Episode 63: 23andMe Fallout, #Desperate to Work, is the LVMH era over, Waymo Dominates and the Carry-On Baggage Dilemma
The guys discuss issues at 23andMe and whether user data is safe, the growing wealth gap across generations, LVMH's China worries, the incredible growth of Waymo, and how to solve carry-on baggage.
The Contrarians catchup
Adir bought Adam ‘The Making of "Goldeneye"‘ book in New York, but he has to give it back after he reads it because Adir hasn’t read it yet. He also recommended the video game book, ‘Masters of Doom: How Two Guys Created an Empire and Transformed Pop Culture’.
Adir is fascinated with novelty versus certainty in retail. “I think it's different in food and beverage hospitality versus retail. Retail chains are marketing and distribution. But hospitality is different. People who go into hospitality venues they know are basically saying ‘I'm going to trade off some of the upside in return for minimising the downside risk’, whereas I'm not that person at all. I would much rather take a bit more risk to get some more upside.”
Adir: “Reviews are basically written predominantly by morons.” (In case you were thinking of leaving a review of The Contrarians).
The Carry-On Baggage Dilemma
Roughly 70% of US flights require checking bags at the gate, up 10% from pre-pandemic.
Adam: “On single-aisle planes, it takes ten minutes to get these bags out. And people bring bags that are way too big. And nothing annoys me more than people who have two bags - one's too big, and then they push your bag away and shove it in".”
Adir: “I'll tell you one rule they should have, which is in an exit row, you can only bring one bag. You can't bring two because there is no under the seat in front of you in an exit row, because of takeoff and landing.”
#Desperate to Work
Courtney Summer Myers, a graphic designer based in the UK, pointed out the ongoing debate regarding the LinkedIn #OpenToWork banner. Many believe it can deter recruiters and hiring managers, as it may project an image of desperation. However, Myers embraces this narrative, stating, “As someone who has faced redundancy, I am indeed desperate, and there’s no shame in that.”
Adir: “We take this for granted as if this is just the way it is, but this is the way capitalism is, and we live in capitalism, and maybe in future there'll be something else. But right now, that's what we have. And the hallmark of capitalism is booms and busts. That is the way capitalism works. You can't really eradicate the booms and busts because you need them in order to for capitalism to function properly.”
You’ll have to listen to the episode to find out how the conversation went from LinkedIn to the economy to incels.
Is the LVMH era over?
The last time the guys discussed LVMH, Bernard Arnault was the richest person in the world. Now, the company is down 25% from its 2023 high and Arnault sits in fourth position behind Elon Musk, Jeff Bezos, and Mark Zuckerberg. Some sources (including Adam) list Larry Ellison as fourth and Arnault in fifth.
Adir: “It's very interesting because although it's an extremely diversified business, it's actually an extremely undiversified business in terms of how it makes money. It's got all these different divisions but it's this hugely diversified, totally concentrated business there.”
Adir: “I tell you what LVMH has said they're not doing, they're not discounting and they're not moving down market to cheaper stuff. I'm very against going downmarket. But car companies, they've all done it with diffusion brands.”
Adam: “Do you know what Lexus stands for? It’s the greatest acronym ever invented. It’s ‘Luxury Export to the United States’.”
Adir: “But the thing is, a lot of the people buying this are not rich people. A lot of people buying Porsche Cayenne, they're not rich people. Well, they are people that could not afford to buy it if they just had to pay cash for it. They are buying it with credit and these people are buying depreciating assets, using credit. To me, that is not a sustainable benefit.”
23andMe Fallout
Few companies have fallen faster than genetic testing company, 23andMe. The company was co-founded by CEO Anne Wojcicki, sister of former YouTube CEO Susan Wojcicki (who sadly passed away in August this year), and was briefly worth US $6B. The company has over 50M customers and dozens of deals with huge pharma businesses to assist with drug development.
Since its peak, 23andMe is down 99% and is now worth $126M. According to its privacy policy, the company can sell its genetic data if they go bankrupt, merge, or are acquired.
Adir: “The problem with this is there are so many ways to misuse people's genetic information, and those ways increase over time. There is nothing more personal about you and more identifiable than your genetic sequence. Your DNA sequence is linked to your name and details in their database. That's why they know it's you.”
Five other stories worth following:
Boeing and the union representing 30K+ of its factory workers reached a tentative wage-hike deal that could end a strike that started over a month ago (and is estimated to have cost Boeing $5B).
The US FTC finalised a “click-to-cancel” rule, expected to go into effect in six months. It aims to make canceling a subscription (gyms, apps) as easy as it is to sign up (if you signed up online, you can’t be forced to call a number to cancel).
Austin-based Throne is selling a $499 smart camera that photographs the poop in users’ toilet bowls. Why? So that a physician-trained AI can examine it, provide data on users’ gut health and hydration, and offer nutritional advice.
Cost-cutting automaker Stellantis is selling its 4K-acre Arizona Proving Grounds, used for developing and testing vehicles. Stellantis has shed 47.5k+ employees since December 2019.
Colossal Biosciences announced that its de-extinction of the thylacine, or Tasmanian tiger, genome is ~99.9% complete. The thylacine, which went extinct in 1936 from overhunting and habitat loss, is being reconstructed from RNA strands taken from an 110-year-old thylacine head found preserved in ethanol.