We’re All in the Dark

In our latest 21 Hats Podcast episode, the owners talk about the never-ending struggle to master digital marketing.

Good morning! 

Here are today’s highlights: Car dealers are selling cars for thousands more than the sticker price. Americans are driving the global recovery. And would your employees come back to the office for a speakeasy?

THE 21 HATS PODCAST

Episode 66: The Constant Struggle of Digital Marketing: This week, we take another crack at some questions that don’t have definitive answers: Should business owners outsource their marketing or bring it in house? Either way, how do you know you’re picking the right agency or the right person? Is it possible to get someone great for what smaller businesses can afford to pay? Paul Downs tells us what happened when he hired a firm to audit his website. Dana White tells us why she dumped the agency she’d retained for $50,000. And Jay Goltz sums it up: When it comes to the mechanics of marketing, he says, “We’re all in the dark.” Plus: Dana gives a franchising update and Jay starts his own business group.

PRICING

Car dealers are selling vehicles for thousands more than the sticker price: “Auto makers typically set what is known as the manufacturer’s suggested retail price, or MSRP, a figure that appears on the window sticker of a new model. But with inventory tight and customers clamoring for cars and trucks, auto dealers are charging more, increasing the price above sticker and in some cases requiring customers buy certain add-ons, such as protective coatings and accessories, as part of the increase. Some buyers say they have encountered dealerships asking for thousands of dollars above MSRP. And analysts and dealers say the practice is becoming more widespread and occurring on a wider range of vehicles, including more mainstream models that typically wouldn’t be targeted for such price increases.”

  • “In mid-June, about three-quarters of all vehicles sold in the U.S. went for the sticker price or above, according to research firm J.D. Power. That is up from ... around 36 percent before the pandemic ...”

  • “Some dealers say they avoid asking for more than the sticker price because it can be a turnoff for buyers and hurt existing customer relationships. ‘It’s a short-term benefit for a long-term detriment,’ said Earl Stewart, a Toyota dealer in Florida. ‘You might sell them one car today, but you won’t ever sell them another car,’ he said.” READ MORE

THE ECONOMY

American consumers are driving the global recovery: “A gusher of money is spilling out from the U.S. economy and rippling around the world, driving the global recovery to an extent it hasn’t in decades and giving confidence to businesses to invest in meeting the huge American demand. The U.S. economy, turbocharged by stimulus worth almost $6 trillion and hungry for the world’s goods, is playing the role China played in the aftermath of the 2008 financial crisis, economists say. While other countries largely welcome a burst of demand from the world’s largest economy, the force of America’s expansion is ricocheting through financial markets and causing dislocations around the world such as shipping bottlenecks in East Asia, effects on currencies and booming commodity prices.”

  • “German engineering companies are seeing a surge in demand for equipment to furnish Asian factories that export to the U.S. Taiwan Semiconductor Manufacturing has announced large-scale investment plans to raise production of chips, in large part destined for the U.S. Farmers in countries such as Brazil are ordering machinery to help supply the growing U.S. market with products such as oils.”

  • “The huge U.S. import demand contrasts with the aftermath of the 2008 financial crisis, when many households instead focused on paying down debt.” READ MORE

REOPENING

As New York City reopens, landlords are trying hard to keep tenants with expiring leases: “Most workers haven’t yet returned — and it’s unclear if they all will. That uncertainty is terrifying the city’s biggest office landlords, and many of them are going to great lengths to retain and attract tenants. Lower rents or free months in multiyear leases are now de rigueur. But landlords are also trying to entice new and returning tenants with sweeping redesigns and new technology that can quickly refashion office space based on needs. They are dangling upscale new clubs and food halls available largely for tenants, hoping to draw back employees starved for workplace socializing while also pursuing new business opportunities.”

  • “In one building on West 26th Street near the Hudson River, the owners — the private equity firm Blackstone and the building owner and developer RXR Realty — are showing off a 600-square-foot speakeasy tucked away in a corner of the ground floor.”

  • “Analysts say a big drop in demand for office space could drag down office rents even after New York’s economy recovers.”

  • “‘This is a slow-moving train wreck,’ said Daniel Alpert, managing partner of Westwood Capital, a small financial firm. ‘People are dumping space on the market, and it’s all quality space.’” READ MORE

HUMAN RESOURCES

American workers are feeling more burned out than ever: “In an Insider survey of 1,000 employed Americans across the country, 72 percent of respondents who are returning to an office after working remotely said they're feeling burned out. That's compared to 60 percent of those who have been going into the office consistently and 65 percent of those who are working in a hybrid setup. The World Health Organization defines burnout as ‘workplace stress that has not been successfully managed.’ Its three components, according to the WHO, are exhaustion, cynicism, and diminished performance. Reports of burnout across industries like finance, consulting, and tech have increased rapidly.”

  • “Compassion aside, burned-out employees are typically less productive and less creative, which could hurt the business's bottom line.”

  • “But Cadigan rarely tells anyone what to do. ‘The best practice is experimentation,’ he said. Employers should ‘be intentional about asking employees what's working,’ especially in terms of flexibility.” READ MORE

Tech workers are fleeing the coasts: “A new LinkedIn study analyzed its members' locations to reveal which metropolitan areas lured the most tech talent between 2019 and 2021 in proportion to population size. All the top spots are smaller cities in the middle of the country, which offers even more proof that people with jobs and skills in IT, engineering, and programming are moving away from coastal hubs like New York and San Francisco. The rise of remote work and the desire to secure more space for less money drove interest in Midwestern, Southern, and Western locales once dismissed as second tier.”

  • “‘Look at the bottom of the list, and you'll see New York City,’ Brian Xu, a senior data scientist at LinkedIn who worked on the report, told Insider. ‘A consistent trend we've seen with our migration data is that people are moving out of big, expensive cities during the pandemic to some of these midsize cities with affordability and bigger houses.’” READ MORE

THE ECONOMY

Kickstarter is trying a four-day workweek: “The Brooklyn-based crowdfunding platform announced last week that starting in 2022, it will become the first company to join a set of pilot programs called 4 Day Week U.S. The programs, launched in part by Kickstarter executive Jon Leland, are a spinoff from 4 Day Week Global, a not-for-profit that promotes a shortened work schedule. On Monday, 4 Day Week U.S. circulated an employee petition to help identify companies to target, and encouraged employers to join the program.”

  • “For business owners, this could be the perfect time to experiment. ‘Remote workers are now coming back, and they're used to some flexibility,’ says Chris Mullen, executive director at Boston-based think tank the Workforce Institute.”

  • “Mullen advises most employers to try it, provided they first gauge employees' interest and engage in significant dialogue about how to do it effectively.’”

  • “When Microsoft Japan tested the four-day week in 2019, productivity spiked by 40 percent and 92 percent of employees said they liked the schedule.” READ MORE

CONSTRUCTION

Small contractors say they are missing out on the housing boom: “Construction USA LLC, a small contracting company in Detroit, typically works on 10 projects at any given time in June, said owner Jeremy Thomas. This June, it is only working on about two. Mr. Thomas said his eight-person company has had to turn down jobs because of a lack of subcontractors. He said subcontractors, such as carpenters and plumbers, are asking anywhere from double to four times their typical rate. Customers are turning to bigger contracting companies that can offer lower prices because they have more available workers, he said.”

  • “‘They have the power to increase the manpower. Where I may be limited to six guys on a project that will take me a week or two, they can put 10 guys and be done in three days,’ Mr. Thomas said.”

  • “Will Alphin, founder of REdesign.build, a high-end design-build firm in Raleigh, N.C., said a quote on a steel package used to be good for 30 days. Now, it is sometimes relevant for only 24 hours.” READ MORE

STARTUPS

Harvest Hosts gives RVers unlimited access to stays at farms and vineyards across the U.S.: “The beauty of Harvest Hosts, Carey says, lies in the company's business model. Instead of paying per night, such as one might do at a campsite or Airbnb, travelers who sign up for Harvest Hosts pay a yearly membership fee of $99. The locations themselves make money when travelers spend money on site at, say, farm stores or wineries. Businesses do not get a cut of the membership fee. ButHolland says the company strongly encourages its members to purchase products from the businesses that host them. On average, individual visitors spend $13,000 a year at the locations in which they stay; members spent over $25 million in total at small businesses they visited in 2020.”

  • “Today there are roughly 2,286 locations available to stay at across the U.S., and more than 180,000 members.”

  • “Membership bookings for Harvest Hosts in January and February 2021 were up 400 percent from the previous year and March was up 700 percent.” READ MORE

CloudForecast helps startups and mid-sized firms manage the cloud cost of using Amazon Web Services:. “Co-founder and CEO Tony Chan said engineering teams often don't have the time to do a deep analysis of their AWS bill to determine exactly where costs are coming from and if there's wasted spend. And the bill itself can be complicated to fully understand. ‘It's atrocious,’ Chan said. ‘The pricing structure is really complicated ... The big thing we’re trying to do is provide visibility for engineers to better understand where their costs are going.’”

  • “The startup has been intentionally bootstrapped to date, reaching six figures in annual recurring revenue last year. It's also profitable, Chan said.”

  • “It counts companies like dating app Coffee Meets Bagel, online mortgage lender Better.com, and web design platform Webflow among its customers.” READ MORE