Hey Snackers,
Bummed we didn't get the invite to this really cool marathon (it was the GOAT). On Tuesday, 200 escaped goats went for a long evening run down the streets of San Jose, CA. Real baa-dies.
Stocks fell as Fed Chairman Jerome Powell warned that economic recovery may happen slower than hoped. Also, the US posted a record $738B budget deficit for April (it had a $160B surplus in April of last year).
To the Loon and back... Loon is the LTE balloon company spun out of Google's secretive X Lab of moonshot projects. Loon balloons (Loons?) fly twice as high as planes (12 miles up), casting internet down to areas with underdeveloped infrastructure. Now the Alphabet-owned floating phenom just sealed a key deal in Mozambique.
The problem is lack of infrastructure... Many rural/remote or underdeveloped areas around the world lack the strong ground infrastructure needed for internet connectivity. Loons solve that problem by basically acting as floating broadband cell towers.
Google can get paid twice with Loon... First, by signing deals with cell carriers like Vodacom and getting paid to expand coverage with its floating balloons. Second, by connecting more of the world to the internet, getting more people Googling, and therefore selling more ads. Around 42% of the world doesn't have internet access — that's over 3B people Loon/Google could potentially make money from (twice).
Can hear a pen drop in the office lobby... Yesterday, we talked about Twitter's decision to let its employees work from home forever (AKA, permanent optional WFH). Today, we're looking at the companies that could lose out most if enough employees don't return to offices. Let's start with a bankable example:
Some companies/employees are getting comfortable with WFH... (noticing more pajamas on Zoom calls?). And if too many start permanently allowing WFH, we'll see some corporate offices empty out. That directly hurts "Work from Work" companies relying on you going into the office:
Work from Work companies may have to WFH... If widespread WFH actually takes hold (still questionable, despite hype) then Work from Work companies will have to shift business models, or risk going under. Catering and office supplies companies could start offering company-sponsored at-home subscription packages — but shifting will be much harder for commercial real estate businesses and cities, which rely on office revenue.
Sounds cheesy... Pizza ordering app Slice just raised $43M in fresh dough to help small pizzerias go online. For the Big Four players in the mafia-style delivery wars – DoorDash, Grubhub, Uber Eats, and Postmates — more is more (1,578 different pad thai options within delivery-range). But for Slice, less is more, and pizza is everything (we don't blame it):
Slices on Slice are well positioned in the corona-conomy... 90% of its 13K pizza partners have stayed open during lockdowns — That's because of pizza-nomics (the economics of pizza). Pizza joints were doing takeout/delivery on their own well before apps were a thing, unlike your neighborhood tapas spot and most other food options.
Platforms need sellers and buyers... And up-and-coming Slice will need to conquer the (pizza) sellers before it can corner the (pizza) buyers. Right now, 10-year-old Slice is still focused on attracting great pizza joints to its platform — once it has your go-to local pie shop on board, it has a way better chance of attracting you (aka, the buyer). We expect new consumer-focused features, like loyalty points, to hit the app next.
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Disclosure: Authors of this Snacks own shares of Alphabet
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