The Best One Yet - 🩵 “Blue Light Special” — Kmart’s innovation #RIP. Visa’s monopoly lawsuit. Goldman’s HQ apartments.

Episode Date: September 25, 2024

The last Kmart store is closing… But our Kmart obituary highlights their wild history of innovation.Visa just got sued for allegedly abusing its credit card dominance… Because it’s charging 2% on everything.Goldman Sachs will now let you live in their former HQ… The bank’s cubicles are becoming condos.Plus, we just got 8 new emoji… but they’re not gonna cheer you up.$GS $AMZN $KMRT—-----------------------------------------------------GET ON THE POD: Submit a shoutout or fact: https://tboypod.com/shoutouts FOR MORE NICK & JACK: Newsletter: https://tboypod.com/newsletter Connect with Nick: https://www.linkedin.com/in/nicolas-martell/ Connect with Jack: https://www.linkedin.com/in/jack-crivici-kramer/ SOCIALS:Instagram: https://www.instagram.com/tboypod TikTok: https://www.tiktok.com/@tboypodYouTube: https://www.youtube.com/@tboypod Anything else: https://tboypod.com/  Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. It's Wednesday, so VJ Wednesday, September 25th. 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. One sec, Jack, I'm checking the compass and it says we are north by north. We're in the Pacific Northwest, aren't we? I'm climbing a tree like a lemur. Jack and I just landed in lovely Seattle. It is glowing right now. We're here for a live show this week. We're potting together all week. Great to see you, man. In the meantime, we whipped up three fantastic stories on the plane for today's pod. What do we got, Jack? For our first story, Visa was just sued by the U.S. Department of Justice for being a credit card payments monopoly. Visa just showed us how jacked it is as a middleman. For our second story, the last Kmart store in America is about to close. But Jack and I discovered that Kmart is, shockingly, the most innovative store in his. So we wrote an obituary. But it's like a very nice obituary. And our third and final story,

you can now live in the former headquarters of Goldman Sachs. Yesterday, we told you about Costco apartments. Today, we'll tell you about Goldman apartments. But Yeties, before we hit that fantastic mix of stories. One second, I got to pay DJ Solomon a little bit of rent. I got your rent check, man. The most international language understood across the world, it's not English, Spanish, or Chinese. The most international language is emoji. Emoji are universal. Emoji, nothing transcends the language barriers

quite like that little cute burrito icon. That little green lizard emoji, it's going to make you laugh whatever race, religion, or creed. But here's the news. There are eight new emoji that were just approved. In the next couple months,

your devices are going to add eight new emoji to the menu. Jack, let's jump in T-boy style. What are the eight new emoji coming to all of our fingertips? A beach? a shovel, a harp, a dead-looking tree. I'm intrigued. What are the final four?

A purple splatving, a thumbprint, and then a new flag for Sark, the tiny British island in the English Channel. And the eighth and final new emoji is an exhausted face with bags under its eyes. So starting next year, you can finally send that one sentence you've been dying to send your mom with just emoji. Hey mom, I'm exhaustedly playing the harp while eating a beat under a dead tree on the English. Island of Sars. I've never even heard of the English island of Sart. Well, now that there's emoji, you better get to know it, Jack. But honestly, Yetis, that's not the brightest new crop of emoji, is it?

I mean, Jack and I were looking at these new emoji. A dead tree? It's actually supposed to be a symbol for climate change, but it's a dead tree. And beats? I mean, I love thinking about Dwight True. Yeah, but it's Dwight True. But it's a root vegetable. That's not a crowd pleaser.

And Jack, the exhausted phase is an exhausted phase. So, Yeties, which emoji do you think? think are still missing from the menu? Because Jack and I have been keeping track on our whiteboard, and we got some emoji. Did you know there's no lime emoji? Did you know there's no escalator emoji? How come there's no cargo pants emoji? What do we got to do for a khaki pants emoji? Beats, Bears, Battlestar Galactic. If you know, you know, let's hit our three stories, Jack. Fifteen years before this song, two boys from the Northeast met in the dorm. They had an idea to cause a cultural storm. It's the best one yet, but the best is a norm. 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 ready to go. We can't wait no more. So just start the show. Start the show. First, a quick word from our sponsor.

Our first story, Visa was just sued for being the world's biggest financial toll booth and allegedly abusing that power. Visa, it's everywhere you want to be, even if you don't want it to be. Which, you have to hear the story. You do not want them to be here. Now, yet he's Jack and I. We've jumped on T-Boy style to a bunch of legal lawsuits in business, but this may be the most evil-sounding allegation we've heard in years.

According to the Attorney General Merrick Garland, visa set up in a legal monopoly that led to all Americans paying more on nearly everything. You paid more on nearly everything because of visa, and that is why the Department of Justice is suing the payments company. The United States of America versus. This visa. Sounds like a Hollywood film. I'm trying to think who it's star in it. I feel like Zendaya could be in this. That makes no sense. Well, Visa, it is actually the largest payment network in the world. Jack, can you spring along the numbers, please? 60% of all debit and credit card swipes happen on the Visa payment network. I mean, America runs on Duncan, but our financial system runs on Visa.

It's like the flu network for finance. If you're looking for a man in finance with a trust fund who's 6-5 in his blue eyes, he probably works at Visa. when you hear those numbers. Because Visa charges a swipe fee every single time. That's right. As cash payments die out and credit card payments take over, Visa's stock has surged. Cute top, Visa charged a fee for it. A swipe fee. And Visa and MasterCard combined are now worth $1 trillion. Combined, they'd be the eighth biggest company in the world. Nick, Visa is the most valuable finance company on earth. But despite Write those impressive numbers, Visa stock fell 5% yesterday on this epic Justice Department lawsuit. Visa. It's not somewhere you want to be. They do not want to be here right now. I'm going to make a different version of that joke two more times.

You know, I like the way you're intonating it, Jack, and I think you get a third in you. But Yeties, remember what Jack and I have told you about monopolies. It's not illegal to become a monopoly. It's illegal to abuse your monopoly status. And the U.S. government says visas abused their monopoly. Yes, they do. They say that Visa punishes merchants that dare to try out a different payments network. Jack, let's say Ronald McDonald wants to dabble with a new payments network when you buy a happy meal out there. Visa dabbles with Discover Card. Visa will jack up the fees McDonald's pays to keep McDonald's in line. So the government says that that kind of bullying prevents startups from cracking into the financial payment space.

Of course, these are all allegations. The government has to prove them in court. Now, if we had a competitive marketplace, then Visa would, be able to charge 2 to 3% on merchants every time you swipe your card to buy that Q-top. That 2 to 3% merchant fee, it's effectively a tax that we all pay on everything because the merchants pass that fee back to us in their prices. So Visa basically charges a tax on everything we buy, and that tax is revenue for Visa. Nick, it's $7 billion a year of Visa's revenue. That's right. Visa is making $7 billion.

billion bucks in revenue just on the credit card fees and the merchant fees from your swipes and your buys. Because that network is so massive, they have the power to charge 3% on every transaction. So Jack, what's the takeaway for our buddies over at Visa? We're experiencing a great crackdown on corporate toll booths. Yadies, as our economy becomes more and more and more and more digital, giant middlemen have emerged. And for years, those massive middlemen, men have taken a bigger and bigger fee. Resort fees, convenience fees, and fee fees. But in recent years, antitrust regulators are finally cracking down on those toll boost. Ticketmaster is a middleman between you and your Taylor Swift tickets, but it got sued by the Department of Justice this year

for bogus fees. Apple's App Store is a middleman between you and apps, and they got sued by the U.S. and Europe for their 30% app store fee. And now Visa is being sued as the middleman between you and everything you pay for with a credit card. Because middlemen are tollboos with monopolies on the road of commerce that demand a giant fee. And regulators are finally cracking down on those corporate tollboos. No more quarters. For our second story, Kmart is closing its final store after 125 years. So we researched the heck out of Kmart's history.

We were spent all right on it. Kmart is one of the most innovative stores in American history. That's right. The most innovative store in America, Jack just said. I said one of them. Now, Yeti's Jack and I were brainstorming on our flight over to Seattle. And we have this new idea. Here's what it is. Here's what it is. It's the Mall of Fame. A Hall of Fame, but for mall brands. You know, like Antian, Zabercrombie and Fitch, Borders Bookstores. Spenser's Gifts. Classic. Brookstone. Lovely. But if you're going to draw up a Mall of Fame, then the iconic department store that would be in it is Kmart. Because it was the first big box store. founded in 1890 in the city of Detroit by a man named S.S. Creschi.

That's right. And he named it Kmart because no one could pronounce the name Cresti. I don't even think I said it correctly just now. A true unverified story. But 20 years ago, Kmart merged with Sears to become the third largest retailer in America and it was big. It merged 20 years ago because neither Sears nor Kmart could survive against Target and Walmart. So together they were doing $55 billion in sales hoping to $2,000. turn things around. But they didn't. Because of the last 20 years, competition has only gotten fiercer with Amazon in the game. And here's the news. After its peak of 2000 Kmart's, now there's

just one left on Long Island. In Bridgehampton, New York. Soon, there's going to be zero. Because that location is closing and it will be the end of the Kmart stores. Pour out some dish soap for Kmart. We need some pallbearers to carry the shopping cart. We just had an accidental moment of silence, but works, Jack. Let's leave it in the pot. But attention, Kmart shoppers. We have an announcement to make. Kmart was actually a shocking early innovator of a lot of retail brilliance. Wait until you hear this, Yeties. Although we should point out, Kmart wasn't that good at that many things. You know, it wasn't the best. Yeah, no, business school is doing a case study on Kmart's brilliance. No, no, no, no, no, no. But Kmart did have a big marketing heart. It was willing to

try anything and it would try it early. We were shocked by this, but one of the first companies to experiment with exclusive influencer partnerships was Kmart. In the 1970s, right after Star Wars became a thing, you could only get the first Star Wars toys at Kmart. They were exclusive to Kmart. And in the late 1980s, Martha Stewart's home goods were only available at Kmart. After Shaquille O'Neal left Reebok to find another shoe deal, you could only get those affordable Shaquille O'Neal sneakers at Kmart. Get this, go back to Y2K. What was the shocking thing we discovered about their e-commerce division? Websites were like a new thing. Yeah, they were one of the first chains to offer a website. It was called bluelight.com. More on blue light in a second, by the way.

Another impressive statistic about Kmart. Mark Cuban worked there in the 1980s. He did. He was a cashier. That was like one of their earliest innovations, training Mark Cuban. Yeti's the core stuff that wins big box retail, price, logistics, efficiency, supply chain, Kmart fell behind on all of it. And yet, there was one innovation Kmart had that was bigger than all the rest. So Jack, what's the takeaway for our buddies over at Kmart? The Blue Light Special. Kmart mastered the art of spontaneous scarcity.

Yet is Kmart's greatest innovation? It was actually a flashing blue light. It's called the Blue Light Special. Ask your parents about it. You'd know there's a blue light special happening because there's a pole sticking up way over there in Kmart. What's going out of you? Attention Kmart shoppers.

There is a blue light special over in Isle 6. All the shoppers would run over to that blue light to see what was like 80% off over there. For 15 minutes precisely, there would be surprised deep discounts on unexpected products and shoppers dashed over. Their animal instincts would take over because I want that foot massager

from my living room. Jack, 40% off a lufus and conditioner in Isle 6. It was wild. And Jack and I think that no retail strategy hits on more behavioral economic psychology than that Blue Light Special. Kmart's Blue Light Special created scarcity because it was only 15 minutes, which drove impulse buys and splurge. And it created novelty with a treasure hunt of experiential retail that drove further loyalty.

Sounded fun. And since it was invented back in 1960, the Blue Light Special eventually attracted shoppers who came back for nostalgia. They came back just to sprint over to that blue light. Sebastian's, Kmart's gone. But we'll remember the wild, spontaneous scarcity of the blue light special. Now a quick word from our sponsor.

For our third and final story, you can now live in the former headquarters of Goldman Sachs, because it's getting turned into an apartment building. This story is about what one developer is calling slums for the rich. Now, yeties, yesterday we covered California's solution to its housing crisis. We covered the Costco apartment.

The Kirkland condo. The Kirkland condo. It sounded lovely over in California. Now we're moving over to the state of New York, the city of New York, actually, for Goldman Sachs. The Goldman Sachs apartment. Yet these Goldman bankers, they buy and sell companies, buy and sell stocks, buy and sell bonds like its last call at B-Barr. Goldman Sachs still looks really good on a resume. Yes, it does. But now Goldman Sachs can look good on your housing history. Because 55 Broad Street in downtown Manhattan used to be the trading floor for Goldman Sachs.

It's 0.1 miles away from the stock exchange and 0.1 miles away from Francis Tavern. I was glad you're going to say sweet green, but we'll go in Francis Tavern. But here's the news, yeties. That old trading floor for Goldman is being converted into 541 apartments. Starting up $4,000 bucks a month, you can rent an apartment in Goldman's former headquarters. That's right. You can look behind the fridge and find, oh, Jack, there's a financial model just left behind the fridge. And you can brush your teeth amid the ghosts of bonus seasons past. One sec, Jack, I got to call a plumber because I'm turning on the sink and all that's coming out is discounted cash flow. Yet is the hottest real estate trend in New York City is not the open kitchen concept.

It's converting office buildings into apartments. cubicles to condos like Goldman's trading floor into apartments. Because Yeti's New York City has too many offices. 20% of commercial buildings are empty in New York City. But at the same time, New York City has not nearly enough apartments. The median one-bedroom rent just hit an insane all-time high of $5,000 a month. So, architects and developers are approaching landlords and offering to make the switch for them. They all switcheroo.

AIG, the insurance company, their former Lower Manhattan office. office is transforming into 1,000 apartments. Pfizer, the pharmaceutical company used to have a midtown headquarters building that's now becoming 1,500 apartments. In fact, get this, half of all real estate development in Manhattan right now is office to residence conversion. I love it. It's amazing. It's a brilliant fix of two problems. Yeah, just don't worry about that fridge with the financial sheets behind it. Because Manhattan has the equivalent of 35 Empire State buildings worth of empty office space. And so the city is given developers tax breaks and fast approval to convert those spaces into housing. Nobody wants empty Empire State buildings. No. Especially when you're living in a closet because

you can't afford rent. Although it would be fun to go up and down the elevator being the only one living in one of those Empire State buildings. It looks like a Christmas tree. But yet is there is one catch to the cubicle to condo conversion. Turning a trading floor into an apartment complex, it's not as easy as it looks. So Jack, what's the takeaway for all our buddies living in the Goldman Sachs apartments. Former offices in New York are becoming slums for the rich. Yet he's converting cubicles to condos sounds like the perfect solution for New York City or for any city. After all, it's faster and 40% cheaper than building a brand new apartment building would be. But logistically, it's more challenging than you

realize. For example, offices are thick, soulless rectangles. Not ideal for a residency. A one-bedroom apartment may get some sun after it's converted, but the rest of that apartment is probably windowless. And office buildings? Picture an office building bathroom. One giant bathroom next to the elevators with 20 toilets. That's not how residential buildings were. No, each apartment would need its own bathroom. And it is expensive to retrofit the piping to turn one big office bathroom into a smaller apartment bathroom. That's why there's an interesting solution for these conversions. Yeah, yeah. Turn them into student dorm buildings. dormitories. The next empty office should be an NYU dorm. They're used to co-ed bathrooms all in one place.

Or as one developer told New Yorker magazine, office conversions are slums for the rich. This developer said that the top clientele for their converted office projects are city hopping 23-year-olds who are in New York just for a year or two. Our demographic doesn't cook is how he put it. They order delivery so a kitchen can be as small as a closet. All these people are trying to do is save a few bucks so they can party a little bit more at B-Barr. So converting a cubicle to a condo is harder than it looks, but it's perfect for dorm rooms and first-year analysts. New York City's former office buildings are becoming slums for the rich.

Jack, could you whip up the takeaways for us for Saviche Wednesday? Visa was sued by the U.S. Department of Justice and 16 states for abusing a payments monopoly as a middleman. Regulators are cracking down on the corporate toll booth. For our second story, Kmart, their final superstore location, on Long Island closes October 20th. It's the end of an innovative era. They're more innovative than you realize. We appreciated Kmart's Blue Light Special, capturing the art of spontaneous scarcity. And finally, the former Goldman Sachs headquarters is now leasing apartments as New York converts

empty cubicles into condos. Former offices are becoming slums for the rich. But Yeties, this pod's not over yet. Here's what else you need to know today. Every kiss begins with Pandora, who announced that all jewelry that they sell, starting today, will use recycled silver and gold. This will save 58,000 tons of carbon a year compared to if they mined the metal fresh from the earth. Pandora sells more than 100 million pieces of jewelry every year, and now all of it is going to be recycled metal. Gold, it's a lot easier to recycle than plastic, apparently. And Sam Altman just wrote an open letter blog post with just huge claims about our artificial intelligence. This is the CEO of Open AI. He said that deep learning worked. He said that

super intelligence may be a few thousand days away, and he predicted astounding triumphs will incrementally become commonplace. Oh, in case if you're doing the calculation in your head, a few thousand days is equal to like at least 10 years. Who describes 10 years as a few thousand days? And finally, today is the day that Zuck has been waiting for all year. It's Meta's Connect. day. It's meta's big product unveil and it's expected to launch another generation of AI sunglasses. We're expecting them to

be revealed and there'll be Rayban glasses probably and we'll cover it probably on the pod tomorrow. I don't know I said probably six times. I mean, we're going to do it. I'm pretty sure we're going to do it. Visa, it's everywhere you probably want to be. Now time for the best fact yet. This one's sent

in by Mika Moore from Instagram and it's not a fact it's actually correction to the pie. Mika slid into our DMs on Instagram to tell us that a pumpkin, it's not a root vegetable. Yeah, you know, I mentioned the other day that a pumpkin was a great fruit vegetable. It's pumpkin season, so it's important to correct the record. Pumpkins grow above the ground like watermelon and squash and gourds do. While root vegetables do not grow above the ground.

They grow below the ground. Specifically, the meat of the crop is the root of the plant. That's a root vegetable. Like a beet, beats our root vegetables. Well, not to go full Darwin on you, but botanically speaking, pumpkins are technically a berry. Yeah. A fleshy fruit that contains many seeds inside. Stick that in your smoothie. I really don't want to. No, stick it in your smoothie. You got to try this, Jack. It's great. No, it's not. Yadies, you look fantastic for Cevice Wednesday. And if you

think they missed an emoji with the new batch of emoji, you got to let us know. Like, why is there no cauliflower emoji check? Isn't there? No, there isn't. So, Bessies, if you've got an emoji idea, drop it in the comments on Spotify or YouTube. There should be an injured hand emoji from slicing an avocado. Yeah, those two emoji would go hand in hand. I like what you're thinking there, Jack. Oh, and if you haven't yet, click to follow us on Spotify or Apple, because that's how you get T-Boy every day. All right? Now we're going to a Vietnamese restaurant in Seattle, right? Absolutely. What's it called Bohan? It's called Babar, and we're going all in on the bun meet. And before we go, congratulations to the new Mr. and Mrs. Nobis LeCroy from Austin, Texas.

They are sitting on the beach in Aruba right now, drinking lots of champagne and enjoying that honeymoon. Guys, keep sipping, keep enjoying. We'll be here when you're back. Just enjoy the time together. And happy birthday to Emily Claire, soon to be Kern, Abfalter, in Santee, California, who's looking forward to her wedding on Mount Felix. It's going to be beautiful. And to the Firehouse Subs team in Jacksonville, Florida, they're celebrating a 30th anniversary. They're bringing back the amazing hot sauce bar.

If you're not using multiple hot sauces, what do you even do? doing. Oh, and Jack, a shout out to Brian, the pilot who I sat next to on the flight from San Francisco to Seattle. Yeah, he's just a great guy. We'd have fun conversation about commercial airline flight. Does that mean you were in the cockpit? I'm actually not allowed to disclose that, Jack. Federal aviation reasons. I don't know what's going on there. And a happy birthday to Casey Cohen, the legendary Yeti from Arinda, California. And to anyone else who's celebrating something today, make it a tee boy. Celebrate the wins. This is Jack. I own stock of Amazon and Nick and I both on stock of Apple.