni Mitchell warned us in Big Yellow Taxi about the risks of taking so much of what Americans have for granted. She sang: “Don’t it always seem to go / That you don’t know what you’ve got till it’s gone.”

Every day feels like we’re increasingly on the very cusp of seeing so many safeguards disappear.  All the guardrails, rules and regulations, and other protections that we’ve relied upon for decades as individuals and businesses are being illegally and abruptly ripped away and discarded. The culprits are a bunch of kids led by a billionaire turned loose by a president emboldened and enabled by sycophants, spineless politicians, and a radically conservative Supreme Court.

Thousands of our peers, neighbors and veterans are being thrown out of their jobs, turned out on the streets, and left without healthcare after giving years of their lives in the service of our country.

The Road to Recession

Any business owner or manager who thinks that their operations, employees and customers aren’t going to be adversely affected by these ill-considered and heartless actions is both foolish and blissfully unaware of what’s coming. Thousands of middle-aged professionals are now unemployed and facing difficult future prospects.

Go ahead and dismiss them as bureaucrats if you want to pile on, but their loss will have dire consequences for the economy and immediate ripple impacts in real estate and retail as well. The Atlanta Fed’s GDPNow model is predicting a negative 2.4 percent growth in the first quarter. Not exactly the direction that anyone hoped we’ve be moving.

We can also expect more performative theatrics and threats to shut down the government from the MAGA clowns as the newest funding and budget deadline fast approaches on March 14. The uncertainty and chaos that are the hallmarks of this administration mean that business is far more likely to be a complete bust this year than a bonanza for anyone but the wealthiest Trumpists.

When Deregulation Becomes Damaging

As Elon Musk and his minions continue their rampage to destroy as many of the federal regulatory agencies as possible in the shortest possible time, it’s sometimes difficult to remember that the thousands of honest, hard-working, middle class people who used to work in these entities actually attempted, in good faith every day, to protect our health, to free us from scams and financial frauds, to save our children from fatal diseases, and to assure that the air we breathe and the water we drink every day isn’t toxic.

Did they sometimes overstep, or get us stuck in a regulatory quagmire? Absolutely. But you can bet that we’re going to miss them a bunch now that they’re gone. The completely unnecessary Texas measles outbreak — a gift from Health and Human Services Secretary Robert F. Kennedy Jr. that has already killed two people – is just the tiniest tip of the oncoming iceberg as the Trump Titanic and the Musk Massacre lurch on.

The defunding and destruction of the Federal Emergency Management Agency and the National Weather Service as hurricane season approaches is criminal. Entire states are still flooded in the South, another sad and sickening sign of the decay and devastation that Trump has wrought. People will die, but hey, we’ll save a few bucks.

Here Come the Crypto Scammers

And, because nature abhors a vacuum, we can soon enough expect, as the federal regulatory oversight diminishes, that we’ll see a newly energized and enabled band of crooks, crypto scammers and lowlifes taking center stage. They’ll be launching constant waves of illegal schemes and scams, unsafe or useless products, and a multitude of other mendacious atrocities aimed at an ill-informed, under-educated, and unprotected population. And, of course, they’ll be following the examples of the president, who will no doubt get a piece of the action.

Our companies and our commerce depend on trust, the rule of law, consistency and the predictability that the very much maligned rules and regulations which are being ignored or breached provide for us. And, as we’ve already experienced with Trump’s timid tariff retreats last week, an inconsistent policy execution is an anathema to the markets and to our allies worldwide. Mexican President Claudia Sheinbaum, Prime Minister Justin Trudeau of Canada, and everyone else abroad now understand that Trump is a feckless bully, that he backs down wherever anyone stands up to him.

It’s too bad that the Democrats and the shabby remnants of what used to be the Republican party haven’t got the same willingness or ability to resist this boorish blowhard and pop his boastful bubble.

If the messaging about what’s to come isn’t clear enough, Trump’s minions and Cabinet flunkies have already aborted some 100 investigations and enforcement actions against criminal corporations that were underway at the Justice Department, the Securities and Exchange Commission and other agencies. In the name of deregulation, it’s now open season for corporate crooks.

Consider the most recent executive order launching the latest crypto fraud feast. In this instance, massive, leveraged purchases of key cryptocurrencies including Bitcoin, Ethereum and Ripple were exquisitely timed and closed mere hours before Trump’s announcement about creating a U.S. Strategic Crypto Reserve.  World Liberty Financial, a project directly linked to Trump’s family, bought more than $20 million in digital assets just days before the announcement. This was another example of flagrant in-our-faces insider trading.

If the crypto reserve scam wasn’t an obvious and blatant bailout for Trump’s kids and their crypto cronies, the announcement also specifically called out the names of struggling minor crypto offerings like ADA and SOL which 99 percent of the world’s population have never heard of, nor could Trump himself most likely name.

Trying to reward the crypto bros, tech funders and Wall Streeters who helped put him in office by bolstering these bogus “currencies” and threatening to use our federal Treasury funds to purchase vast quantities of these risky, digital assets is only the latest amazingly overt Trump effort to line his own pockets at our expense.  

The biggest losers, though, are his deluded followers who’ve been victimized by rug pulls and already lost millions of dollars on his previous crypto schemes. Watching the parade of supplicants, schemers, and scammers streaming to Mar-a-Lago to pay millions  for meals with Trump couldn’t be a more obvious demonstration of the pay-to-play world we now inhabit. 

If We Do Nothing, Our Businesses Will Suffer

Unfortunately, so much of our typical human behavior is driven by indifference, avoidance and denial that millions of otherwise well-intentioned business owners are doing nothing. They are sitting on the sidelines, at a loss as to what they can do to effectively change the course of so many of these actions. The result is frustrating inaction and paralysis, which only further enables the bad actors.

Until it happens directly to you or to those you know and care about, all of this insanity and destruction of plans, positions, people and potential seems remote. We’re unsure who, exactly, is being hurt or when the harm is expected in part because we’re constantly flooded by lies and misinformation from the MAGAs and right-wing media about the wonderful financial results and savings being secured.    

But know this: If at this late date you do nothing and say that “it’s not my business,” you might not have much of a business left when the dust finally settles.

 

NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

The Five New Rules of Startups

The last couple of years--the pandemic, WFH, high interest rates--have turned the traditional startup playbook into a relic. Say so long to the hero entrepreneur (that's you, Elon) and one-size-fits-all. Say hello to flexible, committed teams, and taking mass customization to a new level. 

 

BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS@HOWARDTULLMAN1

 

There's some classic expression I recall from rocketry or artillery, which cautions that in terms of launch preparations "if you're off by an inch, you're gonna miss by a mile." This concept of precision planning is even more meaningful when you're talking about starting or growing a new business. If you don't get things right at the start, forget it. And if you don't regularly and consistently communicate the company's mission, vision, values, and goals -- especially in the new hybrid world -- you can be sure that you'll end up in an unhappy and unintended place.

But, as with so many "obvious" things today, it's not as easy as it was when most messaging was face-to-face and fairly simple and when - if you didn't really care that much - you could even get nicely laminated mission statements and inspirational wisdom for your walls from Staples or Office Depot. And the far greater problem is how the content of the messages has changed. While the forms and format may have stayed the same, the critical messages are far different now and the conventional wisdom and all the old texts just won't cut it anymore.

Even apart from the new pitfalls and land mines presented by concerns about political correctness, sensitive snowflakes and whatever the latest systemic grievances are, the ground rules for getting things done have changed. The strategies and standards we once relied on need to be updated to address the new normal in terms of things we've learned over the last few years regarding what actually works. You also need to pay attention in terms of the composition, concerns, and diverse interests of the new workforce as well. 

I'd say that there are at least five time-tested concepts and cliches that have outlived their usefulness in providing guidance for business builders and managers. Maybe they still work for coaches in high school locker rooms, but even there we're more likely to be dealing with Ted Lasso's truisms than getting any guidance from the Gipper.  

1.     The Lone Ranger is Dead.

Even if you're not convinced yet by Elon Musk's utter Twitter insanity that absolutely no one can do anything of value or importance entirely by themselves - not even Superman or The Lone Ranger -- the rest of the world has decided that the myth of the entrepreneurial Übermensch has outworn its welcome. Teamwork, collaboration, and cooperation will ultimately prevail over any one-man army. No one going it alone is going to get anywhere important because the challenges that disruptive innovation present in any area are simply too much for a single individual to absorb and process. Getting the right team assembled, putting all the players in the proper positions, defining a central set of objectives and goals, and then turning them loose to attack multiple aspects and dimensions of the problem, is the clearest and fastest path to success. Betting on a single jockey - even the most visionary leader - isn't the way to salvation. And the best part of this approach is that, done correctly, you'll always have people on your side.     

2.     Darwin is Dead

Another part of the entrepreneurial myth is that the strongest and fiercest competitor, be that animal or human, is the one most likely to prevail in the long run. Darwin never said this, although "survival of the fittest" has come to be the most widespread and convenient way to shorthand and represent his conclusions. "Fittest" doesn't mean that it's the strongest or even the most intelligent creature or business that survives.  It's the enterprise that is most adaptable and best able to quickly react to and adapt its behavior and offerings in a constant stream of changing conditions and challenges in the world.

3.     The Answer Man is Dead

If there's one consistent message from the ChatGPT revolution, it's that all the written and captured knowledge in the world is now accessible at relatively low cost and at amazing speeds. The answers are all out there.   But only if you know how to train your people and your machines to ask the right questions. Employers with an eye to the future aren't going to be hiring wise and shiny guys and girls who think they have all the answers; they're going to be looking for quieter people (from all kinds of different tech and non-tech backgrounds) who have an inquisitive mind, creativity in abundance, an openness to ambiguity and goalless planning, and an iterative and patient persistence. Interestingly enough, patience in the face of ambiguity isn't something we've ever associated with entrepreneurial DNA. In fact, it's almost always just the opposite - "ready, fire, aim" is the name of the game, accompanied by irrational optimism and confidence. Sometimes wrong, but never in doubt.  And there's already a name for the new job: "prompt engineers" who are able to fashion and build streams of narrowing and iterative inquiries to best interrogate the new GPT systems, will be in great demand for many years to come. 

4.     Single Thread is Dead

For decades we've been taught to focus, to put all the wood behind one arrowhead, and to direct all of our energies and attention, aggressively and full force ahead, toward a single, optimal solution.  Hedging your bets was discouraged by great entrepreneurs, who preached the gospel of "go big or go home." Of course, these were the winners talking after the fact and not the folks on thin ice. The evaluation procedures and ultimate decision making were similarly constrained - almost every choice was framed in an either/or context - mainly for simplicity's sake. No one wanted to confuse their board of directors by asking for a decision among too many competing choices. But now optionality is central to the smartest strategies - considering multiple alternatives at all times leads to demonstrably better results.  Preserving as much flexibility and avoiding irrevocable commitments to a fixed path as late in the operations as possible is the way to assure the best outcome. The more choices, the merrier. In the ideal world of tomorrow, it will never be too late or too costly to turn back or alter the course regardless of how far down the path you've progressed. Teaching your people to keep checking and to welcome necessary course corrections rather than opting to ignore or avoid them will be crucial.    

5.     One Size Fits All is Dead

One of the most obvious objectives of every smart startup is scale. Getting bigger is almost always the path to getting better: better operating results, easier fund raising, improved customer confidence, and the ability to recruit and hire better and more costly talent.  And the most fundamental key to scale is streamlined replicability: doing whatever it is you're making, selling, building, or otherwise providing to your customers and clients flawlessly, efficiently, and over and over again. The second most important element in this equation is standardization. Bespoke and a là carte are the worst possible words that a young business builder can hear. One size, one product, one deliverable that fits any and all comers is key. That's the main reason that all the early Model T Fords came only in black, although quirky Henry Ford also determined that black dried faster than any other color.

We used to tell young entrepreneurs to stick to their knitting and do one thing really well. Once they've solved the basic creation and delivery problems associated with their initial product, the best news was that the CEO could finally stop selling and go on to other new things. But before that time, it was all about offering one size that fits all. Unfortunately, that's no longer the way the world works.

Today, instead of trying to convince people to learn to use a new product, every product needs to be fitted to meet the people's desires and requirements. And those progressive demands continue to grow and accelerate over time.  We're fully into the era of mass customization where a successful company needs to be all things to all of the people all of the time. While this is much less of an issue for digital products and software services than for hard goods, it still represents financial risk due to increased complexity, product mixes and support costs. This is radically different from the times when early development and marketing costs for a new product could be offset and recovered as the company grew through economies of scale.

Bottom line: toss the books and go back to the basics, but with an eye to the future. Teamwork, adaptation, iterative inquiry, optionality, and product personalization at scale are the keys to the kingdom of tomorrow.

JUL 11, 2023

NEW INC. MAGAZINE COLUMN BY HOWARD TULLMAN

 

Election Spending Has Become a Waste of Money. Only Advertising is Worse.

Chicago's recent mayoral election demonstrates how broken the system is. Meanwhile, there's no market too small to dissuade Big Pharma from massively advertising its wares.

BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS@TULLMAN

Indifferent and ignorant voters get the results and the leaders they deserve, goes an old political theory. And judging by the recent mayoral election results in Chicago, the city’s citizens certainly got the shaft. The untried and untested mayor-elect was ultimately chosen by less than 20% of the eligible voters. The majority of voters, around 65%, stayed home. They didn’t come, they didn’t care, and they couldn’t be bothered. It was a “meh” mandate for mediocrity, meaningless maxims, and misinformation. An inexperienced guy, Brandon Johnson, a teachers’ union lobbyist who hadn’t bothered to pay his own bills, fines and debts, and wanted to defund the police, is now in charge of a $28 billion budget.  Sad but not shocking. 

Even after four years of the utterly unqualified and incompetent Lori Lightfoot -- a mayor who’s left the desolate city in shock and despair with newly resumed warm weather wilding -- the voters failed again to select a competent and knowledgeable leader. Of course, Chicago’s not alone in that department. After 4 painful years and all the lessons of Trump’s lack of interest in or any qualifications to lead, it’s still clear that hyper-partisan politics are blinding large parts of the public to the true requirements of successful governance. Too many people look no further than someone’s alleged party affiliation at the polls to make their choices. We know now for sure is that consistently painting Paul Vallas, the losing candidate who was a lifelong registered Democratic, as a closet Republican in a supposedly non-partisan election was the kiss of death given today’s totally tribal political warfare. Nothing else really mattered, although the timely Trump indictment days before the vote was the icing on the partisan cake that made sure that Johnson would limp across the finish line. In Johnson’s case, having a field army of teacher’s union workers to wrangle 30,000 young voters to the polls on Election Day also didn’t hurt. One encouraging prospect is that— at least in Chicago— we won’t have to hear the MAGA morons chanting “Go Brandon” any time soon.  

But what’s really shocking is the staggering amounts of money raised, spent, and largely wasted by the two runoff candidates on ugly and angry media, old-world marketing materials, pollsters and doorknockers, and political consultants of every size, shape and flavor. You would think that no one had explained to these guys and their “consultants” that traditional ad media strategies and the old analog channels were dead meat and that the only effective games in town were social media, word of mouth, and precise digital marketing.  Millions were wasted with little or nothing to show for the effort or the expenditures. And, of course, thanks to the Supreme Court’s tortured view that money is speech, we only rarely know the sources of the largest chunks of the dollars flowing into these campaigns or the objectives of anonymous donors.

Waste is one of mankind’s worst inventions. Nature doesn’t abide waste. Everything has a use and a purpose, and the world has worked reasonably well (at least so far) because nothing in nature is ever done in vain. It’s only when stupid people insert themselves and their feckless, selfish acts and concerns into the mainstream  that our climate, culture, and country are all increasingly imperiled. Nothing seems likely to interrupt this accelerating slide into oblivion because no one who’s getting paid wants to interrupt the flood of funding. And no one in charge or in office is willing to be the first to de-escalate the crazy spending. We can only expect more of same and worse from our political “leaders” even when actually winning an election (much like the dog who catches the car) these days seems like second or third prize and an invitation to years of pain, self-flagellation, and embarrassment. No wonder that anyone with a brain or a real job doesn’t want any of these positions.

In a city struggling with rampant crime, shuttered schools, harrowing levels of homelessness, hospitals constantly closing, and growing food insecurity for thousands of families, two politicians pissed away more than $30 million in a matter of months to ultimately elect a deceitful and chronically underemployed union organizer who was good at pretending to be up to the governance task without ever uttering a word of substance. The people would have been better served and the pols would have accomplished far more if they had just paid each of their few supporters a cash stipend to show up and vote in the old Chicago way. And, if you look at the current state of shooting and looting in Chicago, even before the new guy takes office, it’s clear that there’s unlikely to be much improvement in the unsettling situation any time soon.  

We saw the same kind of lucre lunacy and ludicrous spending – around $42 million - right across the state border in another “non-partisan”  race for the Wisconsin Supreme Court, which set national records for outlays in that type of contest. At least in that instance, the Democratic backers and funders from across the country got the kind of respectful turnout they were targeting and the MAGA sore loser, conservative Daniel Kelly, got precisely the major 10-point drubbing he deserved from liberal Janet Protasiewicz. Interestingly enough, the outcome analysis to date suggests that the historic win and the margin was largely driven by youth turnout which had little to do with ad spend and everything to do to already well-seated Roe vs Wade anxiety. 

While current politics may be one of the most visible and obnoxious levels of excessive ad spending, the problem is far more serious and widespread. Every dollar that any business spends is precious; no one can afford to waste scarce resources on old-fashioned “spray and pray” campaigns or other brute force initiatives based more on faint hopes than hard facts. In the frenzy to get back to business, or to get their businesses back, or to get their story out in the midst of the overwhelming noise and clutter, millions of dollars that should be spent on R&D or productivity enhancements are being squandered on repetitive and useless marketing and ad campaigns which no one wants to see. 

It seems like the unending glut of pharma ads – even running the identical ad several times in the same commercial break – is a conscious effort by these advertisers to drive viewers away from traditional broadcast TV. Right now, no industry is spending more on linear TV advertising than Big Pharma. In 2022, the top 10 pharma ad spenders combined for a total of $1.68 billion in TV ad spend. Who, apart from the miniscule numbers of actual sufferers of these exotic “diseases” and conditions, do they think is interested in messages where the list of risks, abuse, and frightening side effects is substantially longer and a more material part of the ad’s content than any benefit claims? Who’s responsible for the seemingly weekly creation of new two and three-letter diseases like TED that no one’s ever heard of, but which may be secretly plaguing them at this very moment? Who is concerned these days about confusing their penis with bent carrots and other supermarket vegetables?

The arcane references, technical language, descriptive behaviors, prohibitions against use with conflicting named drugs, and other cautions are completely unintelligible to 99% of the viewing population. I’m not sure, for example, that anyone even knows what TD or GmG are, and the doctors complain all the time now that patients come in asking for the “purple pill” even before they’ve been examined or diagnosed. You’d think that the FDA had already been defunded at this point – the regulators have completely abandoned any attempts to regulate these ads which nothing more than lists of symptoms to suck sufferers in and catalogues of side effects to cover the vendors’ bases and potential liability.

The other big and relatively new bucket (and check box) is the politically correct and DEI-infused ads that literally litter the latest pitches from almost every agency and brand imaginable. The most striking element of these new offerings and paeans to whatever’s woke this week is that although they’re running on broadcast channels, they couldn’t be more particularly and narrowly targeted to highly specific, ridiculously small, and typically already suffering populations. Do we really need to be bombarded nightly with suggestions that we “PrEP” this (whatever that means) or “Detect” that? You wouldn’t go wrong concluding that the purpose of creating and running these ads has little or nothing to do with actual sales and everything to do with satisfying corporate and political demands and desires to demonstrate virtue signaling.

The latest Bud Lite trans spokesperson debacle (and the bizarre non-apology, non-explanation letter from the Anheuser Busch CEO) is just another example of busting Bud and burning down the house in the alleged name of expanded representation. Of course, now that the Republican old guard has reminded the young and stupid turks in the party that AB is one of their largest donors, they’ve been told to back away from this particular stunt. Amazon’s ad featuring a teenage girl with a prominent mustache that is the absolute centerpiece of the ad is just another tweak waiting to happen.    Does anyone believe that these ad campaigns on traditional broadcast TV make the slightest economic sense when the demographics of the actual viewing population continue to skew older and older every quarter?   

One of the few smart things that Elon ever did was to spend almost nothing on Tesla advertising while GM, Chrysler, Ford, and Toyota typically spent almost $2 billion a year. At the same time, Tesla’s $3 billion spend on R&D was greater than the combined spends of Chrysler, GM and Ford. Guess who’s still leading the R&D race?

We’re back – for far too many companies – to the Wanamaker times. In the 1920s, department store entrepreneur John Wanamaker was the first guy who honestly acknowledged that at least half of what he spent on advertising was wasted. But that he didn’t know which half.

 

 

 

NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 Why I Didn't Fall into the Thrall of an EV 

Yes, EVs are better for the environment. But the technology is young and still balky -- just ask Tesla owners -- and the infrastructure isn't anywhere near ready.  

 

BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS@TULLMAN 

 

We're approaching the end of the first phase of EV adoption - first movers, early adopters, tech bros with more bucks than brains, suburban keeper-uppers, and a few folks who think they're doing something cool for the climate all seem to have shopped their fill. And, notwithstanding the fact that the first-generation Teslas painfully shake, rattle, and roll after a few months of driving, there's been no apparent rush among these early buyers to trade in their "beta" versions for later, better-built models that are built to last. Plenty of these folks will tell you, if they're being honest, that the early Teslas weren't released by Elon -- they just escaped into the wild. 

And no one, with a straight face, will claim that the fit, finishes, and details of the early Teslas were anything to be proud of. The tech was great and unique; the trim, finishes, and detailing were second rate at best. Not that the owners will necessarily admit it, because most of them would rather die than die of embarrassment, but they bought a pig in a poke, waited forever to get it, and now they're living with it, but not necessarily happy about it. A recent suit by unhappy customers in California complaining about repair issues is just one of the latest examples. To keep up with their peers, they bought these beasts and now they're locked in. In the world of emerging technology, it's often just as bad to be too early as it is to be too late. 

Don't feel bad for these people because there are no victims here, they all absolutely deserve each other and the beating they're taking. And the fact that Elon is rapidly turning himself into a pariah means that the cars are becoming the newest version of mobile scarlet letters with a "T" instead of an "A". The only thing that has fallen faster than the value of a used Tesla 3 is the value of Twitter.  

Disruptive innovation typically proceeds in a fairly linear fashion - early efforts are inexpensive, rough around the edges, and bound up with cheap materials because investing in the finer aspects of the product doesn't make a lot of sense until it's clear that someone wants to buy whatever it is that's being sold. It's a bottom-up business strategy that relies on the fact that established competitors usually ridicule or ignore new startup entrants until it's too late. The Chinese took over key parts of the U.S. steel business by starting at the very bottom with cheap, ugly, and inexpensive rebar and they built their market penetration and expansion into higher quality and more expensive specialty steel from that initial product platform. 

An important sign that we've reached the end of the early going is the fact that every major automobile manufacturer now has a suite of electric vehicles for sale. And these new offerings are a serious step up in comfort, finishes, and amenities from the still stripped-down Tesla models. Detroit is no longer asleep at the switch and the biggest global players understand that -- while the basic technology will soon be commoditized - they have recaptured an opportunity to sell "steel" at scale rather than just "smarts" to the next generation of owners.  This group will, once again, be looking for all the quality and the high-end bells-and-whistles they're used to getting for luxury-car pricing. Tesla maxed out the price part of the equation, but dropped the ball on the perks that matter the most in the long term. 

It's clear that either Elon still thinks that this game is all about technology, which it clearly no longer is, or his factories can't pivot to creating high-end and high-cost Tesla versions that are qualitatively competitive with the best EVs from Porsche, BMW, Benz and GM. He's dropping the prices on every model pretty dramatically and that trend is likely to continue, especially outside of the U.S. A far less attractive explanation for Tesla's problems (not counting the Twitter and SpaceX distractions) is that Elon thinks that the next true differentiator will be fully autonomous driving while almost the entire rest of the world -- and all of its regulatory authorities -- believe that it will be at least a decade or two from today. If at all. Things may be smooth in the open highways and bright sunny climates, but there's not a major city east of the Mississippi where anyone would trust a self-driving car to last for 15 minutes.   

In addition, there's a much more troublesome set of obstacles on the horizon because (a) the problems to date are only being experienced by the very small population of EV owners, and (b) most EV owners decided that it really wasn't in their interest to broadcast just what a pain in the ass it has been to own and operate an EV, because misery loves company. The trick to happily owning a Tesla is to not mind that it hurts. As the number of EV owners continues to grow, the problems will only multiply over time. 

But don't expect the present owners to tell you their troubles. Pain is fleeting, but pride is forever and none of these folks want to admit that maybe they were a little premature and certainly that they sold a bill of goods as well. It's easier to fool people than to convince them that they have been fooled. 

Here are just a few of the things that everyone should know before deciding whether to take the EV plunge.   

(1)   Just like cockroaches, there's never just one person waiting in line at your favorite EV charging station - take a number, bring a book, and count on a couple of wasted hours. 

(2)   Charging your EV is an everyday event somewhere - whether you like it or not. You've already got a day job and maybe a dog, but here's another chore to make sure you keep busy. 

(3)   There's nothing like a cold Chicago winter to suck the life out of your EV battery and cut the time you've got in reserve to a mere fraction of what you've been promised. 

(4)   Never buy a car that you can't push. When the electrical system on an EV fails, the whole dashboard, all the assistive technology, and just about everything else disappears. You'd do better at that point to be driving a golf cart. 

(5)   Elon learned how to build a car but, in his trademark arrogance, never thought about repairs or maintenance. Minor dents cost a fortune to fix because you have to take apart whole sections of the vehicle to access certain critical components, which is something that Detroit mechanics can do blindfolded in seconds on their vehicles because their design engineers thought ahead. 

(6)   Millions of people live in multi-family residential units and, if they're lucky, there's now a charging station or two for their entire garage. Worse yet, many condo associations and co-ops won't let individuals install their own chargers even at their own expense. It's not much better at your office garage or nearby parking lot. 

(7)   There are broken public charging stations, which the locator apps fail to disclose; there are chargers whose plugs aren't universal or compatible with your vehicle; and there are growing indications that in major population centers the electrical grid itself is already insufficient to handle the projected daily loads of charging millions of EVs. 

Bottom line: while there may be use cases and even users for whom EVs make sense, the smart money is on taking it slow and letting someone else be the guinea pig as the OEMs learn that the car is only one important part of the ecosystem required to deliver a safe, secure and satisfactory EV experience at scale. After six months of trying to talk myself into an EV, I settled for an embarrassingly overpowered, gas-guzzling Mercedes AMG GT63s with all the frills possible. That certainly doesn't make me an adventurer, but I'm pretty certain that I'm always gonna get where I'm going in style. 

Rahm Emanuel Talks Amazon, Elon Musk and His Lasting Impact on Chicago Tech

Rahm Emanuel Talks Amazon, Elon Musk and His Lasting Impact on Chicago Tech

Will Chicago's Next Mayor Be as Tech Friendly?

By

 Katherine Davis

At the fourth annual Chicago Venture Summit in early October, Mayor Rahm Emanuel was touting his tenure and the impact it has had on Chicago’s tech and startup scene.

Being interviewed by tastytrade Co-Founder and Co-CEO Kristi Ross, Emanuel spewed off statistics and anecdotes, and explained to an audience of venture capitalists and startup founders how Chicago’s reputation as a tech hub has been elevated since he took office in 2011. Emanuel, who in September announced that he isn’t running for a third term, will be leaving his post at a time when Chicago’s tech scene is perhaps as robust as it has ever been.

Chicago was home to more than 14,000 tech businesses in 2017, and had nearly 342,000 tech workers across all industries that year, 4,000 more than it had in 2016, according to Downers Grove-based CompTIA. According to a PitchBook report, Chicago companies now offer the highest venture capital returns of any startup hub in the U.S. with 81 percent of Chicago exits having a 3x to 10x return. And in a report KPMG released in March, Chicago tied with Boston for the second most innovative city in the nation.

“All those data points you couldn’t have had eight years ago,” Emanuel said in an interview with Chicago Inno. “And I think they show the growth, maturity and the depth of the tech space.”

Gogo President and CEO Michael Small (right) and Chicago Mayor Rahm Emanuel (left) cut the ceremonial ribbon inside Gogo’s new global headquarters in downtown Chicago on August 27, 2015.

(Photo by Jeff Schear/Getty Images for Gogo)

Emanuel’s surprise decision to end his run as Chicago’s mayor sent shockwaves across the city—with many questioning the move while others celebrated the opportunity for new leadership. But in Chicago’s business community, and the tech industry specifically, Emanuel has been an ardent supporter of the city’s startups and regularly provided civic support to help Chicago’s businesses grow, leaving some in Chicago’s tech community anxious to see if his replacement will be as tech friendly.

“Everybody has their fingers crossed that we’ll figure out a way that we can get somebody who can do this job because it’s pivotal to the success of the city,” said Howard Tullman, the former CEO of tech hub 1871 and executive director of the Ed Kaplan Family Institute for Innovation and Tech Entrepreneurship at the Illinois Institute of Technology. “I think it’s crucial we have a mayor that signals they are business friendly.”

Emanuel has been a regular face at the city’s Venture Summits, has attended many ribbon-cutting ceremonies for the openings of new Chicago tech offices and has been vocal about the important role the tech industry plays in Chicago, which is why he helped create ChicagoNext, an organization that promotes the city’s tech ecosystem.

Emanuel’s administration also has been tech-forward on many issues, whether it was using algorithms to predict crime or more recently, installing devices on the city’s lower roadways in a partnership with Waze and Chicago-based SpotHero to prevent drivers from getting lost.

Additionally, Emanuel heavily supported the launch of Chicago’s largest tech and startup incubator 1871 in 2012, which is now home to more than 500 startups.

“[1871] spawned dozens of different incubators, workspaces, co-working spaces and programs at universities, all of which were focused on technology,” Tullman said. “Prior mayors were focused on how they could create jobs, but I think Rahm was focused on how to create a platform so the businesses can create the jobs.”

Beyond supporting resources for startups to launch and grow in Chicago, Emanuel has also been credited with persuading many large tech companies to move their headquarters to downtown from the suburbs. In 2015, in-flight internet provider Gogo moved its offices from Itasca to the West Loop. And over the summer, online grocery company Peapod and AFN Logistics also moved their headquarters to downtown from Skokie and Niles, respectively.

“All of these people have made commitments to downtown because the center of the city is where they need to be if they want to attract technical and creative digital talent going forward,” Tullman said. “[Emanuel] has made it an environment where these companies feel like the talent is here.”

“IT’S CRUCIAL WE HAVE A MAYOR THAT SIGNALS THEY ARE BUSINESS FRIENDLY.”

But not every decision made at City Hall during Emanuel’s tenure was pro-tech. He drew criticism from the tech community in 2016 for the implementation of the “cloud tax,” which taxed cloud-computing services.

And aside from tech, Emanuel has caught plenty of criticism for how he’s dealt with other issues. He has been criticized for how he addresses violent crime in the city’s impoverished neighborhoods and problems within Chicago Public Schools.

His critics have also argued that he puts most of the city’s resources downtown and in Northside neighborhoods, ignoring the South and West sides, a complaint echoed among even those in the city’s tech community, according to Emile Cambry, the founder and CEO of Blue1647, a nonprofit tech hub in Pilsen that focuses on giving STEM resources to underserved communities. Cambry worked with Emanuel initially when he was one of several tech leaders Emanuel brought together to address diversity in tech.

That helped spawn the Blackstone Inclusive Challenge, a program developed by Emanuel, the Blackstone Charitable Foundation and World Business Chicago that awards grants to organizations that recruit and support diverse entrepreneurs. Blue1647 was one of the recipients, receiving a $450,000 grant when the challenge was launched in 2017, and Cambry said Blue1647 has grown to about 300 members since.

However, Cambry said there is still work to do to spread the city’s tech and corporate resources out to Chicago’s neighborhoods.

“Ultimately, the corporate relocations are significant, but it would be great if some of those tech companies actually set up shop in our communities, especially on the South and West sides of Chicago … perhaps that would provide a gravitational pull for more resources, money and support to come to those neighborhoods,” Cambry said. “I hope that in the future, the next administration really accelerates some of that work.”

Denise Linn Riedl, the manager of ecosystem development at City Tech Collaborative and a fellow at the Benton Foundation, also said the city needs more public and private partnerships. She added that in order for Chicago to move forward as a smart city, its next leaders need to have initiatives that allow all residents to be positively affected by tech even it means engaging more with philanthropic sectors to do so.

“Civic engagement around technology is a wonderful thing that can be strengthened in Chicago,” she said.

Chicago Mayor Rahm Emanuel (left) and Elon Musk (right). (Photo by Joshua Lott/Getty Images)

Just months before announcing that he wasn’t running for a third term, Emanuel had embarked on one of his most high-profile public and private collaborations when he announced a project with Elon Musk to build a high-speed transit system connecting O’Hare Airport and downtown Chicago. But the project is a bold choice made by Emanuel given that Musk’s technology is largely unproven. Launched about two years ago, Musk’s The Boring Company hasn’t actually built any working underground transit systems yet.

Considering that, many are wondering how the project will fare now that Emanuel won’t even be in office to oversee it. And with Musk recently being sued by the Securities Exchange Commission and his other erratic public behavior, faith in the project is wavering even more. Even still, it doesn’t seem to phase Emanuel.

“I think he has a lot to prove, but what better way to do it than to have a new project that succeeds?” Emanuel said.

But the O’Hare transit project isn’t the only tech initiative on the horizon since Emanuel announced he won’t be running for a third term. Chicago and 19 other cities across the country are waiting for an answer from Amazon on where it will build its second headquarters. Emanuel has been as vocal as any mayor on the importance of landing the tech giant’s HQ2, having his administration and other tech leaders show Amazon execs around the city to highlight the city’s strengths. Amazon was reportedly back in Chicago in August touring potential sites for HQ2. But could Amazon’s interest in Chicago weaken with Emanuel out?

“They’re not making this decision based on my one term,” Emanuel said. “I’m a factor, but the biggest factor is Chicago’s strengths, and they endure past the one term of any individual mayor.”

But whoever Chicago’s next mayor is could impact Amazon’s decision and those of other major tech corporations in the future, Tullman said.

“If a new mayor is not tech-centric, or at least familiar with it, a lot of these programs are going to be jeopardized because people need to believe that there’s stable and continuing support because we’re asking all these companies to make substantial investments, and they don’t want to be in a situation where they’re halfway through something and the game changes,” Tullman said.

(Photo by Scott Olson/Getty Images)

(Photo by Scott Olson/Getty Images)

Of the 17 people who have announced they are running for mayor, about three have a tech and business background or interest. They include Bill Daley, the former U.S. Secretary of Commerce, who was also a lawyer and banker, Neal Sáles-Griffin, the CEO of CodeNow, a nonprofit that teaches young people to write code, and Dock Walls, who has proposed making nanotechnology Chicago’s newest industry.

Regardless of who ends up replacing Emanuel, he believes he has helped leave a lasting impact on Chicago’s tech and startup ecosystem, adding that it is “without a doubt” easier to start a company in Chicago than it was when he took office.

“When I became mayor, the company we were known for was Groupon,” he said. “Today, you have Braintree, Fieldglass, Cleversafe, Grubhub. There’s a whole host of companies that have been sold or gone public that know this is a really rich and diverse tech scene, and you could not have said that eight years ago.”