🩱 “Keeping Up With $5B” — Skims’ money situation. Country Music’s AI hit. Netflix’s theme park opens. +Harvard Grade InflAAAAtion

0:28This is Nick. pod. For our first story, Kim Kardashian's skim brand just hit a$5 billion valuation in the private stock market. But is$5 billion a lot? Well, it's 10 times more than Victoria's Secret and two and a half times more than Nike. According to Wall Street Math, we'll explain. For our second story, the number one country song in the charts right now, we're 99 % sure it's AI. Yeah, Breaking Rust is the mysterious new AI singer, but like any good country song, this one has got layers. And our third and final story is Netflix. Netflix just opened its first theme park, Netflix House, just outside of Philadelphia.

1:07It's like Disney World, but done Netflix style. So let's go inside together. But Yetis, before we hit that wonderful mix of stories, I mean, have we done a better mix? I love this mix, Jack. Nick, it seems like every week there's a new type of inflation we got to deal with. Yeah, we covered for the Yetis, shrinkflation, greetflation, tipflation, fee-flation, post-inflation, egg-flation, you name-flation. But the latest inflation is the smartest, grade inflation. Actually, Jack, it's the dumbest, and it's hitting hardest over at Harvard. Get this, 60 % of all final grades given out at Harvard University last year were A's.

1:44I'm sorry, Jack, did the Harvard professors miss out on the chapter about the bell curve? More than half of Harvard students are straight A students. I'm sorry again, Jack. Is that normal, my friend? No, not even for Harvard is that normal. No, in fact, besties, Jack and I strapped on our J.Crew pleated khakis, and we jumped into the numbers. 20 years ago, only 25 % of the grades at Harvard were A's. Today, 60 % are A's. I mean, we're not math majors, but that's what our TA would call an outlier. How do you like them apples? They're not adding up there. They're not adding up. Jack, as a lacrosse player, I can tell you, there's someone on the Harvard lacrosse team who should be getting a C every now and then.

2:23But here's the wildest part. Students are getting better grades at Harvard, even though they're doing worse at school. Get this, Professor Pinker has given the same psych exam at Harvard for 20 straight years. And in those 20 years, the average test score is down by 10 points. Okay. But the average grade is up. How is that? I believe the SAT word for that, Jack, is dubious. Yet is the gradeflation situation got so bad, the professors have been summoned to the dean's office. Because in the Ivies, besties, B is the new D, and D is the new... I got a number! How do you like them apples? Hey, Goodwill Humpton, how do you like them transcripts?

2:59Jack, let's hit our three stories. Fifteen 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. Jack Nick, that's it. I don't even think they need to practice. Fifty percent, that's a fat tip. T-Boy City on your at list. If you know, you know, cause we ready to go. We can't wait no more. So just start the show.

3:26Start the show. Start the show. First, a quick word from our sponsor.

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4:45So use code T-Boy for 20 % off your first order at BureauBrewing.com. Monarch. All right, yet he's one lobster roll. No joke, 50 bucks on Nantucket. And why is that a problem, Jack? Because we're going to Nantucket this summer on a joint family T-Boy trip. It's a write-off. It is expensive, but we will travel with peace of mind because our finances are organized in Monarch despite the lobster rolls. Monarch is the personal finance app that tracks everything. Accounts, investments, savings goals, and spending. Get your first year of Monarch Core for half off, just$50 with promo code T-Boy. Monarch shows visually how much you're spending this month compared to the average month, which is really useful.

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6:00For our first story, we just got an update on Skim's stock price. Kim Kardashian's apparel company is now worth five billion bucks. Using Wall Street math, Skims is now worth two and a half times as much as Nike and 10 times as much as Victoria's Secret. We'll explain how we did that. Now, Yetis, Kim Kardashian, technically, she's still not an actual lawyer. Yeah, she hasn't passed the California bar yet, although she is working on it. However, Kim Kardashian is a very successful fake lawyer, Jack. Very successful right now. True, true. On TV, Kim Kardashian stars in the new show All's Fair, the number one show on Hulu right now.

6:37Also, Kim's still the matriarch's patriarch of the Kardashians, her OG reality show. I don't know if that's the correct label for her, but it sounds right. We'll roll with it. And Kim's apparel brand, Skims, well, they just raised venture capital money at a whopping$5 billion valuation. That's almost one lift. And with that fresh new cash, they're going to build new physical stores on top of the 18 that Skims already has. Building stores faster than Kris Jenner can get a facelift. But two years ago, besties, we said that Skims was the Spanx of Gen Z. Wrong. Because since Skims' last fundraise, they've added a men's line.

7:12They've outfitted the U.S. Olympic team. They've partnered with the NBA and the WNBA. And they've become the latest arm candy for Nike. So forget Spanx. Kim's Skims is basically a full-body experience. And they're co-ed. So in that time, the valuation has risen from$4 billion two years ago to$5 billion today. Okay, but pause the pod for a sec. Besties, when Jack and I saw this fundraise, we were kind of surprised it wasn't more. With its current$5 billion valuation, the private stock is only up 20 % in two years. The S &P 500's up way more than that. So, Yetis, Jack and I put back on our financial, I'm not going to say caps, I want to say VES here, and decided we can't compare SKIMS to the S &P 500.

7:52Right, Jack? Yeah. The S &P 500 is on fire simply because of like seven AI companies at the top. On the other hand, what we should do is compare Skims to other apparel companies in the public markets. And that's where the comparison gets interesting. You see, Skims is worth far less than Nike and Lululemon or The Gap. It's simply a way smaller company. But by using Wall Street math, we can properly compare Skims Apple to Apple by looking at its sales multiple. Exactly, so let's do it, Jack. Whip up the whiteboard. Skims, their$5 billion valuation, that is five times their sales numbers because Skims will sell about$1 billion of goodies this year.

8:28So 5x the sales. On the other hand, Nike and Lululemon's sales multiples are just two times their sales. Their valuation is twice as much as their revenues. So if you look at the multiple, Skims is worth two and a half times as much as Nike and Lululemon apples to apples. Jack, how about Victoria's Secret and The Gap? Let's compare their sales multiples to Skims. Their market caps are actually less than their sales. And again, Skims' valuation is five times bigger than their sales. So besties add up all these numbers and investors want Skims stock way more badly than they want those other apparel and underwear companies.

9:03Probably because it's way faster growing. True. Has a way higher profit margin. And let's be honest, it's just a way cooler company. Well put, Jack, well put. Or maybe it's because Skims' ceiling is, to quote Elphaba, Yes. Unlimited. And now we are officially the first podcast to break down Skims' valuation, weave in wicked, and then hit our takeaway. All wearing underwear that we wish was Skims. Yeah, if you're listening, Kim, which we know you are. So Jack, what's the takeaway for our buddies over at Kim's Skims? Skims will be Victoria's Secret plus L 'Oreal plus Lululemon if everything goes right.

9:39Now, Yetis, Jack and I are actually interviewing Jim Cramer next week in New York. And you know what Jim likes to talk about? A thing called total market opportunity. opportunity. Basically, if everything goes right, what markets could this company win in? That's the total market opportunity. Well, Skims started as a shapewear brand and then a loungewear company, and now it's athletic apparel and pretty soon footwear. Skims also owns 20 % of Kim Kardashian's beauty brand, so they're in cosmetics too. Also, Jack, Skims' latest product, it's a sculpting face wrap that you'll wear at night. I don't know what category that is.

10:12It isn't a category. I don't know why it's not a real category. It's a thing. It's just a thing. Will Skims someday outfit a presidential candidate and get into formal wear? Probably. Besties Kim Kardashian's fame and track record as a tastemaker is best in the business. Yes, the disruptors can eventually get disrupted, but Kim doesn't see a limit in the categories that Skims can enter. So using Jim Cramer's famous framework, what is Skims' total market opportunity to become the brand for all things beauty. For our second story, the number one country music song in America right now was written, sung, and performed by AI.

10:51For the first time ever, AI is topping the music charts, and nobody knows what to do about it. Okay. Yetis, let's just set the scene for you for a sec. It's New Music Monday. You're driving in your car, you put down your Diet Coke in the a pulver, and you turn up the radio, and then you hear this. Push and play. You can kick rocks if you don't like how I talk. Now, if you didn't hear something just now, it's because Spotify stopped that song from being played. Yeah, yeah, for IP reasons, whatever, whatever. But if you did hear it, it was a velvety voice, a gravelly tone, and it was the number one country song right now.

11:25Jack, the album cover, I'm schvitzing looking at it right now. It's the millennial version of the Marlboro Man. I have like hearts popping out of my eyeballs. He's so good looking. That singer on the album's got like a five o 'clock shadow that would make Garth Brooks blush. That song is called Walk My Walk by a new artist called Breaking Rust. It's number one in the Billboard charts for country music digital sales right now. And it's been streamed three and a half million times on Spotify. There is even early chatter that this could get a Grammy. But here's the update, yet is. It's more like chart-official intelligence when it comes to this song.

11:59Because that top country song you just heard is A.I. That's right. It's a robot, Reba McEntire. It's AI Johnny Cash. And we thought Dolly Parton was undisruptible, and then we get this AI country song? Now, the comment sections blew up. Some people are pissed, others don't care that it's AI, but everyone's bopping their heads because this is a bit of a banger. So besties, Jack and I dove in T-boy style. How do we know breaking rust is artificial intelligence? And there must be a person behind it at some point, right? Well, as we dove in, we discovered, like much of country music, it's a complicated story.

12:33Neither Walk My Walk nor the artist Breaking Rust is labeled as AI on Spotify, and there's no bio saying anything about them. Also, Jack, the hunk on the album cover, I can't really tell if he's real or he's fake, if he's made by ChatGPT or what. So how do we know it's AI? Well, music identification tools have tested out the voice and pegged the probability that it's AI at 90%. But Jack, interestingly, in the credits, it mentions a man, Obier Rivaldo Taylor, as the composer and lyricist for the song. That sounds like it could be a human. It does. But if you Google the name, there's only one hit, and it's an AI music website.

13:10So Jack, there's no LinkedIn, no website, no real source that a human is behind this song. There is an Instagram account, but it's not verified, and the images do look very AI on the Instagram. So add it all up, Yetis, and yeah, we're pretty sure this country music song is AI. And country music was a strategic choice if you're trying to top the charts with AI. Oh, and why is that, Jack? Country music has wonderful depth, but it tends to follow some formulaic themes. Get this, 18 % of country music songs reference a truck in their lyrics. And 32 % reference an alcohol. So there's a pattern that large language models can follow.

13:46And those large language models have some friends in low places. So Jack, could you please honky-tonk the takeaway for us for our buddies who are everyone listening to this AI song? This is the first of firsts. Yetis, hearing that the number one country music song right now is entirely AI is shocking. But it's also not shocking. Because every day as AI advances, it has a new accomplishment in a new creative field. Yeah, remember earlier this year we covered the Velvet Sundown rock song that was the first AI song to pass one million listens? It was only a matter of time before another AI song would reach number one in the charts.

14:24And besties, the way we see it, it's kind of inevitable that we'll end up seeing more and more of these firsts regarding stuff done by AI. We'll see the first factory run entirely by AI robots, not humans. Or Jack, the first unicorn startup to hit$1 billion with just AI employees. The first AI movie to win an Oscar for best animated film. Now besties, maybe we hope there is some stuff that AI can just never beat a human being yet. If my son's first novel is written by an AI author, that'll be troubling. I hope that's not the future we're living with. That would be troubling, Jack. But we are certain that this won't be the last time an AI has a first time.

14:58This is the first of many future firsts. Now, a quick word from our sponsor. Upwork. Yeah, it is. Before we had a podcast, we had a newsletter. And the moment that newsletter began growing, it's not when we came up with the clever subject lines with the emojis. It's when we found the right freelancer. Freelancer built a referral program that grew our newsletter, which helped launch this podcast, which helped us sell our company, which we eventually spun out, and which eventually got us to where we are today. Yeah, that's the story. Having the right expertise at the right time, that can make or break your business.

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17:08For our third and final story, House of Netflix opened this week at a mall just outside Philadelphia. It's Netflix's Disney World, but done Netflix, sir. Because Netflix doesn't copy and paste, they copy and recreate. Ah, Squid Game Jack. Horrifying. Horrifying show. But if you eliminate the risk of death, that sounds kind of fun. Yeah, and you can do that now at Netflix House, the streaming giant's first ever theme park. House of Netflix occupies 100 ,000 square feet in a suburban mall that used to be Lord and Taylor. Jack, you can still smell the hanty ants pretzels over there. And at this Netflix house, you can play a game of red light, green light from Squid Game.

17:49Yeah. Or pretend you're in Hawkins rescuing your buddy from a demogorgon. The front of the new Netflix park? What's a giant red envelope and why is that, Jack? That's a nod to Netflix's DVD by mail early days. Yeah, just an FYI for all our Gen Z listeners out there. Now, besties, you do not need to share your mom's Netflix password in order to get into this thing. No, unlike Disney, it's free to enter. This Netflix house has a gift shop, a mini golf course, a movie theater, a restaurant, and Netflix characters everywhere. Although all those things cost money. In fact, the flagship experience, which is basically a ride based on the show Wednesday, you got to pay 39 bucks per person to ride on this thing.

18:27That's two and a half months of Netflix or five months of Netflix if you brought a date. Or one month of Netflix if you pay to have no ads. Or zero Netflix if you are still using your mom's password. But besties, this was Jackson, my first reaction when we saw Netflix's first theme park. This is Netflix at Disney World. Yeah. They're entering the theme park business. Six Flags just lost a flag. And you know what? It makes sense when you understand the business model here. Disney makes almost no money on streaming or on their movies these days. Disney has become a physical business. Remember when we covered Disney's earnings, theme parks are two-thirds of Disney's profit right now.

19:03So for 20 years, Netflix has chilled with you in your house, but now they're chasing experience dollars. However, there are some key differences here we should point out. Like, Jack, what is Netflix doing different than Disney? Well, they're choosing non-Disney cities. Yeah. Netflix is in Philadelphia now, then Dallas in December, and they're opening up their third Netflix house in Las Vegas in 2027. Basically, if you lost a Macy's near you, then you're probably getting a Netflix house one of these days. True. Second difference, Netflix is doing it leaner than Disney. Yes. They're not building a gigantic, you know, 500-acre park.

19:36They're just filling some existing retail space that's empty. Again, if Macy's went out of business near you, you're probably getting a Netflix house. And the third difference between Netflix and Disney theme parks is our takeaway. So Jack, what's the takeaway for our buddies over at Netflix? Netflix rents, Disney buys. Yet is most of the content you see on Disney Plus or at Disney World these days is acquired. Pixar, Star Wars, Marvel, they were all giant Disney acquisitions. Fox Studios was most giant of all. But on the other hand, Netflix has created a ton of their content in-house straight from the ground up.

20:15Stranger Things, Bridgerton, Squid Game, all built by Netflix, all owned by Netflix. Now, Netflix does rent from time to time, like they licensed WWE, they're currently renting Shrek, and they pay the Addams Family for IP related to Wednesday. True story, they pay the Addams Family for Wednesday. But for the most part, Netflix has been able to use data to inform smart creative bets that win. And that has avoided massive expensive acquisition splurges of creative IP like Disney has done. House of Netflix, it's their Disney World. But it doesn't buy them, it builds them or rents them. Jack, could you whip up the takeaways for us for the new Friday?

20:52Using Wall Street's preferred valuation metric, Skims is now worth two and a half times more than Nike. Because Skims' total market opportunity is everything related to beauty. For our second story, Breaking Rust is number one on the Billboard country charts. The human behind it remains anonymous. Besties, this is the first chart-topping AI song. The first of the first. And our third and final story, Netflix House is open just outside Philadelphia. It's their leaner, city-focused take on a theme park. Never forget that Disney buys, but Netflix rents. But besties, this pod's not over yet. Here's what else you need to know today.

21:31First, the government shutdown's air travel trauma has caused two very interesting phenomena. First, private jet demand surged 42 % in the last few weeks as commercial flights got more and more delayed. But, besties, if you can't afford a private jet yet, then the train turned out to be your go-to transportation. That's right. Amtrak demand was up 12 % before Thanksgiving. And second, if you're on the fence about getting a Tesla this year, Tesla has a new strategy. Rent one for$60 a day. It's Tesla's version of the 30-day free trial, but it's maximum seven days and it's not free. It's$60 a day.

22:09Oh, and if you end up buying it, you're credited the amount you paid to rent it for those first few days. Yeah, with the$7 ,500 tax credit gone, electric car companies are getting creative. Or you could rent it for one day, drive for Uber, and make money on it. Anyway, we're getting ahead of ourselves. Totally. Yeah, you could. And finally, Apple's newest product is a sock. A giant$230 cross-body sock. That's not exactly correct. Technically, this is a knit iPhone holder that you wear like a man bag, kind of like over the shoulder, across the chest. It's designed by a Japanese designer. So it's a sock that doesn't go on your feet, Jack?

22:47You put your iPhone in. It's like a purse just for your iPhone. Besties, the best, worst holiday gift of the year is a$230 iPhone holding sock. This is actually an Apple product sold on Apple Store. Now time for the best fact yet. This one sent in by a legendary Yeti, Dylan Steinfeld from lovely Hotlanta, Georgia. Push and play. Here we go. Yetis and besties, your local hit studio coaches' favorite exercise, the burpee, doesn't inherently mean anything. The burpee was invented by Royal Burpee, a physiologist who in 1939 created the exercise as a fitness test. It was later used to assess fitness by the military ahead of World War II.

23:27So next time you're in the studio suffering and doing a bunch of burpees, don't blame your coach, blame Royal Burpee himself. Okay, when he first said studio, I thought he meant podcast studio. I know, I know, I know. You know, I like to spot you when we're in the studio, Jack, but yeah, this is a whole new level, man. Now, in high school, we called it an up-down. Burpee's a better name. Royal Burpee, though, is the best name. If only he had trademarked that term. Yetis, you'll look fantastic today. And if you are looking at us because you're watching us on YouTube right now, we love seeing you over there, don't we, Jack?

24:00Smash the subscribe But yeah, if you're watching us on YouTube, remember to like us and subscribe and drop a comment so we can hang out with you there, too. First thing I do every morning is check the YouTube comments and reply to the ones that reference me. If you know, you know, Jack and I will see you tomorrow.

24:19And before we go, congratulations to legendary Yetis, Kristen Sachorsky and Eric, who are celebrating the best wedding yet this weekend. And the maid of honor, their sister, is a longtime Yeti. You guys look fantastic. And Adam Brink, the crab man from Baltimore up in Brookline, Massachusetts, is celebrating the most fantastic birthdays. And a big shout out to Kelsey Black, one of the four finalists for the Community Builder Award during the Austin Business Women Awards. And Rima Nayak and Sean Thomas down in Atlanta, Georgia, have been together for eight wonderful years. Congratulations, guys.

24:55Happy anniversary. And to anyone else celebrating something today, make it a T-boy. Like, subscribe, and celebrate the wins. This is Jack. I own stock of Disney, Netflix, and Victoria's Secret. Nick owns stock of Lululemon and Nike. And we both own stock of Spotify and Apple.

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