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INNOVATION ECONOMY

For Mass. businesses, reopening worries and glimmers of hope

100 company owners and senior leaders weigh in on the way forward

Ramping up economic activity raises many complex issues for business owners.
Ramping up economic activity raises many complex issues for business owners.Michael Dwyer/Associated Press

For many Massachusetts businesses, the theme song for the rest of 2020 will be “Stayin’ Alive.”

They’ll have to hustle to revive their revenues as the state carefully proceeds through its four-phase reopening plan. But beyond that, I wanted to understand what business people are worried about — and whether they might glimpse any signs of hope. I was also curious about what kinds of cuts they’ve made during the pandemic.

So I fielded a survey from May 20 to 26 and heard from 100 business owners and senior leaders in the state, representing a wide range of industries. Respondents included interior designers, hardware store owners, makers of light fixtures, coffee roasters, robot manufacturers, video game designers, and vaccine startups. The largest slice of respondents, just over one-third, came from the technology sector, and the vast majority, 74 percent, represented companies with fewer than 50 employees.

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I asked about three things: how they’ve responded to the crisis thus far, what their biggest concerns are, and whether they see any early indicators that make them optimistic about the remainder of the year.

So far

The bulk of respondents (78 percent) said they’ve responded to closures or decreased revenues by cutting costs on things such as marketing, software, rent, and spending on outside contractors and consultants. Twenty percent said they have laid off workers, and 13 percent have resorted to temporary furloughs. Just over two-thirds of respondents had received government grants or loans, like those offered through the Small Business Administration’s Paycheck Protection Program. But 10 percent of respondents said they had applied but not gotten any money.

Top concerns

I asked respondents to share their biggest concerns from now to Sept. 1. Three that rose to the top: employees’ safety, a potential resurgence of COVID-19 cases in the fall, and customers’ willingness to spend. Some sample worries:

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“Getting projects back into the pipeline will take time, and cash flow may be a problem,” wrote Dan Steger, a West Roxbury architect.

Similarly, Gustavo Fontana, who runs a design studio with 10 employees around the world, said his top concern is “meeting payroll for all my employees.”

“Getting rapid testing for everyone” is a key concern for Eric Groves of the Boston startup Alignable, which runs a network for small-business people.

Karen Casson Wheatley, who runs three hardware stores in Eastern Massachusetts, worries about worker fatigue and supply chain breakdowns.

An anonymous respondent from the tech sector included “authoritarianism” and “US losing global dominance” among the concerns. Another anonymous respondent, one in professional services, asked, “How can business get back to ‘normal’ when life/family/health/day-to-day still cannot?”

An advertising industry respondent worries about “clients under contracts not paying invoices.”

Jaime van Schyndel of the café chain and coffee roaster Barismo wrote: “I worry that an employee will contract COVID, or that by reopening we are putting people at risk. While we have pivoted from offices and cafes to home delivery with success, and that feels secure, our cafe reopening for take-out is this week. I feel the most anxiety about this, because I don’t want anyone to get ill due to that decision. Until the health issues resolve, every week will be a new financial challenge of operating under more shutdowns and bad news stories around the country.”

Stacey Kraft of Flair Boston, a Back Bay bridal boutique, is anxious about “being able to open my store safely, and keep my employees safe as well as my customers. I do not want [them] to lose the special experience of coming into my store and feeling good about themselves.”

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“Maintaining a supportive team dynamic is the immediate concern,” wrote Ian Campbell of Nucleus Research, a Boston market research company. “Employees can communicate remotely, but the casual interactions are what generate new business ideas.”

Brian DeVasto, owner of Tatnuck Pet Supply in Worcester, wrote: “Turn the COVID phrase ‘1 infects 3, 3 infect 10, 10 infect 100’ on its ear and you have one business closing its doors, which affects three other businesses, which affects 100 other businesses . . . The long-term effects may likely outweigh the impact of the virus.”

Seth Sivak, founder of the video game company Proletariat Inc., worries about “consumer demand. Thirty percent unemployment is a new era we have never seen.”

“What do we do with our office, since no one is there and it’s therefore useless?” said John Garvey, president of the Springfield communications firm GCAI.

“My biggest concern is that the government opens up the economy quickly, so that we don’t go into a massive long-term recession that’s difficult to recover from,” wrote Steven Rothschild, chief executive of Access Fixtures, a lighting manufacturer in Worcester.

The chief executive of a Cambridge software startup who requested anonymity said she worries about the “impact on our team due to the stress caused by the pandemic itself, quarantine/inability to visit friends and even care for extended family, working from home while teaching school, etc. I’m really worried about burn out. I’ve been pushing people to take time off, but they don’t have somewhere to go.”

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“We have reopened our labs, albeit in limited capacity,” wrote Michael Schrader, chief executive of the Cambridge vaccines startup Vaxess. “What happens if one person has a confirmed COVID infection? Do we have to shut everything back down?”

Signs of hope

The majority of respondents (81 percent) are seeing at least a few glimmers of light on the horizon.

Steger, the architect, wrote that “general contractors are reaching out to me with clients who have renovation projects. It appears there is pent-up demand that is going to be released soon.”

“Customers are starting to reengage in conversations either due to their seeing ‘light at the end of the tunnel’ and/or because they are setting into the new normal of remote working,” wrote Greg Garson of the consulting firm Sibilance.

“Pipeline for 2021 looks good,” said Matthew Crowley, chief executive of Vesper Mems, a Boston startup that makes microphones for smartphones and other devices. “2020 is going to be flat.”

“Statistics in European countries such Spain or Italy tell us that the virus can be contained,” wrote Pedro Bados, chief executive of the IT services firm Nextthink. “Once the health crisis will be over, the economic crisis can’t last very long. The US will follow a similar pattern.”

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“Responsible countries are starting to recover,” wrote Ben Waber, president of the Boston analytics startup Humanyze. Customers in those countries “will likely make up more of our business not just this year but in the future as well.”

DeVasto of Tatnuck Pet supply wrote: “I believe people are seeing the states’ own data and seeing that, despite the media’s attempt to keep the fear going for some it is a very deadly disease, for others, not so much; certainly not risky enough to destroy the economy, and possibly the country itself.”

“We’re in one of the fortunate industries where our business has grown at levels we’ve never experienced,” wrote Mark Ethier of iZotope, a Cambridge company that makes music software. Why? “People at home are getting back to making music or taking up a new hobby,” Ethier explained, and on the professional production side, like movies and television, “people are consuming more media than ever.”

Software entrepreneur Grant Deken said he is optimistic about “the potential to hire talent we may not have been able to get previously.”

“The recession is going to be incredibly deep,” wrote Dan O’Malley, chief executive of the financial services startup Numerated. “But when you deconstruct the numbers, the impact is split — certain industries are nearly fully shut down (travel, hospitality) while for the rest, this looks like a standard recession, which we were due for. And when you look at how innovation economy companies are helping reinvent models and industries — and seeing growth in the process — it’s possible to be optimistic about how quickly we could rebuild out of the recession.”

“If there is a solution — even a preliminary one — between now and the end of the year, I think the economy can pull through without a prolonged recession,” wrote Khaled Kteily, chief executive of Legacy, a fertility startup in Cambridge.

Ian Lamont, president of i30 Media, a Newton publisher of how-to guides, said he’s encouraged that “the state government seems on top of things, even if the feds aren’t.”

Schrader at Vaxess, the vaccines company, wrote that “the only way reopening works is if we all work together — and so far, things look good on that front.”


Scott Kirsner can be reached at kirsner@pobox.com. Follow him on Twitter @ScottKirsner