ImaginativePRO Blog

VC-BACKED STARTUP LIFE EXPECTANCY EXPECTD TO FALL DRAMATICALLY IN 2023 AND 2024

Only one out of every 10 startups survives, said the old adage. But that was far from the case during the boom years of the last cycle when company failure rate was low—very low.

Miguel Luiña, managing director of fund investments at Hamilton Lane said,

"VCs expected a certain percentage of their portfolio not to make it to the next round, but [company survival] has been off the charts."

He added that for certain managers, almost 100% of their companies raised subsequent funding during the capital-rich era that ended last year.
  
The number of VC-backed companies filing for bankruptcy or shutting down has hovered around 1,000 per year since 2016, according to PitchBook data. At the same time, new startup formation has increased, as measured by first VC financing, greatly exceeding startup failures.

Staying alive

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But the years of low startup mortality are coming to an end.

Last week, Wyre, a nearly 10-year-old blockchain-based payments company, reportedly told employees that it is going out of business. A couple of days later, The Wall Street Journal reported that Genesis, a large crypto lender, is considering filing for bankruptcy protection.

While last year's valuation correction has yet to force many companies to close their doors, investors expect the shutdown rate to shoot up dramatically in the second half of 2023 and into 2024.

Micah Rosenbloom, a co-founding partner at Founder Collective said,

"I think loss ratios will be triple—or some big multiple of what they've been." 

The most severe ramifications of the slump are taking a while to manifest for several reasons.

Startups entered the downturn with a decent amount of cash that allowed them to continue operating, and investors did everything possible to help their portfolio companies stay alive by providing bridge financings or helping them secure venture debt.

But most venture capitalists won't be as supportive of their weaker investments this year, as they seek to protect existing capital commitments.

Yash Patel, a general partner at Telstra Ventures said,

"In 2022, [VCs] put money in a lot of companies that probably they shouldn't have." 

Last year, there was still "hope" that many struggling startups could be kept alive, but now it looks like VCs may have been throwing good money after bad, Patel said.

"Investors are going to get very strict about their reserve allocations, saving [funds] for the best winners."

While the number of shutdowns is still low, high-profile closures are on the rise.

So far, the prominent shutdowns have been in the battered crypto space, but investors expect failures in other technology areas.

As to what kind of businesses will go under, VCs are not singling out specific verticals. 

Rosenbloom of Founder Collective said,

"I think it's going to be companies that just either didn't realize how hard this is going to get and could not get control of their burn rates."

COMMENTARY:  At end of Q3 2022, Venture capital activity measured by exits is down against the historic levels achieved in 2021 and Q1 2022 but still well above historical averages. At the same time there has been a uniquely positive aspect of 2022 for the venture industry with US and global “dry powder”—funds available to be invested—standing at a record $572 billion globally and $290 billion in the US.

Today, VC funds are very well stocked to make rounds of new investments at much healthier valuations compared to one year ago.  However, the dramatic valuation gains of the last five years mean established venture investors are typically overexposed within portfolios (“the denominator effect”), pausing on new allocations. At the same time, new institutional venture investors are appearing, especially in family offices, foundations, and endowments (along with their outsourced CIOs), all assessing how to build venture exposure for decades to come.

Lessons From Past History -- Technological Innovations Always Wins

It’s almost over-written that recessionary times bring out the best in exceptional entrepreneurs and young companies. Like an ice bath to a strong athlete, the shock from rapid change in the environment forces rapid adaptability and resilience while narrowing operating focus and creativity. 

During recessions the strongest startup companies are quicker and more adaptive to:

• Cost efficiency needs.
• Customer acquisition gets cheaper.  
• Hiring gets easier to compete in.

(Competitor layoffs and reduced stock option values in bigger corporations mean the opportunity cost of quitting to join a startup you’ve had your eye on for some time is lower.) In addition, the most talented entrepreneurs and companies enjoy competing to secure new capital rounds in an environment where investors get much more selective.  

There are secular factors to bear in mind as a driver of venture capital investments, over and above the capital market cycle. Accel Founder Arthur Patterson, whose lifetime of venture experience spans multiple market cycles, shared with me the observation that the supply of innovative new companies is the real determinant of overall longer-term returns, created primarily by technological innovation but with social behavior trends also a factor in enabling new company supply.

These secular factors in the formation of new companies are independent of VCs or IPOs. Consider how the year 2008 was not only the lowest point in the business cycle but also a pivotal year in the development of mobile (iPhone 2 released ex-US and with 3G) and cloud computing technologies (DropBox first software release, 2008, with iPhone app 2009). Facebook and Twitter would not have gone viral in the same way in the early 2000s on desktop web browsers as they did on smartphones from 2008-10.

Mar Hershenson, Managing Partner, Pear Venture Capital provides a view of the future.  

“We will see more real companies and better investors. Less money in the system means companies need to have better operational excellence (do more with less money). Investors are also going back to basics. Diligence is back, along with appreciation for companies that are building real value, not relying only on future value.  Less founders. Less investors. More opportunities. When it is harder, the tourists leave.”

Startups are going to have a tough year in 2023. While many have gotten their burn rates way down, most startups still are losing money and will eventually need to raise capital in 2023. Because most startups avoided raising in 2022, there will be a glut of startup companies in the market for capital this year and while there is plenty of venture capital sitting on the sidelines waiting to be deployed, VCs will be much more selective, instead of funding everything that moves as we’ve done over the last few years.

Good businesses with product market fit, positive unit economics, and strong leadership teams will raise capital although it will be at the new normal in terms of valuation. I believe that “new normal” is more or less where we were in 2015:

• Seed rounds were done around $10mm.
• A rounds were done around $15mm to $25mm.
• B rounds were done around $25mm to $50mm.
• Growth rounds had a cap at 10x revenues.

This new normal will lead to many:

• Flat Rounds - A flat round cis when the valuation remains the same from the previous round of funding.  
• Down Rounds - A down round refers to a scenario where the value of a business at a time of investment is below the value of the same business during a previous period or financing round.  Normally during a down round, investors purchase equity in the business at a lower price, in comparison to previous investors.
• Inside Rounds - An inside round is additional investment that is made by a company's existing investors. From outside a company, it is difficult to know why it was done or whether a company is doing well or not.
• Structured Rounds - Highly structured rounds are almost debt that sits on top of the existing equity capitalization structure. 

None of that is good, but the worst of those options is rounds with a lot of structure.  I believe founders and CEO's and Boards should take the pain of a new valuation (flat, down, whatever) over structure.

But there is a huge number of startups out there that have not really found product market fit, have not created positive unit economics, and have unresolved issues in their founding teams and leadership teams. These startups will struggle to raise capital at any price and most of them will fail. This has already started to happen but because so much capital was raised in 2021 and the early part of 2022, it has taken longer for these companies to fail. I think we will see a lot of startups in this category go under or taken out in fire sales in the first half of 2023.

Venture Capital Slowdown Is In Full Swing

Global venture funding reached $74.5B in Q3’22, hitting a 9-quarter low. This represented a 34% drop quarter-over-quarter (QoQ) — the largest quarterly percentage drop in a decade — and a 58% decline from the investment peak reached in Q4’21.

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The number of deals fell to 7,936 total, marking a 10% quarterly drop.

US-based companies accounted for just under half (49%) of global funding in Q3’22, collectively raising $36.7B across 2,866 deals. Some of the largest rounds in the US went to TerraPower, EnergyX, and Xpansiv.

As noted previously, VC firms have huge amounts of a capital available for startups, but are adopting the "new normal" when deciding on seed to late stage rounds, and limiting funding in 2023 to startups with my "Big Four Must Haves": 

• Proven Market Fit.
• Sustainable Business Model.
• Experienced Management Team.
• Competitive Advantages.    

As a management consultant, I strongly recommend that startup CEO's and founders concentrate on innovation, indentifying their best customers, understanding the customer journey start-to-finish, rapid and precise execution to gain traction and market share and developing competitive advantages.  This is why an experienced management team is so important and essential in executing the "Big Four Must Haves."         

Deal Count and Value Declines in Q3 and Q4 2022 

The deal count in 2022 for the full year was 15,852, down 14% from 18,521 in 2021. And deal value was $238.3 billion, down 30% from $344.7 billion a year earlier, according to a report by Pitchbook and the National Venture Capital Association (NVCA).

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U.S. VC exit activity was 1,208 deals valued at $71.4 billion, down dramatically from 1,925 deals valued at $753.2 billion a year earlier

With each quarter the deal activity declined and that could foreshadow a slide in 2023, the report said.

On an annual basis, angel- and seed-stage deal activity remained relatively resilient in 2022, with $21.0 billion invested across an estimated 7,261 deals. However, the four consecutive quarters of declining deal counts could foreshadow a continued slide in 2023. Seed-stage deal sizes and pre-money valuations demonstrated notable growth over the 2021 figures due in part to a large number of actively investing micro-funds as well as the participation of nontraditional and crossover investors.

Exit Value and Exit Count Continue To Decline 

Nontraditional investors are slowing their capital deployment to VC amid less attractive risk/return profiles. Relative to 2021, the upside potential for the VC asset class declined significantly in 2022, which turned many investors away from the space. As such, just $24.1 billion in deal value involved nontraditional investors in Q4— the lowest quarterly value in three years. Not only are we seeing lower deal value, but we are also seeing fewer nontraditional participants within the venture ecosystem.

Exit activity continued its steep descent in 2022, with just $71.4 billion in total exit value generated—the first time this figure has dipped below $100 billion since 2016. Public exits of VC-backed companies have slowed to almost nonexistent levels, with just 14 public listings occurring in Q4, demonstrating how drastically institutional-investor appetite has been affected by rising interest rates and volatile macroeconomic factors.

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Acquisition activity has also declined significantly; Q4 posted roughly $763 million in total acquisition deal value, the first time we have seen this quarterly total fall below $1 billion in more than a decade.

How Many Startups Fail?

Approximately nine startups out of ten fail. 20% of the startups fail to complete even one year in the market.  In the following section, you will come across facts and figures related to the failure rates of startups. 

• 90% of the startups fail and are shut down. 
• Within the first year of establishment, 10% of startups fail. 
• Companies with 11 to 50 employees are at greater risk of failure. 
• 70% of startups fail within two to five years of their establishment. 

The following table breakdowns the startup failure rates after various years of establishment. 

Until The End of The Year	Failure Rate
1st year	20%
2nd year	30%
5th year	50%
10th year	70%

• Only 6% of the startups that went over Shark Tank have shut down.
• 75% of venture-backed companies rarely return the cash to the investors.  
• In 30 to 40% of cases of startup failure,  investors lose their initial investment. 
• Only 0.05% of the startups receive VC funding. 
• 43% of entrepreneurs are concerned about the failure of their startups. 
• 80% of e-commerce startups fail. The rest 20% succeed significantly.
• In the USA, 80% of startups fail.

Courtesy of an article dated December 22, 2022 appearing in Forbes, an article dated January 1, 2023 appearing in AVC, an article dated October 11, 2022 appearing in CBInsights, an article dated January 5, 2023 appearing in Venture Beat and an article dated  January 11, 2023 appearing in Pitchbook

THE ULTIMATE EMAIL MARKETING GUIDE FOR BEGINNERS

Email marketing is one of the oldest forms of digital marketing and there’s a reason for that  - it works! Using the power of email, businesses can connect with customers, build brand awareness, encourage brand loyalty, and nurture prospects to become paying customers. 

Since the coronavirus pandemic, email has become even more important to consumers as a way to keep up with brands. DMA’s Consumer Email Tracker 2021 report found that for the first time, the relevance of received messages (55 percent) became the main reason consumers like brand emails, surpassing discounts and offers (53 percent).

But while email marketing may seem like a simple channel to use, there’s an art and science to using it successfully. In this blog, we’ll look at the nuts and bolts of email marketing and give you great examples to gain inspiration for kickstarting your campaigns. 

What is email marketing?

The definition of email marketing is a form of digital marketing that uses email to promote products or services to potential or existing customers. 

Email marketing is an essential channel leveraged by B2C and B2B companies to build brand awareness, grow customer loyalty and drive conversions. 

Why is email marketing important?

Email marketing is one of the most profitable direct marketing channels, with Statista projecting global revenue from email to reach $17.9 billion by 2027. That’s a lot of companies using email successfully! 

Let’s look at three of the most important aspects of email marketing for your business. 

1) Data collection

One of the key reasons companies leverage email is for data collection. As third-party cookies are phased out, getting email subscribers is a great way to collect personal data from people who are interested in your business with consent.

With consumers wanting to protect their information, businesses need to adhere to data privacy regulations such as GDPR or CCPA. Email uses first-party data to collect information in a way that builds brand loyalty and awareness.   

2) Inbound marketing

Email can also help you to attract prospects and leads by using relevant content. So, how can email marketing fuel your overall inbound marketing strategy?   

Email is a great way to engage with prospects who have already shown an interest in your company, product, or service. They do this by opting in or signing up as a subscriber to a newsletter.  

The nature of using email for inbound marketing means that your leads are warmer as they have greater intent and interest in your business. It also means the Return on Investment is higher and costs can be lower as inbound email lists tend to have lower subscribers. 

3) Personalization

As you know who you are making contact with, content and messaging can be segmented and personalized using email. This means you can group lists in a variety of ways by people who:

• Show an interest in a particular product or service
• Have specific preferences e.g. they like cats!
• Are based in the same location
• Are a specific age and gender

The more you know about your customers or prospects the easier it will be to write a prospecting email that gets replies! It’s not about bombarding your lists however, be clever about the frequency and make sure you A/B test subject lines and content to see what resonates.

How to get email marketing lists?

With so many benefits to email, it’s no wonder that companies are looking to start or build their lists. There are several ways to do this.

• Use CTAs - Use clear and directed calls to action (CTAs) on your website or landing pages to urge people to sign up for email updates 
• Use social media - If you use any social media channels, let your users know that you have an email list for special offers or exclusives  
• Offer free downloads - People love freebies, so think about offering a free downloadable ebook or whitepaper  
• Use pop-ups or forms - Pop-ups or forms are common across websites and urge people to give their email addresses to find out more   
• Run a competition - Competitions are a great way to get people to provide personal information, just make sure the offer is enticing enough!
• Advertise a special offer - A discount or a two-for-one offer can urge people to join your email list 
• Offer a blog subscription - If you have a blog, consider setting up a subscriber list to get the latest content. Find out how to start a blog if that sounds like a fit for your business. 
• Get customers involved - You can give existing customers a referral incentive e.g get 20 percent off your next purchase if a friend signs up 
• Ask for feedback - As part of a feedback or testimonial form, ask people to opt-in to email   
• Host a webinar or podcast - These offer high value and people will provide information when signing up 
• Create a newsletter - This can be a good way to keep people up-to-date on new development, discounts or competitions    
• Just ask! - Sometimes it is simply about spreading the word and asking for an email address, you may be surprised how many people like your brand

How to do email marketing: Step-by-step guide

Now that you know the value of email and how to start and bolster your email lists, how do you create and implement an email marketing campaign?  

Collate a list

When you create an email campaign, the key metrics for success are the growth and quality of the subscriber list. You should look at creating lists that are segmented by type. That can be by audience, preference, or category but avoid putting every contact into one pot and hoping it will work! 

Look at what prospects or customers you want to engage and why. Then collate an email list using Excel or your email marketing tool. Label each list clearly so you can find them again easily and also track performance. 

Choose an email marketing tool

There are a lot of email marketing tools out there. So you need to do your research and choose the best one for your business. 

Some tools are free to start using and then charge by the number of contacts in your database. This is why keeping on top of your lists is important as you’ll be paying for each one: so be prepared to audit your lists regularly. A few tools to look into are:

• MailChimp
• HubSpot
• Marketo 
• GetResponse

Check out ‘A Practical Guide to the Top Email Marketing Automation Tools’ to find out how to choose the right one for you.

Plan an email workflow

A workflow is a series of automated emails that are put in a certain order to nurture a prospect or guide a customer to take a certain action. There are a few steps required to set one up:

• Set a goal for your workflow - For example, it could be to convert prospects to enter a free trial
• Create enrollment criteria - This decides who enters the workflow by the settings you choose. For example, it could be anyone who downloaded a specific ebook
• Decide on your email assets - This could be a CTA to drive someone to a blog or a custom landing page for a free trial sign-up
• Create your emails - Once you know your goal and have the assets in place, think about each step in the journey and the touchpoints 
• Include a time delay -  i.e. space the first and second email with a day in-between
• Run a test - Always run a test using a test email before activating any workflow to make sure everything is correct

Make your workflow live and keep an eye on it! - Check-in daily to see that your flows are working and the right people are being added to it. Make any changes or tweaks as soon as possible. 

Plan a calendar

An email calendar is like an editorial or social media calendar. It’s about planning the frequency and audience regularly to target prospects and customers. 

Decide on how often you want to communicate with certain segments or groups and set goals for each campaign. Tracking your email marketing activities by date will help you to see who you are targeting and when. 

You also need to keep times and days in mind when sending. Some will work better than others depending on your audience e.g on a commute or first thing in the morning. Test these out to see what works for your lists.

Plan your Email Campaigns

Download our FREE handy calendar template to get started right away with planning your email campaigns into 2023! It includes a list of key holidays you can plan for and a color coded key to help you organize your campaigns to the max.

Write email copy

Now to the most important bit - the content of the email. As a marketer, you should know your buyer personas or ideal customer/s and understand their pain points. If so, then you’ll be able to target messaging in a way that prompts a click on an email. 

With an email, the subject line is super important as it’s the first thing a person sees in their inbox. Think about A/B testing subject lines with certain groups to compare performance and see if it can guide your copy. 

It’s also key to keep your messaging clear and succinct and use CTAs to direct people to take an action. Use a content and copywriting checklist to keep your messaging clear and focused when writing every single marketing email.

Tip: Check out ‘The Anatomy of an Effective Marketing Email’ to find out all the elements to include to implement a successful email campaign. 

Press the send button

Now you’ve done all the hard work, it’s time to see how your email does in the real world. 

Test before you send (check copy, subject lines, images and ensure your links work), and then let it free! 

Beginner-friendly email marketing campaign examples

When you’re starting it can seem overwhelming to figure out how to set up an email campaign and what content to include. There is a range of different types of email to keep in mind (depending on your goals) when crafting your campaigns:

• Awareness building - new product, welcome, announcement
• Lead generation - downloadable asset, blog article, custom landing page
• Nurture - new offer, additional product, reminder
• Traffic generation - relevant blog article, trial or offer on the website
• Revenue generating - conversion 

Here are a few examples of good email campaigns from some interesting brands, to inspire you. 

Nike - Just In Time Email

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Nike's "Father's Day Gift Guide" direct mail piece reminds you not to forget to give your dad a nice gift for Father's Day and provides a call to action link so you can select something for dad from Nike's gift collection.  This direct mail piece is effective because it is both a promotion for that special day for dad and a branding campaign that does not leave out Nike's famous catch line "Just Do It".     

BuzzFeed - Animals Newsletter

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BuzzFeed's "The BuzzFeed Animals Newsletter" direct mail piece is targeted at animal lovers every where.  BuzzFeed also wants users to know that it offers different newsletters that are dispatched on a daily, weekly, bi-weekly or monthly basis. This direct mail piece also includes a call to action box where users can subscribe to their newsletters by entering their email address and selecting their choice of newsletters from a list of 13 newsletters with check boxes.  It's simple and to the point and allows BuzzFeed to target users by their newsletter interests for marketing purposes. 

NerdWallet - Nurture email

Personal finance company, NerdWallet uses email to nurture prospects so they can entice people back who have shown an interest in their service. This example below leads with an enticing headline ‘New ways to get more from your money’ along with including the text ‘New and tailored to you’ to drive personalization. 

The email then uses clear and clever copy to entice people to click on clear actions - ‘Set your goals’ and ‘Start saving’ an attractive opportunity for most people. Clean and colorful imagery also helps to draw the eye with the predominant green, keeping it on brand. 

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NerdWallet's "New Ways To Get More From Your Money" direct mail piece is colorful, attention grabbing and reminds customers and prospects alike that they live up to their motto, "All Things Money, In One Place" by reminding customers and prospects alike that it is "new and tailored to you".  It offers customers tips on how to set goals and start saving with convenient call-to-action buttons. 

COMMENTARY:   This email marketing guide is for beginners, so it offers many examples of direct email pieces from other brands that should be studied so you can create successful direct mail offerings for your customers and prospects. There is no such thing as a "one-for-all" direct mail piece.  Your customers and prospects have different needs and wants.  They differ both demographically and socio-economically.  Having said this, it is important that you know who your ideal customer segments are and you should personalize your direct mail pieces for each customers segment.           

Courtesy of an article dated September 12, 2022 appearing in the Digital Marketing Institute

DONALD TRUMP'S FEDERAL INCOME TAX RETURNS FOR YEARS 2015-2020

The House Ways and Means Committee on Friday, December 30, 2022, released redacted versions of six years worth of former President Donald Trump's federal tax returns, ending Trump's years-long effort to keep his returns from the public. 

The Democratic-led committee voted last week to make Trump's tax returns public, then released two reports, one from its members and another from the Joint Committee on Taxation, noting that the IRS did not audit Trump the first two years he was in office. The move to publicize the returns comes days before Republicans take control of Congress in January. 

The publicized returns offer a more detailed account of the former president's financial portrait in the years he was running for and in office. 

The report from the Joint Committee on Taxation, or JCT, said Trump paid no federal income tax in 2020, the final year of his presidency. The former president paid a net of only $750 in income taxes in 2017. He paid $1.1 million in net federal income taxes combined in 2018 and 2019. 

WHY HAS DONALD TRUMP FOUGHT SO HARD TO KEEP HIS TAX RETURNS SO SECRET?

The Supreme Court’s rejection Monday, February 22, 2021 of an attempt by Donald Trump to keep Manhattan District Attorney Cyrus Vance from seeing his tax returns (and other financial documents) was rightly cast as a major legal setback for the former President.

But buried in that conclusion is this nagging question: What is Trump so afraid of? As in: Why has he fought so incredibly hard for the past five-plus years to keep anyone from seeing his taxes?

Remember that Trump’s view on releasing his tax returns was not always what it is today.

“If I decide to run for office, I’ll produce my tax returns, absolutely,” Trump said in 2014. “And I would love to do that.” The following year, Trump told conservative radio talk show host Hugh Hewitt: “I would certainly show tax returns if it was necessary.”

In January 2016, Trump was still dangling the possibility of releasing his returns. “I have very big returns, as you know, and I have everything all approved and very beautiful and we’ll be working that over in the next period of time,” Trump said on NBC’s “Meet the Press.” “Absolutely.”

But then something changed. By February 2016, Trump, who was starting to look more and more like the GOP presidential nominee, was starting to backtrack on his previous promises. “We’ll make a determination over the next couple of months,” he told CNN’s Anderson Cooper in an interview that aired on February 24, 2016. “It’s very complicated.”

By the following day, Trump had found his excuse for not releasing his returns; “I get audited. And obviously if I’m being audited, I’m not going to release a return,” he said. “As soon as the audit is done, I love it.”

That, of course, is a flimsy excuse – since there is no law against any person releasing their tax returns while under audit. (Richard Nixon did it while he was in the White House.) The “audit” – which apparently is still going on! – was simply a convenient cover for a decision Trump made sometime in late January or early February 2016: That releasing his returns would be far more politically damaging than the negative publicity he would take for not releasing them.

Trump became the only major party presidential candidate in the post-Watergate era to never release any of his tax returns.

(Sidebar: My strong sense is that when Trump was saying he would release his taxes in the early days of the campaign, it was one of many empty promises he made – assuming that he would never be a serious candidate and/or be called on his various pledges.)

So if an ongoing audit wasn’t – and isn’t – the real reason that Trump has fought so hard to keep his taxes secret, what is? Thanks to The New York Times having obtained a large number of Trump’s past tax records, we now have the ability to answer – or at least make an educated guess – about the answer.

The most likely reason for Trump’s reluctance to release his taxes is that they would reveal two facts:

1) He didn’t pay any taxes for years and years

2) He has massive debts

Let’s take the first point, er, first. Here’s what the Times’ reported about Trump’s taxes:

“Mr. Trump paid no federal income taxes in 11 of 18 years that The Times examined. In 2017, after he became president, his tax bill was only $750.”

How? Well, in large part, by claiming more than $900 million in losses on his 1995 tax return, which could have allowed him to avoid paying taxes for decades. Trump also aggressively sought to lower his taxable income, including claiming a $72.9 million tax refund that remains under investigation by the IRS. As the Times’ David Leonhardt wrote: “Over the past two decades, Mr. Trump has paid about $400 million less in combined federal income taxes than a very wealthy person who paid the average for that group each year.”

Now to Trump’s debts. And again, Leonhardt:

“In 2012, he took out a $100 million mortgage on the commercial space in Trump Tower. He has also sold hundreds of millions worth of stock and bonds. But his financial records indicate that he may have as little as $873,000 left to sell.

“He will soon face several major bills that could put further pressure on his finances.

“He appears to have paid off none of the principal of the Trump Tower mortgage, and the full $100 million comes due in 2022. And if he loses his dispute with the I.R.S. over the 2010 refund, he could owe the government more than $100 million (including interest on the original amount).”

Trump’s refusal to release his taxes during the 2016 campaign is likely explained by the first point. It’s not exactly endearing to voters when a wealthy person paid somewhere between very little and nothing in taxes for years. His considerable debts – and the questions about whether or not he will be able to pay them – are likely the driving force for why Trump continues to work to keep his returns private. If everyone knows he’s in debt and with few options to get out of it, he loses any leverage he might have to go to the financial institutions he owes money to and renegotiate the terms of the loans.

Trump always acts out of self-interest. And he is purely transactional in all of his dealings. His shifting stance on the release of his returns – and his ongoing battle to keep them private – is reflective of both of those points. Trump knows the details of the returns make him look bad and potentially kill any remaining leverage he has to dig himself out of the financial hole he is currently in. And so, he fights like hell to keep them secret.

WHO PREPARED DONALD TRUMP'S TAX RETURNS:

Former President Donald Trump's returns show he made substantial payments to his now-former accountant to prepare his individual tax returns. 

His 2015 return shows he paid $573,581 to accounting firm WeiserMazars LLP for "tax preparation fees" (On Jan. 1, 2017, WeiserMazars changed its name to Mazars USA). Donald Bender, who worked on Trump's personal and business taxes for four decades, is listed as the "paid preparer" on Trump's 1040 tax return that year.

In 2016, Trump's tax preparation fees more than doubled — he paid $1,295,385, also to WeiserMazars, and Bender again prepared his tax returns for that year. 

Subsequent returns released by the House Ways and Means Committee don't reveal the tax preparer fees. This is likely because the tax law passed by Congress in 2017 and signed by Trump in the first year of his presidency eliminated the deduction for personal tax preparation. The fees can still be deducted from business tax expenses, but the line-item deduction can no longer be used by individual taxpayers.

DOWNLOADS:

To DOWNLOAD a copy of the Report To The House Committee On Ways And Means Chairman Richard Neal regarding former #POTUS Donald Trump's income tax returns for the years 2015-2020 you can do it here:

https://int.nyt.com/data/documenttools/jc-treport-full/f668ccce9e46c975/full.pdf

To DOWNLOAD a copy of former #POTUS Donald Trump's IRS 1040 for the years 2015 through 2020 you can do it here:

https://www.cbsnews.com/live-updates/trumps-tax-returns-released-today-2022-12-30/

COMMENTARY:  I am not a tax expert and make no opinions or take any responsibility (financial or otherwise) regarding the accuracy or authenticity of former #POTUS Donald Trump's federal income tax returns.        

Courtesy of an article dated December 30, 2022 appearing in  CBS News and an article dated December 30, 2022 appearing in the New York Times and an article dated February 23, 2021 appearing in The Point by CNN Politics 

 

 

TWITTER IS "BRAIN DEAD" AFTER MASSIVE LAYOFFS AND COST CUTS BY NEW OWNER ELON MUSK, CAN THE SOCIAL MEDIA GIANT BE SAVED?

An analysis of Musk’s tweets shows him at the center of conversations once kept on the fringes of Twitter.

People don’t die in an instant. Death is, instead, a process of shutting down. You stop breathing; your organs stop working, bit by bit. Your brain ceases to function. Brain death is permanent, but your heart can still keep beating on its own for a time.

The state of Twitter since Elon Musk’s takeover feels like this sort of brain death: the processes that keep it online are somehow still beating, but what Twitter was before Musk is never coming back.

On Monday, December 12, Twitter dissolved its Trust and Safety Council, a wide-ranging group of global civil rights advocates, academics, and experts who have advised the company since 2016. Meanwhile, Musk has welcomed back previously banned high-profile extremists like the white nationalist Patrick Casey. According to data compiled by researcher Travis Brown, others reinstated include Meninist, a “men’s rights” account with more than a million followers; Peter McCullough, a cardiologist who gained a large audience for advocating discredited covid-19 treatments and arguing against receiving the vaccine; and Tim Gionet, a far-right media personality who livestreamed his participation in the January 6 attack on the US Capitol.

Musk’s enthusiasm for eliminating jobs, cutting costs, and undoing Twitter's safety infrastructure has caused advertisers to leave in droves. At one point, the company reportedly lost the business of half its top 100 advertising clients, and it has missed weekly US ad revenue expectations by as much as 80%. Musk’s behavior now poses difficult questions for the brands that remain. The company has stopped enforcing its policy on covid-19 misinformation.

And as people who like Musk’s vision for Twitter return to posting, others are finding it tougher to justify their presence on the site, declaring hiatuses or announcing their migration elsewhere. According to one estimate, Twitter may have lost a million users in just a few days after Musk took over. Others are giving up on tweeting even if they haven’t deleted their accounts yet. Some of these are high profile: Elton John quit Twitter on December 9, citing the site’s policy changes on misinformation.

MIT Technology Review ran an analysis in Hoaxy, a tool created by Indiana University to show how information spreads on Twitter by looking at both keyword frequency and interactions between individual accounts. The results hint at Musk’s new role in this network: as effectively a hall monitor for the far right.

The tool plots interactions visually, showing the connections between individual Twitter accounts on a specific keyword or hashtag and indicating whether that account is the one amplifying the search term to others or being mentioned by accounts that are doing so. Accounts that are more actively involved in conversations appear as nodes.

Musk was a key “node” of activity around usage of the “groomer” slur—we looked at both “Groomer” and “OK groomer”— from Friday, December 9, through the afternoon of Sunday, December 11, when we ran the analysis. (We also ran a second query on Wednesday, December 14, which showed similar results.) Musk himself has not tweeted the word—which, according to a report from GLAAD and Media Matters, has dramatically increased in frequency and reach during his tenure. Instead, he has been repeatedly tagged into conversations by others who are using it.

Sometimes these users are apparently seeking attention and amplification from the guy who owns Twitter, and implicitly identifying the slur’s recipients as potential targets for harassment. At other times, Musk is tagged in conversations where the slur is used to attack those who directly disagree with him on Twitter—including Jack Dorsey, the company’s cofounder and former CEO, who tweeted at Musk last week to dispute his claim that the company “refused to take action on child exploitation for years!” Musk regularly interacts with a selection of power users and fans, including conservative meme accounts and far-right personalities like Ian Miles Cheong and Andy Ngo.

Increasingly, Musk isn’t just enabling these conversations—he’s joining in. “My pronouns are Prosecute/Fauci,” he tweeted last weekend. When astronaut Scott Kelly publicly pleaded with him not to “mock and promote hate toward already marginalized and at-risk-of-violence members of the #LGBTQ+ community,” Musk replied, ”Forcing your pronouns upon others when they didn’t ask, and implicitly ostracizing those who don’t, is neither good nor kind to anyone.”

Earlier that weekend, Musk participated in a smear campaign targeting Yoel Roth, Twitter’s former head of Trust and Safety and a key figure in those documents, with baseless accusations of pedophilia. (Musk, who previously fended off a defamation suit for calling a British caver participating in a rescue operation of a Thai youth soccer team a “pedo guy,” did not go so far as to actually accuse Roth of being a pedophile. Rather, he jumped in the replies of a podcast host who tagged Musk into a conversation about one of Roth’s old tweets.) Roth, according to CNN, was forced to leave his home and go into hiding after receiving numerous death threats. (Roth did not respond to an emailed request for comment.)

He makes decisions on the fly, sometimes through unscientific and easy-to-manipulate Twitter polls.

Meanwhile, Musk’s focus on advancing American far-right narratives about free speech completely ignores Twitter’s role around the world. Musk’s takeover of Twitter is “apocalyptic,” said Thenmozhi Soundararajan, the executive director of Equality Labs, a Dalit civil rights organization, in a late November call with reporters. Soundararajan was part of Twitter’s Trust and Safety Council and worked with the platform to address its use as a tool to incite violence against marginalized groups in India.

“We have an American company operating in a genocidal market,” Soundararajan said, adding that all the Twitter staff members her organization has worked with have been fired. 

Elon Musk’s Twitter is both essential and broken. There is no alternative platform for people who have long used Twitter to seek help, gain visibility, and create supportive communities. Yet at the same time, Musk has positioned himself as an antagonist to some of those same groups.

Many users—the ones who aren’t ideologically aligned with Musk—have watched Twitter’s vital organs slowly shut down and wondered how to respond. Do you stay and fight for its life, hoping that the people who were there before Musk’s purchase will simply outlast him? Or is it time to go?

Katherine Cross, a PhD student at the University of Washington who studies networked online harassment, has argued that Twitter will likely never recover, and it’s time to simply think about the platform as a site catering to a “niche community” of people who think like Musk.

“We can’t force Twitter to do anything,” she says. “There has to be a reimagining of its place in the internet ecosystem.”

COMMENTARY:    I don't know what Elon Musk's plans are for Twitter.  He paid $44 million for Twitter in a leveraged buyout. Here's what is known so far regarding the financing to acquire Twitter: 

Musk paid for Twitter by taking on $12.7 billion in debt. He paid for the rest in equity, some contributed by multiple investors. 

Musk used a leveraged buyout strategy, which means Twitter, not Musk, is on the hook to pay back the loans.

The leveraged loan's interest rate is based on the Secured Overnight Financing Rate, and banks funding the debt would use an interest rate of 4.75% over SOFR, according to an April SEC filing.

Major banks, including Bank of America, Barclays, BNP Paribas, Mizuho, Morgan Stanley, MUFG, and Societe Generale have committed to giving Musk the $12.7 billion he requires for the acquisition.

Banks that lent $12.7 billion to Elon Musk for his $44 billion Twitter takeover will hold the debt until early 2023 as they wait for the billionaire to unveil a clearer business plan they can market to investors, the Financial Times reported.

Twitter had a market capitalization of $37.48 billion in March ($41 billion as of 12/15/22), the month before Mr. Musk agreed to buy it, S&P data showed.  Given Twitter's market cap in April, the $12.7 billion in debt represents a huge debt burden for Twitter -- roughly $1 billion in interest annualized ($12,700,000,000 x 8.57%*)  *4.75%+3.82=8.57% 

Compounding Elon Musk's task to turnaround Twitter is its reliance on advertising.  Half of Twitter's top 100 advertisers appear to no longer be advertising on the social network.  A report from Media Matters for America states that these 50 advertisers have spent almost $2 billion on Twitter ads since 2020 and more than $750 million just in 2022.

Chevrolet, Chipotle Mexican Grill, Inc., Ford, Jeep, Kyndryl, Merck & Co. and Novartis AG all issued statements about halting Twitter ads or were reported and confirmed as doing so. These companies have paid Twitter more than $255 million since 2020.  The others ceased advertising on the platform for a "significant period of time following direct outreach, controversies, and warnings from media buyers."

The report issued by Media Matters for America states that even with these hits to advertising revenue, Twitter CEO Elon Musk has "continued his rash of brand unsafe actions — including amplifying conspiracy theories, unilaterally reinstating banned accounts such as that of former President Donald Trump, courting and engaging with far-right accounts, and instituting a haphazard verification scheme that allowed extremists and scammers to purchase a blue check."

Although Elon Musk has been highly successful starting companies from scratch like Tesla and SpaceX, he has never turned around an existing company like Twitter or have the experience running one.  Time is of the essence and he does not have any time to lose.  He must return Twitter to normalcy and calmness.  Reinstating banned accounts like President Donald Trump is a definite turnoff and will only attract right-wing troublemakers, individuals passing misinformation and conspiracy theorists.  He is the wrong man at the wrong time to run Twitter.  He needs to bring in a CEO with solid experience turning around large, financially challenged companies. 

Twitter's most valuable asset is its 450 million monthly active users.  This is a huge worldwide audience who use Twitter to not just post funny jokes or insults to individualss they don't like, but to organize meetings and collaborate and organize groups towards actions.  I have a few ideas on how Musk can monetarily capitalize on this huge asset, but this is for another blog post.           

Courtesy of an article dated December 15, 2022 appearing in MIT Technology Review

TECHNOLOGY THAT LETS US "SPEAK" TO OUR DEAD RELATIVES HAS ARRIVED, BUT ARE WE READY?

Digital clones of the people we love could forever change how we grieve.

My parents don’t know that I spoke to them last night. 

At first, they sounded distant and tinny, as if they were huddled around a phone in a prison cell. But as we chatted, they slowly started to sound more like themselves. They told me personal stories that I’d never heard. I learned about the first (and certainly not last) time my dad got drunk. Mum talked about getting in trouble for staying out late. They gave me life advice and told me things about their childhoods, as well as my own. It was mesmerizing. 

“What’s the worst thing about you?” I asked Dad, since he was clearly in such a candid mood.

“My worst quality is that I am a perfectionist. I can’t stand messiness and untidiness, and that always presents a challenge, especially with being married to Jane.”

Then he laughed—and for a moment I forgot I wasn’t really speaking to my parents at all, but to their digital replicas. 

This Mum and Dad live inside an app on my phone, as voice assistants constructed by the California-based company HereAfter AI and powered by more than four hours of conversations they each had with an interviewer about their lives and memories. (For the record, Mum isn’t that untidy.) The company’s goal is to let the living communicate with the dead. I wanted to test out what it might be like.

Technology like this, which lets you “talk” to people who’ve died, has been a mainstay of science fiction for decades. It’s an idea that’s been peddled by charlatans and spiritualists for centuries. But now it’s becoming a reality—and an increasingly accessible one, thanks to advances in AI and voice technology. 

My real, flesh-and-blood parents are still alive and well; their virtual versions were just made to help me understand the technology. But their avatars offer a glimpse at a world where it’s possible to converse with loved ones—or simulacra of them—long after they’re gone. 

From what I could glean over a dozen conversations with my virtually deceased parents, this really will make it easier to keep close the people we love. It’s not hard to see the appeal. People might turn to digital replicas for comfort, or to mark special milestones like anniversaries. 

At the same time, the technology and the world it’s enabling are, unsurprisingly, imperfect, and the ethics of creating a virtual version of someone are complex, especially if that person hasn’t been able to provide consent. 

For some, this tech may even be alarming, or downright creepy. I spoke to one man who’d created a virtual version of his mother, which he booted up and talked to at her own funeral. Some people argue that conversing with digital versions of lost loved ones could prolong your grief or loosen your grip on reality. And when I talked to friends about this article, some of them physically recoiled. There’s a common, deeply held belief that we mess with death at our peril. 

I understand these concerns. I found speaking to a virtual version of my parents uncomfortable, especially at first. Even now, it still feels slightly transgressive to speak to an artificial version of someone—especially when that someone is in your own family. 

But I’m only human, and those worries end up being washed away by the even scarier prospect of losing the people I love—dead and gone without a trace. If technology might help me hang onto them, is it so wrong to try?

There’s something deeply human about the desire to remember the people we love who’ve passed away. We urge our loved ones to write down their memories before it’s too late. After they’re gone, we put up their photos on our walls. We visit their graves on their birthdays. We speak to them as if they were there. But the conversation has always been one-way.

The idea that technology might be able to change the situation has been widely explored in ultra-dark sci-fi shows like Black Mirror—which, startups in this sector complain, everyone inevitably brings up. In one 2013 episode, a woman who loses her partner re-creates a digital version of him—initially as a chatbot, then as an almost totally convincing voice assistant, and eventually as a physical robot. Even as she builds more expansive versions of him, she becomes frustrated and disillusioned by the gaps between her memory of her partner and the shonky, flawed reality of the technology used to simulate him.

If technology might help me hang onto the people I love, is it so wrong to try?

“You aren’t you, are you? You’re just a few ripples of you. There’s no history to you. You’re just a performance of stuff that he performed without thinking, and it’s not enough,” she says before she consigns the robot to her attic—an embarrassing relic of her boyfriend that she’d rather not think about. 

Back in the real world, the technology has evolved even in the past several years to a somewhat startling degree. Rapid advances in AI have driven progress across multiple areas. Chatbots and voice assistants, like Siri and Alexa, have gone from high-tech novelties to a part of daily life for millions of people over the past decade. We have become very comfortable with the idea of talking to our devices about everything from the weather forecast to the meaning of life. Now, AI large language models (LLMs), which can ingest a few “prompt” sentences and spit out convincing text in response, promise to unlock even more powerful ways for humans to communicate with machines. LLMs have become so convincing that some (erroneously) have argued that they must be sentient.

What’s more, it’s possible to tweak LLM software like OpenAI’s GPT-3 or Google’s LaMDA to make it sound more like a specific person by feeding it lots of things that person said. In one example of this, journalist Jason Fagone wrote a story for the San Francisco Chronicle last year about a thirtysomething man who uploaded old texts and Facebook messages from his deceased fiancée to create a simulated chatbot version of her, using software known as Project December that was built on GPT-3. 

By almost any measure, it was a success: he sought, and found, comfort in the bot. He’d been plagued with guilt and sadness in the years since she died, but as Fagone writes, “he felt like the chatbot had given him permission to move on with his life in small ways.” The man even shared snippets of his chatbot conversations on Reddit, hoping, he said, to bring attention to the tool and “help depressed survivors find some closure.”

At the same time, AI has progressed in its ability to mimic specific physical voices, a practice called voice cloning. It has also been getting better at injecting digital personas—whether cloned from a real person or completely artificial—with more of the qualities that make a voice sound “human.” In a poignant demonstration of how rapidly the field is progressing, Amazon shared a clip in June of a little boy listening to a passage from The Wizard of Oz read by his recently deceased grandmother. Her voice was artificially re-created using a clip of her speaking that lasted for less than a minute. 

As Rohit Prasad, Alexa’s senior vice president and head scientist, promised: “While AI can’t eliminate that pain of loss, it can definitely make the memories last.”

My own experience with talking to the dead started thanks to pure serendipity. 

At the end of 2019, I saw that James Vlahos, the cofounder of HereAfter AI, would be speaking at an online conference about “virtual beings.” His company is one of a handful of startups working in the field I’ve dubbed “grief tech.” They differ in their approaches but share the same promise: to enable you to talk by video chat, text, phone, or voice assistant with a digital version of someone who is no longer alive. 

Intrigued by what he was promising, I wrangled an introduction and eventually persuaded Vlahos and his colleagues to let me experiment with their software on my very-much-alive parents.

Initially, I thought it would be just a fun project to see what was technologically possible. Then the pandemic added some urgency to the proceedings. Images of people on ventilators, photos of rows of coffins and freshly dug graves, were splashed all over the news. I worried about my parents. I was terrified that they might die, and that with the strict restrictions on hospital visits in force at the time in the UK, I might never have the chance to say goodbye. 

The first step was an interview. As it turns out, to create a digital replica of someone with a good chance of seeming like a convincingly authentic representation, you need data—and lots of it. HereAfter, whose work starts with subjects when they are still alive, asks them questions for hours—about everything from their earliest memories to their first date to what they believe will happen after they die. (My parents were interviewed by a real live human, but in yet another sign of just how quickly technology is progressing, almost two years later interviews are now typically automated and handled by a bot.)

As my sister and I rifled through pages of suggested questions for our parents, we were able to edit them to be more personal or pointed, and we could add some of our own: What books did they like? How did our mum muscle her way into the UK’s overwhelmingly male, privileged legal sector in the 1970s? What inspired Dad to invent the silly games he used to play with us when we were small? 

Whether through pandemic-induced malaise or a weary willingness to humor their younger daughter, my parents put up zero resistance. In December 2020, HereAfter’s interviewer, a friendly woman named Meredith, spoke to each of them for several hours. The company then took those responses and started stitching them together to create the voice assistants. 

A couple of months later, a note popped into my inbox from Vlahos. My virtual parents were ready.

On one occasion, my husband mistook my testing for an actual phone call. When he realized it wasn’t, he rolled his eyes, as if I were completely deranged.

This Mum and Dad arrived via email attachment. I could communicate with them through the Alexa app on a phone or an Amazon Echo device. I was eager to hear them—but I had to wait several days, because I’d promised MIT Technology Review’s podcast team that I’d record my reaction as I spoke to my parents’ avatars for the first time. When I finally opened the file, with my colleagues watching and listening on Zoom, my hands were shaking. London was in a long, cold, depressing lockdown, and I hadn’t seen my actual, real parents for six months. 

“Alexa, open HereAfter,” I directed.

“Would you rather speak with Paul or with Jane?” a voice asked.

After a bit of quick mental deliberation, I opted for my mum.

A voice that was hers, but weirdly stiff and cold, spoke. 

“Hello, this is Jane Jee and I’m happy to tell you about my life. How are you today?”

I laughed, nervously. 

“I’m well, thanks, Mum. How are you?”

Long pause.

“Good. At my end, I’m doing well.”

“You sound kind of unnatural,” I said.

She ignored me and carried on speaking.

“Before we start, here are a few pointers. My listening skills aren’t the best, unfortunately, so you have to wait until I’ve finished talking and ask you a question before you say something back. When it’s your turn to speak, please keep your answers fairly short. A few words, a simple sentence—that type of thing,” she explained. After a bit more introduction, she concluded: “Okay, let’s get started. There’s so much to talk about. My childhood, career, and my interests. Which of those sounds best?”

Scripted bits like this sounded stilted and strange, but as we moved on, with my mother recounting memories and speaking in her own words, “she” sounded far more relaxed and natural. 

Still, this conversation and the ones that followed were limited—when I tried asking my mum’s bot about her favorite jewelry, for instance, I got: “Sorry, I didn’t understand that. You can try asking another way, or move onto another topic.”

There were also mistakes that were jarring to the point of hilarity. One day, Dad’s bot asked me how I was. I replied, “I’m feeling sad today.” He responded with a cheery, upbeat “Good!”

The overall experience was undeniably weird. Every time I spoke to their virtual versions, it struck me that I could have been talking to my real parents instead. On one occasion, my husband mistook my testing out the bots for an actual phone call. When he realized it wasn’t, he rolled his eyes, tutted, and shook his head, as if I were completely deranged. 

Earlier this year, I got a demo of a similar technology from a five-year-old startup called StoryFile, which promises to take things to the next level. Its Life service records responses on video rather than just voice alone. 

You can pick from hundreds of questions for the subject. Then you record the person answering the questions; this can be done on any device with a camera and a microphone, including a smartphone, though the higher-quality the recording, the better the outcome. After uploading the files, the company turns them into a digital version of the person you can see and speak to. It can only answer the questions it’s been programmed to answer—much like HereAfter, just with video.

StoryFile’s CEO, Stephen Smith, demonstrated the technology on a video call, where we were joined by his mother. She died earlier this year, but here she was on the call, sitting in a comfortable chair in her living room. For a brief time, I could only see her, shared via Smith’s screen. She was soft-spoken, with wispy hair and friendly eyes. She dispensed life advice. She seemed wise. 

Smith told me that his mother “attended” her own funeral: “At the end she said, ‘I guess that’s it from me … goodbye!’ and everyone burst into tears.” He told me her digital participation was well received by family and friends. And, arguably most important of all, Smith said he’s deeply comforted by the fact that he managed to capture his mother on camera before she passed away.  

The video technology itself looked relatively slick and professional—though the result still fell vaguely within the uncanny valley, especially in the facial expressions. At points, much as with my own parents, I had to remind myself that she wasn’t really there.

Both HereAfter and StoryFile aim to preserve someone’s life story rather than allowing you to have a full, new conversation with the bot each time. This is one of the major limitations of many current offerings in grief tech: they’re generic. These replicas may sound like someone you love, but they know nothing about you. Anyone can talk to them, and they’ll reply in the same tone. And the replies to a given question are the same every time you ask.  

“The biggest issue with the [existing] technology is the idea you can generate a single universal person,” says Justin Harrison, founder of a soon-to-launch service called You, Only Virtual. “But the way we experience people is unique to us.”

You, Only Virtual and a few other startups want to go further, arguing that recounting memories won’t capture the fundamental essence of a relationship between two people. Harrison wants to create a personalized bot that’s for you and you alone. 

The first incarnation of the service, which is set to launch in early 2023, will allow people to build a bot by uploading someone’s text messages, emails, and voice conversations. Ultimately, Harrison hopes, people will feed it data as they go; the company is currently building a communication platform that customers will be able to use to message and talk with loved ones while they’re still alive. That way, all the data will be readily available to be turned into a bot once they’re not. 

That is exactly what Harrison has done with his mother, Melodi, who has stage 4 cancer: “I built it by hand using five years of my messages with her. It took 12 hours to export, and it runs to thousands of pages,” he says of his chatbot.

Harrison says the interactions he has with the bot are more meaningful to him than if it were simply regurgitating memories. Bot Melodi uses the phrases his mother uses and replies to him in the way she’d reply—calling him “honey,” using the emojis she’d use and the same quirks of spelling. He won’t be able to ask Melodi’s avatar questions about her life, but that doesn’t bother him. The point, for him, is to capture the way someone communicates. “Just recounting memories has little to do with the essence of a relationship,” he says.

Avatars that people feel a deep personal connection with can have staying power. In 2016, entrepreneur Eugenia Kuyda built what is thought to be the first bot of this kind after her friend Roman died, using her text conversations with him. (She later founded a startup called Replika, which creates virtual companions not based on real people.) 

She found it a hugely helpful way to process her grief, and she still speaks to Roman’s bot today, she says, especially around his birthday and the anniversary of his passing.

But she warns that users need to be careful not to think this technology is re-creating or even preserving people. “I didn’t want to bring back his clone, but his memory,” she says. The intention was to “create a digital monument where you can interact with that person, not in order to pretend they’re alive, but to hear about them, remember how they were, and be inspired by them again.”

Some people find that hearing the voices of their loved ones after they’ve gone helps with the grieving process. It’s not uncommon for people to listen to voicemails from someone who has died, for example, says Erin Thompson, a clinical psychologist who specializes in grief. A virtual avatar that you can have more of a conversation with could be a valuable, healthy way to stay connected to someone you loved and lost, she says.  

But Thompson and others echo Kuyda’s warning: it’s possible to put too much weight on the technology. A grieving person needs to remember that these bots can only ever capture a small sliver of someone. They are not sentient, and they will not replace healthy, functional human relationships.

People may find any reminders of the deceased person triggering: “In the acute phase of grief, you can get a strong sense of unreality, not being able to accept they’re gone.”

“Your parents are not really there. You’re talking to them, but it’s not really them,” says Erica Stonestreet, an associate professor of philosophy at the College of Saint Benedict & Saint John’s University, who studies personhood and identity. 

Particularly in the first weeks and months after a loved one dies, people struggle to accept the loss and may find any reminders of the person triggering. “In the acute phase of grief, you can get a strong sense of unreality, not being able to accept they’re gone,” Thompson says. There’s a risk that this sort of intense grief could intersect with, or even cause, mental illness, especially if it’s constantly being fueled and prolonged by reminders of the person who’s passed away.

Arguably, this risk might be small today given these technologies’ flaws. Even though sometimes I fell for the illusion, it was clear my parent bots were not in fact the real deal. But the risk that people might fall too deeply for the phantom of personhood will surely grow as the technology improves. 

And there are still other risks. Any service that allows you to create a digital replica of someone without their participation raises some complex ethical issues regarding consent and privacy. While some might argue that permission is less important with someone no longer alive, can’t you also argue that the person who generated the other side of the conversation should have a say too? 

And what if that person is not, in fact, dead? There’s little to stop people from using grief tech to create virtual versions of living people without their consent—for example, an ex. Companies that sell services powered by past messages are aware of this possibility and say they will delete a person’s data if that individual requests it. But companies are not obliged to do any checks to make sure their technology is being limited to people who have consented or died. There’s no law to stop anyone from creating avatars of other people, and good luck explaining it to your local police department. Imagine how you’d feel if you learned there was a virtual version of you out there, somewhere, under somebody else’s control. 

If digital replicas become mainstream, there will inevitably need to be new processes and norms around the legacies we leave behind online. And if we’ve learned anything from the history of technological development, we’ll be better off if we grapple with the possibility of these replicas’ misuse before, not after, they reach mass adoption.

Will that ever happen, though? You, Only Virtual uses the tagline “Never Have to Say Goodbye”—but it’s not actually clear how many people want or are ready for a world like that. Grieving for those who’ve passed away is, for most people, one of the few aspects of life still largely untouched by modern technology. 

On a more mundane level, the costs could be a drawback. Although some of these services have free versions, they can easily run into the hundreds if not thousands of dollars. 

HereAfter’s top-tier unlimited version lets you record as many conversations with the subject as you like, and it costs $8.99 a month. That may sound cheaper than StoryFile’s one-off $499 payment to access its premium, unlimited package of services. However, at $108 per year, HereAfter services could quickly add up if you do some ghoulish back-of-the-envelope math on lifetime costs. It’s a similar situation with You, Only Virtual, which is slated to cost somewhere between $9.99 and $19.99 a month when it launches. 

Creating an avatar or chatbot of someone also requires time and effort, not least of which is just building up the energy and motivation to get started. This is true both for the user and for the subject, who may be nearing death and whose active participation may be required.

Fundamentally, people don’t like grappling with the fact they are going to die, says Marius Ursache, who launched a company called Eternime in 2014. Its idea was to create a sort of Tamagotchi that people could train while they were alive to preserve a digital version of themselves. It received a huge surge of interest from people around the world, but few went on to adopt it. The company shuttered in 2018 after failing to pick up enough users.

“It’s something you can put off until next week, next month, next year,” he says. “People assume that AI is the key to breaking this. But really, it’s human behavior.”

Kuyda agrees: “People are extremely scared of death. They don’t want to talk about it or touch it. When you take a stick and start poking, it freaks them out. They’d rather pretend it doesn’t exist.” 

Ursache tried a low-tech approach on his own parents, giving them a notebook and pens on his birthday and asking them to write down their memories and life stories. His mother wrote two pages, but his father said he’d been too busy. In the end, he asked if he could record some conversations with them, but they never managed to get around to it.

“My dad passed away last year, and I never did those recordings, and now I feel like an idiot,” he says.

Personally, I have mixed feelings about my experiment. I’m glad to have these virtual, audio versions of my mum and dad, even if they’re imperfect. They’ve enabled me to learn new things about my parents, and it’s comforting to think that those bots will be there even when they aren’t. I’m already thinking about who else I might want to capture digitally—my husband (who will probably roll his eyes again), my sister, maybe even my friends. 

On the other hand, like a lot of people, I don’t want to think about what will happen when the people I love die. It’s uncomfortable, and many people reflexively flinch when I mention my morbid project. And I can’t help but find it sad that it took a stranger Zoom-interviewing my parents from another continent for me to properly appreciate the multifaceted, complex people they are. But I feel lucky to have had the chance to grasp that—and to still have the precious opportunity to spend more time with them, and learn more about them, face to face, no technology involved.

COMMENTARY:   If you fell victim to the heading in this blog post, I will admit that I did too.  It is my opinion that for "grief tech" to take hold, the results must be convincing and reliable.  To attain this level of reliability, will require capturing extensive behavioral data, data analysis and machine learning (ML) over a long period of time (at least a year).  You want to be able to capture the true essence, the humanism and personality of the individual you want to be able to talk to after their death. 

The above article points out that HereAfter AI's application is "generic" and often gives wrong answers or reacts differently than you would normally expect.  For the app to gain mainstream adoption, the "app-created" loved one you want to talk with after death must sound like your loved one hands down and capture how that individual reacts to external stimuli in every aspect of their daily lives.  In my opinion, HereAfter AI's app is still in the embryonic stage, and it may take many months or even several years in order to approach early stage sentient evolution.

Questions that I keep asking myself is, do we really need "grief tech" apps?  Is "grief tech" too "creepy" for consumers? Is there a market for this type of app?  How big is the market?  Can this technology be adapted for other industries?  One industry use that I see as a distinct possibility is crime investigation and prevention, the insurance industry to reduce accidents or predict them, and developing offensive and defensive battle plans and strategies during time of war, just to name a few. 

Courtesy of an article dated October 18, 2022 appearing in MIT Technology Review

HOW THE VOLUME OF MARKETING DATA, INCREASING NO OF MEDIA CHANNELS AND PLATFORMS AND RESILIENCY ARE DRIVING CMO'S TO ADOPT DATA-DRIVEN MARKETING

Remaining resilient and competitive means doubling down on data.

Despite the tumultuous past few years, 75% of CMOs at SMBs say their team was resilient enough to adapt to periods of unpredictability.

Recent crises have catalyzed a focus on using data to make marketing budgets go further, by rewarding those who have invested time and resources into their data strategies, while many of the less data mature have failed to survive. And for those who have successfully ridden out the storm, data is now front of mind as another hurricane forms on the horizon.

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In fact, among the CMOs at SMBs we surveyed, a staggering 85% agree that being able to make data-driven decisions is a critical competitive advantage. As the global economy teeters on the edge of recession once again, marketers can look back to draw on a couple of lessons from recent economic crises.

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CMOs are cutting down on inefficiency - not ops spend

An encouraging number of CMOs are allocating more resources to bolstering their data operations and capabilities. As found in our recent study on the evolving role of the CMO, 73% have committed to investing in a marketing ops role, with 33% having only introduced this role in the last year. Combining management of the martech stack, data quality control, and analytics at once, the position is a smart addition to help eliminate internal silos and drive team efficiency by ensuring easy access to connected data, whenever it’s needed.

Our latest results also indicate growing interest in further enhancing data mastery, with 29% of CMOs increasing their data ops budget for 2022. The shift towards bigger spending, however, doesn’t run across the board. Almost as many (27%) say their budget has decreased while 44% are working with the same spending pot as last year.

Although unchanged budgets might simply reflect steady costs, other findings indicate there could be additional issues at play. An overwhelming 70% of CMOs name money, not time, as their most stretched resource. With finances already a significant concern, many may be under strain that’s leading them to tighten purse strings and cap their data ops spending.

While pausing investment might bring some short-term gains, allowing spend to stagnate will cause multiple issues over time. As analytics tools and practices evolve, teams will fall further behind and be less able to squeeze as much as they can out of marketing budgets. Continued underinvestment also makes it more likely they will battle with further inefficiencies that add to already unwieldy workloads and impact productivity. Businesses, therefore, need to balance costs carefully, running calculations of how much they can save from stalling data ops investment, versus the benefits a well-supported team can drive.

Key Takeway:

Stretched finances could soon result in budget cuts. CMOs need to use their resources and invest in key areas now if they want to tackle the recession armed with better insight.

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What’s shaping the CMO’s roadmap?

CMOs are struggling to keep up with new platforms and channels

Fast escalating digitalization is bringing a mix of opportunities and challenges for CMOs at SMBs. Where new platforms and channels bring more scope for audience engagement, they’re also seeing an exponential rise in data and complexity.

Keeping on top of sprawling multi-channel activity is getting harder and harder; pushing up time to insight and making it difficult for teams to achieve the real-time performance view they need to guide quick and informed decisions. With demand for frequent and granular reports from the rest of the C-suite growing, it’s easy to see why CMOs are feeling pressured. One-third (33%) cite multiplying channels and platforms as the biggest external factor impacting marketing today.

In contrast, there is a much lower level of concern around data regulation, such as the GDPR. Previously high on every CMO’s priority list, the European regulation is now seen as a major external impact by just 8%, relegating it to last place. Despite increasing fines for rule breaches, marketing leaders are more comfortable with regulations they know and have already adjusted to than the varied complications emerging channels and platforms create; highlighting the urgent need for them to adapt in line with rapid digital evolution.

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More channels and platforms have left CMOs buried under their data

As might also be expected, both capturing and using the data generated by increasing channels and platforms is proving a challenge. Nearly all (99%) of CMOs say their marketing team is working with at least 10 data sources, 52% say they’re working with 14 data sources or more, and 32% say their teams use external data sources for marketing analytics.

While similar research from 2019 revealed that nearly half (47%) of respondents had 6 or fewer data sources, three years on we couldn’t find a single respondent reporting so few data sources.

As more and more data streams in from different directions, teams are reaching their limit; with 67% of CMOs admitting they have been overwhelmed by the quantity of marketing data available in recent years. This may also explain why the unpredictability of black swan events and the growing complexity of audience behavior rank second and third in key external impacts on marketing, at 26% and 17% respectively.

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As marketers struggle to deal with infinitely increasing data sources, effectively tracking and responding to unpredictable events is becoming more difficult. The expanding variety of platforms and channels that consumers engage with is also creating similar problems for understanding audience behavior, with marketing teams struggling to achieve a clear view amid a relentless influx of disparate data.

Tellingly, for respondents who cited a lack of resilience and difficulty adjusting during black swan events, reports of data overload soar to 92%, and jump to 100% for those decreasing their data ops budget this year. For marketing teams that have not invested in strengthening data handling capacity and implementing streamlined processes, keeping pace with digitalization is a tougher task.

Key Takeaway

Marketing is going to get more complicated as digital development presses on. CMOs that ensure teams can handle the rising data tide will have the best chance of staying afloat and steering their way to optimal outcomes.

What’s stopping CMO's from investing in tech?

Optimism about company prospects is crucial, especially when it comes to thriving through a recession. But it’s also important for businesses not to view data capabilities with rose-tinted glasses.

In our recent Marketing Analytics: State of Play 2022 report, 68% of respondents self-identified as data mature, despite lingering dependence on outdated practices and spreadsheets.

Download the full report to continue reading HERE.

Courtesy of an e-book dated September 2022 titled, "What's Shaping The CMO's Roadmap: Recession, Resilience and Marketing Data" published by Adverity  

ABBVIE INC UNDER ATTACK AS THE FDA APPROVES NEW 'BOTOX' RIVAL DAAXIFY FROM REVANCE THERAPEUTICS

The U.S. Food and Drug Administration approved a new antiwrinkle treatment that could be the most formidable challenger to date to market leader Botox.

Analysts say the drug, from Revance Therapeutics, poses a threat to the market-dominating anti-wrinkle treatment because it promises to last longer.   Revance plans to market Daxxify as a luxury item and emphasize its longer duration than Botox and other toxins.

For about two decades, Botox, now sold by AbbVie Inc., has dominated the aesthetic-drug market it helped pioneer, racking up tens of billions of dollars in sales and successfully fending off challengers.

The FDA’s approval of Revance Therapeutics Inc.’s Daxxify introduces a new rival that doctors and analysts said could succeed carving out a big slice of a lucrative and fast-growing market by promising to last two months longer than Botox’s four months.

The FDA approved Daxxify, also known as daxibotulinumtoxinA, for the temporary improvement of frown lines in adults, Revance said Thursday.

The decision, analysts and doctors said, should touch off a fierce battle between upstart Revance and industry giant AbbVie, which acquired Botox as the centerpiece of a $63 billion deal for its manufacturer in 2020.

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“This marks what we think is the first real competitive threat to Botox,” said Cowen Inc. analyst Ken Cacciatore, who expect011s Daxxify to generate $1 billion in sales as early as 2030.

Botox, derived from the poisonous Botulinum toxin bacteria, blocks signals between nerves mand muscles, causing the muscles to relax. A doctor originally developed the drug to treat an eye disorder, before patients noticed it smoothed their wrink,m1 les.

The discovery prompted a company called Alle rgan to pursue Botox’s cosmetic use, which the FDA granted in 2002, launching a new market for p5mkroducts and procedures that enlarge lips, fill in cheeks and sculpt other body parts.

That aesthetics market was worth $14.6 billion worldwide last year, according to the Aesthetic Society, a professional society of plastic surgeons. Physicians in the U.S. performed about 4.4 million procedures involving Botox and two of its rivals in 2020, the American Society of Plastic Surgeons said.

The aesthetics market has been growing 10% annually, but could increase more rapidly over the next few years, according to McKinsey & Co., driven in part by a proliferation of med spas and social-media-inspired awareness among young people.

The Botox brand name has become a fixture in America’s cultural lexicon, like Band-Aid and Kleenex.

Despite facing a raft of competitors, Botox holds about 70% market share. The drug’s profitability attracted AbbVie, which sought the product as it girded for lower-priced competition for its top-selling drug Humira.

Botox sales totaled more than $4.6 billion last year, up more than $1 billion from the year prior as people working from home because of the pandemic sought to look good in video calls and returned to seeing their aesthetic doctors in person.

Botox is also approved for therapeutic uses. It lasts up to four months, according to the product’s website.

The Revance drug threatens to eat into Botox sales, which last year made up roughly 8% of AbbVie’s $56 billion revenues, behind only Humira’s roughly $20 billion in sales and the $5.4 billion from blood-cancer treatment Imbruvica.

To counter the threat, AbbVie has said it is investing more in its aesthetics business, spending more on R&D, consumer advertising and expanding its sales force in the U.S. as well as China, which the company said is a growing market.

AbbVie has said it is developing a toxin whose wrinkle-reducing duration could last longer than the approved version of Botox and a fast-acting one that has shorter duration.

AbbVie declined to comment.

Revance is taking a different tack than older Botox rivals like Dysport, made by France’s Ipsen Biopharmaceuticals; Xeomin, made by Germany’s Merz Group, and Evolus Inc.’s Jeuveau. The rivals primarily tried to compete on price, according to doctors and analysts.

Rather than discounting its drug to reach a mass market, Revance plans to market Daxxify as a luxury item to high-volume injectors in the U.S. and emphasize its longer duration than Botox and other toxins, Chief Executive Mark Foley said.

The company hasn’t disclosed pricing but has said it expects physicians to pay more than they do for existing toxins. As with other antiwrinkle toxins, doctors would purchase Daxxify directly from Revance and then bill patients, rather than insurers.

“We’re going to be introducing a product that we’re not trying to say is everything to everybody. Now, you can choose,” Mr. Foley said.

Daxxify will face big obstacles, doctors and analysts said, such as overcoming the loyalty of doctors and patients who are longtime Botox customers.

AbbVie can also sell Botox with its other aesthetic products like fat-removing CoolSculpting and dermal filler Juvéderm in exchange for discounts. And physicians will need to be trained to use Revance’s drug because it is prepared and administered differently than Botox.

In a survey of 25 physicians last year by Truist Securities Inc., nearly two-thirds said the new Revance drug would account for none to a small amount of their toxin usage, while most of the remaining physicians surveyed said it would account for a moderate amount of usage.

The FDA was slated to decide on Daxxify in 2020, but pandemic-related travel restrictions delayed the agency’s inspection of Revance’s manufacturing facility in Newark, Calif., according to the company. Several months after completing the inspection last summer, the FDA declined to approve the drug, which Revance said was due to manufacturing concerns.

After resolving those FDA concerns, Revance requested approval again and has since addressed all the agency’s subsequent issues, Mr. Foley said.

In a pair of late-stage trials studying about 600 total subjects, about a third of patients who received the product maintained either no or only mild wrinkles after about six months, according to Revance.

Similar results were reported by researchers in a subsequent open-label trial of about 2,700 subjects. No safety concerns were observed in the studies, according to the company.

COMMENTARY:   The idea that you can market Daaxify as a "luxury" prescription facial injectable wrinkle remover makes me want to laugh.  Differentiator strategy?  The only point of differentiation that Daaxify can really claim is that it lasts two months longer than Botox.  AbbVie has an answer for that:  AbbVie already developed a longer-lasting version of Botox, so Daaxify's advantage will not last very long when they go head-to-head.  Don't know the difference in price between Daaxify and Botox in order to say Daaxify can compete on price.  New entrant into the market?  I have never considered being new into a market a competitive advantage.  Nobody really knows you.  If the Revance Therapeutics, maker of Daaxify were part of Pfizer, I might worry.  

 

Botox dominates the market for wrinkle remover facial injectables with a 70% share of the global market.  It is well entrenched and Botox is the go-to wrinkle remover facial injectable drug by doctors.  Marketing Daaxify as a "luxury" just does not compute with me.  I wasn't aware that there was a "luxury" market segment for wrinkle remover facial injectables.  Will dermatologists ask their patients, "Do you prefer the newer Daaxify or the more popular regular Botox or the newer advanced version of Botox that also lasts eight months?"  

 

AppVie's Botox has huge advantages over new market entrants:  well branded, loyal customers, better or superior product, distribution channels (doctors) all locked-up, huge product development team, and deep pockets to protect its market position.  It's a Lovemark brand by any definition.  Those are huge castle walls to climb and a huge moat to cross.   

 

Sorry, Daaxify.

 

How Big is the wrinkle remover facial injectables market?   Here are a few facts:

 

Factors driving the growth and use of facial injectable products to remove wrinkles are as follows: 

• Demand For Anti-Aging Aesthetics - A growing focus on physical appearance among consumers, especially among women, has led to an increased demand for facial injectables in recent years.
• Increased Demand For Minimally Invasive Procedures - Consumer awareness regarding minimally invasive procedures due to various beauty campaigns being organized by key players in the market is also a driving factor for market growth.
• COVID-19 Pandemic - The ongoing COVID-19 pandemic has increased the time spent on video calls. Known as the ‘Zoom Boom’, several adults are becoming more aware of their appearance. This has increased demand for cosmetic surgeries, with Botox being one of the most popular products preferred.

According to market research by Grand View Research, the global facial injectable market size was valued at USD $16.1 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 9.1% from 2022 to 2030.  

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Vantage Market Research states that the global facial injectable market is driven primarily by new product launches and the market is estimated to reach USD $7.5 billion by the year 2028.  

 

The Global Anti Aging Market is valued at USD 59.1 Billion in the year 2021 and is projected to reach a value of USD 88.1 Billion by the year 2028. The Global Market is anticipated to grow exhibiting a Compound Annual Growth Rate (CAGR) of 6.9% over the forecast period.  The Global Facial Injectables Market revenue stood at USD $4.4 billion in the year 2021 and is expected to grow at a Compound Annual Growth Rate (CAGR) of 9.4% during the forecast period. 

 

On the basis of product, the Anti-Aging Market is segmented into four segments:

• Anti-Wrinkle.
• Hair Color.
• Ultraviolet (UV) Absorption.
• Anti-Stretch Mark.

The Anti Aging sector is currently dominated by anti-wrinkle products, which account for the majority of sales.  Anti-wrinkle products had the largest market share in 2021, and significant growth is expected by 2028.  Because of the harmful effects of cosmetics and chemical-based products, natural products are predicted to expand at the fastest rate.

 

According to market research by Grand View Research, the U.S. facial injectable market size was valued at USD $5.6 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 9.1% from 2022 to 2030.

 

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The anti-aging market is segmented demographically into four segments: 

• Generation X.
• Generation Y.
• Generation Z.
• Baby Boomers.

Generation X has dominated the Anti Aging industry in terms of revenue. Increased disposable income and a greater focus on physical appearance would both help the market flourish. Over the forecasted period, the demographic group Generation Y is likely to grow at a high rate. The target demographic is millennials who are familiar with high-end premium brands like Estée Lauder and Elizabeth Arden. Premium skincare brands are becoming increasingly popular among millennials.

 

Courtesy of an article dated February 8, 2022 appearing in The Wall Street Journal, an article dated June 2022 appearing in Vantage Market Research, an article dated February 2021 appearing in Grand View Research,

WARBY PARKER FACING ECONOMIC UNCERTAINTY, REDUCES SALES OUTLOOK AND TRIMS COSTS TO REDUCE MOUNTING LOSSES FOR THE YEAR 2022

Warby Parker on Thursday joined the slew of retailers that have cut their financial forecasts for the year, even as it reported a narrower-than-expected loss in its fiscal second quarter and sales in-line with analysts’ estimates.

Chief Financial Officer Steve Miller said the eye glasses maker is facing an “uncertain macroeconomic environment.”  

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Miller said in a statement:

“We are taking a disciplined approach to managing costs to set us up for sustainable growth and profitability.”

As part of its efforts to trim expenses, Warby has cut 63 jobs, representing about 2% of its total employee base and 15% of corporate positions, a spokesperson confirmed to CNBC.

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In recent weeks, retailers including Walmart, Best Buy, Gap and Allbirds have lowered their expectations for sales or profits as they begin to see consumers cut back spending on discretionary items, such as apparel or electronics, amid soaring inflation. At the same time, though, luxury brands like Ralph Lauren and Versace owner Capri Holdings say people are still splurging on expensive shoes and handbags.

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At Warby, customer demand started to fall off in the second half of May, executives told analysts on a conference call Thursday morning. The company also said it pulled back on marketing spending as fewer people visited its brick-and-mortar shops.

Still, the retailer’s shares rallied Thursday, closing up more than 19%. Investors cheered the cost-cutting efforts as Warby attempts to turn a profit while still in growth mode.

Here’s how Warby did in its fiscal second quarter ended June 30 compared with what analysts were anticipating, based on Refinitiv estimates:

• Loss per share: 1 cent adjusted vs. 2 cents expected
• Revenue: $149.6 million vs. $149.5 million expected

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Warby’s loss for the three-month period ended June 30 widened to $32.2 million, or 28 cents per share, from a loss of $18.8 million, or 35 cents a share, a year earlier. Excluding one-time items, it lost a penny a share.

Sales grew roughly 14% to $149.6 million from $131.6 million a year earlier, boosted in part by loyal customers spending more money on average.

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The company said its count of active customers increased 8.7% to 2.26 million. It defines these customers as people who have made at least one purchase of any product or service from Warby in the previous 12-month period.

“While the losses are disappointing, they are somewhat understandable given that the company remains in expansion mode,” said Neil Saunders, managing director of GlobalData Retail.

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However, Saunders said, the main concern is that the money spent needs to translate into delivering stronger returns.

For fiscal 2022, Warby is now calling for sales to be within a range of $584 million to $595 million, down from a prior range of $650 million to $660 million.

It sees its adjusted EBITDA amounting to about $22 million to $26 million, including a $7.5 million hit related to pandemic-related disruptions to its business.

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In its latest quarter, Warby said it opened nine stores, bringing its total count of physical locations to 178. The retailer, founded online in 2010, has been ramping up its investments in real estate to reach more customers and market its brand. It hopes to one day grow to more than 900 stores.

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Beyond its glasses, Warby has a contact lens business and offers services in its stores for eye exams. The company has said that people who buy contacts from Warby end up spending more than those who only shop its eyewear.

Including Thursday’s gains, Warby shares have fallen more than 60% year to date.

COMMENTARY:   Warby Parker's sales began to soften about the same time many retail brands began to feel the effects of inflation and slowdown in buying by consumers.  Warby Parker joined the slew of retailers that have cut their financial forecasts for the year 2022.  Warby Parker reported a narrower-than-expected Q2 2022 quarterly loss and sales in-line with analysts' estimates. 

Warby Parker opened a record 35 stores in 2021 to end the year with 161.  Warby Parker plans on opening a total of 40 stores in 2022.  Warby Parker had 188 stores in the U.S. on July 27, 2022, but the economic uncertainty will probably put a halt to any new store openings in the second half of 2022.

Warby Parker's primary target customers are hip and fashionable millennial-aged consumers between 25-34.  Warby Parker customers are socially active, purchase online, overshare and engage on social media channels.  Warby Parker understands them very well. These young consumers have a bustling loyalty to the brand.  This may be Warby Parker's Achilles heel for the following reasons:

• Millennials have the highest median income but are burdened with high levels of debt from home loans, automobile loans, personal loans and student loans, and this debt is growing at a faster rate than any other generation.
• Millennials are the largest generation and growing as a group because lower wage earning middle class workers are falling behind economically and trickling down into the millennial generation group.
• A 2019 survey by Fannie Mae found that 55% of millennials and Generation Z believe that homeownership is “out of reach financially.” Several factors, including the rising cost of housing and pre-existing debt (often from student loans), present barriers to homeownership for these generations — and new obstacles continue to emerge.
• Millennials cannot afford today's high rents and utilities and often have one or more roommates to lessen this burden.  
• Millennials do not make enough to save for retirement or emergencies and often resort to credit cards to make ends meet.    
• 60% of millennials (those born between 1983 and 2002) are considered middle-class, compared to 70% of baby boomers (those born between 1943 and 1964) when they were in their twenties, according to the report, “Under Pressure: The Squeezed Middle Class.” Worldwide, the share of households considered middle-class has slipped from 64% in the 1980s to 61% today. 

It is not all bad news for Warby Parker.  Growth opportunities include progressive lenses, which account for 20 percent of Warby’s mix versus 45 percent of all prescription glasses sold in the U.S. Progressive glasses start at $295, Warby’s highest price point and highest margin.  Buyers of progressive lenses tend to be 45 years or older.  Dave Gilboa, co-CEO at Warby Parker said, “Progressives purchases tend to skew more toward bricks and mortar given the complex nature of the prescription and the older customer demographic.”

Stores also enable eye exams, which accounted for less than two percent of Warby’s sales in 2021 compared to 10-to-15 percent at a typical optical retailer. Neil Blumenthal, co-CEO, said exams also “give us greater control over the customer experience.”

Finally, in-store exams support sales of contact lenses, which doubled in 2021 to four percent of Warby’s sales versus 15-to-20 percent at a typical optical retailer. Industrywide, 70 percent of consumers buy glasses and contacts in the same location where they have an eye exam.

Courtesy of an article dated August 11, 2022 appearing in CNBC, an article dated April 27, 2022 appearing in Seeking Alpha, and an article dated March 24, 2022 appearing in Retail Wire, and an article dated April 12, 2019 appearing in CNBC

THE US VENTURE CAPITAL BULL MARKET HAS RUN ITS COURSE, BUT REPORTS OF ITS DEMISE ARE PREMATURE

Venture capital continues to fall off from the 2021 numbers, but the results still point to the second biggest year on record.

In spite of dramatic headlines about volatile market conditions, venture capital still recorded a massive quarter in Q2 2022, with investments of $58 billion, a 23% decline from the $77 billion raised in Q1 2022. 

All things considered, 2022 will still rank as the second highest investment year in history, even though it will be greatly overshadowed by results of 2021. Macroeconomic factors, including inflation, rising interest rates and geopolitical uncertainties, will continue to serve as strong headwinds throughout 2022 and into the first half of 2023.

Still, it’s not all bad news. Record amounts of dry capital sit on the sidelines to fund further innovation. Venture capitalists have still raised $122 billion in new venture funds so far this year. 2022 is shaping up to be the third record-breaking year of fund formation. Read on for more insights into this quarter’s numbers.

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Mega-round financing

In Q2, we saw a significant drop-off in the number of deals and mega-round financing. All told, mega-round financing raised $27 billion in capital, just over half of the total capital raised this quarter.

This is the first time since 2020 that the number of deals has fallen below 200 for a quarter. Given that mega-round volume has dictated the overall dollar volume in the market, this offers a fairly good indicator that dollars raised over the next two or three quarters could be even lower.

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Sectors

As in prior quarters, the IT, business and financial services, and health care sectors led the way in Q2 in terms of activity, despite a significant pullback in all three areas. Energy and utilities fell only 5%. Considering the ongoing turmoil in the energy markets, this demonstrates that the right companies can still find opportunities.

While most sectors were off, the bright spot was food and beverage — up by 68% — driven largely by food alternatives, including protein and dairy replacement products.

Another sector that saw a slight rise was business support services, which shows that in spite of volatility, the B2B economy remains stable.

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Regions

Continuing its track record of strong showings, the San Francisco Bay Area, led by Silicon Valley, churned out 31% of all capital raised so far in Q2 2022.

While the Bay Area may not crack $100 billion this year (for the first time since 2021), it will definitely beat 2019 and 2020 in terms of dollars invested.

In other regions, New York continued to hold onto second place, but Boston closed the gap with a strong quarter — one of the few regions that experienced an increase over Q1. Denver, San Diego and Seattle all saw a rise in investments, too.

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What does this mean for entrepreneurs and investors?

Even as we work through this market downturn, this is not the time for entrepreneurs to lick their wounds. Entrepreneurs should instead continue to network and build their businesses. We suggest they consider the following three points:  

1. Fundraising will not be easy in the months ahead, so before you seek new funding, look for ways to free up working capital to extend the runway of liquid funds.
2. To that end, entrepreneurs should carefully scrutinize any major investment, new building, major hiring spree or general expansion. Without a clear and obvious high return on investment, it’s not worth the risk. This is the time to focus on serving customers and adding value.
3. Conversely, this could be a good time to add talent. As overextended companies trim their head counts, entrepreneurs may want to look for opportunities to recruit high-impact talent as the job market loses some of its tightness.

Finally, companies engaged in fundraising should challenge themselves to be even more efficient in terms of performance. If you’re not getting any traction with investors, refocus on customers and execution. Achieving good results in tough times impresses investors.

From an investor perspective, investors are focusing on what is already in their pipeline, as opposed to new opportunities. We expect many investors to take a pause through the next few quarters and be much more selective. 

Overall, we expect Q3 investments to be lower than Q2. In this current environment, the fear of missing out is gone, and investors can now afford to wait as they review opportunities.

Looking at the rest of the year, we estimate venture-backed companies will raise some $225 billion in 2022. This is not all doom and gloom. There has never been more dry capital to fund innovation. We expect transformational companies to emerge, as we usually see in down cycles. Tough times are often when true leaders surge forward from the pack.

COMMENTARY:   Like the US VC market, the global venture ecosystem continues its slowdown in Q2’22 as funding decreases by 23% QoQ.

Global venture funding saw $108.5B raised across 7,651 deals last quarter — marking the biggest quarterly percentage drop in deals (and the second-largest drop in funding) in a decade. Despite this eye-opening decline, funding and deal totals remain above levels last seen in 2020.

US-based companies accounted for nearly half of all funding, with some of the largest rounds of the quarter going to Epic Games, SpaceX, and Intersect Power.

Below, check out a few highlights from our 329-page, data-driven State of Venture Q2’22 Report. For deeper insights, all the record figures, and a ton of private market data, download the full report.

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Q2’22 highlights across the venture ecosystem include:

• Mega-rounds ($100M+) accounted for $50.5B in funding, a 31% fall from the previous quarter.
• M&A deals trended down for the first time in 8 quarters, dropping to 2,502 — a 6-quarter low. IPOs and SPACs dropped by 15% and 26% QoQ, respectively. ​
• For the first time since Q4’20, fintech startups accounted for less than a fifth of all funding.
• Europe saw a 13% decrease in funding compared to Q1’22, the smallest dip among major regions.
• Tiger Global Management was the top investor for the third straight quarter in Q2’22, investing in 86 companies. However, that number marked a decline from 120 in Q1’22. 
• Global unicorn births slowed to 85, bringing the total unicorn count to 1,170 — a modest 6.8% QoQ increase. The US and Europe accounted for most of the new unicorns, with 49 and 16 unicorn births, respectively. Entrants include KuCoin ($10B valuation), The Boring Company ($5.7B), and SonarSource ($4.7B).

Courtesy of an article dated July 8, 2022 appearing in Crunchbase and an article dated July 12, 2022 appearing in CBInsights

THE MARKET FOR SELF-SERVICE BUSINESS INTELLIGENCE IS EXPERIENCING EXPLOSIVE GROWTH, POISED TO REACH $19.31 BILLION BY 2028

Self-Service BI Market size was valued at USD 6.13 Billion in 2020 and is projected to reach USD 19.31 Billion by 2028, growing at a CAGR of 15.44% from 2021 to 2028.

The key drivers of the global Self-Service BI Market are the emergence of cloud computing in the BI market, rising adoption by small and medium businesses, a growing volume of business data, increasing demand for In-depth competitive insights, and usage ease. The Global Self-Service BI Market report provides a holistic evaluation of the market. The report offers a comprehensive analysis of key segments, trends, drivers, restraints, competitive landscape, and factors that are playing a substantial role in the market.

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Global Self-Service BI Market Definition

Self-service business intelligence (SSBI) is an approach to data analytics that enables business users to access and work with corporate data even though they do not have a background in statistical analysis, business intelligence, or data mining. SSBI has emerged as a popular option as it allows a client company to do more without as much support from an IT vendor. Benefits of SSBI include – improving organizational decision making, increasing response time, improve the allocation of resources, improve organizational results, and reduces organizational risks.

Self-service BI guides business services from non-logical foundations to make bits of knowledge and information examination. The Self-Service BI Market is confronting a developing interest for the business fields ascribed to its ability to change over business foundations into effective information-driven associations or businesses. The Self-Service BI Market is projected to develop inferable from its ability to decentralize the business logical interaction. The Self-Service BI Market fills in as a benefit to the non-specialized business clients for considering and investigating information bits of knowledge by directing down the business information.

The Self-Service BI Market is quickly rising as a direct result of the shift from customary BI instruments for business information examination to contemporary BI apparatuses alongside the developing business sector of organized and unstructured information. The primary drivers for the worldwide Self-Service BI Market are the rising interest for creating inside and out cutthroat information examination and growing the business information volume. Different components that intensify and lift up the development of the worldwide Self-Service BI Market incorporate tireless evolving organizations, the requirement for being an improved investigation-driven association, and the failure to meet the business demands within the specified time.

Global Self-Service BI Market Overview

An increment in the reception of self-service BI programming because of its convenience for non-specialized staff is a central point expected to drive the Self-Service BI Market development. Ascend in information-driven associations due to the growing volume of business information, has driven the interest for self-service BI devices as it gives moment information bits of knowledge. Digitalization had prompted an ascent in the volume of information produced by business measures.

Self-service BI apparatuses help business clients to incorporate and examine information storehouses and ongoing information into reports. In addition, business engineers or key leaders are picking arrangements that let them go about as information modelers and give them a versatile semantic model. With the assistance of self-service BI apparatuses, business clients can alter dashboards and reports just as help clients channel or foster reports dependent on their key markers. This thus is required to drive the development of the worldwide Self-Service BI Market.

However, the high initial capital requirement for the execution of self-service BI applications is a significant controlling variable of the worldwide market, which is required to obstruct the market development partly. Besides, the expansion of self-service examination instruments among little and medium-scale undertakings is a pioneering variable of Self-Service BI Market patterns.

Global Self-Service BI Market: Segmentation Analysis

The Global Self-Service BI Market is Segmented on the basis of Business Function, Application Type, Vertical, Component, Deployment Mode, and Geography.

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Self-Service BI Market, By Business Function

• Finance
• Marketing
• Sales
• Human Resources
• Operations

The major business capacities for which Self-Service BI Market is conveyed are marketing, sales, operations, finance, and human resources. The adoption of Self-Service BI for operations is required to increment essentially in the coming years on account of the expanding need for settling tasks-related issues continuously and the requirement for smoothing out activities across enterprises.

Self-Service BI Market, By Application Type

• Risk and compliance management
• Fraud and security management
• Operations management
• Sales and marketing management
• Customer engagement and analysis
• Predictive asset maintenance
• Supply change management and procurement
• Others

On the basis of Application, the Self-Service BI Market has been segmented into fraud and security management, sales and marketing management, predictive asset maintenance, risk and compliance management, customer engagement and analysis, supply chain management, and procurement, operations management, and other applications.

Self-Service BI Market, By Vertical

• Healthcare
• Government
• IT and Telecom
• Banking, financial services, and insurance (BFSI)
• Transportation and logistics
• Retail and e-commerce
• Media and Entertainment
• Energy and utilities
• Others

Based on Vertical, the market is segmented into Healthcare, Government, IT and Telecom, Banking, Financial Services, and Insurance (BFSI), Transportation and Logistics, Retail and e-commerce, Media and Entertainment, Energy and Utilities, and Others. BFSI holds the biggest portion of the Self-Service BI Market.

The development is powered by the developing need of individuals to improve on their responsibility identified with security and their expanding reliance on information produced from different IT frameworks utilized for monetary exchanges. The medical services and life sciences vertical is relied upon to develop at the most elevated growth because of the expanding need to store and oversee information coming from different associated medical services gadgets and wellbeing record frameworks utilized across medical services associations

Self-Service BI Market, By Component

• Software
• Services

The Self-Service BI Market is fragmented by software and services. The services portion is required to develop at the most noteworthy growth rate. Among every one of the services, counseling services in the expert services fragment are projected to observe the most popular because of the developing requirement for self-service BI programming arrangements across associations.

Self-Service BI Market, By Deployment Mode

• On-Cloud
• On-Premises

Based on Deployment Mode, the market is segmented into On-Cloud and On-Premises. The interest for on-demand or cloud-based self-service BI arrangements is expanding because of its financially savvy and time-effective highlights; its development is explicitly high in Small and Medium Enterprises (SMEs), where minimal expense arrangements are extraordinarily required.

Self-Service BI Market, By Geography

• North America
• Europe
• Asia Pacific
• Rest of the World

The Global Self-Service BI Market is segmented on the basis of regions which are North America (The USA, Canada, and Mexico), Europe (Germany, France, UK, and The Rest of Europe), Asia Pacific (India, Japan, China, and The Rest of Asia Pacific) and Rest of the World (Latin America, the Middle East, and Africa). The North American region, trailed by Europe, is required to keep being simply the biggest income-producing area of self-service BI sellers.

This is basically on the grounds that, in the developed economies of the U.S. also, Canada, there is a high spotlight on advancements acquired from innovative work and innovation. The Asia Pacific region is relied upon to be simply the quickest developing district in the help Self-Service BI Market in view of the expanding selection of the Internet of Things (IoT) and savvy innovations and different government drives, for example, brilliant urban areas across Asia Pacific nations including China and India.

Key Players

The Self-Service BI Market is highly competitive and consists of several major players. In terms of market share, few of the major players currently dominate the market. These major players with a prominent share in the market are focusing on expanding their customer base across foreign countries. These companies are leveraging on strategic collaborative initiatives to increase their market share and increase their profitability. 

The major players in the self-service BI market are:  Microsoft Corporation, IBM Corporation, Oracle Corporation, SAP SE, SAS Institute, Tableau Software, MicroStrategy, TIBCO Software, Qlik Technologies, Zoho Corporation, and Others.  Top business intelligence software vendors by market share for the year 2021 are listed below:

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Our market analysis also entails a section solely dedicated to such major players wherein our analysts provide an insight into the financial statements of all the major players, along with its product benchmarking and SWOT analysis. The competitive landscape section also includes key development strategies, market share, and market ranking analysis of the above-mentioned players globally.

COMMENTARY:  Self-service business intelligence refers to the processes, tools, and software utilized by companies in order to empower business users to select, filter, compare, visualize and analyze data on their own, without the need for specialized and advanced IT training.

As the amount of business data is constantly growing, it is important that companies focus their efforts on managing the data and analyzing it with the help of business intelligence, designed to help business people draw insights from past performance, predict future events and avoid obstacles even before they have taken place. The investment in and use of the tools that can generate quality business insights have experienced long-term growth, regardless of the economic cycle. It has accelerated in recent years as enterprises are craving data to not just grow and improve, but also to manage their businesses on a daily basis.

The times when online BI was applied only by large enterprises due to complexity, costs and the skills required are long gone. Today small and medium-sized businesses (SMBs) are becoming significant BI buyers. In order to stand apart from the competition, reduce costs, and increase profits, a company must make intelligent decisions. To do this, these decisions must logically be based on trustworthy and relevant data, and this is exactly where BI comes in useful. As the applications, tools, and software become more affordable, the introduction of self-service business intelligence (SSBI) has made the in-depth analysis more user-friendly, so that everyone on the team can participate.

TOP SELF-SERVICE BUSINESS INTELLIGENCE BENEFITS

1. Answer critical questions in seconds: Gone are the days of asking for a critical KPI and having to wait hours, if not days, for the busy IT department to pull the report. SSBI puts the user in charge of the data. Data can be accessed on the fly for real-time analysis and immediate actionable insights, giving your team a competitive advantage.
2. Combine multiple data sources: Comprehensive business intelligence often requires combining multiple data sources and performing cross-database queries. From online to offline data, a user-friendly SSBI setup will enable you to aggregate and analyze every type of data available in one central place.
3. Excel just isn’t cutting it: When you can’t access the data you need it is still common for users to shortcut their data management processes to get instant answers. Excel is a common go-to tool for short cuts. A 2011 study by Forrester showed that 88 percent of users rely “heavily” or “exclusively” on spreadsheets. Old-style BI is clearly not meeting their needs. While 2011 was years ago, it is safe to assume that in 2020 the number is still high, especially when it comes to ad hoc analysis. Though Excel was never intended to be a BI tool, it can be tempting to depend on spreadsheets for workflow from familiarity. Relying on Excel is a risky proposition because it requires a lot of manual data entry, leaving it prone to errors, especially when spreadsheets are passed around your organization. The days of exporting large datasets to spreadsheets to be converted into charts and pivot tables are over. With the new generation of Self-service BI tools, data analysis within spreadsheets belongs to the past.
4. Democratizing data: The entire team no longer needs to rely on a data analyst poring over spreadsheets, looking for clues to improve services. Self-service BI tools provide information for everyone involved in the project in an easy-to-share format. Because all team members can easily access the same data, SSBI makes the decision-making process more inclusive, puts everyone involved in the decision making process on the same page, allowing everyone an equal opportunity to impress the boss and customers.
5. Mobile matters: Business Intelligence means having the right data at the right time to make the right calls. Nowadays, that means accessing your data wherever you are, which often involves the use of a mobile device. Taking BI mobile is critical for companies to respond to issues in real-time and make informed decisions immediately. Continual access to dashboards means that you and your colleagues will always have the information you need, regardless of your location.
6. Free up the IT department: Old data, or different data structures, often bring the IT department back into the picture to clean up the data to make it functional. A common issue with this, is that it impacts how timelines are delivered. Across industries, the vast minority of users get their reports within one and three days of the initial request. With the fast pace of today’s business environment, a day long wait can render the initial question moot.
7. Data visualization is key: Data visualization plays a key role in buying decisions. Combining millions of data points and advanced math concepts to make a story that people will understand is not an easy task. When it comes to data visualization, simplicity and clear data presented will increase the level of audience engagement. The use of dashboards has become indispensable to filter and manage the vast amounts of data that modern companies generate.
8. Telling your story: While data visualization is part of your story, the topic of storytelling deserves to be a stand-alone bullet point. Data will be remembered only if presented in the right way and the right context. A story will always be more effective and memorable than a spreadsheet or a complicated dashboard. Have you been confronted with dashboards chock full of analytics that is not relevant to your question? It is a challenge to make data-driven decisions if you do not understand the story behind the numbers. Modern dashboard software enables the report creator to better understand the underlying data, and craft more compelling stories. Accessible anywhere, through mobile devices and desktops, dashboards drive better team collaboration and greater insights than traditional solutions like PowerPoint or Excel ever could.
9. Limit your risk: Many SSBI providers offer their tool as a software-as-a-service (SaaS). In comparison to traditional BI tools, this type of software provides a solution without the time, expense, and hassle of developing a BI infrastructure internally. There are no upfront investments required to start and no maintenance charges. Typically, buyers pay a monthly fee dependent on the required feature set, number of users and data sources, as well as your individual data volume. Companies no longer need to build their own data centers, hire large IT staff or buy expensive one-time licenses to get started. All you technically need to do is to sign up and commit only for a few months, and easily change the provider. Most vendors also offer a free trial so you can make sure the product is right for your needs before you commit.

These are just some of the invaluable benefits that self-service business intelligence has on offer. To extract even more knowledge out of the possibilities that these kinds of solutions bring to a company, we will now concentrate on the most prominent elements that self-service business intelligence tools need to attain for the best possible business results.

Courtesy of an article dated July 2021 appearing in Verified Market Research and an article dated December 23, 2021 appearing in G2.com and an article appearing in Data Pine