Discover more from The 21 Hats Morning Report
Should We Sign That New Lease?
Even pickleball courts may not bring employees back to the office, which is leading to some tough decisions.
Here are today’s highlights:
“What I find is, when you talk about it, it gets better.”
Landing a big contract can bring big risks.
How a startup hat company used Kickstarter to get off the ground.
CRM consultant Gene Marks asks whether businesses really need to hire CRM consultants. You won’t believe his answer!
THE ENTREPRENEURIAL LIFE
More entrepreneurs are choosing to talk about their mental health: “The pressure entrepreneurs face — compounded by societal myths surrounding startups and a glamorized hustle culture — can take a steep toll on mental health leading to burnout, breakdowns, or worse. The issue was beginning to get some widespread attention prior to the pandemic. Inc and Entrepreneur magazines published stories, and startup luminaries like investor Brad Feld started talking openly about depression and mental health. Covid and the devastating toll it took on small businesses further amplified the subject.”
“In 2019, Portland entrepreneur Emma McIlroy appeared on The Anxious Achiever podcast to discuss mental health and entrepreneurship. She described entrepreneurship as the ultimate example of the unstoppable force meeting the immovable object, building something from nothing to get impossible results.”
“McIlroy has struggled and watched those around her do the same. She told Aarons-Mele that three people who were part of an investment fund she was involved with had taken their own lives. All three, she said, were seemingly more successful than her as she built her apparel company Wildfang.”
“‘That’s an interesting thing to take onboard and to absorb,’ she said. ‘...I had pretty close to a breakdown myself through this (startup) journey. What I find is, when you talk about it, it gets better.” READ MORE
Should we sign that new lease? Will employees really come back? “The freight elevator doors opened onto 50,000 square feet of office real estate. Right now, it is empty, but Seth Besmertnik, chief executive of the software company Conductor, gestured at the beams and concrete floor with pride. He has plans for his company’s new office — conference rooms, a pickleball court and, of course, all of his 200 employees in the New York City area. Mr. Besmertnik conceded that it was scary to persuade his board to sign a lease doubling his office real estate in 2021. But to him, leasing a larger office was a symbol of his belief in physical, in-person collaboration: ‘As much as it might be nice to save the money, I want to save our soul first.’”
“Business leaders are in a phase of trial and error that comes with staggering stakes. They are figuring out how many days to call employees back to the office, and on top of that how strictly to enforce their own rules.”
“‘There’s not a Hybrid Office 101, where you can pick up the book and see what 100 offices have done before,’ said Richard Buery, chief executive of the Robin Hood Foundation, which requires employees to come in two days a week.”
“While some companies are in five days a week and others have gone remote forever, many more employers have landed on a hybrid solution, and as they announce these plans they are facing fierce resistance.”
“Orchard, a real estate company, gave its 500 employees an ‘open enrollment’ period in which to decide whether they wanted to be remote or office workers. The 60 percent who selected the office are expected to come in two days a week.” READ MORE
Landing a big contract can feel risky, especially for Black-owned businesses: “When Sweet Teez Bakery owner Teresa Maynard met with Whole Foods in May 2018, she was hoping the supermarket chain would order as many as 2,000 of her three-inch pies. When company executives instead requested 48,000, she was floored. Up to that point, the largest order the Dorchester native had completed was 500 mini pies. ‘I say yes to everything and I’ll figure it out afterwards,’ said Maynard, whose business was less than two years old when the deal was made official in September. Whole Foods expected to have the pies in its New England stores in time for Thanksgiving shoppers. To pull that off, Maynard figured she’d need $80,000, far more than she could get, especially on short notice.”
“It’s a dilemma many business owners of color face, both because the opportunity for big contracts and the ability to obtain the capital required to finance them is in short supply. According to a 2021 Bank of America survey, 56 percent of Black entrepreneurs said lack of access to capital limits their growth.”
“‘The reality for some is that scaling their businesses is a risky proposition because while the contract might be there now because of supplier diversity rules, what doesn’t necessarily come with that contract is timely payment,’ said Nicole Obi, president and CEO of the Black Economic Council of Massachusetts.”
“Often, she said, fulfilling big contracts means operating in the red for months; making it difficult to pay employees, cover operating costs, and take on lesser orders in the meantime.” READ MORE
A packable hat startup raised its funding on Kickstarter: “As an avid traveler, Scott Cymbor frequently found himself frustrated with the hat options on the market, specifically that they creased if folded. When the gear available didn’t live up to his expectations, he decided to launch his own company. Based in the Fishtown neighborhood of Philadelphia, Getaway Hats just completed a Kickstarter campaign, raising over $40,000 toward a new line that is expected to drop in May. It will build on Getaway Hats’ existing offerings and ultimately supplant current inventory. Cymbor launched Getaway Hats in the market in September 2021 as an e-commerce business, with a focus on Amazon.”
“Once the brand gained more recognition, Cymbor turned his attention to his own website, which he hopes to make the main driver when the new hats launch this spring. Still, he recognizes the importance of big retailers and will continue to have a presence on Amazon.”
“The new hats come in three designs: a universal six-panel baseball hat; a ‘Bronco’ five-panel trucker hat; and a California-style option, which is a seven-panel modern trucker hat. He expects them to retail for $49 or more, an increase from the original version which he is selling at a discounted rate of $15, and the second iteration, which is going for $35.”
“The Kickstarter campaign far outstripped Cymbor’s $5,000 goal and even his personal stretch goal of $30,000. In total, Getaway Hats raised $40,374 from 678 backers during its month-long campaign, which wrapped on Feb. 23.”
“‘Kickstarter is showing me there is more demand than what maybe I thought.” READ MORE
You might want to be cautious about throwing more than $100 million at fintech founders who are not yet 21: “While the whole tech industry has been facing macroeconomic headwinds, many of these people said at least some of this startup's misfortunes were of its own making. They described Vise as a case study in what can go wrong when young, inexperienced founders are flooded with VC money from big-name investors such as Sequoia, Ribbit Capital, and Founders Fund, and then enraptured by the glamor of the tech world. ‘They went through the child-star phenomenon where they were hot at first, but when things hit the fan, they didn't know how to handle it,’ one investor in the company said.”
“Vasavada and Mehrotra were just 16 when they launched Vise in 2016, a couple of high schoolers from the Midwest fascinated by AI technology.”
“Vise launched with the lofty mission to ‘enable financial freedom for everyone by allowing [registered investment advisors] to promise all clients the white-glove service that the super-wealthy receive. It aimed to use AI and automation to customize each client's portfolio, freeing the RIA's time to grow their client base.”
“Two prospective customers who viewed the product but declined to use it said that in addition to concerns about the technology, they were put off by the reputation of the young founders: parties with celebrities, a ‘ridiculous’ swanky Soho apartment, and a story that spread throughout the investment community that the two had obtained a pink Lamborghini sports car for a while.” READ MORE
Do you really need a CRM consultant? Gene Marks says you do: “My company implements CRM systems. We specialize in five of them. We are very knowledgeable about them. We know how to configure users and security. We know how to customize their screens, views and fields. We can write reports, scripts and small apps around them. We can integrate your CRM system with other systems or just setup integration that’s already available from others. We migrate data. We train people. We set up AI tools, workflow rules, alerts, triggers and automation schedules. But here’s the thing: you don’t need us. You really don’t. Why? Because none of this is that hard.”
“So why hire a CRM consultant? For two reasons. The first reason is to simply save time. I could mow my lawn but instead I have a landscaper do it. I could upgrade my bathroom but I choose to have a contractor do that. I could do my own taxes but I have an accountant for that. These people are specialists in what they do.”
“The other reason is to minimize problems. A CRM consultant works with CRM systems all the time. When you get someone who specializes in your product they will know the ins and the outs, the good, the bad and the ugly.”
Editor’s note: Gene and I will likely discuss this issue in Monday’s Dashboard. READ MORE
THE 21 HATS PODCAST
What It Means to Break $1 Million in Revenue: This week, in episode 144, Liz Picarazzi and Sarah Segal talk about their attitudes toward growth, including how they set goals, the tension between revenue and profit, deciding when growth requires additional bodies, choosing between contractors and employees, and how they would use the money if someone were to give them a million dollars to invest in their business. Plus: What will it take for them to consider themselves successful?
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren