That’s a Stupid Question

[Music] hello everyone welcome to what used to be the 21 hats podcast and is now the business Advantage TV podcast I'm your host Lauren Feldman this week as the numbers of new Corona virus cases explode across the country we talk with three of our regulars about how they are trying to make plans for their businesses and what their expectations are the conversation heats up a little as it becomes clear that one of our owners hi Jay isn't quite ready to confront the possibility that he might have to deal with another shutdown by contrast Laura Xander tells us we're operating as if there is a shutdown so yeah we're operating the same way we were 2 months ago even in Good Times owning and running a business can be a lonely Pursuit our hope is that these weekly conversations will if nothing else let owners know they are not alone in facing these challenges this week's podcast lineup features Karen Clark Cole who is CEO of blink a user experienced research and design firm in Seattle Jay goz whose businesses in Chicago include a picture frame shop artist frame service and a home furnishing store Jason home and Laura Xander co-founder and CEO of Jimmy beans wool a digital version of a neighborhood yarn shop that is based in Reno Nevada and also has a wholesale operation in Fort Worth Texas the episode is titled that's a stupid [Music] question all right so let's get right to it unfortunately it seems we're not quite done with this Corona virus uh in fact cases are EXP floating across the country some states are pausing their reopenings uh retailers like apple are reclosing stores they just reopened the possibility of another shutdown seems increasingly likely uh Laura let's start with you you have operations in both nevad Nevada and Texas uh two states that have paused their reopenings where do things stand with uh Jimmy beans wal what does it look like to you um yesterday in Nevada we sent everybody home who could work from home so they had come back into the office for a couple of weeks and then with the governor just issued you know mandatory masks he issued a couple of other things so just to be on the safe side um we're back to what we were doing during lockdown so most people are working from home and then people who can't work from home are um working in the warehouse they're wearing masks our retail store is still closed we had a tentative open date of August first um and so and we actually have an event scheduled for Mid August so we're kind of just watching and waiting to see you you're still hoping um sure I mean yes hope I think is a strong word because I don't I don't know we don't have any control over it so I don't know that we're even hoping we're just kind of watching and waiting for the event that we're having it's a retreat and it's small I mean smallish 30 to 50 people um but quite a few people have just reached out because a lot of people come from around the country and they want to buy their plane tickets you know and they want to come um and they want to attend and we were just having a conversation the other day about before face masks were required in Nevada you know do we require face masks at the event um and of course we think it's the right thing to do but you know we realize as you guys have probably dealt with that some people are going to be really upset if you require them um and that doesn't necessarily change our decision-making but it just is kind of an interesting thing that we have to be aware of and that we need to talk about how are things in Texas um things in Texas are going they're actually going really really really well um as far as shutdown you know we're in Fort Worth which is outside of Dallas you know if you look at the map um Texas is getting a lot of press right now for being you know for the cases Rising so drastically Houston in particular I think Houston in particular and you know it's funny my dad lives in Corpus Christie and if you I looked at the map like yesterday and Corpus is in one of these red zones you know where the cases are just Rising dramatically but they've risen from like 04 cases a day to four cases a day so yes it had it's I think it's there's a lot of buyer beware when you interpret statistics and making sure that you're comparing Apples to Apples so yes it is a 10 time increase but you're only talking about I mean their their rate was so low to begin with you're talking about Corpus Christie right not not Houston cuz in Houston they they're running out of beds and uh obviously it's serious there yeah they have the numbers for sure um but the entire state if you look at a lot of the different areas in the state that are marked as red because they have drastically increased they're very rural areas that have gone from basically having no cases to having a couple cases so this recent surge hasn't had an impact on what you're doing uh at the company you bought in Fort Worth um not a we're not a significant impact no I mean we're still operating the way that we were during lockdown we haven't really changed anything people who can work from home or working from home um you know we are very spread out we work in a very very open air environment so it's basically like we're outside and and I should point out it's it's not a retail situation you're you're making uh yarn yep and people you know they work in different areas of the building I mean we have 25,000 square feet and so it's very plausible that one person has 3,000 square feet to themselves you know so there's not a lot of like cross contamination um and the people that are a little bit closer together they're over stoves you know there's the heat they're big fans um people are wearing masks and gloves and we've got the hand sanitizer and you know we had a whole conversation yesterday about everything you know what do you guys need please if anybody is sick or you know anybody in your family don't come to work we'll still take care of you have you had employees get sick um we have had a couple of people get sick they didn't end up having covid but they've been sick and so they go home for 14 days you know or until they take a test and find out we had one of our employees her husband was exposed works with a guy who did test positive and they had just gotten out of a meeting so she stayed home and then she got tested once her test came back she came back Karen tell us uh about Seattle um in past podcasts you've praised the governors of Washington Oregon and California for being uh early and aggressive and coordinated in what they did um but California in particular I think is uh one of the states showing uh an outbreak now uh what does all that mean for for Blink for us the bigger deal is in San Diego and in Seattle is where we have our research labs and so in all the other offices it's fine we're encouraging everyone just stay home as long as you can you know into the fall and that's that's really fine um you know nobody likes it but they it's fine um but in in Seattle and and S and San Diego we actually have to run physical studies and we have some clients where what we're testing for them is an actual physical thing and so we can't do that remotely like we're doing most other stuff so we're waiting until you know until it's safe till the um Governors are allowing those offices to be open and then we're we're doing it very carefully so we've got all kinds of massive amounts of protocols in place including all the things that the governors are mandating in order to open so we got to have the um the plexiglass Shields when you come in to check in everybody has to check in we do a temperature check they have to wear mask so all those things are in place have you personally been into the office in Seattle I have yeah not very much we're gearing up for both of these facilities to open beginning of July so what we're doing is um the leadership team is we're on a rotating schedule so one of us will be in the office um every day of the week so like my day is going to be Wednesday which I'm actually really looking forward to um so uh but but again it's minimal minimal people in the office there are some people who are already back in the office um because their home working environments aren't very conducive to actually getting any work done when it's a one-bedroom apartment sharing with kids and spouses all on meetings are you at all concerned that there might be a pause in uh in your area that would prevent you from doing that by the first oh yeah I'm I'm expecting it not probably not by the 1 because that's only a week away but I'm sure in August something's going to happen and we're going to dial it back again so if we can be open and run a few studies get some of our clients further along even for a month Jay uh Illinois and specifically Chicago are are doing much better than some of the other states uh we've been talking about in past podcasts you've talked about being uh kind of excited about some of the opportunities that you saw coming up as a result of the crisis are you other times when I've talked to you you seemed more stressed than excited where where are you today um I have an opportunity I have a store that is was was a well Lo store that's closing and I I I made a deal with him and we're going to take over his mailing list and work together to try to get some of those customers in so just as I figured what happened the market has been disrupted I don't care what business you're in the market has been disrupted what does that mean it means there's going to be customers looking for new suppliers and vendors there's a bunch of employees that you would have never been able to hire six months ago that are now thinking yeah maybe I should leave here tell me about the uh the store though um it sounds like this is a situation where somebody had kind of decided to to pack it in so I'm assuming you're getting a a good price um is there any concern on your part about doing this at a time when things are flaring up around the country I've got this zero risk deal I decided not to take over another lease I don't want to take it I'm simply working with him to transfer his customers over to us and giving up a percentage it's a zero risk deal for me oh so that mean you're not not you're not actually like buying his store no no I thought about it and the more I thought about it is it's the framing industry in general it's it's it's the Suburban stores are difficult I decided to I'm working out a deal with him to just get some of that business to my existing locations he's it's found money to him taking care of his customers everyone's happy and there this there's going to be opportunities everywhere and I'm sure there's going to be some employees out there that like I said that are looking for jobs now so now it's the time to go from defense to offense and start looking for some opportunities well that's a a really interesting point is now the time to go to offense would you say that if you knew that another shutdown was looming when I say offense it means if you need people now is the time to start looking for them listen I've told this story before the big crash I bought a gigantic building for super cheap this is kind of a different environment we don't really know how this uh plays out listen obviously there's 50 different variables I'm not saying take your last dime and go I'm saying if you have some money I mean it's all about calculated risk when this is all done the companies that got out and looked for opportunities and you know Karen just talked about she's still trying to do some things for clients I mean she's not hiding under the table she's trying to do what she can Laura is out there we're all out there doing business and we're flying the plane through the storm we're not hiding in the back there's a lot of companies right now who are hiding in the bank lots of companies are going to go broke and they're going to blame it on the Corona virus they're going to blame it on the government they're going to blame it on their competitors taxes whatever I'm watching themel put them out of out of business right now perfect example pet store in the northern suburbs of Chicago someone goes in there to get something none of the employees are wearing masks now first of all it's state law at this point you're supposed to be wearing masks the my friend's daughter works there she goes they're not wearing me she goes her her immunity is going to kick in how many customers are going to walk in there and walk out and say I'm never coming here again what do you think 50% 40% 30% she's gonna put herself out of business now as sure as I'm sitting here she's done why because of the Corona virus no because she's an idiot that's what's going on where you are uh Laura I'm I'm curious I think you know with the uh cases rising in Texas and Nevada where where you are uh I would kind of put the same question to you would you be doing anything differently right now if you knew a shutdown was coming um no because we're just kind of pretending that a shutdown has happened Lauren Lauren just a second that's a false question if she knew she doesn't know a shutdown you can't ask that question we don't know if a shutdown's coming wait I can't ask that question you can't say if you knew she can't know so how can you you've never heard of a hypothetical question J no it's a stupid question sorry if you knew if you knew a helicopter was going to fall in your head would you go outside no I wouldn't okay Jay you're replaying a conversation we had back in March where you you took a similar tone when Karen said that she knew this was going to get bad and you weren't ready to hear that but Karen was right oh no no she said guaranteed no she said guaranteed that's what she said she said guaranteed well she was right okay that's different than you said guaranteed and I said wait you can't now well I'm not guaranteed I'm just asking a hypothetical and Ken your credit when you told me how bad it was I really didn't get it I'm the first to admit I didn't get it I didn't say you were wrong it was the guar if you would have said I'm pretty sure I'm sure it was the guar but you were absolutely right I could have never imagined things are going this way I recognize in hindsight you were living it so you saw it it's hard to imagine until you see it so Jay what why are you so sure that couldn't happen again wait I'm not at all saying I'm not sure it might happen again no question you said it was stupid of me to ask the question no you said if you you knew it was going to happen that's what you said if you knew she can't know all right all right go ahead and answer the question anyway we're operating as if there is a shutdown so like I said still have people working from home only the essential people here um you know so yeah we're operating the same way we were two months ago are you putting money into to marketing or uh hiring or anything like that where you're you're not sure whether this is a good time to do that no but I think we're in a unique position because we had just acquired this business and there's still so much foundational work to be done so this is a good time for us to be very quiet and slow and for us to work on systems and processes and you know getting inventory so we're not focused on growth we're just focused on survival on survival and Improvement so you know like the guys in the warehouse had never had computers before now they have computers and we're working on computer training we're doing a lot of training stuff Karen your your business blank I think is the one business in this group um that has been strong throughout is that still the case yeah we have um we are still profitable which is good uh our revenues are down um by um probably 10% which isn't obviously not bad at all um but we've you know we're making adjustments we've fured some people um uh but not many um and we're you know we we were running lean before so we um have been really careful to manage um the bottom line to make sure that you know we're not taking big dips so um so overall we're doing great and you know I've talked about this before but but we had a rough year last year and so we have all kinds of systems in place to keep you know watching like a hawk everything that's going on and so we have been able to react very quickly and I just saw on the news this morning that Microsoft has officially shut all of their retail stores which is totally amazing I can hardly believe it um and they're just focused on digital sales now so they're going to have they're going to beef up their digital storefronts all that kind of stuff so my feeling is we're going to be really busy and so we're bracing ourselves for that actually thinking that there's going to be a massive upsurge for us as soon as we can get our labs open when you talk about that massive uh volume that could be coming in is that something you would have to gear up for uh would that require an investment uh no not not MoneyWise but it would be hiring so we just need bodies to do the work so we're we're actively recruiting in our contractor pool which is what we do when we when we're not sure that it's a new normal it might be just a spike Jay you still there you're asking the wrong question what you really mean to ask everyone is given the risk involved with not knowing whether a pandemic's coming again or it's going to get worse are you comfortable investing some money now do are you taking some calculator risk that's a good question and I think we've all answered it to a degree and the I believe the answer is you have to take some risks that's what we do the question I'd like to ask the other two is have you seen your stress causes people to make bad decisions have you seen your competitors doing anything stupid lately during this do you see any opportunities because your competitors have like dropped the ball yeah I mean one of our main competitors went out of business yeah there you go okay um the other main competitor didn't address black lives matter yeah you know they just left it sitting there has that been a big problem for them are they paying a price for that um you know that's a good question I don't know I don't know what their volume is I don't know you know I don't know what's going on on the inner circle you saw what I did when we had a closed down I put a big sign in my window we miss you drove all around Chicago how many companies r ERS put a sign in their window other than an 8 and 1 half by 11 sheet of paper in the front door how many they're paying $55,000 a month for rent cars are still driving by and no one thought maybe we should put a sign in the window that's just not smart retailing it just isn't there's going to be some Fallout from this but it's not going to be a direct effect of covid it's going to be the direct effect of stress and about making bad decisions well some of it may be the direct effect of covid I mean oh for sure for sure I'm just saying some of them are going to be sure oh Jay God if we were just all as smart as you are there you go okay I'll just sound dumb so no one will be offended okay Laura I wanted to follow up with you one of the last times you were on you talked a little bit about uh your situation in Texas that and that that's where you are today right yes your plan I think you told us was to go down there spend two weeks and then go back uh to Nevada is that what you're doing yep I go home tonight and has that worked out well for you yeah yeah it's been great the travel the flight has been okay well it was one flight oh you this is your first time down there and you've been there for two weeks yeah I mean the flight was full what was interesting was going to the airport and seeing half of the people not wearing masks in the airport going on the plane and everybody's supposed to be wearing one but people take theirs off when this when the flight attendant walks away um and so observing that was very sobering you know and all I can do is like I've got my n95 on I don't touch a single thing you know I didn't get up I don't move I don't um you know don't touch my face wash my hands as soon as I get off the plane and it has been a really interesting study in human behavior um to watch who goes along with this and who doesn't I mean I went to Austin this weekend and all I kept hearing was Austin has mandated masks they've mandated this they've mandated that I check into my hotel and it's a top chain hotel and there are five guys sitting in the lobby just chat chat chatting not you would never know that this is happening the two women that are um at the front desk they don't have masks on they're chatting with the guys talking about what bar they're going to go to that night it's the same in Seattle like you see people driving in their cars with their masks on and then other people you know having a barbecue at the beach like as if nothing ever happened yes exactly Laur did you go to Austin for business or for for pleasure yeah I went to visit um a shop so one of our customers who's been a friend of mine forever so I went down to her shop and you know she's doing so her retail store is open um they're all wearing masks obviously they've got their cleaning stuff down and they're just doing it by appointment so one person in at a time you know to go in and touch the yarn and then you know then we went and had coffee and we sat outside you know kind of far away from each other and dropped the masks have you been comfortable staying in hotel um that was the no I rented an Airbnb because I didn't want to stay in a hotel and I wanted to reduce you know the number of people I come into contact with so I just I'm renting I'm staying in somebody's garage so I haven't seen anybody and then I did stay in the hotel the one night yep the one night um and other than those guys I didn't see a single person the whole time I was there you touch the elevator button you touch it with my elbow I open the door with my elbow wash my hands constantly you know every time I touch anything so so given the fact that there weren't very many people there I felt okay I was more comfortable than I thought I would be the last time we talked about uh your operation down there you were talking about uh figuring out who who who should be leading it have you solved that situation yeah we did um the HR manager who had been here for about two and a half years um she stepped up and she has had really stepped up for the last few weeks once the other general manager had left um and she so you know when I got here we talked about it and she is officially the general manager here now um and has done a fantastic job good for both of you that she stepped up you recognized that you supported it good for both of you yeah I mean the whole team here it is it is a magical difference um just the last two weeks the whole team here is has really stepped up um in so many different ways so have you figured out what the lesson from that is the lesson is you have the wrong one wrong person in your company in a management role it's you're it screws up the entire all it takes is it screws up the entire Dynamic you're totally right sh people down shuts people down it just it's yeah so you figured it out and you fix it hats off to you well great we're out of time big thanks to Karen Clark Cole and Laura Xander uh some thanks to Jay goz no you don't need to thank me no need to thank me no I always thank you Jay uh you make it fun thank you everybody be careful out there thanks for listening everybody this episode was produced by Jess thubron founder of blank word Productions remember we started the 21 hats podcast to help business owners feel a little less isolated to let them know they aren't the only ones fighting these battles if you got something out of this conversation please help us reach more people tell a friend subscribe and review us wherever you get your podcasts follow us on Twitter at 21h hats and let me know if you have a question or a comment or a topic you'd like us to cover my email address is L Feldman 21h hats.com see you next time [Music]