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How hot is the Midland-Odessa job market in West Texas, in the heart of the fracking boom? This hot: “In 2017, [Pete] McGarity spent about $25,000 to retrofit a trailer into a custom, mobile barbershop. That October, he drove it about an hour west to Pecos, Texas, and parked in front of the town’s only grocery store, hoping to catch oil field workers between shifts. It was an instant success…
“These days Mr. McGarity sends the trailer to Pecos, which is closer to the oilfields, six days a week with five barbers, who cut hair all day long. A cut costs as much as $40, more than the $25 he charged before the boom. There is usually a long waiting list, but patrons can cut the line if they pay $60, or $75 with a shave, a popular option with oil workers. ‘It is flooded with oilfield workers galore, and these guys tip well,’ he says.
“Mr. McGarity’s barbers are raking it in. Those who venture to Pecos can make anywhere from $130,000 to $180,000 per year, he said.”
Something changes when women pitch women for investment capital: “On a frigid evening in January, some 275 entrepreneurs filed into the SoHo outpost of The Wing, the women-only co-working club, for a women-only pitch night. They grabbed seats (pink folding chairs, mint settees, maroon couches) as well as sustenance (crudités, cheese, wine) ahead of the main event: Ten startups would present their business propositions to potential investors as well as those interested in learning from or working with them.
“The gathering was called Wingable, named for the club and Able Partners, a New York venture capital firm that had already put money into each of the 10 companies. The fund, which was started three years ago by Lisa Blau and Amanda Eilian, has been an early-stage investor in a number of female-founded companies, including The Wing and Goop…
“Able is not the only recently formed investment fund targeting women. In 2015, Arlan Hamilton, a once homeless music manager, created Backstage Capital, a $36 million venture capital fund dedicated to ‘underestimated founders’—women, people of color, the LGBTQ community. In 2014, Anu Duggal started Female Founders Fund, which she now runs with Sutian Dong, a venture capital fund that invests solely in women-founded startups.”
Amazon plans to launch a new grocery chain this year: “The new stores aren’t intended to compete directly with the more upscale Whole Foods stores and will offer a different variety of products, at a lower price point, these people said. Whole Foods doesn’t sell products with artificial flavors, colors, preservatives and sweeteners, among other quality standards…While Whole Foods has gradually expanded the big brands it carries—such as Honey-Nut Cheerios and Michelob beer—a conventional grocer can carry a much larger assortment of items.”
A survey from BRP’s Keeping Customers Happy report shows that it only takes one bad experience to turn customers away: “Customer loyalty is hard to win and easy to lose. One method of delivering a positive experience is by offering a personalized touch–that’s something 44 percent of survey respondents said would lead to them making repeat visits. And nearly twice that number (79 percent) indicated that personalized service from in-store personnel would influence their store choice going forward.”
Brands are giving endorsement deals to “kidfluencers,” young children on YouTube and Instagram: “Samia is now 4 and has 143,000 followers on Instagram and 203,000 subscribers on YouTube. Her feeds are mostly populated with posts of her posing and playing, but they also feature paid promotions for brands like Crayola and HomeStyle Harvest chicken nuggets…Now, advertisers like Walmart, Staples and Mattel are bankrolling lucrative endorsements deals for toddlers and tweens with large followings and their own verified profiles on YouTube and Instagram.
“As a result, children too young to make their own accounts on the platforms are being turned into tastemakers…[One] parent said brands might pay $10,000 to $15,000 for a promotional Instagram post while a sponsored YouTube video might earn $45,000. A 30 to 90-second shout-out in a longer video can cost advertisers between $15,000 and $25,000.”
The Wall Street Journal explains why President Trump’s tariffs have failed to reduce the trade deficit: “Over the past year, macroeconomic factors have overwhelmed any attempts to target specific trade deficits. Most powerfully, the combination of tax cuts and increased federal spending provided immense fiscal stimulus.
“The fiscal stimulus had two effects. First, it provided an abrupt jolt to US consumption. Companies imported more to satisfy the demand…Second, the fiscal boost to the US economy happened when much of the rest of the world was slowing. That contributed to an environment in which the Fed was raising interest rates and the dollar was strengthening. When the dollar is strong, it’s cheaper for Americans to import and more expensive for the rest of the world to buy US exports, widening the trade gap.”
ZACK ELLER’S DEALS OF THE DAY
Investar Holdings, a bank holding company, has completed the acquisition of a Texas bank, Mainland Bank, for $20 million. “Mainland has three locations in Texas City, Houston and Dickinson, which will be rebranded as Investar. Mainland was founded in 1944 and specializes in small-business banking. It had about $125 million in assets, $84 million in gross loans and $108 million in total deposits.”
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Lyft’s IPO filing revealed the depth of the company’s losses, and it suggests those losses will grow as it continues to expand: “Last year, the company’s revenue totaled $2.2 billion, while it lost $911.3 million.
“‘We have a history of net losses, and we may not be able to achieve or maintain profitability in the future,’ Lyft said in the filing, adding that it expects to spend more as it expands into new offerings and locations. Lyft did not disclose the market valuation it is seeking from public investors; it was last valued at $15.1 billion by private investors during a financing round in June.”
As the Uber-Lyft IPO race continues, both companies will offer their most active drivers bonuses to buy stock: “The move is the latest bid by Uber and Lyft to improve relations with drivers who have long contested their classification as independent contractors and what they have claimed are low wages and poor treatment by the companies. Both companies still face thousands of driver arbitration claims over their employment status.”
Even Silicon Valley is calling for more regulation of tech companies: “America’s own tech chiefs, including the Apple chief executive Tim Cook and executives from Facebook, Google and Microsoft, have lobbied for a comprehensive federal privacy law. Europe has enacted the world’s toughest rules on digital privacy with a sweeping law known as the General Data Protection Regulation.
“In a recent capitulation to the growing calls for a watchdog, the Federal Trade Commission announced Tuesday that it would create a task force to scrutinize tech giants. The FTC is also said to be considering a multibillion-dollar fine for Facebook over privacy violations.”
By the way, tech companies across the board are saying political differences can cause rifts in company culture: “Among those surveyed, 45 percent say that their company promotes a political agenda. That leaning tends to be toward the left, with 48 percent of respondents saying their company has a clear liberal agenda, as opposed to the 38 percent who reported a conservative agenda…Nearly half of employees at companies with political agendas said their ideological views impacted their ability to work. At companies perceived to have a political agenda, 63 percent of workers said that ridicule in the workplace is commonplace if you disagree with a colleague, while only 21 percent said that happens at their apolitical companies.”
Fur is coming back—coyote fur. Companies like Canada Goose use arcs of coyote fur to line its jackets. The price for the animal’s fur has increased to more than $100 per pelt: “Fur experts say the uptick in coyote demand began with Canada Goose parkas, with their distinctive Arctic Circle patch, a brand that went big in 2013 when model Kate Upton famously wore one over her bikini on the cover of the Sports Illustrated Swimsuit Issue. Over the years, more celebrities and their fashion-conscious followers began donning the parkas, which now can retail for more than $1,000 each.” Fun fact about coyotes, they are in abundance and occupy practically every major city in the US.
And that’s what’s ahead.