Drinking from the Firehose #126: 😈 I'm the bad guy. 😈


At Harvard Business School reunions, the nostalgia is so strong that alumni elect to do actual case studies in their spare time. At mine, I attended a discussion on the legendary jazz musician Wynton Marsalis and the institution he created -- Jazz at Lincoln Center. The case highlighted the secular decline in jazz fandom in America and debated what Jazz at Lincoln Center could do to revitalize its popularity.

Our discussion centered around how popular culture forms around a particular art form, product, or personality. My viewpoint is that popular culture is defined by shared human experience. Humans are wired to be social creatures. Other humans who share a cultural moment with us are instantly more trustworthy. Cultural artifacts create bonds that are essential to forming cohesive societies.

In this context, jazz had a unique origin story. Jazz is a largely improvised medium, so live performance is critical. If you're not in the room when jazz is created, by definition, you can't share the experience. By the time that music hits wax, there's no risk left in the improvisation. That "seat of your pants" feeling of hearing a solo improvised on the fly is less palpable in your headphones.

As live performance and broadcast took a backseat to recorded music, jazz lost its cultural relevancy. In addition, track lengths got shorter to accommodate more radio ad breaks and the limitations of music storage media (vinyl, tape, CDs, etc). Shorter tracks meant more hook-laden tunes in standard formats, with no temporal room for improv. Production values also got better as recording technology went digital. A typical recorded album today is so highly produced that the musicians who recorded it can rarely sound that good in real life. As a result, live albums or broadcasts often feel less exciting than recorded material. Again, a relative loss for jazz.

The nail in the coffin for jazz, however, is that pop music is itself designed to be popular. In the marketplace for consumer attention, pop artists learned to cross media formats to drive attention to their music. With the advent of digital distribution and social media, the flywheel that turns pop music into popular culture is spinning faster than ever.

Case in point: I saw a meme blow up in my Twitter feed last week. Let's pretend it's this one, since I can't find the original and dozens of these were floating around the internet. It was the first I'd heard of Billie Eilish. I then looked for her music video, which originally sparked the meme, and found her hit "Bad Guy" had 283 million views on YouTube in less than 3 months! That led me down a YouTube rabbit hole, viewing a number of her other hits and live performances. Of course, now my YouTube feed is recommending other videos of hers. In just a few hours of browsing, I turned from an internet denizen laughing at a meme, to a budding fan of a new artist.

I am markedly impressed by Billie. She released her first single at age 13. Today she is 17 years old and, with a single debut album, she seems marked for superstardom. She already has 8 songs on Spotify with over 140 million plays. Moreover, she exercises complete creative control over her music and image, both of which defy a straightforward description. Her success is not accidental. She's giving the market something new and exciting, and she's leveraging the fact that her young audience is on social media and streaming services to consume her product. Her young fans are creating memes and sharing them online to demonstrate to one and other that they are sharing a cultural experience.

While it may seem like a far cry, I believe jazz needs is a bit of what Billie is bringing to the table. Hundreds of thousands of American kids learn how to play jazz instruments each year. Some of these should think about how the art form could be packaged for digital distribution. With all respect for Wynton Marsalis (a national treasure!), jazz won't be saved by posh concerts with expensive drink minimums. Jazz must fundamentally transform to stay relevant.

For more on Billie, check out the below feature on her in the New York Times.


Billie Eilish Is Not Your Typical 17-Year-Old Pop Star. Get Used to Her.

To speak to her business team and label bosses is to hear the phrase “the biggest artist in the world” repeatedly, and in earnest, as a near-term goal. Dave Grohl, whose daughters are obsessed with Eilish, could only compare her to his old band: “The same thing is happening with her that happened with Nirvana in 1991,” he told a music business conference recently, holding up Eilish’s tough-to-categorize music as proof that “rock ’n’ roll is not even close to being dead.” The hip-hop producer Timbaland called this year, and next, hers for the taking.



Chew on this.

Chewy (now CHWY) went public this week and quickly traded up to a market cap of $14 billion! Lee Hower at NextView wrote an excellent piece on his takeaways from its S-1 filing.

Key to Chewy's success is the strong repeat purchasing behavior of its 10 million customers. Chewy's cohort charts feature negative net revenue churn, which demonstrates increasing annual purchase volume from loyal customers over time. Their auto-ship program represents 66% of revenue, so much of their volume is recurring. Its LTV/CAC is less than ideal at ~2.0 over a 3-year period, but cohorts are unusually sticky for a consumer business. At only ~10% contribution margins, however, Chewy will require even greater scale to eek out decent EBITDA.

You say you want a Revolve-ution.

Speaking of IPOs, fashion retailer Revolve (RVLV) also hit the public markets with a $2.9 billion market cap. It forms a stark contrast with CHWY. It's a much older business, growing only 20-30% annually, but profitable with 8% operating margins on $500M of 2018 sales.

While Revolve revealed a 4.5-5.0x 3-year LTV/CAC in its S-1 filing, Theta Equity Partners estimates that its unit economics have declined in recent cohorts. Theta believes it is now tracking closer to 3x.


AirDrop it like it's hot.

Teens are using Apple's AirDrop feature to share memes with strangers on public transit. Unlike social networks, AirDrop is built into iOS and has no centralized network to control content. Nor are there terms of service to comply with. It's basically the wild west right out there on the Caltrain.

That old town playbook.

This article on Trapital walks through how "Old Town Road" by Lil' Nas X was engineered to go viral with some very intentional tactics.


Spy'd like to add you to my professional network.

Neural networks can now be used to generate fairly realistic images of people that don't exist. Recently, a single actor created tens of thousands of fake professional profiles on LinkedIn, in an attempt to coax information out of users. Some suspect that China is behind the hoax.

"Instead of dispatching spies to some parking garage in the U.S to recruit a target, it’s more efficient to sit behind a computer in Shanghai and send out friend requests to 30,000 targets."


A tall glass of water.

Over 2 billion people globally lack access to safe drinking water. In Cape Town, South Africa, the situation has gotten particularly bad. One former marine salvager has an idea to fix the situation that involves towing a 100 million ton iceberg from Antarctica, which would contain a year's worth of fresh water for the region.


Sweet little worlds.

For your weekly dose of adorable and delicious, check out pastry chef Matteo Stucchi's miniature dessert worlds.