Welcome to the Pirate Street Journal. The Wall Street Journal covers companies. We cover categories.

Every other Friday, we go deeper with a Deep Dive Report, calling where the category goes next. Become a Founding Member to get every Deep Dive Report, mini-book, audiobook, and access to the Pirate Eddie and Christopher bots.

Piratey disclaimer: This is NOT financial advice. None of us have Series 63, Series 6 7, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS.

Think of this like professional wrestling. It’s entertainment.

Don’t be so smart you’re stupid and suplex your safety net savings.

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Dear Friend, Subscriber, and Category Pirate,

Anthropic just confidentially filed to go public as soon as Thanksgiving 2026.

They are reportedly seeking a $2 trillion dollar valuation. Is it crazy? Probably not, though the ethos behind Anthropic might be crazier than its economics. Time will tell. Should you invest? Be careful about investing in the first year of an IPO, as we wrote about the SpaceX IPO. And trust us, if Anthropic IPO goes out, we will all be invested in it through index funds whether we want to or not.

But according to Andreesen Horowitz, 98% of US households are not paying for AI.

The reason is simple.

Not enough have seen what is in it for them to pay for it. To make it worse, Dario Amodei, Sam Altman and more cried wolf with weirdly specific and uncorroborated AI doomer predictions. Given the unclear upside and hyperspecific (and ultimately wrong) downside, why would the average consumer sign up?

The truth is the first wave of AI was really the category of Productivity AI.

Specifically, how to make coders exponentially more productive through Claude Code and Codex. It was B2B, not B2C.

Breaking news for big tech: the average consumer doesn’t dream about being more productive.

The business case for paying for AI only really made sense if you were in the business of creating AI software or creating content. OpenAI, Anthropic, SpaceX all massively grew their revenue and valuations. AI hardware companies like Nvidia, Micron, AMD grew their valuations even more explosively.

Thankfully, a 29 year old just kick started the second wave of AI, which is the category of Personal AI.

Personal AI is not about making the average programmer more productive. Personal AI is about making the average consumer richer in 7 specific ways:

• Money

• Time

• Mind

• Fun

• Health

• Relationships

• Protection

We think it could be worth $10K to the average person.

In cold hard cash. In about ten minutes, Personal AI can build you a treasure map showing you where the ten stacks are right now, just waiting for you to pick it up. Which makes paying for AI a no brainer, especially if it means you can make 50x your money on a $200/year subscription.

The Problem with AI is With Most of the People Leading AI

AI is likely the greatest invention in the history of humanity.

But the problem is the first wave of AI leaders are ‘on a spectrum.’ Many are socially awkward. Their IQ to EQ ratios are one sided. This is not to excuse what they say, but provide context for when they say weird stuff.

This also doesn’t explain why so many of AI chatbot logos look the way they do. It’s almost as if Pirates Sean Riley, Ryan Meegan and Jeff Klimkowski were paying the AI logo designers to create demand for Dude Wipes.

This is why SNL had to step in recently to translate for Dario. (The Anthropic leadership scares us like no others. Read this.)

This is also why Jensen is the Prime Minister of AI.

Not because he is super smart and successful. But because he comes across as a regular human. He cleaned toilets at IHOP. He spent years of his childhood in small town Kentucky. He’s been married to his college girlfriend for 41 years. He tells stories about getting so smashed on ‘Somaek’ (a mix of Soju and Korean beer) that he ended up kissing a dude in Samsung’s Supply Chain organization on the lips.

You know, normal stuff normal people do.

The good news is Jensen now has help from Alexandr Wang.

Alexandr Wang is Kickstarting the Personal AI Category

Alexandr might be the most important exec at Meta since Sheryl Sandberg.

That’s a bold statement, since Sandberg helped create $415 billion dollars of market capitalization during her 14 years at Facebook. She’s widely credited as the adult in the room who built the advertising business that throws off hundreds of billions in cash.

Alexandr co-founded Scale AI. At 19. Shortly after dropping out of MIT. At 24, he became the youngest billionaire ever when Scale AI was valued at $7.3 billion. When he was 28, Meta bought 49% of Scale AI. Then Zuckerberg made Alexandr Chief AI Officer of Meta. He assembled a 100 person secretive team and built Muse. One thing Zuck is great at is acquisitions.

By launching Muse, Alexandr added $200 billion in market capitalization for Meta in 15 months of working at Meta.

Meta stock from the Sept 8, 2026 Muse launch to Oct. 5, 2026. Up 21% 📈.

But his writing might be as impressive as his technical skills.

Alexandr posted an article on X, “Why We are Building Muse.”

We urge you to read the article in full below. We bolded our favorite lines.

Most people never say what they want. It’s not because we don’t want. We want fiercely and constantly. It happens in the moments before falling asleep or while daydreaming on the car ride home. We want to spend more time with our families, overcome social anxiety, eat healthier food, open a bakery, build an app, or just find a few more moments of calm in a hectic life. But rarely do we get to even express these dreams, and even more rarely do they ever come true.

When we can’t name our dreams, we mostly can’t reach them. The world is a maze of forms and gatekeepers and schedules and obstacles, and most dreams die by a thousand paper cuts long before they are said aloud. They die in the not-knowing-where-to-start and in the phone calls never made.

Every unrealized want is a quiet tragedy of human potential.

Now imagine every person on earth with a second mind beyond their own. A general manager whose whole job is to find out what you want and make sure it happens. Someone that hears the half-sentence, “I feel like there’s something more I could be doing,” and helps fill in the blanks. This might not be a genie in a bottle, but it can be someone that says, “This is the thing you’ve been dreaming of your whole life. Let’s go get it. Here’s how.” And then builds a plan. Sends the email. Makes the phone call. Finds the funding. Keeps you on schedule. Clears the way and solves all the problems it can until the human part, the wanting and the dreaming, is all that’s left.

Here’s the best part: we have no idea what people will want. The world until now has been shaped by the small number of fanatics who have somehow found a way to make their wants real. But we’ve never seen humanity with every single person’s agency fully switched on. Eight billion people who just need to write their dream down in order to get started making it happen.

So we built Muse to help people build the world they want.

Here’s to wanting. Here’s to dreaming. Here’s to everyone.

The essay is hauntingly emotional and relational. And beautifully and concisely written.

It’s not about GPUs, linear algebra and total addressable markets. It’s not about government regulation. It’s certainly not about a 10% chance of an extinction event for humanity (aka inane garbage put forward by Anthropic & OpenAI because they want government protection from doing their jobs to deliver effective and safe products).

It reads like a person writing to another person.

He writes extensively about the problem. People never say what they want. Every unrealized want is a tragedy of human potential.

His POV is tight, easy to remember and repeat, “So we built Muse to help people build the world they want.”

Not like a robot writing to investors and regulators. Which is exactly like Zuck’s essay about AI from August 10, 2026.

If you want to read Zuck’s whole essay, it’s here.

But this is the tale of the tape.

Let’s go deeper, using the Category Manifesto mini-book.

We scored both Wang and Zuck’s essays against the Category Manifesto’s 8 steps. It turns out the MIT dropout gets an A while the Harvard dropout gets a D.

If you ever needed more proof about the power of languaging, here it is.

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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 Thursday at 7 am PST / 10 am EST. See the news through a different lens. Keep reading in the Deep Dive Reports.

Subscribe now

Dear Friend, Subscriber, and Category Pirate,

Here’s what we covered in this episode:

1. Marketing engineer is a great title. Market cap is the goal.

Marketing engineer is the hot new job title in marketing. LinkedIn listings for it jumped 29% last year, but only 173 people actually started the job in the last 12 months.

Profound, the AI marketing company that coined it, raised $180 million at a $1.8 billion value. It built a job board, a hackathon, and a podcast, all named after the title.

A market engineer designs a brand new category, the way a category designer does. A marketing engineer squeezes more money out of a category that already exists. Get the second one wrong and you engineer yourself, very cleverly, into a fight you cannot win.

Market share is how much of the pie you sell. Market cap is what the whole company is worth. Buy volume with discounts and share goes up while margins, the money you keep, go down.

We have seen this movie:

• Sales engineers. The same title move hit in the early 1990s, right as sales software was born.

• Marketing scientists. Stat models and PhDs, and the big conclusion was “get more distribution and awareness.”

• Figma. Measures agents built, hours saved, and revenue. Show me the incentive, I’ll show you the outcome.

The best marketing team is worth so much that a buyer would pay for the team alone. Engineer that, not the agents.

2. Brands are throwing raves. The smart ones throw them for their best customers.

Spotify and LinkedIn threw a rave in New York for John Summit, a DJ who used to be an accountant, inside a fake office full of cubicles and Post-its. HBO threw one in a Brooklyn warehouse for its show Industry, with caviar on a timer. The Wall Street Journal asked about the ROI and printed zero ROI numbers.

This is plain old event marketing. People want to be with people.

The super of one is the super of nine: a person obsessed with one category is usually obsessed with about nine others. If your Superconsumer, the small group who care the most and spend the most in your category, loves dance music, the rave is the right room.

A party should pay for itself.

• BeatBox Beverages. Party drinks in big group packs for young drinkers. Sold to Anheuser-Busch for $500 million.

• Eddie’s New York launch. One pricey Manhattan room did a press launch, customer training, staff training, and a party. The brand went from $7.5 million to $35 million in about 14 months.

• Anheuser-Busch. Shut down eight blocks of Chicago for 700 wholesalers, the independent companies that decide which beer hits the shelf.

Then film all of it, including the setup. The making-of video often beats the video. The ROI was never missing. The press counted posts instead of customers.

3. Britain’s best-selling car is a Chinese Range Rover look-alike at half the price

The best-selling car in Britain in September was the Jaecoo 7, made by China’s Chery. Brits call it the Temu Range Rover. It runs about $50,000, half the Range Rover it looks like. One London dealer planned to sell 350 in year one. He sold over 500 and will pass 1,200 this year. Three in five of his buyers came out of a BMW, Mercedes, or Range Rover.

Chery spent years as Jaguar Land Rover’s partner in China, building actual Range Rovers.

The category makes the brand. When the category shifts, loyalty becomes a jump ball. If the problem is “I want a Range Rover feel without a Range Rover bill,” the Chinese have the answer.

Old carmakers ran razors and blades: make a little on the car, make most of the money on parts, service, and loans. A newcomer has no blades, so it has to make money on the car itself.

• Tesla. Built the most fun car you can buy and charged a premium to fund the factories.

• Chery. Started cheap and is climbing up into luxury buyers.

• Volvo, MG, and Range Rover. Already owned by companies from China and India.

China’s home market has too many factories and brutal prices, so the cars have to leave the country. For Western carmakers, standing still is an extinction-level event. They have to design the next category.

3 conversations to have about the news with the Pirate Eddie Bot and Pirate Christopher Bot

The bots take this week’s moves and run them against your category. They come with the founding tier and they jam 24/7, including the night before your budget meeting.

• Grade your team on market cap, not activity. Give the bots your marketing team’s goals and make them sort each one: does it move what the company is worth, or just how busy you look? Figma counting AI agents is the warning label.

• Throw the party your best customer would actually show up to. Describe your Superconsumer and have the bots list the nine other things that person is obsessed with, then design one event that does four jobs at once. Eddie’s Manhattan room did press, training, sales, and the party.

• Find the jump ball in your category. Tell the bots what is shifting in your market and ask which customers stop being loyal when it does. Three in five Jaecoo buyers walked out of a luxury badge.

All three stories are the same story. A title, a party, and a badge are labels. The money goes to whoever owns the outcome underneath.

All three stories are the same story. The people who build trust win, and the people who guard it lose it.

Not a founding member yet? You can join here.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

Arrrrr! 🏴‍☠️ Welcome to a 🔒 founders-only edition 🔒 of Category Pirates. Each week, we share radically different ideas to help you design new and different categories. Founding subscribers can access the entire archive of 200+ mini-books and audiobooks. If you’re not a paid subscriber, hop aboard!

Subscribe now

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Welcome to Category Pirates. Each week, paid subscribers get one radically different framework for turning what you already know into a category you own, instead of a market you fight over. Sign up for a Founding subscription to ask the Pirate Eddie and Christopher Bot your category design questions and get complimentary digital copies of all 7 of our big books.

Subscribe now

Dear Friend, Subscriber, and Category Pirate,

The legendary founder of Interview Valet, Tom Schwab joins us as a co-author for this mini-book, Part 3 of our Podcast Category Design Series (Part 1 and Part 2 are here.)

He’s helped over 1,500 clients book 75,000 appearances on Podcasts. Interview Valet is the Category King of podcast booking. Folks like the CEOs of super ding-dong consulting firms reach out to Interview Valet, just like Pirates Christopher and Eddie did for Play Bigger and Superconsumers respectively.

Pirate Tom has seen some amazing guests crush it on great podcasts.

And he’s seen some crash and burn. But it’s not really a loud disaster as it is a quiet whimper. When a legendary thought leader is lame on a podcast, they go quietly into the night.

They become forgettable.

Pirate Christopher knows this well, as the host of two top 0.5% podcasts in the world. He’s seen his share of fabulous to forgettable guests. He is sometimes called “one of the Godfathers of Category Design.” A guest on his podcast once asked him, “So, how did you get into design?” Christopher and every listener knew exactly how much homework she had done (none). The guest was smart, accomplished and had important POVs to share.

And the lack of preparation made the guest a donkey.

🔊 Want to listen to this mini-book instead? Head to the audiobook.

Listen to the Audiobook

Media training is smart. Knowing your talking points is smart. Having a sharp sound bite ready is smart.

It doesn’t make you legendary.

The lack of prep makes you look at best flaky and at worst fake. The podcast’s superconsumers stop listening. No word of mouth happens so downloads stay low. And when the guest wants to come back in the future, the host says, “Who? I don’t remember that guest. No thank you.”

Pirate Christopher would not have that guest back on.

The truth is, long-form is a lie detector.

Are you happy to be on the show? Nope. Do you want to help the listeners with your wisdom? Or do you just want to sell your book and move on?

Anyone can fake a performance for a short TV segment.

Nobody can fake one for an hour. Somewhere in a long conversation, the talking points run out. And the real person shows up.

You can see it in Bill Maher’s work.

Real Time on HBO is highly produced. Practiced. Scripted. Edited. Time constrained. His podcast, Club Random, is loose, easy, and conversational. Both can be entertaining. Both can be informative.

But one is a manipulation and the other feels real.

That’s why podcasts are the last medium for authentic dialogue. So the question isn’t whether the audience will meet the real you. They will.

The question is whether the real you is worth meeting.

If you have, are going to or want to guest on a Podcast, this is a must read for you.

There are seven types of Donkeys you don’t want to be as a podcast guest. So we created the three things you must do before and the three things to do after a podcast to not be a donkey. And we end with an AI diagnostic you can use with the Pirate Christopher, Eddie AND Pirate Tom Schwab bot (never before offered in a special founding tier offer launching Monday) to build a feedback loop for your podcast appearances to help you be legendary and the talk of the town.

The Pirate Eddie and Christopher bot you can buy anytime for $375/year.

The Pirate Tom Schwab bot has never been available for sale. Tom may not decide to offer it again after that. But for a limited time only, you can buy a super ding dong bundle of the Category Pirates Founding Tier plus the Pirate Tom Schwab bot for $500/year. Keep an eye on your inbox Monday.

If you’re already a Category Pirates Founding member and want the Tom Schwab bot, ping us and we’ll make it available for you to buy.

The Seven Donkeys of Podcast Guests

If you’re a Podcast superconsumer, each of these types of Podcast Guests will be familiar.

Most of the time, this person in normal, real life situations is nothing like this. This is who they become when the recording starts. Sometimes this is because of the wrong media training. Or the guest can be nervous.

But sometimes the root cause is far more fundamental.

Some guests have never been told the truth. That you’re boring, confusing or not funny. Sometimes the guest can’t read the room and pick up on feedback.

These folks can fix the issue by just listening to your podcast after the fact.

Some guests don’t want to be there. They think the podcast is beneath them. They just want to sell books or promote their product. So they don’t prepare and do the bare minimum.

It’s really hard to convert mercenaries into missionaries.

This is why we’re sharing the seven donkeys of podcast guests. Because someone needs to tell you the truth. So we hope you hear this with love, as our goal is to help not hurt.

1. The Tin Can. This person has terrific ideas and terrible audio. Do the Pepsi challenge and listen to what audio sounds like with a great setup and listen to it with a lame one. This takes five minutes and you have to hear it to get it. Poor quality is one of the fastest ways to lose an audience, no matter how good the ideas are.

2. The Tourist. This guest shows up without doing the homework and wastes time asking for directions. Doesn’t know the host, the show, or the audience. Ask one lame question and you’ll lose half your audience. Ask two, and you won’t get asked back.

3. The Robot. This guest is PR/HR/Legal person’s dream and every podcast hosts’ nightmare. Every answer has to be approved. Every edge sanded off. This person is technically fine and instantly forgettable. If the listener closes their eyes, you can almost see the lawyer’s hand up their butt, moving their mouth.

4. The Fortune Cookie. This guest is mostly content-free-content. They drop one saccharine saying after another, as if they are playing obvious quote bingo. Their answers are an inch deep and a mile wide, all sizzle and no steak, and if you call them on it they simply smile and tell you Rome wasn’t built in a day, so you have to take it one day at a time. Are you asleep yet?

5. The Bloviator. This person is all feelings, no facts. They parrot a position, then build on it with adjectives, analogies and aphorisms that are the empty calorie diet of Doritos, drive through at McDonalds and a dozen donuts. If you probe them, they double down on bluster. A smart host will slice their POV to shreds, generating the wrong kind of word of mouth.

6. The Brochure. These are folks who don’t understand that the more you sell, the more you suck as a guest. They name drop their book, company or product/service as if they were playing a drinking game. They are masters at judo flipping every question into a chance to pitch their offer.

7. The Ghost. These are guests who forget that there is more work to be done post podcast. They have to share the episode and summarize it. They should slice and dice the episodes into shareable bites that go across LinkedIn, YouTube, X and Substack Notes. They have to get into the comments and engage. They should re-listen to the episode to improve for the next time.

How to Flip the Script and Be a Legendary Guest

For every Joker, you have a Batman.

If you want to be legendary, take each of the Donkeys and do a 180 turn and you’ll find what an amazing podcast guest looks like. Here are each of the 7 podcast guest heroes, not zeros.

1. The Audiophile (vs. the Tin Can). You don’t have to spend a fortune to get a quality microphone, so your voice sounds as smooth and rich as it is in real life. You want it to feel like you’re sitting in the same room. Keep the microphone so close it’s like you’re kissing it. Wear headphones so there is no echo.

2. The Co-Host (vs. the Tourist). Aim to know the host, the show, and what the audience already knows so well, you could actually host it in an emergency. Homework is a form of respect. Listen to one of their top episodes. Hosts notice. So do listeners.

3. The Human (the Robot). Show up as a real person, not a press release. Most guests on Pirate Christopher’s pod loosen up around the 20-30 minute mark. Don’t be afraid of a bit of chit-chat at the outset so you build some warmth and shared connections and experiences. People want to eavesdrop on a conversation.

4. The Delightfully Different (vs. the Fortune Cookie). To be a thought leader, you can’t regurgitate the same thoughts. But the bar is not as high as creating a new element on the periodic table. Take an old solution and apply it to a new, non-obvious problem. Take an obvious POV and niche-down. Lean into your different, to make a massive difference for others.

5. The Curious Connector (vs. the Bloviator). You are there to provide your POV, but it doesn’t mean you can’t ask good questions yourself. Take your talking points that you’ve said a thousand times, and apply it to a specific part of the host’s audience. Connect your ideas with the hosts. There’s a reason why chocolate and peanut butter is the #1 chocolate in the US.

6. The Builder (vs. the Brochure). Do the No-Sell-Sell several times before you even consider pitching your wares. The host sells your book in the intro, when they tell listeners who you are and why they should care. Your job is to share your insights, wit, wisdom, and stories in a way that’s conversational and, dare we say, fun. The audience builds trust. Trust sells the book.

7. The Amplifier (vs. the Ghost). Be the guest that is more famous for what you did after the podcast than during it. Be generous with your audience and share it on social media. Amplify another episode that the host did, and connect it back to yours. Be radically generous, and be prepared to be surprised at how much more generosity comes back to you.

Aim to be one of these Unicorns, not a Donkey!

Five Crucial Questions to Answer Before You Podcast

Most podcast guests try to fix a bad interview by booking more interviews.

Pirate Tom Schwab has a Navy phrase for this: doubling down on stupid. He has done more than 500 interviews himself. When an activity isn’t working, doing twice as much of it gets you to the wrong place faster.

The good news is five questions will help you improve exponentially as a podcast guest.

Read more

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 Thursday at 7 am PST / 10 am EST. See the news through a different lens. Keep reading in the Deep Dive Reports.

Subscribe now

Dear Friend, Subscriber, and Category Pirate,

Here’s what we covered in this episode:

1. Amazon is guarding the customer. Meta is growing the pie.

Meta’s AI agent, Muse, launched September 8 and hit 3.4 million downloads. Twelve days later, Amazon blocked it from buying anything on Amazon. The next day, Shopify opened checkout to Muse on every Shopify store. Walmart, Sephora, Best Buy and Gap signed on too.

Amazon’s ad business brings in about $20 billion a quarter. That is more than $200 million a day, mostly from sponsored listings you scroll past. An agent never scrolls.

When a new category shows up, the winner makes the whole market bigger instead of guarding its slice. Agents will make people buy more, so Amazon’s share can shrink while its sales still grow.

The market already voted, in the days right after:

• Shopify. Said yes. Worth $25 billion more.

• Amazon. Said no. Worth $82 billion less.

• Meta. Built the thing. Worth $146 billion more.

Meta still has a trust problem. Only 8% of people would trust Meta with their passwords. Google gets 30%. The future of buying is agent to agent.

2. Jensen Huang answered AI doom with a product

On September 12, Anthropic’s Dario Amodei asked Washington to slow AI down. Sam Altman and Elon Musk agreed. On Monday, Jensen Huang shipped Nvidia’s Open Agent Safety Platform instead, with more than 100 launch partners. Microsoft, JPMorgan and Anthropic all signed on. OpenAI did not.

The platform puts every AI agent in a sandbox, a locked box with rules it can’t rewrite. A watchdog built into the chip can shut down a rogue agent in milliseconds.

Protect people from technology with more technology. We never secured the internet or the PC with new laws first. We used better tech. A company that says its product might end humanity, then keeps selling it, wants protection more than safety.

Safety done right looks like this:

• James Burke. Pulled every Tylenol bottle in 1982 after seven poisoning deaths. Market share fell from 35% to 7%, then came all the way back within a year.

• Tesla Full Self-Driving. Stop watching the road and it beeps, then pulls over and parks itself.

• Airline autopilot. The plane flies the plane. The pilot makes sure it doesn’t mess up.

The rogue agent that hacked Hugging Face this summer was not a machine waking up. It was a bug.

3. One in ten Americans has cut off a parent or a child

More than 200 parents packed a Chicago conference this summer, and every one has an adult child who stopped talking to them. About 10% of Americans are cut off from a parent or child right now. That is roughly 34 million people. TikTok saw 138,000 new “no contact” videos last month, about 4,600 a day.

Real abuse is different. Walking away from it is the right call, and it costs everyone. Everything else is hard family conflict, and that is worth working through.

Relationship capital, the trust you build by showing up. Family is one of the richest sources of it you will ever have. Cut it off fast and it is very hard to rebuild.

Follow the money. Much of the loudest advice comes from people who sell to one side of the split, and the hard data is thin.

If you cut off your parents, your kids are watching, and you are teaching them how to treat you.

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. They come with the founding tier and they jam 24/7, including 3am when you are the only one still thinking about this.

• Find the pie you could grow. Give the bots the one thing you guard hardest, your customer list, your channel, your margin, and make them show you how a bigger market would pay you more. Shopify said yes and gained $25 billion.

• Build the safety into the product. Hand them the biggest risk your buyers worry about, then have them design the feature that answers it before anyone asks you to slow down. Jensen shipped the fence while everyone else asked for laws.

• Count your relationship capital. Feed them your ten most important relationships, work or family, and ask where you have stopped showing up. Most splits start small.

All three stories are the same story. The people who build trust win, and the people who guard it lose it.

Not a founding member yet? You can join here.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

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. Keep reading in the Deep Dive Reports.

Subscribe now

Dear Friend, Subscriber, and Category Pirate,

Here’s what we covered in this episode:

1. Jersey Mike's built the best customer base in dining. Gen Z is 2% of it.

Jersey Mike’s is worth about $7.5 billion after 20 straight years of same store sales growth and $4.3 billion in sales. About 70% of its customers are Gen X or boomers. Gen Z is 2%. Wall Street is paying about 20 times earnings, a premium to McDonald’s and Wingstop, for a plan to go from 3,300 stores to 15,000. Blackstone put $1.8 billion of debt on the company first, some of it to pay Blackstone. That debt is why 15,000 is the number.

The new CEO is moving money into TikTok. Jersey Mike’s spent about 1% of marketing on social last year while peers spent 10 to 25%. The 2% measures word of mouth, who gets named when somebody says let’s go eat. Gen Z says Chipotle, then something else. Jersey Mike’s is not on the list.

The move is to frame, name, and claim a new kind of sub, which means naming a problem nobody has named yet and owning it. A banh mi sub. A Mexican sub. Something a 22 year old texts a friend about.

• Sushirrito. A million burrito places. One of them put sushi in it.

• Jimmy John’s. Never claimed best. Claimed freaky fast.

• Subway. Chased young and cheap with discounts, does about $500,000 a store, and is shrinking.

The unit economics already work. About $575,000 opens a Jersey Mike’s and the average store does $1.37 million a year. Gen Z is the first American cohort to put business formation ahead of family formation. Sell them the franchise, not the sandwich.

2. San Francisco's $1.2 billion mall forgot what business it was in

San Francisco Center did more than $1,000 a square foot before COVID and was valued at $1.2 billion a decade ago. It hit 93% vacancy, closed this year, and two buyers agreed to $130 million before walking away in July. Lenders are owed $558 million. Brokers say $130 million is the ceiling, a dime on the dollar, in a year when mall prices nationwide are up 13%.

California spent $24 billion on homelessness and homelessness went up. Ten million people have left in a decade. In-N-Out is no longer a California company.

Retail paid the bills, but the mall lived in the socialization category, the business of giving people somewhere to be together with no agenda. You met friends there and shot the sh*t an hour between the movie and dinner. Amazon took the retail. Nothing took the hanging out.

The experience makes the place.

3. Gen Z's favorite retirement formula has a bad word in it

Google searches for Coast FI are up 50% from last year, and a TIAA survey found 15% of Americans are actively going for it. Pick your retirement number and work backward with compound interest. Want $1.8 million at 65 at 7% returns? At 35 you need about $240,000. Hit it, stop saving, let it ride. One woman banked most of every paycheck living with her parents, had a million by 27, and quit a six figure software job.

Gen Z’s confidence in retiring comfortably at a normal age fell from 77% to 64% in a single year.

This is a languaging problem. The FI part is worth chasing. The coasting part is not. Call it runway and the whole thing changes shape. Five years to find your different, not fifty years of nothing.

Social Security’s trust fund runs dry around 2031. Nobody in Washington cuts it, so the money gets printed, and printed money is worth less.

The Creator Capitalist move is getting paid to be you, for the thing you are different at. Quitting a job you hate at 30 is the right call. Buying fifty years of nothing with it is the wrong one.

3 conversations to have about the news with the Pirate Eddie Bot and Pirate Christopher Bot

The bots take this week’s moves and run them against your category. They come with the founding membership and they jam 24/7.

• Name what you are actually selling. Ask the bots what category your customer thinks you are in, then what you would have to become for them to text a friend about you.

• Find the category under the revenue. Ask the bots what job you really do once you strip out the part that pays the bills. The mall sold retail and ran on hanging out.

• Check your languaging. Ask the bots to grade the words on your goal. Coast and runway are the same math and two completely different lives.

Not a founding member yet? You can join here.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

P.S. - Every story this week came down to the same move: find the problem before you go shopping for a solution.

The Category Design Academy is where you do that at the category level. You name the problem only you can name, then design the category around it, so you stop competing on terms somebody else set.

The next cohort starts in October. Apply now to save your seat before applications close on September 30th.

👉 Learn more about the Category Design Academy here.

Welcome to the Pirate Street Journal. The Wall Street Journal covers companies. We cover categories.

Every other Friday, we go deeper with a Deep Dive Report, calling where the category goes next. Become a Founding Member to get every Deep Dive Report, mini-book, audiobook, and access to the Pirate Eddie and Christopher bots.

Piratey disclaimer: This is NOT financial advice. None of us have Series 63, Series 6 7, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS.

Think of this like professional wrestling. It’s entertainment.

Don’t be so smart you’re stupid and suplex your safety net savings.

Subscribe now

Dear Friend, Subscriber, and Category Pirate,

Pirate Eddie is halfway through his fourth decade of living in Chicago.

He never imagined he’d stay. He moved in 1992 for college. Most of his friends went to the west or east coast. Over half his childhood friends have moved back to Hawaii.

Is he tired of the cold and snow? Yes. But he’s increasingly grateful for the cost of living advantage of the midwest. Could he have semi-retired and gone solo at the age of 43 had he not been living in the lower cost midwest?

Maybe, maybe not.

The upper bounds of income were higher on the coasts, but taxes and property values would have also been much higher. One of his clients at Kraft moved from Chicago to Boston and was shocked that housing was nearly twice as much for half the house.

Pirate Eddie wasn’t being a smarty pants in choosing where to live.

He came to Chicago for college and the most financial aid. He found his friends and career, fell in love and built a family. The lower cost of living was serendipity, not strategic.

But the proposed California billionaire tax is giving every Pirate on the Pirate Ship a chance to see the future and make a strategic choice to build your Financial Capital.

Billionaires are already leaving.

California’s loss is your gain. More importantly, much of their money and investments have already left to friendly states. Companies, careers and jobs follow the money.

It doesn’t matter if you’re a billionaire, millionaire or just living on a prayer.

Zebra hole: For you young Pirates, the 80’s were real. Rockstars had perms. And Glam Metal was a real category of music.

Anyone can profit off of this. You have to anticipate the ripple effects. You have to see the non-obvious opportunities.

The Super-Geos of tomorrow are being created.

But it’s not the obvious places the Billionaires are moving. Austin, Miami and Nashville are all great. But housing has already moved up a ton. We’re talking about the non-obvious places to move to.

Don’t follow the Billionaires, follow their money.

If you are willing to move, you can get in on the ground floor of an up and coming city where cost of living is low, but incoming capital means jobs, incomes, property values are all going up.

If you choose wisely, keep your ‘pay for the party’ costs low and save smartly, you can stack $100K+ in Financial Capital in 5 years.

We even built a tool that does the math for you.

It’s called the Pirate Tax Map. Plug in your household income, filing status and number of kids, and it shows your take-home pay in all 50 states plus DC. Then the Move Calculator runs a five-year what-if between where you live now and where you’re thinking about moving or investing and whether you rent or buy.

Pirate Eddie ran his own numbers in the video below. On $100,000 of income, he takes home $76,720 in Illinois. Pirate Bri, up in Alaska, would take home about $5,000 more on the same paycheck, because Alaska has no state income tax. (Pirate Eddie would like the record to show that Pirate Bri is smarter than he is.)

Then he ran a move from Chicago to Huntsville, Alabama, buying the median home in each city. The gap over five years came to about $50,000. If you invest that difference, it clears $100,000.

The Pirate Tax Map is for Founding Members, and the link is in the Pirate Tax Calculator section further down. If you’re not a Founding Member yet, join now and get access to run your own numbers.

Become a Founding Member

TL/DR on the California Billionaire Tax

This is something Pirate Christopher has written and podcasted about in depth.

He wrote extensively about this in his Substack, Different. Everyone who wants a R-rated Pirate Christopher with even zanier Zebra holes should sign up for this. He also podcasted about this with Hoover Institute’s Ben Jarro, PhD here.

Here’s the top three takeaways from both!

1. This is a new category of tax

This is America’s first proposed asset/wealth tax of its kind.

It functions similarly to a home ownership property tax. When you buy a home, you pay an annual property tax on the assessed value of your home. The national average property tax is 1%, so if you own a $300,000 home, you pay $3,000 per year in property tax to the local city. Much of the property tax goes to fund local schools and local improvements. So most home owners feel better about a property tax, which is reinvested locally.

The California Billionaire tax is on other things you own, like your stocks and ownership in public and private companies.

The problem is public stocks have trillions of trades per year, giving it ample data to calculate the value of a stock. Homes have 4-5 million transactions per year, giving it a decent amount of data to value the home.

A private company has at best a few hundred transactions per year.

This makes it way harder to precisely value. Imagine the government created a cholesterol tax. The higher your cholesterol, the higher the tax since heart attacks make the entire healthcare system more expensive. But it’s been years since you had your blood drawn. So someone just eyes you up and down and guesses and then assesses you a tax.

This is why the California Billionaire tax is incredibly hard to calculate accurately.

2. 5% wealth tax is the same as 52.5% income tax

A one percent wealth tax would be equivalent to a seventeen and a half percent capital income tax rate.

A 5% wealth tax would be equivalent to a 52.5% capital income tax rate. That is higher than any single federal tax rate. This is pushing the limits when people start to wonder if the juice is worth the squeeze for entrepreneurship.

3. The estimated tax revenue is already dropping like a rock

The bill hasn’t even passed, and yet the estimated tax revenue is already dropping.

Six guys have already removed an estimated $536 billion from California’s tax base. Nearly 30% of the entire proposed tax base. California’s own Legislative Analyst’s Office concluded this new tax would cause an “ongoing decrease in state income tax revenues of hundreds of millions of dollars or more per year.” In over 71% of their simulations, California ends up poorer.”

You know who is good at math?

The billionaires. Followed by the accountants and attorneys who advise them. You know who is the worst at math? Politicians.

If a Wealth Tax Works, Why Did Most of Europe Repeal Them?

European countries love taxing their citizens.

The OECD (Organization for Economic Cooperation and Development) measures total tax collected as a percent of the economy. The top 8 countries are all European. Denmark is the highest at 45.2%, France is 2nd at 43.5%, Austria at 43.4%.

The US is near the bottom, ranking 32nd out of 38 countries at 25.2%.

Europe’s top income tax rates are north of 55%. Denmark is at 60.5%, France 55.4% and Austria at 55%. They also tax spending, known as the VAT.

So it makes sense that Europe would love a wealth tax.

So as Ben Jarro points out, why did most of them repeal it?

Money is mobile. Wealth tax doesn’t work if Billionaires can move on a dime.

Taxes are the ultimate FAFO experiment, aka the Laffer Curve.

Arthur Laffer is one of the most influential economists in modern times.

He got his PhD in Economics from Stanford and was one of the youngest tenured professors at the University of Chicago. He has been a sought after advisor to the President from Reagan to Trump.

He’s most famous for the “Laffer Curve”, which is a parabola that tries to predict the tax rate at which government tax revenue is maximized.

Everyone agrees on the far left, that if the tax rate is 0%, the government collects no taxes. Everyone agrees on the far right, that if the tax rate is 100%, then no one works and the government collects no taxes.

The fight is where the peak of the parabola is.

The black line is the income tax Laffer curve, where the US average top income tax rate is 42.1% and the highest example we have is 50%. The pink line is the capital gains Laffer curve on the sale of investments, where the US average is 23.8% and the highest example we have is 37%.

Ever wonder why Billionaires pay so little in income tax percent?

It’s because the peak of the pink parabola is at a much lower tax rate than the black. Meaning a billionaire would much rather get his or her income in capital gains than in income.

This is why tax rates are the ultimate FAFO (f around and find out) experiment.

When some politicians say tax the rich more, it doesn’t necessarily mean tax revenue will go up. In the UK, the top rate went from 40% to 50% on incomes over £150,000. They thought it would raise £2.7 billion a year, but in reality it raised only £0.6 billion. Parliament cut it back to 45% 3 years later.

If some politicians say we should lower taxes and it will raise tax revenue, they don’t know if it is right either.

The truth is the peak likely moves and is likely context specific. California and New York City can have high tax rates because people want to live and stay there. And until recently, you had to be there to be part of the action and all the upside. New York City was the center of finance, until broadband and technology meant a high frequency hedge fund could be anywhere. Silicon Valley was where everything was happening, until top tier VCs decided Austin and private jet was fine.

Don’t trust anyone who says they can predict the future precisely when it comes to taxes.

But three non-obvious ripple effects are evergreen. They are universally true. And anyone can use them to predict the future to stack real money.

#1 Higher Taxes, Lower Values.

Read more

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. Keep reading in the Deep Dive Reports.

Subscribe now

Dear Friend, Subscriber, and Category Pirate,

Here’s what we covered in this episode:

1. A $499 toothbrush in a category that gives them away free

James Dyson spent six years building a $499 toothbrush. When the Wall Street Journal asked how big the market is, he said he had no idea, and no idea how many he would sell. It runs $100 above the top Sonicare or Oral-B. A camera in the head takes 28 pictures a second, finds the gaps between your teeth, and shoots mouthwash in to floss them.

Only 30% of American adults floss every day. A third never do.

Dyson is aiming at the Superconsumer. In oral care, they own the manual brush, the power brush, the floss, and the water pick. They believe in whole mouth health, the idea that a clean mouth protects your heart and not just your breath. To that buyer, $499 buys a heart.

• Crest SpinBrush. P&G put a battery in a kids’ toothbrush and sold millions, while Gillette owned the number one power brush and the number one battery.

• Oral-B. Charged $7 for a battery brush you throw out in three months, where the dentist hands you one free.

• Evian. Sold water in a bottle, after everyone asked who pays for something they get free.

Dyson owns 100% of a company that did $8.3 billion last year, and he built more than 5,000 vacuum prototypes before one worked. We’re predicting that in ten years Dyson will take a disproportionate slice of the dental category’s profit, then sell the data to health care.

2. The stock fell while the miles tripled

Tesla launched the Cybercab with no live stream. The stock fell 5.9% the next day, and federal safety regulators opened an audit into how Tesla self-certified a car with no steering wheel and no pedals. Regulators count about 1,000 Cybercabs built. Only 45 are registered in Texas.

The operating numbers went the other way. Unsupervised robotaxi miles went from about 380,000 in July to more than a million. Driverless Teslas in Austin went from 54 in late June to 128.

Pirate Eddie ran it through the magic triangle, the three parts that have to line up: product, company, category.

• Product. Two seats, because 90% of cab and rideshare trips carry two people or fewer. No wheel, no pedals, no mirrors, no brake fluid. It cuts the psychic price too, what a ride costs you in energy instead of dollars.

• Company. Unboxed manufacturing builds parts in parallel and snaps the car together like LEGO. Toyota, best in class, finishes a car every 30 to 60 seconds. The Cybercab line takes 10, and Tesla thinks it gets to 5.

• Category. Cleaning stations, wireless charging, Starlink in the back seat, and fleet owners who buy the cars.

That last one is capital raising design, building the category so other people fund it. EV companies die when they run out of cash before volume brings the cost down. Tesla opened applications for customers to run their own fleets, on a car it says will eventually sell under $30,000, and tens of thousands applied.

One person cares about your future when you do it all. Tens of thousands care when they own the cars.

3. A group chat did what an agent could not

The average starting kicker or punter in a Power 4 conference makes $225,000 this season. Specialist pay is up about 61%, the second biggest jump of any position in the sport, and the top paid kicker in the country makes $600,000. Most of these guys have known each other since they were 15, from the same kicking camps. Now they trade exact pay numbers in a group chat.

One kicker got offered $40,000. He told the school what a kicker at another program was getting, pointed at his better stats, and signed for $225,000. No agent.

This is the value of your value, what your work is worth to the people paying for it. Almost everybody underprices it, including very successful people with insane track records. The kickers reframed the job, named the market, and claimed the price. This is relationship capital, the trust you build by showing up, turning into money. They trusted each other enough to say the number out loud.

• Consulting, law, and banking. Everyone inside knows what the next level pays.

• Public companies. The proxy statement lists the five highest paid people, salary, bonus, and stock.

• Orthodontists. Top five best paid doctors, three days a week, no weekend emergencies. Nobody tells an 18 year old that.

Last Saturday a Western Michigan kicker scored all 12 of his team’s points and came a Hail Mary short of beating number 16 Michigan. The job with the least status on the field now has the clearest price in the sport.

3 conversations to have about the news with the Pirate Eddie Bot and Pirate Christopher Bot

The bots take this week’s moves and run them against your category. They come with the founding tier and they jam 24/7.

• Find your Superconsumer before you size your market. Ask the bots who in your category cares the most and spends the most, and what they believe. Dyson never needed a market size. He needed whole mouth health.

• Run your magic triangle. Ask the bots to pressure test your product, your company, and your category as one system. The Cybercab is cheap because the factory and the fleet were designed at the same time.

• Price the value of your value. Give the bots your last three deals and ask what the work was worth to the buyer. A group chat of kickers went from $40,000 to $225,000 with no agent.

All three stories are the same story. Somebody set the price before anyone gave them permission to.

Not a founding member yet? You can join here.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

P.S. - Every story this week came down to the same move: find the problem before you go shopping for a solution.

The Category Design Academy is where you do that at the category level. You name the problem only you can name, then design the category around it, so you stop competing on terms somebody else set.

The next cohort starts in October. Apply now to save your seat before it sells out.

👉 Learn more about the Category Design Academy here.

Welcome to the Pirate Street Journal. The Wall Street Journal covers companies. We cover categories.

Every Tuesday, we pick three headlines worth paying attention to and break down the category underneath. Every other Friday, we go deeper with a Deep Dive Report, calling where the category goes next. Become a Founding Member to get every Deep Dive Report, mini-book, audiobook, and access to the Pirate Eddie and Christopher bots.

Piratey disclaimer: This is NOT financial advice. None of us have Series 63, Series 6 7, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS. Think of this like professional wrestling. It’s entertainment.Don’t be so smart you’re stupid and suplex your safety net savings.

Subscribe now

Dear Friend, Subscriber, and Category Pirate,

“If we ever get married, don’t forget…DNR.”

Do Not Resuscitate.

This was something Pirate Eddie’s wife said to him on one of their early dates. His wife was working at the University of Chicago Hospitals as an ICU and Oncology nurse. She saw the dark side of families dealing with the worst decision ever.

Do we keep our loved one on life support or not?

She saw patients who would never recover being kept alive. Patients who barely resembled the wonderful human they used to be, being kept alive for conversations they can’t have. Conversations that should have happened years prior. All of this end of life pain and suffering cost families hundreds of thousands of dollars they did not have. Pirate Eddie’s wife was watching family after family go through this and wanted it to be clear what her personal wishes were, if she was ever in that situation.

It was a dark way to start dating.

But they have been married for 25 years and counting. And she did say, “Do make sure there is no chance I can recover.”

This was the first time Pirate Eddie realized how healthcare costs and retirement were inextricably linked.

Most retirement savings marketing showcases sandy beaches and shuffleboard. But the data says that 12% to 29% of all retirement dollars goes towards healthcare costs.

Health Savings Accounts (HSA) have total assets that add up to just 0.35% of all retirement savings assets.

This makes no sense given that HSAs are by far the superior tax deferred vehicle.

Twice as many tax benefits as a 401K, Roth IRA or 529 college savings account. You can save and use it immediately, not decades later. And saving enough to cover your healthcare costs for life is way more achievable for the average person compared to actually saving enough for retirement or college.

What are HSAs?

That is something Pirate Eddie couldn’t embarrassingly answer until just a few years ago.

HSAs are a way to save pre-tax money into an account that you can use exclusively for healthcare costs. You can invest it in the HSA and it grows tax deferred. You can use it anytime to pay for out of pocket healthcare expenses.

Pirate Eddie just bought an 8 Sleep at Pirate Cole’s recommendation.

Pirate Eddie was trying to improve his sleep. And Pirate Cole loved how 8 Sleep would lower the temperature of his bed right before sleep and adjust it through the night. 8 Sleep has a list price of $3,000. Pirate Eddie used his HSA to pay for it. So instead of paying for it with $3,000 of after tax dollars, he paid for it with $3,000 of pre-tax dollars.

He basically bought the 8 Sleep for nearly half off.

Say you make $83,000 per year, the average US household income. In 2026, you can set aside $4,400 in pre-tax dollars for an individual or $8,750 for a family. At that income the federal tax rate is 22%. You would owe $968 in federal tax on $4,400 of income. But if you put $4,400 into a HSA, you can use that $968 to spend on out of pocket healthcare expenses instead of giving the US government $968.

That’s not all the tax savings.

Shaq got his first million dollar paycheck after signing with the Orlando Magic. He looked closer at the taxes withheld from his check and said, “Yep, I did this. Yo, who the hell is FICA? I don’t know nobody named FICA and I didn’t give FICA no money.” Shaq was pissed.

FICA is the Federal Insurance Contribution Act, which funds social security and medicare. It is a straight 7.65% off your paycheck, and your employer pays another 7.65%

If you have a HSA with your employer, not only does your HSA contribution dodge FICA, your employer does too!

Secret #1: HSAs Have Twice As Many Tax Breaks

Pirate Eddie was embarrassed he didn’t use his HSA until his 40’s.

Because it is so far superior to every other tax deferred account like 401K, IRAs, Roth IRAs and 529s. It has double the tax breaks of every other tax deferred account. You get a triple crown of tax breaks immediately when you put money in (Federal, State and FICA). If you invest it, it grows tax deferred like all the other accounts. And you don’t pay federal, state or capital gains when you use the money on the way out.

Here’s an example using a $1,000 of pre-tax income as an example so you can compare across different tax-deferred vehicles.

Read more

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. Keep reading in the Deep Dive Reports.

Subscribe now

Dear Friend, Subscriber, and Category Pirate,

Here’s what we covered in this episode:

1. Apple is seven years late to a shrinking category and takes 44% of the money

Apple’s first folding phone, the iPhone Duo, starts at $1,999 and ships October 23. Samsung has sold folding phones since 2019 and the category is going backwards, with shipments down 15% in the first half of this year. IDC still expects Apple to take 44% of every dollar spent on folding phones in 2026.

Memory chips cost five times what they did last fall, so every iPhone went up $100 and there is no base model this year.

That is price anchoring, where the first price you see decides what every other price feels like. How do you sell a $10,000 watch? Put it next to a $100,000 one. A $100 bump is nothing next to a $2,000 phone. Superconsumers, the people who care most and spend most, hate the water torture of small increases for the same old thing. They will pay a big jump for a different outcome.

Christensen said incumbents get eaten from below, so fight back cheap. Look how that goes:

• United and Delta. Both built cheap airlines, TED and Song, to fight low fare rivals on price. Both gone.

• Apple. Charged $500 for a phone carriers gave away free, and took the smartphone mainstream.

• Corning. 175 years old, invented Gorilla Glass before anyone had a use for it, up 92% this year. A folding phone is twice the glass.

Apple is almost never first to create a category. It is first to cement one, and it does it by charging more.

2. Salesforce’s asset was never the software

Salesforce beat and raised. ServiceNow beat. Workday and Snowflake came in strong, and Salesforce jumped 22% in a single day on a deal to plug Anthropic’s Claude into its products. The stock still trades at 16 times earnings against a ten year average of 43.

Earlier this year investors decided AI coding tools meant nobody would pay for business software again. Salesforce fell about 30%. The internet called it the SaaSpocalypse.

What the incumbents own is the context layer, the meaning you wrap around data so the machine knows what it is looking at. AI slop is what you get without one. Salesforce sits on 25 to 40 years of intellectual capital, everything it learned about how customers really work. The code was never the asset.

3. Nike took the word category off its own org chart

Nike was worth more than $260 billion in November 2021. It is worth about $57 billion today, a 78% drop, and this month it leaves the S&P 100 after almost 18 years. Four tech companies take its seat.

In 2020 Nike hired John Donahoe out of ServiceNow. With McKinsey advising, running, basketball and soccer became men, women and kids. Category experts were let go, hundreds of retail partners were cut, and direct sales climbed from under 30% of the business to 44%. The categories came quietly back in 2023. This year direct sales fell 6% and wholesale grew 6%.

This is the consultant’s curse, hiring people whose real skill is cutting costs and letting them call it strategy. Going direct was never a plan to grow the category. Foot Locker has stores, salespeople and inventory, and it moves shoes.

B2B2C means selling through a partner and to the person wearing the product. Sixty percent of the 25 most valuable brands on earth do it. Ninety percent of the top ten.

Two categories can look identical and pay completely differently:

• Sausage. Buy better beef and you lose money. Nobody pays up for Wagyu in a sausage. They want spice and bite.

• Hot dogs. Ballpark went Angus and doubled the business in five years. Hebrew National charges a premium for kosher.

• Nike. A marathon runner’s foot is not a point guard’s foot. Men, women and kids does not tell you that.

Phil Knight retired in 2016 and has been chairman emeritus ever since. Companies drift once the founder leaves. Nike spent forty years turning running and basketball into culture, then deleted the word from its own org chart.

3 conversations to have about the news with the Pirate Eddie Bot and Pirate Christopher Bot

The bots take this week’s moves and run them against your category, not somebody else’s. They come with the founding tier and they jam at 3am.

• Anchor the price before you raise it. Give the bots your price list and ask them to design the premium offer that makes your increase feel small. Apple put a $2,000 phone on the table and a $100 bump disappeared.

• Find your context layer. Hand the bots the things you know that nobody outside your building knows, and ask them where that turns into a product. Salesforce’s real asset is 25 years of customer knowledge.

• Say your categories out loud. Ask the bots to split your customers by the problem they are solving, not by who they are. Nike swapped running and basketball for men and women and lost $200 billion.

Three companies, one lesson. The money is in the category you frame, not the thing you ship.

Not a founding member yet? You can join here.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

P.S. - Every story this week came down to the same move: find the problem before you go shopping for a solution.

The Category Design Academy is where you do that at the category level. You name the problem only you can name, then design the category around it, so you stop competing on terms somebody else set.

The next cohort starts in October. Apply now to save your seat before it sells out.

👉 Learn more about the Category Design Academy here.

Arrrrr! 🏴‍☠️ Welcome to a 🔒 founders-only edition 🔒 of Category Pirates. Each week, we share radically different ideas to help you design new and different categories. Founding subscribers can access the entire archive of 200+ mini-books and audiobooks. If you’re not a paid subscriber, hop aboard!

Subscribe now

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Dear Friend, Subscriber, and Category Pirate,

Kilauea has been erupting on the Big Island for the last 35 years straight.

This is a photo a friend of Pirate Eddie took, which is amazing and a bit spooky, if you know about Pele (IYKYK). Visiting the volcano is a must-see experience that Pirate Eddie and his wife wrote about here in the Big Island Memory Making substack (which Founding Subscribers get for free).

Every single one of you is a dormant volcano of Intellectual Capital waiting to erupt.

You have enormous trapped wisdom that can help so many. But you don’t know how to talk about it. You haven’t framed, named, and claimed it yet. And you are really unsure of how to commercialize it.

We know because this is what happened to us.

🔊 Want to listen to this mini-book instead? Head to the audiobook.

Listen to the Audiobook

Pirate Eddie’s first Intellectual Capital was a Microsoft Excel macro he built in 1999.

He was tired of manually searching for, highlighting, and then building PowerPoints that called out weird data. If a consumer benchmark exceeded plus or minus 20% from the norm, it was a candidate for weird data. He built it, shared it with the firm, and it changed the trajectory of his career.

His Excel macro started a lifelong obsession with Superconsumers.

He got client outcome after client outcome using the Superconsumer approach. In 2009, he published his first HBR article called Tap Into Your Superconsumers. In 2011, he wrote his first HBR article on Category Design. In 2013 and 2014, he published two articles in the HBR magazine, Why It Pays to Be a Category Creator and another, Make Your Best Customers Better. In 2016, he went on HBR’s podcast, Ideacast, about Superconsumers. In 2017, HBR published Pirate Eddie’s first book, Superconsumers. He also went on the HBR Idea Podcast and Pirate Christopher’s OG podcast, Legends and Losers. He started doing paid speaking all around the world. Then, in 2019, he did his first CNBC TV segment about Tesla’s Model 3 consumers. Then, in 2020, Pirates Eddie, Christopher, and Cole started Category Pirates. Which led to 8 figures of consulting revenue, hundreds of mini-books, dozens more podcasts, 7+ Big Books, and 2 AI bots. That’s 27 years of continuous Intellectual Capital eruption.

Podcasts get your Intellectual Capital party started.

Your podcast can lead to a Substack. This can lead to a Mini-Book, then a Big Book. Your Big Book can lead to paid speaking events. A video reel of a speaking event can get you on live TV. Live TV can book you clients. Clients lead to marketplace outcomes. And outcomes lead to more Intellectual Capital that you discuss…on a Podcast.

The truly weird data is how much more productive and faster Intellectual Capital was being created. This infographic captures all of the HBR articles and Category Pirates mini-books, podcasts, Pirate Street Journals, Deep Dive Reports, and podcasts by year.

Pirate Eddie’s first HBR article took 10+ years.

His 2nd HBR article took 2 years. In 2026, as part of the Category Pirates band, Pirates Eddie and Christopher create Intellectual Capital every 4.9 days.

We know you can do the same in less time and with even greater outcomes.

Because Podcasts can accelerate and kickstart the journey.

This is Part 2 of our Podcast Category Design Mini-Books.

As you recall, we’re answering five big questions about Podcasts in two mini-books.

Part 1–Strategy and Design

1. Why should I care about podcasts?

2. How do I design a different podcast?

3. How can I be sure I’m not a donkey?

Part 2–Execution and Practical Tips

4. What are the main traps to watch out for?

5. How can my podcast kickstart a nonstop flywheel of Intellectual Capital?

The nitty-gritty, practical tactical, and seemingly silly but seriously important little things that make a big difference. Some of these are quick-hit tips. Some of these are long stories longer. All of them came from Pirate Christopher’s heart, his wounds and his wins.

We broke it down into three phases: Design, Record, and Compound.

24 Ways to Turn Your Podcast into an Intellectual Capital Volcano That Never Stops Erupting

Read more

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. Keep reading in the Deep Dive Reports.

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Dear Friend, Subscriber, and Category Pirate,

Here’s what we covered in this episode:

1. Dolly Parton owned her songs before anyone knew her name

Elvis Presley wanted to record I Will Always Love You. The condition was half the songwriting money on a song he had nothing to do with writing. Dolly Parton said no. In her words, everybody told her, “She was out of her damn mind”.

Seven years earlier, in 1967, she started a publishing company with her uncle Bill Owens. She had no top 10 hits yet. From that year on, she owned the copyright to every song she wrote.

In 1992, Whitney Houston recorded the song Elvis wanted. It sold 11 million copies in the United States. Parton was the only writer, so she got every dollar. That one cover paid her about $10 million in the 1990s alone.

Dolly built her Intellectual Capital first and got famous second. Most people sell their hours and hope the money shows up later.

Look at who knew the value of their value and who found out late:

• Paul McCartney. Signed a deal he regretted for decades. His line: John and I didn’t know you could own songs.

• Jagger and Richards. Lost their early catalog too.

• Eddie and Christopher. Sold their first books to publishers and paid tuition on the lesson.

• Taylor Swift. Re-recorded her own albums to get the value back. She is standing on Dolly’s shoulders.

The tributes have been about her voice, as they should be. Dollywood, 23,000 jobs. The Imagination Library, 330 million books. A $450 million net worth. All of it sits on paper she signed in 1967, before most of the world had heard her sing.

Rest in peace, legend.

2. A $399 duck is the cheapest way into robots

Hugging Face and Pollen Robotics shipped a robot duck. It costs $399 and stands about as tall as a bowling pin. Out of the box it walks, roller skates, picks things up with its beak, and gets back up when it falls over. It sold 10,000 units in the first week. That is $4 million, and new orders are pushed past Christmas.

The software is free. The simulator, the training stack, the whole control system sits on GitHub. Anyone who can code with AI can teach it a new trick over a weekend. The next day, Nvidia agreed to buy Hugging Face for $13 billion.

Novelty, niche, necessity. Every new category walks that road. First it is a toy. Then it does one job well for a small group. Then people cannot live without it.

• Sharper Image. Sold the first Roomba as a novelty. You play with it once and never touch it again.

• The military. Used iRobot machines to find bombs. That was the niche.

• Daily cleaning. Vacuuming every day, like living in a hotel. That carried the business past $1 billion.

The trap is thinking one group buys all three. The Superconsumer of a novelty, the person who cares most and spends most, is a different human than the Superconsumer of a niche.

3. A $4 price cut told Elf Beauty what its makeup was really worth

In February, the Supreme Court ruled 6 to 3 that the reciprocal tariffs went past the administration’s authority. So the money goes back. $128.7 billion is earmarked for refunds, and about $100 billion was out the door by early August.

Walmart got $2.9 billion back and cut prices on 11,000 items, including ground beef. Shark Ninja got $247 million and used it to hold prices instead of raising them. Elf Beauty got about $50 million and ran a test. They dropped one product, the Halo Glow Skin Tint, by $4. Unit sales jumped almost 40%. They made the cuts permanent on 10% of the lineup, and net sales that quarter were up 36%.

There are few items that make you get in the car and drive to the store. Ground beef is one. It is not America’s favorite protein, it is the most useful one. Burgers, taco night, pasta night, meatloaf. It stays on the list because cooking is hard.

Shoppers will tell you they want every price lower. They do not mean it. They want two bucks off the thing they have to buy, so they feel fine dropping $200 on the thing they don’t.

3 conversations to have with the Pirate Eddie Bot and the Pirate Christopher Bot

The bots take this week’s moves and run them against your category. They come with the founding tier and they jam 24/7.

• Know the value of your value. List everything you sold your time for last month, then ask the bots which of it could have been built once and paid you forever. Dolly wrote the song. Whitney sold it. Dolly got the check.

• Name your novelty, your niche, and your necessity. Describe your product and make the bots write all three versions of it, plus the different customers for each one. The duck buyer today is not the duck buyer in three years.

• Find your trip driver. Give them your price list and ask which item people actually come for and which one they buy on impulse. Discount the first. Protect the second.

Three stories, one idea. Everybody in them found out what their thing was really worth. The winners knew it first.

Not a founding member yet? You can join here.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

P.S. - Every story this week came down to the same move: find the problem before you go shopping for a solution.

The Category Design Academy is where you do that at the category level. You name the problem only you can name, then design the category around it, so you stop competing on terms somebody else set.

The next cohort starts in October. Apply now to save your seat before it sells out.

👉 Learn more about the Category Design Academy here.

Arrrrr! 🏴‍☠️ Welcome to a 🔒 founders-only edition 🔒 of Category Pirates. Each week, we share radically different ideas to help you design new and different categories. Founding subscribers can access the entire archive of 200+ mini-books and audiobooks. If you’re not a paid subscriber, hop aboard!

Subscribe now

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Welcome to Category Pirates. Each week, paid subscribers get one radically different framework for turning what you already know into a category you own, instead of a market you fight over. Sign up for a Founding subscription to ask the Pirate Eddie and Christopher Bot your category design questions and get complimentary digital copies of all 7 of our big books.

Subscribe now

Dear Friend, Subscriber, and Category Pirate,

Pirate Shelly Rood wanted to start a podcast eight years ago.

She was eight months pregnant. A trusted mentor told her to wait. So she did.

But it became too hard to keep her wisdom trapped in her head. She said it was like, “lightning in my head.” She finally hit record in July 2025. It felt like swimming in mud. Then a friend told her about Category Design. And it freed Shelly to be Shelly.

She thought she was too late.

The US military community didn’t think so. They want Pirate Shelly to run their podcast for them. She couldn’t believe it at first, but then realized they wanted her because “they are watching me do it.”

Pirate Christopher was told he was too late to the Podcasting party.

That was 9 years ago. He has two top 0.5% podcasts, Follow Your Different and Lochhead on Marketing. He’s been able to jam with powerful and prescient authors, athletes, leaders, and movers and shakers on a myriad of topics.

He receives love notes from listeners from over 180 countries.

Pirates he never would have met otherwise. People tell Christopher his podcasts changed their lives. Category Pirates would likely not exist without Pirate Christopher’s podcasts. So many of our Substack subscribers said they started out listening to his podcasts.

To think he nearly pooped his pants right before the launch of Lochhead on Marketing!

🔊 Want to listen to this mini-book instead? Head to the audiobook.

Listen to the Audiobook

Podcast Category Design.

This is not the 4,327th how-to podcast guide.

This is the first deep discussion on podcast category design.

• What makes my podcast different?

• What category is my podcast?

• What problem does it solve?

• Who is the Super for this?

So what you’re about to read is podcasting through the category design lens, all based on the lessons learned and battle scars from Pirate Christopher as he built a Top 0.5% global podcast.

We’re going to answer five big questions about Podcasts in two mini-books.

Part 1: Strategy and Design

1. Why should I care about podcasts?

2. How do I design a different podcast?

3. How can I be sure I’m not a donkey?

Part 2: Execution and Practical Tips

4. What are the main traps to watch out for?

5. How can my podcast kickstart a nonstop flywheel of Intellectual Capital?

Question 1: Why Should I Care About Podcasts?

If you want your own Intellectual Capital, you should care about podcasts.

We knew someone who was discouraged by our book, Creator Capitalist.

That was not the reaction we were hoping for. This person got the value of the Four Capitals: Reputation, Relationship, Financial, and Intellectual Capital. But was disappointed because she did not have any Intellectual Capital of her own. She knew all her Intellectual Capital came from others.

That’s where everyone starts.

None of our Intellectual Capital is built from scratch. Everyone’s ideas start with someone else’s ideas. We aim to stand on the shoulders of legends.

And we believe everyone has unique Intellectual Capital that can make a massive difference in the world.

And podcasting is the easiest way to get the Intellectual Capital party started.

If you’ve always believed you have valuable Intellectual Capital to share but haven’t figured out how to share it, enter the podcasting category. If you are a reluctant expert but are shy, introverted, or busy, you should look into podcasts. If you’ve ever wanted to write a book, start a Substack, build a Customer Diagnostic, get on CNBC, write for HBR, create a course, or build any kind of Intellectual Capital, start with a podcast.

Podcasting is the easiest way to crystallize, create, and commercialize your Intellectual Capital.

Unlocking Trapped Wisdom is the Key to Digital Treasure

You are much wiser and smarter than you know.

Your net worth is so much higher than you realize. You are a thought leadership beast in the making. We believe this from the bottom of our pirate-y hearts.

You have Trapped Wisdom.

Some Trapped Wisdom is stuff you are unconsciously competent at, a phrase coined by Noel Burch. This is when your skill becomes second nature, kind of like driving a car or riding a bike.

Or knowing when an annual National Sales Meeting flops because of Narrative Slop that Pirate Kristi Faulkner sees, but most others miss. Or when Pirate Moyo Labode sees a retailer bleeding profits because their contribution margin ROI is going down even when sales are going up.

We learn legendary things along the way.

We pay with scars for our greatest learnings. Things that were once hard become so natural that we can do them without thinking.

The problem with Trapped Wisdom is that you often need someone else to point it out to you. One of Pirate Christopher’s favorite sayings (after hearing someone say something smart) is “Did you hear what you just said?” Interestingly, the person who said the smart thing often can’t remember what they said. Even a minute earlier. They aren’t dumb. They are so unconsciously competent, a super smart thing rolled off their tongue, and they just kept going. You do this all the time.

You don’t create Intellectual Capital alone.

Pirates Christopher and Eddie had numerous thought partners along the way. You need a fellow Pirate to Frame, Name, and Claim your Trapped Wisdom.

The idea that Bill Shakespeare was a one-man genius is garbagé, as the French say.

Behind Shakespeare’s legendary catalog sat a network of key collaborators: Christopher Marlowe lent early dramatic fire to the Henry VI trilogy, while John Fletcher co-wrote late-career titles like Henry VIII. Actors Richard Burbage and Robert Amin made the roles sing with seriousness and slapstick, respectively. Actor friend John Heminges saved 18 unpublished masterpieces from the trash, including Macbeth and The Tempest.

If you want to create legendary Intellectual Capital, you need partners.

This happens all the time in our Category Design Academy. A Pirate will be explaining something, and Pirate Christopher will interject, “Sorry to stop you, handsome. Can you say that again?” Or when Pirate Thomas Parrott was explaining how irritated he was when executives talk about Return on Ad Sales (ROAS) and how Contribution Margin was so much more powerful, and Pirates Eddie and Christopher started gesticulating wildly.

Trapped wisdom alert!

For your ideas, content, and category to take flight, it often needs someone else to see it, say it is special, and make you take notice.

Our friend Tom Schwab, founder of Interview Valet and podcast expert, says, "What’s ordinary to you is extraordinary to others.”

These moments happen all the time in podcasts.

Podcasts force you to think. And get clear. And when we start thinking, smart things happen. And when we’re forced to express our thinking, we’re driven to communicate with power.

Podcast guesting and hosting are potent ways to uncover your trapped wisdom (FRAME). The best way to figure out what to call it is to go on multiple podcasts and refine the languaging (NAME). The best way to own radically valuable, highly differentiated, massive problem-solving Intellectual Capital is to host your own Podcast (CLAIM).

Podcasts (aka Digital Treasure) Let You Talk to Strangers, Who Become Friends, Who Become Customers, at Scale

The best marketing is education.

Learning a clever and cheap solution to an old problem is a joy. Learning about a problem you didn’t know you had makes you feel grateful. Learning from someone who had the same problem, has already solved it, and is holding your hand through the process is transformational.

Most marketing does not make you feel joy, grateful, or transformed.

But a great podcast makes you feel all of those feelings and more.

If you care about getting new customers, you should care about podcasts. Winning new customers requires talking to a lot of people who don’t know or trust you. That’s what makes podcasts digital treasure.

But talking to strangers is not easy.

Malcolm Gladwell wrote an entire book about talking to strangers. One of the core ideas is that conversations with strangers are awkward because there is confusion about what kind of conversation they are having.

The category of conversation really matters when it comes to talking to strangers.

Is this a 3-second conversation for something urgent and important? Like ‘Where is the bathroom?’ Most people don’t mind being interrupted for something important and easy that they can help with.

Or is it a 3-hour conversation for something that doesn’t matter and can wait? Like, ‘Can I tell you my life story while I sit next to you on this cross-country flight where you are trapped?’ The same person can be very friendly in a 3-second conversation and icy cold in a 3-hour conversation.

Most marketers are trying to initiate long conversations in a world with a short attention span.

Many marketers are trying to tell their life story to a consumer who couldn’t care less, who wants to veg out and has their noise-cancelling AirPods on. Most marketing is from brands howling nonsense into a megaphone. In response, consumers have become ninjas at ignoring.

Podcasts are about education.

Podcasts allow prospective consumers to choose from a menu with a wide variety of educational conversations. Some are 3 minutes, 30 minutes, or 3 hours. Across an infinite number of topics. At a time of their choosing, when they are the most ready to receive it. Anywhere in the world.

For free.

Pirate Christopher’s podcasts allow him to talk to strangers in 190 countries. Even Tuvalu (we had to look it up too.)

Podcasts are the Most Intimate Way to Build Relationships

Most marketing is at arm’s length.

It is easy to ignore and keep transactional. The messaging doesn’t stick. Most times, you don’t even remember which brand is doing the marketing.

Podcasts are different.

Your voice is in their body. Not next to their ear. In it. It’s an incredibly intimate thing. They’ll grow to find comfort in your voice. From time to time, Pirate Christopher gets recognized by his voice. He’ll be standing in line for a coffee, and someone will ask, “Do you have a podcast?”

Just like your mother’s voice!

Podcasting has a very long value tail.

Podcasting has made an incalculable difference to Pirate Christopher and now Category Pirates too (The Pirate Street Journal Podcast.)

There are the obvious benefits.

Like hundreds of legendary conversations. The regular stream of love notes. The increased visibility. Podcasts are legendary top-of-funnel marketing.

A good podcast throws off new Intellectual Capital like a powder tail behind a snowboarder in deep powder.

Podcasts can function like an IC lab that can be monetized in many ways.

In a post-AI world, different Intellectual Capital that makes a difference in the world matter even more. Successful businesses and careers will be made from creating differentiated, high-value IC that solves new categories of problems for supers.

Podcasting was the foundation of the friendship between Pirates Christopher and Eddie.

Pirate Eddie and Pirate Christopher met before either started podcasting. Eddie was an early guest on Christopher’s podcast. That helped cement their connection. Opening the door to a much deeper relationship that ultimately led to Category Pirates.

Serendipity can be legendary.

Podcasting and writing also keep you visible, in a way that almost nothing else does. There are legendary business thinkers who have lost their visibility because they are not present in a meaningful way in the digital media landscape.

The Economic Value of Podcasts

Podcasts generate at least three great business outcomes.

1. It is the easiest way to create Intellectual Capital.

2. It builds Relationship Capital.

3. It’s how AI knows you matter.

We’ve written about the first two. Let’s talk about keeping you from being AI Invisible. Credit to Pirates Nick Kringas and Lydia Flocchini for creating the category of AI Invisibility in Personal Injury attorneys.

Your Podcast Has Two Audiences Now: Humans And Machines

For the first 20 years of podcasting, we asked one question: How many people are listening?

Today, that question is now radically incomplete. Because your podcast has another audience, AI. Every time you publish a podcast, you’re potentially adding to the public body of evidence about:

• Who you are.

• What you know.

• What you believe.

• What language you use.

• Who you associate with.

• What problems you solve.

• What ideas you’re known for.

• And critically, what category you belong in.

This matters because increasingly, people are asking AI about you.

Should I buy from you? Should I follow you? Do you really know what you’re talking about?

Welcome to your Machine Reputation.

Your analog reputation is what humans know about you. Your Machine Reputation is what AI says about you. And this creates a completely new way to think about podcasting.

Imagine you’ve published 250 episodes over five years.

That’s potentially hundreds of hours of you explaining your ideas (your guests, stories, expertise, language, frameworks, POV). And when those conversations also exist as video, transcripts, episode pages, show notes and clips, you’ve created a growing body of machine-discoverable Intellectual Capital.

Thanks to podcasts, your Intellectual Capital can beget more Intellectual Capital.

Your book explains the idea. Your podcast explores it. Your newsletter develops it. Your YouTube channel demonstrates it. Your website organizes it. Your community is where people discuss it. Your courses are where people go deep with it. Guests reference it. Search engines index it. AI systems can retrieve and synthesize pieces of it.

That’s not SEO or “content marketing.”

You’re building the public intellectual capital moat around your category.

A “Small” Podcast Might Have Huge Impact

Suppose your podcast only gets 200 downloads per episode.

But what would you say if you got invited to speak at a VIP conference with 200 people who care deeply about your category? What if those episodes have created hundreds of hours of deep, authoritative Intellectual Capital about an important category? What if those conversations become transcripts, videos, newsletters, articles, and clips? What if they generate links, citations, references, and conversations elsewhere? And what if AI systems increasingly encounter that body of work when trying to understand the category?

Suddenly asking only, “How many downloads did we get?” looks ridiculous.

Which means the economics of podcasting just changed. For 20 years, we measured the value of a podcast primarily by how many humans consumed it. That’s now incomplete. Downloads measure audience.

A compounding body of differentiated Intellectual Capital is the most valuable asset in the AI future.

A fascinating metric to measure how powerfully your IC is landing with listeners is called “impact plays”. It’s defined as the percentage of listeners who consume at least 75% of your podcast. Pirate Christopher’s audience sticks around.

Question 2: How Do I Design a Different Podcast?

Pirate Christopher started podcasting in 2017, about nine months after his first book, Play Bigger, came out.

Like most category designers, his motivation was missing. He couldn’t find the podcast he wanted to hear. So he started one.

A radically different one.

Most business, startup, leadership, and marketing podcasts are created for people who spend most of their careers making existing things better.

Of course, making things better matters. But there was much less for people who wanted to center their careers, and maybe their lives, around the exponential different.

• Startups.

• Innovations.

• New products.

• Breakthroughs.

• New companies.

• New categories.

People creating things that did not exist before.

Sure, there are a lot of shows about business, startups, and marketing, but few that feel like eavesdropping on a conversation that grabs you. And fewer still for people who feel a little on the outside. Working on the more innovative, swing-for-the-fences, go-for-growth stuff.

And there was a very personal side to the missing.

At a high-level, you could say there are people who find their place in the world. And then there’s a smaller group of people for whom there is no place to find. These people have to make their place in the world.

The misfits, pirates, dreamers, and innovators. The different. Underneath all of it was one provocative insight:

The people who are different make the biggest difference.

The other ‘missing’ was that Pirate Christopher didn’t like the way most business podcasts felt.

• Highly edited.

• Highly produced.

• Question. Answer. Cut.

Take a long conversation, chop it into pieces, extract the “value bombs,” remove the messy parts, and manufacture a polished media product.

Making it worse, because it’s an INTERVIEW, both people know they’re being interviewed. Game faces on. PR Trained. Talking points ready. Perform.

Pirate Christopher wanted the opposite. A real conversation. Start to finish.

If you listen to Follow Your Different when an author is the guest. At about the 15-20 minute mark, you’ll notice them slide out of their prepared stories and talking points, forget they are on a podcast, and slide into a real dialogue.

This is where magic starts.

The tangents, laughter, pauses, and disagreement are differently delicious. Listening to someone change their mind is amazing. The anticipation builds when someone is thinking out loud.

This is when Lochhead’s ADHD kicks in, and he gets lost in the experience.

He wanted the experience of sitting at the next table while two fascinating people had coffee or cocktails and getting to eavesdrop. Those missings came together in the Venn diagram that became Follow Your Different. But this isn’t just the origin story of a podcast.

Podcasters Are Different

To be a good Podcaster, you have to be arrogant / confident enough to think people should listen to you. And humble, curious, endearing enough to come across as a friend to listeners and guests.

That’s a weird combo.

Most importantly, you must help listeners solve problems.

It could be as simple a problem as, “I want to listen to something interesting while I garden” to “I want to take my B2B marketing career to the next level”, but legendary podcasts, like legendary categories, solve problems that matter.

With all that said. You might (still) be asking: “Why would anyone listen to me?”

Keep reading.

The Podcast Category Design Hexagon

The world doesn’t need another podcast.

Give people a different lens, on the other hand. And you can make an incalculable difference.

Notice what we’re not telling you.

Which microphone to buy. Whether your podcast should be 23 minutes or 93 minutes. How often to publish. How to create clips. The “17 Proven Podcast Growth Hacks.”

There are plenty of people who can teach you those things. We’re asking a more strategic question: Why should your podcast exist? There are millions of podcasts. We don’t need another one.

We do need your podcast.

But only if yours gives us something the others can’t. Because anybody can copy your microphone. Copy your format. Your production. Your guest strategy. And increasingly, AI can reproduce almost every mechanical aspect of creating a podcast.

But they cannot be you.

The goal isn’t to become another podcaster. It’s to become the only podcaster who could make your podcast. How do you do this?

Our Podcast Category Design Hexagon shows you:

Read more

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. Keep reading in the Deep Dive Reports.

Subscribe now

Dear Friend, Subscriber, and Category Pirate,

Here’s what we covered in this episode:

1. Meta is not in the social media business. It is in the comparison business.

The Journal said Meta got hit with an $18 billion fine. The real number is $12.7 billion, paid out over ten years. Meta makes about $200 billion every single year. So this “punishment” costs them about 1% of one year’s money, stretched across a decade. Mouse nuts.

Calling it a fine misses what really happened. Meta bought something.

The other $5.3 billion only gets paid if TikTok and YouTube both agree to limit kids to one hour a day, and both pay $5.3 billion of their own. Meta turned its own punishment into a trap for its rivals. The states asked for $200 billion at the start. They settled in week two of the trial, right before Zuckerberg had to take the stand.

If you judge a company by its product, you will get it wrong. Judge it by how it makes money. Meta started as FaceMash, a website that showed two photos and asked which person looked better. Every Meta product since then is that same game, just bigger.

• Facebook asks: is your life better than your friend’s life?

• Instagram asks: is your body better than that body?

• The feed asks: is your day better than the day on your screen?

Meta makes money when you compare yourself to other people. That is the whole business. This is why the new parental controls are real wins that still leave the machine running.

Two weeks before signing this deal, Zuckerberg published a 6,500-word letter promising everyone a personal super-smart AI that lives inside your health, your calendar, and your relationships. The press covered the settlement. The bigger question is whether you want to hand your AI life to the company that was already keeping score.

2. NVIDIA made $59.7 billion in 90 days. Apple, Walmart, Disney, and 9 other giants combined made less.

NVIDIA made $96.2 billion in three months, up 106% from last year. Data centers alone brought in $89 billion. Their profit was $59.7 billion in ninety days. That is more than the profits of Apple, Walmart, Coca-Cola, P&G, PepsiCo, Disney, McDonald’s, Costco, GM, Nike, Starbucks, and UPS added together. Next quarter, they expect $108 billion. The stock jumped 8.7% after four straight quarters where they beat expectations, and the stock dropped anyway.

History teaches a lesson here. The company that sells the hardware wins the first act of a tech revolution and loses the last one. Jensen has read that same history book.

One layer of the six layer cake is never enough. Smart players buy squares on the bingo card before they need them. Watch where NVIDIA’s cash went:

• $6 billion for Poolside, an AI model built in America to answer China’s AI. Now every customer knows Jensen can compete with them if he wants to.

• $500 billion in backup money with six Wall Street banks, to help customers who cannot afford the chips buy them anyway.

• Half the data center business now comes from smaller companies, growing 100% a year.

The number that matters most is money made per gigawatt of power. The Hopper chip made $18 billion per gigawatt. Blackwell makes $25 billion. Vera Rubin will make $40 billion. Jensen’s stated goal is infinity.

Towns across America are voting to keep data centers out, while the company at the center of them makes more money than anyone ever has. If the backlash had real power, it would show up in these numbers. It does not. Every DoorDash order is now an AI job running in a data center. Jensen, take the job. Be the Prime Minister of AI, because the alternative is letting the Darth Vaders do the talking.

3. Pringles spent $4 million teaching AI to make every chip identical. It already paid off.

The most important AI story in the news this week: The Pringle Chip.

The price was four to five million dollars, for one production line in Poland. It took four years of work with Siemens. Sensors on the line check 200 pieces of information every millisecond, watching more than 200 things at once, from the size of the flour bits to where the potatoes were grown. The results: chips that are 10% better, 13% less wasted food, and the project earned back more than 40% of its cost. Belgium is next, then the US in 2027, across factories that make 705 million pounds of Pringles a year. This is regular, older-style machine learning. There is no generative AI anywhere in it.

Everyone is watching the trillion-dollar AI buildout. The four million dollar one already paid for itself.

Market the problem, not the technology. In a brand new category, customers want creativity. In an old category, customers want the chip to taste exactly like it did thirty years ago. People pay for sameness, and sameness is a chemistry problem:

• Budweiser makes sure the beer tastes the same in Asia, Europe, Latin America and the US. August Busch III enforced it personally.

• Cadbury pointed high speed cameras at melted chocolate twenty years ago to watch how it flowed, for the same reason.

• Domino’s figured out how to stop water from moving out of the dough, so the crust rises. That is food science doing marketing’s job.

Give AI a job that says “match the recipe perfectly, and keep improving until every chip is identical” and it beats humans every time. Nobody working that line in Poland wants to be Lucille Ball at the chocolate belt, stuffing candy in her mouth because the conveyor got too fast. This is what embedded AI looks like when it works. No big keynote speech. Just a chip that tastes right.

3 conversations to have about the news with the Pirate Eddie Bot and Pirate Christopher Bot

The frameworks only pay off when you run them on your own category. Both bots come with the founding tier and jam 24/7. Take these in:

• Name the category you actually monetize, not the one on your website. Ask the bots to separate what you sell from what your revenue actually rewards. Meta sells social media and monetizes comparison.

• Map your six layers and pick the second square. Ask them where your competitors are already set up to compete with you, and what you would have to buy to be ready. Jensen spent $6 billion on that answer.

• Find the place your customers are paying for sameness. Ask where variance is costing you, then ask what the boring machine learning fix is worth. Four million bought a 40% return on one line.

The through-line this week: every one of these three companies is being described by its product and understood by its category, and the two are not the same thing.

Not a founding member yet? You can join here.

What’s coming up on Pirate Street Journal

Tuesday episodes: three topics, thirty minutes, a couple of bongos. Mini-books and Deep Dive Reports every other Friday. Founding Members get the full DDR, everyone else gets a preview. Breaking News reports go to all paying subscribers.

New episodes drop every Tuesday: three topics, thirty minutes, a couple of bongos.

Our Deep Dive Reports go deep on one company or one shift, with the category read and the call attached. Founding Members get each one start to finish the day it drops, and everyone else gets the preview. Read the Deep Dive Reports here.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

P.S. - Every story this week came down to the same move: find the problem before you go shopping for a solution.

The Category Design Academy is where you do that at the category level. You name the problem only you can name, then design the category around it, so you stop competing on terms somebody else set.

The next cohort starts in October. Apply now to save your seat before it sells out.

👉 Learn more about the Category Design Academy here.

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.

Subscribe now

Dear Friend, Subscriber, and Category Pirate,

Here’s what we covered in this episode:

1. What happens when the person who owns your team is not a fan?

$12.5 billion, the most anyone has ever paid for a sports team. Mark Walter bought the Lakers less than a year ago for $10 billion, a record at the time. The team was not for sale. Josh Kushner and Bob Iger called anyway. Walter said yes inside 72 hours.

The NBA caps team debt at $475 million, so nobody buys a team the way a buyout firm buys a company, mostly with borrowed money. That leaves buyers who are rich but not liquid, meaning most of their wealth is not cash they can spend today.

In sports the owner is supposed to be the Superconsumer, the small group of customers who care the most and spend the most. The super of one is the super of nine. One real fan pulls about nine more in behind them.

Watch what changes when the owner is a fund instead:

• Ryan Smith. Overspends on his Utah players on purpose, because he is a fan.

• Mark Cuban. Yelled at referees, paid the fines, delivered the only title in Mavericks history.

• Mat Ishbia. Borrowed against his mortgage company to buy the Suns and bet rates would fall. They did not.

• Mark Walter. Federal investigators are asking how billions in loans landed on his insurers’ books.

The price rose $2.5 billion in under a year. The Lakers won nothing in that window, signed nobody, and built nothing. The number moved because the supply is fixed by a vote of the other owners, not by anything that happened on the floor.

2. Twenty percent of Amazon ebooks are written with AI

Researchers scanned 14,419 self-published ebooks on Amazon. One in five was more than a quarter written by AI. Those books are 20% of the pile and 12% of the sales.

Andy Hunter, who runs Bookshop.org, figures 99% of them exist to trick somebody into buying something empty. The Authors Guild’s answer is a sticker saying a human wrote it, on the honor system, which means nobody checks.

Nobody is buying the sticker. People have made art with new tools since the paintbrush.

Pixar raised the bar on story until the executives cried at the table or the script got thrown out. Publishing went the other way. Average book price flat for 30 years, and no attempt to grow the pie.

Market the problem, not the product. Sell the thing your buyer is trying to fix, not the object you ship. Readers buy an outcome: something to do on a five-hour flight, a skill they can use Monday, a book that argues back. Every page somebody skips inside an ebook says which one they came for. No publisher reads any of it.

3. A family said no to $26 million from AI

A company offered Delsia Bare and her mother, Ida Huddleston, about $26.5 million for farmland their family has worked for generations. That is roughly ten times what farmland sells for around Maysville, Kentucky, population 8,700.

They said yes. Then they learned it would become a 2.2 gigawatt data center, enough electricity to run a small city. They said no.

The rest of the town signed about $110 million in agreements. Town leaders signed contracts saying they could not discuss it, so nobody was allowed to know the buyer. Reporting points to Meta.

The gigawatts were never the problem.

Frame, name, claim. You decide what the story is about, you give it a name, and you claim it. Refuse and your opponents name it for you. A town of 8,700 wrote a better story than Meta did: secret buyer, gag order, 400 jobs pitched to a place where one in four people lives below the poverty line.

Meta already owns the better answer and led with money instead.

The region’s development director reads the town as 20% against, 20% for, 60% still deciding. That middle moves on relationship capital, which is trust you build by showing up.

Whatever you are quietly not saying about your own work, somebody else will say it for you, and they pick the words.

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. They come with the founding tier and they jam at 3am when you are the only one still thinking about this.

• Put your best customer in the room. Give the bots your last three product decisions and a description of your most obsessive customer, then make them argue each decision from that person’s side. Ryan Smith overspends on his Utah players on purpose, which is roughly what having a fan in the room costs.

• Ask what outcome you actually sell. Hand them your product page and make them separate what you ship from the result your buyer wanted. Publishing never did, which is why it is arguing about stickers.

• Ask what you have refused to name. Feed them the thing you are quietly not saying, then have them write the story your opponents will tell in the silence. Meta got that story written for it in Kentucky.

All three headlines are the same headline. The money showed up and the relationship did not.

Not a founding member yet? You can join here.

New episodes drop every Tuesday: three topics, thirty minutes, a couple of bongos.

Our Deep Dive Reports go deep on one company or one shift, with the category read and the call attached. Founding Members get each one start to finish the day it drops, and everyone else gets the preview. Read the Deep Dive Reports here.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

P.S. - Every story this week came down to the same move: find the problem before you go shopping for a solution.

The Category Design Academy is where you do that at the category level. You name the problem only you can name, then design the category around it, so you stop competing on terms somebody else set.

The next cohort starts in October and will sell out. Apply now to save your seat.

👉 Learn more about the Category Design Academy here.

Welcome to the Pirate Street Journal. The Wall Street Journal covers companies. We cover categories.

Every Tuesday, we pick three headlines worth paying attention to and break down the category underneath. Every other Friday, we go deeper with a Deep Dive Report, calling where the category goes next. Become a Founding Member to get every Deep Dive Report, mini-book, audiobook, and access to the Pirate Eddie and Christopher bots.

Piratey disclaimer: This is NOT financial advice. None of us have Series 63, Series 6 7, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS. Think of this like professional wrestling. It’s entertainment.Don’t be so smart you’re stupid and suplex your safety net savings.

And, while we are writing to parents, this also applies to anyone with a niece, nephew or anyone with a young person in their life they want to invest in.

Subscribe now

Dear Friend, Subscriber, and Category Pirate,

Pirate Eddie and his wife saved enough to cover college for their three kids.

They saved early, as soon as their kids were born. They saved consistently. They saved smartly through 529 College Savings plans.

Or so they thought.

529s are like 401K accounts, but instead of saving for retirement, you are saving for college education. Some states give you a tax deduction when you put money into it, and your money can grow tax-free for qualified educational withdrawals. Pirate Eddie thought he was smart to set aside savings in a 529.

Saving early and consistently were two smart decisions.

Trusting the category of college savings cost them six figures.

We want you to avoid the mistakes Pirate Eddie made.

Did Pirate Eddie and his wife save enough to send their kids to college? Yes. But one dumb decision made two decades ago could have meant they could have also saved enough to pay for college for every grandchild and great grandchild going forward.

Without having saved an incremental dollar.

Hey Ho, Let’s Go!

Is College Right For Everyone?

The data says no. The give-to-get for college does not look good and is getting worse.

Total college debt has gone up consistently since 2006, growing nearly 3.5x in 20 years.

Total college enrollment peaked in 2010.

Why is total college debt going up when total college students are going down or flat? College has gotten more expensive. And students aren’t able to pay down the debt.

Pirate Eddie grew up in an immigrant family that told him education was the silver bullet.

His brother Jimmy went to Cornell on financial aid, studied Mechanical Engineering, got a co-op job from Lockheed Martin and has been sending satellites into space for three decades.

Pirate Jimmy became an expert.

Pirate Eddie went to the University of Chicago on financial aid, studied Political Science and Economics, landed in consulting, wrote a ton in HBR, helped the Fortune 500 generate tens of billions of dollars of profitable revenue and received a small sliver of that.

Pirate Eddie became an advisor and thought leader.

But Pirate Christopher got there without college.

He became an entrepreneur and started his own company at 18. Sold his company at the age of 28 and moved to Silicon Valley from Canada. Became a three time CMO for publicly traded tech companies and became the godfather of Category Design.

Pirate Christopher became an entrepreneur, executive, advisor and thought leader.

Being an expert in law, banking, consulting or medicine still requires college.

But expertise is being commoditized by AI. College is increasingly less necessary to be an executive, advisor or thought leader.

Becoming an entrepreneur has never required college.

Don’t assume that you need to go to college to have the career you want.

The Three Thieves of College Savings

1.7 trillion reasons make us mad about the category of College and College Savings.

That’s the total size of the US education debt. The debt is a big reason why young people feel hopeless about their future. Having 5 to 6 figures of debt over your head makes young folks think twice about getting married, having kids and buying a house. It is an anchor that slows them from making forward progress in their lives.

Let’s get personal.

One of Pirate Eddie’s kids had a friend whose parents said, “We’re sorry, but we only have money to send you or your younger brother to college. Your younger brother has more potential and upside. So if you want to go to college, you’re going to have to pay for it yourself.”

This made the Pirates piss fire.

The Pirates weren’t just mad at the parents, especially since there is context we don’t have. The Pirates were mad at the system and the category of college overall.

This kid was smart, hard-working, and motivated.

But he was so stressed because he believed he had to get into a certain tier of college to succeed in life (wrong.) He felt pressure that he had to take out massive loans (nope.)

The good news was that the kid was going into business.

This kid got into one of the best business schools in the country and got a full ride. It’s a legendary start to what we know is going to be a legendary career. This kid is going to make a dent in the universe.

The best news is business is as much of a meritocracy as there is out there.

The top college that produced the most Fortune 500 CEOs is the University of Wisconsin. 14 out of the 20 CEOs of the top 20 largest companies went to public schools.

Many in college are missionaries, trying to educate our kids.

But money often turns missionaries into mercenaries. And thanks to government loans into education, there’s a lot of money sloshing around the categories of college and college savings.

Be eyes wide open about three thieves that are trying to steal your money and your kids’ future.

The College Cartel

The US government is watchful and concerned about cartels and antitrust.

A cartel is any group of would-be competitors who coordinate their actions to benefit them, typically at the expense of the consumer. The theory is cartels and monopolies lead to higher prices and other bad outcomes for consumers.

Colleges, especially elite colleges, are the cartel in plain sight.

The narcotic they market and sell is especially insidious. It’s not fentanyl, cocaine or heroin. They are selling envy and it is as addictive and destructive as any drug.

Just like drugs, colleges have amazing pricing power.

The issue is pricing is oddly very similar in amount and the rate of increase. It is the epitome of keeping up with the Joneses. When someone adds a super ding-dong dormitory, the others follow suit. When one raises their prices, the others do so as well.

In 1989, the Department of Justice opened an investigation and, in 1991, sued 57 universities for price fixing.

Each of the eight Ivy League colleges signed consent decrees without admitting guilt. MIT fought back and got it overturned. Crazily enough, Congress passed Section 568 of the Improving America’s School Act in 1994 to make it lawful for colleges to collude on a financial aid formula.

It took five former students to kick-start the change required in 2022.

Henry v. Brown University was a class action lawsuit on behalf of 200,000 students on financial aid that alleged 17 elite universities got together and agreed on the same formula to calculate what your family could pay.

Hundreds of millions of dollars were paid by colleges to settle the claims.

Why are colleges raising prices?

To pay for college administrators and G&A headcount that have nothing to do with your students.

If colleges were publicly traded on the stock market, many would have been decimated for being bloated. Even Pirate Eddie’s alma mater, the University of Chicago, was highlighted in the Wall Street Journal for being poorly financially run.

The University of Chicago is arguably the best in the world at Economics.

It has the most Nobel Prize winners in economics. Folks like Milton Friedman (Free Markets), Gary Becker (Human Capital), Eugene Fama (Efficient Market Theory), Richard Thaler (Behavioral economics).

So how is it that the best school in the world at economics is losing money?

You can be so smart you’re stupid.

College is expensive because they are spending stupidly. College is expensive because they are greedy, creating jobs that don’t help kids. College is expensive because the government gives out education loans. College is expensive because there aren’t really consequences for elite colleges as applications and perceived selectivity go up.

Have the outcomes gone up?

When Pirate Eddie graduated, his starting salary was $42,000, and the all-in cost of the University of Chicago was about $28,000. So Pirate Eddie got a job that made 1.5x more than his annual tuition.

The most recent data is that the starting salary at McKinsey, the most famous consulting firm, is $112,000. The all-in cost at the University of Chicago is $90,000. So the ratio dropped from to 1.2x.

The price of college does not necessarily reflect the value you get.

Fund Manager Fraud

We’re not necessarily talking about illegal fraud.

We’re talking about allowable fraud. We’re talking about weaponizing word salad marketing. We’re talking about unnecessary complexity.

We’re talking about lying with the truth.

Pirate Eddie uses Bright Directions in Illinois for a 529. There are 57 different fund choices. 22 funds are actively managed funds. Yet the Dow Jones highlights that about 9 out of 10 active fund managers fail to beat the index.

How many S&P 500 index funds are there? One. That is the one Pirate Eddie should have picked 20 years ago.

But he fell for the great 529 fund lie. Age-based 529 funds.

There are 26 of them in his 57 different choices. They all promise simplicity. Tell us how old your kid is, and we’ll manage the investment choices to be less aggressive the closer they are to college.

It sounds simple.

But the only people who get rich are the fund managers.

You know the saying, “A fool and his money are soon parted”

Well, a mutual fund and his money are also soon parted in two ways. Front-end loads or sales charges to invest at the outset. Many of the 529 funds and age-based ones charge you 2.5% of your money off the top. The second way mutual funds take your money is through annual expense ratios. This pays for the fund managers’ compensation and all their administrative costs.

And it is the 90% of the fund managers who can’t beat the market that are often charging you the most. They aren’t worth the money.

Take a look at a representative set of choices that Pirate Eddie has.

The X-axis shows the annual expense ratio. The Y-axis shows the total year-one costs, factoring in front-end sales charges. We have a few age-based funds, a T Rowe Price fund, a Northern Trust S&P 500 Index fund, and we threw in a Vanguard S&P 500 index fund that is NOT offered.

Age-Based Aggressive and Age-Based conservative charge nearly 0.80% per year. 0.80% sounds small. But it’s nearly $1 for every $100 you invest. That’s the going rate you’d pay for a full-service broker at Goldman Sachs or Merrill Lynch.

Every fund offered by Bright Directions in Illinois is vastly more expensive than the Vanguard fund. Which begs the question: if Bright Directions is on our side, why don’t they offer the cheapest, largest, and best index fund in the world?

The T. Rowe Price Equity Income fund is the most expensive on the chart. Vanguard’s S&P 500 index ratio is 0.03%. T. Rowe’s is 0.95% per year and comes with a 2.5% front-end load charge.

You’d assume it performed the best, right? No, it only beat the S&P 500 2 out of the last 10 years. T. Rowe’s 10-year CAGR was 10.66% vs. 14.82% for the S&P 500.

This T. Rowe Price fund is 32 times more expensive for 72% of the S&P 500 performance.

That’s a terrible give to get.

The Age-Based Funds are about 26 times more expensive than the S&P 500. Yet according to Pirate Eddie’s experience, they yielded about a 5% return per year. Or about one third of the market.

Why is this?

They are so conservative that they overweight the fund in bond funds early on. When Pirate Eddie’s kids were going to college, he was horrified that they were paying 0.8% to have a decent chunk invested in money market funds.

This is what the asset allocation looks like for the Age-based aggressive fund.

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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. Keep reading in the Deep Dive Reports.

Subscribe now

Dear Friend, Subscriber, and Category Pirate,

Here’s what we covered in this episode:

1. Burger King fixed the product and the company. It never touched the category.

8.5% Burger King’s US restaurants sold 8.5% more than they did a year earlier, its best quarter in two years. Wendy’s sold 7% less.

Burger King earned that. Look at the work:

• It bought back its biggest franchisee, a company operating about a thousand of its restaurants, to get control of its own operations again. That is a company move.

• It rebuilt the Whopper. New bun, new mayo, a box that keeps it hot, and the chef who developed the Popeyes chicken sandwich. That is a product move.

• It retired the King mascot, cut the menu down, and launched “You Rule.” Company again.

The Magic Triangle says a legendary business designs three things at the same time: the product, the company, and the category the product lives in. Burger King nailed two and left the third blank. It is still selling burgers, in the burger category, against everyone else selling burgers. The only available win is being slightly better at the identical thing, forever.

Then there is In-N-Out. Family-owned since 1948, never franchised, never public, one of the shortest menus in fast food. Its secret menu (Animal Style, 4x4, protein style) is a fixed set of options, which lets super consumers, the small group of customers who buy the most and care the most, feel like insiders without slowing the line down by a second.

Ask a group if they want to go get a burger and you get a shrug. Ask if they want In-N-Out and you get an answer.

So what does this mean for you?

If your competitor is beating you, the instinct is to out-execute them. Better product, tighter operations, sharper ads. Burger King did all three and won a fight that does not change its life. Fighting for number two in a weak category is not a strategy.

2. Reddit is the last unpaid room on the internet, and brands are showing up with a wallet.

Reddit is now the most cited website in AI answers. When ChatGPT tells you which running shoe to buy, it is largely reading Reddit.

Advertising revenue on Reddit hit $762 million last quarter, up 64%.

So a category appeared. Agencies now sell brands 35 to 100 Reddit comments a month for $2,500. For $4,500 they will get negative posts removed or replaced.

Which means brands have decided complaints are a mess to clean up.

An angry customer is an engaged customer. Hate is love in motion. Make one furious Superconsumer whole, meaning the small group of customers who buy the most and care the most, and you get your loudest evangelist for the price of a refund.

And when people complain about your brand, they are usually complaining about your whole category. Netflix exists because everyone hated Blockbuster’s late fees. Keurig exists because office coffee sat on a burner going bitter all morning. A thread full of complaints is a category design brief written for free by the exact people who would pay you to fix it.

So what does this mean for you?

You do not need $4,500 a month to plant comments about your business. You need an afternoon reading what people already say about your category and the nerve not to argue with them.

3. Mascots that celebrate brands will fizzle, but can work if they focus on customer outcomes.

Crocs just introduced Niles, a six-foot crocodile that hatched from an egg on social. Liberty Mutual ran six characters and 160 ad concepts through Jim Henson’s Creature Shop to land on Liberty Biberty, a yellow ball of fuzz.

System1, a firm that measures how ads actually perform, says brands quit on a new character after twelve to eighteen months, right before the compounding starts. A mascot gets more valuable the longer you run it, which makes the asset the calendar, not the character.

Which is why the two smartest moves here are not new characters at all. Crocs has had a grinning crocodile in its logo since 2002, so Niles arrives with 24 years of recognition already banked. Liberty Biberty is named after a line an actor flubbed in an older Liberty Mutual ad. Both companies skipped the wait by animating something people already knew.

The mascot ladder. A mascot can point at four things, and the higher it points, the longer it pays.

• Brand. The Aflac duck yells the company name at you. That is all it does.

• Product. Snap, Crackle and Pop are the sound of the cereal in the bowl.

• Category. Mr. Clean is what the entire cleaning category promises: strong, and it works.

• Outcome. The Energizer Bunny is the result you actually want, a battery that does not quit. The Doughboy did the same job and then spent a decade as a rubbery toy on your grandmother’s fridge.

So what does this mean for you?

Before you commission a character, ask whether you will still be running it in three years when nobody has noticed, and whether you already own something recognizable you could animate instead of starting at zero.

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. They come with the founding tier and they jam at 3am when you are the only one still thinking about this.

• Audit your triangle before you audit your marketing. Give the bots your last four quarters of wins and ask which corner each one lands in. If the category column comes back empty, you are Burger King with a better bun.

• Mine your complaints for the category, not the apology. Paste in your worst reviews and ask what category problem sits underneath them. Blockbuster’s late fees built Netflix.

• Ladder your mascot, logo, or tagline. Ask the bots to place it on brand, product, category, or outcome, then ask what moves it up a rung. Aflac’s duck has been on the bottom for 25 years.

Not a founding member yet? You can join here.

New episodes drop every Tuesday: three topics, thirty minutes, a couple of bongos.

Our Deep Dive Reports go deep on one company or one shift, with the category read and the call attached. Founding Members get each one start to finish the day it drops, and everyone else gets the preview. Read the Deep Dive Reports here.

Arrrrrrr,

Category Pirates 🏴‍☠️

Eddie Yoon

Christopher Lochhead

P.S. - Every story this week came down to the same move: find the problem before you go shopping for a solution.

The Category Design Academy is where you do that at the category level. You name the problem only you can name, then design the category around it, so you stop competing on terms somebody else set.

The next cohort starts in October. Apply now to save your seat before it sells out.

👉 Learn more about the Category Design Academy here.

Arrrrr! 🏴‍☠️ Welcome to a 🔒 founders-only edition 🔒 of Category Pirates. Each week, we share radically different ideas to help you design new and different categories. Founding subscribers can access the entire archive of 200+ mini-books and audiobooks. If you’re not a paid subscriber, hop aboard!

Subscribe now

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