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Over the next 20 years, an estimated $84 trillion will change hands in the U.S.; some call this the Great Wealth Transfer, others the Silver Tsunami. This wealth is held in cash and assets, but also in the estimated 2.9 million private U.S. businesses that are owned by those over 55. Many retiring business owners will look to sell their company to private equity or larger conglomerates, while others will pass their businesses on to their heirs. A few are considering something more radical: giving their company away to good causes, like Paul Newman who gave his eponymous food company to Newmans Own Foundation when he passed away in 2008. This idea remains radical enough that when 83-year-old Yvon Chouinard and his family announced that all of Patagonias future profits would go to fight climate change in September 2022, the New York Times devoted a full-page spread to the move. Now, theres even a book dedicated to Patagonia and its transition. 100% for Purpose companies like Newmans Own and Patagonia are still the exception, but there are more of us than you think: ticketing platform Humanitix, search engine Ecosia, browser Mozilla, consumer brands like The Good Store and Thankyou, and more. Former New York mayor Michael Bloomberg also announced plans to donate a controlling stake of his company to a trust that will continue to fund Bloomberg Philanthropies after his death. As President and CEO of a 100% for Purpose organization, Ive begun to hear more and more from businesses that are looking to follow in our footsteps. Why this move? You may ask: Why would philanthropically minded business owners and founders give their company away versus just selling the business later on, and creating a foundation with the proceeds? The short answer: Its a great way to cement your legacy, preserve the company, and maximize giving. Lets imagine your business makes $10M in profits and you sell it for $50Mcongrats! You can then choose to manage a foundation endowment and give away $2.5M a year (5% as per the minimum distribution rule). Or you spend it down, giving away $10M a year for five years. Compare these options to giving your company away to a foundation (like Newmans Own Foundation) or a trust (like Patagonia). The company and its employees stay in place, and continue to generate $10M annual profits, which can then be given away to good causes year after year. You have created a philanthropic annuity. But more than that, you have given your business, employees, and customers a gift as well. Every product they make, sell, or buy is now a product whose profits go to support good causes. And for those starting new business, it may not be a fair comparison today, but Paul Newman and A.E. Hotchner put in $40,000 of their own funds to get Newmans Own started back in 1982. That could have been a one-time gift but instead, Paul and Newmans Own have since given away over $600 milliona 15,000x philanthropic return! A range of models How do you get started on the 100% for Purpose journey? Here are a few models to consider, from simple to more advanced: Give Your Profits Away Today: You can do so with an existing corporate structure. Paul Newman did this at first with Newmans Own as the Foundation was established years later. Thats also how Cummings Properties and The Good Store got started. Depending on your jurisdiction, there are more or less tax-friendly ways to go about this, and if you dont already have an existing foundation, you might find a Donor-Advised Fund an easy way to get started. Donate your Business to an Existing Foundation or Non-Profit: Why re-create the wheel when there are already close to two million 5013(c) organizations in the U.S.? Id venture to say theres at least one among these that aligns to your value and your giving priorities, and that they would welcome a profit-fueled philanthropic annuity. Establish your own Foundation and Donate your Business to it: You want to be more hands on? Establish your own foundation. When Paul Newman died in 2008, he gifted the food company to Newmans Own Foundation, but that was actually not legal at the time. The IRS granted us an exception to be able to continue operating until the Philanthropic Enterprise Act was passed in 2018. This new law allows foundations to own profitable companies outright, versus in the past, being limited to no more than 20% equity stakes. Split Voting Rights and Economic / Profit Rights via a Perpetual Purpose Trust: Perpetual Purpose Trusts are also relatively new in the U.S.: the first on record dates back to just 2018, but their European equivalent, steward foundations, including Novo Nordisk, Ikea, and Rolex, have been around for decades. Purpose Trusts offer flexibility, for example allowing you to keep some or all voting rights of the company while giving away the economic rights to your foundation, a non-profit, your employees, or a mix of all these. This is what Patagonia chose to do, with a HBR case study on the details for the legal aficionados among you. Giving Tuesday is almost upon us, and while I dont expect people to make such a decision in one day, I want to invite current business owners and future founders to think about joining the 100% Purpose movement. Giving a business away is still considered a radical move, but it offers business owners, their employees, and their customers something a traditional sale never can: legacy.
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E-Commerce
In early 2022, the meal delivery company I founded, Tovala, went out to raise $100mm from venture capitalists. Our business could not have been hotter. Wed crossed $110mm of revenue, growing over 100% YoY. We had retention that was 34 times better than other meal delivery services. We had low awareness, lots of room for product innovation, and a seemingly clear path to an IPO. Then the war broke out in Ukraine, and capital markets started to get spooked. All of the sudden, fast-growing, unprofitable consumer businesses were out of vogue. We managed to raise $32mm, not a small sum, but it felt like a failure. It ended up being the best thing that ever happened to us. A new game That struggle made us realize the game had changed. Investors no longer wanted to fund unprofitable growth. In fact, they might never fund unprofitable growth in our category again. So we had to find a way to stretch that $32mm as far as possible. That was easier said than done. In 2021, we burned $26mm. We had to change how we operated Tovala. Fast. This was more than just cutting some costs. It meant a complete shift in mindset of every team member. For years we had been focused on scaling as quickly as possible. For example, for our operations team, that meant thinking about how we could safely fulfill an increasing number of meals every week and, in their spare time, figuring out how to improve our margins. We had to flip that mindset on its head. And instead of thinking about rapid scaling, think about where we could find efficiencies in the business. We started to repeatedly pound the drumbeat of profitability. We talked about it at every company all hands, and most importantly, we helped everyone understand why it mattered. We celebrated wins as small as a slight reduction in our AWS fees and as big as launching new product offerings. We got much more disciplined with hiring and performance management, pushed every team to identify margin wins, and we scrutinized our P&L for any waste. We found big levers on pricing and marketing spend and small levers in renegotiating many contracts. It all mattered. Focus, focus, focus What most surprised me during this period was not just our teams ability to execute. It was the value of focus. Wed built a company culture that was frugal and yet, when the team was tasked with finding waste and inefficiencies, it was everywhere. With the benefit of hindsight, its clear to me that it is not realistic to prioritize growth, (which the team had been doing for several years), while simultaneously having real rigor on minimizing all waste and inefficiency. We ultimately achieved our goal. We havent raised a single dollar since that $32mm fundraise. Weve been profitable for two years. And weve built a culture that can operate in the chapter were now in: one defined by growth and profitability.
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E-Commerce
In a perfect world, my job wouldnt exist. I’m a consumer privacy advocate, which means I spend my days fighting for something that should be automatic: your right to control and protect your own personal information. Unfortunately, we dropped the ball. In the era of social media and hyper-targeted ads, we didnt build the right privacy infrastructure to protect ourselves. Instead, we let tech companies sell us the story that knowledge is power and data is the price. Yes, knowledge is power. But dataa dry, emotionless word for who and what we are as humansshould be our super power. It should be ours to control and use to improve our lives, not just something companies profit from while leaving us vulnerable to harm. Now, AI is making this dynamic worse. As we enter the AI Age, our datawho and what we arehas become more valuable, and more vulnerable, than ever. Weve got OpenAIs CEO dreaming of a day when every conversation youve ever had in your life, every book youve ever read, every email youve ever read, everything youve ever looked at is in there, plus connected to all your data from other sources. And your life just keeps appending to the context. Weve got tech companies building wearable devices to track our emotions claiming that the only way AI can be effective is if it can know how were feeling in real time. Were rapidly entering a future where wearing smart glasses on our faces capable of recording and having AI process everything around us will be normal. Weve got AI chatbots passing themselves off as real therapists to get people to share their deepest, darkest thoughts and feelings. Some of those people have died by suicide after long conversations, fed by deeply personal data, that spiraled out of control. In the AI Age, personal data isnt just a record of who we are. Its our actions, transactions, locations, conversations, preferences, inferences, and vulnerabilities. Its our identities, our intimate selves, our hopes, dreams, fears, and flaws. And in a future full of AI friends, AI therapists, and AI agents, this data wont just reflect who we are: it will help shape who we become. Leaving all that in the hands of companies with questionable ethics, or governments with shifting priorities, is a dangerous bet. We need better options. A deliberately oversimplified history of privacy Before we look ahead, it can be helpful to remember how we got here. In Biblical times, privacy was a nope. God was all-seeing, and surveillance was divine. Take Hebrews 4:13 for example: And no creature is hidden from his sight, but all are naked and exposed to the eyes of him to whom we must give account. The Middle Ages didnt offer much privacy either. People often lived on top of each other and were literally all up in each others most intimate business. The Renaissance rolled around and privacy burst onto the scene, thanks in large part to the printing press. Give people access to more books, and, it turns out, they tend to go off by themselves, silently read, and nurture internal private thoughts. The Age of Enlightenment saw the concept of personal privacy start trending. Private thoughts, notions of personal property rights, even the idea that your mail shouldn’t be read by strangers started becoming normal. The Industrial Age brought more than factories, trains, and booming cities. Personal privacy rights started getting written into law. The US Bill of Rights gave people the right to be protected from unreasonable search. British Common Law gave us protections against harms like defamation (privacy for your reputation) and trespass (private property). In 1890, the right to privacy was born. In an essay of the same name, lawyers Samuel D. Warren and Louis Brandeis argued that people have the right to be let alone. It wasnt just peoples property that should be protected from intrusion, they wrote, but also their thoughts and emotions. Privacy as a civil liberty starts to take shape. Then the Technology Age comes along, and things get complicated. Telephones mean wiretapping. Cameras mean surveillance. World Wars I and II saw the rise of government intelligence agencies. The Cold War brought with it many spy vs spy vs spy games. Governments learned to love snooping. George Orwell wrote 1984. Privacy gets kicked in the teeth. In response, people decided they needed laws to better protect them from government surveillance. Germany adopted the worlds first data protection law in 1970. The US passed the Privacy Act of 1974 The Internet Age clicks on and things go downhill for privacy real fast. Social media, targeted advertising, cookies tracking us all around the web, phones pinging our locations everywhere we go, the rise of big data: privacy begins to enter a death spiral. The definition of privacy swings from the right to be let alone to something called contextual integrity. This is the idea that our personal information will be collected, but will only be shared with those we choose, and only when we want it shared, based on context and consent. But his definition of privacy fails miserably because it turns out that our personal information is quite valuable. Over time, it became the norm for companies to bury consent in terrible privacy policies and behind Click to Agree links. There are some legal data rights, if you live somewhere lucky enough to have them. Laws like Europes GDPR or Californias CCPA give you the right to know whats collected about you, to delete it, or opt out of having it sold. But even with those protections, todays most stringent privacy rules and systems are struggling to kep up with the social media age, let alone whats coming next. Now were entering the AI Age and the Grim Reaper is standing right there, glaring at privacy, ready to usher it to the eternal hereafter. AI could doom privacy or it could save it These days, its not just what were watching or buying that is being surveilled. Its every single aspect of our existence: our facial expressions, the thoughts in our language. The potential abuse of this technology for privacy is staggering. And were helping. Performing real time facial recognition on the missed connection on the train so you know where they live? Check. Granting access to our email, our calendar, our credit card info, our hopes and dreams to an AI agent to help order groceries, book flights, or make our lives a little easier? Check. Pouring our hearts out to our AI therapist or girlfriend because were feeling lonely or too shy to share these thoughts with a real person? Check. (The top self-reported use case for AI in 2025 is therapy and companionship.) What does privacy mean in an era of AI therapists and companions and agents that work in ways no one quite understands? We dont know how these AI models work, yet were being told to give them all our very intimate, personal information so they can work better for us? The idea of privacy in the AI Age feels like its come full circle, like were returning to those Biblical times dominated by some kind of all-seeing, all-knowing entity. But even if some people are becoming convinced it is, AI isnt God. AI is a mix of code and algorithms and human decisions, often with the goal of building power and making profits. But theres some good news. AI could help save privacy too. Its time for the next printing press To reclaim privacy in the AI Age, wed be wise to borrow a page from the past. Six hundred years ago, the printing press cracked the world open. It turned knowledge from something hoarded into something accessible. People could now carry ideas into the forest, read them in private, and come back changed. That one invention would later help spark the Enlightenment, a revolution in how people thought about power, truth, and freedom. People could read in private. Think in private. And eventually, demand the right to live in private. The printing press helped transform thinking and innovation, because it gave birth to the very idea of individual privacy. Today, we need a new printing press: a system that gives us control over the story of our livesour dataand, perhaps, sparks our next advances. Let me introduce you to a scrappy, overlooked right called data portability. At its core, this dry-sounding term means something radical: that you can easily and securely move your data where you want, when you want, and actually use it to serve you, not just companies. But theres a big gap between that vision and our reality. Too often, data portability tools are buried and convoluted, or completely nonexistent. Ever tried downloading your data and ended up with a giant, unreadable zip file youre not sure what to do with? Thats not empowerment; thats a digital paperweight. Data portability is the underdog of privacy rights. Barely known, rarely prioritized. But if developed and backed with intention, it could reshape the future. Imagine a world where your data isnt trapped in distant data centers. Instead, its close to homein a secure data wallet or pod, under your control. Now imagine pairing that with a loyal personal AI assistant, a private, local tool that lives with you, learns from you (with your permission), and acts on your behalf. Your AI. Not theirs. Heres a simple example: period tracking. It doesnt get much more intimate than that. And in places with abortion bans or restricted healthcare, it doesnt get much more dangerous, either. Right now, millions share that info with apps owned by companies that can sell it or hand it over to law enforcement under subpoena. But imagine if that data lived only in your data pod, controlled only by your AI, to predict symptoms, suggest care, flag concerns, or automatically order chocolate and Advil. With data portability, you can take your data, transfer it to your AI, and use it to benefit you. Thats the difference between being surveilled and being served. And thats just the beginning. Local, controlled AI plus portable, personal data could potentially help us address huge problems like healthcare, climate change, job loss, financial precarity, and unlock services we havent even dreamed of yet. Will it be easy? Nope. The technical and regulatory infrastructure to do this doesnt existyet. Some people, including the founder of the World Wide Web, are working on solutions that could lead there. The incentives to do this the right way arent obvious to everyoneyet. The companies that could help build this infrastructure dont want to prioritize thisyet. But neither did the wealthy and powerful want the printing press. Were at a turning point. If we dont push for systems that give people control over their data, well sleepwalk into a future far more dystopian than divine. But if we doif we build the next printing press for the AI Agewe just might write ourselves into a better story. Control your data, and you control your destiny. Yes, that sounds grand. But once so did the idea of ordinary people owning books. And look what came next. Jen Caltrider is Director of Research and Engagement at the Data Transfer Initiative and formerly led Mozillas Privacy NotIncluded initiative.
Category:
E-Commerce
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