The Best One Yet - 🧑‍🍳 “No tables for 6+” — Restaurants’ Group Dinner ban. Sam vs. Elon: The Toxic Bromance. Foot Locker’s Nike obsession.

Episode Date: March 7, 2024

Elon Musk and Sam Altman were once the low-key bromance of tech — But now they’re in a brutal legal fight over OpenAI and the future of artificial intelligence.Foot Locker’s in love with Nike: 60% of its sales are of things with a swoosh – But Foot Locker’s stock fell 30% yesterday because Nike’s just not that into you.And restaurants just revealed the 1 type of table they hate the most: Party of 6 — Nanoeconomics shows why many restaurants are not allowing parties of 6 or more.Plus, Miami Beach is trying to break up with spring breakers. No bienvenidos, Will Smith.$FL $NKE $TSLASubscribe 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. It's Thursday, the new Friday, March 7th. And today's pod is the best one yet. It's a T-boy. The top three pop business news stories you need to know today. So, Jack, is Bitcoin acquired Google or what? Does Bitcoin had a new record high today?

I mean, probably. I think the winner of Super Tuesday was Bitcoin. Oh, by the way, we're not as up as you might think we're up on that one bed in the Bitcoin. Yeah, Jack and I bought at the other all-time highs. First story for today's show. What are we got, man? For our first story, the biggest bromance in tech was Elon Musk and Sam Alton. But those AI bros are in the middle of a brutal, legal, bro battle breakup. It's become a toxic relationship.

It's a toxic bro relationship. For our second story, the restaurant industry has quietly stopped offering tables for six people or more. They hate the party of six. Because different tables have different economics. And our third and final story. is Foot Locker. Foot Locker's stock plummeted 30% yesterday because Foot Locker is in love. Yeah, Foot Locker's in love with Nike, but Nike is just not bad into you. But Yeties, before we hit that wonderful mix of stories.

Wild mix of stories, Jack. It's Thursday, the new Friday. Yeties, you are probably flying out to Spring Break right now. Cabo, Boka. If you're studying abroad, maybe Majorca. Oh, not too shabby, but Jack, what is the one place you cannot go on spring break right now, my friend? Do not go to Miami Beach. Miami Beach. Yeti's Miami Beach, the capital of Spring Break has uncapitalized itself. Miami has a message for spring breakers.

Don't come here. Miami, they're canceling the coeds. Miami, they're shutting down the shuffleboard. Turns out Miami residents and politicians are tired of the debauchery from Sigap. Can you put down the mug, please? So this long weekend and next long weekend, Miami Beach is closing the parking lots to everyone except local residents. Miami Beach is increasing the tone fees to 500 bucks.

Miami Beach is adding DUI checkpoints. They're checking bags and there's a curfew expected. A curfew. You can't even listen to a podcast on Miami Beach right now. In fact, Miami Beach is so serious about canceling spring break this year. That they launched an ad campaign. That's right. Miami hired an advertising company.

They paid for video ad spots and they're splurging right now. Literally a TV commercial on TV from Miami Beach saying, do not come here. It's the opposite of everything. every other tourism commercial you've ever seen. I mean, Jack, I'm pretty sure Will Smith once said, Welcome to Miami. Yeah, Miami just added a caveat.

Yeah, no bienvenitos if you're here for spring break. No bien benedos. Ami, Imi, I'm. No party in the city, even if the heat is still on. Jack, let's in our 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.

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. For our first story, yesterday, Open AI responded to Elon Musk's huge lawsuit. And Open AI has got

the receipts. They provided screenshots of juicy emails as evidence. So we loved reading this. Sam Altman versus Elon Musk. This is the bro battle that just became a toxic bromance. I love the term toxic bromance, by the way. I love the term receipts.

But Jack, let's travel back in time and set the scene. 2015, a bromance began to blossom. Back then, young Elon Musk co-founded a new AI startup led by a young Sam Alt. Just a couple of bros who loved bots, bites, and browsers. They got together and they started an artificial intelligence company. This AI pioneer, Back in 2015, it was set up as a nonprofit. They wanted to open source everything so that all of humanity could benefit.

In fact, this AI nonprofit was to be so open that they even put that in the name. They called it OpenAI. Yeah, it is this week, though, nine years later, everything Jack and I just said just changed. Last week, Elon sued OpenAI. He said that they had abandoned their founding mission. The lawsuit claims OpenAI is now a subsidiary of Microsoft and it's focused on Mac. maximizing profits. Elon says that that situation breaks OpenAI's founding contract, which Elon invested $45 million to back into the debt. And the lawsuit seems to have a smoking

gun, doesn't it, Jack? Open AI's most famous products, like ChatGPT, Dolly, and Sora, they are all for-profit products. So Yetis, if a judge agrees with Elon's argument, then that could force this for-profit entity to become a nonprofit. And that would ruin Microsoft's investment in OpenAI, and turn it into a Wikipedia style free to use public resource, which actually sounds awesome. I'm totally on board with that. I kind of love that idea. But yet is yesterday, that bromance fully broke down and we were all watching it like a Bravo show. Open AI finally responded to Elon's lawsuit with a blog post titled Open AI and Elon Musk. Like the real housewives of AI. Yet he's Sam Altman revealed emails yesterday showing that Elon Musk approved of their conversion.

from a nonprofit into a for-profit company. Which is the exact thing that Elon is now suing them for. And these emails also show Elon agreeing that OpenAI doesn't mean open-sourced. And here's the most interesting part, though. There's emails explaining why OpenAI had to make the switch in the first place from non-profit to for-profit. Apparently, creating AI is just too expensive to achieve as a non-profit entity. You don't see UNICEF having a division trying to crack artificial intelligence.

No, you don't because to raise it. enough money to get artificial intelligence done, investors need the promise of a profit potential. And Dresen Horowitz wasn't going to invest in Open AI if it was a non-profit entity. Well, those emails show that Elon was on board with that entire plan. Like we said, Open AI, it's got the receipts. But those receipts also show that Elon was only on board if he could be CEO of the whole thing. Well, based on your tone, Jack, feels like we're out of takeaway. So Jack, what's the takeaway for our buddies over in the artificial intelligence community? Elon desperately wants the world to be saved, but only if he can be the one to save it.

Those are not our words. Like, those are actually the words of Sam Altman, the CEO of OpenAI and the former Codin bro of Elon Musk. Can I say those words again? Elon desperately wants the world to be saved, but only if he can be the one to save it. Well, OpenAI's post says that Elon supported them becoming a for-profit company, but only if he was the CEO. And when OpenAI leadership refused to let him be the CEO, that's when Elon said he was out. And then, according to OpenAI's blog post, Elon sued when OpenAI was succeeding without him. So unless Elon has evidence disproving Open AI's blog post, that quote from Sam Altman, it totally summarizes the situation. Elon Musk leads in electric cars and he leads in space,

but he doesn't lead in AI. Elon desperately wants the world to be saved, but only if he can be the one to save it. For our second story, restaurants are starting to ban one specific type of reservation, the party of six or more. Restaurants hate big parties because every table has different economics. Oh, Yeties, the group dinner. It takes 43 emails to organize because Julie got the dates mixed up again. You're always thrown Julie under the bus in these examples. Now, my fault, you can't Keep a calendar straight, Jack. Besties, there's nothing more fun, nothing more complicated, and nothing more expensive than the Venmo request. You get at the end of that group dinner.

Yeah, the group dinner. First of all, every group dinner includes a 30-minute conversation of like, are we getting the flon? Are we not getting the flon? Are we going to get the flon? Do you even like flon? I've never been in a group dinner that discusses the flon name. You don't even know what flawn is. But Yeties, the Wall Street Journal has discovered a revolt among restaurants against the group dinner.

That's right. There's an emerging trend you might have noticed. restaurants are refusing to seat a table if it's for more than six people. Jack, can you please share the interesting data from Resi, the Restaurant Reservation app? Turns out in America's restaurants, over 50% of reservations are for a party of two. Only 8% are for parties of six or more people. Okay, but here's the interesting thing. That data also shows that those big groups are a big issue, so restaurants are 86ing them.

More and more restaurants are refusing to seat parties of six or more people. Because it turns out the bigger the reservation, the worse, the finance. financial return. Here's what Nick and I found fascinating about this story. The economics of each table at a restaurant is totally different depending on the number of people sitting at it. But when you think about it, besties, it kind of, it makes sense. But you've just never thought about it. I worked at a restaurant like three summers in a row. I never thought about this detail. Right, because when you have a big dinner, you get a bigger check, but it turns out that bigger check isn't necessarily better for the restaurants. Here's the key to this restaurant calculus.

Turnover. Turnover, Yeti's turnover means that a quicker a restaurant can get new people in those seats, the faster they can make more money. Turnover is infamously slow when it comes to big parties. We've all been at that three hour long group dinner. It's like an existential crisis about what appetizer you're going to get. Are we doing the hamachi jack? And by the time that three hour dinner for 12 is finished, three other tables for four people each, they all turned over twice. So there's less turnover with big groups and that means less revenue for the restaurant. Another reason, restaurants hate big tables, that table at 12 shows up at different times. It's 45 minutes before the whole party is seated and they're making their first order.

Oh, plus the big parties, they're noisy, right? They're annoying everyone else in the restaurants. And when the waiter has to put in all 12 entrees at once, that can overwhelm the kitchen and the chefs back there. The shrimp scampy is a supply chain disaster at that point. Add it all up, big groups are just less revenue on a per person basis. That is financially speaking, that party table. It's a party pooper. restaurant's doing with this newfound insight they got from all the data? Well, Jack, if you open up your

Rezi app or your OpenTable app, you're going to notice there are fewer available tables for six people or more. If you want a table for seven or more people, you have to call. Sometimes you have to put down a big non-refundable deposit. Sometimes you have to agree that everyone in your party is going to order the fancy prefix menu. Going to a restaurant with a group of seven is like having to purchase a house. You need a pre-qualification letter. Oh, and what do we think is coming next? Jack? The next logical step in capitalism is the party fee. And not just the mandatory 20% tip for parties is six per more. We're talking a 5% surcharge for six or more. Because that happy birthday song, the whole family is saying Nana at the end of the dinner, that was wasted time for the restaurant.

And that toast from the head of sales at your big quarterly event, Olive Garden isn't selling anything during that time. When you hear your family, but even family has to go at some point. So, Jack, can you pass the hamachi and decide on the flaunt and tell us, What's the takeaway for our buddies in the restaurant industry? This is an example of nano-economics. Yet he's back in school, you study two types of economics. Jack and I did too. Macro-economics is on the scale of an entire economy.

Microeconomics is on the scale of the individual. But Jack and I believe there is another field of economics, and we call it nano-economics. The small details that totally affect the economic viability of a business. Like the number of people at the table. For restaurants, that has a huge impact on the profitability. We were shocked by this, but a restaurant completely booked with big parties makes way less money than a restaurant completely booked with date night small dinners. Both restaurants are fully booked, but one makes way more money than the other.

Yet is the number of people at a table is a powerful example of nano-economics. There's macroeconomics. There's microeconomics. And now, there's nano-economics. For our third and final story, it's Footlocker. Foot Locker stock plummeted 30% yesterday like Wall Street twisted its ankle. But this story is really about a modern day sneaker love story. Foot Locker. It's IR is on the IR. Their investor relations team is on the injured reserve.

Foot Locker just announced earnings and it lost money over the holidays. The time of year when it's supposed to be making money. So the stock fell 30% on that awful news. Oh, and that's not all. Foot Locker also closed 200 stores last year. It's going to 140 more this year, and it's going to be another two years before they're even profitable. Foot Locker's looking less Chuck Taylor, more Chuckie cheese. Look, less Air Jordan, more air ball.

Air ball. But the fundamental risk to Foot Locker is something actually charmingly romantic, isn't it, Jack? Foot Locker has an unhealthy relationship with Nike. Look, Full Locker, it's Nick and Jack here. We've noticed that your business is just madly in love with Nike. that sounds kind of lovely. It's also kind of complicated. Because get this, Yeti, 60% of Foot Locker's sales last quarter were sales of Nike products. Six out of 10 things that you bring to the cashier have a swoosh on them. Oh, that is dependence if I've ever seen it, Jack.

Footlocker has a deep reliance on Nike products. Without Nike products, Foot Locker is just barely a store. Hey, Yeties, Jack and I were so curious about this. We listened to yesterday's earnings call. and Foot Locker said the word Nike 21 times. That's more times than they said sneaker and shoe combined. Now Foot Locker does say they have a strategy to diversify beyond Nike, but they just keep sliding into Nike's DMs late night. Which brings us to the most awkward part. Nike doesn't have the same feelings about Foot Locker.

Jack, what's happening on Nike's earnings calls? Nike's not mentioning Foot Locker 21 times. They're not even mentioning Foot Locker at all. Nike mentions Foot Locker at all. Dix and finish line as their favorite retail partners, not Foot Locker. To quote Bradley Cooper, he's just not that into you. But we actually think that Nike needs Foot Locker, too. We actually think these two are going to end up at prom together.

So, Jack, what's the takeaway for our buddies over at Foot Locker and Nike? The retail apocalypse never happened. Yeties, as e-commerce was taken over American spending, Foot Locker was in trouble. When the pandemic hit, and we were buying even more online, Footlocker was in real trouble. But then a surprising thing happened. It looks like we've gone back to our old spending ways. That's right. The percentage of American shopping happening online, it's plateaued.

It's been at 16% for a couple years now. The data shows that despite the pandemic, we still buy 84% of our stuff in person, not online. So Footlockers 2,000 stores? That's really valuable when 84% of us buy stuff in person at store. Without third party retailers like Foot Locker, Nike would be missing 84% of your consumer spending. So Foot Locker may not be Nike's number one partner, but it's still an important partner. Because the retail apocalypse, it just never happened. So Nike's going to the prom with three dates.

And Foot Locker is the third, but at least it's invited. Okay, okay. We're this close to just being mean. to Foot Locker now. Jack, could you whip up the takeaways for us for the new Friday? Sam Altman and Elon Musk once founded a company together. Now they're suing each other. But this whole romance situation reminds us of that great quote about Elon from Sam.

He desperately wants the world to be saved, but only if he's the one who saves it. For our second story, since Big Tables take so dang long because of Julie, some restaurants are ending reservations for parties of six or more. The crucial nano-economics of restaurant profits are the number of people per table. And our third and final story is Foot Locker. The stock fell 30% yesterday as its relationship with Nike is complicated. Full Lockers got some hope because the retail apocalypse never happened. But Yeties, this pod's not over yet. Here's what else you need to know today.

First, tonight is President Biden's State of the Union Address, half progress report, half campaign speech. On the other side, Nikki Haley dropped out of the race for the report. Republican nomination, setting up an official rematch between Donald Trump and Joe Biden. And second, Beau Flex, the maker of at-home gyms from your childhood TV commercials just filed for bankruptcy. Palton, it's not the only at-home gym struggling right now. And finally, the gold rush and Wall Street continued literally, and it's not just Bitcoin because gold prices just hit an all-time high. The price of gold is now $2,140 per ounce. The last high, the last was that high, there were pirates. And they called it booty. Different times, Jack, different times.

Now, time for the best fact yet. This one sent in by Andrea Hall from lovely Detroit, Michigan. Earlier this week, we did an entire podcast in the back of a self-driving Waymo Robotaxie. And here's the interesting thing. Jack and I said the first ever self-driving car was actually the elevator. Doesn't go horizontally, it goes vertically. Because elevators for 50 years had drivers. They had human beings determining what floor it was going to. And there was that nice comfort of having a driver. Now, Andrea points out that there are many operators who still operate elevators across the United States. Including in Detroit's historic Fox Theater. And in New York City, there are still 50 buildings that rely on human elevator operators. Not all elevators are self-driving.

You know what they say about the elevator business? Yeah, Jack. It has its ups and downs. Yeties, you look fantastic for the new Friday. And if you got a group dinner for 12 tonight at Barbudo in the West Village, get the flan. Even if one person doesn't want it, just get the flan, right, Jack? This is a flon optional podcast. Don't peer pressure these diners. I'm just saying if one person doesn't want the flan,

it shouldn't stop the whole table from getting the flond yet. And if you like the show, drop down and give us a five-star review because Nick and I read every one of those reviews. The best way your group of 12 at dinner tonight can help grow this pod is with a five-star review for you. T-boy. Nick and I, we'll see you tomorrow. Enjoy the fly. Before we go, a happy birthday to a little Brooksie, Karavichie Kramer, bored and raised so far in Vermont. Brooksy, do you know he has my exact smile? Does he really have your smile? Yeah, when I look at pictures of me at that age,

it's like identical. I mean, he's got huge podcast potential to him. I mean, this kid was born with a microphone. Happy birthday, Brooksie, and happy birthday, Alex. Congratulations, Alex. Great work with Brooksie. And a happy birthday to Haley McDonald, who is celebrated with a dinner in New York City. And happy 40th birthday to Christina Finn in Palantine, Illinois. Just outside Chicago. And Graham, the Goose Lewis,

the future captain of the Canucks, just became a teenager. Happy birthday, Graham. And happy birthday to Joe Neumann, who's got his last year of his 30s coming up in St. Paul Minnesota. What's up for a Cleveland? And Caleb and Annie in Austin, Texas are celebrating Caleb's

birthday, and they just got engaged, Let's see some ring picks. And to anyone else who's celebrating something today, make it a T-Boy. Celebrate the wins. This is Jack. Nick and I still both on stock and Peloton, and we own one Bitcoin whose name is Ben.