This article reminded me of the class several weeks ago where we discussed discovering and testing your assumptions. This could be an interesting and slightly different angle for uncovering your hidden assumptions.

I know y’all are tired of my retail/fashion posts, but…..

Apparently, Millennials are putting their money where their mouth is. Studies show that shoppers are shifting from fast fashion stores like Zara and Forever21 to online consignment shops. The article calls the online thrift stores “resale disruptors“. Thredup, The RealReal and Poshmark, the three leading resale disruptors, are said to have raised $130 million, $173 million and $153 million in funding to date.

This new practice to buy clothes that are already part of the fashion cycle confirms the objective of sustainability. For the past 5 years, this generation has become accustomed to only wearing articles of clothing for 1-5 wears. This fueled stores like H&M and Forever21 to mass produce clothing. However, if these online thrift stores continue to attract the attention of millennials, they could put a stop to the overproduction of clothes by fast fashion giants–a sustainable alternative to a wasteful practice.

Online thrifting is just one of many disruptive innovations that are fueled by public opinions.

“A way to satisfy a social media-driven constant desire for newness without contributing to the negative environmental impact of buying disposable fashion from companies like Zara, H&M and Forever 21.”

Side note: Who else shops at thrift stores for fun and not for sustainability?

On the topic of funding for startups, here are articles that I found about a start up that managed to raise a considerable amount of money.

ElastiMed, an Israeli start up, specializes in creating devices that leg circulation. These devices are used to treat venous and lymphatic diseases. Recently it was announced that the company won a $1.6M grant from the EU. The company also managed to raise $1M through investors! These funds will be used for further research.

As factors such as climate change, the rising prices of lift tickets, and a lack of affordable housing in ski towns make it more and more difficult for people to live the “ski bum” lifestyle, this article about skiers as entrepreneurs caught my eye. The article notes how “entrepreneurial ski bums” have realized that they can maintain their lifestyles by embracing the remote office and freelance work. Rather than being forced to work in a city such as Denver, two hours away from the closest ski resorts, skiers are using shared office spaces in mountain towns so that they can work and play all in the same place. As the article notes, “If anyone’s used to pooling resources, it’s the ski bum, who wouldn’t blink at splitting a 900-square-foot apartment with four roommates. Sharing desks and business contacts, then, is no problem.” In sum, this fun piece seems to take heart to the idea that “anyone is an entrepreneur.”

Link:http://www.sciencemag.org/news/2017/03/data-check-us-government-share-basic-research-funding-falls-below-50

This is an article discussing the trend toward companies funding research in the United States. Over time, there has been a shift from  funding by government to funding by corporations (porportionally).

“For the first time in the post–World War II era, the federal government no longer funds a majority of the basic research carried out in the United States. Data from ongoing surveys by the National Science Foundation (NSF) show that federal agencies provided only 44% of the $86 billion spent on basic research in 2015. The federal share, which topped 70% throughout the 1960s and ’70s, stood at 61% as recently as 2004 before falling below 50% in 2013.”

The motivation that sparked looking for this information was our discussion in our capitalization lecture about getting grants to do work by the government. We said that a big area to get this was in the area of defense or security. Some people also mentioned some of the downsides of getting funding through the government.

At the end of this post are links to pages discussing sides of whether this trend is good or bad. Some of the articles say that people are skeptical of company research. Some of the articles say they should not be. It is an interesting question. I think an interesting question to consider in light of people’s skepticism is what distinguishes government funding from company funding in a material way? I assume the main driver of skepticism is the fact that companies are profit driven and that could affect what research is pursued and how results that are found are handled in relation to the public. A corporation’s purpose is narrower than the government’s on and individual company basis. At the same time, the private sphere is noted for being more efficient at times, and also for having more resources. The article discusses that this new trend in research involves “basic research,” which means it is not tied to a specific purpose but rather to acquire general knowledge. The corporations also account for the other types of research too primarily.

“Basic research comprises only about one-sixth of the country’s spending on all types of R&D, which totaled $499 billion in 2015. Applied makes up another one-sixth, whereas the majority, some $316 billion, is development. Almost all of that is funded by industry and done inhouse, as companies try to convert basic research into new drugs, products, and technologies that they hope will generate profits. (The pharmaceutical and biotech industry, for example, spent a total of $102 billion on research and development in 2015, according to Research!America, an Arlington, Virginia–based advocacy group.)”

Does that fact change the conclusion of or degree of how good or bad this trend is?

Another interesting piece from one of the articles:

“The NSF data capture another notable trend: a slow but steady rise in spending on basic research by universities and private foundations. Their combined $22 billion investment in 2015 represents a 25% share of the U.S. total, up from 21% in 2010 and 17% in 1995.”

There is definitely more investigation warranted for this idea than what I have provided; however, I wanted to provide the articles and the idea at the least.

further reading:

link: https://www.smithsonianmag.com/science-nature/people-dont-trust-scientific-research-when-companies-are-involved-180963251/

Link: https://www.nytimes.com/roomfordebate/2016/09/20/the-cost-of-corporate-funded-research/the-quality-of-medical-research-not-its-source-of-funding-is-what-matters

link: https://www.nytimes.com/roomfordebate/2016/09/20/the-cost-of-corporate-funded-research/research-accountability-is-needed-to-counteract-industry-subterfuge

I was watching this TED Talk by Tom Hulme and it reminded me of our class discussions on design thinking. He uses shortcuts found through mud paths in cities to describe how to successfully design for consumers. His advice is that businesses need to design for real life, launch to learn and stay responsive. He uses three great examples to explain what he means. If you have time it is well worth your time!

 

After class, I thought about the new ways of funding. Recently, Initial Coin Offerings have become popular. This ICO with the former Mozilla CEO was fully funded in under 30 seconds. I wonder if the investors were paying for the horse (his new browser idea/product) or the jockey (Brendan Eich, a former CEO of Mozilla). Additionally, does the browser he is planning to launch currently work? The class discussion has resulted in me raising these questions when I see popular funding campaigns of new products. I believe the current hype over blockchain and cryptocurrency will result in more of these types of funding results.

Former Mozilla CEO raises $35M in under 30 seconds for his browser startup Brave

I wanted to do some reading on venture capital after our conversation in class today and came across this great article on TechCrunch. The author, Eric Paley, makes the argument that raising less money or money later leads to better companies and richer founders. He uses Zappos vs. Wayfair and TrueCar vs. CarGurus as case studies to prove his point that capital raised is not correlated with better outcomes. Founders should definitely consider these case studies before jumping into bed with the first venture capital firm that looks their way.

Here is the weird company that I brought up in class. I am fairly sure that the tech does not work, but the founders had great conviction. No one was allowed to try the product at the event (weird!).