🍺Why One-Time Sales are Outdated as Disco Balls.
Plus, another merger bites the dust, why keeping cool costs a pretty penny, and which SC town is bugging out...literally.
The Weekly from The Liquid Lunch Project, Issue No 115| April 26, 2024
Ever feel like you're racing against the clock to pitch your business idea? Picture this: Hollywood screenwriters had to nail their movie pitches in the time it took to ride an elevator. (Hence, the term 'elevator pitch.') So, next time you're refining your business pitch, channel that Hollywood hustle and make every second count. Want to perfect your pitch? Check out these 17 tips.
ON TAP THIS WEEK
🖱️ Click to Subscribe: Why one-time sales are so last season.
🚄 This high-speed train is promising a gamble-Free, traffic-beating journey by 2028.
😲 That’s Shocking: Brace yourself for AC rate surges.
💸 Bitcoin's Big Halving: Is It the new gold rush or a crypto bubble waiting to burst?
🚫 A Fashion Faux Pas: FTC puts the kibosh on luxury merger.
✖️ The FTC is throwin’ shade on non-competes; why it matters.
💰 Stop Stashing Cash and Start Banking Smart: Why your business needs a savings account.
🌐 And from Around the Web: Senate Sends TikTok Packing, Cicadas Confuse County, and Tesla's Self-Driving Flop. 👯🪲🚙
THE CLASSROOM
Are Subscription-Based Models the Next Big Thing for Small Businesses?
by Luigi Rosabianca
By this point, you've probably heard the buzz about subscription-based business models. Basically, instead of customers making one-off purchases, they sign up for a recurring service or product delivery.
Now, you might be wondering, "Is this subscription gig for me?" The short answer: heck yes! If you've got a product or service that people can't get enough of, why not make it a regular thing?
Whether you're dishing out doggy treats or keeping the HVAC humming all year round, there's a subscription model that can revolutionize how you engage with your customers.
HEARD ON THE STREET
🚅 Faster Than a Speeding Roulette Wheel
Construction has begun on Brightline West, a high-speed train that will reach 186 mph and shuttle passengers between Las Vegas and LA by 2028. Brightline West, whose sister company already operates a fast train between Miami and Orlando in Florida, aims to lay 218 miles of new track between a terminal to be built just south of the Las Vegas Strip and another new facility in Rancho Cucamonga, California. Almost the full distance is to be built in the median of Interstate 15, with a station stop in San Bernardino County's Victorville area.
The goal is to have trains operating in time for the 2028 Summer Olympics in LA. The project is touted as the nation's first true high-speed passenger rail line, designed to reach speeds of 186 mph comparable to Japan's Shinkansen bullet trains. The trip between the LA metro area and Vegas will now take just over 2 hours, compared with a 4-hour-minimum traffic-troubled drive, and its capacity will be 11M passengers on the 218-mile journey per year, with 25 trains each way daily.
Ideas for connecting other U.S. cities with high-speed passenger trains have been touted recently, including Dallas to Houston, Atlanta to Charlotte, and Chicago to St. Louis. Most have faced delays since these other cities lack casinos, late-night bars, and same-day marriages. Geez, these other cities have no sense of urgency!
🔌 Increased Energy Costs Bring the Heat
A/C is getting pricier as electric bills heat up. Last year, 30+ US states saw higher electricity rates, with California and Northeastern states like NY leading the spikes. This trend is certain to continue going into the warmer seasons. To keep up with demand, the US is building hundreds more power lines (passing those costs onto consumers, thank you very much!). Next month, CA officials will vote on a controversial new flat fee of $24/month for customers of utility giants like PG&E to try to lighten prices.
Electricity costs are outpacing overall inflation, and experts say demand could grow 5% by 2029. If you’re from NYC, open the Johnny Pump (fire hydrant); otherwise, get creative with your energy efficiency.
🪙 The Haves and the Half Nots
An argument can be made that recent Bitcoin activity does make it a commodity in line with gold and silver. Growth in the supply of bitcoin recently “halved” for the fourth time in history. Thanks to bitcoin’s mathematically metered supply growth, the reward for mining a block halves every 210,000 blocks, which takes place roughly every four years. The first halving occurred in November ‘12, reducing the reward from 50 to 25 bitcoins per block. Last week’s halving reduced the block reward from 6.25 to 3.125 bitcoins per block.
The halving is critical to Bitcoin’s design, highlighting its predictable monetary policy and bitcoin’s role as a scarce asset, sort of like a commodity like gold. By reducing miner rewards by 50% every four years, Bitcoin lowers its supply growth on a predetermined schedule, guaranteeing that the total number of bitcoins outstanding will never exceed 21M, its predetermined cap. In sharp contrast, central bank policymakers can adjust the supply growth of government-backed currencies idiosyncratically at will.
Currently, bitcoin’s circulating supply stands at roughly 19.7M. In other words, it is only ~6.5% below the 21M at which it will be capped. Since its inception 15 years ago, Bitcoin’s halving has taken place in the context of extended bull market runs. While the past is not prologue, in the 12 months following the three previous halvings, bitcoin’s price appreciation has ranged from ~285% to ~8,478.2%, averaging ~3,108%. This might just be the modern-day gold rush … or bust.
👜 Gub’ment Has No Eye for Fashion
The FTC sued to block an $8.5B fashion industry acquisition. Tapestry, parent of Coach and Kate Spade, wants to acquire Capri Holdings, which owns Versace, Jimmy Choo, and Michael Kors. The move by regulators brings at least a temporary halt to a deal that would marry two major names in American luxury retail and put six fashion brands under a single company: Tapestry’s Coach, Kate Spade, and Stuart Weitzman, along with Capri’s Versace, Jimmy Choo, and Michael Kors. This transaction would allow these luxury brands to better compete with European luxury behemoths LVMH and Kering.
According to the FTC, this deal would deprive consumers of the competition for affordable handbags. At the same time, hourly workers stand to lose the benefits of higher wages and more favorable workplace conditions. News alert: these products are not affordable (that’s the point of aspirational luxury!), and they’re simply heeling American brands from competing on an equal footing with their European counterparts.
Both Tapestry and Capri have been under economic pressure lately as consumers continue to be choosier with discretionary spending. A combo would create natural economies of scale - by bringing this case, the FTC has ignored, or misunderstood, the reality of today’s dynamic and expanding $200B global luxury industry. Polyester suits reign supreme!
⚖️ Judge, Jury, and Hangman
Here we go again….The FTC just created a rule to ban non-compete clauses claiming that non-competes limit worker mobility, suppress pay, and undermine competition by preventing workers from seeking other jobs. Non-competes used to be only for highly paid execs to stop them from taking insider secrets to another company, but in recent years, they’ve also been used in lower-paying jobs.
Prior to this rule taking effect, 1-in-5 employees, including C-suite execs, fast-food workers, and yoga instructors, fell under these agreements. Business groups like the US Chamber of Commerce argue these non-competes help companies, compete by 1) protecting their confidential internal data and IT and 2) encouraging them to invest in their workforces thereby reducing the exorbitant costs of turn-over.
The Chamber of Commerce vowed to sue the FTC to block the rule, claiming the agency doesn’t have the authority to regulate competition and the rule ‘opens up a Pandora’s box’ for the FTC to meddle with other aspects of the economy. Our current legislation and decades of common law have clearly and unequivocally ruled on these agreements. Again and again! The standards are easy to follow: non-competes must be clearly defined, have a minimum geographic reach, and cannot prevent the employee from earning an alternative living. These laws have been handed down by the various State legislatures and Judiciary. Elementary school civics recap – that’s the way laws are supposed to be made in our Republic. Not by executive agencies that have ultimate job security because no one can compete with them because they try to simultaneously wear the cloaks of judge, jury, and hangman.
THE MONEY MINUTE WITH MRM
Why You Need a Business Savings Account
with Matthew R. Meehan
Are you letting your business cash sit idle in your checking account? It's time to rethink your strategy. Having a business savings account isn't just about earning interest; it's about financial responsibility and preparedness. From saving for taxes to funding significant investments, a dedicated account provides a structured approach to managing your finances. Remember, even the most successful businesses, like Microsoft under Bill Gates, prioritize having cash reserves on hand for unforeseen circumstances.
For more on the topic, check out this article.
AROUND THE WEB
Party Pooper: The Senate passed a bill that could kick TikTok out of the U.S. faster than you can say "dance challenge." Despite the company's attempts to sway opinions, President Biden signed it into law, leaving us wondering if TikTok's gonna have a new owner or if we're all just gonna have to start dancing in the mirror again. 🕺🏼💃🏼
Bugging Out: Residents in one South Carolina county are mistaking the deafening cicada chorus 🎶 for sirens or a roaring beast, prompting confused calls to the sheriff's office. Sheriff Foster's message? It's just love-struck male cicadas serenading after a long, 13-year slumber - a noisy reminder that nature has needs, too.
Bargain or Bust? Tesla's "Full Self Driving" system, which ironically doesn't drive itself and requires human supervision, just got a price slash from $12,000 to $8,000. Elon Musk's promise of robotaxis by 2020 still hasn't materialized, leaving drivers to foot the bill for a system that's yet to fulfill its sci-fi dreams. 🚘
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