‘Pardon Me. I’m So Sorry. This Is My First Pandemic’
In our latest 21 Hats Podcast, William Vanderbloemen talks about how he saw the Great Resignation coming and how smart companies are coping with it.
Good morning! .
Here are today’s highlights:
Facebook offers its users a very important lesson.
United Airlines has found that its vaccination mandate has brought an unexpected benefit.
Inc. magazine thinks there are 146 PE and VC firms that are “founder-friendly.”
THE 21 HATS PODCAST
‘Pardon Me. I’m So Sorry. This Is My First Pandemic:’ This week, in episode 79, we go one-on-one with William Vanderbloemen. We start off talking about how he saw The Great Resignation coming and what he thinks are the keys to coping with it. Then we step back, and—with the help of many questions suggested by listeners—we discuss his conversion from pastor to CEO, what happened to his company culture when everyone went remote, and why he still reads every single email he gets—even when he’s off on a seven-week sabbatical. Plus: how he hit upon his unconventional social media strategy and his suggestions if you’re looking for a VP of marketing. (Suggestion No. 1: Try not to lose the one you have.)
You can subscribe to The 21 Hats Podcast wherever you get podcasts.
People have been saying for years that no business should be dependent on one platform. Yesterday, Facebook proved it: “Facebook has built itself into a linchpin platform with messaging, livestreaming, virtual reality and many other digital services. In some countries, like Myanmar and India, Facebook is synonymous with the internet. More than 3.5 billion people around the world use Facebook, Instagram, Messenger and WhatsApp to communicate with friends and family, distribute political messaging, and expand their businesses through advertising and outreach.”
“‘With Facebook being down we’re losing thousands in sales,’ said Mark Donnelly, a start-up founder in Ireland who runs HUH Clothing, a fashion brand focused on mental health that uses Facebook and Instagram to reach customers.”
“‘It may not sound like a lot to others, but missing out on four or five hours of sales could be the difference between paying the electricity bill or rent for the month.’”
“Samir Munir, who owns a food-delivery service in Delhi, said he was unable to reach clients or fulfill orders because he runs the business through his Facebook page and takes orders via WhatsApp. ‘Everything is down, my whole business is down,’ he said.” READ MORE
Mysterious ads are flooding shopping sites and social media: “The situation is as frustrating for companies making legitimate products as it is for shoppers. Just ask WaterRower, the 33-year old Rhode Island-based company. Started by a former national team rower turned engineer, it makes its distinct-looking wooden rowing machines in the United States. A search for ‘wooden rower’ on Amazon brings up nearly 200 results under at least 30 separate brands, and more than 100 results on Walmart. The vast majority have a specific, nearly identical look. Two long planks of wood, a black seat on the side, a squat water tank and a logo emblazoned on one side.”
“At least three of the brands begin with ‘Mr.’ — Mr. Captain, Mr. Rudolf and Mr. Right. One is just LINEN PURITY LLC.”
“The company does the bulk of its manufacturing in Warren, R.I. While it still owns the name ‘WaterRower,’ it no longer owns the intellectual property to cover the design of its signature product, and fighting copycats can rack up legal fees.”
“That has created an opening for page after page of similar-looking, cheaper rowers on Google, Amazon and Walmart. A real WaterRower costs around $1,000, but alternatives can go for as little as $370.” READ MORE
The couple behind Brooklyn-based Ample Hills Creamery, which soared and crashed, turning $20 million into a $1 million sale out of bankruptcy, has found an investor and is trying again: “Our plan is to try to open up a couple more shops, either next year or the year after. We’re going to be much more focused on the brick-and-mortar experience. We were chasing wholesale pint distribution with Disney way too early. If you’re an ice cream business starting out and trying to grow, pints are the quickest way to the deathbed, because the margins are so low. It only works with really high volume. So we need to establish a strong business in our stores, and eventually have that turn to pints down the road.”
“Before we ever opened, I sat down and went through what my COGS — costs of goods sold — were for the different flavors of ice cream.”
“When we started Ample Hills, we were taking bags of money, uncounted, over to the bank. I didn’t even know the term ‘COGS’ when we opened.” READ MORE
A startup is seeking approval from the SEC to offer around-the-clock stock trading 365 days a year: “The startup, 24 Exchange, said it filed key parts of its application for a national stock-exchange license with the SEC on Monday, including a rulebook and user manual detailing its proposed approach to trading hours. Under decades-old conventions, the bulk of stock trading takes place between 9:30 a.m. and 4 p.m. ET on weekdays, and exchanges shut down for holidays, such as Good Friday and Washington’s Birthday.”
“James Angel, a finance professor at Georgetown University, predicted that 24 Exchange would face an uphill battle to attract trading activity outside of standard U.S. trading hours.”
“That could result in volatile pricing, like in the premarket and post-market sessions available today, he said.”
“24 Exchange’s plans could also draw opposition from Wall Street because professional traders at banks and large investment firms like the ability to relax and go home after the market closes, Mr. Angel said.” READ MORE
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THE COVID ECONOMY
Oddly enough, retail bankruptcies have stopped—at least for now: “So far this year, the number of major retail bankruptcies tracked by Retail Dive is well below those during the same periods in 2019 and 2017, and slightly below 2018 as well. Joseph Malfitano, founder and managing member of Malfitano Partners, compares the current slowdown in distressed retail to the years directly following the Great Recession, when bankruptcies and liquidations ‘just dried up,’ in his words. ‘This one, it's weird,’ Malfitano said of 2021.”
“‘The stimulus has just been an incredible tailwind for retail,’ said Pulse Ratings CEO Dennis Cantalupo.”
“As much as the pandemic created disruption, it also helped funnel consumer spending to the industry as the population broadly has held off on experiential spending on things like travel and dining out.”
“‘Everyone is focused on the holiday. Nobody is really focused on what comes after the holiday,’ Malfitano said. ‘2022 will probably have some nasty outcomes.’” READ MORE
Hotels are bracing for another quarter of sluggish business travel: “Hotel business-travel revenue for the year is expected to fall more than $59 billion compared with 2019, according to a report released last month by the American Hotel & Lodging Association. That is even a greater drop than 2020, when nearly $49 billion in revenue was lost, the report said. ‘We’re on a downward slope for the end of the year,’ said Chip Rogers, the association’s chief executive.”
“Analysts say that companies are concerned that if they send employees to events they might be legally liable if a convention turns into a super-spreader event. ‘It comes down to liability,’ said Mr. Rogers.”
“Hotels that depend on business travelers say advanced bookings are far lower than usual and typically are made just a few days before arrival dates, which is especially tough these days because many hotels also are suffering staff shortages.”
“The late advanced bookings are ‘dreadful when it comes to events,’ said Sandi Robinson, director of sales for the Godfrey Hotel Chicago, a 221-room boutique lodging that got most of its business from business travel until the pandemic. ‘We end up having to turn down some events because we’re too short-staffed.’” READ MORE
United Airlines’ decision to mandate vaccinations has had an unexpected side effect: more job applicants: “United executives said they were surprised that positive feedback from politicians, customers and the public far outweighed the criticism it received. Customers thanked the airline, and job applicants said they were excited to join a company that took employee safety seriously. United has received 20,000 applications for about 2,000 flight attendant positions, a much higher ratio than before the pandemic.” READ MORE
JPMorgan is restricting travel and in-person meetings for unvaccinated employees: “Unvaccinated employees also will face higher payroll deductions to cover the cost of testing and health insurance, starting next year, the bank said. And newcomers to certain roles, such as client-facing positions and those requiring business travel, must be vaccinated, the bank added.” READ MORE
Inc magazine has published a list of what it calls “founder-friendly” investors: It says the list is of the top 146 PE and VC firms that have had success backing entrepreneurs. I have no doubt the firms have had success, and certainly some of the entrepreneurs have, too. It would be interesting to know what percentage of the entrepreneurs they’ve backed have had success. READ MORE
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