The Tariff Bill Arrives

Introduction:

This week, in a conversation recorded on March 27—shortly before Liberation Day, the day Donald Trump announced his so-called reciprocal tariffs—Liz Picarazzi told Shawn Busse and Jaci Russo what it was like to get her most recent tariff bill for a shipment of trash enclosures from China. “I knew what it was going to be, because I had calculated it,” she says, “but to actually see it on paper was terrifying.” And of course it’s only going to get worse now. In our conversation, we discuss a couple of points that bear emphasis: One, Liz tried everything she could think of to find a way to manufacture her products in the U.S. It hasn’t been economically viable in the past, and it’s unlikely to become viable any time soon. And two, Liz wonders—if these tariffs really are intended to bring manufacturing back to the U.S.—why isn’t some of the tariff money being directed toward supporting that transition? Plus: it’s been widely reported that only a tiny percentage of women business owners surpass a million dollars in annual revenue. As it happens, Jaci and Liz have both done it, but why is it so rare?

— Loren Feldman

Guests:

Liz Picarazzi is CEO of Citibin.

Jaci Russo is CEO of BrandRusso.

Shawn Busse is CEO of Kinesis.

Producer:

Jess Thoubboron is founder of Blank Word.

Full Episode Transcript:

Loren Feldman:
Welcome Shawn, Liz, and Jaci. It’s great to have you here. Liz Picarazzi, one of these days we are going to talk to you about something other than tariffs, but I’m sorry to say that today is not that day. You recently posted a photo on the 21 Hats Slack channel that showed your tariff bill for a shipment of trash enclosures that you’d ordered from your manufacturer in China before you knew where the tariffs were going. Can you tell us about that?

Liz Picarazzi:
Sure, so I dreaded that moment of getting my first tariff bill for actually over a year. I had really been dodging it. The day I received it, you know, I knew what it was going to be, because I had calculated it. But to actually see it on paper was terrifying. Honestly, there’s no other word than that. It was a bill for two containers that should have been $11,000 and it was $61,000—from $11,000 to $61,000. A $50,000 delta that, had those two containers come in on January 19, I would have paid $11,000 for them.

Loren Feldman:
How was the money taken from you?

Liz Picarazzi:
So we have a customs broker that brokers the transaction, and they have our ACH, and we wire them the money. That’s it. I can’t delay it. I can’t get an extension, like you do with income taxes. You just have to pay it. So my containers came in. They’re in the warehouse. They’re all stocked there. At least I have my stuff.

But receiving containers used to be something that we really, really looked forward to. It’s sort of like you anticipate, you get it. But this whole round of receiving these containers from China felt very different. And the other reason is that if this tariff situation remains as it is with China, that may have been my last two containers from a factory that I’ve done business with for eight years.

Loren Feldman:
Because you’ll have to move to Vietnam where you’re set up?

Liz Picarazzi:
So, yes, we began the process in 2024 of moving production from China to Vietnam. By around November, we had moved approximately 30 percent over, and the plan was during 2025 to sort of gradually move over the rest. That was my assumption, which was wrong, of course, that Harris was going to win. So what was going to be sort of a slower process over 2025 just to really de-risk or mitigate some of the risk became an absolute race to move everything. Like, literally, I had to quit China and move everything over to Vietnam.

So the Vietnam situation, unfortunately, is also not good for me. And I thought I had gotten an A on my China-plus-one strategy by being in Vietnam in December and really making things move faster. I really patted myself on the back, thinking we’ve really worked hard to move this over— not knowing that the whole world would be hit with a 25-percent tariff on imports of aluminum and steel, which hit me.

So now, I’m going to be having three more containers coming from Vietnam. The first one, which isn’t the first one—I should say it’s the third one—is coming next week. But it will be the first Vietnam container to be hit with the 25-percent tariff. And as if that’s not bad enough, the announcement on reciprocal tariffs is happening on April 2, and Vietnam has the third highest trade imbalance with the U.S., behind Mexico and Canada. So my Vietnam plan—I mean, I guess it wasn’t very well thought through. But back then, I wasn’t thinking about reciprocal tariffs. I was thinking about Trump putting a 60-percent tariff on China. I just wasn’t thinking about the whole world.

Loren Feldman:
So with China, with the bill that you got—correct me, if I’m wrong—but you had started the year with a 7.5-percent tariff, and then there were two additional 25-percent tariffs on top of that. Is that right?

Liz Picarazzi:
So we started at 7.5. Then shortly after Trump took office, it was an additional 10. And then there was the 25 percent on aluminum and steel, and then there was another 10 percent added. And I don’t remember what the reason for that was, but it ended up being 7.5 plus 10 plus 10 plus 25, which got me to 52.5.

Loren Feldman:
And what is it now in Vietnam?

Liz Picarazzi:
25 percent.

Loren Feldman:
Okay, but I should say we are recording this on March 27. By the time this comes out, you could have found out what that reciprocal tariff will be in Vietnam, which would obviously be on top of the 25 percent.

Liz Picarazzi:
Yes, Loren.

Shawn Busse:
How much inventory do you have, Liz, in terms of what’s your runway here before you have to start making hard decisions?

Liz Picarazzi:
So, because we had ordered five containers from both countries prior to things really going south, we actually are almost flush with inventory. We got two containers last week. We’re getting one next week, and then we’re getting two more in April. So my warehouse, I love it when it’s full—as long as we’re selling, that is. During the pandemic, I had a full warehouse, and that didn’t feel very good.

But some of that inventory—I would say 25 percent—has already been sold. And so in our pricing, trying to figure out, how do we recover from the amount that we sold at the current price without the tariff applied, sort of recovering that in our pricing for the rest of the year? Because these huge tariff bills, they have to be covered. You know, I’m not just going to take it from savings—like, yes, I am right now—but we have to recover that throughout the rest of the year, which is going to require price increases.

Loren Feldman:
Can you tell us what a 52.5-percent tariff does to your cost of goods sold? Do you know what the percentage is on a unit?

Liz Picarazzi:
I would say that we’re losing between 10 and 12 points of margin.

Shawn Busse:
Oof. That is crazy.

Liz Picarazzi:
Yeah, it’s a lot.

Loren Feldman:
You announced that you are going to raise prices. You sent an email out, I know, to your email list. And you gave people kind of a window of opportunity to purchase before you raise prices. That seems smart to me. Was it effective?

Liz Picarazzi:
It was. We have gotten a good number of orders since sending that communication. We’re going to send a couple more. I think we originally had the date as April 4. We’ve extended it to April 7, just to give people a little bit more time, and for us, even in our systems and Shopify, to adjust.

The thing that’s complicated is when we get, let’s say it’s a municipal order and it’s a really big one, and we’re not going to get paid until a few months after installation. That’s the one where we need to look at: Is the volume discount too high? New York City Parks we’ve given until May 31, which I feel pretty uncomfortable about. However, we’re playing the long game, and we know we’re going to have a good volume with them, because we already do. And I think we’re just at the beginning of rolling out to public parks, so that when it’s a large order, knowing that you’re going to be applying a current price to it is very worrisome.

Loren Feldman:
Do you actually lose money at that current price with the additional tariffs?

Liz Picarazzi:
Um, no, but pretty close.

Shawn Busse:
Yeah, it’s interesting, I was talking to a client the other day, and he was talking about the roll-down effects of the tariffs on his business, which, unfortunately, now are rolling on to me. He helps build big manufacturing facilities, so we’re talking hundreds of millions of dollars, in terms of investment size. And he was talking to a customer of his who is like, “Well, you know, this project I’m going to do will pencil out at this $280 million price”—but it doesn’t pencil out at $300 million. And like that’s not a big difference, you know, at that scale as a percentage. And essentially, that’s the difference between tariffs of different sizes.

You know, at a 10-percent tariff, the customer thinks he could probably absorb it, but at a 25-percent tariff, there’s no way, no how. And then that uncertainty is driving paralysis. And so my customer would normally be just humming along with new projects and so forth, but things have just really slowed down for him into the future. So he’s got a backlog, and he’s working through—just like you. You have a backlog of inventory, right? But then there’s this cliff up ahead that makes it really difficult to plan and make decisions. And I just see a lot of that happening in spaces that are dramatically affected by tariffs.

Jaci Russo:
Liz, how have your customers responded? Are they understanding? Are they like, “Let me give you more money”? [Laughter]

Liz Picarazzi:
No.

Jaci Russo:
Shocking.

Liz Picarazzi:
But I will say that we definitely have a more affluent client, particularly among the residential market. So, someone could have a Walmart or a Home Depot trash enclosure, plastic, and there’s a lot of people who do. But my customer is basically the opposite of that person, and they are looking for something that is really nice, that’s going to be a long-term piece of furniture that they put in front of their house, and one that adds rather than subtracts value.

So most of my customers have that mindset, as well as customers who have rat problems. And they’re getting citations from the sanitation department for the rat issues from the health department as well. They’re very motivated to get a trash enclosure that is reputable and is known to keep rats out. So they’re also less price sensitive, because the alternatives on the market, rats can get into.

Loren Feldman:
Liz, this might be a really stupid question. Since you make your enclosures in China, have you ever looked into selling them in China? I’m sure they have trash and rats there. What would keep you from doing that?

Liz Picarazzi:
Well, I don’t mean this in a negative way, but I would say culture—just to try to do business and to develop a business and sell into a culture that I am learning about, but don’t fully understand. Every time I have sort of a big interaction with my factory, I’m really glad that I have an intermediary who can bridge the gap, and it can go on everything from just etiquette to the style of negotiation. I think I’m a pretty good negotiator in the U.S., but I don’t think I am over there. I actually don’t really try. That’s why I have an agent who does that.

So if I had someone totally representing me to expand my brand into China, I would consider it, but I don’t know enough about the residential market in China. I’ve only been to like five cities. And I guess, to answer your question, the thought had never crossed my mind, but the immediate answer, I would say, is no. And it has to do with me as a marketer, wanting to know my market. And I know that I don’t know that market as well as I would need to in order to be successful with my product there.

Shawn Busse:
That would be such a complicated, expensive, high-risk endeavor. I would never recommend doing that, like, in a million years. I think Liz’s concerns are like the top-most concern, but there’s also just the issue of a very different ideology in China about intellectual property: an idea not really being sacred to a company. You know, if she proves that there’s a market for this, they have all the manufacturing capability to basically copy it and make it for far less money and put her out of business overnight. I just think it would be an insane idea. No disrespect, Loren.

Loren Feldman:
Let me ask you this, Liz. You’ve gotten some publicity of late. Has that been helpful? I’m sure you would prefer that publicity talk about things other than the tariffs, but it does spread awareness. How do you think about that?

Liz Picarazzi:
So I believe that small businesses need to have a louder voice in this debate. We are very affected by what’s going on, and there is a little bit of a feeling of, “Should I really speak about this?” Because maybe people are thinking, “Okay, well, you outsource this to China. You know, you made your bed.” They don’t have any compassion that I’ve been backed in—or walled in—in the situation. And I feel like it’s important for more businesses like me to explain how this impacts us, and at the most basic level, to illustrate that China does not pay our tariffs. If that point, and nothing else gets across in any of the media I’ve gotten, I will have done my job. Because it is scary how many Americans think that these tariffs are hurting China, and they’re not hurting their fellow Americans.

And I say I am an American in a way that I am proudly an American. I do not like some of what’s going on here, but the American government should not be giving American businesses $61,000 tariff bills, when two months previous, it should have been $11,000. So I want to scream that out. I want people to hear that, because it’s deeper than what you’re going to see in the news. And I take a risk by doing that. I probably take a risk by saying how I tried to escape China and went to Vietnam. I mean, who knows? Maybe in the state we’re in now, people are looking out to, I don’t know, single out people like me. But that paranoia I pushed to the side for the larger good of putting my small business voice out there.

Shawn Busse:
I mean, it’s very courageous, because the risk you bear is not only are you running the risk of upsetting people who are really pro-Trump and his tariff policy—so you’ve got that group who thinks it’s going to be awesome for America, and you’re saying, “No, this is really hard for us. It’s bad for small businesses.” Now you’re running the risk of people who are like, “You should be making these things in America. What are you doing making—?”

I admire what you’re doing, Liz, because I think that very smart people do not realize how this system works. I had no idea for many, many years until, you know, I had the unfortunate experience of having a client in the first Trump administration that was basically destroyed by the first round of tariffs. And those are deemed as relatively minor, you know, in comparison—those are baby tariffs.

I’ve just been calling it a circular firing squad, because it is true that tariffs are harmful to China. It’s very harmful to them, in the same way they’re harmful to Canada, and they’re harmful to Mexico. But the other side of the story that people are not hearing enough of, I think, are the very real businesses that are being harmed. And that client I was talking about earlier who is talking to his customers, these are very conservative businesses. I mean, deep-red-state businesses. And so I just think it’s important for people to understand that.

Jaci Russo:
Shawn, quick question: Do you think it’s marketing, because we call it a tariff instead of a tax?

Shawn Busse:
That’s a good question. That’s a really good question, Jaci. I think a tariff sounds very technical and obscure and kind of bureaucratic, whereas a tax, we have an emotional reaction associated with it, right?

Jaci Russo:
Yeah, but it’s just a tax, right?

Shawn Busse:
Yeah, it’s a tax.

Liz Picarazzi:
Yeah, if you look up in a dictionary, what is a tariff? They will say a tariff is a tax. It’s like synonymous, but it’s a flavor of a tax that people associate more with global trade.

Shawn Busse:
Yeah, that’s a good insight.

Loren Feldman:
But it defines it as a tax on imports. It doesn’t specify who actually pays it.

Shawn Busse:
Yeah.

Jaci Russo:
But in this case, it’s our friend, Liz, who’s paying, apparently, all the taxes. That’s a big bill.

Liz Picarazzi:
Yeah, well, one other thing I can say about this, and I may have said it on the podcast before, is that I would feel just a little bit better if that $61,000 went to a local high school for some sort of trade education, or went to some sort of New York State government entity that helps reshore companies like me. Wow, wouldn’t that be powerful if all of the manufacturers like me in New York were able to direct their tariff dollars toward something that would help this state with manufacturing and with trade education?

That would make me feel like, “Wow, I’m actually helping to not only reshore, but to help people find jobs and to actually hire people who are trained in those high schools.” Like, there’s a high school right across the street from my office that has a little bit of trade education, and I always think, “Man, what if I gave them $50,000 right now?” How powerful would that be—instead of having it just being tossed into the Treasury and no one knows where it will go—and likely it will go towards tax cuts?

Shawn Busse:
Is there any conversation about where these dollars are going? Because I know in the first administration, some dollars from tariffs were redirected back to farmers because they were dramatically impacted by the tariffs. But in your research and discovery, do you know what happens to this money?

Liz Picarazzi:
I’ve never been able to find it out. And everyone I’ve asked says it just goes into the Treasury, period.

Loren Feldman:
Right, it just goes into the general fund. If the idea behind these tariffs really is to drive more domestic manufacturing, why isn’t some of the money going into really low interest loans to somebody who wants to open a factory, or something like that? You’d think, even from just a PR standpoint, that would have been a smart thing for the government to do.

Liz Picarazzi:
Right, or even the government being able to say, “We helped reshore 200 American companies this year.” They could do that, and they could take credit for it, but instead they’re doing this, and no one knows where the money is going.

Loren Feldman:
Liz, you haven’t thought about this, I assume, so maybe you don’t have an answer off the top of your head. But can you imagine, is there something the government could do that would make it worth your while to actually open a plant, open a factory, and build your enclosures here?

Liz Picarazzi:
I would like the government to help someone else create a factory and then have like 10 of us in metal fabrication produce there. Like, I wouldn’t take the risk. My competency is not manufacturing; it’s product design and marketing. So I would love it if—I mean, I guess this is somewhat of a Chinese model, or any sort of a socialist model—the government actually creates the assets, the plants, that then different enterprises can use together.

I don’t see that going anywhere, but that would be sort of a beautiful thing. Because then all of us manufacturing at that particular facility would know that we all re-shored our companies to the U.S. because the U.S. helped us do it. There’s nothing like that being discussed. And I mean, I’ll pat myself on the back—only an entrepreneur would think of that as an idea. It’s true. No one in government is thinking about stuff like that.

Shawn Busse:
Well, yeah, because you actually care about small businesses. I mean, let’s just be candid here. I mean, the politicians of both stripes have paid a lot of lip service to small business over the years, but the truth is, where the money actually goes isn’t there. And, I mean, there’s even talk of cutting the SBA and reducing its staff by 20 percent. And if you truly are a believer in small business, we would have very different policies. And you’re just seeing this in action. You’re probably right. These are going to go to tax cuts to a very wealthy group of people and corporations, so it’s pretty frustrating.

Loren Feldman:
Let’s talk about another frustrating topic. [Laughter] Jaci, I know you’ve been thinking a lot lately about why there are so few businesses owned by women who pass a million dollars a year in revenue. What got you thinking about that?

Jaci Russo:
I just came across the article, and I really thought that the statistic was skewed. You can look at data from a lot of different perspectives and kind of make it fit your agenda or your worldview. And so I thought, “Well, surely the number 1.9 percent”—so, less than 2 percent—”of women-owned, women-led businesses ever get to a million dollars, surely that’s wrong.” Obviously, that must be a bunch of LLCs that aren’t really businesses. They’re just some sort of line item somewhere that someone created. Maybe it owns a rent house, you know, liability issues.

And so I dug into it and kept pulling the thread and following it, and lo and behold, it’s pretty darn true. And it’s astonishing. And so then I thought, “Well, why? What are we doing?” And there’s been discussion about it. Sarah posted it on LinkedIn, and some people chimed in there. You know, we were in an email thread with some people asking some questions about it. And I’ve got some suspicions as to why I think it is, but I don’t think that I am surprised by it. But I am shocked by it.

Loren Feldman:
Correct me if I’m wrong, but I think the statistic might be even more shocking than you just portrayed it. I think it’s not 1.9 percent of all women-owned businesses, which would include a lot of very, very small businesses. It’s 1.9 percent of women-owned businesses with more than $100,000 in revenue.

Jaci Russo:
Correct.

Loren Feldman:
It’s kind of an even more daunting statistic.

Jaci Russo:
Thanks, Loren. Way to make it better. [Laughter]

Loren Feldman:
I want us to understand the magnitude of the issue.

Shawn Busse:
We’re gonna title this episode, “The Downer Episode.”

Jaci Russo:
But no, you’re right. According to the data, these entities have employees. These are not side hustles, just a woman who’s maybe selling cosmetics or jewelry or weight loss or something. This isn’t that. These are real companies that have gotten up to six figures but cannot get to seven.

Loren Feldman:
So what are some of those ideas you’ve kicked around?

Jaci Russo:
I mean, I think it’s a couple of things. And I’m gonna do my best not to make this a sexist, misogynistic, or generalization, but I don’t know how to not hit all of those three things at some point, based on this topic. But I think I am a feminist, so I come to this from a place of love, but I think that the women business owners who I know—so let me make it personal—for the majority of them, they significantly undercharge compared to the men who I know in the same industry, same geography, same general job. So, that’s part of it.

The women that I know, who have been in business for a while, have spent so much time, in a lot of cases, raising kids, focusing on their families, taking time off to have the kids, that they have not, over the history of their careers, put as much time into the workplace as their male counterparts. So, I think that’s an impact. I think that women network differently than men. I think that women, in a generalized—don’t come at me on LinkedIn—I think overall, for the most part, most women are not as aggressive, assertive, competitive as men. We are the caregivers and the caretakers for the majority.

Loren Feldman:
And you raise that issue because of the impact it has on sales, or raising money, or all of the above?

Jaci Russo:
Yeah, and needing to win. I think when you need to win, you are very competitively motivated toward reaching that next rung on the ladder, reaching the next sales goal. That competition kicks in, and that’s a driver. There’s some testosterone at play on the man’s side that maybe isn’t as predominantly displayed on the women’s side. I think sometimes we’re a softer touch. We’re nicer. We try to help more. And these are our strengths, too. So I hate listing them in an area where we’re talking about them almost as a weakness or as a barrier, because I think these are our greatest strengths as a gender. But I think when it comes to this particular topic, it can be something that holds a lot of women back.

I will say, with all of the ego this is going to sound like, I was also surprised by the statistic, because we did that in our second year. And so I thought, “Well, I didn’t know that was hard.” And I know it sounds way worse than I mean it to. I didn’t know because I also didn’t know that women owning ad agencies was rare. I had no idea how small a percentage that was across the country, because in my hometown, it’s 50 percent.

So here in Lafayette, Louisiana, where I grew up, and I went to college, and I interned at an ad agency, half the agencies are founded and owned by women. I just thought that was normal. I thought this was like a chick industry. I had no idea that we were a minority until I became an adult and looked around and said, “Why am I the woman in this meeting? Why aren’t there other women here?”

Loren Feldman:
Jaci, I’m sure a lot of other owners of agencies have asked you how you went past a million dollars so quickly. What do you tell them?

Jaci Russo:
Well, Loren, not many have asked. If they had—because, again, I’m the only woman in these meetings sometimes, and none of us knew it was a big thing. I looked around at the other women-owned agencies in this town, and they all did—some to eight and nine figures. So again, I didn’t know it was a rarity.

Loren Feldman:
Is Lafayette some kind of center of the marketing world? What am I missing?

Jaci Russo:
Actually, it was for a while. There was a gentleman named Dutch Kepler who ran the advertising arts program at the University of Louisiana for like two decades, and at the height of his program and his successful graduates, most of the top art directors and creative directors at some of the biggest and best agencies in the country were all University of Louisiana graduates.

And so, the ones who either chose not to leave home or who came back to Lafayette came from a basis of: This is what we do, and this is how we do it. And they were taught how to do things really well. I wasn’t in that program. I’m not a graphic designer. But Michael was. And all of the agency owners who I know came from that, because they were all really strong designers, and they came through Dutch’s program. It was very much like the freshman class had 50, and by senior year, you were down to five.

Shawn Busse:
Was the gender distribution in those classes fairly even, or even maybe skewed female?

Jaci Russo:
It was. It was majority female.

Shawn Busse:
Yeah, that mirrors something I’ve observed. You know, I joined the Entrepreneurs Organization accelerator program back in 2009, and it was for businesses over $250,000 but under a million. And the goal of the program was to get you to a million dollars. And when I joined, and I looked around: a lot of people that looked like me. A lot. I mean, it was probably skewed, if I’m generous, 60-40, but probably more like 70-30, maybe even 80-20. And if I were to look at that group now, that accelerator organization, I bet it’s at least 50-50, if not more women to men.

And so the parent organization, the Entrepreneurs Organization, for businesses over a million dollars in Portland, also was very male-skewed back then. And it’s one of the reasons I left. I was just like, “This is just a bro club.” If you were to go back now, it’s tremendous female representation, some of the best in the country. And the reason that changed, honestly, is that the chapter decided to change it. They just said, “We need to recruit more women, both at the million-dollar level, and we need to recruit more women at the accelerator level.” So they decided to change it, and they changed it. But I think that idea of the university being the upstream funnel to success, and how equitable that is, directly informs what happens in the industry. At least, that was my observation here in Portland.

Liz Picarazzi:
I’ve got a few thoughts as a woman. So, I made the decision, actually with Frank, my husband, that we wanted just one child. And it was very deliberate. It was that I knew I was an entrepreneur trapped in a corporate job, and he knew that he was a musician trapped in a corporate job, and we wanted to be entrepreneur and musician. And we realized that it would be easier if we only had one child, and that we wouldn’t have to pay for the child care, and we wouldn’t have to—just everything is very expensive in New York City.

And it wasn’t something that was a very popular decision with certain family members, but we really realized, like, as people, this is our lives. Are we going to have more children because it’s expected of us, if it means that we can’t be an entrepreneur and a musician? And I’m really glad with that choice. And I’m not usually very honest about it, because I think people think it’s sort of crude to say, “I only had one kid because I wanted to be an entrepreneur.” But that was actually what it was for me. And I shouldn’t feel ashamed of saying that.

Jaci Russo:
No, not at all.

Liz Picarazzi:
And I know you guys wouldn’t say that, but you know, I’m in a world where there are a lot of men because I’m in the waste-management field. And when I go to certain trade shows, they assume that I’m the booth girl, particularly if I’m dressed really nicely, and even more so if I’m wearing heels. So, we had a trade show recently where a fellow came by, and I talked to him for a little while, and he said, basically, “Who are you?” And I said, “I’m the founder.” And he said, “Did you inherit the business?”

Jaci Russo:
Ouch.

Liz Picarazzi:
And I said, “No, I said the word founder, meaning, I’m the founder—not my father, not my grandfather.” And I was really bothered for several days after that, because no one had ever assumed that I wouldn’t have had my business unless I inherited it. And Frank was with me when that happened. On that same trade show, it was just me and him working it. He introduced me as the founder, to someone that was at the booth, and then he said, “Oh, and she’s also my wife.” And the guy said, “Yeah, you probably make the money, and she spends it.”

Jaci Russo:
Ouch.

Shawn Busse:
Oh my God.

Loren Feldman:
Wait, what year was this?

Liz Picarazzi:
This was literally three weeks ago, Loren. I could not believe it, and it was within like a 15-minute span, the first and the second remark. And I don’t normally feel like there’s such a concentration of chauvinism, but I felt it that day. And it really made me realize, I don’t know if people feel more comfortable saying things like that. That’s what really left me is, would a year ago someone have told me to my face that they assumed I inherited my business because I’m a woman? It’s awful.

Jaci Russo:
It is awful.

Liz Picarazzi:
But on the other hand, I’m a very determined, competitive—as you would say—maybe have a little bit more testosterone in me. And when I hear things like that, it makes me more determined, sort of an I-will-show-you attitude. And also, you can go a little bit too far with that, but for me, it’s a healthy way of saying: I am not going to get knocked down by those belief systems. And maybe what happens in these statistics is women hear that too much, and they think, “You know what? This is uphill. I don’t have peers in the space.”

Loren Feldman:
Liz, how long did it take you to get to a million dollars in sales?

Liz Picarazzi:
Let me think here. It took me seven… actually, no less. It took me six years.

Loren Feldman:
And were you very conscious of that? Was that a big deal for you when you hit it?

Liz Picarazzi:
So, yes, it was, but on the day it happened, it was during the pandemic, and it was, I think, even during lockdown. And I was home alone the day it happened, and I remember realizing, “Wow, I should be celebrating this. This is a huge deal”—and feeling really alone. Like, “Wow, I just hit this milestone. Who do I tell?” I didn’t want to announce it on Facebook. That would have been sort of obnoxious.

But the other reason I was excited is when I worked at American Express, I worked in the marketing division that did a program called Make Mine a Million Dollar Business, and we ran seminars around the country for small business owners to help get them to a million. And once they did, we had a huge celebration for them, and that was festive. And I remember back then thinking, “If I ever have a business, I want to be celebrated,” like all of these very inspiring women who had hit the million-dollar mark and American Express recognized.

Jaci Russo:
I’ll throw a party for you, because I think it’s a feat worth celebrating.

Liz Picarazzi:
It is.

Shawn Busse:
I’m just kind of curious here, I’ve met men who are not super aggressive and women who are aggressive. And all these personality questions, I just want to set that aside. I think the child-care issue and the cost of raising a kid is really germane. And I’m curious, if our country were to provide an insane level of benefits for children, meaning they paid for all that—all your health care for kids was paid for, all the day care was paid for—like, functionally, we agreed, as a society, we’re going to raise great children and we’re going to pay for that and not put the burden on, well, really women—do you think you would have had a second child? Or how do you think that would change the ecosystem of entrepreneurship?

Liz Picarazzi:
So, I think I’m the one with the one child here. Jaci, I think you may have three or four. I can’t remember.

Jaci Russo:
I have four. And I had no idea how expensive they were. I would have maybe done something differently. They cost a lot.

Liz Picarazzi:
Well, I think there would be much more balance in sort of the proportion of male and female businesses. The other dynamic that I think happens with women is that when you leave the workforce for a few years to raise a family, it’s really hard to get back in. Because there’s going to be people who you’re competing with who have fresher resumes, and it’s pretty intimidating. And I think that’s part of why some women don’t go back, or then they decide that they want to switch careers, because maybe they didn’t like the one they were in prior to starting a family, and they find then that it’s difficult to break into. So, taking a break from work for five or so years, that is putting you at a disadvantage whether you’re a man or a woman. It just so happens that more of the people taking that five-year break are women.

Shawn Busse:
Yeah, you know, the other thing, I hadn’t really thought about this until just now. I’ve employed a disproportionate number of women over the years. And I would say that one of the things that I’ve observed is that when women choose to start to have kids, sometimes what they do is they opt out of the entrepreneurial and small business space and opt into the corporate and government space. And I think part of that has to do with just how little support there is for them and how hard it is for a small business to support that.

And if you think about kind of the downstream consequence of that: If you have somebody who’s involved in a small business, and they’re really important to the organization, and then they shift over to the corporate space, because it’s just more supportive of having children, because it’s bigger, you’re kind of losing a talent funnel there. Because now they’re no longer part of that small business ecosystem. They’re not building a network within that space. They’re sort of becoming subsumed by the corporate world. And I wonder if that’s also part of this phenomenon.

Because so many of us who are small business owners, we start our business because we worked for a jerk—myself included. I worked for just like the most sexist, just terrible bullying type of boss ever. And I was like, “Well, I can do better than this.” And I think the more people you have in that ecosystem who are women, the more people who are going to say, “You know what? I can do better. I can do better than this.” But if you have to go into corporate America, because it’s the only way to kind of make a family work, we’re gonna have this skewed situation continue. So I just keep getting back to this idea of: We really need to support women and their desire to have a family, as a country. Like, you can’t expect that burden to be borne by small businesses.

Jaci Russo:
Well, Shawn, I kind of want to jump in, because your idea about government providing that health care, I’m not as fond of that as the culture shifting so that it’s a shared parent responsibility—not just a mom job.

Shawn Busse:
I don’t know. I mean, cultural change is pretty hard.

Jaci Russo:
Yeah, I hear you. I don’t know. Liz, what do you think about that? Would you rather have piles of money to support you as a kid? Or would you rather try to change attitudes?

Liz Picarazzi:
I would like to have the piles of money.

Loren Feldman:
Ideally, you’d like both, of course.

Shawn Busse:
Both would be great.

Loren Feldman:
The cultural thing is interesting to me, and not just as it applies to parenting. I wonder if a bigger factor here is just kind of the cultural expectation of what people do for a living. There’s been a cultural shift in what it means to be an entrepreneur, even as it affects men for many years. I mean, Jay Goltz talks often about how he got looked at funny when he decided to start a business after getting a college degree—like this was an outrageous thing to do.

I wonder if it’s just become more of a socially acceptable thing, more of an internally acceptable thing, for women to start businesses these days than it was 10 or 20 years ago—and that it might have been something that just didn’t cross the mind of a lot of people who could have done it, whereas these days, maybe it will. What do you think?

Shawn Busse:
Yeah, for sure. I mean, it’s become more culturally acceptable to be an entrepreneur in general. You know, there’s college programs now for it. It’s celebrated in lots of ways. I think it’s become more culturally acceptable for women to choose that than to be mothers and so forth.

Loren Feldman:
Well, it doesn’t even have to be just that there was something wrong with being an entrepreneur. It’s just if you’re looking at the two paths, if your choice is whether to start a business or go into corporate America, going into corporate America probably seemed like an easier path or a more lucrative path back then. And in fact, correct me if I’m wrong, I think both Jaci and Liz chose that path initially.

Jaci Russo:
Yeah, I was all corporate all the way. I’m an accidental entrepreneur, for sure.

Shawn Busse:
Oh, I didn’t know that, Jaci.

Jaci Russo:
Oh my gosh. No, I went to L.A. and got a big, nice, fat paycheck and big title and bought a house and was on corporate lane. And I came home for family, went to work for a small ad agency run by a woman, and competed against other local agencies, almost all run by women. And then had a great boss there, but got fired by her husband and went to work in-house somewhere. And that was where I ran into my boss challenges and left because I could be a freelance media buyer, because I needed time for the kid that I was getting ready to have. And then freelance media buyer turned into, I looked up three years later, and I had 12 employees in 900 square feet, and thought, “What have I done?” And bought a building, and thought, “Oh my gosh, what have I done?” And now here we are, 25 years later.

Shawn Busse:
And so your journey there, how many kids did you have at that time, that first three years or so?

Jaci Russo:
Oh, well, I had four kids in the first four years. Just to give you the quick recap, Shawn:
First date in January, engaged in April, married in October of the same year. Then, 10 months later, our honeymoon surprise arrived. So we had our first kid. And then 17 months later, and then 15 months later. So on our fifth anniversary, we had known each other for five and a half years, had been married for five years, and had four kids.

Liz Picarazzi:
Oh my gosh.

Jaci Russo:
I married a real good Catholic. [Laughter]

Shawn Busse:
During that window of time, what was the cost of living like for you?

Jaci Russo:
You know, it’s hard to tell, but I can tell you, diapers are real expensive. I nursed, so we didn’t really do a lot of formula.

Shawn Busse:
What about housing?

Jaci Russo:
Well, I had this house in L.A. that I kept, and then I bought a house here—again, good job in L.A.—and then when Michael and I, we were already married and pregnant when we bought the house that we still live in today. So we bought that house in 1999, and that’s still the house we live in.

Shawn Busse:
Okay, so cheap housing. So I think this is kind of getting to where, one of the things I see is that I think the middle classes struggle so much, because it used to be you could afford to have a family on one salary. And especially in urban centers, in New York with you, Liz,, it’s extreme. But Portland’s now become extreme too. You literally can’t do it. You literally cannot raise a family. You can’t even be a couple on one salary anymore. So I think that’s another force that we’re witnessing here, is that the extreme cost of living is making some of these choices an impossibility. It’s not even a matter of like, “Well, let’s get the dude to stay home and raise the kids.” Like, no, the dude’s got to work, too. They both do. They both have to work.

Liz Picarazzi:
Well and also with housing, to your point, if you want to buy a house and you need a mortgage, they’re basically going to be expecting two solid paychecks. And for us, we made sure we bought our house before I went out and became an entrepreneur, because we knew that without that second paycheck, we wouldn’t get a mortgage.

Shawn Busse:
Yeah, that’s another force at work, preventing entrepreneurship, is you are treated so differently, almost like a pariah, if you’re an entrepreneur when you go looking for financing. “Are you an employee? No, you’re self-employed. Oh my gosh, you’re a leper.” You’re just not accepted.

Liz Picarazzi:
Or, “We’ll give you a loan, but we’re just going to take your house as collateral.”

Loren Feldman:
And the issue there isn’t just getting housing, it’s having collateral that you can use to get a loan to build your business, which is obviously a factor.

Shawn Busse:
Right, they’re not going to give you a loan to buy a house because you’re self-employed. They’re not going to give you a business loan without a house. How do you get the house? You know, it’s a really tough road to hoe. And then layer on top: child care, cost of child care, cost of housing. It makes a lot of sense. I mean, I like your happy worldview, Jaci, of men actually bearing 50 percent of the burden, if not more, right? It doesn’t seem like that’s what’s happening, and maybe it’s not even possible, in terms of cost of living.

Loren Feldman:
I still think on top of that, awareness is an issue. I still know a lot of people for whom it just would never occur to them that they can start a business—and they probably shouldn’t. Most businesses don’t succeed.

Jaci Russo:
It’s not easy.

Loren Feldman:
It’s very hard to do, but the awareness is growing that it is an option for a certain number of people, and I would like to think that that will help over time.

Shawn Busse:
Yeah, for sure. I mean, really, what we’ve talked about here a little bit, at least, is Jaci talked about what made that successful in Lafayette was mentorship, coaching, a space where people were supported in those early days of how to run a business, right?

Jaci Russo:
An example to follow. Like, you see someone. You think, “Well, I can do that.”

Shawn Busse:
Yeah, an example to follow. So I think that’s the one thing that is in our control in a lot of ways. You know that we’re not going to get government policy to shift overnight. We’re not going to get ideology about who should raise children to change overnight. But I do believe we can do things like become better mentors. We can join organizations like EO and then volunteer at the accelerator program. We can go to SBDCs and be guest presenters.

I’m just sort of citing things that I’ve done to try to help that younger generation. I think that is our most powerful tool to create more entrepreneurs, is to just help show people the way. Because it’s a really hard path and very, very difficult, but I was only successful once people kind of gave me a bit of a playbook.

Loren Feldman:
All right, on that note, my thanks to Shawn Busse, Liz Picarazzi, and Jaci Russo. Thanks for sharing, everybody.