The Best One Yet - “Work From Work (still a thing)” — $43M for Pizza-nomics. Google’s 12-mile-high wifi. Commercial Real Estate’s WFW problem.

Episode Date: May 14, 2020

Google’s secret Loon project just graduated to deliver wifi via balloon globally (and we’re thinking it’s a potential rare double-profit-puppy). Pizza ordering platform Slice is doing the opposite of all the delivery apps — it’s all about pizza-nomics (the unique economic principles of pizza joints). And while the world is straight-up WFH right now (Work From Home), we’re looking at the publicly-traded companies that are straight-up WFW (Work From Work).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. And this is Snacks Daily. It is Thursday, May 14th. Nick, have we filed to trademark the word snackion? Because this is Snackion packed once again. It's the best one yet way better than what we whipped up yesterday. Now, Stock sank yesterday as the chairman of the Federal Reserve said that damages from COVID-19 to the economy could be permanent. Also threw in a not-so- subtle nudge to prepare more rescue funds from Congress. Hey, Congress, please. Yeah, throw a couple more trillion on the tab. No big deal. Unclear who's paying for that. Definitely not happening on Venmo. Jack, our first story, please. It's a bird. It's a plane. It's a loon. We're talking the most majestic animal in Canada. No brainer, it's a loon. It's always loon. The answer is usually loon when it comes to birds. It's also the secret Google project that's delivering Wi-Fi from a giant hot air balloon like a million miles off. A little less secret right now because they just came out with a big contract, signed, printed, sealed delivered. And we think Loon could be a potential double profit puppy for,

Alphabet. Rare. You do not see that in the wild. For our second story, yesterday we mentioned all the delivery apps out there fighting over your food. He got burgers. He got seafood. You got Indian. You got Burmys. You got Italian. Name them all. You got them. And yet Slice just raised $43 million to do just one thing. Pizza. Pizza. Slice snackers is a case study in young platforms undercooked. For a third story, work from home this, work from home that everyone's talking about WFH. Honey, got to book out the closet for that 2 p.m. conference call. Disconnect your devices. 12 time we've said ony in the last week, by the way, Jack. But no one is talking about work from work. Work from work, not work from home. Snackers, we're checking out how work from work companies are doing while you're swapping cubicles for living rooms. But before we get to that, Snackers, we usually give you a heads up if you're running a Snacks

challenge. Yes, the Snacks Challenge. That's when you're running or you're walking or you're plank in or you're sitting while listening to the Snacks Pod. You're doing something. We let you know we're a little over halfway through so you can turn around. So attention, Snackers, we're a little over halfway done with Ramadan. Ramadan is not just a Muslim holiday.

It's actually an entire month on the Islamic calendar. Love this idea. It's a Hall of Month. It's a Hall of Month. Not a holiday. It's also an intensely physical test of your program. perseverance and your patience. Snackers, we're talking a 30-day Muslim holiday when you can't eat or drink from sunrise to sunset, aka most of the day. No food, no water, no drinks all day.

The only kind of snack and aloud is listen to this podcast. It's pretty much a juice cleanse, but with no juice either. Now, I did one day of Ramadan back in 2017. It was brutally challenging and made me ridiculously thankful for everything. It's a powerful time for Muslims to show increased spirituality, charity, and generosity. And it's also an incredibly admirable thing. Snackers celebrating Ramadan, you're a little over halfway through Ramadan. Less than 10 days left out of 30, and then you can binge all day, any day, all the time. Let's get to our three stores.

You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way. The snacks are about to hear ain't food. It's ear candy. They don't reflect the views of the Robin Hood 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 about security.

Right. Snacks is digestible. Business news for you. Robberhood Financial, LLC, member Fenra slash SIPC. For our first story, Alphabet's Loon just expanded commercial internet to Mozambique, and that's important and key. And this could be the first ever two-headed profit puppy we've ever seen. Never seen this kind of thing. David Adderbro would freak out if he'd tell I was coming. But Nick, what the heck is Loon? Snackers, you know, Alphabet is Google's parent company. And it's basically made up of like 75% Google, 15% YouTube, and then a bunch of other companies filed under OtherBets.

Loon is one of Alphabet's Other Betts, along with the other Save the World projects that the Google founders love whipping up. They definitely get their own Patagonias over at Google for the like Other Betts Department. They definitely got Patagonias that are like dolphin safe and carbon positive over other bets. Now, Snackers, last week, we noticed that Loon had signed a deal with AT&T to beam internet down to natural disaster areas like Mary Poppins. So let's say a hurricane destroys some local infrastructure and nobody has the internet. Loon sends a hot air balloon up into the air and then casts internet down to people until the infrastructure can be rebuilt. Sounds way more

movie plot than actual company. That's kind of what Google does with these other bets. It's an actual company and it also has deals in Kenya, Puerto Rico, and Peru connecting under served communities that are getting like one bar at best. There's no way they're sticking a cell phone tower up in Machu Picchu. So this week, Loon signed a deal with Vodacom, the main telecom company in Mozambi. And Jack and I thought that was a critical development. So let's talk for a moment about toweromics, aka cell tower economics. Cell towers make sense in densely populated areas where a ton of customers can come from the cell tower. But rural areas tend to get left out. So get this, Snackers. Travel 12 miles up in the air,

aka twice as high as airplanes like 60,000 feet, and they basically just hang out around there with Wi-Fi. 12 miles up into the air, that's like borderline space. I don't even think you call it the sky anymore. It's that ambiguous part of your science textbook that just looks cold and light blue. And it's so high up that loon balloons, even in rural places like Vermont,

can connect as many people as like a single cell tower in New York City. So this is how it's going down with the latest Loon deal. Vodacom is going to shoot one big signal way up to a Loon balloon, 60,000 feet up. And then Loon distributes that signal down to millions and millions of square miles below so that people can connect to 4G. Boom, suddenly 4G cell service becomes economical, even in rural areas. It's a very sci-fi business model, like the Death Star, but kind of like the opposite of the Death Star.

It's like the Lifestar. It's giving Hans Solo the ability to surf the web. So, Jack, what's the takeaway for our buddies? over at Loon. 3 billion people in the world don't have access to the internet. And Loon can make money twice if it finds a way to connect them. Enter the two-headed profit puppy. So Snackers, Alphabet gets paid by Vodacom in this deal for helping expand Vodacom's coverage. But then Alphabet can make even more money once Mozambique's start actually using the internet that Loon cast down. And that's because just 21% of Mozambique's population has access to the internet. And get this, only

508% of the world's population is clicking as well. So if Loon can find a way to send 4G signal to the smartphones of the 42% of the population that don't have the internet and some percentage get low-cost Android smartphones, then those people will start Googling for things on their smartphones and seeing Google ads. Emphasis on the Google and the Googling. There you go. Loon just made a bunch of money in the first place and then connected one or two billion people so it can make more money for alphabet. AKA, we just saw ourselves a two-headed profit puppy. For our second story, we got our almost unicorn of the day, slice.

They do pizza delivery takeout tech. And they just raised $43 million to completely avoid the dirty promo code-filled delivery wars. Jack, can you whip up like an early takeaway for us on this one? New York City pizza slices deserve historic preservation. We're talking Danies and Queens or Joe's in the West Village. Or how about the Detroit-style pizza making its name? I'm telling you, Nick, Southeast Michigan, it's got Domino's in Ann Arbor and Detroit-style pizza. Jack and I split one at Emmy Squared.

You had to lift with your legs, not with your back when you pick that slice up. Slice was created on the 5th Borough, Staten Island by this pizza joint called My Pizza. It was an app that it created for itself, but then it shared the wealth and now 13,000 pizzerias use it. Basically, the guys over at Slice are doing everything but flip the pie and bring you the box. First, it's got an app to help people find pizza that they can, order, just like Uber Eats or DoorDash, you can figure out where you're going to get your delivery. But they're really focused on helping out the pizzerias. So like they're helping you create the website,

optimize the menu, put the pepperoni up first, do the SEO. And most importantly, give you access to an app with a lot of consumers on it. I've downloaded the app. Have you downloaded the app? We went full snack style on this one, still winning for the pizza tour. Now, one downside to slice is you got to figure out your own delivery. Like they're not going to deliver it for you like DoorDash or Uber Eats. That is a key distinction snackers. It's kind of like Domino's figured this out themselves. They're assuming you're covering getting the pizza from point A to point B. But the upside, like Nick and I mentioned, we've both downloaded the app. If you put your pizzerie on Slice, you see that sales tenderized by 40%. Now, Snackers, we're going to go a little back in time

to yesterday when we told you about the big four companies in the food delivery wars that are only focused on like marketing and expanding to groceries and fighting and discount codes and fighting and expanding in discount codes. It's basically a royal rumble among these four apps. And Slice is not getting in the They're staying lean, they're staying focused on their own thing, pizza. So Jack and I were fascinated. If they're so focused on pizza, what is the strategy behind this? Slice recognized that pizza joints are a unique type of restaurant with their economics. Case in point, pizza joints are already set up for pickup and delivery since before apps were a thing.

Before the internet, I was ordering pizza delivery in Brattleboro, Vermont with a phone. They have delivery guys. Completely different than like the French Bister down the street that's still fumbling with phone boxes. And that's why a whopping 90% of, of pizzerias in America have been open and remained open in coronavirus, because takeout and delivery, that's what they do. The second key to slice the strategy is that big aggregators like DoorDash overwhelm you the consumer with options, and he end up struggling to discover the restaurants as a result. If you want spicy food, you're looking at Thai and Vietnamese and Chinese. If you want carbby food,

you got pad Thai pasta, pasta from the north or south of Italy. Lots of options. Overwhelming, it's like trying to start and watch a Netflix show and the next thing you know, you're three hours and nothing's been on. Slice doesn't want to overwhelm you. They're just going to show you pizza, and they'll let you pin your favorite pizza joint right to the top of the app, so you're not seeing like some advertised other competitor.

The third key to the FocusLyce strategy that fascinated us, aggregators right now are facing fee backlash. We've all been there. You order a family size pie. You get a dozen chicken wings. You get a two liter of Diet Pepsi. Been there? Looks like it's going to be $40, suddenly it's 72.

You're like, oh, wait, I forgot about the service fee, the delivery free, the delivery free, extra fee, the food fee, and the fee fee fee. There is a whole bunch of backlash at the fees that these delivery apps are taking because it crunches restaurants and it crunches our wallets. So Jack and I notice that some cities right now in the coronavirus economy are capping fees on delivery apps at like 15%. Slice is thinking, we don't want to be greedy. We don't want a new law being created to stop us. They voluntarily capped their fees at $2.25 per order. So Jack, what's the takeaway for our buddies over at Slice? Oh, and by the way, Snackers, if you're on a snacks challenge, we're about halfway done,

very close to halfway. We're a little more close to halfway than yesterday when we were like, probably more like two-thirds. Round up or round down, we're getting to the takeaway on slice. Platforms need both buyers and sellers, but you have to conquer one before you start the other. Snackers, there are two sides to every platform, and this slice platform has pizza joints on one side and your mouth on the other side. Another famous platform is Airbnb. On the one side, they have homeowners who are renting out their place. Great people. On the other, you have vacationers who need to book your place. Also great people. So right. Now, Slices like a lot more focused on convincing pizzerias to sign up, we notice.

They're doing that by offering perks, website help, SEO, and other techie services to improve your business. So Jack and I are looking at this platform play and we're like, you know what? The next phase is going to be focusing more on the consumer side, us. They should probably start buying ads in the app store. So when I search Slice the pizza app, I don't see an ad for DoorDash first, which actually happened. Expect loyalty points, perks, and stuff focused at the eaters.

For our third and final story, work from work industries just got a panic attack. Not work from home, work from work. WFW. We are looking at the major problems for businesses that rely on office buildings being full of workers. Now, Snackers, you remember yesterday, we covered Twitter's huge decision to let people, if they want, work from home, you know, casually, forever. Then at like 10.30, we were reading the New York Times and learned that three of the biggest tenants of office space are kind of thinking the same thing.

Also, yes, that's correct, Jack and I jump into the New York Times for a little good night before bed reading over here. We're talking Morgan Stanley, J.P. Morgan Chase, and Barclays, three huge investment banks that just love New York City. You know, the Midtown skyscrapers with the big lobbies where you've got to show two forms of ID and, like, smile on everyone because it's so shiny and marveling. For some reason, you have to put your bag through an x-ray machine, but these three companies, they have hundreds of thousands of cubicles among the three. We're talking the old school kind where you can like stick a little tack in there and, you know, put up the stuff to really design your desk air. And the New York Times found some PFWTM at those three banks. We're talking people familiar with the matter. Who said that it's highly unlikely that all their workers will ever return to those buildings.

Another sign of this flexible future where some are staying at home, some are going to the office. Now, work from home has been cool for Zoom. Yeah, video conferencing. Cool for Wayfair. You know home office furniture. You need it right now. You're kind of desperate for it right now. Even pretty cool for companies like LLB.

Pajams and sweatpants. It's the new casual... It's what you're wearing all day. But what about the work-from-work industry? They've been kind of forgotten through this COVID-19 crisis. We're talking not work-from-home, work from work. We're looking at a few industries whose profits depend on workers working at work, not at home. For example, let's talk commercial real estate. Vornado Realty Trust is a publicly traded stock. It's one of the biggest landlords of office buildings in New York City, and its stock is down 11% in the past two days.

Snackers, if you work in New York City, there's like honestly a 25% chance. Vornado is your daytime landlord. How about office supply companies like Office Depot who's still trying to sell your printers? The stock is down 9% in just the last two days. Finally, catering companies, events companies, janitorial services that work at office buildings. We're talking mostly small and medium-sized businesses, but they're going to be needed less. Finally, catering companies, events companies, janitorial services that work at office buildings. And then they also rely on taxing all those other businesses who we just mentioned. And then finally, cities, They kind of need office buildings full because they rely on real estate taxes.

But in the meantime, all those office spaces we just mentioned, that space still exists. And those taxes could all go down if people start working at home and work at the office last. So Jack, what's the takeaway for our buddies over in the work from work economy? Fewer workers in offices is somebody's problem. We just listed them out. But it's also somebody else's opportunity. Snackers, like a phoenix, entrepreneurs tend to rise out of someone else's ashes. and what we're looking at right now with the corona economy is a lot of ashes. After COVID-19 is over,

we may have a surplus of too much office space in a bunch of cities going forward. And that means companies that would have been using up a lot of that space may be saving money on rent. Instead, that's good. And if rents go down overall for office space, which they probably could, maybe some restaurants could survive in places where the rent used to be too high. And then startups could end up spending less of their funding on rent, focus more in the product, and then more in innovation, that's also good. All those things sound pretty good. So this story, There's some winners and there's also some losers. It's not just losers when it comes to work from work.

Jack and you whip up the takeaways for us over there. Alphabet's loon sends balloons 12 miles high and then cast down 4G signal. Alphabet makes money with the balloons and then makes money with the Googling post-balloon. Slice is basically DoorDash, but it's focused on just pizza and it is way less vicious on the fees. It's signing up pizzeries first, then it's going after you and us. Our third and final story, the work from work industry. That whole industry would suffer if work from home becomes permanent. Honestly, Snack was Jack and I had to rehearse saying work from work about 50 times.

It just doesn't roll off the tongue, but it's a beautiful concept. Workers should work from work. But every challenge is someone else's opportunity. Now, time for our snack fact today. This one's sent in from Alex Hoss in lovely Stafford Springs, Connecticut, which sounds like a hedge fund. That also sounds like a town in Gilmore Girls. For sure. Turns out there is alphabetical.

bias in the stock mark. Yeah, get this, Snackers. 11.4% of S&P 500 companies have a ticker symbol that starts with the letter A. All right, I'm thinking alphabet, Amazon, it's all I got. Oh, great. Now we got to disclose your own shares of Amazon. Also, we want to say Ola to Liam, a future snacker who just celebrated his first birthday in Danville, New Hampshire. Liam, your dad Jonathan's going to play this for you when you're a lot older. Also, when you are older, we'll be doing this podcast and we'll hit you up then, too. We will still be doing this podcast and we'll give you another happy birthday shout-up. Liam, we will be there for that podcast for your birthday.

Snackers, we love if you would share your favorite part of this podcast with a buddy and ask them, H-Y-H-Y-S-D. Hey, buddy, have you had your snacks daily? We'll see you tomorrow. If you know, you know. This is Jack, I own stock 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.