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Why this former Starbucks exec quit a CEO job to launch a startup



As a teenager, former Starbucks executive Adam Brotman found inspiration in an unlikely place: a Costco parking lot. In 1982, his uncle, Jeff Brotman, co-founded the chain of big-box retail stores with James Sinegal — and when Brotman turned 16, he was recruited to organize shopping carts at the store’s first location in Seattle. 

Brotman, who would later serve in top leadership roles at Starbucks and J. Crew, credits that first job with sparking the entrepreneurial spirit that landed him in business.

“Even when I was pushing carts outside in the rain, watching my uncle and Jim build this iconic company up close set the bar high for success,” the 52-year-old tells CNBC Make It. “It created the aperture for how I would view success.” 

The Seattle native started his career as a lawyer but quit his practice at 27 to launch in-store entertainment services company PlayNetwork. After several stints at other companies, Brotman joined Starbucks in 2009. 

What he learned from working at Starbucks

If you’ve ever used Starbucks points to snag a free latte or ordered on the app, you can thank Brotman. He spent nearly a decade as Starbucks’s chief digital officer and EVP of global retail operations building its rewards program and digital platforms. 

The Starbucks app is considered a gold standard for franchises. As of April, mobile transactions make up more than 25% of all Starbucks orders in the United States. But Brotman didn’t launch the app as a final, completed project. First, Starbucks launched the loyalty and payment features, then later added the functionalities for ordering and marketing. “The app wasn’t an overnight success,” he notes. “We were constantly improving and changing things based on customer feedback.” 

Building the mobile order feature was the “most complicated” part of creating the app, according to Brotman, and involved several large teams including marketing, payment strategy and operations. That process taught Brotman the importance of aligning on a common goal, to make collaboration run smoother, and a creative tactic to problem solve.

“There was a windowless conference room behind my office at Starbucks, and I asked our maintenance staff if we could paint all the walls with whiteboard material,” he recalls. “Each week all the teams would meet together in that war room and we would cover every single inch of that room with ideas to improve the app.” 

‘I decided it was time to stretch myself’

One would expect Brotman to build on his successes at Starbucks, either by staying in his role there or pursuing a similar job at another Fortune 500 company. Instead, he left Starbucks in 2018 to join J.Crew, where he was president and co-CEO, a leap not motivated by a love for fashion but for New York, where the company is based. 

“My wife and I always wanted to live in New York, ‘the center of the universe,'” he says. “I decided it was time to stretch myself a bit by putting myself in an uncomfortable, new situation, and I was excited to apply some of the lessons I learned at Starbucks to a different iconic, American brand.” 

Brotman only stayed at J.Crew for a year, which he spent launching the brand’s loyalty program in hopes of replicating some of the digital innovation he brought to Starbucks. He wanted to create a mobile app for the brand and improve its personalized marketing, but he says those projects “weren’t prioritized” by the team. Then, Brotman had a revelation: a lot of businesses were not taking advantage of data in the way that Starbucks had to personalize their marketing and user experience, in turn strengthening their relationship with customers. 

Returning to Seattle and start-ups

Homesick for Seattle and itching to be entrepreneurial again, Brotman moved back to Washington. It was there that Starbucks CEO Kevin Johnson introduced him to Jon Shulkin, the chairman of Eatsa, a fully automated fast-food chain in California. The pair wanted to transform the struggling start-up into a software platform that helps other consumer brands, restaurant and retail chains digitize their businesses. 

Johnson and some of the venture capital sponsors recruited Brotman to lead the company’s relaunch as Brightloom. In 2019 Brotman became the CEO of the Seattle-based (and Starbucks-backed) start-up, where he and his team are building software that helps smaller businesses use tools like digital ordering and personalized marketing. Starbucks also licensed its mobile and loyalty program technology to Brightloom so its customers can use it for their own businesses. 

The challenge of running a start-up was compounded by the coronavirus pandemic. When Brightloom’s office lease expired at the start of the crisis, Brotman decided he and his 51 employees should switch to permanent remote work, a process he calls “odd and scary, but also wonderful.” 

Brightloom’s business also received a boost from the pandemic as most businesses had to go online to connect with customers. “It’s caused businesses to have a heightened sense of urgency to figure out how to have a better digital relationship with their customers,” Brotman adds. According to Crunchbase, Brightloom has raised more than $45 million in funding.

To go from working in the C-Suite of some of the world’s most recognizable brands to leading a small, relatively unknown start-up is surprising, to say the least. But as he was climbing the corporate ladder, Brotman realized that for him, happiness and career fulfillment didn’t match up with traditional definitions of success. 

“Even back when I was a teenager, I’ve always gotten so much energy out of trying to solve a problem and build something new, which is what start-ups are all about,” he says. “That energizes me so much that sometimes I even forget the existential angst of working at a start-up.”

Of course, taking a risk and switching careers can be a lot more intimidating when you’re not in Brotman’s position, and don’t have millions of dollars in financial backing, or the leaders of Starbucks and Costco as mentors. But the CEO hopes he can encourage others to be a little bolder in their careers. 

“Think about professional tennis players — they must master their serve, backhand, forehand, and net play before they can be the best,” he says. “Start with an end goal in mind, then break down the craft into its component parts … and make sure you have the intellectual curiosity and commitment to each step of the learning process.”

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WHO calls special meeting to discuss new Covid variant from South Africa with ‘large number of mutations’



RT: Maria Van Kerkhove, Head a.i. Emerging Diseases and Zoonosis at the World Health Organization (WHO), speaks during a news conference on the situation of the coronavirus at the United Nations in Geneva, Switzerland, January 29, 2020.

Denis Balibouse | Reuters

The World Health Organization is monitoring a new variant with numerous mutations to the spike protein, scheduling a special meeting Friday to discuss what it may mean for vaccines and treatments, officials said Thursday.

The variant, called B.1.1.529, has been detected in South Africa in small numbers, according to the WHO.

“We don’t know very much about this yet. What we do know is that this variant has a large number of mutations. And the concern is that when you have so many mutations, it can have an impact on how the virus behaves,” Dr. Maria Van Kerkhove, WHO’s technical lead on Covid-19, said in a Q&A that was livestreamed on the organization’s social media channels.

The monitoring of the new variant comes as Covid cases surge around the world heading into the holiday season, with the WHO reporting hot spots in all regions and particularly in Europe.

South African scientists have detected more than 30 mutations to the spike protein, the part of the virus that binds to cells in the body, South African scientist Tulio de Oliveira said in a media briefing hosted by the South Africa Department of Health on Thursday.

The B.1.1.529 variant contains multiple mutations associated with increased antibody resistance, which may reduce the effectiveness of vaccines, along with mutations that generally make it more contagious, according to slides he presented at the briefing. Other mutations in the new variant haven’t been seen until now, so scientists don’t yet know whether they are significant or will change how the virus behaves, according to the presentation.

The variant has spread rapidly through the Gauteng province, which contains the country’s largest city of Johannesburg. 

“Especially when the spike happens in Gauteng, everybody travels in and out of Gauteng from all corners of South Africa. So it’s a given that in the next few days, the beginning of rising positivity rate and numbers is going to be happening. It’s a matter of days and weeks before we see that,” South Africa Minister of Health Joe Phaahla said during the briefing.

The variant has also been detected in Botswana and Hong Kong, Phaahla said. 

“Right now, researchers are getting together to understand where these mutations are in the spike protein and the furin cleavage site, and what that potentially may mean for our diagnostics or therapeutics and our vaccines,” Van Kerkhove said. She said there are fewer than 100 full genome sequences of the new mutation.

The virus evolution working group will decide if B.1.1.529 will become a variant of interest or a variant of concern, after which the WHO would assign the variant a Greek name, Van Kerkhove said.

“It’s really important that there are no knee-jerk responses here, especially with relation to South Africa,” Dr. Mike Ryan, executive director of the WHO’s emergencies program, said.

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SynBiotic pops as new German government pledges make weed legal



Canopy Growth

Tom Franck | CNBC

Shares of German cannabis company SynBiotic rose sharply on Thursday shortly after the incoming government pledged to make the drug legal.

The Munich-based company’s shares were up 33% to 29 euros ($33) on the Frankfurt stock exchange. The company now has a market cap of over 100 million euros.

A deal was reached on Wednesday between the center-left Social Democratic Party, the Greens and the Free Democratic Party that will see them govern together in a three-way coalition for the first time. The so-called “traffic light” coalition agreed on plans to legalize the sale of cannabis for recreational use to adults in licensed shops.

Led by Lars Muller, SynBiotic wants to use cannabis compounds to treat conditions like chronic pain, stress and sleep issues. Cannabis has a number of negative side effects depending on its strength, the frequency it is taken and the individual.

Tech investor Christian Angermayer told CNBC via email Thursday that he owns 45% of SynBiotic’s shares.

“The biggest profiteer [of German cannabis legalization] is my cannabis platform company SynBiotic, which is the only German listed cannabis company — and one of the biggest ones in general,” Angermayer said.

Angermayer has invested in a company called ATAI, which is trying to develop drugs that can be used to treat mental health conditions. ATAI’s shares popped 40% on its Wall Street debut in June but they’ve since halved in value.

Alexander Galitsa, an analyst at investment bank Hauck and Aufhauser, wrote in a note to clients on Thursday that the German cannabis market is poised for “explosive growth” in the coming years.

Galitsa pointed to studies that suggest cannabis legalization could generate between 3.4 billion euros and 4.7 billion euros of annual tax revenue, while also creating an estimated 27,000 new jobs.

“Evidently, this is excellent news for SynBiotic who has already established a strong position in the European cannabinoid market and especially in Germany,” he said.

“Thanks to its first-mover advantage in Germany and a broad coverage of the value chain, SynBiotic is ideally positioned to benefit from the regulatory changes and to establish itself as the European market leader,” Galitsa added.

Recreational use of cannabis in Canada was legalized in late 2018 and the annual revenue has already exceeded 2 billion euros, Galitsa said, before adding that Canada is home to significantly fewer people.

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Enel CEO skeptical of carbon capture and storage technology



The CEO of multinational Italian energy firm Enel has expressed doubt on the usefulness of carbon capture and storage, suggesting the technology is not a climate solution.

“We have tried and tried — and when I say ‘we’, I mean the electricity industry,” Francesco Starace told CNBC’s Karen Tso on Wednesday.

“You can imagine, we tried hard in the past 10 years — maybe more, 15 years — because if we had a reliable and economically interesting solution, why would we go and shut down all these coal plants [when] we could decarbonize the system?”

The European Commission, the EU’s executive arm, has described carbon capture and storage as a suite of technologies focused on “capturing, transporting, and storing CO2 emitted from power plants and industrial facilities.”

The idea is to stop CO2 “reaching the atmosphere, by storing it in suitable underground geological formations.”

The Commission has said the utilization of carbon capture and storage is “important” when it comes to helping lower greenhouse gas emissions. This view is based on the contention that a substantial proportion of both industry and power generation will still be reliant on fossil fuels in the years ahead.

Read more about clean energy from CNBC Pro

Enel’s Starace, however, seemed skeptical about carbon capture’s potential.

“The fact is, it doesn’t work, it hasn’t worked for us so far,” he said. “And there is a rule of thumb here: If a technology doesn’t really pick up in five years — and here we’re talking about more than five, we’re talking about 15, at least — you better drop it.”

There are other climate solutions, Starace said. “Basically, stop emitting carbon,” he said.

“I’m not saying it’s not worth trying again but we’re not going to do it. Maybe other industries can try harder and succeed. For us, it is not a solution.”

Carbon capture technology is often held up as a source of hope in reducing global greenhouse gas emissions, featuring prominently in countries’ climate plans as well as the net-zero strategies of some of the world’s largest oil and gas companies.

Proponents of these technologies believe they can play an important and diverse role in meeting global energy and climate goals.

Climate researchers, campaigners and environmental advocacy groups, however, have long argued that carbon capture and storage technologies prolong the world’s fossil fuel dependency and distract from a much-needed pivot to renewable alternatives.

Plans to increase shareholder dividends

Starace was speaking after Enel published a strategic plan for 2022-24 and laid out its aims for the years ahead. Among other things, Enel will make direct investments of 170 billion euros ($190.7 billion) by 2030.

Direct investments in renewable energy assets that Enel will own are set to hit 70 billion euros. Consolidated installed renewable capacity, or capacity that is directly owned by Enel, is expected to reach 129 gigawatts by 2030.

In addition, Enel, which is headquartered in Rome, said it had brought forward its net-zero commitment — a goal which relates to both direct and indirect emissions — to 2040, having previously been 2050.

On the fossil fuel front, the group wants to exit coal generation by the year 2027, with its exit from gas generation taking place by 2040.

Enel also said that, between 2021 and 2024, shareholders were “expected to receive a fixed Dividend Per Share … that is planned to increase by 13%, up to 0.43 euros/share.”

During his interview with CNBC, Starace was asked about Enel’s higher dividend forecast and the wider debate about how one could be invested in so-called “sin stocks” — in this instance, big polluters within the energy space — and still get good returns, particularly on the dividend side of things.

“It’s all about risk rewards,” he said. “And at the end of the day, I don’t see anything wrong with an increasingly risky business [being] … forced to increase dividends if you want to attract investors.”

“What we’re trying to say is there is a breaking point, there is a point in which the risk becomes unbearable no matter what dividends you want to distribute, and that is approaching,” he said.

“So in our case, what you need to do is get out of this risk, get out of the carbon footprint and also make sure that when you put the word ‘net’ in front of zero, this ‘net’ doesn’t become some kind of a trick around which you don’t decarbonize, really, your operations.”

“We’re saying we’re going to be zero carbon, which means we’re not going to emit carbon and we will, therefore [not] … need to plant trees to offset that carbon.”

Starace acknowledged, however, that trees would be required over the next centuries to remove carbon left in the atmosphere due to historic emissions.

—CNBC’s Sam Meredith contributed to this article.

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