Outrage Advertising, How Harpoon Stayed Independent, and Limping Unicorns in Silicon Valley

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There are a lot of limping unicorns in Silicon Valley: “Evernote’s struggles illustrate a harsher truth: For many startups of a certain size, failure rarely happens abruptly. More often, after early momentum wanes, the missteps and bad press accumulate until a company enters a slow, difficult rehabilitation that stretches on for years. But in and around San Francisco, no one likes to talk about getting stuck in startup purgatory. Once venture capital investors have sunk in considerable sums, they’re willing to let struggling companies flounder for years on the off chance they hit on something big. ‘They’re not in it for a break-even or a slight loss or a slight gain,’ said Jeffrey Cohen, a bankruptcy lawyer at Lowenstein Sandler. ‘They’re willing to let it ride a little longer to see whether it explodes.’ …

“Since 2015, according to CB Insights, a research firm, more than 40 unicorn companies have had ‘down rounds’ or ‘down exits’—that is, investments or sales at reduced valuations. The list includes well-known brands like Shazam, the name-that-song app, and Jessica Alba’s consumer products startup, the Honest Company.”


In Miami, there are too many condos and not enough foreign buyers: “Miami’s high-end real-estate market has drastically slowed in the past several years, as the Latin American buyers who led a frenzy of post-recession purchases have all but disappeared. South American economies that were roaring in the early years of the decade, including Brazil, Argentina and Venezuela, are now facing severe economic distress, which has devalued their currencies and left purchasers from those countries with far less buying power in the US.

“At the same time, new condos launched just as the owners of older units looked to cash out. There were 691 condo sales in Miami Beach in the first quarter of 2019, down 24 percent from 909 in the first quarter of 2015. During the same period, single-family homes sales dropped to 81 from 117. The threat of climate change has had some impact on Miami home buyers’ decisions. A 2018 study showed that the value of single-family homes near sea level in Miami-Dade County rose more slowly than that of homes at higher elevations. But agents said a greater threat to the high-end market is inventory buildup.”

Shelters originally made for disaster relief are now permanent homes for the homeless in Tacoma, Washington: “Created by Pallet, based in nearby Everett, Washington, the small, white rectangular structures are covered from floor to ceiling with a fiberglass material and aluminum framing, and—depending on whether you pick the 64- or 100-square-foot model—can be set up with little to no tools in under an hour. They come with a fold-up bed, windows, a ventilation system, and a front door that locks. In other words, they are an ‘Ikea approach to shelter,’ says Amy King, the company’s owner and founder.”


Founded by Johnny Simkin, Swiftly is helping public transit agencies and commuters curb bumper-to-bumper traffic: “By integrating with existing GPS devices aboard buses and trains, the company is able to collect real-time arrival and departure data. … ‘The algorithm basically collects every GPS record from every vehicle in a transit network in real time,’ says Simkin. ‘We then combine historical trends with [the] real-time data to better predict future performance … 

“[After a rebrand, Swiftly] divided its focus between two products. Swiftly Transitime continues the original mission of keeping passengers informed via their favorite transportation apps. Swiftly Insights gives cities and transit agencies an analytics platform that can be used to identify mechanical failures, improve operational performance, and optimize service reliability. That dual approach has been key to the company’s growth—particularly since the company’s pricing model is entirely enterprise based. Cities and agencies sign a three-to-five-year deal with an annual cost of five to seven figures, depending on the size of their fleet.”  

TripActions, a startup that handles business travel, already has a $4 billion valuation: “Competing with traditional travel agencies, which largely book by phone or email, the company manages everything from plane flights to rental cars to hotel bookings for business travelers on its digital platform and mobile app. After six minutes of inputting travel plans, users receive a bevy of booking options that fit those parameters, TripActions said. Already, TripActions handles a more than $1.1 billion annual travel budget, with more than 2,000 global customers including tech giants WeWork, Lyft and SurveyMonkey. The company makes money by charging a one-time $25 booking fee per trip.”


The US Supreme Court has handed out-of-state liquor retailers a big win: “The practical effect of the decision will be that more big-box competitors are likely to move into the state, forcing some local stores out of business. But liquor prices may go down, and there will be more product choices for consumers. The last major court decision on state regulation of liquor sales was in 2005, when the high court struck down state laws that allowed in-state wineries to ship directly to consumer out of state but barred out-of-state wineries from shipping to consumers in the state.”


Thomas Keller’s French Laundry restaurant has been cleared of pregnancy discrimination by a jury: “The three-week-long trial revealed two opposing sides with very different accounts. Scott-Allen’s attorney Dustin Collier accused the Keller Group of ‘fraud, pregnancy discrimination, and gaslighting,’ according to the SF Chronicle. Defense lawyer Mike Laurenson dismissed Scott-Allen’s allegations as a big miscommunication, saying that Minnillo ‘simply didn’t care for Ms. Scott-Allen and should have done a better job of communicating.’

“The trial, personal by nature, also examined the character of defendant Minnillo, including emails in which he commented on the appearance of his female employees, and called a female colleague ‘a raving bitch.’ Despite this, Keller attorney Laurenson advised jurors to ignore evidence that he deemed ‘unrelated,’ declaring ‘Minnillo is a champion for women at the French Laundry.’”


Amazon Go seems to be succeeding in New York City: “Amazon declined to comment on that pattern and again declined to specify how many stores it has its eyes on, except to say that its 14th Amazon Go will soon open in San Francisco, which will be the city’s fourth. Still, the steady pace of the store rollout and equally enthusiastic customer reception from San Francisco to New York signal there’s potential for nationwide growth, especially in busy commercial areas where office workers have little patience to wait in long lines at fast-casual concepts during lunch hours. …

“Amazon is reportedly looking to open 3,000 Amazon Go stores by 2021 and is said to be looking at expanding the concept to London, airports and college campuses. RBC analyst Mark Mahaney, who has described Amazon Go as a ‘game changer’ for the physical retail experience, has said that Amazon Go could translate to a $4.5 billion sales opportunity if the tech giant opens 3,000 stores. Still, there’s a big caveat: It would take about two years for Amazon to break even at each store because of the cost of the cameras, sensors and other hardware, Mahaney has estimated.”

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Here’s how Dan Kenary kept his brewing company, Harpoon, independent: “One of the partners left early on, and for years Rich [Doyle] was CEO and ran sales and marketing; I was president, running operations and finance. We ran it as a partnership. I remember when we were both nearing 50, which happened around 2010, we talked about the future of the company. He started thinking he wanted some kind of liquidity. We each owned about 45 percent of the business. I didn’t want to sell the company. He started bringing in bankers and private equity. I said, ‘Out of respect for you, I will meet with and talk to anybody. I just ask you to do the same courtesy. You pursue that. I’ll pursue other options. And then we’ll come back and talk.’ … I proposed: Why don’t we take the other six shareholders in the company, who together owned just under 11 percent of the business, and treat them like a jury?

“The vote came back: All six voted to pursue the ESOP. So we cobbled together a five-bank group led by Citizens and JPMorgan, and on July 2, completed it. It was a $70 million transactionwhich meant the company was in a large amount of debt. It was July 9 when we announced it to employees. We shut down the Vermont brewery for the day and bused everyone down to Boston. There were about 200 people in the room. I said: ‘I’d like to introduce you to the new owners of a large minority stake in the business.’ You could hear a pin drop. Then I said: ‘Stand up. Turn to the person next to you and shake their hand, because you guys are now the owners!’”


ASV Holdings Inc, a designer and manufacturer of compact track loader and skid steer loader equipment, has agreed to be acquired by Yanmar, a provider of business products and services that focus on food production and power harness. The deal is worth $70.7 million.


Wondery, a provider of a podcast network for storytellers, raised $10 million in a Series B Round.

Restaurant 365, a provider of cloud-based restaurant-specific software that combines restaurant modules with an accounting system, raised $88 million in a Series C Round.

Surterra Wellness, a developer and retailer of cannabis-based medical products for health and well-being, raised $100 million in a Series D Round.

Ad campaigns like Charmin’s “Forever Roll” for Millennials and IHOP change to IHOb make people angry because they are supposed to: “The strategy here is simple. It’s no secret that a crucial fixture of internet culture is the collective roasting of a clumsy ad, and marketing has always been about sparking a conversation. So, brands have learned to leverage outrage, rather than joy or humor or political zeitgeist, for their own gain. The fastest way to the top of the trending page is to create your own mini-backlash; mild enough to not leave lasting damage, but annoying enough that everyone wants to get in on the fun. [University of Buffalo professor Mark] Bartholomew says that while ‘outrage advertising’ is as old as the industry itself, brands today have become fluent in the ironic, bitterly sarcastic spirit of modern social media habits. How else can you advertise to an acerbic populace than by baiting them?”


Nearly 100 drivers followed a Google Maps detour and ended up stuck in an empty field: “A crash on Peña Boulevard, a road leading to Denver International Airport, prompted the app to take drivers on a detour on Sunday. But it was too good to be true. The alternate route took drivers down a dirt road that rain had turned into a muddy mess, and cars started sliding around. Some vehicles couldn’t make it through the mud, and about 100 others became trapped behind them.”

And that’s what’s ahead.

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