News and insights from around the Web:
Startups
If JPMorgan had been better run, Carolyn Rodz never would have started her network for women entrepreneurs: "In spite of my mental commitment, and the hours I poured into 'the Bank,' as we called it, because in our minds it was the only one, I found my career stagnate. I was told in an annual review that I needed more 'swagger.' When I raised my hand to be included in more senior level meetings, I was challenged to set some up and then I’d be invited to attend. After securing two meetings with CFOs at large public companies, I was told the only reason they had agreed to meet was because they probably didn’t have the heart to reject a girl. When my female colleague and I would talk about anything unrelated to work, we’d be asked to move our sorority meeting elsewhere. Never mind that the men poured through every sports stat on a daily basis in that very space. There were countless lunches, dinners, and even strip club outings where every single man in our group would get up and leave together, unannounced, while I’d stay behind with the admins because there were no other women around. I could go on an on, but you get the gist."
Finance
What the Elizabeth Holmes scandal says about Silicon Valley: "Plenty in Silicon Valley see what Theranos did as a blight on the industry itself. 'It’s on her, it’s on the company, it’s on the investors, and the board members who didn’t ask any of the right questions,' one Silicon Valley investor told me. 'Or, evidently, any questions at all.' Another tech investor was more direct. 'The race to be the biggest, in an environment that rewards taking chances [and] breaking rules can tempt people to do things they normally wouldn’t do,' they said. 'If what she’s been charged with is true, she’s a criminal who should be in prison."
Are there other companies like Theranos out there? "Buried within the SEC's legal complaint, filed in federal court in San Jose, are indications that there may be many more companies just like Theranos still collecting money from investors — firms with an intriguing pitch, a credulous media claque, a business plan that makes secrecy sound like a virtue, and an appealing leader with unassailable corporate control. Not all these companies are engaged in fraud, mind you. But many are traps for unwary investors — even ostensibly savvy and experienced investors. Many also are empowered by the lax regulations in the capital markets, some of which have been mandated by Congress, and some the result of a permissive attitude by securities exchanges eager to attract new companies as issuers. Take the 2012 JOBS Act, in which Congress pared back disclosure requirements for 'emerging growth companies,' defined as those with less than $1 billion in revenues in their latest fiscal year. The act allows these companies to provide the public with skimpier audited financial data and information about executive pay than bigger companies must submit."
Legal Marijuana
Oddly enough, legalization is hitting Humboldt County especially hard: "Humboldt County, traditionally shorthand for outlaw culture and the great dope it produces, is facing a harsh reckoning. Every trait that made this strip along California’s wild northwest coast the best place in the world to grow pot is now working against its future as a producer in the state’s $7 billion-a-year marijuana market. A massive industry never before regulated is being tamed by laws and taxation, characteristically extensive in this state. Nowhere is this process upending a culture and economy more than here in Humboldt, where tens of thousands of people who have been breaking the law for years are being asked to hire accountants, tax lawyers and declare themselves to a government they have famously distrusted. 'We’re at that moment in the movie ‘Thelma and Louise’ when they have driven the car off the cliff,' said Scott Greacen, a longtime Humboldt resident and environmentalist who is both a supporter and critic of the marijuana trade. 'We’re just waiting for the impact.'"
At the same time, California is considering lowering taxes to help legal growers compete with the black market: "A group of lawmakers proposed Thursday to reduce state taxes for three years on growing and selling cannabis to allow licensed sellers to get on their feet. With many California license holders claiming they can't compete because of high state and local taxes, the new legislation would cut the state excise tax from 15% to 11% and suspend a cultivation tax that charges $148 per pound. 'Criminals do not pay business taxes, ensure consumers are 21 and over, obtain licenses or follow product safety regulations,' said Assemblyman Tom Lackey (R-Palmdale), one of five legislators pushing the bill. 'We need to give legal businesses some temporary tax relief so they do not continue to be undercut by the black market.'"
Marketing
Here's a case study in effective content marketing: "I first heard of Ties.com a couple years ago when I stumbled upon their comprehensive knotting guide. It gives step-by-step instructions for tying classic necktie knots, adventurous knots (check out the eldredge!), and of course, the bow tie. The guides are top-notch. Look closely and you’ll get a feel for the writing, designing, and production skills required to execute the final product. The guides include text instructions, helpful sketches, and well-produced Youtube videos for more visual learners. Is all that effort worth the investment? Consider this: Ties.com’s knotting guide is the first result that shows up when you Google 'how to tie a tie.' The same is true for the phrase 'how to tie a bow tie.'"
Retail
With the fall of Toys R Us, this Bloomberg story from November reminds that the retail apocalypse isn't all about Amazon: "The root cause is that many of these long-standing chains are overloaded with debt—often from leveraged buyouts led by private equity firms. There are billions in borrowings on the balance sheets of troubled retailers, and sustaining that load is only going to become harder—even for healthy chains. The debt coming due, along with America’s over-stored suburbs and the continued gains of online shopping, has all the makings of a disaster. The spillover will likely flow far and wide across the U.S. economy. There will be displaced low-income workers, shrinking local tax bases and investor losses on stocks, bonds and real estate. If today is considered a retail apocalypse, then what’s coming next could truly be scary. Until this year, struggling retailers have largely been able to avoid bankruptcy by refinancing to buy more time. But the market has shifted, with the negative view on retail pushing investors to reconsider lending to them."
Innovation
The world's largest land-raised salmon farm is being built in Florida: "Turns out the aquifer structure of southern Florida is believed to be the only area in the U.S. suitable to do this type of aquaculture farm at this scale, Andreassen said. That’s because the structure of the geology allows for ample fresh water and salt water and the separate safe disposal of treated wastewater via a 2,750-foot-deep injection well, he said. 'This was the last place I looked at because I was thinking South Florida, like the tropics, for a cold-water fish? It is pretty crazy,' he said. But this crazy entrepreneur is a lifelong innovator in the salmon industry. Andreassen has been an entrepreneur since he was a teenager. Before founding Atlantic Sapphire, he and his co-founder pioneered the use of cleaner fish in Norway in the 1990s as a natural way of fighting sea lice in net-pen salmon farming. They launched an organic salmon farming company, Villa Organic, in Norway, the world’s largest salmon producer, and soon after secured a coveted contract from Whole Foods. They took Villa Organic public in 2007 and later sold it to the second- and third-largest industry players in salmon in Norway; today it is a billion-dollar company. That has allowed Andreassen to do it all again.”
Franchising
Today is a very big day in the McDonald's labor litigation: "If no settlement is reached and the judge were to rule against the company, the decision could have enormous implications for the franchise business model, affecting millions of workers in the fast-food industry and beyond. Corporations could be required to bargain with unionized workers at disparate franchise locations."
Obituary
As Toys R Us dies, it's worth remembering how Charles Lazarus built his "supermarket of toys": "Lazarus got out of the baby furniture business and exclusively into toys, renaming his store — soon to be stores — several times before settling on Toys R Us, with the R spelled backward as a gimmick. Supermarkets were his model. Long aisles. Products stacked high. Variety. Big enough to get products at discounts to pass on to shoppers. The Toy King could play rough, too. 'Lazarus offered toy manufacturers the tantalizing picture of year-round toy sales and the ability to produce 12 months a year,' Eric Clark wrote in The Real Toy Story: Inside the Ruthless Battle for America’s Youngest Consumers. 'But for that, he could extract a price and he did.' Instead of paying for products right away, Lazarus forced toy makers to take payment months later. He demanded exclusives and early releases. He made them advertise — for Toys R Us."
