The Circle of Entrepreneurial Life
Every day, Fred Bush gets a call from a restaurateur whose dream has failed. Most often, the used equipment Bush buys ends up helping someone else get started.
Good Morning!
Here are today’s highlights:
In today’s Dashboard podcast, Gene Marks explains the CrowdStrike outage and offers some advice on preparing a disaster-recovery plan.
A SHRM study finds what many might have guessed: managing people can affect your mental health.
The percentage of employees who don’t use up their PTO keeps growing.
When 100-year storms come twice a year, businesses have to adjust.
OPPORTUNITY
The tough times for California restaurants are bad news for many, but not for Fred Bush: “That’s because he deals in used equipment and furniture, buying stoves, sinks, shelves and the like from owners who’ve thrown in the towel. His Corona-based Fred Bush & Associates meticulously restores the items and sells them at steep discounts from the original retail prices. ... These days, the drought settling over the restaurant landscape is, in a way, a boon for Bush: His 26,000-square-foot showroom brims with merchandise ‘We literally get a call a day from a restaurant that is closing,’ said Bush, 76, explaining that he’s running out of space at his warehouse.”
“Bush said that when he meets with proprietors, they often are in a good mood, pleased their ordeal is nearing its end. And he takes pleasure in that part of the job. But [one] Inland Empire pizzaiolo hadn’t seemed at ease. Still, Bush was adamant the man would soon find peace. Bush ultimately offered $4,500 for the bulk of his equipment, about 30 items in all. He estimated the wares had cost the owner at least $75,000. Once they were restored, Bush would list them at prices totaling about $15,000.”
“‘It’s a tough business because you’re catching people at their lowest — but you’re in it to make money,’ said Kevin Lanouette of KL Kitchen Supplies, a Canyon Lake, Calif.-based supplier of new restaurant equipment. ‘[Bush’s] bedside manner has got to be good. It’s not something I would look forward to.’”
“Lanouette, whose clients have included Republique and the Hotel Bel-Air, said that when projects he’s working on call for used equipment, he sources it from Bush. And in today’s economy, when expediency is key, refurbished wares often fit the bill.”
“Times being what they are ... it’s all about getting the doors open and putting money back into [a restaurateur’s] pocket,’ Lanouette said. Bush’s merchandise is ‘very helpful to a lot of my clients who don’t have deep pockets but have a dream.’” READ MORE
THE 21 HATS PODCAST: DASHBOARD
What We Can Learn from CrowdStrike: This week, Gene Marks explains the global tech outage: what actually happened, how seriously we should take it, and what business owners should do (but probably won’t) before the next outage. Those lessons include: 1) Keep some paper handy. 2) Understand that the internet is going to go down from time to time. 3) Have a disaster-recovery plan. 4) And if you don’t have a disaster-recovery plan, start with ChatGPT.
Gene also discusses the upheaval in the real estate industry and why the CEO of an HR platform, Lattice, wound up on a subreddit called LinkedIn Lunatics.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
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MARKETING
As Google reverses its position on cookies, the digital ad industry prepares for battle: “Snippets of code that have fueled the lucrative digital-advertising economy for decades might disappear anyway. Instead of killing cookies itself, Google will leave that up to the consumer. And if history is any lesson, people might just do it. Google plans to introduce a prompt asking users to opt in or out of cookies in Chrome, according to U.K. regulators overseeing the process. The strategy shift followed a four-year effort to sunset and replace the tracking technology, a process mired in delays and pushback by the ad industry.”
“Online publishers and ad-tech companies are hungry for details about how Google’s user-choice prompt will work. The precise wording and timing will drastically affect how many users opt in and how much data the industry gets.”
“Google’s Chrome is the most popular web browser in the world and the only major one that still supports cookies. That makes it essential to the global digital-ad industry, which is expected to bring in $677 billion in annual spending this year, according to Insider Intelligence. ‘An opt-out mechanism paired with a foreboding prompt could eliminate cookies through the guise of consumer choice,’ said mobile-marketing analyst and venture capitalist Eric Seufert.”
“Other approaches have resulted in different outcomes. When California in 2020 required websites to let consumers opt out of having their data sold, many publishers simply placed a link saying ‘Do Not Sell or Share My Personal Information’ at the bottom of their home page. Fewer than 1 percent of site visitors clicked it, according to large publishers.” READ MORE
STARTUPS
As venture capital dries up, would-be founders are returning to corporate life: “Upwards of 3,200 venture-backed startups went out of business last year, a number expected to be even higher this year as venture-capital fundraising tumbles to its lowest level in nearly a decade, according to PitchBook data. That has early-stage startup founders who founded companies during the free-flowing boom cycle that ended in 2022 rethinking whether they want to be founders after all.”
“‘The idea of being a founder is sexier before you've been a founder,’ said Ishita Arora, the founder and CEO of Dayslice, a scheduling tool for services business that raised $6 million in funding. In December, seeing the company wasn't achieving the hockey-stick-like growth VC investors demand, she closed Dayslice and gave back the remaining cash to investors.”
"‘I have a lot of founder friends, and almost all of them are miserable and fantasize about what it would be like to be an employee,’ added Arora, who earlier this year joined Instrumentl, a platform for nonprofits, as one of more than 50 employees. ‘In terms of sleep quality and enjoying my weekends, it's definitely easier to be an employee.’” READ MORE
MANAGEMENT
Not everyone wants to manage people: “So many of us stumble into being the boss, or raise our hands because it feels like the only way to get ahead. We’re attracted to the cachet of the title, the promise of more money or the comfort of having a ladder to ascend. Then come the performance reviews to write, the team drama to adjudicate, the meetings to attend. The job keeps getting harder. Managers oversee nearly three times as many people today as they did in 2017, according to data from research and advisory firm Gartner. Nearly one in five managers says that, given a choice, they’d prefer not to oversee people. ‘That’s what we call buyer’s remorse,’ says Swagatam Basu, a senior director in Gartner’s human-resources practice.”
“A 2024 survey from SHRM, a lobby for human-resources professionals, found that 40 percent of respondents said their mental health declined when they took on a managerial or leadership role.”
“At Launch Potato, a digital-media company based in Delray Beach, Fla., the individual-contributor track tops out several levels below the executive level. Even on the lower rungs, managers have the opportunity to make higher salaries and bonuses than commensurate individual contributors, says Kristopher Osborne, the company’s senior vice president of talent.”
“‘You are getting paid a premium to deal with a lot more issues and challenges,’ he says of managers. ‘People have to be realistic.’” READ MORE
HUMAN RESOURCES
The percentage of American workers who aren’t taking all of their paid time off continues to grow: “A new survey from fintech solutions company Sorbet found 62 percent of Americans didn't use all of their PTO in 2023, up from 57 percent the year prior. It also found 5.5 percent of American workers did not take any PTO in 2023. The report, which surveyed 1,500 employees, sheds light on an ongoing PTO crisis in America. The rise in unused PTO brings about a challenge for employees and employers. Given how most companies structure PTO benefits, employees who don’t use their time off are accumulating an asset they typically can’t access unless they leave their current employer.”
“From the employers’ perspective, the report notes, PTO is one of the most expensive, unused and underappreciated employee benefits, with the lowest perceived return on investment. At the same time, employees are growing increasingly frustrated and disgruntled by financial pressure and burnout.”
“Further examining the data, younger and remote workers don’t appear to take as many vacation days as their counterparts. A third of American workers (32 percent) said in the survey it’s difficult to take time off when working from home. And, according to the report, Gen Z employees are 15 percent more likely to say it’s difficult to take time off. Employees between the ages of 21 and 34 take about one week less vacation time than employees older than 55.”
“Women take 10 percent less PTO than men and are overall more comfortable taking sick days than vacation days. By industry, employees in finance take the most advantage of their time off, using 78 percent of their allocated time. On average, employees use 67 percent of their PTO allocation.” READ MORE
MANUFACTURING
Some big manufacturers are cutting back: “Higher interest rates, rising operating costs, a strengthening U.S. dollar and lower selling prices for commodities are dampening activity at factories across the country. Executives for the makers of long-lasting items such as cars, crop-harvesting combines and washing machines are projecting challenging business conditions for the remainder of the year. Deere & Co., the world’s largest manufacturer of farm equipment by sales, has shed about 2,100 production workers since November, or 15 percent of its hourly workforce. Rival equipment maker Agco said in June it would cut 6 percent of its salaried workforce worldwide, or about 800 people, by the end of the year.”
“The cloudy picture in manufacturing comes as dozens of companies in the S&P 500 index make quarterly financial disclosures. Their results will be closely monitored as inflation moderates and the Federal Reserve considers cutting interest rates.”
“The deceleration follows years of robust growth in sales and profits that started during the depths of the Covid-19 pandemic. Homebound consumers unable to spend money on restaurants, concerts and vacations opened their wallets for new dishwashers, pickup trucks and home-remodeling.”
“Government spending programs to support big new plants for making semiconductors, electric-vehicle batteries and power-generating infrastructure are offsetting some of the industry weakness.” READ MORE
BUSINESS MODELS
Sober bars are becoming a thing: “Every Friday, when Chris Marshall opens his bar, he gets the same customer request: Alcohol, please. And every time someone asks for a vodka tonic or another familiar well drink, he has to gently remind them that his bar, Sans Bar, serves no alcohol. ‘I can definitely help you with the tonic, not so much the vodka,’ he said. ... At Sans Bar in Austin, Texas, the cocktails aren’t the star. The customers are. ‘We make it about the experience and connection, not the drinks,’ he said. ‘I mean, the drinks are amazing. But so much of what it means to be a bar is to be a place where people meet.’”
“Marshall is a member of a small class of sober bar owners who want to upend the idea that bars are exclusively places where alcohol is served. He and other sober bar impresarios believe bars should be community hubs where you can have fun without imbibing anything alcoholic.”
“And as the non-alcoholic beverage market steadily grows, so have sober bars. They operate in New York and Los Angeles, in Orlando and Sacramento, Atlanta and Omaha. And they’re steadily growing their base of customers, including those who still drink but are exploring sobriety and people in recovery from substance use, by redefining what a bar can be.” READ MORE
SUSTAINABILITY
As the climate changes, businesses look for ways to cope: “Major utilities are relocating substations to escape rising waters and wildfires. Manufacturers are establishing redundant production lines to guard against storms that could idle their plants. And a top investment bank is stress-testing portfolios to see if they would survive a warming climate’s wrath. The moves illustrate how companies are changing the way they do business to cope with increasingly frequent episodes of extreme weather, such as the heat wave that broiled much of the United States this month. The global average temperature on Monday made it the hottest day on record, breaking a planetary mark established just one day earlier, according to Copernicus Climate Change Service, the European Union’s climate monitor.”
“In Houston, a company called UPG, which makes precisely formed plastic parts, lost almost two weeks of production after powerful storms knocked out power three times in the past four months. For the company’s owners, the serial outages were the latest evidence that business as usual was no longer an option.”
“‘It’s getting to the point where the impacts are making us miss our forecasts. It’s hurting us financially and it’s affecting our customers,’ said Scott Bekemeyer, co-chairman of the Partner Companies, a consortium that owns UPG and nine other manufacturers.”
“With factories in several states, China, and Wales, TPC’s financial performance is exposed to a variety of weather risks. Last winter, a heavy snow collapsed the roof of one of its buildings in Bozeman, Mont. ‘People would talk about the 100-year storm,’ Brumlik said. ‘Now, the 100-year storm is happening twice a year. It needs to be part of our normal operational plan.’” READ MORE
THE 21 HATS PODCAST
When They’re Not Quite Bad Enough to Fire: This week, Paul Downs, Liz Picarazzi, and Jaci Russo discuss how they review employees and how they make the hard calls when someone is right on the cusp. The conversation starts with a couple of tricky situations that Paul is trying to think through and then progresses through several other issues: Do you use personality tests to avoid or resolve personality conflicts? Paul, Liz, and Jaci have very different takes on Myers-Briggs and the like. Do you make sure no one is ever surprised by a negative review? Do you keep mediocre performers even when you find someone who might be better? “I need to go shut the door before I say this,” Paul tells us.
Plus: Jaci finds a use for ChatGPT. Liz may have found an alternative manufacturer in an unexpected country. And a business owner asks whether he should report a competing company that is endangering its customers and employees. Should the owner report them even though he believes he could face retaliation?
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren