Category Archives: Business

Welcome to the ‘Hotel Seattle’

And you were thinking about moving west…

WSJ 6/22/2020

Seattle’s City Council prides itself on being an early adopter of new business mandates. Seattle was the first major U.S. city to adopt a $15 minimum wage and one of the first to require businesses to provide paid sick leave. The City Council achieved another first last week, when it unanimously enacted an ordinance requiring food-delivery app companies to provide gig workers “premium pay” for deliveries in the city, on top of their usual compensation, and prohibiting the companies from raising fees or leaving the city in response, even if the new rule causes them to lose money.

Instead of erecting a wall to keep people out, Seattle is attempting to create a legal wall to keep businesses in.

The ordinance was first suggested by Working Washington, a Seattle labor organization backed by the Service Employees International Union. On-demand delivery workers in the city—think Instacart shoppers and DoorDash couriers—must be paid a premium of $2.50 a stop in the city for the duration of the Covid-19 emergency declared by Mayor Jenny Durkan.

With thousands of homebound Seattle residents in need of grocery deliveries, the costs add up. The City Council expects the companies to eat it: The ordinance states that gig companies may not “reduce or otherwise modify the areas in the City that are served,” “reduce a gig worker’s compensation,” or “add customer charges to online orders for delivery of groceries” in response to the new premium. If a company violates the ordinance, the city can pursue it with penalties beyond the city limits.

To understand how unprecedented this is, imagine if Seattle’s $15 minimum-wage law restricted restaurants from closing their doors or adjusting their prices in response, effectively forcing them to continue operating at a loss.

If that sounds illegal, it probably is. In a detailed memo sent in May to Mayor Durkan, the trade group TechNet described how the ordinance would violate the Takings Clause of the Fifth Amendment.  By “forcing a business to continue unprofitable operations, the City would be extracting payments from an unwilling person and thus taking private property without any—let alone just—compensation.”

That isn’t the only problem. The ordinance may also thwart the will of Washington state voters, who in 2018 approved an initiative under which “a local governmental entity may not impose or collect any tax, fee, or other assessment on groceries.” Charges and exactions on the transportation of groceries were specifically precluded.

Seattle’s City Council has a history of legally questionable legislation. In 2017 it passed a “wealth tax” on the income of wealthy households, even though the city attorney had advised that it would be illegal under state law. The courts agreed, and in April the state Supreme Court denied the city’s bid to review the decision. The city also recently walked away from a long legal dispute over a 2015 law that gave Uber and Lyft drivers, who use apps provided by the companies to work as independent contractors, the right to bargain collectively.

Seattle may believe it has the budget to back another costly legal fight, but other municipalities—whose budgets are strained as a consequence of the coronavirus crisis—will think twice before imitating the ordinance.

Even without mandates, gig companies are providing Covid-related benefits to workers who contract with them. Shipt is providing up to two weeks of financial assistance to its shoppers if they get Covid. DoorDash is offering financial assistance to “Dashers” who test positive or are told by a medical professional to self-isolate.

There may be merit to offering additional pay during the current crisis, but it’s a policy best handled voluntarily, in cooperation with gig companies, not in opposition to them.

Mr. Vernuccio is a senior fellow at the Mackinac Center for Public Policy. Mr. Saltsman is managing director at the Employment Policies Institute


An Entrepreneur With Autism – WSJ

I have some friends who have children with autism. This article is for them. Very encouraging to me- yes, even though it feels like a lot of work.
11/27/2017 WSJ

CHRIS TIDMARSH CO-OWNS Green Bridge Growers, a commercial greenhouse in north central Indiana that provides herbs, lettuces and nasturtiums to local restaurants, and sunflowers and cosmos to florists.

He has degrees in chemistry, environmental studies and French. He has a passion for agriculture. He also fits a very rare profile for an entrepreneur. He has autism.

The 30-year-old created the company in 2013 with his mother—and co-owner—Jan Pilarski, after a promising job as an environmental researcher ended abruptly because he had difficulties communicating. That left him with the choice of either trying to find a more suitable job or, with the help of his family, creating a business that would capitalize on his skills.

They chose the latter. “My mom does most of the administration,” says Mr. Tidmarsh, including accounting, marketing and sales. He perfects the spacing between rows of kale and spinach, and keeps close tabs on water chemistry and soil acidity. He spends hours researching natural and effective pesticides to deal with aphids. The solution: 4,500 ladybugs.

Ms. Pilarski often explains how they created and run the business to groups of parents whose children have autism, to show that it is possible. “There is a deep, deep need for hope and jobs,” she says.

A network of support

In many ways, Mr. Tidmarsh’s path to entrepreneurship resembles that of others starting their own business. He has a wide breadth of knowledge and a vision of what he wants to accomplish. He is a mentor to those working alongside him. The results are promising. Green Bridge is projecting revenue of $80,000 and profit of $30,000 in fiscal year 2018. In fiscal 2020, when an expansion is complete, it expects to reach $220,000 in revenue and $72,000 in profit.

In other ways, though, his journey is very different. Other entrepreneurs may know what they can’t handle and delegate those tasks to others. But they know how to execute their vision. That is difficult for Mr. Tidmarsh. He has a dream but leans on his mother and a network of supporters to plot and fulfill it.

It is a story shared by many other entrepreneurs with autism spectrum disorder, a condition affecting about one in 68 children and 1% to 2% of the overall population in the U.S. Starting a successful business is no small task for anyone, but those on the autism spectrum face challenges that others don’t. Many have difficulties with executive functioning—the ability to follow multiple steps to complete a task. They may also have a limited ability to follow rules of social interaction— like maintaining eye contact or shaking hands—or to read facial expressions to let them know what someone might be feeling or thinking. Sometimes they can type what is in their head, but are unable to say it.

They know how to work, explains Danny Raede, chief executive of the Asperger Experts online community, who was diagnosed with Asperger Syndrome, an autism-spectrum disorder, at age 12. But “their brains won’t let them.”

So, jobs are few for people on the spectrum, and adults with the condition have an estimated 80% to 90% unemployment rate. “One of the ways people choose to address this is by creating a business that allows them to be selfemployed,” says Angela Geiger, CEO of Autism Speaks, an advocacy and support organization, which has a business- accelerator program.

By launching their own companies, people on the spectrum can create a work environment that fits their comfort level and doesn’t force them to navigate the traditional, heavily social office setting. Very often, though, their key to success is not to try for independence, but to build up a network of supporters who will help them with the business.

“It’s how interdependent can you get,” says Mr. Raede. “Try to get as many people you can rely on, not one. I want to have 10,000 people I know and can rely on.” His online community is built on that concept, offering support groups and online courses to facilitate learning on a mass scale.

One of the best ways those supporters can help someone on the spectrum become self employed is to identify and build on their skills instead

of trying to change behavior or have them do something they can’t, says Cary Griffin, co-founder of Griffin-Hammis Associates, a Florence, Mont., consulting firm that specializes in developing self-employment opportunities for people with disabilities. If a person can’t manage bookkeeping or marketing, for instance, others can.

Often, it’s a parent or sibling. When Matt Cottle, 28, of Phoenix learned that he couldn’t be a Marine like his father and brother because he was on the spectrum, he took culi- nary classes and began working with a pastry chef. Many people on the spectrum, in fact, are chefs, along with craftsmen, locksmiths and candle makers.

Mr. Cottle found his vocation in baking and started Stuttering King Bakery, which supplies muffins and scones to local coffee shops, corporate events and farmers markets. He is licensed and works out of a large kitchen in the home he shares with his parents. His mother, Peg, handles orders and marketing.

“For someone on the spectrum to be able to make it, they really have to have someone else who has a real high investment in their success, and usually that is going to be family,” says Ms. Cottle.

Approaching the puzzle

Mr. Tidmarsh, the oldest of four children, was diagnosed with autism as a preschooler, when a caregiver noted that he seemed in his own world and uninterested in family members coming and leaving the house. Since he was their first child, Ms. Pilarski says that she and her husband, Jay, likely missed the significance of behavior that might have concerned more-experienced parents.

For most of his childhood and teen years, the couple focused on the most immediate next step—elementary school, middle school, high school and college—while also raising their other three children and working. Jay Tidmarsh teaches law at the University of Notre Dame, and Jan ran a social-justice program at St. Mary’s College.

Chris Tidmarsh received his three degrees from Hope College, a small liberal-arts school in Holland, Mich. After graduating in 2010, he got a job as an environmental researcher. But it didn’t last.

“I was doing a lot of office work and behind the computer. I’m not the best with that style. They generally communicate verbally, and I’m more of a visual learner,” says Mr. Tidmarsh, who struggles at times to find and say the right word. He’s better at following directions when they are written in emails and texts. It is harder when they are spoken.

After three months, he was let go. “I felt disappointed, and I guess I felt kind of sad that it didn’t work out, but I was looking forward to finding a job that I might enjoy more,” Mr. Tidmarsh says.

Back at home, his parents saw him surrounded by peers with degrees and on the spectrum, and likewise unemployed. The reality of the obstacles facing their son and his limited options loomed large.

It wasn’t so much the idea of his son earning money that concerned Jay Tidmarsh. “I wasn’t stressed that way,” he says. “It was hard for us to have this young man with a lot of ability unable to use it. That was really concerning. I really believe in the importance of work. It’s a part of who you are.”

Over many meals, Chris Tidmarsh and his family talked about what he loved doing most. He interned at an organic farm, became a master gardener and took a class designed to help people become farmers.

“I’ve been really interested in the environment and Earth for a long time,” Mr. Tidmarsh says. “I decided I wanted to do something related to that.”

He and his mother, who grew up on a farm, began researching options. They visited a software business set up by the family of a young man on the spectrum, and talked at length about how they made it viable. They also visited several farms, including one that used an aquaponics process, where fish’s waste is used to fertilize plants that grow in water, while the plants clean the water to cycle it back to the fish tank.

That process, heavily dependent on chemistry and environmentally friendly, captured Mr. Tidmarsh’s attention. “It requires a bit of knowledge of chemistry,” he says. “It is very sustainable. It uses 90% less water than growing in the soil.”

The plan emerges

From there, mother and son began working together to figure out how to get the business off the ground. Ms. Pilarski left her job in 2012 and applied to a program through her alma mater, Notre Dame, designed to help startup social enterprises. Part of the class involved creating a plan that could be entered into a business-plan competition at Notre Dame’s Mendoza Business School.

She and Mr. Tidmarsh laid out their strategy with the help of four graduate students. Among other crucial choices, they decided to set up the business as a 501(c)(3) nonprofit, and have a key component of its mission be training others with autism.

When the group presented the plan to the competition judges, Mr. Tidmarsh spoke about unemployment problems faced by people on the autism spectrum and described his own experience.

They won the social-impact prize, which provided $15,000 as well as legitimacy. “It really took us to a different place and acknowledged the viability of what we were doing,” says Ms. Pilarski.

The team met with area farm-to-table restaurant owners and a local Whole Foods Market to determine market potential and realized that it was huge: Indiana trucks in 90% of its food, they discovered. They researched profit margins and decided to focus on those products that have the highest ones, like basil, which sells for $16 a pound retail and $10.50 wholesale.

In 2013, the partners built a prototype for their business, located on a site in South Bend, Ind., that housed an agency serving people with disabilities. As they produced their first crops—along with basil, they grew cilantro, red Russian kale, lettuce, mint and parsley— they learned the ins and outs of the growing process.

Mr. Tidmarsh focused on monitoring the details of the fish tanks and the level of nutrients the plants were getting.

The next step in their plan was expansion. Guided by the board they had set up for the nonprofit, they raised money through donors and a crowdfunding campaign, which they added to a $10,000 entrepreneur- of-the-year award won by Mr. Tidmarsh.

Finding land that met zoning regulations and offered access to water and electricity, and room for growth, was more difficult than they envisioned.

“It took a tremendous amount of time,” says Mr. Tidmarsh.

After more than a year, in December 2014, they found a farm with 5 acres, a house and barn, and bought it for $70,000. Ms. Pilarski scouted for other funding sources to cover the cost, landing grants from a utility and the U.S. Agriculture Department.

All was progressing until March 2016— when Ms. Pilarski was diagnosed with cancer. It wasn’t only a personal blow, but also a tremendous setback for the business. She was the one calling contractors, pricing materials and looking for the best suppliers.

She did as much as she could for as long as she could, but “it was difficult to keep the momentum going,” she says.

Mr. Tidmarsh struggled with the disruption. He says little but nods in agreement as Ms. Pilarski tells her story and concludes, “I’m back and healthy.”

In the midst of those difficult times, their support network helped keep the business moving forward. Board members pitched in when and how they could, as did Jay Tidmarsh. While caregiver to his wife during her 10-month treatment, he and volunteers started building two now-complete greenhouses on the new property. Once the growing facilities are fully operational, the family expects to harvest about 45,000 pounds of produce a year.

Having both parents involved in the business, says Chris Tidmarsh, “brought us closer.”

The way forward

The business has provided a path forward for Mr. Tidmarsh and his family. He says that he has become more comfortable conducting tours of the greenhouse. He has also addressed large audiences, speaking in front of advocacy groups and gatherings at Notre Dame and St. Mary’s, including graduate speech-pathology classes. The goal is to help them understand the difficulties that those on the autism spectrum have communicating.

Until recently, Mr. Tidmarsh lived with his parents. Now he has moved into a house with a friend who is also on the spectrum. His parents pay for his housing, but he hopes that will change. “My goal is to be self-sufficient,” he says, as well as help to employ others on the spectrum.

Toward that end, he is mentoring workers at Green Bridge. Matt Coleman, Mr. Tidmarsh’s longtime friend and now his roommate, works alongside him, planting and harvesting, and monitoring water levels. Adam Rousculp, who is also on the spectrum, feeds the fish and cleans the tank. Photos and explanations hang throughout the pilot greenhouse to explain the process to visitors and help workers, who better absorb information visually.

The changes in Mr. Tidmarsh are striking to Ms. Pilarski. “I’ve seen him grow in such a lovely way,” she says.

On a recent afternoon, Mr. Tidmarsh checks nutrient levels in tanks that hold koi at the pilot greenhouse. Afterward, he creates holes 1/8th-inch deep and drops seeds into trays of soil. Later, at the site of Green Bridge’s two new greenhouses, he describes his plan to plant perennial rye in an open field on the property to restore microbes in the soil and prevent erosion.

He’s optimistic about the future of Green Bridge. “It does provide hope not just for me, but others on the autism spectrum to find and keep jobs,” he says. “I think I can see myself doing this for the rest of my life.”

Ms. Ansberry writes The Wall Street Journal’s Turning Points column. Email .


Top photo: Chris Tidmarsh working with floating hydroponic raft beds. Bottom photo: Mr. Tidmarsh at a greenhouse containing lettuce and herbs, and trays of seeds for the company’s larger greenhouses.


Economics of Growth and Prosperity

I simply shake my head…
William Baumol,Robert Litan, and Carl Schramm, “Good Capitalism, Bad Capitalism, and the Economics of Growth and Prosperity” (2007):

The most astonishing thing about the extraordinary outpouring of growth and innovation that the United States and other economies have achieved over the past two centuries is that it does not astonish us. Throughout most of human history, life expectancy was about half what it now is, or even less. We could not record voices or speech, so no one knows how Shakespeare sounded or how “to be or not to be” was pronounced. The streets of the greatest cities were dark every night. No one traveled on land faster than a horse could gallop. The Battle of New Orleans took place after the peace treaty had been signed in Europe because General Andrew Jackson had no way of knowing this. In Europe, famines were expected about once a decade and the streets would be littered with corpses, and in American homes, every winter the ink in the inkwells froze.


How Pizza Became a Growth Stock

Lots of companies like this one. Or maybe, lots of companies have the opportunity like this one.
By Stephen Moore
March 13, 2015 6:39 p.m. ET

Here’s a question that has been puzzling Patrick Doyle, the CEO of Domino’s, for months, as he puts it: “How do we list the calorie content of our pizzas on a menu when we have 34 million different variations of pizza?” The new menu labeling law, a creation of the Affordable Care Act, could require his company to do just that.

It’s a textbook case of a mindless and arcane regulation, of Washington bureaucrats imposing on businesses costs that will have no effect on public health. “We’ve been voluntarily doing menu labeling for over a decade,” Mr. Doyle says. “We even have an online calorie calculator we call the ‘Calo-Meter’ for every possible pizza order, and it tells customers what happens if they substitute, say, sausage for mushrooms, because we strive to be very nutrition-conscious.”

That isn’t good enough for the feds. The Food and Drug Administration is now insisting that every one of the chain’s 5,000 stores post menu boards on the wall with calorie counts. “It’s crazy and it doesn’t help consumers,” Mr. Doyle says, because “90% of Domino’s orders arrive by phone or Internet and are for delivery, so fewer than one of 10 customers will ever see these signs.” The signs will cost about $2,000 at every store, and each change of menu will require new ones. That is about $10 million of extraneous costs nationwide for Domino’s. Thank you, Washington.

Other than that, Mr. Doyle is having a good day when I visit him at the Domino’s world-wide headquarters in Ann Arbor, Mich. And a very good year, with sales up 12% in the past quarter alone.

The headquarters are a few miles up the road from where the original Domino’s Pizza opened in 1960. Mr. Doyle, who is 51, is tall, stocky, affable and appropriately a Michigan man through and through, having grown up in Midland and earned a degree at the University of Michigan. In his five years as CEO, annual sales have climbed to $9 billion from about $2 billion. Some 250,000 workers wear a Domino’s uniform and sell roughly one billion pizzas each year. During the Super Bowl, Domino’s was taking a dizzying 1,400 orders a minute.

Making pizzas may not be the sexiest business—though it’s a $125 billion world-wide market. But while investors obsess over finding the next Facebook, the share price of Domino’s has soared from $13 in 2010 to just over $100 today. It has been among the top performing stocks in the Fortune 100.

Mr. Doyle has helped take the company global, with stores operating in 80 nations and expansion plans throughout Asia. In sales, Domino’s is now the No. 1 restaurant chain in India. Sub-Saharan Africa is also among the company’s fastest-growing markets, with a billion people and a growing middle class. “We’ve discovered Africans love pizza,” he says. “They order them on their mobile phones.”

Things weren’t always flying so high in Ann Arbor. Mr. Doyle became CEO after two of the company’s worst years, and sales were still sliding. One of his first decisions was to take an unorthodox approach: “We held a series of focus groups with consumers and we discovered that people hated the pizza. So we ran these TV ads featuring Americans complaining about how bad Domino’s pizza tasted.” Then Mr. Doyle appeared on screen with an apology and promise: “We hear you America. Sometimes you know you’ve got to make a change. Please give us another try.”

He adds with a laugh that the one thing in his career that impressed his children was when they were in a New York restaurant and comedian Amy Poehler spotted him and shouted, “Hey, you’re the pizza guy.”

In the three months following those ads, Domino’s had its fastest rise in sales in company history. “I think consumers really appreciated that we were direct and honest with them,” he explains. That ad campaign is now considered a textbook crisis-management story, with its lesson in honesty as a best commercial policy.

Domino’s is also riding the digital revolution. “In a lot of ways we’re really a technology company,” Mr. Doyle says. “We’ve adapted the art of pizza-making to the digital age. Globally, we’re already at a run rate of about $4 billion of digital sales.” He adds that digital drives sales by making ordering easier and more efficient, and saves money on bad orders because customers “take their own orders so they make fewer mistakes.

His goal is to have every iPhone in the world equipped with a Domino’s app, and the company is working with Ford Motor Co. on a voice-activated technology that will let motorists order a large thin-crust pepperoni with onions while driving home from work.

The atmosphere at company headquarters feels more like Silicon Valley than a fast-food company. Most employees here are computer programmers and technicians monitoring in real time what people are ordering, how long it is taking to fill an order, and the online complaints and comments that stream in. Their mission is to streamline the pizza-making process from the time the order arrives to when the pie is handed off at the customer’s front door. ‎If the goal is delivery in 30 minutes or less, every innovation that shaves 10 or 15 seconds is a major money saver when you’re selling a billion pies a year. Although the Domino’s menu also includes such things as sandwiches, pasta and chicken wings, 80% of its sales are pizzas.

Mr. Doyle is unconditionally bullish on the U.S. economy. “The big story since the recession is that American households and businesses have become lean and efficient and have paid down debts. Consumers finally have money and they are starting to spend it,” he says.

Meanwhile, as the head of one of the nation’s biggest employers, Mr. Doyle sees the effects of what he calls a “tightening of the labor market” firsthand. “Frankly, right now, it’s getting harder and harder to hire. We have shortages of truck drivers and delivery people.”

Such real-world experience makes Domino’s a barometer of sorts. “My take is that the official statistics are underestimating the strength of the labor market. Look, it has been a long, slow recovery. We’re now six years into it and we’ve finally reached the point where there seems to be more demand for labor than there is trained supply.” For job seekers “that is great news, right?”

As for those who fret that only the rich are getting richer and upward mobility isn’t possible, Mr. Doyle says they should pay more attention to what happens at Domino’s. “Over 90% of our 900 franchisees started as an hourly worker in the store,” he says. “Most of them started as delivery drivers at minimum wage. They work their way up. They become a manager. Then they come in, they apply to buy a store.” So from earning $7 or $8 an hour, they now earn $80,000 to $100,000 by operating a franchise. Many have become millionaires. “This is absolutely a story of upward mobility in America.”

If he were economic adviser to the president, what reforms would he recommend to accelerate growth and hiring? Without hesitation he says: “Simplify the corporate tax. It’s a killer. We pay 38% at Domino’s.” He’s including state and local taxes, but that’s a huge burden, especially given that many large corporations pay below 10%. “Just get rid of all the loopholes—and make it fair with a broad base and lower rates.” Then he adds, only half-kidding: “No one in Washington ever woke up and said ‘let’s have a loophole for pizza makers.’ ” Sounds like he needs a lobbyist.

One of Mr. Doyle’s biggest worries is that the Domino’s franchise-owner model—which is also used by thousands of other retail and restaurant stores—has come under assault from trial lawyers, unions and the National Labor Relations Board. These groups want to treat a Domino’s or Popeyes franchise store and the parent company as “joint employers.” This would mean a locally owned store with a few dozen staff would still have to comply with, for instance, the ObamaCare rules that only apply to firms with more than 50 workers. Seattle passed a minimum-wage law last year that treats franchise restaurants as big businesses that must pay a super-minimum-wage that phases up to $15 an hour.

“You’ve got 20 million people today employed in the franchise industry in the U.S. Part of why small business owners want to be in a franchise is because they’re getting support from each other, and they’re getting support and ideas from a company. Franchise stores have dramatically higher success rates than people who are just doing it all on their own,” Mr. Doyle says. ‎“Why destroy a model that is almost uniquely American and has been a tremendous success for 50 or 60 years? This would be horribly detrimental.”

Mr. Doyle is optimistic about the world economy and how the digital revolution will continue to lift living standards for billions in the coming decade. Even in sub-Saharan Africa per capita incomes are growing at 5% annually. “I’m a free trader. I just believe in my core that free markets, technology, innovation, cheap energy and globalization will be triumphant and will make people better off.” They will also, not coincidentally, make people order more pizzas on their smartphones.

‎Mr. Moore is a senior fellow at the Heritage Foundation.

The Weekend Interview with J. Patrick Doyle: How Pizza Became a Growth Stock – WSJ.