The Trade War Escalates, Introducing Your Website to Alexa, and The Best Little Steel Plant in America

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MANUFACTURING

Located on former soy fields abutting the Mississippi, Big River Steel might be the future of steel making: “The mini mill, which is producing 4,500 tons of hot-rolled steel each day or about 1.65 million per year, began operating only 31 months ago thanks to almost $1 billion in high-yield-debt financing, a slug of equity from Koch Industries, Arkansas’ teachers’ pension fund, private equity firm TPG Capital and the sheer operating zeal of a little-known investment banker named David Stickler. ‘We view ourselves as a technology company that just happens to make steel,’ says Stickler, pounding his fist on a table for effect.

“Though tiny relative to North Carolina’s Nucor, Big River is hands down the most technologically advanced and fastest-growing steel producer in North America. With only 513 employees its cash flow per employee amounts to a whopping $557,000 compared to integrated producer US Steel’s $61,000. The next most efficient mini mill competitor, Steel Dynamics, operates at $253,000 per employee. It takes just one hour for Big River to produce a 35-ton coil of hot-rolled steel compared to days at an integrated steel producer.”

MARKETING

It’s time to optimize your website for voice search: “Use multiple-word keywords. Called long-tail keywords, these have four words or more. You can use Google Keyword Planner to find them (Neil Patel has a good explanation of how to find long-tail keywords). People using voice search speak in sentences so their queries have more words than the average search. Your website content should incorporate long-tail keywords that sound like a question customers would ask. For example, a fitness studio could use long-tail keywords like ‘best health club for men’ to capture voice searchers asking, ‘Where’s the best health club for men around here?’

“Use natural language. If your website content is written in a conversational tone, it’s more likely to pop up in voice search results. Keep your website at an easy reading level such as eighth grade. Use short sentences and concise writing; voice search results typically look for quick answers. You can use the Hemingway app to check for readability and make sure your content is easy for everyone to understand. Add questions and answers on your business’s website. People using voice search ask questions like, ‘What pizza place has vegan pizza?’ as opposed to typing in keywords such as ‘vegan pizza 90210.’ Creating a FAQ page is a good way to start developing question and answer content. However, you can also create product or service descriptions, blog posts, and other content that answers questions.”

THE ECONOMY

The trade war is escalating, and markets are falling: “The United States and China traded blows in an unrestrained economic conflict Monday that sent stock markets plunging and threatened to inflict significant damage on a weakening global economy. Late in the day, Treasury Secretary Steven Mnuchin formally labeled China a ‘currency manipulator,’ a largely symbolic slap at Beijing that is likely to deepen the growing animosity between the two trading partners. 

“The move, which President Trump had promised to take on his first day in office, requires Treasury only to initiate consultations with China. Beijing has long denied US accusations that it keeps its currency undervalued to make its products more competitive on world markets. …  ‘This is a big policy mistake. We get recession because of policy mistakes like this,’ said Allen Sinai, chief economist and strategist at Decision Economics. ‘China did not actively drive its currency down. It was a market-driven move. Secretary Mnuchin’s comments are totally political.’”

RETAIL

Barneys is filing for bankruptcy protection and closing 15 locations: “Known originally for its racks of conceptual black, eclectic home wares, and willingness to follow its own aesthetic compass rather than trends, Barneys was a magnet for new designers. It was a place for consumers to discover talent, and a harbinger of the cutting edge. Its singularity and willingness to take chances on new names gave it power to demand exclusives and a certain—perhaps inflated—sense of its own importance.

“The Madison Avenue location, though, is now the immediate cause of retailer’s troubles. Barneys does not own its real estate, unlike some retailers. (Saks, for example, owns many of its stores, including its famous Fifth Avenue location.) Last August, an arbiter ruled that the annual rent at the Madison Avenue store could be raised to $30 million from $16 million. That ruling, combined with a slowdown in foot traffic and rent increases at other stores, put enormous pressure on the company. Madison Avenue accounted for a third of the company’s revenue, and at its height brought in $300 million a year in sales. For the last year and a half, however, sales have been falling.”

STARTUPS

Scale AI, Silicon Valley’s latest unicorn, was founded by 22-year-old Alexandr Wang and already counts Alphabet’s Waymo, General Motors’ Cruise, and Uber as customers: “In the autonomous-car industry, companies spend millions of dollars each year hiring people to label the pictures gathered from cameras in their vehicles. Typically, a worker sees an image pop up on a computer screen and uses a mouse to trace the outline of all the cars and categorize them in the software. Then come buildings, parking spaces, pedestrians, traffic lights, and so on. It can take anywhere from 10 minutes to a couple of hours for a person to go point by point over every object in a single photo, and there are millions of images to scour. That data is then fed back into an AI system, so the cars can learn what things are in the world around them. Scale has built software that looks over the images first. In many cases, it’s able to label most of the objects automatically. Workers are then asked to review the images. If they need to intervene, the system lets them click once somewhere, say, in the middle of a car, and it traces the object for them. ‘Tasks that used to take hours end up taking just a couple of minutes,’ says Wang.”

Squad is an “anti-bro” video chat platform that appeals to women and teenage girls: “[The app] allows you to video chat and share your phone screen with a friend in real-time, has tapped into a demographic clamoring for a safe space to gather online. Without any marketing, the startup has collected 450,000 registered users in eight months, 70 percent of which are teenage girls. So far this year, users have clocked in one million hours inside Squad calls. … As Crawford describes it, it’s all the stuff you don’t want to post to Snap or Instagram but want to show your best friends. An app that may seem frivolous or non-essential seems to have quickly become a space online where girls can are opting to spend hours intimately engaged with their friends—without fear of stumbling into a troll.”

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LOCATION, LOCATION, LOCATION

Atlanta’s black tech revolution continues to build: “It had become clear that Silicon Valley did not speak either [Tristan] Walker’s or his customers’ language. “Walker & Company should not have been built in Silicon Valley,” he says. Over the years, Tristan and Amoy had flirted with the idea of leaving the West Coast. Last August, while visiting friends in Atlanta, they went house hunting, out of ‘curiosity,’ Walker says. Within four months, that curiosity had given rise to a headline: Walker was selling Walker & Company to Procter & Gamble, staying on as CEO, and moving the company to Atlanta rather than to P&G’s corporate headquarters, in Cincinnati. Reports placed the acquisition price somewhere between $20 million and $40 million (which would mean investors didn’t generate a return), but Walker seems pleased with the outcome.  …

“The Atlanta metro area also has the second-fastest-growing economy in the country (behind San Francisco), spurred by its tech industry, which accounts for nearly 12.5 percent of the city’s revenues, according to CompTIA. Home Depot, UPS, Delta Airlines, the Coca-Cola Company, and Equifax are headquartered here. Twilio, Salesforce, and Pandora have all recently set up outposts, drawn by the talent coming out of Georgia Tech and the Atlanta University Center, the largest and oldest consortium of historically black colleges and universities. And here’s the kicker: In Atlanta’s tech industry, an astounding 25 percent of employees are black. In San Francisco, it’s six percent. …”

REGULATION

Do businesses have to make their websites accessible to everyone? “That’s the question at the center of an ongoing lawsuit against the pizza restaurant Domino’s that was filed by a blind user in 2016 after he was unable to order pizzas through the company’s website, despite using screen reading software. Because he could not make an order, despite using screen reading software, the user alleged that the site was not accessible to blind people and as a result Domino’s was violating the 1990 Americans with Disabilities Act.

“Now, the company has petitioned the Supreme Court to hear its case, after a federal appeals court ruled that the company had to make its website accessible to comply with the ADA. If the Supreme Court decides to hear arguments on the case, the ruling could set a precedent for the future of web design, deciding if companies must make their digital presences as accessible as their brick-and-mortar locations. In the petition, Domino’s argues that the ADA does not specifically mandate companies to create accessible sites and apps because it was written before the rise of the internet as we know it, and the cost to its business to design its website and apps to be more accessible would run into the millions.”

North Dakota shop owners are able to open their stores on Sunday mornings for the first time since 1889: “In 1991, the Legislature agreed to allow most businesses to open on Sundays, but not before noon. Tax Commissioner Ryan Rauschenberger said North Dakota had a ‘discernable’ rise in sales tax collections following the 1991 relaxation of the law, and he expects the same now that it is scrubbed from the books altogether. ‘We’ve always believed more hours and more opportunities leads people to spending more,’ Rauschenberger said. ‘More hours in which to shop will mean more shopping will occur.’”

PRICING

Restaurants and food makers are finding that consumers are willing to pay higher prices: “Consumers are driving the decadelong US economic expansion, as other sectors including manufacturing and the farm economy are hurt by trade tensions and tariffs. The tight labor market, meanwhile, is leading some companies to raise wages, giving households more to spend. … Restaurants and food makers are seizing the opportunity to charge more, in part to cover higher costs for ingredients, transport and labor that many companies say they are facing. … Dunkin’ Brands Group Inc. said sales rose in the quarter as customers ordered more expensive espresso drinks and breakfast bowls that the coffee chain added to its menu over the past year. Chipotle reported a 10 percent sales bump driven largely by bigger orders after raising prices last year.”

OXFORD STRATEGIC ADVISORY DEAL OF THE DAY 

Airbnb has acquired Urbandoor, a provider of a housing and accommodation booking platform. “Urbandoor has already built relationships with those multifamily owners for the purposes of extended stays. With the acquisition, Airbnb may be able to convince these same parties to start thinking about the value proposition of setting aside units for short-term stays, as well, which would allow Airbnb to bypass renters in some scenarios.”

VENTURE CAPITAL

Romeo Power, a manufacturer of sustainable power systems intended to extend the capabilities of electric vehicle battery systems, raised $4 million in an Early Stage VC Round.

Backbone, a developer of next-generation PLM solution designed to help consumer goods companies manage complex design and product development processes, raised $18 million of Series A2 venture funding.

TECHNOLOGY

Inventor Franky Zapata became the first person to cross the English Channel on a hoverboard: “The French inventor used his jet-powered Flyboard Air to travel the 22 miles from France to England in 22 minutes, briefly landing on a boat to replace his kerosene-filled backpack. The board wasn’t slow, eitherZapata said he reached speeds up to 106 mph during his journey.”

Developers at UK-based DataSparq created an AI software that determines who is next in line to put in a drink order at the pub: “The new system will use a webcam to film arrivals at the bar, feeding back the order of a virtual line to bartenders via a display screen behind the counter.

It means that, in theory, customers may never have to stare down a line-jumper who gets their order as soon as they’ve muscled their way to the front. It also means bar staff won’t have to navigate a frustrated crowd. … [It] will also scan their faces to analyze their age, with the aim of reducing the time it takes to ask for identification. DataSparQ, the company behind the system, says it carried out research that revealed British people spend about two months of their life waiting at bars. The company is in talks with pubs around the United Kingdom with a view to rolling out the software. The software will cost pub landlords £199 ($240) per month.”

And that’s what’s ahead.

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

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