The Best One Yet - 🎂 “Happy Birthday, Napster” — Napster’s 25-year legacy. Starbucks’ 1-hour wait problem. Amex’s Gen Z credit card love.

Episode Date: June 4, 2024

Starbucks is facing 40-minute waits… and you can blame Iced Latte Logistics.Happy 25th birthday to Napster… The OG disruptor is gone, but its legacy is thriving.And Amex just revealed the biggest divide between Millennials & Gene Z… Credit Cards.Plus, the #1 most controversial product in the sky is… the airplane foot hammock #SkyMallMag$SPOT $SBUX $AMEXWatch us on YouTubeTheGet the Saturday Newsletter: tboypod.com/newsletter  Submit Facts & Shoutouts: hereShoutout Requests Submit The Best Fact YetSocial: Follow us: on Instagram, TikTok, And connect with us on Nick’s LinkedIn & Jack’s LinkedInAbout Us: From the creators of Robinhood Snacks, The Best One Yet (TBOY) is the daily pop-biz news show making today’s top stories your business. 20 minutes on the 3 business, economics, and finance stories you need, with fresh takes you can pretend you came up with — Pairs perfectly with your morning oatmeal ritual. Hosted by Jack Crivici-Kramer & Nick Martell. Hosted on Acast. See acast.com/privacy for more information.

This is Nick, this is Jack. It's Tuesday, T-Boy. Tuesday, June 4th. And today's pod, it is the best one yet. It's a T-boy. The top three pop business news stories you need to know today. But I'm sorry, I guess I'm competing with Glenn Powell, Jack. I watched anyone but you.

The Glenn Powell rom-com from last year. It was delightful. Hey, Eddie, there's nothing Jack and Top talking about than the plot of this rom-com, baby. Easy laughs. Sidney, Sweeney, Wedding in Australia. It was delightful. More abs than there are minutes. In the meantime, apparently I got to up my game.

I got to compete with Glenn just to get Jack's attention these days. Hitman comes out this week. Also a Glenn Powell movie. When will we hit Peak Powell? In the meantime, Yetis, Jack and I whipped up three fantastic stories for today's show. Jack, what's on the pod? For our first story, people are reporting 40-minute waits to get their Starbucks coffee. They are Frapachino freaking out at Starbucks right now.

But Jack and I found a solution for Starbucks that will come. them almost nothing. For our second story, it's American Express. They just revealed a generational divide between credit card users. Millennials hate credit cards. Gen Z loves credit cards. And our third and final story.

Spotify just raised prices again, but the timing couldn't have been more perfect. Because this week is the 25th birthday of Napster. So Jack and I want to talk about Napster. But Yeties, before we hit that wonderful mix of stories. Fantastic mix of stories. always love this mix for a T-boy Tuesday, Jack.

I am checked into my flight. Are you checked into your flight yet? I'm checked into my flight, man. I got to get that upgrade ASAP. Nick and I are headed to the airport right after this podcast to head to L.A. for some in-person work together. Now, Jack and I are heading to the airport

from the podcast studio, but funny thing we expect to see on the airplane, and what is that, Jack? Hammocks. Specifically, Flying foot hammocks. Flying foot hammocks. Yeties, you can hang your feet from 30,000 feet. Flying foot hammock is the kind of

product design that makes economy class feel like Economy Plus. But Jack, before you go any further, can we sprinkle on a little context here? What exactly is the flying foot hammock? Um, only the top selling travel product on TikTok right now, Nick. Yeties, for 25 bucks on Amazon, you can get a hammock for your feet that hangs from the chair in front of your seat. Let your legs relax on a hammock and takes the stress off your thighs and butt, which are sitting on the seat. It's patent pending and it's giving Sky Mall magazine vibes. And you kind of have to experience it to understand it.

Yeah, in fact, a podcast doesn't do it justice, does it, Jack? The Wall Street Journal just did an article on airplane hammocks. Because get this, Yet is the Flying Foot Hammock is the most controversial plane product since the ostrich napping pillow. Apparently, people next to you are going to be really ticked off if you've got one. Get this, Alaska Airlines, they just banned the Flying Foot Hammack. American Airlines says it's up to the crew, whether to ban them or not. And Delta Airlines, what did they say, Jack?

They say no comment. They don't want any place in this comment. And Bastian doesn't want to get involved. Now, what do we think? We are all for the flying foot hammock. I mean, is it just us, Bessies, or our airplane headrest feel designed to be uncomfortable? Every time I take a red-eye flight, I swear, there's a trench where my back is supposed to be, and the headrest forces my head to awkwardly dangle forward.

So to get right to the takeaway here, anything that makes sleep and easier on an airplane is something that should be approved for the airplane industry. Anything that helps us get Z's is good with us. So besties for T-boy Tuesday, Jack and I, we just want to know. What's your flying sleep hack? What's the one product to help you pass out on the airplane? Because I'm about to take a red-eye flight on Thursday heading into Friday. And I could use some help.

And the melatonin? It only gets you so many miles, man. So please, please comment on Spotify, YouTube, or Instagram with your travel hack. Yiddies, we got to know what is your mid-flight sleep hack? Save the Flying Foot Hammock, or actually send one to my hotel, so I have it in time for my red-eye flight. Make that too. Yetis, let's hit our three stories. Starbucks's stock hasn't grown in five years. Wow. And the big reason why, what is it, Jack? The wait. It's the wait time.

40 minutes for a Starbucks is a huge problem for the company. But we found a sneaky and brilliant solution. Yes, we did. But yet, it is a funny thing. In the amount of time that you listen to this entire Tea Boy podcast, you probably will not get your coffee. Because when it comes to a Starbucks coffee, we're all getting a sprang. So, impacients right now. Yetis, your cartado is tardy. Your cappuccino? Cappuccino. And your latte is late.

According to Technomic, 8% of all Starbucks orders right now have a wait time that is between 15 and 30 minutes. And Jack, what was that stat just five years ago? Five years ago, that was unheard of. Now, 8% of orders take 15 to 30 minutes. And 1% of the time, it takes an hour to get that, Cortado.

Are you kidding? Are they growing the... coffee being in the store? I'm telling you, Jack, over at Duncan, Darlene isn't keeping you waiting for that cul-a, is she, man? And the wait times at Starbucks, they are weighing on the stock. Two pumps a hazelnut? She does that in two seconds over at Duncan. But over at Starbucks, the stock is down 40% in the past 12 months, and it's lower today than it was five years ago. And those long wait times are a big reason for last quarter's unprecedented milestone for Starbucks. Starbucks sales dropped last quarter for the first time in four years. For the first time,

since the pandemic. So, Yetis, while you are casually waiting in line around the corner for another 30 minutes, we may as well tell you what is the big driver of this espresso impassions problem over at Starbucks? It's Starbucks's secret staffing app. Get this, besties. Bloomberg interviewed the baristas over at Starbucks, and they blamed an algorithm that Starbucks uses to allocate its store labor. Starbucks has a proprietary staffing app that predicts the number of orders that are going to come in at different times of the day, and then staffs the store with the right number of employees to deliver those orders. It was like 70 degrees and sunny on a Friday. They're saying, hey, more Frappuccinos, get more Franks, work in the bar, please. But during the dead hours, like, I don't know, 11 a.m.

on a Tuesday, they take away a couple employees to save some money because there aren't that many orders. But yeties, here's the funny thing about that algorithm. That algorithm isn't taking into account the latte logistics. Because the majority of orders at Starbucks these days are cold And a lot of them are iced latte cold drinks. Yeah, we jumped in tea boys out, and it turns out that every shot of espresso that you add to your Starbucks drink adds 26 seconds to the production of that drink. And the algorithm may not realize that. So if you want a double shot for Appuccino, you better be prepared to wait a couple

extra minutes on that thing. It also looks like this algorithm is designed to save Starbucks money, but it's also simply stretching the baristas out too thin. Because get this, since 2020, Starbucks is out of the thousand U.S. locations. their footprint. But they've kept the same number of baristas despite adding a thousand new locations. Now, funny thing Jack and I noticed,

it's that Starbucks has like a really new creative idea to deal with your espresso impatience. To deal with them stretching baristas out too thin. Starbucks has added countdown clacks to their locations that like flash red if the barista talks to you for more than 30 seconds. This is insane. So if the barista is having a nice conversation with a customer,

there's going to be a red flashing, that like tries to scare everyone into ending the conversation. Basically, Starbucks borrowed the same idea from the NBA and is sticking it on their baristas whipping up the fras. Yeah, it's like a shot clock. I gotta say, a red flashing, guilt-inducing countdown clock feels kind of cold and inhumane. Now, yeah, it is.

The easiest way for Starbucks to speed up the wait times, it's pretty obvious. Add more baristas. But that'd be more costly. It looks like Starbucks doesn't want to do that. On the other hand, Jack and I happen to have another idea. clever idea. Nick told me about it earlier. I love this idea. We got really excited, so we made it our takeaway. So, Jag, what's the takeaway for our buddies over at Starbucks? To fix the wait

time problem, Starbucks should take a lesson from the London subway. Yet he's the biggest complaint about most subway stations worldwide? It's the wait times. Well, the London subway, known as the tube, they tackled the wait time problem with an innovative new approach. Here's the interesting thing. Instead of shortening the wait time on the London tube, they decided to make the wait time more bearable. Instead of adding trains, they simply added countdown clocks to all subway platforms,

which commuters really appreciate seeing. It turns out more trains would be nice, but more transparency is pretty nice too. Because part of the problem of long wait times is not knowing when your thing is going to arrive. But if you know it's going to be there in five minutes, it's more bearable. Oh, and on top of that,

the cost of a transparent countdown clock is way cheaper than more and faster trains. So to fix wait times, maybe Starbucks actually just has to make the weight experience a little better. Maybe Starbucks should just add more clarity to the status of your orders minute by minute. Like the Uber app, they could say ETA of your drink is in four and a half minutes.

Or maybe they could just make the stores a little bit nicer to wait in. Yeties, we're always looking for technology to solve our problems. But sometimes the best solution is actually psychology. For our seconds. story. American Express. It's stock just hit it all time high. Because millennials have emotional scars that Jen's ears simply do not. All right, Jack, if we're going to talk about credit cards here,

can we go back 10 years ago? Where were we exactly, man? In our East Village apartment, figuring out who owes what for the Trader Joe's grocery bill we just got. I think our buddy Timmy dropped $75 on breakfast sausage and we were saying he should have to pay for the whole thing because we weren't going to eat it. No, I think Timmy was in charge of divvying out who owns what? With Venmo requests, and no one was fact-checking him. Why do we trust him to do it? You just don't trust Buddy Timmy with that kind of stuff, Jack. In the meantime, yet he's also 10 years ago.

The CEO of Amex was not in a good mood. The CEO of American Express 10 years ago said that the outlook for credit cards, the whole industry was, end we quote, disappointing. Yet he's a decade ago, Amex's stock was flat, its earnings were down, things were just not looking good at Amex. That little Trojan soldier on the Amex logo, I'm pretty sure. sure he was frowning that year. I don't see a smile on that face, Jack. But fast forward 10 years later to today, and American Express's stock has grown by 6x. Get this yet. He's MX's stock has up 40% in the last

year, and it just hit an all-time high. American Express has outperformed the S&P 500 four years in a row. What's in your wallet, Samuel L. Jackson? Apparently, that Trojan warrior I was just telling you about it. I think that little Trojan warrior is smiling these days. So, Yetis, we know what you're thinking over there. What exactly is driving this MX credit card surge these days? According to a Wall Street Journal report, it's not your parents' retirement trip to Tahiti, where they're using their MX card.

It's the opposite of that. It's Gen Z. Yeah, Gen Z Jenny is in her plastic era. Because a record three out of four new MX premier credit card users are people under the age of 30. That's already a shocker, and here's another. When Gen Z Jenny applies for a credit card, card, she's going fancy right from the start. Okay, we were blown away by this. But instead of the

no-fee starter credit card that most people start with when they start working with Amex, Gen Z is going platinum. One of the cards with the big annual fees as their first credit card. They're not going plastic. They're going platinum. Apparently, Gen Z is more comfortable with the credit card calculus that we all crunch in our heads. The one that compares the fees to the perks, yeah. If your 22-year-old neighbor is probably doing the mental math on credit cards better than you or your buddy Timmy are exactly. Yeah, and Gen Z apparently thinks that the fees are more than made up for in the perks they'll benefit from. Jack, let's whip out the whiteboard here. Let's say I drop $700 on the initiation fee for the MX Platinum card.

That's a lot of money. I feel like that's kind of costly. But as a member, you get $20 off a month for streaming credits. And $15 a month in Uber Eats credits. I'm listening. and a $200 hotel credit. Plus access to the lounge. Oh, the lounge.

Yet he's that kind of mental math. That credit card calculus, Gen Z is doing it, and Gen Z thinks it's worth it. Exclusive restaurant reservations, in particular, are credit card perks that only come with a platinum card that Gen Z loves, according to American Express. So add it all up besties, and Gen Z's defining feature isn't Snapchat,

it isn't crock sandals, and it isn't dank, chuggy stands. It's high-end credit card. It's credit cards. Hold the Riz. So, Jack, what's the takeaway for our buddies who are anyone with a credit card? Debt carries emotional baggage with millennials, but not with Gen Z. Here's what Jack and I found fascinating about this story. There is striking data from TransUnion that shows a major shift between millennials and Gen Z.

Here it is. 84% of people between the ages of 22 and 24 have a credit card right now. That's compared to 61% 10 years ago. We repeat 84% of 22 to 24 year olds have a credit card now compared to 61% 10 years ago. That means Gen Z 22-year-olds are much more into credit cards than millennials were at the same age. And that stark difference in our generations, that is the result of history. Because millennials, Nick and me included, we graduated during the financial crisis, a moment when debt almost destroyed our country.

It was emotionally scarring for us millennials. We were seeing jobs lost, jobs not offered when we were coming. out of school, and it was all due to debt. Unemployment was at 10%, homes were being foreclosed on, there was civil unrest, there was Occupy Wall Street, all because of debt. Everything Jack just said, that is why we millennials have been more hesitant to take on debt, especially credit card debt. But Gen Z, they weren't diapers during the financial crisis. So they're unhindered by that bad debt narrative that Nick and I came of age with. And the result is the biggest generational divide between Gen Z and Millennials, the credit card.

Because credit cards carry emotional baggage with millennials, but not with Gen Z. Now a quick word from our sponsor. For our third and final story, Jack, we got an early birthday shout-out. This week is the 25th birthday of Napster. Napster is long gone today, but its lesson lives on in Facebook, Uber, Airbnb, and Robin Hood. But Jack, before we hit this story, you hear that noise? Breaking News. Yet is Spotify. Just upped the price of a subscription of Spotify. For the second time in less than a year, Spotify raised the price by $1.

It's now $12 a month for Spotify premium. But yet is a funny thing. When Jack and I saw that headline breaking news from Spotify, it made us think of the opposite. It made us think of Napster, which set the price of music to $0. June 1st, 1999, 25 years ago, Napster basically made music free for any. with a computer, an internet, and a love of Mariah Carey. Prior to Napster, you had to pay 20 bucks for a CD. That was pretty much the only way to buy music.

You had to buy an album. Yeah, the radio was free, but if you wanted to enjoy InSync on repeat, what'd you have to do, Jack? You had to spend 20 bucks of your allowance on Insync's latest album. Yeah, 25 years ago, you could share your music with friends in ways other than Napster. You could make a mixtape, but you needed a boombox, a blank cassette tape, and hours of recording time, and one buddy who has access to all the music that you want. And whoever you made that mixtape for immediately assumed you had a crush on them.

There was no questions about that. But yet, he's 25 years ago, Napster broke that entire business music model. With Napster, if you loved one Lincoln Park song, you didn't need to buy the entire album for 20 bucks. You could just download that one track for free. Besties, this was unprecedented. Napster was the first ever peer-to-peer music sharing platform.

Sharing music was so easy. It was as easy as sharing a picture online as today. I mean, Jack, let's say you wanted a mixtape with your favorite 12 sugar ray songs. What would you do? Open Napster, search for those 12 songs, download them, and burn them onto a blank CD. Boom! Suddenly, every morning,

there is going to be a halo hanging from the corner of your girlfriend's front post bed. What we're trying to say, Yetis, is that Napster completely eliminated the friction of stealing music, and it was nearly impossible to get caught. But here's what Jack and I found. fascinating about this Napster story. The reason Napster was able to succeed was because the law wasn't ready for Napster. And the law didn't catch up to Napster for three full years.

Besties Napster is actually the perfect example of a concept we've talked about before, the loophole business. Because from the start, Napster was illegal. But the law had no way to stop Napster. Yeah, it was literally a loophole. And that is why one fourth of all college internet bandwidth was used to share music on Napster 25 years ago. It was a wonderful legal loophole that anyone who loved music, which is everyone, took advantage of at the time. Especially those Sugar Ray fans. But Yetis, the law that's not enforceable isn't really a law at all, is it, Jack? It's just a request. It's just a request. And Napster politely ignored requests for musicians, record labels, and authorities to shut down. So within two years, Napster had 80 million users.

arguably making it the biggest disruptor in the internet era. Because 10 years after Napster's first birthday, CD sales had fallen by half. And that was the high point for Napster. But eventually the law caught up to Napster. It got sued by the record labels for copyright infringement because they didn't pay any artists. And so in 2002, on just its third birthday,

Napster the disruptor declared bankruptcy. But by then, the music industry was already changed. Steve Jobs had invented the iPod and iTunes. where you could buy individual songs for 99 cents. That's not free, but it's way less than a full album. And then we got streaming with Pandora, Spotify, and eventually Apple Music, charging you $10 a month for as much music as you needed.

But Yeti's Napster's legacy lives on in way more than just the music industry. It's actually present throughout Silicon Valley, even still today. To quote Sugar Ray, when it's over, it's not necessarily over. So Jack, what's the takeaway for our buddies over at Napster? Yeti's the Napster model is actually the Silicon Valley model.

Yet he's, even though Napster was an illegal enterprise, Silicon Valley reveres the lessons that Napster taught it. And the lesson, if consumers want your product, don't worry about the loss. Move fast and break things to get to the market. Because 25 years ago, Napster moved fast and broke things before Zuck even went to his high school prom. In fact, Mark Zuckerberg hired Napster's founder, Trey Parker,

as Facebook's first president. Yeah, Sean Parker, played by Justin Timberlake and the social network, that's the Napster guy who worked at Facebook. But then a decade later, Napster's core lesson continued with the founders of Uber, Airbnb, and Robin Hood. And here was their strategy. Add as many users as possible before the law catches up. Because even if the law catches up,

if enough voters love you, then it's hard for politicians to break you down. Boom, another 10 years after that, we still see Napster's legacy in Silicon Valley today. With artificial intelligence and self-driving cars, move fast and break things is happening, just like with Napster 25 years ago. So, besties, on Napster's 25th birthday,

Napster is really more alive than ever. Jack, could you whip up the takeaways for us for Tea Boy Tuesday? Starbucks drinkers are facing record long wait times, and baristas blame the staffing app. To fix its wait times, we think Starbucks should take a lesson from the London subway. Not a staffing solution, not a technology system. solution. A psychology solution. A psychology solution. For our second story, American Express

Stock is living its best life thanks to credit card-loving Gen Zers. Millennials, we've got emotional debt scars that Gen C simply doesn't have. And our third and final story. This week is the 25th birthday of the founding of Napster. And 25 years later, the Napster model is still the Silicon Valley model. But Yeties, this pod's not over yet. Here's what else you need to know today. First, Mexico, Just elected its first ever female and first ever Jewish president, Claudia Scheinbaum. Claudia Scheinbaum is left-leaning and destroyed the competition. She won by a 30-point margin over the weekend. And it wasn't just her.

She also secured a near two-thirds majority in the Mexican Congress and could change the Mexican constitution. Too much government control from one party often makes investors nervous, so the Mexican peso actually fell yesterday. And second, GameStop stock popped 72% on Monday after Roaring Kempi, Pity revealed he bought $150 million of bullish options. But is that actually the meme investing lord, Keith Gill? Or is it just an impossor who bought his Twitter account and has been hyping up GameStop ever since?

Is that not a conspiracy? That's actually a fair question, because we don't know who is behind the meme account now. But we do know that GameStop jumped again after falling big last week and jumping the week before that. And finally, the Notre Dame Cathedral in Paris is now a 4,000. 383 piece Lego set.

This is LEGO's his first religious set, and it does not include the hunchback Quasimoto. But it does include good timing to line up with the Paris Olympics, which begin in July. Are you going to get one of these, by the way? I don't know, but the fire that burned down the wooden part, they've mostly repaired it, and I think it's going to be complete by the Olympics,

which is pretty awesome. Which is probably faster than you're going to complete this Lego set because it was taking us a long time. We asked someone for help. help and they said, not possible. You can't task rabbit this thing, next. Don't ask a Parisian to help you with Legos. Not possible.

Now, time for the best fact yet. This one whipped up by Jack and me because we found some interesting data and we really wanted to share it with you. This fact is about the vibe session. It's interesting data on Americans' vibes about the economy. Yet he's here is the vibe session.

Get this. 72% of Americans say that they are living comfortably or doing okay financially. But just 22% of, of Americans say the economy is doing well financially. So add it up and that gap is the biggest gap between people's perception of their own finances and the economy overall. It's a trend that started with the pandemic. People say the economy is doing terribly, but that personally they're doing pretty good. Our hunch, the reason for the gap is because of what people read and consume

about the economy. A lot of it's not data driven. It's driven by hot takes designed to get clicks. Also, prices at the grocery store and farmers markets, uh, they're way up and people hate when Those prices are way up. Inflation might be just the kind of thing that overwhelms all other elements of economic feelings right now. You could afford $9 for blueberries at the farmer's market, but you're not happy about paying $9 for blueberries at the farmer's market. That's the vibe session. The economy's growing. The vibes aren't.

Raspberries! Yettys, you look fantastic for Tea Boy Tuesday. And Jack, wait. I'm sorry, Jack, one second. Sorry, how much longer on the latte? I got five more minutes on this latte, Jack. Lavender latte is. of 20 minutes. Well, I got eight more hours on this flight. So if you got any sleeping on a plane

hacks, I really need them. Yiddies, if you see a flying foot hammock on an airplane today, we got to see a picture of this thing. We might see them on the flight. We'll share it if we do. And if you've got a better hack to get through a long airplane flight, we want to hear that too. Hit us up on Spotify, YouTube or Instagram at T-Boy Pod. Happy T-Boy Tuesday, Jack, I'll see it in L.A. And yeties, Jack and I will see tomorrow. Happy birthday to Legendary Yeti Sarah Sitchell in New York City, the most spectacular Spotify spin influencer in the entire streaming industry. Happy 26th birthday to Lexi Maitree in San Diego, California.

And Alex Jang in Beijing, China is celebrating a birthday over in Turkey. Happy birthday Alice. Happy birthday to Ashley Cleveland in Atlanta, Georgia, celebrating with a birthday dinner and her partner. And a happy 27th birthday to Shannad Rosnan in lovely Destin, Florida. Congratulations to Tina and David Jew in Boston, who just celebrated a one-year anniversary. Just inside Boston. And Michael and Claudia Nelson have just closed on their very first house.

No more Nomad Life going back to Des Moines. And a happy 49th birthday to Angelina Jolie somewhere in lovely Los Angeles. And to anyone else who's celebrating something today, make it a T-boy. Celebrate the wins. This is Jack. I own stock of Amazon, and Nick and I both own stock of Apple, Robin Hood, Spotify, Airbnb, and ETFs of the S&P 500. And we both had a Sugar Ray album.