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Brainstorm Issue #2
Brainstorms Issue #2: Opportunities With Work From Home Perks!
Brainstorms Issue #2
My name is Keevin and business ideas are my thing. Each week, I scour the web (and use a few secret tactics) to find unmet needs and the business opportunities behind them. Here's what you can expect:
One well-researched, hand-selected business idea each week - I'm all about quality over quantity.
All of the data I find synthesized so you have context for why I believe it's worth building.
A short game plan for how to turn the idea into a company quickly and efficiently.
Pretty straight forward, right? Last thing - as your host, it's my job to make sure your time spent here is valuable. So please, let me know if you have any questions or suggestions!
Alright, let's dig into it!
Opportunities in Work From Home Perks
“Like many companies, we’ve recently shifted to a completely remote company. One of the biggest problems we are now facing is shifting our company perks to this new WFH model. No longer are we catering lunch, offering all you can eat snacks, or utilizing our amazing office space.”
- HR Manager at funded tech company
Market Background/Opportunity Size
Employee perks have become a coveted hiring strategy for some industries - namely tech. So much so that some companies have started hiring employees solely responsible for making the company’s employees happy and providing them with perks - like workplace coordinators.
It wasn’t always this way, there’s been a recent shift towards companies offering some pretty sweet perks to get top talent - so it’s a young industry. Currently, here are some employee favorites that are being cut due to the pandemic:
On-site fitness studios or gym memberships
On-site snacks and beverages
Catered lunches
Office spaces w/ phone booths and ergonomic office equipment
Company outings and happy hours
After looking through a number of articles and doing a bit of math, I’m estimating that companies offering perks spend somewhere between $3,000 - $9,000/employee/year on these types of non-traditional perks. This doesn’t include things like health, 401k, or time off benefits.
This year we’ve seen companies like Twitter, Google, Facebook, and Shopify use the pandemic as an opportunity to accelerate the shift to remote work for their employees. But, this isn’t just happening with large tech companies.
While finding an exact number was tough, a study by Gartner estimated that of the 56% of US companies that can allow their employees to work remotely, 74% say that they are going to shift more employees to remote after the pandemic. Another study cites that by the end of 2021, 25-30% of workers will be considered remote. It may not come to you as a shock, but it looks like remote work is here to stay.
Major Players
Who’s already helping companies manage and offer employee perks?
Founded in 2013
Roughly 500 employees
$583.6M raised
Founded in 2008
Roughly 700 employees
Bootstrapped
Founded in 2009
Roughly 1,000 employees
$516.1M raised
Note: I know there are a lot more companies out there, but I’m selecting just these three because they are market leaders. Additionally, all of these companies do more than just manage perks - they offer a suite of HR tools.
The Opportunity
There are a number of opportunities in this space, but I’ll stay focused and call out the one that I see as the best return for the time/energy investment.
With people shifting to remote, a lot of companies are having to rethink how they do perks. If you can offer relevant perks while making it easy for the company to manage, I think you’ll have a winner. Here are a few ideas that I’ve got -
Delivery curated food boxes for employees to keep them fed during the days.
Schedule or give a stipend for cleaning services to keep their home (and now workspace) tidy.
Send a cocktail kit every friday (or once a month) so the team can do a virtual happy hour.
Offer a service that offers home-office make-overs. You can spruce up their living space to make it video call friendly, or provide them with better equipment.
Create an easy way to manage and order group lunch for everyone working from different destinations.
These are just some examples, albeit I think they’re pretty good, that you could run with. There’s a wealth of opportunity here.
Current Solutions
Here are some companies that are also trying to solve the perks problem.
Cherry offered a flexible perk program that allowed employees to choose perks that mattered most to them. They recently shut down and wrote a stellar blog post about why. While they didn’t directly offer any of the services I mentioned above, I added them because I think this a model that you could emulate.
SnackMagic allows employees to curate a box filled with their favorite snacks that is delivered directly to them. It’s unclear if you can set up recurring orders through their site, additionally, their branding could use some work, but overall seems like a solid company.
DRNXMYTH is a pre-made alcoholic beverage company. They offer, among other things, a way for companies to send their employee's drinks. This makes for the perfect virtual happy hour.
How to Execute
My favorite part about this idea is that I think you could hustle your way to $10k/mrr with relative ease. Since that’s what I would do if I were pursuing this, that’s the plan I’ll talk about -
Define Your Early Adopter: Let’s start by targeting HR Managers. Next, think about which HR Managers are already trying to solve this problem for their company. With that in mind, I’d look at who’s using interesting perks platforms (not just Gusto or Zenefits). My gut says a good place to start would be tech companies that recently closed a Series A - this likely means they are hiring and looking for ways to attract top talent. Pro tip: you might be able to reach out to the founders of Cherry to see the types of companies they sold to.
Use LinkedIn for Prospecting: Use tools like Dux-Soup and LinkedIn Sales Navigator to quickly start reaching out and testing marketing messaging. If you’re not able to even get responses from people, this is a good indication that you may need to pivot the offer or the solution you’re pitching.
Build a Concierge MVP: This basically means: don’t use a lot of tech to solve the problem, just do it manually to start. With this idea especially, you don’t need any fancy code. Find a few suppliers for the product or service, package it up, manually handle the logistics, and send a nice report to the HR manager at the end. This would allow you to test market risk, product risk, and channel risk really quickly and at a relatively low cost.
Start Small: Once you’ve got some traction, limit the number of companies and employees that you work with. Since this will likely be a logistics heavy operation, find 1-3 companies with 10-30 employees to run a pilot. This will give you an opportunity to easily work out the kinks and find the places where you can start to automate the process.
Challenges
Logistics heavy: This isn’t as straightforward as a typical SaaS tool. There are many moving parts which means it’ll be a bigger headache to manage. This is a solvable problem, but it’ll take more leg work to get everything worked out.
Is this just a “nice to have”? With everything that’s going on in the world, there are likely problems that will take priority over something like this. While there is a problem here, it may not be large enough to get companies to take action on a potential solution. I’d focus on getting an answer to this question as soon as possible.
Low defensibility: Part of the beauty of this idea is how easy it is to start up. But, that is also true for anyone that wants to compete in this space. This may not be an issue if you want to build a smaller lifestyle company.
Thanks for reading - now get out there and build it!
Catch ya next week,
Keevin ✌