🧞‍♀️ 3 bold biz wishes for 2021

Monday, January 4, 2021 by Robinhood Snacks | Disclosures

2021: The Anti-Apple Force Awakens

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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.

#1
1. We wish for "mixed tech" bundles (aka: The Anti-Apple Alliance)

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.

  • Apple: In September, the Fruit launched its "Apple One" bundles. The premium tier includes Apple Music, TV+, iCloud storage, and Fitness+ all for $30/month. That's a bundle of bad news for Spotify, Netflix, Dropbox, and Peloton (in that order).
  • Microsoft: The Office 365 Suite bundles classics like Word, Excel, and (more recently) collaboration tool Teams. In July, Slack stirred up legal drama since the Teams bundle makes Slack basically unnecessary for companies that use Office. BTW: Slack is now getting purchased by notorious bundler Salesforce (ironic).

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...

THE TAKEAWAY

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?

#2

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:

  • 17% of US restaurants have closed due to the pandemic. That's more than 500K restaurants of every type — from independent, to franchise, and chain — that have gone under.
  • All those closures represent millions of jobs lost in the food services industry, which is one of the largest employers in the US.

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...

  • Ice cream legend Friendly's filed for bankruptcy in November and sold itself for just barely $2M — but it's expected to keep nearly all of its 130 locations open.
  • Sizzler, which went bankrupt in September, also said it doesn't intend to close locations. So we had an idea...
THE TAKEAWAY

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.

#3

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).

  • Since launching in 2009, Uber has expanded from rides to food delivery with Uber Eats — and it's now buying Postmates. We think it could do more.
  • Since launching in 2008, Airbnb has expanded from short-term rentals to long-term stays and "Experiences." Spoiler: we think it could do way more.

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).

THE TAKEAWAY

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."

What else we’re Snackin’
  • Change: How to make New Year's resolutions that will actually stick (and actually make you happier).
  • Check: Answers to questions about your stimulus payment status while you wait for the IRS to relaunch the "Get My Payment" tracker (any day now).
  • Choose: Five choices you'll regret in 10 years — or even sooner.
  • Visualize: How every asset class, currency, and S&P 500 sector performed in 2020.
  • Stimulate: When workers can expect to receive the new $300/week unemployment boost.
  • Learn: How much should you save for retirement? The sooner you start, the better.

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Snacks Daily Podcast

In 2019, we made three bold wishes for 2020... If you round up, we're 1 for 3:

  • Amazon unveils "naked" shipping to reduce waste ❌
  • Apple acquires Tesla to bring us the iCar ❌
  • Chipotle eliminates tables to go pick-up/delivery only ❎

2020 brought us digital-only Chipotle restaurants. Tune into our snackable pod to decide which of our wishes could come true in 2021.

This Week

Authors of this Snacks own shares of: Apple and Uber

ID: 1464485

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