M&A

Should Is A Terrible Word

I’m not sure who taught me this originally. As with all things I can’t source back, I assume it was my awesome and supportive parents who unconditionally loved and encouraged my wacky and zany child self to develop into this effusive and certain blogger (?) or whatever I am now.

Anyway, something I learned growing up at our house was that:

should is a terrible word.

We should not be in the habit of telling anyone what they should or shouldn’t do. :)  It’s really rude almost 100% of the time when using the word should. You sound hypercritical using it in common vernacular. You (almost always) sound as if you know something that the other person does not and you are trying to enlighten the path for him/her. Even in very specific instruction - i.e. yoga or dance instruction - where there is a commonly agreed upon placement of the parts of the body. “Right elbow to the outside of left knee to twist” -- this can (and should!) be said without a twang of ‘should.’ Should is ableist in this context: it implies one way of doing something. Should is limited and finite; it doesn't leave room for possibility. 

Even if you’re speaking to yourself. Think of the internal dialogue: “I should stop procrastinating and go to the grocery store.” Be kinder to yourself. How about something like: “If I want to eat a healthy meal for dinner tonight, I will go to the grocery store in the next 20 minutes.”

When working with start-ups and founders, I resist the urge to use the word. No matter what I think they should or should not be doing, I try to get them to just talk out their reasoning and logic for making their decisions.  I tell them how I learned something - how I got to a conclusion -- but not what they should do. Some of the best business (and otherwise!) decisions come not from a place of should but from a place of if. Less lacking, more possibility. Less grasping, more optionality.  

By the by, I just looked up what should means -- here it is:

Yeah, fuck should. 


Nonetheless, I like to sit around and think of business ‘should’s’ for big companies. Because it’s fun to dream with limitless potential and with a very wide aperture about what could happen in a free and open world.

Here are some of my shoulds -- let me know yours!! Respond below or Tweet me!

Start ups that Uber Should Acquire

Bird, Lime, etc.

Postmates, Grubhub/Seamless,  AND the top 5 - 10 restaurant chains in each city (byChloe, Sweetgreen, Chipotle, etc.)

Local Messenger Services in cities

Tuktuk’s and Pedicabs Everywhere

Companies that Facebook Should Acquire

All the media companies - starting with the big ones

Production Studios

Sponsorship Model for Talent

Partnerships that Twitter Should Do

News Companies - LOCAL, LOCAL, LOCAL

PR Firms  - breaking news should always be on Twitter - ‘real time verification’

Bloomberg + any other live live financial news

Sports - any other live live sports news

Technologies that Amazon Should Deploy

Basket Technology for crowd-sourced pricing and  Best-Of lists

Those are my 'should's' in today's business landscape -- what are yours?!

Snap to acquire Smule (a big bet)

Have you guys heard of Sing by Smule?  It’s this incredibly sticky karaoke app that’s got a steep subscription model (at $45 a year, it’s 3x the price of The Economist!)

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Featuring a huge song catalogue, and a gamified model - singers can sing together and ‘battle’ for singing all the notes correctly - the app is incredibly addicting and also a huge time drain. One song, averaging 3 minutes, might take 3 or 4 tries to get right before you publish it on the app. The whole process can easily eat up an afternoon. (They have also evaded legal issues by having users upload the MIDI tracks of many of the songs - so they’ve relied somewhat on an open source model to build the business.)

My big bet is....

that the next time Snap experiences negative user growth, they will buy a company like Smule. Not for its attractive revenue model. (Although it is an attractive recurring revenue biz). Nor for its audience (I doubt these are unduplicated users to Snap, anyway)...

...But, for time spent on platform metric.

a measurement that, I believe, will increasingly become the only valuable one on social media.

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We’re past the scorched earth stage of the internet. The pioneers have gone West - the Lewis and Clark’s have laid claim to each eyeball that has the internet on a phone or a computer. Everyone who is going to be on the internet, is. [At least in America, anyway. (And not babies...yet.)]

 

We’re now in the new land grab: the one for attention. Only the strong will survive this next frontier - can your content be more compelling than content on any other platform? How much time can you get your users to spend with you? The longer you have them, the more ads you can show them. (See also: Twitter content partnership announcement at NewFront’s 2018).

If you can’t create great content, you’ll have to acquire it...somehow.

Watch this space.

Big Bets Volume 1 -- April 21, 2018

The big bet:

Incumbent Airlines will be acquired by Big Banks during the next financial crisis….

Here are my predictions:

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(they’ve actually already laid the consumer-facing groundwork + branding for this!)

United + Chase

Delta + American Express

American Airlines + Citi

(*Note - not talking about ‘disruptor’ airlines like jetBlue, Southwest, Virgin, etc. That’s another Big Bet, for another time)

During the next recession, the service industry will get crushed like it always does. In a race to protect margin and keep discretionary spending fueling their credit card business, banks will take extreme measures. Airlines, already operating at close margins, are increasingly incurring unforecastable expenses, (things like TSA delays, costs associated w/ rescheduling customers, vacillating price of oil, regulatory changes, union demands) will be challenged like they always are.

But this time, the government won’t save the airlines like they did after 9/11. Here’s why:

  • competition - upstarts like Southwest, jetBlue, and Virgin keep nipping at the profit margins of the incumbent airlines. The upstarts won’t need a bailout because they run a different and leaner ship.

  • It’s a dog eat dog world out here -- we are operating in a MAGA society where it’s hard to imagine that the Federal Government would bail out commercial airline companies. Welcome to capitalism in 2018, friends.

Enter big banks who have deep financial relationships with aforementioned airlines….they are already trading money for miles! Ponder that for one moment -- by issuing credit cards with mileage points associated with the amount of money a consumer spends on the card, the banks get a pretty healthy insider focus group with which to understand the airline industry….and their acquiree’s business.

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Keep your friends close and your potential acquisitions closer, is, I guess, how the old saying goes.

congrats to first portfolio company

Did y'all hear the news?  Cameo has merged with Vimeo. Cameo was the very first portfolio company for Adipose and is representative of the type of work we're keen to do.

  • Cameo has tremendous value to advertisers, brands and consumers alike: allowing anyone to make a simple, beautiful video.  Because it's cloud-based, groups of people can make a Cameo, too.  This is a huge pain point for experiential marketers and a need that is ever-growing in the land of social media.  Therefore...
  • ...Brands and industry influencers were eager to get involved with Cameo and reap the benefits of first-mover success. Here are some examples: Free People, Bespoken Clothiers, CMJ, PopWater, Pete Francis, Rebecca Minkoff, Washington Post, Mike Schmid
  • Adipose structured strategic partnerships and alignments with brands and influencers for Cameo.
  • Adipose advised and retained marketing and PR support for Cameo through to sale of the company.

Looks like this is going to turn out well.