PLUS: This company shaped Biden’s view on business.
|The Big Idea|
Salesforce and Slack want to combine forces to take on the Death Star known as Microsoft
Business magnates love quoting Sun Tzu, the Chinese military philosopher.
With news that SaaS pioneer Salesforce is looking to acquire Slack, Tzu’s adage, “the enemy of my enemy is my friend” comes to mind.
In this case, the common enemy is Microsoft.
Slack’s shares spiked ~38% on the news
According to the Wall Street Journal, Slack’s workplace competitors have grown much faster during the pandemic:
The video opportunity has passed and Microsoft is aggressively bundling Teams into its other enterprise offerings like Office (to the point that Slack filed an antitrust suit in Europe).
Salesforce wants in on the workplace
The core of Salesforce’s business is right in its stock ticker, $CRM: customer relationship management. Marc Benioff — who founded the company in 1999 — has built a $225B software beast in this niche.
Benioff has been eyeing workplace collaboration for more than a decade. Per the WSJ, his company:
Meanwhile, Microsoft is creeping into the CRM space with its Dynamics product. And although Salesforce has much greater market share (~20% to ~3%), the threat is all too real.
Benioff loves doing deals
And he’s been making it rain in recent years:
With Salesforce up 50% since late February, Benioff possesses a valuable currency known in the industry as “funny money” (AKA a high stock price).
He’s ready to spend and has his target: Slack, currently valued at $23B.
All roads lead us to this Sun Tzu quote: “Invincibility lies in the defense; the possibility of victory in the attack.”
- Facebook’s Libra cryptocurrency project launched in 2019 and immediately ran into problems because, well, governments don’t want the ZuckBuck to replace their national currencies. Now, Libra may launch a scaled back version in 2021.
- Japanese firm Kamenya Omoto has a project called “That Face” which offers people $380 to have their faces copied onto 3D masks which the company then sells to other people (that have seen too many horror movies) for $750.
- 427k: That’s how many workers Amazon added over the past 10 months, roughly equal to the populations of Minneapolis or Oakland (or collective unused Audible credits we have).
- Black Friday online sales reached $9B in the US (+22% YoY). With sales of $3.6B (40% of total), the top-selling item was
- Did Apple upsell you its extended warranty? Probably yes. AppleCare+ brings in $7B of revenue a year on the program, which would make it a top 10 commercial line insurer.
- “Luke, I am your father”: David Prowse, the 6’6 actor who played the Darth Vader (voiced by James Earl Jones) died at the age of 85.
- Adding $TSLA to the S&P 500 index next month will trigger $100B in trades. To blunt this price impact, S&P is considering adding the stock over multiple days (we suggest 69 days).
A Chinese tech deal shines a light on the $35B world of digital ad scams
Earlier this year, short-selling hedge fund Muddy Waters released a report that accused China’s version of Starbucks (Luckin’ Coffee) of massive fraud.
The report was right — and it catalyzed a $5B market value wipeout of the coffee chain.
Muddy Waters — named after the Chinese proverb “muddy waters make it easy to catch fish” (and not the legendary blues musician) — is back and alleging a multibillion-dollar fraud related to click farms and fake views.
The target: Chinese live-streaming platform YY Live
Two weeks ago, Chinese search giant Baidu announced plans to buy YY Live (owned by social media firm Joyy) for $3.6B. Shortly afterward, Muddy Waters released a report making the following claims about YY:
YY strongly contests these claims. But if they turn out to be true, the company will have a much larger problem on its hands.
Scams cost the digital ad industry $35B a year…
… that’s equal to ~10% of the industry’s annual revenue of $333B, according to research cited by The Economist.
Notable scams include:
Marketing pioneer John Wanamaker famously said of advertising, “half the money I spend is…wasted; I just don’t know which half.”
These scams make everything in the industry even more opaque.
You might even say… it muddies the waters.
Typeform started in a room full of toilets
We loooove Typeform, the beautiful new way to build surveys — we use it for everything.
So imagine our surprise when we discovered they got their start as an out-of-the-box lead gen idea for a bathroom company’s showroom floor?
8 years later, and they’re now our #1 way to get in touch with you, The Hustle’s beloved audience.
We use Typeform to…
- Easily onboard new subscribers
- Gather feedback from long-term Hustle diehards
- Run brand surveys for our valued advertisers
- Get feedback on our writing
It’s the most beautiful, simple, seamless, human way to get the feedback your business needs to be it’s best.
Don’t believe us? See for yourself right here:
President-elect Joe Biden in 1988 (Source: Getty Images / Joe McNally)
How chemical giant Dupont shaped Joe Biden’s views on business
In 1953, Jean and Joseph Biden Sr. moved from Scranton, PA (that’s right, home to Dunder Mifflin of The Office) to Claymont, Delaware.
President-elect Joe Biden was 9 years old at the time and would spend more than half a century in Delaware, the business-friendly state he represented in the US Senate from 1972 to 2009.
For decades, the largest employer in Delaware was DuPont
According to the Wall Street Journal, the chemical giant — which created products like nylon and Teflon — employed 27k people (1 in 10 of the state’s workers) in 1990.
The company funneled part of its profit into philanthropic ventures, funding so many hospitals, schools, and charitable foundations that Delawarians sometimes call it “Uncle Dupie.”
Today, DuPont is the state’s 12th largest employer (3.5k workers)
The chemical firm fell behind competitors and went through a corporate makeover at the behest of activist investor Nelson Peltz. DuPont merged with Dow and, last year, the combined entity was split into 3 companies.
Biden tells close aides in private that DuPont’s restructuring and downsizing is “Exhibit A of modern capitalism gone awry” whereby corporations have prioritized shareholders over communities.
The President-elect’s economic platform aims to address this by:
While critics note that corporate giants of decades past can’t contend in today’s business landscape, the lessons of Uncle Dupie are as relevant as ever.
|Quotes of the day|
When Tony Hsieh took over Zappos as CEO in 1999, the ecommerce world was tiny, and convincing people to buy things online was a huge challenge.
His solution was to make the experience so good that all worries melted away: free shipping, free returns, live chat, and incredible customer service.
Amazon allowed Zappos to operate as an independent entity (including a failed experiment using the “boss-less” management technique, holacracy).
Hsieh enshrined his philosophy in the 2010 management book Delivering Happiness. Here are his words of wisdom:
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Are we there yet?
Tomorrow is the first day of the last month of the craziest year in our lifetime.
It also happens to be the end of our Black Friday offer, meaning you’ve got one more day to get Trends at a heavy discount. The public price is at $199, but we’re giving 100 daily readers 50% off with the code “HALFMONDAY”.
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- A 3PL company based on our XaaS article, that grew from ~200 to tens of thousands of monthly orders
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- A video agency that can attribute “at least $100k of our revenue this year to [Trends subscribers]”
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