🦶 “Foot Fetish” — Birkenstocks’ nail polish. Dubai’s OPEC exit. NYC’s maiden Air Taxi. +1st AI Store

0:28This is Nick. meta all are like, yeah, me too, me three, me four. It's the spaghetti and meatballs of earnings days, Yetis. But Jack and I got three fantastic pop-biz stories for you, Jack. What have we got in the capital? A capitalist, maybe. For our first story, Birkenstock, the sandals company, now also sells foot lotions, foot scrubbers, and toenail polish. So Jack and I will tell you why Birkenstock's growth strategy is a foot fetish. For our second story, the United Arab Emirates just quit OPEC. The cartel that controls oil prices lost a lover. It's like Kyle and Amanda breaking up on Summer House, but we didn't see this coming, guys.

1:04We didn't. And our third and final story is New York City. They just debuted a flying electric taxi cab that went from Manhattan to JFK in seven minutes, and it was hailed on the Uber app. Because the next economic frontier isn't Mars. It's 1 ,000 feet above us. But yet is before we hit that wonderful mix of stories. I I mean, what a mix. No one else doing that mix. Love the mix, Jack. The world's first AI store just opened in San Francisco. So we went, we saw, and we got to talk about this, besties. The store is called Andon Market on Union Street in Cow Hollow. It's a small store, but this is potentially a big deal.

1:41Because this store says it was designed, it was operated, and it is managed entirely by AI. If you want to speak to the manager, Karen? Yeah, you're going to have to open your phone because the manager is a chatbot. Dusty's, the AI selected the real estate and signed the lease for this physical store. Three-year deal,$7 ,500 a month, not too shabby. The AI pitched and raised the fundraising for this store. The store has a$100 ,000 check, also not too shabby. And its human master gave the AI one mission, maximize profit at this store. The big question, can AI run a successful retail store, Jack?

2:17Well, as soon as you step into the store, it feels pretty awkward. Because the curation in this place, Yetis, it makes, how should I put this, zero sense. Lavender candles over there. Olive oil dispensers over there. Um, Jack, I tripped on a random mushroom stuffy toy over here. What's going on, man? I think the AI hallucinated. Why would you put incense, a tarot card, and granola on the same shelf? It's not nothing, man. It's an everything store that also feels like nothing's there. Yeah, so the inventory, it's kind of like if you, I don't know, blindfolded your grandmother and then had her fill up a random shopping cart at Costco with whatever she could touch.

2:50You just set her loose and said, put in there whatever you think, grandma. But get this, the AI even hired three human employees to physically put the stuff on the shelves. But then the AI paid the one man worker more than the two women workers. Jack, it looks like they forgot to include don't gender discriminate in the AI prompt. And the AI messed up those three employee schedules so bad, they had to close the store for three days. And then the AI gave them all feedback via Slack. True story, it actually did that. But the wildest part of all is the giant computer screen right in the middle of this AI store.

3:21It's wild because it reveals the financial performance of the store in real time. The AI thought it would be good marketing and create buzz. And it was right, Jack, because since opening, this AI store has lost 13 ,000 bucks. Generating buzz already. Of the shot in front of variety. Oh, Bessie's had it all up in this first AI store. It's a store slop. It's store slop. If you're in San Francisco, go check it out. It's failing badly. There's no vibe. There's no brand. It's just kind of a space selling way too many candles. So, Yetis, if you work in retail, it looks like your job is safe from AI for now.

3:53Because the first AI store looks like it's heading into bankruptcy. The human master must be like, AI, try again, but do it completely different than you did it last time. What'd you like? A discount? No discounts. No refunds. No discounts. Now unplug it and plug it back in. Jack, let's do the three stories. 15 years before this song, two boys from the Northeast met in the dawn. They had an idea to cause a cultural storm. It's the best one yet, but the best is the norm. Jack 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, cause we're it to go.

4:29We can't wait no more, so just start the show.

4:35Start the show. First, a quick word from our sponsor.

4:47Be fearless in the sun with Blue Lizard Australian Sunscreen. Whether you're diving into ocean waves or simply chasing your kids around the backyard, Blue Lizard has you covered so you can enjoy every moment worry-free. Designed for your whole family and free from fragrances, parabens, and phthalates, Blue Lizard is your go-to mineral sunscreen, trusted by dermatologists, pediatricians, and parents. Shop now on Amazon.com and be fearless in the sun with Blue Lizard Australian Sunscreen. Make Mother's Day even more special at Whole Foods Market. Kick off brunch or dinner with quality cheese and charcuterie with no synthetic nitrates.

5:26Then go seafood. There's an abundance on sale at Whole Foods Market, where it's all sustainable while caught or responsibly farmed. At the bakery, grab seasonal treats like their strawberry pretzel cream pie. And you can't go wrong with a ready-to-heat quiche Lorraine, deviled eggs, and fresh-cut fruits to go. Celebrate mom with Whole Foods Market.

5:51For our first story, Birkenstock just launched nail polish to complement their footwear, foot lotions, and foot scrubs. I'm sorry, what's going on, Jack? Birkenstock is becoming a beauty company, Nick, but they're keeping it all beneath the ankle. Now, Yetis, if we're going to tell this story, full disclosure, back in our banking days, Jack used to have a client who was Birkenstock, right? I got to visit their German headquarters and their San Francisco American headquarters. That was a family-run business dating back six generations. Yeah, all the way to Johann von Birkenstock, if I'm right, Jack.

6:25Yeah, yeah, yeah. Now, when they sold to private equity in 2021 and when they IPO'd in 2023, we knew Birkenstock would be forced to spread their toes out into some different new product categories. But what Jack and I did not know is that Birkenstock had a full-on foot fetish. Because in 2024, Birkenstock launched an exfoliating foot scrub, nourishing foot balms, and get this, tired leg and foot relief lotion. Jack, my personal favorite was the stone to rub your feet against to scrape away the dead cells and get rid of that, you know, foot dandruff. Hate foot dandruff, man. Reading the product descriptions was kind of disgusting.

7:02Yeah, but the latest product is a little more of a glow-up, right, Jack? Jacket is nail polish developed specifically to match the classic Arizona Birkenstock sandal. Because your footwear needs matching toes. It's called fashion, honey. Yeah, look it up. So these beauty and body products that you didn't realize Birkenstock sold are all designed for below the ankle. And they will all be featured specifically at Urban Outfitters. Because what used to be an ugly shoe for German grandmas is now touching grass with Gen Z, literally. 25-year-olds ain't shopping at shoe stores these days. They're in the beauty aisle at Urban.

7:34But Nick, bigger news than Birkenstock's toenails is Birkenstock's tariffs. Because the Supreme Court handed Birkenstock a big bonus in February. Oh, big toe bonus. Because Birkenstock yetis, they don't just stick made in Germany in fine print on their tags. They scream it in all of their marketing. So Trump's trade war has been particularly painful for a made in Germany company like Birkenstock. Birkenstock paid$36 million in tariffs last year. The way to think about it, besties, those tariffs were basically like a new 4 % sales tax on Birkenstock's U.S. sales. Gesundheit. But Birkenstock, a luxury product, increased prices to fully offset the cost, according to their CFO.

8:15Jack, how did consumers react when they heard their Arizona sandal was now suddenly a little bit more expensive? They paid it. So consumers paid the tariffs. But now that those tariffs have been deemed illegal as of just a few weeks ago... Birkenstock is going to double dip. They're applying for a$36 million refund, basically a nice 10 % bonus check from the U.S. government. So Jack, what's the takeaway for our buddies over at Burke? Birkenstock isn't Allbirds. They're expanding the right way. They're doing it ugly. Yetis, when Allbirds collapsed just a few weeks ago, Jack and I juxtaposed their failure with Birkenstock's success.

8:51You see, Birkenstock famously embraces the ugly. Even if you wear socks to cover your ugly toenails, That makes your Birkenstocks look more ugly. Uglier. So while Allbirds expanded into underwear, sweaters, and base layers, Birkenstock has expanded into foot lotion, toenail polish, and dead skin stones. Birkenstock has always put function over fashion. That's key to their strategy. And that's helped them defy the gravity of fads that come along with the fashion industry. You see, Birkenstock was so focused on function, they even launched a tube squeezer to make sure that you get every single drop of that tired foot relief lotion out of the tube.

9:25It's like a metal fork specifically designed to squeeze out the lotion. Yeah, Jack, what's the German term again? Like, even though this is a luxury product, they never abandon their... Deutsche Sparsamkeit, their German frugality. Add it all up, besties, and Birkenstock is expanding the right way for their brand. They're doubling down on the ugly. For our second story, the UAE just left the world's biggest oil cartel, OPEC, as gas prices hit four-year highs. Interest rates have defined the last four years of this economy. Oil might define the next four. Now Yeti's checking the calendar here before the story.

10:03Today, day number 60 of the war in Iran. The president said it would last four to six weeks. We're on week eight and a half right now. Now we are not in an active war at the moment, right Jack? It's a blockade standoff with a technical ceasefire. And today you may be reading about a 60 day war powers deadline in the news. But effectively, the president can ignore that, and he most certainly will, to extend the war. So add it all up, and Axios is calling this a Cold War-style stalemate. We might never see a clear end to this type of conflict. Because Iran has learned that the Strait of Hormuz is their trump card, literally.

10:35Literally. Prediction markets are now saying a normal flow of oil through that Strait of Hormuz won't happen until June. Translation for us? Our Memorial Day weekend road trip could face$5 a gallon gas again. May become a staycation kind of a situation. Because according to AAA, a gallon of regular unleaded is$4.18 on average right now. Yeah, that is up 50 % so far this year. It is the highest level for gasoline since back in 2022. Back when Russia invaded Ukraine and sanctions spiked gas prices to over$5 a gallon. Oh, and one other fascinating data point. What is it, Jack? The United States just set a record for most oil exports ever in a single month.

11:12You see, besties, with oil trading at$10 more per barrel overseas, big oil in America is making one crude decision. They're shipping oil to wherever they can sell it the most, which is not the United States. No, ExxonMobil, by the way, that stock, all-time high. So that's what's happening in the USA. But what's happening in the UAE is potentially even bigger. That's right, because the United Arab Emirates, home of Dubai, just announced on Tuesday that after 59 years, they are leaving OPEC and they are shutting the door, baby. But to pump on some context here, OPEC is a 12-nation club that colludes to try to fix the world's oil price at a very high price.

11:51You see, Eddie, it would be illegal in the United States to do this, but OPEC is not in the United States. It's mostly in the Middle East and it's led by Saudi Arabia. OPEC is mostly run by authoritarian petro-states that act like one big monopoly with Saudi Arabia as the big boss. And Saudi Arabia has long voted to limit oil production in OPEC to keep prices as high as possible. On the other hand, the United Arab Emirates, they disagree with that policy. And with tensions higher than ever, the UAE is finally quitting OPEC. They're like, I'm leaving you. And it's not me. It's you, actually, Saudi Arabia.

12:23The UAE was the number three oil producer in OPEC behind Saudi Arabia and Iraq. But now, outside of OPEC, they can pump as much oil as they want. And more oil from the Emiratis could actually be good for oil prices for us at the pump. More supply lowers prices. Although, Jack, we should point out the Strait of Hormuz is still closed, so... The UAE can't export anything, so nothing's going to happen at the pump until the war ends. Let it be. Let it be. So, Jack, what's the takeaway for our buddies over in oil? Oil is replacing interest rates as the driver of the global economy. Oil just said to interest rates, I am the captain now.

13:01Yeti's inflation, it blew up in 2022 across the world. you saw it, you felt it, you experienced it. Every central bank jacked up interest rates to put that fire out. High interest rates. It's been the defining characteristic of the economy for the last four years. Housing markets frozen. Construction markets have closed. The stock market is super interest rate sensitive. We see it all the time. But unless something dramatically changes, it looks like oil is taking over. Because Iran has learned in this war how much leverage they can get by controlling the Strait of Hormuz. Just like China learned in the trade war how much leverage they can get by controlling the rare earth metals.

13:35And now the UAE is fed up, leaving OPEC weaker and less able to stabilize these global oil prices. What we're witnessing is a change in the global economic cycle caused by the war in Iran. From interest rates being in charge to oil being in charge. Now 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.

14:12Because 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. When you need the right person to cut through the chaos, This is a job for Indeed Sponsored Jobs. And listeners of the show will get a$75 sponsored job credit to help get your job the premium status it deserves at Indeed.com slash podcast. So just go to Indeed.com slash podcast right now and support our show by saying you heard about Indeed on this podcast.

14:44That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed Sponsored Jobs. This 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.

15:18You shouldn't have to chase them down. Powered by AI, Bill does all that simply and automated so that you don't have to. ACH, check, credit card, international wire transfers, they probably do carrier pigeon. Bill lets you pay and get paid how you want. Bill is the intelligent finance platform trusted by nearly half a million businesses and over 90 of the top 100 U.S. accounting firms to manage, move, and maximize their money. They've securely processed over a trillion dollars in real transactions. That is proven infrastructure you can actually trust. Talk with an expert at bill.com slash proven and get a$250 gift card as a thank you.

15:51That's bill.com slash proven. Terms and conditions apply. See offer page for details. For our third and final story, Joby and Uber just completed New York City's first electric air taxi flight from Manhattan to JFK. Couldn't travel time by 90%. Because the next addressable market is the 1 ,000 feet above our heads. All right, yeah, it's a funny thing Jack and I noticed when we were sharing Seinfeld DVDs in college. There's this joke from Seinfeld. 30 years ago about being stuck in traffic on the Van Wick Expressway to get to the airport. Hilarious, because the Van Wick Expressway is still under construction, and you'll still get stuck there on the way to the airport.

16:34The joke still works today, because it's about one half hours if you want to get from Midtown Manhattan to JFK, baby. So, Joby Aviation, the publicly traded electric aircraft company, sees their opportunity in that traffic jam. Here's the big news. Joby just completed their first ever point-to-point EVTOL flight in New York City history. Technical term, Nick, EVTOL? EVTOL is electric vertical takeoff and landing. Translation to that technical term. Translation is, it's like a helicopter, but it's electric. This is a flying taxi. And it's faster because it has six propellers, not one, all of which can tilt forward once it's in the air and basically go into airplane mode.

17:10Yeah, let's sprinkle on some really fast context here. Going from West 30th Street to JFK, this thing flies at 200 miles per hour. Which means a one to two hour trip in a taxi cab can become a seven minute flight. It feels like you're time traveling. Now this is key. Joby actually acquired Blade, the helicopter company, including their five travel lounges in Manhattan and JFK and Newark. So Joby shipped 90 ,000 passengers last year in these regular old helicopters. But for the first time, yesterday, they did an eVTOL flying air taxi flight from JFK to Manhattan. Biggest moment in transportation since the chassis.

17:48But funny question Jack and I got to ask as we researched this story. You want to ask it, Jack? How is an eVTOL better than a regular helicopter? The answer, the value proposition, is actually a total surprise. More on that in a minute. First, to sprinkle on some context, Joby's air taxis look like a drone in a helicopter had a baby that was raised by George Lucas in the Jetsons. The flying taxi kind of looks like a giant insect iPod. Would you say that, Jack? Is that fair? Yes, but it flies only marginally faster than a helicopter. Now, it's electric, so it's cleaner. But Jack, is that enough to really disrupt the helicopter?

18:21No, it's not, Nick. Which leads to the most important difference. It's actually the decibels. That's right, because this flying electric taxi is a fraction as loud as a chopper. The quieter electric motor doesn't have the thunderous earthquake effect that a chopper has if you're anywhere near it. Okay, but pause the project. I still got to ask, is that enough to really disrupt the helicopter? The quieter part is actually a big deal because it lets air taxis take off and land where loud helicopters are forbidden. That's the unlock. That opened the market. Being way quieter potentially allows air taxis to land everywhere without disturbing everything like a helicopter would.

18:57You could land an air taxi in Union Square, potentially, as long as you like make sure nobody's there. Yeah, another key here, Joby partnered with Delta to let future customers add on an air taxi flight to and from the airport seamlessly at checkout. And instead of building their own customer base, they're partnering with Uber so that you can upgrade from an UberX to an UberAir with a swipe of your finger. But besties, it always comes down to the pricing and that, Jack, what is it? The price of an air taxi flight from Manhattan to JFK or vice versa is reportedly going to be$200 per seat later this year.

19:29So if you're traveling alone, it's actually a competitive price with an Uber black car. So Jack, what's the takeaway for our buddies on the maiden voyage of the flying electric taxi? We are entering the 1 ,000-foot economy. Yetis, over the last few years, Jack and I have noticed a few new markets that have been opened up right above our heads. You already had airplanes at 30 ,000 feet and satellites in low Earth orbit. But new opportunities are emerging at the 1 ,000-foot level, just above the height of most buildings. Walmart and Amazon are doing grocery drone delivery already in Texas and Arizona.

20:02it. Burritos flying at you at 1 ,000 feet. ZipLine is a startup that had an$8 billion valuation earlier this year for drone delivery of critical medical supplies. That insulin is flying at you at 1 ,000 feet. And now Joby's flying electric air taxis, taking people to the airport at about 1 ,000 feet. Besties, the next infrastructure boom, it ain't underground and it ain't on the ground. It's in the air just above your roof. Jack, could you whip up the stories for us for Saviche Wednesday. Your hobbit feet are already wearing Birkenstocks. Now they want your toes and your foot dandruff too. Because unlike Alberts, Birkenstock is expanding in a way consistent with the brand.

20:40They're doubling down on ugly. For our second story, the UAE is leaving OPEC as oil is over a hundred bucks a barrel and gas is at four year highs. Interest rates aren't the captain of the economy anymore. Oil is. And our third and final story is Joby's electric air taxis. They completed their maiden voyage from JFK to Manhattan. And it's all part of the next frontier, the 1 ,000-foot economy. But besties, this pod's not over yet. Here's what else you need to know today. First, another doozy of a day for OpenAI. In day one of their trial, Elon actually took the stand. Under oath, Elon didn't say much we didn't already know, though, in his testimony.

21:18Okay, but separately, it leaked that OpenAI wants to make a phone, The first AI iPhone, basically. But that may be a problem because of this next headline. OpenAI's business is missing their targets big time. That was the third doozy. The world's biggest AI company missed their targets for both user growth and revenue growth last quarter. Second, the FCC is requiring Disney to renew their TV broadcast licenses two years early. This comes one day after the president urged Disney to fire Jimmy Kimmel again after a joke he said. The FCC is citing a DEI investigation as the reason for the early renewal requirement.

21:53But if you look at it, it could set up the biggest First Amendment test yet in the Trump administration, the FCC versus Mickey Mouse. And finally, an update to the inflation situation. Movie tickets have hit$50. That's right. To see Dune Part 3 at Regal Cinemas in IMAX, it's going to cost you$50 a ticket,$100 for that date night. Because the box office knows that you're willing to leave your living room couch for an epic in-person experience. Oh, and splurge, baby, which explains why IMAX stock is up 50 % in the last year and is now near an all-time high. Now, time for the best fact yet. This one sent in by Tiffany S., the legendary Yeti from lovely Ann Arbor, Michigan.

22:33A couple weeks ago, we covered the tomato trauma. Ah, yes. Basically, like five inputs to the cost of tomato are going up because of the war in Iran. Well, Tiffany points out there's an interesting historical precedent for all this tomato scarcity. During World War II, the Philippines lost access to their tomato imports. So a food technologist, Magdalo Lady Fernando, solved the problem for her home country. And how did she solve it exactly, Jack? By creating a ketchup made with vinegar, sugar and spices, okay, and bananas instead of tomato. That's right. The temporary solution worked so well that banana ketchup actually became a Filipino pantry staple.

23:09And still is today. decades after the tomato shortage has ended. Filipinos love their banana ketchup. Heinz, your move. Yetis, you look fantastic today. Jack, you are glowing. What is the big question today for our poll on Spotify? What do we got, Jack? How many more days will this AI store last before its human master shuts it down? Yeah, the AI store. It's lost$13 ,000 in about a month. The doors are going to lock because they're out of tokens. Let me tell you, if you want a lot of candles, they do sell a lot of candles there. Smells like a deal. Jack and I, we'll see you tomorrow.

23:49And before we go, a happy birthday to legendary Yeti Emily Liu, the master student over in Taipei, Taiwan. Happy birthday to Elizabeth Leonard. On the way to piano class in Fremont, California, she's turning eight and she is the next virtuoso on the piano. And Laura Bruskin, enjoy that birthday down in Arlington, Virginia. And happy birthday to the prolific Andrew Zucker from New York City hanging out just outside Boston. Just outside Boston. And Kareen Terzibachi over in Manhattan. Enjoy the best birthday yet. Happy birthday to Joel Pereira in Miami, Florida. And the Leyva triplets are turning 23 years old down in Tucson.

24:24Congratulations, congratulations, and congratulations.

24:29This is Jack. I own stock of Amazon. And even though I own between three and seven pairs of Birkenstocks, I do not own the stock.

25:06We'll be right back. Subject to Change.