Paying Google, the Volcano God
In the latest 21 Hats Podcast episode, Paul Downs talks about what he does to try to keep Google happy.
Reminder: I recently posted my plan to turn 21 Hats into a sustainable business. You can READ MORE HERE. The upshot is I’m asking readers to sign up as either a Paid Subscriber or as a Founding Member.
Here are today’s highlights:
Funding for female founders is surging.
Is the Great Resignation really a conversation about mental health?
With Covid case loads falling, there are signs the labor situation is improving.
What’s at stake for small businesses in the Build Back Better act?
THE 21 HATS PODCAST
Paying the Volcano God: This week, Paul Downs tells Jay Goltz and Laura Zander why he’s come to view Google as the Volcano God. He’s not sure what it will take to keep the Volcano God happy, but he’s obsessed with doing everything he can, because the consequences of failing would be so great. We also talk about Paul’s content-marketing strategy, the pricing lessons that emerged from our recent attempt to monetize 21 Hats, and why Laura—even in the midst of the labor shortage—now has a waiting list of people hoping to work at her yarn manufacturer in Texas.
You can subscribe to The 21 Hats Podcast wherever you get podcasts.
Are we missing the point with the Great Resignation? “Perhaps what’s most notable about the name the Great Resignation is that its main substance—resignations—may be the least consequential thing about the moment that it’s come to represent. The real takeaway is why people are leaving their jobs in the first place—rampant stress, the shift to remote work, a forced reckoning with what matters in light of the pandemic—and what resigning is leading them to do next. Taken on its surface, the Great Resignation foregrounds the language of job status, but misses a parallel, arguably bigger story: the radical realignment of values that is fueling people to confront and remake their relationship to life at home, with their families, with their friends, and in their lives outside of labor.”
“‘In many ways, this is really a mental health conversation,’ [says the man who coined the phrase, Anthony] Klotz, acknowledging the limits of the terminology.”
“We are in the midst of massive change and it’s essential that we continue to understand and describe it, rather than grasping for a single, overloaded term.” READ MORE
Is now the time to hire externally or promote internally? I think you know the answer: “Every organization has had to take a careful look at its talent pool and wonder, ‘Who is my at-risk talent? How do we replace this group if their knowledge of operations and customers goes out the door?’ High-value employees know you are thinking this. They are impatient to receive their due. Especially at growth companies, they expect to see their careers flourish at the same pace as the organizations—or even faster.”
“Externally focused recruiting of new employees is not likely to overcome the tidal forces at work here, including more poaching by competitors and the removal of geographic constraints on candidates who are now able to work from home.”
“For new reasons, the revolutionary, old-school concept of employee retention is back.” READ MORE
Mailchimp employees are devastated over the bonuses they got after the business was sold to Intuit: “The co-founders netted upwards of $5 billion each from the deal—cementing their status as two of the richest people in the U.S.. But about 1,200 Mailchimp employees got nothing because they were never given equity, which is unusual for a startup. Mailchimp co-founder and CEO Ben Chestnut defended himself in part by pointing out employees would receive transaction bonuses when the deal closed. In an interview last month he said he could not yet share how much the bonuses would be but said, ‘When I think about it, I cry.’”
“Employees finally found out the size of their bonuses Thursday and said they were ‘devastated’ by how paltry the amounts were — some in the tens of thousands of dollars for longtime employees — Insider has learned.”
“Mailchimp appears to have used a specific formula based on an employee's time of service and salary, according to two employees familiar with the matter. For instance, someone making $100,000 a year who had been at Mailchimp for five years would get a $60,000 bonus.”
"‘The Mailchimp population is gutted by the news we got today,’ said the employee. ‘Ben and Dan cultivated an image that they actually cared about employees, and I just feel gaslit and like a fool for believing it.’” READ MORE
THE COVID ECONOMY
With caseloads falling and vaccination rates rising, the labor market is showing signs of a hiring boost: “New unemployment claims have fallen every week for a month straight — down to a pandemic low of 281,000 — after elevated figures through much of the pandemic. Business surveys, such as IHS Markit’s purchasing managers’ index, show that service sector employers — the largest portion of the economy, by far — are increasing workforce numbers at the quickest rate since June, when the country added nearly 1 million workers to the payrolls. And consumer confidence, the engine of the U.S. economy, reversed a months-long slide in October to mark high numbers, according to the Conference Board’s monthly survey.”
“Jerry Akers, the owner of 36 hair salons in Iowa and Nebraska, had 70 open positions for more than six months. The company shrank during the pandemic, but as he tried to staff back up amid the reopening in the spring and summer, Akers had trouble finding enough people to work as the delta variant spiked.”
“But something changed over the last month. The number of applicants online picked up. And suddenly Great Clips was able to hire 10 people after months of struggling to find workers, bringing the number of its openings down significantly for the first time all year.” READ MORE
Are offshoring and outsourcing over? “With the machinery of international trade slowed, business leaders are ditching, at least temporarily, overseas partners and the conventional wisdom of the global economy in favor of reliability, even if it costs more. Some are moving workers and production facilities closer to home and relocating plants closer to suppliers. Others are buying their suppliers or bringing former contract work in-house. ‘It’s about control. I want to have more control in an uncertain world,’ said Ellen Kullman, chief executive of 3-D printing company Carbon Inc. and the former CEO of DuPont.”
“‘They’re realizing, right now, they’re losing business because they’re kind of stuck with a very long, very efficient—but very inflexible—supply chain,’ Ms. Kullman said.”
“‘There are some people who are saying, Look, what I need is short term because this is never going to happen again,’ she said. ‘Then there are other people who are saying, ‘This is going to happen more often than we think.’ The world is a very different place, and it’s not just the pandemic. It’s natural disasters. It’s the floods down in the South. It’s tornadoes, it’s hurricanes.” READ MORE
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Funding for female founders has surged this year: “They have raised more venture capital dollars and have executed more exits at greater values than at any point in the last decade. Start-ups with a female founder raised more than $40 billion through September, almost double the amount invested in companies founded by women in all of 2020 or 2019. Much of the investment surge was concentrated in the tech, health care and retail industries.”
“Still, those investments represented a small slice of the overall market, amounting to roughly 18 percent of the $239 billion raised by all venture capital-backed companies through September.” READ MORE
A new generation of startups is promising delivery of staples in 10 minutes: “The pandemic helped push online grocery shopping into the mainstream, revolutionizing a swath of the $2 trillion-a-year global grocery market. Now, new players are banking on a business model derived from the one that propelled online food delivery world-wide. The new fast-delivery startups use small warehouses known as ‘dark stores’ staffed by fully employed personnel. Executives say that employing a dedicated staff to deliver their companies’ own inventory of products allows them to offer faster delivery times and a more consistent quality of service compared with existing delivery companies, which typically employ gig workers to ferry products sold by third parties.”
“The startups have positioned themselves to take advantage of what they say is an underserved market somewhere between a larger supermarket chain and the convenience store around the corner.”
“‘There is clearly demand for this service, and the pandemic has accelerated that demand,’ said Paul Martin, the U.K. head of consulting firm KPMG’s retail practice.“
“But most startups will fail to achieve profitability, Mr. Martin said, as their model for operating their own stores and owning product inventory, as well as employing store workers and delivery riders, makes them costly to run.” READ MORE
THE 21 HATS DASHBOARD
What’s at stake for small businesses in the Build Back Better act? Loren Feldman talks to John Arensmeyer, founder and CEO of Small Business Majority, an advocacy group for entrepreneurs about the seemingly endless negotiations in the Senate over what could be the Biden administration’s most important piece of legislation. What’s in the bill that would help business owners? What’s in the bill that would hurt? What’s not in the current version that should be? And will the sausage-making ever end?
You can find Dashboard in your 21 Hats Podcast feed.
If you see a story that business owners should know about, hit reply and send me the link. If you got something out of this email, you can click the heart symbol, you can click the comment icon below, and you can share it with a friend. Thanks for reading, everyone. — Loren