Guanaria. There are David Brown, the hosts to business. Worse. If you ve To my other show we crashed about the rise and fall of the co working space. We work, you know, start up skin boom and they can go bust, sometimes in a big way. The thing is hard to say of a start up is going to be the next big thing or the next cautionary tale though, sometimes the warning signs are loud and clear, You like to hear about the ups and downs of start ups, where we ve been covering a few of these stories recently and our daily podcast business wars daily every Monday, on Friday we keep a close eye on breaking news and the business world the stories, short. Think of them like a quick fix. They look at it. Breathe industries. Of course, the best world has no shortage of start up drama

Today, we rounded up some of our favorite tales from start up land. Their stories about companies like Casper, Tesla, air being B. Start ups that have had some high highs in some low lows in some surprising twit Sin turns to boot. So stick around We promise, will be a worthy investment of your time. Business wars is sponsored by a real favorite of mind. The economist, the EC MR a weekly magazine that offers insight in opinion on international, in U S, news politics, business financed science, technology, arts and the environment, it helps reader. Like you and me make a little more sense of what's going on in the world around us, and it's been doing that for over hundred and seventy years I've been reading about both breaks it and the corona virus. Today, both major stories in the news, but you see the economist, always find new angles to stories like these

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Did you think off ears. Our story about branchless. It was a start up, with a business model that seem to define logic, but that did job, the investor money from pouring in, like we work brand was backed by soft bang. The giant japanese investment firm. Here's that purpose- of business wars daily from late February must take a lesson. Not quite two years ago, entrepreneurs, Tina, Shockey and her partner idle leffler met with a seller. Waited investor and pitched a dream and online business selling high quality better for the planet, products at an affordable price, their consumer packaged goods company could help us by ass, the grocery store, save money and feel better about ourselves all at once, no matter. The item, four

peanut butter. A facial plunder, their price tag was just three dollars their company at the time only about a year old could keep costs down, by offering one single item in each category like a strip down supermarket. Moreover, each product was a house brand with start generic packaging. The new business was called branchless shocking and leffler made their pigs to Moscow. Yoshi son, the famous see, of Japan's giant investment. Firm soft bank soft bank is well known for funding goober. We were in door dash, among others, not one to be impressed. Early muscle, Yoshi son was reportedly wowed by the idea. According to Bloomberg Business week reporter Sarah Mcbride riding in June Eighteen Mcbride said the investor was quote a bit flabbergasted, the indeed he was impressed enough to play a total of two hundred forty million dollars in funding from soft banks celebrated one hundred billion dollar vision fund, the same fun powering goober and we work software

plan was to do the money out when Branchless met certain milestones, but the firms- tool. Investment in branchless began and ended with the first one hundred million dollars according to the Wall Street Journal, in Hindsight branchless basis, slew of somewhat obvious challenges. First, its best lies in the low margin, stuff of life, everything from organic pasta to non toxic dish, soap to copy paper product on which large chains barely turn a profit. According to Forbes, the idea of an unknown company could make money on free dollar product should have been seen for what it was a fantasy, but that was in all the new company just one more highly notable obstacle Amazon at the I'm Bloomberg. Businesses Mcbride noted that going head to head with Amazon eight may sound like a suicide mission, but founders Turkey was convincing. She argued that brow This was an industry disruptor. According to her logic, brainless wasn't really competing with them

John because of the three dollar price tags and organic planet friendly products. Besides, she argued with its plain packaging and direct consumer model. Branchless was cutting out when it called quote the bran tax according to fast company, you know what we pay for pretty containers, advertising and marketing all the things that make stuff identifiable and trustful, in other words, the brand Brainless founders were so convincing that they want awards for innovation. Two years in a row from basque company and in twenty seventeen from the industry, publication retailed I've, but last week Bloomberg Mcbride turned out to be right. It was suicide sought bank, The plug on brainless the first of its vision, fun portfolio to be shuddered. According to a new cycle protocol which broke the story brainless laid off. So Many of its eighty employees, the remaining ten or cleaning up administrative details and possibly fee, enquiries from buyers interested in purchasing the company's remaining assets. Venture cabin

just don't like to shut down brands for obvious financial reasons, but according to tat crunch, it was apparently the EAST unfavourable outcome, as it left brainless with enough money to pay severance to the newly unemployed and some money to investors, since a newsboy There has been no shortage of pundits, waxing eloquent on branchless as a cautionary tale. There is the question of what a brand is. Actually four and whether we should be quite so ready to throw out the concept. After all right. Familiarity, helps us all make choices, but the biggest question of all. What does brand listen demise mean for soft bank, which is already under tremendous scrutiny because of we work in numbers losses. One more step. Against soft, which recently announced in its operating profit, fell by ninety nine percent. In the last quarter of twenty nineteen, according to the Wall Street Journal, largely because the vision fund you heard their right. Ninety nine percent,

for anyone who remembers the internet bubble of the early two. Thousands, this whole scenario could seem like well deja vu all over again, as they say, which is not to disparage the idea of disruptors not at all, but to say that some observers are wondering whether the VC model of fast growth, without a clear, equally fast path to profitability makes sense. Any more or whether such a model could blow away like a non toxic. Three dollars soap bubble. Tough times for soft bank these days as for branchless for a number of important lessons for the sharp world, among others that people care about brands, though that's not true across every industry, to take hotels, for instance, some of the most recognise brands in the world with names like Mary out in Hilton hotels, have done huge, Beast but then one day along

the disruptor AIR, BNP customers, a flock to the home sharing cup. And that means they ve ditch the big name. Brand hotels, air BNP has done big business when you turn grandma's house into many BNP. Sometimes you hit a couple of problems, a coverage of the story for MID February pity the unicorns Sexy start ups with billion dollar plus valuations, like Goober Casper end. We work there were supposed to take the stuff, market by storm. Well, they didn't the public may in love with many of them, but investors are increasing scrutinising their bottom lines and there liking, what their seeing but hope they ve been riding on air, be indeed approve that failing ip trend wrong. According to the Wall Street Journal the privately held home shearing company was valued at more than thirty. Billion dollars in twenty seventeen is most recent funding round. All

Lines were pointing to a successful public offering later this year. Until now, it turns out that air and be wasn't flying as high as it appeared, air, and be lost three hundred twenty two million in the first nine months of last year, according to the Wall Street Journal and with more more travellers, replacing hotel rooms with homes the cup He's revenues have continued to climb. Unfortunately, its expenses of grown even more lashed. His loss represents a sharp reversal from a year before when the company earn big profits. So what's up did the glitzy Company founded by C o Brien Chaskey into friends in two thousand, eight, suddenly shovelling more money in the marketing. Well, yes, and more becoming he's been forced to spend more to contend with big challenges in safety regulation and discrimination. The most sensational of these was tragic. Five people were killed. Several injured in a shooting at a party last October and an Airbus

Randal in or India. California. Two days later, the company ban, so called party houses, CEO ask. He also said that the company would put in place a system that, by the end of this year, will verify all seven million listings on air being bees platform, meaning that they are accurate and that hosts are who they say they are the New York Times reported, simultaneous the air being be plans to verify one hundred percent of renters and is now flagging. High risk reservations, Chaskey call the moves significant investment, he told me your times reported. Andrew Raw Sorkin quote what we invented was away for strangers to trust one another to stay in homes with that asked, suddenly horror. Finally, in question Chaskey told working, we have to make these investments to protect our users, its investing one hundred fifty million dollars in safety. Equally distress have been civil rights issues. Study

have shown that racial bias exists on air B and be with some homeowners refusing to rent to people of color non white hosts of also, found to earn less money than white hosts on the platform that, according to Would you be? You are air and be is working with the endeavour, Lacy P, to solve the problems among the remedies, removing photos from the site, so that race is not immediately apparent. The radio station reports Airbus and be says it's also working with regulators in New York San Francisco. Paris and many other cities. As me, superfluities attempt to clamp down on short term rental growth. Consumers complain air b and be a rival short term renters create long term rental shortages and drive prices up. Pensive cities according to will you be. You are Chaskey, says the company made debate regulations, but once they pass, it complies with him. One of air being bees biggest rivals is expedient, which and both the r b and home away who sales are up. Speaking to investors. Last week, expedient

Herman buried Diller had nothing but praise for air being be saying. The company had opened up inventory that didn't exist before still give all the challenges, swirling around air B and be some critics, believe it up coming, I b o could be tarnished. Brian Chaskey appears on phased in by all accounts, the ip always is still on the horizon, most likely in the third or fourth quarter, Maybe that will give air being be enough time to iron out all of the recent wrinkles plaguing the home sharing this. U S PS shipping, Rachel increasing so now the time to save with SAM Pro online from Pitney bows starting, adjust for ninety nine a month with simple online from Pitney Bows, is just click, send and say for his Lois for ninety nine, that's right, just four dollars and ninety nine cents. A month, you'll save up to forty percent off you

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past you an ip, oh, isn't always smooth and when companies go public, their ex goes to a whole new world of risks, not to mention the roller coaster. Ride, with stock prices rising and falling, sometimes by triple digits, That's something the automaker Tesla has had to contend with the electric car and you ve actually has been riding high, even if it has taken some hit the reason for its mammoth stock price and check it out. But so for MID February, but he had to see it a video of evil. Ask dancing sporting an awkward grant as he shrugged his sport code and threw it off stage in a nod to striptease a suburban dad got I mean it was January, seventh and musk, and not exactly over his stage presence was celebrating the first deliveries of the model three Tesla built in the company's New Shanghai factory. He also went out plans to manufacture, teslas knew ass. You ve them. Why, in Shanghai to and April.

Good that the model. Why will be teslas biggest seller, more popular than all of its other mammals combined according to see it in the related ask later tweeted his dancing video and called it not safer work. Yet musk stance, the word safe from the mockery. They greeted the video but must be the one laughing all the way to the bank he's come a head way ahead from the troubles Tesla was facing just several months ago in late made Doc sat at a dismal one hundred eighty five dollars a share: its lowest in world years, but just last the automaker stock surged two new heights following record deliveries Teslas January thirtieth announcement of its first annual profit. Yes, you heard me correctly last Tuesday, She has reached a record high clothes of nine hundred seventy dollars. That prompted celebrations and warnings. This bubble has burst right and burst into the very next day falling more than seventeen percent. That decline happened not

cause of anything Tesla did exactly, but because of the crew a virus like other company. Tesla his shuddered, its gleaming New Shanghai Factory, as the epidemic average China and spreads across the globe. On one they Tesla announced a delay in order deliveries because of the closure. Cnbc reported that plus concerns that teslas, Fundamental value couldn't support, sky high stock prices. That was what was behind the precipitous drop in question about the company's essential value, do remain at CNN and point Teslas old, almost three hundred seventy thousand cars last year and has em get value north of one hundred billion dollars. You compare that to forward which sold five and a half million vehicles last year. But This value is only about thirty three billion dollars. Only a third of tiny Tesla well easy to see that sometimes math plays Little Rowan market pricing. So what does exactly well lots of things,

Wall Street has been favouring sexy consumer brands, there's that first ever annual off it after a rocky year. But if you disk the gyrations of short sellers and day traders and get serious for minute. Overriding reason could be, that is hard to overstate. The importance of teslas led an electric vehicles and singular focus on e these, in other words, its the shape of things to come. Least many investors are betting. On that. Yes, it's gonna, take a for electric vehicles to catch up to the rest of the market. Electric car sales are still tiny in comparison to gas powered engines and even hybrids on the face of it. Teslas one because it so last year, but late last week there were three other telling signs. That only look at the number of vehicles so last year, but late last week there were three other telling signs that may help explain why teslas share price has gone crazy of late. Their word faster results from for GM and X on Mobile Ford lost one point: seven in dollars. In the fourth quarter and James Opera,

bidding profit plunged by almost one hundred percent at Exxon Mobile once the worlds. Valuable company has lost close to two hundred billion dollars and market value since twenty fourteen CNN reports, as that public You also said that the equivalent of Boeing's entire value or one and a half teslas to oversimplify clean energy solutions, especially well branded ones, are becoming far. More valuable. Fossil fuels will not so much teslas stock price more than doubled in a month. As Rico Writer, Ronnie Mola stated. This It is not normal, but then again needs are the changes that were going through changes that are likely to accelerate even more, which might make all of us Volatility in the auto industry see like the new normal, or at least as normal, Elon, musk stance moves sure test Lisbon, speeding ahead with its stock price, but for some startup

the road to an idea is full of deep, deep potholes. That seems to be the case for Casper the online mattress retailer as detailed in late January, Casper's been shedding money as it looks to die on line sales of mattresses, and that could spell price spirits looming ip the full story from business Wars Daily Casper, the direct consumer Mattress start up is the latest unicorn that is accompany valued more than a billion dollars planning to go public. The company filed papers with the Essen the earlier this month seeking a potential one hundred million dollars kicker symbol? They want C S, P r get it can the company that popularize not just online mattresses, but also the nap mobile, make it big on Wall Street where

the odds are about is good, as in insomnia, acts are getting a full night sleep. I suppose Casper could be for a fall and not necessarily a soft cushiony one, either its essence filing opened with a glowing optimistic narrative about the burgeoning sleep economy, which includes everything from comforters do circadian clocks, buried within the filing was Casper's harsh reality been losing millions of dollars for years. Salesmen growing about twitter. Percent a year, most recently to over three hundred million first nine months of twenty nineteen, but it lol close to seventy million last year. In an eye popping ninety two million the year before twenty seventeen wasn't much better be fair. It takes a lot of money to disrupt a traditional industry and Casper is played a huge role in shaping up the mattress business before twenty twelve. There and been any innovation in the industry since the nineteen eighties, according to online location, retail dive, toughen needle founded in twenty,

well pioneered the direct consumer. Mattress business Casper was born in twenty fourteen and slew of others. Followed Casper shook up the business by solving shoppers. Three biggest pain points they. Simplify pricing, made it easy to order mattresses and gay customers. Long trial periods and easy returns according to retail dive Casper also brought the industry into the twenty first century by creating a friendly playful brand, a far cry from how most customers viewed the dusty discount driven bricks and mortar business. Casper made mattress shopping Fun do some consumers who had long considered it and expensive nuisance while that came as a welcome surprise, but it took a lot of money. Casper's Millions on marketing on websites that New York, subway and podcast lots and lots of podcast says in PR reports and where Casper went. Other players follow Today there are more than one hundred online mattress companies. From April of twenty, eight

in the following year. Casper's online sales fell by more than thirty percent. In contrast to your online rivals grew helix sleep and the luxury brand sought, via according to Edison Trans, but perhaps the biggest ugliest secret to show up S. He see filings this as business wars daily reported a year ago, Casper made the two at home and return it free policy, a thing just like war, be Parker did with eyeglasses. Now it's one thing to return. A pair of specks, though quite another to return a mattress. So when Casper customers decide the product is too hard softer lumpy that return costs the company a boat load of money and returned than they do an expert quoted by NPR estimates that twelve to fourteen percent of Casper mattresses yet returned when they get the fluffy things back in Casper Turn

round and resell them not on your bedbug, fearing life. It's against the law. Casper donates those mattresses, wherever it can't returns, cost the company about eighty million in twenty eight still Casper is determined to win, not just our mattress business, but everything to do with sleep from those now mobiles. I mentioned earlier twenty five bucks for forty five minutes news in New York City to see beady apples and bedroom furniture according to the filing Casper execs, believe that sleep is about to undergo a massive transformation as the third pillar of wellness, along with nutrition and fitness. In its to win the sleep, deprived customer caspars, opening brick and mortar stores planning to add their one hundred forty to sixty shops. It's open in the last few years, as it does Casper said in its filing, quoting here we expect to have operating losses and negative cash flow as we continue expand our business

over building, although stores, puts Casper firmly up against the biggest cahoon of the entire industry. Mattress firm, I bricks and mortar retailer that still gets the lion's share of this betting. Business naturally match firm wasn't going to a well stay asleep at the wheel in sub swelling online competition a few years back. It partnered with Casper's E Commerce, rival, purple mattresses, are now sold in mattress, firm stores according to retail dive, so the bottom line here. First, those of other unicorns last year, Casper's IP owes looking pretty shaky. Second, it's It is high time for consolidation of those one hundred online mattress companies. Our bet a year from now There will be anywhere near one hundred left in case you get caught napping will keep you posted. With Casper's losses and a potentially shaggy ip o ahead company exec surprise.

Bubbly in for more than a few rough knights of sleep. From wondering this is business wars, and that was just a taste of business wars daily. Enjoyed. This episode, invite you to scribe. On Apple podcast cast Spotify, Google will gas dinner. I heart radio, wherever you get your podcast theirs. On the other, so notes, just tapir swipe over the cover and you'll also see some offers from our sponsors. We hope you support our show by supporting them like what you ve heard. We would love it if you give us a five star rating and tell your friends how to subscribe to another way, Therefore, this is biased. A short survey at wondering, dot, com, slash survey and don't forget to What business war stories you'd like to hear from you David Brown, our business wars daily segments were written and produced by Alain Appleton Grant gave ribbon, wrote this episode Karen

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