Board games are starting to look a lot like video games


September 10, 2020

PLUS: Why investors are buying up song catalogs
September 10, 2020
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We received some great responses on our Midwest startup Q&A with David Hall. If you’re from the region, help us settle a debate: What is the best casserole? And does it include Tater Tots?

The Big Idea

Remote work is destroying America’s white-collar office economy

If remote work has you missing your daily Starbucks cold brew (with 8 shots of espresso), you aren’t alone.  

According to the coffee colossus, COVID-19 — and the related fall in foot traffic — led to a revenue decline of $2.3B last quarter. 

As highlighted by Medium’s Steve LeVine, Starbucks is only one data point in a much bigger story: the destruction of the multitrillion-dollar office support economy

Every related industry affected

Levine rattles off some sobering stats:

  • Tens of thousands of office support workers have lost their jobs
  • Around $2T in corporate travel will not happen this year 
  • As of July, ~$21B of hotel-related mortgage loans were delinquent (versus ~$1.15B pre-pandemic)

The next victim: city finances  

Whether or not these jobs and businesses return, US cities will be feeling the aftereffects.

With white-collar workers spending less, sales and income taxes will fall. A survey conducted by the National League of Cities showed an average expected decline of 13% in revenue next year, a decline comparable to the 2008-09 financial crisis.

It’s not just money, either. MIT economist David Autor believes the very “cultural vitality of cities” is at risk because of the slowing economy. 

What are the longer-term trends?

Levine drops a note of optimism, citing a research paper on postwar Tokyo: “long-lived cities undergoing great temporary shock tend to bounce back.”

Superstar cities like New York and San Francisco have long been criticized for their high cost of living and congestion.

As the remote work shakeout leads more people to flee such cities, there may be an opportunity to bring in a diverse mix of city dwellers to turbocharge the next period of economic dynamism.

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Snippets
  • New Order?: The Long-Term Stock Exchange (LTSE) — which bans quarterly reports and mandates listed firms to consider all stakeholders — went live yesterday. 
  • Facebook is paying some people to deactivate their account in the runup to Election Day. (It’s for research.)
  • Tons of companies want you to buy a “companion robot” for your isolated older family members. 
  • In a moment of unending alerts, here’s the case for bringing back AOL-era away messages. 
  • The latest social media startup, NewNew, is like TikTok meets Facebook Groups. 
  • BONUS: LVMH is pulling its $16.2B bid for Tiffany’s, citing the COVID-19 pandemic and the threat of US tariffs on French products. 
Checkmate

Board games are starting to look a lot like video games

Once upon a time, you had to nag a nearby nerd to play a board game like Dungeons & Dragons with you in person.

Now it’s as easy as asking someone from the game’s 2m+-member subreddit or its 1k+ Discord servers to stream the game with you online. 

Last year, that ease of connectivity meant that D&D had its biggest sales year since its launch in 1974.

You thought Fortnite streams were popular? 

Then look at board games. Even chess has become a livestreaming hit

On Twitch, chess streaming has close to doubled every month this year — and everyone from The Mountain from Game of Thrones (164k+ followers) to pros like Hikaru Nakamura (528k+) have amassed huge audiences. 

Welcome to the digital board-game boom 

Many of these games are played in person, then streamed out to a wider audience. But a bunch of startups are trying to make remote gameplay seamless: 

It’s about time that being a nerd paid off.

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SPONSORED

The last stock that got an “All-In” buy alert was Salesforce… which is up 2,707% since

Now, this tiny internet company is up next. 

Here’s why The Motley Fool just issued their rare “All-In” on this stock:

  • It’s 1/100th the size of Google (early adopters, hollerrrr)
  • Its tech could be what finally kills cable for good
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Carbon Copy

This German internet company copied itself to success. Now, its biz model is in question.

I have 2 salient memories of living in Ho Chi Minh City in 2012. 

First, my expat friends inexplicably called me the “Saigon Don.” Second, I remember the arrival of Zalora, a startup that aggressively entered Vietnam’s market with an offering of fashionable footwear.

Billed as the “Zappos of Southeast Asia,” Zalora was the brainchild of Rocket Internet… which itself was the brainchild of 3 German brothers (Oliver, Marc, and Alexander Samwer).

Silicon Valley has long blasted Rocket’s model

No wonder: It cloned Western internet companies for non-US markets. Many have also questioned the firm’s business ethics and its suspect valuation techniques, which inflated startup prices.

Despite its bad rap, a recent Fortune article notes that Rocket has ripped out some wins: 

  • Zalando, another Zappos clone, is a leading European e-tailer valued at $19B
  • Delivery Hero, a food delivery clone, is valued at $18B
  • CityDeal, a Groupon clone, was acquired by… Groupon
  • Lazada, “Southeast Asia’s Amazon,” has received $1B+ in funding from Alibaba 

But the incubator and cloning model is losing steam 

Once the toast of the European tech scene — which underwhelms relative to its economic heft — Rocket was valued at $8B+, but now trades below $3B as many of its cloned ventures have failed.

Per Fortune, the firm plans to delist from the Frankfurt and Luxembourg stock exchanges.

Zalora was shuttered in 2016 but, thankfully, the “Saigon Don” moniker is alive and well (def @ me).

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Put a Ring on It

Forget the stock market: Investors are pouring their money into old songs

People are betting millions of dollars on your future nostalgia listening

Last month, Concord Music Publishing — a group that holds the rights to 400k+ copyrighted songs — paid the pop rock band Imagine Dragons $100m for its back catalog, entitling them to all future revenue from the band’s previously recorded tracks.

A SoftBank for old songs?

The deal is like an investment bond in music form: Concord hopes that these songs will stay popular for decades, earning back way more than that $100m. 

A similar firm, Hipgnosis Songs Fund, has raised $500m+ to buy up rights to “Single Ladies” by Beyoncé, “Umbrella” by Rihanna, and “Baby” by Justin Bieber. 

But this kind of investment can be a gamble

Back in 1997, David Bowie promised investors that if they bought his “Bowie Bonds,” they’d get a piece of his earnings for the next 10 years in exchange for upfront cash. 

Investors plunked down $55m (~$88.8m in 2020 dollars). Then CD sales crumbled, and Bowie made off with a huge profit. (When he died in 2016, Bowie left his back catalog to his family.) 

Why is this blowing up right now? 

These days, largely thanks to streaming, musicians don’t make all that much money from their actual royalties.

Today’s biggest performers earn 75+% of their income from constantly touring and putting on live shows.

But right now, with all that revenue on hold, bands like Imagine Dragons are willing to do “Whatever It Takes” to make ends meet.

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Today’s email was brought to you by Michael Waters, Caroline Dohack, Trung Phan, and Bobby Durben.
Editing by: Zachary “Dungeons > Dragons” Crockett, John Shall-I-Pop-a-Wheelie (Chairman, Joint Chiefs of Staff).

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