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Just as Linda McMahon announces she is stepping down as head of the SBA, John Oliver has done a takedown of how the company she and her husband founded treat its wrestlers: “Despite signing exclusive contracts with WWE, wrestlers are treated as independent contractors, which means they’re exempt from a bunch of important things such as health insurance, paid leave, and having basic downtime from doing something that wrecks their bodies while they’re on the clock. The long-term effects of this are so bad that the rate of early deaths among WWE wrestlers is notably higher than that of NFL players…”
A startup is selling ads that target people inside ride-share cars: “Octopus places screens inside vehicles for Uber and Lyft to let riders decide if they want to play a game to win cash, which also means watching a 15- or 30-second ad. The startup, which launched in 2018, isn’t the first of its kind, but it’s been able to impress some brands like Red Bull and agencies like Omnicom.
“‘The average ride share is very different than a bus stop, very different than who’s in a taxi. It’s important to know that this is high disposable income and [they] are early adopters to technology,’ [CEO and founder Cherian] Thomas said. But beyond generalization of who rides in an Uber, Octopus also touts being able to know that at least an actual person is viewing the ad. It has sensors in the tablet that verified a person is there. Thomas said the system does not take or store photos and is GDPR compliant.”
When Michael Thomas sold SimpleData, he learned a lot about selling a business but he also realized that he’d made some mistakes while building the business: For example: “I knew that month-to-month pricing was the fastest way to acquire new customers. I heeded the advice of VC Tom Tunguz, who says that startups should start with month-to-month contracts in order to learn. He argues that churn isn’t a bad thing early on because it is the best feedback a company can receive on whether or not it has product-market fit.
“I failed to listen to the second part of that advice, however. He said that as a company grows it should transition to longer-term contracts and eventually begin collecting money upfront. It can start as small as three-month contracts, then go to six-month, then annual contracts. Collecting money up front can progress incrementally too. You can start small with 25 percent up-front, then 50 percent, and then ideally collect 100 percent of an annual contract upfront. But no one likes contracts and I don’t like conflict, so I didn’t ever transition to long term contracts. … my upper brain came up with convincing arguments and justified this decision by saying I had created a ‘customer-friendly’ pricing model.”
Even in Massachusetts, robotic farming is a growth industry: “In Devens, Little Leaf Farms’ automated greenhouse produces salad greens that are hardly ever touched by human hands. ‘You could say the whole greenhouse is a robot,’ said Little Leaf co-founder Paul Sellew, whose company sells to supermarkets throughout Massachusetts. Its hydroponic process uses rainwater collected from the greenhouse roof and zapped with ultraviolet light to kill any bacteria. It takes about three weeks for the greens to reach maturity, and a machine automatically harvests and packages them.”
Forbes says that Ollie’s Discount Stores may be the only brick-and-mortar stores thriving in America: “The CEO, chairman, president and co-founder of Ollie’s is Mark Butler, a slightly built man with a big mustache and graying hair silvering over to white. When he walks in around 10, he is almost indistinguishable from his customers. Butler, 60, has attended every one of Ollie’s first 104 openings, but it’s harder to get to them these days with Ollie’s rolling out almost 40 a year. …
“Ollie’s purchases most of its products as closeouts, meaning a manufacturer has excess inventory of something that a traditional retailer, like Target or Walmart, doesn’t want any longer, and it will sell it to Ollie’s cheap. Ollie’s targets a 40 percent gross margin, and as long as it can turn a profit, it’s not too fussy about what it sells. … ‘Brands at drastically reduced prices—that’s what we live for,’ Butler says.”
Actually, the Morning Report recently highlighted Buc-ee’s, another brick-and-mortar chain that’s thriving. Can you name others? Send them our way: email@example.com and firstname.lastname@example.org.
Whole Foods is cutting prices on hundreds of items to attract more shoppers outside its Amazon Prime network. “Amazon, which acquired Whole Foods in July 2017, had hoped to convert more Prime members into Whole Foods shoppers. The better Whole Foods is able to sync in-store shopping with Amazon Prime, the better it will be able to target its ads and promotions. … The price cuts planned for Wednesday, however, extend beyond Amazon Prime customers. Whole Foods will slash its prices on hundreds of products, with a focus on produce … Customers will save an average of 20 percent on the new reduced-price items.”
ZACK ELLER’S DEAL OF THE DAY
TFI International, a trucking company, has acquired Aulick Leasing a specialized carrier. “‘Aulick’s deep presence across the central and western US and ShirAul’s trailer manufacturing expertise make the combined entity a compelling strategic fit for our Specialized Truckload growth objectives in the US,’ TFI CEO Alain Bédard said in a statement.”
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Aramco, the Saudi oil company, unveiled its finances as part of a bond offering: “The first official glimpse of Saudi Aramco’s financial performance confirms the state-run oil giant can generate profit like no other company on Earth: net income last year was $111.1 billion, easily outstripping US behemoths including Apple and Exxon Mobil.”
Over the weekend, rapper Nipsey Hussle was killed outside his clothing store. In addition to his musical success, he used his Grammy-nominated indie-rap career to spurn his business ventures and became a bonafide entrepreneur: “The fact that he was able to survive, make smart money decisions, and actually buy back his inner-city block is telling of his entrepreneurial acumen. …
“Skipping the major labels courting him, Nipsey created a 24-hour pop-up store and sold his 2013 mixtape, Crenshaw, at $100 a piece. To put it in perspective, most mixtapes are, well, free. Nipsey made $100,000 in one day. … After the successful experiment, Nipsey launched a boutique chain of stores called Marathon. They allowed him to sell his music, clothing, and other affiliated merchandise without any middlemen.”
The market for initial coin offerings is pretty much dead: “Startups raising money via initial coin offerings brought in just $118 million in the first quarter, according to data from research site TokenData. In the same period in 2018, companies raised $6.9 billion. Investors have been spooked by regulators’ clash with ICOs and the overall bear market in cryptocurrencies, where prices are plunging and trading volume is shrinking. It has gotten so bad that the creator of one project, called Sponsy, canceled its ICO and put it up for sale on eBay.”
Even though MoviePass has fallen flat on its face, companies like Infinity and Atom are willing to follow the lame duck’s lead. “The new services have slightly different business models, but both are squarely aiming to take a share of the box office ticket purchasing market away from embattled incumbent MoviePass and its rivals…
“Infinity will offer moviegoers plans at individual, couple, and family levels, with the option to add on access to premium formats, like 3D and IMAX, for an additional monthly fee … it’s going to let these theaters control what movies and showtimes are open to subscribers, which could lead to the very same problems that have dogged MoviePass in the past.” Atom, on the other hand, “instead of trying to run the entire box office game under its own brand, like MoviePass, [is] selling Atom Movie Access directly to theater chains, as the underlying technology platform on which they can build their own digital ticket businesses.”
We have a response to Gene Marks’ praise of universal health care and how it would benefit employees from Dr. Michael Goldberg: “The notion that ‘universal health care’ will be better for business is preposterous, especially if one means the same or similar systems that are in place in the UK, Canada, France and elsewhere. These systems all come with exceedingly high tax rates. Where are these taxes going to come from? … My guess is that it will be spread out a bit, but small businesses, because they are poorly organized and ill-advocated-for, will lose out.”
Correction from yesterday’s Morning Report: the Commerce Dinner is on May 9 at 6:30 p.m. at Murphy’s.
And that’s what’s ahead.