AI Summary
5 min readIn 2024, a summer lettuce shortage at Taco Bell caused its weekly transactions to drop by about 40 percent—from 1.5 million to roughly 850,000. The company ran a marketing campaign built around $1 menu items. The following week, transactions surged to 2.8 million, nearly double the original baseline. That kind of real-time signal—a 40 percent drop followed by a 100 percent rebound—is invisible in quarterly earnings reports. Derek Brown, founder and CEO of American Spend, is building a system to close that gap.
The gap in how we measure the economy
Brown spent 12 years building financial infrastructure at Atapara and LinkedIn. The problem he identified is not that the existing data is wrong, but that it arrives too slowly. GDP is reported quarterly, inflation data monthly, corporate earnings four times a year. Meanwhile, the economy generates about 120 million transactions per day. "The same attention that has been paid to capital markets has not been paid to consumer spending, even though it's $20 trillion a year," Brown says. His core argument is that the speed of markets has not kept up with the speed of the world. Information now moves faster than the financial system can absorb it—markets close at 4 p.m., are dark on weekends, and rely on quarterly snapshots. That lag creates a blind spot for everyone outside large hedge funds.
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What you'll learn
- 1 (01:00) **Introducing Derek Brown & The Problem** - The hosts welcome Derek Brown, founder of American Spend, and set up the core problem: GDP is reported quarterly and inflation monthly, but the economy generates 120 million transactions daily.
- 2 (03:41) **Why Monthly/Quarterly Data Is No Longer Enough** - Derek argues that the world moves too fast for quarterly earnings or monthly CPI reports to be useful for modern decision-making.
- 3 (05:10) **Defining the "Spend Graph"** - Derek explains the fundamental concept of the Spend Graph: a model of the American economy built from transaction data, not corporate structure.
- 4 (09:47) **How the Data Is Actually Collected** - Derek explains the mechanics of data sourcing and the importance of including the unbanked population.
- 5 (12:30) **Raw Data vs. A Verified Model** - The hosts press Derek on the critical distinction between having data and having a usable, verified model of the economy.
- 6 (15:06) **Real-World Alpha: The Taco Bell "Lettucegate" Case Study** - Derek provides a concrete example of how an investor could use this data to gain an edge, using the summer's lettuce shortage at Taco Bell.
- 7 (17:37) **The K-Shaped Economy & The Middle Class** - Derek shifts from micro to macro, revealing a surprising trend in consumer spending regarding the K-shaped economy.
+ Full timestamped outline available in the app
Guests on this episode
Show Notes
Robert and Austin sit down were Derek Brown, CEO of American Spend, to learn more about transaction data.
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💳 To learn more about American Spend, click here!
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