‘Pretend You’re a Chief Marketing Officer’

Artificial intelligence is already having an impact on the way people perform their jobs.

Good Morning!

Here are today’s highlights:            

• For some retailers, SEO remains a way of life.

• Ami Kassar suggests a few questions to ask yourself before trying to sell your business.

• The argument that 401(k)s are a failure keeps getting stronger.

• You can learn a lot about business (and life) when your parents own competing hardware stores.

ARTIFICIAL INTELLIGENCE

Here’s how AI is changing the way people work: “A doctor looks her patients in the eye. A lawyer is able to take on more cases. A marketer dispenses with focus groups. Artificial intelligence hasn’t been the job killer that some predicted, at least not so far. Census data released in March showed that 2.6 percent of employers reported cutting jobs between July and February in response to the introduction of generative AI—and 2.8 percent reported adding jobs because of it. But in subtle and not-so-subtle ways, generative AI is already changing how some people work.”

• “Now around 450 doctors at Mass General Brigham—almost 10 percent of the Massachusetts system’s attending physicians—are experimenting with generative-AI programs that listen in on patient visits and update medical records. The programs typically generate notes in minutes, so [Amy] Wheeler, a 53-year-old primary-care doctor at a clinic in Revere, Mass., can review them when the visit is still fresh in her head.”

• “Isaac Sommers, an associate in the law firm Ropes & Gray’s litigation and enforcement practice group since 2022, says he does his day-to-day legal research more efficiently because he uses generative AI as one of his tools. The technology also helps him uncover more useful search results when trying, for example, to find cases with a specific outcome.”

• “[Dan] Bettinger, who took a four-day online course on AI last July to learn more about the technology and how he could apply it to his career, gives the model he uses instructions like ‘pretend you’re a chief marketing officer’ or ‘pretend you’re an expert copywriter’ to help draft materials faster. He also uses AI to help develop scripts for video presentations, to analyze competitive websites for SEO purposes and to summarize data and research.”

• “Another way he uses AI is to ‘pressure test’ copy he has written. He instructs the model to ‘pretend you’re a skeptic and you’re presented with this stuff. What would you not like about it? And then how would you fix it?’ This helps him get additional ideas and see things he might have missed, he says. ‘AI can help find my blind spots,’ Bettinger says.” READ MORE

This company is using AI to answer its emails: “On an average business day, shipping logistics company C.H. Robinson receives more than 11,000 emails just for requesting pricing on truckload freight, and it requires a lot of time and manpower to answer. Most are customer or carrier requests for pricing on truckload freight, and that's where artificial intelligence comes into play. Using generative AI, [Minnesota]-based C.H. Robinson's technology classifies and reads incoming emails, then takes steps to fulfill the customer's request. The company's AI technology is now answering 2,000 customer-quote emails daily, according to a company release.”

• “‘After automating so many other types of customer transactions, you could call email the last mile,’ said Arun Rajan, chief operating officer of C.H. Robinson, in a statement. ‘We’d been exploring how to automate email requests for a couple of years through natural language processing and machine learning, but it would’ve been insanely hard and expensive.’”

• “Then generative AI arrived. Before that, customers had to wait for a person to pass along a quote from the company's dynamic pricing engine, Mark Albrecht, vice president for artificial intelligence at C.H. Robinson, said in the news release. ‘Now, our new technology reads the email and supplies the quote in an average two minutes 13 seconds,’ Albrecht said in a statement. ‘C.H. Robinson is doing this at scale, leaving our people more time to help those same customers with more complex requests.’” READ MORE

MARKETING

For Lady Black Tie, a prom-dress store and ecommerce business in Massachusetts, SEO remains a way of life: “Marissa Tilley, owner and founder, said she learned how to optimize her store’s search results not through a class or formal training — but because of Reddit. When she first opened the store in 2018, she didn’t have many customers sometimes, giving her time to master SEO through research. She wrote words on her website, then Googled terms she guessed shoppers would search for like the names of certain designers whose dresses she carries, and then tweaked the wording to try to improve her placement on the results page. Tilley said she also added more details about the dresses to Lady Black Tie’s site through YouTube videos, photos, and descriptions, to rank above other websites and increase the store’s authoritativeness from Google’s perspective.”

• “‘It’s kind of like one of those things where you plant a lot of seeds and you might not see the growth for a little while but eventually you’re getting a lot of fruits in a couple of years,’ said Tilley. ‘SEO takes time.’”

• “And it’s paid off for the store, which she said sold more than 45,000 dresses in 2023, compared to under 6,000 in 2019. And it’s on track to sell the same number in 2024 as last year, according to Tilley. The store’s floor-length gowns range in price from roughly $69 to $879.”

• “Lady Black Tie also has a strong social media presence. The store’s TikTok account has amassed nearly 318,000 followers and its Instagram account has drawn more than 153,000. In its most viral TikTok video, which has more than 8 million views, the store shows off a girl described as a ‘tomboy’ transforming from wearing an everyday outfit to a royal blue, flowy prom dress ‘to slay prom.’”

• “Tilley said the key to the store’s marketing success is diversifying across platforms. She’s branched out her marketing efforts to Pinterest and YouTube Shorts in efforts to increase the store’s reach. ‘You just have to follow the market,’ she said.” READ MORE

SELLING THE BUSINESS

Ami Kassar writes about how to approach the sale of a business: “Selling a business is like working your way through a maze. In most cases, the process is complex, with many twists and turns and some false starts. It helps if you can prepare yourself and put the right support team around you. Start by taking a cold shower. You will need the wake-up jolt and clarity on what you are trying to accomplish. Many entrepreneurs receive cold calls or emails from search funds or private equity firms looking to buy their businesses. I strongly advise against rushing down this path. If you do, the potential buyers have you exactly where they want you—in a non-competitive situation and feeling like they are in control. Selling should be a competitive process. The process will take time, and the devil is in the details.”

• “There are three key questions to ask: Who is your likely buyer? Does the expected valuation make sense for you? And how do you create the right support team to help you?”

• “If you want to sell your house and Zillow tells you it’s worth $1 million, it’s probably worth between $900,000 and $1.1 million. But you can be pretty confident it’s not worth $10 million. The same principle applies to selling a business.” READ MORE

TAXES

Keeping the Trump tax cuts would cost $4.6 trillion: “The cost of extending the 2017 tax cuts for households, small businesses, and the estates of wealthy individuals enacted under President Donald Trump has expanded to $4.6 trillion, according to new estimates from Congress’s fiscal scorekeeper. That puts a massive price tag on what is likely to be a top issue in Washington next year as lawmakers grapple with the future of Trump’s tax cuts, which are slated to expire at the end of 2025. Congress will also confront the deficit impact of renewing the cuts, as the U.S. faces a ‘daunting’ fiscal outlook, Congressional Budget Office Director Phillip Swagel said in an interview at Bloomberg News’s Washington bureau on Wednesday. Extending the personal income tax cuts will cost $3.8 trillion alone. Other tax cuts set to expire in 2025 include restrictions on the estate tax and valuable write-offs for small business owners.”

• “The Congressional Budget Office’s estimate, released Wednesday, is more than double the $1.9 trillion cost of the original Trump tax cuts — a more expansive bill which also included permanent reductions in corporate taxes.”

• “Swagel also addressed the economic effects of immigration, pointing to CBO research that found the influx of foreign workers is expected to boost GDP by about $7 trillion over the next decade by swelling the labor force and increasing demand.” READ MORE

HUMAN RESOURCES

Are 401(k)s a failed experiment in do-it-yourself pensions? “Pensions still exist but mainly for unionized jobs. In the private sector, they have largely been replaced by 401(k)s, which came along in the early 1980s. Generally, contributions to 401(k)s are pre-tax dollars — you pay income tax when you withdraw the money — and these savings vehicles have been a bonanza for a lot of Americans. Not all companies offer 401(k)s, however, and millions of private-sector employees lack access to workplace retirement plans. Availability is just one problem; contributing is another. Many people who have 401(k)s put little if any money into their accounts.”

• “The savings shortfall is no surprise to Teresa Ghilarducci, an economist at the New School in New York. She has long predicted that the shift to 401(k)s would leave vast numbers of Americans without enough money to retire on, reducing many of them to poverty or forcing them to continue working into their late 60s and beyond.”

• “That so many people still do not have 401(k)s or find themselves, like Jen Forbus, in such tenuous circumstances when they do, is proof that what she refers to as this ‘40-year experiment with do-it-yourself pensions’ has been ‘an utter failure.’”

• “In 2008, Ghilarducci proposed replacing 401(k)s with ‘guaranteed retirement accounts,’ a program that would combine mandatory individual and employer contributions with tax credits and that would guarantee at least a 3 percent annual return, adjusted for inflation. Her plan drew the wrath of voices on the right — the conservative pundit James Pethokoukis called her ‘the most dangerous woman in America.’” READ MORE

THE ECONOMY

California winemakers are in trouble: “Megan Bell felt certain that her winery was going bankrupt. When she released a new batch of wines in August, only three of her 19 distributors agreed to buy any. She was running $65,000 over budget on opening a tasting room in Santa Cruz. And she owed $80,000 to grape growers. Sales in the second half of the year were the worst Bell had seen since starting her small business, Margins, eight years ago. ‘2023 was a disaster,’ she said. And she knows she wasn’t the only winemaker feeling it: ‘If anybody’s not telling you that, they’re lying.’”

• “The entire $55 billion California wine industry is, like the wine industry worldwide, experiencing an unprecedented downturn right now. No sector is immune — not the luxury tier, not the big conglomerates, not the upstart natural wines. Wine consumption fell 8.7 percent in 2023, according to leading industry analyst the Gomberg Fredrikson Report, a sobering reversal for an industry that had, for a quarter-century, taken annual growth for granted.”

• “This year could be the breaking point, with many industry figures predicting ‘a good-sized house cleaning,’ as put by Ian Brand, owner of I. Brand & Family Winery in Monterey County.” READ MORE 

PROFILE

Her mom and dad owned competing hardware stores: “People are usually puzzled when I tell them that my parents owned side-by-side hardware stores (and that they were married). But even though they sold some of the same merchandise, the stores were markedly different. My dad’s place was geared toward agriculture, oil-field production, and light industry. My mom’s store mainly served homeowners and hobbyists. The two stores were separated by a parking lot, and on any given day I would run back and forth between them, helping out where I was needed. I look back now, and I can see that those trips across the parking lot weren’t just from one store to another. That parking lot divided two completely different worlds, with my mom and dad acting as sole sovereigns. They were a window into two different ways of doing business, of relating to people, of approaching life.”

• “Not only were the businesses different, my parents’ business philosophies were different. For one thing, my mom charged higher prices, even when the same thing could be purchased for less money from my dad. She didn’t accept credit cards, and only certain customers were allowed to open a charge account. She employed two part-time clerks—both were retirees—and paid them mediocre wages.”

• “Across the parking lot, my dad employed 10 or so full-time workers and subsidized their health insurance. Pretty much any customer could open a charge account, and when someone couldn’t pay the bill, dad would let it slide a month or so. If the customer still couldn’t pay, dad might wipe out the debt in a random trade, taking everything from freezer-ready cuts of beef to a rusty old fire hydrant (which he gifted to our dog). He wasn’t afraid to borrow money and sometimes struggled to pay his suppliers.”

• “In hindsight, I learned a lot about the value of treating people fairly, and working hard, from my parents, and especially my mom. She was so worried when Kmart came to town. Mom couldn’t compete against big-box prices, but she could with customer service. Ergo the one-on-one service, free gift wrapping, bridal registries, home delivery. It also meant opening the store in the middle of the night if someone’s pipes broke and they needed pipe fittings and a wet vac.”

• “I also knew that my mother—whose approach to business was both more conservative and more financially savvy—worried about my father’s finances more than my dad worried about his finances. At some point in her 50s, mom took out a $100,000 life-insurance policy and told my dad to pay off the mortgage on his building after she died, which he did.” READ MORE

THE 21 HATS PODCAST

I Don’t Hate Regulation, But …This week, in episode 194, Shawn Busse, Jay Goltz, and Jaci Russo talk about the new rules that may—or may not—ban non-compete clauses, increase the number of employees who must be paid overtime, and eliminate TikTok in the U.S. How much would those changes matter to each of their businesses? What might the owners do differently? Do the changes make sense? And why does it so often seem as if it’s small businesses that get caught in the cross-fire when the government tries to rein in abusive big businesses? On the question of non-competes, Shawn says he thinks they are often used by lazy businesses that haven’t done the real work of building loyalty with employees and customers.

• Plus: Do Shawn, Jay, and Jaci ever regret starting a business? Have there been times when they’ve thought about packing it in and trying something else? And also, are the terms “business owner” and “entrepreneur” interchangeable? Or do they carry different connotations? Might there be a better term? Jay thinks there is.

• You can subscribe to the 21 Hats Podcast wherever you get podcasts.

Thanks for reading, everyone. — Loren