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🖥 Salesforce and Slack need each other

RIP, Tony Hsieh -- the visionary retired CEO behind Zappos -- who died on Friday from injuries sustained in a home fire. He was only 46.In 2009, Hsieh sold Zappos to Amazon and ran the online shoe store until August of this year. Based in Las Vegas, Hsieh devoted significant time and resources to The Downtown Project, a program to regenerate older parts of the city.

PLUS: This company shaped Biden’s view on business.

The Hustle

RIP, Tony Hsieh — the visionary retired CEO behind Zappos — who died on Friday from injuries sustained in a home fire. He was only 46.

In 2009, Hsieh sold Zappos to Amazon and ran the online shoe store until August of this year. Based in Las Vegas, Hsieh devoted significant time and resources to The Downtown Project, a program to regenerate older parts of the city.

The Big Idea
Salesforce and Slack gif

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:

  • Teams (Microsoft’s workplace collaboration software) has seen daily active users grow from 32m (March) to 115m (November).
  • Zoom has exploded from 10m daily active participants pre-COVID to 300m.
  • Slack had 12m daily active users at the end of 2019 and no longer reports the number.

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:

  • 2010: Launched Chatter, an internal corporate social network
  • 2016: Acquired cloud collaboration app Quip
  • 2016: Tried to acquire Linkedin, but lost out to Microsoft

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:

  • In 2018 he dropped $5B for the cloud application platform Mulesoft.
  • In 2019 he plunked down $15B in an all-stock deal for the data platform Tableau.

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.”

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  • 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 Audible credits smartphones.
  • 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).
click farm

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:

  • 90% of its live-streaming revenue (predominantly virtual gifts) and usage numbers are fraudulent
  • Purchases and viewers are actually an army of bots

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:

  • Click farms (imagine hundreds of smartphones set up with fake accounts)
  • Malware (phone software that clicks on banner ads and does other fake interactions in the background without your knowledge)

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.

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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?

No sh*t. 

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:

Peek inside Typeform →

Business Education
Joe Biden in 1988

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:

  • Imposing a minimum corporate tax to curb tax avoidance
  • Issuing penalties for shipping jobs overseas
  • Enacting measures that make it easier for unions to organize

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.

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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. 

Jeff Bezos loved Zappos’ customer-centric culture so much that he acquired the shoe seller for ~$1.2B in 2009 (Bezos talks about the deal in this video). 

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:

  1. “Your personal core values define who you are, and a company’s core values ultimately define the company’s character and brand. For individuals, character is destiny. For organizations, culture is destiny.”
  2. “See what happens when you challenge your employees to bring all of their talents to their job and reward them not for doing it just like everyone else, but for pushing the envelope, being adventurous, creative, and open-minded, and trying new things?”
  3. “No matter what your past has been, you have a spotless future.”
  4. “We must all learn not only to not fear change, but to embrace it enthusiastically and, perhaps even more important, encourage and drive it.”
  5. “When you walk with purpose, you collide with destiny.”
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Are we there yet?

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  • A sea moss capsule company that’ll hit 6-figure sales this month
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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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So, if “future you” wants to be like the Trendsters above… take us up on our best offer since Trends has launched. Use the code “HALFMONDAY” to get your first year at $149. That’s less than $3 a week.

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How'd Bezos build a billion dollar empire?

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