What can Bezos do for you

Quote of the Day

If Disney made the most magical place on earth, we want to make the most empowering place on earth."

Market Snapshot

• The Dow finished up despite suffering its worst weekly drop since January 2016.
• The S&P and Nasdaq bounced back after a tough week.
• Concerns of higher interest rates sent European markets falling.
• Bitcoin is still hovering above $8,000.

What Can Amazon Do For You? Apparently, Delivery

Amazon has perfected disrupting industries as the ultimate side hustle (it was between that and babysitting). And now, it’s testing delivery services in Los Angeles, positioning itself to undercut FedEx and UPS.

The service, dubbed “Shipping with Amazon,” is offering business-to-door delivery for the company’s third-party merchants (read: sellers on Amazon). Although, it hopes to cover all types of businesses as it expands beyond LA.

Naturally—like any other Amazon announcement—it sent UPS’ and FedEx’s stocks tumbling.

And while we shouldn’t be shocked by that...well...we’re still kind of shocked

Amazon has seemingly entered “invincible” status, where a simple announcement is enough to cripple future competitors.

* Remember groceries: Its acquisition of Whole Foods intitially wiped out a combined $12 billion in market cap from six competitors.
* And health care: Securing pharmacy licenses in 12 states was enough to send some pharmacy stocks down 10%. Or what about Amazon’s new partnership with JPMorgan and Berkshire Hathaway, when insurance providers faced a similar fate.
* Then there was Best Buy: Amazon announced a Geek Squad competitor, sending the stock down 7% immediately.

The point is, as famed tech observer Scott Galloway puts it—in a truly capitalist economy, one company shouldn’t hold such market-moving power.

That said, FedEx says bring it on...

...by calling attention to a video showing just what Amazon is up against:

And while it took FedEx multiple decades to build up this infrastructure, Amazon feels ready to tackle the challenge. It…

Already offers delivery for some of its own products in 37 U.S. cities
Leased 40 aircrafts
Has a framework for in-home delivery
Offers ocean freight
Has a patent on a blimp-like cargo hub
Expects to be able to undercut the industry in pricing
The bottom line: No company should be big enough to move markets, but in Amazon’s case, there might be a reason for it.

Uber and Waymo Settle Trade-Secrets Suit

And just like that, Law & Order: Driverless SUV is...done done. Five days into the court case heating up Silicon Valley, Waymo agreed to settle its lawsuit against Uber over claims of stolen self-driving vehicle trade secrets.

The agreement: Uber promised not to use Waymo’s tech in its self-driving cars’ hardware or software. In addition, Waymo got a 0.34% stake of Uber’s equity, ~$245 million (at Uber’s $72 billion valuation).

The disagreement: The case centered on Uber’s acquisition in 2016 of autonomous-truck company Otto, founded by former Waymo engineer Anthony Levandowski. Waymo alleged that Uber stole its driverless-car design secrets under the guise of that deal; Uber said no way.

So, what pumped the brakes on a trial set to last another few weeks? Possibly evidence that Levandowski downloaded 14,000+ files from Google to his personal laptop. Or former CEO Travis Kalanick’s testimony of wanting to hire Levandowski while he was still a Google employee.

In Uber’s defense, you’re supposed to keep your friends close and your enemies Waymo closer.

Sick of Flu News?

The flu is already decimating the U.S.—responsible for 1 in 10 deaths last week—and expected to wreak even more havoc.

From the CDC: This outbreak’s remarkable numbers are now as high as the peak of 2009’s swine flu, which affected 60.8 million Americans and killed 12,469. Deaths from this influenza (and closely-related pneumonia) virus are projected to outpace 4,000+ per week.

From Japan: Drugmaker Shionogi & Co. has developed a pill that can kill the virus in 24 hours—3x faster than Roche’s Tamiflu—and requires only a single dose (vs. Tamiflu’s bi-daily doses for five days). Shionogi is submitting for U.S. approval this summer, but doesn’t expect a decision until 2019.

From concentrate: Americans are drinking orange juice again, hoping to stave off the flu. Sales of the vitamin C elixir are up for the first time since April 2013.

From the NIH: The best flu prevention is still a vaccine.

L.L. Bean, Tired of Being the Cool Dad, Updates Return Policy

Gone are the days when you can walk into any L.L. Bean with a dirty sock and walk out with a canoe.

That’s because the outdoor retailer is updating its famous policy of 100% satisfaction guarantee (aka return anything you want, anytime) to a stricter one-year return policy, which also requires a proof of purchase.

As it turns out, an unlimited return policy is bad for business—in L.L. Bean’s case, costing $250 million over the past five years. Chalk it up to customers who’ve used it as a “lifetime product replacement program” (L.L. Bean’s words). Recently, 15% of returns abused the policy, whether it’s returning sweaters after 30 years, or getting refunds for clothes bought at a yard sale.

Zoom out: This is one of several initiatives the retailer is undertaking to modernize operations. Later this year, L.L. Bean will attach sensors to some of its gear, gathering data that’ll be sent to the Ethereum blockchain platform

What Else Is Happening…

• NY's Attorney General filed a lawsuit against the Weinstein Co. and its co-founders, Bob and Harvey, for "egregious examples of sexual misconduct."
• In a limited time offer, MoviePass lowered its monthly rate to $7.95. This is getting crazy.
• Later today, President Trump is expected to reveal the White House's infrastructure plan.
• A Saratov Airlines plane crashed outside of Moscow, killing all 71 on board.
• Nestle continues its health binge, buying a majority stake in organic food company Terrafertil.
• YouTube continues to put Logan Paul in time-out. It temporarily banned ads on his channel.

Economic Calendar

• Friday (Feb. 9th)       Earnings: No Events

                 Economic Events: Wholesale Trade (+)

• Monday     Earnings: Heineken, Restaurant Brands International

                    Economic Events: Treasury Budget

• Tuesday    Earnings: PepsiCo

                  Economic Events: Small Business Optimism Index

• Wednesday    Earnings: Cisco, Marriott, Credit Suisse

                        Economic Events: CPI, Retail Sales, Business Inventories

• Thursday   Earnings: No Events

                   Economic Events: PPI, Industrial Production

• Friday       Earnings: Allianz, Kraft Heinz

                 Economic Events: Consumer Sentiment

Coffee Chats: Tom Bilyeu

Tom Bilyeu, co-founder of Quest Nutrition—a protein bar maker which reached a $1 billion valuation in 2016—is a living, breathing TED Talk.

His personal mantra? “You can do anything you set your mind to without limitation.” He thinks patience is overrated: “If you want to win, you’ve got to attack every day as if it was the only day.” Oh yeah—his new company, Impact Theory (co-founded with his wife, Lisa), is a studio “meant to rival Disney.”

The guy thinks big.

But he wasn’t always that way. Teenage Tom was “lazy” and had a fixed mindset. “I thought I was an abject failure, never going to amount to anything...I didn't think you could develop talent. You either had it or you didn't.”

Needless to say, that attitude changed. Over the course of attending USC film school, dreading Monday mornings at a data loss prevention company, and growing Quest 57,000% in its first three years, Tom has emerged with a single mission:

“Free people from the Matrix.”

The Breakroom

Question of the Day

Can you find a five digit number which has no zeros and no digit is repeated, and where:

The first digit is a prime number.
The second digit is the fifth digit minus the first digit.
The third digit is twice the first digit.
The fourth digit is the third digit plus three.
The fifth digit is the difference between the first digit and the fourth digit.

(Answer located at the bottom of newsletter)

Business Trivia

Which L.L. Bean product has seen waitlists that stretch into the tens of thousands in recent years?

(Answer located at the bottom of newsletter)

Stat of the Day

12.1%—The increase in the U.S.’ trade deficit since President Trump took office. Hitting $566 billion, it’s the highest the deficit has been in nearly a decade.

Breakroom Answers

Question of the Day: 23,475

Business Trivia: Duck boots