Wednesday, July 22, 2020

Out of the Crisis #15: Lenore Estrada on her SF New Deal, serving the hungry, and civic engagement

"We knew that if we wanted immediate action, the only way to do that was with private money," Lenore Estrada explained to me as we talked about why she founded SF New Deal in the days after being forced to lay off most of the staff at her San Francisco bakery, Three Babes Bakeshop. SF New Deal partners with local restaurants to provide meals on a weekly basis to those who are the neediest among us. It's a genuine win-win: people need food, and we have massive unemployment at the same time.

When it became clear that waiting for government funding and support would take weeks, if not months, Lenore instead looked to her community for both, using her experience with the layoffs and her expertise as a small business owner to solve two of the massive problems crashing over our society. "Every week that we let go by, more people were closing their businesses sometimes permanently, more people were losing their job and becoming food insecure in a lot of cases." Like so many people have in recent months, instead of riding out the storm with her family--and in the middle of a pregnancy, no less--she simply stepped up to fill a need.

We talked about how her background has made her well-suited for this kind of civic engagement, her relationship to the tech world, how she scaled the organization so quickly and much more.

You can listen to our conversation on Apple, Google, or wherever you like to download podcasts.


A full transcript of the show follows the resources below.

Highlights from the show:

  • Lenore introduces herself and talks about her family. (3:07)
  • Layoffs and the earliest days of SF New Deal (4:08)
  • On the immense responsibility of taking care of people as an owner-founder (5:54)
  • Trying to fill the cracks in our social solidarity (9:57)
  • Lenore's background and how she ended up on the front lines of the crisis (13:00)
  • How Lenore started Three Babes (14:41)
  • How the mindset that helped her build the bakery came into play for SF New Deal (17:26)
  • How usual channels of public information were superseded by private channels connected to the tech world (19:47)
  • Funding SF New Deal (22:30)
  • The exponential growth in feeding people from week to week (24:55)
  • SF New Deal's community partnerships and the impact they create (26:25)
  • Why a private citizen entrepreneur is doing this work and how she's scaled it so fast (27:58)
  • The need for immediate action to address growing food insecurity in underserved parts of the city (31:41)
  • Helping to make staying at home to flatten the curve possible through food delivery (33:07)
  • Running SF New Deal with just two people--its co-founders (33:38)
  • What it's going to take to handle this humanitarian food crisis (35:58)
  • The problems with how it's handled even in non-pandemic times (38:13)
  • Ways to help, both locally and financially (40:25)
  • Why Lenore named the organization New Deal and how her experience helped her structure it (43:16)
  • The urgent need for civic engagement (49:49)
  • The importance of government support for community organizations (51:41)

Show-related resources:

Transcript for Out of the Crisis #15: SF New Deal

Eric Ries: This is Out of the Crisis, I'm Eric Ries. Look, I know it sounds cliché, but one person really can change the world. I have been the witness to it many times in my career because I work with startup founders. One visionary can fundamentally change their industry, build a new institution, change the fabric of our entire society. By no means am I saying that this is easy, or that anyone truly can do it alone, but it is possible. Now more than ever, we need people to step up and make a difference because the organizations and structures that were supposed to protect us, that were supposed to support all of our people, have in so many ways failed.

That means we have nowhere else to turn but to each other and there are people out there who are making a real difference. Lenore Estrada is one of those people. 2020 was shaping up to be a promising year for her bakery called Three Babes. They were growing, hiring new people, and breaking ground on a new location. However, like so many of us, her 2020 plans were put on hold due to the pandemic. She had to lay off most of her workforce and had to basically put her entire production on hold. She could've just buckled down and tried to wait out the storm, or even walked away from entrepreneurship all together, but she didn't.

She turned her experience with the layoffs and her expertise as a small business owner to solve two of the massive problems crashing over our society. There is a tsunami of hunger that is reverberating through our entire society more and more as the economic carnage is increased every day, and our small businesses, especially those in hospitality like restaurants, are struggling to make ends meet to stay in business to keep their people employed. So, Lenore started something called the SF New Deal. SF New Deal partners with local restaurants to provide meals on a weekly basis to those who are the neediest among us. It's a genuine win-win, people are in need, they need to eat, and we have massive unemployment at the same time.

This is just one example of the kind of thing we're going to have to get good at in the months ahead. We're going to have to find ways to put the unemployed back to work doing socially useful things, laying the foundations for future prosperity. We have to find idle restaurants and get them feeding Americans. We have to find idle factories and put them to work building PPE. We have to take college students and retirees and so many people who have nothing to do right now and get them tutoring our children who can't go to school. So, SF New Deal is important not just for the work it does directly, but as an archetype of the kind of leadership we are going to need to get out of the crisis. Here's my conversation with Lenore Estrada.

Lenore Estrada: Hi, my name is Lenore Estrada. I'm the founder and executive director of SF New Deal. We are paying small businesses to make and deliver meals to hungry people here in San Francisco during the COVID crisis. Prior to COVID, I was and still am the founder and owner of Three Babes Bakeshop, a small bakery business here in San Francisco.

Eric Ries: A delicious one at that.

Lenore Estrada: Thanks.

Eric Ries: First, in the interest of full disclosure, also a friend of my sister's.

Lenore Estrada: That's true, Nicole is a good friend of mine from college.

Eric Ries: We'll give her a shout-out here. She's awesome.

Lenore Estrada: I love Nicole.

Eric Ries: So, these have been difficult times. Let's start just with how are you doing? How are you coping? How's your team, how's your family?

Lenore Estrada: It's been a lot. In some ways it's been pretty stressful. I'm a mom of a 19-month old boy and also I am pregnant. I'm about halfway through my pregnancy.

Eric Ries: Oh my goodness, congratulations.

Lenore Estrada: Thank you.

Eric Ries: But, the stress I can imagine.

Lenore Estrada: It's been really inspirational in a lot of ways. We started SF New Deal at the end of March. At the beginning of March, I had to lay off 20 of 26 workers at my small bakery, which was pretty stressful and sad, really hard, and there was also a lot of flurry of activity around just shutting everything down. We're still operating delivering pies and doing some pickups at our kitchen, but our staff is greatly reduced. We also were on the cusp of opening a new retail space in San Francisco's Mission District and that construction site had to completely shut down, so here in San Francisco the shelter in place order was announced and it was announced at noon to begin at midnight. So, we actually had to rent a giant moving truck with a lift gate, move massive amounts of equipment with just the small staff we had left, more than one 900-pound oven for example.

So, that was pretty stressful, and then since then I've been volunteering with SF New Deal full time. We launched on March 23rd and it's been a lot of very long days and nights. I still own my small business, which is being run primarily by my director of operations, but I've been working a lot of times till two or three in the morning, so definitely a lot of late nights and a lot of just stress and urgency.

Eric Ries: Next time someone criticizes entrepreneurs for whatever perceived slight in our society, we'll all be thinking of this story.

Lenore Estrada: Thanks.

Eric Ries: And, just the herculean efforts that you have put in, not just to your own business, and to your own community, but obviously trying to take care of the whole city--we’re immensely grateful.

Lenore Estrada: That can be said for all of the people who are participating with us. We have 35 volunteers, many of whom are volunteering full time and are people who have become unemployed recently in the wake of COVID and people are devoting 40 to 60 hour workweeks in a lot of cases, and many of our chefs are not paying themselves just so that they can keep their staff employed and they're working really long days, but definitely it speaks to the care that people who employ others are feeling for the individuals that they're providing paychecks for. It's not just paychecks, there's actually a lot of care about people's well-being and their families' well-being.

Eric Ries: It's an immense responsibility, I know that. I think about it every day. It's right up there with the feeling that I have about my biological family, and I don't think there's been enough conversation about those bonds and the stress and the emotional connection that we all feel, even the discussions around layoffs and the need to cut costs and extend runway and all that has been very clinical. Just say a bit about what it was like to have to cut back your staff to such an extreme degree.

Lenore Estrada: It was terrible. Cutting back my staff was so difficult. Definitely, I would say the toughest week I've ever had as a business owner, tougher than the death of my own parents I would say. I cried at work many times. At first, I came up with a plan where I could just reduce hours by a third and lay off people who mostly still lived with their parents, or for whom this was a second or part-time job, and then it immediately became apparent when almost all of our customers called to cancel orders for the next one to three months, and now it's looking like until the end of the year. It just became immediately apparent that we were going to lose 80 to 90% of our revenue for a span of several months and there was just no way for us to keep most of our staff.

So, we quickly went from our plan A to our plan D and in some cases I had to have multiple conversations with the same people in the same week from reducing their hours to reducing their hours further to cutting them completely, and at some point I had to cut people who had benefits with me and were losing benefits. Some of them-

Eric Ries: That's the hardest always.

Lenore Estrada: Really hard, and people who had families to support, and some of our workers aren't able to apply for benefits because of their immigration status, and so it was really terrible and on top of that if you're cutting someone who's losing health benefits, for me I felt this tremendous weight because I was worried ... there are public programs people can apply for, but I was worried about some of my workers contracting COVID just going to SF General Hospital to apply for benefits.

So, we luckily have a few members of our staff who speak both Spanish and English and could assist people in applying for benefits and we've been providing some food assistance as well to our Spanish speaking staff, but definitely I was having to make really terrible choices about who was staying and who was going and then even of the people who stayed, many of my staff members, all of them immediately were cut to 60% of what their previous hours were and I made personal loans to some staff members who were supporting family members. I had one staffer in particular who usually works two jobs, and she helps support her mother who has chronic health conditions and she came into work in tears because she could no longer provide support for her mom to buy medication, worried she was going to end up in the hospital for something that could've been easily prevented. So in that case, I just offered her a personal loan, but I definitely feel a strong bond with all of my staff members and it was devastating for me to have to cut them.

Eric Ries: A very wise person said to me that just as the pandemic, which is COVID-19, is more dangerous to individuals that have a preexisting condition, the pandemic is also more dangerous to societies that have preexisting conditions, and so much of what you're describing, these are the cracks in our sense of social solidarity and the systems that keep our society running are now becoming full on ruptures and our ability to ignore them in the past is not going to be so true going forward. We're either going to heal or fall apart.

Lenore Estrada: I hope so. I think it's been interesting for me doing the work with SF New Deal of getting meals to people. The normal community that I'm accustomed to working with is the community of small business owners here in San Francisco and so I've built on that work that the people we are also serving, our hungry population is here in San Francisco and there definitely is a big divide in experience between people who have a job where they can continue to work from home and collect a paycheck and the hungry people who we are serving, and I think some of our community partners have had just a really tough time emotionally seeing these conversations about society opening back up when within their own networks, more and more people are getting sick and dying.

Eric Ries: It's unconscionable. Let's just cut right to the chase. The idea that we're going to prematurely open up, I think this is a hysteria bordering on mass delusion and extremely dangerous.

Lenore Estrada: And, I think it's tough because in some of the communities we're serving, the entire population, they're wage workers and they rely on income from going into work some place, but their experience of what the shutdown has been has just been so different from most of the people who are in my usual social circle who work as a lawyer or at a tech company. Most of those groups might know someone elderly who has passed away at this point, but in general nobody they know is getting sick. At our partner level, many people are getting sick or hospitalized, even some of the volunteers who are working with the churches for example. The communities where you're seeing a lot of infection and spread are these communities that have fewer resources, where people have to go to work, where people have food insecurity.

And so, for them it's very real because lots of people around them are getting sick or have died and then for a large portion of the population, they don't really know anybody who's gotten sick or died, so it's just been a big contrast.

Eric Ries:Those fault lines, the preexisting fault lines in our society now are so much more evident, and yet because we all live in our special filter bubble I do think it's unusual to have someone like you, who actually acts as a bridge passing across both of these worlds. Talk a little bit about your background. How is it that you came to be in a social circle with so many lawyers and tech workers and people like that while also running a bakery and being on the ground in a ... how'd you find yourself in a circumstance where you wound up on the front lines of this crisis?

Lenore Estrada: So, for me actually, I think my whole life I've just interacted with a wide range of people. I'm from Stockton, California. I'm from a very working class family and one of seven kids. We did not have very many resources at all and my dad was one of 13 children. My dad's family were migrant workers, they were sheep shearers. My mom was from a middle class military family from the South, and so luckily my parents cared a lot about education and I grew up around, unfortunately, a lot of poverty and violence and just seeing people whose options were really limited by the circumstances into which they were born and also feeling a strong commitment to trying to help my community and working really hard to change my personal set of circumstances.

So, I ended up going to college at Yale, that's where I met your sister Nicole, and so I would say most of my friends ended up in more white collar or professional jobs and also a lot of them ended up starting companies. I tried a bunch of different jobs after college and I ended up just trying entrepreneurship and something that seemed accessible to me was starting a bakery because I had enjoyed baking when I was a kid, and so it just so happened ... I think it's actually more strange that I ended up with a bakery business and that I have a personal circle that is made up of people who aren't like that, but I started this small business, I had no money.

So, we actually started with $10,000 we raised on Kickstarter in 2011 and because we had no resources, we just clawed our way up, and actually, this is funny, I remember reading The Lean Startup and just thinking, I should really keep my situation asset-light here.

Eric Ries: Oh, really?

Lenore Estrada: Yeah, seriously. I was super committed to just not really investing in anything at the beginning, and just figuring out how it would work. So, we had this $10,000, we rented a commercial kitchen for 600 bucks a month in South San Francisco and we did these pop-ups out of a shipping container. I thought, if we did a popup we can use the space that's fallow and for the owner of that space, any money they're making, it's just wasted space. So, we just went into this café and they had a shipping container outside that they were using for storage and we just sort of pitched them on using it during the weekends to make this mini pie shop and they let us do it, and so that's how we launched the company.

Eric Ries: What a great MVP.

Lenore Estrada: And so, it was very popular, we got a lot of love from the community. And so, we just built from there and over time I definitely have been able to interact with lots of different kinds of people, which has been really neat. I think as a small business owner you see problems and people at a bunch of different levels in society. So, the concerns of my workers become my concerns. Also, the concerns of my clients become my concerns, and so you're sort of exposed to all these different points of view and have a way to just understand the challenges that lots of different kinds of people are trying to deal with and that's been really interesting for me, so sorry, that was long-winded.

Eric Ries: No, don't apologize. This is a podcast, that's the whole point. The reason I wanted you to tell that story, and first of all, thank you for the kind words--that means a lot to me whenever The Lean Startup can be helpful to someone that's starting something.

Lenore Estrada: It's funny, I kind of forgot about it, and then we were telling the story, I was like, "Oh yeah, here we go."

Eric Ries: There you go, but the reason I think it's important for people to understand the mindset that you had in building this baking empire from scratch is because history repeated itself in kind of a funny way when you were forced into service through SF New Deal. So, talk about that transition. When did you first conceive the idea for SF New Deal and what were those early days like?

Lenore Estrada: So, for us at the beginning of March, we noticed that orders were really slowing down and I think because I had a personal network that included people who were tech CEOs, who were really the kinds of companies that were my customers, I had access to information about what was happening in a way that I wouldn't otherwise have had. So, what I'm asking the people who are personally ordering from our company, "Hey, what are you seeing on the horizon for the month of March?" Everyone's response was nothing has changed, it's the same as ever, but if you had access to a CEO, that person will tell you, "We're about to make everyone work from home." Or in some cases with Facebook, I had friends who had already been working from home since late February and so that gave me the information I needed to act.

Eric Ries: And, those companies were your corporate clients of the bakery, is that right?

Lenore Estrada: That's right, some of them. Facebook is not a client of mine, but I just happen to have a friend who works in IT there and told me that they had already been sheltering in place because they have a lot of workers in Seattle, but my friend Emmett is the CEO of Twitch. Twitch is a customer of ours and I saw him at a dinner and he specifically told me that they were about to be closed for a month. So, that was actually really helpful. I think the tendency from everyone is just to wait longer because cutting people from your team and making these big changes is extremely painful and there is some risk. If you cut too many people and then it turns out it's not as big of a deal, then that's also problematic.

So, I think the tendency is just to wait to do the painful thing, but since I had the information up front about how difficult the endlong, the period of time was going to be when we had reduced sales, I was able to act immediately.

Eric Ries: Can we just comment for a second on how weird it is that in the way that this pandemic unfolded and what an indictment it is of our usual channels of public information? Because I've heard versions of this story many times now, that people who had privileged access to the tech community or to tech companies were better informed about what was going to unfold than the public at large, and how interesting the tech companies in particular were the ones who had the early warning.

Lenore Estrada: I don't know if it's that they had an early warning, but they need an early decision. So, I do think the tech companies here certainly took leadership in just deciding this is good for public health. The right thing to do is to make people work from home.

Eric Ries: And, we've gotten used to it, what a bold choice.

Lenore Estrada: I don't think that it was because they had any kind of privileged information. I think they were just looking at the numbers of how a pandemic works and just made the scientific decision, hey, this needs to happen because this is for everyone's best interest, and they acted. I do think something I've seen is that private actors, in this case the tech companies are able to move more quickly and make decisions that affect huge groups of people. Tech companies are huge employers here in the Bay Area, and the fact that they took leadership in having people work from home before the shelter in place order made a huge difference here in the Bay Area in the rate of spread of the virus.

Eric Ries: And, they probably saved a lot of lives inside and outside the tech community.

Lenore Estrada: Definitely, so a definite yes there, and I think we were lucky here in the Bay Area that tech companies are big employers and as a result the decisions they were making had these massive effects on public health.

Eric Ries: And, they chose to put people first rather than in some other industries where that wasn't the first impulse.

Lenore Estrada: Right, and the other thing is tech companies were able to switch to a work from home model and be largely unimpacted, so a lot of other companies can't do that and still stay open.

Eric Ries: Or at least convince themselves that they couldn't, although we're seeing a lot of creativity now.

Lenore Estrada: Exactly, but I think it is easier. My husband has a company called PeerWell, they prepare people for surgery and help them recover from surgery and they were already a distributed team, so for them it was really no switch over cost. So, I do think tech companies have an easier way to switch over to a work from home model than many other companies do, which allowed them to more quickly transition over to that model.

Eric Ries: So, go back to that conversation with Emmett because as I understand, he was one of the early funders of SF New Deal as it turned out.

Lenore Estrada: Yeah, I would say Emmett is definitely one of the founders of SF New Deal. He had reached out a number of times before the shelter-in-place to see if there was any way that he could help my company, Three Babes, to weather the storm and I had been very busy just shutting down different parts of my company and laying people off and hadn't really followed up. So, I would say a few days after the shelter in place, he reached out and he and his father had this idea of getting direct support to small businesses by paying them in some way to keep working, so that they wouldn't just shut down before government aid could come through.

I had been looking for ways to find private money to pay for food just for my business to donate to hospitals or some place like that. So, I had already been having conversations with UCSF and some other people looking for potential recipients of food. So, when Emmett reached out, I realized that rather than trying to do it for Three Babes, I should just not include my company and that we could have a big impact on the small business community at large in San Francisco because he was willing to commit $1 million to this cause.

And so, I thought, okay if Emmett will commit this money, we can start right away and we can probably raise more money and just start getting resources to people and even after a few brief conversations with leaders here in San Francisco, it became apparent to me that no government aid would be coming for many weeks which was baffling to me back then, but now I guess it makes more and more sense now that I understand more about how just funding and politics work here in San Francisco specifically, but probably more broadly.

So, San Francisco had raised this Give to SF fund, but none of that money had been distributed, and most of it still hasn't been distributed to anybody so far. So, immediately we had this goal of just springing into action and starting to disperse this money to the small business community. And so, within five days of Emmett initially contacting me, we started serving meals. We started with 1,000 meals the first week delivered through one community partner to three sites and then by the next week we were doing 18,000 meals working with 23 restaurants and had expanded the number of sites and community partners to over two dozen and then at this point it's been eight weeks, we're in our eighth week now I guess, and we've delivered 137,000 meals, more than that and $1.4 million have been dispersed to our restaurants and we've had no turnover really. All the restaurants who signed up are still working with us.

Eric Ries: Of course, probably the easiest product you ever had to sell.

Lenore Estrada: That's right, there's no better product market fit than giving away free food in a pandemic.

Eric Ries: And, I don't mean to make light of it. It's just so rare that you have these opportunities to find a true win-win-win situation where here we have restaurants that want to be able to work and have a food supply chain that is in crisis while a massive tsunami of hunger is spilling over our society. So, to be able to take those two opportunities and merge them with philanthropy, it's a really brilliant model.

Lenore Estrada: Thanks, I think it's not a super creative model I would say, but it has allowed us to just build on the existing infrastructure of chefs who are able to make lots of meals, and then for us it's been really important to partner with media organizations who have deep knowledge of the people they're serving. The partners we're working with are ... we have 18 different partners, but we have this amazing group of black churches, their ministers and volunteers just have decades of experience getting resources out to their communities. Working with UCSF's psychiatry department, they have an army of over 100 case workers who go out into the city and provide medication and food to people who are living in SROs or in some cases are homeless.

We're working with people who have recently been released from detention centers and social workers who are here to help them, and so we're sort of just using those existing community partners' relationships to quickly be able to understand the need and reach the people who really have a lot of need for resources and aren't being served.

Eric Ries: I think it's going to be a surprise to some people listening why you, a seemingly random private citizen, are the one doing this and not our government. Just explain, why does it make sense to have an entrepreneur doing this and how have you been able to scale so quickly?

Lenore Estrada: Honestly, I'm kind of surprised that a random entrepreneur such as myself is the one doing this as well. I felt that by now the government-

Eric Ries: Join the club.

Lenore Estrada: I thought by now the government would have already ... I thought maybe we'd be doing two to three weeks of mass feeding and then after that transition to a longer term plan to support the small businesses. The crazy thing is, as I mentioned, we're into our eighth week of service. Each week since week two we've been providing between 18,000 and 30,000 meals a week and they're to people who are not otherwise being served, which is crazy.

A number of things, the city of San Francisco has a lot of stuff they're trying to do. So, not only did they have to shut down the schools and figure out how to distribute food through the school sites who really aren't equipped to provide the volume of meals that they're providing. They're trying to house people who are unhoused in congregate sites, in trailers, in hotel rooms, and they need to find out a way to feed them. And then, they've had all these people who are COVID positive who they need to help shelter in place.

And so, for the first I would say six weeks of the crisis, the San Francisco city government was only focused on feeding people who were already COVID positive, which is baffling, but I think also there's just at some point a lack of ... they didn't come in with really a lot of existing organization or execution knowledge on the many things that they're being asked to do. So, I think they were just triaging and then trying to deal with the first problem first.

The other thing is because the government has this responsibility for running a fair and transparent process, the process takes a long time. So, they put out this RFQ, I would say three weeks ago at this point, they put out two of them, a request for qualification where you could apply to be someone who's feeding these populations that need food and they have to have a waiting period while people apply and then they have a deliberation period, then they make preliminary assignments, and then they assign the contract.

And, when they assign a contract, they have to allow a period of protest where anyone can contest who has been assigned a contract. So, they have to provide this very transparent process, but unfortunately there's really no way to make that go faster it seems like. So, even in a pandemic, you had the process for assigning the paid responsibility for providing meals has taken over four weeks, and that's just for the first tranche of people they're feeding, which is people who were previously unhoused, who have been moved to hotel rooms, and congregate sites.

So, the government is just not going to act quickly. That's just what we knew coming in. I as a small business owner, I laid off a bunch of my staff and then the city announced this program to be able to pay 40 hours of sick time for any worker in San Francisco that works for a small business. So, I was thrilled because I thought, oh, maybe I can provide another week of pay, but it took three weeks for the application to even come out to apply for that money. I think I received the first amount of that money last week, which is eight weeks after I had laid off my staff members.

So, the speed at which they're able to deliver is very slow and so we knew that if we wanted immediate action, the only way to do that was with private money, that every week that we let go by, more people were closing their businesses sometimes permanently, more people were losing their job and becoming food insecure in a lot of cases, and the people who were losing their jobs were for the most part living in the areas where COVID was spreading the fastest, where there are the highest infection rates and the highest spread.

Eric Ries: At great cost to society in the end.

Lenore Estrada: Exactly and at great cost to just their own lives. The SF African American Faith-Based Coalition, which is the black churches that we're working with, they were one of the first partners we got connected with, but they were working with a great sense of urgency because if you are black and you end up in the hospital you are much more likely to die or have very serious health outcomes and those populations already have a number of preexisting conditions. They have very high rates of hypertension. A lot of the people who are living here in San Francisco are elderly and so they had no way of getting food, and how can you shelter employees if you have no way to get food? There's just no way.

Eric Ries: It's totally self-defeating to focus on one aspect of the response and neglect of these others. You wind up making the very problem you're trying to solve and another area of the response worse.

Lenore Estrada: Exactly, so for us it was just as staying home at the beginning was essential to flattening the curve of infection, so to was actually making the staying at home possible, and the fact that the city was only taking responsibility for feeding the people who are already COVID positive was crazy because there weren't even any tests available. So, how do they even know who's COVID positive until people actually end up in the hospital? It was definitely very intense the first couple of weeks, but actually the reality is my other co-founder is Jacob Bindman, he just graduated from college in 2019 and he's been running all of our service operations and so the first week Jacob and I were the only volunteers for SF New Deal and somehow we managed to get a bunch of other volunteers to step up, but in one week we were able to deliver 18,000 meals, went from zero to 18,000 and we're just two random people.

I have experience in food and I guess so does he, but he's been working for me since he was 15, but come on, the government can't do it? It just seemed crazy, but the reality is they didn't do it and it's taken them a while to ramp up and so in the interim, the people who we're feeding, we're delivering one substantial meal a day and that's the only meal that most of them are receiving. We're also working with a number of other organizations to make sure to understand the overlap and there's extremely little overlap between the meals that we are providing and any meals being provided by other service providers, so that just speaks to the extent of the need.

Eric Ries: I really appreciate the sense of urgency that you have brought to this and I've personally taken a lot of inspiration from the model that you've pioneered here and I know several organizations have, including one as we've discussed before, that I'm involved in that has been looking at this to try to figure out what we can learn from it, and yet I have this feeling like we're not even close to the scale that we're going to need to handle the tsunami of hunger that is coming. You've been talking about working with these existing service organizations and helping the city in its inability to serve the neediest among us, which I’ve got to say is just incredible work, so thank you for that, but what about the millions more newly food insecure people, some of whom thought of themselves as in a pretty secure financial situation practically five minutes ago, what is it going to take to handle that humanitarian need that is crashing all around us right now?

Lenore Estrada: Well it's, as you know, a complex situation. I do think, gosh ... I think technology can actually be quite helpful in understanding and helping to address the need. One thing that I've been surprised by is just the lack of overall information that the government has about who needs food and who specifically those people are and where to find them. So, we've been working with USDR, you and I have had conversations, but we've been working with a number of different parties who are working to build technical solutions to understand and track need, so you can understand just who you need to serve, who's not being served, and then of the people who are providing services, where those resources are going. I do think there is some amount of hoarding by some groups and then not enough food for other groups.

Eric Ries: Terrible.

Lenore Estrada: I also think that a lot of the people who have great need here and who until recently were supporting themselves don't necessarily know where to look for assistance.

Eric Ries: That's a huge problem.

Lenore Estrada: Here in California there are lots of programs like CalFresh for instance where we just have a very low uptake. We have a low sign up rate for that in the state of California because it's kind of complicated to sign up for.

Eric Ries: We'll put links in the show notes by the way if anyone knows someone who is food insecure and needs help. There actually are a remarkable, but labyrinthine patchwork quilt of services that are available, including a new one called Onward California, which we'll include a link to and CalFresh and some preexisting ones as well. There is help available, but it's so hard to access and it's infuriating to me that we put this cognitive tax on those who are least able to bear it to find support.

Lenore Estrada: Right.

Eric Ries: It just makes no sense.

Lenore Estrada: It doesn't make any sense because we're all worse off for it. So, I think just-

Eric Ries: And, especially in a pandemic, right?

Lenore Estrada: Yeah, of course, but even in normal times, there's just no reason not to have 100% subscription to CalFresh. Almost everyone has a cellphone, but you have to make solutions that are easy to sign up for, and we've found a lot of success just partnering with existing community organizations who have networks of trust because I do think we see especially in communities of color and even more specifically in the Latinx community, it's a very diverse group of people with different circumstances, but if you were not born in this country, a lot of times you just aren't hooked in to the network of support that you could be getting, and so for us, even our own Spanish-speaking workers who have been laid off, we are reaching out to them and we have a specific person working with them to help them sign up for benefits and get support.

This population is really hard to reach, and so it doesn't need to be that way, but I do think there has to be a lot of just working within communities to understand what the actual need is. I think waiting for a federal solution that's going to work for everyone is a fool's errand because I don't think that there is. There's not going to be a solution that works for everyone. I think it's finding local community solutions and making those really effective is our best way to get full penetration.

Eric Ries: Those of us who are on the sidelines right now waiting for this problem to be solved are going to feel a lot of shame in the weeks and months that come because it's going to be bad and we've made some bad choices as a society that are causing this problem not to be solved when maybe under other circumstances it could have been. So, for those that are hearing us now and want to get in the fight or are realizing that this is not a problem that just magically someone else is going to solve, what would you suggest to them if they want to be helpful?

Lenore Estrada: I would say that people are listening across the country, and so I would suggest trying to find ways to get involved in your local community and that might be different depending on where you live. If you want to come check out our website, it's

Eric Ries: And, if people want to donate, are there specific donation instructions?

Lenore Estrada: Yeah, they can just donate on the website, or they can write in if they want to give through a donor-advised fund or give a large amount, but-

Eric Ries: You have a fiscal sponsor?

Lenore Estrada: We do, yes. CUESA, which is the Center for Urban Education about Sustainable Agriculture, they support a lot of small farming here in San Francisco and education around the food system. They've been an incredible partner and are doing lots of great work to help support the network of farmers that are a very important part of our ecosystem here and across the United States, but we've actually done phone calls and advising for people looking to start versions of SF New Deal in their own communities. We've talked to people ... there's a New Deal Marin that's started, a group in Vancouver who's doing similar work.

So, we've been having a lot of conversations with people to just get something going in their own community, but I would just recommend looking for a local solution that is adjusting food insecurity or helping to support people who are vulnerable in your own community and looking to the people who are needing the support to understand what the actual need is, so just really centering the populations in need when designing a solution. I've talked to dozens of people who have some app that allows people to volunteer who put a bunch of work into something and then at the end are like, "Hey, I have these people who signed up to volunteer, but I don't know who the people are who need help and nobody is signing up from needing help group.

And, that is because you've designed a solution that works for you and your friends who are most often millennial people who are upper middle class and very tech-savvy and that solution is probably not going to work for someone who doesn't speak English, who may not even have a smartphone, or if they do have a smart phone they don't necessarily trust whatever site they're finding online, so you have to actually ... I would just recommend working directly with community organizations in your location where you live to understand what it is they need and help them provide that.

Eric Ries: You picked the name New Deal, which I think is so evocative, obviously a reference to FDR and in a different time. Talk a little bit about why you made that choice and why'd you choose to make it San Francisco specifically.

Lenore Estrada: So, I live here in San Francisco and Emmett, he also lives here. He's originally from Seattle, but this is his home, and so we wanted to be able ... the scope of the need is great, and so we wanted to be able to make a real difference here in the place where we live and so we decided to just narrow the focus to small businesses here in San Francisco. We would love actually to be able to longer term support other kinds of small businesses and when we're talking about our six months to two year trajectory, we're thinking about other ways to loop in other types of small businesses.

There's immediate need for food and immediate need for restaurants particularly because they employ so many people here to have help staying in business and employing people, so that their own workers would not also become food insecure. So, we just launched with this program to support small food businesses and the uptake was so huge both from the need side of the people who are hungry and also from restaurants who wanted to sign up.

So, we have many thousands of meals on our wait list each week and also hundreds of restaurants. We had to close the wait list because we were getting so many sign ups and we couldn't onboard people without knowing that we could provide financial support for them. So, I suppose some models are very broad in the number of restaurants they're supporting, but are giving less support or support on a less consistent basis. For me as a food business owner, I know that it does you no good to have one huge order and then no orders for three weeks, which was what was happening to these restaurants.

They were closed, they were doing very low volume in takeout, and then every once in a while someone would come and buy 300 meals from them. That makes it super difficult and I've been in the situation, you get a big order, you need the money, and so you pull multiple all-nighters yourself because you have no way to hire people in such a short timeframe and then you have no way to employ them longer term-

Eric Ries: It's a production process, you need production leveling.

Lenore Estrada: Exactly, so I guess one reason why I think I specifically had the ability to help with this problem is because pies are extremely seasonal. We some days of the year literally sell 3,000 pies in one day and then sometimes we sell 10 pies. And so, we had to figure out ways to meet the spikes and also to just build, over the long term, a business model that was more resilient and allowed us to actually have a good number of staff that we could guarantee work to throughout the year, but that takes time.

And so, similarly here, there's the immediate need of just meeting the spikes in food insecurity and in cash needs for businesses and then also the need to longer term find a different model for people to grow into that will allow them to exist long term and build something, so that's what we're trying to do here. We chose the name SF New Deal, yes, you got the reference to FDR, but I guess our goal was to put the population to work, harness our collective power to show that we don't have to settle for waiting 10 weeks for the government to get aid and just settle for what that does to our community. We actually can work together to invest in ourselves and build something and weather this together and overcome it. And so, I think that was the spirit behind the name. We wanted a name that had just a big vision built into it.

Eric Ries: I'm really glad that you mentioned that because I've been thinking a lot about the WPA and the specific programs of the Great Depression that took advantage of the fact that in a depression, in an economic reset like this, many of the input factors of production that we're used to thinking about particularly labor cost, in the boom times cost of capital gets cheaper, but everything else gets more expensive. Now, we're going to see the reverse, so all of a sudden it's difficult to raise money for things, but there's incredible amounts of labor and other input factors available and food in this case.

And so, we're going to have to find a way to repurpose all of our production facilities across many industries that are idle and build huge WPA style programs. There's really no other way, and so obviously in food we have seen this incredible boom or bust phenomenon in food where some farmers, some producers in the grocery supply chain have their inventory flying off the shelves, but if you serve convention centers or restaurants or other parts of the supply chain, we're seeing farmers bulldozing crops, so that's ridiculous. We have incredible skilled people in restaurants and cafeterias across the country with nothing to do, but we're seeing the same problem in PPE where we have idle manufacturing facilities that could be making masks and gowns right now, but are not for want of relatively modest investments and re-skilling and production changeover.

Think about all of the homeschoolers, the involuntary homeschoolers, hundreds of of millions of them who could use online tutoring and story time and all of the sanity producing outcomes that would come from that and all of the retired people and artists and college students who are sitting at home with nothing to do. I could do this all day. So, what do you think it's going to take? You've been on the front lines of actually building a WPA style program from scratch and I think one big change in 2020 versus the 1930s is that these programs are being built organically bottoms up rather than tops down because, well, for all the differences in leadership and economic circumstance between then and now. What do you think it's going to take for us to really build at the scale that is needed to address this crisis?

Lenore Estrada: I think that the thing that's really necessary is civic engagement from everyday people who have an understanding of their own problems and the problems in their community coming together to find solutions that are going to keep our economy going and be for the benefit of our society and I do think that longer term you do need government's involvement and money to help support that. So, here in San Francisco we have this commitment from Emmett for $1 million. That has already been spent. It was important that we do that.

Eric Ries: And, thankfully you spent it. That was the right thing to do unequivocally.

Lenore Estrada: Right, no one else was spending anything, and so people weren't getting food and also businesses were closing.

Eric Ries: And, kudos to him for just stepping up and writing the check at a time when others were not.

Lenore Estrada: That's right, so we are still in need of private donations. The government money is beginning to open up and in terms of funding a longer term solution, I do think that government support is really important because when we talk about businesses needing a longer time horizon, for us when our partners started with us we told them, "Hey, we'll be providing you with meals for 10 weeks." Or to businesses, "We'll be giving you orders that are stable for 10 weeks, so you can plan to keep people on staff until you get PPP money." Which--I think around 60% of them have gotten PPP at this point.

So, it was meant to be a bridge, but in terms of planning for long term business is going to be affected and employment is really going to be affected for a couple of years. So, now that we're seeing some of these government contracts start to open up I do think the government providing support to community organizations who are finding ways to keep people employed and keep resources flowing and doing that on a two-month, six-month, 18-month time horizon is what is necessary to bridge people through, so that they can build a sustainable business model that will allow them to be self-sufficient moving forward.

So, I think it takes a lot of cooperation and I think I'm seeing why the government is so slow at everything, and a big part of that is just the need to try to find ways to make sure that there's not abuse of the system or grift and unfortunately the way the government has of doing that is by making everything extremely bureaucratic and that means that only the biggest actors in general can apply for government money and also that they have these very onerous checks and balances that just take a long time and are complicated to navigate.

Eric Ries: I've worked with many governments during the boom times who wanted to do digital transformation and every one of those projects, procurement is where it goes to die, and I can't tell you how many executives and cabinet secretaries and leaders of various stripes, mayors, and governors, lieutenant governors, you name it, who had to make the choice of is it really worth tackling that problem or should we just punt that to the future, chose the punt and now those cities and the states are paying the price as you've really described.

Lenore Estrada: I think what we found is that we're able to move quickly because we're building on trusted relationships within communities. Vinny, who's our guy that heads up community, he's the community organizer by background, he always says we're moving at the speed of trust. And so, I do think in some ways technology can become a way that you are able to verify things or have an understanding of the whole picture in a way that's both low cost and fast. That takes time to build, but I guess for us the thing that's been so efficient has been just accessing the people who already have knowledge about what's going on.

So, just really getting more civic engagement, more people who truly care about solving a problem, engaged in helping solve it, and understanding where resources are going and identifying where the problems are. For us, those are the people who are going to make sure that the money is distributed in an efficient way because they actually care about the people that they're serving, and so I just think you need more engagement from everyone and that's how you get the accountability. The volunteers and the community partners we're working with truly care if food is wasted because they know that there are finite resources and that some people are still not getting fed.

And so, if they find out that one person is hoarding food, there's a true motivation to make sure that that doesn't happen because one person hoarding four people's meals means those other three people get nothing and that's a devastating outcome if you actually care about the people you're serving.

Eric Ries: I want to thank you so much for coming on and for talking about this. That's just such a perfect place to wrap because I think people need to really understand this problem is immense and the only solution is for ordinary people to step up and take a leadership role. The cavalry is not coming. There's no other solution to be had and we are the actors that we've read about in history books. We have to take inspiration from our grandparent's generation who did this once before and they couldn't wait. There wasn't somebody else magically going to solve the problem and we have the luxury of their example to inspire us and now thankfully your example.

Lenore Estrada: Thanks.

Eric Ries: I hope many people will hear this and take inspiration from it.

Lenore Estrada: I hope so too, thanks. I think for me it's been my honor to serve. I think I normally have my staff of 26 and work to invest in my team and help them see their own possibilities to achieve more and I've been really inspired by the group of volunteers and everyday San Francisco residents who have been giving money or volunteering to drive food or drive PPE to distribute to restaurants and just get involved to help support our own neighbors here and it's really been my honor to have the privilege of serving.

Eric Ries: This has been Out of the Crisis, I'm Eric Ries. Out of the Crisis is produced by Ben Ehrlich, edited by Jacob Tender, music composed and performed by Cody Martin, hosting is by Breaker. For more information on COVID-19 and ways you can help, visit If you have feedback or you're working on a project related to the pandemic, please reach out to me on Twitter, I'm at E-R-I-C-R-I-E-S. Let's solve this together.

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