A New Forbes Small Giant, The Future of the Tomato, and ‘Shark Tank’ Redemption

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DAYLIGHT  

The 2019 list of Forbes Small Giants is out, and one of the honorees is Charleston, SC-based Oxford member The Indigo Road: “Steve Palmer began his group of 20 restaurants in the Southeast ten years ago, and after his fifth successful opening he started worrying about how to ensure growth in a high-failure industry. ‘I wanted my management team to drill down on how to better identify people,’ he says. The company now looks for new hires with drive, a work ethic, curiosity and a collaborative spirit. He finds it crucial that he disrupt the traditional work-hard-party-hard restaurant culture, so in 2017 he helped launch Ben’s Friends, which hosts addiction support groups for restaurant workers: ‘We spend every night taking care of customers,’ he says. ‘We are just now figuring out how to take care of each other.’”

RETAIL

That new mall tenant just might be your office: “The Westside Pavilion redevelopment is one of the latest examples of a nationwide trend in commercial real estate: the conversion of malls into office space. Offices are less risky than retailers, and in some cases, they can generate foot traffic for the mall’s remaining stores and restaurants. The biggest beneficiaries of the conversions are co-working enterprises, like WeWork, which provide shared workspaces primarily to entrepreneurs, freelancers and start-ups.”

HUMAN RESOURCES

In an opinion letter, the Labor Department ruled a gig-economy company’s workers were contractors, not employees: “The move signals the Trump administration’s approach to the way gig companies, a growing share of the economy, must treat their workforce. As companies like Uber and Lyft begin to sell shares to the public, industry officials estimate that requiring them to classify their workers as employees would raise their labor costs by 20 to 30 percent. …

“Kathleen M. Anderson, a partner at the law firm Barnes & Thornburg, who represents employers in misclassification cases, agreed that the department appeared to have broader policy ambitions in devising its letter. ‘This doesn’t read like a normal opinion letter,’ Ms. Anderson said. ‘You go back historically to most opinion letters and they are short, defined, with multiple disclaimers. This is expansive—it’s back to the basics, applicable to numerous situations.’”

TAXES

A QuickBooks survey found that most self-employed business owners, or solopreneurs, are not doing a good job managing their taxes: More than 80 percent say they aren’t worried about being audited by the IRS. And yet, 73 percent say they have deducted an expense that they believe they shouldn’t have. And 23 percent say they search on Google to find out if something is deductibleor else they just rely on their gut instincts. On top of that, 45 percent say they use a personal account to make business purchases, and 66 percent say use a business account to make personal purchases. Whether they want to or not, some of these solopreneurs are likely to remain solopreneurs.

SUSTAINABILITY

Revolution Bag is recycling Chipotle’s trash: “Last year, Revolution quietly began a pilot program with Chipotle to collect used gloves from a handful of restaurants and melt them down to create bags. Traditional recycling facilities can’t process polyethylene gloves, so they’re usually thrown out and end up in landfills. For Chipotle, that comes out to a staggering 375 million gloves per year across all its locations. …

“Dave Rives, Revolution’s president, says he hopes that all of Chipotle’s restaurants in the western US—about 500 of the chain’s more than 2,000 US eateries—participate in the program by the end of this year. ‘If we got every glove Chipotle used for 10 years, it would probably take us about five days to clean and process them,’ he says. ‘From our side, we’re ready to roll.’”

Brad Gates is trying to ensure a future for the tomato: “Mr. Gates has been organically farming tomatoes in the region for 25 years, working on small leased plots and introducing new varieties with cult followings, like the dark, meaty Black Beauty and the striped, rosy-pink Dragon’s Eye. For most of that time, he sold his tomatoes to top restaurants, including Chez Panisse in Berkeley.

“But a few years ago he completely rethought his work. Galvanized by climate change, he joined a growing number of farmers who are trying to find a future for their threatened crops … Mr. Gates now grows thousands of tomato plants each year, selling the young ones to local shops and the seeds all over the country through his website and catalogs, encouraging people to grow their own at home. He believes that the tomato’s survival and continued deliciousness depend on the plant’s diversity, and he considers breeding hardy, cold-tolerant and heat-tolerant varieties an essential part of his work—not just to provide food, but also to expand the number of places where the plant can flourish.”

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ZACK AND GRANT’S DEAL OF THE DAY

Cheddar, a business news streaming network has been acquired by Altice USA, a cable operator for $200 million or 6.67x revenue. ”The acquisition will bring Altice News, which includes broadcasting properties News 12 and i24NEWS, further into the live streaming fray. Meanwhile, it helps Cheddar reach a hyper-local audience, and scale Cheddar’s ad inventory.”

SOCIAL MEDIA

Here’s yet another attempt to explain what exactly TikTok is and why brands are experimenting with the youth-heavy platform: “‘We can reach a younger target group via creative storytelling with TikTok,’ said Felix Loesner, head of social media at Bayern Munich, which launched its profile on the app earlier this month. Since the launch, the page has gained 75,000 fans from 11 posts. Those posts have been viewed over 4 million times and have attracted 400 likes.

“With marketing on the app in its infancy, there’s less competition for early adopters and that means it can be a cheaper alternative to established platforms like Snapchat and Instagram for the likes of Bayern Munich. … Brands including Red Bull, Nike and Coca-Cola have taken a similar approach, with each verifying their profiles on the app.

“TikTok says it’s a platform where you as a brand have to let influencers do their own thing; otherwise, the content won’t have the connection you’re trying for,’ said Zanna Wharfe, senior strategist at We Are Social. ‘Two years ago, brands were treating influencers as traditional advertising talent; whereas now, we’re seeing the ones we work with adopt a more collaborative approach, which means looking at what that talent is doing on a platform like TikTok as opposed to just being drawn to the follower count.’”

RETAIL

Walmart recently launched internal startup Intelligent Retail Lab (IRL), demonstrating its vision for the future of brick-and-mortar. Unlike Amazon Go’s cashierless stores, it’s all about inventory. “The IRL store has 1,500 cameras hanging from the ceiling to ensure that when you walk up to the meat section, there’s in stock. ‘If you have really good inventory, it leads to a better-managed store,’ says [IRL CEO Mike] Hanrahan. …

“Inventory is notoriously hard for retail stores to track without literally scanning the barcode of every item in the store, Hanrahan explains. AI-infused cameras can automate the job. That tiny function of tracking meat, Hanrahan explains, can have a huge impact on Walmart’s bottom line and the customer experience. Because if you go to Walmart to get chicken breasts, and they’re all gone, you will leave without them. Walmart loses a sale.”

MANAGEMENT

After being told he’d given the “worst pitch ever” on “Shark Tank,” Jason Woods dared come back onto the show to pitch the same product (the Kymera Body Board, basically a jet ski and boogie board combined):  “‘You’re not an entrepreneur, you’re a want-to-preneur,’ shark Mark Cuban told him back then. ‘In 10 years you couldn’t figure out how to go get a product and sell it. Find someone else to run the business, but it’s not going to be me.’

“‘As you may remember, my last lap around the tank didn’t go so well,” Woods said in a painful trip down memory lane. Standing sheepishly in front of the sharks, Woods and his company were in a much better place than they were five years ago. He took Cuban’s advice and partnered with Adam Majewski, who runs day-to-day operations.

“Majewski had seen Woods on ‘Shark Tank’ and called him while the episode was airing. The two hashed out an agreement and turned Kymera into a company that’s sold $350,000 for the year to date, as of the episode’s taping, with a projected $2 million in annual sales. Woods also developed prototypes for an electric kayak and surfboard to be introduced later.” On the show, Robert Herjavec offered Woods $500,000 for 10 percent of the company, and Woods accepted.

CREDIT

The Apple card is trying to change the way we use money: “The perks here aren’t revolutionary. Apple gives card-owners two percent cash back when they use their iPhone to pay, or one percent cash back when they swipe the physical card, built not from plastic but from titanium. Purchases at Apple stores earn three percent cash back. Sure! Fine.

“But don’t be fooled. What Apple is really doing is, as [Deserve CEO Kaldesh] Kapadia says, upending the user experience. Those cash back rewards? They show up the next day, in the Daily Cash app, makes spending money feel like a fun game. You reach customer service through Messages. You can see where a particular charge was made in Apple Maps. Spending summaries show up in beautiful, color-coded graphs, and you use an aesthetically pleasing wheel to decide how much of your balance you want to pay down. It’s all very soothing and makes the act of spending money feel fun, even productive.”

And that’s what’s ahead.

Please send comments and suggestions to mattg@oxfordcenter.com and lfeldman@oxfordcenter.com.

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