We’re Raising Wages for Everybody
We’re Raising Wages for Everybody
In the latest 21 Hats Podcast episode, the owners talk about their hiring challenges.
Good morning!
Today’s highlights: Commercial real estate is doing surprisingly well. Struggling malls are turning to small, independent businesses. And Hello Tushy is figuring out how to sell bidets to Americans.
THE 21 HATS PODCAST
Episode 62: We’re Raising Wages for Everybody: This week, Paul Downs, Jay Goltz, and Dana White talk about confronting inflation, raising their prices, what businesses owe their employees, and the venture-backed competitor who’s opening a store in Jay’s backyard. Among the questions they discuss: Would you take back a rebound employee? Are unemployment payments the main reason owners are struggling to fill jobs? Is there anything wrong with taking business from another business? How many companies are truly disruptive? And do owners take all of the risk? Or are there risks for employees, too?
You can subscribe to The 21 Hats Podcast wherever you get podcasts.
MARKETING
Think you have a marketing challenge? Imagine trying to sell bidets: “Hello Tushy makes bidet toilet attachments that are easy to install, with regular price points of $129 to $149. Aware that the average U.S. consumer is not only unfamiliar with bidets, but also quite puritanical, [founder Miki] Agrawal took an irreverent approach to marketing. Tushy’s wacky social media is filled with buttock puns, references to No. 2, images of beautiful people on toilets, and a rap video about the digestive system process with Agrawal appearing in the crowd as a butt. The Tushy slogan ‘Ask me about my butthole’ is featured on t-shirts, and a line of Tushy lipstick in colors to match sphincters called SkidLip was posted as an April Fool’s joke.”
“‘I have developed a three-pronged thesis around it. The first prong is simply offering a best-in-class product: best design, functionality, easy install, great customer service.’”
“‘The second is artful design across every touch point; art makes you look. The image of a Tushy bidet spraying water and people riding the wave, that’s kind of weird and fun.’”
“‘The third prong is accessible, relatable language. We don't want to be too academic, clinical or technical. I tried and tested those, they do not work. We don't shame or make people feel stupid, because that also never works.”
“‘Sales went up 10X during the heart of the pandemic. We’ve had a few million dollar days, which has been great. ... We’ve had nearly a million customers.” READ MORE
RETAIL
Small, independent businesses are popping up in malls: “The teenagers of the '20s might hang out in a new generation of ‘pop-up villages’ and department stores stocked with a rotation of small brands. Instead of Hollister cologne wafting through the mall, they might smell the sandalwood of a hand-poured, American-made soy candle. Between stores, they grab a cup of ethically sourced coffee at a local cafe. Instead of window shopping at Express or J. Crew, they might discover a pop-up shop featuring the jewelry startup they saw on Instagram last night. That's the scene at places like The Current in Boston and Platform in Los Angeles, shopping centers lending space to smaller brands in exchange for lower rent and selfie-worthy experiences.”
“New department stores like Showfields and Brik + Clik, modern versions of Macy's or JC Penney that curate smaller brands, are taking a similar approach on a smaller scale in New York City, Miami, and San Francisco.”
“Hemant Chavan, a cofounder of Brik + Clik department stores, said the DTC brands he's talked to are clamoring to get into retail so they can work a strategy that includes both online and offline sales.”
"’Facebook ads are not landing anymore. Instagram ads are not landing. So a lot of these brands, which have that marketing budget, they're redirecting to what they call showcase fees,’ he said, referring to the investment required to stock products in store.” READ MORE
COMMERCIAL REAL ESTATE
The commercial real estate market is doing much better than it did after the Great Recession: “More than a year into the pandemic, high-rise office buildings are largely empty. About one of every two hotel rooms is unoccupied. Malls are struggling to attract shoppers. And yet by most measures, the U.S. commercial real-estate market is in remarkably solid shape. Prices fell far less than after the 2008 financial crisis and are already rising again. The number of foreclosures barely increased. Pension funds and private-equity firms are once again spending record sums on buildings. The market’s resilience shows how the federal government’s aggressive efforts to support the economy kept landlords from suffering steep losses.”
“Real-estate owners will have to contend with remote work’s threat to the office market, the dearth of business travel and the broad decline of the mall business.”
“But a number of big global pension funds have been raising their allocations to commercial real estate, which should bring plenty of cash into the market, and prices are already rebounding.”
“Prices since July have increased 7 percent, erasing more than half their pandemic declines.” READ MORE
REOPENING
Some companies want everyone back in the office—even if that means losing people: “‘I am super passionate to get everyone back,’ said Sean Bisceglia, CEO of Curion. ‘What we are really missing is that creativity, and that spontaneity and the ingenuity and talking to your teammates face-to-face. The whole creativity has kind of been gutted without people being together. I've seen a big cultural effect of connecting to your co-workers.’ Curion, a consumer product research and insights company, has around 350 employees across the U.S.”
“The company's corporate office workers have been working from home for more than a year now. And while productivity has increased, Bisceglia said that's part of the problem.”
“‘Productivity is through the roof, but it's over the top—it's too much productivity where people are sending emails at 10:00 at night or 1:00 in the morning,’ he said. ‘You start worrying about burnout.’”
“Bisceglia recognized that the company risks losing employees over the decision.” READ MORE
California is ending its mask mandate: “On June 15, California will adopt recent guidance from the U.S. Centers for Disease Control and Prevention that states that fully vaccinated individuals don’t need to wear a mask in most settings, said Dr. Mark Ghaly, secretary of California’s Health and Human Services Agency. ... Until that date, California will remain under its statewide face-covering mandate. The mandate requires that all residents wear face coverings in indoor settings, and that coverings be worn in outdoor settings where social distancing isn’t possible.”
“Workplaces are not included in the CDC guidance that California plans to adopt. Employers currently must adhere to workplace masking requirements as set by California’s Occupational Safety and Health Standards Board.”
“The board is currently considering lifting its masking mandates by Aug. 1, and is set to weigh in on changing the mask mandate at its meeting this Thursday.”
“California doesn’t have immediate plans for enforcement or ways to verify whether individuals who take off their masks are vaccinated.” READ MORE
The CDC’s new guidelines do not mean you have to get rid of your mask mandate—especially since you can’t know for sure if someone has been vaccinated: “Switching your company policies suddenly due to the most recent announcement could put employees and customers who have yet to get vaccinated at risk of infection. While you may be desperate to get back to business as usual, the timing is not right if you're putting the health of employees and others at risk. That's why it's crucial in this time of particular uncertainty to remember that guidance is just that, guidance—it's more important to stick to local and state guidelines and do what's best for your community first.” READ MORE
This is not going to be easy for America’s mask makers: “The small U.S. manufacturers that rushed to produce face masks over the past year are now stuck with hundreds of millions of unsold face coverings because China is flooding the market with below-cost masks, and most may not survive the end of the pandemic. That's the thrust of a letter to President Joe Biden released Tuesday by a trade group representing 26 small manufacturers that set up production of the badly needed safety items as the health crisis took hold last year.”
“When masks were in short supply last year, prices surged. But prices have now crashed, and hospital administrators and others are shopping for the best prices in a market crowded with new offerings.”
“A box of 50 surgical masks which sold for more than $50 a year ago can be found for $5 now.” READ MORE
OBITUARY
Art Gensler built a global architecture firm: “Mr. Gensler and his wife, Drue Gensler, founded M. Arthur Gensler Jr. & Associates in San Francisco in 1965, teaming up with a business partner, James Follet. The practice started in a one-room office with just $200 in the bank, by the firm’s account. The firm grew exponentially, ultimately employing thousands of people at offices in 50 cities around the world. The firm’s revenue exceeded $1.5 billion in 2019.”
“At a time when many architects overlooked interior design, Mr. Gensler made it a key component of his architectural practice.”
“He said he designed spaces from the ‘inside out,’ meaning he thought first of what a client wanted an interior space to look and feel like and then used those desires as inspiration for the exterior of a structure.”
“Mr. Gensler’s most prominent works include the terminals at the San Francisco International Airport and Shanghai Tower, a twisting glass structure that is China’s tallest skyscraper and the second-tallest building in the world, at 632 meters, or 2,073 feet.” READ MORE
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