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Jeff Warren, CEO of ride-share app Migo, will be my guest on Mind Your Business today. We’ll talk about how the startup wants to do for mobility what Kayak did for travel, offering one app that provides all of your transportation options, including ride-share services, traditional taxis, scooters, bikes, and even public transit. I met Jeff recently at SXSW where he represented Migo in a pitch competition. Unfortunately, his lead investor missed the session because he fell off his electric scooter and had to go to the hospital. Should be an interesting conversation. The show airs at 1:00 p.m. ET, at 10:00 a.m. PT on SiriusXM 132. As always, call with questions: 844-942-7866. — Loren
Instagram’s new Checkout feature, which lets users buy products without leaving the app, may succeed in a way Amazon hasn’t: “A recent study from Feedvisor found that 74 percent of online shoppers in the US go straight to Amazon when they are ready to buy a specific product. But Amazon has repeatedly failed at becoming a destination for discovery shopping—or the kind of shopping common in physical retail where you might uncover something you didn’t need but now covet. That type of shopping is one that many Americans still consider a form of entertainment, and one that still makes up a large chunk of total commerce transactions in the country today.”
And yet, direct-to-consumer brands may have good reason not to love Instagram’s new feature: “‘The downsides [of Checkout] include losing the customer behavior info that Instagram won’t share with us, and the chance for customers to browse around other products on our sites, as well as a fee that will likely not be negotiable or more competitive than our existing e-commerce one,’ Vadim Grinberg, VP of consumer growth and insight for DTC handbag brand Dagne Dover said when asked what he thought about a feature like Instagram Checkout….
“When it comes to Facebook and Instagram, many of these DTC companies are between a rock and a hard place—there likely won’t be enough DTC brands to have leverage over Facebook to say, change the cut of each fee it takes. But, for many of them Instagram remains their most valuable referral channel—which means that given the option, they don’t have the choice to not enable checkout.”
Making its first foray into e-commerce, Square is challenging Shopify: “Square Online Store offers merchants the option to sell through their own digital storefronts. It boasts functionality similar to that of competitors like Shopify, while at the same time connecting merchants to social platforms and aggregator marketplaces, where online shopping often begins. …
“For Square, this e-commerce solution comes just in time—if not late to the game. The San Francisco-based company first made its mark on the payments industry by successfully courting offline micro-merchants, a segment that most point-of-sale players had ignored. But the industry’s future lives online, and competition for e-commerce transactions has grown increasingly fierce. In the fourth quarter of 2018, e-commerce comprised roughly 10 percent of Square’s gross payment volume, driven by products like invoicing. Visa and MasterCard, in contrast, have said that e-commerce’s share of their volumes is closer to 20 percent.”
Philadelphia is trying to attract immigrant entrepreneurs. For one thing, there’s the Philadelphia Immigrant Innovation Hub, which offers co-working and education space from an old post office building: “More than 175 immigrants from dozens of countries have completed its free, six-week entrepreneurship program. Graduates have launched in-home healthcare services, apps, food businesses, and photography studios.”
But Philadelphia also offers the opportunity to build a business in a place where things are a little cheaper and the stakes are a little lower: “‘I think there is something really beautiful about having this be here and not in New York,’ says [restaurateur Michael] Solomonov, born 40 years ago in Israel, whose cuisine he perfects and personalizes with the gusto of Glenn Gould interpreting Bach. He’s been in the US since he was 16, and in Philadelphia since 2001. ‘It is so much easier to live here. Philadelphia gave us a chance to f*ck up without going under.’”
Openpath is an access control software that allows employees to unlock any door in an office space through a smartphone: “When asked about their primary concerns with regards to office access control, the number one priority respondents gave was security. This is interesting, considering that more than one-third of all employees have loaned out their access credential to someone else and nearly one in every three people do not feel safe at work. Nearly half of respondents misplace their credentials once a month, with a quarter doing so at least once a week!”
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Starbucks has created a $100 million fund to invest in food startups: “Starbucks announced a $100 million investment in a new venture fund with Valor Equity Partners, which has previously invested in Tesla and SpaceX. The fund will give the coffee giant the first look at food and retail start-ups. …
“Investing in startups has become increasingly popular in the last few years among other food companies adjusting to changing consumer tastes, an issue that Starbucks is trying to address as less customers sip its calorie-heavy Frappucinos. Struggling food giant Kraft Heinz launched its own fund in October, following the example of Big Food rivals Campbell Soup, Kellogg and General Mills. The fund plans to raise an additional $300 million from outside investors in the coming months.”
Meal kit providers are moving into retail which creates a whole new batch of challenges: “ ‘The process of creating, say, 10 retail SKUs at high volumes week after week is very different than the process of creating six different direct-to-consumer recipes, and changing those over on a weekly basis.’ [says Sean Butler, managing director at supply chain consultancy LIDD] … Then comes the issue of merchandising and getting shoppers to take it off the shelf. At Plated, the meal kit company acquired by Albertsons in 2017, the company switched to transparent containers for its in-store merchandising, for example.
“The packaging for the in-store product is designed specifically for the retail shopper, with clear containers so customers can see the ingredients inside,” said Pat Brown, head of Plated and global VP, strategic business initiatives at Boise, Idaho-based Albertsons. ‘We still wanted that ‘what’s in the box?’ curiosity with our in-store kits, but we knew that in a retail store, customers would need to see both the ingredients and the completed vision of the cooked meal, so to speak.’”
Google unveiled a new streaming video game service Stadia which would allow gamers to play new titles without a separate device: “At the end of an official trailer, you might see a button that says ‘Play Now,’ and pressing it will launch you straight into whatever game you were watching within seconds. You’ll be able to play straight from the browser itself. According to Google, the YouTube integration will also allow for real-time streaming at 4K and 60 frames-per-second, eventually allowing for 120 FPS at 8k.”
In 1969, the Cuyahoga River near Cleveland caught fire and helped to inspire the formation of the EPA. As of yesterday, the fish and aquatic life in that river have been deemed safe to eat by federal regulators. “The Cuyahoga River was already one of the most polluted rivers in the country at the time of the fire on June 22, 1969, close to where the river empties into Lake Erie, according to the Ohio History Connection. The fire was neither the first nor the worst the river had experienced. But the 1969 fire on the river, where industrial waste and sewage were regularly dumped, drew national media attention that made it an instant poster child for water pollution at a time when the country was becoming more environmentally aware.”
Anheuser-Busch and Keurig are partnering to develop cocktail pods for a bartending machine: “Across the consumer staples space, companies are grappling with changing consumer tastes that have eroded the formerly steady earnings of big name brands … With staples companies grappling with slowing sales and investors hungry for proof that brands can still resonate with consumers, it’s easy to see why AB InBev and Keurig would want to create a new niche for their products. AB InBev has seen some recent successes with new twists on its staples, like Michelob Ultra Pure Gold and Bud Light Orange.”
A survey indicates that Americans spent almost $40 billion last year shopping while drunk: “Finder.com and Pureprofile found this information by surveying 2,100 adults in February. And Americans—or at least the ones polled—tend to shop after consuming alcohol, apparently. Here’s how it shakes out. Most of that money was spent on food; 52 percent of respondents said they spent their drunken dollars on takeout and drunk snacking. But it’s not just a late-night slice of pizza or an order of fries. People surveyed owned up to buying shoes and clothing (43.22 percent) and cigarettes (30.26 percent) while under the influence. The most outrageous categories? Somehow, 10% of people said they bought a … car while drunk.”
And that’s what’s ahead.