RingCentral Sponsored LifeWork Hackathon Spurred Creativity to Help SMBs Thrive
Small and medium-sized businesses (SMBs) are the engine of our economy. Not only are they the kinds of places I love to frequent in my own neighborhood, but I’m fortunate enough to work with SMB entrepreneurs every day. At RingCentral we help them bring unique offerings to market, scale-up, and compete with bigger players.
The COVID-19 economy is posing unprecedented challenges for these essential engines of innovation. SMBs don’t have the cash reserves of big companies or the same access to borrowing, they often operate on razor-thin margins. While many would welcome the expertise, the financial burden of hiring business-consultants is unfeasible in the best of times.
But the news is not all bad.
We recently sponsored and helped organize the LifeWork Small Business School Challenge. SMBs never disappoint! The enthusiasm and innovation were front and center as they worked with MBA students from 10 leading business schools to shift their business models in the face of this new normal. Not only did I see that creativity is alive and well among young people, but it was clear that with the right adjustments SMBs will survive and thrive in the years ahead.
You might say it felt like a glimpse of the future.
The event drew yoga studios, restaurants, a wedding photographer, catering businesses, a farmer’s market; places we all love, and which have had the rug pulled out from under them in recent months. Even though many of these businesses were already boosting digital engagement with customers before the pandemic hit, most of them depend heavily on face-to-face interaction for their business. These SMBs need some help adjusting their entire business model for a world where in-person interaction is likely to be curtailed for an extended time period.
When the event’s organizer, David Corfield, reached out to us on LinkedIn with the hackathon idea, we said, “Let’s do it.” The MBA students were rearing to go. Author and entrepreneur Seth Godin agreed to be the keynote speaker. RingCentral was more than happy to be gold sponsors of the initiative and provide all the Message, Video, Phone (MVP) collaboration tools needed for the event. Our messaging tools kept the teams could be in constant communication and allowed them to share documents, RingCentral Video allowed people from all over the country to work together remotely, RingCentral also provided our HD business phone solution so they could make quick calls from any device, and we enabled the final event webinar that included hundreds of participants.
In keeping with the adaptive spirit of the times, we did this in a matter of days and the energy, ambition, and results were inspiring.
In his keynote, Godin recounted the challenges he has faced with the dozens of companies he started. “Almost all of them hit a speed bump, almost all of them were squeezed, almost all of them had cash flow problems, almost all of them — at some point or another, hit the wall,” he said. “Slogs [downturns] have another side, that’s what makes them a slog.”
For me, the University of Washington team’s proposal for Cuisinett, a French restaurant in San Carlos, California, stood out the most (and eventually won first prize). Cuisinett has a loyal client base, a strong presence in their community, and real expertise in French food. But, of course, when the pandemic hit, they had to shut down their restaurant. They tried to diversify their offerings and operate like a gourmet market selling wine, gourmet salts, olive oil, salad, and sandwiches to go. It helped, but it hasn’t fully compensated for the loss in foot traffic.
That’s where the MBA students stepped in. Not only did their analysis conclude that this new model was viable moving forward, but their projections found that with a few tweaks Cuisinett could outpace its pre-COVID revenue. While dine-in service generates 30-40% margin minus labor (MML) for Cuisinett, a revamped takeout operation can generate about 60% MML. By adjusting their online interface, allying with other small businesses, and coming up with a few new offerings like a wine of the month-type subscription plan Cuisinett can actually be more profitable than it was pre-crisis.
“The MBA students were really good,” Geoffroy Raby who owns Cuisinette told us after the event. “None of them had restaurant experience, so it was valuable to get their feedback from an outside perspective.”
All in all, the event was energizing, and it left me feeling confident that collaboration is the way forward. Not only can businesses help customers, but they can help other businesses push forward in the new normal. I wasn’t the only one feeling inspired by the event, either: we surveyed the SMBs who took part, and they rated the experience a 9.5 out of 10.
One of the themes of Godin’s keynote was a reminder to “Keep going.” After watching the hackathon, I know that these businesses and the thousands of others like them have what it takes to persevere in the months ahead. I also know that we will do everything we can to support them.