EXPECT THE UNEXPECTED

HAPPY ACCIDENTS

Not long ago, I got a flat tire on my car.

It happened in New York City, thanks to the sharp end of a construction nail.

Thankfully, I wasn’t stranded on a highway, or in an unsafe spot.

As I sat on 11th Street and pulled the wheel off to throw on the spare, I got a good look at the tire markings and I smiled.

It was a Goodyear. Why did I smile?

You see, many years ago, Charles Goodyear invented the science behind rubber tires.

The son of an inventor and manufacturer, he began tinkering with India rubber after wondering why it tended to melt easily when exposed to heat.

Rubber began to be popular but its use was limited. This melting problem was a big hurdle that no one had solved.

Charles tried for many years, exposing rubber to loads of chemicals. Nothing worked.

Then one day in 1839, he was heating a batch of rubber on a hot stove and accidentally spilled sulphur on it.

To his surprise, it formed a tough, durable material unlike any of his previous experiments.

Boom! Vulcanized rubber was born, which enabled tires, shoes, raincoats, and many other products to be created.

Because Charles Goodyear followed his curiosity and was persistent in his quest to solve the rubber challenge, he created the right conditions for discovery.

This led to his accident, which ultimately led to mine.

Which made me smile.

JANUARY WEDDING

In the last week, two mergers have been finalized in the U.S. retail scene.

Saks and Neiman Marcus have completed their marriage, cementing their status as American luxury department store’s last-man standing. The retail history books are littered with bygone names because, well, retail is hard. And department stores are largely irrelevant when any brand can reach you right there in your Instagram feed.

Which is why I’m puzzled over the second merger announcement. JC Penney (remember them?) merged with SPARC group, the invisible company behind legacy brands Brooks Brothers, Nautica, Lucky Brand, Eddie Bauer, and Aeropostale. The entire operation is now owned by mall landlords and Authentic Brands.

If you don’t know Authentic Brands, they own the brand names of many brands you used to shop. They own everything and operate nothing, as they license out every brand they own.

These mergers hope to create companies that are stronger competitors together than they were separate. Sometimes scale is your friend, but not always. I believe these are both cases of what Warren Buffett calls the cigar butt strategy.

There are only a few puffs left in these fading brands. When capital gets cheaper, more upstart apparel brands will continue to eat away at the attention and business of these companies.

Until then, I wish the talented teams behind these companies all the luck. 🤞

CHAD’S ROUND-UP

📚 What I read: The Nvidia Way- If you owned any investment in the S&P 500 index last year, Nvidia is the reason it went bananas. The chipmaker powering AI and graphic-driven games is a hard place to work, like really hard. It has a 24/7 culture, a perpetual survival mindset, and a hard-driving leather jacket-wearing CEO/founder. It’s also one of the greatest 30-year overnight success stories. You’ll either read this book and say, “There’s no way I could work there” or “Hell yeah, sign me up!” There is no in-between.

🎧 What I heard: How I Built This: The Container Store- How many times have I organized and reorganized my home? So many. It’s usually because of the Container Store. Since opening the very first location in Dallas in 1978, Kip & Sharon Tindell built a category-killer of a business with an unconventional approach- they put their employees first. Their measured approach to growth over 4 decades is a rare success story. Worth a listen if you’re in the brand or retail space.

🕵🏻‍♂️ An interesting discovery: Curation of Curations- I learned about this recently and it has consumed my free time and attention. I would call this Netflix for design. Curation of Curations is a free site that has an incredible curation of documentaries, videos, podcasts, and websites that are centered around creativity and design. Since TikTok is shutting down, this has become my go-to rabbit hole.

*I have no affiliation with any of these sites or pieces of content. I’m just sharing things that I find incredibly valuable.

Happy Tuesday! I’m rooting for you!

Chad