The Best One Yet - 🤓 “Revenge of the Clusters” — Nerds’ candy innovation. Reddit’s 42% surge. American consumer confidence?

Episode Date: October 31, 2024

This halloween the hot candy is Nerds Clusters… It shows there’s a business case in gut instinct.Reddit surged 42% yesterday after announcing its 1st profit… AI is breaking the language barrier. American Consumer Confidence rose to a 3-year high last month… and it tells us about the election.Vote for the best business costume @tboypod on instagram: instagram.com/tboypod/$RDDT $HSY—-----------------------------------------------------Subscribe to our new (2nd) show… The Best Idea Yet: Wondery.fm/TheBestIdeaYetLinksEpisodes drop weekly. It’s The Best Idea Yet.GET ON THE POD: Submit a shoutout or fact: https://tboypod.com/shoutouts FOR MORE NICK & JACK: Newsletter: https://tboypod.com/newsletter Connect with Nick: https://www.linkedin.com/in/nicolas-martell/ Connect with Jack: https://www.linkedin.com/in/jack-crivici-kramer/ SOCIALS:Instagram: https://www.instagram.com/tboypod TikTok: https://www.tiktok.com/@tboypodYouTube: https://www.youtube.com/@tboypod Anything else: https://tboypod.com/ Subscribe to our new (2nd) show… The Best Idea Yet: Wondery.fm/TheBestIdeaYetLinksEpisodes drop weekly. It’s The Best Idea Yet. Hosted on Acast. See acast.com/privacy for more information.

Can you see in that thing, by the way? No. I'll be honest, I can barely see in these things, too. That makes it even better. It makes the pot even better. All right, here we go. Here we go. Three, two.

This is Zuck. This is Zuck. It's Thursday, the new Friday, October 31st, Halloween. And today's pod is the best one yet. This is a T-Boy. The top three pop business news stories you need to know today. Yeah, we said it Zuck, and we said it Zuck. Jack, why don't you set the scene?

What's going on, man? Nick and I are dressed up that Zuck. We're zucking Zuck's costume for this year's Halloween. Zuck Zuck's ever now, so we zucked his style. Like, we're Zuck Corp, because, you know, every tech CEO these days, they think they're a fashionist. Now, let me describe what Nick looks like right now. He looks like a CEO who stop trying to make people like him. He's hot Zuck summer.

I got triple XL shirt sleeveless with a gold chain, and I'm wearing jeans for you because that's what Zuck would do. And Jack is wearing like a double triple XL fur coat because, you know, as basically. Azos would do. And I'm also doing the whole podcast from the Metaverse. Do you see this headset I'm wearing? I see what you're doing, Jack. Oh, wait a second. Oh, now I can see you. Actually, I still can't see you. But yet these costumes aside, Jack, three stories for today's T-boy. What do we got on the pod? For our first stories. The hottest company in tech right now, it's Reddit. Reddit. The stock soared 40% yesterday. Because Reddit is using AI better than any other business. They found AI ROI.

For our second story, there is one candy you're going to see today. Nerd Clusters. It's the fastest growing candy in America. Nerd Clusters are a case study in going with your gut. And our third and final story, in the final week before the election, we just got a bunch of big economic reports. But the consumer confidence report is both the most confusing and the most interesting. Can I take this jacket off, Nick? Because I'm really sweating.

Actually, can't take the jacket off. We got to do the whole pod. in our Zuckor outfits. Yetis, before we hit that wonderful mix of stories. Fantastic mix of stories for Halloween Jack. It's not just Halloween. It's our annual T-Boy costume contest. Which Yetis and Bessies have the best business-themed costume ideas.

We got your results. You could go today as demure Jerry Powell. Or you could go as a sexy Applevision pro. Or a zombie dupe. Zombie dupe. It's just your zombie costume, but a cheaper one from last year. Just a cheaper one you found in a Timo. Now, we asked for your ideas, and we got several

super submissions from you this year. So Jack and I added them all up, and here are the four fantastic Halloween costume finalists. Chris is going to Halloween this year as a Google Doc. A Google Doc. So here's what he did. He wore a Google T-shirt with a Dr. Scrubs and Dr. Stathoscope. You see what he did that? You better be leaving those comments as suggestions, Chris. And Amanda went as a kiddolt starter pack. A Star Wars Lego set, Ghost Energy Drink, and Crocs on her feet. 30 years old, but playing like she's nine years. old. Betsy is going to Halloween this year as a crowd strike creeper. A crowd strike creeper. She's basically a giant blue screen because your computer got hacked over the summer and basically turned into a blue screen. I think you can petition to Microsoft. I think they owe you some money, actually. Yeah, they do, Betsy. And finally, Billy is going as a superhero, the inflation fighter. A superhero who smashes high-priced products whenever he sees him. Like, if you see some eggs, he's going to smash him. If he sees real estate, boom. If he sees milk, he's smashing that bottle. If you invite Billy

the inflation fighter over to your apartment, he's going to get into your fridge and mess with some high-price groceries. But who had the best pop business Halloween costume this year? It's actually up to you. Because we're putting it all up to a vote. The poll is open right now. Vote at T-BoyPod on Instagram. Which Yetty has the

best business-themed Halloween costume? It's up to you. Which bestie has the best costume yet? Is it a Google Doc, a kiddolt starter pack, a crowd strike creeper, or an inflation fighter? Vote at T-Boy on Instagram. right now. In the meantime, Zuck, let's hit our three stories. Hot Zuck

Summer. We Zuck Zuck. 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. Our first story. Reddit stock surged 40% yesterday on Word. They're doubling their social media business.

Here's how Reddit is using AI better than any other tech company. Now, Yeti's meta and Microsoft, they reported earnings yesterday. Apple and Amazon, they report earnings today. But none of those big tech companies are getting the love of the short king of tech. Reddit. Reddit, the front page of the internet, the world. Webb's water cooler, the digital campfire, Wikipedia's super talkative cousin. Reddit just announced a trifecta of firsts that investors upvoted. For the first time, Reddit hit 100 million daily

users in a quarter. That's a 47% jump from last year. It was also the first time they had a quarterly profit. And it was also the first time their stock searched 40% in a single day of trading jack. Reddit is officially the best IPO of 2024. Reddit stock has tripled from their March IPO price. Sit down, stand up and upvote again. 40% growth in the stock in one day? What a day! Not too shabby, but yet he's Jack and I had to ask the question you're wondering, too. This company is 19 years old. Jack, 19 years old for a social media company? That's like a boomer social media company. That's not when your growth spurt typically comes. How did they grow 47% last quarter when they're 19? They're like one year older than MySpace.

I think they were born in the same year, man. Now, Barry Bonds used steroids to hit home runs late in his career. Reddit, they found their steroid too. And Reddit's steroid of choice is artificial intelligence. Quick context, Yetis. A big part of Reddit's user growth last quarter was click-throughs from Google search. Fun fact, Reddit was actually the sixth most Googled word on the internet in the last three months. Even your mom clicked her way onto some subreddit last quarter.

She sent me a link to a brownie recipe, and I was like, Wow, Mom, I didn't know you were on Reddit. She's like, I did read it. I did read it. But the big reason that people are finding Reddit on Google more and more and more is artificial intelligence. In fact, as Jack and I jumped in T-boy style, we discovered that Reddit has found the most lucrative use of AI of any company yet. It's actually doubling their business as we speak. Reddit got an AI ROI.

They're getting an R-O-A-I. So, Jack, what's the takeaway for our buddies over at Reddit? AI can eliminate one of the biggest barriers of business, the language barrier. Yet is, Reddit has an ocean of content. Ten million words exist on Reddit completely about advice for making sourdough. But the majority of that content is written and posted in English. True. So Reddit's market is limited.

Until now. Because this year, Reddit started using AI to machine translate everything on Reddit into every language. So let's say today you're a German searching for How do I know if sourdustata is ready? There is now a whole German subreddit that exists because it was translated from the English one. An entire originally English-written baking bread in Bavaria subreddit that has been translated by AI to German.

So Reddit, they're multiplying into multiple languages and the number of new international users quadrupled last quarter as a result. Until today, Reddit has basically been just an amazing. American company. But now, they're growing into every other country thanks to AI. 20% of the world speaks English, but AI can quickly reach the remaining 80%. This is the most efficient, effective use of AI we have seen so far. Reddit just eliminated the language barrier. For our second story, the number one candy you're going to see this Halloween, it's nerds clusters. Nerds clusters are the fastest growing candy in America,

thanks to one gutsy decision. Yeties, get this, something Jack and I have never seen before. But the nerds, candy, just got front page pieces in both the New York Times and the Wall Street Journal. I bet you both reporters were really angry when they learned that their coverage was going to be split between the two. I mean, forget election coverage. It's all about candy coverage these days. The reason both of the papers of record are covering nerds is because nerd sales have been growing like software recently. In six years, nerds revenues have gone from 40 million bucks a year to 700 million bucks a year, Jack, could you sprinkle on some financial context? That's almost 20x growth in just six years.

Nerds is the new Nvidia. Nerds had a Super Bowl ad last year. They're getting another one this year, and they're Kylie Jenner's favorite candy. And they're not even paying her to say that. They just happen to be your favorite candy. But we should clarify, this is not the box of nerds you remember from growing up, where the box is divided in two flavors, remember? No, no, no, no, no. What we are talking about is the new version of nerds known as the nerds clusters. A nerds cluster is a dime-sized gummy gummy, covered in the tiny, tangy nerds that you know.

It basically is like eating a cavity. That's what it's like. Imagine like a almost melted Swedish fish that gets tossed into a bowl of nerds and you spin it around a little bit and then you pull it out. And then get spray painted in 42 different colors. Yet he's, get this, that spin-off version of nerds, was introduced just six years ago, but it's now 90% of nerd sales. Nerds is basically gone. Nerds clusters are all you see now. The student has become the teacher. So, Yeties, we've got to ask, how have nerds clusters become the fastest growing candy in America?

Well, we read the New York Times and the Wall Street Journal articles, which were, by the way, the longest articles we have ever seen either of those papers produce. And according to that reporting, nerds ignored the data. Back in 2018, nerds was uncool. They had fallen behind Starburst, Skittles, Sour Patch Kids, so the company was bought by Ferrara, the Italian candy company, for just a tiny bit of money. And then Ferrara scientists pulled off an engineering feat.

They managed to stick hard candies on a gummy and maintain the integrity of the shape. It was a candy innovation. And ultimately, they found the ideal ratio of crunchy to smushy. That's just really satisfying. So then they said, okay, we have got something here. let's think about what consumers want. And Jack, what was the reaction in the test markets? Bad. Consumers didn't like it. It was bad. According to the Wall Street Journal, every bit of data about

these new nerds clusters said it was going to be a dud. Online surveys of the concept also came back negative. In focus groups, people said the nerds cluster was like kibble for people. It was dehumanizing. They said it looked like fish tank gravel. You can't serve that at a big affair, Jack. But the people in charge of nerds ignored the tests and followed their tastes instead. So they went to market with the nerds clusters. Even though every data point said that this was going to be a failure of the product, they launched it, which is the kind of thing that honestly, it's going to get your whole team fired if it fails, Jack.

But it didn't fail. The nerds cluster started going viral. And now it's the fastest growing candy in America. With $700 million in sales, six times more than the original nerds candy. For comparison, that's about a first. fourth as much sales as number one, which is the Reese's peanut butter cup. And they're probably almost as big as a lift. So, Jack, what's the takeaway for our buddies over at the nerds clusters?

There is a case for going with your gut. Yeties, we've all been in that meeting. The meeting where you want to do something and you're excited, but then someone says, hey, but what is the data say? You have a fantastic idea, but some buzzkill on the court of the conference room asks if I have data to back it up. Data. It drives decisions across the meeting rooms of corporate America for everything. Deservedly so. But there's another way you can make a decision. It's called going with your gut.

Or how about we call it intuitive insight instead? I like that. Refraising Jack, because yet his guts are actually a combination of expertise, of awareness, and of your risk tolerance. According to Psychological Science magazine, it's deep experience that informs gut instincts, but those deep experiences are overlooked. And there's a great example with the National Institute of Health. Medical trainees using intuition had equal or greater accuracy than simple quantitative analysis. There's a great study from the National Institute of Health where medical trainees use their intuition instead of following quantitative analysis and they got equal or better results in the medical

field. And Harvard Business Review has a list of successful products where data said, no, you shouldn't launch this, but the leader's gusts said yes. For example, all the data said that sports cards would never sell, but sports cars are now a huge industry. And the data famously told Steve Jobs that he shouldn't launch the iPod or the iPhone, and he launched both anyway.

So, Yeties, your gut, it's actually a powerful input you gotta listen to. Because your gut is built on experience. I think what we're saying, Jack, is that there's a brain in your gut. Now a quick word from our sponsor. For our third and final story, U.S. consumer confidence just rose in October by the most in three years. But the methodology of the survey says something big about the election. Yeties, Jack and I have been checking the calendar, and we just got a whole bunch of big econ reports the week before the election.

Yesterday we got the GDP report, and tomorrow we get the monthly jobs report. But the other big economic report, it actually comes from the conference board. The conference board, they collect and analyze important data about the U.S. economy. And their signature report, what is it, Jack? The Consumer Confidence Report. The Consumer Confidence Report. It's kind of like the Fonds of Economic Reports. How you doing?

How you're feeling about the economy? How you doing over there? And in their final report before the election, they showed a surprise jump in economic cheeriness among Americans. Jack, let's jump into the numbers. What was the huge consumer confidence boost? A 9.5 point jump to the highest level all year. And the outlook for the future, it hit a three-year high. And data-wise, this high consumer confidence, it makes sense.

The U.S. economy grew 2.8% in the third quarter we learned yesterday. The unemployment rate remains at a historic low, and interest rates are finally coming down. But that's not the end of the story, is it, Jack? No, it's not. Because the University of Michigan does a similar confidence survey that shows different results. In fact, the University of Michigan's consumer sentiment survey, shows the opposite of everything we just said. According to the University of Michigan,

consumer confidence fell in April by 13% and has not recovered in the six months since. So yet, his Jack and I saw these two opposing forms of data on the same exact topic, and we had to figure out what is going on. New analysis explains why University of Michigan's data went dark in April and hasn't recovered. It's because the University of Michigan

switched how they conduct the survey. Get this, Yeties. Beginning in April, the University of Michigan switched from phone surveys to online surveys. They asked the same questions, but they did so on the internet, not on the phone. And here's what we found fascinating. It turns out people are more likely to answer negatively in online surveys than in-person or phone surveys. Here's a potential reason why. First, human surveyors, they're actually trained to project positivity during their in-person surveys or on the phone. You're basically supposed to smile on the phone when you're doing the survey. You're supposed to smile with your voice. Hey, Mr. Thompson, I have a few questions for you.

How are you feeling about the economy? Otherwise, Mr. Thompson is hanging up on you, Jack. You got to start with that smile. And that positivity coming from the surveyer, it could sway your answer. True. But that wouldn't happen in an online survey. Basically, if Charlie on the phone sounds chipper, you don't want to be a Debbie Downer when you pick up the phone. That's why Michigan's consumer confidence data has been down since April and hasn't recovered.

It's because they switched to online. So, Jack, let's add it all up. Consumer confidence is way up by one measure. And yet, it is still down by another measure. Survey says, takeaway moment. So, Jack, what's the takeaway for our buddies who are everyone in the economy? There's data, and then there's data quality. Yeties, this story, it shows that two firms reporting the same condition of our economy,

found different results because of different methodologies. If you're making a decision based on data, like nerds didn't in our previous story, but a lot of people do. The quality of that data is key, but the quality of data is often overlooked. And this is one reason why many have lost confidence in political polls since 2016. Methodality changes are warping our measurement of the reality. So besties, if you've got intel you're making decisions on, the big question is, how are you gathering that intel? Because there's data, and then there's data quality. A cake is only as good as its ingredients.

Jack's skeptical, but the data depends on the methodology. I'm not skeptical of that last point. Good call. Jack, can you whip up the takeaways for us for Halloween pod? Reddit stock jumped 42% yesterday because AI is helping it double its user base. AI is breaking down the language barrier, one of the biggest barriers in business. For our second story, it's nerds clusters. They were invented six years ago, and,

now they're 90% of nerds' sales. Best is there's a business case for going with your gut. There's a brain in your gut. And our third and final story is the conference board. They show U.S. consumer confidence improving. But Michigan's data is flat. It's all because there's data and then there's data quality. Your cake is only as good as the ingredients.

Still skeptical about an analogy. I'm going to bake you a better analogy, but you know, you got to go with the analogy you got Jack sometimes. But yet is this. Pod's not over yet. Here's what else you need to know today. First, Starbucks is ending it's Oliotto olive oil coffee you can't get anymore. Olayotto. I nailed the pronunciation. They got more important things to deal with. So the new CEO is streamlining the menu. Starbucks, they just reported third quarter earnings in sales. At the 40,000 stores, they fell nine

percent on average. So the new CEO, Brian Nicol, he's eliminating distractions. Like oliotto. Yeah, like olive oil. And second, Volkswagen announced some pretty bad car earnings. Volkswagen's operating margin, it's down to just 2%. They barely make any money when they sell a car. Two cents of profit per dollar sold. And that's why Vox is moving to close three factories in Germany. The first time ever, Volkswagen's done that. And finally, Apple is making a big media move. They're making a movie about the Oregon Trail. Apple, they're going to produce a movie about the OG video game, The Oregon Trail. Not just a movie, a musical about the pioneers in the wagons that had to ford those rivers.

Somehow I think Seth Rogen's involved in this. I think he's going to help you find a bison. You can watch as long as you don't get dysentery. When sec Jack, yeah, it's frostbite. Now time for the best fact yet. This one whipped up by Jack and me because like we said, we did a lot of research on nerds and we actually had more to share with you. Nerds, it's a millennial.

The candy was born in 1988, just like Nick and me. You're of the dragon. I love that. Nerds, you're one of us. Nerds did some research, and they discovered that men like to pour food directly into their mouths from the container. Like a bag of chips at the bottom of the bag or like a box of nerd straight into the mouth. But women prefer to pour food into their hands before they pour it into their mouths. Women are more civilized than men. Yeah, the takeaway here is that women are smarter than men,

and men just pour anything into their mouths without even really thinking about it. Also, full disclosure, Jack, if you stop by our house in San Francisco, We're going to be serving nerds, clusters, and glow sticks for trick-or-treating today. Nice. Nice. We're not a regular apartment. We're a cool apartment, Jack. Speaking of Halloween of Coolness, how's that sweat t-shirt?

Zuck style. What do you think about it? First of all, this gold chain is leaving a mark on my neck that makes me question if it's real gold. That's a Timo acquisition. How's that giant fur coat made out of bear? Hey, check his hat on YouTube, Yuddies, if you want to see this. Yeah, we're wearing Zuck Cor. We're going full tech CEO.

And Jack, you look fantastic. Oh, by the way, Yetis, you got to vote on the best business costume yet on Instagram at T-Boy Pot. And you've got to drop a link for where you got that sweatshirt, Nick. Yeah, Jack, I wear this like every weekend. It's called Mon Italy, and I got it in Los Angeles. I'll drop a link in the newsletter. So that others can suck our zucking of zuck. Right?

Is that correct, grammar? It's a triple zucking. It's a triple zucking. So besties vote on the best business costume at T-boy Pot on Instagram. And Nick and I, we'll see you tomorrow. Zuck and I will see you tomorrow. And before we go, a happy 27th birthday to Yeti Keswick Chu over in Toronto, Maple Leafs Canada. Happy 50th birthday to Josh Miller in Wobbin, Massachusetts, who's partying like a rock star in South Beach right now.

And George and Amanda in Highland, Michigan, just got engaged and they did it on George's birthday. So it's like a quadruple win, Jack. Congratulations, guys. Let's see the ring fix. An happy birthday to Brendan Ang and Melrose Mask, whose wife in Cockapoo-Oli say, you're a good boy. He's a good boy. And to anyone else celebrating something today, make it a T-boy.

Celebrate the wins. This is Jack. Nick and I both own stock of Apple, and I own stock of Reddit. Jack, I'll see you tomorrow with a candy hangover. I'm meeting the whole pillowcase fault today. You trick-or-treat with a pillowcase? What do you trick-or-treat with?