The Wall Street Journal covers companies. Pirate Street Journal cover categories.
Each week, we pick three headlines worth paying attention to and break down the category underneath. Live every Tuesday at 7 am PST / 10 am EST. See the news through a different lens.
Dear Friend, Subscriber, and Category Pirate,
Here’s what we covered in this episode:
1. Can a power plant on a truck beat China?
Five years ago, China had under four gigawatts of energy storage. Today it has around 155 and is targeting 300 by 2030. The entire United States has 57. Chinese suppliers control 90% of the global market for storage battery cells.
Centralized top-down versus decentralized bottoms-up.
China wins centralized. No NIMBYism, hundred-year plans, local mayors competing to execute. America wins by letting ten thousand flowers bloom.
Where government fails, the category can’t wait.
Musk worked out that the government had become a critical part of his supply chain, so he did what Apple did and bought it. July filings showed he took APR Energy for roughly $1 billion: trailer-mounted turbines topping a gigawatt, deployable in days.
Microsoft. Firing up Three Mile Island through Constellation.
Meta. Launched its own free community college to train the trades it cannot hire.
Tesla. Megapacks for cities running brownouts, Powerwalls for homeowners arbitraging cheap electrons against peak pricing.
The missing piece has a name: the megapod. Batteries plus GPUs, a data center in a box, sized between the grid-scale Megapack and the household Powerwall. Any enterprise with unused land becomes a distributed data center. Alaska pays every resident about $1,000 a year for sitting on oil. The megapod is that annuity for a farm, a church, a factory.
The Journal reported the scoreboard and missed the rule change. Power is a peak usage problem, which makes it a pricing problem you can solve from your garage.
2. Can weird data pay your rent?
Ben Affleck sold a stealth AI startup called InterPositive to Netflix for $587 million in cash. A downtown Los Angeles ice cream shop called 28 Wishes bets $20 a day on cold weather forecasts and covers 43% of its rent. Seven-person companies are doing the work of fifty, with 15% fewer managers and 15% lower costs.
There’s weird data and weakness data.
Every business sits on data nobody else has, and most of it documents where the business is weak. Ice cream sales fall about 20% every time it drops below 70 degrees. The prediction market turns that weakness into a hedge that pays the landlord.
Turn cost into revenue. This is the Amazon move. Shipping cost became Prime. Compute cost became AWS.
InterPositive. Trains a small model on a single film’s own footage, lighting, and style. An artist equipped with AI, not an AI engineer walking into film. Netflix created binge watching and can now load the buffet faster.
Lemonade. Everybody hates filing a claim, so it built its point of view on the thing the insurance category is worst at.
Universities. Administrators drove tuition through the roof. Cut that layer 15% and college costs 15% less.
Read wealth inequality as taking from the rich and you get one set of solutions. Ask how to make everybody wealthy and you get Invest America.
3. Are consultants’ outcome based fees a sign that fixed salaries will no longer be the norm?
McKinsey has tied 25% of global fees to outcomes.
Bain says 30% of its business is now AI and tech-enabled, on the way to 50%. BCG expects AI work to jump from a fifth of revenue to 40% next year at a $12 billion firm. Meanwhile, the $300 to $500 consultant hour is cracking, and 150 alumni of those firms are under contract training AI to do the entry-level work.
Waiters and waitresses are wondering what took them so long?
The question is will time-based compensation (hourly, salary) without outcomes last much longer for everyone else?
Missionaries who drive outcomes are about to get paid more.
Free riders lose the hiding places.
3 conversations to have about the news with The Pirate Eddie Bot and The Pirate Christopher Bot
The bots run this week’s moves against your category, not somebody else’s. They come with the Founding tier, and they jam at 2 am.
Find your missing middle. Tesla had grid scale and household scale and nothing in between, which is where the megapod lives. Ask the bots what sits between your biggest offer and your smallest, and who is stranded in that gap.
Audit your weird data and your weakness data. Hand the bots the parts of your business you would rather not talk about. An ice cream shop turned “it gets cold sometimes” into 43% of its rent.
Reprice from time to outcome. Give the bots your invoice and ask what outcome the client actually bought. If McKinsey can put a quarter of its fees at risk, you can put something at risk too.
One through-line connects all three. The incumbent optimizes the game as written. The pioneer changes what gets counted: power that moves instead of power that stays plugged in, data nobody thought was an asset, and the outcome instead of the hour.
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Recorded Friday, July 24th. Every number above is as of that morning.
Piratey disclaimer: This is NOT financial advice. None of us have a Series 63, Series 7, Series 6, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).
Stay tuned for next week’s episode.
Arrrrrrr,
Category Pirates 🏴☠️
Eddie Yoon
Christopher Lochhead
