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Jay Goltz (above) asks: How do you plan a succession if you don’t know when you want to leave?
Jay Goltz knows that every business owner is supposed to have a succession plan. In fact, when his friend Bo Burlingham wrote the definitive book on exiting, Finish Big, it was Jay who came up with the title. But as Jay has thought about implementing his own plan, he’s started asking some interesting questions, such as: How do you plan a succession if you don’t know when you want to leave? Can you really hire the perfect No. 2 and then ask that person to wait around for, say, 10 years? Or more? What’s the primary purpose of a succession plan? Is it to protect your family or to protect your business? Is it really so terrible if a business does not last beyond its founder?
Got answers for Jay? Got questions of your own? Jay and Bo will be Loren’s guests on Mind Your Business today at 1:00 p.m. ET on SiriusXM 132. Call 800-942-7866 during the show with questions or comments.
Here’s how one inventor got a retailer to stop carrying a copycat product: “The GreatPlate is a simple yet simultaneously remarkable improvement on the plate. … Basically, it allows the user to hold a drink and food in one hand … They’re also reusable, stackable, microwave safe, and made in Wisconsin. … Last year, an exact knockoff of the GreatPlate made in Thailand appeared in [Kellow’s] local Meijer’s store.
“When Kellow consulted his attorneys for advice, they asked for a $25,000 retainer to begin addressing the situation. ‘You have to decide,’ Kellow said. ‘Do you go into battle? For how long? Meijer is a very upfront company. I knew people inside at that point, and when they realized they were in the wrong, they asked me what my course of action was going to be.’ Kellow was well-aware of the enormous cost of pulling product off shelves only to document its destruction. It would be much easier for the retailer to sell through the product it had already ordered, he figured. So that’s what he encouraged Meijer to do.
“As a result, he was promptly invited into the Midwest chain’s corporate office, where they offered him a gentlemen’s agreement to put the real GreatPlate in all of its stores. A fight won without throwing a single punch!”
Why did the Federal Reserve cut interest rates? “The last time the Fed cut rates was in December 2008, when unemployment was over seven percent (and rising quickly), the stock market had lost a third of its value, and a major financial institution, Lehman Brothers, had just declared bankruptcy, rocking the financial system. Today unemployment is at a half-century low (3.7 percent), the economy is growing at a healthy pace (over two percent) and the stock market is sitting at record highs. Congress gave the Fed two mandates: to keep unemployment low and prices stable. By about any measure one can look at, the Fed has achieved those goals. The job market is strong, and inflation remains surprisingly low.”
The rate cut should reduce the cost of small business loans: “People looking to take out loans—and those with loans linked to shorter-term interest rates such as some car loans, small-business loans and credit card debt—will likely benefit from the Fed interest-rate cuts, according to Stephen Stanley, chief economist at Amherst Pierpont Securities. ‘The more the Fed cuts, the lower borrowing rates will go,’ said Stanley. ‘You’re talking about potentially lower rates across the board.’”
American businesses added 156,000 jobs in July, according to a recent survey: “Businesses that have fewer than 20 employees shed workers for the third straight month. … Population growth means the US economy needs to add roughly 100,000 to 120,000 jobs monthly to keep unemployment from rising. Average job gains have declined over the year, but they’re running above a pace that could cause the jobless rate to increase. The tighter labor market could correspond with faster wage growth.”
Currently under construction, an incubator in Toronto will be a hybrid residential housing and manufacturing project: “Two of the buildings will be residential, while the third will contain a 60,000-square-foot manufacturing facility and tech incubator, called Factory 6, outfitted with plastic and metal 3D-printers, CNC milling machines, laser cutters, and other gear. The manufacturing facility will be overseen by a nonprofit that will set up a membership system to allow access by designers, students, and startups. … The aim of this new incubator is to combine advanced manufacturing and residential space into one development, which leads to better planning and ideally cuts down on commutes …”
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Eric Lefkofsky, the man who brought us Groupon, is now trying to cure cancer: “Tempus is predicated on the theory that information, lots of it, will enable doctors to personalize cancer treatments and make them more effective. A doctor treating a patient with lung cancer might send a tumor sample to Tempus for genomic sequencing. Tempus identifies a mutation in the gene for epidermal growth factor receptor, which causes cells to grow and divide too much. With that, the doctor prescribes a targeted therapy that can have better results than chemotherapy. So far the 700-employee company has raised $520 million (Lefkofsky put in $100 million). The lavish $3.1 billion valuation suggests investors expect his approach to make a big score, starting with cancer, then against chronic conditions like depression and diabetes.”
Confluera, which just secured $9 million in funding, works to stop cyberattacks and data hacks in real-time: “To do that, [CEO and co-founder Abhijit, Ghosh says, his company’s solution watches across the customer’s infrastructure, finds issues and recommends ways to mitigate the attack. … Microsoft chairman John Thompson, who is also an investor, says this is more than just real-time detection or real-time remediation. ‘It’s not just the audit trail and telling them what to do. It’s more importantly blocking the attack in real-time. And that’s the unique nature of this platform, that you’re able to use the insight that comes from the science of the data to really block the attacks in real time.”
Does the world really need a smart diaper? “Kimberly-Clark in July rolled out a Huggies line called Special Delivery, which is made from plant-based materials, comes in black packaging and costs roughly five times the least costly diaper on the market. P&G, meantime [offers] a tech-infused diaper system that includes monitors and activity sensors. … Some analysts question whether price increases could open the door for private-label and startup competitors, which so far have struggled to make inroads within the diaper market. P&G has acknowledged that ever-higher razor prices opened the way for online shave brands to steal away customers.”
Companies are investing in dehydrated products: “Almost all at once, waterless products have arrived to save the day. By Humankind (emphasis theirs) launched in February. The startup makes a ‘forever’ refillable container for its mouthwash tablets, packages its shampoo bars in paper boxes, and provides refills for its deodorant. It’s all in the design scheme du jour: gender-neutral, with minimalist font swimming in pastel color schemes. … In 2018, Seventh Generation introduced an ‘ultra-concentrated’ laundry detergent, which the company says uses 50 percent less water and 60 percent less plastic and is 75 percent lighter than the standard detergent bottle. The bottle automatically doses the right amount of detergent with one squeeze. It’s only sold online, or else I would absolutely get that to carry home instead of the standard 100-ounce detergent bottle.”
FOOD AND BEVERAGE
It sounds like an oxymoron, but the newest trend in sports beverages is “performance beer”: “Sufferfest was created in San Francisco in 2016 by Caitlin Landesberg, a trail runner herself, who wanted to make beer that would work with runners after grueling workouts—often called ‘sufferfests’—and not set them back. The FKT (or ‘Fastest Known Time’), a pale ale, for instance, is low in gluten—like all of Sufferfest’s beers—and brewed with black currant and salt to supply the electrolytes and sugars that runners typically crave at the end of a race. Repeat, a kolsch brewed with bee pollen, is supposed to help with muscle recovery. …”
A report finds that President Trump’s farm bailout is making wealthy farmers wealthier: “According to a report released Tuesday by the nonprofit Environmental Working Group (EWG), most of the $8.4 billion given out so far in last year’s farm bailout went to wealthy farmers, exacerbating the economic disparity with smaller farmers. An EWG analysis found that the top one-tenth of recipients received 54 percent of all payments. Eighty-two farmers have each so far received more than $500,000 in trade relief.
“One farm, DeLine Farm Partnership of Charleston, Mo., has so far received $2.8 million. The top one percent of recipients of trade relief received, on average, $183,331. The bottom 80 percent received, on average, less than $5,000, EWG said. … ‘These programs are designed to give the most subsidy money to the biggest farms; we don’t dispute that,’ [EWG analyst Anne] Schechinger said. ‘But for these huge farms that are making tons of money each year, is that really something taxpayers should be subsidizing while smaller farmers struggle?’”
OXFORD STRATEGIC ADVISORY DEAL OF THE DAY
Nautilus Solar Energy was acquired by Power Corporation of Canada, a holding company that has interests in financial services, renewable energy, communications and other business sectors.
Harver, a developer of recruitment software, raised $15 million in an Early Stage VC Round.
Recogni, a developer of imaging-based artificial intelligence systems designed to organize machine data, raised $25 million in a Series A Round.
Jobble, a provider of an on-demand workforce management platform that connects businesses with people looking for flexible work, raised $11 million in an Early Stage VC Round.
V.G. Siddhartha, founded Coffee Day Enterprises, a $572 million-in-sales business (with more than 10,000 employees) that beat Starbucks in India and persuaded a country raised on tea to try something else: “It made him a wealthy man, one of the richest in India and, for a brief moment after Coffee Day’s 2015 IPO, a billionaire. Siddhartha came to represent everything India dreamed of becoming: a modern nation where entrepreneurs could new ideas, changing their lives and the circumstances of everyone connected to them as a result. That’s a radical notion for a nation constricted by millennia-old rigidity around class, structure and expectations. Siddhartha was fully aware of this. ‘If I was born 20 years earlier, I would have surely failed,’ he said in 2011.
“In death, Siddhartha, whose body was found Wednesday morning in the Netravati River in an apparent suicide, will likely also come to represent grimmer realities: the limits of the Indian economic miracle, the constraints of creating a business within a developing market, and the alleged harassment by government officials, which would have been not unlike the corruption that disgusted him in the first place.”
And that’s what’s ahead.