The Best One Yet - 🐳 “AI’s Goodwill Hunting moment” — China’s DeepSeek Drama. Coke vs Pepsi vs Costco. Unlimited PTO Paradox.

Starting point is 00:00:00 This is Nick. This is Jack. It's Tuesday, T-Boy, Tuesday, January 28th. And today's pod is the best one yet. This is a T-boy. The top three pop business news stories you need to know today. Well, stocks fell big yesterday, Jack. You know why? Your stock market birthday winning streak is over. Well, it's not my birthday week anymore. So it's not my fault. You can't blame me. I had stocks going up for a full week, man. Well, our first story is why stocks fell. Yes, it is. Jack. Three fantastic stories for today's pod. What do we got on the T-Ball? for our first story. Invidia had the biggest single-day loss in stock market history. History. Because it was embarrassed by one Chinese AI app. Besties, we'll tell you what deep seek is and why it reminds us of Goodwill hunting. Great movie. For our second story, Costco just switched from Pepsi to Coke. So we checked in on the most epic rivalry in business. Coke is finally beating Pepsi, and there is one fun reason why. And our third and final story. Unlimited paid time off was once the ultimate work for, but now, ultimate, it's the most resented. It's the PTO paradox. Unlimited is actually highly limited. It feels really constrained in here.

Starting point is 00:01:14 But yet, he's, before we hit that wonderful mix of stories, Jack. Fantastic mix of stories, Jack. All right, Nick, we're kicking off today with a guessing game. I've got the best idea yet box. And inside is the product we're covering in this week's episode. I got three clues, and you have to guess the iconic product. Bring it on, Jack. What do we got? Clue number one. This product was initially made for Thai truck drivers. Ah, was it spicy? Maybe something for your back? Maybe helps out, long rides. Decent gas, but now, clue number two, it's a drink, but it's better known for extreme sports. Definitely spicy. It's got to be spicy. No, it's not spicy. Clue number three, it gives you wins. It has got to be Red Ball. It's got to be Red Bull. But yeties, here's the twist. Red Bull almost didn't

Starting point is 00:01:59 happened and it actually got banned in the entire country of France in the 1990s. But one bold bet and one genius marketer turned this into a billion dollar brand. Red Bull is now bigger than Chipotle. And yet Red Bull only sells one product. So what's the secret that made Red Bull dominate the world? To find out, you'll have to listen to the best idea yet, our weekly show on the products you're obsessed with. New episodes drop every Tuesday. Click the link in today's episode description. Nick, hold the vodka because you got to listen to the wild, I'm told story. of Red Bull. Here you go.

Starting point is 00:02:33 Oh, thanks, man. Before you dive into that, let's jump into today's T-Boy. Let's hit our three stories. Let's hit him, Jack. Cheers. Fifteen years before this song, two boys from the Northeast met in the dorm.

Starting point is 00:02:44 They had an idea to cause a cultural storm. It's the best one yet, but the best is a norm. Jack Nick, that's it. I don't even think they need to practice. 50%, that's a fat tip. Tea Boy City on your at list. If you know, you know, because we're rich.

Starting point is 00:02:59 go. We can't wait no more, so just start the show. First, a quick word from our sponsor. Our first story. One Chinese AI app shocked the world yesterday. It's as good as American AI, but at a fraction of the cost. That one app wiped out a trillion dollars from U.S. stocks, and it reminds us of Goodwill hunting. Goodwill hunting. Goodwill hunting. Great movie. But Jack, in order to tell this story, can you transport us back to the Cold War, in 1957, what was happening. The Soviet Union launched the first satellite ever.

Starting point is 00:03:48 They did. The first man-made thing to send up into space and have it orbit the earth. It was called Sputnik. Sputnik. And America was stunned. Ever since we developed the world's first atomic bomb, we had a feeling that we were the technological leaders of the world in all cutting-edge technology. Until Sputnik.

Starting point is 00:04:09 And 70 years later, Deepseek is. is AI's Sputnik moment. That's right. And those are the words of venture capitalist Mark Andresen. He just said it yesterday and it is big. Deepseek is a Chinese AI chatbot that was launched just last week, but it's already number one in the app store. And Jack, what's even wilder than this app already hitting number one? Experts say that China's chatbot, deep seek, is just as good as America's best chatbot chat GPT. Sit down, stand up and program that again across San Francisco. This This was the topic of every brunch conversation from like the marina to Menlo Park. It's a Sputnik moment.

Starting point is 00:04:47 It's a huge wake-up call for the tech sector. And also, it's a blow to our sense of American superiority. Oh, and the scariest part of this story for America's AI industry, China is doing it for cheap. China just created maybe the most powerful AI tech in the world, and they did it without any Nvidia chips. Because remember, the Biden administration, they blocked the export of our best chips to China. So Deepseek is performing AI not with Nvidia's $40,000 chips, but with very cheap, basic semiconductor chips. Like the freidos of chips.

Starting point is 00:05:24 So Silicon Valley built ChatsyPT, Gemini, and Claude thanks to hundreds of billions of dollars on advanced AI chips. But China just built the same exact AI thing with the reported $6 million. That's it. Open AI, Google, Microsoft, and Meta, they spent a hundred times more dollars. than that to build their AI. It's like we've been building this rocket chip with our best, brightest, and biggest budgets. China just build a rocket chip with half the talent and a bunch of wood. It's an impressive feat by China, to be honest. And honestly, it kind of reminds us of one of our favorite movies, doesn't it, Jack? This is like Matt Damon's character in Goodwell Hunting.

Starting point is 00:06:01 It's totally like Matt Damon's character. He gets the same education as all those Harvard students, but he does it with just a library guy. How do you like them apples? In this case, open AI is the fancy Harvard student, Deep Seek is Matt Damon. I think it's pronounced, Jack. Deep Seek is Matt Freggin' Damon. Now, we should sprinkle on a caveat here. To us, this seems unbelievable. That China could develop this powerful AI with such little money and such few resources. But Wall Street, they announced on Monday through their stock trading that they think the story is true. And that led us to a takeaway. So Jack, what's the takeaway for our buddies over in artificial intelligence. This is good for AI, but terrible for the AI industry. Now, yet it is,

Starting point is 00:06:46 why was Nvidia worth $3.5 trillion? Well, because cutting edge AI required Nvidia's fancy computer chips. But after this deep seek story, that doesn't appear true anymore. No, it doesn't. China just built advanced AI with basic computer chips. The result? Invidia's stock plummeted 17% on Monday. That is the biggest single-day drop in value for a single company in history. InVitya lost $600 billion of stock market value on Monday. That's more value than Goldman Sachs, Disney Corporation, and McDonald's combined. Oh, and by the way, other chipmakers like Broadcom, Arm, Oracle, they plummeted to a total of $1 trillion gone from one Chinese app.

Starting point is 00:07:33 But here's the nuance Nick and I wanted to share. This news is not bad for all of tech. In fact, Apple actually rose on the stock market on Monday. Why did Apple rise but NVIDIA plummet? Well, Apple is not building their own AI. So maybe with this low-cost Chinese provider, they can get AI onto everybody's iPhones at a lower price. Yeah, Jack, like if Chinese AI can lower the price dramatically, maybe more companies could embed AI in their products like Apple. So China's deep-seek breakthrough, it shows that the hard hardware companies we thought were essential for AI may actually not be at all. And that is good for AI overall, but terrible for the AI industry. For our second story, Costco's food court just made the

Starting point is 00:08:23 biggest switcheroo in beverage from Pepsi to Coke. So we examined the Coke versus Pepsi rivalry because there is now one clear winner. And there is one reason why. But yet is if you were at a local Costco last weekend, you made a notice some drama over in the food court. It wasn't the chicken bake or the churros or that one person got ran over by the gigantic Costco shopping carts. Those were quite like a commercials driver's license. Wide load coming through. No Yetty's after a decade of exclusivity to Pepsi products, Costco's food court is switching over to Coke. To Pepsi fans, this was treason. It was. This was backstabbing. This was the Benedict Arnold move of beverages. On the other hand, to the cocaholics out there, this was redemption.

Starting point is 00:09:11 Because the next time you grab a $1.50 cent hot dog and soda combo at Costco with a double chunk chocolate chip cookie. It's going to come with a cocker or a Sprite, not a Pepsiure Mountain Dew. And this is a big deal because, Jack, what were the numbers we discovered on Costco's food court business? It does a billion dollars in revenue, which is on par with the entire chain of Shake. That's right. So this is the biggest switcheroo in the beverage industry since Jesus turned water into wine. I think we can legally say that, Jack. Legally, yes. Culturally, maybe not now that I think about it.

Starting point is 00:09:41 But yet is this got Jack and I'm curious. So we jumped in T-boy style. What is the status of the epic Coke versus Pepsi rivalry? After all, it's become the generic term for any type of business rivalry. Coke versus Pepsi. It's the Coke versus Pepsi of, you know, self-driving cars. Because Coke and Pepsi go back to the 1800s. Well, what do we discover, Jack?

Starting point is 00:10:03 Pepsi stock is beating Coke's stock because, Pepsi has a thriving snacks business. So yes, Pepsi is winning the snack battle, but it is losing the soda war. Here's the deal. Pepsi's market share for soda in America hit an all-time high back in 1995 when they had 16% of America's soda consumption. Jack and I were young, soda was cool, but Pepsi was neat, it was young, it was hip, it was rebellious. Pepsi was the top sponsor of MTV, actually. Carson Daly, he was chugging Pepsi three times a day over at spring break. next to Carmen Electric. Yeah, that's right. Hey, Busta, we're going to need another round. But since 1995, Pepsi's market share has steadily declined. Now it's just half of what it used to be. Just 8% of America's soda is Pepsi products.

Starting point is 00:10:47 In fact, last year, Pepsi got passed by old Dr. Pepper in a really awkward moment. Meanwhile, for 30 straight years, Coca-Cola has been number one in soda, maintaining a solid and steady 20% of the market. In fact, regular Coke is bigger in America than Pepsi. and diet Pepsi. You ready, Jack? Combined. So now Coke is slow dancing with Costco at prom, and Pepsi is standing in the corner feeling really sad that they even came to the dance. I think Coke and Costco are like making out right now, dude. And why is Coke finally beating Pepsi so badly? Legally, I think we could say that, no, but culturally, again, maybe not.

Starting point is 00:11:27 I'm over to Jack. So Jack, what's the takeaway for our buddies over at Coke and Pepsi? Remember, the customer is buying you, not your celebrities. Yeties, how has Coke beaten Pepsi for the last 30 years? Well, two different marketing strategies explain it all. Since it's high back in 1995, Pepsi has focused its marketing on celebrities. It's the brand that hangs out with the cool kids. Yeah, Brittany Spears, Michael Jackson, Shakira, Beyonce, Cindy Crawford. Jack, remember the Kendall Jenner drama a couple years ago?

Starting point is 00:11:59 I do. Pepsi wishes I didn't. But while Pepsi, I don't. focused on other people holding Pepsi cans in their commercials. Coca-Cola's marketing has focused on itself. Right. Coca-Cola ads never feature celebrities. Instead, they always focus on Coke's core value prop. It's refreshing. It's classic and it's nostalgic. Coca-Cola, it focuses on polar bears, not pop stars. Soda, not celebrities. Santa Claus, not Santa Kardashian. In an industry dependent on advertising, like soda is, Coca-Cola's core strategy one. Pepsi, they tried to be Cool by association. Coke just tried to be itself.

Starting point is 00:12:37 That's how you win in soda and it's how you win on the dance floor. That's how Coke beat Pepsi. Now a quick word from our sponsor. For our third and final story, unlimited PTO, unlimited vacation, unlimited holiday. It used to be the ultimate work perk. But we'll tell you why it's all backfired. And we'll tell you what the magic vacation number really is. One sec, Jack, sorry, I'm just checking the Google calendar here, and it looks like we got to Zoom at 3 p.m., a slack at 7 p.m., and I think someone was in the Google Doc leaving comments at 2 a.m.?

Starting point is 00:13:16 Who is anonymous antelope? Frank from finance. It's him every time, Jack. Yeah, these technology has enabled workers to be always on call. So in response, some companies have adopted unlimited paid time off to compensate for you always being on call. In fact, right now in America, a record number of companies offer unlimited paid. time off. That is right. 7% of all employees work at a company with no cap on vacations. Jack, can you sprinkle on some context for us over there, please? 7% is up 7x from 10 years ago when just 1% of companies offered unlimited paid time off. Oh, if you're telling your parents about this, they don't know because they had to walk uphill three ways 12 days a week with zero vacation,

Starting point is 00:14:00 actually negative vacation days. But today, if you work at one of these companies and you're going to Bali with a buddy this summer, you can do it for, a month. Or Jack, if you're going to Tulum for one week, make it two weeks. Oh, put time on my calendar. Sir, your calendar's blocked for the whole month of August. Yeah, because I'm on Block Island. But yet is this is what Jack and I find fascinating about this story. The reality of unlimited paid time off is more complicated than you realize. In fact, the more paid time off is offered, the less time people actually take. Yeah, Jack and I call this the paid time off paradox. The PTO paradox. This is insane. Studies show that workers with unlimited paid time off take less vacation

Starting point is 00:14:41 days than those with limited paid time off. Wild. And there are three reasons why. The first is the reality of working out a startup. Yeah. If your company offers unlimited paid time off, chances are they're a smaller company. But here's the problem. You can't take those two weeks in Tulum if you're on the sales team because at a startup, you are the sales team. You're the only one work in sales. Like the whole company will shut down if you're gone. You have the title, head of sales, but you're the only one in sales. Okay. So that's the first reason for the PTO paradox. The second reason is reputational guilt. You're simply worried what people will think if you take off too much time. Full disclosure, we've all felt this. Your startup has a hustle culture. Everyone's

Starting point is 00:15:20 racing to be first in last out. You don't want to be the one noticeably still in Santorini. And the third reason you don't take that much time with unlimited paid time off is the approval process. Yeah, you still need manager approval to take that time off, which gets awkward. when you're asking. Oh, you want to take three weeks off in August? Yeah. Your colleague Danny's only taken three days, but okay, I'll approve it. See how that does in your performance review at the end of the year. You're going to miss a couple one-on-ones. Three one-on-ones. That's interesting. So it turns out people with unlimited paid time off, on average, actually take 16 days off. We repeat, you could technically take 365 days off, but in reality,

Starting point is 00:16:00 you take 16 days off on average. The Wall Street Journal found that 16 days is the magic number, that most people with unlimited paid time off actually take. 16 is the magic number, but we've got a better number. So, Jack, what's the takeaway for our buddies who are everyone working in America? The best work perk isn't unlimited vacation. It's mandatory vacation. So Yeti's unlimited PTO actually turns into 16 days PTO. But the wildest part, it's that that's low from a global perspective. Over in Austria, France, Spain, the United Kingdom, and Germany, all five of those European countries

Starting point is 00:16:40 have a minimum of 20 days you must take required by law. Now, we know what you're thinking? People in Europe that don't work as much as Americans, but still, we're talking right now about an unlimited vacation perk that we don't even capitalize on. So the most generous vacation policy in America, in theory, is among the least generous in practice. But one solution to the PTO paradox that Jack and I found, we discovered from working in finance. Mandatory time off. Mandatory time off.

Starting point is 00:17:08 Every year for 10 days in a row, you had to take vacation if you worked at a bank. Yeah, we were going to have banks and we weren't allowed back in the building. Like, you had to take time off. It was mandatory. Now, that was partly so the workers wouldn't get burnout, but also partly because your bank

Starting point is 00:17:25 went through your computer while you were gone to make sure you hadn't set up some kind of a Ponzi scheme. I wanted to double check you weren't Bernie Madoffing the whole division over there, Jack. Still, 10 days of mandatory paid time off set a minimum that nobody would feel guilty taking off. Besties, right now, most of America has a maximum number of vacation days. But maybe, just maybe, we need a minimum number of vacation days, like in banking. Americans need more vacation. Unlimited vacation doesn't solve that.

Starting point is 00:17:54 Mandatory vacation might. Jack, could you whip up the takeaways for us for T-Boy Tuesday? Deep Seek is China's world-class AI app. and it's a goodwill hunting moment for the AI industry. Deep Seek crushed the U.S. stock market. It's actually good for AI overall, but it's terrible for the AI industry. For our second story, after 10 years of only Pepsi products in the food court, Costco is switching back to Coke.

Starting point is 00:18:21 Coke is beaten Pepsi because customers buy your product, not your celebrities. They want to be friends with you, not friends with your friends. And finally, unlimited PTO is very limited in practice due to guilt, hustle culture, and the realities are working out of startup. But the best work perk, it isn't unlimited PTO. It's mandatory PTO. But Yeties, this pod's not over yet. Here's what else you need to know today.

Starting point is 00:18:46 First, President Trump is claiming victory in his first terror fight of his second administration. Over the weekend, the USA imposed tariffs on Little Columbia down in South America. But after less than a day, actually, like after less than an hour, Colombia offered to accept deportees in exchange for lifting tariffs. So Trump used the pain of tariffs to extract concessions on immigration. Like we said, tariffs as negotiating tactic.

Starting point is 00:19:10 And second, one million Americans who aren't expecting it are about to get a big, fat check from the IRS. One million Americans were eligible for a pandemic stimulus check, but didn't claim it back in 2021. So they're expected to be as high as $1,400 per person. You'll just get an automatic payment from the IRS, a million of you. Feels like a nationwide lottery with a million winners. Congrats if you get one in February. And finally, remember that record cold last week?

Starting point is 00:19:37 Like it snowed down in New Orleans on Bourbon Street? Well, it made airplanes go faster. Airplanes set record air speeds of over 800 miles per hour as they crossed the Atlantic last week. That's right, because the bitter cold made the jet stream move faster, so it gave an extra tailwind to all those airplanes. The result, airplanes went 20% faster than usual, because it was that freaking cold.

Starting point is 00:20:04 And then your plane waited at the gate for two hours, so you actually got off two hours late. Now time for the best fact yet. This one sent in by Rachel down in lovely Flagstaff, Arizona. Last week we mentioned Pluto. Yeah, the planet Pluto. We were talking about the five second rule. Remember, Jack?

Starting point is 00:20:20 There's no more five second rule. Things that were taken away from us, like Pluto, the planet. Yeah, no, that may make you sad, but it's even sadder for Flagstaff, Arizona, because Pluto the planet, no longer a planet, was first discovered in Flagstaff, Arizona, 1930. Here's the criteria for something to be officially a planet. It must orbit the sun. It must be round or nearly round.

Starting point is 00:20:41 Check. And it must be orbiting on its own. It can't just hitch a ride from like an asteroid. Herein lies the problem. Pluto failed the third rule because Pluto shares its orbit with other objects in the Cooper belt. Which is why scientists downgraded Pluto from planet to dwarf planet. And it's why Flagstaff, Arizona doesn't welcome those scientists anymore. Ladies, you look fantastic for T-Boy Tuesday.

Starting point is 00:21:10 But now that you finish this pod, we've got the perfect thing for you to listen to next. And what is that, Jack? The best idea yet. It's our second show, deep dive 45-minute episodes. They're incredible. Okay, this week's episode, it's on Red Bull. Wild Origin Story. It involves a toothpaste salesman and like a chemist in Thailand selling a truck driver.

Starting point is 00:21:30 It's wild. We got a link in the episode description. We'd love if you check it out. So check out the best idea yet to hear the untold origin story of Red Bull. Jack and I. We'll see you there. And before we go, a happy birthday to legendary Yeti, Sarah Zuccaro in Las Gattas, California. Also, she just earned her California life and health insurance license.

Starting point is 00:21:53 Congrats. Fantastic. Happy birthday to Valerie in Rockford, Michigan, just outside Grand Rapids. And Trent Wisco is turning 49 years old in Greenbush, Minnesota, with the best birthday yet. Happy birthday to Kamal Khan in Novi, Michigan. And a shout out to Marcus A in Dallas, Texas, who wants us to record a hotline episode on financing for parents. Comment in this episode if you agree.

Starting point is 00:22:14 Maybe Jack we whip one of those up. Wow, that's not a bad idea. And get this, Jack. Danny Gole and his wife Candy love Reese's so much that she got a Reese's barcode as a tattoo on her neck. And if you scan it, it comes up as Reese's. Does it really? It really does. It really does.

Starting point is 00:22:33 from the best idea yet. I know Candy did. Candy absolutely did. And to anyone else who's celebrating something today, make it a T-boy. Celebrate the wins. This is Jack. I own stock of Disney. Nick owns stock of Shake Shack, and we both own stock and Apple.

The Best One Yet - 🐳 “AI’s Goodwill Hunting moment” — China’s DeepSeek Drama. Coke vs Pepsi vs Costco. Unlimited PTO Paradox.

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