Pivoting to Pot
Has disruption come to the legal marijuana business already? Bloomberg reports how existing startups are pivoting to target inefficiencies in the legal pot industry (Bloomberg). It’s a time of dueling legalities, with more and more states marching toward legalization, while federal laws remain unchanged. Larger VC funds are joining in, and companies like Transcend Lighting, which makes energy-efficient LED lights, have become crucial suppliers to pot growers, even though that’s not why they originally developed their products. This is a decisively NewCo opportunity: new markets creating unexpected opportunities for existing innovations. Still, these pivoters are going to have more and more company from pure-plays: Canopy Boulder, a Boulder NewCo, is a cannabis accelerator that has seen 29 startups through its program over the past two years. As markets grow, so do opportunities — and competition.
Apple Drives Into China
Apple has been trying to find its way into a Chinese market that has different attitudes toward intellectual property than it’s used to. And now it’s trying a new approach: buying in and currying favor that way. It’s making a $1 billion investment (USA Today) in Didi Chuxing, the ride-hailing service that’s currently trouncing Uber in China. A billion dollars will mean a lot to Didi Chuxing, which is having PR issues that make it harder to raise money, but it won’t significantly lighten the wallet of Apple, which sits on more than $200 billion in cash. The deal opens plenty of opportunities for Apple to catch up quickly in a tough market: access to key data, a dominant channel for Apple Pay, and a powerful local ally in its proxy war with Google (not to mention Uber). There are many moving parts and plenty more to be revealed (The Information says Uber’s CEO was supposed to meet with Apple officials this week “to talk about future partnership opportunities”). For now, the investment is a clever way to address a difficult, complicated problem. It’s amazing what a billion dollars can do.
A Facebook Misstep Under a Microscope
Money doesn’t solve everything, though. It’s easy to believe that today’s corporate giants can do pretty much whatever they want; this Guardian deep dive into how Facebook blew it in India serves as a useful corrective. The company’s Internet.org initiative was intended to help many millions of poor Indians online, but Facebook’s approach felt like digital colonialism to many. It also stepped unknowingly into an existing net neutrality argument. This report takes the reader from Mark Zuckerberg’s celebrity arrival to a poor village in “a bright orange helicopter” through Facebook’s first heavy-handed and then increasingly desperate behind-the-scenes efforts to convince Indian officials that it was there to do good, to the country’s refusal of the “gift” Zuckerberg thought he was offering them. This vivid story echoes the one told in Schooled, a New Yorker report that chronicles Zuckerberg’s well-meaning but flawed attempt to use his largesse to turn around the public education system in Newark, N.J. Facebook may be one of the largest and most important businesses on the planet, but even an institution of its heft has to contend with entrenched incumbents and local interests it doesn’t necessarily understand.
What Shareholders Really Value
One of the oldest arguments against businesses “going green” is that it’s not what shareholders want. A big new study from the Boston Consulting Group and MIT Sloan Management Review suggests that investors care more about sustainability than you think. As evidence mounts that the ways companies manage sustainability are material to their financial success over time, executive perceptions of what investors want are increasingly out of date. More than 60% of them say that they believe that solid sustainability performance reduces a company’s risks, and nearly half say they won’t invest in a company with a poor sustainability record. The most forward-looking finding? Although investors consider a sustainability strategy important, few companies have developed one. In some cases, investors may be more open to change than company executives.
Where’s the Middle Class?
“Middle class” is one of the most slippery economic terms: surveys reveal that most Americans, even those clearly in the lower or upper economic classes, believe themselves to be in the middle class. (The official definition, by the way, is overall income for a three-person household between $41K and $124K.) So this new infographic from the Pew Research Center is particularly potent: it shows how many people of each major class live in 50 metropolitan areas across the U.S. On average, roughly half of all adults fit the criterion for middle class, although they range from 67% in Wausau, WI, to 42% in Monroe, LA. Give yourself some time; this is an infographic you can get lost in even if the most vivid cumulative takeaway is that the middle class is shrinking over time.
But Do They Have Resident Advisors?
If you’re a millennial, recently graduated from college, living in a big city, you may have a real job but it may still feel like you’re living in a dorm (New Yorker), thanks to the new generation of co-living startups like Common and WeWork’s WeLive. The lives of residents are what you’d expect — “We come home from work and watch Broad City and TED videos” — but what’s most fascinating is how these companies and their tenants have confronted one slice of the housing problem in desirable cities with a not-ideal-but-good-enough solution that seems to create genuine community.
Down With Strategy
In a smart, cogent rant, Quartz top dog Kevin Delaney argues no one should have the word “strategy” in their job title. His position is that doing so separates strategy from execution; it creates an organization in which thinking about problems and opportunities is separated from addressing them. No business, especially a NewCo, can thrive with that approach. Shouldn’t everyone in an organization strive to think strategically?
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