The Best One Yet - 🐊 “Croc-blocked” — Crocs’ school ban. Haunted House economics. Waymo’s money moat.

Episode Date: October 30, 2024

Some schools are banning crocs for two particular reasons… so Crocs stock just got croc-blocked.Waymo just secured the 3rd biggest fundraises ever… $5.6B is their new money moat.50M Americans will visit a haunted house this year… so we got the economics of Haunted Houses.Plus, thieves aren’t going after Bitcoin, they’re going after cheese… $400K of stolen cheddar.$CROX $GOOG $AMZN—-----------------------------------------------------Subscribe to our new (2nd) show… The Best Idea Yet: Wondery.fm/TheBestIdeaYetLinksEpisodes drop weekly. It’s The Best Idea Yet.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/ Subscribe to our new (2nd) show… The Best Idea Yet: Wondery.fm/TheBestIdeaYetLinksEpisodes drop weekly. It’s The Best Idea Yet. Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. It's Wednesday, so V-J Wednesday. October 30th, 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. And a happy Halloween Eve to you, Jack. Spoiler, Spirit Halloween, doesn't have the costume you're thinking about

scooting over there to pick up right now. So yet is you going to go as a demure Jerry Powell, maybe a Frappuccino Phantom? Founder Mode, Mummy. Any of those business ideas, if you've got to... a costume business idea we want to hear it, besties. Leave us a comment here. We'll announce the best business-themed costume idea in tomorrow's pod. If you haven't gotten your costume yet, you got 12 hours to get on this thing. 12 hours to order everything. Get a jacket. Hurry, hurry, hurry. We're the same thing as last year.

Yetis, hit us up with your business-themed Halloween costumes. Jack, three stories for today's show. What do we got? For our first story, Crocs sells a huge number of shoes to kids, but schools across the country are now banning them. What we're saying, Yetis, is that Crox stock just got crock blocked. For our second story, it's Waymo. Waymo just pulled off the third biggest fundraise ever. $5.6 billion. For the number one Robotaxie company, that money is a moat.

And our third and final story, 18% of you are going to visit a haunted house this Halloween. So Jack and I dug up the economics of the haunted house industry. Because the financials, they are freaky. But yeties, before we hit that wonderful mix of stories, Fantastic mixes stories, Jack. No one else is doing this mix.

Love the mix. We have to report on one of the biggest thefts of the year. It isn't gold. It isn't Bitcoin and it isn't the stealing of the Mona Lisa famous painting. It's cheese. It's cheese. $390,000 of stolen cheddar cheese. I'm going to sprinkle on some context, Parmesan style.

Nick, British artisanal cheese is a big business, isn't it? There's nothing the queen liked more than a big block of Camember. Jack. And over in London, the biggest cheese retailer is called Neal's Yard Dairy. Neal's Yard Dairy. And they weren't shocked when they got a big order for cheese from some French grocery store the other day. They sell a lot of cheese. France eats a lot of cheese. So 22 tons of cheese, Suvouple? Yeah, that seems normal. Neal's, they were down with the order and they shipped off that huge chunk of cheese, all 50,000 pounds of it. But Neal's Yard Dairy never got paid. Jack, this wasn't a dine and dash. This is a cheese and squeeze, man. What we're saying is their ricotta, it got robbed.

And actually, you think there's kind of a business lesson here, don't we, Jack? You shouldn't ship a valuable product without being insured that you're going to get paid. Banks, like, handle this kind of thing. Barclays would have loved to handle this cheese transaction. But the wildest part isn't the financial faux pa. It's this. This isn't even the biggest cheese theft we've ever covered. A few years ago, true story.

An Italian gang stole a million dollars of Parmesan. A year before that, in Wisconsin, thieves stole $50,000. a greyer. And who can forget the great Dutch Gouda heist of 2022? Jack's still deep in the memory I can smell it from here. Apparently that cheddar is worth some chatter. So hold on to your Hulumi. Nick, what did the cheese retailer say to the robber as he ran away? What do you say, Jack? That's nacho cheese. That's nach cheese! That joke slapped in fifth grade. Besties protect that provolone. Jack, let's add out three stories.

Fifteen years before this song, two boys from the northeast met in the dawn. They had an idea that caused a cultural storm. It's the best one yet, but the best one yet, but the That's an 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 ready to go.

We can't wait no more, so just start the show. Start the show. First, a quick word from our sponsor. For our first story, Crocs tripled its sales by becoming the unofficial footwear of recess. But the stock just fell 19% yesterday, because schools are beginning to to ban Crocs. Jack, what are we trying to say here? Crocs are getting crock-blocked. Funny time in here, Yetis, because our latest episode of our new spin-off series, the best idea yet, it happens to be about Birkenstocks. Berkenstocks, known by some as the ugly shoe.

Funny thing, though, Crox is known as the ugly shoe, too. Crox is kind of like the OG of ugly, and yet Crox is worth $8 billion, which is nearly as much as Birkenstock. But from the days in the Mid-2000s, when Tim Tebow first started wearing Crocs all the way through 2020, Crocs didn't grow much at all. No, it did not. It was because Crocs was considered an ugly adult shoe. Crocs were great for like wearing when you were doing, I don't know, work in the garden, and you wanted to just hose them off afterward. I like how you change your tone. Work in the garden over there, yeah. Sounds like a guy who works the garden. But now Crocs, Crocs is a kid's shoe, not an adult shoe. They changed the demographics. Every kid at Wilder's school has a

pair of crocs. And I'm pretty sure their parents are replacing them every year as their feet grow. I think it's the only shoe you can throw in the dishwasher and feel okay about it, Jack, if it's in the top rack. Now, Nick, you and I learned how to tie our shoes around the age of like five. Does Wilder even need to tie his shoes? He wears crocs all day. I mean, Jack, the loop, swoop, pull with the bunny rabbit ears. You had to get like a masterclass in that when you turn five years old. He spent weeks preparing for that big deck. Shoe tying is becoming as obsolete as cursive. Because kids are sliding their feet right into crocs, And that's why the stock hit a record high last year.

But here's the news. Multiple reports say that schools are banning kids from wearing crocs. We repeat, the schools aren't banning social media and, like, aggressive predatory algorithms, but schools across America are banning crocs. It's a crox crackdown. There's two reasons that schools are pulling a Dolores umbrage and banning one of the kids' favorite things. Well, Jack, the first reason is injuries.

Bloomberg spoke to school nurses and apparently twisted ankles are happening, especially when the heel strap is left open. Trips and falls are common when kids are wearing crocs. There's more scuffed knees than that four square tournament. Well, the second reason for the crocs crackdown is gibbet. Kids are pulling out those personalized charms on their crocs, and they're like throwing them at each other like in the middle of class. Spitballs are history. Bubble gum bubbles are over. Jibbitt's tag.

That's what the kids are doing these days. Watch out. Oh, yeah. Oh, I found a buzz light year. Add it all up yet. And what we're saying is that the two unique features of crocs that made them so loved that were their competitive advantage have now made them a nuisance in K through 12 education. The funky shape of those clogs with the backstrap and the gibbets. Those are the problems when it comes to the principal's office.

So dozens of schools and at least 12 U.S. states are now requiring clothes, tow shoes. No crocs allowed. They'd rather your kid wear Kohan wingtips than show up in crox. And yesterday, Crox announced earnings. Get this. The stock fell 19% because of a poor outlook for the fourth quarter of this year. And it's possible that sales drop is because parents are cutting back on crox purchases, knowing that schools are going to toss their kids out. You bought a pair of crocs in size 4, 5, 6, 7, and 8,

but you might not get 9 because they're banned at school now. Jackie, you got to pick Wilder up in school early because the principal said he was caught wearing crocs. No, he should point out, they're still allowed at Wilder's school. In fact, most schools still allow crox. But if this is a trend, Crox is in trouble. What Jack and I are saying is that croc block into Crocs has docked the Crocs stock. So, Jack, what's the takeaway? That's exactly what we're saying?

That's exactly. For our crock-box buddies over at Crocs, what's the takeaway? When things feel best, prepare for the worst. Yeah, it is, when crox stock was higher than ever, peak pandemic, Crocs actually sold $450 million of shares to acquire a shoe company called Hey Dude. Hey dude, it was their diversification play, a different shoe that could grow even if the crox fashion style fell out of favor. Well, Jack, guess who Hey Dude hired in April to run this new subsidiary of Crocs? The former president of Stanley, the cup company, like those huge Stanley Cups that went viral, they hired that guy.

Crocs wants Hey Dude to start selling to women, so they even hired Sidney Sweeney as the new face of Hey Dude. And now that Crocs sales to kids are under pressure because of this school issue, they're great. that they have a hey dude business, which is completely unaffected. And that's why Jack and I think Crocs is a case study in diversifying your fortunes. Perfect example of it. When things look better than ever, that's the time you should prepare for the worst. You never know when you might get crock blocked. For our second story, Waymo, just cashed the third biggest venture capital check of all time.

This robotaxie business is shifting into high gear now. Nay, it's shifting into blitz scaling. Well placed nay, Jack, well placed nay. Yet he is almost one year ago, Jack and I pulled off our first ever stunt podcast episode. We recorded an entire episode of this show from the backseat of a Waymo Robo Taxi. And since Jack and I recorded an entire podcast in the backseat of a Waymo Robo Cab, Waymo has exploded. Every week right now, Waymo is doing 100,000 rides with no driver. behind the wheel in San Francisco, Phoenix, and Los Angeles. Full disclosure, this is Nick,

and I take a Waymo into work every single day. Meanwhile, Elon Musk showed off a pretty cool-looking cyber cab earlier this month, but that thing is still years from hitting the roads, if it ever does. And Jack, I can actually practice the pod in the backseat, so I'm like talking to myself, there's no driver, no judgments. Venture Capital loves winners, and it's clear that Waymo is winning robocabs. So, they just wrote a check for $5.6 billion to Waymo. All the big players of venture capital participated plus Alphabet, what happens to be Waymo's majority owner. It's the third biggest venture capital fundraise ever behind only two AI fundraisers that happened earlier this year. What Jack and I are trying to say here is that Waymo is about to become a verb. It already has.

You Waymoed to work today. Miriam Webster is about to add Waymo. So Yeties, Waymo already works. It's got a proof of concept. It's got product market fit. It's in three cities. What's a time to do now with that business? Jack, it feels like it's time for the blitzscaling. It feels like a blitzscaling. It's the name of a book written by Reid Hoffman, the co-founder of LinkedIn, and it basically means scaling crazy fast. What would you say the thesis behind the blitz scale is? To build a massively valuable company, you want to go from zero to a billion as fast as possible. That is the core it. You just want to go zero to a billion. Asap and Waymo has three plans for what to do with their five and a half billions. First, they plan to expand to new cities. They've already announced that

Austin and Atlanta are getting Waymo starting next year. Austin, Atlanta, congratulations. You're getting Wamos in 2025. Buffalo, New York, D.C. You're getting them soon after. And that's going to require a whole lot of new robo taxis. So, Jack and I did the math on this and with a five and a half billion dollar fundraise, assuming $100,000 per self-driving car. With this fundraise, they could build 56,000 Waymo Robotaxies. Now, the second use of this money is going to be expanding

how they use Robo Taxis. Waymo has discussed expanding into other business applications, like shipping and logistics. Picture a tractor trailer with nobody behind the wheel. Or Jack, say you forget your handbag at a restaurant, they could put it in a Waymo, send it to you, and only you

could unlock the cab when it actually arrives. The final plan for blitzscaling, actually just requires retaining employees. They're going to pay these Waymo workers so well that they don't even want to think about leaving for, like, General Motors or Tesla. They're going to give Waymo employees waymo money. Yeties, if you work at Waymo, prepare for a whole lot of free kombucha and 12 different options of sushi at lunchtime.

It's basically a bribe to get you to stay at the company. It's Tuesday. You know what that means? Ice cream Sundays for everybody. Working at Waymo is actually going to make Google employees jealous. Speaking of which, Jack, what's a takeaway for our buddies over at Waymo? Waymo is using money as a moat. Yet he's a moat. It is a defense against competitors. In Westeros, they built moats with water to protect the castle.

At Waymo, they're using this money. Because this huge fundraising headline, it sends a message to Tesla and General Motors Cruise and Amazon Zooks. And Jack, what is that message? You want to compete with us? You'll have to find $5 billion just to even start competing with us. Just to even think about competing with us. Waymo's fundraise can be seen as a shock and awe campaign, basically a deterrent to even try to compete.

Waymo's intimidating the competition into throwing in the towel, and they're doing it with a huge fundraise. Waymo is using money as a moat. Now a quick word from our sponsor. For our third and final story, Odds are you just got back from a haunted house. It's a booming industry. So we dove into the economics of professional haunted houses, and the numbers, they're scary.

Everyone has like one street on one block of their neighborhood that's got one freaky-looking haunted house, don't they, man? You had one growing up. I'm sure you did. The guy two doors down has a skeleton that got hit by the car. It's just jarring every time I walk past it. Like, the skeleton is, like, you know, encased on the front hood of the car. Jack, even in New York, there was one, like, wooden townhouse on 92nd Street where they had candles in the window every night. And you're like, well, I don't know if you need candles every night, man. What's going on over there?

The worst haunted houses are the ones that don't use haunted house props. They just use, like, old dolls. Like, dude, dolls from 100 years ago were terrifying. If you don't get slime on your shoes, it wasn't a good haunted house. But yet, he's 18% of American adults will visit a haunted house in the last. year according to the National Retail Federation. That's nearly 50 million fully grown men and women are going to walk through the door of a haunted house

and promptly pee their pants. Now, Jack, can you please sprinkle on some contacts to those big haunted house numbers? 50 million people a year, that's more than the people who go camping, who practice yoga, or who play fantasy football. Now, when Jack and I grew up, we remember amateur haunted houses.

There was a guy, one street over, who just opened up his garage and put a coffin in there. We all know a zombies coming out of the coffin. and actually wasn't even scared. And those big numbers, they've resulted in a big for-profit haunted house industry that has doubled in the last two decades. According to the Wall Street Journal, there's 2,000 professional haunted houses operating in America right now. Now, Jack, this is a tough business. This is a tough industry, isn't it, man?

You only have one month you can make money. That's why two-thirds of these haunted houses don't make it past a third year. So Yeties, Jack and I got curious. And we jumped into the economics of every haunted house. house. These freaky finances are going to scare your CFO. So, Jack, let's use a little case study here. Let's start with Hellsgate, which is a big haunted house like Hollywood quality haunted house over in Chicago. They sell 50,000 tickets a year and charge $40 per ticket, which is $2 million in annual revenue, not too shabby. Two million dollars in the top line. And that would make Casper come out

of retirement. Not too shabby. We'll take those monies. But the costs, they're scary. You need a very particular kind of real estate if you're going to run a haunted house. That's your first cost. You're going to need like an empty Victorian mansion or I don't know, Jack, I'm checking Zillow right now. I'm looking for a cornfield. Anyone got an empty cornfield? The typical pro haunted house pays $130,000 for the land that they operate on. But your biggest cost, Yetis, it's going to be the performers. It's the labor. It's always the labor. Haunted houses pay $330,000 on average for the people who jump out and scare you. Now, foam corpses, they cost about $400 each. Animatronic monsters, $20,000 each.

Oh, and then, Jack, both of us are the sons of lawyers, so we can't forget about insurance, can we, man? You need like a $65,000 umbrella policy in case somebody has a heart attack during the show. Which they will. Add in the $50,000 budget for cobwebs, and the total cost of a professional haunted house are $1.5 million.

So for Hellsgate, a Hollywood-quality haunted house, they're walking away with a $500,000 profit, not too shabby. Smaller haunted houses, they get fewer actors, fewer skulls, and cobwebs, but they're getting slimmer profit margins, too. But the reason that most haunted houses fail after less than three years, there's simply not enough visitors paying for not enough tickets to cover all of those costs. Most professional haunted houses get less than 5,000 visitors a year, so the numbers just don't number out.

Your CFO is freaking out right now. And probably be in their pants. So, Jack, what's the takeaway for our... buddies over in the haunted house industry. In the bones of every good business is a story. Yeties, the biggest surprise to Jack and me as we research this story, it wasn't the numbers, it wasn't the margins, it wasn't the number of fake cobweb corpses. The surprise was the script. Each year, the successful haunted house owners write a script for their attraction, just like a movie writes a script. The family moved in. They had three kids and they were cooking dinner and then

they were never heard from again. You can still hear the children screams as you walk down the hallway. That's the key. The key to a haunted house success is the volume. And what drives the customers, it's the word of mouth. And what drives the word of mouth? It's a great, scary story. Successful haunted house owners say,

the success doesn't come from the realism of the skeletons. It comes from the story. You may not realize the besties, but what makes you tell a friend about that haunted house, It's the plot, not the props. It's a lesson for any business, marketing, product design, even someone pitching their startup to a venture capitalist. You need a plot, you need stakes, and you need characters.

Every type of business needs a story. Jack, could you whip up the takeaways for us for Saviche Wednesday? Stock and Crocs fell 19% because the shoe is in detention. But at least they've got, hey dude. When Crocs was at its best, that's when it prepared for the worst by Diversal. For our second story, it's Waymo. Waymo just raised the third biggest venture capital fundraise of all time, $5.6 billion, and they're using that money to blitz scale.

Because big money is a moat. And our third and final story. Haunted houses have become a professional industry. The successful ones take customers through a story. And in the bones of every good business is a story. But Yeties, this pod's not over yet. Here's what else you need to know today. First, five of the biggest companies in the world report earnings this week.

Alphabet reported yesterday. They beat earnings alphabet stock rose. Now you got meta and Microsoft on Wednesday. And then Amazon and Apple are reporting on Thursday. Happy earnings season to all who celebrate. And yes, we do. And second, Bitcoin just passed $70,000 for the first time since March. Right now, Jack, it's at 73,000 as we're recording.

The recent for the rise in Bitcoin, some think a short squeeze is happening. But Jack, what do we think? We think it's election anxiety. Some people buy gold when they're worried, others buy Bitcoin. Ben the Bitcoin can help you when you're lonely. And finally, John Stewart extended his return to the Daily Show with a contract through 2025. They'll keep posting each week on Monday nights and be the executive producer for the rest of the week. And Jack and I should point out, one of our early friendship connections happened to be John Stewart's original hosting gig, right, Jack?

We realized when we're messaging each other on Facebook before we met. that we both love The Daily Show. We're like, that's really cool. I think this could work out. Mom, my future roommate, he also watches the Daily Show. Now, here it is, your moment of Zen. Actually, instead of a moment of Zen, we've got the best fact yet. Now, time for the best fact yet,

whipped up by Jack and me because we couldn't wait to share it with you. Remember our story earlier in the week that a majority of cannabis users are women now? We said that Canna Babs now outnumbered cana bros. We noticed when we were researching that story that the pre-a-a-busy-a-bos that the percent of men using marijuana has actually fallen since it became legal. And it's actually the same with teens. That's the interesting new information. Teen cannabis use has fallen from 21% in 2011 down to 16% in 2021. Now that it's legal, kids don't think it's as cool, I guess. What's kind of the takeaway here for our buddies who are everyone involved with cannabis? If you want kids to

stop doing something, let them do the thing. And they'll be like, oh, I guess I'll stop. Yeties, you look fantastic today. Oh, Jack, one second. I just got to call. Oh, my God, Jack. Wilder School just banned crocks. The Pod Sun can't wear crocs at school anymore. We're getting crock blocked over here in Vermont.

You got crock blocked. Jack, I hate to tell you, but you just got crock blocked. It's happened to the best of us. I got to have a word with this teacher. Yeties, remember to send us your business-themed Halloween costumes. And the best way you can help grow this show is to drop a message in slack and tell all of your buddies, H-Y-H-T-B-O-I. Have you had the best one yet?

That grows the pod, if you know, you know. And before we go, a shout-out to Yeti Paul Hastings at the compelled podcast, who's been a fantastic listener and was curious about who wrote our rap jingle music, and who was that, Jack? Our music was written and performed by Blacklac. Fantastic rap duo down in Texas. Happy birthday to Brooke Morgan in San Diego, California, who brushes her teeth every day to T-Boy.

And a happy birthday to Jossi Baez down in Miami, Florida, celebrating at Miami Studio 54. And if you want to get a shoutout on the show, or you know the best fact yet, or you want to get your buddy a shoutout, what do you got to do, Jack? Click the link in the episode description. There's a simple form for you to fill out. Or go to t-boypod.com slash shoutouts, and Jack and I will get you on the show. This is Jack. I own stock of Crocs and Amazon, and Nick and I both own stock of Apple and some Bitcoin. A Bitcoin named Ben.