Never Stand In Front Of a 7-Eleven
Pretty much every day, a driver in the U.S. hits the gas instead of the brake and crashes into a 7-Eleven. Of course, it happens at other storefronts, too.
Good Morning!
Here are today’s highlights:
Think twice before donating your yacht as a tax deduction.
Reminder: there’s a huge wave of government money headed toward green industries.
“Resenteeism” is the new quiet quitting.
Albert Okura built a fast-food chain and saved a ghost town.
MARKETING
When it comes to TikTok, hiring an intern may be better than hiring an agency: “When Mary Clare Lacke, a 20-year-old student at the University of Missouri, interned at Claire’s last summer, one of her tasks was to help the teen-accessories company with its nascent TikTok account. It didn’t take long for her to produce a hit — though it wasn’t one that the retailer saw coming. In an 11-second video, Ms. Lacke riffed off a pranking trend inspired by Kris Jenner to promote a style of the retailer’s earrings. ‘My team was just like, We’re not 100 percent sure what this is, but go for it,’ Ms. Lacke said. ‘And then it became the most successful video that the account has seen.’ The video generated 1.5 million views and 20,000 new followers for the company’s TikTok account.”
“Frutero, a tropical fruit ice cream brand founded in May 2020, said it was inundated with more than 250 applications after advertising its TikTok creator internship. (Desired skills included ‘humor and meme-making abilities.)”
“Although Frutero has only three full-time employees, it was considering hiring three or four interns to make TikTok videos based on so much interest in the job, said Vedant Saboo, a co-founder.”
“Frutero raised enough money to hire a marketing agency, he continued, but, ultimately, he wasn’t enthusiastic about ‘professional content creation.’”
“‘I don’t know why, but it is just not the raw feel that is there on TikTok,’ he said. ‘I have found that most of these agencies who employ millennials, they do not understand the rawness of TikTok as well as young people.’” READ MORE
There’s been a demonstrable decline in the quality of digital ads: “Advancements in digital advertising technology were meant to improve users’ experience. People interested in shoes are intended to get ads for sneakers and loafers, and not repeated pitches for courses teaching seduction techniques. And the technology is supposed to filter out misleading or dangerous pitches. But lately, on several platforms, the opposite seems to be happening for a variety of reasons, including a slowdown in the overall digital ad market. As numerous deep-pocketed marketers have pulled back, and the softer market has led several digital platforms to lower their ad pricing, opportunities have opened up for less exacting advertisers.”
“Advertising experts agree that crummy ads — some just irritating, others malicious — appear to be proliferating. They point to a variety of potential causes: internal turmoil at tech companies, weak content moderation, and higher-tier advertisers exploring alternatives.”
“In addition, privacy changes by Apple and other tech companies have affected the availability of users’ data and advertisers’ ability to track it to better tailor their ads.”
“Major social media platforms are now ‘like the mall in your hometown that used to be the good mall,’ Mr. Richardson said: ‘But now there’s no longer a Macy’s there — it’s just a calendar store and a place selling beepers.’” READ MORE
LITIGATION
Pretty much every day, a driver somewhere in the U.S. hits the gas instead of the brake and crashes into a 7-Eleven: “A 57-year-old suburban man who became a double amputee after a car pinned his legs against the front of a Bensenville 7-Eleven will receive a $91 million payout from the convenience store chain. The 2017 crash was one of the thousands of similar incidents identified in discovery for the case, collisions that frequently resulted in crippling injuries, said James Power, one of the attorneys representing the plaintiff, who wished to be identified as ‘Carl’ to avoid drawing attention to his windfall.”
“The case was the first in which attorneys had access to some 15 years of reports from 7- Eleven, which identified some 6,253 storefront crashes at 7-Eleven stores across the country, Power said. Data from a previous lawsuit against the company identified another 1,525 crashes between 1991 and 1996.
“The crashes could have been prevented if 7-Elevens had installed bollards — thick posts anchored in the ground — between storefronts and parking spaces, Power said.”
“‘We have evidence 7-Eleven had been getting sued for these kinds of incidents going back to 1990,’ Power said, noting the total number of storefront crashes identified in the case indicated that, on average, a car crashed into a 7-Eleven store about once a day.” READ MORE
But it’s not just a 7-Eleven problem: In fact, more than a hundred drivers crash into storefronts every day. READ MORE
TAXES
Don’t try this at home: “JR and Loren Ridinger wanted a new yacht. First, they needed to get rid of the old one. The 116-foot Utopia II wasn’t selling, so the Ridingers and their lawyers hatched an alternative plan: Donate it, and reap a big tax deduction. Lots of charities take shoes and clothes. Some take cars (often selling them for cash). Yachts, not so much. What followed was an odyssey now approaching its eighth year. Audits, lawsuits, a midsea collision. The lesson: Think very, very carefully before you donate your yacht.”
“The Ridingers traded up to larger vessels as they built Market America Worldwide into an international business with huge conventions for the company’s ‘UnFranchise Owners.’ Those ‘UnFranchise Owners’ sell goods [antiaging creams and vitamin supplements] to their networks and earn a commission when they recruit others to do the same.”
“Mr. Ridinger was known for his hours-long motivational speeches at Market America’s events. In tinted glasses and sweating through his dress shirt, he used a human-sized hamster wheel to pitch attendees on achieving financial freedom. He dismissed claims that his business was a pyramid scheme ...”
“The Ridingers thought the 2016 donation would save them about $2 million on their taxes. Instead, they ended up paying $3.5 million in taxes and penalties.” READ MORE
THE 21 HATS PODCAST: DASHBOARD
The Good News About Gen Z: This week, Gene Marks talks about what Gen Z values in a job. The research suggests it’s not the job -- it’s more about people and meaning. And that’s good news for smaller businesses, because those are things they can offer. But you might want to emphasize that in your job descriptions. Plus: Is this recession happening or not? And what will ChatGPT’s upending of search mean for all of the businesses that have been investing in SEO? They’re not going to be happy, says Gene.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
CLIMATE
It has yet to sink in just how big a windfall is headed toward green industries. For example: “Over the next decade, the government is going to invest $8 billion on hydrogen ‘hubs’ across the country, special zones where companies, universities, and local governments can build the machinery and expertise that the new industry needs. Other hydrogen projects will qualify for a $10 billion pot of money in the Inflation Reduction Act or $1.5 billion in the infrastructure bill. Still others could draw from a new $6.3 billion program that will help industrial firms develop financially risky demonstration projects. So that’s up to $25.8 billion before you get to the bazooka: an uncapped tax credit for hydrogen that could pay out perhaps $100 billion or more over the next decades.”
“Few Americans realize it yet, but the trifecta of the Biden-era laws amounts to one of the biggest experiments in how the American government oversees the economy in a generation. If this experiment is successful, it will change how politicians think about managing the market for years to come.”
“If it fails or misfires, then it will greatly limit the number of tools to fight climate change or a recession.” READ MORE
HUMAN RESOURCES
Resenteeism is the new quiet quitting: “Dubbed ‘the natural successor to quiet quitting’ by Glamour UK’s Bianca London, resenteeism describes the act of staying in an unsatisfying job due to a perceived lack of better options or fear of job insecurity. A worker in those circumstances begins to actively resent their current workplace and often doesn’t do a great job of hiding it. ‘Employees that feel undervalued, underappreciated, and worried about their futures are never going to be happy in their jobs, and the rise in resenteeism, while worrying, isn’t unexpected,’ Pam Hinds, head of people at SaaS company RotaCloud, explained to Glamour last month. (Glamour credits RotaCloud with coining the term.)”
“Resenteeism is a spin on ‘presenteeism,’ which describes employees showing up—or logging on to Slack or Teams—just for the sake of appearing to be doing work. In the case of resenteeism, workers are less subtle about their apathy or outright frustration, and that attitude is likely to spread around the office just as much as presenteeism could. Such low morale can decrease productivity and create more conflict.”
“The aftershocks of the Great Resignation might be at least partly to blame for resenteeism catching fire. Consider a workplace that has been gutted by a string of quits and is now operating a skeleton crew.” READ MORE
If your culture stinks, offering better compensation probably won’t help: “Donald Sull, a senior lecturer at the M.I.T. Sloan School of Management, was a co-author of a study of attrition that examined a period between April 2021 to September 2021, incorporating employee reviews from Glassdoor, a jobs website. The study found that corporate environment ranked as the top factor in employee retention. A toxic corporate culture was ‘10 times more predictive of having a higher-than-industry-average attrition rate than compensation,’ Mr. Sull said. While there is no standard definition of a toxic culture, it can involve a lack of respect for employees, a noninclusive environment, unethical as well as cutthroat behavior and, most strikingly, abusive management, he said.”
“Mr. Sull and his son Charles founded Culture X, a firm that focuses on improving corporate environment.”
“Two other factors that have been found to help retain employees are offering remote work options and more consistent scheduling for those for whom remote work is not an option, Mr. Sull’s 2021 analysis found.”
“‘Pay is like the entry fee to engaging employees. It needs to be there, but don’t expect it to drive outstanding performance.’”READ MORE
OBITUARY
Albert Okura built a fast-food chain and saved a ghost town: “By 1970, he was flipping burgers for minimum wage at Burger King. He quit Los Angeles Junior College the next year, worked his way up to manage other fast food outlets. In 1984, when he was 32, he opened a rotisserie chicken restaurant in Ontario, east of Los Angeles, with the help of his uncle and brother-in-law and a recipe created by Armando Parra, a friend who had been raised in Chihuahua, Mexico. A five-star review of his second outlet in The San Bernardino Sun kick-started the Juan Pollo chain.”
“Mr. Okura, who credited [McDonald’s] with his preoccupation with fast food, opened an unofficial McDonald’s museum [in San Bernadino, Calif.], as well as the corporate headquarters of his rotisserie chicken chain, Juan Pollo.”
“Some 140 miles to the northeast on Route 66, he bought an entire ghost town for $425,000 in 2005 and promised to restore it. The unincorporated town, Amboy, Calif., consisted of a shuttered motel, a post office, an abandoned church, two dirt air strips, and a gas station with a distinctive, if non-working, 50-foot-high space-age-style neon sign that had been a beacon for motorists on Route 66 for decades.”
“As Japanese Americans, his parents had been held in detention camps during World War II. His father was serving in the U.S. Army when he was rounded up.” READ MORE
21 HATS: LIVE FROM CHICAGO
Join us for the very first 21 Hats Live event: This intimate, three-day gathering will be limited to 20 business owners/CEOs. It starts with dinner on Wednesday, May 17, and runs through lunch on Friday, May 19. It will feature lots of opportunities to engage with other owners on similar journeys. We’ll have two deep-dive peer group sessions, for which you’ll help choose the topics. Bring your own challenges! You’ll also get to hang with 21 Hats Podcast regulars including Paul Downs, Jay Goltz, Liz Picarazzi, Sarah Segal, and Dana White. And you’ll participate in the taping of a podcast episode.
Plus: Tour Jay Goltz’s retail operation. Take an architectural cruise on the Chicago River. And make connections that will last a lifetime.
Where: Chicago.
When: May 17-19.
Fee: $2,750. (All meals, activities included. Travel, hotel not included.)
Sign up: Reply to this email with any questions or to reserve your spot.
Thanks for reading, everyone. — Loren
You'd think they would have done something about it by now. I'm pretty sure there's a lesson in there somewhere!