The Best One Yet - 👀 “The Dumbledore of DTC” — Warby Parker’s stock. Amazon’s robo-pooch. Debt Ceiling’s drama.

Episode Date: September 30, 2021

Warby Parker just went public with $56 worth of eyeglasses, but its greatest creation isn’t shades — it’s its business model. Amazon’s biggest new product of the year is a lineup of robots to take over your home, your body, and fly through your kitchen. And the Debt Ceiling drama down in DC all comes down to today.$WRBY $CSPR $APRN $SFIX $HNST $AMZNGot a SnackFact? Tweet it @RobinhoodSnacks @JackKramer @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Got a SnackFact for the pod? We got a form for that too:https://docs.google.com/forms/d/e/1FAIpQLSe64VKtvMNDPGSncHDRF07W34cPMDO3N8Y4DpmNP_kweC58tw/viewformLearn 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 Thursday, the new Friday, September 30th. Today's pod. Oh, yeah. The best one, yeah. This is a TBOI.

First story, Jack. Warby Parker just went public, and the stock is worth a total $6 billion of eyeglasses. Yeah, not just glasses, though. Warby Parker, it's the dumbled door of direct-to-consumer. For our second story, Amazon just launched an at-home robot. Adorable, creepy, called Astro. It's going to roam your home, listen to your commands, like a dog, but bred by Bezos. Our third and final story. Congress just woke up, realized they have a paper, a presentation, and examine an interview all due today.

brutal. Congress, it's got to do four things for the economy this week, but it all comes down to today's debt ceiling. We haven't covered the debt ceiling in this pod since ever. Last time we covered the debt ceiling. You were this tall. I remember you were this tall. But Snackers, before we get those three stories, we got a couple of snacks updates for you. First, we've got a literal snacks update for the snackers. That's right. After an eight-year hiatus, Skittles is bringing back the green Skittles. They're bringing back lime flavored, the most nuanced flavor in the rainbow, Jack. But the second Snacks update is about this snack.

Yeah. Robin Hood Snacks. We're talking about us. We're getting a show on Snapchat. We're getting the show! There we go. It's called Snacks on Snap. This is a real thing.

Yeah, you can find Snacks on Snap on the Snapchat Discover tab. There you go. We're whipping up a three-minute show. Right, nice. Two days a week. Very nice. One single story per episode. Oh, wait.

And then there is, Jack. Is there A trivia, B trivia, C trivia, or D, all of the above? There is trivia. We converted the snack fact at the end of the pod into a trivia question at the end of snacks on snap. And there is makeup. We don't put on makeup off in Snackers. When we do, it's for Snapchat. Actually, there is no makeup.

It's just us recording with our phone selfie style. But it feels like there's makeup. True. We do have an amazing team that whips up each episode. so it's way more than just mix of my faces. Super visual, sprinkled with a little bit of context, a lot of graphics, very Snapchat. Subscribe to Robin Hood Snacks on Snapchat to get the first episode. Yeah, we want to know what you think. Snackers, check it out.

Robin Hood Snacks on Snapchat. In the meantime, let's hit our three skittles. You're tuned in the snacks daily. The snacks about to hear ain't food. It's air candy. They don't reflect the views of the Robin Hood family. It's all informational just so. We're not recommending any securities.

Nope. 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. Robberhood Financial, LLC, member Fenra slash SIPC. For our first story, Warby Parker stock, it is now public after its direct listing yesterday. It's not just glasses. Warby Parker created a business model. Warby Parker, we're talking $95, direct-to-consumer glasses, named after like the skinny characters in the mid-century novels. The Percy, the Carlton, the Winston, top-selling glasses at Warby Parker. You love the Winston. Jack, nothing screams, I'm literate like a pair of Warby Parker glasses. Warby Parker's 11 years old. It's the Warby Parker of Warby Parker.

Yeah, it is. It pioneered the business model of cutting out the middleman, selling direct to consumers online, and doing that at a lower price because no more middleman. They're the Dumbledore of Direct to Consumer. They are. They're like the Mr. Miyagi of Dita C, Jack. They're the godfather of murdering middlemen. Wax on, wax off. Instead of going to lens crafters or sunglasses hut,

where they're going to take their own cut of the profit as middlemen, Warby Parker sent you five frames in the mail. You pick your favorite. You send back the other four. Jack, no such thing as a bad student, just a bad teacher. Now, even for this good student teacher, I'm not sure which Warby Parker has, The pandemic was tough.

Yeah, it was. Warby Parker sales, they only grew 6% last year in 2020. But that's actually good compared to Warby Parker's biggest competition, which is European Luxottica owner of Raybans. Their sales fell in 2020. So Warby 6% is pretty good. Warby Parker's looking at the mirror. It's liking what it sees because Warby Parker is thrilling in 2021.

I guess sales growing 53% is thrilled. I'm sorry, I never heard of thrilling used it that way. Their sales grew 53% so far in 2021. And now, Warby Parker's worth $6 billion after their direct list. And using thrilling as a verb really threw you off there. I'll go back to fully adjectives. But Snackers, here's what Jack and I find fascinating about Warby Parker. They made a critical update a few years ago.

Warby Parker started with 100% of their business originating online. That's how they began. But today, half their sales are offline. Yeah. went from online to offline. They now got 145 stores and they're adding 30 to 35 this year and they plan to add another 30 next year. They call physical stores, which are gorgeous, by the way, their biggest growth opportunity. In their S1 document for their direct listing, they use the word online 64 times. But they mention the word store 274 times. We know why. The stores look like libraries. You just want to

take an app. It's like a full forest of mahogany in their job. I'm sorry, one second. Am I in Versailles? I haven't seen this many mirrors before. Sometimes I don't go into Warby Parker stores because I don't think I'm dressed well enough. I would say that they're thrilling, but I really don't want to mess with you again on this podcast. But Snackers, Nick and I don't see these as stores. We see them as interactive billboards. Yeah, these Warby Parker stores are interactive billboards because you don't just walk in solo. You're probably going to walk in with a friend. Right, because you need an honest friend who's going to honestly tell you how the frames look on your face.

Jack, do the Winstons make my forehead look huge? Probably. No, but they make my smile look huge. And the result of Warby being like a social activity is that Warby opens a store and then web traffic for Warby Parker.com jumps in the area where they opened a store. Okay, let that sink in. Warby opens a physical store, but then online sales jump 15% in that neighborhood. That's a big deal. That is the same phenomenon you get when you put a billboard up on Interstate 90s.

Warby, we think you're an interactive billboard. So, Jack, what's the takeaway for our buddies over at Warby Parker? The greatest risk to Warby is the religious business model it inspires. Snackers Warby, it is the Dumbledore of direct-to-consumer, but it's D2C disciples. They actually went public before Warby Parker did. So we know what you're thinking. How are Warby Parker's disciples doing as publicly traded stocks?

They're not doing great, Jack. Casper Mattress is down 60% since their IPO. Brutal. Blue Apron. 95%. Honest companies off 45%. All three of those direct consumer companies, they're all worth less than a billion dollars now. Stitchfix and figs are both direct to consumer and their stocks are up since their IPOs. But they're worth just $4 billion and $6 billion. They're not that big either. Well, on page 109 of Warby Parker's IPO paperwork, they said that we aspire to demonstrate that a business

could scale, be profitable and do good in the world. Well, Warby hasn't achieved that crucial profitable part. And Wall Street's not that impressed so far with the disciples who Warby's inspired. For our second story, Thursday is the new Friday, except apparently if you live in Washington, D.C. lately. The biggest spending bills and the biggest debt ceiling ever like Jack and I have ever seen is being voted on right now in D.C. Not just the biggest you and I have ever seen. The biggest since Abe Lincoln or George Washington or Martin Luther King ever saw.

We're not that old. Yeah, actually, we're not that old. Trillions of dollars come down to a few votes that are happening today and tomorrow in Washington, D.C. The news here is it's nervousness. The 10-year borrowing rate for the U.S. government, also known as the 10-year Treasury year, it's up six days in a row. Which means that the U.S. federal government has to pay a higher interest on all the IOUs out there, all the debt we got out there, which is $27 trillion of debt.

It sounds like a number of Dr. Evil would yell at some president. I mean, you can't even round that up higher than that. Now, the reason rates on government debt arising, it's partly because the Fed, America's central bank, is expected to chill out in their support for the economy. And it's also because Democrats are trying to spend a few more trillion dollars

on bridges and highways and tolls and a bunch of other investments. The big problem, Congress has four assignments, huge assignments, all due on the same day. Mr. Professor, I'm sorry, can I get an extension on everything?

Snackers, Democrats and Republicans have been given each other the silent treatment for months, and now everything is due right now. We're not getting an extension on any of this. Four major items are on the to-do list for Congress. They must get done this week. In fact, you can't email in the paper. You have to hand it in person, and that's like on the other side of campus. Sorry.

My Amazon robot ate my homework. Oh, wait, that's the third story. So for the first thing Congress has to do like today, it's got to pass a budget for the new year to keep the government running because the new year in Washington, D.C., it starts on October 1st, which is tomorrow. Yeah, the fiscal calendar. No one really knows what that means. But if no budget agreement is reached by Congress, then the federal government shuts down,

starting midnight Thursday. It does look like that's going to pass. So good stuff. Yeah. The second big item on the to-do list is a bipartisan infrastructure bill focused on roads, bridges, and other hard stuff. So that's the second thing do like ASAP. Okay.

And number three is Joe Biden's build back better plan, which is up to $3.5 trillion in new spending on health care, family care, fighting poverty and climate change. Yeah. So this third thing that is due like very, very right now. This one's the most controversial. Democrats are still debating this size. Right. How big will it be? What will be in there? What won't be in there? That one actually might not get past at all. Yeah, it may not get past. In the meantime, though, Jack, what's the takeaway for everyone in the United States who needs these things? do immediately. Those three huge things, they don't even matter if you don't deal with the debt ceiling. Snackers, we didn't even tell you about the debt ceiling. That's the fourth thing. And it happens to be the most important of those and it's due right now. Right. Because we've had government shutdowns before. We've had bad bridges for decades. We've had incredibly expensive and inefficient

health care. More expensive. But we've never ever defaulted on the U.S. government debt before. And the U.S. Treasury Department, they get to act like Uncle Sam's money manager. The Treasury Department has authorization from Congress to pay the nation's bills, but it only has authorization through October 18th. After October 18th, unless Congress raises the limit on our debt, the United States will default on its debt. Yep, that thing on our money that says full faith and credit in the United States, that will be damaged.

Yeah, someone's going to have to change a tattoo or two. Treasury Secretary Janet Yellen says, the consequences of de facto, defaulting on our debt would be catastrophic. Usually. Because the United States has more debt, $27 trillion, than anyone in the galaxy. So Democrats are going to have to figure out how to do it with no Republican support. And markets are like just hanging out today holding their breath. It all comes down to the debt ceiling.

For our third and final story, this one's wild. Amazon just launched a first of its kind home robot. This is one of those headlines that speaks for itself. It totally does. but it really begins with a classic FOMO situation. Amazon's no different than you were made. No, no, no, no, no, same thing. They saw Apple announce two big things two weeks ago.

And then they saw Facebook announce a big thing last week. Yeah, they're like, I want to launch something. I want to launch something. So Amazon had their own big product day yesterday and then bailed Astro. Astro. This is a $999 home robot. It's basically, it's Alexa on wheels. That's what this is.

I think this is the most expensive Amazon gadget ever. It looks like an iPad stuck on a microwave. It is actually named after the dog from the Jetsons, the cartoon. Astro is the size of a corgi. Adorable. And it's got a 10-inch screen and three wheels. It's going to roam around your home like a hesitant rumba. This robot looks like a Star Wars droid that lost its way.

It's like C3P. Whoa. Easy, easy, easy, buddy. No, a clear use case here is communication. You can FaceTime with your grandma for two hours if you want. without exhausting your arm. Exactly. And we've all held up our iPhones for way too long. Instead, you could just talk to Astro through to your grandma. Right. And remember, Astro's named after a dog and it does fetch. It does. So you could, for example, stick two cans of spin drift on Astro, who could then deliver them to your buddy Timmy, who hasn't gotten off the couch in like six

hours and didn't want to go to the fridge himself. So the robot brought him to him. Are you a spin flancer? Did he get paid to say spin drift there? I'm just saying the raspberry. It just quenches thirst. But we think Astro's really designed for safety and security in your home. For example, let's say the window breaks while you're on vacation. Who's going to notice? Astro will hear the noise and go check it out and alert you if it's something unusual. Yeah, let's say, Jack, you can't remember if your buddy Timmy, who finally went outside, left the gas on back at home.

You can command Astro to go to the kitchen, look at the stove and see if that knob is turned up or if it's turned to the side. Timmy? Or let's say you're trying to call your uncle to remind him to take his thytastrosol, but he's sleeping. and you can't reach him. You can command Astra to go into the bedroom, nudge his arm until he wakes up, and read the message on the screen that says, have you used your thytastro soul?

Love Jack. So you're going to control Astro with voice commands. Like a dog. Or you can control Astro through your smartphone app because there's a whole bunch of commands in there too. Not like a doc. Amazon is rolling out Astros slowly. It's $999.99 bucks.

But there's a wait list. It's only for like Amazon lovers. I think the other tip. takeaway here, Jack, could be that Amazon is trying to use a robot to replace your dog. Amazon's anti-dog? River's puppy job. Jack, it just isn't safe. So what's the takeaway for our buddies over at Amazon? This may totally fail, but it's a great example of living in the future. Yeah, Snackers, Jack and I jumped in snack style. Here's the actual, like, real story of how Amazon executives decided to launch the first big tech robot for homes ever.

According to CNBC, Amazon execs were sitting at a table. And one of them asked the rest of the table, hey, in 10 years, you think there's going to be more robots or fewer robots in homes? And all these Amazon execs looked around the table and they said, hey, they're going to be more. Like unanimously, they said there will definitely be more home robots. And the one Amazonian who asked the questions, like, let's build something so that we're leading in robots and not chasing the competition. Why wait? So this new home big tech robot, it may flip. because it's like the first of its kind consumer product.

But Amazon is living in the future, not the present. Jack, can you thrill up the takeaways for us over there? That's what you did there. Warby Parker created the online first direct-to-consumer business model. And Wall Street hasn't loved that business model, but Warby is the master Miyagi. For our second story, the U.S. government has a bunch of huge bills, all politically linked, all do right now. And it all, all of it, all of it comes down to the debt ceiling.

And final story, Amazon just launched Astro. They're $999 robodog. They're living in the future, not the present. Where every meditation app I've ever used think that's a terrible idea, by the way. Like, be in the moment, not in the future. I've a feeling the calm app like doesn't sit well over at Amazon. Now, time for our snack fact of the day. This one sent in by Rebecca Ragazan, whose roommate Savannah submitted yesterday's

snack fact. Boom. Whoa. Wow. back to back. Unprecedented. This is like Joe DiMaggio's hitting street. Double serving.

What do we got, Jack? Right. The longest staircase in the world is over two miles long. Yeah, this thing is going up the side of a mountain. We're talking 11,674 steps, one staircase. It's Mount Meese in Switzerland. You actually got to take a funicular railway. Don't even know what that is.

Up 30 minutes to get to the top of the mountain and the staircase is running all along that railroad route. Well, you don't have to take the railway, Nick, because once a year, they let people run the staircase. Only mega athletes, though, 500 people. It's a race. It's limited to 500 people. And the fastest time, one hour, two minutes, 11,000 steps. You're going to need some fantastrosol after that race jack. Snackers, you look fantastic today.

If you haven't yet, when you see a buddy, Thursday is the new Friday, tell them, hey, you should be listening to the Snacks Daily podcast. Have you had your snacks daily? H. Y, HY, H-Y, Y, Y, Y, St. If you know, you know. We'll see it on. And before we go, happy birthday to Josh Jetty, a Marine stationed in Iwakuni, Japan. Josh, thanks for your service.

And happy birthday to Tate Birch, turned in 22 in Twin Falls, Idaho. And Denzel Andrade over in Sao Paulo, Brazil. Happy birthday to Ryan in Oakland. And Risa, Adrian, the chemist in Riverside, California. Happy birthday to Caitlin Powers in the District of Columbia. Fix that debt ceiling for us, Caitlin. And happy birthday, Elisa Tink, celebrating for a full week every single night in York City. Happy birthday, Spencer Allen in Irvine, California. Oh, and Jack, Rebecca Silva,

she's getting a fresh start in Chicago doing logistics. Good place to get a fresh start. Happy 26th anniversary to Robert and Tammy Razza in West Hills, California. And Tracy and Melissa White, listen to snacks while they are filling vending machines and now they are launching their own vending machine business together. Ticker symbol can. Snacks, doing snacks. Yes, I can. And legendary Lego Nista, Brian. Thank you. for pointing out that Legos is not a word, the singular, and the plural is just Lego. Mooses, Legos. Delete them from your vocabulary. Jedi. Jedi. And to anyone else celebrate something today, make it a T-Bloid. Celebrate the wins. This is Jack. I own stock of Amazon and Stitch Fix and

Nick own stock of Apple. Robin Hood Snacks, newsletters, and podcasts reflect the opinions of only the authors who are associated persons of Robin Hood Financial LLC and do not reflect the views of Robin Hood Markets, Inc. or any of its subsidiaries or affiliates. They are meant for informational purposes only and are not a recommendation to buy or sell any security, cryptocurrency, or investment strategy in any account. This is not an offer or sale of a security, not a research report, and is not intended to serve as the basis for any investment decision. Any third-party information provided therein does not reflect the views of Robinood Markets Inc., Robin Hood Financial LLC or any of their subsidiaries or affiliates.

All investments involve risk, including loss of principle and past performance, does not guarantee future results. Robin Hood Financial LLC, member FINRA SIPC. Wax on, wax off.