News and insights from around the Web:
Startups
Here's how Big Tech is killing startups: "The best start-ups keep being scooped up by the big guys (see Instagram and WhatsApp, owned by Facebook). Those that escape face merciless, sometimes unfair competition (their innovations copied, their projects litigated against). And even when the start-ups succeed, the Five still win. Because today’s giants are nimbler and more paranoid about upstart competition than the tech behemoths of yore, they have cleverly created an ecosystem that enriches themselves even when they don’t think of the best ideas first. The Five run server clouds, app stores, ad networks and venture firms, altars to which the smaller guys must pay a sizable tax just for existing. For the Five, the start-up economy has turned into a heads-I-win-tails-you-lose proposition — they love start-ups, but in the same way that orcas love baby seals. There is perhaps no better example of this dynamic than what has happened to Snap, the company that makes the disappearing messaging app Snapchat. Although it is one of the most innovative consumer-focused internet companies — Snap created a whole new paradigm in social networking, and pioneered the idea that the camera is the future of human communication — it has been battered by the giants."
And a new report suggests that unicorns may not be worth what you think: "'These financial structures and their valuation implications can be confusing and are grossly misunderstood not just by outsiders, but even by sophisticated insiders,' Mr. Strebulaev and Mr. Gornall wrote in a report on their research, describing most private investments as a 'black box.' That black box increasingly has relevance not just to gossips in Silicon Valley, but also to public investors. Big mutual fund companies like T. Rowe Price and BlackRock have aggressively begun investing in unicorn companies in recent years on behalf of public investors — yes, you may own a stake in Uber and not even know it — helping to increase the valuations even further. And even the big public mutual funds, the researchers contend, are not properly valuing the assets: 'It is inappropriate to equate post-money valuations and fair values.'"
Human Resources
Many companies could do more to support employees with illnesses: "My suggestion was exactly that - lend a hand. In fact, many hands. There were so many (non-monetary) options available, it just took a little creativity. And, if executed properly, could benefit everyone in the company going forward. The executive level staff were asked if they would each donate a few thousand airline miles. To million milers, this was an easy ask. The sales team on the ground in Houston (where the little guy got his treatment) pooled their hotel points to make sure mama and son didn't have to pay for their weekly stays. They also made sure that each time they checked in, a new gift bag awaited them with snacks, new movies and magazines for both. Every department checked in and provided meals for dad while they were out of town and was working additional shifts; dog walking, lawn mowing and even flower bed pruning."
California wineries wonder where they will find employees once the fires move on: "The wine industry and the lodging, restaurant and construction sectors that help make this bucolic region a draw for millions of visitors each year are now bracing for a different crisis: the potential loss of many members of their immigrant work force. Some 5,700 houses and structures have been destroyed and many more damaged by the blazes that barreled through Northern California last week. About 100,000 people were displaced, temporarily or permanently. It is still too early to know how many of them were immigrants, who are in the most precarious position of any group. Because many of them are in the country illegally, they are ineligible for most disaster aid, raising concerns that those without places to live will move to other regions where housing is more plentiful and cheaper. 'To function, we have to be able to retain the immigrant workers in the area,” said Cameron Mauritson, who grows grapes on 350 acres in Sonoma County for 60 wineries. Losing them, he said, would be “catastrophic to our economy.'"
Disruption
Facebook is experimenting with helping users order food: "Of course Facebook doesn’t actually want to get into food delivery, a notoriously messy and complicated business that requires hiring and managing a lot of people, but food ordering. Whether Facebook is actually accomplishing any of its stated goals to simplify the process is less clear. To order food on Facebook, you still have to decide what you want to eat, and then you also still have to sift through a bunch of options and services to order it. ... the main benefit of this service seems not to be in simplifying things for the user but for keeping people ever longer on Facebook."
Taxpayers have helped fund Amazon's disruption of the economy: "Americans have supported the Bezos surge in two distinct ways: by buying everything from dog food to diamonds on Amazon.com and by kicking in at least $1.24 billion in taxpayer-funded subsidies and incentives that have fueled the company’s growth across the country. That figure does not include hundreds-of-millions of dollars in additional breaks from deals to phase in state sales taxes, nor does it include dozens of hard-to-quantify tax abatements and land arrangements struck with a mosaic of towns, counties and school districts along the way. Those subsidies, aggregated in a Business Journals analysis of public records and financial filings from across the United States, have helped support the expansion of Amazon’s sprawling network of more than 257 sorting and distribution centers, a 141 million-square-foot portfolio of facilities that house hundreds-of-thousands of workers in 33 states. The company has millions more square feet in Class A office space as well as a rapidly expanding portfolio of data centers managed by Amazon Web Services Inc., arguably its fastest-growing division and a beneficiary of more than $229 million in known taxpayer subsidies."
By focusing on the outer boroughs, which taxis have long disdained, Uber has surpassed taxis in New York City: "Uber has deployed thousands of black cars across Manhattan, going bumper-to-bumper with yellow taxis for passengers and fares in lucrative commercial and tourist areas. But the ride-hail app has increasingly shifted its focus to the city’s other four boroughs, where frustration over subway overcrowding and delays and fewer taxi options have made it the ride of choice for many. As a result, Uber is booming in the other boroughs, with half of all Uber rides now starting outside Manhattan — up from one-fourth just two years ago — not including pickups at the city’s two airports in Queens. The growth has been so explosive that it has helped produce a milestone moment — for the first time, more people are using Uber in New York than the city’s fabled yellow cabs. In July, Uber recorded an average of 289,000 rides each day compared with 277,000 taxi trips."
Marketing
People actually pay Menlo Innovations to observe how it creates software: "We don’t send emails to each other. You either walk over and talk to somebody or literally yell their name out. To make that easier we got rid of all the cubicles and offices. We have conference rooms for our clients because they’re not used to the noise. We use the simplest tools possible. Project management is done on index cards tacked to the wall. To report on a project’s status, you walk to the wall and put up a sticky. The most radical thing we do is work in pairs. Two people are assigned the same task at the same time and work at one computer. Everyone working on the same project sits at the same table."
Small Business
A baker in Ferguson, Missouri, has benefited from Starbucks' "opportunity store" program: "Natalie DuBose, owner of Natalie’s Cakes and More in Ferguson, Missouri, was working out of a 700-square-foot kitchen with one oven, two hand mixers and a 6-foot foldable table when Starbucks came knocking in 2015. That year, she began supplying a Ferguson outlet of the coffee chain giant with her baked goods. Now, DuBose supplies over 30 Starbucks stores with her signature caramel cake, which is also in several universities, seven grocery stores and eight gas stations in the St. Louis region. She’s doubled her kitchen space and added two ovens — and no longer uses hand mixers."
Social Media
Can businesses punish employees for what they say on social media? "Last Sunday, Jerry Jones, the owner of the Dallas Cowboys, said he would bench players who did not stand during the national anthem. This threat was publicized nationally and applauded on Twitter by President Trump, who summarized the two men’s shared view: 'Stand for Anthem or sit for game!' ... Whatever the Constitution has to say about the matter, however, it is manifestly clear that Jones’s threat violates federal labor law. Benching, or otherwise disciplining, players who engage in anthem protests would be illegal. The National Labor Relation Act forbids employers from taking adverse employment actions against workers who are engaged in 'concerted activity for mutual aid or protection.'"
Retail
Long known as America's test market, Columbus, Ohio, is where desperate retailers are trying new strategies to lure customers back into physical stores: "For shoppers, this city of 860,000 smack in the middle of a swing state, can feel like an alternate reality, a place where up is down and down is up. Frumpy department stores feature personal shopping services and boutique wellness amenities. Workaday grocery stores like Kroger offer exotic fruits and freshly baked artisan breads. Even the fast-food business is living in the future. McDonald’s is offering table service from friendly waiters. Robots are taking orders at Wendy’s. Chipotle started a chain that serves hamburgers. That kind of experimentation has long been a feature of the Columbus shopping scene, but these days it stems as much from desperation as from innovation. The physical retail market, crumbling in the face of competition from e-commerce sites, is in the midst of a transformation as fundamental as the one that shifted consumers to suburban shopping malls — and away from Main Street — half a century ago."
Also in Columbus, they turned a dying mall into a park that's saving downtown: "Capitol South, a nonprofit development corporation created by the city, took over the property and started looking at redevelopment plans. The group considered turning the mall into an office building or a medical-research center. 'Each one of the plans that we looked at either financially didn't pencil out, or from a constructability point of view, it simply couldn't be done,' said Guy Worley, CEO of Capitol South. Instead, Capitol South decided to knock down the mall and build a park. The group was inspired by similar projects, like Bryant Park in New York City — a 9.6-acre green space next to the New York Public Library. The park had become a dead zone, known for drug deals and prostitution, until a local group fixed it up in the 1980s, adding a café and entertainment. The revitalization effort boosted rents nearby."
"Little boxes" are succeeding in rural America, where big boxes failed: "Tharp did what he could to turn things around, putting out calls to urge a grocer, or any retailer, to move into the vacant building. He found no takers for a year, until at last, Dollar General Corp., which had operated a smaller store on the outskirts of Decatur’s downtown since 2001, agreed to relocate to Main Street—and start offering fresh meat, fruit, and vegetables. The Decatur store is one of 1,000 Dollar Generals opening this year as part of the $22 billion chain’s plan to expand rapidly in poor, rural communities where it has come to represent not decline but economic resurgence, or at least survival. The company’s aggressively plain yellow-and-black logo is becoming the small-town corollary to Starbucks Corp.’s two-tailed green mermaid. (Although you can spot her on canned iced coffee at Dollar General, too.) Already, there are 14,000 one-story cinder block Dollar Generals in the U.S.—outnumbering by a few hundred the coffee chain’s domestic footprint. Fold in the second-biggest dollar chain, Dollar Tree, and the number of stores, 27,465, exceeds the 22,375 outlets of CVS, Rite Aid, and Walgreens combined. And the little-box player is fully expecting to turn profits where even narrow-margin colossus Walmart failed."
Legal Marijuana
Among the things burning in California is the state's marijuana crop: "Hezekiah Allen, the executive director of the California Growers Association, said Thursday that at least seven farms had been destroyed, and that he expected the number to 'increase significantly' as people returned to their homes. Tens of thousands of cannabis growers live in Northern California. The owners of the seven farms include small-scale growers who put their life savings into their farms over the past year, he said. None of them have insurance, he said. 'They leveraged themselves entirely,' Mr. Allen said. 'It’s going to hit some families really hard.'"
Technology
It's not that easy to fire a voice assistant: "If I want to switch assistants down the line, sure, I can just go out and buy another device. But that investment of time and personal data isn’t so easy to replace. Putting all that energy into the Google Assistant—whether actively, by setting presets and training the program, or passively, by letting it observe my behavior—meant I wasn’t putting it into Amazon’s Alexa or Apple’s Siri. You can switch hardware, but you can’t just say, 'Hey, Google! Tell Alexa everything you know about me.' So here we go again. Windows or Mac? iPhone or Android? Alexa or Siri or Google? The march of tech keeps presenting us with these dilemmas. When an innovation is fresh, the decisions we make haphazardly end up governing market share for decades. Companies actively encourage this early selection with the same game plan: Get us to choose early, before it’s entirely clear which option is the best (or best for us), and then make it inconvenient for us to switch."
Taxes
Here's what happened when Kansas tried a tax plan similar to Trump's: "With the state hemorrhaging government revenue, Kansas lawmakers rolled back the tax law this year, but congressional Republicans and President Trump are trying to take the experiment with pass-through preferences national, beyond Wichita and Topeka to cities with residents who measure incomes in seven, eight or nine figures. The Republican tax rewrite unveiled this month aims to jump-start economic growth in part by establishing a 25 percent tax rate on small businesses and other firms that operate as pass-through entities, a cut from the top rate of 39.6 percent that such business owners pay now. But the abandoned experiment in Kansas points to how a carve-out intended to help raise growth and create jobs instead created an incentive for residents, particularly high earners, to avoid paying state income taxes by changing how they got paid."
