The Best One Yet - 🍂 “PSL won the fall” — Starbucks’ record quarter. Sam Bankman-Fried’s lesson. Clorox’s crippled quarter.

Episode Date: November 6, 2023

Starbucks’ surged 10% last week thanks to a Pumpkin Spice Latte-powered record quarter — But 20 years ago, the PSL’s creation almost didn’t happen.Sam Bankman-Fried is guilty of “one of the biggest financial crimes in history” — But we noticed the newest red flag in startups… is founder fashion.And a cyberattack on Clorox resulted in massive product shortages last quarter — Because cyberattacks have become like natural disasters.$SBUX $CLXSubscribe 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, November 6th. And today's pod, it is the best one yet. It's a T-boy, Jack. Last week, the stock market had its best week so far of all the year. The best week of the year.

Yet he's the S&P 500. It was 5% last week. Not too shabby. 5% in five days in the stock market is win to celebrate. Sit down, stand up, and put the McRib back on the menu. There we go. A non-win to celebrate. I got chapped lips.

It's that time of the year. my lips are going to be addicted to chapsed. It's going to be dry out there. I don't know what to do. It's a brutal season, isn't it? I'm going to send you some gummy bears. I feel like gummy bears can fix the situation. I need some ricola too. I'm sending you both.

It's not a dry heat. It's a dry cold. Doctors orders, let's get this guy a prescription for gummy bears. First story, what have we got on the show, Jack? After 20 years, can the pumpkin spice latte still drive sales? Well, Starbucks's earnings report just gave us the answer. But the bigger story is how the pumpkin spice flavor almost never happened. Cliffhanger. Second story, what do we got, Jack?

For our second story, Clorox, just had its worst quarter ever because it was crippled by a cyber attack. Cyber attacks, they've become the natural disasters of business. And our third and final story is Sam Bankman-Fried. He was convicted of seven federal crimes. He is officially Sam Bankman-Frog. And the biggest red flag of all was his clothing. But yeties, before we hit that wonderful mix of stories.

Fantastic mix of stories, Jack. We're checking out hoarders' al-men. Week 190. Horders Ammanac, week 190. Things were running out in the economy. Jack and I been keeping track for you. This week, we're running out of LOL. LOL. Yet he's the acronym LOL. You know, laugh out loud. For years, we've all been texting and messaging LOL. Yeah, apparently we are MIA of LOL. And if it's really funny, L O LOL, L. A, LOL. Yeah, a couple more LOL. Because Yeti's millennials, we love LOL. Because millennials, we invented the LOL. Yeah, Jack and I jumped in T-Bo style, according to Vice Media, the first ever LOL was LOLed in an internet chat room back in

1988. 1988, the year Nick and I were born. Great year. It's a millennial year. And LOL has defined our generation's communication ever since. LOL. Not to be confused with lots of love, by the way. Good point.

You don't want to LOL when Nana's in the hospital, do you, Jack? No. Although my father-in-law once said Nana's in the hospital at L-O-L. Well, like, what's going on? L-O-L is laughing out loud. It is not lots of love. But get this, Yeties. According to the New York Times,

LOL's usage is disappearing. Get that. Gen Z apparently does not like the LOL. Instead of LOL, Gen Z prefers IJBOL. Yeah, Gen Z isn't L-O-O-Ling. They're I-J-B-O-Ling, which stands for,

I just burst out laughing. I just burst out laughing is replacing laugh out loud. I-J-B-O-L replaces L-O-L. But Jack, can we sprinkle on a little more? context to IJBOL? The origin of IJBOL is a surprising place. It began in Korea.

Apparently Korean kids watching K-pop began texting IJBOL in order to express laughter. Yeah, IJBOL, the new thing to text. It came from Korea even though it's English. And now it's going viral in America. And it makes sense because we've all typed LOL so many times. We're not even actually laughing out loud anymore. If you do laugh out loud, honestly, it really starts with a burst. So yet he's this week when you're texting your buddy Timmy and you start to laugh?

Do not LOL. Don't R-O-F-L either. And absolutely, under no circumstances, should you ever L-M-F-A-O. Instead, try IJB-O-L. Ege-Bol. I just burst out laughing. Ege ball. It's the new cool thing to do.

Millennial L-O-L. It's retired. It's been nice knowing you. Who's laughing out loud now? Jack, let's hit our three stories. 15 years before this song, two boys from the Northeast, in the dorm. They had an idea to cause a cultural storm.

It's the best one yet, but the best is an 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, Starbucks just had its best quarter ever. And it's all thanks to one thing, pumpkin spice. The PSL has only gotten stronger, but the PSL almost never happened. Yeti, Starbucks earnings were so strong last week that the stock jumped 12%. Jack and I had to sit down, stand up and just stay seated on this one. Starbucks's corporate valuation hit $120 billion. Jack, could you sprinkle on a little more context there, please? In the food category, they only trail McDonald's.

They only trail McDonald's. Oh, and looking ahead, Yetis, Starbucks ain't stopping. It's like they're drinking their own stuff. They already have a shocking 38,000 stores across the world. That's a lot of stores, Jack. And they're adding 17,000 more to hit 55,000 stores by 2030. Yeti, Starbucks is on pace to add 3,000 new stores every single year. I think that's 10 stores a day for those math majors out there.

Oh, and guess what? The sales last quarter, they jumped 11% to a record high. Starbucks is $10 billion in sales last quarter. is the same as every human in North America buying four cups of Starbucks. But yeties, here's what Jack and I found fascinating about this story. There's a lingering question all fall long.

And here was that question. After 20 years, does the pumpkin spice still have its fall magic? After two decades, can pumpkin spice still drive sales? Starbucks's earnings showed us the answer. And the answer is that pumpkin spice

is only getting stronger. The CEO of Starbucks said last week that pumpkin spice latte sales continue to stand the test of time. PSL for the win. He said that they just keep growing, like more than they even expected right now. There was a huge risk that PSL was a fad, but it's an enduring sales driver. Oh, a great example of this. Starbucks decided to offer pumpkin spice one week earlier this August than they typically do. And that boosted store traffic by 26%.

People came to Starbucks just for PSL. 26% more Americans walked into a Starbucks because it was available a week earlier when it was 85 degrees outside. Now, this fall flavor is a uniquely American thing, right? Pumpkin spice latte? Yeah, hot dogs, cracker jacks, and pumpkin spice with your sweater, absolutely. Turns out PSL is also one of our greatest exports. Get this. Pumpkin spiced cream, chai tea. That was driving sales internationally for Starbucks. Sales of tea. Tea. Got spice.

And as we told you earlier in the year on this pod, Starbucks introduced competition to Pumpkin Spice Latte this fall. Starbucks introduced the autumn apple flavor, which many people thought would hurt Starbucks PSL sales. But it didn't. The CEO said that competition boosted sales of both flavors to a record this fall. Jack and I are looking at the situation.

It's like the Barbenheimer of the coffee bean. Like they both were better because they were there. Pumpkin spice latte already made September and October. Starbucks's best two months of the year, every year. But this year, pumpkin spice, gave Starbucks its best quarter ever. But Pumpkin Spice almost didn't happen. So Jack, what's the takeaway for all our buddies who may be drinking Pumpkin Spice?

The PSL is a lesson in ignoring customers. Yeties, the car innovator, Henry Ford, once said, if I'd asked customers what they wanted, they would have said a faster horse. Steve Jobs once said, people don't know what they want until you show it to them. Well, similarly, Starbucks almost didn't long. the Pumpkin Spice latte because customers didn't want it 20 years ago. In 2003, the inventor of Pumpkin Spice, Peter Dukes, he tested 10 new flavors with 500 customers. And Jack, those 500 customers, what were their favorite flavors in that bunch?

Chocolate caramel cinnamon in that order. Pumpkin spice, it was confusing. Customers like didn't get what the pumpkin flavor was. It wasn't even in the top five of their choices. So based on that customer research, most companies would have not chosen the thing that wasn't even in the top five. And yet, Starbucks leaders. had the product intuition that this new flavor, it was going to land. So they launched Pumpkin Spice Latte, despite the customer research telling them otherwise.

Yeties, the pumpkin spice latte. The bold case when ignoring customers was the right move. For our second story, Clorox was hit with a huge cyber attack that has devastated sales. And this one hack has revealed how much of your home is dependent on Clorox? Yeties, three months ago, out of all the companies you to consider, expect to get hacked, Clorox, the cleaning supply company, got hacked. It wasn't just a computer hack. It was a factory hack, and it was huge. A cyber attack shut down Clorox factories, 275 employees down in Georgia, they couldn't do their

work for Clorox. We just got the numbers. The cyber attack this summer was so bad for Clorox that sales fell by 31%. Clorox's stock just hit a five-year low. For a company with such regular, consistent sales as, Chlorox, a 31% drop is unheard of. Absolutely, because three months in, Clorox's operations, they are still not 100% back to normal. The hack is over now, but Clorox is still recovering from it.

Oh, and the villain in this situation? We know who it is, don't we, Jack? Well, we know the name, but we don't know the people behind it. It's an anonymous hacker group that goes by the name Scattered Spider. It's the same hackers that shut down the casino in Vegas, and we hope the FBI tracks them down and takes them to justice. We also hope that this is the plot of the next James Bond movie, because honestly, it feels like this could be, Jack. I think this was the plot of the recent Mission Impossible.

A worldwide shortage of toilet cleaner brings James back from a luxurious vacation in the Bahamas. Take that money, Penny. You got this double-O. But yeties, here's what Jack and I found fascinating about this story. The absence of Clorox has revealed something else about Clorox. Clorox has a monopoly on your home. Yeties, Clorox basically has a monopoly on all the products in your pantry. And you know what? Each one of those Clorox products is the market leader.

Let's start in the bathroom and make our way to the kitchen, shall we? Love that idea, Jack. Let's start in the bathroom with Clorox bleach. They're like classic OG product. Clorox bleach on 68% of the bleach market. 68% of the bleach market is Clorox bleach. How about toilets? Clorox toilet cleaner is also number one in the category. With 41% of the toilet cleaning market going at Clorox. Garbage bags? Clorox owns Glad. Don't get mad.

Get Glad. Glad garbage bags. Also number one in the market with 40% of the industry. And even Hidden Valley Ranch is owned by Clorox. We repeat those wings that you are dipping right now into ranch dressing. Clorox owns Hidden Valley Ranch. And of course, that's number one in the category too. Because we can't even name another ranch dressing, can we check? No offense, Paul Newman.

And yet he's because of this hack, Clorox's dominant position in every single one of markets is now vulnerable. The hack caused shortages of Clorox products this summer, so customers had no choice but to try out the number two brand. Whether it's bleach, whether it's toilet cleaner, or whether it's a salad dressing. So Jack, what's the takeaway for all our buddies with Monopoly on our pantries over at Clorox? Cyber attacks have become the natural disaster of business. Yeties, Jack and I have noticed a change in cyber attacks. Like the damage is no longer just to computers and data, is it, man? Cyber attacks have been shutting down hotels.

They're shutting down factories. They're causing shortages of physical things like a natural disaster. Exactly. The consequences of a cyber track used to be digital, but now they're physical. And like a natural disaster, who suffers from the next cyber attack? It seems completely random. Last year was a meat processor. That it was a gas pipeline.

Then it was the casinos. And now it's Clorox and Hidden Valley Ranch dressing people. But cyber attacks aren't an act of nature. They're an act of man. We are not powerless to stop a hacking. Like, we are powerless to stop a hurricane. Now, yes, companies should shore up their own cybersecurity situation and, like, two-factor authenticate all the passwords.

But yet, we're also going to need a public policy to prevent them. Because cyber attacks, they become like the natural disasters of business. For our third and final story, Sam Bankman-Fried was just convicted in one of the biggest financial frauds in history. What does his guilty verdict teach us? a lesson about fashion. Yeties, for the last year, we've been calling Sam Bankmanfried,

SBF, an alleged criminal. Right, Jack? Alleged. But now he's not alleged anymore. He's just a criminal. Yeah, we're going to cut the alleged, cut the asterisk on this thing. It's just straight up criminal after last week. Sam Bankman Fried is a fraud,

according to a jury of his peers. And that jury verdict was apparently like a really easy decision, wasn't it, Jack? It took the jury just five hours to reach a guilty verdict on all seven charges. that he faced. It took him just five hours. We've had dinners that lasted longer than this decision. Now a judge is going to sentence him to prison in March, and he could face up to 115 years in prison.

Besties, somewhere in Hollywood, Hulu is already prepping the documentary. They're casting for a crazy guy with crazy hair. But yet he's now that the facts of this case are official, let's recap what Sam Bankman-Fried's crimes really were. And let's do it in relatable terms. Besties, imagine your local bank. Like everyone in your local bank, like everyone in your case. your town or your city, they've got an account at your local savings and loan banking institution. Well, Sam Bank Matreed was the bank manager, but he secretly withdrew customers' money without them knowing and then spent their customers' money. And he used customer money to make political donations and invest in risky crypto startups. And he used that customer money to buy houses in the

Bahamas for himself, his family, and his friends. SBF even paid comedy legend Larry David a whopping $10 million just to do a one-minute TV commercial. Nick, the man's a sociopath. He paid $55 million to Tom Brady. $55 million of customer money to do 20 hours of work and make FTX look cool. $55 million to basically hang out with Tom Brady, take a few selfies and play a few video games. That was it.

Then, after all that money was spent by Sam Bankman Fried, when customers came back and asked for their money, where'd my money go? It was gone. And Sam Bankman Fried was at. able to do all of this because it was crypto, which is unregulated. And he did it from the Bahamas, which is even more unregulated. So customers had no way to get their money back because crypto, unlike your basic savings

account, has no FDIC insurance. The official crimes he was guilty of were securities fraud, wire fraud, and money laundering. And that's why he could go away for nearly 115 years. But in simpler terms, he betrayed customer trust in the worst possible way. He spent their money. He spent money that wasn't his. So Jack, what's the takeaway for all our buddies who've been following this crypto fraud? Founder fashion has become a red flag.

Yet he's Sam Bankman-Fried's brand, it was built around his outfit, like his t-shirt, his cargo shorts, and his self-proclaimed crazy hair. His unique look was a signal. He defied convention with fashion, just like many geniuses and history have. And you know what, that signal, like it works. Like Albert Einstein's head of hair, it became the symbol for his genius. And Steve Jobs' jeans and black turtleneck or Zuckerberg's hoodies and sandals. But besties, in the last five years, some tech icons have manipulated that fashion formula in order to gain trust.

Elizabeth Holmes dressed up just like Steve Jobs. Adam Newman dressed up just like Jesus. And Sam Bankman-Fried dressed up like he didn't care. Yeties, we have fallen into a pattern of idolizing innovators. But now we realize that those innovators were wearing a costume. And the costume of Founder is now officially a red flag. Jack, can you whip up the takeaways for us to kick off the week? Starbucks just served up its best quarter ever as the pumpkin spice latte is not going away.

The PSL. It's a bold case when ignoring customer research was the right move. For our second story, Clorox sold 30% less product of the last three months because of a cyber attack. Cyber attacks, they become the natural disasters of business. And our third and final story is Sam Bankman-Fried. He's now a convicted fraud and could go to jail for the rest of his life. Founder fashion is a red flag. But yeties, this pod's not over yet. Here's what else you need to know today.

The October jobs report. We just got it. Here's what we got. Here's the numbers. 150,000 new jobs ratted last month and the unemployment rate ticked up to 3.9%. Now, both of those are actually less than previous months, but take it. has good news because the Fed wants the economy to slow down. They want it to chill out a bit. And second, after 30 years, Mr. Jeff Bezos of Amazon is leaving Seattle and moving to Miami. He says he loves

Seattle, but he wants to be near his blue origin rockets, which take off at a Cape Canaveral. And finally, Yeties, remember when we did that story on AI landlords? Like algorithms that were choosing your rent price? That story got big. We got a lot of DMs on that story. Well, a cartoon Hell of landlords was just sued in Washington, D.C. For using the software we told you about to collude on high rents. AI landlords, you're not going to get away with it. Now, time for the best fact yet. This one DM to us by Nolan Stack down in lovely Texas.

Last week, we covered a story about Six Flags, the theme park, which was merging in an $8 billion deal. Now, a lot of Yetis out there would want to know. Why is the Six Flags amusement park called Six Flags? What are the six flags? Well, the answer is the six flags that have flown over Texas. It's a great trivia question. What are the six flags that have ruled the state of Texas? Unlike any other state, Texas has had more flags control it than any other state.

The first flag was the flag of Spain, which ruled Texas for a while. The second flag was the flag of France over Texas. At one point, Mexico came north and claimed Texas as their own. And then the fourth flag over Texas, was the Republic of Texas, because Texas was once its own independent country. Now, the fifth flag was obvious, the United States of America, which still flies over Texas today. But the six flag is not as obvious, and the sixth flag over Texas was the Confederacy. Yeti's six flags have flown over the state of Texas.

And six flags is the name of their favorite theme park. You eat the popcorn, you throw up popcorn. Six times. Now, Yeties, you look fantastic. to kick off the week. Jack, honestly, at the end of the show, you had me neither L-O-Ling nor O-O-F-Ling or L-M-A-O-A-O-ing. I was definitely I-J-B-O-Ling. Yeah, how do you pronounce it, I was ege bowling. I was ege bowling. I was ege bowling, Jack. I was ege bowling. Yeah, he's, if you end up ege bowling on something today, let us know, hit us up at t-boy pot. And if you haven't yet,

check out t-boy pod on Instagram. We've got some fun stuff going on right now. And if you each bowl during this pod, write us a review and let us know what you like. There's nothing wrong with an ege bowl review. All right, we got any more CTAs for these yeties, Nick? I think we're done, Jack. I think we're done. Yeties Nick and I. We'll see you for t-boy Tuesday. And before we go, a happy birthday and happy engagement to Jordan Klein, who is celebrating both of those wins over in San Francisco. Happy birthday to Laura Frederico in Moors Town, New Jersey. And Wendy D.D. Oppenheim, the maker of banana bread is celebrating a birthday in Southwest Ranch's Florida. And happy birthday to Juan Zavala, who's celebrating his 38th with friends and family in Illinois.

I am because of this pod jack. Juan jumped into the stock market. Juan, you got this. Good luck out there. And congratulations to Lauren and David, who just got married in Washington, D.C. And their puppy Bentley was officiating the whole thing. Because puppy, people ultimately prioritize puppies. Yeah. Yeah. And Beth Neal has got a new job at Boston University.

Congratulations, Beth. Congratulations to Azizi Williams and Malika Amundi, who launched a podcast, Happier Ladies. And Amy Gruenhut just ran her third New York City Marathon. And Roberto Carlos just ran his first New York City Marathon. Congratulations to everyone who finished the New York City Marathon. 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 ETFs of the S&P 500. Last week, stocks had their best week of the year so far. Yet is the S&P 500 rose 5% last week. Here, Jack, hit me off. Hit me off for more of a bang on that stocks just had their best week ever. You're feeling it. It's the best week stocks have had. you're going to go get that truck.

Your portfolio is marginally up. What's going on there, Jack? How are you feeling right now? My portfolio is up less than the US $3.5,00, which always sucks. Jack, what is going on last year? If I had done less, I would have done more. Jack, what's going on in the market? Something that's going on.

Feed the energy. Stocks had the best week of the year last week.