Shazam For Everything, Confusion in California, and a True Pioneer in Hair Care

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Mark Zuckerberg probably doesn’t want you to know who the fastest growing group of Facebook users is: “Senior citizens in the US are the fastest growing group of Facebook users, nearly doubling in numbers between 2012 and 2019, a vast shift from the platform’s beginnings as a service for college students. New data from the Pew Research Center shows that 37 percent of the ‘Silent’ generation, those born before 1945, are now on Facebook, compared to 21 percent in 2012. Baby Boomers are also increasingly on Facebook: 43 percent of the generation were on in 2012, whereas 60 percent have accounts in 2019. The numbers of Millennials and Gen-Xers on the platform, meanwhile, have kept relatively steady.”


California went ahead and passed its contractor law and now confusion reigns: “After months of bickering over who would be covered by a landmark bill meant to protect workers, California legislators passed legislation on Wednesday that could help hundreds of thousands of independent contractors become employees and earn a minimum wage, overtime pay and other benefits. But even before California’s governor, Gavin Newsom, had signed it into law, the battle over who would be covered flared up again. Uber, one of the main targets of the legislation, declared that the law’s key provisions would not apply to its drivers, setting off a debate that could have wide economic ramifications for businesses and workers alike in California, and potentially well beyond as lawmakers in other states seek to make similar changes. ‘California sets off a chain reaction,’ said Dan Ives, a managing director of equity research at Wedbush who tracks the ride-hailing industry. ‘The worry is that the wildfire spreads.’

“In California, religious groups said they feared that small churches and synagogues would not be able to afford making pastors and rabbis employees. Winemakers and franchise owners said they were worried they could be ensnared by the law, too. Even some of the contractors for the app-based businesses that have been at the center of this debate said the change could hurt them if companies like Uber, Lyft and DoorDash decided to restrict how often they could work or cut them off entirely.”


The FTC has begun interviewing scores of third-party merchants who sell on Amazon: “[According to three of those merchants,] all were asked what percentage of revenue their businesses derive from Amazon versus other online marketplaces like Walmart Inc. and EBay Inc., suggesting regulators are skeptical about Amazon’s claims that shoppers and suppliers have real alternatives to the Seattle-based company.

“Some merchants fear incurring Amazon’s wrath by cooperating with the agency. One who spoke with an FTC attorney said he was assured the conversation would be confidential unless it led to an official complaint against Amazon or the transcript was subpoenaed by Congress. … Desperation prompted merchant [Jaivan] Karnani to contact the agency to report his difficulties selling video games and electronics on the site. Karnani told investigators he lost 10 percent of his sales after Apple and Amazon reached an agreement last year to limit who could sell Apple products on the site.”


There are now several Shazam-for-art apps: “Magnus is part of a wave of smartphone apps trying to catalog the physical world as a way of providing instantaneous information about songs or clothes or plants or paintings. First came Shazam, an app that allows users to record a few seconds of a song and instantly identifies it. Shazam’s wild success—it boasts more than a billion downloads and 20 million uses daily, and was purchased by Apple for a reported $400 million last year—has spawned endless imitations. There is Shazam for plants or Shazam for clothes and now, Shazam, for art. The art-oriented apps harness image recognition technology, each with a particular twist.

“Magnus has built a database of more than 10 million images of art, mostly crowdsourced, and aims to help prospective art buyers navigate the notoriously information-lite arena of galleries and fairs. Other apps are geared toward museumgoers: Smartify, for example, takes an educational approach, teaming up with museums and sometimes galleries to upload digitized versions of their collections, wall texts, and information about artists.”

Kenshō Health wants to be “the antithesis of Goop” by offering an evidence-based holistic health platform: “[It’s] an invite-only subscription-based platform for holistic healthcare providers to list their services and share knowledge. The startup has also collected information to construct a research-backed guide to holistic health, something the team believes has been missing from the natural health sector. Before being allowed to list their services, providers complete a background check and their provider credentials are verified. Kenshō then affirms the providers use research-backed methods and that they have vetted peer references and clients who can provide positive feedback. … 

“Many, of course, are skeptical of natural care practices because they can be untested or dependent on unscientific principles. … Nonetheless, patients across the globe are turning to non-traditional methods. ‘There’s been a massive shift in the zeitgeist in the way people look at health,’ she adds. ‘One in three people have paid for supplemental care out of pocket from a holistic health provider.’”

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Having a down round can send a startup into a tailspin: “A big part of the problem is that for current and future customers, as well as potential investors, a startup’s valuation is the easiest thing to measure and thus it dictates the perception. A more complicated story about what’s happening inside a startup’s business isn’t very marketable. ‘It’s much harder to talk about the per-share price, or about dilution, or about a founding CEO leaving,’ says the co-founder of a California-based analytics venture that went through a down round after its founding CEO left the company with a big chunk of equity. Still, founders who refuse to let go of their valuations have found the alternatives can be much more damaging in the long term. Some companies, to avoid a down round, will accept terms with liquidation multiples that promise to double or triple investors’ returns. Even with a big exit, such onerous terms could mean you run out of money before your employees see any gains from their shares.”

Anokion, a developer of an antigen-specific immunotherapy, raised $40 million in a Series B round.

Caper, a developer of an AI-powered shopping cart, raised $10 million in a Series A round.

Dutchie, a developer of an online marketplace that connects consumers to local dispensaries, raised $15 million in a Series A round.


Hanisya Massey, owner of Higher Ground Enterprises, has a brand name issue with similarly named Higher Ground Productions, owned by Barack and Michelle Obama: “[The Obamas] wanted to trademark their company’s name, but the United States Patent and Trademark Office had deemed it too similar to the mark Ms. Massey registered in 2017 for her computer training company. Higher Ground Productions was looking to strike a deal. So began the dispute, which escalated from an initial note sent by the Obamas’ lawyer to requests by Ms. Massey for onscreen roles in their productions and, now, an attempt by the former president and first lady’s company to have Ms. Massey’s trademark wiped off the books. … 

“Higher Ground Enterprises started training people to use computers more than 10 years ago, Ms. Massey said. Her inspiration for the name stems from her clients, who she said wanted to be on a ‘higher playing field.’ Now, Ms. Massey said, her company’s services include consulting, photography, videography, e-books and other learning materials. It was her father who encouraged her to trademark Higher Ground Enterprises, telling Ms. Massey, ‘you just never know.’ The Obamas’ Higher Ground Productions has successfully found resolutions with other similar trademark holders, the company’s trademark lawyer, Jim Vana, said in a statement. But with Ms. Massey’s company, the Obamas have hit a snag.”

President Trump has called, in a tweet, for the Fed to cut interest rates below zero: “In doing so, he urged the central bank to adopt a policy that its counterparts, including the European Central Bank and Bank of Japan, have used as an emergency measure to shore up weak economies. Given that the Federal Reserve is presiding over a strong economy, it is unlikely to acquiesce. The Fed is expected to make a modest quarter-point cut at its meeting next week as it tries to guard against growing uncertainties, lowering its policy rate to 1.75 to two percent. But it is also unclear whether the Fed could practically and successfully use negative rates to stimulate the economy. Commercial banks usually earn interest on the extra reserves they keep at central banks, like the Fed or the European Central Bank. Negative policy interest rates force them to pay to keep money in those accounts, a penalty aimed at pushing them to lend more and goose the economy.”

While the US economy continues to expand, median household incomes have remained unchanged, according to the Census Bureau: “The median household had income of $63,179 in 2018, not statistically different from the 2017 median, the Census Bureau said. On an inflation-adjusted basis, Americans families are earning just 2.7 percent more than they did in 1999, when median household income stood at $61,526, or 2007, when the median household income was about $61,000. The data illustrate why four in 10 Americans sometimes face what economists call ‘material hardship,’ struggling to pay for basic needs such as food and housing. While income has barely inched upwards during the past two decades, costs for essentials such as health care and housing has soared, pinching budgets for many Americans.”


Payments processor Square has applied for a banking license, but argues it should get a tax break because it’s a technology company: “The San Francisco-based payments processor filed a lawsuit last week against its home city to recover $1.3 million in taxes, plus interest and attorneys’ fees. Square argued that San Francisco was wrong to classify it as a financial company for tax purposes because it is a technology company that should be subject to a lower tax rate. San Francisco charges financial-services companies a tax rate between about 0.40 percent and 0.56 percent of their gross receipts. Tech companies pay between about 0.13 percent and 0.48 percent. 

“Financial-technology companies have been darlings of Silicon Valley in recent years. Startups such as Robinhood Markets Inc., Social Finance Inc. and Stripe Inc. have raised oceans of venture capital and succeeded in convincing investors that they should be valued more like makers of software than the established payments, lending and wealth-management businesses from which they are trying to take market share. Square’s legal action takes that argument to another level.”


Halo Top, a manufacturer of low-fat and non-fat ice cream was acquired by Wells Enterprises, a manufacturer of ice cream. 


T. Boone Pickens was one of the reasons American corporations are so focused on short-term profits: “Using his own Mesa Petroleum Company as his financial vehicle, Mr. Pickens launched takeover bids for much larger oil firms, including Gulf Oil, Phillips Petroleum and Unocal. None of these attempts succeeded, and Mr. Pickens railed against his corporate targets for adopting tactics, like ‘poison pills,’ that made hostile takeovers prohibitively expensive. (Years later, when Mesa was under threat, he didn’t hesitate to use the same poison pill tactic.) But he still managed to extract hundreds of millions of dollars in profits by getting these companies to buy back their shares from him at a premium in exchange for promises that he would just go away. The efforts of raiders like Mr. Pickens helped profoundly change American corporations by forcing management to acknowledge the supremacy of the shareholder.”

Joan Johnson founded haircare and cosmetics company Johnson Products and ran the first black-owned business listed on the American Stock Exchange: “At a time when few companies paid much attention to black consumers, the Johnsons made a fortune with hair-care products aimed at black customers, beginning with a hair relaxer for men that Mr. Johnson developed while working for a cosmetics company. In 1954, with a partner, a barber who soon dropped out, they formed the company that became Johnson Products. In the 1960s, it had an estimated 80 percent of the black hair-care market, and by 1970 it had annual sales of $12.6 million. In January 1971 it went public. … The company weathered changes in styles over the years and competition from larger companies like Revlon and Avon that discovered the black consumer. It also weathered a government decree in the mid-1970s that ordered it to clearly label products that contained lye as possibly causing burns, hair loss and eye damage if not used properly. … 

“‘When I think about pioneers, the real pioneers are the people who are able to make a path where none exists,’ Eric Johnson told CNN. ‘Johnson Products in many ways was that company. She and my father had no provided path. They created a path where there was none.’”

And that’s what’s ahead.

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