Get Out of the Office
Lou Mosca says too many business owners are hiding behind closed doors when they should be out spending time with customers and employees.
Good Morning!
Here are today’s highlights:
In Maine, immigrants are filling the labor gap, which may explain why we haven’t had a recession.
Gene Marks has a mixed review of Google’s new AI tools.
With AI looming, Axios is shifting its business model toward newsletters and events.
A highly successful family-owned discounter was sold to private equity, ran up a lot of debt, and failed. Anyone surprised?
MANAGEMENT
In this week’s video, Lou Mosca emphasizes the benefits of getting out of your office: “I've met with countless owners over my tenure at American Management Services who stay guarded in their offices. I've advocated for owners to get off their fannies, get out from behind their desks, and shake the hands of every one of their clients. Doing this helps strengthen relationships and demonstrates care and support for you and your team's efforts. If you want to discuss this challenge or any of the challenges I’ve discussed in previous videos, feel free to connect with me on LinkedIn.”
HUMAN RESOURCES
Immigrants are filling the labor gap in Maine: “Maine has a lot of lobsters. It also has a lot of older people, ones who are less and less willing and able to catch, clean, and sell the crustaceans that make up a $1 billion industry for the state. Companies are turning to foreign-born workers to bridge the divide. ‘Folks born in Maine are generally not looking for manufacturing work, especially in food manufacturing,’ said Ben Conniff, a founder of Luke’s Lobster, explaining that the firm’s lobster processing plant has been staffed mostly by immigrants since it opened in 2013, and that foreign-born workers help keep ‘the natural resources economy going.’”
“It’s a common issue in the Denver area, where shelters were housing nearly 5,000 people at the peak early this year, said Jon Ewing, a spokesman with Denver Human Services. The city has helped about 1,600 people apply for work authorization, almost all successfully, as it tries to get immigrants on their feet so they do not overwhelm the local shelter options.”
“The new supply of immigrants has allowed employers to hire at a rapid pace without overheating the labor market. And with more people earning and spending money, the economy has been insulated against the slowdown and even recession that many economists once saw as all but inevitable as the Federal Reserve raised interest rates in 2022 and 2023.”
“At the Luke’s Lobster processing plant in Saco, Maine, Mr. Conniff has often struggled to find enough help over the years, despite pay that starts at $16 per hour. But he has hired people like Chenda Chamreoun, 30, who came to the United States from Cambodia in 2013 and worked her way up from lobster cleaning to quality assurance supervisor as she learned English.”
“Now, she is in the process of starting her own catering business. Immigrants tend to be more entrepreneurial than the nation as a whole — another reason that they could make the American economy more innovative and productive as its population ages.” READ MORE
Scoop Technologies is turning data about how companies use their office space into a new business line: “When Rob Sadow launched the Flex Index early last year—now a widely cited database of companies’ remote work policies—it was intended partly to help generate leads for his company. Sadow, the cofounder and CEO of hybrid work management software Scoop Technologies, hoped the index would be a searchable tool for job seekers and HR managers, but also help Scoop build its brand and source reliable information about which firms have hybrid work policies—and might one day become customers.”
“Now, Sadow sees potential for the tool—combined with additional data it aims to collect—to become a revenue source of its own. The Flex Index is free and will remain so. But as one of the most comprehensive data sources about companies’ remote work policies, he’s been getting increasing questions from employers about whether he has more granular real estate and workplace data.”
“Executives have been asking questions such as whether he has data on companies’ average attendance as a percent of desks, how much square feet per employee is typical, and how all those metrics compare to others with, say, two-day or five-day in-office policies. On Thursday, Sadow plans to launch a benchmarking subscription tool that helps answer those questions.”
“The service will use a ‘give-to-get’ subscription model Sadow compares to the compensation data tools many employers already use. To get access to aggregate information, companies will need to share their data about things like number of employees per square foot, desk sharing ratios, attendance numbers, employee engagement scores and turnover rates, as well as pay a subscription fee.” READ MORE
ARTIFICIAL INTELLIGENCE
Gene Marks has a mixed review of five new AI tools for users of Google Workspace: “As I write this, countless software companies — big and small — are working on adding AI-driven features to their business applications. One of those companies, of course, is Google, which last year offered Gemini, its AI Assistant for Workspace that aims to automate many functions from document creation to writing emails. Gemini costs $20 to $30 per month per user depending on the size of your organization. But if you don’t want to jump in so quickly you can now test the waters with a less expensive version ($10 per month per user) that offers at least five new AI tools that can benefit your business:”
“Notes in Meet (available now in preview): A new AI function in Google Meet will, according to the company, ‘let you drop the pen and lean into the conversation instead of taking notes.’ By turning on this option you’ll get a full transcript and summary of your Google Meet meetings. This function already exists in competitors like Zoom and is offered by countless startups like Otter and Fathom so Google is catching up. But I’m glad to see them joining the party.”
“Translate For Me (coming in June): According to Google, this new AI feature ‘will automatically detect and translate captions in Meet with support for 69 languages, helping people feel more confident and connected to their colleagues, regardless of language.’ I’m guessing you’ll need to have captions on during these conversations so that the tool can do its job. I’m expecting future versions of this potentially amazing tool to literally translate spoken conversations on the fly. But for now, this is super-powerful, particularly at a time when many of us are looking to do more business with overseas customers and suppliers.”
“Security (available now): This AI tool is more geared for your IT team so you want to make sure they’re aware. It’s also an additional $10 per user per month. Google says it will allow ‘IT teams to automatically classify and protect sensitive files company-wide in Google Drive.’ Its AI models can be trained to take data that’s unique and sensitive to your organization and add additional protections. Honestly, I’m not really sure what that really means and how it works and whether or not it really does provide more security.” READ MORE
Axios is shifting its strategy as the AI onslaught begins: “In the view of Jim VandeHei, the chief executive of Axios, artificial intelligence will ‘eviscerate the weak, the ordinary, the unprepared in media.’ The rapid rise of generative A.I. — and its implications for how people will discover and consume news — has unsettled many media executives. Like them, Mr. VandeHei has spent the past year or so pondering how to respond. Now he’s becoming one of the first news executives to adjust their company’s strategy because of A.I.”
“Mr. VandeHei says the only way for media companies to survive is to focus on delivering journalistic expertise, trusted content and in-person human connection. For Axios, that translates into more live events, a membership program centered on its star journalists and an expansion of its high-end subscription newsletters.”
“Axios is pouring investment into holding more events, both around the world and in the United States. Mr. VandeHei said the events portion of his business grew 60 percent year over year in 2023.”
“The company has also introduced a $1,000-a-year membership program around some of its journalists that will offer exclusive reporting, events, and networking.” READ MORE
THE ECONOMY
The Producer Price Index, which measures the cost to make things and is especially important to business owners, offers some reassurance: “A measure of wholesale prices increased less than expected in March, providing some potential relief from worries that inflation will hold higher for longer than many economists had expected. The producer price index rose 0.2 percent for the month, less than the 0.3 percent estimate from the Dow Jones consensus and not as much as the 0.6 percent increase in February, according to a release Thursday from the Labor Department’s Bureau of Labor Statistics.”
“The release comes a day after the BLS reported that consumer prices again rose more than expected in March, raising concerns that the Federal Reserve will be unable to lower interest rates anytime soon.” READ MORE
CUSTOMER SERVICE
Food & Wine suggests six signs that should send you looking for a different restaurant. Of course, if any of these signs are present at a restaurant you run, you should know that people notice:
“A dirty restroom: When you step into the restroom and are greeted with a wet floor, an overflowing trash can, or a lack of soap in the dispenser, listen to your inner lifeguard whistle. If a restaurant doesn’t make the effort to clean an area that customers see, what might other parts of the restaurant look like?”
“A 10-page menu: If the menu is wordier than Gone With the Wind, you might want to reconsider. A truly great restaurant focuses on a select number of entrees, while a menu that spreads itself too thin, well, just doesn’t. It’s hard to trust a kitchen that can make meatloaf, lasagna, and enchiladas.”
“You’re being ignored: You should be acknowledged by someone when you enter a restaurant by either the host, a server, or even someone standing behind the bar. You want to know that they know you are there. If after being seated you still feel neglected, it could be an indication of what’s to come.” READ MORE
FAILURE
99 Cents Only, the iconic L.A. closeout chain, is closing: “It was Friday the 13th when the first 99 Cents Only store opened in 1982 on La Tijera Boulevard. To commemorate the grand opening, founder David Gold sold television sets for 99 cents to the first 13 customers. He had developed his affinity for the price point while working at a liquor shop at Grand Central Market downtown, when he would put closeout bottles of wine on a table and mark them down to 99 cents. After that first August morning, the everyday deals at 99 Cents Only weren’t television-set levels of spectacular, but the bargains were steep and the extreme discounter became an essential stop within the community, son Howard Gold recalled in an interview last week.”
“Within two years, the family — all four Gold children eventually worked for 99 Cents Only in some capacity — had opened two more locations. By 1991, there were two dozen. Business boomed over the next couple of decades. 99 Cents Only had grown to 289 stores in California, Texas, Arizona, and Nevada by the time it agreed to be sold in 2011 to Los Angeles private equity firm Ares Management and the Canada Pension Plan Investment Board.”
“Now, all 371 stores are liquidating after the City of Commerce company abruptly announced last week that it was going out of business. It’s a stunning fall for the beloved chain, whose stores are primarily located in urban areas and underserved communities, many of which lack close access to traditional grocery stores.”
“What happened? Company executives and industry analysts blamed a series of factors, including the Covid-19 pandemic, escalating theft and crime, competition, big increases in operating costs stemming from high inflation, and the expense of servicing its debt.” READ MORE
THE 21 HATS PODCAST
Do You Take This Man to Be Your Business Partner? This week, Liz Picarazzi, Jaci Russo, and Laura Zander talk about what it’s been like building a business in partnership with a spouse, and they all agree on some important things. For one, they all say that, had their husband been just another employee, he probably would have been fired. All three say that in their relationships, they are the gas that drives the business, and their husband is the brake that sometimes keeps them out of trouble and sometimes frustrates their entrepreneurial instincts.
And all three agree that some things are best left undiscussed. For example, says Jaci: “Michael doesn’t even know what we make. He also doesn't know what any of the employees make.” But the three CEOs also agree on this: In the final cost-benefit analysis, they wouldn’t want to build a business any other way.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren
