The Hustle

​​🥇Tokyo 2020 = $20B

The Hustle - Silicon Valley Tech News


July 30, 2021

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Somehow, this is our last email for July 2021. See y’all on Monday (AKA somehow August 2021).

Today’s rundown:

  • Olympic returns: The economics of hosting the Olympics.
  • Walmart’s AWS: Walmart enters the software game.
  • Comfy doctors: Medical-wear is a big business.

Let’s do it.

The big idea

Is hosting the Olympics a bad deal?

A big part of the Olympics is watching which records fall.

One record that host city Tokyo probably didn’t want to claim was “most expensive Summer Olympics ever.” Per The Wall Street Journal, Tokyo 2020 will own the title with a $20B+ price tag.

The only salvation is that Russia somehow spent $50B on the 2014 Sochi Winter Games.

Why are the games so expensive?

It mostly has to do with construction. Dozens of sporting venues as well as the Olympic Village have to be built.

One Oxford study looked at the previous 5 Olympics and found that sports-related costs averaged $12B; nonsports costs like transportation and security cost even more.

To make matters worse…

… the nature of construction often leads to cost overruns. These expenses are shouldered by the host cities, and every Olympics has run over budget by an average of 172% since 1960.

To wit: the Tokyo Games were originally estimated to only cost $7.4B (the 1-year COVID delay added $2.8B alone to the bill).

Most notoriously: the 1976 Montreal Summer Games went over budget 7x and the city spent 30 years paying down the extra debt.

What about all the money the cities can make?

Ticket sales, tourism, and sponsors can certainly boost the bottom line (COVID has crushed all 3 for Tokyo 2020).

But there are some notable issues, per Business Insider:

  • The International Olympic Committee (IOC) is taking a larger slice of the TV revenue pie (4% in the 1990s vs. 70% from Rio 2016)
  • Upkeep for (often unused) stadiums costs $30m a year
  • Precious real estate is used up

Add it all up…

… and the international recognition and good times seem less and less appealing. As noted by Business Insider, fewer cities are even bidding for the event:

  • Summer 2004: 12 cities bid
  • Summer 2020: 5 cities bid
  • Winter 2022: Only 2 cities bid! (China beat out Kazakhstan)

So, what cities want to beat Tokyo 2020’s “record” next? Paris will try in 2024 while Los Angeles will give it a go in 2028.

SNIPPETS

Social shopping: Following in the footsteps of other social platforms, Twitter’s new Shop Module will let users shop business’ profiles. #ecommerce-retail

Watch out: These are the 30 most common vulnerabilities exploited by hackers, according to US, UK, and Australian security agencies. #privacy

Go green: Clean energy generated 21% of all US electricity in 2020, making it the 2nd-highest source behind natural gas. #clean-energy

The Hustle’s Ethan Brooks explains how iOS 15 can impact your email newsletter, from throwing off your analytics to undermining your business model. #hustle-picks

What’s next for Facebook? Ray-Ban smart glasses with AR capabilities. #big-tech

Virtual unreality: Japan’s virtual YouTube stars — AKA “VTubers” — aren’t real people, but they do make lots of real money. #emerging-tech

PayPal’s new “superapp” will include messaging, early access to direct deposit, and maybe new crypto features. #fintech-cryptocurrency

Retail, ecommerce

Walmart takes a page out of Amazon’s book

Walmart has long been accused of driving mom and pop stores out of business — now they want to help them out.

The company partnered with Adobe to offer software to small businesses that allows customers to order online and pick up at the store.

Walmart is the OG of curbside pickup

The firm launched its Site to Store service in 2007, becoming one of the 1st omnichannel retailers.

Fast forward to today:

  • Walmart’s online sales jumped 79% in its last fiscal year, with pickup and delivery up over 100%
  • “Buy online, order in store” grew from 7% to 22% of consumer order fulfillment since 2018
  • Top 1000 retail chains offering curbside pickup rocketed from 6.6% to 50.7% since early 2020

The strategy is reminiscent of Amazon’s approach with AWS

Amazon launched Amazon Web Services (now a $13.5B business) after being their own 1st and best customer.

  • A big difference is that Amazon doesn’t compete directly with most AWS customers.

After years of battling Walmart for customers, it’ll be interesting to see how many shop owners jump to support the retail behemoth itself.

Health Tech

D2C medical apparel companies are growing

If you’re a health care worker who needs comfortable gear stat, there are now a host of Direct to Consumer (D2C) options.

  • With jobs in the field predicted to grow 15% between 2019 and 2029 — accounting for ~2.4m jobs — Modern Retail is calling medical-wear the “hot new D2C fascination.”

They don’t want no (ordinary) scrubs

The medical apparel biz is worth $10B in the US and most pros buy their own scrubs. But the traditional boxy, uncomfortable, easy-to-stain cotton outfits leave much to be desired.

The biggest name shaking up the space is Figs. The company sells comfy, stylish scrubs and accessories straight to health care pros and — after going public in May — is now worth ~$6B (some think it’s Lululemon for health care).

The pandemic increased demand for comfy medical wear

In addition to Figs, there’s:

  • Clove, founded in 2018 as a shoe company for health care pros, which saw 533% growth between July 2020 and January 2021.
  • Jaanuu, which raised $25m and is now looking to go public.

Also worth noting: Figs and Clove donated supplies to frontline workers, a charitable move that also grew brand awareness.

AROUND THE WEB

🏂🏼Wow: A man made a Rube Goldberg machine obstacle course complete with juggling, skateboarding, and flips. And it’s great.

🪐 How to: Saturn and Jupiter are about to make a bright appearance in our night sky. Here’s how to see them.

🐗 Wait, what: A photographer snapped a nude man chasing a wild boar that stole his laptop. Now, she’s irked others — including a model railway company — are profiting off of her unusual photo.

☀️ Haha: Here lies a humble text editor that plays Sublime’s “What I Got” as you type. That’s it. That’s the whole thing.

🌧️ No, really: It’s hot in Dubai. To make it rain, the National Center of Meteorology is using drones to shoot laser beams at clouds.

🎶 Hmm: The Atlantic’s Joe Pinsker muses on the impermanence of our Spotify playlists and the music storage methods that came before.

Investor of the day

Nasir “Nas” Jones (Source: Anna Webber / Getty Images)

You may know Nas as the famous New York rapper. Born Nasir Jones, the 47-year-old is also a top celebrity investor through his fund, QueensBridge Venture Partners.

  • As noted by Dan Runcie at Trapital — a newsletter on the business of hip-hop — Jones has written checks to Casper, Dropbox, Genius, Lyft, Pillpack, Pluto, and Ring.

This year, he scored wins with 2 very notable public listings: Coinbase in April and Robinhood yesterday (it fell 8% on its debut, though).

AROUND THE WEB

(In case you missed them, here’s a roundup of our favorite reads from this week…)

🚘 Why used cars are so expensive right now, explained visually.

💀 Ashes to… vinyl records? Death startups get creative.

🥨 A ~$15k Doritos chip? It’s hardly the first collectible snack.

📱The QR code wave is just getting started.

🔢 Corporations want to shake Microsoft Excel. It’s not so easy.

Shower Thoughts

  1. “When we switch to electric vehicles everything is going to become more quiet.”
  2. “If we had cars that folded up into suitcases like in The Jetsons, people would accidently leave their kids, pets, and laptops in them.”
  3. “Little Caesar’s paid some marketing firm a ton of money to come up with ‘Pizza! Pizza!’”
  4. “It’s cruel how alcohol gives us confidence to try things, while simultaneously taking away our ability.”
  5. “Ninjas cover every part of their body except for their eyes, but the ninja turtles cover nothing but their eyes.”
via Reddit
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