Weather apps can predict shopping habits


September 18, 2020

PLUS: The latest battlefront in the cloud wars.
September 18, 2020
The Hustle
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Shopify Inc.

Just when you thought the TikTok story couldn’t get any crazier, the firm has reportedly approached former Instagram founder Kevin Systrom to be its CEO. A quick refresher: Systrom left Facebook after the Zuck started stripping Instagram of its independence.

In other words, if this goes down…it would be the greatest comeback since John Travolta re-launched his career with Pulp Fiction.

Chance of Crocs

The Weather Channel is going all in on shopping

Do snow flurries make you inexplicably hangry for truffle fries? The Weather Channel probably knows.

The app, which has ~45m monthly users, is fresh off a lawsuit with the city of Los Angeles for secretly selling location data to advertisers. The main consequence: the Weather Channel now has to disclose that your data is going to a 3rd party.

But now the Weather Channel app is changing how it’s tracking you. Instead of following people with tracking cookies, it’s trying to learn how the weather shapes shopping habits.

Get ready for weather-based ads

The Weather Channel can micro-target how small weather changes impact what a population buys in the aggregate, then sell that info to marketers.

Let’s say the channel learns that rainy weather is the No. 1 driver of Balenciaga Crocs sales. 

Crocs would love to know about it. So when a certain region gets a forecast for rain, Crocs could do a location-based marketing blitz.

Some of the Weather Channel’s early findings:

  • Sales of baking chocolate in states like Kansas and Missouri jumped 62% during a rainy forecast.
  • Wine sales went up 25% in Michigan and Illinois when clear weather hit.

Weather apps are a data-collection mess

Some of them are pretty careful with personal data. Dark Sky, which Apple recently acquired, has said that it will never share location data to 3rd parties or data monetization companies.

But most other apps aren’t. Accuweather, for instance, has been known to sell location data even when the app isn’t active.

The Weather Channel’s pivot is one way forward. Instead of tracking individuals, now the app can look at spending patterns across a population.

Is that better for privacy? Maybe slightly. But next time it thunders, brace yourself for an onslaught of Crocs ads.

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Snippets
  • Chuck E. Cheese has filed a motion in bankruptcy court to destroy 7B prize tickets. It will cost them $2m — far less than the $9m they’d lose if the public redeemed them for prizes.
  • Win this in-development reality TV show, and you could get a free trip to the International Space Station in 2023.
  • Getting customers to pay airlines for a “flight to nowhere”? It’s a big business right now.
  • Tonal, a fitness startup backed by Steph Curry, raised $110m as digital fitness continues its recent tear.
  • The footwear brand Keen just set up 3 face mask vending machines across the West Coast. It might herald many more to come.
  • BONUS: Tim Ferris (who is an investor in The Hustle) just recorded his “most important podcast episode” to date, chronicling his healing journey from childhood abuse. 🙏
Cloud Wars

To win the cloud, Amazon and Microsoft are giving startups free sales support

Here’s an amazing cloud computing stat.

According to investor Jon Sakoda, Amazon Web Services (AWS) would be worth ~$2-4T as a standalone business if it was valued at the same multiple as other public cloud firms.

As presently constituted, $AMZN is worth $1.5T.

The cloud prize is huge and Big Tech has a new way to go after it. 

If you’re a startup, Microsoft or Amazon will sell you services 

As long as you agree to use their cloud offering, as reported by the Wall Street Journal.

Earlier this week, Abnormal Security Corp. moved its operations over to Microsoft’s Azure cloud in exchange for enterprise sales assistance.

This was Microsoft’s first such arrangement, following a similar deal Amazon struck with Apptio Inc. in January. 

You got to get them early 

Changing cloud providers is a costly exercise on both the time and money fronts.

For the biggest cloud players, partnering with startups is a great way to capture their booming cloud use as the firms grow and spend — collectively — billions a year.

In fact, Amazon launched AWS Connections 3 years ago to link startups with its biggest customers. According to WSJ, Amazon has facilitated 2k meetings between startups and potential customers since 2019. 

Both sides benefit 

WSJ says these new cloud partnerships are giving access to “a range of customers many startups and small enterprises could struggle to reach independently.”

As they say in my ancestral home of Vietnam, that’s a “nguyen-nguyen” arrangement.

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SPONSORED

Want to start a business, but don’t want to put on pants?

Only one way to do that without some legal scrutiny: Online.  

Lucky for you and those brutal tan lines, you don’t have to jump into the icy waters of e-commerce alone. That’s what Shopify is for

One platform with all the features you need to grow your biz 

Shopify’s all-in-one e-commerce platform is built to help businesses of all sizes — from lil’ infant or hairy, post-pubescent behemoth — start, run, and scale their operations. 

Shopify’s toolkit has everything you need to get a biz off the ground during your 14-day free trial, including:

  • A Business Name Generator in case you have a killer idea (like sell cartoon kittens online) but aren’t creative enough to name it (we suggest CartoonKittens4Sale.com). 
  • An Online Store Builder with a drag-and-drop feature that allows for countless configurations, without all the coding headaches.
  • Built-In Shipping that makes order fulfillment brainless.

Excited? Us too. Join the 1 million other companies wheelin’ and dealin’ with Shopify by starting your trial right here:

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Q&A

‘People [are] looking for food that offers comfort and nostalgia’

Cereal sales have surged during quarantine as people seek out comfort food.

Magic Spoon — a D2C startup offering a keto-based cereal that’s high in protein and low in carbs — is one brand that has seen increased demand. The company is known for its colorful and playful branding (~200k followers on IG).

We recently spoke with Magic Spoon’s co-founder Gabi Lewis to find out more about the opportunity in the cereal market (and beyond):

What has Magic Spoon seen since the start of the pandemic?

Sales have massively accelerated in recent months. We are seeing the trend of people looking for food that offers comfort and nostalgia.

What have been effective channels to boost sales during this period?

We’ve been doing a lot of influencer campaigns. Since our product is marketed with health benefits… it’s better if customers see someone they trust talking about the product, not just us.

How big is the cereal market opportunity? 

Internally, we peg the US cereal market at $11B and the global market at $35-40B. The Magic Spoon opportunity is larger, though, as we see ourselves as potential substitutes for protein bars and shakes.

What was a big challenge when you launched? 

When we started, big food manufacturers told us that cereal was a bad idea. It’s a declining market [overall] and the retail aisles are controlled by huge brands, making it hard to get shelf space. We knew we were going to go D2C, so were less worried about it.

Do you have a request for a startup?

I’m from Scotland — and cider is big there. I would love for someone to make a cider brand in the US. I’ve seen a few attempts at it, but no one has nailed it. I think cider could take a meaningful chunk of the beer market. It’s healthier than beer and is gluten-free. 

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A Linguistic L

Streaming services have completely given up on creative names

If you have experience coming up with clever brand names, the major media conglomerates of the world need you.

CBS All Access is rebranding as… *drumroll*… Paramount+.

Its reason for switching to the Paramount moniker makes sense: Paramount is more recognizable than CBS overseas.

But that “+” sign isn’t exactly the most creative branding. In fact, it’s pure mimicry: Disney+, Apple TV+, ESPN+, BET+… (OK, we admit it — we’ve thought about a Hustle+…)

We’re just circling back to basic addition

HBO Max just barely gets a pass here, but we’ll continue to side-eye them. 

Streaming represents the future of these businesses, so one would think that their names would be a bit spicier.

But they’re all basically the same

  • Quartz identified a few categories, including the pervasive “Now” (Sundance Now, Epix Now, HBO Now).
  • Tubi and Quibi sound like they could also be toothbrush startups.
  • Mubi, Vudu, and Fubo TV are trying to take over the “Hulu, but different” linguistic lane.

We’re looking forward to the chaos agent that enters the streaming wars with a minus sign in its name.

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Shower Thoughts

  1. People who don’t understand how Clark Kent can pass as Superman have clearly never seen Tony Hawk without a skateboard.
  2. The Titanic moved over liquid water, was powered by water vapor, and was sunk by frozen water.
  3. Your birth certificate is your first participation award.
  4. Seems awfully suspicious that melting frozen yogurt does not give you yogurt.
  5. You can’t be backwards on a staircase.
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Today’s email was brought to you by Michael Waters, Caroline Dohack, and Trung Phan.
Editing by: Zachary “5-day forecast” Crockett, Cy Gazunt (Toastmaster).

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