The Great Hesitation
As the uncertainty mounts, businesses are delaying and canceling investments and hiring because they cannot predict the rules under which those decisions will play out.
Good morning!
Here are today’s highlights:
In our latest podcast episode, William Vanderbloemen explains why HubSpot was so important to his search firm’s growth—and why that’s no longer the case.
There’s a reason why, even when oil prices fall, gas prices can be slow to follow.
It’s not all that hard to spot a technician who works for a PE-backed home-services business.
Not surprisingly, the tariff-refund portal got off to a buggy start.
POLICY
This period of time may come to be known as The Great Hesitation: “Let’s start with what millions of businesses face today. Mr. Trump’s war on Iran has caused oil prices to soar and injected volatility into global markets. His administration imposed steep tariffs on nearly all of America’s trading partners a year ago, only to shift or reschedule duties depending on, among other things, how the trading partners have reacted (like Mexico and Japan); lobbying; stock market reaction; and court decisions, with the Supreme Court ruling his sweeping tariff plan illegal. Regulatory agencies have abruptly stopped pursuing cases or significantly altered their priorities. The twists and turns surrounding the appointment of the next chair of the Federal Reserve and the performance of its current leadership deserve their own reality show.”
“The Baker, Bloom, and Davis Economic Policy Uncertainty Index, a widely watched measure of policy-related uncertainty, has surged to levels typically seen during situations like the 2008 financial crisis and the early months of the Covid-19 pandemic. A growing number of economists and executives describe this as a period of heightened hesitation, when businesses are delaying and canceling investments and hiring because they cannot predict the rules under which those decisions will play out.”
“Look at the auto industry’s production of electric vehicles. Rules on electric-vehicle incentives, import tariffs, and domestic production requirements have shifted so often that manufacturers have posted billions in losses and are left guessing where to build, what to produce, and which technologies will be favored. Businesses are no longer just adapting to new rules. They are trying to guess which ones will survive.”
“There are already signs that Mr. Trump’s overreaching is seeding a backlash from the left that may further feed the cycle. Proposals such as wealth taxes and expanded corporate regulation are gaining traction, suggesting that Mr. Trump’s policies may be replaced by a different set of sweeping interventions. The risk is not a single shift, but repeated swings in different directions.”
“This is how political dysfunction is seeping into American capitalism: not through one sweeping reform, but through a steady erosion of stability. And that erosion hits hardest where the economy is most dynamic: among the smaller and midsize businesses that drive job creation and innovation.” READ MORE
THE 21 HATS PODCAST
Do Small Businesses Still Need HubSpot? Early on, William Vanderbloemen’s search firm was exactly the kind of business HubSpot, the marketing platform, was built to help. William had a highly specialized audience, his team produced content that his audience needed, and HubSpot helped make sure the right people found it. Back then, he tells Kate Morgan and Jaci Russo, HubSpot’s promise was that it could help a David compete with a Goliath, and that’s what it did for Vanderbloemen Search. But that was almost 20 years ago, long before AI began reshaping how people discover information.
Now, William contends, the rules are changing. If you create strong content for a specific audience, large language models can do more and more of the work of connecting that content to the people looking for it. Which raises a question: If that’s where marketing is headed, do small businesses still need a sophisticated platform like HubSpot? In this week’s episode, William shares his doubts.
Along the way, the three owners also discuss why Kate changed her mind about selling her business, whether companies really need to pay attention to their Glassdoor reviews, and what a plumber should tell an SEO agency that wants a monthly retainer of $12,500.
You can subscribe to the 21 Hats Podcast—brought to you by Grasshopper Bank—wherever you get podcasts.
