Bring Your Own Fork
New York’s restaurants are finally free to open at full capacity but they're having supply-chain issues.
Good morning!
Here are today’s highlights: There’s actually not a lot of evidence that bringing people together in an office increases creativity. Restaurants are finding local delivery options. And Amazon says Prime Day was a big win for small businesses.
ECOMMERCE
Was Prime Day a big win for small businesses? Or is it pay-to-play? “Amazon said this year’s Prime Day shopping blitz resulted in the ‘two biggest days ever’ for independent merchants that sell on its website, without providing specifics. The e-commerce giant’s announcement followed the conclusion of its second Prime Day in eight months after moving last year’s shopping holiday to the fall because of the pandemic. Amazon doesn’t report its total sales during Prime Day, but the retailer in October said sales by its third-party sellers surpassed $3.5 billion for the 2020 event.”
“Amazon said Wednesday that customers spent $1.9 billion on small-business products during a Prime Day promotion that enables shoppers to receive a $10 credit if they spend $10 on the website’s small-business section, more than double the tally during the October event. The company didn’t provide a total figure spent on small businesses.” READ MORE
Not all small-business owners see Prime Day as a boon:. Meaghan Thomas, co-founder of Pinch Spice Market, says this is the last year her Louisville-based spice company will be participating in the annual sale because she can no longer justify the ad spend. She has run Prime Day campaigns for her business since 2019, spending thousands of dollars on ads and marketing with diminishing returns each year, she says.”
“‘We really start to question whether we have to pay-to-play on Amazon,’ Thomas says. ‘When it comes to where my advertising dollars go, the numbers don't add up for me.’ Spending advertising dollars on other platforms, such as social media and email campaigns, has proved to be a more cost-effective way of driving sales, she says.” READ MORE
FOOD & BEVERAGE
High fees are spurring restaurants to choose local delivery options over Uber, Grubhub, DoorDash: “Drawing on his experience persuading rival hospitals to cooperate, [Jon] Sewell started Chomp, a delivery service that now works with almost 200 restaurants in Iowa City and nearby Cedar Rapids. Restaurants pay commissions of 15 percent, and drivers earn an average of almost $20 an hour. After Chomp gained traction, friends in Fort Collins, Colo., asked for help setting up a similar service called Nosh. Last year, seeking to build on those successes, Sewell created LoCo Co-ops, a company that sells technology and know-how to restaurants interested in establishing delivery cooperatives.”
“LoCo operates in Las Vegas, Omaha, and Knoxville, Tenn., with three more cities in the works.”
“‘There’s nothing that DoorDash, Grubhub, and Uber Eats do that can’t be replicated locally and operated at a much lower cost,’ Sewell says. ‘There’s no need to send all this money to a bunch of venture capital-backed firms in California and Chicago who managed to figure out how to get between restaurants and their customers.” READ MORE
New York’s restaurants are running into supply-chain issues, including for cutlery: “When veteran New York City restaurateur Jeffrey Bank recently looked to replace some of the aging silverware at his establishments, he got a surprising response from his supplier: The pattern he has used for decades was no longer in stock. ‘I thought he was just jazzing me,’ said Mr. Bank, who is chief executive of Alicart Restaurant Group, the company behind Carmine’s, the popular Italian dining spot with locations in Manhattan and elsewhere. Mr. Bank said jokingly that he almost considered going the BYOF—as in ‘bring your own fork’—route with customers.”
“Eventually, he was able to find another silverware pattern he liked, albeit at a higher cost. He added that his supply-chain issues are hardly contained to cutlery, noting that everything from kitchen equipment to certain foods are hard to find.”
“Countless other restaurateurs in the metropolitan area are facing similar dilemmas.” READ MORE
HUMAN RESOURCES
We all know that bringing people back into the office will encourage creativity. Right? “When Yahoo banned working from home in 2013, the reason was one often cited in corporate America: Being in the office is essential for spontaneous collaboration and innovation. ‘It is critical that we are all present in our offices,’ wrote Jacqueline Reses, then a Yahoo executive, in a staff memo. ‘Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people and impromptu team meetings.’”
“Today, Ms. Reses, now chief executive of Post House Capital, an investment firm, has a different view. ‘Would I write that memo differently now?’ she said. ‘Oh yeah.’ She still believes that collaboration can benefit from being together in person, but over the last year, people found new, better ways to work.”
“People who study the issue say there is no evidence that working in person is essential for creativity and collaboration. It may even hurt innovation, they say, because the demand for doing office work at a prescribed time and place is a big reason the American workplace has been inhospitable for many people.” READ MORE
OBITUARY
John McAfee, the software entrepreneur, died in prison, apparently a suicide: “John McAfee, the eccentric British American software entrepreneur who sold his namesake anti-virus company in the 1990s and embarked on a globe-trotting life of bizarre and often allegedly criminal pursuits while embracing the persona of a gun-toting rogue and outlaw, was found dead in his prison cell near Barcelona on June 23. He was 75.”
“Hours before Mr. McAfee’s death, a Spanish court issued a preliminary ruling authorizing his extradition to the United States on tax evasion charges.”
“In the 1980s, as personal computers became mainstream and malware started to emerge, Mr. McAfee, then a successful engineer in Silicon Valley, devised a way to block the Brain virus, considered the first virus to target IBM PCs.”
“He purposely infected his PC with the virus and then wrote a program to disable the invader. That program became the basis for his company, which he started in 1987 out of his 700-square-foot home in Santa Clara, Calif.”
“Within five years, McAfee Associates controlled nearly 70 percent of the desktop anti-virus market.Half of all Fortune 100 companies were using his software, and Mr. McAfee was making $5 million a year.” READ MORE
THE 21 HATS PODCAST
Episode 65: This Is Where We Get Into Therapy: Once again this week, our business owners discuss things business owners don’t often talk about in public. Laura Zander, for example, says she feels guilty about taking vacations, about making more money than her employees, and about knowing that her husband is closer to their son than she is. Paul Downs says he recently reviewed 29 years of P&Ls and was reminded that he lost money in 18 of those years. He also explains why he routinely tells his employees (and us) precisely how much money he takes out of his business. This week, we also set a podcast record for use of the phrase, “Oh, my God!”
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