COVID-19 Update

Boba Guys and Gals Over Over the World,

We want to make a long-form post of the recent public announcement. Y’all here because you’re probably curious about what actions we’re taking within Boba Guys to ensure our team and the community is safe during this crisis. But some of you are here because you’ve been following my (Andrew) personal updates about the COVID-19 situation. I had about a week to prepare for this announcement, but nothing can ever prepare us for something like this. I’ve been in discussions with senior-level officials across all forms of organizations— government, businesses, and non-profits— it’s been a while since something like this has happened.

So what I’m about to make public is an email I wrote to our team earlier this week (below). Before that, I want to talk about the following.

TO ALL THE SMALL BUSINESSES WE’VE LOVED BEFORE AND WILL ALWAYS LOVE

I want to address the small businesses across the country first as that is whom I’m hearing from directly the most (after my team). This is going to be a hard time for everyone… including us. My team and I did the math and estimate that we have only 2-3 months of working capital without any help. We account for layoffs to part-time team members just as we’ve seen happening across the world. If we go bare bones, we can float up to 10 months, but that would mean we go into furloughs/unpaid leave across the entire company, including myself and my co-founder, Bin. I share this so transparently because uncertainty and opacity is what’s causing unnecessary panic and anxiety.

Me and fellow businesses that “seem to have it together” are in troubleshooting mode, too. We are in it along with everyone else, but that is why I went straight to D.C. and have been fighting for us behind-the-scenes for over a month. We are fortunate enough to have a platform and voice that we’ve built over the years to fight for businesses. I’ve been thanking my friends for tolerating my TED Talks all these years… I guess our big energy is gonna be put to use now! ;)

So brass tacks. And I don’t want to come off as alarmist, but I hope you see anything in this post assumes that we always do our homework as we know information is wonky on the internet. My testimony in Congress last week is just the tip of the iceberg. Congress is working extremely hard on a third stimulus package and other mechanisms to keep small businesses afloat. I know most businesses do not have as much working capital as us. My estimate is that 20% of small businesses are on their last couple payroll cycles. I’ve been escalating this to the legislators. Even after passing the bills, they need to execute the programs ASAP which is a lot to ask given our style of government.

[updated as of March 15, 2020 1:30pm PST]

The biggest assistance that exists is from the Small Business Administration (SBA). I’m making this a working page, so this is a list of programs they offer currently:

• SBA Disaster Loan Relief Fund: this is going to help some, not all, businesses who need working capital. You can get up to $2M. It’ll be administered state by state in the SBA office.

Other cities and states have also created their own assistance programs. I haven’t seen anyone putting the programs together, so here is what I’ve collected this far:

• San Francisco OEWD: $10K grant to micro small businesses

Now, about those taxes and fees. I can’t cover every possible scenario as the media has been providing good coverage on this, but cities and states are already announcing deferment on taxes, loans, and other financial levers. That being said, we still need to bubble this up to creditors, vendors (like suppliers), landlords, banks, and other lenders or entities that collect on credit. As I’ve noted before, cash flow is the lifeblood of small businesses, so please conserve cash as much as possible.

TO ALL THE GOOD PEOPLE WE LOVE EVERYDAY

As written in my note to the team, it’s been a honor serving and employing you all over the last eight years. Bin and I have been reminiscing a lot over the past few weeks as we cancelled our The Boba Book media tour, Coachella x 88rising activations, Boba Guys Japan launch, and countless other programs we wanted to bridge cultures with. While we are sad, we know it has to be done and planned accordingly. But writing my internal team memo and making an announcement during our last 4M (my leadership meetings) as I flew out to D.C.— that is probably the hardest thing I ever had to do professionally.

On my way to the airport, I cried a lot. This isn’t about me, but I was encouraged to share this as my friends tell me that other leaders should follow suit. Even though we “own” or “founded” the company, nothing breaks our hearts more than letting people go. For those of you on our team reading this, we are really sorry. We are sorry we couldn’t do more. We are sorry we couldn’t change the system fast enough. We hope when we get out of this that you’ll come back to us or our friends’ businesses.

You can see why we try so hard to change culture— that is the only true medicine that is going to get us through these times. I don’t want to talk much about the racism and xenophobia until after this is all over, but it’ll be a long yet necessary road to recovery.

But Bin and I are eternal optimists. We always bet on the future. And from what I can tell you, the overwhelming majority of us are going to be okay. We will have food on the table and most of our loves ones around. I said my last in-person goodbye to my dad over a month ago because he has severe adult asthma. I can’t imagine what it’s like for you all who never even had a chance to experience one extra minute in person with your loved ones. My heart is with you. While you can, please FaceTime your loved ones. In times of isolation, this is where humanity needs each other the most. We are social creatures for a reason… including my introverted wife. ;)

I am getting a lot of questions about personal finances, so I’ll try to inform as much as I can. If you are laid off and qualify, file for unemployment immediately. If you are at a part-time job, some of you will be covered either through your company’s Catastrophe Pay or House Bill 6201 which is a stimulus package that provides free testing and extended paid sick leave up to 14 days. Ideally, the Senate passes the bill tomorrow (Monday). This would reimburse (some, not all) businesses who absorb the costs. There’s also Medicaid assistance, but that’s changing by the hour, so please read the news for that.

If you are renting, I would ask for forgiveness or abatement from your landlord. I’ll be working on a template for the public to be issued shortly. I know April 2020 rents are coming up. Hold on tight.

And if none of this affects you financially, please consider helping your favorite establishment by buying gift cards, donating, or patronizing their business if possible (delivery, e-commerce). Also, a PSA for the 30 million small businesses out there, many of whom are retail-based— please don’t rub your ability to WFH in. ;) We get it, but at least bring us some granola bars from your kitchenette!

TO THE WORLD

I know this isn’t a typical small business post, but if you read our blog, you’ll see that this is absolutely normal for us. 😜

I mentioned that I tabled this post because I didn’t want to cause unnecessary panic, but I also think our country needs to take it way more seriously now. In the past week, I’ve seen friends party on Bourbon Street, attend group gatherings & pop-ups, and drink in St. Patty’s Day festivities. We get it and we love you… but please stop immediately. You acting a fool. Like for real. Fools.

And we know our stores are open at the very moment and even though we’ve taken every precautionary measure, we are still going to lock down our stores very soon. We will be one of the first in the industry (coffee, boba, tea) to do so.

We don’t know what happens from here, we really don’t. I’ll still be working with legislators, media outlets, and non-profits to address the response in a systematic way (sorry, that’s the only thing I know how to do well), but I don’t know what happens to my loved ones, our team, and the businesses around us. To be candid, Bin and I are pretty cash-poor as most entrepreneurs are. The thing is, I’m still not scared. Sad, yes. Frustrated, yes. But not scared.

I lived through 9/11. I clamped down through the 2008 crash. So did many of you. I have been taking comfort and chatting with leaders I look up to and one said, “Look at the future and see what’s there.” I see my team. I see young people. I’ve written about this before… my generation, so-called Millennials, often sh*t on the upcoming generation because we think they’re entitled or soft. They are not. They are at times uninformed, but it’s our job to lead them and help them develop into future leaders that can maybe stop the vicious cycle.

A lot of what’s happening is direct result of the system we— the Boomers and Millennials— built. America’s COVID-19 response in relation to the rest of the world is on-brand. We should have expected this. As with climate change, we need to think more holistically and long-term. That is the only way we turn all of this around. There will be another pandemic in our lifetime. What then? Another toilet paper hoarding bunker? Another streak of unwarranted racism?

I prefer to be a thermostat, not a thermometer. Dictate the culture, not react to it. I ask the next generation reading this, please do better than us. To our team, you know about how we teach the three pillars of the Modern American Team: Positive EQ, Confident Vulnerability, and Big Picture Thinking? Use all of it. That’s all we ask of you as we move on from this.

In the great words of the poet Tupac, keep ya head up. We hope to see you on the other side.

Grace and peace,

Andrew (and Bin)

---

Hi All,

We hope you are all safe and well. I know we're in precarious times, so we want to give you all an update that covers most of your questions and potential anxieties about COVID-19 and subsequent ramifications. We know there may still be outstanding questions, so we apologize in advance for any fragmented information-- hope you can see we are doing the best we can as news is coming in hourly.

Background

As you know, I had the honor of going into D.C. and testifying on behalf of small business owners in the House Small Business Committee earlier this week. I'm still working with the Committee on various bills including the stimulus package that House Speaker Pelosi is proposing as we speak. I share this context as the following is the big picture culmination of everything I know as a business leader, American citizen, and public servant.

Planning or Baseline and Worst-Case Scenarios

Katie (our new COO), Bin, and I have been in discussions over the past week on how to best handle the situation that seems to have no true timeline. We have to balance being proactive on what is about to come, yet also remain pragmatic enough so we don't fan the flames of hysteria. With all the information at my disposal, we think it's best to break down the situation into two scenarios: baseline and worst case scenario.

The baseline scenario is the state we are in right now. This in which there are partial shutdowns and general messaging about staying at home and social distancing. 

The worst-case scenario is something we should keep on our radar as we monitor the news every day. Keep in mind that this all depends on triggers such as a systemwide transportation shutdown (like NY subways or BART) or someone on our team is officially diagnosed with COVID-19.

Day-to-Day Action Items During Baseline Scenario

As your store is in the baseline state, please continue following the normal COVID-19 health precautions:

• Wash hands vigorously and often.

• Wear gloves at all times and change when switching tasks.

• If you feel sick, stay at home. 

• Drink lots of water. Sleep a lot. (I know those online college courses will put you to sleep... watch them!)

We are also going to make some in-store changes effective immediately (if not already done):

• Remove all self-serve vessels like syrups, straws, and free/communal water. Bamboo straws are handed to guests. Wear gloves.

• Regularly sanitize and full wipe-down surfaces every hour. Make sure you wipe POS screen on terminal!

• Encourage cashless/contactless transactions by asking "Would you like to pay with a card or Apple Pay?" 

• Marketing will encourage people to use DoorDash or Order Ahead (if available).

• Stickers and freebies to be handed off to guests, but remove Flavorbooks as those are shared too much.

• Remove communal snacks in team areas (we see those giant bags of Cheetos!)

• No personal cups both for team members and guests who bring their own. They can get a discount if they have their vessel, just don't use it. Note: if someone bought a brand new reusable vessel... yes, you can wash and sanitize that and serve in it. Not likely, but we want to spell it out for you.

What Happens Next

At this point, we're going to take off the Founders Hat and put on our Boba Dad/Mom hat. We know that most of you are concerned about your job security and financial situation. This is something that we've been discussing at length and do not take anything lightly. You are like our family. We built this movement together. We've seen some of you grow up into amazing men and women. And we've even seen some of you start a family with us. Over the last month, we've been thinking about how to best handle the worst-case economic scenario. 

We don't know what the future holds, but we can share with you how we're approaching this. First, we want to make sure your jobs are secure as long as we can. If you've been following our public messages, you'll see that I've been instructing everyone to save as much money as possible. It's about cash flow. Second, we need to plan for every scenario with the end goal in mind-- we need ensure Boba Guys can weather the storm. 

That being said, we know if and when we need to cut hours, we do it with the long-term goal in mind. Every company is working through these scenarios. We are already exhausting every option to help our cash flow, including negotiating rent concessions, preemptively applying for financial assistance, suspending business travel, pausing store expansion, and eliminating all superfluous business expenses. But if we do the math, we might still fall short especially if the economy doesn't recover-- hence we are setting expectations now.

We know there are some questions about Catastrophe Pay or some assistance on a personal level. At this time, companies of our size simply don't have the resources to offer a program like the 14-day Catastrophe Pay (e.g. SBUX, Sweetgreen). And even if we could offer it to some, we don't know how it's possible to validate given test kits are not readily available. We know the local, state, and federal governments are working on a solution like expanding paid sick leave and unemployment benefits, so we will be the first to let you know as the news comes. (I'm actually one of the people advising the federal government on this.)

Adulting is Hard

I've been hearing from both team members and the public a common theme: "Andrew, this is scary. I don't know what to do." This is my two cents for both the team member asking me and those in the public sliding into my DMs.

As you know, Bin and I ascribe to the idea of #TransparencyWins. I've been told by some to not write an email this candid. Well, you are all adults and the reason you're at Boba Guys or fans of ours is because you believe in our mission and radical transparency. So yes, things are going to get worse before they get better. What we can do now is to rewire our brain for trauma and process everything in the healthiest way possible.

Seeing this play out in front of my eyes (as I was in D.C. during the first coronavirus announcement), I can tell you that the world is super complicated, which is why it matters more than ever that we focus on the big picture. There's a reason why Boba Guys got involved in social justice issues early on. There's a reason why I serve on advisory committees and consistently inject thought leadership into our ethos (sorry for the TED Talks). So to be blunt, sitting on the sidelines is possibly the worst thing we can do as citizens. And almost as bad is enabling our addiction to terse, clickbait answers as that is how misinformation and panic spread. The hope we have for each one of you is that this crisis ignites a flame inside you to #DoYourHW and become #GlobalCitizens. Together, we can change the culture of our country and build more bridges through dialogue and thinking harder.

There is no winner with the COVID-19 pandemic. It is not about companies vs. workers, East vs. West, or Blue vs. Red. It is more nuanced than that. That's what we hope shifts in the mind of our team and of the general public. We just need to salvage what we can, lick our wounds, and burst out of the gates stronger than ever when it's all over. 

And to everyone who has put in their blood, sweat, and tears over the first quarter, thank you so much. The next few months were supposed to be lit: Coachella, The Boba Book, 88rising, and Boba Guys Japan.  That's how fast everything can disappear. We can't take anything for granted. But as much as it sucks, we still have a stellar team and the best fanbase/clientele in the entire world. 

We will surely keep you updated with up-to-the-minute information as things clear Congress and government assistance come into play. We will get through this together! Stay safe and as Tupac says, keep ya head up.

More love. More compassion. More empathy. 

Onwards,

Andrew, Bin, and Katie