There’s a Target on the Back of Every Real Estate Brokerage
The fallout from this week’s class-action verdict over broker fees is still sinking in.
Here are today’s highlights:
A food reviewer on TikTok can make or break restaurants.
Just 35 years ago women had to have a male relative co-sign to get a business loan.
It might be worth trying to keep some of those retiring Baby Boomers around a little longer.
A startup has created a communications platform to deal with school shootings.
21 HATS LIVE: FORT WORTH
In yesterday’s announcement of our next in-person event, the registration link did not work for everyone. My apologies. Let me try that again:
This TikTok food reviewer has the power to alter dining culture: “When a food critic comes to a city that is proud of its dining scene, restaurants and their devotees take notice. But rarely does a traditional reviewer cause as much excitement as Atlanta has seen with the recent visit of Keith Lee, a food obsessive with a vast army of 14 million followers on TikTok. Mr. Lee, known for his ability to revive a small business with his legions of fans, was often frustrated with what he believed to be odd rules at different restaurants. ‘Butter’s a dollar? At a breakfast place?’ he asked in a video on his first day in Atlanta, eating takeout in his car. Mr. Lee, who is based in Las Vegas, mostly reviews independent, mom-and-pop restaurants, many of them Black-owned. He often orders takeout and has his family pick it up, so he does not receive star influencer treatment.”
“Mr. Lee has made videos from Detroit, Chicago, and Los Angeles, but the response in Atlanta has been notable. For many of his followers there, his critiques appear to have opened a valve for their long-held gripes with some of the city’s restaurants.”
“The grievances include surcharges for items like hot sauce or syrup and the lack of options for reservations or pickup orders. Some of the complaints involve rules that are common in many other cities: for example, a requirement that an entire party be present to be seated.”
“Some restaurateurs saw real results, for better or for worse, after Mr. Lee’s visits. One restaurant, after a glowing review, sold out for the first time in its history and had to extend its hours. At another restaurant where Mr. Lee had a frustrating experience, its inbox quickly filled with vitriol and threats.” READ MORE
The class-action verdict over Realtor fees is a threat to every real estate firm: “Nick Narodny, CEO of home-buying startup Aalto — which doesn’t use a traditional buyer-agent process — said all real estate brokers should assume they will be named in a future lawsuit and should prepare accordingly. ‘With this verdict, it now paints a target on the back of every brokerage in America. As such, brokerages should assume they will be named in a suit in the future and prepare. This means determining potential liability and ensuring you have legal counsel lined up and ready to go,’ Narodny said in an email.”
“Narodny stressed agents also will have to adapt to a changed world in which buyers likely will have to pay for their agent out of their own pocket. That means agents can no longer rely on the buyer commission as a source of revenue.”
“‘More power and fees will go to listing agents, so many top agents who are aware of this lawsuit are restructuring their business to be even more focused on getting and servicing listings,’ Narodny said. ‘I also expect to see many agents move brokerages in the coming months as the fallout from settlements, model changes and bankruptcies all come to fruition.’”
“Narodny said new models will emerge and consumers will have more transparency on what they are paying for. But having to pay agents out of their own pockets will mean buyers will need to cough up more money upfront when buying a home.” READ MORE
One in five SBA-backed small business loans now goes to a woman: “Loans to women-owned small businesses totaled $5.1 billion in fiscal-year 2023 and now represent one in five loans — or 21.3 percent — made to small businesses, a new report from the Small Business Administration shows. The rise in SBA lending to women-owned businesses reflects the leading role of women entrepreneurs in small business growth, noted SBA Administrator Isabel Guzman in a release timed to the 35th anniversary of the Women’s Business Ownership Act, which eliminated laws requiring women to have a male relative co-sign a business loan, paving the way for the SBA to lend directly to women entrepreneurs.”
“The legislation also established the National Women’s Business Council and provided seed funding for the SBA to launch Women’s Business Centers, which now are an integral component of the SBA’s resource partner network in helping women entrepreneurs access capital, training and counseling.”
“Access to capital has long been a challenge for women-owned firms, with a gender credit gap faced by women-owned small and medium-size businesses estimated at $1.5 trillion according to Goldman Sachs, CNBC reported.” READ MORE
You might want to keep some of those Boomers around: “To offset the negative impact of all baby Boomers retiring at the same time, you can appeal to their fiercely loyal character trait to try to retain them a bit longer as you work to transfer their knowledge to younger workers or document it for future reference. One strategy to convince older workers to stay longer is to offer part-time opportunities, job-sharing arrangements, and flexible schedules. These options allow Baby Boomers to reduce their hours while still contributing their expertise at times that suit them. Most importantly, ask these workers what they want and need to stay longer. Whether that be transportation benefits or financial planning assistance, this can further incentivize them to stay and can help companies lessen the cost of turnover.”
“Another option is flash mentoring, where the mentor meets with an individual in one or two sessions to focus on a targeted skill, such as writing or presentation skills, or building project plans. Regardless, mentoring is another important way to foster the future growth, longevity, and success of the overall business and its people.” READ MORE
The fight over return-to-office can turn into a disability issue: “Workers are filing more charges of disability discrimination to federal and state agencies, and an increasing share of the charges are based on mental-health conditions such as anxiety, depression, and post-traumatic stress disorder. Though agencies don’t disclose the events leading to the charges, the increase is driven partly by employers requiring that workers return to workplaces and denying some of their requests for exemptions, according to lawyers, government officials and disability advocates.”
“The number of charges filed to the Equal Employment Opportunity Commission alleging discrimination against individuals with anxiety, depression and post-traumatic stress disorder rose by at least 16 percent for each condition from 2021 to 2022.”
“Data from multiple state civil-rights agencies show that in recent years, disability charges—encompassing a range of conditions including mental-health disorders, hearing impairments and autoimmune diseases—have overtaken previous top complaints, such as retaliation and race discrimination.”
“The EEOC in September sued a Georgia employer for refusing to allow a digital marketing manager with anxiety and other mental-health disorders to work remotely three days a week. The company, a small chain of pediatrics offices, fired the employee soon after she requested the accommodation.” READ MORE
Halloween is over but Spirit Halloween lives on: “It’s open Wednesday for clearance sales. On Thursday, it’ll close. But its work is not yet done. In fact, it continues all year. The inventory carryover from season to season is ‘very minimal,’ a representative for Spirit Halloween said. But costumes that were not sold and remain in good condition are stored for the next spooky season. Merchandise is also available to purchase all year through Spirit Halloween’s website. As for the upward of 40,000 employees Spirit Halloween hired this season, a representative for Spirit Halloween said many are offered the ability to stay onboard with the company in a role at mall retailer Spencer’s Gifts, also owned by Spirit Halloween’s parent company, Spencer Spirit Holdings.”
“Spirit Halloween stores are known for ‘possessing’ abandoned storefronts for the Halloween season and vanishing without a trace after the spooky holiday, making it a popular online meme whenever something shuts down.”
“The retailer opened a record 1,506 stores this season, up more than 50 stores from 2022, Spirit Halloween told CNBC. Locations have more than doubled since 2009, the company added.”
“A representative from Spirit Halloween told CNBC that the operations team works year-round to secure locations, often committing to a storefront as early as the spring and as late as the first week of October.”
“Spirit Halloween considers locations in anywhere from strip centers to shopping malls, with square footage ranging between 5,000 and 50,000. ‘No store is too large or too small,’ the company told CNBC.” READ MORE
Magnolia bakery is taking a shot at cannabusiness: “Magnolia Bakery’s famous banana pudding is being whipped up in a new version that triggers elation in a different kind of way. The New York City-based dessert maker is transforming some of its famous treats into THC-infused edibles, including its banana pudding and red velvet cake. The limited-edition bars, which mark Magnolia’s first-ever cannabis product, ‘celebrate the brand’s most iconic, fan-favorite flavors in a new light,’ the bakery said. Both bars contain tetrahydrocannabinol, the part of the cannabis plant that produces a ‘high.’”
“Prices range from $18 to $30 depending on the flavor and the state. Beginning Wednesday, they will be sold in only three states — Illinois, Nevada and Massachusetts — at Rise Dispensaries. Magnolia worked with Green Thumb Industries, which produces Incredibles edibles, to make the branded bars.”
“For Magnolia, the new edibles could create more awareness of the brand that is perhaps most famous for its cameo on ‘Sex and the City’ and also generate some incremental revenue, according to Neil Saunders, retail analyst and managing director at GlobalData Retail.”
“However, the lack of federal legalization makes it tricky for national distribution and could limit other brands from experimenting with edibles. Saunders said that since edibles can only be sold at dispensaries, that could ‘act as a brake on sales.’” READ MORE
A seaside resort outside San Francisco offers founders a place to overcome loneliness and pain: “As the sun glinted on the water and a breeze off the wetlands shook needles loose from the pines overhead, Joe—founder and CEO of a fintech startup most recently valued at $45 million, who opted not to use his real name for this story because of the personal nature of what he was speaking about—recounted the day last year that his father died. He had been devastated, but didn't feel like he could take a day off. His company was in the middle of raising a funding round and he just couldn't let his team down. There was no time for grief in his busy schedule.”
“Joe knew next to nothing about the people he was confiding in, not how many exits they'd had, nor who their investors were. He didn't even know their last names. But he knew they were all founders and that they understood, and so he did something he hadn't allowed himself to do in a very long time: he cried.”
“This was day one of Leaders In Tech, a four-day, invite-only retreat for startup founders like Joe, designed to help them open up, process trauma, and learn to cope with the loneliness that comes with helming a prominent tech company.”
“The program is the brainchild of Carole Robin, an author and executive coach who for more than 20 years taught the Interpersonal Dynamics course at Stanford Business School.” READ MORE
A live-stream crisis platform called Prepared allows 911 callers to share videos, photos, and sounds with dispatchers and emergency responders during live-shooter events: “Like many members of Gen Z, Michael Chime, Dylan Gleicher and Neal Soni had something in common: They had all grown up within miles of major school shooting sites, like Chardon and Sandy Hook. What if, the twenty-somethings thought, there was a better way to save lives during these horrific events? ... They launched the platform in 2019, signing on customers like the New Haven Public Schools District in Connecticut (which includes 49 schools) and the Passaic Public Schools District in New Jersey. But when the hundreds of schools on the platform were no longer in session during Covid, the co-founders realized the need to better connect with those outside of the school, too, like 911 operators.”
“‘In the beginning we'd say, ‘Wouldn't anybody just call 911?’ says Chime of his talks with school employees. ‘They would say, Well no, there's all this data here that I can't verbalize,’ like pictures, videos, and other forms of media that would be more efficient and accurate to show than explain.”
“So in April 2022, they launched their second iteration of Prepared, transitioning their client base from school systems to 911 centers, sheriff's offices, and fire or police departments, which pay annually on a sliding scale depending on the number of dispatchers, users, call volume and community needs.” READ MORE
THE 21 HATS PODCAST
Sometimes, Dreams Do Come True: If you’ve been listening to this podcast, you know we spend a lot of time talking about all of the things that can go wrong for a business owner. And yes, in part because we started recording these conversations just a couple of months before the pandemic hit, we’ve had plenty to talk about. Even this year, with the worst of the pandemic behind us, we’ve been talking about everything from excess inventory to lost clients to layoffs to ineffective marketing to surviving the valley of death. So, with that in mind, this week, I’ve chosen to replay an episode both because it offers an inspirational message and because, well, we here at the home office need a little break. It’s the episode we recorded two years ago when Karen Clark Cole sold her business.
“Especially given that Karen had only recently been through a tough period that prompted her to take time away from the business, the conversation is a nice reminder that sometimes things do come together. It’s also full of great advice for anyone who thinks they may want to sell their business one day.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren