November 16, 2020 |  View online | Sign Up

 

Good morning! Restaurant groups are taking on food delivery platforms, startup ideas that sounded bad have a surprising track record, and sports wagering is growing significantly even during the pandemic.

 

 

BUSINESS

 

Your online ordering launched an industry

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Is all your spare change going toward online food orders during the pandemic? If so, don’t feel too bad because that’s where all the restaurant-focused investment is going, too. 

These new ordering habits are seemingly here to stay even after dining rooms reopen at full capacity. New technologies are being developed so restaurant groups can take back control from the Grubhubs of the world.

Don’t forget to tip

• Third-party services are fleecing restaurants right now, sometimes to the tune of 30% in cuts.

• Nearly a dozen online ordering services have received millions upon millions in new investments since COVID-19 effectively changed the restaurant industry forever.

• Lunchbox, for example, just raised $20 million for its Series A round to help restaurants regain at least 50% direct sales from their own ordering platforms. Most restaurants are currently only selling 10% of all orders directly.

That means a lot of money is going to tech companies instead of the restaurant industry. These tech-focused groups are even launching virtual restaurants that lack any brick-and-mortar presence—so shop local while you still can.

 

 

STARTUPS

 

Dumb idea… OK, maybe not

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When does a seemingly bad business idea become a good one? When it starts making money, of course. Fortune asked “solo capitalist” Elad Gil what factors he considers when investing in companies that others pass on. His portfolio includes about 25 startups he bought into when they were still forming long-term business plans.

Eye of the beholder

• Gil likes investing in young companies with ideas that could serve markets yet to be saturated. These ideas are often “boyish” or “low-end” in the minds of other investors—or “dumb” if you want to be a jerk about it. But he’s the one having the last laugh, most of the time at least.

• The people behind the idea are just as important as the idea itself. The best early startup teams, Gil said, include a seller and a builder—and, eventually, an operational mind.

• Old ideas become new again, especially after older generations ruin it for the younger folks. Yes, that means social networks are ripe for turnover, Gil said as one example.

His successful early investments include Airbnb, Pinterest and Square, so he has some credibility in his claims. Gil also admits to missing out on Lyft, so no one’s perfect.

 

 

 

BUSINESS

 

Double down on sportsbooks

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When everyone said they miss sports, what they really meant is they miss sports betting. Now that games are going again, online sportsbook DraftKings is reaping the benefits by outperforming Q3 expectations.

Year-over-year users are up 64% for DraftKings following an unprecedented fall that had every major sports league playing at the same time. Sports betting is legal in nearly half of all U.S. states, so there’s a large base of potential gamblers with extra money to lose while stuck at home.

The details

• Maybe the most famous gambler of all time, Michael Jordan, even bought a small stake in DraftKings, so there is a lot of momentum going for the online sports gambling industry. 

• More than 1 million people placed bets on the platform, including new mobile betters from Illinois, which lifted in-person requirements as part of quarantine measures.

• Where DraftKings wins, casinos lose. FanDuel is the other major player in this industry and combined the two are taking over sports betting as we once knew it.

A lot of this momentum stems from a 2018 Supreme Court ruling that allowed states to legalize sports wagering. 

 

 

 

APPENDIX

• Costco carries just about everything, and we mean everything. How about a private jet membership? Membership card please.

• Dustin Johnson is the reigning champion at this year’s Masters tournament, with a record setting score to boot.

• On the other hand, Tiger Woods put up a 10 on a par 3 at Augusta during the tournament. Ouch.

• Will Smith is back. The Fresh Prince of Bel-Air released a trailer for the upcoming revival series.

• Save the trip to Orlando and Disneyworld this year. A man built a popular Disney roller coaster in his backyard. Impressive, to say the least.