Major American Cities Are Losing Kids & Ford Wants You to Customize Your Car

0:00This episode is brought to you by Accenture. When your advertising operations fall out of sync, everything else follows. Spotify and Accenture are working together to reinvent the rhythm of ad sales, using automation, analytics, and smarter workflows to simplify campaign delivery and access better data across the business. The result? Less time spent on operations, more time connecting brands with the moments and fandoms that matter most. Learn more at Accenture.com slash Spotify.

0:31Toby:Good morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, American cities are becoming less Sesame Street, more Bourbon Street. Then Ford wants more customers to pimp their rides. It's Tuesday, July 28th. Let's ride.

0:56Toby:I've seen enough. There is a definitive song of the summer, and it's Ella Langley's Choose in Texas. The country song just spent a record-setting 15th week at number one on the Billboard Hot 100, passing Mariah Carey's We Belong Together and I Will Always Love You by Whitney Houston, absolute classics, as the longest running number one by a solo woman outside of the holidays. Toby, it's a great track. Catchy, twangy, pairs well with a porch beer. I dig it. And apparently tons of people do as well. Are you an Ella Fella? I am an Ella Fella. She won me over eventually because the song is actually good.

1:32Most songs in the summers, they get a little annoying to me by the middle and the end of the summer. I'm thinking of Espresso a couple of years ago. But this song is just awesome. And it's also so versatile. I was reading a Rolling Stones article about how do you declare a song in the summer. And it needs to be a couple of things. Easy to sing along to, obviously. It needs to be a little danceable. It needs to work equally from road trips, backyard parties, bars, and summer playlists. So it's just LeBron James. It's versatile across five positions. It's still viral on TikTok, too, which helps.

2:03So most songs of the summer don't even necessarily need to be the biggest hits. They just need to create that feeling of summer and that nostalgia associated with it. And I think choosing Texas, you know, checks all of those boxes. And now a word from our sponsor, Anthropic, the team behind Claude.

2:21Toby:Toby, you like asking questions. Do I? See, there you go. Always asking questions like ones about AI, like who decides the rules. And it's not just you. Anthropic, the public benefit corporation behind Claude, heard questions like that over and over in more than 120 ,000 interviews about people's hopes and fears around AI. Anthropic's addressing these questions head on because their goal is to make sure AI actually works out well for people. They published the Advanced AI Framework, a proposal that would require the biggest AI developers, including Anthropic, to test their models, publish the results, and submit to independent review.

2:55Head to claude.ai.mbd to submit your question to Anthropic and explore how they answer questions. That's C-L-A-U-D-E dot AI slash M-B-D.

3:06Toby:If you walk around a major American city, you'll notice something lacking. Adequate public transportation, sure, but also kids. Where are the kids? The number of children under 18 living in major U.S. cities is down big time over the last decade, according to a new analysis by The Wall Street Journal. The urban kids population has fallen 6 % over the past 10 years compared to a 1 % drop nationwide. The decline is especially pronounced for those who still don't know their ABCs. The number of children under 5 in major cities has plunged 15%. The family fall off has gripped most cities, rich or poor, north, south, east or west.

3:43Toby:According to the Journal of the 38 American cities with more than 500 ,000 residents, we'll sparkle that later, two thirds suffered a decline of kids under 18. Why is this a problem? After all, adult time at the local pool is kind of nice. Well, first of all, it's a symptom of the broader tumble in birth rates, which has alarmed demographers after falling to a record low. But also it presents an existential threat to the economies of these cities. They've long relied on middle-class families to pay taxes that get spent on public services or to patronize local businesses, creating jobs and incomes that fuel an upward spiral for all.

4:17Toby:If families are moving out to the burbs or city-dwelling couples swear off having kids altogether, your economy and vibrancy will suffer. All we need to do is just look at what's happened in our hometown, New York City, over the last two decades. Since 2000, New York lost a net 80 ,000 households consisting of married adults with children. That is an entire class of families that you spoke to that stimulate the economy. The city comptroller analysis estimated that parents need about$334 ,000 in annual income to comfortably afford child care for a two-year-old. If you talk about having multiple children, your income literally has to go up into the millions of dollars, according to another analysis.

5:00You know, it's just so expensive to live here. So that's one vector of the reasons why people are leaving cities. But it's not just an expensive city problem either. This Wall Street Journal analysis saw declines in relatively affordable cities as well. Milwaukee, Albuquerque, Philadelphia, these are all cities that are not in the upper tier of the most expensive in the world to live. And yet even they are losing children as well. So some of it just comes down to lifestyle preference.

5:26Toby:Yeah, like there's just fewer people having kids in general. And also the dispersion of jobs is also another story here. So what is the history of kids in cities and kids leaving cities? Well, actually, after it's a relatively recent phenomenon, there was the financial crisis, 2008, 2009, people were actually staying in cities, families were staying in cities, because that's where the economic growth was happening, even if it wasn't growing that much after the financial crisis. That's where the jobs were. And then all of a sudden in 2017, it started picking up. People started leaving for jobs elsewhere outside of cities.

6:02Toby:And then, of course, we had the pandemic. There was that remote work revolution. A lot of times you could work remotely and you wanted more space. So families moved out to the suburbs, which was cheaper and had more outside options. And also you didn't have to go to work in the city. So really, there was that inflection point in 2020 and 2021 when people, families moved out of cities. But it did start a couple of years before. Also, another reason it's not just comes down to dollar and cents. Some of it is that you want to continue certain hobbies that a city is not doesn't facilitate. I mean, what if you want to golf more?

6:34It's not easy to do that in a city. Maybe your parents don't live in the immediate vicinity of your city. They live somewhere out in the suburbs. You have to go take care of them as they age. That's another reason. Some people, as they have kids, have safety concerns about raising them inside a city and they want, you know, a quieter pace of life. So there are a lot of reasons, not just that everything is more expensive in cities, that we are seeing these declines. Sometimes you just want more space. Build out, not up always.

7:04Toby:Some of these numbers are just absolutely incredible. I mean, Boston is one city where folks are like, they're just becoming, there's just no kids in Boston anymore. They're becoming a child-free city. The number of school-aged kids age 5 to 17 dropped by 10 ,000 from 2000 to 2020, going from 80 ,000 to 70 ,000. All of the trends are pointing in that direction where it's just going to go to zero. The number one city that lost the most kids is actually San Jose, California. The number of kids under age 5 there has dropped 34 % in the past decade, 34%. And this is not just an American issue. If you look in Europe as well, in Paris, primary school enrollment has fallen by one quarter over the past decade.

7:48Toby:Barcelona, preschool entry fell 16 % between 2016 and 2024. London lost more than 100 ,000 kids under age nine. We haven't spoken about the school aspect of this. Well, there's all these schools in cities, and if there's just no more kids or fewer kids, what do you do? You consolidate schools. That also loses teaching jobs. Sometimes these schools, oftentimes these schools are the most the biggest employers in cities or one of them. So there you go. Another economic calamity going on. But very interesting to see this happen, not just in the United States, but all around the world. There are some bright spots.

8:22Toby:And I think this is where maybe the affordability argument can take a bigger resonance because the cities that did see an increase in kids are more affordable. Charlotte, Kansas City, Oklahoma City, Atlanta, Nashville. So maybe these more sunbelt cities did see an uptick. The one third of large cities that did see an uptick. Fort Worth, Texas and Jacksonville saw 11 % increase in under 18. So as demographers, economists are looking at the overall low fertility rates in the United States, perhaps population decline outside of immigration. One thing they are zeroing on is cities becoming completely free of kids.

8:57Toby:And anecdotally, a lot of my friends are having kids now. They don't live in cities. They all move to the suburbs. I have two friends who still live in New York City with kids. Every single other one either moved to the suburbs of Philadelphia, Boston, or New York City, and I completely understand it. It's so expensive. And, yeah, these are the two guys that actually make the most money. So that is – there you go. All right. A company you've never heard of just became the largest firm listed in China after an IPO for the record books. CXMT Corporation popped an unbelievable 466 % in its first day of trading yesterday, surpassing all other mainland listed companies with a market value of nearly 500 billion.

9:38Toby:You'll never guess what it does. Okay, maybe you will. It makes memory chips one of the hottest corners of the AI market. As you well know, there's a severe shortage of memory right now because all of the AI players have been scooping it up, setting share prices soaring for the three companies that make the chips. And there are just three, South Korea's Samsung and SK Hynix and Idaho's Micron. CXMT wants to turn that big three into a fab four, and it's doing so with a little help from Apple. CO Tim Cook has reportedly consulted President Trump on a plan to buy chips from CXMT to use in devices sold outside the U.S.

10:13Toby:Apple has already been forced to raise prices on laptops and tablets due to the memory crunch, and it hopes that finding a new supplier, though a controversial one from China, will help it keep down prices. Toby, this is a huge moment for Beijing, which is showing not only can it go toe-to-toe with American frontier AI models, but also develop the infrastructure like memory that underpins the entire technology. This IPO was insane. So I follow a couple of stock trading accounts on X, and when they saw what it was initially priced at, they're like, this is an absolute joke. Considering the fervor around memory right now, this is going to go insane, and it absolutely did.

10:51retail investors oversubscribed the IPO 212 times over. They submitted 9.4 million orders. And to put that into perspective, that is 10 times the retail order volume seen during SpaceX's IPO. And remember, SpaceX retail traders love Elon Musk companies. The fact that this had 10 times the order volume is just absolutely absurd. The trading for this company yesterday represented 7 % of all trading on China's mainland stock market. People were pretty pumped that China finally has their own domestic memory champion.

11:26Toby:What's interesting to me about this is we talked a lot about China developing frontier AI models that can compete with the big boys, Anthropic and OpenAI. They are ZAI, Moonshot, DeepSeek. So they're making models. But due to export controls from the United States, they're not making the infrastructure, the data centers, the stuff that goes into these AI models. Therefore, they've lagged in the past few years. But all of a sudden, like China has done in so many other industries, they have caught up and they're starting to make their own domestic supply chain. So CXMT is their global champion for memory.

11:59Toby:And they're starting to do it on cheaper because they're not getting the most high-end models from the United States. And there's another area that's spooking stocks today. And we can actually talk about that, where China also has a company that's spooking everyone that makes the equipment, the actual machines that make chips. So they're starting to build their own supply chain, and it's going to spook a lot of investors, and it is this morning. Yeah, meanwhile, you look at what's happening over in the U.S., and NVIDIA kind of set off some alarm bells because they are in talks to support this massive data center financing deal with OpenAI,$250 billion financial guarantee for a data center project in southern Ohio.

12:41and that's not even counting the chips that they would put into it. It could swell to over$500 billion in financial commitments. So you put that, which reignited fears of the circular financing going on in the U.S. industry with the fact that China is building up their domestic industry in both of those next to the woods that you mentioned. And it was actually a really bad day for memory and chip stocks here in the U.S. We'll get to that a little bit later in the show because there was a changing of the guard in the biggest companies in the world. but I think it was just emblematic of the two different directions.

13:13Maybe our chip business is going and then China's chip business is going.

13:18Toby:Yeah. If you look at your portfolio this morning, don't, uh, because it's crashing, not crashing, but as you know, the United States does follow the South Korean stock market in some weird ways because South Korea is just dominated by those two memory chip companies. It fell 10 % this morning. And therefore the NASDAQ, the tech heavy index in the United States is down due to these China fears that it's building its own supply chain and its circular financing that's going on with NVIDIA and the other big American AI players. Let's move on. Ford wants you to treat buying a car more like buying a pair of Nikes.

13:51Both can get a flat tire, yes, but the Nike playbook Ford is stealing from is offering up more limited edition custom options, essentially creating vehicle drops that generate excitement like new Jordans do. The first example is a limited run of 1 ,000 Bronco Desert Rising models, which not only slaps a custom pink paint job on the iconic car, but also slaps an additional$13 ,000 onto the price tag, boosting Ford's margins in a meaningful way. Customers are already chasing uniqueness. The aftermarket market for cars, which includes things like detailing wraps and other modifications, reached$53 billion in 2025.

14:29So clearly people are interested in pimping their rides. And Ford is probably kicking themselves in the leather seats for taking this long to service that demand. Eventually, the carmaker thinks that this customization business, along with some software sales, can add$15 billion in additional revenue and grow at an 8 % rate through the end of the decade. Neil, this is not necessarily a new concept by any means. Carmakers have always used souped-up models to jack up prices. But the difference here is that Ford is trying to do it across all price points and add more customization options.

15:01Toby:Yeah, almost half of new vehicle buyers in Ford already do this. They already customize their vehicle in some way. But if you ever tried to do this, it's a big headache. You take your Bronco, you take your Mustang into the shop and you say, I want this, this, this. I want this souped up. I want this detail wrapped around it. But when they actually go to buy these things, the guys that are doing this work for you, it is a cluster. They have to go from this supplier and they have to get this thing from the other guy and this thing from the other guy. And it's just this laundry list of parts that you don't necessarily know when they're going to come in.

15:30Toby:And then when you install them on their vehicle, on your vehicle, you don't know exactly how it'll all play together. And therefore, Ford is saying, you know what, let's take this customization in-house. We'll give you packages already. And so you don't need a worry. It will also actually give you a warranty. That's a big part about this three year, 36 ,000 mile warranty for these customizations and personalizations, all these little details that make your car yours. So they're saying we'll do this ahead of time. You don't have to worry about all these supplier bottlenecks, about getting the parts you want.

15:59Toby:because we know you want to do this anyway. Why don't you just do it with us and we'll make some money on top? Yeah, anyone who has brought their car in for either maintenance or to have a customization realizes how complex electronics and how specialized every single one of these cars has become. I was actually watching a trivia video yesterday and they were quizzing software engineers, which has more lines of code? A Ford F-150, a Boeing 737, or the entirety of Facebook? And the answer was a Ford F-150. So when we're talking about complexity in cars, obviously it's gotten to a point that's absolutely absurd.

16:33So, yes, that is what Ford is saying that, hey, keep your warranty intact. It's much easier. You have factory insulation on these customization options. You're still getting a cool car. I mean, I was looking at this desert rising Ford Bronco. It's not my cup of tea.

16:48Toby:Straight out of the Barbie movie. It's very pink. It's very pink. But the fact that they're making limited edition runs of these shows that, all right, customers clearly want uniqueness. They don't want to be driving around the same thing that everyone else is. These days, let's service that and also just juice up our margins along the way. All right, we're gonna take a quick break and come back with Toby's trends right after this. Toby, have you ever heard of Rising Stars? Of course, I have it written above my mirror to remind myself I am one every day. Toby, Rising Stars is a docuseries that follows small business owners as they created their businesses and faced real challenges.

17:23It features businesses making real moves like crowned skin. Amazon ads helped them scale to over$500 ,000 in monthly revenue.

17:31Toby:For more success stories like theirs, check out advertising.amazon.com slash rising-stars. That's advertising.amazon.com slash rising-stars. Toby, you got an idea and a browser? Browser, check. Idea? I can't wait for my first one. Why? Because that's all you need to build real software. Whether you need a CRM, an internal tracker, or an app, Bolt.new builds it with you. Describe what you need and Bolt.new can build it and you can have it shipped by the weekend. Not a prototype, the actual thing. Get started at bolt.new slash mb. And the first 100 listeners to use code mb26 will get a free month of Bolt.new Pro.

18:13Toby:That's bolt.new slash mb. Neil, you know how parents always get loads of unsolicited advice about kids' clothes? I believe it, but I can't say I've experienced it. Wait, are you expecting... No, for clothes you can actually count on, there's Little Sleepies. Real moms created Little Sleepies with clothing designed for the realities of daily life with babies and kids. Plus, super soft, super stretchy fabrics and no scratchy tags. Snack some for the kids in your life at littlesleepies.com. That's littlesleepies.com. The internet is a tough place to make a living. There's lots of wannabe influencers who post their Get Ready With Me content into the void, hoping against hope for a brand deal or a like from someone other than their Aunt Sue.

19:00And yet, for every Alex Earl and Mr. Beast, there is a normal person, probably with a 9-to-5, who has carved out a niece for themselves in what Bloomberg describes as the middle class of the creator economy, a trend I want to talk about on today's edition of Toby's Trends. Another way to describe these middle class creators is micro-influencers, a.k.a. people with under 100 ,000 and often under 10 ,000 followers. But like Neil rebounding in men's league basketball, micro-influencers can be small yet mighty. Despite having much smaller audiences, they often produce better returns for brands that work with them due to more engaged audiences.

19:38For instance, if I ran a pickleball shoe company, I might prefer a smaller creator with a 10 % engagement rate who will also be cheaper over a larger one with less engagement in a bigger price tag. Indeed, influencers with more than a million followers generated roughly six times more revenue, but cost brands roughly 18 times more, according to an American Marketing Association study. It's turning influencer into a viable, if unsteady, source of income for middle-class creators. Take Bonsa Namera, a dentist Bloomberg profiled, who makes$76 ,000 in his day job for a government dental clinic, but is expected to bring in more than$450 ,000 from his creator activities this year.

20:18Sounds awesome, but for some perspective, 57 % of full-time creators earn below a living wage, according to Influencer Marketing Hub. Neil, lots of people want to make money from posting content online. It's both harder and easier than ever to do just that.

20:33Toby:Yeah, the way I think about it is you don't need to buy a Super Bowl ad every time. You can just maybe buy a 30-second spot on Jeopardy on your local television station, and companies are shifting their spend towards smaller influencers, this middle class. 45 % of total U.S. influencer marketing spending is going to go to people online with a following of less than 20 ,000 this year. That's up from 19.5 % in 2021. And the share of spending on those with even smaller followings, less than 5 ,000 followers, nano influencers, is going up to 20 % this year, up from just 3 % in 2021. so it looks like companies are absolutely shifting their spending from writing a huge check to alex earl or kim kardashian uh and toward those like you or me it the real reason why brands like doing this is because the audience is niche and it speaks very uh specifically to what they are trying to uh reach as as a company so again for instance if i am a pickleball shoe company and i see someone with 10 000 followers who posts about all sorts of things maybe it's a lot of lifestyle content.