Sunscreen and makeup: a game of compromise, imperfection, skin damage and expensive products. 23-year-old Sophia Hutchins, who calls Caitlyn Jenner her “cheerleader,” aims to win that game with Lumasol, the FDA-approved odorless SPF 50+ sunscreen mist engineered to be applied after makeup. With a $3 million seed round from Peter Thiel’s Founders Fund and Greycroft Ventures, she’ll be able to expand her team of 30 employees and bring the product to market in early 2020.
“It’s SPF millennialized,” says Hutchins, surrounded by her three-person media team and director of operations in the Jersey City, New Jersey Forbes office. “We are a health and tech company and [sun protection] is an extraordinarily unaddressed health issue that we’re trying to attack.”
Hutchins, who lives in LA, is a first-time founder but no stranger to cosmetic titans. As a close friend of Caitlyn Jenner, Hutchins witnessed the Olympian-turned activist/socialite’s battle with skin cancer in 2018. And because of her closeness with Caitlyn Jenner, she spends significant time learning from Kylie Jenner and Kim Kardashian, who have built billion-dollar makeup brands Kylie Cosmetics and KKW Beauty from Instagram.
“I have a really good relationship with all of them,” says Hutchins. “What Kylie [Jenner’s] done is amazing. I admire that she’s been able to convert fans, likes and shares into buys—and she works nonstop.”
Hutchins transitioned to a woman as a freshman at Pepperdine University and graduated from the University in 2018 with a degree in economics, with the intention of going into investment banking rather than entrepreneurship. During her senior year, she lamented with her friend, the daughter of Kiehl’s founder, about the impossibility of flawless makeup and sun protection.
From that conversation, she was advised by Nick Drake, CMO of T-Mobile and worked with big three consulting firm to develop a sunscreen product for makeup wearers. Lumasol was born, and with her board of scientific advisors from UCSF, the U.S.-manufactured product was approved by the FDA as an over-the-counter product. The recyclable product will protect from 98% of UV and UB rays and will be sold direct-to-consumer via subscription, according to Hutchins.
“You could compare it to Dollar Shave Club or Harry’s,” says Hutchins. “I know this business is going to be a success.”
For Ian Sigalow, founder of Greycroft Ventures, who has previously led the firm’s investments in Venmo, Braintree and Shipt, he saw the potential for the product from the hundreds of dollars his family of five spends on goopy sunscreen every single year. “There’s an opportunity to do what Juul did for the cigarette category by changing the delivery mechanism and changing the formula somewhat to win really big market share,” says Sigalow, noting that the design firm behind Juul also designed Lumasol, as a conscious effort habituate healthy habits after doing the opposite with the e-cigarette giant.
Lumasol will not be the only ‘mastige’ post-makeup sunscreen spray on the market. Semi-premium sunscreen brand Supergoop retails a SPF 50 setting spray product at $12 per ounce. Coola, Kate Sommerville, Shisheido and Ulta Beauty, among others, offer makeup setting sprays with SPF.
So what compelled Founders Fund send Hutchins a term sheet within an hour of her pitch presentation? “Founders Fund invests in founders, first and foremost. Sophia [Hutchins] was such an incredibly strong person when she came in and pitched us on her vision.” says Cyan Bannister, the partner at Founders Fund who led the round. “She’s identified an underserved market and a product that people would want. The fact is that she can leverage her connections to power the distribution behind the product.”
Lumasol’s packaging is also a huge draw for the investors. The bottle changes color when exposed to UV and UB rays, letting its owner know it’s time for another spritz, and habituating reapplication. Additionally, the product’s design and functionality make it highly ‘grammable—a deliberate strategy for Hutchins’ plan to rely heavily on Instagram influencer marketing, with probable Jenner/Kardashian spots, to market the product.
“There’s obviously precedent with the Jenners in the skincare industry. That was not lost on me when we made the investment,” says Sigalow. “One of our theses around next generation brands is: If you attach an influencer with a huge following to a consumer product, it’s like having your own media channel, so Lumasol’s starting on third base—they’re going to take off.”
In preparation for Lumasol’s Q1 2020 rollout, Hutchins is hiring an “extraordinarily experienced CMO,” adding to the “hundreds” of user tests, and developing her influencer, popup and outdoor event event strategy. “I have a social obligation to give people a product that can seamlessly fit into their lives and also save their lives,” she says.
I’m the assistant editor for Under 30. Previously, I directed marketing at a mobile app startup. I’ve also worked at The New York Times and New York Observer. I attended the University of Pennsylvania where I studied English and creative writing.
Sophia Hutchins is an entrepreneur at the crossroads of health, beauty and tech. She is both founder and CEO of Luma Suncare Inc. She successfully closed her first round of venture funding in March 2019. She is busily preparing for the launch of her company. Hutchins is an outspoken advocate for women and equality in the workplace. People can often find her speaking to groups within corporate America and her favorite of all groups to speak with are entrepreneurial women. Prior to starting her venture, she served as CEO of the Caitlyn Jenner Foundation.
When Popeyes launched its fried chicken sandwich on August 12, it got a lot of positive attention — the Twitter announcement got more than 31,000 likes, which is pretty impressive considering that their posts usually get less than 400. What the world didn’t know was that tragedy was soon to strike. Popeyes ran out of chicken sandwiches before the month was over. But what’s the real reason it disappeared? And when will the Popeyes chicken sandwich be available again, if ever? To find out, we have to go back to the beginning. For the longest time, Popeyes only sold chicken pieces and tenders, with no sandwiches on their menu. They have a loyal fan following nonetheless, including the late Anthony Bourdain, who is said to have once eaten at a Popeyes buffet for three days in a row. The Popeyes chicken sandwich, made with their signature crispy fried chicken on a spicy mayo-slathered brioche bun and topped with pickles, was bound to be a hit with fans, but it had a few competitors who wanted to make their presence known when the newcomer started getting attention. Chick-fil-A, a big name in the chicken sandwich game, was compelled to tweet out an equation alluding to the fact that they have the original chicken sandwich, stating: “Bun + Chicken + Pickles = all the [love] for the original.” Popeyes wasn’t having it, tweeting a simple “… y’all good?” in response. While Chick-fil-A’s tweet got more than 23,000 likes, the reply from Popeyes got almost 325,000. Round one goes to Popeyes. Wendy’s, with its notoriously on-point Twitter game, also tried to get in the fight, posting a tweet that said: “Y’all out here fighting about which of these fools has the second best chicken sandwich.” But once again Popeyes’ reply — “Sounds like someone just ate one of our biscuits. Cause y’all looking thirsty.” — got way more engagement from customers. The fast food chicken sandwich war has officially begun. It’s not just social media hype, either. The masses seem to agree that Popeyes chicken sandwich really is superior to Chick-fil-A’s chicken sandwich, calling it better and cheaper. CBS This Morning’s Gayle King, who called 15 different Popeyes locations trying to get her hands on one, said on her first bite, Even celebrity chef Emeril Lagasse gave his version of a five-star review. He posted on Twitter that he was about to try the Popeyes chicken sandwich, and when a fan asked what he thought of it, Lagasse replied with two explosion emojis, the picture version of his famous catchphrase. But not everyone managed to try one of the chicken sandwiches. Just 15 days after they launched, Popeyes made an announcement on Twitter, dashing the dreams of hopeful diners. “Y’all. We love that you love The Sandwich. Unfortunately we’re sold out (for now).” A Popeyes spokesperson told CBS why the sandwich sold out so quickly, explaining: “The demand for the new Chicken Sandwich in the first few weeks following its launch far exceeded our very optimistic expectations. In fact, Popeyes aggressively forecasted demand through the end of September and has already sold through that inventory.” The chain hasn’t said exactly when the Popeyes chicken sandwich is coming back, only that they, along with their suppliers, are quote, “working tirelessly to bring the new sandwich back to guests as soon as possible.” If you want to know the second it becomes available, you can download the Popeyes app and enable push notifications. You’ll get an alert as soon as the sandwich hits stores, so keep gas in your car and a go-bag by the door, because you never know when the call might come. And don’t worry — once the Popeyes chicken sandwich becomes available it won’t be disappearing again. According to a Popeyes spokesperson, the chicken sandwich is permanently on the menu. That’s great for fans of the chain, but the question remains: What are we going to do with ourselves while we wait for its return? Watch the video to find out the real reason Popeyes ran out chicken sandwiches! #Popeyes#Chicken#ChickenSandwich
At 70, Singapore’s “popiah king” Sam Goi still has his sights set on expanding his food and property empire. After earning his royal sobriquet—and his $2 billion fortune—making the paper-thin crepes used to wrap spring rolls known as popiah, he is now branching out. He wants to invest in meat substitutes and other special-diet foods, and play angel investor to food startups like the one he started in 1977, Tee Yih Jia Food.
Goi knows something about building a brand. Privately held Tee Yih Jia (TYJ) today exports Asian food items such as spring rolls, glutinous rice balls and samosas to more than 80 countries. It’s now in the process of doubling its production capacity with a new facility due for completion in 2021.
Goi’s Singapore-listed development company GSH, however, has hit a lull. After a S$75 million windfall in 2017 from its sale of private-equity unit Plaza Ventures, net profits dropped 93% in 2018 to S$6 million on a 9% decline in revenues. That’s pushed GSH’s shares down 13% in the past year, helping pull Goi’s fortune down by $100 million.
Goi arrived in Singapore in 1955 when he was six years old with little but the shirt on his back after his family fled China’s Fujian province in a small boat. Goi dropped out of high school, but used his training in a repair shop to gain a toehold in the food industry.
With S$450,000 borrowed from a bank and his father, he bought an underperforming food company and overhauled it, increasing production from 3,200 popiah skins a day to 25,000. In 1980, he brought in technicians to design the world’s first automated system for making spring roll pastries at the blistering rate of 30 million a day. He then branched out, pumping out fortune cookies, flatbread and samosas.
Goi returned to his hometown in Fujian in 1985 and built his first China factory there, later adding a frozen-food facility, a brewery and a vinegar plant in other parts of China. Goi also snapped up land in China’s second-tier cities long before China’s property boom. Most of Goi’s exposure to property, though, has come through GSH, where he now has a nearly 60% stake.
TYJ also has a subsidiary in Yangzhou focused on developing residential and commercial properties in surrounding Jiangsu province. But Goi’s plans for TYJ are more food-related. Goi’s daughter Laureen, who runs TYJ Food Manufacturing, has been building a state-of-the-art food factory nearly four times larger than the present one in Singapore, with the latest in automation, including driverless vehicles.
The new facility will also have a laboratory developing new products, and TYJ may even invest in and incubate promising food ventures, furthering Goi’s legacy as a foodstuff innovator.
Correction: the original version of this story incorrectly stated Goi’s late son Ben was involved in TYJ’s factory expansion. It is his daughter Laureen. Also corrected is that the new facility is an expansion not a replacement of the existing manufacturing plant.
Pamela covers entrepreneurs, wealth, blockchain and the crypto economy as a senior reporter across digital and print platforms. Prior to Forbes, she served as on-air foreign correspondent for Thomson Reuters’ broadcast team, during which she reported on global markets, central bank policies, and breaking business news. Before Asia, she was a journalist at NBC Comcast, and started her career at CNBC and Bloomberg as a financial news producer in New York. She is a graduate of Columbia Journalism School and holds an MBA from Thunderbird School of Global Management. Her work has appeared in The New York Times, Washington Post, Yahoo, USA Today, Huffington Post, and Nasdaq. Pamela’s previous incarnation was on the buy side in M&A research and asset management, inspired by Michael Lewis’ book “Liar’s Poker”. Follow me on Twitter at @pamambler
On Thursday, Patrick Byrne, the founder and longtime CEO of former e-tailing giant Overstock.com, resigned, saying his involvement as a federal informant in the investigation of accused Russian spy Maria Butina made performing his duties impossible. That’s not the whole story. This is.
Its early May and Patrick Byrne has just gotten off the phone with hip-hop artist Akon and is roaming barefoot in the elegant three-room suite on the top floor of the Jefferson hotel, a stone’s throw from Embassy Row in Washington, D.C. He grabs a Diet Coke, a pack of gummy bears and some M&Ms from a minibar hidden in a tasteful armoire, settles on a plush cream-colored sofa and begins to boast about the circumstances around which the Senegalese-American celebrity sought him out.
“I hear he’s a musician. We share ambitions for Africa,” says Byrne, popping a gummy bear into his mouth.Byrne, who bought Overstock.com in 1999 and ran it for two decades, has always been a man of many ambitions. High on his list: transforming the African continent and its 1.3 billion people via blockchain technology.
Like an infomercial for the nascent decentralized, distributed ledger technology that underlies cryptocurrencies like bitcoin, he waxes poetic about a future in which corruption is wiped out, people are freed from poverty and developing nations can leapfrog ahead by putting government functions like voting, property records and central banking on the blockchain. Characteristically low on his priority list: The economic interests of the thousands of shareholders in his publicly traded former e-tailing giant.
For the last several years, Byrne, 56, spent no fewer than 220 days a year on the road spreading his blockchain gospel, despite the fact that Overstock was hemorrhaging cash. “Over the next five years, we can change the world for 5 billion people,” says Byrne. “Well, at least a billion. Maybe 5 billion.”
Byrne is vague about why he is in the nation’s capital this week and mentions a meeting with representatives from Africa about his blockchain projects. However, he later reveals that he had been meeting with the Department of Justice. Byrne claims he’s been serving as a government informant, feeding information since 2015 to the “Men In Black,” as he puts it, on Maria Butina, a vivacious Russian grad student with whom he struck up a romantic relationship. She is currently serving an 18-month prison sentence after pleading guilty to conspiring to act as a foreign agent, in connection with her efforts to infiltrate conservative political circles before and after the 2016 presidential election.
In his resignation letter, Byrne cited his involvement in “certain government matters” as complicating “all manner of business relationships from insurability to strategic discussions regarding our retail business.” Byrne says what he has done (exactly what that was remains unclear) “was necessary for the good of the country, for the good of the firm.” Byrne concludes his letter by stating cryptically:
“Coming forward publicly about my involvement in other matters was hardly my first choice. But for three years I have watched my country pull itself apart while I knew many answers, and I set my red line at seeing civil violence breaking out. My Rabbi made me see that ‘coming forward’ meant telling the public (not just the government) the truth. I now plan on leaving things to the esteemed Department of Justice (which I have doubtless already angered enough by going public) and disappearing for some time.”
In a call from his car minutes after delivering a farewell speech to his surprised employees, Byrne said he had his bags packed. “I will be sitting on a beach in South America shortly, and that is all I want to think about,” he says. “I want to focus on getting back into good shape, doing yoga and becoming a vegetarian.”
Welcome to Patrick Byrne’s bizarre world. The existential crisis Byrne is putting his Salt Lake City-based company through comes after an impressive career pioneering e-commerce. Nearly two decades ago, Byrne was lauded as “The Renaissance Man of E-Commerce.” The closeout store he took control of in 1999 for a mere $7 million was on its way to becoming an e-tailing phenom and eventually came to command a market capitalization of $2.2 billion. But in the hyper-competitive digital age, disruptive business models don’t last long, and today Overstock—once an innovator—is a has-been.
This isn’t any secret. By the time of his resignation, Byrne had all but given up trying to compete with the likes of Amazon and Wayfair, and he had spent the last two years unsuccessfully attempting to unload Overstock’s retail business. Just as e-commerce captivated Byrne at the turn of the millennium, blockchain was his shiny new obsession. So Byrne funneled Overstock’s dwindling resources into blockchain ventures—more than $200 million since 2014.
About 30% of that sum went into 18 early-stage companies that are building a suite of blockchain technology products he wanted to sell to governments. The rest has been seemingly squandered on a personal vendetta: Overstock is creating a blockchain version of Nasdaq, which Byrne believed could right some of the evils of Wall Street—particularly the naked short-selling that he claims plagued his company for much of the last 15 years. Byrne attracted an eclectic mix of allies to his corner doing what he calls “God’s work,” ranging from Akon and the World Bank to the infamous short-seller Marc Cohodes and the city of Denver.
But the walls closed in on Byrne’s quixotic adventure. Overstock’s heavily shorted stock plummeted from $87 in the beginning of 2018 to about $20 today as some $1.5 billion in market capitalization has evaporated. Once reliably profitable, Overstock lost $206 million last year and $110 million in 2017. In recent months, Byrne fired some 400 people.
Even worse were the cracks forming in Overstock’s new strategy. The company’s prized crypto offering, Tzero, is the subject of an SEC investigation, and a highly-anticipated private equity investment into the fledging exchange has withered away. Its blockchain investment arm, Medici Ventures, has yet to generate meaningful revenues and racked up losses of $61 million in 2018. With many big companies now embracing blockchain technology—including a bold new plan from Facebook—Byrne’s strategy shift to blockchain suddenly looks as challenging as Overstock’s online retailing business.
Eventually even Byrne’s most loyal shareholders—blockchain believers among them— were in open revolt. Fumed Byrne in May, after investors bombarded him with calls and emails when he sold 900,000 shares of stock, “Frankly, I had no idea that shareholders would demand explanations of why and how I might want to use my cash derived from my labor and my property to pursue my ends in life.”
Byrne is the son of the late John “Jack” Byrne, a University of Michigan-trained mathematician and renowned insurance executive credited with turning around Geico in the mid-1970s and persuading Warren Buffett to invest in the auto insurer. Geico would eventually become one of the biggest contributors to Berkshire Hathaway’s bottom line, and Buffett once described Byrne’s father as “the Babe Ruth of insurance.”
When Byrne was in middle school, he gravitated toward his father’s friends. Bethesda neighbor Gordon Macklin, the president of Nasdaq from 1975 to 1987 (and later the chairman of San Francisco investment bank Hambrecht & Quist), would drive Patrick to school regularly. Buffett was an occasional house guest, and Byrne’s parents would allow him to skip school to spend time with the investment maven.
Says Byrne, who now refers to the Omaha billionaire as his Rabbi, “My mom would get a case of Pepsi, and Buffett, who is a teetotaler, always carried a hip flask of cherry syrup like a drunk. We’d sit there and over an afternoon polish off 18 Pepsis.”
Byrne’s father later went on to turn around American Express’s Fireman’s Fund and eventually created his own insurance holding company, called White Mountains Insurance. His stake, worth hundreds of millions at his retirement in 2007, formed the basis of the family’s wealth.
Patrick was the youngest and most precocious of Jack’s three sons. In 1981, he headed to Dartmouth to study philosophy and Asian studies. Shortly after his graduation, he was diagnosed with testicular cancer. After treatment, he celebrated with a cross-country bicycle ride with his two older brothers. The cancer would come back two more times in quick succession and keep him in the hospital for much of his 20s. To keep his mind occupied while he was bedridden, he began pursuing a graduate degree in mathematical logic from Stanford. In 1988 he headed to Cambridge University as a Marshall Scholar and eventually received his philosophy doctorate from Stanford.
Byrne speaks Mandarin and several other languages and once translated Lao Tzu’s Tao Te Ching (The Way Of Virtue) into English. “I was one of those guys who actually studied philosophy because I was trying to figure out man’s place in the universe,” says Byrne, whose dissertation explored the virtues of limited government and drew from libertarian Robert Nozick’s Anarchy, State and Utopia.
Despite his years in academia, Byrne pivoted hard to the pursuit of wealth in the late 1980s. “I had grown up in a very business-oriented household … I never anticipated staying in a university setting,” he says. In 1987 he bought a bankrupt hotel with his older brother called the Inn at Jackson Hole for about a million dollars, which they sold several years later for $4 million. In 1989, they started buying distressed consumer debt at 5 cents on the dollar during the S&L crisis.
In the early 1990s, Byrne led a $1 million investment into the development of the Red Dolly Casino in Colorado, which was later sold for $5 million. He also invested in distressed strip malls, office space and apartment buildings across the country. His dad often loaned his sons money and in later years put up mezzanine capital, collecting a preferred, 15% return and half as much equity.
Nothing kept Byrne’s attention very long. In 1994, he led an investment into Centricut, a New Hampshire-based industrial torch-part manufacturer, and served briefly as CEO when the current management fell ill. In 1997, he left to run Berkshire Hathaway’s Fechheimer Brothers, which made uniforms for police, firemen and military. In 1999, seeing an opportunity to sell leftover inventory online, his investment holding company, High Plains Investments LLC, acquired a majority stake in D2-Discounts Direct for $7 million. He renamed it Overstock, and when 55 venture capitalists declined to fund the company’s growth, he turned to friends, family and his own checkbook.
His timing was perfect. The company began scooping up inventory from bankrupt dot-coms, whether it was consumer electronics, jewelry or sporting goods, then selling it on the cheap. In 2002, Overstock’s revenue hit $92 million and Byrne took the company public via a Dutch auction, which allows investors (not bankers) to set prices for the stock offering themselves. (Google went public the same way.)
By 2005, the company’s stock, which had skyrocketed post-IPO, began to slide as its losses widened. Byrne became convinced it was because of naked short-selling, an illegal practice in which investors sell shares in a company without actually borrowing the shares, typically using leverage. In a now-infamous August 2005 conference call, he ranted about how hedge funds, journalists and regulators were conspiring to push down the company’s stock price under the direction of some faceless menace he called the “Sith Lord.”
Overstock sued short-selling hedge fund Rocker Partners and research firm Gradient Analytics, which had been critical of the company. Then, in 2007, he filed a $3.5 billion lawsuit against 11 of the biggest banks on Wall Street (Goldman Sachs, Morgan Stanley and Credit Suisse among them), accusing them of participating in a “massive, illegal stock market manipulation scheme” that distorted the company’s stock price by facilitating naked short-selling.
The crusade cost him two directors, plus the confidence of his father, who threatened to step down from the board because he believed his son was distracted from Overstock’s core business. The litigation dragged on for over a decade and resulted in a handful of settlements, including a $20 million payment from Merrill Lynch in 2016. “I think he won the battle but lost the war when it came to naked short-selling,” says Tom Forte, long the lone analyst covering the stock.
In the years Byrne spent chasing short-sellers, Overstock’s stock sagged and revenue drifted slowly upward, hitting $830 million in 2008, $1.3 billion in 2013 and $1.8 billion in 2018. And while the company never racked up massive losses like Amazon or Wayfair, as Byrne likes to point out, its profitability has been modest. Overstock broke into the black in 2009, then eked out small profits for the next seven out of eight years.
In 2017 and 2018, as Byrne shifted his attention to expanding in crypto and blockchain, the company began bleeding red ink—a whopping $316 million over two years, which is more than twice the profits Overstock has ever delivered. Byrne chalked his market share declines up to competitors with seemingly endless piles of cash to blow through.
“The thing I never anticipated … was that I would be in an industry that tolerated people losing $500 million, $1 billion or $3 billion forever. We started drawing copycats who came in and seemed to have unlimited capital,” he says, not hiding his disdain for and jealousy of Wayfair.
However, former employees say Byrne was distracted by his short-selling crusade and failed to take competitors seriously. Internally Byrne’s ADD management style—enthusiastically starting up new projects but then losing interest—was jokingly referred to as the Overstock “ovolution.” In 2004, the company spent a couple of million to develop an online auction platform akin to eBay, but it struggled to turn a profit and was shut down in 2011.
(Byrne later said he wished he hadn’t abandoned it.) In 2014, Overstock invested $400,000 to facilitate pet adoptions by working with shelters, which it still runs but describes as a “public service.” The company started selling home, auto and small business insurance in 2014, too, which Byrne described as “a long-term play” before trashing it as not doing “particularly well” three months later.
“Patrick gets very focused on something, and then when he sees the financials didn’t work out, he basically forces layoffs,” says Chad Huff, a former software developer. “Initiatives would get started, then shelved. Or they’d be half done and not in a great state but rolled out anyway.”
Acouple of months before his resignation, as sheets of rain blanket Overstock’s new headquarters at the base of Utah’s Wasatch Mountains—a building designed to resemble a peace sign when viewed from above—Byrne has finished sitting through a scheduled business luncheon and gone missing.
Several minutes later, after his assistant tracks him down, he glides into his office, where posters of Bob Marley and Pulp Fiction give it a dorm-room feel. He sits down and begins ruminating on his two decades running Overstock. “It’s kind of imagination land,” says Byrne, dressed in a black long-sleeve T-shirt, jeans and tennis shoes.
Strangely, Byrne’s Overstock was long immune from activist shareholder campaigns and boardroom coups and what ultimately prompted his sudden departure is still murky. Investors like Marc Cohodes had called for Byrne to step aside as CEO and move into a chairman position. Despite recent stock sales, Byrne remains the company’s largest shareholder, with a 14% stake and says he wasn’t pushed out. “This is not about pressure from shareholders. The only pressure—or actual issue— was that the insurance companies were having conniptions,” he says.
Byrne began chasing crypto in late 2013 when he asked dozens of staffers to work over the holiday break to fast-track a bitcoin payment feature. The price of bitcoin had skyrocketed that year from about $13 to more than $1,000, and in January 2014, Overstock became the first major retailer to accept bitcoin as payment.
Before long, Byrne began tapping Overstock’s balance sheet to fund bigger and bigger blockchain initiatives. The crown jewel: a digital stock exchange called Tzero, which is seeking to allow investors to trade so-called security tokens that represent traditional securities, like stocks, bonds, real estate, private equity and art on the blockchain. Proponents say this will improve access and liquidity for certain investments, plus cut down settlement times for stocks and bonds from up to two days to mere seconds. A bonus: The system would make naked short-selling impossible because there is no longer a lag time between a buy and sell order.
On the plus side, Tzero has satisfied a set of fearsome regulatory requirements, most notably acquiring a company licensed as an alternative trading system. The problem is, with just two tokens—representing Overstock’s and Tzero’s own shares—available to trade on Tzero’s platform, almost no one uses it. The company says it is aiming for 5 to 10 tokens by the end of the year.
In May, it announced partnerships with Saudi real estate giant Emaar Properties, to list $2 billion in real estate, and Securitize, a startup that packages regular assets into digital tokens that can be traded on the blockchain. While it hopes to generate revenues from listing fees, trading commissions, interest on lending assets and more, it first needs to create liquidity by attracting quality issuers and investors to its platform.
Byrne was also developing a securities lending platform as part of Tzero, which would connect asset-rich institutional investors like pension funds (who make money by lending their stock) directly with short-sellers (who borrow stock to make trades). Both parties stand to benefit from lower fees, plus will receive a blockchain-enabled digital locate receipt that proves the shares have actually changed hands.
The service takes dead aim at banks like Goldman Sachs and Morgan Stanley, which currently sit in the middle of these transactions. It’s been tried before: A company called Quadriserv created a similar stock lending platform named AQS in 2006, but alleged in a recent lawsuit that banks conspired to “boycott AQS and starve it of liquidity.” In 2016, AQS was sold in a fire sale for $4 million.
“It’s the last great business on Wall Street,” says Byrne. “Pension funds are going to understand they have been deprived of tens of billions of earnings a year. That money is turning into Maybachs in the Hamptons.”
At the company’s annual shareholder meeting in May, Byrne fielded tough questions from investors. While the price of bitcoin had climbed some 60% in the last five months, Overstock’s shares continued to slide. And after months of delays, Overstock just dropped a bombshell: Tzero would receive a measly $5 million in the form of Chinese renminbi, U.S. dollars and other Hong Kong-traded securities from Asian investment firm GSR Capital, after the company originally touted a deal size of as much as $404 million.
Over time Byrne developed a dilettante’s reputation for overpromising and underdelivering. In 2016 Byrne boldly told investors that Overstock would be issuing the world’s first equity security using the blockchain. “The history of capital markets is entering a new era,” he said. Byrne personally ended up buying 50% of the $2 million preferred stock offering.
In 2017, Byrne announced a joint venture with Peruvian economist Hernando de Soto Polar that would “challenge global poverty and inequality” by creating a blockchain-based global land registry. But when the two couldn’t agree on terms, Byrne ended up contributing $7 million of his personal capital to take a 43% stake in the newly formed Medici Land Governance.
Overstock began exploring a sale of its retailing business in 2017, but to date no buyers have materialized. There was also Tzero’s troubled “initial coin offering,” which set out to raise $250 million but, ultimately as crypto prices were dropping, generated $105 million in August 2018 at an expense of $21.5 million to corporate parent Overstock. The offering is now being investigated by the SEC as part of a broader ICO crackdown.
Many investors grew tired of Byrne’s promises. “Basically, every initiative they put forward, they promised or signaled to the market that this is an incredible layup and they will get it done in three to six months,” says Kevin Mak, a lecturer at Stanford Business School who invested in the company in 2017 and sold his shares last fall. “I ultimately exited when I found that the information I was getting from management was no longer—I want to pick the right words—reliable.”
In the end, Byrne was forced to spend a considerable amount of time hunting for fresh funds to keep his dream alive. In November 2017, Overstock borrowed $40 million from his mother (trusts in her name own 5% of the company) and brother at an interest rate of 8%.
Over the next few months, during the height of crypto-mania, the company received $150 million from two investors, including George Soros, after they exercised warrants in exchange for stock (the investors have since dumped their shares). In August and September 2018, the company raised another $95 million by issuing new shares of common stock in an “at the market” offering.
The problem is, unlike most companies that buy back shares as prices decline, Overstock is selling, diluting the company’s equity. Shares outstanding have climbed to 35 million from 25 million in the last two years. In the first quarter of 2019 Overstock committed to another quick stock sale, raising $31 million to partially offset a $51 million cash burn.
Meanwhile, Overstock’s original business is running on fumes. “It was kind of a fight to run retail because it was never his priority,” says Stormy Simon, former president of the operation who left in 2016. Since then, there have been several rounds of layoffs in the retail business, leaving a raft of empty desks in Overstock’s new $100 million headquarters.
And yet, to his blockchain staffers, Byrne was like Daddy Warbucks. Tzero CEO Saum Noursalehi was paid $4.8 million last year, while his brother and Tzero vice president Nariman earned $1 million. Tzero chief technology officer Amit Goyal made $1.8 million—and his brother Sumit earned an additional $765,000.
In Overstock’s recent quarterly filings, it indicates that it should be able to fund its current obligations for another 12 months, but after that, additional capital may be needed “to be able to fully pursue some or all of our strategies.” The ominous disclosure seems to have had little effect on Overstock’s languishing shares, because by now many investors have given up on the company.
Byrne never showed much respect for Wall Street or small-minded shareholders—and maybe that’s what got him in the end. “We’re like a Russian icebreaker trolling across the Arctic ice field. It’s three or four yards at a time and enormously expensive,” says Byrne. “When you’re talking about the kinds of numbers we’re talking about and freeing up trillions of capital … I think there is going to be so much money in it it’s kind of silly to try and model it.”
I am a staff writer at Forbes covering retail. I’m particularly interested in entrepreneurs who are finding success in a tough and changing landscape. I have been at Forbes since 2013, first on the markets and investing team and most recently on the billionaires team. In the course of my reporting, I have interviewed the father of Indian gambling, the first female billionaire to enter the space race and the immigrant founder of one of the nation’s most secretive financial upstarts. My work has also appeared in Money Magazine and CNNMoney.com. Tips or story ideas? Email me at firstname.lastname@example.org.
Dr. Joe DeSimone took his own path to entrepreneurship. His latest venture, Carbon, is changing the way things are made.
He’s assembled one of the most impressive Board of Directors and line up of investors to transform the $300 billion manufacturing industry.
Joe recently appeared as a guest on the DealMakers Podcast. During his exclusive interview, he shared how his team is transforming how the world makes things, the fundraising process, what it’s like building a nearly 500 person company in less than 6 years, and many more topics.
From Academia to Entrepreneurship
Joe DeSimone was born and raised in the suburbs of Philadelphia. Ever since high school, Joe found he had a knack for chemistry. For both understanding it and for teaching it.
He attended Ursinus College, and then Virginia Tech for his Ph.D. On a tip from a faculty advisor, he went to check out the University of North Carolina, at Chapel Hill—-one of the top 10 chemistry departments in the country.
If he would teach organic and polymer chemistry, then they would give him $500,000 to start a research program. He was convinced. At UNC, he enjoyed a highly successful career as a professor for 25 years.
Joe taught a lot of students chemistry and mentored many researchers. He learned that people have very different learning styles. From his perspective, if you want to be a great teacher, you have to take responsibility for explaining complicated topics in accessible ways.
It turns out that is a really important trait for entrepreneurs too. It’s a valuable skill whether you’re doing it in a classroom setting, talking to VCs or investors, or your own employees. The importance of bringing people along with you.
His position in academia enabled Joe DeSimone to pursue a handful of interesting startups based on his research before he launching his newest venture, Carbon, in 2013.
His first company was BioStent. A partnership with an interventional cardiologist at Duke University. They developed a coronary stent that is polymeric instead of metal-based. It dissolves in the body after 18 months, once blood vessels can operate on their own again. The company was acquired by Guidant, and then Abbott.
Next, it was Liquidia Technologies, a partnership with one of Joe’s Ph.D. students including Jason Rolland, now SVP of Materials at Carbon. Liquidia went IPO last year.
They developed technology that leveraged tools from the computer industry to make precision nanoparticles. It spawned new and more effective ways to deliver medicines to the airway.
It has proven valuable in improving treatment approaches for diseases like pulmonary arterial hypertension, and in creating next-generation vaccine platforms for infectious diseases and certain cancers.
After spending 25 as a faculty member at UNC, the opportunity to go to Silicon Valley and take on a new entrepreneurial challenge was something Joe couldn’t pass up.
UNC agreed he could take a sabbatical to pursue his idea. That was five years ago.
Departing Academia for Silicon Valley
When Joe left North Carolina for Silicon Valley to found Carbon, he didn’t know what the future would hold. Carbon is now one of the world’s leading digital manufacturing companies.
Based in Redwood City, Carbon’s mission is to enable companies to make breakthrough products that can improve human health and well being, transform industries, and change the world.
Joe launched the company and its groundbreaking Digital Light Synthesis™ (DLS) technology on the TED stage in 2015. DLS fuses light and oxygen to rapidly produce products from a pool of resin. Using DLS technology, Carbon is enabling companies like Adidas, Riddell, Ford and Johnson & Johnson to create breakthrough products at speeds and volumes never before possible, finally fulfilling the promise of 3D printing.
Joe believes that empowering product teams to make breakthrough products and bring them to market faster will change the way we live.
Carbon has cracked the code on 3D printing at scale. The manufacturing industry is a $12 trillion market and manufacturing polymers is a $330 billion market. There is enormous potential here for Carbon to lead the digital revolution in manufacturing.
Creating a Company Differentiated by its Technology, Business Model and Team
With a team of nearly 500 employees around the world, Carbon has also assembled an impressive team of board members and investors while raising $680 million in the process at a $2.5 billion valuation.
Carbon’s board includes former Chairman and CEO of DuPont, Ellen Kullman, former CEO of Ford Motor Company, and former CEO of Boeing’s Aircraft Division, Alan Mulally, and Sequoia’s Jim Goetz.
Some of their investors include Sequoia, Google Ventures, GE, Adidas, BMW, Johnson & Johnson, and JSR. They’ve also got Fidelity, Baillie Gifford, and Madrone Capital Partners as well as investment from additional international sovereign funds.
Storytelling is everything in fundraising and Carbon was able to master this. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Critical Ingredients for a Successful Company
During the interview, Joe shared three of the most important components of building a successful company as being:
1. The importance of IP and patent-protection
2. Building highly differentiated technology
3. Assembling a world class team of people that are committed, passionate, and talented
DeSimone also shared his thoughts on the similarities between academia and entrepreneurship such as the importance of bringing people along with you and painting a vision for the future and how the world can be different.
Listen in to the full podcast episode to find out more, including:
I am a serial entrepreneur and the author of the The Art of Startup Fundraising. With a foreword by ‘Shark Tank‘ star Barbara Corcoran, and published by John Wiley & Sons, the book was named one of the best books for entrepreneurs. The book offers a step-by-step guide to today‘s way of raising money for entrepreneurs. Most recently, I built and exited CoFoundersLab which is one of the largest communities of founders online. Prior to CoFoundersLab, I worked as a lawyer at King & Spalding where I was involved in one of the biggest investment arbitration cases in history ($113 billion at stake). I am an active speaker and have given guest lectures at the Wharton School of Business, Columbia Business School, and at NYU Stern School of Business. I have been involved with the JOBS Act since inception and was invited to the White House and the US House of Representatives to provide my stands on the new regulatory changes concerning fundraising online
Naomi Osaka entered the U.S. Open last year largely under the radar as the 19th-ranked player in the world. But that all changed with her run to the finals and her memorable win over Serena Williams. When Osaka backed up the Open title with a second straight Grand Slam win at the Australian Open in January, the next marketing superstar was born.
Osaka’s accomplishments, youth, skill and multicultural appeal make her a marketer’s dream. Born to a Japanese mother and a Haitian-American father, she was the first Japanese player to win a Grand Slam event and the first Asian player to hold the top ranking in singles.
Her off-court earnings jumped from $1.5 million annually to an estimated $16 million for the 12 months ending June 1, after she signed deals with Mastercard, All Nippon Airways, Nissan and Procter & Gamble.
Her endorsement haul will be even greater over the next year after she signed a blockbuster, multimillion-dollar pact with Nike in the spring, just ahead of our earnings cutoff. Osaka, 21, is primed to be one of the faces of the 2020 Summer Olympics in Tokyo.
Including prize money, Osaka’s total earnings over the last 12 months were $24.3 million, by Forbes’ count. That makes her just the fourth female athlete to earn $20 million in a year, joining three fellow tennis aces: Williams, Maria Sharapova and Li Na.
Osaka’s big payday still trails that of Williams, who is the world’s highest-paid female athlete for the fourth year in a row. She earned $29.2 million, including $4.2 million in prize money, after returning to the WTA Tour following the birth of her daughter, Olympia, in September 2017.
Williams continues to expand one of the most robust endorsement portfolios in sports, adding Pampers, Axa Financial and General Mills to her roster. They join more than a dozen other brands, like Nike, Beats, Gatorade and JPMorgan Chase.
The 23-time Grand Slam champ scores highly across all demographics, and among athletes, only Tiger Woods and Tom Brady have higher levels of awareness with U.S. consumers. Williams’ $225 million estimated net worth makes her the only athlete on Forbes’ list of America’s Richest Self-Made Women.
Williams and Osaka both earned more than twice as much as the third-highest-paid female athlete in the world, Angelique Kerber, who pulled in $11.8 million from tennis.
Tennis remains the most surefire way for female athletes to make millions of dollars. Witness the WTA Tour’s announcement last week that the year-end WTA Finals event will pay its winner $4.7 million this year—the largest payout in the history of men’s or women’s tennis. Total prize money on the WTA Tour is $179 million in 2019, and the ten highest-paid female athletes in the world this year are all tennis players (women from golf, soccer and badminton crack the next five).
Female athletes in soccer, basketball and softball earn salaries of pennies on the dollar compared with their male counterparts. The WNBA max salary slot this season is $117,500, compared with $37.4 million in the NBA.
Despite the playing-salary gap in team sports, marketing opportunities have opened up in recent years for female athletes thanks to the growth of social media platforms, says Dan Levy, who heads up the Olympics and female athletes divisions at Wasserman.
“Pro athletes now have a way to connect with their fans that doesn’t rely on network TV to build a fan base and connectivity to the consumers that brands want to reach,” Levy says. “That change alone has helped women become much more powerful in the sports marketing world.”
Wasserman, which represents Alex Morgan, Megan Rapinoe and Katie Ledecky among its 2,000 clients, launched a new service, Athlete Exchange, last month to help match athletes who have robust digital presences with brands chasing a desired audience. Wasserman client Hilary Knight does not get a lot of air time as a member of the U.S. women’s ice hockey team, but her online profile has more social interactions than all but six NHL players in 2019. The engagement is a boost for her endorsement partners like Red Bull, Visa and Bauer Hockey.
Our earnings tally looks at prize money, salaries, bonuses, endorsements and appearance fees between June 1, 2018, and June 1, 2019. There are 15 female athletes who made at least $5 million during that time period; for comparison, roughly 1,300 male athletes will hit that mark this year. The top 15 earned a cumulative $146 million, compared with $130 million last year. It’s an international crew, with athletes from 11 countries represented.
15. Ariya Jutanugarn
Total Earnings: $5.3 million
Prize Money: $3.3 million
Endorsements: $2 million
Jutanugarn won the LPGA Tour’s Race to the CME Globe season-long points competition and the accompanying $1 million bonus. The Thai pro golfer has more than ten endorsement partners, including Titleist, Toyota, KBank and Thai Airways.
13 (tie). Madison Keys
Total Earnings: $5.5 million
Prize Money: $2.5 million
Endorsements: $3 million
Keys reached a pair of Grand Slam finals in 2018 (French Open and U.S. Open) and won her first clay-court event of her career at the Charlestown Open this year. Nike is her biggest endorsement, and she also counts Evian, Wilson and Ultimate Software as partners.
13 (tie). P.V. Sindhu
Total Earnings: $5.5 million
Prize Money: $500,000
Endorsements: $5 million
Sindhu remains India’s most marketable female athlete. The badminton star has endorsements with Bridgestone, JBL, Gatorade, Panasonic and more. She became the first Indian to win the season-ending BWF World Tour finals in 2018.
12. Alex Morgan
Total Earnings: $5.8 million
Endorsements: $5.5 million
The biggest star of the U.S. Women’s National Team says she’ll be back in uniform for the 2023 World Cup and is bringing personal sponsors like Nike, Coca-Cola, Beats, AT&T, Continental Tires and Volkswagen along for the ride. The USWNT co-captain is planning to launch a media company focused on women in sport.
10 (tie). Garbiñe Muguruza
Total Earnings: $5.9 million
Prize Money: $2.4 million
Endorsements: $3.5 million
Earnings fell for the two-time major winner as her ranking recently dropped to No. 28, from second in the world at the end of 2017. She still maintains a deep endorsement roster with Adidas, Evian, Beats, Rolex and Babolat.
10 (tie). Venus Williams
Total Earnings: $5.9 million
Prize Money: $900,000
Endorsements: $5 million
The 39-year-old Williams invested in wellness brand Astura and was appointed chief brand officer of the company in May. A 23-time Grand Slam champion, including doubles, she launched her own YouTube channel last month focused on “fitness, tennis, wellness, design and more.” Williams can bank six figures a pop on the speaking circuit.
9. Elina Svitolina
Total Earnings: $6.1 million
Prize Money: $4.6 million
Endorsements: $1.5 million
Svitolina scored the biggest win of her career when she captured the WTA Finals title in Singapore to end the 2018 season. The Ukrainian-born pro pocketed $2.4 million for the win and finished the year with a No. 4 world ranking, triggering bonuses from sponsors Nike and Wilson.
8. Karolina Pliskova
Total Earnings: $6.3 million
Prize Money: $4.6 million
Endorsements: $1.7 million
The Czech-born Pliskova has won four events over the past 12 months but has not reached a Slam final since losing the 2016 U.S. Open. Pliskova bumped her off-court earnings with a new contract with FILA that kicked in this year.
7. Maria Sharapova
Total Earnings: $7 million
Prize Money: $1 million
Endorsements: $6 million
Injuries limited Sharapova to only 18 matches over the past year, but she maintains a lucrative endorsement with Nike, in addition to her Porsche, Head, Evian and Tag Heuer partnerships. Sharapova invested in the UFC and skincare brand Supergoop, yet her main off-court focus is building her candy brand Sugarpova.
6. Caroline Wozniacki
Total Earnings: $7.5 million
Prize Money: $3.5 million
Endorsements: $4 million
Wozniacki won a trio of events in 2018 and ranked among the top three players during the entire year. She married former NBA player David Lee in June. The wedding brought together stars from their respective sports, with Serena Williams a bridesmaid and other attendees including Angelique Kerber, Pau Gasol and Harrison Barnes.
5. Sloane Stephens
Total Earnings: $9.6 million
Prize Money: $4.1 million
Endorsements: $5.5 million
Stephens reached the finals of four events last year and finished the year ranked No. 6 overall. Her Nike pact, which began last year, is one of the biggest in the sport. She showcased a tennis shoe based on the “Aqua” colorway of Nike’s retro Air Jordan VIII this summer.
4. Simona Halep
Total Earnings: $10.2 million
Prize Money: $6.2 million
Endorsements: $4 million
Halep led the sport in prize money in 2018 and ranks fifth on the all-time list with $33 million. She won Grand Slam titles each of the past two years, triggering lucrative bonuses. The Romanian pro counts Nike, Wilson, Mercedes-Benz and Hublot among her sponsors.
3. Angelique Kerber
Total Earnings: $11.8 million
Prize Money: $5.3 million
Endorsements: $6.5 million
Kerber won Wimbledon in 2018 and finished the year ranked second in the world, triggering bonuses from her partners. She renewed deals with Adidas, SAP, Generali and NetJets and recently inked a new pact with Procter & Gamble’s Head & Shoulders brand. Other endorsements include Yonex, Porsche, Rolex and Lavazza.
2. Naomi Osaka
Total Earnings: $24.3 million
Prize Money: $8.3 million
Endorsements: $16 million
Nike shocked the tennis world when it announced in April it had secured Osaka to an endorsement deal. Most observers thought she would return to Adidas, which had Osaka under contract until her deal expired at the end of 2018.
1. Serena Williams
Total Earnings: $29.2 million
Prize Money: $4.2 million
Endorsements: $25 million
Williams, 37, wants to play through at least next year but is already planning her next act with a clothing line, S by Serena, and aims to launch jewelry and beauty products lines by the end of 2020. She has also built a venture portfolio worth more than $10 million.
I am a senior editor at Forbes and focus mainly on the business of sports and our annual franchise valuations. I also spend a lot of my time digging into what athletes earn on and off the field of play. I’ve profiled a bunch of athletes that go by one name: LeBron, Shaq, Danica and others. I also head up our biennial B-School rankings and our annual features on the Best Places for Business (metros, states and countries). I joined Forbes in 1998 after working 3 years at Financial World magazine.
A novel about who really invented the lightbulb by the screenwriter behind the Oscar-wining film “The Imitation Game.” It features the intertwining stories of Nikola Tesla, Thomas Edison, and George Westinghouse.
When a young Stanford neurosurgeon is diagnosed with lung cancer, he sets out to write a memoir about mortality, memory, family, medicine, literature, philosophy, and religion. It’s a tear-jerker, with an epilogue written by his wife Dr. Lucy Kalanithi, who survives him, along with their young daughter.
Westover, raised in the mountains of Idaho in a family of survivalists, didn’t go to school until she was 17. She would go on to earn a PhD from Cambridge University. This memoir chronicles her path towards higher education.
Online catering marketplace ezCater is not your typical unicorn–if the fact you’ve perhaps never heard its name doesn’t make that readily apparent. Stefania Mallett and Briscoe Rodgers noticed how much catered meals helped sales reps who were trying to woo clients. That realization evolved into ezCater, a 750-employee company that’s now going international.
For one thing, the company is based not in Silicon Valley, but rather in Boston. Its founder isn’t a young man armed with an MBA, it’s Stefania Mallett, a veteran executive who is now 63. Nevertheless, ezCater–an online marketplace for catered meal delivery–is valued at $1.25 billion following a $150 million funding round led by Lightspeed Venture Partners in April. The business has doubled sales eight years running–and if it does so again in 2020, it’ll hit $1 billion in orders.
Mallett has run or been a board member of nearly a dozen organizations, bringing engineering skills–she has degrees from MIT in electrical engineering and computer science–and a customer-focused approach. By the mid-2000s, she was working with co-founder Briscoe Rodgers as CEO of PreferredTime, a company that helped pharmaceutical sales representatives get face time with doctors to pitch their products. One of the most effective ways of doing that, they found, was helping the reps order food to a hospital or doctors’ office.
“Doctors are extremely busy. But what we found was they are also a little too polite to grab the food and run, so they will stand there while you give your pitch,” Mallett says. “It buys you 90 seconds to talk while they are stuffing some food in their face.”
Mallett and Rodgers couldn’t help wondering if a catering platform, one that would help sales reps across industries make delicious meals appear at their would-be clients’ offices, could scale. In 2007, they abandoned PreferredTime and founded ezCater, without a staff or proper office. They each had a Boston-area home; they chose to work out of Mallett’s because her dining-room table was larger.
The founders also envisioned that a platform that connected local restaurants to offer large, shared trays of food–rather than, say, individually packaged sandwiches–would have applications beyond just sales calls. “Turns out, the formula also works for feeding hungry Millennials at tech companies,” Mallett says.
EzCater launched quietly in two test markets, its home of Boston and Greensboro, North Carolina. (The latter was a large enough city to be a legitimate test bed, but small enough that it could let the company fix problems without causing a huge flap.) It wasn’t magic at first, because Mallett and Rodgers needed both sellers–restaurants willing to fulfill large orders–and buyers. “We tried at first to push both those rocks up the hill at roughly the same rate,” Mallett says.
An aha! moment came in the first year. To find customers, first they needed to offer more catering options. They worked fast, and went from just more than 1,000 restaurants on ezCater to some 20,000 in three months. Customers followed. “If you are selling things people want, they will find you,” Mallett says.
National expansion started in 2011, fueled by venture capital investments. To date, ezCater has raised nearly $320 million. The funding also has allowed the company to begin to expand internationally, thanks to acquisitions of a software firm in Vancouver that also ran a catering platform, and a corporate-catering firm in Paris.
Now the company has 750 employees, with about 450 in Boston, 200 in Denver, and the other 100 split between Vancouver and Paris. “We’ve outgrown my house–though I still go home to that house every night and think, yup, it started here!” Mallett says.
Despite the fast growth, the company has tried to develop an easygoing culture based on camaraderie and experimentation. EzCater orders breakfast on Monday and lunch on Thursdays for its Boston staff, using its own platform of course. New hires and interns are tasked with placing the orders, to learn how to use the system–and potentially spot pain points or to help come up with new features.
Growth is still the top metric on Mallett’s mind. She says ezCater issomewhat hesitant to make another acquisition,though, because “virtually all of the companies we are looking to acquire are growing slower than us–so they would slow our growth.” Mallett, who has taken companies public in the past, adds that ezCater could be ready by 2021 to consider an IPO–but with plenty of money in the bank from its past two venture rounds, there’s no pressure to do so.
“Success breeds options,” she says. “We’ve gotten to a place we can make our own choices.”
Babylon Health, a U.K.-based startup whose fast growth has been shadowed by concerns about the efficacy of its telemedicine apps, has raised $550 million in Series C funding, elevating the company to unicorn status. Saudi Arabia’s Public Investment Fund (PIF), which invest on behalf of the Saudi Arabian government, led the round that valued the company at $2 billion with a total of $635 million raised.
The new capital will enable the company to expand into more markets including the U.S. and Asia, Babylon said, and it will also bolster its artificial intelligence capabilities on the platform, which serves 4.3 million users worldwide. An unnamed U.S health insurer and a fund of global reinsurer Munich Re also invested. Vostok New Ventures, which already holds a 10% stake in Babylon, previously said it would participate in the new round, as did Sweden’s Kinnevik.
With an aim of cutting healthcare costs and broadening access, Babylon secured deals with Britain’s National Health Service with its apps to replace local doctor visits with video consultations and a chatbot that doled out advice on whether to see a doctor. It released a new artificially intelligent chatbot that promised to give diagnostic advice on common ailments, without human interaction. Its progress, however, was stuttered by doubts about the services’ abilities. Interviews with current and former Babylon staff and outside doctors revealed broad concerns that the company has rushed to deploy software that had not been carefully vetted, then exaggerated its effectiveness, Forbes revealed in December. The company disputed those claims, saying its software goes through many clinical tests. The company also came under fire for failure to follow up with patients receiving mental health treatment. At the time, Babylon blamed problems with the NHS referral system.
Any blunders don’t seem to have slowed the company’s momentum.
Led by CEO and Founder Ali Parsa, an Iranian-born former banker, Babylon has also secured contracts with Prudential and Samsung. It says it now delivers 4,000 clinical consultation a day, and one patient interaction every 10 seconds.
“We have a long way to go and a lot still to deliver,” Parsa said in a statement. “While the burden of healthcare is global, the solutions have to be localized to meet the specific needs and culture of each country.”
I serve as assistant editor for Forbes Innovation, covering cybersecurity and venture capital. I have covered politics at POLITICO, entertainment for Time Out New York, but my most fascinating beat has been covering the intersection of technology, finance, and entrepreneurship. I’m also an alumna of CUNY Graduate School of Journalism, and the University of Washington. Email tips to email@example.com
It’s what was passed on from Buffett’s father to Warren–the principle of having an “Inner Scorecard” rather than an “Outer Scorecard.” Either one can get you to success, but one matters more than the other. Buffett said:
The big question about how people behave is whether they’ve got an Inner Scorecard or an Outer Scorecard. It helps if you can be satisfied with an Inner Scorecard.
Unpacking Buffett’s “inner scorecard” principle
An outer scorecard is what most people have or want, often driven by hubris, greed, or a life lived off-balance. It’s an external measure of success that attempts to answer elusive questions like, “What do people think of me, my success, my image, or my brand?”
The inner scorecard is intrinsic and it defines who you are at the core of your values and beliefs. The focus is on doing the right things and serving people well instead of on what other people think of you. In one simple but hard-to-attain word in business, it’s about being authentic.
The inner scorecard has been the Warren Buffett way and what has worked for the self-made billionaire his entire life. It’s taking the higher road and it’s paid off for Buffett.
Investor and author Guy Spier writes in his book The Education of a Value Investor, “One of Buffett’s defining characteristics is that he so clearly lives by his own inner scorecard. It isn’t just that he does what’s right, but that he does what’s right for him … There’s nothing fake or forced about him. He sees no reason to compromise his standards or violate his beliefs.”
Here are four examples of how living by your own inner scorecard can lead to success, as it has for Buffett.
1. Start with what you teach your kids.
In Alice Schroeder’s The Snowball: Warren Buffett and the Business of Life, she quotes Buffett offering a parenting tip: “In teaching your kids, I think the lesson they’re learning at a very, very early age is what their parents put the emphasis on. If all the emphasis is on what the world’s going to think about you, forgetting about how you really behave, you’ll wind up with an Outer Scorecard. Now my dad: He was a hundred percent Inner Scorecard guy.”
2. Beware of whom you hang out with.
One summer after graduating from Columbia University, Buffett had to fulfill his obligation to the National Guard and attend training camp for a few weeks. That experience taught him one incredible lesson: hang around people who are better than you.
Buffett said in The Snowball, “To fit in, all you had to do was be willing to read comic books. About an hour after I got there, I was reading comic books. Everybody else was reading comic books, why shouldn’t I? My vocabulary shrank to about four words, and you can guess what they were.
“I learned that it pays to hang around with people better than you are because you will float upward a little bit. And if you hang around with people that behave worse than you, pretty soon you’ll start sliding down the pole. It just works that way.”
3. Don’t forget the only two rules of investing you’ll ever need.
Buffett pares down his inner scorecard investment philosophy to two simple sound bites. He says, “Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1.”
Yes, he’s made billions but he has also personally lost billions–about $23 billion during the financial recession of 2008. What Buffett alludes to here is mindset–having a sensible approach to investing. That means doing your homework, finding sustainable businesses with good reputations, and avoiding being frivolous and gambling away your money. Buffett never invests prepared to lose money, and neither should you.
4. Never waver away from what matters most to you.
Buffett’s success is not so much about what he has done as it is about what he hasn’t done. With all the demands on him every day, Buffett learned a long time ago that the greatest commodity of all is time. He simply mastered the art and practice of setting boundaries for himself.
That’s why this Buffett quote remains a powerful life lesson. The mega-mogul said:
The difference between successful people and really successful people is that really successful people say no to almost everything.
This advice speaks directly to our inner scorecard. We have to know what to shoot for to simplify our lives. It means saying no over and over again to the unimportant things flying in our direction every day and remaining focused on saying yes to the few things that truly matter.