The Best One Yet - 🐰 “El Supertazón” — Bad Bunny’s business. Anthropic’s book destruction. Chipotle’s $100K rule. +Football Birkin Bags

Starting point is 00:00:00 This is Nick. This is Jack. It's Friday the real Friday. February 6th, 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. All right, Jack, pause the pod without the calendar. Olympic opening ceremony tonight. Super Bowl on Sunday. We got Valentine's Day in just over a week. Men's Olympic downhill competition on Saturday, which is the most exciting event in my opinion. I mean, the only thing not having fun in February so far is Bitcoin. True. It fell big again yesterday. Bend the Bitcoin, you're hurting us, buddy. Jack, three fantastic stories for today's pod. What have we got on the show?

Starting point is 00:00:38 For our first story, Anthropic just dropped a Super Bowl commercial disc track on Open AI. But the real story here, Anthropic destroyed a million books to get here, literally. For our second story, it's Chipotle's new strategy, telling anyone making under $100,000 to go to Taco Bell instead. Chipotle is raising prices again. And our third and final story. We're looking at the business of the halftime performer, Bad Bunny. And this story includes Gucci luggage, gas station Cheetos, and a $0 Super Bowl check.

Starting point is 00:01:08 It's the business paradox of Bad Bunny, Inc. But Yeties, before we hit that wonderful mix of stories. I mean, no one else is doing that mix. I love the mix before the weekend, Jack. You're going to see a lot of surprise things at the Super Bowl this weekend, not just during the halftime show. You'll see Hail Marys, flea flickers, maybe a butt fumble or a tush push if you're lucky. If you're lucky.

Starting point is 00:01:27 But the biggest surprise is probably going to be. going to be the handbags. Trend alert, NFLers are carrying luxury handbags like never before. That's right. The most masculine sport is going for the most feminine fashion accessory. Yeah, it turns out this season, the handbag was the breakout star of the NFL. Earmuffs, dad, you're not going to like this. Jalen Hertz carried a coach carry-all into the stadium earlier this year. Jack Stefan Diggs has an Irme's Kelly purse. That's his go-to. Will Anderson? He prefers Prada and their double flat bag with two handles. If you have to ask, you can't afford it.

Starting point is 00:02:01 We're talking Clutch's, pocketbooks, luxury handbags at a whole new level, baby. The devil already wore Prada. Soon Drake May Will, apparently. I mean, Jack, you've got to put your mouth guard somewhere, right? Man, there's a pocket. Now, this trend started either in the NBA or European soccer, but I can't believe it's come to the gridiron. I think it started with Emily and Paris, all the footballers are fans, Jack.

Starting point is 00:02:19 Because the only thing a linebacker clutch is harder than a ball these days, it's a burkin. The Yeties, the locker room tunnel is the new catwalk. It's not going to Sports Illustrated. It's going to Vogue. Let's sit on three stories. Fifteen years before this song, two boys from the Northeast met in the dorm. They had an idea to cause a cultural storm.

Starting point is 00:02:37 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 ready to go. We can't wait no more, so just start the show. Start the show.

Starting point is 00:02:57 First, a quick word from our sponsor. For our first story, Anthropic made huge headlines for troll and open AI in their Super Bowl ad. That's a great story. But an even better one? Anthropics quest to destructively scan all of the world's books. Oh, yeah, it is the theme of this year's Super Bowl is beef. Because the number two AI brand is beefing it up with the number one AI brand. Anthropic spent $10 million with NBC to throw shade in a 30-second commercial.

Starting point is 00:03:41 Because Anthropic ridiculed OpenAI's plans to launch ads on ChatC-C-P-T, and they did this through two Super Bowl commercials. Boom, roasted. It's an anti-ad ad for Anthropic, you know what I mean? Yeah, because it's mocking Chat-GPT for adding ads. That's the ad, basically. Kendrick Lamar did last year's Super Bowl, but Anthropics commercial is a discrack. Yes, it is, Jack.

Starting point is 00:04:02 And Sam Allman? yeah, he felt emotionally bruised. He reacted on Twitter very defensively to the whole thing. We got links to Anthropics' two Super Bowl commercials and Sam's 400-word reply to those commercials in the showdowns. But besties pause the pot. Because we are way more interested in one wild move that got Anthropic to this specific place. One detail that we only know because it was revealed in court documents. Because to build its AI, Anthropic, bought one million physical books and then destroyed them. This is a mind-bogglingly large and secret campaign

Starting point is 00:04:37 that Anthropic did in 2024, and it's called Project Panama. Doesn't sound sketchy at all, Jack. So there's some wonderful reporting here from the Washington Post. It captures the story, but Jack and I dove in T-Boy style for you. So before OpenAI launched ChatGAPT, they downloaded the entire shadow library online known as LibGen. Jack, what is a shadow library to sprinkle on some context?

Starting point is 00:05:00 It's a massive online library of digital books that are all pirated. And at the time, about a decade ago, OpenAI was an academic nonprofit. So to train their large language model, their AI, they had to upload millions of books. And nobody really was concerned. But then, when Open AI started straying from their nonprofit roots and became profit hungry, some early Open AI people left and launched Anthropic. And the first thing Anthropic did, what was it, Jack? The same thing Open AI did.

Starting point is 00:05:30 They went to that same shadow library, downloaded millions of books, and fed that digital text into Anthropics LLM. But here's the key. In 2024, Anthropic wanted to differentiate their chatbot. Make it smarter. Make it book smarter. So they launched Project Panama, a secret goal to buy a million physical books, scan the pages of those books, and feed the digital text into their large language model. Yes, this sounds like the plot of like a nerdy James Bond. but it is real and here is how it went down.

Starting point is 00:06:03 First, they did a really smart thing. They hired the guy who, like, 20 years ago did the Google Books project of scanning millions of books into Google. Yeah, remember that, like, free service we had in college? Well, that guy started working with Anthropic and bought a million used books and destroyed them by slicing off the spines.

Starting point is 00:06:22 He split Tolstoy in two, which begs the question, why destroy books? Are you anti-book, Anthropic? The reason they bought up the books and destroyed him, Jack, was because it's hard to scan books in a photocopier. Like, we've all been there. Like, is this thing working?

Starting point is 00:06:35 It's easier to scan a book if it's just a stack of pages that are not bound to each other. I mean, honestly, we'd love to talk to the guy Anthropic hire to spend six months destroying and copying books. Yeah, really weird gap year that that guy did destroying those books and scanning them. Don't tell anyone. It's all being done in a top secret warehouse. Actually true. Right.

Starting point is 00:06:55 So the reason we know about this is that authors and publishers have sued Anthropics. in court, arguing that feeding these books into the LLM is an unlawful use of their books. So this court case, it even revealed an actual photo of a giant warehouse with millions of despine books. And every day, trucks and trucks took the pages and sent them to a recycling. It was like a really weird operation. Basically, Anthropic was eaten Jane Austen for breakfast. So Jack, what's the takeaway for our buddies over at Anthropic?

Starting point is 00:07:25 You are what you eat. And each chatbot has a different diet. Yeti's Anthropics Claude chatbot, it's believed by some to be better at writing than other chatbots are. And now that you've heard this story, the reason for that is clear. Claude has a very book-heavy diet. Because Anthropic was chewing Moby Dick. Books, they are high-quality yeties. They're written by humans who put in work.

Starting point is 00:07:48 They're edited by humans. They are chosen by human publishers. On the other hand, Grock's diet is totally different. Elon's Grock is a very tweet-heavy diet. so it's inclined to be crude and troll people, just like the text it's consumed. Google's Gemini, it's consumed the transcript of every YouTube video, so it sounds pretty YouTubey. And Open AI, having started years before the rest of them, has pretty much eaten everything,

Starting point is 00:08:11 except for those million physical books in that warehouse. Sebastian's, if you want your chapbot to be a five beta Kappa English major, you choose anthropic. Because you are what you eat. And Claude has read every book in the bookstore. Literally. For our second story, Chipotle's earnings just reviewed. It has a favorite customer. People who make $100,000 bucks a year or more. Because in the

Starting point is 00:08:36 K-shaped economy, you have to pick a side. Yeti's. Earlier this week, Jack and I did a whole story on PepsiCo, the first deflation situation. Pepsi cut the prices of Doritos, Cheetos, and Fritos. Uh-ohs. By 15%. Because consumers have been pushed back on prices and buy in store brand chips to save money instead. Chippotle's earnings showed a similar price pushback from consumers. Yes, they did. Comparable sales fell for the second time in three quarters at Chipotle. So, Chipotle is going to cut prices just like Pepsi did, right? Pivot to budget burritos. I'm sorry, Jack, pause the pod. That ain't the situation in the burrito line right now. Chipotle is not getting cheaper at all. In fact, yesterday they announced the opposite.

Starting point is 00:09:20 They're raising prices by 2% this year, which by our count is like the 10th time since the pandemic began that they're raising prices. This time the burritos buying me. I mean, your post-workout's Afridas Burrito Bowl, Jack, just got a whole lot priceier. I know. Gwok was already extra. And now this. It's extra, extra, extra. So why does Chipotle think that raising prices in this economy is an okay thing to do?

Starting point is 00:09:43 Well, this is what Jack and I found fascinating yeties. Chipotle has a favorite customer, and that customer is making $100K. That customer is the Goldman Analyst who has a Hampton's weak time share. And that customer is the millennial millie with the Sapphire reserve card next to the MX Platinum card. It's the dink kicking it in Cabo this weekend. That's who Chipotle knows is crushing burrito balls three days a week. And so it is at this point, Jack and I should sprinkle on the context about the K-shaped economy. You've heard it before.

Starting point is 00:10:08 The wealthier are doing better. They're the upper leg. The low-income people are doing worse. They're the lower egg. The middle is getting squeezed. So Chipotle is picking sides. They're choosing people making $100 grand or more. In fact, in Chipotle's earnings, they revealed that 60% of their customers are high-income households

Starting point is 00:10:25 making over $100,000 bucks a year. They mentioned $100,000 five times. on their earnings call. We counted it. They said it five times. And because of this new data that they got last week about that $100,000 income, they're making this move. Chipotle is confident to lean more into those high-income earners in a quote-unquote more meaningful way. But Jack, what about for the people making below $100,000 a year? Like, are they even allowed into Chippole anymore? Chipotle said that tax refunds are supposed to be bigger this year, so that can pay for the 2% price increase. So Chipotle is willing to let the guy with the student loans trade down to

Starting point is 00:10:59 Taco Bell for the time being. Basically, that's what Chipotle said, yes. Kind of an audio situation. But we should also math the math on this thing, right, Jack? You want to whip out the whiteboards? Chipotle must figure they could cut prices to make that lower 40% happy, those making less than 100 grand. But if they did, they'd be leaving more money on the table from the upper 60%. Chipotle stock is down 32% in the last year. They realize they have to do something. They have to make a change. So they're going upstream instead of trying to go mainstream. Chipotle, why stop here? I mean, you keep going upstream. Caviar on that carnitas, Jack?

Starting point is 00:11:32 No, that is not a good flavor combination, Nick. Yeah, I know you. You want the barbacoa made with A5 Wagyu flown in from Japan, if I know you. I thought it was Barbacua. This is why we can't get into a love in Madison Park, Jack. So Jack wants the takeaway for our buddies over at Chipotle. In the K-shaped economy, you have to pick aside. So, Yeties, this is wild. We've got two case studies this week in two brands facing the same exact.

Starting point is 00:11:57 problem, but opposite decisions. Pepsi saw sales decline and lowered prices. Chipotle saw a sales decline and is raising prices. So we know what you're wondering, like if your business is facing the same problem, which one is right? Do you go with Pepsi or do you go like Chipotle? The answer is yes. Both Pepsi and Chipotle were right because it depends on your customer. Pepsi aims for scale, mainstream, a wide audience, so they're following down the K curve by lowering prices. Chipotle's aim, on the other hand, is to go premium. They're more shake shack to make. They're more shake, McDonald's, so they're following up the K-curve by raising prices. Add it all up, Bessies, and in this economy, you probably have to cut prices or raise them, but either way, you have to

Starting point is 00:12:36 pick aside. Now a quick word from our sponsor. For our third and final story before the weekend, Bad Bunny is performing the Super Bowl halftime show, but what about this man's business? We found the growth hack that made Bad Bunny bigger than Taylor Swift. Drew Stubbony. Drew But Jack, let's start with Apple. Because Apple Music has sponsored the Super Bowl halftime show since 2023 for like 50 million bucks a year. Yeah, but none of that money goes to the headline performer. Zero. The gig is free because you are paid with, oh, a whole lot of publicity, baby.

Starting point is 00:13:18 Kendrick Lamar had one of his tracks that he played at the Super Bowl last year, rise in streaming platforms by 400% after the Super Bowl. And this year, Benito Antonio Martinez-Acasio, aka. Bad Bunny is doing the same. The unofficial prince of Puerto Rico. Now Yeti's, Latin music is just 9% of total streaming in the United States. And yet Bad Bunny was the most streamed artist of the year last year on Spotify. In the last six years, there's only been two people to hold that crown. Bad Bunny won it four times, and Taylor Swift won the other two.

Starting point is 00:13:51 That's right. Bad Bunny is beaten Taylor Swift, and it all goes back to a church choir in Puerto Rico where he began singing. In high school, he was bagging groceries in Puerto Rico, while writing lyrics on the side and eventually uploading his tracks to SoundCloud. He dropped out of college and eventually came up with the name Bad Bunny for his musical career. Why was that Jack? Well, Nick, when he was a kid, his parents made him wear a bunny costume for Halloween. That's rough. He did not like that costume. So he became the Bad Bunny. And he knows that this was a marketing opportunity because he realized every time someone saw a bunny, they would think of him instead. And basically

Starting point is 00:14:26 every lawn I've ever seen has had a bunny scamper across it at some point. But here's what fascinates us besties. Bad Bunny Inc. isn't just a diversified business, is it, Jack? It's the most strategically paradoxical business we've ever seen. Yes, music is Bad Bunny's number one source of income. In December alone, his 10 live shows he did grossed $100 million, according to Billboard. And he could have made way more, but he did a 31 show residency to support Puerto Rico after the hurricane in 2025, which boosted Puerto Rico's GDP by $300 million. Okay, so Jack and I then dove deeper into Bad Bunny's business, and we realized Pitbull walked so that Bad Bunny could run. Is that what we realized, Nick?

Starting point is 00:15:06 Yeah, I think that's an early takeaway here, Jack. Bad Bunny isn't doing an energy drink collab like every other celebrity out there. He is doing a restaurant. It's called Gecko in Miami, where six bites cost $160 as the tasting menu. But interestingly, Bad Bunny also launched a talent agency for Latin American athletes based in San Juan, Puerto Rico. It's called Rima Sports. It's the UTA for Latino athletes. MVP winner Ronaldo Ocuno Jr., he's on the team. All-Star Fernando Tatis Jr., also on the team. Both signed with Bad Bunny's talent agency. But Bad Bunny is also partnered with a range of brands so wide, they seem to conflict with each other. On the one end, Bad Bunny has a sponsorship with Gucci for luggage and Calvin Klein for underwear.

Starting point is 00:15:50 But Jack, Bad Bunny is also hawk in Cheetos at gas stations and promoting the WWE World Wrestling Entertainment in the ring. He's not just a celebrity or guest cameo or guest host of the WWE. He actually wrestles including a fight he did at the Royal Rumble and at WrestleMania. I'm sorry, Jack, pause the pod, but I can't think of many Cheetos eating Gucci owners who also know a stone cold stunner. I might be the only one, actually. I like all three of those things. Any marketer would say this is a mistake. And yet Bad Bunny is spanning luxury labels and budget ones like no other person or business can. Bad Bunny is a branding paradox and it's working. So Jack, Mike Check my check, what's the takeaway for our buddy, bad bunny, ink.

Starting point is 00:16:31 Constraints breed creativity. So Yeties, how has Bad Bunny gone so viral? Well, one fundamental reason is that he's turned a limitation into an accelerator. He speaks English, but he only sings in Spanish, potentially limiting his audience. And that Puerto Rico concert tour he did, the masses had to fly to Puerto Rico to see him. He didn't go anywhere else. But those limitations have differentiated him and driven awareness of him and unlocked growth for him. And you know what? Jack and I have seen the power of limits in businesses as well.

Starting point is 00:17:00 Like, remember the social media app, Be Real? You could only take one picture a day. That made it go viral. Ordle? You could only play one game per day. That made it go viral. Winner started with just 140 character limit and dating apps are now cap and swipes these days. The haiku poem, remember 575? It's limited to just 17 syllables. That's how you can create beauty. Vesties, Orson Wells once said that the enemy of art is the absence of limitation. The greatest growth hack is that constraints breed creativity. It works for apps in Silicon Valley, and it's working for bad money, also in Silicon Valley, this Sunday. Jack, could you whip up the takeaways for us for the real Friday?

Starting point is 00:17:38 Anthropic will troll open AI this Sunday. It got here, though, by destructively scanning a million books. Yeah, because you are what you eat, and Anthropics Claude has eaten every single book in the bookstore. For our second story, PepsiCo is lowering prices, but Chipotle is raising them. Same problem, different solution. Because in the K-shaped economy, you got to pick aside. And Chipotle is choosing 100K. And our third and final story is Bad Bullying.

Starting point is 00:18:04 He was the number one most stream musician for the fourth time in the last six years beating Taylor Swift. The bad buddy growth hack, constraints breed creativity. But besties, this pod's not over yet. Here's what else you need to know today. First, speaking of books, Jack, Spotify is now selling physical books? Yes, because a lot of people read a full. physical book alongside the book they're listening to as an audiobook. We did not know that was the thing, but congratulations. You now have a solutions.

Starting point is 00:18:33 This is key, though. Spotify added a page match feature to show you what page you should start at to pick up where you left off in your audiobook. And second, Kalshi and Polymarket, the two predictions apps are getting a lot of attention for this weekend Super Bowl. The Patriots are the Seahawks. Who are you putting money on for the big game? Calli She and Polymarket also just opened grocery stores. What? Yeah, that's right. In a wild marketing move, this week, Kalshi made groceries free for a day at a grocery store in New York. If you want us to cover the story, drop a comment. And finally, the opening ceremony of the Winter Olympics is tonight in Milan, Italy, because Rome is putting the first ever tourism fee on their famous Trevi Fountain. So if you're visiting Rome this

Starting point is 00:19:14 summer, like I might, then you're going to have to pay a two euro fee to see it. Now, time for the best fact yet. This one sent in by legendary Eddie Richard Blythe from lovely Tulsa, Oklahoma. With all the bus surrounding AI's insane electric usage, I'm reminded of the ENIAC unveiled to the world in 1946. Built from thousands of vacuum tubes, this computer size would fill half a basketball court, required the power of 100 homes, and delivered just 5,000 calculations per second. Now, if that sounds fast, a modern computer chip, the size of your fingernail can do trillions of calculations every second, using a fraction of the power. So I think our planet is way overdue for another hardware revolution.

Starting point is 00:19:56 That is insane. Also, the ENIAC computer he referenced. It's actually an acronym. The electronic, numerical, integrator, and computer. The best fact yet, within the best fact yet. Yeties, you look fantastic this week. And Jack, I also thought you looked fantastic back when we were roommates and you would go to the football games in college and you would bring that coach bag with you. The Kate Spade? That's the one you used to bring, right? That's where you brought your equipment. I can never remember.

Starting point is 00:20:23 Dad, if you're listening, this is all misinformation. Got the photos, Jack. We've got the photos. Besties, if you haven't yet, you got to buy tickets to our live show in New York and D.C. We're almost sold out, and we want to see you there. March 11th, Arlington Draft House. Nick and I will see you there. April 8th, Irving Plaza.

Starting point is 00:20:43 Nick and I will see you there. And if you're wondering, yeah, we'll bring the Birkins for the live podcast show because we got to put our microphone somewhere. Happy 5-star Friday drop down to give us a rating and review, and Jack and I will see you on Monday. Can't wait. Before we go, a happy birthday to legendary Eddie, Sasha Gang, and Saratoga Springs, Utah, fifth year in a row getting a shout-out on the pod. Congrats, Sasha. Happy 27th birthday to Jake Nembard in London, celebrating in Thailand with his girlfriend, a couple of the T-boys together.

Starting point is 00:21:18 And a happy first birthday to Stefan and Corey Hoffman's baby in Chicago. That baby already doing logistics. And happy birthday to Ale Patron in New York City. And Kelsey Albertson had the best birthday yet over in Queens. Happy birthday to Sarah and Camille in Maryland, a mother and daughter with back-to-back birthdays. And a happy birthday to Joe Morford over in San Francisco, dad of the year because his daughter, Bella,

Starting point is 00:21:40 is listening over in New York City. And happy anniversary to Emily and Alex White, who are celebrating in San Diego and filling themselves with cheese and meat and wine. And Deirdre Allen's retiring down in Austin, Texas, but we'll be seeing Deirdre in the front row of the Austin show, Jack. Can't wait to see you there, dear Joe. And a big shout out to Zach Isaacs, the Middlebury Panther, who I met last week at Middlebury,

Starting point is 00:22:01 but the whole movement team is crushing it. Yes, they are. We'll see you in San Francisco, Zach. It's a panther. I don't know. And Ross Shanker in, the Yeti who tipped us off to the NFL handbag story. Thanks for the heads up. And a correction from Ali Doglish, who's pointing out that Kerry on Sex in the City,

Starting point is 00:22:17 she didn't drink martinis, Nick. She drank Cosmos. Same glass, different drink. But in our defense, I'm a total Samantha. And finally, a shout out to Wilder. Nick, a live mouse was in our car today. Wilder was freaked out. And in the backseat, he said, I'm trying to be brave, but I'm not feeling brave right now. The Pod Sun, though, is so brave. You can be scared and brave at the same time, and that's what you were yesterday, Wilder. That sounds like the plot of a future Pixar movie. This is Jack. Nick on stock of Shake Shack. We both own stock at Chipotle and Apple, and we both own some Bitcoin.

The Best One Yet - 🐰 “El Supertazón” — Bad Bunny’s business. Anthropic’s book destruction. Chipotle’s $100K rule. +Football Birkin Bags

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.