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Dear <<First Name>>,
I felt awful about having to resort to salary reductions for all employees last week at Barrel. After sustaining additional significant losses in business, we needed to make a move to extend the company's runway and give ourselves more time to ride out this crisis.
We hope the US government's CARES Act can help in a meaningful way, but we're not going to hold out hope that this bill, with its loan forgiveness program for employers that retain employees throughout the crisis (the SBA Paycheck Protection Program loan), is going to be the answer. The primary thing for us is to keep costs tight, win new business even in this challenging environment, and keep existing clients happy.
I was moved and proud of how the team responded. They've been more proactive than ever in engaging with existing clients and working quickly to sign on projects. Whatever happens in the coming weeks and months, it's worth appreciating that during this time, people worked their butts off and were really supportive of each other.
Last week's newsletter got a 45.1% open rate and the most-clicked link was my annual blog post on my personal finance stack (and the impact of the coronavirus crisis). It's been a very volatile week – on Monday the 23rd, my portfolio dipped to its lowest point, down nearly 26% since the crisis started before making a recovery by the 27th. As of the 30th, I'm down 13% from my all-time high in late February, which isn't terrible. We'll see how April goes–I have a feeling there's a lot more rockiness ahead.
Consumed
The PERFECT Home Workout by Athlean-X (YouTube video)
I've been a long-time subscriber to different Athlean-X programs. This free YouTube video has two really great workouts that can be done at home. I gave it a go in the past week and whew, I've been feeling the soreness all week. The workout hits all the major areas of the body and really overloads you, so you'll be able to see them "gains".
I've also been doing some yoga, core, and bodyweight strength work via the classes available on Peloton. We don't own a Peloton bike but their workout classes have been pretty good with varying lengths and levels. I've especially appreciated the 45-minute yoga classes after sitting on my butt for hours.
Tom Colicchio Spent 19 Years Building a Restaurant Empire. Coronavirus Gutted It in a Month. (Medium article)
"We have a policy where staff members get gift certificates to eat in any of our restaurants in exchange for offering feedback. That Sunday night, I showed up for our last service before closing, and a bartender who has been with me since the beginning — 19 years — was sitting there with his wife and his young daughter. I got choked up. I realized I couldn’t fall to pieces in front of his little girl, but it’s really emotional. Especially at Craft, we’ve all known each other for a long time. Telling your employees you’re closing is the hardest thing in the world."
Colicchio, of Top Chef fame and his various restaurants, had to lay off nearly 300 people due to the coronavirus. When Melanie came back from Taiwan back in 2006, we celebrated by dining at Craft. What a lifetime ago. Hope the best for Chef Colicchio and his group.
Corporate Socialism: The Government is Bailing Out Investors & Managers Not You by Nassim Nicholas Taleb and Mark Spitznagel (Medium article)
Taleb and Spitznagel take a critical look at how the government's bailout essentially frees corporate managers from taking responsibility when unpredictable, devastating events happen. They revisit the 2008 Great Financial Crisis to highlight how the bankers whose actions created the mess were bailed out and rewarded handsomely just a few years later.
The Generalized Bob Rubin Trade: Keep the profits, transfer losses to taxpayers. Named after Bob Rubin (former Secretary of Treasury under Clinton) who pocketed 120 million dollars from Citi but claimed uncertainty and kept past bonuses. This encourages anyone to never be insured for such eventualities since the government will pick up the tab.
Also, interesting to see that Taleb feels people are misusing the term "Black Swan" to describe the coronavirus crisis:
Furthermore, some people claim that the pandemic is a “Black Swan”, hence something unexpected so not planning for it is excusable. The book they commonly cite is The Black Swan (by one of us). Had they read that book, they would have known that such a global pandemic is explicitly presented there as a white swan: something that would eventually take place with great certainty. Such acute pandemic is unavoidable, the result of the structure of the modern world; and its economic consequences would be compounded because of the increased connectivity and overoptimization.
Created
Crisis Management: Dealing with COVID-19 as an Agency (AgencyDocs)
I wrote a blog post on how we're dealing with the impact of coronavirus at Barrel on AgencyDocs, our site where we sell templates that agencies might find useful. I went into detail about some of the tactics we've employed in cutting costs and communicating with our team. I even pasted in emails of communications we've used internally. Hoping they might be helpful to folks or at least be an idea starter.
Cheers,
Peter
P.S. You can check out my list of books read right here. My hope is to get a good mix of challenging reads with some that are entertaining, inspiring, and instructive.
If you like what you've read, please share with your friends. They can sign up for the list here. Also, I always welcome recommendations of any kind–books, podcasts, movies, etc.
About me: Peter Kang is co-founder of Barrel, a digital agency in New York City. He lives in Brooklyn with his wife, son, and dog.
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