Stocks Fall on Worse-Than-Expected Employment Data

Dow: -0.38% | Nasdaq: -0.72% | S&P: -0.44%

Catch Up Quick

• Despite finishing well in the red, U.S. stock futures are currently edging higher in after-hours trading as Yellen pushes for more stimulus

• Axiom Space, a Houston-based developer of the world's first potential commercial space station, raised a $130M in funding led by C5 Capital

• TikTok parent ByteDance is looking to raise capital in the U.S. by listing shares of its Chinese-only short video sharing app Douyin

• Nearly 4M Americans have been unemployed for 27 weeks or longer

• Yields on 10 & 30-year U.S. Treasuries have risen by the most in 3 months

• Lumber prices top $1K for the 1st time as single-family housing starts drop 12%

• GM, Ford, Toyota, Nissan and Honda are among automakers forced to idle production at U.S. plants due to winter storms & power outages

• San Francisco tech workers are mostly moving to Bay Area suburbs, not cities out of state (Postal Service change-of-address records)

• U.S. airlines carried about 60% fewer passengers in 2020 compared to 2019 (Department of Transportation)

• The coronavirus vaccination pace now averages 1.7M doses a day

• Facebook ($FB) will restrict users from sharing news in Australia

Thought of the Day

• A few weeks ago, white hot Silicon Valley start-up Clubhouse reached a $1B valuation, less than a year after its inception

• This blitz-scale has largely been a result of strong product-market-fit and the incentivization in which it curates for celebrities, industry titans, and world leaders to join, providing a safe space for them to interact with both each other and everyday people in front of an audience → in which their massive following in turn advertise the platform

  Elon Musk @elonmusk

  .@KremlinRussia_E would you like join me for a conversation on Clubhouse?

  February 13th 2021

  12,691 Retweets188,283 Likes

• For the unfamiliar, Clubhouse is an invitation-only audio-chat social network, allowing people from around the world to come together, talk, listen, and learn from each other in real-time

• At the intersection of momentous trends such as content creation and podcasting, the platform creates product differentiation by reversing the flow of information, allowing members and listeners to participate in conversations

  Clubhouse centralizes creation and consumption into a tight feedback loop. In fact, consumers can, by raising their hand and being recognized by the moderator, become creators in a matter of seconds (Ben Thompson — 2.15.2021 Stratechery Publication)

• Taking a step back, global events within the past 12 months has made internet aptitude a necessity for many people for which it used to be a foreign concept or a luxury

• With public internet usage and global connectivity rising at a steeper-than-ever, exponential pace, the zero-marginal cost structure and the increasing impact of networking effect mathematics creates a warp speed scaling model for internet-based applications and platforms with particularly strong product-market-fit

• Clubhouse is a recent extreme example, foreshadowing the rate at which future pre-IPO, growth stage, and even down the spectrum to seed stage companies could scale at moving forward in this dynamic

The Bottom Lines

• As the long-term stickiness of a platform is often uncorrelated to acute short-term popularity (which can actually create many obstacles for sustained market adoption), it appears mission critical for Clubhouse to focus on its algorithms

• Similar to how TikTok’s recommendation engine played a huge role its rapid popularization (as we have discussed in the past), it’s possible that every time a Clubhouse member opens the app, they could immediately be presented with a conversation that is interesting to them

• This would be a powerful competitive advantage difficult to replicate, given the need for large amounts of relevant user data to successfully achieve this functionality!

$50 Amazon Gift Card Contest Results!

• Thanks to all who participated in our contest → the 4 winners are:

  1) jorgi.muscariello@gmail.com

  2) cwhitton@scu.edu

  3) maheshmkusa@gmail.com

  4) victoremtrades@gmail.com

• Email us back to claim your prize!