Waymo Proves That "Network Effects" Don't Always Matter

Did you see the graph with Waymo? Basically, it's proving that network effects don't matter as much. Okay, this graph over here, check this out. This graph over here shows Waymo overtaking Lyft. You can see Lyft is slowing down. This is Uber up here, right?

Is it rides per day?

Basically, it is gross bookings, yeah. So you can see in the black, it's Uber, and then in the red, it's Lyft, and then the green is Waymo. So Waymo's already overtaking Lyft, and it's gonna just keep moving up.

Because the thing is— They just released Japan.

Yeah, and then Miami too, Japan. So they're trying all these other cities. So they're just gonna get bigger. And so I'm not saying network effects don't—

Wait, is that global data?

SF, San Francisco operating zone market share.

So just San Francisco. Oh wow, which Uber is extremely popular in San Francisco.

So the thing, I don't think we're saying network effects don't matter here. I'm saying in this case, whatever product is just good, sometimes it just eliminates the network effect, right? Whatever, if you have a better product and a better experience, in my mind it's a better experience, maybe they should eliminate the smoking piece. But I like when I don't have to talk to anybody, right? When I don't have to interact with a human being.

Well, with Waymo, you don't have a smoking problem. No, I think— 'Cause people don't smoke, the driver doesn't smoke.

Well, I thought you were saying people smoke in the car. I thought that's what you were complaining about with Waymo. Oh, you're talking about Uber. Uber.

I have never used Waymo, but I've been in Uber enough.

Yeah.

And no joke, if you get an Uber Black, then there's a good chance in Los Angeles where we live, The driver smokes.

Yep. Actually, I see it in the morning when I walk to the gym. I see a bunch of them parked over there and they're all smoking in the morning, right? I'm just like, oh, you guys. But here's the thing, you should try Waymo. It's great. Your kids will be blown away.

I have a driver, so why do I need Waymo?

You need Waymo. Well, you have driverless cars coming. Why do you need a driver? I don't—

dude, my driver asked me the same question. He's like, sir, because what's gonna happen to me? Yeah. And I always tell him, don't call me sir, but he still calls me sir.

Yeah.

Really nice guy. He's just like, hey, do you think I'm going to have a job in the long run with these driverless cars? I see a lot more of them in Los Angeles. Oh, who you asked? And I was just like, yes. And he's just like, you sure? And I was like, I don't trust the driverless cars. And 2, I'm like, you're like family and my kids trust you and I trust you and I've known you for a long time. And I prefer him driving my car around versus the Waymo car.

I think the reality is he will be— and he's great, I've met him, right? Um, I think he'll be fine for the next 5, 10 years or so, maybe even 15 years. I think after that it might be a little bit of a struggle because all the cars will probably come, come built in with full self-driving, and at that point it'll become accepted. And so I think it's like a 5, 10, 15-year timeline. Even my mom was like, oh, it's over, right?

No, you, you make a good point. If If my car that I prefer driving in was driverless and it worked with good accuracy. 'Cause I've been in a Tesla car where I put on self-driving and I'm holding the steering wheel and I can tell it's going to make a mistake. And I'm not blaming Tesla. A lot of the times I've had issues with self-driving and I don't have a Tesla anymore is actually the paving of the road lanes. Like, you know when like the—

It's unclear.

It's unclear and they have one, they have 2 lanes and they paved over, right? Let's say you have a left and a right lane You're supposed to go in the middle.

Yeah.

And it's fading. So then they paved new lanes and they put it in a little bit different of a place. It screws up the damn self-driving car and they don't know what to do. And I'm like, this is not really a technology standpoint. It's humans just not doing a proper job with paving the roads.

Yeah. And, and by the way, and that's why I don't trust it. We talk about, so AI, well, how does this relate to business and marketing? Well, I also looked at a paper today, or I looked at some data showing that AI 01 preview, ChatGPT 01 preview, um, which is no longer 01 preview, it's actually just Pro now, right? Um, it performs in terms of medical diagnoses, um, regular, a human physician maybe gets it right, like, you know, 25 out of like 143 or something like that. The AI is like 85 out of 143. So it's much more accurate. So I think we're gonna move into a world where we're just gonna see more and more accuracy. Um, and to do like a medical procedure or to drive or whatever and not use AI will be like an offense, would be like a criminal offense. And I think the same thing's going to happen with, with work as well. And the quote that sticks with me, I listened to a Satya Nadella and Brad Gerstner and Bill Gurley podcast. Did you listen to that one?

I did not.

That's fantastic, right? So Satya said this, Brad Gerstner was like, he's an investor. He was like, so Satya, what's going to happen to headcount at Microsoft? He's like, you know, Satya Nadella, CEO of Microsoft. He's like, you know, the way we see headcount is headcount numbers are going to go down. Cost per headcount is going to go up. GPUs per researcher, so graphical processing units, right? Like an NVIDIA chip, that's going to go up. So more AI chips, okay, more, more, more compute. And the people that are the humans that are fully employed, their paychecks are going to go up, which I believe, which we've kind of talked about. And I believe headcount is going to come down. But it's not to say humans are all going to be useless. They're just going to go do other things. The number one challenge for businesses is hiring. And more specifically, the number one thing I get asked for all the time is, Eric, where can I go find an amazing marketer? And the reality is right now, when you think about the world, we have inflation. That also means wage inflation right now. And it means that when it comes to hiring talent, you can't spend as much as you would have in the last couple of years because it's just become too cost prohibitive. And so we've partnered with one of the best offshore recruiting firms when it comes to marketing. They've been a great asset for us, and I believe that they will be a great All you have to do is go to marketingschool.io/hire. Again, it's marketingschool.io/hire to learn more. You can fill out the form there and we're going to place you with the best marketing hires that we can help you find.

So I was doing lunch with this guy who has a, I believe, plastic surgery company in Beverly Hills. His name is Deepak Dugar. I believe like he does like nose jobs and stuff like that. We were just doing lunch, him, his brother, his brother has a, I believe a medical marijuana company, and he's in YPO. And we were just talking, and we were— I was talking about—

Oh, is his brother's name Anand?

Uh-huh.

Oh yeah, Anand Dugar.

Yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah. So I was talking to Deepav, I was like, dude, why don't you scale out your practice globally? And he's a world-renowned surgeon, I believe, for nose jobs. And he's just like, they want me because I'm really good at this one thing. I was like, well, when AI comes, you can just end up having it help you out and you can scale. He's like, no, it won't work that way. And I was like, why not? And he was like, imagine AI telling you, do you just want your nose like this? And he's like, there's so many intricacies with nose jobs or teeth and people want it a particular way. He's like, these people, a lot of them are flying all over from the world for him to do it because he's literally one of the most leading experts with this type of surgery. And he's like, they're not going to want to risk a machine being like, hey, it can look like this and show you an image on your face and then just do it. And what happens if it screws up? And I'm not saying it will or will not, but most humans who have the money to pay an exceptionally good doctor, which, you know, he supposedly is, and I'm going to take his word for it, he seems brilliant and a smart guy, you would just pay the money to know that the guy who's been doing it for 20 years and is one of the best at nose jobs to just do your nose job versus a computer or a robot.

I think he's wrong. Um, I think he's right in the short term for the next 5, 10 years or so.

I think he's right for the long run because medical is highly regulated, but I do think it'll be AI assistant, not replacement. And people will still pay him to do it. He'll just become— he'll level up a little bit more because of the technology.

I think you'll get a lot of time back. And so this is something I tweeted. I said, humans are for create— so humans are for creating, machines are for making.

Yeah.

And that's what I think. So anyway, that's it for today and we'll catch you tomorrow.