Here’s My New Succession Plan: I Can’t Die

This week, Shawn Busse, Jay Goltz, and Liz Picarazzi discuss their succession options and—if they could go back in time—what advice they would give their early-stage selves. Liz would tell herself to get some help with administrative tasks, Shawn would tell himself to find a mentor (although he’s not sure he would have listened to the advice), and Jay would tell himself that there’s an obvious solution to the chaos caused by fast growth. Plus: How Liz changed the narrative after Citibin’s bout with bad publicity. And we have suggestions for a listener who asks: How do you know when it’s time to quit the day job?

— Loren Feldman

Guests:

Jay Goltz is CEO of The Goltz Group.

Shawn Busse is CEO of Kinesis.

Liz Picarazzi is CEO of Citibin.

Producer:

Jess Thoubboron is founder of Blank Word Productions.

Full Episode Transcript:

Loren Feldman:
Welcome Shawn, Liz, and Jay. Thanks for being here. I want to start today by asking you about the best advice you never got. Tell me, if you could go back to the early days of starting your business and deliver a message to the younger you just getting started, what would that advice be? Liz, can I start with you?

Liz Picarazzi:
Absolutely. So I don’t know if my advice is all that exciting, but it’s definitely something that I could have used. And that’s that I underestimated the amount of administrative work that goes into having a business. So when you register with the state, and you get a tax ID number, you get put on a lot of different directories for various types of mail. Some of it, it seemed kind of like solicitations, but a lot of it are various types of insurance, various types of sales forms.

So when I started getting this mail, I was really overwhelmed with understanding the difference between even something like unemployment and disability. I know they’re totally different things. But from a standpoint of knowing, “How do I handle this? What do I need to know about this? How much do I need to pay? How do we get this set up?” for me, I found that so unpleasant. And as I’ve said on the podcast before, anything administrative… I don’t have very strong skills in that. So I actually had a box that I carried around with me for a few months with a lot of mail in it that were important things like sales tax. I was overwhelmed with it. I didn’t like it.

So if I could have had someone take me through, “What are the various insurances, taxes that you need to get set up with?” then when that mail started coming in, I wouldn’t have felt as overwhelmed, and in addition to that, annoyed. Because for me, it was like, “Wow, what an annoyance that I’m finally going out on my own and I’m starting this business, and I’m already buried in paperwork.” So that would be my type of advice.

I don’t know if there’s some sort of an advisor who can provide that sort of simple advice. I know there are things like SCORE, and other city resources on how to start a business. But no one told me, and I didn’t seem to have a resource for all of those additional admin things that you need to take charge of right away.

Jay Goltz:
Who was doing your accounting? Who was doing the tax return and such at that point?

Liz Picarazzi:
Well, I’m talking about in the first six months or so.

Jay Goltz:
I know, but my point being, usually, if you have some kind of accountant, they could at least give you some guidance. And some of that stuff you’re talking about, I just question, in the beginning, did you not have an accountant at all?

Loren Feldman:
You don’t need one in the first six months, necessarily, do you?

Liz Picarazzi:
No, I didn’t have it. I had a bookkeeper who was in my co-working space. And he was helpful to a point. But maybe that’s it: Have an accountant who can help take you through those things, not just from an explanatory perspective, but from an actual practitioner.

Shawn Busse:
Well, I can’t help but wonder, too. We live in a very different time than when you started your business, Jay, in terms of the administrative burdens. And Liz is in a state and a city that are epic, in terms of bureaucracy, and I am too. I mean, that’s sort of one of the perils of doing business in more liberal cities. They love their fees and their taxes and their processes and permits. I mean, it has become Permitville-crazy. So I think Liz brings up a really interesting point.

Jay Goltz:
No, you’re right. When I started, it was very different. I don’t remember getting a bunch of mail with all this stuff. And you’re right, it’s changed over the years. It was 44 years ago.

Liz Picarazzi:
Even on something like disability, if you don’t pay that on time, you get a pretty big fine. So I think my disability bill was like $250. And I didn’t pay it, and then I got fined $500.

Jay Goltz:
Are you sure that was disability? Because disability is an insurance policy. I don’t know who would be fining you for that. Did the state fine you for that? I guess they could.

Liz Picarazzi:
Yes, at the time it was through the state. And I tried to fight it, but I think they have those punitive measures in place for people like me.

Jay Goltz:
They probably call them Liz rules. “How can we get Liz?”

Shawn Busse:
Yeah, it is really difficult. I mean, I don’t even know if the accountant is the right answer.

Jay Goltz:
Yeah, I don’t either.

Shawn Busse:
Because it’s so broad. It’s not just the financial side, it’s more of the compliance and rules that often fall out of the realm of accounting. It’s really good advice, Liz.

Liz Picarazzi:
I actually think it’s a business opportunity as well. Because if you can get in there with an up-and-coming small business at the beginning and—whether you’re a lawyer or you’re an accountant or some sort of advisor—help them through this, then you can get longer-term business by helping them with that stuff. And you can get a lot of referrals.

Loren Feldman:
I think there are places around the country, municipalities, that have gotten better at this, and they have kind of created a one-stop platform that lists all the things you need to do to get a business off the ground. You can just go to one place and start checking them off. And I would like to think that that will happen everywhere before too long.

Liz, when you were throwing that mail in the box, were you throwing it into the box opened or unopened?

Liz Picarazzi:
Mostly unopened. [Laughter]

Loren Feldman:
That’s not good.

Liz Picarazzi:
I’m smart in a lot of ways, but that’s not one of them.

Shawn Busse:
I think Liz is really typical of an entrepreneur. I’ve lost some administrative resources because of maternity leave recently. And then I had one of my key people who handles operations go on an extended vacation. And so I covered for them, which is kind of a joke. I had a stack of mail that a lot of it I didn’t get to for a long time and finally got around to it. But it’s hard. When you’re focused on a vision, and you’re focused on, “Where are we headed?” and the pace of everything, and you’re selling, this stuff is just a boat anchor around your neck.

Jay Goltz:
I think at some point, it’s about self-preservation and about keeping your head clear. Sometimes ignorance is bliss. She didn’t open them because she couldn’t deal with it, and I understand that. I respect that. At some point, you just get overwhelmed. So there’s something called—I just made this up—“managing your overwhelmedness.” Maybe you just ignore a couple of things because you just can’t deal with it, because it is overwhelming.

Loren Feldman:
Shawn, same question to you: If you could go back in time and give yourself a piece of advice, what would it be?

Shawn Busse:
So a question I have is: When you say back in time, are you saying to the very beginning?

Loren Feldman:
I’m giving you some wiggle room. I want you to give the most interesting advice, for whatever point in that earlier period.

Jay Goltz:
It could be last month. [Laughter]

Loren Feldman:
That’s true.

Shawn Busse:
If I look back over my life, and then especially the last 25 years of being in business, the first 10 years were very different from the following 10 years. And so if I reflect on those first 10 years, the most critical piece of advice that no one ever gave me—and I don’t know if I would have listened to it—but it would have been to get mentorship.

I worked so hard at creating things that, in hindsight, were just super basic and easy if somebody had just kind of given me a playbook. I think as an early-stage entrepreneur, you end up wasting a ton of energy and momentum trying to invent wheels that have already been invented. So I think mentorship and guidance from folks who’ve done it before, I think that would be the No. 1 thing for Shawn in his 30s.

Loren Feldman:
Well, you raise a good point. Do you think you would have been open to taking that advice you would have gotten from whatever mentors you found?

Shawn Busse:
It’s a great question. I was brought up in a time—not quite as far ago as Jay—but where the dominant mindset was: Business is a fiercely competitive activity. You keep secrets. You keep your stuff to yourself. You don’t ever admit your weakness. You don’t share what you’re doing because people could steal your stuff. It’s very much a paranoia mindset around business, and you never talked about your financials. You never talked about what you make.

And what I’ve learned over the years is that’s just dumb. It doesn’t help you at all. And so I think that has changed. I think people have become much more vulnerable and much more willing to share and realize the benefits of being honest and open about their shortcomings.

Loren Feldman:
Jay, how about you? If you could go back in time, what advice would you give yourself?

Jay Goltz:
There’s no question. This cost me literally—in the true sense of the word, literally—millions of dollars. I was growing at 50 percent a year. And then finally I get to a bank, and I’m going to borrow some money. And I show my financials. I can remember this like yesterday, and I go, “Listen, my bottom line’s not as big as I was hoping.” It was maybe 4 percent, which wasn’t great. And he flips open the thing, and he looks: “Oh, you still made money.” And that was the end of the analysis.

And I was going to a real accounting firm. And it blows my mind in hindsight, between the accounting firm and the bank, nobody said to me, “Wait a second. You’re growing 30-40 percent a year. You’ve got a 4 percent bottom line. Why don’t you raise your prices 3 percent? It will slow your growth down a little bit, and your bottom line will go up dramatically. You won’t have to borrow from the bank.” I wish somebody would have told me that. As simple as it sounds now, in hindsight—

Loren Feldman:
But you know why the bank didn’t tell you that, right?

Jay Goltz:
You know, you could say they wanted to lend me money, but I don’t even give them that much credit. I just haven’t found a lot of these bankers to be great business advisors. I just don’t understand. The accounting firm? Nobody? Like I said, in hindsight, it seems obvious. But at the time, it wasn’t.

Loren Feldman:
But Jay, it wasn’t just that you could have had a bigger bottom line. You could have had a better life.

Jay Goltz:
Absolutely. No, absolutely.

Loren Feldman:
If I recall your talking about it, there was a certain amount of chaos that you might have avoided.

Jay Goltz:
No, it was absolute chaos.

Loren Feldman:
If the bank or the accountant had given you that advice, do you think you would have been ready to hear it?

Jay Goltz:
I believe so. Because when you do the math, it’s obvious. I do it for framers, and their mouths drop when I go, “Let’s look at this math. If you raised your prices 10 percent, how much business would you have to lose to lose money on this deal?” And it comes out to like 18 percent. So even the most paranoid of all, even the ones who think they’re in the most competitive market, no one can argue with the fact they’re not going to lose 10 percent of their business.

And I also say, “You’ll lose some business. I’m not arguing with that. I’m suggesting, if you raised your prices, five or 10 percent—let’s say 10 percent—yeah, you’ll probably lose 3-4 percent of the business.” And then you show them the effect it has on their bottom line. And like I said, their eyes open up.

Shawn Busse:
It’s totally universal. Early in the business’s lifecycle, founders dramatically undercharge what they should. They undervalue it. This is crazy—so to your point, Jay, about the numbers, I had a client that was an accounting firm. They were an accounting firm, and we were doing brand work for them. And we were looking at their offerings, which were really remarkable and different, and nobody else could do what they were doing. They had this niche specialization.

We were like, “You guys! You’re, in many cases, losing money on these clients. Just raise your prices by like 10 percent, and you will kill it”—especially because they had a volume of clients. And they were like, “Oh, no, we can’t do that. We can’t do that.” So there was a fundamental insecurity, because they were comparing themselves to the kind of boring tax industry that just prepares returns, which is commoditization.

Jay Goltz:
I don’t know if I’d use “insecurity.” I think there are two words, because I’ve thought about this a lot: fear and guilt. “Oh, I can’t charge. Oh, people can’t afford that.” Really? They can afford $300, but they can’t afford $350 or fear of, “Oh my god. I’m gonna lose all my business if I raise my price”? And like, I get it. I get it. I’ve been there. It’s fear.

Liz Picarazzi:
I think part of it, too, is the discomfort of communicating a price increase, which in the last couple of years, my business has done. And I think a lot about either communicating it, or in some cases, not communicating it—whatever the choice is. But some people have a discomfort with communicating a price increase.

Jay Goltz:
I’d say most people.

Shawn Busse:
I think Liz is kind of the perfect example. I was on your website, Liz, and I was looking at your trash bins, because I’ve got this project. I was like, “Oh, maybe I can use a trash bin thing.” And I was like, “Wow, these things are expensive.” And that was my first thought. And then my second thought was, “Well, wait, okay. What do I do? Pay to have a custom thing built? What else is there?” Like there’s no comparable, right? So you’ve created something that is escaping the trap of being a commodity, which is great. And it also means you’re gonna have some people who won’t buy from you. And that’s fine. Like, that’s fine, right?

Jay Goltz:
You have to get used to the idea that people don’t have to be happy with the price; they just have to pay it. That’s not the same thing. You go to get your car fixed. They’re getting hourly, like, $280 per hour. Who gets their car fixed at the dealer and says, “Oh, that was reasonable, $493!” But you pay it, because you want your car fixed. Or the plumber, or whatever.

Liz Picarazzi:
Or you want it to last. A lot of the commodity trash enclosures you would get at Home Depot or on Amazon, they’re going to degrade very quickly. Or to Shawn’s point, you can hire a local carpenter to build something that’s really nice. Well, with that person, you might need to wait a really long time. And it actually, in many cases, will cost more than a Citibin. Because people also under-appreciate the cost of good carpentry. And if you want it really nice, it is going to cost a lot.

Loren Feldman:
Next topic. I want to talk about succession a little bit. Both Jay and Shawn, this is a thread we’ve been following a little bit. You guys have talked about this in previous episodes, and I’d just like to check in with you. Jay, you’ve told me recently a few times in private conversations that you’ve kind of settled on a succession plan, which is, you can’t die. [Laughter]

Jay Goltz:
That’s a key part of it. Yeah, that’s a key element.

Loren Feldman:
Can you explain that for us?

Jay Goltz:
My plan requires me being around long enough to mentor and to groom and to get people ready to run it without me here. I do have the place somewhat running itself. I’ve got key people running each division who are extremely competent, in some cases more competent than I am. But there’s still an element, I still do serve some function here. I’ve got my two kids here.

Loren Feldman:
You’ve talked about that as being kind of an experiment. You wanted to give them a chance to see if they’re interested and if they have the capability.

Jay Goltz:
That’s why I can’t die. I need to find that out.

Loren Feldman:
You’re still working on that.

Jay Goltz:
Well, things could change in 10 years. But I’m working on it, and I’m continuing to work on it. And I need some more time to get this working. And then the other difference is, I mean, I’m in good health, I believe. Hopefully, I’ll be around for another 25 years. But if I dropped dead tomorrow, would the place go up in—no, it would be okay for a while. It might be okay long-term. But there are definitely some holes here that I’m grooming my children to understand the finances and, frankly, some of the stuff Liz brought up.

Loren Feldman:
Jay, what would happen if you got hit by that proverbial bus tomorrow? How would big decisions get made?

Jay Goltz:
First, it would be an unbelievably big funeral with people just throwing themselves to the ground. [Laughter]

Loren Feldman:
We’ll all be there.

Jay Goltz:
Yes, I know that. I know that.

Shawn Busse:
We’ll throw the 21 Hats on your casket.

Jay Goltz:
For those of you old enough to remember this, would there be an Alexander Haig moment? Remember that?

Loren Feldman:
I’m in charge.

Jay Goltz:
“I’m in charge”—when he really wasn’t. Would there be some power void? I’ve got some strong managers here. I don’t think there’d be any ugly someone’s-trying-to-take-charge thing. Would there be over the next year or two? I mean, we do have a plan here, which is we’re not opening any new stores. We’re just running what we have, running it better, trying to get more efficient, trying to get more profitable, and just running what we have. Would anything change with that? No.

And I am trying to—not trying—I’m explaining to everyone involved, whatever happens, I’ve got it all typed up for my kids that, like, “Don’t do the, ‘Oh, Dad’s turning in his grave thing.’ Do what you need to do. If you decide to sell it, just do whatever you need to do.”

I do not want to hang my kids, or my wife, with any kind of legacy thing where they torture themselves the rest of their lives because, “Oh my God, Dad would be upset if he knew we were…” I don’t want any part of that. So I’m telling them, I’m giving him some instructions, some guidelines, some thoughts. I’m telling them at the end of the day, “Do what you need to do. If you wake up one day, and you don’t want to deal with it anymore, you know, sell it. Do whatever you need to do.” So it’s a work-in-progress. There is no easy solution to this.

Loren Feldman:
Shawn, when we last spoke, you had told us that there came a point in time where you tried to step back a little bit and turn over the day-to-day operation to your team. And then eventually, you concluded that wasn’t really working, and you had to get back involved, which you clearly still are. What’s your current thinking?

Shawn Busse:
Yeah, I mean, some of that’s a function of losing a key person on my team who was responsible for business development. So my strategy had been: Get out of client work, get out of doing the advising and consulting business. And I was successful in doing that. I built a really great strategy and consulting team. They’re fantastic: good leadership, good execution.

And so then really, kind of the next natural step was to get out of sales and business development, which is really hard for a founder/owner, because oftentimes, they have been doing that for so many years that it’s hard to kind of pass those reins. I had been in probably year two or three of that, specifically, kind of cultivating somebody inside. And I think the pandemic really threw everything off, made life really hard for all of us, including her. And she ultimately left, which is a bummer, but I understand it. And it’s just meant, I just don’t have any redundancy in that department.

Jay Goltz:
Wait. Walk us through that. Why’d she leave? Tell us, what’s the rest of the story? Where’d she go? Why’d she leave?

Shawn Busse:
Yeah, it’s a complex issue. But I think fundamentally, she’s an extrovert. She’s a community person. She really loves and thrives on being around and with people, and I think the pandemic and its isolating nature was really hard for her. And you know, we closed down the office. We went remote, and I think as that dragged on, it just was really, really difficult for her to be inspired and excited to do her job.

Jay Goltz:
So what’s she doing today?

Shawn Busse:
Yeah, so she took a role at a much, much larger company more in the 300-person size, doing a lot of stuff around internal employee alignment and engagement. It’s really kind of an internal brand role, which is something that we deliver to our clients and are known for and they really need.

Jay Goltz:
Okay, so that does make sense. No, that makes sense for her. What I’ve learned is, when you get to the stage where you really have a self-sustaining business of size that I have nothing to do with the customers, you have to have people in place who are going to be making some serious money. And you have to have a big enough business to afford that. Because that’s not a $60,000 a year employee anymore.

Shawn Busse:
Well, yeah, and so that’s another tension. So we were growing really, really fast from about 2011 to 2017. And that’s exciting, because it creates new opportunities for people in the organization. And then I really wanted to focus on more stability. We were having higher employee turnover than I’d like, higher client turnover than I’d like, as a result of that fast growth. And so I slowed it down intentionally. I got it to about a 10 percent a year growth curve, which was great. Really sort of like that perfect balance of stability, but with growth.

Loren Feldman:
Did you slow it down by raising prices or by bidding for less work?

Shawn Busse:
Both. Raising prices, that’s some of it. But more, it’s being disciplined in the sales process to bring on clients that you felt could go 2, 3, 4, 5, 10 years with us, instead of clients that were marginal. Like when I was in that fast-growth mode, I would take a lot of clients that, in my heart of hearts, I was like, “This is not going to be good.” And then, what would happen is, it would bring a lot of stress to the team, which would cause turnover within the organization, which then caused more client problems, which then caused more employee problems. And it was this vicious cycle. And so developing the discipline to say, “Okay, we’re not going to say yes to those clients that your gut tells you, you should say no to,” that was the primary thing.

Jay Goltz:
How long have you been in business?

Shawn Busse:
About 23 years.

Jay Goltz:
All right, here’s some good news for you: That’s not that long a time. It really isn’t. No, I mean it. I was figuring it out at that point, but it’s like, I can’t emphasize enough. I’ve been doing this for 44 years. It makes a difference. You could be in a very different—not it could be—my guess is, in 10 years, you’re going to be in a very different place. And you will have fine-tuned the niche. And it’ll be a well oiled machine, so that when you’re in your 60s, you have some choices.

Loren Feldman:
Shawn, where’s your head at now? Are you still thinking you’d like to pull back a little bit? Or are you happy reengaging?

Shawn Busse:
I think what the business needs from me right now is what I’m best at, which is major transformation, a significant shift in how we go to market and how we talk about ourselves and the services we offer. So I’ve been thinking a lot about that lately, and that’s energizing for me. I really enjoy it. And I really like the team we have.

Loren Feldman:
So you’re not doing it reluctantly. You’re throwing yourself into it eagerly.

Shawn Busse:
It’s just a classic, gosh, I felt like we took two steps forward, and now it feels like one step back. And that’s okay. That happens. But the piece about it is, I really love creating prosperity for my employees. I really love watching them buy houses, get married, have kids, have long-term relationships, have great vacations. I love seeing that. Like, to me, that’s happiness.

And so this feels like a little bit of a setback from those kinds of outputs. Just because the pandemic was so hard on our marketing, I was okay with the slow and steady, but the kind of flatness that we have right now is frustrating, because I like to see prosperity amongst the team. It’s not about me getting more money. It’s more about being able to have impact and to do more good.

Jay Goltz:
Okay, wait, I need to stop you there. Well, but there is a part of that making more money. You’re not a not-for-profit. Are you a monk or something? Did I miss something?

Shawn Busse:
Oh, no, no, no. I’m not one of those owners who gets up and says, “Money doesn’t matter to me.” I hate those people.

Jay Goltz:
Yeah, well, you were getting close to that. I just wanted to clarify that, because I’ve learned from the last one, the West Coast thinks differently than Chicago. I just wanted to clarify that.

Shawn Busse:
Well, no, but what I’ve heard you say many times, Jay, is like you’ve reached a point of prosperity in your life, where you’ve got all this real estate, you’ve got a business that’s humming. You don’t need to make a ton more money—

Jay Goltz:
No, no. You’re right. No, no, my goal is no longer—yes, there’s no question.

Shawn Busse:
What I really find disingenuous is when people say, “Money doesn’t matter to me,” even though they’re saying it from a position of massive wealth. I’m not saying that. I’m saying that I have reached a point of prosperity where I’m not looking around going, “Gosh, how am I going to achieve this? Or pay for that? Or save for this?”

Jay Goltz:
Okay, and that’s good to know. Because that’s all part of it. I love when people say, “We don’t put profits over people.” And I think, “Really?” I would say that people and profits gotta go together. Because at some point, without the profits, the people aren’t paying their mortgage. So I just want to keep it real.

Shawn Busse:
Yeah, no, I’m with you on that. Whenever somebody uses that expression, “People over profits,” I’m like, “That’s a false choice, a false dichotomy.” Because that’s the nonprofit mindset, which is like, “Oh, well, we’re doing a really important mission, so we’re not going to pay you anything.” And it’s like, “Well, how wrong is that?” Right?

Jay Goltz:
I would say this, though. There are moments where that’s true. There have been cases where I did have to choose the people over the profit. There are times where you can do that. You just can’t do it generally, overall, because at some point, you do need the profits to stay in business.

Shawn Busse:
What I’m saying about nonprofits is they will sometimes build that into their model, where they underpay their people with the reasoning that, “Well, we need to fulfill our mission.” And it’s a really dysfunctional industry, because they’ll use things like, “Well, this percent of our revenues goes to the mission. Ninety percent of our donations go to the mission.” Which means that you basically are staffing the organization with either really young and inexperienced people, or folks who are incompetent. And I think that’s a real miss on the nonprofit sector. And I think some of it’s starting to weave its way into the for-profit sector, where you get this people-over-profits messaging, which people aren’t actually giving a very deep thought to, which is like, “Well, the least impactful organization is the bankrupt organization. So let’s be honest here and make money so you can do good.”

Jay Goltz:
Right, the point being: There’s nothing wrong with making money. That’s the point. It’s not evil.

Loren Feldman:
Jay, you’re the, “It’s the outcome, not the income,” guy.

Jay Goltz:
Yes. It took me a long time to figure that out. I see lots of very successful people who I want no part of what they call success. So yes, an income is clearly part of the outcome, but it’s more nuanced than that. It’s about your income. It’s about your employees’ well-being. It’s about your customers’ well-being. It’s about society’s well-being. It’s about: Do you feel good about what you do for a living? And I see, unfortunately, the people who get a lot of publicity who are in business are doing some horrible stuff that I want no part of.

Loren Feldman:
I’m going to resist the temptation to ask you what you’re referring to.

Jay Goltz:
You shouldn’t have to ask.

Shawn Busse:
He’s talking about me. [Laughter]

Loren Feldman:
Liz, are succession and the related issues on your radar at all? Or are you putting that in the box with the unopened mail?

Liz Picarazzi:
It’s mostly in the box with the unopened mail.

Loren Feldman:
Which perhaps it should be, at this point.

Liz Picarazzi:
Yeah, I mean, I have a 16-year-old daughter, and I want her to go to college and have some work and explore the world, travel, before posing this idea to her.

Loren Feldman:
But you’re thinking about it.

Liz Picarazzi:
I do think about it, because I want her to have it as an option. If it’s a lucrative business that she would want to take over, definitely she would have that as an option. But it’s more important for her to experience life as she wants to than to be tied down. The only other way I would say I sometimes think about it is, you know, Frank and I own 100 percent of the company. We love it that way. But we do have an excellent team of employees. So I do sometimes think about some sort of a succession that would involve them, whether it be taking over ownership or just taking over completely running it.

I don’t think a lot about that. But occasionally, when I think, “Oh, maybe we should break our 100 percent and share with employees,” I want to do that. But I do think it would legally and everything just be too complicated for where we are right now. And I think that there may be other options that come into play. I mean, if we potentially are to be acquired, I don’t take that off the table. I see that as a possibility. That is a form of succession, or at least an exit.

Jay Goltz:
Everything you said makes perfect sense to me. I think that’s a very well adjusted—maybe your daughter, who knows? Maybe she’ll find that exciting. Maybe she wants nothing to do with it. The whole equity thing, I 100 percent agree with.

I would warn anybody who—and I’ve been in this position where I thought, “Oh, maybe I’ll give some equity to…”—the second you give 1 percent of equity, you no longer have control. You might think you have control, but you’re open to lawsuits. And I’ve had situations where—thank God, my lawyer, who was my brother in law—I was gonna give equity to some guy. This is 35 years ago. It would have been a nightmare because it blew up with him, and I had no idea. And my brother-in-law says, “You just don’t do that.” And he was right. So I think what you just said makes perfect sense, and I think you don’t have to make that decision today. You can wait and see how it all falls out.

Liz Picarazzi:
With our daughter, we find ways to engage her with the business. So she’s done some marketing work, some social media, and she also actually has done some videos for our factory in China that illustrate changes that we want to make to the product. So we shoot the video, give it to her, she’ll edit it into a video, transcribe it, and then actually have it translated into Chinese. And that was something that I think we paid her like $400 for a month ago, and that moved that project forward so fast.

Jay Goltz:
Wow.

Loren Feldman:
You’re getting a pretty good deal there, Liz.

Liz Picarazzi:
Yeah, I think it’s a pretty good deal.

Jay Goltz:
She sounds like a future vice president. I think there’s a vice presidency in this.

Loren Feldman:
Meanwhile, social media: What an advantage to have a 16-year-old around for that.

Shawn Busse:
Maybe.

Liz Picarazzi:
They teach kids a lot of new skills. And I mean, a lot of it is learned on their own, but I think some of this editing did come from school.

Loren Feldman:
Shawn, what was your “maybe?”

Shawn Busse:
Maybe. Yeah. I mean, yes, from a technological understanding. Yes, from a content creation perspective. But it all depends on who your audience is. So what goes into that content? And I’m not dissing on what you’re doing, Liz, at all, in any way. I know other people are listening to this. And I’m like, “I have seen that happen before. I have seen folks do that.” “Well, this person’s young and knows stuff. So they’ll be our new marketing person.” And it really depends. I mean, it depends on who your buyer is. It depends on what your buyer cares about. And there’s no one-size-fits-all. And I think we’re gonna see more of that, like, “I don’t know what TikTok is! So I’ve got a kid doing this stuff for me.”

Jay Goltz:
I think you are 100 percent right. And the problem with some of these younger people—some of them—they think that everybody thinks like they do. And that’s just not the way it is. Everybody doesn’t think like they do. And they completely ignore the existing market and just do, “I buy everything online!”

Shawn Busse:
Liz is a good marketer, so that’s fine. I don’t have any problem with her model at all. I think the challenge is that sometimes you get owners who actually are not that good of marketers, and they think the answer is to hire a 16-year-old. And you really need somebody to oversee that.

Liz Picarazzi:
And just to be clear, I do have a full-time person doing marketing. But in a pinch, she’s got good ideas, and she’s got good skills. And if we have to turn around a video in two days, she can do it. Whereas an employee, I’m not going to have an employee work late at night or work on a weekend to do something that needs to be done quickly.

Shawn Busse:
You can’t overwork employees, but you can do that to children. It’s great. [Laughter]

Loren Feldman:
Next topic. Liz, last time you were on, we were talking about your first-ever brush with some bad publicity after a local blog in New York City reported that your trash bins were not faring as well as expected in Times Square in a pilot program. At the time, you told us you feared you had a couple more stories coming, one in the New York Post, one probably in The New York Times. Tell us, how did that turn out?

Liz Picarazzi:
So there were subsequent articles in the New York Post and in The New York Times. The New York Post was definitely a hit sort of piece. I would say pretty mean-spirited, as they tend to be. It definitely made me feel awful. It actually was worse than I thought it was going to be. I was really nervous that it would be bad, but it felt a lot worse. It was worse than I thought it was going to be. So that’s like the negative side.

Then a week later, The New York Times article came out, and that was amazing. It talked all about the objective of containerizing trash and clean curbs, which is the whole point here. It wasn’t critical of the product. It was really praising what the objective is here. They had a lot of really good photos that showed the product—not in Times Square, in another neighborhood, which is more residential, where the bins looked very pristine. They’ve been installed there for about five weeks. And I think probably the best part of the Times piece was this, the last sentence, which was, “The rat did not get inside the Citibin, but had died trying.” And that really made me feel good.

Loren Feldman:
You couldn’t have written that better yourself.

Jay Goltz:
Have you considered the rat’s family, really?

Liz Picarazzi:
I really loved that. And I mean, the Times piece was just so much more informative. I mean, it talked about garbage remediation efforts in New York City over the last couple of hundred years. It had all these historical photos. So it put it in the context of: This Citibin is not the silver bullet for the city. Nothing is. It’s never been.

And so we were really able to say we’re part of a pilot program. Another thing that was a big takeaway, is that if I fixate on the things that are wrong too much, and there are a few things that need to be improved, then I really forget that this is actually an opportunity. Who gets to test their product for a year with a city that realizes that it’s a pilot, and is going to be tolerant of making changes and improvements using real users?

So if someone tried to come out of nowhere and do what I’m doing, they wouldn’t have the user base to give the feedback that will then help improve the product. So I really felt like I was able to kind of take control of the narrative to say, “This is a pilot. If the bins are being overstuffed, this is what’s going to happen. But we are going to be working on improving that, because basically, we need to plan for user error.” We can’t just say, “Oh, it’s because they’re over-stuffing the bins that all the juice is there.” We need to say, “Well, we realize this is an issue, and we’re working on drainage and different latches.”

So I mean, I’m really happy with where things are right now. I would say, though, that emotionally, it really was difficult for those two, two and a half weeks. I was really like a roller coaster.

Loren Feldman:
How did you take control of the narrative, Liz? What did you do to emphasize the points that you wanted to make?

Liz Picarazzi:
So I really focused on what the problem is. So the problem is trash—

Loren Feldman:
Are you talking about with the reporter from the Times?

Liz Picarazzi:
From the Times, yeah. So the problem is trash on the sidewalk. That’s why the city has this whole program called Clean Curbs. This is something that, instead of having the trash on the sidewalk, they’re in the bins. It’s a huge improvement. Does it solve all the problems? No, it doesn’t. I personally think that trash needs to be subterranean, like they do in Europe. But that’s like a whole ‘nother thing. It’s not something that I think I would ever endeavor to do. But really taking control of the narrative by saying, “This is a pilot, and we’re looking for feedback from everyone.” Times Square is definitely a scenario that’s probably the worst-case scenario. But these are going into many other neighborhoods, where you’re not going to have the volume of trash like you do in Times Square.

Loren Feldman:
Liz, this is all very recent, but you’ve been through this spate of publicity, some of it bad, some of it very good. Have you seen any impact on the business yet?

Liz Picarazzi:
Yeah, so we have a number of other business improvement districts that have moved ahead. You know, this was just on Saturday. We got a lot of calls on Monday and Tuesday, some prospects that we had talked to before that were on the fence actually did move ahead. I think the other thing that’s come out of it is that we’ve also gotten offers of support from other potential vendors. Or Shawn introduced me to an industrial designer who I had a great conversation with.

So people will come out of the woodwork to see, “We can help that company.” Even advertising on Citibins was not something I have thought much about. But anybody who’s in media and media sales sees a Citibin like a canvas for an ad. And I think there’s something in there that could also be a revenue stream for Citibin eventually. Maybe not immediately in New York, because it is a pilot, and we don’t want to taint it by coming in with ads. But those are the types of potential partners that come out of the woodwork when they see this, and I like that.

Shawn Busse:
That’s so cool. I mean, to think like, I could see business improvement districts where this could be a self-funding mechanism, right?

Liz Picarazzi:
Yes, definitely.

Shawn Busse:
Oh my gosh, this is great, Liz. Such good news.

Loren Feldman:
All right, real quickly, one last thing. We have a question that came in from a listener, somebody who is interested in starting a handyman business—something you know about, Liz. You had a platform for handymen before your current business. He’s struggling to finance it, and he writes, “So I have the knowledge and willpower to build this business. But I hit a wall and can’t find the financial means to get me going. Should I just get my last paycheck and go for broke?”

Yes, those are his actual words. I guess the question really is: When do you know it’s time to quit the day job and just go all in? Liz, do you want to take a crack at it?

Liz Picarazzi:
Yes, so I left American Express to start the handyman company. And it really worked out well, because I got laid off, kind of in the tail end of the recession in 2011. And I had already had my business plan written for about two years. And I already had started interviewing handymen. So I had this locked-and-loaded situation, which was really good. When I got laid off, I also got a severance, and I got unemployment. So financially, I felt like I had a runway and that was really, really helpful.

Loren Feldman:
It sounds like a layoff was a dream come true. Did you do anything to encourage that? Or did that just happen?

Liz Picarazzi:
I would say it just happened—except the last couple of bosses I had I wasn’t fond of. So I’m sure that they could have put in a negative word about me, which they probably did. And that hastened it. It wasn’t an intentional thing, but I just didn’t really fit in culturally.

Loren Feldman:
But it did work out.

Liz Picarazzi:
Yeah, it did work out. Now the other aspect of this with the handyman business I would say is that I don’t know if he plans on doing the work himself, but you really have to love that work. You have to be good at it, and you need to like it. And if you’re gonna hire other people, you need to know what to look for in an employee.

But perhaps the most important thing is that I think handyman businesses have an opportunity to distinguish themselves on service, in terms of customer service. So everything from direct mail, to how we answered the phone, to what our website looked like, to how we followed up with clients. Even the guys, when they went into homes, we had a procedure on how they laid out their work cloth, put their tools on top of it. Because I observed that was something that previous clients had complained about, that some of my handymen would come in and just throw their stuff all over the place.

So we learned that if we just had the small touches that distinguished them from all the other Chuck in a Truck that it made the business much better. It was something that when you read the Google and Yelp reviews, people really took note of. And that’s one of the things I loved about the business, because it was actually relatively easy to distinguish us from our competitors.

Shawn Busse:
What are the things that this listener should be cognitive of, aware of, the hazards?

Jay Goltz:
Wrecking something. They don’t know what they’re doing, and they go to hang a door, and they wreck the whole door frame.

Liz Picarazzi:
Yeah, there are definitely a lot of things that could go wrong. I think with hiring people, that was probably the most difficult thing for me. Probably the No. 1 reason is that I’m a woman. And some of these guys were like, “Who the hell is this woman with a few tools thinking she can run a handyman business?” I encountered that over and over. I wasn’t entirely surprised. But it definitely inhibited things. I think it’s sometimes inhibited me from getting and keeping good employees, because they—

Jay Goltz:
Wait. How did you know that? I mean, did people tell you to your face? Or are you just surmising? How did you know that that was the problem?

Liz Picarazzi:
Eye rolling.

Shawn Busse:
Yeah.

Liz Picarazzi:
You know, body language. Definitely, if I was interviewing a guy, and he kind of made a half smile, mockingly, I knew what that meant. And there were quite a few of them.

Jay Goltz:
Interesting. I’m not doubting that was the case. I’m just wondering how that became evident.

Liz Picarazzi:
Well, and then the other thing is, if I hired guys that had previously been union, they were never happy with the pay, or how long their lunch hour was, or any of these little things. I was a startup. I was not like an established company that had a big union sending in guys. I always had some difficulty with them. And then I’d be like, “Well, you know how much the pay was. Go somewhere else, if this doesn’t work with you.”

Loren Feldman:
Going back to the decision of whether to give up the day job, you kind of had your hand forced. The decision was made for you. What were you thinking? Do you remember what you were thinking at the time? What would have triggered you going out and starting a business on your own if that hadn’t happened?

Liz Picarazzi:
I probably would have done some active moonlighting on the side. So let’s say maybe taking one job a week, maybe on a weekend, where I could really see how it went and if I actually liked it or not.

Jay Goltz:
That was gonna be my advice. There’s no reason to not just work Saturdays, Sundays.

Liz Picarazzi:
Yeah, so I think that if I had to have gone that way, I would have tried it. And I really liked the business, honestly. I really only got out of it because I was doing both businesses, and Citibin was growing a lot faster. As well as, I like product more than service.

I realized that pretty quickly. With something like a handyman business—and this is something for the listener—the number of variables on every job is mind-boggling, because you have a different client with a different house with different requests. And what they want to have done with different materials that need to be bought at Home Depot with a different handyman who could be going in. So you’ve got those five variables that you don’t have on a job that’s longer-term. But usually “handyman for a day” was my main product. So on every job, there would be those five different variables, and things could go wrong very easily.

Jay Goltz:
Well, I think the person has a great opportunity to start out small, do some things on the weekend. If I were the customer, I’d feel, “Oh, great. I’m paying less because it’s a side gig. No problem.” I don’t think that would turn off a lot of customers. And get going a little bit, because maybe they’re gonna find out they don’t want to do it. Because yeah, that’s a tough job.

Liz Picarazzi:
I think there’s a huge opportunity in the handyman business if it’s done right. And I really think we were doing it right. We were the only woman-owned, licensed, insured, W-2 employing company in all of New York City. We had a very strong brand. We had very strong reviews. But it does take that sort of marketing hat as well. And I don’t think most trades people are good at marketing. But I am, and that really helped as well.

Loren Feldman:
I’ve never heard anybody say, “Oh, there are just too many of these great handyman services. I can’t decide which one to use.”

Liz Picarazzi:
I agree. I think it’s a gigantic, huge, very enticing market.

Jay Goltz:
After talking to many people who go into business, my conclusion is it requires three things to go into business: marketing, management, finance. And the people who I know who are successful are really, really good at one, like gifted perhaps. The second one they’re really strong on, and the third one they’re adequate.

The people who go broke are the ones who, the third one, they can’t deal with it. I don’t know how you can run a business and just completely have no skill-set whatsoever, or no attention to one of those three things. And everybody needs to do some self-analysis before they go into business and say to themselves, “Should I be going into business for myself?” Because as we know, the failure rate’s very high. Anyone disagree with that?

Loren Feldman:
No. And I’ve let this already go way too long. So I’m gonna stop there. My thanks to Shawn Busse and Jay Goltz and Liz Picarazzi. As always, thanks for sharing guys.