‘Anything Besides Yelp’
Tom Colicchio is one of several investors in a restaurant-software startup called Tattle: “I mean, when you have restaurants that haven’t opened yet getting reviewed, you know something is wrong.”
Good morning!
Here are today’s highlights:
Companies are finding that annual raises are not enough.
Everyone wants a drive-through lane, but the real estate is getting scarce.
A Twitter thread offers a reminder: Don’t be dependent on one platform.
In the 50 largest U.S. metro areas, median rent rose almost 20 percent from December 2020 to December 2021.
STARTUPS
A well known restaurateur is investing in an app to give restaurants an alternative to Yelp: “Restaurateurs aren’t fans of letting anyone and everyone write online reviews—screeds, in some cases—about their meals. Yes, online reviews can be helpful in some cases, but they can also be woefully uninformed or fraudulent. ‘I mean, when you have restaurants that haven’t opened yet getting reviewed, you know something is wrong,’ [Tom] Colicchio said. As a restaurant owner and investor, Colicchio has long been interested in finding alternatives to Yelp and other services to collect feedback from diners. Before the internet era, it involved asking customers to fill out paper comment cards (a practice that many restaurants still follow).”
“He’s among several investors in restaurant software startup Tattle, which said Tuesday it had raised $5.5 million in a Series A round led by Contour Venture Partners.”
“Tattle’s software lets restaurants send online surveys to their customers to learn about what they liked and didn’t like about their meals, and the quality of the service they received.”
“Restaurant managers can then tap the service for analysis of the feedback to uncover trends, such as a pizza chain learning that customers are upset about the bad service during the afternoons at a particular location.”
“‘Anything besides Yelp,’ Colicchio said.” READ MORE
HUMAN RESOURCES
Companies are finding that in a labor shortage, annual raises are not enough: “The demand for U.S. workers has led some manufacturers, technology firms and other employers to ditch the annual raise and switch to more frequent pay reviews as they compete for talent and keep pace with rising wages. CoorsTek, a maker of industrial ceramics, last year started doing quarterly pay reviews, primarily to ensure it could hire and retain workers for critical and hard-to-fill manufacturing roles such as production operators and maintenance mechanics. The Golden, Colo.-based company hired around 1,300 people in the U.S. last year, and bringing on new people often meant paying above its usual ranges.”
“Wages climbed 5.7 percent in January from a year earlier, government data show, nearly double the average gain before the pandemic hit.”
“Full off-cycle salary reviews remain relatively rare, surveys show, and executives say companies can turn to other options, such as using one-time bonuses, expanding benefits or adding vacation days, to help retain workers without boosting wages.”
“In October, Brian de Haaff, chief executive and co-founder of software maker Aha! Labs, appeared on the company’s weekly Friday video call to tell its more than 100 employees that they would all be receiving a 10 percent raise, regardless of their tenure at the company.”
“Instead of issuing one profit-sharing check to employees annually, the company last year split the payments into two, so employees can see the results of their work sooner. ‘Waiting for an entire year is a long time,’ Mr. de Haaff said.” READ MORE
The Great Resignation has reached the clergy: “They say the job, always demanding, has become almost impossible during the pandemic: Relationships with and among parishioners have frayed while meeting only over video, and political divisions have deepened, fueled by fights over Covid-19 protocols. Though no national data about clergy resignations exists, an October study from the Barna Group, which studies faith in the U.S., found that 38 percent of pastors were seriously considering leaving full-time ministry, up from 29 percent in January 2021. Among pastors under age 45, nearly half were considering quitting.”
“For eight years, Keith Mudiappa accepted the challenges of serving as pastor at his nondenominational Minneapolis church—the 70-hour workweeks, the low pay, the calls from parishioners at all hours—in exchange for the joy of seeing people come to the faith.”
“But the rewards of the job were tough to come by during nearly two years of online-only services. Late last year, Mr. Mudiappa quit and moved with his wife and children to Florida. He now works at a bank.”
“‘I decided I wanted to take care of my family,’ he said. ‘I don’t think I could do that in a church setting.’” READ MORE
SOCIAL MEDIA
Here’s a devastating Twitter thread on how over-reliance on one platform destroyed a promising startup:
Facebook has rolled out its TikTok knock-off to all users: “Meta Platforms ramped up its counterattack against TikTok by launching its short-video product Reels for all global Facebook users on Tuesday and introducing many new features for advertisers. In one of a number of business challenges facing the social-media giant, Meta is in the midst of an intensifying battle with TikTok, which was the most-downloaded app of 2021 and overtook Instagram in popularity among coveted young users. Meta has also been buffeted by the impact of a privacy feature introduced by Apple last year that disrupted its digital-advertising business.”
“Meta on Tuesday will also begin testing new ads that will run alongside Facebook Reels from all creators in the U.S., Canada, and Mexico as well as ‘more countries in the coming weeks,’ the company said in a blog post.” READ MORE
MARKETING
Want to understand how brands will use the metaverse? Look at how they’re already using a platform called Roblox: “Take Forever 21, which joined the platform in December. The retailer, which is owned by Authentic Brands Group, created ‘Forever 21 Shop City,’ where users can manage a digital store and compete to become the top shop. Participants customize the look of their store and complete tasks like stocking inventory, operating the cash register, hiring employees and assisting customers. The fast fashion retailer's objective is to gamify fashion and encourage players to express their individuality by running, and customizing, their digital spaces.”
“Products can be purchased for users' avatars with monthly ‘metamerch’ drops — namely, apparel, makeup and accessories.”
“But some products can be purchased in real life. A page on the retailer's website dedicated to the partnership currently includes a quilted zip-up puffer vest, a colorblock shoulder bag, a cable knit sweater dress, and high-rise jeans, among other items.” READ MORE
COMMERCIAL REAL ESTATE
These days, everyone wants a drive-through lane: “Interest in drive-through real estate was growing even before Covid-19, but it exploded last year when total sales volume for restaurants, pharmacy and bank properties hit a record $12 billion, according to data firm CoStar Group. That represents a 43 percent increase from 2019 and a doubling in sales from 2012. Coffee and fast-food customers gravitated to drive-throughs in the early months of the pandemic, when dining rooms were closed and fear of infection kept people in their cars.”
“As time went on, many realized they enjoyed the convenience of drive-throughs, especially now that mobile ordering reduces wait time and the need to yell into a speaker ...”
“The migration from cities to the suburbs has also boosted drive-through business, Mr. Hottovy said. And these properties offer companies the opportunity to cut costs in terms of square footage and staffing, he said.”
“Dutch Bros, an Oregon-based company that sells coffee and energy drinks, exemplifies the advantages of serving customers in their cars, Mr. Hottovy said. Visits to the chain’s locations, which are almost exclusively drive-through, were up more than 50 percent last year compared with before the pandemic, according to Placer.ai data.”
“The scramble for drive-throughs is driving prices up nationwide, according to CoStar data. The average property sold for $392 a square foot last quarter, about 7 percent higher than during the same period two years earlier.” READ MORE
LITIGATION
The Supreme Court will decide whether a web designer can refuse to work on same-sex weddings: “The court has yet to rule squarely as to whose rights—the LGBT community’s or religious conservatives’—must yield when they directly conflict. The Colorado case granted Tuesday, to be argued in the court’s next term and likely decided by June 2023, suggests the justices may be ready to address that issue. Tuesday’s order phrased the question before the court as ‘whether applying a public-accommodation law to compel an artist to speak or stay silent violates the Free Speech Clause of the First Amendment.’”
“A Littleton, Colo., company, 303 Creative, and its owner, Lorie Smith, filed suit seeking an exemption from the state Antidiscrimination Act, which requires most shops and other businesses to treat customers equally without regard to factors including race, religion, sex, age, disability and sexual orientation.”
“Ms. Smith said she plans to begin offering wedding websites but that her religious beliefs preclude her from doing so for same-sex couples.”
“Federal courts in Colorado, however, found no First Amendment exemption for Ms. Smith, even if other website designers were willing to serve same-sex couples.” READ MORE
Black farmers have yet to receive promised debt relief: “For Brandon Smith, a fourth-generation cattle rancher from Texas, the $1.9 trillion stimulus package that President Biden signed into law nearly a year ago was long-awaited relief. Little did he know how much longer he would have to wait.The legislation included $4 billion of debt forgiveness for Black and other ‘socially disadvantaged’ farmers, a group that has endured decades of discrimination from banks and the federal government. Mr. Smith, a Black father of four who owes about $200,000 in outstanding loans on his ranch, quickly signed and returned documents to the Agriculture Department last year, formally accepting the debt relief. He then purchased more equipment for his ranch, believing that he had been given a financial lifeline.”
“Instead, Mr. Smith has fallen deeper into debt. Months after signing the paperwork he received a notice informing him that the federal government intended to ‘accelerate’ foreclosure on his 46-acre property and cattle if he did not start making payments on the loans he believed had been forgiven.”
“‘I trusted the government that we had a deal, and down here at the end of the day, the rug gets pulled out from under me,’ Mr. Smith, 43, said in an interview.”
“The law was intended to help remedy years of discrimination that nonwhite farmers have endured, including land theft and the rejection of loan applications by banks and the federal government.” READ MORE
THE COVID ECONOMY
The rents really are too damn high: “Rents have exploded across the country, causing many to dig deep into their savings, downsize to subpar units or fall behind on payments and risk eviction now that a federal moratorium has ended. In the 50 largest U.S. metro areas, median rent rose an astounding 19.3 percent from December 2020 to December 2021, according to a Realtor.com analysis of properties with two or fewer bedrooms. And nowhere was the jump bigger than in the Miami metro area, where the median rent exploded to $2,850, 49.8 percent higher than the previous year.”
“Other cities across Florida — Tampa, Orlando and Jacksonville — and the Sun Belt destinations of San Diego, Las Vegas, Austin, Texas, and Memphis, Tennessee, all saw spikes of more than 25 percent during that time period.”
“Things have gotten so bad in Boston, which has nearly overtaken San Francisco as the nation’s second-most expensive rental market, that one resident went viral for jokingly putting an igloo on the market for $2,700 a month: ‘Heat/ hot water not included.’”
“Experts say many factors are responsible for astronomical rents, including a nationwide housing shortage, extremely low rental vacancies, and unrelenting demand as young adults continue to enter the crowded market.” READ MORE
THE 21 HATS PODCAST
We Don’t Have a Brand: This week, Paul Downs talks about why furniture makers traditionally have not stamped their names prominently on their work—and why he’s rethinking that now. That change of heart is the direct result of Paul’s unlikely experience connecting two very different businesses: One a Mennonite company manned by master craftsmen, and the other a startup manned by tattooed hipsters with a mastery of Kickstarter. Not only has the resulting culture clash changed the way Paul thinks about his own business, it’s also the subject of a book he’s writing.”
“In this conversation, Paul explains what he’s up to, how he plans to double his revenue, why he’s thinking about trying TikTok, and how he feels about his son’s success in the alternative reality of venture-backed startups.
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