Score One for Remote Work
A three-year Boston Consulting Group study finds that companies that allow employees to work remotely grow four times faster than those that don’t.
Good Morning!
Here are today’s highlights:
You know what else is good for business and productivity? Letting employees bring their pets to work, according to the Harvard Business Review.
With shoppers showing some restraint, the big retailers are now backing off on price hikes.
An entrepreneur who once lived on food stamps is now trying to solve the problem of food insecurity.
What if there were a conference limited to 20 participants where instead of being lectured to, you got to compare notes with other business owners on similar journeys?
MARKETING
Like it or not, the creator economy is a thing: “Earlier this year, Goldman Sachs analysts estimated that the creator economy was a $250 billion industry, and could reach $480 billion by 2027. The analysts predicted that growth would be driven by investment in influencer marketing and the rise of ad-revenue-share models, particularly in short-form video, on platforms like Instagram, TikTok, and YouTube. The core way many creators make money today is through influencer marketing. Insider Intelligence forecasts that next year, U.S. influencer-marketing spend will hit $5.89 billion, and that its growth will ‘remain in the double digits through 2025.’”
“The latest innovation driving the creator economy forward is artificial intelligence. This year, YouTube unveiled new AI tools and features aimed at simplifying content creation. The industry is betting on AI not to replace creators, but to increase productivity and bring more opportunities for people to make content.”
“Rising AI startups in the creator economy like Crate, an AI platform helping creators streamline the creative process, and Midjourney, an AI model that can generate images, are winning over investors.” READ MORE
HUMAN RESOURCES
A three-year study finds that letting employees work remotely is good for business: “Companies that allow remote work have experienced revenue growth that’s four times faster than those that are more stringent about office attendance, a new survey shows, adding fuel to the debate over productivity and performance in today’s workplaces. The analysis of 554 public companies that employ a collective 26.7 million people found that ‘fully flexible’ firms — which are either completely remote or allow employees to choose when they come to an office — increased sales 21 percent between 2020 and 2022, on an industry-adjusted basis. That compares with 5 percent growth for companies with hybrid or fully onsite workforces.”
“The study, by flex-work advisor Scoop Technologies and Boston Consulting Group, included companies across 20 sectors, from technology to insurance. Revenue growth was normalized against average industry growth rates so that employers in better-performing areas would not skew the findings.”
“The better growth rates for more remote-friendly companies could be due to their ability to hire faster and from a wider geographic area, along with higher employee retention, according to Scoop co-founder and chief executive officer Rob Sadow.”
“At insurer Allstate, for example, 84 percent of its new U.S. hires over the past year don’t live near one of its local offices, and remote-friendly jobs receive twice as many applications, according to Lauren DeYoung, who works across departments to oversee the company’s flexible-work arrangements.” READ MORE
Meanwhile, the Harvard Business Review says the evidence supports letting employees bring their pets to work: “Today, 66 percent of American households include a pet. The numbers are even higher for millennials and Gen-Zs. Almost one in five families added a pet during the pandemic shutdown. Over the past three years, employees have happily settled into work arrangements that involve their four-legged companions: snuggling up during a Zoom call or going on a mid-afternoon walk. Force employees to pick between their pet and returning to the office and you may not like their choice.”
“Most surprising to our author team was the mounting evidence that pets function as a social lubricant and conduit for collaboration. In interviews, employees describe pet-friendly workplaces as facilitating better communication and information-sharing and contributing to coworker bonding and friendships.”
“Studies in diverse settings — traditional offices but also universities, prisons, hospitals, and courthouses — demonstrate that the presence of animals increases employee commitment and career satisfaction and reduces turnover intentions.”
“These positive effects hold even for employees who have no pets or do not actively interact with animals at work. Why? Because pet-friendly policies are seen as evidence that organizations prioritize employee well-being. For this reason, job seekers also prefer pet-friendly workplaces. Welcoming pets can help attract and retain the employees you wish to bring back to the office.” READ MORE
ECOMMERCE
Amazon says it’s going to start selling cars online: “Amazon said it's partnering first with Hyundai to sell its lineup of new vehicles, marking the e-commerce giant's foray into vehicle sales. ... The car sales on Amazon's platform will be managed and fulfilled by local car dealerships, making Amazon essentially a middleman between the customer and the car dealership. This asset-light approach contrasts sharply with companies like Carvana and Carmax, which often own the cars they sell.”
“Hyundai's deal with Amazon extends beyond selling Hyundai cars, according to the announcement. Other aspects of the deal include Hyundai using Amazon Web Services as its preferred cloud provider and Hyundai building Alexa into its car models beginning in 2025.” READ MORE
21 Hats Live: Fort Worth
The slots are filling up! The second 21 Hats Live event will be limited to 20 business owners/CEOs. It starts with a pre-dinner, get-acquainted session Wednesday, March 6, and runs through lunch on Friday, March 8. The event will feature good food in private restaurant rooms, visits to cool businesses—especially Laura Zander’s Madelinetosh manufacturing operation—and most importantly, the priceless opportunity to compare notes with other business owners who are on similar journeys. There will be no speakers, only participants. We’ll have deep-dive peer group sessions, and everyone will help choose the topics. Bring your own challenges! Bring your own opportunities! Those already signed up include smallbiz finance expert Ami Kassar along with 21 Hats Podcast regulars Shawn Busse, Paul Downs, Jay Goltz, Jennifer Kerhin, Liz Picarazzi, Jaci Russo, Sarah Segal, William Vanderbloemen, Dana White, and Laura Zander. You will leave inspired, and you will leave smarter.
Here are some reactions from those who attended the Chicago event:
“We were in Jay’s boardroom, and I’m looking around the room, and there’s something really weird happening here. And what it was is that, for the first time in my entire life where I was in some kind of business situation, there were more women than men. And a huge shout out to Loren for being able to find a diverse group of people to get together that really reflects what the future of business is going to look like. Everybody there was absolutely worth knowing.” -- Paul Downs
“I had a fantastic time, gained new friends, and valuable insight. Count me in for future events.” -- Nile Livingston
“It was everything as described and more ... wasn't sure what a 30+ year entrepreneurial veteran could learn ... but I actually came away with several new ideas and solutions to some nagging problems (looking at you Steve Krull). Can't wait to see what next year has in store for us.” -- Jim Kalb
“What a well planned event. I left feeling more confident and connected to a great community of entrepreneurs.” -- Sarah Segal
“A fantastic opportunity to learn, grow, and connect with a *solid* group of like-minded peers. Thanks again, Loren Feldman, for taking the leap and recognizing the importance of an entrepreneurs-only event like this.” -- Kemi Tignor
“SOOOO much fun. This morning, I was smiling as I thought about the conversation that occurred. The event and the people there helped me solve a really big dilemma. Loren Feldman has managed to build a community of high-integrity, high-authenticity, go-getters. Hanging with like-minded people was priceless from a social and business perspective. -- Tricia Groff
“I don’t know how anyone could leave this event without an insight, an idea, an inspiration, a connection that makes a difference. When I think about all the stupid shit I did for years, one conversation could have saved me years of grief. I’ve never sat with 10 fellow business owners in the trenches and not walked away with something valuable.” -- Jay Goltz
When: March 6 through March 8.
Where: Fort Worth, Texas.
Fee: $2,750. All meals, activities included. Travel, hotel not included.
Guarantee: Your money will be fully refunded if you’re not satisfied for any reason.
PRICING
The big retailers are easing their price hikes: “Sellers of everything from cargo pants to patio furniture resorted to raising prices on items to cover higher operating costs early in the pandemic. In many cases, they were able to boost profits by doing so. More recently, retailers have been stung by the pull back in purchases of discretionary items as shoppers’ budgets have been stretched and prices remain elevated for essentials such as food. Now, inflation has cooled in many categories, which could further pressure their sales growth.”
“Companies in recent years have boasted about their ability to raise prices as a sign of the strength of their products. Consumers are continuing to pay more for items at some brands, including Ralph Lauren and Coach. At Macy’s, average selling prices were up 5.2 percent in the recent quarter compared with a year ago, but executives said the increase was driven more by changes to what consumers were buying rather than inflation.”
“In recent months, Walmart has focused on lowering prices to drive more store visits. Earlier this year, the retailer brought the price of a packet of instant ramen noodles from one brand down by about 30 cents. Executives planned for the price change to make the noodles Walmart’s top-selling item by volume sales.” READ MORE
MISSION DRIVEN
An entrepreneur who once lived on food stamps is addressing food insecurity: “Thirteen years ago, Ashley Tyrner was pregnant with her daughter and reliant on both Medicaid and food stamps while living in a rural food desert in Arizona. Later, when Tyrner got a job in fashion branding and moved to New York City with her baby, she had to navigate life as a new mom while living in an urban food desert. Both experiences gave her a keen appreciation for the need to make sure everyone has access to nutritious food.”
“Tyrner started a company 10 years ago, initially shipping fresh food via FedEx. Then, in 2019, when she found out that the Centers for Medicare & Medicaid Services planned to change regulations the following year to allow food and produce as benefits, she transferred her company, FarmboxRx, from a direct-to-consumer brand to one that services health plans.”
“Under FarmboxRx’s new business model, Medicare and Medicaid pays for the boxes of food. But Tyrner said FarmboxRx does more than provide fresh produce — it's now a patient engagement company. Tyrner said the company uses its boxes to engage health plan members in preventative health measures. Each box contains a magazine that features not just recipes, but reminders to sign up for a mammogram or a diabetic eye exam.”
“At first, only one health plan wanted to work with FarmboxRx, Tyrner said. Both healthcare and the government move slowly, she said. Today, FarmboxRx is working with 89 health plans, and the company has 53 employees who work remotely. This year, FarmboxRx was No. 100 on the 2023 Inc. 5000.” READ MORE
THE 21 HATS PODCAST
Start Up, Throw Up, and Grow Up: This week, Dana White drops a few surprises. When we began this podcast in 2020, Dana had two promising hair salons in Detroit that she’d named after her grandmother, Paralee Boyd. She had an innovative business model designed specifically for women with thick and curly hair. And she was on her way to winning a prestigious business plan competition. All of which presented her with a wide array of opportunities to consider. Would she continue to bootstrap? Would she franchise? Would she take on an investor? Would she open salons on military bases? But the pandemic hit her hard.
“Struggling to find both employees and customers, she eventually decided to close her Detroit locations and open a new one in Dallas, Texas, where she hoped the greater population density would help her make a fresh start. But in this episode, Dana tells Jay Goltz and Laura Zander that she’s come to a painful realization: “Paralee Boyd is not working.”
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren