"Operation Two-Sided Marketplace" streaming soon
Hey Snackers,
The best thing to ever come out of a blown-out tire: Shaq showing up to the rescue. The NBA legend pulled over to assist when he saw a car stranded on the highway, staying with the family until sheriffs arrived. MVP in every sense.
The market ticked up slightly on a big government deal for a COVID vaccine candidate. More on that below.
Secure the doses... American big pharma Pfizer and German biotech BioNTech (creative) have been working on four mRNA COVID vaccine candidates. Unlike OG vaccines (which use a weakened virus), mRNA ones teach cells to destroy the virus (hardcore). No mRNA vax has ever been approved for human use, but the US government is clearly optimistic:
Putting money on every horse... This big bet in the vaccine race is part of the Trump admin's Operation Warp Speed. Vaccines usually take 6-10 years from development to approval. Remember the Ebola outbreak of 2014? The vaccine was just approved in December. The US is investing in a "portfolio" of vaccines to up the odds that Americans will have at least one ASAP. Other big vax horses the US has funded:
There's the scientific challenge, then the ethical one... Once a company gets an approved vaccine, ethical considerations around profits and distribution come into play. AstraZeneca and J&J said they'll sell hundreds of millions of doses at price that just breaks even, aka not seeking a profit. On the other hand, Moderna explicitly said it's planning on profiting. Governments will feel obligated to distribute vaccines to their own citizens first if they're being manufactured domestically. That could mean poorer countries get it later.
Better have my money... Universal Music Group is the major label that reps Rihanna, T. Swift, and hundreds of other musical A-Listers. For years, Spotify has been coughing up cash to the world's largest record company for the right to stream its artists' tunes. It's a one-sided relationship in which Spotify pays UMG for each song stream.
Spotify's making it "two-sided"... Spotify just signed UMG onto its "two-sided marketplace." Under the new licensing agreement, UMG could eventually be paying Spotify for marketing, data, and analytics.
Spotify isn't embraced as "true tech" because of 1 thing... High marginal costs. the purest software companies pay for engineers and cloud storage, but besides that don't incur much additional cost for each customer they add. It didn't cost Google anything to show 1 more person that CBD oil ad, but it did make Google more money. For Spotify though, the more a song is streamed, the more it has to pay labels. Spotify’s marginal costs make it less profitable, but new revenues like the "two-sided marketplace" help.
Don't judge a pear by its blotches... Sometimes the imperfections are what make things fruitiful. Misfit Market sells "ugly" or somewhat unfortunate-looking (but still perfectly edible) organic produce. Think: weirdly shaped avocados and dented apples that supermarkets won't sell. It just raised $85M to ship its "Always fresh, sometimes normal" fruit to your door. The value prop:
Expand the niche... Misfits identified a market of people who find value in its mission-driven business model. While many are happy paying for obscene-looking squash to reduce food waste, Misfits wants to expand its biz to a wider audience. To do that, it's increasing its "imperfect" offerings to products like: olive oils with upside-down labels and nut butters with erroneous sell-by dates.
Opportunities are born out of market inefficiencies ... One business’ market inefficiency is another business’ business. Uber went mainstream because the market inefficiency was available cars and available driver time with a need for you to get from A to B. Misfits' ability to grow depends on just how much the inefficiency it is capitalizing on affects consumers.
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Disclosure: Authors of this Snacks own shares of Microsoft, Spotify, Alphabet, Amazon, and Slack
Correction: In our Eurozone story yesterday, we said "19 of the EU's 17 countries share the Euro as a common currency." We meant: "19 of the EU's 27 countries." 🙄
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