#and i know the incubation period is 'a month' but lets say its 20-30 days

[fatenista]

Welcome to the World my dearest son. Nadashi Siripatana, was born on Saturday February, 1st, 2020 Sydney, Australia. 

Let’s throwback a bit before it all began. I remember by the time we got here in early of May 2019, we were getting settled, adjusting new daily routines and managing our lives in all perspectives. From getting a cozy home to choosing the good-enough private health insurance. After we got all these and felt quite settled with our (financial) situation, I realize I was late. Before we did the test, we were pretty okay and not panicked if we were to expect another child. We were mentally ready and I was physically ready to deal with pregnancy again. Except, $$$ that we were quite worried. But Alhumdullilah, it was manageable. Of course, unlike in Saudi, we were insured. But here, a day after we got insurance, we knew we were expecting. I called my insurance company and unfortunately, they only cover birth & pregnancy after 12-month of waiting period. In Saudi we had BUPA insurance, in here they also got BUPA but the coverage is not the same as in Saudi. In Saudi, I got there less than 3 months and pregnancy & birth was fully covered. (How we missed Middle East lol) After that, I couldn’t wait to find out. So off we went to Royal Hospital for Women (10 mins walk from our house) and set appointment to meet with the midwife in my 14th week. If you have a normal pregnancy here, you will not meet your midwife and your GP (from any clinic of your choice). The OB-GYN doctors are for high risk pregnancy only, it makes sense. My whole pregnancy check-up, I managed to meet GP twice and 5 times with my midwife. 

After we been living here for almost a year, Australia work and life balance is at its best. Most people I know or talked to, works 3 days a week at office and the rest work from home or not working at all. This way, both parents got to spend time with kids not only on weekend but also on weekdays. No wonder when I first came here and brought Insha to the park, there are some dads who brought kids to playground and do all mom’s jobs. It’s a new normal for us. I was also surprised knowing that the nurses at the hospital works 3 days a week only and with total of 36 hours a week. Isn’t that great? 

Nadashi at 20th week ultrasound

With this pregnancy, I was craving for all the sweets and chocolate mousse in the first half of my human-incubation period. Until I had my sugar tested and surprise surprise! I had pregger diabetes (GDM;Gestational Diabetes Mellitus) and I had to stop all sweets, no white rice nor white bread, control my diet and lots of walk and prenatal yoga. My midwife appointed me to meet with the group for women with GDM and really, Australia has a very impressive health care system. You will feel that they really care about you. They don’t want you risking by having a too-large baby and ended up with C-section. Ahh, I don’t want it too. So I was extra careful with my diet though it was such a torture to not eat what I craved for when pregnant. 

12-hour before getting into labour!

Birth time! Insha was born right on her due date at 40 weeks, so I didn’t expect Nadashi to want to come out earlier than week 39th. A day before I was in labour, we went downtown Sydney and I was walking like I’m still far from baring child. But walking a lot also naturally induce the labour. 

At 6am in the morning next day (Feb, 1st), I was lying in bed after a constant trips to the toilet. I felt my water broke and then contraction started literally 3-5 minutes apart (already? I thought it’d start at every 20 minutes or 10 at first but 3-5 mins right away). I kid myself that ‘Nuhh, not yet. I’m too sleepy to be in labour now” I was sure that it wasn’t Braxton hicks because it was repeated and also hurt like hell. I decided to wait to see another 30 minutes and it was the same. Oh man! he’s coming, he’s really coming!

Then I called “Delivery Suit” at hospital and explained my situation. They asked me to take hot shower and have breakfast and then come to the hospital. So I did, but I couldn’t eat because the contraction got stronger and more painful that it hurts like my pelvis being crushed by a tractor. I woke Adil and Insha, “We need to go to hospital now. Nadashi is coming” .. my last-day-only-child then said “It’s February already?” Haha, yep, she knew Nadashi will come in February. We walked to hospital. It was 8am. when we were walking I had like 5-6 contractions along the way. Ain’t I crazy. 

Delivery Suit

Delivery Suit

At hospital (8am), Delivery Suit. One of the on-duty midwife (Kim) welcomed me right at the door. Everything felt so calm and quiet. Kim brought me straight to our delivery room. A spacious purple room, big windows that we could see UNSW, bathroom attached, birthing ball and fully quipped suit for delivery. I wasn’t ready to be honest with all the birth thing (again) but at the same time, I also couldn’t wait to meet my new lover.

    I had Kim and Nicole assisted me at the first stage of getting into labour. That time I was wondering how far along was my dilation because I needed the most magical thing in my life, Epidural. I asked Kim that I need an epidural and she checked I was 3cm. dilated. With Insha, I had epi at 5cm. which is good timing not too early and not too late. But with the 2nd birth, I figured it dilated quicker so I decided to have it asap. Of course, there’s lot of consent to be made due to the possible (1 in 10) side effects. I consent, I consent, I consent. I couldn’t stand any more pain from this. It crushed me. I thought I could do better this time round, but no, it’s such a trauma to feel it again. I cried few times to be honest. How can women, other women, handle this pain without any drugs? You really are super super human. 

 Delivery SuitI had Kim and Nicole assisted me at the first stage of getting into labour. That time I was wondering how far along was my dilation because I needed the most magical thing in my life, Epidural. I asked Kim that I need an epidural and she checked I was 3cm. dilated. With Insha, I had epi at 5cm. which is good timing not too early and not too late. But with the 2nd birth, I figured it dilated quicker so I decided to have it asap. Of course, there’s lot of consent to be made due to the possible (1 in 10) side effects. I consent, I consent, I consent. I couldn’t stand any more pain from this. It crushed me. I thought I could do better this time round, but no, it’s such a trauma to feel it again. I cried few times to be honest. How can women, other women, handle this pain without any drugs? You really are super super human. 

Finally! Epidural time

At around 10am, the anesthesiologist came. She brought papers with her and explained everything to me (exactly like in Saudi) and I consent to every words said. Only this time round, the procedure is quite different. And I must say, it is better than the Saudi one. The one I had in Saudi was all at once injection. The needle was 4 inches long and really thick one stuck into my spine. My lower body felt all numb after that in less than 2 minutes and I couldn’t even lift my legs. It was amazing to not feel any labour pain at all but I think it’s better to at least feel something without any pain.

Here, they connected the epidural tube on the built-in wall and attached some needle to my back. I don’t remember where exactly but there was something like a locket hanging on my shoulder which passed epidural into me every 20-40 minutes. Every time it kicked in, it felt chilly a bit. At first, I felt no contraction pain but a bit of pressure at my bottom (bearable) and then the other was feeling a bit like small menstrual cramp. Anyway, epidural delayed delivery time. So from 10am, I was scrolling my phone, chatting, netflixing, and was napping till around 3pm. then Kim came in and said that looking from heart rate and other things (from machine) I was almost 10cm dilated. We should get ready to have little bub come out around 3.45pm or so. How exciting! Adil and Insha went out to the playground and came back once I told them we’re so ready for Nadashi! 

“Okayy, you’re contracting now, PUSHHHHHHHHHHHHHH” Kim asked me to have our first push. I did feel small cramp which without epidural, I would feeling being struck by a train and cut myself in 2, literally dying. We tried several times and I took so many deep breathes but Nadashi and my body did not cooperate well. We tried for like 20 mins or so and unsuccessful but baby was still happy not in distress. Then, we needed doctor to come and see the situation. He said that the baby’s head is down and he was curling to the side. His spine was on the side when it supposed to be against your tummy. So, he re-positioned the baby. (Imagine, putting all hand inside the move him from the inside. Oh lord. I felt nothing only pressure without pain while he changed his position. I was exhausted from all the pushing (many times) almost an hour later, doc said, okay, if it’s not coming out this time, we might need to cut lil’bit. I was thinking .. no way. okay, i’ll be pushing all my energy out now so I don’t need that cut just to let him out, nooooo!” This time, I did pushed really hard and I could feel the ball shape was coming out then deep breathe and that long push from the body and then deep breathe that last push till all body parts are out! Like I mentioned, my lower part wasn’t all numb it just no pain from contraction, so I could feel the baby human was coming out. It’s still a trauma. really big trauma. I can’t . I don’t want to do it anymore but maybe one more .. after I saw him for the first time and fell in love all over again. Alhumdullilah for everything. At 4.42pm. healthy baby boy, weight 3.2kg, 52cm in length. was finally out into the world. 

In Australia, normally if you have normal child delivery and there’s no complication, you can leave hospital after 6 hours of delivery. I had to stay at least 48 hours because during pregnancy I had GDM so they had to monitor baby’s sugar level. Me and Nadashi spent one night in the hospital and I asked the nurse if we could go home next day because after 24 hours checking his blood pricking test, it was all fine and if I have to,I can prick him at home. I also told the nurse frankly that we’re not covered by insurance so within the deposit limit, I’d prefer to stay one night only. Then she said, the Pediatrician will come check Nadashi and she’ll see if we could go home. Alhumdulillah, all is well so we all went home on the 2nd evening. 

   Alhumdulillah, all is well and it’s time to go home!

   Not only great service from Royal Hospital for Women, we also got NSW Baby Bundle full of baby essentials! (worth of $300); Baby playmat, first aid, room temperature indicator, baby Australian books, nappy cream, hand sanitizer, changing mat, baby swaddle, baby sleeping bag, baby milestones card, breast-pad, diaper bag.

Once we’re home, my personal midwife who I’ve visited during prenatal check-up come visit us at home. One day after deliver and the other 2 days during first week post-delivery. Overall, to check my health and baby’s. Checking baby’s weight, baby jaundice, checking on how he latch, checking my recovery etc.

   After few days home, hospital also contacted us to have a heading test for Nadashi. 

    I’m not sure if Nadashi is a good baby or it’s just my biological clock that got used to the wake up in middle of night. But he could sleep longer than Insha as far as I remember. Insha was every 2 hours and Nadashi sleeps 3-5 hours. I even had few dreams before I woke up and realized that I’m a newborn mom, I have to wake him up to feed now. He’s just a deep sleeper! 

   Thanks for reading about my first week of life. I hope you all have a blessing days ahead.

How much it cost for out-patient delivery cost (For temporary research activity visa 408); 

Midwife consulting A$147 (6 visits) 

GP visit A$90 and A$60 (twice) 

Ultrasound at week 20th A$270 

Blood test and glucose testing was covered by our private insurance 

Delivery package (A night stay) A$1,383 

GDM consult A$77

*The hospital required us to pay deposit of $6,000 2-month before month of admission. 

 You Are My Sonshine, Nadashi Welcome to the World my dearest son. Nadashi Siripatana, was born on Saturday February, 1st, 2020 Sydney, Australia. 

[vareloglou]

Foreword

The last time someone asked Costas and myself to tell the story of Mindworks was in 2009. it was an invitation to an Open Coffee talk when Open Coffee was making its baby steps in Greece. 8 years later we had so much more to share, so here's a long read with everything that preceded the writing of this article and brought us here. Why now? It’s a chapter closing for myself and Costas, and as we move to the next one, there might be a few things we learned down the road that might help someone starting his own venture.

These thoughts are the long summary of a keynote we gave with Costas inDisrupt Cyprus in 08.11.2017

--

Mindworks was born in 2003 in Thessaloniki, our hometown in Northern Greece, against all odds. (Below you may see mindworks first "headquarters")

It started as an all-things-advertising agency, founded by two 20 year old kids (Costas & Vivi), with absolutely no idea about advertising, with zero clients, no business network, and no start up ecosystem at the time (funds, VCs, community etc). Putting your money on such a venture had significantly less potential in success than betting on the Greek National Football team to win the EURO a year later.

In 2005 I had a meeting with Costas Mantziaris, the founder of Mindworks, as an intern that wanted to work for free in any ad agency out there. Fortunately, after sending my CV to almost every ad agency in Northern Greece, the only answer I got was from Mindworks. I agreed to work for free for 2 months. Has he liked me, he would have to pay me something after the 2 month trial period. That was the deal.

Since then, it's been almost 13 years that we are together, as equal partners. “Equal partners”: This is something to notice. A shared leadership model that has no flaws for more than a straight decade. Literally, not a single fight.

Now you may think it's luck. In a way, it might be. But keep in mind that, I sent my CV to EVERY agency out there saying "I want to work for free". Costas the owner of a tiny ad agency, drown in cash flow problems, not making a decent salary even for himself, agreed to hire an intern he wouldn't actually need in terms of workload, just because he saw something there. Also, keep in mind that the only understanding I had of the internet back then was Dating in mIRC and Porn. Believe me, you wouldn’t hire me.

So, you might think we were lucky but we weren’t. We simply went the extra mile and made the most out of randomness.

Our partnership was the beginning of a great story I'm happy to share.

Costas had this idea: Making yet another ad agency would not get us anywhere. He had given two years restless effort to build one and saw that there was no chance in competing the established players, with no cash, no network and no Unique selling point. He thought we should pivot.

Pivot to what? Pivot to build a Search Marketing Agency.

Now let’s take a minute to give you some 2005 context.

In a post-Olympics Greece, Advertising was a flourishing business, Google was making its baby steps (there was

actually a pretty established rival in Greece, the search engine of in.gr called Trinity), no Google adwords yet, and the internet penetration in Greece was below 30%. Oh and most SMBs didn't even have a website.

Yet Costas had this idea. To help businesses find more customers through increasing their visibility in Search engines.

This was an idea against all odds. Trying to enter a nonexistent market, with no critical mass on the web, from our hometown, far away from where the things were happening at the time (Athens).

Passionately believing in Costas' idea, we started cold-calling businesses from the yellow pages, offering to build their websites (the hype at that moment) for free and get paid per click for organic traffic. Despite the thrill and the hours we put in our vision, almost a year later we had no more than 3 or 4 small clients that could barely cover the office expenses.

This is when we decided that Thessaloniki was far from a mature market for search marketing services at the time. We decided to go big and pitch the big guys. Companies like Aegean Airlines, Vodafone, Germanos, and others.

But again, we didn't know someone that knew someone that had any access to any of these organizations. Naive as we were, we were looking on Google for their board members, cold calling their secretaries to get a meeting with them. Again, we blatantly failed. Almost a year passed trying with no luck to set-up a single meeting.

At the same time, we started corporate blogging about search marketing, entering a growing network (no more than 20 business blogs at the time in Greece) of business bloggers.

This is when we met a few people from Athens, some of which became our friends and our biggest competitors a few years down the road. This gave us the reason to start same-day-road-tripping to Athens to meet potential clients.

Take another pause with me here. Back then, No GPS, No Google Maps and two kids that haven't been to Athens more than a handful of times in their life. Imagine that.

For two years we were road-tripping to Athens, for one day most of the times, for a single meeting, with no tangible results. There was one trip Costas made to Peloponnese, 13 hours driving during a storm for a Client in southern Greece for an annual contract of 3.000€.

Despite the fatigue, we got used to these trips. We spent hours on the road, dreaming of our future. That was probably the best and most creative time of our lives.

For 4 years we didn't stop trying.

4 Years is quite a long time in Startup time. For 4 years we could barely make a living, making a salary for less than 500€/month, and the failures we came across were one after another.

It took us 3 years to sign our first "big client" contract. It was Vodafone. It was a friend, who later on became a respected competitor that gave us the job. Ogilvyone and Giorgos Saliaris Fasseas gave us the chance to work with what later became our most trusted client, until today.

That was the point that we decided that one of us should move to Athens.

It was May 2008 and our efforts were starting to gain some traction, as in "two crazy guys from Thessaloniki doing stuff on Google that actually works", when we built our home in Athens. It was a home literally since there was no money for offices other than the living expenses of one of us in Athens.

A year later and after 3 other acquisition offers, we met with Atcom's founder Kostas Theotokas. We chose to partner with Atcom not for the money they offered but for their culture and the freedom we had working with them. It was the same company that bought Skroutz, the leading Greek price comparison website when Skroutz had less than 100 visits per day, and Linkwise the first affiliate network in Greece.

We wouldn't stand before you sharing our story if it wasn't for Atcom. Atcom not only supported our efforts in Search, but it stood next to us when a year later we decided to pivot (again) to a full-service digital agency, competing with the rest of the market in the digital ad agency business.

By taking that decision, Atcom risked it' s business, losing all its agency clients which at the moment, accounted for more than a third of its revenue.

Remember what to look for, when discussing with investors and VCs. It's the people onboard, not the funds that make great companies thrive.

Again we were in front of a new pivot, which was once again, against all odds. During the worst economic recession Greece faced in its history, we decided to pivot our business to a declining market, competing with our existing clients at the moment, the rest of the ad agencies.

Mindworks counted back then 8 people. In the following 4 years, we entered a work frenzy that I wish we won't have to go through again in our lives.

Pitching one client after the other, we worked 14hrs a day for 4 years straight. Presentation by presentation, we didn't lose a single pitch (OK, I think we lost one or two). Mindworks boomed from a 7 people small shop to a leading player of 40 people in 2014.

In this period we took a number of bold risks. From 2010 onwards, we started bringing in talent from the traditional advertising industry, hiring copywriters, traditional PR people and film directors. We built capability that brought us eye to eye with our competitors and gave us the chance to launch one new service after the other.

We were the first company to run a campaign on Facebook, one of the first to offer digital reputation management services, and later on something that others suggested as crazy:

We built an in-house team of video production in 2013 to tackle the challenge of the lower available investments for video content in Digital platforms. It was a team of film directors, motion designers and 3D artists. That move helped us better understand and integrate interactive experiences and technology with Video content.

But it wasn't all for profit.

In June 2013 we decided to incubate one of the first innovation labs in Europe, focusing solely on RnD, separate from client business. We hired 3 people (two software, one hardware), working passionately on new ideas, and technologies that were completely new. It was a €100.000 investment that gave us a firsthand perspective to everything new happening with IoT, but also a series of fun projects that put mindworks on BBC news, in a 3' feature.

By the way, it was a completely useless interactive aquarium where you could feed the fishes from your web browser, yet it made news on BBC.

And then a huge problem came in front of us: Aggressive growth.When you grow unexpectedly fast, there are two major obstacles in front of you.

The first is structure. We were never ready for such exponential growth. When a flat system with no structure, complete lack of process and no financial control, grows at unexpected rates it's like an Icarus flying closer to the sun every day passing.

We entered an era of structure.

We started using tools, we restructured the company into departments, we started training people to fit in the new reality and we finally started seriously monitoring finance.

The second is cash flow. The thing with services is that you may not need any stock to stay alive, but you always need to stock intellectual capital (and pay for it) before you sell it. Put that in the context of Greek recession, where the banking system collapsed, and with absolutely no credit line available.

The liquidity wall was ahead of us, and we were lucky enough just 3 months before capital controls imposed in Greece, to finalize a 3 years negotiation and sell Mindworks to a leading multinational media conglomerate.

Dentsu Aegis Network, looked into the Greek market and acquired the leading independent digital agency to future-proof itself in the Greek market for the years to come.

The Mindworks acquisition was one of the biggest acquisitions in the history of advertising in Greece.

Mindworks diluted as a name, but as you may see it's still alive through its people. We launched isobar (creative & Technology) and iProspect (analytics & performance marketing), but name-changing was only a milestone to a never-ending journey to deliver value to our clients through people, ideas, technology and data.

After looking at the bigger picture, in 2014 we decided to move the business forward in two directions, slightly pivoting once again.

We decided to position isobar as a creative agency, rather than a digital agency, as we foresaw a declining digital creative business, pivoting to a 360 communication agency before any other competitor.

At the same time we positioned iProspect, the leading performance marketing agency at the time, to a digital business strategy consultant, going after more meaningful business partnerships, rather than the market's favorite Google Ads agency.

During these two years, we grew even more. We started new services entering more in-depth to digtial analytics services, grew a standalone technology department that deepened our client relationship into more meaningful tech projects and we entered the ad-tech business.

But that's what everyone expects from a leading multinational agency. Emphasis on multinational here as when you turn from an independent startup, to a multinational company there is not much freedom in the things you can do and the decisions you make.

But we kept doing our thing. Our idea of getting closer to our clients' business, was to understand it first. Having that in mind, we decided to start launching our own businesses from scratch, completely on our own, to put ourselves in our clients' shoes.

We started a sunglasses brand partnering with a client of ours, building the entire thing from scratch, it's called weareeyes, it's been less than a year since its launch and we've already sold 3000 sunnies across the globe.

We also launched our own coffee shop, building it again from scratch to offer high-quality coffee at lower prices inside isobar. "The side project" got us once again international exposure featuring isobar Greece to the most prestigious industry magazine AdAge.

Since their debut, the two brands together, became an unbeatable player in the marketing industry, having a strange mixture of creatives, analysts and devs all of them in-house.

Today isobar & iProspect Greece are leading players in the agency business, with more than 80 people, tremendous industry recognition, and a high profile client portfolio of more than 50 active clients, among which Vodafone, L'Oreal, Mondelez, Nestle, Eurobank, Onassis Foundation and many more, that put their trust in our people and our services.

This is our story so far, but it misses one important thing. It's people. For every achievement we had in this 12 year -hell of a- ride, we owe it to the people that were next to us. Some crazy talented group of visionaries that made it all possible.

If we are proud of one thing, and one thing only, is the fact that we met all these amazing people throughout our career, making them believe in what we believed, putting them all together to work in one place.

People were THE one thing that made Mindworks different from anyone that stood in our way. And these people all together created an ecosystem where others were craving to work in. An unbeatable culture, of transparency, mutual respect, justice and of course unlimited passion & creativity, that made Mindworks a unique place to work, during the worst economic recession Europe has seen in the last decades.

But the story is not finished yet.

After 12 years, Costas and myself decided to leave our company at the end of this year, to keep chasing the new, the different.

The moment we are leaving, Isobar and iProspect Greece are going through their most successful era in their history, retaining their rapid growth rates and are left to the right hands; to people that have been by our side since the beginning of mindworks, Giannis Amaxopoulos, Sofia Gkouzioti, and the rest of the team.

So why we left?

Working in a multinational has also its downsides.

It deprives you of the sense of freedom in risk-taking and decision making, and this was not our way of doing business. Having worked nowhere except our own company, it was a challenging fit.

It's not the people that deprive you of that freedom, it's the system itself. A system that cannot work otherwise unless it's finance-driven, rather than value driven. Can you imagine P&G running 80 markets based on every country manager's intuition? There you go. You can't.

This is why we left to move forward, by going back again, back where it all started. Home.

By the time I write this article, I'm again in my home office next to Costas (he can't have a home office he has two kids) looking at an empty whiteboard, waiting for us to write once again our version of the future. We have no idea what happens next, but we‘re gonna take over the world. Or maybe not, but it's definitely going to be fun. 😂

So this story has no end. It's actually the first pages of the next chapter.

At this point, we'd like to thank all the people that stood next to us all these years, either by working with us or putting their money or trust in our ideas. Nothing would be possible without them.

We'll be in touch.

(this article was originally posted here)

#mindworks

[specialchan]

Canopy Growth Corporation CEO David Klein - Barclays Global Consumer Staples Conference Transcript via /r/weedstocks

Canopy Growth Corporation CEO David Klein - Barclays Global Consumer Staples Conference Transcript

Lauren Lieberman

Rounding out our presentation for the day, we have Canopy Growth Corporation. There’s been tremendous change at Canopy and more broadly in the global cannabis market over the past year as many companies have shifted gears to improve profitability and hone in on their key product lines and market.

For Canopy, this pivot has come under the direction and leadership of its new management team; CEO, David Klein and EVP and CFO, Mike Lee and they’re going to do a Q&A with me, so we’ll just get right into it. But David and Mike, thanks so much for being with us today. And I’ll start out by saying I hope we get to do it in person next year.

So, David, it’s been eight months since you’ve taken over as CEO of Canopy, feels like a lifetime ago, but could you just update us on the progress you’ve made under key priorities?

David Klein

Yes. First of all, thanks for having us here. It’s cool to be a cannabis company at the Barclays Conference after attending it for a long time as an alcohol person. Anyway, so when I arrived to Canopy it was a company that had a lot of the core building blocks in place but it required focus in a bit of strategic direction. And my view is we wanted to create a cannabis focused CPG company which could then really understand its consumer and deliver products that meet consumer needs, including needs maybe the consumer didn’t even know that they have.

I wanted to make sure that we could create a focus for the business and I wanted to improve our overall execution and then clearly deliver on the promise of a path to profitability, which was kind of job one as given to me by the Board. So if I kind of work my way through those items, I think we’ve made a lot of progress on building a consumer insights organization basically from scratch but we’ve made a ton of progress in that area.

On top of that, we had an R&D organization that was maybe more focused on high-end pharma sorts of applications for cannabis and we’ve now focused back onto the consumer rec and maybe OTC kinds of medical applications of cannabis products. So feel really good about where we are on that.

From a focus standpoint, we’ve exited some of our international operations and focused our business on the U.S., Canada and Germany, because those markets really make up about 90% of what we expect the total addressable market to be over the next several years.

And from an improving execution standpoint, I think we’ve made a lot of progress in streamlining our SG&A infrastructure which Mike can talk about and even exiting some production facilities. So feel pretty good about how all of those pieces are coming together at this point.

Lauren Lieberman

Okay, great. And just as a follow up, how is COVID impacting your ability to implement your new strategic plan?

David Klein

Well, you wouldn’t plan to do all of this – you can aspire to be the leader of a company, you wouldn’t say I want to do it and then I can’t actually meet any of the people on my team in person on an ongoing basis. You wouldn't plan it that way. However, I would say that because of technologies like Zoom and so forth, we've been pretty effective I think in being able to drive the business forward.

On a positive side really, cannabis was very early on in Canada and then subsequently in some states in the U.S. deemed essential by the local governments. And so we had a short period of time when we closed our retail shops, but they then reopened and in some ways we’re able to move the needle on online servicing by the provinces and even driving things like click and collect in local delivery. So in some instances it was a bit of a – created a bit of a tailwind for us.

We had to do a lot of work from an operations and SG&A standpoint in the company and I would say that COVID slowed that down a lot. It's just hard to get through that kind of work when you're doing it via Zoom, but we’re now maybe coming to the tail end of that sort of activity. So in retrospect, yes, maybe it took a little longer but otherwise COVID has been kind of both a positive and a negative for us.

Lauren Lieberman

Okay, great. And Mike, David mentioned and identified achieving profitability is a key priority. So can you just speak to the efforts that you’ve collectively undertaken to move the company towards that goal?

Mike Lee

Hi, Lauren. Yes, I can absolutely do that. But I just want to say hello. Thanks for having me back. Yes, as much as COVID did impact the timing, I can assure that we’ve been extremely busy in really resetting our strategy as a business and getting our operations and supply chain realigned to not just where we are today but where we see ourselves going over the next two to three years. And almost immediately after David joining, we focused on our footprint.

We had a surplus of capability that it was really absorbing a lot of our cash and contributing to our cash drain as an organization. So we immediately right sized our cultivation facilities. That resulted in us electing to exit a number of international markets that we felt will help to conserve our capital spending for the foreseeable future.

But we did it in a strategic way, because we do have an incubator footprint in a number of markets around the world that give us the optionality, that give us the presence in some of these high potential markets that maybe are a few years out but certainly we want to maintain a presence there so that we do have a pathway to grow in markets in the southern hemisphere particularly. So we’ve done a lot of work on our footprint.

From an OpEx perspective, we’ve reduced headcount by 18% since the beginning of the year. Some of this was driven by the reduction in our cultivation assets but some of this was really driven by restructuring at our organization to be in line with where the business is today, but also really designing our organization to be more nimble, more focused to allow us to move more quickly as an organization in terms of making decisions and we’ve now completed most of our commercial parts of the organization. We still have some additional work to do on the backend, but we’ve moved really quickly. And as you can see in our results from Q1, our G&A was down 18% sequentially which highlights sort of the progress that we’ve made.

We’re also focusing our R&D resources to be more focused on the consumer and consumer innovation and that’s helped to focus our resources even further as an organization. So in a nutshell, I think we’re doing a much better job of focusing our resources against the core markets that David laid out, Canada and the U.S. and Germany, and I think focusing ourselves on that adult use market and the medical market allows us to focus those resources even further.

I would also highlight that our CapEx continues to moderate. Fiscal '20 was a big investment year as we are building out our Canadian infrastructure. We’re also building out some advanced manufacturing capabilities in the U.S. and a lot of that’s behind us. So we believe that our capital expenditures on an overall free cash flow is going to improve as a result. So I think we’re making really good progress.

Lauren Lieberman

Okay. On priority market, so let’s maybe talk about Canada. So, David, kind of current state of the industry and what do you see as the key drivers of industry growth going forward?

David Klein

Yes. So our current state is I think the industry’s starting to kind of hit its stride a little bit. You see more and more stores opening. For a while the store growth was constrained in Ontario. That blockage has effectively been removed. There are roughly 1,000 stores opened today. And in Ontario alone there are about 160 stores opened and I think there were about 30 at the beginning of the year.

So lots of progress in getting that access to the consumer which has helped, 2.0 products have helped bring people into the market and then the growth of the value segment has helped pull people from the illicit market into the legal market in Canada. And so we think that the market’s kind of trending toward just slightly under $3 billion on a full year basis medical and rec, and so feel pretty good about the basic market.

I think the drivers going forward are going to be similar in my mind in that we expect to see continued store growth in particular in Ontario. In fact, the government has indicated that they will be accelerating their licensing process which we think will be good for the industry. And then from a Canopy perspective, we expect to be able to leverage our insights and innovation capability to continue to develop products that pull share from the illicit market and maybe even over time more importantly to develop those 2.0 products that bring non-current cannabis consumers into the market.

I’ve often said there I think in Canada but across North America there are just millions of consumers that probably love cannabis but just don’t know it and they’re unlikely to enter the category through inhalables. And so that’s why I think there’s a path to dramatically expanding the overall market by bringing these consumers in through things like drinks and gummies and so forth.

Lauren Lieberman

Okay. And there has been some volatility in market share performance among the Canadian companies. So could you just update us on the actions you’ve taken to improve your market share position in Canadian rec?

David Klein

Yes. So I think – my initial observation that I had when I arrived at the business I think still holds, which is it’s all about execution. I think a year ago, year and a half ago, it was just kind of cool that people could buy cannabis legally. And so if a product went on the shelf, it would sell through. And then companies didn’t do a good job of continuing to refill the orders from the provinces or from the retail stores. And so we’ve done a lot of work to get that order fulfillment rate up to where it should be in a CPG company. That’s helped a lot.

We’ve improved the quality of the product that we were bringing to the shelf so that we can start to differentiate our brands on the shelf. And we’re seeing some real early wins as we are more aggressively participating in the value segment. We’re seeing our share of value grow. We’re also, however, seeing our share of mainstream and premium categories growing. So I think those make us really bullish on our ability to grow share in Canada.

And then you add on top of it where we think we’re going to go with some of the 20 products. In particular, you see the effect our drinks are having in the marketplace. We have – and I don’t believe this is sustainable, but because we were the first in the market with a really strong set of ready-to-drink offerings, we’re sitting here today with about a 75 share of the drinks market in Canada. And I don’t suspect we hold a 75 share, but I do think that we’ll retain a lot of consumers as that market continues to grow.

Lauren Lieberman

That’s great. And I want to ask about the cannabis beverages. Do you have any insight into kind of consumer uptake kind of like, I don’t know, is it consumer awareness? What does penetration look like? There’s just a lot on education wise frankly for people to understand that these products exists, what they’re about? If you could tell us a little bit about that, that would be a great. And also just capacity expansion, I just wasn’t sure where you sit on that, when you will need it and do you have that in the easy to do from where you stand today?

David Klein

Yes, so I'll hold the capacity question really for Mike, but from a consumer uptake perspective, I think when people up to this point have looked at the cannabis beverages versus the cannabis market, they assume there's a small percentage of the current cannabis users’ portfolio, share of mouth, whatever you want to call it, is going to go into beverages, right. And that's how a lot of folks have been thinking about it. And of course, when we rolled our products out and we put them into cannabis shops in Canada, that's who we were selling to. The interesting thing is that we are starting to see consumers who aren't typical cannabis consumers start to use the products as a result of being exposed to it by current cannabis consumers.

So our early research in this space suggests that when people try our products, they say – 75% of them say that they will buy the product again and they will recommend it to their friends and family. And we're just seeing that slow growth from sort of word of mouth. I do think there is that education that's required a normal consumer pull activity to try to bring people in. And we're a little limited in Canada in terms of how much we can speak about the products, but we certainly can do that in age-gated environments like movie theaters and such, which again have been kind of restricted as a result of COVID, but we see using that as a tool to bring in non-traditional cannabis users into the space.

And the last thing I'll say before I turn it over to Mike that one of the issues that we've had is even getting high quality consumer insights data back because we've struggled up until about a few weeks ago to keep the product on the shelf, and to have that product available consistently for consumer repurchase so that we could then test what's happening, who's consuming our product and kind of get that multi-use feedback. And so we've been doing an awful lot to try to kind of keep up with the market demand. And Mike, you can you can touch on kind of where that's headed.

Mike Lee

Yes, and I would just remind everybody beverage alcohol category in Canada is a $25 billion category. If we could get a 5% share, you're talking about THC beverages being a $1 billion category to compete in and we think that we've got market-leading quality. So it's very exciting. That being said, we have been focused on maximizing production because we are growing distribution across Canada pretty rapidly. We've tripled our beverage production just since June. We've now shipped over 1.6 million cans.

And we want to make sure that service levels remain high. So we're really focused on building distribution at a point where we can ensure replenishment in a real-time fashion. And we have 20 million cans of capacity at our facility today just with one shift, and we now have the capability to dial up multiple shifts and we have line of sight 35 million to 40 million of capacity just with our existing assets. And if this category goes beyond that, we can certainly dial up capacity even further with more option assets. So we're very happy with where we are.

David Klein

The fascinating thing that I would add, Lauren, is that we talk about cans not cases. And I come from a beer company where we talked about cases. So to put Mike's statement in perspective, in Canada, the beer industry probably sells about, I don't know, somewhere between 5 billion and 5.5 billion cans, right. And so we're talking about we shipped 1.6 million cans since the end of March really, but put it in perspective across the U.S. 4 million cans were sold in the entire calendar year of 2019. So we think we've got some real momentum just in Canada where we're going to start eating into those 5 billion cans. I'm convinced of it.

Lauren Lieberman

Yes. Okay. Mike, I wanted to just ask large scale infrastructure in Canada for Canopy and that has negatively impacted gross margin performance the last quarter. So can you talk a bit to the gross margin outlook near term and the path to getting back to 40% margins?

Mike Lee

Yes. Look, our gross margin last quarter was below our target and our expectations with the biggest driver of that being underutilized facilities. And it's part of what we talked about earlier is the secret to high margins in this business is capacity utilization, because these facilities are high fixed costs. But we also did have some manufacturing variances last quarter that I would consider to be one-offs related to some changes that we're making in the business.

I would remind everybody that we made it very clear that our priority in operations was improving our fill rates up from Q4 of last year where we noted that our fill rates were in the 50%, 60% range. So we were missing on opportunities to fill demand, because of our inability to just forecast and deliver against the purchase orders. So we've made a lot of progress there. And now we're laser focused on getting – maintaining those fill rates, continuing to improve quality while also optimizing our supply chain end to end.

We have brought in outside management consultants to help us do a complete end to end review of our supply chain. And we recently finished our first phase of that work and are very confident that we have a roadmap to not just exceed that 40% margin over the next couple of years, but to go even further to have a real P&L profile that matches what you would expect of many CPG companies. So we are confident we're going to get there. I would say over the short term, we're going to have some muted margins over the next three, four months, but we expect improvement balance of year and heading into the next fiscal.

Lauren Lieberman

Okay, great. I'm going to shift gears and talk a little bit about the U.S., one of your three core markets. So I guess in the interest of time, I'm actually going to consolidate my questions. So, David, two pieces. I'm going to do CBD and THC at the same time. So just details around the current strategy to become a leading player in the U.S. CBD market. And then you've also had the proposed amendment, the Acreage agreement. So just to help us better understand proposed paths to possibly enter the U.S. THC market.

David Klein

Yes, and I'll kind of twist those around a little bit too, because I view the U.S. – our strategy to enter the U.S. is really all around building a cannabis and hemp ecosystem that we can benefit from post permissibility. And so it starts with the relationship with Acreage whereby we take a controlling interest in Acreage upon permissibility. In the meantime, Acreage can bring our intellectual property, meaning our processes and procedures but also our brands to the U.S. In fact, Acreage has our Tweed brands in the U.S. as we sit here today.

But more importantly, as we innovate and we can create things like drinks that we're so excited about, Acreage has the right to bring those drinks to the U.S. as soon as they're ready. And they're working on that now and hopefully we hear from them soon as to where that's going to land. But that just brings up the point that we – so as part of our ecosystem, we have Acreage as a way to enter the U.S. both now and then with our brands and in the future as an owner.

We have TerrAscend also as part of that ecosystem. TerrAscend is a very successful actually MSO that is functioning on the East Coast and on the West Coast. So that's the THC entrance strategy. We then have the insights and innovation work that I talked about. So we're doing insights across North America, not just in Canada. We then can drive innovation in Canada, test it out and then be prepared to bring it to the U.S. post permissibility or Acreage can bring it to the U.S. pre-permissibility.

Also in the U.S, we're building route to market capabilities around our non-cannabis and hemp brands, like This Works, which is skincare and beauty products; BioSteel which is sports and nutrition; and then we extend those businesses into CBD where we can enter the U.S. today. And then I think we bring that all together post permissibility with a strong route to market that's supported by Constellation’s route to market, a lot of cash on our balance sheet and the way to bring our products and innovation to the U.S. through the THC businesses. So I think it all fits together and it really kind of lights up – gives us a real bit of a tailwind kind of post permissibility event in the U.S. So CBD is just the entrance category, Lauren.

Lauren Lieberman

Okay. And what is your latest thinking on timeline for federal legalization? Depending on what one thinks is going to happen with the election, it could be a positive catalyst. And I think, David, you've previously said you expect the federal legalization in '22. So kind of what's your latest thinking there?

David Klein

I'm going to stick with '22. And look, here's why. We think the MORE Act is going to get voted on in the House over the next couple of weeks. We think it's going to have bipartisan support. We also know that whether the winner of the presidential election, whether it's Trump or Biden, both would likely support whatever came out of Congress in the area of permissibility legalization. On the Biden side, of course, Senator Harris was the lead sponsor for the MORE Act. We think the issue is really going to be in the Senate though.

And so there are two things that can happen there. Clearly there could be a different outcome at the election which would make the Senate more pro cannabis. But the likely answer is more and more states are going to make cannabis, whether legally or rec – legal or whether a recreation or medically legal in their states, and I'm pretty convinced that as a state flips over, their senators will find it hard to not vote in favor of a federal legalization. And so I think we'll see a lot of momentum around cannabis legislation over the next several months.

Lauren Lieberman

Okay, great. I'm going to ask two more questions on financials for Mike [indiscernible], but Canopy showed significant improvement, right, in OpEx and cash burn last quarter. So just wanted to talk a little bit maybe about how sustainable these improvements are and kind of further opportunities to reduce OpEx.

Mike Lee

Sure. Lauren, some of those improvements were COVID-related. We did defer some of our marketing programs given the pandemic. We just didn't think it was the right time to execute given that some of the retail stores in Canada were shut down for a period of time. So our marketing spin will bounce back in the balance of the year as we continue to promote our brands. And some of those savings are real. We are dialing back our capital spending. We're taking a very focused approach on what remaining capital we need to spend in Canada and the U.S. to complete our infrastructure.

The OpEx savings that I alluded to earlier will continue to show up in the P&L, and we're not done. We're continuing to evaluate things like shared service centers in the organization and to really integrate all of the acquisitions that we've made over the last couple of years to really get to an end to end organization that's focused on really tight cost controls, scalable growth and making sure that we're keeping as light as a footprint as possible in some of our remote geographies and really have the best-in-class shared service organization across the business.

And we think that we're making really good progress. We're not all the way done. I would expect us over the next six months to continue to refine the org structure. But we think once complete, it's really going to position us well to deliver on a very competitive SG&A load as we scale. And that's going to help our bottom line, it's going to help our free cash flow and it's going to help us deliver on that CPG P&L profile that we're targeting. So we're making good progress, but more works needed over the next few months before we can consider that work complete.

Lauren Lieberman

Okay. And actually I realized I forgot to ask you specifically when you mentioned the OpEx in the U.S., kind of where are you like in terms of the investment cycle in the U.S. operationally and CapEx wise?

Mike Lee

Yes, I would say we're in a holding pattern today. We've built up a sizable CBD org structure. We've got just shy of 200 people on the ground in U.S., again, using as lean as a footprint as possible to make sure we leverage our center of excellence in Canada, but we've built a U.S. team across sales, marketing, operations, finance, HR. We've built advanced manufacturing capabilities in the U.S. and we're not quite complete with that build out, but most of the cash flow is behind us on that.

So for the time being, we think we've built an org structure and manufacturing capabilities that will support the next one or two years of growth. I think when federal permissibility occurs, whether it's 2022 or 2021 or 2023, we don't know, there will be more investment and that's what we're really saving ourselves for is to be able to move quickly upon federal permissibility with our acquisition of Acreage and to really move as aggressively as we can to expand our footprint in the U.S. using Acreage and TerrAscend really as a base.

Lauren Lieberman

Okay. And then back to total company and some of your cannabis peers are beginning to deliver positive EBITDA. So, do you have a rough timeline for when you can expect that to be the case for Canopy?

Mike Lee

Yes, I would remind investors when they're doing their benchmarks that part of Canopy’s current loss is a result of us investing in the U.S. We are investing ahead of revenue. And that's a strategic choice because the U.S. is going to be a $60 billion market for THC. And within the next few years, it's going to be a $10 billion CBD market.

So it's going to be a massive, massive growth opportunity. And strategically, we've made the decision to invest ahead of revenue. That being said, we are focused on getting to profitability and we will be sharing in the second half of this fiscal a detailed roadmap of when and how we're going to get there. So more to come.

Lauren Lieberman

Okay, that's great. I think it's a perfect place to wrap up. So thank you guys very much for doing this. It was great to see you this way, but better in person. And I look forward to catching up again soon.

David Klein

Thanks, Lauren.

Mike Lee

Thanks, Lauren.

Link to the PDF presentation

https://www.canopygrowth.com/wp-content/uploads/2020/09/CGC-Barclays-Global-Consumer-Staples-Conf-2020.pdf

Submitted September 12, 2020 at 10:57AM by qwertysac via reddit https://ift.tt/2GW02bp

[yeskraim]

China coronavirus outbreak: All the latest updates

China on Thursday removed the top political leadership in Hubei, the province at the centre of the escalating coroanvirus outbreak, shortly after health officials there reported 242 people died from the virus on Wednesday – more than twice the number of the previous day and the highest daily toll since the outbreak began.

The province and its capital Wuhan where the infection now known as COVID-19 is thought to have originated in late December also reported more than 14,800 new cases of the infection after adopting new clinical methods to diagnose the virus.

The number of infected across China rose to nearly 60,000.

More:

In Hong Kong, new virus rekindles old animosities towards China

COVID-19: WHO renames deadly coronavirus

Weakest link: Global supply chains disrupted by coronavirus

At least 25 countries have confirmed cases and several nations have evacuated their citizens from Hubei. Two deaths have been recorded outside mainland China – one in  Hong Kong and one in the Philippines.

The World Health Organization (WHO) has warned the virus poses a “grave threat” to the world, with chief Tedros Adhanom Ghebreyesus, saying the virus could have “more powerful consequences than any terrorist action”.

Here are the latest updates:

Thursday, February 13

Official media have reported that a commune of 10,000 residents northwest of the capital Hanoi was put in lockdown due to a cluster of cases there.

The online newspaper VN Express cited a senior official of Vinh Phuc province as reporting an increase in cases in Son Loi commune.

Vietnam has confirmed 16 case of the diseases, most of them in the province.

Researchers ramp up efforts to develop coronavirus vaccine

North Korea imposes quarantine measures on all foreign visitors

North Korea will impose a month-long quarantine on all foreign visitors and others suspected to have COVID-19, the official Korean Central News Agency said on Thursday.

The decision to extend the quarantine period to 30 days was based on research studies suggesting the incubation period of the virus could be as long as 24 days.

The report did not confirm the country’s previous quarantine period, but the Russian Embassy in Pyongyang said in a Facebook post earlier this month that North Korea was putting foreign visitors under a 15-day quarantine.

North Korea has yet to report a case of the virus, but state media reports have hinted that an uncertain number of people have been quarantined after showing symptoms.

China replaces head of its Hong Kong and Macau affairs office

China is replacing the head of its office that oversees matters in Hong Kong, the human resources ministry announced in Beijing on Thursday.

Xia Baolong, a 67-year-old vice chairman of the Chinese People’s Political Consultative Conference (CPPCC), will replace Zhang Xiaoming. 

Communist party chief in Wuhan replaced – state media

Ma Guoqiang, the party chief in Hubei’s capital Wuhan, has been fired, the state-run Global Times reported.

The paper said the removal of the provincial bosses amid complaints over their handling of the outbreak showed the central government was responding swiftly to the crisis.

Here is a significant sign of how swiftly China’s central govt responds to the #coronavirus outbreak: it took only about 2 months to see a major reshuffle of top officials in #coronavirus epicenter Hubei compared to 4 months during the 2003 #SARS outbreak. https://t.co/00N9bpNN69 https://t.co/gUyFBzZPQF pic.twitter.com/crRD2UMHso

— Global Times (@globaltimesnews) February 13, 2020

Singapore official warns more coronavirus cases likely

An official in Singapore official said the number of infections in the city-state was likely to rise because the virus was clearly circulating within the population.

“We really cannot say whether it will get better, whether it will get worse, what sort of situation is going to unfold,” Lawrence Wong, a co-chairman of Singapore’s task force fighting the outbreak, said.

“We don’t know how successful we will be in all of these containment measures that we have put in place.” 

Wong said additional measures could involve “social distancing in order to try and reduce the chance of the virus spreading further.”

Singapore has reported 50 confirmed cases. Eight people are in criticial condition, while 15 have fully recovered. 

China’s Hubei province communist party chief relieved of duty – state media

Jiang Chaoliang, the head of the Communist Party in the Chinese province of Hubei, the epicentre of the coronavirus outbreak, has been relieved of his duties, state media reported on Thursday.

Shanghai Mayor Ying Yong has been appointed as the new secretary of the Hubei Provincial Committee of the Communist Party of China, the report said, citing the party’s central committee

44 more coronavirus cases on Japan ship: health minister

A further 44 people on board a cruise ship moored off Japan’s coast have tested positive for the novel coronavirus, the country’s health minister said on Thursday.

Health Minister Katsunobu Kato said the 44 new cases were detected from another 221 new tests. They raise the number of infections detected on the Diamond Princess to 218, in addition to a quarantine officer who also tested positive for the virus.

More people on board the quarantined Diamond Princess were diagnosed with COVID-19 on Thursday [Kim Kyung-Hoon/Reuters]

Tokyo, IOC officials reiterate that the Olympics are on

Tokyo Olympic organisers reiterated on Thursday at the start of two days of meetings with the International Olympic Committee: the Summer Games will not be waylaid by the coronavirus that is spreading from neighbouring China.

“I would like to make it clear again that we are not considering a cancellation or postponement of the games. Let me make that clear,” Yoshiro Mori, the president of the organising committee, said, speaking through an interpreter to dozens of top IOC officials gathered in Tokyo.

The Olympics open in just over five months, and the torch relay begins next month.

Numerous sporting events have already been postponed as a result of the virus. 

Seriously ill pushed to margins as China battles coronavirus

Ruyi Wan was diagnosed with leukaemia last May and was hoping for a bone marrow transplant after chemotherapy failed.

But as medical resources are funnelled into fighting the coronavirus, the 20-year-old has been unable to get treatment in Wuhan and cannot go elsewhere because of the travel restrictions. With a serious illness she is also more vulnerable to the infection.

“I hope for a miracle because Ruyi is so young and has so many dreams,” her mother Juan Wan told Al Jazeera. “We can’t let her die.”

Read Shawn Yuan’s story on the people suffering from cancer, kidney disease and HIV now struggling to get the treatment they need in a system stretched to its limits.

US airlines extend China flight cancellations into late April

United Airlines said late on Wednesday it would extend cancellations of all US flights to China until late April because of the coronavirus, joining other US carriers that have suspended China routes.

Airlines say part of the reason is a dramatic drop-off in demand, but the US has also introduced strict restrictions on travellers to the United States who have visited China, barring nearly all non-US residents if they have been in China within the previous14 days.

The US is also limiting flights from China or other international flights with US passengers who have been to China within the previous 14 days to 11 major airports for enhanced screening. It also requires a quarantine of US citizens who have recently visited Hubei province in China.

As we continue to evaluate our operation between our U.S. hubs and Beijing, Chengdu, Shanghai and Hong Kong, we have decided to extend the suspension of those flights until April 24. Learn more: https://t.co/3g6Lbe4xQZ pic.twitter.com/IabHFdcYmP

— United Airlines (@united) February 13, 2020

CDC confirms 14th US case of coronavirus in Wuhan evacuee

A second person evacuated from Wuhan to a US military base near San Diego has been diagnosed with the new coronavirus, raising the tally of confirmed cases in the United States to 14, the Centers for Disease Control and Prevention (CDC) said on Wednesday.

The patient was among 232 people under quarantine at the Marine Corps Air Station Miramar after being airlifted out of Wuhan earlier this month, CDC spokeswoman Ana Toro said.

Another evacuee was diagnosed with the virus earlier this week, but CDC officials said it appeared the two had been separately exposed to the virus in China before arriving in the United States.

They arrived on different planes and were housed in separate facilities.

“At this time there is no indication of person-to-person spread of this virus at the quarantine facility, but CDC will carry out a thorough contact investigation as part of its current response strategy to detect and contain any cases of infection with this virus,” Dr Christopher Braden, deputy director of the CDC’s National Center for Emerging and Zoonotic Infectious Diseases, said in a statement.

Cruise ship shunned over coronavirus fears arrives in Cambodia – ship tracker

A cruise ship which had spent two weeks at sea after being turned away by five countries over fears that someone on board might have the coronavirus arrived in Cambodia on Thursday, satellite-tracking data showed.

The MS Westerdam arrived in Sihanoukville, according to data published by the Marine Traffic website.

Although no passengers have fallen ill on board, the ship had been turned away by Japan, Taiwan, Guam, the Philippines and Thailand over fears that someone on the cruise could have the virus.

UK confirms new case, first in London

The UK has confirmed its ninth case of coronavirus, saying the latest patient – the first in London – had caught the virus while in China.

“One further patient in England has tested positive for the novel coronavirus (COVID-19), bringing the total number of cases in the UK to nine,” Chris Whitty, chief medical officer for England said in a statement.

“This virus was passed on in China and the patient has now been transferred to a specialist NHS centre at Guy’s and St Thomas’ in London.”

Read more about which countries have confirmed cases here.

Read the updates from Wednesday, February 12 here.

Read More

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Lighting a Candle instead of  Cursing the Darkness

First in a Series on the Federation of Southern Cooperatives

It’s been more than six months since I published my last blog post, which announced the publication of a friend’s new book about the Jackson Church Visits—Sanctuaries of Segregation—and recounted the story of my encounter with John Anderson, whose seating of four Black women in the, until then, all-White St. Andrew’s Episcopal Church in downtown Jackson, Mississippi, broke the color barrier and opened up new possibilities for respectful dialog on the race issue. The re-posted blog was called “A Legacy of Hope” and its reposting coincided with the first 100 days of our current President’s Administration. 

I needed hope then and I need it now, given all that has occurred in the ensuing months. [We are approaching Day 300 and as far as I can see, things have gone from bad to worse.] At the time of that last blog, I decided to take a break from adding to the chatter of the blogosphere, since none of it seemed to be making much difference in the direction our democracy was headed. 

Instead, I decided, I would concentrate on the work before me. In May, I was commissioned to develop the 50th Anniversary commemorative booklet for an economic justice organization called The Federation of Southern Cooperatives, which has struggled mightily for the past half century to increase opportunities for the working poor through cooperative development, primarily in agricultural communities throughout the Southern United States. The project had an incredibly ambitious timeline, which I agreed to, in part, to keep my mind focused on the deadline and drop all need to think about the deteriorating political situation. 

The result, which was released in August at the Federation’s 50th Anniversary celebration in Birmingham (AL) is a wonderful compilation of the Federation’s 50 years of service to some of America’s poorest citizens. For the next several months, I will highlight excerpts from the booklet, particularly from my “Brief History of the Federation: 1967- 2017.” It is my way of lighting a candle rather than cursing the darkness. Here is the first installment of this series.

  Preface

The 50-year history of the Federation of Southern Cooperatives/Land Assistance Fund is one of service, struggle, and empowerment. Against overwhelming odds, this organization—and those who energize it—has offered hope and sustenance to some of the most economically impoverished people in America. They also happen to be some of the most resilient people, willing to try new forms, new models, new approaches because the ones they were taught to idealize did not work for them. They also happen to be mostly Black farmers and agricultural workers who have tended to the crops and livestock in the American Southland for generations, dating back to when their forebears were enslaved. They know what they’re doing; they just need the freedom and the capital to do it. This has been their plight: to live in the richest nation on earth, amidst some of the most fertile soil on the planet, and not have enough to eat, not be able to feed their families, and not for want of trying. Governmental policies, cultural intransigence, and powerful elites have conspired to insist that they either live poor or leave. Many did leave and headed North or West to crowd the cities and overwhelm those urban landscapes. Others decided to stay. This was their home, after all. They would stay and try to find a new way of survival. Cooperatives offered the best opportunity. By banding together with others, perhaps they could make a go of it; perhaps they could change the dynamic of an oppressive culture; perhaps they, too, could grab a piece of that elusive American Dream. Perhaps . . . .

 In the Beginning

The 1960s were a decade of great turmoil. American life was being turned on its head. Protests and demonstrations about racial segregation had finally pushed their way onto the front pages of newspapers across the country and into the halls of America’s political establishment. Questions about how we could all live together as free and equal people were at last given serious consideration. The Civil Rights Act of 1964 and the Voting Rights Act of 1965 were direct, tangible results of the clamor for change. Federal power was wielded over intransigent Southern states that had found ways, despite existing law, to disenfranchise their Black populace—often comprising upwards of 30 to 40 percent of the residents of many Southern states.

 These aggrieved people, who formed the backbone of the South’s agrarian economy, were impoverished despite centuries of planting, nurturing, and harvesting the cash crops that made the South wealthy: cotton, sugar, and tobacco.  Enslaved on these shores for their first 250 years, then emancipated, shockingly, without a plan for their survival, these Southern Blacks adapted to a changing political environment that left them without land to live on or homes to live in. The promise of “40 Acres and a Mule,” which could have given them a fresh start, evaporated in the recriminating politics that followed the American Civil War. For many, the only option left was to agree to till the land of their former enslavers, for what would come to be known as “slave wages”—cents on the dollar for a full day of backbreaking work in the torpid, Southern summer sun, and rickety shacks to live in on the landowner’s plantation. This was freedom?

“This has been their plight: 

to live in the richest nation on earth, 

amidst some of the most fertile soil on the planet,

 and not have enough to eat, 

not be able to feed their families, 

and not for want of trying.”

This system of sharecropping continued for the next 100 years as Jim Crow laws replaced the more liberal Reconstruction policies and Blacks lost power and social status to the entrenched landowning gentry. It might have continued had several developments not occurred: the modern civil rights movement and the industrialization of modern agriculture. The mid-20th-century civil rights movement was years in the making, the result of endless yearning for a better life. Its gains, however, were mostly social (integration) and political (voting rights). Although economic justice was always a part of the dialog—the 1963 March on Washington, was, after all, titled the March for Jobs and Freedom—somehow it always took a back seat to the more pressing demands of political and social equality. 

But economic issues were always at the forefront of poor peoples’ minds. As Federation stalwart and social activist Carol Prejean would later say, “For us, this was survival!” How to find enough to eat, to keep a roof over your family’s head, to save for a rainy day, these were daily concerns of the Southern rural poor. The 1950s and ‘60s were a time for searching for new models to help replace those systems that had failed to generate subsistence, let alone security. Some who came South hoping to help with literacy and voting rights realized quickly that, although important, these things took a back seat to the day-to-day struggle for survival. Economic issues were more pressing than purchasing a hamburger at the local Five and Dime. Where was the dime supposed to come from? As Ezra Cunningham, another Federation enthusiast from Alabama would famously say, “You Can’t Eat Freedom!” and, “A Ballot is not to be Confused with a Dollar Bill.”

Cooperatives Offer Hope as Agriculture Changes

One of the new forms uncovered during this period of discovery was the cooperative business model. Cooperatives offered Black farmers of the 20th-century rural South the same opportunity that they offered to the 19th-century English weavers of Rochdale—the opportunity to band together to create a new system of support and empowerment; a chance to be a full partner in a community enterprise; a way of helping one’s self while helping others. Cooperatives were models of democratic governance. In that sense, they were incubators to help those left out of the political process to see how true democracy worked. By participating in the cooperative enterprise and voting for one’s elected representatives to the cooperative’s board of directors, people once struggling alone suddenly had a way forward. They understood that their vote mattered, that they were participating in something larger than themselves and their own struggle for survival. Although that struggle was still real, at least they were struggling with others like themselves, working together to build something that would help the entire community. It was exhilarating; it was empowering; it was life-affirming. Suddenly, all of the things they had been struggling for—food, housing, employment, health care, education—seemed possible.

The Civil Rights Movement occurred just when the South was experiencing a revolution in agricultural techniques. Mechanization and chemical fertilization and weed killing were dramatically changing the way crops were tended, particularly cash crops like cotton, sugar, and tobacco. No longer were armies of plantation laborers necessary to plant, chop weeds, and pick the crops. Combines and chemicals could do the work previously relegated to hundreds of day laborers or sharecroppers. The humans who had meticulously tended these cash crops were being turned out of their homes, no longer needed by the plantation owners who had paid them penny wages and housed them in hovels. For landowning Black farmers, the cost of equipment and fertilizer to employ these new techniques and technologies was often prohibitive.

Some historians assert that it was precisely because of the civil rights gains of the mid-1960s that African Americans were being pushed off the land. The Voting Rights Act, in particular, opened up new opportunities for Black political power, and many Southern counties were what we now call majority-minority counties. Blacks had the power to sway elections and even put their own candidates into the mayor’s office or the chief of police’s squad car. Whites who had dominated Southern politics were not about to turn over the reins of power without a fight, so they pushed people off of the land for the slightest provocation—attending a political speech or registering to vote—in the hope that they would just pack up and leave. In addition, most White-owned banks discriminated against Black farmers seeking loans, which then forced loan defaults and foreclosures and displaced thousands. But where were they to go?

Many fled the Jim Crow South, expecting to find better jobs and better lives elsewhere. They flooded northern and western cities. Depending on where the trains took them, they ended up in New York, Chicago, Cleveland, Detroit, Los Angeles, and various stopping points along the way. From 1940 to 1970, five million Blacks left the South seeking better lives in other parts of America. It became, as we now know, one of the greatest migrations of people in the history of the world. These shifting populations would put unbearable strains on the infrastructure of these urban centers until they, too, would explode under the weight of racial and economic stress.

Others wanted to stay where they had been born. They wanted to take the chance of building their lives in the rich soil that was the rural Southland. “Bloom where you’re planted.”  They wanted to create opportunities and institutions for themselves and their families that would be better than those their forebears had been able to conceive. They wanted to build something that would create a legacy for the future. This, really, is where the story of the Federation of Southern Cooperatives begins. 

NEXT - The Start of the Southern Black Cooperative Movement

#Federation of Southern Cooperatives #The Federation #Land Assistance Fund #Blacks in Agriculture #Southern Black Cooperative Movement #Charles Prejean #Ezra Cunningham #You Can't Eat Freedom #Black Farmers

[jeremyau]

There’s No Magic in Venture-Backed Home Care – Kyle Hill – Medium

https://medium.com/@kaleazy/theres-no-magic-in-venture-backed-home-care-8f5389528279

There’s No Magic in Venture-Backed Home Care

HomeHero hangs up its cape, pivoting new direction.

In September, 2016 my family held funeral proceedings in Los Angeles to say goodbye to my grandmother, Flavor Bell Booker, who was only a few weeks away from her 99th birthday. Until that time, she was our first and longest-standing client, dating back to 2013 when HomeHero was nothing more than a paper checklist of screening requirements for the mixed bag of caregivers my dad would find on Craigslist. But today, in what seems like the most bizarre strokes of fate, it brings me great sadness to announce that Flavor will also be one of our last clients at HomeHero.

Almost exactly one year ago, HomeHero lost its core identity when we were effectively forced to terminate our working relationships with 95% of our 1099 caregivers and required to adopt an inferior employment business model. In the process, HomeHero also lost a majority of its competitive differentiators in price, speed and scalability that allowed us to be so disruptive in 2014 and 2015, and it had nothing to do with competition.

HomeHero, for the better half of the last year, has been caught in one of the toughest dilemmas a startup can be in: to A) keep building an “evolutionary business”, or B) hit the reset button and use the remaining capital to take a swing at building the “revolutionary business”.

While this may come as a surprise to a lot of people, today we are announcing that HomeHero has decided to cease all operations and remove itself entirely from the industry of home care to focus on a new healthcare venture. This article should help people understand the forces that led us to this decision.

Early Days

When we started HomeHero in 2013 our vision was very ambitious — to build the fastest, most affordable way to find quality in-home care, and disrupt the $30 billion home care market. For many years I watched with shock and sadness the struggles my father went through finding reliable caregivers for my grandmother in Seattle. So I decided to dedicate my life to fixing one of the biggest (and hardest) problems facing our generation today. For me, HomeHero has always been very personal.

Coming into HomeHero, my cofounder (Mike Townsend) and I had a taste of success and failure in startups. Mike founded a web-based point-of-sale company called ZingCheckout in 2012 that I joined and left before it was acquired by BigCommerce ahead of their IPO. After that, we started a mobile ordering and payments company together called Flowtab, where we made it a lot further on $100k than I ever thought possible in San Francisco. But we knew healthcare would be a lot harder than anything we did before.

Science Incubation

In May 2013, Mike and I packed everything we owned into a small sedan and we moved from San Francisco to Santa Monica for an opportunity to work with Mike Jones at Science, one of the top incubators in Los Angeles. We had the vision to tackle a big problem in the home care industry and Jones was crazy enough to do it with us. As you may know, home care is a large and fragmented industry with over 25,000 franchises nationwide. We saw agencies as being grossly inefficient, as evidenced by caregivers only taking home 40% of the hourly rates paid by families.

It felt inevitable that a company would introduce a disruptive technology model to improve access to affordable home care. We even published an article “10 reasons a marketplace for senior care is inevitable”, citing other factors such as highly-recurring needs, high number of unhappy caregivers and lack of trust and quality.

Marketplace Model

We launched with a workforce of vetted independent contractor (1099) caregivers, who we endearingly referred to as “Heroes”. We created a more user-friendly client intake flow, equipped with beautiful online profiles. Our marketplace grew quickly due to our lower prices and our ability to match caregivers with clients so quickly.

We protected the marketplace by offering the support of a care management team, the personalization of profiles with photos and video interviews, a robust algorithm to control matching and dispatching, lengthy reviews from past clients, and a rating system to ensure quality. We were bringing transparency to a market that was notorious for lack thereof.

Scaling Friction

By the Summer of 2015, we had onboarded over 1,200 Heroes, provided care to a few hundred clients and we expanded to Orange County, San Diego and San Francisco (and the entire Bay Area). In June 2015, we raised a $20 million Series A, bringing total funding to $23 million.

HomeHero had distinct advantages of geographic coverage.

One distinct advantage of HomeHero was our ability to expand to different geographies quickly, whereas most agencies could only keep a 10–15% buffer on supply above their expected billable hours. Still, while our new markets showed early signs of growth via online acquisition, we found ourselves competing with local home care agencies who were staffing experienced teams of field marketers whose primary purpose was to grow leads and coordinate discharges of patients from acute care facilities — such as hospitals, skilled nursing facilities, senior centers and outpatient facilities. They were willing to drive across town to meet a family, bring them coffee and pastries, conduct a free home safety inspection and a two-hour consultation.

We were very reluctant to add the additional headcount, but we realized the best way to win the highest net worth clients (spending over $3k per month) was not to build faster and fancier technology, but to engage in the hand-holding and spend long hours with the family. Friction builds trust.

The 1099 independent contractor model, below, is very attractive as it removes excess cost and restrictions for employers. We were charging clients 30–40% less than industry average, and we were paying caregivers 25% higher than industry average. Both sides were winning. Our first million dollars in revenue in Los Angeles came mostly through SEO, SEM and light marketing efforts from part-time brand ambassadors.

Regulatory Challenges

On Oct 15th 2015, the entire home care industry got rocked. The Department of Labor upheld a federal ruling stating that over 2 million home care workers would qualify for the Fair Labor Standards Act —essentially requiring all home care workers to be treated as W-2 employees and receive overtime benefits. This was viewed as a huge win by the controversial and outspoken labor union SEIU, as well as the “Fight for $15” crowd in California.

This ruling would immediately and sharply increase home care prices — especially for live-in rates — and eventually cause hundreds of domestic referral home care agencies to shut down.

The biggest implication of the ruling was that the DOL removed the caregiver overtime exemption for all home care workers — mandating that all caregivers must be paid overtime. While the intentions were likely positive, the result was immediately negative for every party involved.

In a survey we conducted internally, the cost for live-in/24-hour care doubled from $250 to $550 per day average in Los Angeles, pushing the price above a skilled nursing facility on a per day basis.

Families were forced to reduce caregiver hours or fire their agency completely (and go under the table).

Hundreds of thousands of caregivers who were unable or unwilling to be employed as W-2 workers were either removed from their families or let go by their domestic referral agency.

Seniors struggled with “continuity of care” issues as agencies started rotating multiple caregivers in and out of houses throughout the day to avoid overtime costs. This had an especially negative impact on Alzheimer’s and dementia patients.

The additional rotations in shifts increased gas, parking and transportation costs and added a layer of complexity to scheduling.

Caregivers saw their working hours and income reduced, seniors weren’t able to get the 24/7 care they needed, and home care agencies saw a significant a decline in revenue from live-ins.

By the end of 2016, the nation’s largest 1099 home care agency, Griswold Home Care, closed down most of its California locations.

I’ve heard this ruling described by industry veterans as the “death of the live-in care”, a classic example of regulation having huge unforeseen consequences on the same people it’s intended to protect.

Shift to Enterprise

This court ruling put a huge target on our backs, especially with prominent agencies like Griswold Home Care closing all California operations. We also acknowledged the growing threat of class action lawsuits (similar to what Handy faced). The independent contractor model was under attack and we felt intense pressure to change.

From any angle, the W-2 model is not very attractive. The switch to W-2 would increase our caregiver onboarding costs by 10X. The additional costs of payroll taxes, overtime, paid sick leave, minimum wage regulations, benefits and health insurance, unemployment tax, workers comp insurance, and potential for lawsuits in a highly litigious industry put us in heavy handcuffs. We would also be forced to implement a 4-hour minimum and raise our prices by 32% — much closer to industry average.

This was the same model we had been publicly shaming for almost three years, but we really didn’t have any other choice. According to Federal law, these caregivers had to be employed by someone.

The only way the W-2 model is profitable is at a price point of $25–30 per hour (industry average).

Making the model even less attractive, in mid-March 2016, California legislators moved toward an agreement with labor unions to gradually increase the statewide minimum wage until it reached $15 in 2022, meaning our prices would have to increase $1 per year over the same period. If our goal was to make home care more affordable to families, we were headed in the wrong direction.

The silver lining was that moving to a W2 model would finally give us the opportunity to contract with enterprise health systems — who were mostly blocked from working with us due to the 1099 contractor relationship.

In spite of the added costs, in March 2016 we launched our enterprise initiative and declared that we were moving our Heroes from 1099 to W-2 and becoming a HIPAA-compliant, state licensed home care agency.

We hired a Chief Medical Officer, Chief Nursing Officer, Patient Safety Advocate and named a HIPAA Security Officer. We hired an ex-Cambia healthcare investor as VP of Strategy, Kiel Dowlin, to help navigate the transition and assemble an impressive advisory board (including ex-hospital CEO and “healthcare futurist” Josh Luke). We partnered with one of the world’s leading experts in readmission prevention, Andrey Ostrovsky, MD (who later went on to become the Chief Medical Officer of Medicaid) and started building our own predictive insights algorithm to help predict and prevent adverse events in the home.

We now had the ability to manage and train our Heroes, although practically this didn’t change much. More importantly, we could now get paid directly from hospitals and other risk-bearing entities.

For anyone outside of healthcare, a major goal of the Affordable Care Act was to reduce readmissions and the overall costs of post-acute care. One way of doing that was to change the way hospitals got paid by Centers for Medicare & Medicaid Services (CMS). Instead of paying them on a volume basis (fee-for-service), CMS is now paying them based on the quality of care they deliver to patients (fee-for-value).

This created enormous opportunities for companies like HomeHero to partner with hospitals and help them find more cost-effective options for post-acute care and reduce their reliance on skilled nursing facilities and medical home health. We doubled down on the belief that the big winner in this space would be the one who could win the largest contracts with hospitals and health systems.

Hospital Education

In April 2016, we joined the Cedars-Sinai Healthcare Accelerator (in partnership with Techstars) to learn from the top minds in healthcare about the operations and inner-workings of a world-renowned hospital. Cedars-Sinai, the largest non-profit academic medical center in the western United States, helped us launch the Safe Transition Home program to provide safe transitions out of the hospital and they worked with us to build evidence-based home care products for health systems.

Thanks to its adoption of the HomeHero iOS app, Cedars-Sinai became the nation’s first hospital system to successfully integrate with Apple’s CareKit platform and extend their healthcare system into the home.

One thing we learned about enterprise was that our growth would be somewhat limited due to the lack of financial incentive for certain health systems across the country to pay for non-medical home care, especially if they are only at-risk for a few thousand patients.

We also faced challenges in the mandated screening requirements for our caregivers — such as measles, mumps, rubella, TB, Live Scan fingerprinting, state registration fees, state mandated training and drug screening.

Nevertheless, the education and mentorship we gained from the accelerator program proved to be invaluable. We met with hundreds of executives at large health systems and payors and we were able to successfully define larger pilot opportunities.

We made incredible progress in a very short period of time, and in October 2016 we were chosen to lead a ~$1 million pilot opportunity with a large health system in Southeastern Michigan.

This was an exciting opportunity, but we had one important decision to make… and perhaps, the biggest decision of our lives.

Pilots ≠ Contracts

One danger working with large health systems on pilots is being dragged out in the middle of an ocean and abandoned.

The seemingly logical thing to do after winning a pilot of this size is to ramp up spend, start hiring in the new city and design technology sprints to support the new contract. However, it became evident that this particular health system, like many others we were talking to, had a genuine desire to conduct pilots to prove the actuarial value of home care, but there was no long term financial incentive to pay for home care in the same capacity.

It became evident that most of our pilots were being constructed solely for case studies and had slim chances of turning into sustainable contracts. We were still going to be reliant on private pay for the foreseeable future. This gentle realization was the straw that broke the camel’s back.

So in Q1 2017, with significant capital left in the bank, we made the difficult and heart-wrenching decision to shut down all home care operations, transition our clients to local home care agencies and start executing on an entirely new business venture.

Simply put, despite serving thousands of patients since 2013, we do not believe a technology-enabled W-2 home care agency is our most attractive business opportunity going forward. Rather than continuing to push the boulder up the hill and risk a spectacular failure, we will attempt to leverage our talented team, unique experience and technology IP to build a more sustainable healthcare business outside of home care.

In Retrospect

Looking back, our three learnings were as follows:

1. We underestimated the timing, effects and intensity of state and federal regulatory changes in home care.

The only thing worse than losing a fight is being told you can’t even compete anymore. And there’s nothing more painful as a CEO than losing vision for your company, especially if you’ve been holding onto that vision for years.

2. We overestimated the ability for health systems and insurance companies to pay for non-medical home care.

We knew we were in for an uphill battle when we shifted our focus to enterprise contacts. The “what ifs” of this decision will likely haunt me for the rest of my life. Was there a way to avoid the W-2 agency model and pass along employment responsibilities to families and still ensure they comply with all state and federal laws? Could we have kept the 1099 model? Will the Republicans’ repeal and replace of Obamacare somehow result in more money being allocated for post-acute care? Most of these questions we will never know for sure.

3. We underestimated the ability for home care agencies to adopt new technology.

A majority of the 20,000 home care agencies are financially efficient, software enabled and have entrenched relationships within their local communities. While file cabinets are still popular, they are not sitting in the stone ages with technology.

Venture-Backed Home Care

From an outsider’s perspective, home care is a big and attractive market. As evidence, investors poured almost $200 million into various home care companies in the last 16 months. However, this is also an industry built on relationships at a hyper-local level, which isn’t exactly the M.O. of startups. And since 2013, the industry moved from lightly regulated to heavily regulated, making the economics challenging (if not untenable) for any company with huge growth expectations.

Source: Aging in Place Technology Watch (2017)

To break away with enough escape velocity in home care, a company needs to effectively leverage technology to deliver a faster and better experience at a drastically lower price. Currently, none of the venture-backed home care companies have been able to do that. Not one is price-disruptive.

In a recent interview with Home Health Care News, the CEO of one of the largest US home care franchises, Senior Helpers, chimed in on the state of “disruption” in the industry right now:

“In the last couple years you’ve seen Honor, Hometeam and HomeHero.

I’ve talked to all of them. I think everyone was worried that was going to be a big tech disruption that would change how home care is done. But I’ve seen they’ve all had to change their model. They’re now directly employing the caregivers. They’re still using tech to communicate with clients, but a lot of us were doing that already.

Now that Honor is converting itself to an employer model, they’re just like us. Maybe they’re using tech a little better than we are, and they might have some bells and whistles, but we feel confident that client acquisition is not an issue for us. We have great referral sources.

In this industry, you’re dealing with people on a community level, where 80% of your clients come from referrals and the rest from advertising or the internet. I think Honor’s a good company, I like the people managing it, but I look at them like I look at HomeInstead, Maxim or Bayada, just another competitor. I think Honor will do well over time, but they’re going to be just like us.”

As you can see, the incumbents are singing a different tune than taxi companies were in 2013 — three years after Uber‘s launch.

We spent the last three years keeping up with technology vendors like ClearCare in areas like scheduling, timesheet tracking, billing, reporting, analytics and readmission prevention. But what really set us apart was our price, massive geographic coverage of caregivers across 10,000 square miles, our 10-second matching speeds, caregiver video interviews, evidence-based predictive analytics, and most of all, our 1099 model. For obvious reasons, this was far more disruptive to the incumbents — we were offering the same quality caregivers for less than half the price.

It’s sad to say, but today only the very wealthy can afford home care prices of $25 per hour, which typically comes out to over $4,000 a month. Because home care is extremely fragmented, it’s the agencies who can establish long-lasting relationships and deliver highly-personalized experiences who ultimately win. It’s not a technology problem.

The Future of Home Care

Today, I would estimate 60% of transactions in the home care industry occur under the table, as caregivers are sourced through Craigslist, Care.com or within families and social networks. Home care agencies are left fighting for the top 40% of the market which can only be won by leveraging personal relationships and high-touch interactions — including field marketers, home safety auditors and care coordinators—all things that do not scale well for technology companies.

Because of this economic reality, it is our belief that the W-2 home care industry will remain hyper local and fragmented for the foreseeable future. This does not mean that home care is a bad industry to go into if you are looking for a rewarding lifestyle business, but don’t expect any massive scale beyond a few zip codes.

This announcement is by no means intended to be a death sentence to other venture-backed home care companies. I have the utmost respect for the founders of the other home care startups, and I definitely would’t bet against any of them. But Mike and I deeply believe families across the country need better access to affordable home care, and with increasing regulation and thriving B2B technology vendors, it would be irresponsible for us to continue down this path with unlikely probability of liquidation. We mustn’t assume big fundraising rounds are synonymous with market success, this is certainly not the case in home care.

What’s Next

It breaks our hearts to leave home care, as we still believe there needs to be better and significantly cheaper option for families to find quality home care. Unfortunately, we don’t see a path for HomeHero or any other current company to achieve that goal.

The good news is we are pulling out early enough, with significant cash remaining, so we can find a new path forward and continue our same mission of promoting health and wellness in the home.

We will share more details about our new strategy and venture within the coming months, but our goal is still to positively improve the lives of millions of patients.

The hardest part of this announcement is saying goodbye to not only our compassionate caregivers, but all the team members who I recruited and hand-picked. Many of them I convinced to leave their jobs, move across the country, and take time away from their families to fight this difficult battle with me and Mike. For over three years, they were our trusted team of soldiers who would bleed terracotta and follow us into a fireblaze in order to make HomeHero a success.

We will forever be thankful for your loyalty and sacrifices.

To all our family, friends, Heroes, patients, clients, partners, employees, investors and advisors who helped make HomeHero what it was over the past three years, we extend the most sincere gratitude. We are so proud of you and the progress we made together. Deep in my heart I know the world is a better place because HomeHero existed.

Get in touch: @kaleazy.

#entrepreneurship #entrepreneur #startup #startups