The Best One Yet - 😱 Stocks’ Titanic Day — Recession fears explained. Friend’s AI Tamagotchi necklace. Shake Shack’s vibe win.

Episode Date: August 5, 2024

Friend launched an AI necklace that becomes your friend… But we think it’s AI Tamagotchi.One food chain is dominating right now: Shake Shack… because perception beats prices.Stock markets worldwide just plummeted… so we’ll tell you what’s wrong.Plus, swiping in Paris is the new sport…Match saw a 20% jump in app activity across France.$SHAK $MCD $SPYSubscribe to our Saturday Newsletter: tboypod.com/newsletter  Watch us on YouTube Submit Facts & Shoutouts Instagram, TikTok, LinkedIn (Nick) & LinkedIn (Jack)About Us: From the creators of Robinhood Snacks Daily, The Best One Yet (TBOY) is the daily pop-biz news show making today’s top stories your business. 20 minutes on the 3 business, economics, and finance stories you need, with fresh takes you can pretend you came up with — Pairs perfectly with your morning oatmeal ritual. Hosted by Jack Crivici-Kramer & Nick Martell. Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. Welcome back. It is Monday, August 5th. And today's pod is the best one yet. This app, this is a T-Boy. The top three pop business news stories you need to know today. Jack, I am checking the calendars here. And this is our last week before vacation, man, isn't it? Big week. Yep. Starting next week, Nick and I are taking two weeks off. It's a T-boy annual summer vacation tradition. Jack, where are you going again? I always seem to forget. Nick, everyone knows where I'm going. Where are you going? Jack, I thought you would never ask, but I kind of like not telling you. It's a little bit. I'm going in your general vicinity. I'm going in your general vicinity. You ready? How about you give the Yetis a hint where you're going? And they can guess with a comment.

The place where I'm going, it has your favorite sauce. All right. How about every day this week? You give us another hint where you're going. Our favorite sauce. Three stories for today's show, Jack. What do we got on the pod, man? For our first story, a startup called Friend, just created an AI necklace that becomes your friend.

Your friend. It's Tomogachi 2.0 and we'll tell you all about this freaking new thing. For our second story, while all the other fast food chains are struggling right now, one is rising. And who is that? Shake shack. Shake shack. The $10 shack burger is proof that perception over powers prices. And our third and final story. Last week, stock markets all over the world had one of the worst weeks in years. So Jack and I will tell you what's up with everything going down. But before we hit that wonderful mix of stories, Yetis, fantastic mix of stories for our last week before vacay, man. The hottest hookup scene on earth is happening right now in Paris.

In Paris, because the top competition in the Olympics really is dating. Swiping in Paris is the new sport nobody's talking about. And we got the data to prove it. Jack, let's go to the judges. Bumble confirmed this month a notable change in user activity since the Olympics began. Match saw a 20% jump in activity across France since the Olympics began. Why? Because worldwide people are Tinder bombing. Tinder bombing, Jack.

It sounds like we got a new definition. Can you whip it up for us, please? Tinder bombing. It's when you pretend to be somewhere you're not because you know there are hot people there. What my co-host Jack is saying here is that people are using passport mode in their dating apps to set their location to Paris. And then they're setting a really tight radius just around the Olympic Village.

where all the athletes are. Get this. Passport mode on those dating apps has seen the number of swipers double since those Olympics began. And it makes a lot of sense. After all, the world's fittest humans in the world are all gathered in the same zip code right now. I mean, Jack, there is nothing hotter than a world record of Schwitzen over here. But Yeties, before you upgrade to Tinder premium to check out who's there, we should warn you. You always want to fact check your potential date, and why is that, Jack? Because there's been a 52% rise in dating profiles with the word Olympian.

But Jack and I did the math, and we don't think there are 52% more Olympians in the city of Paris. So if he says he's a high jumper, make him jump and measure how hot. She says she's a swimmer. Prove it in the pool. If their profile picture is of them fencing, demand they take off their fencing mask and see who's under there. Unmask yourself, or else the dates off, baby. Now, ironically, athletes in Paris are actually getting. off Tinder because of these Tinder bombers. It's flooded with like fake people who aren't actually

there. But either way, the Olympic Village is now the new Moulon Rouge. Nothing leads to engagement ring quite like a medal bus. Brons! It's so hot right now. Jack, let's hit our three stories. 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 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. A startup called Friend just launched an AI friend that you wear around your neck. And it's now your friend. The best thing about friend?

Yes, Jack? It doesn't have any enemies. Now that's a friend. Yet is Jack and I jumped in T-boy style and we noticed this trailer for a new product that caught our attention over the weekend. In the trailer, a person finishes up a morning hike and then says to herself at the top of the mountain, oh, I'm so out of breath. But then that young woman gets a text that says, but we made it. How does that sunrise look, Mary? That text didn't come from a friend. No. It came from friend. Friend because Friend is a startup that makes an eavesdropping. necklace that you wear around your neck and interact with all day. The pendant on your neck has a

microphone in it that you can talk to. Yes. But it's also got AI in it that will text you back responses. What we are talking about is a $99, artificially intelligent wearable buddy. This little thing will know that you have an interview today and I'll text you. Good luck on your job interview today. Yeah. Just like a friend might. Actually, our buddy Timmy would forget to text us that, Jack. So this AI necklace would remember. It's actually, actually impresses it's better of it a friend. Now, according to the founder, you talk to it about what you're doing, what you're thinking, whatever you want, and it responds. Yes, that is the entire product. It is basically a chatbot as a choker. But yet he's Jack and I know what you're thinking. Uh,

doesn't this product sound exactly like the movie her? Yeah. It's not a feminine voice. It's just texting, so maybe it's a they situation. But the way Jack and I like to think about friend is that it's like an AI Tomaguchi. It's a separate product that you're interacting with all day. Remember Tomogachi? Yeah. It was your friend. You had to take care of it. It had fun with you. You had fun with it. It's the same thing with friend. It's a two-way relationship with commentary. The only difference between friend and Tomogachi is you're not going to forget to give it vitamins every day. Friend is on sale now for 99 bucks. There's no subscription after that. And they hope to have them arrive by the wintertime. But this was the shockingly part about friend. Founder Avi Schiffman,

who's too young to know what a Tomicotchi is, raised $2.5 million to launch Friend, and what exactly did he spend it on Jack? He spent nearly all of that initial fundraise just to buy the website, friend.com. We repeat, go to www.com. One of the most valuable names of any domain ever, and he acquired it for this product. I can't believe Mark Zuckerberg didn't snag friend.com. How did that get missed? So the founder of Friend says that buying Friend.com for $1.8 million was a one-off marketing expense. He says having friend.com is really valuable because it will market the company and save it like, save it on advertising dollars, basically.

Plus, he thinks this startup will eventually be a social media site, not just a physical pendant you talk to as it hangs around your neck. But Nick, what about the rest of the two and a half million? The part that he didn't spend buying friend.com's website domain. Well, Jack, remember we mentioned we watched that movie trailer version of what this product is? He spent the rest of the fundraise on that film. He basically created a mini movie for the product to launch it. It's pretty wild.

This guy's fundraise, he didn't spend any of it on the product. He spent all of it on the marketing of the product. Honestly, the founder is in his early 20s, and it's pretty impressive what he pulled off. Did you see that quote he said about what he would do next? He said, look at what I did with $2.5 million. Imagine what I can do with $100 million. Well, in the meantime, friend is one freaky device you could. talk to all day, and it went viral all weekend in the tech community. So Jack, what's the takeaway

for our buddies over at Friend? Friend's biggest chance of success is that it has no enemies. Yides, Jack and I have noticed that all the AI we see right now is about one thing, productivity. AI is there to help you do more work faster. Chad Chip-T, Microsoft's co-pilot, Humane, Google's Gemini. They're all about efficiency, optimizing, and productivity. Big Tech is obsessed with AI assistance. They're basically in a race to create Jarvis, Iron Man's AI to help you be more productive. Just like Iron Man. But Friend is actually taking the opposite approach because Friend is not about productivity at all. Friend is about the opposite. It's just about having a friend who's there to talk to you. Friend is about companionship.

After all, 10% of Americans report having no close friend. 30% say they're lonely and we are experiencing a shortage of friends. Friend is. avoiding the punching match with billion-dollar tech companies in the race for productivity-based AI. Because Friends not focused on productivity, it's focused on companionship. It's not focused on productivity. Frankly, it's focused on procrastination. You just hang out with this friend all day, Jack. And that may be Friends' biggest chance of success. It has no enemies. For our second story. The surprise top stock of last week, get this, it's ShakeShack. Shake Shack shows that value doesn't mean low price. Value means it's worth it. Oh, Jack, I feel like we got to

check ourselves on this. We've been calling this hot deal summer. And we've been saying that this summer had big deal energy, haven't we, man? Why are we saying that? Because in the last two months, every fast food chain has launched the same value meal. Wendy's Burger King McDonald's, all of them specifically launched $5 value meals, five bucks each. McDonald's ordered a burger, fries, and a soda for five bucks. And Wendy's and Burger King were like, Me too. Even Keenan and Kell over a good burger launched a $5 value value.

I love a good burger reference. Home of the Good Burger. Can I take your order? Everything's 20% off. So why is every fast food chain launching a value meal this summer? Well, Americans have turned against fast food because of the higher prices. The burgers, that doesn't feel like your class of quarter pounder these days, does check?

No. Feels like quarter of my paycheck. So despite all the value. meals. McDonald's just announced last week their first quarterly sales shrinkage since 2020. We repeat McDonald's sales are down. You're not buying a Big Mac unless it's on the sale rack. Fast food is looking like T.J. Max right now. But yet here's what Jack and I found fascinating about this story. Um, there is one shocking exception to everything that Jack and I just said. Shake shack. Shake shack. That's the exception. The fast food chain that began the better burger movement.

By the way, Jack, we should point out that you and I, like, used to celebrate the wins at the original Shake Shack in Madison Square Park. That's where we would go. And I know that that's where you had your first date with Molly. Yeah, it really is. I mean, you feel like the center of the world when you're in that Shake Shack, although you're always fighting for a chair, you know? The Edison Lightbulbs are a wonderful upgrade. Well, yeah, it is whether or not you have been to the original Shake Shack. Shake Shack's earnings just dominated in a way no other food chain is doing. Revenues rose by 16%. Profits doubled, and they had their highest profit margin in four years. Stick that in your Schroomberger. Oh, in the top sellers last quarter? What were they, Jack? Seasonal burgers, like the Carolina barbecue burger with fried pickles, which is on the menu right now.

But Bessies, this was the shocking thing. The Shake Shack CEO said something on the earnings call that made investors drool. He said they're not dropping prices. We repeat not dropping prices, despite peer pressure. for Ronald and Wendy, ShakeShack will not put its burgers on sale. The CEO said that pricing is not a way to drive sales. It's the kind of thing that would make grimace grimace. No other food chain is doing that. It's a bold and confident thing to say right now. So Shake Shack's stock surged by 20% last week.

Shake Shack was up 20% like there was caffeine in the custard. So Nick and I got to ask, how is Shake Shack attracting more customers when every other burger chain is attracting less customers right now? On top of that, ShakeShack has the most expensive burgers in the industry. You'd think that they're suffering the worst with people being fed up with high prices. So, Jack and I came up with this takeaway. Jack. Can we please get one takeaway side of fries extra ketchup for our buddies over at ShakeShack?

Value doesn't mean cheaper. Value means it's worth it. Interesting thing, Yeties. Shake Shack stock is up 30% this year. Chipotle is up 20% this year. And sweet green is up 140% this year. And yet McDonald's, Wendy's, and Burger Kingstock are all down this year. Well, the reason we think why is perception.

Because value doesn't mean cheaper. Value means worth it. A sweet green salad, a Chipotle burrito, and a shake-jack burger are more expensive, but they're perceived as better value. Chipotle burrito feels like a high-end cuisine, but it's lower priced than a high-end restaurant. So that is value. On the other hand, Wendy's $5 value meal is cheaper, but it's perceived as less value right now. Because a Wendy's burger feels low end, it's compared to a frozen pizza.

And it's actually more expensive than a frozen pizza. So it's less value. See, someone thinking about a nice dinner, they consider Shake Shack a better value than the sit-down restaurant. But someone thinking about a cheap dinner considers McDonald's a worse value than a frozen pizza. Add it all up, yeties, and value and price are just two different things, even though we often and conflate the two. And perception over powers price. Now a quick word from our sponsor. For our third and final story, across the world, stock markets just finished their worst week in years. And the reason investors are freaking out is the Titanic. You know, Yiddies,

we'll just cut right too because it ain't pretty awkward update for your portfolio. Jackie, wake up the numbers, please? The NASDAQ stock index fell into correction territory on Friday. Which means it's down 10% from its recent high. Jack and I told you last week that investors are worried about the huge investments in AI that they may not pay off. It didn't help that on Friday, one famous hedge fund called AI a bubble saying it was overhyped. But then Jack and I were talking over the weekend and we're like, um, but wait, markets worldwide plummeted on Friday. So there's got to be something else going on here, right, Jack? We found three things that help explain the stock market dive of last week.

Which are unrelated to AI, and here they are. First, Japan's stock market fell 9% on Thursday and Friday. It's the biggest two-day drop for Japan since that huge tsunami happened in 2011. What's going on in Japan? Well, their central bank is increasing rates, which will likely slow down their economy. The second thing that happened last week was Intel stock fell 28% on Friday. That's the worst day for Intel in 50 years. And the reason for that is that the once iconic chip company, Intel, is cutting 15,000 jobs

because their business ain't doing well. But the biggest issue overall, Yetis, was in the United States because recession alarms just went off. The worst recession alarms yet here in the United States. Because on Friday, we got the big monthly jobs report that showed a serious jump in America's unemployment rate. So far this year, the unemployment rate has increased from 3.7% back in January to 4.3% today.

I know what you're thinking, Bessie's, a 0.6% interest. increase in the unemployment rate, that doesn't sound like a lot exactly. But if you apply it to a whole economy, that means a million additional people are unemployed. Now, you know that we've said that 4.3% unemployment, that is still historically low. But an increase that fast in that little bit of time, that's an increase that doesn't usually stop. That ends up being momentum. And it doesn't stop because our economy is kind of like the Titanic. If unemployment's rising fast, you can't just tap the brakes. Like the Titanic, it takes a while to slow down.

It's a giant ship, not a go-cart. Just ask Kate and Leo. So, Jack, what's the takeaway for our buddies over in the U.S. economy? The Fed drives this ship, but the ship takes forever to turn. Now, yet is for three years, the Federal Reserve, our central bank, has steered our economy with high interest rates. That has been the direction. The goal was to steer us away from hot inflation, to slow the economy down, to get prices down. know what? That worked. Inflation has been slayed, but now our economic ship has turned to a new

issue. Unemployment. And it worked. Inflation has been slayed. It was great that the Fed turned the ship in that direction. But now our economic ship is headed towards a new issue. Unemployment and a potential recession. So now the Fed has to try to avoid that and turn the ship in a new direction by cutting interest rates at their next policy meeting. So here's the underlying problem. Our economy is like a huge ship. It takes months or years to turn it into a different direction. It's like trying to boost the economy at the next policy

meeting in September? That could just be too late. It would be too long. The new iceberg facing the American economy isn't inflation, like the last few years. It's a recession and high unemployment. So hopefully the Fed, the captain of our economic ship, can turn this ship

on time. Jack, could you whip up the takeaways for us to kick off the week? Friend is basically Tomagachi 2.0. It's not focused on productivity, it's focused on companionship. And that may be its biggest chance of success against big tech, because friend has no AI enemies. For our second story, it's ShakeShack. Their expensive burgers are winning. Their low-priced burger competition is losing. Because value doesn't mean low price, value means it's worth it. And our third and final story is the stock market. Stock sank across the globe last week,

mainly because of rising unemployment in the United States. Turning our economy away from the iceberg, that is a recession. That could be slow and tough. But Yeties, this pod's not over yet. Here's what else you need to know today. First, Bill Ackman, the hedge funder, better known as an outspoken Twitter personality, failed to IPO his company last week. He wanted his hedge fund to become publicly traded,

and he thought retail investors would want in on his stock picking. So Bill Ackman planned to raise $25 billion in an IPO, but nobody wanted to buy. So he canceled the entire thing at the end of the week. IPO? IP no. For Bill. And second, remember that big court case against the NFL's Sunday ticket that we told you about? Well, it just got overturned.

A judge just overruled the jury's decision, saying basically that the jury screwed up. What does this mean? Well, the NFL will not pay $4.7 billion. because the NFL is not going to get punished. Yeah, the guilty verdict got thrown out. And NFL Sunday ticket holders like you, us, and our buddy Timmy, we're not going to get a payout from the league. At least not for now.

Brady. And finally, Coles has a new turnaround plan, and it's all about babies are us. Babies are us. Remember that? The toys are a spin-off, all about diapers and baby stuff. But here's the surprise. Although millennials are having fewer babies, millennials spend more on babies.

And that is why they're betting on babies. are us. I feel like it's the same thing with dogs. Like, we have fewer dogs, but when we have a dog, we spend outrageous amounts of money on them. Jack, how many subscriptions do we have for our kids going right now? Because it's more than I have for myself. I'll tell you that. Same. Yeah, same. I think my dog's food is fresher than my food. Snoo, make it too. Now, time for the best fact yet. This one's sent in by Pepe Lepey-Pue, who wanted to talk about what the French kiss actually means. The French kiss is actually known as the soul kiss. Because if done right, it feels as if two souls are merging.

The term French kiss actually came into the English language at 1923. And a French kiss involves all 34 muscles in the face, whereas a quick pucker kiss involves only two muscles. Basically what we're saying is that the passionate French kiss can burn up to five calories in just a few seconds, or 150 calories if you're lucky enough to be kissing for a full minute check. That's not a French kiss. That's a French smooch at that point, I think. So if your buddy brags about his marathon makeout session, it really kind of is a marathon. French kissing. Calgary-wise.

It's like a summer Olympic sport. And then tonsill hockey, I think, is a winter Olympic sport. Either way, go for the goal. Yeah, it is. You look fantastic today. And remember, if you see a real buddy, not an AI buddy, tell them H-Y-H-T-B-O-Y. Have you had the best one yet? And if you've got the best fact yet on the Olympics, this is the last week to do it.

So send it to us with the last week to do it. So send it to us with the link in today's episode description. We would love to get your fact on the pod. If you know, you know, Jack and I, we'll see tomorrow. And before we go, a happy ninth birthday to Yeti Alexandria Alar Khan in Whittier, California, who's having a fantastic celebration. Happy birthday to Jeff Rodriguez in Baltimore, Maryland. And congratulations to Michael Rikowsky, who's got a new job in San Diego, California,

enjoying the sun. And congratulations to Cliff Anderson in Jakarta, Indonesia, who's become a a certified Rizzler. A legendary official Rizzler. And to anyone else who's celebrating something today, make it a T-Boy. Celebrate the wins. This is Jack. I sadly own Intel stock and Nick own stock of ShakeShack,

and we both own ETFs at the S&P 500. It's a little looser though. I know a chunker's a type of necklace, but that kind of just triggered me. We'll have to round up on that one, Jack.