The Best One Yet - WeWork’s IPO is really MeWork, JPM shuts down its cash app, and Waymo opens up its self-driving brain

Episode Date: August 22, 2019

We dove into WeWork’s IPO paperwork (its S-1) Snacks style. JPMorgan is shutting down a payment app, but it’s a major lesson on how to quit something smartly. And Waymo (owned by Google) is sharing its self-driving car knowledge to make self-driving actually happen.Learn 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. This is Snacks daily. It is Thursday. August 22nd. Snacker is almost Friday, and this is the best one yet. This is a TBOY. What have we got going on?

By the way, markets jump. Markets trickled up. They spin up a little bit. We have three great stories. It's a wonderful mix. We work. It released its IPO paperwork last week. We finally were able to digest like all 200 pages of that strangeness.

We cut through the weirdness, and it's a great example of a key term, unit economics. We work. Let it sink in. Second story, J.P. Morgan Chase just shut down its payment app. And it's a great lesson from the tech industry to life. You can make this a tattoo. Here it is. Fail fast. Fail faster. Sticking on a buy-saint. Third and final story is Waymo. This is Alphabet Self-Driving Car Company. Very cool. It's opened up its brain for all to see. It's like it's extended office hours any time for the whole self-driving car industry. When you can't beat them, kind of join them. Open up your brain.

Now, before we jump into that, we found something fascinating and we felt like we had to share this with you guys. Well, interview prep is a big industry. It's the worst. You can do it yourself by, like, sending your resume to friends, asking them to market up. Relentlessly, Google online everything about the company. Don't take your friends' feedback personally about your resume. Yeah, LinkedIn stock like 12 people. It's a little creepy, but it's the right thing to do. But we can't make this last one up. There is a service out there from some guy who used to work at Amazon. Former exec. He's inviting you over to give a mock interview for Amazon. And get this, it is available on Airbnb. So you can search for this on Airbnb and find mock Amazon interview at this guy's house for a cool $4,600.

This is one of those experiences, right, listed on Airbnb? Unforgetable. Anxiety packed. It's five hours long. Food and drink are included. But since it's Amazon, that food and drink is going to be like water and carrots because Amazon is the most frugal company out there. Can I get a side of cardboard with that, please? And so you'll get to experience like the real life questions that Amazon asks its candidness.

Great second date idea. Now, you're wondering what kind of questions they are? We got some wonderful roundups for you. The first kind of common Amazon question, design a payment system. I'd say, thank you for the interview. I'm going to leave. Yeah, doing their job for them. Second, how would you solve problems if you were from Mars?

You got a good answer to this one? Yeah, with an oxygen tank. And then third and final one, we thought this was a great Amazon interview question. Tell the story of the last time you had to apologize to someone. Whoa. Empathy. That is deep. Amazon.

Let's hit our three stories. You tuned in the snacks daily. We spoke to the lawyers. The snacks you're about to hear. rain food is air candy they don't reflect the views of the robberhood family it's all informational just so you know 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 jack let's get out the standing desk we work prepared its IPO paperwork it wants to IPO next month and we have spent the

few days pouring over this thing. Did we figure out the ticker symbol? Is it going to be Slack? Slack? S-L-A-K. No, it can't be work because that's slack. People, we needed to go in. So we've been reading this S-1, which is the tell-all document that tells investors everything they need to know before deciding whether or not to invest. Literally, it's like, what are you doing today, Jack? I'm reading the S-1. Jack, it's Wednesday. What do you know? I'm reading the S-1. It's a long, long document. It's pretty thorough. We read it for you. Now, this company is nine years old. They've got a $47 billion dollar valuation and they're the pioneer of

co-working. Yes, they're also based in New York City. One of the few IPOs this year, not based in the Bay Area of California. Now, you may have heard about this, but we want to go deep on it. The S-1 that we jumped into Snackstyle, the critical filing document, it is highly strange for we work. Flip open to page three. You see something

like a mission statement. We dedicate this to the energy of we, greater than any of us, but inside each of us. Highly Yoda-esque. You know you sound like. Space for my startup I need. A couple pages later, our mission is to elevate the world's consciousness.

That's what they actually have there. That's false. Some lawyers actually said that was okay to put in there. Your mission is to make money off startup workers who need space. What legal team signed off in this? We have no idea. Then the word community appears 150 times in the S-1. Again, very curious about the lawyers in this.

So this isn't really the we company, which is the official name. It's called the we company. We work is just one division of we company. It's really the me company. So true. The me in this case is Adam Newman, the co-founder and CEO. Adam Newman was mentioned 169 times in the S-1. The average CEO is mentioned only 25 times in those IPA docs.

I need to correct what I just said. Please do. The name Adam, just Adam, is mentioned 169 times. Sounds like a flat organization. They seldom call him Adam Newman. They just refer to him by the first name. So tech. He's not sheer, but he's almost there.

50% of the voting power of all the shares after this IPO will be Adam Newman. So if he wants to do something, he just has to convince one person on the other side and then he can do it. And here's how else it's a me work. He received loans from WeWork. Adam did to buy properties that WeWork then rent it. Wow. You want another one? His wife is a co-founder of the company.

She is one of the three people on the committee that will replace Adam Newman as CEO if he dies. And the most clear way that this is really a me work, not a we work, we learned this yesterday. WeWork paid Adam Newman $5.9 million for the trademark we, which they just named the company to last year. They actually paid him for that. Yeah. He apparently came up with that name off company time. They basically got three things on tap over at WeWork. Beer, kombucha, and conflicts of interest.

Jack, what is the takeaway for our buddies over at Weaver? Now, all that shenanigans, that was a bunch of noise what Nick and I just did. The most important part of the business is WeWork's unit economics. Unit economics are key. Venture capitalists love this. That's the revenue and the cost of the most basic element of a business. So the Wii company lost a billion dollars last year, but we're interested in how much it makes on each seat or each floor or each WeWork building.

That's the unit in the unit economics. So you've probably heard that $1 billion in losses that WeWorks had so far just this year. The unit economics gives us some better context. Yes. Two years. That is a key number. That is how long it takes. each we work property to become profitable. Right. That's because they're renting, they're renovating, they're filling up the space,

they're marketing it. Those are all costs. And then only after two years of collecting rent, do they finally break even? And then it's all gravy slash butter slash frosting after that. So investors love learning about these unit economics, but we work didn't provide that much info in them in that S1. They were kind of too busy referencing Adam the whole time. There's a lot of faith and cult of personality in this IPO. For our second story, the biggest bank in the country by market capitalization value, J.P. Morgan Chase, it just failed again at something. And that's actually a good thing. Yeah, it's actually a good thing. It's actually a great thing. We're not just putting a spin on this. Are you surprised, hackers? Put this back up on the fridge. We're talking about Chase pay. That is Chase's own version of Apple Pay. You download the Chase app and you can pay by tapping your phone or flashing a QR code. So here's the actual news. J.P. Morgan has this fancy app? It's shutting it down next year. There was a very simple problem. Not enough people were using Chase Pay. Chase Pay never just, it never became a verb. It was never like, hey Julie, Chase Pay me for the daqueries. No, really wasn't. Now, a caveat to our announcement we just made,

true. Chase Pay will continue to exist, but only online as like a quick pay checkout option like PayPal. Now, Jack and I were diving into this one and we found a stat that really sums up the situation perfectly. 70% of online merchants accept PayPal for your payments. That's good. That's great. That's really strong. But less than 1% were accepting Chase Pay. It really just never caught on like the word fetch. Again, the verb thing. So, big banks like to call themselves tech companies. Just yesterday.

Yep. We talked about Goldman Sachs. Yeah, we did. Partnering up with Apple. I was here. Pretty impressive. But these big banks, they're not tech companies. No, they're not tech companies.

And the top engineering talent tends to be going to tech companies. So Chase Pay lost because PayPal, Apple Pay, Google Pay, and Venmo are all better. And those are all real tech companies. So, Jack, what's the takeaway? for our buddies over J.P. Morgan Chase. Failing fast is a muscle. You want to be strong. Chase's failing fast muscle is strong. We may want to cut those sounds. Now, if you're going to succeed, you need to kill projects that aren't working after you've put a lot of resources into them. Because each extra day of somebody working on a failing project is a waste. It's like angels

lose their wings each extra day. Jack, you are a poet. Now, if you're wondering about J.P. Morgan Chase, they've actually been doing this a lot when they flex this muscle. Finn, Finn is a mobile banking app packed full of emojis that was targeting millennials. They killed that project in June. What about Canadian credit cards? J.P. Morgan had them. They weren't making money on them. And they decided this month to kill off the credit cards.

And J.P. Morgan was so committed to failing fast, it forgave all those Canadians of their credit card debt that was outstanding. They're just like, we're done. I don't even want to be here anymore. When it comes to loser projects, kill the losing ones. So you can focus on the winners. For our third and final story, self-driving car companies are starting to team up to fight good fight. By teaming up, we mean sharing data with each other. And by fighting the good fight, we mean making steering wheels optional in all cars. Yes. Now, this story is about Waymo, which is the

top dog in the self-driving car race. It's owned by Google, which is owned by Alphabet. And fun little fact, it just started testing its vehicles in Florida. Yeah, because that's where there's a lot of rain, and they want to get these things in some real-life conditions. California weather is not the same as other weather. I even seen a drop of rain in like six months. I'm actually parched. Let's get to the actual news here. Waymo is sharing its giant data set from its self-driving testing with everyone. We're talking rich, juicy, terabytes of data. I'm not big bet. Really well-labeled good data that can be used. Now, this is a big deal because it means the competition can now see everything that Google's been researching on with this. We're talking General Motors.

Toyota. Nice. Honda. Big. Even Uber, it's arch rival in the Bay Area. And a bunch of professors and like PhD students at policy school, they are pumped about it. I'll tell you, class is canceled tomorrow. Meet me on the schoolyard so we can talk AI. Get ready for some regression analysis, Nick. Now, this is actually like a very serious dilemma in the business world, and we thought it was fascinating. To share or not to share.

Imagine you have a killer craft IPA recipe. Picturing the great label on this thing. You are going to protect that beautiful recipe because that's your advantage in the industry. If you're a self-driving car company, you're going to protect that tech for the exact same reason. Here's the thing. the self-driving car industry, self-driving cars aren't even happening. It's like nobody's drinking the IPAs.

Yeah, if no one's drinking the IPAs, your recipe is worthless. So car companies, they want to protect their technology because they worked hard for it. It's their competitive advantage over everyone else. But it's not happening. And Waymo just gave away its recipe for free. That is a big deal. So it's actually a big leadership move by Waymo and we'll tell you why. So, Jack, what is the takeaway for our buddies over Waymo doing their thing?

Nobody will win the self-driving tech race. if self-driving tech never actually happened. And lately, it's kind of looked like a situation like that. General Motors just postponed its launch of robotaxies. And it didn't even name a new date for when they're going to come out. And then Uber stopped actually testing its self-driving cars last year because one accidentally killed someone, unfortunately. News alert.

Self-driving tech is not developing nearly as fast as everyone expected. So Waymo is taking a leadership role here. It's trying to do something that hopes other companies will be inspired to do, too. Open up its brain. Maybe GM will open up its brain right back. You got a lot of brain fest. And together, if everyone's collaborating instead of competing, maybe they can make money faster by actually figuring this out. A lot of brains.

And then we can finally Netflix and drive. Open brains. Hey, Jack. Whip up the takeaways for us, will you please? Okay, wasn't expecting that. WeWork is strong with the force, and it takes two years of losing money before each property starts making money. It's not really WeWork, it's really more of a me work, Adam. Second story, J.P. Morgan Chase just killed its Chase pay app.

Remember, don't fail slow, fail fast. Third and final story, Waymo just opened up its data sets of robo driving for all the competition to see. Fun little fact here that could have been a snack fact. Some say that Waymo, Google's self-driving car tech, is worth $100 billion. That's a huge company all by itself, but it just sits underneath Alphabet. Feels like two-for-thursday situation, because we got a real big snack fact for you right now. Number 25 is the 25th version of James Bond. That's coming out real soon with Daniel Craig.

We just learned the title. It's called No Time to Die. I am too busy to die. I am too busy to see this movie right now. I just have no time. But seriously, though, actually, Daniel Craig was too busy. He actually got injured during this time. Yeah, he had an ankle injury while he was filming in Jamaica.

But interestingly, James Bond is the longest continually running film series of all time. The first one was way back in 1954. Yep, the actual series was created in 1952 with Ian Fleming. Ian Fleming. Great book. My good buddy, Dave Fleming. No relation. Not at all.

So Snackers loved having a little. with us today. Remember, you can also catch us on Spotify. Great place to get your snacks. Yes. Snacks is available on Spotify for sale for snacks. In the meantime, we'll catch you guys tomorrow. This is Jack. We mentioned Amazon in the intro. I own shares of Amazon. The Robin Hood Snacks podcast you just heard reflects the opinions of only the hosts who are associated persons of Robin Hood Financial LLC and does not reflect the views of Robin Hood Markets, Inc, or any of its subsidiaries or affiliates. The podcast is for informational purposes only and is not intended to serve as a recommendation to buy or sell any security and is not an offer or sale of a security. The podcast

is also not a research report and is not intended to serve as the basis of any investment decision. Robin Hood Financial LLC, member FINRA, SIPC.