The Best One Yet - Mary Meeker’s epic “Internet Trends Report”, Grubhub jumps after Amazon Restaurants ends, and Brex hits $2.6B as our “Unicorn of the Day”

Episode Date: June 12, 2019

Mary Meeker dropped her annual 333-slide Internet Trends Report, so we pulled out 3 keys for you. Grubhub shares jumped 8% on word Amazon is ending its restaurant delivery service. And our “Unicorn of the Day” is Brex as it hits a $2.6B valuation giving credit cards to startups.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. This is snacks. Daily is Wednesday, June 12th. And this is the best snack daily we've ever done. Tea boy, baby. Good thing everyone tuned in today. We like this one a lot more.

Jack, what happened to the doubt? Markets barely trickled down, like 0.05%. What do you even do with that kind of amount? I didn't even round up there. I can't even see that number. We got three great stories. Wonderful mix. What are we kicking off?

Number one is Grubhub. The stock surged by 8% because Amazon is shutting down its restaurant delivery program. And we're going to talk about this Amazon failure. Along with the 38 other food delivery. You're probably have on your phone right. Second story is venture capitalist icon. Mary Meeker released her long-awaited annual Internet Trends Report. This thing is thick.

You want to know about this thing, so we're going to break it down for you. We're going to break down all 33 slides into three key points in three minutes and 33 seconds. This story brought to you by the number three. But we're doing this story number two out of the three. Third and final story is the unicorn of the day. We're talking Brex. It's the credit card for startups. Just hit a $2.6 billion dollar valuation.

Billy throw the seaweed t-shirts on the plastic and let's use the Brex card for this one. Micro Marino, no cleaning needed. Now, before we jump up to all three of those, we got to talk about a key job posting. Twitter recently put up a job post for Twitter in chief. We were following this one because we were curious who would want this. This is the person who controls the at Twitter Twitter handle. Sounds like a lot of responsibility and we hear that involves great power. Some of the responsibilities actually, you need razor sharp editing skills.

And you need to be able to work in a collaborative environment. And you need to be short. And I assume just like every job you need to do Excel and Microsoft Word. Yeah, but short like 280 characters lies. You also need to be fluent in emoji. Now, Twitter says the goal here is to, quote unquote, make the world feel smaller. The reality, though, you are going to face a lot of hate. Any, like, Twitter hate, is coming to your handle.

You're going to want to be replaced by a robot, like ASAP. You want to replace yourself with a box. Now, we've been following this job posting. We noticed it was just closed, so someone's getting the job. Best of luck to you. Now, before we hit our stories, listen to these keywords. spoke to the lawyers and we got to get something legal out the way. The snacks about the hair ain't 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.

Robahood Financial, LLC, member FINRA slash SIPC. For our first story, Amazon is shutting down Amazon restaurants. Grubhubh is celebrating hard. Man, I wish there was an app just for Asaibol deliveries. I'd be like diamond stacks. The Grubhub team is getting champagne all day yesterday. The stock jumped like 8%. So Amazon restaurants, first of all, what is it?

No one knows. It's Amazon's restaurant delivery. Go check it out. There's a lot of maroon, which is really unappetized. When we read this story, we were surprised it existed, so we fact-checked it by going to like Amazonrestrots.com. Basically, this was like one-hour free delivery for prime members for like a bunch of, quote-unquote, curated restaurants.

And Amazon didn't announce it was shutting down, but it has confirmed reports that on June 24th, it's gone. Not happening anymore. You want that tofu bond me? You're going to have to go to Uber Eats. Right. So this is a great reminder that Amazon can fail at something. Shocker. It's done it a few times now with some pretty big things. Amazon fire phone. Ever heard of it? Physical phone. Gen Z should know this. Amazon had a physical phone and it killed it quickly. I'm not sure if Genzi was a lie for that. They also probably weren't alive for Amazon's destinations, which was like a travel website. that they shut down too. I'm sure there's a list on BuzzFeed of like Amazon

fails. Now we got to talk about how tiny Amazon restaurants was because that's kind of key here. It only existed in 20 U.S. cities and it only controlled 2% of the food delivery market. Most of those cities weren't even aware this was happening while it was going on. Now Amazon though, good important side note here. Yes. It didn't fully exit restaurant delivery. No, it's kind of just shifted up the strategy a little bit. So last month it invested in Deliveroo, which is a UK delivery company, just like Uber Eats or Dornash. So Amazon's saying, hey, we're not going to do this ourselves, but we're going to give you a lot of money. And you guys should run with that over a delivery.

Just do that thing. Now, if you were a delivery company and Amazon just exited your industry, that is a big Tuesday for you. I'd like quit my job. I'd be so happy. Get food for the whole office. What are we thrown on the card here? So Grubhub is the only like pure play delivery stock and that one jumped by 8%. Now, the whole delivery market is pretty much mixed between just a few companies.

You got Grubhubhub. You got DoorDash. And you got Uber Eats. Right. And then you got Postmates. in there. So they control like over 80% of the market. 92% from those four companies. Very specific. Postmates is like looking at IPO this year. Right. So I'm kind of glad that Amazon's exiting because restaurant delivery wasn't even a big deal to that. No, it's like a side hustle from

like a gig that they did while they were babysitting. Right. Meanwhile, Grubhub, this is their entire business. They're passionate about it. Same with DoorDash. That's the entire business. And for Uber, restaurant delivery is more and more important. Uber Eats is becoming the golden child. Revenues for Uber Eats last quarter doubled from the previous year, and ride hails only rose like 9%. Yeah, Uber's got a bit of a growth problem, but growth is still happening at Uber. So let's bring this back to Amazon, which failed at something. Jack, what's the takeaway for our buddies over at Amazon restaurants? Amazon restaurants. Amazon clearly didn't invest enough in this thing. Great example of how Amazon didn't invest in this. Let's look at their partnerships for Amazon restaurants with fast food companies.

There were non-existent. Didn't see any out there. But the competition, Uber eats partnered with McDonald's. DoorDash. DoorDash partnered up with Wendy's deliver those square burgers to everyone. And then Grubhub asked out Taco Bell to prom. Very nice giving the rose to the enchiladas. So we have never even seen a commercial for Amazon restaurants. Have you guys seen a commercial for this? I haven't gotten a promo code from a friend for Amazon restaurant. For the last week that this thing's going to be open, if someone could send us a promo code, that'd be great. We just want to make sure that's even a thing with Amazon restaurants. So to win this app battle war against Uber and DoorDash and the others, you would have had to spend

a lot of money on promotions. And what did Amazon do? They stepped aside. They're going to fight another battle. didn't spend money in promotions. For a second story, Mary Meeker just dropped her legendary slide deck on the internet. Tech people and internet people flock to this deck like it was a Beyonce house. This is an annual event kind of a thing. Yeah, and it happened yesterday at 1 o'clock at the Code Conference. Everyone knows where they were. Which I think was in San Francisco.

Sounds like that would be the place to be. So Mary Meeker is the queen of the internet. Legendary investor here, she drops this report annually based on just a bunch of critical statistics about what's going on in the digital world. Right. She must just be constantly reading data. and news about the tech and internet industry. This thing has as many numbers as it has word characters. Yeah, so she turned all of that years of reading, one slide a day, apparently, into 33 slides, and we're going to break the whole thing down into three keys for you.

Three keys and three minutes and 33 seconds. The first, the internet is not growing like it used to. 51% of planet Earth uses the internet. That's an eye opener right there. We were surprised by that because that means 49% are not using the internet. And new internet users are harder to find than ever before. growth of first-time internet users, and this was a key in the report, hit an all-time low. So the low-hanging fruit of people entering the middle class is slowing down.

That's not good for internet companies. All right. Key number two here, spending on online ads jumped 22%. That's good for internet companies. Very nice. Because it means more money is coming like away from TV and newspapers and onto online platforms. Now, Google and Facebook, they have dominated this online ad spend space. But this report points out that Amazon and Twitter are taking more.

and more market share of online spending. They're creeping up a little bit. So the third key is Americans are still binging on the internet. All right, two stats here that Jack and I looked at, and they made us like have to sit down. I know. I looked at myself in the mirror. Disturbing number. I am guilty of these stats.

What are we doing with our lives? 6.3 hours of internet use per day. That's how much Americans use the internet. And it's not just sitting down because 3.6 hours were spent on your smartphone. Yeah. So we have like a major internet addiction. All of us. Now, there was one little number here in the Mary Meeker report that made us feel like a little

better about humanity. We have recognized the problem. And that's the first step to dealing with a problem. One quarter of U.S. adults say they almost are constantly online. Jack's using air quotes there. And they want to be less. Very nice. So, Jack, what's the takeaway for our buddies who put together this Mary Meeker 33-page

report? Almost all of these trends are actually bad for Google and Facebook. Internet's not growing as fast. Google and Facebook are losing market share. and America wants to count back on internet use. Yeah, that's all bad for Google and Facebook, which relies on more and more internet use. Now, Google and Facebook have one big advantage here,

and it's that word that everyone likes to drop. Data. Data. They have tons and tons of data on users, and that's been their big advantage for a while. Now, interestingly, you could argue that the big advantage for, like, Apple is that it doesn't have that much data. Apple is really touting its privacy right now

and saying you should use Apple more because we're not going to use your data. But if you're Facebook and Google and you're looking at these key internet trends and you're a fan of Mary Meeker like they probably are, you're not feeling too good right now. Nope. For our third and final story, our unicorn of the day over here, Brex, the credit card for startups.

Just hit a $2.6 billion valuation. Yeah, the story is college dropouts from Stanford. Let us know if you've heard this one be so cliche. They raised $100 million last week. They didn't bother getting the degrees. And they're pitched to customers. We're going to offer credit cards to startups that have no profits. Yeah, they raised a bunch of money

so that they can lend it out to companies as credit card lines. Now, this company is now worth. over $2 billion, and its business model is very straightforward. Yeah, $2.6 billion, and that's because they say yes when banks are saying no. Now, Jack, you actually worked with a bunch of companies with this kind of a situation. We know the core problem here. Worst part of my job when I used to work at a bank. Jack, it's emotional about this.

My clients would come to me and they'd ask for credit cards, and I'd be like, I'm sorry, you don't have a history of credit. So to get a credit card, you'd have to get a history of credit. But to get a credit history, you need a credit card. Kind of messes with your mind. It's a freaky chicken in the egg catch-22 situation. And then my Germans would look at me, get angry and start complaining about our public transit.

This is like the exact situation that pretty much every college freshman has when they try to get their first credit card. Exactly. Personally. Brex agrees that this is a problem. So they started offering these startups credit cards early on. Now, here's what they're thinking. If we can find the right startups just like a venture capitalist would, this is going

to be a successful company, they'll probably be able to pay us back. We're willing to take on a risk, considering others are paying them money. And then by associating themselves with. themselves with startups. They're getting like really deep in the startup. Brex isn't winning love from startups just because it's the only one giving them a credit card. They're also being very startup first. Extremely strategic with the way they're doing the rewards here. The rewards, you get like seven times points for the things that startups love to spend money. We're talking startupy things like that ride share you're taking. Boom, you're getting extra points for.

Uber left or the Amazon Web Services. That is in every wardrobe of a startup. Shocker, you're getting a discount on WeWork, Amazon Web Services, and Google Ads. And then when you travel on business, it makes it super easy to expense those trips on Expensify, which Silicon Valley loves. So, Jack, what's the takeaway for our buddies over at Brex? In FinTech, you learn intimately about how a system works, and then you ask why. And this was the system that Brex noticed. Basically, if you wanted a credit card, you had to show a credit history and no one had one. And then Brex asked, why is that?

Companies are getting tons and millions of dollars from venture capital. I think we can offer them a credit card. Now, they didn't like the answer. The answer didn't make any sense. but it doesn't mean their path forward is like super easy here. Yeah, I mean, Brex found a solution to this problem. They just said yes. But so could Amex, Visa or MasterCard by just making a slight switch and maybe a new card.

Yeah, they can't necessarily defend this advantage they have. Next thing you know, MasterCard comes out of the titanium card focused on startups, and boom, that could be a Brex problem. Jack, can you whip up the takeaways for us over there? Amazon is exiting restaurant delivery and Grubhubhub's dreams have come true. Lunch on the Grubhubhubhub's exec team over there. Mary Meeker's Internet Trends Report doesn't look good for Google. or Facebook. We should tweet,

can we tweet this thing out? We will tweet it out. We're going to send this out at Robin Hoods. All 333 slides. And Brex is the $2.6 billion-dollar valued unicorn that's giving credit cards to startups. Love this game plan. Learn the system and then ask why a lot.

Yes. Now, time for our snack fact of the day. This is one we kind of researched when we learned yesterday that Salesforce is kind of getting a new headquarters in Seattle. Yeah. After an acquired tableau, Salesforce's HQ2, if you will,

according to the CEO. Let's run with it. is now in Seattle, which is where Tableau was based. Seattle becoming like the San Francisco of the Pacific Northwest. Seattle has 10 headquarters of S&P 500 companies. Let's hit these. We got Microsoft, Starbucks, Amazon, and Costco. Yeah, then you got T-Mobile, Nordstrom, Alaska Airlines, and Expedia.

You got Boeing, kind of. Kind of. They're sort of in Chicago, sort of in Seattle. They're in the region. And then finally, Salesforce also kind of. We're going a little asterisk on that one. Now, our Twitter-in-chief told us that a couple things in yesterday's pod we want to reflect on. First, Raytheon and United probably aren't going to directly compete with Boeing because Boeing's making the actual planes.

And Raytheon United are building, you know, the major parts of it. Right. They're going to be the suppliers of those planes. And then also, you're not shooting Tomahawk missiles off a aircraft carrier. You're shooting them off a destroyer. Duh, I can't believe we didn't catch that one. We're very unqualified to make that statement. Thank you for those corrections at Robin Hood Snacks. Now, a couple other key stories we're covering in our Robin Hood Snacks newsletter.

First, Wells Fargo is having trouble finding a new CEO. And then Snapchat. Remember that gender swap filter we talked about last month? How did that do for them? It has resulted in a tripling of app downloads. Not too shabby. Viral. Now, Stanley Cup playoffs, Game 7s tonight.

What else are you doing tonight? I think the NBA finals are tomorrow. And we're going to record tomorrow's pod. We'll be back with you tomorrow. 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.