The Best One Yet - 🚾 “The #1 restroom'' — Wawa’s convenience store secret. ChatGPT’s AI Spielberg. Capital One’s Discover acquisition.

Episode Date: February 21, 2024

Capital One is acquiring Discover Card for $35B, the biggest acquisition of the year — Because credit cards are still a fashion accessory.Wawa, the Philadelphia-based convenience store, is expanding nationwide — But Wawa’s secret to success isn’t the hoagies, it’s the bathrooms.And OpenAI launched Sora, their text-to-video AI product that creates Hollywood-style video in seconds — But like nuclear power, Sora can be good or bad. $COF $DFSSubscribe to our newsletter: tboypod.com/newsletterWant merch, a shoutout, or got TheBestFactYet? Go to: www.tboypod.comFollow The Best One Yet on Instagram, Twitter, and Tiktok: @tboypodAnd now watch us on Youtube Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. It's Wednesday, Saviche Wednesday, February 21st. And today's pod is the best one yet. It is a T-boy, Jack. The top three pop business news stories you need to know today. Looking fantastic. I can't wait to see you next week, man.

Can you tell me about your ski weekend? I went to three Yetis at the airport on the way to Park City. Okay, here's where we go. First Yeti, amazing, forest, really nice guy. Second Yeti, Sarah, exactly. You want listening to the show. What about the third Yetty? The third Yetty was getting on the airplane.

She was walking down the aisle. He goes, I listen to this show every day. I was like, thank you. And then people just kept pushing her out of the way. It was a shame. She's a legend. The besties are the best. But Jack, three stories for today's show.

What do we got, man? For our first story, we just got the biggest deal so far of 2024. Capital One is acquiring Discover card for $35 billion. Because your credit card is still a fashion accessory. For our second story, it's Wawa. The cult classic Philadelphia convenience store is expanding nationwide. The secret to Hawaii. The Wawa's success, they got the best bathrooms in town.

And our third and final story is Open AI. They finally released what we all knew was coming. ChatGIPT, but for videos. Yetis, this is AI Steven Spielberg. But Yeties, before we hit that wonderful mix of stories today. Fantastic mix of stories, Jack. Starbucks has done it again. Last year, Starbucks launched a new flavor called Olietto.

Olietto. This was a coffee made with, Olive oil sold by Starbucks. Did I mispronounce Olietto? Absolutely totally mispronounce it. But I like the attempt. Great effort, Jack. Nick's the Italian major on this pod.

But Yetis, you can go to a local Starbucks today, anywhere in the U.S., and get an extra virgin olive oil latte. But yetes, this is why Jack and I want to talk to you about this. Yesterday, Starbucks went even bolder. The new Starbucks extreme coffee flavor is pork. That's right. The new Starbucks flavor is pig, big. They're calling it the brazed pork latte.

Yeah, yadies, it's a cappuccino with a pork chop. It's a latte with a dash of pork line. Jack, would you like almond milk or old milk? I don't know, man. I'll take either. No, you're getting pork milk, baby. Now, this is a real drink, and here's what it actually is. It's a 12-ounce espresso-based coffee with steamed milk and a drizzle of red pork sauce. But the highlight is the garnish on top, which is a two-inch slice of pork breast pork.

Now, we're all asking, why are Starbucks baristas brewing beans with some bacon? We all want to know what is going on over at Starbucks that they're whipping up pork into the coffees. It's actually an ode to the Lunar New Year celebrations. Starbucks is only selling this pork-based coffee in China right now. And the name of the official drink is the abundant ear savory latte. That's what they're calling it. Because in China, you celebrate the new year with some delicious pork dinners. But if you're thinking about going to China to try this out, we should warn you about something.

If you're popping over to Shanghai to get this drink, you may want to bring the checkbook. Because this Starbucks pork latte, it costs $10. Pretty expensive. 10 bucks for a pork-based coffee? Excuse me? Now, in fairness, it is both a beverage and an entree. So, 10 bucks is actually a bargain. But that is one heck of a double-digit latte, Jack.

That's one I would pay for, actually. Hold the soy milk, extra barbecue sauce. Jack, let's hit our three stores. That is just appalling. Fifteen years before this song, 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 an norm you need to practice 50% that's a fat tip tea boy city on your at list if you know you know because we're ready to go we can't wait no more so just start the show start the show

for our first story the biggest merger of 2024 is capital one and discover card what's in your wallet for capital one it's now the discover card Yet he's Jack and I were looking at the basketball court yesterday, and we noticed the two smallest players on two different teams have stood up on top of each other. We're looking at the NBA, the National Banking Association. That's exactly what we're going for. Now, the smallest national player in banking, like Nationwide Bank,

the smallest one is Capital One. Capital One, the preferred bank of Samuel L. Jackson, although it is a fraction of the size of the big four banks. Capital One is a fraction as big as JP Morgan, Bank of America, Wells Fargan. on Citibank. So Capital One is one small player here. The other small player is DiscoverCard. Discover Card is the smallest national player when it comes to credit card networks. Because Discover is smaller than Visa and MasterCard and American Express. It's actually a fraction as big as those big national credit card networks. But Yeties, here's the news. Little Capital One and little Discover card

are teaming up for one big price. Capital One is acquiring Discover for $35 billion in the big acquisition of the year so far. Now, Jack, can you sprinkle on some context here when it comes to these two small guys and their new big size? If you stack them on top of each other, they're bigger than everyone else. Can you get more specific for us, please? If you add up the number of Discover cards with the number of Capital One cards, combined, this is the biggest credit card issuer in the country.

It's like if two four-foot-tall basketball players walked on the court, and together, they're eight feet tall. It's like two mugsy-bogsies are bigger than one Dekeme-Matombo. Is that what we're going for? I was going to say Yao Ming, but yes. Now, Yetis, we know you're thinking we were thinking it, too. Why is Capital One spurching $35 billion for the biggest deal of the year? Because they call this deal the Holy Grail.

Yeties, the Holy Grail is the credit card industry's term for the credit card network. Because whoever controls the credit card network, that's who makes money every time someone swipes a card. Discover card isn't just a credit card. Discover card is also a network. And the fact that it's a network means it has its own currency in this economy. Yeah, just like merchants, the stores you go to, they accept cash. Well, millions of merchants also accept any card that has a Discover logo. Now, by controlling both the credit of a credit card and the network of a credit card,

Capital One expects to add 25 billion cardholders and make more money off those cardholders. We should point out that any huge merger on this scale needs government approval. The government doesn't want a credit card monopoly coming out of this. But Capital One thinks that this deal is actually going to do the opposite. They think this deal is going to increase competition with credit cards. With Capital One Plus Discover in the market, JPMorgan Visa MasterCard, they're going to have to work harder to win our business now. Jamie, we're going to need to see some more perks.

So, Jack, what's the takeaway for all our buddies over in the credit card industry? Even in this digital payments era, your credit card is still a fashion accessory. All right, Jack, remember when our buddy Timmy was both, hosting when he got his first MX platinum card. He went out of his way to visit the airport lounge because he had that car and he could visit the airport lounge. He would call us and say, come to JFK. I'm at the lounge.

You're going to love it. The champagne's free. For our buddy Timmy, the $550 annual fee was more than made up for with free mimosas and that fancy lounge Wi-Fi. Well, a Capital One card, it says something different. A Capital One card says you're probably just beginning your credit journey. Capital One focuses on lower credit customers. So the perks aren't luxury travel because you probably wouldn't use them.

The perks are cash rewards. But Capital One is now trying to go up the income ladder. They're trying to reach higher credit customers like Amex users who spend more money and they think they can make more money on. But since Credit Card is a fashion accessory, Capital One can't just go after those high-end customers with their old Capital One brand. So they're becoming the one credit card with their own credit card network two by buy and discover.

Even in this age of digital payments, credit card brands are still. still a status symbol. Credit cards still act like a fashion accessory. For our second story, Wawa, the Philadelphia convenience store with a cult following, is expanding south and west in a big way. Because Wawa has mastered the cup holder effect. Yeti's Harry Stiles said this was his favorite thing in Pennsylvania. The actress Kate Winslet described it as mythical. We are talking of course, Yiddies, about Wawa. Wawa, the unofficial convenience store of the mid-Atlantic region. They got a market.

They got a deli. They got a gas station. Yiddis. Wawa is like if Trader Joe and 7-Eleven had a baby and then raised it over in Philadelphia. Fly Eagles fly. It's got a cult following like In-N-Out burger does. But instead of selling burgers, they're selling hoagies and pizzas and hot dogs, a lot of good stuff. It's the gas station you don't hate visiting, right?

When I was in business school, once a week, we stopped by a Wawa. If you're driving on 995 between D.C. and Philly. If you're visiting the Jersey Shore over the weekend. If you partied at Preakness, you probably stopped by a Wawa at some point. And yet, is that Wawa isn't just a little convenience store? Jack, could you sprinkle on some numerical context for us, please? They make an estimated $19 billion a year in revenue across their 1,000 locations. Okay, do you sprinkle on some more context for us over there, please, on Wawa?

That's more revenues than Black Rock, the big finance company. Or Adobe, the big tech company, or Spotify, the number one music stream. Sit down, stand up, and grab a beef jerky again. Yeties, the first Wawa goes all the way back to 1902, 122 years ago. They weren't selling gas back then. They were selling milk on bottles of milk like the milkman. The same family that started the Wawa Dairy Company still owns 53% of it today. So 53% of this gas station chain is owned by the founding family.

What about the rest of the company? Well, the rest of the Wawa convenience store company is actually owned by the employees. It's got an employee stock option program, so the cashier at the gas station collects dividends at the end of the year. It's amazing. But yeah, it is before you choke on that brisket mac and cheese, Jack and I got to share the news. Wawa just announced their biggest expansion ever. They're heading south and they're heading west. This is the biggest thing out of Philadelphia since the Declaration of Independence. They just announced that 300 new wallaws are coming, starting in North Carolina, Kentucky, and Ohio. It's like Oprah, you're getting a Wawa. You're getting a Wawa. You're getting

a Wawa, you're getting a Wawa. And the CEO has dreams to someday be in every U.S. state. Although, Jack, we should point out the last time Wawa expanded, it kind of backfired, didn't it? So they opened up a Wawa on Staten Island, which is obviously Giants Country, right? But they forgot to update the fan merch they were selling at the convenience store. So they were selling Philadelphia Eagles gear at the brand new Wawa in New York State? Blasphemy. Didn't work.

Forget about. Gabba Gaw. But despite that mistake. Like, Wawa still has a huge following. Wawa is a beloved brand, and Wawa is confident about their expansion. Because of our takeaway. So, Jack, what's the takeaway for our Mid-Atlantic buddies over at Wawa? Success sometimes comes down to the cup holder.

There's a great piece in one of the Malcolm Gladwell books. I don't remember which one. We're talking about cup holders in cars. A top reason that many of us choose our car isn't the engine or, the leather interior, it's the number and placement of cup holders. Because it turns out a small functional detail is often the surprise reason that a product is loved. For Wawa, the surprise reason customers love it isn't the cup holders. It's the bathroom.

It's the bathrooms because yet for years, Wawa has prided itself on the bathrooms. Like consistently, Wawa is ranked the number one public bathroom in America. And that's huge because when you're on a road trip, you need to gas up, but you also have to go to the bathroom and you hope it's not nasty. Wawa's in Florida, in Maryland, in Virginia, in Pennsylvania. For decades, in each of those states, Wawa was named the number one restroom. What are they having these bathrooms deck? I've never been to a Wawa. Jack, the one on Chestnut Street, it just smelled incredible.

And they didn't even have hoagies in the bathrooms. Because sometimes you just have to nail one key thing to win a customer's left. For cars, it's cup holders. For gas stations, it's bathrooms. Wawa's key to success is an example of the cup holder effect. For our third and final story, OpenAI just launched a new video generating artificial intelligence that is scary and exciting and the biggest thing they've launched yet. And it reminds us of a great quote from the founder of Airbnb.

Before we begin this story, Jack and I are going to sprinkle on some context. Reminder, OpenAI is the number one company in artificial intelligence. Sam Altman is the CEO and Microsoft is the Sugar Daddy. OpenAI became a household name with Chat. You could ask it anything and it would respond with text answers. It's like an AI Jane Austen. Then OpenAI launched Dolly. You could ask it to create an image of something and it would create that image.

It was an AI Picasso. So they had text-based generative AI, image-based generative AI. You know what's coming next. Last week, OpenAI announced the launch of SORA, video-based generative AI. You type in text, it reacts with a movie. Or is Jack and I like to call it AI-Stefey? Spielberg. Now, if you're listening to the pod, we love you. But this is an audio-only show. And we're about to describe some inherently visual things. This is one of the limitations of an audio-based

podcast. We can't show you what we're doing. This is why we launched video, though, right? Jack, like, we have a video podcast on YouTube. We should, we'll throw this stuff up on YouTube right now. Now, SORA is not available to the public yet. But Open AI showed us videos that it can create with a very simple prompt. Yet is you enter a text-based prompt. And then Sora creates a Hollywood-style video in just seconds. Boom, it spits it out. For example, Open AI showed us a prompt of historical footage of California during the Gold Rush. It's a video that feels like you're in California in 1849.

It's crazy. Or you could text that you want to see pirates battling in a coffee cup and SORA will generate a video of pirates battling in a coffee cup. It's like two pirate ships like moving around and waves of coffee within a mug. Now, we don't have access to this artificial. intelligence right now. But what would we like to see if we did, Jack? When we get access to SORA, we're going to ask it to create a video of a Tyrannosaurus rack surfing on a tidal wave on Mars.

Listening to James Taylor. Once this products goes live, we're going to realize that's the coolest D-Rex ever. Because this artificial intelligence could take our text and turn it into that video. Besties, Hollywood's been doing this for 100 years, but they need actors, animators, camera crews, directors, stage catering, and days and weeks of production. But Sora, this new technology, can generate compelling videos Hollywood style in under one minute. You push enter and one minute later, you're going to see a video that is wild. And that is why we call it Spielberg AI.

Don't give Sora an Oscar quite yet. We watch some of these videos and there's some flaws. There's one video you might have seen online. It's a woman walking through the streets of Tokyo and it looks like every step she takes. she's breaking her ankles. So they haven't nailed the index fingers and the ankles yet. Not 100%. Not 100%.

But it is still a concerning technology, right, Jack? Yeah, because it's 99%. And that means it could mislead people. And that means it could be used to mislead people. Which leads to our takeaway. So Jack, what's the takeaway for all our buddies? Over at SORA and OpenAI. Technology isn't good or bad.

It all depends how we use it. Yet he's Airbnb's founder in C&AWRB's founder in CIS. CEO Brian Chesky said this about technology and how we should think of it. He compared it to nuclear. Nuclear power can light up a city or destroy a city. It depends how we use it. Whether any technology is good or bad, it depends how we use it. Artificial intelligence is being compared to a nuclear-like technological breakthrough. Well, like nuclear, AI can be used for good. You can make compelling videos that bring people laughter or joy or other value. Or like nuclear power. AI can be used for bad.

People can make deep fake videos of presidential candidates, mess with our election, mess with our public safety. Because Yetis, as Airbnb's founder said, technology isn't inherently good and isn't inherently bad. It depends on how we use it. Jack, can you whip up the takeaways for us for Svice Wednesday? Capital One is acquiring Discover, so it can have its own credit card network.

Because credit cards, they are still a financial fashion statement. For our second story, it's Washington. The beloved Philly convenience store chain is expanding to the south and to the Midwest. Wawa, great hoagies, but the focus on clean bathrooms is an example of the cup holder effect. And our third and final story, OpenAI's SORA was unveiled over the weekend. It makes videos based on text. Like any technology, this isn't inherently good and it isn't inherently bad. It depends on how we use it.

But Yeties, this pod's not over yet. Here's what else you need to know today. First, remember last week, week. Jack and I told you Walmart was considering acquiring Vizio TVs. Well, now it's official. Walmart announced yesterday they're spending $2.3 billion to acquire Vizio so they can control the ads in your living room. And second, Crocs just notched another record year of shoe sales, $4 billion in revenue. About three of those were crocs that I bought for my sons and my nieces and my nephews. Jack's a power player yet he's crox now makes more money than Snapchat,

than Domino's Pizza or than lift. And finally, Hawaii, they're proposing a $25 per tourist tax to help them mitigate climate change. It is next time you pop over to Honolulu, you could be dropping an extra $25 per person per hotel for the new Hawaii tourist tax. The state plans to use that money to mitigate rainforest, prevent wildfires, and restore the coral reefs. Now, time for the best fact yet.

This one's sent in by Kelsey Black from lovely Austin, Texas. You know, Saudi Arabia is a big country, and it's a dry country. It's a huge desert for a country. You're building this off, but I like where you're going, Jack. You have no idea how dry Saudi Arabia is, Nick. Get this. Saudi Arabia has no rivers and no lakes. It's a huge country with no water between the coasts.

There is not a single natural river or natural lake in the entire country of Saudi Arabia. Now, it's not just desert. There are green areas where they've used irrigation to pull water and plant plants. Yes, they have water in Saudi Arabia. Despite being the 13th biggest country on earth, Saudi Arabia has zero rivers and zero lakes. What about Brooks?

We're streams. We found one pond, so there is a pond. We should point that. They have bogs. Carmen San Diego here is going to have to go and do some first-person research. Yeties, you are looking fantastic for Cevice Wednesday. And if there is another flavor, LATE besides olive oil or pork that you think Starbucks should launch,

let us know we're curious about it. Or let us know the flavor they shouldn't launch. That's equally valid. In the meantime, we're big barbecue fans. If anyone can get us one of these pork-based lattes, we would love to give it a truck. We'll pay for the shipping in handbook. To make it a $400 latte. Jack and I will see you tomorrow.

And before we go, a happy birthday to Yeti Teresa Fang celebrating with some wonderful. wonderful bagels up in Montreal. And happy birthday to Dominic Alaph in the Upper West Side of Manhattan. And just a shout out to Sotajitpatra, who celebrated being an amazing dad to Sparsh in Dublin, Ohio. And to anyone else, celebrating something today, make it a tea boy. Celebrate the wins. This is Jack.

Nick and I both own stock of Airbnb and Spotify, and I own stock of Crocs, too. We watched an hour of Oppenheimer on the weekend, and Alex doesn't want to watch anymore. Because there are four more hours left. She's like, I think I get it, Jack. And I'm like, yeah, honestly, I think you do, too. We'll let Wikipedia take it from here.