Can You Sell Yarn on LinkedIn?
In our latest podcast, the owners talk about why Laura Zander may need to hire a chief marketing officer. And then Laura demonstrates why maybe she shouldn’t.
Good Morning!
Here are today’s highlights:
Why do tech platforms keep getting worse? It’s the great “enshittification.”
Sabbaticals are becoming a very popular employee benefit, especially for younger workers.
New Jersey Gov. Phil Murphy wants to bring back the highest business tax in the country.
Is your state ready for the 2030 depression?
THE 21 HATS PODCAST
Can Jimmy Beans Wool Sell Yarn on LinkedIn? This week, Shawn Busse and Laura Zander discuss what exactly Laura’s job should be. She’s CEO, of course, and she’s been focused on acquisitions and growing the business, but she’s never really found someone to take over the big role she used to play, which leads to these questions: Should she go back to being her own chief marketing officer? Or does she need to go out and spend real money to hire one? And then, toward the end of the conversation, Laura actually devises a plan on the spot to sell yarn in a surprising and creative way, which perhaps answers the very question we’d been discussing. Plus: Shawn explains how having the right partner can make or break a business as he celebrates having made his final payout to his own former partner.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
TECHNOLOGY
Ever wonder why most tech platforms seem to be getting worse? “Cory Doctorow has a theory for why tech platforms seem to have been sapped of all their joy: he calls it the great ‘enshittification.’ The 52-year-old Canadian-British author coined the term as a means of describing the growing sense that platforms operated by Big Tech companies are decaying beyond recognition. With billions of people beholden to them, that throws up a whole lot of problems.”
“‘How is it that Uber is more important than the drivers and the riders? How is it that Amazon is more important than the sellers and the buyers? How is it that Facebook and Twitter are more important than publishers and readers?’ he told Business Insider.”
“His theory for how they got there involves a multi-step process. First, platforms play nice with potential users to reel them in. Think of how social media companies set out initially by offering free sign-ups, or how companies like Netflix grabbed consumer attention with cheap subscriptions.”
“Second, they start to lock users in. Companies like Facebook went on massive spending sprees to gobble up and consolidate the market by buying competitors like Instagram. The consequence: it becomes easier to extract more dollars and data from users. ‘Once a firm has got a stranglehold on its market and it has these extra rents that it extracts from its market, it's very hard to regulate that firm," Doctorow said. Then, platforms begin to turn on everyone else.” READ MORE
HUMAN RESOURCES
Gen Z has been requesting and getting a big, new benefit: “An analysis by payroll and benefits platform Gusto found about 6.7 percent of salaried workers were on sabbatical in January 2024, which is double the rate from 2019. A sabbatical was defined as more than 120 hours of paid leave during the prior two months. The trend is being driven in part by Gen Z workers, who were most likely to be on sabbatical, with 8 percent of workers ages 22 to 26 on sabbatical. That's a huge increase from 2019, when just 1.7 percent of the age group was on sabbatical.”
“‘Over the past four years, we have seen significant growth in the share of workers taking sabbaticals, especially younger workers,’ said Gusto economist Tom Bowen. ‘The pandemic forced many workers to re-evaluate their relationship with work, and as people continue to put increased emphasis on work-life balance, we will likely see more workers taking extended time away.’”
“The industry most likely to see workers taking sabbaticals was, perhaps not surprisingly, professional services — with 7.4 percent of workers out on sabbatical. Within professional services, the technology sector saw 9.3 percent of workers out on extended leave.”
“Meanwhile, older workers were the least likely to take sabbaticals. Women are more likely to take sabbaticals than men, with 7.2 percent of women on sabbatical compared to 6.3 percent of men. To be clear, that is separate from parental time off.” READ MORE
TAXES
A new study has found that the Trump tax cuts boosted investment in the economy: “Those benefits are less than Republicans promised, though, and they have come at a high cost to the federal budget. The corporate tax cuts came nowhere close to paying for themselves, as conservatives insisted they would. Instead, they are adding more than $100 billion a year to America’s $34 trillion-and-growing national debt, according to the quartet of researchers from Princeton University, the University of Chicago, Harvard University, and the Treasury Department. The researchers found the cuts delivered wage gains that were ‘an order of magnitude below’ what Trump officials predicted: about $750 per worker per year on average over the long run, compared to promises of $4,000 to $9,000 per worker.”
“The study is the first to use vast data from corporate tax filings to draw conclusions about the Tax Cuts and Jobs Act, which passed with only Republican support. Its findings could help shape debate on renewing parts of the law that are set to expire or have begun to phase out.” READ MORE
New Jersey Gov. Phil Murphy has proposed bringing back the nation’s highest business tax: “A year ago, Gov. Philip D. Murphy of New Jersey spoke proudly about his plan to let a corporate business tax expire, framing it as a promise kept in a state striving to compete for entrepreneurs. ‘Allowing this surcharge to lapse will mean more money for them to create jobs, to invest in new and more efficient equipment, to lower costs to consumers and to be able to stay here,’ Mr. Murphy, a Democrat, said as he unveiled his budget blueprint last February. He was successful. And the tax expired two months ago. On Tuesday, Mr. Murphy proposed reversing course and again implementing a corporate business tax of 11.5 percent — the nation’s highest rate — for the state’s most profitable companies.”
“The 11.5 percent rate, if adopted, would apply only to companies with profits in excess of $10 million a year, up from the previous threshold of $1 million. Between 600 and 700 companies would be obligated to pay the 2.5 percent surcharge on top of the state’s base corporate rate of 9 percent.”
“Starting in mid-2026, that extra revenue — about $800 million a year — would be earmarked for New Jersey Transit, which faces large and growing deficits.” READ MORE
RETAIL
Joann is preparing to hand over the keys to its lenders (which might be of interest to anyone selling yarn or picture frames): “The company, which sells fabric and craft supplies and has around 850 stores in the US, has been holding confidential talks with its lenders as it seeks fresh capital to bolster its cash reserves. Discussions are ongoing and plans aren’t final, but the company is seeking to line up enough support from lenders that would allow it to exit Chapter 11 quickly in what’s known as a pre-pack filing, the people said. Chapter 11 bankruptcies allow a company to continue operating while it works out a plan to repay creditors.”
“Joann has struggled to maintain liquidity and manage inventory levels amid a challenging environment for retailers. It raised more than $34 million in a sale and leaseback deal for its Hudson, Ohio facility, but is contending with high interest expenses and required term loan payments, Moody’s Investors Service wrote in a note in January.” READ MORE
THE ECONOMY
ITR Economics ranks the best and worst states to be in during the depression the firm’s predicting for the 2030s: “The coming depression of the 2030s will have a varying impact on countries across the globe. Within the U.S., too, some states will fare better than others. Whether it is affordability, job availability, or simply being a good place to live, each state will have its own opportunities to leverage and challenges to overcome. Based on our own criteria, we have compiled a list of the five best U.S. states and the five worst U.S. states to be in during the 2030s depression.”
“The states with the lowest risk have several factors in common, including population growth, economic diversity, and low per capita levels of state debt and unfunded state pension liability. Comparatively lower percentages of people under age 65 without health insurance and of people in poverty are also important considerations.”
“The Northeast claims four of the five states that will face the most risk in the next decade. These East Coast states contend with numerous difficulties, including negative population movement – i.e., people moving out – as well as age and demographic challenges.” READ MORE
PROFILE
An Amish CEO wants to build a hemp haven: “On a recent morning, the shelves at Lancaster County Marketing were lined with CBD root beer and cotton candy lollipops, hemp-infused honey and muscle salves, and CBD pre-rolled joints with names like Elektra and Special Sauce. A 300-pound sack brimming with leftovers from the local cannabis harvest, on its way to becoming highly prized CBD oil, suffused the office with a particular pungent smell. Across the driveway, the standardbred horse that transported CEO Reuben Riehl to work grazed near a small buggy.”
“Riehl, 29, is a cannabis visionary in Lancaster County, the cannabis capital of Pennsylvania. But despite the ubiquitousness of CBD in everything from soda to bath bombs, it’s hard to be a visionary these days. It’s nearly a full-time job for Riehl to convince his Amish community, and sometimes even himself, that selling hemp-derived wares is still a good idea.”
“Hundreds of years ago, hemp was a major cash crop in Pennsylvania, immortalized in Lancaster town names like East and West Hempfield. The more recent excitement about CBD arrived in Lancaster about five years ago. That was when the federal Farm Bill of 2018 made it legal to grow, process, transport, and sell hemp nationwide.”
“It was a particularly promising crop to the Amish, who eschew most modern technology, because hemp benefits from being harvested by hand. Lancaster County is home to the largest Amish settlement in the country, with more than 44,000 residents, according to records compiled by Elizabethtown College.” READ MORE
21 HATS PODCAST: DASHBOARD
Our Man on AI’s Bleeding Edge: This week, Gene Marks offers to boldly go where no business owner has gone before. Few of us need to be convinced that artificial intelligence will be transformational, but even fewer of us have the time, energy, and capability to keep checking on which AI apps and platforms are worth using right now. Which is why Gene Marks has given himself precisely that assignment. This week, Gene reports back on what he found when he explored OpenAI’s GPT store for business owners. Did he find lots of useful stuff? Actually, what he saw reminded him of the iPhone app store (circa 2007). Plus: Gene also explains why divorce can be especially nightmarish for business owners and what they can do to ease the pain.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren