Discover more from The 21 Hats Morning Report
‘We Didn’t Want This War’
Russian and Ukrainian businesses in the U.S. are confronting a backlash.
Here are today’s highlights:
Did restaurants learn the wrong lesson about Covid?
Here’s how to make the labor shortage even worse.
A two-person startup sues McDonald’s for almost a billion dollars.
Paul Downs critiques Vladimir Putin’s conference table.
THE RUSSIAN INVASION
From a Ukrainian entrepreneur:
The war in Ukraine is yet another supply-chain crisis for the auto industry: “The fighting in Ukraine has shut down small but important industry suppliers, shutting plants far away from the conflict zone, while sanctions and severed trade routes are hindering car and parts shipments to and from Russia, once seen as a growth market. European automakers such as Renault, which owns AvtoVAZ, the Russian company that makes the Lada brand,Volkswagen and its brands Audi, Skoda, and sports-car maker Porsche, are among the hardest hit by the sudden cessation of business in Russia and the lack of vital parts from suppliers in Ukraine.”
“Analysts say the initial impact of the war on some car makers could lower global vehicle production by an estimated 1.5 million vehicles this year. That is 2 percent less than the 84.2 million vehicles that IHS Markit projected the industry would build before the war.
“That is the optimistic scenario, says Stephanie Brinley, an automotive analyst at IHS Markit: ‘It could also lower production by 3 million vehicles.’” READ MORE
Russian and Ukrainian businesses in the U.S. are dealing with angry phone calls and disappearing customers: “Diana Deli is one of four establishments Insider spoke with that reported an uptick in angry emails and phone calls, three of which have also seen a decline in customers, since Russia invaded Ukraine. All of the establishments are nominally Russian and searchable via Apple Maps and Google with that label, but many are owned or co-owned by people from Ukraine and serve food that reflects the countries' mixed heritage and culture.”
“‘They implied they were going to smash up our windows,’ he said. ‘They asked if the Toyota in the parking lot was mine. They were watching the store.’”
“‘We have both Russian and Ukrainian employees at all levels,’ Wurth said. ‘We didn't want this war.’” READ MORE
THE COVID ECONOMY
Did restaurants learn the wrong lessons about Covid? They went with QR codes; what they need is better ventilation: “Joseph Allen, the director of Harvard’s Healthy Buildings program, told me that in a perfect world, all restaurants would get regular tune-ups to ensure that their HVAC systems are working properly to swap out, dilute, and filter the air. After that, ‘you want to maximize the amount of outdoor air coming in,’ Allen said. Opening some doors and windows helps, but the best play is to have your HVAC setup pump in even more fresh air while a filter (ideally rated MERV-13 or better!) strips away lots of menacing particles.”
“Many restaurants don’t need a full overhaul to make a difference, Allen said. Beyond smaller-scale routine tune-ups, restaurants could dot their space with portable HEPA filters, which can retail for less than $100. William Bahnfleth, an architectural engineer at Penn State, envisions one at every table, ‘like a centerpiece arrangement.’”
“Meanwhile, new restaurants could design their space keeping ventilation in mind in a way that they simply weren’t before the pandemic. Most restaurants have just one spot in the ceiling where air cycles out, but building in more returns and exits would help stop bad air from spreading around.”
“In larger dining rooms, a matrix of virus-killing UV lights could hang from the ceiling, Bahnfleth said, to clean any remaining stale air.” READ MORE
Charge Enterprises is betting on the growing wave of electric vehicles: “It is offering a nationwide soup-to-nuts service that provides siting, planning, permitting and construction of E.V. charging stations. ‘Tesla’s been dominant, but now everybody else is getting into the fray,’ said [Mark LaNeve, president] who is 62 and based in Chicago. ‘And there’s a lot of excitement around the new Hummer, Mustang Mach-E, Ford Lightning, the Silverado and Rivians. People are starting to pay attention to the chargers, too. But no one pays any attention to this: You’ve got to install this stuff. You’ve got to engineer it, and we think it’s a huge business if done right and done at scale.” READ MORE
This time, Amazon is killing its own bookstores: “The tech company confirmed Wednesday it is closing all of its physical bookstores, as well as its small pop-up stores and its chain of 4-Star locations, which sell products that are well-reviewed online. In total, the company will close 68 stores, the vast majority in the United States. Amazon’s grocery stores, including Whole Foods locations and Go convenience stores, will remain open. Company spokeswoman Betsy Harden said in a statement that Amazon will focus on its grocery stores, its new clothing store in Los Angeles and its computer-vision technology that allows shoppers to pick items off shelves and stroll out of stores, bypassing cashiers.” READ MORE
Here’s how to make the labor shortage even worse: Spy on your employees: “While sitting at lunch with two male co-founders who started their company out of college, I saw the divide in management practices clearer than ever. The co-founders believed whole-heartedly in tracking their employees’ calendars and monitoring them for large chunks of blocked time. ‘That way, we can assume they are interviewing and try to keep them,’ they deduced. Spy. Track. Monitor. Retain.”
“Ask yourself: How dedicated or creative are you while someone is watching? Sit with that uneasy feeling of being watched. Has that ever sparked a breakthrough?” READ MORE
AMC is trying variable pricing: On Tuesday, the company’s CEO, Adam Aron, said the movie theater chain was testing out variable pricing in the U.S. That means new releases could cost more than other films playing in the same theaters at the same time. It is unclear how much more tickets will cost for new movies. AMC did not immediately respond to CNBC’s request for comment. AMC had previously successfully raised weekend prices above midweek prices and is following a playbook it has utilized internationally for years, Aron said Tuesday.”
“‘This is all quite novel in the United States, but actually AMC has been doing it for years in our European theaters,’ he said during an earnings call.”
“‘Indeed, in Europe, we charge a premium for the best seats in the house, as do just about all of the sellers of tickets in other industries.” READ MORE
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A two-person startup is suing McDonald’s for tortious interference and $900 million: “Since 2019, Kytch has sold a phone-sized gadget designed to be installed inside McDonald's ice cream machines. Those Kytch devices would intercept the ice cream machines' internal communications and send them out to a web or smartphone interface to help owners remotely monitor and troubleshoot the machines' many foibles, which are so widely acknowledged that they’ve become a full-blown meme among McDonald's customers. The two-person startup's new claims against McDonald's focus on emails the fast food giant sent to every franchisee in November 2020, instructing them to pull Kytch devices out of their ice cream machines immediately.”
“Those emails warned franchisees that the Kytch devices not only violated the ice cream machines’ warranties and intercepted their ‘confidential information’ but also posed a safety threat and could lead to ‘serious human injury,’ a claim that Kytch describes as false and defamatory.”
“Kytch also notes that McDonald's used those emails to promote a new ice cream machine, built by its longtime appliance manufacturing partner Taylor, that would offer similar features to Kytch. The Taylor devices, meanwhile, have yet to see public adoption beyond a few test installations.” READ MORE
Paul Downs is not impressed with this table.
Paul Downs weighs in on Vladimir Putin’s famously elongated conference table: “As professional conference table makers, I have to comment on this world famous photo. There's not one single thing that is good about either this table or this meeting. Inadequate legroom, obsolete tech, wires on the floor, terrible sight lines for screens—and a megalomaniac boss terrifying his cringing subordinates.” READ MORE
THE 21 HATS PODCAST
Somebody’s Hiring All of These People: This week, Jay Goltz tells Liz Picarazzi and Laura Zander that he’s had a revelation about The Great Resignation. Yes, he’s lost some people, but not necessarily his best people. “It shook the tree out,” he says, which is why he thinks businesses should be careful right now about hiring too quickly. Meanwhile, Liz talks about her latest product, a bear-proof trash enclosure, and why introducing it has been challenging. And Laura tells us what happened with the salesman she tried to send around the country in a souped-up van. Plus: Is this a great time or a terrible time to be in business?
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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