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Zoom’s platform play was inevitable

Thank you for bearing with us on the Golden Ticket talk. We can finally get back to regular programming… like how the title for the new book about WeWork has the greatest double entendre ever: Billion Dollar Loser.

PLUS: The 5 biggest media flops ever.
October 23, 2020
The Hustle

Thank you for bearing with us on the Golden Ticket talk. We can finally get back to regular programming… like how the title for the new book about WeWork has the greatest double entendre ever: Billion Dollar Loser.

The Big Idea
Zoom gif

Why Zoom had to make a big platform play

If you’ve been afflicted by Zoom fatigue, we hate to tell you… there’s probably more coming.

Last week, the video chat platform announced the release of Zapps — “apps that you can use within the Zoom platform to help improve productivity and create more engaging experiences.”

It’s basically an app store right in your vid chat window, with an impressive list of 25 partners for collaboration (Slack, Dropbox), education (Coursera), misc (Cameo), marketing (Hubspot) and support (PagerDuty).

Zoom’s move to a platform was inevitable

Since the close of its first trading day (in April ‘19), Zoom has seen the value of its firm grow by ~10x, to (not a typo) $145B.

However, as noted by tech analyst Benedict Evans, Zoom’s business doesn’t have a clear-cut moat. It was able to crash the video chat party by removing all friction.

“Zoom made network effects irrelevant,” Evans writes. “But, that means Zoom doesn’t have those network effects either. It grew by removing defensibility.”

The company has been trying to level up

In July, Trends published “Zoom: The Next Platform for Billion-Dollar Apps.” The piece highlighted key moves by Zoom to lock in its leading position.

  • Zoom for home: a dedicated remote work screen
  • Hardware-as-a-service play: a Zoom program to rent out top-notch video equipment to corporate clients
  • 3rd-party apps: Separate from Zapps, Zoom has been pushing its API and SDK solutions for third party developers

Over the summer, CEO Eric Yuan described his vision for how every industry (e.g., telemedicine, fitness) could build on top of Zoom’s platform: “Each vertical use case can be a huge market on its own.”

Zoom has a good app store example to draw from: Shopify

Ross Simmonds — a Trends member and founder of B2B content firm Foundation — notes that since launching in 2013, Shopify’s app store has grown from 100 to 3.2k apps.

Now, 87% of Shopify stores have an app installed, generating millions for app creators and billions for merchant sellers.

According to Simmonds, Shopify’s “app ecosystem… has allowed them to build a competitive advantage against other platforms.”

To stay on top, Zoom needs a thriving app store — let’s just hope one of these Zapps will be a cure for Zoom fatigue.

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  • Finally! You can now submit cases to Facebook’s 40-person independent oversight board. FB funded the board with $130m and Zuck-erooni promises to not interfere with it.
  • Security firm McAfee raised $740m in an IPO (its 2nd). Its founder John McAfee — no longer involved — has a batsh*t crazy story (e.g., was a suspect in a 2012 Belize murder).
  • Adidas is trying to unload Reebok. We’re pouring one out for the greatest non-Nike bball shoe ever made: Allen Iverson’s Question.
  • Kicking ‘em while they’re down: Eko’s lawsuit alleging that Quibi stole its turnstyle video feature isn’t going anywhere.
  • Congrats!: Our friends at Product Hunt announced a new CEO, Josh Buckley.
Media #Fails
Media fails

5 of the biggest media flops ever

As you probably know by now, Quibi — the short-lived short video app (sorry) — is shutting down after 6 months.

A Now, according to Axios, the company plans to return some of the $1.75B it raised back to shareholders, with 20 cents on the dollar a worst-case scenario.

We’re not here to dunk on Jeffrey Katzenberg & Co., though.

Rather, we’d like to put Quibi in context. Here is a very unscientific list of the top 5 media flops ever:

  1. The movie flop that took down a studio. Fresh off winning Best Director for the 1978 Vietnam War movie The Deer Hunter, Michael Cimino released a movie that is synonymous with film flops: Heaven’s Gate. The 1980 Western earned $3.5m against a budget of $44m, bankrupting United Artists in the process.
  2. Europeans don’t give AF about Disneyland: Disneyland Paris opened in, um, Paris in 1992. The park was not originally owned by its namesake but — after decades of middling attendance and an onerous debt burden — Disney stepped in to take majority ownership in 2017. COVID-19 has hampered turnaround plans.
  3. The most expensive flop ever: According to Digital Spy, the 2017 fantasy film King Arthur: Legend of the Sword lost $150m on a production budget of $175m. Honestly, we have no idea how this flopped… David frickin’ Beckham makes an appearance.
  4. The worst media M&A ever: In January 2000, AOL announced it was buying Time Warner for $182B. The combined $350B behemoth was to be the perfect internet marriage of distribution (AOL) and content (Time Warner). The new co ended up losing ~$100B in 2002. Verizon bought AOLfor $4.4B in 2015.
  5. The business that tried (and failed) to beat math: MoviePass.
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How much does it cost to start a business?

Short answer: It depends (doesn’t it always?).

Long answer: Every business will be different, but you can estimate your costs by looking at two categories and breaking things down from there.

1) Capital expenses: One-time costs for fixed assets

  • Storefront
  • Business license
  • Equipment

2) Operating expenses: Recurring costs for duration of business

  • Rent
  • Payroll
  • Utilities

From there, it’s as simple as breaking down what you need, what that costs, and running a break-even analysis to determine how much revenue you need to pull in to be sustainable.

Want more help crunching the numbers? This article from Square breaks it down.

Startup costs →
Women in VC
Lady Boss nameplate

Women-led VC funds are on the rise — but they face significant challenges

The VC world has been appropriately ridiculed for its comical monoculture. In the US, the industry is:

  • 70% white
  • 80% male
  • 40% of Harvard or Stanford stock

A new report from Women in VC shows that there is some movement on gender diversity, at least. 

There are 320 female partners across 275 VC firms

But the key stat here is that 49% of these women are “founding partners” — meaning they had to literally start their own firm to get the top seat.

Across the entire VC industry, only 5% of partners are female (congrats to Terri Burns, who recently became the first black female partner at Google’s venture arm, GV).

With this reality, more women have taken destiny into their own hands. Across women-led VC firms, 73% were launched in the last 5 years.

Founding a firm is not easy, though

According to Fast Company, 90% of women-led firms are labeled “emerging,” meaning their track record (portfolio, exits, returns) is lacking.

Without a track record, funds are smaller (<$10m) and the traditional 2% management fee ($200k) is hardly enough to cover salaries, rent, legal, and admin.

It’s progress but not enough to puncture the monoculture joke (which, admittedly, really isn’t that funny… except for the Patagonia vest jokes, that’s funny AF).

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So, you want to start your own side hustle? 

Congrats — that officially makes you a card-carrying member of our community (check your email for details on the group tattoo).

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Shower Thoughts

  1. On a galactic scale, amber and pearl are far rarer than gold and diamonds because they require life.
  2. In the first Harry Potter the security for the philosopher’s stone was so weak it was broken by eleven year old kids and these people still kept their jobs.
  3. Mickey Mouse must have a super inflated ego to have an entire clubhouse built in the shape of his head.
  4. If the ocean was crystal clear, people with the fear of heights would never board a ship
  5. Walking around at work and chatting with random people is considered lazy, unless you are the CEO, then you’re down to earth.
via Reddit
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Editing by: Zachary “Zoom Zoom” Crockett, Willa Catheter (Staff Urologist).

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How'd Bezos build a billion dollar empire?

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