'I've Made a Huge Mistake'
Today’s Highlights: Why some tech startups are bringing everyone back to the office. How important is the name of your business? And seeing signs of hope 30 years after the ostrich bubble.
REOPENING
Some tech startups can’t wait to return to the office: “For a tech guy, Mike de Vere, chief executive of fintech software startup Zest AI, has a contrarian return-to-work plan for his 100 employees: he wants them in the office full time. Mr. de Vere said having employees together in the Burbank, Calif., headquarters improves communication, builds trust and allows for them to absorb knowledge from more experienced colleagues. ‘We believe that we will be our best selves the more that we are together,’ he said. As more tech companies leverage the promise of flexible work arrangements as a competitive advantage, some are going the opposite route, betting that a strong office culture is what will help them recruit and retain the best talent.”
“Mr. de Vere said he’s not worried about losing skilled workers to companies with more flexible arrangements. Young professionals will want to learn from talented veterans in person, he said.”
“Alex Tapper, an engineer with the San Francisco-based software startup Retool Inc., said he’d be hesitant about working for a company using a hybrid model. He anticipates it will create more overhead, miscommunication and ultimately lead to management imposing more rules and oversight.”
“‘It’s like one foot in, one foot out,’ he said. ‘You have to pick a lane.’” READ MORE
And some companies aren’t even considering going back: “Phil Libin, the founder of Evernote, All Turtles, and upstart video-presentation platform Mmhmm, says having gone all-virtual has given his company superpowers—and he's not willing to give those up by returning to a physical office. He has vowed with his most recent two companies that his teams will never return to offices post-pandemic. The first superpower he cited was the ability to hire talent not just locally—but anywhere in the world. ‘All of our job listings say global,’ he said Wednesday. ‘I'm never putting the 'in' back in place.’
“Second superpower: not commuting. "Why would I ever give up the superpower of giving every person on my team two extra hours a day?"
“And third: helping employees avoid the extreme expense of housing in major cities. ‘Why could every person on my team not live in a nice house with a nice school district, if that's what they want?’ he says.” READ MORE
OPPORTUNITIES
Thirty years ago, Texans lost their minds—and their shirts—investing in ostriches: “The oldest birds in the paddock date back to the early eighties, when [Boyd] Clark was first starting out as an ostrich farmer. The birds and Clark are some of the few survivors of one of the most extraordinary bubbles in Texas and American agricultural history: a brief period in the early nineties when rural Texans went crazy for emus and ostriches. The notion that there was a vast untapped market for ostrich meat and ostrich leather drove countless Texans, from hobby ranchers to big-time investors, to buy and breed the big, goofy birds. Unwary doctors and lawyers put their savings into flipping ostriches; trucks full of nervous birds trundled toward slaughterhouses, where inexperienced processors struggled to harvest valuable hides. By 1995 the industry was a smoking ruin. Many of its proponents had filed for bankruptcy, and the idea of the American ostrich was a punch line—one more speculative nineties bubble, like Beanie Babies or the dot-com boom.”
“The year 1993 proved to be the high-water mark for ostrich mania. The ostrich association estimated that 50,000 birds roamed on 3,500 farms across the United States that year.”
“Speculators had also roped in the Australian emu: breeding pairs hit $40,000 at the peak of the bubble, and emu farms proliferated rapidly across the Texas countryside, eventually outnumbering ostrich operations.”
“Clark weathered the storm: he kept his operation small, kept his day job, and kept his birds. Today, he’s one of just a few veteran ostrich breeders who believe the industry may still have a future.” READ MORE
READER FEEDBACK
On Saturday, we asked 21 Hats subscribers what question they would ask a board of experienced entrepreneurs: Patrick Sonnett commented that he would ask how you know when it’s time to throw in the towel, which brought this response from Deb Weidenhamer: “As someone who held onto my business too long and risked so much in doing so, your question is one that should be asked. First it is important to remember your identity is not your product or service. Part of you is an entrepreneur (who may be looking for a new opportunity) but there is a complexity to all of us that makes our complete picture. Are you listening just to the business owner or are you hearing the ego part concerned with the world’s view of your success or failure? What series of events would need to take place for you to not give-up and are they possible? As entrepreneurs we need to appreciate that each business venture is akin to earning a university degree where sometimes we only receive a piece of paper in the end but are prepared to execute quickly and effectively the next opportunity.” READ MORE
GOVERNMENT SUPPORT
After even more confusion, the SBA now says it will begin taking applications for shuttered-venue grants today at noon ET: “Late Thursday, the agency announced that it would reopen its application system for the Shuttered Venue Operators Grant on Saturday. After heavy pushback from angry applicants — especially Jewish business owners who do not use electronics on Saturdays in observation of the Sabbath — the agency changed course Friday night and rescheduled the reopening for Monday. ‘We understand the challenges a weekend opening would bring, and to ensure the greatest number of businesses can apply for these funds, we decided to reschedule,’ the agency said in a statement. ‘We remain committed to delivering economic aid to this hard-hit sector quickly and efficiently.’”
“The money will be awarded on a first-come-first-served basis and is widely expected to run out fast.”
“That means many applicants will feel pressure to submit paperwork as soon as the application system opens — even if it is at an inconvenient time.” READ MORE
FINANCE
Some investment funds are looking to support family businesses: “Family Legacy Capital structures its investments, which are all in the United States, as loans to family businesses that have $25 million to $100 million in revenue. The investments range from $10 million to $50 million and will last three to five years, though the fund expects many of the families to pay back the money in half that time as their businesses improve. The fund expects annual returns in the low double digits, which is far higher than the investors could get with regular debt investments. But the higher returns take into account the higher risk that comes with investing in struggling businesses. Still, since the investments are secured by assets of the businesses, the fund’s investors have recourse should families struggle to repay loans.”
“‘The low risk is a critical component for the families that invest in these companies,’ said Hendrik Jordaan, chairman and founder of Family Legacy Capital. ‘We’re bringing not only the capital but the family ethos.’”
“One of Family Legacy Capital’s first investments was in a group of high-end hotels on the West Coast that had tapped out its bank loans.”
“The company had been owned by the same family for decades but was in danger of closing as guests disappeared in the pandemic.” READ MORE
ECOMMERCE
Amazon is testing a tool that shares a little data with third-party sellers: “Last week, Amazon began piloting a tool that enables U.S. companies that are part of its Brand Registry program to email marketing materials to shoppers who have opted to ‘follow’ their brands. These companies can then notify those shoppers when they launch a new product or promotion. The follow button is featured in areas such as a businesses’ store page and videos on Amazon Live, Amazon’s livestream shopping platform.”
“Amazon has long prohibited businesses that sell on its site from soliciting customers directly, keeping data such as their email addresses private, largely to shield shoppers from spam.”
“Merchants could communicate with shoppers via a messaging feature on Amazon’s site, but only when it concerned things such as the status of their order.” READ MORE
MARKETING
Does it really matter what you name your business? “Jamie Siminoff launched Doorbot, a startup that made doorbells with video cameras in them so users could see who was outside from wherever they were. It was a great idea and a great product, but the name was holding the business back. ‘People would bring it home and the spouse would say, I'm not putting a Doorbot on my door!’ he recalls. ... One day, Siminoff was practicing his pitch in front of an early Doorbot investor. ‘I kept referencing rings of security, ringing doorbells, ring of this, ring of that, throughout the presentation,’ he tells Inc. ‘When I finished the pitch, the investor said, You keep saying ring—just call it Ring!’”
“Shore recommends several free word-related sites: RhymeZone (which offers a lot more than rhyming help), Wordnik, and OneLook. All these sites will help you find new synonyms for words, and associated ideas.”
“For example, RhymeZone lets you search for definitions of other words that include your target word. That search on fast led to a lot of related words such as kudzu, wahoo, and foxtrot.”
“‘Your domain name matters very little,’ he says. ‘A study was done a few years ago showing that 97 percent of the time, people get to a website by way of a search engine. No one is typing an address into an address bar from scratch.’”
“Eventually, he says, when you choose a name and start using it, ‘Everyone grows to love it. And no one remembers not liking it.’” READ MORE
RETAIL
Was opening a small-town bookstore during the pandemic a crazy thing to do? “In January of last year, my wife and I put our life savings down on a 140-year-old building on Main Street in Bastrop, a small town outside Austin—East of Weird goes the slogan—where we’ve lived since 2015. We’d spotted the storefront, which is part of the National Register of Historic Places, while having breakfast one morning at Maxine’s Cafe, just across the street and a few doors down. By February we’d hired our first employees and started renovations. We envisioned hosting events, welcoming customers from the community, and drawing people to this beautiful street on the bluffs of the Colorado River. Yet by the first week of March, what began with such excitement found me, for obvious reasons, standing between the empty brick walls thinking of that Arrested Development line: I’ve made a huge mistake.” 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