The Best One Yet - “Facebook fact-checkers vs. 4.75B posts per day” — DoorDash’s not First-Mover Advantage. SoundCloud’s desperate $75M. Facebook’s hires Reuters.

Episode Date: February 13, 2020

Facebook has added a new addition to its army of information regulators for the election year, but we’re looking at their odds (spoiler: not great odds). SoundCloud snags a fresh $75M in funding from SiriusXM, but the music platform still hasn’t found itself. And DoorDash’s CEO sat down for an interview with Fortune that revealed how First Mover advantage isn’t an advantage.Learn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. And this is Snacks Daily. It is Thursday, February 13. You know this is the best one yet. It's way better than what we did yesterday. This is a T-Boy. First of all, because the number of coronavirus cases dropped two days in a row per official Chinese reports. They didn't know it could go in that direction.

It can. Yeah, it's a very good sign. Maybe want to double-check those Chinese reports. Yes. First Story, Jack. Facebook added a new warrior to its truth army, but we're worried it's too little, too late. We're looking at their odds of defeating misinformation in this election. election season. Our second story is the

half a corner of the day. SoundCloud snag $75 million in fresh funding from serious XM radio. It's just trying to find itself. It's pretty much Justin Timberlake pre-insink and Justin Timberlake post-insenged. If you cut off Justin Timberlake's hair and see where the bleach begins, that can give you like his age.

Ramen noodles. Third and final story, Jack. Jordash is the leader of the delivery wars. It's like marginally winning. No one's really winning the delivery wars. We're all losing. We're all losing. Oh great. Delivery war. A fifth delivery fee. Thanks, Postman. But the CEO of DoorDash doesn't believe in the first mover advantage. He's bringing unsexy back.

We found that story really interesting. Now, before we jump into all that, Valentine's Day is quickly approaching. Did you get the olive garden breadstick bouquet? We told you about it on Monday. If you didn't order it in time, it's not going to come in time. I'll tell you. They're probably not sold out, so you still have time. Good news.

We found a backup gift for you. Hines came out with like a ketchup-flavored truffle. But it's not just Valentine's Day. Today is Galentine's Day, baby. What's Galantines Day, you may ask? It's when you leave the husbands and boyfriends at home and just kick it breakfast out with the ladies. It's ladies celebrating ladies. Now, the Google search volume for Galantines Day spiked and stayed up since that fateful Parks and Rec episode

when Leslie Dope first uttered Galentine's Day in February 2010. And they had a very nice breakfast buffet situation. Now, this is all courteous of Tiffany Schmidt from Los Angeles, but who currently lives in Ann Arbor. She is so Michigan that Mitt is in her name. I think you're supposed to say, how Michigan is she? She also points out that Valentine's Day is not just for couples. No, in fact, Valentine's Day gift for blank, that search in Google, does not always come up with who you may expect to come up. Sure, you got husbands and boyfriends right there at one and two.

But you also got moms and kids in there, so you can celebrate Valentine's Day with that. Here's the crazy thing. Valentine's Day gift for girlfriend is like not even in the top five Google searches. Guys really got to pick it up. Or they're just so thoughtful they don't need to Google. We also found out that 43% of people by charge. For themselves. If you're a lady, or even if you're not a lady, you can celebrate Galantines Day.

Today, I'm cooking dinner for Alex. I think you're not supposed to be there. I think Molly did her own Galentine's Day. I think we need to rediscuss the term of definition. I'm crashing Galentine's Day tonight. But then tomorrow, even if you're not with somebody, you can still celebrate Valentine's in a healthy way. You're tuned in the snacks daily.

We spoke to the lawyers and we got to get something illegal out the way. The snacks are about to hear rain food. It's air candy. They don't reflect the views of the robberhood. family. It's all informational just so you know. We're not recommending any securities. It's not a research report or investment advice. Not an offer or sale of a security. Right. Snacks is digestible. Business news for you. Robberhood Financial LLC. Member Fenra slash SIPC. For our first story, we got our half a corner of the day SoundCloud, which just got a life-saving $75 million

investment from Sirius X-M. Do you remember Sirius X-M acquired Pandora? I feel like I forgot that happened. By the way, SoundCloud founded in Sweden, now headquartered in Berlin, constantly studying abroad. We don't know what's going on with the ears over in Sweden, but that's also where Spotify was from came out of nowhere. Now, my first interaction with SoundCloud was from my buddy Timmy. It was back in 2012, right after the Giants won the Super Bowl. Timmy likes a good bass. Let's put it that way.

He introduced me to some epic Avicchi dubstep remix cover mashup beats. Snackers. That is the entire 2012 in my ears. He lives in Habiza, it feels like half the time. So SoundCloud is one of the OG music streamers and shares, but like a high school band, it's still trying to figure out like, who am I? Am I going to part my hair on the right or the left? Is this the YouTube but for audio instead of video?

Is it the MySpace to Spotify's Facebook? Total identity crisis at SoundCloud. Mom, can you hand out Rice Krispies treats at the show tonight? We need people to get engaged. Now, what we know is it is a platform for like not yet professional artists. You know Chance the rapper got his start on SoundCloud. Elon Musk created some beats a couple months ago. He dropped it on SoundCloud.

Jack and I have been planning the idea around like starting up a band. We're going to call it P snacks. The P is silent. We'd love if you could subscribe to our channel on SoundCloud. Spelled P snacks without the P. We're working on the name. But SoundCloud also wants a list musicians like Adele. Right.

Well, first of all, who wouldn't want Adele? But you got to pay Adele. Pretty sure Adele either just broke up with someone or is about to break up with someone. Her pipes are incredible. Now, the company brought in $127 million in 2018. They're planning to double that in 2020. Just like Apple Music and Spotify, you can pay $10 and listen to music without ads on SoundCloud. Right.

Or don't pay $10 but have to listen to ads. Funny thing, we don't know anyone who does. I don't know anyone who's sound like. We don't. But musicians, interestingly, can pay SoundCloud to get data on like what's happening with their songs. What's happening with our buddy Timmy listening to that of each time? When Jack and I dropped the Peaceknack song on SoundCloud, we will probably be doing this. So the Wall Street Journal describes this fresh, $75 million check in SoundCloud got from Series XM as a shot in the arm, which I think means like a burst of energy.

You never want to take hits from the Wall Street Journal like that. When they're getting creative with ways to knock you, it's not a good thing. I guess they're describing this as like a Red Bull. So Jack and I whipped out the history textbook and looked back on what's been going on with something. SoundCloud and why it struggled over the last six years. Back in 2013, when the Giants had just won the Super Bowl and I was first introduced, again, Timmy, blaring the beats. They struggled to get license agreements with the big three record labels, including

Warner Music, which is about to IPO. And which happened to be an investor in SoundCloud. Yeah, it's strange to compute that Warner wouldn't sign a deal with the company it was invested in it. It's like your friend saying, I got your back and then saying, by the way, I'm not, I don't really want to hang out. A year later, SoundCloud tried to partner with Twitter to create a music app like Spotify. But again, they couldn't get the music labels to sign on to get the music.

If you don't get the big three labels to sign up, you can't get good music without pirating it. So then in 2015, they had this stroke of luck. Twitter considered acquiring SoundCloud for $2 billion, allegedly. But the deal fell apart. And then the next year, Spotify thought about acquiring SoundCloud. Incredible. Spotify walked away. Spotify's like, yeah, you know what?

There's like a, we're not going to sit with you at a lunch table situation. They're like you shouldn't have left Sweden. It's just getting awkward. In 2017, things really got bad. accompanied the lay off like 200 people. That's why we don't think this 75 million is a shot in the arm. We think it's chicken soup for a fragile soul. Someone that really needs some help.

Get these guys a soup spoon. Jack, what's the takeaway for our buddies who we can hear over at SoundCloud? SoundCloud never got over the platform hump. Snackers, there is a catch-22 with platforms like SoundCloud. They have a two-sided marketplace. They need to get consumers and creators to join the platform like SoundCloud. They need consumers to listen because that's what generates ads to pay the artist. But they need the artist to create something to listen to.

And without both sides, it doesn't work. Platforms face a constant chicken and the egg situation when they launch. SoundCloud's big problem was they never got the creators. Right, Apple and Spotify, they spent big money up front and got really close relationships to sign on the record labels and get the creators. SoundCloud took way too long to figure that out. Should have got closer with the record labels. Probably should have sold for $2 billion to Twitter.

For our second story, with election season getting extra Facebook adie, Zuck just hired four more fact checkers. Iowa caucus is over. No more deep fried everything. New Hampshire is done. No more pretending you know how to ski with like the pizza wedge to French fries situation. You don't know how to ski, Pete Booty, dude.

Super Tuesday is less than one month away. And that means the Facebook ads are coming. Brace yourself. They actually come out of nowhere. They're not going to be fun. They're going to be dirty. They're going to be negative. Now the context here is that Facebook

expected to make only 0.5% of its revenue from selling political Facebook ads. Okay, okay. But the other 99.5% of its revenue comes from when just people post things and get people to check out Facebook. And guess what people are going to be posting about in

2020? Misinformation. A lot of the stuff about the election. Possibly lies, possibly false things, possibly dark schemes. Now, here is the news that we noticed with Facebook. It just hired, get this, wait for it. four Reuters journalists. Four.

Four million? They definitely should have done like a press conference with like the sit down and they walk on stage like the athletes. You must mean 400,000. No, no, I meant four. I meant you can count this on one hand. All right. So here's the thing about those Reuters journalists. They're like the top, top fact checkers on Facebook.

These aren't just Reuters journalists. Look at their LinkedIn. It's like, The Reuters Journalists. When Russia sends it's MacArthur Genius Grant award. winners to mess with our election, you're going to call those Reuters journalists. And that's because they're going to be focusing on deep fakes, the videos that have been altered to look real. These Voiders journalists, they've got eyes like hawks. Now, a deep fake is a video. You're like, I swear, that's definitely that person doing that thing. Someone's definitely

going to deepfake this pot at some point, and we are definitely in trouble when that happens. But it's often. It's not actually that person. Snackers, it's not going to be Jack Me. This is Nick and this is Jack. Here's how it works. Those deepfakes will get flagged as suspicious. And then those Reuters, check it out and decide whether the deep fake is actually a true video. Right. Or if it's false or if it's in between and partially true. Picture like those scenes in Gladiator where they walk out and they're like

thumbs up, thumbs down, someone's going to live or die. Right. Yeah. Commodus. He's a great guy. And then they post the results on a blog. And then they alert Facebook if that post was false. Facebook labels it false and then pumps a break on the algorithms.

But here's that funny thing. So that 80% fewer people see that punch. We know you're thinking, why not 100%? Great question. Great question. Probably should be 100%. Or send an email afterwards saying, hey, if you just saw this, it was fake.

Right. There's nothing in this new policy that can erase the false perception you may have got when you saw a Facebook post that had false information. I believe there's an old saying, what hath been seen cannot be unseen. Shakespeare?

I think it was comedic. So, Jack, what's the takeaway for our buddies over at Facebook? We're calling this group the factual accuracy information league or fail, for sure. Exactly. Write that one down, Snackers. It's not just Reuters who's trying to squash false things from spreading on Facebook. No, there's other organizations on Team Fail, like the Associated Press. Right. And Facebook's also got factcheck.org on board.

It's also got PolitiFact and 25,000 other human independent contractors. And because humans are so human, they also have a bunch of machine learning. Right. They've taught machines to say like, okay, if something is posted in all caps, it might be false. We should double check that. The only other people who do that is my mom. mom who wrote a whole email not realizing she had caps lock on it. Right. So we got 25,000 humans, fact check, Associated Press, Reuters and PolitiFact, all fighting fake stuff on Facebook. But here's why that's not enough. There are an estimated 4.75 billion posts on Facebook every day. There is no way.

That tiny army can stop all the fake stuff that's coming on Facebook. It's like you're throwing them at Deneres's Dragons. You're throwing them at Deneres's dragons and the White Walkers. At the same time. Good luck for Reuters journalists. billions. We're talking billions with a B. Remember Snackers, these fact checkers, they won't keep you safe. Think before you share.

That's why you've got to be vigilant. You've got to investigate. You've got to check the source of anything, especially if it's all caps. If it's all caps, don't share it and probably don't believe it. For our third and final story, this is a wild one. Jack, did you do mayo on the side? Not if there's eggs that mail. I go

vegan a only, baby. It's extra egg. Extra egg minus the egg. Now, Dordash is the leader of the delivery wars. But the CEO just confessed, there is no such thing as first mover advantage. We checked out the interview between Alan Murray of Fortune Magazine and Tony Shoe, CEO of Doordash. And we were blown away by how they talked about the delivery wars. Because we talk about the delivery wars a lot, but we don't talk about the leader of the delivery wars. Sometimes we talk about Uber, which has Uber eats. It's actually

DoorDash that is leading in the delivery wars. Snackers, get this. Four out of ten chicken teakamasol bowls are delivered by DoorDash. That is a law of chicken teakamasaw. Also, Jack and I found this stat fascinating. Fifty-nine percent of customers who use DoorDash exclusively used DoorDash. That is very high faithfulness in an industry where honestly, I just check out whichever app has the lowest delivery fee. I can't believe you said that here. But 59% of DoorDash customers are loyal to DoorDash not using anybody else. Meanwhile, Postmates, only 43% of their customers are loyal. Postmates, you may want to time of talk. Postmates is basically a side piece.

By the way, I think I know why. It's because you have a bunch of fees that are disguised as other fees Jack and I are concerned about this. Now, the crazy thing, Doordash was not the first mover. And that's why CEO, Tony Shue, says the first mover advantage actually isn't a competitive advantage. Did you get, did you hear that? Did you hear that noise? What is, that was a bunch of venture capital firms exploding when they heard first mover advantage isn't actually a thing. I think a bunch of Patagonia Vest just like disintegrated.

I think six startups just folded in San Francisco. Basically, Tony Shue's like, the first. Fast follower, not the first mover. They're in an advantage because they can learn from others' mistakes and then do that core thing better than the first movie. Snackers, typically what you hear in startup circles is you've got to be the first one into the market to own that market. Tony's saying it's actually the opposite.

You should just kind of hang out and wait. The first one to create an app to deliver food for restaurants was Grubhubb, way back in 2004. And around that same time, Seameless got involved in food delivery. Postmates was only launched in 2011. DoorDash didn't even launch. until 2013, when Grubhub was like a full-grown adult. And by that time, Dordash discovered that many of the components of food delivery is just a commodity.

It's a total commodity. It means it's just the same no matter where you get it. Customer experience, if you order a Suvla chicken gyro delivered to your house, it's going to be the same suvla chicken gyro, regardless of the app that you used. You didn't care what app you used. You're just hungry for that suvla chicken gyro. And that's why the Grubhubbhub CEO infamously referred to his customers on an earnings call, as promiscuous and was like judging us for using the app with the lowest fees. He knows, and he sees you, Jack, flipping through.

He's looking right out. He's looking at you right now. He's listening to he's looking at. Tony Shue argued even the software, remember, these companies are tech companies. DoorDash is a tech company. He said even the software, the like proprietary core part of the product, that's a commodity. They're all the same. So, Jack, what's the takeaway for our buddies over at DoorDash?

DoorDash knows it's the unsexy stuff that's going to win the delivery wars. we're talking operations. Jack, what's the, uh, the throughput rate on this thing? What's the average door-to-door delivery time? What shape optimized container is best for delivery on a bike vehicle? Tupperware or Pyrex? That's the unsexy stuff that DoorDash is crushing. It doesn't matter if like Postmates' logos has like an ET-like creature.

It looks like it's farting stars. Exactly. E.T. is farting stars. That's the sexy stuff. It's the unsexy stuff that wins food delivery. It's because all of those things that DoorDash is crushing, that affects whether your food shows up on time. And when it comes to food delivery, you're focused on whether or not that chicken sandwich got to you on time.

If it did come to you on time, you had a great experience, hopefully, if the food was good, and you're more likely to return to that same app rather than try out another one. Snackers, 80% of American households are within delivery distance of DoorDash's independent contractor workforce, aka Dashers. AKA the Dashers. And since DoorDash focused on that unsexy part, whether you can actually deliver something on time physically, it's winning the delivery wars. Jack, can you whip up the takeaways for us?

SoundCloud. Just got a $75 million bowl of chicken soup. Nice. From Sirius X-A. But it couldn't figure out how to deal with record labels and get over the platform hump. Second story, Facebook just added four Reuters journalists to the factual accuracy information league fail for short. It fails not going to stop misinformation from spreading this election season. That's the problem here. Third and final story, DoorDash is leading the delivery wars, even though it's not the first mover.

Its operational efficiency is better. It delivers on time. Snackers, time for our snack fact of the day. This one, you're going to want to write down. It's going to make you think. It's from Tyler Sorensen. Nick, we've heard of arachnophobia. Yeah, fear of spiders.

You've heard of claustrophobia. Fear of closters. Fear of clostres. You're just afraid of, like, being in small spaces. There is also a word for fear of long words. But here's the kicker snackers. Jack and are going to read this. We're going to have to take a break in the middle for two brats.

Hippopato monstrosa kiddofobia. We repeat, hippopotamospobia. That is fear of long words. Brought to us by Tyler Sorensen from Newport Beach, California. By the way, Tyler. Yes, Tyler. My Venmo is John Dash Kramer. You can send me the $5 you promised on Twitter.

Snackers, it's a very public inside joke we have with Tyler going on on Twitter right now. I think that's the pot. I think that's the pot. Thank you for snack with us, everybody. You guys looked fantastic. Happy Galentine's Day. See you tomorrow. We can't wait.

The Robin Hood Snacks podcast you just heard reflects the opinions of only the hosts who are associated persons of Robin Hood Financial LLC and does not reflect the views of Robin Hood Markets, Inc, or any of its subsidiaries or affiliates. The podcast is for informational purposes only and is not intended to serve as a recommendation to buy or sell any security and is not an offer or sale of a security. The podcast is also not a research report and is not intended to serve as the basis of any investment decision. Robin Hood Financial LLC, member FINRA, SIPC.