Maybe We’re Not a Family

Lots of businesses claim to have created a family atmosphere for employees. Is that a good thing?

Good morning!

Reminder: I recently posted my plan to turn 21 Hats into a sustainable business. You can READ MORE HERE. The upshot is I’m asking readers to sign up as either a Paid Subscriber or as a Founding Member.

Here are today’s highlights:

  • A brush with death compels an entrepreneur to do something positive.

  • There is no pivot for us, say the owners of a storied Manhattan tea house.

  • Sometimes, failure really is an option.

  • And Amazon is putting Alexa next to hospital beds.


Is working at your business like being part of a family? “If you’ve seen an open job posting or have been through a new job orientation over the last decade, you’ve probably seen the word ‘family’ thrown around when describing a company’s culture: ‘We’re a family.’ ‘Welcome to the [company name] family.’ ‘We’re a family that breathes and lives the mission of the company.’ ... As a leadership development trainer, this is one of the biggest organizational mistakes I see among managers and high-performing teams. While some aspects of a ‘family’ culture, like respect, empathy, caring, a sense of belonging can add value, ultimately trying to sell your organization’s culture as family-like can be more harmful than psychologically satisfying.”

  • “Not everyone wants to connect with their coworkers on a deeper level, let alone create a dependency to the organization.”

  • “Numerous examples and research show that overly loyal people are more likely to participate in unethical acts to keep their jobs and are also more likely to be exploited by their employer.”

  • “You don’t fire a family member, nor do you put them through performance improvement plans.” READ MORE

Starbucks will take the average pay of a barista to $17 an hour by next summer: “In late January, Starbucks will give baristas employed for at least two years pay raises of up to 5 percent. Those employed for at least five years could get up to 10 percent increases, said the coffee chain. By the summer of 2022, the hourly wage will reach the $15 to $23 an hour range.”

  • “Last December, Starbucks gave at least 10 percent raises to all employees, Insider's Kate Taylor reported.”

  • “The Seattle-based coffee chain said it spent $1 billion on better wages and benefits in the last two years.” READ MORE


Co-working spaces are headed to the suburbs: “The future of work is still up in the air as many companies have embraced a hybrid model, allowing employees to split their workweek between the office and home, with little clarity about the timing of a mandatory return. In this uncertainty, a growing number of start-ups are betting that the pandemic has spawned a new kind of worker — one who will not be commuting into a central business district five days a week, but would still desire occasional office space closer to home for a distraction-free environment.”

  • “The owner of Saks Fifth Avenue is partnering with WeWork to turn parts of department stores into co-working spaces.”

  • “Codi, a start-up founded in Berkeley, Calif., offers private homes as flexible working spaces. Industrious, a co-working company, has an office space inside a mall in Short Hills, N.J.”

  • “Daybase, created during the pandemic by a group of former WeWork executives, is opening its first co-working locations in the coming months in the New York City area — Hoboken and Westfield, N.J., as well as in Harrison, N.Y.” READ MORE

A brush with death persuaded Zeb Evans, whose business had been selling followers to content creators, to shift directions: “Within a month, he shut the business down and set out to build a new company with a more ‘net positive’ impact. [Zeb] Evans and two early employees moved out to California, but failed to gain traction on early ideas—an ‘egoless’ social media network that hid one’s follower count, and a fraud-proof Craigslist competitor. At one point, he and his colleagues got sidetracked trying to build an internal tool to centralize all the work they were doing in a single hub. Now, that side project is the main focus—and it appears to be taking off.”

  • “The rapid growth is reflective of a glut of capital into productivity software by blue-chip Silicon Valley investors. Firms including Benchmark, Founders Fund and Insight Partners have already celebrated wins through the recent public debuts of Asana and”

  • “On the private market, note-taking tool Notion reached a $10 billion valuation earlier this month with funding from Sequoia and Coatue, while the likes of Kleiner Perkins and Greylock are backing $1.4 billion documents software maker Coda.”

  • “ClickUp’s approach is to be a jack-of-all-trades. ‘We’re essentially creating ten-plus different products inside of one product,’ says Evans, who is CEO. The software includes features for project management, document collaboration and time tracking. A team chat functionality widens its reach into a space occupied by Slack.” READ MORE


The owners of a storied Manhattan tea shop, Alice’s Tea Cup, may be ready to move on: “The tea houses' cozy indoor spaces have been harder to embrace amid the threat of an airborne virus, and distancing may dilute their charm. Tiered trays of treats and teapots do not always work well on some of the smaller outdoor tables. ‘We are a destination spot for family gatherings, friends connecting, kids having tea with their parents, and birthday, baby and bridal parties. Those things can’t be transferred,’ said Haley Fox, 47. ‘During Covid the word ‘pivot’ was used a lot. People kept saying, We will pivot to a delivery business or make the front a grocery store. There’s no pivoting for us. This is a niche business.’”

  • “Their flagship restaurant, on West 73rd Street, was modeled after Lewis Carroll’s ‘Alice in Wonderland,’ and was intended to serve only afternoon tea. Demand for brunch came quickly. So did breakfast and lunch, followed by requests for scones to go. The sisters obliged.”

  • “They also opened two more locations — on the Upper East Side and in Brooklyn Heights — and Alice’s became a destination for both New Yorkers and tourists, including celebrities.”

  • “The tea houses' cozy indoor spaces have been harder to embrace amid the threat of an airborne virus, and distancing may dilute their charm. Tiered trays of treats and teapots do not always work well on some of the smaller outdoor tables.”

  • “For all these reasons, the Fox sisters, feeling burned out, have decided to look for investors to keep the business going or perhaps, for new owners.” READ MORE

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Sometimes, failure really is an option: “Few startup founders spend much time preparing for the not-unlikely prospect of having to unwind their venture. ‘The most critical thing that founders don’t think about is the possibility that they’re going to fail,’ Zwahlen said. ‘And they’re not in touch with the reality often. I think a lot of time people will keep pushing forward despite the fact that they shouldn’t be, and it’s hard for people to let go when they’ve invested so much.’ Experts we spoke with agree that failure is part of the startup journey, but say there’s a right way and a wrong way to close an unsuccessful startup.”

  • “The most important consideration, according to Orn, is to shut down while the company still has enough money to pay out earned vacation time to employees.”

  • “If a company shuts down without paying out employees’ PTO, the management team and board of directors are personally liable.”

  • “Another task you shouldn’t overlook is filing your company’s last tax return. Founders who don’t shut down their company properly could have their personal bank account levied.” READ MORE


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Slowed by Delta and the supply crunch, the economy at a 2-percent annual rate in the third quarter: “Such a pace marked a sharp slowdown from robust gains earlier this year. Gross domestic product grew at a historically fast annual rate of 6.3 percent in the first quarter and 6.7 percent in the second quarter as an infusion of government stimulus, widespread business reopenings and rising vaccination rates fueled spending.”

  • “A shortage of available workers is holding back sales growth at a Waltham, Mass.-based remodeling company, Out of the Woods Construction & Cabinetry Inc., said Greg Antonioli, president. He is seeking to add two to four carpenters to his 12-person business to meet demand, but he is struggling to fill the open roles.”

  • “‘I’m really somewhat paralyzed by the amount of work coming in,’ he said. ‘I should be thrilled that the phone’s ringing off the hook, and I’m almost at the point of like, Oh, my God, what are we going to do?’”  READ MORE

The number of workers who contracted Covid and who died from the virus was much higher than previously believed: “A report by the U.S. House Select Subcommittee on the Coronavirus Crisis, released Wednesday, found that 59,000 workers contracted Covid-19 as it spread through some of the country’s largest facilities. That was almost triple the 22,700 infections previously estimated, based on publicly available information compiled by the Food and Environment Reporting Network, a nonprofit news organization. The 269 deaths recorded among plant workers were three times earlier estimates, the subcommittee said.”

  • “The report was based on newly obtained documents from five of the largest meatpacking conglomerates, representing more than 80 percent of the market for beef, and more than 60 percent for pork.”

  • “‘Instead of addressing the clear indications that workers were contracting the coronavirus at alarming rates due to conditions in meatpacking facilities, meatpacking companies prioritized profits and production over worker safety, continuing to employ practices that led to crowded facilities in which the virus spread easily,’ the report said.” READ MORE


Amazon is putting Alexa next to hospital beds: “Amazon said that using Alexa-enabled devices in healthcare could mean staff don't need to enter patients' rooms unnecessarily. ‘This enables hospitals to increase productivity, conserve medical supplies and protective equipment, such as masks, gloves, and gowns, and free up staff time to provide more personalized care,’ it said. The hospitals will use Amazon's Alexa Smart Properties system from next month, Amazon said, adding that healthcare providers can also enable HIPAA-compliant features such as medication tracking for the devices.”

  • “Amazon said in the press release Monday that no personal information was shared with Alexa to use the device, and voice recordings were not saved.” READ MORE


I Track Everything You Could Possibly Measure: Several weeks ago, we had a great conversation about how Jay Goltz, Diana Lee, and Dana White track their financials. It was so good that, this week, in episode 82, we decided to put similar questions to Paul Downs and Laura Zander. “It's funny, I was listening to that episode,” Laura says, “and Diana said she's a freak about the numbers. I'm like, ‘God, does that make me a superfreak?’” Laura walks us through how her labor costs can affect what types of yarn she carries, Paul suggests a quick-and-easy ratio that can signal when a business is in trouble, and Jay explains how an hourly performance indicator that he began tracking 30 years ago transformed his business. Plus: Laura tells us how she got a bank loan that’s almost three times the size of the one she couldn’t get last year.

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