The Best One Yet - Shopify is “The Force” — Jack Dorsey is MIA in Africa — McDonald’s enters the Crispy Chicken Sandwich Wars

Episode Date: December 3, 2019

Cyber Monday set a record as the biggest online shopping day in US history — but the real winner this year is Shopify. Jack Dorsey is busy being the CEO of both Twitter and Square, but now he wants to live in Africa for 6 months. And McDonald’s is looking to enter the Chicken Sandwich Wars, but its biggest challenge comes from the inside: Franchisees.Learn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. And this is Snacks Daily. It is Tuesday, December 3rd. I made it to California. Snackers. I am out of the terminal. This is the best Snacks Daily yet.

Jack's wearing Maroon. He only does that when he's feeling good. Let's say I'm well rested after 24 hours of travel yesterday, but we got three great stories. What a mix, Jack. Can you break it down? Cyber Monday, shocker, set a record for online sales. Nick, guess what? It doesn't matter.

We haven't even read the numbers, but we can confidently say it's a record for most online sales. It's a blank number and then a billion. That's all you need to know. But the real winner yesterday was shop-a-fi. It's the faceless, bodiless, guiding force behind your rando online purchases he did all day yesterday when you should have been working. Second story, Jack Dorsey has two jobs. The man is the CEO of Twitter and the CEO of Square. He likes side hustles as a CEO. Now he wants to live in Africa for six months in 2020. Spoiler alert here. CEOs, they get to write their own work from home policies. Hey, Jack, where are you dialing in from? Wherever I want to dial in from Africa.

Third final story. McDonald's may be entering the crispy chicken sandwich wars that like Popeyes and Chick-fil-A have been back. But don't give any credit to McDonald's headquarters. This one's all about the franchisees. Now, Snackers, before we jump into all this, we've got to have a kind of a sad, somber moment here. Yeah, we need to change the background music to something a little more gloomy. Did you survive the Four Lococo famine of 2010? I barely survived that.

There was also the rosé scare of 2015. Hit the Hampton's hard. How about the departed from the kale kibosh of 2016? Some of you may have survived all three of those. That's why we want to warn you about what's coming in 2020. There may be a French fry shortage as early as the first quarter of 2020. Our buddies over at Bloomberg, they jumped in, this is like jumping in snack style. They spoke with the industry relations director over at the Idaho Potato Commission, real thing.

Which is, of course, the most coveted position in the state of Idaho. Turns out there, it turns out there, surprise frost, and freezing weather that's been hurting the potato crops lately. Potatoes, I think they're either legumes or starches, but they grow in the ground. And if it's freezing, like, that disrupts the growth. They're very sensitive, apparently, when it comes to the plant life. So Bloomberg reports that output of potato crops have dropped by 6% this year. And in the state of Iowa, which is the Idaho of potatoes. 5.5% drop.

Now, this is particularly hurting the very critical long potato, which is of particular interest to French fry makers worldwide. Basically just potatoes big enough that you can make a whole French fry out. What are those fries called the chick-jack with like the ridges? Crinkle cuts. More surface area, more ketchup, better taste. Now, as with any shortage of any product, prices are expected to spike for French fries. So you might want to try out those polenta fries you've been thinking about.

If there ever was a moment to shift your diet, snackers. Order the side set. You're tuned in the snacks daily We spoke to the lawyers And we got to get something legal out the way The snacks about the hair ain't food It's air candy They don't reflect the views of the robberhood family

It's all informational just so You know we're not recommending any securities It's not a research report or investment advice Not an offer or sale of a security Right Snacks is digestible Business news for you Robahood Financial LLC

Member FINRA slash SIPC For our first story, Black Friday and Cyber Monday are over. We've got one more theme for you, Snackers. Shopify is a force in the e-commerce galaxy. Did you get me anything, by the way? It's a secret. If I get bath soaps. If I get bath soaps again, I'm not going to be happy.

All right, Snackers, yesterday we talked about Black Friday. We said that Omni Channel is big. Most e-commerce is happening on phones, not on computers, and you should never, ever pay full price for a Bluetooth speaker. It's going to be on sales. But while you were listening to your snacks yesterday, you probably were not doing work. You were busy getting through your inbox, which was packed with three more hours left than Cyber Monday. Headlines.

I bet as you're listening to this right now, they're like, we messed up the calendar. It's still Cyber Monday here. It's three more days until Tuesday. You should be buying. Subject line, subject line, subject line. One more trend, though, before the Cyber Monday and Black Friday extravaganza is over, we want to say. It's Shopify. Shopify is the company that's shopping with you, and you didn't even know it.

Let me introduce you to Shopify. It is a software as a service company, aka SaaS company, SAAAS. And what they're doing is they're handling all the e-commerce back-end on whatever website you're buying that widget-y thing on for mom because he didn't get it from a mainstream website. Chubbies, Allbirds, Kylie Cosmetics, you can buy all their stuff online thanks to Shopify. Shopify used to do the back-end website purchases for Tesla cars on their website up until recently. You could buy a car online thanks to Shopify. Now, here's something that Shopify's like engineers whipped up over the weekend that was one of the most entertaining things we've ever seen. Somebody deserves an A-plus on this capstone project.

Please promote Jerry over in design graphics. Check out Shopify's blog or our newsletter from Monday morning because we linked to it. There is a data visualization thing that shows in real time a map of the world and all the payments that Shopify is making happening. It's going from like Kentucky to Washington, D.C., Brazil to China. Germany to France. These are the Shopify merchants and buyers like making things happen. Jack and I are staring at this thing like a tennis match. It's like back this way, back that way, back that way. It was wild. Nick was looking at Latin America where there were a few payments. Most were in the U.S.

Jack, we were looking in Antarctica for a bit. I watched Antarctica for like a solid 38 seconds. Someone's got to order handbormers down there. No Shopify payments in Antarctica. Now here's another announcement Shopify made that was fascinating to us. They processed $900 million of transactions on Black Friday. 900 million. Shopify announced that. And we also know that there were $7 billion of total online payments on Black Friday. So we did a little hardcore division here.

Division, yes, not multiplication. Yeah. And we know now that Shopify controls 12.5% of all U.S. e-commerce that happened on Black Friday. Let that sink in because what that means is that Shopify has become one of those force companies. It's everywhere and nowhere at the same. same time. Obi-1, Kenobi, explain this to Luke in episode four. Right. An energy field created by all living things. It surrounds us, it penetrates us, and binds the galaxy together. That's the force. And Shopify, it's doing one-seventh of all U.S. e-commerce right now. One million

merchants rely on Shopify for online sales snacks. Now, another one of these force companies is Amazon Web Services, aka AWS. True. If you forget to pay your AWS bill and you have an app, Good luck. Your app is going to crash because AWS is the force silently behind you. So, Jack, what's the takeaway for our buddies over at Shopify? Shopify is basically a monopoly. And here's the thing. Investors know it.

There is a reason Shopify stock has octupled in the past three years, which for our Snackers didn't like major in Aladdin at the age of six means like it's eight times is what it was. Yeah. Its stock price is eight times what it was at the beginning of 2017, even though Shopify is still not making profits yet. No. And its size, it's about the size of three.

three lifts. Yes, Shopify is worth three lifts. So Snackers, if we were going to sell snacks, t-shirts potentially, a website we could use would be Shopify to help us make the transactions, set up the site, do the whole shabank. And investors know that Shopify is the only company that is helping companies at scale sell stuff through their website and their apps. So if you're Shopify, eventually you're going to transition from just spending so much on ads and marketing so you can like help other websites and, you know, add more clients to starting to sit back, charge high prices and make more money. Investors have already bought Shopify stock waiting for that monopoly profit moment.

For our second story, Jack, roll me in flour and throw me in the friar. McDonald's is testing out a fried chicken sandwich. This is official. This is official. They are testing a southern style fried chicken sandwich in the Houston and Knoxville, Tennessee, Mickey Deezes. Interesting options there. Now, Snackers, we know exactly what you're thinking.

Doesn't McDonald's already have chicken McNuggets? Right. Don't they already have the McChicken sandwich? Yeah, I got to interrupt you there. Your record. Snaggers, I don't know this. I'm just curious. Your record for chicken McNuggets is consumed in a single sitting.

I had an awful habit in my in my chubby eight to 14 year old years. It's quite the error. I would only eat the skin and I'd leave the meat behind. It's gross. It's kind of an infraction there. So my record's 24. We split two 20 packs, me and another guy. Nick, in one sitting, not in a whole,

week. Right, but you smell them with enough barbecue sauce that like it goes down faster like in those hot dog eating contests. Snackers, we knew what you were thinking. Chicken McNuggets doesn't count here. No, it doesn't count. This is different and it's not the spicy barbecue limited edition McDonald's chicken sandwich that they used to have either. Yeah, they came out with that. It was limited time only. That kind of failed. They've also got a McChicken sandwich, as Jack had pointed out of there. Right, those were on the dollar menu, I remember. Right. Those are on dollar menu. So they're trying to I'm talking about it. What they're trying new here is ripping off what Popeyes and Chick-fil-A did,

a Southern-style fried chicken sandwich. Now, here's the funny thing, Snackers, about Southern-style fried chicken sandwiches. These aren't chicken sandwiches. They're now profit puppies. Do you remember the September chicken sandwich wars? It was yesterday. I almost lost a limb. Someone was hungry.

They walked by me. Popeyes had its best quarter in 20 years because people were ravenously looking for these sandwiches. Sales jumped 10% for that quarter. And their rival, in this case, Chick-fil-A, they had a wild quarter, too. They are now the third biggest chain in the country by sales. Even though they have a fraction of the number of locations as McDonald's, they're right up there in terms of sales. Get this. They're third in the country in sales, and yet they only have 2,000 locations.

McDonald's has 14,000, seven times as much. I think they have twice as much sales per location as McDonald's. Thanks to Ishan, a snacker from Mumbai, who sent in a snack fact of the day. a couple weeks ago. And snackers, that's keeping in mind that chick flight isn't open on Sundays. So they're doing all this with like one hand behind their back, six days a week kind of a situation. And to be clear, when we say Southern-style fried chicken sandwich,

we're talking about hot sauce and honey. Pretty much. I think that kind of a thing. I think that's what's in here. I like the fuku sandwich over in New York. They've got like that spicy barbecue sauce. Full disclosure, I did not participate in these chicken sandwich wars. No, full disclosure, I didn't either. So Jack, what's the takeaway, though, for our buddies over McDonald's?

McDonald's actually has thousands of Scouts on the ground, tasting out foods. They're simultaneously the owners and the employees of McDonald's. We're talking about the franchisees because 81% of McDonald's, they're not actually owned by McDonald's. No, 81% of the locations are owned by small business owners. They're called franchisees. And here's the deal.

They get to run and operate their own McDonald's restaurants with certain conditions. Very true. So they get the logo. They get to use the menus, the recipes, all the resources. the materials, the ingredients, all that stuff. And they also have to keep the high quality standards that McDonald's dictates from corporate HQ. There are no. And they need to send a certain percentage of sales back to HQ, you know.

Hey, keep me happy over here. Hey, how you doing? Hey, I'm Mr. McName. Mr. Franchisee. So back in July, the National Owners Associations of Franchisees, they wrote a letter to McDonald's headquarters with one message. Never a good sign these days when it's a letter, not an email. People are going crazy about these chicken sandwiches, and we need to make it a priority. That's what they said, and McDonald's is now reacting.

They're reacting late, but at least they're reacting. Oh, by the way, that letter was sent before the chicken sandwich wars, so these franchisees are coming. McDonald's is lucky to have them. For our third and final story, this one's wild. Jack Dorsey plans to move to Africa for like six months, while he also CEOs's Twitter and Square. Jack, did you have to run this by the old study abroad department? Hey, Jack, I think you're stretching yourself a bit too thin.

You might want to think about saying no to this opportunity. He's going to be like your friend Julie, who comes back from Spain and says you've got to take a si-s. You're like, Julie, you're in Barcelona for three months. Bartholona. She's going to correct you. It's perfect. Jack Dorsey, CEO of Twitter and Square, he spent November in Nigeria with a bunch of cryptocurrency entrepreneurs and singing the song Toto.

Right. You know, they bless the reins down in Africa. Actually, Toto's the band. By that. Now, like all good stories, this one began with a tweet. It was Jack's tweet. His handle, by the way, at Jack, co-founder of Twitter here. Yes, this happened the day before Thanksgiving.

He said it's sad to be leaving Africa for now. Africa will define the future, especially the Bitcoin one. Not sure where yet, but I'll be living here for three to six months in mid-2020. First of all, it's before Thanksgiving. So his mom's probably like, um, Jack? Excuse me? Can we talk about this? And then let's talk about the Twitter and Square employees who read this on Twitter, and they're like, what the heck?

We've got an aw hands. You've got a lunch on Tuesday. But Jack is a pretty eccentric guy. Right. So Jack is the co-founder of Twitter, and then he co-founded Square like three years later. One is the social media app. One is the payments processor behind a lot of small business. He's 42.

He has a fantastic beard. He fasts every day. He only eats between 6.30 p.m. and 9 p.m. once a day. He's having like some sort of hibiscus broth recommended by a Nobel Prize winning physicist. He's like, how are you going to live to live to be 800 if you're not eating mushrooms once a day? So he co-founded Twitter and he co-founded Square. But now he is the CEO. No co.

He's the CEO of Square and the sole CEO of Twitter. No joke. He spends half the day at one company and then hustles over. Does the rest of the day at the other company. I think the headquarters are like one block away from each other in San Francisco, which is going to be nine hours of time zone away from Africa. Really hard to dial into those calls when you're nine hours ahead. All right. Let's talk about why is Jack going to spend three to six months next year in Africa?

Because if you're square, actually, if you're any company right now, this is what you're thinking. Africa is the post-China opportunity. If you're a market analyst, you might look at China and India. Those countries both have over a billion people. They're obvious places for economic growth. Everyone talks about it. India, China, China, India, this, that, this that. It's those two always get the attention. But growth in China and India are slowing, while growth in Africa is growing.

Africa is the fastest urbanizing continent. And get this, Snackers, this stat blew Jack and I away. We have to sit down on this one. Brookings Institute, which is a think tank based in Washington, D.C. Sounds important. They project that the 10 fastest growing cities in the world between now and 2035, there will all be African cities. And city dwellers, they tend to be the ones driving economies.

Their quality of living is rising. They're using smartphones. They're urbanizing and modernizing. They're splurging on this. They're splurging on Jack. So if you're Jack Dorsey, you're looking at this situation like, hey, I can get a pretty expensive future customer research trip out of this, and I can expense the whole thing. To my own company that I found.

Not too chat. So Jack, what's the takeaway for our buddies over Twitter and Square? Well, Twitter shareholders might want to be upset about this, but Square shareholders, they could be happy about this. Snackers, keep in mind. Square is the payments app for small businesses and they do consumer payments. Twitter is just a short form social media app. Yeah, if you are a Twitter shareholder, you're thinking to yourself,

next year is 2020. Yeah. Politicians like on both sides don't like Twitter. They're trying to regulate us. Our ad situation is controversial. It's an election year. It's an election year. And you know like social media meddling in election year, you might want the CEO present for this year.

Jack, can you just be at the standing desk? we'll get you the bone broth when you need it. So he's going to be absentee for next year when people are submitting absentee ballots. But if you're a square shareholder, you're probably thinking, you know what? Africa is actually our best growth market. Jack, why don't you just hang out

and spend as much time over there if you need? Africa is packed with people with phones who want to pay using their mobile phone and do business on their mobile phone. And African economies are driven by smaller businesses that don't have a dominant business payment processor right now. Square shareholders like, This is the perfect continent for Square.

Jack, can you whip up the takeaways for us over there? Shopify is the force of non-Amazon online shopping. Investors know it, and that's why the stock is up, 8X in three years, aka OctoUp. Octopold. Octop. Octop. That's good. McDonald's is finally entering late to the chicken sandwich wall.

And it's thanks to the franchisees. They saw this coming. They wrote a letter, and then they wrote like an angry letter. Okay, Jack Dorsey's 20-20. He's going to CEO two Fortune. 500 companies and study abroad in Africa for up to six months. It makes your news resolution seem pretty unambitious right now. Now, Snackers, time for our snack fact of the day.

This one sent in from Neil, who's originally from Mumbai, but now he's living in New York. Yeah, he sent this through Instagram. He points out that Pokemon is the franchise with the highest grossing media sales of all time, with $92 billion in sales from Pokemon since it was founded in 1996. Now we know you're wondering, who else is up in that crew of big media franchises? I bet you're thinking it's Marvel, which had like 19 movies as part of Disney since 2008. One second, Jack. They'd have another one.

The other one just came out right now. Marvel actually only has a fraction of the sales of Pokemon, like one-third at 35 billion. The other ones in the top five, we're talking Hello Kitty, Star Wars, and then get this, Snackers. Winnie the Pooh. Winnie's up there. Yeah. Mickey Mouse is also in that top five. Interestingly, Pokemon came mostly from video games and merchandise.

Marvel came mostly from box office ticket sales. Snackers love to have any with us for the second day of the week. If you haven't yet, go down, drop a five-star rating in wherever you're listening. We love those ratings and reviews because they help snacks daily get discovered. We will see you tomorrow. Can't wait. This is Jack. I own stock of Amazon and Nick owns a Bitcoin.

Single Bitcoin. The Robin Hood Snacks podcast you just heard reflects the opinions of only the hosts who are associated persons of Robin Hood Financial LLC and does not reflect the views of Robin Hood Markets, Inc. or any of its subsidiaries or affiliates. The podcast is for informational purposes only and is not intended to serve as a recommendation to buy or sell any security and is not an offer or sale of a security.

The podcast is also not a research report and is not intended to serve as the basis of any investment decision. Robin Hood Financial LLC, member FINRA, SIPC.