September Stinks for Stocks & Why Tech is All About "Founder Mode"
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Welcome, welcome. This is for anyone who listens to Morning Brew Daily while scarfing down a bowl of cereal. The publication Complex published a list of the 50 best breakfast cereals of all time, and we want you to get irrationally angry about it and debate it with your friends. I'll read off the first five, and Toby, you can tell me what they got right and what they got wrong. Number one.

Cinnamon Toast Crunch. Number two, Honey Nut Cheerios. Number three, Cap'n Crunch's Crunch Berries. Number four, Oreo O's. And number five, Fruit Loops. Now, my initial observation is that three of the top five have individual units that are O's. So the closer your cereal resembles to its nutritional value, the higher up in the ranking it is.

I mean, where do we even begin, Neil? Let's start with what they got right. CT Crunch at number one is a very solid pick, but then a massive fall off to number two in Honey Nut Cheerios, which is getting by on longevity and name recognition at this point. But really, my bone to pick is with number four Oreos. Did a kindergarten kindergarten

Kindergartner, write this list because you are right. That is a nutritionally bereft cereal. It is a cookie, not a cereal. And then finally, get out of here with Fruit Loops at number five. Give me honey bunches of oats. Give me frosted mini-wheats. Give me special K with strawberries, but miss me with that toucan. Okay, rant over.

I'm a big cereal guy. Now let's take a moment to hear from our sponsor, Mass Mutual. So the New York Marathon is coming up and I've been training, but I've never actually had a coach just been winging it. And that explains why you're always limping around the office. I don't want to hear you moan and complain all the time. You need a coach. You're not wrong.

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September is the best month for so many things. The sweatshirt and shorts combo tossing around the football, the potato harvest. But one thing it is absolutely not good for is the stock market. Going back more than 100 years, September has been the worst month of any for stocks. And they certainly stuck to the script yesterday, the first trading day of the month.

The tech-focused Nasdaq tumbled 3.3%, and the S&P 500 fell more than 2%, good for the worst day on Wall Street since the early August meltdown nearly a month ago. Investors are jumpy right now, and they're hitting that sell button

on any sign of weakness in the economy. They didn't have to wait long because in the morning, two readings of manufacturing production came in lower than expected. Those economic warning signs sparked a major sell-off that sent the VIX fear gauge soaring and tech stocks tumbling. Semiconductor companies got bruised up the most. The biggest one, NVIDIA, plunged nearly 10%, wiping off almost $300 billion in value, the largest one-day market cap loss for any U.S. company on Earth.

record. Toby, for whatever reason, September is always a nightmare for the market. And so far, it's not looking like that narrative is going to change. September just plain stinks. The S&P 500 has suffered an average monthly decline of about 1.2% in the month. It has only finished higher less than 50% of the time, dating all the way back to 1928. It gets even worse in election years as well. The S&P 500's performance

from August 31st to October 31st in election years, averages a decline of 4%. So why is September historically bad month for stocks? Just think about how information travels. Good news filters through markets very, very quickly because anyone can buy a stock, but bad news filters a little bit more slowly because only people who own the stock

can sell it so factor in the fact that a lot of the finance world ends up on summer vacation in August so the ability to filter that bad news is even more kind of repressed because a lot of people are at their beach house in the Hamptons so when everyone gets back to work in September all

that lingering bad news kind of really starts to set in and that's what maybe causes those stocks to go down. That is a theory. Do you actually think that that's true? Well, it's become a little less so in just the age of cell phones and algorithmic trading, but it definitely was, I mean, if we're looking back

100 years. This is part of the reason why. So the September effect should be diminishing as we are remain more connected. But yeah, I'm going to blame the people at their Hamptons houses for not, you know, processing bad news as quickly as they should have. There's also a theory that when you come back to work in September, you review your portfolio, you prepare your annual profit and loss statements, and you shed some of the stock

that have been performing well for you and reallocate. So that is another theory. You said that the September effect should be diminishing now that everyone has smartphones and can react to bad news even over the summer, but it's only grown more powerful over the last four Septembers. Each of them have been negative in major ways. 2020, we were down 4%. 2021, we were down 5%. In 2022, the market crashed 9%.

in September. And then last year, it was down 5%. And already, we're off to a horrible start. Investors, like I said, are just awaiting. They're very anxious about the economy right now. And we had that big meltdown back in August. And stocks have climbed back to near record highs. But yesterday was a total wipeout. Any sign of economic weakness, investors are

are selling hard. The big event coming up is this jobs report on Friday, and investors are just really worried that that number is going to come in really weak and add to concerns that the economy is slowing down in a big way. Paradoxically, though, just to fully confuse you guys, Americans have never been more bullish on stocks right now as of the second quarter, the number of 401k accounts that are

are at a million dollars, reached an all-time high. They're up 31% from a year ago. Stocks recently accounted for about 42% of Americans' total financial assets. That's the most on record going back to the 1950s. And stock allocation has just steadily inched up over the last year. The S&P 500 has hit more than three dozen highs in the last year or so. So right now, Americans do on the whole seem bullish at stocks. Let's see, though. We just have to get through September. We just got to get through September.

You've heard of goblin mode, sicko mode, and even monk mode, but may we introduce a new mode to the lineup, founder mode. It's a term recently coined by the legendary investor and founder Paul Graham in his latest essay that has all of Silicon Valley abuzz. The easiest way to define what founder mode is is to start with what it's not. It is not manager mode, the mode that most founders are encouraged to adopt when their companies grow to a certain size.

The phrase, hire good people and get out of the way, is parroted across organizations but is antithetical to the ethos of founder mode. Instead, Graham argues, founders should look to the likes of Steve Jobs and more recently Airbnb's Brian Chesky as examples of founders who remain very hands-on even as their companies grow. Neil, this got the internet going.

all riled up. Is delegating responsibility actually hurting companies more than helping them? Or do founders just need to hire better? Founder mode. I mean, no one knows what it means, but it's provocative. This started when Brian Chesky, the CEO of Airbnb, gave a talk and he said he regretted a lot of the decisions he made. He said he was encouraged to

When Airbnb got out of that startup mode, that hustle and grind mode, and was in a more mature company, he was encouraged to hire executives, lieutenants, and let them do their job and just be their manager and not be active in the day-to-day, not be the micromanager that he was when he was founding the company. And he said,

He absolutely regretted that. The company went backward when that happened. And as soon as he said that and Paul Graham published this essay, so many other founders and people in the startup world came out of the woodwork and said, you know what? I've been told this exact same thing to take a step back from those

Thank you.

from so-called experts to delegate. And this is some pushback to delegation saying, actually, the most successful founders maybe are micromanagers. Right, and if you go down the list of founders that exemplify founder mode, you got Steve Jobs, who obviously everyone has studied. Brian Chesky pointed to him as the person that he studied the most.

Jensen Huang of NVIDIA. He's got 60 direct reports, which is a lot. He still eats lunch in the company cafeteria, so he's very embedded in the day-to-day of NVIDIA. Elon Musk is another big example of someone who is very immersed in the minutia of a company. Mark Zuckerberg at Meta. Sam Altman of OpenAI. You can go down the list. But on the other hand, you can also go down the list of people who...

exemplified founder mode and it led to disastrous results. Sam Bankman, freed Elizabeth Holmes. Um, even, uh, you can look at Travis Kalanick, Travis Kalanick, Adam Newman, like for every example of a positive founder mode, you can probably find a negative as well. So a lot of people were pointing that out. And, and, uh, for every founder that did well, you could look at particular managers who weren't founders of their company came in from another, uh,

company with this ethos of I'm going to have a more classic management style, take a step back, let other people do the work. And, uh, so you had these memes going around of Microsoft stock where founder mode quote unquote was this pretty much straight line while Bill Gates and Steve Ballmer were at the helm. And then Sadia Nadella came in the manager, not the founder and the stock and the stock looks like, uh, uh,

a hockey stick. So for, and I think that's why this, this founder mode, manager mode dichotomy, you know, caught fire so much and it sparked so much discussion because there are two sides to every coin for every good founder. That's a micromanager. There's another one that's a really good

That's a really good just overall manager. So it's food for thought for founders. I think it was interesting to see a lot of founders come out and say, I've heard this exact same thing to delegate and it didn't work out for me, to which I might think maybe you're just that bad at hiring.

What's red, white, and rapidly losing popularity? Wine. The latest sign of the unprecedented slump in wine drinking came yesterday when beverage giant Constellation Brands said it would book a loss of up to $2.5 billion related to its struggling wine and spirits business. In the latest quarter, wine and spirit sales declined 7% compared to 8% growth in beer sales.

Constellation is hardly the first company to warn of drinkers drawing a Sauvignon blank. In June, Duckhorn Portfolio cut its guidance due to the weak wine market. And then absolute vodka owner Pernod Ricard sold most of its wine brands in order to focus on businesses that are actually, you know, growing.

Globally, wine consumption fell nearly 9% last year to a 27-year low, and the industry is searching for answers. Toby, we know that younger people aren't drinking as much alcohol, but they seem to be developing a special distaste for wine in particular. Too many tannins? Too many tannins.

I was digging into some of the industry reports around the wine industry. There was one that came from NIQ that said that in the first quarter of this year, wines under $12 perform the worst. So you're right. It is younger people, those entry-level consumers who are not buying the $1,000 bottles of wine that are just saying, listen, wine maybe doesn't satisfy the taste buds like it once did. A big reason, too, is coming out of the pandemic, people—

their wine purchasing. We have not seen it bounce back to pre-pandemic numbers either. So these distributors and retailers are looking at their portfolio. They're looking at their inventory and saying, we got too much wine on our hands right there. I mean, remember, we talked about on this show, the French government literally paid

paid wine producers over $200 million to destroy 80 million gallons of surplus wine they were unable to sell. If that isn't emblematic of just the broader state of the wine industry, I don't know what is. Yeah, wine production costs are going up while demand is rising.

Lower wine producing has outstripped wine consuming every single year for the past decade. Yeah, so many factors. Millennials and Gen Z just aren't drinking as much alcohol. There's more competition for a smaller share of the alcohol market with hard seltzer and canned cocktails. People seem to be drawn to those more so than that classic bottle of Pinot Grigio. And then I think there's a general awareness that drinking is bad for you and that's

There's so many studies that come out about like is a glass of red wine good for you every single night? Is it bad for you? And I think there's a growing recognition that sort of any type of alcohol is bad for you. So that's sad because I do like wine, but I think this industry will have to grapple with whether this is a long-term secular decline to zero or something a lot smaller, or it's merely a blip where actually people bought so much wine in 2020,

The industry potentially thinks that people call they call them pantry stuffers or pantry holders. And they have so many wines that they bought in 2020. They still haven't worked through them. And that once they work through all of those wines that they have in their cellar, they'll they'll unleash a new round of buying. But yes, this industry is in major contraction mode right now. Up next, why are so many people going out to eat by themselves?

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Calling all HR pros. I want to tell you about Indeed FutureWorks, the event you don't want to miss if you're a talent leader. It's all happening on September 26th, and this year they've got comedian Trevor Noah headlining it. Trevor Noah? I love that guy. Yeah, he'll be providing a fresh take on equity in hiring and how better work leads to better lives. Looks like they also have Indra Nooyi speaking. She was the CEO of PepsiCo.

Sounds like a pretty stacked speaker list. So if you're ready to discover the latest AI tools and tech solutions that help you find better candidates faster, sign up for Indeed FutureWorks on September 26th. Best of all, if you join virtually, it's absolutely free. Sign up today at indeedfutureworks.com slash brew. That's indeedfutureworks.com slash brew.

- If you have eaten alone at some point in the last year, you are actually not alone. In the US, solo dining reservations are up nearly 30% over the last two years, according to OpenTable, while a survey of 2,000 diners found that 60% of Gen Z and millennial respondents

have dined solo at least once in the past year. And it's this rise into chowing down alone that I want to talk about on today's belated edition of Toby's Trends, where I take a deep dive into the internet and emerge with a trend you should keep your eye on. So why so many parties for one? It could be that our dining habits are mirroring larger social trends,

record 30% of Americans live alone, while the U.S. Surgeon General has warned of a loneliness epidemic affecting the country. But on the flip side, some diners just like being alone. It's a time to unplug for half an hour or so and just take a breather from your fast-paced lives. Neil, for so long, dining alone has almost been scoffed at. It's been the subject of punchlines in movies, but now it's

far more accepted. It really is. And the growth is pretty staggering. What's interesting to me is how restaurants are responding to this because they're getting a lot more people who are singles coming in and wanting to try out their restaurants. So there are some

ways they are responding, which is redesigning their dining rooms, adding more counter seats, or some are even going so far as to create little mini booths for single diners in order to cater to their experience. They're having more tasting menus. So one reason that people don't go eat by themselves is that they want to try a lot of

the menu and you can't because you only have one stomach. We're not a cow. So there's yeah. So they're trying these, you know, more tasting menus where you get a little tidbit of everything. Balthazar, which is this very fancy restaurant in New York City, actually gives you a free champagne glass if you come eat by yourself. So restaurants are sort of grappling with this new era of smaller parties where they have to redesign their menus and their interior design in order to cater to this

really rapidly growing population of people are eating at these restaurants. Part of it, too, I think, is the rise of fast casual chains, Sweetgreen, Chipotle, where a lot of lunch goers grab their bowl, they sit down. It's not socially...

unacceptable to go eat lunch by yourself. You see it all the time in cities. And a lot of people, too, just enjoy the experience of eating alone because there is this 2023 survey where 60% of people said that they were okay eating by themselves because in the top...

reason cited was much needed alone time. Think about how much of your life is just spent scrolling or how much of it is spent just around people. Some people just want that chance to unplug, savor a nice meal, maybe talk with the waiter about the menu or something like that. It's a different experience and it's definitely a changing cultural phenomenon. Um, even though some people, I, I,

you've done it one time or two. Have you enjoyed your experience? No, I don't know. I don't like it. I mean, the concept is appealing me time. I get to, you know, be by myself in this interesting space. But no, I did it two weeks ago on Long Island. And I mean, it was fine. I didn't get to eat

whatever I wanted because I wanted to try all these things on the menu, but I could only stomach one dish and I ended up yes, you say we're scrolling all the time when I'm sitting by myself. What do you think I'm doing? I just literally pull out my phone and I'm sitting there doing the crossword the whole time while just like looking around. So it was interesting, but I realized that I personally would much rather be with people when eating and I know other people feel differently than that obviously and

Well, here's some advice. Don't take financial advice from TikTok. People who did this weekend are finding that out the hard way, seeing massive negative balances in their banking accounts and probably Googling, what is the punishment for check fraud? Here's what happened. A few days ago, a viral trend took over TikTok and X that allegedly exposed a glitch in Chase Bank's ATMs. All you had to do was write a check for a bazillion dollars, deposit it, and withdraw a lot of money before the check closed.

cleared. Boom, the infinite money loophole. People actually did this. Videos showed long lines forming around Chase ATMs in the New York area, with some who took out thousands of dollars boasting about their clever ploy on the internet. And then reality hit.

Chase said whatever that glitch was, it had been addressed and pointed out that these people were actually committing a crime. Regardless of what you see online, a spokesperson said, depositing a fraudulent check and withdrawing the funds from your account is fraud, plain and simple. Not only was this fraud, it was the easiest kind of fraud to catch because these people were seemingly committing check fraud against themselves. So the bank knows exactly who did it.

it. Toby, if it's too good to be true and it involves the largest bank in the United States giving out free money, it probably is. Right. This is a process known as check kiting. It's where you take advantage of the float, which is the time it takes for a check to be processed to use these non-existent funds. Check kiting is illegal because it's essentially an interest-free loan without the bank's consent. So that

That poses this huge risk to financial institutions, which is why it's looked at as a form of check fraud. But really, this is just another example of how TikTok can play into spreading some not-so-sound financial advice. I mean, last year around tax season, we talked about these tax evasion

influencers giving advice about how you can write off your $70,000 truck if you're using it for commercial uses. And the problem is that they package this advice for virality, not necessarily for accuracy. So, and whenever you go on TikTok and you see people like throwing money into the air, uh,

in saying like, hey, you got to try this hack out. Of course, you're going to be curious or maybe susceptible to that. So a very interesting example of another trend spreading through the internet and leading to real life consequences for people. It did seem like wiser heads prevailed here because for every one person that was trying the hack, and there were a lot of people, I mean, I saw these videos, there are literally lines to get into the Chase ATMs. There were 10 people saying,

you're committing a crime. This is check fraud. Congrats on discovering a fraud that's been around for 100 years on the internet a few days ago.

If you are single and dating apps aren't working for you, maybe you should be focused on Pine App Oles instead. That's because over in Spain, a new fruit-based code has emerged helping single people find partners in supermarkets. Yes, single Spaniards have been flocking to the grocery store chain Mercadona between the hours of 7 and 8 p.m. and then using fruit to broadcast their intentions.

Here's the code. If you put a pineapple upside down in your shopping cart, it means you are down for a date, but a legume or lettuce means you are more DTF and looking for a short-term fling. Dating app fatigue is a real thing, Neil, but looking for love in aisle nine might

be a step too far. I don't know. Why send an eggplant emoji when you can go pick up a real eggplant? I think this was a matter of time before something like this happened. All the trends are pointing out that younger people are so fed up with dating apps. They want to seek out in real life experiences. This was sparked by a viral tick tock. Of course. I mean, that's like half of our shows. Here's the viral tick tock. Uh, but, uh,

by a TV personality saying like, here's this code I've discovered that's going on at the supermarket and you pick up some fruit, you go into a particular wine aisle. And then the way you match, this is the funniest part, is you bump your cart into the other person and that indicates that you have this particular interest or connection. So I,

You can make fun of it all you want, and it is probably the goofiest thing we've ever talked about on this show, but it does seem like it's better than a dating app. We have seen the same sort of signaling in other aspects of lives. I mean, the thing that comes to mind is run clubs.

If you show up to some New York City run clubs wearing black, it means you're single. There's been single parties for generations where there's some way of indicating that you are, in fact, looking for love. So this is just another iteration of that. What was interesting, though, is that some supermarkets weren't really on board with this because you just got all these kind of single people loitering and bumping into each other and not actually buying stuff. But another chain, a German-based chain, said, hey,

hey, come to our supermarket and do this, but use a watermelon instead. So they were trying to jump in on the trend. It remains to be seen, though, if this is actually going to have some staying power or if the upside-down pineapple is better suited for a cake rather than looking for love. But there's no question that dating apps are probably looking at this and saying, hey, maybe we should capitalize because Match and Bumble, the two biggest dating apps in the United States, have lost $40 billion in market value.

since 2021. Meanwhile, attendance at dating and singles events on Eventbrite has increased 42% from 2022 to 2023. So there just is a sea change in how people want to meet each other, whether it's at the grocery store or a run club or just at a classic speed dating event.

Let's wrap it up there. Thanks so much for starting your morning with us and have a wonderful Wednesday. For any feedback, questions, or comments on anything you heard, send an email to morningbrewdaily at morningbrew.com. Then share Morning Brew Daily so more people around you can be informed about what's going on in the business world. Toby, who should our listeners send an NBD link to today? I want you to share it with someone who is shorter than you. Could be your little nephew, could be your boyfriend, could be your girlfriend.

As long as you can see the top of their head, send them this episode. All right. We're going to get a lot of short teams listening to Morning Brew Daily. There's not anyone who's shorter than me, honestly. I'm a little pipsqueak. Let's roll the credits, Emily. Milliron is our executive producer. Raymond Liu is our producer. Olivia Graham is our associate producer.

Uchenua Ogu is our technical director. Billy Menino is on audio. Hair and Makeup is looking for love in the Trader Joe's freezer section. Devin Emery is our chief content officer, and our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow.