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Can’t Trust That Day
On Mondays, is the bare minimum enough? Or do Mondays set the tone for the week? Either way, someone’s cryin’ all of the time.
Here are today’s highlights:
Some retailers are finding opportunity in the downtown doom loops.
Companies are already looking for employees who have ChatGPT experience.
A wave of minimum wage hikes is about to hit, but not all business owners think that’s a bad thing.
On the latest Dashboard, Lou Mosca talks about the performance metrics businesses should track—especially in volatile times.
Is this the right time to take a chance downtown? “A longtime Bay Area jeweler is betting on downtown San Francisco, taking two adjacent vacant spaces in Union Square to sell ultra-luxury Rolex and Patek Philippe watches. Kerns Fine Jewelry in Burlingame has leased a combined 5,800 square feet at 255 Post St. and 259 Post St. The retailer plans to operate the storefronts separately for each watch brand following $1.5 million worth of tenant improvements. The storefront at 255 Post, which once housed Thomas Pink, will feature Rolex products, while 259 Post, a former Sennheiser store, will feature Patek Philippe. ‘Each brand deserves their importance and independence,’ said Eric Kerns, owner of the family business.”
“He said the availability of spaces so close to the heart of Union Square — not rental rates — factored into the opportunity. ‘If unfortunate circumstances hadn't happened, I don't know if we would have found such a great spot,’ he said. ‘Seven years ago, you'd have to go two or three blocks off to find something.’”
“Kern said he's bullish on Union Square's rebound, helped by increasing business from high-spending international tourists, but he believes the city and surrounding areas can ‘more than support’ the store already.”
"’No. 1 is serving our local community,’ Kerns said. ‘This is the center of San Francisco. There will be more local demand for the product than available product.’” READ MORE
The latest work-from-home battleground: “Bosses are making a push to get workers into the office on Mondays as a way to kick-start the workweek and boost productivity. Though more workers are coming in on Mondays, they still lag behind Tuesdays, Wednesdays and Thursdays for office attendance. On the Monday before Memorial Day, the office occupancy rate was at 45 percent of pre-pandemic levels, according to Kastle Systems, which tracks security badge swipes into buildings across major U.S. cities. That is up from a 41 percent rate on the same Monday in 2022, but far from the 58 percent who went to offices the Tuesday before Memorial Day this year, Kastle said.”
“A survey of 4,500 companies’ return-to-office policies conducted by hybrid-workplace software company Scoop found that nearly 300 require employees to come in on specific days. Of those, just under a quarter ask employees to come in on Mondays, with many more stipulating staff be in the office on Tuesdays, Wednesdays and Thursdays.”
“‘Monday is like New Year’s Day, says Sumir Meghani, chief executive and co-founder of Instawork, a staffing firm that places hourly workers. ‘You reset your intentions, set a fresh start. People bring their morning energy to the office.’”
“‘Our business happens to be particularly busy during the weekend,’ he says. ‘Mondays are a good day to review. There is a lot of collaboration with key business metrics.’” READ MORE
Some companies are already listing experience using ChatGPT as a job requirement: “‘AI won't take your job,’ economist Richard Baldwin said during a panel at the 2023 World Economic Forum's Growth Summit. ‘It's somebody using AI that will take your job.’ Insider reviewed dozens of job postings on job board sites like Indeed and LinkedIn to see which companies are looking to hire workers with ChatGPT experience.”
“Lasso MD, a San Diego-based healthtech company, is hiring a full-time social media product manager who will make between $50,000 to $70,000 a year. According to the job listing, the role requires ‘direct experience designing ChatGPT prompts for unique post captions.’ Lasso MD has ‘already deeply integrated’ GPT-4 — ChatGPT's latest language model — into its product workflows, Eric Bunnell, the company's CEO, said.”
“Earlier this month, Inside.com, a social platform for business leaders headquartered in San Francisco, closed its application for a ChatGPT and AI developer — a remote, full-time position that pays $125,000 a year — who could develop and integrate AI-tools like virtual assistants into its products and services. ‘Experience with ChatGPT’ and other large language models was a requirement.”
“Slalom, a Portland-based tech consulting firm, was seeking a full-time senior copywriter to produce content for its marketing campaigns for $80,000 to $100,000 a year. Candidates familiar with AI-tools like ChatGPT had a competitive edge, according to the job listing. An understanding of ChatGPT helps candidates ‘contribute innovative ideas and solutions that can help our teams better explain the benefits of AI to our customers,’ Ted Zahn, the creative lead for global partner marketing at Slalom, told Insider.” READ MORE
A wave of minimum-wage hikes is about to hit: “‘I think that all the action is taking place in local areas like cities or counties or at the state level,’ said Jane Oates, president of WorkingNation, a nonprofit that aims to boost awareness of workforce issues. ‘But a lot of states haven’t done anything to raise their minimum wage.’ While many states haven't touched their minimum wages, the wave of increases, the push for pay transparency and the tight talent market have employees at all ends of the pay spectrum looking for more — a dynamic that is putting pressure on small businesses, which have struggled to keep pace with their larger counterparts. Oates said discussions of raising minimum wages — particularly some of the federal proposals — must be balanced by the impacts on small businesses and consumers.”
“‘I think those discussions have matured, and I don't think it helps anybody to talk about raising the minimum wage to a standard that could end up putting some small businesses completely out of business,’ Oates said.”
“On July 1, Nevada, Oregon and Washington D.C. will raise their minimum wages alongside Chicago, San Francisco, and Montgomery County, Maryland, among others.”
“Aaron Seyedian, owner of Well-Paid Maids in Washington, D.C., and Maryland, said higher minimum wages mean he has not had to deal with a labor shortage even while doubling in size over the past year. ‘Customers appreciate the quality and reliability that comes from fairly compensated employees. People want to work for us, and our low turnover saves us a lot of money and time,’ Seyedian said in an email.”
“‘Raising the minimum wage helps people make ends meet and boosts consumer spending, which boosts local economies.’” READ MORE
THE 21 HATS PODCAST: DASHBOARD
You Control Your Destiny: This week, Lou Mosca, who runs American Management Services, a consulting firm that helps businesses improve their performance, explains why he doesn’t accept excuses from his clients. Whatever the economy or the labor market throws at them, Lou says, the owners control what happens within their own four walls. We also talk about why he always comes back to encouraging his clients to get in their cars and visit customers, why he thinks your best prospects just may be former customers, what he’s learned recently about digital marketing, and what every business owner should be tracking in these unusual times.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Diners are losing patience with poor service: “To address the complaints, a number of restaurant companies say they are working to improve service through more hands-on training of workers and better technologies to speed up meals. At Union Square Hospitality Group, which runs New York City restaurants such as Union Square Cafe and Gramercy Tavern, the company now uses hand-held devices that allow servers to spend more time with customers and less in front of ordering systems.”
“‘You’re investing in technology that will allow their jobs to become easier,’ said Chip Wade, the company’s chief executive, in a session at The Wall Street Journal Global Food Forum on Wednesday.”
“In Sedona, Ariz., the longtime restaurateur and chef Lisa Dahl is taking a different approach at her restaurants, which include the Latin-inspired Mariposa. She is changing how frequently she rotates staff between positions, aiming to build up greater expertise and avoid situations where a worker is a jack of all trades and a master of none,’ she said.”
“‘Labor is the crux of everything that [makes me] chew my nails,’ Dahl said at the Journal event. ‘There has been, until recently, a lot of turnover. And so you find that you’re constantly training.’” READ MORE
You’re not the only owner who struggles with when to raise prices: “When big businesses want to do that, they can pore over reams of data about how their customers and competitors might react and what they should do in response. But small businesses don’t have that luxury. Some businesses face a lot of restrictions when it comes to setting and changing prices. ‘Different brands will have different policies, [including] here’s a minimum advertised price, here’s a window where there’s one month a year where you can go below that price,’ said Jeff Cayley, owner of Worldwide Cyclery, a bike store in Newbury Park, California, that sells almost 20,000 products from over 200 brands.”
“Sometimes, Cayley said, raising prices has nothing to do with the cost of the product itself. ‘Whether that’s even just the lease on the building that we have, or our labor costs, or even just things like electricity and utilities costs,’ Cayley said. ‘As those things inch up, we need to have a larger gross margin in order to accommodate for that.’”
“Cayley has to balance all of that against what customers are willing to pay. He said the bike industry boomed in the early days of the pandemic, and he could pretty much raise prices and trust that people would pay them. But this year, that’s changing. ‘In our industry, those days have passed us,’ Cayley said. ‘Back during 2021, 2022, consumers were much more accepting of that.’”
“Cayley said he and his staff keep a close eye on what competitors are charging. Sometimes they’ve even reduced their prices. And when the store decides to raise prices, it experiments, to see how increases may land. ‘We’ll adjust something, run a test, see what happens, go back to the drawing board. So it’s kind of a never-ending game,’ Cayley said.” READ MORE
An epic legal battle over how real estate agents get paid could change the way homes are bought and sold: “The heart of the problem, according to the lawsuits, are the multiple listing services — local, online databases where agents share photos and detailed information about homes for sale. The MLSs are a central component of the US real-estate market, and the most critical tools that licensed agents have at their disposal — in fact, they're one of the most persuasive reasons for even hiring an agent in the first place. In order to access an MLS, listing agents must agree that money from the sale will follow the prescribed, serpentine path. But now two multibillion-dollar lawsuits — Sitzer et al. v. NAR et al. and Moehrl et al. v. NAR et al. — threaten to upend the entire system. The plaintiffs, representing a large swath of home sellers around the country, are accusing the National Association of Realtors and some of the country's largest brokerages of using MLS rules to charge exorbitant fees and unfairly prop up agent commissions.”
“These lawsuits are finally coming to a head after simmering for several years, and if the plaintiffs succeed, they could rewrite the rules of how agents get paid. The seller might no longer pay out both agents' commissions after the sale closes. Instead, a buyer would pay their agent directly.”
“Proponents say these changes would increase competition among agents, dramatically lower commissions, and potentially save consumers as much as $20 billion to $30 billion a year. The defendants, led by the NAR, argue that the current setup actually favors consumers by providing broad access to an efficient real-estate market.”
“‘Everyone's not really paying that much attention,’ Rob Hahn, a long-time consultant to local MLSs and Realtor associations, told me. ‘I think agents and brokers just figure, We'll solve this somehow.’ That may end up being true, but the stakes for every person in the real-estate industry are incredibly high.” READ MORE
A messaging app that raised $200 million from Softbank is shutting down because 95 percent of its users were fake: “Two years ago, a messaging app startup called IRL reached a $1.2 billion valuation in a $170 million Series C funding round led by SoftBank Vision Fund 2. Boasting of its ‘unicorn status’ and noting that it had raised more than $200 million to date, the company described itself as ‘the leading group-messaging social network that brings people together through events and shared experiences.’ CEO Abraham Shafi stated, ‘Our primary goal at IRL has always been to create more authentic and organic communities.’ Just how authentic those communities were came into question last year when employees cast doubt on Shafi’s claims that the app had 20 million monthly active users.”
“Fast forward to today and the venture is shutting down, admitting that those claims had been incorrect—to put it mildly. The board of directors concluded after an investigation that 95 percent of the users were ‘automated or from bots,’ as The Information reported on Friday.”
“‘The overnight unicorn that the media loves to prop up and VCs love to throw $$ into just is not a thing,’ tweeted Squad founder and CEO Isa Watson.” READ MORE
THE 21 HATS PODCAST
Twelve Hours a Day, Six Days a Week: 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.”
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren