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PLUS: Do vaccine incentives work?.
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June 4, 2021
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Congress will receive an intelligence report on UFOs in late June. This is another way of saying
<em>
The Hustle
</em>
may spend the entire month of July discussing how to monetize alien technology.
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The big idea
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<h2 style="font-size: 22px; line-height: 26px; font-weight: bold; margin: 10px 0px 5px;">
The government is trying to regulate the fast-growing $650B subscription economy
</h2>
</td>
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<td class="h2020 ignore-defaults" style="padding: 5px 0px 0px;">
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Pet food, groceries, fitness programs, TV, a
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
random box of bones
</a>
-- what can’t we subscribe to these days?
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
But the subscription economy --
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
worth
</a>
~$650B and projected to hit $1.5T by 2025 -- is growing faster than the Federal Trade Commission (FTC) can regulate it,
<em>
The Washington Post
</em>
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
reports
</a>
.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
The FTC is exploring ways to respond to consumer complaints, but the agency is understaffed -- and new rules take time to implement.
</p>
<h4 style="font-size: 17px; height: 100%; letter-spacing: 0px; line-height: 22px; padding-top: 8px; margin: 0px;">
<strong>
Right now, customers have 2 big gripes
</strong>
</h4>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
The first is “negative-option” billing.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Many subscription companies use
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
negative-option marketing
</a>
, which is when a customer’s inaction serves as permission to be charged. It’s like when you forget to cancel a trial, so you get enrolled for a full month.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Negative-option billing is fine if the company is clear about what will happen, but companies that aren’t upfront violate the Restore Online Shoppers’ Confidence Act (
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
ROSCA
</a>
) of 2010.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Example: In 2016, the FTC
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
made
</a>
beauty supplement company NutraClick change its practices and repay $350k for offering “free” samples that turned into subscriptions.
</p>
<h4 style="font-size: 17px; height: 100%; letter-spacing: 0px; line-height: 22px; padding-top: 8px; margin: 0px;">
<strong>
The other gripe: Subscriptions are hard AF to cancel
</strong>
</h4>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
ROSCA states businesses need to provide “
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
simple mechanisms
</a>
” to cancel, but doesn’t define simple. So, the process could actually be more
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
complicated
</a>
-- like making someone who signed up online call customer service.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
For now, some credit card companies are providing the extra rules for business. Because guess who customers complain to when they get a surprise bill?
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Hint: they rhyme with “SchAmex” and “Bisa.”
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SNIPPETS
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Introducing our new and improved
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Twitter's new subscription service
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is now available in Canada and Australia. For less than $5 a month, you get
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premium features
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like "undo tweet" (which may be the closest we ever get to an edit button).
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Theater chain AMC did something with its white-hot stock price. It sold
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$587m
</a>
of shares to the public…
<strong>
but AMC’s stock fell 18% on the news.
</strong>
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Following in the footsteps of Apple,
<a style="color: #d62829; text-decoration: none;">
Google
</a>
will now
<strong>
allow Android users to opt out of ad tracking
</strong>
.
</p>
<p style="font-size: 15px; line-height: 160%; margin: 0 0 0 3px; padding: 5px 0px 10px;">
Billionaire Bill Ackman is in talks to take
<strong>
Universal Music Group public at a $40B valuation
</strong>
, the largest such SPAC deal
<a style="color: #d62829; text-decoration: none;">
ever
</a>
.
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Tech Beef
</td>
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<tr>
<td style="padding: 0 0 6px;">
<a style="color: #d62829; text-decoration: none;">
<img alt="Dropbox logo" src="https://inboxflows.com/_/image/https%253A%252F%252Fthdaily.s3.us-west-1.amazonaws.com%252Ffinal_size-Dropbox_20210604022521.png/?inbox_flows_img_sig=eyJwYXRoIjoiaHR0cHMlM0ElMkYlMkZ0aGRhaWx5LnMzLiJ9:1lp84K:kgQDgPQZxIiU8VUDUs3PgkKh7Bn9aDoF1hq7-lQPC7Y" style="height: auto; width: 100%; max-width: 600px;" width="600"/>
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<h2 style="font-size: 22px; line-height: 26px; font-weight: bold; margin: 10px 0px 5px;">
Can Dropbox survive an active hedge fund?
</h2>
</td>
</tr>
<tr>
<td class="h2020 ignore-defaults" style="padding: 5px 0px 0px;">
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
In 2007, when Drew Houston was pitching Dropbox -- the cloud-based file storage provider -- to investors, he often had this
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
exchange
</a>
:
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
<em>
Venture Capitalist:
</em>
“There are [already] a million cloud storage startups.”
<br/>
<em>
Houston:
</em>
<strong>
“
</strong>
Do you use any of them?”
<br/>
<em>
Venture Capitalist:
</em>
<strong>
“
</strong>
No.”
</p>
<h4 style="font-size: 17px; height: 100%; letter-spacing: 0px; line-height: 22px; padding-top: 8px; margin: 0px;">
<strong>
Houston went out and built Dropbox…
</strong>
</h4>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
… into what is now an $11B public company with 700m registered users and -- in 2020 -- revenue of $1.9B, per
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
<em>
The Wall Street Journal
</em>
</a>
.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
There’s a problem, though.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Unlike Houston’s conversations from the early Dropbox days, there are countless cloud storage companies now… that people
<em>
do
</em>
use. You may know these 2: Apple and Google, which both offer loads of free storage.
</p>
<h4 style="font-size: 17px; height: 100%; letter-spacing: 0px; line-height: 22px; padding-top: 8px; margin: 0px;">
<strong>
Dropbox has expanded its product line
</strong>
</h4>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
It includes efforts in centralized document editing and 2 notable acquisitions: DocSend (document tracking) and HelloSign (digital signatures).
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
However, revenue has slowed and its core cloud business is largely commoditized.
</p>
<h4 style="font-size: 17px; height: 100%; letter-spacing: 0px; line-height: 22px; padding-top: 8px; margin: 0px;">
<strong>
Activist hedge fund Elliott Management…
</strong>
</h4>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
… has taken a sizable stake in the company, per
<em>
WSJ
</em>
. To get a return on its investment, the hedge fund will likely have to find a private equity buyer for Dropbox or a merger partner.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
The hedge fund has notched some recent high-profile wins, catalyzing change at
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
AT&T
</a>
(to leave the media business) and
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
Dell
</a>
(to spring off VMware).
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
However this shakes out, Houston will likely be facing much tougher investor conversations than he did in 2007.
</p>
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Incentive Design
</td>
</tr>
<tr>
<td style="padding: 0 0 6px;">
<a style="color: #d62829; text-decoration: none;">
<img alt="Vaccine freebies" src="https://inboxflows.com/_/image/https%253A%252F%252Fthdaily.s3.us-west-1.amazonaws.com%252Ffinal_size-vaccine_freebies_20210604022905.png/?inbox_flows_img_sig=eyJwYXRoIjoiaHR0cHMlM0ElMkYlMkZ0aGRhaWx5LnMzLiJ9:1lp84K:kgQDgPQZxIiU8VUDUs3PgkKh7Bn9aDoF1hq7-lQPC7Y" style="height: auto; width: 100%; max-width: 600px;" width="600"/>
</a>
</td>
</tr>
<tr>
<td>
<h2 style="font-size: 22px; line-height: 26px; font-weight: bold; margin: 10px 0px 5px;">
Vaccine freebies may not be incentives (but people like them)
</h2>
</td>
</tr>
<tr>
<td class="h2020 ignore-defaults" style="padding: 5px 0px 0px;">
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Since announcing it would give free donuts to any adult with a vaccination card, Krispy Kreme has
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
given away
</a>
1.5m fried treats.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Several other companies and even governments have followed suit:
</p>
<ul style="font-size: 16px; line-height: 20px; padding-bottom: 10px; padding-left: 12px; margin: 0;">
<li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
Ohio’s Vax-a-Million lottery will
<a style="color: #d62829; text-decoration: none;">
award
</a>
$1m to 5 vaccinated adults and full-ride scholarships to 5 Ohioans ages 12-17.
</li>
<li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
Larry Flynt’s Hustler Club in Vegas and New Orleans have held
<a style="color: #d62829; text-decoration: none;">
vaccine clinics
</a>
with perks including free booze and dances from vaccinated performers.
</li>
<li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
Free beer is a popular incentive among towns and beer brands,
<a style="color: #d62829; text-decoration: none;">
including
</a>
Budweiser, Sam Adams, and
<a style="color: #d62829; text-decoration: none;">
Erie County
</a>
, New York.
</li>
</ul>
<h4 style="font-size: 17px; height: 100%; letter-spacing: 0px; line-height: 22px; padding-top: 8px; margin: 0px;">
<strong>
But do these incentives work?
</strong>
</h4>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Most likely… no. Health data doesn’t reflect much of a surge in vaccination rates, per
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
<em>
ABC News
</em>
</a>
. And health experts who spoke with the news outlet don’t think the incentives alone would motivate vaccine holdouts.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
But a
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
poll
</a>
from data intelligence company Morning Consult found that while they might not increase vaccination, incentives don’t hurt a business’ brand:
</p>
<ul style="font-size: 16px; line-height: 20px; padding-bottom: 10px; padding-left: 12px; margin: 0;">
<li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
<strong>
57%
</strong>
of adults said they’d be no more likely to get vaxxed due to an incentive
</li>
<li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
<strong>
41%
</strong>
of adults said they’d view a brand that offered freebies more favorably while only 17% said they’d view a brand less favorably
</li>
</ul>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Plus, freebies often encourage customers to buy
<em>
other
</em>
stuff.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Comic book shops have seen a
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
rise
</a>
in sales on Free Comic Book Day. And despite giving away 4.5m free Slurpees on July 11, 2011, 7-Eleven
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
saw
</a>
a 38% increase in Slurpee sales that day.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
In the mood for a donut now? Krispy Kreme will keep at it all year long.
</p>
</td>
</tr>
<tr>
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<td style="color: #D62829; font-size: 16px; font-weight: bold; letter-spacing: 1.5px; text-transform: uppercase; padding: 0px 0px 10px;">
Meme of the day
</td>
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<tr>
<td class="h2020 ignore-defaults" style="padding: 5px 3px 0px;">
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
<strong>
The best part of watching memes go viral
</strong>
is seeing how creative people get with remixing jokes. Here’s one example: you know how spinach wilts when you cook it? And it shrinks from a handful down to… well, nothing?
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
Here are some related memes.
</p>
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
The original:
</p>
</td>
</tr>
<tr>
<td align="center" style="text-align: center; padding: 5px 0px 6px;">
<img src="https://inboxflows.com/_/image/https%253A%252F%252Fthdaily.s3.us-west-1.amazonaws.com%252Ffinal_size-dividend_growth_investor_20210604023256.png/?inbox_flows_img_sig=eyJwYXRoIjoiaHR0cHMlM0ElMkYlMkZ0aGRhaWx5LnMzLiJ9:1lp84K:kgQDgPQZxIiU8VUDUs3PgkKh7Bn9aDoF1hq7-lQPC7Y" style="height: auto; max-width: 600px; width: 100%;" width="600"/>
</td>
</tr>
<tr>
<td class="h2020 ignore-defaults" style="padding: 5px 3px 0px;">
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
The remix:
</p>
</td>
</tr>
<tr>
<td align="center" style="text-align: center; padding: 5px 0px 6px;">
<img src="https://inboxflows.com/_/image/https%253A%252F%252Fthdaily.s3.us-west-1.amazonaws.com%252Ffinal_size-saas_explained_20210604023414.png/?inbox_flows_img_sig=eyJwYXRoIjoiaHR0cHMlM0ElMkYlMkZ0aGRhaWx5LnMzLiJ9:1lp84K:kgQDgPQZxIiU8VUDUs3PgkKh7Bn9aDoF1hq7-lQPC7Y" style="height: auto; max-width: 600px; width: 100%;" width="600"/>
</td>
</tr>
<tr>
<td class="h2020 ignore-defaults" style="padding: 5px 3px 0px;">
<p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
<em>
(P.S. This segment was written by Dr. Parik Patel, one of Twitter’s funniest parody accounts. Periodically, he will round up the “tweets of the week” for The Hustle.
</em>
<a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
<em>
Check out his latest post here.
</em>
</a>
<em>
)
</em>
</p>
</td>
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</table>
</td>
</tr>
<tr>
<td style="border-bottom-color: #dddddd; border-bottom-style: solid; border-bottom-width: 1px; padding-top: 15px;">
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<td style="color: #D62829; font-size: 16px; font-weight: bold; letter-spacing: 1.5px; text-transform: uppercase; padding: 10px 3px 0px;">
Shower Thoughts
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<li style="font-size: 16px; line-height: 20px; padding: 4px 0;">
<a style="color: #d62829; text-decoration: none;">
“Putting a wool sweater on your dog is putting a wolf in sheep's clothing.”
</a>
</li>
<li style="font-size: 16px; line-height: 20px; padding: 4px 0;">
<a style="color: #d62829; text-decoration: none;">
“Pie can be made of fruit, meat or a never-ending series of numbers.”
</a>
</li>
<li style="font-size: 16px; line-height: 20px; padding: 4px 0;">
<a style="color: #d62829; text-decoration: none;">
“Kids in the future will probably be impressed that some watches don't need to be charged.”
</a>
</li>
<li style="font-size: 16px; line-height: 20px; padding: 4px 0;">
<a style="color: #d62829; text-decoration: none;">
“The voice inside your head never has to stop to take a breath.”
</a>
</li>
<li style="font-size: 16px; line-height: 20px; padding: 4px 0;">
<a style="color: #d62829; text-decoration: none;">
“Archaeology is going to be REALLY interesting in a few thousand years because of plastic surgery, bionics, and prosthetics.”
</a>
</li>
</ol>
</td>
</tr>
<tr>
<td style="line-height: 120%; font-style: italic; list-style-type: none; padding: 4px 0 4px 10px;">
<a style="color: #d62828; text-decoration: none;" target="_blank">
via Reddit
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