Episode 24: Doomsday Fatigue

Guests:

Jay Goltz is founder and CEO of Artists Frame Service and Jayson Home.

Producer:

Jess Thoubboron is founder of Blank Word Productions.

Episode Highlights:

Jay Goltz: “I realized that at this stage of my career, I need to make more money less than I need to [not] lose money.”

Jay Goltz: “You don’t go broke because you have bank debt. You go broke because you run out of cash. I’d rather have the cash., I can always pay it back.”

Jay Goltz: “I’ve said that there’s a thin line between visionary and delusional, and I’ve certainly been on both sides of that.”

Full Episode Transcript:

Loren Feldman:
First of all, I just want to point out that you and I have known each other for a long time, definitely more than 10 years, maybe 14. We met at Inc Magazine, and when I went to The New York Times, you came along and you were my lead blogger. We must have worked together on hundreds of blog posts, so I feel like I’ve had a pretty good window into the way you think, the way you run your business. And yet, you took me by surprise when we taped last week’s episode. I asked you a question that seemed to trigger you a little bit.

The question was: If you knew that we were going to go into another shutdown, would you be doing anything differently right now? We’ve had a chance to think about it over the past week, we’ve talked about it a little bit. Can you tell me now what was it about that question that got to you?

Jay Goltz:
So in hindsight, yeah, it took me a few minutes talking to you to go, “Okay, fair enough.” But I do know myself well enough to know what happened. My nerves were a little shot. It’s been 15 weeks. After that, I did consult a doctor. I talked to Dr. Nick Riviera. And he says—

Loren Feldman:
Wait. Where do I know that name from?

Jay Goltz:
He does a lot of TV work on The Simpsons. He diagnosed it as “doomsday fatigue” that I have.

Loren Feldman:
Is that a real phrase from The Simpsons?

Jay Goltz:
No, I just made that one up. But I have doomsday fatigue. I’ve gotta tell you…

Loren Feldman:
What is that?

Jay Goltz:
I’m just a little worn out. You watch TV, and like all they want to do is get the headlines. Here’s an example. They go, “This is the highest unemployment since the Depression.” You shut the businesses down! How could it not be the highest? I mean, one thing has nothing to do with the other.

Loren Feldman:
We’re gonna talk about this. I don’t know if we want to dive into it right now.

Jay Goltz:
Okay, but the point is, everything is doomsday. “Oh my God, this isn’t gonna recover for five years.” And I think, just hearing about “if it comes back,” it’s like, we don’t know that it’s gonna come back. It was a fair question, I guess. But every day I’ve gotta deal with it. And then on top of that—and I hate whining, I’m not whining, I’m just saying it the way it is. We went from the pandemic, to the riots in Chicago. It’s been a challenging time to say the least.

I wouldn’t say I’m burned out, I wouldn’t say I’m stressed out. The whole thing’s disorienting. Every day, I’m dealing with new stuff like, “Who would have ever imagined?” Oh, your business is going to be shut down for 12 weeks, and you’re gonna have to figure out how to reopen and then your employees are going to be freaked out because they’re all afraid of getting sick. And then some of you are making more money sitting at home on unemployment. It’s just been a whole new game, and I’m dealing with it, and I’m navigating it, and I’m happy to say things are going nicely. We opened. Business is back but yeah, you caught me at an odd moment, and yes, I was trigger happy.

Loren Feldman:
Let’s go back to the question that triggered you. I think another way of asking it would have been—and maybe this would have been a better way—are you doing anything now that you would regret if we had to shut down again?

Jay Goltz:
Absolutely. No, no, you know what? In a calm state a week later, if you asked me that question …

Loren Feldman:
Well, I’m asking you now. Are you?

Jay Goltz:
Okay. I had an opportunity to take over another store. I thought that it was a great opportunity and I thought long and hard about it. And I said—

Loren Feldman:
We talked a little bit about it. You mentioned it on the podcast, it seemed like a tempting opportunity.

Jay Goltz:
It was, and I realized that at this stage of my career—if what I do is called a career—I need to make more money less than I need to lose money. I just decided I don’t know what’s coming in a few months.

Like I said, I’m doing nicely now. Business is back. I’m getting more headroom in my credit line. My entire career of 42 years, I’m always one step out there. I’m always just chasing the next opportunity. I made a deal with the guy: I’ll work with you to get some of your business to me, but I don’t need another store. I don’t need five more employees.

Loren Feldman:
Meaning you’re gonna pay him for access to his clients?

Jay Goltz:
Yes, and I’ll tell you the other thing I’m doing now that, frankly, your question made me think about this. I am continuing to try to get another bank line. I’ve kind of worked my way out of the cash bind. I’m okay, I really don’t need it. But I realized I’d just as soon have it, because if things get bad again, I’m going to need it.

I’ve only made one major mistake in the last couple years. I kept thinking about the phrase “dry powder,” meaning you’ve got some cash on the side. I have a building with no mortgage on it, so I always thought, “Oh, I’ve got dry powder, no problem.” Well, good luck trying to get a loan on a building when the world’s falling apart and all the banks look at you if you’re a retailer like you’re going out of business. I have been trying for three months to get a mortgage on the building, and I can’t get one. So now that things are getting better, I think I’ll be able to get a loan, and I’m going to take the loan because I’d rather have a loan and have the cash. I can always pay it back.

Loren Feldman:
That’s interesting. You know, there are a lot of people who reflexively think that taking on debt like that is the riskiest thing you can do, and you’re saying—

Jay Goltz:
This isn’t even my opinion. This is the way business works. Cash is why you go broke. You don’t go broke because you have bank debt, you go broke because you run out of cash. I’d rather have the cash, I can always pay it back. They say cash is king. Cash is king. I’d rather have another mortgage, and have the cash sitting somewhere, than need the cash and not be able to get the cash.

Loren Feldman:
So going back to that question, again, coming at it from a slightly different angle. Do you have—

Jay Goltz:
Take a different angle. Keep trying different angles until you piss me off. Go ahead.

Loren Feldman:
That’s what I’m here for.

Jay Goltz:
Go ahead. Give me your best shot.

Loren Feldman:
I know the numbers in Chicago are pretty good right now.

Jay Goltz:
Very good.

Loren Feldman:
But it’s exploding around the country. I think cases are rising in 45 states. There’s no guarantee that any place is safe from a continuation of the first wave or a second wave. So let me ask you this: Is there any question in your mind about whether you should have opened up when you did? I mean, just to put this in perspective, I don’t think this is the case for you, but with a restaurant, for example, that would be a very real concern. To reopen a restaurant, you’ve got to buy a lot of food. You’ve got to clean the place. You’ve got to rehire people. You’ve got to do all kinds of things to get ready, and then if you shut down again two weeks later—

Jay Goltz:
And people aren’t wearing masks. That’s the difference. In a restaurant, you can’t eat and have a mask on. There is more exposure there.

Loren Feldman:
Is there any question in your mind about whether it was the right thing to do to reopen, or if you have to close down again, you just have to close down again?

Jay Goltz:
A) All of my employees are wearing masks. All the customers are wearing masks. We have plastic shields everywhere and I have a person who’s cleaning up constantly. I think we’re in good shape. Something could happen, but I feel like—

Loren Feldman:
But that’s not responsive to my question. You’re talking about what you’re doing in your operation—and I’m sure you’re being as careful as you can be—but despite that, you could get a second wave in Chicago, and it could be out of your hands. You could be forced to shut down.

Jay Goltz:
I wouldn’t regret opening because there’s no downside to being open.

Loren Feldman:
You didn’t have to spend a lot of money to reopen.

Jay Goltz:
No, I’ve got the inventory. It’s not like a restaurant, where you’ve bought food and stuff. I hope that it doesn’t happen, and I will tell you, even back three or four months ago, when Karen said, “I guarantee it’s coming there,” and I kind of flipped out on that, because it’s like, “What do you mean, you ‘guarantee it’?”

Now that I’ve seen this play out, I understand where she was coming from. Until you’ve seen it, it’s truly hard to get your head around this. So, no, I’m taking it one day at a time, and I think it won’t get shut down again, but I can’t be sure of it. I’ll tell you what’s helped my head a lot. I stopped watching the news. It just makes you crazy.

Loren Feldman:
I’m so glad you said that. That’s another interesting point that I want to get at. You’ve said often, “You just can’t worry about every eventuality, every possible thing that could go wrong. You’d never be able to get out of bed in the morning, let alone build a business,” and I understand that. And yet, there’s a line somewhere, because you do need to know the facts. You need to know what’s going on.

Jay Goltz:
Okay, I lied. I watch it when I work out in the morning for a little bit. I watch half an hour, that’s it. But more than that? Just seeing the same thing, and then seeing the nonsense of people getting in large crowds without masks on.

Loren Feldman:
That’s why we’re having this problem.

Jay Goltz:
I’ll tell you what else is wearing me a little bit. I read articles from business owners, and they say things like, “Well, I couldn’t get my employees to come back to work. They’re making more money on unemployment.” This is exactly what a guy said. And: “I don’t feel like it’s my right to take money away from them.” And then later in the article, he says, “I might be closing the business.” And I just want to scream, “For God’s sake, business owners out there, your No. 1 responsibility is staying in business so you and your employees have somewhere to go to work every day.” To suggest that it’s not right to call your employees back to work because they’re making more on unemployment? How is that gonna help anybody when they’re all out of work, and you’re out of business?

Loren Feldman:
Or even when the end of July comes and they stop getting the extra $600 a week.

Jay Goltz:
And this wasn’t one person. I read an article, it was like three or four of them all lamenting about how they can’t do it. Then one says, “I don’t think it’s right to get them to come back for my own enrichment.” What is being the boss? That’s what your job is. You’re supposed to have people work for you so you can make money in your business. That’s the definition of owning a business. I hate to see people go out of business, and I hate to see people put themselves out of business. I see people doing stuff all over the place that I say to myself, “Okay, you just cast your fate. You’re going out of business.”

Loren Feldman:
I’d like to go back to something else you said several times on the podcast that kind of stopped me in my tracks. And that is, when we first started talking about reopening, when I asked you about the warnings that I was hearing from the epidemiologists, from the medical experts, your answer several times was, “Oh, those medical experts, they get a paycheck every week. They don’t understand.” Explain that to me.

Jay Goltz:
First of all, it’s an extremely difficult decision to open because nobody wants anybody to get sick, and I certainly don’t want to do anything irresponsible for them or for me or for the customers. But it’s easy to be a doctor. Here, I’ll give you an example. If you ask a lawyer about making a decision on anything, they’ll say, “Oh, don’t do it. You can get sued for that.” If you ask somebody in the emergency room, “Maybe you shouldn’t drive a car, because look at all the car accidents in here.” So you ask a doctor, “Should we open?” “Oh, no, somebody could get sick.” I meant they get a paycheck every Friday. They don’t have to worry about paying their bills every week, so it’s easy for them to just say, “Oh, no—”

Loren Feldman:
But do you really think that’s what they’re thinking?

Jay Goltz:
No, no, I want to know where the line is, though. I mean, we obviously can’t wait until the very last person has it.

Loren Feldman:
Couldn’t the line be on the other side of following the guidelines?

Jay Goltz:
Sure. Absolutely. I’m not at all suggesting we should be open too early. I’m just saying—

Loren Feldman:
You were sort of suggesting it at the time.

Jay Goltz:
No, no I was just suggesting that the doctors keep saying, “Oh, we shouldn’t open,” but I’ve never heard—

Loren Feldman:
They weren’t saying “never.” They were saying, “Let’s follow these guidelines.”

Jay Goltz:
I’m following the guidelines. I believe in the guidelines. I support the guidelines.

Loren Feldman:
You might be, but it makes a big difference if around the country, entire states are not.

Jay Goltz:
Yeah . Dr. Nick said I didn’t have to talk to you too long about this because it’s hurting my health. He says I need to get some support and nurturing from you a little bit.

Loren Feldman:
You always do, Jay. I’m looking out for your business. I want to understand how you think, because I know there are a lot of people who approached this the same way.

Jay Goltz:
At this point, it’s half about what you think, and it’s half emotions, because this has been an extremely trying time. I’ll just give you a snapshot of a day. We open up my home store. We sell plants and flowers, so I was able to open, because we do sell to landscapers. We got busy. As soon as we open, customers want to get out of the house. They’re all wearing masks. They’re all very polite. Everybody’s waiting in line. It was a pleasure. One guy comes in without a mask, he doesn’t want to wear a mask, and they tell him he’s got to wear a mask. He goes back to Yelp and fries us. He’s a doctor. He’s a surgeon. The masks are baloney, and the whole thing’s overblown, the hospitals aren’t failing. He goes into this whole tirade. To be fair, it was one guy.

Loren Feldman:
Yeah, I was gonna say, you’ve dealt with bad reviews before.

Jay Goltz:
No, not like this though. We’re in a difficult time now for God’s sake.

Loren Feldman:
Let’s go back to how you’re thinking about the economy. You mentioned the thing about unemployment and how you hate to see how that’s reported. They’re just statistics.

Jay Goltz:
No no, I don’t mind the statistics. What I mind is taking that statistics and saying, “This is as bad as the Depression.”

Loren Feldman:
Well, in terms of the numbers—

Jay Goltz:
It is, but [during] the Depression, the world was falling apart. Here, they made stores close for a while. They made businesses close.

Loren Feldman:
Right, but here’s the thing. I think this gets to an important point, because you said this a couple of times. You have said on the podcast, “We had as good an economy as we’ve ever had in January and February. Why in the world wouldn’t it just come back to that?” And I haven’t been able to break through your saying that. I think there are a lot of good reasons not to expect that to happen right away.

Jay Goltz:
Okay, I’m not saying for sure that’s gonna happen. I’m just saying that there’s reason to be optimistic, that it could be okay.

Loren Feldman:
But you asked, “Why in the world wouldn’t it happen?” Well, there are some obvious good reasons why it might not happen.

Jay Goltz:
How about “couldn’t it happen”? How about the guy who I was watching? He says, “This is gonna take five years to recover from.” It’s like, “Oh, give me a break.”

Loren Feldman:
Again, that’s one person.

Jay Goltz:
I know. It gets back to: Could we be a little optimistic? It’s back to the doomsday fatigue. Could we just try to not make everything the worst possible thing that it could possibly be? Could we just say, “The economy was really good before things went bad. They might come back quickly. There’s a lot of pent-up demand from people being closed”? Could we just not make it out to be the worst possible thing in the world? Could we? That’s all I’m saying. Loren, could we just be a little optimistic?

Loren Feldman:
That’s a great question. I feel like my job as the host of this podcast is—

Jay Goltz:
To be a buzzkill?

Loren Feldman:
No. To deal with reality, to talk about the situation as I perceive it, and to think through contingencies. So when I ask you what your thinking is if you were to have to shut down again, I’m not predicting it. I’m not hoping for it. I’m not expecting it. But I’m saying, as a business owner, you need to be prepared for contingencies.

Jay Goltz:
Yes I absolutely am, and I’m telling you I learned very quickly from just this last one. I just talked to my kid about it yesterday. “Dad, what do we need to get the mortgage for?” I go, “Because it doesn’t hurt any. I’ll have the money. We can pay off a line with it, and then just give it back if we don’t want it.” I’ve learned from this last one.

Loren Feldman:
You’ve referred to yourself frequently as a “recovering entrepreneuraholic.” You’ve given examples where you’ve reached too far. You thought you’d completely recovered, but in the last couple years, you bought a firehouse that you had big ideas for, and then you decided to just sell it. You’ve joked at times that you’re somewhat delusional—

Jay Goltz:
No, I’ve said that there’s a thin line between visionary and delusional, and I’ve certainly been on both sides of that. So yes, I have been delusional.

Loren Feldman:
Is that something that an entrepreneur has to be?

Jay Goltz:
I don’t know about “has to be.” I won’t speak for everyone. I’ll only tell you that one of my friends said, after one of my deals didn’t work, he goes, “Jay, that’s how you got where you’re at.” In my own personal thing, if I didn’t have that personality trait, I’d own a frame shop with three employees. That’s where I would be. I have 110 employees and four businesses.

I think this is an accurate statement: I don’t think you’re going to ever talk to a successful entrepreneur who didn’t have some things they did along the way that didn’t work. They don’t always work. There’s a great book called The Hypomanic Edge that I read 10 years ago. It’s written by a psychiatrist or psychologist and he said, “Hypomania is, by definition, you think you can do anything and you’ve got self-confidence.” He went through the whole list of hypomania, and then he went through the whole list of entrepreneurship characteristics, and they’re the same list. I have to tell you, it gave me a window into my soul, and I called the guy and I thanked him. And he said, “You’re not the first person to call me.” So, yeah, I recognize now I’m hypomanic. I think I can do anything. Now, I think things through a little bit more than usual before I go jumping.

Loren Feldman:
Well, that’s what I wanted to ask you, Do you think this experience—the last three and a half months or whatever it’s been with this crisis—has it changed you?

Jay Goltz:
Not really because I already figured it out before. I already knew that I didn’t need to keep on the fast track. The only thing that I learned from it is that I should have gotten the mortgage on the building and kept the money somewhere. Other than that, I was already off the trying-to-take-over-the-world thing. My business—I never thought I’d use this phrase—never, never, never thought I’d use this phrase. My business is “big enough.” I don’t need to own a $50 million company. It’s fine. Not only fine, I’m happy. It’s not about balance at my stage. It’s about alignment. I would say this at any stage: you figure out what you want. I don’t want any more stress because I’ve got it under control really well. Things had really just gotten easy. That’s why, for example, I’m not buying that guy’s store. I don’t need five more—

Loren Feldman:
You’ve talked a lot on the podcast about [how] you can find opportunities in a moment like this. You talked about how during the Great Recession, you bought that big warehouse that changed the dynamic of your business. You’re certainly open to opportunities, and this one, you have somebody who was closing down anyway. Initially it looked to you like it could be a really good opportunity. What changed?

Jay Goltz:
Okay, this is what changed, to be fair. I figured out the volume he was doing, and I realized to get the volume to where I needed it to be, I’d have to open Sundays. It’s in the suburbs. It’s harder to find help on Sundays. I realized, this isn’t going to be as easy as it looks, and frankly, the amount of money I’d make on the store, it just isn’t worth it. That’s why I had to think about it. If something else fell into my lap that was fairly simple, I’m not saying I wouldn’t do it. But in this case, there were two issues: one is, could I do enough volume to make the money to be worth the trouble? And two, this would put a stress on a lot of different things. He’s got four older people working there. Using my computer system over there is not going to be an easy transition. I did an assessment to figure it out. It just isn’t worth it. For me, there’s no question. 10 years ago, I would have already been there. That’s quite the change. I am still recovering, is the point.

Loren Feldman:
It sounds like I haven’t really pissed you off yet.

Jay Goltz:
No, you really lost your your best pitch.

Loren Feldman:
Did I miss anything?

Jay Goltz:
Oh, I had something just yesterday! Guy goes home from Jayson Home and he writes a Yelp thing with, “Oh, they’re snobby in there.” And it’s like, “What are you talking about?” It’s frustrating. He called and asked for me yesterday to apologize. He said, “I came in your store, and I realized I was in a really bad mood when I came in there.”

Loren Feldman:
Did you do anything that prompted that apology?

Jay Goltz:
Yes, actually, we put a response on the Yelp thing. But he actually—

Loren Feldman:
That’s smart. What did you say in that response? Because there’s an art to that.

Jay Goltz:
I don’t remember exactly. Our typical response.

Loren Feldman:
Did you argue with him?

Jay Goltz:
No, no, no. I never argue with anybody.

Loren Feldman:
Except me.

Jay Goltz:
No, except you. Well, that’s why you’re here. I said, “I’m horrified you feel that way, and here’s who we are and how we got here. I teach my employees how to SAVE a customer. “S,” sympathize. You know, I understand.

Loren Feldman:
You should explain. When you say how to SAVE a customer, you’re talking about an acronym: S-A-V-E.

Jay Goltz:
Yes. S-A-V-E. “S” sympathize, like, “I can understand why you’re upset.” I mean, wouldn’t that make you feel good if you had a problem in a store that they actually understand? And then “A” is act. If there’s something wrong, we say, “As soon as you leave, I’m going to call the manager. I’ll call the vendor.” You do something about it. “V” is, in our case, vindication of simply saying, “We usually catch stuff like this.” And then, and this is true, “We’re really embarrassed this happened.” All true. We are embarrassed it happened. And then lastly is eat something, if appropriate. Eat free delivery. What I find is, when companies mess up, even if you go just pick up dinner and it’s messed up, “All right, we’ll give you a credit, we’ll put it in the register.” Okay, the credit in the register doesn’t make up for the fact that we didn’t get French fries with our dinner. It just doesn’t do it. If I owned that company, I swear to God, I would sit somebody in the car, and I’d drive the food to their house. That’s what I would do.

So we gave a nice message, we never argue. And he called me, and I said, “You know what, I really appreciate the call. Any good news you get these days is good. The only thing that’s gone right lately is I got plenty of toilet paper.”

Loren Feldman:
All right. So Jay, much earlier in this whole crisis, we talked about which businesses are going to make it and which aren’t. You came up with a five-part stress test that you suggested that any business could use to assess where they stand, their likelihood of making it through. And even early on, when things were looking bad, you felt pretty good. You felt like you were in pretty good shape. I’m curious. Has anything changed? Do you still pass your own stress test?

Jay Goltz:
I feel better actually because we’re open, we’re busy, and I’m paying down—

Loren Feldman:
Take us through the stress test.

Jay Goltz:
Okay, so the first question is: How was business before this all happened? I’m suggesting if you were struggling before this, unless something’s changed, that’s a problem. My business was going really nicely before this, so that’s number one.

Number two: What kind of legal obligations do you have to people? Do you have a partner who lives in Boca Raton, who’s 73, who’s calling you screaming, “I want my money back. Close the business down”? I don’t have any partners. I’ve got almost no landlords. Or vendors you owe a lot of money to. I don’t have any of that. If you’ve got someone putting the screws to you like that, that’s a huge problem.

Number three: Where’s your head at? Maybe you’re tired. Maybe you’ve had enough. Maybe you’ve got enough money and you don’t need to work anymore. Maybe you were already thinking of closing your business, so there’s nothing wrong with any of that. It’s just in my case, I’m not going anywhere. I like going to work every day. I liked supporting my employees. I like the whole thing. I’m as energetic today as I was 20 years ago.

Four: Do you have any key employees who left during this whole thing? If you have a smaller business especially, and you’ve got a key architect or a key salesperson or a key designer, that could hurt a lot. I don’t have any of that. Everybody who works for me came back.

Lastly is: What kind of financial resources do you have? Do you have cash in the bank? Do you have credit lines? I know this is weird to the average person, but having cash or having a credit line—same thing—access to capital. Is there any property you could mortgage? I’m in better shape now than I was six months ago because business is picking up. I will be the first to admit that the PPP thing was a lifesaver.

I just want to tell you, it’s not a bailout. Disaster relief is what it was. Good for the government for doing that, and good to everybody who was able to take advantage of it.

Loren Feldman:
Jay Goltz, thank you for taking this time. Thank you for letting me rake you over the coals and think this all through again.