Fast-growing Madison Reed is eyeing men’s hair next; “We’re going to blow the doors off that market”

Amy Errett’s company, Madison Reed, sells in-home care color. It may not sound like a glamorous business but, as it turns out, is a very durable one, done the right way. Not only has the seven-year-old outfit been slowing chipping away at the dominant personal care giants L’Oreal and Clairol (a division of Coty) that have long controlled what’s currently a $30 billion market, but during one of the most dramatic economic downturns of the past century, it has been attracting new customers for whom a salon has not been an option.

In fact, Errett — who was previously a VC with Maveron Ventures and has a side hustle as a venture partner with True Ventures — says the 300-person company is seeing revenue in excess of $100 million per year and that it will be profitable in the second half of this year. Presumably, that makes it a likely candidate for an IPO in the not-too-distant future.

We talked with Errett earlier this week about the business, which has raised $125 million to date from investors, including True Ventures, Norwest Venture Partners, and Comcast Ventures. We wanted know if, like so many other consumer companies hard hit by the pandemic, it has conducted recent layoffs, whether it is re-opening the brick-and-mortar “color bars” it started launching in the U.S., and where it’s headed next. Our chat has been edited for length and clarity.

TC: Like a lot of direct-to-consumer brands, you more recently began opening real-world stores — color bars — where you had licensed colorists working with your customers. How many did you have at the beginning of this year, before COVID-19 took hold?

AE: We had 12. We are reopening them now with 20 [because we had] eight that were [fully built] but never got opened in March, April and May.  We’ll end the year with 25 and. we’re probably on track to open another 20 next year.

TC: Are they just scattered around the U.S.?

AE: They’re in hubs that we have selected based on the demographics of the women that live in those hubs and what we know from our online business. So they are in Northern California, where we’re headquartered. They’re New York, Dallas, Houston, and the Washington D.C. area. And we’re reopening in Atlanta, adding more in Dallas and Houston, and by year end, we’ll be in Miami and Denver.

TC: Can you comment on the financial metrics of the company? At one point, we’d read the company was doing around $50 million annually with 78% gross margins.

AE: The product margin of the business is in excess of 80%, meaning the actual product; the gross margin of the business, meaning fully loaded, is 60%. The growth has been amazing. We have 300,000 subscribers now, and we’re ahead of 2x the financials [you stated]. We’re a private company, so I don’t disclose [specifics] but we will be profitable the second half of this year.

TC: Obviously, you’ve captured some new customers who couldn’t go to a salon during this national lockdown. What percentage of your overall business do those 300,000 subscribers represent?

AE: It moves from day to day. So 52% of women in the U.S. color exclusively at home; 48% go to salons, some to our color bars; then 25% are called duelists. They’re excessively gray, or they want to stretch out salon appointments, so they do their hair at home [in between bookings].

Typically, 60% of the people that come to us that are salon goers, and 50% are home users. During the surge, the numbers did tip in the direction of 70% of the people that were coming to us were salon goers because they had no other place to go. The good news is that we are retaining an enormous amount of them. The average [subscriber] orders from us every six weeks, then we have people who buy a single box but there are serial one-timers who act like subscribers, so these are startlingly sustainable cohorts compared to typical D2C businesses.

TC: So you didn’t lay off anyone even as you were closing these color bars?

AE: I think seven employees decided they. had kids at work and couldn’t even work on a distributed work basis, but we have not done any furloughing. We closed all of our color bars around March 15. . .and we moved all of our in store colorists to our call center, which was already all certified licensed colorists because our sales is a very technical sale. Every woman in the world has at least five bad hair stories, so we put what I call a belt and suspenders around the advice because the most important thing for a customer at Madison Reed is to get the color right. You get one shot. So we moved these other people to that call center. We bought and sent them headsets at home and taught them about all the tech support in customer service, and thank goodness because our volume was insane.

TC: States are reopening. As colorists return to your stores, what precautions are you taking, and how uniform are your processes across different states?

ER:  We are reopening stores, [most] at first with retail only [where] we’ll get the back and bring it out to you, and [over time] with sensible scheduling. We don’t know when we’ll go back to every chair.

And we’re taking the most stringent guidelines of any state and and laying that across the entire system. So even if a state says that a client  doesn’t need to wear a mask, we’re wearing masks and our clients are wearing masks. Some people don’t want to do that. That’s okay. Then we’re not the right place for people to come if that’s true [because] our clients’ and our team members’ safety comes first.

TC: Last year, you announced a plan to roll out 600 stores, 100 of which would be operated by the company and 500 that were to be franchised. Is it fair to say that those plans are on hold and, if so, are they perhaps permanently on hold?

ER:  We were just starting to sell franchises in February. We actually had our first set of meetings with potential franchisees and we were about to file the documentation that one needs to file for disclosure of franchises — then this happened. And we made a decision right now that for the rest of this year, we’re pushing that decision off. We have not decided whether that’s final or not.

I think one of the things that I’ve learned through all of this. is that making big, broad decisions right now isn’t the smartest thing a CEO can do. The world is just in flux. I can’t tell you with certainty what date we can take people back into our headquarters. I can’t tell you with any certainty if there [will be a] vaccine or a drug protocol of if it’s going to spread again, or there will be hotspots. I can’t tell you and I don’t think anybody can.

TC: Given your traction and your numbers, Is there any reason your next funding event wouldn’t be a a public offering?

ER: This is a massive category that has been widely overlooked. And when you look at the size of the prize — $15 billion alone in the U.S., with repetitive purchase patterns – – it has all the characteristics of a successful–

I’m an investor [too]. I was a GP and open and ran Maveron’s office in the Bay Area. Connie, you and I probably first met while I was being a VC, having a more relaxing life. I’m also a partner at True, so I do invest as well as part of the investment team. And so I’m actually just commenting with that hat on. Like, 80%-plus of our revenues are recurring in this company. At our color bars, we’re the only people who have the ability to use our own product.

TC: Meaning?

The stylist is never going to give the product to most women going to a salon today. They’re never going to say, ‘Oh, you’re going on vacation? Take this home with to you.’ I use Madison Reed, and now I can walk into a Madison Reed color bar and get the same consistency. The same exact color that I could take home, someone’s going to apply for me. That is a game changer in this industry.

We are the only people who are agnostic as to whether you want us to color your hair [in a store] or do it at home [or] buy it at Ulta, our only wholesale relationship today. If you look at L’Oreal, 85% of its business is selling tubes of color to stylists in salons. It is not a direct relationship with a consumer. That is not what L’Oreal has. The direct relationship with the consumer is the box sitting at Walgreens, which is a very small percentage of their business and it’s not a percentage they’re about because the margins are so thin. Remember, they’re charging $10; I’m charging $25.

The secret sauce here [regarding how we beat the personal care giants is that] L’Oreal’s and Unilever’s professional channel [creates] a conflict for them to innovate directly, based on technology or otherwise, to the direct consumer.

TC: So you don’t see them moving in your direction?

They are smart and they can decide that they’re going to come after us in different ways, and that’s fine. I’ll take the customer service, the relationship to the client, the product innovation, the way that we lead with mobile technology first any single day.

TC: Speaking of these giants and their portfolio of products, how many products does Madison Reed sell currently, and what might you roll out that would surprise customers?

AE: We have about 15 products, all in the category of hair color that’s better for you, whether it’s permanent hair color, semi-permanent hair color, glosses, toners, a highlight kit with non-ammonia bleach . . .We’re also rolling out color depositing masks [that you apply in the shower] that aren’t permanent.

And then I’ll just give you this hint: right now our business is really focused on women, so you can imagine that there’s a separate gender that may color their hair. That is a market that’s just terrific, right? Just for Men?  I mean, are you kidding me? We’re going to blow the doors off that market.

Lidar helps uncover an ancient, kilometer-long Mayan structure

Lidar is fast becoming one of the most influential tools in archaeology, revealing things in a few hours what might have taken months of machete wielding and manual measurements otherwise. The latest such discovery is an enormous Mayan structure, more than a kilometer long, 3,000 years old, and seemingly used for astronomical observations.

Takeshi Inomata of the University of Arizona is the lead author of the paper describing the monumental artificial plateau, published in the journal Nature. This unprecedented structure — by far the largest and oldest of its type — may remind you of another such discovery, the “Mayan megalopolis” found in Guatemala two years ago.

Such huge structures, groups of foundations, and other evidence of human activity may strike you as obvious. But when you’re on the ground they’re not nearly as obvious as you’d think — usually because they’re covered by both a canopy of trees and thick undergrowth.

“I have spent thousands of hours of fieldwork walking behind a local machete-wielding man who would cut straight lines through the forest,” wrote anthropologist Patricia McAnany, who was not involved in the research, for an commentary that also appeared in Nature. “This time-consuming process has required years, often decades, of fieldwork to map a large ancient Maya city such as Tikal in Guatemala and Caracol in Belize.”

You can see an aerial view of the site below. If you didn’t know there was something there, you might not notice anything more than some slightly geometric hills.

Lidar detects the distance to objects and surfaces by bouncing lasers off them. Empowered by powerful computational techniques, it can see through the canopy and find the level of the ground beneath, producing a detailed height map of the surface.

In this case the researchers picked a large area of the Tabasco region of Mexico, on the Guatemalan border, known to have been occupied by early Mayan civilization. A large-scale, low-resolution lidar scan of the area produced some leads, and smaller areas were then scanned at higher resolution, producing the images you see here.

What emerged was an enormous ceremonial center now called Aguada Fénix, the largest feature of which is an artificial plateau more than 10 meters tall and 1.4 kilometers in length. It is theorized that these huge plateaus, of which Aguada Fénix is the oldest and largest, were used to track the movement of the sun through the seasons and perform various rites.

The high-resolution lidar map also helped accelerate other findings, such as that, owing to the lack of statues or sculptures in honor of contemporary leaders, the community that built Aguada Fénix “probably did not have marked social inequality” comparable to others in the 1,000-800 B.C. timeframe (calculated from carbon dating). That such an enormous project could have been accomplished without the backing and orders of a rich central authority — and at a time when Mayan communities were supposed to be small and not yet stationary — could upend existing doctrine regarding the development of Mayan culture.

All because of advances in laser scanning technology that most think of as a way for self-driving cars to avoid pedestrians. You can read more about Aguada Fénix in Nature and this National Geographic article.

Aukey introduces an extremely compact 100w charger

Let’s talk about chargers. They are, quite possibly, the least exciting thing about a computer. Don’t get me wrong. They’re necessary, obviously. But when was the last time you got really psyched about one?

And yet, here I am, tech blogger guy telling you that today is the first day of the rest of your charger-loving life. Why? Because of three alternately cased letters: GaN. Back at CES, I wrote a piece titled “GaN chargers are still worth getting excited about.” I stand by it. And you, too, will stand by GaN.

That’s short for Gallium Nitride, by the way. The main thing you need to know about it is that it has allowed accessory manufactures to jam a lot of wattage into a surprisingly compact footprint. I’ve been pretty smitten with them since picking up Anker’s 30w PowerPort Atom the CES prior. The thing wasn’t the world’s fastest charger, but it did the trick for a 13-inch MacBook with a footprint just slightly larger than the charger that ships with the iPhone.

These days, however, I lug around a 15-inch laptop, so 30 watts really isn’t going to do much. In fact, you’ll actually watch the battery drain while plugged in. I tried out a couple of new adapters at this year’s CES, as well, but none really scratched the itch. Aukey’s $55 OMNIA 100W PD Charger, on the other hand is pretty close to my sweet spot.

It’s half the size of Apple’s proprietary charger, sharing roughly the same footprint as the Google Pixelbook adapter I’ve been carrying around for a couple of years. But that one’s just a modest 45w. Heck, it’s even more powerful than the 96w model Apple sells for the 15 and 17-inch models.

The size is ideal, though, in part owing to the fact that Aukey didn’t attempt to stick another port on it. This is a one-device-at-a-time charger, which is perfectly fine for most of my needs, and it’s going to have a permanent spot in my bag in that far off time when I’m able to start traveling again.

I will say that it’s surprisingly heavy for its size. This is a dense little charger. It stays put in all of my wall outlets, but it’s going to be a test to see if it stays in place in Delta’s notoriously loose seat chargers. My suspicion is that it most likely won’t — making that a fairly big strike against it for my own once-frequent traveling. The good news is that these companies seem to have an even smaller model every four to six months.

In the meantime, it’s an otherwise great option if you’re looking for a lot of charge in a small footprint, at $24 less than Apple’s 96w model.

Demonstrating 15 contact tracing and other tools built to mitigate the impact of COVID-19

Personal-symptom trackers, digital contact-tracing and exposure-notification tools are under development in the United States and around the world — their adoption could help healthcare workers mitigate the impact of further waves of COVID-19. These technologies also have significant privacy and security issues. The COVID Tech Task Force has a conference scheduled in 10 days to discuss the key issues related to COVID technologies.

As part of our work preparing for that conference, we collected and reviewed the leading apps in the U.S. With the goal of helping the public, and state and local governments, better understand the privacy and security features of leading applications, we’re sharing the information and demos we gathered from the teams building these applications.

We have sorted the demos into three broad categories: (1) contact-tracing/exposure-notification applications using Google/Apple API, (2) contact-tracing/exposure-notification applications not using Google/Apple API, and (3) personal-symptom-tracking applications.

We surveyed teams regarding privacy, security and commercialization of personal data. We’ve made the results of the surveys available here. We encourage you to look through the responses and share your thoughts on how different applications have approached these important issues.

The applications featured in this article were to be demoed at the Contact Tracing and Technology Conference originally scheduled for this week — in light of the significant conversations around racial injustice and police brutality against Black Americans we rescheduled it to ensure we are not taking up unnecessary space. The conference is now rescheduled or June 17th — if you RSVP’d, we look forward to seeing you there; if you haven’t, please do!

The conference will be hosted by the COVID Tech Task Force, in collaboration with TechCrunch, Harvard’s Berkman Klein Center, NYU’s Alliance for Public Interest Technology, Betaworks Studios and Hangar. The COVID Tech Task Force is composed of a group of volunteers who came together in March to help convene a forum for state and local governments and the tech community to work together to mitigate the impact of COVID-19.

If you’ve built a contact-tracing or exposure-notification application, please feel free to reach out to partners@crttf.org and fill out the survey here.

Applications using Google/Apple API

Google and Apple have collaborated to create development tools in order to provide a cross-platform way for public health agencies to notify individuals of a potential exposure.

COVID SafePaths

SafePaths is developing free, open-source, privacy-by-design tools for individuals, public health officials and larger communities to flatten the curve of COVID-19, reduce fear and prevent a surveillance-state response to the pandemic.

If you want further information, reach out to info@pathcheck.org.

CoEpi

CoEpi is an open-source project developing a decentralized, privacy-first app for anonymous Bluetooth-based exposure notification based on symptom sharing. Communities of close contacts can begin protecting themselves with CoEpi without requiring widespread adoption among the general population; there is no scale required to achieve benefit to small user groups. CoEpi helps you anonymously alert the people with whom you interact about symptoms of a contagious illness, or alert you if you might have been exposed in an interaction.

If you want further information, reach out to Dana+CoEpi@OpenAPS.org.

COVID Shield

COVID Shield is a free exposure notification solution built with privacy as its top priority. It was built by a group of volunteers, many from Shopify, in order to help Canadians and the rest of the world safely return to work.

If you want further information, reach out to press@covidshield.app.

CovidSafe

The team consists of a group of public health officials, doctors, researchers and engineers based out of the University of Washington and Microsoft who are working together to keep the public safe and to help public health systems in managing the outbreak.

If you want further information, reach out to covidsafe@uw.edu.

COVID Trace

COVID Trace is a nonprofit offering a COVID-19 exposure-notification app for iOS and Android using the Apple/Google exposure-notification APIs. People using COVID Trace can expect privacy and simplicity. With COVID Trace, health departments get an app and metrics that are an extension of their efforts. COVID Trace is ready to be used today.

If you want further information, reach out to hello@covidtrace.com.

Zero

Zero is a citizen-led nonprofit that leverages technology for pandemic response, focused on facilitating safe social behavior and peace of mind. Their goal is to stem the spread of COVID-19 and give citizens the information they need to feel safe and confident engaging with their local economy.

If you want further information, reach out to support@usezero.org.

Covid Watch

COVID Watch uses the Apple/Google GAEN protocol, which it claims its developers explained to Apple how to build based on their original TCN protocol. The Covid Watch team was founded by researchers from Stanford and Waterloo and claims to be the first in the world to invent, develop and open-source a decentralized Bluetooth exposure alert protocol in early March.

If you want further information, reach out to contact@covid-watch.org.

Applications not currently using Google/Apple API

Note that some of these organizations have indicated they might use the Google/Apple API in the future. Some of them intend to and are waiting on confirmation from Google/Apple.

NOVID

NOVID claims to be the first (and currently only) completely anonymous contact-tracing app published in the USA that uses no personal information. No GPS, no phone number, no email — it’s completely anonymous. The app utilizes ultrasound to provide extremely accurate measurements of interaction distance, overcoming the known inaccuracies of Bluetooth. The team is led by Carnegie Mellon professor and internationally renowned mathematician, Po-Shen Loh.

If you want further information, reach out to feedback@novid.org.

Healthy Together

Healthy Together is an end-to-end COVID-19 response platform that is fully integrated into public health and the enterprise. Launched in April for the State of Utah, Healthy Together’s mobile applications support self-assessment, COVID-19 testing access and results, and augmented contact tracing, as well as enterprise contact tracing, workflow tools, data integrations and visualizations. Leveraging existing technology that has scaled to millions of users and informed by public health experts, Healthy Together will soon be announcing additional states and enterprise customers that are using the platform to protect the health of residents and employees.

If you want further information, reach out to info@healthytogether.io.

Sharetrace

Sharetrace is a health passport and contact-tracing application that’s privacy-preserving by design. Built on user-owned personal data accounts, pioneering personal data privacy technology, it can safely use sensitive data without the risk of sovereign surveillance by either companies or governments. Sharetrace is a collaboration between U.K. and U.S. universities, including Case Western Reserve University in Ohio. Learn more online at sharetrace.org.

If you want further information, reach out to jonathan.holtby@dataswift.io.

Coalition Network

Coalition Network is a nonprofit whose founders and team have been building and implementing decentralized, Bluetooth-based network solutions on mobile for the past decade. Coalition’s open source Whisper Tracing Protocol has been peer reviewed by cryptographers at MIT, Stanford, USC and Oxford, and adopted by the government of Senegal.

If you want further information, reach out to micha@coalitionnetwork.org.

Safe2

Safe2 is a COVID-19 exposure warning system for smarter social distancing. The mobile app uses anonymized data from GPS and Bluetooth technology to privately share real-time exposure alerts to help prevent community spread of the virus. Safe2 was founded by Jamison D. Day, Ph.D., data scientist and expert in disaster relief, with an international team specializing in global health, technology and crisis management, with a focus on improving health, economic well-being and privacy.

If you want further information, reach out to hello@safe2.org.

VIRI

VIRI is a contact-tracing platform driven by the ethos of privacy and anonymity, on a mission to allow cross-entity contact tracing without the need to share any personal identifying information. It can be incorporated into an existing enterprise app as an API seamlessly allowing compatibility between enterprises and institutions at a global scale while letting the entities adhere to various healthcare-data regulations. VIRI deploys a hybrid back-end architecture that leverages permissive blockchain technology.

If you want further information, reach out to sumit@viri.io.

Symptom Trackers

COVID Near You

COVID Near You, a crowdsourced COVID-19 symptom tracker, was created by epidemiologists and software developers within the Innovation and Digital Health Accelerator at Boston Children’s Hospital. The Boston Children’s Hospital team has background and expertise in developing platforms in infectious disease surveillance, and provides technical capacity in building visualization-based tools for public health response efforts. The COVID Near You team aims to support public health surveillance measures of COVID-19 and conduct research using the self-reported data to better understand the impact of this disease across North America.

If you want further information, reach out to covidnearyou@healthmap.org.

How We Feel

How We Feel lets you self-report your age, sex, ZIP code and any health symptoms you experience. The app was built by an independent, nonprofit organization called The How We Feel Project. Their tech team includes Ben Silbermann, CEO of Pinterest, and a volunteer group of current and former Pinterest employees. They are working with scientists, doctors and public health professionals from leading institutions including, the Harvard T.H. Chan School of Public Health, the McGovern Institute for Brain Research at MIT, Broad Institute of MIT and Harvard, Howard Hughes Medical Institute, University of Pennsylvania, Stanford University, University of Maryland School of Medicine and the Weizmann Institute of Science.

If you want further information, reach out to info@howwefeel.org.

The accelerating digital transformation, redux

Earlier this week, TechCrunch covered a grip of earnings reports showing that some companies helping other businesses move to modern software solutions are seeing accelerated growth. Inside the Software as a Service (SaaS) world, this is known as the digital transformation. Based on how many software companies are talking about it, the pace of change is only picking up.

But since we published that first entry, a number of SaaS companies that have posted financial results seemed to disappoint investors. Seeing some companies in the high-flying sector struggle made us sit back and think. What was going on?

Today we’re going to explore how the digital transformation’s acceleration seems real enough, but how it’s not landing equally. We’ll start by going over a short run of earnings results, talk to Yext CEO Howard Lerman about what his B2B SaaS company is seeing, and wrap with notes on what could be coming next from software shops.

A quick word on digital transformation

We all hear about digital transformation, but it’s hard to define. Generally, it’s a broad area that includes digitization of manual processes, modern software development practices like continuous delivery and containerization and a general way of moving faster via technology — especially in the cloud.

Speaking last month on Extra Crunch Live, Box CEO Aaron Levie defined the term as he sees it. “The way that we think about digital transformation is that much of the world has a whole bunch of processes and ways of working — ways of communicating and ways of collaborating where if those business processes or that way we worked were able to be done in digital forms or in the cloud, you’d actually be more productive, more secure and you’d be able to serve your customers better. You’d be able to automate more business processes.” he said.

What we’re seeing now is that the pandemic has accelerated the rate of change much faster than many had anticipated. Efforts to slow the spread of COVID-19 and its related workplace disruptions have accelerated what would have been a normal timetable. But on its own, that doesn’t mean the market is seeing equal results across every company and industry that might be part of that trend.

Earnings results

Lots of SaaS companies reported earnings this week, but two sets of returns stuck out as we reviewed the results, those from Slack and Smartsheet.

TaxProper raises $2M to automate getting your property taxes lowered

If you own your home, how much do you pay for property taxes? Too much? Sounds about right.

If you disagree with how much you’re paying in property taxes, you can appeal the assessment. Most people don’t, though — perhaps because they are unaware they can, or because they just don’t have the time to deal with the lawyers and paperwork.

TaxProper, a company out of Y Combinators Summer 2019 batch, has raised $2M to simplify the process. The round was led by Khosla Ventures, backed by Global Founders Capital, Clocktower Ventures, and a handful of angel investors.

Once you’ve punched in your address, TaxProper’s algorithm looks at the assessments of similar homes in your surrounding area, looking at things like size, number of rooms, construction materials, etc.

If the algorithm determines that you’re paying more than your share, they generate the required paperwork and send it off to the county. The company estimates that their part of the process takes 3-5 minutes (after which you’re waiting on the county’s response, which they say takes 6-8 weeks.)

They’re offering up two different pricing models, charging either a $149 up-front fee or 30% of total first year tax savings. If their algorithm says your taxes can’t be lowered, you don’t pay — nor do you pay if the appeal gets denied. The company tells me they’re currently seeing an average per customer savings of around $700.

TaxProper’s two co-founders have a good bit of experience in the space of taxes and government. Geoff Segal was previously an Actuarial Statistician and Research Analyst for State Farm, while Thomas Dowling was a Municipal Finance Advisor for Chicago Mayor Lori Lightfoot. 

One thing to note: TaxProper is only up and running in select areas right now, as the company tests different strategies and makes sure they’re doing everything right region-by-region. It’s currently available in Chicago and the surrounding Cook County area, with plans to roll out “in the coming months” in New York and Texas.

Uber could lose its Grubhub deal to Just Eat or Delivery Hero

According to CNBC there are two suitors rivaling Uber for purchase of U.S. food delivery company Grubhub: Just Eat Takeaway (the union of Just Eat and Takeaway) and Delivery Hero.

Both are European companies perhaps looking for a major entry to the United States market. Just Eat Takeaway is based in the U.K. and Holland, while Delivery Hero is based in Germany. They are both lavishly funded, with Just Eat Takeaway having raised around $1 billion (a combined tally for both companies that now make up the conjoined entity), according to Crunchbase data, and Delivery Hero flush with billions in historical capital from a number of sources.

What price they might pay wasn’t clear on this Friday afternoon, but public market investors are optimistic on what the companies might pay. Shares of Grubhub shot higher on news that other suitors were in the mix; its shares are currently trading up around 7% on the day.

A bidding war could help Grubhub drive a higher price for itself. According to various reports, Uber and Grubhub are struggling to find the right price for the smaller company’s assets. Uber Eats is a domestic competitor to Grubhub, making the tie-up attractive to the larger company from a competitive perspective; if Uber can eliminate one of its chief rivals while absorbing its market share, then perhaps the company best known for its ride-hailing business would be able to extract more cash from food delivery, lessening its regular losses from the activity.

How much more restaurants can give up to food aggregators and delivery players, if any, isn’t clear.

But what’s plain today is that the battle for ownership of the U.S. food delivery market is far from over. If one of the European players does absorb Grubhub, it could set up a newly energized, multi-way struggle to bring food from where it’s made to the homes of consumers. Uber Eats against Grubhub and its new owner against Postmates against DoorDash: That would be an expensive dust-up.

So expensive, in fact, that perhaps Uber will cough up more than it wanted to for the asset to avoid having to fight a newly energized Grubhub, powered by cash from its new, European parent company.

Instacart makes changes to tip policy following shopper complaints

Instacart announced today that it is changing its tip policy to protect its growing shopper network from tip-baiting. Tip-baiting, a grotesque tactic, is when customers bait shoppers with a big tip and then reduce the tip to zero after they receive their groceries. It emerged as Instacart’s demand skyrocketed due to the pandemic and people being unable to go to the grocery store.

Instacart continues to say that tip-baiting is rare and that less than 0.5% of orders have tips removed after delivery. It says it has doubled for shoppers since the COVID-19 pandemic began. However, the policy change shows progress on how the company treats its shopper network, who have been essential as shelter-in-place orders keep people and the immunocompromised from going to grocery stores.

Instacart is now requiring customers who remove tips after delivery to leave feedback, and claims it will deactivate any customer who consistently removes tips. The company also said that it is reducing the tip-adjustment window (the time period for how long a customer can change the tip) from three days to 24 hours.

The smaller window, ideally, would limit the amount of time that a shopper needs to wait for a final tip.

Along with the tip changes, Instacart is updating its Instant cashout feature, first launched in 2019. Shoppers will now be able to cash out tips 24 hours after they complete a delivery for more immediate access to money. The company is also waiving all cashout fees for shoppers using Visa cards until the end of July 2020. Instant Cashout is also expanding to Canada.

The news comes as Instacart’s shopper network continues to grow more disgruntled. For context, the company has announced plans to grow its shopper network by nearly 250% due to demand from the pandemic and shelter-in-place orders. Some shoppers say that aggressive hiring adds fuel to the fire and doesn’t address core problems with Instacart, like bugs in the app, tip-baiting or lack of safety kit distribution.

In March, Instacart shoppers went on strike to demand better treatment, including asking if Instacart could change the default tip percentage back to 10%. The policy change today does not include this change. The default tip percentage is 5%.

Gig workers are essential workers during this time. It is long overdue for Instacart to start making policy changes that treat them like it.

Portobel turns food producers into direct-to-consumer businesses

A startup called Portobel is working to help food producers shift their businesses so they can support direct-to-consumer deliveries.

Portobel is backed by Heroic Ventures and led by Ranjith Kumaran, founder or co-founder of file-sharing company Hightail (acquired by OpenText) and loyalty startup PunchTab (acquired by Walmart Labs).

Kumaran told me that he and his co-founders Ted Everson and Itai Maron started out with the goal of improving the delivery process by using low-cost, internet-connected devices to track each order. As they began testing this out — primarily with dairy companies and other producers of perishable goods — customers started to ask them, “Hey, you can monitor these things, can you actually deliver these things, too?”

So last year, the company started making deliveries of its own, which involved managing its own warehouses and hiring its own drivers. Kumaran said the resulting process is “a machine that turns wholesale pallets into direct-to-consumer deliveries.”

He also emphasized that the company is taking safety precautions during the pandemic, ensuring that all of its warehouse workers and drivers have masks and other protective equipment, and that the drivers use hand sanitizer between deliveries.

Portobel warehouse

Image Credits: Portobel

Portobel currently operates in the San Francisco Bay Area and Los Angeles/Orange County. Kumaran said the COVID-19 pandemic has only accelerated the demand for the startup’s services, with the number of households it serves tripling since April.

That might sound a little surprising, since supermarkets were basically the one store that customers are still visiting regularly. Plus, there are a range of grocery delivery options.

However, Kumaran suggested that the D2C model is better for both producers and consumers. Producers get recurring orders for larger packages of food. And for consumers, “If you buy straight from the wholesale producer … everything’s in stock.”

As for delivery, he said that when you buy your groceries online, things are being packed and dispatched at your local store.”

“All those things about selection and availability, put those aside — the modern grocery store is not set up for efficient e-commerce delivery,” he added. “They need to block the aisles to pick up product, there’s no dedicated place to dispatch deliveries. That’s kind of why, if you’ve tried [grocery delivery], there are unpredictable delivery windows. It’s a challenge for these guys to scale online.”

Portobel’s customers include San Francisco-based grocery company Moo Cow Market. In a statement, Moo Cow founder Alexandra Mysoor said, “The pandemic has propelled retail as we knew it into a new wave, blending and merging all past and current forms of commerce. That’s where companies like Moo Cow Market enter and can scale and grow thanks to services like Portobel.”

And that’s really it for Google+

Last year, Google launched the beta of Currents, which was essentially a rebrand of Google+ for G Suite users, since Google+ for consumers went to meet its maker in April 2019. While Google+ was meant to be an all-purpose social network, the idea behind current is more akin to what Microsoft is doing with Yammer or Facebook with Workplace. It’s meant to give employees a forum for internal discussions and announcements.

To complicate matters, Google kept Google+ around, even after the launch of currents, but in an email to G Suite admins, it has now announced that Google+ for G Suite will close its doors on July 6, after which there will be no way to opt out of Currents or revert back to Google+.

And with that, Google has driven the final nail into Google+’s coffin. The Google+ mobile apps will be automatically updated to Currents. All existing links to Google+ will redirect to Currents.

Going forward, Google+ will only live on as a hazy memory, filled with circles of friends, all of which were forced to use their real name (at least at the beginning), +1 buttons everywhere, sparks, and the promise of fun games, ripples and more.

Currents is all business — and while I’m not aware of a lot of companies that use it, it looks to be a solid option for companies that would otherwise use the Yammer/Teams combination in the Microsoft ecosystem. Now, I guess, we can start the countdown before Google launches another social network.

If you want to take a stroll down memory lane, check out our history of Google+ below: