The Best One Yet - 🙂 “South Park me” — ChatGPT’s animation studio. CoreWeave’s Snow White IPO. SoulCycle’ Fashion Stores

Episode Date: March 31, 2025

ChatGPT’s servers “melted” because of its new feature… Steal from every movie studio.SoulCycle is launching 1st chain of fashion stores… It’s SoulCycle vs Lululemon.CoreWeave is the biggest tech IPO in 4 yrs, but it flopped… Because of our 3 Rules for IPOs.Plus, we’re heading to Chicago for an Awards Show… “Best Business Podcast”)$CRWV $LULU $MSFTWant more business storytelling from us? Check out the latest episode of our new weekly deepdive show: The untold origin story of… Goldfish Crackers 🧀Subscribe to The Best Idea Yet: Wondery.fm/TheBestIdeaYetLinks to listen.“The Best Idea Yet”: The untold origin stories of the products you’re obsessed with — From the McDonald’s Happy Meal to Birkenstock’s sandal to Nintendo’s Susper Mario Brothers to Sriracha. New 45-minute episodes drop weekly.—-----------------------------------------------------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.

This is Nick. This is Jack. Welcome back. It is Monday, March 31st. 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. Oh, did you pack the tux?

Did you pack the tucks, Jack? I did not. Okay. I think it's a cocktail casual. Oh, yeah. More on that in a sec. We've got to coordinate ties. In the meantime, three fantastic stories for today's show.

Jack, what have we got in the T-Boy? For our first story, Chat GPT's new image generator broke the internet last week. Because it let us turn one photo of this podcast into The Simpsons, Pixar, and South Park. For our second story, Soul cycle isn't just surviving? Soul cycle is thriving.

So Soul Cycles dropping the cycle and launching a fashion store called Soul. And our third and final story was the biggest tech IPO in four years. It happened Friday. It was Corweave. But Corweave was a bust because the three ingredients of a good IPO,

they were all missing. But Yeti's bull. Before we hit that wonderful mix of stories. What a mix of stories. Great mix to come back to, Jack. We'd like to share something special with you. Yeah, besties, after this recording, Jack and I are actually flying out to the great city of Chicago.

Not for Wrigley Field, not for deep dish pizza, not to take selfies at the beam. And now, we're actually going to Chicago for the biggest podcast award show of them all, the Amby Awards. The Ambies, known as the Oscars of Audio. The Ambies, the Emmys of Podcasting. The Grammys of Podcasting.

Because our new weekly show, the best idea yet, it was nominated for Best Business Podcast. With the best idea yet, we switched our careers, really, from a news focus to deep dives on the best products of all time. So Jack and I are heading to Chicago for the ceremony, but actually, we don't know if we won. We may have lost. We don't even know. Last year, you helped us win a Webby Award by voting for us, but this award is chosen by judges. So Jack and I are getting all dressed up in maybe tuxitos, walk in the red carpet. and our fingers will be crossed. And we're up against some incredible competition.

Oh, yeah, another nominee in this category is how I built this, the legendary entrepreneurship show. Full disclosure, that was the first pod we listened to like nine years ago before we started a pod. Yeah, that host, Guy Raz, he's actually one of our vocal idols, and now we're up there with him at the ceremony. So we don't know what's going to happen at the event, but we still just want to say thank you right now. We've published 26 episodes of the best idea yet,

from the Happy Meal to Super Mario to Birkenstein, to Costco. This is kind of like a thank you speech, even though we haven't won. We have a team of 10 researchers, producers, editors, sound editors at Wondry who make each episode come to life. And so many thousands of you who listen to us every week on that show. Our new show couldn't have been nominated for Best Business Podcast without your push and play. So Yetis, celebrate the wins no matter what. And Jack, let's hit our three stories. They had an idea to cause a cultural storm. It's the best one yet, but the best is a norm.

Jack Nick Dix. 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. First, a quick word from our sponsor. For our first story, Open AI broke the internet last week by letting anyone make an image look like any style from the Simpsons to Pixar.

And you know what? Everyone did it. Now that anyone can create art instantly, we have to redefine creativity. And we've got just the terms for you to do so. But yet, he's over the last week, something happened at OpenAI, the world's biggest $300 billion AI business.

It was so big that the CEO, Sam Altman, said its computer chips were melting. Literally, melting. Here's what it was. An overload of the same request at the same time. Make this photo into Pixar. Another similar request would be like, take my graduation photo, chat GPT, and make it look like the Simpsons. Or turn my engagement photos into Studio Ghibli artwork.

Now, besties, the amount of computing required to do all of those image generating queries almost broke the company. It was so popular last week that Sam had to limit the number of image requests that people could make per day. Now, besties, this is Open AI's new 4-0 image generator. And full disclosure, we got blocked because we did so many requests. If you want to see what this looks like, pause the pod and go to our Instagram because we had some fun. Yeah, we posted a whole bunch of pictures of our recording in like a dozen different studio styles. So you can see Pixar Nick and Jack in the pod studio. South Park, Nick and Jack in the pod studio.

Disney Princess, Nick and Jack. The Simpsons, Barbie, you name it. We turned all of it. Wes Anderson style, Nick and Jack. We whipped it up. Nick, I think you looked best as PowerPock. girl. Jack, I thought your biceps were screaming in the Barbie version. I just want to throw that out there. This was fun, but it also reminds us of the two scariest letters in artificial intelligence.

And they're not A and they're not I. Yeah, that's right. The two scariest letters in AI are actually IP, as in intellectual property. Intellectual property is the legal term for original works owned by their creator and protected by law. Now, in capitalism, IP, intellectual property is sacred. We want to reward the creator to let them profit off their creation. So like Coca-Cola trademarks their logo and their polar bear animations because both are valuable IP. The Simpsons is protected IP. But what about an AI image created to look like the Simpsons? We're going to have to talk to our lawyers about that case. So Open AI just got record engagement, but the Simpsons it was copying wasn't compensated. And the AI only knew how to make stuff look Simpsonsie.

because it consumed Simpsons content, probably without the Simpsons consent. Now, we should point out, Sam Allman, the head of OpenAI, tried to reassure everyone in the world. He said that his product will only copy the style of art studios, not of individual artists. Although we do have to ask, isn't that still kind of stealing? And what if they change their policy? And do allow to copy the style of individual artists. So, Jack, what's the takeaway for all our buddies in artificial intelligence? As the cost of creating goes down, the value of creativity goes up.

Art Yetis, let's break down those two concepts. The cost of creating something, that's never been lower. In seconds, you can upload a photo to chat GPT, and it will create a cartoon version of artwork in the style of Pixar, if you ask it to. Now, that's creating. Creating is about execution, and the cost of that creating has never been lower.

Thanks to AI. But creativity, is the art of inventing an original thing. Creating is what millions of people did instantly with chat GPT just last week. Creativity is Pixar, reimagining animation in its own unique style 30 years ago. So the way Jack and I see it,

with AI, we seem to just be creating multiple versions of someone else's creativity. That's why we think this is the time for an important distinction. As the cost of creating goes down, the value of creativity goes. up. For our second story, SoulCycle, the Spin Studio, is planning to launch a chain of fashion apparel stores. SoulCycle is going after Lulu Lemon. Yeah. And it's all because of the hard rock cafe. Okay, three brands you didn't expect to hear, but we'll explain. But first, Nick,

where were you 10 years ago? Jack, I was taking Aiken Ackman's 5am booty burner ride over at the Soul Cycle and Tribeca, baby. What do they call it, Atkins Army? Yeah, that's what we call it. That's what we call it, Jack. Yeti's Soul Cycle, the Spin Studio founded in 2005, or as they call it, a cardio party. I agree. I've only taken one class. I love synchronizing the music to the cycling. Which is something Peloton doesn't do.

Also, you were particularly good at that you were, Jack. This basically is the company that started the boutique fitness trend as we know it. And the boutique fitness trend wasn't just a workout. It became spiritual for millennials. It was therapeutic. Instead of going to a church, a mosque, a synagogue, you were worshipping at the altar of your soul cycle instructor. Or at least many urban millennials were. Which is why, in 2015, when we were in the East Village, SoulCycle filed to IPO with the ticker symbol, S-O-U-L-Sole.

Back then, they had $100 million in annual revenue. They had 300,000 monthly riders. They were profitable. They were going to be the first pure profit spinning stock. It was pretty exciting. But then, Jack, what happened? Because I don't think that they went public, did they, man? They delayed the IPO.

Then the pandemic happened, crushing attendance at their physical studios. And then Pelton, with their at-home fitness stuff, almost put SoulCycle out of business. Didn't see that coming. But besties now, SoulCycle is quoting Elton John, man. I'm still standing better than I ever did. Because today, SoulCycle is majority owned by Equinox gyms. That's why SoulCycles are all located right next to Equinox. Full disclosure, I go to the one on Union Street.

And Jack, I'm the guy in the back right next to the fan. with the ear plugs in. That's who I am these days. What? You don't listen to the music? It's a story for another pod. Too loud for you? Wow. Yet he's what Jack and I found fascinating about this story. SoulCycle aims to launch stand-alone clothing stores. SoulCycle thinks their brand is strong enough to take on Lulu Lemon.

Okay, we repeat. A workout studio is launching apparel locations without the workout studio. Just the apparel. And we get the strategy. It's cheaper to run a store than it is to run a fitness studio. There's a lot of sweat to mop up on those post-spin-class rooms. And to reach a wider audience, they're pulling a Facebook. They are. They're dropping the the the the the apparel. Uh-huh. They're cutting the word cycle out of the apparel, so it'll just say soul on the butt of those leggings. So SoulCycle is the fitness business. Soul is the apparel fashion store won't just feature SoulCycle branded products, Willa Jack. This is interesting. They're going to hold a range of different athleisure brands in their stores. Yeah, they're going to

have Allo, Bandier, Viori. The first athletic store we could find carrying more than just one athleisure brand. But we got curious. So we went back to the IPO paperwork from the IPO that didn't happen 10 years ago. That's right. And we discovered in that S1 paperwork that apparel was always a huge potential focus for SoulCycle. SoulCycle used the word spin just nine times, but they used the word apparel 17 times in that IPO paperwork. Because one out of ten of their riders end up buying the apparel. Here's what SoulCycle said back

then. Apparel gives us a larger share of rider spend and considerable opportunity to expand it. Well, 10 years later, they're capitalizing on it. So, Jack, could you please tap that booty back, turn to the left, turn to the right, grab the weights next to you, and tell us the takeaway for our buddies over at Solcycle. DeMargins in DeMarch. DeMarches, the margins in DeMurch. Yeties, a company spinning off its smaller apparel line into its very own business? That's actually not crazy. In fact, that's what the Hard Rock Cafe did. Remember the Hard Rock Cafe? Yeah, in the 90s, that's what they did, man.

You've probably not dined at a Hard Rock Cafe since you were in Orlando. But they did have 300 restaurants at their peak. You may not have dined there, but we bet you've seen one of their Hard Rock Cafe T-shirts sometime recently. Because get this. In the 90s, Hard Rock Cafe opened merch shops even when there wasn't a restaurant there. Because just like SoulCycle mentioned 10 years ago, merch was their best profit opportunity. So SoulCycle is falling in the footsteps of the Hard Rock Cafe.

SoulCycle says their profit margins on spitting are about 30%. But we bet their profit margins on $100 leggings are way higher. So SoulCycle is launching a fashion chain because DeMurch is where DeMarch is. Now a quick word from our sponsor. For our third and final story, CoreWeave is the biggest tech IPO in four years. The first IPO of any artificial intelligence company, everyone's excited.

But CoreWeave was as big a bust on Wall Street as Snow White was in theaters. Yeti's New Jersey-based Corweave, they just took the Lincoln Tunnel, paid a $50 toll probably, into Manhattan, and last week did their IPO. The Corweave IPO was the biggest tech IPO since 2021. Yeah. And the first pure play AI company to go public on the stock market. Thrilling, exciting. Even Sam Altman was freaking out. Investors, they were so excited to cash in and all the AI hype right now.

And the executives had probably already bought a second home in the Hamptons. Yeah. Expecting a bonanza of an IPO. Put the second home on my third yacht. But the results, it wasn't a bonanza. The IPO was a huge disappointment. Now, Besties, before we dive in T-boy style and hit the numbers, we should explain what exactly is CoreWeave.

CoreWeave rents compute out to tech companies that don't have enough. 2024 was the year that compute went from being a verb to a noun. Compute as a noun is the number of Nvidia processors you have. Like when a tech company offers AI to customers, it needs compute. AI runs on compute. So when tech companies don't have enough compute, they rent GPUs temporarily. from Corweave. Yeah, they're renting computer chips from Corweeve.

Corweeve is basically like the enterprise chip rental of the AI industry. Get this. Nearly two-thirds of its revenue last year came from just one company. Microsoft. Oh, and Jack, I got a bigger issue for you here. You ready?

CoreWeave took off in 2023 when there was a huge shortage of AI chip. So like everyone needed CoreWeave. But that shortage has gone away. So the price that Corweave can charge for rent, for their compute, it's down by 70% since 2023. Besties add all that up and it led to a disappointing IPO

on what was supposed to be such a huge fun IPO. Corave and their bankers were hoping to sell shares in the company on the NASDAQ stock exchange between $47 and $55 a share. But what did they actually end up selling that, Jack? Investors would only pay $40 a share. Yeah. Oh, and by the way, those investors bought 25% fewer shares than Corweave was hoping for. The result? Corweave expected a 35,000,

billion dollar valuation for the company, but Wall Street said you're only worth $23 billion. Corweaves IPO and got worse reviews than Disney's Snow White. And Corweave didn't have to deal with an evil witch. I think Sam Holman's the evil witch, actually. Actually, I think Sam's one of the seven dwarves, Jack. But with all the hype around AI, we got to ask, why did the first true AI company have such a bad IPO? The reason is our takeaway.

And we didn't use Chachy-B-T to write in. No, we didn't. So, Jack, what's the takeaway for all our buddies, curious about initial public offerings. There are three keys to a successful IPO. The market, the industry, and the company. Yeah, we call that our IPO trio. And for Corweave, unfortunately, all three of those variables are negative right now.

The first variable was the market. Stocks are down 10% from their all-time highs on concerns with the Trump economy. The second variable is the industry. Other AI stocks happen to be the biggest downers in the market right now. InVIDIA, we're not 26% from their all-time high. Which brings us to the third variable, the company itself. Yeah, and Corweave, the company is not a star of AI. Because Corweave depends so much on that one customer.

Their prices have fallen by so much, and it's unprofitable. So besties, remember, for an IPO to be successful, you'll want to have a strong market, a strong industry, and a strong company. Correwee's IPO was so bad because it didn't have any of those three. Jack, could you whip up the takeaways for us to kick off the week? Open AI is letting anyone create pro-looking cartoons in their favorite styles instantly. The cost of creating is dropping, which means the value of creativity is rising. For our second story, Soul cycle is expanding to apparel stores branded simply Sol.

They're dropping the site. Because the merch is where the margin is. And our third and final story. CoreWeve went through the AI industry's first ever. IPO and it was a dud. Because Corweave lacked the three keys to a successful IPO, the market, the industry, and the company. But Yetis, this pod's not over yet. Here's what else you need to know today. First, business school applications surged in the last year, 19%. And you don't need an MBA to do that math. The biggest jump was for part-time programs. Yeah. Not the full two-year programs. In this

economy, you don't want to give up your paying job for a degree. Side note, we did a whole story last month on law school applications, which also rose by a big jump. So I assume JDMBAs are also an all-time hijack. And second, Trevor Milton, the founder and former CEO of Nicola, the electric car company, was pardoned by President Trump. Trevor Milton was convicted of securities fraud for lying to investors. Yeah, you may remember the smoking gun. It was kind of funny. It was a promotional video of one of his trucks just like rolling down a hill using gravity, not self-driving, right, Jack? He made it seem like it was driving, but it was just gravity that worked, not his cars. President Trump claims that Milton was the victim of political prosecution, and that's why he says he

pardoned him. And finally, are you curious why there have been so few upsets in the March Madness Basketball Tournament? Well, the answer is transfer students. Here's what's happening. If a Cinderella team makes a good run, like FAU did a couple years ago, all those players transfer the following year to one of the much bigger programs. Because college athletes can now make some money when they're playing on the big teams and they get more attention. The result is that there's less talent at the small schools. All the talent goes to the big programs.

Fewer upsets, less madness. Now time for the best fact yet. This one whipped up by Javier Molina, who left it as a Spotify comment in our last episode. Last week, we did a story on Sesame Street. Well, it turns out there's international versions of Sesame Street, hosted by Big Bird's cousins. They're eight of them total, and Big Bird has cousins with different names. We're, like, doing all these shows. For example, Pino is the host of Sesame Stratt over in the Netherlands. Or Albarado Montoya is the host of Plaza Sesameo in Mexico. Or Garibaldo is the host of Villa Sesameo in Brazil.

And, of course, you have Shao May Z on the Giamoa's G show, which is Sesame Street in China. Pretty sure Elmo is just called Elmo across all the languages, though. Oh, no. Speaks every language, Jack. Yiddies, you look fantastic today, especially you, man. Although we do have to decide on the outfits. We do have to decide on the outfits for the show. Dude, it's not black tie. Are you worried about the bow tie?

Because I will tie the bow tie, man. I'll tie it for you. I am worried about the bow tie. Yetties, if you've got your own takeaways on today's show, drop them in the comments on YouTube or Spotify. We love to read them and we'll respond to him. And Nick and I will see you tomorrow. I'll see in Chicago, Jack.

Can't wait. And before we go, The end of Ramadan was last night. So to our Yeti celebrating, we hope you had a fantastic final fast. And a wonderful final feast. Ed Mubarak. And a happy birthday to Yeti Nathan Diograsius turning 23 years old down in Birmingham, Alabama.

Happy birthday to E.T. Agniotri, in Naperville, Illinois. A wonderful wife and the best mother. And Emily and Rebecca both turning 23 years old down in lovely Orlando, Florida. Happy first birthday to Milo Maki in Maki in Meeleau. Maple Grove, Minnesota. There you go, buddy. And Mark Andrard in Paris is a hotel extraordinaire who says it is possible for a birthday. And a big shout-out to Dr. Jason Linder.

I owe you a finger point for here's what else you need to know today. There you go. And Suzette de Los Santos in San Rafael, California, just got a huge promotion that we are going to celebrate. And a big shout out to Jacietta da Olivier in Chicago, Illinois. who's celebrating their first 100 days on the job at Johnny Walker. And a wonderful congrats to Jing Xu and Frank Piyang over in Sunnyvale, California, celebrating a 16th anniversary. Congratulations, guys.

This is Jack. Nick owned stock of Lulu Lemon, and we both own stock in Peloton.