Weekend Briefing No. 296

Welcome to the weekend.

Quick note: I don’t talk about my law practice much in the Weekend Briefing, but this week and next week I’m going to mention 2 major changes in California law that will impact many readers who run startups and small businesses. If that’s not you, just skip past the second story. Ok… on to the briefing. 

Prime Numbers

7 B – China’s ByteDance, owner of video-sharing app TikTok and one of the world’s most valuable unicorns, booked revenue of $7 billion to $8.4 billion in a better-than-expected result for the first half of 2019.

1 B– PepsiCo issued a $1 billion sustainable bond, with plans to invest the proceeds in sustainable development goals-related investments, such as eco-friendly plastic and cleaner transportation.

.07 – In 2018 there were 8.6 million suits sold in the United States, which breaks down to a mere 0.07 suits per man. In the 1950s that figure was roughly 0.5 suits per man. One reason is that while the most powerful executives in business once felt nude without a suit, today the real power players prefer hoodies or puffy vests.

Couples That Work Don’t Wait

The key to bliss for a dual-career couple? It might be a contract. Jennifer Petriglieri, a professor specializing in management, recalls when her and her husband were first dating: Pen and paper in hand, we each wrote answers to questions that we were well accustomed to asking in our consulting work. But this time the project was us. This will be a meaningful relationship for me if…What scares me is… What I’m willing to give is… What I want is… The lines I’m not prepared to cross are…The lines you better not cross are… Couples that work don’t wait, I found, to discuss openly and deliberately what they want their life together, their couple, to be like. They do it early and often. Otherwise, a couple’s contract is set implicitly, and they end up with a sense that life keeps throwing surprises at them, their love strains to adjust, and they are not sure why. This is especially important at the 3 major transition points, each transition revolves around a critical question. The first, ‘How can we make this work?’, comes early in a couple’s relationship, when they need to combine parallel lives into one joint one. The second question, ‘What do we really want?’, comes when couples can afford to be fed up with doing what they feel they ought to do. The third, ‘Who are we now?’, hits when the commitments that often sustained couples early on—mortgages, children, and career acceleration—are behind them. At each of these transition points, couples who are accustomed to doing the work of talking about what they want, what they need, and who they are, fare much better than those who just try to work out a solution to the challenge of the day. What was written did not matter much. What mattered was that the habit was set, early on, to talk about who we were, and what they hoped their life would be. I learned that the hard way. Wall Street Journal (13 minutes)

AB5

Sometimes well-intentioned legislation goes wrong… in this case horribly wrong. While attempting to give more protection to workers in the gig economy like Uber and Lyft drivers (generally a good thing), the new law essentially destroys the business model of every early stage startup, agency, studio and small business in California. Here’s the lay of the land in 3 questions: (1) What’s the new law do? California AB5 sets a new standard for the classification of workers as employees or contractors. The statute codifies a new, much more challenging, standard for contractors. Thus, many workers who are now classified as contractors will be reclassified as employees costing small businesses much more per worker. (2) So, what is this new standard? The new ABC test has three factors: Factor A: That the worker is free from the control and direction of the company in connection with the performance of the work. Factor B: That the worker performs work that is not essential to the work the company does. Factor C: That the worker performs this type of work for others, not just the company in question. (3) Ummm… it sounds like none of my contractors would ever meet this standard, am I reading this right?! If you’re freaked out, you are not alone. I’m working with a bunch of clients to figure out what’s best for them. The law goes into effect on January 1, 2020. If you run a business, have a California presence and are not currently working with an attorney, feel free to reach out. We can design a strategy and implement it before the end of the year. I’m only taking clients on this issue until November 1st. Shoot me an email or schedule a call to discuss. I’ve opened up extra call slots on Monday. Click here to schedule a call.  

Future of Work

There is a well-documented, persistent, and growing racial wealth gap between African American families and white families in the United States. Studies indicate the median white family in the United States holds more than ten times the wealth of the median African American family. As determined in our previous report on the racial wealth gap, African Americans start from a deprived position in the workforce, with an unemployment rate twice that of white workers, a pattern that persists even when controlling for education, duration of unemployment, and the cause of unemployment. African Americans may have a higher rate of job displacement than workers in other segments of the US population due to rising automation and gaining a smaller share of the net projected job growth between 2017 and 2030. By 2030, the employment outlook for African Americans—particularly men, younger workers (ages 18–35), and those without a college degree—may worsen dramatically. Additionally, African Americans are geographically removed from future job growth centers and more likely to be concentrated in areas of job decline. These trends, if not addressed, could have a significant negative effect on the income generation, wealth, and stability of African American families. McKinsey (26 minutes)

On Paper

Perhaps the biggest game-changer in the paper industry has been recycling. Not only does recycled paper save trees, but it also drastically reduces the amount of just about everything else that it uses up. According to one estimate, for every ton of paper that is recycled, 17 tree lives are spared – along with 380 gallons  of oil, three cubic yards of landfill space, 4,000 kilowatts of energy, and 7,000 gallons of water. Check out this really cool interactive feature on the production of paper. BBC (16 minutes)

Hot Chocolate

In July, Ivory Coast and Ghana said they would introduce a “living-income differential” of $400 a ton, to be charged on top of the London futures price. The neighboring nations have the ability to swing prices because they grow around 60% of the world’s cocoa. Both of their harvests dwarf those of Ecuador and Nigeria, the next-largest producers. When physical cocoa prices, including freight costs, exceed $2,900 a ton over the course of a season, the premium will be funneled into rainy-day funds for farmers. According to the World Bank, 80% of cocoa producers, or four million people and their families, live on less than $3 a day. Wall Street Journal (6 minutes)

Email Triage

I get a decent amount of email, not as much as many of you I’m sure, but a decent amount. I get to inbox zero very frequently. I’ve intuitively developed a system over the years, then when I was reading Tiagio Forte’s system, I was like.. yah… I guess this is what I do. Here the email triage system: (1) Archive immediately. This will be probably 60–70% of all messages, as they are basically notifications that just need a quick glance. (2) Reply, then archive. (3) Add to calendar, then archive. You can paste the link to the email in the calendar entry if needed, but this is unnecessary with Google invites, and a quick search will turn up the original email if needed anyway. (4) Create a task, then archive. Hit the keyboard shortcut for the task manager you’re using, write out the task associated with the message, and then archive the email.  (5) Send to Reference app, then archive. You can either forward the email (with accompanying attachments) to your Reference app directly, or you can open links in your browser and save the page from there. (6) Send to Read Later app, then archive. The easiest way to do this with Instapaper is to right-click any link you find interesting, and then click “Add to Instapaper.” But you can also forward it using only keyboard shortcuts. Praxis (17 minutes)

On the Other Side of the Fantasy

Peter Rahal started RxBar out of his mom’s kitchen — then sold it for $600 million. But now, having won that impossible prize most entrepreneurs only dream of, Rahal is faced with a new reality: Who is he now that he is actually living out the fantasy? That’s one of the problems Rahal seems to be grappling with: More money, generally, means less struggle, and if it’s struggle that made him, how does he find that going forward? Here’s life on the other side of the entrepreneurial fantasy. Marker (13 minutes)

Bookshelf

The Millionaire Next Door by  Stanley & Danko. "Why aren't I as wealthy as I should be?" Many people ask this question of themselves all the time. Often they are hard-working, well educated middle- to high-income people. Why, then, are so few affluent. For nearly two decades the answer has been found in the bestselling The Millionaire Next Door: The Surprising Secrets of America's Wealthy, reissued with a new foreword for the twenty-first century. According to the authors, most people have it all wrong about how you become wealthy in America. Wealth in America is more often the result of hard work, diligent savings, and living below your means than it is about inheritance, advance degrees, and even intelligence. The Millionaire Next Door identifies seven common traits that show up again and again among those who have accumulated wealth. You will learn, for example, that millionaires bargain shop for used cars, pay a tiny fraction of their wealth in income tax, raise children who are often unaware of their family's wealth until they are adults, and, above all, reject the big-spending lifestyles most of us associate with rich people. In fact, you will learn that the flashy millionaires glamorized in the media represent only a tiny minority of America's rich. Most of the truly wealthy in this country don't live in Beverly Hills or on Park Avenue-they live next door. Amazon

About the Weekend Briefing

A Saturday morning briefing on innovation & society by Kyle Westaway – Managing Partner of Westaway and author of Profit & Purpose. Photo by JJ Ying.

Should We Work Together?

This newsletter is my passion project. I hope it helps you gain deeper insight and equips you to create meaningful impact in the world. Many readers have asked about how we can work together. I run a law firm for startups. We try to keep it simple by structuring our engagements in two ways: (1) On-Demand Counsel – Flat fee, per project engagements. No billable hour means no surprise legal bills. (2) General Counsel - A simple monthly fee for all your day-to-day legal needs. It’s like getting a subscription to your own general counsel. If you’re interested, let’s jump on a call to see if you’re a good fit for the firm. Click here to schedule a call.   

Weekend Wisdom

There is, I hope, a thesis in my work: we may encounter many defeats, but we must not be defeated. That sounds goody-two-shoes, I know, but I believe that a diamond is the result of extreme pressure and time. Less time is crystal. Less than that is coal. Less than that is fossilized leaves. Less than that it’s just plain dirt. In all my work, in the movies I write, the lyrics, the poetry, the prose, the essays, I am saying that we may encounter many defeats—maybe it’s imperative that we encounter the defeats—but we are much stronger than we appear to be and maybe much better than we allow ourselves to be.  -Maya Angelou