Nashville Hot Chicken, Luxury Laundry Detergent, and the Largest Infrastructure Project in the World

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Good Thursday Morning,

DAYLIGHT  

Everyone is cold, but the polar vortex is no big deal economically: “Business weather forecaster Planalytics estimates that the US economy took a roughly $5 billion hit because of the frigid weather stemming from lost productivity, higher heating bills and a drop in consumer spending. The cost of flight cancellations is expected to reach $1.4 billion. Those losses reflect the enormous area affected by the polar vortex…Despite the adverse impact on households and businesses, the setback is a drop in the bucket for the $17 trillion US economy. As a result, experts predict the damage will be short-lived.”

Still, Chicago is experiencing an ice age, and restaurant owners realize that no one is grocery shopping in this cold: “’Restaurants that deliver will be hammered and turn away business based on not being staffed to handle it,’ [CEO of StratEx, Adam] Ochstein predicted. Even on Saturday, when it wasn’t nearly as cold, he ordered a pizza from Domino’s and was told the wait was three hours. Evan Gold, executive vice president at Planalytics, a consulting firm that helps businesses manage the impact of weather, said traffic at restaurants is expected to drop five percent in the Chicago market this week, while usage of delivery services should rise.”

NASHVILLE IS HOT

You may have noticed that Nashville Hot Chicken is everywhere these days. Here’s a story about the family business that started serving the spicy chicken 80 years ago. Thinking about trying the real deal? Here’s a warning: People find it lethal AND addictive:

“Cayenne stimulates the nervous system, awakens mucus, and can cause the heart to beat faster. The heat builds on itself. [The current owner of Prince’s Hot Chicken Shack, André Prince Jeffries] likes to say that hot chicken will sober you up and clean you out. She calls it ‘a twenty-four-hour chicken.’ Activities that may not pair well with Nashville hot chicken include a road trip, a long flight, a first date, work, sleep, and your wedding. First-timers have been advised to prepare for hot chicken by putting a roll of toilet paper in the freezer at home.

“As Brock, the chef, started to eat, he took off his eyeglasses. Jeffries told him, ‘Start out slow.’ She added, ‘Say your prayers.’”

Meanwhile, we will not be serving hot chicken, but the Oxford Center will be in Nashville tonight for a Commerce dinner and Friday morning for an Entrepreneurial Briefing at the Nashville Entrepreneur Center. You can still come hear Carey Smith talk Friday morning about how he bootstrapped Big Ass Fans and then sold it for $500 million. He’s looking to use some of that money to invest in other small businesses with big potential, and he’ll tell us what he’s looking for in a business. It’s not too late to RSVP here: events@oxfordcenter.com.

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PRICING

Gwen Whiting and Lindsey Boyd have sold their bootstrapped laundry company to Unilever for a reported $100 million: “Back in 2004, the concept behind a little startup called The Laundress seemed kind of crazy: The brand pitched itself as a luxurious, fashionable laundry detergent company in a world where most people bought inexpensive grocery store brands…

“They had the unorthodox idea to create a brand that had all the marks of a luxury brand: higher-quality ingredients, a focus on elegant design, and a superior customer experience. And yes, the price would also be higher. While a jumbo 100 oz. bottle of Tide costs $12 on Amazon, The Laundress’s 32 oz. signature detergent sells for $20.50 on the brand’s website.”

FAILURE

When a venture-backed startup fails, it can hurt lots of business owners who get stiffed by the failure. That happened to Lenore Estrada when Munchery went under, and she’s going after the venture capitalists: “Estrada, who owns a San Francisco-based bakery business called Three Babes Bakeshop, published a Medium post that claims she’s owed more than $20,000…She went to the Menlo Ventures office and reportedly left a letter outlining her concerns on the windshield of every car in the parking lot.

“Yesterday, she protested outside Sherpa Ventures’ SF office, holding a sign that reads: ‘Startup idea: Don’t steal pies!’ Estrada is asking that the VCs who backed Munchery write a check to cover the money the defunct startup owes to its vendors. ‘It’s not a lot of money to you, but to us it’s missed rent payments, layoffs, and waiting another year to expand to offer benefits.’”

INFRASTRUCTURE

In China, it’s not infrastructure week, it’s infrastructure century. In fact, China is building the largest infrastructure project in the world near what’s known as the Pole of Inaccessibility, the point on the planet that is furthest from a sea or ocean: “About 80 miles from the Pole of Inaccessibility, just across the border in Kazakhstan, is a village called Khorgos. It has spent most of its existence on the obscure periphery of international affairs, and its official population is just 908. But over the last few years, it has become an important node of the global economy.

It is part of an initiative known informally as the new Silk Road, a China-led effort to build a vast cephalopodic network of highways, railroads and overseas shipping routes, supported by hundreds of new plants, pipelines and company towns in dozens of countries. Ultimately, the Belt and Road Initiative, or B.R.I., as the project is more formally known, will link China’s coastal factories and rising consumer class with Central, Southeast and South Asia; with the Gulf States and the Middle East; with Africa; and with Russia and all of Europe, all by way of a lattice of land and sea routes whose collective ambition boggles the mind.”

DELIVERY

Cliff’s former employer, UPS, is trading trucks for tricycles in some cities: “UPS first tested e-bikes in Hamburg, Germany in 2012. The company says it now does inner-city delivery by foot and bike in more than 30 cities, including Dublin, London, Paris and Rome, and may start using bikes in some Asian cities. Its first US pilot began in Portland, Oregon in 2016 and lasted a year. That was followed in 2017 by e-bikes in Pittsburgh and Fort Lauderdale, which remain in use.

“Last year the company launched e-bike delivery in Seattle with a new ‘plug and play’ design. A truck drops off four cargo modules loaded with packages in a private parking area and the e-bike driver attaches one of the modules to the back of the bike. The driver cycles around downtown Seattle, dropping off packages, then switches out modules and makes another delivery run.”

STARTUPS

We could all use that one friend who will tell us straight-up when something isn’t a good idea. The startup Obo aims to make that its business. The company makes what it calls product-decision software that will inform product designers if they are adding useless features. Not only does the software reduce frivolous flash and dazzle, it “models what-if scenarios to gauge how consumers would respond to certain releases and also conducts market research to validate assumptions. Obo claims its platform can help businesses determine if their existing product plans are trash in less than an hour.”

ECONOMY

A consumer-sentiment index is suggesting early signs of a downturn: “Over the last quarter, the Yelp Economic Index, which measures the activity of millions of small businesses that have a presence on the online reviews site, declined by more than two points, from 100.7 to 98.5. This is the largest decline since the fourth quarter of 2016, according to Yelp, and largely due to declines in the professional, home, and local services sectors.”

SPOTLIGHT

On Mind Your Business, I recently spoke with Andrew Yang, founder of Venture for America about why Americans are starting fewer businesses, why he favors a universal basic income program and why he’s running for president. If you missed the conversation, you can listen here.

My guest today 1:00 p.m. ET on SiriusXM 132 will be Lou Mosca, chief operating officer of American Management Services, a consulting firm that works with business owners on all aspects of running a business.

And that’s what’s ahead.

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

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