The CEO Who Gambled $80B In Las Vegas 🃏
Waiting for Kanye's new album like...
Happy Sunday Futurists!
Only Kanye West could sell out an entire stadium, play his new album without saying a single word with a mask on, and then not drop his album.
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Story
Netflix and Peloton Are BIG Gamers
First, there was Walt and Roy who founded the Disney Brothers Cartoon Studio in 1923 making animated movies like Alice’s Wonderland and Steamboat Willie. It wasn’t until years later that the idea of a theme park entered their minds. In 1955, they created Walt Disney World to add another vertical to their already profitable media company.
Other media companies like Universal Studios and more recently Lego followed suit and created their own theme parks and resorts to compete with Disney.
The key theme here: Disney, Universal, and Lego all dominated the in-home entertainment industry first and then ventured into out-of-home entertainment. These companies understood something early on: they would always have to compete with how you spend your time outside of your home.
When the pandemic hit, in-home entertainment options skyrocketed and out-of-home entertainment basically went under. In 2020, streaming services the number of streaming subscriptions rose by 32% bringing the total number of subscriptions to 308.6 million in the US alone. Now that the pandemic is coming to an end (fingers crossed), in-home entertainment services are now looking at different ways to retain users.
There is no doubt that streaming services helped all of us through the pandemic. With movie theatres and gyms shut down, companies like Netflix and Peloton gave us some entertainment to do from our homes. But now that the pandemic is nearing conclusion and people aren’t restricted to their homes, these companies are seeing record slowdowns in subscriber growth.
So what are media companies doing right now to stay relevant?
Netflix announced on Wednesday that it will offer video games in its existing subscription plans at no extra cost. An interesting play to say the least, but it comes after the streaming giant had its worst 6-month span in subscriber growth since 2013.
For now, Netflix’s main focus is mobile video games before competing with PS4 and Xbox. The games will be an extension of their most popular shows with opportunities for standalone games as well.
The Los Gatos-based streaming giant knows it now has a lot more competition to your late-night binge watch. You might go out with your friends, go to AMC theatres, or head out on a camping trip. With the extension into video games, Netflix is trying to up its offerings.
Additionally, Netflix announced last week that they are entering the podcast space as if movies and shows weren’t enough. They will develop their current library of around 30 podcasts, and are looking for new ideas for shows (you may want to pitch your idea to them asap). While their main focus will continue to be movies and shows, podcasts are a great way for them to generate publicity and buzz around new shows.
On the other hand, Peloton announced on Monday that they are also entering the video game space, a change of scenery from their classic instructor-led classes. During the pandemic, Peloton bikes were in high demand as sales doubled.
Now that people can enjoy riding real bikes outside again, their focus shifts to adding a new way to keep users exercising on their products. The game (above), which will open later this year, allows users to select a personalized cadence and resistance to meet their exercise goals by controlling an on-screen rolling wheel. Users also choose music, difficulty, and duration of the game.
These two plays are just the first steps in keeping users on their apps. In-home entertainment now has to compete with out-of-home, something that some of these companies may have taken for granted over the past year and a half.
Who knows? Maybe with Netflix entering the video game industry, the next step might be a Stranger Things theme park?
Business Bite
The CEO Who Gambled an $80B Company
We've launched a new strategy on TikTok where we take some of the craziest stories in business and make 60 second mini-stories on them.
The videos are going pretty viral, so we're now launching this section to highlight our favorite story from the past week.
A CEO bet an $80,000,000,000 company on a game of blackjack.
Now we all know risk-taking is synonymous with entrepreneurship but for the most part those risks are calculate and don't involve las vegas...
This story is different though. It's the extreme case of Fred Smith, Founder & CEO of Fedex.
Confidence is everything when it comes to business and Fred never lacked it. While a student at Yale he wrote a paper about an overnight shipping service and despite his professor slapping it with a C, he pursued the idea anyway and started Fedex in 1971.
It began with 14 planes flying across 25 cities, but high fuel prices in the 1970's, quickly put Fedex in millions of dollars of debt. When Smith begged investors for more cash, he was rejected.
Desperate to keep his company alive, he took the company's remaining cash, and flew to Las Vega where he turned $5,000 into $27,000 that night at the blackjack table, which was just enough to cover the company's fuel bill that week.
It bought him enough time to find more investors, and a few years later Fedex became the first business in U.S. history, to reach $1B in sales in under 10 years.
Check out our TikTok page to see the video version of this story!
Our Future Profile
Arnav Bathla
This section is part of a new series highlighting all of the crazy ambitious young leaders we have on this newsletter! Every week, a new member of our 3.5K+ audience will answer a few questions!
1) The Backstory: I'm Arnav Bathla from Victoria, Canada. I currently attend the University of Victoria, and I am working on building a tech startup for creators.
2) Life or Work Hack: Use Notion to keep yourself accountable. It is great for setting KPIs and goals.
3) #1 Content Rec:
Our Future
The basic books (Lean startup, The mom test)
Arvid Kahl's The Embedded Entrepreneur
Also, highly recommend checking out Lenny's newsletter (awesome resources for early-stage founders building marketplace startups)
4) Advice: Be wary of the schlep's filter and don't lie to yourself. I wasted 6 months by fooling myself that stuff is working but it wasn't. I would've pivoted earlier if I would've listened to the market.
5) Follow me: Linkedin
This section is open to all readers! Do you want to be featured in our next profile 3.5K subscriber audience? Just fill out this form!
Event
Microsoft Cloud CTO Fireside
We have an exciting joint event happening this week with Mark Russinovich, CTO of Microsoft Azure, the company's juggernaut cloud computing division.
Cloud is the oil of the modern economy, powering everything from nightly Netflix binge to your e-commerce orders.
If you're interested in business, you need to learn about why the cloud is integral to the way we live, work, and build companies.
This free event is taking place on Wednesday, July 28, at 11:30 AM PT. Register here: https://lu.ma/gshhflc0
Business Meme of the Week
Survey
Mental Health & Gen Z
Many of us young and ambitious people have felt stressed, burnt out, or anxious about the future in the past year. How have you been coping?
Fill out this quick survey if you're interested in helping a University of Michigan undergraduate researcher find out how the pandemic has impacted us.
Bonus Content
More Cool Business Stories
Mark Zuckerberg only eats animals he kills himself
The MLB invented Disney+
The first billionaire to go to space was not Branson or Bezos
Goldman Sachs' CEO is secretly a DJ with millions of streams
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Written by: Jimmy Sikorovsky, Michael Sikand
Designed by: Elaine Su