The Best One Yet - 🏋️ “The $10 Gym Lie" — Planet Fitness’ perfect price. Toyota’s hybrid training wheels. Ernesta’s rug disruption.

Episode Date: November 28, 2022

Gyms are already at record highs in 2022 — and it’s partly thanks to Planet Fitness’ perfect $10 price. Toyota has a plan to remain the #1 car company on Earth: hybrids, aka electric training wheels. And the ex-CEO of Peloton is launching a new startup called Ernesta… because the rugs beneath your feet are littered with dust of disruption.$PLNT $COST $PTON $TMFollow The Best One Yet on Instagram, Twitter, and Tiktok: @tboypodAnd now watch us on YoutubeWant a Shoutout on the pod? Fill out this formGot the Best Fact Yet? We got a form for that tooLearn 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. Welcome back. It is Monday, November 28th. And today's pod is the best one yet. It is good to be back. Tell a friend to tell a friend. How you doing over there?

Welcome back, man. You're looking great over there. I'm dressed like a grizzly bear because I ate like a grizzly bear the past five days. You know what Thanksgiving is Jack? It's the ultimate adult happy meal. That's what it is. Spread over five days. Yeah.

The toy is the argument with your uncle at the end. Jack, what's our first toy for today's tea boy? Post Turkey Day, gyms were already having their best year ever. But Planet Fitness has found the perfect price. For our second story, Toyota is the number one car company in the world, and Toyota has a new strategy to stay number one. Here it is, here it is, here it is. Hybrid training wheels.

And our third and final story is the former CEO of Peloton. He has a new startup. It does. He's doing rugs. Yeah. Like floor rugs. Because under every rug lies the dust of disruption. They should run with that. That should be their tagline.

But Yeties, before we hit that fantastic post- Thanksgiving mix. Feeling full, feeling fantastic. Jack, I love this mix, man. The biggest divide over Thanksgiving dinner table wasn't politics, religion, or money. Yeties, it's not who you voted for or your strange cousin Todd. The biggest divide. Yes. In this country.

Jack. Is over butter. Yeah, America. We aren't red or blue. It's yellow or not yellow. According to Instacart data, butter buying is freakishly regional. Besties, Jack and I can predict your butter binging based on your zip code.

According to Instacart data, the top three butter consuming states per capita. In West Virginia, Vermont, and Iowa. And the bottom three states for butter? Arizona, New Mexico, and Nevada. It turns out the 20 biggest butter states, we looked at the list. They're all northeast or Midwest. Because those states were the most influenced by European culture. French person is 10%

butter, actually. If you touch a French person, they will melt. Put the south in the west of the United States. Yeah. They decided somewhere to drop the dairy. Because those states were more influenced by Hispanic culture. That's right. You don't put butter in your tech smacks tacos. No, but you do put

butter on a New England lobster roll, Jack. So, Yeties, if you're buying a butterboard, you're probably in Burlington, not Birmingham. Yeties, if you love Lando Lakes, you're probably from Lafarge, Wisconsin. Not Los Angeles. America, we're not really divided.

Turns out, it's just butter. Jack, the honors. We love our spread. We love our butter. But most of all, we love cow hunters. Let's hit our three stories. 16 years before this song, two boys from the Northeast met in the dorm.

They had an idea that caused a cultural storm. It's the best hits. 50% that's a fat tip. Tea Boy City on your at list. If you know you know, because we're ready to go. Wait no more, so just start the show. Start the show. For our first story, just after Jack and I just lectured you about butter,

gyms across the United States just hit record levels after Thanksgiving. Oh, and guess who's loving every minute of it? Talk to me, Jack. Planet Fitness, thanks to their one strategic price. Yeah, he's just stuffed your face with stuffing. Pies on your thighs. He got yammies and your hammies. I had so much cranberry sauce.

I need days of detox. Turkey Trot, make it too. Well, the New York Times just gave us this data. Gims are back, baby. Fitness centers, in-person gym visits by Americans this year, is already up 18% compared to 2019. It's an all-time high. And Planet Fitness, yeah, they're feeling the burn on that record price. Planet Fitness has got 16 million members.

Now, funny thing Jack and I noticed about that information. Jack, what is the average gym price in the United States these days? I'm gonna run you about 50 bucks a month to be a member of a gym. A 50 bucks gets you on the squat rack. But Jack, what is the average core planet fitness membership price? Dude, it's just $10 a month. $10 a month. And that's not even the best part.

They have not changed that $10 a month price in 30 years. Find me a subscription in America that's lower than $10 a month. I do, Jack, milk, gas, Netflix, all those prices. Like, they keep rising on us. They just rose again like last weekend. Planet Fitness is cool. The poor $10 price never changes. Now, yeties, here's why Jack and I think that $10 planet fitness price is just so powerful.

It's just enough. Yeah, it is. But it's also not too much. Okay. Get this statistic. This is wild. You think, like, you have an issue not going to the gym enough? Maybe you do.

No judgment. 60% of Planet Fitness members visit less than once a month. Most Planet Fitness members, they don't even go to Planet Fitness. That's what we're telling you. grab one of those 16 million members, chances are they haven't stepped in the gym in over a month. Now, for any independent business out there, someone not using your product ever, that would be a problem. It's awful news. But for the gym industry, that's incredible news. And that is exactly what Planet Fitness wants. And that is the point of this $10 price deal. Nick, $10 a month. I don't

care who you are. It's low enough to get you to sign up just to say, I belong to a gym. So basically, cheap enough for you to sign up, but it's also cheap enough for you to not cancel it. Let's say you signed up, but then you look at your credit card statement. You're like, I haven't been to Planet Fitness in forever. But $10 a month, that's so small. You don't even need to cancel. So what Jack and I are saying here is you didn't pay $10 to work out all year. What you paid was $10 to say that you could work out all year. The Planet Fitness $10 membership, the bare minimum to say you fulfilled your New Year's resolution. Honestly, it's not about the barbells. Planet Fitness price. It's about the bragging rights. Sure, I've already had a couple

bignets today, but I'm a gym member. So, Jack, what's the takeaway for our buddies over at Planet Fitness? Another sacred cow that protects the profit puppy. Yet he's Planet Fitness's CEO says he won't change that $10 price. That price is key to Planet Fitness's identity. $10 a month is a 30-year-old price. There must be millions of members who only pay $10 a month, and Planet Fitness, loses money on those members. But that $10 price is a sacred cow, a legendarily long-time, low price that keeps customers loyal. And that $10 price has banked so much customer love in the last 30 years. We're talking about it. It gives Planet Fitness leeway to charge an annual fee, which is up to $39 a year now. Jack, can we whip out the whiteboard? You and I've been keeping

track of all these sacred cows all year long. Arizona's 99 cent iced tea can. That's a sacred cow. Price is unchanged since 1988. Or Costco's $0.50 a hot dog deal. Price is unchanged since 1985. Or Elf Beauty's $3 bar of lipstick. Prices unchange since the company was founded. For Planet Fitness, the sacred cow is the $10 a month membership. It's unchanged for 30 years.

It may lose money, but it protects the profit puppy. For our second story, Toyota, the biggest car company on Earth, just announced a surprising electric car strategy here. is, here it is, they're boycotting electric cars. Wow. Yeah, they're boycotting. Instead, Toyota is all in on hybrids because training wheels. Because training wheels.

All right, Jack, what would you say the most iconic Toyota car was? What would you say it is? No question. Yeah, what is it? It's the Prius. It's the Prius. 1997, this thing set expectations for what clean cars should look like. It was the Prius.

When the Prius came out, we all decided, oh, okay, that's sort of clean car. looks like. It's slow. It has no acceleration and it's ugly. The Prius basically, it marketed itself with its look. Basically, the Prius looks like a Birkenstock sandal. The key is it had to be conspicuously different because Prius owners wanted you to know that they're a Prius owner. Is that a giant crox clog? Oh no, it's a Prius. Yeah, I like to be part of the solution, not part of the problem. Thanks. Which leads to the news. Toyota just refreshed the Prius. And it's the first version of the Prius that actually looks sleek in 25 years. It's the first good-looking Prius.

That's when Jack and I noticed something. Toyota launched the Prius 25 years ago, the first hybrid, but they still have no purely electric cars. And we repeat, Toyota was the first to hybrid cars, but they might be the last to the battery electric car. Yet this is huge because Toyota is the number one carmaker in the world. And yet Toyota doesn't have a single electric car out there. The only purely electric car that Toyota makes is true.

Is an electric car you've never heard of. What's this thing called again, Jay? It's called the BZ4X. I'm like a car guy and I've never even heard it. I mean, it sounds like a Star Wars character. We've never heard of it because they only sold 200 in the US so far this year. Yeah, Yetis, the other two million Toyotas that have been sold all have engines that burn gas, all two million. Now, to sprinkle on some context, not a single Tesla has a gas burning engine.

Volvo is going all electric soon. Ford has made their Mustang and F-150 electric. Jack and I checked under the chassis and we can confirm that Toyota basically zero electric cars out there. Toyota hates electric cars, but here's the key. They love hybrids more than anyone else. That is the key. Toyota, instead of even looking at electric, they've just doubled down, focused, put all their resources into hybrid cars. We jumped on to Toyota.com.

They have 13 hybrid car options. And not just the salamander-sized Prius Camry or Corolla, either. No, no, no, no, no. Even America's favorites, the trucks and SUVs that Toyota makes, they all come in hybrid options, too. It's like every Toyota car has a twin who's marginally more environmentally efficient. So, Jack, what's the takeaway for our buddies over at Toyota? Toyota is betting on training wheels. Yeties, Europe, California, New York, all of those places have already

past rules banning new gas cars by 2035 to 2040. So unless there's some massive policy change, gas burning cars will eventually go extinct. Well, until then, with any big leap in technology, people want an in-between option. They want training wheels. Training wheels like hybrids, which get consumers used to electric for short rides, but have them feeling secure with their gas-powered backups. Hybrids, they let people learn electric without needing a helmet or elbow pads for each During this in-between era, Toyota thinks people want an in-between options.

So Toyota isn't really selling cars. Toyota is selling training wheels. Now a word about our sponsor, Robin Hood. You know, honestly, your salad, it says so much about you. Nick, you like to blaze your own trail at the salad bar. Yeah, I'm ordering a salad. I go off menu, man. Like a combo of kale and croutons that has never been made before.

Me? I'm not reinventing the wheel. I like to go classic. Sweet green thinks it's a good combo. thinks it's a good combo, Jack's not going to change that. Kind of like investing strategies. Some want to build a custom portfolio of stocks, crypto, and options. Others don't want to reinvent. Just give me the most standard ETF. Whether you're tweaking your one-of-a-kind portfolio every day or prefer a more hands-off approach, Robin Hood has the tools. If you're not investing

on Robin Hood yet to get started, go to robin hood.com slash T-Boy to choose your free stock. That's robinid.com slash T-B-O-I. Limitations apply. Stock's offered by Robin Hood Financial LLC, member SIPC. Crypto offered through Robin Hood. All investments involve risk. By the way, this podcast is not owned or part of Robin Hood and we are not employees of Robin Hood. For our third and final story, the former leaders of Peloton are launching a new startup. And that new startup is rugs. Because hidden under every rug is the dust of disruption. Jack, over Thanksgiving, was at my parents' place, did a few Peloton rides. Do you know what the hardest Peloton ride of all is? Don't even get and he started. It's owning the stock. Yeah, I know. Yeah, Yeti's the Peloton stock price. It's down 90%

from its all-time high. This is Nick and Jack. You know the deal. Yeah, you do. We still own the shares. And the CEO of Peloton was pushed out just a few months ago. That CEO is named John Foley. He was the co-founder of Peloton and he's been unemployed for a while. So he launched a new startup and it launches next year. And it's called Ernesta. Ernesta just raised $25 million. And Ernesto is focused on rugs. In the spring of 2023, we're going to see a new option for direct-to-consumer custom-cut woven rugs. Now, Jack and I should sprinkle on a little context here,

not the wall-to-wall carpet you immediately ripped out of that old fixer-upper. No, no, no, no, no, no. Ernesta is focused on custom-cut rugs. The kind that perfectly fit your room, like whatever the shape, because it's not a one-size-fit-all situation when it comes to rooms. So instead of three rugs that kind of fit your living room together? Like overlapping of it a little bit. You're going to get one custom fit rug that perfectly fits the floor of your living room.

How Yetis, the reason this is so exciting, the reason Jack and I were so fascinated with this story is because it's boring. John Foley describes the rug industry as uninterested. Basically, this is a boring industry. That's exactly why they're so excited about it. So, Jack, let's do a little quick quiz here. Jack, here we go, here we go. What color is the rug in your living room right now? I think it's off wet.

Oh, yeah, I think it's not a full, firm answer over here. What weave do you got going on to that rug over there, Jack? No idea. You have any idea in the size, dimensions of this thing? It's big. Okay, yeah, we're working with Oriental weave, Persian ply, fringe knotted, what kind of stuff? I have no idea the details of the rug in our living room. Do you even know the brand of that rug, Jack?

I do know that because it was expensive. Jack, you know that you are wearing a Patagonia fleece right now, But you don't even know the rug that you're standing on. Rugs are funny because you don't look at them. You don't sit or lay down on them. You just buy them and then cover them with furniture. Oh, and on top of that, they're usually a one and done purchase. Like, furniture isn't as frequent a purchase like clothing or food is.

You're only going to replace a rug if you encounter one of the three R's of life. The three R's. What are the three Rars of life, Jack? You're renovating the house. You're relocating or red wine. What's that rule? My mom has about red wine, by the way? She says never serve red wine at your home when guests are over.

It's too risky. It could ruin a friendship if they spill. Spill a little bit. That rug is ruined. But yet he's beneath the boringness of the rug industry is a business beauty. Because if you think about it, every room has a rug. In fact, we jumped into the day to T-boy style. After the chair, the rug is the most purchased home good out of any of your furniture.

How many rooms are there in the United States, Nick? Well, basically, there's one rug per room. Jack, there are a lot of rooms in the United States. That means there's a lot of rugs in the United States. We're going to take a gander and bet you're listening to this pod. A shocker in a room. On a rug. Yeah.

So, Jack, what's the takeaway for our buddies over at Ernesta? You don't have to win the market to win. Yeties, that's the Peloton guy's goal here. They want to win a small piece of a big market, not a big piece of a small market. We jumped in further T-Bois style to the data. there's a hundred million rugs sold every year in the United States, a hundred million. Dorm room to boardroom to bedroom. But no single rug brand stands out in the market.

So even if Ernesta just gets a measly 1% of that big rug market, that's still one million rugs they would sell. And if they sell each rug for $1,000, that's a billion dollar a year business just capturing one percent of the market. And the size of the rug market, that's what makes it so intriguing. And the absence of a leading brand makes it winnable. Rugs are not a winner take-all market because you don't have to win to win it. Just do it?

Jack, can you and that 5x8 shag carpet whip up the takeaways for us over there? Planet Fitness has 16 million members in growing thanks to the $10 a month price. It's the sacred cow that protects the profit puppy. For our second story, Toyota hates electric cars, but it loves hybrids. Toyota is betting on training wheels. And our third and final story is our Nesta. They launch early next year with direct-to-consumer custom-cut rugs. You don't have to win the rug market to win in the rug market.

In the rug market. If you ain't first, you can still make money in the rock market. Currently in the rug market. So now time for the best fact yet. This one sent in by a father-daughter team, Emily and Jim Noel. from lovely Reisterstown, Maryland. Push and play. Here we go. This is Emily. This is Jim.

And this is the best fact yet, or should we say, facts. Father-daughter version. You, Dad, not many people know that remember is National Peanut Butter Lover's Month. That's right, Emily. Who knew there was a whole month devoted to this creamy confection? Let's break down a couple facts about peanut butter. By law, any product labeled peanut butter in the United States must be at least 90% peanuts. There are six cities in the U.S. named peanut. The average European eats less than one tablespoon of peanut butter a year.

Week. Every year, Americans eat enough. of peanut butter at Chacoat the floor of the Grand Canyon. Perfect timing. There's only a couple days left of November. National peanut butter month. Well, apparently butter divides us, Jack, but peanut butter unites us. You know what we feed Wilder, the pod sun?

Skippys. I hope it's Skippies. Breakfast are champions. Oatmeal? Yeah. With a heaping spoonful of peanut butter. Unlike guac, peanut butter will never be extra. And we love that.

Yeties, you look fantastic to kick off the week. Jack and I are happy to be back from you. and the one thing you can do today to help grow the pod, drop an H-Y-H-T-B-O-I. Have you had the best one yet? If you know, you know. Nick and I, we'll see you tomorrow. Can't wait.

And before we go, congrats to Yeti and Janie Schmitz, who celebrate in 25 years serving lunch at Okinee, Illinois Elementary School. Janie, thanks for filling those bellies of all those kids for all those years. Thanks for the lunch logistics. And congratulations to Veronica Angulo,

who has a new job at a startup in Bogota, Columbia. And congratulations to Courtney Andes, who just got their CPA license. And Jamie Lamb just passed his comp TIA certification over in Indiana. And happy 31st birthday to Osvaldo Cajabedez in Canoga Park, California. And Shane Godin, happy birthday in Hamilton, Ontario. And happy 32nd birthday to Abbie Ojikudu just outside of Boston. And Marco Asavis, happy birthday down in Raleigh, North Carolina. And happy birthday to Hadley, the turkey girl who's turning eight over in Los Angeles.

And to anyone else celebrating something today, make it a T-Bah. Celebrate the wins. This is Jack, I own stock of Netflix, and Nick and I both own stock of Peloton and Robin Hood. Now, a word about our sponsor, Robin Hood. Okay, so Jack and I both worked in finance for a while. And we know the six-monitor Bloomberg jockey, with charts, numbers, balances, and more charts. They got coffees in both hands while they're executing some complex trade on a soybean future. Well, we're not trying to impress with our Mission Control Trading Center.

Just give us an app, please. Robin Hood, with its mobile first and intuitive design, it lets you trade with just a few quick taps on their app. And even if things still don't seem easy, Robin Hood has your back 24-7 with its live and robust customer support. If you're not investing on Robin Hood yet, to get started, go to robin hood.com slash t-boy and choose your free stock. That's robin hood.com slash T-B-O-Y.

Limitations apply. Robin Hood Financial LLC, member SIPC, all investments involved for us. By the way, this podcast is not owned by or part of Robin Hood, and we are not employees of Robin Hood. Dude, what a freaking pot. What a fun. What a show. What a way to come back.

I mean, that's incredible. Just so much fun on a Sunday. I feel like that was like a religious experience. This is Nick. This is Jack. And to everyone out there from the book of Teavoy. And then Jack came down and Jack said, here is the takeaway.