The Value of Community, with Loren Feldman

Episode 114: The Value of Community, with Loren Feldman

Loren Feldman is editor-in-chief and founder of 21 Hats, a platform for business owners, where he edits a daily newsletter for entrepreneurs and hosts the 21 Hats podcast. He has also co-hosted a call-in show for business owners, Mind Your Business, on Sirius XM.

Previously, he was a senior editor at Forbes, where he created the Forbes Small Giants franchise and was responsible for entrepreneurial coverage in print and online. Before that, he was small-business editor of The New York Times, where he started the You’re the Boss small-business blog. He has also been editor of the Web sites at both Inc. and FastCompany.

Before going digital, he was a top editor and writer for print magazines such as Inc., Philadelphia, Manhattan, inc., the American Lawyer, Money, and George. He has also written for GQ, The New York Times Magazine, and The New York Times Sunday Business section. And he has spoken and moderated discussions at numerous conferences and seminars on entrepreneurship.

What you will learn in this episode:

• How covering entrepreneurship for Inc. Magazine left Loren bitten by the entrepreneur bug and sparked his interest in creating a community for business owners
• How Loren and 21 Hats have been communicating with seven business owners through the pandemic to get insights into the challenges and opportunities they’ve faced
• How the 21 Hats podcast has shined a light on the many unexpected struggles businesses have had to navigate throughout the global pandemic
• Loren shares the story of one of the business owners that has appeared regularly on the 21 Hats podcast and the journey he has gone through surviving the pandemic
• Why advice is much easier to give than to take, and why it can be challenging for business owners to listen to others and implement the wisdom they’re given
• Why it can be difficult for business owners to prioritize doing work that will result in long-term gains for the business and, why instead they focus too much on the day-to-day
• Why it is important to find your “tribe,” people who you share values with, who you trust, and who you can discuss your wins and challenges with
• How being transparent and honest with other like-minded business owners can help transform your business and give you a powerful source of support and encouragement

 

Resources:

• Website: https://21hats.com/
• The 21 Hats Podcast, with Loren Feldman: https://21hats.com/podcasts/
• LinkedIn: linkedin.com/in/feldmanloren/
• LinkedIn: linkedin.com/company/21-hats/
• Facebook: facebook.com/21HatsMedia
• Twitter: https://twitter.com/lfeldman

 

Additional Resources:

• Elite Business Health Assessment: https://growwithelite.com/health
• Email: info@GrowWithElite.com
• Website: https://growwithelite.com/

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I love the opportunity I have every single week to bring guests. I know sometimes I do a solo cast, but I love it when I have a guest, where I can pick their brain, learn from their experience, and hear stories. This is absolutely no exception to that. We have a fantastic guest. His name is Loren Feldman. Loren is the Founder and Editor-in-Chief at 21 Hats. I’m going to let him explain 21 Hats a little bit but let me tell you this.

I’ve been around the circles of small business and helping entrepreneurs. I’m genuinely intrigued by the work that Loren is doing with 21 Hats to bring together a community of entrepreneurs to learn from one another. As you all know, this is a space that can be challenging. It can be lonely. What I see Loren doing is very enlightening. His shining a big light on what’s going on in the world for entrepreneurs in a very personal way. I highly recommend you find out more about him and what he’s doing. Loren, sorry for the lengthy intro there but welcome to the show.

Please don’t apologize. Thank you so much for that, Brett. It means a lot to me to hear that coming from someone like you, who obviously understands this space so well.

We’re glad to have you. Tell us more about 21 Hats. What do we need to know? Why did you start it? What’s the real intent behind it? How can we learn?

I started it because I got the entrepreneurial bug. I fell into covering entrepreneurship years ago in Inc Magazine. I went there as part of a group of editors who were going to rethink and redesign the magazine. I’d done that at a couple of places previously. I thought I would probably move on in a year or two, but I fell in love with the people I was meeting, the people at Inc, who knew entrepreneurship, and of course, the people we covered in the magazine. I wound up staying for six years and then I went to the New York Times because they hired me to build their web vertical version of Inc Magazine. I then went to Forbes and I did it there.

I had great experiences at each of those places. I learned all kinds of important things. I worked with smart people, but I never felt like I had a chance to put it all together. I had the idea that you could create a community of business owners who would learn from each other. It just didn’t quite fit with the mission of any of those publications. I’m not saying they were wrong. They understood their mission better than I did. They were all very smart people. It just didn’t quite work for them.

I had taken to heart something I learned at a focus group session at Inc Magazine. We were talking to business owners about what we could provide that would be a value to them. One owner looked at us and said, “I’ll tell you what I don’t want. I don’t want to be told how to run my business by some 24-year-old kid working for a money-losing publication.” I thought, “Whoa.” That’s some straight talk. It’s really valuable. I took it to heart and I’ve never forgotten it. It’s something that we, in the media business, often get wrong. We focus so much on throwing content at people. We don’t think about what we’re delivering. Are we satisfying their needs? Are we helping them as much as we can?

I realized that we were doing too much throwing and not enough listening and that business owners don’t want to be told what to do. They want to compare notes. They know that one size doesn’t fit all and one solution doesn’t work for everyone. They want to hear what works for you. They don’t want to be told that it’s necessarily the solution to all your problems. I tried to recreate that and had some success at each of those places, but I left to try and bring it all together in one place. That’s what I’m trying to do at 21 Hats.

 

Sometimes we use words like career and stuff like that. In my own learning journey, Inc, New York Times, and Forbes, we’ve read about companies that I’m sure you’ve covered. Sometimes, you were introducing us. You were giving us a view into what it’s like in the life of this company or what this founder was doing. A lot of us got inspiration from those stories. A lot of us got great practical ideas from some of them. Maybe outside our interview time, I could ask you about 1 or 2 of my favorite ones that I probably still refer to.

I’d love to have that conversation.

That would be fun. Loren, you have something going on with 21 Hats right now that I think is really unique. Throughout the duration of the pandemic, if I understand this correctly, you have been following, tracking, and having ongoing conversations with 7 business owners or companies with their experience through the pandemic. Am I understanding that right? Is that at the core of what you’re doing with 21 Hats right now?

That’s absolutely right. We started the podcast. We published the first episode in January of 2020. We had no idea the pandemic was coming. Frankly, I didn’t know how long this format would last. I wanted to get to know these owners. I wanted to talk to them and follow their journey. I really wondered how long are people going to want to hear from the same group, when are there problems going to start to seem boring, and when will I need a new season or a new cohort, then the pandemic hit and everything changed. The narrative flipped. Suddenly, most of them were fighting for survival. My listeners got invested in figuring out are they going to make it or not and wanted to tune in.

The one thing you should know is I talked to three of them every week. Occasionally, it’s fewer. It depends on who’s available and who’s not and what the topic is. We’ve gotten to know each other well and trust each other. They’re an amazing group. They share things that some business owners wouldn’t share with their spouses or in private. These folks do it because they are hoping it’ll be helpful to other business owners who are sharing the same experiences. That’s what we talked through every week for an hour.

That’s cool. I love the concept. I think about what we’re trying to do with this show. It is aimed at helping these seven-figure business owners figure out some of the struggles that happen as they try to grow from $1 million to $10 million. A lot of you shared with me, 6 out of the 7, that you’re interviewing, ongoing, would probably fall into that range of revenue or that business size. It’s hyper-relevant for our folks. If you haven’t already taken a mental note as a listener, you should take a mental note. Go check out 21 Hats. This is a cool thing to get insights into those businesses and how they’ve been navigating over the past years.

Loren, I’m going to ask you to represent a little bit of those folks that you’ve been getting to know for the past years. What are some of the things that have been impactful for you, especially in the area of business owners feeling chaos and getting pulled into everyday stuff that they got to deal with?

 

Sometimes, I work with business owners who know they need to work on their business more. There are these things that would help them in the long-term but the short-term demands overwhelm them and they can’t get to that stuff. A lot of that is very real for people. First, let me not assume that this has happened to the people you’ve been working with. Have you seen any of that as you’ve worked with business owners, maybe not just in the 21 Hats project but throughout your career?

I’ll give you one example and you’ll tell me if this is what you have in mind. One of the regulars on the podcast is a guy named Paul Downs. He has a business based outside of Philadelphia. It’s a small manufacturing business that makes high-end custom conference tables. He sells them to law firms, investment banking firms, and small businesses. He’s very open about everything he says. His business is between $4 million and $5 million a year in revenue in a typical year. He’s got twenty employees or so, a little bit more maybe.

As you can imagine, in March 2020, his phone wasn’t ringing quite as much as he had anticipated. With everybody starting to work remotely, the need for a high-end custom conference table wasn’t as great as it had been previously. He was one of the folks who was concerned that he might not survive the pandemic. He was getting ready to go into survival mode. He was figuring out how many people he’d have to lay off and what crew he could keep going for the few jobs that would come in.

He knew he would always have a few jobs from government entities or people who still had money and need but he knew it was going to be tough. Here’s one of the things I found interesting. You talk about getting caught up in it. Everybody he talked to told him the same thing, “You need to pivot. People are working from home now. You need to start selling desks that people can use in their home office.” He took it seriously.

He thought about it, but he came to the conclusion, “That’s not what we do. There are a lot of people who do it. They’re always going to be able to do it cheaper and more efficiently than we do. We’re not in the business of competing with Ikea. We’re never going to compete with Ikea. We make big, beautiful tables with technology available. That’s what we do. We’re not going to do what everybody is telling me to do. We’re not going to pivot. We’re going to try to make it through this way.” I thought that was brave because there was a period there where the only word you heard in the business circle was pivot.

For most of those businesses, it made sense, but not for everybody. This was an example of somebody managing to achieve some clarity in a very difficult and emotional situation. He stuck to what he believed he needed to do. Happily, it’s worked out very well for him. PPP helped a lot. That government money made a huge difference, but he’s come back really strong.

That’s great. That may have been a little bit different direction than what I was thinking when I asked the question. It’s super valuable. Now I want to follow up with the question for this business. As you watched in, what would you say he was able to draw to be able to make that decision to say, “We’re going to stay the course,” versus trying to pivot and become something we’re not? How did he come to that decision?

That’s such a great question. As much as our weekly sessions are somewhat like therapy. I’m not a therapist. You would probably need somebody with greater skills than mine to give you the full answer to that. It’s related to this and you know this as well as I do if not better. To start a business, you have to be a particular type of person. You have to be a little bit stubborn because there are going to be a lot of people who tell you you’re nuts, especially if you’ve done something else previously. They’re like, “Why would you do that? You’ve got a good job. You’ve got a good this. You’ve done that. Why would you risk it all?”

You’ve got to have something inside of you that tells you, “I want to do this. I’m going to do it anyway,” but it gets more complicated. I bet you see this with your seven-figure businesses. You need that backbone. You need that strength to keep going when people tell you not to, but you also reach a point where your skills can only take you so far and you have to start listening to advice. That’s one of the trickiest things about entrepreneurship. I love to talk to entrepreneurs about this, “How do you know when to make that shift from being stubborn and sticking to your guns to listening to someone who has more experience and might be able to give you some good guidance in a situation?”

Business owners must have a strong backbone. You need to have the strength to keep going when people tell you not to, but you must also know the right time to start listening to advice. Click To Tweet

Here’s an example where smart people with bigger businesses and more experience than Paul were telling him, “You got to pivot,” and he decided not to. I don’t know the answer to that, but I have a feeling if you figure it out, you’ll know everything you need to know about entrepreneurship and what it takes to build a business.

I love that answer that sometimes the business owner knows. Nobody knows better than the founder about the best move for the business.

Sometimes they’re wrong in a way that costs them the business. It’s tough. That’s what attracted me to doing this. Again, I don’t think there are mistakes that everybody makes and you can offer easy advice. Almost everybody’s price is too low. Most businesses should charge more. As I’m learning now with my own business, that’s easy advice to give. It’s harder advice to take when you’re the one who’s worried about, “Is everybody probably going to run away if I price it high?”

Everybody is going to stop paying because I priced myself out.

Making that decision about when to go with your gut and when to listen to someone else’s gut is really tough.

One of the things that I’ve found is that business owners have a clear sense of direction. Again, overall, the clear sense of direction might be off. Maybe the market shifts on them and they make decisions that ultimately don’t work out. For the most part, the business owners I work with who are clear get really intentional.

They have that guiding North Star purpose and say, “We’re put on this planet to make big beautiful custom tables for large tables. That’s what we were put here to do. As long as there’s a need for that in the world, we’re the ones to fill it.” I can almost sense Paul saying that through your story, “We’re not the ones to help you make these desks at home for a home office. We don’t do that. We do this.” Anyway, I applaud the courage to do that. Maybe stubbornness is the right word. You’re using that word.

It can be a negative, but nobody who has success as an entrepreneur isn’t a little bit stubborn.

We call it something different sometimes. We call it persistence, tenacity, or great. That stick-intuitiveness thing is key to getting that business off the ground for sure. It’s important when it’s time to make decisions on how to walk a difficult path. My hat is off to him. Next time you talk to him, tell him I’m an instant fan. Good for him.

I will tell him.

Let’s take him because we’re already talking about him, but you can insert any one of the other business owners you’ve been talking about or with. I feel like sometimes we, as business owners, and maybe this happened for any of them, get so inundated with urgent matters that we need to deal with right now.

They get reactive to life that’s coming at them when the lifeline or the thing that would move them forward in the business is right there available to them and they may even recognize it as such and turn it down for a while. They might say, “I can’t get to that right now because I got to deal with all this reality in my face.” Have you seen that with business owners that you work with? If you have, how do they break out of reacting to everything that’s screaming at them and start to do more intentional future-enabling work?

Everybody goes through certain stages. One of the difficult most trying stages that everybody goes through is that period where they have to grind through it. They know in their heart what you said. They’re too much working in the business, not on the business, as is the cliché. They want to take that step back. They want to look at the larger picture, but there’s something that’s got to go out the door at the end of the day, somebody has got to be hired, or things have to happen. Those are at the top of the list.

 

Many of us look at our to-do list on a Monday and think, “If I work hard this week, I’m going to get through all these things and then next week I’m going to be able to step back and focus on the longer-term things that I know I need to be doing to get out of this rut that I’m in.” The next Monday comes, “It didn’t happen this time, but this week, I’m going to make it happen.” People get caught in that.

I’ve asked this question of my group and they pretty much unanimously said the same thing that they didn’t figure out. They just continued to grind through it. Looking back, they still don’t see an alternative. They were at a stage where their revenues did not allow them to hire the people they would have needed whose help would have allowed them to take that step back and look at the larger picture. They had a grind through it and eventually, they got there. They were able to hire that key person who took on certain responsibilities that allowed them a slightly different situation.

I have one person on the podcast. He happens to be 65. He’s been in the business for 43 years. He’s the oldest person in our group and has a very different perspective from everybody else. There was one day in August when everybody was away. He was the one person who was there. We did a one-on-one session. I went into his routine a little bit deeper than usual.

I started asking about what he does on a typical day and he had no idea. He couldn’t tell me. He said there are three things on his to-do list. He comes in, but he now has managers who handle each part of his business. It’s a substantial business. It’s over $20 million. He’s got over 100 employees but there’s nothing he has to do on a day-to-day basis. He deals with the banks when that’s necessary. If there’s an important higher, he gets involved. The business can largely run itself and he can spend a lot of time talking to me on a podcast. It took him 43 years to get to that point is the main thing to emphasize.

We know that work has to happen and he’s done it. Maybe it didn’t take him the full 43 years. How can we get people to 4.3 years instead of 43? It’s not going to be for 43 days or whatever. It’s going to be the time that it takes. You can’t condense the work required. How do you bring it forward so that you can benefit from it longer? That’s what I hope we can figure out a little bit more collectively. My hat is off to him for doing it but that’s a long road.

You’re right. It didn’t take 40 years, but it took more than 20. It took a long time. He struggled. It took a long time. In one of our podcasts, I asked that question myself. I said, “I’m struggling. I feel like I need to produce as much content as I can to establish what my value proposition is and to convince people that 21 Hats is something that’s worth paying attention to.” I’m working as hard as I can to create the content but I don’t have time to step back and think about what my monetization strategy is or other important issues, none more important than that.

One piece of advice I got is from Paul Downs, the table guy. He said, “When I was early in this, I prioritized things this way. I looked at things as to whether they would produce revenue immediately or not. I did first the things that would produce revenue and that’s how I got out of the hole.” That seemed a pretty good advice to me.

Business owners must always prioritize things that produce revenue immediately. Click To Tweet

It’s pretty solid. I’m thinking about the wealth of knowledge and the education that you’re getting by talking to these business owners. It’s not just through 21 Hats. You’ve been talking to business owners and learning about the space for a long time. If you could share 1 or 2 pieces of learnings that you’ve picked up over the years as you’ve talked to business owners, especially those who are trying to break into this more intentional way of growth instead of more creating, less reacting. What have you found are practical ideas of how business owners have been able to spend more time thinking about the future, being more intentional, setting up systems and processes, and organizing work in a way that gets them out of full-on reaction mode?

I wish I had accomplished it myself. I would have a better answer, but I think I can tell you a couple of things that I’ve learned from talking to others. One is the importance of finding your tribe or other people that you share values and concerns with and can trust with what you’re experiencing. That’s so important. There are a lot of very well-known peer group organizations out there that business owners join. Some of them are very expensive. Some are time-consuming. They all have their pluses and minuses. For a business that’s around $1 million or fairly new, the cost can be prohibitive. It’s tough but it’s so important to find other people to talk to.

I’m hoping to create that to some extent with 21 Hats but people can do it individually. Here’s the thing. The typical business owner may not have anybody to talk to about the challenges they face. That’s not an uncommon situation I’ve learned. You can’t talk to your employees if you’re talking about whether the company is going to make it or not. If you have a problem employee, you certainly can’t have that conversation internally at that stage. You may not be able to talk to your spouse or significant other. They may be up for it or not. They may have relevant experience or not. Same thing with your friends. They may be smart people but have no idea what it takes to build a business and what your stresses are like. You need to test what you’re thinking with someone else. You need to find a sounding board.

Business owners must test their thoughts with someone else. You need to find a sounding board. Click To Tweet

I’ll go back to that guy Paul Downs again. I first got to know him when I was at the New York Times. He reached out to me because I had a blog and people contributing to it. He offered to contribute. He did it at a time when he thought his business was going bankrupt. He was willing to share that experience. Happily, he turned the company around and he’s thrived since then. He thinks one of the keys to turning it around was the act of writing what he was going through in his blog post because it forced him to step back and think about what he was doing and share it with an audience. A lot of the people in that audience responded to him. He started having conversations with them. It changed his mindset dramatically.

That’s powerful. I’m guessing the perspective was incredible. As he was thinking about how he would share this with others, he got ideas from others, which is also amazing. In both of those cases, you’re getting out of the weeds of the situation. You’re seeing it more objectively. Writing has a powerful effect on people to do that.

In his case, part of it was, “If I’m going to write this in the New York Times, I don’t want to look like a complete idiot. I’m going to think about this decision a little bit more and make sure it’s what I want to do.” It started there. He was so transparent. This is important because he was doing it publicly and not everybody hesitates for that, is going to do that, or should do that. Even if you’re just sharing it with a group of fellow business owners, you want to be transparent. You want to be honest and let them know what you’re going through if you have expectations of getting back useful advice.

That’s what happened to him. He was so transparent. People saw that he was trying to help them by talking about what he was going through. He would occasionally put up a post on a Monday morning and say, “Here are the three problems I’m facing this week,” and he’d write one paragraph about each of them. He’d get dozens of people who would spend serious amounts of time offering up similar experiences that they’d been through that they thought might guide him in his decision about what he was facing. That’s an example of what you can do if you reach out and find that group of people to share with. That is so important. If you’re going to try to navigate your way through all the twists and turns, challenges, and ups and downs, I would start with that one.

I love that one. Thank you, Loren. There are a few things I want to highlight from what you shared. One of them, again, was this idea that there are others who have gone through or are going through similar things. There’s value in that community. Emotional support and ideas for how to move forward, there’s value in that. I’ll describe a long form. These business owners, at least the ones that get to $1 million in revenue are in the top 3% to 5% of businesses that ever start. There’s not many of them around.

Can I jump in there?

Yes.

That’s so important. That’s such a great point that gets lost. I hate to say it, but it’s partially the fault of people like me because we, in the media, have focused so much on unicorns and venture-backed companies. People don’t realize that venture-backed companies are a tiny percentage of businesses. To my mind, I don’t want to turn anybody away. If somebody who’s venture-backed can find value in 21 Hats, you’re welcome.

 

Please come but that’s not who it’s aimed at. That’s not my target market. My audience is much closer to the audience that you’re trying to reach. It’s important for them because even they lose sight of the fact that they are the real experience or the real business that is so important to this country and to their communities. If you think that all that really matters are the companies that are trying to be worth $1 billion, you lose sight of what’s most important about entrepreneurship.

I totally agree. One more point out of that little discussion you said about Paul being very vulnerable, authentic, and open with those readers is that it wasn’t even direct peer accountability. However, the idea that I’m putting it out there for others to see ratchets up my own commitment level to anything that I say I’m going to do. I feel a lot more ownership. There’s a little more pressure around what I’m putting out there because it’s public. The community, there’s so many benefits from it. Pure accountability is one that I don’t want to overlook. Paul’s example illustrates that as well.

You put that very well.

I feel like you and I could talk for hours way beyond the scope of this particular episode, but I appreciate you coming on here, Loren, and telling us about 21 Hats and some insights from the many conversations you’ve had with business owners. How would people connect with you? How would they learn more about 21 Hats or hear about your podcast? Tell us how to connect as we wrap.

First, thank you, Brett. This has been a great opportunity for me. I love talking about this stuff. I love to talk about it with people who’ve lived the experience the way you have and who know this community the way you do. This has been great for me. Thank you for asking. Anybody who wants to know more can go to 21Hats.com. They can find the podcast there as well as articles and interviews. The podcast is also available. It’s called the 21 Hats Podcast. You can get it wherever you get podcasts. I also have the daily newsletter. It’s called the 21 Hats Morning Report. You can sign up for it at 21Hats.com.

It’s an attempt to pull together all the most important news of the day for business owners. Some of it is content that we produce. We go looking for articles to highlight wherever we find them in business publications, obvious places, or non-obvious places but things that, on a daily basis, we think business owners should know about. You can find that in one place. Usually, about ten articles are highlighted with the key points made and of course, the links if somebody wants to go and dig deeper. Thank you for asking.

That’s a wealth of knowledge and resources there available for these business owners. Thank you again for being on our show. You’re a fantastic guest. We love what you’re doing. We hope and wish you much success. For all of you, please take a moment to check it out. Go to 21Hats.com. Also, check out our website at GrowWithElite.com. Loren and I share a kinship and we’re both doing all we can to help business owners in this space figure out how to navigate and find more help and resources along the way. We’re here to help. Please find, like, share, and subscribe. Do all those things to make sure that as many business owners as possible can get access to this content that we’re sharing each week. We appreciate you tuning in. See you next time.

 

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