The U.S. Census Bureau predicts that millennials are projected to outnumber Baby Boomers as the largest living adult generation in America. With the millennial generation making up such a huge portion of American consumers, it is imperative that companies understand how to effectively market products and services to this group. For this generation, social media has become an integral part of their lives. Many companies have taken notice and are using social media to craft their marketing strategies, however, many organizations struggle to understand and determine how to successfully capture the attention of millennial consumers.
One person that companies can learn a lot from is MarQuis Trill, a social media influencer, investor, and entrepreneur who has figured out how to authentically gain and capture the attention of young audiences. MarQuis made his social media debut on Myspace in 2003, at the tender age of 12. In 2017, he was listed as one of the most influential people on the internet. Now, through his social media platforms, MarQuis reaches millions of people every month, with a large percentage of his audience being millennials and Generation Z. After deciphering the formula for success, MarQuis started an agency called Entertainment 258, which is focused on helping businesses, influencers, athletes and artists develop and expand their brands. What are companies getting wrong when it comes to millennial marketing strategies?
How does MarQuis keep his audience engaged? What are some best practices when it comes to millennial marketing on social media? MarQuis sat down with Forbes to discuss these questions and more.
Janice Gassam: Who is MarQuis Trill? How did you develop such a huge following on social media?
MarQuis Trill: It basically developed in college. I went to Prairie View A&M University on a full-ride scholarship. I had a chance to go to other big schools like Baylor, Texas A&M, USC…but I decided to go to an HBCU, just to change the culture…once I started attending the school, I saw the culture of the community. I went from playing basketball to [be] an artist, to [be] a promoter online and it just grew from there. I always had that marketing strategy inside me and my school kind of just brought that out of me.
Gassam: What are some mistakes that companies make when it comes to branding and marketing to millennials?
Trill: I think companies are getting things wrong, first, inside the company itself. They’re hiring people that are not a part of the culture—that’s the first thing. Everything we see on TV is a copy. We’ve seen multiple videos, multiple commercials from our favorite influencers. The people that work in those places are copying exactly what the millennials are doing, instead of coming to us and collaborating with us and actually hiring us and giving us jobs…instead of paying an influencer, how about hiring an influencer? It should start inside.
Second…I call it ‘camouflage marketing.’ And what camouflage marketing is, is when you’re marketing something, but it’s not focused on the actual brand. So that could be merchandise, that could be accessories, that could be sponsorships, that could be a flash of your logo…I think they should focus more on that, and creating cool content…collaborations, collaborations, collaborations. As time goes on, a 13-year-old turns 21…you always have to change…you always have to connect with the millennials and with the new generation.
If you don’t do that, you’re going to be disconnected. Once you become disconnected, it doesn’t matter if you’re a million-dollar company or a billion-dollar company—you’re going to lose revenue dollars…that’s what I feel a lot of companies are missing. You don’t necessarily have to hire someone, like a kid, to be the CMO of your entire company, just a collaboration or maybe you can give them a smaller job where they are just over marketing strategies for Instagram…all you need is five millennials in the office space for Twitter and Instagram and you’re going to have a hundred thousand followers, a million followers and they’re going to run it all for you…they don’t need big budgets because they’re young kids and as time goes on and they start doing more for your company, you’ll be able to pay them anyway.
Gassam: What are some trends you anticipate on social media when it comes to millennial marketing?
Trill: Well…it’s always something new and something fresh…what I try to focus on is fast news and fast content. That’s where you’ll get most of the engagement and most of your following from. That’s how I grew my following originally. I was taking videos from YouTube and putting them on Twitter. I was taking videos from Facebook and putting them on Twitter because different platforms have different videos and different followings. Something that’s been posted on YouTube probably hasn’t been seen by the people on Twitter…Twitter, Instagram, Snapchat, Facebook, they don’t all have the same following.
Different people get on different platforms because they like the functionalities of that platform. Kids that are on TikTok might not necessarily be on Twitter. People that are on Snapchat might not necessarily use Instagram all the time. That’s what people fail to realize. Every single influencer, they may not have every single social media platform. That’s where a lot of people miss out on…Twitter is for news information and text. Instagram is for pictures. Snapchat is for, right there on-the-spot videos. Basically, live videos…TikTok, [for] six seconds dancing. You have to be creative…young kids are on [TikTok] all the way from eight years old all the way up to 21.
Gassam: So, companies need to learn that they can’t post the same social media content on every single platform and expect it to stick?
Trill: Exactly. They also have to use camouflage marketing. Using influencers, creating dope content that doesn’t necessarily have anything to do with their products. They can flash the product in between the content or at the end or the person that’s inside the content can actually say the product. It can be a one-minute music video and five seconds out of the music video, that artist is pouring cheerios…he’s not necessarily saying ‘I eat cheerios.’ Now the consumer and the person that is watching the content, they’re smarter now…they know what’s fake, they know what’s an ad now…with the rules and everything you even have to put ‘ad’ or ‘promo’. So now, when you put that, your engagement goes down even more…you have to do it in a camouflage sense.
Gassam: Is there a social media platform you would recommend companies use when marketing to millennials?
Trill: It depends on what their product or service is. If you’re selling merch, I would definitely say go with Instagram and YouTube. If you’re already a super known company, I would say go with Twitter because the engagement there reaches faster…you get more retweets, you get more favorites, more impressions. If you’re trying to sell anything, if you’re trying to become a brand yourself, if you’re trying to conquer a market, I would say use YouTube because Google owns YouTube and they create all [the] SEO that’s on the internet…when you search something like ‘how to dance,’ whoever made a video on ‘how to dance’ on YouTube, that’s what’s going to pop up for a search and that’s free marketing, free viewership for the person, influencers or brand that made that video. Now content is becoming the search. That goes for marketing and branding as well.
Gassam: How can companies stand out to millennials on social media?
Trill: They should be more direct with the consumer. The consumer is getting smarter because they’ve seen so much content, so they can tell if something is fake, something is real, something is being promoted and they won’t engage as much to it. If the consumer and the people that are selling products, if they intertwine and they come more direct with people that are in the communities…then that’s when you start getting more product sales and more distribution in your product. I wouldn’t buy anything that I’m not tapped into or that I didn’t see anyone else wearing.
iPhone is hot because everyone has an iPhone, not because it’s the best phone…they keep developing different products. They have apps, they have iTunes, they have podcasts…they’re tapped into every culture…they’re basically competing against themselves…subscription-based is what’s coming next. AR is coming next, virtual reality is coming next. And these are the things that these companies need to focus on…someone will always develop something new; someone will always come up with something that’s greater than the other platforms.
Gassam: Popeyes recently came out with a very successful marketing campaign for their new chicken sandwich. Should companies copy these campaigns in order to be successful? In regard to the millennial consumer, do you think controversy sells?
Trill: I wouldn’t say copy. But they should come up with their own strategy. Once you see something so much, you are making the consumer smarter. Your next marketing campaign is going to have to be harder.
I think controversy is always great…but if you’re deliberately doing things on purpose and expecting a great outcome, nine times out of ten, it might not go your way. But if you have a whole marketing strategy behind it and if you know exactly what you’re doing and where you’re trying to go, then it’s definitely going to work…we don’t have to pay for press.
This interview has been lightly edited for brevity and clarity.
To learn more about MarQuis, visit his website or connect with him on Instagram.
I grew up in five different states and across two continents, which was the catalyst to my interest in diversity. My ultimate goal is to help leaders infuse more love into the workplace, creating a culture that is more equitable and productive. Currently, I work as a professor at Sacred Heart University, teaching courses in management. In addition, I am a consultant, helping organizations create a more inclusive environment. I earned a Ph.D. in applied organizational psychology from Hofstra University, and I enjoy conducting research in the areas of diversity, equity, inclusion, hiring, selection, and leadership.
Orlando Bravo discovered his edge early. In 1985, at age 15, he traveled from his home in Mayagüez, Puerto Rico, a small town on the island’s western coast, to Bradenton, Florida, to enroll in the legendary tennis guru Nick Bollettieri’s grueling academy.
Bravo would wake at dawn, head to class at St. Stephen’s Episcopal School, then return to Bollettieri’s tennis courts at noon. He spent hours warring against peers like Andre Agassi and Jim Courier under the broiling sun. At sundown, after an hour to shower and eat, he would study, then retire to a sweaty, two-bedroom condominium in which players bunked four to a room like army barracks. Then he would do it all over again, six days a week, for a full year. “It was the tennis version of Lord of the Flies,” says his former roommate Courier.
The brutally competitive environment helped Bravo climb to a top-40 ranking in the U.S. as a junior. Then he peaked. “It was quite humbling,” recalls Bravo, who’s still fit from his weekly tennis games. “It was a different level of hard work altogether. It became clear I could operate at these super-high levels of pain.”
That grit and perseverance eventually propelled him to the top echelons of the private equity world. Few outside of finance have heard of the 49-year-old Bravo, but he is the driving force behind Wall Street’s hottest firm, the $39 billion (assets) Thoma Bravo.
In February, the French business school HEC Paris, in conjunction with Dow Jones, named Thoma Bravo the best-performing buyout investor in the world after studying 898 funds raised between 2005 and 2014. According to public data analyzed by Forbes, its funds returned 30% net annually, far better than famous buyout firms like KKR, Blackstone and Apollo Global Management. That’s even better than the returns from the software buyout firm Vista Equity Partners, its closest rival, run by Robert F. Smith, the African American billionaire who recently made headlines by paying off the college debt of Morehouse College’s entire graduating class. Since the beginning of 2015, Bravo has sold or listed 25 investments worth a total of $20 billion, four times their cost. His secret? He invests only in well-established software companies, especially those with clearly discernible moats.
“The economics of software were just so powerful. It was like no other industry I had ever researched,” says Bravo, seated in his office in San Francisco’s Transamerica Pyramid. He wears a tailored purple dress shirt and enunciates his words with a slight Puerto Rican accent. “It was just very obvious.”
Bravo’s firm has done 230 software deals worth over $68 billion since 2003 and presently oversees a portfolio of 38 software companies that generate some $12 billion in annual revenue and employ 40,000 people. Forbes estimates the value of the firm, which is owned entirely by Bravo and a handful of his partners, at $7 billion. Based on his stake in the firm and his cash in its funds, Bravo has a $3 billion fortune. Not only does that make him the first Puerto Rican-born billionaire, it’s enough for Bravo to debut at 287th place on this year’s Forbes 400 ranking of the richest Americans.
Like a good tennis player who’s worked relentlessly on his ground strokes, Bravo has made private equity investing look simple. There are no complicated tricks. He figured out nearly two decades ago that software and private equity were an incredible combination. Since then, Bravo has never invested elsewhere, instead honing his strategy and technique deal after deal. He hunts for companies with novel software products, like Veracode, a Burlington, Massachusetts-based maker of security features for coders, or Pleasanton, California-based Ellie Mae, the default system among online mortgage lenders, which the firm picked up for $3.7 billion in April. His investments typically have at least $150 million in sales from repeat customers and are in markets that are too specialized to draw the interest of giants like Microsoft and Google. Bravo looks to triple their size with better operations, and by the time he strikes, he’s already mapped out an acquisition or turnaround strategy.
The pool of potential deals is growing. On public markets, there are now more than 75 subscription software companies, worth nearly $1 trillion, that Bravo can target, versus fewer than 20, worth less than $100 billion, a decade ago. Investors around the world clamor to get into his firm’s funds, and lenders have checkbooks ready to finance his next big deal. “The opportunities today are the biggest I’ve ever seen,” Bravo says. “Right now we are in a huge, exploding and changing industry.”
Orlando Bravo’s isn’t a rags-to-riches story. He was born into a privileged life in Puerto Rico in the Spanish colonial city of Mayagüez, which for decades was the port for tuna fishing vessels supplying the local Starkist, Neptune and Bumble Bee canneries.
Starting in 1945, his grandfather Orlando Bravo, and later his father, Orlando Bravo Sr., ran Bravo Shipping, which acted as an agent for the massive tuna-fishing factory ships entering the port in Mayagüez. It was a lucrative business. His parents moved him and his younger brother Alejandro to what’s now a gated community in the hills of Mayagüez, where the brothers attended private schools and tooled about on the family’s 16-foot motorboat.
After taking up tennis at age 8, practicing on the courts of a local university and a Hilton hotel, Bravo and his family began making the two-and-a-half-hour drive from their home to San Juan on weekends to allow him to train against better competition. “What I loved about tennis was the opportunity,” he recalls. “I’m from Mayagüez, and I’m going to come to the big city and I’m going to make it,” he says. “Let’s go! The underdog!”
He quickly became one of Puerto Rico’s top players, which landed him at Bollettieri’s academy and then on Brown University’s tennis team. “I was so scared I wouldn’t make it through,” Bravo says of the Ivy League, so he took most classes pass/fail as a college freshman. But he quickly found his footing and graduated Phi Beta Kappa in 1992 with degrees in economics and political science. That helped him get a prestigious job as an analyst in Morgan Stanley’s mergers and acquisitions department. There he paid his dues, clocking 100-hour weeks under the renowned dealmaker Joseph Perella.
“I learned I didn’t want to invest in risky things ever again. It was too painful.”
Bravo’s Spanish fluency put him in front of clients as other analysts slaved away in data rooms. Working on Venezuelan billionaire Gustavo Cisneros’ 1993 acquisition of Puerto Rican supermarket chain Pueblo Xtra International opened his eyes to the world of buyouts. But mostly he says he learned he didn’t want to be a banker.
Bravo eventually headed west to Stanford University. He’d already been accepted into its law school, but he also wanted to attend the business school. He called insistently and eventually got accepted to pursue both. He worked during a summer at Seaver Kent, a Menlo Park, California-based joint venture with David Bonderman’s Texas Pacific Group that specialized in middle market deals. Upon graduation in 1998, Bravo wasn’t offered a position there or at TPG, and he spent months cold-calling for a job. After about a hundred calls, Bravo’s résumé caught the eye of Carl Thoma, a founding partner of the Chicago-based private equity firm Golder, Thoma, Cressey, Rauner (now known as GTCR), and they hit it off. “The biggest mistake Texas Pacific made was…that they didn’t make him a job offer,” says Thoma, 71, who Forbes estimates is also a billionaire based on an analysis of public filings.
One of the pioneers of the private equity industry in the 1970s, Thoma is a tall and mild-mannered Oklahoman whose parents were ranchers. Thoma and his partners practiced a friendlier version of the buyouts popularized by Michael Milken, preferring to buy small businesses and expand them using acquisitions. When Bravo came aboard in 1998, Thoma and partner Bryan Cressey had just split from Stanley Golder and Bruce Rauner, who later went on to become governor of Illinois, creating Thoma Cressey. Thoma sent Bravo to San Francisco to hunt for investments and eventually expand the firm’s Bay Area presence.
Bravo’s first few deals, struck before he turned 30, were disasters. He backed two website design startups, NerveWire and Eclipse Networks, just as the dot-com bubble popped. The two lost most of the $100 million Bravo invested. “I learned I didn’t want to invest in risky things ever again,” Bravo says. “It was too painful to live through.” Thoma Cressey was also struggling elsewhere, with underperforming investments in oil and gas and telecommunications. It was among the worst performers in the private equity industry at the time.
“Every time we picked up our heads to peek at a deal that wasn’t software, the software deal looked a lot better to us.”
But the failure led to an epiphany that soon made Bravo and his partners billions. He realized his mistake was in backing startup entrepreneurs, an inherently risky move, when for the same money he could buy established companies selling niche software to loyal customers. With Thoma’s blessing, Bravo pivoted and became an expert on these arcane firms. Coming out of the dot-com bust, the market was littered with foundering companies that had gone public during the bubble and had few interested buyers. Bravo got to work. His first big move, in 2002, was to buy Prophet 21, a Yardley, Pennsylvania-based software provider to distributors in the healthcare and manufacturing sectors that was trading at a mere one times sales.
Rather than clean house, Bravo kept the company’s CEO, Chuck Boyle, and worked beside him to boost profits, mainly by rolling up competitors. When Boyle wanted to buy a company called Faspac, Bravo flew to San Diego to work out of the Faspac owner’s garage for five days, analyzing reams of contracts to see if the deal would work. “Orlando would help not only at the highest level with strategy but also when we got grunt work done,” Boyle recalls. After seven acquisitions, Bravo sold the business for $215 million, making five times his money.
Software quickly became Bravo’s sole focus, and Thoma Cressey began to thrive. By 2005, Bravo and Thoma had recruited three employees, Scott Crabill, Holden Spaht and Seth Boro, to focus on software applications, cybersecurity and Web infrastructure. All remain with the firm today as managing partners.
Bravo’s big opportunity came during the financial crisis when Thoma put Bravo’s name on the door and split with his partner Bryan Cressey, a healthcare investor, creating Thoma Bravo. From that moment on, the firm invested only in software, with Bravo leading the way.
A string of billion-dollar buyouts followed—Sunnyvale, California-based network security firm Blue Coat, financial software outfit Digital Insight of Westlake Village, California, and Herndon, Virginia’s Deltek, which sells project management software—all of which more than doubled in value under Bravo’s watch. The firm’s inaugural 2009 software-only fund posted a 44% net annualized return by the time its investments were sold, making investors four times their money and proving the wisdom of discipline and specialization. “Every time we picked up our heads to peek at a deal that wasn’t software, the software deal looked a lot better to us,” he brags.
It’s late May, and Orlando Bravo’s 20th-floor offices overlooking the San Francisco Bay are filled with dozens of tech executives from its portfolio companies. Folks from Houston’s Quorum Software, which makes technology systems for oil and gas companies, mingle with cybersecurity experts from Redwood Shores, California’s Imperva. They juggle their rollerboard suitcases and thick financial books as Thoma Bravo partners map out corporate strategies on dry-erase whiteboards. Those on break hammer away at keyboards in small workrooms or demolish chicken sandwiches in a no-frills kitchenette.
This is one of Thoma Bravo’s monthly boot camps for new acquisitions, grueling daylong sessions that are critical to its success. Partners regularly buzz into Bravo’s spartan glass-walled offices, while in the background the drilling and hammering of construction workers making room for 13 new associates disturbs the peace.
With a fresh $12.6 billion war chest, Bravo is now eyeing $10 billion-plus deals and expects to begin buying entire divisions of tech giants.
After two decades studying software, Bravo recognizes clear patterns. For instance, when a company pioneers a product, its sales explode and then inevitably slow as competitors emerge. Often a CEO will use this cue to stray into new markets or overspend to gin up sales. Bravo calls this “chasing too many rabbits.” To fix it, he and his ten partners work alongside 22 current and former software executives who serve as consultants. They begin tracking the profit-and-loss statements for each product line and pore over contracts in search of bad deals or underpriced products. Critically, by the time a Thoma Bravo acquisition check clears, existing management has agreed that this rigorous approach will help. Bravo calls it “making peace with the past.”
There are also layoffs. Those can total as much as 10% of the workforce, for which Bravo doesn’t apologize. “In order to realign the business and set it up for big-time growth, you first need to take a step back before you take a step forward. It’s like boxing,” he says. “These are unbelievable assets with great innovators, and they are usually undermanaged.”
Mark Bishof, the former CEO of Flexera Software, an application management company outside of Chicago that Bravo bought in 2008 for $200 million and sold for a nearly $1 billion profit three years later, has a succinct description for this wild success. “He just kind of cuts all of the bullsh*t,” Bishof says. “It’s refreshing.” Flexera’s profits rose 70% during Bravo’s ownership, largely thanks to four major acquisitions. “Orlando’s like the general in the foxhole with his sergeant. You know he’s knee-deep in there with you,” Bishof gushes.
Under Thoma Bravo’s watch, companies on average saw cash flow surge as margins hit 35%, as of 2018, nearly triple those of the average public software company at that time. “It’s like training for the Olympics. . . . You have a finite goal to make it [in year four], and you make it very, very clear,” Bravo says. Today’s roaring market adds potency to the playbook. Lenders are now gorging on software debt, and stock market multiples for these businesses are surging.
“I learned more about building an efficient software company over the last four and a half years than in the first 30 years of my career.”
A recent example is Detroit’s Compuware, a decades-old pioneer of software applications to manage mainframe computer systems. In 2013, this Nasdaq-listed giant was all but left for dead and up for sale. There was minimal interest, other than from Bravo and partner Seth Boro, who were keen on Dynatrace, software that helped companies move databases to the cloud, which Compuware had acquired in 2011. Thoma Bravo used $675 million in cash and raised $1.8 billion in debt to buy Compuware and then split off Dynatrace as a separate company. The pair began to move Dynatrace from selling database licenses, once the bulk of its business, to cloud subscription services, now 70% of sales. This past August, Dynatrace went public, and Thoma Bravo’s 70% stake is now worth over $4 billion, with the remainder of Compuware worth nearly a billion more. “I learned more about building an efficient software company over the last four and a half years than in the first 30 years of my career,” says Dynatrace CEO John Van Siclen.
With a fresh $12.6 billion war chest for its 13th fund raised in 2018, Bravo is eyeing $10 billion-plus deals and expects to begin buying entire divisions from today’s technology giants. But thanks in part to the success of his firm, he now faces more competition. Heavyweights like Blackstone and KKR are increasingly sussing out software deals, not to mention his longtime rival Vista Equity. And he’s not immune to mistakes. Bravo’s $3.6 billion 2015 acquisition of San Francisco-based digital network tracker Riverbed Technology is currently struggling because of slowing sales and too much debt. He isn’t worried. “There are bigger and better companies to fix than there were ten years ago,” Bravo says.
His biggest challenge these days is likely back home in Puerto Rico where it all began. Bravo announced in May that he is contributing $100 million to his Bravo Family Foundation that will be used to promote entrepreneurship and economic development on the island.
This new foundation was birthed by Hurricane Maria, which devastated the island two years ago. Bravo was in Japan raising cash for yet another massive fund and frantically calling San Juan trying to locate his parents, who were living in the capital. They were fine, but the island wasn’t.
Five days later, he flew his Gulfstream jet with 1,000 pounds of supplies—water, granola bars, meal kits, satellite telephones, diapers, intravenous tubes and hydration pills—to Aguadilla, near Mayagüez. When an airport worker opened the door of his plane, Bravo says, the look of fear on his face was unforgettable. “All you could say was ‘I’m sorry for what happened to you.’ ”
He returned two weeks later in a larger plane with 7,000 pounds of supplies. Then he came in a massive DC-10 cargo plane before ultimately chartering two container ships carrying 600,000 pounds. “It was just like cold-calling for deals,” Bravo says of rounding up all the donations. He personally put in $3 million in just the first 30 days, and committed $10 million altogether.
When the Federal Emergency Management Agency became fully operative there, the island’s richest native turned his attention to Puerto Rico’s future. Though 44% of Puerto Ricans live below the poverty line, Bravo believes in the potential to foster entrepreneurship, citing that a tenth of the population has tried to build a business.
Armed with his money, his foundation is looking to back Puerto Rican technology entrepreneurs, even ferrying them to Thoma Bravo’s offices for training. Bravo admits to being tired of the debate over Puerto Rico’s statehood and holds his tongue when asked about President Trump’s performance during Maria. “My passion, which is the same as with companies, is to move beyond the strategic, long-term pontification, and into the operational and tactical moves that make you move forward today,” he says. “Economies go down, companies miss their numbers, trade stops, product issues happen and people quit. [The question is] do you have a creative approach to problem solving?” Bravo says. “Some people are stuck . . . and some people love putting the pieces together. I just feel like every operational problem can be solved. There’s always a solution.”
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I’m a staff writer at Forbes, where I cover finance and investing. My beat includes hedge funds, private equity, fintech, mutual funds, M&A and banks. I’m a graduate of Middlebury College and the Columbia University Graduate School of Journalism, and I’ve worked at TheStreet and Businessweek. Before becoming a financial scribe, I was a part of the fateful 2008 analyst class at Lehman Brothers. Email thoughts and tips to email@example.com. Follow me on Twitter at @antoinegara
Orlando Bravo, managing partner of Thoma Bravo and founder of the Bravo Family Foundation, https://www.bravofamilyfoundation.org/, announced he personally will contribute $100 million to his foundation to promote entrepreneurship and economic development in Puerto Rico, where Bravo was raised, and his family still lives.
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.
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.
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.
Billionaire John Gokongwei’s Robinsons Retail Holdings Inc. is considering an exit from the fashion business as it struggles to compete with cheaper, faster chains like Fast Retailing Co.’s Uniqlo. Stock jumps to three-week high.
The Filipino retail giant, whose fashion portfolio includes the Topshop and Dorothy Perkins brands, instead sees better returns from pet, health and beauty products where demand is growing, said Chief Executive Officer Robina Gokongwei-Pe in an interview.
“We are shrinking fashion, for it has become very difficult,” Gokongwei-Pe said. “There are other brands that came in who are more progressive and cheaper. We are already reducing the number of stores and we have to think if we move out altogether.”
The Manila-based company is relooking its business as it faces shrinking operating margins and growing competition in the low-cost space. It’s pivoting into wooing higher-spending consumers by entering into the premium grocery market, as well as expanding foreign franchises in beauty products and pet care, hoping to achieve 15% revenue growth annually for the next five years.
“Pets have become very big,” said Gokongwei-Pe. “Dogs now are very spoiled. Just look at Instagram and Facebook, it’s all about dogs. You should put money where the money is, which is food, drugstores, hardware, and growing businesses like pets and beauty.”
Robinsons Retail’s fashion portfolio has contracted to six brands and 40 stores at end-2018 from nine brands with 60 stores in 2014. Fashion is among the company’s specialty shops, which were cut to 341 in March from 387 at end-2018.
The company in December bought the local franchise for South Korean personal care and beauty products retailer Arcova and Club Clio, adding to 15 stand-alone stores selling Elizabeth Arden, Shiseido and Benefit Cosmetics. It also procured the license for Singapore’s Pet Lovers Centre in October and plans to open a second outlet as early as this year.
“Robinsons Retail is deploying its capital in a way that promises more growth,” said Miguel Ong, analyst at AP Securities Inc. “Fashion isn’t attractive as before with the rise of online platforms and brands like Uniqlo dominating the market.”
Under a five-year plan targeting mid-to-high teen revenue growth, Robinsons Retail will spend between three billion pesos ($59 million) and five billion pesos to add 100 to 150 stores a year, according to Gokongwei-Pe. The retailer has 1,911 stores in various formats, excluding 1,960 outlets of its The Generics Pharmacy.
Revenue contribution from supermarkets will rise to 55% this year from 47% in 2018 after its acquisition of former rival Rustan Supercenters, whose 36 supermarkets cater to affluent shoppers. Robinsons Retail’s own 160 supermarkets cater mainly to mainstream consumers.
The acquisition and other new stores will improve gross profit margin by 10 to 20 basis points this year, said Gokongwei-Pe.
Operating margin, which fell below 5% in 2018, will shrink further due to write-offs related to the Rustan purchase. It will “definitely” improve in 2020, when the integration is completed, she said.
A foreign executive has been hired to manage Mini Stop, which has potential to double its 5% sales contribution in 2018, if the convenience stores are “scientifically” ran.
Robinsons Retail is considering creating its own e-commerce app for its supermarkets to fill the gap left by Honestbee’s closure in the Philippines. It may start from scratch or expand Growsari Inc., a grocery delivery service for mom-and-pop stores.
The closure of Honestbee caused a dip in supermarket sales and will impact this year’s performance as same-store sales growth could have been 4.2% to 4.5% instead of 3%.
Justin McCurry doesn’t like much on his schedule. At most, he sets one thing to do a day. On Monday, that might be volunteering. On Wednesday, it’s likely grocery shopping. On Friday, there’s a good chance he’ll be playing tennis with his wife.
The rest of the time? It’s up to him. Pursuing a hobby, playing video games, doing yard work. It’s not the typical schedule for a 39 year-old with three kids. But that’s what McCurry has done since officially retiring as a transportation engineer in 2013.
In about a decade, he and his wife, Kaisorn, saw their portfolio balloon from a few thousand dollars to $1.3 million, yet neither of them had a job that paid close to six figures. And what’s particularly unusual about McCurry’s journey: He never had a passive income stream – other than his investment portfolio – that helped buffer his paycheck, boosting his ability to save. Instead, he did it all through cutting back and finding intelligent ways to squeeze savings, without sacrificing his lifestyle.
“I realized I had more paycheck than expenses,” said McCurry. “I just knew that saving money was probably a good thing,” as he tried to figure out what to do with the leftover funds each month.
When bloggers and FIRE (financially independent, retire early) voices talk about stepping away from the day job in their 30s and 40s, it’s also often coupled with side gigs that bring in dough, such as real estate or businesses that they built. It serves as a much-welcomed security blanket when managing a retirement that could stretch 50 years or more. For McCurry, though, it wasn’t about passive income streams or growing a sizable real estate portfolio. From 2004 to 2013, he and his wife lived on one income while essentially stashing away the other.
In the meantime, they had three kids, bought a house and have traveled the world.
Don’t Get Overwhelmed by the Size of It All
When McCurry first started saving, he looked at how long he would need to retire, and came up with a number that would let him step away from the job 20 years later. Even though he never was a big spender, the number seemed daunting.
“Knowing I would have to chug away for a decade or two,” said McCurry, “it’s almost like a pie in the sky.”
It made it difficult for him to see the benefits at first because that number was so large and the timeframe so long. This isn’t much different than when people set out for retirement on 40-year timeframes.
Researchers have found that the more someone connects with their future-self, meaning can view their future self with the same empathy and concern as their current self, the more they will save.
This ability to connect with the future self may be easier on this shortened timeframe. But it’s not guaranteed.
For McCurry, it became easier to handle as he continued to refine his plan, saving more than he and his wife ever expected they could. Then, after a few years, he started seeing the impact of compound interest.
He would place around $60,000 in the portfolio in a year, while the investments would return $100,000. McCurry soon realized that his 20-year plan had shrunk in half.
Cut Your Taxes
One of the most important ways McCurry saved was on taxes. At one point, he took the family’s joint income of $150,000, and managed to realize a tax hit of just $150.
His wife maxed out her 401k as well, while also doing the same in a health savings account and a flexible spending account. He then used a series of deductions, from the standard one to exemptions to child credits to reduce that income line to $28,950, leaving just a $150 tax liability.
McCurry took the approach that the tax breaks providing a discount to his savings. At the time, he would invest around $60,000 a year in tax-advantaged accounts. With that money, he locked in about $15,000 in tax breaks. That $60,000 investment, in actuality, only cost him around $45,000 if you count the tax break.
“It’s a little easier to save $45,000 versus $60,000,” McCurry said.
Design For the Worst Case Scenarios
One reason that McCurry’s timeframe shifted from 20 years to 10, despite lacking an additional income source, was simply because of the amount of buying he did when times looked bleak in 2007 through 2009.
He’s not like many in the FIRE world, constantly checking the portfolio, feeling the joy as the dollars increased, bringing him one step closer to quitting the day job. Instead, he mostly checks the accounts once a quarter, figuring out where he stands and if he needs any adjustments to his contributions.
“The last quarter in 2007, I noticed huge drops in our net worth,” remembered McCurry.
It didn’t deter him.
“I put as much as I could into the stock market each month, knowing I’m buying these shares at half or a third from where they were,” he added. “It was a buying opportunity of a lifetime.”
When the stocks began to turn in 2009, then his net worth went into hyper-drive. Since stepping away with $1.3 million, he’s now worth over $2.1 million, largely due to the fact that he now earns a little income from his blog, RootofGood.com (which means he doesn’t have to tap as much investment income) and the performance of his investments through a decade-long bull run.
But McCurry is savvy enough to realize the market will pull back at some point.
That’s where he taps his engineering muscle. As an engineer, you always prepare for the worst-case scenario. If what you’re building works under that scenario, then it will work, theoretically, in all other cases. When he looks at his portfolio, if the market drops 40%, then it would reach the levels he started with when he first retired.
He might spend a little less, but with a 3.25% rate of withdrawal from his investments, his family would be “totally fine,” he said.
A Berkshire Hathaway shareholder arranges her shopping next to a large drawing of Chairman and CEO Warren Buffett, during a shareholders shopping event in Omaha, Neb., Friday, May 3, 2019, one day before Berkshire Hathaway’s annual shareholders meeting. An estimated 40,000 people are expected in town for the event, where Chairman and CEO Warren Buffett and Vice Chairman Charlie Munger will preside over the meeting and spend hours answering questions. (AP Photo/Nati Harnik)
Berkshire Hathaway’s shareholders’ meeting as in past years yielded various insights on Warren Buffett’s and Charlie Munger’s insights on the markets, politics, tech stocks, past mistakes and many other topics.
Further Buybacks On The Cards
It should come as no surprise that Buffett and Munger are considering further buybacks of Berkshire stock. With a large, and growing, cash pile and limited deal opportunities to date, they are likely to use cash to repurchase Berkshire shares as the fallback option. In fact, the pair used answers to certain questions, such as regarding Brexit in the U.K. to remind the audience that they are very willing to make acquisitions in Europe should they see the right deal at the right price. They feel that Berkshire is typically considered for deals in the U.S.. Yet, internationally they have more work to do to have Berkshire in consideration for a large business sale. Still, the emphasis on buybacks suggests that there is little in the deal pipeline for now, though of course that could change quickly. Buffett and Munger would love to see more attractive deals, but absent attractive opportunities, stock buybacks are the default.
Another Bite Out Of Apple?
Buffett and Munger were both very positive on current holding Apple, and Apple CEO Tim Cook was also at the event. It seemed clear that Buffett was quite willing to up his Apple stake at the right price.
Various objections such as potential regulation of Apple’s app store were raised in questions, though Buffett didn’t dismiss those concerns entirely, he mentioned that what has hurt the most is that the stock has gone up. That, the CEO’s presence and the fact that Buffett didn’t go out of his way to make the detailed bull case on Apple all suggest he make be angling to up his stake at the right price, even though Apple is currently Berkshire’s second largest public holding behind Coca-Cola.
A More Flexible Approach To Value Investing
Over his lifetime, Buffett’s investing approach has evolved and it continues to. In his early years, Buffett loved buying so-called cigar butt stocks, as popularized by his early mentor Ben Graham. This means stocks that may have been poor companies, but were trading well below the value of assets that could be sold realizing a profit for investors. Such deals are harder to come by now. As such Buffett looks more for great businesses at reasonable prices, a direction that Munger has clearly prodded him in. However, now Buffett talks of value investing in broader more creative terms, such that any stock where the likely expected cashflows exceed the price can be attractive, even if not cheap in on the traditional metrics and ratios associated with value investing.
So though Buffett’s approach continued to be refined, its core principles remain the same in looking for great businesses at attractive prices with sound management in place. In reviewing Buffett and Munger’s comments, one is left with the feeling that they are seeing few bargains in this market and buybacks paired with watching and waiting for certain key holdings such as Apple to fall so they might add more is the current strategy. Aside, from the comments at the meeting, the fact that the company is sitting on over $100 billion of cash and short-term securities at the end of 2018 reinforces that Buffett and Munger aren’t seeing the opportunities they would hope for in the current environment.
Articles educational only, not intended as investment advice.
Mark Zuckerberg has had plenty of difficult days in the past year, but this past week was a good one for him. The Facebook CEO’s net worth jumped $5.5 billion in the week through Thursday April 25, mostly due to investor glee about the $2.4 billion in first quarter profit that the social media firm reported on Wednesday.
The 34-year-old is worth $71.3 billion, $20 billion more than at the beginning of 2019. He is now the 5th richest person in the world, up from No. 8 in March when Forbes published the annual world’s billionaires list. The positive quarterly earnings report overshadowed news that Facebook is setting aside as much as $5 billion to pay a fine to the Federal Trade Commission over privacy issues.
Zuckerberg’s gain was by far the biggest of the week, but he is in good company. The fortunes of Zuckerberg and four other tech billionaires, including Amazon’s Jeff Bezos, rose by a collective $13 billion in seven days.
A day after Facebook released its first-quarter earnings report, Amazon announced a quarterly profit of $3.6 billion, an all-time record for the e-commerce giant. Amazon’s share price rose 2.2% in the week through Thursday, causing Bezos’ net worth to surge by $3.2 billion. The 55-year-old CEO, who owns a 16% stake in Amazon, is now worth $157.8 billion.
Bezos announced earlier this month that he will transfer approximately 4% of the company’s stock to his wife, MacKenzie, as part of their divorce settlement, which is expected to be completed around early July. Jeff Bezos would still be the world’s richest person while MacKenzie will become the third-richest woman.
The net worth of Steve Ballmer, Microsoft’s former CEO, rose $1.7 billion in the week through Thursday as the software giant’s share price increased by 4.7%. Microsoft smashed earnings estimates with a quarterly revenue of $30.6 billion, boosted by its commercial cloud business, which has grown 41% year-over-year. Ballmer, Microsoft’s largest individual shareholder, is now worth $48.3 billion. Cofounder and former CEO Bill Gates only owns just over 1% of shares, having sold or given away most of his stake in Microsoft, but the stock uptick did bump his net worth by $600 million.
Michael Dell, chairman and CEO of Dell Technologies, is now worth $40 billion after gaining $1.4 billion in a week due to a 6.6% stock uptick. Last December, the computer maker returned to the public market six years after Dell took the company private. Dell Technologies’ market capitalization was $46.7 billion as of end of day Thursday, up from its $34 billion listing. Dell’s net worth has nearly doubled over the past 12 months.
Larry Page, the cofounder of Google and CEO of its parent company Alphabet, got $1.1 billion richer, with an estimated fortune of $57.6 billion. Shares of Alphabet, which will report its first-quarter earnings after the closing bell on Monday, have increased 2.2% since last Thursday. It has been a busy week for Alphabet’s “Other Bets.” Wing, which became an independent Alphabet business last summer, recently got approval from the Federal Aviation Administration to deliver goods by drone. Wing plans to start drone deliveries in Blacksburg, Virginia, later this year. Loon, which uses high-altitude balloons to provide internet access to remote areas, raised $125 million from a SoftBank subsidiary on Thursday.
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Capital Today founding partner Kathy Xu laughs when she talks about her career-making early investment in Chinese e-commerce company JD.com, which began with a late-night meeting with founder Richard Qiangdong in 2006:
“We met at 10 p.m. and we talked until 2 a.m.!” she tells Forbes. “I gave him five times the amount of money that he asked for — I was so worried that otherwise he’d meet with other investors.”
Capital Today managed to become the startup’s sole Series A investor and Xu’s check — $18 million USD — paid off royally as JD swelled into an ecommerce giant, with Xu working closely with Qiangdong along the way, advising him on key hires and company branding. Two years after JD went public in 2015, her firm cashed out returns of $2.9 billion.
A couple years and a handful of new deals later, Xu is making her bold debut on the Forbes 2019 Midas List, ranking in the top 10 venture capitalists in the world in her first year of inclusion (her work has previously been highlighted on Forbes China’s list of top 25 women venture capitalists in China).
This year’s list features 21 investors who are either of Chinese nationality or work for a firm based in China, the largest number ever on the list and a tribute to the growing power of China’s startup and venture capital ecosystems.
Xu says that Capital Today, which manages approximately $2.5 billion, focuses all its energy on companies based in and serving China and has zero interest in looking outside the country.
“It’s a big enough market, the economy is doing well, the entrepreneurship is great, and we’re starting to see real innovation booming for the first time,” she says. “It’s a lucrative market to focus on.”
Xu says that her team disciplines itself to only five or six deals a year in business-to-consumer companies and spends a lot of time with founders that it invests in.
“There’s more and more money here now, so building a connection with the entrepreneur and spending a lot of time with them is more important than ever,” she says, citing proximity as an advantage over out-of-country investors who only make occasional business trips.
Beyond JD.com, other Capital Today portfolio highlights include Chinese gaming company NetEase, discount e-commerce site Meituan-Dianping, classified listings site Ganji.com (which merged with 58.com in 2015), Yifeng Pharmacy, which went public in 2015, and hot snack company Three Squirrels Snack Food.
Other Chinese investors who made this year’s Midas list are Sequoia China partner Neil Shen, who topped the rankings for the second year running, Qiming Venture Partners’ managing partner J.P. Gan, No. 5, and Hans Tung from GGV Capital, No. 7.