The influencers are now the influenced


October 23, 2019

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Today, diapers aren’t just for your child, and NBA players are running wild, but first…

The Hustle Daily Email

No one asked about your skin care routine: The waning influence of mega-influencers

In recent years, the voyeuristic landscape of social media has given rise to a select strata of self-branded Instagram personas touting their effortless fashion and seemingly bottomless travel budgets.

Though our society’s cultish fascination with influencers — from fitness gurus to meme masters — is baffling to many, anyone who commands the precious attention of the masses holds huge potential power in the eyes of advertisers. Companies will spend an estimated $8.5B worldwide this year on influencer marketing.

Exactly how much power are we talking?

Hard to say. It’s difficult to trace product sales directly back to specific campaigns — especially in the land of social media, where bots roam free and influencers often buy “likes.” By one estimate, this misleading engagement inflation will cost advertisers $1.3B globally this year.

But the jig may be up soon for these social superstars 

Some advertisers are frustrated by misleading engagement numbers and low ROI, and luxe brands are fed up with the “self-entitled” social elite. Meanwhile, engagement rates for influencer posts are declining as consumers grow skeptical about the credibility of social product plugs amid their saturated feeds.

The icing on the heavily filtered cake? FB and Instagram’s plans to hide “likes” delivers a huge blow to the core equity of mega-influencers. If a tree falls in the forest…

Out with the mass market, in with the niche 

In response to consumer demands for authentic brands and bespoke content, some firms are crowdsourcing product content from real customers — fo’ free. 

We’re also seeing a rise in consultancies offering to match brands with relevant and trusted nano- and micro-influencers (with a few hundred/thousand followers) for more effective targeting. They could very well be onto something; these mighty mice of the social realm are generally viewed as more credible, not to mention much cheaper. 

» More bang, less buck
My First Million Podcast by

Today’s episode of My First Million is brought to you by Hustle Con, our annual conference that’s happening December 2-3, 2019 in Oakland, CA. Grab your tickets here.

Cameo: The latest “Why didn’t I think of that” idea that’s raised $65m+ 

What if you could get Snoop Dogg, Kyrie Irving or Tony Hawk to wish your best friend a personal happy birthday? 

Steven Galanis thought he could convince’em and now he’s reinventing the autograph with Cameo — an app that lets you book personalized video shoutouts from celebrities, pro athletes, and models  — and it’s reportedly worth over $300m. Yowza!

In this episode, we chat with Steven about:

⭐ When he knew to leverage social media stardom

📈 How everything went wrong on launch day

🌎 Why he thinks this idea has international potential 

Listening to this is free, but not doing so could cost you millions. Click below to listen to our podcast, My First Million.

Listen on iTunes Listen on Spotify Listen on Google Play

Here’s what you need to know about WeWork’s bizarre bailout

Yesterday morning, WeWork’s board voted to accept a bailout offer from major investor SoftBank in a deal that values the company at around $8B — far less than WeWork’s $47B valuation in January.

WeWork was running out of options…

In fact, it had exactly 2.

Behind Door #1: JPMorgan — WeWork’s 3rd-largest external shareholder and the bank that had been tapped to take WeWork through its aborted IPO — offered WeWork $5B in debt financing (much of which would have become more expensive over time).

Behind Door #2: SoftBank — WeWork’s largest external investor — offered WeWork up to $3B in tender (AKA share buyouts for execs), $1.5B in accelerated equity (AKA cash it planned to invest next year), and a $5B round of debt financing.

The primary difference: JPMorgan’s package wouldn’t have diluted existing execs’ ownership stakes. SoftBank’s, alternatively, buys out up to $3B in shares — including a controversial $1.7B payout for founder Adam Neumann — and increases SoftBank’s stake in WeWork to around 80%

Yes, SoftBank’s package was more complicated, but it was also… more.

So, what’s everyone gonna do now?

It ain’t pretty…

SoftBank will have to work fast to save WeWork, which lost $900m in the first half of the year. S-Bank will only recoup its investment if WeWork is sold or goes public at a valuation higher than $15B.

JPMorgan will receive $50m for months of work spent raising $5B that WeWork didn’t use — an outcome bound to disappoint the bank.

Neumann, who’s widely disliked, will sever most ties with WeWork — and walk off with $1.7B, a golden parachute that would make even Travis Kalanick blush.

Finally, thousands of WeWork employees are expected to be laid off — but, since WeWork doesn’t have enough money to pay their severances, those layoffs have been postponed for now.

» WeWon’t
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Are adult diapers the sleeper success story? Depends on whom you ask

We’re all getting older. To paraphrase someone much wiser than us, there are a few things in life that are inevitable: death, taxes… and adult incontinence products?

This is a market poised to take off

As Boomers age while Millennials and Gen Z-ers put off zeh makin’ of bebes, we might be approaching a time when more adults than infants need diapers. The market for adult diapers, disposable undies, and absorbent pads grew 9% last year to $9B. 

And that number will likely grow. Some manufacturers estimate that only half of the more than 400m adults likely to be affected by bladder weakness are buying appropriate incontinence products. The issue? Embarrassment. 

Maybe this IS a laughing matter

In Japan, adult incontinence products have outpaced baby diaper sales since 2013. Advertisers have adopted the euphemism “choi more,” which means “lil’ dribble.” But even if cute phrases don’t translate to sales, there are ways to normalize the discussion and help consumers feel more comfortable shopping for these products.

Ditching the word ‘diaper’ helps…

So does placing incontinence products in personal care aisles rather than with baby products. And at the risk of sounding like a daytime talk-show host, did someone say maaaaakeover?

Kimberly-Clark has revamped its Depends, making them softer, thinner, and better-fitted so they can be worn discreetly. Essity’s TENA brand, meanwhile, features a line of trendy, black disposable briefs called Silhouette Noir. 

It also helps to emphasize that incontinence isn’t associated only with aging. Women are 2x as likely as men to experience bladder issues — and, as more of them start speaking openly about them, brands hope they can laugh about them, too.

» Fight for your right to potty

Spencer Dinwiddie wants to turn his NBA contract into an investment opportunity

In September, Brooklyn Nets guard Spencer Dinwiddie announced his plan to cash in early on his 3-year, $34m contract extension by turning it into a digital investment channel.

According to ESPN, the biz-savvy player’s venture would allow him to raise millions in cash at the beginning of his contract that he could then shoot into other investments. And the Nets’ breakout star wants to launch it this week if possible.

Timeout! What exactly does this mean? 

Dinwiddie’s short-term plan aims to offer investors a Professional Athlete Investment Token (supported by his earnings in the 2021-22 season) — even better, the basketball biz-head is abbreviating the Professional Athlete Investment Token as PAInT.

The minimum token investment is $150k, and Dinwiddie is offering a cap of 90 tokens to be acquired (which reportedly amounts to about 40% of his 3-year contract).

Described as “fantasy sports on steroids,” Dinwiddie’s ultimate goal is to enable people to invest in and trade players the same way they would the stock market or with other securities, on a platform that he’s in the middle of building.

“We envision a world where you’re gonna be able to trade a Spencer for a Kyrie [Irving] for a [Kevin Durant],” Dinwiddie said. 

But the NBA’s going hard on the PAInT

The NBA said the idea conflicts with the league’s collective bargaining agreement, which prohibits arrangements that shift a player’s salary to a third party. But Dinwiddie claims he’s doing nothing of the sort. 

Now, after weeks of back-and-forth with the league, Dinwiddie is reportedly optimistic that he has been able to clear up confusion surrounding the venture’s business model. But, ultimately, it’s up to the ref to decide.

» He shoots, but will he score?
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Tech is taking on weight loss… and winning

You’ve probably heard about Noom. Hell, you’re probably considering Noom-ing right now — and we don’t blame you. 

But, if you’re still on the fence, let’s dive into exactly how this new wellness app is revolutionizing weight loss before you get started with your own 30-second evaluation.

Here’s the skinny on Noom

Created by behavioral psychologists, Noom was specifically designed to blend AI optimization and real human empathy to help users create healthy routines and shed pounds. The result? An app that can help you change your behavior, not just your diet, thus making it more effective than traditional weight loss approaches.

Their AI breaks down your food choices into simple charts that show you how you eat versus how you should be eating — AKA, not just prescribing random diet templates for you to follow. 

Then, Noom pairs you with real accountability partners that help you make these changes and stick to your custom-tailored health plan.

Intrigued? Yeah, us too. Take their 30-second quiz to see if you want to give Noom a try. 

The weight is over
What Else…

🍸 In the U.K., Amazon’s bringing the booze. Amazon recently launched an in-house liquor brand called Tovess Gin. It’s the e-commerce giant’s first foray into the spirit business in the UK, but the latest in a long line of private label projects. Amazon is currently expanding its Private Brands team in the EU.  

🚫 Gone Fisher-in’. After making sexist remarks at a private investor conference earlier this month, billionaire moneyman Ken Fisher’s firm has lost close to $2B in less than 2 weeks after clients pulled out their cash.

👗 Macy’s tries on a new, fur-free outfit. The retailer announced it will stop selling furs at its Macy’s and Bloomingdale’s locations by 2021, following 2 years of research into fur alternatives and consumer opinions. Going fur-free is chic: Michael Kors, Gucci, Calvin Klein, Chanel, Burberry, Jimmy Choo, Ralph Lauren, and Kate Spade have also dropped it.

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