The Upside Roundup – 5 Things I Like This Week, October 23
The End of Quibi, How SpaceX Started, and the Cannabis Industry’s’ Election Preference
Let’s get right into this week’s links.
1. The Latin American Architect of Ghost Kitchens
· At 13 years old, Jose Guollermo Calderon began his foray into the food industry by starting a crepe cart. Since then, his influence in Latin America has only grown with his primary mission to make food delivery accessible to millions. Food delivery has become a routine service in the United States, but it has yet to reach that level of scale in countries like Colombia where Calderon is from. Taking his expertise in food and becoming a student of cloud kitchens, he became the founder and CEO of MUY, which merges the two capabilities together. Now named RobinFood, the company just closed on a $36 million investment to add 3,500 locations across Latin America. The company's kitchen operates as an in-person diner during the day with the focus on fulfilling delivery order on nights and weekends. Before the pandemic, RobinFood was driven by its on-premise sales, but it has made the necessary pivot and become an off-premise powerhouse with plans to start opening contactless restaurants in the future. With 38 locations in Bogota, three in Mexico City, and one opening soon in Brazil, the concept is gaining momentum.
· It only took six months, but the mobile-only streaming service Quibi is calling it quits. With Jeffrey Katzenberg and Megan Whitman running the show, and $1.75 billion in initial investment, there were high expectations. After offering a 90-day free trial to users, the app was only able to successfully convert 8% as paying subscribers. By the time the announcement to shut the service down was announced earlier this week, only 72,000 paying subscribers were left. The high bar of becoming a major player in the industry like Netflix and Disney+ was wildly inaccurate. Quibi attempted to use mobile short-form content as a way to bring in paid subscribers, but that busines model has only worked with free, user-generated companies like TikTok. Customers that pay for their streaming services look for full length TV shows and movies, and Quibi was unable to understand that. The service will officially shut down at the beginning of December.
3. A Complete History of the Sports Betting Industry
· America has had a long history of fascination with games of “chance,” stretching back to its earliest days 400 years ago. Settlers raced and bet on horses and used lotteries for entertainment purposes and a source of funds. As you would expect, the rise of gambling created scandals all across the country as the idea spread and forced the industry to go to the black market. It wasn't until 1931 when Nevada legalized gambling that the modern structure started taking hold. But, over the past few years, a new national push inspired the US Supreme Court to allow states to self-regulate and online sports betting in 2018. Today, 23 states have legalized sports betting, with New Jersey serving as a leader, generating close to $300 million in tax revenue in 2019. With continued innovation like daily fantasy, mobile apps, and in-venue betting, getting access to the sports betting market is getting much more convenient.
· In his quest to learn rocket science and make widespread space exploration possible, Elon Musk turned to one man: Jim Cantrell. Cantrell is a space expert that took Musk under his wing, teaching him rocket science, helping launch SpaceX, and become a leading figure in the private space industry. After spending time as a project manager in Russia on a US-Soviet cooperation to design a vehicle -- the Mars Snake -- to send to Mars, Cantrell's efforts were disrupted by the fall of the Soviet Empire in 1991. This effectively ended the Mars mission and sent Cantrell back to the United State unemployed. The collapse of the Soviet Union and their space partnership with the United States was a dampener on the entire aerospace industry. It wasn't until 2001 when Musk first reached out that the seeds for SpaceX were planted. Musk's plans to build to cheap rockets could only be executed through Cantrell, who helped turn SpaceX into a $300 billion company that became the first private company to send astronauts into space in June 2020. A TV series highlighting the company's origin produced by Channing Tatum will air on HBO.
5. Cannabis Industry Banking on a Blue Election
· During the vice-presidential debate, Kamala Harris asserted that an administration under her and Joe Biden would make the proactive effort to make marijuana and its related industries decriminalized at the federal level. The industry has already received significant traction in becoming culturally acceptable over the last decade, but a Democratic win on November 3rd would be a huge catalyst for the industry moving forward. It would start by eradicating the criminal offenses of marijuana-related activities. Next, would be the banks and financial institutions that have avoided working with the industry because of its federal status as a classified substance. This has forced operators in the industry to deal exclusively with cash, increasing the liability associated significantly. The regulatory framework has made receiving loans near impossible, and as an avid supporter of the Marijuana Opportunity, Reinvestment, and Expungement Act (MORE) Act of 2019, Harris is a leading figure in the fight to make marijuana decriminalized.