There aren’t many ads that people actively seek out and share with their friends, but Dollar Shave Club’s launch video is certainly one of them.
Starring founder and CEO Michael Dubin, the 2012 viral video has over 23 million views, and it set the tone for the Dollar Shave Club brand in the years to come: simple, funny, and unorthodox. Along with its irreverent marketing, the brands direct-to-consumer subscription model, and simple, inexpensive razors made it an instant hit in the men’s grooming space. Everyone rooted for Dubin and DSC, the scrappy startup going head-to-head against Big Razor.
I used to say that I wasn’t political, simply because it’s so hard to find a human representative in politics “worthy” of my respect, time and effort. I mean, most career politicians are plastic, inauthentic automatons whose sole critical missions are to get elected again and again. I couldn’t relate to any of them in my lifetime. Then Obama came along and Gavin Newsom and of course Trump. With Obama and Gavin, I found real people, politicians I could rally around, who authentically and emotionally care about the issues that I too think are the most vital, not because caring would get them elected but rather because they believed it was right.
I was inspired to write this short post by two articles published this week showcasing the dangers of taking the “I’m not political” stance. Trump’s Apprentice Outtakes by Nick Bilton and on The Miss Universe Tapes Coverup by Yashar. I am over-simplifying, but the principals at the media companies that controlled these tapes chose not to take stances (mostly for money) and in doing so influenced the election by their collective inaction. How much influence is unclear, since we know Trump’s behavior would have already destroyed almost any other candidate.
I try to be an open person, especially with all of you, but you might not know this about me. When we started Bloomberg Beta, I had strong feelings about becoming a VC — vaguely gross feelings. There were a (vanishingly) small number of VCs I adored. The rest I thought were, as my daughter would say, blergh.
We are living in an entrepreneurial renaissance. Every day, thousands of creative business people bring new solutions to market, addressing an ever expanding set of problems and opportunities. Incumbent businesses can either view these insurgents as competitive threats, or they can view entrepreneurs as outsourced R&D.
But outsourcing R&D only works as a corporate strategy if an incumbent company can truly recapture that innovation. Very few BigCos are really good at finding nimble ways to recapture innovation. Those that fail will be left to fend off a whole host of new competitors. Here are a few ways to integrate corporate R&D and the startup ecosystem:
Bruce Aust is Vice Chair of Nasdaq, one of the largest financial services firms in the world, best known for its tech-laden, US-based marketplace. But what many don’t realize is that Nasdaq provides the platform for 70 markets around the world, and has an extensive corporate services business as well. The firm recently stood up a non profit, the Nasdaq Entrepreneurial Center, which celebrated its first anniversary just one week ago.
Aust, who ran much of Nasdaq’s operations over the past 15 plus years, recently moved to California to oversee the Center and to be closer to his company’s West coast clients. The Center, which is our partner in producing the Shift Dialogs, has provided free education and mentoring programs to more than 3000 entrepreneurs in its first year. Below is a transcript of my conversation with Aust, as well as the video, both edited for length and clarity.
Deborah Hopkins has operated at the highest levels of corporate America for decades, holding senior roles at GM, Lucent, and Boeing, where she served as CFO. She is now Chief Innovation Officer of Citi and founder and CEO of Citi Ventures, a five-year old firm that has a unique approach to investing and an equally unique role in helping its 200-year-old parent company learn how to innovate in today’s startup-drenched landscape.
Many corporate venture firms maintain an arms-length distance from corporate headquarters, but not Citi Ventures. Not only does it focus its investments on startups that add value to Citi’s core business, but it is also responsible for driving new business practices into the company, through a network of growth boards, innovation labs, and the soft power of deep relationships nurtured over decades.
Just one business day after I wrote Can Purpose Be Acquired?, which keyed off Unilever’s purchase of Dollar Shave Club and its possible acquisition of The Honest Company, another shoe dropped: Unilever acquired Seventh Generation, for a reported $700mm. But a funny thing was missed in nearly all the business reporting around the deal: Like Ben & Jerry’s before it, Seventh Generation negotiated an unusual clause in its deal that insured Unilever would maintain and protect Seventh Generation’s core mission and purpose.
It’s not like either party was hiding the fact: Seventh Generation’s CEO posted a note about the arrangement, and the company confirmed the details of the deal to me the day it was announced. But for the most part, coverage of the deal focused on how the acquisition positions Unilever to compete with its nemesis P&G in various product categories, or how Unilever has “gone green.”
This past week brought blockbuster news on the M&A front — Unilever, fresh from relieving Dollar Shave Club of its investors, is in preliminary talks to buy The Honest Co., for all intents and purposes turning Paul Polman into the new patron saint of the LA startup scene.
Unilever gets serious about Honest Company. With the help of its celeb co-founder, Jessica Alba, Honest Company sells green household goods and beauty products. Now it may be about to sell itself. According to The Wall Street Journal, the firm is in “early stage” talks to be acquired by Unilever for more than $1 billion — a big price tag but not as high as Honest’s last investment round, which valued it at $1.7 billion. Last month Unilever paid a similar price for the male-focused Dollar Shave Club; now it’s going after women. Honest has had its woes — including reports that its ostensibly green laundry detergent contained an ingredient it had promised to exclude. However the deal plays out, it’s another sign that BigCos are hunting around for smaller rivals that can fill holes in their product lines and services — and appeal to younger consumers who just don’t feel the love for impersonal conglomerates.
Do idle hands need work or play? In the glorious future that John Maynard Keynes and other economists envisioned nearly a century ago, advances in productivity would make it possible for hard-working strivers to slack off a bit while staying well-off. But it hasn’t turned out that way, writes Derek Thompson (The Atlantic). Instead, well-educated, professionals are working harder than ever, and surplus leisure time is accumulating among degree-less have-nots instead. These unemployed masses turn out to be more contented than you might expect, thanks to the entertainment surplus tech has built for us — chiefly in the form of videogames. There’s a touch of Huxley’s Brave New World in Thompson’s portrait of the hedonistic underside of our employment landscape: Should we be relieved that at least there’s something enjoyable for people to do — or outraged that there’s no alternative? Over in The New York Times, you can read a more narrow-eyed take by Michael Lind: We’re never going to get back “good old jobs” with high pay, stable futures and great benefits, Lind maintains. And the government already does a lot more to help underpaid workers, via tax credits and hidden subsidies, than it admits or we realize. So maybe we should just be honest about the less-employed future, and make it possible for all of us “to have good lives, even if [we] can’t all have good jobs.” (With at least some time for videogames, too.)
A new comic tilt on climate numbers. Concerned experts and activists have been struggling for years now to find new ways to explain the urgent but elusive nature of the climate-change threat. Because the data is complex and the effects are measured in small degrees over long terms, this is not an easy problem. But Randall Munroe, the resident nerd-genius behind the XKCD web comic, has found one brilliant solution: A long scrolling chart, like a timeline doing a headstand, that tracks millennia of human history against trends of cooling and warming (XKCD). Munroe keeps you amused with historical tidbits and gags as you scroll down; then he wallops you when the graph reaches the present and takes off on a frightening tangent, illustrating just how far off the charts we’re headed. Come for the stick figure jokes and stay for the angst.
The fall of the house of Rothenberg. Rothenberg Ventures, with about $50 million in its portfolio, wasn’t a huge Silicon Valley venture fund. But it had great connections, threw extravagant parties, touted a “culture of awesome,” and led a high-profile charge into the virtual reality industry (Backchannel). So it was a mini-earthquake in venture-land when Mike Rothenberg laid off nearly all of his employees in August. Now his firm is operating under a new name and faces an uncertain future. The first lesson here shouldn’t be a surprise: The VC business is super risky — that’s its whole point! But Rothenberg’s downfall also involves some very specific failures of transparency and accountability that Backchannel lays out: Rothenberg was apparently funneling the fund’s cash into his own VR-content startup without keeping his limited-partner investors informed. The big trouble with Rothenberg might have been its initial strategic error in taking a fat upfront management fee rather than the more typical small annual percentage, giving the firm an initial cash boost but robbing it of recurring revenue. Or maybe it was that Rothenberg, as some complained, “went Hollywood” and lost his way. However you read it, the Rothenberg saga makes for an important cautionary tale for a VC industry that’s too often eager to win when it should be shrewd, and star-struck when it should be skeptical.