Maybe I’m Not Ready for Costco
A conversation with Carey Smith, founder of Big Ass Fans, convinces our contributor she has work to do.
Good morning!
Here are today’s highlights:
Parking garages are being reinvented.
The latest shortage? Patio furniture.
Can’t hire enough employees? Have you tried a four-day workweek?
RETAIL
Maybe I’m not ready to sell to Costco: “My COO would say that I have a bad history when it comes to purchasing inventory,” writes 21 Hats contributor Liz Reisch Picarazzi. “And he would be right. In one of the reports he created upon joining the business last year, he showed 26 ‘months of supply’ for a particular product for which I had had high hopes. I called it ‘planning for success. My COO called it ‘overstock.’” Before she thinks about selling to Costco, Liz says, she has to figure out her supply-chain and inventory issues. READ MORE
STARTUPS
Parking garages are being disrupted: “The owners of FlashParking, a company in Austin, Texas, that provides software and hardware for garages, see the future of driving — and, not coincidentally, parking — as a digitally centered platform that, in a very broad (and rather utopian) sense, could relieve congestion, pollution, anxiety and a few other things. Among their ideas is to move vehicles that do a lot of cruising around or idling — like those on Uber shifts and Amazon, FedEx and UPS trucks — into a restful parking spot in a ‘silo’ equipped with a restroom and a food truck.”
“‘You only got to run in and deliver two packages?’ asked Flash’s marketing executive, Neil Golson. ‘I got a spot for 15 minutes, and here’s a special price. That’s the evolution we’re enabling: Get people off the street and into the lot.’”
“Mr. Sharplin’s organization, which he describes as SaaS — software as a service — needs partners. In fact, Flash doesn’t own the garages or the thousands of other parking locations across the country that it supplies, he said.”
“‘But,’ Mr. Golson added, ‘we do own the infrastructure: the hardware that makes the gates go up and down, the scooters, the E.V. charging stations.’”
“And there are other partners in the mix: the automakers. Flash is working with more than a dozen of them to integrate parking apps, Mr. Golson said.” READ MORE
LOGISTICS
The latest shortage? Patio furniture: “As America hurtles out of the July 4th weekend into the heart of summer, the outdoor furniture industry provides a snapshot of the dilemmas confronting the economy. A series of shortages has left warehouses depleted and prices rising at more than 11 percent annually as Americans resume BBQs and parties after more than a year of isolation. The industry cannot find workers, truckers and raw materials — a consequence of not just government spending but crowded ports, an explosion at an Ohio chemical plant and the devastating snowstorm that hit Texas in February.”
“William Bew White III, who founded Summer Classics, an Alabama-based furnisher whose outdoor products look like they belong next to a Gilded Age mansion or terraced hotel along the Italian Riviera ... summarizes his problems as the three F’s: foam, fabric and freight.”
“‘The freeze in Texas closed down two of the plants that make the chemicals that make foam,’ he said. ‘These plants were not able to reopen until mid to late March. And supply dried up.” READ MORE
HUMAN RESOURCES
Iceland tested a four-day workweek and found employees happier and more productive: “Some of the trials’ key findings showed that a shorter week translated into increased well-being of employees among a range of indicators, from stress and burnout to health and work-life balance. These issues have become more pressing as reports of burnout among employees around the world have risen following more than a year of pandemic-related stress and deteriorated mental health.”
“The crowdfunding platform Kickstarter recently announced it will experiment with a four-day workweek next year, the Atlantic reported.”
“Buffer, a social media software firm, said early in 2021 that it would continue the four-day system ‘for the foreseeable future’ after successful tests.” READ MORE
REAL ESTATE
In some places, businesses can’t fill jobs because there’s no place for workers to live: “Like many towns in the West with economies built around tourism, Ketchum is facing a cascading housing crisis caused by a rush of new residents during the Covid-19 pandemic, growing demand for workers during the economic boom that has followed, and a shortage of affordable homes that was years in the making. Businesses in this community of 2,700, located in central Idaho near the Sun Valley ski resort, are struggling to fill open positions, forcing some to cut hours. Some workers live in trailers or tents in the Sawtooth National Forest. And the waiting list for the 113 affordable-housing units for sale or rent in surrounding Blaine County is yearslong.”
“The situation has gotten so extreme that Ketchum’s mayor recently raised the idea of allowing local workers to temporarily erect tents in a park so they could have a place to live while searching for something permanent.”
“According to the Blaine County Housing Authority, the median price for a two-bedroom home in the area has risen nearly 20 percent in the past year to half a million dollars.”
“Mr. Bradshaw said the inventory of homes for sale is less than 10 percent of what it typically is. According to the housing authority, the rental capacity in Blaine County is essentially zero.” READ MORE
REOPENING
As variants spread, more hospitals are pressuring employees to get vaccinated: “More than a dozen hospital systems have announced in recent months they will require the shots, including major hospital systems in Missouri and Michigan, states where less than half the total population is fully vaccinated. St. Louis-based SSM Health said its workforce must have at least one dose by Sept. 1, with an earlier deadline for leadership. Two other St. Louis-area hospital systems set deadlines for September and August. Detroit-based Henry Ford Health System gave employees until early September to comply.”
“Some hospital executives say mandates signal confidence in vaccines and protect their workforce as new variants drive up hospitalizations, with employers in some cases willing to fire those who don’t comply.”
“Unvaccinated hospital employees exposed to the virus can’t work, which left hospitals scrambling for staff during prior surges, Dr. Cunningham said. ‘I want to have as many employees available as possible if there’s another surge,’ he said.” READ MORE
THE ECONOMY
Job openings continue to hold at record levels: “The number of available jobs nearly matched the 9.3 million Americans who were unemployed but actively seeking jobs in May, reflecting an unusual tightness in the job market. The number of unemployed workers has exceeded available jobs in data back to 2000, except for a period from 2018 to early 2020 when the unemployment rate trended near a 50-year low. Services industries, such as leisure and hospitality, led the figures and maintained momentum in May as the pandemic eased and more consumer-facing business fully reopened, Labor Department data showed.”
“Workers continued to quit jobs at a high rate as businesses competed to fill positions. The seasonally adjusted quit rate fell from a record 2.8 percent in April to 2.5 percent in May, after steadily increasing since January.”
“Jobs in restaurants, hotels and salons accounted for about half of the payroll gains seen in June, the strongest overall increase in 10 months. Workers’ wages across the board also increased last month.”
“Regionally, the South had the highest openings rate at 6.2 percent, unchanged from the prior month. The rate of openings edged higher in the West and fell modestly in the Midwest, according to the Labor Department.” READ MORE
Travel is coming back faster than expected: “Passengers have flocked back to airports more quickly than airlines anticipated, triggering headaches like delayed and canceled flights and highlighting the complexity of resurrecting the industry after more than a year of near-hibernation. Bad weather has caused some of the problems, but union officials and industry observers also cite staff shortages after too many pilots, mechanics and other workers were let go to cut costs during the pandemic. Some of these staffing challenges are likely just near-term, while others, such as a shortage of pilots that existed before the pandemic, threaten to pose challenges in coming years.” READ MORE
Lumber prices continue to plummet: “Last week, the ‘cash’ price fell $160, to $770 per thousand board feet of lumber, according to industry trade publication Fastmarkets Random Lengths. That's down 49 percent from its $1,515 all-time high on May 28. Lumber's price remains well above its pre-pandemic range of $350 to $500, however. ‘The move up [in lumber prices] was quick and violent, and the fall we have seen has been equally dramatic,’ Steve Loebner, director of risk management at Sherwood Lumber, tells Fortune.”
“As lumber prices got exorbitantly high this spring, homebuilders and DIYers finally started to back off. In May, new home construction and home improvement sales were down 8.8 percent and 8.1 percent, respectively, from their March highs.”
“On the supply side, meanwhile, sawmills—incentivized by record-high prices—upped their production levels. That combination of increased supply and weakening demand is helping to alleviate the lumber shortage.” READ MORE
AGRICULTURE
Huge, high-tech, and indoors: hydroponic farms are popping up all over the country. Is that good? “The two operations are part of a new generation of hydroponic farms that create precise growing conditions using technological advances like machine-learning algorithms, data analytics and proprietary software systems to coax customized flavors and textures from fruits and vegetables. And they can do it almost anywhere. These farms arrive at a pivotal moment, as swaths of the country wither in the heat and drought of climate change, abetted in part by certain forms of agriculture. The demand for locally grown food has never been stronger, and the pandemic has shown many people that the food supply chain isn’t as resilient as they thought.”
“But not everyone is on board. These huge farms grow produce in nutrient-rich water, not the healthy soil that many people believe is at the heart of both deliciousness and nutrition.
“They can consume vast amounts of electricity. Their most ardent opponents say the claims being made for hydroponics are misleading and even dangerous.” READ MORE
THE 21 HATS PODCAST
Episode 67: Why Did Your Business Succeed? This week, we talk about how much of success is making the right decisions. How much is being in the right place at the right time? And how much is just luck? “I think that's the thing nobody wants to talk about,” Paul Downs tells us, “because it implies that there's a lot to success that is out of the control of the entrepreneur, and we're much more attracted as human beings to stories of people who have agency and are like, ‘Oh, there's a problem. I did this, and I won.’ That's what we like to hear.” So yeah, there’s always luck involved. But there are always forks in the road, and someone has to decide which way to go. This week we hear how a few of those decisions played out.
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