Episode 19: How Do You Handle the Fact That a Lot of People Don't Like You?
Guests:
Laura Zander is co-founder and CEO of Jimmy Beans Wool.
Jay Goltz is founder and CEO of Artists Frame Service and Jayson Home.
Producer:
Jess Thoubboron is founder of Blank Word Productions.
Episode Highlights:
Laura Zander: “Every time somebody doesn’t work out, I go in this kind of a deep depression of, ‘I suck. And if I was a better manager, this would have worked out.’”
Laura Zander: “I don’t think I’m running that business. I think that the business is running me.”
Jay Goltz: “We had the strongest economy we’ve ever had. Unemployment was at a record low. Why in the world will we not get back to normal in six months?”
Full Episode Transcript:
Loren Feldman:
Let’s do a quick update. Laura, the last time we talked to you, you told us you were about to get on an airplane and fly to Texas. Did that happen?
Laura Zander:
No, it did not. I am actually going to go this Monday, so I delayed it.
Loren Feldman:
Why?
Laura Zander:
Well, I was going to go because we were going to be hiring a new person and onboarding her and there was some drama around that. I wanted to be there for that. But then we ended up not hiring that person and we decided that, without any super significant urgent reason for me to be there, it wasn’t worth the risk, and that we’d let things play out for a couple more weeks.
What I have decided is I’m going to go on Monday and then I’m just going to stay for two weeks there. Instead of going there Monday, coming back Friday, going there Monday, coming back Friday, I’m going to go there Monday, come back the following Friday, and then I’ll stay here in Reno for a couple weeks and quarantine in Reno, and then I’ll go back to Texas for two weeks. Maybe I’ll just keep doing it that way for a little while.
Loren Feldman:
Are you comfortable about the travel? Was that part of the reason you put it off?
Laura Zander:
I feel comfortable. I don’t have a problem. But Doug was a little nervous about it. It was more for him. He thought it would be better if I didn’t go, and that’s what you do.
Jay Goltz:
Oh, isn’t that sweet?
Laura Zander:
Yeah, we’ll have a whole other discussion about being married to your business partner.
Jay Goltz:
That’s a different show altogether.
Laura Zander:
Yeah, it is. It wasn’t necessary quite yet, and it actually worked out really well. The woman whom we hired in January to be our GM, she ended up walking out last week. It worked out better that I was gone, because that kind of forced the issue, and it forced us to have conversations over Zoom and phone and Slack, and that forced our communication issues to a head. It meant that the separation happened much faster than it would have if I had been there in person. It made things a little cleaner.
Jay Goltz:
Could you put some color on the “walked out”? Does that mean she called you in the morning and said, “Listen, I appreciate the opportunity, but this is not for me, I’m quitting”?
Laura Zander:
No.
Jay Goltz:
Did she not call you at all and you found out through the grapevine?
Laura Zander:
Yes.
Jay Goltz:
Did she go ahead and scream at some people, “You’re a bunch of losers and I’m out of here”? Did she just not show up one day?
Loren Feldman:
I think you already got a yes, Jay?
Jay Goltz:
No, no, I didn’t get the whole picture.
Laura Zander:
I got a Slack message from our HR manager there that, when the HR manager got there that day, the general manager had already been in there that morning, cleaned her desk out, came over, and just said, “Will you please terminate me? I would like to just go on unemployment and leave.” I have not heard from her. We had a conversation on Slack the day before she left, and I don’t think she was happy with that conversation. Again, our communication styles collided. Anyway…
Loren Feldman:
Laura, let’s back up for a second. Let’s just make clear, this is the company in Texas that you bought, I think around December. They supply yarn. They were one of your biggest—if not your biggest supplier, and now you’re running that business. They’ve been struggling, as you’ve told us, because they supply yarn to brick-and-mortar yarn shops around the country, most of which were shut down, obviously.
Laura Zander:
Yeah, I mean, I would disagree. I don’t think I’m running that business. I think that the business is running me. But, yes.
Jay Goltz:
Did you accommodate her in terminating her?
Laura Zander:
Yeah.
Jay Goltz:
And did you have any qualms about that?
Laura Zander:
No.
Jay Goltz:
Because you felt like you owed it to her to let her go on unemployment?
Laura Zander:
It just seemed easier, yeah.
Jay Goltz:
Okay.
Laura Zander:
I don’t know that I necessarily owed it to her. But yeah, I’ve been in a funk for the last week because I feel like I’ve failed. There are a thousand things that I could have done better.
Jay Goltz:
Wait, let me help you with that. The fact that she quit that way tells you it was okay because if she was the grown-up who you wanted to run that business [while] you’re not there, she would have called you like a grown-up and said, “Listen, I’ve been thinking about our conversation. This doesn’t seem like the right fit for me, and I appreciate the opportunity. I don’t think this is going to work for either of us. I’m gonna, by the end of the day…” That’s what grownup professionals do. And the fact that she didn’t do that tells you she really wasn’t up to the task. For the amount of money you were paying her, that’s what grown-ups do.
Laura Zander:
I know, and the bottom line is the job was too big for her. It just was. She had run or managed the business years ago, but it was a much different business. It was a reactive business, as opposed to a proactive business. It sounds like she had done a fantastic job before. But we’re running things differently. I’d had that conversation with her multiple times. I’d given her the opportunity to go out with grace and just say, “Look, if this doesn’t work, it’s okay. We can totally talk about this. I’ll help you find something else.”
Jay Goltz:
Okay, good for you. Then you were professional and you did try to do it in the most civilized, nice manner. Good for you. You’ll be more deliberate the next time you hire for that position—
Loren Feldman:
You didn’t hire this person, did you Laura? You inherited her, right?
Laura Zander:
No, I hired her.
Jay Goltz:
Back. She hired her back. She used to work there.
Laura Zander:
She had worked there and then was gone for a couple of years and then I brought her back.
Jay Goltz:
When I was your age or a couple years younger perhaps, I literally—not exaggerating—went through 10 production managers in my production facility framing pictures. And every time I hired a person, I would dig in. “The last one was wrong, but this guy, he’s the guy!” And then would I dig in for a month or two or three, and then it would crap out, whether I fired them or they quit. And then I brought a consultant guy in who sent me the most poignant letter, and all that matters is one sentence. He said, “Jay, I figured out the problem.” Maybe two sentences… “You keep hiring production managers, and you think you’re hiring CEOs.” I got it.
What that meant was, I was 30 some years old, and I thought that when you hired somebody who was older than you and put them in a production thing that you’ve never done, that they’ll just be able to run the business. What I realized was, he was saying to me, “You needed to manage them more.” Now in hindsight, I realized something he didn’t even know, which is I was hiring burnouts. I was hiring people who, for the kind of money I was paying, made no sense. So the next guy I hired 24 years ago, was 27 years old, and the amount of money I was paying was a great opportunity for him. That guy is still working for me. It was all about the hiring. I didn’t know what I was doing with the hiring.
Laura Zander:
Tell me, as you’re letting these people go, you’re going through the 10, what’s the ripple effect on your other employees? Are they scared all the time?
Jay Goltz:
No, not at all. This is the way it worked. I had, I don’t know, 20 people working in production, and it was just like with the substitute teacher in school. This is exactly what would happen every time. I’d hire this new person, introduce them, and I almost walked away. I’m telling you, I had enough going on. I figured, “Oh, this guy knows more than I do. I’ll just leave him alone.”
Laura Zander:
Right.
Jay Goltz:
“Okay, Bob, you need to get 87 pictures framed every day.” Okay, so the first day he’d get 87. “Oh my God, I got the right guy.” The next day, 88. The third day, 84. The fourth or fifth day, 51. “Hey, what happened?” “Well, it was just a bad day… there were some problems with the…” It was just like at school. They would get a feel for the guy, and then as soon as they figured it out, boom! They slammed him like kids in high school. “Oh, he’s really nice. Okay.”
It kept happening, time and time again. And what I realized in hindsight, like I said, I was hiring burnouts who were never good at what they did. I’m embarrassed to say this at this point, but looking back, I had a framing factory on a third-floor walk-up loft with no air conditioning. What kind of winner who’s 53 years old is going to take that job? I had a guy who was working at Coca Cola, honest to God. What kind of manager who worked at Coca Cola is going to leave Coca Cola to work for Jay Goltz framing pictures? So, what happened with him? He just went to lunch and didn’t come back.
Loren Feldman:
Laura, tell us about your situation. Do you know who you want to hire? Do you know what you want to do?
Laura Zander:
No. Here’s the sad part. So, she left, and as it turns out, nothing has slipped through the cracks yet. It’s not been a tremendous increase in work for anybody else. I went to everybody, and I’m like, “Okay, how is this gonna affect you?” And they’re like, “Well, it’s not really.” Where I thought it would affect us most is that now I don’t have a point person, but I actually do have a point person, because I was actually talking to a couple of the other people there, a couple of the other managers, more than her anyway because it was just easier to have conversations and get straight answers. That’s part of me going there next week and spending the next two weeks is I would like to learn the production side of it. I’d like to learn what’s happening.
Loren Feldman:
Are you thinking you might not have to replace her?
Laura Zander:
I don’t know if I’m going to.
Jay Goltz:
You need to replace her. You need a manager there. You’re not there, which means either you need to bring someone in, or maybe one of your existing managers can be promoted to that. But this is like Animal Farm. This is not just going to run itself and everyone’s going to be happy. You’re going to have issues. You’re going to have people who need to be managed. You’re going to have people not coming in on time. There needs to be a manager.
Loren Feldman:
Jay, I want to go back to something. You asked Laura about terminating this person versus having her quit, in which case she wouldn’t have been able to collect unemployment. What were you thinking?
Jay Goltz:
I would want to know more. I’d want to know more things like: did you take her out of another job? Was she working hard the whole time? Was it your fault that this didn’t work out? Now, at this point, are you even going to get charged for the unemployment? Because now I’m not even sure it’s going to cost you anything because some of the states aren’t charging back. I’m not being vindictive against somebody.
Loren Feldman:
Explain how that works, Jay. In normal times, how does a business get charged?
Jay Goltz:
The quick version is: this is in Illinois, my guess is it’s the same everywhere. Whatever they end up getting for unemployment, you end up paying for plus about 30 percent, except you don’t get a bill from the state of Illinois going: “Hey, that guy who you fired? Here’s your $14,000 bill.” No, what happens is it goes into your rate and your rate goes from 4.2 to 4.4.
Loren Feldman:
That rate meaning you pay that percentage of payroll to cover unemployment?
Jay Goltz:
Yes, on every employee up to like $13,000. You are paying for it. It’s just split up, and then it’s over three years, so instead of getting a bill for 14 grand, you end up paying another thousand dollars a quarter for the next three years. You are paying for it, though, so you do want to control your unemployment expense.
Loren Feldman:
Laura, does this change your thinking about what you should do in this situation?
Laura Zander:
No, not at all, because I’m aware of this and knew that’s exactly what was happening. But I’m also kind of hoping that with Covid and everything else that the unemployment laws are a little more lax right now.
Jay Goltz:
It sounds like it was the right decision. It sounds like she shouldn’t have been put in that job, and that’s fine. She didn’t just not show up one day. She at least showed up and asked. I had someone who—this just happened—the receptionist, she just stopped showing up.
Loren Feldman:
That is what just happened here.
Jay Goltz:
No, no, no, this woman came into the HR person and said, “Will, you terminate me?” My receptionist just didn’t show up to work. So my HR person sends her an email saying, “Are you resigning?” Doesn’t respond to her. She goes for unemployment. Unemployment sends a thing to us and says she’s looking for unemployment, and the woman said in the letter that she wanted to torture us, so she wasn’t going to just quit. So I said back to her to the receptionist who came to me, “Maybe this isn’t the right job for you if you can’t come to work on time, which I know has been a problem. I’d be happy to work with you. Just tell the manager that you’re going to be looking for a job, and we’ll work with you.” As soon as I told unemployment that, she goes, “Thank you. Perfect.” She denied the unemployment.
Laura Zander:
How do you handle the fact, Jay, that a lot of people don’t like you? That this woman probably goes home at night and is like, “Jay this,” “Jay that,” and “He’s so unfair,” and “Blah, blah, blah,” and, “If he was smarter, they would be doing this, and they would be doing that”? I really struggle with that. Am I the only one who struggles with stuff like that?
Jay Goltz:
I would say that everyone struggles with it until they finally realize, “Hey, you’re the boss. It goes with the territory.” And I’ve got to tell you, whatever…
Loren Feldman:
Laura, tell us a little bit more about that. What are you hearing? What are you feeling?
Laura Zander:
Well, every time somebody doesn’t work out, especially if it’s somebody who I’ve worked directly with—and I’m exaggerating a little bit, and I am much better at it than I was five years ago, and maybe that’s the growth of my outer shell—but I go into this kind of a deep depression of, “I suck. And if I was a better manager, this would have worked out. And if I had been more clear, and if I had done a better job at this,” and I can visualize all the things that they’re saying when they go home at night about how I failed at this and…
Loren Feldman:
Wait, are you imagining these conversations? Or are you actually hearing them?
Jay Goltz:
It doesn’t really matter. Either way.
Laura Zander:
I’m imagining, but I know they’re happening as well. They’re absolutely happening. When they’re not true, they’re fine, but I know that I’m not perfect, and I know that I make mistakes, and I know that there are areas that I need to be better in. So those are the things that haunt me.
In this example, with this manager, we had a conversation last week or the week before where I was just like, “I’m sorry. I know I need to do better in this, and I really appreciate you giving me the feedback that you’re having a hard time talking to me about X, Y, and Z. I’m going to work on that, I really am.” I’m usually really open about my weaknesses, but then to know that your weaknesses are being used against you, and that you’re not getting that back… I don’t know. When somebody leaves, and I recognize that I’m complicit in that… If I was Jay, it may not have turned out this way.
Jay Goltz:
Except Jay’s 20 years older than you, and when I was your age, I was having the exact same issue. What I’m telling you is, you’ve got a God complex—
Laura Zander:
I know.
Jay Goltz:
—and you think that you’re supposed to be perfect and do everything right. And the fact of the matter is, you didn’t kill her. You didn’t have her sent to prison. You know what? You gave her an opportunity, it didn’t work out, she’ll go find another job. You’re just going to have to learn you’re on a good and noble cause. You think about all those wonderful employees who are with you on this mission to do nothing more than take care of customers and provide for their families and provide for a return on your investment. And you’ve got to give the rest of this up because it doesn’t matter. You’ve got 30 other people, 40 other people who you are a wonderful boss with, they thank you, and they feel good. And you’ve got hundreds or thousands of customers, and you need to live in that world and give up this other stuff. Because that’s like a baseball player going home thinking, “Oh my God, I struck out today right when they needed me. What am I? Oh my God.” Leave it on the field.
Laura Zander:
All right, okay.
Jay Goltz:
You don’t sound enthusiastic. [Laughter]
Loren Feldman:
Laura, are you feeling some battle fatigue? This has been a lot lately.
Laura Zander:
Yeah, for sure. I was okay like two days ago, but then yesterday there was an issue down in Texas. I’m trying to figure out how to hold people accountable from three states away during a pandemic where we just found out somebody might have been exposed, and the quality’s not there.
Loren Feldman:
The quality of the yarn that they’re producing?
Laura Zander:
Yes, we’re having some quality issues.
Jay Goltz:
You just answered my thing, which is, you need a manager there. That’s a problem.
Laura Zander:
Yeah, you’re totally right. Way to bring it back.
Jay Goltz:
Yeah, that’s the point. It’s not a matter of holding accountable. It’s just called Management 101. When you say, “hold them accountable,” did they do it on purpose?
Laura Zander:
No.
Jay Goltz:
They need some management. It is what it is.
Laura Zander:
Exactly. Okay, great. I need a manager, but I can’t get a manager today.
Jay Goltz:
Why?
Laura Zander:
I have to deal with these problems today.
Jay Goltz:
Why?
Laura Zander:
Well, logistically because it is 9:27am. I’m on the West Coast, so it’s 11:27am there. Even if I were to go through LinkedIn or whatever, I don’t know if I’ll even be able to schedule an interview until this afternoon. I don’t know if I can get them to show up by five.
Jay Goltz:
I’ll ask you the question I know the answer to: Did you write a really good ad and put it out?
Laura Zander:
No.
Jay Goltz:
Of course not. That’s what I’m talking about. As soon as we’re done here, go write a really good, compelling ad talking about… it’s going to be like, “Running your own business. Report directly to the boss who’s three states away. I need someone to build a corporate culture, to get the job done.” And write something that, someone who’s working somewhere else is going to go, “Oh my God. This is that dream job I’ve been looking for my whole life!” And then they send you this golden resume, and you look at it and you weep, and while you’re weeping, you’re dialing the phone, and you hire them and you hug and life is grand.
Loren Feldman:
Jay, it sounds like you’re trying to get that person from Coca Cola to apply for the job.
Laura Zander:
Yeah, exactly.
Jay Goltz:
No, I’m talking about the 27-year-old guy I hired who was working at a crappy company that didn’t care about quality, that didn’t care about their employees, who saw this as a great opportunity. I love this guy. I’m telling you, he’s my corporate soul to the company. He understands our whole thing. He treats the employees right. He knows when he’s got to take the hard line, he knows when they need a hug. I have that guy. There are people like that out there in the world. They are one out of a hundred.
Laura Zander:
Does he want to move to Texas?
Jay Goltz:
No. One out of a hundred.
Loren Feldman:
Do you need somebody who’s in the industry?
Laura Zander:
No, I don’t think so.
Jay Goltz:
Absolutely not.
Laura Zander:
No, I just need Dana. That’s all I need.
Jay Goltz:
The answer is, when you put the ZipRecruiter ad out, you’re gonna get 150 resumes, and you’re going to look through them and think, “Oh my God, this guy is a truck driver. Why is he applying? And this woman is a manicurist.” Yes, you’re gonna get 150 resumes, and in there, there are going to be three really interesting ones. And then there’s gonna be one of them who’s your person, but you’ve gotta buy a ticket to win the lottery.
Laura Zander:
Okay, all right. I was just kind of on the fence, because if the team there feels like they can do it themselves, do we need a manager?
Jay Goltz:
You answered your question.
Jay Goltz:
You need to put someone in charge. Maybe there’s someone there who’s your person. I’m not saying that’s not possible. Maybe there’s someone who works there who has the competency, the ambition, the nerves, and the ability to all of a sudden go from being their coworker to being their manager. You can find that out in a conversation.
Laura Zander:
Yeah, I think I might. So maybe offline, we’ll chat about that. Because I may have somebody who I think that could be a good fit for.
Jay Goltz:
I can think of half a dozen people who we’ve taken from working on the line, who had no self confidence, who we turned into managers, and there is no greater satisfaction, reward to life. Dale—one of my managers—one of them left, she moved down south for some reason. She goes, “Dale, I have to thank you. When I came here, I was just doing stuff, and you made me a manager.” When she moved down south, she got a job as a manager. Nothing is a greater success than taking someone who doesn’t have confidence but has ability and giving them confidence and training and turning them into the manager that they have latent in there. There’s a good chance that person works at the company.
Laura Zander:
Well, it’s funny that you say that, because that’s what the issue is. I feel like there’s so much talent in this organization, and there’s so much potential, but it’s never been developed. It’s never been a culture of trying to develop and pull out talent from the people who are there.
Jay Goltz:
And do you know why? I know why. You told me enough about it. I’ll tell you why. Wasn’t a husband and wife running it?
Laura Zander:
Yeah.
Jay Goltz:
Well, when a husband and wife run it—nothing against you—they can kind of run the whole place and never have to really delegate, because one of them will cover everything. The organization never gets developed properly, because one of the two of them is going to run the place. Whereas in my case, I was by myself. I had no choice.
Loren Feldman:
Wait a second, we’ve got to let Laura respond to that. Laura, your main operation, you built your business with your husband. Is Jay right about that?
Laura Zander:
Yeah. It’s very observant. Absolutely. And it wasn’t until—
Loren Feldman:
Have you figured it out?
Laura Zander:
Yeah, I mean, yes, I think so.
Jay Goltz:
Well, here’s the key. She got it bigger. That’s how I know she figured it out. And I’m not saying husbands and wives are bad. I’m saying, some of them never grow past a certain point because they can just run the thing by themselves and keep it down to that. There’s a number, it actually works. Yeah, you can do a few million bucks, but you can’t get to $10, $15, $20 million running it like that, and they didn’t. Whereas Laura has been successful at it.
Laura Zander:
No, they went big and then ended up dropping in half kind of thing. But it’s because they didn’t develop anybody. There were a few people who moved up in the ranks, but for the most part, no. They didn’t figure out how to scale it. We didn’t for quite a while. I mean, it took me a long time to figure out how to let things go and how to have other people do things and me not having to know every single zero and one and every single sentence that was written.
Jay Goltz:
You and 80 percent of entrepreneurs. That’s why most companies don’t get past a certain point. They just can’t let it go.
Loren Feldman:
Jay, let’s talk a little bit about your business. You keep talking about trying to find opportunities in this crisis. Have you seen any of late?
Jay Goltz:
I’ve just been sitting back waiting, and boom! There it blossomed. I got a call from my sales manager that goes, “Did you hear so and so is closing?” Really? A large frame shop that’s been around for many years.
Laura Zander:
Oh my God, our biggest competitor just closed too, last week.
Jay Goltz:
Yeah, so I go online. I see there’s a whole page he wrote on his website talking about it. And then, first thing this morning—this is all part of the story—It’s 7:30. I got a text from a rep who I’m tight with, she was servicing him, and she knew this was coming. And she said, “Did you see it?” She goes, “I said you should call Jay.” “Well, I don’t know if I want to.” So I said, “Have him call me.” So he immediately called me. We had a lovely conversation. And I think I’m going to be able to put together something to take the thing over, buy the building from him, and everybody wins. But he needed the push to do it. I think this is gonna work out for all parties.
Loren Feldman:
Laura, you said you had a competitor that just closed too. Do you see an opportunity in that?
Laura Zander:
Oh, it’s huge. Yes, I actually have an interview with the right-hand man of the CEO this afternoon. So not only does this open up a bunch of staffing opportunities for people who are now out of a job—
Loren Feldman:
A manager maybe?
Laura Zander:
No, not a manager, but the volume that they’re doing is going to trickle down. A big part of it will trickle down to us, I’m sure. It’s interesting, this company was one that was founded by a guy who had worked for eBay and it was VC-funded. They had raised, I don’t know, $100 million or something ridiculous. They were operating at a loss for years and years and really took a chunk out of our business—a big chunk. Then they got bought out by NBC Universal. Of course, this is the trajectory that you watch, then NBC just shut it down last week.
It’s just coming full circle, so now we’ll get back some of the market share that we lost to them. I’m assuming we will, I mean, we’re firing much better than we were five years ago, and eight years ago when they started. We’re in much better shape and much more solid. It gives us a huge opportunity, like on a couple different levels.
Loren Feldman:
Jay, let me ask you: you’re talking about possibly buying a building. I don’t know if that means buying the business as well.
Jay Goltz:
Yeah, that comes with it.
Loren Feldman:
Obviously it’s an investment. Are you at all concerned about making that kind of investment at an uncertain time like this? We still have a pandemic underway. Nothing’s back up to normal, the economy is obviously going through some difficulties. How are you processing that?
Jay Goltz:
I pull out my old playbook. I did this eight years ago. I bought a big building…
Loren Feldman:
You’ve told us about that.
Jay Goltz:
Same story now. I’ll simply tell the guy—he’s got no mortgage on it—I’ll go, “Look, we’ll put together a sales contract. I’ll buy it in two years.” It’s a solid real estate buy. If I can’t get the mortgage now, he’ll get rent for the next two years. Everybody wins. No, I’m not worried about it. I can’t say this enough. Listening to all the news reports, this is not the Great Depression. I’m so tired of hearing that. We had a pandemic. It shut things down. Yeah, it’s been brutal for a lot of people. Got it. The world will get back on its axis. Really, we will be okay. Will it be next month? Maybe not. But I’m so tired of these reports, “Unemployment is higher than during the Great Depression.” Did anyone mention that we’ve been shut down, so we laid some people off?
Loren Feldman:
Where do you draw the line between trying to maintain optimism and burying your head in the sand?
Jay Goltz:
Easy. This isn’t being optimistic and this isn’t burying my head in the sand. It’s looking at reality. We had the strongest economy we’ve ever had. Unemployment was at a record low. Why in the world will we not get back to normal in six months? That’s not being optimistic.
Loren Feldman:
You were just talking about businesses that are closing and not opening back up. There are a lot of those.
Laura Zander:
It’s not going to get back to normal, but it doesn’t mean that the new normal won’t be healthy. How about that? No, I don’t think it’s gonna be back to normal.
Jay Goltz:
Right, exact same page. There will be some businesses that won’t open. So my question to you is: Will those be the best businesses? Or will they be the ones that—like my friend’s daughter who works in a pet shop—they’re not wearing masks. She put herself out of business. Done! Over and out. Do I think there will be some businesses closing? Absolutely?
Loren Feldman:
They already have.
Jay Goltz:
Yeah. Will it be me? No. So now the market reopens and there’s less competition out there. How is that going to be bad for me? Why should I not be—forget the word optimistic—why shouldn’t I presume that these customers who were going to these other businesses that no longer exist, why shouldn’t some of them come to me? This isn’t about optimism. This is about simple math.
Loren Feldman:
Despite my challenge, you guys have just shown why you’re both successful entrepreneurs.
Jay Goltz:
And will continue to be.
Laura Zander:
It’ll be fine. It’s gonna be fine.
Jay Goltz:
Let me give you a practical answer to that though, because it’s a fair question if you phrase it a little bit differently: “Jay, are you concerned that this is gonna last longer?” So here’s the key. I’m gonna cut a deal with this guy probably. Let’s assume that I forge ahead. This isn’t gonna be in a week, it’s going to be over months. If things are going down the toilet in three months, I’ll probably get out of it, and he’ll have to go sell his building to someone else.
Loren Feldman:
That’s the answer I was looking for. You are assessing the risks, you’re aware that there are a range of possibilities, and you’re protecting yourself.
Jay Goltz:
No, I’m not betting the ranch on it. I’m buying some real estate, and I’ll put it in a contract. But by the time that deal goes through, it’s going to be two, three months from now. I’ll have a better feel for things.
Loren Feldman:
Okay, so we’re gonna try something different this week. I have a surprise quiz for the two of you. I’ve got four questions, all taken from this week’s 21 Hats Morning Report. And we’re gonna see how you guys do.
Laura Zander:
Is there a prize? Is there a prize?
Loren Feldman:
Yeah, you get to come back next week.
Laura Zander:
Oh God, I want something tangible.
Loren Feldman:
Hey, what’s more tangible than hanging out with us, Laura?
Laura Zander:
Awww, that’s a good point.
Jay Goltz:
Yeah, he’s got you there.
Loren Feldman:
Okay. Question number one. An employee-owned company in Vermont first realized something was up in early March when it saw its grocery store orders increase 600 percent. What does this company sell?
Laura Zander:
Flour. King Arthur Flour.
Loren Feldman:
Wait, wait. Let me give you the options, Laura. A) recycled toilet paper. Remember, this is a Vermont company. B) A new flavor of ice cream called stay-at-home strawberry. C) Baking flour. Or D) Hydroxychloroquine made from hemp. And your answer is…
Laura Zander:
Baking flour.
Loren Feldman:
Jay?
Jay Goltz:
That’s a good answer, yeah.
Loren Feldman:
And you’re right, that is the right company.
Laura Zander:
And the CEO said, “Are those numbers a mistake? Can you run those again?” And then she was in shock when she saw that they had increased 600 percent, because they had really been struggling with getting the millennials who were pro-gluten-free, and now they’re all baking.
Loren Feldman:
You’re warming my heart, Laura. All right, question number two. And this relates to you, Laura, as well. During the first two months of the year, the average domestic flight in the U.S. was carrying between 85 and 100 passengers. How many are flights carrying today?
Laura Zander:
I thought it was 34.
Loren Feldman:
Jay?
Jay Goltz:
I’m gonna go with whatever Laura thinks. She’s obviously paying more attention.
Loren Feldman:
It’s 39. There have been a lot of pictures on social media of full flights. Those are the exceptions still.
All right, this week, small business lending expert—this is your third question—Ami Kassar noted that the application for PPP loan forgiveness is quite complicated. And if you can manage to complete it—you’ll probably need some help completing it—your lender then has two months to review it before submitting it to the SBA. And then the SBA has three months to review it before approving or disapproving forgiveness. So that’s a total of five months in review, after you’ve managed to get the thing submitted. When is your first payment due? After how many months?
Laura Zander:
Four months?
Loren Feldman:
Jay?
Jay Goltz:
Whatever Laura says.
Loren Feldman:
That would be less than the time it takes to get it approved, so you would have to start paying before you know whether the loan’s been forgiven or not.
Laura Zander:
Exactly.
Loren Feldman:
Fortunately, that’s not the case, Laura. It’s actually seven months. But if you don’t get your act together and get that application filed, you could wind up in a situation where, even if you qualify for forgiveness, you’ve got to start paying back the loan.
Laura Zander:
Got it.
Loren Feldman:
You don’t want that to happen. Last question. You may remember an entrepreneur named Parker Conrad who started an automated HR business called Zenefits. Its customers were small businesses, and it quickly became a Silicon Valley tech darling valued at billions of dollars. Then it all fell apart and Conrad had to resign in disgrace, in part because they were breaking compliance rules about selling health insurance.
So what did Conrad do? He almost immediately started another HR startup called Rippling that does exactly the same stuff Zenefits did. In fact, he hired the engineer who built Zenefits for him to build Rippling. Forbes recently predicted that Rippling will be valued at billions of dollars as well.
My question for you guys is: When Conrad, who got lots of venture capital to build Zenefits, went back to the venture capitalists in Silicon Valley to raise money for his new startup after Zenefits had fallen apart, how much money was he able to raise? A) Are you kidding me? Zero, nothing, nada. B) $10 million. C) $100 million. Or D) $1 billion. Laura?
Laura Zander:
Oh, I didn’t read this one but I would guess $100 million.
Jay Goltz:
I would have guessed that, too, but it’s probably a billion because you want to finish the show making us both want to vomit.
Laura Zander:
Exactly.
Loren Feldman:
One hundred million doesn’t make you want to vomit?
Jay Goltz:
That does, too. It makes me kind of sick. The other one I want to vomit while I’m jumping out the window.
Loren Feldman:
Okay, you can just feel sick. It was $100 million to do the same thing over again.
Jay Goltz:
Okay, I’ve accepted the fact that none of that stuff makes any sense to the Laura world, to the Jay world. I’ve accepted that, and I don’t pay much attention to it, because it is what it is.
Loren Feldman:
Guys, we are out of time. My thanks to Jay Goltz and Laura Zander, as always. Thank you for sharing here in such a transparent way. Thank you for putting up with my questions where I try to get under your skin—especially you, Jay.
Jay Goltz:
Did you think it worked?
Loren Feldman:
Occasionally it works. On that note, thank you both.
