What Are Your Goals for 2024?
In our latest podcast episode, our business owners talk about why they are optimistic about the year to come.
Here are today’s highlights:
American shopping centers look very different today than they did five or 10 years ago.
There was a lot of screaming and yelling when Philadelphia instituted a soda tax. But it’s over now.
Google’s antitrust loss could have an impact on how big platforms charge small businesses.
The founder of a trillion-dollar company says it wasn’t worth it.
THE 21 HATS PODCAST
This week, Shawn Busse, Liz Picarazzi, and Jaci Russo discuss what they learned in 2023 and what they expect from 2024. After a tough year, Shawn is optimistic that his clients, having survived the turbulence of the past few years, are ready to spend money and try something different. Liz explains why she’s been willing to discount her products as much as 40 percent on Cyber Mondays and tells us about some new products she has in the works. Early in the year, Jaci, thinking she was going to have to staff up to handle two big new clients, dove into remodeling her offices — but those big clients have yet to sign on. “I might have jumped the gun a little bit,” says Jaci. Plus: Liz talks about her Midwestern mom, who can’t understand how Liz can charge so much for her trash enclosures. And Shawn raises the issue of how much money business owners should spend on marketing.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Honey, I shrunk the store: “The rise in e-commerce and a growing distaste for giant emporiums are softening demand for department stores and other big-box space. Restaurants and coffee shops, meanwhile, are gobbling up small storefronts as Americans spend more time dining out, ordering at drive-throughs or using food-delivery apps. The end result: Retailers signed leases averaging 3,200 square feet during the first three quarters of 2023, the smallest size since data firm CoStar Group began tracking this metric in 2006. ‘A shopping center today looks very different than it did 10 years ago,’ said Brandon Svec, CoStar’s national director of U.S. retail analytics. ‘The focus is much more on experience, much more on food and beverage.’”
“Despite these changes in retail’s landscape, overall demand for store space is robust. Nationwide, the rate of available retail space was 4.8 percent in the third quarter, the lowest level in the 18 years the data has been tracked by real-estate-services firm CBRE.”
“Rather than filling sprawling department stores with an array of merchandise, many retailers have started using data from online orders, social-media and foot-traffic analytics to customize smaller inventories to the local population. They have also bolstered store infrastructure to make it easier for customers to pick up and return items bought online.”
“‘The old days of stack ’em high and watch ’em fly are gone,’ said retail analyst Dana Telsey, who founded and runs Telsey Advisory Group.” READ MORE
Google’s antitrust loss could change the way big platforms charge: Google lost an antitrust lawsuit filed by video game maker Epic Games, with a jury finding the tech giant’s mobile-phone app store is an illegal monopoly. The decision is a major blow to the tech giant, which has mostly been able to avoid losing lawsuits and being forced to make changes to its products despite years of investigations into allegations that its practices break competition laws. The jury’s decision could open up other Big Tech companies to challenges on how they control pricing and payments on their massive internet platforms.” READ MORE
Having alienated big brands, Elon Musk is hoping to attract smaller advertisers to Twitter/X: “X’s advertising team is trying out partnerships with other ad platforms that might help it attract small and midsize businesses, which has been a key ingredient in the success of tech titans like Meta and Alphabet’s Google. X has discussed a potential partnership with Amazon.com that would make X ads available through Amazon’s ad-buying software, according to people familiar with the matter. This deal, if reached, could draw in some of the millions of small and midsize businesses that peddle everything from paper clips to slipcovers on the e-commerce giant’s marketplace and buy ads through its tools, the people said. The talks were preliminary and might not lead to a deal, the people said.”
“Small businesses like startup direct-to-consumer brands appeal to X because they are ‘often less concerned about brand safety,’ said Nii Ahene, chief strategy officer at digital-ad agency Tinuiti. They tend to be ‘more interested in just moving product rather than building brands,’ he said.”
“Innovet Pet Products recently began advertising on X, after Musk’s platform began allowing ads for cannabis products and services. The California-based company, which sells CBD oil and other wellness products for pets, said it spent roughly $2,000 on X ads in a recent 30-day period and plans to increase spending.”
“Innovet Pet Products CEO Matt Terrill credited X for boosting sales, saying his company sees ‘a very direct correlation between our Twitter ads going on and sales.’ He said the team has had trouble using X’s tools to get more detailed data about ad performance, such as which ads were most effective at driving purchases.” READ MORE
Is it possible to rebrand a state? “What comes to mind when you think of Connecticut? Preppy? Wealthy? Snooty? Old? A pit stop between New York and Massachusetts? Gov. Ned Lamont, a second-term Democrat, would not be surprised. ‘Sleepy, suburban. Not very diverse,’ he suggested in an interview at his office in the Statehouse. Let’s face it, our perception, our lifestyle was considered a little out of date.’ He would like to change that. Governor Lamont, who once publicly urged residents to stop ‘badmouthing’ Connecticut, has begun a state rebranding campaign. ‘Make It Here,’ a $1.8 million advertising blitz, paints Connecticut as creative and diverse.”
“‘Make It Here’ celebrates the state’s high-tech manufacturing: spacesuits, helicopters, submarines. And it shows off Connecticut’s fun side: pizza, basketball. The ads also frame the state as livable. There are walkable cities, good schools and good jobs.”
“But forging a new identity may be a challenge. In a recent survey by the governor’s office, only 50 percent of Connecticut residents said they were proud of the state — even though 73 percent of them said it was a good place to live.”
“Other cities and states are also rebranding, to try to compete for tourists, businesses and talent. San Francisco, fighting its crime-and-decay image, recently unveiled ‘It All Starts Here.’ Flood-battered Vermont tried to draw tourists with ‘Very Much Open.’ Michigan is spending at least $20 million on ‘You Can in Michigan,’ to try to attract workers. Does any of it make a difference? READ MORE
Do you remember the fireworks when Philadelphia became the first big city to levy a tax on soda? “Known as the sweetened-beverage tax, the 1.5 cents-per-ounce levy took effect in 2017, making Philadelphia the first big U.S. city to tax soda and becoming a key component of Mayor Jim Kenney’s legacy. The tax caused a political uproar that flooded City Hall with millions of dollars in lobbying, prompted a legal battle in the state Supreme Court, and helped spawn three unsuccessful campaigns in 2019 to deny Kenney a second term. But today all the fizz has gone out of the controversy.”
“The tax has raised about $480 million, which Kenney has used to support universal pre-K, community schools, and an ongoing effort to update the city’s parks, libraries, and recreation centers.
“Spending to oppose it has plummeted in recent years. And with an incoming mayor and Council that has largely supported the levy and the programs it pays for, the tax isn’t going anywhere.”
“Jeff Brown, a grocery store owner who was outspoken over the tax, blamed it for the closure of one of his ShopRite stores in 2019 — which the Kenney administration pushed back against. But Brown didn’t argue for repealing the tax during his mayoral run this year.” READ MORE
FROM OUR SPONSOR: THE GREAT GAME OF BUSINESS
Sometimes, it’s the boss who wants to work remotely: “Joss Burch is CEO of a refrigeration parts business, Keep Supply, based in Springfield, Mo., where he used to live with his wife and six kids. Early in the pandemic, they packed up and moved to Europe, where he has continued to run the business. In a recent interview, Burch talked about why he and his partners decided to open their books to employees, why fast growth can be more challenging than it seems, and how working remotely has changed him as a manager.”
“Ultimately, coming out of the pandemic, we made a decision, and we sold our home, and a lot of our belongings that we had, and ultimately started to travel as a family — because I was working remotely anyway and continued down that path.”
“It was difficult in the beginning, I'll say that. Because I’m kind of a — my nature is sort of a show-up-first-and-leave-last kind of a nature. So it was very difficult for me not being there. But it's made me be very intentional, I guess, about the way that I spend my time, intentional about letting others step in and take the reins on things.”
“I'm sure there are times we're working on things that require a lot of dialogue, that require a lot of thought, where they're probably thinking to themselves, ‘Man, it would be a lot easier to do all this if we were together in a room.’ But they're very gracious and if it's been a big issue, I've not heard about it.” READ MORE
Gas prices have hit their lowest level in a year: “The national average for unleaded gas was $3.14 a gallon on Dec. 12, according to AAA. That’s 23 cents less than it was a month ago and the lowest it has been in nearly a year. The biggest driver behind cheaper gas is falling oil prices. The price of Brent crude, the international benchmark, has plunged around 20 percent to $76 a barrel since approaching $100 in late September. Gas prices usually start abating in the fall, as most states switch to a cheaper blend of fuel that contains more butane. Demand also drops after summer, which is peak driving season in the United States.”
“Research from Carola Binder, an economics professor at Haverford College, has found that consumer sentiment becomes significantly more pessimistic when gas prices are higher, and that Americans view soaring gas prices as a negative portent for the economy as a whole.”
“The fall in gas prices has come as consumer sentiment has rebounded, although it remains below pre-pandemic levels. According to the University of Michigan’s survey, a closely watched indicator, consumer sentiment in December shot up 13 percent compared with the previous month.”
“Overall, consumer sentiment is nearly 40 percent higher than in June 2022, the lowest in the survey’s history, when gas prices last reached $5 a gallon and inflation was at a four-decade high.” READ MORE
The founder and CEO of Nvidia, the trillion-dollar chip company, says that if he had it to do over again, he wouldn’t: “When he sat down in a booth at his local Denny’s and began plotting out the business that would change his life, Jensen Huang didn’t know that his startup would one day be worth $1 trillion. In fact, the only chief executive in Nvidia’s history didn’t know much of anything about what he was getting himself into. But if he had known three decades ago what he knows today, he never would have founded one of the world’s most valuable companies. ‘The reason for that is really quite simple,’ Huang said recently. ‘Building Nvidia turned out to have been a million times harder than I expected.’”
“He didn’t know that the original business plan had no chance of success. He didn’t know how many times he would fail. And he didn’t know just how much he didn’t know.”
“‘If we realized the pain and suffering and how vulnerable you’re going to feel, the challenges that you’re going to endure, the embarrassment and the shame and the list of all the things that go wrong,’ he said, ‘nobody in their right mind would do it.’” .
“Everyone in Silicon Valley knows they have to be resilient. Huang knows it also helps to be ignorant. ‘I think that’s kind of the superpower of an entrepreneur,’ he said. ‘They don’t know how hard it is. And they only ask themselves: How hard can it be? To this day, I trick my brain into thinking: How hard can it be?’” READ MORE
SmileDirectClub, which never made a profit, has shut down: “The company, founded in 2014, sold teeth aligners online and in its shops for $1,850. It marketed them as a faster, cheaper alternative to braces. SmileDirectClub’s initial public offering in 2019 valued it at $8.9 billion. SmileDirectClub served more than two million customers over nearly a decade. But the company was not profitable and filed for Chapter 11 bankruptcy in September with nearly $900 million of debt, court filings and financial statements show. And this year, it settled a lawsuit from the District of Columbia attorney general’s office that had accused the company of using confidentiality clauses to stifle consumer criticism.”
“On Friday, SmileDirectClub said on its website that it was shutting down its global operations immediately. It apologized to customers for the inconvenience, and urged them to consult a doctor or dentist about future treatment.”
“SmileDirectClub was founded in Nashville by childhood friends Alex Fenkell and Jordan Katzman. To order its products, customers made a mold of their teeth at home with a kit mailed by the company or had their teeth scanned at a ‘SmileShop’ retail location. The scans were reviewed by dentists and orthodontists in the company’s network.”
“After the company went public, its shares traded at about $18 apiece but later became a penny stock. As the company failed to turn a profit, it also dealt with legal fights throughout its existence and dissatisfied customers who accused it of false advertising and of violating Food and Drug Administration regulations.” READ MORE
THE 21 HATS PODCAST: DASHBOARD
Your Last-Minute, Year-End Tax Strategies: This week, Gene Marks shares his suggestions for anyone looking for last-minute ways to save on taxes. Start with your retirement account. Better yet, start planning ahead for next year. Plus: What’s the best CRM for solopreneurs and microbusinesses? What artificial intelligence apps for business are worth trying right now? And what does Philly native Gene make of the $140 Philly cheesesteak?
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren