The Best One Yet - 👙 “Pool Boy, Inc.” — Pool Corp’s swimming stock. Netflix’s “Keeper Test.” Walmart’s digital price tags.

Episode Date: June 26, 2024

PoolCorp has become the largest pool company in America… by borrowing Apple’s key financial strategy.Netflix updated its legendary 15-year-old Culture Doc… but the highlight is “The Keeper Test.”The hot new trend at grocery stores is digital price tags instead of stickers… we’ve got a consumer warning from aisle 6.Plus, one golf course is using llamas as caddies… yep, llamas are now taking caddy jobs.FYI, as promised here’s Netflix’s original PowerPoint deck on company culture created by its co-founder Reed Hastings back in 2009: https://www.slideshare.net/slideshow/culture-1798664/1798664$POOL $NFLX $WMT $AAPL $MSFTSubscribe to our Saturday Newsletter: tboypod.com/newsletter  Watch us on YouTubeSubmit Facts & Shoutouts Instagram, TikTok, LinkedIn (Nick) & LinkedIn (Jack)About Us: From the creators of Robinhood Snacks Daily, 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.00:00 - intro03:24 - Pool Boy Inc.07:40 - NFLX Keeper Test12:29 - Digital Price Tags16:54 - Takeaways17:36 - Other News19:13 - Best Fact Yet20:44 - shoutouts Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. It's Wednesday, June 26. 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. You thought I forgot to say Civece Wednesday, didn't you, Jack? I didn't forget.

Happy Civece Wednesday. Jack and I, we never forget. We're like llamas. Jack, three stories for today's show. What do we got, man? For our first story, Pool Corp has become the largest swimming pool company in America by far. And they did it by borrowing a strategy from Apple. For our second story, it's Netflix.

Netflix. Netflix just updated their legendary employee culture document, which anyone can see online. And here's the latest edition. Netflix says that Netflix sucks. And Jack and I agree. We agree and we'll explain. And our third and final story is the hot new trend at the grocery store, the digital price tag. Because the digital price tag saves two days of work.

But Yeties, before we hit that wonderful moment, mix of stories. What a mix of stories for Saviche Wednesday. We'll say it again just to be sure. Everyone's worried about AI maybe taking their job someday. But you shouldn't be worried about artificial intelligence. You should be worried about llama intelligence. Yeah, llamas. Lamas are taking human jobs, Jack, let's jump in T-boy style, baby. No, we're not talking about large language model llamas. Good point. We're talking about llamas, the animal. Yeah, like the one that's spit on my nama back at the petting zoo 15 years ago, Jack. Never forget. Get this yet. one golf course in North Carolina is using llamas to replace caddies.

Basties, if you're playing golf at the Sherwood lovely golf course in North Kakalaki, your caddy is a llama. Lamas. The domesticated South American herd animal. Lamas, llamas, the supersized version of an alpaca, they're camels without the humps. Now, for centuries, Peruvians used llamas to carry gear up into those high Andy's mountains. Oh, Jack, those ancient Incan didn't build Machu Picchu without a few llamas. So, this new llama job at the golf course makes perfect sense, actually.

Maybe you can carry three inkins. You can carry three irons. Now, of course, there are drawbacks to using llama intelligence over human intelligence on the golf course. Good point check. Unlike a human caddy, a llama caddy can't give you advice on the course. Yeah, it's like, what do you think? Seven iron or nine iron? Ba.

Should I go for it or should I lay up? Ba! Hey, how far is it to the green from here? Fah! So, yeah, days, don't worry about ChachyPT take your job. You should be worried about four-legged Peruvian mammals taking our jobs. Because Tiger Woods didn't win the Masters this year, did he? And his caddy wasn't a llama, wasn't it, Jack?

Coincidence? We think not. Correlation? Absolutely. Bye, Jack, let's in our three stories. Hey, Lama, say four. Say four. Ah! 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. First, a quick word from our sponsor. For our first story, Pool Corp has become the biggest pool company in America. And it's all because of one inspiration. Pull Corp is using the same strategy for pools that Apple uses for phones. All right, Jack.

if we are going to cover a pool story. I got to ask you the fashion question of the summer. Are you ready, my friend? Yeah. All right. Swimming suit, swimming shorts, or swimming trunks. What do you call them? Banana boat.

Just kidding. Is it just Vermont thing? We call them bathing suits up there. Actually, it's a trick question. The answer is Speedo, Jack. Toss on that tankini, because this story is so summer, Jack. It's about pool corporation.

The largest pool corporation in the United States. Pool Corp based in lovely Louisville. Louisiana, the deep end of Louisiana. Pull Corp has 442 sales locations across the country. They're a $12 billion pure play pool stock. This pool company is worth two whole lifts. And during the pandemic, Pool Corp had more fun than a couple of dinks in a hot tub. Oh, turn on those jets, Jack, because revenues jump 23%, 35%, and 17% for Pool Corp in the first three years of the pandemic.

And the stock tripled in that period. Pool Corp's financials, they went full Michael Phelps. But in 2023, Pool Corp's business calmed down. The return to normal popped the avocado pool float like a little spike. So Pool Corp stock and its revenue have fallen for two straight years. Pool Corp has gone from the front stroke to a bit of the backstroke. But both the stock and the revenues are still higher than they were before the pandemic. And that is what Jack and I found fascinating about this story.

Why are sales of Pool Corp still at a higher level? despite the return to normal backyard buzzkill of putting in pools. The answer is an interesting detail in its business model. Get this, Yeties. Pool Corp's earnings show that they actually have two key revenue lines. One is building pools, but the other is maintaining pools. Pool Corp will install a 30-foot in-ground pool you've been dying for. Yes, they will.

But they'll also make sure that the liner survived this past winter. And Jack, can you please put on that speedo and whip up the numbers for us over at Pool Corp? Exactly. Turns out only 14% of their annual revenues are from building new pools. 62% is from maintenance and repair of existing pools. What we're saying, Bessie's is that the majority of pool course business is actually in double-checking the pH levels in your pool five years later, like your dad likes to do. A majority of their business is sending over some pool boy to remove the frog that got stuck in the filter. I don't want to touch it. I don't want to touch it. Yeah, it is that. I don't want to touch it either.

Yeah. The frogs are cool. That business model nuance is one. Pool Corp's business is still high despite fewer pool installs. Maintenance and repair. The older the pool gets, the more it's needed. So add it all up, and the key to the pool business isn't actually digging more holes, it's fixing more heaters. So, Jack, what's the takeaway for our buddies in Tank Eddies over at Pool Corp? Pull Corp just stole a strategy from Apple, the install base. Yeties, nearly half of Apple's business is iPhone hardware sales. But in... increasing percentage is Apple's services. Each quarter, more and more of Apple's revenues comes

from App Store subscriptions, ICloud subscriptions, Apple Music, Apple TV Plus, Apple News Plus, other stuff you pay for. Because sales of the iPhone have slowed, but sales of paid iPhone services have not slowed down. Now, Apple calls the number of active devices people are using their installed base. And so does Pool Corp with their pools. And those installed bases, they drive one round of revenue, but then the services continue the revenue generation forever. In fact, Pool Corp even has an advantage that Apple doesn't. Yes, it does. Because the older the pool, the higher the services that are needed.

Pool Corp's pools, they don't just need monthly upkeep. They need annual fixes on those filters. Yeah, for when the frogs gang up and try to take over. Yeah, you got to watch out for the frogs. So yes, Yetis, Pools and iPhone, their sales have both slowed. But Pool Corp is still on top anyway, just like Apple. Because of the installed base. For our second story.

After 15 years, Netflix just changed its most important cultural document. So we need to talk about Netflix's new rule for themselves. Here it is. Netflix sucks. But yet it is, as the New York Times recently pointed out, few companies are as secretive as Netflix's. Netflix doesn't share their TV re-writings with Nilsen, like every other TV studio does.

And Netflix doesn't share box office numbers when their movies are in theaters like other movie studios do. why this next bit is so shocking. Yes, it is. The one thing that Netflix does share publicly is what's supposed to be their most privately held thing. Exactly. Netflix's internal culture. They share that with the entire world. Netflix shares their employee handbook publicly on the web for everyone to see. It was actually first published in a single PowerPoint presentation by their co-founder back in 2009. You know, it was Reed Hastings. That 125 slide presentation is still public. Yes, it is. Anyone can read it. In fact, Jack and I

I will link to it in today's description, so you can check it out whenever you want. And Reed Hastings titled that 125 slide deck with one word. And that word was culture. Culture. Yeties, this culture deck is Netflix's Bill of Rights. It's Constitution. It's Declaration of Independent Magna Carta all in one. Yeah, it's more than an employee handbook.

This may be the true secret to Netflixism during success. Netflix's streaming competition has old school Hollywood roots. Netflix has this dock as it's right. roots. And here's the news. After 15 years, Netflix just updated that foundational document. Jack and I jumped in T-Boy style and what do we discover? It wasn't updated by executives at some corporate retreat out NASP. No, no, no, no. Yet is this update to Netflix's founding document was updated with the employees? It's kind of democratic. There was a working draft of this as a Google Doc that everyone at Netflix could comment on. And apparently 1,500 Netflix,

Netflixers all the way from like the VPs to the interns left a comment in this document about the future of Netflix. But the highlight that's always stood out to Nick and me is the keeper test that they have at Netflix. Ah, the keeper test at Netflix. Jack, could you sprinkle a little more context about what the keeper test is? To maintain high performance at Netflix, they ask their managers to ask themselves this question about their employees. If blank employee wanted to leave Netflix, would I fight to keep them at Netflix? If the answer is no, we believe it's fair to everyone to part ways quickly with that employee. Wow, Yetis.

Stick that on your Ten Commandments of HR, Jack. Yeah, at the end of the year, if you wouldn't fight to keep Carolyn accounting on your team, then your expectation as a manager is that you should fire her. In fact, that Netflix test is why 9% of Netflix employees are asked to leave Netflix every single year. It's a constant survival of the fittest. It's stressful for employees, but at least, the company fitter than ever. Now, interesting thing, besties, Netflix doesn't actually have a vacation policy. They're told that they can take as much time off in Tulum as they think is appropriate.

But if you take a little too much vacay in Cabo, then you'll probably fail the Keeper Test. Netflix calls this freedom and responsibility. It's a self-reinforcing cult. I mean, system. Yes, it is. And it's all in Netflix's key culture document. for all to see. So, Jack, what's the takeaway for our buddy is over at Netflix? Today you suck compared to tomorrow. Yeah, it is a crazy thing. But the newest principle being added to Netflix's culture doc is that Netflix sucks.

Specifically, here's what Netflix says. Netflix sucks today compared to where we can be tomorrow. Now, Jack and I have actually discussed that concept in business before. The version of anything right now should be worse than it is in the future. think about it. If your company's growing, scaling, or improving, it will be better tomorrow than it is today. If so facto, today you suck, but that's actually optimistic and confident because you're comparing yourself to the expectation of a glorious future. Yeah, it's actually the same on our pot. We listen to episodes sometimes from like years ago. And what do we think? They're not the best ones yet.

No, no, no, no, no, no, no, they're not. Yet he's compared to the past. This is the best one yet. compared to the future. Maybe it's not. That is why Netflix's final culture principle is that Netflix sucks. And that resonates with us. Because it sucks today compared to tomorrow. Now a quick word from our sponsor. For our third and final story,

the hot new trend at grocery stores is the digital price tag. For 20 years, the digital economy lowered prices for us. Hall, but that could all change thanks to this story. Jack, let's kick it off with a hero stat, baby. What do we got, man? A typical Walmart superstore has 120,000 skews. SKU's stockkeeping units, and what are they, Jack? Basically, 120,000 different things sold on the shelves at Walmart.

120,000 different skews, different things, cute tops, tick-tacks, those Speedos Jacks is interested in, and each one of those items has its very own price tag. Yeah, currently that price tag is a little printed sticker that's stuck to the shelf right beneath the item. And every once in a while, Walmart updates those prices. Do you have any idea how long it takes for a Walmart superstore to update all their prices? One second, let me whip out the whiteboard, Jack. 120,000 labels. Let's do a little math here.

If each label is one inch long, that's two miles of stickers. They need to reprint and reapply to the shelf. There's a lot of stickers in a little. lot of time. That is why Walmart is partnering with a French tech company to produce digital shelf labels, or as they call them, DSLs. What we're saying is that the world's biggest retailer is updating the price tag from a physical sticker to a digital one at 2,300 stores. There's going to be tiny digital screens beneath those jeans that you're about to buy. 276 million labels will now become digital at the Walmart's worldwide. Walmart says it used to take two days to

update all the prices in their store. Now it'll only take two seconds, the tap of a button, from two days to two seconds. That's like two odysseyses of saved time. Odysseus and that Cyclops, they would have loved this, but yet is, here's the catch with this Walmart digital

sticker. This makes price drops and price increases a lot easier for Walmart. Because if they can change the price instantly, then they can change the price instantly. Yet he's in practice, managers could use this digital label to raise prices as much as they possibly can. Dynamic pricing, it can cause a whole

lot of freakiness. Now, Walmart says they're going to use these digital price labels to offer discounts on food right before it expires, for example. Hey, Jerry, the arugula goes bad tomorrow. Let's cut the price in half. Yeah, get people to buy this stuff. Boom, with one click of the button, they can cut the price of that arugula in half. But never forget yeties, companies are not UNICEF. They're not just giving away these goodies. They want to maximize profit. They have a legal obligation to maximize profits. So they're probably going to use these digital labels to test your consumer willingness to pay. Sure.

We've sold three packs of tube socks for $10 for a while. Let's see if they'll pay $10.50. With one tap of the button, they can change the price. Let's make them $12 for the tube socks and see if they'll still buy it. Yet these gas stations and airlines, they're famous for doing this. They're quick to raise prices when the cost of oil rises. But they're a lot slower to lower the price when the price of oil falls. Digital price labels means frictionless price increases.

We think it'll lead to a gradual rising of the pricing tides. And that is why Jack and I priced out this takeaway. So Jack, what's the takeaway for our buddies over at Walmart? For 20 years, digital kept prices down. But that could all change now. Yeties, when Amazon introduced e-commerce back in 1997, it gave everyone a second choice. Instead of buying from your local store,

there was always an online option. And choice means competition, and competition keeps prices low. That is the beauty of capitalism. Amazon and e-commerce is one big reason that inflation was extremely low for 20 years heading into the pandemic. But hold on a sec. Pause the pod. Now, physical commerce is getting digital. And with digital price tags, we're starting to see those things everywhere.

I'm seeing them everywhere. I've seen them at like six grocery stores. Jack, when we were in L.A. and went to Airwant, they had digital price tags. tags unlike the Haley Bieber smoothies we were ordering. Frictionless price tags eliminates the cost of increasing prices. It eliminates the manual work of printing those stickers. So Basti's for 20 years, digital commerce capped prices down. Now, digital price tags could push prices back up.

Jack, can you whip up the takeaways for us for Saviche Wednesday? Pull Corp's business is still booming despite a slowdown in new pools. Because just like Apple, both benefit off a huge installed band. For our second story, Netflix's new co-CEOs just updated the company culture deck with input from employees. And their newest edition, that Netflix sucks. But that's today's Netflix compared to tomorrow's Netflix. And our third and final story, Walmart is converting price stickers into price screens. So get ready for some digital price labels out there.

For 20 years, e-commerce kept prices low, but now digital price tags could push prices back up. But Yeties, this pod's not over. yet. Here's what else you need to know today. First, out of nowhere, Rivian stock searched 50% at the end of the day yesterday because of one huge new investor. Rivian announced that Volkswagen, the German car company, is investing $5 billion into Rivian, effectively creating a joint venture on electric cars. And honestly, if they don't create an electric beetle car with a flatbed, Volkswagen and Rivian sitting in a tree. C-H-A-R-G-I-N-G. Yeties, this story like just came out.

We're still digesting it. There's more to jump into. We'll probably cover more of it tomorrow. And second, just after Apple, Microsoft was sued by the European Union on an antitrust violation. And what is Microsoft being accused of exactly, Jack? Tying its Teams app into its other software so that you have to use both. And where have we heard that before, Jack? This is the same issue Microsoft was sued for 30 years ago.

by the U.S. Department of Justice. Yes, it is. And finally, Monday night, the Florida Panthers won their first ever Stanley Cup beating the Edmonton Mark Messier Oilers. One wild thing we noticed, Florida hockey teams have been in five straight Stanley Cup finals.

Tampa Bay Lightning were in it for three years, and then the Florida Panthers have made the finals the last two years. And they never have ice or snow down in Florida. That's the wildest part. No Canadian team, where there is a lot of ice and snow, has won a Stanley Cup in 32 years.

Honestly, I'm bummed. I was hoping... I was hoping the Canadian... Yeah. Yeah, I felt like 94. Now, time for the best fact yet. This one whipped up by Jack and me because we saw it, we were fascinated,

and we had to share it with you. For $4 million, you can own a piece of war and peace history. Because back in 1939, a breakthrough in physics revealed that a nuclear bomb was possible. This scene was portrayed in the movie, Oppenheimer. But what wasn't... shown in the movie Oppenheimer was a certain letter that was written by Albert Einstein to President FDR. Albert Einstein, a pacifist, implored the president in this letter to develop a nuclear bomb for the

United States. Because Albert Einstein, who was born in Germany, knew that the German scientific community would be working on a bomb too. And we had to do it first. And that letter, written by a Nobel prize winning pacifist to the president of the United States, is now up for sale for a few million bucks. For $4 million, if you're lucky at an auction, you can own a piece of history, a piece of war, and a piece of peace. Yettys, you look fantastic

today. And remember, don't worry about AI. We'll worry about llamas. That's true. And again, not the large language learning models. And you should worry about frogs too. Those can get kind of scary as well. This is a funny animal episode. Was this animal planet? And whatever you do, remember, whatever you're doing, it probably sucks.

Compared to tomorrow. All right, dude, we already did the takeaways. You don't need to recap everything again. I'll watch there. There's a lava right over there, Jack. Yet is Nick and I. We'll see you tomorrow. And before we go, a happy birthday to Yeti, Elvis Valdez, turning 34 years old in Stanford, Connecticut.

Congratulations to Derell W. Who's got a new job over in San Jose. And Derek King is celebrating a birthday down in lovely Los Angeles. And if you've got a shout-out, you want to get in the show? Click on the link in the episode description. Birthdays, weddings, anniversaries, Bar Mitzvahs, Jack and I do them all, and we will get your shoutout on the pod. All you got to do is click on that link in the description.

Fill out a simple form and your voice could get in the show. Or go to t-boypod.com slash shoutouts. And to anyone else celebrating something today, make it a T-boy. Celebrate the wins. This is Jack. I own stock of Netflix and Pool Corp. And Nick and I both on stock of Apple. I don't want to touch it.

Dude, I hate touching frogs. I'm down. I'm down. I think fries. I used to have a pet tree frog. We're 36 and you're just telling me. for the first time, you had a pet tree frog? Slimy timing.

Because the iguana was scaly-wally-wally. The bearded dragon was beardy-weary, and the tree frog was slimy-timing. Does that mean you had a tree in your house? Well, he died prematurely, and I think it was because of lack of said tree, Jack. New York said he wasn't that kind to the tree frog.