The Sublet Economy, How to Sell Cars People Can’t Afford, and Walmart and Target Try to Outgreen Each Other

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CYBERSECURITY

Smaller medical providers are getting burned by ransomware: “Cyber attacks like this are pummeling doctors, dentists and community hospitals around the country, causing some to turn away patients and others to close their doors permanently. Health organizations are an attractive target for cybercrime thanks to their valuable medical and billing information, said Jennifer Barr, a health care analyst at Moody’s Corp. The data can be sold for insurance-fraud purposes or it can be locked up and used to extort money from the affected health organization, she said. Smaller health care organizations are at greater risk because they generally don’t have the resources for robust security tools and might not have a dedicated cybersecurity specialist to monitor and patch their systems, Ms. Barr said. 

“Last year, about 57 percent of medical practices in the US had 10 or fewer physicians and about 15 percent were run by solo practitioners, according to the American Medical Association. Three Alabama hospitals have been operating under emergency procedures since a cyberattack on Oct. 1, spokesman Bradley Fisher said Friday. The hospitals—DCH Regional, Northport and Fayette—are part of the same system and share IT resources. ‘Everybody is familiar with [the emergency procedures] but you obviously don’t want to do it for days,” Mr. Fisher said. There is no forecast for when the hospitals will be functioning normally, he said.”

MANAGEMENT

The Harvard Business Review thinks you need more sleep: “In the first study, we compared 784 practicing entrepreneurs to each other and asked them to report their sleep the previous night. Each person then read three new venture executive summaries. These summaries were independently rated for quality by a panel of expert entrepreneurs and investors, and our coauthor team categorized both superficial (obvious) and structural (non-obvious) alignment between the new technology and the intended market. Two of the three ideas had both superficial and structural alignment, meaning that these ideas were more promising for commercial success. One of the new venture ideas showed superficial alignment between the technology and market, but had real structural problems, meaning this idea should be less promising compared to the other two. Compared to well-rested entrepreneurs, entrepreneurs who slept less the previous night frequently ranked the ill-conceived idea above one or both other two ideas. This suggests that entrepreneurs who are short on sleep rely more on superficial cues when forming initial beliefs about new venture ideas.”

Judi Townsend has made a business out of collecting throwaway mannequins: “Over nearly 20 years, Townsend carved out a niche as the go-to source for department stores looking to get rid of old display models. In the process, she created an innovative model that turned what would otherwise be trash into a thriving, $1m-per-year business. … Townsend’s first plan of attack was to launch a website — a fairly rare move for a small business in the year 2000. Then, she cold-called every department store within a 50-mile radius. During these conversations, she learned something interesting: Department stores were thrilled to find someone to take old mannequins off their hands. Mannequins were typically purchased new from manufacturers in China and used in stores for around 5-7 years before getting replaced with new ones, at which point the store would pay $800+ in disposal fees to have them carted off to a landfill. … 

“Townsend realized that instead of traveling to get the inventory and store it in her house, she could find used mannequin sellers in other states and set them up with big retailers’ free mannequin inventory. For her services, she charged a small per-mannequin finder’s fee. Soon, she was running one of the biggest mannequin brokerage firms in the country from a basement in Oakland. … Depending on quality, condition, and the level of craftsmanship, her mannequins run from $40 to $200+.”

FINANCE

Bank of America says it has passed Wells Fargo as the nation’s biggest lender to small businesses: “To Sharon Miller, head of small business at Bank of America, continued growth among its small business clients means improving digital offerings. The bank differentiates from online-only players through staff members who are small business specialists, resources it eventually intends to deploy to all 4,300 of its branches. Looking ahead, the bank wants to be the financial pillar of all of its small business banking customers’ needs, folding all of their business and personal financial accounts into one place. ‘We don’t say, apply today [for a loan], get approved tonight—that’s not how we do business,’ said Miller. ‘We want to know the business, we want to know the company and that’s how we’re able to provide the right loan at the right pricing at the right time.’ … To this end, earlier this year, the bank rolled out cash management tool Business Advantage 360, a digital platform accessible through desktop and mobile interfaces that offers real-time cash flow updates and projections.”

THE ECONOMY

Inexpensive financing is helping America’s middle class buy cars they can’t afford: “Incomes have risen at a sluggish pace in the past decade, but car prices have grown rapidly. New technological and safety features, such as larger and more sophisticated multimedia displays, have made even the most basic cars more expensive. US consumers have also veered toward pricier rides such as sport-utility vehicles that tend to dominate auto showrooms. The result is that consumers are seeking bigger loans than ever to purchase a car.

“A lending machine has revved up in response, making it possible for more Americans to procure a vehicle by spreading the debt over longer periods. Wall Street investors snap up these loans, which are bundled into bonds. Dealers now make more money on the loans their customers take than on the cars they sell. For many Americans, the availability of loans with longer terms has created an illusion of affordability. It has helped fuel car purchases that would have been out of reach with three-, five- or even six-year loans. … As a result, a growing share of car buyers won’t pay off the debt before they trade in their cars for new ones, either because the car is in need of repairs or because they want a newer model. A third of new-car buyers who trade in their cars roll debt from old vehicles into their new loans, according to car-shopping site Edmunds.”

STARTUPS

In the “sublet economy,” pretty much everything you own can be turned into cash: “Boatsetter is among a growing number of startups forging new rental marketplaces for luxuries like boats, extra bedrooms, or backyard space. Call it the sublet economy. Everything you own can become a source of extra income, and everything you want to rent can be leased from a friendly stranger. The model was pioneered and popularized by Airbnb, the now-ubiquitous home-rental platform. … Now, the rental economy is everywhere, and for everyone. There are Airbnb-style marketplaces for cars (Turo), for garage storage (Spacer), for private jets (Jettly). You can rent someone’s bed for a midday nap (Globe) or even take a dip in someone’s pool (Swimply).”

Google is considering buying a TikTok knockoff: “Google is weighing a deal for Firework, a free smartphone app for users to share 30-second homemade videos with strangers. Like TikTok, Firework tries to surface viral, edited videos from unlikely sources, though Firework aims for an older audience than its better-known competitor out of China that is big among teens. Firework, based in Redwood City, Calif., was valued at more than $100 million in a fundraising round earlier this year, and any acquisition would come at a premium. Google and Firework haven’t yet discussed pricing, the people say. … Google isn’t alone in moving into the short-video space. TikTok’s rapid ascendance in the US, particularly among teens, alarmed Facebook executives, who launched a similar app called Lasso in 2018. Snap, too, has rolled out new features.”

Former Navy SEALs have started a business to help people cope with active shooters: “One of our first clients was Jersey City, New Jersey. They wanted us to assess their tactical teamstructure, equipment, everything. We didn’t want to be the kind of company that comes in, trains a few officers for three days, and leaves. We wanted to get our hands on training your whole teamget them integrated with patrol officers, work with the paramedics and firefighters, set up a rescue task forceand then test that. We did that for Jersey City, and then set up a full-blown training exercise at Newport Centre mall there, so they experienced all that integration of different responding authorities, and got to work face-to-face with officers they wouldn’t have unless a situation arose. … Sixteen months laterthis past Januarythere was a report of an active shooter at Newport Centre. It was gang violence up on the third floor, in the food court. Law enforcement came in using the training that we’d set up for them, and the only people injured were the instigators.”

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SOCIAL MEDIA
TikTok has banned political advertising on its platform: “‘While we explore ways to provide value to brands, we’re intent on always staying true to why users uniquely love the TikTok platform itself: for the app’s lighthearted and irreverent feeling that makes it such a fun place to spend time.’ To keep things lighthearted and irreverent, the company announced today that it will not allow political ads on TikTok, no matter how cool those politicians and their platforms think they are. ‘Any paid ads that come into the community need to fit the standards for our platform, and the nature of paid political ads is not something we believe fits the TikTok platform experience,’ [Blake Chandlee, TikTok’s VP of global business solutions wrote].”

HUMAN RESOURCES

The GM strike is back in full swing as talks between the automaker and UAW declined: “GM made an offer to the union that basically repeated one the UAW had previously rejected, Terry Dittes, the UAW vice president in charge of the GM department, said in a letter to members. … Dittes said the UAW made an offer on Saturday to GM that covered wages, signing bonuses, job security, profit sharing and other issues. He said GM responded on Sunday morning with its counteroffer, which ‘did nothing to advance a whole host of issues.’ … One key issue is around assembly of future vehicles. The UAW wants GM to make commitments on future products it would build in various plants beyond what has currently been offered, said a person familiar with the talks who asked not to be identified.”

OXFORD STRATEGIC ADVISORY DEAL OF THE DAY  

Alteryx, an analytics company, has acquired Feature Labs, a machine learning startup.

VENTURE CAPITAL

Graident AI, a developer of a predictive analytics platform, raised $6 million in a Series A round.

Bird Rides, a developer of a vehicle-sharing platform designed to provide affordable transportation solutions, raised $275 million in a Series D round. The valuation of the company is now $2.77 billion.

MARKETING

On their rooftops, Walmart and Target are trying to outgreen each other: “At a time when the federal government is increasingly stepping away from addressing issues like sustainability and climate change, corporate America is stepping up. Retail giants from Target to Walmart to Amazon; and tech titans from Apple to Google to Facebook, are taking action to respond because it’s good for business and good for corporate image. For many consumers, addressing core issues like climate change and sustainability go hand-in-hand with attracting their business.

“Going green has never looked so good—or cost so little. Solar power is almost 90 percent cheaper than it was 10 years ago and wind power is about 70 percent cheaper, said Gregory Wetstone, president and chief executive of the American Council on Renewable Energy, a nonprofit that promotes the transition to renewable power. That explains why companies in the United States purchased three times as much power generated from solar and wind energy in 2018 than they did the year before. ‘Every aspect of retailing’s machine is going to be modernized and ultimately energized green,’ said Marshal Cohen, chief retail industry analyst at The NPD Group, a research and consulting specialist. This green evolution not only applies to energy use, but everything from packaging to fuel consumption during delivery, he said.”

SUSTAINABILITY

The non-profit Ocean Cleanup announced it is cleaning up plastics from the Pacific garbage patch: “[Its] latest prototype was able to capture and hold debris ranging in size from huge, abandoned fishing gear, known as ‘ghost nets,’ to tiny microplastics as small as one millimeter. … The Ocean Cleanup system is a U-shaped barrier with a net-like skirt that hangs below the surface of the water. It moves with the current and collects faster-moving plastics as they float by. Fish and other animals will be able to swim beneath it. The new prototype added a parachute anchor to slow the system and increased the size of a cork line on top of the skirt to keep the plastic from washing over it. … It’s been deployed in ‘The Great Pacific Garbage Patch’—a concentration of trash located between Hawaii and California that’s about double the size of Texas, or three times the size of France. Ocean Cleanup plans to build a fleet of these devices, and predicts it will be able to reduce the size of the patch by half every five years.”

And that’s what’s ahead.

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