Morning Report

What you need to know one minute before daylight

Haute Hijabs, Tinder for Cows, and No More One-Way Trips to Mars

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Good Wednesday Morning,

DAYLIGHT  

Cue Ball, a Forbes Small Giant investment firm that takes an unusual approach to venture capital, has announced a seed investment in Haute Hijab, a direct-to-consumer fashion and lifestyle brand for Muslim women: Melanie Elturk and Ahmed Zedan “founded Haute Hijab because they realized that a dominant global hijab brand does not yet exist. Muslim women, who can wear up to four hijabs per day and commonly own up to 150, are currently resigned to purchasing commodity-level hijabs from street-corner purveyors around the world, or retrofitting scarves from fast-fashion retailers like H&M. While some major brands are beginning to offer hijabs within their existing lines, the true demand is for hijabs made, branded, and marketed by Muslims, for Muslims.”

STARTUPS

A UK startup has introduced a “Tinder-style app,” called Tudder, that lets farmers find breeding matches by viewing pictures of cattle with details of their age, location and owner: “Users hear a mooing sound as they swipe—right to show they’re interested or left to reject possible matches. Hectare, which designed the app, says it ‘seeks to unite sheepish farm animals with their soulmates.’ Selling animals using social media can speed up a process that often involves transporting animals long distances for breeding…

“Marcus Lampard, a farmer in Carmarthenshire in southwest Wales, has one pedigree beef shorthorn breeding bull listed on the app and says it’s a lot easier to sell livestock online. ‘Going to market is a nuisance,’ he said by telephone. ‘If I go to an open market with a bull, and then maybe bring it back, it shuts everything down on the farm for at least two weeks.’”

Silicon Valley startup Blend has made inroads in the real estate loan market by serving banks instead of competing with them. “The upside for customers of banks that use Blend’s software is faster access to cash: A process that typically takes five to eight weeks can get done in about three weeks, according to Blend CEO Nima Ghamsari. Their product is a digital portal that saves users the hassle of providing financial documents by sourcing information directly from payroll providers or the Internal Revenue Service, he said.”

Blend’s rise is timely. “Thanks to rising home values, Americans are sitting on a record $6 trillion that can be tapped through home equity loans or cash-out refinances, according to data provider Black Knight. Banks may focus on that segment while the purchase mortgage market slows because of rising interest rates and diminished affordability.”

PRICING

Public Goods is a direct-to-consumer household goods startup whose brand is no brand. With a $59 yearly membership, customers get access to personal care products, coffee, granola, etc. labeled simply “Coffee” or “Penne Pasta.” All without worrying about harmful ingredients or having to drive to Whole Foods. “Public Goods started ‘super scrappy,’ says [CEO Morgan] Hirsh, and began with a set collection of personal care products like paraben and sulfate-free soap…

“Because the company isn’t centered on one item, there are no real hero products. Public Goods boasts 107 SKUs, and about 10 of those compose 30 percent of all sales. ‘Once people buy into this membership model, they tend to want to purchase all of our products…without having to pay an arm and leg for it,’ says Hirsh.”

TAXES

The governor of California, Gavin Newsom, will propose a “digital dividend” aimed at big tech companies: “‘California’s consumers should also be able to share in the wealth that is created from their data,’ Newsom said. ‘And so I’ve asked my team to develop a proposal for a new data dividend for Californians, because we recognize that data has value and it belongs to you.’”

THE ECONOMY

A record seven million Americans are 90 days or more behind on their auto loan payments, the Federal Reserve Bank of New York reported Tuesday, even more than during the wake of the financial crisis. Economists warn that this is a red flag. Despite the strong economy and low unemployment rate, many Americans are struggling to pay their bills.”

The American spirits industry has joined the growing chorus of businesses and trade groups trying to get President Trump to back off his trade war: “Scott Harris, the founder of the Catoctin Creek distillery in Virginia, said on Tuesday that he had projected one-fourth of his company’s revenue to come from Europe last year. Because of the tariffs, sales there were scant and plans to expand were frozen. Now he fears that European customers will develop a taste for other spirits, such as German whiskey. ‘Once that market is gone, it’s hard to get back into it,’ Mr. Harris said. ‘We presently are treading water.’”

HUMAN RESOURCES

Somehow the ongoing black-face scandal seems to have spread from Virginia to a slew of consumer brands, including Gucci and Katy Perry Collections, which prompted Spike Lee to announce on Instagram last week that he would no longer wear Prada or Gucci “until they hire some black designers.” Good point: it’s hard to imagine these mistakes happening in a diverse work environment.

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CLIMATE

A tiny Swiss company thinks it can help stop climate change by removing carbon from the air and selling it to buyers like Coca-Cola (to make fizz): “Climeworks’s rooftop plant represents something new in the world: the first direct-air-capture venture in history seeking to sell CO₂ by the ton. When the company’s founders, Christoph Gebald and Jan Wurzbacher, began openly discussing their plans to build a business several years ago, they faced a deluge of skepticism.

“‘I would say nine out of 10 people reacted critically,’ Gebald told me. ‘The first thing they said was: This will never work technically. And finally in 2017 we convinced them it works technically, since we built the big plant in Hinwil. But once we convinced them that it works technically, they would say, Well, it will never work economically.’ For the moment, skeptics of Climeworks’s business plan are correct: The company is not turning a profit.”

FAILURE

The company that promised to send hundreds of people on a one-way trip to Mars has declared bankruptcy: “Mars One has long been embroiled in controversy over its dubious plan to send people to Mars, where they would supposedly live out the remainder of their lives. The company promised wannabe astronauts that it would send them to the Red Planet to start the first human settlement, but that it would not return them to Earth as it lacked the technology to get them off the planet. After receiving applications from people all over the world, Mars One selected 100 candidates who could potentially be the first to fly on the trip.”

GOING PUBLIC

Despite owning a combined stake of less than ten percent, the founders of Lyft plan to keep control after the company’s IPO: “The founders, John Zimmer and Logan Green, who serve as president and chief executive, respectively, are working with underwriters and lawyers on a plan to create a class of shares with extra votes that they will hold, people familiar with the matter said. Exact details are unclear, but the men would have significant influence over major decisions at the company, ranging from the election of directors to whether to sell one day.”

ZACK ELLER’S DEALS OF THE DAY

Amazon has agreed to purchase Eero, a company that makes mesh Wi-Fi routers routers that connect to smart home devices. Mesh Wi-Fi routers are designed to give better coverage in hard-to-reach areas. “A high-end Echo could double as a Wi-Fi hotspot, giving you increased coverage in every room you place one in.”

Peleton, the maker of the video-streaming stationary bike is expected to select its underwriters for an IPO this week. They will look to list their shares at the end of 2019. “Peloton is expected to seek a valuation in excess of roughly $4 billion.”

CANNABUSINESS

Luxury retailer Barney’s is opening a cannabis lifestyle and wellness shop in Beverly Hills called The High End: “The shop will open in Barneys’ Beverly Hills flagship store in March and is a partnership with Los Angeles-based cannabis company Beboe. The High End will sell accessories and lifestyle products including vaporizer pens and pastilles and CBD products. Select accessories will also be for sale on Barneys’ website.”

Medical marijuana company Trulieve based out of Florida signed a deal with Colorado-based Love’s Oven to sell edible weed products, even though it’s still illegal to sell those products in Florida. Even so, there are more than a dozen companies registered to sell retail in the sunshine state: “Trulieve is putting pressure on Florida rule makers over edible medical marijuana products, one of the most popular forms of the drug in other states where it is legalized…”

SOCIAL MEDIA

Reddit, a not-so-slick looking forum website where you can look up practically anything and find a forum discussion on it, has just raised $300 million at a $3 billion valuation: “Since Reddit was founded in 2005, it has drawn criticism and concerns over abuse, harassment and piracy on the platform. But [CEO Steve] Huffman said the company has invested in better technology to catch abuse and better tools for its users to report it. The tools are working, he said. Reddit has grown its appeal to advertisers with 330 million monthly active users, half of whom are between the ages of 18 and 24, a valuable, hard-to-reach demographic.”

EDITOR’S NOTE

Yesterday’s interview with William Vanderbloemen was conducted by Roya Rodieck.

SPOTLIGHT

Friend of the Oxford Center Jay Goltz will be Loren’s guest on Mind Your Business this week. Did you know that when you fire people, the tax percentage you pay to cover unemployment insurance increases? Just another reason to get better at hiring. Jay and Loren will discuss that and take your calls when the show airs Thursday at 1:00 p.m. ET on SiriusXM 132.

And that’s what’s ahead.

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

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