🍋 Spotify’s Gen Z Problem

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Short Squeez
December 21, 2021

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"A group will never admit they were wrong. A group will never admit, “We made a mistake,” because a group that tries to change its mind falls apart." — Naval

Good Morning! The S&P 500 had its biggest three-day drop since September, as Senator Manchin pretty much KO'd the Build Back Better bill and Omicron is marching on. It now accounts for 73% of new coronavirus cases in the US, up from 1% only 2 weeks ago. It is even more prevalent in the northwest and southeast, making up over 95% of the circulating virus. It's bad news for restaurants across the country which are also being squeezed by labor shortages and skyrocketing food costs.

1. Story of the Day: Spotify’s Gen Z Problem

The picture above best summarizes Gen Z. It's probably the most unpredictable generation of all time but there is one thing that's predictable about Gen Z: They all love TikTok and they don't don't really like anything else.

Gen Z is defined as the 72 million people born between 1997 and 2012, or as anyone too young to remember Sept. 11. They also colloquially go by "Zoomers."

Spotify execs are worried that Gen Z is not using its app enough. This is probably because the Zoomers are spending too much time on TikTok or making TikToks. Gen Z listening to fewer podcasts could also be a result of their age - most people listen to podcasts in transit or on the way to work and since Gen Z doesn't work and travels mostly with parents they are not listening to podcasts like older generations are. 

TikTok has also cheekily introduced a direct competitor to Spotify in emerging markets (where a lot of Spotify growth is expected to come from). Resso, TikTok's shiny new streaming app, has already amassed more than 15 million downloads in Brazil, India, and Indonesia.

Besides Spotify, every social media company is struggling to understand the Zoomers. Facebook has a Gen Z problem. Instagram has a Gen Z problem. Even Netflix has a Gen Z problem. 

Spotify is investing heavily to appeal to Gen Z. They've done podcast deals with Gen Z influencers like Alex Cooper and Addison Rae. It's added new tools such as Blend, a shared playlist between friends. It's also testing a new destination on its app that will offer snippets of songs/podcasts on vertical video like TikTok.

Short Squeez Takeaway: It seems like every app these days is copying TikTok as they all fight it out for Gen Z's flimsy attention. Facebook is already Boomer central and if platforms like Instagram and Snapchat don't figure out a way to appease the Zoomers, they'll probably be history as soon as Gen Z starts getting real jobs.

Source: Bloomberg

2. Markets Rundown

Stocks fell on Monday on surging Omicron coronavirus cases and a possible blow to the $1.75 trillion US domestic spending bill, with plunging oil prices.

Movers & Shakers

  • (+) Verso ($VRS) +35% after announcing it will be acquired by Swedish paper producer BillerudKorsnas in a deal worth $27 per share in cash.

  • (+) Carnival ($CCL) +3% despite Covid concerns as the company announced it expects to post a profit in the second quarter of 2022.

  • (–) Canopy Growth ($CGC) -9% after Piper Sandler downgraded the stock to underweight from neutral.

3. Top Reads

  • Why US job gains are so hard to count during Covid-19 (WSJ)

  • Why women must be part of planning meetings (TA)

  • Finding some middle ground between Paul Volcker & Jerome Powell (AWCS)

  • Moderna says booster dose of its COVID-19 vaccine appears protective vs Omicron (Reuters)

  • Four resolutions for a healthier tech life in 2022 (NYT)

  • Some questions worth asking: 'Who do I look up to that is secretly miserable?' (CF)

  • Oracle to acquire Cerner in $28.3B deal (Fox)

  • The country that celebrates Christmas for more than 4 months a year (CNBC)

A Message From Sweater: The Venture Capital Fund for Everyone

Sweater is opening venture investing for everyday investors. 

The last decade has seen a rise of retail investors keen on taking investment power into their own hands. Every year, more technology and resources allow investors (like you!) to make well-informed decisions for where their money goes and how it grows.

But the most lucrative long-term investment strategy—venture capital—is still out of reach for the majority of investors, until now. 

Venture capital is no longer just a club for the uber wealthy—it’s our time to put stake in the companies we want and know will change the world. Sweater, the VC Fund for everyday investors is coming soon. 

4. Book of the Day: Range: Why Generalists Triumph in a Specialized World

Plenty of experts argue that anyone who wants to develop a skill, play an instrument, or lead their field should start early, focus intensely, and rack up as many hours of deliberate practice as possible. If you dabble or delay, you’ll never catch up to the people who got a head start. But a closer look at research on the world’s top performers, from professional athletes to Nobel laureates, shows that early specialization is the exception, not the rule.     

David Epstein examined the world’s most successful athletes, artists, musicians, inventors, forecasters and scientists. He discovered that in most fields—especially those that are complex and unpredictable—generalists, not specialists, are primed to excel. Generalists often find their path late, and they juggle many interests rather than focusing on one. They’re also more creative, more agile, and able to make connections their more specialized peers can’t see. 

Provocative, rigorous, and engrossing, Range makes a compelling case for actively cultivating inefficiency. Failing a test is the best way to learn. Frequent quitters end up with the most fulfilling careers. The most impactful inventors cross domains rather than deepening their knowledge in a single area. As experts silo themselves further while computers master more of the skills once reserved for highly focused humans, people who think broadly and embrace diverse experiences and perspectives will increasingly thrive.

“You have people walking around with all the knowledge of humanity on their phone, but they have no idea how to integrate it. We don’t train people in thinking or reasoning.”

5. Short Squeez Picks

6. Daily Visual: Daily US Covid-19 Tests

Source: Axios

7. Daily Acumen: Mental Health Workout

Stressed out? Grumpy? Tired all the time? You need a mental-fitness regimen.

A consistent sleep-wake schedule sends a powerful signal to the brain that the world is safe and secure, which can help to reduce anxiety and promote resilience. 

Establish a routine. Get up at the same time every day. Put on your clothes. Make your morning ritual a ritual - you can write in a journal or set an intention for the day, but just waking up and having a cup of coffee works too.

Calm your mind. You will not be able to cope well with stress if your brain is always on high alert. Starting the day with 15-20 minutes of yoga or meditation then scheduling four "mini interventions" throughout the day - two-minute breathing exercises or other quick ways to let go of tension - is recommended.

Source: WSJ

8. Crypto Corner

9. Memes of the Day

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