Did It Have to Get Crazy at Basecamp?

In our latest 21 Hats Podcast episode, we assess the damage and search for lessons at the Chicago software company.

Good morning!

Here are today’s highlights: The restaurant relief fund is open but the cash isn’t expected to last. Automakers are done with just-in-time manufacturing. And does a new CRM program solve a longstanding problem?

THE 21 HATS PODCAST

Episode 60: Did It Have to Get Crazy at Basecamp? This week, Jay Goltz, William Vanderbloemen, and Dana White discuss Jason Fried, the embattled co-founder and CEO of Basecamp. Widely admired for building a tech company that didn’t take venture capital and didn’t pursue growth for growth’s sake, Fried is co-author of a book called It Doesn’t Have to Be Crazy at Work. All of which made it somewhat disorienting last week when things did indeed get crazy at Basecamp. It started when Fried published a blog post decreeing there would be no further discussion of political issues at the company, but it soon became clear that this was not just about coworkers arguing Trump vs. Biden. And by Friday, at least a third of the company’s 57 employees had resigned. In this episode, we go searching for lessons. 

• You can subscribe to The 21 Hats Podcast wherever you get podcasts.

GOVERNMENT SUPPORT

The relief fund for restaurants opened Monday but the cash is going fast: “Despite a few glitches after thousands descended on the application website for the Restaurant Revitalization Fund when it went live at noon, the process was fairly straightforward, applicants said. That was a welcome change from the technical problems that have plagued other aid programs run by the Small Business Administration, which is managing the restaurant fund. ‘It was impressively smooth,’ said Sarah Horak, who co-owns three bars and restaurants in Grand Forks, N.D. She was able to submit her first application just 10 minutes after she logged on to the website.”

• “For the first 21 days, the SBA will approve claims exclusively from businesses that are majority-owned by people who fall into one of the priority groups designated by legislators: women, veterans and individuals who qualify as socially and economically disadvantaged.”

• “That latter group includes those who meet certain income and asset limits and are Black, Hispanic, Native American, Asian-Pacific American or South Asian American.”

• “That three-week priority period alone is likely to exhaust the fund.” READ MORE

FOOD & BEVERAGE

A prominent NYC fine-dining restaurant, Eleven Madison Park, will reopen with an entirely plant-based menu: “There are some changes afoot at the triple-Michelin-starred Eleven Madison Park. When it reopens on June 10, the restaurant once known for its honey-lavender roast duck, orbs of celery root cooked in pig’s bladder, and seared foie gras, is going 100 percent free of animal products, the restaurant announced today.”

• “The new menu will feature a wildly flavorful beet dish—the product of a 16-hour process with ‘more than a dozen distinct steps,’ according to a preview of the menu from the Wall Street Journal’s magazine, WSJ—as well as a rice porridge with celtuce, and an amaranth-seed-and-sweet-pea course ‘served with a creamy fermented-almond cream and pea-miso purée, apparently the standout.” READ MORE

TECHNOLOGY

Gene Marks, a small business consultant, says he’s found customer relations software that solves a longstanding problem: “Most mainstream CRMs have integrations with many good third-party platforms and also use data connectivity tools. It’s kind of a requirement if you want to compete. But here’s where I learned something different: GreenRope’s integrations don’t cost any more. They’re built in. Don’t believe me? Take a look at the software’s pricing page where there’s an excellent comparison tool. Using that tool I found that, when taking a 20-user company with 50,000 contacts as an example, GreenRope says it would cost about $639 per month. That’s total for all the users. But that’s not all. This price also includes the cost of all the integrations available mentioned above, and more.”

• “The company’s pricing tool says that a comparative CRM offering the same integrations would cost as much as $23,650 per month (there is a disclaimer below saying they’re making ‘best estimates’).”

• “My company sells the popular CRM software Zoho and using their pricing for their Enterprise version the base cost for 20 users would be $800 per month. But remember—that’s not including integrations, which can add to the price significantly.” READ MORE

• PLUS: Here’s a 21 Hats guide to choosing and managing a CRM. 

Kroger is testing drone deliveries from a store: “The supermarket chain is partnering with Drone Express, a unit of Telegrid Technologies, to deliver groceries from a store in Centerville, Ohio, later this spring, the companies said in a statement Monday. The technology allows for deliveries of up to five pounds to customers’ homes or wherever they may be, enabling cookout supplies to be sent directly to a park in as little as 15 minutes, the companies said. They plan to expand the test to an additional store in California this summer.”

• “While drone delivery promises to reduce labor and fuel costs to make e-commerce fulfillment more profitable, hurdles such as weather, privacy and insurance remain sticking points.”

• “To date, UPS, Alphabet’s Wing, and Amazon’s Prime Air remain the only Federal Aviation Administration-sanctioned drone delivery operators.” READ MORE

THE 21 HATS CONVERSATION

Meet Rob Dyrdek, high school dropout, professional skateboarder, reality TV star, entrepreneur, and founder of the Dyrdek Machine: Rob looks for startup entrepreneurs that he guides through his Machine method, offering capital and expertise, to create real businesses. Since its founding in 2016, the Dyrdek Machine has created 14 brands with five exits totaling $450 million. Join our webinar conversation today at 3 ET to hear how he does it. Bring your own questions.

MANUFACTURING

Automakers move away from just-in-time manufacturing: “Toyota is stockpiling up to four months of some parts. Volkswagen AG is building six factories so it can get its own batteries. And, in shades of Henry Ford, Tesla is trying to lock up access to raw materials. The hyper-efficient auto supply chain symbolized by the words ‘just in time’ is undergoing its biggest transformation in more than half a century, accelerated by the troubles car makers have suffered during the pandemic. After sudden swings in demand, freak weather and a series of accidents, they are reassessing their basic assumption that they could always get the parts they needed when they needed them.” READ MORE

RETAIL

Malls are filling gaps by offering space to public schools: “Landlords are focused in particular on the nation’s 7,500 charter schools, which are public-funded institutions run independently of school districts. These schools usually have to find and finance their own buildings. In cramped cities and other places where land is scarce, charter schools and mall owners are finding common ground. Dozens of charter and other public schools have leased space in shopping centers, public records show.”

• “Until recently, real estate owners didn’t often see education providers as appealing tenants.”

• “Schools require more entrances and wider stairs than other renters. They also need room for a gymnasium and plenty of natural light, making renovations expensive.”

• “As a bonus, schools can bring added business to shopping centers. Parents of students at the Idaho charter school often shop and buy food at the mall.” READ MORE

HUMAN RESOURCES

As digital-health startups boom, the companies that buy their services are feeling overwhelmed: “Corporate-benefits executives, the main customers for these startups, say they are excited about technology that can lower costs and improve employees’ health. But the explosion of activity has spawned a glut of startups pitching redundant or overpriced services, they say. Benefits executives are pushing digital health companies to add services, merge with complementary companies and cut deals on pricing, pressure that the companies are responding to in order to stand out in the crowded sector. Numerous health apps promise to promote well-being, manage diabetes, improve sleep, monitor heart health, encourage weight loss and track whether patients are sticking to physical-therapy regimens, among others.”

• “Mental health, a growing area due in part to pandemic burnout, has spawned more than 100 startups, according to research from 7Wire Ventures, a venture firm.”

• “There are also apps to help employees navigate their company’s other digital-health apps.”

• “Measuring results for digital-health services is tricky, say benefits executives, in part because many services struggle to prove they can lower costs or improve care.” READ MORE

How do you hire the person responsible for encouraging diversity? “The sudden demand for specialists in diversity, equity and inclusion, or DEI, came amid a broader racial reckoning. But at many companies, it also reflected mounting frustration among minority employees ... who had been playing this role on a volunteer basis for years, often unpaid and with little support from senior management. Nearly a year later, the impact of the new class of DEI executives can be difficult to measure. A Glassdoor study released last week found Black employees are the least satisfied with their companies’ diversity-and-inclusion efforts.”

• “Large retailers tend to recruit DEI executives from a small pool of professionals who have played similar roles elsewhere, said Kyle Rudy, a partner at executive placement firm Kirk Palmer Associates.”

• “Other companies tap executives with a background in human resources, legal or procurement. Some appoint an employee who has shown passion on the issue, turning a volunteer role into a formal position.”

• “The ideal DEI leadership candidate is ‘somebody who has the ability to influence at all levels of the organization,’ said Keri Gavin, partner and DEI practice leader at executive search firm Hanold Associates.” READ MORE

If you see a story that business owners should know about, hit reply and send me the link. If you got something out of this email, you can click the heart symbol, you can click the comment icon below, and you can share it with a friend. Thanks for reading, everyone. — Loren