What it takes to run a business

Podcast

This week, we’re replaying one of my favorite conversations of the year, a Q&A session we recorded in May at our 21 Hats Live event in Ann Arbor, Michigan, with Ari Weinzweig, co-founder of Zingerman’s Community of Businesses. If you’ve already listened to our conversation with Ari, I encourage you to listen again. It’s worth it.

And if you haven’t heard it, well, you’re in for a treat. Much of the discussion focused on a topic that haunts just about every business owner, and that’s pricing. Specifically, Ari talked about how he learned to charge enough to run a healthy business and why he’d rather go out of business charging what Zingerman’s needs to charge than go out of business never knowing whether customers would have paid the true cost of great food and great service. (Spoiler alert: They have not gone out of business.)

Not surprisingly, the 21 Hats Live participants had lots of questions for Ari, including how he and his partners decide whether to launch a new business, how he and co-founder Paul Saginaw have maintained their partnership for more than 40 years, how he and Paul are approaching succession, and whether he thinks of himself as successful, which prompted Ari to share that his mother never stopped pleading with him to take the LSAT. You know, just in case.

We’re re-playing the episode in part because we took Thanksgiving week off from recording but also because it offers a little taste of what it’s like to attend a 21 Hats Live event. As you may have seen in the Morning Report, I’ve just announced that our fourth annual in-person event will take place in Cincinnati in May. Once again, it will be a terrific opportunity to connect with others who understand what it takes to build a business. If you’ve ever wished you could spend more time with people who really get what you’re going through, this is your chance. We will have peer group conversations on topics you help pick. We’ll get VIP tours of iconic local businesses. We’ll eat good food. We’ll build relationships. And we’ll leave inspired.

But spots are limited. For more information and to register, please check the newsletter I sent out on Sunday. Or shoot me an email, and I’ll make sure you get the invite. You can reach me at loren@21hats.com.

This week, Liz Picarazzi and Jaci Russo compare notes with Ted Wolf on their very different journeys to integrate generative AI into their businesses. For Liz, it’s been frustrating. She resisted AI at first—but while she’s ready to go now, her COO, who also happens to be her husband, still isn’t there. That’s one reason Liz says she feels as though she’s been spinning her wheels. Jaci’s path couldn’t have been more different. She jumped in more than two years ago, took every course she could find, and now has custom GPTs talking to custom GPTs talking to custom GPTs. The AI tool she built delivers 10 fresh, fully vetted prospects to her inbox every morning. “It will find the person in charge of marketing,” she says. “It will find their LinkedIn profile. It will find the company website. It will find their competitors.” And it has already produced two new clients. Plus: As this especially challenging year winds down, Liz, Jaci, and Ted reflect on where their businesses hit expectations and where they fell short. Jaci notes a sales hire that failed. “I would have liked to have not spent the money on that person and had this epiphany without the pain,” she says, “but I think those two things just go hand in hand.” Liz cites her $400,000 tariff bill: “It really hurts, and it makes me angry,” she tells us. “But in terms of revenue, we’re doing well, I gotta admit. Thank God for New York City rats and trash.”

This week, we welcome another new voice to the 21 Hats podcast: Channon Kennedy, who takes us inside the side hustle that’s become her second full-time job. Channon is the inventor and patent holder of the Morgan Square, a clever measuring tool—here’s a demonstration—that’s racking up awards, expanding its distribution, and carving out space for a woman founder in a traditionally male-dominated industry. This is a true bootstrap story. Channon’s numbers are modest enough that she still does most of her own fulfillment at night after her day job as a banker—and she loves it. “Every time I get an order,” she tells Paul Downs and Lena McGuire, “I feel like I'm wrapping a Christmas present. I'm just so excited that somebody wants something that I've created.” Plus: Paul checks in with an update. After posting his best year ever in 2024, he was blindsided when sales suddenly stalled earlier this year, forcing him to lay off a third of his employees. Sales have since rebounded, but now he’s staring at a backlog and a different dilemma: Does he hire aggressively to meet the higher demand—or play it safe until he sees how 2026 begins?

This week, we dig into employee ownership with two people who’ve lived it: Kris Maynard and Justin Jordan of Cathedral Holdings, a 100-percent employee-owned ESOP since 2011. Kris and Justin are enthusiastic proponents of ESOPs, but they’re also candid about what can go wrong. Yes, ESOPs come with big tax advantages. But the transaction can be complex. The debt can fundamentally change the risk profile of a business. And perhaps the most under-discussed challenge of all: not all employees embrace employee ownership. Some see it as little more than a glorified retirement plan. And here’s the thing: an ESOP can be a far riskier retirement plan than many understand. They differ from 401(k)s in that there's no regulation requiring an ESOP to sequester its employees’ retirement funds. If the company fails—and like all businesses, ESOPs do fail—those nest eggs can vanish. Kris and Justin explain how they’ve addressed these issues and what they might do differently if they were starting over. They also emphasize an important point: Not all ESOPs are created equal. “If you’ve seen one ESOP,” Justin likes to say, “you’ve seen one ESOP.”