GM! It's Thursday, February 9th - Today, we're covering Lebron James' billionaire status, Google dropping by $100B, Twitter's worldwide crash, and how to win by studying outlier businesses.

 - Callum

FEATURE

How To Copy Your Way to Success

In January, ShiftKey raised $300m to scale its on-demand nursing marketplace after growing exponentially in the last 2 years. While that's impressive, let's zoom in on a broader recurring principle - They were not the first to market.

Yesterday, ShiftMed (very similar name) raised $200m doing exactly the same thing. And it was founded 2 years after ShiftKey (2018 vs. 2016).

Why Should You Care?

If you want outlier results, study outliers and implement their strategies.

Steve Jobs said, "we have been shameless about stealing great ideas." 

Similarly, Jon Skully, the former CEO at Apple, said, “I remember Akio Morita [CEO at Sony] gave Steve and me each one of the first Sony Walkmans. None of us had ever seen anything like that before because there had never been a product like that. Steve was fascinated by it. The first thing he did with his was take it apart, and he looked at every single part.”

And this was before the iPod launched...

More Examples: Many successful companies have benefited from being fast followers. Take a look:

• Calm was founded 2 years after Headspace. It grew to $40m in revenue with just $1.5m raised. How? By targetting the far broader "sleep better" market, as opposed to the more nascent meditation market that Headspace was targetting.

• Ramp was founded 2 years after Brex and is currently valued at $8.1B. It doubled down on customer service and SMBs, where Brex was weakest.

• Deel was founded 2 years after Papaya Global and is valued at $12B. It differentiated itself by building its own legal infrastructure, whereas Papaya outsourced it. More detail here.

The Playbook

To win, you need a competitive advantage. Here are a few ways to do that:

• Cost: You can be 50%+ cheaper and simplify on price. Being cheaper will exponentially increase your market size, but you must ensure your service is operationally efficient.

• Product: Like the Deel example above, you could improve the product and offer more value than your closest competitor.

• Positioning: Sell to a different, or more specific, set of customers. An example is SMBs vs. Enterprise - each customer type requires different skills to sell to.

BTW: The brothers that founded Rocket Internet are billionaires from copying successful startups and launching them overseas.

HEADLINES

Is Lebron James A Billionaire?

> Lebron James: How LeBron James became the NBA’s top scorer, highest-paid player—and first active billionaire.

> Google shares drop by $100B price after its new AI chatbot "Bard" shared inaccurate information in a promotional video, fueling worries that it is losing ground to Microsoft.

> Robinhood will try to buy back Sam Bankman-Fried's shares, who previously owned 7.5% of the company.

> Sam Bankman - Fried is appealing the judge's decision to reveal the identities of 2 people who helped secure his $250m bail.

> Affirm slashes 19% of jobs (500 people) after a big earnings miss.

> New Business: Former Salesforce CEO Bret Taylor is teaming up with Google AR/VR vet Clay Bavor on a mystery startup.

> Disney to cut 7,000 jobs as CEO Bob Iger seeks "transformation."

> Twitter goes down worldwide as millions of users couldn't tweet or use messaging services. 

> Sumo Partners nears $1.7B acquisition deal.

ON TREND

Big Tech's Mass Layoffs Explained

Meta is flattening its organization by asking its managers to transition back to individual contributor roles. Here's a deep dive into a problem that plagues high-growth technology companies.

You should know:

• Mass Layoffs: Big tech companies like Salesforce, Twitter, Meta, eBay, Paypal, and Spluk are laying off thousands of people in brutal mass layoffs. Most recently, Zoom announced it laid off 1,300 or 15% of its staff.

• The Middle Manager: As companies seek efficiency, the biggest target of these layoffs has become middle managers. Those adding to the managerial layer cake but not actually producing work (e.g., code, deliverables, etc.).

• The Problem: Traditionally, high-performing employees seek to grow within their organization by becoming managers, which removes their ability to actually do the work. Over time, all your best workers seek to become managers. This results in layers of middle management, leaving your lowest-performing employees actually doing the day-to-day work.

• Musk Says It Best: Elon Musk recently referenced this problem as the biggest challenge at Twitter, saying, "There seem to be 10 people 'managing' for every one person coding."