Tuesday Jun.16, 2020

🛍 Shopify & Walmart come for Darth Bezos

_Initiating 'Desert Clean' setting on Roomba 9000_
_Initiating 'Desert Clean' setting on Roomba 9000_

Hey Snackers,

Tweet of the week: "Did I miss anything?" A man just emerged from a 75-day solitary retreat in the woods of Vermont. Logs onto Twitter. Promptly slinks back into the woods.

Markets inched up Monday, with Big Tech companies leading the charge.

Compete

Shopify and Walmart team up to take on Amazon: the 3rd-Party Seller Wars

The Rebel Alliance... Shopify's corona-conomy MO: keep your friends close, and your would-be enemies closer. The out-of-the-box ecommerce platform partnered with Facebook in May to power Instagram "Shops." Now Shopify is teaming up with Walmart to integrate with its 3rd-party seller platform, Walmart Marketplace.

  • Quid pro quo: Shopify's approved small business sellers get access to Walmart's 120M monthly customers. Walmart gets a cut of sales and a more diverse/robust product offering without the product grunt work.
  • The ultimate goal?: Take on the Amazon Empire, which controls legions of sellers (and 300M global customers).

Own the market, not the booth... Amazon and Walmart provide sellers a platform to hawk goods on — but they don't actually have to source/provide all the goods you see on their websites. It's like owning a Farmers Market lot, then taking a cut of each booth's food/bev sales:

  • Marketplace is a “strategic priority” for Walmart. Businesses are moving online faster than ever. Even OG eBay's stock recently hit an all-time high.
  • Walmart's ecommerce biz grew 74% last quarter. Marketplace sales grew faster than sales of Walmart's very own products.

"The enemy of my enemy is my friend"... It's The Art of War, applied to business. Ecommerce platforms that aren't Amazon are teaming up with one goal in mind: fight Amazon together. Standing up against the forces of Darth Bezos might lead to more surprising partnerships.

Book

Airbnb will try to measure (then tackle) racial discrimination on its platform

Shine a light... on racial bias. Like many other platforms, Airbnb has not been free from implicit (and explicit) discrimination. The rental booking platform connects guests and hosts. Unfortunately, some users get turned down for no other reason than their name and the color of their skin.

  • Since 2016, Airbnb has removed 1.3M users for "declining to treat others without bias." It also added an objective Instant Booking feature and profile pic protections (your photo isn't shown until a host confirms the booking).
  • Enter "Project Lighthouse": Now, Airbnb is collecting data on user behaviors to measure discrimination. The project is in partnership with Color of Change, America's largest online racial justice org.

Airbnb's problem is harder to solve... Hotels are required to accept any paying customer if there's a vacancy. Hospitality platforms like Airbnb can't force hosts to accept a person into their house.

  • That's why data is key — the info Airbnb collects will help it measure bias, so that it can then tweak its products/features to fight it.
  • Think: Emphasizing guests' ratings over pictures or informing users of selection patterns that could potentially be discriminatory.
  • Privacy: Airbnb is working with privacy experts to help ensure that the data collected isn't associated with individual accounts.

If Airbnb can help solve this, other gig companies could too... Bias is also a problem for other gig-like platforms (where users can accept/reject a person for no reason). Airbnb has pledged to publish the data and policies that come out of Project Lighthouse. We're thinking this could help Airbnb's buddies like Uber, Wag, and TaskRabbit reduce discrimination, too.

Automate

iRobot sweeps up strong Roomba sales — it could be Big Tech's partner in grime (fighting)

Not the Will Smith movie... iRobot is a rare publicly-traded, consumer-facing robot company. It's famous for birthing the Roomba (aka, the world's 1st self-driving vacuum). And it just rolled its way across the floor to give us a casual update:

  • "Substantially stronger than expected": iRobot's quarterly sales. They're now expected tp be around $265M, up from the previous forecast of less than $193M.
  • "True partners": In grime-fighting. People are staying home more, so floors are getting dirtier. Throw in a global pandemic, and you've got a cleaning-obsessed market.

Time is more valuable than money... That's the philosophical conclusion we extrapolated from Roomba sales. The premium $900 Roomba Series is selling better than the $250 basic version. People are working from home, caring for kids, and cooking 10 meals a day — that's a reason to splurge on the most efficient automated vacuum option. The one task you can delegate.

Hot takeaway — iRobot should get itself acquired... Its $2.3B market value is 1/4 of a Lyft. While the stock is up 70% for the year, it's still down 35% from its all-time iRobotic high. iRobot's business revolves around a single, popular product line that could be easily tossed into a corporate shopping cart. An Amazon-owned iRobot could throw in some Alexa to entertain you while it cleans.

What else we’re Snackin’

  • Nom: Burger King adds Impossible Foods' meatless sausage to its breakfast menu with "The Impossible Croissan’wich" (sounds like a Connecticut town).
  • Boring: Wynn Resorts asks Elon Musk's Boring Company to build high-speed tunnels from its hotels to the Vegas Convention Center.
  • Fly: Honeywell launches a drone unit to get in early on air taxis and drone delivery — it thinks the market will be worth $120B by 2030.
  • Looney: AT&T looks to sell its Warner Bros. gaming division for around $4B — EA and Activision Blizzard are interested.
  • Gassy: Oil giant BP makes a $17.5B write-down of its assets, as it expects oil prices to stay low for a long time.

đŸȘ Thanks for Snacking with us! Want to share the Snacks? Invite your friends to sign up here.

Tuesday

  • Consumer spending report for May
  • Earnings expected from Oracle and Groupon

Disclosure: Authors of this Snacks own shares of Shopify and Amazon

ID: 1217006

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Nicolai Tangen, the CEO who holds the purse strings of Norway’s $1.6 trillion sovereign wealth fund, thinks that his fellow Europeans don’t quite stack up to US employees when it comes to pure hustle, telling the Financial Times in a recent interview that there is a difference in “the general level of ambition” and that “the Americans just work harder”. 

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Tangen has clearly been putting his money — or more specifically Norway’s — where his mouth is: the sprawling Norwegian oil fund, now one of the largest investors on the planet, has been pumping more capital into its US holdings in the past decade, while decreasing its investment into European entities.

The troublesome news for our European readers? Tangen might be onto something. According to data from the OECD, American workers are putting in almost 60 hours a year more than the weighted average for OECD nations
 a benchmark that workers from countries in the European Union are already ~180 hours shy of.

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$70B

Alphabet shares are soaring in the after-market session, with a initial jump of more than 10% implying a gain of upwards of about $200B in market value when the stock opens tomorrow morning.

Google’s parent company crushed earnings expectations, initiated a cash dividend for the first time, and authorized a fresh $70B in share repurchases for good measure. The market likes it very much.

Business
Rani Molla
4/25/24

No, Apple hasn’t cut its Vision Pro production estimates in half

Quite a few news outlets are reporting that Apple thinks it’s only going to sell 400,000 to 450,000 Vision Pros in 2024, compared a “market consensus” of 700,000 to 800,000. They’re all citing a note from Apple analyst Ming-Chi Kuo.

Obviously there’s no question that Apple’s $3,500 face computer will have a limited audience and could be a huge flop, but this also doesn’t seem like accurate news.

The issue is that 1) this 400,000 number isn’t new. Back in July of 2023, the Financial Times reported that Apple planned to make fewer than 400,000 units in 2024, reducing its initial projections of 1M units, citing two people close to Apple and, the Chinese contract manufacturer assembling the device. 2) It's unclear who was estimating 700,000-800,000 Vision Pros in the first place, but it appears that it was Ming-Chi Kuo himself?

The issue is that 1) this 400,000 number isn’t new. Back in July of 2023, the Financial Times reported that Apple planned to make fewer than 400,000 units in 2024, reducing its initial projections of 1M units, citing two people close to Apple and, the Chinese contract manufacturer assembling the device. 2) It's unclear who was estimating 700,000-800,000 Vision Pros in the first place, but it appears that it was Ming-Chi Kuo himself?

 Max Holloway and Mark Zuckerberg

Meta exhaustingly tries to merge the metaverse and AI

Gonna have to rename the company... again

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