1 00:00:11,080 --> 00:00:14,880 Speaker 1: Hello, and welcome to an episode of the Odd Lots Podcast. 2 00:00:14,920 --> 00:00:20,119 Speaker 1: I'm Joe Wisenthal and I'm Tracy Allaway. Tracy, you know 3 00:00:20,160 --> 00:00:22,799 Speaker 1: what I think would be a really hard business to 4 00:00:22,880 --> 00:00:25,919 Speaker 1: be running right now? I think you're gonna have to 5 00:00:26,000 --> 00:00:28,000 Speaker 1: narrow it down because I kind of feel like almost 6 00:00:28,080 --> 00:00:32,080 Speaker 1: every business at the moment is pretty challenging. But but 7 00:00:32,200 --> 00:00:34,760 Speaker 1: what do you have in mind? Yeah, now, that was 8 00:00:35,360 --> 00:00:38,520 Speaker 1: There are a lot of businesses are challenging, but obviously 9 00:00:39,080 --> 00:00:42,760 Speaker 1: any business that's sort of like directly in the service industry, 10 00:00:43,479 --> 00:00:48,480 Speaker 1: Restaurants things like that where people congregate together are pretty tough. 11 00:00:48,960 --> 00:00:51,800 Speaker 1: Here in New York, you see restaurants trying to make 12 00:00:51,800 --> 00:00:56,640 Speaker 1: it work with outside seating and lexi glass between the 13 00:00:56,680 --> 00:01:00,560 Speaker 1: tables and turning parking spaces and sidewalks and through places 14 00:01:00,600 --> 00:01:04,520 Speaker 1: to dine. But you can tell it's pretty tough. Yeah. Absolutely. 15 00:01:04,520 --> 00:01:07,720 Speaker 1: And you also have to contend with multiple waves of 16 00:01:07,880 --> 00:01:12,080 Speaker 1: coronavirus cases, which means that the regulations are constantly changing. 17 00:01:12,160 --> 00:01:15,240 Speaker 1: So here in Hong Kong, we had restaurants that were 18 00:01:15,280 --> 00:01:17,920 Speaker 1: open for a while in one way or another, and 19 00:01:17,959 --> 00:01:21,000 Speaker 1: then last week they decided to shut them all down. 20 00:01:21,280 --> 00:01:24,960 Speaker 1: That lasted for about a day and now they're reopened again, 21 00:01:25,080 --> 00:01:30,080 Speaker 1: but only for takeaway after six pm. So everything seems 22 00:01:30,120 --> 00:01:32,640 Speaker 1: to constantly be changing. And I imagine if you're a 23 00:01:32,680 --> 00:01:36,440 Speaker 1: restaurant owner that already has very slim profit margins, it 24 00:01:36,520 --> 00:01:40,200 Speaker 1: makes it really really difficult to plan ahead by supplies, 25 00:01:40,319 --> 00:01:44,600 Speaker 1: by food organize, you know, waiters and waitresses, schedules and 26 00:01:44,680 --> 00:01:48,320 Speaker 1: things like that. Right, it seems brutal. There were multiple 27 00:01:48,360 --> 00:01:50,760 Speaker 1: There have been multiple instances in the US, of course, 28 00:01:50,840 --> 00:01:53,960 Speaker 1: of lockdowns and then the lockdowns lifted, and then the 29 00:01:54,040 --> 00:01:58,720 Speaker 1: lockdowns re imposed or some partial change or some arbitrary change. 30 00:01:58,800 --> 00:02:00,480 Speaker 1: I think it was like a New York like Almo 31 00:02:00,560 --> 00:02:03,000 Speaker 1: said something like, sort of drinks, but you have to 32 00:02:03,000 --> 00:02:07,120 Speaker 1: have food, but chicken wings don't count. Easy, Like it's 33 00:02:07,120 --> 00:02:09,760 Speaker 1: just like the thought of like having a business and 34 00:02:09,840 --> 00:02:14,200 Speaker 1: trying to navigate this right now, it just excruciating. Yeah, 35 00:02:14,240 --> 00:02:17,480 Speaker 1: although you have seen some restaurants become really creative with 36 00:02:17,520 --> 00:02:19,520 Speaker 1: those requirements. So I think I saw a few in 37 00:02:19,560 --> 00:02:23,239 Speaker 1: New York that we're serving like one chicken wing, two 38 00:02:23,440 --> 00:02:26,840 Speaker 1: fries to accompany drinks and things like that. That happened 39 00:02:26,840 --> 00:02:30,359 Speaker 1: in Hong Kong as well. So yeah, interesting times if 40 00:02:30,400 --> 00:02:34,079 Speaker 1: you're in the hospitality business. Now, you would be even 41 00:02:34,240 --> 00:02:40,000 Speaker 1: harder than just running a restaurant. Go on, running a 42 00:02:40,120 --> 00:02:44,200 Speaker 1: restaurant that was also an arcade and was also a 43 00:02:44,280 --> 00:02:47,880 Speaker 1: bowling right, because there's you can't get. Part of the 44 00:02:47,880 --> 00:02:50,760 Speaker 1: business involved a bunch of people touching stuff and that's 45 00:02:50,800 --> 00:02:54,800 Speaker 1: not obvious. Yeah, and sharing shoes, right? How are you 46 00:02:54,840 --> 00:02:58,320 Speaker 1: just InSAR shoes? Right? So many questions. Well, the good 47 00:02:58,360 --> 00:03:01,840 Speaker 1: news is today we have a guest who can speak 48 00:03:01,919 --> 00:03:05,679 Speaker 1: exactly that, because, among other things, he has co founded 49 00:03:05,720 --> 00:03:09,320 Speaker 1: a bowling alley arcade bar and I love it. I 50 00:03:09,400 --> 00:03:12,400 Speaker 1: have so many questions about the bowling alley business model, 51 00:03:12,560 --> 00:03:16,840 Speaker 1: just before or even before, I should say, the coronavirus hit. 52 00:03:17,280 --> 00:03:20,000 Speaker 1: So I'm looking forward to this one. Wait, can I 53 00:03:20,040 --> 00:03:22,200 Speaker 1: just say one more thing crazy before we bring our 54 00:03:22,240 --> 00:03:24,640 Speaker 1: guest in? Go on, go on? Do you know that 55 00:03:24,639 --> 00:03:28,960 Speaker 1: I once bowlded to sixty three age strikes? That's a fact, 56 00:03:29,600 --> 00:03:32,440 Speaker 1: picks or it didn't happen. That's what I say. It 57 00:03:32,520 --> 00:03:34,560 Speaker 1: was in a high school. Otherwise I would have had 58 00:03:34,639 --> 00:03:40,520 Speaker 1: you know anyway story trust me, alright, no more introduction. 59 00:03:40,760 --> 00:03:42,880 Speaker 1: So today I'm very excited about Guess, someone who we 60 00:03:42,920 --> 00:03:45,160 Speaker 1: should have had on a long time ago long even 61 00:03:45,240 --> 00:03:49,000 Speaker 1: before coronavirus finally get him on. He's ad A mosamek 62 00:03:49,240 --> 00:03:52,520 Speaker 1: So as mentioned, he's the co founder of Decades, which 63 00:03:52,560 --> 00:03:57,480 Speaker 1: is a bowling alley, arcade, bar, and restaurant in Lancaster, Pennsylvania. 64 00:03:57,920 --> 00:04:02,120 Speaker 1: And he's an economist. He's the chief economist at up work, 65 00:04:02,160 --> 00:04:06,040 Speaker 1: which is an online freelancing platform. So kind of the 66 00:04:06,160 --> 00:04:09,640 Speaker 1: perfect guest to talk about the macro of what he's 67 00:04:09,640 --> 00:04:11,840 Speaker 1: seeing in the economy, but also in the micro of 68 00:04:11,880 --> 00:04:14,880 Speaker 1: how do you actually run or try to run a 69 00:04:14,880 --> 00:04:20,080 Speaker 1: business in the extraordinary times. Adamosa, thank you for joining us, 70 00:04:21,160 --> 00:04:23,159 Speaker 1: Thanks for having me, guys. I guess you don't have 71 00:04:23,200 --> 00:04:25,120 Speaker 1: to worry about disinfecting the shoes right now, because I 72 00:04:25,200 --> 00:04:29,120 Speaker 1: assume no one's bowling. People are bowling. They are bowling. 73 00:04:29,520 --> 00:04:33,360 Speaker 1: They are bowling. There socially distanced bowling. What's that look? 74 00:04:34,320 --> 00:04:38,480 Speaker 1: So we have six lanes at Decades, and this means 75 00:04:38,600 --> 00:04:42,359 Speaker 1: that you can bowl on every other lane and we 76 00:04:42,440 --> 00:04:46,200 Speaker 1: always have a fairly small maximum group size anyway, so 77 00:04:46,640 --> 00:04:49,880 Speaker 1: that's not really a constraint. Do you disinfect the bowling 78 00:04:49,920 --> 00:04:54,479 Speaker 1: balls or what happens? Are people like spring antibacterial spray 79 00:04:54,560 --> 00:04:57,400 Speaker 1: into the holes every time they come out. Yeah, we 80 00:04:57,520 --> 00:05:01,520 Speaker 1: have disinfectant. We always disinfect the shoes. You know. One 81 00:05:01,560 --> 00:05:05,760 Speaker 1: of the things that um, it might surprise people about 82 00:05:05,760 --> 00:05:08,279 Speaker 1: how we're a little bit advantage coming into this is 83 00:05:08,400 --> 00:05:11,760 Speaker 1: that disinfecting was like a big part of what we 84 00:05:11,800 --> 00:05:17,280 Speaker 1: did before the pandemic. So we've always disinfected our shoes 85 00:05:17,480 --> 00:05:22,919 Speaker 1: after every single use, and we've always actually had throughout 86 00:05:22,920 --> 00:05:26,640 Speaker 1: the business. We have you know, stations of hand sanitizers. 87 00:05:26,680 --> 00:05:28,800 Speaker 1: They've always been there. We've got I don't know, like 88 00:05:28,920 --> 00:05:32,440 Speaker 1: five of them from the arcade. So like we're a 89 00:05:32,440 --> 00:05:36,320 Speaker 1: pretty clean place. If you're just picturing like a regular 90 00:05:36,360 --> 00:05:39,760 Speaker 1: bowling alley arcade, that's that's not a good image in 91 00:05:39,760 --> 00:05:42,480 Speaker 1: your mind to hold about decades. Is like we're fairly 92 00:05:42,560 --> 00:05:46,320 Speaker 1: upscale place. It's a kind of place where you'd be 93 00:05:46,360 --> 00:05:51,719 Speaker 1: comfortable getting a cocktail, and we've got chandeliers hanging, we've 94 00:05:51,720 --> 00:05:54,800 Speaker 1: got nice leather couches. It's like a nice it's a 95 00:05:54,880 --> 00:05:59,280 Speaker 1: nice place. You're totally comfortable buying a good cocktail there. So, 96 00:05:59,480 --> 00:06:02,000 Speaker 1: like we are hard to keep it clean and make 97 00:06:02,040 --> 00:06:05,679 Speaker 1: it feel clean. We always have, So disinfecting has always 98 00:06:05,760 --> 00:06:07,520 Speaker 1: been part of what we do. The only thing sort 99 00:06:07,560 --> 00:06:10,280 Speaker 1: of extra we do is we've sort of now we 100 00:06:10,360 --> 00:06:13,560 Speaker 1: disinfect the arcade games, you know, all day long, and 101 00:06:13,600 --> 00:06:17,680 Speaker 1: we disinfect the bowling balls all day long. So talk 102 00:06:17,720 --> 00:06:20,159 Speaker 1: to us a little bit about like, okay, what is 103 00:06:20,440 --> 00:06:24,239 Speaker 1: business like pre crisis, like a company of business like yours, 104 00:06:24,240 --> 00:06:27,600 Speaker 1: bowling arcade drinks. What is the sort of business model 105 00:06:27,960 --> 00:06:31,479 Speaker 1: look like in normal times in terms of where you 106 00:06:31,560 --> 00:06:34,279 Speaker 1: make money, where the profit opportunities are. I assume some 107 00:06:34,400 --> 00:06:37,400 Speaker 1: aspects are more lost leatery than others. Like what is 108 00:06:37,480 --> 00:06:41,799 Speaker 1: just normal day to day the business of running decades? Sure, 109 00:06:42,000 --> 00:06:48,120 Speaker 1: so it's really um for businesses that overlap. That's the restaurant, 110 00:06:48,160 --> 00:06:51,400 Speaker 1: the bar, the arcade, in the bowling alley. There's a 111 00:06:51,400 --> 00:06:54,280 Speaker 1: lot of fixed costs operating all of them. So there's 112 00:06:54,320 --> 00:06:57,839 Speaker 1: not really a profit margin overall area, but you do 113 00:06:57,920 --> 00:07:00,760 Speaker 1: get sort of an operating margin and do you know, 114 00:07:01,520 --> 00:07:05,080 Speaker 1: basically make money on all areas of the business. Um, 115 00:07:05,120 --> 00:07:08,520 Speaker 1: they're just different different kinds of operating structures. So like 116 00:07:08,560 --> 00:07:11,800 Speaker 1: in the restaurant, it's a high cost of good sold business. 117 00:07:11,840 --> 00:07:13,840 Speaker 1: That means like there's a lot of materials that go 118 00:07:14,000 --> 00:07:17,800 Speaker 1: into each dollar that you sell, but the upfront costs 119 00:07:17,960 --> 00:07:22,560 Speaker 1: or smaller share in that Bowling is like a massively 120 00:07:22,640 --> 00:07:26,360 Speaker 1: fixed cost business. So like you know, some of the 121 00:07:26,400 --> 00:07:29,080 Speaker 1: cost of bowling is a fixed cost, which was putting 122 00:07:29,120 --> 00:07:32,680 Speaker 1: in the lanes. So on the marginal dollar bowl and 123 00:07:32,760 --> 00:07:36,120 Speaker 1: you have really high margins um and the same thing 124 00:07:36,200 --> 00:07:37,920 Speaker 1: is true of arcade. You know, you have the big 125 00:07:37,960 --> 00:07:40,640 Speaker 1: cost of the machines, you have the cost of tokens, 126 00:07:41,080 --> 00:07:44,640 Speaker 1: you have maintenance of repair costs, but those are relatively minor. 127 00:07:45,600 --> 00:07:49,480 Speaker 1: The arcade is that high margin business too. And the 128 00:07:49,520 --> 00:07:52,320 Speaker 1: good news about high margin businesses is you can afford 129 00:07:52,320 --> 00:07:54,720 Speaker 1: to do all sorts of like discounts on them to 130 00:07:54,800 --> 00:07:57,800 Speaker 1: make them into laws leaders. If you have nights of 131 00:07:57,800 --> 00:08:00,720 Speaker 1: the week where you want to you know, if you 132 00:08:00,760 --> 00:08:02,880 Speaker 1: have like a lower capacity night of the week, you 133 00:08:02,880 --> 00:08:06,119 Speaker 1: can do something like everybody who comes in automatically gets 134 00:08:06,120 --> 00:08:09,360 Speaker 1: two dollars free tokens. When in the food business and 135 00:08:09,360 --> 00:08:11,720 Speaker 1: the restaurant business, if you want to offer discounts, it's 136 00:08:11,760 --> 00:08:15,120 Speaker 1: really easy to get into, you know, actually losing money 137 00:08:15,120 --> 00:08:17,640 Speaker 1: on a loss leader. But with bowling in arcade, it's 138 00:08:17,640 --> 00:08:20,920 Speaker 1: all opportunity costs. There's you know, it's really hard to 139 00:08:20,960 --> 00:08:24,000 Speaker 1: lose a dollar when someone bowls it costs you like, 140 00:08:24,800 --> 00:08:27,200 Speaker 1: almost nothing to let them bowl at the same thing 141 00:08:27,280 --> 00:08:31,520 Speaker 1: for the arcades. This is something I always wondered, given 142 00:08:31,560 --> 00:08:35,640 Speaker 1: that there are so many different businesses involved in something 143 00:08:35,679 --> 00:08:39,160 Speaker 1: like a bowling alley that also serves food and drinks 144 00:08:39,320 --> 00:08:43,000 Speaker 1: and has video games as well. But what's the best 145 00:08:43,080 --> 00:08:46,640 Speaker 1: deal for a customer. Would it be just going there 146 00:08:46,800 --> 00:08:49,640 Speaker 1: to bowl and not buying food or drink, or would 147 00:08:49,640 --> 00:08:51,800 Speaker 1: it be going there or to buy food or drink 148 00:08:51,840 --> 00:08:54,959 Speaker 1: because the cost of food and drink is subsidized by 149 00:08:54,960 --> 00:08:58,680 Speaker 1: the bowling alley, or I know it changes all the time, 150 00:08:58,720 --> 00:09:01,000 Speaker 1: but I'm just curious whether there's there's one thing that 151 00:09:01,080 --> 00:09:05,320 Speaker 1: kind of stands out to you. So it's definitely you know, 152 00:09:05,360 --> 00:09:08,160 Speaker 1: you can find specials throughout the week. If you want 153 00:09:08,160 --> 00:09:11,560 Speaker 1: a bowl, it's cheaper to bowl on like the night 154 00:09:11,559 --> 00:09:13,400 Speaker 1: of the week when we're doing a special or in 155 00:09:13,520 --> 00:09:16,560 Speaker 1: Arcadian what we're doing special. So in that sense, you know, 156 00:09:16,640 --> 00:09:20,120 Speaker 1: if you're talking cost minimization, you know, coming outside of 157 00:09:20,160 --> 00:09:21,920 Speaker 1: peak hours is going to be the best way to 158 00:09:21,960 --> 00:09:25,280 Speaker 1: do it. It can be pretty busy on the weekend, 159 00:09:25,360 --> 00:09:26,960 Speaker 1: so if you want to make sure you can play 160 00:09:27,040 --> 00:09:29,720 Speaker 1: your games, and you know, like Saturday night, you know 161 00:09:29,760 --> 00:09:31,439 Speaker 1: you have to get there kind of early to get 162 00:09:31,440 --> 00:09:34,000 Speaker 1: signed up to bowl because it gets pretty busy because 163 00:09:34,000 --> 00:09:36,319 Speaker 1: we really have six things. So from a cost minimization 164 00:09:36,400 --> 00:09:40,079 Speaker 1: perspective and a queuing perspective, the slower days of the 165 00:09:40,120 --> 00:09:42,600 Speaker 1: week you're better odds. But you know, to put on 166 00:09:42,640 --> 00:09:45,839 Speaker 1: my economist hat, the real value is not determined by 167 00:09:45,840 --> 00:09:49,000 Speaker 1: the costs the inputs to you. The value is how 168 00:09:49,040 --> 00:09:52,280 Speaker 1: much you get out of it. So in my mind, um, 169 00:09:52,320 --> 00:09:54,839 Speaker 1: you know, the whole sort of experience, it's a it's 170 00:09:54,840 --> 00:10:00,000 Speaker 1: a great, full, complete evening. So I like the total package. 171 00:10:00,080 --> 00:10:02,439 Speaker 1: You come in, eat, you play games, you bowl, it's 172 00:10:02,440 --> 00:10:04,160 Speaker 1: an entire evening. There's a lot of stuff you can 173 00:10:04,160 --> 00:10:06,960 Speaker 1: do with your friends. So it's sort of irrelevant to 174 00:10:06,960 --> 00:10:09,560 Speaker 1: the consumer. What the what the relative costs are, right, 175 00:10:09,600 --> 00:10:12,280 Speaker 1: you're looking at what's your consumers are plus from. And 176 00:10:12,559 --> 00:10:16,520 Speaker 1: it's true you can save money by bawling on a 177 00:10:16,520 --> 00:10:19,800 Speaker 1: Tuesday night, for example, but you know your friends might 178 00:10:19,880 --> 00:10:21,440 Speaker 1: not be able to go out on a Tuesday night. 179 00:10:21,520 --> 00:10:25,120 Speaker 1: There's a reason we don't sort of gather at specific times. Right. 180 00:10:26,480 --> 00:10:30,160 Speaker 1: You mentioned the ability to give out a token, maybe 181 00:10:30,160 --> 00:10:32,160 Speaker 1: two dollars worth of tokens if you want to come 182 00:10:32,160 --> 00:10:35,640 Speaker 1: in on a night that's typically less busy, perhaps turning 183 00:10:35,679 --> 00:10:38,280 Speaker 1: the arcade into something of a loss leader to drive 184 00:10:38,360 --> 00:10:43,359 Speaker 1: food sales. But I'm curious about the token aspect, specifically 185 00:10:43,400 --> 00:10:46,880 Speaker 1: in part because there is this nationwide point shortage. So 186 00:10:47,240 --> 00:10:48,800 Speaker 1: does that mean you guys just don't have to worry 187 00:10:48,800 --> 00:10:50,880 Speaker 1: about the coin shortage right now? You have plenty of token. 188 00:10:51,760 --> 00:10:53,480 Speaker 1: That's right. We don't have to worry about the coin 189 00:10:53,520 --> 00:10:57,920 Speaker 1: shortage right now. But that's because of lessons learned about 190 00:10:58,160 --> 00:11:01,920 Speaker 1: coin shortages. And we we get our own coins minted. 191 00:11:02,200 --> 00:11:04,560 Speaker 1: They say decades on them. They have a nice little 192 00:11:05,480 --> 00:11:08,400 Speaker 1: picture on them of our logo. Did you design the coin? 193 00:11:09,120 --> 00:11:12,600 Speaker 1: My partner Jonathan did. He's one of my partners is 194 00:11:12,640 --> 00:11:15,920 Speaker 1: that he's an artist and designer and marketing guy, and 195 00:11:15,960 --> 00:11:18,960 Speaker 1: he designed the coin. It looks great. We did have 196 00:11:19,000 --> 00:11:22,360 Speaker 1: a coin shortage early on, so we ordered um what 197 00:11:22,440 --> 00:11:26,960 Speaker 1: we thought. You know, speaking with the token, people are 198 00:11:27,040 --> 00:11:30,080 Speaker 1: used to dealing with arcades, and you know we have 199 00:11:30,200 --> 00:11:33,920 Speaker 1: also are the person we buy our arcade games from 200 00:11:34,000 --> 00:11:36,199 Speaker 1: who has a lot of arcade experience, and we talked 201 00:11:36,200 --> 00:11:37,800 Speaker 1: to both of them. We got an idea, this is 202 00:11:37,800 --> 00:11:40,439 Speaker 1: how many coins you should have for an arcade of 203 00:11:40,520 --> 00:11:45,760 Speaker 1: your size. But demand was so strong at first, the 204 00:11:45,840 --> 00:11:49,000 Speaker 1: velocity of spending, we couldn't keep up with it. We 205 00:11:49,040 --> 00:11:52,360 Speaker 1: didn't have nearly enough tokens, and it took us actually 206 00:11:52,679 --> 00:11:55,120 Speaker 1: like months to get caught up to the amount of 207 00:11:55,160 --> 00:11:57,960 Speaker 1: tokens that we should have because it takes a lit 208 00:11:57,960 --> 00:12:00,520 Speaker 1: while to mint them. There's a backlog, and also you're 209 00:12:00,559 --> 00:12:02,760 Speaker 1: sort of in denial about how much you need to 210 00:12:02,800 --> 00:12:05,920 Speaker 1: spend on tokens because you think about it is like, well, 211 00:12:05,920 --> 00:12:08,160 Speaker 1: we're gonna spend this little bit upfront and that will 212 00:12:08,200 --> 00:12:11,520 Speaker 1: be it for tokens. But people walk away with tokens 213 00:12:11,520 --> 00:12:13,920 Speaker 1: fine because they you know, you think they're gonna bring 214 00:12:13,960 --> 00:12:16,600 Speaker 1: them back eventually. And even if they don't, it costs 215 00:12:16,640 --> 00:12:18,680 Speaker 1: less than a token to less than a quarter to 216 00:12:18,720 --> 00:12:22,079 Speaker 1: make a token. So like someone buys a hundred dollars 217 00:12:22,080 --> 00:12:23,960 Speaker 1: worth the tokens and throws them in the trash, we 218 00:12:24,040 --> 00:12:26,440 Speaker 1: make money on that. We don't make as money as 219 00:12:26,480 --> 00:12:28,320 Speaker 1: if they gave them back to us, but we still 220 00:12:28,320 --> 00:12:31,160 Speaker 1: make money. Right. But when we first opened up, we 221 00:12:31,240 --> 00:12:35,559 Speaker 1: had just this massive coin shortage, and what it required 222 00:12:35,720 --> 00:12:39,800 Speaker 1: was constant, constant emptying of the arcade games. If you 223 00:12:39,880 --> 00:12:43,320 Speaker 1: have your token levels set correctly. You shouldn't have to 224 00:12:43,400 --> 00:12:47,280 Speaker 1: unbr your your games throughout the night. It maybe once, 225 00:12:47,760 --> 00:12:49,760 Speaker 1: you know, or twice on like a Saturday, if you're 226 00:12:49,800 --> 00:12:52,800 Speaker 1: really busy. But they're big, you know, they have big 227 00:12:52,840 --> 00:12:55,560 Speaker 1: containers on them. They're meant to be filled up with 228 00:12:55,600 --> 00:12:58,840 Speaker 1: the day's worth usage. You shouldn't have to empty them. Um. 229 00:12:58,840 --> 00:13:03,160 Speaker 1: But we opened keep the supply of coins moving, we 230 00:13:03,200 --> 00:13:07,400 Speaker 1: had to be constantly emptying. And this was actually I was. 231 00:13:07,480 --> 00:13:09,640 Speaker 1: I was doing this a lot, even I don't actually 232 00:13:09,640 --> 00:13:11,720 Speaker 1: work there. I'm, you know, a partner, but I don't 233 00:13:11,760 --> 00:13:14,520 Speaker 1: like take salary. I don't have a job there, um, 234 00:13:14,559 --> 00:13:18,920 Speaker 1: but I was for our first like opening week and weekends. 235 00:13:18,960 --> 00:13:21,680 Speaker 1: I was there and like our busiest times, wearing the 236 00:13:21,760 --> 00:13:25,600 Speaker 1: decade shirt, looking like a staff member, going around emptying 237 00:13:25,640 --> 00:13:28,560 Speaker 1: the ski ball machines, the hoops machines, and just emptying 238 00:13:28,600 --> 00:13:32,000 Speaker 1: the tokens and keeping them moving basically all night long. 239 00:13:32,320 --> 00:13:35,719 Speaker 1: So that that's the cost of a coin shortage, as 240 00:13:35,720 --> 00:13:39,240 Speaker 1: you have to you have to interject yourself into the 241 00:13:39,240 --> 00:13:56,880 Speaker 1: the arcade economy and keep them moving. Okay, so we've 242 00:13:56,880 --> 00:13:59,560 Speaker 1: talked a little bit about what the business looks like 243 00:13:59,600 --> 00:14:03,360 Speaker 1: in normal times UH and tokens specifically, can you walk 244 00:14:03,440 --> 00:14:05,520 Speaker 1: us through what sort of impact you've seen from the 245 00:14:05,520 --> 00:14:09,160 Speaker 1: coronavirus crisis and also the changes that you've made to 246 00:14:09,240 --> 00:14:14,679 Speaker 1: the business to adapt to the new normal. Sure, so 247 00:14:14,800 --> 00:14:20,680 Speaker 1: the coronavirus we um we shut down maybe like a 248 00:14:20,760 --> 00:14:24,000 Speaker 1: day or two before the state ordered us to. We 249 00:14:24,160 --> 00:14:27,320 Speaker 1: just decided it was This is a really tough challenge 250 00:14:27,360 --> 00:14:29,760 Speaker 1: because you want to be a responsible member of your 251 00:14:29,760 --> 00:14:34,160 Speaker 1: community when you see this risk. But there's sort of 252 00:14:34,200 --> 00:14:38,800 Speaker 1: like a prisoner's dilemma type problem here where if all 253 00:14:38,920 --> 00:14:42,640 Speaker 1: the well behaved restaurants closed down before, like you know, 254 00:14:42,720 --> 00:14:44,920 Speaker 1: this is an early early days of the pandemic, like 255 00:14:44,960 --> 00:14:48,000 Speaker 1: the beginning of March, the problem we're dealing with. You know, 256 00:14:48,040 --> 00:14:51,480 Speaker 1: if you if half the restaurants closed down but people 257 00:14:51,520 --> 00:14:54,280 Speaker 1: don't really change their behavior that much, are you gonna 258 00:14:54,360 --> 00:14:56,640 Speaker 1: end up with is the rest of the restaurants are 259 00:14:56,680 --> 00:15:00,440 Speaker 1: just double crowding. And so this is why you really 260 00:15:00,480 --> 00:15:03,480 Speaker 1: really need like the government to step in. And you 261 00:15:03,520 --> 00:15:08,120 Speaker 1: can't just rely on businesses to do the the shutdowns themselves, 262 00:15:08,200 --> 00:15:12,560 Speaker 1: because you know, if there's like one jerk bar in 263 00:15:12,680 --> 00:15:16,440 Speaker 1: town that is never going to close unless you make 264 00:15:16,480 --> 00:15:19,800 Speaker 1: them in that place, every all the all the people 265 00:15:19,840 --> 00:15:22,120 Speaker 1: who don't care about safety are just gonna pile into 266 00:15:22,160 --> 00:15:24,600 Speaker 1: that place and it's just gonna be way worse off 267 00:15:24,640 --> 00:15:28,560 Speaker 1: than if everything sort of stayed open. So that's the 268 00:15:28,600 --> 00:15:30,720 Speaker 1: sort of tension you face, like do we shut down 269 00:15:30,760 --> 00:15:32,920 Speaker 1: and just like let the bars who are not safe 270 00:15:32,960 --> 00:15:35,680 Speaker 1: like absorbable all the customers, or do you wait? And 271 00:15:35,760 --> 00:15:39,560 Speaker 1: so we waited until things were getting getting worse and 272 00:15:39,600 --> 00:15:41,520 Speaker 1: the and the virus count growing up. We thought, Okay, 273 00:15:41,600 --> 00:15:45,040 Speaker 1: other people are starting to shut down. Um, it's it's 274 00:15:45,080 --> 00:15:47,440 Speaker 1: time to do that. So we shut down and then 275 00:15:47,480 --> 00:15:50,800 Speaker 1: a few days later the state shut everyone down. Obviously, 276 00:15:50,840 --> 00:15:53,680 Speaker 1: from then it was like nothing happened for a while. 277 00:15:54,240 --> 00:15:59,120 Speaker 1: So we were closed for for March, and then in 278 00:16:00,000 --> 00:16:05,560 Speaker 1: think April or May, we started opening takeout. Um because 279 00:16:05,560 --> 00:16:08,440 Speaker 1: at first, you know, everyone you didn't know how safe 280 00:16:08,440 --> 00:16:11,720 Speaker 1: anything was. You know, some places started doing takeout right away, 281 00:16:11,720 --> 00:16:15,360 Speaker 1: but we weren't entirely sure, you know, is take out safe. 282 00:16:15,800 --> 00:16:18,680 Speaker 1: And once it it sort of became clear that it was, 283 00:16:19,240 --> 00:16:22,840 Speaker 1: that's when we started offering takeout, and so that helped 284 00:16:22,880 --> 00:16:25,600 Speaker 1: a little bit. And this was close to the time 285 00:16:25,640 --> 00:16:28,440 Speaker 1: where we got our our p P p loan as well, 286 00:16:29,400 --> 00:16:32,960 Speaker 1: So start with takeout that opens up a little bit. 287 00:16:33,040 --> 00:16:36,480 Speaker 1: And then so that was May, and then June we 288 00:16:36,480 --> 00:16:38,880 Speaker 1: were able to open up our front yard, which was 289 00:16:38,920 --> 00:16:41,400 Speaker 1: something we actually just put into place, So that's one 290 00:16:41,440 --> 00:16:44,520 Speaker 1: of the Those are both adaptations. But prior we we 291 00:16:44,560 --> 00:16:46,120 Speaker 1: did a little bit of takeout, but it was like 292 00:16:46,200 --> 00:16:49,400 Speaker 1: not not really a part of our business. Is that 293 00:16:49,520 --> 00:16:51,800 Speaker 1: something we really advertise that much or focused on. So 294 00:16:51,840 --> 00:16:54,600 Speaker 1: switching to more takeout focus, changing the menu to be 295 00:16:54,600 --> 00:16:57,920 Speaker 1: better adapted to take out, and then turning our front 296 00:16:57,960 --> 00:17:01,360 Speaker 1: lawn which had previously just been a low into outdoor 297 00:17:01,400 --> 00:17:06,160 Speaker 1: seating area. And I have I have like very sort 298 00:17:06,200 --> 00:17:09,840 Speaker 1: of quick specific questions. But the first one is do 299 00:17:09,880 --> 00:17:13,840 Speaker 1: you mention that you closed decades prior to the record 300 00:17:14,160 --> 00:17:17,359 Speaker 1: the state shutting it down? In those days before you 301 00:17:17,400 --> 00:17:21,359 Speaker 1: close down, how fast was were you already seeing a 302 00:17:21,359 --> 00:17:24,919 Speaker 1: business drop off? Impuretory starts is pretty clear in this 303 00:17:25,560 --> 00:17:28,600 Speaker 1: and we could see this from like day one, which 304 00:17:28,640 --> 00:17:32,280 Speaker 1: was the demand fell off before the shutdowns happened. So 305 00:17:32,400 --> 00:17:38,000 Speaker 1: I think like the weekend before the shutdown we were down, 306 00:17:38,080 --> 00:17:41,240 Speaker 1: like I believe it was or something like that, So 307 00:17:41,480 --> 00:17:43,480 Speaker 1: it was it was a big drop off and the 308 00:17:43,560 --> 00:17:48,040 Speaker 1: drop off definitely preceded any sort of government action. And 309 00:17:48,160 --> 00:17:50,639 Speaker 1: then early on when you were trying to when you 310 00:17:50,720 --> 00:17:54,840 Speaker 1: started first doing the takeout business or like the first 311 00:17:55,280 --> 00:17:58,639 Speaker 1: sort of okay, let's start getting some revenue again, but 312 00:17:58,800 --> 00:18:01,760 Speaker 1: try to do it safely. What were like the impediments. 313 00:18:01,760 --> 00:18:04,480 Speaker 1: How anxious were you about having people go back into 314 00:18:04,600 --> 00:18:08,399 Speaker 1: a commercial kitchen. What were the difficulties in terms of 315 00:18:08,520 --> 00:18:13,359 Speaker 1: acquiring uh PPE protective equipment and so forth, so that 316 00:18:13,440 --> 00:18:16,920 Speaker 1: you could sort of start rebuilding the operation a little 317 00:18:16,920 --> 00:18:20,480 Speaker 1: bit in a safe way of I mean that that 318 00:18:20,560 --> 00:18:23,120 Speaker 1: was sort of one of the considerations was just how 319 00:18:23,200 --> 00:18:25,520 Speaker 1: to safe? Does everyone feel? You know, we're going to 320 00:18:25,640 --> 00:18:31,240 Speaker 1: need the managing partners, so two of my partner's work decades, 321 00:18:31,400 --> 00:18:34,800 Speaker 1: full time is their job, and you between them and 322 00:18:34,800 --> 00:18:37,840 Speaker 1: the other managers UM and the and the and the 323 00:18:37,920 --> 00:18:39,879 Speaker 1: essential staff, it was like we sort of had to 324 00:18:40,000 --> 00:18:42,360 Speaker 1: wait to feel to everyone was kind of feeling kind 325 00:18:42,400 --> 00:18:45,359 Speaker 1: of safe, and they were feeling safe about it, and 326 00:18:45,400 --> 00:18:47,920 Speaker 1: the public was feeling safe about it. And it took 327 00:18:47,960 --> 00:18:50,800 Speaker 1: some time, but you know, more stories came out that 328 00:18:50,840 --> 00:18:53,120 Speaker 1: you know, when you can't really spread this thing by 329 00:18:53,440 --> 00:18:57,679 Speaker 1: touching surfaces. That was that was a big help in 330 00:18:57,800 --> 00:19:00,879 Speaker 1: terms of making everyone feel comfortable. So it did take 331 00:19:00,920 --> 00:19:03,480 Speaker 1: a little time. It wasn't any sort of like you know, 332 00:19:03,520 --> 00:19:05,560 Speaker 1: it wasn't like a daily vote or anything like that. 333 00:19:05,600 --> 00:19:08,360 Speaker 1: It was just sort of being communication with each other 334 00:19:08,400 --> 00:19:10,280 Speaker 1: and seeing when everyone kind of felt safe and when 335 00:19:10,320 --> 00:19:14,639 Speaker 1: it seemed like it seemed like customers were feeling safe 336 00:19:14,680 --> 00:19:20,080 Speaker 1: to UM. So with PPE UM actually my my in laws. 337 00:19:20,400 --> 00:19:24,720 Speaker 1: They have a shoe factory in Pennsylvania and they switched 338 00:19:24,800 --> 00:19:30,840 Speaker 1: to making masks, so we were able to get masks 339 00:19:30,880 --> 00:19:34,199 Speaker 1: pretty easy pretty early. There was it was cloth masks, 340 00:19:34,240 --> 00:19:36,400 Speaker 1: but we were able to get them directly from them, 341 00:19:36,640 --> 00:19:40,359 Speaker 1: so we had we had that covered. What was it 342 00:19:40,440 --> 00:19:44,919 Speaker 1: like applying for UM a P P P loan? So 343 00:19:44,960 --> 00:19:47,960 Speaker 1: we applied for the P P P loan pretty early, 344 00:19:48,760 --> 00:19:51,480 Speaker 1: and we have a really great relationship with the local bank. 345 00:19:51,960 --> 00:19:55,760 Speaker 1: It was actually a bank that the Trump administration praised 346 00:19:55,800 --> 00:19:58,720 Speaker 1: for how well they were doing, Worstown Bank, So it's 347 00:19:58,760 --> 00:20:02,960 Speaker 1: like a regional Northeastern bank and UM we have a 348 00:20:02,960 --> 00:20:05,679 Speaker 1: great relationship with them, and so we were able to 349 00:20:05,720 --> 00:20:10,520 Speaker 1: get approved pretty quickly. But they had told us from 350 00:20:10,520 --> 00:20:15,120 Speaker 1: the start that we could delay closing the loan, so Basically, 351 00:20:15,160 --> 00:20:20,280 Speaker 1: you apply, you get approved, and then there's like paperwork, 352 00:20:20,400 --> 00:20:22,080 Speaker 1: and then you close the loan. And when you close 353 00:20:22,160 --> 00:20:25,040 Speaker 1: the loan, that's when you get the money. And because 354 00:20:25,080 --> 00:20:27,359 Speaker 1: of the nature of p p P, you actually it 355 00:20:27,440 --> 00:20:31,800 Speaker 1: creates this paradox where like it's underfunded, but as soon 356 00:20:31,840 --> 00:20:35,679 Speaker 1: as you get it, your forgiveness period starts. So you 357 00:20:35,720 --> 00:20:38,480 Speaker 1: want to get it approved as fast as possible, but 358 00:20:38,520 --> 00:20:41,040 Speaker 1: then you want to get the money as late as possible. 359 00:20:41,560 --> 00:20:44,760 Speaker 1: So we were you know, this is in early April 360 00:20:44,880 --> 00:20:47,560 Speaker 1: when p PP you could start applying, and we were 361 00:20:47,600 --> 00:20:51,080 Speaker 1: like not open at all for anything in early April, 362 00:20:51,160 --> 00:20:54,280 Speaker 1: so the forgiveness period to start for us would have 363 00:20:54,280 --> 00:20:57,080 Speaker 1: been pointless because we're not going to bring our staff 364 00:20:57,119 --> 00:20:59,800 Speaker 1: back and just have them sit on their hands. I 365 00:20:59,800 --> 00:21:02,560 Speaker 1: mean if we we would if we had to, because 366 00:21:02,640 --> 00:21:05,879 Speaker 1: forgiveness is better than no forgiveness, but it would be 367 00:21:05,880 --> 00:21:07,920 Speaker 1: way more useful to us to be able to bring 368 00:21:07,920 --> 00:21:11,840 Speaker 1: them back, have their salaries covered when we needed their 369 00:21:12,200 --> 00:21:15,560 Speaker 1: their labor. And you know you're not gonna bring everyone 370 00:21:15,640 --> 00:21:19,360 Speaker 1: back for eight weeks when at the end of those 371 00:21:19,400 --> 00:21:21,640 Speaker 1: eight weeks you don't know what demand is gonna look like, 372 00:21:22,280 --> 00:21:25,640 Speaker 1: because then you either if you you run out of time. 373 00:21:25,680 --> 00:21:28,440 Speaker 1: And the way the p p p UM policy initially 374 00:21:28,480 --> 00:21:32,880 Speaker 1: worked was you had to have everyone fully staffed at June. 375 00:21:33,640 --> 00:21:36,600 Speaker 1: So if you get your loan in April, beginning April, 376 00:21:36,720 --> 00:21:39,120 Speaker 1: you bring all your staff back, you get your eight 377 00:21:39,119 --> 00:21:41,920 Speaker 1: weeks where the salaries covered, and then there's this gap 378 00:21:42,040 --> 00:21:44,960 Speaker 1: between there in June where you have to maintain your 379 00:21:45,000 --> 00:21:48,360 Speaker 1: staff on your own dime even if you're closed. So 380 00:21:48,520 --> 00:21:50,320 Speaker 1: you run the risk of like, great, we got eight 381 00:21:50,359 --> 00:21:52,840 Speaker 1: weeks of free pay, but we didn't make any money 382 00:21:52,880 --> 00:21:55,719 Speaker 1: because no one could do any actual work. And then 383 00:21:55,760 --> 00:21:57,240 Speaker 1: at the end of those eight weeks, we still have 384 00:21:57,320 --> 00:21:59,320 Speaker 1: to keep the staff on even though no one can 385 00:21:59,359 --> 00:22:01,800 Speaker 1: do any actual work, and it would be very easy 386 00:22:01,800 --> 00:22:03,680 Speaker 1: to run out for the p p P to actually 387 00:22:03,760 --> 00:22:06,240 Speaker 1: turn into a loss for you if you if you 388 00:22:06,320 --> 00:22:09,080 Speaker 1: did it this way. So it's this huge paradox of 389 00:22:09,119 --> 00:22:12,520 Speaker 1: p PP that it's you know, create it as initially structured. 390 00:22:12,520 --> 00:22:15,520 Speaker 1: It creates risks for the businesses who are you know, 391 00:22:15,600 --> 00:22:19,320 Speaker 1: the most uncertain about their near term future. So basically 392 00:22:19,359 --> 00:22:21,560 Speaker 1: we walked away from p PP. We had a loan 393 00:22:22,640 --> 00:22:25,000 Speaker 1: and they said initially they were like, you can close 394 00:22:25,000 --> 00:22:28,000 Speaker 1: it whenever you want, but then the Trump administration UM 395 00:22:29,040 --> 00:22:31,720 Speaker 1: or the SPA whoever made the rule, said, you know, 396 00:22:31,800 --> 00:22:34,680 Speaker 1: you need to within forty eight hours of getting proved, 397 00:22:34,680 --> 00:22:37,439 Speaker 1: you need to close your loan. So they were I 398 00:22:37,440 --> 00:22:39,560 Speaker 1: guess other people were trying to sort of delay too, 399 00:22:39,680 --> 00:22:41,000 Speaker 1: and they said, no, no no, we need to get this 400 00:22:41,080 --> 00:22:44,240 Speaker 1: money out. So the bank said close your loan in 401 00:22:44,240 --> 00:22:47,160 Speaker 1: the next twenty four hours, something like the next forty 402 00:22:47,160 --> 00:22:49,040 Speaker 1: eight hours. And we said, okay, we're just we're gonna 403 00:22:49,080 --> 00:22:51,800 Speaker 1: walk away. We're gonna take the gamble that we'll be 404 00:22:51,840 --> 00:22:55,719 Speaker 1: able to get a p p P later and you know, 405 00:22:56,720 --> 00:22:59,920 Speaker 1: and and and be able to use it. Actually, rat 406 00:23:00,000 --> 00:23:02,840 Speaker 1: of them have a p p P. Now that's not useful. 407 00:23:03,040 --> 00:23:05,560 Speaker 1: So we gave up the first p p P. We 408 00:23:05,600 --> 00:23:08,800 Speaker 1: waited a few weeks um and then it looked like 409 00:23:09,880 --> 00:23:12,000 Speaker 1: the p PP funding was going to run out again, 410 00:23:12,480 --> 00:23:14,280 Speaker 1: and we're like, okay, I don't know if they're going 411 00:23:14,320 --> 00:23:16,840 Speaker 1: to refill again. And this was like after the p 412 00:23:16,960 --> 00:23:20,280 Speaker 1: PP was initially refunded and the money just rushed out 413 00:23:20,280 --> 00:23:24,640 Speaker 1: the door instantly. Again, We're like, okay, you know, now 414 00:23:24,640 --> 00:23:26,320 Speaker 1: we need to do it. So we reapplied and we 415 00:23:26,400 --> 00:23:29,199 Speaker 1: got our p p P and this time, it was 416 00:23:29,280 --> 00:23:31,360 Speaker 1: sort of more useful because we were ready to start 417 00:23:31,400 --> 00:23:34,160 Speaker 1: doing take out and we can cover salaries of people 418 00:23:34,200 --> 00:23:37,120 Speaker 1: don't take out, So it was really I mean, they 419 00:23:37,160 --> 00:23:40,480 Speaker 1: loosened the regulations as it went, and they eventually sort 420 00:23:40,480 --> 00:23:43,760 Speaker 1: of made it easier to reduce the uncertainty and reduce 421 00:23:43,840 --> 00:23:46,840 Speaker 1: the risk that you're going to rehire everyone and then 422 00:23:47,119 --> 00:23:50,320 Speaker 1: get stuck holding all these employees that you can't actually 423 00:23:50,440 --> 00:23:53,919 Speaker 1: use they or try to rehire everyone and you fail 424 00:23:54,000 --> 00:23:56,399 Speaker 1: and then you lose your forgiveness. It was really risky 425 00:23:56,400 --> 00:23:59,000 Speaker 1: at first. They sort of as we've gone along, they've 426 00:23:59,080 --> 00:24:01,879 Speaker 1: made things easy year. But you know, in those in 427 00:24:01,880 --> 00:24:05,639 Speaker 1: those early weeks when the strict rules were in place 428 00:24:05,680 --> 00:24:09,000 Speaker 1: and you don't know what's happening, is a lot of uncertainty. 429 00:24:11,440 --> 00:24:15,879 Speaker 1: Super interesting. So I mean, this is all um fascinating stuff. 430 00:24:15,920 --> 00:24:19,359 Speaker 1: I hadn't realized that about that dynamic of not wanting 431 00:24:19,440 --> 00:24:21,840 Speaker 1: to take the money right away, but of course it 432 00:24:21,920 --> 00:24:25,639 Speaker 1: makes sense. So I guess in the sort of ideal scenario, 433 00:24:26,680 --> 00:24:32,000 Speaker 1: the move would have been to um have unemployment insurance 434 00:24:32,080 --> 00:24:34,600 Speaker 1: cover the salary of your staff which you're forced to 435 00:24:34,720 --> 00:24:37,520 Speaker 1: let go of business to shut down, and then use 436 00:24:37,640 --> 00:24:41,600 Speaker 1: the money to sort of rehire them as demand is 437 00:24:41,760 --> 00:24:44,320 Speaker 1: ramping back up. How does rent or I don't know, 438 00:24:44,520 --> 00:24:47,760 Speaker 1: I assume you rent your land, Um, how does that 439 00:24:47,840 --> 00:24:50,879 Speaker 1: work and how has that um what kind of negotiations 440 00:24:50,880 --> 00:24:54,520 Speaker 1: have you had with your landloader whoever? I'm not exactly 441 00:24:54,520 --> 00:24:57,119 Speaker 1: surely your situation is, but how does that aspect of 442 00:24:57,119 --> 00:25:01,200 Speaker 1: the business. We have a landlord, he's uh, some local 443 00:25:01,320 --> 00:25:03,640 Speaker 1: entrepreneurs that we know that are in the building, and 444 00:25:03,760 --> 00:25:06,360 Speaker 1: they're great guys. They're small business owners too, And so 445 00:25:07,200 --> 00:25:11,399 Speaker 1: this is where, you know, when people talk about solutions 446 00:25:11,400 --> 00:25:13,520 Speaker 1: to the problem of rent and they're like, well, let's 447 00:25:13,560 --> 00:25:16,680 Speaker 1: just you know, pass a law that says you don't 448 00:25:16,720 --> 00:25:19,439 Speaker 1: have to pay your rent to me. I find that 449 00:25:19,520 --> 00:25:22,520 Speaker 1: crazy because I know, I know that our landlords are 450 00:25:22,560 --> 00:25:25,520 Speaker 1: in you know, a similar situation as us. They own 451 00:25:26,359 --> 00:25:29,480 Speaker 1: a revenue producing asset, they have debt on that asset 452 00:25:29,520 --> 00:25:32,600 Speaker 1: that they need to cover, and you know, they have 453 00:25:32,680 --> 00:25:36,200 Speaker 1: their own liquidity challenges as well. So there's no just 454 00:25:36,320 --> 00:25:39,080 Speaker 1: like ability for them to just be like, that's fine, 455 00:25:39,119 --> 00:25:42,080 Speaker 1: you don't owe us money anymore for the next year 456 00:25:42,200 --> 00:25:44,399 Speaker 1: or something like that. They can't do that. You know, 457 00:25:44,520 --> 00:25:48,199 Speaker 1: they need the money to pay the debt. So we 458 00:25:48,200 --> 00:25:51,399 Speaker 1: did approach them and actually the first first person we 459 00:25:51,400 --> 00:25:54,480 Speaker 1: approach is our bank UM to just ask for a 460 00:25:54,560 --> 00:25:56,879 Speaker 1: delay and payment and that they gave us that UM 461 00:25:57,080 --> 00:26:01,000 Speaker 1: pretty quickly. They gave us three months off, which was great. 462 00:26:01,440 --> 00:26:03,520 Speaker 1: It sort of starts the value of you know, local 463 00:26:03,560 --> 00:26:08,080 Speaker 1: banks and banks that are really UM understand that the 464 00:26:08,160 --> 00:26:10,680 Speaker 1: local community, the local economy and are willing to work 465 00:26:10,720 --> 00:26:13,480 Speaker 1: with with companies who they you know, they know we're 466 00:26:13,600 --> 00:26:16,919 Speaker 1: viable UM, where it's like a bigger bank might just 467 00:26:17,000 --> 00:26:20,040 Speaker 1: be stuck with these are the rules from corporate you know. 468 00:26:20,720 --> 00:26:26,040 Speaker 1: So they gave us the three months long forgiveness. Landlords 469 00:26:26,040 --> 00:26:29,160 Speaker 1: cut our rent in half for a few months, so 470 00:26:29,680 --> 00:26:31,880 Speaker 1: you know, they worked with there. So those were those 471 00:26:31,880 --> 00:26:35,399 Speaker 1: were both things that helped UM. But it is you know, 472 00:26:35,480 --> 00:26:40,440 Speaker 1: it's it's a sixteen thousand square foot building, so uh, 473 00:26:40,440 --> 00:26:42,080 Speaker 1: it costs a lot of money to fit it out, 474 00:26:42,880 --> 00:26:45,720 Speaker 1: and it costs a lot of money to rent it. 475 00:26:45,960 --> 00:26:48,840 Speaker 1: So even even if you cut the rent in half, 476 00:26:48,880 --> 00:26:51,440 Speaker 1: that's that's helpful, but it's still a lot of money, 477 00:26:51,480 --> 00:26:53,960 Speaker 1: a lot of fixed costs. And then given the nature 478 00:26:53,960 --> 00:26:57,840 Speaker 1: of the pandemic, three months and delayed rental, delayed debt 479 00:26:57,840 --> 00:27:00,720 Speaker 1: payments actually turned out to not get you all that far. 480 00:27:00,840 --> 00:27:03,840 Speaker 1: So we have we still have the struggle of making 481 00:27:03,840 --> 00:27:07,600 Speaker 1: these massive fixed costs every month. We we got we 482 00:27:07,680 --> 00:27:10,560 Speaker 1: got help for the early early stages of it, including 483 00:27:10,560 --> 00:27:13,000 Speaker 1: a p p P. But then you know, as things 484 00:27:13,119 --> 00:27:16,600 Speaker 1: as things go on and p p psh, you know, 485 00:27:16,720 --> 00:27:19,600 Speaker 1: money is gone and you know the bank and the 486 00:27:19,800 --> 00:27:22,160 Speaker 1: landlord have done what they can, but they can't they 487 00:27:22,160 --> 00:27:24,640 Speaker 1: can't give you a year's worth of help. It's sort 488 00:27:24,640 --> 00:27:27,800 Speaker 1: of that that second wave of the virus is sort 489 00:27:27,800 --> 00:27:30,720 Speaker 1: of mirrored in a second wave of economic challenges for 490 00:27:30,720 --> 00:27:34,720 Speaker 1: a lot of small businesses. I think I'm just curious 491 00:27:34,760 --> 00:27:39,879 Speaker 1: with your with your sort of hospitality business had on, 492 00:27:40,000 --> 00:27:44,800 Speaker 1: plus your economics had on, how would you have designed 493 00:27:45,119 --> 00:27:49,680 Speaker 1: a program to help American businesses in the current situation. 494 00:27:49,800 --> 00:27:53,960 Speaker 1: What would you like to have seen done? So I 495 00:27:54,000 --> 00:27:56,040 Speaker 1: think that the right way to help businesses is to 496 00:27:56,160 --> 00:27:59,200 Speaker 1: not try to help workers and businesses of one policy. 497 00:28:00,040 --> 00:28:06,600 Speaker 1: We're dealing with a once in a lifetime economic challenge. 498 00:28:07,200 --> 00:28:10,479 Speaker 1: It's something that government has never had to do before, 499 00:28:11,040 --> 00:28:14,440 Speaker 1: and they're having to spin up all these brand new 500 00:28:14,480 --> 00:28:19,280 Speaker 1: programs and deal with economic challenges. That's just they're not 501 00:28:19,359 --> 00:28:22,760 Speaker 1: they're not part of the normal tool kit, and to 502 00:28:22,840 --> 00:28:26,240 Speaker 1: try to not only prevent a wave of a massive 503 00:28:26,280 --> 00:28:29,840 Speaker 1: wave of small business failures and also get them to 504 00:28:30,280 --> 00:28:33,000 Speaker 1: you know, preserve their employment. It struck me from the 505 00:28:33,040 --> 00:28:36,040 Speaker 1: beginning and something of a bank shot, you know what 506 00:28:36,040 --> 00:28:38,200 Speaker 1: I mean, Like you're already shooting from the half court 507 00:28:38,240 --> 00:28:40,000 Speaker 1: and you want to do like a trick shot with it, 508 00:28:40,040 --> 00:28:42,880 Speaker 1: like it's just one thing at a time. I really 509 00:28:42,880 --> 00:28:45,800 Speaker 1: thought would have been a better way to do this, so, 510 00:28:45,920 --> 00:28:49,000 Speaker 1: you know, let the workers rely on UI and give 511 00:28:49,040 --> 00:28:53,080 Speaker 1: a program to businesses that actually gives them flexibility and 512 00:28:53,120 --> 00:28:57,040 Speaker 1: help and lets them, you know, just focus on trying 513 00:28:57,080 --> 00:29:00,520 Speaker 1: to avoid the massive wave of failures. So the proposal 514 00:29:00,600 --> 00:29:03,200 Speaker 1: that I actually put out with John Latieri of the 515 00:29:03,240 --> 00:29:06,280 Speaker 1: Economic Innovation Group, we did put out a small business plan, 516 00:29:07,040 --> 00:29:12,760 Speaker 1: and what we suggested was give businesses large, zero percent interest, 517 00:29:13,400 --> 00:29:17,600 Speaker 1: long term loans, and this would be I think I 518 00:29:17,880 --> 00:29:21,520 Speaker 1: think it's more optimally targeted for helping those who can 519 00:29:21,600 --> 00:29:27,560 Speaker 1: survive survive and also lowering operating costs basically forever, so 520 00:29:27,640 --> 00:29:30,360 Speaker 1: it's not just a short term like we're just going 521 00:29:30,400 --> 00:29:33,560 Speaker 1: to shovel cash into you until the problem goes away, 522 00:29:33,640 --> 00:29:36,360 Speaker 1: because I think there's a lot of problems with structuring 523 00:29:36,360 --> 00:29:39,800 Speaker 1: a policy like that. This is we're going to give you. 524 00:29:39,880 --> 00:29:43,120 Speaker 1: We're gonna let you refinance your debt so that your 525 00:29:43,120 --> 00:29:46,240 Speaker 1: debt costs are lower. We're gonna give you capital to 526 00:29:46,520 --> 00:29:49,280 Speaker 1: purchase a loan, a loan big enough that you can 527 00:29:49,280 --> 00:29:53,080 Speaker 1: purchase occupied real estate, purchase any capital investments you need 528 00:29:53,120 --> 00:29:56,760 Speaker 1: to make, rebuild your working capital, and then pay for 529 00:29:56,880 --> 00:30:00,400 Speaker 1: it at zero interest over twenty and a thirty year term. 530 00:30:00,440 --> 00:30:03,200 Speaker 1: So that those fixed costs, those operating costs that are 531 00:30:03,240 --> 00:30:05,680 Speaker 1: so killer for businesses right now, that pushes all of 532 00:30:05,720 --> 00:30:09,800 Speaker 1: those down significantly, and it means that you know, you 533 00:30:09,800 --> 00:30:12,080 Speaker 1: you don't just get helped this month, next month, you 534 00:30:12,120 --> 00:30:15,160 Speaker 1: get help you know, from now on, every month you're 535 00:30:15,160 --> 00:30:17,760 Speaker 1: operating costs you're lower, and that really gives you an 536 00:30:17,800 --> 00:30:21,480 Speaker 1: incentive to sort of stick it out, you know, until 537 00:30:21,520 --> 00:30:25,360 Speaker 1: we get back to normal. It makes you viable at 538 00:30:25,440 --> 00:30:29,840 Speaker 1: lower levels of demand in perpetuity. That's to me key, 539 00:30:29,880 --> 00:30:31,920 Speaker 1: because we don't know how long this is gonna last, 540 00:30:32,440 --> 00:30:36,080 Speaker 1: and you cannot count on the government simply restarting whatever 541 00:30:36,640 --> 00:30:40,160 Speaker 1: cash assistance program runs out if the virus goes on 542 00:30:40,280 --> 00:30:43,520 Speaker 1: longer than thought, and it has, so you know, I 543 00:30:43,520 --> 00:30:47,080 Speaker 1: I My focus was like, let's lower operating expenditures and 544 00:30:47,280 --> 00:30:49,400 Speaker 1: keep them out so that no matter how long this 545 00:30:49,480 --> 00:30:53,000 Speaker 1: goes on, you've improved the viability and businesses, you've given 546 00:30:53,040 --> 00:30:57,320 Speaker 1: them sort of, you know, the ability to weather longer challenges. 547 00:30:57,440 --> 00:31:00,000 Speaker 1: So that's my that was my policy proposed with John 548 00:31:00,040 --> 00:31:03,640 Speaker 1: and and it's actually it's part of the Rubio Collins bill. 549 00:31:03,720 --> 00:31:08,360 Speaker 1: Now it's right now it's targeted at low income communities only, 550 00:31:08,440 --> 00:31:12,280 Speaker 1: low income census tracks only. But are hoping is that 551 00:31:12,280 --> 00:31:27,280 Speaker 1: that gets sort of negotiated up to apply to everyone. 552 00:31:18,120 --> 00:31:35,160 Speaker 1: M Speaking of issues in the forthcoming bill, and we're 553 00:31:35,360 --> 00:31:38,560 Speaker 1: pointing out we're recording this August four. We don't know 554 00:31:38,600 --> 00:31:42,000 Speaker 1: what's going to happen with the bill in the days ahead. 555 00:31:42,240 --> 00:31:44,920 Speaker 1: But one of the obviously most contentious issues, and it's 556 00:31:44,960 --> 00:31:47,840 Speaker 1: a place where macro really means micro, is the expanded 557 00:31:47,920 --> 00:31:52,120 Speaker 1: unemployment insurance workers getting an extra six dollars a week. 558 00:31:53,200 --> 00:31:56,320 Speaker 1: Many economists say that this is necessary to maintain demand 559 00:31:56,400 --> 00:31:59,920 Speaker 1: and just also allow hushole households operate. Others say it's 560 00:31:59,920 --> 00:32:02,440 Speaker 1: a dis incentive to work. Have you had any issues 561 00:32:02,480 --> 00:32:06,160 Speaker 1: with that? Have you any difficulty bringing back workers. Now 562 00:32:06,200 --> 00:32:10,080 Speaker 1: that as you throughout the reopening process due to the 563 00:32:10,200 --> 00:32:16,920 Speaker 1: UI expansion, there's a slight, slight divide where in general, 564 00:32:17,240 --> 00:32:19,520 Speaker 1: the back of the house people catching staff want to 565 00:32:19,520 --> 00:32:21,960 Speaker 1: be back more than the front of the house staff too, 566 00:32:22,000 --> 00:32:24,080 Speaker 1: because the front of the house staff sort of relies 567 00:32:24,120 --> 00:32:27,640 Speaker 1: more on tips and stuff, where that's you know, not 568 00:32:27,720 --> 00:32:29,960 Speaker 1: as strong right now. So there is a little divide. 569 00:32:29,960 --> 00:32:32,960 Speaker 1: And it's certainly not the case that every single employee 570 00:32:33,040 --> 00:32:35,280 Speaker 1: is banging on our door to get as many hours 571 00:32:35,320 --> 00:32:37,120 Speaker 1: as they could, so you sort of feel it to 572 00:32:37,160 --> 00:32:39,720 Speaker 1: that extent, but it's just not it's just not a 573 00:32:39,800 --> 00:32:44,000 Speaker 1: binding constraint. And you know, I think it's important to 574 00:32:44,000 --> 00:32:49,000 Speaker 1: to be realistic about this, and you have to acknowledge 575 00:32:49,080 --> 00:32:52,040 Speaker 1: that people are making more than they did before, and 576 00:32:52,080 --> 00:32:55,680 Speaker 1: so obviously this is going to make some people not 577 00:32:55,800 --> 00:32:58,239 Speaker 1: eager to come back to work. And obviously there are 578 00:32:58,240 --> 00:33:01,640 Speaker 1: going to be examples where some tries to hire back 579 00:33:01,760 --> 00:33:04,400 Speaker 1: or bring back a key employee and they don't. They 580 00:33:04,440 --> 00:33:06,000 Speaker 1: don't come back, they don't want to come back. They 581 00:33:06,040 --> 00:33:08,760 Speaker 1: prefer to stay unemployment. You can make a full throw 582 00:33:09,200 --> 00:33:13,680 Speaker 1: case for the expanded unemployment while recognizing that this situation 583 00:33:13,720 --> 00:33:15,960 Speaker 1: does occur. I think it's important to do that because, 584 00:33:15,960 --> 00:33:18,560 Speaker 1: like if you try to tell people now, no one's 585 00:33:19,160 --> 00:33:21,360 Speaker 1: no one wants to stay home and make more money. 586 00:33:21,480 --> 00:33:23,840 Speaker 1: It's just they don't believe it. It's like it undermines 587 00:33:23,920 --> 00:33:27,120 Speaker 1: the case. So start from there. Admit that it is happening. 588 00:33:27,160 --> 00:33:30,360 Speaker 1: But it's just not that important right now. It's not 589 00:33:30,440 --> 00:33:34,640 Speaker 1: a binding constraint. If you ask restaurants, you know, how 590 00:33:34,680 --> 00:33:38,480 Speaker 1: would you rank the importance of lower demand because people 591 00:33:38,480 --> 00:33:41,760 Speaker 1: are afraid of the virus versus you can't bring your 592 00:33:41,760 --> 00:33:46,080 Speaker 1: employees back. Anyone who says that not being able to 593 00:33:46,080 --> 00:33:48,720 Speaker 1: bring their employees back is the biggest problem right now, 594 00:33:48,920 --> 00:33:52,680 Speaker 1: they're doing great. They're doing great, and they're not the 595 00:33:53,360 --> 00:33:56,440 Speaker 1: nexus of the economic damage right now. So if someone 596 00:33:56,480 --> 00:33:58,560 Speaker 1: says you, like, I could be doing so much better, 597 00:33:59,000 --> 00:34:02,240 Speaker 1: I just can't hire an workers back, they're not indicative 598 00:34:02,320 --> 00:34:05,240 Speaker 1: of the actual problems that we're facing right now. We're not. 599 00:34:05,520 --> 00:34:09,240 Speaker 1: There's there's twenty million lost jobs and there's five million 600 00:34:09,320 --> 00:34:12,920 Speaker 1: job openings. So it's not a binding constraint right now. 601 00:34:12,960 --> 00:34:15,880 Speaker 1: The constraint is demand, and that is going to be 602 00:34:15,960 --> 00:34:19,719 Speaker 1: the constraint for some time. So but the good news 603 00:34:19,760 --> 00:34:22,480 Speaker 1: is you know, you don't have to actually weigh these 604 00:34:22,600 --> 00:34:26,320 Speaker 1: things against each other. The macro demand problem and obviously 605 00:34:26,360 --> 00:34:29,640 Speaker 1: the unemployment spending helps the demand problem. It puts fashion 606 00:34:29,719 --> 00:34:32,800 Speaker 1: the money, it helps the households keep spending up. You 607 00:34:32,840 --> 00:34:36,160 Speaker 1: don't have to weigh that against the disincentives. Just it's 608 00:34:36,280 --> 00:34:39,120 Speaker 1: very easy to structure the program so that if you 609 00:34:39,239 --> 00:34:42,560 Speaker 1: get rehired, you'd take your six hundred dollars with you 610 00:34:42,680 --> 00:34:47,640 Speaker 1: for some time, everyone wins. Just on the topic of demand, 611 00:34:47,719 --> 00:34:52,640 Speaker 1: I'm curious how you see that going forward. Do you 612 00:34:52,719 --> 00:34:57,320 Speaker 1: expect a full recovery if the coronavirus suddenly goes away, 613 00:34:57,480 --> 00:35:00,160 Speaker 1: either because of a vaccine or because of some thing 614 00:35:00,160 --> 00:35:03,440 Speaker 1: else where. Do you see the hospitality industry sort of 615 00:35:04,560 --> 00:35:08,680 Speaker 1: irreparably changed because of all this? And and secondly, is 616 00:35:08,719 --> 00:35:13,200 Speaker 1: there anything that you could see the authorities actually doing 617 00:35:13,320 --> 00:35:18,680 Speaker 1: in order to boost demand? So on the demand side, 618 00:35:18,719 --> 00:35:21,160 Speaker 1: once the virus has gone, I don't really see any 619 00:35:21,280 --> 00:35:25,279 Speaker 1: challenges for the hospitality industry. People when they see a 620 00:35:25,320 --> 00:35:29,200 Speaker 1: structural change in the economy happening, it's not simply a 621 00:35:29,200 --> 00:35:32,000 Speaker 1: matter of boosting the demand, but like there's like some 622 00:35:32,080 --> 00:35:37,640 Speaker 1: deeper change and consumer behavior or like industrial structure they 623 00:35:37,680 --> 00:35:41,280 Speaker 1: tend to put on there. There's nothing we can do, 624 00:35:41,840 --> 00:35:45,360 Speaker 1: and this industry's ruined. Hat I think that the reason 625 00:35:45,440 --> 00:35:48,759 Speaker 1: is because we saw this with manufacturing, and that's been 626 00:35:49,040 --> 00:35:51,960 Speaker 1: like the biggest example of structural change that we've seen, 627 00:35:52,280 --> 00:35:56,440 Speaker 1: and the last two recessions, excluding this one, what we 628 00:35:56,480 --> 00:35:59,640 Speaker 1: saw was manufacturing like dropped off a cliff and never recovered. 629 00:36:00,160 --> 00:36:02,000 Speaker 1: You know, the same thing happened in construction in two 630 00:36:02,040 --> 00:36:04,080 Speaker 1: thou It dropped off a cliff and then it took 631 00:36:04,120 --> 00:36:07,080 Speaker 1: like years and years and years to recover. And so 632 00:36:07,400 --> 00:36:10,000 Speaker 1: I think people started getting their heads that, like, when 633 00:36:10,000 --> 00:36:15,040 Speaker 1: you have a recession and there is an industry that's 634 00:36:15,120 --> 00:36:18,200 Speaker 1: more hit than others in that recession, there's like a 635 00:36:18,239 --> 00:36:22,120 Speaker 1: hopelessness to that, and there's like an necessarily long term 636 00:36:22,200 --> 00:36:25,239 Speaker 1: adjustment to that. And I truly don't think that's the 637 00:36:25,239 --> 00:36:29,920 Speaker 1: case with leisure hospitality. The reason being manufacturing job losses 638 00:36:30,000 --> 00:36:33,840 Speaker 1: we're gonna happen, right, There's like a global realignment of 639 00:36:33,840 --> 00:36:37,279 Speaker 1: manufacturing production that was coming, and the recession is what 640 00:36:37,400 --> 00:36:39,719 Speaker 1: ushered it in, and so once it ushered it in, 641 00:36:39,880 --> 00:36:42,960 Speaker 1: there's really kind of no rebuilding that there's no bringing 642 00:36:42,960 --> 00:36:46,919 Speaker 1: it back. Leisure hospitality has been growing as a share 643 00:36:46,960 --> 00:36:50,719 Speaker 1: of employment for basically eighty years. If you look at 644 00:36:50,719 --> 00:36:53,239 Speaker 1: the time series of the share of workers who are 645 00:36:53,239 --> 00:36:57,279 Speaker 1: employed in leisure hospitality basically since the end of World 646 00:36:57,320 --> 00:37:01,840 Speaker 1: War Two up through feb you or, it's a straight 647 00:37:01,840 --> 00:37:06,240 Speaker 1: line increasing up. So the share has gone up over time, 648 00:37:06,719 --> 00:37:09,160 Speaker 1: and it's very steady. It's one of the steadiest time 649 00:37:09,200 --> 00:37:12,000 Speaker 1: series about the U. S economy you'll see. And the 650 00:37:12,040 --> 00:37:14,560 Speaker 1: reason is because as people get richer, and they do 651 00:37:14,680 --> 00:37:18,120 Speaker 1: over time, they spend more on leisure, on hospitality. They 652 00:37:18,160 --> 00:37:20,400 Speaker 1: spend more in eating out less on eating home. This 653 00:37:20,480 --> 00:37:24,000 Speaker 1: is like the steadiest long run trend about the labor 654 00:37:24,040 --> 00:37:26,880 Speaker 1: market or about the economy that there is. So I 655 00:37:26,920 --> 00:37:29,840 Speaker 1: don't see that going away. I don't see how the 656 00:37:29,880 --> 00:37:32,280 Speaker 1: world we come back to when we have a vaccine 657 00:37:32,360 --> 00:37:35,400 Speaker 1: everything safe again is different than the world that we left, 658 00:37:35,520 --> 00:37:39,080 Speaker 1: which is, over time, people spend more on going out, 659 00:37:39,160 --> 00:37:42,480 Speaker 1: they spend more in entertainment, they spend more on restaurants, 660 00:37:42,719 --> 00:37:46,600 Speaker 1: and they do this every single year for almost a century. 661 00:37:46,760 --> 00:37:49,960 Speaker 1: So I'm bullish on the demand side return. What I 662 00:37:50,040 --> 00:37:55,239 Speaker 1: worry about is if we don't help companies in this 663 00:37:55,400 --> 00:37:58,680 Speaker 1: industry so that when the demand comes back, they're there 664 00:37:58,760 --> 00:38:01,560 Speaker 1: to hire. We're going to have something that looks like 665 00:38:01,600 --> 00:38:04,680 Speaker 1: the recovery from the Great Recession, because it takes a 666 00:38:04,719 --> 00:38:08,799 Speaker 1: lot longer to create new jobs in the millions then 667 00:38:08,840 --> 00:38:11,279 Speaker 1: it does to bring people back to their old employers 668 00:38:11,280 --> 00:38:14,200 Speaker 1: in the in the millions. It's just it's it's going 669 00:38:14,280 --> 00:38:16,640 Speaker 1: to take so much time, especially when the interest rates 670 00:38:16,640 --> 00:38:19,399 Speaker 1: at zero lower bound, you know it's going to be 671 00:38:19,840 --> 00:38:23,680 Speaker 1: Making new jobs takes time. So I think there's if 672 00:38:23,719 --> 00:38:26,880 Speaker 1: we if we help to preserve as many businesses in 673 00:38:26,920 --> 00:38:29,920 Speaker 1: this sector as makes you know, economic sense, if we 674 00:38:29,920 --> 00:38:33,319 Speaker 1: can structure efficient policies that carry them through this, we 675 00:38:33,360 --> 00:38:35,800 Speaker 1: can have a relatively quick bounce back because they'll be 676 00:38:35,840 --> 00:38:38,920 Speaker 1: ready to rehire and the demand will be there. If 677 00:38:38,920 --> 00:38:42,680 Speaker 1: we don't do that, and we let basically a generation 678 00:38:43,080 --> 00:38:47,040 Speaker 1: of entrepreneurs in this sector, if we let their credit 679 00:38:47,120 --> 00:38:50,440 Speaker 1: and their businesses be wiped out, and the banks who 680 00:38:50,480 --> 00:38:54,000 Speaker 1: loaned to them see those loans go bad, and the 681 00:38:54,120 --> 00:38:59,239 Speaker 1: landlords who rented space to them enter bankruptcy and lose 682 00:38:59,280 --> 00:39:03,080 Speaker 1: their buildings, you wipe out real and tangible capital and 683 00:39:03,160 --> 00:39:07,759 Speaker 1: knowledge there that is the credit, entrepreneurship, and knowledge of 684 00:39:07,840 --> 00:39:11,359 Speaker 1: these people. And I just when you combine that with 685 00:39:11,440 --> 00:39:15,600 Speaker 1: the economy trying to reallocate back towards growth in this sector, 686 00:39:16,160 --> 00:39:18,880 Speaker 1: to me, that's just a recipe for a very slow, 687 00:39:19,640 --> 00:39:22,920 Speaker 1: very bad recovery. So my hope is that we're going 688 00:39:23,000 --> 00:39:25,560 Speaker 1: to make sure that those businesses are there for that 689 00:39:25,560 --> 00:39:29,640 Speaker 1: that reallocation back to the moor more complicly. I want 690 00:39:29,640 --> 00:39:31,800 Speaker 1: to talk a little bit more soon about some of 691 00:39:31,840 --> 00:39:34,640 Speaker 1: the other broader eco issues, including some of your work 692 00:39:34,760 --> 00:39:37,160 Speaker 1: on the trend of working from home, because that does 693 00:39:37,200 --> 00:39:39,960 Speaker 1: seem like an area of change. But just before we 694 00:39:39,960 --> 00:39:43,279 Speaker 1: go to that real quickly, one other business business running question. 695 00:39:43,480 --> 00:39:46,600 Speaker 1: Uh your business today? So you mentioned you have bowling, 696 00:39:46,680 --> 00:39:50,080 Speaker 1: but it's based apart you have some operations in the 697 00:39:50,360 --> 00:39:53,919 Speaker 1: lawn today August fourth. How close are you to sort 698 00:39:53,960 --> 00:39:58,760 Speaker 1: of having a normal, sustainable, viable business and how long 699 00:39:59,080 --> 00:40:00,799 Speaker 1: is it? How on of a hall do you have 700 00:40:00,880 --> 00:40:03,600 Speaker 1: to get back. I just don't see any return to 701 00:40:04,040 --> 00:40:08,400 Speaker 1: normal until the until the virus has gone based on 702 00:40:08,440 --> 00:40:11,839 Speaker 1: what we've seen, Um, you know, we don't have a 703 00:40:11,880 --> 00:40:15,880 Speaker 1: massive surge in this area in Pennsylvania. You know, Governor 704 00:40:15,920 --> 00:40:19,520 Speaker 1: Wolf has been pretty aggressive. It's not fully normal here, 705 00:40:19,520 --> 00:40:21,520 Speaker 1: but it's a lot you know, closer to normal than 706 00:40:21,600 --> 00:40:23,359 Speaker 1: a lot of other places in the country, and it's 707 00:40:23,400 --> 00:40:25,920 Speaker 1: just not it's not it's not even close to normal work. 708 00:40:26,200 --> 00:40:30,360 Speaker 1: You know, July was like twenty three per cent of 709 00:40:30,400 --> 00:40:33,839 Speaker 1: the normal month, So it's a long way to go. 710 00:40:34,160 --> 00:40:36,520 Speaker 1: And you know, I just don't I don't think we're 711 00:40:36,520 --> 00:40:40,000 Speaker 1: going to get to normal until um, until the virus 712 00:40:40,040 --> 00:40:43,840 Speaker 1: is going basically, and then just on the stimulus that 713 00:40:43,880 --> 00:40:47,799 Speaker 1: they're debating right now. You mentioned your proposal UM in 714 00:40:47,960 --> 00:40:53,440 Speaker 1: terms of refinancing long term debt, reducing costs and so forth. 715 00:40:53,840 --> 00:40:57,160 Speaker 1: What other priorities do you think lawmakers need to understand 716 00:40:57,600 --> 00:41:01,440 Speaker 1: for this round to prevent what you identified as the 717 00:41:01,600 --> 00:41:05,440 Speaker 1: risk of sort of a generation of small business entrepreneurs 718 00:41:05,440 --> 00:41:08,360 Speaker 1: getting wiped out permanently damaging it supplies that part of 719 00:41:08,360 --> 00:41:12,120 Speaker 1: a Yeah, I think our plan is the best for it, um, 720 00:41:12,280 --> 00:41:15,839 Speaker 1: the best fit for it expanded in that, but that's 721 00:41:15,840 --> 00:41:19,760 Speaker 1: just you know, in order to prevent the really slow, 722 00:41:20,520 --> 00:41:23,960 Speaker 1: massive recession recovery, UM. You know, small businesses are just 723 00:41:24,080 --> 00:41:26,440 Speaker 1: one group that needs to be helped. You also got 724 00:41:26,440 --> 00:41:29,640 Speaker 1: to take care of households with the continue to expand 725 00:41:29,640 --> 00:41:31,560 Speaker 1: it unemployment insurance. You've got to take care of state 726 00:41:31,560 --> 00:41:35,560 Speaker 1: and local government with UM some relief money there. So 727 00:41:35,800 --> 00:41:38,880 Speaker 1: it's really you can't just help small businesses. But I 728 00:41:38,920 --> 00:41:41,520 Speaker 1: think that to help small business is what we've proposed 729 00:41:42,120 --> 00:41:45,120 Speaker 1: UM is really it's the best fit for the challenge 730 00:41:45,120 --> 00:41:49,280 Speaker 1: going forward. So just to shift yours for a second. 731 00:41:49,400 --> 00:41:51,440 Speaker 1: And we haven't really talked about it much, but you're 732 00:41:51,480 --> 00:41:56,919 Speaker 1: the chief economist at Upward, an online freelancing platform. You've 733 00:41:56,920 --> 00:41:58,560 Speaker 1: done a lot of work on what everyone thinks is 734 00:41:58,600 --> 00:42:00,799 Speaker 1: a big topic, which is the sort future of work 735 00:42:00,800 --> 00:42:03,080 Speaker 1: work from home, and it does seem like an area 736 00:42:03,120 --> 00:42:06,560 Speaker 1: where potentially we might see a meaningful change in how 737 00:42:06,600 --> 00:42:09,239 Speaker 1: the world works. So you're pretty bullish on work from 738 00:42:09,239 --> 00:42:11,520 Speaker 1: home and you think that some of these patterns will persist. 739 00:42:11,680 --> 00:42:15,640 Speaker 1: Why why is that? Well, I was bullish on work 740 00:42:15,680 --> 00:42:18,920 Speaker 1: from home before the pandemic hit. So when I started 741 00:42:18,960 --> 00:42:20,839 Speaker 1: it up work last year, one of the first big 742 00:42:20,880 --> 00:42:24,680 Speaker 1: projects I did was around remote work and how remote 743 00:42:24,680 --> 00:42:28,200 Speaker 1: work has been affecting the economy so far. This issue 744 00:42:28,239 --> 00:42:31,840 Speaker 1: was on my agenda and was a major research topic 745 00:42:31,920 --> 00:42:35,240 Speaker 1: for me. UM. Obviously, working at a company that helps 746 00:42:35,280 --> 00:42:38,520 Speaker 1: connect people to remote professionals all over the world, this 747 00:42:38,600 --> 00:42:41,880 Speaker 1: is a very important topic already, so you know, the 748 00:42:41,920 --> 00:42:45,799 Speaker 1: bullishness sort of predates the pandemic. And the truth is 749 00:42:45,840 --> 00:42:48,520 Speaker 1: that every year for the last decade, we've seen the 750 00:42:48,560 --> 00:42:51,160 Speaker 1: share of people working remote go up. So it was 751 00:42:51,200 --> 00:42:53,920 Speaker 1: a structural trend already. It was already increasing, and it 752 00:42:53,960 --> 00:42:57,080 Speaker 1: was going to continue increasing, and all the economics sort 753 00:42:57,080 --> 00:43:01,480 Speaker 1: of favored them. But you know, after, I think it's 754 00:43:01,560 --> 00:43:05,320 Speaker 1: happening even faster. And what I think has happened is firms, 755 00:43:05,880 --> 00:43:11,000 Speaker 1: firms have been forced into an experiment and the for 756 00:43:11,120 --> 00:43:14,560 Speaker 1: whatever reason they hadn't they hadn't made that leap before. 757 00:43:15,400 --> 00:43:17,959 Speaker 1: Um a lot of them are now learning that it's 758 00:43:18,000 --> 00:43:20,359 Speaker 1: going better than they thought it would. So we did 759 00:43:20,360 --> 00:43:23,640 Speaker 1: a survey it up work where we asked hiring managers 760 00:43:24,080 --> 00:43:26,719 Speaker 1: as part of our Future Workforce Report. We asked five 761 00:43:27,120 --> 00:43:30,919 Speaker 1: hiring managers how the remote work experiment has been going 762 00:43:31,080 --> 00:43:35,680 Speaker 1: and said it's been going better than expected, and only 763 00:43:35,840 --> 00:43:37,960 Speaker 1: one out of tendant said it's going worse than expected. 764 00:43:38,560 --> 00:43:41,680 Speaker 1: So this is a very, I think, precisely useful way 765 00:43:41,719 --> 00:43:44,160 Speaker 1: to frame the question, because it's not is it good 766 00:43:44,280 --> 00:43:49,040 Speaker 1: or bad? But are you learning positive things about it? 767 00:43:49,320 --> 00:43:52,239 Speaker 1: And I think this sort of helps explain why all 768 00:43:52,239 --> 00:43:54,200 Speaker 1: these companies who it seems to be working well for 769 00:43:54,400 --> 00:43:56,680 Speaker 1: why didn't they do it before Because they didn't know 770 00:43:56,719 --> 00:43:58,960 Speaker 1: how well it was going to work, and there's sort 771 00:43:59,000 --> 00:44:01,320 Speaker 1: of risk in trying. And now that they've been forced 772 00:44:01,320 --> 00:44:04,040 Speaker 1: to try, they're seeing it's working well, and I think 773 00:44:04,040 --> 00:44:07,719 Speaker 1: that that really vodes well for future hiring. Week We 774 00:44:07,840 --> 00:44:11,239 Speaker 1: also nice about our surveys. We actually had run this 775 00:44:11,320 --> 00:44:15,040 Speaker 1: survey in November nine and we ask all these questions 776 00:44:15,080 --> 00:44:17,839 Speaker 1: about what you're gonna do regarding remote work hiring over 777 00:44:17,880 --> 00:44:21,560 Speaker 1: the next five years, and then COVID happened and we're like, well, 778 00:44:21,600 --> 00:44:24,080 Speaker 1: let's run this survey again, so we ran in April, 779 00:44:24,400 --> 00:44:27,680 Speaker 1: so we really had a pre impost COVID comparison of 780 00:44:27,760 --> 00:44:31,359 Speaker 1: hiring plans. And what we've seen is that five year 781 00:44:31,520 --> 00:44:35,560 Speaker 1: remote work hiring plans have basically doubled. So however, many 782 00:44:35,600 --> 00:44:38,800 Speaker 1: remote workers companies were gonna hire over the next five years, 783 00:44:39,440 --> 00:44:43,640 Speaker 1: they're now planning on doing twice that amount, So that's significant. No, 784 00:44:44,000 --> 00:44:46,319 Speaker 1: I don't know exactly where we're gonna end up in 785 00:44:46,400 --> 00:44:49,480 Speaker 1: terms of the percent of the workforce that's remote, but 786 00:44:49,680 --> 00:44:52,640 Speaker 1: I think it doesn't take a whole lot to make 787 00:44:52,680 --> 00:44:54,920 Speaker 1: a very big difference, and I think that it's a 788 00:44:55,080 --> 00:44:58,200 Speaker 1: it's a serious structural change, let's put it that way, 789 00:44:58,600 --> 00:45:01,080 Speaker 1: all right, Adam, it was great to have you on. 790 00:45:01,239 --> 00:45:03,759 Speaker 1: This was uh it's crazy. We hadn't had you on 791 00:45:03,800 --> 00:45:06,520 Speaker 1: the podcast before, but I feel like this is a 792 00:45:06,520 --> 00:45:09,839 Speaker 1: perfect moment for it and really appreciate your going. Yeah, 793 00:45:09,880 --> 00:45:22,160 Speaker 1: definitely a lot of fun see any time. Thanks Satah crazy. 794 00:45:22,200 --> 00:45:24,520 Speaker 1: I thought Adam was like the perfect guest for this moment. 795 00:45:24,640 --> 00:45:27,880 Speaker 1: Like hearing him just describe the mechanics of closing and 796 00:45:27,920 --> 00:45:31,120 Speaker 1: reopening and getting the p p P loan and everything 797 00:45:31,160 --> 00:45:34,480 Speaker 1: else is like learned to come from that. Yeah. I 798 00:45:34,560 --> 00:45:40,040 Speaker 1: found his discussion of the p p P loan quite interesting. Specifically, 799 00:45:40,080 --> 00:45:43,319 Speaker 1: I hadn't thought like of all the considerations that go 800 00:45:43,400 --> 00:45:46,160 Speaker 1: into it and the sort of like game theory involved 801 00:45:46,200 --> 00:45:50,719 Speaker 1: in it. Yeah, yeah, especially like not knowing if it 802 00:45:50,840 --> 00:45:52,400 Speaker 1: was going to run out. Like if you know that 803 00:45:52,440 --> 00:45:54,800 Speaker 1: there's plenty of money out there and that the pot 804 00:45:54,880 --> 00:45:57,520 Speaker 1: will never run out, then you're like, okay, then we'll 805 00:45:57,680 --> 00:46:00,560 Speaker 1: apply for the loan or you activate it when you're 806 00:46:00,560 --> 00:46:02,960 Speaker 1: actually are going to have something to do with the money. 807 00:46:03,000 --> 00:46:04,759 Speaker 1: But in the beginning we didn't know that it also 808 00:46:04,800 --> 00:46:07,480 Speaker 1: sort of speaks to how counterproductive that it was kept 809 00:46:07,680 --> 00:46:09,840 Speaker 1: in the first place. I mean, like makes sense, I 810 00:46:09,840 --> 00:46:13,120 Speaker 1: guess that they had a cap for company, but it 811 00:46:13,320 --> 00:46:15,840 Speaker 1: sort of shows how I guess there was a negative 812 00:46:15,880 --> 00:46:19,880 Speaker 1: effect of making it seem like the basket was finite overall, 813 00:46:19,920 --> 00:46:22,680 Speaker 1: because then people had to worry about timing words. If 814 00:46:22,719 --> 00:46:25,360 Speaker 1: it had just been sort of unlimited, you wouldn't have 815 00:46:25,400 --> 00:46:28,680 Speaker 1: the same issue. Also, his point about how he would 816 00:46:28,719 --> 00:46:32,840 Speaker 1: have designed some sort of stimulus program to help American businesses, 817 00:46:32,880 --> 00:46:35,600 Speaker 1: that was interesting as well, Like the idea of designing 818 00:46:35,680 --> 00:46:40,319 Speaker 1: something that would be permanently beneficial rather than something that 819 00:46:40,640 --> 00:46:44,400 Speaker 1: helps in the interim for a very specific period. To 820 00:46:44,480 --> 00:46:48,880 Speaker 1: your point, just then, like the p PP only helps 821 00:46:49,080 --> 00:46:51,759 Speaker 1: for for a little while until it runs out, and 822 00:46:51,760 --> 00:46:56,840 Speaker 1: then you have to keep continuously um reactivating that reactivating 823 00:46:56,840 --> 00:47:01,799 Speaker 1: the extra six dollars in unemployment page. It feels like, 824 00:47:03,120 --> 00:47:07,680 Speaker 1: I mean, I realized policymakers are are under extreme time 825 00:47:07,680 --> 00:47:10,240 Speaker 1: pressure at the moment, but it feels like if people 826 00:47:10,280 --> 00:47:13,640 Speaker 1: sat back and thought about it, you could perhaps come 827 00:47:13,719 --> 00:47:17,880 Speaker 1: up with something that would be beneficial in the long term. Well, 828 00:47:17,880 --> 00:47:21,000 Speaker 1: they've had like four months since the last you would 829 00:47:21,000 --> 00:47:23,480 Speaker 1: have hoped that they would have used as time for 830 00:47:23,520 --> 00:47:26,960 Speaker 1: the next round to do something a little bit more sophisticated, 831 00:47:27,000 --> 00:47:31,440 Speaker 1: But it's unclear what the what whether that all that 832 00:47:31,480 --> 00:47:35,080 Speaker 1: time really helped. But I did think also his point about, 833 00:47:35,640 --> 00:47:37,800 Speaker 1: you know, the sort of one size fits all of 834 00:47:37,840 --> 00:47:41,960 Speaker 1: the approach, like with PPP, about keeping on payrolls and 835 00:47:42,000 --> 00:47:45,319 Speaker 1: thus helping businesses and workers was just about sort of 836 00:47:45,400 --> 00:47:49,400 Speaker 1: keeping the businesses alive and in a position to reopen 837 00:47:49,600 --> 00:47:53,880 Speaker 1: while the workers went down unemployment insurance. I don't think 838 00:47:53,920 --> 00:47:57,120 Speaker 1: there was ever, like completely clear what the vision was, 839 00:47:57,239 --> 00:47:59,279 Speaker 1: and I think that's sort of made it a bit 840 00:47:59,320 --> 00:48:03,000 Speaker 1: hard to evaluate the success of the program, because if 841 00:48:03,000 --> 00:48:06,719 Speaker 1: it's from a sort of payrolls perspective, then you know, 842 00:48:06,719 --> 00:48:10,239 Speaker 1: obviously unemployment is still sky high. If it's about just 843 00:48:10,560 --> 00:48:12,719 Speaker 1: the business is being in a position to operate when 844 00:48:12,719 --> 00:48:15,600 Speaker 1: the virus goes away, maybe it's better. Although a lot 845 00:48:15,640 --> 00:48:19,640 Speaker 1: of businesses unfortunately are closing permanently, So without a clear 846 00:48:19,719 --> 00:48:21,920 Speaker 1: goal of the program, it's a little bit hard to 847 00:48:21,960 --> 00:48:23,920 Speaker 1: know whether in the end it will have been successful. 848 00:48:24,840 --> 00:48:26,920 Speaker 1: Um oh, well, you know what. The other thing I thought, 849 00:48:27,160 --> 00:48:29,239 Speaker 1: The thing I thought was really interesting, which had nothing 850 00:48:29,280 --> 00:48:31,000 Speaker 1: to do with the virus does the whole idea of 851 00:48:32,000 --> 00:48:36,680 Speaker 1: using yeah tokens, but also using all the arcade games 852 00:48:36,680 --> 00:48:40,080 Speaker 1: and bowling which you have really you know, low cost 853 00:48:40,120 --> 00:48:43,200 Speaker 1: of goods sold as a potential loss leader, being able 854 00:48:43,239 --> 00:48:45,400 Speaker 1: to change the price on that to bring people in 855 00:48:45,480 --> 00:48:47,560 Speaker 1: for the food. I thought that was super interesting and 856 00:48:47,640 --> 00:48:49,759 Speaker 1: something I've never thought about before, with these sort of 857 00:48:50,320 --> 00:48:55,080 Speaker 1: mixed mixed restaurants that involve amusements and food. Yeah. Absolutely, 858 00:48:55,120 --> 00:48:57,440 Speaker 1: I mean so, I know, Adam was quite positive on 859 00:48:57,480 --> 00:49:00,120 Speaker 1: the restaurant business model in the future. He said that 860 00:49:00,160 --> 00:49:02,360 Speaker 1: once the virus goes away, he sees this as a 861 00:49:02,400 --> 00:49:05,399 Speaker 1: sort of long term trend that is staying with us 862 00:49:05,960 --> 00:49:09,200 Speaker 1: for the foreseeable future. But I do think one thing 863 00:49:09,239 --> 00:49:12,719 Speaker 1: that's interesting from the coronavirus crisis is that you are 864 00:49:12,800 --> 00:49:17,520 Speaker 1: seeing some restaurants and businesses make these really creative tweaks 865 00:49:17,560 --> 00:49:21,200 Speaker 1: to their existing business model. So that's that's an interesting 866 00:49:21,200 --> 00:49:23,399 Speaker 1: one to watch. And you know, in places like New York, 867 00:49:23,440 --> 00:49:26,319 Speaker 1: I know there's discussions now about whether or not things 868 00:49:26,320 --> 00:49:28,719 Speaker 1: will ever go back to normal. People want to keep 869 00:49:28,800 --> 00:49:33,200 Speaker 1: the option of getting things like takeaway cocktails stuff like that, 870 00:49:34,080 --> 00:49:37,480 Speaker 1: So you wonder whether or not these kind of tweaks 871 00:49:37,480 --> 00:49:39,919 Speaker 1: are are going to be sticking around for a long time. 872 00:49:41,120 --> 00:49:43,040 Speaker 1: Totally there. We should have asked about that because, like 873 00:49:43,080 --> 00:49:46,560 Speaker 1: I meant on the decade Instagram, there's like they sell 874 00:49:46,640 --> 00:49:50,920 Speaker 1: these cocktail pertions and they also sell these giant pretzels 875 00:49:50,960 --> 00:49:53,239 Speaker 1: that they were going for takeout, So all kinds of 876 00:49:53,280 --> 00:49:55,080 Speaker 1: interesting questions could have also asked about what do you 877 00:49:55,080 --> 00:49:58,400 Speaker 1: think about the sort of third party delivery companies? Anyway, 878 00:49:58,520 --> 00:50:02,719 Speaker 1: plenty to talk about next time, next time. All right, Uh, 879 00:50:02,920 --> 00:50:05,960 Speaker 1: this has been another episode of the All Thoughts podcast. 880 00:50:06,040 --> 00:50:08,879 Speaker 1: I'm Tracy Alloway. You can follow me on Twitter at 881 00:50:08,920 --> 00:50:12,640 Speaker 1: Tracy Alloway and I'm Joe wisn't Thal. You can follow 882 00:50:12,680 --> 00:50:15,520 Speaker 1: me on Twitter at the Stalwart. And you should follow 883 00:50:15,560 --> 00:50:21,759 Speaker 1: our guest on Twitter, Adams me Great follow found interesting information. 884 00:50:22,120 --> 00:50:25,920 Speaker 1: He's at Modeled Behavior. Follow him on Twitter. Follow our 885 00:50:25,960 --> 00:50:29,960 Speaker 1: producer on Twitter, Laura Carlton at Laura M. Carlson. Follow 886 00:50:29,960 --> 00:50:33,320 Speaker 1: the Bloomberg head of podcast, Francesca Levi at Francesca Today, 887 00:50:33,800 --> 00:50:36,840 Speaker 1: and check out all of our podcasts at Bloomberg onto 888 00:50:36,880 --> 00:51:08,360 Speaker 1: the handle at podcasts. Thanks for listening to e