The Best One Yet - 🤾 “$100M Duuuuudes” — Dude Perfect vs Disney. TikTok zucks Instagram. The secret to good corporate acquisitions.

Episode Date: April 10, 2024

TBOY Hotline Episode 2 is coming… Email us your question at [e-mail] — your business Besties gotcha back. (Subject line: “TBOY HOTLINE”) Dude Perfect, the sports stunt influencers, already have a smoothie line, a streaming show, board games, and a theme park — And they just got $100M in Private Equity funding to become the next Disney.Bain has published secrets to successful corporate acquisitions — Because 20 years ago, 70% of mergers failed… but today, 70% of mergers succeed.And while TikTok is fighting to not get banned, it’s also secretly launching a new app: Photo-sharing, like the original Instagram app — Because we’ve reached late stage social media.Plus, Costco’s newest profit puppy? Gold bars — Costco is now selling $200M of physical gold bars every single month #KirklandGoooooold Comment end  $META $DIS $T✅ Vote for TBOY to win the “Best Business Podcast” Webby Award: https://vote.webbyawards.com/PublicVoting#/2024/podcasts/shows/businessSubscribe to the best newsletter yet: tboypod.com/newsletterWant merch, a shoutout, or got TheBestFactYet? Go to: www.tboypod.comFollow The Best One Yet on Instagram, Twitter, and Tiktok: @tboypodAnd now watch us on YouTube Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. It's Wednesday, Saviche Wednesday, April 10th, and today's pot out of all the pods. This is the best one yet. We're whipping up the top three pop business news stories you need to know today. But first, best is by popular demand. Next week, Jack and I are recording our second episode of the T-Boy Hotline, aren't we, Jack? The T-Boy Hotline, where you call in with questions and Nick and I give our answers.

We're sourcing questions right now. What kind of questions are we thinking, Jack? Like, why doesn't Nick, ever wear jeans. And then why does Jack own shares of Levi? I love jeans that much. We'll answer both those questions. Your questions about life, investing, working, all the stuff on T-Boy Hotline. So yetis email us at Nick and Jack at T-boypod.com and we'll get your questions on our Hotline show. Two-boy Hotline, it'll be the best one yet. But in the meantime, Jack, we've got a fantastic show today. What are our three stories, man? For our first story. Dude Perfect.

The squad of YouTube creators are building a Disney-style theme park for trick-shy. And a private equity firm just gave them a $100 million check to do it. For our second story, it's Bain. This consulting company just told us the secret to a successful corporate acquisition. Because 60% of acquisitions fail. Or do they? And our third and final story. TikTok doesn't care that America's trying to ban it.

So TikTok is launching a new photo sharing app. TikTok is zuckin Instagram and you heard it here for. But Yeti's, before we hit that wonderful mix of stories. I mean, what a fantastic mix of stories for Civeche Wednesday, man. Love the mix. Costco. I'm a long-lasting member since last year. I can tell you it's the home of the $1.50 hot dog and soda combo.

Costco, it is the home of the 24-pack of a gallon tub of peanut butter pretzel bites. They sell gasoline. They sell diamond rings. And they sell gold. Gold. Silver and gold. Yates, Costco, they really do sell. sell gold like gold bar gold. Not just kirkling golf balls, Kirkling gold bars. Besties, you may

remember back in September last year, Jack and I did an entire story on Costco's newest product, gold bars. 99.99% pure, one ounce golden bars. $2,000 bucks a bar. They sold out in minutes. We covered it on the pot. They come for the 28 pack of paper towels. They'll leave with the one pack of gold bar. Honey, get the shopping cart and the vault. Oh, here's the update. Costco isn't just selling gold bars, they might be the number one seller of gold bars, like in the country. Get this. New Wells Fargo estimates say that Costco is selling $200 million of gold bars every single month. Now, that's a bulk order. We repeat, Costco sells an estimated 200 million in physical golden bars every month. All right, Jack, carry the one, add the nine. That's $2 billion with a B

dollars in gold bars and a year, if they keep this up. And that's 100,000 bars per month. That's also 138 gold bars every hour if we keep going this as way. Now, why are Costco members snatching up every bar Costco will serve them? Well, gold prices are at an all-time high and nothing investors buy more when they're a little bit scared than gold. The only thing missing on these gold bars is the Kirkland logo. Huge missed opportunity. How did they not stick a Kirkland brand on that gold bar, man? So yeah, these next time you're at the Costco food court, put down the churro and put down the double chunk chocolate cookie bar. Because gold bars are the new chocolate bars. Actually, I don't know what's more expensive these days, man.

Yetis, let's in our three stories. 15 years before this song, two boys from the Northeast met in the dorm. They had an idea to cause a cultural storm. 50% that's a fat tip. Tea Boy City on your at list. If you know, you know, because we're ready to go. We can't wait no more. So just start the show.

First, a quick word from our sponsor. For our first story. Dude, perfect. just did something that no other YouTube creator has ever done. Get this. They raised $100 million from private equity. Because Dude Perfect believes that they're building the next Disney. Jack, if we are going to tell this story, let's go back in time 15 years ago.

Take us to a college dorm room, man. Five college roommates from Texas A&M were just messing around in the backyard. They tossed a basketball from the roof of the house into a hoop that happened to be in the back of a moving, pickup truck. Let me repeat that. One of the guys was on the roof of their house. Another guy was driving a pickup truck that had a basketball hoop in the truck bed. And the guy from the roof shot the basketball and landed it in the moving basketball hoop. The key here, Bessie, is that they recorded all this on a camcorder. They uploaded it to YouTube. And that became the first ever dude perfect video, which got how many YouTube views, Jack? Today, it's racked up 44 million views.

And yet he's that idea. Why else? sports trick shots that anyone can do is what the five dudes of Dude Perfect still do today, and that is their entire business. I just watched a video. They built a mile long Hot Wheels track and attached a camera to the car as it went down the massive track that they built. Jack, I just watched a video where they tossed a bottle onto a trampoline and then landed that bottle onto their buddy Timmy's head.

I made up the Timmy part. These guys are big on bottle flips. This is like the equivalent if we were throwing microphones through hula hoops, Jack. It's crazy. Now, the dudes, they stick to sports, stunts, and trick shots. So it's uncontroversial content. They're not going to get canceled for sticking that landing. But they did bring in $25 million in revenue in 2022. And now Wall Street wants in on that trick shot money. So Dude Perfect just raised $100 million of fresh cash from private equity to turn their YouTube business into a multimedia empire. But yet is, here's what Jack and I found fascinating about

this business. The way Jack and I see it, building. a media company is a lot like building a house, isn't it, Jack? You're always thinking about your next edition. With a media company, even like our media company, you're always trying to add a new addition. Bathroom here, patio there, grill goes over here. But nobody's done it as well as Dude Perfect, because they don't just have a YouTube channel with 60 million subscribers. No, no, no.

Dude Perfect has turned trick shots into multiple business models. Kick it off with sports equipment. Dude Perfect has Dude Perfect branded footballs and a partnership with Nerf. They also have board games. A Dude Perfect bouncy tic-tac toe game. Dude Perfect is even in the food and beverage space. They partnered up with Smoothie King and have the top-selling smoothie there, The Dude Perfect smoothie.

And Dude Perfect's in streaming. Amazon's Thursday night football, Dude Perfect does an alternate telecast of that NFL game. Dude Perfect's next big business model is a theme park. Dude Perfect announced a year and a half ago that they were building Trickshot Town. And it's going to be topped off at 330 feet. We're talking a 330-foot trick-foot trick-es. shot tower while you and your family are going to go and dunk a basketball from basically a skyscraper.

I think you're actually going to just drop the ball and hope that it lands in the basketball hoop 330 feet below. Sit down, stand up and sit back down on the trampoline. These are influencers from YouTube who are basically building influencer worlds. Well, here's what Nick and I think is on page one of Dude Perfect's pitch deck that they've been pitching to investors. Dude Perfect just told investors that they are today what Disney was back in 1935. Perfect says that they are today what Disney was in 1935. A core idea of creativity that will blossom into multiple forms of media distribution. But page two says they have a better proof of concept than Disney Day.

Because Dude Perfect has 60 million subscribers who watch and consume anything they create. Like tossing a microphone through a hula hoop. So, Jagg, what's the takeaway for our buddies over at Dude Perfect? Creators have replaced athletes as the idols of America's youth. That is, again, $100 million private equity check. That's a big check. But here's the story and key statistic that we think convinced private equity to write that check. There's a little paraphrasing here.

But here's what the investor said. When you talk to teenagers and kids that watch the dudes, three out of four of them say that they want to be an influencer or a creator when they grow up. Three out of four kids these days want to be an influencer? That's a big, big shift. Now, when I was a kid, when Nick was a kid, three out of four kids wanted to be athletes when they grew up. Athletes were our idols. Today, it's online creators.

Like, you want to be Kim K, not MJ. Just like the massive media and merchandise businesses that were built around athletes, the same empires are now being built around creators. Because when it comes to money, cash follows the kids. And creators have replaced athletes as the idols of America's youth. For our second story, Bain, the consulting company, just reveals the secret. to a successful acquisition. We got to talk about the dirty secrets of dealmaking.

All right, Jack, if you're going to say that, let's just kick it off of that, man. The dirty secret of dealmaking, what is it, man? Here it is. Most mergers and acquisitions fail. Yeah, there's the idea. Between 60 and 70% of the time, the value is destroyed.

It is not created, and that merger or acquisition didn't work. Two out of three deals, value is destroyed, not created. AOL Time Warner didn't work out. Quicker O, it's a quarter. firing snapple didn't work out. Amazon, they still don't know what to do with Whole Foods. They acquired them years ago. No idea what's going on there. So why do companies still do acquisitions, even though there's a two out of three chance that acquisition is going to fail?

Well, Jack, because CEOs, they need to justify those big paychecks, man. That's right. CEOs need to show the board and shareholders that they're doing something to try to spur some growth. Anything, something. Show me anything, man. And that theory that most M&As fail, it was affirmed back in 2004 by a study from Bain. Bain, the management consulting firm said that 60% of mergers and acquisitions failed to live up to expectations according to the very CEOs who made them. There you have it. 60% of deals are bad deals. But we keep doing them. One sec, one sec, pause the pod, pause the pod, pause the pod.

Jack, we just got an update from Bain. Bain felt this week that they needed to correct the record. Shocking news, but after 20 years, Bain just said the opposite. They said that mergers actually are working. In fact, Bain now says that companies will fail unless they have an active merger and acquisition strategy. Apparently, based on the new data, if you're not acquiring to grow, then you're going to be left behind. Buy or die, baby. And here's the data that Bain felt so convinced by.

From 2000 to 2010, companies that acquired frequently earned 50s. percent higher shareholder returns. From 2010 to 2020, companies that acquire frequently did 130% better in the stock market. Kiss Point Apple has acquired over 100 companies in just six years. Microsoft has acquired 250 companies. But here's the interesting thing, Yetis. It's not just about signing term sheets, is it jack. To properly correct the record, Bain illustrated the tricks of a successful merger

and acquisition strategy. And trick number one. And if you want a successful acquisition, don't acquire to get bigger, acquire to get better. In 2004, Sears merged with Kmart, simply to get bigger. And that mega deal did not work. On the other hand, in 2008, Bank of America acquired Merrill Lynch to get better. They added a brokerage to a bank. And that did work.

Don't acquire to get bigger, acquire to get better. Which leads to rule number two. If you want a good acquisition, go full CIA with complete due diligence before you. buy that company. Before 2004, when deals were bad, acquires would merely look at the financial statements before they bought a company. But now, acquirers are tapping into expert networks. They are literally finding current and ex-employees to get to learn about the company they want to buy. They're finding basically corporate spies, like people who work at like Nestle, and acquirer will pay that person at Nestle to share the dirty secrets of what's really happening

at the company. Like, hey, Darlene from Duncan, what can you tell us about Duncan before we acquire Duncan? If you want to see, successful acquisition, go full CIA and find somebody who works at the company who will spill the beans of what's really happening. But Jack, what is the takeaway for all of our buddies doing mergers and acquisitions? M&A is like a muscle. The more you work it, the stronger it gets. Now, yet he's Jack and I, we've sold our company before. We've spun it out before too. And we've worked with a few internal merger and acquisition people. It's typically the bizdev team. And those biz dev people told us that the key is not just acquiring the right company. It's

integrating that company after you buy them. Okay, here's what they realized. The first company is the hardest to integrate. The second company is the second hardest, and the third company is the third hardest. With each successive deal, biz-dav and management begins to understand their own company better and how to integrate another company better.

And that is why Bain said that undoubtedly, the number one predictor of a successful acquirer is experience. That's why the riskiest deal of all is the big one-off deal from an inexperienced acquirer. Like, picture that AOL. deal where they merged with Time Warner years ago. Didn't work out. It was a big random one-off deal to get bigger and it did not work out.

Because Bestie's merging and acquiring are verbs just like running and lifting. M&A is like a muscle. The more you work it out, the stronger you get. Now a quick word from our sponsor. For our third and final story, TikTok is ignoring threats of getting banned and instead TikTok is about to launch a new Instagram knockoff. That's right. TikTok is about to suck Instagram. Jack, last month, the House of Representatives voted to force TikTok to divest from China or get banned in America.

So for a month, we've been wondering, will the Senate vote to ban TikTok? Momentum's kind of stalled right now. That's the update. So now TikTok's doing what they've been doing in the last four years, assuming that they won't get banned and plowing on with new initiatives. Well, TikTok is actually going on the offensive. In fact, you may have noticed. TikTok's next move. If you're at Ben on TikTok lately, you might have noticed a funny pop-up. Yeah, a weird pop-up on your screen. What do that pop-up say, Jack?

Your existing photos will be shared on a new TikTok app. Bassie's, this is not a joke. This is not a drill. TikTok confirmed that they are working to launch a photo app. So if you've posted photos on TikTok, they're going to migrate them over to this new TikTok photo app. Now, based on the TikTok coding, which Jack and I did not go into, T-Boy style, this new app will be called.

Notes. Huge missed opportunity. Should have been called Tick-Pick. Oh, yeah, or P-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-T-EX. T-T-T-T-T-T-T-T-T-COL-S-E-E-T-E-T-CECK-E-T-E-T-CECK. That means we've come full-CURL-F-E-FECT-E-FECT-E. We've totally come full circle on this, Jack. Because four years ago, Mark Zuckerberg was freaking out from TikTok's growth. So Mark Zuckerberg does what he does best. He zucked TikTok. He copied TikTok's key feature, a vertical feed of short form videos.

They call it Instagram Reels. And that's been the source of Instagram's growth the past four years. All right. So yet, he's just paused the pod for a second. Instagram first zuck TikTok. But now TikTok is zuck in Instagram. Not to get ironic, but how meta is this? That is so meta, Jack.

And why is TikTok doing this? because right now Instagram is beating TikTok. Daddy's last year, Instagram grew by 20%. That is a growth surge. But TikTok's growth slowed to just 4% last year. So after Instagram Zuck TikTok, TikTok is now re-Zuckin Instagram. It's a Zuckfast. So, Jack, what's the takeaway for our buddies over at TikTok?

I mean notes. We have reached late stage social media. Yeties, you know that Spider-Man meme? Like the one where like each of the Sputeman, Spider-Men or staring at each other, the three Spider-Men. That's what this reminds us. Because right now, we're at peak social media. Every social media app has copied the features of all the other social media apps.

This began in 2016 when Instagram copied Snapchat with Instagram stories. And it's being completed now with TikTok copying Instagram's photo feed. Now, interestingly, this copying of each other, it happens eventually in all industries. Well, it sure as it does. You see it in cars, you see it in banks, even streamers. After a few years, everyone starts sucking each other. cars with banks with streamers, they're all pretty much offering the same stuff these days. Because as the best ideas of innovators get emulated, the result is a bunch of lookalikes.

Mature industries. They often result with just a little bit of differentiation between the competitors. Well, on social media, the difference is the algorithm. And that is what will determine which app wins. Whose algorithm will show you just the right videos and pictures to keep you scrolling a little bit longer. Don't shut the app. The social media apps are zucking each other features. We've reached late-stage social media. Jack, can you whip up the takeaways for us for Saviche Wednesday? Dude Perfect has turned silly backyard stunts into what could become the next Disney. Because creators have replaced athletes as the idols of America's youth.

For our second story, for 20 years, the word has been that M&A fails two-thirds of the time. But Bain just corrected the record. Today, companies must acquire to stay ahead. And the more acquiring you do, the better you get. just like a muscle. And our third and final story was TikTok. They're preparing to launch an app that's just like the OG Instagram. It's for photo sharing. Tick to talk on Instagram, which means we've reached late stage social media. But yeties, this pod's not over yet. Here's what else you need to know today. Today we get the celebrity of economic reports. The CPI report comes out today. This reading will determine when the Fed cuts interest rates. If inflation remains stubbornly high, then we'll probably have

higher rates for longer. But if inflation has fallen, maybe the economy is ready for some lower interest rates. And second, Sunday's Iowa versus South Carolina National Championship game averaged 18.7 million viewers. That makes that the most watched basketball game of any kind in five years. That women's college basketball game had more viewers than any basketball game, men or women, pro or college in the last five years. Finally, Jack and I have a UPD-D-A-T-E. Scrabble is changing the rules. For the first time in 75 years, a new version of Scrabble's coming out with easier rules.

Scrabble worries that the game is too intimidating and it needs to become more collaborative. Okay, so Hasbro's new version will let you compete in teams. It'll be easier to play and it'll be faster to play. I'm all forced, man. Because if you sign up to play Scrabble, you're signing up for like an hour and a half of intensity. Jack gets S-T-R-E-D.

It's like golf. Like 18 holes is way too many. Can I play nine instead? Six. Six would be great. We're good with six. So I assume this new Scrabble is like six holes of golf. It's a par three six whole course of Scrabble, chef. I'm all for it, man. I don't even think they have vowels in this one. Now time for the best fact yet. This one sent in by Tommy Chang from lovely Dallas, Texas. Last week, we're the Barkley Marathons in Tennessee. Have you heard of the Barkley Marathons?

Maybe you haven't, but you should know them because this is the most grueling physical competition humans have ever tried. Hardest race in America. Only 20 people have ever even finished these marathons. And here's why. The Barclay Marathons are over 100 miles long and include 63,000 feet of elevation. Nick, that's two Mount Everest's of climbing. You were sprinkled on that context. And people who run it, it typically takes three days. You've like sleep strategically throughout the course, apparently. And last week, the first woman ever finished the historic Barthley Marathon. Jasmine Paris finished this marathon in 59 hours, 58 minutes, and 21 seconds, which is literally 99 seconds before the cutoff. She joins 19 other men who have finished this grueling physical

feet. Yeties, you look fantastic today. If you're at Costco, enjoy the gold bars. And if you're not a Costco, then Jack and I would love your questions for T-Boy High. Send in your questions so that this episode of T-Boy Hotline is the best one yet. Email us at Nick and Jack at T-Boypod.com with your question. In the meantime, keep looking fantastic. If you know, you know, and Jack and I will see you tomorrow. And before we go, congratulations to Yeti Haley Olivares. For the birth of baby number one, Delilah, your hubby Isaiah is loving you in Pueblo, Colorado.

Happy six-year anniversary to Ashley Wendland and Julian Roman in Chicago. And congrats on the new. A subtender job. Keep running. Congratulations to Matt Brooks for opening his first eBay store selling vintage books in Boca Raton. And Sarah E. Yamas is turning 28 years old with a birthday and a new job in her baggy Levi's of San Antonio. Happy ninth birthday to Noah Lapham, a math whiz with a huge heart in Lakeland, Florida. And a happy 20th birthday to Anna Kolakowsky in lovely Louisville, Kentucky. This is Jack. I own stock of Amazon and Disney, and we both own stock of Apple. Microphone through a Huluop was such a funny random example.

It's the stupid thing too can be pretty easy actually.