Alessandro Rosano’s contrarian playbook for the comfort-footwear company: no financing and minimal marketing. It worked so well he sold to Crocs for $2.5 billion.



Two years ago, Brown’s Shoe Fit Co.’s desperation to stock enough HeyDude shoes to meet the demand reached frenzied levels. The buyers for the 73-store Midwestern chain would get a status report in the morning and try to place a large order. “We would get one-fourth or one-half of what we put in for,” says Adam Smith, senior manager for Brown’s and a former store manager in Jacksonville, Illinois. “The whole nation was trying to get them.”



HeyDude founder Alessandro Rosano, an Italian entrepreneur living in Hong Kong, had tried his hand at other businesses before. But with HeyDude, which makes comfortable slip-on loafers with a so-ugly-they’re-cute look, he hit the jackpot. With minimal investment and almost no marketing, revenue took off, reaching $581 million in 2021, with net profit of $175 million. That December, Rosano agreed to sell the brand to Crocs, the $6.2 billion (market cap) firm whose own ugly-cute rubber clogs are a worldwide phenomenon, for $2.5 billion in cash and stock.



With that deal, Rosano became a billionaire, worth $1.4 billion by&nbsp;Forbes&nbsp;estimates. His business partner and American distributor Daniele Guidi also made a fortune, worth some $650 million after tax by&nbsp;Forbes&nbsp;estimates, after bringing in $787 million in cash from the deal, according to regulatory filings with the Securities and Exchange Commission.



Rosano declined to speak with Forbes, and Guidi didn’t respond to requests for comment. But what the two men were able to build, largely under the radar, is an unlikely success. It stands in stark contrast to many of the direct-to-consumer brands that received lavish amounts of funding and attention from social media during the boom years while failing to become viable businesses. Comfort shoe maker Allbirds, once the darling of Silicon Valley, for example, has seen its market cap collapse from a peak of more than $4 billion after its 2021 initial public offering to just $199 million today as annual sales failed to top $300 million and losses piled up.



Now Rosano, a strategic advisor to the brand under Crocs following the acquisition, has set up a family office to invest his money and work on philanthropy. Crocs is using the brand, which reached $1.1 billion in sales in the latest 12-month period, to add spice to its broader business.



Comfort shoes are having a moment. Crocs, with total sales of $3.6 billion in 2022, has said it hopes to reach $5 billion in sales for its flagship brand by 2026. HeyDude looks poised to help the company soar past that. In 2022, HeyDude was the single fastest growing brand at retail, according to consumer research firm Circana (formerly NPD).



“When we first bought it, we wanted to be clear to people that this was a scale business,” Crocs CEO Andrew Rees tells&nbsp;Forbes. “They hadn’t heard of it, and didn’t know what it was. We put out the $1 billion target, which we knew we could blow past, and we’ve gotten to that easily.”



Rosano, who is in his mid-50s, was a shoe dude long before he came up with HeyDude. He grew up in Tuscany, and studied at Commercio Estero, Pistoia, from 1982 to 1987, though he never received a university degree, according to his LinkedIn profile. Pistoia, a medieval Italian city that’s popular with tourists, is less than 30 miles from Florence, home to Ferragamo and Gucci, in a region known for luxury goods and footwear.



Rosano, who started designing shoes at age 18, had tried other businesses before HeyDude, and had a shoe distributor called Fratelli Diversi. On his LinkedIn profile, where he has just 164 connections, he describes his approach to that company as “acting in a fair and reasonable way, to the people and the environment. Charity acts are also a duty.”



Rosano cofounded a company with Guidi and a third person to make wooden watches called WeWood. Wooden watches are a tough business, and the company was subject to unfair competition litigation in 2011 from a now-defunct watchmaker called Vestal International. Rosano also came up with an idea for wooden clogs with springs in their heels that sold under the name Baldo. None of his early businesses found notable success.



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“If you were to lay out the playbook that they followed and present it to a series of business executives, they would say there’s no way that this would succeed.”Crocs CEO Andrew Rees
</blockquote>



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He’d been working in these various businesses for more than 20 years when he founded HeyDude in 2008. In a&nbsp;<a href="https://fotoshoemagazine.com/hey-dude-comfort-has-an-iconic-style/" target="_blank" rel="noreferrer noopener">2020 interview with Fotoshoe magazine</a>, an Italian industry publication, Rosano’s sister Elena De Martini, who was then CEO of Fratelli Diversi, described how Rosano returned from a trip to China and realized that a modern shoe that was as comfortable as a slipper didn’t exist — and decided to create one.



The shoes Rosano developed, starting with the Wally for men, were lightweight, with elastic laces that didn’t require fastening, and affordable, at around $60 a pair. “The result is perfectly constructed footwear, which is innovative, ultra-light and casual, but with style,” De Martini told&nbsp;Fotoshoe.&nbsp;The shoes were designed in Italy, but the business was headquartered in Hong Kong, where Rosano lives, with production at contract factories in China.



Rosano “is a student,” Crocs CEO Rees says. “He’s a serial entrepreneur. He had a number of entrepreneurial businesses before this that had not been successful. He was looking to improve his chances of success and he admired [Crocs’] focus on simplicity and comfort.”



Though many Italian shoemakers create beautiful shoes for Europeans, Rosano was going for something more mainstream. Not wanting to name the brand after himself as many Italian shoe entrepreneurs would, he came up with HeyDude for its laid-back California vibe, says Rick Blackshaw, who became president of the brand under Crocs. “But all his friends in Italy would call it ‘ey du-day,’” Blackshaw says.



In 2010, Guidi, who has a degree in aerospace engineering from the University of Pisa and runs a consulting and marketing firm called Lever Your Business, joined Rosano to open U.S. operations. The shoes took off, and HeyDude added a woman’s model known as the Wendy, a water shoe and a variety of eco-friendly designs. The shoes were prototypically American looking, easy to wear — and looked like nothing else on the market. Almost all the sales came from the U.S. market, rather than from Europe.



HeyDude sales soared from $20 million in 2018 to&nbsp;<a href="https://s22.q4cdn.com/133460125/files/doc_presentations/2022/01/10/ICR-Presentation-vF.pdf" target="_blank" rel="noreferrer noopener">$191 million in 2020,</a>&nbsp;according to financials that Crocs shared with investors at the 2022 ICR conference. During the pandemic, as consumers stayed home wearing yoga pants and comfort shoes, the brand fit right in. Its success came despite having no marketing to speak of other than paid search and a commission-based sales team. “It was built on a shoestring,” says Crocs’ Rees.



The brand took off by word of mouth. “In many senses, it’s a pretty remarkable story,” Rees says. “If you were to lay out the playbook that they followed and present it to a set of business executives, they would say there’s no way that this would succeed.”



<blockquote class="wp-block-quote">
With comfort shoes having a moment, the brand’s sales soared from $20 million in 2018 to $581 million in 2021.
</blockquote>



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Footwear analysts and industry watchers were blindsided. “It kind of caught a lot of the industry players by surprise,” says Beth Goldstein, a footwear analyst at Circana. “This brand came up and was all of a sudden having these huge growth rates and buzz. It piqued everyone’s interest.”



Brown’s became one of the earliest larger retailers to stock it after its Muskogee, Oklahoma store manager learned about the brand at a 2012 trade show in Las Vegas. The Buckle, a Kearney, Nebraska-based retail chain with 440 stores, also began carrying HeyDude before the shoe company’s major expansion, in 2019.



“We were known as the top HeyDude retailer,” says Brown’s Smith. “In the pandemic, we didn’t know if we could get products, so we were ordering them by the pallet.” With customers sometimes buying five pairs at a time, however much Brown’s could get its hands on sold out fast. Facebook groups sprung up where people could compare notes, and buy, sell and trade their shoes.



“It was limited quantity and a lot of fun styles and colors, and the price was right,” Smith says. “The customer wanted them so bad it almost didn’t matter what the color was. It was crazy, that’s probably the best way to put it.”



Two days before Christmas 2021, Crocs agreed to buy HeyDude for $2.5 billion, most of it in cash and a smaller amount in stock. Wall Street was not impressed. The shoes that were selling out in the Midwest were scarce on the coasts, where many of the analysts and investors live, and the shoes lacked the cache of hot new sneaker brands like Hoka and On.



“To be honest, when they announced the acquisition, I had never heard of the brand,” says Tom Nikic, a Wedbush analyst, who follows Crocs and has been covering the footwear industry for more than a decade. “It was very much a shock to the system. I think those of us in the New York, Wall Street bubble, we didn’t realize what was happening with the brand.”



Rosano had clearly timed the market well, putting the brand up for sale as it was growing fast and demand for comfort shoes was at a high. Allbirds had gone public in November 2021 gaining a $4.1 billion valuation, making it worth 15 times its sales for that year despite being in the red. By contrast, HeyDude, which was already profitable on higher sales, seemed like a bargain. Crocs CEO Rees says that he’d been following HeyDude for a few years by the time he learned it was on the market and figured it wouldn’t be too difficult to turn it into a $1 billion brand under the Crocs umbrella.



“It was a tightly managed sale process,” Rees says. “They were trying to sell to private equity at that point. We got introduced to the founder and managed to get ourselves inserted into the sales process. At that point, we also started to learn about the compelling financials. It wasn’t completely obvious because they were private, and because they weren’t selling in the traditional channels it wasn’t showing up in the typical data sets.”



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<blockquote class="wp-block-quote">
Rosano had a number of businesses before HeyDude, including a wooden watch startup and a brand of clogs with springs in their heels. None found notable success.
</blockquote>



<hr class="wp-block-separator has-alpha-channel-opacity"/>



With Covid restrictions in place, Rees and Rosano couldn’t meet in person. But Rees figured he didn’t need to meet the HeyDude management team since he planned to replace them. He saw similarities with Crocs: both were polarizing brands that a lot of consumers loved. “I think we got a pretty good deal,” he says. “We weren’t daunted by the large-dollar price tag.”



HeyDude’s strategy of focusing on one style of comfort shoe at a mass-market price was a playbook familiar to Crocs. “Alessandro was really clear that he had modeled a lot of his company on Crocs,” Rees says. “He had been studying Crocs and taking our strategies and incorporating them.”



Crocs also knew what Wall Street didn’t at first: Rosano, helped by Guidi’s U.S. distribution, had built a significant and profitable brand with minimal investment. Though those who know him say that Rosano had been strategic in how he’d built the brand, from the outside it appeared to have burst onto the scene almost by chance.



“We’ve become somewhat acclimated to these newer upstart brands being unprofitable and burning through cash,” analyst Nikic says. “This isn’t Allbirds. This isn’t a money-losing, cash-burning business. It’s actually a very highly profitable company.” Nikic compares the brand’s fast growth to Crocs itself, as well as to Ugg, which built its business on one style of comfort boots.



Since acquiring HeyDude, Crocs has hired Blackshaw, who previously ran Sperry and Keds, as its new brand president. It’s introduced new styles, including sneakers, and is setting up collaborations to give it more buzz. It’s also rejiggering its distribution, expanding to major retailers like Shoe Carnival, Famous Footwear and Academy Sports, and building a new distribution center in Las Vegas to handle its expansion.



The acquisition hasn’t been without a few snags. In the second quarter, HeyDude took a hit — with modest 3% growth as its wholesale revenue dropped 8% year-over-year — and Crocs cut its guidance for the brand for the year from mid-20% growth to between 14% and 18%. One problem: as Crocs cut smaller distributors set up by Rosano and Guidi before the acquisition, some dumped their inventory at lowball prices on Amazon. Wedbush analyst Nikic figures that the problems with gray-market goods should wind down in the coming months once the legacy distributors’ inventory is gone. In its earnings call, Crocs pointed to HeyDude’s 30% increase in direct-to-consumer revenues as a sign of the brand’s strength while it dealt with the “pipeline fill” issues in the wholesale channel. Crocs shares are down 19%, at a recent $100, since the deal was announced.



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<blockquote class="wp-block-quote">
Crocs hopes to make HeyDude as ubiquitous as its original ugly-cute rubber clogs, helped by new distribution and marketing muscle.
</blockquote>



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Marketing muscle and collaborations helped Crocs push its flagship brand, and it intends to do the same with HeyDude. Blackshaw says that the company will “overinvest,” noting it could spend up to 8% of total sales on marketing. Part of the plan: connect with consumers on TikTok and Meta, helped by partnerships with influencers and athletes. A collaboration with hunting brand Mossy Oak launched in June, another with YouTube sports and comedy group Dude Perfect (whose channel has 60 million subscribers) followed in August and a college licensing deal is in the works for this fall. The company has plans for more collaborations, including with&nbsp;Yellowstone,&nbsp;The Big Lebowski, a major beer brand and some toy brands. “It’s a lot of the same playbook that Crocs brought to bear,” Blackshaw says.



Whether the brand will take off on the coasts as it has in the middle of the country remains to be seen. Another risk for HeyDude as it expands is oversaturation. As analyst Goldstein notes, Crocs will need to strike the right balance between growth and introducing new styles that risk cannibalizing its core business. “They almost invented a category,” she says. As the brand expands into other types of shoes, “they need to make their proposition clear,” she says. “Why is a HeyDude sneaker better than anyone else’s casual sneaker?”



Meanwhile, Rosano has his fortune to invest and give away. While venture-backed startups stumble, HeyDude harkens back to an older way of building a company on a smart idea and a shoestring. Perhaps, like comfort shoes, it’s time for that to come back into style.

F4Ye2L5WIAAYHWb

How The HeyDude Guy Became A Billionaire Selling Ugly Shoes

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AFRICA’S RICHEST PEOPLE 2023

In November last year, Tesla CEO Elon Musk became the first person in history to obtain a $300 billion fortune. 



A lot has happened since then. He’s on the verge of buying Twitter after months of back-and-forth and reportedly&nbsp;<a href="https://www.washingtonpost.com/technology/2022/10/20/musk-twitter-acquisition-staff-cuts/" target="_blank" rel="noreferrer noopener">plans to lay off 75% of its staff&nbsp;</a>if the deal goes through. He&nbsp;<a href="https://www.forbes.com/sites/nicholasreimann/2022/07/06/elon-musk-secretly-fathered-twins-with-neuralink-executive-report-says/?sh=2ba2f0406505">had secret twins</a>&nbsp;with one of his employees and was rumored to be&nbsp;<a href="https://www.wsj.com/articles/elon-musk-affair-sergey-brin-wife-divorce-11658674840" target="_blank" rel="noreferrer noopener">having an affair with Nicole Shanahan</a>, the soon-to-be ex-wife of Google cofounder Sergey Brin. (Musk denied the affair.)



He also lost more than $100 billion.&nbsp;



From its peak on November 4, 2021, Musk’s fortune has fallen nearly 35%, from $320.3 billion to $209.4 billion as of close of market Thursday–almost entirely due to a sharp drop in the price of Tesla stock. This month alone, Musk’s fortune is down $28 billion. In quarterly earnings reported on Wednesday, the electric carmaker’s revenue still&nbsp;<a href="https://www.forbes.com/sites/nicholasreimann/2022/10/19/tesla-stock-drops-after-missing-revenue-expectations/?sh=d9bce421d2ec">fell short</a>&nbsp;of some analyst expectations. Add in worries about a possible recession, and investors are spooked.&nbsp;



<h3 class="wp-block-heading" id="h-farewell-to-110-billion-in-eleven-and-a-half-months-elon-musk-s-net-worth">Farewell To $110 Billion In Eleven And A Half Months: Elon Musk’s Net Worth</h3>



<figure class="wp-block-image size-large is-style-default"><img decoding="async" loading="lazy" width="1024" height="717" src="https://cms.forbesafrica.com/wp-content/uploads/2022/10/Screenshot-2022-10-24-at-08.44.24-1024x717.png" alt="" class="wp-image-56642" srcset="https://cms.forbesafrica.com/wp-content/uploads/2022/10/Screenshot-2022-10-24-at-08.44.24-1024x717.png 1024w, https://cms.forbesafrica.com/wp-content/uploads/2022/10/Screenshot-2022-10-24-at-08.44.24-300x210.png 300w, https://cms.forbesafrica.com/wp-content/uploads/2022/10/Screenshot-2022-10-24-at-08.44.24-768x538.png 768w, https://cms.forbesafrica.com/wp-content/uploads/2022/10/Screenshot-2022-10-24-at-08.44.24.png 1468w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



“He sells high-priced cars, so a recession will not be good for his business,” says Matt Maley, chief market strategist at Miller Tabak + Co., in an email.



Musk was so rich to begin with, he’s still the wealthiest person in the world, even after his fortune took such a dramatic drive. He’s $60 billion richer than LVMH chief Bernard Arnault and $71 billion richer than Amazon founder Jeff Bezos. When he surpassed Bezos last year, he&nbsp;<a href="https://www.forbes.com/sites/kenrickcai/2021/09/28/elon-musk-responds-to-replacing-jeff-bezos-richest-person-silver-medal/?sh=d75b40f1cd4b">joked</a>&nbsp;in an email to&nbsp;Forbes&nbsp;that he wanted to send Bezos a giant statue with the digit 2.



Musk sold&nbsp;<a href="https://www.forbes.com/sites/nicholasreimann/2022/08/09/elon-musk-sells-69-billion-of-tesla-stock/?sh=bbf5617135a2">$31 billion</a>&nbsp;worth of Tesla stock in the last year to finance his bid to acquire Twitter and take it private. Since the deal hasn’t been finalized,&nbsp;Forbes&nbsp;counts the value of the cash (minus taxes) gained from those sales toward his net worth. But all of the drama associated with the deal is turning off investors, who believe Musk is overpaying for the social network and is irresponsibly selling Tesla stock to fund it.&nbsp;



“The problem for Tesla investors is that more stock sales are likely by Musk to fund this deal, which we believe will go down as one of the worst, most overpaid M&amp;A deals in the history of the market,” Wedbush analyst Dan Ives said in an email.&nbsp;



Others are more optimistic about Tesla’s prospects. Garrett Nelson, an equity analyst at CFRA Research, says Tesla “remains one of the market’s strongest earnings growth stories over the intermediate and long term” and is encouraged by record vehicle sales in the latest quarter.



By Rachel Sandler, Forbes Staff

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A new Forbes survey of the world’s richest people found many still do household chores like taking out the garbage and grocery shopping.&nbsp;



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The world of the super wealthy may be brimming with private jets, mega mansions and more dough than most could even dream of, but the day-to-day lives of billionaires look a whole lot more typical than many would expect.&nbsp;



That’s at least according to the results of a recent survey by&nbsp;Forbes. The poll of 65 of the richest people on Earth found that, while they could easily outsource, many billionaires still choose to do at least some household chores and other domestic tasks themselves. More than a third said they regularly grocery shop and take out the garbage, while 40% cook and walk their dogs. More than half of the respondents said they watch their children or grandchildren’s sports games. (Perhaps it’s the competitive instinct.)&nbsp;



Still, these ultra-rich have their limits, the survey suggests. Clearly greenbacks do not correlate with green thumbs as just 10% or those polled reported doing yardwork on a regular basis. The only task less popular was laundry, which just 8% of the billionaires said they tend to do.&nbsp;



There are a myriad reasons why at least some members of the superrich still do these ordinary tasks. Amazon founder Jeff Bezos and Microsoft cofounder Bill Gates–the world’s No. 2 and No. 4 richest people worth an estimated $146.8 billion and $105 billion, respectively–have both previously discussed their habits of washing the dishes every night. “Other people volunteer, but I like the way I do it,” Gates&nbsp;<a href="https://www.reddit.com/r/IAmA/comments/1xj56q/hello_reddit_im_bill_gates_cochair_of_the_bill/?st=itofjv6g&amp;amp%3Bsh=19fc7cd0" target="_blank" rel="noreferrer noopener">reasoned</a>&nbsp;simply in a 2014 Reddit Q&amp;A.&nbsp;



For some, like real estate investor&nbsp;<a href="https://www.forbes.com/profile/charles-cohen/?sh=5e81ceeb50f8">Charles Cohen</a>, whose estimated $3.6 billion empire includes high-end office buildings in New York City and the movie theater chain Landmark Theatres, doing chores is a way to relax outside of work. “It’s funny you bring this up because I’m just driving back from Home Depot right now with some extra sprinklers and light bulbs,” Cohen said in a recent phone call. “I like going out and doing stuff on my own.”&nbsp;



The real estate mogul described tasks like grocery shopping and grilling as a “great way to break up the week.” Cohen said he grew up in the Westchester suburbs of New York with a housekeeper, and that he and his wife try to do more of the work around the house in part to set an example for their children. “It’s all about doing the things you enjoy doing and creating a lifestyle that defines the way you are and the way you want your children to perceive you, and the values you want them to embrace,” Cohen said. (Not that he and his family live a frugal life. They own a 39-acre Connecticut estate with a&nbsp;<a href="https://www.architecturaldigest.com/story/an-expansive-connecticut-estate-becomes-an-idyllic-retreat" target="_blank" rel="noreferrer noopener">private screening room</a>&nbsp;and a vineyard in France.)



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<h4 class="wp-block-heading" id="h-which-of-these-activities-do-you-do-regularly">WHICH OF THESE ACTIVITIES DO YOU DO REGULARLY?</h4>



<h4 class="wp-block-heading" id="h-insights-from-our-exclusive-survey-of-65-global-billionaires-just-how-normal-is-a-day-in-the-life-of-a-billionaire-well-more-typical-than-you-might-expect-with-more-than-a-third-doing-routine-tasks-like-cooking-and-grocery-shopping-but-folding-clothes-forget-about-it">Insights from our exclusive survey of 65 global billionaires. Just how normal is a day in the life of a billionaire? Well, more typical than you might expect, with more than a third doing routine tasks like cooking and grocery shopping. But folding clothes? Forget about it.</h4>



46%&nbsp;ATTEND KIDS’ OR GRANDKIDS’ SPORTS GAMES OR PERFORMANCES&nbsp;



40%&nbsp;COOK&nbsp;



40%&nbsp;WALK THE DOG&nbsp;



38%&nbsp;TAKE OUT THE GARBAGE&nbsp;



33%&nbsp;SHOP FOR GROCERIES&nbsp;



19%&nbsp;TAKE THE KIDS OR GRANDKIDS TO SCHOOL&nbsp;



10%&nbsp;YARDWORK&nbsp;



8%&nbsp;LAUNDRY&nbsp;



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<blockquote class="wp-block-quote is-style-large" id="h-if-success-changes-you-then-i-think-you-ve-missed-the-whole-point-of-life">“If success changes you, then I think you’ve missed the whole point of life.” —Frank VanderSloot</blockquote>



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<a href="https://www.forbes.com/profile/frank-vandersloot/?sh=211210d14ee3">Frank VanderSloot,</a>&nbsp;the founder and executive chairman of the health and wellness business Melaleuca, and the richest person in Idaho, said doing household chores feels natural to him because of the way he grew up. The son of a railroad worker, VanderSloot recalls waking up before school to chop wood and milk the cows on his family’s farm in northern Idaho.



“People think that you’re a different person because of the size of your checking account, but it doesn’t work that way, at least I don’t think it does,” said VanderSloot. He noted that he and his wife, Belinda, hired someone to help with cleaning around the house, which has 15 rooms to accommodate their 14 children and 54 grandchildren when they come to visit. But he and his wife handle most household chores, including cooking and laundry; they pay their grandchildren to do their yardwork.&nbsp;



“I think that wealth or success will test your character more than failure ever could, and you’ve got to measure up to that,” he emphasized. “If success changes you, then I think you’ve missed the whole point of life.”&nbsp;



Yet another billionaire, who asked for his comments to remain anonymous, told&nbsp;Forbeshe does everything from taking out the trash to washing his clothes—“yes, even laundry and occasional ironing”—because he is “just not comfortable accepting personal services from others.”&nbsp;



<hr class="wp-block-separator"/>



<blockquote class="wp-block-quote is-style-large" id="h-i-m-running-a-multi-billion-dollar-business-i-have-a-lot-going-on-so-it-s-obviously-not-the-best-use-of-my-time-to-be-doing-stuff-around-the-house-that-i-could-hire-someone-to-do">“I’m running a multi-billion dollar business. I have a lot going on, so it’s obviously not the best use of my time to be doing stuff around the house that I could hire someone to do.” —Jeff Greene</blockquote>



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Not everyone has quite the same philosophy. After all, as the survey indicates, the majority don’t do all these chores: 60% said they don’t cook; 62% said they don’t take out their garbage and 92% don’t do laundry. Some may have good reasons.&nbsp;<a href="https://www.forbes.com/profile/jeff-greene/?sh=6232cd2513ed">Jeff Greene</a>, the Palm Beach-based real estate mogul who first made his fortune shorting subprime mortgages during the Great Recession, insists that while he’s “pretty down to earth,” most household chores and tasks are handled by his staff. “I’m running a multi-billion dollar business. I have a lot going on, so it’s obviously not the best use of my time to be doing stuff around the house that I could hire someone to do,” he said.&nbsp;



When he has time outside of work, Greene said he prioritizes spending time with his three young children, who he drives to and from school each day. “We’re very involved with our kids,” he said, adding: “It’s nice to do … Compared to fighting with some contractor about a deadline, I’d rather be stuck with my kids.” 



 By <a href="https://www.forbes.com/sites/jemimamcevoy/"></a>Jemima McEvoy, Forbes Staff

Still life of a small shopping cart and a golden apple on pink background

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Screenshot 2021-10-19 at 07.19.31

The Next Billion-Dollar Startups 2021

How the singer became the richest female musician on the planet. Hint: it wasn&#8217;t performing.



When Robyn Fenty, known to the world as Rihanna, launched Fenty Beauty in 2017, she sought to create a cosmetics company that made “women everywhere (feel)&nbsp;included.” A perhaps unintended consequence: The beauty line has helped her enter one of the world’s most&nbsp;exclusive&nbsp;ranks: Billionaire.



Rihanna is now worth $1.7 billion,&nbsp;Forbes&nbsp;estimates—making her the wealthiest female musician in the world and second only to Oprah Winfrey as the richest female entertainer. But it’s not her music that’s made her so wealthy. The bulk of her fortune (an estimated $1.4 billion) comes from the value of Fenty Beauty, of which&nbsp;Forbes&nbsp;can now confirm she owns 50%. Much of the rest lies in her stake&nbsp;in her lingerie company, Savage x Fenty, worth an estimated $270 million, and her earnings from her career as a chart-topping musician and actress.



While Barbados-born Rihanna isn’t the only celebrity to capitalize on her social media presence —she has 101 million followers on Instagram and 102.5 million on Twitter—to build a beauty brand, she is the most successful beauty entrepreneur to do so. Fenty Beauty, which is a 50-50 joint venture with French luxury goods conglomerate LVMH (run by Bernard Arnault, the world’s second richest person), launched in 2017 with the goal of inclusivity. Its products come in a diverse range of colors—foundation is offered in 50 shades, including harder-to-find darker shades for women of color—and are modeled in its advertising by an equally diverse group of people.&nbsp;



Available online and at Sephora stores, which are also owned by LVMH, the products were an instant success. By 2018, its first full calendar year, the line was bringing in more than $550 million in annual revenues, according to LVMH, beating out other celebrity-founded brands like Kylie Jenner’s Kylie Cosmetics, Kim Kardashian West’s KKW Beauty and Jessica Alba’s Honest Company.



“A lot of women felt there were no lines out there that catered to their skin tone. It was light, medium, medium dark, dark,” says Shannon Coyne, cofounder of consumer products consultancy Bluestock Advisors. “We all know that’s not reality. She was one of the first brands that came out and said ‘I want to speak to all of those different people.’”



While cosmetics sales slowed during the pandemic, beauty companies are worth as much as ever. Stocks of larger beauty conglomerates like Estee Lauder and L&#8217;Oreal have bounced back, reaching all-time highs and trading at impressive 7.5 (or more) times annual revenues. Meanwhile independent brands like Beautycounter and Charlotte Tilbury inked deals with investment firms earlier this year at billion-dollar valuations.



That is good news for Rihanna. Thanks to the impressive multiples at which beauty companies are trading, Fenty Beauty is worth a conservative $2.8 billion,&nbsp;Forbes&nbsp;estimates. And all signs point to the company continuing to grow. In its annual report for 2020, LVMH said Fenty Skin, which launched last year, was off to a “very promising start” and “generated unprecedented buzz,” and that Fenty Beauty &#8220;maintained its appeal as a premier make up brand.&#8221;



Fenty Beauty isn’t Rihanna’s only billion-dollar brand. In February her lingerie line&nbsp;<a href="https://www.forbes.com/sites/maddieberg/2021/02/10/rihannas-lingerie-line-savage-x-fenty-raises-115-million-on-same-day-lvmh-announces-its-closing-her-fashion-house/">Savage x Fenty raised $115 million in funding</a>&nbsp;at a $1 billion valuation. The company, which launched in 2018 as a joint venture with TechStyle Fashion Group, counts blue-chip investors like Jay-Z’s Marcy Venture Partners and private equity firm L. Catterton (<a href="https://www.forbes.com/sites/sergeiklebnikov/2020/05/12/why-a-private-equity-firm-backed-by-bernard-arnault-is-putting-400-million-into-norwegian-cruise-line/?sh=7fa14e343504">in which Bernard Arnault is an investor)</a>&nbsp;as shareholders. Rihanna maintains a 30% ownership stake,&nbsp;Forbes&nbsp;estimates. The latest round of funding will reportedly be used for customer acquisition and retail expansion.&nbsp;



Not that everything Rihanna touches turns to gold.&nbsp; In February, LVMH and Rihanna&nbsp;<a href="https://www.forbes.com/sites/maddieberg/2021/02/10/rihannas-lingerie-line-savage-x-fenty-raises-115-million-on-same-day-lvmh-announces-its-closing-her-fashion-house/?sh=4568e2373660">confirmed in a statement to&nbsp;Forbes</a>&nbsp;that they had shut down their other venture, a high-end fashion and accessories house also called Fenty. Launched in 2019, Fenty sought to extend Rihanna’s brand of inclusivity and offer styles in a range of sizes. But like many luxury fashion brands, the high-priced line suffered during the pandemic, releasing its last collection in November 2020.



The only complaint some fans may have about her career as a fashion and beauty mogul? It keeps her busy. The singer, who used to release an album almost every year, hasn’t released a new album since 2016’s&nbsp;Anti.&nbsp;



From a financial perspective, that may be just fine: “She is creating a brand outside of herself. It’s not just about Rihanna,” says consultant Coyne. “Even if you don&#8217;t like her music, she’s created a real style in the fashion and beauty space.”



by&nbsp;Madeline Berg, Forbes Staff

Rihanna’s Savage X Fenty Show Vol. 2 presented by Amazon Prime Video – Show & BTS

Fenty’s Fortune: Rihanna Is Now Officially A Billionaire

Elon Musk was in court in Delaware last week defending his role in Tesla’s acquisition of failing solar panel installer SolarCity in 2016. That questionable decision – SolarCity was founded by his cousins; Musk was its biggest shareholder and served on the board of both companies – triggered a shareholder lawsuit. Of course, not all of Musk’s misguided notions land him in Delaware Chancery Court, but many don’t pan out precisely as planned. “If I wasn’t optimistic I don’t think I would have started an electric car company or a rocket company,” <a href="https://twitter.com/WillOremus/status/1415012678020513794?s=20" target="_blank" rel="noreferrer noopener">he told the court</a>.In the case of the $2.6 billion SolarCity deal, the solar roof revolution he predicted in 2016 hasn’t materialized. But neither has an affordably priced Tesla, an all-electric semi, a robotaxi network or next-gen low-cost, high-capacity batteries. Ahead of a ruling in the SolarCity case, here’s a roundup of some of Musk’s bigger swings – and misses – from the last five years.  



<h2 class="wp-block-heading" id="h-35-000-model-3">$35,000 Model 3</h2>



<div class="wp-block-image"><figure class="alignleft size-large is-resized"><img decoding="async" loading="lazy" src="https://cms.forbesafrica.com/wp-content/uploads/2021/07/GettyImages-1008732814-1024x683.jpg" alt="" class="wp-image-51852" width="379" height="252" srcset="https://cms.forbesafrica.com/wp-content/uploads/2021/07/GettyImages-1008732814-1024x683.jpg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2021/07/GettyImages-1008732814-300x200.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2021/07/GettyImages-1008732814-768x512.jpg 768w, https://cms.forbesafrica.com/wp-content/uploads/2021/07/GettyImages-1008732814-1536x1024.jpg 1536w, https://cms.forbesafrica.com/wp-content/uploads/2021/07/GettyImages-1008732814-2048x1366.jpg 2048w" sizes="(max-width: 379px) 100vw, 379px" /><figcaption>The general assembly of the Tesla Model 3 at the Tesla factory in Fremont, California, on Thursday, July 26, 2018. (Photo by Mason Trinca for The Washington Post via Getty Images)</figcaption></figure></div>



<h4 class="wp-block-heading" id="h-the-35-00-price-point-was-touted-for-years-as-the-model-3-s-key-appeal-no-longer-just-a-auto-for-the-rich-telsa-would-finally-make-a-mass-market-car-but-after-model-3-went-into-production-it-was-only-available-at-that-price-intermittently-before-being-scrubbed-currently-the-cheapest-version-starts-at-40-000-and-after-taxes-registration-and-add-ons-usually-sells-for-closer-to-50-000-meanwhile-starting-prices-for-tesla-s-bigger-model-s-and-x-have-risen-to-85-000-and-95-000-respectively-and-they-really-cost-more-than-100-000-with-options-taxes-and-delivery-charges">The $35,00 price point was touted for years as the Model 3’s key appeal. No longer just a auto for the rich, Telsa would finally make a mass-market car. But after Model 3 went into production it was only available at that price intermittently before being scrubbed. Currently the cheapest version starts at $40,000 and after taxes, registration and add-ons usually sells for closer to $50,000. Meanwhile, starting prices for Tesla’s bigger Model S and X have risen to $85,000 and $95,000, respectively, and they really cost more than $100,000 with options, taxes and delivery charges.</h4>



<div class="wp-block-image"><figure class="alignright is-resized"><img decoding="async" src="https://thumbor.forbes.com/thumbor/960x0/https%3A%2F%2Fspecials-images.forbesimg.com%2Fimageserve%2F60e8c1aec3268da90bbd4e49%2F0x0.jpg%3FcropX1%3D820%26cropX2%3D3181%26cropY1%3D0%26cropY2%3D2362" alt="Tesla-Semi_IR_8219-14-Courtesy Tesla" width="-471" height="-471"/><figcaption>TESLA</figcaption></figure></div>



<h2 class="wp-block-heading"> Tesla Semi</h2>



<h4 class="wp-block-heading">Musk’s ambitions go beyond passenger vehicles and in November 2017 he unveiled his futuristic electric truck, promising it would go 500 miles per charge and be available around the end of 2019. As of July 2021, Tesla hasn’t announced a firm launch date or production site for the Semi and in June Jerome Guillen, the long-time head of the truck program, unexpectedly resigned.</h4>



<h2 class="wp-block-heading">Tesla Roadster</h2>



<h4 class="wp-block-heading">Unveiled in November 2017 along with the Semi, Musk said the Roadster would arrive in 2020, be the fastest production car ever made and go as far as 620 miles per charge. The anticipated tech wonder is expected to cost about $200,000 but there’s no firm launch date. </h4>



<h2 class="wp-block-heading">Tesla Giga Berlin</h2>



<h4 class="wp-block-heading">Musk wanted Tesla’s first European battery CK plant to open in July 2021. While much of the physical construction is complete, the plant lacks regulatory approval to begin operations, has stoked opposition from local environmentalists and faces fines related to water and sewerage issues. The current hope is that the plant will be open by early 2022.</h4>



<div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img decoding="async" loading="lazy" src="https://cms.forbesafrica.com/wp-content/uploads/2021/07/GettyImages-1270253742-1024x683.jpg" alt="" class="wp-image-51854" width="697" height="465" srcset="https://cms.forbesafrica.com/wp-content/uploads/2021/07/GettyImages-1270253742-1024x683.jpg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2021/07/GettyImages-1270253742-300x200.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2021/07/GettyImages-1270253742-768x512.jpg 768w, https://cms.forbesafrica.com/wp-content/uploads/2021/07/GettyImages-1270253742-1536x1024.jpg 1536w, https://cms.forbesafrica.com/wp-content/uploads/2021/07/GettyImages-1270253742-2048x1365.jpg 2048w" sizes="(max-width: 697px) 100vw, 697px" /><figcaption>2: A sign marks Tesla Strasse (Tesla Street) at the construction site of the new Tesla Gigafactory near Berlin on September 02, 2020 near Gruenheide, Germany. (Photo by Sean Gallup/Getty Images)</figcaption></figure></div>



<h2 class="wp-block-heading">Tesla Full Self Driving&nbsp;</h2>



In October 2016 Musk announced that all Teslas were being built with the necessary computing power, sensors and cameras to allow them to eventually operate autonomously. At that time, he estimated that Full Self Driving capability would arrive in two to three years. The $10,000 feature, an enhancement of the company’s Autopilot system, was released in beta form in July, but after a series of horrific, fatal accidents Tesla now warns drivers that it “<a href="https://twitter.com/tesla_raj/status/1413764413165772803" target="_blank" rel="noreferrer noopener">may do the wrong thing at the worst time</a>” and that they need to use it with “additional caution”–suggesting that it isn’t ready for primetime.



<h3 class="wp-block-heading">Tesla Robotaxi Network</h3>



Musk said at Tesla’s Autonomy Day in October 2019 that by the end of 2020 “for sure, we will have over a million robotaxis on the road. … The fleet wakes up with an over-the-air update. That&#8217;s all it takes.” As a result of that capability, Tesla owners would be able to earn money from their vehicles by making them available for an autonomous, on-demand ride service the company would oversee. That hasn’t happened and there’s no indication that will be possible–or legal– in the near term.



<h3 class="wp-block-heading">Tesla Next-Generation Battery Cells</h3>



Musk touted a larger, beer-can size 4680 lithium battery cell in September 2020 that he claimed would be 56% cheaper and have five times the energy of the company’s current cells. He said pilot production of small batches at a lab in Silicon Valley was underway and that the company might be able to scale up to high-volume production within a year or two. Timing for production is unclear, but delays in manufacturing the cell appear to be part of the problem with launching Tesla’s Semi and Roadster. 



<h3 class="wp-block-heading">Tesla Solar Production And Jobs&nbsp;</h3>



New York spent $950 million to build and equip a solar panel factory in Buffalo that SolarCity had big plans for. In exchange for the state’s generosity, the company was to create at least 1,460 jobs there. The future looked promising after Tesla purchased SolarCity in late 2016 and in December of that year Tesla said it “entered into a long-term agreement with Panasonic to manufacture photovoltaic cells at our Gigafactory 2 in Buffalo, New York, with negotiated pricing provisions and the intent to manufacture 1 gigawatt of solar panels annually.” But in the years since, output of panels at the plant has been unclear. In 2020 Tesla reported delivering just 205 megawatts of solar panels, a quarter of what SolarCity installed in 2016. Tesla has also had difficulty maintaining the required headcount at the factory. Panasonic abandoned the facility last year, further reducing employment at the facility. Tesla has been given numerous extensions by the state. As of Memorial Day, it had 1,058 employees at the plant, and has until the end of 2021 to meet the 1,460-worker target or pay a $41 million penalty.



By Alan Ohnsman, Forbes Staff

Elon Musk, CEO of SpaceX and chairman of Tesla Motors at Tesla’s headquarters in San Carlos Tuesday Oct. 24, 3008.  Silicon Valley icon Musk became a billionaire founding PayPal, but he’s out to do something even more important – help humanity reach beyon

Elon Musk’s Biggest Tesla Blunders Of The Last Five Years

Microsoft&#8217;s move to add the role of board chairman to CEO Satya Nadella&#8217;s duties at the technology giant bucks a growing trend of companies separating the two jobs.



The number of companies whose CEO also held the title of chairman has declined steadily over the past three years at U.S. companies of all sizes, from the megacap corporations in the S&amp;P 500 to the smaller firms in the Russell 3000 index, according to new research by the Conference Board and analytics firm ESGAUGE.



The trend seems to be more pronounced among smaller companies. Only 36% of Russell 3000 companies had the CEO also serve as chair in 2020. That&#8217;s down from 41% percent in 2016.



“The importance of having an independent board has pushed many organizations to adopt a separation model,” says Matteo Tonello from The Conference Board. “The strong leadership skill sets in CEOs of very large S&amp;P 500 companies may be the reason why these companies are more reluctant to have the role separation,” he added.&nbsp;&nbsp;&nbsp;



Providing better oversight of company management and avoiding the sorts of conflicts of interest that sunk companies like WorldCom and Tyco, have largely been the reasons behind the role separations.



In companies that give CEOs a chair role as a reward for proving themselves as leaders, the gap is typically closer to two years. Nadella’s predecessor, Steve Ballmer, never named chairman during his 14-year tenure as CEO of the software giant. For years, co-founder Bill Gates played that role. John Thompson became chairman when Nadella was named CEO in February 2014 and will return to his previous role of being lead independent director.&nbsp;



&nbsp;Microsoft rationalized Nadella&#8217;s promotion in a statement that suggested the board wanted a firmer focus on management priorities. “In this role, Nadella will lead the work to set the agenda for the board, leveraging his deep understanding of the business to elevate the right strategic opportunities and identify key risks and mitigation approaches for the board’s review,” said the&nbsp;<a href="https://www.prnewswire.com/news-releases/microsoft-board-of-directors-announces-role-changes-and-quarterly-dividend-301314220.html" target="_blank" rel="noreferrer noopener">statement.&nbsp;</a>



&nbsp;The spotlight on the trend of CEOs serving as board chairs became more intense after the dot-com bubble burst in 2000. Along with sinking many Internet startups, the stock crash made investors more skeptical about the cult of personality around many company leaders. Scandals at companies like Tyco, Enron, and WorldCom only reinforced a key question: Where was the board?&nbsp; Separating the chairman and CEO role was seen as a critical step in reinforcing board independence.



The debate continued, intensifying again after the 2008 financial crisis. In February 2010, the Securities and Exchange Commission issued rules requiring listed companies to disclose their leadership structure and explain why it was appropriate. That exercise, along with pressure from shareholders, proxy advisory firms, and regulators, has prompted a slow but steady trend towards separating the chair and CEO roles. As Peter Crist, chairman of search firm Crist | Kolder, notes, “once those roles are decoupled, it’s rare to go back.”



The exception is when a successful CEO wants that role — or it’s treated as a promotion for a job well done. Mary Barra at General Motors, for example, followed a fairly typical pattern in being named chair of GM two years after holding the CEO slot. What’s unusual about Satya Nadella is the fact that he was CEO for seven years before being named chairman. That could indicate some frustration or perceived issues with the board’s ability to navigate through the current environment.&nbsp;



“The chair has more power to control the agenda and set the stage for conversations in the boardroom,” says Crist. “A CEO may say, ‘I need to lead and educate the board’ to get things done.”&nbsp;



That said, Crist rarely supports such a move. “I’m a strong believer in separating the chair and CEO roles … Not many board members can stand up to a strong CEO. Look at compensation trends. When is  compensation going to trend down? Never. It’s important to have as much autonomy as possible … If you’re a high-performing company and the CEO is viewed as a critical element of success, investors will basically shrug their shoulders when a CEO gets named chair of the board.”



By Aayushi Pratap, Forbes Staff

Microsoft Holds Annual Shareholder Meeting

Nadella’s Appointment As Microsoft Chair Bucks Governance Trend

MacKenzie Scott, the philanthropist and ex-spouse of Amazon CEO and founder Jeff Bezos, announced a new round of donations Tuesday, totaling some $2.7 billion to 286 organizations around the U.S. She detailed her thought process and the list of recipients in a&nbsp;<a href="https://mackenzie-scott.medium.com/seeding-by-ceding-ea6de642bf" target="_blank" rel="noreferrer noopener">Medium blog post</a>.&nbsp;&nbsp;



“Sitting down to write this post, I felt stuck,” Scott writes. “I want to de-emphasize privileged voices and cede focus to others, yet I know some media stories will focus on wealth.” (Duly noted by us here at&nbsp;Forbes.) By&nbsp;<a href="https://www.forbes.com/profile/mackenzie-scott/?sh=b4d7725243d0">our estimate</a>, Scott’s fortune—after distributing the latest gifts—stands at $57 billion as of 10:30 am ET, which makes her the 22nd richest person in the world.&nbsp;



Scott says she wished she could have titled her post “286 Teams Empowering Voices the World Needs to Hear,” because she and her team are “attempting to give away a fortune that was enabled by systems in need of change.” With that, Scott jumps into the&nbsp;<a href="https://www.nytimes.com/2021/06/13/opinion/warren-buffett-billionaire-taxes.html" target="_blank" rel="noreferrer noopener">billionaire debate</a>&nbsp;that’s long simmered amid recent explosive reporting by&nbsp;<a href="https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax" target="_blank" rel="noreferrer noopener">ProPublica</a>&nbsp;revealing that the world’s richest—including her ex-husband—pay very little in taxes relative to their wealth.



“We are governed by a humbling belief that it would be better if disproportionate wealth were not concentrated in a small number of hands, and that the solutions are best designed and implemented by others,” Scott writes. She says she focused her latest donations on higher education, groups bridging divides through interfaith support, arts and culture, anti-poverty organizations led by people of color and grassroots groups supporting local communities.



Scott didn&#8217;t disclose the specific dollar amount of each grant she made. But she did say that in total, she dispersed $2.739 billion. If the grants are equal in size, that means each of the 268 organizations received about $10 million. One recipient, the Children’s Defense Fund,&nbsp;<a href="https://www.childrensdefense.org/2021/childrens-defense-fund-receives-20-million-from-mackenzie-scott-and-dan-jewett/" target="_blank" rel="noreferrer noopener">says</a>&nbsp;they received $20 million, “the largest single contribution” in its history. Global health organization&nbsp;<a href="https://www.forbes.com/sites/kerryadolan/2018/03/12/backed-by-a-band-of-philanthropists-nonprofit-makes-dramatic-progress-in-reducing-childhood-deaths/?sh=36a9069a237e">Muso</a>&nbsp;received $15 million, likewise its largest donation to date, according to a press release. The BOMA Project, which aims to end poverty in rural Africa, received&nbsp;<a href="https://bomaproject.org/2021/06/15/philanthropist-mackenzie-scott-donates-10m-to-the-boma-project/" target="_blank" rel="noreferrer noopener">$10 million</a>.



Fascinating, though, are Scott’s donations to groups that enable philanthropic giving or aid. Like Kiva, which makes microloans. Or Give Directly, which gives cash to the very poor in African countries. Another recipient, the National Council of Nonprofits, told&nbsp;Forbes&nbsp;their unrestricted grant will help their work supporting tens of thousands of nonprofits across the country. “Grateful for the tremendous trust that MacKenzie and Dan [Jewett, her husband] have in our work does not even begin to describe how we are feeling today,” CEO and president Tim Delaney says.



In keeping with Scott’s stated belief of ceding control of money for the best results in disseminating wealth, she gave to the Decolonizing Wealth Project, which redistributes wealth to Black, Indigenous and other philanthropic initiatives led by people of color. A gift was also made to Homeboy Industries, a Los Angeles-based nonprofit that rehabilitates former gang members and helps them become contributing members of society.



Among Scott’s education recipients is DonorsChoose, a nonprofit that lets teachers crowdfund for their classrooms. Founder Charles Best told&nbsp;Forbes&nbsp;that Scott’s gift was “overwhelming,” and said her Tuesday blog post “will surely be cited as one of the most powerful philanthropic manifestos ever written.” Scott also donated to numerous colleges and universities.



Another recipient, Faith in Action, told&nbsp;Forbes&nbsp;they look forward to using their multi-million donation “toward continued investments in Black and Brown communities” as part of their mission to help people of religious faith work towards more just and equitable societies. “This gift is transformative for Faith in Action,” executive director, the Reverend Alvin Herring, says. “As we center the leadership of everyday folks who aren’t looking for the limelight, we are grateful to Ms. Scott for investing in organizations led by people directly impacted by the issues we care so deeply about.”



Arts organizations receiving funds include the legendary Apollo Theater in Harlem, the Alvin Ailey American Dance Theater, Jazz at Lincoln Center and the L.A. Arts Endowment Fund, among others.



Tuesday marks Scott’s third major round of donations. By&nbsp;Forbes’ estimate, she gave away&nbsp;<a href="https://www.forbes.com/sites/denizcam/2021/04/06/how-mackenzie-scott-gave-away-nearly-6-billion-last-year-and-ended-up-richer/?sh=4a551b4068cc">nearly $6 billion</a>&nbsp;in 2020 to 500 organizations. Scott is also a&nbsp;<a href="https://givingpledge.org/Pledger.aspx?id=393" target="_blank" rel="noreferrer noopener">signee</a>&nbsp;of the Giving Pledge, promising to give away half of her fortune to charitable causes during her lifetime, or after her death.

Axel Springer award ceremony

MacKenzie Scott Just Gave Away Another $2.7 Billion

Poland’s parcel king, Rafal Brzoska has gone from near-bankrupt to billionaire by not delivering packages to individual houses.



It was the summer of 2016, and the walls were closing in on Rafał Brzoska. The then-38-year-old Polish entrepreneur had spent nearly two decades transforming InPost, a college dorm-room business that shoved supermarket coupons through letterboxes, into a $120 million–a-year commercial mail business. But competing against the government’s postal service was taking a toll. He had $65 million in debt and was frantically trying to find new investors while staving off the repo man.



“One of my key points with the new investors was, ‘I want to repay all the bonds, all the banks, all the people that have lent us money,’ ” recalls Brzoska, who is now 43. “The investors wondered why, and I told them, ‘I want to live in this country, and you only have one name, one face.’ ”



Those investors weren’t interested in Brzoska’s dying postal business but in the automated e-commerce lockers spinoff he had started in 2010. Amazon and other online retailers ship packages for pickup to these refrigerator-sized street lockers, which cost around $20,000 to install. They are popular because mailmen in Europe will rarely leave a parcel unattended on a stoop. That effectively stops porch piracy (54% of Americans say they’ve had a package swiped), but if you miss the doorbell you’re in for a slog to the post office.



On the brink of bankruptcy, Brzoska moved to shut down the mail business in summer 2016 ahead of talks with his rescuer, Advent International. The Boston-based private equity group took InPost private the following April. The $110 million deal paid off the company’s debts and gave Brzoska a further $125 million to nearly double the size of his parcel locker network to 4,400 in a year.



It was both a sweetheart deal and a shrewd one. Poles were late to embrace online shopping, but by 2017 e-commerce sales were growing at a steady 20.4% per year. Then came the pandemic, and online shopping jumped 36% in just 12 months. InPost’s revenues soared to $677 million, up 104% in 2020. Brzoska’s lockers handle 36% of all parcels shipped in Poland.



“There were a lot of reasons to say no to this one, and a lot of people did say no,” says Paul Atefi, a managing director at KKR, which loaned InPost $145 million in 2018 to build new lockers. Brzoska now has 11,734 lockers in Poland and more than 1,100 in the United Kingdom, plus a few hundred in Italy. “But when we started looking at a machine-by-machine basis, it was really compelling. Sometimes the payback was as low as 1.5 years per machine. . . . We love this company.”



The margins are enviable, too. Brzoska charges around $2 per package, and his costs are limited to locker setup, labor and leases for locker space. InPost pocketed $97 million in profit in 2020. “Our automated parcel machines are doubling revenue year-over-year,” he says.



“In Poland they’re targeting to increase Ebitda margins to more than 50%,” says David Kerstens, an analyst with Jefferies International. “And that’s compared to Ebitda for postal operators, such as Royal Mail, that are low single digits.”



Putting lockers within “slipper distance” of shoppers’ homes and offices transformed the business, says Marek Różycki, a consultant who advised Advent on the InPost deal. “If you have to trek a mile to your nearest locker in the pouring rain, that’s not appealing. But in Poland, my nearest locker is 350 meters away. It’s almost like home delivery—and more convenient.”



InPost learned the “slipper rule” the hard way. Advent rolled back Brzoska’s wild expansion to four continents, which left the company thinly spread and overextended. “This was a classic scenario where you have a charismatic, very entrepreneurial individual managing a business that was growing very fast,” Różycki says. “But he took on too many projects with too few resources.”



InPost went public again in January on Amsterdam’s stock exchange, valuing the business at $9.7 billion; Brzoska’s stake is currently worth $1.1 billion. He has persuaded investors that his lockers are a cheaper, greener alternative to fleets of delivery trucks crisscrossing Europe’s cities. One storage unit can do the work of 24 trucks, Brzoska says: “That’s why lockers are the future.”



While Brzoska was mastering the locker business, his main rivals—Europe’s postal services, plus UPS and Amazon, which have experimented with lockers—took a different tack, boosting home delivery and signing up thousands of corner stores to handle package pickups and returns. It was a quick, cheap way to scale versus lockers, but the pandemic-driven e-commerce boom has left bodegas from Berlin to Bilbao with aisles crowded with packages and long lines for returns. “Convenience stores aren’t that convenient for parcel collection, and particularly not during the pandemic,” Kerstens says.



Brzoska’s plan is to cut those lines—and leap ahead in Europe—with a $675 million deal, announced in March, to buy delivery giant Mondial Relay and drop his lockers at the busiest stores in its France-wide network.



Brzoska’s dramatic results have not gone unnoticed. Alibaba and Allegro—Poland’s e-commerce powerhouse, which accounts for a quarter of InPost’s sales—now have lockers in Poland, while Europe’s postal giants, such as Germany’s Deutsche Post, are also betting on parcel machines.



Brzoska isn’t the underdog this time, and he won’t shy from a fight. He credits his star sign and lucky bead bracelets—incongruous against his tailored suits—for the fact that he survived earlier rounds with postal heavyweights. “I told my team: ‘I am a Scorpio. I will survive, and you will survive with me, because Scorpios are always like this, fighting until the very end.’ ”



By Iain Martin, Forbes Staff

Amazon Warehouse Employees Prepare For Their Busiest Time Of Year

The Future Of Internet Shopping Might Not Be Home Delivery

Sweden-based Klarna is Europe’s biggest privately held fintech company with 4,000 employees and a $31 billion valuation, pumped up by investors like Softbank, General Atlantic and BlackRock. The company has become elephantine in such a short time by offering customers the ability to make purchases and pay later, making money by charging merchants to utilize Klarna’s payment technology. Today Klarna names a new investor: rapper, designer and producer A$AP Rocky.&nbsp;



“It’s a radical way to approach the crediting system,” says Rocky (real name Rakim Mayers), 32. “It helps people with financial literacy.”



In addition to the company’s tremendous growth, Rocky was motivated to invest in Klarna from his own experiences growing up in Harlem. He notes the difficulties making payments, especially on student loans with interest, for people from low-income backgrounds. “You’re setting yourself up for financial debt,” he says. “There’s no system that helps us deal with things when it comes to student loans, the IRS, banking or credit.” He describes Klarna as a “layaway plan” at a global scale.



This is a new chapter in the “funny history” (Rocky’s words) between the performer and Sweden. In August of 2019,&nbsp;<a href="https://www.forbes.com/sites/isabeltogoh/2019/08/14/aap-rocky-found-guilty-of-assault-handed-suspended-sentence-over-stockholm-brawl/?sh=24f16c994ebf">Rocky was released</a>&nbsp;back to the United States after the country held him in pretrial detention—on an assault charge—after a post-concert fight in Stockholm. Rocky’s cause sparked international outrage, fueled in-part by then-President Donald Trump, who lashed out on Twitter to advocate for the rapper’s release and return to the U.S.&nbsp;



Now, reclaiming his relationship with Sweden as an investor in one of the country’s most significant companies, Rocky (who starred on the&nbsp;<a href="https://www.forbes.com/sites/zackomalleygreenburg/2016/02/09/aap-rockys-sequel-a-cash-prince-aims-for-the-fashion-crown/?sh=4c5f206a6052">2016&nbsp;Forbes&nbsp;30 Under 30 cover</a>) will curate upcycled and vintage fashion experiences in the Klarna smartphone app.&nbsp;



For Klarna’s&nbsp;<a href="https://www.forbes.com/profile/sebastian-siemiatkowski/?sh=599119366e25">billionaire CEO and cofounder Sebastian Siemiatkowski</a>, bringing Rocky to his cap table is a strategic brand move. Klarna prides itself on being the anti-bank bank: its color is bubblegum pink and it rans ads in major cities with investor Snoop Dogg surrounded by Afghan Hounds. “We’re a very diverse group of people with over 50 nationalities represented, speaking multiple languages that have a very different approach to business,” says Siemiatkowski. “We wanted our brand to represent that—to represent approachability and availability. We also did want to add a portion of fun to it.”&nbsp;



The company’s trajectory has been anything but relaxed. Making the bulk of its revenue from charging merchant fees between 3 and 7%, revenue grew 37% from 2019 to 2020 to $1.2 billion. Klarna has over 90 million active users around the world who make an average of 2 million transactions per day with over 250,000 merchants like Nike, Amazon and Sephora.







Buy now, pay later, however, has led to backlash by critics who say Klarna encourages overspending. “A decade on from the financial crisis, a new generation—some of whom were barely out of primary school during the last credit crunch—is being courted by new types of lenders who are rewriting the language of debt for the Instagram era,” said the&nbsp;<a href="https://www.ft.com/content/8c751ac6-bb63-11e8-94b2-17176fbf93f5" target="_blank" rel="noreferrer noopener">Financial Times</a>&nbsp;in 2018 of Klarna.&nbsp;



The company insists it’s an antidote to the credit system. A representative for Klarna says: “Each new transaction is evaluated before it gets approved, and we have limits in place on how much shoppers can spend when using our services. Every time a customer makes a transaction using Klarna, we reassess their ability to repay and evaluate if the payment option they wish to use is suitable for them at that time.” They also note that customers are banned from using Klarna until their outstanding balance has been paid. The company also rarely charges interest to customers, unlike creditors.



For all these reasons, Rocky believes Klarna is his best investment yet. “I’m really hands-on involved,” says Rocky. “It’s a no-brainer.”



By Alexandra Sternlicht, Forbes Staff

2019 Rolling Loud LA

A$AP Rocky Becomes The Latest Investor In $31 Billion Fintech Platform Klarna

<a href="https://www.forbes.com/profile/jeff-bezos/?sh=28bb8a6a1b23">Jeff Bezos</a>&nbsp;didn’t have to wait long to reclaim his throne as the richest person in the world: A few hours after&nbsp;<a href="https://www.forbes.com/sites/daviddawkins/2021/05/24/bernard-arnault-becomes-worlds-richest-person-as-lvmh-stock-rises/?sh=355a97ab2ad9">losing</a>&nbsp;the title to French luxury fashion magnate&nbsp;<a href="https://www.forbes.com/profile/bernard-arnault/?sh=23d080666fa4">Bernard Arnault</a>, he’s now back at No. 1 after Amazon’s shares ticked up when markets opened in New York. As of 1:30 pm ET, Bezos leads with a fortune of $188.4 billion, ahead of Arnault’s $187.3 billion.



The two men entered the weekend on level terms, worth $186 billion each, after shares in Arnault’s&nbsp; luxury goods conglomerate LVMH rallied in the second half of last week. LVMH stock performed even better on Monday, closing nearly 1% higher and boosting Arnault’s fortune by $1.7 billion—enough for him to briefly eclipse Bezos and become the world’s richest person for a few hours. Then Amazon shares ticked up more than 1% as of 1:30 pm ET on Monday, making Bezos $2.4 billion richer today.



Arnault has briefly ranked as the world’s richest person several times already: Just before the markets closed on Friday in the U.S., Arnault was about $100 million&nbsp;<a href="https://www.forbes.com/sites/giacomotognini/2021/05/21/french-luxury-tycoon-bernard-arnault-is-now-tied-with-jeff-bezos-for-richest-person-in-the-world/?sh=364d38d42b91">richer</a>&nbsp;than Bezos, before ending the day with the same net worth. At around 10:30 am ET on December 16, 2019, Arnault&nbsp;<a href="https://www.forbes.com/sites/kristinstoller/2019/12/16/french-billionaire-bernard-arnault-was-briefly-the-worlds-richest-person-today/?sh=43b1d3ad7ce1">pushed</a>&nbsp;past Bezos to claim No. 1 for the first time, until Amazon shares closed higher and Arnault fell back to number two.



While Bezos is now trading the top spot with Arnault, he was previously locked into a tight competition with Tesla CEO&nbsp;<a href="https://www.forbes.com/profile/elon-musk/?sh=5a9c30fe7999">Elon Musk</a>, currently the third richest person in the world with a net worth of $150.8 billion. In early January, Musk overtook Bezos to become the richest on three separate occasions—on January 8, 12 and 14—before the Amazon founder definitively clawed his way back on January 15.



All three men have seen spectacular growth in their net worths throughout the pandemic, collectively gaining more than $300 billion. Since Forbes calculated net worths for its 2020 World’s Billionaires list at the worst of the market crash in March 2020, Bezos has gotten more than $75 billion richer, compared to gains of nearly $127 billion for Musk and $111 billion for Arnault. Bezos’ net worth peaked at a staggering $200 billion on two occasions: <a href="https://www.forbes.com/sites/jonathanponciano/2020/08/26/worlds-richest-billionaire-jeff-bezos-first-200-billion/?sh=495faf434db7">first</a> in August 2020 and <a href="https://www.forbes.com/sites/sergeiklebnikov/2021/04/28/jeff-bezos-is-once-again-worth-a-staggering-200-billion/?sh=287e3af24b4e">again</a> late last month in April 2021.



By Giacomo Tognini, Forbes Staff

Jeff Bezos’s India Visit Marked By Probe and Protests

After Briefly Dropping To No. 2, Jeff Bezos Is Again The Richest Person In The World

Unexploded World War II bombs, protests over trees, water and animal habitats, union scrutiny and a labor review have hindered Tesla&#8217;s Berlin Gigafactory plans — but the biggest hurdle may come in the form of strict German regulations.



By Alan Ohnsman, Forbes Staff &amp; Sofia Lotto Persio, Forbes Staff



Tesla had hit its stride in November 2019 when&nbsp;<a href="https://www.forbes.com/sites/alanohnsman/2019/11/12/willkommen-elon-musk-says-next-tesla-gigafactory-will-be-in-germany/?sh=163614f68b03">Elon Musk announced a massive electric car plant in Germany</a>, the heart of European auto-manufacturing. His Silicon Valley company was riding a booming share price fueled by the start of a string of quarterly profits and, more importantly, its Shanghai Gigafactory was coming together at an astonishing pace: It was about to begin making Model 3s just 11 months after the groundbreaking.&nbsp;



Emboldened by that success and cash from an&nbsp;<a href="https://www.ft.com/content/7a3c8d9a-57bb-11e9-a3db-1fe89bedc16e" target="_blank" rel="noreferrer noopener">emissions credit sales deal with Fiat Chrysler</a>&nbsp;to fund it, the carmaker’s billionaire CEO and cofounder aimed to replicate it in leafy Grünheide, Germany, site of the future $4.9 billion (€4 billion) plant 24 miles east of Berlin. “Giga Berlin will come together at an impossible-seeming speed,” Musk&nbsp;<a href="https://twitter.com/elonmusk/status/1287598172508958721?s=20" target="_blank" rel="noreferrer noopener">tweeted</a>&nbsp;in July 2020. It hasn&#8217;t worked out that way.



Physical construction is nearing completion, but the plant may not start making Model Ys until 2022, months after an initial target of July 1–or even later, pending environmental approval from the state of Brandenburg. Tesla has had a much harder road than Musk envisioned. The company had to remove unexploded World War II shells at the site. It’s faced stiff opposition from environmentalists over chopping down hundreds of acres of trees, the plant’s voracious water needs and the disruption of bat and animal habitats. The plant is being <a href="https://www.reuters.com/business/autos-transportation/top-union-sets-sights-works-council-teslas-german-gigafactory-2021-05-07/" target="_blank" rel="noreferrer noopener">eyed for organization by IG Metall</a>, Germany’s biggest labor union. The project is also under scrutiny for a possible <a href="https://finance.yahoo.com/news/authorities-open-labour-probe-german-182635315.html" target="_blank" rel="noreferrer noopener">violation of labor laws during construction</a> and may be fined for installing sewer pipes without permission.



“Although things looked good regarding the Tesla facility up to a few weeks ago, a different reality can lie behind a facade,” says Matthias Schimdt, an independent auto analyst based in Berlin. He sees the project unfolding much like the capital city’s new airport, which was built quickly but saw its opening delayed nearly a decade as it struggled to win final approval to operate from German authorities. “This mustn&#8217;t be a carbon copy situation for Tesla, which is located just a stone&#8217;s throw from the new airport that eventually came into service last year,” Schimdt says. “It just goes to highlight that things aren&#8217;t easy in ‘bureaucratic hell’ Germany.”



Delays fulfilling Musk’s quest to tap the lucrative European market complicate the electric-car impresario’s efforts to stay ahead of mounting competition in battery-powered vehicles, especially from German automakers like Volkswagen, Daimler and BMW. Tesla may be the world’s most valuable carmaker, but it’s far from the biggest, having just a fraction of the production capacity of German, U.S., Japanese and Korean auto giants, delivering just under 500,000 vehicles last year versus VW’s 9.3 million. And while the company’s plant in China was a critical addition to its long-time production base in Fremont, California, Tesla can’t meet Musk’s long-held goal of producing millions of electric vehicles annually without Giga Berlin and a second U.S. auto-assembly plant under construction near Austin, Texas.



<blockquote class="wp-block-quote">“It just goes to highlight that things aren&#8217;t easy in &#8216;bureaucratic hell&#8217; Germany.”<cite>Auto analyst Matthias Schmidt </cite></blockquote>



“Coming off the incredibly fast build of the Shanghai factory, they might have miscalculated how quickly they could get Berlin up and running–perhaps not fully accounting for the significant differences in regulatory and environmental standards,” says Garrett Nelson, senior equity analyst at CFRA Research. Construction also happened amid logistical and supply chain headaches related to the Covid-19 pandemic, he says. “Tesla is doing everything possible to stay on track with its guidance, but the reality is that first production could be delayed until early 2022.”



The company hasn’t confirmed reports that&nbsp;<a href="https://www.marketwatch.com/story/teslas-berlin-gigafactory-to-be-delayed-another-6-months-report-11619992994" target="_blank" rel="noreferrer noopener">Musk agreed to a six-month delay</a>&nbsp;for the plant a few days after reassuring investors and analysts on Tesla’s April 26 results call that “both Texas and Berlin are progressing well.”



“We expect to have initial limited production from those factories this year and volume production from Texas and Berlin next year,” Musk said on the call. But during a surprise visit to the Grünheide construction site&nbsp;<a href="https://www.reuters.com/business/elon-musk-visits-teslas-delayed-european-gigafactory-state-minister-says-2021-05-17/" target="_blank" rel="noreferrer noopener">Monday he told reporters</a>&nbsp;&#8220;I think there could be less bureaucracy. That would be better.&#8221;



&#8220;There should be some kind of active process for removal of rules. Otherwise, over time, the rules will just accumulate and you get more and more rules until eventually you can&#8217;t do anything,&#8221; Musk said, according to Reuters.



Analysts have already adjusted their models for Tesla to reflect the slowdown. “Giga Berlin is an early 2022 story,” says Dan Ives, an equity analyst for Wedbush. “Given the red tape in Europe this timeline remains bumpy but needs to be running by March 2022–otherwise production issues would be hampered.” 



Germany’s role as a global auto powerhouse, with its strong parts supply base and reputation for high-quality engineering, lured Musk over other countries he eyed as sites for Tesla’s European plant. (He&nbsp;<a href="https://www.autoexpress.co.uk/tesla/108395/tesla-gigafactory-europe-to-be-built-in-germany-not-uk-as-elon-musk-blames-brexit" target="_blank" rel="noreferrer noopener">considered the U.K.</a>, but uncertainties related to Brexit ultimately proved too big a gamble.) Aside from selling vehicles in Germany, Tesla planted its flag there in 2016 with the&nbsp;<a href="https://www.forbes.com/sites/alanohnsman/2016/11/08/tesla-buying-germanys-grohmann-engineering-to-automate-accelerate-production/?sh=100c31523354">acquisition of Grohmann Engineering</a>, rebranded Tesla Grohmann Automation. The chance to square off against the country’s auto giants–which are also now aggressively focused on closing the electric vehicle gap with Tesla–on their home turf added to its appeal. For Economics Minister&nbsp;<a href="https://www.bloomberg.com/news/articles/2020-09-02/germany-promises-musk-whatever-he-needs-for-tesla-berlin-plant" target="_blank" rel="noreferrer noopener">Peter Altmaier</a>, Tesla’s decision to “build a highly modern factory for electric cars in Germany is further proof of the attractiveness of Germany as an automotive manufacturing base,” he said when the project was announced in 2019.



Given the headaches he’s run into, Musk may be “wondering whether that ‘Made in Germany’ stamp on the underbody of each model leaving the factory was worth it,” says analyst Schmidt.



Grünheide, in the state of Brandenburg, sits in what was East Germany, which&nbsp;<a href="https://www.pewresearch.org/fact-tank/2019/11/06/east-germany-has-narrowed-economic-gap-with-west-germany-since-fall-of-communism-but-still-lags/ft_19-11-01_eastwestgermanyecon_3/" target="_blank" rel="noreferrer noopener">remains poorer than the rest of the country</a>&nbsp;since reunification 30 years ago. Local politicians were thrilled at the prospect of a project that would bring thousands of jobs and prestige to the area. “The whole region can look forward to new opportunities of development now thanks to the Tesla project which has really put Grünheide on the map globally,”&nbsp;<a href="https://www.gruenheide-mark.de/m/politik/person/31026/pamela-eichmann" target="_blank" rel="noreferrer noopener">Pamela Eichmann</a>, chair of the Grünheide (Mark) local council, told&nbsp;<a href="https://www.dw.com/en/locals-views-on-german-tesla-plant-irreconcilable-as-production-start-faces-delay/a-57405731" target="_blank" rel="noreferrer noopener">Deutsche Welle</a>&nbsp;this month.



While the town’s leaders might be rooting for the factory, plenty of others are not. The plant occupies a space between the A10 highway and Fangschleuse railway station, but it’s also a few miles from the Löcknitztal nature reserve that’s had protected status since 1984 and been registered as a fauna-flora-habitat area (FFH) since 1998. Grünheide literally translates as “Green Heath” from German.



So when one of the first steps to ready the 300-hectare site for Musk’s gigafactory was&nbsp;<a href="https://twitter.com/joergstb/status/1227992011699052545?s=20" target="_blank" rel="noreferrer noopener">chopping down about 430 acres of forest</a>, it wasn’t the best start–particularly for a company whose motto is “accelerating the world’s transition to sustainable energy.”



Environmentalists temporarily blocked tree-cutting operations in early 2020, but Tesla <a href="https://www.cnbc.com/2020/02/21/tesla-gets-german-court-approval-to-chop-down-trees-for-gigafactory-4.html" target="_blank" rel="noreferrer noopener">won court approval,</a> initially to remove 92 hectares of trees, and then 82.8 hectares more. Musk downplayed the quality of the trees he cut down, tweeting in January 2020 that “this is not a natural forest—it was planted for use as cardboard &amp; only a small part will be used for” the Berlin gigafactory. The company has also pledged to <a href="https://www.teslarati.com/tesla-gigafactory-berlin-reforestation-video/" target="_blank" rel="noreferrer noopener">plant three times</a> as many trees as it cut down, though <a href="https://www.zmescience.com/science/agriculture-science/cutting-down-trees-and-planting-new-ones-is-wrecking-the-soil/#:~:text=Continuously%20cutting%20down%20forests%20and,crucial%20minerals%2C%20new%20analysis%20shows.&amp;text=It's%20always%20a%20good%20idea,you%20cut%20some%20old%20ones." target="_blank" rel="noreferrer noopener">scientists generally warn</a> that planting new trees is not as effective as a carbon-capture strategy as maintaining existing ones. Local environmental groups were also concerned about the disruption deforestation would <a href="https://www.loecknitztal.de/home/stellungnahme-zu-tesla/" target="_blank" rel="noreferrer noopener">cause to animals</a> inhabiting the forest. Site preparation in Grünheide <a href="https://www.cleanenergywire.org/news/tesla-searches-bats-and-resettles-ants-preparation-german-gigafactory" target="_blank" rel="noreferrer noopener">included relocating bats and ants</a> living in the forest and removal of <a href="https://www.dw.com/en/germany-defuses-wwii-bombs-at-tesla-gigafactory-site/a-52157407" target="_blank" rel="noreferrer noopener">seven unexploded bombs dropped by the U.S. during World War II</a>.



The amount of water the plant will use and its impact on the region also concern local environmentalists, “because most of the factory ground belongs to a drinking water protection area and very close to the factory are two nature protection areas which are very sensitive to changes in the ground water level,” says Christiane Schroeder, managing director at the Brandenburg branch of NABU (Nature and Biodiversity Conservation Union), one of the oldest and largest environmental non-profits in Germany, and a leading opponent of the Gigafactory.



Making matters worse, Tesla ran afoul of the district’s water authority, which discovered water pipes that had been installed without its permission. Tesla was allowed to continue construction work on April 12 after a brief suspension, but still faces a potential fine for the infraction, the Brandenburg Ministry for Agriculture, Environment and Climate Protection tells&nbsp;Forbes. Separately, the State Office for Occupational Safety and other agencies are&nbsp;<a href="https://finance.yahoo.com/news/authorities-open-labour-probe-german-182635315.html" target="_blank" rel="noreferrer noopener">reported to be investigating whether Tesla violated rules</a>&nbsp;for minimum wages, working hours, conditions and worker housing during plant construction.



Ultimately, the plant won’t be permitted to begin production until it has secured all necessary permits, a process that can grind on, Schmidt says.



<blockquote class="wp-block-quote">“Very close to the factory are two nature protection areas which are very sensitive to changes in the ground water level”<cite>Environmentalist Christiane Schroeder </cite></blockquote>



IG Metall, Germany’s biggest labor union with 2.2 million members, represents workers at Tesla’s engineering unit there and initially&nbsp;<a href="https://www.reuters.com/article/uk-tesla-gigafactory-germany-idUKKBN1XM2M0" target="_blank" rel="noreferrer noopener">welcomed the company’s gigafactory plan</a>. It had previously attempted to organize Tesla’s Grohmann unit, but the company boosted salaries there to block the effort. The union intends to set up a works council and organize future employees at Giga Berlin, union chief Joerg Hofmann&nbsp;<a href="https://www.reuters.com/business/autos-transportation/top-union-sets-sights-works-council-teslas-german-gigafactory-2021-05-07/" target="_blank" rel="noreferrer noopener">told Reuters this month</a>.&nbsp;



That’s anathema to anti-union Musk. In California he’s worked to keep the United Auto Workers out of Tesla’s Fremont plant–a union factory in its previous incarnations as both a Toyota-General Motors joint venture and GM facility. Tesla was found to have&nbsp;<a href="https://www.nlrb.gov/case/32-CA-220777" target="_blank" rel="noreferrer noopener">engaged in unfair labor practices by the National Labor Relations Board</a>, including efforts to interrogate workers it suspected were part of the union push at Fremont. That 2019 ruling was&nbsp;<a href="https://www.washingtonpost.com/technology/2021/03/25/tesla-nlrb-ruling/" target="_blank" rel="noreferrer noopener">upheld in March 2021</a>&nbsp;and Musk was ordered to delete a&nbsp;<a href="https://twitter.com/elonmusk/status/998454539941367808?s=20" target="_blank" rel="noreferrer noopener">2018 tweet</a>&nbsp;discouraging Fremont workers from joining the UAW. (He has yet to do so.)



For now, IG Metall is waiting for operational details for the Grünheide facility, including whether Tesla intends to follow the round-the-clock, three-shift approach used in the U.S. and China, and adhere to German wage and working condition rules. “We give Tesla the benefit of the doubt regarding what the labor standards will look like in the long run,” says Birgit Dietze, IG Metall’s regional head. 



Long-time China auto analyst (and Tesla owner) Michael Dunne, whose ZoZo Go consultancy works with auto and parts makers across Asia, thinks Tesla’s exceptionally fast start in China led it to move too quickly in Germany. “I imagine Tesla thinking something like, ‘China is rife with regulations, licenses and government intervention, but we sorted that out in less than a year. Bring on Berlin!” he says. Powerful government allies eased the way for Tesla in China, that’s not an option in Germany, Dunne says. “One’s a democracy, the other one’s not. It’s rule by whim in China. Unlike in Germany, there&#8217;s no court of public opinion.”



<blockquote class="wp-block-quote">“I imagine Tesla thinking something like, ‘China is rife with regulations, licenses and government intervention, but we sorted that out in less than a year. Bring on Berlin!”<cite>Zozo Go founder Michael Dunne </cite></blockquote>



In Germany, groups like Schroeder’s NABU have a right to make their opposition known. The environmental activist tells&nbsp;Forbes&nbsp;the group has discussed their concerns with Tesla, but that the company has only been receptive to some of the issues raised, the easiest to accommodate. “I think Elon Musk is more into his own business and into new technology than really in preventing climate change,” she says. “He sees a great opportunity to sell his inventions as ‘part of the solution’ but doesn’t realize that he creates new problems as a side effect.”&nbsp;



In retrospect, Musk might have been better off building the plant in adjacent EU countries, says analyst Schmidt. “Perhaps they are slowly starting to ask themselves if they really should have looked just a few kilometers further east toward the Polish or Czech borders, where things would have have been more freewheeling,” he says. “There’s good reason Porsche decided to manufacture the Cayenne SUV–one of their most profitable models–in Slovakia!” &nbsp;

gettyimages-490597722-594×594

The Rules Even Elon Musk Can’t Break

TOPLINE Billionaire Tesla CEO Elon Musk stirred up the cryptocurrency market with his Twitter account again Sunday when he appeared to hint Tesla would cast out its bitcoin holdings, a move that saw the cryptocurrency plunge.



<h3 class="wp-block-heading" id="h-key-facts">KEY FACTS</h3>



When a Twitter user&nbsp;<a href="https://twitter.com/CryptoWhale/status/1393981793813078017?s=20" target="_blank" rel="noreferrer noopener">speculated</a>&nbsp;Sunday Musk would ditch bitcoin over the hate the billionaire had received after announcing Tesla would&nbsp;<a href="https://www.forbes.com/sites/joewalsh/2021/05/12/tesla-will-stop-accepting-bitcoin-as-payment-due-to-environmental-worries-musk-says/">no longer accept the cryptocurrency</a>&nbsp;as payment last week, Musk replied with one word: “<a href="https://twitter.com/elonmusk/status/1394001894809427971?s=20" target="_blank" rel="noreferrer noopener">Indeed</a>.”&nbsp;



The vague message was enough to push cryptocurrency investors to sell off their bitcoin, and the price dipped nearly 8.5% down to $44,395 a coin Sunday.



Cryptocurrency is notoriously volatile, but Sunday’s dip was bitcoin’s biggest slump in more than three months and represented one of its biggest drops in value since the price first began to rapidly ramp up in January.&nbsp;



Last week, Musk said Tesla would no longer accept the cryptocurrency until bitcoin, which requires colossal amounts of electricity to work with, shifts to&nbsp;<a href="https://twitter.com/elonmusk/status/1392602041025843203" target="_blank" rel="noreferrer noopener">more sustainable energy use</a>,



Musk said at the time Tesla would not sell off the bitcoin it already had.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">Indeed&mdash; Elon Musk (@elonmusk) <a href="https://twitter.com/elonmusk/status/1394001894809427971?ref_src=twsrc%5Etfw">May 16, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<h2 class="wp-block-heading">BIG NUMBER</h2>



$1.5 billion. That’s how much Musk spent on buying bitcoin just&nbsp;<a href="https://www.cnbc.com/2021/02/08/tesla-buys-1point5-billion-in-bitcoin.html" target="_blank" rel="noreferrer noopener">three months ago</a>, in preparation for using the cryptocurrency at Tesla.



<h2 class="wp-block-heading">SURPRISING FACT</h2>



Running bitcoin uses&nbsp;<a href="https://www.bbc.com/news/technology-56012952" target="_blank" rel="noreferrer noopener">more electricity</a>&nbsp;than some countries, according to a University of Cambridge study published in February. Researchers said the cryptocurrency burns through 121.36 terawatt-hours annually, roughly the equivalent of used by countries like&nbsp;<a href="https://www.bbc.com/news/technology-56012952" target="_blank" rel="noreferrer noopener">Argentina and Norway</a>.



<h3 class="wp-block-heading">KEY BACKGROUND</h3>



Just two months ago,&nbsp;<a href="https://www.forbes.com/sites/roberthart/2021/03/24/bitcoin-surges-as-elon-musk-says-it-can-be-used-to-buy-teslas/?sh=4e37216b3cb2">bitcoin prices soared</a>&nbsp;when Musk announced Tesla would accept the cryptocurrency as payment for Tesla’s pricey electric vehicles. Musk’s quick reversal last week to suspend Tesla bitcoin payments and the cryptocurrency’s loss of value soon after angered many bitcoin investors, who said the billionaire was&nbsp;<a href="https://twitter.com/PeterMcCormack/status/1393971202738302986?s=20" target="_blank" rel="noreferrer noopener">misinformed</a>&nbsp;about bitcoin’s energy consumption. Musk has&nbsp;<a href="https://twitter.com/elonmusk/status/1393995872413888518?s=20" target="_blank" rel="noreferrer noopener">bickered</a>&nbsp;with and&nbsp;<a href="https://twitter.com/elonmusk/status/1393246529498976258?s=20" target="_blank" rel="noreferrer noopener">made fun of</a>&nbsp;the bitter investors on Twitter in recent days.



<h3 class="wp-block-heading">TANGENT</h3>



Musk is no stranger to playing the cryptocurrency market with his tweets. His current cryptocurrency of choice, <a href="https://www.forbes.com/sites/roberthart/2021/05/14/dogecoin-stages-a-comeback-amid-cryptos-300-billion-crash-soaring-30-as-elon-musk-and-coinbase-signal-confidence/?sh=258f1752672f">dogecoin</a>, is regularly boosted by the eccentric CEO’s Twitter memes and public enthusiasm. 



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<blockquote class="twitter-tweet" data-width="500" data-dnt="true">👀&mdash; Elon Musk (@elonmusk) <a href="https://twitter.com/elonmusk/status/1383103246470811652?ref_src=twsrc%5Etfw">April 16, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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<h3 class="wp-block-heading">FURTHER READING</h3>



<a href="https://www.forbes.com/sites/joewalsh/2021/05/12/tesla-will-stop-accepting-bitcoin-as-payment-due-to-environmental-worries-musk-says/?sh=39f2924f6e9f">Tesla Will Stop Accepting Bitcoin As Payment Due To Environmental Worries, Musk Says</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/alanohnsman/2021/05/12/elon-musk-says-tesla-stops-accepting-bitcoin-for-car-purchases-due-to-carbon-energy-use/?sh=34e39d386f85">Bitcoin Tanks After Elon Musk Says Tesla Stops Accepting It Due To Carbon Energy Use</a> (Forbes)



by Carlie Porterfield, Forbes Staff

Tag: Billionaires

FORBES AFRICA SOCIAL MEDIA