Cracking the Code on TikTok
One lesson from a viral video: business owners should just tell the story of their business.
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Here are today’s highlights:
Carey Smith really doesn’t like branding agencies.
The CRM reality is not living up to the hype.
Does having ADHD help or hurt entrepreneurs?
Here’s how Lucy Hitchcock, the owner of a U.K. business that sells insulated wine bottles and tumblers for picnics, figured out TikTok: “After two months of ‘experimenting’ with the platform and observing other small businesses and ‘unpacking’ their successful videos, Hitchcock spotted that videos that were about one minute long of business owners telling the story of their venture from conception to prototypes to sales kept going viral. ‘You know that kind of happens but it doesn't happen to everyone,’ Hitchcock said. ‘But I thought the story of Partner in Wine is quite good. I might try and tell it on TikTok.’”
“In a 54-second video (that took three hours to make) she told the story of her business, just how she tells it to her friends.”
“‘I'd seen other people do it, and I had kind of grasped the platform, so I added a trending sound, added trending hashtags or hashtags that I thought would work with that video.’ The next morning, Hitchcock woke up to find hundreds of sales notifications on Shopify that ‘just kept coming like ping, ping, ping, ping.’”
“On March 4, the day the video went viral, Hitchcock made almost 14,000 pounds in sales. By the end of the month the business had generated 43,000 pounds, which was more than the business had made in the first six months.”
“One of the lessons Hitchcock took from the Partner in Wine viral video ... is that small-business owners should be the face of their business's TikTok as ‘being small is cool.’” READ MORE
Influencers are sharing complex Starbucks orders—and creating long lines at the chain’s stores: “‘It is a bit exhausting,’ said Roger Huang, a Starbucks barista in Buffalo, N.Y., who said he takes pride in his ability to pump out what workers call TikTok drinks. The drinks treat Starbucks’ menu less like a lineup of drinks and more like a buffet of ingredients to be mixed together in unorthodox ways to create off-menu drinks that may list 10 separate customizations on the side of the cup.”
“Social-media users have dubbed their creations the ‘Starbucks Secret Menu’ and have viewed the hashtag ‘starbuckssecretmenu’ on TikTok more than 210 million times.”
“The drink hacks are colliding against a company policy: Baristas are asked to make customers’ drinks in a set period. The deadline varies by the area, but can be around a minute from the time a customer pulls up to the drive-through window.” READ MORE
Carey Smith is not a big fan of branding agencies: “I've been roped into hiring them too, and each time I've paid dearly. At both my fan company and later at Unorthodox Ventures, where we brought in agencies for our partner firms, the result has been nothing but wasted time and outrageous invoices for endless revisions. That's because these agencies, interested above all in promoting their own brand, could see only their own vision and hear only their own voice. Most have tried to mold us into their interpretation of our company. Any time we threw down a red flag and said, ‘That's not who we are,’ they'd tell us we weren't thinking ‘big picture,’ and that only they had the vision to see our potential.”
“If I ever lose my senses and come close to using a branding agency again, I hope that someone will stuff my ears with wax, Ulysses-like, so that I cannot hear the voices of the Sirens that would lead me to believe an agency knows my business better than I do.”
“And, rest assured: The world is full of talented writers and designers who don't work for any agency, and who can deliver that logo you want, a color palette that suits your vision, and any other ‘deliverables’ you're seeking, far more cheaply than any agency. And with far less drama.” READ MORE
Job growth rebounded in October: “The U.S. added 531,000 jobs in October, the Labor Department said Friday, and the unemployment rate fell to 4.6 percent, as the labor market rebounded from a summer lull. Job growth slowed in August and September as the Delta variant of Covid-19 raged and many workers—because of financial, health or other reasons—gave up the job search. Employers desperate to hire to meet strong demand from consumers are rapidly raising wages, dangling bonuses and offering more flexible hours. And households are spending down a big pile of savings that had been boosted by federal stimulus money and extra unemployment benefits.” READ MORE
The CRM reality is not living up to the hype: “For the past few years CRM platforms have been stressing data, data, data. They’re using A.I. (artificial Intelligence) as a marketing tool to lure companies into the enticing world of being able to predict what customers and prospects will do in the future based on their prior behavior. But the reality is not living up to the hype. Why? Odaseva [CEO Sovan] Bin believes it’s for two big reasons. The first is that the majority of enterprises lack the basic foundations of data management. The other is that security concerns are limiting companies’ ability to truly leverage their data. Forrester’s research recommends that businesses invest in more skills training, improve their ‘data continuity’ and step up their security.”
“Most of my clients complain about the integrity of their CRM information and I can’t think of one that would rely on their CRM system’s data for analysis of customer behavior, let alone sending a simple email campaign, without some human oversight.”
“The AI tech is just not there yet. And it’s going to take some time — and bigger strides — to achieve even those goals.”
“CRM systems are merely cloud-based databases. It’s as simple as that. At the very least, any organization that wants to get a satisfactory amount of ROI from their CRM system needs to invest in both people and tools to ensure that the data in the system is accurate, complete and can be relied on by sales, marketing and service teams.” READ MORE
Some business owners believe they were too conservative when Covid hit: “To conserve cash, Amber Anderson, co-founder and head of strategy at Tote + Pears, a branding agency in Alpharetta, Ga., quashed a longtime project that had the potential to significantly boost revenue. Had she just slowed the project instead of shuttering it, she likely wouldn’t have lost as many customers. When the pandemic hit, the company was in the process of developing a platform for brand marketers and product teams. It already had about 25 customers lined up to use that platform, which would have grown the company’s revenue roughly fivefold. But launching the platform, which had been slated for fall 2021, would have meant plunking down significant resources in 2020, and Ms. Anderson opted to conserve cash instead.”
“As a result, the project’s momentum has stalled. More than half of the prospective customers have left their employers—and their successors aren’t interested in the platform—while others have shifted their priorities.”
“She now believes that rolling out the platform in stages over a longer time frame would have allowed her to continue development and keep some of these customers. Now, however, the company is back to square one, and Ms. Anderson is kicking herself.” READ MORE
THE ENTREPRENEURIAL LIFE
Does having ADHD help or hurt entrepreneurs? “[David] Mammano soon found that the disorder that made him antsy at a regular job helped him when he went solo. He had the energy and creativity to deal with the demands of a startup, and saw his business hit $5 million a year in eight years. After he sold the company in 2016, he launched others. Recent research offers scientific backing for Mr. Mammano’s experience: People with attention deficit/hyperactivity disorder may actually have a leg up when starting a business. The traits that come with their condition—things such as risk-taking and a strong focus on their interests—may be crucial for founding a startup.”
“The story doesn’t end there, however. While people with ADHD are passionate about a new business idea, they often pursue it so intently that they forget to eat or sleep, which can wreak havoc on their health. And ADHD traits may get in the way of running a business as it grows and gets more complicated.”
“‘I love the birth and creativity of a new business, figuring out what direction it’s going to go in,’ Mr. Mammano says. ‘Once it gets to the toddler stage, where it’s walking well on its own, that’s when I need help.’”
“‘When I have to manage and do details, I really start to suck.’” READ MORE
THE 21 HATS CONVERSATION
In their previous lives, Bob Schwartz was an investment banker with Salomon Brothers and Mills Snell reviewed acquisition targets with a private equity firm called Permanent Equity. Then they both decided to cash in their careers and buy blue-collar businesses. More than 20 years ago, Schwartz bought a chain of laundromats called SuperSuds. More recently, Snell bought a roofing contractor called Aqua Seal. In the next 21 Hats webinar conversation, we’ll ask Schwartz and Snell what they learned about buying businesses and about operating businesses. If they had it to do over, would they take the same leap? Bring your own questions! Tuesday, November 9 at 3 ET. REGISTER HERE
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The entrepreneur behind TripAdvisor and CarGurus takes on apartment hunting: “With his last two companies, entrepreneur Langley Steinert tried to bring some reality to the often overhyped and opaque worlds of booking a hotel and buying a used car. Both those companies are now publicly traded: TripAdvisor and CarGurus. Steinert’s latest project involves helping renters understand whether that airy 2 BR, 1 BA apartment in the South End is really as good of a deal as it looks.”
“This week, Steinert and cofounder Tom Gilmore are taking the wraps off a site they’ve been working on since late 2020. In an effort to tap into some of the TripAdvisor mojo, they’re calling it ApartmentAdvisor.:
“The startup has 13 employees and an office in Harvard Square, not far from where Steinert hatched his prior company, CarGurus.”
“Most apartments listed on the site carry a label indicating whether they are a ‘Great Deal,’ ‘Fair Deal,’ ‘High Price,’ or ‘Overpriced.’”
“That $4,400-a-month one-bedroom in Seaport? It carries the ‘High Price’ label, despite the indoor basketball court and concierge.” READ MORE
This startup wants to solve health administration pain points for health care startups: “Medallion aims to do for healthcare what Stripe did for e-commerce: use software to fix back-office functions that consumers (in this case, patients) never see but are crucial to the interaction. Healthcare providers, whether they’re doctors, nurses or mental health counselors, need to be licensed in the state where the patient is located. Given there are more than 150 different state-level boards, each with their own unique and byzantine set of rules, that license clinicians in the U.S., this can be an arduous task. And that’s not the end of it — even when a provider is licensed with a state, there are thousands of health insurers, each with their own enrollment rules and credentialing background checks, to contend with before getting paid.”
“That’s why nearly a hundred startups, including Ro, Firefly Health, Ginger and Eden Health, have signed up for Medallion’s software since the company launched in March 2020.”
“‘These are the problems that software was built to solve,’ says Andrew Reed, a partner at Sequoia Capital, who has invested in technology companies, including Github, Robinhood and UiPath.” READ MORE
The new U.S.-E.U. steel tariffs deal will be onerous for small importers: “Importers will need to carefully track shipments to ensure they arrive before quotas kick in—giving an advantage to companies with the resources to monitor where quotas are still available, to handle complex documentation rules, and to arrange for carefully timed shipments that come in duty free, trade lawyers and others say. ‘Giant companies are going to have the clout and financial capability where they can go in and place large orders and suck up the quota,’ said Gregg Boucher, the president of the distribution division of Ulbrich Stainless Steel & Specialty Metals, a New Haven, Connecticut-based metal processing firm that imports some raw materials from Europe.”
“Scott Lincicome, a longtime international trade lawyer and a senior fellow at the Cato Institute, noted that most smaller companies don’t have teams of trade lawyers to navigate the complex quota system.”
“‘It’s even more complicated, by far, than just having the tariffs,’ he said. ‘This is just brutal for small and medium steel-consuming companies,’ he said.” READ MORE
THE 21 HATS PODCAST
Paying the Volcano God: This week, Paul Downs tells Jay Goltz and Laura Zander why he’s come to view Google as the Volcano God. He’s not sure what it will take to keep the Volcano God happy, but he’s obsessed with doing everything he can, because the consequences of failing would be so great. We also talk about Paul’s content marketing strategy, the pricing lessons that emerged from our recent attempt to monetize 21 Hats, and why Laura—even in the midst of the labor shortage—now has a waiting list of people hoping to work at her yarn manufacturer in Texas.
You can subscribe to The 21 Hats Podcast wherever you get podcasts.
If you see a story that business owners should know about, hit reply and send me the link. If you got something out of this email, you can click the heart symbol, you can click the comment icon below, and you can share it with a friend. Thanks for reading, everyone. — Loren