Can startups make their own mafias?


March 4, 2020

Hugo Boss tried to show people who’s the boss, but it backfired. The German fashion giant sent cease-and-desist letters to some businesses with “Boss” in their names. So a British comedian changed his name to Hugo Boss in protest. The fashion house said it welcomed “the comedian formerly known as Joe Lycett as a member of the Hugo Boss family.”

Today:

  • Startups fund their alumni with guile
  • Greenland’s tourists go the extra mile
  • Gender-neutral toys come into style
How to Make a Mafia

Eager to make their own ‘mafias,’ startups are launching funds to invest in ex-employees

After former PayPal employees went on to launch a string of hugely successful companies — including Tesla, LinkedIn, SpaceX, YouTube, Yelp, and Palantir — people started calling PayPal’s unusually successful alumni the PayPal mafia.

Over the years, ex-employees from many other companies have tried to mimic the PayPal mafia, with varying degrees of success.

But now startups are starting to actively make their own mafias by launching venture funds designed to keep things in the family.

So, how do you make a mafia?

Most analysts agree that PayPal’s alums succeeded because their time at PayPal encouraged them to do the following when launching new businesses:

  • Embrace transparency
  • Reject hierarchy
  • Encourage competition 
  • Align their company values
  • And, perhaps most crucially, lean heavily on their network of former colleagues for recruiting, support, and investment

PayPal’s Cosa Nostra had imitators

Ex-employees from successful startups — led by their own dons and consiglieres — developed their own mafias:

In both of these cases, the mafia-making was driven by employees who had already left their original employer, not by the employer itself.

Now companies are getting into the family business 

Earlier this week, an HR startup called Lattice launched a venture capital fund specifically to invest in its own ex-employees.

The fund, called Invest In Your People, makes employees a $100k offer they can’t refuse on just 3 conditions:

  • The employee must have worked at Lattice for 3+ years
  • The employee must leave on good terms
  • The employee must launch the new company within 12 months 

Lattice’s fund will draw its cash from the company coffers, not a separate investment fund. 

And since the investments will give Lattice equity in the new companies, they’ll also give investors in Lattice a stake in employee spinoffs.

After all, as they say in the biz: Startups are a dish best served sold.

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Travel Trends

The hottest summer travel destination is… the Arctic

Greenland wants a piece of Iceland’s cold, hard tourism cash. 

Since 2015, Greenland’s neighbor to the south has witnessed a massive travel boom. But Iceland’s influx of tourists has pushed up the prices of hotels and flights there.

That means Greenland, which has recently made the news mostly for embarrassing headlines about a US effort to buy it, has an opportunity to rebrand — and capitalize.

If tourists are willing to visit a place called Iceland, the island figures, surely they’d be thrilled to parachute into Greenland. 

Greenland is renovating a pair of airports to bring direct flights from the US and Europe for the first time. And travelers’ hunger to visit a giant, melting ice cap may be growing: Last year, 60+k tourists moseyed over to the remote island — close to 2x the number of visitors it hosted 3 years ago. 

Hope you enjoy ice beds!

Greenland is not exactly built for ease of travel. There are only ~50 Airbnbs, even fewer hotels, and no major roads. 

Only 1 in 20 residents owns a car. To traverse the icy expanse, tourists usually drop vast sums of money on helicopter flights.

That hasn’t stopped hardy travelers

According to CNBC, the Nordic-focused travel agency 50 Degrees North has witnessed a 400% rise in bookings. Some of that frenzy may trace back to President Trump. 

After the US floated the idea of buying Greenland last year, travel agencies reported a surge in Greenland-themed search traffic.

Chillingly, Greenland’s tourist push is arriving right as the island itself shrinks. Its major ice sheet has lost 3.8T tons since 1992. 

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Child’s Play

California might smash the gender binary in the toy aisle

Lawmakers in California are considering a bill that would prohibit department stores from separating toys, clothing, and other kiddie wares by gender. 

The bill applies to retailers with 500+ employees. Starting in 2023, businesses that receive a violation notice would have 30 days to smash the toy-aisle patriarchy, or face a $1k fine.

Feminist Hulk would’ve been proud

To the bill’s supporters, separate aisles for “boy’s toys” and “girl’s toys” make about as much sense as Toothpaste for Men and Pens for Her (although the Amazon reviews for the pens are pretty great).

They don’t want Billy to be bullied just because he’s into Barbie.

As you’d expect, the bill is controversial. Several commentators said the Golden State has bigger priorities to focus on, whether you think the cause is noble or nuts.

Some stores are already ahead of the curve

Five years ago, Target said it was phasing out gender-based signs in its stores. Tastes change, and in some cases, gender-based suggestions might be more passé than gender-reveal parties. (Seriously: Those stunts can be dangerous.)

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Putting the ad in Adderall

Big pharma, big spenders: Drug companies push pills with social-media ads

Just when you thought Facebook ads couldn’t get any creepier, Big Pharma is saying, “Hold my Lexapro.”

Pharmaceutical companies are spending huge sums to promote their drugs on social media, according to The Washington Post

One advertising-analytics firm found that the companies’ spending on Facebook mobile ads nearly tripled over 2 years, reaching almost $1B last year. Pfizer and Merck were among the top buyers.

As usual, it’s all about ad targeting

For Facebook, using people’s medical histories to target them with ads is a no-no.

Drug companies often don’t want that information anyway, since having it risks violating privacy laws.

But there are other ways to reach potential patients…

… like using geographic data to advertise in areas with high rates of a certain disease.

Other workarounds: sponsored posts from influencers, or “unbranded” campaigns that raise awareness of a disease without naming a specific drug. 

Now, if only they could figure out what rhymes with Lexapro…

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🏆 For the first time ever, 2 women are sharing the top prize in architecture.

🏙 Tech outposts in Middle America have a long way to go before they can catch up with power centers like Silicon Valley. Nearly half of all new tech jobs from 2010 to 2018 were concentrated in just 10 metro areas.

🥖 What to do with a huge surplus of dragon fruit? Turn them into bright pink baked goods, and watch your sales soar.

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