The Slack Backlash, San Francisco’s Challenges, and FedEx Slashes Prices

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POLICY

Ravelry, the “Facebook of knitting,” has banned positive references to Donald Trump from its site: “‘We cannot provide a space that is inclusive of all and also allow support for open white supremacy,’ the site said. ‘Support of the Trump administration is undeniably support for white supremacy.’ … The ban cuts across all aspects of the site, including ‘forum posts, projects, patterns, profiles’ and anything else, the announcement said. Administrators explained project data would be saved and delivered to the user if they violated the new terms, and anyone permanently banned could still access patterns they have purchased. But they also stressed the site was not endorsing Democrats and shunning Republicans with its move. ‘We are definitely not banning conservative politics. Hate groups and intolerance are different from other types of political positions,’ Ravelry said, warning users not to goad others into voicing support for Trump.

“Ravelry, a private site created in 2007, has transformed from a niche discussion board to a digital marketplace where users can sell their wares and swap patterns in a global community. The site has registered eight million users, The Post previously reported, and has caught the eye of researchers interested in microbusinesses spawned by hobbyists turned entrepreneurs, many of whom start their own shops after finding solidarity and confidence in offline ‘stitch n’ bitch’ groups.”

LOCATION, LOCATION, LOCATION

The San Francisco Chamber of Commerce is struggling to react to the city’s changing circumstances: “The venerable chamber, founded during the Gold Rush, must adjust to the fast-changing character of the city, as tech companies proliferate and street filth and soaring prices threaten companies large and small. [Chamber CEO Rodney] Fong hears continuously about how crazy street behavior, feces and drug use make workers feel unsafe. The streaming music company Spotify, for example, left its Mid-Market office last year, with former employees saying the move was motivated in part by an assault on an employee near the building.”

But California Gov. (and former San Francisco mayor) Gavin Newsom is tired of hearing about it: “‘I can’t read a damn article about this city anymore without ‘poop maps’—give me a break,’ Newsom said in reference to coverage of San Francisco’s homeless defecating in the streets. In addressing the Bay Area Council’s Pacific Summit in San Francisco on June 21, the city’s former mayor was equally exasperated by magazines’ popular state rankings for favorable business environments in which California often lands in or near last place.

“‘I see that CEO Magazine [named us the] worst place in America to do business and yet our GDP growth outperforms every damn one of those other states they highlight,’ Newsom said, citing California’s strong economic growth averaging 3.8 percent in the last five years. ‘Eat your heart out Texas, Tennessee—that’s always their top one and two. They didn’t come close to that.’”

TECHNOLOGY

Is Slack improving productivity or ruining it? “The software suffers from its own ease of use. It’s meant to enable its 90,000 paid users—and the 500,000 organizations using the software for free—to collaborate and communicate with their colleagues and navigate a central repository of knowledge. But due to the surfeit of communication Slack creates and the interruptions that causes, the very system meant to facilitate work actually prevents users from getting work done, causing a slew of other issues.

“‘When you prioritize streams of information, you deprioritize deep, thoughtful communication,’ Sarah Peck, founder and executive director of the online community Startup Pregnant and a regular Slack user, said. ‘Urgency trumps importance.’ This tension could spell trouble for Slack’s nascent business, and it’s already given rise to numerous anti-Slack competitors, as well as thousands of third-party Slack apps meant to make it better.”

LOGISTICS

FedEx is slashing its prices as it tries to fill its planes and adjust to the e-commerce economy: “The shipping giant, which is ending an air-shipping contract with Amazon.com Inc. later this month, is cutting prices for some customers of its Express network, according to people familiar with the matter. That includes offering guaranteed two-day air service for the same price as shipping items through its Ground division, the people said. The deals are being given to try to win over shippers from FedEx rival United Parcel Service Inc. and to get them to switch from what has historically been a lower-price shipping option in FedEx Ground, these people said. …

“The problem for FedEx is that its legacy air network, where shippers pay premiums to have goods delivered by 8:00 a.m. or 10:30 a.m., wasn’t built for e-commerce. For customers ordering online, it is more important to deliver shipments by a particular day rather than by a particular time. The e-commerce revolution also has put distribution centers much closer to where people live, reducing the need for quick, cross-country flights to meet delivery commitments. Amazon has about 400 fulfillment centers, sorting centers and air hubs in the US, according to supply-chain consultants MWPVL International Inc. Other retailers are using neighborhood stores to pack and ship orders placed online, so their shipments travel dozens, not hundreds, of miles.”

CRYPTOCURRENCY

Could Facebook’s Libra undermine economic stability? “Although the move of big tech firms such as Facebook, Amazon and Alibaba into financial services could speed up transactions and cut costs, especially in developing world countries, it could also undermine the stability of a banking system that has only just recovered from the crash of 2008. Echoing warnings from many tech experts, the Bank for International Settlements said that while there were potential benefits to be made, the adoption of digital currencies outside the current financial system could reduce competition and create data privacy issues.

“Chris Hughes, a co-founder of Facebook, last week added his voice to concerns being expressed over big tech’s move into finance, warning that Libra could shift power into the wrong hands. Hughes, who is co-chair of the Economic Security Project, an anti-poverty campaign group, said: ‘If even modestly successful, Libra would hand over much of the control of monetary policy from central banks to these private companies. If global regulators don’t act now, it could very soon be too late.’”

FOOD AND BEVERAGE

Some hot new craft beers contain no alcohol: “When Athletic Brewing Co. offered its nonalcoholic limited-edition Double Hop IPA for sale online last week, it sold out in 32 seconds. ‘We’ve actually been totally overwhelmed and shocked by how strong the nationwide online demand is,’ says Bill Shufelt, co-founder of Athletic Brewing Co., which produces only nonalcoholic brews. The brewery releases small batches, 50 to 100 cases at a time, and it has been expanding quickly. ‘We recently doubled our capacity and footprint,’ Shufelt says of the Connecticut-based company, which also sells its brews on tap and in cans at about 25 breweries and many additional bars in the Northeast.

“[A] survey by analysts at Bank of America last year found that 22 percent of Millennials say they’re drinking less—and when asked why, the majority said that increased concerns about health and wellness are driving this behavior change … Two years ago, when Shufelt and his co-founder, John Walker, were getting Athletic Brewing Co. off the ground, Shufelt says, his goal was to ‘give people a cool way to moderate [their drinking] … and to provide people who are sober comfort in being sober,’ by giving them more options when they’re out socializing.”

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STARTUPS

Boston-based Smoodi is betting that free smoothies will keep office employees happy: “The company is designing an automated smoothie-making station for offices, and for a recent eight-week stretch, it had a machine in place in a kitchen at Boston Consulting Group, to see how it would perform under real-world stresses. … Not surprisingly, it turns out that employees love free smoothies. … And in a low-unemployment era when pingpong tables, espresso machines, and nap rooms are already part of the office culture that attracts and retains employees, employers are looking for new kinds of perks to offer.”

Scientists are speaking out against startups that sell wearable accessories claiming to connect to your brain and improve function: “A study published in Neuron found 41 ‘neurotechnology’ products currently for sale that target either the general public or some particularly vulnerable subset—like children, the elderly, or people with a medical condition. Only 33 provided any supporting research, the study found. And just eight referred to relevant peer-reviewed research. … ‘This is a case where industry has run away with something because people are willing to pay money for it—but regulation and validation completely lags behind,’ [Karola] Kreitmair, University of Wisconsin professor, tells Axios.” 

SUSTAINABILITY

With waste management facilities projected to be an $80 billion market 2022, Japan wants to be Southeast Asia’s garbage man: “[Japan’s] environment ministry has set aside about $18.6 million (¥2 billion) in its fiscal 2019 budget for a public-private consortium that will develop proposals and bid on waste management deals in Southeast Asian nations, most of which face serious pollution challenges. The goal is to win contracts for Japanese companies and some goodwill. … Japan will help its own companies sell trash conversion plants—and comprehensive waste management plans—in the hopes of cornering the market before China. … Japan is offering service packages that include waste disposal systems, personnel training, and recycling, targeting the specific needs of individual countries. To do this, the ministry is putting together private companies, such as Hitachi Zosen, JFE Engineering, Mitsubishi Heavy Industries, and members of municipal governments in regions with expertise in different aspects of trash management, like collection and separation.”

OXFORD STRATEGIC ADVISORY DEAL OF THE DAY  

Data Plus Math, a developer of a video analytics platform for advertising campaigns, was acquired by LiveRamp, a developer of a data onboarding platform, for $150 million. “In recent years advertisers have begun using targeting technology to serve television ads specifically to viewers most likely to be interested in their products. Data Plus Math marries viewership data with other information on viewers—such as income levels, purchase history and web-browsing behavior—to help advertisers understand who saw their TV commercial and whether those viewers made a purchase afterward.”

PRIVATE EQUITY

Petroleum Service Corporation, a provider of logistics services for the petrochemical, refining, midstream and marine transportation services, was acquired by Aurora Capital Group through a $335 million LBO. The company was a subsidiary of SGS, a testing, inspection and certification company.

HUMAN RESOURCES

The BuzzFeed unionization fight is one of several labor scuffles between digital media publishers and staff: “In joining with unions, reporters and editors at online publications are following in the footsteps of their print predecessors. Now that digital media has matured, digital journalists have dropped the we’re-just-happy-to-be-published attitude that once sustained them. ‘People want a career,’ said Hamilton Nolan, a staff writer at the website Splinter, who helped lead the Gawker union drive. ‘They don’t just want to jump every couple years from job to job.’

“The trend was in evidence on Friday when workers at Vox Media, whose holdings include SB Nation, Eater, The Verge and the namesake news site, ratified a new contract after more than a year of bargaining. In an email to the staff, the chief executive, Jim Bankoff, announced that the company would extend certain features of the union contract—such as a 16-week leave for new parents and a new emphasis on diversity—to all employees.”

INTERNATIONAL

Austerity measures in the UK have hammered communities but also ignited much of their reinvention like the formerly industrial town of Preston: “In what has come to be known as the Preston model, the local government and other institutions began directing government spending toward local businesses. The city raised salaries for municipal employees, ensuring that they earned a living wage. Local leaders replaced an aborted shopping mall construction project with a retro-chic market that has become a magnet for new businesses. They have aided cooperative businesses, including a farm-to-table-cafe that aims to boost the market for local produce while training people for jobs in the hospitality industry. In short, Preston has exploited austerity as a catalyst for self-sufficiency.”

RETAIL

Toys “R” Us is coming back in a small way: “The retail company will open half a dozen US locations this holiday season, as well as launch an online shop … However, the new stores won’t be like the cavernous spaces they used to occupy. Instead, they are downsizing to 10,000 square feet, saving room for play areas in order to enhance the shopping experience. Stores may also implement a consignment inventory model whereby toymakers will only get paid for goods they’ve shipped if the consumers actually buy them.”

SPOTLIGHT 

The next Oxford Commerce Dinner will be Thursday, July 18 at Ray’s on the River in Atlanta. Come, introduce yourself, and spend an evening comparing notes with other Oxford members. The next morning, Friday July 19, we will hold an Intensive Roundtable discussion at Roam in Buckhead. The conversation will run from 8:30 to 10:30, and the topic is “Finding a No. 2 Who Can Do.” Space is limited so please RSVP for both events ASAP: events@oxfordcenter.com.

And that’s what’s ahead.

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

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