Happy Bacteria, Moving to Canada, and a Surprisingly Strong US Economy

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DAYLIGHT  

The US economy grew at a stronger pace in the first quarter than economists expected: “GDP expanded by 3.2 percent in the first quarter, the Bureau of Economic Analysis said. Economists polled by Dow Jones expected the US economy had grown by 2.5 percent in the first quarter. It was also the first time since 2013 that first-quarter GDP topped 3 percent. Disposable personal income increased by 3 percent, while prices increased by 1.3 percent when excluding food and energy. Overall prices climbed by 0.8 percent in the first quarter.  

“Friday’s data was the first look at how the economy fared during the longest government shutdown in history. The federal government ceased operations for 35 days between late December and Jan. 25 amid a standoff between the Trump administration and congressional leaders over funding for a wall along the US-Mexico border.”

HUMAN RESOURCES

If you need one, here’s another reason to invest in your people: “In one recent study that analyzed 1,200 US employees’ perceptions of the future of work, it was found that a lack of ‘skills gap understanding’ by employers can result in mass droves of employees exiting, stage left. More to the point, according to the new ‘Future of Work and Employee Learning’ report from Sitel Group, a customer experience management company, the findings underscore the severity of the problem in one clear sentence: ‘Thirty-seven percent of current employees say they would leave their current job/employer if they were not offered training to learn new skills.’ So here we are again, coming to another realization of the growing need for organizations to invest in their people through training and development.”

REGULATION

The US Chamber of Commerce is rethinking its approach to regulation: “Several dues-paying companies have balked as the Chamber endorsed fewer and fewer Democrats over the past several election cycles. The GOP’s drift toward protectionism, nativism and isolationism since Donald Trump took over the party in 2016 is also at odds with the Chamber’s longtime support for expanding free trade, growing legal immigration and investing in infrastructure.”

Salad chain Sweetgreen has decided it will take your money: “The move came on the heels of Amazon Go’s confirmation this month that it, too, would begin taking cash. Critics say cashless stores discriminate against people without access to bank accounts or credit cards, or who simply prefer to pay with cash. Some have also raised concerns about privacy and data security. Philadelphia and the state of New Jersey passed laws banning cashless stores last month, and New York, San Francisco, Chicago and Washington are considering similar bills.”

STARTUPS

The world’s biggest germ-killing brands are now pouring money into startups that sell you germs: “AOBiome’s cosmetics branch, Mother Dirt, already counts tens of thousands of customers for its products, including the spray Whitlock developed from his bacterial elixir; they’re sold online, at natural beauty and food retailers, at Whole Foods Market stores in the UK, and, starting in June, in the US. Several of Whitlock’s early investors are so enthusiastic about AOBiome that they’ve adopted his hygiene habits. ‘I haven’t used soap or shampoo or antiperspirant or deodorant or toothpaste or mouthwash in five or six years,’ says entrepreneur and venture capitalist Lenny Barshack. …

“Even corporations that built brands dedicated to killing bacteria are investing in microbiome research and startups, sometimes on the sly. In 2016 the Clorox Co., maker of microbe-annihilating Clorox Bleach, acquired Renew Life Formulas Inc., which sells prebiotic and probiotic supplements. This January, Unilever Ventures Ltd., the conglomerate’s investment arm, took a minority stake in Gallinée, a tiny London-based startup whose slogan is ‘Happy skin needs happy bacteria.’”

Israeli startup Aqwind wants to add algae to the water treatment process to solve global thirst and prepare for a water-rationing future: “Aqwind reduced the energy requirement in water treatment by 70 percent to 90 percent, it explains. Not only that: the algae system is a net generator of energy. The system also produces methane, which can be used for power generation, explains [CEO and founder Udi] Leshem, adding that existing wastewater treatment plants can be retrofitted to use the Aquanos algal system. The Aqwind system only uses about 50 percent of the electricity needed by the most efficient treatment plants; compared with inefficient ones, it saves around 90 percent, Leshem says—making it suitable for low-income countries.”

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CANADA

Students, immigrants, and companies are going to Canada in record numbers: “The Trump administration has made it more difficult for international students to stay or work in America and new international student enrollment at US universities declined over 6 percent in the 2017/2018 academic year, while Canadian universities are attracting international students at record levels. The number of international students in Canada increased 16 percent in 2018, after rising 20 percent in 2017.”

“It’s not just international students choosing Canada. ‘Sixty-three percent of employers surveyed in the Envoy study are increasing their presence in Canada, either by sending more workers there or by hiring foreign nationals there,’ reported the technology news outlet Recode. ‘More than half of those did both. Another 65 percent of hiring professionals said Canada’s immigration policies are more favorable to US employers than US policies. Of those surveyed, 38 percent are thinking about expanding to Canada, while 21 percent already have at least one office there.’”

BEVERAGES

With more breweries opening up across North America and wine gaining in popularity as a drink of choice amongst Millennials, Magic Hat is looking to have the best of both worlds: “This spring, Magic Hat will roll out a liquid Hail Mary–a ‘grape ale,’ half beer, half wine–that the company hopes will help it transcend categories and redefine itself with a demographic that will soon make up over 50 percent of all alcohol buyers.

“On a typical night out, [Mark Hegedus, Magic Hat general manager,] says Millennials are more likely than older generations to drink spirits, wine, and beer. ‘They are into exploration, they want to be surprised, they’re willing to try everything.’ … according to Nielsen data, 61 percent of Millennials don’t look for any particular brand when planning an alcohol purchase, versus 52 percent of boomers, who do.”

VENTURE CAPITAL

Laurene Powell Jobs has quietly become a force in venture capital: “Started more than a decade ago, Emerson Collective may be the strangest entity in Silicon Valley: part charitable foundation, part venture capital firm, operating in near-total secrecy, despite being run by one of the most famous women in business. Like the philanthropic arm of Mark Zuckerberg, Emerson is a limited liability company. LLCs aren’t subject to the same reporting rules as nonprofits and can more easily invest in for-profit companies.

“Emerson does that—putting money into companies that it says fit within the parameters of its philanthropic mission—with some success. The early investment in Pinterest paid off with last week’s initial public offering, which valued the company at about $12.8 billion. Earlier this year, two other investments, podcaster Gimlet Media and phone repair company iCracked, sold to larger companies for undisclosed prices.”   

RETAIL

Kohl’s may be looking for more ways to partner with Amazon beyond taking customer returns for the e-commerce giant: “CEO Michelle Gass believed that joining with Amazon could help attract younger shoppers to its stores. Gass and her team hoped that when customers returned their Amazon orders, they would stick around after and shop the store. … Some analysts believe that Kohl’s could go further with Amazon, including bringing new Amazon concepts to its stores, such as Amazon Go, Amazon Books, or Amazon 4-Star. Kohl’s could even lease out store space to Whole Foods. Kohl’s is experimenting with shrinking the size of some stores, and it has partnered with Aldi and Planet Fitness to open up several supermarkets and gyms next to Kohl’s.”

PRICING

Luminary is trying to be the “Netflix of podcasts,” touting big names like Russell Brand and Trevor Noah. The new podcast network also runs on an ad-free platform for the baseline fee of $7.99 a month, but will it hold its own against networks like Spotify? “Along with a network of exclusives, Luminary also offers free access to hundreds of existing shows and a recommendation algorithm. Unfortunately for listeners who dream of having just one podcast app on their phones, some key shows are missing. The New York Times has thus far declined to license galactic hit The Daily, and Spotify is withholding Gimlet Media shows like Reply All, along with those from Anchor or its other acquisition, Parcast. But Luminary is banking on its premium offerings being strong enough to be a draw on their own.”

ZACK AND GRANT’S DEAL OF THE DAY

ESO, an electronic medical records software company has acquired eCore Software, a scheduling platform for emergency services and fire departments. “Austin-based ESO said the purchase of eCore Software extends the breadth of ESO’s product portfolio.”

ENTERTAINMENT

Today, the most successful film franchise of all time releases its final installment with Marvel’s “The Avengers: Endgame.” Fans all over the world will flood multiplexes, and AMC is having 17 of its theaters run around-the-clock showtimes for four straight days: “‘With a desire to satisfy as many Marvel fans as possible on Thursday and through the weekend, AMC’s programming team is reviewing ticket sales theater by theater and adding showtimes later and later. In fact, there are multiple AMC locations that will be operating around the clock from Thursday night through Sunday,’ Elizabeth Frank, AMC executive VP of worldwide programming, said Monday in a statement.”

And that’s what’s ahead.

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

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