Richie: [00:00:03] Hey, it’s Richie Siegel, the founder of Loose Threads. I hope you, your family and your team are hanging in there during these challenging times. We’re running an audience survey right now that you can take at LooseThreads.com/survey, which will help us offer better solutions to your most pressing business problems.

Richie: In our new podcast series Offense vs. Defense we’re talking with leaders across the consumer economy about how they’re managing their business, balancing playing offense with playing defense, about cutting back as much as possible to preserve cash. Offense means making calculated investments and taking risks to put your company in a stronger position. Just like in sports, a team can’t win by only playing defense. And the companies that can weather this storm and make opportunistic investments will emerge in a stronger position than where they entered. 

Richie: This week we spoke with Eliza Blank, founder of The Sill, a modern plant company. While people are spending more time in their homes the crisis has affected The Sill in a number of ways. Eliza and I spoke about how the crisis unfolded from her point of view, how the brand is approaching advertising and customer communication, and what changes she made will remain once life is back to normal.  

Richie: [00:01:05] Here’s how Eliza and her team have managed the crisis so far.  

Eliza: [00:01:11] We started to feel the impact actually quite early. I think we have a lot of just generally concerned citizens in our office. I think everyone has been pretty plugged in to what was going on from a global level and had been tracking that. So I would say even before it really impacted us as a business, my team was definitely very hyper-aware of what was going on, on a global level. And so there was some low-level anxiety that was already bubbling up before it ever hit New York, which is where we’re based. 

Eliza: All that being said, first and foremost, we started having conversations about how to best plan ahead for the situation, probably starting in early March. And the reason for that is that we run retail stores, so we’re omnichannel and we have five retail stores. We have one in L.A., one in San Francisco and three in New York City. And so, of course, that is an environment where our team is being consistently exposed to our customers who are coming in off the street, from all over. And so that was sort of the initiation to conversations of, OK, “this can impact our business and how?” 

Eliza: I think if we didn’t have physical retail stores, the conversations probably wouldn’t have happened so quickly and so early. So in a way, I’m actually glad that we had that because it did enable us to start a strategic conversation early. That then unfolded in early March, we were already practicing a lot of health and safety measures by March 9th and our corporate team went to work from home by March 16th. All of our stores in every market closed. And then by the end of March, actually one of our distribution centers closed as well. So it was a bit of a roller coaster in March and we had to make a lot of really quick decisions. The hardest of which was how to really plan for our team. And we ended up having to reduce our headcount by 33, which is an incredibly challenging decision to make and very emotional.

Richie: [00:03:25] It seems like you’re in somewhat of a unique position because it’s not like your supply chain is out of the country and so you almost felt that on the retail front first, it sounds like. Is that correct?  

Eliza: [00:03:38] Yeah. No, that’s accurate. I mean, plants are grown domestically and we haven’t had any major disruption to our supply chain on that front. So we do feel very lucky and fortunate. I think it would be tremendously more difficult if we were simultaneously having supply chain issues and that’s not to say that we aren’t having some supply chain issues. Right. So having consumer behavior changed so dramatically within a week puts a strain on your supply chain, no matter how secure your supply chain is. But it’s not as if we have boatloads of things coming in from overseas.  

Richie: [00:04:13] When this first started unfolding in those early weeks of March, did you have thoughts of, is this is going to be good for us or is this going to be bad? Or was it like, okay, we make stuff for the home, people are going to be really stuck at home now.

Eliza: [00:04:27] Not in the midst of everything, no, I don’t think so. I think maybe in retrospect, even where I sit today versus where I was in March from a headspace perspective, I can appreciate, all right people are at home and so they’re willing to invest in a home. But that first week in March, our sales went down and that was really scary for us. Since then, our online sales have picked up and certainly we’re seeing a lot of interest in having houseplants right now, but we had no idea of what to expect. 

Eliza: You know, we didn’t know how many people were going to get sick. We didn’t know how long the city was going to be shut down. We didn’t know what was going to happen in the markets, more broadly speaking from a macro perspective. So I think we were just very cautious and not overly optimistic. There wasn’t a point in time where I was like, “oh, this is going to definitely sink the business,” certainly not that early. But, I would say we weren’t thinking like, “oh, this is going to be good for us.” 

Richie: [00:05:19] I remember what feels like a year ago now, all the retail stores saying, we’ll be closed for two weeks and we’ll be back or paying our team during that time.  

Eliza: [00:05:25] Oh, yeah. I mean, looking back on that. How nieve. I was definitely in that camp. We had to go back out to our retail team more than once with communication around how we were handling the situation because we just didn’t know. And I don’t feel like we were prepared well by the authorities, of which there are many but in terms of what to expect. And so we were definitely communicating initially that this was going to be a two-week situation and we’ll reevaluate and we can’t wait to welcome everyone back, but that was not how that played out.

Richie: I’m curious to talk about the warehouse a little bit, you said one of your distribution centers went down. It sounds like you have more than one. Did you ever think that would happen? And are you now glad that you have more than one? 

Eliza: [00:06:17] That did blindside us. I understood that retail would have to close, that those who could work from home would be encouraged to do so. But the idea that our distribution centers would be mandated to close, that didn’t occur to me at the onset of this, mostly because these are controlled facilities by us. There’s not people coming in and out and they are large spaces, at least in my opinion, you know, we can run our facilities in a very safe manner.  

Richie: [00:06:46] It is yours, right? It’s not a third party?

Eliza: [00:06:48] Correct. It’s our team. It’s us cleaning the space. And certainly, we had to put in a lot of different rules and processes around that in order to make everyone as safe as possible. And we were able to do that really well on the East Coast and we just didn’t have the opportunity to do that on the West Coast where it wasn’t up to us. So that was challenging. And we continue to be challenged by that today. We’re still not operating that facility. Am I glad that we at least have one? Yes, absolutely. Sure thing. That’s what’s keeping us alive right now, but it’s not without its challenges. It’s definitely challenged us to think differently about the business and it’s an opportunity to just question your assumptions and to find other solutions to the problems that you have.

Richie: [00:07:46]  In the beginning a lot of leaders are really good at thinking months, years in advance, etc. Throughout March, are you thinking hours in advance or days in advance? And I’m curious how that kind of outlook is changed to this point?  

Eliza: [00:07:52] We were living every day, one day at a time and we were working around the clock. I mean, my team hasn’t pulled together and rallied together like that probably ever. And in some ways, you know, it built a lot of trust. It really solidified my team in some ways and so for that, I’m thankful. Now we’re definitely looking further out than we were in March. March was let’s be thoughtful. But we have no other choice but to be somewhat reactive because the information is just coming at us so quickly and it’s new and there’s no playbook for it. You know, this isn’t just like, oh, let me go hop on the phone with someone else who’s been through this. Nobody had been through it. But I think, again, what makes me incredibly proud of the company that my team and I have built is we had such a strong foundation. It wasn’t that we had nowhere to start. 

Eliza: You know, we were really able to use our value system and our guiding principles as a company to help us make the right decisions. So we’re still looking at our three-year plan, as most companies do. But I have more certainty now about like how the business will perform, but still not a ton of certainty about whether we’re gonna go back to the office. So it just sort of depends on what it is that we’re looking at.  

Richie: [00:09:11] So as this was all happening, obviously everyone’s looking at making cuts, pulling back where they can. Were there places where you said we actually should potentially go invest here or start to experiment here in terms of just balancing how much you cut back versus how much you continue to put forward?  

Eliza: [00:09:29] Invest is a funny word. I would say yes in terms of our time. I think we’ve been incredibly tight, honestly, with our budgets. We’re not like, hey, we’re going to like double down on advertising right now. That is not what we’re doing at this company. But I would say that we are investing more energy into things like product development and partnerships and things that our team is really good at. So I would say part of our evaluation is what is The Sill really, really good at and how do we continue to put more time and energy there and maybe actually spend less time experimenting and testing outside of our core because we don’t have the luxury right now to fail fast as we would, you know, a year ago.

Richie: [00:10:16]  In terms of customers and communication are there things you wish they knew right now that they don’t, just in terms of what it’s like on the other side?  

Eliza: [00:10:23] I would say we are lucky in that 99% of our customers have been understanding, 1% of our customers I wish I could give them a lesson in what it’s actually like to run a small company through a global crisis. But I resist because that’s not the best use of my time and energy. We’ve otherwise been relatively transparent with our customers in the ways in which we think they’re interested to understand what’s going on. I don’t think it’s valuable to them to understand the granularity that we get into on a day to day basis but I do think it’s important for them to understand what our intentions are as a business and what we’re actually able to deliver against in this moment might not line up in the same way as it would have six months ago.  

Richie: [00:11:11] What do you wish that you knew at the beginning of this happening kind of in early March that you know now?  

Eliza: [00:11:17] I think it would have benefited me to understand how long this was going to impact us. I wouldn’t say I regret, but I think it’s too bad that there was sort of this like early precedent set that retail was closed for two weeks everything was going to go back to normal. I think that is the thing that I look back on and think, wow, that was so naive of all of us. 

Richie: Where do you think that came from? 

Eliza: I don’t honestly know. You know, when we were evaluating what to do in the moment, we knew we didn’t want to just wait until the mayor and the governor put a stake in the ground. We wanted to make the decision for ourselves in terms of what was best for the company, the employees, the community, etc. And we didn’t have a ton of confidence at that point in time in New York being able to make the appropriate call. But we were also looking to our peers to see what they were doing. And all I can recall is that most of our peer set who were bigger than us were closing for two weeks. Now, On the other hand, Patagonia just shut it all down.  

Eliza: [00:12:17] And that’s a bold move that I really admire. But certainly, we can’t survive a full shutdown like Patagonia can. But the two weeks were honestly a lot of people in denial because they knew that if it was more than two weeks, we were gonna have really tough decisions to make and that it was going to change the trajectory of our companies. And so, you know, maybe it was just like, I’m going to get on this two-week bandwagon, hold my breath and see what happens. But in retrospect, that wasn’t the right decision to make or it just wasn’t aligned with what was actually happening in the world.  

Richie: [00:12:51] What is your perspective on where retail goes, specific to your business, in the future, given all this?  

Eliza: [00:12:57] We look forward to reopening. We’re still excited about brick and mortar retail. It hasn’t changed our opinion on that. We did really well in brick and mortar before, we anticipate doing really well after this. I think it absolutely changes what the experience looks like because I think people will default, when they can, to shopping online if they’re comfortable doing that. We’re already putting plans in place for curbside pick up and things of that nature. But I think ultimately for us, what is so important to our brand is the community and the humanity of connecting over plants. And so I don’t think brick and mortar goes away. But I do think it evolves.  

Richie: [00:13:41] For launching new products and product development, is that something new or has that process been impacted by all of this? Are you saying, look, let’s actually speed this up? And how do you think about newness?  

Eliza: [00:13:51] I guess it’s certainly impacted the process. I mean, it’s very hard to evaluate new products when you are remote from your entire team. So practically speaking, it just requires a lot more stuff to go to a lot more places.  And, you know, we’re not actively producing photoshoots or things like that and don’t anticipate we will anytime soon. So we’ve had to come up with a lot of workarounds and that has been new and challenging. But I think it’s also proven that we can do things in a scrappy way that we’ve sort of moved away from or forgotten because we’ve had access to capital that allows for bigger productions.  

Eliza: [00:14:29] But we continue to see the value that we bring to our customers in the product itself, even if it’s a different process. We’re continuing to rely on bringing newness to the market.  

Richie: [00:14:41] What’s been the cheapest and the most expensive lesson you’ve learned during this time?  

Eliza: [00:14:45] I will say, I have a lot of respect and sort of a new perspective on our legal team. I have spent more time on the phone with attorneys this past six to eight weeks than I would normally even in the middle of a fundraise and they’ve been incredibly helpful. Like, I actually have nothing but great things to say about our counsel right now. And they have really helped guide us through a number of issues that would have been challenging if we didn’t have access to them. So I know when I get the bill, I’ll feel different, but right now, that has been probably the investment worth making.  

Richie: [00:15:28] In terms of your own network and turning to people to lean on, you mentioned before no one has gone through this or there is no playbook. Is it a time where you as a leader have felt like there are people to turn to? Whether it is to share knowledge or commiserate with? Or is it that people don’t necessarily have much to share at this point because everyone is just in their own worlds a little bit?

Eliza: [00:15:56] Look, I think it’s a little bit of both. I would say probably in those early four weeks of March or like leading into April, I did spend a lot of time on the phone with other founders and CEOs. Again, more so than I would normally by a long shot. And I didn’t anticipate anyone was going have the answer. But it helped to compare notes and helped to compare philosophy’s, even if it was only to validate that I felt certain in the decision I made, even though it was not the decision someone else made and that’s fine because different companies do have different needs. 

Eliza: But I was definitely picking up the phone and calling a lot of people, even if it was just to have a moment of pause and just say like, man, this is hard and to have someone else be like, hey, I know it’s really hard. Because founders don’t get that enough as it is and certainly, the quality of this experience is unique in that at least in some ways, we are all going through it together. 

Eliza: I think founders tend to have tunnel vision and they’ll pick up their head when they identify a problem, they’ll call someone else or maybe have that problem and discuss that problem. But there are these discrete interactions and you very rarely have the exact same problem as everyone else at the exact same time because our businesses are so different. And even if you were a 100 million dollar business, you still have the same problem. 

Richie: [00:17:21] With all the changes you’ve made during this time what do you think will stay and stick with you? Life resumes back to normal over the next year or so etc. what do you think stays the same?  

Eliza: [00:17:29] Work from home. I think just having general broad flexibility there. I mean, I can’t say with certainty exactly what our policies will look like, but they’re definitely going to be more flexible than they were the previous situation. I actually think looking back, that was one of my biggest concerns, how is my team going to be productive in a work from home situation.  

Eliza: [00:17:50] I never anticipated running a company that had an entirely remote workforce. We as a company have remote parts of the company because we have distribution centers and we have stores. But the corporate team always sat together, literally physically together in one room. And I never would have thought that we would transition as well as we have and that we’d be as productive as we’ve been and that’s changed my mind a lot. 

Eliza: [00:18:14] And in some ways that’s exciting because I think it does open up other opportunities about where you can hire from and just generally the type of lifestyle your team can have. And I hope that it lends itself to a better lifestyle than exclusively having every single person in the office every single day.  

Richie: [00:18:35] Why do you think remote felt like such a big thing that people didn’t want, by and large, we’re so opposed to. When now it feels pretty normal, I guess.  

Eliza: [00:18:46] Well, I will say this. A lot of my team would love to go back to an office right now. Like this is a group of New Yorkers, many of which are living in three hundred square feet right now. That’s totally normal, right? Like everyone is living in small spaces. So I think the natural resistance is nobody has an actual work from home setup. And even if given a nominal budget from the company to do that, it doesn’t change the fact that rent in New York is the way that it is. 

Eliza: And so it doesn’t provide for the most optimal setup. And I still believe deeply that in-person exchanges are the best because there’s just less room for misinterpretation and there’s sort of the practicality of being in a centralized office that gives everybody equal footing because it means that someone who is two years out of school can have the same work set-up as someone who is an executive because that just won’t exist at home in the same way. But I still say that we’re changing our minds and we’re finding ways to level that playing field so people can comfortably work from home no matter what role they’re in. 

Richie: [00:19:52] And in terms of the next few months, where are your priorities? And what are you starting to focus on now that we’re through March and April and kind of into the summer?  

Eliza: [00:20:01] In some ways, I don’t want to say it’s a return to normal, but we are continuing our 2020 plan very much the same way we would have anticipated doing it, had we not run into this. That in many ways hasn’t changed at all. We’re obviously trying to work through what happens with retail and some of that is a hurry up and wait situation. But we’re just trying to carry on as best we can at this point.  

Richie: [00:20:28] A good amount of leaders tend to be optimistic, in terms of like let’s look at all things that could go right and somewhat not focus on the things that could go wrong. Do you feel like you’re looking at risk differently now than you did two months ago? I don’t know if it means being more conservative in certain areas or trying to look around where things could go bad? 

Eliza: [00:20:51] For me personally, I don’t think it’s changed only because I’ve never been. One of those founder CEOs, I bootstrapped this business for five years. I haven’t always had venture capital and quite honestly, you know, in the scheme of things, I haven’t raised enough to just like kick back and relax. So I’ve always been playing two scenarios and that’s an upside and downside scenario. And this has shifted our scenarios, but it hasn’t changed the fact that that’s always the way that I’ve looked at the business. So if anything, maybe it just leveled the playing field. Slight. But yeah, for me, it hasn’t really changed my philosophy around that because I’ve always been a little bit more of a pragmatic, venture-backed entrepreneur.

Richie: [00:21:29] I guess if you’re used to losing 10 million dollars a month, this is quite different than if you’re not used to doing that.  

Eliza: [00:21:35] Yeah. And they’re always going to have their own unique perspective based on what they know about their business. Having had this business for eight years, we just know more about who we are, who our customer is, and how we can get through this. And we’ve also been through a lot. Not to say that anything comes close to this situation, but we’ve certainly had our challenges and had our pivots and had our moments. And I do think companies who’ve already been through that, whatever that means to them, have a much stronger shot at surviving. 

Eliza: You know, what I feel badly for is those who just got started or maybe were relying on that next fundraise in this exact moment to keep going. And the fact is they may not get it. And it doesn’t mean that they don’t have a good business or a good idea or haven’t built something quite remarkable. It’s just bad timing. And that’s too bad. And I feel very lucky that our business has been around long enough to help us get through this.  

Richie: [00:22:35] Awesome. Thank you so much for doing this. 

Eliza: [00:22:36] Thanks for inviting me.