How Business Leaders From Blo and Industrious Are Coping With Coronavirus
By: Courtney Rubin
Tags: Coronavirus Diaries, Coworking, Construction, Business, Beauty

You can’t blow-dry hair remotely or build houses over Zoom. The pandemic has been particularly painful for businesses that require customers and employees to physically be on-site. Three executives in the construction, hair care, and coworking industries shared with Marker the pivots that have enabled them to keep their companies going.

The coworking industry

In early 2020, New York City-based coworking company Industrious was flying high, with $230 million in venture capitalist funding raised to date, 500 employees, and more than 100 locations in 50 cities. Then the coronavirus hit. Would everyone stop paying for office space if they were all working from home? CEO Jamie Hodari talked with Marker about the scramble to keep customers — and what might happen when we can all go back to the office.

In early March, we started thinking, “Holy shit, what are we going to do?” At the time, we were still in our headquarters, and we had a room we started calling the Warren Room. I think the phrase “war room” is tired and kind of martial. We had a big picture of Elizabeth Warren, and it said: “We have a plan for this.”

We started working on our plan and an offering we call Continuous. First there were five employees working on it and then 80, and now there’s 230. It’s basically tools and services and products to make the experience of working from home more productive and to combat the social isolation.

Photo courtesy of Industrious’ Jamie Hodari

Our offices are all still open, technically, in that our customers have keycards. They’re cleaned daily, but they’re unstaffed. We have a lot of customers that get their mail there, including medicine. Some people say, “Why aren’t they closed, full stop?” but we’re not going to change the locks.

To help with social isolation, we started working on moving all our actual real-life coworking communities into Slack communities with hyperlocal discussions, like which bodegas on Nostrand Avenue in Brooklyn are still carrying fruits and vegetables. Our focus is on stuff that’s either hyperlocal or specifically related to that work community — not just recreating stuff you could get on YouTube or Twitter. About a third of our customers are one- to five-person companies, or, like, the six-person social media team of a company based in Sweden, so I think this kind of thing can really be a lifeline.

We also created “home office kits,” where we send people their office chairs and laptop lounge tables and desks. It’s hard to sit for nine hours a day in a dining room chair, and we have these $500 Herman Miller chairs. Members pay a deposit for these, and when they go back to work, they can either return the furniture or pay to keep. Some locations are also sending out swag, like people’s exact normal office snack setup.

We’re spending a lot of time digesting and helping our customers understand what regulations are coming out to support small businesses, particularly at the state and local levels, where it gets hard to follow. We had three people working on that, and now we have seven. There’s a lot of information out there, and I think people, with everything going on, do not want to be like, “Okay, I’m going to spend two hours researching state and local policy.”

I think all of this has translated into a much lower customer churn than we were anticipating. It’s hard to call it an unqualified success, but I think we were able to do something that was somewhat meaningful. Still, we did have to lay off 20% of our staff last week, which was terrible. The executives have taken large pay cuts, and the rest of the employees have taken smaller pay cuts. It’s hard to find a silver lining, but I’m glad we’ve been able to retain all of our frontline staff — our community managers, operations associates, and hourly workers at our locations — without having to furlough them.

We’re also working on what it’s going to look like when we all go back to work. There’s going to be competing state regulations, dozens and dozens of guidelines with density and frequency and type of cleaning and contract tracing to track who is and isn’t in a workplace at a given time. There isn’t going to be some authority that figures it all out. It’s incredibly complicated, and it will be a million different shades of gray.

The construction industry

In the construction business, working from home isn’t an option for a lot of employees and subcontractors. So for Kevin O’Donnell, president of Beck Building Company, a high-end custom homebuilder in Avon, Colorado, with 55 employees (projects are mostly in the $5 million to $15 million range), the challenge is how to keep up with constantly shifting health and safety guidelines while also running through endless “what if” scenarios about when things might get shut down completely.

Photo courtesy of Beck Building’s Kevin O’Donnell

I went through the 2008 crash. You had a heads up. You saw things coming. There was an amount of time you had to make decisions and to change things and to fix cash problems. This time, we’re talking about trying to do the same preparation in a matter of hours, and things keep changing.

One of the constants has been: When do we shut down? You’re balancing the health of individuals who work for you and their financial wherewithal and well-being, and you’re balancing the needs of the community. Six weeks ago, I had no idea that this would be something that would fit into my job description. On March 25, when the governor of Colorado enacted a statewide stay-at-home policy, we thought we’d have to shut all operations, but construction has, for the most part, been allowed to continue. We had two projects that had to shut down, and because of that, we had to lay off four employees and have another seven on “light duty.” But we are okay. For now.

But how we manage a job site has had to change completely. Our focus used to be quality and efficiency. Now the focus is social distance maintenance. We’re screening everybody that comes onto the job site for symptoms and contact with coronavirus, and everyone has to wear masks.

We’re also limited to a maximum of 10 people indoors on any job site, and these are job sites that might usually have 50 people. In the construction industry, there’s a term called “critical path” when you look at your overall construction schedule. So we are focused on whether a task can be done by one person or a group of people who can stay six feet apart. This is easier when you’re working on a foundation out in the air as opposed to doing an interior remodel.

We have to do wipe-downs of doors and commonly touched surfaces three times a day. We also had to put in wash stations. In a couple of areas where we don’t have water or hot water, we ordered camping showers, which are heated by propane. It’s now mandatory for workers to wash their hands when they arrive, after bathroom use, and before and after all meals. The superintendents were really proud of getting these wash stations set up. One texted a photo to his wife, and she said, “It took a world pandemic to get construction workers to wash their hands.”

We know this pandemic has cost us time, but we can’t yet quantify how expensive it is in dollars. And like everybody else, we are trying to project how long we can survive.

The beauty industry

Blo blow-dry bar has 100 locations, all currently closed because of Covid-19. (Another 30 locations had their openings delayed.) Blo CEO Vanessa Yakobson is now focusing on helping the company’s franchisees hang on until they can open again and keeping the company firmly in its customers’ minds.

For us, it was like dominoes falling in an irregular pattern. Some markets were able to operate on reduced hours for a couple of days. Others had to close immediately. We have 100 locations, and they’re all closed now, and our franchise partners have worked with their staff to get those people unemployment. In the corporate office, we have 15 employees, and a couple have been temporarily laid off. We’ve all taken significant pay cuts, myself included. And we’ve gone to some of our marketing vendors and our corporate landlord and asked for some concessions.

Normally, we collect royalties of 6% of gross sales from our franchise partners. But we reduced that for February, and we’re not collecting any for March. We want to try to keep those funds in our franchise partners’ accounts so they can stay as healthy as possible and be ready to hit the ground running when they’re able to open our doors. And if we’re not open in April, well, if there’s no business, there’s no royalties.

We’re leaving it to our franchise partners to decide what’s appropriate in their markets, but some are doing home delivery and curbside pickup of products. It’s also up to them whether they want to opt in to some promotions we’re doing. For instance, we were working on a promotion where if you buy a gift card, the salon — when it reopens — gives a free blowout to a local health care worker. Normally, we wouldn’t double-check between when we asked our partners about it and when the email went out if they still wanted in, but this time we did. And some partners did say, “You know what? I don’t want to opt in anymore.” But the promotion went out April 2, and about 75% of our franchise partners participated in that. I think many customers really are looking for ways to support their favorite local businesses, and it’s been really well received, with customers re-posting it.

We’re now shifting our focus from “How do we deal with this immediate crisis situation?” to “How can we make optimal use of the time?” We can do business management training for our franchise partners and online product knowledge and skill training for stylists and makeup artists. There’s a lot of great work that can be done while we have this downtime.