Hey Snackers,
In 2019, we made three bold business wishes for 2020 — and one actually kind of came true (table-free Chipotle restaurants). Today, we're sharing our three boldest business wishes for 2021 based on 2020 trends... and our imaginations.
Stocks jumped to record highs for the last week of 2020, capping off a banner year for the markets. A week ago, President Trump signed the $900B Covid-19 relief bill (aka: Stimulus #2). $600 checks are already hitting bank accounts.
Great cuddler, better bundler... Claaassic Hinge profile of Big Techies, from Apple to Adobe. Since Microsoft Office launched in 1990, software bundles have been the M.O. of tech heavyweights. Bundling = selling multiple services together for one price — generally, lower than they would cost individually. That's bad for smaller companies whose entire biz happens to be.... one of those services.
Sliding into the DMs with that blue chipmark... Wall Street flex. "Blue chip" tech companies can afford to bundle and undercut competitors on price. Last fiscal year, Microsoft made a massive $44B profit, while Apple took home a whopping $57B. But with great power comes great regulatory scrutiny: In 2020, Big Tech lawsuits and congressional hearings were as common as Baby Yoda memes (and way less cute). One thing could ease that...
We need a "mixed tech" bundle... aka: the Anti-Apple Alliance. Smaller tech companies like Netflix and Spotify are successful because they do one thing really well — but they risk getting trampled by bundle-hungry Big Techies with way more products. Our wish: Netflix, Spotify, and Peloton partner to bundle their services under one monthly subscription fee. "Mixed tech" bundles could bring best-in-class products together to cement customer loyalty against Big Tech — and save us some $$$. PeloSpotiFlix, anyone?
Different stacks of pancakes... Last month, food delivery leader DoorDash raised ~$3.4B in fresh cash during its IPO. After a splashy public debut on the NYSE, DoorDash now has a hearty market value of $45B — nearly 3X its June valuation. But while food delivery has it sweet, brick-and-mortar restaurants have been served a different fate:
Something to Fribble over... The list of 2020 food chain bankruptcies is long, from Ruby Tuesday, to Chuck E. Cheese. Franchise operators weren't immune: NPC International, which owns over 1K Pizza Hut and Wendy's franchises, filed in July. CFRA Holdings, which runs 50 IHOP locations, went under in May. But bankrpucty doesn't necessarily mean closure...
DoorDash should buy a bankrupt restaurant chain... like Friendly's, Sizzler, or even some IHOP locations. DoorDash could rescue the brand, modernize the menu, and create a local delivery/takeout hub. That would give it hundreds of food "distribution centers" in the suburbs, where it thrives — it could whip up classic Friendly's fare, plus other goodies for delivery. Instead of charging restaurants like Sizzler fees for each order, DoorDash would be a member of the restaurant community. That could transform it from the Big Bad Wolf to the Good Guy of food delivery.
Ubering to the Airbnb... and coordinating the Grubhub delivery for check-in — aka: tech saturation Level Insanity. Uber and Airbnb have a lot in common: both are popular sharing platforms, both are used as verbs, and both crushed old-school industries (taxis + hotels).
5 stars for verb-iness... Uber and Airbnb don't actually specialize in rides and stays — their value is safety, convenience, and reliability (and the tech that powers them). Pre-2009, riding in a stranger's car was #1 on the list of things your parents said you shouldn't do. Now, many don't think twice about hopping into one at 1 am. Airbnb has made booking a stranger's condo as normal and predictable as ordering from Amazon (always stalk the reviews).
Airbnb and Uber should go full horizontal... That is, they should expand to sharing and delivering anything (legal). With its trusted brand and platform, Airbnb could expand from home-sharing to "anything-sharing" — think: parking spaces, storage space, boats, and RVs. Uber has expanded from delivering people to delivering food. Now it's dabbling with medication and package deliveries in select cities — we think it should go all-in on "delivery anything."
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Authors of this Snacks own shares of: Apple and Uber
ID: 1464485