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Every day, New York City publishes a daily listing of million-dollar business opportunities: “The first issue of The City Record, on June 24, 1873, listed a procurement notice for a steamboat engine for the Department of Charities and Corrections. A more recent notice, from 2017, listed the purchase of $4,379,000 worth of condoms and lubrication packets as part of a city public health campaign. In between lies the vast history of the city and of The City Record, a bottomless trove of municipal minutiae and legally required announcements that calls itself the ‘Official Journal of the City of New York.’ While most New Yorkers have never read, or even heard of, this city-published paper, it is indispensable to many city officials and to those seeking city contracts.” NYC has an annual budget of $92 billion.
Rothy’s, a three-year-old startup that makes women’s flats from recycled plastic, claims more than $100 million in revenue: “In charting a way forward in textiles and manufacturing, both Rothy’s and Allbirds offer something valuable to fashion that the industry itself has repeatedly declined to pursue. For traditional fashion brands, which usually use third-party textiles and factories, designers have to start guessing what shoppers might want as much as a year in advance.
“Rothy’s says that its three-dimensional knitting process dramatically shrinks both the amount of material waste from manufacturing and the timeline between when the company places an order and when those shoes can be put up for sale. ‘If there’s something bananas that no one could have predicted, we’d rather not overproduce colors we have to bet on. It’s such a waste,’ says Erin Lowenberg, the Rothy’s creative director. Allbirds, for its part, uses wool and eucalyptus textiles for its sneakers, and it worked with a Brazilian chemical company to develop foam soles made from the waste of sugarcane processing. In conventional sneakers, that foam is made with fossil fuels.”
Venture funding for 3-D printing companies is on track for a record year: “So far this year, 3-D printing companies have attracted $400 million in venture funding, half the $800 million they had garnered in the entirety of last year, and surpassing the $300 million they’d attracted the year before that, according to the PitchBook analysis. If deal flow continued at that rate, it would cross the billion-dollar mark for the first time in five years, even before accounting for the [$300 million] Carbon deal.
“Three of the top 10 deals of the past five years have occurred in the first few months of this year, according to the PitchBook analysis: Metal 3-D printer maker Desktop Metal raised $160 million, reaching a valuation of $1.5 billion; Markforged, which makes 3-D printers for carbon and metal, raised $82 million, hitting a valuation of $820 million; and 3-D printing service provider Fast Radius brought in $48 million, reaching a valuation of $400 million.”
McDonald’s is targeting older workers: “The fast-food giant will post positions on AARP’s online job board as it tries to fill roughly 250,000 jobs over the summer. McDonald’s is also working with the AARP Foundation to launch a pilot program in five states that will help match lower-income older Americans with potential jobs.
“This isn’t the first time McDonald’s has targeted older workers. But while previous efforts have tended to be smaller, local campaigns, this marks the company’s first national effort to connect with a group that increasingly wants–and needs–to continue working into what were traditionally considered the retirement years.”
“How did you do this?” demands Gregg Popovich, at Sacramento restaurant Spataro Restaurant & Bar, where the NBA coach has taken the San Antonio Spurs for dinner: “‘This list has some of my favorite wines. Did you guys just have this? You’ve got to explain yourself.’
“[Restaurant general manager Jeremy] Threat explains himself. He explains how hours earlier, when he had learned that the Spurs might be coming in, he’d recalled a Wine Spectator magazine feature that had listed many of Pop’s favorite wines. He explains how he’d called a nearby friend who possesses a deep cellar, how his friend had hauled in about 120 bottles worth roughly $50,000 in total, how Threat had built the list that Pop now holds of 54 wines …
“Popovich is incredulous. ‘You’ve got to be kidding me. Really?’ Then he orders 10 bottles. … By the next morning, Threat’s life has changed forever. He just doesn’t know it yet. All he knows is that the corporate office of the restaurant group is on the line. ‘I think there’s an error in your computer,’ one of the owners tells Threat. ‘It shows you sold about $15,000 to $20,000 worth of wine at the end of the night, and you’re not even open then. You were closed. What happened?’”
Kara Swisher says that a $5 billion fine for Facebook is nothing but a parking ticket: “With $23 billion in cash on hand, Facebook will see a $5 billion fine as simply the cost of doing business. Needless to say, this is not how fines are supposed to work. Scott Galloway, a marketing professor at NYU and my co-host on the podcast Pivot, calls it the ‘algebra of deterrence,’ by which he means a price and a punishment that makes certain you will not do a bad thing again. Five billion dollars is not that price. ‘Put another zero on it and then we can start talking,’ said Mr. Galloway this week.
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Companies that appear on “Shark Tank” can get game-changing exposure, but they are also exposed to copycats: “Lani Lazzari, the founder of Simple Sugars, a skin-care line, has been battling with copycats on and off since she appeared on the reality-TV show in 2013. ‘Shark Tank has been such a positive thing for us,’ said Ms. Lazzari, who was 18 when she pitched the line of sugar scrubs she created to deal with her own eczema. ‘But any time you get that much visibility for something, people see it and there are negative things that happen.’
“Ms. Lazzari’s fledgling company, which had less than $100,000 in revenue in 2012, secured a $100,000 investment from Mr. Cuban for the business she had been financing on her mother’s credit cards. Simple Sugars took in $250,000 in orders the night the episode aired—and posted $1 million in sales in six weeks. The company also received 14,000 emails and thousands of calls from potential customers in just two days.
“Not all the attention was positive. About five weeks after the show aired, Ms. Lazzari got a call from a disgruntled customer who said she hadn’t received her order. When Ms. Lazzari dug further, she discovered that someone online was mimicking her brand—and even thanking customers for watching the ‘Shark Tank’ episode.”
New podcast network Luminary’s rollout hit a serious setback as several of its top creators pulled their shows after the network was exposed for hiding listener data. The list of exits includes Joe Rogan, Barstool Sports, and the NY Times show The Daily. “Their withdrawal comes after podcasters noticed that Luminary was serving shows to listeners through a complicated linking system, depriving them of important listener data … Using this method also meant that podcasters didn’t get accurate data on where their listeners were coming from and how many people were actually listening—which is vital information for understanding their audience and selling ads.”
LepinLand is a Chinese toy company that got raided for blatantly copying Lego blueprints. “Chinese authorities raided Lepin’s factory located in Shenzhen, China, last week after discovering it was allegedly manufacturing fake Lego products. The raid turned up $30 million worth of counterfeit Legos and police arrested four people, the BBC reported. … Foreign companies in China have long expressed dissatisfaction about intellectual property enforcement because of the prevalence of counterfeiting. The AFP reports the raid was a move by China to double down on intellectual property infringements, possibly in an attempt to ease trade tensions with Washington.”
ZACK AND GRANT’S DEAL OF THE DAY
Lion Dairy and Drinks, a producer of cheese and cheese-based products has been acquired by Saputo, a dairy company for $197.3 million, a 1.45x revenue multiple: “Saputo is one of the top 10 dairy processors in the world, the largest cheese manufacturer and the leading fluid milk and cream processor in Canada, the top dairy processor in Australia and the second largest in Argentina. In the United States, Saputo ranks among the top three cheese producers and is one of the largest producers of extended shelf-life and cultured dairy products.”
Slack is going public, but not with an initial public offering; instead it’s choosing a “direct listing,” where its shares just start trading on a stock market: “The price of its stock would then be set solely by demand from public-market investors. The process has none of the safeguards of a traditional IPO, since the company will not sell shares that could help guarantee trading liquidity. That poses the risk of Slack’s market capitalization falling below the $7.2 billion that it was valued at by private investors last year.
“The last major company to take this route was Spotify, which listed its shares last year. Like that music-streaming giant, Slack can do this kind of transaction because it does not need the money. The messaging service has taken advantage of the plentiful capital in private markets, amassing $1.2 billion in venture funding, half of it in the last two years.
“Slack’s chief executive, Stewart Butterfield, has reveled in the easy money available to his company. ‘It might be the best time for any kind of business in any industry to raise money for all of history, like since the time of the ancient Egyptians,’ he told The New Times.”
And that’s what’s ahead.