Earlier this year, I co-founded the Startup Club at Foothill College. This, in the grand scheme of things, is a minor accomplishment, but it taught me, a business student, a good deal of practical knowledge that I could never learn in the classroom. I would like to provide a few simple lessons I learned over the past few months, perhaps they might be helpful to you all.

On Conducting Interviews:

Do build our team of officers, we had to conduct interviews. Here is what I learned on team-building from these interviews.

How do you find the best potential candidates for a team? This is something that is the center of much disagreement within the corporate world. While references are useful in theory, I don’t think they are that useful as you are effectively extending your current team, rather than expanding what your team can be. Conducting open and fair interviews allows you to assess potential candidates fairly. For our interviews, we had initially created complete scripts and a firm set of questions. However, we found that these question sets would prove to work only in setting up the conversation, and helping us return to topic if things got too sidetracked.

A few interesting thoughts I have in terms of interviews:

- Technical skills can be learned, interpersonal skills and a willingness to learn are harder to provide. Finding someone who is enthusiastic and curious, and you have someone incredible.

- See if their personality vibes with yours and the rest of your team. This is extremely important, as a team must work better as a collective than the individuals working on their own.

- Awkward moments are an incredible thing. Few things better reveal how an individual truly is than when they are faced with an awkward silence or a bizarre (though appropriate) question. Breaking the flow of difficult questions with a few lighthearted and casual questions was what I used for this purpose. Keep in mind this is not a perfect strategy, as some of my club members were initially silent and only engaged in casual chitchat after being an established part of our team.

- A good question that I loved to end interviews with was “If this position and our club didn’t exist, what would you do with the time you are currently willing to dedicate to this post?”

- Good interviewees ask questions. As someone who has been interviewed and has interviewed people now, the latter act completely changed my perspective on “any questions?” People who have genuine questions and seek to learn more about you and your organization stand out, as they are already clearly engaging with your organization and its ideals.

- Look for future leadership. This is especially important with college clubs, as we only have a few years to lead them at most, but is generally speaking a great principle.

Maintaining Your Team

Once you have built your team, maintaining it and seeing that it functions is the most important task. It also might be the most difficult one you will face.

- Expect certain members of your team to ditch. There will always been individuals who seek only to claim credit for your organization’s work (most often for their resume), and you should anticipate these people working for the initial few weeks before disappearing.

- At the same time, there will be members of your team that refuse to stake claim to major roles officially, but will do the work. Do not worry about members of your team ditching, these strong individuals will replace them. Remember to give them the credit and appreciation they deserve!

- Test out your candidates for future leadership. Give them tasks to lead within your organization, and see how they do it. Some future leadership candidates will turn out to not work well with the mission of your team, while others will certainly excel.

- No one leads alone. Find a stable team of leadership around you. Amongst our co-presidents, one of them who is the best at handling emails and internal coordination does such, for example. While it may be tempting to do as much public-facing work to claim credit, it is much more efficient to divide up tasks based on skills for an organization you want to see stably grow in the long-term.

I will repeat and build on the final point. No One Leads Alone. Build a team that you can trust and believe in. A team where everyone trusts each other is worth more than a highly skilled team. A team where tasks are evenly split without “mine” or “yours” dominating the discussion is worth its wait in gold.

This was a bit different of an article, but I do think it was very interesting to write. Let me know if you enjoyed it and would be interested in seeing other such articles soon.

Back in October, I had written an article on the debate surrounding tariffs in the 2024 United States Presidential Election. Well, since then, Donald Trump won the election and was sworn in as President. He has since enacted an aggressive version of his tariff policy, with a recent “liberation day” tariff announcement, where he enacted a flat 10% tariff and tariffs on countries with which the United States has a trade deficit. This has since led to a large-scale stock market crash, while being the most aggressive tariff placed by the United States since 1930’s Smoot-Hawley Tariff.

A reminder that I am a sophomore student of economics. A lot of economic theory is intensely debated to this very day, and I am only explaining the little I know in simple terms.

Today, I am going to focus on marcroeconomic consequences of these tariffs. I will not focus on the stock market, as it is a completely separate can of worms, and I don’t want to make this article too long. However, if there is interest, I could make a follow up article focusing on the stock market consequences of such a decision.

To briefly define a tariff, a tariff is a tax on foreign imports or exports. Typically, the goal of tariffs is to strengthen domestic industry against foreign competition. However, their efficiency is criticized by many free trade advocates.

Free trade’s criticisms of tariffs are based on the principle of comparative advantage. The principle states that every country or region can specialize in particular types of goods or services depending on their available land, labor, and capital. They can then trade these goods with other countries and achieve more goods. Effectively, free trade turns what you have into what you want, allowing everyone to get more of everything.

This principle (of comparative advantage) was the creation of economist David Ricardo back in the early 1800s, and has since been the dominant global economic philosophy. In 1944, in reaction to high tariff rates, GATT, the predecessor to the WTO, was created to lower tariff rates. From 1944 to 2025, tariff rates have largely stayed at historic lows.

Meanwhile, critics of free trade point out that while free trade has led to net growth in jobs, the gains haven’t been even and inequality has increased. Other criticisms state that free trade is used as a neocolonial tool to maintain power over foreign countries. That said, free trade is associated with a global decrease in poverty and mortality rates.

President Trump’s new tariffs have seen criticism from free trade advocates across the aisle. Rather than just attack the United States’ historic enemies with these tariffs, his administration has targeted most countries with which the United States has a trade deficit with.

However, the United States’ trade deficit has had a historic purpose. The United States’ trade deficit has served as a tool of spreading US Dollars (USD) across the world, allowing the USD to maintain its place as the world’s reserve currency. A trade deficit means that the United States has an investment surplus, after all.

Of course, there are potential costs associated with becoming a country with large trade deficits, but its important to remember that every decision has consequences.

Questions have also been raised in terms of the effectiveness of tariffs as a potential negotiating tool. So far, nearly every major increase in tariff rates over the past hundred years has been associated with reciprocal increases in tariff rates. Of course, the Trump administration has suggested that the reason for these tariffs is to target countries placing tariffs on the United States, but the rates seem to be targeting nations with trade surpluses with the United States.

The principles of individual tariff rates per country break the rule of Most Favored Nation (MFN), which states that a nation should place the same protectionism rates on all nations within a group, which is followed by the World Trade Organization and theoretically by all its nations. However, the WTO has not had adjourning judges since 2021, leaving the organization on ice, and the principle of Most Favored Nation effectively dead.

There is a legitimate argument for reciprocal tariffs and dealing with protectionism placed by foreign countries, particularly China. However, a blanket tariff targeting trade deficits will only end up weakening the United States’ standing internationally, and potentially lead to recession and inflation within the United States (known by the terrifyingly bizarre term – “Stagflation”).

Even the economists that the White House has quoted to explain their tariff rates have criticized the particulars of Trump’s tariff deal. Even if the goal was to reduce the United States’ trade deficit, a blanket rate determined by existing trade deficits is unlikely to lower the trade deficit (even if that was a good goal), as individual nations will just reduce trade with the United States, rather than balancing imports and exports.

Of course, everyone is entitled to their own perspectives, and perhaps I could be wrong on the tariffs. Economics is a soft science, relying more on human behavior than universal rules. However, economic history is clearly against such a tariff raise.

On January 27, the myth of American supremacy in the AI market took a hit as Chinese startup DeepSeek released its R1 update, which nearly matched the latest version of ChatGPT. To say this shook the AI industry—and the stock market—would be an understatement. Some commentators online even suggested this was a Sputnik-level paradigm shift. How did this happen? Why did it happen? And what does it mean for the future of AI? These are the questions we’ll explore today.

For the past few years, ChatGPT has dominated the AI space, with no competitor coming close. The latest version, GPT-4o, integrated more advanced reasoning into its architecture. The runaway success of ChatGPT even led Sam Altman to seek $7 trillion in funding to scale AI infrastructure. This boom fueled NVIDIA’s meteoric rise, making it the most valuable company in the world at one point. The American AI bubble became the defining technological wave of modern times—seemingly unsinkable.

That was until January 27, when DeepSeek disrupted the narrative.

DeepSeek: The Dark Horse of AI

To understand how this happened, let’s go back to 2016. Liang Wenfang, an entrepreneur with a background in finance, founded High-Flyer, a venture hedge fund. A young computer scientist with a deep interest in algorithms, Wenfang eventually launched DeepSeek in 2023, one of many Chinese AI startups hoping to make an impact. Initially unknown even within China, DeepSeek only gained serious attention in late 2024, and by early 2025, its R1 model was nearly on par with ChatGPT.

How Did DeepSeek Catch Up?

DeepSeek’s rapid progress comes down to a few key factors:

1. A Young Workforce – DeepSeek intentionally hired employees born after 1998, prioritizing innovation over experience. It was a gamble that paid off.

2. Open-Source Development – Unlike OpenAI’s proprietary models, DeepSeek is open source, allowing for greater community contributions and improvements. However, it does have some weak censorship measures to comply with Chinese regulations.

3. Multi-Agent Architecture – Instead of relying on a single large model, DeepSeek operates using multiple “mini-bots” that reach decisions through consensus. This multi-agent approach makes it unique and gives it potential advantages in reasoning tasks.

The Aftermath: A Global Reaction

DeepSeek’s rise immediately sparked debate about its implications.

• U.S. Stock Market Turbulence – The news caused a flash crash, with some calling it AI’s “Sputnik moment”—a wake-up call that the U.S. no longer holds an undisputed lead.

• The "$5 Million" Rumor – Reports (later disputed) suggested that DeepSeek developed its model on just $5 million, compared to the billions spent by OpenAI and Google DeepMind. This raised concerns that China could scale AI faster and cheaper than the U.S.

• A Temporary AI Truce – At the time of DeepSeek’s rise, Sam Altman, Mark Zuckerberg, and Elon Musk were locked in a legal and public feud over AI development. For a brief moment, DeepSeek united the warring factions, with Altman accusing DeepSeek of basing its models on ChatGPT data. The irony? OpenAI itself built its models using publicly available internet data.

What This Means for AI’s Future

DeepSeek is revolutionary, but perhaps not in the way people initially think.

• By being open source, DeepSeek could accelerate innovation globally.

• It shattered the belief that American AI dominance was unchallenged.

• It introduced real competition, which could push AI development forward faster than before.

In China, DeepSeek’s success is being celebrated as a breakthrough that didn’t rely on heavy government funding—a rarity in the country’s tech sector. Liang Wenfang is now a national icon, representing Chinese ingenuity.

For the U.S., the message is clear: AI is no longer a one-horse race. Whether DeepSeek continues to grow or fuels geopolitical AI tensions remains to be seen, but one thing is certain: the era of uncontested American AI dominance is over.

One of the most important moments in the history of the world was the rise of capitalism in the 17^th century. No land was more consequential for the rise of capitalism than the Netherlands, an economic powerhouse of that time period that created stock exchanges, global economies, the first corporations, and what we will discuss today: the first financial bubble.

We all have heard the basic story of tulip mania. To summarize, in the 1630s, the Dutch had formed a republic for the first time in their history, led by a new middle class that was eager to stretch its economic might and showcase its wealth and prestige. However, the religious laws at the time made sure that there were limits to what could be purchased to show off. As a result, tulips became a symbol of the growing entrepreneurial class, with rarer tulip varieties becoming more valuable.

The reasons for tulips becoming the status symbol of the Dutch were manifold. For starters, as the flowers were native to Central and West Asia, they were (at the time) quite rare in Europe. They involved activity (growing, planting, and trading) to use and were inherently customizable, with many varieties, some rarer than others.

Soon, the prices of valuable tulip varieties, such as the Semper Augustus, reached astronomical levels. In one notable example in February, 1637, a flower sold for 5,000 livres, when a skilled worker’s salary would be 250 livres a year. In other words, the most expensive tulips sold for the price of some of the most expensive Amsterdam homes.

As the tulips market grew more competitive, a futures market emerged for the first time. Individuals purchased the option to purchase tulips in the next harvest season with IOUs, hoping to sell them for a profit in the future. Then, they would sell these options to those hoping to profit on them, creating a second-hand market for tulip options, traded through IOUs.

Interestingly, despite pioneering options trading, the tulip traders were excluded from Amsterdam’s financial markets, as the trading of tulips was considered inferior to the “genuine” trading on the stock market.

Eventually, the tulip market reached a peak in February 1637 when the market began to collapse. Contrary to popular belief and my initial assumptions, the market crash was not the result of increased skepticism in investors, but due to an increase of supply. As it turned out, tulips happened to grow really well in the Netherlands, and soon the tulip market was flooded with an exceptional amount of tulips after a great harvest season.

As the value of tulips fell, many investors were left with IOUs to pay off their IOUs, leaving the entire tulip market on shaky grounds. Eventually, most Dutch courts invalidated most of these IOUs, saving most investors while bankrupting the tulip farmers who initially sold these tulips.

Most storytellers end the tale of tulip mania right here, often with some note about how this was the first financial bubble to ever burst in our economic history. However, after reading up a little for this article, I think that tulip mania is a bit more complicated than pop culture depicts it as.

For one, while the tulip market crashed, it eventually recovered, to the point that tulips are still one the Netherlands’ most profitable exports. In fact, not long after the tulip crash, the struggling tulip farmers found new markets throughout the rest of Europe and the Middle East.

Additionally, the worst effects of the tulip crash were exaggerated by British and Dutch upper class, both of whom would benefit to see the discreditation of their rivals in the emerging Dutch merchant class.

As a student of financial markets, I find many ties between tulip mania and the dot-com bubble of 2000. Both of these crashes were proclaimed to be the end of their respective products from respected academics, but both went on to continue to be successful because people liked the products beyond their investment.

People found value from tulips and websites beyond meaningless financial speculation, and thus these products survived their initial financial crashes. This is what differentiates tulip mania and the dot-com crash from crazes such as beanie babies and pet rocks; there is an underlying value to the product being sold.

Part of me wonders if an initial crash is a required growing pain for any new product that becomes a conduit for investment. It happened with internet, it happened with tulips, and you could argue that it is happening with cryptocurrency, but that is a topic for another day.

In our post-Black Thursday financial world, it is a generally acknowledged truth that infinite growth for a potential market is improbable, if not impossible. However, I’d argue that for any product which people derive use from, infinite loss is also impossible.

Eventually, a market stabilizes. It will no longer generate flashy headlines about gains and losses as it used to, but it will become an acknowledged part of the world. That is what happened to tulips nearly 400 years ago, with websites twenty-five years ago, and will continue to happen into the future.

When I launched The Bhatt Report earlier this year, one of the first topics I planned to tackle was Spotify’s financial woes. Yet, just as I began drafting, Spotify dropped some surprisingly positive revenue numbers, signaling that its days of unprofitability were over. The catalyst? AI. Through its smart integration of AI, Spotify turned a corner, impressing shareholders with a profitable quarter. In my year-end roundup, almost every major tech company had found success through AI in some shape or form. From algorithms to AI-driven staffing solutions, companies embraced the tech to streamline operations and expand their reach. Spotify, with its AI-powered enhancements, managed to do just that.

AI, when deployed effectively, is essential for the future of tech companies. However, AI must be implemented with foresight and precision. Take NVIDIA, for example—its seamless AI integration has elevated the company to new heights. Or look at Nooks, a Bay Area startup that earned a spot on Forbes’ 30 Under 30 thanks to its innovative AI sales assistant. These companies excel because AI augments their existing products, enhancing customer experiences without replacing the core value propositions. But there’s a key lesson here: AI should complement a service, not overhaul it entirely.

Sadly, this is where Spotify went wrong with its 2024 Wrapped campaign.

Spotify Wrapped: The Sweet Spot

Even in its early, unprofitable years, Spotify was always seen as a leader in the music streaming space. The company’s algorithmic prowess, clean UI, and the much-loved Spotify Wrapped were major contributors to its status. Wrapped, for the uninitiated, is Spotify’s year-end ritual where it takes users on a personalized journey through their listening habits, showcasing top songs, artists, and genres. Ironically, Wrapped was inspired by an email newsletter from a former intern, Jewel Ham, who never got offered a full-time role at Spotify.

Eventually, competitors like Apple Music, YouTube Music, and Tidal caught on and launched their own versions of year-in-review features. But Wrapped remained a cut above. While it didn’t offer as much data as some of its rivals, it struck a perfect balance: it was simple, nostalgic, and fun. The emotional connection Wrapped fostered was unique. Your favorite songs played in the background, a brief yet touching review of your year as a listener, with small surprises like messages from the artists themselves. It made you feel seen. Spotify had created a tradition that users genuinely looked forward to every December.

Over time, Wrapped evolved. It arrived earlier in November, more interactive elements were introduced, and artists recorded personalized video messages for their top fans. These updates were thoughtful and added to Wrapped’s charm. For all its data, Wrapped was never overwhelming—it was your year in music, presented simply and beautifully.

In 2023, Spotify added a new feature that told you which city your listening habits most resembled. (For me, it was Noida, India, if you’re curious). Wrapped was now more engaging than ever, a highlight of the year. Which is why 2024 Wrapped’s bungled rollout has left fans scratching their heads.

2024 Wrapped: A Misstep in AI

On December 4th, later than any previous year, Spotify released 2024 Wrapped. The internet’s reaction? Instant confusion and disappointment. It was clear that AI had been integrated into the experience, but not in the way users wanted.

First up, the classic list of top genres was replaced by an abstract “listening mood” feature. Rather than simply telling you that you listened to “Indie Folk,” Spotify now informed you that your mood for the month was “Rainy Day Fingerstyle Folk Rock” (yes, this was an actual example). While AI was employed to generate these labels, Spotify missed the mark. Users have always appreciated Wrapped for its simplicity and clarity, but the new mood descriptors felt like overcomplications. In the past, we could look at our genres and instantly understand what Spotify was communicating. Now, we were left to decode vague, convoluted phrases.

Even worse, Spotify axed some of the most beloved elements of Wrapped. Gone were the insights about our listening style, the comparisons to cities, and the breakdowns of our favorite tracks. The magic that made Wrapped feel personal was lost in a sea of generic AI-generated data.

Spotify did introduce a new feature: an AI-driven podcast that supposedly explained your listening habits throughout the year. But the execution felt off. The technology wasn’t refined enough to deliver an experience that felt meaningful or engaging. Instead of amplifying the charm that Wrapped built over the years, it served as a stark reminder that AI can’t simply replace the human touch.

2024 Wrapped had the data, the AI, and the potential to be another hit—but it missed the mark. The result? A product that, while technically advanced, felt soulless. Wrapped’s appeal wasn’t just in its data; it was the story it told about you as a listener, a story that felt personal, emotional, and familiar. That element was sorely lacking this year.

The Takeaway: AI Should Enhance, Not Replace

Spotify had everything it needed for a standout Wrapped this year: data, AI, and a loyal fanbase. Yet, it failed to preserve the essence of what made Wrapped special. In tech, AI must be used carefully. When used properly, it can transform a product or service—but only when it complements, rather than replaces, the human elements that make a brand resonate. In the case of 2024 Wrapped, Spotify forgot this crucial lesson. They had the right ingredients but didn’t quite know how to mix them.

As the streaming market becomes more competitive, Spotify’s misstep with Wrapped may cost them more than just user disappointment—it may erode the emotional connection that made Wrapped one of the most anticipated events of the year. AI is a tool, not a cure-all. When done right, it can drive growth. When done wrong, it can alienate your core audience. Let’s hope Spotify learns from this mistake and gets it right next year.

The Bhatt Report: 2024 – A Year in Business

As 2024 draws to a close, it's time to reflect on the business landscape that was shaped by global events, political shifts, and powerful market forces. This year, more than most, businesses found themselves at the mercy of a turbulent world stage. From the assassination attempt on former and future U.S. President Donald Trump to the deepening rivalry between Russia and China versus the United States and the European Union, the world’s power dynamics had a massive impact on business strategies. The looming threat of a TikTok ban in the U.S. sparked fears of a fragmented global market, while the debate over tariff policies and the growing likelihood of a potential trade war have left business leaders on edge.

2024 was a year of great volatility for some of the biggest corporations in the world, as some fell hard, while others rose to extraordinary heights. Intel, once a titan of the tech world, struggled through a series of challenges, culminating in a major CEO change at the year’s end. CrowdStrike, a leader in cybersecurity, faced one of its worst crises, and Boeing encountered a storm of issues that captured public attention. On the other hand, several companies defied expectations and soared to new heights. Duolingo, powered by a highly effective marketing campaign, became a household name, while major social media players inked lucrative deals that bolstered their growth.

The semiconductor industry, arguably the most dynamic sector in 2024, saw transformative changes. The CHIPS Act continued to have a profound impact, and while AMD solidified its position as a top player, Intel's decline was undeniable. But the real story of the year was the meteoric rise of NVIDIA, which ended the year as one of the world’s most valuable companies.

In this chaotic year of business, let's dive into the first-ever Bhatt Report Annual Business Awards, where we honor the standout companies and individuals of 2024.

Rising Business of the Year: Duolingo
Honorable Mentions: Buc-ees, Perplexity AI, Shiprocket

2024 was undoubtedly the year of Duolingo. With an unmatched marketing strategy that consistently hit the mark, Duolingo became more than just an app—it became a cultural phenomenon. From embracing viral trends like the brat summer movement to launching the wildly successful "Spanish or Vanish" dance challenge, Duolingo's clever marketing tactics put the brand front and center in the global conversation. By the end of the year, Duolingo had evolved from an emerging player to one of the most formidable forces in the business world.

Rising Business Person of the Year: Zaria Parvez

Zaria Parvez, the TikTok social media manager for Duolingo, is a driving force behind the company's viral success. Parvez helped transform Duolingo’s social media presence into a powerhouse, making waves with campaigns that captivated millions. Beyond her work with Duolingo, Parvez’s newsletter Make It Go Viral has become a must-read for marketers, offering unparalleled insight into the mechanics of viral content.

The Failing Business of the Year: Boeing
Honorable Mentions: HYBE, Intel, CrowdStrike, Ticketmaster

2024 was a disastrous year for Boeing. The company faced a series of unprecedented challenges, ranging from the culmination of a long-running strike to widespread operational problems. While the company managed to negotiate an end to the strike, its reputation took a severe hit. Boeing’s struggles were compounded by a broader industry-wide downturn, which saw it joining the ranks of other faltering giants like Intel and HYBE.

Businessperson of the Year: Jensen Huang
Honorable Mentions: Elon Musk, Antonio Neri, Satya Nadella, Lisa Su, Sam Altman

Jensen Huang’s name became synonymous with success in 2024. As the CEO of NVIDIA, Huang steered the company to unparalleled heights, making it the most talked-about and most valuable tech company in the world. His leadership during the rise of AI-powered technologies was nothing short of visionary, and by the end of the year, he had solidified his position as one of the most influential figures in corporate America. Huang’s remarkable success redefined what it means to be a tech leader in today's rapidly evolving landscape.

Business of the Year: NVIDIA
Honorable Mentions: AMD, Duolingo, Microsoft, Crumbl Cookies, Discord, OpenAI

2024 was, without a doubt, NVIDIA’s year. The company rode the AI wave to unprecedented success, becoming the highest-valued company in the world. With the rise of generative AI and the explosion of demand for GPUs, NVIDIA’s dominance in the semiconductor market has made it a cornerstone of the tech industry. The company’s meteoric rise was fueled by groundbreaking innovations and savvy business moves, positioning NVIDIA as a leader not just in hardware, but in shaping the future of artificial intelligence. By the close of the year, NVIDIA had transitioned from a rising star to one of the three highest market-cap companies globally.

For over two decades, the gaming industry has been shaped by three powerhouse companies: Sony, Nintendo, and Microsoft. While Nintendo remains the oldest player in the game, and Sony’s PlayStation consoles have solidified their legacy, Microsoft’s Xbox was once positioned to dominate the gaming market. Armed with vast financial resources, extensive tech expertise, and the muscle of its parent company, it seemed inevitable that Xbox would become the leading force in gaming—especially during the 7th generation of consoles (2006–2011), when PlayStation stumbled with the PS3 and Nintendo shifted to the casual gaming market with the Wii.

However, the path to dominance in gaming is rarely straightforward. In this article, we’ll take a look back at the history of Microsoft’s Xbox—now known as Microsoft Gaming—explore the leadership of Phil Spencer, and analyze the company’s future plans, while also examining the influences that have shaped them.

The Current State of the Gaming Market

If you’re over 40, you might be wondering why the gaming industry matters so much in the larger entertainment landscape. In terms of revenue, gaming has surpassed film and television to become the highest-grossing form of media in the world. In fact, it was one of the few industries to experience explosive growth during the COVID-19 pandemic. The biggest entertainment franchise of all time isn’t Star Wars or Marvel—it’s Pokémon. Gaming’s cultural and financial clout has never been more significant, and Microsoft Gaming is looking to capitalize on this.

Microsoft’s Entry into the Gaming Market

While Microsoft was not the first tech giant to enter the gaming world—Apple had made early strides—it was the first to make a serious, sustained effort to understand the gaming market. In 2001, Microsoft launched the original Xbox. Despite early challenges, including a difficult entry into a market already dominated by Sony’s PlayStation 2, the console gained traction, largely thanks to a killer app: Halo. As a flagship title, Halo established Xbox as the go-to platform for older teens and adult gamers, carving out a niche in the hardcore gaming market. By the time of the Xbox 360’s release in 2005, Microsoft had firmly secured its place as one of the “Big Three” console makers, helping to eliminate Sega from the race.

The Xbox 360: A Brief Moment of Dominance

The Xbox 360’s launch during the 7th generation of consoles marked a key moment for Microsoft. While Sony’s PlayStation 3 was riddled with issues—most notably a high launch price and confusing messaging—Xbox 360 had a smoother entry. Halo 3 and Gears of War solidified Xbox’s standing as a leading platform for serious gamers. Even though the Nintendo Wii outsold both consoles, Xbox 360 came in a solid second place, establishing Xbox as the mainstream console of choice.

However, things started to take a downturn when the Xbox 360’s Kinect motion-sensing peripheral failed to catch on in the way Microsoft hoped. Still, the platform had set a clear direction, and Xbox seemed poised to continue its dominance into the 8th generation.

The Xbox One and the Rise of PlayStation

The 8th generation of consoles (2013 and beyond) is often regarded as a cautionary tale for Microsoft. The Xbox One was announced with a series of controversial moves, such as requiring an always-on internet connection to function and implementing digital rights management (DRM) policies that alienated consumers. When Don Mattrick, then head of Xbox, suggested that gamers without internet access should stick to their old Xbox 360 consoles, it rubbed many the wrong way. Meanwhile, Sony learned from its mistakes with the PS3 and launched the PS4 with a consumer-friendly approach and a solid lineup of exclusive games. The result? The PS4 quickly overtook the Xbox One, and Microsoft found itself playing catch-up.

In parallel, Nintendo’s Wii U struggled while their more successful Nintendo Switch would eventually usher in a new era of hybrid gaming. For Xbox, this meant that despite the superior power of the Xbox One, PlayStation quickly became the console of choice for many gamers.

Microsoft Gaming's Shift Toward Software

As Microsoft’s hardware struggles continued, the company pivoted toward a new strategy: building up a robust portfolio of game studios and focusing on game software over hardware. The purchase of Mojang in 2014, and its hugely successful franchise Minecraft, was a key early move. Rather than lock Minecraft into being an Xbox or Windows exclusive, Microsoft made it available on virtually every platform. This strategy signaled a shift in philosophy for Xbox: Microsoft Gaming’s software could stand independently from the hardware, allowing the company to thrive regardless of how their console sales performed.

The Rise of Microsoft’s Game Studio Acquisitions

Building on this new approach, Microsoft made a series of strategic acquisitions, beginning with the purchase of ZeniMax Media in 2021, and followed by the bombshell acquisition of Activision Blizzard in 2023. This move brought major franchises like Call of Duty, World of Warcraft, Diablo, Overwatch, and Candy Crush under Microsoft’s umbrella. For gaming enthusiasts, this acquisition was a game-changer. It not only strengthened Microsoft’s game catalog but also signaled its ambition to dominate the gaming industry in new ways.

However, these acquisitions also came with challenges. Some major releases, such as Starfield, have not met fan expectations, while the closure of Arkane Austin Studios raised concerns about Microsoft’s ability to manage such large gaming properties effectively. Microsoft’s challenge now is to integrate these acquisitions seamlessly while continuing to evolve its brand identity.

The Future of Microsoft Gaming

Looking ahead, Microsoft Gaming faces a series of key hurdles in its path to dominance. First, the company must do a better job of integrating its various IPs. Right now, it’s hard for consumers to tell that franchises like Call of Duty, Minecraft, and Candy Crush all come from the same company. Effective brand cohesion is crucial if Microsoft wants to present itself as a unified force in gaming.

Second, Microsoft must shift its focus from the technological specifications of its consoles to the actual gaming experience. For years, Microsoft has been obsessed with specs—focusing on power and graphics rather than the gaming experience itself. While this appeals to certain segments of the market, it alienates a broader audience. Gamers care more about the games than the tech that powers them.

Finally, Microsoft must exercise patience. The gaming world moves at a slower pace than the rapid-fire tech sector, and short-term losses shouldn’t discourage long-term investments. Games like Starfield and Halo Infinite require time, updates, and support to reach their full potential. Rushing decisions, prematurely closing studios, or publicly declaring a failure too soon could do more harm than good.

Conclusion: A Giant in the Making?

Microsoft Gaming has undoubtedly made huge strides, especially with its recent acquisitions. The company has the resources, the IPs, and the leadership to become a major player in the gaming world for years to come. However, the road to success is not without its challenges. If Microsoft can integrate its acquisitions, focus on the gaming experience rather than the hardware, and exercise the patience needed to nurture its products and studios, there’s little doubt that it will continue to grow and solidify its position as one of the most influential companies in the gaming industry. The future of Microsoft Gaming is bright—but it will take time, strategy, and careful management to get there.

On October 15, 2024, I attended the Open Compute Project's 2024 Global Summit as a media member. The Open Compute Project is a global organization founded by Meta with the express aim of increasing open computing collaboration for various tech companies in data management and for data centers. The purpose of open computing is to make non-essential and generalized technologies available to all companies, thus advancing innovation and evolution. OCP has several annual events, the biggest of which is the Global Summit, a meeting of some of the world's largest tech corporations and a place where major technologies are announced.

The first day opened with some significant announcements. Semiconductor-centered LinkedIn could talk about little more than AMD and Intel's collaboration, notably on x86 and much more. It is interesting to note that the two companies have a history of partnerships, but the circumstances are quite different at this time. Intel is clearly the weaker partner, something that likely deserves its own article some time or other. Overall, Intel seemed to be taking its place as a lesser company within the semiconductor pantheon throughout the conference. Their attempts to showcase their new receivers were botched by shoddy Wi-Fi connection (they had really nice staff and engineers, however), and there was more than a little talk about Intel's last few years in the AMD section whenever I went near it.

Speaking of the Wi-Fi, it was clear that the event organizers were overwhelmed by relatively high attendance. Parking was practically impossible to find, and food lines stretched on for quite some time. There were clear efforts to sort everything through, but it was clear that the event resources were overwhelmed.

Another critical announcement of interest was Meta's new Catalina software. Created to train LLMs using NVIDIA GPUs, Catalina was the talk of the summit, with lengthy lines to check out its features.

During lunch, individuals with media passes got to participate in a Q&A with the leaders of OCP. The Q&A and session were managed by CIO Cliff Grossener and featured CEO George Tcharipan, CTO Bijan Norwoozi, CMO Dick Van Slyke, Senior Director of Community Michael Schill, and Steve Helvie, VP of emerging markets. The mood in their segment was optimistic, highlighting major announcements from AMD/Intel and Meta. As the panelists noted, while the event's official theme was "From Ideas to Impact," growth was a crucial idea in everyone's mind. Fresh technologies and the rise of AI were key to the optimism, and open interface was a tool for that.

An interesting ideology drives the open computing project. CEO George Tcharparian framed the goal of OCP as inherently capitalistic and that open computing would increase the efficiency of the market as a whole while allowing the best ideas to succeed without the struggles of start-up costs and scalability, described as "cooperative competition."

Part of the reason for this optimism is NVIDIA. In many ways, OCP this year was all about NVIDIA. The event organizers mentioned NVIDIA's importance, AMD and Intel's alliance was tied to Jensen Huang, Meta clearly mentioned NVIDIA GPUs were used in Catalina, and the convention floor was filled with "NVIDIA partner" and "NVIDIA compliant" signs. One could feel NVIDIA's palpable sense of awe for attendees and companies. With AI becoming the talk of the town when it came to the data revolution, it was obvious that NVIDIA would have a great week, but it is hard to overstate just how omnipresent NVIDIA was.

That is not to say that other companies were absent. Tech giants such as AMD, Samsung, Applied Materials, Meta, and Seagate showcased their latest open computing tools for data centers. Intel proudly displayed its new PMT, Samsung showed off a range of new products, Seagate showed off its powerful new hard drive Mozaic, and AMD showcased its new CHIPS alliance cryptography security system, Caliptra 2.0, which theoretically can stop quantum hacking.

With the tech industry always attempting to showcase new inventions and disruptions, innovation was a key focus of the event. One of the critical segments of the floor was the 'Innovation Village,' where companies showed off their latest inventions. Despite being a little crowded, it was nonetheless quite an interesting idea.

Throughout the entire summit, new ideas were on everyone's mind. Whispers and murmurs of new disruptive technologies were all over the place as AI became a topic of the present rather than the future. There were multiple presentations dedicated to liquid cooling, which stood as one of the hot new innovations in everyone's mind. Additionally, there was some bubbling excitement for breakthroughs in quantum computing, potentially making an impact within the coming years. All of this was wrapped up in AI, and future ideas (quantum computing) and previous conference ideas (sustainability) took a far second billing to the AI revolution in data centers.

Overall, the OCP 2024 Global Summit was quite an enjoyable conference. It was sometimes a little crowded, but the excitement was palpable, and there was legitimate optimism for the future. AI technology and NVIDIA dominated the discussion, and data centers seemed ready for another revolution. The Open Compute Project seemed ready to expand even further, entering a new chapter of existence. As the need for data analytics grows and the tools required become more complex, open computing will become much more common.

The last 10-20 years have perhaps been the most influential when it comes to marketing. The advent of the internet and all its subfields (social media, online video, blogs) has completely changed both the products and services sold, and the methods of making these sales. In today’s increasingly digital and globalized world, there are numerous ways to promote products and services, with varying degrees of success. There have been some utter disasters of publicity that we have covered here before in The Bhatt Report. Today, however, I want to highlight one company that has revolutionized online marketing in the post-COVID era: Duolingo.

Duolingo’s co-founder and first CEO, Luis Von Ahn, was already well-known as a crowdsourcing pioneer and a founder of ReCAPTCHA before founding the famous owl-themed company. He found a gap for a quick and easy language-learning App and thus created Duolingo.

Much can be said about Duolingo’s business model, but to simplify, it is more of a repeat-a-day social media than a traditional language software such as Rosetta Stone. As a result, maintaining users who consistently use the app is key to Duolingo’s success. Their marketing team is so aggressive for this purpose, and this is also where the app found its greatest marketing strength.

It is frequently said that attention is a currency on social media. While this principle is popular, it is also demonstrably false. Negative publicity can and has caused significant harm to several brands (just re-read my Watcher article if you have any doubts). At the same time, positive publicity does not necessarily mean being righteous but engaging within the same ideological sphere as your customers. Duolingo has a young customer base. Hence, their social media performance had to be designed to impress Millennials and Generation Z.

Thus, Duolingo built the basic steps for its brand identity, one that would soon master. They needed a brand identifier that could tie together all the disparate threads of their brand identity. Their marketing team found that with their instantly recognizable mascot owl, Duo. Compared to nearly every other brand mascot of the last ten years, Duo has a key, recognizable design and a personality that stands out (we will get into that later).

Rather than go in sequential order, I thought I would highlight some of its biggest PR moves to illuminate its strategy. Almost all of these involve Duo being cranky and aggressive in a humorous way to advertise Duolingo.

1. The App Logo: Duolingo has long sought to aggressively remind users to maintain their existing streaks. As a result, if you don’t continue your streak for several days, the app logo slowly morphs into a bizarre, unhealthy-looking version of Duo. While this change initially got an adverse reaction from app users, it certainly worked to keep users on the App and actually fit very well with Duo’s brand image as somewhat mischievous and aggressive, especially since the language sentences it is known for asking are also similar, 

2. As a result of these aggressive marketing tactics, memes were made about Duolingo’s practices. One of the most infamous ones was that Duolingo would ask you to learn “Spanish or vanish.” Most companies would react by attempting to censor this publicity, viewing it as negative to their brand. Instead, Duolingo made a musical with a song titled “Spanish or Vanish.” The English lyrics are relatively tame, pushing the listener to keep up their streak. But the Spanish lines have Duo threatening to murder and cannibalize the listener, encouraging them to learn Spanish just to fully fulfill the meme.

3. After the Brat trend peaked, Duolingo arranged for many of its social media staff to attend Charli XCX’s Brat tour dressed as Duo. This went viral instantly and tied Duolingo to Charli’s hit song “Talk Talk,” something that even Charli acknowledged.

On a micro level, these social media stunts might seem random, just another example of shock marketing. But from a macro perspective, with an understanding of Duolingo’s target audience of young people, a clear strategy emerges. Duolingo isn’t just taking every trend that rises and making memes out of them but aiming to make it clear that this brand is for young people, by young people.

This is accomplished not through trend chasing. Instead, Duolingo highlights ideas that mesh well with its branding. Each of their meme choices are fresh and eager for expansion, and all are handled with an 'I don’t give a damn' attitude and tons of style. Most notably, none of Duolingo’s promotions felt pushed by a marketing team from the top. Duolingo’s marketing team clearly understood the references and ideas they were poking fun of, even when they were attacking Duolingo itself.

The real reason for this is that Duolingo is keen to strengthen the talent behind its brand and marketing team. Duolingo’s marketing team is young, passionate, and very interested in the products they are selling and the style of the sale. Unsurprisingly, they excel, given that their hold on pop culture is stronger than almost any other media team globally.

If one is curious about the mindset that drives Duolingo’s social media marketing strategies, I highly recommend their global social media manager, Zaria Parvez’s newsletter, Make It Go Viral. It was an inspiration for me to start The Bhatt Report and is, in my opinion, crucial to anyone seeking to learn marketing and advertising. It covers topics such as creativity, authenticity, and much more.

Normally, I wrap things up with big business takeaways. But this time, the whole article has been one giant lesson. To sum it up: be passionate about what you do, know your audience, stay flexible with trends, and most importantly—don't be afraid to laugh at yourself along the way!

One of the key debates of the 2024 United States Presidential Election has been economic policy. The economy consistently rates as the top issue for voters in this election, and both Kamala Harris and Donald Trump have devoted much of their campaign’s messaging to economic and fiscal policy. In particular, tariffs have become a major point of contention. Harris’ supporters in the Democratic Party have alleged that Trump’s tariff would, in effect, be a 20% sales tax on consumers, while Trump’s Republican Party accuses Harris of selling out American workers for foreign companies. So where does the truth lie? As a student of finance, business, and economics, I thought I would provide my perspective on the question of tariffs in 2024.

Before I give my thoughts, I must provide some disclaimers. The first is that I am just an economics student. I will provide information to the best of my knowledge but know that I am simplifying things. The second is that, to oversimplify, there are two major schools of economics today, the Keynesian and the Neoclassical. The Keynesian School believes that government should be involved in the economy to protect the people, while the Neoclassical School believes that a free market is the best way to help the people. Both of these cases are with exceptions. Typically, the Republican Party borrows more from Neoclassical ideals and the Democrats more from Keynesian economics, but due to the interests of various voter coalitions and political needs, both parties preach a mix of both. Most notably, Trump has been more bullish on tariffs, while Harris, who is still quite supportive of them, is slightly more wary.

The question obviously arises: what exactly is a tariff? A tariff is a tax on importers or exporters on their goods. In the United States, most of our tariffs are protectionary, aiming to protect American manufacturing by taxing imports. Voters who work in American manufacturing are crucial to this election, making up the set of swing states called the Rust Belt, which have lost much of their importance in manufacturing to new markets, particularly China.

As a result, Trump has proposed increasing tariffs as one of his key plans for a potential second Trump term. Most notably, he has proposed a flat 20% tariff on all imports. Additionally, he has proposed 60% tariffs on imports from China and 100% tariffs (basically bans) on cars produced outside the United States, particularly in China.

Harris, on the other hand, has warned that such aggressive tariffs would likely raise prices for American consumers, as these costs would be passed on to them. She attacked Trump’s tariff policy as a “20% sales tax.” While she has indicated support for tariffs on China (a Trump-era policy continued by President Biden), she likely will not be nearly as aggressive as Trump when it comes to tariffs.

From an economic perspective, which of these two visions of tariffs is better for the United States? Since the rise of famed Neoclassical economists such as Milton Friedman and Thomas Sowell, free trade has been increasingly favored by economists. The reason for this is that if the demand for these goods is relatively inflexible, the costs would be passed onto the consumers. In other words, foreign corporations will pass on these new tariff costs into the products’ price, meaning that American consumers end up paying for them. While they may not offset the entire cost, they certainly would seek to offset as much as possible without minimizing their profits.

Additionally, foreign nations aiming to maintain their positions in international trade may place their own tariffs on American goods. This is what happened when the United States passed the Smoot-Hawley tariff in 1930 due to an economic crash, aiming to prop up American manufacturers. However, other nations placed reciprocal tariffs, crashing the global economy in what we now know as the Great Depression.

Previous American tariffs and trade restrictions have also caused economic crashes. The Embargo Act of 1807, for example, led to war with Great Britain, and the McKinley tariff has been mentioned as a potential cause of the devastating crash of 1893.

Supporters of tariffs, especially Trump’s tariff, argue that they would stimulate the American economy. Tariffs increase federal revenue, meaning that the federal government would have more funds to enact its policies. They also argue that tariffs would increase American jobs, as more consumers would buy American-made goods, thus stimulating the American economy. Since the role of the US government is to, first and foremost, protect its citizens, tariffs should make it easy for American manufacturers and employees.

Tariff supporters also argue that foreign companies often have advantages due to cheaper labor costs and government subsidies. Notably, China has laxer labor laws, meaning that Chinese companies pay much less for employment. Additionally, the Chinese government often provides heavy subsidies to their new industries to make them competitive. Most notably, these played into Chinese companies, such as BYD’s, advantage and rise within the electric car market.

So, what actually would be a good tariff policy? In my opinion, a good tariff policy is one that accomplishes a few critical goals.

1.       The first is to avoid harming the nation’s residents through a trade war.

2.       The second is to encourage the growth of domestic industry.

3.       The third is to avoid increasing the costs of the products for consumers.

4.       Finally, the fourth is to increase a nation’s ties to its strategic partners and position itself against its strategic rivals.

It is first important to note that most economies don’t stay in manufacturing forever. As they continue to develop, manufacturing economies tend to turn into service economies. That said, protecting manufacturing jobs is still important. But at the same time, we should not give American corporations unfair advantages, leading to them engaging in anticompetitive practices and weaker products made for US customers. At the same time, the unfair advantages foreign companies have should be neutralized.

For a tariff on foreign industrial goods, I would recommend conducting a comprehensive economic analysis that accounts for the advantages gained from government subsidies and lower wages in those countries.  These factors could be added together and applied as the basis for tariff imposition.  This approach will ensure that America’s trade partners do not gain an unfair advantage, while still holding American companies accountable to free market competition. It will also temper the rising costs American consumers will face.

Notably, tariffs should avoid attacking nations with which the United States is crucially allied and with which it engages in key partnerships. Free trade amongst nations with which the United States has strategic partnerships will ensure that the most efficient and cheapest products are available to consumers without providing unfair advantages to the United States’ competitors.

Ideally, a tariff policy should follow all four points mentioned above, but in reality, a mix that satisfies some of them should be more than satisfactory, especially when it comes to what the nation needs at any time.

Today's article differs slightly from what I have been doing for the past few weeks. Rather than analyze a current situation in the world of business, I am going to tell a story of one of the most influential businesses in history and how it rose to its peak. If you live in the western United States, you have undoubtedly heard of the Southern Pacific Railroad Company, which still exists as a subsidiary today. However, at one point, the Southern Pacific was one of the companies that controlled the western USA, and its history is both intriguing and educational.

In the 1860s, the Republican Party gained power through a few mandates. Winning the Civil War and opposing slavery were the primary ones, but they also sought to build a transcontinental railroad, one that would unite the new and prosperous Western states with the powerful Eastern ones. As a result, several grants were provided after the Civil War for companies to build railroad segments to span the United States.

In California, this call was initially taken up by engineer Theodore Judah. A long-time supporter of the idea of a transcontinental railroad, Judah sought investors and found them in four powerful early California elites. Leland Stanford, a pompous future governor of California and the founder of Stanford University. Collis Huntington, a local shopkeeper known for his drive and ambition. Mark Hopkins, the fiscal conservative who reigned in the rest of the group. And Charles Crocker, a well-connected man with ties to engineering and building communities.

The four investors, known theatrically as "The Associates" or "The Big Four," soon took over their new company, the Central Pacific Railroad, from Theodore Judah, who would pass away soon after. Leland Stanford stood as their president, and the one who effectively led their negotiations within California, Charles Crocker was in charge of the actual building of the railroad. Mark Hopkins was in charge of finances, and Collis Huntington pulled strings in Congress, often utilizing semi-legal loopholes to his advantage. Due to this, the Associates then quickly expanded their railroad lines, taking control over much of California.

Among their purchases, expansions, and aggressive corporate moves, one of their most important ones was purchasing Southern Pacific. For legal reasons, the Central Pacific was eventually merged into the Southern Pacific. For the sake of simplicity, I will refer to the company as the Southern Pacific from this time onwards.

The Southern Pacific railroad soon laid tracks all the way to Utah, becoming one of two companies dominating the American railroad industry and a giant of extraordinary power. As with any company of this size, the next step was to consolidate their rather incredible gains.

This segment was where significant legal challenges soon began. The Southern Pacific was able to make a case for its survival through a series of rather famous court cases. Two that I would like to highlight amongst several that can and have filled up entire books would be the Mussel Slough tragedy and the case of Santa Clara County vs. Southern Pacific Company. In Mussel Slough, in southern California, Southern Pacific got into a conflict with some settlers on land that they had claimed, resulting in an armed conflict and several deaths. While the Southern Pacific won the legal challenge, this irreparably damaged the company's reputation, one that it would never recover from.

Their most significant court case, Santa Clara County vs. Southern Pacific Railroad Company, changed the history of corporate America by defining the basic rights of a corporation, including some protections of the equal protection clause. This began the era of corporate personhood that led to the rise of modern-day corporate America.

These legal controversies did not hurt the Southern Pacific and its leaders in a legal sense. Still, they destroyed the reputation of the mighty railroad company, and they were viewed as cynical and greedy. Many literary legends, such as Frank Norris and Ambrose Bierce, viscously attacked the Southern Pacific, making the mighty railroad company enemy #1 in the minds of many Californians.

As if things were not tough enough already, the Associates began infighting right around this time. Leland Stanford and Collis Huntington always had a minor rivalry. But now that they felt they had no other business rivals, they publicly began feuding, ending with Huntington becoming their company's new president. At this point, the Associates were over, four wealthy businessmen who had seemingly built a large corporate empire, but now their era was over. The four would be rich, but their era of mutual dominance was over. It also didn't help that despite the four becoming wealthy beyond imagination, the Southern Pacific was bloated and fiscally in trouble, having relied on government support for its initial rise. The company slogged along till the middle of the 1900s when it was finally purchased by Union Pacific.

How This Relates to Today:

This is a rough summary of the early history of the Southern Pacific, and there are more than a few asterisks and technicalities that I grossed over. Nonetheless, I think the story of the rise and fall of the Southern Pacific bears a shocking amount of similarity to today's Silicon Valley tech entrepreneurs and major companies.

The Southern Pacific consolidated its power, dominating California's railroad line as a complete monopoly in the state. This resulted in arguably the first real wave of antitrust and antimonopoly legislation in the United States, culminating in legal challenges that Southern Pacific often won while facing crises when it came to PR. The same can be seen with modern tech companies, who are facing a revitalization of antitrust legislation (a story for another day) and seeing increased public controversies as a result.

Both the Southern Pacific and the companies of today aimed to control space. The Southern Pacific sought to purchase as much land as possible, helping dominate any sector, even those that were mildly related to its main objective of dominating the railroad industry. Similarly, today, many large tech companies seek influence over online spaces, competing with each other for these spaces.

Additionally and most critically, the Southern Pacific and today's tech companies completely disrupted the world as it existed. They brought to life new technologies that are omnipresent today, and their innovation brought them and the rest of the world into the modern age.

In the eyes of many outsiders and fans, the K-pop industry is best known for its colorful outfits, complex choreographies, and youth-oriented concepts. However, if one has spent any time analyzing the industry’s practices and history, one will find K-Pop agencies treating their boy bands and girl groups as assembly line products, crafting and pushing personalities on their stars meant to appeal to wide demographics willing to spend quite a lot of money, and contracts rather grimly known as “slave contracts,” with some stars and average employees of most major companies at least subtly hinting at their treatment.

As a result of this, K-pop agencies find themselves in a tricky balance between maintaining a vibe of casualness, spontaneity, creativity, and fan community (with the last oftentimes dedicated to an agency ‘family’ of artists), with the reality of crafting everything into a brew that satisfies all, oftentimes working through extremes to do so, pushing the principle of the invisible hand close to a breaking point.

This article is not on the moral questions that come up within the K-Pop industry but on how agencies handle this balance and how K-Pop’s biggest agency completely failed to maintain this balance in the public eye, leading to a rather impressive explosion of controversies.

HYBE:

You, the reader, may not have heard of HYBE, but you certainly have felt some of their impact in the music industry. Starting out as a K-pop agency, they blew up with their boy band BTS in 2015 and soon, through clever branding and some strong albums, came to dominate the music industry.

However, HYBE had to diversify its assets quicker than one might expect. Korea’s mandatory military service and the fickleness of the K-pop industry meant that HYBE needed to garner as many musical acts as quickly as possible to ensure they would not fail when BTS’ band members left for military service.

A rapid period of expansion followed as HYBE purchased as many former allies and competitors as quickly as possible. These included K-pop agencies, such as Pledis, Source, and Koz Entertainments, and foreign agencies, such as Scooter Braun’s Ithaca Holdings. These acquisitions added artists such as Seventeen, Gfriend, Justin Bieber, and Ariana Grande, as well as the rights to the original recordings of Taylor Swift’s albums, to the HYBE roster, even if a few of them stayed only for a while. Using this extra push, HYBE also acquired a lot of talent for behind-the-scenes planning and production, most notably Min Hee-Jin, from their rival, SM Entertainment. She would prove important later on.

They also sought to debut as many new acts as possible, including Tomorrow X Together, Le Sserafim, Enhypen, and of course, NewJeans, who blew up and largely became one of Korea’s most popular groups. Of course, this was all just in time, as BTS’ military hiatus meant all these new efforts needed to pay off soon enough.

The Controversies Begin:

Despite being the biggest K-Pop agency, HYBE was considered the newest and least reputed of the “big 4”, of which the most reputed was SM Entertainment. As a result, when SM entered a civil war in February 2023, HYBE saw an opportunity to expand even further, collaborating with former CEO and company founder Lee Soo-Man to attempt to do a hostile takeover of the old company. Its new leaders chose to ally themselves with conglomerate Kakao, starting a messy and public bidding war between these two giants. In the end, Kakao won, even with some legal controversy. However, the public mudslinging between these two conglomerates and the rise of anti-corporate anger in South Korea made both companies seem greedy and out of touch.

However, HYBE faced a deluge of controversies earlier this year, most notably a split with Min Hee-Jin. The famed K-Pop director was the partial owner of a subsidiary, Ador, which managed the most successful of HYBE’s post-BTS groups, NewJeans. In April 2024, HYBE announced an audit of Ador due to rumors that Min Hee-Jin was trying to break it away from HYBE. Min Hee-Jin announced that she did indeed intend to split the company from HYBE. She stated this was due to HYBE ignoring NewJeans’ creation by diverting trainees to another subsidiary and debuting a new girl group called ILLIT, which Min Hee-Jin accused of plagiarizing both the concept and styling from NewJeans.

This should have been a quick and easy legal and PR victory for HYBE. Min Hee-Jin was already immensely unpopular due to allegations of sexualizing minors (including the members of NewJeans), and allegations of workplace abuse under her leadership. HYBE also had a largely friendly media presence on their side, and loads of fans were willing to back their every move. However, as evidenced throughout the rest of the article, they soon bumbled the PR bag quite miserably.

The Ador PR Disaster

Rather than attacking Min Hee-Jin, a company lead, they chose to make personal attacks on Min Hee-Jin, alleging she used a shaman (a spiritual medium) to make corporate decisions and that she was a corrupt leader.

Later that month, however, Min Hee-Jin released a press conference where she went on an emotional tirade against HYBE. Compared to the prim and proper PR statements that dot the K-Pop landscape, this messy and personal conference should have backfired (her lawyers most definitely panicked on stage because of it), but somehow won her appreciation within the public’s eye. Rather than the battle being between two corporate giants, HYBE vs. Min Hee-Jin now became a woman against a broken system in the eyes of many. Her conference rant was turned into an online meme, and she began to garner support.

Here is where a clever PR team would dial down the personal attacks by associated actors to keep their attacks straight on Min Hee-Jin and try their best not to involve other groups and artists in this mess.

So naturally, Belift Lab (the subsidiary that was accused of copying NewJeans) released a 27-minute long video on their official channel basically talking about how every group draws inspiration from others and how, despite that, their group ILLIT was quite unique. From a PR perspective, this video was a disaster, dragging in other popular groups like Blackpink into this rather impressive mess. Later, it was found that some evidence was photoshopped. Combined with ill-timed texts revealing that HYBE’s founder Bang Si-Hyuk told Min Hee-Jin to crush a rival K-Pop group, Aespa, and HYBE was losing the PR battle.

Additionally, members of NewJeans and their parents sided with Min Hee-Jin, making HYBE seem greedy. Additionally, HYBE rushed out a PR statement for a BTS member’s DUI and ended up apologizing for misinformation. Additionally, they found Bang Si-Hyuk was caught with several young female streamers in LA, and then came up with a bizarre strategy that he was just being a friendly tour guide for a coincidental meeting (denied by some of the streamers), when a “no comment” would have likely done less harm to the brand.

Where we are now:

After many legal challenges, Min Hee-Jin was removed from the CEO position at Ador but is still with the company. Given HYBE’s size, it's likely they will escape from these controversies mostly unscathed legally, but they have dealt a massive blow to their public image, which had helped differentiate them from their competition. How this plays out in the future is unknown, but there are several lessons the music industry giant should learn from this. Plan your PR statements ahead of time and carefully, don’t try to drag in information beyond the scope of the issues, and don’t try to play the perfect victim when you clearly aren’t.  There is still an opportunity for HYBE to succeed in the public’s eye partially.

I was recently reviewing several companies for a year-end feature I may or may not end up publishing, and I sought to find which companies had the best 2024 and which ones had the worst. There were a few to consider for both, and one was most definitely in the lead for the worst: Boeing. As a result, I decided to dedicate a paragraph this week to how one of the airline and military industry giants has been hurt the way it was.

However, the more I researched for this article, the more I found out about the issues that plagued Boeing, and the longer this article ended up taking to write. I took an extra day to iron out my thoughts (with the excuse of yesterday being Labor Day), and hopefully, the end result is worth reading.

Boeing Disasters

Boeing is no stranger to airline controversies. For anyone who remembers the ancient days of 2018 and 2019 (already five and six years ago somehow), its brand new 737 Max’s crashed twice, killing all 346 people on board. This was not the first major Boeing disaster of the modern age, and it wasn’t the last.

In 2024, Boeing went through enough controversies to make an entire book out of them. Perhaps the most notable, however, was when the door panel for a 737 Max ejected midflight. Additionally, a whistleblower claimed that the fuselages of the 777 and 787 were improperly manufactured. Additionally, the death of a few prominent whistleblowers, most notably John Barnett, definitely cast a suspicious eye on Boeing.

The cherry on top was Boeing’s Starliner, which was deemed to be risky in returning astronauts to Earth, and NASA chose instead to work with SpaceX for their return to Earth. Additionally, the American government is investigating Boeing for not following proper safety standards when developing its airplanes, and reports suggest that company morale is at all-time lows; Boeing is definitely in a bit of a pickle right now.

It was not a short road to get here, but Boeing’s corporate management has made several bad decisions over the decades to get them to this point, and all of it started with a bad acquisition in 1997.

Harry Stonecipher

In the early ‘90s, Boeing was based in Seattle and quite a different company from the Boeing of today. Notably, they were known for a culture of engineering first and were (ironically) known for their rigid compliance with FAA standards, something that made them quite legendary within the aviation and military industries. While they did use well-audited sub-contractors, they assembled their major parts internally, building them with strong standards.

In 1997, they purchased and merged with McDonnell Douglas, a Midwest aerospace giant. McDonnell Douglas formed itself through a merger of two World War 2-era giants, McDonnell Aircraft and Douglas Aircraft Company.  It frequently worked on government contracts and military aviation projects, the reason why Boeing sought to purchase the firm.  McDonnell Douglas was not the best reputed for its commercial aviation business.

By most accounts, what followed afterward seems to be a clash of cultures. McDonnell Douglas often chose to subcontract a lot of their work for parts. Additionally, their then-CEO, Harry Stonecipher, was known for his profit-oriented moves. These cultures clashed, and it seemed McDonnell Douglas’ side won, ending symbolically with Boeing moving its HQ to Chicago, much closer to the Midwest heartland of McDonnell than the Pacific Northwest of Boeing. 

Harry Stonecipher became the CEO of the new Boeing within about half a decade. Whether positive or negative, Stonecipher remains one of the most influential CEOs in Boeing’s modern history. Stonecipher was chosen as he was viewed as a more stable and ambitious option after the public controversies of Phil Condit, his predecessor. In order to make Boeing recover and remain competitive against Airbus and other rivals, he pushed strongly for the new 787 Dreamliner to be built using subcontracted parts.  Boeing allowed these sub-contractors to audit and use further sub-contractors.  The short-term results of this action helped pull Boeing out of their downward spiral and even made them quite valuable in the eyes of shareholders and investors.

Additionally, he began to place more and more McDonnell Douglas employees in high-level Boeing positions, especially (and crucially) in the financial team. He also adopted cost-cutting policies, often directing such wrath to Boeing’s engineers, starting a semi-public feud between some of Boeing’s top management and its engineers that greatly dampened Boeing’s success in the long term.

Stonecipher ended up retiring in 2005 after it was discovered that he had inappropriate relations with a Boeing employee (which ended up causing a divorce with his wife since 1955), but the profit-first mindset and cost-cutting measures that he put into place continued with his successor Jim McNerney.  McNerney took this to new heights and focused a lot on Share buybacks to boost investor returns.  With money that needed to be used for ensuring quality of the planes that Boeing Built.

The 737 Max

In order to be competitive with Airbus’ A320 neo, Airbus announced the 737 Max.  Boeing marketed the plane to be very similar to their 737.  They pushed for pilots not to need to be certified for the 737 Max.  But in fact, the 737 Max had a new system called the MCAS (Maneuvering Characteristics Augmentation System), which should have required additional training. The MCAS is an automated system that controls the plane's elevator and adjusts the angle of attack because of the forward and higher placement of the new, bigger engines.  The MCAS sometimes worked erroneously when there were issues with the angle of attack sensor.  Pilots were unaware of how to handle the plane when the MCAS malfunctioned. Two airline crashes were caused by it that cost the lives of 346 innocent people.

Boeing’s corporate management should have learned the lesson from the 737 Max tragedies but did not. Reports suggest it continued its shoddy cost-cutting measures and seems to have used unaudited sub-contractors, and its lengthy list of 2024 controversies shows that, with a potential strike of 32,000 workers only adding to their woes.

The Future

Thankfully, there are some signs that Boeing may move in a positive direction. Their incoming CEO, Kelly Ortberg, has chosen to base the company in Seattle, their pre-McDonnell Douglas HQ, and has recently met with the chief of the FAA. Then again, such positive signs are meaningless gestures until Boeing actually puts in the work to fix the problems.  Steps need to be taken to build a work environment where innovation and quality take the driver’s seat.  The long-term security of its workers and customers needs to be taken seriously. If it does this, I have no doubt they can hold onto their position as one of the leaders in the aerospace industry. 

The company has focused on short-term profits over the past two decades, which has led to its current long-term challenges.  And it is behind us. As Warren Buffett once said, "In the business world, the rearview mirror is always clearer than the windshield." Despite these challenges, let's hope that Boeing is committed to learning from the past and will work to build a better future.

Earlier this year, Alphabet announced record-breaking earnings, yet their stock still took a hit. The reason for this conundrum was their expected profit for YouTube was not achieved. This was largely due to YouTube shorts underperforming. Despite the market leaving a massive opening for YouTube to grab, its Shorts content has failed both with YouTube fans and within the general market. One question that lies in the mind of many investors is: How and when did this happen? The answer is mishandling goals in 2021, when YouTube Shorts was released.

A Look at the Opportunity

Earlier this year, President Biden and the United States Congress passed a bill that mandated that short-form content giant TikTok either be sold to American investors within a year or face a ban in the United States. TikTok is the undisputed leader in the short-form content war, easily well ahead of its two main competitors, Alphabet’s YouTube Shorts and Meta’s Instagram Reels, to the point that these two apps largely competed for a distant second place.

This is not the first national ban from a crucial market for TikTok. Back in 2021, India banned TikTok, which didn’t change ByteDance’s (TikTok’s owners) market strength one bit. By analyzing what happened in India back in 2021, we can predict what could end up happening in the United States within the coming year should the bill not be reversed.

What Happened

After an initial tussle, the Indian market stuck with Instagram Reels. Previously, both apps were the target of mockery from the youth. Reels was seen as the strongest competitor to take over the TikTok market gap when push came to shove. Partially, this was due to the fact that Reels’ algorithm seemed to more easily adapt to the Indian market, but it also was due to a critical error that guaranteed to sink YouTube Shorts from its very inception; its ties to the YouTube Algorithm.

The YouTube Algorithm

There are two algorithms that everyone who works with internet content should know and understand: Google and its search engine optimization and YouTube’s algorithm. Of the two, YouTube’s algorithm is considered more nebulous. Entire channels and methods have been created to understand the ever-shifting winds of the YouTube algorithm, a mysterious force that can give millions and take everything away at any given instance. While its exact method is unknown and ever-shifting, the YouTube algorithm seems to have prioritized watch-time for the better half of a decade. This switch practically killed certain types of YouTube videos and revitalized others. Subscriptions were considered vital, and the watch-time was for channels rather than for individual videos.

This was the system that YouTube Shorts was added to. Adding YouTube Shorts to the main YouTube seemed like a no-brainer decision. You have the most popular video platform in the world, and adding your short content to it just seemed like common sense. After all, integrating Reels with Instagram was crucial to Reels’ quick explosion. As a result, YouTube added an extra element to the algorithm, using YouTube Shorts. In fact, a minimum amount of shorts was now required prior to channel monetization, in addition to viewer retention and channel watch-time.

The issue was this pulled YouTube channels in two directions. To maintain a high channel watch-time, the average YouTube video’s length had increased to the point that multi-hour video essays became commonplace. Last December, Hbomberguy’s 4-hour essay on YouTube plagiarism set the platform alight, becoming a massive hit unlike many other videos and opening the doors for other long video essays, such as Jenny Nicholson’s equally long essay on Disneyland’s Star Wars hotel.

Additionally, since viewer retention was critical, channels became incentivized to space out uploads, maintaining a delicate balance between the number of videos and how frequently they are uploaded. Most channels had stuck into a manageable video length of 20-50 minutes to retain viewers across multiple videos.

Now, throw a requirement for short-form videos into this mix and push them hard, and you have a recipe for disaster. Channels had to find new viewers and subscribers through short-form videos, convince them to subscribe to their main channel, and somehow convert these short-form viewers into long-form viewers, and retain them. This process could frankly be described as convoluted and not very intuitive. It was (rightfully) parodied by YouTube channel ‘Man Carrying Thing’ as seen below.

In contrast, Instagram Reels and TikTok don’t have long-form videos on their platform. As a result, this integration problem is pretty much exclusive to YouTube, and it struggles to maintain a stable, short-format platform. This doesn’t mean there hasn’t been any success for YouTube Shorts – a few channels have made successful careers based on short-formed videos, but the Shorts features are still not well-received within the YouTube community. When YouTube tried to change its platform layout earlier this year to push its ‘Shorts’ content further, the fierce and sudden backlash forced the mega platform to back off.

What Are YouTube’s Chances?

This is definitely not a glowing review of YouTube Shorts’ potential for success, but despite the article’s title, I think YouTube still has a chance to win this short-format war. They have an existing audience that they have to avoid angering. Still, suppose they put a well-placed dividing line in the sand between short-form creators and long-form content creators (possibly with a better-developed algorithm and avoiding the pitfall of forcing creators to make both forms of content to survive on the platform). In that case, they actually garner an advantage over TikTok and Reels. For starters, YouTube’s algorithm system is considered one of the best in the world, and their brand recognition is still one of the best in the world, perhaps a little too good for success as a short platform, but that is a story for another day. For now, all they have to do is stop conflating all content as the same and forcing long-form content creators to make short-form videos, something that will prevent the natural growth of any platform. Do that, and success is within YouTube’s grasp.  Hey, YouTube, if you use my suggestions, DM me to talk business!!

If you are a millennial or Gen Z, a parent of one, a music fan, or someone who is just into the current popular zeitgeist, you have almost certainly heard of Charli XCX’s mega-hit album brat. Its chartreuse album cover became instantly iconic, becoming tied to Kamala Harris’ election campaign, and was coopted by several brands. The album became a youth symbol in 2024 and provided chart and viral hits to Charli, an artist who hadn’t had success since her career’s actual start ten years ago. How did brat become such a hit, and what can the business and marketing world learn from it?

To be fair, I think this article might give “b2b (pun intended) lessons from engagement” vibes, but I genuinely feel that marketing and business students can learn so much from what is easily this year’s best marketing campaign. As a result, let’s start with this right now.

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• Make a Good Product: This may seem obvious at first, but a good product is the first step to succeeding in any endeavor. Many bigger artists released albums this year, but none of them were as consistent in the quality of songs as brat’s tracks. Obviously, music is subjective, but Brat seems to have garnered praise from everyone: the critics, fans, fellow artists, and me. The brat marketing campaign was great; however, I doubt it would have become a cultural touchstone the way it did had the quality of the album been weak.

• Simple Visual Designs are often the most memorable: Part of brat’s appeal is the lime green cover with the simple sans text, which is distinct from every other album cover in the market yet simple enough to be shared and go viral. While the music might be why people stayed, what garnered the attention of many people in the first place was the album cover. This allowed the cover to be meme-d and copied by everyone on this planet, including by Kamala Harris’ election campaign. Speaking of which…

• Attaching yourself to something bigger: brat was already a smashing success by late July, having garnered the sort of acclaim and success that made it Charli’s most successful record in years. However, her shout-out to Kamala Harris and Harris’ subsequent adoption of brat as a theme of her campaign was what helped daytime talk show hosts and Gen X-ers discover the album. In a way, the Kamala-Charli crossover was not nearly as weird as it might seem. Charli had a viral album that could grow bigger when attached to arguably the most important event of the year (at least in the Western world), and Kamala was starting up a new campaign and was desperately seeking to regain some youth appeal after President Biden’s declining approval ratings amongst Gen Z. There is a lot of benefits in such mutual symbiosis.

• Constantly remix and reinvent your product: brat, despite being an album, is frankly more than just the fifteen songs on the album. Charli followed it up by releasing a bonus version featuring three new songs. Additionally, she has provided remixes for many of brat’s songs, four so far. These remixes served not only as (oftentimes) better versions of the base songs but also made sure brat’s songs stayed within the zeitgeist. brat is still very much an updating and evolving album three months after release. If we merge the last two points, we get…

• Collaborate with other talent that fits with your brand identity: Nearly all of Charli’s brat collabs have featured other young and relevant artists. Billie Eilish, Addison Rae, A.G. Cook, and more feature on the remixes; many of them seek to join in on the phenomenon that is brat summer and also, in the process, attach their existing fandoms to the brat brand identity.

Okay, those were some basics; now let’s explore some more mindset-oriented lessons we can learn from the brat.

• Build together, don’t tear apart: One of the best songs from brat was “Girl, So Confusing,” a song about Charli being on bad terms with a female pop star she was once friends with. Eventually, this was confirmed to be fellow 2010’s pop icon Lorde. The two artists now collaborated in a remix where Lorde explained her point of view before the two reconciled.  Despite this possibly being partially played up for the camera, it is true that Charli and Lorde had not been seen together for quite a while before this song and that they have been seen together quite a lot after the “Girl, So Confusing” remix.  This was a genuine and excellent Marketing collaboration.  Apparently, Charli suggested “working it out on the remix” after she released brat. It is important to remember that prior to brat, the biggest musical event of the year was former collaborators Kendrick Lamar and Drake going at each other in several diss tracks. Charli’s focus on reconciliation was not only loved by audiences, but it also seems to have brought her back on speaking terms with former friends and musical allies, such as Marina.

• Grow big, but don’t forget your core audience: For my first article of The Bhatt Report, I talked about how the YouTube channel Watcher abandoned its core audience, causing the channel’s growth to fizzle out. brat may have been Charli’s big breakthrough, but she didn’t forget her core audience. Since 2016, Charli has been tied to a primarily online genre called hyperpop and its main label, PC Music. While Charli has two albums aimed at larger audiences, Crash and brat, both still had tracks designed specifically for hyperpop audiences in mind and made with her old hyperpop collaborators.

• Grow with your team: Even as she has become more famous, Charli has stuck to her producers since 2016, especially A.G. Cook and The Dare (in addition to the late Sophie). Charli picked up her producers back when they were new based on their skills, and she stuck with them even as their careers grew. By this point, they are a reputed team of electronic legends. Rather than trying to change her sound or switch up her team as mainstream success seemed close, she chose to stick with her original team, and you can hear their synergy. Particularly between Charli and A.G.

• Take your moment to shine: Everything had to go right for Charli to have so much success with brat. Her appearance in the Barbie soundtrack, the mild hit of Crash, the fact she was just outside the mainstream but had a dedicated fanbase. She took these opportunities, and made what could likely be a career-defining moment out of them. This is a reminder, take your opportunities and do your best with them.

Also, enjoy hearing good pop albums.

Growing up in Silicon Valley, there are a few local parables and stories you are told from an early age. We are taught about bootstrapping through the tale of Hewlett and Packard in a garage, of the dangers of autocracy through Microsoft's battle with government regulatory bodies (sigh…), of Sam Brannan selling the shovels to gold miners, and of morality through Google's "Do No Evil" slogan. Amongst all our parables, however, arguably the most common is our one on hubris, our modern tale of Icarus, the Dot-Com Bubble's Crash in 2000.

For those who haven't heard of this crash, the late '90s saw a boom in online companies as the internet's potential was evident for the first time. This growth led to a point where the market was untenably high, and the following market crash completely destroyed Silicon Valley. If the tech world was to be divided into eras, the Dot-Com Bubble Crash is the thing that splits them. It should be our tale of Icarus, a warning of caution and overly investing in a new technology yet to be proven. The Valley still jumps first at any given moment to try something new. This may have led to Amazon and Apple's iPhone, but this also led to innumerable Theranos or NFT-type false promises. Investors have chosen to hold, believing every technology can have its best products emerge from crashes.

Where artificial intelligence fits into the Valley's chart of failures and successes is still unknown. While the world has had mixed reactions to AI, from full-blown Luddite panics to acting as a quick-and-easy replacement for actual research, the Valley has completely jumped headfirst into it. From Microsoft's strategic partnership with OpenAI to Meta's high investment in the technology and Google's… experiments with Gemini, any tech company you know has tried to invest in AI.

The initial result was a rather fantastic stock market rebound. The market surged like the Salesforce tower over the San Francisco skyline. Companies rose to remarkable highs simply on the fact that their products had strong ties to AI. Most notably, NVIDIA, whose GPUs were used in AI development and usage (a story for another day), rose to become the most valued company in the world for a bit, over 3 trillion dollars (MY. DEAR. GOD.). If the AI bubble ever had a peak, it was a few weeks ago when the bubble seemed unbreakable.

However, the last week has been hard on the stock market. CrowdStrike's crash caused about a billion dollars in losses and was the first to alight investors' fears. This was followed by disappointing earnings reports from Alphabet (despite reaching rather high profits, a story for another time, once again). Finally, selling-offs in the Nikkei market further plummeted the US market. All these incidents (probably more by the time this article is published) saw massive drops in AI stocks in particular, with NVIDIA itself dropping down to being the third largest market cap quite quickly.

This has made investors and the market paranoid about AI. As AI is still new and volatile, every single tremor in the market hurts AI more than anything else. Rumors have swelled: When is the AI crash coming? Is an AI crash coming? Has it already started? And if not, what will cause it? Will AI be able to recover, and if so, what will the long-term damage be?

Let us first get one fact out of the way: AI's rise or fall has nothing to do with its quality or how it is utilized but everything to do with its profitability. One of the main reasons for AI's vulnerability in the market right now is the struggle to profit from AI. Microsoft recently announced they expect their endeavors in AI to turn a profit in fifteen years. Despite all the hype, AI has failed to make a profit in a way that many investors expected. It also doesn't help that the costs to develop and sustain AI are incredibly high. Who can forget Sam Altman seeking $7 trillion for a new AI chip?

The matter of fact is that AI might be the most hyped-up technology in modern history, probably since the Dot-Com bubble itself. Companies such as OpenAI, NVIDIA, and Alphabet have hedged their bets on AI, investing more than most companies and individuals earn in their entire existence just to promote AI on their main products (as anyone who has tried to use the Google search engine over the past few months can attest to). They have promised treasures and earnings more than imaginable and, if we are fully honest, possible.

When these companies started tempering expectations, tremors started shaking throughout the stock market, which was only pushed up due to solid jobs data. Nonetheless, an undercurrent in every investor's mind still exists: What about the AI crash?

Is an AI Crash Coming?

Eventually, I believe AI will face a reckoning, but I don't think that will happen today. The market is good at ignoring things that should worry it as long as possible, and AI should be no different. In my personal opinion, it would take something significant for investors to be a lot more bearish on AI. This may or may not be:

• A major tech company announces they will scale back their AI operations.

• A prominent AI startup shuts down or declares bankruptcy.

• The government places new restrictions on AI data farming.

Mind you, this may still not be the end of AI, but it will be a significant reckoning. It will differentiate the snake oil charlatans and those who have a real product to sell. It also may take down some decent companies with good ideas and no direct plans for revenue for the time being.

In my opinion, the most likely results of such a crash are as follows.

• The entire market crashes, somewhat like the Dot-Com crash.

• Major tech companies take a beating, but most should survive unscathed in the long term.

• Many AI tech startups close down, and we get a brief window where the AI market is democratized, and anyone who actually knows how to make a profit can rise quickly.

• The biggest question that I cannot predict yet is NVIDIA. With clever management and a little diversification, I think NVIDIA can survive; whether they do that or not, however, is anyone's guess.

Of course, these are just my opinions of what is the most likely result of the constant growth of the AI market. AI's crash could kill the technology rather than curb the bad apples. Or, the AI crash could never happen, and AI continues to grow. Either way, a clever investor should keep their eyes open on AI for the foreseeable future.

Late last year, FASB, the governing body of accounting standards in the United States, finally added some rules to allow companies to account for cryptocurrencies as company assets. For supporters of Bitcoin and other cryptocurrencies, this was seemingly a massive win. From this point forward, crypto legally can be counted as an investment for companies, meaning more companies would be willing to get some Bitcoin or Ethereum, knowing it would still show up on their balance sheet. However, read through the actual terms of the FASB standards, and cryptocurrencies are defined as intangible assets – such as goodwill, rather than as alternate currencies, which they seek to be recognized as. Which type of asset should crypto be treated as is a question that one should not take lightly, and in this article, I seek to provide my perspective as both a business and an accounting student, on what crypto actually is, in a view-counterview format.

Crypto is a Currency:

Some things really aren’t as deep as financial analysts or market pundits would have you believe. As per Wikipedia, “A cryptocurrency… is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on a central authority.” Simply put, cryptocurrencies are new currencies, they are meant, and are often used, as currencies, and this has been the case since their inception. On the internet and the dark web, Bitcoin and Ethereum are the default currencies, used for transactions both legal and illegal. Even beyond this, cryptocurrencies are beginning to gain widespread acceptance within the mainstream. In fact, Bitcoin is even considered legal tender in the nation of El Salvador, making it a legal, international currency. The only reason Bitcoin is not considered a currency by some is because economic conservatives are afraid to consider online-heavy currencies.

Critics of cryptocurrency often point out its volatility as a reason why it should not be a currency. This argument would make sense if we did not count volatile currencies as currencies. From the previous Zimbabwean dollar to the Argentinian Peso, volatile currencies are still currencies, and this fact is unlikely to generate any controversy. So why not a much more widely used currency that is officially recognized and growing in popularity?

Additionally, cryptocurrencies are hardly a traditional intangible asset, deriving their value not through any intrinsic worth, but for what they are valued at when traded. If it functions as a currency, is traded as a currency, is called a currency, and acts like a currency, it probably is a currency.

Crypto is a Typical Intangible Asset:

Just because I call myself an emperor doesn’t mean that I get treated as one. The same goes for crypto as well. The base standards for any wannabe currency to be acknowledged is that it must be standardized and widely accepted. Cryptocurrencies are hardly standardized. Sure, Bitcoin and Ethereum may be widely accepted (and that too, only within online crypto spaces), but beyond that, we see a million joke currencies that hardly have any credibility, standardization, and any serious acceptance. Imagine treating Dogecoin the same way you treat the Euro?

When it comes to the acceptance of crypto, the only place where they are often treated as a normal currency is within online circles, especially with illegal transactions. Who wants the Silk Road drug empire’s currency to now be treated officially? While El Salvador does acknowledge Bitcoin as a currency (and only Bitcoin, not crypto as a whole), it is not the main currency of El Salvador, and even if it was, that is only one nation of many.

The concept behind crypto is intriguing, but its very nature means it can never be taken in whole as a type of currency. Being decentralized means that there will always be many tokens floating around, some legitimate and accepted while others simply are scams from wannabe grifters. Even if some crypto coins are legitimate currencies following the aforementioned rules, their pathway to legal tender would have to be the exception, rather than the rule.

Finally, while standardized currencies may fluctuate, they are considered currencies because they are backed by (mostly) trusted institutions, typically governments. Without this backing, cryptocurrencies function exactly as intangibles, having no value except their assumed inherent value.

Where I Stand On This:

Personally, I am not much of a cryptoskeptic, and I find cryptocurrencies one of the most intriguing disruptive technologies in the world at the moment. However, I personally believe that there is much more work to be done in terms of standardization and acceptance before crypto can be considered a form of currency, if it is possible at all. Nonetheless, I am glad that cryptocurrencies are at least recognized by the FASB, as this provides some of the institutional legitimacy that crypto has so long struggled with.

I will leave you all with an interesting note, the FASB standards particularly state that for crypto to be recorded, it has to be fungible, likely to avoid companies from putting all their assets in NFTs! Oh well, NFTs are a story for another time. For now, I hope this article helped you when it came to providing a perspective on the current financial state of cryptocurrency acceptance within America’s financial standards.

Individuals waiting in line as the CrowdStrike shut down their planned flights. This actually happened to my uncle and aunt.

A Bit of Backstory

CrowdStrike is no stranger to the security industry. Founded in 2011, the company has been central to several crucial cybersecurity incidents over the past decade. Just three years after its beginning, it helped the United States government uncover and stop the activities of Russian and Chinese hacker groups and helped uncover North Korea's ties to the Sony hacks in 2014.

Their most prominent moment (prior to last week, of course), however, was their investigation into the 2016 Democratic National Convention hack. They were the company that made the now-famous announcement accusing Russia of involvement in the DNC hacks. This eventually led to then-President Donald Trump suggesting to Ukrainian President Zelenskyy to investigate CrowdStrike and then-presidential candidate (and current President) Joe Biden's son, Hunter Biden, in the infamous call that led to his first impeachment.

All of this is to say that CrowdStrike was quite prominent even before the strike, eventually becoming the lead security software provider for most operating systems, including Windows, Linux, and MacOS, used by nearly all major tech companies.

The Crash

On the 19th of July, 2024, CrowdStrike released a new software update for their Falcon security platform, one for each operating system they were utilized for. Unfortunately, their systems update had a crucial fault that would cripple Windows systems that used it. It is not that there were no warning signs, with several updates earlier in the year crashing specific Linux application kernels (kernels are effectively the translator between computer codes and the actual inner workings of the OS, in non-computer science speak). However, since these crashes hurt only specific Linux communities, CrowdStrike seems to have not paid much attention to them.

For the July crash, however, a dangerous bug directly caused the Windows kernel to shut down. As per CrowdStrike's preliminary reports (their official findings have yet to be unveiled), this was caused by a simple bug in their rapid response security measure. The bug caused a logic error to channel file C-00000291.sys, causing Windows systems using the Falcon platform to crash into the blue screen of death.

Why did this bug not affect Macs? It dates back to EU regulations that demanded Microsoft make their Windows OS kernel accessible for public use to avoid Microsoft monopolizing Windows software.

The crash instantly paralyzed the world. Since Windows is the world's most used OS system, nearly every company that used Windows (with CrowdStrike's security system) was completely shut down.  In particular, Airlines and banking systems were crippled, leading to our fragile, interconnected, global economic and cultural system witnessing a minor incidence of systems collapse.

As CrowdStrike worked on finding a fix, a simple solution was found: simply entering a PC in safe mode and deleting the corrupted file. Unfortunately, the largest companies, those most affected by the bug, do not allow employees to enter safe mode unless required. The end result is that IT departments (already shorthanded in several companies due to layoffs) faced a surge of pressure that was incredibly difficult to manage.

Eventually, most companies came online, but the ensuing scare ensured that only slightly positive shareholder earnings announced by major companies soon afterward were enough to keep the economy in a tailspin. The estimated loss in productivity was nearly a billion dollars, not to mention many individuals who were delayed from meeting loved ones due to delayed flights, and customer service struggled in the aftermath of the crash. This was a mess; what can we learn from it?

Lessons From a Multi-Part Disaster:

Unlike my Watcher article, which only taught us lessons from a PR perspective, you can learn some practical advice regardless of your career from the CrowdStrike debacle.

1. The basics always apply: A software code has never been made without bugs or errors. From your middle school attempt to create Tic-Tac-Toe with Java to the building of advanced triple-A gaming software, there will always be bugs. The first lesson anyone learns in coding is to check for bugs. It is a lesson so basic that no one, be it CrowdStrike's team or the IT department's updating their company's security software, properly checked the new Falcon update. Grand ambitions are rarely felled by anything other than the basics, and this goes for coding, too. Never forget to clean your code and double-check for errors. Remember to check for the basics in your career, whatever they are.

2. Anti-monopolization efforts were not at fault; monopolization was: After the crash, Microsoft blamed the EU, noting how their anti-monopolization efforts forced Microsoft to reveal their Windows kernel was at fault for the disaster. In my opinion, the monopolization of the OS market between Windows and Macintosh led to the crash being as harsh as it was. If the market was anything but a duopoly, some companies would have stayed up amongst the crashed industries. With some clever coordination, this would have helped these industries stay afloat, even if they still suffered.

3. Dear company managers, NEVER underestimate the importance of IT departments and other such groups: Yes, the vast, vast, vast majority of the blame for this disaster being as big as it was goes to CrowdStrike, but it could have been mitigated much quicker if some of the companies took the time to invest and grow their IT departments, rather than viewing them as an unnecessary burden. Tech companies saw massive layoffs this year, often hitting IT or HR departments. The companies viewed these as expendable extras that were only needed in the rare bad situations that basically never happened. That is, until they did. If there is one lesson companies should take from this debacle (other than double-checking the basics), it would be to respect the importance of every department.

4. Know our world is fragile, and act accordingly: The CrowdStrike crash was a rare instance, but not an impossibly rare one. Such disasters will occur in every industry from time to time, causing small waves or giant tsunamis. A clever individual, company, or organization would diversify their holdings, plan backup servers/databases, and save crucial information in multiple places so it doesn't get lost and operations can continue as normal.

These tips may be basic, but that is the point I am trying to make. When the basics are forgotten, these simple crashes can cause much more harm. Hopefully, most companies and individuals will now remember the basics. In addition to that, I hope the market stabilizes. Much may be said about how each individual industry attempted their recoveries, and the lessons we can learn from that, but that is a story for another day. if everyone is interested For now, I hope for the best for the future.

Hello everyone, welcome to The Bhatt Report, where I will go over contemporary events from the perspectives of business. I will write a mix of lessons learned from companies, informative articles, the odd op-eds, and much more. After all, only those who can learn lessons from the world can succeed in it.

Amongst YouTube channels, dedicated followings are not extremely common, and rarer are those who could survive a channel switch, but that is what the YouTube channel Watcher had. Yet, somehow, they managed to turn their audience against them. Throughout this article, I will showcase the absolute trainwreck that was Watcher’s recent publicity disaster, and what anyone in marketing can learn from it.

A Bit of Backstory

The channel now known as Watcher started out from Buzzfeed, the famous early 2010s content company. Amongst their sub-channels, few (if any) compared with Buzzfeed Unsolved, a true crime and ghost stories show created by Ryan Bergara, and eventually co-hosted by Shane Madej. After a somewhat slow start, the show became an internet phenomenon.

The duo soon counted themselves amongst the internet’s most beloved creators. Popular YouTubers, such as SunnyV2 would later wax on how Buzzfeed Unsolved was “perhaps the greatest YouTube series ever.” They revitalized the dying ghost stories content with some much-needed credibility (Shane was a skeptic while Ryan believed in ghosts), and kickstarted a true crime wave that would directly lead to the internet’s fascination with the Idaho Student Murders and Gabby Petito.

One of the main reasons for Buzzfeed Unsolved’s success was Ryan and Shane’s unique dynamic. Ryan was analytical, quiet, and the one who found the mysteries for the two of them. Shane was skeptical, and also certainly wacky. The dynamic between the two was what made the show so addictive. Even when tackling the most grim cases of murder and cruelty, the duo provided a lighthearted charm, making fun of killers for the cowardice, rather than mystify or romanticize them. The show also took an anti-rich, progressive tone as time went on, with Shane particularly noting his support of non-violent criminals in a humorous manner if they stole from the rich.

Eventually, their tenure at Buzzfeed came to an end, and Ryan and Shane joined together with Steven Lim, a host of a popular Buzzfeed food show, Worth It, to create a new company of their own, Watcher Entertainment. After a little while getting the channel up and running, they continued their old series under new names and brands, with Buzzfeed Unsolved becoming Ghost Files and Mystery Files, and Worth It became Travel Season. A few new features also rose, most notably Puppet History, which saw Shane make a mark as a rather successful history channel. These shows, and a podcast, made Watcher one of the most successful YouTube channels established during the 2020s so far with about three million subscribers, and it seemed rather impossible that Watcher Entertainment would fail until…

The Incident

April 19, 2024 seemed like any other day for most fans of Watcher, until they got a notification for a new video, “Goodbye YouTube.” This, coming off the retirement of YouTube legends MatPat and Tom Scott immediately made fans worry. The results were even worse than expected, however. In the video, Steven, Shane, and Ryan announced that they were tired with YouTube’s harsh system of ad revenue, and felt they had no control over their careers. They also sought to expand their shows, incorporating higher budgets and adding more programs to their lineup. They also sought to maintain their own company, and all their 25 employees.

Thus, they announced that they formed a new streaming service, Watcher TV, which would exclusively air their content, plus several additional new shows they were creating. All of this at the price of $5.99 per month, this being a new expense that could not be merged with preexisting payments to Watcher.

The backlash was instantaneous. Fans, members of their Patreon, online commentators, and nearly everyone across every corner of the internet voiced their backlash. Their Patreon and YouTube subscribers declined near-instantaneously, and they soon had to apologize for their actions. Watcher TV was then changed into providing early access to their new episodes, making it tied to their Patreon, provided refunds for existing purchases, and fully apologizing to their fans, once again returning to YouTube, and insisting that rumors of them deleting their old videos from YouTube were false. Despite that, their YouTube views failed to return to their original amount, their subscribers and Patreon supporters didn’t fully recover. Other YouTubers with similar followings (such as the infamous Logan Paul), have recovered from far worse-seeming controversies, and other YouTubers have successfully maintained careers after starting their streaming platforms at the side, so what did Watcher do wrong?

Let’s go over this from a marketing perspective and learn WHAT NOT TO DO when making a major announcement.

What We Can Learn From This:

1. Know Your Audience: In the words of popular rapper Kendrick Lamar, “the audience (is) not dumb.” Too many products from established brands have failed because they failed to understand that sacrificing an existing audience for a new one is a risky gamble that hardly pays off, ever. Watcher’s audience was primarily made up of young individuals with economically progressive views who would not be supportive of any perceived cash grabs. Had Ryan, Shane, and Steve been hosting a business podcast, and talked about using these funds to expand their lineup of content, the reception would have been different. Perhaps angry, but less so.

2. Don’t Make Your Audience Feel Broke: In one of the most egregious moments of the original video, Steven Lim, acting as the CEO of Watcher Entertainment, talked about how they intended to make the subscription affordable to all at a low price of $5.99. The issue is this price was much higher than expected, meant to compete with other multi-channel streaming services such as Nebula, or mainstream options such as Netflix. When it came to value, these services offered more content than Watcher had promised to (let alone deliver). Additionally, Steven’s comment on $5.99 being affordable bugged many viewers, who felt that between the struggling job market and higher prices post-COVID, they were being ignored for being too poor to watch a channel hosted by individuals known for making fun of the out-of-touch rich (see point 1).

3. Don’t Alienate Your Core Audience for Short-Term Greed: Any online content creator can tell you their lifeblood is Patreon, a service that allows devoted fans to provide one-time/monthly/annual payments to their favorite creators to help them continue to create more of what they enjoy. When Watcher announced that their content was moving to their own streaming platform, they did not offer to let Patreon payments count towards Watcher TV, and did not even offer up a discount. In a quest for short-term profits, Watcher’s team completely lost a large portion of their core audience.

4. The Audience Does Not Care About Your Financial Woes and Plans: One of the main reasons Watcher provided for the move was wanting to have control over their finances, being able to fully pay their employees, and being able to expand their show lineup. Viewers instantly began noting inconsistencies and other cost-cutting measures the group could have taken, including not having an office next to the famous Hollywood sign. The audience does not like being spoken down to and told they should be paying for the costs of the content they are watching. If costs must be raised, a clear increase in quality for the audience must (typically) also occur.

5. Remember Why the Audience Watches You in the First Place: This is a basic rule that so many marketing entities seem to just simply forget. If you are not attempting to gain a new audience, and are sure of its success, don’t abandon what made your audience come to you initially, in this case it was the cheap sets and simple dynamics. Buzzfeed Unsolved always had a low budget, and it was the dynamic between Ryan and Shane that got viewers coming back. By focusing on their budget increases, Watcher was ignoring their key reason for popularity.

6. Optics Actually Matter: Like it or not, every collective has popular members and less popular ones, every fandom has inside jokes and moments they’d rather ignore. Imagine The Beatles at the peak of their popularity leading a major announcement such as this with Ringo Starr at the forefront. Steven, despite being the CEO and arguably the most important member of Watcher from a business perspective, is the only non-Unsolved member, and thus the least-known from a general audience perspective. As a result, he took a large portion of the blame, and the message was not taken well by fans. Additionally, focusing on each of the members’ individual careers, rather than their involvement in Watcher as a whole, certainly hurt the cohesiveness of the announcement.

7. Finally, Not Needing An Apology is Better Than the Best Apology: Jeff Bezos famously said “the best customer support is none,” and that goes the same way when it comes to handling PR crises. Watcher did everything right in their apology. They took accountability, offered refunds, and quickly went back to providing content. Nonetheless, their views have yet to recover from this disaster.

Part of the issue with the Watcher TV announcement was that the underlying idea itself was not exactly sound. However, a terribly managed PR release sunk the Wacher brand even further. A good example of how to make such an announcement successfully could be seen with Watcher’s long-time associates the Try Guys, and how they successfully managed a (mostly) similar move, so let me know if you are interested in such a post. But for now, for any young students studying PR, or any experienced PR individuals looking for a refresher, remember the seven aforementioned steps!