This Isn’t Working. Is It Time to Give Up?
Introduction:
This week, Jay Goltz, Lena McGuire, and Jaci Russo tackle three challenges that business owners face, starting with a question that can be especially painful: How do you know when it’s time to give up? The question is prompted by an article written by the founder of an online pillowcase business who has concluded that Big Tech, soaring advertising costs, and changes to privacy rules have made it all but impossible to build a profitable brand online. Jay, Lena, and Jaci agree that the obstacles are real, but they’re not convinced that they fully explain the entrepreneur’s failure to get traction. Nor are they sure she should throw in the towel. In fact, they think she may have a promising product and offer some suggestions, but, says Jay, “It doesn’t sound like she’s got the big tenacity gene that is necessary to be in business.”
Next we turn to a Boston-area ice cream shop that got fed up with customers abusing its mostly teenage employees and posted a blistering Facebook message telling customers, in all caps, “STOP YELLING AT MY [FREAKIN’] EMPLOYEES”—except it didn’t say freakin’. The post went viral, winning more than 230,000 likes and widespread praise. But was it smart business? Jay, Lena, and Jaci are all in favor of standing up for employees, but they have serious doubts about this particular approach. Plus: Are family and medical leave programs a burden on small businesses—or a benefit that helps them compete for employees? And if our three owners could permanently take off one of the 21 hats business owners have to wear, which hat would it be? The episode is brought to you by Grasshopper Bank.
— Loren Feldman
Guests:
Jaci Russo is CEO of BrandRusso.
Jay Goltz is CEO of The Goltz Group.
Lena McGuire is CEO of Spóca Kitchen & Bath.
Producer:
Jess Thoubboron is founder of Blank Word.
Full Episode Transcript:
Loren Feldman:
Welcome Jay, Lena, and Jaci. It’s great to have all of you here. Today, as you know, I’ve got three stories ripped from the headlines, as they say. I highlighted all three recently in the Morning Report, and each one raises a question that I think business owners have to wrestle with. I want to hear how the three of you see them.
Let’s start with the first one. It’s kind of about whether it’s possible to build a profitable business selling online anymore. Let me summarize the story quickly. It was an op-ed in The New York Times. A woman launched an online business last year selling wellness pillows. She had some initial success, but the business never really took off.
Jay Goltz:
Pillowcases, not pillows.
Loren Feldman:
You’re right. Thank you! She had some initial success, but the business never really took off. She hasn’t been able to make the economics work, and she’s pretty much decided to give up. Her conclusion is that the world has changed. Between the power of Big Tech, the rising cost of digital advertising, and Apple’s privacy changes, she argues that it’s become almost impossible to build the kind of direct-to-consumer brand that companies like Casper, Away, and Warby Parker built a decade ago or so.
Do you guys buy that? Has something fundamental changed, or is this just what it has always felt like when a startup doesn’t work? Jaci, this is your world. Do you want go first?
Jaci Russo:
I would love to go first. Thank you, Loren. I think that we need to think about a couple of things. One, people aren’t buying less online. They’re actually, in some cases, buying more online. Even through the financial uncertainties that exist right now, what we see is that if people have just one product, one channel, one outlet, haven’t built a brand that makes them the top choice, that’s where you’re seeing a lot of price consideration and a lot of being considered a commodity, and not nearly enough being selected.
And so, when I read the article before we even talked about the podcast, I was immediately caught by a couple of things in the story, and I don’t know his whole business model, so, you know, I say all of this after just reading five paragraphs. But if I’m going to Amazon, and I’m asking Amazon to sort by price, that’s where you’re going to end up on the list. I’m going to look to the companies whose names I know. So are you doing other marketing to support your name brand awareness? Shoppers are going to look for the companies who are sponsored, who are best recommended, who have the most reviews. There’s a lot of work.
I think that there’s all of these quote-unquote, ‘influencers’ out there saying, you know, “Just two hours a day, you can have a billion-dollar business.” That’s bullshit. Sorry for the language, but it’s true. And it still takes a lot of work and a lot of effort to build a brand and develop a loyal following and be a profitable business.
Loren Feldman:
In her story, she quoted somebody she said was a friend who actually runs a business helping new brands get traction online, and she quoted this person as saying that if you want to do this kind of thing, it takes at least $500,000 of capital. Does that make any sense to you? Jaci?
Jaci Russo:
It does not. I think that’s an arbitrary number. I think there are plenty of businesses that have gotten off the ground and been quite successful for less, and plenty that have taken more. So that may be a median number, but that’s not a real number.
Loren Feldman:
The other thing that struck me about this is I question her premise. Her premise seems to be that 10 years ago, this was fairly easy to do, and she cites examples. But those examples, I’m not sure really make the point she’s trying to make. They’re all companies that did require huge investment capital, and I’m not sure it’s clear that any of them have really turned into a profitable business yet, at least 10 years down the road.
Jay Goltz:
Those were bad examples. I think that she used bad examples, I think. And I’m in a similar business. I’m trying to sell photo frames online. From what I know—and I’m no expert on it—everything she’s cited in there is true, to some degree. It is true. With that being said, I’m not convinced that it can’t be done at all, and the fact that she finishes it by going, “Well, I’ll never make any money, but I’m going to do it and make friends.”
Like, okay, you’re not a business person. Business people need to be warriors, and they need to figure out how things work, and they need to dig in and solve it. So I’m not convinced that she’s right, at all, but the stuff she talked about is absolutely—there’s some validity to the stuff she’s talking about.
Loren Feldman:
You’re referring, Jay, I believe, to the role that Amazon and Meta play.
Jay Goltz:
Right. No, I’ve got that exact problem with selling photo frames. The Amazon cut is tremendous—and I’ve talked about this before—being in business groups is very, very helpful. So I was in a business group with a guy who’s extremely successful online. It’s all he does. And I called him, and he gave me the name of some user groups. There’s user groups out there for people who deal with Amazon. So there are people out there who are figuring this stuff out. But it is a legitimate problem. He told me what percentage of his sale goes to Amazon. It was obscene. There’s no question that it’s gotten harder.
Loren Feldman:
Jaci, she also referred to Apple’s change in its privacy rules and said that it made it much harder to target an audience with specificity. Do you think she was right about that?
Jaci Russo:
Oh, 100 percent. Meta and Apple and Google have all gone through some upgrades based on GDPR, based on lawsuits, based on a lot of things. And there is a much harder time to be more selective, which again goes back to: What are you doing to be the choice? How are you letting people know that you exist and that you’re the right option for them?
Amazon is like being on a store shelf. That’s how we have to think about it. And so if I walk in the store knowing I need a product, but I don’t have a specific favorite product in mind, then when I stand in the aisle in front of the shelves that have all the chips, I’m going to be drawn to the chip I know and love, or I’m going to be drawn to try a new chip. What makes me want to pick your chip over their chip?
And so you’ve got to think about Amazon, in the sense that it’s just standing in the chip aisle, but in the grocery store, I can see all the chips. When I’m in Amazon, I can only see the five or six in the list unless I scroll down. And there’s a whole lot of fighting and jockeying for real estate position and eyeballs.
Jay’s right. Hiring an Amazon-specific agency, being in an Amazon group, understanding how to work the system—because if you’re just showing up and giving Amazon money and hoping for sales, there are a lot of people who are doing a lot more things who are going to be a lot more successful.
Lena McGuire:
I think that the person who wrote the article was a little naive, in that the barrier to entry is so low that a lot of people can get in. And then like, “Oh, I’m going to make millions doing this.” I mean, it’s pie-in-the-sky hopes and dreams, and is she really thinking about being a business owner and running a business? Like, having one channel and such a low barrier? I’m going to dedicate $50 to advertising? I mean, it just doesn’t seem realistic from the start.
Jay Goltz:
That struck me too, when I saw $50. Yeah, that was silly.
Loren Feldman:
Jaci, it was $50 a day on Instagram. Does that make any sense to you?
Jaci Russo:
I mean, put it back in your pocket. Buy yourself a very nice meal. There’s no way you’re getting a return on that investment. No way.
Jay Goltz:
The fact is, though, she said she’s got a product that is truly better than everyone else’s, and I’m not convinced that thing is not fixable, because it sounds like she doesn’t have a commodity, and everyone does use pillowcases. I’m not sure she shouldn’t be using a strategy and getting some PR first and having that drive it, because it was kind of an interesting story. The fabric’s made from a different product, and it seems like there’s a story there. But it doesn’t sound like she’s got the big tenacity gene that is necessary to be in business.
Jaci Russo:
Well, and Jay, I agree. I think when we look at the business, it sounds like, “I tried one influencer, and that’s as far as it went. I tried one approach with Amazon, and that’s as far as it went.” We need to have a multifaceted approach here. We need to hit it from a number of different options to really make an impact.
Loren Feldman:
Lena, we’re both trying to get traction with relatively new businesses. Did you relate at all to her struggles?
Lena McGuire:
No, I didn’t take her seriously. It just didn’t seem like the idea was developed enough. It sounds like there was a seed of a really good idea. I was very interested reading it. It was new and different, and it would resonate with certain people. But I just don’t think that, as a business person, she was developed enough to, like Jaci said, develop different channels, figure out what her differentiation was. Aand, you know, just putting everything into Amazon and Instagram and saying, “Well, it’s, it’s not working,” that’s just not enough.
Jay Goltz:
There’s a mentality problem. There’s no question that I’m successful, because when things weren’t going right, I would say to myself, “I must be doing something wrong. Other people are successful. What am I doing wrong?” And she, on the other hand, takes a very quick view of things and has convinced herself that, “Oh no, you can’t do this.”
Lena McGuire:
And even with her examples, she was using companies that are pretty much household names, rather than comparing heself to a startup. You know, it wasn’t like, you know, Mary Ann’s Cookie Shop. It was Away Luggage. These are pretty big names already, like Warby Parker.
Loren Feldman:
Well, she mentioned those names because there was a time when they were unknown startups and they became household names. Like I said before, I think they’re not great examples, but is that still possible to do? Do you guys think that still happens?
Jaci Russo:
Of course.
Lena McGuire:
Oh, absolutely.
Jaci Russo:
Companies become household names every day. And so if someone in her position would reach out to Sarah Segal at Segal Communications and look at how she does a job—we talked about it on a podcast with her recently. Getting news stories, getting influencers, having events, that gives you legitimacy, that gives you legitimacy, that gives you name brand recognition. That makes you a household name.
Lena McGuire:
And you have to remember that instant success doesn’t happen overnight. It takes years.
Jay Goltz:
It also doesn’t need to be a household name. She could do $200,000 a year, not be known by 99.9999 percent, and still make a nice living at it. So this whole household name thing is kind of ridiculous.
Jaci Russo:
She can do $2 million a year and not be known by anybody.
Jay Goltz:
Right. That’s the point. She doesn’t really understand business.
Loren Feldman:
The PR point is interestin, because there’s something going on there. I mean, she got this op-ed placed in The New York Times, which is not an easy thing to do, number one. Number two, I looked at her LinkedIn, and she worked at the Wall Street Journal for a while before going to work for a finance company. So you’d think she’d have the PR end covered.
Jay Goltz:
Oh, I didn’t even think about that. That’s ironic that she manages to get a story placed about how she’s failing, but she couldn’t figure out how to get a story placed about, “Oh, look at these wonderful pillowcases.”
Jaci Russo:
Right.
Loren Feldman:
Well, as a journalist, I will tell you, people who are willing to share their stories about failing have a leg up, and that’s not that surprising to me. That’s a more interesting story when somebody’s willing to share what’s gone wrong than a marketing story, “Hey, look at me. I’ve got a great product.”
Jay:
It’s your fault, basically, your people. [Laughter]
Loren Feldman:
That’s what I’m saying.
Jay Goltz:
Yeah, we got that.
Loren Feldman:
Okay, suppose she came to each of you and she bought what you’re saying. She hasn’t done enough. She’s gotta try more things. She’s gotta develop some grit. What would you advise her to think of, in terms of, how long do you give this a shot?
Jay Goltz:
You have to first ask her: How much money do you want to put into this? Because if she thinks she’s going to do it for free, that’s not realistic. So my first question would be: How committed are you to this? Or was this just like a passing fancy? Because the fact she calls it a side hustle, you know, I don’t know how serious she is in the first place.
Loren Feldman:
Okay, let’s do another edition of Beyond Small, brought to you by our friends at Grasshopper Bank. As you know, the idea is to have my guests address a question related to managing their businesses. I select the questions with Grasshopper’s help, and their only request is that you guys answer candidly, based on your own experiences.
Here’s today’s question: No business owner is good at or enjoys everything the job requires. If you could permanently remove one of those 21 hats that you have to wear, which one would it be? Is there a hat you would like to take off?
Jaci Russo:
Absolutely. All things accounting.
Loren Feldman:
And that’s because it doesn’t come naturally to you? You don’t think you’re good at it? You just hate doing it?
Jaci Russo:
I’m not good at it. I don’t enjoy it. It’s frustrating. It’s the least fun part of my job. And I don’t think my whole job has to be fun all the time, but if I was to rank all 21 things I do in order of preference, it would be number 22.
Jay Goltz:
It’s also passive. You can’t do much. You’re looking at history. It’s not like you can go out, “I’m going to have a great accounting day today. I’m going to make some money today, so I’m going to do some great accounting.” It’s bookkeeping. It’s not finding new customers. It’s not finding new solutions. There’s no creativity to it.
Loren Feldman:
Usually finding problems that you can address, that might turn it into a great accounting day?
Jay Goltz:
We don’t want to know about those problems. That’s the problem.
Jaci Russo:
I already spent that money.
Jay Goltz:
Yeah, we want to be—
Loren Feldman:
But you don’t want to keep spending that money and keep making the same mistake.
Jay Goltz:
Ignorance is bliss sometimes.
Jaci Russo:
Thank you, Jay.
Jay Goltz:
Sometimes we think everything is going great, and then when the accountant shows up, it’s like, “Oh, really?” I have an accounting degree, but I didn’t go into it for a reason. So I’m a little embarrassed to say, yeah, I’d probably have to pick accounting myself, because I don’t get into it. And that’s why I didn’t go into accounting. But I’m good at math. That’s how I got pigeonholed into going into accounting. So I can figure stuff out, but it’s not what I want to be doing all day long.
Lena McGuire:
The accounting part doesn’t bother me. I like playing with the numbers. I like figuring out ways to have more efficiencies. So, that’s a nice, fun challenge for me. I can’t stand lead generation. I don’t like networking. I don’t want to waste my time doing that. I want somebody else to give me a hot lead, and I’ll take care of it. I love the sales part, but I hate drumming up the business.
Loren Feldman:
That’s interesting, Lena. We’ve gotten to know you at 21 Hats Live events where you’ve seemed very good at networking. And you’ve told us that you’ve had success holding events at libraries where you invite people to come, and it’s not really a marketing thing. You’re not trying to sell them, but you’re answering their questions, and hopefully walking away having made connections. So you seem good at it. But you don’t like it?
Lena McGuire:
That part’s the sales part. That part is educating people, helping them, teaching them how to improve their lives, their homes. But actually meeting somebody face to face, I get panic attacks going to cocktail parties. I don’t want to go to weddings. I don’t want to go to funerals. Anywhere where I am in a group of people, I’m very uncomfortable. I just don’t like that. I have abandonment issues. I don’t want to arrive early and wait, because I think people aren’t going to show up. It’s very anxiety writing for me. I don’t like it.
If I could have somebody just fill that coffer with phone calls that people are expecting me, I have no problem making the call that is set up. I have a VA who sets up my discovery calls. She takes care of all that. All I have to do is punch in the numbers to call that person at the designated time, and I’m fine, because I’m asking them questions about what they need from me—is this a good fit for us—and setting up an appointment. That’s all sales. I can do that all day long, no problem.
Loren Feldman:
You have outsourced the lead generation, and it’s working for you?
Lena McGuire:
It is, yes. But I still have to work with social media and marketing. I like the behind-the-scenes marketing, but I don’t want to get out there representing myself. Representing myself as an expert in the industry is a different thing, but if I feel like I’m my own person, I really don’t like that.
Loren Feldman:
Jaci, have you tried to outsource the accounting functions that you are now performing?
Jaci Russo:
Oh, I do. I have a bookkeeper, I have a CFO. I have all the things. I just don’t like it.
Loren Feldman:
What do you actually have to do that you don’t like?
Jaci Russo:
I go through and double-check everything to make sure it’s accurate, because we have to have a double system. I’m the one who knows—you know, as much as we’ve put protections in place, I’m the one who has to actually make the final payment. Because on more than one occasion, spammer fake invoices have slipped through all the security settings we’ve put in place, and it’s like, “No, this is not a real invoice.”
Jay Goltz:
I’m getting one of those every two or three weeks.
Jaci Russo:
Two or three days.
Loren Feldman:
Couldn’t somebody else catch that stuff, Jaci?
Jaci Russo:
Probably, but sometimes it gets put into the system anyway, and so I’m the final word to make sure.
Loren Feldman:
Jay, you have a CFO. How much accounting are you actually doing?
Jay Goltz:
Not a lot, but, you know, I had the same guy for over 20 years, and I didn’t pay much attention to it. And then I had two pretty—not pretty—I had two disastrous hires after that who got out of control. And it took a long time to clean it up. So I mean, as long as you have a competent controller or CFO, you’re in good shape.
But if that person leaves, it’s challenging, because a lot of the resumes I got are guys and women who are working at big accounting firms in audit or something. And, like, if an entrepreneur hires one of those people, their head explodes in about two days, because they have no idea what working in a small company being a controller means.
It has little to do with doing auditing at Pricewaterhouse. So there’s no question, in all of my history, that has been one of the most difficult things to deal with. And I feel bad for smaller companies that can’t afford to pay a six-figure salary. I don’t have an answer for it. I don’t know how a $2 million company—I don’t know how you do that. Maybe you outsource it. But it’s a problem for a whole lot of people.
Loren Feldman:
What does that leave you doing? Are you sort of playing the same kind of role Jaci is of just reviewing to make sure?
Jay Goltz:
I don’t review the details. I’m reviewing the overall results, and I have a better feel for certain things than my controller does, because I’ve been in the trenches for years. I’m overseeing it. But it’s not something that I enjoy doing. If I did, I would have gone into accounting. [Laughter]
Loren Feldman:
All right, here’s the next ripped-from-the headlines story that I want to run by you guys. It kind of has to do with whether it’s ever smart to tell customers, “We don’t care if you come back.” Here’s the story: It’s a Boston-area ice cream shop called Coldstuff Ice Cream. They got fed up with customers berating their mostly teenage employees, so the owners posted a message on Facebook in all caps telling customers to stop yelling at their employees.
Jay Goltz:
No, no, you left a word out. What kind of employees?
Loren Feldman:
Their freakin’ employees.
Jay Goltz:
Yeah.
Loren Feldman:
Their point was basically: These are kids. For many of them, this is their first job. They’re going to make mistakes. It’s ice cream. Calm down. But they kind of went a step further, responding to people threatening not to return, “Nobody gives a you-know-what if you don’t come back. We’d prefer it that way.” Now, the post exploded. More than 230,000 likes and thousands of mostly supportive comments. So here’s my question: Are they building a brand and protecting employees, or is this a dangerous way to run a business?
Jay Goltz:
I don’t know that I’d say the word “dangerous.” I would never in a million years do what they did.
Jaci Russo:
Nope.
Jay Goltz:
It violates everything, from being a retailer. A) Really, they said two or three times a day someone’s yelling at their staff? I’ve been in ice cream shops a thousand times. I don’t think I’ve ever seen anyone yelling at the person. What? That seems rather odd.
Jaci Russo:
How bad is their training?
Jay Goltz:
Yeah, right. Right. What, are they licking their hands when they scoop the ice cream out? Like, really? What could you be screaming at somebody in the ice cream shop about? “Oh, they gave the wrong change.” Okay, that was just one example. So, okay, so that’s questionable.
Number two, is this doing the employees a favor? No. Your employees need to be told, “Listen, here’s how we make money. We do stuff for the customer, and they give us their money. And the customer is usually right, and when they’re not right, we pretend they’re right because they still give us their money that way. And they keep coming back, and that’s how we give you raises. And that’s how we have a successful business.”
So you don’t have to take it personally. They’re not your mother. They’re not your father. They’re not the judge. They’re not your teacher. Like, don’t take it personally. People have bad days. They just came back from the hospital. They just lost their job. People went off their medication. Whatever.
I’ve had this conversation a hundred times. And it helps because, trust me, I’ve had people in the back crying from a customer. It’s painful to watch. So you’d work on that side. And if it’s truly that bad, they could put a sign up in the store that said, “Dear valued customer, we’re committed to giving excellent service and providing a respectful environment for our customers and staff. If something goes wrong, please do not yell at our young staff.” They could put a sign up if it was that bad.
Here’s the problem. They said that the comments were mostly supportive. How many weren’t? 20-30 percent were saying, “Who do you think you are to talk to people like that?” Not a good thing. They could’ve put a post out that said it in a nicer way. The whole thing, I found appalling.
Loren Feldman:
Jaci, they probably did not expect to get 230,000 likes for this post.
Jaci Russo:
Oh, I think they did. I think that’s why they did it.
Loren Feldman:
Really?
Jay Goltz:
That’s giving them a lot of credit.
Jaci Russo:
One hundred percent.
Jay Goltz:
Wow.
Jaci Russo:
It feels like a whole bait post.
Jay Goltz:
Maybe you’re right.
Jaci Russo:
So we have a firm “customer is to be heard and handled,” but my employees are the ones that I’ve got their back. We had a very big client at the time, probably our biggest or second-biggest, in terms of total top-line revenue, curse out an employee, and the client was wrong. The client had also bounced a five-figure check to me that day, so I think they were having a bad day overall. And so we fired the client on the spot, no questions asked. Like, not even up for debate.
So I’m all about having my employees’ back, because I need to make sure they are properly trained (that’s my job), do a good job (that’s my job), and then after that, if you don’t receive it? Well, it’s not a good fit, hit the bricks. So if this ice cream shop is having multiple people behave that way, what is wrong with their training? Because I tell you what: You know where people don’t yell? Chick-fil-A. You know why? Because they’re very well-trained.
Jay Goltz:
And trust me, there is a line that I would absolutely back up an employee and throw the person out. It’s happened once in 48 years. And I’ve had numerous people come in the next day to apologize about the way they talked to the employee, the way they talked to me. People have bad days, and they lose it sometimes.
So, retail is very different, Jaci, than what you do. In your case, I could totally understand where you’d have to fire the client. In retail, they’re going to be gone in about five minutes, so really, they can get through it. I have a hard time believing there are people coming in there ravaging—it’s hard to imagine that’s where they’re coming to take out their frustrations, on the 17-year-old scooping their chocolate ice cream? Really?
Lena McGuire:
It’s true, Jay. I have family who work in retail, and they tell me horror stories about how they are abused by the customers coming into the store on a daily basis. And it’s not the same people coming in all the time. It’s just an average customer coming in, and they just lose it on the poor employee.
Jay Goltz:
And do they throw them out? Or do they take care of them and take their money?
Lena McGuire:
They take care of them.
Jay Goltz:
Yeah, and that’s why they’re successful.
Lena McGuire:
They’re not supporting the employees, yeah. So the employees are taking the burden of it.
Jay Goltz:
Well, there’s a line there, Like I said, I’m not saying you shouldn’t support the employees, and if they call them names or something, okay, that’s over the line. But there’s a certain part to someone’s having a bad day and they say, “Where’s my stuff?”And like, yeah, whatever.
If you want to be that way, you’ll be out of business, because unfortunately in retail, you’ve gotta take care of, like, 98 percent of the customers. You can’t go for, “Oh, well 85 percent of them are happy.” You’ll be out of business. I don’t think you can have that mentality and start throwing customers out and be around too long. I’ve never seen it. Now, they got a lot of publicity for this. The question is, long-term, who knows? Maybe they’re smarter than me.
Loren Feldman:
Jaci, what do you think? Did this possibly benefit the business, getting that much attention? I think it’s within the first year of business.
Jay Goltz:
Oh no, I think it was just a few weeks. I think it was brand new.
Jaci Russo:
I would imagine they got a lot of business from it, because they got a lot of attention from it. They got a lot of awareness from it. Maybe the pillowcase person needs to talk about something that rage baits. [Laughter]
Loren Feldman:
Put the two businesses together.
Jaci Russo:
Correct.
Jay Goltz:
Someone slid off her pillow and hit their head, because it was so smooth and supple.
Jaci Russo:
Right, so soft.
Jay Goltz:
I hope someone reading that’s in retail doesn’t think that this is a good idea, to start telling off, especially swearing at them. Really, there was no need for that. They could’ve posted something that was similar, but just not as angry in capital letters. Like, who wants to do business with an angry business? I don’t. Do you want to do business with an angry business owner? I don’t.
Loren Feldman:
Is that the line? Because, you know, people swear a lot more than they used to. Somebody on this podcast swore a few minutes ago.
Jay Goltz:
I swear.
Jaci Russo:
I do it all the time.
Jay:
I like swearing.
Jaci Russo:
Me, too.
Jay Goltz:
I wouldn’t go put it in an Instagram thing.
Loren Feldman:
Is that the line, Jay? If it had just not had—
Jay Goltz:
No, there were several lines. He went all the way out of the court. The first line was the swearing, the second one was the all caps, the third line was, “We don’t want you to come back.” Oh, man.
And then the other one is—this happens three times a day. I still can’t get past that one—let’s remember, it’s an ice cream store, the place that everybody’s happy. What could make someone so unhappy to start screaming at the people there three times a day? Have you ever seen that in an ice cream store? I haven’t.
Jaci Russo:
I have not.
Lena McGuire:
Yeah, I used to work in retail, and I would see customers—you know, I worked as a cashier in a grocery store back when I was a teenager. And if the lines were too long, the customers would start screaming at the cashier like, “You’re going too slow.” It’s like, everybody’s working as fast as they can, but the person in front of you has 400 items in their cart. You just have to wait your turn. And they weren’t planning to be in the store that long, and they get upset, and they yell at the cashier.
Jay Goltz:
I can understand that one. That makes sense, the waiting in a long line. I’m having a hard time figuring out what’s going on in an ice cream store that they’re going to start screaming.
Lena McGuire:
Maybe they were waiting in a long line. Maybe their ice cream got soft. Who knows?
Loren Feldman:
I got one more story. This one’s about paid family and sick leave and whether the rules that are spreading state by state are good for small businesses or bad for them. A quick summary: A growing number of states have created or expanded paid family and medical leave programs. A lot of small business owners who are quoted in the stories about this, see these mandates—even if they’re covered by the state—as yet another burden placed on smaller businesses. An employee may be gone for an extended period. Even if that period is not a financial burden, the business has to keep the job open, and somebody still has to get that work done.
But others make a different argument. Because the state is paying the benefit, these programs allow small businesses to offer a benefit they might not be able to afford on their own. Could that potentially help them compete with larger companies for employees? My question to you guys is: Which is it? Is paid family leave primarily a burden, or can it actually help smaller businesses?
Jay Goltz:
I would think if the state’s going to pay for it, good for you, good for the employee.
Loren Feldman:
But you still have to fill the job. It’s still a burden.
Jay Goltz:
Yes, it is.
Loren Feldman:
Is it a reasonable burden?
Jay Goltz:
There was one state that, if you have five employees or less, that’s horrible. And then someone on there said, “Oh, they should just cross-train employees.” You know what, sometimes you can’t cross-train employees. You got a bus driver and the person taking the tickets. You can’t teach the person taking tickets to drive the bus. So with five employees, I think that is a horrible burden on them. I think if they’re going to do that, I don’t know, 20 employees, 30, 40, but it certainly shouldn’t be five.
Loren Feldman:
You’re clearly right about the bus driver and the person taking the tickets, but cross-training? I mean, I’ve seen that work in businesses.
Jay Goltz:
Well, it’s always a good thing if you can do it. In my case, I can’t really. I’ve got people selling framing who have art backgrounds, and I’ve got people putting the pictures together. They’re completely opposite jobs. I can’t cross-train one to the other, but I’m big enough that I can figure out how to get through a week if somebody’s not there, or a couple of weeks or three weeks. But 20 people, 30? I think they’ve got to take it easy on the smaller businesses. That could just be brutal.
Loren Feldman:
This does apply to you, I assume, in Illinois.
Jay Goltz:
Absolutely. I’ve got 110 people.
Loren Feldman:
Right, but do you have state-paid? I don’t think so.
Jay Goltz:
No.
Loren Feldman:
In Louisiana, I’m guessing, Jaci, you do not either.
Jaci Russo:
Loren, I think we’re still at $7 an hour for minimum wage.
Loren Feldman:
Okay.
Jaci Russo:
Like, we’re in a whole different world. But I will say this, I remember one year in particular where we had four women pregnant in the same year out of, at the time, probably 16 on our staff, and it was a challenge. And so, if I recall correctly, we did two weeks or four weeks paid, and then the balance, the eight or 10 weeks unpaid. But they could take the whole 12 weeks.
This whole company started because I couldn’t get a day off to go have a baby, and my boss suggested that I schedule my induction on a Friday so I could be back on a Monday. So how hypocritical would I be if I turned around and did the same thing to the next guy on the list?
So we did cross-train. I covered a lot of different things. Clients understood. When they were feeling a little better, maybe at the six-, seven-, eight-week mark, they did a little bit of work from the house. You know, a little here, a little there, just so they weren’t too far behind on emails and keeping track. But I think people need time to spend with their kids, and it’s hard on the company, but we’ve got to work together to make it work.
Loren Feldman:
Did all four of those women come back?
Jaci Russo:
No. One came back, and then a year later had another kid, took the maternity leave, and didn’t come back after that. And two never came back, and one started to think she was going to come back, and then didn’t come back, and then took some time, then had two other kids, and now has a home-based business.
Loren Feldman:
Were you offended that someone took the resources that you extended and allowed you to keep the job open but didn’t return?
Jaci Russo:
That would be like I’m going to be mad because they took their vacation. I mean, this is their time, and they earned it. And I am appreciative for the people while they’re here, but I don’t expect anybody to be here for 40 years.
Jay Goltz:
Well, the other thing is, to be fair, some of them thought they were going to come back and changed their mind. They’re home with the baby, it changes things.
Jaci Russo:
Yes.
Jay Goltz:
I haven’t done this, but I think one thing, if someone really knows they’re not coming back, one could offer them, “Hey, listen, if you decide you’re not coming back, just so you know, I’ll give you an extra two weeks if you tell me now, because it’ll make it easier for me.” And that way, why not? Because right now, they have absolutely no reason to tell you they’re not coming back.
Jaci Russo:
Correct.
Jay Goltz:
If you gave them a month, that would be a blessing. It’d be well worth paying them for an extra month to know they’re not coming back. I just checked it, by the way. The minimum wage in Louisiana is $7.25.
Jaci Russo:
Did you think I was joking? I love that you double-checked me.
Jay Goltz:
No, I wasn’t joking. I wanted to see if it was $7. And it’s $15 in Illinois, which I have no problem with.
Jaci Russo:
Now look, we pay $15. I’m telling you what the state law is. We don’t follow the state law.
Jay Goltz:
That’s terrible.
Jaci Russo:
Yeah, I think that’s terrible, too.
Lena McGuire
It’s $7.25 in Tennessee, too.
Jaci Russo:
There you go.
Lena McGuire
There are other states that it’s $7.25.
Jay Goltz:
I have no problem with $15. I wouldn’t have a problem if they raised it to $16.
Loren Feldman:
Lena, I interrupted you before.
Lena McGuire:
You were asking, do you think it’s a burden or did you think it was good for small business? And I think it’s actually both. I think it’s a burden for small businesses to have to come up with this. You know, if you have just a few employees, trying to keep that job open while you’re trying to keep the business going could be difficult. I mean, there are temp services, there are freelancers you can hire, things like that. So I don’t have an issue with it, but I can see where it could be detrimental to some businesses.
But also, with the state paying it, I’m a firm believer in helping people have a good work-life balance, and if you had a child or you have a sick person at home who you need to take care of, taking that 12 weeks, that’s what it’s for. And they’re going to come back being better balanced people, because they were able to take that time off for themselves. So I would like to say that it is a burden and a blessing.
Loren Feldman:
Jaci, did you hire additional people to survive that period with four people out on maternity leave?
Jaci Russo:
No, we managed, we covered. We all did a little bit extra. Everybody pitched in. Clients were understanding. We worked ahead. We just made it work.
Lena McGuire:
That’s company culture. Your clients understand what’s going on, your employees are willing to help.
Jay Goltz:
When it’s smaller, it’s absolutely harder. I mean, you get to 30-40, you’ll have five people in that exact same job. When you’re small, you might only have one person doing that job, so there’s no one to cover. So there’s no question it’s easier when you’re bigger.
And if I was in charge of a state thing, I for sure would make it less than 20. I probably would try to push for 30. I mean, businesses have a hard enough time trying to stay alive and grow and be in business. Do we really need to burden the small businesses just trying to keep it going? It’s not right, and it’s also counterproductive. It could absolutely put people out of business.
Loren Feldman:
But you seem to be arguing the other side of this now.
Jay Goltz:
I’m just saying small. I’m saying there needs to be a line there for smaller businesses. I think we need to not put this burden on a really small business. There is no easy, there is no solution, basically. If you’ve got a key person, and they’re going to be gone for three months? The other reality is they’re not going to go fire the person anyway. They’re probably going to have to do it either way, but it’s tricky.
Loren Feldman:
So it’s interesting you mention three months because I think both the federal and all the state laws usually talk about 12 weeks, three months, but there’s nothing magical about that number. People sometimes need more time than that. What do you guys do if it’s not mandated? Are you willing to extend somebody’s—
Jay Goltz:
I have. There’s also times where, first of all, we’re usually friendly with our employees. I have a relationship with them, and you don’t want to have to tell someone, “Hey, I don’t know that you’re going to get better from this.” I mean, talk about a tricky, horrible, painful situation. Like, if they’re sick, you’re going to start playing God and decide whether you think they’re going to survive this or not? I mean, there’s no solution to some of this. It just goes with the territory, and I haven’t, luckily, had a lot of those, but I certainly have had a few.
Lena McGuire:
We have two different things in New York. We have family and medical leave, which you get for 12 weeks, and the state will pay up to, I think, like, $1,400 a week if you are bringing a new baby into the home, whether it’s birth or adopted. And then there’s also family medical care that comes under that. But if you have your own personal health, you get 26 weeks, but it’s only $170 a week. So there’s a huge disparity with the compensation that you’re going to get. So with the family medical leave, it’s like 65-67 percent of your pay up to $1,400. But if you are sick and you have to go out on disability, you get 26 weeks at $170.
Jay Goltz:
Oh, I just thought of what we do. This is big. I forgot about this. We encourage people who think they’re going to be getting pregnant to go get a disability policy short-term. And it’s not expensive, and that does pay them, and it’s a win-win for everybody. And if you know you’re going to be getting pregnant, that’s a smart thing to do. Make sure that you have a short-term disability, because it pays, and that takes the edge off the thing.
Jaci Russo:
Oh, that’s smart. I would even pay for that for my employees if we were doing that.
Jay Goltz:
Right, it’s not a lot of money. Long-term is a lot of money, but not the short-term.
Lena McGuire:
How soon do you have to get that? I mean, how far before the pregnancy occurs do you have to have that policy in force?
Jay Goltz:
I don’t know. I mean, someone here knows, but I don’t.
Lena McGuire:
That’s very interesting. I would be willing to pay that for employees also.
Loren Feldman:
We’ve only got a couple minutes left. I’ve been dying to ask you, Jaci, how was your Mediterranean cruise?
Jaci Russo:
Our Women’s Summit at Sea, Loren, this was official work business. It was great.
Loren Feldman:
That you would not allow me to come on, but we’ll leave that aside.
Jaci Russo:
Because you’re not a girl. It’s a Women’s Summit at Sea. Women’s. You are not properly equipped.
Jay Goltz:
Discrimination.
Loren Feldman:
I’m calling my lawyer.
Jaci Russo:
Oh, 100 percent, 100 percent.
Lena McGuire:
It’s not discrimination. It’s enhancement.
Jaci Russo:
I encourage you to start a Men’s Summit at Sea. I’ll be glad to support your efforts. [Laughter] It went great. It was our fourth annual. I kinda thought that it was going to be the last one, which is why I picked an Italy, Greece, Turkey itinerary, because we were going to go out with a bang.
But it was so good, and the people were so receptive, and they had such a great time. And the emails and comments that they made online and to us about the transformative experience, I’m like, “Fine, we’ll do it again.” So our fifth annual will be next year, and we’re actually going to sail out of New York to Bermuda. It’s a really great thing.
Loren Feldman:
What’s the purpose of it?
Jaci Russo:
So Melissa Bowen, who is the founder of The Authenticity Center, she’s a therapist by trade but does a lot of executive coaching, a lot of mindset work. You know, boundaries, imposter syndrome, how to build a team, how to properly lead a team, how to evolve into the leader that your team needs, those kinds of things.
Jay Goltz:
To stop apologizing? How about that?
Jaci Russo:
Oh, yeah, she’s really big on that.
Jay Goltz:
Okay, good. I’m big on that, too.
Jaci Russo:
Oh, yeah, no, her whole thing is authenticity, like show up for who you are and no apologies for who you are. So she does half of it, and then I’m the marketing side, so I do the other half. And it is fascinating, to the two of us at least, how our principles and foundational teachings are the same thing, just covered in different language. Because marketing is all about authenticity. Marketing is all about knowing your audience. Marketing is all about messaging things so that people feel seen and heard and want to choose you. Well, you know what? So is mindset work.
Jay Goltz:
Jaci, I salute you. Really.
Jaci Russo:
Thank you.
Jay Goltz:
It sounds like a wonderful thing.
Jaci Russo:
It really is, and it’s the blend of education and vacation. You know, you and I have gone to conferences where you’re balls to the wall from 7:00 in the morning to 8:00 at night, and you can’t even comprehend all the stuff you’re learning, because it’s just coming at you so fast. We do a few sessions. We put in breaks.
It’s spread out over the time while we’re at sea, and then there’s days when we’re in port, and so we do fun, relaxing things, sometimes together, sometimes on your own, whatever you want. And so it really is a way to absorb it. We do headshots at the end of the last day, and four years running now, it’s the best picture any of them have ever taken, because they’re relaxed and they’re happy.
Jay Goltz:
Wait, how many get divorced after this? Wait, how many get divorced after this? [Laughter]
Jaci Russo:
You’re not going to get divorced. You could come though. Your wife will attend and you’ll be in the casino.
Loren Feldman:
Jaci, why do you do this? Do you make money? Is it part of branding your agency or something else?
Jaci Russo:
Well, Loren, my smartass answer is I don’t do anything for free. But in reality, yes, we make a little bit of a profit. I’m not retiring on the money. But I do it because I think it’s good. And a few years ago, when I started thinking about what my next chapter was going to be like, I wanted to put in place some things that I enjoyed that I would keep doing long after I stopped running the agency. And so this is one of the things.
You know, Melissa and I have been great friends since college. Our husbands are great friends, and we vacation together. And so four and a half years ago, we went on a Royal Caribbean cruise, and I went to go find a quiet place to read one day, and I stumbled upon a conference, a seminar, and turned to Melissa at dinner that night and said, “You know, we could do that.” And she said, “We could do what?” I said, “We could put on a conference on a Royal Caribbean ship.” And she was like, “Uh-huh.” And by the time we got back to port, I had a meeting with Royal, I had a corporate contract. This was January, and we had our first summit that September.
Jay Goltz:
When I said how many got divorced, I didn’t mean the husbands divorced them. I meant they got so empowered from this whole thing that they came home and decided that—
Jaci Russo:
Oh, we have had some of that, Jay. We have had some of that. We’ve had some women who have started businesses. We have some women who have changed career paths. We have some women who have gone from just good, steady—you know, handful of employees—to scaling some real growth and encountering new markets. But mostly, those are rarities. There’s one here and one there. I would tell you 90 percent left more empowered, more comfortable speaking in public, more sure of themselves and what they say, better leaders to their team, and generally happier in their lives.
Loren Feldman:
My thanks to Jay Goltz, Lena McGuire, and Jaci Russo, and special thanks to our sponsor, Grasshopper Bank. Thanks for listening, everyone.
