Upstream

Hi, today we explore: (1) Why the FTC is banning non-compete clauses, (2) Spotify’s record quarter and (3) Bank branch closures Hello! The bubble tea boom has seen at least 6 Chinese business owners become [boba-billionaires]( in the past few years. Today we're exploring: - Lost clause: The FTC just banned nearly all non-competes. - Upstream: Spotify shares soar after record quarter. - Withdrawals: Are banks still closing branches? Have feedback for us? Just hit reply — we'd love to hear from you! TOGETHER WITH Lost clause Yesterday, the US Federal Trade Commission voted 3-to-2 for a [near-total ban]( on non-compete agreements, the contract stipulations that prevent millions of employees — from bankers, to biochemists, to bartenders — from finding new work or starting businesses in their field after they leave their jobs. The new rule, coming almost 3 years after Biden signed an [executive order]( that encouraged limiting the agreements, will work to prevent the “unfair methods of competition” from keeping wages low, suppressing new ideas, and “robbing the American economy of dynamism”, according to FTC Chair Lina Khan. The FTC reports that non-competes affect nearly 1 in 5 American workers, with the regulator also estimating that the ban will raise the average employee’s annual earnings by $524 and create thousands of new startups. While the $524 average pay rise is a theoretical benefit for now, there is a substantial body of evidence that suggests moving jobs is a good way to get a pay bump. Data from the [Atlanta Fed]( reveals that, for much of the last 24 years, the employees who go, rather than stay, have typically seen larger pay rises within 12 months. The theory follows that reducing frictions in that switching process would lead to more competition for talent and, thus, rising wages. We had a deal Still, the anti-anti-competition measure has already drawn criticism from [industry groups]( that consider the move too drastic. The Chamber of Commerce, the largest business lobby in the US, plans to sue the regulator as early as today on the basis of the “dangerous precedent” that the ban sets for government involvement in business. [Read this on the web instead]( Record profits The world’s biggest music streaming platform posted one of its best financial quarters ever yesterday: Spotify’s gross profit hit €1bn (~$1.08bn) for the first time in the company’s 18-year history, as revenues jumped 20% and the company reported more than €800m in free cash flow for the last 12 months. Those headline figures sent shares up [more than]( 11% and impressed Spotify investors — who had once been growing weary of the streamer’s years-long struggle to turn a profit — but, not everything in the report was music to their ears. Its user count, for example, didn’t soar quite as much as expected, even with monthly actives rising 19% year-over-year and paid subscribers climbing a more gentle 14% in the same period. Let the music do the talking Co-founder and CEO Daniel Ek was quick to nod to the impact that December staff cuts, which saw ~1,500 workers lose their jobs, have had, telling investors that the layoffs disrupted day-to-day operations “[more than [they] anticipated](. However, another proposed round of price hikes could help keep profits healthy, with premium subscriptions set to rise by $1-2 in several markets this month, and in the US later [this year](. Whether all of Spotify’s 239 million paid subs will stick around through the rise, the second in as many years, is another question entirely. Ek and other execs will be hoping that the streamer's [continued global rollout]( of audiobook offerings, as well as its expanding range of [AI features]( will be enough to mollify cost-centric complainers. Go deeper: [Can streaming save the music industry?]( [Read this on the web instead]( [Sponsored by Pilot]( Start up advice from founders in the know As a founder, you’re in uncharted territory. You’re trying to do something new in the world without a playbook — and most people you talk to will give you vague platitudes that aren’t really actionable. In short, it’s mostly useless. There is one exception. Advice from other founders who have actually been there. [Pilot’]( virtual one-day conference, [Founder Tactics]( is a free event for founders to get practical insights and hard-won knowledge from seasoned operators, multi-time founders, and top-tier VCs. [Join on May 9th]( to hear from a panel of unicorn CEOs and start up experts, who’ll cover topics at the forefront of entrepreneurship and business development. No fluff — just focused advice from founders with flair. [Save your spot for Founder Tactics today]( Falling branches? Last week, JPMorgan [closed its historic branch]( at 45 Wall St., ending its 150-year stint on the iconic street where John Pierpont Morgan created the building blocks for what would become America’s largest bank. The departure not only exemplifies the gradual exodus of banks from Wall Street itself — once a necessary outpost for any global financial institution worth its salt — but also the wider trend of bank branch closures in cities that once thrived on footfall. After decades of near-constant expansion throughout the 20th century, America has been shutting commercial bank branches over the last ~10 years, losing some 13,000 since 2012, [per data]( from the Federal Deposit Insurance Corporation (FDIC). It’s not hard to guess why banks are shutting branches: most of our everyday banking needs are simply met online, with even the most cautious consumers now sending money using computers or phones. Interestingly, however, there are [some signs]( that the decline in branch numbers may be steadying. Data from S&P Global showed that bank branch closures had [slowed in 2023]( while the FDIC, which tracks the institutions that it insures, also saw that number stay roughly flat (+0.1%). Clearly, as anyone who has spent time with a banking chatbot can attest, some human interaction is still highly valued. Indeed, despite leaving Wall Street, JPMorgan is far from retreating from physical banking entirely: last year, JPM was a “net opener” of banks, and the company recently announced plans to open 500 [new branches]( by 2027. [Read this on the web instead]( More Data • Meet the TikStocks: the [companies that would be most affected]( by a wholesale TikTok ban. • Taylor Swift isn't just shattering [streaming records]( her album Tortured Poets Department sold 700,000 vinyl copies in just 3 days, setting a new weekly sales [record](. • Take pointers from the unicorns. Pilot’s [virtual one-day conference, Founder Tactics]( is a free event for founders to get industry advice plus VC guidance on thousands of investments. Hear from unicorn CEOs and start up experts behind Stripe, Carta and Lattice — [save your spot now]( • A Belgian man was acquitted of a DUI charge due to auto-brewery syndrome, a rare condition whereby the body produces its own [alcohol](. • Boeing posts $355m loss amidst [ongoing safety crisis](. *This is sponsored content. Hi-Viz • Browse this year's shortlist for the best [food photography](. Off the charts: Which luxury fashion brand, famous for its bags, belts and shoes, has seen its sales slip again? [Answer below.] [Answer here](. Thanks for stopping by! Have some [feedback](mailto:daily@chartr.co?subject=Feedback&body=Hi%2C%0A%0AI%20like%20the%20newsletters%2C%20but%20I%20had%20a%20thought%20for%20you...) or want to [sponsor]( this newsletter? Not a subscriber? Sign up for free below. 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