Category Archives: trend

No surprise, a lot of unicorns are actually donkeys.

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( Source : https://medium.com/@abhasvc/unicorns-vs-donkeys-your-handy-guide-to-distinguishing-who-s-who-f1b30942b2b6 )

I’ve been having this conversation a lot lately:

Friend: “Did you see [startup] just raised at a $1B valuation?”
Me: “Unbelievable.”
Friend: “They’re apparently killing it on [metric that is meaningless without the bigger picture].”
Me: “Yeah, but their [metric that also matters] is struggling.”

I am by no means the unicorn prophet, but here’s how I think about which companies have earned their unicorn status vs. which ones are playing a dangerous game of massive capital needs, sky high valuations, impossible expectations, and deferred judgement days. Hopefully, by the end of this post, you’ll have an intuitive feel for which startups actually have a shot at being unicorns and which ones are probably just donkeys.

The Fundamental Law of Growth

LTV = Lifetime Value of a Customer; CAC = Cost of Acquiring a Customer

Like Newton’s laws of gravity or momentum, most tech startups (see exceptions below*) who sell directly to their customers — both enterprises and consumers — must eventually obey the Fundamental Law of Growth: LTV/CAC > 3. There’s a lot of nuance as to why — a discussion that is better suited for a semester-long class than a blog post — but suffice to say that the LTV/CAC ratio speaks to a startup’s revenue trajectory, capital needs, and in turn, how much “irrational exuberance” is demanded of its investors. The lower the LTV/CAC ratio, the less efficient a company is at deploying capital and the more money it needs to fuel growth; conversely, the higher the LTV/CAC ratio, the more efficient the company is and thus the more value it creates for the same amount of capital. Though this can be derived, many before me have empirically observed that 3x is roughly the threshold needed to build big, sustainable businesses.

Assessing a company’s valuation is a discipline on its own and growth is only one factor in that calculation. However, for simplicity’s sake, one can assume that tech companies who don’t obey the Fundamental Law of Growth will eventually lose access to capital, drastically slow their growth, and watch their valuations plummet — those fabled unicorns will eventually emerge as donkeys. So with that, let’s dig into some examples…

*Companies whose value is not predicated on revenue (e.g., disruptive technologies, monopolies, social networks, intellectual property) as well as companies where revenue is achieved indirectly (e.g., ad-tech networks, certain marketplaces, certain viral growth startups) or discontinuously (e.g., government contractors) typically do not follow this rule


For each example, I’ll make assumptions about the various components of the LTV/CAC ratio (see below); some assumptions are based on publicly available data and others are just gut feels. If it’s the latter, I’ve generally erred on being generous to the startups.

ARPU = Average Revenue Per User

Case Example #1: HelloFresh, Subscriptions Meals

  • Customer Lifetime — in my household, we usually try each meal subscription company for a few weeks then switch it up, but let’s assume the average across all customers is 3 months or 0.25 years
  • ARPU — average revenue is probably 2 people, 3 meals per week, 3 weeks per month, so $60/week x 3 = $180/month or $2160/year
  • Margin % — we know from Mahesh’s excellent IPO filing teardown that their margin is 52% (sign of a strong operating team; that’s higher than I expected for this type of business!)
  • CAC — given the numerous other meal subscription companies, brick and mortar competitors, etc., it feels like the CAC is probably in the hundreds, say $400
LTV/CAC = 0.25 years x $2160/year x 52% / $400 = 0.70x

Under these assumptions, HelloFresh is an incredibly capital intensive company because of the (presumed) low customer lifetime/high churn. We know from the IPO filing that HelloFresh grew its revenue from $77M in 2014 to $290M in 2015 (276% growth), so you can understand why someone would say, “They’re killing it on revenue!”. We also know that the company didn’t report cohort retention data, but as per Mahesh, “they do mention that they achieve 2.8x LTV/CAC after two years.” Hold up, come again?Reporting LTV/CAC for only a subset of customers is disconcerting, and even then, it’s just under 3x; substituting 2 years into the LTV/CAC ratio suggests that the true CAC may be much higher ($800). Other food subscription and even some on-demand meal companies — Blue Apron, Plated, Instacart, Munchery, Sprig, etc. — may similarly have short customer lifetimes/high churn and thus low LTV/CAC ratios, thereby also violating the Fundamental Law of Growth.

Verdict: Donkey Watch

Case Example #2: Evernote, Productivity Software

  • Customer Lifetime — I use Evernote constantly, so I expect if anyone is going to have an extended lifetime, it’s them. But as a rule of thumb, lifetimes >3 years should only be considered in exceptional circumstances
  • ARPU — in most freemium products, paid customers make up only a tiny fraction (<5%). Nevertheless, let’s assume 25% are premium users at $50/year, so a blended ARPU of .25 x $50 = $12.50
  • Margin % — pure SaaS company with no customer service costs should probably achieve 70–90% margins, so let’s go with 90%
  • CAC — freemium models typically land in the $1–$100 CAC range, so let’s assume $20
LTV/CAC = 3 years x $12.50/year x 90% / $20 = 1.69x

Evernote has great customer lifetimes, margins, and low CACs; however, because their pricing is low, their overall LTV is limited and thus results in a low LTV/CAC ratio, again violating the Fundamental Law of Growth. Evernote could compensate by increasing pricing, but with other readily available substitutes (Google Docs, Microsoft OneNote), increased pricing likely increases churn too, so the pressure is on Evernote to then increase ARPU by increasing value (additional products, collaboration tools, AI insights, etc.).

Verdict: Donkey Watch

Case Example #3: Oscar, Health Insurance

  • Customer Lifetime — once you join an insurer, you typically stay with them until you switch jobs/get a job. <1.5 years is probably the average, but let’s use 2 conservatively
  • ARPU — $5000; saw this in an Oscar press release and it’s fairly typical of this market
  • Margin % — healthcare insurers have gross margins in the 5–10% range with a max of 15% as mandated by Obamacare, so let’s go with 15%
  • CAC — this is an expensive product for consumers to purchase and probably requires a light-touch inside sales team, so let’s assume CAC is $800
LTV/CAC = 2 years x $5000/year x 15% / $800 = 1.88x

Similar to HelloFresh, Oscar is posting massive revenue ($200M) and growth rates (135%), so you can again understand the hype around them; however, Oscar fails the Fundamental Law of Growth due to its low gross margins. If the Oscar team can achieve a CAC near $500 — perhaps because they’re the hip/fresh insurer on the block with best-in-class marketing — then maybe the company can still grow a horn, but that’s asking a lot given the inherent complexity and cost of the product. Recently, a number of other companies— Jet.com, Instacart, etc.— have built fast-growing businesses that operate on low margins, but they too are at risk of breaching the Fundamental Law of Growth.

Verdict: Donkey Watch

Case Example #4: ZocDoc, Online Physician Reservations

  • Customer Lifetime—I’ve heard that physicians typically churn after a year once they’ve established a sizable patient base, but let’s assume 2 years
  • ARPU — $3000 (publicly available)
  • Margin % — SaaS company with light-touch customer service should probably achieve 60–80% margins, so let’s assume 80%
  • CAC — Selling to physician practices must be challenging, so like any high-touch inside sales operation, ZocDoc’s CAC is probably in the $1–10K range; let’s assume $3K
LTV/CAC = 2 years x $3000/year x 80% / $3000 = 1.60x

ZocDoc has a good LTV overall, but their CAC is likely a show-stopper. Unfortunately, there’s no getting around that — selling to physicians is tough stuff, just ask Pfizer. Also, as competition increases, customer lifetimes and pricing erode too, further driving down the LTV/CAC ratio. I suspect this is why ZocDoc is shifting sales to hospital system customers (1000x higher LTV and only 20x higher CAC), but hard to know what fraction of their business this constitutes. Although I am not familiar enough with the unit economics of fantasy sports startups, I suspect that FanDuel and DraftKings may similarly be spending heavily on customer acquisition without the supporting customer lifetimes or ARPU needed to satisfy the Fundamental Law of Growth.

Verdict: Donkey Watch


Concluding Thoughts

I hope this framework gives you a better sense of how to evaluate today’s unicorn landscape. The companies above all have impressive, press grabbing growth metrics, but they also fail the Fundamental Law of Growth for different reasons — short customer lifetime, low pricing, low margin, and high CAC — so must be viewed with some skepticism.

The most obvious next question is: if the Fundamental Law of Growth is so simple, why did investors grant $B valuations to these companies and others in the first place? I believe the answer is a combination of downside protections, upside overoptimism, and what can only be described as FOMO.

Downside protections are being prominently discussed now in light of Square’s down round IPO (albeit still in unicorn territory); to put it simply, late stage investors have (smartly) insulated themselves from losses, so they’re willing to give more on valuations. With regards to upside overoptimism, I imagine that when these rounds were executed, both investors and entrepreneurs believed that things would look up — customer lifetimes would extend, ARPU would increase, margins would expand, and CACs would decline. Alas, it doesn’t always pan out that way, which is why we encourage our portfolio companies to stay conservative on valuations: big up rounds can be appealing in the short-term, but when companies stumble (which they often do), the subsequent down rounds can be outright devastating. Zenefits, for example, is likely to feel that pain shortly given their recently exposed stumbles.

Personally, I’m looking forward to a private market correction. I feel my colleagues and I have done a good job building a portfolio of companies with sound fundamentals and well-earned valuations; a return to sanity would be a welcomed change, as it would unlock quality talent that we can then direct to our companies and others who are playing the prudent, long game.

KPCB’s Mary Meeker presents the 2015 Internet Trends report

KPCB’s Mary Meeker presents the 2015 Internet Trends report, 20 years after the inaugural “The Internet Report” was first published in 1995. Since then, the number of Internet users has risen from 35 million in 1995 to more than 2.8 billion today. The 2015 report looks at key Internet trends globally – while still healthy Internet user and smartphone subscription growth continue to slow, Internet engagement continues to rise led by consumers spending more time on their mobile devices, where they can be connected 24/7. Mobile advertising still has headroom to expand and new innovations around ad formats and buy buttons should prove compelling for consumers and businesses.

We are re-imagining more and more aspects of our daily lives, as mobile users and entrepreneurs continue to push innovation and creative output across new online platforms. User-generated / curated / shared content continues to rise, ranging from pins on Pinterest to videos on Snapchat and Facebook. Business processes continue to be re-imagined, led by companies aiming to make data more useful and services more efficient. Demographic shifts are helping to accelerate technology changes. Millennials are now the largest generation in the workforce and their work / life expectations differ from previous generations. As connectivity and commerce continue to rise, we have witnessed broad impacts on consumer expectations, which in turn can alter work for many, to a form of work that can be flexible and supplemental. Looking internationally, Chinese Internet leaders continue to innovate, while India is on-track to become the second-largest Internet market in the world.

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Google’s mission is to organize the worlds’ information, but they won’t stop there

( Source : http://www.web-strategist.com/blog/2015/02/03/google-enters-the-collaborative-economy-in-a-big-way/ )

Here comes Google, with a series of five market moves injecting them as a central player for the collaborative economy.

Google’s mission is to organize the world’s information. But it doesn’t just start and stop there. They also want to organize the world’s logistics, commerce, local transportation, service economy, and even how people obtain and receive loans.

In the past, our perspective of the Collaborative Economy has been through startups, like Airbnb, oDesk, Lyft, Uber and Lending Club that enable people to get what they need from each other, using commonly available technologies like online marketplaces and mobile apps.

Today, Google has entered the Collaborative Economy with a series of announcements that leave a casual reader scratching their. But placing the announcements line by line, you can see an organized attempt to enter this space traditionally dominated by early stage startups.

  1. Google is a major investor in Uber and Lending Club. They started with investments, a great way to test the waters. Google Ventures made their largest investment in Uber ($258 million), lending promise for a future of a lifestyle and logistics app which enables people to bypass car ownership and more. Then, Google invested in the P2P money-lending platform, Lending Club ($110 million), which enables individuals to bypass traditional banks. This gives Google additional market insight and a foothold from which to deploy.
  2. Google plans to roll out self-driving cars, competing with car manufactures. Last year, Google unveiled their friendly-looking, self-driving car, which they suggest will enable anyone to be mobile, reclaim time driving, and reduce the need for car ownership. In Silicon Valley, I often see self-driving Google cars whizzing around in Mountain View and on the major freeway, U.S. 101. Google suggests that these will be available in mass production for the public within five to 10 years.
  3. Google now resells P2P loans, competing with banks. P2P marketplaces of buyers and sellers are in every aspect of society. Take a look at the Collaborative Economy version 2.0 to see over twelve industries that are impacted. Last month, Google announced they’re going to resell bank loans from Lending Club, reducing the need for individuals to get loans from banks, competing directly on ease and price.
  4. Google partners with Airbnb and Lyft, challenging hotels and taxis. Last week, Google announced the expansion of “Google Now,” a mobile app that intends to be the starting point for our daily needs. They will aggregate Airbnb and Lyft data and more, enabling us to quickly and efficiently find the right on-demand services in real time. Don’t expect the partnership to stop there. Just as Google leaned into Open Social to connect with many social networks, they’ll partner with many startups who want to connect their API. Imagine Homejoy, Yerdle, Sprig, Instacart, TaskRabbit, Munchery SpoonRocket, and others.
  5. Google is reportedly building a ride hailing app to compete with Uber. It has been suggested that self-driving cars could be idling in our neighborhoods, waiting for us to order food, groceries, electronics, or even get a ride. With this new system, people are sharing ownership of cars with neighbors, hailing them on demand. It’s worth noting that Uber was absent in last week’s announcement of Google Now, although a partnership with Lyft was announced.

What it means to the Ecosystem:
Google’s announcements, in sequence spell considerable impacts to the entire ecosystem of startups, purists, investors, businesses, merchants, and of course, to the people, here’s how each ecosystem player is impacted:

  • Google will be in a dominant position if they can successfully deploy. Google is the homepage of the internet and, as a result, the start of the Collaborative Economy, as they own the ‘intent’ phase with Google Search. In the future, they’ll organize information about what people need, and be able to deliver in real time, dolling out links and customers to startups, sometimes through their self-driving vehicles.
  • Google and Uber are in a tenuous relationship. Over a year ago, I predicted that Uber + Google is a threat to Amazon. In reality, it looks more like Google may be a threat to Uber and Amazon, as they could potentially offer the same things, but on a broader scale. Google has greater ambitions and, perhaps, the business models (or egos) don’t align at Google and their investment, Uber.
  • Startups have no choice but to evaluate partnering with Google. By connecting to Google Now’s API, they can quickly gain market expansion by potentially being listed in search results, tapping a verified set of Google users, accessing new data types (like intent and location), and accessing historical customer data, all on a proven platform that will stand the test of time.
  • Sharing economy idealists feel threatened as large, tech companies embrace the concept. The notion of quaint neighborhood sharing will quickly be supplanted as Google makes it easy for ordinary people to participate in this new economy. The one difference is that, when sharing is efficient, it actually looks like an on-demand delivery model. I’ll stand firm, that this is tech-based commerce and capitalism, not neo-socialism.
  • Investors embrace Google’s streamlining of the market. This injection of such a large entity further validates the investment thesis that collaboration of unwanted resources in two-sided marketplaces is a profitable business. With Google’s multi-million dollar cash injection and shared offerings of search, apps and self-driving cars, they’ll provide additional market acceleration.
  • Brands seek to separate hype from reality with new commerce models. Many are already deeply hooked into Google’s ad business. Eventually, they’ll have the opportunity to offer their wares, services and solutions on the Google Now platform, as well as connect to various APIs to expand their business reach. Google+ self-driving cars spells opportunity for local merchants, restaurants, and retailers who seek solutions for the ‘final mile’ of delivery.
  • For the people, this mainstreams access to real-time services rather than ownership. Most importantly, for the public, and I mean mainstream, normal people, this provides validity for the Collaborative Economy. Using commonly available search tools or apps, people can quickly get services, rides and products from companies in one trusted space: Google.

Google’s mission is to organize the worlds’ information, but they won’t stop there. They’ll also organize our delivery, our transportation, our food service, our money, and our lives.

Here comes Google. Get ready.

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FireChat, crossing borders

Have you ever had those “off” days, no internet, no service plan, and no credit to make calls, isolated from digital means communication? It’s funny how much you can miss out on, when out of service. There is a relatively new chat service which has harnessed the use of something relatively old, peer-peer, mesh networking. They have created an application that will perform so long as there is another device within a 60 meter radius. As each device picks up on another, the strength and range of your connectivity increases, the bounds of your network are not limited to your neighbour two doors down; your network can extend well beyond the borders of your town.

It is common knowledge that when in a huge crowd, telephone service usually goes gaga as a result of having a significant amount of users in one space, servers often overload. This is the kind of environment which FireChat thrives in, therefore, during the Hong Kong pro-democracy protests FireChat was used as the primary means of communication. Governments are more and more interested in internet surveillance and control and the Chinese Government flat out surveys and controls the internet.. FireChat was a backup resource, should the government have decided to shut down the networks. Mesh networks cannot be controlled as the connections aren’t dependent on the cloud, nor are users logging into a server, the connections are among the devices. With mesh networks, tracking the online presence of users becomes considerably more difficult. People are able to drop off the grid without a trace, providing they were smart enough to use user names, in a sea of peers it becomes difficult to track any one peer.

As a result of the spread of smart phones, Open Garden the creators of FireChat, have developed an application that can interact with both cell service and Wi-Fi and also operate on the mesh network to fuel more than just a chat, but also create a web of users that can ultimately feed off each other. People could connect and communicate without the use of Wi-Fi or a telephone signal. They could also get interactive access via the ever growing network of users.

One major drawback of FireChat is its inability to create private chats; users aren’t able to filter who contacts them. This means you are privy to a wide range of different language and opinions, the good, the bad, the ugly and plain old nasty. Cross platform communication is also limited, cross platform nearby chat is unavailable between iOS and Android.

FireChat has implemented what so many others have tried to in the simple form of a mobile application; this is but the beginning as they seek to further unlock the possibilities which exist peer-peer. Based on technology, this is a great application, based on function, although it was great during the Hong Kong protests, other protest and events the like there is some fine tuning that needs to be done in order give users the best and most secure experience available peer-peer

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Finance: ‘We Can Reinvent the Entire Thing’

Twitter. Facebook. AirBnB. Marc Andreessen, co-founder of the $4.2 billion venture capital firm Andreessen Horowitz, has backed them all — along with dozens of others. His latest project? Upending finance. Bloomberg Markets magazine interviewed Andreessen at the firm’s headquarters in Menlo Park, California.

Out With the Old

“We have a chance to rebuild the system. Financial transactions are just numbers; it’s just information. You shouldn’t need 100,000 people and prime Manhattan real estate and giant data centers full of mainframe computers from the 1970s to give you the ability to do an online payment.

‘‘You would not today, starting from scratch, invent any of these financial businesses in the same way. To me, it’s all about unbundling the banks. There are regulatory arbitrage opportunities every step of the way. If the regulators are going to regulate banks, then you’ll have nonbank entities that spring up to do the things that banks can’t do. Bank regulation tends to backfire, and of late that means consumer lending is getting unbundled.”

In With the New

“We’re not going to go backward. When people start doing things a better way, it kind of doesn’t matter what the old way was. You can find people who will say that this is all just an arbitrage on the current trouble in the financial system, and I’m sure the big traditional banks will fight back and try to get things outlawed.

‘‘But think about the scenario of a loan officer talking to a prospective client. To software people, that looks like voodoo. The idea that you can sit across the table from somebody and get a read on their character is just nonsense.

‘‘Lots of industries are changing in a similar way. There’s been a qualitative approach, and now, there’s a quantitative approach. Everybody who grew up in the qualitative approach hates the quantitative approach and considers it a giant threat.”

Big Data

http://www.bloomberg.com/news/2014-10-07/andreessen-on-finance-we-can-reinvent-the-entire-thing-.html

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Ello CEO Paul Budnitz: “We Are Not Here to Compete With Facebook”

Social network Ello, which operates in Vermont, is riding the rocket ship usually reserved for Silicon Valley’s hottest consumer tech startups.

The ad-free social network, which has to be the most well-known product from the Green Mountain State since Ben and Jerry’s launched in the late ’70s, has taken the tech world by storm over the past two weeks. The site had just 90 members at the beginning of August and employs “about 10 to 12″ people, according to CEO Paul Budnitz, who also owns a bike company, Budnitz Bicycles. But despite being invite-only, Ello is handling between 40,000 and 50,000 invite requests every hour.*

That means the site is doubling in size every day or two, he says.

So what’s the draw? Ello is thriving because the company and its founders promise users an ad-free experience. The company manifesto heroically tell newcomers “You are not a product,” and Ello says it won’t sell your data — ever. “We’re based in a state that has no billboards — it’s part of who we are, it’s part of our DNA,” Budnitz jokes.

That doesn’t mean, however, it isn’t tracking users. It does collect information, including user location, language, referring Web site and time spent visiting Ello. It does this anonymously, and explains it all in the company’s “About” section on the site.

It does not collect personal information, according to a company spokesperson, meaning things like your gender and age are off limits (you can sign up anonymously as well). Users can also opt out entirely from any data collection should they choose. In other words, Ello has established itself as an alternative to Facebook — and it’s working, at least early on.

So how does a social network with millions of users and a promise for no ads actually plan to work? We interviewed Budnitz to find out.

Re/code: You initially created Ello as a private social network for a small group of friends. What have the past two weeks been like for you given all the attention Ello’s received?

http://recode.net/2014/09/30/ello-ceo-paul-budnitz-we-are-not-here-to-compete-with-facebook-qa/

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  • 67
    Uber’s global expansion has exploded bringing the service to 74 cities since the start of 2011 – the ride-hailing app added 13 new cities in just the first 50 days of 2014 alone – and spearheading this rapid growth are a crack team known as launchers. Described as a blend…
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Alibaba IPO: 5 Reasons Why China’s E-Commerce Giant Is Going Public

Until this week, few Americans — outside of tech and investment circles — were overly familiar with Alibaba. But the Chinese company is fast becoming a household name as it prepares to launch an initial public offering that may be the largest in U.S. history.

Alibaba Group Holding Ltd. was founded in 1999 by flamboyant entrepreneur Jack Ma, who last week celebrated his 50th birthday. Think of it as Amazon, eBay and PayPal rolled into one. Alibaba.com connects buyers and sellers of industrial and commercial goods and services in China. Its Taobao unit is the country’s largest online shopping portal, and its Tmall group is China’s biggest business-to-consumer platform.

In the second quarter, Alibaba posted revenue of $2.5 billion, up 46 percent from the previous year.

So why does Ma want to become answerable to a board of directors, regulators, and, ultimately shareholders by going public with an IPO slated for Friday? Alibaba’s filings with the U.S. Securities and Exchange Commission shed little light on his motivations.

“We plan to use the net proceeds from this offering for general corporate purposes,” Alibaba said in boilerplate language included in its F-1 registration document.

But clues to Ma’s goals can be gleaned from his past statements, from sources close to the company, and a look at Alibaba’s future opportunities — and current weaknesses.

Here are five reasons why Alibaba may be about to launch an IPO that analysts estimate could raise as much as $20 billion to $25 billion:

http://www.ibtimes.com/alibaba-ipo-5-reasons-why-chinas-e-commerce-giant-going-public-1690759

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    In 2009 Twitter was a 50-person company punching way above its weight in cultural impact, its micro-blogging platform blasting its way into the public imagination. But its ambitions were even higher. According to leaked internal documents, the company had privately set goals over the next few years of a billion…
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    Square is starting to look oddly hollow. The payments company, set up and run by Jack Dorsey, is set to raise $200 million in new financing, according to Bloomberg. That would value the company at $6 billion. While big, it’s a deflated figure, considering Square’s former hype, the small amount…
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10 Cities Around The World With The Most Job Opportunities

Thanks to PricewaterhouseCoopers’ (PwC) 2014 report on Cities of Opportunity, job seekers have a handy list of some of the best cities to find a job across the world. Using 10 indicators to look at the factors that contribute to a well-balanced city, the study compared 30 different cities and ordered them based on how they rank for the most opportunities. Below, we take a closer look at the top 10.

http://www.lifehack.org/articles/work/10-cities-around-the-world-with-the-most-job-opportunities.html

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    Uber’s global expansion has exploded bringing the service to 74 cities since the start of 2011 – the ride-hailing app added 13 new cities in just the first 50 days of 2014 alone – and spearheading this rapid growth are a crack team known as launchers. Described as a blend…
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  • 69
    Social network Ello, which operates in Vermont, is riding the rocket ship usually reserved for Silicon Valley’s hottest consumer tech startups. The ad-free social network, which has to be the most well-known product from the Green Mountain State since Ben and Jerry’s launched in the late ’70s, has taken the…
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  • 64
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A Theory on Long-Term Economic Trends and a Sudden Crash

Employment losses during the Great Recession may have had more to do with factors like the rise of Walmart than with the recession itself, two economists say in a new academic paper.

The paper, presented Friday morning at the annual gathering of economists and central bankers at Jackson Hole, Wyo., argues that the share of Americans with jobs has declined because the labor market has stagnated in recent decades — fewer people losing or leaving jobs, fewer people landing new ones. This dearth of creative destruction, the authors argue, is the result of long-term trends including a slowdown in small business creation and the rise of occupational licensing.

“These results,” wrote the economists Stephen J. Davis, of the University of Chicago, and John Haltiwanger, of the University of Maryland, “suggest the U.S. economy faced serious impediments to high employment rates well before the Great Recession, and that sustained high employment is unlikely to return without restoring labor market fluidity.”

http://www.nytimes.com/2014/08/23/upshot/long-term-trends-in-economy-more-worrisome-than-sudden-crash.html

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    The dollar is stronger today following the slightly hawkish stance of the FOMC Minutes, which hinted at the potential for an earlier-than-expected hike in interest rates. Nothing is likely to happen any time soon though, and equities liked that idea in continuing their positive trend, with the S+P regaining its…
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    Brief History of that other economic designed crash of 1929 BBC documentary On October 29, 1929, Black Tuesday hit Wall Street as investors traded some 16 million shares on the New York Stock Exchange in a single day. Billions of dollars were lost, wiping out thousands of investors. In the…
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  • 58
    The Brutal 17-Year War Where Netflix Destroyed Blockbuster — In a Simple Infographic Did Netflix really kick Blockbuster’s ass in a 17-year war marked by endless late fee-related shouting matches and Hot Tamale binges? Kind of. But according to this colorful infographic, it’s more complicated than that http://www.policymic.com/
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Sales technology will replace 80 percent of the jobs

The growth of Amazon and eBay illustrates that businesses and consumers alike are willing to purchase what they need online rather than from a salesperson.

That trend toward online buying will continue, according to Gerhard Gschwandtner, publisher of Selling Power magazine, and host of the Sales 2.0 Conference in Boston on July 14, 2014. “The integration of Artificial Intelligence into such websites increase the products and services that can be purchased online,” he explains.

Gschwandtner estimates that within 10 years, as much as 80 percent of the sales situations currently handled by salespeople will be handled automatically. He also believes, however, that there will continue to be a need for salespeople in the three following situations:

The customer cannot diagnose his own problem.

The customer cannot define a solution

The customer cannot calculate the ROI

http://www.inc.com

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