The Best One Yet - 🍔 “Double-Double, Animal-Style” — In-N-Out’s expansion. LinkedIn’s languages. JPMorgan’s fakeness.

Episode Date: January 17, 2023

California’s In-N-Out burger is finally expanding East of the Mississippi, so we jumped into the strategy behind the most-profitable patty in the big burger biz. Everyone’s talking TikTok and Instagram, but the real social media success story? It’s LinkedIn. And JPMorgan Chase embarrassingly spent $175M… on a fake startup.$JPM $MCD $CMG $MSFTFollow The Best One Yet on Instagram, Twitter, and Tiktok: @tboypodAnd now watch us on YoutubeWant a Shoutout on the pod? Fill out this formGot the Best Fact Yet? We got a form for that tooLearn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

Shak Shooka. Is there any better word to say than Shakshuka? That's the most mispronounced word by me in ordering history. You're like all of the eggs, Shookshook. Eggs Benedict? Shishuka. This is Nick. This is Jack. Welcome back.

It is Tuesday. Tea Boy, Tuesday, January 17th. That today's pod is the best one yet. We got a T-Boy today. It's a T-boy. Stokes. best week since November. Jack, how did you celebrate the wins? I got the classic Philly cheese steak we used to get in college from Two Brothers Tavern. Yes, they cut off the loaf top

and they stick the steak right in there. It's a hollow baguette, so it captures all the juices. It's incredible. It's less of a steak and it's more of an experience. How did you celebrate the wins out in Cali? Jack, we were popping pinos up in Napa, because we were popping pinos up in and nap. That sounds about right. Happy four day work week, Jack, what's our first story for the pot? For the first time in ever, in an out burger is expanding. to the East Coast. Because in and out burger does the opposite of every other burger. For our second story,

everyone talks about Twitter and Instagram, but one social network is beating both. LinkedIn. They're getting no attention, but they're getting all the love. And our third and final story is J.P. Morgan Chase. They just announced their earnings. We don't

care about those. No, because J.P. Morgan Chase just admitted in court that they bought a fake startup for 175 million dollars. It's a startup that doesn't exist. It's a startup about nothing. Yes, it is. But yet is before we hit that fantastic mix. This is a fantastic mix, Jack. Horters Almanac, week 148. Things were running out of because the pandemic. Jack and I have been keeping track for you. This week, we're running out of eggs. Eggs, like check your fridge, check the frying pan. Jack, uh, we are out of eggs. There are no eggs. There are no eggs.

We're out of eggs. White eggs, brown eggs, large eggs, extra large eggs. Cage free, cage full, we're out of that egg. Get this, Yeti's grocery prices overall are up 12% in this country compared to last year. But get this, Yeti's egg prices are up 60% in the last year. Eggs are becoming an elusive, lavishly priced luxury. Jack, you don't crack the egg. The egg cracks you. In fact, egg prices have surged by more than any other food type. Jack and I jumped in T-boy style.

This is kind of a chicken and egg problem. You could say that, Nick. Yeah, yeah, yeah, yeah, you could. Because an outbreak of avian flu hurt chicken supply in this country. And fewer egg-langing chickens meant fewer eggs, which means higher prices. So eggs aren't a cheap way to get protein anymore. No, no, no, no, no. Eggs are now an indulgence.

I put eggs on my caviar now. Jack, I don't drink champagne. I drink omelets. If you want to impress your date, order Shaksuka. Yeah, the new brunch flex is the front. Tata. Yetis, we got an egg shortage. Yeah, Yetis can't find them here. We can't find them there.

We can't find eggs anywhere. I would eat eggs on a boat. I would eat eggs with a goat. Thank you, Sam, I am. I will eat them with a fox. I will eat them in a house. I will eat them with a mouse. I will eat them here.

I will eat them there. Say, I will eat them anywhere. Let's hit our three eggs in hate. Fifteen years before this song. Two boys from the Northeast met in the dawn. They had an idea to cause a cultural storm. It's the best one yet, but the 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. For our first story, for the first time in the history of the bun, In-N-Out Burger is expanding to the East Coast. In-N-Out Burger completely threw away the rulebook of the fast food industry.

Okay, Yeties. When Jack and I both moved to the West Coast four years ago, we didn't really move to the West Coast until we'd sat down at In-N-N-N-N-Out. Forget surfing, sun, and palm trees, and the word, Hella. You're not a California citizen until you've had an In-N-Out burger. You could rub avocado all over your body. It doesn't count until you've been to In-N-N-Out. Until you've had a double-double with onions.

Yet he's In-N-Out Burger. It opened in 1948. It's a secretive family-run burger chain. This place has a cult following. And it serves milkshakes. Okay. You're going to walk in, you're going to want to get the double-double protein style. Or maybe order animal style, which is on their not-so-secret menu.

Don't tell anyone. Tell everyone. This is Shake-Shack, but with an extra smear of grease. Full disclosure, it's better than five guys. In-and-out beats five guys. It really does. There's no question. It comes in like a wrapper that keeps the grease out of your hands but into your mouth.

It's thoughtful. They've scaled the Tater Tot. But in the 74 years since they opened up in 1948, there's been one annoying quark for Nick and me. A weird business decision. This company, In and Out, never opened a location east of the Mississippi. In fact, In and Out is only in six Western states. In fact, in fact, three out of four are just in California. Until now. Here's the news. In and Out Burger for the first time in 74 years is expanding East. They are investing $125 million for an eastern headquarters in Tennessee and are going to open restaurants over here by 2026.

In and Out is using the volunteer state as an outpost to explore the eastern frontier. They should hire the opposite of Lewis and Clark. Now, Yeties, this is where Jack and I got curious because this is a private company. They are run by the heiress to the In-N-Out fortune, Lindsay Snyder, who has a lot of tattoos. She is a devout Christian, and she's also a race car drag racer. In our research, we noticed a lot of similarities between In-N-Out and Chick-fil-A. As we said, this is a secret of private company, so they don't share their numbers. But Forbes, a few years ago, got the In-N-Out numbers.

And we found out the In-N-Out may have the most profitable patties in all of food. All right, Jack, let's look at a per-store basis. Your average In-N-Out burger is generating $4.5 million in sales. That is double the average McDonald's sales. In fact, the average In-N-Out burger has a profit margin of 20 percent. which is double the average profit margin of Chapo. And that is when Jack and I just got more curious. How is In-N-Out so much more profitable per location

than any other fast-food or fast-casual restaurant? So we spend the three-day weekend jumping in T-boy style to the numbers. So Jack, what's the takeaway for our buddies over at In-N-Out? The only ideas worth having are contrarian. Yeties, that is a quote from our pal, John Steinberg. The only ideas worth pursuing are the contrarian ones. And it turns out In-N-Out is contrarian in every element of the fast food industry. So Jack and I found four key ways that In-N-Out is the opposite of the rest of fast food.

And is therefore the most profitable patty of them all. First, Jack, McDonald's, they're selling 80 different menu items to reach a broad dining audience. In-N-Out only serves 15 menu items. The menu is super focused. It never changes. Number two, every fast food chain relies on franchises to add more restaurants faster. But In and Out owns every location themselves, prioritizing quality control over growth. Number three, every fast food chain leases locations to stay flexible in the short term. But In and Out owns its real estate to save money in the long term.

And number four, every fast food chain launches in cities to be where the most customers are. In and Out only opens in the suburbs. By making, major highways where space is just cheaper to buy. Yeti's In-N-Out contrarian ways have resulted in a better product and a more profitable pad. But Yeti's guac is always extra. That contrarian approach has sacrificed growth. Bessie's In-N-Out only has 300 locations and only does a billion dollars in sales every year. It could be way bigger if In-N-Out had followed the fast food robot. But Jack and I bet that In-N-Out prefers its own recipe. For our second story, There is one social network that is subtly thriving right now.

It's LinkedIn. Because LinkedIn speaks two languages. It speaks bull and it also speaks bare. It is fluent in both. Here's the deal, Yetis. If you wear all birds three out of five days a week, you sadly probably have a coworker who's been let go. Yes, because we may not be in a full-blown recession,

but we're definitely in a white-collar recession already. Big Tech has fired over 150,000 people just in the last year. And now the big banks are starting to layoffs too. And that is why Jack and I said last week, layoffs, they're like the flu. They're highly contagious. One time one industry gets sick, then immediately another industry gets sick.

Well, if layoffs are like a sickness, then LinkedIn is the remedy. Because LinkedIn is seeing record numbers right now. And if you're laid off, LinkedIn makes you feel like you're on your way to a new job. LinkedIn is the social network that no one talks about, but everyone is using right now. LinkedIn.

The humble brag of social networks. Yeah, the only place where it is socially acceptable to promote yourself. Some personal news. I'm humbled to announce that I just got a raise and I got promoted. I just want to thank my teachers, my mentors, my parents, and everyone I've ever met for this 15% humble raise. Now check out my reflection piece on my five leadership strategies that got me to senior vice president of sales. Yeah, your average LinkedIn poster, like they're pretty impressive. But get these numbers because what LinkedIn's doing is very impressive.

LinkedIn is living its best life right now. Its business should be endorsed for thriving. Because yet he's 22, that was a bad year for social media. Like besides TikTok, the social networks were just experiencing flat growth. But LinkedIn's users grew by 10% last year. On the other hand, Facebook's users shrank for the first time ever. The reason LinkedIn was growing while everyone else wasn't is the layoffs of last year. It was driven by layoffs.

Like the number of people on LinkedIn whose status is open for work, that's jumped 22% compared to last year. A LinkedIn group for laid off meta employees has hundreds of members right now. Honestly, Jack and I said this a few years ago, and now we're seeing it. What was that line, Jack? LinkedIn, the social network for unemployed people. Yeah, nothing wrong with that. That's just the reality of LinkedIn's usage.

It's also a social network for employee people, but it's most useful when you're looking for a job. Add all that up, besties. And LinkedIn is seeing record. engagement. We're talking 900 million users. How does that compare, Jack? Almost a billion people. That's twice as many monthly active users as Pinterest, Snapchat, and Twitter. Uh-huh. Yeties, we have the numbers on all that because LinkedIn is owned by Microsoft. Acquired in 2016, it's perhaps Microsoft's best acquisition ever. It's probably the best deal Microsoft's ever done. So Jack, what's the takeaway for our buddies over at LinkedIn? The real reason LinkedIn is thriving, it speaks two

languages, bull and bear. Yeties, unlike any other social media, LinkedIn does well both in a good economy and a bad economy. It's the rare two-sided platform where each side pays in either type of economy. Yeah, we notice that when businesses are hiring, LinkedIn wins. Because businesses post job opportunities and recruiters pay for LinkedIn gold. But we also notice that when businesses are firing, LinkedIn also wins. Because unemployed people pay for LinkedIn gold to boost their chances of finding a job. And that is why LinkedIn's revenues jumped in both 2021 and 2021. Revenues grew 42% in a booming bull year for the economy in 2021. But then revenues grew 17% in a bad bear year for the economy in 2022. LinkedIn, it does well in any kind of

economy. Because LinkedIn speaks two languages. It speaks bull and it speaks bare. Now a word about our sponsor, Robin Hood. A lot of Yetis don't realize how much much prep work goes into this pod. We spend hours every morning jumping in T-boy style to earnings reports, CEO tweets, breaking news headlines. Yeah, Jack and I are toggling tabs like you toggled I-M Convo's in 2004. Having eight tabs open can be stressful. You don't need that, especially when invest. Robin Hood offers it all in one app. Whether you want to trade options, ETFs, or stocks through Robin Hood Financial, or you want to buy some Bitcoin on Robin Hood Crypto. You can do it all on the Robin Hood app. If you're not investing in Robin Hood yet, to get started, go to Robinhood.com

boy and choose your free stock. That's robinood.com slash tbohy limitations apply. Robin Hood Financial LLC, member SIPC, all investments involve risk. By the way, this podcast is not owned or part of Robin Hood. We are not employees of Robin Hood. For our third and final story, J.P. Morgan Chase just spent $175 million for a fake company. Jamie? Jamie? Yeties, this shows that in due diligence, there must be a pretty pretty. resumption of fakeness. Yeah, these interesting business strategy here, and it actually started

with the tobacco industry. Get them hooked while they're young. Yeah, the finance industry, they do it too. The finance industry wants to find creative ways to target college students. So J.P. Morgan Chase tried that. They wanded in on college loans. So in 2021, they acquired a company called Frank. Yes, Frank. It was a student financial aid startup that had four million accounts. Actually, they boasted four million accounts. Four million accounts. Yeah, not too shabby. There we do. J.P. Morgan Chase coughed up 175 million dollars to acquire Frank. Jack, how much is that per an account? It's $43 per account. Well, Yeties, here's the news. J.P. Morgan Chase just shut down Frank. And sued the founder of Frank. And they accused Frank. And they accused Frank.

of fraud. This is a wild start. It's a wild story. J.P. Morgan Chase asked Frank's CEO to verify the 4 million accounts that they were about to acquire. And then the founder started stalling. The founder of Frank stalled because the founder of Frank needed to find those 4 million accounts. So she paid a professor four times the professor's normal consulting rate for a very shady job. Yeah, she told that professor, I need you to create 4 million fake accounts for me. I need 4 million usernames, 4 million passwords with 4 million fake account holders. Well, a couple weeks later, she came back to J.P. Morgan and said, hey, here's the info on all those 4 million accounts that you want to acquire. So they reached a deal.

But after the deal, J.P. Morgan emailed those 4 million accounts. Yeah, they're like, hey, we're J.P. Morgan. We just acquired this company. We want to get to know you. And 72% of the emails bounced back. Yeah, that is when J.P. Morgan. realized that those accounts they just bought were fake. All the email addresses, all the account holders, they were fake.

They paid $175 million for a fake company. All of that is why J.P. Morgan Chase last week embarrassingly filed a lawsuit for fraud. Okay, we control F to the whole lawsuit, and what did we find, Jack? Accusations of fraud 19 times. That's bad. Lying and lie five times. That's really bad. And two accusations of deceit.

That's not good. This is embarrassing. for J.P. Morgan Chase. How embarrassing is this, Jack? It's the corporate equivalent of sending money to a Nigerian prince. So, Jack, what's the takeaway for our buddy Jamie over at J.P. Morgan? Due diligence requires a presumption of fakeness. Yeties, who has the burden of proof? In the American justice system, the burden of proof is on the accuser. The accused is innocent until proven guilty. Like the founder of Frank, she denies the allegations and she's innocent until proven guilty in court.

But when a company is being bought or being sold, there is a burden of proof on the buyer. The buyer must make sure that the thing they're buying is what it's said to be. And that's due diligence. That is doing the due diligence process. And with due diligence, you must start with a presumption of fakeness.

It's only real if it's proven to be real. Well, the way Jack and I see it, in a world of digital product deals, due diligence is more important than ever to confirm the data and the metrics. That's why due diligence today, means having a presumption of fakeness. Jack, can you whip up the takeaways to kick off the four-day week?

In-and-Out Burger is expanding east of the Mississippi, finally. Because the only ideas worth pursuing are the contrarian ones. For our second story, LinkedIn is thriving as the ranks of unemployed growth. LinkedIn, it thrives in good economies and in bad. It speaks both bull and bear. And our third and final story is J.P. Morgan Chase. they're suing for fraud over their $175 million acquisition of an allegedly fake company. You gotta do the due diligence.

And in due diligence, there must be a presumption of fakeness. Now, time for the best fact yet. This one sent in by Trent Miller from Edgefield, South Carolina. Georgia, it's the peach state. It's the peach state. South Carolina, on the other hand, that's the Palmetto state. But did you know, South Carolina actually grows more peaches than Georgia? Okay, Jack, how many more peaches do South Carolina grow over Georgia?

For every one peach Georgia grows and harvests, South Carolina does three. Three times as many peaches in South Carolina, South Kakalaki. Now, South Carolina does give Georgia credit. Georgia's been peach farming for longer. But South Carolina just responded with a LinkedIn post, Jack. Humble to announce some personal news. We're destroying Georgia in peach production now. Oh, South Carolina.

It is the humble peach state. The humble bragging. Peach State. Yeah, Chicago does logistics. South Carolina does fuzz. Yetis, you look fantastic to kick off the week. And Jack, would you like to come over for some Eggs Benedict? You paying?

In this economy? H-Y-H-T-O-Y. That's how we share the pod, Yetis. Have you had the best one yet? If you know, you know. Nick and I, we'll see you tomorrow. Can't we? And before we go, congratulations to Yeti Henry Winn,

who ran a half marathon listening to the T-Barrison. Boy Pod over in London. You know, the fastest half marathon ever was eight episodes of the best one yet. And all that up. And a happy birthday to Veronica and Vanessa and Victoria, who are all triplets in the Greer

family in Citrus Heights, California. And a huge shout out to their mom. Yeah, she gave you life. And happy birthday to Alex Curie in Jacksonville, Florida. And And Andreas Gonzalez, happy birthday in Paris, France. Happy birthday to Josh Boyd in Tulsa, Oklahoma. And Jeff,

Philco, happy birthday down in Dallas. And happy birthday to Cameron Harper, who's on her way home from Dallas right now. And Ilyos Yadishav, happy 33rd birthday over in Chicago. And happy birthday to Jenny Nunez in Lincoln, California. And Juan Catanio is sleeping in for his birthday over in Scottsdale, Arizona. Not too shabby, and happy birthday to Brian Crespo in Bushwick, Brooklyn. And Trish Legande, turn in 23, over in Dallas. Happy birthday to Cassie Parko, who's going to take all the Pino before Nick,

celebrating up in Napa. Just save a little bit. And Veronica Martinez and OG Yeti and Market Snacker, happy birthday in Phoenix. And to anyone else who's celebrating something today, make it a T-boy. Celebrate the wins. This is Jack.

Nick owned stock of ShakeShack and Nick and I both own stock of Tripotle and Robin Hood. Now a word about our sponsor, Robin Hood. A lot of you listen to our show while you're driving. Two hands on the wheel. Keep it ten and two. You might be cruising, Chris, no rush.

stay in the right lane. Or you might be doll lane from Duncan, dotting from lane to lane. And there are different drivers on the road. They're different investors too. Maybe you're cruising down the long-term lane with stock investing, or maybe you're a more advanced full-speed trader. Well, the Robin Hood app helps put you in the driver's seat wherever you're at in your investing journey. If you're not investing on Robin Hood yet, to get started, go to robinood.com slash t-boy and choose your free stock. That's Robinhood.com slash T-B-O-Y. Limitations apply. Robin of Financial LLC, member SIPC, all investments involve risk. By the way, this podcast is not owned by or part of Robin Hood, and we are not

employees of Robin Hood. You're like all of the eggs shookshut.