Episode 41: She Was a Hiring Goddess

This episode is dedicated to Ivy Garfield. Back in 1996, Jay Goltz had no real hiring process and the results to prove it. “My hiring success rate,” Jay tells us, “was probably, I don't know, 30 or 40 percent, which isn't much better than whoever walks in you hire.” And then he asked Ivy Garfield to take over his hiring. As Jay explains, Ivy brought an instinct, an understanding of how to assess people. “She profoundly changed my business,” he tells us. “She was here six years. Most of my key people she hired. They’re with me 25 years later.” Jay talks about the secret to Ivy’s success and why entrepreneurs like him tend to be terrible at hiring. Plus: Dana White talks about being disappointed by a mentor. And Jay and Loren offer an apology.

Episode 41: She Was a Hiring Goddess

Guests:

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

Dana White is founder and CEO of Paralee Boyd hair salons.

Producer:

Jess Thoubboron is founder of Blank Word Productions.

Episode Highlights:

Jay Goltz: “She profoundly changed my business. She was here six years. Most of my key people she hired. They’re with me 25 years later.”

Jay Goltz: Jay Goltz on why entrepreneurs are bad at hiring: “They like people. And they’ve got 20 other hats to deal with. They want to get done with this.”

Dana White: “It’s funny how Jay is saying, ‘I wish I could go back in time and tell myself these two things.’ Those are the very two things that he’s told me that have changed my business.”

Full Episode Transcript:

Loren Feldman:
Welcome Jay And Dana. As you know, the whole premise of 21 Hats and this podcast is that you have to wear a lot of hats to build a business, and no one can possibly be prepared to do all of the things you have to do to build a business. So how do people handle that?

One way I’ve heard from lots of owners is to try to find a mentor—somebody who can offer some guidance—and I’m curious what your experiences have been in this area. How do you find one? How do you know you have the right one? Jay, have you ever had a mentor?

Jay Goltz:
No, and not only have I never had a mentor, I’ve never had a job. [Laughter] So I was just plopped in. I started my business by myself. My father owned a dime store. I certainly had a good idea of taking care of customers, but I never knew what happened in accounting. He didn’t advertise. He had one employee, Edna.

I really was just thrown into the world by myself, not knowing anything. But the problem was, I didn’t know that I didn’t know anything. As I always say, I don’t want to brag, I think I’ve made every mistake you can make. It was extremely painful, extremely stressful, not efficient. I don’t think the word “mentor” was even used much back then. It never even would have crossed my mind.

Loren Feldman:
It didn’t occur to you to try to find one.

Jay Goltz:
It didn’t even occur to me, and I just went [on] for years: try, fail, try, fail. I did figure it out along the way. But it was just a long—I’m talking about 15-20 years.

Loren Feldman:
Looking back, do you think it would have made a difference if you’d had a mentor?

Jay Goltz:
Oh my gosh.

Dana White:
I think you had a mentor, Jay.

Jay Goltz:
Really? Who would that be?

Dana White:
You had a mentor: your uncle.

Jay Goltz:
Oh, no, no, no, no. I was very tight with my uncle, but he worked at my father’s store with him. I grew up, he played catch with me. But he was not at all… No, I really did not. I did have a few good conversations with people over the years that I can tell you off the top of my head—things that profoundly changed my head.

One was, I was in a business group. This guy was about 50-something. I was 30, and he said something to me that was maybe the smartest thing that anyone ever said to me. He said, “You know, Jay, everyone gets to a point where they realize they have limitations, and it’s usually when you hit 50.” Now when he told me that at 30, I said, “Oh my God, that’s pathetic. Not me.” And then I turned 50, and I thought, “Oh my God. Was he on the money!”

And then I had a guy tell me one time, he said, “Listen, in business, you’ve got three potential problems: partners, the bank, and a landlord.” That was very profound too. And you know what? I got rid of my landlords, almost all [of them]. I’m trying to get rid of my bank and I don’t have any partners. I think that was also profound.

And then the last one, I joined a business group. They’re mostly older guys. I’m probably 30. This guy looks across the table to me, and all he says is, “So have you toughened up yet?” Wow. That’s like the extent of my mentorship. The rest of it…

Loren Feldman:
Do you think it would have made a difference if you’d had one person through the years to talk to?

Jay Goltz:
Absolutely. I’m not exaggerating when I say this. I literally went through 10 production managers over a period of, I don’t know, two or three years.

Loren Feldman:
This is the person running your factory, making frames.

Jay Goltz:
Yeah, running the framing factory. I had probably 30 people at the time—20 or 30—and I was trying to get out of the back. I was trying to get someone to run the thing. And every time, I’d hire someone, I’d think this is going to work out, and then it didn’t.

I did have one guy, Monroe Roth. He’s 92 years old now. I hired a consultant, and he looked at what I was doing. And he said, “Jay, I figured out your problem. You keep hiring production managers, and you think you’re hiring CEOs.” Boom. Right on the money.

Loren Feldman:
What did he mean by that?

Jay Goltz:
Easy. I knew exactly what he meant. I thought, you hire a guy who’s older than you, who’s run a factory, and you tell him what to do. Then you go back to whatever you were doing, and he’s going to take care of it. That was half the problem, and frankly, he didn’t get the other half. He was totally on the money with that, that you need to train people and stick with them for months. You can’t just hire someone to leave him alone.

But when you’re 30, and you hire a 50-year-old, you think they know. They used to run a factory. You assume they know everything and you don’t need to do it. That was the first problem. The second problem was, for the amount of money I was paying, I was not going to get a really successful, smart person to run a factory. The guys who I was hiring were basically people who failed at their last job.

Let’s just take a number. Let’s say you decide to hire someone for $50,000 a year. For a 50-year-old guy or a woman, to pay them $50,000 a year to run a factory, that’s not a lot of money. So who am I going to get for that? I’m going to get people who are desperate for jobs versus I hired a 27-year-old. That’s a good job for a 27-year-old who’s making 40k, right? Here we are 25 years later, and he’s still with me, and he’s making a good income now. And if I would have had a mentor, oh my God. One 60-second conversation would have given me the clue.

Probably the biggest mistake I’ve made in business, for sure, cash-wise: I wasn’t charging enough. I was growing like crazy. I didn’t have a great bottom line and I should have charged 3, 4, or 5 percent more because I was giving a tremendous value and a tremendous service. Dana, you know, because I’ve talked to you about this. That’s one of the common mistakes of entrepreneurs. They’re always afraid to charge what they should charge. People in the framing industry use the phrase, “Oh, I want to be fair.” Or, “I don’t want to rip anyone off.” Those words are not the right word. The right word is: are you charging the “appropriate” price? And the appropriate price is, if you’re giving a tremendous service and a tremendous product, you need to charge a certain amount of money in order to have a bottom line. You cannot simultaneously give the greatest service and be the cheapest place. Those two things don’t work together.

Loren Feldman:
And if you had charged more, it would have presumably brought in a little bit more money, but it also would have slowed the growth. Would that have been a good thing?

Jay Goltz:
Absolutely. It would have been magical. I was growing at 20, 30 percent a year. It was nonstop chaos, and so, yes, it would have slowed the growth down, but I would have not gotten into the bank thing, of borrowing from the bank. I went to the bank—I remember this like yesterday—this is the first time I ever borrowed from a bank. I went to the banker with my financials, and I said, “Listen, I’m a little embarrassed. I didn’t make as much money as I thought I was going to.” Opens it up, goes, “Well, you made money.” And that was the end of the conversation. Now, if he wasn’t a banker, and he was a business consultant, he would have said, “Jay…”

Loren Feldman:
Or a mentor.

Jay Goltz:
Or a mentor, right. He would have said, “What? You’ve got a 2 percent bottom line. You’re borrowing money? Why don’t you raise your prices 5 percent? You won’t have to borrow money from the bank.” So yeah, it’s those kinds of things.

Loren Feldman:
Dana, how about you? What’s your experience been? Have you had a mentor?

Dana White:
I have. It’s funny how Jay is saying, “I wish I could go back in time and tell myself these two things,” and those are the very two things that he’s told me that have changed my business. I consider Jay a mentor. It’s not official. We didn’t go to the mountaintop and declare it under the stars.

Jay Goltz:
I do have some paperwork I’m sending you to sign though.

Dana White:
It started when we all met in Chicago for dinner and I was really, really stressed out. I just kind of casually mentioned an overview of what I was stressed out about, and Jay said, “Oh, no, you’re fine. That’s how business is.” And I looked, because it wasn’t so much what he said. It was how he said it, and with his experience, the ease at which he was like, “Oh, yeah, that’s fine.” I’m thinking these are red flags that I’m closing my doors, and that was the beginning of me saying, “He might have some insight.”

So over time, even our listeners on the podcast can hear, “Hey, Dana, you’re paying somebody so many dollars per hour and expecting them to do a $50,000 or $60,000 a year job. If you want your business to grow, you have to pay the person.” Well, that’s what Jay wishes he could have had someone tell him. Well, that’s what he told me, and it changed my business drastically. “Dana, raise your prices. Raise your prices. Raise your prices.” So we did, and that bump in price has helped. I’ve had a mentor, and Jay has become my mentor.

Jay Goltz:
Am I the main mentor? I want to be the main mentor.

Dana White:
You’re the main mentor.

Jay Goltz:
Woohoo!

Dana White:
Number one. Prior to Jay, I was on the lookout for a mentor, because I understood that it would be integral for my growth. I knew that, for my business, I wasn’t going to find a direct mentor. But I did know I needed someone who had enough business experience—

Loren Feldman:
Why is that, Dana? Is it because you feel like you’re breaking new ground and it’s a new business that other people wouldn’t understand?

Dana White:
Exactly. It’s not that other people wouldn’t understand it. It’s just because I’m doing something different and I’ve had to bend some of the business rules to fit my business. I knew I wasn’t going to find a woman who had operated a walk-in only, Lean manufacturing hair salon for 10, 20, 30 years. I knew I was the one. I know I’m doing it. But it doesn’t mean that I couldn’t find somebody who had years of experience in manufacturing, had years of experience in business in general, so that’s what I found. Unfortunately, that mentor-mentee relationship became more about control and power than it did about—

Loren Feldman:
This is not Jay you’re talking about here.

Dana White:
It’s not Jay at all. No, no, no.

Jay Goltz:
I have no power.

Loren Feldman:
Or control.

Jay Goltz:
And certainly no control. [Laughter]

Dana White:
Some years ago, I felt it was time for me to get a mentor. I’m having a lot of questions that I need answered from somebody with experience. I found a mentor, asked them if they would be my mentor, and they agreed. And over time, like I said, that relationship… although I did get very valuable things out of it. There were some things that I got that weren’t so good, or some lessons that I got that weren’t so good.

Loren Feldman:
Can you give us a hint? What are you talking about?

Dana White:
The lesson that I learned is, for myself as a business owner, there are some questions that you… “Grow up, Dana,” meaning there are some questions you need to ask up front to make sure that the intentions of your mentor are above board. And even though you may not get an honest answer—I was a little naive, thinking, “Oh, yeah, just mentor-mentee.” That was not the case. There were other things that they wanted, that I was unwilling to give, and that is how that relationship turned from mentor-mentee with a hint of control and power, [to] a need of control and power that were being exercised.

Jay Goltz:
You’re talking about ulterior motives, basically.

Dana White:
Ulterior motives. That’s it. They had ulterior motives, although they gave me valuable insight, really worked with me about this ever-looming fear I would have about my business—always worried that I was two steps away from failing or one decision away from failing—they helped with that. But what I didn’t know was there was this undercurrent of ulterior motive, and as I grew as a business owner, that came more and more and more to the surface.

Loren Feldman:
Did you meet this person and develop the mentor-mentee relationship just by chance? Or had you been looking for a mentor?

Dana White:
I had been looking for a mentor. I was at an event, and I saw this person. I heard this person speak. I said, “This may be the person. I think this would be the person that may be a good mentor.” So I approached them, and they agreed. For several years, we would meet and talk about business. I think one of the things I learned from a mentor-mentee relationship is that it’s not one-sided. that they, too, were getting valuable lessons from me, having been younger. My perspective on business was different because I was younger.

But like I said, there were ulterior motives that would occasionally percolate, and I was naive thinking, “Oh, no, no, that’s not what they meant. Oh, no, no,” right? But over time, and as I grew as a business owner, I realized that, yes, there are valuable things that they’re getting, but it can’t continue healthily if these ulterior motives don’t go away. I found that they were rooted in control and power. There was a power that was being wielded, a liking of seeing me squirm, or of having this younger person listening to you, taking what you’re saying as gold, and using that to their benefit. It’s not a great feeling.

But then you meet somebody like Jay who just wants to share what he knows. Then I’ve shared it with other people, and I’ve had people [go], “Can I talk to him? I need to talk to him. Mind if I call Jay?”

Jay Goltz:
I’m unlisting my phone number.

Loren Feldman:
I hope you sent them the link to the podcast when they asked.

Dana White:
Some of them are already listeners. And that’s another reason they know who Jay is.

Jay Goltz:
I have three things I want to share. I went to a business seminar. It was the owners of the White Sox, Jerry Reinsdorf and Eddie Einhorn, and they were talking. You gotta get perspective. I’ve never worked anywhere. I’ve never had a boss, so I’ve never really gotten feedback. And they’re talking about some of the screw-ups they did in buying the White Sox, and it’s like, I literally sat there and thought, “Oh my God. These two smart guys made mistakes. I thought I was the only one making mistakes!” I really didn’t understand it, which was really a breakthrough, which is why, Dana, when I said to you, “Well, listen, that stuff happens,” just getting off the hook with thinking you’re not an idiot is a valuable thing. I used to torture myself all day long, thinking about how stupid I was. And I realized that, when you’re growing a business, this stuff happens regularly. That’s the first thing.

Number two is, Dana has been—and I certainly didn’t do it for this reason—but this has been an extremely trying year with all the social unrest and I had my window broken and the whole thing. Dana has been a gift from God to help me understand this better. I thought I did, but I really didn’t. I’ve told her this: as much as I’ve helped her, she’s helped me. I’m not saying it always works out that way in every situation, but in this case, she has given me insights that I would have never been able to get anywhere else. She owes me nothing, and we are even. That’s number two.

And number three is, I like helping. I like picture framers. I love picture framing. That’s my main business. I like helping people with stuff that nobody helped me with because it was extremely frustrating. I like being on the podcast because I want to help ease the pain of all these people who are out there trying to figure this out, because being an entrepreneur is a very lonely thing.

Loren Feldman:
I’ve been dying to ask you about something that Laura Zander said on the show last week about hiring. She talked about how she has had success through the years, not hiring people to fill needs, but hiring people who she thought were good people [where] she could bring in and then figure out what they would do.

The latest example is a salesperson she hired who’s a long-time friend. He’d been a sales rep who had sold her company things through the years. He had moved on to do other things, and she decided she wanted to bring him in. She hadn’t been looking for a salesperson, but he was available, so they set it up. He’s now responsible for 50 percent of the revenue at Madelinetosh, the yarn supply business that she bought some time ago. So my question to you is: does that make sense to you?

Jay Goltz:
I think that certainly can work and does work. But I don’t know that that’s in place of figuring out what you need, putting an ad out, writing the right ad, but that certainly can work. I certainly wouldn’t call that, in my mind, a strategy for hiring. But if you happen to find someone you like, who you think is competent, who is into what you’re doing, yes, certainly, I think that would be a great thing to do. But I still think the conventional write a great ad, put it out there, interview 5 to 10 people, and find someone that’s right—that works, too.

Loren Feldman:
Which is what you did, Dana, when you hired your operations manager recently, correct?

Dana White:
Yes, so we hired the operations manager, we put out an ad, and several people applied. She applied.

Loren Feldman:
So you knew what you needed. You had a job that had to be filled, and fortunately seem to have found the right person.

Dana White:
Yes. When she applied, it was great. She applied, we interviewed her. She walked out, and we were like, “Whoa, that was great.” And again, when I was looking to hire her, I called up or texted Jay, said, ‘“Hey, this is what I’m thinking about doing.” And he said, “These are the things you need to look out for and hear what her references have to say,” which all added up. When she came on, we shut down the salon for two weeks so we could do a hiring drive. And it’s been working out great.

Loren Feldman:
Jay, you were talking before about how much you struggled hiring that production person. Was there a turning point for you with the company where you figured out—

Jay Goltz:
Yes, absolutely. Yes, here it is. I am interviewing. My turnover is horrible at this point. My hiring success rate was probably, I don’t know, 30 or 40 percent, which isn’t much better than whoever walks in, you hire. I mean, if you just hire whoever walks in, you’ll probably have a 25 percent success rate. Mine was marginally better than that.

So I’m interviewing this woman—I was 40, she was 35, let’s say—and I’m having a hard time with the hiring thing. And I asked her, she’s running a lighting showroom, selling fixtures, lighting fixtures. So I said, “How many salespeople do you have?” She goes, “Four.” I said, “How many did you have to hire to get to the good four?” And she goes, “Four.” I literally laugh out loud. I laugh and I go, “Wow, either your standards are lower than mine, or you’re some kind of hiring goddess.” Her name was Ivy Garfield. She starts hiring for me.

Loren Feldman:
You hired her.

Jay Goltz:
I hired her.

Loren Feldman:
What convinced you that she was—

Jay Goltz:
I figured I’d give it a shot. I needed a manager. Now, this was 1996. Most of the people she hired for me still work for me. She was a hiring goddess and I would sit through interviews with her, and then they’d leave, and she’d go, “What do you think?” And I’d go, “Yeah, I think Loren Feldman should work out okay.” “Are you kidding?!” And then she would give 10 reasons why it wasn’t gonna work out, and she was right. She profoundly changed my business.

Loren Feldman:
What did she know?

Jay Goltz:
Well, I’ll tell you what she told me, and then there’s the rest of the story, which I’ll share. She said, “I’m gonna tell you why I’m successful in hiring. My parents got divorced when I was a year old. My mother has no maternal instincts whatsoever. I basically had to raise myself, and I’ve learned not to trust anybody.”

Loren Feldman:
Wow. And that’s the secret to hiring?

Jay Goltz:
Absolutely. This is one of those things people are going to take offense when I say this. But I’m sorry, I just have to tell you, because this is going against something your mother told you and you’ve heard your entire life. When it comes to hiring: guilty until proven innocent. Just because someone goes, “Oh, I’m a hard worker,” doesn’t mean that’s true. You need to check it out. You need to call their references. You need to ask the right questions to really flush out—”Oh, you’re good with customer service? Tell me about a difficult situation with a customer. How did you handle it?”

I’ve always said this: entrepreneurs make the worst people hiring a lot of the time. Why? They like people. They want to talk about their company because they’re proud of it and they’ve got 20 other hats to deal with. They want to get done with this and they want to get that person hired. I’m as guilty of this as anyone. I was just doing it like that. And then over the years, when someone left—either I had to fire or they quit—I would do an autopsy. 80, 90 percent of the time, I would think back to, “Yeah, there was a red flag on the interview. I just didn’t want to pay attention to it.” Or, “I didn’t check the references enough.” Or, “She gave me her coworker as a reference, not her boss.” Hiring is an art and a science, and I didn’t get it. She profoundly changed my business. She was here six years. Most of my key people she hired. They’re with me 25 years later.

Loren Feldman:
Wow. She was only there six years?

Jay Goltz:
Yes.

Loren Feldman:
That’s amazing.

Jay Goltz:
Yes. They’re still with me. I have people with me 25 years, 24 years, 23 years. I’ve got a salesperson selling framing. He’s been with me 21 years. They’re still here.

She moved to Oregon. She would call me twice a year. I would talk to her. Today’s Thursday. Tuesday night, I got a call. She died.

Loren Feldman:
I’m sorry to hear that.

Jay Goltz:
And I have to tell you, I got up at 2:30 in the morning. I went in the kitchen. I started typing, and I just cried. She believed in me. She believed in my company. She believed in these people. It really has shaken me up. And part of the reason I’m telling you this is, anyone who thinks that business is just business… When you work with people, and you’re on the mission together, this is really the first person I can think of in 42 years that I worked with who died. It kind of shook me to my core.

I came to work, and I talked to the people who she had hired, and everybody was crying, and I said, “Good.” Ivy deserved people to be crying for her. And I owe her a lot. She totally put my company on a different trajectory, which is part of the reason why I’m thrilled to be able to talk to Dana and anyone else and help them, because she helped me.

Loren Feldman:
I’m sorry that you got that news.

Dana White:
I am so sorry to hear that. I was shocked.

Jay Goltz:
Yeah, me too.

Loren Feldman:
Dana does that guilty-until-proven-innocent thing make sense to you?

Dana White:
Yes, I like guilty until proven innocent. I like, everybody is on stage. That’s how I look at it. When I’m sitting down within a candidate, the Oscar goes to… I listen to their performance, and I glean from their performance what I can, understanding that they will break character at some point, and then that’s the meat of it. That’s when you get to see who and really what they are, and what they’re going to do. The way you can break through that performance, make cracks in it, is by speaking to their references. Because their references worked with them when the curtain was down behind the scenes, so that’s what I do.

Jay Goltz:
I’m not cynical. I’m not saying everybody’s a liar. If you want to hire great people—I don’t mean okay people. If you want to hire great people, and whenever I’ve done this speech in front of a bunch of experienced business owners, everybody’s head is nodding yes. Out of 10 people, one’s a great hire. Three of them would be okay, but just not at your business. They don’t like retail, they live too far. But they might be a great employee doing something else. So that gets us up to four. And then there’s another three or four who are just solidly mediocre. They’re okay, they’re not there. And then the last couple can’t keep a job. This isn’t about being cynical. This is about math. That’s what this is. This is about simple math.

Since I’ve adopted this, since I’ve gotten better at it, our hiring rate here is… I’d say 85 percent of the people we hire work out great. And I’m happy to say that one of the managers [Ivy] hired—I just coincidentally talked to her Saturday. I went up to her, and I said, “I just want to tell you something”—cause they know how I feel about Ivy. I’ve always used her as the gold standard—I said, “You’ve gotten just as good at hiring as she is.” And it’s true. My people have gotten better at it and as a group are better at it.

And I would challenge someone to tell me what is more important as a business owner than hiring the right people? I’d be curious, I would challenge someone to tell me what would be more important. And when I do speeches, I ask people in the audience. There’ll be 50, 100 people, and I’ll go, “Raise your hand if you’ve ever had some training on how to properly hire someone.” Almost no hands ever go up. It’s not even on the radar.

Dana White:
Since hiring our operations manager, we now have a waitlist for people for hire. We’re talking about, I had three people on October 19th. And we’re fully staffed with a waitlist.

Jay Goltz:
And for those of you who have been listening to this podcast since the beginning, I hope you’re as thrilled as I am that Dana is 10 years older than she was six months ago, a year ago.

Loren Feldman:
This year’s aged all of us, Jay!

Jay Goltz:
No, I mean it. Twenty years. I met you in New York at the Forbes thing that Loren was at, and I still smile when I think of this. You sat up there, and you said, “I don’t do messy.” And I laughed. I told you later, “Yeah, business is messy.” I know what you were saying, but I think you figured out that, yes, business is messy, and our job is to clean it up.

Dana White:
Yeah, the messy part can be, there are business owners who can get too in the weeds, and that’s messy. Business owners who don’t delegate properly, that’s messy. There’s business owners who need to be in control, and who have baggage from other jobs or insecurities from their life, and they bring it into the workplace, and that’s messy.

Jay Goltz:
Yeah, and dysfunctional.

Dana White:
Extremely dysfunctional. I had a conversation with an entrepreneur yesterday, and her leadership team, although qualified, are not empowered to do anything without picking up the phone and calling her, and it’s driving her nuts. And so I had to have a really candid conversation about how she’s contributing to that problem. She yells at them. She said, “I run my house the way I run my business, and vice versa.” I said, “These people that work with you are not your children.”

Jay Goltz:
Great, so then your employees and your kids will hate you. Great. That’s consistent.

Dana White:
I love what my operations manager said about constantly hiring, but she’s setting up an environment where we’re not having to do so all the time. What she’s seen by constantly hiring is that when a staff member leaves, we don’t have to adjust the business in order to keep the business running. In Ashley’s mind, the business comes first. “Here’s the business standard. This is what it takes to open and operate it.” So finally paying somebody who has the experience and the knowledge to make sure that the business stays consistent so we can grow is invaluable, so Jay, you’re right. I would have never hired an operations manager had you not said to me, and Laura—Laura said, “You can’t afford not to.”

Jay Goltz:
Right, and I only know that because I tried treating $18-an-hour employees as managers of 20 people, and it’s a different level. I only know, because like I said, I’ve done it 20 times wrong.

Can I just throw one thing in that you mentioned? Yelling is destructive behavior. End of the story. And for those entrepreneurs who say, “Oh, I’m just passionate.” No, you’re an asshole.

Dana White:
I have said this to entrepreneurs. You never, ever show anger.

Jay Goltz:
It screws people’s heads up. You have no idea what you’re doing to them. You have no idea what you’re doing to their head. You could remind them of their screaming mother, their father. It’s not right. You’re humiliating them. You’re humiliating yourself. It’s just destructive behavior.

Dana White:
I never show anger. I think I showed it yesterday on the phone with operations management:- disappointment.

Jay Goltz:
Oooh. Ouch.

Dana White:
That’s being quiet and letting it sit—the answer to the question that I’ve asked her—and letting it sit, and I’ll stay there for a minute to get an answer. And it’s not an answer to be condescending. It’s not an answer to prove a point. It’s an answer to get understanding. That yelling thing that people do, and some people do it because they believe from some sitcom they saw in the 70s that that’s how—

Jay Goltz:
No, no. That’s one of the last things that’s left that it’s okay to make fun of—the screaming boss. And it’s not funny. Here’s the key. It is more professional and more humane and more productive to quietly—if you’ve already told them something six times, and they’re not getting it—you call them into the office and say, “Dana, I’m sorry but we’ve talked about this six times. This is the wrong job for you. Today’s your last day.” That’s professional management. Humiliation in front of six people is not going to help them, is not going to help your business, and is going to hurt everybody. And believe me, 30 years ago, I was screaming because I was at the end of my rope, and I’m not making excuses for it. I was wrong. It’s bad.

Loren Feldman:
All right, we’re gonna do something a little bit different this week, which is Jay and I are gonna make an apology. I think I speak for both of us in saying: We don’t like to make mistakes, but we’re eager to correct them. And we appreciate it when somebody calls them to our attention. Earlier this year, over the course of several podcast [episodes], Jay, I asked you about things you were doing to try to stay on the offensive during a tough economic time. And we talked about how you had a series of conversations with the owner of a picture-framing shop who had announced he was closing that shop.

In the process, we made a couple of mistakes. Number one, we assumed that since we didn’t mention his name, his store, his location, that no one would know who we were talking about. But it turns out that some people in the industry did connect the dots. And in retrospect, we should have known better. And the second thing is—

Jay Goltz:
Let me take over from here. Let me take over. That was your side. You can take that half of it, and I share that with you. The other half is, I figured out in the middle that I really didn’t want to stick my neck out, and I wasn’t sure it was going to work out for me, so I offered to sign a lease, but I wanted an escape clause, and he didn’t want to do that. Okay, fair enough. And then I offered to buy the mailing list, because I was under the impression—wrongly and this was my mistake—I just assumed he was closing. So I said something—I don’t remember exactly what I said—about ways he made a mistake. I was wrong. I shouldn’t have made that assumption, because I had no idea.

Loren Feldman:
The mistake was you assumed you knew more about why he was doing what he was doing—

Jay Goltz:
I just figured he just wanted to close the shop and move on, which I completely understand and respect. He has a lovely business and, and he’s a lovely guy. And I will tell you, I was sick to my stomach when I realized that I said or did anything that upset him or gave the wrong impression. I am profoundly sorry. That certainly wasn’t my intent. I shouldn’t have made that assumption. And it sounds like he made a good thing for himself, and someone else is taking it over. Good for both of them.

Loren Feldman:
It’s worked out well for him. He sold the business.

Jay Goltz:
Yes, and I’m happy for him. And I’m happy for the person that did it.

Loren Feldman:
I have to say, when I picked all of the regulars on this podcast, I picked them precisely because I’d known them for years—especially you, Jay—and because I knew that they would all speak authentically.

Jay Goltz:
And unfiltered, perhaps?

Loren Feldman:
Well, as much as possible.

Jay Goltz:
Well, that’s a problem. I guess.

Loren Feldman:
There is a line somewhere, and I think we may have crossed it in this situation.

Jay Goltz:
Yeah, no, we did. I did. Not you. I won’t put this on you. This is on me. I shouldn’t have said that. And I feel particularly bad because he’s a really nice, good guy. And I like him, and I’m just grossed out that I caused him or anyone else any grief.

Loren Feldman:
I’m glad you said that, but I don’t want you to get too civilized. We want to hear your unfiltered thoughts as much as possible, as close to that line as possible. I’m curious, this wasn’t the first time that you’ve talked to somebody about the possibility of buying a framing shop. You’ve been through that before, right?

Jay Goltz:
No, I took inventory in my head. I’d say in the last, I don’t know, five, six years, occasions have come up that either I knew someone was getting older or I knew they were maybe selling. I reached out to—this would make the eighth frame shop. And four of them ended up not selling. They’re still running it. Okay, that’s fine. And three of them I called and said, “Listen, if you’re ever interested, call me.” They didn’t. They just sold to someone else. Maybe they don’t like me. I don’t know, which is certainly possible. And then this situation.

So I’m zero-for-eight, and at this stage, I think I’m done. This is the revelation. I’m trying to be disciplined, which has always been difficult for me. I’m a recovering entrepreneuraholic. I need to stop starting businesses. I need to stop buying businesses. My business is big enough. I never thought there was such a thing as that, but there is. And yeah, I need to stop doing that.

Loren Feldman:
Dana, you’ve thought about, as you grow your chain of hair salons, the possibility—especially given what’s happened this year—of not just building from scratch, but taking over an existing salon. Is that something that you still think is a possibility for you?

Dana White:
Yes, but not in the form of buying it. For Paralee Boyd, with the opportunity to expand nationally, unfortunately, several salons have closed. And for safety reasons, many stylists have gone into salon suites.

Loren Feldman:
What’s a salon suite?

Dana White:
A salon suite is a big space. That whole space is broken into individual salon suites, meaning there’s a sink and a chair or two sinks and two chairs. That stylist is in that suite by themselves.

So with an opportunity to expand to maybe two to five locations nationally, wow, what a time to come in and say, “Hey, I’ve got landlords saying, ‘I can give you a discount.’ Or you can rent from me at a discount.” That’s what I’ve been looking at, is the cost of build-out would be reduced, because I’m not spending as much. Because some of these salons are beautiful, and they’re already done.

Jay Goltz:
It’s good for the landlord. No, it’s good for the landlord, for everybody.

Loren Feldman:
If you bought one of these stores, to what extent does that make your job more difficult, because nobody does it quite the way you do it? Do you get an advantage if you have to retrofit the store? Do you get an advantage if you’re taking on people who have been working there previously and haven’t been trained in your techniques?

Dana White:
No. I’ve had people email me several salons that are for sale and most stylists in the salon don’t know that the salon is going to be for sale, and they are all full-service salons. They’re not like my salon. Buying a salon would be a challenge for me.

Jay Goltz:
A lot of small businesses just close. I mean, in the framing industry, there were 25,000 frame shops in America 10 years ago. Now there’s eight, so…

Loren Feldman:
Wait, wait, wait. Eight thousand, right?

Jay Goltz:
Eight thousand. Yeah. There were 25,000. Now there’s 8,000, but the bigger ones are the ones that are left, so that doesn’t mean the industry shrunk by—whatever percentage that is, 80 percent.

Loren Feldman:
Are people getting just as many things framed or is there less business?

Jay Goltz:
No, it’s a lot of things. It’s a combination of the Baby Boomers are, in large part, done framing, and that drove a lot of framing. People are putting pictures on their wall without frames, which is heresy, but actually people do that.

Loren Feldman:
That’s unbelievable.

Jay Goltz:
I know. It’s the beginning of the end of civilization, probably. But all right, whatever. Canvases that are stretched don’t take frames. And then there’s framed artwork you can buy in the stores now that, 20 years ago, there weren’t that many stores that you could walk into and find a bunch of framed artwork. Then there are the big chains. There’s lots of reasons, and then here’s one that people don’t think about. Do you have a TV hanging on your wall?

Loren Feldman:
I don’t, but I know what you’re talking about.

Jay Goltz:
Right. If the average apartment or house has one or two TVs hanging on the wall, wherever that TV is probably would have been a picture. That could be 10 percent of your walls in a house. There’s 10 percent right there. The stores that are selling framed pictures? That might be another 10 percent.

Loren Feldman:
Jay, you need a strategy to get TVs off the wall.

Jay Goltz:
No, my strategy is, the industry’s probably shrunk by 30 percent. I think it’s stable. My strategy is, just do a really good job. There’s people that do want to do framing, and it’s okay. And I will tell you, and I’m dead serious when I say this. I would challenge anyone: You put a frame on a picture, it looks better than without a frame. So, just saying.

Loren Feldman:
On that note, guys, we’re out of time. My thanks to Jay Goltz and Dana White.

Jay Goltz:
Wait, I have one more thing to say. Loren, can we dedicate this show to Ivy Garfield?

Dana White:
Ivy Garfield, yes.

Loren Feldman:
We can do that. We can do that. Because of the holiday, we won’t be taping next week, which means we will not have an episode the following week. But I hope you, Dana and Jay, and our listeners have a wonderful, but most importantly, a safe Thanksgiving. We do want to see all of you back here. Thanks, everybody.