The Problem with Goop, The Business of Names, The Trade War Fallout Builds

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HUMAN RESOURCES

After studying patent examiners, a Harvard Business School study concludes that when companies let employees work remotely, they increase productivity, reduce turnover and lower organizational costs: “The program transitioned patent examiners to a work-from-anywhere policy over 24 months, shifting new examiners each month based on union-negotiated quotas. This implementation process enabled Choudhury and his co-authors to avoid what is known as the selection problem in social science research.’The concern is that there is some underlying characteristic of people that is driving whether one wants to become a remote worker, and that characteristic is also correlated to productivity,’ explains Choudhury. … 

Choudhury and his coauthors compared 600 examiners’ productivity under these various conditions. While working remotely, productivity increased among all examiners and continued to rise with each step toward the full work-from-anywhere policy, the researchers found. Productivity increased 4.4 percent when employees moved from working at home on a limited basis to the location of their choice. Based on a patent’s average value, this productivity gain could add $1.3 billion of value to the US economy each year, the researchers estimate.”

Companies are having a much harder time getting guest worker visas approved, but the H-1B program has long had issues: “Ron Hira, a professor at Howard University who has been looking at the H-1B visa program for years says this is the first time since the program began 30 years ago that the government is actually enforcing standards. Hira pointed to a 2015 scandal in which Southern Cal Edison’s American IT workers were laid off and asked to train H-1B visa employees who took their jobs as an example of how the program is in need of reform. ‘The H-1B program is rife with abuse and exploitation, but prior administrationsboth GOP and Democraticessentially rubber stamped petitions,’ he said. ‘I’m sure employers don’t like the increased scrutiny but that doesn’t mean the government is doing anything wrong.’”

RETAIL

A fashion writer spent $1,279 of The Atlantic’s money to try all things Goop, the $250 million wellness empire started by Gwyneth Paltrow. It included creams, crystals, supplements, and a vibrator, and it did not go well: “Goop most often makes headlines when it attempts to mainstream fringe health practices by, say, selling chunks of crystal intended for vaginal insertion or hosting talks by controversial doctors, like one who claims that depression is a nutritional ailment. But Goop is primarily oriented around wealth and its trappings, particularly luxury fashion. Goop launched in 2008 as a newsletter for Paltrow’s travel and shopping recommendations, before transmogrifying into a $250 million retail, ‘content,’ and events business. A third of the store in front of me was dedicated to casual gold and diamond jewelry. Two rare Hermes handbags were displayed behind glass. …

“Instead of questioning long-standing assumptions about women’s bodies, as Goop often claims is its goal, the company’s products embrace one of America’s oldest health myths: that physical beauty is proof not only of a person’s health but of her essential righteousness. If the outside is perfect, the inside must be too. It’s a retrograde vision of womanhood for a company that so frequently deploys the word empowerment. It’s also a clever bit of vertical integration. Some companies sell weight-loss products; others, the clothes you get to wear after you conscientiously starve yourself. Few companies sell both.”

MARKETING

Darpan Munjal couldn’t find a name for his startup, so he started a business to solve that very problem: “I’d had enough experience in corporate and decided to do something on my own. I knew how important it was for entrepreneurs to choose a great name for their company. It needs to be catchy and to stand out from the competition’s. Preferably short. Easy to spell and to remember. Not hard to pronounce. And it must allow consumers to connect the name, directly or indirectly, with what the brand stands for. Just as important, if not more so, is avoiding name-related intellectual property issues and trademark conflicts.

“But I realized I’d under­estimated the difficulty of the naming process when I tried coming up with a name for the e-commerce company I wanted to launch. Every dot-com domain I considered was either unavailable or didn’t meet my criteria. Frustration led me to ask for suggestions on various online market-related discussion forums. The ideas the participants shared were limited—the sub­missions seemed more about having fun. I soon knew I needed a controlled platform on which competition and cash awards would incentivize people to submit high-quality names. I registered the domain Squadhelp.com and spent several months building the platform. …

“Over the next few years, we added many features to the platform to ensure the quality of the names. Increased word of mouth led to our getting Fortune 500 clients, including consumer brands and hotel chains. I sometimes wonder what the outcome might have been had I put all my energies into the company from the start. I completely missed how big this opportunity was.”

Is Instagram becoming the new mall? “The Information reported Aug. 22 that when Facebook started cracking the whip on Instagram last year to push the app to bring in even more profit, it ordered the photo-sharing app to double the number of ads on the platform. Scrolling through my Instagram feed last week, I found that for every three regular posts, one was an ad. On Stories, it varied, with ads sometimes showing up between every two, three, or four Stories. As of this year, there are also now ads in the Explore tab, where users discover posts from accounts they don’t follow.

“The company has also been making it easier to buy directly on Instagram, introducing Checkout, where users can purchase products right from brand posts and influencers on Instagram, without ever exiting the app. Companies can also now inject posts from influencers hawking their products into your feed as ads, even if you don’t follow the brand or influencer. And it seems like consumers are on board with the changes. A survey by analysts at Deutsche Bank showed that 39 percent of those who had used Checkout cited its ‘ease of use’ as the draw, while 59 percent of users have clicked on a sponsored link for a product.”

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TRADE

US sales of lobster to China have taken a dive: “China, a huge and growing customer for lobster, placed heavy tariffs on US lobsters—and many other food products—in July 2018 amid rising trade hostilities between the Chinese and the Trump administration. Meanwhile, business is booming in Canada, where cargo planes are coming to Halifax, Nova Scotia, and Moncton, New Brunswick, to handle a growing bump in exports. Canadian fishermen catch the same species of lobster as American lobstermen, who are based mostly in Maine.

“The loss of business has brought layoffs to some Maine businesses, such as The Lobster Co., of Arundel, where owner Stephanie Nadeau has laid off half the 14 people she once had working in wholesale. ‘They picked winners, and they picked losers, and they picked me a loser,’ Nadeau said. ‘There is no market that’s going to replace China.’”

Farmers are losing patience with President Trump’s trade war: “More than a year into the trade dispute, sales of American soybeans, pork, wheat and other agricultural products to China have dried up as Beijing retaliates against Mr. Trump’s tariffs on Chinese imports. Lucrative contracts that farmers long relied on for a significant source of income have evaporated, with Chinese buyers looking to other nations like Brazil and Canada to get the commodities they need. Farm bankruptcy filings in the year through June were up 13 percent from 2018 and loan delinquency rates are on the rise, according to the American Farm Bureau. … [Trump] recently dismissed sales of American wheat, suggesting Japan was buying it only as a favor to the United States. And his frequent tweets insisting that ‘farmers are starting to do great again’ have rubbed some agriculture groups the wrong way.”

HEALTH CARE

North Carolina’s health care system is getting rid of the fee-for-service structure and “[instead], providers will often be paid based on health outcomes like controlling diabetes patients’ blood sugar or heart patients’ cholesterol. The better the providers do, the more they can earn. If they perform poorly, money could eventually come out of their pocket. … The new payment model pushes them to do even more on both fronts—and do it in a more systematic way, like asking patients detailed screening questions about depression, alcohol consumption, food and housing. So on annual wellness visits, the doctors now spend more time with patients, and receive an extra $20 in addition to the clinic’s standard charge of about $150. In total, the state’s changes are likely to increase the share of total health care dollars that go to primary care physicians. …”

STARTUPS 

Fashion recommendation app Stylitics assists online shoppers in putting together outfits with help from consumer data: “[When] you look at this blouse on the LOFT website or this shirt on the Banana Republic site, Stylitics is powering the ‘Ways to Wear It’ and ‘Wear It With’ widgets recommending other products that you could purchase to complete the outfit. The company said it’s drawing on brand merchandising guidelines, engagement and purchase data from the retailer, broader trend data and stylists’ expertise to create these recommendations, which are updated as products sell out. In an email, founder and CEO [Rohan Deuskar] added that Stylitics is able to provide useful recommendations from the start, without requiring time to train with a retailer’s data. … Stylitics says it has driven $300 million for its retail partners—a group grown in the past year to include Ann Taylor, Calvin Klein, Chico’s, Gap, Kohl’s, Macy’s, Under Armour and White House Black Market.”

SpotHero is a mobile parking app connecting drivers to parking lots and garages across North America with a uniform system: “Its secret sauce is its software, which can sit on top of the 40 or so different point-of-sales systems used by parking garages. … It has locked in more than 900 distribution partnerships and integrations, including Google Assistant for voice-enabled parking and Waze in-app navigation to parking. … The service aims to be a one-stop shop for car sharing and commercial fleets to handle all that goes into ensuring there is access and the right number of designated parking areas on any given day within SpotHero’s large network of 6,500 garages across 300 cities.”

Survivor Ventures, a Virginia-based non-profit, hopes to turn human trafficking survivors into entrepreneurs: “The program starts by giving participants and their children a safe place to call home. That means an apartment in a safe area, fully furnished by community donations. For the first three months, Survivor Ventures covers 100 percent of rent. After three months, they cover 75 percent and so on, until the participant can cover the cost on their own. Next, Survivor Ventures partners with a local small businesses to employ the victim. ‘When I say small business, I mean really small mom and pop businesses,’ explained Tiffany McGee, the nonprofit’s executive director. ‘They might not be at the point where they can hire their first employee. That’s where we come in. We provide the employee. We provide the wages, helping the small business owner get to a point in their business development where they can organically hire their first employee.’ While employed at the small business, participants will gain valuable experience and knowledge to one day start their own venture. For many, this is the best if not the only option for survivors in Virginia.”

REGULATION 

Airbnb’s policy is that it won’t reveal a host’s address until a booking has been made. But city legislators have sparked “a cottage industry of tech companies dedicated to uncovering the exact addresses of Airbnb and HomeAway properties … and is paying human contractors to find these addresses using Google Maps, Zillow, White Pages, Facebook, and other online sources and give them to governments, Motherboard has learned. City governments say they need these addresses to make sure Airbnbs are in compliance with local regulations. ‘It is essentially doxing for money,’ one contractor [said.]” 

OXFORD STRATEGIC ADVISORY DEAL OF THE DAY  

Pros Holdings Inc., a technology firm, has acquired Travelaer SAS, a travel tech firm. The company was acquired for reportedly $12 million. “The acquisition of Travelaer brings an internet booking engine and a new distribution capability platform to the Pros portfolio.”

VENTURE CAPITAL

Scalarr, a developer of a platform to provide anti-fraud services, raised $1.5 million in an Early Stage VC round.

And that’s what’s ahead.

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

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