💰 Big Tech is getting bigger


May 3, 2021

{date(‘MMMM dd, yyyy’,time(“now”))}
The Hustle

On May 1, superstar Justin Timerblake gave a shout-out to Kianna Davis, the creator of the hugely popular “It’s Gonna Be May” Justin Timberlake meme. We echo this sentiment: It’s an all-time meme and the source of infinite laughs.

 
The big idea
Big tech celebs

Big Tech is only getting bigger

Last week, we saw the latest quarterly results for the (unfortunately named) FAAMG Big Tech companies.

For the uninitiated, that acronym is collectively worth $8T+:

  • FB, Facebook ($923.6B)
  • AAPL, Apple ($2.2T)
  • AMZN, Amazon ($1.7T)
  • MSFT, Microsoft ($1.9T)
  • GOOGL, Alphabet ($1.6T)

The pandemic boosted Big Tech sales

The phrase “record growth” was a constant theme for Q1 2021 revenue: Apple sales were +54% YoY to $90B while Amazon jumped 44% YoY to $108.5B.

While growth was slower for the other behemoths, their Q1 sales numbers are still huge: Alphabet ($55B), Microsoft ($42B), Facebook, ($26B).

For perspective, here’s how much these companies made per minute in the first 3 months of the year:

  • Amazon: $837k
  • Apple: $691k
  • Alphabet: $427k
  • Microsoft: $322k
  • Facebook: $202k

And it’s not just sales

As reported by The Wall Street Journal, here are some other notable Q1 stats:

  • iPhone sales alone hit $47B, with the average retail price hitting $847
  • Microsoft Teams has 145m daily users, more than 7x the figure from 1.5 years ago
  • Amazon’s US employee count hit 950k, ~2x the same period last year
  • YouTube revenue was +49% YoY (and its projected $29-$30B run rate for 2021 puts it on par with Netflix)
  • Facebook apps (i.e., FB, Instagram, Messenger, WhatsApp) were used by 3.4B+ people at least once in the past month

Perhaps the most jarring number?

FAAMG now makes up ~25% of the total value of the S&P 500 — 2x the share from 5 years ago. Unfortunately for us, it looks like that ghastly acronym isn’t going anywhere.

Share on Facebook Share on Twitter Send as email to a friend View on our website
SNIPPETS

ByteDance CFO Shouzi Chew will take over the top job at TikTok, which is owned by ByteDance. The announcement signals an optimistic view from the short video app, which was almost banned in the US last year.

Dropping the hammer: The EU has accused Apple of antitrust practices for its App Store policies. The max potential fine is $27B.

So much crypto: Andreessen Horowitz was 1 of the biggest winners from the public listing of crypto exchange Coinbase. The VC firm wants to keep up the momentum and will launch a ~$1B crypto fund.

 
Office Talk
Basecamp logo

This software firm is 1/3 smaller than it was last week

How 1 memo lead to an exodus at software firm Basecamp

Basecamp was a hot topic in tech last week.

And the chatter had nothing to do with the company’s project management software: It was the result of a controversial memo from CEO Jason Fried that banned “societal and political discussions” from internal work messaging apps.

Why was the memo written in the first place?

Over the years, Basecamp employees kept a list of customers — largely of Asian or African origin — with “funny names,” according to The Verge.

Management knew about the list but failed to take action.

To quell anger over the memo and its handling of the controversy, Basecamp offered buyouts…

… to any employee that wants to leave

The exit packages are quite generous: 6 months pay for employees with 3+ years of service (3 months severance if you were there for less than 3 years).

So far, ~⅓ of the company’s 57 employees have taken the offer, including Basecamp’s heads of design, marketing, and customer support.

In the original memo, Fried writes that politics and social discussions have become a “major distraction” for the company.

Whether or not Fried is right, Basecamp now has a much bigger problem to deal with.

Share on Facebook Share on Twitter Send as email to a friend View on our website
Free Resource

How *NOT* to run social media at your startup…

  • Using the same exact content for Facebook, LinkedIn, Pinterest, etc. Been there.
  • Firing off posts without checking back for engagement and UGC. *Forehead slap*.
  • Posting your Taco Tuesday pic on Wednesday because you goofed up your days. Ouch.

Any one of these costly mistakes can seriously hinder your social media efforts. But no worries — all it takes is a little organization to turn your social from 0 to hero.

Download the free content calendar template + guide from the experts at HubSpot

This easy-to-use, color-coded tool has it all:

  • Platform-specific calendars to maximize your efforts
  • Key holidays and campaigns so you don’t miss a thing
  • URL and UTM parameters to track performance
  • Transparency for your entire team. Synergy, baby!

So trust the social gurus at HubSpot. Your life will be a breeze.

Show me the template →
Real Estate
skyscrapers

(Source: Johannes Eisele / Getty Images)

This tax change would reshape the entire real estate industry

President Biden’s new tax proposal is making waves:

  • A new income tax rate of 39.6% for the top 1% of earners
  • A new capital gains tax rate of 39.6% for the top 0.3% of taxpayers ($1m+ in annual earnings)
  • An increase in IRS audits of those who earn $400k+

But another change would completely reshape real estate…

The tax loophole in question is known as ‘1031 exchanges’

As explained by The Wall Street Journal, this part of the tax code has existed since 1921 and allows investors to defer taxes on real estate gains, as long as the proceeds are revinested in other properties within 6 months.

In theory, property taxes could be deferred indefinitely. The majority of 1031 exchanges are done by wealthy individuals, often pooling funds together to purchase apartment buildings or commercial real estate.

How much is it worth?

Congress estimates that the loophole would save real estate investors $41B+ between 2020 and 2024.

The Biden proposal would eliminate 1031 exchanges

Supporters of the tax code say that deferred taxes are a source of funds for job creation and investment in local communities.

Organizations representing farms and Asian-American hotel owners are among those lobbying against Biden’s tax change, per the WSJ.

It’s too soon to tell how much of these tax proposals will become reality — but investors of all types are bracing for huge changes.

Share on Facebook Share on Twitter Send as email to a friend View on our website
Buffett-ism of the day
Warren Buffett

The Oracle (Source: Michael Buckner / Getty Images)

Warren Buffett and Charlie Munger held their 2nd straight virtual annual meeting for Berkshire Hathaway.

In his opening remarks, Buffett did a little history lesson and talked about the world’s 20 biggest companies in 1989, per CNBC.

Today, none of them are on the same list.

“We were just as sure of ourselves, and Wall Street was, in 1989 as we are today,” Buffett remarked. “But the world can change in very, very dramatic ways.”

That’s a fair warning to the FAAMG tech stocks.

SHARE THE HUSTLE
Hustle Cons Greatest Hits ebook

Over the years, we’ve learned… secrets.

The business secrets, tips, and tricks that have helped founders go from zero to millions — and even billions — of dollars.

Want to see ‘em? Just refer {3-referral_count} more friends to The Hustle and we’ll send you our curated set of interviews with founders from brands like Zola, AWAY, Vungle, Bonobos, and more.

Here’s a message you can use to share with your friends:

Hey! Do you read The Hustle? It’s the best daily business newsletter out there — only takes 5 minutes to read and you’ll sound like the smartest person in the room. Sign up here, it’s free: {referral_url}

P.S. You can always check your referral count here.

Share The Hustle →
SHARE THE HUSTLE
Stickers

Laptop lookin’ sparse? Water bottle lookin’… clear?

You’re only {5-referral_count} referrals away from your first Hustle swag, Sam’s Stickers. Slap a few of these bad boys on the ol’ laptop and let everyone in the coffee shop know that you know. You know?

Here’s a message you can use to share with your friends:

Hey! Do you read The Hustle? It’s the best daily business newsletter out there — only takes 5 minutes to read and you’ll sound like the smartest person in the room. Sign up here, it’s free: {referral_url}

P.S. You can always check your referral count here.

Share The Hustle →
SHARE THE HUSTLE
Pint Glass

Look at you, smarty pants. You’ve already shared The Hustle with {referral_count} friends and enemies.

But hey, just because you’re a business nerd doesn’t mean you can’t enjoy a cool bevvy. Get {10-referral_count} more referrals and we’ll send you a pint glass etched with The Hustle logo.

Anyway, here’s a message you can use to share with your friends:

Hey! Do you read The Hustle? It’s the best daily business newsletter out there — only takes 5 minutes to read and you’ll sound like the smartest person in the room. Sign up here, it’s free: {referral_url}

P.S. You can always check your referral count here.

Share The Hustle →
SHARE THE HUSTLE
Ambassador Rewards

You’re only {15-referral_count} referrals away from earning our signature dad hat meant for ladies, gents, and dads alike to show folks they’re in the club.

Here’s a message you can use to share with your friends:

Hey! Do you read The Hustle? It’s the best daily business newsletter out there — only takes 5 minutes to read and you’ll sound like the smartest person in the room. Sign up here, it’s free: {referral_url}

P.S. You can always check your referral count here.

Share The Hustle →
SHARE THE HUSTLE
Always be Hustlin' tee

You’re close to the most coveted item in Hustle-land: The Always Be Hustlin Tee.

The fabric? Luxurious. The cut? Relaxed, yet refined. The message? Indisputable.

Share this link with {25 – referral_count} more of your friends to get the goods:

{referral_url}

P.S. You can always check your referral count here.

Share The Hustle →
SHARE THE HUSTLE
Hustle Hoodie

Damn, you’re on a roll. You’ve got the pint glass. You’ve got the hat. It’s time to complete your collection, don’t you think?

Get {50 – referral_count} more referrals and we’ll send you our favorite piece of Hustle swag: The Startup Sweatshirt. Slipping into this piece of fleece might just transport you to Silicon Valley (or maybe somewhere better, your pick).

Share this link to get the goods:

{referral_url}

P.S. You can always check your referral count here.

Share The Hustle →
SHARE THE HUSTLE
Trends Screenshot

Hey, we see you. You’re out there spreading the gospel of The Hustle like it’s nobody’s business. Seems like you might be ready for a little more…

Get {100 – referral_count} more referrals and we’ll slide you a free subscription to Trends.

And no, this ain’t an ad. We just think you’re the kinda person who would thrive in our top-tier community (it’s usually $299) full of founders, investors, and builders (AKA ambitious, no B.S. business folks like you — and enjoy our premium research and content.

Share this link with {100 – referral_count} more of your friends to get the goods:

{referral_url}

P.S. You can always check your referral count here.

Share The Hustle →
SHARE THE HUSTLE
Plane

If you love us so much why don’t you just marry us?

Get {1000 – referral_count} more referrals and we’ll fly you to The Hustle HQ in beautiful, downtown eastern Austin, Texas. Round-trip flight, 2 nights in a hotel downtown, and some wining and dining with The Hustle fam.

Heck, you practically work here anyway. Copy & paste this link to share:

{referral_url}

P.S. You can always check your referral count here.

Share The Hustle →

How did you like today’s email?

Daily briefings, straight to your inbox

Business and tech news in 5 minutes or less

Join over 1 million people who read The Hustle

Psst

How'd Bezos build a billion dollar empire?

In 1994, Jeff Bezos discovered a shocking stat: Internet usage grew 2,300% per year.

Data shows where markets are headed.

And that’s why we built Trends — to show you up-and-coming market opportunities about to explode. Interested?

Join us, it's free.

Look, you came to this site because you saw something cool. But here’s the deal. This site is actually a daily email that covers the important news in business, tech, and culture.

So, if you like what you’re reading, give the email a try.

If you don’t like it, unsubscribe any time. Privacy policy.