A year into the Covid-19 pandemic, Inc. asked a selection of small-business owners: What's the most surprising (or counterintuitive) thing you found yourself doing during the pandemic that you'll keep doing or will shape your business going forward? From cutting 50 percent of a company's product line to developing a new nightly bathing routine, here are five of our favorite answers.
1. Take an hourlong bath each night.
--Jon Staff, founder and CEO, Getaway
Staff's Brooklyn-based hospitality startup unexpectedly thrived in 2020: Turns out, people value the concept of escaping to a tiny cabin in the middle of the woods without any Wi-Fi, work, or other people amid a pandemic. The company saw a 150 percent increase in bookings compared with 2019, and nearly 100 percent occupancy rates at all 13 of its current locations throughout the year. While trying to minimize the increased workload's pressure, Staff developed a new nightly bathing routine that's here to stay.
I needed a replacement for my commute. That 25-minute walk was the barrier between my workday and my after-work day. Once I started working from home, it was Zoom to Zoom to Zoom, and at the end of the day, I was still here. All the stuff I looked at all day was still here. There was no downtime to let the mind wander, process that difficult conversation from earlier, or figure out what to eat for dinner. So, in March or April, I started taking an hourlong bath every night after work.
I'm not in there with my electronics. I'm not talking to anybody. The whole thesis of our business is that we need boundaries--you'll be a better worker if you get away from your work. I've come out of stressful meetings or tense conversations with colleagues, finished the day in the bath, and realized unprompted: I was, unintentionally, a jerk to that person. The next day, I call them back and say, "I'm sorry, that was rude" or "I had a new idea." My colleagues will tell you, "That's how Jon thinks best."
The irony here: Getaway cabins have no bathtubs. We're going to have to correct that.
2. Cut your product line by 50 percent.
--Nina Faulhaber, co-founder and co-CEO, Aday
In 2015, Faulhaber and co-founder Meg He launched their New York City-based direct-to-consumer fashion startup as an intentionally minimalist brand. But the tried-and-true DTC road map often involves chasing hypergrowth at the expense of profitability, resulting for Aday in an ever-growing product list and strong temptation to enter new categories. Until, of course, Covid hit--forcing the pair to get back to their fundamentals.
When the pandemic hit, a lot of brands intuitively pursued the path of chasing demand. More marketing, more sales, more messaging around buying--because we were all sitting on so much inventory. Instead, we went to our best repeat customers and asked them, "What do you actually really want?" Then, we were superduper strict in scratching the things they didn't unanimously love. We reduced our number of new and returning styles for 2020 by 50 percent.
There's a metric, gross margin return on investment (GMROI), that we really made the core of our business. We only focus on products that maximize GMROI. How fast is the inventory churn? Which pieces will maximize profit at the end of the day? It took a lot of financial literacy education within Aday: We learned so much, and reminded ourselves how we can build this business in a sustainable way by focusing a lot more on efficiency and margins than revenue.
Within the next 24 months, we'll definitely be profitable. Maybe within the next 12 months. That's years ahead of schedule.
3. Make time for family.
--Nicole Snow, founder and CEO, Darn Good Yarn
Snow's Clifton Park, New York-based wholesaler and retailer of recycled yarn, clothing, and home goods has made the Inc. 5000 list of fastest-growing companies in America the past four consecutive years. Covid threatened to end that growth streak until a hot second half of the year brought Darn Good Yarn up to $10.1 million in annual revenue, a small increase over 2019. The frantic recovery was punctuated by Snow's personal transition to a four-day workweek, prompted by a scary moment with her 4-year-old daughter.
Right after Thanksgiving, one of my employees tested positive for Covid. We all had to lock down and go home. I had to FaceTime my daughter Anna from my own house--and when I came out of quarantine, she started stuttering. My therapist said little kids can show anxiety that way. One Friday, I happened to have a rare half-day, and she has Fridays off from school--so I wound up totally hanging out with her. That evening, she wasn't stuttering.
The business was still hurting. We were still living day to day. But my family was more important, so Fridays now are "Mommy and me" days. I've doubled down on Mondays through Thursdays, waking up at 4 a.m. and rallying until the evening. I wake up on those days with anxiety because I have so much to do. Can I do this forever? No. But my daughter isn't going to be 4 forever, and the self-discipline makes me more productive in those four days than my old five days.
Showing that vulnerability has allowed people the space to come to me if they need help. Pre-Covid, we were so focused on growth. Now, it's stability. I'd rather have employees able to focus and not half-ass things. I'm recognizing the value of employee longevity, and not just burning people out.
4. Get into TikTok.
--Aaron Rasmussen, founder and CEO, Outlier.org
At the beginning of the pandemic, Rasmussen felt lonely and isolated. On a lark, the Brooklyn-based virtual education startup founder made a TikTok video called "Nice Things Around the World." Thanks to his storytelling chops and film background--he's also a co-founder and ex-creative director of MasterClass--the video went viral. Interest in the 37-employee startup, which offers online college courses for credit at the University of Pittsburgh, has grown by 600 percent since pre-Covid times, Rasmussen says. And thanks to TikTok, he's learned a surprising amount about his Gen-Z audience.
My TikTok is really just for my own art. And it's great--I've got 50-something thousand followers at this point. But it also means I watch a lot of TikTok, which helps me understand: How does Gen-Z feel about all of this? You see jokes about online classes. People talking about student debt. People struggling with losing one of their formative years. The most applicable insights are probably in marketing: understanding what their concerns are and speaking directly to them.
Hiring off TikTok is also fascinating to me. You see these videos of Gen-Zers making jokes about entry-level positions requiring nine years of experience. How do we angle our company to get talented entry-level people who aren't turned away for that reason, especially if they're a little bit jaded? As far as hiring people directly, some of the best editing and storytelling I've ever seen is on TikTok. We've talked about launching a business account for TikToks to showcase the jobs we have open, give advice, and take in feedback.
That mainline into the sentiments of another generation, from a business standpoint, isn't going to hurt. It's a huge privilege to have that perspective.
5. Produce content completely virtually.
--Karla Gallardo, co-founder and CEO, Cuyana
From its 2011 launch, Gallardo's San Francisco-based fashion startup grew rapidly: consistently doubling its revenue year over year, and reaching profitability while landing $30 million in growth equity financing from HIG Growth Partners in 2019. Last year brought layoffs, and marked Cuyana's first-ever year without double-digit growth--which, Gallardo says, forced her to double down on the "foundational stones" of profitability and financial sustainability. It also forced her to figure out a key question for any fashion brand: How do you produce photo shoots virtually?
It's pretty terrifying to think that our first photo shoot of 2020 was when shelter-in-place started. We have photographers and models in Europe. Our team is in San Francisco. We have some people who fly in from New York and Los Angeles. At that point, the borders were shut--there was no way the team was going to come together.
Photo shoots are like so many other things: You have your way of doing it, and that's the best way of doing it. How do you style the model virtually, direct the shoot virtually, deal with time zones? We figured out how to do one in London with team members dialing in from different locations. The previous day, we did hair and makeup through FaceTime. We found software to help our art director here in San Francisco watch the entire shoot live, every single photo that came in, so she could make adjustments in real time.
We've done a few of them now, and honestly, it's so much easier and better. Post-Covid, there's no reason to change it. We don't need to fly so many different types of people to these shoots, which saves money. And if more people are able to join virtually, the work product is so much better. It allows more voices into the process.