Morning Brew Daily - Microsoft's AI Writes Your Emails & Don't Be Cheap with DoorDash Drivers

Episode Date: November 2, 2023

Episode 183: Neal and Toby discuss the launch of Microsoft's AI program Copilot, and how it can help you write emails. Plus, why Americans aren't confident in the economy despite high employment rates and why offshore wind farms could be in trouble. Neal shares his favorite numbers and if you want your food on time, you better tip your DoorDash driver properly. And finally, why it is Mariah Carey's time to shine. Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices

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Good morning brew daily show. I'm Neil Freiman. And I'm Toby Howell. On today's pod, if the economy is so good, why do Americans think it's so bad? Then have you been tipping your delivery drivers? If not, your orders may be paying the price. It's Thursday, November 2nd. Let's ride.

It is not just another day in the light for Beatles fans because the iconic group is releasing its final new song today. Called Now and Then, it was written by John Lennon in 1977 and left on an unreleased. and left on an unreleased demo tape until a production team used AI of all things to isolate Lenin's voice and turn it into a fully realized track. So this is what all the boomers are going to be talking about today.

And us apparently. My big takeaway from this is the Rolling Stones and the Beatles released new music this year. You two inaugurated the sphere. Brittany and Madonna have also released new stuff. The top album right now is a 2014 Taylor Swift re-release.

I think the real story is we can't move on. We live in a stuck culture, Neil. You've been sounding that horn for a while. Here's my take on this. I think this will be the last final song of any famous group ever. Because with AI, all you need is a snippet of someone's voice to generate new music. So I think these bands will just be creating new music or whoever will be creating new music with these band's voices, with these musicians' voices in perpetuity.

I don't know how that's going to look, but you already have grime saying, you can all record my voice. You can take my voice and do whatever you want with it. just pay me 50% royalties. And so this might be the final last song ever. What do you think? You can take. Is that completely out of left field?

Good take. And also, anyone can take my voice, do what they want, if they pay me 50% as well. Before we get to the news, we have a quick word from our sponsor, Brex. Brex is one of those tools that you measure in befores and afters. As in before Brex, no compliance, lots of inaccuracies, way too much time doing the books. And after Brex, increased compliance, far fewer mistakes, faster and cleaner bookkeeping. So if you're a business owner and you can relate to that before Brex camp, visit brex.com to see what life after Brex is like.

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It's mom. America's best network, Verizon. That's the one we're talking about. I'll send you text. America's best network based on root metrics, best overall mobile network performance, US second half, 2025, four new lines and a limit and welcome and auto pay. See Verizon.com for details. Neil, for our first story of the day, a lot of people credit OpenAI with kicking off the artificial intelligence boom when it launched chat to BT back in November 2020. But you could make an argument that the boom truly kicked off in earnest yesterday when Microsoft started selling co-pilot an AI-powered add-on to its office suite to the public. That means as you get freaky in the Excel sheets and hammer out emails and Outlook, you can now pony up to have an AI assistant helping you each step of the way.

This is a big stage as it comes for artificial intelligence, an estimated 382 million commercial users use Office 365, and Piper Sandler analysts estimate that if just 18% of eligible users sign up for the $30,000, a month subscription to Co-Pilot. It could generate more than $10 billion in annualized revenue by 2026. And the way Microsoft CEO Satya Nadella talks about the tool, it seems like that 18% number may end up being conservative. He said, customers tell us that once they use Co-Pilot, they can't imagine work without

it. And he said last week, he also added last week that 40% of the companies in the Fortune 100 were already using Co-Pilot through an invitation-only early access program. Neil, I think what gets people so excited about using Copilot to Augment Office is how interactive all of Office's components are. Imagine being able to open a Word doc and ask Copilot to draft a bulleted set of notes based on a team's meeting that happened yesterday. It could and probably will change how corporate America works forever. Yeah, for everyone listening to this, and if you're on the Office Suite, if your company uses Microsoft, I mean, your company will make a decision right now,

whether they should get it for all of its employees. To me, this is clippy in its fully evolved form. My understanding is that you can just ask it in plain English to do something that might previously have required you filtering through a lot of software menus and help questions. So say you're on a PowerPoint and you want to change all of your headlines to Calibri font or Trebouchet, which is one of my favorite fonts. Instead of going through all the menus and doing that for every single,

single slide, you can literally just ask co-pilot, change all my headlines in PowerPoint to, you know, green or orange, and it'll do that for you. Obviously, it does a lot more other things, like it can generate documents, it can summarize emails. If you're out of office for a week, you can say, hey, what happened with our client X last week? And it'll write up a big summary because it can go through all of the office apps like Outlook and PowerPoint and Word. So it seems super powerful and all of the reviewers who looked at this software and had Microsoft work them through it, they're like, I think this is really going to change the work forever. Yeah, no, the opportunities really are kind of endless with just how many ways you can use it.

To me, what stood out is how you can use it in Excel, because for those less inclined, Excel inclined out there, you can ask it to generate a pivot table or something like that without having, you talked about going through menus. Excel is like notoriously, there's so many different options you can do it. game changer so much easier, but also it might eliminate half the personalities of finance pros with their whole thing was, I'm so good at Excel. Now, hey, I'm just as good as you, Jason from Goldman. But also, I do think what was interesting to me is Piper Sandler thinks it might benefit execs the most. Which I didn't think about, but they're saying these are the people whose time is theoretically the most valuable to the company.

And if it can go through and summarize emails or help with just the sheer amount of information that they get on a daily basis, it could really unlock productivity. But I see it working all the way from Exence down to the spreadsheet warriors at the bottom of the pyramid. Let's talk about the cost for a second because it is $30 a month per person. Microsoft is only releasing it to large companies right now. So you have to have 300 employees sign up. This is going to be a big question for CIOs, who we don't really talk about much on this

podcast, but they are probably evaluating whether this is worth an extra $9,000 a month. You know, for a large Fortune 100 company, an extra $9,000 a month for the potential productivity benefits from something like this might not be so much, but it is a 60% increase from the current Office 365 suite. So there's going to be a lot of, you know, questions on how much this improves productivity. There are going to be a lot of surveying workers. And I think everyone in the entire corporate world is going to be watching this first initial test case to see how this is working and whether it is truly the revolution that, you know,

Microsoft house it as. Yeah, it just, it has to be good. Like, people have to like it for any of those things to come to pass that we've mentioned. Okay, let's talk some U.S. economy at its second to final meeting of the year yesterday. The Fed did what everyone was expected and did nothing. Jerome Powell and his buddies held interest rates at a 22-year high, saying that inflation was coming down nicely and the economy was in a strong place. It's the first time since the Fed began its rate hiking campaign in March 2022, that it skipped a rate increase for two consecutive meetings. It's a sign that we might have finally reached the end of this hiking cycle, but we don't know for sure yet. What I want to talk about is something I just mentioned. The economy is strong. And this is an undisputable fact.

GDP stored at 4.9 percent rate last quarter putting the economy on a faster growth trajectory than had the pandemic never happened. The unemployment rate is super low at 3.8%. 2.3 million jobs have been added this year and there is another 10 million job vacancies, household wealth grew 37% between 2019 and 2022. But the question economists have been wrestling with for the past year is, if the economy is so strong, why do Americans think it's so bad? In a Wall Street Journal survey from August, 69% said the country was going in the wrong direction. The University of Michigan Consumer Sentiment Index is at levels you'd expect in a recession. And even more perplexing is that while Americans view the economy as bad, they are very happy about their own personal finances.

In a recent Quinepeak poll, 71% of Americans said the economy was not so good or poor, and 51% said it was getting worse, but 60% said their own financial situation was good or excellent. So this is truly the economic mystery of our age. What could possibly explain this dissonance? It's very confusing, and there's a couple of theories out there. I think Sticker Shock definitely plays a role for sure, Because, I mean, just look at the average Starbucks coffee. It's gone from under $3 at the start of the pandemic to now it's right around that 363 range as of the second quarter.

And then it's one of those things where you also, you remember what items used to cost two, three, six months ago, but also two or three years ago. And when you remember that, anytime you see an item in a store that is higher than that price, you think, oh, my gosh. Everything is more expensive. And even though real wages are rising, technically it's kept pace with inflation. It doesn't feel that way when you're in the line at the Starbucks store. And another potential explanation is political polarization. That definitely plays a part. Democrats and Republicans think the economy is great when their party controls the White House.

This has been going on forever. The Quinn v. Act poll I just mentioned found that more than half of Republicans and Democrats rated their personal situation as excellent or good. But when you look at the political party breakdown, only 5% of Republicans said that same thing about the economy as a whole compared to 58% of Democrats. But also, this doesn't fully explain it because you'd expect it to kind of wash out on net, but overall Americans think that the economy is in a bad place.

Yeah, because, again, this was from the Wall Street Journal article written by Greg Gipp. He said there's just a lot of things to be dissatisfied about and he thinks maybe the pessimism is related to this thing called referred pain, which is like just when one part of your body may hurt because of an injury, another part may hurt as well. And so there's a lot to be, potentially pessimistic about from intensifying political and cultural conflicts. You have the pandemic

where we still are moving on from mass shootings, crime. We have wars in Ukraine and now in the Middle East as well. So all of those things could be weighing on kind of the consumer psyche and leading to this kind of economic dissonance, if you will. Yeah. So maybe just you think overall things are in a bad place and you misattribute it to the economy because you can't really deny the fact that the economy is doing well. So all of these things may play into the fact that we're seeing consumer sentiment at levels that you'd expect in a recession, and yet all the other actual indicators are doing really well. Kyla Scanlan, who's this finance creator, coined this term vibe session last year, which has been used a lot around economic circles to explain what's going on with

the economy doing well, but people feeling like it's not doing well. Yeah, the vibes, man. Let's get the vibes up. All right, for our next story, the fateful Ocean Wind One and Ocean Wind 2, offshore wind turbine projects have met their demise. The Danish developer Orsted decided to throw in the towel yesterday, quitting the project that was already underway off the coast of New Jersey before the losses got even worse. Remember, these are the same projects that were politically charged from the beginning as residents of the Jersey Shore protests of the effects the turbines might have on tourism revenue or fishing halls. In the end, though, it was a combination of high inflation and soaring interest rates,

as well as pandemic-era equipment shortages and supply chain issues that ended up convincing Orsted to take the L, forcing it to write off $4 billion. The project was a major temple of Biden's, the Biden administration's push for clean energy, and would have generated enough electricity to power half a million homes starting in 2025, but now it's a blemish on the administration. Green Agenda. Neal, offshore U.S. projects certainly aren't dead, but they are wheezing for sure. This is an industry in crisis right now. One industry exec at a recent Financial Times conference said it was fundamentally broken, and for many reasons this is happening.

You're building basically industry from scratch in the United States. This is going okay in Europe in China, but in the United States, we have none of the infrastructure to make this happen yet and with rising inflation and higher interest rates, when companies are just going on Excel and helping having co-pilot, ask them to run the numbers. It's just not working out. Yeah, it reminds me a lot of actually the Air Force One contract that we've spoken about, where Boeing locked in this kind of long-term contract that didn't factor in inflation.

A lot of those early contracts from these wind farm producers lacked protection from inflation. And again, these are very common. complex things. The turbines are half of the size of a football pitch. Yeah, it's, no, the turbine blades itself. The turbine blades. Right. Yeah, the turbines themselves are even bigger. And yeah, so you're building out in the middle of the ocean. In the beginning, the story was all about supply chain issues because this was started before the pandemic. But now it's all about how much everything costs. And like, even though you have the ability to source the goods, now everything due to inflation is just more expensive. Yeah, this is definitely a blow to our

carbon emissions targets in the United States. We're doing really well in solar. When you look at the numbers, it's kind of crazy. We're very adept at deploying solar panels. We're going to have about 140 gigawatts of solar by the end of the year installed in the U.S. offshore wind. We have seven turbines going, and they're just going to generate 42 megawatts compared to 140 gigawatts. And this is bad for the northeast especially because in the northeast, we don't have a lot of solar or onshore. wind and we're kind of relying on offshore wind. When you look at all of these projects that were going on, they were off Cape Cod, they were off New York, they were off New Jersey, and a lot of the other places in the United States do have other renewable energy options that

can help us reduce emissions. Back in old New England, this is getting tough. There are a few other projects that are ongoing and industry people say this is maybe more of a reset. There are a few projects that can be seen to completion, but it's time to do some reevaluation and find a way to make these wind turbines not as logistically complex as they have been. All right, now, before we jump into the next half of our show, we're going to take a quick break. It's time to refresh your yard during spring backyard days at the Home Depot. Get low prices guaranteed on propane grills starting at $179, like the next grill three-burner

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You win? Must be 21 to enter. Welcome back to Neal's numbers, the segment where I share three stats from the week's news that will help you fill the awkward five minutes at the start of a Zoom call. For the first stat, let's head to the world of college football, where if you're into high-scoring games, this weekend's Iowa Northwestern matchup is not for you. The Big Ten game opened with an over-under of 29.5 points, the lowest in the modern era of college football. For those who aren't into sports betting, the over-under is the betting line

on total points scored in the game. If you think the two teams will score at least 30 points combined, then you'd bet the over. If 29 points or fewer, you'd bet the under. So this 29.5 line shows that Las Vegas thinks this game is going to be incredibly low scoring. Iowa has a terrible offense, but its mighty defense holds teams to 14.5 points per game. While Northwestern has been held under 15 points four times this season, all signs point to. more punts than the Jets Giants game last Sunday. This stat had me looking for the highest over-under in modern college football, and I found that last year's Baylor v. Oklahoma State game had an over-under of 87,

which is the highest total anyone can remember. So on one hand, you have this game that has 29.5 points expect, and the other was 87. What's even funnier about this is that Iowa's offensive coordinator has this part of his contract that gives him a bonus if they average 25 points or more. per game. And right now, Iowa is sitting at an average of 19.5 points per game. So they would need to score 33.8 points in the games going forward. So basically, they need to score more points than the entire over-under of the game. So it's not looking good for old Brian Ferenz, unfortunately. Talk about stuck culture, which we did at the beginning. The first ever college football game

was between Rutgers and the College of New Jersey, later Princeton in 1869. And that game was a six to four victory for Rutgers. So we're reverting The first days of college football with this game, it is going to be super ugly. Toby, over or under. I'm going under for sure. Let's have no points. All puns. Okay.

Stat number two is about Americans' home libraries. Ugov pulled more than 29,000 Americans about the number of books they own and how they organize them, and I'll run through some of the results. 85% of Americans say they owned at least one physical book, and the bulk, 69% own fewer than 100 books. But there are some hardcore book lovers. At least 25% own at least 100 books, 4% owned between 500 and 1,000, and 3% own more than 1,000 books. God bless your movers.

So say you've got a nice little library for yourself. How do Americans organize their books? The most popular way of organizing is not organizing them at all. The second most popular strategy is organizing them by genre or subject, then by book size alphabetically by author and title. and the least organizational principle that was popular was by color. Toby, the people want to know. How many books do you have and how do you organize them? See, I've been moving recently.

So I'm not kidding. When I say I have four or five books, that's it. And they've all been ones I've accrued while living here. I feel like you have a lot more than... Well, I did have a lot of books at my last place. But again, it's all about moving. When you move, you realize how heavy books are and how annoying they are to move. So I had, you know, I would say I had more than 100 books at my last place.

but then I put them all into these cardboard boxes, could barely lift them off the floor, and I just dump them somewhere else. And now I have maybe like 10 to 20, and of course, those are the showpiece ones. It's the Robert Caro. It's the power broker. It's the ones you've got to show off

when people come into your... You have mostly cookbooks, though, too. I have a lot of cookbooks, yeah. Okay, my final stat has to do with a turmoil at Marvel, the once unbeatable superhero studio that's going through an existential crisis right now. An in-depth variety report

described how Marvel made too much content too quickly to support Disney's streaming service, cause superhero fatigue, and generally just got real sloppy with its execution. The stat that reveals the extent of Marvel's problems has to do with She-Hulk, a show that aired last summer. Even as Marvel was bleeding money, a single episode of She-Hulk cost about $25 million to make. And if that sounds like a lot, it is. The final season of Game of Thrones cost $15 million per episode, which dwarfed anything else at the time. And the problem is, Shee Hulk barely made a dent in the zeitgeist, while Game of Thrones, even as bad as that last season was, still drew a lot of eyeballs for

HBO. Yeah, I am as big a Marvel fan as they come out there. I have not watched a single show from the latest era. It was just too much too soon, and you couldn't keep up with everything, and that used to be the most fun part is seeing how everything wove together. But now, like, if you haven't seen Loki, then you don't get She-Hulk, you don't get Moon Night. See, I can still- I don't even know what you're talking. It doesn't even sound English. But yeah, Marvel fatigue is real. All right, Neil, thank you for those numbers. Let's move to the next story.

Quick tip to start this story. Tip your delivery drivers, not only because it's the right thing to do, but also because not tipping could mean a longer wait for your meal. DoorDash added a pop-up to its app this week in certain markets. Warning customers that orders with no tip might take longer to get delivered. That's because, according to the alert, Dasters can pick and choose which orders they want to do. If they see no tip ahead of time, they might strategically ignore that order. Now, this news is interesting for the consumer because even though tipping is an ingrained part of American culture, pre-tipping is still a relatively new concept born of the gig economy.

You very well may have been planning to tip your driver after the order is delivered, which is still possible within the app. But this alert makes it clear that Dasher's preference is tip before the order. Neil, I was personally unaware that delivery drivers could see your tip beforehand, but apparently this is a thing. And if you want to get your order while it's hot, you better tip well. Yeah, pre-tipping is kind of wild, but you do are prompted with it when you order Uber eats or DoorDash, and generally, I think I definitely do that. But it seems like a natural evolution from DoorDash's changed compensation policy, because

before all, it wasn't necessarily, 100% of the tips weren't necessarily given to the delivery people because if they hit a certain minimum base rate for the actual order themselves, then they wouldn't see any of the tip. They changed that structure in 2019 following this New York Times investigation. So now 100% of the tip does go to the delivery driver. And so they're very hyper aware of that because it accounts for a great deal of their compensation. Yeah. And I also just, this story fits into a lot of different things we've been talking about. Tip fatigue is another one because shoppers are being asked to tip pretty much any place they shop right now, self-checkout machines. Also, people are just a little confused at what the tipping culture is now.

Do you really tip every time that the famous iPad is turned around towards you? So maybe people are having a bit of this fatigue and passing it on to door dash drivers, even though it is a big part of their kind of, yeah, package, pay package. I think overall, in terms of the tipping landscape, delivery is pretty cut and dry, right? Like, it's not, when you order takeout and go pick it up, I think that is one of the major questions because you're going to pick it up. But when someone delivers it to you, I think it's pretty well known across society that you tip. Although, interestingly enough, business insider started to ask some delivery drivers what contributes to more or less tips. And one of them said that these Mr. B style of videos where you drop like 10 grand on a server has contributed to this general kind of thought that everyone is getting tipped very well.

And so they're saying, some people think, yeah, everyone's tipping, and you may, it's the tragedy of the comments where you think someone else is doing it, so I won't do it. So that's interesting. And the other thing, what makes people tip well, it's when Taylor Swift comes to town. They found that over the three days that she's doing an heiress tour in their city. Everyone's in a great move. The city's jubilant, and so that people are tipping better. So again, this is anecdotal evidence, but I do think it was funny that that came up. And zooming out on DoorDash, they actually just repeated, they just reported their earnings, which is great timing for us. said they had their best quarter ever since their IPO. They posted a revenue of $2.2.2 billion for the third quarter. That's up 27% from a year ago, says the business is firing on all cylinders, which I should add, they're still losing money since they're 20 years. This company is 20 years old and it's still losing money. I'm doing my part, though.

I'm a delivery order. All right. For a final story, I don't want a lot for Christmas, but I do want to close out the show by talking about the one, the only Mariah Carey and her inescapable holiday. holiday song. As soon as the clock struck midnight on Halloween, Mariah Carey jumped into action. The so-called Queen of Christmas released a video of her being defrosted in a frozen block of ice before declaring its time and then her hit, All I Want for Christmas is You, starts playing, and it won't stop for the next two months, so you better get used to it. While the song was

released in 1994, it reached number one on the charts in 2019 and has cemented itself as a staple of Christmas playlist and retail store holiday soundtrack since. Some stats on how big this song has gotten. It's earned carry at least $60 million in streaming royalties about $2.5 million per year. It has sold more than 16 million copies worldwide, making it one of the best-selling digital singles ever, not just Christmas songs. And this year, it was selected rightly, I might add, by the Library of Congress for inclusion in the National Recording Registry, which is music that is culturally, historically, or aesthetically significant, and inform or reflects life in the United States. I love that Mariah is leaning into this. I love that she posts these videos of her

literally unthawing. I mean, it's CGI, of course. One of these days I want her to actually freeze herself and unthaw herself. But this is part of a broader trend of these companies and brands like Mariah getting ahead of seasonal trends. I mean, Starbucks and Duncan added their peppermint and holiday flavored drinks to the menus this week. And then actually also the Rockefeller Center announced it had already selected. It's big old Christmas tree that it puts out in front. So again, we're seeing this holiday creep, whatever you want to call it. We talked about it with the pumpkin spice latte. It was released in August of this year, which is just crazy because nothing screams fall like August, right? So yeah, it's just, I think we're going to see eventually

maybe Mariah unfowing even earlier in October. Are you sick of this song? No, I love this song. This song is so good. I didn't realize it, but I listened to it yesterday. And, And for all the music geeks out there, listen to this song. It has 13 different chords. It is a lot of chromatics. It has influences from so many different genres. You have chimes and sleigh bells. This is a very good song.

Setting aside all the Christmas stuff, just listen to the song. It's very complex. It is actually an incredible song. I know it gets beaten into us every year. But, you know, good for her. I love it. So there's been a lot of trademark disputes because Mariah Carey wants to be called the Queen of Christmas. And she tried to file for that trademark.

But that actually got rejected last year. I say give it to her. She deserves it. That's Toby's criteria. Yeah. I did read about a goat farmer in England who said that when he plays the song, All I Want for Christmas is You, the goat produces 20% more milk. What?

Where did you read that now? A news article. The internet. That should be a Neal's number going forward. I love that. All right. That's where we have to end our show. Time really flies when you're podcasting.

We'll talk more about this tomorrow. but if you have any crazy business or startup ideas that you've been sitting on and want to get out into the public, email us because we have a special entrepreneurship episode brewing and want to go full shark tank on listeners' business concepts. So hit us up at Morning Brew Daily at Morningbrew.com with your startup idea. Let's roll the credits. Emily Milliron is our editor and producer. Samantha Velas and Raymond Liu are associate producers. Yucenoa Ogu is our technical director. Billy Manino is on audio, hair and makeup is the real queen of Christmas. Devin Emery is our chief content officer and our show is a production of Morning Brew.

Great show today, Neil. Let's run it back tomorrow. Spring just slid into your DMs. Grab that boho look for that rooftop dinner. Those sandals that can keep up with you? And hang some string lights to give your patio a glow up. Spring's calling. Ross, work your magic.