Reddit Shares Its Numbers

Reddit which is still a private company revealed its user numbers for the first time. According to WSJ, Reddit averaged 52M daily active users in October, up +44% from the same month last year. DAU is a metric used by other social-media companies to define the size of their audiences and to show how sticky its platform is. According to Jen Wong, the COO of Reddit, they have decided to share DAU for the first time to show accurate reflection of its user growth and to be more in-line with industry reporting. “We’re focused on daily usership and increasing this number as we continue to grow our community and scale our advertising business.” Sounds like Reddit will be pushing to scale its advertising business and (might) have found ways to monetize its users.

Reddit’s ad business did more than $100M in 2019 and apparently is on track to grow +70% this year according to Jen Wong. Reddit’s direct-ad revenue growth fell to 27% in Q2 because of advertisers pulling back during the beginning of the pandemic, however that has rebounded and there was 83% YoY growth in Q3. Direct ad revenue is based on deals conducted by Reddit’s sales teams and not taking into account revenue from advertising bought and sold through external programmatic platforms.

This is big for Reddit as they are starting to get some traction from its ad business. I personally have started to see more and more ads on the platform over the past 2 years – mainly B2B ads for me.. I remember back in the agency days when Reddit ad sales teams would come and pitch its ad inventory, I wonder how much has changed over the past couple of years. Although I have never personally experimented with Reddit ads, I have heard of companies having success with them (although not as successful as the big players like FB/IG, Twitter & Snap). I hope they have some sort of case studies that is easily accessible in the future since some of the big advertising holding companies like WPP have clients experimenting on Reddit.

My two initial thoughts/concerns with advertising on Reddit:

• Brand safety – as much as I think Reddit is a great platform, it also has good share of trolls and users that create unwelcome content
  
  
• If you’re looking for a specific niche to advertise towards, I believe Reddit is great at finding that niche of audiences that you are looking to target. The challenge is creating an ad that’s not too intrusive because we know that users are anti-advertising on the forum. I have seen some Masterclass ads on the platform which I think are great because they feel appropriate in the context of the subreddit/posts. Most of the times however, I see ads where I’m just like why..?

I do see potentially in Reddit’s advertising business but I think it’s one of those channels where it’s going to be challenging to advertise on and have the community be receptive to it. I personally think it could be a great experimental channel for gaming, technology and finance categories.

DoorDash Files For IPO

I’m still here! Missed last week since things are getting a bit busier and I had to drive up to the Catskills. Since I was originally going to write about this last weekend, this news might be a bit old by now.

DoorDash has filed for IPO last Friday and officially joins my list of 2020’s highly anticipated IPOs which includes Airbnb and Roblox. What makes DoorDash super attractive vs it’s other competitors who are already public (Uber & GrubHub)? DoorDash has the highest U.S market share among our favorite food delivery apps – 51% of U.S. consumer’s meal delivery sales in October.

DoorDash has been leading in this super-competitive landscape and the pandemic accelerated its growth even more. DoorDash has reported $1.9B in revenue for the nine months of 2020 which is up from $587M during the same period last year. The company narrowed its net loss to $149M from $533M in 2019 over the same 9 month period.

Shelter-in-place orders likely drove most consumers who have never used a food delivery app before to make their first meal delivery purchase and contributed to the insane growth for DoorDash. Although, they might not see the same crazy growth next year, the future is looking bright for the company.

Some quick tidbits from DoorDash:

• DoorDash’s last private valuation was $16B and they have raised $2.5B
  
  
• 1M Dashers aka delivery workers and more than 18M customers
  
  
• Over 5M customers have DoorPass which is its monthly subscription plan of $9.99 that includes free delivery from restaurants and slightly lower fees
  • I would caveat that there might be a big % of DoorPass customers that got their free membership with Chase from their partnership
    

Two challenges that come to mind:

• Maintaining a loyal customer base – with all the different promotions from all the different players, there’s a lot of hopping around different apps unless you subscribe to DoorDash’s monthly subscription.
  • It’s going to be hard to have exclusive partnerships with restaurants and unless they have all your favorite takeout spots, you’ll be hopping between DoorDash and UberEats
    
    
• Potential risks from labor laws:
  • There will be a time where there will be a push for gig workers protections and benefits to treat contractors like employees which will ultimately impact the costs of the business
    • Although DoorDash got a big win earlier this month with voters in California supporting a proposition backed by the company and other gig companies.. this is a topic that will continue to come back; voters have decided that Uber & Lyft should be exempt from state labor laws to make their drivers employees vs contractors.
    • Legal challenges from its tipping model for Dashers – this was pretty big news a couple of years back where its former tipping model was deceptive because led users to believe tips would go straight to workers but instead offset worker’s guaranteed minimum pay from DoorDash

Here’s the S-1, if you’re looking to read more into it and if you’re interested in some of the previous posts I wrote about the food delivery wars, check it out here.

Spooky Season Treats

Happy Halloween y’all!

In the spirit of Halloween, instead of giving out candy (because covid), I’ll be giving out quick headlines that I found interesting over the past week or so. It’s pretty much a ICYMI, treat or trick edition.

1. Nestle is acquiring Freshly, the NYC based meal kit startup for $1.5B ($950M plus potential earnouts of up to $550M based on future growth). I haven’t followed the meal kit market since Blue Apron went public but I do remember there was a lot of competition in the space. Between Freshly, Blue Apron, HelloFresh, it felt like there were more and more meal kit startups every other day. It’s good that Freshly got acquired – if they went public they will likely go through what Blue Apron is facing right now.
   
   
2. A week ago, ThredUp filed for an IPO and is aiming to get listed early next year. ThredUp is an online retailer that sells second-hand clothing. Poshmark, a competitor is also aiming to going pubic. The digital resale market is hot, expected to grow 27% this year to ~$9B in sales and could quadruple by 2024.
   
   
3. Amazon launched a program that pays consumers for information when they purchase outside of Amazon.com. Participants in the program will be able to use the newly launched Amazon Shopper Panel mobile app to take pictures of paper receipts or forward emailed receipts to earn $10 rewards that can be applied to their Amazon Balance. Users will also be able to earn additional rewards each month for completing surveys or give feedback on what they think of an ad.
   
   Definitely an interesting way for Amazon to collect data on consumers and I can see a lot of consumers okay with sharing information with them because they get something in return. Of course, Amazon will likely use the data to improve product selection on their site, build models about which groups of customers are interested in certain products, etc.
   
   Right now, the program is opt-in and invite only in the US. Sign me up! (so I build up my Amazon balance).
   
   
4. While retail stores are closing down because of the pandemic, Spirit Halloween is back and they opened more than 1,400 stores nationwide – more than last year! Even with Halloween being a bit different this year, it’s crazy that Spirit has seen “encouraging initial results”. Steven Silverstein, a Spirit chief executive anticipates Halloween to be on par as last year.
   
   Ending the list with a Halloween related treat. Hope everyone has a safe Halloween this year!

It’s Official – Quibi is Shutting Down.

It’s official, Quibi has announced that they are shutting down. The short lived streaming service has only lasted 6 months. (They launched back in April). They started off with a lot of hype prelaunch, raising $1.75B before they even launched their streaming service.

I was actually rooting for them to succeed as it would’ve made for an interesting case study. Although now, I guess it’ll still be a case study but more so on what went wrong here.

According to mobile analytics firm Sensor Tower, Quibi had 910K users sign up for its platform during launch and only 72K stuck around after the 3-month free trial. (Guilty of being of those users, except I pulled out within the first month and deleted the app.) I would take these numbers with a grain of salt as Quibi never disclosed the numbers publicly, but I would assume that its somewhat close as they are shutting down. Quibi’s original goal was 7.4M subscribers during its first year of launch.

There were even news of Quibi exploring a possible sale. It sounds like they couldn’t find a buyer.

So what went wrong with Quibi?

• The launch of a mobile-only streaming service during the peak of a global pandemic. This is the reason we heard the most during the past few months, from leadership (Jeffery Katzenberg and Meg Whitman). I don’t think you can blame the pandemic and how people aren’t taking the trains anymore so they aren’t watching short form content. I believe they would have lost to social media platforms regardless of a pandemic or not.
  
  
• To that point, short form video content from TikTok/Snapchat/YouTube/Instagram, is just WAY better than content on Quibi. I mean the time spent on consuming content was at an all time high with everyone stuck at home!
  
  
• They were trying to pull people into their service by offering content with A-list celebrities, which apparently were all the leftover shows that Netflix and other competitors in the space has passed up on. I tried my best to give each show a try on Quibi – they were just bad.
  
  
• I just want to say I called it because in my original post, one of the big challenges that I called out was that Quibi didn’t allow users to take screenshots while watching content. What makes some shows explode in popularity is because people are creating memes or sharing scenes when they are watching. I’m sure to this day, there’s not many people that can name a Quibi show. For a new service with new content, I feel like this would’ve been a great opportunity for the chance to go viral.
  
  
• Quibi only wanted viewers to watch content on the phones. During the pandemic, who would want to watch a show on their phone if the TV is literally right in front of you? Quibi ended up working on a solution to allow casting on smart TVs, but it was too late.
  
  
• There were some legal battles about the technology they were using that came to light after launch with Eko.
  
  
• There were some drama in the C-Suite between CEO Meg Whitman and Jeff Katzenberg
  
  
• What was also surprising is that Meg Whitman admitted that she’s not really an ‘entertainment enthusiast’…. not sure why you would want to head a streaming platform if you weren’t.

Imo, it’s unfair to say that Quibi was doomed to fail from the start but it would’ve been a rough journey to success. The pandemic has definitely accelerated its death.

How would Quibi compete with the streaming giants, Netflix, HBO, Hulu, Prime Video, Disney+ and a few others that launched during the pandemic like Peacock?

Could Quibi even capture the attention of Gen Z’ers and sway their attention from TikTok? No matter how much money Quibi can raise, these companies have a bottomless chest of war funds.

At the end of the day, I would applaud Quibi for trying.

Trying Masterclass

After seeing an endless amount of Masterclass ads on YouTube, I have finally decided to give it a try. Who wouldn’t want to learn how cook from Gordon Ramsey or how to play tennis from Serena Williams?

Okay, well the only reason I’m giving Masterclass a try is because I won a free subscription from some Instagram giveaway. So here’s my thoughts so far after using the service for 4 days.

For those who have no idea what Masterclass is, it’s an e-learning platform that offers classes taught by industry leaders and celebrities/professionals.

Price: For me it was free 99, but normally it would be $180/year – which for some reason is cheaper than what I expected. Using Codeacademy as a comparison, that would run you ~$228/year (if you pick the annual plan).

Classes: I was actually surprised by the variety of classes that Masterclass offers. I thought it was limited to cooking, business and sports. Here’s a list of different topics that Masterclass offers:

• Arts & Entertainment (St. Vincent is one of the instructors)
• Music (Armin van Buuren the DJ)
• Writing (A couple of NYT bestsellers)
• Food (Gordon Ramsey, Dominique Ansel and a couple of other famous chefs!)
• Business (Howard Schultz of Starbucks and Bob Iger)
• Design & Style (Tan France from Queer Eye)
• Sports & Gaming (Tony Hawk, Phil Ivey, Stephen Curry)
• Science & Tech (Neil deGrasse Tyson, Chris Hadfield (former astronaut and commander of the ISS)
• Home & Lifestyle (from Gardening to Dogtraining, etc)
• Community & Government (David Axelrod, Karl Rove)

Yeah, it’s a strong library of e-classes and imo it’s a good amount for you what you pay for. The only problem I do see is that if you’re the type of person to binge through these classes, you’ll definitely run out of content.

What’s interesting that I learned after starting my first class (Howard Schultz’s Business Leadership class) – is that each course comes with a downloadable pdf which I personally find as an added value. I’m not sure how this would look for a cooking or sports class but I’m assuming recipes and a practice plan?

I was surprised to discover that you could join discussions with other Masterclass members. It’s really just a forum and I’m not too sure how engaged the community is. For the Howard Schultz’s class, there’s only 12 threads and there aren’t many replies or views. The writing classes’ forums are way more poppin’.

I’m 9 lessons into the 13 lesson course taught by Howard Schultz and my initial thoughts so far is that Masterclass is similar to watching a documentary on Netflix. I guess maybe the better comparison is going to an event where Howard Schultz is speaking about business leadership. It’s not too interactive and it feels like you’re reading a book but instead it’s just a pre-recorded video. I’d imagine Gordan Ramsey’s cooking course will be similar to his YouTube videos or something you see on Food Network.

For the price of Masterclass, I would definitely say it’s worth the $180/year if any of the topics I listed above interests you. I can’t speak to how good all of the content is but Howard Schultz’s course has been informative so far.

Might do a follow up post on this in the future once I get a chance to try some of the other classes Masterclass has to offer.

Amazon’s Palm Recognition Tech

I had to hold myself back from writing about watches again this week. Maybe it’ll just be part of my blog moving forward.

Remember when tapping your credit card to pay or Apple pay was such a revolutionary thing? Guess what, no one cares about that now – the future of contactless payments is arriving sooner than you think.

Earlier this week, Amazon introduced Amazon One, a checkout experience that allows shoppers to pay by scanning their palms. Amazon has already introduced its palm recognition technology in two of its cashierless convenience stores in the Seattle area.

How it works:

1. The first time a shopper goes to an Amazon One terminal, they’ll scan their palm and enter their credit card info
   
   
2. Every trip after that, it’s a one palm pay (couldn’t think of a clever way to give a nod to Amazon’s 1-click order)
   

Apparently, Amazon chose palm recognition because it’s more private than other biometric technology. Every palm is unique like the human fingerprint. I guess it’s easy for a machine to read a palm that’s being flashed vs a fingerprint where you have to press your finger down? No idea.

With its new technology, Amazon sees a broad use of its palm recognition technology. Imagine it being deployed to offices, stadiums, and even the MTA? No need to carry any cards around anymore. Which I strongly prefer because I can recall a couple of scenarios where I forgot my wallet at home.

Of course, Amazon will start using its technology in their own stores first, but they will eventually sell the tech to third party retailers – which is a great way to add another revenue stream. With COVID, it sped up the adoption of contactless payment and now 67% of retailers accept some form of no-touch payments.

We’re one step closer to the future! Playing devil’s advocate with myself, does this mean that there will be even less privacy for consumers? Amazon said that palm scans are safer than other forms of biometrics because a photo of a handprint can’t identify a person like a selfie can, but what if that information leaks? Even if it doesn’t… that would mean that Amazon will be able to collect even more data of shoppers from retailers that choose to use Amazon’s technology.

In an ideal world, all of this new technology is amazing. Sadly, there’s always drawbacks in some form or another.

Facebook x Ray Ban Smart Glasses

Yep. Facebook is going to release its first pair of consumer “smart glasses” next year. Guess who is partnering up with them – Luxottica, the company that controls majority of the eyewear industry, also more known as the maker of Ray-Ban. That means we’re going to see Facebook x Ray Ban smart glasses in 2021.

It’s not the first time consumer smart glasses will hit the market. Remember Google Glass? I remember how badly I wanted those smart glasses when it first came out but I’m kinda glad I never got them. (I didn’t want to be one of those ‘Glassholes’). Those never took off – I guess it was just too early for that.

Then, we had Snapchat’s Spectacles – sunglasses with a camera that lets you record snaps in your POV and upload it to your Snapchat via bluetooth. I’m guilty of owning a pair. It was great while it lasted, you know when everyone was still snapping (pre-Instagram stories).

So far it looks like Big Tech is 0-2 for consumer smart glasses. Will Facebook take a W with its product? It’s interesting that Zuck announced Facebook’s smart glasses launch during Facebook Connect (the company’s online event for AR/VR products), but caveating that it won’t be classified as an AR device. I’m guessing that does mean that FB’s smart glasses will be closer to Snapchat’s Spectacles vs Google Glass as there won’t be any integrated display of any kind.

Although, their 2021 smart glasses won’t be an AR device you can expect something big from Facebook in the near future. Facebook has also announced Project Aria, a research device that the company will use to learn as it develops the consumer eyewear. Apparently there are Facebook employees and contractors who are already wearing Project Aria glasses in public this month. There aren’t any AR features in these glasses either but they are capturing audio, video, eye tracking (from what I remember this is a huge part of having good AR tech) and location data that will help FB develop its upcoming AR smart glasses.

Don’t forget Facebook also owns Oculus – a brand that pretty much made VR mainstream-ish as it’s probably the most affordable hardware out right now. (Especially Oculus Quest as it’s a standalone piece of equipment that doesn’t require a powerful PC). I’d imagine that Facebook will be the company that will push VR/AR tech to mass adoption.

Walmart Testing Drone Deliveries

What’s one good thing about living in the suburbs? No it’s not having a pool or having waaaaaay more space. It’s being able to get your package delivered by drones. Walmart has launched a small pilot program in Fayetteville, NC and started making its first deliveries by drone.

Walmart is joining a cohort of retailers that are testing drone deliveries and there’s no better time to test as there are more online orders and people preferring contactless delivery. Let’s see:

• Walmart is partnering with Flytrex for its on-demand drone delivery
  
  
• Amazon has its own autonomous drone service, Prime Air
  
  
• Walgreens is working with Alphabet’s Wing
  
  
• To my surprise, UPS and CVS are teaming up to deliver prescriptions in Florida

If you live in Fayetteville, NC – you can now have drones deliver select grocery items and household items from Walmart. You’ll be surprised at how fast these drones are. Flytrex’s drones can fly up to 32 MPH, traveling up to 6.2 miles round trip and carry up to 6.6 lbs. Can you imagine a future where there are millions of packages being delivered by drones?

I highly doubt that that future is coming soon. Before retailers can even think of testing and deploying drone delivery services, they need the thumbs up from the Federal Aviation Administration. Once they get approval, they are limited to less populated areas because of consumer safety.

There’s going to be some time before we get drone delivery in cities like NY and if you want furniture delivered, there’s no drone that can carry that for you.

Akon is Building a City?!

Akon has been generating a lot of buzz lately and no he’s not dropping new songs – he’s building a $6B cryptocurrency city in Senegal. Akon first announced his idea in 2018 and described it as a “real life Wakanda” – which is awesome! Now as he secured $4B from investors, phase 1 of development is kicking off and expected to be completed by the end of 2023. For phase 1 of the development, there are plans for constructing roads, parks, schools, residencies & more.

This futuristic city will be called Akon City and it’ll be using the Akoin digital currency exclusively. It’ll be interesting as there is potential for Akoin to take off in the continent of Africa as more than 60% of people in Africa are under 25 years old, unbanked and rely on their mobile phones to do everything.

The idea of creating a “real life Wakanda” does sound cool and there is a big opportunity for Akoin to take off but as with anything new there are concerns. Can cryptocurrencies bring economic stability to African economies? Will Akon City be the first successful project that integrates blockchain technology into city building? I’m rooting for Akon and Akon City.

Smart Traffic Lights

This week a California startup called NoTraffic began deploying its traffic grid management software in a couple of key intersections in Phoenix, AZ. NoTraffic’s software leverages AI and connected vehicle technology (V2X) to identify cars, bikes, pedestrians, business, emergency vehicles and commercial fleets.

NoTraffic’s platform will be tracking vehicles and pedestrians as they approach the intersection and calculates “in real time” the most optimal service for the intersection by changing the traffic lights accordingly. No more days of waiting at a red light for 5 minutes even though you’re the only car in the intersection (hopefully).

One of the interesting benefits of the traffic grid management system is that it can be used to give emergency vehicles/first responders the clearest path through busy streets. I wonder how long it would take until technology like this will be used across the nation.

It’ll be a good step forward to make our cities more “smart”, but I can also imagine a scenario where these systems could do more harm than good. Issues of safety comes to mind in a similar matter of how technology and ethics come to play when people talk about self driving cars. Would it also make cities more vulnerable to cyber security attacks?

It’ll be interesting to see how and what it will take to integrate technology to urban planning/infrastructure.