Sam: Quibi came and went so fast we might need to get some German Scientists to measure its lifespan in zeptoseconds. From the moment it launched this seemed like an inevitability. RIP Quibi, I still can’t believe I forgot to cancel my free trial and you managed to wrangle $5 from me.
The cold weather is official here. Over the weekend I grabbed a beer with friends at Rogue and it was 45 degrees with 20 mph winds. Luckily we had proper layers and their dog did not seem to mind. This is going to provide a new set of challenges for restaurants who were relying on outdoor seating to maintain capacity. As you can imagine the market for outdoor heaters is tight right now.
As always, Raj and I had a lot of fun writing this edition of Monday Moves. Please forward to a friend and let us know what you think!
Raj: It is 68 degrees Fahrenheit in Phoenix today and I am writing this while wearing a blanket. Winter is coming.
Quibi leadership be like
Raj: $1.75 billion and the help of the most well-known celebrities weren’t enough to save Quibi.
Back on May 11, Sam sounded the alarm on Quibi, writing:
“With Quibi missing the mark on their blockbuster launch, they need to quickly show consumers why they are needed, or nobody will miss them as they vanish.”
Well it looks like they are vanishing and nobody is going to miss them. Quibi has announced it will be shutting down after just 6 months of operation and raising $1.75 billion (before producing any content). Here’s a brief memorandum on one of the most hyped apps of the year that crashed and burned spectacularly.
Quibi was the newest entrant in the overly saturated market of streaming services. What Quibi offered in contrast with Disney+ and others was a focus on short form content watchable on both landscape and portrait mode on a smartphone. Right from the start, though, there were numerous issues with the app not limited to the unforeseeable changes to people’s daily lives this year.
That little thing called the product is what matters most. Quibi’s product, i.e. its shows and movies, were so lackluster that not one became a mainstream hit. The surest way in 2020 for any media to be a hit is to go viral on a big social media platform like Twitter or TikTok. We’ve written many times about TikTok’s ability to launch media in v2.7 and v1.5. For a show or movie to become popular in 2020, it needs to have one-liners or facial expressions that are powerful or memorable enough so that their screenshots can be used in memes. That’s how Tiger King became a worldwide phenomenon earlier this year due to the meme value added by Carole Baskin, Joe Exotic, and others.
Quibi’s failure is also a sign of the media monoculture’s decline. They got all the big stars like Kevin Hart, Nick Jonas, and Jennifer Lopez to advertise and produce their content. This would have been a more successful strategy even 15 years ago when consumers could only watch what was on TV at a given time. Signing these big names may have contributed to Quibi’s high price. Now with a fractured media culture, signing the big stars may be more of a liability than a guarantee of success.
Lastly, there was never a real reason for Quibi to exist. If I have a few free minutes and want to waste them on my phone, I’d rather watch some short videos on YouTube or scroll through Twitter. Others would probably browse through TikTok. Even 15 second TikToks start to feel long-winded after a while. 10 whole minutes on my phone watching the same thing? As David Lynch said on the topic of watching films on a phone screen: Get real.
Sam: Modern problems require modern solutions. Introducing McBroken!
McDonalds’ ice cream machines seem to be broken so often that it has become an internet meme. Luckily for consumers worried about encountering this situation unexpectedly, a software engineer has come up with a brilliant solution. Rashiq Zahid launched a website that shows every McDonald’s location in the US, and whether the ice cream machine there is working or not. Currently 8.64% of all machines in the US are broken, with the McDonald’s closest to me being on that list. Because I care deeply about cutting edge reporting on such important topics I called to confirm... and yes it is broken. The system works!
Behind the website is a cleverly simple bot that Zahid created to check the status of ice cream machines. The bot adds a McSundae from every McDonald’s location to a cart every 30 minutes. If the bot is able to successfully add the sundae then the machine is working, if not, the machine is broken. Within the first 20 minutes of McBroken’s launch the site already had 10,000 visitors, and the numbers kept climbing. As of yesterday there have been over 16M interactions with the app and 1.5M unique visitors. Zahid told The Verge that, “I just made it for fun, but people were like ‘Wow, this is the best thing I’ve seen this entire week.’” Even the VP of US communications for McDonald’s voiced his support for Zahid’s work. Ahh software developers with too much time on their hands… what will you come up with next?
Raj: PayPal will allow users to buy, hold, and sell cryptocurrencies. This could be the biggest boost to the adoption of Bitcoin, which has had a tremendous rise this past year.
PayPal is adopting cryptocurrencies and making them available to be used for purchases at its 26+ million merchants worldwide. This move immediately cuts major barriers to entry into cryptocurrencies, which for years have been hindered by the difficulty of practical day-to-day use. Few merchants accepted it, and processing time+fees have been a deterrent. The coins initially available on PayPal will be the expected big names: Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. In a major bonus, neither consumers nor merchants will face any additional fees as “all transactions will be settled with fiat currency at their current PayPal rates.”
Peter Thiel, founder of PayPal, said this in 1999:
“PayPal will give citizens worldwide more direct control over their currencies than they had ever before. It will be nearly impossible for corrupt governments to steal wealth from their people through their old means because if they try the people will switch to dollars or pounds or yen, in effect dumping the worthless local currency for something more secure.”
PayPal seems to have come full circle back to this founding principle, as the people can now also switch to cryptocurrencies. This is just two years after PayPal CEO Bill Harris called Bitcoin “the greatest scam in history”.
However, some influential voices in the crypto space have criticized this move. Satoshi Labs, the company behind the Trezor Wallet, published a blog post arguing that you should not use PayPal for crypto for the following reasons:
The service is entirely custodial, meaning PayPal controls the private key. If you don’t own the private key, you don’t own the Bitcoin.
Exchanges are known to lose funds. This is a risk even though PayPal is likely much more secure than Mt. Gox.
PayPal is known to occasionally freeze funds and censor payments.
In my view, adoption of Bitcoin is almost always a good thing as long as users keep certain precautions. Because I believe in owning my private keys, I only use exchanges such as Coinbase to transact Bitcoin while storing it in a secure wallet (see a list of wallets here).
Regardless of how you procure Bitcoin, I believe that it is a sound though occasionally rocky investment. It is up over 40% over the past year. As always, do your own research before making an investment.
*Note: I own Bitcoin… if you couldn't tell I am a fan.
Sam: Be there in a Zeptosecond! There is a new world record.
Scientists in Germany broke a world record and have successfully recorded the shortest time measurement in history. A zeptosecond is equal to a trillionth of a billionth of a second, and researchers were able measure the 247 zeptoseconds it took for a photon (light particle) to travel across a hydrogen molecule. The research team is examining the interactions between light and matter at the molecular level, also known as photoionization, and in the process clocked the 247 zeptosecond event. The previous record was 850 zeptoseconds which was recorded during a similar study in 2016. One of the lead researchers points out that there are even smaller measurements of times such as yoctoseconds (1,000 times shorter) and Planck units.
Sam: Snapchat crushed earnings expectations. Is it a turning point for the company?
On Tuesday the 20th Snapchat released their Q3 earnings which beat expectations significantly and sent the stock into orbit during after hours trading. Snap had revenue of $679 M, a far cry from the expected $555 M. The stock jumped from $28/share to $38/share, and at the time of writing this it is currently trading at over $40/share. This revenue represents a 52% year-over-year growth, and user growth was also up 4%. If you know anyone who had put options on Snap… give them a call and make sure they are doing okay.
Snapchat is still losing money overall, but the growth shown in Q3 shows a potential turning point for a company that has struggled since it first went public. With other social media sites (most notably Instagram) stealing Snapchat’s signature disappearing photo messages and stories, many people worried the company would be displaced entirely. However, Snapchat’s latest earnings along with other predictors of growth potential indicate that Snapchat is here to stay. Snapchat also continues to lead the industry in innovations such as their intricate filters and augmented reality shopping, which they are trying out with Gucci right now.
Who’s Making Moves?
Sam: Tesla is still on the hunt for a position in the S&P 500. It just had its best quarterly profit ever and sales continue to climb. Investors and the S&P committee are still worried about the amount of money Tesla makes from selling regulatory credits.
Raj: Netflix shares have slid after a slowdown in subscriber growth from the early days of the pandemic. The company has a record $1.1 billion in positive cash flow. Can Netflix and other traditional sources of entertainment (e.g. sports) bounce back?
Sam: Stocks dropped across the board today on growing coronavirus cases and fears that there will not be a second stimulus.
Sam: Things are getting more and more complicated in the relationship between Twitch and the music industry. Twitch introduced a feature which allows streamers to separate music from their stream, and Twitch will handle licensing. The music industry is still not happy and sent a letter to Twitch demanding they do more to prevent copyright infringement during streams. The whole situation shows yet again how wildly complex the music licencing / royalty / copyright industry is.
That’s all for this week. Keep on moving.
Title contenders for v2.8:
Bitcoin to the moon, Quibi gone too soon
Crypto on PayPal, Quibi Loses Morale
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Until next Monday,
Raj & Sam