The Best One Yet - ♨️ “World’s not-best coffee” — Blank Street’s brew. Porsche’s IPO principle. Germany’s firewood frenemy.

Episode Date: September 7, 2022

You thought buying a Porsche was expensive? Porsche is going public at an $84B valuation because Porsche mastered “The Porsche Principle.” The fastest growing coffee chain right now is Blank Street Coffee because their master plan is to be the best coffee… by not being the best coffee. And one of the top Googled search terms in Germany right now is “firewood” because frenemies are breaking up — Russia is cutting off Europe’s heat.$SBUX $VWAPYFollow 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. It's Wednesday, September 7th, and today's pod. Today's pod is the best one yet. It really is. This is a T-boy. Actually, you know why yesterday's pod was previously the best one yet, Jack? Why?

Because we were wearing sunglasses the whole time and no one listening had any idea. That's true. It was on YouTube. We got some nice comments on YouTube, though. If yesterday's pod sounded darker, it's because we were wearing shades the entire time. Polarized lenses for the win. Jack, what's our first story for the T-boy today? The fastest growing coffee.

chain in America isn't Dunkin' Donuts. No. It's Blank Street coffee. Blank Street coffee. They're trying to be the best coffee out there by not being the best coffee out there. For our second story, guess what is a top Googled term in Germany right now? This is wild. Germans are Googling Firewood. Firewood, because we are witnessing the breakup of two economic frenemies. Our third and final story, you thought buying a Porsche was expensive? Porsche's now going public for $84 billion. Because the way Jack and I see it, Porsche cars have mastered the Porsche principal. But Yetis, before we hit that wonderful

match. Just the best mix. I love this mix today, man. It is hot outside. Oh, it is hot. The West Coast of America just had its hottest day. And get this, 1,200 years. California is seeing its highest temperatures in a millennium. Okay, Jack, yesterday we drove across the Golden Gate Bridge, hit 102 degrees on the other side of the bridge. Nick, I'm pretty sure it's 122 degrees in Sacramento right now. Just keep rounding up. But that brutal weather, it reminds us of another strange weather phenomenon. It turns out that when the weather gets crazy, people go crazy for Pop-Tarts. According to Walmart, people stock up on Pop-Tarts right before big storms are going to hit. Before a hurricane, the number one most-bought grocery item at Walmart. It's the Pop-Tart. Exhibit A. Hurricane Florence in 2018,

Walmart shipped 350,000 emergency boxes of Pop-Tarts. to the coast. Okay, we did the math. That's over 2.1 million individual Pop-Tarts just sent to the state of North Carolina. And it's not just any Pop-Tart that people crazed before the storm. No, it is not, Jack. Of all the 40 flavors, people want strawberry pop-tarts. All right, this doesn't make any sense to us, but Strawberry Pop-Tarts sales grow 7X in the week leading up to a big weather event. Frosted grape is fine. Snicker doodles decent. Yeah, but when the weather gets wacky, you want the sympathy of a strawberry pop-tart. It turns out, Pop-Tartes are. should be a staple in any fallout shelter.

Yeah, because the Pop-Tart can survive a disaster like a prehistoric cockroach. It's not a struddle. It's a non-perishable lifesaver. Yetis, wherever you are, however baking you are, stay cool out there. And let's frost our 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.

For our first story, there is a secret of coffee chain taking over right now. And it's called Blank Street Coffee. Blank Street is becoming the best coffee by intentionally not being the best coffee. Strange phenomenon. If you're in New York City, you're going to notice like one color taking over, like a locust. Like a swarm of locusts?

No, just like a locust. I don't think individual locusts take over. No, it's just one locust. It's Blank Street, and the branding of Blank Street is Seafone Green. Seafone Green. It's like a masculine version of that millennial pink we know. It's like dripping in chill. It smells like a direct-to-consumer startup.

To me, Blank Street's logo looks like mint chocolate chip ice cream. That works well, too, Jack. Well, Blank Street, it looks like a local, independent coffee chain. and it gives off some mom and pop coffee vibes. Yes, and they have charming espresso machines that look like they're straight out of a Williamsburg artisanal roaster. So Blank Street looks absolutely incredibly local, but in fact, it is the exact opposite of small and local. In just two years, these venture hawks have opened up 40 locations in just New York City. Okay, Yeties, this is the fastest growing chain of anything in the entire metropolitan area, probably in the entire country.

And they're not cash in little $2.50 Mom and Pop tips. Oh, they are not Jack. Get this. Blank Street Coffee has raised a whopping $67 million from venture capital and private equity firms. Now, here's the deal. Nick and I wanted to tell you how Blank Street is doing all this. And really, they have tech optimized the coffee concoction with a playbook straight out of business school.

Okay. The co-founders, Isam and Vene, have optimized the three most important elements of a coffee business. Before we go on, your last. local barista, they think of themselves as an artist, right? Ah, yes, judezacro. They do the fiddle leaf artwork on the top of the foamy latte. You don't even want to drink the latte. You just want to stare at it, frankly, for 60 minutes.

Blank Street coffee pretends to be an artist, but really they are ruthless financial scientists. Darlington, Duncan's looking at them and is like, uh, no two pumps of hazelette. What's going on here? The first thing Blank Street did was optimize the price of their cups of coffee. Exactly, Jack. They intentionally priced their coffee more than Duncan donuts, but less than Starbucks. For instance, an ice latte. At Duncan, it's $3.75. At Starbucks, it's $5.50. And a Blank Street coffee, it's right in the meaty middle part of the curb at $4.25. They also optimized the real estate

of their location. They totally did, because when you walk into Blank Street coffee, they've decorated the stores with succulents to make it feel warm like a library. That's how I like to drink my coffee. But they didn't want to waste space because New York City real estate's expensive. And they don't want to give you a chair and a table for a laptop. No, the Blank Street coffee locations are 350 square feet. That is tiny. And it's takeout only because they know you're trying to get to work anyway. But it's not just the price and it's not just the real estate. They optimized on time as well. Now, these baristas dress like your Williamsburg baristas, like they have a master's degree in Machiatas. But it's not really the baristas making the magic. It's the automatic espresso

machine technology that they've put into every store for $50,000 each. The New York Times reports that these disturbingly automated machines can whip out 700 coffees per hour. Yes. Eight of them can be brewed at once by just one human barista. We repeat, one human barista is making eight coffees at a single time. You're going to break your wrist on that thing. Again, Blank Street coffee, it's not a bunch of baristas.

They're run by ruthless financial scientists. So Jack, what's the takeaway for our buddies over at Blank Street coffee? Blank Street's not the best cup of coffee. And that's the point. Okay, so Yeti's last week, I was in New York, went to the Blank Street on the Upper East Side on Madison. And here's what I told Jack after. The coffee tasted good, but it wasn't the best I've had. Well, the founders are fine with that.

In fact, they told the New York Times, they don't need to be the most amazing cup of coffee. They just need to be a really good cup of coffee. And that's the key insight here, because all of us often think, in maximal extremes. Like people want the highest quality or people want the lowest price. But not everyone is a maximizer. A lot of people are satisfacers. Yeah. So Blank Street is neither the highest quality nor the lowest price. But Blank Street satisfies a whole bunch of busy city folk in both quality and in price. They're just good enough.

Blank Street is trying to prove that you can be the best by being just good enough. They're just trying to be good enough. That's the best. No offense, Dahlene. For our second story, we just saw the end of one of the world's great frenemy relationships. Because Europe just got its heat shut off by Putin's Russia. All right, Jack, can you whip out the rankings here? Most Google term in the country of Germany, what is it right now? It's Raphael Nadal.

Okay, it's actually Raphael Nadeau. Yeah, the U.S. Open, you know, they love tennis and Germans love a back and forth. Steffie Graf, be on board. They love umbrellas over there. But the other frequently searched thing on Google in Germany right now, firewood. Firewood is like a big Google thing in Germany right now. Are the Germans trying to have a bonfire? What's going on?

Google searches for the word firewood are up 4x in Germany this year. Now, we are suffering from a summer heat wave in the States, but Germans are already focused on the wintertime? They are. And they're thinking about, are you thinking about clickety clack we were talking about before, Jack? When you light the fire on the stove? Yeah.

And then you get that. Oh, that rush. Yeah, that feeling. That's a great sound. It's extremely satisfying. It's satisfying because it's natural gas. Yeah, yeah, it is when you're boiling water to whip up an herbal tea, that is thanks to natural gas. And when you're heating your house, it may be thanks to natural gas. Over in Germany and in Europe in general, much of their natural gas to heat their stoves and heat up their herbal teas, it comes from Russia. Kind of awkward the last few months that it comes from Russia. Well, all of that changed yesterday.

Vladimir Putin said he's stopping all natural gas flows to Europe unless Europe ends their sanctions on Russia. Yeah, so like winter is coming, literally, like it's September, winter's in two months. And Putin wants to punish Europe this winter for messing with his war in Ukraine. So like winter is coming on multiple levels. We've never seen a geopolitical disaster so easily memified as this one. John Snow, do less.

Now we got to step back. For the first time in decades, because of this news, a top industrialized nation could have a cold winter. And that's why Jack and I found this so fascinating. That is why Germans are searching for the word firewood literally more than ever. They're looking for a backup source of heat if their natural gas runs out. And it's a real legitimate fear. And here's the key.

Germany gets over half of its natural gas from Russia and now that is gone. Yeah, now that Putin is flaking on Germany, Germany is turning to coal and they're turning back on their nuclear power. which is nice, Jack, but that's not going to be enough to keep Germans comfy and warm this way. And that's why the government has already ordered Hansel and Gretel to turn the thermostat down. It's a national order. If you're in Berlin, it is literally verboten to leave the lights on overnight. Yeah, German house music. It's German chili house music right now.

Check, you're going to get in that shower. It's going to be cold. You're going to mock Schnell out of the shower. You're going to mock Schnell on that frosty shower. Now, the government is trying to soothe people's concerns. So they've said they're going to prioritize residential energy and residential heat so that Hans and Franz can stay warm. But then that means that some factories are going to shut down this winter because they're not going to get enough power either. This isn't an ah yeah. This is a niche, niche.

Yeah, yeah. So Jack, what's the takeaway for all our buddies in all of the economies of the world? The world's two great frenemieships are breaking up. Okay, so besties for decades, two sets of powerful frenemy relationships, cooperated, their economies work together. Frenemone relationship number one. The U.S. bought cheap goods from China. And frenemy relationship number two. Europe bought chief natural gas from Russia.

Economically, they were friends, but politically, they were enemies. Well, the U.S. has been breaking up with China over the last couple years, and Europe is now breaking up with Russia. These two sets of frenemies are ending their relationships, and it's shaken us up into a new, less globalized world order. And the first place we're seeing it is in German Google searches for Firewood. Now a word about our sponsor, Robin Hood. A lot of Yetis don't realize how much prep work goes into this pod.

We spend hours every morning jumping in T-boy style to earnings reports, CEO tweets, breaking news, heavily. Jack and I are toggling tabs like you toggled IM Convo's in 2004. Having eight tabs open can be stressful. You don't need that, especially when invest. Robin Hood offers it all in one app. Whether you want to trade options, ETFs, or stocks through Robinhood Financial, or you want to buy some Bitcoin on Robin Hood Crypto. You can do it all on the Robin Hood app.

If you're not investing in Robin Hood yet, to get started, go to robin hood.com slash T-Boy and choose your free stock. That's robinood.com slash TBOY. Limitations apply. Robin Hood Financial LLC, member SIPC, all investments involve risk. By the way, this podcast is not owned or part of Robin Hood. We are not employees of Robin Hood. For our third and final story, Jack, can I have a moment?

of vulnerability with you? Yes, you may, always. Okay, so are we going to pronounce it Porsche? Are we going to pronounce it Porsche? Because honestly, I just alternate between the two and no one corrects me. It's Porsche. Okay. But you can call it Porsche if you want. I've met girls named Porsche. I've met girls named Porsche. Honestly, I don't know what we do. Well, as a German major from Middlebury College, I got to say Porsche. You're not giving me that much confidence, but we're going to roll with it, baby. Third and final story. Where all these companies are pulling out of IPOs, Porsche is pulling in. with a Porsche IPO.

Porsche is IPOing because they nailed the Porsche principle. First of all, Jack, best Tom Cruise movie. And it's not, a Topcom was fantastic. I watched Top Gun 2 over vacation. I loved it. Me too. On the flight. But you think it's risky business.

It's risky business. The 1983 classic, we all remember his dad's Porsche, which I think he drives into a lake. Is that right? It's a classic. He drives the Porsche to a lake. You're right. But also, he drove a Porsche in one of the Top Gun movies, too. In both of them. And Scarface drives a Porsche as well. So does Nicholas Cage and gone in 60 seconds.

You're not going to steal the Constitution unless you're driving a Porsche, Jack. But the most American thing that this German car company can do is have an IPO. Well, Porsche's parent company, Volkswagen, just confirmed that the Porsche IPO is happening. Porsche is going to go pump. Volkswagen is going to spin off Porsche into a separately traded company and within a month, it'll trade with its own independent publicly traded stock. But funny thing, Yetis, Jack and I saw this story. And frankly, we were shocked.

In fact, we were shocked about two very specific things. The timing and the size. Yep. First, Jack, the timing. Why are we shocked about the time? We can't remember the last IPO we covered. We have not jumped into an S-1 IPO paperwork document T-boy style in like months. Because when stock markets are down, which they have been for a whole year,

companies tend to cancel their IPO plans and wait for better markets. Okay, so we were shocked about the timing. But also, we're pretty. shocked about the Porsche size. Analysts think that Porsche will fetch a $85 billion valuation. Are you sure you don't want to say Porsche? That's a niche. But the context here, Jack, can you sprinkle on some context for us?

With $85 billion valuation, that would make Porsche more valuable than both Ford and General Motors. With an $85 billion valuation, that would make Porsche worth nearly three times as much as Ferrari. Talk about Ferrari because they went public in 2015 and Ferrari is the closest comp to Porsche. Okay, great point, Jack. They're both sports cars. Both are European. Both are in lots of movies and both look really good and red. But we found the one fundamental difference that explains the difference in valuation. And here's that difference. There are way more Porsches out there than there are Ferraris. Way more than we even expect it. So many Porsches. So Jack, what's the takeaway for our buddies over at Porsche.

The Porsche principle is better than the Ferrari formula. Yet is the fundamental tension point in the entire luxury industry is that you got to sell a lot, but don't sell too much. Right, because luxury loses its value if it loses the allure of exclusivity. You got to say that the product is unattainable, and yet it has to be attainable enough to sell something. So Ferrari has a formula. They only sell about 10,000 cars a year.

Literally, they won't sell more than that. Ferrari literally stays exclusive. Meanwhile, Porsche has a principal. Sell as many Porsches as they can, so they feel exclusive, but they're not actually that exclusive. Porsche's sold 300,000 Porsches last year. Wow. And yet it's still seen as an exclusive luxury brand. And that is why Porsche is worth so much more than Ferrari.

Investors prefer Porsche's principle to Ferrari. formula. Jack, can you whip up the takeaways for us over there? If you live in a city, there may be a blank street coffee coming to your corner soon. Blank streets trying to be the best by just being, you know, good enough. For our second story, in Germany, they're Googling, Vaux can I find firewood? Yeah, translation, where can we get firewood because two great frenemieships are now over? For our third and final store, Porsche is IPOing at a shockingly high $84 billion valuation. Investors prefer Porsche's principle to Ferrari's formula. Now, time for the best fact yet. This one sent in by Jack and me. We decided to

whip up the best fact yet. While Jack and I were researching Pop-Tarts for the introduction of today's podcast, we discovered a lot more about the pastry. The billion dollar a year business has no expiration date. Okay, technically on a Pop-Tarts box, if you look, you're going to see that they expire in six to 12 months. But Kellogg also kind of admitted that a Pop-Tart will last forever. Yeah, I get this. Jack and I of the T-boy style on Kellogg's website, they answered a customer question about when Pop-Tarts actually go bad. Here was their response. After the expiration date, the product is still safe to eat, but the quality may decline. Okay, Jack and I aren't lawyers, but Kellogg didn't say that they're done. They're over. They're unsafe. Toss it out after 12 months from that day. Kellogg basically said

they're safe to eat forever. Okay, Kellogg's Pop-Tarts are not just a lifesaver. They know the secret to living forever. Based on that last line, you can see we're really not lawyers. Yetis, you look fantastic. If you've got the best fact yet, or if you just want to shout out on the pot, you should fill out the form right here in today's podcast episode. It's Google form. It takes two seconds. Your voice can be the best fact yet.

We want your voicemail. We want to get you on the pod with the best fact yet. Nick and I, we'll see you tomorrow. Cannot wait. And before we go, congratulations to two Yeties who teaboy together, Alex and Taylor, who just got dramatically engaged in Hawaii on Maui just last night. Wow! Let's see the ring.

And congrats to David Chibbley, who just got his dream job in I-Banking. And Abby Miller just got a new job, eating East Coast oysters. And big shout-out to Sam, the father of Scarlett, for letting me win my very first pickleball game last weekend. Celebrate the wins and a happy birthday to Zidon Duda over in Manhattan, probably by a blank street coffee. And happy birthday to David Pillop in San Francisco. And Hyshaun Zoo, happy birthday in Bellevue, Washington. Happy birthday to Kelvin Wambura in Dallas, Fort Worth, Texas. And Billy Kuchner's turning 30 in Mastic Beach, New York.

Happy 33rd! To Alexander Lester in Mesa, Arizona. And to anyone else celebrating something today, make it a T-boy. Celebrate the wins. This is Jack. I own stock of Volkswagen and Ford, and Nick and I both on stock of Robin Hood. Now a word about our sponsor, Robin Hood. A lot of you listen to our show while you're driving.

hands on the wheel. Keep it 10 and 2. You might be cruising, Chris, no rush, stay in the right lane. Or you might be doll lane from Duncan, dotting from lane to lane. And there are different drivers on the road. They're different investors too. Maybe you're cruising down the long-term lane with stock investing, or maybe you're a more advanced full-speed trader. Well, the Robin Hood app helps put you in the driver seat wherever you're at in your investing journey. If you're not investing on Robin Hood yet, to get started, go to robinood.com slash T-boy and choose your free stock. That's robinhood.com Limitations apply. Robin and Financial LLC, member SIPC, all investments involve risk.

By the way, this podcast is not owned by or part of Robin Hood, and we are not employees of Robin Hood. Now, time for the best fact yet. This one brought to you by Jack and me. Jicka, jicke and me, Jick and Jack, Nick and Jack, Jick and both of us, we decided to whip up this best fact yet for you. It's pronounced Benifer.