After the Sale: Feelings of Regret and Loss
As a couple settles into retirement, she wonders if this is what her husband was like as the boss at the business he built.
Good Morning!
Here are today’s highlights:
Michael Girdley details his step-by-step hiring process.
Shawn Busse explains the marketing mistake he sees business owners make most often—and offers alternatives.
TikTok remains the biggest story in advertising right now.
The best time to start a business may be during a recession.
THE ENTREPRENEURIAL LIFE
The New York Times paints a bleak portrait of what life can be like for a retired business owner: “When her husband, Richard McCracken, retired from the business he built, Yvonne was still working from their home in Charlotte, N.C., as a quality-assurance specialist for a network of research sites, and she could feel him hovering near her desk off the kitchen as he did busy work on his laptop. Having left her largely in charge, for most of their marriage, of raising two daughters, dealing with the home, and managing her own career, Richard now seemed to have had some late-in-life revelation that his wife could clearly benefit from his input.”
“He had ideas about how she should manage her team, which he sometimes shared after she completed Zoom calls: She should have told them to solve a problem a certain way, or given them more direction. The advice irritated Yvonne, who is not a fan of micromanagement (of herself or others).”
“She wondered: Was this what he was like as a boss at the business he ran? She supposed so. She had never given her husband’s work persona much thought. That part of his life was separate from her own, but instead of receding now that he was retired, it seemed to be taking up even more space.”
“The couple had coexisted on separate tracks for many years, so much so that even the sweet moments of retirement, like weekends with their grandchildren, to whom Richard was devoted, kicked up feelings of regret and loss for Yvonne. As a working mother, she had done the large part of the child rearing on her own, without a fully invested partner.”
“‘He’ll say to me about the grandchildren, Wow, they’re so bright and interesting,’ she said. ‘And I’ll say, You know, your own children were very bright and interesting, too.’” READ MORE
HUMAN RESOURCES
Michael Girdley walks through his hiring process: “Over my career, I’ve hired and managed over 4,000 people (directly and indirectly). I’ve made just about every hiring mistake there is. It’s given me time to develop a hiring system that really works and makes your life easier and your business better. I’ll put a link to my step-by-step process at the bottom. But success comes down to six counterintuitive principles:”
“Resumes are bullsh*t: Two thirds of resumes have lies in them. I bet my Chili’s server has ‘orchestrating financial transactions for a multi-billion-dollar corporation’ on her resume. So how do you cut through the BS? Here’s the secret: ‘Threat of Reference Check.’ Tell every candidate that you do up to five hours of calling references. This does two things: Bad candidates drop out. And great candidates want the job more — because businesses that do a ton of reference checks will be filled with other A players. (Make sure you actually do the reference checks though.)”
“Two-on-one behavioral interview: I run my interviews with one lead interviewer and one wing person. Having someone there just listening is a great way to gut-check your impressions afterward. We spend two hours learning the candidate’s life story. What makes them tick? Did they dominate prior jobs? Where are they strong? Where are they weak? Remember: the best predictor of future success is past performance.” READ MORE
THE 21 HATS PODCAST: DASHBOARD
The (Marketing) Road Not Taken: This week, Shawn Busse talks about his belief that, for all kinds of understandable reasons, business owners have been fixated on marketing tactics that amount to a losing battle of digital trench warfare. Over time, he says, those tactics have come to cost more and return less. But there are better alternatives, and Shawn takes us through some examples. Plus: Are there lessons for smaller businesses in Walmart’s decision to place a big bet on a premium line of food.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
MARKETING
Despite a looming ban, TikTok attracted hundreds of marketers to its annual presentation last week: “It was a keen reminder that Madison Avenue’s concerns about TikTok, which center on how to cleverly market their products and ensure that consumers are seeing their ads, are vastly different from those of Washington, where officials consider the app a national security risk. Sofia Hernandez, TikTok’s global head of business marketing, declared that TikTok had gone from ‘being viral to vital’ for businesses. The company’s executives introduced new tools for running ads against trends and events like the Summer Olympics in Paris.”
“‘TikTok is the most interesting story in advertising right now,’ said Craig Brommers, chief marketing officer of the retailer American Eagle, who attended the event. ‘That’s why you had a standing-room-only audience waiting to hear what’s next for the most important video platform for Gen Z.’”
“TikTok’s executives reminded advertisers that with 170 million monthly U.S. users, the user base had started to reflect the general population. ‘We’re not just Gen Z anymore,’ said Tim Natividad, TikTok’s U.S. head of enterprise sales.”
“The company appears determined to maintain ad dollars amid its uncertain future, particularly as U.S. tech giants focus on their market share and push short-form video competitors like Google’s YouTube Shorts and Instagram Reels.” READ MORE
RETAIL
Online shopping is saving brick-and-mortar stores: “Store owners once viewed e-commerce as a mounting threat to their survival. Now, more bricks-and-mortar stores are thriving after integrating their properties with the online shopping experience. Shoppers browse in person to see, touch, or try on items before ordering them online. They are picking up or returning purchases in stores. And retailers are increasingly relying on their shops as fulfillment hubs, shipping items ordered online from store stockrooms in addition to warehouses.”
“Overall, nearly 42 percent of e-commerce orders last year involved stores, up from about 27 percent in 2015, according to research firm GlobalData.”
“After years of overbuilding that led to a sharp contraction, retailers are on track to open more stores than they close in 2024 for the third consecutive year, according to advisory and research firm Coresight Research.”
“Many retailers have found that it is too expensive and difficult to attract and retain customers without physical stores. And using stores as pickup and drop-off points helps lower the labor, packaging, and shipping costs involved in online orders.” READ MORE
DESIGN
More companies, especially in the toy industry, are outsourcing product development to their customers: “Lego Ideas is part of a growing strategy among companies that are creating divisions devoted to going directly to consumers for ideas. Lego takes a more personal approach, allowing fans to submit designs, while other companies poll consumers about what they would like to see or speak to inventors about their latest projects. These initiatives are finding particular success within niche groups of collectors and other highly dedicated fans. Toy companies that have direct-to-consumer models do not have the same audience reach that distributors like Amazon have, but a unit devoted to direct sales still provides advantages for the overall business, said Jaime M. Katz, an analyst who covers the toy industry for Morningstar, a financial services company.”
“The primary reason companies like direct sales is the speed at which they are able to get access to purchasing data from consumers. That data can help toy companies bring products to market faster, Ms. Katz said, and capitalize on trends and purchasing patterns. There’s also less excess inventory and, by extension, fewer markdowns on items sold on the company’s websites.”
“Spin Master, a toy company in Toronto, has been soliciting inventors for ideas since its inception in 1994. The company’s greatest advantage comes from the ‘mutual respect’ it has with the inventor community, said Ben Dermer, senior vice president of toy innovation at Spin Master.”
“There are about 300 professional inventors in the toy industry, Mr. Dermer said, and Spin Master is in regular contact with most of them. Typically, before an idea is formally submitted to Spin Master for consideration, a member of the company’s inventor relations department has already had lengthy discussions about the viability of the product.” READ MORE
THE ECONOMY
What did we learn from the latest employment report?
STARTUPS
A study suggests that the best time to start a business is during a recession: “The authors found that tech startups that began operations during the 2007-09 recession—and received their first patent in that time—tended to last longer than tech startups founded a few years before or after. And those recession-era companies also tended to be more innovative than the rest. ... Drawing on data from the U.S. Patent and Trademark Office, the authors examined a sample of 6,946 tech startups that launched and received their first patent approval between 2002 and 2012.”
“One group—about 5,734 companies—launched and got their patent outside of the 2007-09 recession. Of those, about 70 percent made it to their seventh year. But the startups that launched and got their first patent during the recession—about 1,212 companies—were 12 percent more likely to be in business in their seventh year.”
“So, why did these recession-era firms outperform their peers? Labor markets played a big role. A widespread lack of available jobs meant that the startups were able to land more productive and innovative employees, especially in their research and development groups, and then hold on to them.”
“More important, the tight labor markets also meant that the founding inventors—the people named on the very first patent—were more likely to stick around rather than try for opportunities elsewhere.” READ MORE
THE 21 HATS PODCAST
How Do You Make Innovation Happen? The wrong way to make innovation happen, Ty Hagler says in this week’s special bonus episode, is to have a great idea and then go all-in trying to create it. That, he says, is a really expensive way to find out if your idea works. The right way to pursue innovation, he says, is to take your idea to customers so you can assess the pain points and opportunity spaces before proceeding. Hagler, who is founder and CEO of Trig, an innovation and design firm in North Carolina, also says he’s learned that the problem with focus groups is that the more people you have in the room, the less valuable the conversation tends to be. In fact, he says, one-on-one is best.
He also says that brainstorming remotely can actually work better than brainstorming in-person. Oh, and by the way, if your Mom tells you she loves your idea and will definitely buy your product as soon as it’s available, she’s probably lying.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren