Business articles

Woke, broke, or bespoke?

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Of all the sources I consulted for a definition of “woke,” the satirical news site The Onionseems to capture it best, in a series of incredibly funny, apocryphal quotes attributed to random politicians, celebrities and business leaders.

My favorite: “Whatever it is, we need a few hundred op-eds to nail it down.”

These days, businesses large and small are trying to reach customers, grow revenue and build a sustainable competitive advantage — all while navigating cultural fault lines. Just this month, Florida, like Texas and Kentucky, enacted a law barring the use of state funds to “promote” environmental, social and goals. Additionally, Disney, Anheuser-Busch, Maybelline and other consumer-facing companies are managing their own “anti-ESG” and “woke-related” controversies as they balance short-term profits with long-term goals.

So how can a thoughtful business leader pursue a growth strategy in these fraught times? Not easily, but as always, business planning should start with a few new insightful books.

For starters, let’s acknowledge the considerable angst driving these hot-button topics. Corporate monopolies; regulatory gaps, especially in tech; income inequality; and the rapidly evolving nature of corporate responsibility overall are important issues at the forefront of many strategic conversations. In the new book Chokepoint Capitalism, writer and tech expert Cory Doctorow and law school professor Rebecca Giblin argue that we are in a new era of “chokepoint capitalism” with companies like Amazon, Google and Facebook wielding disproportionate and exploitative influence over creators, intellectual property and much of what we read and put on our playlists each day. Their narrative of how concentrated corporate power in news, publishing, and music, in effect has “captured” American culture is compelling and their suggestions for “braking anti-competitive flywheels,” including copyright law changes, are sensible calls to action.

Indeed, an increasing number of critics say that legislative reforms are urgently needed to curb the excesses of capitalism, especially in private equity. Brendan Ballou, a federal prosecutor who served as special counsel for private equity at the Department of Justice and the author of Plunder: Private Equity’s Plan to Pillage America, lays out his case that Blackrock, Carlyle, KKR and other PE firms now have become the largest employers in the U.S. in a variety of industries, ushering in a “New Gilded Age.” He persuasively outlines how the largest PE firms’ relentless and singular profits-at-all-costs strategy has been detrimental not only to portfolio company employees and retirees but also to consumers as they pursue homeownership, nursing home care, health and property insurance, fair lending — even responsible oversight of the nation’s prison systems.  Ballou’s concerns about industry consolidation, privatization of public services, political lobbying and the notorious carried interest loophole are well-reasoned and his practical and detailed proposals for systemic reform also are well worth the read.     

Small wonder that concentrated economic power and profit are prompting a wholesale reassessment of the purpose and responsibility of business. Does capitalism need to be reimagined, or is “wokeness” and ESG — in the words of one Congressman last week — “just window dressing for … activism and … ideology.” Turns out, we’ve been here before, and the answer to these questions has been evolving at least since the early 19th century. In his outstanding new book, Deeply Responsible Business: A Global History of Values-Driven Business, HBS professor and business historian Geoffrey Jones challenges head-on the notion that for-profit leaders have never be virtuous while chasing the bottom line. 

Jones chronicles the business lives of “deeply responsible” business leaders ranging from chocolate pioneer George Cadbury and retail visionary Edward Filene to tech innovator An Wang and activist-turned-business titan Anita Roddick. Jones doesn’t sugarcoat the personal challenges and business obstacles these leaders faced, but instead he focuses on the values that motivated them to embrace strategic goals beyond traditional income-statement metrics. This is a timely and insightful read. Across cultures and time, Jones argues, deeply responsible leaders have done three basic things: sold genuinely useful products and services, engaged stakeholders with respect and humility, and believed in the importance of community and their business’s role in it. Whatever some might call those practices in a speech or letter to shareholders, they certainly aren’t new and we need more of them now.

Overheated political rhetoric will make government reforms for today’s challenges more difficult, at least in the short term. In the meantime, corporate leaders should be thinking more broadly and strategically about the constituencies they serve and the communities they might help build. That may or not be more “woke,” but it certainly is more responsible, and we’ll all be better off.

Read in the Boston Business Journal

Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.  Gennari also teaches Project Entrepreneur, a business fundamentals bootcamp for returning citizens, at BC Law School.

Talking, and not talking

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In the mockumentary Best in Show, Sherri Ann Cabot (played by the incomparable Jennifer Coolidge), sitting beside her addled, wizened husband, 40 years her senior, relates what they have in common: soup, snow peas … and also, she coos after pausing, “talking and not talking.” In fact, she adds, they could “not talk or talk forever and still find things to not talk about.” 

This could be us too. We love communicating, and we use words every day, all day, in so many media and contexts. For you, the C-suite executive, co-founder, team builder and manager, that should mean talking and not talking thoughtfully, and of course, to do so expertly, you should be reading a few new insightful books.

For his book Magic Words: What to Say to Get Your Way, Wharton Professor Jonah Berger parsed thousands of movie scripts, academic papers and online reviews to identify how language powers influence and creates impact. Readers will appreciate Berger’s actionable “six magic word” framework for (i) activating agency, (ii) conveying confidence, (iii) questioning carefully, (iv) leveraging concreteness, (v) employing emotion, and (vi) framing similarity and difference. This is great stuff. Berger seamlessly covers the intricacies of can’ts vs. don’ts, hedging words that detract, and how to use emotion to connect to people you don’t really know. Among his essential advice: Be an active reader, ditch the “ums” and “uhs,” and for their own sake, stop telling your kids they’re smart.

However, before you employ your enhanced word skills, know that leaders who talk less achieve more. So says Dan Lyons, bestselling author and writer for the hit show Silicon Valley, in his fun and entertaining new book: STFU: The Power of Keeping Your Mouth Shut In An Endlessly Noisy World. We’re all overtalkers, Lyons explains, and in our eagerness to share everything, in real time, all the time, we fail in negotiations, meetings and, often, in relationships, both business and personal.  Lyons argues that we need to work much harder and even more intentionally at deep and active listening, and he shows how it can be done in a variety of situations, simple and complex, at home and at work. If we can become more like Tim Cook, Ruth Bader Ginsburg and Albert Einstein and master the art of shutting up, we’ll be better off in body, mind and spirit.

Journalist and MSNBC host Mehdi Hasan would agree with this, and in his useful new guidebook, Win Every Argument: The Art of Debating, Persuading, and Public Speaking, he advises leaders to start with quiet, deep and thorough preparation. Armed with demonstrable facts, you can then listen critically, absorbing and processing, and also listen empathetically, connecting with the speaker and trying to see the world through their eyes. Hasan is a great storyteller and he uses compelling examples from historical debates to emphasize these techniques. I loved his chapter on “Gish Gallopers,” those all-too-familiar commentators, politicians and debaters who try to bury adversaries, including lazy reporters, in a torrent of incorrect, irrelevant and idiotic arguments, so much so that time and media debate formats don’t allow for adequate responses. Arguments large and small are a part of everyday life. As Hasan would explain with his Rule of Three, using them to inspire, inform and persuade takes practice, learning and time.   

Just starting an argument can mean saving lives. Saket Soni, labor organizer and activist, gave an urgent speech in Hindi to an assembled group of migrant workers trapped in a squalid “man camp.” The crowd was silent and grumbling. To make his point, he had to start all over again, this time in English. His huddled, desperate audience, men from Tamil Nadu and Kerala who barely knew Hindi or English, had scraped together $20,000 each for the chance to live in the US and work on hurricane-damaged oil rigs in Mississippi in 2006. 

Soni’s new book, The Great Escape: A True Story of Forced Labor and Immigrant Dreams in America, is a riveting page-turner and one of the best books I’ve read so far this year. Soni’s rhetoric and perseverance and the worker’s endurance and determination reveal an unforgettable and infuriating story of forced labor in modern America.  Well-chosen words, especially from courageous people at just the right time, can have powerful consequences.

In the end, we use around 16,000 words a day, according to estimates cited in Magic Words. As leaders, parents and friends, when we choose and position them carefully, we can make more of them count. And that’s certainly something you should talk or not talk about after reading these incredibly worthwhile books.

Read in the Boston Business Journal

Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.  Gennari also teaches Project Entrepreneur, a business fundamentals bootcamp for returning citizens, at BC Law School.

Anti-Money Laundering Act

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Did you know

You may soon need to disclose your shareholder list to the US Treasury?

by Shilpa Iyyer

We are watching the recently passed federal anti-money laundering law that, over the next few years, likely will subject small businesses to new disclosure requirements?

Last month, Congress passed the Anti-Money Laundering Act of 2020 (AMLA). The AMLA represents the most consequential legislation on the subject of corporate accountability and transparency in decades. Among the many sweeping changes, expansions, protections, and penalties introduced under the AMLA, it is the new beneficial ownership reporting requirement under the AMLA’s Corporate Transparency Act (CTA) that merits the immediate attention of small business owners.

The CTA requires certain corporations and limited liability companies in or operating in the United States to file a statement of beneficial ownership to the Financial Crimes Enforcement Network of the U.S. Treasury Department (FinCEN).

Who is subject to this requirement? The reporting requirement applies to all “reporting companies”, which is defined to include all U.S. corporations or limited liability companies, as well as foreign entities qualified to do business in the U.S. The CTA provides a number of exemptions to this broad definition. In particular, the obligation will not apply to companies that are already subject to certain federal reporting obligations, as well as financial institutions, political organizations, non-profits, and charitable trusts. Larger businesses are also relieved as the definition further excludes entities that (i) employ over 20 full-time employees in the U.S., (ii) had over $5 million in gross revenue in the past year, and (iii) operate from a physical office within the U.S. The reporting requirement will thus deliberately target smaller businesses.

What do reporting companies have to disclose? The disclosure submitted to FinCEN must include the full name of each beneficial owner, date of birth, current address, and an identification number from a government-issued identification document. The CTA defines a “beneficial owner” as any individual who directly or indirectly exercises substantial control over the entity, or one who owns or controls at least 25% of the ownership interests of the entity. As yet, substantial control is an undefined term, and further guidance on the interpretation of this term is expected to follow.

When must reports be filed? The Department of Treasury has until the end of 2021 to publish regulations on how to implement the provisions of the CTA. Existing companies subject to the reporting requirements will have to file within 2 years of the effective date of those regulations; companies formed following the effective date will need to file at the time they are formed. Procedures specifying where and how to submit are still being determined.

How is the information going to be used?  Beneficial ownership information will be held in a secure, non-public registry managed by FinCEN. Though inaccessible to the public, information in the FinCEN registry could be shared for compliance or intelligence purposes with financial institutions, law enforcement agencies, national security agencies, and other regulatory agencies (all in accordance with applicable law regarding the confidentiality of personal information).

These new measures – along with other components of the AMLA – are meant to discourage individuals from relying on shell companies to transfer or disguise the origin of illicit funds. Time will tell how well the AMLA framework will serve this larger mission. As the year goes on and further guidance is issued, we encourage companies to consult with their legal and accounting advisors on their federal reporting obligations in light of this new development.[1]

[1] The above should not be considered legal advice and readers are encouraged to consult legal and accounting advisors of their own choosing for more information on the above topic.

Minimum Viable Products

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Did you know…

that Lean Startups and Minimum Viable Products (“MVPs”) may be the way startups navigate the pandemic?

by Zachary Fountas

The ongoing pandemic has changed the way most of us work, shop, dine out, and interact with others. For early stage companies hoping to launch, connecting with investors, advisors and potential strategic partners has been challenging. So what’s an early stage company to do to move forward?

Well, maybe a look into the past makes sense. Shortly after the dot com bubble burst, startups around the country ran into an enormous impediment: capital was scarce and investments were lean. Adapting to survive, “Lean Startups” (coined by Steve Blank) pursued MVPs, streamlining product conception to assembly line, scrapping business plans, and pivoted away from what a company “thought” customers needed and focused on what customers said they wanted. Speed was important, since without a product on the market (even one full of bugs), you couldn’t keep the lights on.

Now, more than ever, new companies will need to “show” not just “tell” and more will be returning to the important framework of MVPs. So how are companies going to fund their MVPs? Maybe with one of the following:

  • Convertible Notes
    • Pros: Traditional instrument. Simple and straightforward. Avoids placing a valuation on the Company, especially important to those without enough operating history.
    • Cons: Notes are debt on the Company balance sheet that must be repaid or converted to equity. Notes come with accruing interest. Notes generally convert with a discount or other investor friendly provisions.
  • SAFEs
    • Pros: Generally a short agreement. Does not require interest, and no requirement that the Company repay the investment or guarantee that the investor receive equity. No deadlines for conversion.
    • Cons: As a newer investment vehicle, SAFEs may trigger extensive review and negotiation with sophisticated investors. The more Company friendly terms and limited investor upside may deter some investors.
  • Small Business Innovation Research (SBIR) Grants
    • Pros: Non-dilutive to capital structure of Company and no transfer of IP rights. If terms are adhered to, the Company does not need to pay back the funds. Winning an SBIR grant can also be seen by post-SBIR investors as a “stamp of approval” that your product is viable and has potential.
    • Cons: Application proposals are time consuming and difficult. The timeframe from submission of the application to grant funding can be long. SBIR grants are highly competitive and maintaining reporting and regulatory compliance under the terms can be burdensome on the Company.

Every company’s financing strategy will be different and conferring with legal and accounting advisors is critical. When done right, developing an MVP now could be the key to a successful launch during these challenging times.

 

Bill Murray, Negotiating, and the Art of the Deal

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By Larry Gennari
Boston Business Journal

In Rock the Kasbah, a short and not-so great movie with an all-star cast, Richie Lanz (played by Bill Murray) is a downtrodden music manager who takes his one client to Afghanistan to try her musical luck. In one of my favorite scenes in the after-credits, Lanz negotiates the purchase of a stuffed animal with a street vendor who doesn’t speak English and who offers him colored string instead. Lanz’s response to this opening volley? “Do I look like a guy who uses string?”

This can be us. We negotiate every day. Whether the stakes involve a multimillion-dollar merger, a follow-on financing round, a salary boost at work, or a toddler who refuses to try anything green, we’re navigating the oldest of human conditions: finding a way to get what we want.

In many years of M&A lawyering, I’ve come to know that the most effective negotiations start with careful preparation, thoughtful positioning, and a studied focus on the other side. What do they want you to do and equally important, what do they need you to know? After making my way through some recent business books these past few weeks, I’m definitely more inclined to keep this in mind.

Every negotiation is different and that’s especially so when it’s global, in whole or in part. Lanz hilariously learns that the hard way when he discovers a young Afghan girl with an amazing voice who, by local custom and practice, isn’t allowed to sing. A guy like Lanz needs to read Protocol: The Power of Diplomacy and How to Make it Work for You, the fascinating new book by Capricia Penavic Marshall, former U.S chief of protocol for the Obama administration. Marshall coordinated the details of countless state visits and treaty negotiations, many of which could have been upended by a flag turned the wrong way, a wrong-colored shirt, unpolished shoes, or a beautiful but culturally insensitive gift. (The auspicious No. 8 figures prominently in an exchange with the Chinese Premier.) For Marshall, the mind-set of diplomacy should be a mind-set for negotiation — and knowing the history, style and customs of the other side can mean the difference between an eventual “yes” and an immediate “no.”

Of course, like Richie Lanz, too many negotiators skip the hard work of learning and listening. After all, sometimes you already know what the other side is going to say, right? Think again, and read Blindsight, The (Mostly) Hidden Ways Marketing Reshapes Our Brains, the engaging new book by neuroscientist Matt Johnson and Prince Ghuman, consumer marketing guru and neuromarketing expert, about how our own expectations can shape the message we are hearing. I loved the countless, entertaining examples of how shapes, colors and smells can influence decisions around pricing, product development and marketing. Yes, in a blind test, if people believe they are drinking more expensive wine, their experience is more enjoyable and they’ll even describe wine from the same bottle: white and red (the same white with red food coloring) quite differently as their perception shapes their reality. We all instinctively engage in this “thin-slicing,” snap judgments based on quick impressions, and the best negotiators know that all too well.

Just ask former FBI hostage negotiator Chris Voss, author of Never Split the Difference: Negotiating As If Your Life Depended On It, an incredibly useful and quick read on the basic psychological tactics of “mirroring,” reciprocity, anchors and loss aversion, all foundational to one of Voss’ basic themes. The other side needs to know that YOU know their story before cutting a deal. Voss has clearly “seen it all,” and I’d certainly like to have him along for my next trip to the car dealership. Entrepreneurial Negotiation, by Harvard negotiator/instructors Samuel Dinnar and Lawrence Susskind, a terrific book I’ve recommended in the past, would be a great companion read on the overall topic.

Some people are born negotiators who relish the art of the deal. Richie Lanz is one of those, and watching him try to cut percentage deals with warlords, merchants and a sex-worker-with-a-heart-of-gold (Kate Hudson) is predictable fun in a romantic comedy. For the rest of us, negotiating has important, real-life implications. If we can learn to be better at it, we can easily end up with more than colored string.

 Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.  Gennari also teaches Project Entrepreneur, a business fundamentals bootcamp for returning citizens, at BC Law School.

 

Zombies, Books, and the End of the World as You Know It

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By Larry Gennari
Boston Business Journal

“If I had known the world was ending, I would have brought better books,” Dale Horvath laments to another survivor in an episode of the Walking Dead, the long-running post-apocalyptic television series that I binged-watched recently one rainy evening. These days, with the threat of a second wave of the pandemic, staged re-openings and all-too-tentative school and work schedules, some of us might be tempted to think that we, too, are living through a similar experience and we must again stock up on alcohol, more toilet paper, and spam.

We aren’t, and please don’t.  So far anyway, this isn’t about siphoning gas from abandoned cars or marauding zombie hordes. This is a public-health crisis, and it will have an end. Yet we still find ourselves captivated by these post-apocalyptic stories and the questions they present: What if our elected government fails us and the economy crumbles? How would we build a more inclusive and diverse community if we had to start from scratch? What kind of person are we when confronted with the end? With the backdrop of the global pandemic and the ongoing conversations about social and economic justice, I’ve been giving all of this some thought — and I’m not the only one.

The shutdown has lain bare the economic vulnerability of millions of people, a reality presaged by Nobel Prize-winning economist Joseph Stiglitz in his latest book People, Power & Profits. Over the past few decades, Stiglitz argues, the American standard of living and those of many other advanced countries has declined considerably and income equality is stretching our societal fabric to the breaking point. Corporate monopolies (especially those in the tech world) have proliferated, creating unfair barriers of entry, stifling innovation, undermining growth, and resulting in angry, polarizing discontent across the country and the globe. Stiglitz details why this won’t improve “on its own” through neutral market forces and he calls for targeted, timely government action on healthcare, student debt, voting rights, infrastructure, and education.  Look no further than the uneven government pandemic response and the ongoing BLM protests to understand why this is an urgent and important book for policymakers, CEOs, entrepreneurs and frankly, every voter, come this fall.

Moreover, open communication about our shared challenges is essential for community, and right now, we are increasingly “not on the same page,” according to journalism professor Samuel Woolley in his new and chilling book: The Reality Game: How the Next Wave of Technology Will Break the Truth. Digital disinformation and computational propaganda, Woolley’s preferred terms for “fake news,” is proliferating online as a tool for shaping public opinion, distorting truth, dividing people, and silencing opposition. Woolley, former research director of the Computational Propaganda Project at Oxford University, lays out how governments, terrorist organizations, and political campaigns use artificial intelligence and bots to assault reality and truth.  Even worse, according to tech journalist Rana Foroohar in her thought-provoking recent book Don’t Be Evil, our largest tech companies have built billion-dollar business models centered on hijacking our personal data so that we increasingly only see tailored ads and content that reinforces our assumptions, desires, and biases. As Foroohar makes clear with detailed and disturbing examples throughout the book: When the service and app are free, YOU are the product. Both authors urgently call for much greater scrutiny and tailored regulations to prevent propaganda, control our own data, and to preserve and maintain a functioning democracy. A tall order, but a necessary start.

If all of these challenges make you want to move to a remote cave with your own mini-cell tower and wi-fi, that’s certainly understandable. Just be sure to read Irish writer Mark O’Connell’s new book, Notes From an Apocalypse, before you go. This is a darkly funny meditation on O’Connell’s search for meaning and self -awareness, and he engages with doomsday preppers, conspiracy theorists, and fellow earthlings hoping to colonize Mars. He tours survival bunkers in South Dakota, considers Silicon Valley billionaires’ planned retreats in New Zealand, and actually visits Chernobyl, the ultimate post-human, apocalyptic experience.  O’Connell’s reflections, helped by his 4-year-old son and the magic of Dr. Seuss’ amazingly prescient book The Lorax, give us plenty to think about as we confront our own fears of the finite and a future we can’t control.  This is a book for the times.

The history we are living through gives us a unique chance to read, reflect and re-anchor, and of course register (to vote). We should seize these opportunities. Sadly, Dale from the Walking Dead can’t do that. A zombie took a bite out of him towards the end of Season 2. Damn zombies. They really do ruin everything.

Read in the Boston Business Journal

 Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.  Gennari also teaches Project Entrepreneur, a business fundamentals bootcamp for returning citizens, at BC Law School.

C Corp versus LLC

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Did you know?

That your choice of forming a C corporation or an LLC could mean the difference between a sizable tax bill or zero capital gains on an exit?

by Elizabeth Davenny

How?  Section 1202 of the Internal Revenue Code, which was enacted to encourage investment in new ventures and small businesses, may allow the exclusion of up to 100% of federal tax gains on qualified small business stock on an exit transactions, subject to certain limitations.

If you are positioning your company for a sale, check in with your legal and accounting advisors to see if you meet the general requirements:

  • Did you receive the stock directly from the C-corporation?
  • Have you held the stock for at least five years at the time of the exit transaction?
  • Is the C-corporation a “qualified small business” that (a) uses (and has used for substantially all of your hold period) at least eighty percent (80%) of its assets to conduct an active business, and (b) that, both immediately before and after your investment, had no more than $50,000,000 in gross assets.

As with everything around an exit planning, details matter and you’ll want to analyze these issues carefully with your advisors. If you qualify, the savings are significant—and that’s a good thing to know!

 

This communication is for informational purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.  Copyright 2020. All rights reserved.

3 Simple Things​ ​with Demos Parneros

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Demos Parneros is a Board member, investor, former CEO – Barnes & Noble,  and former President – Staples (North American Stores & Online)

Over the course of your long career, you have spent a lot of time thinking about traditional and online retail. Given the pandemic, where do we go from here?

For more than a century, good retailers have demonstrated the ability to adapt to changing customer shopping behavior. For the past twenty years, the challenge for many traditional retailers has been to add a meaningful online and mobile experience. Today’s most innovative retailers start with the customer in mind, not the channel, and we are seeing many successful digitally native brands build stores in order to respond to customers’ needs. Today’s pandemic has pushed us to change and adapt… ready or not. The solution starts with a model that works and that meets not only the business needs, but also guarantees the safety of employees and customers. Retailers must embrace rapid change, be willing to learn from their mistakes, and accept that the cost of doing business will be higher. Quick and decisive action will be key for retailers to find the way forward.

A great example of this is CVS Health, which created a safe, socially distant, and contactless checkout process where you can still interact with your cashier through a plexi-glass divider, and bag your own items.

As a sought-after advisor, Board member, and investor, you are seeing a lot of business plans these days—which ones stand out?

I meet smart, passionate and hard-working entrepreneurs every day who share their ideas and business plans. The plans that truly stand out, identify a clear and focused goal or problem they are solving. They also have well defined purpose and distinctive advantages that will help them succeed. Just as important are tenacity and an aligned and talented team that places high value on learning and curiosity.

This is was clear with Wealthramp’s business plan — “Simplified access to personalized, fiduciary, financial advice”.

In this tumultuous period, what should new product or service companies be doing to build their brand and find customers?

Listen, learn and iterate. While this crisis has challenged the way we live and work, it is also a catalyst driving change, innovation and new models. When forced to change, we are forced to reinvent and also think deeply about what we truly need. Our priorities have changed, so thinking about customers, products, and brands must go through today’s post pandemic filters. Is your brand delivering a solution to a real problem? We know today’s consumers have heightened sensitivity about shopping safely, so clearly communicating what new processes you have implemented to ensure their well-being is vital to calming their anxiety. Finding customers is easier when the product or service meets a true need.

I like the quickness and flexibility shown by the Cleancult team. They have satisfied customer needs, kept their supply chain running smoothly, and taken care of their employees.  Besides that, they are reaching out to donate to their community in this time of need.

 

3 Simple Things with Brad Feld

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Brad Feld is an entrepreneur, author, investor, board member, keynote speaker (www.authorsinnovators.org), and entrepreneurial advisor to countless early stage companies in a variety of industries for decades.  Feld.com

How can promising technology companies and entrepreneurs—especially those not in a healthcare or related space—help with the current crisis?

It’s a tricky question because “how can I help with the current crisis” is multi-dimensional. First, explore the “why.” Why do you want to help? Explore your personal and professional motivation. Get your mind around whether this is a defensive financial dynamic (e.g. “I don’t want my company to fail”), a moral imperative (e.g. “I want the world to be healthy”), a need for personal engagement (e.g. “I’m scared and need to do something”), or something else. There is no right answer here, and there could be several “Whys.”

But, start with the “Why”. If you don’t, you won’t be able to define the What. “What are you going to do?” And you can’t get to the “How” until you have enumerated the “What.”

You have helped so many companies think through their launches and you remember the last global financial crisis—what would you advise company decisionmakers about scaling in challenging times?

Don’t worry about scaling. Right now, your goal should be to make your cash last as long as possible. Your company is likely in one of three categories:

  • Your business benefits from the Covid crisis. If this is the case, you should focus on scaling efficiently. For the past few years, companies were rewarded for growth at any cost. It didn’t matter if you spent $5 to get $1 of growth (ok – maybe that was a little sarcastic). However, growth efficiency will matter, so take advantage of the tailwinds since your products or services benefit from the Covid crisis but be efficient about your spending. Basically, be smart and do good business.
  • Your business is under duress from the Covid crisis. If your product depends on either (a) people traveling or (b) people going to / working in an office, you are probably screwed right now. There are many other categories that are under extreme duress. Scaling right now is irrelevant. All that matters is survival.
  • It is unclear whether your business benefits from or is stressed by the Covid crisis. This is the really difficult category. Immediately pull back on all your variable spending, especially around growth, and refocus incrementally on new experiments to see what works and what doesn’t. Don’t assume that what you were doing will still work going forward. Also, don’t assume that things will fall off a cliff some time in the future. The data is changing so quickly that you need to use short term situational analysis to plan. Annual plans, quarterly plans, and even monthly plans don’t mean anything. Focus on things daily, and reassess at the end of every week.

What three books should entrepreneurs be reading now?  

Until about a week ago, my brain was too exhausted to read anything. I’m still watching a bunch of movies (I did the Pandemic series: Contagion, Outbreak, and 12 Monkeys) and TV shows that I missed (We just started Breaking Bad, finally …)

But, if you really want to read, here are my top three for this moment.

  • Atlas Shrugged (Ayn Rand). This is in the “it’s complicated” category. I’m not an Ayn Rand Objectivism acolyte, but this remains a powerful book about a variety of topics, including leadership (or lack thereof), individual vs. collective power, public vs. private sector, and catastrophic failure of systems. There’s a lot of noise in the message, and it’s easy to overinterpret messages (including some of the fundamental Objectivism philosophy that I personally disagree with), but it remains thought provoking and seems remarkably relevant for a book written over 60 years ago.
  • Station Eleven (Emily St. John Mandel). I read this when it came out in 2014. All I can say is that it was way ahead of its time.
  • Searching for Stars on an Island in Maine (Alan Lightman). I read this early in the year, prior to the Covid crisis, and I’ve referred back to it a few times. It helps us understand our place in the universe.

3 Simple Things: Peter Blacklow of Boston Seed Capital

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3 Simple Things with Peter Blacklow, General Partner at Boston Seed Capital, a venture fund investing alongside founders who are striving to improve life, work, and play, through building innovative tech companies. www.BostonSeed.com

Boston Seed has a broad portfolio of companies in its existing portfolio, what advice are you giving them these days?

No earthshaking news here, but we have to ensure Boston Seed’s portfolio companies’ ongoing operations with cash in the bank, and we emphasize to them that raising new capital in a very uncertain market may be difficult or impossible.  As a result, it’s critical for teams to make excruciating decisions in reducing expenses with the ultimate goal of extending the runway for new capital into the business or achieving a break-even model.

Also, it’s a fascinating insight into the DNA of entrepreneurs — I have observed that many founders believe our new social/economic reality could actually be accretive to their business.  I would even say that most founders I speak with see a silver lining or a unique opportunity in today’s challenges as it relates to their business.  I believe entrepreneurs are positive opportunists, which is what makes them special, but nobody has a clue what the short and long-term impact will be for our  customers and their ability to do business with us.  So, even those portfolio companies that are demonstrating short-term gains or no negative effect on their business need to plan for a deeper impact in Q2 and beyond.

You’re a marketing veteran with deep industry experience prior to joining Boston Seed—what would you advise company decision makers about marketing their products in challenging times?

It’s not easy.  In our consumer businesses, many of our companies have significantly slowed or completely shut off marketing as a result of these uncertain times.  In our B2B businesses, our customers are making similar cuts to marketing budgets, and SAAS implementations are much more difficult with a remote workforce.  But, that doesn’t mean we can give up on marketing.  However, companies have to be thoughtful around 1) finding an approach that will work with their customers and 2) speaking in a way that is sensitive to the upheaval in our daily lives.  Alyce is one of our portfolio companies that has reacted quickly and thoughtfully to their customers’ needs.  As a B2B AI gifting business that helps companies acquire and enhance communication with customers, Alyce understood that smart physical gifts delivered to business contacts via direct mail would be irrelevant today.  So, they emphasized their digital and charitable gifting offerings and customer response was amazing.  In this sense, Alyce listened to their customers, developed a product that worked given the confines of remote workforces, and provided a charitable component which resonates even more strongly in today’s world.

In this tumultuous period, what should new innovative product companies do now to attract funding, get launched and gain traction?  

Many entrepreneurs talk about building businesses during bleak economic times, like in 2002 or 2008.  This feels different for a couple of reasons.  First of all, we don’t know how long or to what extent an economic downturn will last.  Second, even an innovative product may have new challenges in terms of go-to-market given the massive social/economic changes their customers are facing.

We clearly need to continue to develop and launch innovative products.  But, those companies also need to understand the current needs of potential customers and how to build a loyal customer base in times of social/economic turmoil.  Bootstrapping a business and demonstrating proficiency in connecting with customers will continue to unlock capital, but not just because they are clever ideas – you’ll need to show customer traction.

Thinking Fast Means Going Slow. Take a Moment with a Book.

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Like most everyone these days, I am working virtually, which has me online and connected to both my work and the news, all day, every day, all the time. I learned a long while ago that fasting, or more specifically, news fasting — no online papers, no cable TV, and no NPR, whether just for a few minutes or sometimes a few hours — is essential for mind and heart.

This fasting should be simple, and it means finding your joy, even for a fleeting moment, as often as you can. As my favorite poet, the late Mary Oliver, said in “Don’t Hesitate”:

“If you suddenly and unexpectedly feel joy, don’t hesitate. Give in to it. There are plenty of lives and whole towns destroyed or about to be. We are not wise, and not very often kind. And much can never be redeemed. Still life has some possibility left…… It could be anything, but very likely you notice it in the instant when love begins…. Anyway, whatever it is, don’t be afraid of its plenty. Joy is not made to be a crumb.”

One of my joys is finding balance in a decent book. So, these past two weeks, I’ve been counseling CEOs and entrepreneurs, and also reading business books, some from authors who will join us this October for the fourth-annual Authors & Innovators community event.

For starters, I just finished and thoroughly enjoyed an advance copy of Girl Decoded, the upcoming book by the enormously talented Rana el Kaliouby, single mom, Ph.D, Muslim woman scientist in an overwhelmingly male field — and founder of an artificial-intelligence startup spun off from the MIT Media Lab. This engaging book is part personal memoir, part clarion call for applying emotion recognition technology to virtually every technology field, including mental health and autism. In a world of text, email and code, el Kaliouby teaches us that words convey less than 10 percent of the true meaning of a message and new communication technologies will need to account for emotion, facial expressions and vocal intonations to capture real and true meaning.  With video meetings becoming the norm these past few weeks, this book reminds us that the human always must come before the artificial.

I also heartily recommend Lift, the new book by MITRE Corp. engineer and author Dan Ward.  It’s an incredibly thoughtful and entertaining history of innovation from the unique perspective of flying machines and airplanes.  Ward starts with the Wright brothers in Kitty Hawk over a hundred years ago and traces their success to the many unique and persistent innovators who came before them, made mistakes, and paved the way for modern aircraft design and technology.  Ward is an upbeat and spirited writer and his perspective on considered “experimenting” versus random “risk taking” is a refreshing and important take for today’s entrepreneurs.

History readers also should consider Overground Railroad: The Green Book and the Roots of Black Travel in America, the new book by author, historian, and Harvard Fellow Candacy Taylor. It’s a riveting chronicle of the Green Book, the travel guide published for black motorists from 1936-1967. Taylor takes the reader back in time to the Jim Crow years and through the civil rights movement when a simple road trip for a black motorist was a demonstrable act of courage in many parts of the country. The many pictures Taylor includes convey as much as her compelling text. Traveling builds community. When you finish Taylor’s book, you’ll have a better understanding why it matters and the work that lies ahead—for all of us.

These are challenging and stressful times. To get through them, you’ll need strength and the constant renewal that comes from rest and reflection. No better way and no better time to find all that, and more, in a good and thoughtful book.

Read on the Boston Business Journal here.

Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.

MLK and the Unfinished Fight for Economic Justice

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PUBLISHED IN THE BOSTON BUSINESS JOURNAL
By Lawrence Gennari – Chief curator, Authors & Innovators

This month will mark the 37th year that we as a nation honor the life and work of Martin Luther King Jr.  Now, more than 50 years since his death, we remember MLK’s tireless advocacy for racial equality, nonviolence, collective activism, and of course, his words of inspiration.

I’ve kept him especially in mind while making my way through a few books over the holidays. For any entrepreneur, CEO or member of the innovation community, MLK’s words and legacy continue to have urgent relevance — well beyond the eloquent quotes that gather so many “likes” on social media every January. I recommend a more intentional reading, listening and thinking tour this time around.

For starters, check out Michael Honey’s incredibly engaging recent book: To the Promised Land: Martin Luther King and the Fight for Economic Justice, which chronicles King’s speeches, comments and strategies around bringing greater opportunity to the millions of people he saw “at the bottom of the economic ladder.” MLK certainly wanted to change hearts and minds, but he also understood that business drives change, growth and progress. Honey observes that MLK didn’t advocate that everyone should receive the same pay, but more that everyone should have the same chance to create a better life through access to education, healthcare, and jobs.

When I revisited a favorite from my own library, Ripples of Hope: Great American Civil Rights Speeches, by Josh Gottheimer, I noted how often MLK and other speakers connected economic opportunity to a just society. MLK most definitely considered social justice in an economic framework. We should too — and that requires a greater awareness and openness to supporting entrepreneurs with barriers.  For example, I enjoyed VC: An American History, the new book by Harvard Business School Professor Tom Nicholas, which outlines the riveting history and birth of venture capital in the U.S., starting with the financing of whaling voyages and bets on “winning” ship captains and moving to the collective investment by captains of industry in government supported partnership structures, many now centered in Silicon Valley. This is a bold and rich history, but women and people of color will not find themselves in it — even today. For the vast majority of top VC firms, women hold no senior positions. Moreover, a recent HBS study found that black investors make up less than 1% of the industry, and 81% of VC firms don’t have a single black investor. MLK would find this ironic because, as Nicholas notes, “venture capital is based on the premise of financing radical, often revolutionary change.” I think he’d be urgently impatient for industry progress and change, given the human stakes in play.

I do believe that MLK would be speaking out for criminal-justice reform, especially around the myriad post-prison restrictions on jobs, benefits and housing facing returning citizens, who are disproportionately people of color and substantially female. Sadly, much of this would be familiar to him. For far too long, in too many states, a criminal conviction has meant inmate exploitation and post-prison poverty. MLK would be encouraged by programs aimed at these vulnerable returning citizen entrepreneurs, such as Defy Ventures, Project Entrepreneur at BC Law School, Project Remade at Stanford, and the Pivot Program at Georgetown, but he would agree that we can and should do more at the federal and state level to support these efforts — now.

Many rightly revere MLK as an inspiration to the working class and the downtrodden. As we celebrate his life and work again this year, let’s recall not just his soaring rhetoric, but also his central commitment to economic justice.

Read on Boston Business Journal site

Authors & Innovators is an occasional column by Larry Gennari, a transactional lawyer, law professor, and chief curator of Authors & Innovators, an annual business book and ideas festival.