Eight Months Without a New Client
In our latest podcast episode, Jaci Russo, the newest addition to our podcast team, talks about how she built her business and why it hasn't been growing this year the way she expected.
Good Morning!
Here are today’s highlights:
In Florida, the cost of home insurance can exceed the cost of a mortgage.
Employers find that including salary ranges in job listings attracts better candidates.
John Legend is launching a review app that only takes positive reviews.
See if you can spot the theme here: In September, retail sales were much stronger than economists expected.
THE 21 HATS PODCAST:
We Haven’t Signed a New Client in Eight Months: This week, we meet Jaci Russo, the co-founder and CEO of BrandRusso and the latest addition to the 21 Hats Podcast team. Jaci tells Jay Goltz and Laura Zander how she went from working for Barry Diller to starting her own marketing agency. Jaci also explains why she recently decided to introduce a four-day workweek and why she thinks her agency has now gone eight months and counting without signing up a new client—the longest such stretch in more than 20 years in business. “I find it interesting,” responds Jay. “You just said this is the first time you've ever had such a long period without new business. And, ‘Oh, we went to a four-day workweek.’ Hmm, how interesting.”
Plus: Laura talks about what happened when venture-backed competitors came for the knitting industry and how stressful it is to buy and operate another business in another state.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
INSURANCE
When your home insurance costs more than your mortgage: “James and Laura Molinari left Chicago for a two-story stucco home in [West Palm Beach’s] historic Flamingo Park neighborhood. The four-bedroom house was a short bridge away from Palm Beach island and walking distance to downtown West Palm Beach. ‘We love it here,’ said James, who plays golf with his 3-year-old son on Saturdays and can swim year-round in his backyard pool. Then the renewal for his home insurance arrived. The new rate for the year starting in September was around $121,000—more than seven times what the Molinaris said they paid last year, and more than 13 times what they paid when the family moved to Florida in 2019. While they found a better rate from another insurer, at about $33,000 it is still nearly double what they paid last year.”
“The family this month listed the home for sale with an asking price of nearly $3.5 million after determining that insurance costs made staying there too expensive. Others in Flamingo Park told The Wall Street Journal they are drawing the same conclusion. ‘The for-sale signs are going up left and right,’ James said of the neighborhood.’”
“Some premiums have increased by about nine times what they were last year, according to Oscar Seikaly, chief executive of NSI Insurance Group, who said he has handled insurance premiums that cost as much as $600,000 a year for multimillion-dollar homesL ‘When you have a home that’s one million dollars or less, your insurance premium becomes higher than your mortgage.’”
“The surge in insurance premiums have led many people who own their homes outright to drop insurance. While some of these homeowners without mortgages have gotten rid of all their insurance, others have dropped only their wind coverage, which pays off after a hurricane and where the prices have risen the fastest.” READ MORE
FAMILY BUSINESS
Here’s how three generations of one family manage to work together: “Spanning ages 37 to 86, three generations of the Hickman family run a lumber and flooring company in western Pennsylvania. The youngest works remotely and handles social media. The oldest remembers when workers stayed with one employer for life and still uses a flip phone. Workplaces big and small are looking more like the Hickmans’ as the country’s population ages and people continue working well into their later years. With about 8 percent of people 75 and older now in the labor force, nearly double the labor-force participation rate from 30 years ago, it’s more common to have four and possibly five generations at one workplace.”
“Larry Hickman, 86, comes from a generation that got up early and worked all day. ‘Work was hard but it was something you just did,’ he says. At about age 12, Larry picked up wood scraps at his father’s small Emlenton, Pa., sawmill, which he eventually bought. Many Hickman workers lived in the community, joined out of high school, received medical and retirement savings benefits, and stayed until they retired.”
“Dennis Hickman, 63, brought new ideas and adaptability, skills learned over time by navigating the cyclical industry’s upturns and downturns. He joined his dad in 1980, when mortgage rates were soaring into double digits and crushing the lumber-intensive housing market. ‘A lot of family-run businesses fold in the third generation. That’s me, and I wasn’t going to let that happen,’ he says.”
“Dennis said he knew he had a good product, but needed help with social media and marketing. He called his daughter, Jessica Hickman Fresch, then living in Atlanta, to return and handle marketing and sales. ‘We have a cool story,’ he recalls telling her. ‘Make us sound like we’re the Waltons out here.’”
“Jessica agreed but said she would only work for three years and do so remotely from Pittsburgh, which is 1.5 hours from Emlenton, population 600.” READ MORE
HUMAN RESOURCES
Here’s a reminder that employers benefit when they add salary ranges to job listings: “More than 80 percent of hiring managers across the country say they now include salary information in job listings, according to new research from the employment firm Robert Half. Data from ZipRecruiter suggests that the number that actually do in practice is lower — closer to 40 percent, at least for jobs posted on that particular site. Whatever the figure though, companies say that they notice benefits.”
“‘Job postings that include salary data receive about 50 percent more applications on average,’ Pollak said. ‘And they’re actually three times more likely to deliver quality candidates.’”
“Companies are starting to recognize this — even in states that don’t require it, per Brandi Britton at Robert Half: ‘About six in 10 hiring managers found that including the salary information does help them attract more qualified candidates.’” READ MORE
Warehouses are competing with Uber, Instacart, and other apps for gig workers: “The flexibility in a field known for rigid schedules and grueling workloads is a sign that the practices of app-driven operators are seeping into more traditional workplaces, particularly in a tight market for blue-collar workers. But warehouse managers aren’t dialing up gig workers the same way a passenger calls an Uber, partly because industrial jobs require specific training and expertise, logistics experts say. ‘You can’t just have someone who lists themselves as a warehouse worker go into a facility,’ said Hisham Khaki, president and founder of Alpharetta, Ga.-based flexible labor service HapiGig. ‘It actually takes someone who understands warehousing and knows how to operate a forklift.’”
“Employers hiring people on HapiGig’s platform, for example, choose from a list of available workers rather than being randomly assigned to whoever is online. Workers set their availability in advance—for example, Thursdays and Fridays—and go through a background screening process with HapiGig. Employers can then see each person’s attendance rate and ratings from past employers before asking that worker to pick up a particular shift.”
“Cathi Canfield, vice president of enterprise transformation at Atlanta-based EmployBridge, said companies hiring gig workers are finding they are able to reach new labor pools. Some workers on EmployBridge’s gig work platform have full-time jobs and are looking to bring in additional income, while others are juggling tasks such as caring for children or elderly parents, she said.” READ MORE
THE ECONOMY
Retail sales were much stronger than expected in September: “Consumers showed surprising strength in September, boosting retail sales well above expectations despite high interest rates and worries over a weakening economy. Retail sales rose 0.7 percent on the month, well above the 0.3 percent Dow Jones estimate, according to the advance report the Commerce Department released Tuesday. Excluding autos, sales were up 0.6 percent, also well ahead of the forecast for just 0.2 percent. The numbers are not adjusted for inflation, so they indicate that consumers more than kept up with price increases.”
“Sales gains were broad-based on the month, with the biggest increase coming at miscellaneous store retailers, which saw an increase of 3 percent. Online sales rose 1.1 percent while motor vehicle parts and dealers saw a 1 percent increase and food services and drinking places grew by 0.9 percent, good for a yearly increase of 9.2 percent, which led all categories.” READ MORE
HOUSING
A new law lets Californians buy and sell ADUs like condos: “Accessory dwelling units, also referred to as ADUs and ‘granny flats,’ have been available in California only as rentals. But a new law, Assembly Bill 1033, is giving Californians the opportunity to buy and sell them as condominiums. ADUs come in all shapes and sizes — for example, a converted garage, a small home in the backyard, or, as often seen in San Francisco, an unused portion of the main house, said Assemblyman Phil Ting, who drafted the legislation. Under AB 1033, which was signed into law this week, property owners in participating cities will be able to construct an ADU on their land and sell it separately, following the same rules that apply to condominiums. It gives homeowners more options for building on their property, and ‘the hope is, it would create more homeownership,’ said Ting.”
“He says he believes that many of the initial ADUs going through this process will be sold to the family members or close friends of the homeowner. ‘And then as people are more comfortable with this and you see more ADUs being sold, and it’s more prevalent, then I could see this being more of a traditional real estate transaction,’ he said.”
“Meredith Stowers, a loan officer at CrossCountry Mortgage in San Diego who specializes in ADUs, said AB 1033 benefits both homeowners and new buyers. ‘The typical homeowners we see are retirees who have long since paid off their mortgage, but are maybe living on a pittance of Social Security and meager retirement funds,’ she said.”
“Under this law, the retirees can earn supplemental income and young families can buy an affordable starter home.” READ MORE
INTERNATIONAL
What’s happening in China could have a bigger impact on American businesses than most realize: “China's leader, Xi Jinping, has shifted the CCP's raison d'être to national security over the economy. Getting rich isn't China's big project anymore; the project is power. As a result, both the government's priorities and its behavior have changed. In the past, whenever it seemed that a recession was on the horizon, the CCP came to the rescue. There's no hefty stimulus coming this time. Nor will the explosive growth that experts once expected from China return. Beijing's relationship with the outside world is no longer guided by the principles of economic rationality, but rather by its yearning for political power. ‘This isn't about the economy anymore, it's all about advanced technology and weaponry,’ Lee Miller, the founder of the Chinese economic surveyor China Beige Book, told me.”
“In response, American businesses need to consider how else Beijing's decision-making may now be flipped on its axis. For everyone from American farmers to pharmaceutical companies, this means shrinking demand and unstable supply chains.”
“The Chinese economy has been bending under the weight of its structural problems for almost a decade now, but since the end of Xi's Covid-lockdown policy, it's become clear that its growth model is well and truly broken.”
“The real-estate sector is the most visible sign of China's fading star, but other key parts of the economy are showing strain as well. While the rest of the world is battling inflation, China is still in deflationary mode.”
“The Wall Street Journal has reported that foreign executives are jittery about visiting China, afraid they'll never be allowed to leave.” READ MORE
STARTUPS
John Legend is launching a food and travel review site that only takes good reviews: “It’s Good touts itself as a more curated and personal recommendation engine than existing platforms such as Yelp and Google Reviews, where it can be difficult to sift through the high volume of reviews left by strangers for restaurants. The app allows only recommendations. Speaking at The Wall Street Journal’s Tech Live conference on Monday, Legend said that is in part a reaction against the negativity that pervades much of the internet. He acknowledged that the format requires that people trust that those making recommendations are sincere, but said it is integral to It’s Good’s approach. ‘It’s actually not even built for negative comments,’ he said. ‘Either you recommend it or you don’t.’”
“The company raised $5 million in funding this month from investors including Lightspeed Venture Partners, a Silicon Valley venture firm that made an early bet on Snap, as well as the restaurateur David Chang and entrepreneur Jessica Alba. The app launched in March with a select group of users and is currently invite-only.”
“The app delivers recommendations from users’ own social circles, as well as from critics, celebrities, influencers and other public figures. The initial batch of users included Chang and Alba, as well as NBA player Harrison Barnes and actress Minka Kelly.” READ MORE
THE 21 HATS PODCAST: DASHBOARD
The Insane Burden of Health Insurance: This week, we learn that Gene Marks and Bernie Sanders agree on something, which is that there are better ways to handle health insurance than making business owners responsible for providing it to their employees. Isn’t running a business hard enough without this financial and bureaucratic burden? Does it really have to be this way? Plus: Why Gene thinks what he calls “the era of the worker” won’t last forever. And what business owners need to know and do before they lay off or fire employees.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren