And greetings from Sun Valley, where I’m attending a special event for entrepreneurs called the Tugboat Institute Summit. The Tugboat Institute was started by Dave Whorton, once a prominent Silicon Valley venture capitalist and now a confirmed believer that companies should be built to last—100 years even—and not to flip or take public. He’s attracted an impressive array of like-minded entrepreneurs who converge, pandemic permitting, every June in Sun Valley, Idaho. As a result, this newsletter will be a little light on items today, but I’ll have lots of great stuff to share in the days to come.
Mars says it has built a tool that measures engagement with ads and has lifted sales as much as 18 percent: “Mars says it's solved the problem [of breaking through the clutter and getting attention] with a new tool called Agile Creative Expertise (ACE) that tracks up to 150 people's emotional and behavioral reactions to its digital ads and is helping save millions while driving sales. The proprietary tool uses tech like EEG, biometrics, and eye tracking along with artificial intelligence to measure things like how long people watch a video ad and how their attention changes as they watch them.”
“ACE gives ads one to four stars based on criteria like how much emotion and attention they elicit, with four stars denoting exceptional engagement.”
“It's also meant to ensure that these attention and emotion levels actually drive sales, based on Mars' internal benchmarks developed with partners including Nielsen, YouTube TrueView, and Realeyes.” READ MORE
Amazon’s subscription service, Prime, is it’s greatest invention. Should it be canceled? “Prime is the financial engine keeping Amazon’s fulfillment-and-delivery machine running, and also the argument for its existence. If consumers don’t expect packages in 24 hours, there’s no reason to require workers to scan a new one every 11 seconds until their discs bulge. But those expectations—and their costs—are bigger than Prime, or even Amazon, because Amazon is so big that every sector of our economy has bent to respond to the new way of consuming that it invented. Prime isn’t just bad for Amazon’s workers—it’s bad for Target’s, and Walmart’s.”
“It’s bad for the people behind the counter at your neighborhood hardware store and bookstore, if your neighborhood still has a hardware store and a bookstore.”
“Amazon has accustomed shoppers to a pace and manner of buying that depends on a miracle of precision logistics even when it’s managed by one of the biggest companies on Earth. For the smaller guys, it’s downright impossible.” READ MORE
Bumble, the dating app, is trying to combat burnout by giving its entire staff a week off: “The move, aimed at combating burnout, grants vacation time to Bumble's more than 750 employees in Austin, Texas, Moscow, London, Barcelona, Spain, Sydney and Mumbai, India. ‘As vaccination rates increase and restrictions ease, we wanted to give our global teams a paid week off to rest and refresh after what’s been an incredibly challenging time for everyone,’ a Bumble spokesperson said in an email to NBC News. Employees for the app, which bills itself as a ‘woman-first dating app’ — only women can initiate conversations after a match has been made — will resume work June 28.” READ MORE
Existing-home prices hit a record in May: “U.S. home prices in May experienced their biggest annual increase in more than two decades, as a shortage of properties and low borrowing rates fueled demand. The median existing-home sales price in May topped $350,000 for the first time, the National Association of Realtors said Tuesday. The figure was nearly 24 percent higher than a year ago, the biggest year-over-year price increase NAR has recorded in data going back to 1999. Sales prices have been climbing sharply since last summer, when lockdowns related to the Covid-19 pandemic eased across the country and many people rushed to find more space and bigger homes. Others working remotely seized on the chance to move to a less expensive city.”
“The price increase is contributing to a slowdown in the pace of home sales. Existing-home sales fell 0.9 percent in May from April, marking the fourth straight month of declining sales, NAR said.” READ MORE
Warehouse rents are surging and even attracting bidding wars: “The U.S. warehouse market is starting to look like the red-hot housing sector, as companies jockey for scarce distribution space to meet surging e-commerce demand. The competition is driving up industrial rents as retailers and logistics providers race to move goods closer to population centers, with some engaging in bidding wars for the most coveted sites. Businesses are pushing to deliver online orders faster to the homes of digital shoppers and responding to growing consumer spending that is helping drive an economic rebound.”
“Prices are rising at a particularly strong rate for logistics space near ports and cities, and for big-box warehouses such as those used in large online fulfillment operations.”
“First-year base rents in Northern New Jersey jumped by a third year-over-year through May, while those in Southern California’s Inland Empire rose 24.1 percent, according to CBRE.” READ MORE
Amazon and other tech giants are racing to buy up renewable energy sources: “The race to secure electricity deals for power-hungry data centers has tech companies reshaping the renewable-energy market and grappling with a new challenge: how to ensure their investments actually reduce emissions. Amazon.com said it planned Wednesday to announce commitments to buy 1.5 gigawatts of production capacity from 14 new solar and wind plants around the world as part of its push to purchase enough renewable energy to cover all of the company’s activities by 2025. Tech companies are wielding their balance sheets to finance solar, wind and other renewable-energy projects on an unprecedented scale.”
“In some countries, developers say tech companies’ willingness to spend upfront—signing commitments to buy energy at a certain price for long periods—has helped make corporations more important than government subsidies as the main drivers of renewable investment.” READ MORE
Here’s a quick update on a few things I’ve been working on at 21 Hats: First, we are exploring partnerships with companies that want to reach our audience. In recent months, we’ve been hearing from some of you who have asked about ways to include your messaging in our newsletter, podcast and newly designed website. We have created a few programs that we think will provide value to our readers and help 21 Hats generate revenue so we can expand our coverage and offerings.
Along those lines, I’m delighted to introduce Randy Davidson, who is based in Atlanta and has built several digital media companies. Randy will be in charge of strategic partnerships at 21 Hats. He’s also helping me plan an event to bring our followers together—in person—for a 21 Hats In The Trenches Summit to be held in October in New York City. We are seeking sponsors and supporters for the event, which will feature a podcast taping, interviews with entrepreneurs, and the opportunity to connect with others in the 21 Hats community.
Please let us know if you are interested in learning more about how we can help your company engage with our audience and how you can help us support entrepreneurs.
THE 21 HATS PODCAST
Episode 65: This Is Where We Get Into Therapy: Once again this week, our business owners discuss things business owners don’t often talk about in public. Laura Zander says she feels guilty about taking vacations, about making more money than her employees, and about knowing that her husband is closer to their son than she is. Paul Downs says he recently reviewed 29 years of P&Ls and was reminded that he lost money in 18 of those years. He also explains why he routinely tells his employees (and us) precisely how much money he takes out of his business. Jay Goltz, meanwhile, says he’s now embarrassed to be called a CEO and acknowledges that he’s thought maybe he should have worked 20 percent less while building his business, but isn’t sure if that would have resulted in 20 percent less revenue or perhaps 100 percent less revenue. This week, we also set a podcast record for use of the phrase, “Oh, my God!”
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