IPO aftermath


September 30, 2019

Hustle Logo

Today, the attack-dog market comes to focus, and seasonal pop-up stores are more than a bunch of hocus-pocus, but first…

The Hustle Daily Email

A rough year for IPOs has led investors to rethink their strategies

It’s hard out there for startups, and this year has been especially cruel to companies going public. 

As recession rumblings get louder, more investors will be saying no to the IPO if companies can’t produce big profits… and that’s true for even the biggest names.

Last week was rough…

Endeavor Group Holdings — a large Hollywood talent agency owner — scaled back its offering after the stock market said “meh.” 

Peloton’s debut disappointed. Uber’s shares hit an all-time low after the company reported a second-quarter net loss of $5B+. And WeWork … well, you know.

Since going public 2 years ago, meal-kit OG Blue Apron’s customer count fell from 1m to 550k. At one point its stock price dipped so low it was in danger of being delisted from the NYSE.

What’s the common denominator?

Few of these companies are raking in the cash. But that doesn’t make them anomalies. 

Last year, more than 80% of companies filing IPOs were unprofitable… and they still cleaned up. That’s because the market at the time favored growth and novelty over profit.

We’ve seen this before

Think back to the early 2000s when investors were hot for internet-based companies… and then came the dot-com crash. 

As the US-China trade war heats up, investors are looking closer at balance sheets and bottom lines. 

Meanwhile, the market conditions these companies are seeing could spell trouble for the broader market. Buckle your seat belts, kids.

Share on Facebook Share on LinkedIn Share on Twitter View in Browser
   

1 million new users added per month

Forget breakneck, that’s Strava-speed. Mark Gainey, the Co-Founder of Strava, is speaking at Hustle Con. He’ll be sharing his company’s growth tactics that grew the “app for cyclists” to a worldwide network of over 40m athletes. Can’t wait until December 2nd? Get a sneak-peek into Mark’s growth madness in our latest speaker profile.

Read the full story →

Retail got you down? Try a pop-up!

Pop-up shops used to be the domain of small brands testing the waters before plunging to brick-and-mortar — as well as Halloween stores pushing packaged costumes and blaring ghoulish laughs on loop.

Now, well-known retailers like Amazon, Target, Costco, and Nordstrom are in the game, and a new biz model is cropping up around temp spaces.

Pop-ups are gaining pop-ularity

Pop-ups are attractive because they’re low risk and high reward. Brands can try a location and decide whether to plant roots or move on depending on how they fare. Committing to a 2-month lease is less risky than locking in for 2 years.

Pop-ups also work well as incubators for new product concepts and capitalize on millennials’ thirst for experiences — and penchant for experiences on Instagram.

They also seem to bring in serious coin. Lovesac, a couch company that will host pop-ups in Costco this fall, says its pop-up biz brings in 10% of annual sales.

More vacant retail spaces make the pop-up biz viable

In the past, landing a short-term commercial lease was tough. Now, with retail vacancies on the rise, temp leases don’t look so bad to landlords.

Several “Airbnbs of” temp retail spaces now exist including Storefront, PopUp Shops, and Appear Here — proof of pop-up-ularity. Storefront currently lists over 10k spaces, largely in big cities, and the site’s CEO says bookings and revenue have grown by triple digits each of the past 3 years.

Share on Facebook Share on LinkedIn Share on Twitter View in Browser

Fighting Fidos: The latest entry in the growing home security market

Introducing Harrison K-9, the company that trains and sells security dogs for all of your home protection needs. 

The South Carolina-based pup provider selects elite European German shepherd puppers from Germany trained in obedience, scent-tracking, attack commands…oh and they’re trilingual (…another day, another animal more accomplished than I am). 

Snuggly and safe — what’s not to love? 

Well, the price tag, which fetches around $50k (and up to $230k for top-shelf tough fluffs). But Harrison’s happy customers — which consist largely of athletes, execs, and solo women — say you can’t put a price on safety. 

The company’s founder sees these doggos as a complement to the rising market for home protection products like “smart” doorbells. Another plus: As of this writing, there have been no reports of dogs surveilling their owners and selling their data.

Share on Facebook Share on LinkedIn Share on Twitter View in Browser

Small business of the week: The Sabré brothers ditched dentistry to sell online leather goods

Every Monday, we feature a company started by one of our readers. Want your story featured? Fill out our Small Business Survey. Want to see the anonymized financials of all 500+ companies? Subscribe to Trends.

Omar Sabré had his dental degree, and brother Zane was working toward his, when their father was diagnosed with leukemia. The family’s finances could no longer support Zane’s schooling, so Omar gave him $30k to keep working toward his degree.

Meanwhile, the family needed to find another financial support system, quickly. Pairing their detail orientation with Zane’s affinity for personalized goods, Omar invested another $45k of personal savings to create Maison de Sabré, a personalized leather-goods company.

Rookies in ecommerce, they learned all they could from Youtube tutorials and spent a year experimenting before introducing a luxury phone case. The case, made from bovine leather and individually monogrammed, sold from Day 1. Since then, the brothers have expanded to personalized card holders, clutches, and wallets.

Two years later, they’ve become so proficient at online marketing, they’ve sold leather goods to customers in over 100 countries.

Zane has since graduated from dental school, but the Sabré brothers have given up dentistry to go full-time on the business, expecting $8.6m in sales this year. Next year, they plan to launch an apparel line.

Stats at a glance:

  • Founders: Omar and Zane Sabré
  • Employees: 14
  • Years in business: 2
  • Cost to launch: $45k
  • Funding methods: Personal savings
  • 1st-year revenue: $1.9m
  • Current annual revenue: $8.6m
What Else…

Pumpkin spice is king. ‘Tis the season — actually not really. Starbucks busted out the Pumpkin Spice Lattés during the tail end of a near-nationwide heatwave on August 27th — the earliest date ever for the cult-bev-classic that the coffee colossus launched to stardom in 2003. 

These days, the pumpkin spice plague has spread far beyond the foo-foo grandé. Last year, Forbes valued the pumpkin spice industry to be worth an estimated $608m

That’s a lot of tickle for a spice mix. Here are our favorite outlandish pumpkin spice combos said in our best Bubba from Forrest Gump voice:

Smelly telephones, gang? Seriously?

SPONSORED

Today’s investing tip: Diversify with real estate

THE PROBLEM: Premium real estate is one of the best ways to diversify your investment portfolio, but it can be difficult to break into when you’re stuck picking from the leftovers of big institutions. 

THE SOLUTION: Fundrise is the first online platform that lets you easily invest in private market real estate at an institutional scale. Fundrise gives you affordable access to a portfolio full of major real estate projects, with big potential for long-term growth and cashflow. 

THE DEETS:

  • Score 8.7-12.4% historical annual returns
  • Low cost access to private market real estate with minimal fees 
  • Each portfolio is powered by real-life assets, hand-picked by Fundrise’s experienced management team
  • Funds feature a variety of properties like new construction condos in Los Angeles and townhomes in Charlotte, NC
Time to diversify

*Here’s all the legal jargon we know you love reading.

How did you like today’s email?
love it
meh
hate it

Now Playing Now Playing:
Hey, I’m Just Like You, Tegan and Sara.
[%Count%] Share the Hustle
REFERRALS
[%URL%]
YOUR UNIQUE URL
Caroline Dohack
Caroline Dohack
CONTRIBUTING WRITER
Wes Schlagenhauf
Wes Schlagenhauf
STAFF WRITER
Emily Kelley
Emily Kelley
CONTRIBUTING WRITER
Steph Smith
Steph Smith
SENIOR ANALYST
Bobby Durben
Bobby Durben
AD WRITER
Meg Furey-Marquess
Meg Furey-Marquess
MEDIA STRATEGIST
Mia Sullivan
Mia Sullivan
CONTRIBUTING WRITER
Brad “Attack-frogs, please” Wolverton
HEAD OF CONTENT
Lorraine, Alsace
Staff Geographer
SUBSCRIBE JOBS ADVERTISE EVENTS SHOP
Facebook Instagram YouTube
You opted in by signing up, attending an event, or through divine intervention. 251 KEARNY ST. STE 300, SAN FRANCISCO, CA 94108, UNITED STATES • 415.506.7210 Never want to hear from us again? Break our hearts and unsubscribe
The Hustle

Daily briefings, straight to your inbox

Business and tech news in 5 minutes or less

Join over 1 million people who read The Hustle

Psst

How'd Bezos build a billion dollar empire?

In 1994, Jeff Bezos discovered a shocking stat: Internet usage grew 2,300% per year.

Data shows where markets are headed.

And that’s why we built Trends — to show you up-and-coming market opportunities about to explode. Interested?

Join us, it's free.

Look, you came to this site because you saw something cool. But here’s the deal. This site is actually a daily email that covers the important news in business, tech, and culture.

So, if you like what you’re reading, give the email a try.