>> announcer: this is "nightly business report" with sue herera and bill good evening and welcome to this special edition of "nightly business rept." i'm sueherera. >> and i'm bill griffeth. >> you know, every night we bring you epin market coverage and stories about business and the economy. but today the markets were the martin luther king jr. holiday, so tonight we're exploring something a little different. >> we' going to look at the american entrepreneur and that spirit that turns a bright idea into a successful business. >> we'll also show you how som women a breaking barriers in the business world. and then later, an investigative piece that you just have to see to believe. but we begin wonighth a small business story and a

retail entrepreneur whos rking to make fashion more sustainable and environmentally friendly. listen to this. according to one estimate, in the last 20 years, americans have doubled the amount of clothing that they toss out each year m to 14lion tons. but startups interested in attacking that problem found it diffict to find affordable materials and manufacturing until one bostonshntrepreneur ed them how to go green and make green at the same time. >> this is our new blazer. >>eporter: carra bartlett's clothing line is moving i o a third office in three years. a sure sign of growth. her multi-use pieces, zip-out sleeves turn this blazer into a vest, for example, are ethically made and sustainably sourced. her domesticay manufactures p their employees a living wageha ands surplus fabric that she bought from another company. >> if you want thisf type company ten years ago, i think

it would have bombed. >> reporter: she cnndits sha lore's factory 45 for making it work. that's a six-month online crash course on sourcing materials, manufacturing, and raising capital ethically and sustainably. >> i was a fast fashion bargain bin junkie in college. i wanted the deal. i was known for wearing a dress once, throwing it in my closet and never looking at it oragain >> rr: but her attitude changed while traveling after learned how she waste impacts the world, business lore and a partner to create one piece that could be worn 15 or more different ways, but sourcing materials and finding a manufactur took them a year and a half. raising money on kickstarter was thepa easy . >> we set a goal of $20,000 and nded up tripling our goal a becoming the highest funded fashion prong erct in kicksta at that time. >> it was profitable for the

get-go but re wasn't in it for the long haul. instead she shared what she learne >> there were so many people out there that wanted to start clothing companies. they were interestedn sustainability and ethical manufacturing, but they didn't know where to start. >> lore offered classes in 2014 and then moved neon 120 designers are paying $500 a month for factory 45, giving them access to lore's invaluable and growing database of suppliers and manufacturers. this manufacturer in fall river, ssachusetts, works withlore's husband. his company, called project repat, turns old t-shirts into quilts. ross lore says they're on track to sell$10 million worth of quilts in mary beamis dreams of numbers like that. factory 45 helped her launch reprise activewear in 2018. >> i knew i need to find a

fabric, someone will need to sew it for me, i'll need tobu dist it and raise money. but how t to dot i have no idea. >> her workout gear is made of tinsel. there's no polyester. >> it's naturally cooling, it's sweat wicking, ti-bacterial. >> priced to compete with nike and lululemon, the leggings are $109. she sold about 300 pieces in just two months. the printer she found in brooklyn offers water-base ink. it costs more but owner jose andradee' says thers missouore d for it. >> i think that's the future for us right now. >> you can wear it open or closed. >> and that's the type of future shannon lore is betting on. >> this growth is just amazing. so who knows.od is now a $50 shannon lore jus opened a new section on her site called market 45 where her clientsan

showcase their greener brands, as they try to bring a different .ype of thinking to e fashion do you ever wonder where all ofhat stuff you buy online is kept or how it gets shped? lot of companies get helped by outsourcing. third party logistics is an industry worth $200 billion in the u.s. alone, thank to the booming e-commerce business. that's why one entrepreneur is helping other companies get their products from here to rafa began selling high-end surplus watches and jewelry as he word his way through college in 2009. he discounted prices and sold online through amazon, ebay and othersut of an apartment in queens. >> the living room was the ware buse and theroom was the warehouse. >> as he filled up the apartment with 1000 items, he began to notice price differences between the amazons and ebays, telling runningand family

similar businesses that they often paid too much. >> i saw that they were really missing an opportunity of selling elsewhere where the margins were better. none of them wanted to handle the logistics or space was too expensive. >> but burgeoning e-commerce bottom mea thousandsf small businesses needed help with storage, packaging, labeling and shipping. started calling up friends. i was like, hey, instead of you sending everything taz , send me it and i'll send half to amazon and we'll keep of it by us and we'll ship it as the orders come in. >> starting in 2011, his company outgrew the apartment and then an office space and a warehouse. by 2014 it was handling ath coue sand orders a day, and ruby took its conveyor systems and shelving to a warehouse on long island. rage the company says customers save 45% on freight. if you think ruby's warehouse looks like an amazon fulfillment enter, well, that's no accident.

>> we had to do everything right andd we ha to do it the way amazon would do it, just on a ll much s scale. we have clients today that have distribution centers ten times our size where that distribution center cannot handle the direct-to-consumer needs. >> rubye handles s orders from amazon but one thing he offers amazon doesn't is the ability to use a customer's brandedpa aging. >> there's a lot of companies that can say they can give you the branding but not o ale. as soon as you start doing 1,000 orders a day, what w see i they break down on scale. >> i don'tant it to be like a third party brand. >> chris started his high-end sneaker brand in a brooklyn new york apartment three years ago. now they have stores in new york, chicago and losangeles. but 60% of b itsiness happens online. when he signed on with ruby this year, they realized some of his inventory lacked the bar codes

needed for automatic processing. >> they discovered the problem, and whout just sending them back or ignoring the they would britaprint bar codes themselves, label them and get them into the systm so t nothing is lost. >> now with almost 200an client revenue of more than $17 million a year, ruby has added warehouses in las vegas and new jersey with plans to expand further in 2019, aiming to keep delivery times down to the two to three days consumers expect and businesses depend on. >> you can literally deploy those dollars into products, marketing, staffi, right? things that have actually helped them grow the business. getting a norift isn't going to add to their top line or to the bottom line. >> ruby now has more than 200 employees and is looking to e butd not only here at h into canada and europe in the near future. stillow ahead, women are

redefining business from home building to silicon l lley to the tc home building is an overwhelmingly male dominated business, from framers on th job site right up to the c suite. but one ceo is trying to break that mold, not just for herself but for one of the nation's

largest publicly traded home builders. diana ick has more. >> arizona based taylor morrison homes is the seventh largest publicly traded home builder by revenue, and its ceo, cheryl palmer, is the first and only one of her kind in those ranks, a female ceo. >> i'm not certain t thats was an intentional path for me, but it's one that's felt right.ob ously i've been in this industry for 20 years. i'm color blind, i'm genr blind, so they might notice that i'm aal single f at the table, but for me this is just what i do. all the oldbo jokes there's no line to the ladies restroom, those are all true. t i -- it doesn't change me. i've always said in business the day i have to change who i am is probably the day i'l stop. >> palmer started in home building and took the company

puic at 2012. >> you're at the table with the other publicly traded ceos. have you ever felt minimized, and if so, how? >> for sure. early days i think if i were to share a view, i almost think it kindf glassed over. i had to continue and i knew that my positions, my views on the business were right, i'd say the group of ceosad to get to ow me. but now i think it's an equal playing field. but it took time. >> and over time, nearly a dozen yes as ceo, palmer built both her reputation as well as an uncharacteristically female staff given the business. >> do you promoe women mor as a leader of this company or do they just come t what the company is? so, i think we promote certain skills that are required, and we have a culture that i think attracts certain types of people around personal development and the pason and e higher purpose of what we as

a company stand for. we actually don't have any affinity programs for males. now, what i would hear from my people services department is that having m in this sea does attract other women. i think it gives hope. >> nearly 50% of our managers, that first level management is female. >> that's incredibly rare. >> that's incredibly enrare. >> g the product, houses, palmer sees it as just plain common sense. >> i will tell you i think it kes us a better company because to get that diversity of thinking at our table on a corporate level, at the division tabl it's really critical. think about who the buyers are today out buyinhouses, and to miss the opportunity to have the female spots kind of voice would be shapeful. >> h brd is also female heavy. even with this achievement, she

admits to a glaring problem, one she calls atr edy. >> women just don't tend to be there for oth women. and i don't know if that's a result of there are so few slots at the top that people feel likh the to i'm very hopeful that the industry develops, and as we see n more womene space, that women take the opportunity to t embrac need and help other women as compared to ph them down. na for "nightly business report," i'm d olick. companies are in need of workers in this tight labor market. that problem has become particularly evident in the oil patch. a wave of women are breaking barriers in this traditionally male business. jane wells is in deerk, texas. >> afternoon, everybody. >> christina smith is a mother of thee. used to manage a subway sandwich shop, worked at a

commercial dive store, then she went back to school, got al dega shift supervisor a shell plant in deer park, texas, making good money. >> my dad's exact words were, d, you hit the jackpot. >> the petroleum industry estimates foich15% of its workf is female and only half that reach the executive level, like lori freeman, a general manager in the gulf of mexico. >> i personally set the bar high for myself, so a lot of the challenges that i think i went thgeugh were chall that i set for myself. >> now big oil is going big on hiring more women. helping themus is indy veteran katiemaynard, who vividly recalls a remark made by a man sitting nexto her on a flight. >> he said what's a pretty young lady like you doing in a dark, dangerous business like oil and gas? >> she decided to create pink petro, a for-profit company funded byhell andthers to reach out to women who may have never even considered a career

in energy. >> the outreach to women is happening as oil prices are falling, which is providing an extra challenge i to anustry with an aging workforce that really needs a new generation of workers, male or female. >> we need to think about the marathon, it's not a sprint. >> i'm 40 now, but i don't remember growing up somebody saying, why don go to work at the plant, or you could be an engineer. ome of the women mentor each other about opportunities and the challenges, like not always being recognized as a senior engineer. >> when i wald in the room, a person asked if i could put their coat up. >> but that's happening less and less. >> i work hard, i want to learn, i like to help and because of that, i feel respected. >> in th end, why recruit women? in an industry needing a pipeline for a next generation workforce, the answer may be why not? for "nightly business report," ja wells, deer park, texas. there is also a pretty big

gender gapes when it c to venture capital or vc funding, but an effort is being made to make things more equal there, and that was a big topic of ascussion at recent conference attended by julia boorstin. >> at fortune's most powerful women next gen conference, theo ght is on the value of diversity. for every dollar invested, ntartups co-founded by women generated more t dull touble th revenue that male startups did. despite the financial argument for diversity, 17% of startups in t. last year had a woman founder, and 2% of vc funding went to female founders >> we have a long way to go to get to parity. but we are seeing a shift in the onversation and more people talking about, one, not only funding female founders, but alsohinking about who are the funders around the table.

so we're having mor of the conversation, more emphasis on that. >> half thenv itments in her glossier, including and daily harvest were female-led companies. mandate tot the invest in women, but she says she may have seen opportunities that her maleounterparts didn't. one reason such a small percent of vc funding depose to womgoes many don't have women female partners. all rays focuses on women in as funders and found another has the value of bringing in women's prlspectives and investing in diverse teams. >> we're a little cot industry of small, small firms highlighting the importance of diversity. they're finally getting it. for that i am ecstatic. we've got to make sure as an industry that those women and

those, quote unquote, diverse hires are not looked at as diverse hires,he thatare looked at as incredibly productive and high performing and equal members of the team. ibrahim sees direct correlation between a more diverse set of fundend rate of returns. the funders are 40% female and two of their last three funds are top performing, driving optimism that the vc gender gap will close aser people uand that diversity is good for business. for "nightly business report," i'm julia boorstin in dana point, california. coming up, an investigation into the rise and decline of a private jet company dubbed the uber of private jets.

it was dubbed the uber o air travel. jet smart became a billion y dollar company making private jet travel easier and more affordable. now a cnbc investigation finds that the company known for glamors in the sky caught in a downward draft, faced with angry members and questions about security. here's robert frank with tailspin. >> we're about to take off for l.a. >> jet smarter. >> it's amazing that we could fly together.

have a great day. and jet smarter. >> it took the private jetset by storm. with the simple appnd a dazzling image campaign and press coverage, jet smarter t claimedo revolutionize the business ofrivate jet travel. the company had a star-studded takeoff, raising millions from early investors that included the saudi royal family and jay z. and there was no shortage of big-nameen rsements. jet smarter signed up 10,000be members anme the first flyi unicorn, valued at over $1 billion. but hour investigation found that behind its elite image, jem ter has left a trail of outraged customers, o millions dollars in losses, and concerns about some passengers on customers around the country, some paying arly $100,000 for lt year memberships, now call

the company a fud. a high-tech shell game and an unlawful bait and switch. >> the way that the system works is a natural ecosystem. >> it all sounded so in 2016 when jet smarter's then 27-year-old ceo andfounder, sergei pet rosov appeared on cnbc. >> we off 50,000 hours of scheduled flights a year. there's plenty of lobter fster everybody to go aaround. the members feasted at least in the beginning. unlike most private j companies, jet smarter sells invidual seats onts planes, which customers book with the app. sally is a broadway producer who travels between her los angeles home and new york. she paid a$9,000 annual in early 2015, which allowed her unlimited private jet flights. >> the valueroposition in the original company was just kind of ridiculous.

it seemed too good to be true really. >> it was too good to last. jet smarter began stripping away the benefits of member mip. e free choppers. no more free food. and last year, it told customers th h would nowe to pay for flights which were supposed to included in their membership. >> holy [ bleep ]. this is not what i signed up for. this is bait and switch. ir customers told us that changes made t expensive memberships virtually worthless. the company's membership agreement says tt the terms are subject to change, suspension or termination at any time. in a statement to cnbc, jet smarter said the vast majority of our core customers understand the necessity of these decisions, and it is elevating the quality of people flying together. andrew pressler was one of the jeteo smarter salese signing up those members.

he said he was underressure t hit aggressive sales targets. >> every other month there was a new what the sales floor would call money t'grab. >> t what you called it? >> that's what all the sales guys called it, another money grab. >> pressler was fired. the company said it was poor performance and that he lied to customers,t hough he saids likely due to a call over a hampeting job offer. he postedhappened on linkedin, where he called the company cold-hearted for firing him, but said he remained passionate about the product they provide. and then he got this threatening letter from jet smarter's general counsel, calling the st false and libellous. >> why were they so threatened by me? i have no idea. maybe because the truth got out. >> cnbc hasha learned jet smarter as alsort fallen sho on its promises to investors. jet smarter made this confidential presentation to potential investors in 2017.

revenues would grow from $252 million to more than $2 billion in jus two years, and membership wou jump from over 11,000 to over 100,000 by 2020. but the losses kept growing. today's o membershipy around 8,000. jet smarter refused to comment on its financials. members are also concern about security accord jet smarter flights. >> take me to new york, now! >> reporter: we obtained this video of a disky joc aboard a jet smarter flight in september from las vegas to white plains, new york. about 45 minutes into the trip, according to court records, phe began threatening passengers. the pilot made a emergency landing in nebraska where authorities subdued and arrested him for making terroristic threats. jet smarter said it has the mos

rigorous security standards in private aviation, including backgroundhecks on the majority of customers before they fly. and on the ground security teams that screen for narcotics, explosives, cash and weapons for shared flights. but two people on the flight told us there was no surity check, and there was this red flag. just three days before the flight, paola had tweeted from a jail to the private jet, they can't stop me. customers and crew also say they tnessed passengers trying to carry drugs or cash on their ights. this suitcase packed with suspected marijuana was confiscated from a passenger. the picture taken by a crew member. >> there were definitely drug dealers of all kinds carrying lots of cash on the planes in designer bags. >> jet smarter denied any allegations of fraud or

bait-and-switch tactics, while acknowledging that a num members are unhappy with certain changes. the company saide it is m positive about the health of our business than ever. original jet the smarter dream appears to be further and further away. for "nightly business report," i'm robert fran f >> thank y watching this special edition of "nightly business report." i'm sue herera. >> ail i'mgriffeth. have a great evening, evesebody. we wilyou tomorr >> this is "bbc world news

america." >> funding of this presentation is made possible by the freeman foundation, and kovler foundation, pursuing solutions for america's neglected needs. >> wow, that is unbelievable. ♪