Evading the China Tariffs, Repurposing Parking Garages, and a Buzzy Startup Tries to Fix Email

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TRADE

Companies are finding ways to evade President Trump’s China tariffs: “Billions of dollars worth of China-made goods subject to tariffs by the Trump administration in its trade fight with Beijing are dodging the China levies by entering the US via other countries in Asia, especially Vietnam, according to trade data and overseas officials. The Trump administration has for more than a year sought to weed out the practice known as transshipment, in which Chinese exports typically are minimally processed or altered during a brief stop in a third port and then re-exported as a product originating from the third port. Such circumvention threatens to crimp US plans as it prepares to add tariffs on to $300 billion of Chinese exports, from toys to electronics, essentially covering all its China trade.”

STARTUPS

Superhuman is betting that people will pay $30 a month to check their email: “A few months ago, I started hearing about something called Superhuman. It’s an invitation-only service that costs $30 a month and promises ‘the fastest email experience ever made.’ Marc Andreessen, the influential venture capitalist, reportedly swore by it, as did tech bigwigs like Patrick and John Collison, the founders of Stripe. The app was rumored to have a waiting list of more than 100,000 people. ‘We have the who’s who of Silicon Valley at this point,’ Superhuman’s founder, Rahul Vohra, told me in an interview. …

“Some of the app’s features—such as ones that let users undo sending, track when their emails are opened and automatically pull up a contact’s LinkedIn profile—are available in other third-party email plug-ins. But there are bells and whistles that I hadn’t seen before. Like ‘instant intro,’ which moves the sender of an introductory email to bcc, saving you from having to manually re-enter that person’s address. Or the scheduling feature, which sees that you’re typing ‘next Tuesday’ and automatically pulls up your calendar for that day. These features will appeal most to power users who spend most of their day typing on a laptop or desktop.”

A Y-combinator company, Squire has raised $8 million to build management software for barber shops: “Squire has a tiered business model that ranges from $30 per month to $250 per month, depending on the size and needs of the barbershop. The most basic plan includes features like booking capabilities and reports while the complete plan features all of that plus a custom app, support for multiple locations, loyalty rewards and a wait list. Squire initially didn’t charge barbershops, but quickly realized shops were willing to pay for what it was offering.

“‘In talking to customers, we realized there was a lot of opportunity to build value in a backend management system,’ Squire co-founder Songe LaRon told TechCrunch. ‘And when we started working on those features, they would often expect to pay something. When we said it was free, they were actually a bit skeptical.’”

With car ownership dropping and ride-sharing driving the number of no-car households, some urban startups are exploring ways to repurpose underground parking garages: “In Los Angeles, CloudKitchens is transforming underground parking lots into shared commercial kitchens. These delivery-only sites lower the point of entry for new chefs by giving them shared access to cheap real estate in locations near their customers. ‘There are over $10 trillion in these real estate assets,’ tweeted Travis Kalanick, CloudKitchens CEO and former CEO of Uber, ‘that will need to be repurposed for the digital era in the coming years.’

“In downtown Chicago, the real-estate firm JLL is converting a parking garage beneath Millennium Park into a last-mile logistics facility to replenish the stock of stores downtown and deliver e-commerce orders to customers. ‘Despite its fantastic location, it is actually somewhat under capacity from a parking perspective,’ says JLL managing director Keith Stauber. ‘Because of that, we have to consider how we can maximize revenues for the garage and City of Chicago while also utilizing it to its full potential.’”

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MARKETING 

A Ford dealership in Alabama came up with the a July Fourth sale promotion that went viral: “Chatom Ford, a dealership in Chatom, Alabama, is running a ‘God, Guns and Freedom’ promotion that promises a Bible, a 12-gauge shotgun and an American flag to anyone who buys a car between the start of the promotion and July 31. The dealership released a Facebook video that features Koby Palmer, a general sales manager, talking about the promotion. It’s been viewed nearly 14,000 times as of Tuesday night. … 

“With a laugh, Palmer was quick to mention that the dealership wasn’t just ‘handing out shotguns in Alabama.’ When you purchase a car, you get the Bible and the flag. You’re also given a certificate that can be taken to a certified firearms dealer in town or to one in Mississippi that has partnered with the dealership. … ‘It’s been running for three business days and we sold five cars. In a small town, business is booming,’ Palmer said.”

THE ECONOMY

Small business owners say they’re headed into the next potential recession with their eyes wide open: In a survey of 500 companies in a variety of industries, Kabbage found that “80 percent of American entrepreneurs said they felt confident in their readiness to weather another economic crisis. … Every small business owner polled said they expected a slowdown in the future.

“In preparation, officials said entrepreneurs have begun increasing their cash flow in a number of ways to squirrel away funds for when things get tight. … 33 percent of respondents said they’ve been actively ‘growing their customer base, securing more contracts or expanding sales.’ Additionally, 21 percent said they were launching new products or services, while 13 percent said they were pursuing business partnerships to sell to a larger customer base. … 8 percent said they planned on reducing operational expenses to save more money in the long run.”

OXFORD STRATEGIC ADVISORY DEAL OF THE DAY

Aerohive Networks, a designer and developer of enterprise Wi-Fi solutions, was acquired by Extreme Networks, a provider of network infrastructure equipment, for $272 million. The company was sold for 1.76x revenue.

E-COMMERCE

Online retailers like Thredup use fake messages to capitalize on consumer fear of missing out: “The fake messages are an example of ‘dark patterns,’ devious online techniques that manipulate users into doing things they might not otherwise choose to. They are the digital version of timeworn tactics used to influence consumer behavior, like impulse purchases placed near cash registers, or bait-and-switch ads for used cars. … The number of sites the researchers [in a Princeton study] found using dark patterns underestimates the techniques’ overall prevalence online, said Arunesh Mathur, a Princeton doctoral student and an author of the paper. … 

“More than 160 retail sites used a tactic called ‘confirmshaming’ that requires users to click a button that says something like, No thanks! I’d rather join the ‘Pay Full Price for Things’ club if they want to avoid signing up or buying something. More than two dozen sites used confusing messages when encouraging users to sign up for emails and other services. On a New Balance athletic apparel site, for instance, the first part of one message suggested that a user could check a box to receive emails, but on closer reading, the opposite was true. ‘We’d love to send you emails with offers and new products,’ it said, ‘but if you do not wish to receive these updates, please tick this box.’”

ENERGY

With more coal plants shutting down, natural gas could be the next go-to for American energy: “A rush to build gas-fired plants, even though they emit only half as much carbon pollution as coal, has the potential to lock in decades of new fossil-fuel use right as scientists say emissions need to fall drastically by midcentury to avert the worst impacts of global warming. ‘Gas infrastructure that’s built today is going to be with us for 30 years,’ said Daniel Cohan [of Rice University]. … Since 2005, most power companies have lowered their carbon dioxide emissions significantly, in large part by shifting from coal to gas. Coal plants have become uncompetitive with other kinds of energy generation in much of the country, despite the Trump administration’s efforts to save them by rolling back federal pollution regulations.”

VENTURE CAPITAL

3Box, a developer of a platform that builds cloud storage for developers, raised $2.5 million in Seed Funding.

Spiffy, a developer of a mobile application created to provide on-demand car care service anywhere raised, $9.5 in a Series A Round.

DayTwo, a developer of a microbiome-health management platform that offers personalized nutrition insights, raised $31 million in a Series B Round.

CULTURE

John’s Crazy Socks co-founder John Cronin is the first person with Down syndrome to win the Entrepreneur of the Year (New York) award: “He said he went into the business because he wanted to work with his father, Mark, who appeared on the show with him. ‘I wanted to make crazy socks.’ According to its website, earned $1.7 million in revenue in its first full year in business, and expanded to $5.5 million in revenue in its second year. ‘It’s not just the selling part,’ his father added about their mission. ‘We are showing the world what we can do.’”

REGULATION

One brewer wants to introduce the spirits industry to the global direct-to-consumer trend through a regulatory loophole: “Any wine-based spirit with under 24 percent alcohol is regulated like a wine, and therefore isn’t bound to the three-tier distribution system (comprised of producers, distributors and retailers) that limits how spirits are sold. Because of its makeup, Haus can be sold online, and it can also open its own physical stores down the road, neither of which traditional spirits brands can do. 

‘You see this approach by some restaurants without full liquor licenses, but no one’s taken advantage of this loophole on the internet,’ said [co-founder Elena] Hambrecht. ‘I could see how completely out of date the alcohol industry was, especially as startup founders were creating new products and figuring out new ways to distribute them and update branding. That wasn’t existent in alcohol because such regulations don’t allow for much innovation.’”

And that’s what’s ahead.

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

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