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Facebook’s data deals are under criminal investigation: “A grand jury in New York has subpoenaed records from at least two prominent makers of smartphones and other devices, according to two people who were familiar with the requests and who insisted on anonymity to discuss confidential legal matters. Both companies had entered into partnerships with Facebook, gaining broad access to the personal information of hundreds of millions of its users.”
And after yesterday’s outage, the social network may have to refund money to advertisers: “Facebook is undergoing one of its most widespread and persistent system outages, with users across the globe unable to access its social network and services from Instagram to Messenger for much of Wednesday, and into Thursday.
“From about noon New York time Wednesday, users encountered only partially loaded pages or no content at all, accompanied by a message saying an error had occurred. Several brand marketers tweeted that Facebook’s ad-buying system was down as well. The company said it was still investigating the overall impact, ‘including the possibility of refunds for advertisers.’”
A VC firm is partnering with historically black colleges to address the lack of diversity in Silicon Valley: “Unusual Ventures, a seed-stage investment firm, aims to change this with its new Unusual Interns program. Launching this summer, the program is designed to increase the number of black students working in technical internships by connecting students from HBCUs with high-growth Silicon Valley startups.
“Tech’s lack of diversity is often called a pipeline problem, but Silicon Valley’s passive attitude toward diverse recruitment is really to blame, says Megan Holston-Alexander, a senior associate at Unusual Ventures who helped create the internship program. ‘HBCU students are severely under-recruited,’ she says. ‘VCs and companies will say, Well, if the pitch deck of a black woman founder makes it to my desk, I’ll take a look at it.’”
When their investor bailed, Riawna Capri and Nikki Lee decided to open their hair salon anyway: “After settling on a lease, the women reached out to their investor to share the good news and take the next steps. ‘And we got no answer,’ Capri says. ‘We called his wife — no answer. This happened for days. Finally, she called us crying, saying, I’m so sorry, I’m so sorry.’
“Apparently, he’d lost a chunk of money gambling, and they had to back out of the deal. … We didn’t feel panicked because after working on our business plan and the financial statement, we knew we could make this work. Plus, there was a whole attic space on top that we figured we could sleep in if worse came to worse and we had to get rid of our apartments!” Now they have clients like Jennifer Lawrence and Selena Gomez.
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A brand-new “vertical retail palace”—don’t call it a mall—has opened at Hudson Yards, New York’s biggest, shiniest new multi-billion-dollar development: “At opening, the retail center will be 90 percent leased, with 100 stores and 25 restaurants, from fast-casual to fine dining, hoping to draw customers not only in but up to scale its gleaming heights. (A 35,000-square-foot ‘Spanish food experience’ by the chef José Andrés is just outside.)
“When the retail complex is fully open, Related projects that it will see 60,000 visitors per day. It has designed the center for frictionless ease, to float between floors with minimal effort, and slide from well-known brands to first-time bricks-and-mortar retailers plucked from the direct-to-consumer e-tail boom on its Floor of Discovery. Still, Mr. Himmel acknowledged, there is always the question: Will it work? …
“Vertical retail and indoor malls are ‘two things New York City has never embraced,’ said Arthur Maglio, the leader of the Faith Hope Consolo team at Douglas Elliman Real Estate, who had a few clients interested in Hudson Yards spaces. He cautioned, though, that Hudson Yards didn’t have a direct parallel to earlier attempts. ‘It’s really at the forefront of where malls are heading,’ he said. ‘On a macro level, the mall at Hudson Yards is pivotal for retail.’”
On ultra bargain site Wish, sweaters can cost $2, Apple Watch knockoffs $9 and Android smartphones $27—and yet, it has become the world’s most downloaded e-commerce app and is now the third-biggest e-commerce marketplace in the US by sales: “Globally, some 90 million people use it at least once a month. Taking a 15 percent cut of their purchases, Wish doubled its revenue last year, to $1.9 billion. As of its last fundraising round, it was valued at more than $8.7 billion, and [founder Peter] Szulczewski’s 18 percent stake makes him a billionaire. …”
Still, Wish is losing about $190 million annually. “A more existential problem: Lots of the stuff on Wish is trashy, shoddy, even fraudulent. There are hundreds of negative reviews for Wish on review sites like Trustpilot and HighYa. … But Szulczewski seems unfazed by the quality-control challenge, pointing out that sometimes customers themselves are the problem. ‘We sell 5 million contact lenses a year,’ he says. ‘Someone’s going to sleep in them.’”
Africa’s first tech unicorn has filed for an IPO: “E-commerce ventures, particularly in Nigeria, have captured the attention of VC investors looking to tap into Africa’s growing consumer markets. McKinsey & Company projects consumer spending on the continent to reach $2.1 trillion by 2025, with African e-commerce accounting for up to 10 percent of retail sales.
“Jumia has not yet turned a profit, but a snapshot of the company’s performance from shareholder Rocket Internet’s latest annual report shows an improving revenue profile. The company generated €93.8 million in revenues in 2017, up 11 percent from 2016, though its losses widened (with a negative EBITDA of €120 million).”
ZACK ELLER’S DEAL OF THE DAY
Singularity University, a community organization that helps leaders use technology to solve humanity’s challenges has acquired Uncommon Partners, a consulting and training firm.
Spotify has filed an antitrust complaint against Apple to EU regulators for anti-competitive moves to keep iPhone users on Apple’s own Apple Music app: “Central to Spotify’s complaint, filed to the European Commission on Monday, is what it says is a 30 percent fee Apple charges content-based service providers to use Apple’s in-app purchase system.”
A lake has formed in Death Valley: “McGucken was hoping to photograph Badwater Basin where he thought water might have also collected, but he couldn’t access the area due to flooding and stumbled upon the lake. ‘It’s a surreal feeling seeing so much water in the world’s driest place,’ said McGucken, who also writes books on physics. ‘There’s an irony even though I couldn’t get down to Badwater Basin. Overall, I think these shots are probably more unique.’”
Loren’s guest today on Mind Your Business will be Lou Mosca, chief operating officer of American Management Services and friend of the Oxford Center. Among on other things, they will discuss the 10 question “Sanity Test” Lou likes to give struggling business owners. We may even find out how Lou answers his own questions. The show airs on SiriusXM 132 today at 1 ET. Got a question or a comment? Call in at 844-942-7866.
And that’s what’s ahead.