How to Sell on Amazon, the Coffee-Price Paradox, and the Uber of Astrology

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Eric Yuan, founder of Zoom, the video-conferencing software company that was valued at $9.2 billion in its IPO last week, practices what he preaches: “After Yuan hired hundreds of engineers in his native China, he went three years between in-person visits. When he raised money from top venture capital investors, he showed up just once, to make sure every investor in the room had downloaded the Zoom app.

“For his IPO roadshow, Yuan deigned to make the 50-mile trek from his San Jose headquarters to San Francisco for a single investor lunch—and then bolted back to work. Everyone else, money manager big or small, met with him virtually, over Zoom. When Yuan flew to New York for the IPO, it was just his eighth work trip in five years. ‘Customers have always said, Eric, we’ll become your very important customer, you’ve got to visit us,’ says Yuan. ‘I say, Fine, I’m going to visit you, but let’s have a Zoom call first.’ That’s usually enough.”

Oh, and by the way, China-born entrepreneur Yuan, now a billionaire, was denied a visa eight times by the US government.


Banks want to overturn a federal law preventing them from hiring employees who’ve committed minor crimes: “Banks say the restriction is too tight, keeping them from hiring a more diverse pool of candidates. The ban covers felonies such as financial fraud, but also misdemeanor offenses that result in no prison time, including minor shoplifting and drug-possession convictions. There is no broad statute of limitations, meaning offenses from early adulthood can stop a candidate decades later.”


Coffee has never been more popular, and yet the price of beans has plunged: “Prices have sagged under the weight of what is expected to be another surplus worldwide coffee crop this year. More than any other, the country behind that glut is Brazil, which has expanded its already-leading share of the world’s coffee crop. Brazil has stolen market share from Central America because of state-sponsored research and development—including phasing in mechanized harvesting over handpicked methods still used elsewhere. … When Brazil’s currency, the real, is cheap, so is the coffee that Brazil sells in dollars to the rest of the world. And the real is 60 percent less valuable compared with the dollar than in 2011. It has fallen 12 percent against the dollar over the past year.”


President Trump’s washing-machine tariff did bring manufacturing and jobs to the US, but at a high price: “Research to be released on Monday by the economists Aaron Flaaen, of the Fed, and Ali Hortacsu and Felix Tintelnot, of Chicago, estimates that consumers bore between 125 percent and 225 percent of the costs of the washing machine tariffs. The authors calculate that the tariffs brought in $82 million to the United States Treasury, while raising consumer prices by $1.5 billion. And while the tariffs did encourage foreign companies to shift more of their manufacturing to the United States and created about 1,800 new jobs, the researchers conclude that those came at a steep cost: about $817,000 per job.”


While many direct-to-consumer brands avoid selling on Amazon (in part because Amazon owns the consumer data), Bark, a dog supplies brand, decided to go where the customers are: The company “analyzed the existing pet category—which included AmazonBasics products of the retailer’s own—to find the highest-volume selling products with strong margin profiles. It also used machine learning to analyze the reviews and ratings of all of those products on Amazon.

“‘The idea was to reverse engineer our products to find out where the most opportunity for product development was, and then build the line out from there,’ said [CEO Matt] Meeker. The items it found would sell best on Amazon turned into the Bark Essentials line of products like poop bags and an orthopedic dog bed, as well as CBD supplements for dogs. It launched with five products on Amazon in August 2018, and Meeker said the goal is to end this year with 20 products and hit 10x growth on the platform.

“To boost performance of Bark’s Amazon products, the team also laid out a strategy it called ‘The Boost Strategy.’ It starts with reviews. When a new product launches, Bark taps a team of ambassadors to test the product and, if they like it, review it on Amazon. (If they don’t like it, it asks the ambassadors to tell them directly.) Once the product starts getting tractions through reviews, it will put money behind product listings on Amazon’s platform.”


Milani Chatani, former head of Sweetgreens’s brand creative department, founded Wild One so dogs can have ethically sourced treats: “Chatani tells Fast Company that while companies like The Farmer’s Dog have made strides lately in delivering fresh pet food made from whole ingredients, the same treatment hasn’t really reached treats, which often comprise a troubling list of ingredients like preservatives, potentially cancer-causing dyes, and toxin-heavy rendered animal fat. “‘If we don’t want to eat these things ourselves, why are we feeding them to our pets as a reward?’ Chatani says. ‘We wanted to make a treat that humans would feel comfortable giving their dogs.’” Yes, apparently you can eat the pet treats too.

Thanks to a new investment round, StockX, a reseller of sneakers co-founded by Dan Gilbert (QuickenLoans, Cleveland Cavaliers) will be valued at more than a billion dollars: “The Detroit-based company gets its name from its stock market-like pricing structure, which lets shoppers either pay the lowest asking price from one of StockX’s sellers or place an even lower bid and see if it eventually matches up with a seller’s asking price. StockX also makes the pricing history of a given sneaker transparent, which is one reason it bills itself as a next-generation eBay. While sneakers are StockX’s sweet spot, the site also sells watches, handbags, and streetwear through the same model.

“Like competitors GOAT and Stadium Goods, StockX has benefited from the rising popularity of acquiring tough-to-buy sneakers, especially among Millennial men and teenage boys. And the valuations of the companies in the space show it. The luxury e-commerce website Farfetch paid around $250 million to acquire Stadium Goods, which uses a consignment model, last year. And GOAT, which also owns the boutique sneaker store chain Flight Club, was valued at more than $550 million when Foot Locker invested $100 million in the company earlier this year.”


Cannabis vapes are taking the next step in their product evolution with mood-specific formulas: “As with any form of prohibition, once the floodgates open, there’s an inevitable wave of over-indulgence. For the last few years, we’ve seen the emergence of increasingly strong oils and concentrates. But as the party smoke clears, that’s changing. People are exploring various cocktails and new compounds with the goal of dialing in the effects to achieve exact moods and experiences. This might be as vague as ‘party’ or as specific as inducing lucid dreams. …

“Scarlet Ravin, White Fox’s founder and CEO, creates the line with the sole intention of making people feel better. Fed up with the arms race in cannabis, the zero-sum game of getting impossibly high, she tells Engadget she wants to answer the question ‘how do we get to use the medicine in a good way, where we aren’t just getting super stoned and blowing our heads off?’”

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Microsoft acquired Express Logic, a creator of real-time operating systems for Internet of Things (IoT) devices. “All large cloud players are chasing opportunities in these areas, and Microsoft just made a significant move to bolster its IoT offerings.”


Millennials are leaving Silicon Valley because of a decreased quality of life: “Recent polls show Millennials are among the most likely to leave. Some two-fifths of people between the ages of 18 and 34 working in the technology sector say they plan to leave the San Francisco area in the next 12 months, according to a Brunswick Group survey released last week.

“About two-thirds of people living in the Bay Area said the quality of life has deteriorated in the past five years, according to another poll released by the San Jose Mercury News and the Silicon Valley Leadership Group. They blame housing costs, homelessness and traffic jams. Increasing wildfires, the prospect of long-term water scarcity and other climate change-related concerns also made the top 10. That has larger implications for California, a $2.6 trillion economy representing 12 percent of US GDP.”


American Media is selling The National Enquirer to Hudson News for $100 million, but the infamous tabloid has been seeing fewer readers every year: “Paul Pope, whose father Generoso is credited for turning the 93-year-old publication into a powerhouse tabloid when he purchased it in 1952, told The Wrap Tuesday that he doesn’t envision a scenario in which the Enquirer overcomes its woes … In 2014, the Enquirer sold 516,000 copies per week. It now sells 218,000 copies per week, the Alliance for Audited Media reported. ‘I don’t think there is any way, even if they gave the paper away, I don’t think it can be resurrected,’ Pope said. ‘The online version is nothing. The subscription is nothing. There is just nothing left.’”


Harlem Capital Partners wants to become a billion-dollar fund by investing in women and people of color: “In 2018, women CEOs got only 2.3 percent of venture capital. People of color got even less. Harlem Capital put together a report that identified 105 entrepreneurs of color who had raised at least $1 million, for a total of $2.7 billion. But those raises took place over a number of years, and venture capital is a $100 billion industry, making the percentages tiny.

“Depending on your point of view, that means Harlem Capital is either up against some intractable societal forces, or is primed to take advantage of some low-hanging fruit. Other funds, including the Intel Capital Diversity Fund and Rethink Impact, also see an opportunity in going after these underserved groups of entrepreneurs. Either way, Harlem Capital’s founders believe that diversifying the faces of fast-growth entrepreneurship means diversifying the people who invest in entrepreneurs. ‘Until you have women and minorities creating their own funds,’ says Pierre-Jacques, ‘we don’t believe real change will happen any time soon.’”

Investors are backing astrology startups, including Sanctuary, an app that can be described as “Uber for astrological readings”: “For $19.99 a month, you can receive a monthly one-on-one chat consultation with an astrologer. (The app also provides free daily horoscopes.) Mr. Birnbaum’s decision to back a horoscope company through Five Four Ventures, the incubator he runs, ‘gets a lot of grins’ from people in the finance world, he said. But they get it. Astrology is having a cultural moment, and for investors, that translates to dollar signs.

“In recent years astrology traded its psychedelic new-wave stigma for modern Instagrammy witch vibes, and those vibes are very popular with Millennial women. This means there’s money to be made. Startups—professional, non-shady ones with interesting business models—are bubbling up, eagerly raising funding from people like Mr. Birnbaum. A few weeks after Sanctuary became available for download, Co-Star, an app that lets people download and compare their birth charts, raised just over $5 million in funding from the Silicon Valley venture capital firms Maveron and Aspect Ventures, as well as 14W, based in New York. Co-Star’s website promotes the fact that astrology allows ‘irrationality to invade our techno-rationalist ways of living.’ The app has been downloaded more than three million times. Its Instagram account has more than 400,000 followers.”

And that’s what’s ahead.

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