Who’s Running the Business?
Steve Krull and Dan Golden watched helplessly as their digital marketing agency lost 40 percent of its revenue in the second quarter of 2020. And then things got worse.
Here are today’s highlights:
Job growth slowed even before Omicron hit.
A tech company tests a four-day work week.
Should the office of the future be more of a clubhouse?
The owner of an events business says people need to be around people.
THE 21 HATS PODCAST
Bonus Episode: Who’s Running the Business? This week, we talk to Steve Krull and Dan Golden, co-founders of Be Found Online, a digital marketing agency based in Chicago. In the second quarter of 2020, as COVID hit and their clients stopped advertising, Krull and Golden watched helplessly as their agency lost 40 percent of its revenue. And then things got much worse: By the end of the year, both of their wives would be diagnosed with cancer. This is a conversation about how Krull and Golden have coped with matters big and small, personal and professional, throughout an experience they compare to being in a knife fight in the middle of a forest fire.
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THE COVID ECONOMY
Job growth slowed even before Omicron: “Hiring slowed in December to 199,000 new jobs, the Labor Department said Friday, while the U.S. added a record number of positions in 2021. The jobless rate declined to 3.9 percent. Friday’s jobs report captures hiring activity that occurred before the Covid-19 Omicron variant spread rapidly in late December. Though the variant has taken a toll on some businesses’ revenue, many employers are clinging to the workers they have as consumers continue to spend. Jobless claims, a proxy for layoffs, clocked in at 207,000 last week, near the lowest level in five decades. ‘The economy right now is in a good spot and is resilient enough to withstand this Covid surge,’ said Julia Pollak, economist at jobs website ZipRecruiter. ‘We just expect the year to bring a more moderate, sustainable pace of recovery and growth.’”
“Many economists expect employers to remain in hiring mode because they still have roles to fill amid strong consumer demand.”
“Job openings are historically high, providing a bounty of opportunities for workers who are without work or seeking extra cash.”
“About 13 percent of small-business owners in a National Federation of Independent Business survey cited labor costs as their top business problem, a 48-year record high.” READ MORE
America is calling in sick: “Montclair Bread Co. closed last weekend after a quarter of the staff tested positive for Covid-19. The bakery missed out on 25 percent of its monthly sales. ‘We're basically open during the week to prep for the weekend,’ said Rachel Wyman, the owner of the artisan bread, specialty doughnut and treat shop in Montclair, New Jersey. The 10-year-old bakery stayed open throughout the pandemic because it was considered an essential business. ‘I can't remember the last time I made the decision to close on a weekend,’ Wyman added. Without enough bakers to operate, she didn't have a choice. She made the decision Thursday to close down for a week to give the whole staff time to ‘get tested and come back healthy hopefully.’”
“Wyman is paying her employees for the week off. But it's coming out of her budget, so she's late on paying rent for her home.”
“Although she hopes to open this weekend, the plan is fluid. She found out Wednesday that two more employees tested positive.” READ MORE
The number of small businesses requiring vaccinations is on the rise: “The share of U.S. small businesses requiring employees to vaccinate has jumped in most big cities in recent weeks as a highly contagious Covid-19 variant spread across the nation. In New York City, which put in place one of the strictest private-sector mandates of the country at the end of last month, a third of small firms are asking their workers to get the shots in the latest weekly U.S. Census Bureau Small Business Pulse Survey. That’s up from 28 percent the week of Christmas and less than a quarter three months ago.”
“The New York metro area has now surpassed San Francisco, which until recently had the highest percentage of businesses requiring proof of inoculation.”
“A few cities saw a decline compared with the end of September, including Miami, Philadelphia, San Diego and Dallas, which has the smallest rate at just 6.9 percent.”
“A separate survey found that 53 percent of U.S. workers want employers to record proof of vaccination.” READ MORE
The U.S. Supreme Court will hold a session today assessing the Biden administration’s vax-or-test policy: “The issues come to the court on an emergency basis during a record increase in U.S. Covid-19 infections. In a departure from its usual procedures, the court is hearing arguments on cases that haven’t been fully aired in lower courts. Technically, the justices—all of whom, according to a court spokeswoman, are fully vaccinated and have received booster shots—don’t have to issue a definitive decision on whether the administration’s vaccine rules are lawful. Instead, they are considering whether President Biden’s team can implement them now while more detailed litigation continues.”
“The answer is likely to decide the fate of the administration’s current approach to a virus that has killed more than 800,000 Americans and infected more than 50 million. Moreover, the court’s decisions could reset the public-health playbook for years to come.”
“Lower courts have blocked that mandate in half of the states, but the agency is preparing to begin implementing it this month in states where it is allowed to do so.” READ MORE
A former dean of Harvard Business School says the post-pandemic office should be more of a clubhouse than a workplace: “Since the industrial age, economic efficiency and productivity have required the centralization of the tools of work in a shared location. With the advent of the internet, the cloud, smartphones and affordable laptops, these tools can now be readily decentralized. If the primary purpose of an office today is no longer to get actual work done, then perhaps it’s better conceived, as these executives suggest, as a place for connection and community—as a clubhouse rather than a workplace.”
“If you walk amid cubicles at an office and find many people at their desks wearing noise-canceling headphones and staring silently into a computer, it’s a sign that a company needs to rethink its expectations.”
“Erica Pandey, writing recently in Axios, reported that 60 percent of companies are redesigning their offices to accommodate the shift to hybrid work, with many eliminating private offices and devoting more space to café-like seating.” READ MORE
Bolt tested a four-day workweek, and it’s never going back: “The San Francisco-based ecommerce developer piloted the program last fall, and the results were overwhelmingly positive, said founder and CEO Ryan Breslow. ‘I couldn’t imagine running a company any other way,’ he said. Productivity has increased, work has been streamlined and employees are happy, he added. A survey taken at the end of the three-month trial period found 94 percent of workers and 91 percent of managers wanted the program to continue.”
“Bolt, which has 550 full-time employees, is one of a handful of companies in the U.S. that have moved to the shortened workweek.” READ MORE
Everyone hated meetings—and then Zoom made them worse: “Every meeting needs a clear objective. Regularly convening 40 employees to have each one spell out what they’re working on, and listen to 39 others do the same, doesn’t count. Instead, status updates should be done in one-on-one conversations, over email or in a spreadsheet.”
“The larger the meeting, the tougher it is to stick to an agenda and keep people engaged. Smaller meetings let workers tackle specific problems, rather than passively delivering updates.”
“Companies need to train bosses to take an active lead in conducting hybrid meetings, he says, because they have the potential to be awkward, with people attending remotely often jockeying for attention.”
“Better use of the chat function can help. While it’s often employed for side conversation or a quick goodbye when someone needs to duck out early, the chat tool can provide a way for workers to weigh in without derailing a speaker, or to provide feedback in real time.” READ MORE
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Is OpenSea, valued at $13 billion, comparable to eBay at the beginning of the internet? “The company is an online marketplace for buying and selling non-fungible tokens, or NFTs, which are essentially digital collectibles like avatars and virtual real-estate. The first marketplace of its kind built on the Ethereum blockchain, the site rode a wave of interest in blockchain technologies this past year. Its transaction volume in 2021 spiked to $14 billion, up from a mere $21 million in the previous year, according to data from Token Terminal.” READ MORE
Paul English, founder of Kayak and Lola, is starting an incubator to back consumer-oriented apps: “Boston Venture Studio, launched earlier this week, will differ from typical incubators. Instead of providing resources, desk space and advice to founders with clever startup ideas, English instead will come up with the ideas himself by brainstorming with five to 10 team members, a group that includes longtime confidant and collaborator, Paul Schwenk. English is the majority owner of Boston Venture Studio and will maintain equity in the spinoffs, but will line up VC funds to support them. He hopes to create a new anchor — or anchors, as the case may be — for Boston’s consumer-tech scene.”
“‘I’m realizing the most fun I ever have working is the zero-to-one stage, the beginning stage, going from concept to prototype to customers,’ English said. ‘I like the fear of not knowing if an idea is going to work or not, and trying something from scratch and talking to customers, and doing that rapid refinement.’”
English has already selected “two apps that will be nurtured within Boston Venture Studio before being spun off: Moonbeam, a podcast player that makes playlist recommendations, and Xiangqi.com, a site for playing and learning about the game known as Chinese chess.” READ MORE
Another incubator in Boston claims to be for “everyone else”: “[EforAll] fosters local entrepreneurs, providing them with one year of training in business skills, access to mentorship from high-level executives in the area, and $4,000 to $5,000 in seed funding to get started. ‘There’s two different Bostons,’ Brennan told me. ‘[One] with venture capital flowing freely and great exits,’ and the other where founders have day jobs, tinker with their startups at night, and are hoping someone will give them a few thousand dollars to scale their company, he said. These founders aren’t trying to be the next big thing, Callender added, they’re trying to solve pressing problems in their community — and stay there.”
“The Roxbury chapter, which is one of nine EforAll communities in the state, opened its doors in 2019. Since then, it has enrolled five cohorts of entrepreneurs, graduating 76 businesses that have created over 85 jobs in Boston’s Roxbury neighborhood.”
“The businesses range from tech startups to brick-and-mortars: They include the Black online radio station SparkFM; Amie, a tech incubator that trains and places business development representatives into Boston tech companies; and Fusion Dolls, a multicultural doll company.”
“According to Callender, 92 percent of the businesses that have graduated are BIPOC-led; 65 percent are women-owned; 32 percent are run by immigrants; and 27 percent of the founders were previously unemployed.” READ MORE
John Bibbo, president of Event Source, had a response to a question asked in yesterday’s Morning Report: “Might be a little biased here, but being in the event business, the answer to your question is, we should be holding big events. I just came back from a trade show that happens twice a year. In July of last year, it was sparsely attended in Chicago. This week it was in Orlando, and it was packed. Although most people had masks on, an alarming amount in my opinion did not. But business has to go on.”
“On another note, the day before the show I wanted to check out a bucket list item: the 50th anniversary of Walt Disney World. So we will see how I fared in a couple of days.”
“Wore my mask when people got too close but point is, this thing isn't going away and will come back, but life has to go on unless you want to seclude yourself in your home locked down. It's your option.”
*I turned 50 in July. I can't imagine being my parents at 74 locked up. They got their shots, wear a mask, etc. Not saying if I was 74 today I'd be hanging out in Disney World but we need to get back to normal—even if it is wearing a mask at Disney World. People need to be around other people.”
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