Weight Watchers is looking a little anaemic, anorexic even
Not that we are an investment advice column here but:
WeightWatchers faces bankruptcy as dieters turn to jabs
The company has struggled in the face of popular weight-loss drugs such as Wegovy
We do take this to be a part of how the whole capitalism, markets, technological cycle works. We have some reasonable solution to a perceived human need or want. Businesses start up to provide that solution. Then some utter, utter, invents a new and better solution to that need or want. All the people punting the previous version vanish from the scene as the new takes over.
As we say this is not investment advice. But as John Hempton pointed out about Herbalife, what is it that the diet companies are, or were, selling? It wasn’t little protein shakes, nor diet lists at all. It was the social support. As with the insight of Muhammand Yunus at Grameen Bank. The poor have no assets therefore cannot gain access to asset backed borrowing. But the poor do have an asset - their social network and status within it. Use that to be the security for the loan - most notably by insisting that the rest of the social circle cannot get a loan until the first one is repaid - and voila, we have created security that can be lent against. So with the diet companies. The creation, the sale, is of that social network boosting adherence to the attempt to diet.
Then, of course, some utter, utter, Dane comes along and allows dieting by the drug producing the desire not to eat, not the effort and social circle.
Well, OK. But this is how the technological cycle works. Slowly perhaps, but surely, we climb from partial solutions to better to each of the problems or desires we face. This does though mean the death of those old ways of only partially solving said desire and or want. That’s just the way it all works.
The point is more than just trite though. Apparently we still need to get it through to those advocating trams in a world of autonomous cars. Those who insist upon blast furnaces in a world of scrap steel recycling. Those who - well, you get the picture, that vast army of people insisting that we can never allow the old technology to die off because, well, we can’t, you know. Fortunately the buggy whip makers all did go bust before this idea gained credence….
Tim Worstall