Kelie Morgan 1/22/21 Kelie Morgan 1/22/21

The Weekly: Edition #81 - January 22nd, 2021

Empathy and Leadership

Ask anyone to name the most desirable qualities for a leader to possess and we guarantee some form of emotional intelligence will make the list. Defining what makes a leader particularly great is often difficult because every great leader has unique qualities that are different. But despite the unique differences, every great leader in the modern business world possesses the ability to empathize to some degree. This doesn't necessarily mean that they are easy on employees, customers, or competition. It simply means they can step outside of their own shoes and into the shoes of another.

When a leader possesses a high degree of emotional intelligence and empathy, they can unemotionally gauge a situation from another person's perspective and are able to take action that reflects this understanding. They are able to engage in discussion about an employee's problem, perceive a competitor's strategic priorities, and listen to an unhappy customer's perspective all with an open mind. The ability to gain insight from looking at a situation from someone else's vantage point is what sets the great leaders apart from the crowd.

This week, we shared a piece by Microsoft staff that highlights how empathy in business is an incredibly important skill for leaders to adopt in modern times as employees have increasingly greater number of career and work options available. Indeed, Microsoft makes the case that empathy flows from management to employees to customers - and ultimately to the bottom line. Leaders who exhibit greater empathy can improve employee morale which in turn cuts down on employee turnover. In addition, empathetic leaders who interact with customers enrich the customer experience which in turn reduces customer churn.

If empathy is not your strong suit, we wouldn't necessarily recommend softening up. Rather, consider pausing before a difficult encounter to give yourself space to respond instead of react. Here are four questions to consider that can help introduce empathy into any situation:

1. Pause - what is the cause behind the emotion, the problem, or the frustration?
2. Reflect - are there differences in priorities, opinions, or circumstances that may cause tension between you and the other party?
3. Decide - what is the desired outcome?
4. Act - how can you achieve this in a long-term positive sum manner?

The bottom line is that empathetic leaders create happy employees. Happy employees create happy customers. Happy customers tell others and stick around for more.

What other qualities do great leaders have, and what practices have you discovered to help implement these qualities?

2020 Annual Letter (Permanent Equity)
+ "Despite initial uncertainty, some of our businesses prospered as consumers decided to turn attention to their homes and backyards. Other businesses struggled as people stopped flying. Love endures, buildings still use glass, and the military continues to need civilian mariners. March and April looked dicey, but every company made it through the storm and is well positioned for future success. If 2020 was the year of lemons, we pulled out our juicers and became professional mixologists."

The risks you can’t foresee (Harvard Business Review)
+ "Failures to pick up signals are rooted in well-documented biases. Decades of behavioral research show that people pay attention to information that confirms their beliefs but disregard it when it conflicts with them. They often dismiss repeated deviances and near misses as mere blips. This “normalization of deviance” gets reinforced by groupthink, which causes team leaders to suppress or ignore concerns and anomalies reported by lower-level personnel."

The 6 steps of building an audience from nothing (Better Marketing)
+ "Your goal isn’t an arbitrary number of followers. Your goal is to find a targeted audience of engaged individuals. Influencers don’t want more followers, they want more leverage. Bloggers don’t want more followers, they want more readers. Companies don’t want more followers, they want more sales."

The state of mobile 2021 (App Annie)
+ "Biggest Mobile Shopping Year Yet: $115 BILLION spent globally during 11.11 Shopping Festival across Alibaba and several other shopping platforms from Nov 1 - Nov 11, 2020. Mobile drove the lion's share. 30% more time spent YoY globally in shopping apps on Android phones during 2020. Outside of China — an early adopter of mobile shopping — global time spent in Shopping apps grew 45% YoY. $53.2 BILLION spent on mobile in the US from Nov 1 - Dec 9, 2020, up by over 55% YoY."

The state of micro private equity (The Generalist)
+ "The expansion of micro PE is allowing many more to eschew timidity and build their online empires. As tech continues its infiltration of industry, we should expect the proliferation of digital products to accelerate, providing ever more opportunities for the savvy investor and spirited builder."

The founders of Harry's got a $1.37 billion offer to sell. But the FTC wasn't sold. (Inc.com)
+ "The experience was surreal. Jeff Raider and Andy Katz-Mayfield, the co-founders and co-CEOs of the trendy grooming-products startup Harry's, were wearing suits and ties. They were surrounded by lawyers. And they had just experienced an hours-long grilling by antitrust regulators in a room at the Federal Trade Commission headquarters in Washington, D.C., a hulking limestone edifice on Pennsylvania Avenue. Their apparent sin: competing too well against razor giant Gillette. Isn't antitrust law supposed to work the other way?"

How one of the world’s fastest-growing startups burned through $300m (The Hustle)
+ "Fab had raised $336m since rebranding itself as an ecommerce platform in 2011. At one point, it had been a unicorn, valued at $1B. It had 750 employees on multiple continents, a schmaltzy HQ in New York, and an enormous warehouse stocked with millions of products. Now, the company was selling for less than one-tenth of its original valuation."

9 trends that will shape work in 2021 and beyond (Harvard Business Review)
+ "It’s become clear that supporting employees in their personal lives more effectively enables employees to not only have better lives, but also to perform at a higher level. According to Gartner’s 2020 ReimagineHR Employee Survey, employers that support employees with their life experience see a 23% increase in the number of employees reporting better mental health and a 17% increase in the number of employees reporting better physical health. There is also a real benefit to employers, who see a 21% increase in the number of high performers compared to organizations that don’t provide the same degree of support to their employees."

Empathy in Business (Microsoft)
+ "The tendency to be egocentric is an evolutionary survival mechanism. But times have changed. We live in an economy where people value experiences and give their time and money to companies and leaders they can respect and that give them additional value. That value is not born through traditional leadership – it is born through leaders who are mentors more than bosses, coaches more than managers."

The internet of animals (New York Times)
+ "By doing so, ICARUS could fundamentally reshape the way we understand the role of mobility on our changing planet. The scale and meaning of animal movements has been underestimated for decades. Although we share the landscape with wild species, their movements are mostly obscure to us, glimpsed episodically if at all. They leave behind only faint physical traces — a few paw prints in the hardening mud of a jungle path, a quickly fading arc of displaced air in the sky, a dissipating ripple under the water’s surface. But unlike, say, the sequence of the human genome, or the nature of black holes, our lack of knowledge about where our fellow creatures go has not historically been regarded as a particularly pressing gap in scientific understanding."

We'd love your help.

If you stumble across something great, send it to weekly@permanentequity.com.

If you know an owner, operator, or someone who works with SMB's, please give us the highest compliment and send them our way. You can find previous The Weekly issues here.

Kelie Morgan 1/15/21 Kelie Morgan 1/15/21

The Weekly: Edition #80 - January 15th, 2021

The Feedback Process

As business owners ourselves, we know first hand that giving and receiving feedback is a hard, but necessary part of improving a business. The process can be burdensome on owners and employees, emotions can run high, and office politics occasionally come into play. But it doesn't have to be this way. The 'why' behind constructive feedback is simple: to continuously develop employee and executive talent, which in turn will benefit the organization.

It's the 'how' that is often the hardest part.

This week, we came across a simple framework for thinking through how to structure the performance feedback process. Instead of the age-old manager-employee reviews, the Harvard Business Review piece highlights the value of aggregating multiple perspectives and combining the various sets of feedback into a comprehensive 360 degree view of the person's performance. Here are a few features to consider when tightening your feedback loops:

1. Set the right cadence. This looks different for different companies and different employees. Most employees need some sort of affirmation that they are on the right track and are developing their skillsets, whether this is a weekly informal check-in or a quarterly formal review. But we recommend setting a cadence that balances the required workload to gather feedback and current time constraints on both manager and employee. The more frequent the formal check-ins, the simpler the feedback collection system must become. There is a real cost in terms of time required to aggregate multiple sources of feedback. In addition, the simpler a feedback system is, the more likely employees are to actually engage in giving meaningful feedback on their peers.

2. Get the right people involved. A broader peer group is preferred for feedback as research has shown that a 'wisdom of the crowds' approach is better at giving 360 degree feedback than one or two people. For employees, this means a cross-section of managers and peers they regularly interact with. For managers and executives, this involves direct reports as well as peers.

3. Establish the goal of the process. Let your employee or manager know up front: it is not criticism, it is meant to be constructive in nature to develop skills and further careers. Give them the most important feedback up-front to set the tone. Ensure that feedback is specific to a category, and avoid blanket statements. In the end, the goal is to give guidances for how to 'level up' as an employee and professional.

4. Be transparent. This is the likely the most difficult piece of the framework because the degree of candor managers and employees can offer is often contingent on the culture of the company. We can't necessarily recommend the level of candor necessary for your organization, but in general, the more the better. Open and honest feedback is the only way organizations move forward. This requires professionalism, thick skin, and the ability to self-reflect from both employees and managers.

Giving feedback is a panacea to your business in two main ways. It can boost employee morale when affirming their work and performance, and it can also serve as a course correcting mechanism for employees who need more guidance and direction. Either way, your business wins.

Inside the whale: an interview with an anonymous Amazonian (Logic Mag)
+ "The rumors that I hear, both internal and external, are that we're very seriously interested in acquiring post office real estate. The reason why the post office is valuable to privatize is because of their real estate holdings. They have great real estate in every downtown of every city in the United States. Amazon may be interested in buying all of the post office locations, and we have the cash to do it. So why not?" (H/T Collaborative Fund)

30 best pieces of advice for entrepreneurs in 2020 (First Round Review)
+ The 30 best pieces from First Round Review in 2020.

Papua New Guinea calling - Digicel's rural expansion (Rest of World)
+ "Whereas most providers long ago capitulated to the trend of offering mobile contract packages, locking customers into rates for months or years at a time, Digicel has taken a different approach since its founding in 2001, relying on the pay-as-you-go model. (These dynamics are described in detail in a 2018 book, The Moral Economy of Mobile Phones.) This is especially well suited to countries without extensive banking systems, as customers can buy minutes when they have cash in hand. As of September 2009, more than 91% of Digicel subscribers used its service on a prepaid basis. This model also allows the company to set a per-minute rate that is far higher than it would be if folded into a rolling contract. In rural Papua New Guinea, most users prefer to purchase small amounts over and over again rather than buying bigger bundles, even if the latter is better value. This is because if somebody has too much credit, friends and family will ask them to share (something that Digicel’s service allows customers to do easily)."

Journalism, media, and technology trends and predictions for 2021 (Reuters Institute, Oxford)
+ "But while work efficiency may have improved, newsroom leaders worry about the impact on creativity, at a time when long hours and the increased complexity of production have added to pressures on staff. As we revealed in our Changing Newsrooms report in October1, almost eight in ten (77%) think that remote working has made it harder to build and maintain relationships, with many managers raising concerns about how to communicate effectively and about the mental health of employees."

Finally, a use for the old Sears: vovid-19 vaccine center (Wall Street Journal)
+ "Vast floor plans, sprawling parking lots and easy access to highways that attracted property developers and shoppers during the retailer’s heyday are drawing the attention of health officials. The stores are well-known destinations, and house enough space for workers and vaccine recipients to adhere to social-distancing guidelines."

Three crucial skills that leaders must develop to become executives (The Skip)
+ "Though a successful career requires a blend of soft and hard skills, when you start out, hard skills are considerably more important. But as you head into Act II, your soft skills are more critical to your success. In fact, the professional world is littered with insanely talented leaders who never became executives because they simply didn’t learn how to improve themselves, influence others, or manage their emotions."

Are peer reviews the future of performance evaluations? (Harvard Business Review)
+ "Whether your company is considering a team-based structure or not, we believe there are ways to reinvent performance management and make it more valuable and less boss-centric. The opportunity to create a socially-based feedback system feels even more urgent during the COVID-19 crisis, since many people are working remotely and without the same level of daily interactions with managers. Here’s how such a system generally works. Instead of a performance review created and discussed solely with the boss once a year, the employee receives a larger amount of feedback (often 50 or more instances over the course of a year) from colleagues. This feedback captures the view of their performance and behavioral attitude from the people the employee has been working with on a regular basis. Because the system generates a larger amount of feedback, each individual is less subject to the potentially biased view of a single person: the boss."

Lost passwords lock millionaires out of their bitcoin fortunes (New York Times)
+ "Stefan Thomas, a German-born programmer living in San Francisco, has two guesses left to figure out a password that is worth, as of this week, about $220 million. The password will let him unlock a small hard drive, known as an IronKey, which contains the private keys to a digital wallet that holds 7,002 Bitcoin."

Kelie Morgan 1/8/21 Kelie Morgan 1/8/21

The Weekly: Edition #79 - January 8th, 2021

Marketing and SMB

"Half the money I spend on advertising is wasted; the trouble is I don't know which half." - John Wannamaker

Every owner understands that a good business has to constantly cultivate new opportunities and maintain existing customer relationships. Most owners also know finding the right marketing channels and marketing talent can be difficult, and can be incredibly costly if the wrong ones are chosen.

Take eBay for example. Back in 2013, the company's head economists discovered a sinister truth about its ad budget. It didn't matter whether they spent the money or not on Google ads - sales kept coming. Why? The brand, a lack of competition, and the overwhelming demand for their product. Spending on AdWords to target customers that were already familiar with eBay was a pointless and costly exercise.

Many businesses, and especially small businesses, have never found much marketing that clearly works. They have customers, but how they found them feels haphazard at best. We see it all the time when we meet with owners and CEOs and it’s almost always the same story — “We’ve worked with 5 different marketing firms over the past 10 years, all of which told us they were going to do amazing things for our business and none that moved the needle." Measuring marketing ROI is just plain hard.

There’s also a talent selection issue. Understandably, most owners aren’t marketing experts and have a difficult time differentiating between the real deal, the pretender, and the charlatan. As your marketing budget gets smaller, the quality of the talent/firm you can attract drops off steeply. Said differently, if a firm is great at providing marketing services, they are constantly leveling up their client base to bigger budgets and more sophistication. The best marketing talent leaves the SMB market, leaving smaller businesses with far less viable options.

Then, there’s the paradox of choice. The beauty of the internet is that it has fostered the creation of new forms of media. Quite literally there’s a new way to market available to you weekly. These include the widespread consumption of podcasting, newsletters, and influencer platforms, just to name a few. In addition, old school media (radio, billboards, TV, and print) still provides tremendous value in the right context. But the choices are overwhelming. It’s hard not to throw up your hands in confusion and frustration.

We believe good marketing boils down to finding your customer, speaking their language, and solving their problem. When we start working with a business, we ask the following questions:

1) Who is your customer? The more specific, the better.
2) Where does your customer spend time?
3) Are you educating your customer or reminding them you exist?
4) How much margin is each incremental dollar of sales worth?
5) Where are the friction points in our customer experience and how can we eliminate those?

All good marketing starts with the basics and results often flow from small tweaks. It’s almost aways a game of incremental improvement, not game-changing leaps. As an example, one of our portfolio companies experienced a surge in lead volume merely by making it easier for a potential customer to contact them. Another needed a small brand refresh to reflect the company wasn’t a small “mom and pop” shop like their customers perceived them.

If you find yourself frustrated or baffled by marketing, start Googling and get educated. With low expectations, test something small, focusing on incremental improvements around how you find and communicate with your potential customers.

Leading through anxiety: inspiring others when you’re struggling yourself (Harvard Business Review)
+ "How can you lead with authority and strength when you feel anxious? How can you inspire and motivate others when your mind and heart are racing? And if you hide the fear in an attempt to be leaderlike, where does it go?"

These gas-station entrepreneurs favored food over fuel and got rich (Wall Street Journal)
+ "As teenagers, Mohsin and Zuber Issa worked at a filling station in northern England owned by their parents, who emigrated from India in the 1960s. They used that experience to expand from the purchase of a single derelict site nearby into one of the world’s largest independent gas-station operators, with over 6,000 sites across Europe, and more recently in Australia and the U.S."

The future of workplace (Cushman Wakefield)
+ "Nonetheless, younger employees have increased their adoption of remote work at a quicker pace than other demographic groups. Compared to 2005 levels, workers aged 18 to 29 have more than doubled the rate at which they work remotely, compared to a 74% increase among workers aged 45 and older. Even with these trends, it would take decades for these remote work shares to equalize, indicating that remote work will likely continue to be utilized more heavily by older employees."

The Chapwood Cost of Living Index (Chapwood Index)
+ "The Chapwood Index reflects the true cost-of-living increase in America. Updated and released twice a year, it reports the unadjusted actual cost and price fluctuation of the top 500 items on which Americans spend their after-tax dollars in the 50 largest cities in the nation."

Inflating inflation part deux (Financial Times)
+ This piece takes the other side of the inflation / Chapwood Index debate.

Don’t count on free trials to win you customers (Harvard Business Review)
+ "Our research provides evidence that for “experience” goods — for example a holiday destination, a movie, or new software, where value is only discovered after consumption — free trial campaigns should be deliberately targeting existing customers of medium to high usage. Our study reveals that for this type of goods and services, relative to non-users, customers with some exposure to the product are more responsive to free-trial campaigns."

For 2021 housing data, context is key (Housing Wire)
+ "The last thing to keep in mind for all of 2021, is that the “too-hot” demand we have had going into 2021 will moderate as that was more of function of make-up demand after the drop in housing data due to COVID-19. This should be expected by everyone. Don’t be like the housing bubble crash boys who, for the last eight years, have taken every soft number (even if the metric was positive year over year) as evidence for their narrative that the housing market is on the verge of a 30%-50% price crash in a calendar year."

When big brands stopped spending on digital ads, nothing happened. Why? (Forbes)
+ "When P&G turned off $200 million of their digital ad spending, they saw NO CHANGE in business outcomes [1]. When Chase reduced their programmatic reach from 400,000 sites showing its ads to 5,000 sites (a 99% decrease), they saw NO CHANGE in business outcomes [2]. When Uber turned off $120 million of their digital ad spending meant to drive more app installs, they saw NO CHANGE in the rate of app installs [3]. When big brands stopped spending on digital ads, nothing happened. Even further back in time, in 2015 a large medical device company turned off half of its digital ad spend, and saw conversions stay the same (chart below) [Harvard Business Review], and in 2012, eBay turned off their paid search ad spending, and saw NO CHANGE in sales coming from those sources [4]."

What the numbers tell us about work right now (Wall Street Journal)
+ "We’re getting our work done, but we feel pretty miserable. In a September survey of 330 human resources leaders by the Conference Board, 47% of respondents reported an increase in productivity at their companies, while only 13% reported a drop. But 60% said their employees are working more hours and 63% said their employees are spending more time in meetings. Four out of 10 reported more mental health problems among workers."

Is the office dead? Not exactly. (Marker Media)
+ "Last fall, Dropbox drew its line in the sand when it announced that it would indefinitely become “virtual first,” ushering in the next iteration of the brick-and-mortar office economy. To be clear, Dropbox isn’t abandoning in-person work or switching to a pure work-from-home model. Instead, it’s shifting the default from the office to remote, while setting up Dropbox Studios, where employees can collaborate and hold in-person meetings. Unlike traditional hybrid-remote office models where employees can choose whether or not to go into the office, Dropbox has made it clear that Dropbox Studios is not intended for individual work or hot desking. Its offices will be reserved explicitly for team building and community gatherings. In other words, something more akin to a rented hotel banquet hall — but theirs is 24/7."

How sports trading cards went from hobby to 'asset class' (ESPN Daily)
+ "In August 2020, a rookie year baseball card for Angels superstar Mike Trout sold for nearly $4 million. The modern-day card broke a record previously set by a much older rare Honus Wagner card of the early 1900s. And the eye-popping price could be surpassed again soon. Trading cards have transformed into investments, fueled by a mysterious rating system and eccentric power brokers. Dan Hajducky tells us strange stories from the world of sports cards. Then Mike Greenberg shares his thoughts on why the return of baseball meant so much in 2020."

Kelie Morgan 1/1/21 Kelie Morgan 1/1/21

The Weekly: Edition #78 - January 1st, 2021

Peaks and Valleys

"If you're going through Hell, keep going." - Winston Churchill

The economic, political, and emotional volatility of 2020 was historic by any standard and illustrated how much of a rollercoaster life can be. It served as a sober reminder of how many factors are truly outside of our control. The peaks and valleys of 2020 were incredibly difficult for anyone with a business to worry about, a family to provide for, a mortgage to pay, or dependents to take care of. The pandemic spared almost no one.

Prior to the pandemic, it was the best of times for all. During the pandemic it was the worst of times for all. After the pandemic, it has been either the best or worst of times depending on your industry, location, and business - factors that are largely beyond your control to change overnight.

For those who operate businesses benefiting from the massive changes accelerated by the pandemic, remember that there are tailwinds outside of your control that propelled your business forward. You are riding an economic wave that began as a swell and ended as a monster barrel. Sure, you picked a lucrative industry and the trends were heading in the right direction. Call it luck, call it divine providence, call it whatever you'd like - we're all subject to a little good fortune at some point in our lives that has little to do with our past decisions. Don't pause at the peak - keep climbing.

The reverse is also true.

For those who operate businesses languishing from the after-effects of economic lockdowns and interruptions caused by the pandemic, remember there are factors that are outside of your control that affected your business. The tide will come back in, and times will improve. There are no words that can bring back early 2020 times or improve the current situation, and Churchill's timeless advice is the best we can offer. Keep going.

The pandemic may have crippled your business or tripled your business. Either way, chalk a good bit of it up to factors outside of your control. If you're in the deepest valley you've ever experienced, the best way forward is to simply acknowledge the path ahead and keep your eyes off the scoreboard - keep playing the game, keep going. For those at the peak, don't take time to soak it in - keep climbing, because you never know when the next valley will present itself.

As 2020 comes to a close and we begin a new year, Permanent Equity wishes everyone a happy, healthy, and prosperous new year. Keep climbing, stay in the game, and wherever you are, keep going.

Does working from home make employees more productive? (The Economist)
+ "Before covid-19 roughly 5% of Americans worked from home. By May the figure had risen to 62%. By October 40% were still shunning the office. Both employers and employees have grumbled that the shift to home-working has been disruptive. But according to new research by Natalia Emanuel and Emma Harrington, two doctoral students in economics at Harvard, firms may be better off."

Hotels turn empty rooms into private dining suites (The Real Deal)
+ "The hotel industry has lost $46 billion in revenue in 2020, with nearly 1 billion unsold hotel room nights on the horizon for the year. Several large hotel chains have already closed properties, such as the 478-room Hilton Times Square in New York, which permanently shut its doors in September. Restaurants aren’t faring any better: 37 percent of restaurants nationwide said they do not expect to survive the next six months without federal relief, according to a recent industry survey."

Small business pulse survey - Dec. 2020 (US Census)
+ "The Small Business Pulse Survey (SBPS) measures the effect of changing business conditions during the Coronavirus pandemic on our nation’s small businesses. SBPS complements existing U.S. Census Bureau data collections by providing high-frequency, detailed information on the challenges small businesses are facing during the Coronavirus pandemic."

Small business optimism index (NFIB.org)
+ "Key findings include: Earnings trends over the past 3 months declined 4 points to a net negative 7% reporting higher earnings quarter over quarter. Inventory investment plans for the next 3 to 6 months decreased 7 points from a 48-year record high of a net 12% in October to a net 5% in November."

Connected world: an evolution in connectivity beyond the 5G revolution (McKinsey Global Institute)
+ "The promise of 5G has captured the attention of business leaders, policy makers, and the media. But how much of that promise is likely to be realized anytime soon? With the first true high-band 5G networks already live, we set out to take a realistic view of how and where connectivity could be deployed and what it can enable over the next 10 years. But 5G is not appearing in isolation. This research takes a more expansive view of connectivity to include other technologies, ranging from fiber and satellites to Wi-Fi and short-range technologies."

How to become insanely well-connected (First Round Review)
+ "When asked what’s made his career possible, he’ll tell you outright it’s the relationships — built deliberately over many years. This might sound like a common response, but among his peers, he’s acknowledged to be a world-class super-connector with rarefied expertise. Known for helping launch the famed TEDTalks (this is his 24th year attending TED), and a landmark Forbes piece on nailing email introductions, Fralic still responds thoughtfully to over 10,000 emails every year."

Remote work and the tech-enabled exit: where to live (Doug Antin)
+ "There are some lingering challenges for the development of remote work policies. Specifically, what will the post Covid-19 work policies actually look like once lockdowns end? Will the majority of workers need to visit the office once a week or will they be fully remote? And will their jobs allow work in a different time zone? My theory is that +/- 6 hour time difference will be become the generally accepted range in the short term transition to permanent remote work."

Agriculture industry bets on carbon as a new cash crop (Wall Street Journal)
+ "Big agriculture companies including Bayer AG , Nutrien Ltd. and Cargill Inc. are jockeying with startups to encourage crop producers to adopt climate-friendly practices and develop farming-driven carbon markets. Those efforts would let retailers, food makers and other companies offset their greenhouse gas emissions by paying farmers for their fields’ capacity to withdraw carbon dioxide from the atmosphere and trap it in the soil."

Kelie Morgan 12/24/20 Kelie Morgan 12/24/20

The Weekly: Edition #77 - December 25th, 2020

Happy Holidays

2020 has been a long, bumpy ride, but fortunately all things come to an end - both the good, and the bad.

As we head into the New Year, our team is reflecting on successes and lessons learned over the past year as well as opportunities that lay ahead. As Tom Pollock put it, "it's never as good as it looks, and it's never as bad as it seems." And that's how we'll close out 2020, with an optimistic spirit and firm belief that better times are ahead for everyone.

From the Permanent Equity Family, Merry Christmas, Happy Holidays, and a Happy New Year! Here's to your success in 2021.

The Barry Diller playbook (The Generalist)
+ "The Barry Diller playbook is easy to understand but hard to execute. First, identify a market with room to grow...Second, accumulate share...Finally, spin out the winners."

Load the trucks (Permanent Equity)
+ "Working alongside your employees is the most effective way to learn what’s working and what needs fixing. You’ll see which employee keeps their work stations neat and clean. You’ll hear when one of them is expecting a child, You’ll gain a pulse on what’s happening in their lives."

How to jam a buyer (Matthew Hinson)
+ "The best way to cover your ass in a deal is to think of the worst potential scenario and work backward probabilistically. As you read these, you might find them silly and think, “I would never fall for that”. Maybe not."

Marketplaces year in review - 2020 edition (Marketplace Pulse)
+ "Third-party sellers increased their sales by $95 billion in a year, up from $200 billion in 2019. Amazon’s sales grew by $45 billion, from $135 billion. Gross merchandise volume (GMV), the total amount of sales on Amazon websites, including those by the company itself and by the marketplace, grew from $335 in 2019 to $475 billion in 2020. GMV was up 42%, while first-party sales were up 35%, and third-party volume was up 47%. 62% of Amazon’s worldwide GMV was by the marketplace. Up from 60% in 2019 and 58% in 2018."

2020: a year in charts (Chartr)
+ "2020 was the first full year of Chartr publishing our newsletter. It will also, hopefully, turn out to be the most eventful and crazy year that we ever chart. We’ve gone back through our content, including all of the 277 charts we published this year, picking 25 that tell the story of 2020."

The risk not taken (Andy Dunn, CEO of Bonobos)
+ "For the first three years of Bonobos, I lived with $3,000 in the bank, a $3,000 apartment, and $150,000 of debt. During that time — 2007 to 2010 — I was only a month away from being out of cash. I was paying myself, initially, $70,000. This is plenty of money in most places, but in NYC it can fly you pretty close to the trees on just rent and alcohol."

The rise and fall of the bank robbery capital of the world (Crime Reads)
+ "In 1980s Los Angeles, a bank was robbed every hour of every day. This is the story of how a bandit culture took over the city."

Kelie Morgan 12/18/20 Kelie Morgan 12/18/20

The Weekly: Edition #76 - December 18th, 2020

Consumer Behavior: Trends vs. Fads

"Start designing for a post-vaccine future of what's still done best offline: discovery, rich experiences, and community."

2020 has been a wild year of adaptation for most, commiseration for many, and wistful celebration for some. The 'K shaped' demand shock has been well-documented across industries due to government lockdowns and consumer fears surrounding the pandemic, resulting in odd boom-times for some industries and corresponding depressions in others. From cooking at home to remote work to the decimation of travel, many consumer behaviors have changed dramatically in 2020.

This week, we came across a consumer behaviors and trends study from Coefficient Capital that is worth sharing for its nuanced data and exploration of what is arguably the toughest question surrounding the pandemic: what trends will continue to stick after the pandemic, and what trends are merely passing fads?

While many specific behaviors seem to be passing fads (e.g. puzzles and baking), we believe there are several general trends in consumers that will continue beyond the pandemic.

Convenience

Businesses that cater to convenience - not having to leave the home - have seen incredible gains during the pandemic (e.g. Doordash, Instacart, to name a few). In fact, according to the study above, convenience has been an absolute requirement from consumers during the pandemic and this is likely to stick in a post-pandemic world:

- 45% of all consumers prefer to shop online for groceries
- 66% of all consumers surveyed actually said they preferred exercising at home

Convenience used to be measured in physical distance to the nearest provider of a particular product or service. Now, convenience is defined as the fewest clicks between purchase and consumption - the lowest cost of search.

The Unbundling of Everything

Consumers also increasingly want a la carte customization options in product and service offerings. For example:

- younger consumers on average use a higher quantity of brands than their older counterparts, but each brand tends to be more niche in nature
- younger consumers desire experiences or products that are 'unbundled' and offer high levels of customization (Netflix and Youtube for TV/music alternatives, Cash App & Venmo for simple banking alternatives)

Health Made Easy

From digital fitness apps to meditation apps to on-demand healthy food delivery, the health-conscious trend is here to stay with Millenials and Gen Z. Consumers increasingly want to make healthier choices, but also want these choices to be more convenient and cost-effective:

- 81% of Millenials - and 66% of all consumers - say they'd prefer home fitness solutions to gyms
- Calm and Headspace (meditation apps) had record downloads during the early months of the pandemic

Digitally Native

Finally, all businesses were forced to adapt to some degree to the digital-first world after the pandemic hit. Regardless of industry, a digitally native business must optimize their operations through mobile payments, mobile marketing, and mobile customer support. These are table stakes in the 21st century.

In sum, great businesses will always put their customers' needs first. This principle simply won't change. But the means of achieving this ideal certainly will. Organizations that adapt to the new ways of doing business in a mobile-first, digitally-native world will be primed to take market share and succeed, and those that don't will be left behind.

How to be a C.E.O., from a decade’s worth of them (Corner Office)
+ "Are there some qualities — beyond the obvious, like hard work and perseverance — that explain why these people ultimately got the top jobs? I’ve noticed three recurring themes. First, they share a habit of mind that is best described as “applied curiosity.” They tend to question everything. They want to know how things work, and wonder how they can be made to work better. They’re curious about people and their back stories. And rather than wondering if they are on the right career path, they make the most of whatever path they’re on, wringing lessons from all their experiences."

Lessons from Brexit on how (not) to negotiate (Harvard Business Review)
+ "Principle #1: Build strong relationships ahead of time. During negotiations, understand what your counterpart cares about."

Slack is the right tool to work the wrong way (Cal Newport)
+ "Slack replaced a single in-box with distinct chat channels, moved group discussions into a persistent chat format, and made all of these discussions searchable. For teams straining under e-mail’s shortcomings, Slack arrived like a digital analgesic, curing multiple pain points all at once. This palliative effect propelled Slack toward its astronomical valuation just six years later. The problem with this trajectory is that no one stopped to ask if it made sense to optimize this style of work in the first place. Though Slack improved the areas where e-mail was lacking in an age of high message volume, it simultaneously amplified the rate at which this interaction occurs."

How one NBA player turned a $350,000 salary into $600MM (Huddle Up)
+ "From a financial perspective, NBA paychecks weren’t what they are today. The majority of athletes made more money off endorsements than they did through their contract. Bridgeman, as a role player, wasn’t as fortunate earning no more than $350,000 in a single season. Enough to live comfortably, but certainly not what you expect for an NBA player. Here’s where it gets interesting... In an effort to prepare himself for life after basketball, Bridgeman spent his offseason working at a local Wendy’s drive-through to learn the business model of fast food restaurants. While other players were taking advantage of offseason freedom, Bridgeman was putting in the time and essentially building his empire. By the time retirement came, Bridgeman had already purchased three Wendy’s. Seeing an opportunity to scale the business, he doubled down investing in over 160 locations over the next 20+ years. He also invested in the Chili’s franchise, owning more than 120 at one point (Source)."

The new consumer - consumer trends in 2021 (Coefficient Capital)
+ "85% of generation Z consumers believe brands should be about something more than profit, according to a recent Wunderman Thompson survey."

Shopify's 2021 future of ecommerce report (Shopify)
+ "We unlocked five predictions using data from 1,000,000+ merchants and survey insights from consumers around the world. This report is your guide to a new era of commerce."

100 must-know statistics about long-term care: pandemic edition (Morningstar)
+ "From a personal financial standpoint, long-term care has been a deeply problematic area for consumers for many years. An extended long-term-care stay can be catastrophically expensive, adding an extreme wild card to retirement plans without long-term-care insurance. Unfortunately, the long-term-care insurance market has been troubled itself, resulting in increased premiums on many policies and a number of insurers dropping out of the business altogether. To help readers understand the key issues in the long-term-care space, I've assembled a now-annual compendium of statistics on long-term care. Each statistic includes a link through to the original source of the information; I've aimed to use the most current figures I could find from objective sources, wherever possible."

Car dealers opting out of the electric vehicle revolution, by the numbers (Marker Media)
+ "150: That’s how many Cadillac dealers have opted to no longer sell the brand rather than invest in electric car infrastructure. This was the ultimatum from GM to the dealers: Install $200,000 worth of electric car charging infrastructure, heavier lift equipment to accommodate weightier electric vehicles, and specialist tools, or accept a buyout and give up the Cadillac brand. The buyouts were attractive—$300,000 to $1 million, the Wall Street Journal reported—and about 17% of the country’s Cadillac dealers accepted the exit offer."

Kelie Morgan 12/11/20 Kelie Morgan 12/11/20

The Weekly: Edition #75 - December 11th, 2020

Technology and Entrepreneurship

"With the rise of new products and platforms that support small businesses and solopreneurs, the rebirth of the American Dream is underway—driven by the digital economy."

Is America's business landscape getting stale? Does the dynamic entrepreneurial culture that made our country so great still have legs? Everywhere you look, there are numbers and data to support one particular side of the story or the other - from rising business starts during the pandemic to declining numbers of IPOs, the answer to the question isn't crystal clear.

What is clear, however, is that there has never been a greater need for more entrepreneurs, and there has never been as much technology dedicated to helping small businesses succeed in a digital-first world.

In our partnerships with "boring" businesses we've learned that technology is never a panacea, but nearly every business can up its game by applying newer technology to current operations. This week, we read a great piece from Bessemer Venture Partners laying out a road map for how technology platforms can help their customers (small, entrepreneurial businesses) scale. In the article, BVP mentions three categories of businesses that 'enable entrepreneurship' and gives several examples:

Vertical platforms dedicated to a specific industry or space (Shopify, Teachable, Podia, and Substack)

Platforms that help small businesses gain an audience and monetize in easily customizable ways (Wix, Tribe, Patreon, Mailchimp, and Anchor)

Platforms that partially or fully automate back-office functions for small businesses (Square, TaxJar, Karat, LegalZoom, Oxygen, and Mainstreet)

We have seen first-hand the shift in technology companies enabling small business (Shopify) instead of eating its lunch (Amazon). While competition is a fundamental part of the capitalist system, the trend of 'arming the rebels' is one that will continue to be a powerful tailwind for entrepreneurs who are able to leverage these new platforms. Indeed, the way technology companies are moving from competition to cooperation may be one of the biggest paradigm shifts for entrepreneurship in America today.

"A new wave of entrepreneurship is about to crest. The technologies and tools that support every facet of small businesses and solopreneurship will fuel economic growth and opportunity."

The roadmap to enabling entrepreneurship (Bessemer Ventures)
+ "Contrary to popular belief, starting a business has never been harder. Although startup culture sometimes feels more like pop culture in mainstream media, the number of new businesses formed each year is decreasing. Over the past 30 years, new business creation has declined almost 50%. As small businesses dwindle, large enterprises capture market share. This trend has only become more severe in the wake of the pandemic as the data reveals a disproportionate decline in survival rates and job opportunities at small businesses. Ironically, today’s entrepreneurial drought persists despite—or perhaps because of—advancements in Internet and cloud technology that promise to democratize access and lower upfront startup costs."

2020 trends in entrepreneurship report (University of North Carolina, Chapel Hill)
+ "There is another school of thought that disagrees with the doom and gloom forecast that entrepreneurship is in decline, contending the decline of business dynamism is overstated. As Guzman and Stern (2019) note, “simply put, alternative definitions of entrepreneurship suggest different assessments of the state of American entrepreneurship.” Using quality-adjusted measurements, the researchers find that business dynamism follows a cyclical pattern that is sensitive to economic and capital market conditions. The authors also note that even though the number of high-growth firms has declined since the dot-com bust of the early 2000s, since 2010 there has been an upswing in the expected number successful startups formed and the accumulation of entrepreneurial potential for growth. Therefore, they argue we cannot solely consider the quantity of firms, but rather should take into consideration their overall quality."

Businesses for sale market during COVID-19: a paradox of unique opportunity and uncertainty (BizBuySell)
+ "While opportunistic buyers may be expecting deals, the most sought-after businesses are "essential", meaning pandemic proof, performing well and unlikely to come at a discount. Due to increased popularity of these businesses, the median sale price of businesses sold in the 3rd quarter grew 20% versus a year ago as stronger businesses cross the finish line. According to Lana Hout and Adrianna Smith, Managing Brokers at First Choice Business Brokers in Los Angeles, while discounts are driving interest, it’s these businesses that are driving sales. "The market over the past three months has been extremely busy, particularly due to essential businesses being in such high demand. Despite what’s going on, these businesses continue to thrive," says Hout."

The economics of Christmas trees (The Hustle)
+ "Today, 98% of all real Christmas trees on the market come from tree farms. According to the USDA, there are 15k of these farms in the US, ranging in size from 2 acres to 9k acres. Though the market is largely stratified, the 434 largest farms control ~75% of the total supply. At any given time, there are 350m Christmas trees growing on these farms in various stages of development — and in a typical year, ~25m will be harvested for sale."

Investors circle largest corporate cash hoard ever (Wall Street Journal)
+ "Cash holdings at nonfinancial companies grew to a record $2.1 trillion at the end of June, according to a report from Moody’s Investors Service. That is up 30% from that time last year and higher than the previous peak of nearly $2 trillion in 2017. Among the biggest hoarders: AT&T Inc. and Delta Air Lines Inc., which each held more than $15 billion at the end of June."

Why did renewables become so cheap so fast? And what can we do to use this global opportunity for green growth? (Our World in Data)
+”The fundamental driver of this change is that renewable energy technologies follow learning curves, which means that with each doubling of the cumulative installed capacity their price declines by the same fraction. The price of electricity from fossil fuel sources however does not follow learning curves so that we should expect that the price difference between expensive fossil fuels and cheap renewables will become even larger in the future."

Supporting small, saving big, and shopping early: Amazon customers make the 2020 holiday season our biggest yet (Amazon)
+"Independent businesses selling on Amazon—nearly all of which are small- and medium-sized businesses—surpassed $4.8 billion in worldwide sales from Black Friday through Cyber Monday, an increase of over 60% from last year. More than 71,000 small- and medium-sized businesses worldwide have surpassed $100,000 in sales this holiday season to date. American small- and medium-sized businesses have sold an average of 9,500 products per minute this holiday season to date."

The state of fashion 2021 report: finding promise in perilous times (McKinsey)
+”For the fashion industry, 2020 was the year in which everything changed. As the coronavirus pandemic sent shockwaves around the world, the industry suffered its worst year on record with almost three quarters of listed companies losing money. Consumer behaviour shifted, supply chains were disrupted and the year approached its end with many regions in the grip of a second wave of infections. A turbulent and worrying year has left us all looking for silver linings — both in life and in business — knowing full well that we will need to make the most of them in the year ahead. Indeed, according to McKinsey Global Fashion Index analysis, fashion companies will post approximately a 90 percent decline in economic profit in 2020, after a 4 percent rise in 2019."

The art of building the impossible (The New Yorker)
+ "“I can’t do the calculus on this, either,” he added, shrugging. “But I can build it.” Ellison is a carpenter—the best carpenter in New York, by some accounts, though that hardly covers it. Depending on the job, Ellison is also a welder, a sculptor, a contractor, a cabinetmaker, an inventor, and an industrial designer. He’s a carpenter the way Filippo Brunelleschi, the architect of the great dome of the Florence Cathedral, was an engineer. He’s a man who gets hired to build impossible things."

Kelie Morgan 12/4/20 Kelie Morgan 12/4/20

The Weekly: Edition #74 - December 4th, 2020

Remote Work

"Missing from the debate is the fact that it’s not really up to the companies to choose. Employees will ultimately make the decision."

If there's one topic that has generated as much debate as politics in 2020, it's whether or not remote work has been beneficial for businesses since the pandemic began. This week, we found a wonderful piece that explores the potential knock-on effects of remote work and highlights the three camps of opinion:

1. Fully return to in-person teams:

"It’s not just tech employees, either. I have one lawyer friend who just chose one offer over another because its location was going to be more flexible, and another friend in finance who told me that he’s going to look for a new job as soon as his firm asks him to come back to the office."

2. Fully adopt remote working for all teams:

"On average, companies in major cities spend $1-2k per month to keep their employees at a desk in an office because that’s just what companies did. Imagine what they could do with $20k per person per year, a blank slate, and a desire to organize themselves around what they want to achieve."

3. Hybrid approach between in-person and remote:

"Offices exist principally to facilitate people sitting at desks using computers. Whereas they could exist principally to allow for more effective collaboration, which means a bigger variety of spaces more dedicated toward meetings, a smaller number of fixed desks, and the expectation that if you already have this giant list of work, and you just have to plow through it, then stay home. And when it’s time to do the roadmapping session to get together with the team and think about what you want to do next, then come to the office."

Packy McCormick makes the case that employees will ultimately decide the remote vs. in-person status quo since the top talent will demand greater flexibility in their worklives, and the companies who offer the greatest flexibility will retain the top talent. While we don't have a strong stance on how people should run their business, we do believe it is a worthwhile exercise to ask questions about how remote work may impact their business, competitive position, and industry at large.

For example, perhaps your business is a type that requires a physical presence for walk-in customers who will buy physical goods or services, and remote work is not an option at all. But who are your customers and your customers' customers? And will they still be your customers if their business adopts remote work policies?

There have been and will continue to be second and third order effects from remote work, and some are just beginning to materialize as the reality of permanent remote positions set in. It will be imperative for business owners to get ahead of how remote work will impact their businesses from a customer as well as a talent perspective. Other questions that come to mind that every business should be asking include:

- Will you be able to attract the same level of talent if you require personnel to be at the office?

- Likewise, if you adopt a fully remote working policy, does this open up new opportunities to hire from a global talent pool?

- Are there advantages to remaining connected as a team by a physical office space (our sense in M&A is that in-person meetings will end up winning deals far more often than zoom calls)?

- Are your customers at risk of moving elsewhere geographically if their jobs become remote positions?

- Is hybrid a viable option or would it lead to confusion and friction among employees within the various teams in your business?

- Knowledge workers can work remotely, but what about businesses that have both blue collar as well as white collar positions? Will some employees resent others who have the option to work from home?

- How would the culture of your organization be impacted if you elect for a fully remote workforce? A hybrid, flexible approach?

If there's anything we've learned in 2020, it's the importance of being able to pivot when necessary. There's no question that remote work has changed the nature of markets and industries drastically in many ways which have resulted in more subtle knock-on effects as well. How an operator responds to the changing trends and technologies could be the difference between surviving, thriving, or failure.

We'd like to hear from our readers: how is remote work impacting your industry or your business?

The franchise relationship that powers small business is fraying (Wall Street Journal)
+ "Franchises are an American staple. Born out of a network of sellers that peddled the Singer sewing machine in the late 1800s, the modern-day franchise model became popular after World War II. However, according to the Wall Street Journal, the (relatively) happy marriage between franchisees and corporates has frayed during the pandemic."

How tech for show business can automate IKEA warehouses (IKEA)
+ "What are the main benefits of automation of warehouse inventory checks? “Instead of manually checking the pallets using paper and pen, the solution is making the data collection digital through a camera and other sensors. The whole process is done autonomously during the night or between shifts, by the drones. This will increase the inventory accuracy and help us show our customers what’s in stock at a certain IKEA store today,” says Olof."

What a Biden presidency means for your finances (Of Dollars and Data)
+ "If you have spent any time studying Biden’s tax plan, you already know that it raises taxes on those with high incomes in a big way. Some of its key features include:

A new 12.4% social security tax on incomes above $400,000 (split between employers and employees)
Corporate income tax increase from 21% to 28%
Repeal of the Trump tax cuts (currently set to expire in 2025)
Long-term capital gains rate increase from 23.8% to 39.6% on incomes above $1,000,000
Elimination of the stepped-up basis rule"

A deep dive on Airbnb's business model and financials (The Generalist)
+ "Airbnb is still here, heading to IPO nearly a year later than Chesky and Gebbia had hoped. Short-term, investor interest may inversely correlate with a fear index — if positive vaccine trials are a mirage and borders remain closed, Airbnb's 2021 may look bleak. But those either with a rosier view of the next twelve months or a longer time horizon may wish to ask different questions. Namely, how can Airbnb stay one step ahead? The company will need to outfox competition, as hospitality incumbents shoulder into the sharing economy, and regulators, content to gum up the gears in specific geographies. Moreover, they'll need to do so while navigating towards profitability, a prize that has mostly eluded them thus far."

Black Friday was a bust for many stores but not for online shopping (Wall Street Journal)
+ "Roughly half as many people visited stores on Black Friday as they did last year, according to research firms that track foot traffic. Meanwhile, online spending jumped 22% from a year ago, making it the second-best online shopping day ever measured by Adobe Analytics. It is unclear whether an early start to the holiday shopping season, the online Black Friday surge and an expected record day on Cyber Monday will be enough to offset the money lost from in-person shopping for many chains."

2020 Deloitte pre-Thanksgiving pulse survey (Deloitte)
+ "In Deloitte’s Global State of the Consumer Tracker, only 25% of shoppers say they feel comfortable attending in-person events,¹ and consumers across the country have made it clear they plan to avoid crowds this Thanksgiving shopping weekend. To adjust for these health and safety concerns and to jumpstart the holiday shopping season, retailers added new promotions during the third week of October, around Amazon’s Prime Day. Deloitte’s InSightIQ data found these new promotions were effective in attracting shoppers, boosting sales during the week by 6% YoY."

Homebuyers brace for pain in a post-pandemic market (Yahoo! Finance)
+ "Recent housing data show how tight inventories already are. The supply of existing homes fell to 2.5 months in October, a record low for a period when normal inventory levels are four to five months of supply. For new homes, the months’ supply of inventory fell to 3.3 in October, also a record low. Real-time inventory data from Altos Research show that the supply of homes on the market continues to be down more than 40% year-over-year. "

How to think for yourself (Paul Graham)
+ "Independent-mindedness seems to be more a matter of nature than nurture. Which means if you pick the wrong type of work, you're going to be unhappy. If you're naturally independent-minded, you're going to find it frustrating to be a middle manager. And if you're naturally conventional-minded, you're going to be sailing into a headwind if you try to do original research."

We're never going back to the office (Not Boring)
+ "Now, a debate rages among three camps:

Return. In this camp are the old school businesses and new school businesses led by more conservative leaders who want their teams to get back to the office so they can get back to real work.
Remote. The organizationally bleeding-edge companies were remote-first or remote-friendly even before COVID, and many tech companies have announced that they plan to let their employees work from anywhere even after a vaccine.
Hybrid. This camp agrees that things won’t be exactly the same, and their solutions range from “Maybe we’ll let people work from home on Fridays!” to much more creative combinations. “Hybrid” gets a bad rap because to date, it’s meant “most of us are in the office but some of you can be remote and Zoom in for meetings,” but I’ll be referring to a more intentional type of Hybrid that treats everyone as a combination of Remote and in-person.

Missing from the debate is the fact that it’s not really up to the companies to choose. Employees will ultimately make the decision."

What is the “protein folding problem”? A brief explanation (The Roots of Progress)
+ "Today Google DeepMind announced that their deep learning system AlphaFold has achieved unprecedented levels of accuracy on the “protein folding problem”, a grand challenge problem in computational biochemistry. What is this problem, and why is it hard?"

Kelie Morgan 11/27/20 Kelie Morgan 11/27/20

The Weekly: Edition #73 - November 27th, 2020

The Work Ethic Behind Creativity

“Inspiration is for amateurs. The rest of us just show up and get to work. Every great idea I’ve ever had grew out of work itself.” - Chuck Close

In previous editions of The Weekly we have focused on everything from strategy to finance to operations. However, one topic we have yet to explore is creativity. Often, the most creative and forward-thinking companies in any particular industry end up as market leaders. But we would caution you that creativity in business doesn't necessarily equate to complexity. In fact, according to Mark Manson, the process behind creativity is quite boring.

As most folks know, we love boring. Turns out, being boring allows more space and time for the creative process to unfold.

Most people either identify as 'a creative person' or not creative at all. But Mark Manson's piece struck us as noteworthy because it illustrates how 'creative people' weren't so different from the rest of us after all.

In fact, the only differences between the Van Gogh's and the rest of the world were how hard they worked and how closely they observed the trends in their space.

For example, Charles Darwin was haled as a genius when he published his Origin of Species. But Darwin was, like most 'geniuses', an overnight success twenty years in the making after simply absorbing countless amounts of data for years:

"In all, Darwin spent over twenty years of his life coming up with natural selection. As often happens, afterward, many people attempted to attribute natural selection to a stroke of Darwin’s genius. But this chafed the old scientist. He had just spent his entire adult life collecting data from obscure places and trying to make sense of it, yet here people were, wanting to believe he’d made up his theory out of thin air. He repeatedly emphasized the amount of work that went into his new theory."

In fact, after detailing several other creative geniuses' careers including Vincent Van Gogh, The Beatles, and Mark Twain, Manson had this to say about their incredible success:

"There’s almost a direct correlation between how much someone created and how original their work ended up being."

With creativity, as in business, it simply pays to show up, and outwork the competition.

Here at Permanent Equity, we are working on building a collection of boring businesses who love simple, but creative approaches to their work that meet and exceed the needs of their customers. If there's anything that Manson can teach us, it's that anyone can be creative. It just takes the right combination of showing up, doing the work, outworking competitors, and remaining vigilant.

How Copart is making $1B from junkyard cars (Forbes)
+ "On a sprawling 97-acre lot beside railway tracks and auto repair shops in a section of eastern Long Island that’s definitely not the Hamptons, forklifts maneuver through a neatly organized salvage yard, moving everything from weathered pickup trucks to an almost-new Lotus coupe. This is no ordinary junkyard. Everything is coordinated electronically: The forklift drivers follow a meticulous schedule laid out on a tablet. Each car, be it a lightly battered BMW or a totaled Toyota, has a numerical code on the windshield so it can be digitally identified, inventoried and then moved to its corresponding spot in the sales area. In the squat, one-story building out front, customers who bought a vehicle online wait to pick up their newly purchased wreck after scanning a QR code on their phones. The well-oiled routine is mirrored at 243 Copart-owned junkyards across the U.S. and around the world. The publicly traded, Dallas-based firm dominates the market for processing and reselling salvage cars — vehicles damaged enough to be written off as a total loss by auto insurers as well as discarded cars still in decent condition."

Retailers now owe $52B in back-debt (The Real Deal)
+ "Even when a Covid-19 vaccine becomes widely available, the amount of debt may be insurmountable, industry pros say. An increasing number of brick-and-mortar stores, faced with expanded online shopping choices and lingering skittishness about the virus, may pack it in for good."

How the pandemic shook up this year’s turkey market (The Hustle)
+ "More than half of all turkeys sold over the course of the year in the US will be eaten this week, according to The Economist. With social distancing measures in place, the biggest change in 2020 is the size of the bird. Smaller gatherings mean greater demand for smaller turkeys (known as hens; ~10lbs.) as compared with larger turkeys (Toms; 15-25lbs.). But there’s a tiny problem: While demand for smaller turkeys is up, farmers have been culling their supply of hens since 2018."

The state of the digital publishing market, November 2020 (Pugpig)
+ "The Covid bump is clear to see in the raw data - we saw significant increases in users from Feb across all media, with the daily news brands getting a significantly bigger jump than the weeklies and monthlies. Many monthlies ran free issue campaigns over the summer which created a nice uptick in usage, and while we’ve seen a drop off since the summer, the majority of publishers are maintaining most of the gains they achieved earlier in the year well into the Autumn - so it’s looking great for readership across the board."

Sports has a Gen Z problem. The pandemic may accelerate it. (The Washington Post)
+ "While many have embraced digital platforms, leagues and teams were slow to tailor their offerings to the youngest generation, even as research made clear that Gen Z members — loosely defined as those born after 1996 — interact with the world much differently than millennials, Gen Xers and baby boomers. And these habits have taken a toll on the way they engage in sports, research shows. According to ESPN’s internal data, some 96 percent of 12- to 17-year-olds still identify as sports fans, a consistent figure over the past decade. But the share of fans who call themselves “avid” has been dropping, from 42 percent a decade ago to 34 percent last year."

5 boring ways to become more creative (Mark Manson)
+ "Creativity is a delicate dance between novelty and value. For something to feel creative it must feel both new but also useful in some way. Although we think of creativity as creating something that is unique, most of it isn’t. In fact, most of what we experience as being “new” is simply taking old stuff and remixing it in fresh or unexpected ways."

Why some tech workers leaving Silicon Valley are changing jobs (Wall Street Journal)
+ "Deepinder Singh, founder of a Bloomington, Minn.-based startup, had never bothered trying to recruit Silicon Valley tech workers. They were too expensive and didn’t want to move. In seven years, he had never gotten an applicant from a large tech company. But since May, more than a dozen people on both coasts have applied for jobs with his company, 75F Inc., which makes internet-connected, energy-saving HVAC control systems. One résumé came from Facebook Inc. ; another came from Twitter Inc. The 130-employee firm just hired an engineer from Sonos Inc."

The secretive town at the center of the world’s oil market (Institutional Investor)
+ "Once at the center of America’s black-gold rush, Cushing is now the world’s largest onshore oil storage and energy market hub. Signs of its long, tumultuous history can be seen throughout the town, which is situated on a barren plain surrounded by muddy grasslands. Pump jacks swinging their slow, mesmerizing limbs search for the last of the region’s oil in backyards, schoolyards, churchyards, and empty lots. The city’s population, which peaked in 1930 at just below 10,000, has been in decline ever since, lingering at slightly above 7,000. The town’s graveyards have more people in them than the homes. Beneath the ground, oil pipelines converge from every corner of North America, harking back to when oil flowed in Texas and Oklahoma seemingly without end."

Kelie Morgan 11/20/20 Kelie Morgan 11/20/20

The Weekly: Edition #72 - November 20th, 2020

Maintenance First, Growth Second

The idea that growth will solve all problems is one that gets more attention and tacit affirmation than thoughtful disagreement. This week, we stumbled across a podcast episode that highlights the other side of the coin that tends to be an afterthought in most people's personal lives and businesses: the importance of 'maintenance.'

In business as in life, when you fail to maintain the foundations, more growth can actually become an impediment to progress.

Just as it is easier to lose weight than to keep it off, it is easier to win a new customer than to keep them happy for a lifetime.

If a business owner fails to maintain current relationships with customers, employees, suppliers, and partners, churn is inevitable and new relationships only supplant the death of older, more stable ones.

Failing to maintain physical capital in a business may boost cash flows in the short term, but at what cost in the long term? What if capital expenditures become critical during a recession or in conjunction with other large financial outlays? Maintenance is a better bet in the long run.

Failing to maintain your current competitive position in one industry vertical while chasing after growth in a new vertical may result in disaster in both areas. It is the maintenance of one area that leads to success in others.

Finally, maintaining a strong balance sheet is far more important than growing assets at the expense of financial health. We've seen countless examples of what 'explosive' growth can do to a business (e.g. WeWork). You can't win the game, if you aren't in the game.

The ironic thing is that even though maintenance isn't sexy like 'growth' and 'innovation', it is critical to business survival and success. We love boring businesses who focus on maintaining their competitive position, their balance sheets, their businesses, and their relationships. Of course, growth is always a welcome objective, but growth for its own sake often comes at a greater cost. Businesses are built on maintenance first and growth second.

How McDonald's turned around its fast-food empire (The Hustle)
+ "According to a recent article from The Economist, Easterbrook, who took over in March 2015, rolled out a playbook built around simplicity:

Refocus on franchises
Pare back the menu"

In praise of maintenance in a world obsessed with innovation (The Art of Manliness)
+ "Humans like starting new things much more than taking care of older things. This is true on both an institutional and individual level: it’s more exciting to build a new road than to maintain it; more exciting to lose weight than to keep it off. There’s plenty of short-term pleasure and intrinsic motivation when it comes to pursuing something novel, but the effort to keep up unsexy maintenance on what we’ve already got takes real intent."

The green revolution has been won, says America’s new wind billionaire (Forbes)
+ "Even without tax breaks, wind and solar power are now cheaper than fossil fuels, a stunning turnabout in just the last decade. President-elect Joe Biden wants to renew soon-to-expire clean-energy tax credits. Plus, part of his $2 trillion climate plan is a pledge to install 60,000 wind turbines and 500 million solar panels over the next five years to achieve a carbon-free power grid by 2035. A Republican Senate would likely block most of that spending. No matter. With cities, states and corporations setting their own “net zero carbon” goals, the demand for industrial-scale solar and wind power, which now account for just 12% of domestic power supply, will continue to surge."

Going once, twice … Tribute Technology sold to Carlyle Group and Vista Equity (Connecting Directors)
+ "Just six weeks after placing Tribute Technology on the auction block, Providence Equity Partners has reportedly sold the funeral home software company for more than $1 billion. According to PE Hub, Carlyle Group will maintain a majority stake in Tribute, with Vista Equity holding a minority position. In September, Barron’s reported that Providence was shopping for buyers for Tribute Technology, which is a conglomeration of several deathcare companies including SRS Computing, Frazer Consultants, FrontRunner Professional, and AdPerfect. Providence’s 2018 spree of purchases of death-tech organizations led to widespread speculation about the equity firm’s intentions within the deathcare space."

Amazon isn't even that convenient anymore (Simon Pitt)
+ "More than that, I get this sinking feeling because finding things on Amazon, when you don’t know exactly what you want, is hard. I struggle to get a sense of which are good, which are overpriced, and which are drop-shipped from AliExpress to fund someone’s Tim Ferris-esque four-day workweek. Everything is either exploitatively expensive or suspiciously cheap."

In September 2020, for the first time in European history, registrations for electrified vehicles overtook diesel (JATO)
+ "Whilst overall the market posted a timid growth of a mere 1.2% in September, to almost 1.3 million passenger cars, the mix by fuel type signals big differences in growth rates. Demand for gasoline and diesel cars shows double-digit drops compared to September 2019 while the volume of EVs increased by 139% to 327,800 units – a record in terms of both volume and market share. This is the first time that EVs have broken the 300,000 units monthly mark, and only the second time that they have counted for more than 20% of registrations."

How Allbirds became Silicon Valley's favorite sneaker (Wall Street Journal)
+ "Four years after humbly launching its sneakers as an online-only disrupter product, the San Francisco-based Allbirds brand has gone relatively mainstream. It now has 22 stores in cities across the world, including Berlin, Shanghai and Auckland. Many people who wouldn’t know iOS from Intel own a pair of its $95 lace-up Wool Runners or $135 ankle-high Mizzles. Yet no one favors Allbirds more compulsively or reflexively than “tech bros”—a loose term for those digital zealots, male or female, who clock time at a startup or internet-focused company, clutching smartphones, begging for a Clubhouse invite and worshiping Elon Musk."

Telehealth is working for patients. But what about doctors? (Harvard Business Review)
+ "It has become almost cliché by now to note how Covid-19 has accelerated digital transformation in healthcare, with the number of Americans trying virtual care roughly doubling since the start of the pandemic. Although the pendulum has swung back in recent months – with in-person outpatient visits returning to pre-pandemic levels and some insurers pulling back on reimbursement – all indications are, as Seema Verma, the administrator of The Centers for Medicare and Medicaid Services (CMS), stated, that “the genie is out of the bottle on this one” and there’s no going back on telehealth."

The future of cities and remote work (Future of Cities Podcast)
+ "In this episode, hosts Eric Jaffe and Vanessa Quirk discuss how remote work is changing cities and interview professor of urban economics Richard Florida, Estonia’s digital transformation adviser Anett Numa, Tulsa Remote community manager Taylor Allen, and Topia’s Chief Product Officer Sten Tamkivi and Director of Product Management Chantel Rowe."

SpaceX’s riskiest business (The Atlantic)
+ "SpaceX is now responsible for astronaut safety to a degree no private business has ever experienced. And as the company moves toward a future of regular astronaut flights, the lessons of the space-shuttle era are at the forefront. SpaceX employees have received briefings about the aftermath of the two space-shuttle disasters, which killed 14 astronauts, as well as a launchpad fire during the Apollo program that killed three. They’ve heard from veteran NASA employees about the mistakes the agency made and how to avoid them. Jordan said that when new engineers joined the project, they were given a tour of a room at the Kennedy Space Center, closed to the public, where shuttle debris was displayed, so that they wouldn’t forget the perilous nature of their work."

Kelie Morgan 11/13/20 Kelie Morgan 11/13/20

The Weekly: Edition #71 - November 13th, 2020

The Messy Marketplace

"This was the greatest limiting factor on acquistion price. I could absolutely have negotiated a higher purchase price from a different buyer, but me walking away [post close] was a non-starter for many." - Josh Pigford

Most details behind the typical private equity transaction are by definition, well, private - except for the price. This week, we came across a wonderful piece by Josh Pigford that gives a rare glimpse behind the curtain into a seller's mentality and reflection on selling his company. The piece is worth highlighting due to the rich insight into what the features of the deal were (besides just the price) as well as the qualitative priorities of the players involved.

Having written a book on how messy the small business marketplace environment can be, we've seen all kinds of transactions consummated between buyers and sellers, each with nuanced differences in seller motivations and buyer requirements. Each flavor of buyers comes with its own set of priorities, risks, and requirements for sellers.

Some buyers are willing to "pay up" on paper with all kinds of earnouts for the seller and heavy amounts of leverage. Other buyers are motivated by longer timelines and will desire that sellers stay on for a longer, slower transition. Some buyers will simply buy a business for the people and get rid of the product or buy the product and get rid of the people. The combinations of requirements and priorities are truly endless.

Sellers, on the other hand, are as unique as the underlying business being sold.

Some want the 'highest price' and are willing to jump through hoops (earnouts, transition agreements, seller notes, rolling equity forward, etc.) to achieve their desired outcome. Some may just want surety of close and a minimum amount of guaranteed compensation for the business and are willing to accept a lower purchase price. Some sellers care more about their team post close than others. Some sellers want to be involved on a post-close basis depending on who the buyer is.

In Pigford's case, he was 1) not willing to stay on post-close, 2) wanted a clean transaction, and 3) desired a guaranteed minimum payout at close. Some of these priorities were obvious deal breakers for typical private equity buyers. Thus, it took the right 'fit' to consummate the transaction.

With the incredible number of combinations of priorities and motivations on both sides of the table, it isn't far off to say that each transaction in the SMB space is a minor miracle. At Permanent Equity, every one of our transactions is bespoke in the sense that we work with sellers to achieve a mutually beneficial outcome where all interests are aligned around the long term success of the business. Our advice to sellers and buyers is simple: if you are up front about priorities (price, deal structure, post-close operations), this will eliminate wasted time on both sides of the table and lead to a better fit for buyers and sellers in the long run.

"I sold Baremetrics" (Josh Pigford)
+ "So, why did the details start making sense? Why sell at all? Especially after we’ve had some of our best months of growth ever. Something I started coming to grips with was not only what fulfills me (making things), but also what I’m actually good at. Over a decade ago, after selling TheAppleBlog to Gigaom and staying on board for a couple of years to keep growing it, I decided to move on. In an email to the company about why I was leaving, Om Malik referred to me as a “starter” and that term has always really resonated with me. I absolutely love starting things (as is made painfully clear in this list of everything I’ve ever started)."

How Apple built its own chip empire and gave Intel the boot (The Hustle)
+ "But a 3rd (and highly consequential) deal has defined Apple’s mobile product road map: the acquisition of P.A. Semi for $278m in 2008. Per tech analyst Ben Thompson, P.A. Semi secured the talent and IP “that would undergird [Apple’s] A-series of chips, which have powered every iPad and every iPhone since 2010.”"

U.S. properties with foreclosure filings on the rise as pandemic remains a threat to economy (Attom Data)
+ "ATTOM Data Solutions, licensor of the nation’s most comprehensive foreclosure data and parent company to RealtyTrac (www.realtytrac.com), a foreclosure listings portal, today released its October 2020 U.S. Foreclosure Market Report, which shows there were a total of 11,673 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — in October 2020, up 20 percent from a month ago but down 79 percent from a year ago."

Many businesses thought they were insured for a pandemic. They weren’t. (Freakonomics)
+ "No physical damage, no insurance reimbursement. Why should you care? Small businesses employ nearly half of American workers. Even before the pandemic, many small businesses only had a few weeks’ worth of cash on hand, if that. Many small businesses have already gone under, with more to follow. How will the insurance industry — and the government — respond to this crisis? And why wasn’t this pandemic insured? That’s what we’ll try to find out today on Freakonomics Radio."

The future of the shopping industry (ICSC)
+ "According to the findings of the Envision 2020 project, shopping centers are on their way to becoming true e-commerce participants, through increasingly sophisticated websites, onsite digital interfaces with consumers, and mobile communications to shoppers within the mall and beyond its boundaries. Conversely, e-commerce retailers — from Bonobos to the mighty Amazon.com with its new pop-up stores — are rolling out brick-and-mortar stores in an effort to solidify their brands and curate their product assortments. As we look to the future, a hybrid form of commerce is emerging, one in which shoppers move seamlessly between the physical and digital worlds of retailing as they research products and make purchases."

The Jason and Scot Show on US Retail Census Data (Link)
"Paul Bucchioni is Branch Chief and Scott Scheleur is a Supervisory Survey Statistician, both with the Retail Indicator Branch, Economic Indicators Division of the U.S. Census Bureau. In this interview, Paul and Scott walk us through the real sales data products that the US Census publishes and gives us advice about how to interpret the data.

Two metal-detector enthusiasts discovered a Viking hoard. It was worth a fortune—but it became a nightmare. (The New Yorker)
+ "Scanning the environs of King’s Hall Hill, the men suddenly picked up a signal on their devices. They dug into the red-brown soil, and three feet down they started to uncover a thrilling cache of objects: a gold arm bangle in the shape of a snake consuming its own tail; a pendant made from a crystal sphere banded by delicately wrought gold; a gold ring patterned with octagonal facets; a silver ingot measuring close to three inches in length; and, stuck together in a solid clod of earth, what appeared to be hundreds of fragile silver coins. The find had all the hallmarks of a hoard—the term used by archeologists to characterize a collection of valuable objects that was deliberately buried or hidden, usually with the idea that it would later be retrieved."

Kelie Morgan 11/6/20 Kelie Morgan 11/6/20

The Weekly: Edition #70 - November 6th, 2020

Reflect, Reset

In times of uncertainty, there are two paths — you can try to persevere and forget, or you can try to learn and grow. At Permanent Equity we choose the latter and would encourage you to do the same. With proper perspective, pain and confusion can be some of life’s best instructors. When reality doesn’t match our expectations, it tells us something important and valuable. Current reality helps us calibrate to future possibilities, often in humbling ways. It exposes risks we didn’t know existed, shapes our probabilities, and illuminates opportunities. Life is so much richer (pun intended) if you don’t merely grin and bear it.

2020 has been a year of ups, downs, and everything in between. There's never been a better time to pause, reflect, and reset. As we do so, here are a few questions that come to mind that may be helpful to your business as well:

- How have your relationships with customers, suppliers, and employees changed during these trying times? If they have improved, how can you build off of this momentum going forward? If they have deteriorated, how can you restructure and rebuild key partnerships that are strained? Are you having the conversations necessary to understand where your relationships really stand?

- What does your business's balance sheet look like? Are expenses causing unnecessary risk, or assets which could be better utilized?

- What steps can you take now to protect your business against future lockdowns? What can be outsourced, diversified, or made digitally redundant?

- When is your industry expected to recover, how fast, and how can you position your business to be in front of the pack as demand returns?

- What have you learned from your competitors during the pandemic that either helped or hindered their survival and how can you implement these lessons?

- What strategies have you observed in other industries that may be applicable to your industry, but haven't been adopted yet? What’s stopping you from doing so?

- What new customer demands are emerging as a result of the pandemic that are currently underserved and unmet? If you can’t think of any, give your best customers a call.

- What are the second order effects from the coronavirus in your industry, the consequences of the consequences, and how can you position your business to be ahead of the curve?
- How have the economic shocks experienced by your industry (demand, supply chains, financial, etc.) changed how you think about operating your business going forward?

In the immortal words of Yogi Berra, "it's tough to make predictions, especially about the future." In fact, it isn't just tough, it's impossible. Given the truth to Berra's witticism, it is important bear in mind that times like these are learning opportunities and lessons worth adding to the playbook for the future.

Marc Andreessen on productivity, scheduling, reading habits, work, and more (a16z)

+ "You know, we’ve both worked with executives where they were scheduled to the ‘nth’ degree. The three things you tend to notice with executives like that. One, they just never have any time to actually think. And that turns out to be a fairly important thing. Two, they have a hard time adjusting to changes in circumstances. In our business of venture capital, you get a lot of problems that come up. There is a lot of firefighting. It’s like those classic movie scenes when there’s a huge crisis and somebody calls out to their secretary “Cancel my schedule!”. Well, maybe you wouldn’t need to do that if you had some flexibility in your calendar. Then the other thing you’ve probably seen is the managers who are regimented to that degree end up being micro managers. You’ve probably seen examples of this where some of these folks end up in the weeds on everything. The good news is they’ve got the pulse of everything happening in the organization. The bad news is they’ve become the bottleneck."

U.S. states face biggest cash crisis since the Great Depression (Wall Street Journal)

+ "Nationwide, the U.S. state budget shortfall from 2020 through 2022 could amount to about $434 billion, according to data from Moody’s Analytics, the economic analysis arm of Moody’s Corp. The estimates assume no additional fiscal stimulus from Washington, further coronavirus-fueled restrictions on business and travel, and extra costs for Medicaid amid high unemployment."

The falling price of Manhattan retail space, by the numbers (Marker Media)

+ "Eighty percent: That’s the plunge below the peak price of retail real estate on the most desirable stretch of Madison Avenue in Manhattan, according to the Wall Street Journal. Specifically, the Journal points to the recent sale of three buildings for what works out to $1,340 per square foot — compared to $7,589 paid for a building six blocks away back in 2014. Data from brokerage firm Cushman & Wakefield displayed a similar trend: average Madison Avenue ground-floor rental prices in the second quarter of 2020 plummeted to their lowest rate since 2011."

The health of main street business (Homebase October Report)

+ An in depth look at small business metrics across US geographies highlights how warmer states are seeing business pick up while colder states are experiencing muted declines.

With no commute, Americans simply worked more during coronavirus (Wall Street Journal)

+ "From mid-March to mid-September, Americans spent 60 million fewer hours commuting to and from work each day, according to one estimate, as lockdown orders to curb the spread of Covid-19 forced many employees to clock in from home. But instead of pouring the reclaimed time into hobbies or happy hour, most funneled it into work and chores."

6 counterintuitive rules for being a better manager — advice from Lambda School, Quip & Facebook (First Round Review)

+ "“Management isn’t telling people what to do. It isn’t setting a vision and aligning the work around it. That’s leadership. To me, the best leaders are able to not just say, ‘Here's where we need to go,’ but are also capable of bringing people along, inspiring them, and making the ‘why’ behind that goal clear,” she says. “True management is the act of making the people around you better. Management is about investing in people, figuring out who they are, what they're good at, what motivates them, and then aligning the work a company has to do with their role and their growth areas.”"

How to stay creative when life is monotous (Harvard Business Review)

+ "Spend time in nature. A psychological study that looked at the impact of nature on creativity found that spending quality time outside improves people’s creative potential. Fifty-six people who went on a hiking trip took an assessment that measured creative potential using word associations. Twenty-four took the test before they began the trip, and the other 32 took it on the fourth day. Those in the latter group performed much better. Researchers ultimately found that spending time in nature improved creativity test scores by 50 percent."

Will bowling alleys survive the pandemic? (InsideHook)

+ "Bowling and the coronavirus have one thing in common. In both cases, Americans comprise a disproportionate number of the people involved. Of the 100 million annual bowlers worldwide, Americans make up an astonishing 70 million. Before the pandemic, the industry was raking in around $6 billion each year. A majority of states across the nation offered bowling as a high school sport. Highly successful professional bowlers were making well over six figures a year (believe it or not). Still, rewind just a few years back, and some reports were spelling doom for the country’s lanes, noting that revenue was down $10 billion since the mid-’90s and growth had lagged since the ’60s, when there were 12,000 bowling centers nationwide."

Kelie Morgan 10/30/20 Kelie Morgan 10/30/20

The Weekly: Edition #69 - October 30th, 2020

Political Expectations 2020 Survey Results

Last week, we put together a short survey meant to gauge political expectations in the SMB space for owners, service providers, employees, and investors. We sliced and diced the data in a neatly digestable piece that has a lot of interesting insights around expectations from the SMB community. Some of the key takeaways included:

- "Aggregating these responses, 38% of those polled believe Biden will be elected with a unified government, with Democrats winning both the Senate and the House. 27% believe Biden will be elected with a Democrat-controlled House and a Republican-controlled Senate. 19% think Trump will win the presidency with a split House and Senate. 9% believe Trump wins with a unified government. You can see how these numbers break down by voting intent in the slide deck."

- "Asked about the impact on Capital Gains tax rates, 87% of respondents who believe Biden will win with a unified government believe cap gains rates are going higher, ranging down to 5% of respondents who believe Trump will win with a unified government."

- "Corporate Tax rate implications showed a similar range, with 94% anticipating higher corporate taxes under a unified Biden government vs. 5% anticipating higher rates under a unified Trump government. Income Tax expectations show similar disparities."

- "78% of all respondents are keeping their hiring plans steady, with little variance based on anticipated election outcome, and 57% are not altering the plans for financial or strategic investment in their companies with no variance based on anticipated election outcome."

From the Permanent Equity team, a big thank you to everyone who participated.

No matter who wins and what the outcome is, we're still betting money on American talent and dynamism going forward.

Resetting e-commerce (Benedict Evans)

+ "Physical retail itself has been a ‘boiling frog’ for 20 years. Every year ecommerce gets a little bigger and the problem gets a little worse, but the growth in any given year was never big enough for people to panic, and you could always tell yourself that sure, people would buy that other industry’s product online, but not yours. I think we all now understand that anyone will buy anything online, given the right experience, and if your retail model is based on being an end-point to a logistics chain then you have an existential problem."

How Apple is organized for innovation (Harvard Business Review)

+ "As is often the case with decentralized business units, managers were inclined to fight with one another, over transfer prices in particular. Believing that conventional management had stifled innovation, Jobs, in his first year returning as CEO, laid off the general managers of all the business units (in a single day), put the entire company under one P&L, and combined the disparate functional departments of the business units into one functional organization."

Staying home: how the coronavirus changed consumer behaviors and company valuations (Morningstar)

+ "We’ve identified three trends that have the greatest ability to reshape the postpandemic economy: shifting workplace patterns, social distancing and its impact upon travel and dining sectors, and acceleration of e-commerce and digital entertainment trends. We dig into how we expect these consumer behavior trends to play out postpandemic."

Lenders are cracking down on mall owners behind on the mortgage (Wall Street Journal)

+ "During the early months of the pandemic, lenders were willing to allow rent deferrals and offer other concessions to retail property owners. Retail cash flow would return once the initial lockdown period passed, lenders figured. But the pandemic has accelerated store closures. In a big blow to dozens of malls, Lord & Taylor filed for bankruptcy in August and will close all 38 of its stores. Now, as many landlords continue to struggle and miss payments, some banks and other lenders think it is time to start cracking down."

Your marketing org is slow. Here’s a framework to move faster. (First Round Review)

+ "A common misconception is that speed is associated with sloppiness, lack of thought and low quality. But speed is not the same thing as running around like a chicken with its head cut off. Real speed is moving fast towards impact and learning. It’s moving as fast as possible towards the most important thing, based on clear directives."

When does predictive technology become unethical? (Harvard Business Review)

+ "In the U.S., the story of Target predicting who’s pregnant is probably the most famous example of an algorithm making sensitive inferences about people. In 2012, a New York Times story about how companies can leverage their data included an anecdote about a father learning that his teenage daughter was pregnant due to Target sending her coupons for baby items in an apparent act of premonition. Although the story about the teenager may be apocryphal — even if it did happen, it would most likely have been coincidence, not predictive analytics that was responsible for the coupons, according to Target’s process detailed by The New York Times story — there is a real risk to privacy in light of this predictive project. After all, if a company’s marketing department predicts who’s pregnant, they’ve ascertained medically sensitive, unvolunteered data that only healthcare staff are normally trained to appropriately handle and safeguard."

Toxic workers and what they do to your business (Harvard Business Review)

+ "While there has been a strong focus in past research on discovering and developing top performers in the workplace, less attention has been paid to the question of how to manage those workers on the opposite side of the spectrum: those who are harmful to organizational performance. In extreme cases, aside from hurting performance, such workers can generate enormous regulatory and legal fees and liabilities for the firm. We explore a large novel dataset of over 50,000 workers across 11 different firms to document a variety of aspects of workers' characteristics and circumstances that lead them to engage in what we call "toxic" behavior. We also explore the relationship between toxicity and productivity, and the ripple effect that a toxic worker has on her peers. Finally, we find that avoiding a toxic worker (or converting him to an average worker) enhances performance to a much greater extent than replacing an average worker with a superstar worker."

How NASA discovered water on the moon (The New Yorker)

+ "There are several avenues by which water might arrive on the lunar surface, but very few ways for it to persist there. Water could be delivered by micrometeorites—grains of space dust from comets, asteroids, and other celestial objects, which constantly slam into the lunar surface. It might also originate, in a manner of speaking, from the sun. In the nineteen-fifties, Eugene Parker, a physicist at the University of Chicago, hypothesized that the sun’s corona—the shimmering outer layer best seen during a total solar eclipse—was hot enough that its particles could billow out into space, in a phenomenon he termed solar wind. The Soviet Union’s Luna 1 spacecraft detected solar-wind particles the following year. The wind’s currents contain hydrogen; scientists theorized that, if that hydrogen landed on the moon, it might react with oxygen it encountered to form hydroxyls, or perhaps even water."

Kelie Morgan 10/22/20 Kelie Morgan 10/22/20

The Weekly: Edition #68 - October 23rd, 2020

Political Expectations 2020 Survey

In lieu of our regular weekly column, we put together a brief survey aimed at gauging how the SMB space is collectively thinking about the upcoming elections and how they will impact valuations, tax policy, hiring, the economy, and more.

This survey is completely anonymous and we plan to publish our results for the benefit of the SMB space. We'd love it if you took 5 minutes to complete our survey at the link below:

Permanent Equity's SMB Political Expectations 2020 Survey

A small business CEO's guide to uncertainty (Permanent Equity)

+ "Responses from industry giants will differ in scale and scope from those of smaller companies, but the core questions are similar. As a small company operator, you must still make decisions about key areas like contract terms, inventory, CAPEX, suppliers, product materials and design, distribution, pricing, and intended rate of growth as you look to 2021 and beyond. While overused this year, “never waste a good crisis” rings true. Our aim [in this essay] is to help break down what the research and data highlight, examples of corporate response, and frame a discussion that may be useful in making decisions about your small business’s future."

How Yeti survived a pandemic — and private equity (Cheryl Wischhover)

+ "Nothing about what Yeti sells should have poised it well for a pandemic-induced recession: Its signature product is a $300 luxury cooler, and its most profitable one is a portable insulated cup often used by commuters on the way to the office. The company’s most recent expensive bet was on in-person experiential retail. And it’s been backed by private equity, an arrangement typically saddled with debt that has plummeted brands like J.Crew and Neiman Marcus into bankruptcy or insolvency during this crisis.
But so far Yeti has managed to escape this fate."

The next economic crisis: empty retail space (Politico)

+ "Hotels and retail, which together make up 40 percent of the commercial mortgage-backed securities market, have been hit the hardest. Months after lockdowns lifted, 1 out of every 2 hotel rooms remains unoccupied. Urban hotels, which have some of the largest operating costs, are faring the worst, with just 38 percent occupancy rates. And retail, which was already struggling before Covid struck thanks to the rise of e-commerce, has seen its decline hasten. It’s not just small strip malls, either: The owner of the $1.9 billion Mall of America entered into an agreement with its special servicer in August to avoid foreclosure."

Zoom towns are exploding in the West (Fast Company)

+ "There has been a drastic increase in remote work since March, when the pandemic hit the U.S. Nearly 60% of employees are now working remotely full or part time, according to a recent Gallup poll. Nearly two-thirds of employees who have been working remotely would like to continue to do so, according to that same poll. That would seemingly give workers a lot more flexibility when it comes to where they call home."

The city center recession—and the resilience of suburban America (Forbes):
"The results also highlight the difference between the principal cities in the largest 25 metro areas and smaller metro areas. According to the Bureau of Labor Statistics, employment in the 25 largest metro areas was harder hit by pandemic-induced economic disruptions. That may be because the principal cities in larger metro areas are not only denser employment centers, but also major tourist and entertainment destinations. Also, workers in many of the largest metro areas rely most heavily on public transportation to get to principal cities’ workplaces. Therefore, they were more likely to avoid commuting to principal cities due to the fear of contagion."

40th semi-annual 'taking stock with teenagers' survey (Piper Sandler)

+ "Teen “self-reported” spending at an all-time survey low of $2,150, down 5% sequentially & 9% Y/Y"

The 40 best questions to ask in an interview for a candidate — how to go deeper than “what’s the culture like?” (First Round Review)

+ "Today we’re focusing on those moments when the interviewer turns to candidates and asks the inevitable, “Do you have any questions for me?” at the end of the interview. It's critical to come up with a slate of good questions to ask that uncover vital information about the job opportunity — and simultaneously serve up another chance to highlight your strengths as the ideal candidate."

A tech CEO suing his guide could change Everest travel (Outside)

+ "A March 27 lawsuit, filed on behalf of Zac Bookman, CEO of Silicon Valley’s OpenGov, alleges that Seattle-based guide Garrett Madison scuttled their September, 2019, Everest attempt because another of the expedition members was out of shape and quit the trip, which sapped Madison’s incentive to take his other clients to the summit. Additionally, Bookman and his attorney alleged in a January 21, 2020, letter that the Sherpas hired by Madison’s company, Madison Mountaineering, were, “clearly lazy and inefficient,” which may also have contributed to the cancellation. As a result, Bookman sued Madison for $100,000 for breach of contract and fraud."

Kelie Morgan 10/16/20 Kelie Morgan 10/16/20

The Weekly: Edition #67 - October 16th, 2020

Rent or Buy?

"It’s this commoditization of supply and associated end of fixed costs that’s now starting to give rise to a long tail of providers. Thanks to lower and variable input costs, it’s possible to make money at lower volumes than in the past, which in turn means a higher number of providers can co-exist."

To buy or rent? This is a fundamental question for all businesses that touches nearly every area of the enterprise. Buying vs. renting is also a very strategic question that requires balancing capital needs for the business, capital availability, and strategic importance of the system in question. This week, we wanted to highlight and contrast two pieces that offer direction: an excellent piece by Ben Robinson that explains the transition to a post-fixed costs (rental) economy, as well as an article by Chris Mayer explaining how (buying) fixed investments can be a source of competitive advantage.

40 years ago, nearly every business was required to invest heavily into its physical operations to generate sufficient scale that would lower costs per unit over these fixed investments. But as the internet and software digitized pieces of every business, the economy shifted from heavy capital expenditures (buying) to heavy operating expenses (renting):

"In the industrial age, scaling supply meant mass production to spread the fixed cost of large capital investments over large volumes. And the industrial age was an age of mass produced, relatively standardized goods. This applied to goods and services provided by the private sector, but also to state-provided services, such as education and public services. Since the advent of the internet, this is changing. We first noticed the shift in industries where both supply and distribution could be digitized (e.g. media) because supply became abundant faster and this highlighted our limited attention sooner. But it’s becoming increasingly apparent that all industries are being disrupted as software has eaten the world. More and more physical goods have software components to them, making supply more digitized."

In most cases, we would argue that businesses that continue to operate in a pen and paper world will not be as efficient or flexible with its capital base as organizations who run their business in the cloud, on rented servers, with rented warehouse space. As the cost of starting businesses has plummeted along with the cost of supply (which became heavily digitized), the constraint of businesses ceased to be supply. Instead, the constraint became demand (our attention). This in turn led to the rise of the aggregator. And as the supply side (businesses) quickly became commoditized in many industries, the owners of demand (the aggregators) began to capture more of the value:

"The constraint on all digital-era businesses is demand and the gatekeepers of demand — the most profitable actors in the digital ecosystem — are aggregators... As Clayton Christensen predicted in the Law of Conservation of Attractive Profits, as one part of the value chain commoditizes, the value is captured elsewhere. As platforms helped generate an economic surplus, aggregators increasingly captured that value — especially Google and Facebook. While it has become cheaper to start a business, a sharp increase in customer acquisition costs more than offset these savings."

This leads us to the ironic conclusion that it's never been cheaper to start a business than today but never been harder to defend and scale it, because the internet has lowered barriers to entry and eroded competitive advantages for nearly all industries.

So what does this mean for small business owners learning to best position their enterprise in a digitally native world?

Robinson answers with two solutions:

"In a digital world, where returns to scale are bigger, incumbents will be harder to displace. Therefore, it follows that any startup should focus either on creating a new market or, more likely, on market blind spots: the niches where consumers are underserved or overserved."

Fish where the fish are. Competition leads to a zero-sum outcome in most business contexts, so find a pond where there are ample fish and very few fishermen.

While Robinson makes astute points on why businesses should transition to a more heavy rental model for server space, compute time, digital ad space and more, sometimes the most strategic assets need to be owned outright. The beauty of the modern day economy is that every part of an organization can be 'rented' or outsourced, but that doesn't mean an owner necessarily should pursue this route.

Chris Mayer explains how Copart built its massive competitive advantage in the virtual car auction market by buying its industrial land instead of leasing it:

"I asked one industry veteran, “How hard is it to compete with Copart?” And his answer: “You’d be crazy to want to compete with Copart. For one thing, they own so much land…” Land. Copart, too, invested a lot of money in land over the years. Hundreds of millions of dollars in land. But here’s the thing: IAA did not. It chose to lease land. Over time, the consequences of that decision loom large. And it is no easy fix for IAA. A fellow investor told me that he discovered the land Copart bought around Los Angeles years ago is worth ten times what they paid for it. That’s a pretty good moat. You want to come into our market? Go ahead, pay 10x what we paid - or good luck leasing it... I mean, if you don’t have the land, you have no place to put the cars."

Copart decided to buy instead of lease its land to hold inventory due to the strategic nature and scarcity of well-placed locations around booming metropolitan areas. Over time, this one decision to own instead of lease their land led Copart to take a huge piece of the market simply because their competitors were economically locked out of competing in the same MSAs. While we would generally recommend the 'rent' over 'buy' decision in most cases, sometimes the strategic nature of the resource in question can lead to an opposite conclusion.

This week, we'd like to hear from our subscribers: when allocating capital to a resource (real estate purchase, inventory storage, warehousing, compute power, full time employee vs. 3rd party, etc.), what do you take into consideration when choosing whether to rent or buy?

The role of governance in family enterprises: navigating purpose, power and performance (Deloitte)

+ "Once you have a clear purpose, it’s easier to share power. Roles and decision rights crystalize around what’s important to each individual family member, and they gain ownership over certain aspects of running the business. Once these responsibilities are carved out, the family can devise policies and create forums to strengthen communication, aid collaboration and learning, and address differences and any disputes that might arise. By sharing power through purpose, succession planning becomes a far more inclusive and collaborative process, instead of a highrisk event that can harm both family and business."

Strategy in the post-fixed costs economy (Ben Robinson)

+ "In its simplest expression, digitization flips the industrial age equation. What was scarce in the industrial age was supply; what is scarce in the digital age is demand (attention)."

The economics of vending machines (The Hustle)

+ "The daily minutiae of owning a vending machine seemed a bit dull: buying bulk candy at Sam’s Club, stocking machines, collecting weathered bills and buckets of coins. But Pippens saw an opportunity to be her own boss. She partnered up with her boyfriend and another business partner, bought a vending machine on Facebook Marketplace for $1.6k, and plunked it down at a local auto parts store, where it now grosses $400 per month."

The company that has a monopoly on ice cream truck music (The Hustle)

+ "In 1973, an electrical engineer named Bob Nichols was watching the film The Sting when a song on the soundtrack — Scott Joplin’s 1902 ragtime hit, “The Entertainer” — caught his ear. The right clip of that song, Bob realized, would make for an irresistible ice cream truck jingle. He could imagine trucks gliding through the American suburbs, the tinkling notes summoning children to buy snow cones, sundaes, and bomb pops. And he was uniquely poised to make it happen: as the founder of Nichols Electronics, a tiny Minnesota-based company, Bob supplied the music boxes — preloaded with dozens of jingles — for the vast majority of the country’s ice cream trucks."

How Airbnb pulled back from the brink (Wall Street Journal)

+ "The industry at large, he said, was betting on business travel recovering faster than leisure, because that’s what happened the last time travel shut down in the wake of 9/11. Airbnb’s hotel-centric rivals, Booking Holdings Inc. and Expedia Group, would stand to gain if so. Mr. Chesky was betting on the opposite, for a simple reason: “9/11 was before Zoom,” he said. Unlike hotels, Airbnb didn’t own any properties. Its overhead costs were low, and it didn’t need a minimum occupancy to keep doors open. He chose the debt. Bankers cranked out a term-sheet in 72 hours. Silver Lake and Sixth Street lent the company $1 billion. An additional $1 billion loan followed from another consortium of investors."

What 800 executives envision for the postpandemic workforce (McKinsey)

+ "Across all sectors, 15 percent of executives surveyed amid the pandemic said at least one-tenth of their employees could work remotely two or more days a week going forward, almost double the 8 percent of respondents who expressed that intention before COVID-19. This varies by country, with 20 percent of executives surveyed in the United Kingdom and Germany saying that at least one-tenth of their employees could work remotely two or more days a week going forward, which drops to only 4 percent among respondents in China. Extending remote work beyond two days a week, however, was less popular among respondents overall, with just 7 percent saying at least one-tenth of their employees could work three or more days a week remotely."

America is experiencing a startup boom (The Hustle)

+ "Based on the most recent data, people have been getting their startup on. Through the 40th week of 2020 (ending Oct. 3), business applications were up a record 40% YoY. This builds on the 883k+ biz applications submitted in Q2 and is an all-time high, including for “high propensity” businesses, which are linked to firm creation and staff employment, The Economist reports."

What psychedelic mushrooms are teaching us about human consciousness (Discover Magazine)

+ "Growing evidence suggests the claustrum orchestrates consciousness — gathering, sending and integrating information from almost every brain region. Some, like neuroscientist Christof Koch, believe that the sense of self and ego rest here. Several years ago, Koch and colleagues of the Allen Brain Institute for Brain Science found anatomical evidence in mice to support this idea. They identified several large neurons projecting from the claustrum, with one wrapping around the circumference of the brain. Around the same time, they published a paper in the Journal of Comparative Neurology describing the vast connections between the claustrum and various brain regions in mice."

Kelie Morgan 10/8/20 Kelie Morgan 10/8/20

The Weekly: Edition #66 - October 9th, 2020

Common Enemy, Common Goal

The American small business economy is simultaneously a beautiful free market system full of opportunity and a ruthless battleground of competitive forces. Throw a pandemic into the mix, and industry dynamics can turn overnight. A common enemy (in this case, covid-19) can easily turn competitors into cooperators, and tense relationships into productive partnerships.

This week, we read a piece detailing how Yelp is coming to the aid of small businesses in dire need of digital transformations in a digital-native world due to the advent of covid-19. What is notable, however, is that as late as 2019, there were stories surfacing of Yelp's predatory behaviors towards small businesses using a pay-to-play advertising scheme that hurt companies unwilling to pay Yelp's prices:

"Yelp had been accused of extorting countless small businesses to the point of them nearly going out of business due to negative reviews. To make matters worse there is a section below every Yelp profile (most miss this) that is faded gray. It reads “other reviews that are not currently recommended”. What does this even mean?"

At the moment, hundreds of thousands of small businesses around the country teeter on the brink of closure due to government mandated lockdowns and a lack of consumer demand. Yelp's business is inextricably tied to main street small business. Nothing unifies a sour relationship more than a common enemy. This about-face in Yelp's case is a staunch reminder of how important delighting - rather than squeezing - customers is for long-term success.

In edition #57 of The Weekly, we explored how Costco cultivated its supplier ecosystem and built its world-class Kirkland brand by leveraging its distribution network and considering its suppliers' incentives. In this case, Yelp's suppliers and customers are the same - small businesses. And it has every reason to help its customers transition quickly to a new normal - in fact, its survival depends on it:

"Yelp and the businesses it works with had to pivot to stay relevant to our new, socially distant society. But how does a company that's made its name with physical properties — and tested the trust of small businesses on more than one occasion — move into the virtual world? The site that reinvented the concept of the Yellow Pages would have to reinvent itself."

We suspect (and hope) the 'common enemy' dynamic has played out across many industries. As we wrote back in March when covid-19 reached pandemic status, it will be important for owners, vendors, and customers to lock arms as we begin the long recovery ahead:

"Being in the same boat forces everyone to recognize our shared humanity in these turbulent times. Those who choose to grab turf in the short-term may win the battle, but others who survive the war will not remember their war-time decisions kindly. Now is the time to recognize our common humanity. There are no businesses without customers, there are no customers without jobs, and there are no jobs without businesses."

Inside Ed Rudisell’s pandemic nightmare (Indianapolis Monthly)

+ "No. We’ve been here for a decade and even though we’re closed, we still have invoices to pay. We still have utilities on because we still have to be in the building. I work 70 hours a week at Siam Square and don’t have time to liquidate a restaurant, much less two. Nor can we afford to pay someone to come in and do it. I’ve got to figure out how to close down 10 years of accumulated paperwork, chairs, tables, kitchen equipment, and tons of small wares and plates. It would take me weeks to do just a third of all of this. Where do we even start? We’re not just bleeding, we’re hemorrhaging badly. The only way to stop it was to lock the doors. At least then we can try to figure out how to make the bleeding stop."

Small business recovery playbook (Protocol)

+ "A pandemic has forced shops, restaurants and thousands of other small businesses to rethink everything about the way they work. This is your guide to the new normal."

Are airline loyalty programs worth more than the actual airlines? (The Hustle)

+ "According to a Financial Times analysis, loyalty programs are worth ~$26B to Delta — more than the airline’s current market value of $20B. The same holds for America Airlines ($24B vs $6.6B) and United ($20B vs $10.5B). Without their loyalty program, tech writer Byrne Hobart notes, Delta’s physical airline operation (planes, landing slots, brand) is worth less than zero — in this case, negative $6B."

The restaurant industry in New York City: tracking the recovery (Office of the New York Comptroller)

+ "After a decade of job growth that was more than double the rate for local jobs overall, the restaurant industry reached its highest number of establishments and jobs ever in 2019. Despite relatively lower average wages, restaurants provide a steady source of jobs for many residents, particularly Hispanic and Asian minority populations and immigrants. Since March 2020, the restaurant industry has been hit very hard by the COVID-19 pandemic. Mandatory closures, stay-at-home and socialdistancing orders, the onset of a severe economic recession, and travel restrictions have resulted in unprecedented upheaval for the industry."

Digital 2020 - July global statshot report (HootSuite)
+ "The latest insights into how people around the world use the internet, social media, mobile devices, and ecommerce."

How Yelp pivoted to helping small businesses during the pandemic (Protocol)
+ "In late March, Yelp unveiled a banner for the top of businesses' profile pages that allowed them to quickly notify customers to COVID-related changes. Soon after, it built a section into the page that allowed businesses to post updates on their COVID-19 safety practices and changes to operations. Those updates are marked with a timestamp, so customers can see whether that information is out of date. Pages now include a nine-part checklist where businesses can indicate safety measures they're following, like whether staff wears gloves and masks, if there's contactless payment or hand sanitizer in the store, and if social distancing is enforced."

Drive growth by picking the right lane — a customer acquisition playbook for consumer startups (First Round Review)

+ "In our experience, founders are often surprised to learn that there are very few routes to scalable new customer acquisition. For consumer companies, there are only three growth “lanes” that comprise the majority of new customer acquisition:
1. Performance marketing (e.g. Facebook and Google ads)
2. Virality (e.g. word-of-mouth, referrals, invites)
3. Content (e.g. SEO, YouTube)"

Long before Nikola trucks, Trevor Milton sold investors on startups that faded (Wall Street Journal)

+ "Mr. Milton, 38, resigned last month as executive chairman of his latest startup, electric-truck maker Nikola Corp. NKLA -2.80% , after a short seller’s report said he made misleading claims about the company’s technology. He had previously persuaded well-known auto-industry figures to back Phoenix-based Nikola, which at its peak was valued at more than Ford Motor Co., making him a billionaire. It was among the most talked-about entrants among a host of companies trying to build a future for electric vehicles. Nikola is by far Mr. Milton’s highest-profile blowup. But combined with the decade-old Swift deal and a number of other ventures in between, a pattern emerges for the self-described serial entrepreneur."

Kelie Morgan 10/2/20 Kelie Morgan 10/2/20

The Weekly: Edition #65 - October 2nd, 2020

Incentives, Speed, and Focus

"Everybody wants results, but not everybody wants to do what that takes." - Frank Slootman

Frank Slootman, CEO of SnowFlake, is an overnight success, twenty years in the making. Having served as CEO of Data Domain, then CEO of ServiceNow, Slootman is no stranger to leading software businesses in hyper growth mode. One hit wonders come and go, but Slootman has scaled 3 publicly traded companies to hundreds of millions in annual revenue. His matter-of-fact management style and extreme focus on what matters most stand out in his recent piece, "Amp It Up!".

Last week, we shared our thoughts on the advantages of a speedy culture in an organization. Slootman's focus on eliminating enterprise 'slack' puts a new spin on increasing efficiency and illustrates how he's been able to replicate his success as an executive at three different cloud-based software firms. Not every piece of advice will line up with your organization's ethos. But there's no denying Slootman's prowess at simply getting things done. His emphasis on picking the right incentives, picking up the pace, and focusing on what matters most has served as the recipe for dominant success multiple times. The advice is easily implemented, but not for everyone - or every employee.

Incentives

"Few things drive home a performance culture like the compensation philosophy. In our case, the company had to earn it first, so that the bonus pool could be funded. Each quarter we would fund the pool, depending how well we did that period. Then the process of allocation started. Managers were not allowed to 'peanut-butter' out the money with everybody getting the same share of the pool. We insisted on a bell shaped distribution. We did not always pay full bonuses and I would personally explain why in our quarterly all hands meetings."

"It is not that we worried about bonuses for substandard performers, but that we were under-bonusing our A players. And to pay A players more, managers had to take that money from the other end of the performance spectrum. It allowed us to be informed of who the strong performers were as well as those not in good standing. Each employee had a money conversation each quarter with their manager relating to performance. These were in lieu of written performance reviews. When it came time to separate with a person, it was a lot easier, cheaper and quicker when there was a below-average bonus history."

Slootman is adamant that a culture of high-performance requires a willingness to be honest about an employee's relative contribution to the team as well as a willingness to compensate them commensurately. As a leader, you tend to get what you incentivize.

Speed

"Going faster, maintaining higher standards and with a narrower aperture. Sounds simple? The question is how you go about amping up your organization. How much faster do you run? How much higher are your standards? How hard do you focus? It is a performance ‘triad’ because they amplify each other. The compound effect can be electrifying. Without leaders driving the tempo in an organization, it will naturally settle into a lethargic pace. If you have ever worked in or with government, you have seen extreme examples of this. There is no urgency about anything, other than quitting time. It’s suffocating being in such organizations, as if everybody is swimming in glue."

An organization will not accelerate itself without a leader's prompting - if this were possible, there would be no need for leadership! Lethargy naturally creeps in and leadership is required to inject energy into the organization for it to overcome this inertial tendency. The key to Slootman's approach is his combination of both the carrot (incentives) and the stick (set the pace and don't waiver).

Focus

"The fastest way to move a dial is narrow the focus. People naturally resist focus because they can’t decide what is important. Therein lies a problem: people can typically tell you after some deliberation what their top three priorities are, but they struggle to decide on just one. They may also be incorrect about their priorities, so there is potential for misallocation of resources. What is too much and what is too little focus? Do you ever even discuss this? Most teams are not focused enough. I rarely encountered a team that employed too narrow an aperture. It goes against our human grain. People like to boil oceans. Just knowing that can be to your advantage."

"At the company level and as a CEO, I worked to create blinding clarity and singularity of purpose. You lack focus at the top, it will be much more so at the bottom."

A carrot and stick approach doesn't carry an executive far without a crystal clear vision for the business. "Blinding clarity," "singularity of purpose" - these phrases sum up Slootman's adherance to an extreme form of focus. If employees can't explain their organization's purpose this simply, leadership isn't performing its most critical job - setting priorities. Slootman's success is repeatable, but not easy. The playbook is clear, but not always well-received. It just takes the right mix of people, incentives, and focus.

Amp it up! (Frank Slootman, CEO of Snowflake)

+ "Bottom line: There is room up in organizations to boost performance by amping up the pace and intensity. Considerable slack naturally exists in organizations to perform at much higher levels. The role of leadership is to convert that lingering potential into superlative results."

Amazon built one of the most efficient warehousing systems in the world by embracing chaos (Quartz)

+ "First, random storage makes finding the toothpaste faster in an era of on-demand efficiency. If there were a dedicated “toothpaste shelf” and someone ordered toothpaste, a “picker”—how Amazon refers to employees who gather items—would need to travel there, whether he were 10 feet or 100 yards away from that location. But if the warehouse stores toothpaste in 50 different locations, there’s a much better chance that there’s a tube close to some picker. There’s also a greater chance that the second item the customer ordered is also nearby."

Companies step up distribution automation under pandemic strains (Wall Street Journal)

+ "More than half of warehouse operators responding to a recent survey by Honeywell Intelligrated, Honeywell International Inc.’s warehouse automation business, said they were more willing to invest in automation as a result of the pandemic. E-commerce companies showed the biggest shift, with 66% saying they were more willing to do so, followed by food and beverage companies and logistics providers, at 59% and 55%, respectively."

A deep dive on Uber (MBI Deep Dives)

+ "American Automobile Association estimates the cost of owning and operating a car in the US is 75 cents/mile. If you are using a public transit, it costs 27 cents/mile. Uber trip costs $1.6/mile globally and costs close to ~$2/mile in the US, indicating just how much Uber needs to improve its cost structure to make it a viable alternative to car ownership."

The inside story of biotech's Barnum and his covid-19 cures (Fortune)

+ "And so one of the planet’s richest medical doctors, who made a $6.7 billion fortune developing breakthrough treatments for cancer and diabetes, seeks to battle the pandemic. The weapons in his arsenal: the cancer treatments he has spent the past decade and a half developing. He’s aiming them at all aspects of the coronavirus, from a vaccine to treatments for mild cases to therapies targeted toward patients on ventilators."

Disney to lay off 28,000 U.S. theme park workers and others as covid-19 takes its toll (Skift)

+ "Walt Disney Company will lay off roughly 28,000 U.S. employees in its theme parks division, the company said on Tuesday, as its resorts struggled with limited attendance and the continued closure of California’s Disneyland due to the coronavirus pandemic. About two-thirds of the laid-off employees are part-time workers, the company said in a statement."

The cheating scandal that ripped the poker world apart (Wired)

+ “The Plaintiffs have reason to believe the mechanisms through which these myriad acts of wire fraud were carried out by Mr. Postle, John Does 1–10 and Jane Does 1–10 involved Mr. Postle's cellular telephone being grasped by his left hand while concealed under the poker table and/or Mr. Postle's baseball cap being imbedded [sic] with a communications device creating an artificial bulge in its lining (that is notably absent in photographs of the same baseball cap on Mr. Postle when he is not playing on Stones Live Poker).”

Kelie Morgan 9/25/20 Kelie Morgan 9/25/20

The Weekly: Edition #64 - September 24th, 2020

Speed

Dave Girouard, CEO of personal finance startup UpStart, knows a thing or two about speed. He brought a sense of urgency to every meeting, every discussion, and every decision he made while at Google's Enterprise Apps division. This week, we highlight a piece he wrote on how a speedy culture can be part of your organization's competitive advantage and how to encourage that culture from the top down.

Speed in making decisions

"Too many people believe that speed is the enemy of quality. To an extent they’re right — you can’t force innovation and sometimes genius needs time and freedom to bloom. But in my experience, that’s the rare case. There’s not always a stark tradeoff between something done fast and done well. Don’t let you or your organization use that as a false shield or excuse to lose momentum. The moment you do, you lose your competitive advantage."

Speed doesn't have to come with a direct trade off to quality. The most important decisions often take time to make, but the vast majority of day-to-day decisions within an organization need not take more than 10 minutes:

"If, by way of habit, you consistently begin every decision-making process by considering how much time and effort that decision is worth, who needs to have input, and when you’ll have an answer, you'll have developed the first important muscle for speed. This isn’t to say all decisions should be made quickly. Some decisions are more complicated or critical than others. It might behoove you to wait for more information. Some decisions can’t be easily reversed or would be too damaging if you choose poorly. Most importantly, some decisions don’t need to be made immediately to maintain downstream velocity."

This type of operational culture is built from the top down by encouraging speed as a priority from the bottom up. Girouard offers clear advice for leaders who want to accomplish tasks and make decisions faster:

"Questions are your best weapon against inertia."

Speedy service or delivery of goods

"I’ve long believed that speed is the ultimate weapon in business. All else being equal, the fastest company in any market will win. Speed is a defining characteristic — if not the defining characteristic — of the leader in virtually every industry you look at."

While Girouard operates in the tech industry, the concept of speed is relative to your industry. In some industries, 8 seconds could be too slow and in others 8 weeks could be incredibly fast. But the bottom line is, as Jeff Bezos has aptly observed, customers are only going to desire faster service going forward. To ensure faster delivery of a product or faster service for customers, leadership must ensure team members are working in parallel (not in sequential order) on tasks and remove all possible dependencies:

"Just as important as assigning a deadline, you need to tease out any dependencies around an action item. This might be obvious, but mission critical items should be absolutely gang tackled by your team in order to accelerate all downstream activities. Things that can wait till later need to wait."

Speed is a choice for organizations and most importantly, for leadership. To use a rowing analogy, leadership serves as the coxswain and sets the cadence for the organization. If speed is expected from employees but not shown at the executive level, this type of hypocrisy leads to apathy and disdain at the bottom. Speed starts at the top.

Speed as a habit (David Girouard)

+ "Today at Upstart, we’re a much smaller company, and we’re making decisions that matter several times a day. We’re deeply driven by the belief that fast decisions are far better than slow ones and radically better than no decisions. From day to day, hour to hour, we think about how important each decision is and how much time it’s worth taking. There are decisions that deserve days of debate and analysis, but the vast majority aren’t worth more than 10 minutes."

Dura Software's playbook for managing small businesses and teams (Michael Girdley)

+ Michael Girdley is the founder of Dura Software, a company that purchases mission critical software companies and operates them under the Dura holding company. He has openly published his holding company's 'playbook' for leading teams, hiring, marketing, and more for anyone interested.

Bruised egos, gobs of money, and the bitter feud that took down Cellino & Barnes, New York’s absurdly ubiquitous accident law firm (Intelligencer)

+ "The fight revealed more than just financial dirty laundry and wounded feelings. It captured the birth and boom of what has become one of the most caricatured areas of the law — a pop-culture staple that often earns its reputation as ambulance chasing but also delivers on its promise as one of the most direct ways to bring justice, and fair compensation, to the least powerful members of society. It is a world that isn’t going away anytime soon, even if the men who elevated the New York car-crash lawsuit to a kind of high art have themselves joined the ranks of the injured."

Tracking the recovery (Tracktherecovery.org)

+ Raj Chetty at Harvard University has created a powerful database to track consumer spending, employment, and business activity by socioeconomic class and location.

To Save Its Monuments, Rome Seeks Corporate Sponsors (Bloomberg)

+ "Brands, Romans, countrymen, lend me your sponsorship! So goes the call to arms for the city of Rome, whose revered yet financially burdensome historic center faces a dire new threat: devastating budget cuts due to the coronavirus pandemic. The Italian capital has often sought out novel approaches to finance the monumental task of restoring and maintaining its sprawling stock of fountains, statues, historic palazzi and ancient archaeological sites. The city’s latest idea is a two-year deal with Confindustria, a national association of thousands of Italian companies, which will facilitate “acts of patronage and sponsorship” toward a list of sites and monuments in need of funds."

Candy or Covid? Some places are canceling Halloween amidst the ongoing pandemic (Bloomberg)

+ "In much the same way that the U.S. approach to reopening schools has been piecemeal, the vision for Halloween 2020 differs from city to city, with no guidance yet from the federal Centers for Disease Control and Prevention despite pressure from lawmakers. There is detailed guidance drafted, perhaps not so surprisingly, by the Hershey Co., which told the Wall Street Journal that the holiday makes up a tenth of its annual $8 billion revenue, and that trick-or-treating makes up about half of the company’s Halloween candy sales."

Are founders allowed to lie? (Alex Danco)

+ "You probably don’t call it “lying”, but founders have to will an unlikely future into existence. To build confidence in everyone around you – investors, customers, employees, partners – sometimes you have to paint a picture of how unstoppable you are, or how your duct tape and Mechanical Turk tech stack is scaling beautifully, or tell a few “pre-truths” about your progress. Hey, it will be true, we’re almost there, let’s just say it’s done, it will be soon enough. Here’s Byrne Hobart on Microsoft: Microsoft’s march to a $1.54tr market value started with the company selling a product it had not, in fact, built. Bill Gates and Paul Allen contacted computer manufacturer MITS to sell them a BASIC interpreter. They scheduled a demo, and built their interpreter. Or rather, first they built an emulator for the Altair (which they didn’t have) to run on Harvard’s computers (which they didn’t have permission to use) in order to write their interpreter (which Allen finished on the flight to the meeting). Subsequent success turned that from a lie to an endearing exaggeration, although Microsoft’s later successes gave the story a sinister cast once again."

The elusive peril of space junk (The New Yorker)

+ "Never before had the I.S.S. faced such a high probability of collision on such short notice. Moving the station was out of the question. Instantly, he relayed the news to Houston’s flight director, Ed Van Cise, and then rushed to Mission Control, where he joined a tense meeting to discuss the options. There was only one: instruct the crew to lock down the station—closing hatches between modules—and then shelter in the Soyuz capsule, a Russian vessel that can serve as a lifeboat. There were three people aboard the I.S.S.: one American, Scott Kelly, and two Russians, Gennady Padalka and Mikhail Kornienko. In the Soyuz, they could detach from the failing structure and return to Earth. In the station’s history, its crew had sheltered in the Soyuz only three other times."

Kelie Morgan 9/18/20 Kelie Morgan 9/18/20

The Weekly: Edition #63 - September 18th, 2020

Automation + Empowerment

In edition #46 of the Weekly, we shared a few thoughts on sourcing, hiring, and retaining talent, but this week we wanted to highlight a Harvard Business Review piece that explores how Amazon used automation to better utilize and empower the talent in their organization.

Automation and technological change carry both positive and negative impacts for certain jobs in more 'at risk' lines of work (e.g. service, retail, etc.), but at the end of the day, if organizations aren't leveraging the tools available to them, someone else in the industry will. Amazon has done a superb job at freeing up employees from repetitive tasks and allowing them to spend more time attacking problems of greater value and new initiatives within the company. There will always be an abundance of ideas for how to improve an organization, but often never enough capacity to chase them all.

It's important to approach automation from an employee empowerment perspective rather than headcount elimination standpoint. Companies that leverage technology to allow their employees to do more with less will win in the long run. Amazon's success can be reduced to relentlessly pushing the boundaries of what can be automated and empowering its employees to do more with less.

"The animating idea behind Hands off the Wheel originated at Amazon’s South Lake Union office towers, where the company began automating work in the mid-2010s under an initiative some called Project Yoda. At the time, employees in Amazon’s retail management division spent their days making deals and working out product promotions as well as determining what items to stock in its warehouses, in what quantities, and for what price. But with two decades’ worth of retail data at its disposal, Amazon’s leadership decided to use “the force” (machine learning) to handle the formulaic processes involved in keeping warehouses stocked. “When you have actions that can be predicted over and over again, you don’t need people doing them,” Neil Ackerman, an ex-Amazon general manager, told me."

Assuming growth is a priority for your organization, automation offers the means to empower talented employees to work on new initiatives and higher value work. Eliminating the jobs related to the automated work may make sense financially in the short-term, but over the long-run, eliminating human capital means shrinking capacity for growth iniatitives:

"Had Amazon eliminated those jobs, it would have made its flagship business more profitable but most likely would have caused itself to miss its next new businesses. Instead of automating to milk a single asset, it set out to build new ones. Consider Amazon Go, the company’s checkout-free convenience store. Go was founded, in part, by Dilip Kumar, an executive once in charge of the company’s pricing and promotions operations. While Kumar spent two years acting as a technical adviser to CEO Jeff Bezos, Amazon’s machine learning engineers began automating work in his old division, so he took a new lead role in a project aimed at eliminating the most annoying part of shopping in real life: checking out. Kumar helped dream up Go, which is now a pillar of Amazon’s broader strategy."

Thinking long-term about automation requires both the implementation of technological solutions as well as planning the strategic direction for your workforce post-automation.

"If Amazon is any indication, businesses that reassign employees after automating their work will thrive. Those that don’t risk falling behind. In shaky economic times, the need for cost-cutting could make it tempting to replace people with machines, but I’ll offer a word of warning: Think twice before doing that. It’s a message I wish I had shared with the banker."

Multichannel retail and Covid-19 research report (GlobalData)

+ "One of the reasons why retailers have been so innovative in developing multichannel services is because the retail industry is highly competitive with many companies actively competing for a slice of market share. Indeed, retail is one of the least concentrated industries in the United States, with the top 5 retailers only accounting for 19.9% of all revenue. Against this backdrop, no retailer can afford to be complacent because the price of contentment with the status quo ultimately leads to consumer abandonment and the loss of market share. History tells this tale many times over, with even iconic names such as Sears – once the largest retailer in the world – falling into difficulty because of a failure to compete effectively."

The new ‘blank check’ barons are coming for Wall Street (Bloomberg)

+ "This year, no fewer than 91 SPACs have raised more than $35 billion, approaching half the total raised by SPACs on U.S. exchanges in all previous years."

The billionaire who wanted to die broke, is now officially broke (Forbes)

+ "Charles “Chuck” Feeney, 89, who cofounded airport retailer Duty Free Shoppers with Robert Miller in 1960, amassed billions while living a life of monklike frugality. As a philanthropist, he pioneered the idea of Giving While Living—spending most of your fortune on big, hands-on charity bets instead of funding a foundation upon death. Since you can't take it with you—why not give it all away, have control of where it goes and see the results with your own eyes?"

Welcome to your bland new world of consumerism (Bloomberg)

+ "All startups seek to disrupt and disintermediate a smug status quo, or originate and dominate an entirely new niche. But what makes a brand a bland is duality: claiming simultaneously to be unique in product, groundbreaking in purpose, and singular in delivery, while slavishly obeying an identikit formula of business model, look and feel, and tone of voice. Despite hiding in plain sight (and plain recycled packaging), this “slight of bland” has won the wallets of a generation that considers itself above marketing, and created some of the buzziest companies of the age."

Why Americans really go to the gym (The Atlantic)

+ "In the past 70 years, physical activity in America has transformed from a necessity of daily life into an often-expensive leisure activity, retrofitted into the foundation of people’s identities. As a concept, fitness was a response to the flourishing, sidewalk-free postwar American suburbs and what the fitness pioneer Bonnie Prudden dubbed “the tyranny of the wheel”: Americans went from strollers to school buses to cars, stripping out much of the on-foot transportation that had long characterized life in cities or on farms. “In the ’50s and ’60s, the body became a problem, and exercise developed—it had to develop—because people realized that we were all going to die of heart attacks,” Shelly McKenzie, the author of Getting Physical: The Rise of Fitness Culture in America, told me."

How much bigger can digital fitness get? (The Hustle)

+ "There are 62m gym memberships in the US and 183m globally, according to a 2019 report. But many people shifted to online workouts during the pandemic, and gyms have been slow to reopen. Many notable gym brands have filed for bankruptcy in recent months, according to PETITION: Gold’s Gym, 24-Hour Fitness, SNFW Fitness (Steve Nash’s), Town Sports International (New York Sports Club). They posit that high-end Equinox could be next."

How Amazon automated work and put its people to better use (Harvard Business Review)

+ "For the past decade, Amazon has been pushing to automate office work under a program now known as Hands off the Wheel. The purpose was not to eliminate jobs but to automate tasks so that the company could reassign people to build new products — to do more with the people on staff, rather than doing the same with fewer people. The strategy appears to have paid off: At a time when it’s possible to start new businesses faster and cheaper than ever before, Hands off the Wheel has kept Amazon operating nimbly, propelled it ahead of its competitors, and shown that automating in order to fire can mean missing big opportunities. As companies look at how to integrate increasingly powerful AI capabilities into their businesses, they’d do well to consider this example."

Who invented the lightbulb? (Neurologica)

+ "The question of who should get credit for inventing the lightbulb is deceptively complex, and reveals several aspects of the history of science and technology worth revealing. Most people would probably answer the question – Thomas Edison. However, this is more than just overly simplistic. It is arguably wrong."

Kelie Morgan 9/11/20 Kelie Morgan 9/11/20

The Weekly: Edition #62 - September 11th, 2020

Leveraging Time

“It is not that we have too little time to do all the things we need to do, it is that we feel the need to do too many things in the time we have.” - Gary Keller, The One Thing

This week, we came across an interesting productivity guide written by Marc Andreessen back in 2007. There are the more radical pieces of advice such as "don't keep a calendar" and "don't answer your phone" that may work for some, but not others. Elon Musk runs 5 companies. He probably keeps a calendar. Warren Buffett owns hundreds of companies. His calendar is wide open. There are others such as the "3 most important items to do list" and "check email twice per day" that stuck out as more achievable.

While some of Andreessen's recommendations may be more applicable than others depending on your role and the nature of your work, the main principle behind the guide centers around controlling and focusing the use of your time.

Time is the only asset that everyone possesses equal amounts of, and yet, how we choose to spend those precious minutes can lead to vastly different outcomes. Each of us leverages our time in a positive or negative direction daily, and the effects of this leverage compound as momentum builds - for better or worse.

Picking up the phone every time it rings may not be the best solution if you are an executive looking to optimize for a state of flow while writing a major proposal or report, but it may be the best course of action if you are optimizing for bringing in new business.

Checking your email just twice per day may not be tenable if you're in an operations role, but may be a necessity for busy executives who need to carve out time to allow for strategic and creative thinking.

Keeping a clean calendar may not be possible for some executives in fields requiring large amounts of team coordination, but may be more than attainable for others in different fields requiring more solo work.

To increase personal productivity, leveraging your time may look different than Andreessen's recommendations, but there will always be a focus on doing less (urgent but unimportant tasks) to achieve more (strategic, important tasks). Gary Keller says it best in his book, The One Thing:

"Success demands singleness of purpose. You need to be doing fewer things for more effect instead of doing more things with side effects."

There are not hard and fast rules that work for everyone, but there are principles that remain timeless. Maximizing productivity boils down to having the discipline and wisdom of knowing when to say "no" to a task in order to allow your "yes" to remain open for more important work. What are you saying "yes" to today that needs to be a "no"?

Marc Andreessen's guide to productivity (a16z)

+ "Keep three and only three lists: a Todo List, a Watch List, and a Later List. The more into lists you are, the more important this is. Into the Todo List goes all the stuff you "must" do -- commitments, obligations, things that have to be done. A single list, possibly subcategorized by timeframe (today, this week, next week, next month). Into the Watch List goes all the stuff going on in your life that you have to follow up on, wait for someone else to get back to you on, remind yourself of in the future, or otherwise remember. Into the Later List goes everything else -- everything you might want to do or will do when you have time or wish you could do. If it doesn't go on one of those three lists, it goes away."

The economics of the Tour de France (The Hustle)

+ "Cycling’s most important race was born out of financial necessity. At the turn of the 20th century, a French newspaper called L’Auto was struggling to stay afloat. The paper’s staff was asked to come up with ways to increase circulation — and Géo Lefèvre, a 26-year-old sportswriter, suggested putting on the biggest cycling race the country had ever seen. Launched in 1903, the Tour de France was an immediate success. In its first year, the Tour nearly tripled L’Auto’s circulation from 25k to 65k newspapers per day — enough to kill off their main competitor, Le Vélo. Over the next 3 decades, this figure would see a 34x increase."

Shopify, suddenly worth $117 billion, is one of the biggest pandemic winners (Wall Street Journal)

+ "Millions of small businesses have had to adapt to a world where online sales abruptly jumped to levels that weren’t expected for years. U.S. e-commerce sales surged 37% to $200 billion in the second quarter, according to the Commerce Department. Shopify’s software lets merchants choose a theme to create an online storefront and mobile application. Merchants have to upload images and details on their products and organize their inventory. Shopify’s software processes payments and calculates shipping rates. Sellers typically ship items directly to buyers, but Shopify also offers fulfillment services where merchants can store and ship items."

Get ready for the great urban comeback (Derek Thompson)

+ "On October 11, 1871, as the city smoldered, the Chicago Tribune published an editorial with an all-caps headline: cheer up. The newspaper went on: “In the midst of a calamity without parallel in the world’s history, looking upon the ashes of thirty years’ accumulations, the people of this once beautiful city have resolved that chicago shall rise again.” And, with astonishing speed, it did. By 1875, tourists arriving in Chicago looking for evidence of the fire complained that there was little to see. Within 20 years, Chicago’s population tripled, to 1 million. And by the end of the century, the fire-flattened business district sprouted scores of buildings taller than you could find anywhere else in the world. Their unprecedented height earned these structures a new name: skyscraper."

The butcher's shop that lasted 300 years (Guardian)

+ "In some respects, Frank’s was like any number of small shops in Britain. It had once been essential to the local community, depended-on. And now it was marginal, perishing in plain sight as the people of Dronfield chose to buy their goods in one of a trio of supermarkets, or to have deliveries brought to them by van. Open at 9am sharp, Frank had waited until 11.30am for his first visitor of the day – and here I came, not with an empty shopping basket, but a reporter’s notebook. I’d read about his shop in the Yorkshire Evening Post, and about how Frank was refusing to shut, even as his strength declined and he struggled to keep the lights on. His was the last butcher’s shop in the middle of town. The last traditional shop on the main road. He was the last butcher in an ancient family of them, and he insisted that he wasn’t ready to hang up his white coat just yet."

Where remote work saves commuters most (UpWork)

+ "To understand the potential gains, it’s important to quantify the economic burden commuting currently places on Americans. In 2018, the average person spent 54.2 minutes commuting each day.2 This translates to 4.6 hours a week, 18.4 hours a month, and 9.5 full days a year commuting. And commutes are only getting longer; compared to 1980, the average daily commute has increased by almost 11 minutes a day, which translates to two full days a year."

How to run an impactful offsite retreat (First Round Review)

+ "If your offsite consists of several days of teams just presenting slide decks with a few breaks peppered in between, something’s failed along the way."

The inside story of the $8 million heist from the Carnegie Library (Smithsonian)

+ "In addition, the Oliver Room had Priore himself. His desk sat at a spot that commanded the room and the table where patrons worked. When a patron returned a book, he checked that it was still intact. Security for special collections simply does not get much better than that of the Oliver Room. In the spring of 2017, then, the library’s administration was surprised to find out that many of the room’s holdings were gone. It wasn’t just that a few items were missing. It was the most extensive theft from an American library in at least a century, the value of the stolen objects estimated to be $8 million."