A Cookie Company Decides to Go Global
Based in Philadelphia, Insomnia Cookies, a 10-year-old dorm room startup, has 235 locations in more than 40 states and is headed to Canada and the U.K.
Here are today’s highlights:
The new trend in office design is “resimercial.”
Presso will dry-clean your clothes in a vending machine.
An accidental startup created to support Ukraine has evolved into a real business.
The same HR software that uses artificial intelligence to choose among job candidates can also choose among layoff candidates.
Insomnia Cookies decides to go global: “The company's global expansion comes as it continues to pursue U.S. growth as well. Insomnia is aiming to reach 95 percent of U.S. households by almost tripling its retail footprint to 600 stores over the next five years. It currently has 235 locations in more than 40 states and plans to open 30 domestic outposts in 2023 alone. The company opened its first store in South Dakota earlier this year and will also enter Wyoming and Montana in 2023. Insomnia typically enters new markets by opening an initial store and then expanding its presence with more locations in the area or by widening its delivery range.”
“The Philadelphia-headquartered cookie and dessert retailer's international presence will start with one store in the Toronto area and two in Manchester, U.K. Over the next few years, founder and CEO Seth Berkowitz said Insomnia plans to open 50 to 100 locations in both countries.”
“Berkowitz founded Insomnia in 2003 after the idea for the company came to him while he was playing video games in his University of Pennsylvania dorm room. Particularly popular among college students, the cookie, brownie, and ice cream maker seeks out locations near college campuses, restaurants, bars, and other late-night entertainment destinations.”
“In April 2021, it opened a ‘CookieLab’ [in Philadelphia]. The experiential space allows customers to create their own cookies and provides a way for Insomnia to gauge consumer demand for different flavors and products.” READ MORE
Robyn Tse, who has worked on both the culinary and the business sides of restaurants, says we should honor those trying to reinvent a flawed business model: “In a prior life, I worked for a shiny management consulting firm that announced its ranking on Glassdoor as proudly as some of my other culinary employers have touted their rankings on the World’s 50 Best Restaurants list. In one world, I received quarterly performance reviews in the form of thoughtfully written evaluations with tactical feedback. In the other world, my performance was mostly evaluated in the form of verbal abuse. I can confirm that one method is far more effective at inspiring excellence than the other.”
“Amanda Cohen now offers all employees at Dirt Candy in New York a starting wage of $25 per hour, and the Knead Hospitality + Design group, based in Washington, D.C., started testing a four-day workweek model.”
“Starr Restaurants group even began offering signing bonuses to new hires. Audrey, a Nashville restaurant, offers mental health benefits to its employees, and Pujol in Mexico City and Cosme in New York, run by the Casamata group, provide leadership coaching for their general managers.”
“For far too long, we have been paying lower menu prices subsidized by labor abuse. Restaurants that instead charge more to reflect the true price of eating out should be embraced.” READ MORE
Layoff decisions are already being made by AI: “A January survey of 300 human resources leaders at U.S. companies revealed that 98 percent of them say software and algorithms will help them make layoff decisions this year. And as companies lay off large swaths of people — with cuts creeping into the five digits — it’s hard for humans to execute alone. Big firms, from technology titans to companies that make household goods often use software to find the ‘right person’ for the ‘right project,’ according to Joseph Fuller, a professor at Harvard’s business school who co-leads its Managing the Future of Work initiative. These products build a ‘skills inventory,’ a powerful database on employees that helps managers identify what kinds of work experiences, certifications and skill-sets are associated with high performers for various job titles.”
“These same tools can help in layoffs. ‘They suddenly are just being used differently,’ Fuller added, ‘because that’s the place where people have … a real … inventory of skills.’”
“Jeff Schwartz, vice president at Gloat, an HR software company that uses AI, says his company’s software operates like a recommendation engine, similar to how Amazon suggests products, which helps clients figure out who to interview for open roles.”
“He doesn’t think Gloat’s clients are using the company’s software to create lists to lay people off. But he acknowledged that HR leaders must be transparent in how they make such decisions, including how extensively algorithms were used.” READ MORE
Home Depot says it will spend a billion dollars to give hourly workers a raise: “The home improvement retailer announced the wage investment as it reported fourth-quarter earnings. It did not disclose the new average wage for employees, but said every market’s starting wage is at least $15 an hour. Hourly workers will see the increase, which went into effect on Feb. 6, this month in their paychecks. The increase will boost pay for all hourly workers in the U.S. and Canada. With the move, Home Depot becomes the latest major retailer to signal that the labor market is still tight — especially when it comes to lower-wage hourly workers.” READ MORE
The price of natural gas has plunged more than 65 percent since mid-December: “Expensive natural gas was a major contributor to inflation over the past two years, pushing up the price of electricity and staying warm as well as manufacturing costs for fertilizer, steel, glass, aluminum, plastic and cardboard. Now, producers are trying to avoid swamping the market while traders and analysts are calculating how low prices will need to fall to spur the right mix of curtailments and demand to balance the market. American bill payers should benefit, especially once air-conditioning season starts. Lower natural-gas prices would also bolster companies’ bottom lines, which have been eroded by rising input costs.” READ MORE
The offices of the future may look quite different: “Workplaces that look like your living room; flexible, multI-use spaces; outdoor terraces. Today’s new hybrid work styles are reshaping the office buildings of tomorrow. Leading architects and real-estate developers are pioneering concepts aimed at workers who are splitting their time between home and office, and they predict these innovations will become mainstream in the years to come.”
“In a trend dubbed ‘resimercial,’ short for residential commercial, some office designers are going for an at-home vibe with fewer desks and more couches, armchairs, stools and bistro tables—even fireplaces. The goal is to make offices less corporate-looking and more welcoming to employees who have become accustomed to working in the comfort of their homes.”
“Equipment and instrumentation company NI Corp. (formerly National Instruments) is renovating its Austin headquarters to create a mix of large traditional conference rooms, small conference rooms, focus rooms and bookable areas of various sizes. Furniture is on casters to boost flexibility.”
“Outdoor terraces, greenery and access to natural light and windows are a major feature in plans for new buildings. While Covid concerns spurred some of the open-air ideas, they are also aimed at replicating what many employees enjoyed when working from home.” READ MORE
Here’s some rare good news about ransomware: “After ballooning for years, the amount of money being paid to ransomware criminals dropped in 2022, as did the odds that a victim would pay the criminals who installed the ransomware. With ransomware, hackers lock up a victim’s computer network, encrypting hard drives until victims pay. Alphabet’s Mandiant cybersecurity group said it had responded to fewer ransomware intrusions in 2022—a 15-percent decrease from 2021. CrowdStrike Holdings, another U.S. cybersecurity firm, said it saw a drop in average ransom-demand amounts, from $5.7 million in 2021 to $4.1 million in 2022, a decline the company attributed to disruption of major ransomware gangs, including arrests, and a decline in crypto values.”
“Companies have also stepped up their cybersecurity practices, driven by demands from insurance underwriters and a better understanding of the risks of ransomware following high-profile attacks. Companies are spending more money on business continuity and backup software that allow computer systems to restart after they have been infected.”
“Experts said that in some cases financially motivated hackers are migrating away from ransomware toward other methods of attacks, such as scams to obtain payment-card data.” READ MORE
Presso, an Atlanta startup, dry cleans clothes in a vending machine: “‘We actually invented an entirely new clothing-care process from scratch with compostable organic cleaning liquid that we synthesize in our own office with our own engineers, as well as new ways to stretch and press clothes,’ said Presso CEO Nishant Jain. First, the user positions a piece of clothing in the Presso machine and then enters information about its fabric and size. The process, however, takes only a few minutes and can cost up to 80 percent less than traditional dry cleaning, depending on the garment. Along the way, it consumes seven times less water and three times less electricity than traditional laundry and dry-cleaning services, according to the company. It also eliminates transportation to a cleaning facility. And all that reduces the carbon footprint of the clothing care by 93 percent, it added.”
“‘There are no hangers that are disposable, there’s no disposable plastic bags. None of the process of even doing logistics inside a dry cleaning facility, none of that exists anymore,’ said Jain.”
“Presso now has machines in a few boutique hotels and apartment buildings, but it is making a push into the big hotel brands, like IHG. It has machines now at two Holiday Inns and plans to expand to more IHG properties.” READ MORE
Machina Labs, a California startup, is building robotic blacksmiths: “Its primary focus is on saving industrial companies time and money by putting a robotic blacksmithing army at their disposal. ‘I never thought we’d see anything like this,’ says Bobby Walden, the owner of Walden Speed Shop, who has spent decades hand-making custom metal parts for cars. Walden has visited the Machina factory and reckons the robots are already good enough to replicate much of what he does, only without the arthritis and back pain. ‘I’m looking at this robot, and my brain starts going crazy,’ he says.”
“Machina founders Edward Mehr and Babak Raeisinia have metalworking experience, both as hobbyists and through careers spent at companies including Space Exploration Technologies and the aluminum recycler Novelis.”
“They started their current business, which has never publicly discussed its technology in detail, four years ago. The idea was to blend software, sensors, and metalworking tools into a system that could make all kinds of metal parts in a matter of hours, serving industries struggling to get parts quickly because of a dearth of skilled craftspeople.”
“‘I’ve got this line of car brakes and getting them into production has been a huge pain in the ass,’ says Walden, who is not a Machina customer. ‘It can take a year to get one prototype. Then I have one-off parts, and they can cost $60,000 to $200,000 for the dies and molds. With the robot, I can get the same thing in a couple of weeks and for way less money.’” READ MORE
Here’s how an accidental startup turned support for Ukraine into a real business: “Anyone who has read about the war in Ukraine on social media, or donated to charities there has likely come across a striking illustration of Saint Javelin. Designed to reference the religious icons in Eastern European Christianity, she’s draped in green, staring serenely back at the viewer. But she’s holding an anti-tank guided missile, a Javelin, diagonally across her chest. Saint Javelin’s blue halo is adorned with a yellow tryub, the three-pronged symbol of Ukraine, floating around her head. On Feb. 16, 2022, when the Russian invasion of Ukraine looked to be imminent, Christian Borys, based in Toronto, replicated the very niche meme of Saint Javelin on stickers. He began selling them via a simple website as a way to raise funds. Borys, a former journalist who ran his own marketing firm at the time, had hoped to raise $500 in total from his Saint Javelin sticker sales. He was stunned to make $1,000 on the first day. And the sales kept coming.”
“Over the past year Saint Javelin evolved from a scrappy sticker operation, to a full-fledged mission-based business. Saint Javelin now employees 15 people, nearly all living in Ukraine, and produces a line of apparel and products adorned with symbols in support of Ukraine, from tractors pulling tanks, to NAFO dogs, another humorous internet meme created by Ukraine supporters, to the classic tryub symbol.”
“Borys estimates Saint Javelin has donated $2.5 million over the past year to humanitarian charities and paid nearly $1 million to suppliers in Ukraine for goods and services used by Saint Javelin.” READ MORE
THE 21 HATS PODCAST: MARKETING WORKSHOP
Grayson Hogard Figured Out How to Sell Cookies on LinkedIn: This week, Shawn Busse and Loren Feldman are doing something a little different. This is the first in a series of episodes we’re calling Marketing Workshops. In an attempt to confront one of the biggest pain points business owners face, we’re offering a series of conversations with owner-operators about their marketing experiences: what’s worked and what hasn’t. We’re starting with Grayson Hogard, co-founder of Grove Cookie Company. For Grayson and his wife, Marie, the company is a bootstrapped side hustle, but in a very short time they’ve come to some very smart conclusions about their marketing that might seem counterintuitive at first. Most importantly, they’ve figured out that the most effective sales channel for their cookies is, of all places, LinkedIn.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren