I Don’t Hate Regulation, But …

Introduction:

This week, Shawn Busse, Jay Goltz, and Jaci Russo talk about the new rules that may—or may not—ban non-compete clauses, increase the number of employees who must be paid overtime, and eliminate TikTok in the U.S. How much would those changes matter to each of their businesses? What might the owners do differently? Do the changes make sense? And why does it so often seem as if it’s small businesses that get caught in the cross-fire when the government tries to rein in abusive big businesses? On the question of non-competes, Shawn says he thinks they are often used by lazy businesses that haven’t done the real work of building loyalty with employees and customers. Plus: Do Shawn, Jay, and Jaci ever regret starting a business? Have there been times when they’ve thought about packing it in and trying something else? And also, are the terms “business owner” and “entrepreneur” interchangeable? Or do they carry different connotations? Might there be a better term? Jay thinks there is.

— Loren Feldman

Guests:

Shawn Busse is CEO of Kinesis.

Jay Goltz is CEO of The Goltz Group.

Jaci Russo is CEO of BrandRusso.

Producer:

Jess Thoubboron is founder of Blank Word.

Full Episode Transcript:

Loren Feldman:
Welcome, Shawn, Jay, and Jaci. There’s been a lot of regulatory news of late, and I want to start by getting your reactions to some of this news. I think I would first point out that all of this is subject to court challenge. So it’s entirely possible that none of what we discuss here today will actually come to pass. But I think it’s important to understand the ramifications of these issues. And who knows? At some point, maybe it will come to pass.

So I’m talking about the potential banning of TikTok by Congress, the FTC’s banning of non-compete clauses, and the Department of Labor’s increasing of the threshold for overtime pay. Let’s start with that one—the overtime pay issue. Do any of you expect that to have an impact on your businesses?

Jay Goltz:
Absolutely.

Loren Feldman:
How so, Jay?

Jay Goltz:
Well, let’s just review what it is. At the moment, if you make less than $35,000 a year, you can’t be salaried or exempt. Okay, they’re moving that to $43,888 July 1st, and then they’re moving it to $58,000. So, in my case, or everybody’s case, here’s the issue: If you’ve got someone making more than $58,000, okay. It’s not gonna affect you at all. All right. But if you’ve got someone making $35,000-40,000, it’s certainly going to affect you.

And my argument is, yeah, that’s probably too low of a number, but here’s the problem: If you do have someone who makes $50,000 a year, and they might be working 42 hours a week, 44 hours a week, whatever, you’ve got three choices. You can either raise them to $58,656—thank you, government, for getting involved in my business. The person was perfectly happy making their $50,000. So now, all of a sudden, you have to either give them a raise, which is substantial: 16 percent. Or you say to them, “Okay, we’re going to make you non-exempt. We’re going to make you hourly, but you don’t have to punch in or out or anything. Nothing’s going to change.” That’s a problem.

Loren Feldman:
It’s a problem because you don’t have it documented?

Jay Goltz:
Right. Because what happens is, let’s assume it’s not your trusted long-term employee who’s been with you for 20 years. You have another employee in the office who is going to be in the same situation. And they didn’t work out, and you got rid of them after six months. And now they run to the Department of whatever, and they go, “Oh, I was working from home all the time. He wasn’t paying me overtime.” You have no documentation. And it so happens, my daughter-in-law is a labor attorney, and she said, “Yeah, you really need to have documentation.” So it causes a problem.

And then also keep in mind: If you put one person in the office on salary, because they make the $58,656, and then the person who makes $50,000 is not on salary, you’re gonna have one punching in and punching out and one not. And all that does is telegraph, “Oh, yeah, they’re making more money than you do.” It’s not great. And I understand the problem they’re trying to address. But I wish they would have called me, because I have a much better answer for it. So simple: If you’re salaried, and you work more than 50 hours a week, you get time and a half. Done. Would have solved the problem. Largely, it would have solved the problem.

Jaci Russo:
Across the board, right? Not just based on salary. Just anybody.

Jay Goltz:
No, no, you can leave it at 40 for hourly. But if you’re salaried—I mean, the thing people don’t realize all the time is, if you’re on salary, you’re also getting paid when you take off for whatever. I mean, it goes both ways. And I have people who are perfectly happy with the way it is—I’m happy, they’re happy—now the government’s telling us, “Oh, we have to go change this.” But if you simply want to get rid of the abuse, you could simply say: If you’re a salaried employee, at 50 hours, you get time and a half. That would have solved the problem, I believe. This is a very clumsy fix.

Loren Feldman:
You still would have the documentation problem, wouldn’t you?

Jay Goltz:
Well, yeah. Like I said, I understand why they’re doing it. And I’m not one of these people who hates regulation. I think the government needs to have some regulations on some stuff, but look at what they did. They raised it, from 35 in six months, it’s going up 65 percent. Really? 65 percent. They couldn’t have taken it to $50,000 and left it there for a while? I just think it’s over-reach.

Loren Feldman:
Shawn, Jaci: Will it have an impact on either of you?

Jaci Russo:
It won’t for me, because we work 32-hour weeks.

Jay Goltz:
Ughhhh. [Laughter]

Loren Feldman:
Couldn’t you still have overtime?

Jaci Russo:
I almost don’t talk about the 4-day work week, because I know it puts Jay into a tizzy.

Shawn Busse:
I’m just here to watch.

Jaci Russo:
Right, right.

Jay Goltz:
And enjoy.

Jaci Russo:
Yeah, I don’t think we can have overtime if we’re not even working 40 hours a week. Like, I don’t know how this will affect us. But I’m watching to see if something changes.

Loren Feldman:
Isn’t it conceivable that you could have a crush, and you could have people who end up having to work 40 or 50 hours in a given week?

Jaci Russo:
Well, the only time that’s ever happened, the people who did that work were named Russo. [Laughter] They did it to keep their company going and do whatever. I do, for sure, take advantage of the flexibility of my job. And so there are times when I’m working at night, because I didn’t work during the day, because I went to a kid’s school activity or whatever.

Jay Goltz:
Wait a second, though. This does affect you. Let’s think this out for a second. Do you have employees who make less than $58,656?

Jaci Russo:
Yes.

Jay Goltz:
Okay. This is saying that you can’t just put them on salary. You have to pay them hourly, which means that there’s gonna need to be some documentation now about the hours they’re working. I mean, that is the reality.

Jaci Russo:
They’re gonna be very sad.

Jay Goltz:
Is that a problem?

Jaci Russo:
No, I mean, the documentation is not that hard. We will do it. But the reason why we have the schedule that we have and work the time that we work is that the creative types in my industry aren’t real fond of documentation. And in the agencies where I worked before starting this one, it just became a system of lies where the graphic designer, for example, did not track his time all week long like he’s supposed to. Now he has to turn it into payroll. And so, he just makes something up and turns it in. And I thought, “Well, that’s just not a good system for anybody.” So we adapted and do it this way. And it’s worked pretty well for us for 23 years. But if we have to have documentation, we’ll have documentation. We’re still gonna only do a four-day workweek.

Jay Goltz:
Keep in mind, though, you have exposure now, meaning you hired this person. You thought they were great, and it turns out, they’re terrible. And they run to the Department of Labor in whatever state they’re in, and they say, “I’ve been working 60 hours a week for this woman. She’s not paying me overtime.” And then they call you, and they go, “Well, we’ve got a complaint that you’ve been making people …” And you go, “No, that’s not true. They’re only working 32 hours a week.” And they go, “Great, send us your records.” And you say, “yYeah, I don’t really have any records.”

Jaci Russo:
Right. No, that’s a fair point. So it will affect us, in the sense that we’ll have to have records now. You know, I’m sure that I could pull the data of everybody’s logins for emails and for our Basecamp, and for all of our tools. And you can see quite clearly, no one’s logged in and doing any work in those things. But I’d rather not have to do that retroactively. So, yes, in answer to your question, Loren, it will affect us. We’ll have to start tracking things differently.

Jay Goltz:
You certainly could make documentation saying that: You’re not allowed to work overtime, and if there’s an exception, you need to contact me. You certainly, I think, could do something to—

Jaci Russo:
I like that.

Jay Goltz:
My point is, this law is not really affecting you. You’ve got the same exposure today that you’re going to have then. Well, no—are they salaried? They are salaried.

Jaci Russo:
Salaried. Yep.

Jay Goltz:
All right, I take it back. They are salaried. Now this is going to affect you, because now they’re going to not be able to be salaried. So yeah, sure.

Jaci Russo:
Right, right.

Loren Feldman:
Shawn, any impact on you?

Shawn Busse:
No.

Loren Feldman:
Your salaries are too high?

Shawn Busse:
Salaries are too high. We live in a really expensive city. I shifted the company a long time ago. Interestingly, we were hourly for a long time, and I sort of had this theory that, to Jaci’s point, getting people to track their time, if you pay them by their tracking, it would create more accurate timekeeping. I don’t know if that actually held true, and it created a lot of other problems. So just sort of an overarching change in the company towards a greater level of professionalization. And doing higher value work meant paying people more money, choosing to do certain types of work and not other types of work. So I guess in some ways, we’re fortunate in that this doesn’t impact us. It means my payroll is really high. But I guess…

Jay Goltz:
And in my case, I have 130 people. It’s affecting two people. So it’s not the end of the world. It is affecting two people who I’m going to have to decide on. You know, the one guy—if you recall, they were going to do this a few years ago, and so I had to have the conversation. He’s 50 years old. He said, “I haven’t punched in since I was 20 years old at a pizza place.” So he wasn’t happy about it. They backed off, so it wasn’t an issue. So it’s causing a little issue. It’s not the end of the world.

Shawn Busse:
I think this is another good example of who’s abusing the system. And the folks that are abusing the system, I think, by and large, are large corporate chains that love the idea of having a quote-unquote salaried manager at a low price point that they work 60-70 hours a week. And what happens over and over and again: You’ve got a lot of small business owners, some, I’m sure, who abuse the system, but by and large, you’re getting caught up in a fix that’s designed for a different group, which is larger corporations. That’s going to impact smaller businesses. And this is kind of the theme, I think, of a lot of regulation: It’s that intentions are good, but it creates an undue paperwork burden on small business owners. And I think that’s the frustrating part of it.

Jay Goltz:
Here’s another issue. This is a national thing. How could you have the same number? Shawn, you think you’re one of the highest income areas in the country?

Shawn Busse:
We’re pretty high, yeah.

Jay Goltz:
Let’s say you, California, New York. Okay. How do you do that same number for you, California, New York? Fine. And then have it for Alabama, Mississippi, where the average income is so much lower?

Shawn Busse:
It’s crazy. It’s totally crazy.

Loren Feldman:
Well, I think the answer to that—it may still be crazy—but I think they determine the number based on indexing to the lower cost areas. Jay, in your case, I didn’t realize it’s only going to affect two people. That makes it sound like this is not really a money issue for you. It’s more the bureaucracy. Is that right?

Jay Goltz:
No, no, no, it is a money issue. Let’s talk about one person in particular. What do you do about the person who’s making $50,000 a year: It’s the market rate. They’re being paid well. They’re happy with what they’re making. I’m happy with paying it. They’re salaried. And now, I have to—well, I guess it is the paperwork. Now, I have to say to them: You can’t be on salary. Or I have to go pay them $8,000 more. Or: Okay, you’re no longer an exempt employee. You’re now hourly. You’re now non-exempt, and you need to document your time. And when you’re off for a day, you’re not going to get paid.

It is a problem with one or two people. I mean, that’s the problem with drawing a line in the sand somewhere. That’s why I say, if they would have made it 50, there’s a lot of people in this country making $50,000-some a year. Lots. They could have gone from 35 to 48, and it would have taken care of some of the problem. But you know, like I said, I understand they’ve got a problem. I don’t know that this is going to fix it in the big corporations. Here’s the problem. So now they pay the manager $58,656, and they still work 70 hours a week. Did that really fix the problem?

Shawn Busse:
I don’t think there’s an easy answer to this. I think from a small business perspective, one drawback towards—so you can look at it through the larger, cultural perspective of: Hey, we want to do right by people. We want a society where people are paid fairly, and we need regulation, because large corporations are really abusive to their employees, for the most part. It takes away the competitive advantage that small businesses have, where we can go, “You can work at those large companies, and they’ll just totally abuse you. Or you can come here and have a great experience and we’re really innovative and how we pay people.” And so it’s sort of like applying a cookie-cutter methodology to everybody, even though I think small businesses like creativity. I think that’s the problem with all of these kinds of labor and wage laws.

Jay Goltz:
With that being said, there are certainly some small business people who—I don’t know if taking advantage the right word, but—

Shawn Busse:
For sure. Oh, yeah.

Jaci Russo:
We just passed—or, not we, they just passed—a law in Louisiana, that you no longer have to provide a lunch break for minors.

Shawn Busse:
For children. Your state is so f-ed, Jaci. It’s such an abusive state. It’s crazy. It’s like a corporatist.

Jaci Russo:
Tell me about it. It’s awful.

Jay Goltz:
Which is why we all agreed the government does need to have some regulation. I don’t have a problem with that.

Loren Feldman:
Let’s move on to the next one: non-competes. The FTC believes that by banning non-competes, they will free up employees to take better jobs or to start their own businesses. They expect a lot of business starts and new jobs as a result. Business groups are opposed—big business groups in particular. They see employees stealing the secret sauce and running off to a competitor. Do any of you use non-competes?

Jay Goltz:
I have. And I think there’s so much nonsense in what you just said, repeating what they’re doing. First of all, there’s a difference between a non-compete and confidentiality thing. The secret sauce? I’m not a labor attorney, but I believe that can be covered by a confidentiality agreement. They’re not the same thing.

Loren Feldman:
You’re absolutely right.

Jay Goltz:
I read some of the stuff. They said, “Oh, there’ll be more free flow of information and more best practices.” Oh, great. So you can figure out how to do something better. And like, “Oh, let’s share with all your competitors.” Again, it’s not going to ruin my life. They did carve out, people making a lot of money can still get them. Have people been abusing those? I guess? I haven’t been.

Shawn Busse:
Again, it’s the same situation, right? It’s these businesses where, I mean, come on, they’re making hairdressers sign non-competes? I mean, it’s just crazy.

Jay Goltz:
You know why they’re doing that. They’re doing that because the hairdresser has a following, and when they leave and go to another salon, they take their clients with them. The question is: Do you really think you’re gonna stop that, for God’s sake?

Shawn Busse:
Yeah. What do you think, Jaci? I mean, kind of the industry, we’re sort of adjacent here. You know, I remember meeting a guy years ago who worked at an ad agency. He brought in like a million dollars a year in business to the agency. One day, he up and left, started his own thing, and I promise you, a bunch of those clients went with him. What’s your take on this idea?

Jaci Russo:
That’s the risk, is that you absolutely can have, whether it’s an agency business development person who walks out the door with a client roster and starts to have an agency. I’ve seen it in my market over and over and over again. Or a TV newscaster who has a huge following, a radio DJ who leaves to go to a competitor. I think it’s very sticky. I think that those non-competes can be abusive, but they also, in some ways, protect the business that invested a lot of resources in building that person’s brand.

Jay Goltz:
But then it gets back to: Okay, but it’s their brand. This one’s tricky. Part of me thinks, “Okay, business could use a little protection from that.” But on the other hand, I think it’s laughable when they go, “Oh, it’s going to spur a lot of new business.” I think that’s just laughable. “Oh, I would have started a new business, but I can’t because I have a non-compete. Oh, now that I don’t have a non-compete, I’m gonna go and leverage up my house and quit my job and start my new business.” Really? Really? That’s going to be the difference between starting your own business. I have a hard time believing it’s going to make any meaningful effect on that. Am I wrong?

Loren Feldman:
I think you might be a little bit wrong.

Jay Goltz:
Just a little, though. That’s my point. I’m not saying it won’t happen. I just doubt it’s gonna be a big engine driver for the country.

Loren Feldman:
Are you aware that, in California, non-competes are effectively banned? So Silicon Valley hasn’t been able to use non-competes, and there are a lot of people there who credit it with the success—to whatever extent you consider Silicon Valley a success. You know, you’re talking about tech businesses where there really are secrets, and it doesn’t really seem to have put the brakes on there. And certainly, you have people leaving companies and starting businesses there.

Shawn Busse:
I think this is largely a good thing. I generally think it’s something that’s abused more than a fair situation. And I also think it makes for—I might insult some people here, but I think a lot of times non-competes are a representation of a lazy business, meaning that the business hasn’t built itself in a way to where the customer is buying the brand. It’s buying a person within the business. And that can be a hard thing to change in some businesses, but it is something that you can do and should do as a business to not make it about a person, but to make it about the company. And I think a lot of businesses substitute these non-competes for being kind of lazy about it. I could be wrong on that.

Loren Feldman:
Is that something you think about, Shawn?

Shawn Busse:
Well, yeah, I thought about it from the minute I heard this story of the account manager leaving and taking all his clients with him. And I realized that I have to build a business where the value derived from it is from the team—not from a super smart individual, or super charming or super charismatic. And I think that’s often the problem in businesses. You know, in an attempt to be efficient, it creates sort of an Achilles’ heel with the organization. I see that a lot in ad agencies and marketing firms, where they say, “This is your point of contact. This is Bob. He’s your account manager.” And Bob makes himself really indispensable to the clients. And then when Bob leaves, the client’s like, “Wait a minute.”

We just had this happen with our insurance broker. We had an awesome insurance broker. The company she worked for was garbage. And when she left, they actually were really bad. They were like, “We’re gonna close your account,” and all that sort of thing. It was like, “Whoa.” You know, it’s very combative. And I was like, “Yeah, let’s leave these guys. They’re terrible.” But our person was wonderful. And so I think it’s a really good example of, you can have great people operating in bad businesses. And the bad business will use things like non-competes and threats and so forth to try to kind of keep the status quo. And so I like that this prevents that type of behavior.

Jaci Russo:
Shawn, have you also found that in a lot of situations, that one person—that cult of personality—tends to be kind of the way a consultative business goes? And so if you’re talking about more of a process and team approach, does that mean you put everybody kind of into pods, so you’ve got multiple points of contact for every client?

Shawn Busse:
Absolutely, yeah. I’ve pushed on that hard, even on the account management side. For the longest time, I would make the case to the client: We staff this with effectively two account managers for a couple of reasons. One is, you get diversity of insight and service. But the second is, you get redundancy. So somebody can actually take a vacation and things happen while that person is gone. And then, selfishly, I also know that makes the client really think about the company as a team of people, not one superstar. And so it’s always a two-person account team.

And then beyond that, we have our team members kind of in and out of the relationships. So you might have somebody who’s an art director come in and do a bunch of work for several months. You might have a graphic designer participate. You might have somebody who’s doing writing or analytics. So you’re kind of constantly cycling people into the client account so that the client really sees that the value is not just one really charismatic person. It’s actually a group of people working together.

And I think ad agencies and marketing firms and a lot of consultancies get that wrong. And they build it around the cult of the individual. And I know a lot of that is driven by, “Well, we need to be more efficient. We need to spend less hours. The less hours we spend with a client, the more money we’ll make.” But it’s a vicious cycle because then you get this problem of customers start to perceive that it’s one person doing all the work. And when that person leaves, then they start to question, “Well, why am I with this company at all?” So I think, for professional services businesses, this is really important, like really, really important, that you don’t have the cult of personality within your business. I don’t know, Jaci, what do you think?

Jaci Russo:
No, I agree, 100 percent. What’s interesting to me is we have some clients who found themselves in this position—two or three different companies—where they were the founder and they were the face and then they didn’t have the time to do the day-to-day work anymore. So in order to scale, it had to change. And then when they wanted to sell, it had to change. And so I think if you can do it right from the beginning, you’re gonna put yourself in a far better spot.

Jay Goltz:
You’ve got your banker person who you’ve got a good relationship with. They’re the ones fronting for you. They’re the ones making things happen at the bank. And sometimes the banks are no good, and this person decides to leave. I would say that would be a thing that I wouldn’t want them to have a restrictive covenant to go somewhere else, because they had to leave the bank because they weren’t giving the service that I needed. And I want to follow that person—and I have. So I can see where this is gonna benefit some customers.

Shawn Busse:
For sure. I mean, if my insurance broker had a non-compete, that would have sucked. You know, she’s great. And I want to follow her, because largely, we’re buying a commodity. I don’t really care. You know, it doesn’t matter. It’s health care. So, yeah, I think this is more often than not, it’s a tool for businesses that are actually not that great and haven’t built a brand. They’re reliant on individuals and their superpowers.

Jay Goltz:
Or they haven’t been good at treating their employees well. The employees want to stay.

Shawn Busse:
Yeah, yeah, that’s true, too. For sure.

Loren Feldman:
Let’s talk about TikTok. Lots of businesses, lots of individuals make a living on TikTok. I never thought it would come to this. I still don’t really believe it’s going to go away, but it definitely seems a little more plausible now.

Shawn Busse:
It’s not going to go away. No, no, no, it’s not going away. And I think the word, the TikTok “ban,” is such a misnomer.

Loren Feldman:
Well, they’re trying to force them to sell. And if they don’t, then they could be banned.

Shawn Busse:
Right. That is not going to happen. There is so much money on the table here that somebody is either going to get a payday or—yeah, it’s not going to get banned. That’s the hyperbole being pushed by the media.

Loren Feldman:
You know, I do think it’s interesting. I mean, on the one hand, it’s been described as a national security issue. That whole discussion is very vague. We don’t really know. I haven’t seen anything concrete about that. I don’t think there’s any evidence that it’s happened thus far. On the other hand, as you were saying, Shawn, there’s real money being made here. And it’s just hard to imagine that being blown up. But just suppose, just play along. Suppose it were. Problem for you, Shawn or Jaci?

Shawn Busse:
Not a problem at all for me, because philosophically, I’m totally opposed to TikTok.

Loren Feldman:
What’s the philosophy?

Shawn Busse:
I mean, I feel like the national security threats are not overblown. I think the ability to manipulate an audience is massive. And I think the fact that you have an owner who is not a friendly force, in terms of the United States, I think it’s super risky. And actually—

Loren Feldman:
Couldn’t you say the same thing of Instagram and Facebook?

Shawn Busse:
No! I mean, those are socially corrosive and cancerous. But that’s different from national security threats. And true, Facebook in 2016 was taken advantage of, but there’s a big difference when ownership resides in the United States versus when it resides overseas, and you have an active participant trying to undermine the country. So it’s a different situation. And I think there actually is evidence—and I know it’s cloaked and veiled—but when you see these national security people in front of Congress saying, “We can’t really tell you the full story, but it is bad.” I think it’s really worth paying attention to. That’s my take on it. I think it’s a huge risk to us, and I think this is the right legislation.

Jaci Russo:
I one hundred percent agree with every single word Shawn said. I was marking off my bullet points as he was talking. I’m like, “Covered, covered, covered.” I would add one small piece to that, which is, not only is it all that stuff, but if you look at the version of TikTok that’s served in the U.S. to the version of TikTok that’s served in other countries, it’s bad.

Jay Goltz:
All right, well, if you feel that way, I certainly support both of you. And Shawn, I think you should run for president of the United States. I’m just saying. [Laughter]

Loren Feldman:
Jaci, what were you referring to? What’s the difference between TikTok here and elsewhere?

Jaci Russo:
We have some international clients, and they talk about what TikTok looks like in their countries. And I talk about—now, I’m not a heavy TikTok user at all. I just have never gotten into it. It felt like it was turning your brain to mush more than the others, so I’ve kind of avoided it. But when they talk about how very rarely they see negative things, controversial things, divisive things, inappropriate things, and I look around at the people on a subway car with me… Now, part of it is the algorithm feeding you what you’re asking for. I don’t doubt that. I had a client one time say, “I don’t like TikTok at all, because it’s just half-naked girls in bikinis.” And I said, “Not on anyone else’s, sir, but yours. You had to click it to get it.” [Laughter] It was a really awkward board meeting.

So there is a little bit of you have to click it to get it. But there’s also the divisiveness. And I don’t want to turn this into a political episode, and I’m going to try to deliver this piece of information without… I don’t know how I can. When I look at the Gen Z approach and stance on what’s happening with Palestine and Israel, and how much of it is fueled by their consumption of media on TikTok, that tells me that there is a concerted effort to cause a generation to have a certain opinion about a political climate, that, oddly enough, is not shared by the mainstream media or a ton of other people. So that’s manipulation in its purest sense.

Shawn Busse:
Yeah. Yeah.

Loren Feldman:
Jaci, let me ask you this: One of the big reasons TikTok took off, I think, is because it’s got a different kind of algorithm. You can be more easily discovered on TikTok. If you haven’t built a following on Facebook or Instagram, you’ve got a problem. On TikTok, you could come in as a new user and establish a following more easily, which is why a lot of businesses have taken to using it. Have you used it as a weapon? Has it been effective for you?

Jaci Russo:
Well, my clients in the B2B space, it’s not a good match for them. So that’s how I’ve been able to avoid having to spend a lot of time on it personally, because I would never put a client on something I’m not intrinsically familiar with. And so, because it’s not a fit for my clients, it doesn’t require my time and energy. All that said, obviously, I’m aware of it. I’ve used it. I have an account. I follow the stats. I have to pay attention. If something changes, and it becomes something that would be valuable to one of my clients, then I’d have to be all up in it.

So I know as much as I can know without being a daily, habitual user. All of that to say, it’s fascinating to me to watch over and over again, new users—as you referred to them—get that immediate first rush, and that dopamine thrill of: I’ve gone, quote-unquote, viral. And then it drops off, and they have to work so hard to get back up again. That is baked into the U.S. version system, where you take off, and then you don’t stay there. You have to work to get back up there. And it is interesting to understand how much that’s manipulation, too.

Shawn Busse:
That’s such a good insight, Jaci. You know, it’s taking advantage of what’s called asymmetric reward, which is why gambling is so successful. Which is that, when you reward us consistently and predictably, we actually get bored with it and lose excitement. And what TikTok has figured out—and all the social media channels really—is that the asymmetric reward, “Oh my god, I’m winning. I’m winning. Wait, where did it go? Where did it go? Oh, I won again. Oh wait, where did it go?”

And so that piece is just fueling a dopamine response, which causes people to stay even more addicted to it. And this is a larger problem than just TikTok, in terms of social media and what it’s doing to our kids. But I think TikTok is particularly pernicious. And I think your example is exactly right. I’ve been watching that whole kind of thing unfold and going, “Wow, how is it that an entire generation is suddenly so politically aware about Palestine, having not heard about it forever?” I promise you the protesters had no involvement or investment in the Middle East prior to, like, a year ago.

Jay Goltz:
Well, wait, that’s not true. Come on. A lot of them are from Palestine. And they’ve been living with it their whole life. That’s clearly not true.

Shawn Busse:
Sure. Sure. But the white suburban kids who are suddenly politically active? That just doesn’t come out of nowhere. And I get it. What they’re seeing going on over there is really horrific. And we can talk about the whole leadership problem over there in Israel, but it is so interesting how asymmetrical it is, in terms of the response and how powerful it is in such a short period of time. This just tells me there’s just massive manipulation of the user base. Now, whether that’s coming out of China, or it’s that certain groups have figured out how to massage the system, I don’t know. But I think it’s so risky.

Jay Goltz:
Shawn, that was excellent—I mean it. That was truly an excellent other side that I didn’t think about. You have an excellent point to that, which is why you should be running for president of the United States.

Shawn Busse:
Only if you’ll be my VP, Jay. [Laughter]

Loren Feldman:
All right. Let’s come back to 21 Hats and reality here for a minute. I think these conversations about each of these changes underscores a couple of points. One is, there aren’t enough people who understand what goes into running a business. I think you guys will probably agree with me on that—and that if everybody did understand it better, some of these decisions might look a little bit different. Which brings me around to a question I’d like to ask you guys which is, we’re always talking about challenges here. There are always plenty of challenges, even when there aren’t new regulations and government changes to deal with. Do you ever regret starting a business? And do you ever think about what else you might have done? Or is there enough joy in building a business that that’s just not an issue for you? Anybody?

Jay Goltz:
Absolutely not. Never crossed my mind. It’s not easy. There’s 10 different challenges that come up all the time. But I’ve never regretted it. I’ve never thought about doing anything different. And I have accepted the fact that it’s not simple. And you just have to deal with what comes up. And there’s tremendous joy in owning your own business, from taking care of customers, to developing a staff and empowering them and giving them security and respect and satisfaction with themselves, to making money. So my answer is absolutely not. Never think about it.

Loren Feldman:
Shawn, do you ever regret it? Or do you find enough joy in what you’re doing that that just doesn’t occur to you?

Shawn Busse:
Here’s the thing: My personality is generally one where I don’t look backwards. I don’t find there’s a ton of value in looking backwards in order to find regret. I think looking backwards is valuable in order to think about how you maybe want to do things differently in the future. But that said, I mean, there have been moments for sure where I’m like, “What am I doing here? This is crazy.” Like, I’ll say, January of 2010, when the recession was late to Oregon and Portland and, boy, when it came, it really eviscerated me. And I really questioned doing it. I even looked around at taking a job, and it was just so depressing.

I didn’t do anything, but you know what’s really funny? I was just at an event where I heard from the guy who founded Ugg boots. I can’t remember his name off the top of my head, but he said something really thoughtful, especially for somebody who’s a little bit older: Every really terrible situation has kind of been the seed to grow into a flower of something good for him. And so he sort of changed his mindset when something really bad happens to think, “Okay, well, something good’s gonna be coming.” You know, it isn’t in the moment, but I think that I try to embrace that mindset these days. Because it is true the recession totally forced me to rebuild my business in a totally different way that ended up helping it grow in leaps and bounds.

Jay Goltz:
2008 forced me to buy a big factory building for super cheap that has worked out great, and without the recession, I would have never done that.

Jaci Russo:
I’m an accidental entrepreneur. But I don’t regret it for a minute. I think it’s been one of the greatest gifts of my life, even through the challenging times: 9/11, the financial crisis, Covid. Pick a challenge. I mean, we’re in oil-and-gas territory. So every time y’all get cheap gas, we get half of our workforce laid off. But through all of those, I am so grateful for what it has afforded me to spend time with my kids, to build a business and careers for 20-something people who I get to work with, to build the kind of company where I want to work. I wouldn’t trade it for anything.

Loren Feldman:
The time with the kids kind of makes me laugh a little bit. Because ever since I became a business owner, I’m working twice as hard for about 20 percent of the money.

Jaci Russo:
I was just going to say, I would put them to bed and then continue working in the day. But I got to have dinner with them at five. I got to read them a bedtime story. Obviously—they’re in college now. This was years ago when they were little—I got to be able to take off and go have lunch with them at school or go to their sporting events at three o’clock in the afternoon. There’s a tradeoff there. I still have to do my work at another time, but I wouldn’t have it any other way that I could do both.

Shawn Busse:
There was a worker on a job site that I was at the other day, and his shirt said, “The only profit I made today was knowledge.” [Laughter] I do think that’s an unspoken value I’ve gotten out of the business all these years: The ability to learn and kind of keep learning, as an owner, is just so incredibly high. And a lot of jobs aren’t structured that way. A lot of jobs are really structured to kind of do the same thing over and over again. And I think if you’re somebody who’s constantly curious and loves learning, you can’t beat entrepreneurship for that.

Jaci Russo:
Shawn, I have a new phrase for you. It’s called, “Learn it all. Not know it all.”

Shawn Busse:
Yeah, that’s good. That’s good.

Jay Goltz:
Okay, but you have to agree, the whole definition of entrepreneur is to take risks and that some people simply don’t have the stomach to do it. It’s going to be very challenging and difficult, and it’s just not for everybody.

Loren Feldman:
I don’t think anybody would disagree with that.

Jay Goltz:
Well, I have to tell you, people who are watching Shark Tank all the time? I’m afraid that a lot of the population thinks that entrepreneurship is all about getting the big idea. And that’s simply not the case.

Shawn Busse:
And also funding. That’s something that’s really changed in the last 20 years for me, which is, I used to sort of think of starting a business as about having an idea and the perseverance to pursue it. And you know, there’s just been, especially with Silicon Valley, a switch of mindset that entrepreneurship is about raising money.

Jay Goltz:
Yeah, they think that, “Oh, successful: he raised money.” Listen, just yesterday, I think it was in the Morning Report: Fox Trot in Chicago, upscale food place. There’s one two doors down from one of my stores. My kid’s in real estate and he was thinking of putting one of those into a shopping center, and I said, “I’d be real careful with that. Because all I hear about is they keep raising money. And then, poof, they just close one day, overnight.” And there’s a lot of that.

Loren Feldman:
I was intrigued by what you said, Jay, about a lot of people thinking that entrepreneurship is about the big idea. I’ve had a couple of conversations of late with people who defined entrepreneurship to me as doing something that has never been done before. And it kind of set me back, because I’ve never thought of it that way. I mean, obviously, if you’re lucky enough or smart enough to be in a position to do something that’s never been done before, and you can innovate a whole new business or industry, that’s a great thing. And people make a lot of money doing that. But I don’t see that as the definition of entrepreneurship. And I think I know a lot of entrepreneurs who haven’t done anything of the sort. Am I right?

Jay Goltz:
That can’t be 1 percent. I mean, that might be a 10th of a percent. Really, I mean, most people are better executors. They’re running a better restaurant. They’re running a better marketing agency. They’re doing something better, but how many people can come up with—it’s just like I said. It can’t be 1 percent of the businesses started that have some kind of new concept. I mean, we all hear about them, but that’s because they’re in the news. But most people are running businesses that have been around for years and doing a better job at it.

Shawn Busse:
I’m curious, to all of you: Do you see the word entrepreneur and the word business owner as different, the same? How do you respond when you hear that word?

Jay Goltz:
Different.

Jaci Russo:
Different, for sure.

Jay Goltz:
Different. When I say that, from being in business groups for years—I’ve been in four or five different business groups. When I look around the room at the 12 people in it—and this is just my case. I’m sure it’s not always the case, but I think there’s something to this—I’m usually only one of one, two, or three entrepreneurs. The rest took over the family business.

Shawn Busse:
So you see entrepreneur as a person who starts something, as opposed to—

Jay Goltz:
Who took the risk that started something.

Jaci Russo:
I would take that and add to it, because an entrepreneur doesn’t just start one thing, I think that they tend to continue to look at how to change, advance, grow, nurture, improve, invent. It’s not a one and done, where a business owner owns a business and runs the business.

Jay Goltz:
If they started it from scratch by themselves, you can’t say they’re not an entrepreneur.

Jaci Russo:
Sure.

Shawn Busse:
I don’t use that word to describe myself hardly ever.

Jay Goltz:
I never do, because it’s just so filled with—I just think it’s pretentious on some level. If someone goes, “What do you do?” I don’t go, “I’m an entrepreneur.” I own a picture framing business and a furniture store. I’ve never said that to someone. I just find it too much, which gets interesting, because Shawn, I noticed on your signature—you sent me an email—you call yourself “founder.” And I find that interesting, because my guess is you might have the same issue I have. I don’t want to call myself an entrepreneur. And now I don’t want to call myself CEO, because that’s got so much negative baggage attached to it.

Shawn Busse:
Yeah, you’re right. There’s a lot of baggage on both ends of that spectrum. I think the thing that I’ve not appreciated about the word entrepreneur, especially the way it’s manifested in maybe the last five or 10 years, is sort of this hero-like cult. Like, “Oh, he raised $10 million.” Or, “She did X, Y, and Z.” And it gets celebrated in the media and these publications, this-rah-rah-rah kind of thing. And there’s often so much emptiness behind it.

With all the stuff that happened with Adam Neumann and WeWork, that’s a really good example for me of the thing that I struggle with when I hear the word entrepreneur and why I don’t use it for myself. It’s these folks who hype up the situation, and when you look behind the curtain, it’s just really ugly. And so, I don’t know that business owner is the right word, but I almost gravitate more towards that. Because to me, there’s a sense of, I really appreciate building something meaningful that has substance behind it, whether it’s huge or small or whatever. And I don’t know that there’s really a word for that.

Jay Goltz:
Oh, it’s a problem. I agree with you. Business owner? Okay. No baggage with that, which is why you put “founder.” Okay, founder, nothing wrong with that. But you say CEO? Wow. What that means today is not pretty. And then, like you said, the entrepreneur thing? Just swashbuckling, raising money, borrowing money. It’s like, “Yeah, not so much.”

Shawn Busse:
And I know that’s not true for a lot of people who call themselves entrepreneurs.

Loren Feldman:
A lot of people.

Shawn Busse:
A lot. I get it, I get it. I really do. It’s just interesting. It’s almost like we lack the language to describe what I’m talking about when I talk about that type of entrepreneur. And I think that’s largely who listens to this show, honestly. I think it’s meaningful people, people who are trying to build something thoughtful. They care about the people who work for them. You know, the people I’ve met.

Loren Feldman:
What are you calling them? Who are those people?

Shawn Busse:
I don’t have a good word for it.

Jay Goltz:
I’ve got the name. This is what they’re called. They’re called 21 Hatters. [Laughter]

Loren Feldman:
Well, as with many issues we discuss here, I think we have no solution to this one. I would love to hear thoughts from anybody who listens to this. Please let me know what you think. And where do you draw the line? What’s the difference between an entrepreneur and a business owner? But in the meantime, my thanks to Shawn Busse, Jay Goltz, and Jaci Russo, and to our sponsor, the Great Game of Business, which helps businesses use an open-book management system to build healthier companies. You can learn more at greatgame.com. Thanks, everybody.