Introduction:

This week, Shawn Busse, Paul Downs, and Jennifer Kerhin talk about the challenges of communicating with employees, especially in the post-pandemic world. It’s hard enough to get aligned on mission and vision, but how do you connect with an employee you’ve never actually met in person? Is that even possible? We also discuss Jennifer’s realization that she has over-performed on sales but under-performed on marketing, which is part of the reason she’s re-doing her website. “I need a higher level of prestige,” she tells us, “so, better copy, better photographs, an all-around more sophisticated look. What we had was mom and pop. You know, Wix.” Plus: the panel tackles a question posted on the small business subreddit: “How large can my margins become before I’m ripping off my clients?”

— Loren Feldman

On this podcast episode, Taylor St. Germain from ITR Economics joins Jack Stack and Kylie Jackson to discuss the power of using accurate economic data to inform your business decisions, forecast obstacles, and take advantage of opportunities in the future.

Introduction:

This week, Shawn Busse, Jay Goltz, and Jennifer Kerhin talk about that difficult transition most growing businesses endure when the owner can no longer handle all of the most important tasks herself but also can’t quite afford to hire the people she needs to lighten her load. It’s part of the reason Jennifer, as she’s told us in previous episodes, has been working 12-hour days, six days a week. It’s a challenging transition, and it has a name: It’s the “valley of death,” says Shawn, who compares it to crossing a desert. We also discuss how big the owners want their businesses to get, why important tools and processes seem to break with every $500,000 of revenue growth, and what constitutes the proper care and feeding of salespeople. Plus: Jay has an idea for owners who are having a hard time selling their businesses. The idea involves selling the business to a key employee in a transaction Jay is calling a WE-SOP. Get it? It’s kind of like an ESOP, but it’s a lease-to-own version of an ESOP. A WE-SOP.

— Loren Feldman

Introduction:

This week, Paul Downs, Jay Goltz, and Sarah Segal talk about where the dust has settled after years of turmoil in the labor market. As you know all too well, we’ve been through COVID, supply-chain issues, inflation, labor shortages, the Great Resignation, minimum-wage hikes, new pay-transparency regulations, and countless rumors of recessions that have yet to come—all of which has had an impact on wages. And that’s why I decided to ask Paul, Jay, and Sarah where their thinking has landed. The consensus here is that leverage is shifting back to employers, but Paul, for one, remains committed to paying his people more than they can find elsewhere. “It’s worth it to me to have the team I want,” he says. “And sure, it affects profitability, but turnover affects profitability, too. And I’d rather not have that.” Plus: We also talk about whether Lululemon was right to fire two retail employees who tried to stop a robbery, and we answer the following listener question: If something’s not working, how do you know when it’s time to walk away?

— Loren Feldman

Introduction:

This week, Liz Picarazzi, Sarah Segal, and Laura Zander wind up talking about artificial intelligence. They conclude that the time has come for business owners to take AI seriously. Laura says she’s already experimented with using ChatGPT to create lists, to write product descriptions, and to write a marketing plan for a new product. She even used ChatGPT to prepare a presentation for her staff about how to use ChatGPT. She did this in part to reassure them that they don’t have to fear losing their jobs. “What I told the team is, ‘It’s a nail gun,’” says Laura. “‘Sometimes you need to use a hammer, because it needs to be perfect, and it needs to be exact. Sometimes you just need a damn nail gun, and you just want to pop it through. And that becomes the skill. The skill becomes: When do I use the hammer and when do I use the nail gun?’” On their way to the conversation about ChatGPT, Liz, Sarah, and Laura consider the various ways business owners can tap expertise, including through advisory boards, through business groups, and with strategic weekly lunches. Plus: Laura explains why she likes to hire people even when she doesn’t have an opening.

— Loren Feldman

Introduction:

This week, we meet Jennifer Kerhin, the newest addition to the 21 Hats Podcast team. Jennifer’s business, SB Expos and Events, is an event-management business that survived the shut down in 2020 and has grown to more than $3 million a year in revenue. When COVID first hit, Jennifer tells Jay Goltz she really thought it would put her out of business; in the end, she says, it made her stronger. Even so, she is very much stuck working in her business, while looking for ways to extract herself from day-to-day tasks someone else could handle. But how do you free yourself up enough so that you have the time to put the people and systems in place that you know you need? And how long should that take? “I hate to tell you,” says Jay, “it took me 10 years. But I’m going to help you here, so it’s going to take you 10 months.”

— Loren Feldman

Introduction:

This week, Hans Schrei and Shawn Busse talk about why they put their businesses through accelerators, and Paul Downs explains why he might have done the same thing if accelerators had existed back when he started his business—”although,” he says, “I was probably too dumb to realize the value of it.” Hans, who just completed a 13-week accelerator program with his partner, Luis, also tells us how Wunderkeks fared while he and Luis were in the program, what they got out of it, and why they felt it was worth giving up the equity that was the price of admission. Plus: why Shawn went to an employee’s college graduation and how Paul managed to take a vacation. Oh, and Paul also talks about what surprised him about the recent 21 Hats event in Chicago.

— Loren Feldman

Introduction:

This week, we did something different. We recorded this session in Chicago at our very first 21 Hats in-person event. In May, some 20 impressive entrepreneurs from around the country, from different industries, with businesses of different sizes and stages, gathered to talk shop for three days. The last thing we did was to record this episode in which we gave the participants the opportunity to ask the podcast regulars anything they wanted. Those regulars included Jay Goltz, Sarah Segal, and Dana White, and the questions addressed everything from hiring to motivating to delegating to pricing to coping with stress to what they wished they’d figured out sooner and to what still keeps them up at night. And when there were no more questions, I asked those who attended the Chicago event what I could have done to make it better. That I would invite criticism in a conversation being recorded for a podcast audience, took some of the participants by surprise. But, as you’ll hear, it worked out pretty much the way I hoped.

— Loren Feldman

Introduction:

This week, William Vanderbloemen says good public relations is absolutely worth the time and money. Paul Downs says PR hasn’t worked for him. At this point, he says, there are all kinds of ways he’d rather spend his time and money. Meanwhile, Sarah Segal, who owns a PR firm, offers some tips on how to approach and how to employ a firm effectively. Along the way, we discuss what’s expensive when it comes to PR and whether owners can just do it themselves. Plus: Paul explains how he dug himself out of a sales hole by not doing anything differently. And we find out how the owners feel about all of the new ways they’re being asked to leave tips.

— Loren Feldman

Introduction:

This week, two special guests who have built highly successful companies talk about what they ultimately plan to do with those companies. Ari Weinzweig is co-founder of Zingerman’s Community of Businesses, a collection of mostly food-related companies that are an iconic part of Ann Arbor, Michigan. Brad Herrmann is co-founder of Text-Em-All, a software firm based near Dallas that helps organizations deliver personalized, informational, and emergency messages by text and by phone. Both Zingerman’s and Text-Em-All consider themselves purpose-driven. Both practice open-book management. And so, not surprisingly, the founders of both companies took a hard look at selling to an employee stock ownership plan, or ESOP, in the hope that the cultures they’ve created might live on. But both companies, independently, soured on the notion of creating an ESOP, one after spending more than $200,000 and coming within a week of closing the deal. And now, both have settled on a little known alternative, what’s called a perpetual purpose trust. So far, only a handful of companies have tried to create a purpose trust for this purpose, but Zingerman’s and Text-Em-All are taking the leap. As both Ari and Brad acknowledge, they’re kind of figuring it out as they go.

— Loren Feldman