Movers and Shakers #2 | 01/11/2019

Published in

Nvllivs In Verba

6 min readNov 1, 2019

Thanks to the great reception of the first issue of Movers and Shakers, #2 comes far ahead of schedule! So, what are the most exciting companies in the world up to?

In this issue:
3 - Exciting stories about space, burgers and music
1 - Must-read report on disinformation
1 - Must-follow Twitter personality

For the first time in history, everyone can invest in a space company

Virgin Galactic, a space tourism company founded by Richard Branson, is now live on the New York stock exchange with the ticker symbol SPCE.

The company went to the public in a rather unconventional way. Instead of doing an IPO or direct listing, they merged with Social Capital Hedosophia, thus creating the first space tourism company to trade on a stock exchange. A key player in that merger was Chamath Palihapitiya, a famous former Facebook executive and venture capital investor, who founded Social Capital in 2017 with the specific intent for it to become an acquisition company.

Now “anyone can invest in a human spaceflight company that is striving to truly transform the market and be part of the excitement of the commercial space industry,” according to Virgin Galactic CEO George Whitesides.

This deal nets Virgin Galactic about $450 million dollars which it can use to finally start sending people in space. The company has previously been plagued with problems and issues, some even leading to the deaths of pilots. A successful run earlier this year gives more hope for future operations. And they have sold more than 600 tickets already.

I would love to be on that plane at some point in the future, but I feel like they need to prove its safety much more. I am also quite interested in the profitability of this business long term and how they can expand on it. Space tourism is a multi-billion business niche and it’s just getting started.

Sir Richard Branson, founder of Virgin Galactic, outside the New York Stock Exchange before his company’s IPO, Oct. 28, 2019. (AP Photo/Richard Drew)

Spotify reached profitability (finally!)

Spotify has just reported earnings of $0.42 per share on revenue of $2 billion. That’s a 62% year-over-year increase on the bottom line on 34% stronger sales. The number of monthly average users rose 30% year over year to 248 million and premium subscribers increased by 31% to 113 million.

The strong growth shown in the earnings report is likely due to their increased investments in premium podcasts, and it proves that podcasts could become an integral part of the platform.

From where I stand, Spotify has all the makings of a potentially trillion-dollar company.

Explosive Growth - Revenues are up YoY
Recurring Revenue - Nearly half of their 248 million monthly active users subscribe to the premium product (113 million)
Global Product - The product is global, transcending geographical locations
Network Effect - Spotify gets better and gains leverage the more people use it

Still, the company is facing its toughest rival of all - Apple Music. Even though the competitor counts just 60 million subscribers, its clear the Cupertino giant has Spotify is in its crosshairs. Just like Snapchat has ended up being the R&D department for Instagram, so has Spotify been a great source for features of the Apple Music app.

Another issue with Apple is their monopoly on the App store. Spotify has no control over the distribution of its product to the end-user and they have to pay 30% of their revenues to Apple. Not only that, but the Apple store search results for “music” shows its own product at the top, while Spotify has been seen as low as number 23.

Even though this battle is just heating up, I feel like Spotify has managed to differentiate themselves and are on the right track to keep this profitability in the next quarter as well.

The burger wars

You’ve heard about the streaming wars between Netflix, Disney, and HBO.
Well, another war has started and this time it’s about meat and plant-based…meat?

Here’s what you need to know. Privately owned Impossible Foods and publicly traded Beyond Meat are two innovative companies trying to shake up the meat market by creating plant-based alternatives. So far, they have been quite successful at capturing media attention and signing great deals with chains across the US (Burger Kind, McDonalds, Dunkin). Even after all the attention, combined they still own only 2% of the US market. So, there is a lot of room to grow and many issues they need to tackle.

Firstly, it’s flavor. Not only is it very subjective, but people choose plant-based alternatives for different reasons. They either want something that closely mimics the texture and flavor of meat but has less of an impact, or they want something completely different. That’s why they have to choose their targets well and focus on pleasing the customers.

Secondly, plant-based foods might turn out to be not so great for the environment…or you. After the strong positive push in the media, we’re starting to see backlash at the idea that plant-based alternatives are health foods. Yes, they are cruelty-free, but why are these companies promoting them as healthier options? Ricardo San Martin, who studies meat alternatives at UC Berkeley, states that the public has major misconceptions about the health effects of plant-based foods. “Plant-based means it’s of ingredients that come from plants,” he told me, but that doesn’t mean you’re eating a salad - “they are highly processed foods.” As a result, they’re much less healthy than unprocessed veggies.

And finally, Beyond Meat and Impossible Foods are facing increased competition from big traditional players like Tyson Foods, Kellogg, and Nestle. Nestle launched its Awesome Burger, and Kellogg now offers the Incogmeato brand of plant-based foods.

This is a fight worth watching.