business news in context, analysis with attitude

Regarding Unilever's $1 billion acquisition of Dollar Shave Club, one MNB user wrote:

Create a $1B company in four years? Well done!  Let's over-simplify....

Couple of guys get fed up with expensive razors; decide to go direct. 

Start up operation; retail contract packers.  Buy good blades.  Sell direct to customer.  Borrow more money; buy factory.

Create a customer list of 3 million with $156M annual sales in four years.  Build company of 200 people.  Sell out for $1B ... 6x sales revenue.  Oh, did I mention.... while you're at it, beat P&G as they try to copy the formula.

The VC guys take $400M.  Employees 20% or $200 million ... avg $1M each.  Founders split $400M.

Beat the Cincinnati based MBA's at their own game.  How?  Rule 1: Get there first. Rule 2: Provide better value.

Smart financial types ask: "Why couldn't P&G do it better?"  Margin targets too high (prices too high) and they became second (maybe third) in a crowded field. 

What are the learnings?

Run same playbook  in other categories ... be first.  Be best value.  Few people who understand hard work. Pay employees for their hard work (e.g. execution).

Which other categories ... Consumption based categories will likely earn similar multiple.  Alcohol? Eventually the state-driven shipping restrictions will fall... 

Another example of why physical retail has the same future as Woolworths (USA - no insult to other Woolworth brands internationally which are more visionary).

To quote Jimmy Malone from The Untouchables, "Here endeth the lesson."

One MNB user had some thoughts about Walmart's slowly expanding Marketplace business:

I am a huge fan of Amazon, but I hope as Walmart both expands its’ marketplace and works to improve the online experience for customers, it doesn’t cut corners and hurt brand imaging.

Walmart has a ton of ground to cover to catch up or be considered a legitimate online threat to Amazon. I think the steps in the right direction are being taken though.

With that said, Amazon is currently facing an issue with its’ marketplace being home to a lot of counterfeit products. These sellers are damaging the business, and sometimes the reputation, of other sellers including many US based small businesses.

Not that I am opposed to copycat products. I have been purchasing things like this on eBay since the early 2000s, but at some point, you need to have someone manage this and make sure there are not counterfeit items being sold with the intention of misleading the consumer into thinking these are from the brand manufacturer. If I buy a knock off product, I want to buy it knowing it is a knock off and the risks associated as opposed to being deceived – whether intentionally or not – into thinking I am just getting a great deal on the brand product.

Writing about the See Jane Go alternative to Uber and Lyft, providing women with women drivers with whom they'd feel safer, an idea that one MNB reader said could be a slippery slope toward discrimination, one MNB user wrote:

I think See Jane Go is a great idea.  It’s something women are taught beginning at childhood.  Don’t get into cars with strange men.

I know several women who won’t use Uber for that very reason.  I haven’t had any problems when traveling alone, but will confess to a sense of relief when I have a woman driver at night.

As for the other items mentioned, avoiding gays or blacks or whatever, I’m sure that happens now.  Some people remain afraid of the world and just search for ways to articulate it.

Another MNB user also took issue with the reader who was critical:

Women have to take precautions and avoid risky situations. It’s interesting that women too often are essentially blamed when they get attacked - “Why did you go jogging alone?” Why did you drink so much?” "Why did you let him into your home?” … but when we are careful, we’re accused of being overly sensitive. Can’t win. …

And from another MNB user:

I’m happy for the reader that he/she can take this point of view.  It indicates to me that this person probably hasn’t ever been threatened or attacked or had someone close to him/her that has been.  As a woman who has been threatened with rape and who has traveled alone, I believe we need to look at this from a different point of view.  It’s not necessarily the bias women have against men that has women avoiding getting into a car with a male stranger, but rather a bias that some men have against women.  Unfortunately, there are a few men who feel that they have a right to prey upon woman.  While this is a minority of men, it’s enough to make life terrifying for too many women.  I don’t have the statistics, but I think readers will find victims are more common than society wants to admit.  Do I have a bias against lone, strange men?  Yes, I do.  But the answer is not as simple as tallying it up to bigotry and saying, “don’t be a bigot.”  It is a real safety issue.  See Jane Go can be a real comfort for those of us who have to travel alone and can’t forget the nightmare.

MNB yesterday took note of a Fortune report that "there is a petition circulating on the Internet - with close to 11,000 signatures on it to this point - asking Starbucks to terminate all store leases on properties owned by Donald Trump, the Republican presidential candidate. The signers are people who say they disagree with comments made by Trump 'about various groups of people, including Mexicans, Muslims, and women'."

The Fortune story went on to say that "supporters of the cause pledged to buy a gift card from Starbucks if they terminate their lease at Trump Tower. So far nearly 2,000 people have pledged close to $70,000."

I commented:

To me, this reflects the level of connection that many Starbucks customers feel with the chain; at some level, they think it reflects their values, and so they expect it to extend to issues like this one. That isn't something that customers feel about all such businesses, and Starbucks should treasure these feelings, even if it decides to ignore them. (Which it probably will.)

One MNB user wrote:

I would pledge to buy a Starbucks card if the stores remain.  In fact, I would do it time and time again!  There is a silent majority of Starbucks shoppers who support the view of strengthening this country and its businesses (no matter how small or large) through legal ways of hard work and dedication, and these are also the values that Starbucks is built on.

From another reader:

I think they should terminate all the leases. It will make Trump even more money after they pay the fees associated with breaking a lease and then the increase coming with a new tenant. Makes me want to hang out in a Starbucks with my Make America Great Again hat.

I'm not sure about the lease thing. Trump currently is suing a chef in Washington, DC, who pulled out of a deal to have a restaurant in his new hotel there, saying that Trump's comments about immigrants would hurt his image and brand equity. I have no idea how the case will turn out, but there's at least the possibility that Trump could lose. (We know he won't settle the case. He says he never settles.)

MNB reader Thomas Zatkulak wrote:

Really, an online letter petition that cannot be validated that these are the actual feelings and beliefs of Starbuck’s customer is a story? And your comments that Starbucks should take this into consideration? Businesses should define who they are not an on line petition. This is why some businesses lose their focus, they read and try to manage their corporate message based on articles with an agenda. Move on to a real story. My response would have been the same if this was a petition supporting Trump.

Well, yeah. It is a story. A pretty interesting one, I think.

But for the record, I don't think I said that Starbucks should do what the petitioners are suggesting. Just that the petition reflects a certain kind of enviable brand resonance.

To be clear, I think that Starbucks should probably put out a statement saying that Conservatives and Republicans drink as much coffee as Liberals and Democrats, and that the country would be in better shape if all these folks would drink Starbucks coffee together and talk about the things they have in common, rather than arguing about the things that divide them.

At least, that's what I'd do.
KC's View: