If you love the word “volatility,” your week is off to a great start. But for the rest of us, hoo boy, things aren’t feeling so great. Economic fear surged, a global selloff drove a disastrous Monday for the markets, and recession grumbles returned, making it an ideal moment to remember this old joke: Economists have successfully predicted nine of the last five recessions.
In today’s email:
Simpler times: The “millennial lifestyle subsidy” got too expensive.
Back on track: Amtrak is barreling toward record ridership.
Weird patents: How the toilet paper roll came to be.
Around the web: An AI experiment, TikToks without TikTok, and more.
👇 Listen: How did sports and music tourism get so big, and why is it booming right now?
The Big Idea
What happens now that disruptors are too expensive?
Startups subsidized rides, TV, vacations, and more to disrupt industries and lure customers. Now, they’re too expensive.
2024-08-06T00:00:00Z
Juliet Bennett Rylah
A decade ago, startups that shifted services from pros to our neighbors seemed affordable, convenient, and fun. Why not let a random stranger give you a lift in their own car? Why not stay in a local’s guestroom and get the best tips?
Now, these startups are behemoths and their services aren’t nearly as affordable:
Between 2018 and 2021, average Uber prices rose 92%.
From 2019 through 2022, Airbnb’s average daily bookings jumped 36%.
Are we done being disrupted?
Well, it was never gonna last forever. Many of these companies, backed by investors, offered cheap prices and deals to hook customers — but they weren’t profitable. Look at MoviePass.
There’s been talk of this phenomenon — AKA the “millennial lifestyle subsidy” — coming to an end for years now as investors stepped back and companies strove for profitability.
And now, with the rising cost of living, customers may be leaving, too.
PerBusiness Insider, some are going back to pre-app behaviors — taking public transit or taxis, booking hotels, cooking their own meals, and being more judicious with their subscriptions.
What will companies do?
Fast-food restaurants from McDonald’s to Starbucks are offering deals to lure in budget-conscious consumers who’ve forsaken the “treat yourself” mindset.
Netflix and streaming services are cracking down on password sharing and upping prices to weather subscription fatigue.
Airbnb recently announced luxury amenities, a move that indicates it’s trying to be more like the hotels it once sought to disrupt.
Perhaps a better question is…
… what have these companies done?
Today’s streaming entertainment landscape is criticized for paying creators and artists much less than broadcast radio and TV did.
Airbnb is accused of contributing to the affordable housing crisis.
Taxi lobbies have railed against rideshare platforms for years — now, in some markets, they’re partnering.
Amazon was accused of predatory pricing — i.e., lowballing competitors, attracting consumers, then hiking prices — yet has become so ubiquitous that customers continue to use it, despite myriad controversies.
As customers realize the glory days of cheap luxuries are over, larger companies like Uber and Airbnb will likely find ways to keep customers. BI suggests some may lean on already hated tactics, like surge or drip pricing or gamification.
But some will MoviePass.
Toolbox
Unless you run the Fed, you probably can’t make the economy better right about now, but you can make yourself better. (If you do run the Fed: Jerome, buddy, call us — we’d love to set up an interview.)
⏰ “Focus on the hook”: The 13 best TikTok tips and tricks for being seen, starting with nailing the first three seconds.
💡 Get inspired: Motivation can be hard to maintain — let these underdog success stories help you stoke those fires.
📬 Own the inbox: Email marketing is always changing, meaning you’re probably behind the times. So, what’s actually working right now?
TRENDING
Progressive turned up a solution for America’s $98.2B+ distracted driving problem: treating drivers like children. The insurance company tested multiple strategies to deter driver phone usage, only finding success with gamification (awarding drivers points for not using their phones) and bribery (a $2k cash prize for accumulating enough points).
SNIPPETS
“Google is a monopolist.” A federal judge ruled against Google in a major antitrust suit, saying the search giant squashed competition to maintain its monopoly. Expect appeals to follow, possibly ending with a Supreme Court ruling.
Elon Musk’s Neuralink implanted its device into a second patient’s brain. Musk, while appearing on Lex Fridman’s podcast, said it went “extremely well.”
Speaking of Elon Musk… He’s revisiting allegations that Sam Altman “manipulated” him into co-founding OpenAI. Musk’s lawsuit claims he was deceived into joining the company by being told it would remain a nonprofit.
Groq — the startup producing chips to power AI models — raised $640m in a new funding round, bringing its total to $1B+ with a $2.8B valuation.
Mars Inc. is in talks to acquire Kellogg spinoff Kellanova, which would add Pringles, Cheez-It, Pop-Tarts, and more to its empire. Kellanova shares popped 20% in premarket trading.
Ikea must pay $566k for allegedly destroying evidence in an ongoing class-action age discrimination lawsuit. The retailer is accused of deleting employees’ emails after being asked to produce them.
Tomorrow begins a two-day National Transportation Safety Board public hearing into the Alaska Airlines door plug incident. Over 3.8k pages of related documents will also be released to the public.
Ex-NFL player Colin Kaepernick is facing backlash after announcing Lumi, a comic book company that will use generative AI to write and illustrate comics.
Apple is testing a new Safari feature called Distraction Control, which allows users to remove distracting elements from websites they visit.
What’s trending in tech? So glad you asked. See our spreadsheet of 100 top voices across tech, marketing, AI, entrepreneurship, and more.
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Data Point
All aboard: Amtrak is barreling toward record ridership this year, with 24.1m riders between October and June, up 18% YoY, perThe Wall Street Journal. If it stays on track, the company said it should surpass its 2019 ridership high of 32.3m.
Amtrak isn’t the only company speeding up: Brightline, the privately owned high-speed rail service in Florida, more than tripled revenue in a single year and is currently constructing a high-speed train between Los Angeles and Las Vegas. The federal government also gave rail funding a $66B cash infusion with its 2021 infrastructure bill, while Brightline received $3B+ in government grants.
The trend makes sense — with 2m+ people passing through US airport security every day in the summer, and cars back in full force on freeways, passengers are looking for crowd-free travel alternatives. Plus, trains are way more effective at giving passengers their “main character in a movie” moment.
Fit The Bill
There are thousands of companies valued at $1B+. How many clues do you need to identify today’s billion-dollar brand?
Clue 1: This company has undergone numerous changes in its 20-year history, but we think its first logo — an image of actor Al Pacino’s face — was probably its coolest.
Clue 2: Pacino aside, most of the company’s assets are in blue. That’s because its founder is colorblind and has difficulty seeing red and green.
Clue 3: Nine Inch Nails’ Trent Reznor and Atticus Ross are one Tony Award away from the impressive EGOT, but owe their first Oscar for best original score to a 2010 movie about this company’s founding.
👇 Scroll to the bottom for the answer 👇
Weird Patents
History lesson: Did you know the humble toilet paper roll was patented by Seth Wheeler of Albany, New York, in 1891? Now you do. Wheeler wrote that previous toilet paper rolls had come up short — they were either too hard to rip, forcing the user to pull off squares at an angle, or too easy and fell apart. His invention ensured that the bonds were easy enough to break while still maintaining the integrity of the roll. His diagram also seems to settle the long-time debate as to which direction is correct for hanging a roll.
AROUND THE WEB
☑️ On this day: In 1965, President Lyndon B. Johnson signed the Voting Rights Act into law, guaranteeing Black Americans the right to vote.
😯 That’s interesting: A woman survived falling 14k feet after her skydiving instructor passed out. This is her story.
🤖 That’s cool: The Puddingexperimented to see if AI could successfully make one of its data-driven visual stories.
📽️ Useful: A site for sharing TikToks with people who don’t have TikTok.
