Good Monday Morning! Itās March 29th and spring is definitely in the air. DC is covered in cherry blossoms. The south is covered in pollen. LA remains covered in hiking selfies. And SWIRL is covered in anticipation about this morningās issueāitās the 10th SWIRL! To celebrate that, weāre giving gifts! If you share todayās newsletter using the button below, youāll have a shot at winning $10; more details at the end of todayās SWIRL.1
Anyway, hereās the SWIRL:
š± Tech:Ā Microsoft shopping for Discord
š Business:Ā Chicken sandwich war goes global
š Politics:Ā Elizabeth Warren & the case of the Snotty Tweets
If this is your first SWIRL, keep reading this part. If not, carry on to the content. Welcome, new Swirlers! Hereās a brief reader guide for you: the three teasers above will unfurl below to briefly cover a buzzy story. Youāll read a little about each one. At the end, we pull on a common thread among all three and explore what it might mean for us. If you missed last weekās SWIRL, tuck inĀ here.
š± Tech: Microsoft shopping for Discord
While several tech executives š„ appeared before Congress to talk about Section 230, the legal rule that has shielded social media companies from responsibility for content on their platforms, Microsoft made news š tied to a potential purchase of another content-sharing platform.
Discord, a communications š¬ app that styles itself as āyour place to talk,ā is reportedly in talks themselves with Microsoft. Weāll get to why next, but letās do a quick rundown š of Discord.
āPurpose: provide users with their own private channels to communicate; think of it as massive group texts; live video sharing is an option, which enables experiences like karaoke, video-game sharing, and live events
ā„ļø Popularity: 140 million monthly active users in 2020
š» Platforms: Mobile and desktop apps
š² Profitability: Nada. Discord says they arenāt profitable yet, but last yearās revenue haul of $130M was nearly triple 2019ās $45M in revenue.2
Microsoft, unlike rivals, Facebook, Google, Amazon, and Apple, lacks a thriving and engaged community platform for its users. Yes, itās one of the most widely-recognized brands on the planet š, but when most people think of Microsoft, they conjure up visions of business applications (Iāll never forget you, Clippy), and to a lesser extent, X-Box and maybe Azure (their Cloud arm). An acquisition š° of Discord could change this.
After failing to buy TikTok and Pintrestāboth would have helped Microsoft solve its community problemāit appears Discord might be the solution. Last month, Satya Nadella, Microsoftās CEO, explained his thinking š§ about the companyās longing for community.
āCreation, creation, creationāthe next 10 years is going to be as much about creation as it is about consumption and about the community around it, so it's not creating aloneā¦if the last 10 years has been about consumptionāwe're shopping more, we're browsing more, we're binge watching moreāthere is creation behind every one of those. But I see that phenomenon being much more democratized.ā - Satya Nadella, CEO Microsoft
Put another way, community enables creation. Creation enables consumption. Consumption enablesā¦
This isnāt a totally new approach for Microsoft. The company purchased LinkedIn, the professional š social networking site, in 2016 and two years later it snatched up a popular code sharing portal called Github. However, those acquisitions were niche. LinkedIn, though widely adopted in the business š¼ world, doesnāt lend itself to the consumable creation Nadella is after. GitHub is commonplace among the code developer and software engineering class, but its popularity tapers off š outside of those groups.
The Discord deal isnāt done yet. But if it does get inked āš¼ in the next few months, hereās one prediction: if you hadnāt heard of Discord until this week (or today), youāll be hearing a lot more about it. Thatās the way Nadella wants it š¤š¼.
š Business: Chicken sandwich war goes global
Editorial note: There were so many business stories this week. But Iām from the South, so youāre getting fried chicken.
If you thought the chicken š sammy skirmishes were behind us, you are wrong. Last week, Restaurant Brands International, Popeyeās parent company, announced a plan to increase š the number of Popeyes locations across the globe, including Mexico, the UK, and a key focus on Asia. Why? Theyāre expanding the chicken sandwich battle-space šŗ.
You may remember that all this business started back in the Before Times during the summer of 2019. Popeyes announced š£ a new Fried Chicken Sandwich to *much* fanfare. So much fanfare in fact, they sold out in two weeks and attracted theāIām just gonna say itājealousy š¤ of competitor Chick-fil-A. The ensuing public feud between fast-food social media managers sent demand for the Popeyeās sandwich through the roof.
Hereās the exchange that launched š a thousand chicken sammy selfies:
During the heat š„ of battle, foot traffic at Popeyes popped by nearly 200% and most locations generated an average uptick in revenue of 30%. While the pandemic was waging war on many of the other brands in the parentās company portfolio of food š„ chains, Popeyeās actually grew by 15% last year.
That success is the war chest they plan to deploy to establish global chicken š supremacy.
Popeyeās strategy includes a number of new markets, but its main target is China šØš³, where American fried chicken superpower KFC is dominant with over 7000ā locations, making it the nationās largest chain restaurant. Thereās only one Popeyeās in Chinaāand it opened in May of last yearābut thatās a start. By the end of the decade, theyāre planning to have 1500 locations.
Donāt let the overseas nature of the new chicken conflicts lure you into a false sense of sammy security. Just when you thought we might be safe in the US, McDonalds goes and does this.
š Politics: Elizabeth Warren & the case of the Snotty Tweets
Social media is wild š. One minute, youāre scrolling memes about the Suez boat saga and the next, youāre witnessing a sitting US Senator spar with Amazon on Twitter.
The spat š¤ŗ started Thursday when Sen. Elizabeth Warren announced sheās pushing for a new law that will force companies like Amazon š¦ to pay a āfair shareā of taxes by closing loopholes that are exploited today. In recent years, Amazon has come under fire for avoiding federal income taxes šµ ā in 2017 & 2018 Amazon estimated that it owed exactly zero dollars in income taxes to the US government. When Warren singled out Amazon in her announcement this week, the e-commerce titanās response was swift.
Warren, bolstering her firebrand reputation, shot back at the Amazon team.
This was not the end. In a tweet that will likely be studied in corporate communications classes š in the years ahead, Amazon responded.
By any measure, this was a bold exchange š for a publicly traded company. Politicians and companies have a long history of tussling over issues like the environment, equality, taxes, and competition, but weāre used to veiled comments or loaded questions during congressional hearings and news conferences. Itās much rarer to see š the direct and personal engagement shared between Warren and Amazon this week.
Itās also rare to see a cargo ship š¢ command international attention for a week solid, and here we are. Letās see how the Suez, Amazon, and Elizabeth fare this week. (They all have zās and Iām sure that means something, I just havenāt figured it out yet.)
So, how do our three stories swirl together? Our three stories feature organizations / figures who are embodying the casual virtue of āif you got it, flaunt it.ā
Each deals with entities who are using their favorable positions to pursue new goals.
šµ MONEY: Microsoft is flaunting its ability to scoop up billion dollar companies. The tech giantās revenue jumped up 17% according to their most recent financial earnings statement. Although they were well-capitalized before, the injection of nearly $15.5B in net income in the last quarter adds to their ability to go shopping for companies like Discord. Theyāre flexing that wallet.
š CHICKEN: Popeyeās is flaunting its fried chicken sandwich success. In fact, Popeyeās president said: āThe chicken sandwich changed the game for us. We want to take that success to the rest of the world.ā Theyāre flexing that sammy.
šŖš¼ POWER: Warren and Amazon are flaunting new levels of power. Warren enjoys broad support among the progressive left, and after a competitive but unsuccessful campaign for the presidency, she has reemerged as a leading voice for Democrats. Meanwhile, Amazon notched a popularity win by taking home the top customer satisfaction spot among e-retailers in a nation-wide study this month; 82% of US households have an Amazon Prime account. Theyāre both flexing political muscle.
Sometimes youāre up, sometimes youāre down. But when youāre up, one of the best ways to deploy your resources is to exploit your advantages and improve your chances of staying up. That might mean laying the way for future growth (Microsoft and Popeyeās) or building defenses for imminent attacks (Amazon) from powerful foes (Warren). However you go about itā¦if ya got it, flaunt it.
Who else did you see flaunting their success to achieve an objective this past week? Letās hear your ideas in the comments!
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Revenue figures from the Wall Street Journal.