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Are scooters still the next big thing? “The first thing you notice in San Diego’s historic Gaslamp Quarter is not the brick sidewalks, the rows of bars and the roving gaggles of bachelorette parties and conference-goers, or even the actual gas lamps. It’s the electric rental scooters. Hundreds are scattered around the sidewalks, clustered in newly painted corrals on the street and piled up in the gutters. In early July, one corner alone had 37. In the area around Mission Beach, one of the city’s main beaches, a single side of one block had 70. Most sat unused.
“Since scooter rental companies like Bird, Lime, Razor, Lyft and Uber-owned Jump moved into San Diego last year, inflating the city’s scooter population to as many as 40,000 by some estimates, the vehicles have led to injuries, deaths, lawsuits and vandals. Regulators and local activists have pushed back against them. One company has even started collecting the vehicles to help keep the sidewalks clear. ‘My constituents hate them pretty universally,’ said Barbara Bry, a San Diego City Council member.”
The commercial drone market bubble has burst with several startups shutting down: “Some of the biggest startups began closing their doors last year after burning through hundreds of millions in venture capital poured into a fledgling industry that, despite forecasts for explosive growth, is taking longer to mature than expected. Dozens of others are getting swept up in a consolidation wave as drone companies search for a profitable niche in a rapidly shifting marketplace. ‘There was some irrationality around drones, a period of hype driven by the popularity of the hobby sector,’ said Kay Wackwitz, founder and chief executive officer of research group Drone Industry Insights. ‘We’re getting past that and people are coming back to reality.’”
There are about 20 companies in the US that are in the business of producing sleepovers: “Trish Healy, the CEO of WonderTent, said the idea for the company came after she and her husband, Andy, adopted their daughter, Celia, three years ago through the Los Angeles foster system, when she was 12. On Celia’s Christmas list were two items: She wanted to be adopted, and she wanted to have her first-ever sleepover. ‘So I set about creating the most wonderful sleepover experience I could imagine, and in doing so, WonderTent Parties was born,’ Ms. Healy said. The company provides delivery, setup and styling of a choice of 15 themes, then collects the items the following day. ‘It’s an elevated experience, that’s really designed to get friends and families bonding together by sharing an experience that they’ll remember forever,’ Ms. Healy said, adding that WonderTent has furnished more than 5,000 parties throughout Southern California.”
Is the opportunity zone tax break really just a windfall for the wealthy? “The stated goal of the tax benefit—tucked into the Republicans’ 2017 tax-cut legislation—was to coax investors to pump cash into poor neighborhoods, known as opportunity zones, leading to new housing, businesses and jobs. … Instead, billions of untaxed investment profits are beginning to pour into high-end apartment buildings and hotels, storage facilities that employ only a handful of workers, and student housing in bustling college towns, among other projects. Many of the projects that will enjoy special tax status were underway long before the opportunity-zone provision was enacted. Financial institutions are boasting about the tax savings that await those who invest in real estate in affluent neighborhoods. …
“Some proponents of opportunity zones note that money is already flowing into downtrodden communities like Birmingham, Ala., and Erie, Pa. They argue that more funds will follow. And they note that because no data exists on where investments are being made, it is impossible to quantify the benefits going to the wealthy versus the poor. ‘The early wave, that’s not what you judge,’ said John Lettieri, president of the Economic Innovation Group, an organization that lobbied for the establishment of opportunity zones.”
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Board game inventors are financing their creations and connecting with retailers through crowdfunding: “Platforms like Kickstarter and Indiegogo give inventors the opportunity to introduce their creations to backers looking to fund new ventures. And retailers and toymakers are often waiting in the wings with their sights on the next big trend. Game Night in a Can had a successful Kickstarter campaign, raising $21,000. It is now sold in more than 100 mom-and-pop stores and by major companies like Urban Outfitters. …
“Crowdfunding sites are a key driver for inventors, said Adrienne Appell, a trends specialist at the Toy Association, a trade group. ‘It’s a lot easier for someone with an idea to be an entrepreneur,’ she said. ‘There’s a game for everybody.’ Tabletop games were the biggest subcategory on Kickstarter in 2018, when funders pledged $172 million, or 28 percent of the total amount promised on the platform, to a record 3,700 tabletop games, including board games. More than 60 percent of those were successfully funded, compared with the site’s overall average of 37 percent. So far this year, more than 2,500 tabletop projects have been introduced to the platform.”
The unemployment rate is so low, some cities and states are turning into “worker deserts”: “The ‘good news’ story of the strong labor market has a big downside that is playing out in places like Iowa, New Hampshire and Florida, where companies say they can’t keep up with business demand—hampering growth—unless they find more workers. Across the country, there are more than one million more jobs available than there are people to fill them. …
“A dramatic example of how far companies are willing to go to find new workers is Iowa-based Wells Enterprises, which makes Blue Bunny ice cream. It opened new facilities across the country for the sole purpose of finding employees—with mixed success. Mike Wells, who took over the family business 12 years ago, tells Axios he opened an office in Minneapolis to handle marketing and sales, but still couldn’t find workers. A year later, Wells Enterprises closed that office and built another in Chicago, where he was finally able to hire the right people for those roles. Wells tells Axios it’s just as challenging finding workers for those types of jobs as it is for its factory production lines.”
More employees are discussing their salaries with coworkers: “And 54 percent of workers (61 percent of men and 49 percent of women) say they swap salary information with coworkers, with workers aged 18 to 34 far more likely than their older counterparts to do so, according to the survey released Wednesday by the global staffing firm Robert Half. What’s more, 45 percent of those surveyed said they have used this information to their advantage. 28 percent of employees have leveraged that intel to ask for a pay raise, according to the survey, while 17 percent have used it during job-offer negotiations.”
If you think you are paying your employees more, you probably are: “Hourly earnings growth settled at 2.61 percent ($0.69) in August, and weekly hours worked showed positive growth for the first time in 2019. … ‘Small businesses are adapting to the challenges of the tight labor market by increasing hours and earnings,’ said Martin Mucci, Paychex president and CEO. ‘In August, we saw an increase in weekly hours worked, as well as higher hourly earnings growth compared to this time last year.’”
Amazon is testing a Whole Foods payment system that uses customer hands as ID: “The e-tailing giant’s engineers are quietly testing scanners that can identify an individual human hand as a way to ring up a store purchase, with the goal of rolling them out at its Whole Foods supermarket chain in the coming months, The Post has learned. Employees at Amazon’s New York offices are serving as guinea pigs for the biometric technology, using it at a handful of vending machines to buy such items as sodas, chips, granola bars and phone chargers, according to sources briefed on the plans.
“The high-tech sensors are different from fingerprint scanners found on devices like the iPhone and don’t require users to physically touch their hands to the scanning surface. Instead, they use computer vision and depth geometry to process and identify the shape and size of each hand they scan before charging a credit card on file. The system, code-named ‘Orville,’ will allow customers with Amazon Prime accounts to scan their hands at the store and link them to their credit or debit card.”
Casper Klynge is Denmark’s, and the world’s, first ambassador to Silicon Valley: “After Denmark determined that tech behemoths now have as much power as many governments—if not more—Mr. Klynge was sent to Silicon Valley. … He added, ‘These companies have moved from being companies with commercial interests to actually becoming de facto foreign policy actors.’ Silicon Valley companies and their leaders have given Mr. Klynge a mixed reception. He has never met with Mark Zuckerberg of Facebook or Sundar Pichai of Google or Timothy D. Cook of Apple.”
Walmart ended all handgun ammunition sales and its CEO asked customers to not walk into its locations openly armed: “[The company] will stop selling handgun ammunition and ‘short-barrel rifle ammunition,’ such as the .223 caliber and 5.56 caliber, that can also be used on assault-style weapons after selling all of its current inventory. Walmart will also stop selling handguns in Alaska, the only state where it still sells handguns. And Walmart will request that customers no longer openly carry guns into its 4,700 US stores, or its Sam’s Club stores, in states that allow open carry. … On Tuesday, [CEO Doug] McMillon said that Walmart’s changes to ammunition policies will reduce its market share from around 20 percent to between six percent and nine percent.”
OXFORD STRATEGIC ADVISORY DEAL OF THE DAY
Kabbage, an online lending platform that offers automated funding to small businesses has acquired Radius Intelligence, a marketing technology firm: “The deal underscores two bigger trends among startups that focus on enterprise customers. First, it points to ongoing consolidation in the world of marketing tech, in part as businesses look for ways to better compete against the likes of Microsoft and Salesforce, which are also continually building out their stacks of services. And we likely will see more activity from stronger fintech companies keen to expand their platforms to provide more touchpoints and revenue streams from existing customers, as well as more services to expand the customer base overall.”
Podcasting network Himalaya Media claimed it raised $100 million, but it never did: “General Atlantic never invested in Himalaya Media, according to a firm spokeswoman. Instead, it had previously invested an undisclosed amount in Ximalaya FM, the established Chinese podcasting platform that Himalaya also lists as an investor. … There is no SEC filing or other official public record of an investment into Himalaya. Himalaya CEO Yu Wang acknowledged to Axios that General Atlantic didn’t invest directly in his company, and said he removed the press release because ‘some of the language … was a little bit confusing.’ He also said the $100 million was a three-year commitment mostly from Ximalaya FM, of which Himalaya so far has received only around $10 million. … He volunteered to show Axios the equity commitment letter, which he claimed to have in front of him, so long as we didn’t publish it. We agreed. The letter never came.”
Bellwether Coffee, a provider of a ventless coffee roaster, raised an undisclosed amount of Series B funding.
OpenGov, a developer of a cloud-based software intended to help public sector budgeting and performance, raised $51 million in a Series D Round.
A new book, “Kochland,” makes details Charles Koch’s brilliance in transforming an obscure Wichita oil company into a $110 billion colossus: “The company’s phenomenal growth rested on three pillars. The first was culture: Charles was a thinker, a devotee of the Austrian free-market economists Friedrich Hayek and Ludwig von Mises, and in time he codified his philosophy into something he calls Market-Based Management, or MBM, which is drilled into every Koch employee. The unity of thought inside the company, some may sense, carries the faint whiff of a cult.
“The second pillar was market intelligence. Over time Charles would build a network of trading desks in Houston, Moscow, Geneva, Wichita and elsewhere that dealt in every imaginable commodity. While they were profitable, their real value lay in gathering intelligence on every market Koch was in or considered getting into. Leonard makes a persuasive case that a principal strength of Charles and his management team was their ability to analyze and act on this intelligence before their competitors could.
“But as Leonard also makes clear, the third and most important pillar underlying Koch’s growth was the simple fact that it was private, meaning it wasn’t beholden to masses of shareholders and their nattering demands for rising quarterly profits. This freed it in dozens of ways. Charles, for instance, not only stopped judging managers on their profits, he stopped most budgeting demands. Because he refrained from paying steep dividends, he reinvested 90 percent of Koch’s profits into the business, further fueling its ability to make acquisitions. This has taken Koch far afield from its origins in oil, into fertilizers, lumber, feed lots, even greeting cards.”
And that’s what’s ahead.