The Best One Yet - 🐮🐷🐶 “The Squishy Doctrine” — Squishmallows vs. Build-A-Bear. Microsoft’s nuclear island. Nike’s biggest mistake.

Episode Date: September 23, 2024

Warren Buffett bought Squishmallow’s squishy toys… Now they’re suing Build-A-Bear. Microsoft is restarting Three Mile Island nuclear power plant… because AI is B.Y.O.E. (energy).Nike has a new CEO, but we’re looking at what the old CEO did wrong… Hoka just did it.Pizza Hut will help your resume actually get read… because they’ll print it on a pizza box.$MSFT $YUM $BRK.B $BBW—-----------------------------------------------------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/  Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. Welcome back. It is Monday, September 23rd. 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. First day of fall, but stocks are popping. Jack. I don't know. What are you thinking? More pumpkin spice on the podcast? No, we actually have this new thing called a dreamy in Vermont. Yes. It's a creamy soft-serve ice cream on top of an apple cider donut. It is dreamy. It sounds healthy. Jack, three stories for today's show. What do we got? of the podman. For our first story, Microsoft needs so much electricity that they're reopening an old nuclear power plant. And not just any nuclear power plant. Three Mile Island. Because the future of tech is B.Y.O.E. Bring your own energy. Second story, what do we got, Jack? Warren Buffett has acquired the toy company Squishmallows, the adorable soft pillow toys. And Squishmallow's business success may all come down to one single word. Squishy. No, it's not. It's not. not squishy. And our third and final story. Last week, Nike fired their CEO, John Donno. The biggest shake-up at Nike since Michael Jordan retired. So Jack and I are doing an autopsy on the

number one reason for Nike's fault. We're covering how Nike went from swoosh to airball. But Yeties, before we hit that wonderful mix of stories, fantastic mix of stories to kick off the week. Love the mix. In this economy, we just found the best way to get hired. And it involves resumes and pizza. First, some bad news. 75% of resumes submitted in America get ignored. 75% of resumes are tossed out, deleted left on red in somebody's inbox. But here's the good news. A hundred percent of pizzas get eaten. The data shows it is extremely rare for a pizza box full of delicious pizza to be ignored by people. That is extremely rare. Extremely rare. Zero percent chance. So get this. Pizza Hut hatched up a scheme. They're going to put your resume on one of their pizza boxes. And then,

deliver that resume pizza to wherever you're applying. We repeat, it's a pizza box resume. Dropped off at your dream job. Here's how it works, Yetis. In New York City, you can order a pizza from Pizza Hut. And then you add the address of your ideal employer. And then you upload your updated resume. And then Pizza Hut will print that resume onto the box and drop it off at that ideal employer.

Hear us out. If you're not from a feeder school, but you think you deserve a shop for that internship, I'll then send a recruiter that stuffed crust CV. If you're in that final round super day of interviews at J.P. Morgan, send a pineapple pie with your resume on it to Jamie Diamond. Jamie will see your resume because there's a fresh pizza right there. Apparently huge Hawaiian pizza guy. People don't know that, but Jamie. One large pizza with pepperoni and a side of career ambitions. You know what? You got to give dough to make dough. If we received a pizza with a resume on it, we'd eat that pizza. Oh, and then we would consider hiring that pizza. Because nothing screams, I'm motivated.

like mozzarella, marinerara, and meatballs. And 2,000 calories of delicious. Haya this man! Jack, let's hear on 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 think 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. Microsoft needs electricity so badly that they're restarting three-mile island, the nuclear power plant. In the era of AI, the tech industry has a B-Y-O-E policy. Bring your own energy. Yeties, earlier this year, Jack and I found a fascinating stat about artificial intelligence. AI requires 10 times more electricity. than the rest of the internet does. Yeah, can you sprinkle on a little more example context for us, please?

A query on an AI chatbot requires 10 times the juice to compute that query than a typical Google search does. For example, if you want to know Jack's mango smoothie recipe, you can use chat cheap-t or you can Google it. But chat chepti is going to require 10 times more energy to give you the answer. Although neither of them will have the answer because it's a private recipe. Either way, this AI situation, it's really awkward. for big tech companies like Microsoft. Because in 2020, Microsoft pledged that they would be carbon-negative by 2030. But because of all this AI, Microsoft has gone in the opposite direction.

They've increased their emissions since 2020 by 30%. That one's gonna hurt. Now, yet he's, that's the context. But here is the news. Microsoft is reopening the site of a U.S. nuclear meltdown. Ah, three-mile island. It is a nuclear power. power plant in lovely Pennsylvania, the site of the scariest nuclear incident in American history.

In 1979, there was a partial meltdown that released radioactive gas into the environment. Yeah, Three Mile Island was actually the third scariest nuclear event in world history. Behind Chernobyl and Fukushima. But we should point out, not a single person died due to that Three Mile Island meltdown. In fact, not a single person has died on American soil from nuclear, which by that measure makes oil and gas a much more dangerous energy source. So today, Microsoft is paying an energy company to restart Three Mile Island, loan it up, guys, which has been closed since 2019.

Turn it on. You just got to plug it in over there. Yeah, plug it in. There's a plug. I think it's more than unplugging it and plugging it back in. You're right. There's at least two or three plugs. But once they figure it out, Microsoft is going to purchase 100% of that nuclear power to power their AI data centers. The $16 billion economic impact of this plan will help the news go down with the Pennsylvania locals. But Yeties, climate change has made nuclear sexy again. It's a carbon-free

electricity that works with no sun and no wind. So once the regulators approve this deal, three-mile island's nuclear juice will power your next chat GPT conversation in 2027. But it won't tell you Jack smoothie recipe. I was about to say maybe it will know by then. So Jack, what's the takeaway for our buddies over in the tech industry? In the era of AI, tech is becoming BYU. Bring your own energy. Yeties, one of the biggest constraints to meet the growing AI demand is a resource. Energy. So if a tech company wants to lead an AI and limit their carbon footprint, they must BYU. Now, Jack and I have covered startups developing mini-nukes with tech companies as eventual

buyers. And we've covered that Amazon is the biggest corporate buyer of wind electricity in the entire world. That's an early prediction here by us. Prepare for a Snapchat run nuclear power site by 2030. Like tech companies bought media companies for years. Next, we expect tech companies to buy energy projects. Because in the era of AI, tech is becoming B-Y-O-E. Bring your own energy.

Ideally, non-carbon energy. For our second story, the biggest legal battle right now on Wall Street is Squishmellows versus Buildabare. Squishmallow. The adorable, cute, soft pillow toy thing, is surging thanks to one simple word. Yeah, it is. Jack and I were talking about it. And you know what? We all survived one of the great economic bubbles of all time.

Not the dot-com bubble. The Beanie Baby bubble. Oh, the Beanie Baby bubble. Jack, my Bucky, the Beaver, Beanie Baby, dropped in value 90%. I sold it to some guy at Lehman Brothers. You did? I actually did.

Well, there's a hot, new, collectible squishy toy de jour that we want to talk about. And Jack and I got curious about that fastest growing Toy in America, that's named the Squishmallow. It's part toy, part pillow. Each squishable toy is the shape of an animal, a person, or a movie character. It kind of looks like a hugable emoji Pokemon cloud with a personality. That's what I can think of, Jack. They're very huggable and snuggledable, and they're available in different pillow-shaped sizes.

It's like an emotional support toy pillow. But this company is doing some very, very serious numbers, aren't they, Jack? 200 million in revenue last year. That's equal to plus. Play-Doh's revenue and Nerf's revenue. And it also happens to be owned by the most famous investor in the world. Warren Buffett's Berkshire Hathaway acquired Squishmallow's parent company. In fact, there is even a squishmallow of Warren Buffett, the investor.

You can purchase an 8-inch fluffy toy of the 94-year-old Warren Buffett. But, spoiler, they're sold out. You want to own it. In case markets start falling, you're going to want to squeeze a little 8-inch Warren Buffett. In the meantime, yeties, you can't grow a business that. big and that fast is Squishmallow without a little bit of drama. So Squishmallow is protecting itself in court right now. Here's the news. Squishmillo filed 36 lawsuits against knockoff squishy toys, including a big

one against publicly traded Buildabair. Now, Buildabair happens to be the largest teddy bear company in the world, and Buildabair recently launched something called Scoocher's pillow toys. Buildabair's fastest growing toy, it looks, it feels, and it shaped just like a Squishmallow. So Squishmallow sued Bill DeBarre. But the argument is turning out to be hilariously difficult to make in a court of law. Squishmallow wants to claim that they have legal protection for their product. But how do you patent plushness? And how does the law of the land define cute, Jack? Squishmallow's lawsuit cited their unique velvety texture and marshmallow feel. But it is

notoriously difficult to illegally articulate a sense and a feeling. Let's hope the judge isn't a grouch. In the meantime, Bill DeBarre's response is that Squishmello is trying to monopolize pillow-type toys. And that's too big a category to monopolize. And in response to that, Squishmello said, shut up. Yeah, it all seems like a pretty childish lawsuit. In the meantime, though, Squishmallow is growing faster than any other toy, and they're close to $300 million in revenue. Jack, what is the takeaway for our buddies over at Squishmallow?

There is one word that can add billions of dollars in value. Original. Yeties, Squishmellows may lose all 36 of their patent lawsuits, but that could still be okay. Because Squishmallow recently added one word to all their marketing, and that word is original. Original raised pizza. Original Milano's cookies. And now, original Squishmallow Toes. Adding original to the product, it's a low-cost way to signal product superiority.

Original implies that all competitors. are knockoffs and that your quality is higher. Original basically creates brand equity with just seven simple letters. In fact, the Journal of Consumer Research shows that people have a higher willingness to pay for products with original in the label versus products that don't have original in the title. It's like we've said before. There is more money in adjectives than there is in nouns. The word original may be one of the great marketing trick shots of all time. Now a quick word from the sponsors of the original Best One Yet podcast. For our third and final story, with John Donahoe out as Nike CEO, we're doing an autopsy

on his failed five years at the helm of Nike. Nike's mistake had nothing to do with sneakers and everything to do with stores. It was one big mistake. But, Jack, there is a takeaway we've said before. we have said that Nike's greatest skill isn't making shoes, it's scouting talent. Nike has had some great talent. Oh, great talent. The founder, Phil Knight, was the CEO for 40 years.

He signed Michael Jordan. Mark Parker was the CEO for 16 years, and he signed LeBron James. John Donahoe was the CEO for less than five years, because he signed himself out of a job. The Nike CEO, John Donahoe, is out after less than five years, and Nike stock jumped 8% on the hope that that's a turnaround. We're not here, though, to talk about the new guy, Elliot Hill. No, we're not. Good point. Good point. He's the 32-year Nike veteran, now CEO. You know what you're going to get with him. Pretty straightforward. We're here to do an autopsy on John Donahoe's errors so that we don't repeat him in the future. Oh, we're here to whip up an obituary on his

Nike era that saw the company fall. It was a tough era. Nike stock is still down by 60% from their all-time high because of his hubris, some bad timing, and one big wrong bet. One big, bet that we can all learn a lot from. But yet he's, in case you don't know the full IMDB of John Donahoe, John Donahoe worked at both eBay and Bain after he went to Stanford Business School. And those two experiences, eBay and Bain, they led to one huge bet while he was at Nike. Take Nike direct-to-consumer. The moment Donahoe took over in 2020, his consulting brain wanted more direct-to-consumer sales. And why is that, Jack? Selling Nike's through stores like Footlocker is less profitable for Nike because Foot Locker takes a cut. So Donahoe went to like his Bain Slide 303

with a big red arrow and noticed, you know what? We should sell more through Nike stores and Nike.com and the Nike app and we would earn a higher profit. And you know what? That makes a lot of sense. He started doing it. But then one year later in 2021, at the height of the pandemic, Donahoe's eBay brain started kicking in. And again, this made sense. Digitization, e-commerce were accelerating during the stuck-at-home era. So he went full. direct-to-consumer with Nike. Nike started pulling sneakers out of Foot Locker, out of Dick's sporting goods, and out of other third-party sneaker stores. He was making a big bet that the Nike brand was so big, so powerful, so, oh my God, I gotta have it, that consumers would follow Nike

wherever they could find it. When a customer showed up at Foot Locker and discovered Nike wasn't there anymore, that customer would open up the Nike app, download it if they have to, and then order Nike's through the app. I'll get my Air Jordans the new way with Nike. That's what Donahoe thought would happen. And Jack, what exactly did happen? Not that. Good point. That big bet he made about Nike and people coming to it was wrong. And what we can learn from it is our takeaway. So Jack, what's the takeaway for our buddies over at Nike? The market is like a ball pit. If you leave a void somewhere, someone's going to fill it in. It is, Nike pulling out of third-party stores was a colossal mistake. In fact, it was actually kind of a double whammy. Customers did not follow Nike. They bought something else at Foot Locker instead. And guess what they did buy?

What did they end up buying Jack? They bought Hokka. They did, but they bought Hyoka. Hoka filled up all the old shelf space that Nike abandoned at Foot Lockers. Get this. Nike's two toughest years for sales were actually Hoka's two best years for sales. Once Nike realized this mistake, they came back to Foot Locker with their tail between their legs, like an X trying to get back together.

Take me back, maybe. I didn't mean it. I'm here. You can have all my shoes. You had already found a substitute pair of running shoes on those shelves. It was Hoka. And Nike had lost its cool factor. So Nike's mistake, the past four years, it had nothing to do with sneakers.

It had everything to do with stores. Because the way Jack and I see it, retail stores are like a ball pit. If you leave a void, other balls are going to spill right into it. Jack, can you whip up the takeaways for us to kick off the week? Microsoft has hired Constellation Energy to restart Three Mile Island, the infamous nuclear power plant. Because in the era of AI, it's B-Y-O-E. Bring your own energy.

Squishmelo is suing Buildabair for patent infringement for their blatant knockoff product, Scoooshers. They're also adding the most valuable word in marketing to their name, original. And our third and final story is Nike. Their CEO is out. And the big blunder was the failed attempt to go full direct to consumer.

The markets, they're like a ball pit. If there's a void, the competition is going to fill it in. But Yeties, this pod's not over yet. Here's what else you need to know today. First, Disney is reportedly done with Slack. Disney will stop using Slack because Disney Slack got hacked. 44 million internal Slack messages for Disney were leaked, as well as a terabyte of spreadsheets and PDFs. Disney executives like coldly chatting about cost cuts and layoffs on Slack, that's not a good look. That's not the most magical place on it. And second, stop. and Intel jumped Friday as the beleaguered chip company has merger and acquisition rumors going around.

Qualcomm is thinking about merging with Intel, which would be the biggest U.S. chip merger ever, and would sound fantastic. Dun dun dun dun dun. And finally, JetBlue is opening up their first lounges in New York and Boston. Remember, Delta opened up a luxury lounge in New York that has free massages and Michelin-starred food. And Alaska Airlines officially merged with Hawaiian Airlines. just last week. A lot going on in the skies. Yeah, so the big four airlines of the United States are getting more competition from number five and number six. Now, time for the best fact yet. This one

sent in by Savannah Westwood in lovely Orlando, Florida, as she puts on some cashmere. It's officially fall, so we should talk about pumpkins. Well, we should bring up that you don't realize where all those pumpkins are coming from, do you? Morton, Illinois is the pumpkin capital of the world. they produce more pumpkins than anywhere else. Yeah, the small village in central Illinois is where 85% of the world's canned pumpkins are actually packaged. They don't just grow pumpkins. They can pumpkins.

Yeah, they're packed at the Nestle's Libby's plant because in Illinois, they don't just do logistics. They also do root vegetables. And they don't do jackalachians apparently. Yet. Yeties, you look fantastic to start the week. And if you haven't yet, click to follow us right now, wherever you're listening, and that way you can get T-Boy every single day.

Nick and I, we're serving up the best one yet tomorrow. Yeah. Sorry. Original best one yet. And if you have a wild way to send a resume that does or does not involve pizza, we want to hear it in the comments. Nick and I, we'll see you tomorrow. Not everyone reads a resume, but everyone eats a pizza.

Before we go, a happy birthday to legendary Yeti, Tyler Mayo, turning 13 down in the Choo-Choo-Chapital of Chattanooga, Tennessee. birthday to Ward Dodgers in Wake Forest, North Carolina. And Richard Blythe is turning 40 in Bristow, Oklahoma. He's always jumping in T-boy style to the comment section, and we love seeing you there, Richard. Happy birthday to Lindsay Lava in Tucson, Arizona, who's celebrating with hubby and both baby boys. And Peter Freske is turning 30 over in Seattle, just not only had a birthday, also got engaged and has a new job.

This guy living his best life right now. Peter, happy 30th birthday to Summer Pain in Memphis. Tennessee. And congratulations to the team and headline that raised a nearly $1 billion venture capital growth fund. They're crushing it right now. They're mocking Schnell. Celebrate Ecutonia. And Frank and Sandra Rodriguez in Victorville, California, have got a lovely one-year anniversary. Congratulations to Noah Wolf in Phoenix, Arizona, for becoming Jane Valardi's top monthly donor. And Anonia Singh in New York City is celebrating a fantastic birthday and is getting married in just two months. And to anyone else, celebrate something today,

make it a T-boy. Celebrate the wins. This is Jack. I own stock in Amazon, Berkshire Hathaway, Disney, and Intel, and Nick's son owned stock of Nike and his 529 savings point out. Now that I think about it, on the Beanie Babies, I'm like, as I'm like 8-year-old, I realized I was like highly leveraged because I think I was like, I was just taking my parents mind Beanie Babies. It's get forgiven. I remember pitching ideas like, yeah, this one's going up.

This one's going up. You were a highly levered. Credit default toy.