Episode 79: McDonald's v KFC v GYG v Chick-fil-A Cage Match, Who Can Call Themselves a Founder, Adir's Deep-dive into AI, Should You Get an EA, Pool Chair Fights and Adam's Favourite Mattress
The guys chat about the economics of fast food, founder requirements, Adir's AI journey, whether you should get an EA, reserving pool chairs at a resort, and Adam shares his favourite mattress.
The Contrarians catchup
Adir lets us in on a secret related to his Executive Assistants: “They don't just work for me. In fact, most of their work is for other people. And therefore, I'm not responsible for anything about their entire employment to the organisation. Nothing is my responsibility. And so I've basically optimised for maximum help, minimum effort in return.”
Adam manages his own calendar, opening up a lecture from Adir about why he’s actually wasting money: “Picture a venn diagram with high-value activities, stuff you excel at, and stuff only you can do well enough. Unless it’s at the intersection of all three, you should not be doing it.”
When Adam says an EA provides a valuable gatekeeping function, Adir responded with: “you’ve gone from completely wrong to half right.”
Adir uses Claude for most AI needs (including fascinating back-and-forth chats), but uses Meta’s Llama when he needs an open-source, model.
Adir: “AI is like the poor guy sitting in the changing room and every human is coming in and saying, ‘does my butt look big in this?’”
Adam asks Adir how he would create a board pack using AI. Listen in for a masterclass response (in fact, the first 30 minutes of Episode 79 are an AI lesson from Adir!).
Who Can Call Themselves a Founder?
Adir said everyone knows Dany Milham is the founder of MILKRUN, but is that true? Dany is also the co-founder of Koala.
In May 2023, several weeks after closure, Woolworths bought MILKRUN, reportedly for $10M. Woolworths merged the customer bases of MILKRUN and Metro60 (Woolworths' competitor to MILKRUN) and rebranded Metro60 to MILKRUN.
But less people know that Woolworths also acquired a smaller company called Jimmy Brings around the same time. Dany Milham has moved on, and the founder of Jimmy Brings now claims to be the founder of MILKRUN.
Adir: “It would be right for them to say, ‘What's your job?’ Founder and also MILKRUN, but the ‘and’ seems to have gone missing in the wash.”
Adam's Favourite Mattress
Adam had an incredible experience purchasing a mattress from Eva, saying the e-commerce experience was as good as he’s ever seen.
Adam: “It came in two days, which is ridiculous. The process was amazing, the unboxing was super easy and I thought, well, maybe the product won’t be that good. The product was unbelievable. I’ve got a Tempur bed, which was like eight grand. This is better than that and it was $1600.”
[Full disclosure: Adir is involved in Eva’s business, whose founders he describes as “very smart and just lovely people”.]
Pool Chair Fights
Adam poses the question: “What are your views on reserving pool chairs in hotels?”
Adir: “I would never go lay next to a pool on a chair. I can't think of any activity I’d want to do less, maybe walking over hot coals.”
Adam references an article in The Wall Street Journal, The Cutthroat Game of Snagging a Pool Chair on Vacation, about travelers waking up at 4am and working in shifts to secure seating in prime locations without getting on the wrong side of the lounge-chair law.
McDonald's v KFC v GYG v Chick-fil-A Cage Match
It’s time to talk about chicken.
Guzman y Gomez stock is up 70% since IPO, Chick-fil-A is the third biggest quick-service restaurant in the US (behind McDonald’s and Starbucks, despite having 3000 locations to their 15-20,000 stores; their stores average US $9M per store), and El Jannah (a cult Lebanese charcoal chicken brand out of Sydney’s west) is doing $300M a year in revenue.
Amazingly, Chick-fil-A’s worst-performing location still brings in more revenue than any other quick-service restaurant, despite famously being closed on Sundays and having the same average order value as KFC.
Adir: “This business is a drive-thru business. It has one place that it built, where it's two stories, it’s only drive-thru. The entire top story is a kitchen.”
Adir: “While the industry is falling 2.9%, Chick-fil-A is growing double digits off the charts. And guess what? Unlike every other quick-service restaurant, no discounts, no coupons, no bargains, like nothing.”
The Ruin of 40
Adam references an article in The Wall Street Journal about the down-side to the rule of 40 (the principle that a software company's combined growth rate and profit margin should exceed 40%)
Adir: “What are you trying to measure with the rule of 40? You're trying to measure, if you're an investor in the business, what are you trading off between being able to have future profitability versus taking money today? And the only way that paying employees in shares affects future profitability is by diluting you.”
Listener question (from our producer, Mike)
How do you manage being a busy person and a successful business person, and a father and a family person as well?
Adir: “I made a very conscious decision when I had kids that I want to try and find a way to make a living that gives me the flexibility to spend lots of time with my kids. And I think it's largely a matter of prioritisation because everything, when you're in business, there's an endless number of things that feel urgent.”
Adir: “The essence of relationships lies in the mundane, and what I mean by that is some people work for four months, five months, and then they say, "I'm going on this holiday with my family, and it's going to be two weeks of uninterrupted time." But I don't think that's where relationships are formed.”
Adam: “I used to go to Sydney for two or three days. I'll almost only ever go for one night now. And I would reject 80% of things, like my overseas trip requests. So I'm actively trying to reduce how much stuff I do there and be around. I think we just want to try and be as present as possible.”
Five other stories worth following:
Did Amazon finally surpass Walmart? When it comes to generating revenue, Walmart has been the undisputed leader, but Amazon’s latest earnings look likely to finally take the crown.
GoFundMe has seen $250M+ donated so far to victims of the Los Angeles fires and relief charities. That’s $20M more than it collected for all natural disasters worldwide last year. The funds came from 1M+ donors across 160 countries.
Japan’s SoftBank plans to invest $40B into OpenAI, which would wildly surpass the $13B Microsoft famously has sunk into the AI firm — and put the “nonprofit” ChatGPT maker’s valuation at ~$300B.
PlayStation Network went down for most of the weekend. At its peak, Downdetector showed nearly 70,000 reports of problems. To make amends, Sony is giving PlayStation Plus members five extra days of service.
China’s counter-tariffs against the US are live, adding 10% to 15% levies on US exports of natural gas, oil, and coal, as well as some automotive parts and farm equipment headed for China. Consumer electronics, furniture, and appliances may soon get more expensive in the US due to the retaliatory tariffs.