Issue No. 253: Seven city-dwellers who should root for Amazon


Amazon’s HQ2 campaign is a Rorschach test for your personal politics. But as with anything in politics, there will always be an upside to accompany the downside and vice versa. Here’s what a recent policy article in CNN had to say about the Disturbing part of Amazon’s HQ2 Campaign:

But, there’s one part of Amazon’s HQ2 competition that is deeply disturbing — pitting city against city in a wasteful and economically unproductive bidding war for tax and other incentives. As one of the world’s most valuable companies, Amazon does not need — and should not be going after — taxpayer dollars that could be better used on schools, parks, transit, housing or other much needed public goods.

Perhaps there is truth in this. But in accepting that one of these cities will be home to 50,000 new jobs at an average salary of ~ $100,000, there are tremendous positives to consider. Here are the seven people that you know who will love the HQ2 in their city:

The urban homeowner | Face it, Amazon is likely to move to an area where the housing market is affordable-yet-appreciating. This person’s home will appreciate with the influx of upper-middle class homeowners and the investments into their city to support thousands of white collar professionals.

The residential developer | We all know a person who spends their days buying abandoned multi-units at Sheriff’s auctions and turning them into $2,000 per month rentals. If this friend can find the cash flow to do it, her business will expand quite a bit.

The city’s income tax department head | This one is self explanatory. Salaries in excess of $100,000 are very important to growing cities, as these citizens are less likely to receive tax returns. An influx of this demo means more money to spend on infrastructure.

The area’s MLS team owner | Big three sports rarely have economic crises. But for a Major League Soccer club, adding hundreds if not thousands of new season ticket holders and general fans could make their investment more viable.

The elite independent school administrator | With urbanization comes a stark reality, most urban schooling systems are failing. And charter schools in most of the top 20 cities aren’t much better off. Given the demographic of a well-off millennial, the ones with kids will likely invest in private school education.

The local state school college graduate | Congratulations to this young person for increasing their odds of finding that great, technical job right out of school.

The branding agency senior manager | What most don’t know about Amazon is that they are one of the largest advertising businesses in America. By some estimates, Jeff Bezo’s ad business is larger than that of Twitter’s and Snapchat’s. Expect Amazon to poach talent from local agencies as they continue their takeover of the digital advertising market.

Amazon’s campaign for a new home city is a risky bet for the policy-maker who determines the incentive package. But if Amazon delivers the goods, as promised, one local government will be set for the next 5-7 years. It just so happens that delivering is what Bezos does best.

See more of the issue here

Issue No. 239: The United States of Amazon

A Last Word: The United States of Amazon


Acquisitions continue to accelerate across the retail landscape. It’s clear that whether the acquisition is made by Amazon or by a competitor, the business decision is driven by a new competitive landscape that is heavily-influenced by the Seattle behemoth.

Amazon isn’t just thriving along a new frontier, it has become the frontier and with so many “theaters of war” that it would take a 17 page white paper to explain each strategy. The closest comparison has far exceeded the Microsoft example. It’s now closer to Standard Oilwhose monopoly was broken up over 100 years ago. In a digital era that is still relatively unregulated, it will be harder for the federal government to stymie Bezos progress. And most consumers would protest, as Amazon has elevated lower costs and ease of purchase as retail necessities.

In issue no. 239, consider how each of the areas highlighted have been or will be affected by Amazon, Inc. The company is a power player in: warehousing, aviation, publishing, eCommerce, film, shoes, grocery, cloud storage, logistics, fashion, manufacturing, and now advertising.

See more of the issue here.

Issue No. 238: Inclusivity has many forms.

The Launch of Cotton Bureau’s Blank

I first mentioned Cotton Bureau in Issue No. 203, where I expounded on what I found fascinating about the Commerce startup (and fourth fastest growing company in Pittsburgh). Most recently, their focus has been on sizing inclusivity. In Issue No. 217, I wrote:
Cotton Bureau is one-step closer to filling a void left behind by American Apparel’s bankruptcy. They’ve begun manufacturing a new type of tee for all shapes and sizes. It’s called “Blank” and it has the potential to solve a gaping sourcing issue in a major fashion segment.Women and men needed better, more accurate t-shirt sizing. 

From this simple assessment,Blank was born. From the now-successful Kickstarter for the project:

You see, finding a wholesale t-shirt manufacturer that fits all our criteria has been…challenging (to say the least). We need a brand with modern fits, a wide range of colors and fabrics, ethical manufacturing, reliable quality and consistency, always-available stock, and it’d be reeeeal nice if it was made in America. Finding a brand that checks all those boxes and oh yeah also fits women is damn near impossible. If you can find a women’s brand that comes in our preferred colors and fabrics, it’s only available in mega-tiny junior sizing. If it’s sized to fit most women, the cut is awkward, the fabric isn’t anywhere near our standards, and it comes in whatever color you want…as long as that color is pink. It’s frustrating for us as a company, and every bit as frustrating for you as our customer.

In a recent conversation with a Senior Editor of a lauded men’s publication, the gentleman posed the question to us: “but what’s the angle to cover for men?” He asked this un-ironically but in doing so, it established why I believe there will be a successful product market fit for Blank’s offering.
Sizing woes can illicit a sense of embarrassment or even shame from consumers – especially men. Men seem to be more ashamed to seek a solution to sizing inaccuracies. But this is nothing new, it took a decade of female consumers lauding performance fabric sportswear for men to do the same. Now, athleisure is leading the industry in product innovations and companies like Lululemonand Outdoor Voices are widely accepted by all.

Long before American Apparel exacerbated the sizing issue by marketing their products as exclusionary, this practice was found in tween retailers. Many can remember being a normal-sized kid while needing to purchase an XXL tee from A&F or American Eagle. In a normal world, XXL would be worn by an NFL tight end. Today, you’ll see the same practices at Hollister and other retailers who target teenage and young adult consumers.

For adults, sizing in t-shirts hasn’t improved either and the product shaming has only increased. American Apparel set this market trend, years ago. Though it’s now owned by Gildan, producing a wider offering with accurate sizing would still be viewed as detrimental to the brand.
By the conclusion of our chat, that Senior Editor recognized that there was, in fact, an industry problem and he welcomed the solution. I have a feeling that many consumers will welcome Blank, just the same.

This is the opinion of Web Smith.
See more of the issue here.

Issue No. 225: eCommerce and middle America


A last word: Amazon v. Alibaba

The differences between Alibaba and Amazon are numerous but there is one glaring difference. eCommerce in America is increasingly marketed as a solution for the middle-to-upper class. In China, eCommerce has made progress opening channels to rural and poorer citizens. Here, it is a novelty and growth is more difficult. In China, eCommerce is an economy open to all (mostly out of logistical necessity).

At last survey, eCommerce has a 30%+ adoption rate in China vs. 12%+ in the United States.

Why the difference? eCommerce is a relative luxury in America and the cost of fulfillment is to blame. With the (1) proliferation of “free” shipping, (2) the skyrocketing costs of warehousing, (3) and the slim margins of many major eCommerce players, adoption is reduced to a smaller slice of the American population than our Chinese counterparts.

In short: in America, we only market to people that can best support our rising logistics costs.

It is through this lens that you should view Amazon and Walmart’s recent developments. While we’ve all read the strategic differences between Amazon’s acquisition strategy and Walmart’s, one similarity is that both are moving upmarket. Solid Yarn Spun Tees and Kombucha Tea anyone?

See more of the issue here.

Issue No. 211: Now fully shoppable is now fully shopable for readers of GQ, Vogue.

With increased competition from new digital publications over the last decade, alongside an industrywide plunge in advertising spending, it is little surprise that Condé Nast is intent on cultivating new revenue streams. In recent years it has widened its focus, from magazine publishing to more varied media initiatives, with minority stakes in several fashion e-commerce start-ups, including Vestiaire Collective, Rent the Runway and Farfetch. – New York Times 

Graphic of the Week: Online Advertising


See more of the issue here.

Issue No. 190: Am I Typecast?

Last Word: On proprietary products and eCommerce


Issue 189’s most read article contained four indicators of eCommerce success, one of them is depicted above. Internet retailers are nearly 3x more valuable when they source and/or manufacture a product that cannot be found elsewhere.

A great example of this is the new initiative of Pittsburgh’s Cotton Bureau, who is relatively quiet startup with a thriving marketplace for well-designed tees. For example, they sold 3,100+ units of one design in January 2017. Their custom site converts exceptionally well, they’re currently sporting a 🔥7.7% conversion rate in 2017.

Led by Michelle Sharp, Cotton Bureau’s Blank will manufacture their own t-shirt blanks and will attempt to do so domestically. The timing couldn’t be better, as American Apparel will leave a void for companies desiring high quality t-shirts for their own branding or product lines.

From yesterday’s announcement:

Today, we’re lifting the lid on Blank, our project to design and produce better t-shirts from the ground up: our sizes, our fits, our fabrics, our colors. Over the last six months, we’ve been building relationships with people all over the garment industry: pattern makers, fabric suppliers, cut-and-sew operations, industry consultants, full-service apparel factories, fit models, and more. We’ve even produced a few samples. We’re going to need all the help we can get, which is why reached out to for funding last year (remember this cryptic line?) and hired a project lead to give it the attention it deserves (we’ll introduce her in a bit). Exciting, huh? It’s something we’ve been talking about forever, and the fact that it’s actually happening is a bit surreal. Let’s answer some questions.

Read more about Cotton Bureau’s “Blank” initiative here. If you’d like an introduction, email and I’d be happy to connect you to their team. Cotton Bureau is one of four partners. – @web

See more of the issue here.

Issue No. 182: Still in Early Innings.

Graphic of the Week:


This recent graphic from CB Insights was a great illustration of how fundraising is tied to the startup hype cycle. Represented are three real companies in the DNVB mattress industry: 1) Casper 2) Tuft & Needle 3) Saatva. Casper receives the overwhelming mindshare of press mentions while Tuft & Needle and Saatva appear to be in a much healthier position for longterm growth.

See more of the issue here.