Apple Under Fire, Uber Settles, Suing for Birken, the Ills of Pokies and Close Encounters of the Adir Celebrity Kind
Where in the world was Adir Shiffman?
After Adam oversold Adir’s mysterious overseas trip last week, everyone was clambering to find out where he was. But he was just in the US for “a crazy week” spent in New York, Boston, and Vegas. “The way I describe Las Vegas is there's something for everybody to love, and there's something for everybody to hate”.
Some takeaways:
Slot machines in Las Vegas are extremely sophisticated and the market is surprisingly fragmented. A standout is Australia's Aristocrat, which is a major player in the global slot machine industry.
An ongoing legal battle between Aristocrat and a Las Vegas-based company, Light and Wonder, focuses on allegations of intellectual property infringement, spotlighting the competitive and secretive nature of game development in the gambling industry.
Adir’s general view is “it shouldn't be protectable IPI don't think there is anything novel enough in coming up with game mechanics either in video games or in gambling that should make it protectable”.
Two people with Prosopagnosia meet on a plane
Adir often admits to not being able to recognise faces - “it would take me 5 to 10 interactions with someone in context to recognize them out of context”. He’s also a self-confessed comedy nerd, so when he discovers he’s sitting next to Craig Robinson on a flight, they bonded over Martin Short’s character, Jiminy Glick.
Adir’s second celebrity sighting was when he was boarding a flight from LA to Dubai and everyone had to wait for someone to board. Adir spots someone diagonally from him in “very stylish kind of pyjamas”. The celebrity turned out to be Brad Pitt, which is important for two reasons:
If you ever see Adir IRL, you can’t be offended if he doesn’t recognise you right away because he didn’t even recognise Brad Pitt on a 16-hour flight.
Prosopagnosia, also called face blindness, is a condition where you have difficulty recognising people's faces. A notable celebrity with Prosopagnosia? Brad Pitt.
Consumer Protection at Retail Stores and Marketing Missteps
First, Myer.
Adir walked into Myer and was told his purchase was a sale item, so it’s a final sale - no exchanges or refunds. He didn’t bother arguing with her about consumer protection, because she’s been trained to say that, but this approach isn’t technically legal. We’d love to hear if you’ve had similar experiences!
Then, Allbirds (“great product, terrible business”).
In the last 12 months, Allbirds has seen a 14.5% decrease in net revenue, a net loss of $56.8 million in Q4 2023, is planning to close up to 15 US retail stores in 2024, and they replaced co-founder Joey Zwillinger in the CEO seat with their former COO.
But that’s not what united these contrarians. Rather, it was a marketing email offering a big sale, but when you click through, the only shoes available were either “size 22 or size 2”. “This is not the way to do e-mail marketing to piss off your customers by having nothing in stock for them to buy when they click through.”
The Art of Negotiation and Haggling in Various Settings
Adir shows up to his Las Vegas hotel and his booking was for the wrong night and they didn’t have a room for him. He was told there was nothing available, but then after looking, there was an available suite for $1200 a night for two nights - “and then the bargaining begins about the cost of the upgrade”.
“My suggestion is that if someone wants a great room in Vegas, they should just book the cheapest room at a good hotel and then go there and just start haggling like crazy as if it's the Moroccan bazaar.”
It quickly dropped to $550/night, but given it was already night time and they weren’t going to miraculously sell the room, Adir said he’d pay $550 for the two nights. “And so it turns out, there's always a way to buy anything in Vegas.”
We want to hear your best haggling story! Send us a note and we’ll chat about the best one in a future episode.
Adam’s Quest for a Data-driven Sleep
After Adir last week supported anyone looking to improve their sleep, but shot down most sleep metrics that pop up in new products, Adam wanted his comeuppance.
“We've had the some Contrarians fans jump on LinkedIn and support me and this isn’t just any fan, we’ve had two big-time fans. Fran Herrera, Larry's number two at Zip for many years, was a massive fan of Eight Sleep and sent me a message, and so did her husband Ben, as did Mike Bird from Urban, which is a great prop tech business was also massive. Eight Sleep was one of my favourite purchases of 2023”. [Eight Sleep is not a sponsor of the podcast, but they obviously should be.]
Hermes Legal Challenges
Hermès, a luxury brand valued at €260 billion, faces a lawsuit from two wealthy plaintiffs who allege the company forces customers to buy other products before allowing them the chance to purchase exclusive Birkin or Kelly handbags. This scheme purportedly allows Hermès to inflate the prices and profits of these bags.
The lawsuit claims that Hermès only offers the opportunity to purchase Birkin bags to select customers deemed worthy, often in a private showing. Customers can't simply order a Birkin bag in their desired specifications at retail locations, making the process exclusive and restrictive.
Adam and Adir explore whether Hermès' business practices constitute illegal discrimination or simply a unique business strategy. While there's debate over whether this is ethical or legal, they suggest that the luxury brand's model closely mirrors loyalty schemes used in other industries, such as airlines with their exclusive lounges.
The Impact of Uber on Traditional Taxi Services
Uber agreed to pay $271 million to compensate Australian taxi and hire car drivers for income and license value losses after entering the Australian market.
This settlement is the fifth largest class action settlement in Australian history and marks a significant legal challenge against Uber by the taxi and hire car industry.
The lawsuit alleged that Uber Australia and its parent companies operated illegally, gaining an unfair advantage over compliant taxi and hire car drivers.
While there's sympathy for taxi drivers' financial losses, there's also acknowledgment of the inevitability of progress and the superior service offered by ridesharing apps like Uber.
Adam and Adir also touch on broader issues of protectionism, market efficiency, and the challenge of adapting to technological advancements and new business models within regulated industries.
Consumer Rights and Business Practices
Creative Destruction Concept: Originated by Karl Marx in 1848, referring to the process of transformation that accompanies radical innovation. Joseph Schumpeter later popularized the term in his book "Capitalism, Socialism and Democracy" in 1942, focusing on how old industries are continuously destroyed and replaced by new ones.
Impact on Society: Adam and Adir touch on how protected sectors underperform in innovation and customer experience improvement. It debates the necessity of innovation and the challenge of industries protected by government legislation.
Healthcare Industry: Mentioned as a heavily protected industry, raising questions about the need for protection versus the benefits of opening up to more competition and innovation, including the potential role of nurse practitioners and pharmacies in providing broader healthcare services.
Automotive Industry in Australia: Discussed as an example of how protectionism (through tariffs) possibly led to the decline of the industry. It suggests that avoiding protectionism might have allowed the industry to innovate and adapt, potentially embracing electric vehicles and maintaining a competitive edge.
Legal and Ethical Considerations in Technology: Focused on the legal battles between Epic Games and Apple/Google over app store policies and fees, highlighting the challenges of balancing profitability with ethical practices in a monopoly or duopoly market. Adama and Adir also cover how certain practices by big tech companies are under scrutiny for stifling competition and innovation.