🛒 “Always Optimal Prices” — Walmart’s algorithm patent. Babylist’s influencer store. Blackrock’s risk-on letter. +$400 Kelp Makeup DJ

0:28This is Nick. It's the best one yet. By the way, it is March 24th. Yeah. Sorry about the freak out yesterday morning with our date error. Jack and I calendared our mixed ups or we mixed up our calendars. In the meantime, Jack, three fantastic stories for the best mix in business. What do we got? For our first story, Larry Fink is the biggest money manager in the world. He oversees$14 trillion with a capital T, but he says the safest investment strategy is also the riskiest. For our second story, how is BabyList selling$500 million of baby gear when millennials aren't having many babies? Well, to find out, we're looking at BabyList's new store, which doubles as an influencer studio.

1:09And our third and final story is Walmart. It's making all of its price tags digital by the end of this year. Um, surge pricing in aisle six? We've got a takeaway here. With companies optimizing prices, we've got a field guide on how to avoid them. But yetis, before we hit that wonderful mix of stories. Whoa! Love the mix. Honestly, fantastic mix today, Jack. The most viral luxury skincare right now that you need to know about, it's actually made of kelp. Get this, though. It's kelp that listen to music. First of all, kelp, it's like the grass of the ocean, right, Nick? Basically like kale, but it's enjoyed by the little mermaid.

1:46So this brand is called Creme de la Mer, and it's the hottest skin cream from Jennifer Lopez to Chris Hemsworth. But this skin cream secret ingredient is a 24-7 DJ who plays music to it. Here's the context. La Mer was invented by a crazy surfer dude out in California who loved kelp until the company got acquired by Estee Lauder. The key ingredient? Miracle broth, which has been marinating in the sea kelp. But for some reason, this$400 jar of miracle broth wasn't working after that Estee Lauder deal closed. So Estee Lauder went back in the books and checked the OG recipe beam. What did they find, Jack?

2:22They found a missing ingredient. It was music. Music. You play the sound of the ocean into the tank to turbocharge that kelp, baby. It's kind of like playing Mozart to babies or like music to cows. The vibrations from the sea music activate the kelp and make the miracle broth even more miracle. That's right. Baby Mozart's how these two-year-olds are going to be SATs. So now this fancy makeup factory has a full-time DJ to keep the seaweed feeling spiritual. But pause the pod, Jack, because there's real science here. Those vibrations activated the kelp. I'd call it pseudoscience, but yeah, sure.

2:56Yeah, Bessies, you really want to boost production? You want to play your junior year midterm study playlist. That was a good one, Jack. Nothing boost production like some Backstreet Boys at 2 a.m. Plus every Rocky movie soundtrack that's ever been made. So, Yetis, you'll look fantastic today. Especially if your skin cream listens to Float On by Modest Mouse. Hey, Ariel, another round of skin cream and tone up the volume. Damn, Jack, let's hit our three stories. 15 years before this song, two boys from the Northeast met in a dorm. They had an idea to cause a cultural storm. It's the best one yet, but the best is the norm.

3:27Jack, Nick, that's it. I don't even think they need to practice. 50%, that's a fat tip. T-Boy City on your at list. If you know, you know, because we're ready to go. We can't wait no more, so just start the show.

3:43Start the show. Start the show. First, a quick word from our sponsor.

3:53This episode is brought to you by Built, the intelligent finance platform that helps businesses scale with proven results. Look, Yeti's paying and getting paid. That is a pain for small and medium businesses out there. Did you send the invoice? Did they see it? Did you remember to remind them to remember to pay it? Oh, I totally forgot, Jack. Besties, if you drop the ball on any of those, you don't get paid and you're missing out on cash flow. And unless your customers are mind readers, which they aren't, they're probably just busy and forgot. You shouldn't have to chase them down. Powered by AI, Bill does all that simply and automated so that you don't have to.

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4:57So yet he's Jack's instituted a new business model for his Airbnb hosting. And Jack, what is it? Here it is. Host equals guest. Yes. I funnel all my revenue from being a host on Airbnb into one bank account and use that same bank account to book travel for myself. Basically, it's Jack's host guest bank account for when he hosts and when he's a guest somewhere else. When I lived in the city neck, every time my apartment was available on Airbnb, it would get booked like that. I mean, think about how often are you away from home? You got the bridesmaid, you got the shower, you got the bachelorette, you got the wedding.

5:28That's three weekends away just for one wedding right there. Plus, you got to visit your mother. Naturally. Well, that's a lot of potential hosting that you could be doing on Airbnb, let someone else stay at your place while you're away. Take that host money and spend it when you're a guest somewhere else. Have a business model like me. If you want to travel more, hosting more is a great way to make it happen financially. Your home might be worth more than you think. Find out how much at airbnb.com slash host.

5:55For our first story, America's$14 trillion man just proposed a total change to America's investing strategy. Because in modern America, not investing in the stock market is a recipe for going broke. Yes, it is. And we will relate this to Shaquille O 'Neal. But first, to sprinkle on some context, Jack, the most famous letters written of all time, who is it? Okay, when it comes to CEO letters, I'd say Warren Buffett is number one, Jamie Dimon is number three, and Larry Fink is number two. Larry Fink, he is the man who manages$14 trillion of America's money, mostly through mutual funds that people own in their 401ks.

6:36Because he's the CEO of BlackRock, the huge money manager. But Jack, in his CEO letter this year, it opened pretty bleak. I mean, he kind of went economic Debbie Downer on us this time. The CEO of BlackRock pointed out that according to company research, one third of Americans cannot afford a$500 emergency. And the bottom half of Americans have basically zero net worth. And a record number of Americans withdrew from their 401k early last year to pay for a financial emergency. Brutal, not fun numbers, besties. But Larry did sprinkle on a few signs of hope, did he not, Jack? Yeah, financial experimentation is in the air.

7:11You got Trump accounts getting babies into the stock market early, and states are doing their own version of that program. However, Larry Fink does point out that every American also has a retirement account, including you, Yetis. Yes, you got one too. All Americans have one, but they're being horribly mismanaged. Yes, they are. And you know that retirement account as Social Security. Get this, Yetis. Social Security has a$2.8 trillion investment fund that belongs to us, but it's a huge missed opportunity right now. The way to think about the situation with Social Security is like, Jack, could you put this in, I don't know, NBA basketball terms for us, please?

7:48It's having Shaquille O 'Neal on your roster, but keeping him on the bench. Uh-huh. Doesn't make sense. Because every U.S. worker and every U.S. company pays a Social Security tax as a payroll tax. Not too shabby, 6.2 % each up to certain limits. It's a lot of money, 12 % per employee. And that money pays out thousands of dollars a month to retired people like a pension. It's a huge program. Have you seen Shaq's shoes? Yeah, that's social security. So social security is a giant source of poverty prevention. In that sense, it's been a huge success. Oh yeah, giant win for the new deal going back 91 years now.

8:21But social security is on track to become depleted by 2033. What Jack and I are saying is kind of like M &Ms, we are running out of Social Security. Because we haven't raised taxes and we haven't cut benefits. And our population's got some number problems. Too many old people, not enough young people. Social Security's become the third rail of politics. But in this letter, Larry Fink highlights an opportunity to fix Social Security and get every American in on the stock market while he's doing it. Because in between the payroll tax and the benefit checks going out, in between is a$2.8 trillion trust fund that's doing nothing right now.

8:56And it's doing nothing by law. Because the Social Security Trust Fund can only invest in zero-risk assets like government bonds. So Jack, what's the suggestion to get Social Security off the sidelines? Basically, put Shaq in. Yeah. Get that money off the sidelines and put it into the stock market. Have Social Security investing in NVIDIA, JP Morgan. Costco, Ralph Lauren, the rest of the stock market. Now, we should point out the conflict of interest. Larry and his financial firm would benefit tremendously if we did this. Larry would be sitting there and taking a 0.1 % management fee on that 2.8 trillion bucks, and you know what that sounds like.

9:33Exactly. And also, social security is supposed to be, you know, secure. But Jack, to quote our buddy Jimmy Kramer from our recent interview with him, the only safe strategy is growth. So Jack, what's the takeaway for all our buddies wondering about Larry Fink's legendary letter? Fear of investing is more dangerous than the risk of investing. Now, Yetis, you're going to notice what we're saying here. Every time a public speaker talks about stock market performance, they use this disclaimer. Past performance is no guarantee of future results. And the reason they say it is because it's true. They don't want to mislead people.

10:07And you have to disclose that investing in stocks is risky. But honestly, that disclaimer scares a lot of people from not investing at all. Yeah, it's no guarantee, but go give it a shot, guys. Because historically, it rises 10 % per year, and it's America's biggest source of wealth generation. What Jack's saying is not investing? Well, in modern America, that's a recipe for going broke. Yetis, prices are constantly rising faster than incomes. The only way to combat that, in our opinion, is to own stocks. And the U.S. stock market is an insane generator of wealth, growing 10 % a year on average since, I don't know, forever.

10:40If you look back to the year 2003, over the 23 years since, boring basic US government bonds are up 90 % in those 23 years. Okay, but Jack, how does the rest of the stock market compare to that? It's up 700%. So the Social Security Trust Fund could be trillions of dollars bigger if we would just take a risk and put that money in the market. Get Shaq in the game. Yeah, he's in modern America, the wild reality that no one talks about is that if you never take a risk, you'll go broke. That's why we think Social Security should absolutely invest in the stock market so that every single American benefits.

11:18For our second story, BabyList has become a$500 million business by doing one thing and one thing only, register babies. But now BabyList is opening its second physical store in New York, and it looks like a Hollywood studio. Oh, Yetis, you are not going to want to nap on this one. All right, but first, Jack, if we were pitching a venture capitalist, like, this is not a good VC pitch, right, man? Millennials are marrying late. They're having fewer kids. Gen Z's not having kids. And yeah, we're in the middle of a baby bust. And yet, BabyList business is having a baby boom right now. In 2011, the BabyList founder wrote code for her website during her Amazon maternity leave while her infant was napping in the room next door.

12:03And the concept, simple, universal online baby registry. 15 years later and three of my kids later, they've raised$50 million and they're doing$500 million a year in revenue. Get this, BabyList is now used by half of all first-time parents in America. BabyList is more involved probably than your mother-in-law. And the sleeper hit, interesting strategy here. What is it, Jack? One-tenth of the revenue comes from sales of breast pumps, which, yes, are FSA or HSA eligible. Because funny thing yet is, despite America having its lowest birthright ever, those babies that are being born, Jack, they're born to anxious but well-off zillennial parents who will buy anything so they can just take their Zoom call in the conference room and keep their baby B for like 30 minutes.

12:49Oh, willingness to pay. Nothing eases the mental load of parenting like an expensive macrame activity gym which comes with a built-in Artipop baby carrier. But yeah, what Nick and I found fascinating about this, besides the cathartic release of our parental stress, was seeing retail make the ultimate strategic switcheroo. That's right, digital. It was getting physical, baby. As BabyList rose, the physical brick and mortar competition of baby stores started to fall. Bye-bye, baby closed 120 stores. Babies R Us went straight up baby bankrupt. So it looked like BabyList won. But then in 2023, this digital disruptor flipped the script and went physical.

13:25They opened an 18 ,000 square foot store in Beverly Hills. They have an all-terrain stroller track so you can test drive your stroller suspension. They have a real car in the store so practicing dads can see what it's like to hoist that car seat into position. And it's a squat thrust. Also, clever business strategy here. There's such high intent among the customers strolling at a baby store that this store can actually charge brands rent to get their products in front of those customers. For example, Rihanna launched her own maternity line a couple years ago, and what did BabyList do, Jack? Probably charged Rihanna to get that product in the store.

14:01And glam up the section that highlighted it. But here's the news, Yetis. BabyList is opening their second experiential arena store in New York City, but one little caveat here. New York City parents are different than LA parents. Yeah, I can bring the disclosure having been a baby in New York City. It's a different thing. I mean, you're lucky if you're in a closet sometimes. But besties, there is one more key reason BabyList business is accelerating, even though the baby population is not. By the way, Jack, have I told you about my baby bagel idea? You have not. It's a little pole on the stroller you can put the bagels on so you can hands-free feed the bagels to your baby.

14:36Pole? It's like four inches long. I'm still workshopping this thing, but if someone could get this for the New York store, I'd appreciate it. Jack, what's the takeaway for our buddies over at BabyList? The future of stores is Hollywood Studios. Now, Yetis, if you've seen a TikToker try to sell you a$400 baby carrier, the odds are that it was filmed at the Beverly Hills Baby List store. Because the store is designed like a studio, with lighting and staging, the architect was probably Warner Brother himself. And in New York City, they're going even further. The New York City Baby List has a stage for influencer content creators.

15:08They're even adding a podcast studio, so your favorite momfluencer can record a show from Baby List New York. And when you add it all up, it's like CNN and QVC and Alex Earl had a baby, born inside a Target. Most of BabyList's sales are online, and most customers won't visit the New York City or the Beverly Hills locations. But here's the key. The rest of the country will see the video shot there in short-form video content on their phones. So here's the equation. Small store footprint plus an influencer studio equals nationwide reach. Besties, that's why BabyList didn't just build a store, they built a studio too, and are doing half a bill in sales.

15:43Now, a quick word from our sponsor. Top hats, baseball hats, Von Dutch hats. We wear so many hats on this podcast. Honestly, we're not great at all of them. No, we've been avoiding hiring someone to wear those hats instead of us, especially the Von Dutch one, because hiring and training can take forever. Well, proud to say that we are hiring right now at T-Boy, and this is a job for Indeed Sponsored Jobs. Because sponsored jobs posted directly on Indeed are 95 % more likely to report a hire than non-sponsored jobs. So besties spend less time searching and more time actually interviewing candidates who check all your boxes, less stress, less time, more results.

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16:47A password manager should be the first security purchase you make for your team. Why? Because compromised passwords are the number one way bad actors attack companies, and small businesses are their favorite targets. But unlike a lot of security challenges, passwords actually have a pretty simple solution. 1Password lets you manage all your business's credentials, so you can feel confident that your data stays secure as your company grows. Find out more at 1password.com slash special offer and start securing every login.

17:43Ah, Walmart. Always low prices. Always? Yeah, Walmart has saved millions of Americans billions of dollars with their very low prices. It's a fair point, Jack. With the smiley face stickers they used to give out at the entrance, the greeters may need to bring those back sometime soon. Because two separate reports suggest that surge pricing is coming to Walmart in an aisle near you. I mean, Jack, add it all up. I'm looking at the whiteboard here. This is our third story on this kind of topic in three months, right, man? True. So, Instacart and Uber Eats both got caught offering different prices to different people.

18:12We should point out Walmart's a slightly different story, but it is directionally the same. We are living in a priceocracy, baby. Because here's the news. Walmart told CNBC that all their U.S. stores would retire their price stickers by the end of the year and replace them with digital shelf labels that can instead be updated instantly. No more price stickers, price screens. Now we should point out also, Jack, that Walmart says this is not personalized pricing, right, my friend? Everyone's going to get the same price within the store. Yeah. But this still feels like an uh-oh moment for us consumers.

18:45Now, Yetis, companies love when the prices are digitally shown because then they can be optimized. Ah, optimized. Jack's using air quotes, by the way. After four years of inflation, us consumers have trust issues, Nick. And we assume that optimizing prices only means one direction, up. Well, despite you and I bringing this up with our therapist, Jack, Walmart points out that there are some benefits to digital pricing that do not include ripping us off. First, less manual price-changing labor lets those workers help, you know, customers in the aisle instead of changing the stickers. And digital prices help the delivery guys, because if they're walking through aisle six, the label will now flash before the thing that they're looking for.

19:23And Walmart says they can use digital price tags to mark down perishable items in real time to reduce waste. 50 % off brown bananas, 50 % off only the brown bananas. All right, so Walmart says digital price tags will help them lower prices. Walmart's saying digital price tags are the best thing that ever happened to us, Jack. But this next bit seems to confirm our suspicion that this is all about raising prices. Because get this yetis, according to the Financial Times, Walmart just won a patent that uses machine learning and algorithms to set prices. To quote the U.S. Patent and Trademark Office, a system and method for dynamically and automatically updating item prices.

20:00Sorry, Jack, pause the pod. My retail's a little iffy, but, um, does that sound like surge pricing to you? Potentially. Our elected representatives think it does. And so a senator from New Mexico just introduced the Stop Price Gouging in the Grocery Stores Act. And naturally, Walmart has sent their governor affairs staff to go educate the lawmakers about their real plans. Uh, can you sprinkle on a translation for us, please, Jack? Walmart's lobbyists are lobbying the lawmakers. Yeah, to not make that a law. Now, this is also going to cost Walmart a lot of money. I mean, Jack and I crunched the numbers on this on the whiteboard.

20:324 ,600 stores, 200 ,000 products per store. We're talking digitizing a billion price tags. Walmart has to buy a billion new digital price tags for all their stores. That's a billion screens. So, of course, they're going to selectively raise prices where they can to recoup some of that cost. And prices are, the way we see it, the main character of our economy. so Jack and I will prepare you for this era with our takeaway. I'd call him the villain of our economy. Jack, will you please get one takeaway? One takeaway, please. Jack, what's the takeaway for our buddies over at Walmart? We need a field guide to price gouging.

21:07Yetis, you were with us during the pandemic, and we told you about how there were many variants of inflation that popped up every few months. You had inflation, you had shrinkflation, you had swapflation. Those were the main three. Now, with technology taking over the price tag, We need a similar lexicon to describe this priceocracy we're going to be living in. So here's how Jack and I are looking at it. First, we've got surge pricing, which is the short-term anonymized supply and demand mismatch, like Ubers on New Year's Eve. Then you have dynamic pricing, which is a little more long-term. It's what airlines and hotels have been doing for a long time, changing the price depending on when the flight is.

21:43Then you've got algorithmic pricing, which is dynamic pricing put on steroids, right, Jack? The prices are constantly updated for profit maximizing. Which has now led to surveillance pricing, which we're not sure is here yet, but it will be unless Congress bans it. Surveillance pricing is using AI to stock you online and to read all your publicly available data to offer you one price that maximizes your price you're willing to pay. We also call it spy pricing because it's spying on your Instagram page. Now, personalized pricing is similar to surveillance pricing. Pricing optimized for you only to maximize profits for them.

22:19So add it all up, besties. And look, as business guys, Jack and I are able to see both sides of this business consumer coin. But when puss comes to shove, we side with the consumer. Now you know what you're up against. And that's your Price Gouging Field Guide. Jack, could you whip up the takeaways for us for T-Boy Tuesday? The coolest idea in Larry Fink's legendary shareholder letter? Social Security should invest in stocks. Because the fear of investing is more dangerous than the risk of investing. For our second story, BabyList is opening its second store in New York, which, yeah, has an influencer studio too.

22:53It's like CNN, QVC, and Alex Earl had a baby born inside of a Target. And our third and final story, Walmart is making all price labels in stores digital by the end of the year. And they patented an algorithm pricer. Yeti's every company is algorithmatizing the prices, so you need to know what you are up against. But besties, this pod's not over yet. Here's what else you need to know today. First, in case Uber Black wasn't fancy enough for you, there's a fancier option getting imported to America. It's called Wheelie. The London-based RideHail is entering New York City, and it will be the most premium RideHail app there is.

23:26Now, interestingly, the business model still relies on gig workers, but the drivers have to attend a three-day training on how to be a chauffeur. Because the drivers must wear a suit, they must wear a tie, and they must sign non-disclosure agreements. And second, Elon unveiled plans for his new TerraFab over the weekend. This will be the biggest chip factory in the history of the world. The goal is to produce 1 trillion watts, a terawatt, of compute every year. And now he says it'll produce two times the amount of chips that the U.S. currently consumes. Which is crazy. And it's also a joint project between Tesla, XAI, and SpaceX.

24:01Just merge already. Could just merge. You guys are looking at each other. And finally, the BTS K-pop concert that we told you about yesterday in Korea. Well, it got a smaller crowd than expected, and it actually hurt the stock. BTS is back from the military, but their stock isn't. No, no, no. It fell 15 % on word that the concert was smaller than expected. Besties, if you have any info at all, let us know in the comments. Now time for the best fact yet. This one, an answer to yesterday's T-Boy insider trivia. Yesterday, we asked you, what variable is the biggest determinator of your happiness according to the World Happiness Rankings?

24:35Yeah, there were four options. Is it food, weather, social media screen time, or how good your soccer time is? Which one has the biggest impact on happiness in a country? Nearly 40 votes came in on our poll on Spotify, and most of you said weather. The actual answer, though, was social media. The ranking showed that countries where youth use social media more than five hours a day self-reported being happy much less. So if you take two identical countries in other metrics, like they both have cloudy weather outside, but they're different in social media consumption, that will make all the difference.

25:07Yetis, you're looking fantastic today. Jack, you're like, oh, wait, one sec. Oh my God. Those bananas that were 50 % off, they're now$500. Walmart just changed the price on us, dude. You think? Us suspicious consumers were right. Yetis, if you haven't yet, tap to follow us because that way you get T-Boy every single day, and it actually helps us go up in the rankings. And Nick and I will be back tomorrow with the best one yet. Follow T-Boy. See you manana.

25:37And before we go, a happy birthday to legendary Yeti Livia Noguera from Campinas, Brazil. She's turning 10 and loves her dog and used to want to be a dog when she grows up. And happy birthday to Abina Vray, celebrating in New York City with Sager. And happy birthday to girl dad Arvin Parco, hanging out in Phoenix, Arizona. Happy birthday to Heather K. Word in Auburn, New York. And George, good friend, enjoy that 29th birthday in New York City. Happy birthday to Caitlin Schmidt in St. Petersburg, Florida. And A.A. Ron Santana, happy birthday in Lawrence, Massachusetts, listening with his wife and kids just outside Boston.

26:10And happy birthday to the word okay, which was first printed in the Boston Morning Post 187 years ago. Okay, Jack. Okay. at.

26:24This is Jack. Nick and I both own ETFs at the S &P 500.

26:49Ready to talk with an expert? Visit bill.com slash proven to get started and grab a$250 gift card as a thank you. Terms and conditions apply. See offer page for details.