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EIEIO…Fast Facts
Entrepreneurship: $1 billion – Surge AI’s revenue last year, a company that has never raised outside investment and has been profitable since its launch in 2020. (Inc.)
Innovation: -42% – The percentage decrease in “shooting days” on Los Angeles film sets from 2022 to 2024. (Harper’s)
Education: 25-150 – The updated word count for reading passages on the SAT, shortened from 500-750 words. (The James G. Martin Center for Academic Renewal)
Impact: 4 to 5 million – The estimated number of deaths per year that could be averted if the global population was more active. (World Health Organization)
Opportunity: 2 hours – The amount of time ~32 million Americans spend in laundromats per week. (Fabric Health)
“If you aren’t cheating, you aren’t trying.” – Eddie Guerrero
“Efficiency is doing things right. Effectiveness is doing the right things.” – Peter Drucker
“Hard work never killed anyone but why take a chance?” – Ronald Reagan
As I referenced last week, I spent the past seven days on a Backroads bike trip to Corsica and Sardinia.
The two islands, the first belonging to France and the second to Italy are twins with just seven miles separating them in the Mediterranean Sea. Both are stunning with their mountainous terrain, dramatic cliffs, sandy white beaches and crystal clear water. The French artist Henri Matisse said “Corsica is a place where everything glistens, everything is color, everything is light.”
In short, a perfect place to have a holiday.
My wife Bonnie and I love Backroads trips because they are always in amazing places and it’s active in that you hike, bike and kayak. It’s a great way to see a lot, learn a lot, and be immersed in a culture.
As we were getting organized for our adventure, Bonnie asked me if I wanted to do an E-Bike as opposed to a traditional bike as I’ve always used in the past.
My immediate reaction was, “Why in the World would I want to do that?” I love to bike. It’s great exercise and it’s fun. Riding an E-Bike would be “cheating” and I’d miss the workout.
E-Bikes have been around for over 100 years but the combination of better technology with the lithium-ion battery being lighter, lasting longer and charging faster—plus, COVID was a major accelerant for adoption. Between 2019 and 2021, E-Bike sales grew by 240% with 50 million E-bikes sold in 2024 alone.
Bonnie persuaded me that I really should try it, the rides we were going to have a lot of climbing and I didn’t have to use the motor if I didn’t want to.
So we showed up for the first day with the others in our group and only a few of the guys chose to ride with traditional bikes while rest of us had E-bikes. But I was a little mad and a bit embarrassed that I wasn’t riding the way biking was supposed to be done.
After our safety instruction, our peloton was off winding up and down the Corsica mountains. Quickly, I saw the benefits of the motor, turning me from skeptic to superfan.
So much so in fact that 30 minutes into our ride when the battery for my bike went down and I couldn’t use the “E”, I was despondent and wondered how I’d complete the ride. Luckily, our always on it Backroads guides rapidly switched my dead battery and I was back in business.
I had empathy for the two in our group who went au natural, as they were struggling to keep up, comparatively miserable and forced to stop earlier than the rest of the group (also, they both got injured which may have been a result of trying to maintain pace with the rest of us). And while there is no question that having the E-boost made the riding easier, it also made it more enjoyable and I got as good a workout as I wanted.
The question remains, is it “cheating”? What studies have shown is that while people using E-Bikes burn about 30% fewer calories on a mile to mile basis, they also tend to ride more often and go longer distances so the exercise benefits are similar—if not in favor of the E-bikers. Obviously, if you don’t peddle and just rely on the motor, you won’t get any health benefit (my guess is that old guard bikers said that when gears were invented—that was cheating, too).
The ubiquitous Strava tracking device relies on an honor code so you aren’t supposed to compete to be KOM (King of Mountain) if you are using an E-Bike, but the purpose of biking is to get exercise, stay motivated to be healthy, and be part of a supportive community.
Like the E-Bike where the origin of the idea goes back over a century, the concept of Artificial Intelligence has been around since the early 1920s. The word “robot” was first introduced in 1921 by Czech playwright Karal Capek. The groundwork was laid in the 1940s through advances in mathematics, neurology, and computer science. British mathematician Alan Turing proposed that machines could simulate the way humans think in 1950. In 1956, the Dartmouth Summer Research Program on Artificial Intelligence was convened to launch a new field of study on how new machines could simulate human intelligence.
Also like the E-Bike story, AI was more-or-less a niche field that only brainiacs and science fiction enthusiasts paid any attention to…until OpenAI introduced the World to ChatGPT in November of 2022. The combination of advances in machine learning, massive datasets, and exponential growth in computational power created a product that started out looking like a really cool magic trick and quickly became a global phenomenon.
In the overused but nonetheless jaw-dropping user adoption metric, ChatGPT reached 100 million active monthly users in two months. TikTok took 9 months to achieve that milestone and Instagram took 2.5 years.
Currently, ChatGPT has 800 million weekly active users…in other words, one out of ten people on the planet use ChatGPT every week.
Predictably, traditionalists say using this new technology is “cheating”. Of course, if a student just regurgitates whatever the LLMs are telling them, they aren’t going to learn anything. And sorry to use the cliche…but who they are really cheating is themselves.
The brain is an organ not a muscle, so it doesn’t grow in size with use. However, by working your brain, new neural connections are formed and it becomes more efficient and adaptable. Like a muscle, you “use it, or you lose it.”
Last week, MIT came out with a study showing an over dependence on AI tools reduces neural engagement and critical thinking. What’s referred to as “cognitive debt” is when you essentially outsource your thinking to AI and over time, it will erode independent thinking skills. The study showed this was especially damaging to young learners.
Generative AI is a game changer if used in a way where it accelerates learning by augmenting, not replacing it. Like the E-Bike, if AI can help students with a little boost when climbing up the academic mountain, we should be finding ways to integrate it into our learning programs, and enhance the learning experience for all.
Market Performance
Market Commentary
Despite the continuing military conflict between Russia and the Ukraine, the new military conflict between Israel and Iran and the looming threat of a Tariff War, stocks have remained resilient. For the week, NASDAQ advanced .2%, the Russell 2000 was up .4%, the Dow was flat and the S&P 500 declined by .2%.
Given what’s going on in the Middle East, it’s not surprising oil prices have risen about 10% to $75 a barrel. About 20% of oil flows through the Straight of Hormuz with analyst warning if a war escalates, oil could hit $120.
The Fed continued its sitting on its hands stance towards interest rates despite inflation seemingly being in check. Without any major changes in the economic outlook or geopolitical shocks to the system, conventional wisdom is now that the Fed will take the summer off.
Tesla is launching its Robotaxi service today in Austin albeit with a “safety monitor” in the front seat. While Tesla’s stock has declined 20% YTD, it’s up 15% for the quarter. Alphabet’s autonomous car business Waymo is already operating in Austin.
Last week the Trump Administration took significant steps to tighten restriction on semi-conductor equipment exports to China. NVIDIA was down 1% on the news.
Currently, the S&P sells at a 21.6X forward P/E multiple with expectations of 9% EPS growth in 2025 and 13.7% EPS growth in 2026. By historical standards, the Market isn’t “cheap”.
That said, it’s a “Market of Stocks” with emerging growth companies offering the biggest bang for the buck. Moreover, a bubbling IPO market can provide some additional energy for investors seeking dynamic growth.
We remain BULLISH.
Need to Know
READ: OpenAI’s ARC de Triumph | Sherwood
WATCH: Handshake wants to turn students into the next workforce for AI. | TBPN
LISTEN: The State of AI & Education | a16z Podcast
GSV’s Four I’s of Investor Sentiment
GSV tracks four primary indicators of investor sentiment: inflows and outflows of mutual funds and ETFs, IPO activity, interest rates, and inflation.
#1: Inflows and Outflows for Mutual Funds & ETFs
[WATCH] ETF boom continues as investors chase safety, growth and Fed-fueled gains
#2: IPO Market
#3: Interest Rates
#4: Inflation
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Maggie Moe’s GSV Weekly Rap
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Connecting the Dots & EIEIO…
Old MacDonald had a farm, EIEIO. New MacDonald has a Startup…EIEIO: Entrepreneurship, Innovation, Education, Impact and Opportunity. Accordingly, we focus on these key areas of the future.
One of the core goals of GSV is to connect the dots around EIEIO and provide perspective on where things are going and why. If you like this, please forward to your friends. Onward!
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-MM