The Weekend Leverage, First Edition
And...Here. We. Go.
Welcome to The Weekend Leverage! Thank you for being here and welcome to readers who followed me from my previous column at Every.
In case you missed the announcement: The Leverage is a fiercely independent, rigorous, and beautiful publication devoted to helping you make sense of our insane tech environment. Every Sunday, I’ll send you one concise email that cuts through the week’s noise—with key data, earnings, and launches, plus a few recommendations from me on products that I’m leveraging (heh) to enrich my own life.
This is very much a first edition. I want us to co-create what this looks like, and I’ll be experimenting with the format of this email for a few weeks until it settles in. Please respond to this email and tell me what you’d like to see here and what you’d like to change. My success as an independent writer depends on you, my reader community.
I’m able to keep this email free thanks to my exclusive launch sponsor, Mercury.
Life is too short for ugly software. So, when it came to choosing a business banking account for The Leverage, Mercury was an easy choice. The UI is filled with little moments of delight—thoughtful details that show care beyond what's strictly necessary. If Mercury put this much craft into the small things, I trust them with the big things (namely, my money).
You can experience banking that feels extraordinary to use here.
(Mercury is a financial technology company, not a bank. Banking services provided through Choice Financial Group, Column N.A., and Evolve Bank & Trust; Members FDIC.)
And with that, here are the most important stories of last week and why you should care about them.
THE BIG THREE STORIES
Tesla is a culture company now
Tesla’s earnings call this week was, ya know, terrible. Automotive revenue was down 20% and net income was down 71%. You could blame the tariffs, which Musk helped create by campaigning for Trump. Or you could blame the decreasing brand reputation, which Musk helped create by campaigning for Trump. However, those explanations are a little short-sighted, much like Musk was while campaigning for Trump.
Tech companies are built on features, but they compete on the basis of strategic moats. Because markets are competitive, features will, in the fullness of time, become commodities. Tech companies start by shipping technology, but they stay around if they use that technology to build things other companies can’t replicate. Musk has relied for many years on Tesla’s technical advantage in EVs, not paying attention to the fact that many other electric vehicles now have roughly equivalent capabilities. To make it worse, Chinese EVs are now thousands of dollars cheaper. While Musk would argue that “the factory is the product” for Tesla, that only works if people care about the product the factory spits out.
When features are roughly equivalent and there are no strategic moats, you are left to compete solely on brand. And by participating in the all-out brawl that is American politics, Musk made a large portion of the population actively unhappy with him. Depending on how you feel about the state of the country, you may think he was right to do so! However, political activism doesn’t move cars off a dealer’s lot. Tesla competes on its positioning, and right now the marketing is “I cut the national parks budget, please buy my cars.”
Musk is aware of this. It’s why on the earnings call he told grand tales of robotaxis and humanoid robots rather than talking about how he would sell more Cybertrucks. It’s why they did a press release for a vaporware app for an Austin robotaxi launch. (Robotaxi is a misnomer, it will have a safety driver. Only Waymo actually has scaled commercial driverless operations.)
Tesla has to become a technology company again because its current positioning dooms it as a car company.
I make this point not as a political gotcha or to take a public position on politics—my argument is that actions have consequences. If Musk wants to continue to deserve his $56 billion pay package, he probably should ask himself why the CEO of Ford hasn’t been out campaigning with Bernie Sanders.
Meta’s Glasses doubling as the Babel fish
Generational companies are built on lucky convergences. Nvidia’s GPUs just happened to be great at the math underlying LLMs. Microsoft’s software paired perfectly with Intel’s improvements to Moore’s law. Now, Meta’s efforts in VR and AR coincide with the current AI paradigm. This week it announced that its Meta Glasses can do a live translation of someone speaking English, French, Italian, or Spanish. A product ripped straight from the sci-fi books of my youth (namely Hitchhiker’s Guide to the Galaxy). These things will fly off the shelves.
Pair that with the news that YouTube will soon use AI to translate a creator into the viewer’s native language in the creator’s original voice. Meaning that if you watch podcast interviews of me, my sensual yet nasally tone could be enjoyed in Hindi.
Universal translation forces cultural commoditization. The process of translation is a creative, artistic one, where you communicate not just the literal meaning of the words, but the cultural nuance behind them. After talking with a few machine learning researchers about the current state of the software, the feedback I received is that we are still pretty far from AI being able to translate the subtle things. It is still a magical product! One that rescues me from the slog of learning Japanese via Duolingo to prep for my trip to Tokyo next year. But it is still unable to capture some subtlety. The obvious, more primal, soothing to my lizard brain forms of content are what works right now.
The obvious beneficiaries will be those at the top of the attention power law for general entertainment (namely, large YouTubers like MrBeast), but this has much broader implications for how attention is competed for. The winners and losers will be different than you may think. My first deep dive will name some companies that are well positioned and discuss how to deploy capital if you believe in the AI translation thesis—coming this week to paying subscribers.
Recession? AI wins. Bull market? Same thing.
As I wrote about last Tuesday, AI software startups are among the fastest growing in the history of capitalism. Both consumers and businesses are demanding these products with a hunger so voracious that it is hard to overstate. This shows no sign of slowing down.
For example, despite all of the economic turbulence, Google announced this week that they would spend $75 billion on computing infrastructure to help serve their AI products and the computing needs of their cloud customers. Google’s products are also seeing huge amounts of AI usage: “[Google Workspace] delivers more than 2 billion AI assists monthly, including summarizing Gmail and refining Docs.”
On the enterprise software front, ServiceNow boasted that it had:
a 16x improvement in lead conversions using AI agents
a 30% increase in average contract value for deals with the government
I select these two numbers because I think they are indicative of what will happen in a recession. AI as a labor replacement would be an unpopular initiative. However, if the economic pain that these tariffs threaten happens, CEOs will have coverage to use AI to fix problems that “necessary layoffs” would create.
The increase in government contract size is a perfect case study of what may happen over the next 12 months. Despite laying off roughly 280,000 workers via Musk’s DOGE efforts, the government wanted to spend more on software because they are hoping to capture some of that 16x AI magic. This means it is a GREAT time to be in the AI business, probably a bad time to be employed doing anything else. Chaos is only a ladder for the agentic actor.
SIMPLE MACHINES
One of my goals with The Leverage is to offer recommendations on the applications, media, and tools that are forms of leverage in my life. If you believe, as I do, that the upcoming era will be defined by taste as much as technology, then it is worth actively improving your choices around consumption. It may end up being the difference between being replaced by AI, or being the human telling the AI what to do.
Sinners is the best of what Hollywood can be: Cinema is my favorite form of entertainment and at the same time, my favorite art form. Sinners, the new vampire movie from Black Panther director Ryan Coogler, is both entertainment and art. This is an exceptionally hard thing to pull off, but it is the distinctive mark of greatness for American products. The iPhone was beautiful and popular. The Stripe website has striking gradients and hosts a payments company worth billions. Sinners has shots that will take your breath away and earned $48 million dollars in its opening weekend.
The film is exceptional entertainment—the music rips, the actors are all at the top of their game, and the third act's crescendoing dance of violence had me gasping in terror. Perfect popcorn movie. It is also exceptional art. In it, Coogler wrestles with the duality of man using Michael B. Jordan as a pair of twins. It is unusual to have a genre movie make audiences want to confront the big questions, but such is Coogler’s skill. I walked away from the movie thinking about who the real sinner in our society is, and the role of immigration and race in exploitation. If you go see it, I highly, highly recommend finding an IMAX screen. Coogler shot the film in both the widest and tallest projection formats and swaps between the two to highlight emotional tension. Every aspect of Sinners screams thoughtful craft, from the cinematography to the accent work. 5/5 stars.
Author’s note: I have a take about what went wrong in the film business, where the fault of tech companies comes in, and how to fix it. Is that the sort of deep dive you would want to read from The Leverage? Respond to this email or take the poll below to let me know.
The secret podcast giving me alpha: There are too many VCs doing podcasts these days, but nevertheless, I can’t help but recommend this one. Gamecraft is from Blake Robbins and Mitch Lasky, two investors who mostly focus on the video game industry. Their opening episode of this season discusses the difference between content, technological, and distribution innovation for media companies. They were insightful enough that their discussion forced me to alter my business strategy for the very email you are reading.
Run fast with this app: Runna has been the key to my half-marathon training this year. It uses AI to design my training plan and helps me track my progress. Strava acquired the company last week, but if you are looking to start running this summer, Runna is the way to do it.
That’s all for now, I’ll see you in a few days with my first deep dive for paywalled subscribers. Thanks for being here.
-Evan