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<ul class="summary-list"><li>Adtech startups face leadership changes as investors demand growth and profitability.</li><li>Private-equity firms are looking for adtech startups to achieve scale.</li></ul>Close observers of the adtech industry will have noticed there's been a heap of change in the upper ranks of the sector's startups in recent months — especially those <a target="_blank" class="" href="https://www.businessinsider.com/private-equity-firms-investing-in-advertising-and-marketing-companies-2024-3">financed by private equity</a>.<a target="_blank" class="" href="https://www.xr.global/press-releases/xr-announces-strategic-leadership-changes-to-accelerate-growth">Louisa Wong stepped down</a> as chief executive of Gamut Capital-owned XR Xtreme Reach in August. She was replaced in the interim by Chandler Bigelow, the company's chief financial officer. Doug Knopper, an investor in the company, was appointed executive chairman, while adtech veteran Jo Kinsella was promoted to global president and chief operating officer.In July, <a target="_blank" class="" href="https://www.adexchanger.com/online-advertising/triplelift-ceo-dave-clark-abruptly-exits-after-setting-the-ssp-on-a-new-trajectory/">Dave Clark left his role as chief executive of Triplelift</a>. His responsibilities were split among an "office of the CEO," led by Eric Roza, a managing director at its lead investor, Vista Equity.At the turn of the year, <a target="_blank" class="" href="https://www.axios.com/pro/media-deals/2024/01/04/videoamp-ceo-out-layoffs">VideoAmp CEO Ross McCray exited</a>, passing the reins to board member and investor Peter Liguori, now executive chairman. <a target="_blank" href="https://www.axios.com/2024/10/01/videoamp-media-measrement-nielsen-sale">Axios reported this month, citing multiple sources, that the company is now pursuing a sale</a>, with its investor Vista Credit Partners reportedly leading some of those discussions.Each of the changes comes with its own company-specific nuance, but experts said there are broader industry trends that link them. Those experts — bankers, adtech executives, and consultants — told Business Insider that the revolving door is likely to continue over the next six months as investors press adtech companies for growth.It marks the next stage of evolution for the adtech industry. With the digital ad market largely dominated by tech giants Google, Amazon, and Meta, independent adtech companies are forced to find new ways to compete over the remaining scraps. The small and medium-sized startups still duking it out are now entering their operator era."Automation, AI, and the optimization of corporate structures will mean that only the lean, mean companies are going to end up gaining market share and be in a position to win," said Chris Karl, chief business development officer at the M&amp;A advisory firm JEGI Clarity.<h2 id="fd8233e1-0d16-4bc2-8b40-8db1559a0af4">Adtech valuations have come back down to earth, but PE investors still want scale</h2>Private-equity firms such as Vista, GTCR, and Blackstone have been increasingly <a target="_blank" href="https://www.businessinsider.com/private-equity-firms-investing-in-advertising-and-marketing-companies-2024-3">active investors in the adtech space</a>, leading a flurry of deals between 2021 and 2022.There were 784 PE or PE-sponsored transactions in the media and marketing space in 2021, up 96% from the prior year, according to the advisory firm Ciesco. That number rose to 874 in 2022 and lowered slightly to 786 in 2023, per Ciesco.Now, a few years have passed, and leadership changes are to be expected, given historic PE investment cycles, said Mark Wright, a veteran tech investor and executive, who now leads the M&amp;A strategic advisory practice at Prohaska Consulting. Founding teams make way for more experienced operators who can take the company to the next level, he said."Although there are exceptions to the rule, there are very few founding teams that are marvelous at groundbreaking innovation that can successfully make the transition to managing and operating at scale," Wright said.Public and private valuations of adtech companies have dropped dramatically since 2021, the height of the zero-interest-rate period when there was a rise in digital ad spending and a slew of adtech IPOs. Tougher macroeconomic conditions in the years since put a strain on consumer spending and marketing budgets, cooling the markets and M&amp;A activity."Some of the changes you're seeing are indicative of a two-year cycle post-COVID where things are back to normal, or the new normal," Karl of JEGI Clarity said. "Where company performance could be tied to events that were out of their control a couple of years ago, that excuse no longer suffices. Investors want growth."Meeting growth expectations has been a challenge for some companies. JEGI Clarity, which, alongside CIL Management Consultants, conducted a survey of 25 marketing services agency leaders this summer, heard from multiple CEOs who said 2022 and 2023 were some of the most difficult operating environments of their careers.Those surveyed said they were more optimistic about 2024 now that rates have stabilized and clients are less risk-averse with their marketing budgets. Almost three-quarters (70%) of respondents in the study said that their margins had remained stable or increased this year.<h2 id="7a33b071-67d8-4249-828a-d18e4d17a037">CTV is adtech's bright spot – but it's complicated</h2>Despite a rising global advertising market that is expected to surpass $1 trillion in spending next year, not all adtech vendors are positioned to reap the rewards.Take the connected TV space. It's one of the fastest-growing ad channels in the US, with spending expected to grow 13.3% and cross $30 billion in 2025, according to Emarketer. The change in viewing patterns and forecast ad spend attracted investor interest in adtech companies that had a strong position in CTV.<div type="image" title="Emarketer US TV CTV ad spend chart" height="1466" width="1410" msid="114016955" hostid="261" sizebytes="114730"></div>However, much of the recent growth in CTV advertising is being driven by platforms like YouTube and Amazon Prime Video — so-called walled gardens that don't integrate third-party adtech vendors such as buying platforms and exchanges.CTV is also a lower-margin channel for adtech vendors than traditional online display, where up to half of every dollar spent on ads gets gobbled up by vendors like demand-side platforms, ad exchanges, ad servers, measurement vendors, and data brokers."In network TV, those supply chain costs are in the 15% level — you have to take 50% and squeeze it down to 15%," Prohaska's Wright said. "It's going to put a real emphasis on operating at scale and put a pressure on margins."As TV viewing grew fragmented, several adtech companies that took on investment in recent years positioned themselves as rivals to ratings giant Nielsen. These firms are jockeying to become the go-to companies for tracking audiences or to become the universal <a target="_blank" href="https://www.adexchanger.com/adexplainer/adexplainer-tv-measurement-vs-tv-currency/">currency</a> used to buy TV and video ads.But Nielsen still hasn't been unseated. And Walmart's acquisition of TV manufacturer Vizio — from which many adtech vendors license viewing data derived from its tens of millions of TV sets — could signal further trouble ahead if the grocery giant doesn't renew those contracts when they expire.With the Walmart-Vizio deal front of mind, adtech companies and investors are likely to turn their attention to retail media, where ads are placed on e-commerce sites. Retail media is also growing at a clip, with almost every retailer and app owner now also operating an ad business.The increasing complexity for advertisers offers opportunities for adtech companies to innovate. Though, while around $1 in every $7 US ad dollars is expected to go to the space this year, according to Emarketer, retail media is largely dominated by Amazon.There's also some executive shuffling happening in the retail media ranks: Megan Clarken, who leads the publicly traded adtech company <a target="_blank" href="https://digiday.com/media-buying/criteo-seeks-new-chief-executive-after-megan-clarken-announces-pending-exit/">Criteo</a>, said she plans to step down within the next year once her successor is found.Many industry observers expect more adtech management upheaval ahead, as well as a further consolidation of the sector once the intense fourth-quarter holiday period is over."You will see more heavy-handed PE involvement primarily because the M&amp;A market hasn't been great and people sat on the sidelines," said Domenic Venuto, COO of investment bank Progress Partners and soon-to-be chief of product and data at media agency Horizon Media."The market can only sustain so many of these companies that have grown to be quite sizable but are now hitting their upper limits," he said.

Adtech is undergoing an exec shake-up as investors seize control and startups enter a new era

<ul class="summary-list"><li>Headway's CEO shifted to an AI-focused strategy after a Silicon Valley trip in April 2023.</li><li>AI tools boosted Headway's marketing, achieving 3.3 billion ad impressions in early 2024.</li></ul>In the first weeks after OpenAI released ChatGPT to the public in 2022, Anton Pavlovsky, the chief executive of the Ukrainian edtech startup <a target="_blank" class="" href="https://makeheadway.com/">Headway</a>, was wary of the artificial-intelligence hype.He decided his then-three-year-old company should adopt a defensive strategy, letting other companies take the lead in generative-AI investments, and reaping the benefits afterward, should they indeed come.But a business trip to Silicon Valley the following April completely changed Pavlovsky's thinking."I talked with so many very smart people with lots of experience, and those people said that this is definitely a paradigm shift," Pavlovsky said. "They said that it's akin to the internet, the world wide web, then the smartphone, and then AI."On his return, he implemented a companywide, four-month, hardcore focus on AI. The company also created a separate cross-functional team to help integrate AI-powered features into its various products.Pavlovsky said the use of AI tools has made a profound difference to the company's marketing performance.During the first six months of 2024, the company said AI-driven ads reached 3.3 billion impressions. The company said the use of AI tools had increased the return on investment from its video ads by 40% because it had helped lower the costs Headway would have previously spent on production. Headway declined to disclose its marketing budget but said it is in the "millions.""The biggest impact is on opportunity costs for people, it's freeing up so many resources on creative and more value-add endeavors for experimenting with crazy ideas," Pavlovsky said.Headway joins a growing number of marketers looking to harness AI tools, in part to reduce their advertising costs.The buy-now-pay-later firm <a target="_blank" class="" href="https://www.businessinsider.com/klarna-ceo-comments-ai-smaller-marketing-team-produce-more-savings-2024-5">Klarna made waves</a> when it said AI had helped cut its spend on marketing agencies by 25%. A recent <a target="_blank" class="" href="https://www.gartner.com/en/marketing/topics/ai-in-marketing">Gartner study</a> predicted that 30% of outbound marketing messages from large companies would be synthetically generated by 2025. The rapid adoption of the tools has the marketing industry excited about AI's prospects, but some are <a target="_blank" class="" href="https://www.businessinsider.com/ai-is-set-to-dominate-cannes-lions-ad-festival-2024-6">uneasy</a> about the consequences for agency jobs and question <a target="_blank" class="" href="https://www.businessinsider.com/ai-has-marketing-problem-people-dont-like-hearing-about-it-2024-8">whether consumers are ready</a> for an influx of ads using or mentioning AI.<h2 id="5283ce02-8cac-4410-a913-fe59c246f13c">Headway is using AI tools like HeyGen, Rask, and Midjourney</h2>Founded in Ukraine in 2019, Headway operates a portfolio of educational apps that combined have been downloaded by more than 110 million users worldwide. The company continues to be headquartered in Ukraine's capital, Kyiv, though most of its users are based in the US. (The company <a target="_blank" class="" href="https://www.facebook.com/photo.php?fbid=1018097949135255&amp;id=250289965916061&amp;set=a.351463732465350">previously said</a> after Russia's invasion of Ukraine, it had helped the majority of its staff and families who wanted to move away from the country to do so, though some have since returned.)Its flagship app, Headway, offers 15-minute summaries of popular nonfiction books, as well as challenges and daily micro-learning sessions. Other apps in its portfolio include the brain-training app Impulse, the AddMile coaching platform, and its newest, Skillsta, which is a training app for soft skills like critical thinking and empathy. The company makes money through paid subscriptions.Headway has leaned heavily on advertising on digital platforms like Meta's Instagram and Facebook, Google, and TikTok in order to grow its user base.All of Headway's user-generated-content video ads are now produced using some element of AI technology, such as for subtitles or voiceovers, the company said. <a target="_blank" class="" href="https://www.businessinsider.com/how-to-make-money-from-ugc-user-generated-content-ads">UGC ads</a> refer to those that blend in with other content on an app, such as vertical video ads on TikTok and YouTube Shorts, and are often produced by creators rather than professional production teams. These ads account for 30% to 50% of the purchases of Headway subscriptions or signups to its 7-day free trials, according to the company.While Headway used to rely heavily on stock images for its static ads, around one in five of its paid downloads or trials are now driven by static ads that use AI-generated images, the company said.When the company launched the French version of its Headway app, it used the AI tools <a target="_blank" class="" href="https://www.rask.ai/">Rask</a> and <a target="_blank" class="" href="https://www.heygen.com/">HeyGen</a>, as well as the <a target="_blank" class="" href="https://www.deepl.com/en/write">DeepL</a> translator, to translate a video ad featuring an English-speaking creator into a convincing ad for a French audience using AI voiceover and lipsync features.Elsewhere, Headway used tools, including HeyGen and <a target="_blank" href="https://www.d-id.com/photo-to-video/?utm_term=brand-ad&amp;utm_term=d-id%20ai&amp;utm_term=d-id%20ai&amp;utm_campaign=brand-eu&amp;utm_source=adwords&amp;utm_medium=ppc&amp;utm_content=611130303518&amp;hsa_acc=6149207258&amp;hsa_cam=17780208183&amp;hsa_grp=141566902480&amp;hsa_ad=611130303518&amp;hsa_src=g&amp;hsa_tgt=kwd-1687090777879&amp;hsa_kw=d-id%20ai&amp;hsa_mt=p&amp;hsa_net=adwords&amp;hsa_ver=3&amp;gad_source=1&amp;gclid=CjwKCAjw59q2BhBOEiwAKc0ijUa9IQQFD-hJJhliDHdxTzmgFcNRWdza6NQWHTILSDlqdRtPc6d2CxoCTMgQAvD_BwE">D-ID,</a> to animate characters in famous paintings like the Mona Lisa to make them "speak" in a YouTube Shorts ad to encourage users to "stop scrolling" and download its Nibble knowledge app.Headway also uses text-to-image tools like <a target="_blank" class="" href="https://www.midjourney.com/home">Midjourney</a> and <a target="_blank" class="" href="https://leonardo.ai/">Leonardo AI</a>. In one example, it produced a static ad featuring an image of Marie Antoinette biting into a marshmallow to promote its concept of "bite-sized learning" for its Nibble app.<div type="image" title="An ad for the Nibble app featuring Marie Antoinette biting into a marshmallow." height="1350" width="1080" msid="113031413" hostid="261" sizebytes="116312"></div>Headway is also increasingly introducing AI features to its own products. The Headway app is currently testing an AI assistant that uses the OpenAI application programming interface, Google Cloud's <a target="_blank" class="" href="https://cloud.google.com/generative-ai-studio">Vertex AI</a>, and its own vector database to answer user queries based on its library of books in a conversational format.Unexpectedly, some users are spending "hours per day" communicating with the AI assistant, according to Pavlovsky, which he said speaks to the success of the company's AI push."Maybe some legacy players that don't move fast won't have that kind of speed of adoption, but for startups, or digital natives, it's a no-brainer," Pavlovsky said.

The CEO of edtech startup Headway breaks down how the company used AI tools to improve its ad performance by 40%

<ul class="summary-list"><li>"Sweaty startup" describes business ownership in traditionally blue-collar industries.</li><li>Sweaty startups are facing challenges from inflation and increased competition.</li></ul>Patrick Hocker, 35, never envisioned owning a <a target="_blank" class="" href="https://www.businessinsider.com/carbon-monoxide-nyc-rat-exterminator-clap-cheer-free-beer-2023-10">pest-control</a> company. He waited tables at 18, married young, had kids, and became a security guard.After meeting someone who worked in pest control, he got into the industry himself and, after a layoff, decided to start his own business in 2020. He knew his market in northern <a target="_blank" class="" href="https://www.businessinsider.com/moving-from-florida-to-virginia-pros-cons-cape-coral-weather-2024-2">Virginia</a> could be profitable because of its higher household incomes."I always said I wanted to own my own business one day, but I didn't want it to be in pest control," Hocker said. "Pest control is not sexy. It's dirty. It's hard, physical work."He said that he spent $5,000 on startup costs including new equipment for his company, Bluebird Pest Solutions, and that he relied mostly on word of mouth and Google reviews to build the brand.However, his four-person company isn't growing as fast as he hoped. He said he thought <a target="_blank" class="" href="https://www.businessinsider.com/why-costs-keep-rising-inflation-goes-down-eggs-tickets-insurance-2024-7">inflation</a> had made customers more budget-conscious.<div type="image" title="Patrick Hocker" height="819" width="1285" msid="112244113" hostid="261" sizebytes="51046"></div>"We've found that people are taking a lot more time this year to make a decision about who to hire, or if they're going to hire someone for pest control, there seems to be more of an emphasis on price over necessarily buying value in that service," Hocker said.Rising prices for vehicle-maintenance supplies and labor costs have eaten into his profits. He said he'd been "playing financial catch-up," as he's relied on this business as his family's sole source of income and cashed out his retirement fund to finance it.Hocker is running a "<a target="_blank" class="" href="https://www.businessinsider.com/sweaty-startups-millennial-business-owners-entrepreneurship-2021-5">sweaty startup</a>," a term coined by the entrepreneur Nick Huber, who owns nine such companies and has amassed communities on X and Reddit. Sweaty startups are <a target="_blank" class="" href="https://www.businessinsider.com/blue-collar-job-demand-growth-white-collar-layoffs-ai-2024-5">blue-collar businesses</a>, often in unglamorous or laborious fields like septic services, car washes, or lawn care. It's what your grandparents would've just called a small business, but it was a tongue-in-cheek answer to the Silicon Valley-style entrepreneurship being glorified in culture at that time. The community boasts success stories of profitable <a target="_blank" class="" href="https://www.businessinsider.com/22-year-old-bought-car-wash-passive-income-2023-1">car wash owners</a> and successful <a target="_blank" class="" href="https://www.forbes.com/advisor/business/start-a-vending-machine-business/">vending machine</a> owners."If you look at who is truly wealthy in these small towns, people who are eating at the nice restaurants and at the nice country clubs, you'll find that they didn't have new ideas at all," Huber told BI. "They didn't have tech startups aimed at changing the world, and they didn't build a billion-dollar business. Most of them did something common or boring, and they just did it uncommonly well."While some sweaty startup owners told Business Insider they loved the work and felt fulfilled, many said it was becoming harder to scale up. Though <a target="_blank" href="https://www.bls.gov/news.release/cesan.nr0.htm">consumer spending</a> has been on the rise since 2020, with a marked shift <a target="_blank" class="" href="https://www.businessinsider.com/hate-spending-consumers-economic-sentiment-retail-sales-inflation-gdp-growth-2024-4">from goods to services,</a> business owners generally blamed customers' tightening budgets. The reasons likely also include high interest rates and increased competition.<h2 id="f0d4786b-e1d6-4b04-aa79-57bb464d6dd3">Growth is challenging, but sweaty startups still provide plenty of opportunities</h2>Huber said he saw sweaty startups become more popular in the first two years of the pandemic following mass layoffs and a rethinking of work. While some entrepreneurs go into these businesses hoping to strike it rich — some have even <a target="_blank" href="https://www.reddit.com/r/sweatystartup/comments/15mcknl/how_to_handle_the_stigma_of_leaving_a_white/">left Wall Street jobs</a> to do so — many do so because they want more flexibility and time with family, financial risks be damned.Huber said that in some ways the <a target="_blank" class="" href="https://www.businessinsider.com/millionaire-small-business-entrepreneur-revenue-census-construction-finance-real-estate-2024-6">business landscape</a> is getting harder for founders to break into. <a target="_blank" class="" href="https://www.businessinsider.com/federal-reserve-interest-rates-jerome-powell-borrowing-costs-stock-market-2024-5">High interest rates</a> have hurt owners borrowing cash to open their businesses. While the number of sweaty startup founders seeking venture capital is likely low, Huber said he's known it to happen."A lot of venture-backed businesses are in a lot of trouble and hurting right now," Huber said. "They raised a lot of money in 2021 and 2022, and now they're seeing the economic headwinds from inflation and are unable to raise their next round. They're kind of stuck."Sources said <a target="_blank" class="" href="https://www.businessinsider.com/private-equity-firms-start-recruiting-early-investment-bank-apollo-kkr-2024-6">private equity</a> firms have been eyeing smaller businesses in these industries, which could tighten competition. For instance, private equity firm <a target="_blank" class="" href="https://www.businessinsider.com/executive-coaching-benefits-according-to-graham-weaver-ceo-alpine-investors-2024-7">Alpine Investors</a> has partnered with <a target="_blank" href="https://alpineinvestors.com/portfolio/">hundreds of businesses</a> across industries such as HVAC, plumbing and electrical, roofing repair, and tree care.The American Investment Council, a lobbying and research organization for the private-equity industry, estimates that private equity owns only about 2.5% of all middle-market businesses, or those earning about $10 million to $1 billion, in the US. Still, some small businesses look to private equity to scale their businesses in different markets, even if that means overhauling operations in some cases."Small businesses partner with private-equity firms because they provide access to capital and organizational support to help companies grow," Drew Maloney, the council's president and CEO, told BI.Some business owners who left the corporate world to run a sweaty startup said it came with plenty of benefits but lots of stress about staying afloat.Stan Chen, 36, worked at <a target="_blank" class="" href="https://www.businessinsider.com/blackrock-news-updates">BlackRock</a>, then in mortgage sales, and then at a global payments company before getting into a sweaty startup. His family operated restaurants in Boston for decades, and after years in the corporate world, he wanted to transition to a service-type business.He said he "didn't want to have a boss, climb the corporate ladder, and deal with office politics." Referring to his family, he added, "If immigrants who barely speak English that came here with $20 can run a business of three to four restaurants and basically become millionaires and have a nice middle-class lifestyle, I'm pretty sure I can do it too."<div type="image" title="Stan Chen" height="1500" width="2000" msid="112244122" hostid="261" sizebytes="68286"></div>He saw that BerryClean, a house-cleaning service in San Francisco, was for sale. After meeting with the management and employees — who he said reminded him of his family — he acquired the company in July 2019.He said that when the pandemic hit he lost 90% of his business, but he applied for loans and improvised. The company built its own "mini Uber service," Chen said, offering rides in its 20 cars and minivans. When demand for cleaning picked up again, he sometimes worked 18-hour days to keep operations running. The company's washers and vacuums would regularly break down, and he would sometimes have to do laundry at his home to keep clients satisfied.Operations have grown recently, and he said he's seen staff get their lives better on track and "achieve the American dream." Despite the company's growth over the past few years, though, Chen said business had gotten tougher recently with growing competition in San Francisco. He said he had to raise prices to keep up with inflation. He noticed that people wanted to spend less on <a target="_blank" class="" href="https://www.businessinsider.com/how-to-start-cleaning-business-side-hustle-low-startup-costs-2023-2">cleaning services</a> in his area, and the company dug into profits to increase its advertising."A lot of people get into this kind of business for the wrong reasons, because they listen to a podcast or they're on social media, thinking it's easy money," Chen said. "It's not easy money — it's the hardest money there is. You have to earn your keep every day, and you have to get your hands dirty. If you don't do a good job, you're fired."Alejandro Florez, 27, the president of The Cleaning Pros of America in Bradenton, Florida, said the growing investments in janitorial companies in his area were in some ways antithetical to the idea of sweaty startups."A lot of small cleaning businesses are pulled up by the bootstraps, and we usually start them out of necessity as our only avenue of making money," Florez said.<div type="image" title="Alejandro Florez" height="817" width="1089" msid="112244119" hostid="261" sizebytes="35352"></div>Both of his parents were <a target="_blank" class="" href="https://www.businessinsider.com/frank-baez-earns-nyu-nursing-degree-used-to-be-janitor-2019-5">janitors</a>, and when he was a senior in high school he started a small cleaning company that he grew by knocking on doors and cold-calling. He relied on trial and error and supplier advice for pricing, production rates, and cleaning strategies for different facilities.He said this year he's had nearly $2 million in revenue with two dozen employees and over 30 clients. He hopes to grow over the next decade by expanding to Jacksonville or Orlando. Still, he said that because the pandemic helped the cleaning industry "massively," markets became much more saturated. He estimated that 45% to 55% of his overhead went to paying his employees."For our market, even though it's very profitable and attractive, there's a low barrier to entry," Florez said. "There's more people at the table wanting to eat from that table."Florez said the growth of private-equity investment in his area had made competition even more difficult. Since 2021, he said, he's been approached by a dozen private-equity firms wanting to invest in his company, but he's turned them down."When you get private equity into the mix, they're bringing a different dimension of business and being able to scale it differently," Florez said. "There are firms that can operate on 10% net profit, which I can't do. There are firms out there that are being a lot more aggressive."<h2 id="b453f9d2-5f80-484d-b4ca-0b542234b938">Trial and error to figure out what works</h2>For some sweaty-startup owners, staying ahead of the competition requires bouncing from company to company based on changing needs.Chris Salisbury, 35, has been an <a target="_blank" class="" href="https://www.businessinsider.com/best-side-hustles-for-introverts-2023-11">entrepreneur</a> since he was 16. He started a small house-painting business while in high school and a few other companies in his 20s.<div type="image" title="Chris Salisbury" height="600" width="800" msid="112244117" hostid="261" sizebytes="8160"></div>In 2016, he sold everything he owned; moved to Brooklyn, New York; and decided to start a new business while living in a wood shop. With two friends, he launched Spayce, a commercial cleaning and handyman company that worked with high-profile clients like BuzzFeed — Salisbury said the business brought in $120,000 in its first week and over $4 million in its first year.During the pandemic, Spayce manufactured Covid barriers and secured new contracts with clients. Salisbury also launched the brand We Paint Kitchen Cabinets, which he sold a year later."I pivoted 100 times since COVID happened, but it did initiate the need to automate and start combining all of the things that I learned how to do by hand and being around these tech companies," Salisbury said.Salisbury and his business partner then launched nuDoors in July 2023, specializing in cabinet-door replacements made mostly of recycled material. Though he didn't have much experience in the cabinet industry, Salisbury pulled from his past companies and asked successful people in the industry for help.Salisbury said he and his partner spent over $1 million on new equipment to better automate their manufacturing processes but didn't spend a penny on advertising. He added that the company had grown each month since it was launched and that he expects it to be profitable by next year."The smaller shops are going out of business, not having any workers because they're doing the old way of doing things, and no one's filling the void between the big guys that are too big to talk to you and the small guys going out of business because they can't compete," Salisbury said.Are you a sweaty startup owner or manager? Reach out to this reporter at <a target="_blank" href="mailto:nsheidlower@businessinsider.com">nsheidlower@businessinsider.com</a>.

Blue-collar entrepreneurs say it's getting harder to turn a profit as competition for 'sweaty startups' heats up     

As expected and in relief for the citizens, the central government neither tweaked nor put any additional tax burden on citizens, in the interim Budget for 2024-25 tabled by Union Finance Minister <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword>. "Keeping with the convention, I do not propose to make any changes relating to taxation and propose to retain the same tax rates for direct taxes and indirect taxes including import duties," Sitharaman said in her Budget speech on Thursday. However, certain tax benefits to start-ups and investments made by sovereign wealth or pension funds as well as tax exemption on certain income of some IFSC units are expiring in March 2024. To provide continuity in taxation, she proposed to extend the date by another year. Moreover, in line with the government's vision to improve ease of living and ease of doing business, she announced to improve tax-payer services. "There are a large number of petty, non-verified, non-reconciled or disputed direct tax demands, many of them dating as far back as the year 1962, which continue to remain on the books, causing anxiety to honest tax-payers and hindering refunds of subsequent years," she said. She proposed to withdraw such outstanding direct tax demands up to Rs 25,000 for the period up to financial year 2009-10 and up to Rs 10,000 for financial years 2010-11 to 2014-15. "This is expected to benefit about a crore tax-payers," she added. Presenting the Union Budget 2023, Sitharaman on Thursday pegged the fiscal deficit target for 2024-25 at 5.1% of gross domestic product (GDP). In 2023-24, the government pegged the fiscal deficit target for 2023-24 at 5.9% of gross domestic product (GDP). Today, Sitharaman said that the fiscal deficit of 2023-24 was downwardly revised to 5.8%. The difference between total revenue and total expenditure of the government is termed as fiscal deficit. It is an indication of the total borrowings that may be needed by the government. The government intends to bring the fiscal deficit below 4.5% of GDP by the financial year 2025-26. The government intends to bring the fiscal deficit below 4.5% of GDP by the financial year 2025-26. A capital expenditure, or capex, is used to set up long-term physical or fixed assets. Last year, which was the last full Budget under the Prime Minister Narendra Modi-led government's second term, the government proposed to increase capital expenditure outlay by 33% to Rs 10 lakh crore in 2023-24, which was estimated to be 3.3% of the GDP. With the substantial increase in capex, it is central to the government's efforts to enhance growth potential and job creation, crowd in private investments and provide a cushion against global headwinds. The interim budget, tabled today, will take care of the financial needs of the intervening period until a government is formed after the Lok Sabha polls after which a full budget will be presented by the new government in July. With this Budget Presentation, Sitharaman equalled the record set by former Prime Minister Morarji Desai, who as finance minister, presented five annual budgets and one interim budget between 1959 and 1964. The Budget Session of Parliament commenced on Wednesday with President Droupadi Murmu addressing a joint sitting of Lok Sabha and Rajya Sabha. The Indian economy is projected to grow close to 7% in the financial year 2024-25 which starts this April, said the Ministry of Finance in a review report. India's economy grew 7.2% in 2022-23 and 8.7% in 2021-22. The Indian economy is expected to grow 7.3% in the current financial year 2023-24, remaining the fastest-growing major economy.

FM Nirmala Sithraman keeps tax slabs unchanged

<ul class="summary-list"><li>Olive oil prices are at record highs due to extreme environmental conditions.</li><li>But <a target="_blank" href="https://www.businessinsider.com/guides/kitchen/graza-olive-oil-review#:~:text=It%27s%20non%2DGMO%20certified%20and,has%20a%20spicier%2C%20stronger%20flavor.">olive oil startup Graza</a> says it only marginally raised its prices.</li></ul>This as-told-to essay is based on a conversation with Andrew Benin, the cofounder of olive oil startup Graza. The following has been edited for length and clarity.Putting out a high-quality olive oil is difficult for a young brand, but it's even harder now as <a target="_blank" href="https://www.businessinsider.com/olive-oil-prices-surge-mediterranean-drought-food-inflation-2023-9">prices hit record highs</a>.Before I launched Graza in early 2022, we purchased nearly 50,000 liters of olive oil from Italy for about $3.10 a kilo. Fast forward to this month — when we made our most recent purchase — prices had shot up to $9.30 a kilo.Olive oil prices have jumped over the past couple of years due to extreme environmental conditions in the world's top olive oil-producing regions — Spain, Italy, and Greece. Prolonged droughts and deficiencies in irrigated land have led to agricultural disruptions that have hampered production.During this time, though, we've only passed on costs to retailers to increase the on-shelf price of "Sizzle," our <a target="_blank" href="https://www.businessinsider.com/guides/kitchen/comparing-popular-olive-oil-brands">extra virgin olive oil</a> made for cooking, and "Drizzle," our finishing oil, by about $1 each.We're trying not to pass on more costs because when you're a fast-growing brand like Graza, the last thing you want to do is paralyze demand by pricing yourself out.<h2>We didn't want to call attention to the adultery in the industry — but we have to.</h2>There's a lot of competition among suppliers to keep costs down right now.Some suppliers have resorted to compromising on quality to maintain their margins. If you know a bit about <a target="_blank" href="https://www.youtube.com/watch?v=l4GrYUUcQG0">olive oil production,</a> you'll know that extra virgin olive oil is extremely inefficient to produce — that's one of the reasons it's more expensive.Lampante, raw olive oil not intended for human consumption, is about $8.2 per kilo. Virgin is $8.70 per kilo. And extra virgin is $9.30 per kilo. There are some big-time suppliers right now that are creating extra virgin products with oils that are not extra virgin because they're desperate to survive.The problem is that there's no biochemical marker for customers to know that the olive oil has been adulterated. And while Graza's platform wasn't intended to talk about the <a target="_blank" href="https://www.businessinsider.com/fake-olive-oil-2012-1">adultery in the industry</a>, now that we're seeing it with our own eyes, it's hard not to call attention to it. Law enforcement agencies have seized tens of thousands of gallons of olive oil and arrested suspects worldwide for fraud in the past several months.<h2>Keeping costs down right now is the biggest challenge we've ever faced</h2>We had to change our operations and make some tough decisions to continue delivering high-quality EVOO to our customers without increasing prices.We've implemented a hiring freeze. We're spending just 5% of our gross revenue on marketing, down from around 12.5%. We're keeping our budget tight, not taking risks, and thinking long-term. Still, to have enough inventory of Drizzle, our finishing oil, to sell all year round, we must buy 100% of the supplies outright. Then we may go for months without returns on that investment. So, not passing the cost on has been the biggest challenge we have ever faced at Graza. We're in 10,000 retail stores, <a target="_blank" href="https://www.businessinsider.com/walmart-and-target-are-looking-increasingly-similar-these-days-2023-12">including Walmart and Target</a>, so it's as easy as a snap of the finger to capitalize on our brand equity. But we're not — we're maintaining quality by putting our money where our mouth is.

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