Episode 71: Netflix Kills Unlimited Leave, ClassPass Hero or Villain, Musk's Investment of the Century, Crumbl and Adir's Book Club
The guys discuss Netflix ending unlimited parental leave, is ClassPass killing gyms or saving them, Elon's incredible six-week return, the unhealthy Crumbl phenomenon, and Adir's book club returns.
The Contrarians catchup
Adir’s upgrade from the iPhone 14 Pro to the new 16 Pro was “just disappointing and people should absolutely not upgrade their iPhones.”
The Roblox business model is predicated on users buying Robux and now if you purchase them through the website or desktop app (as opposed to their iOS app), you get more bang for your bux because Apple isn’t taking a cut.
Adir bought a new Framework laptop for his son, spending almost $4K. The PC brand positions itself as a proponent of the right-to-repair movement, and its laptops are designed to be easy to disassemble, with replaceable parts.
Adam felt vindicated by a series of articles in The Guardian about the Victorian taxi fiasco: $200 taxi fares for a 5km trip: how illegal overcharging is surging – even as Victorian police are forced to crack down and Rogue taxi drivers ‘preying’ on Victorians as industry grapples with national crisis.
Adir reviewed Crumbl, a US-based cookie brand with 9.6M followers on Tiktok (and a social media strategy team of 30) and a cult-like following of dedicated fans looking to sample the newest flavour: “way too sweet”. The average Crumbl shop earned ~$1.2M in revenue in 2023, with profits of ~$123K. Crumbl’s classic milk chocolate chip cookie has 730 calories and 47 grams of sugar.
The guys discuss whether you should put athletic achievements on your resume. Adam says yes (depending on specific thresholds, like a karate brown belt), Adir couldn’t care less.
Adir’s Book Club
Adir read ‘The Power Broker: Robert Moses and the Fall of New York’, a 1974 biography of Robert Moses by Robert Caro. The book is 1336 pages and won a Pulitzer Prize in 1975.
The book focuses on the creation and use of power in New York local and state politics, as witnessed through Moses's use of unelected positions to design and implement dozens of highways and bridges, sometimes at great cost to the communities he nominally served.
Adir also recommends ‘Working’, also by Robert Caro - “an unprecedented gathering of vivid, candid, deeply moving recollections about his experiences researching and writing his acclaimed books”.
Adir: “What you see today is you see politicians and mostly what they're focused on is the mechanics of getting power and staying in power, and they don't really have any ambition about what to do with that power when they get it. The primary concern is just getting it for the sake of having it.”
Netflix Kills Unlimited Parental Leave
The Wall Street Journal shared that Netflix has pulled back its unlimited parental leave policy, indicating a strong focus on profitability. The company has 14,000 employees, 60% more than pre-pandemic.
The company has also put a limit on the amount of branded swag employees get.
Adir: “This is a societal issue. And I think fundamentally, what this shows is that Western society has not yet quite worked out where it wants to sit on how having kids fits in with work in Western society. And so we've gone from a place like even 60 years ago, men go to work and women have kids and stay home and look after them. And then the pendulum swung the other way to everyone's equal.”
Adam: “My wife was extreme, she came back to work in like two days. So that's that's like one absolute extreme. She's an incredible worker. But then there are people who want to take a year off. So if you want to take a year off that's completely fine, but you can't expect to have the same career progression as a person who hasn't taken the year off.”
Adam: “My brother-in-law got six months leave as a secondary carer - I hate that. The way I look at it is every business has an amount they pay the team. If you're giving a secondary carer full pay, that's money coming out of the pocket of someone who's who's at work every day”
Adir: “It is discriminatory. There are people that can't have kids or choose not to. And so what's their thing?”
Is ClassPass the Uber Eats of fitness?
The Age took a deep-dive into ClassPass and its impact on gyms and the fitness industry, citing that some studios have closed down because of the app, but none were willingly to make the claim publicly for fear of retribution.
Adir: “The complaints that you read were basically, ‘we love the way that this business brings us customers and gives us money, we just don't want them to take any of the money’.”
Adir: “The key of a business comes down to acquisition costs. And in an industry that is a essentially a services business, a lot of the acquisition cost will be how close are you to the customer and how much does the customer find you. What these gyms have effectively allowed to happen is they've allowed someone to get in between them and the customer. And number two, the brand is the intermediary and not the brand of the provider. It's because the level of differentiation between the providers is not enough.”
Musk's Investment of the Century
Elon Musk invested $277M supporting Donald Trump’s re-election campaign and has since been appointed to run the newly-created Department of Government Efficiency (DOGE, which is separate to the government itself).
Musk’s wealth has shot up an incredible 77% since November 5th - almost $200B in the space of six weeks. Many believe he is now the richest person to have ever lived.
The increase was due to Tesla's share price surging 65% on the basis that Trump's policy will favour Musk's automaker. SpaceX is also now worth US $350B.
Adam: “None of this makes any sense. Like the notion that Trump, who is a borderline socialist, how this is going to be good for business is a mystery to me.”
Five other stories worth following:
OpenAI published a blog post alleging that Elon Musk wanted the company to become a for-profit company. The public rebuttal comes in response to Musk’s latest court filing against the AI company that asked a federal court to prevent OpenAI from becoming fully for-profit.
Epic Games is making payments to “Fortnite” players who were charged for unwanted in-game purchases. The refunds — averaging ~$114 — could total $245M in payments for the company’s “dark patterns” noted in a Federal Trade Commission accusation.
With just a handful of trading days left this year, the S&P 500 is on track to end 2024 up 27%. After a 24% gain in 2023, it would mark only the fourth time in the past century that the index has notched 20%+ returns for two years straight (the last time was in the ’90s).
A Zillow analysis of millions of listings surfaced five trends US homeowners want for 2025: eco-friendly homes, houses built to withstand natural disasters, budget-friendly “cozy” homes, “wellness” features such as spa-like bathroom amenities, and vintage vibes.
Microsoft just released Phi-4, a 14B parameter small language model that outperforms massive competitors like GPT-4o and Gemini Pro 1.5 in areas like mathematical reasoning despite a drastic size difference.