 |
|
|
|||||
Factory activity shrank in much of the world last month, private surveys showed on Wednesday, as signs of a slowdown in U.S. growth and the anticipated impact of President Donald Trump’s tariffs added to pressure from weak Chinese demand. Euro zone manufacturing slipped back into contraction as new orders fell at their fastest rate in six months, with export markets acting as a particular drag, signalling that the recovery in the region’s industrial sector was fragile. The HCOB Eurozone Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, fell to 49.8 in September from August’s 50.7, which was the first reading above the 50.0-point line denoting growth since mid-2022. “The drop in the PMI is showing up across the board, with respective figures for consumer goods, capital goods and intermediate goods all down on the month,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. Surveys revealed a split across the currency union with the Netherlands leading the expansion with activity at a 38-month high while growth continued in Greece, Ireland and Spain. Meanwhile, the bloc’s three largest economies Germany, France and Italy all registered contractions. In Britain, outside the European Union, activity shrank at the fastest pace in five months, reflecting subdued domestic demand and fewer export orders, painting a more downbeat picture than recent official data. In Asia, the stress on manufacturers highlights the challenge policymakers face in protecting their export-reliant region from higher U.S. levies, a key policy of the Trump administration that has upended the global trade order and put the brakes on economic growth. Export powerhouse Japan and global tech hub Taiwan saw manufacturing activity shrink in September, the surveys showed, leaving businesses in Asia heavily dependent on the U.S. market on a fragile footing. Worryingly, China, a key engine of the global economy, also remained in the doldrums. An official survey released on Monday showed manufacturing activity in the world’s second-biggest economy contracted for a sixth month in September, dragged down by weak consumption and the squeeze from U.S. tariffs. The prolonged slump underlines the twin pressures on China’s economy: Domestic demand has failed to mount a durable recovery in the years since the coronavirus pandemic, while Trump’s tariffs have squeezed Chinese factories as well as overseas firms that buy components. “The September PMI readings for most countries in Asia remained weak and we continue to expect manufacturing activity in the region to struggle in the near term,” said Shivaan Tandon, emerging markets economist at Capital Economics. “With growth set to soften and inflation likely to remain contained, we expect central banks in Asia to loosen policy further.” The S&P Global Japan Manufacturing PMI fell to 48.5 in September from 49.7 in August, staying below the 50.0 threshold. It shrank at the fastest pace in six months due to steep falls in output and new orders, the survey showed. Taiwan’s manufacturing PMI fell to 46.8 last month. Factory activity also shrank in the Philippines and Malaysia, the private surveys showed. By contrast, South Korea’s factory activity expanded for the first time in eight months underpinned by improving overseas demand. The manufacturing PMI in Asia’s fourth-largest economy, released by S&P Global, rose to 50.7 in September, moving above the 50-mark for the first time since January 2025. The outlook for South Korea’s exporters, however, hinges on negotiations to formalise a July deal aimed at reducing U.S. tariffs on Korean goods imports including automobiles to 15% from 25% in return for South Korea’s investment of $350 billion in the U.S. The talks have stalled due to Seoul’s concerns over foreign exchange implications. India’s manufacturing sector expansion lost some momentum and slipped to its weakest pace in four months, suggesting Washington’s punitive 50% tariffs on its goods could be starting to hurt Asia’s third-largest economy. Jonathan Cable and Leika Kihara, Reuters
Category:
E-Commerce
Discontent has surged across U.S. society, largely defined the last three presidential elections, and now appears set to challenge business owners in the workplace. The rising sense of grievance expressed across all demographic groups has reached new highs, according to a new survey, with both companies and their CEOs suffering some of the biggest drops in trust among respondents. The rising tide of acrimony and accusation recorded in the 25th Annual Edelman Trust Barometer shouldnt be too surprising for anyone who followed the November election campaignsor who just listens to conversations in the office and shop floor. Whether it was Democrats warning of a fascist threat to democracy or Republicans complaining about woke reverse discrimination, the expression of victimized resentment has grown ever louder within American discourse in recent years. And it doesnt just apply to politics. Nearly 60 percent of U.S. respondents to the new Edelman poll reported their sense of grievance against business, government, and the rich is moderate or higher than before, which is generating some worrying consequences.The U.S. figure is only slightly below the average 61% grievance expressed by the 33,000 people Edelman questioned in its global survey. The key drivers of that sentiment were perceptions that companies and governments make decisions that negatively affect most people while only serving a select few. That figured into the wider prevailing view that political and economic systems are structured to favor the richwho were said to grow wealthier from those arrangements all the time. Not surprisingly, that resulting distrust of governments, businesses, and media was expressed in larger numbers by lower and modest-earning people than affluent participants. Meanwhile, nearly two-thirds of respondents said the threat of discrimination has increased since 2024, including 14% more whites in the U.S. expressing that view compared to last yearthe largest increase the poll recorded. Fears of job losses were also higher in the 2025 survey, with 62% of global participants citing artificial intelligence (AI) and globalization as top threats. Only a third of worldwide participants thought the situation would be better for following generations, with just 20% believing the once prevalent belief that things would continue improving in the future. Those varied sources of disgruntlementand feelings of injusticewere linked to the surveys most disturbing finding. Fully 40% of people said they approved of of hostile activism to drive change. That included attacking people online, intentionally spreading disinformation, threatening or committing violence, and damaging public or private property if that served to attain a desired outcome. That belief was highest among people aged 18 to 34 at 53%, with 41% of those in the 35-to-54-year bracket also agreeing. That represents a large percentage of society now thinking those means justify the ends they seeka sentiment made clear following the murder last month of UnitedHealthcare CEO Brian Thompson. Much of that may sound characteristic of the domestic and international political conflicts that led to the 2021 storming of Congress or countless protests of the violence between Israel and Palestinians. But the wider atmosphere of rising grievance in which those occurred has now become a concern that business owners need to prepare forand be able to respond to if it arises in their workplaces. Should that happen, it may make difficulties adjusting to the reportedly challenging attitudes of many Gen Z employees seem quaint. The reason: With both views of business competence and ethics plunging to below 50% between 2020 and 2025, the increasing groan of grievance may grow louder and more defiant over time, possibly aired directly at company managers and owners. Thats why leaders need to prepare for the eventuality. (People) with a higher sense of grievance are more likely to believe that business is not doing enough to address societal issues, the Edelman report said. To navigate these expectations, understand where you have obligations, act on behalf of your stakeholders, and advocate for your organization. That margin for companies to respond positively to what may outwardly seem to be social complaints is created by a contradiction in the survey’s findings. While it established that trust in business has continued to dropwhile grievances significantly increasethat rising unhappiness also reflects expectations for companies do something to resolve the problems employees see as sources of discontent. For example, grievance levels were particularly high regarding companies not going far enough to address issues like climate change, cost of living affordability, discrimination, and retraining as jobs come under threat from AI and other tech. At the same time, while distrust in all CEOs increased, it was limited when participants were asked about their own bosses. Still, as Edelman CEO Richard Edelman points out, that rising volume of grievance is increasingly likely to be voiced in the workplace as it spreads. When it does, companies and managers will need to be ready to offer positive responsesawaiting the necessary remedial actions from other social, economic, and governmental institutions also being held responsible. “Business is facing backlash from those opposing its role as a catalyst for societal change,” said Edelman. “Moving back from a grievance-based society will require a cross-institution effort to address issues like information integrity, affordability, sustainability, and the future of AI. According to the surveys analysis, that can only come from business, government, media, and NGOs addressing the core causes behind rising grievances, with reactions that nurture broad-based trust, growth, and prosperity. By Bruce Crumley This article originally appeared on Fast Company‘s sister publication, Inc. Inc. is the voice of the American entrepreneur. We inspire, inform, and document the most fascinating people in business: the risk-takers, the innovators, and the ultra-driven go-getters that represent the most dynamic force in the American economy.
Category:
E-Commerce
Last week, two Andreessen Horowitz (a16z) LP decks leaked to Newcomer. As far as I (and Google and ChatGPT) can tell, this is only the second time ever that internal Andreessen Horowitz documents have leaked. The firm is notoriously secretive. I am much too humble and my fund is much too insignificant to seriously believe that my Substack from September 3Andreessen Horowitz is not a Venture Capital Fundand its subsequent republishing on Fast Company could possibly have annoyed the Sand Hill Road behemoth so much that it decided to leak its own LP deck for the first time in history. But you gotta love the timing. Regardless of why the decks were leaked or by whom, the data they contain is a rare look at how the firm has evolved. I spent some time yesterday afternoon trying to piece together a picture of a16zs profits, based on whats publicly known, and the new data that leaked. I hesitate to share them in full because any detailed conclusion requires too many assumptions to be useful. But I will tell you three indisputable takeaways from my analysis: Andreessen has made a lot of money for its investors. Andreessen has made a lot of money for itselfby my calculations, somewhere between a third and half of what its returned to all of its investors combined. A very sizable chunk of its revenue has been from management feesat least 25%, likely a lot more. Which brings me back to the post I had been planning to share this week before the leak: The disruption of venture capital Three years ago, I wrote a piece titled, A great disruption is coming for venture capital. For context, after graduating business school, I worked with Clayton Christensenthe man who developed the theory of disruptive innovation, whom I also studied under while at Harvard. His body of work is among the most impactful in the history of management science, because it predicts why and how massively successful companiesthe incumbents in an industrycan make all the right, rational strategy decisions, only to be disrupted by lower-cost, higher-access upstarts. As you might imagine, working for the guy shaped how I see the world to this day. Even before I started VC investing, I realized venture capital was on a predictable path to disruption. Looking at venture through Christensens lens, I saw big funds moving upmarket, leaving the door open to disruptors (in this case, smaller emerging funds) to eat the category from the bottom up. Key to the theory of disruptive innovation is the idea that incumbents are incentivized to focus on their most profitable customers, in order to capture more revenue and higher margins. In doing so, they leave their less profitable customers for the taking. Upstarts come in with a right-sized alternative, and get better over time, until all or most customerseven the biggest, most profitable onesflock to them. This is how incumbents get disrupted. This is how I recently realized that one key part of my initial analysis was wrong. I wasnt wrong at the headline level: Incumbent VC funds (aka megafunds) are absolutely getting disrupted. I was wrong about who their customer is. As an early stage VC, I believe the founder is my customer. If I do right by them, Ill be massively successful in the long term. This is how I run my fund to this day, and its the lens through which I published the original disruption of venture capital essay. But after raising my own funds, Ive come to realize that, when it comes to how VCs make money, the founder is not the customerthe limited partners (LP) or the people and institutions that invest in VC funds are. Which means that incumbent funds arent moving upmarket because theyre chasing their most profitable founderstheyre moving upmarket because theyre chasing their most profitable LPs. How Andreessen Horowitz makes money Lets go back to the leaked decks. a16zs most recently announced fund from earlier this year claimed $7.2 billion of assets under management. Assuming standard VC terms (2% fee, 1% stepped down fee, 10 year fund term), a16z would make $144 million per year in fees alone during the investment period, and half of that amount every year after that until the end of the fund cycle. If you add up the fees a16z is earning from every one of its reported funds, assuming the standard VC terms above, then this year it stands to make about $700 million in fees alone. Given the limitations of the data that leaked, its hard to tell how much it makes in carry (its mixed in with recycled capital in the slide). But, needless to say, it is a lot of money. Andreessen Horowitz is now reportedly raising a $20 billion fund. If successful, this new fund will net the firm another $400 million per year on fees alone during the investment period. In other words: The bigger the fund, the bigger the fees. As you raise more funds, the fees accumulate. Its a sweet business model. I mean this honestly: Can you blame these guys for chasing the biggest LPs and pitching increasingly gigantic funds, considering how much they stand to make here? Thats why they keep inventing new strategies to absorb and deploy more and more capital. Because you cant cost-effectively deploy $20 billion in small, high alpha, early stage rounds. It needs to deploy big numbers. So that it can raise even bigger funds. And this is exactly what incumbents moving upmarket looks like. Literally a textbook example. I wish Clay were still alive so I could talk to him about it. What Christensen would say happens next As incumbents move upmarket, they leave the bottom of the market ripe for disruption. Small funds, disciplined early stage investors, and emerging managers are the ones filling the gap. Because of our fund sizes, fees are tinythis sector of the market makes money off the carry, not the fee, in perfect alignment with our LPs, which our LPs also love. The best of these disruptive managers are hungrier, more aligned, nd structurally motivated to find alpha-rich founders and ideasexactly what LPs want. Over time, more and more LPs will realize this, and will add a pocket for new VC to their portfolios. These upstart funds will thrivehistorically, smaller and emerging funds return way more to their investors. And eventually, this emerging layer of investors will become the true, new venture capital industry. The megafunds will continue to make money, right up until the opportunity to deploy it profitably in gigantic pre-IPO megarounds disappears. Theyll be competing with large asset allocators, not only for deals, but more critically, for LP dollars. At that point, theyll have a choice. They can fully morph into asset managers, more like banks and hedge funds; they can try to disrupt from within; or they can join the ranks of bygone incumbents of yore. Why this matters I wrote about this last time more at length, but its worth revisiting. As megafunds move upmarket, their deployment strategy doesnt resemble venture capital anymoretheyre making large consensus bets and competing away the alpha. If youre a non-consensus founder planning to pitch consensus funds, my advice is just to know before you go, and dont be discouraged by the outcome. Find true VC fundsearly, non-consensus, founder-firstand prioritize pitching there. And dont take your eye off your traction. If youre a VC investor, know your strategy and stick to it. Alpha is being eaten away by consensus firms. If you dont have the assets under management (AUM) to compete at that level, discipline and focus are key. And finally, if youre an LPknow what youre investing in. If your VC portfolio is all consensus funds, Id venture to say you no longer have true, alpha-seeking VC exposure. Thats why more and more LPs are starting to shape an emerging fund strategysmaller allocations by design, just like their original VC portfolio from 20 to 30 years ago, before todays incumbents morphed into megafunds.This article was originally published in Leslie Feinzaigs Venture With Leslie newsletter.
Category:
E-Commerce
All news |
||||||||||||||||||
|
||||||||||||||||||