NOVEMBER 5, 2012
Fuel-carrying bucket brigades. Living at the office. Drenched business models. East Coast businesses share tales of triumph and woe in the aftermath of last week's devastating hurricane.
From his apartment in SoHo, Anthony Casalena could hear the winds of Hurricane Sandy bearing down “like a jet” on the building. What the founder and CEO of Squarespace, a website creation platform, had no way of knowing about, however, was that water was sloshing up from the basement to the lobby at Squarespace’s primary data center on Broad Street in Lower Manhattan.
“That building had incredible backup,” Casalena says, with tens of thousands of gallons of diesel fuel to power a generator for weeks. Unfortunately, though everything “looked normal” at street level in the Wall Street area when he arrived, the building’s two basements were completely flooded, rendering all the fuel that kept the center humming through the last three major natural disasters useless.
Casalena took to the Squarespace blog to report the damage and to warn its hundreds of thousands of customers they’d experience a disruption in service. Until then, he wrote, he and the systems team along with some Squarespace staff would be forming a bucket brigade to carry the fuel up to the 17th floor generator and keep their sites online as long as possible.
Squarespace is just one of thousands of businesses all over New York, New Jersey, and Pennsylvania piecing together strategies for working through the aftermath of Hurricane Sandy. Though millions have regained electricity and mass transit is (mostly) back on track, as of yesterday 1.8 million customers were still without power or a way to get to work, and tens of thousands could remain homeless for too long. Some businesses (such as this website) took to their internal communications networks and staffers carried on from home, others hunkered down incoworking spaces all over the city. Still others like Seamless saw the crisis as an opportunityto gain marketshare. For all, it’s a sobering reminder of what needs to be rejiggered before another storm can sweep through.
"IT'S NOT ABOUT RESOURCES," SAYS GROUPER CEO MICHAEL WAXMAN. "IT'S ABOUT RESOURCEFULNESS."
There wasn't a shortage of co-working spaces before the storm hit, but Regus, the largest provider of flexible office space with 1,200 locations worldwide, has been inundated with requests this week. Grant Greer, Regus’ corporate communications manager for North America, says that one benefit of being in its network is that members in lower Manhattan were relocated to space in its Midtown centers. Greer says Regus also offers “disaster recovery” protection, and five companies have already paid in advance to insure they have a place to work in the event of a catastrophe.
So far, Casalena reports that the fuel haul continues and managed to avert any downtime. Squarespace’s SoHo offices are reopening as well. As for investing “millions of dollars” in another data center, that’s always been part of the plan, but wasn’t scheduled to happen until 2015, “since these events happen like, once in 180 years,” he says. In the meantime, Casalena believes Squarespace’s constant updates and available customer service have served to make its customers even more loyal.
Grouper, a New York-based startup that sets up drinks for two groups of friends who don't know each other at cool bars and lounges, did the same. Grouper’s office manager distributed pre-Sandy care packages for the entire staff of eight containing food, a bottle of wine, candles, a tap light, and bottled water. Then the team stayed online together as the storm was hitting. Their first order of business was to create a status page to keep East Coast members updated about their events. Grouper’s NYC-based team eventually pulled together at The Alley NYC, a co-working space that offered 50% discounts to those displaced by Sandy (staffers’ gym memberships ensured everyone could shower). "It's not about resources," says Grouper CEO Michael Waxman, "it's about resourcefulness."
That’s also what it took for Kellee Khalil, founder and CEO of Lover.ly, a visual search engine for all things bridal. In addition to using her 26th Street office as a refuge from her own darkened apartment, she and her team still managed to launch its new "Ask a Pro" feature last week, as well as temporarily host several other businesses in their space. Ironically, Khalil says Lover.ly used to lease space from Scratch DJ Academy and now five of its staffers are working alongside her again. Khalil admits she’s anxious to get back to normal so they can continue develop the business, which is not yet profitable. “Timing is critical when you are venture-backed,” she says, “But our team is so resilient.”
A “work anywhere, anytime” culture is what Marifran Manzo-Ritchie, director of corporate communications, says helpedMonetate weather the storm. The enterprise software that offers testing and personalization services to e-commerce brands keeps all email and docs in the cloud, and every employee gets a Mac laptop. Even on sunny days the CEO and staff keep in touch via Gchat and Yammer. “Though meetings and travel were disrupted, the interruption of business was minimal for us,” she says, even though the office is located 15 miles outside of Philadelphia on the banks of the Schuylkill RIver, where driving conditions were hazardous.
Unfortunately, Larry Walsh didn’t have the same luck. Though the CEO and owner of virtual consulting firm The 2112 Group has cultivated a totally work-from-home staff, he says the storm revealed serious structural and geographical complications. “While my three Boston area people were back online within 48 hours of the storm, we’re still struggling here on Long Island and New Jersey,” Walsh says. Operations staff in Iowa and California were only able to pick up some of the load as all strategic, sales, and back-office folks are on the East Coast.“TIMING IS CRITICAL WHEN YOU ARE VENTURE-BACKED. BUT OUR TEAM IS SO RESILIENT.”
What’s more, Sandy slammed data and cell service, the thing Walsh credits for keeping him going through blackout periods in the past. “The cloud proved its value in terms of survivability of data,” he explains, “But without power and the right people to access data, the cloud proved virtually useless.”
For Chad Rubin, owner of a startup called Crucial Vacuum, located in Little Ferry, NJ, flooded roads made business impossible last week. Though he invited employees to work from his home and spend the time fielding requests for thousands of customers in unaffected parts of the country, Rubin says Sandy punched holes in his business plan, too.
Because Crucial Vacuum manufactures its own vacuum cleaner filters, bags, and parts and sells them direct to the consumer, to prevent “a storm of chargebacks," they are having suppliers and Amazon ship on their behalf. That means thousands of dollars of lost profits on all those orders because Crucial Vacuum’s low price structure is based on not having to ship through a second party. Rubin says they also had to take listings off other e-commerce marketplaces until they could reliably ship again, losing potential new orders, too. Still, Rubin is looking on the bright side: “We were lucky that our inventory did not get damaged."