🚀 Bezos heads to space

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The Hustle

Two things are launching today: Jeff Bezos (on a space shuttle) and a new section from The Hustle called Around the Web. It’s awesome, it’s random, and we really hope you enjoy it.

Today’s rundown:

  • Spacezos. Bezos’ journey to space.
  • Toying around. How brick ’n mortar toy stores are staying relevant.
  • OpenStore. Keith Rabois’ new $250m project.

Let’s do it.

The big idea
Bezos in space

How Jeff Bezos got to space

Later today, former Amazon CEO Jeff Bezos will fly to space on a rocket built by his company Blue Origin.

He’ll be accompanied by his brother Mark, along with the youngest (Oliver Daemen, 18) and oldest (Wally Funk, 82) space travelers in history.

The journey will last just 11 minutes…

But it took more than 2 decades to get there

Bezos started Blue Origin in 2000 with a mission to “preserve the Earth” by going “to space to tap its unlimited resources and energy,” per author Brad Stone.

However, for the majority of Blue Origin’s existence, the space project was fairly strapped for funding.

Using Amazon as a model, Bezos kept a tight lid on expenses. For years, he wanted to limit Blue Origin’s head count to ~70 people, believing constraints lead to innovation.

While Blue Origin pinched pennies…

… Elon Musk founded SpaceX in 2002 and put up $100m of his own PayPal fortune to fund the project.

Even though it was founded later, SpaceX launched its first rocket into space 7 years before Blue Origin (2008 vs. 2015).

While SpaceX made headlines for its space innovations, Blue Origin plodded along in relative silence, making much less headway in the space economy that could be worth $1T+ in annual sales by 2040.

Frustrated by the progress…

… Bezos opened his wallet in April 2017, announcing he would sell $1B a year in Amazon stock to fund Blue Origin.

In 2017, SpaceX had 5x as many employees as Blue Origin (5k to 1k); today, it is ~3x the size (9.5k to 3.5k).

And, of course, the most serious sign of Bezos’ new focus is his decision to fly today.

A wild guess: Bezos returns from space as CEO of Blue Origin. And spends the rest of his days getting back at Elon for this tweet:

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SNIPPETS

IBMoney. IBM saw revenue go up and to the right 3.4% for the 2nd quarter in a row. #big-tech

If you watch the Fast and Furious movies, you know Dom Toretto values family more than anything. So, we took a meme-guess at which Spotify plan he’d choose. #hustle-picks

Not your 14th-century English folk tale: Robinhood the trading app is hoping for a $35B valuation, according to documents released Monday. #fintech-cryptocurrency

Not 1, not 2, but 3: GM is developing a GMC electric pickup truck, its 3rd EV pickup after the Silverado Electric and Hummer EV. #clean-energy

Birds can sing. Like, really sing. A recent scientific paper details how the musical routines of birds aren’t that different from Beethoven’s 5th. #emerging-tech

Dollar General moisturizes. The company is introducing a private label skin care line at its 17k+ stores. #ecommerce-retail

US to China: “Please stop.” The US government criticized China for cyberattacks on countless Microsoft Exchange Servers. #privacy

Toy Store-y
Lego people

The modern brick-and-mortar toy store is all about experiences

According to the store’s jingle, Toys R Us kids may not have wanted to grow up — but the business model of toy stores has.

Digital and immersive experiences are now the new norm.

Michael Brown, partner and retail lead at consulting firm Kearney, recently told Retail Dive that there are 3 types of stores that sell toys:

  • Points of commerce (Walmart, Target)
  • Brand builders (Lego, Funko)
  • Experience centers (Camp)

Big-box department stores…

… satisfy many needs, so there’s always a draw. But big-box toy stores — like Toys R Us, which filed for Chapter 11 in 2017 — only tend to do well around the holidays.

To be relevant year-round, toy stores need to think experientially. A few examples:

  • Photo-friendly Funko stores in Los Angeles and Everett, Washington, let shoppers build custom Pops! Figures, resulting in lines around the block.
  • Newer Lego stores have seasonal displays, augmented reality experiences, and customizable figures. Lego will expand this store model to 100 locations by 2022.
  • Dick’s Sporting Goods’ House of Sport concept has rock climbing walls and batting cages.
  • British bookseller Mr. B’s tried a “reading spa” with tea and cake.
  • At London’s House of Vans, you can BMX or skate.

Now pour one out for Toys R Us to this extremely somber cover of its jingle.

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Shopify, Ecommerce
shopping cart

OpenStore is rolling up the rebels

Shopify has long said they’re “arming the rebels” against Amazon. Now, the Miami-based startup OpenStore wants to roll these stores up.

Co-founded by Keith Rabois (a VC and Miami’s favorite hypeman this side of DJ Khaled), OpenStore raised a $30m Series A valuing the firm at ~$250m.

Similar to Amazon roll-ups, consolidation allows OpenStore to automate customer support and shipping, and unlock volume discounts.

OpenStore uses an algorithm to avoid bidding wars

The startup has a 3-step process to generate offers for merchants:

  • Step 1: Merchants apply online, sharing their Shopify login credentials
  • Step 2: OpenStore’s algorithm reviews sales, inventory, and other data
  • Step 3: The technology comes up with an offer by the next business day

OpenStore reminds many analysts of another company Rabois co-founded: Opendoor, which uses algorithms to purchase homes (and shares a very similar naming convention).

Imitation is the sincerest form of flattery

OpenStore plans to launch a consumer-facing product to centralize the shopping experience across its merchants, which sounds a lot like… Amazon.

According to Rabois, all products are welcome, from furniture to ice cubes for soup.

Time will tell if OpenStore will succeed in its own right, but at the very least, it should give the serial VC a chance to cash out quickly and move on to his next hypeman project.

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SNIPPETS

IBMoney. IBM saw revenue go up and to the right 3.4% for the 2nd quarter in a row. #big-tech

If you watch the Fast and Furious movies, you know Dom Toretto values family more than anything. So, we took a meme-guess at which Spotify plan he’d choose. #hustle-picks

Not your 14th-century English folk tale: Robinhood the trading app is hoping for a $35B valuation, according to documents released Monday. #fintech-cryptocurrency

Not 1, not 2, but 3: GM is developing a GMC electric pickup truck, its 3rd EV pickup after the Silverado Electric and Hummer EV. #clean-energy

Birds can sing. Like, really sing. A recent scientific paper details how the musical routines of birds aren’t that different from Beethoven’s 5th. #emerging-tech

Dollar General moisturizes. The company is introducing a private label skin care line at its 17k+ stores. #ecommerce-retail

US to China: “Please stop.” The US government criticized China for cyberattacks on countless Microsoft Exchange Servers. #privacy

TRENDS

Our most popular market insights from last week…

Here are 3 of the spiciest signals from our last Trends newsletter —

  • Pet Health: This juggernaut of an industry kept barreling through COVID because your pup doesn’t know what a pandemic is. People spent almost $100B on gourmet kibble, pet wearables, and doggy day care in 2020.
  • Skin Care: It’s definitely self-care. Naturally, Google search volume for skin care chemicals like AHA, BHA, and niacinamide are sharply on the rise. Along with some sweet, low-key serum niches. We dive much deeper.
  • Age Tech: Today’s generation of seniors (folks over 60) are wealthy and hate nursing homes. Discover how tech companies are targeting the world’s fastest-growing demographic and what keywords to keep an eye on.

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Motto of the day
Gradatim Ferociter

Blue Origin’s motto is “Gradatim Ferociter.” Since there are like 10 people in the world that can actually speak Latin, the phrase translates to “Step by Step, Ferociously.”

Per GeekWire, the company’s coat of arms gets very literal with the motto.

Blue Origin’s mascot is the tortoise. As in Aesop’s fable… where “slow and steady” beats the hare and wins the race. So literal!

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