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CEO Daily: Sunday 9th October

Good morning.


At CEO Daily, we’ve taken the position that Sunday should be a day of rest—well, at least from this particular newsletter. But rest can include pleasure and edification. So we’ve decided to add a new offering: a weekly roundup of some of the best long-form articles (mostly) about business. After all, what’s a Sunday for if not sitting on your sofa, reading a good yarn? As a bonus, we’re promising 100% Trump- and Clinton-free content in this edition, which can only be an enticement for those of us seeking shelter from the pre-election media tsunami.

Let’s stipulate at the outset: These are highly subjective choices. We recognize good work even when it’s delivered by our competitors, as will quickly be apparent. But we also have no intention of hiding Fortune’s light under a bushel.


Now to our first crop of honorees:

1. Would you like to invest as little as $15,000 and three months of your time as a mentor in exchange for 5% of the equity of the next Airbnb? That’s the proposition at Y Combinator and the New Yorker’s profile of the accelerator’s top dog, Sam Altman, easily takes the prize this week for the most pleasurable business feature.

Written by Tad Friend, it profiles one of the power geeks of Silicon Valley and it’s filled with lovely descriptive writing: “Altman’s terse prescience led one YC founder to call him ‘startup Yoda.’ Entrepreneurs trudge in to see him burdened by half an hour’s worth of calamities and bounce out after fifteen minutes, springy with resolve.”

There are myriad scenes that both entertain and illuminate how a 31-year-old, given to “plowing through e-mails and meetings as if strapped to a time bomb,” commands such power. One scene gives a hint of his sway:

“This spring, Altman met Ashton Carter, the Secretary of Defense, in a private room at a San Francisco trade show. Altman wore his only suit jacket, a bunchy gray number his assistant had tricked him into getting measured for on a trip to Hong Kong. Carter, in a pin-striped suit, got right to it. ‘Look, a lot of people out here think we’re big and clunky. And there’s the Snowden overhang thing, too,’ he said, referring to the government’s treatment of Edward Snowden. ‘But we want to work with you in the Valley, tap the expertise.’

“‘Obviously, that would be great,’ Altman said. ‘You’re probably the biggest customer in the world.’ The Defense Department’s proposed research-and-development spending next year is more than double that of Apple, Google, and Intel combined. ‘But a lot of startups are frustrated that it takes a year to get a response from you.’ Carter aimed his forefinger at his temple like a gun and pulled the trigger. Altman continued, ‘If you could set up a single point of contact, and make decisions on initiating pilot programs with YC companies within two weeks, that would help a lot.’

“‘Great,’ Carter said, glancing at one of his seven aides, who scribbled a note. ‘What else?’

“Altman thought for a while. ‘If you or one of your deputies could come speak to YC, that would go a long way.’

“‘I’ll do it myself,” Carter promised.”


2. You shouldn’t miss the photography/videography in the New York Times magazine’s special issue on the food industry. “Super Size: The Dizzying Grandeur of 21st Century Agriculture,” by photographer George Steinmetz (who sometimes shoots for Fortune), captures the jaw-dropping sweep of industrial agriculture and food production.

Other articles in the Times’ package are worthwhile, including “Close to the Bone: The Fight Over Transparency in the Meat Industry.” It’s a thoughtful story that chronicles a vegan activist who goes undercover in a meat-packing plant, using his experience as a prism to examine the dramatic changes in how meat safety has been regulated over decades. On a happier note, the food package also includes “Brand New Hue: The Quest To Make a True-Blue M&M,” which takes readers inside the research kitchen at Mars Chocolate as the company attempts to make a “natural” blue M&M. A substance called “algae spirulina” is potentially key to achieving that goal without using artificial colors. Since it’s hard to find enough of that algae, other potential natural contenders include: “the huito, traditionally used to make dark blue, semi-permanent ceremonial tattoos and as a bug repellent; a blue gardenia flower; red cabbage; aged red wine; a bacteria used to make Swiss cheese; the Japanese kusagi berry; butterfly-pea flowers; and pigments derived from soil bacteria, tree-root fungi, sea sponges and mushrooms.” (I guess we should be careful what we wish for when we ask for “natural” foods.) The article lays out the history of colors in food and reveals some fascinating findings on how humans process color in food.


3. If you haven’t yet sated your appetite for food-related reporting, you can find a meat-and-potatoes piece of investigative work at BuzzFeed entitled, “Inside the Box: The Not-so-Wholesome Reality Behind the Making of your Meal Kit.” , BuzzFeed reporter Caroline O’Donovan captures the toll it has taken for fast-growing meal-delivery service Blue Apron to dramatically ratchet up its volume. She cites 14 former insiders, who describe a ultra-high-pressure (and ultra-low-temperature, to keep food fresh) environment that left some workers at the end of their tether:

“In the 38 months since Blue Apron’s facility opened, the Richmond Police Department has received calls from there twice because of weapons, three times for bomb threats, and seven times because of assault. Police captains have met twice with Blue Apron to discuss the frequency of calls to the police. At least four arrests have been made due to violence on the premises, or threats of it. Employees have reported being punched in the face, choked, groped, pushed, pulled, and even bitten by each other on the job, according to police reports. Employees recalled bomb scares, brandished kitchen knives, and talk of guns.”


4. Fortune’s Jennifer Reingold makes sense of a CEO’s crash in “Why Lands’ End Ousted Its Change Agent.” Reingold captures the eerie similarities between the Lands’ End fiasco and the disastrous tenure of Ron Johnson at J.C. Penney. In particular she focuses on how Lands’ End’s board of directors hired a CEO to transform the company, only to lose its nerve when the CEO—making the very changes she promised—stumbled and generated poor early results. Result: Panic, confusion…and a short CEO tenure.

Reingold also identifies a strain of CEO hubris, which was equally present in the J.C. Penney fiasco. She describes the culture clash between the glamorous outsider CEO, Federica Marchionni, and the dowdy apparel company she was running:

“In New York, Marchionni seemed on terra firma, but in Wisconsin, she seemed tone deaf to a very established culture—perhaps a slow-moving one, but one that had survived for a long time. Although she said all the right things about her employees and how critical they were to the company’s success, she also seemed to have something of a messiah complex. ‘Imagine if I wasn’t here, what this company would do,’ she told me in April. ‘I think without this [move to attract new customers], it would probably be the end.’ Again, I was reminded of Johnson.”


5. Odds & Ends. It’s not often you read a history of Delaware’s chancery court—the place where many titanic corporate legal battles have taken place—but The Atlantic has it.

If you’re steeped in business history, the tale may not surprise you—but most people aren’t steeped in business history, and for them, this account of how Delaware came to occupy its unique place in corporate America is worth reading. According to the article, we should all credit (or blame) Woodrow Wilson for at least part of Delaware’s preeminence as a locale for incorporation and hence a venue for company fights: “Delaware copied New Jersey’s corporation law in 1899, permitting companies to incorporate without a specialized legislative mandate. This proved useful when Woodrow Wilson became governor of New Jersey in 1911, according to Charles Elson, a corporate governance professor at the University of Delaware. Wilson started cracking down on corporations and trusts, and many companies fled New Jersey. They ended up across the river in Delaware.” For companies, perhaps, this is the equivalent of pilgrims fleeing England to find freedom in the Colonies.

(Bonus: If this hasn’t satisfied your zest to discover more about the corporate culture of Delaware, go to Fortune’s archives to read my own 14-year-old piece on the corporate battle for the soul of the state entitled, “Who’s the King of Delaware?


One late mention, which I will permit myself partly because this is our first edition of this newsletter and also because this work didn’t attract the attention it deserved: In late August and early September, BuzzFeed published an impressive series on a private global arbitration process—one I’d never even heard of—that wields massive power in disputes between companies and countries. “The Secrets of a Global Super Court” is powerful work—shocking and richly detailed. In these arbitrations, which rarely surface into public view and include almost no rights of appeals, companies may sue governments, but not vice-versa, making for a highly unequal balance of power. The result has been disturbing: Moguls using their wealth to escape punishment, and powerful companies wielding the threat of a case to avoid regulation. It’s well worth reading.



Nicholas Varchaver