Discover more from The 21 Hats Morning Report
Zooming from a Hybrid Office Can Be Tricky
It’s the mix of virtual and in-person participants that causes confusion.
Here are today’s highlights:
Equity crowdfunding is now a viable option for all sorts of businesses.
The pandemic has reversed golf’s decline.
Those supply-chain issues aren’t going anywhere.
And now there’s a shortage of luxury watches.
For real estate agents, the pandemic and TikTok are game-changers: “Madison Sutton had been a real-estate agent for only about six months when the city shut down. Hardly anyone was looking for Manhattan apartments, and Sutton, now 25, was surviving off a trickle of leads. Less than a year later, after she started posting apartment tours on TikTok, she was getting so many inquiries — up to 500 a day — that she ended up hiring two agents to help her field them. ‘I was doing 25,000 to 30,000 steps per day. I had to start wearing knee braces because I was going to so many walk-ups,’ said Sutton, who now has almost 95,000 followers. Her posts vary from apartment tours and day-in-the-life videos to comedic takes on the Murray Hill dating scene.”
“It turns out that TikTok, famous for teenagers sharing viral dances, is also pretty good for renting out apartments. And even, sometimes, selling them.
“‘My principal broker was like, ‘They are a bunch of young kids. Are they going to buy?’ said Alexander Zakharin, an agent with Avenues Real Estate who recently sold an apartment to a woman in her early 20s who found him on TikTok.”
“‘The family might be buying, but it’s the person on TikTok who will be choosing.’” READ MORE
The Federal Trade Commission has put companies that pay social media influencers on notice: “The use of so-called influencer marketing, other sponsored content and even the use of positive customer reviews on services such as Instagram drove the warnings, the commission cautioned. ‘The rise of social media has blurred the line between authentic content and advertising, leading to an explosion in deceptive endorsements across the marketplace,’ the FTC said in a statement about the letters.”
“A wide array of recipients received one of the warnings, including drugmakers like Pfizer, apparel companies such as Nike, video game publishers like Activision Blizzard, carmakers including Tesla, restaurant franchises such as Burger King as well as beer and liquor companies, home décor brands, broadband providers, hotels and more.”
“Amazon, Apple, Facebook, Google, Microsoft and Yelp all received the letters, according to the FTC, which said the list included more than 700 ‘large companies, top advertisers, leading retailers, top consumer product companies, and major advertising agencies."
“The notices are not indications of wrongdoing, the agency stressed. Should a company be found in violation of the law, however, it could result in fines of nearly $44,000 per instance.” READ MORE
The pandemic has reversed golf’s decline: “For the last 18 months, ever since authorities eased the pandemic’s initial restrictions, golfers have been jamming [Philadelphia] area courses in numbers not seen since the Tiger Woods explosion of the late 1990s. At public facilities such as Jeffersonville, tee-time bookings are up 12 percent to 15 percent, making it increasingly difficult to land them, even on once-slow weekday mornings. The tee sheets also are unusually full at the area’s many private clubs, places where play and membership had long been contracting.”
“‘There hasn’t been this much optimism and new activity in the golf business since the turn of the century,’ Joe Beditz, National Golf Foundation president and CEO, told a golf-industry gathering earlier this year.”
“In its annual report, the NGF called 2020 ‘an astonishing year,’ and both nationally and locally that surge has continued through 2021.”
“This sudden increase of par-seekers has spilled over to the game’s $2.9 billion equipment industry. According to figures from Golf Datatech, 2020 was a record-setter. That July, more balls, clubs, and other paraphernalia were sold than in any other month ever.” READ MORE
Equity crowdfunding is going mainstream: “On March 15, new U.S. Securities and Exchange Commission crowdfunding regulations went into effect, turning the black sheep of the investing world into a viable option for companies of all sorts to raise capital from individual investors. As a result of these regulations, equity crowdfunding has boomed over the past several months, with an increasing number of startups raising money through platforms like Wefunder and StartEngine. In doing so, equity crowdfunding has realized a mission of not only allowing startups to raise capital from a larger pool of investors beyond venture capitalists, but also giving customers and supporters a chance to buy shares in their favorite new companies.”
“[Immad Akhund’s] motivation to go the crowdfunding route wasn't because he needed the money or clout. After all, the Series B was led by Coatue, with participation from Andreessen Horowitz, CRV, and Sapphire Ventures. He did it to spread the wealth.”
"’We really want our existing customers to have ownership in our success because they're the reason we are successful,’ he said, adding that before the rule change that would have been ‘pretty infeasible.’”
“Among the new rules, the SEC increased the limit a company can raise from $1 million to $5 million; allowed companies to clean their books by listing capital raised through equity crowdfunding as a single entity rather than thousands of small individual investors; allowed founders to test the waters by offering reservations for equity before having to do compliance work.” READ MORE
Zooming from a hybrid office is trickier that Zooming from home: “With more workers returning to their offices part-time, often on schedules with minimal overlap, many are finding themselves increasingly thrown into meetings that mix in-person and remote attendees. For co-workers, that means navigating new, delicate social dances, and the accompanying hiccups, as workplaces experiment with different ways to ensure everyone can be seen and heard.”
“While all-remote meetings had pitfalls—people failing to mute or unmute, pet-and-kid cameos—organizers say hybrid meetings compound them, with even less room for error.”
“Given the friction of trying to mix virtual and in-person participants, hybrid meetings are mostly useful for status report-style updates, rather than robust discussions, says Josh Gordon, president of Full Spectrum Marketing in Akron, Ohio.” READ MORE
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THE COVID ECONOMY
Inflation accelerated in September: “The Labor Department said last month’s consumer-price index, which measures what consumers pay for goods and services, rose by 5.4 percent from a year earlier, in unadjusted terms. That is the same rate as in June and July as the economy reopened, and slightly higher than in August. The so-called core price index, which excludes the often-volatile categories of food and energy, in September climbed 4 percent from a year earlier, the same rate as in August.”
“On a monthly basis, the CPI rose a seasonally adjusted 0.4 percent in September from August, also faster than in August, which rose 0.3 percent.”
“The Social Security Administration said on Wednesday that higher inflation would trigger a 5.9 percent increase for Social Security benefits that seniors and other Americans receive, the largest increase in nearly 40 years.”
“The shortage of workers is also driving up wages, putting pressure on companies to raise prices. A sharp uptick in restaurant prices during the past few months is a sign of this pass-through from wages into higher prices, economists say.” READ MORE
The supply chain problems aren’t going away any time soon: “The supply chain nightmare is jacking up prices for consumers and slowing the global economic recovery. Unfortunately, Moody's Analytics warns supply chain disruptions ‘will get worse before they get better.’ ‘As the global economic recovery continues to gather steam, what is increasingly apparent is how it will be stymied by supply-chain disruptions that are now showing up at every corner,’ Moody's wrote in a Monday report.”
“‘Border controls and mobility restrictions, unavailability of a global vaccine pass, and pent-up demand from being stuck at home have combined for a perfect storm where global production will be hampered because deliveries are not made in time, costs and prices will rise and GDP growth worldwide will not be as robust as a result,’ Moody's wrote in the report.”
“Moody's said the weakest link may be the shortage of truck drivers — an issue that has contributed to congestion at ports and caused gas stations in the United Kingdom to run dry.” READ MORE
Small business optimism fell in September: “The National Federation of Independent Business said Tuesday that its optimism index fell in September by one point to 99.1, the lowest since March. Five of the 10 components declined, while just three improved. ‘Small business owners are doing their best to meet the needs of customers but are unable to hire workers or receive the needed supplies and inventories,’ NFIB chief economist Bill Dunkelberg said in a statement.’”
“Owners expecting better business conditions over the next six months decreased to the lowest level since December 2012.”
“Labor costs and quality were cited as the biggest threats to small business owners.” READ MORE
And now there’s a shortage of luxury watches, which is driving a second-hand market: “Demand for high-end watches exploded during the Covid-19 pandemic. But the Big Four watch brands — Rolex, Patek Philippe, Audemars Piguet and Richard Mille — are holding firm on the limited production runs that make their timepieces so rare. The result is an online boom in the business of buying, selling and flipping pre-owned and vintage watches and a growing number of start-ups competing to become the dominant digital marketplace.”
“‘The pre-owned watch market is still very much like the Wild West,’ said Toby Bateman, CEO of Hodinkee, a popular watch collector site.”
“On Tuesday, Hodinkee launched its pre-owned watch shop, where it will buy and sell watches produced after 1990.”
“Companies like Watchfinder, WatchBox and Watchmaster are also expanding and pushing for market share. Even eBay is taking aim at the Rolex crowd, launching an authenticity guarantee program and targeting higher-end watch collectors.” READ MORE
THE 21 HATS PODCAST
A skeptical look at open book management: Its proponents call open book management “the only sensible way to run a company.” To test that theory, we brought together three skeptics (Jay Goltz, William Vanderbloemen, Dana White) and three true-believing practitioners (Michael Kiolbassa, Chris McKee, Bob Schwartz) to discuss what it really means for owners to open their books: Do employees know what the boss makes? Do they flee when the numbers turn red? Do they expect to have a say in big decisions? What emerges from the conversation is an intimate look at how six smart business owners run their businesses—a look that even those who have zero interest in open-book management will find fascinating.
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If you see a story that business owners should know about, hit reply and send me the link. If you got something out of this email, you can click the heart symbol, you can click the comment icon below, and you can share it with a friend. Thanks for reading, everyone. — Loren