The Best One Yet - 🏡 “My landlord is a bot” – AI Landlord surge. Glossier’s Sephora pivot. Amazon’s drone army.

Episode Date: October 30, 2023

One big reason rents are rising is AI Landlords — Two software companies are helping more and more landlords jack up rents.One year ago, Glossier made a big pivot: Going from direct-to-consumer to selling in Sephora stores — It’s how Glossier went from awareness to action.And Amazon won last week’s Big Tech earnings, but we have to talk about the real surprise: Amazon’s Droid Army — Amazon has 750K robots… and some of them now look like humans.$LVMUY $AMZNSubscribe to our newsletter: tboypod.com/newsletterWant merch, a shoutout, or got TheBestFactYet? Go to: www.tboypod.comFollow The Best One Yet on Instagram, Twitter, and Tiktok: @tboypodAnd now watch us on Youtube Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. Welcome back. It is Monday, October 30th. And today's pod, it is the best one yet. Mole Monday, the best one yet. It is Halloween Eve, Yeti, the last day to decide on a costume for the best costume yet. Oh, Jack, over the next 24 hours, Spirit Halloween is probably the biggest retailer in America.

A lot of panic shopping right now. Besties grab a wig and toss on some tights. You know what to do, Jack. And send us your costume picks at T-Boy Pot. Yeah, we are whipping up. the best one on tomorrow's show. In the meantime, Jack, what's our first story for today's T-boy? One year ago, Glossier made its biggest pivot ever. They started selling in Sephora. Well, we just got the numbers on Glossier's Glam Squad.

For our second story, the winner of the Big Tech earnings week from last week was Amazon. Amazon, because Amazon has built a droid army. And our third and final story, did the price of your rent go up again? We know who's to blame. Yes, we do. AI landlords. AI landlords. Yetis, your new landlord is probably an algorithm. And it probably sucks. It definitely sucks.

But Yetis, before we hit that wonderful mix of stories. What a way to kick off the showjack and what a perfect mix of stories. Strap up your cleats because it's not just any day. No, it is not. Yeties. Today is the sports equinox. The suns are aligned with Jupiter. The Mercury is in retrograde.

And every major sport plays a game tonight. Each league has a game tonight. It's the rare day of the year when the five biggest sports leagues in America all have games on. Like this never happens. It's the sports equinox. NFL's Monday night football is tonight. Raiders versus Lions. Major League Baseball, game three of the World Series.

Inders versus Diamondbacks. We have 11 NBA games today. Breaking ankles in the paint jack. Even the NHL is dropping the puck at nine different rinks. Hucks drop, gloves drop, teeth drop, call Barry Malrose. Oh, how about? Major League Soccer. Playoffs are happening right now. Mo messy, mo money. So much sports happening tonight, you can't find a chicken wing anywhere. Don't let us down, Xfinity. Don't let us down.

Now, Nick and I should point out, the sports equinox, it's becoming a more common event. Yes, it is, Jack, because every league is increasing the number of games in a season, so more of them are playing on the same day. The NHL playoffs takes like nine months these days. I think they hoist the cup in August, Jack, in August. So it's not just a sports. equinox anymore. Oh, the way Jack and I are looking at the stars, it's also a sports solstice. I'm not an astrologer, but that sounds right, Nick. Let's run with a Jack. So, Yetis, grab yourself the closest jockstrap. Besties hydrate those two kidneys. And enjoy tonight's sports solstice. Jack and I are checking the stars. Let's hit our three stars.

15 years before this song Two boys from the Northeast met in the dorm They had an idea to cause a cultural storm It's the best one yet But the best is an norm That's it I don't even think they need to practice 50% that's a fat tip

T-boy City on your at list If you know you know Because we're ready to go We can't wait no more So just start the show Start the show For our first story We just got the numbers

On Glossier's Sepora Makeup Deal How are we looking Jack? Glossier is pulled off one of the greatest pivots in beauty history. Yeti's Glossier, the cosmetics brand that invented Millennial Pink. Don't call it glossier. Don't even think about it. Actually, nobody does that.

But they did turn a shade into a vibe. Founded nine years ago, Glossier hit a $2 billion private valuation as they pioneered the direct-to-consumer makeup industry. The $18 boy brow, Brow, disrupted mascara, faster than you can gloss a lower lip. Yetis, if it's not glossier, it's not deal. When Glossier was peak buzz, they had a quarter billion dollars in sales every year. Jack and I were walking around New York. You could not stroll into a soul cycle without seeing a stick of Glossier. But two years ago, Glossier's revenues began to slow. Glossier was simply losing its gloss. So one year ago, Glossier made its biggest pivot ever.

And we covered it on this pod. And what was that pivot, Jack? They stopped being a direct-to-consumer company. Yeties, last year, Glossier completely changed their business. business model. For the first time, they started selling products through other stores, specifically through Sephora. Sephora, you know what? The black and white bags, the second largest physical beauty chain in America with 600 stores out there. Sephora is the Chipotle of cosmetics, right, Nick? We can roll with that. I think that kind of works. If you like Chipola, you like Sephora. It kind goes out. It's a premium makeup retail. That's what we're getting at here. The guac is extra, so is the eyeliner. Now, before Glacier got into Sephora, you could only get Glacier lipstick on

glossier.com or at a Glossier store. It was D to C, direct to consumer. But now, they're going indirect to consumer too. For a full year now, you could get Glossier at Sephora. So Glossier used to have a direct relationship with their customers. Inserting Sephora in the middle, that's taking a risk. First time doing it after nine years, completely changes it. Glacier gave up control and autonomy of how their brand was presented to the world. Well, one year after we covered that story, We just got the numbers, and how does that Glossier pivot look, Jack? It looks really good. Glossier sales have surged. Get this, Yeties. In just the last year, Glossier has sold $100 million worth of beauty product just at Sephora.

Adding Glossier to Sephora has caused overall sales for the company to jump 73%. Sit down, stand up and put on the milky cleanser, Jack. In fact, Glossier's $68 perfume is now the top-selling fragrance. across all of Sephora. Yeti's Sephora's top fragrance is the Glossier fragrance.

Glacier at Sephora is going fabulously well. So add it all up, Besties, and Sephora saved Glossier. But Glossier had the guts to go into Sephora.

Yeah, they did. And you know what? Sounds like we should do a takeaway. So Jack, what's the takeaway for our buddies over at Glossier? Glossier graduated from awareness to action.

Yeties, as a deed to see, direct-to-consumer company, Glossier was the It Company. Everyone knew about Glossier, and we got the numbers to prove it. Glossier has 51% brand awareness, which is very strong. 51% brand awareness. But here's the interesting thing.

Glossier only had 1% market share for the beauty products in America. So people knew about Glacier, but they weren't taking the action to buy Glacier. So it seems like the problem was that Glossier just wasn't where its potential customers were. Yeah, people enjoy one-stop beauty shopping, and they couldn't get Glossier. You don't get the vitamin C serum, the eye cream, the person. perfume, the moisturizer, and the boy brow, but you want to do it on one trip in one place. When Glossier was direct to consumer, you couldn't do that one-stop beauty shopping. No, you could not.

So Yeti's, the data shows that people wanted Glossier, they just couldn't access Glossier. Entering Sephora stores is how Glossier graduated, from awareness to action. For our second story, the winner of earning season, it's Amazon. But the one shocking thing you need to know about Amazon, it has a droidst. army of 750,000 robots. Why are we talking about anything else? Yeti's every big tech company just announced earnings last week. And frankly, Amazon was the tops. Amazon announced that operating income more than quadrupled to over $10 billion in the third quarter. And what was the key of that report, Jack? The key for Amazon was artificial

intelligence. And now we should point something out yet he's not Amazon's artificial intelligence, other companies artificial intelligence. Here's what Andy Jassy said, the CEO of Amazon. He said, we've got in big customers like Adidas, Bridgewater the hedge fund, Under Armour, they're turning to Amazon Web Services to power their AI apps. So Amazon stock jumped 7% last week, as we learned that the AI industry depends on Amazon's cloud computing. Besties, your buddy's AI startup is crunching data in the cloud. That's owned by Amazon.

But again, Nick, that's a distraction to the real Amazon story. Can we please talk about the wild Amazon story? Apparently no one's talking about, Jack? Amazon has a droid army of 750,000 robots. Ladies, it sounds scary and like, we're a little scary about this too. We're going to want to sit down for this one. Don't stand back up unless you're running. Because Amazon is America's top employer of robots.

TechCrunch reported last week that Amazon has 750,000 robots already in operation. They're mostly Roomba-like vehicles carrying giant pallets of packages all around the warehouse. Most of the robots are giant Roombas moving around the floor of the warehouse. We're talking about three quarters of a million robots. Like, Jack, hey, R2D2, pass me the cardboard box. Hey, C3PO, tape up the cardboard box. Now, Yeti's, here's the scarier news on top of that robot news. One robotics executive told TechCrunch last week, they're expanding beyond wheeled locomotive robots.

to robots with legs. That's right. Amazon is testing out humanoid robots that have bodies that resemble us humans. They're testing out robots that look like us. Like, this is Nick, this is Jack, and this is Nick, and that is Jack.

They're testing out robots that look like us, work harder than us, but don't have to pee like us. They're going to be doing work also that resembles human work. Like, they're standing up and walking around. These robots are going to stand at the conveyor belt and put your item in a box,

tape it up and ship it to you. Hey, Wally, you want to get a sandwich? Oh, I forgot you don't have a digestive tract. So, Jack, what's the takeaway for our buddies over at Amazon? Historically, robots don't take humans' jobs. They liberate humans to do other jobs. Now, Jack, what was our first thought after hearing about Amazon's droid army of 750,000 warehouse robo workers?

We thought this is bad news for Amazon's human workers, because these robots are replacing them. And that is a scary thought. But it turns out it's false. Because Amazon also is about to hire 250,000 temporary human workers for the holiday sales season. In the 80s, Jack and I have been covering robos stories for a while now. And historically, as we've done the research, fears that robots will reduce human employment always seem overblown. And the best proof is the economy right now.

There are more robots in the economy than ever before. And yet our unemployment rate is lower than ever before. Unemployment is 3.8%. Just about every person who wants a job has a job, despite the proliferation of automation and robots. So, besties, when Jack and I look back at both the history and the present, it shows us that automation doesn't typically replace humans. It frees up humans to pursue new jobs instead. For our third and final story, Yeties, did your rent just go up? Well, it's because landlords aren't setting rent anymore. Software is. discovered a greedy truth. More vacancies means more money. Besties, Jack and I

have said it before, we'll say it again. It has never been a better time to rent. Has it been, Jack? Because of crazy high interest rates and really high home prices, it's cheaper to rent than buy a home right now. But yeties, that doesn't mean that renting is cheap these days. Rachel, the renter, is feeling the squeeze more than ever. Jack, we talk about the average rental apartment in Manhattan, New York City. What is the price of that thing? It's insane. It's $5,500 a month on average. That is an all-time high. Oh, and by the way, that does not include a washer dryer, but it does include zero windows.

Right. When we were roommates, by the way, I had the room with no window. I paid a couple hundred bucks less a month. It was not worth it. We'd have to knock on Jack's door and be like, the sun's been up for three hours, man. Yeah, you did. Yeah, this is bizarre because there are fewer people living in New York City than before the pandemic, and yet rents are up 30% during the pandemic.

It's also wild because it's not just New York City. It turns out nationwide, rent is up everywhere. But don't just blame the landlords who are raising the rent. There's someone else to blame too. Yeties, Jack and I jumped in T-boy style, and there is a new phenomenon inflating your rent. An increasing number of landlords across the country are outsourcing their decisions on rent to an algorithm.

Jack, why is your landlord jacking up the rent on us? Because the software I told them to. It's an AI. landlord. Yeties, according to the Wall Street Journal, two software companies are telling more and more landlords to jack up the rent on all of our apartments. Oh, you want to know their names? We'll tell you their names. It's Real Page and Yardy. That's who's jacking up the rent on you right now. In the past, landlord Larry would say, hey, this is a nice young couple. They're paying their rent on time every month. Maybe I'm just going to raise the rent 1% this year. Landlord Larry's like, hey, these are good

kids. I don't want to make the rent too expensive for them. But today, it's probably not Larry who's your landlord. It's probably some big money real estate investing company. That big real estate company is not considering your tenant life at all. They are just plugging in your apartment details and your financial information into some software. Yeah, Yardy, one of those software companies, they were formerly known as rent maximizer. Yeah, rent maximizer was literally the name of the company. Every tenant should be opposed to this company's very mission. And here's what that algorithm's going to do. It's going to tell your landlord, the chiefs, can jack up the rent 10%, and there's a 95% chance that that young couple still pays the new price.

When a human landlord was individually deciding what the rent was going to be, rent was expensive. Well, now that centralized algorithms are coordinating your rent to maximize revenue, it's crazy expensive. Now, the Department of Justice is thinking about getting involved. That's how bad this has gotten, actually. Because this algorithm, if every landlord uses it, that's essentially collusion to drive up the price for all renters. And you know what, besties? That's not even the worst part. So Jack, what's the takeaway for all our buddies with an AI landlord? Landlords have learned a greedy truth. More vacancies means more money. All right, Yetis, let's talk about the business model here.

Historically, landlords avoided empty apartments. They didn't want empty space. They wouldn't make money on that empty space. Naturally, landlords wanted maximum occupancy to make the most money in rent. Okay, but here's the key. Hitting $100 percent occupancy might require lowering the rent. Lowering the rent. That's why this software discovered that empty apartments is actually more lucrative. Because getting most people to pay a higher rent apparently makes up for the one to two empty apartments that you're left with. Here's the math. Raising the rent on all the units in the building makes up for the couple of tenants that decide to leave. Is that annoying algorithm? It says raise all the rents, even if that means some of the apartments remain empty. So with counterintuitive,

But having some vacancy actually maximizes revenue for a landlord. Even if it means a family had to leave their apartment sadly. Or a restaurant or a store that's been there for generations has to shut down because they can't pay the rent. As you're walking down the street and you're still seeing an open lot, you know who to blame on this one. Landlords have learned a greedy truth. More vacancies means more money for them. And the rest of society, we're stuck paying for it. Jack, can you whip up the takeaways for us from Mollay Monday?

Glossier's big decision to enter Sephora stores has boosted sales by 73% this year. Yeties, that's how Glossier graduated from awareness to action. For our second story, Amazon's cloud computing is winning, but it also has 750,000 robots. Historically, robots don't take human jobs, they liberate humans to do other jobs. And our third and final story is landlords. They're increasingly outsourcing their rent. decisions to a rent maximizing software program. Aligo Landlords, Yeti's, this software shows that Larry the landlord makes more money

with more vacancy. It's a brutal, greedy truth. But Yeties, this pod's not over yet. Here's what else you need to know today. First, Jamie Diamond, the CEO of J.P. Morgan Chase, is selling one million shares of the bank, and that's worth over a billion dollars of money. Some investors were alarmed, but it's actually common for executives to sell their stock eventually.

Jimmy. And second, Cruise, the self-driving taxi from General Motors, just pause service right over here in San Francisco. Yeah, pause is a generous way to put it, because apparently Cruz misrepresented information about an accident, so their permit got suspended by California. And finally, Garth Brooks, the country music singer, has a new album, but he's got a bold launch strategy. He's only releasing his album at Bass Pro Shops.

Yeah. You can only get it if you go to the fishing store. It feels like there's a takeaway here, Jack. Meet your customer where they are. Garth Brooks is copying Glossier. Now, time for the best fact yet. This one sent in by Al Rubio from lovely San Antonio, Texas. You ever notice that tires, tire walls on old cars, they were white tire walls?

Yeah, if you look in old movies, the car tires like weren't black. They were white tires on all the cars, right, Jack? It's because the old tires that used to move old cars, We're made of natural rubber. Yeah, and they had to add zinc to that rubber, and that made the tires white. And anyone who's put on zinc sunblock knows it makes you white. Oh, Jack, I am still trying to get some of this stuff off from this summer. Yeties, you look fantastic to kick off the week.

Jack, are you watching the sports zodiac this weekend? Sorry, the sports solstice. Yeah, it's the sportiest day of the year. It's the sports solstice. You know, Jack, I didn't want to point it out at the beginning of the pod, but I'm pretty sure there's some preseason lacrosseeing involved today, too. That's rounding up right there, next. Like brown, we got the big red of Cornell.

That's a big matchup right now. Neskack versus Ivy League. I'm rooting for Neskak. Matchup for the ages. Yetis, have a fantastic evening. Check out at T-BoyPod on Instagram. And Jack and I, we'll see you tomorrow. And before we go, a shout-out to Yeti Jordan Godidus,

who reminds us every year about the sports solstice, and that's when we remember to hit it. Although he calls it the sports equinox. He does. And a happy birthday to Michael. Caribbean who's celebrating his first birthday as a teenager up in Napa, eight years until you get that Pino Man. And happy 25th birthday to Shwayeb Ahmed in Silver Springs, Maryland. And Benito Maxwell, happy birthday over in Charleston, South Carolina.

Jack, we gave him a shout out when he was in his mom's tummy and when he turned six months old. Not too shabby. Wow, Benito, you are the best one, yeah. And Brooke Morgan is turning 30 years old in San Diego. We wish her a speedy recovery and some positive marriage prospects. Congratulations to Jordan Gustafson, who's got a new job in Chicago. And Brendan and Bree just had their one-year anniversary in the Bay Area. Celebrate that win.

Congratulations to Holden and Haley, two great names, two great people who got engaged in South Jordan, Utah. Let's see those ring picks. And Ignacio Sartori and Luna Manelos are getting married down in Argentina. And if we know something about Argentina, this party ain't starting to 1 a.m. Jack. And congratulations to Scott Lorsch and Casil Crystal, who are getting married. in a teal suit and an ivory dress, and it's going to be wonderful. Scott and Casill, we watched your whole YouTube video. We wish we were going to this wedding.

You're going to have an absolute blast. We wish we were getting married. This is Jack. I own stock of Amazon, and Nick and I both own stock of Chipotle. Glossier just made one change worth $100 million. They started selling at Sephora. Glossier made one change that's worth $100 million. They started selling at Sephora.

I'm going to make it awkward for Rachel and Adam. I have to pick one of us. Glossier made one change worth a hundred million. Jack, I'm like, Jack, Glossier made a change worth $200 million. Yeah, just inflation. Glossier just acquired Amazon by selling at Sephora. More on the story in today's show. Rachel, your choice, which one's better?

Thank you.