Hard Work is the Real Arbitrage Opportunity
This thread went semi-viral this week as people are looking for the next “big thing” opportunity in order to get ahead in eCommerce.
A reminder (as if you needed one) that eCom experienced negative growth in 2021 as store reopenings drew people away from the ease and convenience of online shopping towards the community and immediacy of IRL shopping. But you already knew this, didn’t you?
The thread, authored by Nate Poulin, formerly of Michael Kors, Bonobos, and Outdoor Voices, supposes that “arbitrage” is being talked about ad nauseum on social channels where eCom types hang out (read: Twitter). With Facebook all but abandoning their core product, CPMs on the rise, CAC on the rise, and public sentiment skewing away from Meta-owned properties, performance marketers have every right to be skittish as to the future of eCom media purchasing. But is media purchasing a form of arbitrage?
For those unfamiliar with the word, arbitrage, in layman’s terms, means an untapped source of potential; a source of growth that is underleveraged or as-yet undiscovered.
My take: hard work is the real arbitrage opportunity. Horse-trading transactions online isn’t brand-making. It takes capital and talent, sure, but it isn’t exactly back-breaking labor. The risky and hard-labor equivalents, then, are brand-building, category creation, and product development. Make a thing people love, build a story around it, and, ideally, do that in a way that has never existed before today.
That’s…. hard af.
Hard work is the real arbitrage opportunity simply because technologists by nature want to automate, to pivot-table, to analyze. I’m reminded of the popular XKCD cartoon where a developer builds a system that can pass anything, rather than just manually passing the salt to a dinner guest. Tech’s fatal flaw: to solve everything in the abstract in order to solve anything in the practical. Sometimes the most durable approach, though, is through hard work in perseverance.
So, my take: work hard. And keep working. Longer than you ought. Because most others will not.
That’s the very definition of arbitrage.
Galeforce Winds. Salesforce announced plans for an NFT cloud, and employees are in an uproar, citing issues with the energy, environmental, and economic dangers. Not to mention the association with the monkey-and-lion crowd on Twitter (shudder at the thought). The real irony? Matthew McConaughey’s recent Salesforce ads specifically mention that they’re not going to delve into a space race or crypto, but rather focus on solving real problems.
Now Kiss and Make Up. Macy’s fourth quarter earnings were better than estimates made by analysts, and the company has no plans to split e-commerce out from physical stores. Do we have ourselves a comeback kid?
More Sights & Sounds. Klarna is rolling out a physical visa card. Mattel wants to make Barbie Hollywood's next Marvel. Instagram updated its daily time limit to a 30 minute minimum, removing options for 10 or 15 minutes (after a previous push for mindfulness concerning app usage). Donald Trump launched his platform, Truth Social with chart topping downloads and lots of beginner glitches. Washington has a bill in play which would affect Apple’s ability to collect fees through its app store. An Austrian programmer may have stolen $11 billion worth of Ethereum. European oil prices are spiking after Germany halted opening the Nord Stream 2 pipeline. Meanwhile, U.S. stocks are beginning to dip in the midst of the uncertainty. We’re keeping an eye on this one. The CEO and COO of Fat Brands are being investigated for allegations of money laundering, fraud, and more. Billionaire Carl Icahn is fighting McDonald’s over their treatment of pigs. Kayne uses Slack, just like us. And remember Car Thing by Spotify? It’s available now in the U.S. for $89.99.
Technicalities. Wayfair is getting key players in place for its technical team, including a global supplier VP coming from Google engineering and a chief science officer who was VP of AI at Target. These moves are part of the company’s plans for an enhanced digital presence. At the same time, they are expanding into physical retail spaces like many other online retailers.
Luxury Showdowns. Earlier this month, Louis Vuitton workers staged a walkout at 3 French factories, citing their “fantastic work for pitiful salaries.” Days later, the company announced upcoming price increases of up to 20% on leather goods. Meanwhile, Hermès says their pricing is “genuine,” with no plans for significant increases. And Armani is just over here making cashmere skiwear.
“Is Your Soap Machine Working?” McDonald’s launched a new Cilantro Sundae in China this week. I’m not gonna lie… I’m intrigued. Also, the Twitter thread of people calling out other food “violence” McDonald’s has committed, such as an oreo spamburger is entertaining.
Delivery Up, Plastic Down. With food delivery services increasing substantially since the beginning of the pandemic, some companies are beginning to look for ways to reduce single use plastics in the process. Walmart is testing out a program where multi-use tote bags get collected, washed, and reused. The company has also committed to “using 100% recyclable, reusable or industrially compostable packaging by 2025.” Other delivery companies such as Misfit Market, Imperfect Foods, and Blue Apron are also taking steps to reduce packaging and plastic use in their business models.
Mental health gains. Minded, a telehealth company focused on mental health management, just raised $25 million in funding. The company—which operates without insurance, rather on a $65 monthly fee—aims to remove barriers to patients in need of medication for anxiety, depression, or insomnia. This new funding will enable Minded to improve technology, expand into more than 30 states, and increase its medical team substantially.
Endless possibilities. Roblox has become all the upcoming rage in the advertising world for brands who want to capture the attention of young audiences. But with few guidelines in place around the ethical side of advertising to kids, there are many possible pitfalls to this new space. Some companies, like Kellogg’s and KraftHeinz are clearly labeling their ads, so kids won’t confuse them with games. Other companies are not being quite as clear with their disclosures. It seems that the metaverse is more or less in the “Wild West of advertising” phase.