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The novel coronavirus has presented business leaders with an equally novel career experience. Not one of them was prepared for something they had never confronted before. That’s as true for a grizzled veteran of multiple business cycles as it is for a 37-year-old CEO of a newish public company, like Katrina Lake, co-founder and boss of the online apparel merchandiser Stitch Fix.
“This has been the most challenging 12 or 16 or 30 weeks—I don’t even know—of my leadership,” she says, in an interview Monday from her home office in San Francisco. (I count 17 weeks since the Bay Area entered lockdown, so her second guess was spot on.) Lake says that for all the stresses—including balancing kids and work, and operating distribution facilities in six locations in the U.S. And one in the U.K.—the business side of Covid-19 has been “academically interesting.” She thinks Stitch Fix benefits from all the “catalyzing trends” at play: the casualization of the workplace (Stitch Fix specializes in smart but not stuffy clothes), working from home, and online commerce. A business that allows customers to try on clothes at home rather than in a dressing room has an advantage.
Stitch Fix has held up well in the crisis. Its warehouses dramatically slowed their roll in the spring, and the company suppressed demand with tactics like cutting marketing and no longer automatically asking customers to make their next order. (Stitch Fix allows customers to have recommended items sent to them, pay for what they keep, and return what they don’t.) Revenues for the quarter ending May 2, about six weeks into the pandemic, were down 9%, a relative victory.
Like other leaders, Lake’s basic attitudes toward work have changed. She never thought she could hire an executive without a face-to-face meeting. Now she values the relative ease and intimacy of a Zoom call. About half of Stitch Fix’s engineers worked remotely before; Lake figures her company will continue with a hybrid model in the future.
I ask Lake her what she’s doing to stay sane. (We all need tips.) She says she’s cooking a ton for her family, including lunch, made possible by not spending hours at the office. She had stopped running after having two children, and she has picked that up again. Lake even has good news for those suspicious of overachievers like herself. She swivels her laptop camera to show me the rather sad-looking vegetable garden on her fire escape. “I need a gardening stylist/coach,” she says.
Adam Lashinsky
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
Jack flash sat on a candle stick. After weeks of sometimes unhinged stock price jumps, the electric vehicle sector fell back to earth a bit on Monday. Market leader Tesla, which had been up 16% at one point in the morning, ended up down 3% while some smaller companies were hit much harder. Three-wheeled EV maker Arcimoto, which sold $10 million worth of new shares to investors last week, crumbled 24% and Canadian startup ElectraMeccanica Vehicles lost 18%. All three stocks are still sitting on large gains over the past four weeks. This kind of volatility based on little or no news is characteristic of a bubble. Just saying. I also spoke to star car designer Henrik Fisker about his new, second EV company. Fisker says this time will be different (last time, the company went bankrupt). He's outsourcing manufacturing of his upcoming $40,000 EV SUV, the Fisker Ocean. Oh, and he wants to go public right now. Wonder why that could be?
Gotta blame it on the juice. It's hard to pinpoint what causes investment bubbles, but plenty of people this time around are blaming Robinhood, the free stock trading app popular with the millennial set. Maybe not good for the kid traders, but good for the app. Robinhood said on Monday it raised another $320 million of VC backing at a valuation of almost $9 billion, $1 billion more than a year ago. In higher flying financing news, drone maker Skydio raised $100 million and said it would offer new drones for the corporate market.
Signal in the noise. Speaking of corporate computing, Hewlett Packard Enterprise grabbed Silver Peak, a pioneer in the latest technology for wide area networks, for $925 million. The plan is to fold Silver Peak into HPE's Aruba unit. Known as WAN, the far-reaching networking setups are about to get a huge boost from the onset of 5G wireless technology.
Nature is healing. Can one of the most entertaining business stories of our time revert to being a plain old business story? That's what WeWork chair and former Sprint CEO Marcelo Claure is doing now that the Neumann family is long gone from the scene. Claure is engaging in massive cost cutting, renegotiating leases, cutting staff, and whatnot. “Everybody thought WeWork was mission impossible,” Claure told the Financial Times. “And now, a year from now, you are going to see WeWork to basically be a profitable venture." Meanwhile in another part of the SoftBank-o-sphere, mobile chip designer ARM may be sold or taken public to help SoftBank raise needed funds to revive its finances from big losses on investments like...WeWork.
You got a wicked jump shot. Doesn't billionaire Mukesh Ambani have enough dough? Now Google is in talks to invest in his ultra hot upstart wireless carrier, Reliance Jio, and its e-commerce offshoots to the tune of $4 billion. The carrier, which quickly went from having zero customers in 2016 to becoming the largest in India today, has raised more than $15 billion lately from a who's who of investing and tech giants, as Counterpoint analyst Neil Shah has helpfully tallied.
Keeping up with keeping up. Two revisions or updates to older stories. Remember back in February when MGM Resorts said it was penetrated by hackers who stole data on 11 million customers? It was actually more like 142 million customers. And two weeks ago, which frankly could have been February for all the ways time flows during the coronavirus lockdown, when we told you Twitch suspended President Trump's account? Now he's back online at the site.
FOOD FOR THOUGHT
The shift to online and remote learning has been fraught with challenges. Yale law professor and Bloomberg columnist Stephen Carter is frustrated by the experience and cataloged some of the reasons teaching via Zoom has been so difficult.
Third: Humor. In the classroom, even my bad jokes can be an asset. One doesn’t want to be a standup comic — most of us couldn’t anyway — but, when properly deployed, humor can work well, clarifying examples and theories and smoothing the experience for nervous students, for whom laughter can break the tension. Research suggests, moreover, that the instructor’s classroom humor, when closely related to the material, improves student performance. And the decision on where to insert the humor can be made on the fly by reading such cues as student body language.
Alas, it’s my experience that humor works poorly online, and I’ve talked to others who to agree. True, some pre-pandemic research suggests that humor in online courses has pedagogical advantages similar to those in the physical classroom. Nevertheless, long before the current crisis, experienced online instructors pointed out that in the virtual classroom, humor plays differently and requires more effort.
ON THE MOVE
ServiceNow hired Paul Smith as senior VP and general manager of Europe, Middle East and Africa. Smith had been executive VP and UK general manager at Salesforce...Cryptocurrency startup Coinbase hired former U.S. Magistrate judge Paul Grewal as its chief legal officer. Grewal replaces Brian Brooks, a former Fannie Mae lawyer who left in May to become acting head of the Office of the Comptroller of the Currency...The sexual misconduct scandal at video game publisher Ubisoft has led to the departure of chief creative officer Serge Hascoët and head of Canadian studios Yannis Malla. Head of HR Cécile Cornet is also out.
IN CASE YOU MISSED IT
What I learned when I trained to be a coronavirus contact tracer By Wyndham Robertson
Ellevest will allow female investors to back companies that support racial justice By Maria Aspan
Exclusive: Gwyneth Paltrow invests in an accessible therapy startup By Emma Hinchliffe
SiriusXM buys podcast business Stitcher for $325 million By Aric Jenkins
Bill McDermott on why modern business leadership requires a softer touch By McKenna Moore
Why COVID-19 hasn’t stopped digital transformation at midsize companies By Thomas A. Stewart
5 questions about Coinbase’s rumored IPO By Jeff John Roberts
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BEFORE YOU GO
Have you been following with glee the trend of bizarre yet hyper-realistic cakes on Twitter, as we have in the Pressman household? Start with this mind-blowing video of actual cakes. The meme quickly devolved into some less real cakes. Then it intersected with the kerfuffle over "The Letter," in perhaps my favorite video of all. Enjoy.
Aaron Pressman
