July 31, 2020

A battle over braces in the orthodontia biz

Plus: A kidtainment colossus could take over YouTube
July 31, 2020
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The Big Idea

Building in public: Meet the new transparent startups

If Coca-Cola launched today, you might find its secret formula on GitHub. 

A new cohort of entrepreneurs is putting it all out there — sharing traffic stats, source code, and employee salaries with total randos on the internet. 

Dozens of these “open startups” are building their companies in public:

  • Social analytics company Buffer publishes salaries, diversity stats, and product road maps. 
  • The head honchos at online checkout startup Fast tweet out strategy updates, down to how the company uses quizzes to grab loyal customers. 
  • The publishing platform Ghost shares virtually everything — churn, monthly run rate, user numbers.

Ecommerce company Gumroad has held open board meetings since 2019 — anyone can show up. 

The titan of TMI

Pieter Levels popularized this brand of oversharing in 2017. His blockbuster post chronicled the growth of his company Hoodmaps from a line of code into a biz with 300k+ users. 

No detail was too small: Levels even included his personal playlist.

He shares data for 2 of his other startups: RemoteOK and Nomad List.

Is this just a marketing stunt? 

Partly, yes: Public builders are characteristically open about how traffic spikes whenever they tweet their numbers. 

But it might also build community.

Publishing all your numbers is terrifying. What if your usership slides and you scare off investors? 

Sahil Lavingia, creator of Gumroad, found that the opposite happened when he threw open his books. “Our creators have grown more loyal,” he wrote

The artists who sell on his platform? They felt like they were in it with him.

Wanna put it all out there? 

Here are some links to get you started: 

  • Buffer breaks down the pros and cons of total transparency.
  • Watch out for the “Build in Public” newsletter.
  • Our Steph Smith has written about a concept beyond open business metrics: open goals.
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Snippets

5 stories to catch you up quick

1️⃣  The big economic report was a mixed bag: GDP fell at a 32.9% annual rate, which — while awful — was slightly better than expected. But a week-to-week increase in unemployment filing has economists antsy.

2️⃣  Peacock is spreading its wings. The new streaming service has signed up 10m users.

3️⃣  TikTok is entering the VR concert game: An avatar of The Weeknd will perform on the app on August 7. 

4️⃣  A bipartisan bill is trying to bump up US spending on AI research

5️⃣  London’s Moonbug Entertainment is building a kidtainment colossus: It’s buying Cocomelon and Blippi, 2 of the most popular children’s brands on YouTube. Moonbug’s new network generates 7B+ views a month.

And 5 more to delight you 

1️⃣  Talk about deep cleaning: NASA swabbed its new Mars rover 11,601 times to make sure it wouldn’t bring any trace of Earth with it. 

2️⃣  This smart food container will estimate how much time you have before your food goes bad.

3️⃣  Current events got you down? Maybe you should scan the latest headlines from BBC Mews

4️⃣  Twitch is helping to create an esports league for students at historically black colleges.

5️⃣  Uh… do we have to worry about mustard beer now? 

I Wish I Might

The fate of an $11B+ ecommerce giant could hang on its small-biz partners

Denim-print bike shorts: $9. Mini crossbow: $17. “Brest enlarging” cream: $4.

This curious cornucopia is the low-priced foundation of Wish’s $11B+ ecommerce empire:

  • Moving ~3m items/day, Wish is the 4th largest digital marketplace in the US. 
  • Since January 2019, 36k+ small businesses in the US and Europe have partnered with Wish to stock/deliver its wares.

And as Forbes reports, a sudden shift means those mom and pops could decide the company’s future.

But first: How is sketchy boob goo worth so much?

It’s all about subsidies, sweetie.

Wish played middleman between shoppers and Chinese manufacturers. Shipping subsidies let producers move goods to Americans dirt-cheap… 

… which meant Wish didn’t have the high overhead of warehouses, a la Amazon. 

But on July 1, the Universal Postal Union popped the subsidy bubble. Shipping costs doubled overnight. 

Now Wish is wishing on small businesses

Wish pays them to carry inventory and become storefronts. It’s getting around the shipping dilemma by bundling orders and sending them to stores in bulk.

It’s aiming to ink deals with 100k stores by the end of the year — and eventually reach 1m retail partners. 

We, eh, Wish them well. You never know when you’ll need the following goodies:

  • a human hair wig ($15)
  • a definitely-not-fake Rolex ($51)
  • some parasite-free detox blast capsules ($11)
  • a goat hoof trimmer ($96)
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SPONSORED

The $53B commercial landscaping market has two huge problems:

  1. High labor costs
  2. Incredibly slim margins

In a market this big, fixing just a single one of these issues would disrupt the entire industry.

So what do you call it when one startup manages to solve both? 

A massive frickin’ opportunity.

Meet Graze, the fully autonomous electric lawn mower 

Graze is the brainchild of John Vlay, a CEO with 35+ years of experience — and a huge exit — in the landscaping industry. He realized a product like Graze could help commercial landscapers explode their businesses through drastic reduction in fuel and labor costs.

How? Because Graze is 100% electrically powered (with support from top-mounted solar panels).

Plus, thanks to machine learning paired with smart features like a localization GPS, an optical suite, and proximity detection, Graze can map and mow job sites with maximum efficiency. 

Want to get in on a company primed to disrupt a $53B market? Join Graze on SeedInvest.

Invest here →
A-mazing

Are you ready to be a-mazed?

You know that scene in The Shining where Jack Nicholson’s son evades murder by darting through a maze of hedgerows?

The pandemic has homeowners hoping to recreate that — um — relaxing vibe.

No, really

Lars Howlett is the US’s premier labyrinth designer. They’re actually different from mazes — a maze has multiple dead ends. A labyrinth might be confusing, but there’s only one path.

Institutional labyrinth projects — schools, hospitals, and estates — are down, but private property owners are buying in. Howlett says the labyrinth “brings order out of a sense of chaos.”

But don’t take our word for it

There’s a vibrant community of labyrinthusiasts to help you get your calm on. 

They seek out public puzzles, build their own out of pixels and found objects, and use hand-held models — which we interpret to mean the kind that comes with kids’ meals.

Bet you a chicken nugget we can find the end faster.

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6

CEOs named Peter
THE BIG NUMBER

Remember the John Problem? In the UK, it’s the Peter Problem — a new study found more CEOs named Peter (6) lead top companies than female CEOs (5).

(Source: Fast Company)

Straightened Out

A jaw-dropper: Some orthodontists think we use braces too much

Brace yourself: An industry journal found “an absence of published evidence” that straightening your teeth is healthy.

And a growing number of orthodontists say braces are overused. 

This is about to get metal

People spend $9.6B every year on orthodontics. About half of all kids have let the pros get up in their grills.

But for a profession concerned with uniformity, opinions on the research are misaligned:

The pro-braces crowd says: 

  • One study found crowded teeth were flush with bacteria.
  • Another said people who don’t get orthodontic treatment were more likely to have periodontitis, a serious gum infection.

The brace-haters’ take: 

  • Some of the studies showing that braces help your oral health aren’t fully polished — several aren’t randomized.
  • One paper found that fewer than 5% of people fit the traditional criteria for a perfect bite, questioning the necessity of treatment.
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Sunday Sneak Peek

The collectors who pay up to $70k for rare Hot Wheels cars

In 1999, Bruce Pascal got a call from his mom: She was cleaning out the house and wanted him to get rid of his old Hot Wheels from the ’60s.

Digging through the cigar box full of cars overwhelmed the commercial real estate executive with nostalgia. So he embarked on a mission to amass the most enviable Hot Wheels collection in the world.

Now 59, Pascal boasts a stockpile worth $1.5m+. 

It includes 7k+ cars, many of which are one-of-a-kind prototypes acquired from ex-Mattel employees. One of them, a pink 1969 Rear Load Beach Bomb, is purportedly valued at ~$150k.

Facebook

Pascal is one of a handful of Hot Wheels super collectors, dealers, and middlemen The Hustle talked to this week. It’s a strange, passionate group that includes a BMX stunt rider, a man who owns a geese-removal business, and a retired traveling food salesman.

What drives these collectors to drop 5-figure sums on rare toy cars? And how has this niche economy managed to stay alive for 50+ years?

Find out when our story pulls into your inbox on Sunday morning.

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How You’re Getting By

“Our family and I just purchased this velvety blanket that we love from Target. My daughter just figured out how to create face stamps onto the blanket and it’s hilarious, a bit spooky, and super entertaining. It’s a random Sunday night ritual now.”

Cathay Ly, Gilbert, Arizona

How are you coping with the pandemic? Send us your story, and we’ll share the best ones here.

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Shower Thoughts

In honor of your dutiful Shower-Thoughts-aggregator being on vacation today, we’ve hand picked some juicy vaca-themed thoughts for you. Call them… Outdoor Shower Thoughts???

1. Taking a dog named Shark to the beach is a very bad idea.

2. Technically, the biggest difference between surfing and snowboarding is just the temperature of the water.

3. When a colleague you hate goes on vacation, it’s like a vacation for you, too.

4. You know you’re a grownup when you start thinking of business trips as little all-expenses-paid vacations where you have to work but get to eat out a lot.

5. June is like Friday, July is like Saturday, and August is like Sunday

via Reddit
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Editing by: Nick “Wishful Thinker” DeSantis, Wendy Pigsfly (VP of Long-Term Planning).

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