In Four Years, This Will Be Your Business to Run

Introduction:

This week, Jaci Russo and Sarah Segal wrestle with a question that haunts many entrepreneurs: How do you bring your kids into the business—whether for a summer or for good—without messing up the business (or the kids)? For years, Jaci and her husband Michael quietly hoped their son Jackson might one day take over their marketing agency. Their unusual strategy? Never mention it to him—at least not until he’d demonstrated interest and not until he’d proven himself somewhere else. The approach seems to have worked: Jackson has joined BrandRusso, and Jaci has told him he’ll take over in four years. Which prompted Sarah to ask Jaci an obvious question, “What happens if he takes over, and he does a bad job?” As it happens, Jaci and Michael have thought about that, too. Plus: Jaci and Sarah discuss the merits of the new tech trend, especially hot in San Francisco, where more and more people are wearing AI-powered devices that can stealthily transcribe every conversation they have.

— Loren Feldman

Guests:

Jaci Russo is CEO of BrandRusso.

Sarah Segal is CEO of Segal Communications.

Producer:

Jess Thoubboron is founder of Blank Word.

Full Episode Transcript:

Loren Feldman:
Welcome Jaci and Sarah. It’s great to have you here. I’d like to talk about the potentially tricky situation of hiring your own offspring to work in your own business. Obviously, it can be a wonderful thing, but it can also be challenging—we all know—whether your kids are there just for a summer or whether they are hoping to one day take over. Sarah, you’ve had some recent experience with this. Tell us about it.

Sarah Segal:
When I got my first job in the real world, I was a bagger. I worked at a store called Bread & Circus in Boston, and I bagged groceries. And that job led to another job in food, and then another job in food, and another job in food. I had no interest in working in food. I like to eat food. I like to do PR for food, but I didn’t actually want to work in food. And so with my kids, I’ve always been very specific in saying, “Listen, if you get a job, you need to get a job that is furthering your progress towards your goals, whatever you’re interested in doing.”

And so my daughter was interested in advertising, marketing, and a little bit of interior design. Those were kind of the things that got her excited about getting up every morning. And so I was like, “Listen, you don’t have any plans for this summer. Instead of going back and working at Nordstrom,” which she had done for two years in retail, which I think is a great experience for anybody because it really gets you comfortable with talking to people, and sales, and communicating, and this and that—so kind of associated to her interests, I was like, “Why don’t you come and work for my social media team? It’s creative. They’re a great group of people. You’ll get to create content, which is along that kind of advertising space, and it’s all about marketing and stuff.”

And so she came on board last summer. And you know, for me, it was great. It was nice to have my daughter there. But there are definitely some things that she got away with that I think that I would never let another employee do.

Loren Feldman:
Such as?

Sarah Segal:
Well, you know… [Laughter] Okay, so my social media lead, I was always, always telling her. I was like, “Listen, yell at my kid.” Make sure that they do that. She’s like, “I’m not gonna yell at the boss’s daughter. Like, that’s not gonna happen.” So she didn’t get the same level of direction, I think, or guardrails that other people did. But she did her job and she did it well. But, yeah, there would be times that I would find her in a room with her shoes off, her feet up on a couch, and I swear to God, I almost caught her napping at one point. And I’m like, if I had an employee do that, I don’t know. I mean, first time, probably I’d be like, “Yeah, maybe you need to go home and come back refreshed.”

But you know, she took liberties with me, and she’s my kid. And when your kids are so used to you, they don’t listen to anything that you say. You can slap them as hard as you want on their wrist, and they’re just gonna be like, “Whatever, mom,” and then move on. But I think she did have a great experience. She did decide to refocus her major on interior design. And so this year, she’s actually interning for a home furnishings company, and she’s really enjoying it. And I think that she’s getting a little bit of a reality check, in terms of expectations. So that was my kind of foray into having a child work for me.

Loren Feldman:
Were you disappointed that that good experience didn’t lead to increased interest in what you do?

Sarah Segal:
Oh, whether or not she’d take over my business someday?

Loren Feldman:
Or even pursue it as a career with the possibility of working for you and maybe even taking over?

Sarah Segal:
Yeah, I mean, honestly, that would have been fun. Like, that would have been absolutely fun. And I probably would have encouraged her to go work for some other agencies and then come back, because I think that it’s good to kind of check out what’s out there. I feel like I run a pretty good office, where people are rewarded for good work. They’re encouraged. There’s a real sense of team mentality here, and it’s a good vibe. But you don’t know how good it is until you’ve experienced something else.

So regardless of whether or not I’d want her to take over the business—and she may still someday. I mean, she may decide that, “Hey, you know what?” I mean, I was an international relations major in college. Like, I completely changed what I wanted to do when I graduated. So there’s still time. And I don’t know that she would love it, though. She sees what I do as boring. [Laughter] Because I sit at a computer and this and that, and she likes going out. And we have events and content creation and that stuff, and she loves that stuff. But my son, he’s the same way. He thinks what my husband and I do is boring and we’re in the creative field, but like, you guys sit at desks and look at computers too much. They don’t want to do that.

They want to do something that’s tactile and in person and moving. My son wants to either be an NFL player or work in football. And then my daughter wants to do home furnishings, work in terms of design and creating spaces and this and that. I think they’ve seen us look at our screens too much, where they’re gonna go in a different direction. So I think it was nice for her to see my—I think she was impressed by me. It gave me a little bit of validity, in terms of what I do. But I don’t think I’m disappointed that she won’t follow through. I mean, it’d be easier, for sure, but I don’t think it’s going to be my reality.

Loren Feldman:
If it were, do you think you learned something from that one summer’s experience and would be able to handle the placement of guidelines and that kind of thing a little better on a second chance?

Sarah Segal:
I think that’s hard with your own kid. Like, they know you too well. They know that you may yell at them, but you’re still gonna give them a hug at the end of the day. I think having your own kid work for you is difficult. Again, I think that they have to go work for someone else first.

Loren Feldman:
Jaci, when you started your business, I’m not sure you realized you were starting a family business, but I think from what you’ve told us in the past, that’s kind of where you’ve landed. How have you dealt with this issue of having to treat offspring as an employee?

Jaci Russo:
So I grew up watching a family business and answering phones at a family real estate company and napping on the job when I had weekend duty. [Laughter] So I knew firsthand—

Loren Feldman:
You know, naps are a very good thing, very healthy. A lot of people recommend them.

Jaci Russo:
And so, no, I never thought I was starting a business, Loren. I was just going to be a freelance media buyer. So everything that’s happened for the past 26 years is just me saying yes and figuring out how to make it work. So, I became unemployed February 1, 2001. So that was my first day as a freelance media buyer. I’m eight months pregnant, due to have a baby in three weeks, and she ended up waiting until the middle of March. And so five months in, Michael is doing more work for me than the real agency that he—and I say real agency, because, again, I’m a media buyer working out of my house, technically working out of the nursery while I breastfed a child.

And so, then Michael’s like, “I can’t keep doing two full-time jobs.” And so all of a sudden we became a family business, because he was employee number two. And so that continued until the aforementioned toddler—and the one I was pregnant with when we started, and then the one that followed, and the one that followed, you know, four kids in four years—they got into high school and wanted money. And there’s no free rides at the Russo house. So you want money? You’re gonna do chores to earn it, which meant they needed to get summer jobs somewhere, and because of their athletic schedules and camp schedules and all the rest of their busy lives, it really wasn’t going to be as easy for them to work somewhere else as it would be to work here.

Eventually, every one of them, at some point, had to go apply and interview with strangers and get jobs on their own, because I think that’s an important part of the development process. But in the meantime, I had odd jobs, and they are odd people. So it was a good match. [Laughter] Thank you. I paused for the required laugh. But it was things like scanning our photos. So I have these plastic tubs of photos that we printed out before we had digital cameras, or at least before we had iPhones, and I wanted to make sure I had a preserved copy of those online. And so one summer, one Russo kid spent the entire summer with a scanner scanning photos into a Google Photo folder.

One summer, I had a kid with a scanner and a shredder go through and scan all of our paper records, because I had decided we were gonna go completely paperless, and I wanted every filing cabinet gone by fall. And so they went through and scanned every document and then shredded them. So I made them do those jobs early on, because they were menial tasks. I wasn’t going to waste a real employee’s time, and it was a way for them to make money and learn some office protocol, being on time, dressing appropriately, acting appropriately. And so I think that was our good start.

Sarah Segal:
Did they do that right away? Or did they know enough to dress appropriately, show up on time, say please and thank you? Did they know all that, or was there a learning curve?

Jaci Russo:
Well, there was an orientation at home before they went into their orientation at work. Jackson, the oldest, he transferred schools in fifth grade, and his new school was five blocks from the office. And so, once a week, I would walk to the school, meet him. We would walk back to the office, rain or shine, stop at Subway. He’d get a 12-inch meatball sub and sit and do homework. And it was a scheduling thing, because I couldn’t go pick him up. And the girls had activities like dance class or whatever on those days, and so the babysitter was driving the girls. So it was a way for scheduling. It was also some of my favorite memories.

And they would come after school or in between activities, or we have a half an hour between this and that, so I’m gonna run by and take care of some emails real quick, whatever it might be. So the office wasn’t foreign to them, and the people who worked here knew my kids, and they heard stories of people who showed up for interviews with their mom in the lobby, of showing up wearing booty shorts and halter tops to interview for a professional job, and typos in resumes. So that was dinner conversation. They know more about logos than most third-year college graphic design students, because they grew up around the business and they grew up with us talking about the business. They heard the horror stories of the people who weren’t professional. So that seeped in, just some osmosis.

But for sure, they went through some training, of, “You will be first fired, if you don’t follow these protocols. You can’t come back here. Therefore you can’t make the money you want to make for whatever the thing is that you’re saving up to buy.” And so I think that helped. But then they also went through our standard orientation that just employees go through. They had to read the handbook and sign off on it, and they had to do all the things. So they were treated pretty much like a regular employee. The last name probably was a weight, not a step stool.

Loren Feldman:
Did you run into situations similar to what Sarah described, where you knew they weren’t being treated by other people in the company as a normal employee?

Jaci Russo:
I observed a few things here and there where an employee might have been maybe a little harder on them than they would have been on a regular intern. And I let it go, because they need to figure that stuff out. There were definitely some times when the kids took liberties. You know, they rode to work with me. And I had to stop on the way, so therefore they were late, but they weren’t in trouble because they were riding with me.

So, Michael, who is absolutely—and I say this with no ego or inflated pride—one of the best Photoshop artists I think exists in the country. He’s incredibly gifted at what he does. He is amazingly hard working. I have never been frustrated by the amount of time that he works at our business. How could I be mad about that? But as a wife and mother, we have definitely missed him because of how much time and dedication that he puts into his career. So they’ve heard that. They’ve heard that, you know, “Where’s Dad?” “He’s at the office.” “It’s nine o’clock at night.” “Yeah, but he had to work on this client project thing.”

The five of us also became aware at some point that he basically set up a bachelor pad here, and really came to the office to get away from us, but that’s a different podcast [episode] for a different day. [Laughter] But so there’s a balance there, right? There’s both things. I would flee a house with me and four kids under the age of five, too. So there’s no guilt there for him.

Loren Feldman:
You can’t all flee.

Jaci Russo:
Right, right. Otherwise, the five-year-old’s raising his three sisters. But so that also comes with the artist mentality of: He’s incredibly motivated by deadlines. And therefore, every job becomes a last-minute job. And he has a loose relationship with deadlines. And so the children grew up hearing that, again, around the dinner table—and in some probably louder than necessary volume of talks at home. And that meant that they knew that it’s not tolerated by me for him, it would not be tolerated by me for them. And so I would say that, because there was so much pre-training, we were able to avoid a lot of those challenges, because we prepped them ahead of time. I think whether we meant to or not, it happened.

Loren Feldman:
So you’ve gone way beyond that now, and you do have a kid who’s in the business who is serious about making a career of it. Correct?

Jaci Russo:
That is correct, and that was not what any of us expected. Early on, I think Michael and I both, to each other, identified that our oldest—our only son, Jackson—was incredibly inclined to be successful in this business. He had the best of me and the best of Michael, and had the potential to be really great at it. At that time, he is a high school football/baseball star. You know, three-time state champion, four-time state MVP, just an excellent, outstanding athlete.

And although I don’t ever remember him talking about going pro as a player, I do distinctly recall years of conversations around his future: doing marketing for a sports team, or being a sports agent, or being a manager, whether that’s a manager of a team or manager of a player, like a business manager. And so it was all going to be geared around sports.

And Michael was the one who regularly—you know, Jackson would write a really great paper that would win some big award. And Michael would be like, “You know, that’s what I do. I write just like that. You could write.” I’m like, “Hey, stop. Do not, for the next six years”—because Jackson, at this point, was nearing the end of high school. I said, “For the next six years, don’t talk about him working for us or with us or at the agency. If we stand a chance in hell of getting him to come work for us, which we both would love to happen, we cannot talk about it. We cannot act like it. We cannot prep him for it. We will push him away.” It was very hard for Michael to resist the urge. He’s like, “No, if I just—” I’m like, “No, no. Don’t talk about it. This is like Fight Club.”

Sarah Segal:
No, no. I think that you’re right. I don’t want to speak for everybody, but I think it’d be nice to see your kid wanting to come work in your business. It’s validation, in a way. But I think that if you’re pressuring your kids to work for you, they’re gonna run in the opposite direction.

Jaci Russo:
Yes. Yes! I mean, did we learn nothing as parents? You know, if I want my kid to study, I can’t say, “Go study.” That’s never gonna work. And so, Michael got on board, and I told him, I said, “Listen, it really works out well for us either way. We don’t talk about it. He comes by it naturally, and then it’s his idea, and he wants to do it. And we win. Or it never manifests, and we’re able to sell it to a stranger for retirement money. We win either way. So just pump the brakes. Talk to me about it when he’s not around. Don’t talk to him about it.”

He goes away to school. He plays baseball for his undergrad, sticks around to get his MBA and plays a fifth year because of the whole Covid year—college athletes got an extra year of eligibility—and we, I don’t think, missed a game. We went to every home game. It was about three and a half hours away from us, and even some away games that were within a driving range, maybe even flown once or twice. But so we got to watch our kid play college ball for five years, and that is a gift. Oh my gosh. And he eventually kind of started moving away from, “I’m going to do marketing for a sports franchise,” and eventually moved away from, “I’m going to be a sports agent.”

And then it was the great unknown for maybe a semester or two. And then the pursuit of his MBA became, “I’m going to be in business, and I’m going to maybe work in marketing.” “Michael, don’t say a word!” [Laughter] And so we just let that unfurl as it was gonna, and so after school at Millsaps—which is in Jackson, Mississippi—he moved with his college teammate, and at that point, roommate, to Nashville and got a job at an ad agency.

And again, if we can all manage to just keep our mouths shut and let this work itself out—and it did, as if we had written the plan. So he works there for two years for another agency, and learned from other people things that he liked and didn’t like about the business. Having worked at our agency in the summers, it was amazing for him to be able to come back and say, “They don’t do this the way y’all do. The way y’all do it is so much better. They don’t do that.”

Sarah Segal:
Did he bring back anything that they did that you didn’t do, where you’re like, “Oh, let’s use that as info and change the way that we do things?” That’s what I hope for.

Jaci Russo:
That’s what I wanted. And I actually would have even encouraged him to go to one more agency before. Like, if I was writing the book, that would have been my dream. No, at this point in the timeline, we’re a 20-year-old company, and he’s working for a five-year-old company, and it is primarily, being based in Nashville, they work with all musicians, and the estates of musicians, and it’s run by two artists, and so it did not have the—

Sarah Segal:
Sophistication.

Jaci Russo:
Yeah. They had not scaled. They’re much smaller. Most of their employees were freelance. I mean, they weren’t doing branding like we were, and it wasn’t business-minded like we are.

Sarah Segal:
Well, we just hired a VP, and I keep asking him, I’m like, “Are there things that you used to do that we should do here? Like, give us better systems.” And so far, I’ve got nothing, which is disappointing, because I’m always looking for better ways to do things. But at least he came back and was like, “Yeah, you got your shit together.” Which is kind of flattering.

Jaci Russo:
Well, and that was the thing. So he’s gonna leave this agency after two years. He’s gotten some offers to stay in Nashville, go to Atlanta. And I said, “Michael, now’s the time. You’ve had this pent-up topic for five years. I set you free. I release you. Now you can go have the conversation, because we’ve got a position.” And so this is like the stars aligning.

And so we interviewed him, just like we would interview anybody else. And he went through our peer interviews, just like anybody else would. And he applied. And we put him on the front desk, which is the lowest-level position here. It is jack of all trades, master of none. It is bottom tier. It’s running errands. It’s weekly restocking of the kitchen. It’s managing the building. It’s everybody’s office supply lackey, and you’re in charge of the agency’s marketing. Because the agency has to be your first client, and if you run the agency’s marketing right, then you get trained to do client work.

Sarah Segal:
Ah, that’s awesome that you did that.

Jaci Russo:
Well, it’s a way to learn the systems and the processes and the expectations. We get a sense of how you handle those responsibilities. You get a sense of where the opportunities and the frustrations are. And I don’t believe that the agency should be treated like a cobbler’s kid, and so I don’t want us to be last. There’s one person dedicated to it.

Sarah Segal:
Yeah, but here’s the thing: You’re highlighting my mistake, because I didn’t treat my kid like another employee. I didn’t make her apply for the internship. I didn’t make her go through the handbook and all that kind of stuff. You did that. And if I’m expecting my team to treat her just like another intern or employee, I need to do that, too. So it’s just food for thought. You know, I align with you, in terms of not ever bringing it up. Like, if she knocks on the door, yeah, absolutely have the conversation again. But if she comes back, I totally would follow in your footsteps and be like, “Yep, well, you’ve got to apply for the job and go through the interview process.”

Jaci Russo:
Yeah, and know that whatever happens, you may not get the job. Like I said, “Go on the interviews in Nashville and Atlanta. Because if this doesn’t work out, I don’t want you to be jobless.” And then I let Michael start talking to him about legacy. And you know, “If you want to move home and build a life here, this is the best job you’re going to get in Lafayette, in terms of being perfect for you. And you don’t have to start at zero like we did. You’ll get to take over at year 30, where it’s already a built business, and you can now bring what you know about business and scale it.”

And so then it was a lot of aspirational thinking, and I think that got him really excited. But no, he took a pay cut, and definitely an ego cut, and he started at the bottom and has worked his way up. Now, he’s had some promotions along the way, and he’s got his own client roster now, and he’s got an office. But he’s earned that, and the team has seen him earn that. And I thought that was really important, that they didn’t feel like it got handed to him on a platter.

Loren Feldman:
Has that always gone well with the other employees? There was never an issue of resentment or anything?

Jaci Russo:
I don’t think so. No one else wanted the first job he had, and no one wants that job. That job churns every eight months to a year—by design. I mean no one’s gonna stay there forever. You’re going to come in and do well and get promoted up, or you’re going to come in and not do well and be escorted out. And so they all saw him out sweeping the front of the building and changing toilet paper and emptying the dehumidifier and doing all those menial tasks. And I think that was good.

People give him a harder time than they would probably give another co-worker every once in a while, all in the good-natured fun, joshing around. You know, “I’m just teasing.” But I see them giving it to him harder, maybe, than they would give to somebody else. But he also dishes it. [Laughter] So I can’t tell if that’s just he’s asked for it and he’s getting it back or what. Because he can kind of be a dick. [Laughter] Sorry, Loren, did I just lose you your G rating?

Loren Feldman:
No, no, you’re okay. I was about to ask you, if you thought he wasn’t performing well, you would be able to admit that to yourself and deal with it. But, based on that comment, I suspect you could.

Jaci Russo:
Oh, yeah, no. I have a weekly with every department, and I have a one-on-one weekly with him, so that he is getting not just the opportunity to get real world Information he needs for the work he’s doing right now, but the training to take over. I started the agency when I was 30, and I expect him to take over when he’s 30. So I’ve got four years still. I mean, we’re a couple in already, but I’ve got four years left.

Loren Feldman:
Is that all on the table? Have you talked that through?

Jaci Russo:
Oh, absolutely, everybody knows it. He and I’ve talked about it. What that means, we haven’t figured out yet. So I listen to every one of your podcast [episodes], and every Founding Members group, when we talk about ESOPs, and we talk about sales, and we talk about—because every time I think I know what that structure is going to be, a week later, I think I’m wrong. And so what I know is: I don’t need to know yet.

So I’m continuing to do my job of building out a completely scalable business that I am not an integral part of in any way, so that when the time is right, I physically am not going to be blocking us from opportunity. And then we can figure out whatever the structure of the transition will be when that time is right.

Loren Feldman:
Do you imagine him taking over and you departing or continuing to work at the business?

Jaci Russo:
Today’s answer—and again, ask me in an hour and it might be different—is that I would be the chairman. He would take over as the CEO or president. The title doesn’t really matter, but he would take over day-to-day operations, and I would serve as almost like a board advisory role. So I’m around, but I’m not expected to be here every day.

Loren Feldman:
I like that job.

Jacci Russo
Me, too. That, to me, might be the best of all the worlds, because for the first year, I was just dead set on: We’re going to sell to him, and he’s going to go get financed, or an investor, or whatever. And he’s going to buy it.

And then I thought: Why am I gonna saddle him with debt? We’ve managed to run this whole thing for 30 years without getting a bank loan. So why am I gonna push that on him? That seems awful. So then I was like: Okay, well, owner-financed. But I was like, “Maybe I’ll just keep my same salary. Well, if I’m keeping my salary, I’m gonna need to keep a position.” So that’s how I circle this drain all the time.

Sarah Segal:
Question: what happens if he takes over and he does a bad job?

Jaci Russo:
We’ve talked about that, and so I told Michael, “We need to be saving as if this doesn’t work.” [Laughter] Which we have been. I mean, we’ve been very good about that over the years. And a couple times I’ve had to dip into that when we had low years, and that’s how we were able to avoid having to go get investors or whatever. But so, what would that look like? I think that’s why Michael feels comfortable with this version of where I’m still involved.

Loren Feldman:
Has Jackson gotten interested in the possible structures for this succession, whether it’s ESOP or something else, or having an owner-financed deal or an investor deal, or some other form?

Jaci Russo:
He hasn’t. I think that he feels like it’s still so far away. You know, four years at 55 is five minutes away. Four years at 25 is decades.

Loren Feldman:
Yeah. He’ll learn.

Jaci Russo:
Yeah, exactly, exactly. I mean, I have some more goals to check off before we get there. And so I feel this sense of weight, because I want us to be at certain places, in terms of our size and our growth and our pipeline and our stability, and I have some metrics I need to check. And then I’m gonna feel better about whatever path we choose, because I know that what I’m handing over is exactly where it needs to be, and we’re not there yet. I mean, we’re on the way, but we’re not where I want us to be.

Loren Feldman:
Are you and Michael still on the same page, as far as most or all of this?

Jaci Russo:
You know, we went to the Edward Lowe Foundation last year for a program that they call the entrepreneur in residence. This program was very different from all the other times I’d been up there, because it is three days of no programming. So, they house you in these different—there’s 34 structures on this 2,000-plus acre property. It’s gorgeous, in lower Michigan, and they feed you. There’s an entire kitchen crew that creates these amazing, very healthy but so tasty breakfasts, lunches, and dinners. But otherwise, your job is to think about your next evolution. Think about your next chapter.

And so it’s just entrepreneurs, eight of us. So it’s a small group. We only see each other at mealtime, and then after dinner, there’s usually a fire pit and beverages, and people sit around and share war stories and commiserate. It’s really fantastic. And so Michael and I went up. We got to go together, since we co-run and co-own the agency. We went up together last year, and we sat down to start our first session of just the two of us with a workbook they give you to kind of guide you through the process. And I said, “My goal for the next three days is to figure out what my exit looks like and to help you be okay with it.” And he said, “Exit from what? Like our marriage?” [Laughter]

I was like, “No, no, from work.” And he was like, “What do you mean work?” I said, “Would it have been easier for you if I’d said marriage?” He goes, “I think so.” And I was like, “Okay, well, I’m not exiting either of us in our lives, but I am not going to run the agency forever. I mean, I won’t live forever. And so we need a plan—a real plan—not like, “Here’s where the bank records are.” Like a real plan for continuation and evolution, elevation.” And so we spent three days hashing it out. And what we finally came down to was, I’m allowed—in the year 2030, when the agency is 30 years old—to transition to whatever my next step is going to be. And he gets to stay, if that’s his choice. I’ve never had an issue with that. But he can’t be mad or frustrated or try to prevent me from what my path is.

I was like, “You don’t have to go, but you can’t make me stay.” And so I think, finally, we kind of hammered out something that works for both of us, in terms of how that will work, but that’s his big concern. You know, he has, probably, over-inflated faith in me, because I don’t think our success of the past 26 years is solely on me. I think I helped drive it. I helped facilitate it. I’ve helped to nurture it. But I am one of many, and it has truly been a team. And I think other people can lead that team, and I know that, because there’s 84,000 agencies, and I only run one of them.

Loren Feldman:
Well, we’ll probably keep talking about this as time goes on, I suspect. I’ll be eager to hear how you sort out the remaining details and what Jackson thinks of all this, which obviously will become increasingly important.

I want to talk about something else, especially with the two of you. I recently highlighted a story in the Morning Report that suggested that if you are in San Francisco or Silicon Valley, you should just assume that everything you say is being recorded. And that’s because so many people are wearing AI devices—pendants or bracelets, whatever—and pretty much no one asks for consent, even though technically that’s the law in many states, including California. So I’d love to hear your take on this. Sarah, you are based in San Francisco, and I believe you have one of those bracelets. Am I right?

Sarah Segal:
I do. So, just so you know, there’s a reason why I wanted these bracelets. So I’m an auditory learner. My main news source is podcasts, radio, listening to people. That’s how I learn. And so if I’m taking notes, then I’m not really listening to the person who’s talking to me. So I, like everybody else, was served up an Instagram post about this bracelet that doesn’t record you. It transcribes your interactions. And then it takes those transcriptions, and then it uses AI to kind of consolidate the findings from it. And then you can connect it to your notes app and select to add things to your to do list, which has been fantastic for me. Because I am not always in a position where I can sit there and take notes, or want to take notes. I want to sit there and have a conversation and really engage with the person.

Now, as far as telling people that, yes, there are laws about two-party consent states, in terms of recordings, but technically, this is not recording. This is transcribing. So, to me, it’s a little bit of a gray area. I would love for somebody to chime in and tell me that I need to go and tell people that I’m wearing a bracelet. I mention it if somebody asks, or I’ll offer it up and be like, “Yeah, I use this. I have this bracelet that just helps me remember everything,” and most people are curious about it. But, you know, there’s a lot of concern. Like, is Google listening to you? Is your phone listening to you? Are all these devices in your house listening to you?

I don’t personally care, and I think maybe it’s because I’m in the San Francisco Bay Area. Because my life is not that interesting, where I have any concern about trade secrets or something like that. So, I’m personally fine with it. I have not encountered anybody who would not be okay with it, but I’m sure they’re out there. So I’m just kind of riding the wave of it being a gray area right now, and we’ll see how it goes.

Loren Feldman:
How widespread is the use in San Francisco?

Sarah Segal:
This particular item, it’s a startup, so I don’t know that they have a huge distribution yet.

Loren Feldman:
But there are lots of other devices, including glasses and other things.

Sarah Segal:
Yeah, yeah, yeah. I think that you see more of it on social media than it’s actually in real life. You know, people are not walking around with the Ray Bans on and stuff too often. And if they are, they’ll probably be severely mocked by everybody else. It takes a while, but yeah, we’re a community of early adopters. That’s for sure. People come to visit San Francisco, and they’re like, “Ah!” So freaked out about Waymos. Like, they’re just kind of part of the landscape here now. So new technology is so easily adopted, I think, around here that nobody bats an eye.

Loren Feldman:
Jaci, do you have one of these bracelets?

Jaci Russo:
I do not. Sarah showed it to me when we were all up at Ann Arbor at the 21 Hats conference, and I immediately had FOMO and ordered one. But it’s been on backorder, because they sold out so fast. I will get one. I will wear it, and I don’t understand the problem with recording people. You know, we are in, out, and about, and every business has cameras. I mean, my gosh, how many times a day do you see the shoplifting videos from the local store pop up? You know, I have a—

Sarah Segal:
Traffic cameras.

Jaci Russo:
Oh, traffic cameras, sidewalk cameras, apparently at Coldplay concerts. [Laughter] I mean, everything is being recorded and broadcast. I have a smart home, against Michael’s wishes. When we did our big remodel after Covid, we went all in. And so every appliance and light and everything is voice-activated and -operated. We have switches, too, but I honestly can’t tell you the last time I touched a light switch at my home or my office. I drive a Tesla, so I’m all in on the tech.

I am an early adopter, and I love it. And so I love that we record every meeting, and I’m able to use those notes. Much like Sarah, I’m an auditory learner. I do find that I learn better when I am taking notes, though, so I’ve kind of got both sides of that. And now, having a completely recorded transcription of every meeting that I’m in every day. It is the greatest gift to me to go back and see what I said or didn’t say, to take those transcripts. I’ve built out a GPT tool that analyzes my performance in a meeting based on this set of criteria. And so every meeting, I plug it in and find out: What questions did I not ask? What things did they say that I missed? And it’s training me to be a better salesperson. And that’s based on the advice that we got from you, Loren, in the 21 Hats Morning Report from Alan [Pentz]. It’s brilliant.

Loren Feldman:
I can see that with the meetings, although I have some questions about that, too. The bracelet feels like a different animal to me. Sarah, it must be an incredible amount of data. Is that thing on all the time, anytime you start talking, the light blinks, and it’s recording?

Sarah Segal:
No, no, no.

Loren Feldman:
I mean it’s not recording. I take your point. I understand.

Sarah Segal:
It needs to be within spitting distance of your phone, and there’s one button on it. One push of the button, it’s on, and one push of the button, it’s off. So you can pause its transcription. I’m going to keep correcting you: It is not recording. It is transcribed. You can pause the transcription.

So, for example, I go to an event that’s very loud, and there’s no way I’m gonna be able to get anything. I turn it off. I pause it. I don’t want that garbly gook. Or I’m listening to a podcast in the car on my way to work. I don’t have it on. What I do have it on is like, say, I went and met with a potential client the other day, and we sat down. And it was just a very casual conversation, and my colleague was trying to take notes and stuff like that, but I knew that I had this on there, so I could always go back to it.

I have a question for you. So Jaci, you record your client calls and your other calls, which is great. And it sounds like you do go back and look at them. I used to. I used to have that set up on my computer where it pops up in the Google Meet or the Zoom that you’re recording. And I had that for a while. I found that people were a little bit more hesitant about that, just because it was recording the conversation. I also found that I didn’t necessarily go back and review those or leverage those like I thought I would. I think that they just go into cyberspace. I personally didn’t have a lot of value with those. To me, it was just too much acquisition of detail.

Say I’m doing a quick touch base with a team member on a client, I’ll turn it on. My whole team knows I have it. I’ll turn it on. As I’m writing my to do list and confirming with them, I have a secondary list. I’m not going to sit there and record our conversation, so I prefer it over the recordings generated from video calls. That said, I have worked with people who will do that initial input call from a potential client on recording, and then they’ll take the recording to better detail their proposal to them. I tend to rely heavily on my notes for those calls. And also, when we have client calls, one team member is always manually taking notes during the call, just doing bullet points. It’s usually the most junior level person on the team, but we all have the agenda open. And we’re watching them take notes so that we know that what’s being recorded is the most important—because there’s a lot of garbly goop that just doesn’t need to be recorded.

Loren Feldman:
I’m trying to understand why you would wear the bracelet for certain conversations, but not use the note taker for client meetings.

Sarah Segal:
Well, I have somebody taking notes during the client meetings in an agenda that I can easily go back to. It’s too much information. If you’re recording an entire—I mean, yes, there’s a lot that AI consolidates it down for you, but it’s gonna miss stuff. You know, like all this technology, it’s great, but it’s not perfect.

Loren Feldman:
Well, your person is not going to be perfect either, presumably.

Sarah Segal:
No, but we’re all looking at the agenda, watching them take notes. What usually happens is, we’re watching the junior-level person take notes, and then the client says something, and you’ll see all of the people’s cursors jump over and they’ll, like, correct the spelling on somebody’s name. Like, we’re all kind of using this. Okay, they’re taking notes, but we’re adding to it as we go. So it’s more like team note taking, almost. And to me, we’re all hearing the same thing. We’re all saying, “Okay, this is something that we need to do,” as opposed to getting overloaded with too much transcription.

Loren Feldman:
Jaci, do you feel overloaded?

Jaci Russo:
Well, we use Read AI, or we have been using Read AI. I don’t imagine that we will continue. I think our next renewal, we’re going to make a switch, probably to Granola, for a series of reasons. If you want to get into tools, we can do a whole episode just on that. So they all live in Read AI and in Google, because they are automatically ported over. So I use them for to do’s. It’ll tell me, “Hey, you need to do this. You can do that.” I use it for coaching. When I talk too fast, it thinks I’m not engaged enough. So there’s plenty of opportunities where I feel like I’ve improved based on that. I use it for understanding what—so to take those notes and turn it into a proposal.

It’s a lot of new business stuff in my consulting work, because the team isn’t backing me in the consulting work. That’s just me. And so it’s great to have those recordings and to use that when I’m building out the best practice guidelines, when I’m doing the social media reviews. I might miss that they said that, you know, the CEO’s LinkedIn is great, but the company is only okay. I may flip that when I’m writing notes or not fully understood the importance of that. Well, Read AI heard it, and so they’ll do a deep dive. That, plus ChatGPT or Perplexity or Claude, depending on what I’m using at the time. We’ll do a deep dive into what’s wrong with their LinkedIn. How should it be better?

Loren Feldman:
Jaci, you mentioned Granola. Granola was referred to in that story because it can kind of operate in stealth mode. Unlike most note-takers, which show up on the screen and everybody knows they’re there, Granola works locally on your own computer, so people don’t necessarily know unless you tell them. Do you think you’ll tell them if you’re using Granola?

Jaci Russo:
I don’t mind that. I’m all about disclosure. I want people to be happy. I actually like Granola, as opposed to Read AI, because of cost. It’s about half the price. And I don’t think that Read is giving me twice the tool, since it’s twice the price. So that’s where I’m thinking about making the switch. I am fine that it shows up in the Zoom meeting, and people know it’s there. I think we need to have an established protocol, so let me get to that overall point. I think that we should, just as a people, accept that everything’s recording all the time and not be so worried about it. Because everything is recording all the time.

Sarah Segal:
I’m looking at Granola, and it’s saying it transcribes your computer’s audio.

Jaci Russo:
Right. Right.

Sarah Segal:
It doesn’t record it. So again, it’s not doing the recording, but here’s a thing: I was reading about this the other day. Have you added any disclaimers or how you use AI as a marketing agency to your website? Because I’ve read a lot about companies doing that where they explain how they use AI. I mean, is this something that you’d ever put on your website? Like, say, “We use these tools to improve our productivity, blah, blah, blah,” that kind of thing?

Jaci Russo:
I mean, I didn’t feel the need to do it when we started using Adobe and Photoshop or different video editing tools. I mean, we’re not still splicing film by hand like they did in the 80s. [Laughter] I can, if everybody thinks it’s necessary. It won’t bother me to do that, but I feel like we should not upload—and we have an office policy to not upload confidential documents into it: our own or our clients’. We aren’t using it in place of people. We’re using it to help the people be more efficient and smarter, and that’s my job, is to go use every tool. I mean, I can’t imagine that anybody would need me to detail that we don’t keep our prospects in a Rolodex with file cards that spin around at a flip. They would be hopeful that we would use Salesforce and MailChimp and all the things. So to me, this is just another evolution of technology.

Sarah Segal:
But here’s one thing I want to add: I can tell you that I’ve been on many, many, many calls recently where people haven’t shown up to the call, but their note taker does, and the call organizer will kick out the note taker.

Jaci Russo:
Absolutely. As they should.

Sarah Segal:
If you don’t show up, you don’t get to hear the stuff, and you don’t get to use your note taker to do your job for you. And so I think what Jaci was saying is that AI should not be a replacement, or a substitution, for human interaction. It should be something that enhances what we do.

Loren Feldman:
Why do you draw the line there?

Sarah Segal:
It’s cheating. Like, I’m sorry. [Laughter]

Loren Feldman:
Maybe a higher-level person isn’t really required to be in this meeting. The lower-level people can handle it, but the higher level person would like to be aware of what’s going on.

Jaci Russo:
Then they should show up.

Sarah Segal:
Well, then they should require the lower-level people to keep them in the loop.

Loren Feldman:
So Sarah, when we were in Ann Arbor and having our peer group conversations, was your bracelet taking notes?

Sarah Segal:
It was—to a limit, though, because our peer groups were pretty large. Like, it’s only so good. It’s better for, like, more intimate conversations.

Loren Feldman:
We had 25 people, roughly, in a fairly large room, so it couldn’t hear across the room, maybe? Is that what you’re saying?

Sarah Segal:
Yeah, it gave me, you know, reports that were, like, the gist of it. I can send them to you so you can take a look at it. But it gave me the gist of what was discussed. And sometimes what I’ll do for me is I’ll talk to it. Like, I’ll be driving in my car, and I’ll be like, “Remind me to call my son’s teacher,” or something like that. And I’ll just talk to it, and it will add that to it and give me a report at the end of the day, and then I’ll put it into my to do’s. So it’s also just a way for me to remember the things that pop in my head, because I I have a lot of things that pop in my head throughout the day. So some of those circumstances, it’s not going to give me takeaways that are useful, but it was fun to give it a go.

Loren Feldman:
I think it’s something I need to think about, because I do sometimes promise people that what is said here will stay here, whether it’s a virtual room or a physical room, and this adds a complication to that that I don’t know if it’ll matter to people or not. But if somebody is talking about the performance of their business, it might matter to them.

Jaci Russo:
It might.

Loren Feldman:
Something to think about. My thanks to Jaci Russo and Sarah Segal.