Is PR Worth the Effort?
In our latest podcast episode, William Vanderbloemen says yes. But Paul Downs has his doubts.
Here are today’s highlights:
“I never worry about [the] economy,” a real estate syndicator told his small investors.
Could your business go 30 days without a single meeting?
Applying for a job can be a miserable experience. That presents smaller companies with an opportunity.
When should you be concerned about a copycat competitor?
THE 21 HATS PODCAST
Is PR Worth the Effort? This week, William Vanderbloemen says good public relations is absolutely worth the time and money. Paul Downs, on the other hand, says PR hasn’t worked for him. At this point, he says, there are all kinds of ways he’d rather spend his time and money. Meanwhile, Sarah Segal, who owns a PR firm, offers some tips on how to approach and how to employ a firm effectively. Along the way, we discuss what’s expensive when it comes to PR and whether owners can just do it themselves. Plus: Paul explains how he dug himself out of a sales hole by not doing anything differently. And we find out how the owners feel about all of the new ways they’re being asked to leave tips. Spoiler alert: they’re not loving it.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thousands of real estate entrepreneurs, known as syndicators, are headed for default: “Few investors rode the pandemic-era housing boom as high as Jay Gajavelli. Fewer still have fallen as far. Before Gajavelli found his real-estate career, the 61-year-old immigrant from India was just another information-technology worker, putting in 60-hour weeks for a middling job in Dallas. Last year, Gajavelli’s company owned more than $500 million worth of Sunbelt apartment buildings with more than 7,000 units, and was one of Houston’s biggest landlords. Over the past four years, Gajavelli built his real-estate empire using funds from dozens of small investors who wanted a chance to earn a landlord’s riches without any of the work.”
“‘I never worry about [the] economy now,’ Gajavelli told investors in a webinar presentation last year for his company, Applesway Investment Group. ‘Even if [the] economy goes down, still I make money.’”
“Gajavelli’s investors were, in fact, highly vulnerable to interest-rate increases over the past year that crushed the business model that they and thousands of others in similar deals across the U.S. had hoped would make them wealthy.”
“His company had taken out commercial real-estate loans that carried floating interest rates and were adjusted each month. Those types of loans in 2021 offered initial rates as low as 3.5 percent. Everything changed when the Federal Reserve began raising rates last year, driving up monthly loan payments.”
“In April, Gajavelli’s company lost more than 3,000 apartments at four rental complexes taken in foreclosure, one of the biggest commercial real estate blowups since the financial crisis. Investors lost millions. Gajavelli didn’t respond to requests for comment.” READ MORE
Meanwhile, WeWork is in big trouble again: “WeWork's latest CEO, Sandeep Mathrani, resigned earlier this week, and its shares plunged anew. The company is now worth about $200 million. The stock, at 24 cents, is trading like WeWork is in big trouble. A better guide comes from the bond market, but the signs there are not very hopeful either. One of WeWork's bonds, which matures in 2025, recently traded at 56 cents on the dollar, according to Bloomberg data. A healthy company's debt often trades at 100 cents on the dollar, or at a very slight discount.”
“‘The company is still burning cash,’ the rating agency wrote. ‘Fitch expects the cashflow burn to persist through 2023, and it is uncertain when the company can become cash flow positive.’” READ MORE
This company went 30 days with no meetings: “Getting rid of all meetings isn't an option — or is it? TechSmith, a screen capture software and productivity solutions platform, noticed this trend within their own workforce and took a drastic step: Instead of attempting to cut down the number of meetings taking up time during the week, they shut down meetings for an entire month last July. What they found has reshaped their approach ever since. ‘Having a meeting should not be the default. We all need to be intentional about how we're using other people's time, and that was a big part of this experiment,’ says Amy Casciotti, VP of HR at TechSmith. ‘It's not that we thought we were going to get rid of meetings forever, but it was ensuring that we were being very intentional about the meetings we were having, and that they were productive for everyone in the room.’”
“‘We found out a lot of our meetings were just people sharing information; now we've done what we call flipping the meeting, where folks will share information ahead of time, so our employees actually have time to think about the information and give a thoughtful response back or brainstorm some ideas,’ she says. ‘Then, if we still need to have a meeting, we're not just sharing information, we're actually having a conversation and needing less time than we did before.’”
“Since the experiment ended, TechSmith hasn't eliminated every meeting. But research shows keeping a few meetings on the schedule can help employees, too. A 2022 survey of 76 companies from Harvard Business Review found employee productivity was 71 percent higher when meetings were reduced by 40 percent, and removing 60 percent of meetings increased cooperation by 55 percent.”
“As employers look to trim costs, reducing time waste from meetings can make a big impact: the average organization invests over $80,000 in meetings per employee, per year, according to the report from Otter.” READ MORE
Applying for jobs can be miserable, which is why businesses that treat candidates as if they’re people have an advantage: “The world of hiring is strange right now. Economic instability, opaque hiring processes, and the destabilizing rise of technologies like generative AI have converged into an environment where it's hard for job seekers to feel like they have even a basic sense of what is going on. Finding a job right now isn’t only tough, it’s deeply weird.”
“A 2022 study by the small-business-loan provider Clarify Capital found that over 27 percent of 1,000 surveyed hiring managers admit to leaving ‘ghost job’ postings up online for over four months, both to create the illusion of booming business and to placate overworked employees who want to see that their bosses are ostensibly looking for more help.”
“Even when an applicant is able to find a real job that a company is actively trying to fill, new technology is stacking the deck against all but the tech savviest. That's because instead of hiring managers reviewing applications, today many companies have turned to automation to reduce costs and simplify the process.”
“In March, [Michael] Keach, who is 51, described his job search on LinkedIn: ‘I have participated in about 20 hours of interviews, have received no job offers, ghosted by recruiters and have my fair share of rejection emails,’ he wrote. He said the job hunt ‘has been one of the most mentally challenging experiences in my adult life’ — more taxing than his 20-year career in the U.S. Air Force.” READ MORE
What should you do about a copycat? (And yes, we’re looking at you, Liz!): “When you see someone copying your business, your first reaction is probably going to be infuriation — you've worked for years on an idea, and now someone's just swiping it? That can definitely be frustrating. But really, you should be flattered. Think about it: ‘Wow, someone thinks we're successful enough to copy? I should get a pat on the back.’ So, if someone is copying you, be proud. Once you've congratulated yourself, do a mental checklist to see if any actual laws are being broken. No need to call an attorney (yet) — just check if any of your filed trademarks or copyrighted graphics and text are being used by your so-called competition. You should also see if they're committing any trade dress infringement — in other words, when the look and feel of their product is close enough to yours to confuse a consumer.”
“In the early days of my company, Trainual, we had a competitor go so far as to copy our entire website. They were so blatant and lazy about it, their copy even used ‘Trainual’ in a bunch of places. At this point, we got an attorney involved, and a simple cease-and-desist letter took care of it.”
“If you've got a competitor who's essentially a low-quality bootleg of your business, they're not much to worry about. Needless to say, the competitor who copied our entire website is no longer around — when a copycat tries to sell such a poor imitation, it's not one to worry about. But sometimes there can be cause for concern. What if your copycat is doing a good job?”
“Jeff Bezos once said, ‘If we can keep competitors focused on us while we focus on the customer, ultimately we'll turn out all right.’” READ MORE
LOCATION, LOCATION, LOCATION
Is Dallas the new Dubai? “Dallas has long had a reputation for living large, an image built on oil money and the wide swaths of ranch land displayed on its namesake TV series. But today, the city is enjoying a surge of new development, new residents, new wealth — and a dining scene pumped up by the arrival of several high-end national restaurant groups, all looking to cater the party. These companies are giving Dallas the kind of attention they’ve previously lavished on tourist playgrounds like Las Vegas and Miami.”
“From April 2020 to July 2021, the Dallas-Fort Worth area gained about 122,000 new residents, more than any other metro area in the nation, according to Census data. Some demographers predict that by the 2030s, Dallas — now the largest metropolis in Texas — could replace Chicago as the third-largest metro area in the nation.”
“‘You have no idea the velocity of spending that happens in that market,’ said Julie Macklowe, the founder of the Macklowe American Single Malt Whiskey, which sells for $350 to $400 a shot in numerous Dallas restaurants. ‘It is like the U.S.’s version of Dubai.’”
“In Dallas, these companies have also found manageable operating costs. There’s no state or local income tax. Rents are cheaper and ingredients cost less than in many other major cities, said Matt Winn, a partner in and the chief development officer of the Chicago-based Maple Hospitality Group, which has two Dallas restaurants.”
“‘If you can find restaurants busy on Mondays and Tuesdays and restaurants in a dense, two-mile radius that can do $17 million, $22 million, there are no more than 10 markets that can justify that kind of spend on a regular basis,’ he said. ‘That makes it special.’” READ MORE
The model, post-Covid city happens to be in Canada: “The downtown transformation that so many other cities are desperate for is underway in Calgary, a city of 1.4 million in Alberta, which is often dubbed the ‘Texas of Canada’ for its ties to the oil and gas industry. But today, office towers that once housed energy companies are rapidly being converted into apartments. Calgary offers a road map — and a tool kit — for D.C. and other beleaguered cities on how to make the switch rapidly and efficiently. Calgary got a jump-start on its downtown metamorphosis because of the 2014 oil price crash. Initially, many believed the industry would bounce back, but by the time the coronavirus crisis hit, even the talk at Calgary’s Petroleum Club had turned toward how to reinvent the city.”
“Fears spread of the city becoming the ‘next Detroit.’ At City Hall, staff calculated that the value of downtown commercial buildings had nosedived from nearly 25 billion Canadian dollars in 2015 to about 9 billion Canadian dollars in 2021.”
“The biggest takeaway is to go big and bold. Calgary launched its turnaround plan with 200 million Canadian dollars and a goal to invest 1 billion in the next decade. It included incentives of up to 75 Canadian dollars per square foot for developers, and — equally important — City Hall sped up the permitting process to less than two months.”
“The heart of the strategy was a big, yet simple, incentive program to transform offices into apartments to increase the number of downtown residents. Under the plan, developers submit bids to a newly created Downtown Strategy office. If approved, funds are set aside but developers don’t get the money until the building opens for residents. This puts the risk on the developer if a project fails.”
“As for permitting, ‘Our mantra is to move at the pace of business,’ said Sheryl McMullen, manager of investment and marketing for the Downtown Strategy office.” READ MORE
LinkedIn has become an emerging front for cyber attacks: “About 52 percent of businesses experienced at least one LinkedIn scam this year, according to new research by network security firm Nordlayer. The most common form of scam was a request to connect from an unknown person with a suspicious link. While LinkedIn attacks were more common against larger businesses, about 31 percent of small businesses said they had been targeted on the social media network, with 67 percent reporting a financial loss associated with the attack. Another 58 percent said there was an interruption to operations.”
“‘We know that employees are considered to be the weakest link in the cybersecurity chain, and LinkedIn has millions of professional accounts, making it an even more appealing target for scammers,’ said Carlos Calas, a cybersecurity expert at NordLayer. ‘So no one should let their guard down, no matter how professional a message might look.’”
“Experts say the key is to educate employees on the types of scams that exist and how to recognize them, and encourage them to use two-factor authentication on their LinkedIn accounts.”
“If someone asks them for their sensitive information, they should first try to verify that request through a different channel.” READ MORE
THE 21 HATS PODCAST: DASHBOARD
Are We Really Going to Ban TikTok? This week, Gene Marks says he thinks the ban signed by Montana's governor is a political stunt that could do real damage to businesses that have come to rely on the app. And yet, there seems to be momentum for similar bans in other states and even at the federal level. Plus: how to avoid committing ERTC fraud, why bankruptcies are skyrocketing, and should the business community be doing more to warn against risking default?
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren
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The value of PR varies dramatically by company and industry. In the B2B world, PR is largely a waste of time and money, which would be better spent serving and understanding individual customers, versus broadcasting messages. This Inc article lays out a good path: https://www.inc.com/bill-fotsch/how-to-find-your-customers-why.html
Thanks for sharing, Bill!