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How the Sausage Is Made
Today’s Highlights: Restaurant tech heats up. Zoom invests in Zoom-based startups. And hybrid offices present two problems that will be tricky to solve.
THE 21 HATS PODCAST
Episode 58: How the Sausage Is Made: In this week’s conversation with Karen Clark Cole, Jay Goltz, and Stephanie Stuckey, we once again unearth more questions than answers—mostly because there are rarely one-size-fits-all answers to the questions we discuss. This week, those questions include: Can you be friends with your employees? Can you work with your family? How are you coping with price increases in your supply chain? How do you handle shipping—especially given the example set by Amazon? Are refrigerated trucks really called “reefer” trucks? And what happens when employees question whether you should be doing business with a particular person or company? Plus: Jay turns 65 without a succession plan.
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Restaurant tech has become a very hot sector and saved a lot of restaurants: “Dozens of companies have either started or scaled up sharply as they found their services in urgent demand. Meanwhile, investors and venture capitalists have been sourcing deals in the ‘restaurant tech’ sector — particularly seeking companies that bring the big chains’ advantages to independent restaurants.”
“The new firm, Table22, would help chefs develop and market subscriptions for monthly meal kits and wine clubs, for example, and then manage the sales, recurring billing, scheduling, data analytics and more. In exchange, Table22 takes a percentage of each transaction. Table22, which is based in New York, went live with its first restaurant in May. Since then, it has grown to more than 150 restaurants in 50 cities.”
“[One Table22 client] was impressed by the low service fee and the fact that Table22 shared customer data. She started the service in October, hoping for 30 sign-ups; 100 people joined. Ms. Allison now has 300 subscribers and five employees working on the make-at-home cocktail boxes.
“‘This will 100 percent stay in the future,’ she said. ‘I love this program. I thought it might cannibalize my to-go business, but it hasn’t at all.’” READ MORE
You may find that restaurants are looking a little different: “Lance Saunders, director of design at Philadelphia firm Stokes Architecture & Design, has envisioned hospitality spaces for 15 years. He’s spent the past year contending with the pandemic and, like most everyone else in every other industry, pivoting, innovating, and reimagining. Saunders and his team have designed and constructed dozens of ‘streeteries,’ or street eateries, around Philadelphia and Washington, D.C.”
“Saunders predicts the firm will be designing restaurants with a slightly smaller capacity for seating, allocating each diner, say, 30 or 40 square feet of space instead of 10.”
“‘I don’t know if beer halls are going to be as trendy as they were 10 years ago,’ Saunders says. ‘I don’t know if there’s going to be 50-foot bars with 100 people standing at them anymore.’”
“Large, heavy, bolted-down built-ins are out; modular pieces that offer options and adaptability are in.” READ MORE
Zoom is investing $100 million in Zoom-based startups: “Zoom has become a platform, and now Zoom wants to invest in it: It created a $100 million Zoom Apps Fund, with plans to invest anywhere from $250,000 to $2.5 million in companies across the video spectrum. Zoom CTO Brendan Ittelson didn't offer much in the way of details, except to say that it's still very early — Zoom Apps as a concept has only been around since October — and that he doesn't want to limit the Zoom Fund's purview.”
“Amazon committed $200 million to its own Alexa Fund, for instance, and Google has invested in lots of Google Assistant-related startups.” READ MORE
Ranking the 10 best states in which to start a business: “It might be the right time to start a new venture for many people, and where you launch can determine certain perks or challenges you'll encounter. Swyft Filings, an online business incorporation and compliance provider that helps entrepreneurs start and grow their new companies, built a state-by-state analysis to rank the best entrepreneurial environments. To determine the list, they looked at factors and data points such as business survival rates, filing fees, tax rates, and cost of living.”
“Texas took the lead spot — thanks to its low cost of living and high rate of entrepreneurship — as high-profile founders flee expensive coastal hubs for the Lone Star state.”
“Meanwhile, Washington, D.C., ranked last due to the area's high filing fees and taxes.” READ MORE
Big companies are pouring money into old-fashioned digital advertising: “Digital media executives scrambled last year to tell their boards about their new subscription products, but something strange happened: Their old, unfashionable advertising businesses exploded as consumers stayed home and shopped online. And now, travel companies, liquor companies and basically everyone else hoping to capitalize on a wide open summer and the marketing dream of a post-pandemic Roaring Twenties economic boom have begun pouring money into advertising on virtually every platform, but digital media most of all.”
“‘Ad spending is red-hot right now,’ says Henry Blodget, a co-founder of Insider (formerly Business Insider), which was early to introduce a subscription tier in 2017. ‘The economy is cranking up, travel and leisure are coming back, and consumers are emerging from their pandemic cocoons.’”
“‘The venture capital world spent a decade betting against advertising, and it’s about to blow up in their faces,’ predicted Bryan Goldberg, the chief executive of Bustle, which has bought brands including Mic and Nylon, and is planning to restart Gawker.” READ MORE
THE 21 HATS CONVERSATION
It's Not Always About the Marketing: A lot of business conversations start with the urgent question, How can I attract more customers. But sometimes, the real issues go deeper. Sometimes, before you can figure out how to sell, you have to figure out who you are. Join us TODAY at 3 ET for a conversation with two people who learned this the hard way: Shawn Busse, CEO of Kinesis, and David Nichols, CEO of Loupe. Bring your own questions!
Research suggests that as offices reopen, companies that choose a hybrid model will confront two issues: “Anytime you have a meeting with some people on Zoom and some in person, now that's a real pain and doesn't work. Then firms say, 'Aha, we've solved it! We're going to have everyone connected from a laptop!' But that still has its problems. As soon as the laptop goes down, everyone at work stands up and wanders to get a coffee together and chat. So mixed mode is very hard to fix. There's an in-group and an out-group.”
“The other problem that's much more pernicious is what I would call the diversity issue. … If you look at who is choosing to work from home five days a week, it's not random.”
“If you look at college graduates with kids under the age of 12, which is almost half the workforce actually, then women have almost 50 percent higher preference to work from home five days a week than men.” READ MORE
While people have indeed been leaving New York and San Francisco, the great Covid migration seems to have been overblown: “About 30 million change-of-address requests to the U.S. Postal Service in 2020 show that with these two very visible exceptions — and a few smaller ones — migration patterns during the pandemic have looked a lot like migration patterns before it. Some smaller regional metro areas and vacation hubs benefited. But in general, areas that were already attracting new residents kept attracting them. Those that were losing migrants lost more. And there are few examples, at least in the data so far, of previously down-and-out regions drawing people in.”
“In short, as disruptive as the pandemic has been in nearly every aspect of life, it doesn’t appear to have altered the underlying forces shaping which places are thriving or struggling.” READ MORE
The chip shortage will not ease any time soon: “Chip makers are trying to eke out more supply through changes to manufacturing processes and by opening up spare capacity to rivals, auditing customer orders to prevent hoarding and swapping over production lines. The bad news is, there are no quick fixes, and shortages will likely continue into next year, according to the industry’s executives.”
“Semiconductors are the lifeblood of many industries—ranking as the world’s fourth-most traded product counting imports and exports, after crude oil, refined oil and cars.”
“Some buyers say they face delays of half a year or longer. ‘You ask on Monday, it’s a 12-week lead time. Then you ask on Wednesday and it’s a 27-week lead time,’ said Liam Bates, chief executive officer of Kaiterra, a Swiss-based maker of air-quality tracking devices.”
“Kaiterra, which manufactures in southern China, is beefing up contingency plans to make its supply chain ‘future-proof.’ Engineers who focus on building new products now allocate a chunk of time to redesigning existing ones to operate on different chips, in case the ones needed don’t arrive.” READ MORE
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