Permanent pivots in the pandemic: COVID creates lasting change for businesses that move quickly

Brad Gillis, CEO and founder of Seattle’s Homegrown, recently launched Homegrown Goods to capitalize on the boom in online grocery shopping. (Homegrown Photo)

Lots of businesses have been hard hit by the COVID-19 economic downturn that has forced people to work from home, stop traveling and curtailed dining out. But some Pacific Northwest companies whose customers initially vanished in the blink of a gubernatorial stay-at-home order have been able to turn potentially dire situations into long-lasting opportunities.

They’ve expanded or pivoted their products and services, making permanent shifts in their business models. When the pandemic eventually recedes, these companies could find themselves with improved immunity to weather future economic turmoil.

The first step is taking stock of what’s working.

“Companies need to be honest with themselves on what is creating customer and shareholder value and doubling down on that,” said Kellan Carter, a partner at Seattle venture capital firm Ignition.

The right response will vary between software companies and those in retail or consumer sales. While a software company might want to pare down new initiatives, focusing on successful products and doing all that they can to retain employees, Carter said, a retail company may benefit from experimenting with new ventures and harnessing technology to open up revenue streams.

Here are the stories of four Northwest entrepreneurs and their pursuits of COVID silver linings:

Meeting customers ‘where they’re at’

Brad Gillis, CEO and founder of Homegrown, a restaurant and prepared meals company focused on healthy, sustainable food, was on track for continued expansion when the virus hit. He’d gone from one restaurant in Seattle’s Fremont neighborhood in 2009 to 13 restaurants in the Northwest and California, while also moving into wholesale and catering.

In the wake of the pandemic, Gillis’ workforce contracted from 380 employees to 115. Catering was hardest hit. Instead of 50-100 daily lunch box orders for corporate events, there were now two or three.

Online groceries is a competitive space, but Homegrown Goods hopes that featuring local, sustainable products will give it an edge. (Homegrown Goods website)

Gillis saw three options: fold up shop, make temporary changes to get through the crisis, or invest in permanent changes. He went with the latter. “Let’s see it as an opportunity,” Gillis said, “and maybe there’s shifting consumer behavior that we can capitalize on.”

Gillis had a solid supply chain with local food and farm producers plus a small fleet of delivery trucks no longer needed for transporting prepared meals. He decided to venture into the competitive but surging grocery delivery space, launching Homegrown Goods.

He’s competing with massive, established corporations (Uber this week upped its food delivery game with the $2.65 billion acquisition of Postmates), but he’s working his own angle.

“We’re trying to offer something slightly different than Instagram and Amazon are trying to offer, a more curated grocery,” Gillis said. “It’s products [shoppers] might have a harder time finding in the bigger grocery channels… and supports the local food system.”

Gillis shifted quickly into the space. He was already working with Airlift, a Bellevue-based company that provides “micro markets” in workspaces, and together they created the online ordering platform and the processes needed to fulfill orders. In addition to offering select goods, Gillis has greater quality control over the process since it’s his employees, not gig workers, filling and delivering orders. He knows exactly which items are in stock rather than swapping in substitutes when goods run out.

The grocery service has fewer than 200 products, but expects to offer more than 300 in next month or two with the goal of becoming a one-stop shop for groceries. Homegrown Goods currently delivers to numerous Seattle neighborhoods and a handful east of the city. The site is building repeat customers, some making multiple orders in a week.

Gillis said it’s important to recognize and respect that COVID has caused permanent shifts in our behavior.

“We need to start thinking about meeting our customers where they’re at,” he said, “and not expecting that they’ll come to you.”

New avenues for services

The travel sector has been pummeled as people worldwide have adapted to stay-home, stay healthy campaigns. Neu, a Seattle startup that connects vacation rental hosts with a crew of contract cleaners, saw its business upended as it was building momentum, participating in the recent Techstars Seattle accelerator and as a finalist for the 2018 GeekWire Elevator Pitch.

Neu CEO Kwame Boler during his GeekWire Elevator Pitch at the Space Needle in Seattle in 2018. (GeekWire Photo / Kevin Lisota)

The Neu team is trying to make the best of the COVID disruption, in part by exploring areas of the market they’d been planning to eventually grow into. That includes contacting real estate agents in need of on-demand housecleaning for home showings as well as smaller, mom-and-pop commercial office spaces to better understand their needs.

The startup, which provides cleaners with linens, toiletries and other products to streamline the rental-prep process, met specific challenges posed by COVID, hustling to secure a supply chain of products, gloves, masks and booties for cleaners that needed to comply with enhanced cleaning requirements implemented by Airbnb.

“The importance of cleaning for rentals skyrocketed,” said Chief Technology Officer Claudius Mbemba. Neu has been able to give its cleaners an edge while also reaching out to other potential customers, potentially creating a better market position in the long run.

Shifting the spotlight to work from home

For iMovR, a Bellevue-Wash.-based company that designs and sells “active workstations” including standing desks and office treadmills, sales began slowing shortly before tech giants Microsoft, Amazon and others ordered their employees to work remotely.

“We started watching our sales go down every day,” said iMovR CEO Ron Wiener, as their corporate customers stopped placing orders. Starting in late February, sales plummeted for two weeks and Wiener wondered if he’d have to shutter the 7-year-old business.

Then individual shoppers began reaching out as employees — including many in the tech sector — began realizing that cobbled together workstations at kitchen tables weren’t going to cut it over the longrun.

In the second week of March, iMovR launched its “Work@Home” collection and a YouTube ad campaign. It already had desks available that can be assembled in a few minutes, it just needed to put them in the spotlight while ramping up production at its plant in Michigan.

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“We were standing still with the perfect product for the time,” Wiener said.

Sales are now up three-fold over their normal monthly average, and the company is hiring. It’s gone from 13 employees to 20, with the expectation of growing to 43 workers by year’s end.

Wiener speculated that their big competitors, including Steelcase and Herman Miller, were not as well positioned to serve the individual, work-from-home market that needed quick turnarounds of easy-to-build desks.

And when companies increase onsite working, the iMovR is looking at adding technology that will allow for worksite contact tracing to know which employees used or were near which desks in the case that workers get sick.

“We’re a tech company at the core,” Wiener said, “and do think there is a lot that can be done here through software and the cloud and people with smart phones to help mitigate the [COVID] situation internally.”

Adapting to quickly changing education needs

While employees had to adjust to work-from-home mandates, students and teachers had their worlds turned upside down when schools suddenly closed their doors in early spring.

Bellevue’s 14-year-old DreamBox Learning was well positioned to support remote education with its adaptive math learning product for kids in kindergarten to middle school. But COVID still required a speedy re-examination of the company’s focus.

Jessie Woolley-Wilson, CEO of DreamBox Learning. (DreamBox Learning Photo)

“Our product team made some quick shifts to better meet the new needs of students and educators during this unprecedented time,” said CEO Jessie Woolley-Wilson by email.

Their changes included:

  • Pausing the development of new lessons and focusing on increased customer access, including 90-day free trials.

  • Accelerating the role out of DreamBox Predictive Insights, which predicts student performance on standardized tests that were cancelled. The tool helps teachers tailor instruction for kids.

  • Promoting its Parent Dashboard, a feature that tracks student progress and can be shared between educators and families.

  • Working with school districts navigating the reopening of schools in the fall, which will likely include blended learning that combines in-person and remote education.

DreamBox is also responding to the surge in awareness about racial injustice that was ignited by the death of George Floyd and ongoing protests. That has included an examination of the site’s avatars to make sure an inclusive range of kids are represented and that they don’t include biases.

“While equity is built into the fabric of the company, we acknowledge there is always room for improvement,” Woolley-Wilson said. “In light of recent events, we reassessed our design principles to ensure they are rooted in an ethos of diversity and respect.”

During this time of upheaval and disruption, the ed-tech company ballooned its customer base from 3 million kids up to 5 million in less than three months.

Permanent pivots in the pandemic: COVID creates lasting change for businesses that move quickly Permanent pivots in the pandemic: COVID creates lasting change for businesses that move quickly Reviewed by TechCO on 7/09/2020 Rating: 5

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