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Rich Habits Podcast
Apple's New AI Project, Sydney Sweeney Adding $1B to AE & Trump's Tech Dinner
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- [00:01]
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- [00:42]
Austin Hankwitz
Learn more at WhatsApp.com Xena.com presents the rich Habits Radar a new Friday episode of the Rich Habits Podcast where every Friday morning we're coming at you with the biggest headlines impacting you and your money. Austin My name is Austin Hankwitz and I'm joined by my co host Robert Kroke. The three things sitting at the top of our Rich Habits Radar this week include Trump hosting his Tech CEO dinner with Mark Zuckerberg, Tim Cook and Sam Altman last night in the Rose Garden, the US labor market showing some signs of weakness as jobless claims rise and payroll growth begins to slow and finally, American Eagle stock adding over $1 billion to its market cap3 thanks to Sydney Sweeney. And be sure to stick around until the end of this episode to find out who Amazon's satellite Internet company like Starlink, right? They've got one too, just signed a huge contract with. So Robert, let's dig into our first story.
- [01:39]
Robert Kroke
That's right. Last night, President Trump hosted a dinner for more than two dozen tech leaders in the business world, and the dinner took place in the newly renovated White House Rose Garden. And wow, it was a who's who of the tech giants.
- [01:53]
Austin Hankwitz
Guests included heavyweights like Apple's Tim Cook, Meadows, Mark Zuckerberg, Microsoft's Bill Gates and Satya Nandela. OpenAI's Sam Altman and Greg Brockman, Google founders Sergey Brin and Sundar Pinchai, Oracle's Safra Katz, Blue Origin's David Limp Microns, Sanjay Mahotra, Palantirs Sham Sam Carr and scale AIs Alexander Wang and Austin's 100% sure he said at least three of those names wrong.
- [02:24]
Robert Kroke
Yes, it was definitely a crazy, crazy event. And the dinner followed a White House Artificial Intelligence Education Task Force event chaired by first lady Melania Trump, signaling an initiative to promote AI education among K12 students and to showcase the administration's AI strategies.
- [02:44]
Austin Hankwitz
These high level discussions can shape regulatory policies, influence corporate strategy, foster these private Public partnerships. We've seen a lot more of this year under the Trump administration and establish the US Government's stance on this emerging technology that is artificial intelligence. Hoping to ensure that America remains the global leader in this landscape. So, Robert, we had a who's who's dinner last night. What's the big takeaway for people listening right now, especially as it relates to their own portfolios?
- [03:12]
Robert Kroke
Well, it's all over the headlines of everything that's happening in AI with the US Government. This dinner and the AI focused event was hosted by First Lady Melania Trump. And it highlighted the administration's push to shape AI policy and education directly with tech leaders and get everyone on board for the US Government's ongoing initiative to be the world leader in emerging technology, AI governance and domestic investment.
- [03:39]
Austin Hankwitz
Yeah, as we kind of take all those buzzwords and distill them down into real words, I think what's important to understand is that under David Sacks, you know, he's this AI crypto czar, he's done a great job of pulling together some of these people. It's obvious that Donald Trump now is pretty much saying, hey, AI is here to stay. Let me make sure I've got relationships with all these people. And then we also heard during last week's Rich Habits Radar, we talked about how in video's earnings, you know, they talked about navigating being able to sell to China, not sell to China. So I wonder if any discussions that took place last night at this dinner was very much trying to figure out everyone else's appetite for moving away from China as a, as a customer base and maybe doubling down on, on the United States.
- [04:23]
Robert Kroke
Ye, it could definitely hurt the AI stocks that we've grown to love like Palantir and Nvidia and Taiwan Semiconductor. But I think the hurt and the pain might be very short lived. And I think for the long term, this is a really smart, incredible move by our federal government and the Trump camp to make America great again when it's relative to manufacturing, especially AI and emerging technology. So we'll keep a close eye on it, share our thoughts with all of you each and every week. But I think it's definitely going in the right direction.
- [04:55]
Austin Hankwitz
And Elon Musk was not there. He was invited. He tweeted. Thanks for the invite. I'm not coming. He sound like a little representative, so that's interesting.
- [05:03]
Robert Kroke
Right?
- [05:03]
Austin Hankwitz
All right, next headline is the US labor market showing a little bit of weakness Though jobless claims rose more than expected in the week ending August 30th private sector hiring slowed sharply as we saw ADP report just 54,000 new jobs in the month of August, down from 106,000 new jobs in the month of July.
- [05:25]
Robert Kroke
And this marks the first, first time since the pandemic that the number of unemployed people exceeded the number of open positions. And that's a key, key metric. Economists cite President Trump's tariffs and strict immigration policies, particularly affecting hiring in construction and hospitality, as key drags on job growth. And what's happening with these metrics now?
- [05:47]
Austin Hankwitz
The slowdown has intensified the speculation that the Federal Reserve may cut interest rates. In their September 16 through 17 meeting, Jerome Powell has already mentioned rising labor market risk. I think the quote was something like, we believe the risk associated with the labor market is more important, right. Than the risk associated with inflation. So that has now caused the market to price in a 98 chance of at least a 25 basis point rate cut announced here in the next couple of weeks according to the CME Fed Watch tool. So why does this matter? What's going on behind the scenes and why you should care? Rising jobless claims and weaker hiring suggests that this post pandemic labor boom that we experienced is starting to cool down. A softer job market can drag on consumer spending which could absolutely impact the stock market. With unemployment rising, I think it's at 4.2% right now, up from like three and a half percent just like six to nine months ago. The Fed is now thinking, hey, do we pivot faster toward rate cuts? And as those rates do get cut, this has huge implications on borrowing costs. If it has to do with real estate, if has to do with, you know, growing a business with debt or whatever. That way stock valuations and risk appetite that these investors want to take on as it relates to deploying their capital. Knowing that the risk free rate, which is the federal funds rate, is now starting to come down a little bit.
- [07:07]
Robert Kroke
And recession odds for the next 12 months according to Goldman Sachs are still only at 10%. But those odds may change as more economic data like this is published. But just make sure don't have knee jerk reactions. Relax, chill out, we'll keep you up to date here and make sure you know what is happening behind the scenes and how it affects your money month after month.
- [07:29]
Austin Hankwitz
Now rounding us off with our last major headline here, Sydney Sweeney adding $1 billion in market cap to American Eagle stock. So the Sydney Sweeney has great jeans campaign which was designed to resonate with Gen Z and dudes very much sparked massive engagement on the Internet generated over 40 billion ad impressions and brought in more than 700,000 new customers.
- [07:55]
Robert Kroke
I love the campaign and what happened around it. And I would say say, you know, sparked engagement is an understatement. It ruffled so many feathers that just this campaign with a cute girl in jeans could cause so much disruption. And it's crazy how the economic turns of what happened with this happened. And for Q2 of 2025, American Eagle reported a profit increase of 15% year over year, more than doubling Wall Street's expectations. And revenue came in at around $1.3 billion, slightly higher than expected. So what a great campaign. It's going to go down in the history books for them especially and many others for how to do it right and get your money's worth. For sure.
- [08:42]
Austin Hankwitz
Yeah. The company also announced a $200 million share repurchase plan, shrinking their share count by 10%, which is pretty impactful. They also returned cash to shareholders through dividends totaling $21 million. Now, despite the upbeat results, American Eagle did flag some related headwinds during their earnings call. They're expecting $20 million of tariff headwinds to impact the bottom line in Q3 and up to 50 million to impact the bottom line in Q4. So, Robert, let's break down why this matters.
- [09:12]
Robert Kroke
Yeah, I think this campaign is a prime example of celebrity led marketing translating into tangible financial performance, driving engagement, sales, and new customer acquisition. While the great jeans jeans pun sparked controversy over alleged racial messaging, it ignited brand and definitely a ton of media attention. American Eagle managed to pivot the narrative into engagement in sales, adding more than $1 billion in market cap to their company just in that short amount of time.
- [09:44]
Austin Hankwitz
Yeah, well, that 1 billion came after they just blew away those earnings results. Stocks up 35% yesterday, which made their CEO, Jay Schlattenstein, I think is how you say his name. He owns 15 million shares of stock. Though yesterday's 35% increase in stock price increased his fortun from about 200 million to 275 million overnight. So that guy is happier than anyone about the controversy that came with that marketing campaign.
- [10:15]
Robert Kroke
Yeah, it definitely speaks volumes to our message here at the Rich Habits podcast of people not having knee jerk reactions to headlines, both good or bad, because this is a prime example of how people are so reactive to what's going on in the market when they're choosing their stocks or their investments in crypto or whatever they're doing. So I love this story. I love seeing a win, and I think it was just a really big headline when it comes to consumer brands and pop culture. So I think it's great that we covered it and just crazy. The numbers behind this campaign.
- [10:50]
Austin Hankwitz
Well, let's now jump into our rapid fire headlines. Robert and I. Every week we bring our own headlines that we think are interesting. And so I'm going to kick us off with Figma's earnings results causing Figma stock to drop dramatically. It's now down 55% since their IPO just a month ago. It seems like so everyone's favorite IPO of the year so far. Figma reported earnings earlier this week and things did not look that good. Yes, the revenue did come in at about a quarter billion for the quarter, growing by about 41%. But their forward guidance only suggested 33% growth next quarter, which is a meaningful deceleration. On the bright side, their net dollar retention rate remains high at 129%, which is best in class. But I think this is the greatest example of all time as it relates to understanding why you shouldn't jump in on an IPO just because it's hot and sexy and fun in the moment. Right? Their stock went from 33 to 140. Now it's back down to 55. Who knows what's going to happen next? The next headline I want to share is the World Knowledge Answers. Austin, what is that? That is the name of Apple's secret Siri project. So Apple is working on a new system dubbed internally as World Knowledge Answers that will be integrated into their Siri voice assistant. Apple's aiming to release the service described by some executives as this answer engine in the spring as part of a long delayed overhaul of Siri. We all hate using Siri. It sucks so bad I refuse to use it. The underlying technology enabling the new Siri could come in part from Alphabet, Apple's longtime partner in Internet search. The company's reached a formal agreement earlier this week for Apple to evaluate and test a Google developed AI model to help power the voice assistant. Finally, Apple is getting into the world of AI. I could not be more happy about it. They need to just take over as quick as they can. We all know that they've been lagging pretty hard on that and Alphabet just announced that they do not have to divest Google Chrome, which I think is now probably going to get tied into this whole equation, which could be pretty cool. Now finally, let's talk about Amazon's satellite Internet business and who they just signed as their first client. Amazon's satellite Internet business, which is a competitor of Starlink called Cooper, signed a massive deal with JetBlue to provide 25% of JetBlue's fleet within Air Wi Fi services starting in 2027. So Starlink, we know SpaceX's satellite Wi Fi company, they partnered with T Mobile and United Airlines keeping it here on airline companies tapping into those 8000 low orbit satellites. Thus far Cooper has only launched 100 of these satellites. So nowhere near the existing 8000 that Starlink has. But if we know anything about Amazon and I guess Blue Origin now, right? That's Jeff Bezos company. They want to do some space stuff. So be sure to keep your eyes open for more interesting Amazon satellite WI FI Internet business developments.
- [13:50]
Robert Kroke
Man, we are long overdue, Austin, to be able to get on a flight, switch to airplane mode. We get free Internet. It's easy to get. We don't have to worry about it. Every flight should have that. They have us captured for hours at a time. Just make the Internet easy. So hopefully this is a step forward to be able to make that happen on all flights.
- [14:11]
Austin Hankwitz
Yeah, no, I hope so. I know they're doing that with, with United right now. I, I just experienced it a couple weeks ago. I forget what flight I was on, but I was on a United flight. It's like hey, click this Starlink button and you get normal WI fi. It's free, it's fast, it's everything. It was like 200Mbps download super fast. All the streaming movie, everything was right there. So yes, I am the biggest believer in fast WI FI on airplanes. That is a problem. I will invest into 100%.
- [14:41]
Robert Kroke
It brings me back to one of the most terrifying two and a half hour flights. I was boarding a plane and XRP, this is back in 2017 hit an all time high. I had it teed up to sell I think 50,000 or 100,000 units at a huge gain. And I got on the plane and we take off and I'm loading on. And she said, sorry, the WI FI is down. By the time I landed, XRP was back down like 37 cents. I sold. But it just left so much money on the table. So fingers crossed. We need this to happen sooner than later for people like us that fly all the time. So let's get into my rapid fire, my top three. And that is Gold hits all time high. I've been shouting to the mountaintops for years to diversify with precious metals and bitcoin. And with the weakening dollar, gold has been crushing for months and months. Number two for me is this was a little bit scary is Delinquency Rates spike in Commercial Real Estate CMBS reported that delinquency rates on commercial real estate has spiked to a record high of 11.7% and this spike includes multifamily investments as well as so hang on to your hats because this will present many great opportunities for the buyers and investors out there, but also a lot of turbulence for those people that are over leveraged. So we'll, we'll keep a close eye on this, but I think it's a pretty crazy stat right now. Another one I wanted to touch on that I think is very relevant is the US Government revoked Taiwan Semiconductors waiver to produce chips in China for China. This is a bold move by the Trump camp and a huge setback for China in the AI race against the United States. And I think this could cause a little headwind for Taiwan Semiconductor in the short term, but I am definitely still bullish in the long term. The AI sector relies heavily on Taiwan Semiconductor, so we will keep a watchful eye on what happens next. I like this long term, even though currently the chips being utilized in China are older models and don't really compete with what we're doing here with Taiwan Semiconductor in the US and so I believe that leads the US to a stronger position in being the AI and chip powerhouse that they so desire, and I believe will happen.
- [16:58]
Austin Hankwitz
All right, here we go, ladies and gentlemen, my three headlines, Robert's three headlines, and then of course, the top three that are on our radar. Let's now wrap up the episode with some questions coming from you all. Remember, all of these questions have to do with being a small business owner. If that means you're making money on the side, if that means you actually own a business, whatever it might mean as it relates to building wealth via increasing your income. So our first question comes from Mandy. Mandy says, I'm currently exploring the idea of opening a small nursing home with a friend. I'm a registered nurse and she's a licensed nursing assistant with some business experience, although not in the United States. Our main goal is to build our business while also reducing our overall tax burden. I have two ideas. Idea number one is a small nursing home that we can operate ourselves with the help of one to two additional nurses. And our second idea is an infusion therapy center, though I understand that field may be more competitive, but lower upfront costs could be attractive to us. I'd loved your advice on a couple things. The first one is, do you think it's a good idea for me to open up a nursing home with my friend or should I go solo? The second is what financial risks or considerations should I be aware of when starting this kind of healthcare business? And then finally, I'm familiar with setting up an llc, licensing and some startup basics, but I don't know much about capital loans, taxes, anything like that. So I really appreciate your insight. Any suggestions you have are very much appreciated. Okay. So Mandy, Mandy, Mandy. Sounds like you are really excited about providing care for people if that is in the form of a nursing home or if in the form of infusion, which. Infusion therapy. When I think infusion therapy, there's obviously like medical infusion therapy, but there's also things that are like hangover related and different types of vitamins and things like that, which is what I think you might be alluding to here. So let's go down both, both alleys. The first one is the nursing home. Nursing homes. I don't know much about the logistics of opening a nursing home. However, if I were to go open a nursing home, I'm going to probably do three things. First, the first thing is I'm going to go find nursing homes in my area that are privately owned because nursing homes are very, they're very profitable business if you do things correctly, which is why private equity and publicly traded companies like tend to own them in bulk. But, but that doesn't mean that there are not still privately owned nursing homes. There was one here in Nashville I was going to put my dad in. It was completely privately owned and it was really cool. So if I were you, I would one, start by finding some privately owned nursing homes and seeing if you could just talk to the owner. Hey, I love what you're up to here. How did you get started? What's your story? Maybe there's some stuff written online about it, but in my experience, right. It comes down to like understanding again, one, how did you get started? But also two, and this kind of. Maybe Robert could talk toward this, the funding for it. Right. How do you go buy a commercial facility? How do you make sure that it's up to code? How did you make sure that, you know, you did the right sort of licenses and things as it relates to care for people, Because I'm sure there's a lot that goes into that. So that's the first thing that I would do is understand from a privately owned nursing home how they got started. The second thing I'd want to do is I would want to make sure that I'm going into this with a partner who understands the space already, and your friend might not be that partner. So if you can be like the head nurse, the person that provides the care, hires and trains the nurses. Right. Things of that nature, I think that's a really great way to start this business. Assuming you can find someone who could own the actual operation side, maybe they've done this before, they've worked at nursing homes. Maybe they are just super familiar with the space. Right. But someone that is a proven operator that has done this, that you can lean on, that can help take your business from 0 to 1. And then the third thing I would do is I'd make sure I do all my chat GPT research as it relates to getting licensed and the government and like, because I feel like nursing homes probably have a lot of licenses, government certificates, like, all that stuff needs to be, you know, up to snuff. Because if it's not, I mean, like, you know, you can't just start a hospital. You have to make sure that things are, you know, up to code and things of that nature. So same deal here. Make sure you're good, maybe even hire a lawyer to help you do that. Beyond just chat GPT. And those are the first three things I would do if I were in your shoes. Robert, what do you think about the situation and what from a loans and funding perspective, advice can you share for Mandy?
- [21:24]
Robert Kroke
Yeah, first and foremost, I want to unpack a little bit further on what you brought up. And I think the idea here, between the two, I would rather see Mandy do the nursing home. She's trained as a nurse, she's licensed as a nurse. She can find other nurses to work there. Because once you start on the road of opening as Fusion therapy, you put yourself in a situation where what happens if you hire somebody and they're not legitimate? What happens if they don't show up for work and you're not licensed in that field of expertise? Then all of a sudden, you can't control the narrative of your business. It's kind of like a money person opening a restaurant but doesn't know how to cook. If the chef quits and you take two, three weeks to find somebody to replace them, you're in a really difficult situation. So for me, the opinion would be do the nursing home because you can control it, you understand it, and you know the basis of how to run it correctly. I agree with you totally. Finding an operational partner that may or may not be a nurse is a fantastic idea. You can have all the customers in the world, but if you don't know how to operate it correctly, pay your taxes, make sure your licenses are good and all of that, you're going to find yourself in trouble. And then lastly, with the funding, I think this is a situation where it'd be pretty easy for you to go out and find an SBA loan, small business funding with a credit union or other ways like that that are pretty simple to be able to go out and find some initial funding. Or you could do a friends and family raise. I know that that that's a very popular way to get you started as well. And I don't think you need to go buy a building. You don't need to go crazy and go millions of dollars in debt. You could go find a facility, lease it, maybe get ti dollars, you know, from the the landlord to build it out for you. A lot of times they'll do that and roll it into the lease for you and that'll keep your costs down and your liability down as well. So I think it's a great idea. I would lean towards the nursing home because I think it's easier and with so much leaning towards the elderly in home care care and all of that, I just think nursing homes are a great business model.
- [23:26]
Austin Hankwitz
There we go. I appreciate you, Mandy. Taking care of old people is very noble. Our next question comes from Candace. Candice says, I run a boutique fitness studio. Our landlord just sent a renewal and it's got a 20% base rent hike plus higher CAM charges that weren't clearly spelled out before. I'm worried that if I sign this, I will be put to death by fees. Robert, what's your take on this one?
- [23:51]
Robert Kroke
Yeah, this is a tough one and we go through it all the time. And you know, it's just one of those situations where a lot of people signing their first or second lease, they're not aware of all the tricks that these people play in these leases with CAM charges and the like. I just went through it a couple weeks ago, did a 45 minute call about a food hall. We were going to take over the master lease. They spelled it all out in the lease and I was like, this sounds great. Send me over the documentation, make sure it's docusign. If every everything, you know, fits the snuff test, then we will go ahead and move forward with this. I get the lease two hours later and there's an addendum A with an $11,200 more in the master lease that they forgot to mention on the call. So you always have to be careful and in your situation it's a renewal. And that is why it's even harder for you. Because when you're trying to renegotiate date, you're kind of up against the wall, especially if it's a successful business and you want to stay at that location. So anyone thinking about signing a lease, make sure you understand and exactly as stated here, have caps on the CAM charge because people will try and inflate them. They'll try to make you pay more on everything, even though maybe they're not paying more on their insurance or their taxes or the utilities or whatever are built into your CAM charges. So make sure you understand that. But you are in a difficult situation because you can fight all you want and say, hey, this isn't a reasonable upcharge on the lease. 20% is egregious. We can agree to 5, but at 20% it just prices us out of this location. How do we make this work? But you are up against the wall legally because they can just say it doesn't work and they can boot you out at the end of your lease. So just anyone that is facing a commercial lease, make sure you have someone that's an expert, whether it's a real estate broker, your lawyer, or somebody that understands all of this, because this happens to people every single day when running their business. And a lot of times it ends up being futile for the future of the business because death by fees is real. Like if you think of a restaurant, I have a lot of experience in restaurants. You can go from, let's say you want your all in cost for your rent to be no more than 8% of sales. All of a sudden, if that bumps up by 20%, you're dead in the water because you don't have the margin to cover that. So I hope this helps. And anyone listening that's building a business or getting ready to lease a space, make sure you understand all the fine print and all of the upcharges in the totality of the price in the lease.
- [26:30]
Austin Hankwitz
So how would you encourage this person, Candace, to renegotiate their lease? I mean, you mentioned CAM charges, but yeah, how would, how would they go about renegotiating it and do they have any leverage that they could use or anything like that?
- [26:44]
Robert Kroke
Not really. I mean, if you're the landlord and let's say you have an a location and you know you can lease it to somebody else for 20% higher, as long as that landlord doesn't have a million dollar build out that he paid for, that doesn't work for another tenant that gives you leverage, but without that, you're kind of at the mercy of just spelling it out and saying, hey, hey, I can't pay 20% more. Can we agree to 5? I can't pay XYZ additional cam fees. Can we agree to a 5% incremental raise? There. Lock it in in the renewal if you do get your way and make sure you have many, many renewal clauses. So let's say if it's a three year lease, add three more three year leases on top of that at your discretion if you want to keep renewing. Because a lot of people forget that step as well. And it's very important with the assumption that your, your business is going to do well. You don't want to be getting kicked out right during when you're crushing it with your business and then have to move and start over.
- [27:42]
Austin Hankwitz
I like that. Yeah, that's a really tough place to be. I think if I were in your shoes, I would just say, okay, my fixed costs went up by 20%. How do I now attract enough customers to offset that? Where can I like, like having that abundance mindset, right? Where it's like, how do I find more money in my business? Do I offer merch? Do I have a new subscription? Like, like everything's going to get more expensive over time. Which is why we encourage people to be homeowners and not renters because rent goes up every year. But it's like, what can you do? How can you have this abundance mindset as a business owner to say, cool, how do I now offset this with more money? And sure, maybe that means how do I offset this by spending less, right? So finding it in the existing budget. But more than likely it's going to come from earning more money as a business owner.
- [28:28]
Robert Kroke
Yeah, it's a tough situation no matter what you do. And I hope this helps for anyone out there that's opening a small business or dealing with leases. I know, I deal with it all the time. You know, even on Parish Pizza last year, the building owner said to me, hey, you, you paid the wrong rent. In January there was a rent increase. And I'm like, where? Never was it in the lease, never was it in an email. There was, it was nowhere to be found. The prior tenant agreed to a rent increase January 2025. I didn't. And he didn't put that addendum in my lease. So he lost that battle. And that's why I always say the best paperwork always wins in the end trend. So just make sure you understand the Numbers.
- [29:06]
Austin Hankwitz
So our final question comes from Mike. Mike says a competitor launched with a brand that looks suspiciously close to ours. Colors, packaging, vibes, even taglines. We have a registered trademark for our name and logo, but not for our packaging. What is the practical sequence here? Do I, you know, build up some evidence, have a friendly outreach, then I give them a cease and desist, or do I just let it ride and out execute them? What is actually worth protecting trademarks, trade, dress copyrights versus what's not really worth spending money on with a lawyer? Robert?
- [29:40]
Robert Kroke
Yeah, this is all me and has been the trenches I've been in for decades. You are in a terrible position. I hate to say that. I have dealt with it forever and I just recently dealt with it during COVID When I launched sanitizer bracelets, I invented what I thought was a very protectable bracelet that held a half an ounce of sanitizer so people could wear it like a simple livestrong type silicone bracelet. And they always had emergency sanitizer on them. It was fantastic. Filed the trademark, filed everything I needed to file, everything was rolling. The patent was on its way and within six months of launch we had over 20 competitors with knockoffs. Didn't always look the same, didn't knock off our name or the logo particularly, but it was still problematic and it was a race to the bottom for us. So in your situation, I don't know the product, but it is very difficult. And I would start with a lawyer. I would get a lawyer that handles trademark and patent. Don't get a general practitioner, get a good trademark lawyer, show them everything and give them a comparison and say, is my case strong enough? Before you go file a bunch of cease and desist and spend thousands and ten thousands of dollars. If he says he or she says yes, then you move forward. Start with the cease and desist, say, hey, you knocked me off, you did this. We have the trademark. We have the common law trademark. We were first to market. You have to stop or make these changes or you're going to have to pay us a licensing fee moving forward because at the end of the day you can't just ignore it and out market them and do a better job in most instances because it just cuts into your total addressable market. Too much and it can be erased to the bottom and cause you to abandon in what was once a profitable product. Same thing with me with sanitizer bracelets. We had so many problems making money because all these knockoff companies did not care. The hundreds and hundreds of hours and thousands of dollars I spent to develop this product. They just knocked it off because they knew it was a good idea. Same thing with Silly Bands. We did over $200 million in sales in the first big run with Silly Bands. And after a year we probably had 30 knockoffs. And the big lesson for anyone that I learned on that is when you're launching a brand to the market by every URL associated with the final name you choose. So that way, if people do knock you off, they can't get any good URLs for their website name or their brand name that are associated with the name close to yours. That is the number one hack I can tell anyone out there that is building a brand name brand because that way it'll protect you. And I learned a very hard lesson with Silly Bands by not doing that.
- [32:24]
Austin Hankwitz
And so what is worth, in your opinion, protecting versus not the legal spend?
- [32:29]
Robert Kroke
I think the trademark's already protected. If you have the trademark, you're protected. You can go just after the trademark as far as the trade dress and the copyrights. Again, that could be second and third. You didn't trademark the packaging. That was a mistake on your part. Art. Same thing with Silly Bands. We did a design patent on what we called the pillow pack for Silly bands. And thank goodness we did that because a design patent right now costs about 500 to to file and pay for. And it made all the difference in the world in my court battles with the knockoffs because if they use the pillow pack and the same trade dress, the colorway of the logo, et cetera, et cetera, it just really shows the courts they meant to knock you off and had no problem doing so. Show. So that is it. You start where you think is the best, what the lawyers say by meeting with a lawyer and going through all of that and then go from there based on what the lawyer's findings are of how strong of a case they believe you have.
- [33:29]
Austin Hankwitz
That makes perfect sense to me. Everyone, thank you so much for tuning into this week's episode of the Rich Habits Radar. We hope that you enjoyed it. If you have any feedback to provide, please leave us a comment below. Also, be sure to participate in the poll. We want to know if you've used Starland. Think on an airplane like myself. Go say yes. Go say no. Just scroll down this episode in Spotify. Do the little poll results. That's going to be fun. Yeah. Leave us a comment. Let us know what you liked, what you didn't like, anything about any feedback of these episodes. We're always trying to make these better week over week. And we're so excited to see what these episodes turn into in a year from now.
- [34:03]
Robert Kroke
Yeah, I love it. And just make sure one of the things you can do to support us the most is like Follow give us that 5 star review share the newsletter with a Friend we believe we have one of the best newsletters in the country and everyone needs help in their investing, their businesses, structure, mindset, and we are here to provide as much valuable information as we can. And that all starts with you, the people following along, telling us what you desire, telling us what's missing and what we can do to be better. So thank you all for joining and stopping by each and every week.
- [34:35]
Austin Hankwitz
Thanks everyone and we'll see you on Monday. Sam.