Weekend Briefing No. 325

Welcome to the weekend.

Did I ever tell you guys that I’m featured in a documentary along with some other friends like Kohl Crecelius? Well, it’s true! The New Breed is a documentary about social entrepreneurship (more details below). We shot this awhile ago, but released it yesterday. I think you may dig it. It will be free for six days, so it’s a really good time to watch. Honestly, what else do you have going on this weekend?

Tonight at 5 p.m. ET, join a discussion of the briefing at our weekly Zoom happy hour: Bourbon & Briefing. If you don’t already have a calendar invite, sign up here. See you tonight!

Also, enjoy my May playlist.

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Prime Numbers

147,000,000 – Kanye West’s Yeezy business’s shoe revenue alone was on track to make $1.3 billion in revenue last year, up 50 percent year over year and enough to score West $147 million in royalties. By comparison, West’s entire music catalog has been valued at about $110.5 million,

2,700,000 – The reopening of a flagship Hermes store in Guangzhou on April 11 hauled in a reported $2.7 million in sales on that day alone, the record for a single boutique store in China.

4.8 – U.S. GDP contracted at a seasonally adjusted annual rate of 4.8 percent in the first three months of 2020. This is the fastest rate of shrinkage since the last recession.

The New Breed

The New Breed—The Rise of the Social Entrepreneur is a new feature documentary, which I’m proud to be a part of. The film captures the journey of three compelling millennials as they start businesses to tackle social and environmental issues, including poverty, homelessness and environmental pollution. It also includes seven short sketches, which illuminate the global forces that have triggered the Social Enterprise movement, tackling topics like colonialism, inequality and “the history of poverty” in simple, fun and easy-to-understand ways. Here’s an exclusive look at the sketch I’m in, tackling the subject of The Profit Motive. The full documentary is available for free, for six more days. Please check it out and help us spread the word by sharing the link with your family and friends. Let me know what you think. newbreed.tv (79 minutes)

Black Hole

Yesterday I posted my first article on Forbes about how entrepreneurs are accessing the Economic Injury Disaster Loan (EIDL) program administered by the SBA. The program has been live for a little over a month, so how is it going? Short answer: not so good. As of April 24, the SBA had approved 38,984 loans for a total of $7,967,174,888. My research shows that: (1) Only 9% of entrepreneurs that applied for EIDL got funded. (2) The process is opaque and frustrating. Forbes (6 minutes)

Profitibility

Despite all evidence to the contrary, there’s more to building a startup than raising venture capital. Even now, founders are finding success without overly relying on VC dollars; some are even sharing profits with their respective employees and customers without the help of traditional funding and Silicon Valley power dynamics. As some investors slow down their funding pace, it has become clear that profitability trumps funding. Plus, venture capital can only take a startup so far when the economy tanks and outside cash streams dry up. According to Indie.vc founder Bryce Roberts, profitability needs to be a habit and founders need to recognize that it’s not a switch they can just turn on. Startups looking to prioritize profitability need to start out as revenue-driven businesses that replace funding milestones with profitability goals. “Genuinely, it’s not rocket science,” he says. “Profitability isn’t this crazy, elusive thing. It’s literally more achievable than a Series A round. It’s way more achievable than a Series B round. If you look at the kind of fall-off between those rounds, most entrepreneurs would be better off finding their path to profitability and scale.” TechCrunch (11 minutes)

Erased

About one in six US workers—more than 30 million Americans—filed for unemployment in the six weeks ending May 1. That number erases all of the net job gains since the Great Recession. McKinsey’s initial analysis, published in early April, found that 86 percent of jobs that the pandemic has made vulnerable paid less than $40,000 a year. Part-time workers were disproportionately represented. But as demand has fallen in multiple industries, growing numbers of full-time and white-collar jobs are being affected. Our updated model finds that as of mid-April, 16 percent of workers earning more than $70,000 a year have become vulnerable. However, almost three-quarters of all vulnerable workers earn less than $40,000 a year. McKinsey (19 minutes)

Amish Health

Amish people spend only a fifth as much as you do on health care, and they outperform us on almost every health metric. What can we learn from them? They can share health care costs the way they want, ignoring any regulations to the contrary. They are genuinely on their own. So, they’ve ended up with a simple system based on church aid. Everyone pays tithes to their congregation (though they don’t call it that). The churches meet in houses and have volunteer leaders, so expenses are minimal. Most of the money goes to “alms,” which the bishop distributes to members in need. This replaces the social safety net, including health insurance. Most Amish people go their entire lives without needing anything else. About a third of Amish people are part of a more formal insurance-like institution called Amish Hospital Aid (AHA). Individuals and families pay a fixed fee to the organization, which is not-for-profit and run by an unpaid board of all-male elders. If they need hospital care, AHA will pay for it. Slate Star Codex (17 minutes)

Premeditatio Malorum

Seneca wrote that the only fighter who can go into the ring confident of winning is one who has “seen his own blood, who has felt his teeth rattle beneath his opponent’s fist … who has been downed in body but not in spirit…” They know they can take getting bloodied and bruised. They know what the darkness before the proverbial dawn feels like. They have a true and accurate sense for the rhythms of a fight and what winning requires. That sense only comes from getting knocked around. That sense is only possible because of their training. In his own life, Seneca bloodied and bruised himself through a practice called premeditatio malorum (the premeditation of evils). Rehearsing his plans, say to take a trip, he would go over the things that could go wrong or prevent the trip from happening. Seneca was always prepared for disruption and always working that disruption into his plans. He was fitted for defeat or victory. He stepped into the ring confident he could take any blow. Nothing happened contrary to his expectations. Ryan Holiday (16 minutes)

Cpt. Tom

Tom Moore, a retired captain who served in World War II, had originally aimed to raise just $1,200 for National Health Service Charities Together when he set out to complete 100 laps around his Marston Moretaine, Bedfordshire, garden before his 100th birthday. Moore completed his walk on April 16, and donations to his JustGiving page reached nearly $35 million, earning him a Guinness World Record for the most money raised by charity walk (individual). Moore earned a second Guinness record on Friday, when You’ll Never Walk Alone, a single he appeared on with recording artist Michael Ball, reached the top of the UK charts. Moore is now the record-holder for oldest person to reach number one in the UK charts at 99 years and 359 days old. UPI (4 minutes)

Most Read Last Week

PPP Experience – Data on 127 entrepreneurs experience applying for PPP loans.

Now What? – Slides from a talk regarding tactical advice for how your company should respond to the financial crisis.

Photos of Earth – 31 images of our world from recent years, each a glimpse into some aspect of our environment, how it affects and sustains us, and how we affect it.

Shout outs!

I want to give a shout-out to the amazing community members that took time (an average of 30 minutes each) to give me some feedback on our firm’s advertising. Check out these awesome people below:

  • Cassi Lowe
  • Natasha Goldstein
  • John Amandolare
  • Sam Mazzeo
  • Jason Richards
  • Russell Menyhart
  • Debbi Brock
  • Todd Gagne
  • Marisa Stableford
  • Katie Burkhart
  • Sharon Sloane
  • Taylor
  • Karen Lorenzo
  • Will
  • Alberto Betancourt
  • Suzanne Klahr
  • Kari thorstensen
  • Robert Clark
  • Mie Dahlquist
  • Nathan Holm
  • Greg Whitehouse
  • Yonatan Glaser
  • Rachel McPherson
  • Lane
  • Rita Fuerst Adams
  • Loretta Depka
  • Terry Hsiao
  • Jill Ultan
  • Sarah
  • Scott Allen
  • Willy Wilson
  • Evan
  • Andy Kaplan
  • George Deriso
  • Jussi Mononen
  • Tom Eggert
  • Adin Miller
  • Ellie Skeele
  • wendy
  • tim bernstein
  • Kevin
  • Aesclinn Donohue
  • Mark Morrell
  • Paul McLain-Lugowski
  • Arthur Jensen
  • Brient Mayfield
  • Steve
  • Chaz Berman
  • Blake Goodfellow
  • Sebastien Provencher
  • Eve Blossom
  • Lynn Rolston
  • Leslie
  • David Cooperstein
  • Natasha Fong
  • Marc G
  • Kyle Lopes
  • Peony
  • Mark lazar
  • Cleveland
  • Crista Renner
  • Boris Fucic
  • Barry Westaway
  • Brigit Helms
  • Chris Altchek

About the Weekend Briefing

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

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 things simple by offering transparent flat fees. We structure our engagements in two ways: (1) Per-project flat fee 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

When someone takes their existing business and tries to transform it into something else, they fail. In technology that is often the case. Look at Kodak: It was the dominant imaging company in the world. They did fabulously during the Great Depression, but then wiped out the shareholders because of technological change. Charlie Munger

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