Know. Grow. Exit.
Oxford Membership is not for everyone. It is an “in-the-trenches” membership for doers, not dreamers. If you are ready to scale your business and join other world-leading CEO entrepreneurs doing the same, apply for membership.
Get the Oxford Morning Report every day. Click here for a free subscription.
Why did meal-kit service Munchery fail? In a Chapter 11 filing, CEO James Beriker says part of the problem was “over-funding”—in other words, having too much money: “‘The company expanded too aggressively in its early years,’ the filing states. ‘The access to significant amounts of capital from leading Silicon Valley venture capital firms at high valuations and low-cost debt from banks and venture debt firms, combined with the perception that the on-demand food delivery market was expanding quickly and would be dominated by one or two brands—as Uber had dominated the ridesharing market—drove the company to aggressively invest in its business ahead of having a well-established and scalable business model.”
It’s never too early for a succession plan. Before his death last year, Ryan Frayne, a 35-year-old entrepreneur, handed control of his company to his wife and his best friend and told them they could keep it going or let it die with him: “In his mid-20s, before he was diagnosed with terminal pancreatic cancer, [Frayne] created Windcatcher, a mattress pad that fully inflated with just a few breaths. It landed him on Shark Tank in October 2015, where the celebrity investors fought each other for a chance to partner with him.
“Three years later, while dying and too weak to hold a pencil, he was still inventing: he conceptualized and described to family members an IV stand that could automatically plug itself into a wall to charge, eliminating the hassle a patient would face plugging it in or being tethered to a device with a cord.”
Feeling old? Chip Conley has a luxury retreat for you called Modern Elder: “It is aimed at workers in the digital economy—those who feel like software is speeding up while they are slowing down, no matter how old they really are. …
“Conley was surprised when he first realized his colleagues saw him as old. It was 2013, and he was 52. A longtime hotelier—he had founded the Joie de Vivre boutique hotel chain in 1987, and had a string of iconic properties to his name—he had taken a job at Airbnb, the San Francisco startup fast upending the hospitality industry.
“His younger co-workers, with their zippy metabolisms and surplus collagen, started referring to him as ‘the elder.’ Mr. Conley—who in his 20s started San Francisco’s best party motel and is a longtime Burning Man and local night-life fixture—was a little confused, but resigned himself to the idea. ‘We are all elders in the making,’ Mr. Conley said. ‘If you’re 40 years old and surrounded by 25-year-olds, you’re an elder.’”
Charles Baron thinks his startup can help family farmers compete with the massive oligopolies of Big Ag: “Baron is co-founder of Farmers Business Network, a five-year-old startup that says it can do for corn and soybean seed what Warby Parker has done for eyewear. …
“US farmers spent $22 billion on seeds last year, 35 percent more than they did in 2010, and that increase can’t be explained by additional acreage. The product is sold through local dealers or retailers—almost never online—and prices typically aren’t posted. … To keep prices down, Baron’s company is developing seed directly with plant breeders, cutting out a string of middlemen. Today, FBN’s non-GMO corn seed, sold under the brand name F2F Genetics Network, ships directly to farmers for $115 a bag, compared with an average price of $270 a bag for GMO seeds.”
A teenager from Idaho is putting a personal touch on fishing by hand-crafting every rod he sells, all out of his garage. Corbin Broner could sell up to $100,000 worth of his product by year’s end with a profit margin of about half. Broner says, “Everything is handmade, according to customer specifications.” We’ll see if we can get him in touch with Cliff, himself a spirited fisherman.
The Papa John’s saga may finally be over. Founder John Schnatter and the pizza giant, after months of bitterness following his stepping down as CEO because he used a racial slur on a conference call, have reached a settlement. “Schnatter said he would step down from the board by the company’s annual meeting, which is scheduled for April 30. In exchange, Schnatter will have a hand in picking a new director.
“Schnatter, who owns about 30 percent of the company, remains its largest shareholder. … [but] Papa John’s has also taken swift steps to distance itself from Schnatter in the public eye. It removed his image from marketing materials and launched a new ad campaign featuring a diverse panel of franchisees and employees. It also conducted an internal audit on diversity and mandated bias training for its workers.”
Scott Gottlieb, who went after tobacco companies selling flavored vape pens and allegedly marketing them to teens has resigned as head of the FDA. He banned the sale of vape pens in convenience stores: “And he leaned into the FDA’s ability to help spur a more competitive marketplace for drugs… He maintained the agency’s effort to clear away a backlog of generic drugs awaiting approval decisions and also prioritized complex generics, like a new EpiPen. His reputation as a competent, no-nonsense regulator, combined with near-constant outreach, made Gottlieb popular, even with Democrats.”
If you were forwarded this newsletter, click here for a free subscription.
WeWork has been buying into businesses that have more to do with CEO Adam Neumann’s personal interests—including surfing—than its core business of renting out shared office space. “At his direction, WeWork also has invested in a wave-pool maker and started an elementary school that began after Mr. Neumann and his wife, Rebekah, expressed concerns with finding schooling for their children… The expansions could help WeWork grow, but also can be a distraction; several former employees said that they had found the variety of investments confusing for a company trying to reshape the office sector.”
Maria Molland took over scandal-plagued Thinx, which sells period panties, and turned it into the fastest growing woman-led company of 2018: “‘What I found was that the unit economics were amazing, the business had really solid footing, the team was just amazing—completely passionate about the mission,’ she says. The company had an unusually small amount of outside investment, and had managed to grow itself to a projected $40 million in revenue the following year. Plus, it was profitable.”
Molland made attracting talent her top priority and sunk money into building an HR department, offering employee-friendly benefits, increasing pay and moving to a swankier headquarters. The bold moves paid off: “A year and a half later, Thinx has doubled in size, is expanding globally, and is searching for fresh funding to grow.”
China is stopping 1,600 Tesla Model 3’s from getting through customs because of “irregularities.” Most of the problem has to do with poor or incorrect labeling on certain car parts. “Tesla, which is aiming to increase sales in China, the world’s biggest market for autos, was set to begin deliveries of its cheapest car to customers in China this month. It appears that will now be delayed following the announcement, which came from Chinese customs authorities, Caixin said.”
ZACK ELLER’S DEALS OF THE DAY
Harley-Davidson purchased StaCyc, an electric powered push bike company. “Harley’s sales have declined in the United States as its core baby boomer audience ages and millennials are slow to purchases its motorcycles that can cost upwards of $28,000… Harley aims to deliver ‘a full range of electric products for a vast audience,’ Senior Vice President of marketing and brand Heather Malenshek said.”
Aaron Oil, an Alabama oil company, has been acquired by Tradebe Environmental Services, an Indiana based environmental services firm. Financial terms were not disclosed. “The acquisition expands Tradebe’s geographical reach in industrial and field services, used oil collection and recycling, petroleum (tank bottom) recycling and maritime services.”
Smart Tracking Technologies, an internet of things company has acquired Link AKC, a GPS-enabled dog collar for an undisclosed amount: “Following the acquisition, Smart Tracking Technologies will begin working on a host of improvements and updates to the product line, including eventually opening up the Link AKC platform for third-party developers through the creation of an SDK. The first update can be expected within 30 days.
Barstool Sports’s behavior after posting a comedian’s video on Twitter and not giving her credit serves as a lesson in handling intellectual property, especially on social media. The founder admits the company was “moronic” in handling the situation—but probably needs to take another look in the mirror.
The comedian Miel Bredouw filed a complaint with Twitter and “Barstool, a sports and culture blog that’s been described in reports as promoting sexual harassment and a trolling culture, responded by filing a counter-notice, and its in-house lawyer, Mark Marin, offered Bredouw a $50 gift card to Barstool’s online store to retract her complaint. Over the past three months, as Bredouw detailed on Twitter, the interactions escalated, with Barstool barraging her with hundreds of messages and raising its offer to $2,000. …
“‘Where Barstool went wrong is that when she refused to respond and it became clear she had no intention of speaking with us we should have ended it,’ Barstool’s founder, Dave Portnoy, told Business Insider in an email. ‘Unfortunately Barstool Sports has idiots in our company much like many other companies and those idiots acted like idiots.’” Who hired those idiots?
And that’s what’s ahead.