Discover more from The 21 Hats Morning Report
‘I Do. I Did. I’m Done.’
Businesses are finding lots of new ways to cater to the newly divorced.
Here are today’s highlights:
They put a year and their life’s savings into opening a gourmet deli.
In the latest Dashboard, Gene Marks talks about Microsoft’s soon-to-be released Copilot.
Shopify is trying to create awareness of the true cost of holding a meeting.
It’s not just American business owners who consider themselves over-regulated.
Bex Prasse and Craig Kovalsky spent almost a year restoring a run-down building on Main Street in the small Vermont ski town of Ludlow: “The couple were newcomers to the rural state, part of a pandemic-driven influx of younger transplants that has thrilled planners after decades of concern about an aging, stagnant population. ... By early this month, their work was almost finished. Wall tiles and countertops gleamed. A new industrial kitchen stood ready. They ordered pots and pans, sketched out a menu of gourmet sandwiches made from ingredients grown on local farms, and prepared to carve a wooden sign to replace the paper one in the front window: ‘Coming Soon Blue Duck Deli.’”
“Last Sunday [July 9], as rain began to fall, Mr. Kovalsky, a chef who has cooked at restaurants in New York City, and most recently on superyachts cruising the globe, gazed at the calm water and felt little fear. He knew about Tropical Storm Irene, which had ravaged the state in 2011, but had always heard it called a ‘100-year storm.’”
“Around 3 a.m. on Monday, flood warnings blared from their cellphones. Ms. Prasse and Mr. Kovalsky rushed to empty tools and equipment from the attached garage behind the house, but shortly after 5 a.m., they said, the river overflowed its banks and invaded the structure.”
“Because they had sunk all their savings into the deli, abandoning the project wasn’t an option, the couple said. But even if they could have cut their losses and moved on, the care the town had shown them since the flood had cemented their commitment to stay. ‘I’m kind of like, we don’t deserve all this; we’re new here,’ said Mr. Kovalsky.”
“Ms. Prasse said she hadn’t cried once about the damage. But her eyes filled with tears when she talked about her neighbors. ‘We haven’t even had a chance to make them a sandwich yet,’ she said.” READ MORE
THE 21 HATS PODCAST: DASHBOARD
ChatGPT on Steroids: This week, Gene Marks gives Loren Feldman a preview of what Microsoft is cooking up with a product called Copilot that Gene expects to be released before the end of year and that he promises will “rock your world.” Like ChatGPT, Copilot will access data on the internet but it will also be incorporated into all of Microsoft’s existing products so that it will also be able to access data in, say, your customer relations management software. That means you’ll be able to do things like ask Copilot to identify which of your customers you’re actually losing money on. For those of you already experimenting with ChatGPT, here’s a pro tip from Gene. To use ChatGPT well, you need to master the art of asking it prompts. Gene suggests consulting a helpful library of prompts for small businesses compiled by GoDaddy.
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More businesses are catering to the recently divorced: “On Etsy and Amazon, brands sell splitsville swag, including ‘End of an Error’ sashes, ‘Thank U Next’ rose-gold foil balloons, and ‘I do. I did. I’m done’ T-shirts. On Pinterest, the online platform for sharing creative ideas, ‘search trends show that people are gaining a new perspective of divorce,’ says Swasti Sarna, Global Director of Data Insights at Pinterest. Pinterest searches for ‘divorce-party games’ surged 80 percent, and searches for ‘divorce cakes’ rose 50 percent in June 2022 from a year earlier. There were also jumps in searches for divorce-party decorating ideas (35 percent) and for ‘divorce gifts’ (30 percent), according to Pinterest.”
“Some businesses cater to newly uncoupled men. Stripe Street Studio, a design firm founded in 2020, for instance, specializes in helping divorced and single men set up homes. On Pinterest, searches for the now popular catchphrase ‘divorced dad aesthetic’ were up nearly 300 percent in June from a year earlier, the company says.”
“[Fresh Starts] helps the newly unwed set up gift registries to restock specific rooms in their new homes. The most popular registry items are for kitchens and bathrooms. They also offer a network of experts, such as real-estate agents, forgiveness coaches, and a divorce doula who helps plan divorce parties.” READ MORE
You can probably guess what Backyard Office Utah builds and where it builds them: “The company, founded by Jonathan Hitzhusen in Herriman, specializes in building custom stand-alone offices in clients’ backyards. No larger than 200 square feet, the offices qualify as sheds under most zoning ordinances but are insulated and can be wired with electricity, heating and air conditioning, and even internet. ... . The idea didn’t initially come as a business plan, but as a way for him to expand his working space after his job at a tech company moved remote in 2020. So, armed only with his limited experience in do-it-yourself home improvement and YouTube construction tutorials, Hitzhusen took three weeks off in April 2021 to build himself an office.”
“‘I built it all from scratch — 10 to 12 hours a day — and by the end of it, I couldn’t feel my hands I had carpal tunnel so bad,’ he said. But when he was finished, he knew right away it had business potential. As more and more employees experienced being able to work from home, he felt demand for such working spaces would only continue to grow.”
“He acknowledges that he’s not the first, or even the biggest, player in the remote-working shed game, but said his company fills a niche by offering customizable products that can be built from the ground up at competitive price compared to pre-fabricated sheds that ship ready to be assembled.”
“The sheds aren’t exactly cheap — they run from around $35,000 to $45,000 with a variety of bells and whistles that cost extra — but Hitzhusen said the company is geared toward those who want something more robust, which is why Backyard Office Utah builds the sheds the same way they would build a house.” READ MORE
Burned out as an ER nurse during Covid, Rachel Nafis built a flower farm in the yards of her San Diego neighbors: “For three years, Nafis, a one-woman florist, has grown sunflowers, dahlias, and corncockles outside [Tom] Weaver’s home, one of eight neighbors who have donated their yards to Psalter Farm Flowers, a loose collective of cutting gardens that is a draw with San Diego flower shops, event florists, and bouquet lovers. Not surprisingly, the flowers burst out of yards in various states of bloom due to the seasons. Around the corner from her home base, across the street from Webster Elementary School in City Heights, yellow and pink strawflowers and delicate blue scabiosa pincushions grow tall in raised beds.”
“A quarter mile in the other direction, pink bellflowers and the conclusion of fragrant sweet peas grow in neat rows behind the rental home of Sophie Thompson. ‘All of my gardens are in places where people cannot care for their yards the way they would like,’ said Nafis, 36. She also cultivated the alley behind her 800-square-foot home. ‘I feel I’m adding value to their homes and our neighborhood.’”
“‘I try to grow things that don’t ship well,’ she said. ‘Most florists are getting things imported from out of the country. I like to grow things that would get damaged in shipping or not last that long and florists would like to source locally.’”
“Conserving water is important to Nafis, who subsidizes many of her neighbors’ water bills. ‘We have everything on a drip system and timers,’ she said. ‘I also use a lot of mulch, which helps to retain water and take care of my soil.’”
“‘My business model is very fragile but not as fragile as you might think. I’m not leasing land with a farm with a five-year commitment. I think that would be ideal, but that’s not a possibility. We couldn’t afford it, but we are grateful to own our house and be able to make a living through this creative shared-land model.’” READ MORE
Hybrid work has created a new dead zone when nothing gets done: “The 4 p.m. meeting is canceled because half the team can’t make it. You send an email with what would have been the main discussion points, and the replies roll in through the evening and into the next morning. A consensus that could have been reached before dinner now forms the following day. The hours that bookend the traditional close of business have become a dead zone at many companies, but employees aren’t just blowing off work to relax for the rest of the day. Workers say the 4-6 p.m. flex time they use to take a turn in the kids’ carpool, hit the gym or beat traffic often requires a third shift at night to finish the day’s tasks. They resent it when leaders assume they aren’t putting in eight or more hours of work, and they’re loath to relinquish the freedom to set their own schedules.”
“Despite the return of teeth-grinding commutes and overpriced lunches, lots of workers are sticking with the Covid-era habit of clocking out early and making it up later. By 4 p.m. on weekdays, golf courses are packed, according to a Stanford University study, as are many New York City restaurants.”
“At Komet U.S.A., a South Carolina-based maker of dental equipment, meetings after 4 p.m. or on Friday afternoon are against company policy, except in special circumstances. Chief Executive Mercedes Aycinena, promoted to the top job last year, introduced those calendar blocks last fall after polling the staff.”
“Aycinena, who has about 100 employees, usually leaves the office at 5 p.m. to spend time with her three children and then resumes work later as needed. She lets subordinates shift their hours, too, and credits flexibility with helping reduce turnover from 50 percent to 15 percent over the past year.” READ MORE
Pay raises are finally beating inflation: “Americans’ growing paychecks surpassed inflation for the first time in two years, providing some financial relief to workers, while complicating the Federal Reserve’s efforts to tame price increases. Inflation-adjusted average hourly wages rose 1.2 percent in June from a year earlier, according to the Labor Department. That marked the second straight month of seasonally adjusted gains after two years when workers’ historically elevated raises were erased by price increases. If the trend persists, it gives Americans leeway to propel the economy through increased spending, which could help the U.S. skirt a recession.”
“Raises for lower-income workers were particularly strong in early 2023. Restaurants, hotels, and similar businesses hired at a brisk pace to cater to customers eager for services that were limited initially in the Covid-19 pandemic. While leisure and hospitality employment gains have slowed in recent months, workers in the industry saw their hourly pay rise faster than overall wage growth and inflation.”
“Wages for manufacturing and business-services workers are also outpacing inflation. Pay gains have been narrower in the tech-heavy information sector, where several large companies have cut staff.” READ MORE
Shopify is trying to improve productivity by shaming employees who hold pointless meetings: “The Canadian e-commerce company has rolled out a calculator embedded in employees’ calendar app that estimates the cost of any meeting with three or more people. The tool uses average compensation data across roles and disciplines, along with meeting length and attendee count, to put a price tag on the event. A typical 30 minute endeavor with three employees can run from $700 up to $1,600. Adding an executive — like Chief Operating Officer Kaz Nejatian, who built the program during a company-wide hack day — can shoot the cost above $2,000.”
“The new tool is part of the company’s yearlong drive to reduce unnecessary gatherings. Earlier this year, Shopify eliminated all recurring meetings with more than two people and started discouraging meetings on Wednesdays. The goal of these initiatives, said Nejatian, is to ‘change the default answer from yes to no.’”
“The company is on pace to cut out 322,000 hours and 474,000 discrete events in 2023, according to Nejatian. ‘No one at Shopify would expense a $500 dinner,’ Nejatian said in an interview. ‘But lots and lots of people spend way more than that in meetings without ever making a decision. The goal of this thing is to show you that time is money. If you have to spend it, you think about it.’”
“At Shopify, the average time spent in meetings per worker declined 14 percent over the first five months of 2023 compared with the same period last year. That’s helped contribute to a projected 18 percent increase in finished projects this year, Nejatian said.” READ MORE
A quarter of smaller German companies say they are considering giving up because of excessive regulation: “One in four German small and mid-sized companies would think about throwing in the towel because of what they see as the country’s excessive bureaucracy, according to a recent survey reported by DPA. Some 26 percent of businesses polled by the Association of Small and Medium-Sized Enterprises said they would consider selling up, while 22 percent have thought about relocating their businesses abroad. A third of respondents said their businesses are weighted down by too many regulations in Germany, and more than a quarter cited high taxes and duties as obstacles.” READ MORE
THE 21 HATS PODCAST
‘You’re in the Valley of Death:’ Shawn Busse, Jay Goltz, and Jennifer Kerhin talk about that difficult transition when the owner of a growing business can no longer handle all of the most important tasks herself but also can’t quite afford to hire the people she needs to lighten her load. It’s part of the reason Jennifer, as she’s told us in previous episodes, has been working 12-hour days, six days a week. It’s a challenging transition, and it has a name: It’s the “valley of death,” says Shawn, who compares it to crossing a desert. We also discuss how big the owners want their businesses to get, why important tools and processes seem to break with every $500,000 of revenue growth, and what constitutes the proper care and feeding of salespeople.
Plus: Jay has an idea for owners who are having a hard time selling their businesses. The idea involves selling the business to a key employee in a transaction Jay is calling a WE-SOP. Get it? It’s kind of like an ESOP, but it’s a lease-to-own version of an ESOP. A WE-SOP.
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Thanks for reading, everyone. — Loren