Spiceology CEO Chip Overstreet was getting ready last year to welcome five new employees to the staff of his Spokane-based spice-and-rub company that specializes in finding new and exciting flavors.
Then it hit. On March 16, 2020, Gov. Jay Inslee ordered nonessential businesses to close because of the coronavirus pandemic.
Overstreet responded by immediately laying off four of the five new employees and 25% of his workforce as his business model, which was “maniacally focused” to sell directly to restaurant chefs, just got pummeled.
“There is no meaningful conversation we could have about better flavors with a chef … on March 16. That is not where you want to be,” Overstreet said. “Totally tone deaf.”
Overstreet faced the same dilemma almost every Spokane-area business owner had to confront : What to do when the business world you evolved to exploit suddenly changed or ceased to exist.
“We had to dramatically pivot our resources,” Overstreet said. “We had to pivot to consumers and we had to do it overnight.”
Overstreet’s gambit worked. Turns out a lot of workers, who were now stuck at home, were receptive to new ideas for cooking new meals.
“Restaurants went into an immediate tailspin, but consumers were eating at home and looking for new, innovative ways to have fun in the kitchen,” he said. “Kids, for the first time, were taking part in meal preparation.
“Mothers were looking for things they could do that could engage their whole families,” Overstreet continued. “It was our highest gross year ever. And, we are projecting to grow even faster in 2021.”
The pandemic brutalized the hotel and hospitality businesses and those brick-and-mortar companies that were struggling to attract in-person shoppers even before social distancing and occupancy limits hurt them even further.
Those businesses with an online presence saw what had been a minor convenience grow into a full-fledged focus as the pandemic pushed most commerce into a virtual setting, said Grant Forsyth, chief economist for Avista Corp.
“There is some academic literature coming out on the impacts of different sectors of the economy,” Forsyth said. “Businesses that had an online presence, versus businesses that had no online presence, seemed to weather this better.”
National companies that catered to home delivery-based commerce exploded. UPS, FedEx, Amazon and other online retailers suddenly found home-based consumers who didn’t want or could not shop at brick-and-mortar stores.
“Really, this thing has essentially accelerated a trend that was already happening,” Forsyth said. “But, it pushed it even faster.”
Tag, you’re it
A decade ago, Craig Tadlock had a vision that, at some point, businesses would employ an electronic tagging system that could allow consumers to conduct touchless transactions, among other things.
He built his company around that idea. He moved it to Spokane from Seattle in 2018. While GoToTags grew prior to 2020, Tadlock’s technology suddenly became front and center in the war against the pandemic.
Unlike some companies, Tadlock’s manufacturers in China gave him early warning of the disruptions about to come. So, he pivoted his business to selling masks.
“It took us about 48 hours … where pretty much everybody was working at home,” he said. “We had to figure out how to work safe and cleaner, just like everybody else.”
GoToTags used its supply-chain contacts to bring in hundreds of thousands of masks, which they sold in Spokane and Yakima.
“It kept my employees receiving a paycheck and medical insurance,” Tadlock said. “That was crazy. Selling masks was way out of hand. The reason that no one could get PPE was not a manufacturing problem. It was a shipping problem.”
At one point, Tadlock looked into renting a jet to fly in the supplies to Spokane. While it didn’t pan out, the pandemic economy shifted focus back to GoToTag’s wheelhouse.
“Then the real madness started,” he said. “We thought masks were crazy. Then the whole world all of the sudden became aware if they were touching things or not. People became immediately aware of what they were touching.”
Enter a technology that creates a digital reality around any object that uses an electronic tag that can be read from an iPhone that can either keep track of that item or allow customers to perform touchless transactions.
Tadlock said business owners used to walk over to a shelf to take a list of inventory.
“But when everyone was working at home, that couldn’t happen anymore,” he said. “They were looking for systems that could tell them what they had, what the movement was, their assets, inventory and machinery.
“COVID brought home the need to modernize the whole chain,” Tadlock continued. “I feel like the world drove into our lane.”
For instance, ExxonMobil had a plan to develop by 2024 a system by which customers could create an account with their credit card and use an electronic scanner at a pump that charged their card without having to touch the gas pump.
“Now that the gas pump is connected to the internet,” he said. “We delivered that last year. That’s one of many examples of a Fortune 10 company that reprioritized a huge initiative of theirs because of COVID.”
Companies like Walmart will have a scannable tag on every product sold in the next four years, he said.
“Think of how many products that is,” he said.
Asked if he had a contract to do that work, Tadlock said he has a nondisclosure agreement with several companies. But he said the first-quarter numbers for his company were “back to ridiculous.”
“Even if we service the existing customers, we are going to experience pretty significant growth,” he said. “We are definitely unable to meet existing demand. I’m super bullish on our future more than I ever have been.”
The market is justifying Tadlock’s vision from 2010. Now he needs to ramp up production and staff to meet all the requests for his technology.
“It’s unfortunate that COVID drove that,” he said. “That wasn’t the plan. I just thought it would be a little more incremental.”
Remote work tidal wave
The same week the pandemic was declared, Vega Cloud CEO Kris Bliesner was set to meet in San Francisco with a venture capitalist to potentially provide a new source of funding for his Liberty Lake-based startup that assists businesses with managing public cloud infrastructure.
The capitalist canceled the meeting.
“He didn’t even call me back,” Bliesner said. The investor “literally, like, ghosted me.”
After getting over the initial shock of the business turmoil caused by the pandemic, companies all of a sudden started sending employees home to work remotely.
“People didn’t have the capabilities to have a remote workforce,” Bliesner said. “And, suddenly they have one.”
The transformation caused a run on everything from desks to computers as basements and bedrooms became functioning offices.
Demand exploded for companies that could provide solutions like Vega Cloud.
“It’s not enough just to have Zoom,” he said. “We have to rethink how we work remotely. There are all kinds of new data security issues to deal with.”
Before 2020, companies could manage their security at a single location: the office. But now offices are everywhere.
“Now you have all this corporate data at home, on computers you may or may not even own,” Bliesner said.
Company managers already have told Bliesner they probably will not rush back to office-based work, he said. He expects more of a hybrid approach, where they work one or two days in the office.
“We as a society, and businesses that serve businesses, need to figure out how to make (employees) more productive at home,” Bliesner said. “That’s exciting, figuring out how that’s going to work. There is a lot of change coming in that area.”
The company co-founder said he expects investment in cloud-based companies to grow by the tens of billions of dollars during the next couple years.
“That’s a whole lot of growth,” Bliesner said. “A lot of that is fueled by people pushing to the cloud … because they can’t have people on-site. We are excited. It’s going to drive a lot of adoption of cloud technologies.”
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