My Name Is Jay Goltz, and I’m an Entrepreneuraholic

[Music] hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman this week Jay G tells Dana White and Laura Xander why he can't stop starting businesses in recent years despite being in his 60s Jay has considered buying other frame shops he's bought a firehouse that he thought he might turn into an event space or a dog kennel and he's fantasized about opening an ice cream shop I have a whole list of businesses I'm not starting says Jay who has been down this road so many times he's developed a five-point test for whether he should proceed and now he's got a new idea an online art gallery that he believes passes the test I think I'm going to do it he says Plus Dana has a new business too and Laura assesses the Damage Done to the yarn industry by two venture-backed Rivals even in Good Times owning and running a business can be a lonely Pursuit our hope is that these weekly conversations will if nothing else let owners know they are not alone in facing challenges same thing with our daily newsletter the 21 hats Morning Report which highlights the most important news of the day for business owners and which you can subscribe to at 21h hats.com where you can also find transcripts of our podcast episodes and lots of other articles and interviews joining us this week are regulars Jay goz whose companies in Chicago include a picture frame business artist frame service and a home furnishing store Jason home Dana White who is CEO of Pary Boyd a chain of hair salons based in Detroit and Laura Xander who is CEO of Jimmy beans wool a digital yarn store that is based in Reno Nevada and meline TSH a wholesale yarn supplier in Fort Worth Texas the episode is titled my name is Jay gz and I'm an entrepreneur a [Music] holic before we get started one of the recurring themes of this podcast is that marketing is hard for smaller businesses one reason it's hard is that we are all besieged by self-appointed digital marketing gurus who overwhelm us with outlandish promises on the the other hand there's Steve crawl co-founder of be found online a loyal listener to the 21 hats podcast Steve understands the business owners who listen to this podcast because he is one he knows his stuff but he's also a real person who you can have a real conversation with and if you tell him I sent you you can get a free consultation with Steve himself just shoot him an email at Steve befound online.com to schedule your talk that's Steve at befound online.com now on to the show [Music] welcome Jay Dana Laura great to have you here hope you're all doing well Jay uh let's start with you are you feeling manic today well I'm always manic high so it depends well especially the last couple of times I've spoken to you in the past week well let's say this I didn't have my new wonder drug which I just discovered um coffee so I'm already caffeined up without it so I'd say yeah I'm kind of in the zone the only person in America who started drinking coffee after the age of 60 it's a miracle didn't know what it did I but I don't need it today naturally caffeinated generally it's a supplement so today I'm on my natural caffeination well you you've been naturally caffeinated the last couple of times I've spoken to you I think because as you've told me you're starting a new business well I would not yeah kind of I would say it's here's the thing because I've given this a lot of thought obviously I'm not going to expand anymore because I don't need a bunch of new employees I certainly don't need new leases new buildings but that doesn't mean I'm not going to look for incremental Revenue because incremental Revenue if you don't increase your overhead is extremely profitable so yes I'm starting another extension to my existing business that will provide incremental Revenue that I think will prove to be very uh good it seems like a whole new business to me I understand why it's related um but but tell us what it is you know I have a gallery and I have a big frame place and the gallery is mostly corporate and I have a retail Gallery never have done a lot online with it and I've realized I have a very good friend of literally 35 years who is extremely well-known and competent and professional of being an art uh publisher a leading a leader in the field clearly and and we've been talking and I've realized and he's not disagreeing with me that there certainly are some people that are selling art online but what I've recognized is they really don't have domain expertise they're they might have art history degrees and they have computer expertise but I don't think they really uh I think we can do a better job with selling art online and re recreating the gallery experience I've seen it in other Industries where these people show up and they they they Proclaim they're going to disrupt the industry and they don't because they don't really understand the industry but they got some some money and they've got some technology and I think there's an opportunity here without me having to spend a ton of money um we'd have to build a new website but then I'm splitting it with them so it shouldn't be that expensive what's the name of the business don't know yet that's the one part I'm I'm trying to navigate I have to figure out whether we just use his existing name or whether we come up with a new name um but just I'm in the just the uh thinking stages of it but um the reality is this is this is what I've come to realize when things are scary as they were a year ago you think that's it I'm not doing anything more I'm not going to expose myself anymore and then when things are good you think oh I can do this again so I I've had a hundred conversations with you where you told me never again never again never again here's the qualifier I've looked into buying 10 different frame shops over the years that I knew were were winding down or I thought wanted to sell sell some didn't some did and I realized taking over another frame shop just has limited upside and then I'm stuck with the lease or I'm or with a building and there's no out whereas this is all incremental Revenue without adding to my overhead so the point is if I bought a frame shop and could do I don't know6 700,000 it it you know it would make a little money whereas if I do 600 $700,000 in incremental Revenue without increasing my overhead by much it's very profitable so it's about incremental Revenue it's kind of not starting a new business it's more starting a new project right because you're using the same infrastructure you're using the same staff yeah I would say that are you going to get a new Corporation I don't know yet but all I know is you can't get an ice cream soda in Chicago anymore so I thought about I got to open up an ice cream place and I thought about it for a couple days but I'm off of that I'm not going to open up an ice cream play so that would be an example of a business I have a whole list of businesses I'm not starting I was going to a dog kennel because dog kennels are hot now you bought a firehouse well that was part I bought the firehouse and I realized it would be perfect for a dog kennel because it's on the way to the airport and I really did some homework on I thought about I had a good time and then I realized I really don't need to run a dog kennel and and I so I I have been consistent with I think about it I have a good time for a few days um I've had to tell my my kid because only your kid would say this to you you know 10 years ago he's been here for whatever 12 years now I would come up with an idea and he would immediately squash it and I said to him at one point I go could you let my idea just break its little beak through the shell a little bit get a couple of breasts of air before you stop on it with your foot because only your kid would say that's a dumb idea is not gonna work but he wasn't wrong I've just realized though I enjoy doing it I give it a few days and then I come to my senses this one is in my wheelhouse all right I want to come back to you in a in a second but Dana you're starting a new business too I have started a new business yes sir tell us about it so in a couple years ago Michigan legalized cannabis and uh my partner and I have decided to to put our business partner or your fiance my fiance my fiance yeah so he and I during the pandemic decided um why don't we try this and so our parents have pain um you know my mom has back pain his father has you know some pain and trouble sleeping and so you know I have my Michigan medical marijuana license um so I'm a licensed caregiver and sign them up as patients and so we know people in this space who are processors and you know people who own dispensaries and so we you know decided to share our tea um our actual liquid tea that you just drink out of a 2 O bottle that helps and we're getting so many great you know so much great feedback from people who say you know I had an ounce of your tea and I finally slept throughout the night I haven't slept in years uh my back pain I I was able to wait 20 minutes and man I I wasn't you know limited I could get up carry groceries in the house go to the store and all of that so we've decided to launch the lit Leaf is what we're calling it it's a 2 oz tea we have 18 o bottles um and right now we're only in Michigan because cannabis is not a ferally legal substance do you think it could help me stop opening businesses no no there's there's really nothing for that Jay you need a stronger drug for that Jay and did you watch that movie I care a lot oh yeah I saw that I did I did see that moving oh my God I said I'm so glad you're a caregiver I can't wait to see how this turns out no I mean it's not caregiver in the sense of you know a nurse or a doctor it's just you know when pills are starting to take an adverse effect on people's bodies they turn to more holistic methods I know my mother has whole cabinet full of pills and she's like I can't it's just if it's one pill for this and another pill for this and then another pill for this um and now she just takes a shot of tea and she's good to go how are you selling it are you opening a store um we're actually no no no no so we aren't selling it now what we're doing is we're looking to license our brand to a processor um we've been meeting with processors to talk about what that process would look like and then they get a percentage off of the the bottom end based on the purchase order so we don't pay them upfront we get a purchase order for so many dispensaries and then they take a percentage off of that uh purchase order for their work they're bottling in in can I ask a more like personal question sure kind of so your partner um your fiance was a cop right yes absolutely so how do you reconcile and I I mean I think this might have business application but you know the world changes the laws change and so at some point he you know this was criminalized and I'm assuming he's written some tickets not at all we totally had this conversation so tell me about it like sorry to interrupt you no no no exactly he's a retired yeah he's a retired police officer and we had this conversation and his thing was first it's legal it's legal and he said as a cop um I wasn't the cop who wrote you a ticket for it I took it from you and I disposed of it but he goes in all of my years of being a police officer I had more people issue get got more issues from people with drunk driving and abusing alcohol then I did I've never had to pull s for erratically driving or being disruptive from being on canvas and after a couple of years on the force I noticed that and said you know what as a he said as a personal choice if I pulled over and I smelled it I would ask them about it as long as they were upfront with me they would give me whatever they have and I would take it um and that was it and I let them go because it wasn't as deadly as I saw the adverse effects of alcohol and other hardcore substances so the stuff that he took all the stuff that he took is that what you guys are starting your business from absolutely not not at all K that went into the evidence Locker is never seen from again I'm just kidding no you're not kidding because I have my medical because I have my medical marijuana license we had dabbled with growing here but we have partnered with um people who can supply the um the THC needed for our tea because you can't you know grind up a flower and put it in you have to you know turn that into another form and so that's what we had done and we made the tea I was having serious issues with anxiety and that's how I'm not a cannabis smoker I don't like it I I think it hurts and I I just don't like it but um my fiance would bake a cake for me um or he would give me a gummy right before bed and I would sleep through the night versus waking up at 3:00 in the morning pacing through the pandemic wondering what I was going to do so we made this tea and here it is God I'm feeling a little stupid that I just discovered coffee and that's my new drug and you're like way ahead of me and that you're going to sell Art Online yeah so we don't know how we're going to sell it it might be a beverage that is in dispensaries all around the country or it may not be um but it doesn't hurt to try can you serve it at peral Boyd absolutely not I wouldn't even if I could oh because um it's just not the brand Channel conflict not good yeah I don't want an elevated first of all we have no information on the people who come in so if you're 21 we don't know second of all I don't want to offer an elevated hair care experience I I just want to do your hair and have you go partake on your own if you choose have you thought about how much time energy and money you want to sink into this absolutely we you know we've I've sunk in a bit of our own money um because of the patients I have they have paid me um for some of like the cakes and stuff that we have um so that was how we were able to get our bottles and our labels and design our logo um and so what we've done is that it's been small and we've just taken it and developed a few bottles here and given those away and it developed a few more bottles here and given those away um and so we've partnered with a um a cannabis Lounge here in Detroit um and that was like our first order where you know he ordered more than just a few and we you know he gave us a donation and we're were like okay great here you go just so we can kind of test the market as far as the time portion of it I know had had this happened eight years ago it would have been different I'm just a savier business owner now and there's some of the things just come easily to me having conversations and understanding what we want to do to grow the business I don't I spend less time figuring it out um I do spend some time doing it because you know it's it's cannabis it's a new industry but the business processes are the same Tron my partner he's very strong in actual cultivation he's strong in the actual recipe making he's strong with that so we combine so it's not just all Dana when it comes to networking and making the relationships um I've been the one on clubhouse speaking to people in cannabis rooms introducing myself talking about the Tea um and making you know connections that way uh that's it have trademarked and patented or you know whatever what do you got to do that way no because it's not a legal substance federally so if you're going to patent and trademark anything Camis you can only do it in the state people have done it federally but we're finding that the US government is finding out that it's a cannabis company and they're revoking their trademark the theme here that I kind of wanted to focus on is kind of the question of you know when is enough enough um and you all have your hands full Laura I don't want to leave you out of this you kind of took your leap uh more than a year ago when you bought uh another business a related business but another business in Texas and we spent a lot of the last year talking about all the things you've been through uh trying to turn that business around do you ever stop and wonder what would have happened if you'd put that time energy and money into Jimmy Bean wool instead of buying another business um sure I wonder it for a second but I am 100% I well maybe I'm 99% sure that this was the right decision because we had been putting our time and our energy into Jimmy beans um so I think this was the best way to expand 100% no doubt I think that there's like a limit unless we decided we wanted to go kind of the discounting route um and or do some other things I think this is the best way for us to actually grow Jimmy beans and it's working you know the key is What Dana said when you when you become comp which takes years when you get good at this it's just it's it's right in your wheelhouse it's like I said it's not like I W and open an ice cream shop though I could open an ice cream shop and I could get it open I doubt that the return would be there that would make me happy with it but the point is we'll be talking about Jay's ice cream shop in a year well no no it'll be called Jason Jason Cafe is what it's gonna be called I mean if I did it uh so uh you want to see the logo no no um so the point is once you're you're good at it and and then you you mitigate your risk because I think we're all there's a limit to what any of us would put into something I'm not going to bet the ranch I'm not even going to come close to betting the ranch and anything but can you tell us what you're prepared to invest I don't know I prepared it's a good word I haven't thought about it that I don't know I'll probably put $100,000 into it and like it's not going to make or break me and frankly this is entrepreneurial thinking if if it doesn't work okay you take a tax deduction for the money you spent on it so now it's really going to cost $65,000 I I got to tell you the idea of this is where my head's changed a little bit I like doing this this is like you see guys that spend their entire years after 60 chasing their golf score and like if that's what makes someone happy it makes them happy it makes me happy starting businesses let me ask you this I I think you might be underestimating how much effort it will take to get this off the ground well that's that's there's no question that's my story building a website uh tell us about that I mean I first of all you're absolute guilty as I've always underestimated there's no question about it but we've just built a new Jason home website I've gone through all the trials and tribulations of of hiring developers and being disappointed what they come up with and you didn't have a lot of fun doing that no it was horrible but I learned from it and I I I haven't in fact ran this past my son who's in charge of it yet so he can squash me but but he's gotten really good at at figuring out how to do it so I'm not sure I also have to tell you I'm not 100% sure I'm doing it but I'm moving towards it if you build it a a website to sell Fine Art expensive art it's got to be a very nice website sure but I don't know I think Lauren I'm going to disagree with you I think that that's the easiest that's going to be one of the easier parts of it I don't see this is being this is so aligned with what you already do Jay right and I've got so many asset to leverage keep in mind my friend's got a gallery I have a gallery my friend makes the art already he already makes the art I already have frame it's just another right it's another Channel we're all this is like he's got the car and I got the gas I mean we're the perfect fit together and like he's my brother I mean i' I've been tight with him for literally since I met him in a trade show you know I was a kid at a trade show I was 22 years old 23 years old going to trade shows he's a year younger than me I've been tight with them for for for 35 years and we finally both realized the world has changed a lot and a lot of the galleries have gone out and the fact is there's still people that want to buy quote unquote real art whatever that is to them and um we think there's an opp so I don't know like I said here's here's the key I'm having a really good time planning this out whether I do it or not we'll see I think I'm GNA do it though you probably have employees that would really love you know something new to work on not just love it but I've got my key person who runs my art business I would like her to be able to make some more money so no it's it's a you get the website built how are you going to Market it how are you going to tell the world you already have 50,000 people I mean you already have I can't give away all my Trade Secrets right now Lauren well and if you think to me you could easily spend a 100 Grand going to two trade shows so which is gonna which has the benefit or which has the biggest reward right he used to go to the New York art expo and was the busiest boot there and that whole model is blown up the art business most of you wouldn't know this most of the world the whole art world's been blown up for 20 years the world World changed dramatically but I believe that we have the core competencies and expertise to to go ahead and pull this off do I think it's going to turn into a $50 million year business no I don't need it to turn into a $50 million year business that's the beauty of this if it's a million dollar a year and it's incremental business everybody's happy so I'm in the beginning stages of like I said I was going to ask do you have a set of questions you ask yourself before you decide to take a leap like this thank you for asking here they are five things and believe this works in every I I'll ask Laura and Dana to to to think about this in your businesses first question what kind of upsid does this have you know what opening a ice cream shot there's just no big upside and I so that's why that that finishes that one but but you know this is enough upside I don't know I could do some serious business with it but it's got good upside number two what's it going to cost to launch it I'm not going to put half a million dollars into anything at this point this is not going to cost that kind of money okay number three what if what if things go bad uh can I get out of it signing a lease buying a building Pro here okay done finished I can I can literally pull the plug on at any time um number four is this going to be a pain in the ass business is this going to require a ton of employees no I've already got the infrastructure in in place so there's not going to be a lot of extra employees and lastly and this is the this is really the killer piece that when I hear professors talking about oh the odds of succeeding in business are X percent that's crazy the odds of getting to the NBA are much better if you're seven foot tall and you're extremely athletic well the odds of succeeding if you've got some assets to leverage so the the fifth question is do you have some special expertise or things to leverage to give you an advantage in the marketplace and in that case absolutely I I'm the leader in the framing industry for for 40 some years he's a leader in the art business for 40 some years we know what we're doing we've got warehouses we've got showrooms we've got we've got some you know some computer expertise so there's something to leverage whereas if I went in the ice cream business what do I got I mean I'll run a nicer store but it's not like I'm you know making the ice cream in the back so I could go through yeah so so that's the criteria and this fit this hits all five of them but in all other criterial do you have time absolutely right do you you might have everything but do you have the time to dedicate how much time stuck is this going to be but because you have so many things in place you don't have to go out and look for you know a gallery you don't have to go out and try to find new employees everything is already lined up so it Narrows down your time same thing with the business that we were doing we were already making it it's easy to make it was already in line with what we're doing and tan is retired he's got time he's retired yeah put Dana through your fivepoint test okay let's try it okay number one what kind of upside number one sounds like who knows sounds like there could be some good upside to this if she gets it out there and Brands it and a lot of people buy it right yeah first they've already started talking to me about the first African-American cannabis beverage maker great okay number two she's not buying a factory she's not starting a fact there's no huge you're not putting $300,000 into this it's a minimal okay number two okay number three you're not going to have to hire uh um 20 people to do this it's not going to be a big pain um if the if you decide oh this isn't as easy as I thought boom you pull the plug on it you're not going to you don't have any commitments and lastly do you have any expertise that other people don't have well the fun part of that in her case is no one really does at this stage it's a new industry so she's got as good a shot as anybody and she also has a good story to tell and she's got some good business skills she's picked up doing the other business so she's got you know it's not like completely out of left field so I would it fits all my five things and and my argument is if it doesn't hit one of the five probably not good I if if didn't hit one of my five any one of those five things would take it out of of the mix for me and look at uh Laura with with with buying the company that makes you earn I would say it fit all five things in the it Laura do you agree yeah I totally agree yours has the pain in asps a little bit like you do have a lot of new employees but it's worth it because this fits your business really well and it it this isn't like an extra this really supports your business so it's worth the pain because it supports your core business So 20% of our Core Business came from this company and then 20% of this company's business came from the other one yeah yeah so it's super there's a there are a lot of synergies right Synergy leverage uh symbiotic relationship got all those good words in there yep and we already have the as you said the the expertise and that's you know it's funny that you say that but where we are excelling is in the areas that we have expertise and experience which is the marketing the sales you know the communication the customer service and where we're struggling is the area that's brand new to us which is manufacturing you know and operations but you're figuring it out we're figuring it out I've noticed that business owners you know will start a business and then start another business that's unrelated and justify it by calling it you know multiple streams of income and those are the business owners that I really question why they're doing it and because they've heard some GIF or read some quote on Facebook or social media that says are true business person has multiple streams of income if I was restarting another business like peral boy that I couldn't do from my home I needed to Leisa space I've got to hire employees they all have to be licensed you know all of that then that to me isn't smart and if it takes just as much time I need 48 hours in a day versus 24 because of all the time I give to Peril Boyd having multiple streams of income in my opinion only works when that other stream of income complements what your already doing or it's so easy to do based on what you've learned you're not losing any sleep over it like I'm not doing the tea thing it's a couple conversations sending a couple emails it's maybe two maybe three hours if that you got to be careful you know because this podcast sounds like oh yeah do other stuff no I'm not telling anyone they should do that it's like if something no but but I gotta tell you a banker once told me and he was dead serious when he told me this he said most entrepreneurs that they deal with eventually think they need to open a restaurant and they lose a lot of money on it and I laughed out loud and I go oh I'm glad I didn't tell them about my Cafe idea that I had because I did I've gone through that in my head and I've talked myself out of it because I know it's going to be a pain and and um so uh it's not a matter of needing to do it it's a matter of wanting to do it well then that's a whole different thing too it's my hobby yes yeah it's not all it's not all about money um right so Lauren you may remember that like five or six or seven or eight years ago we decided to expand by going into selling fabric so you know I had read all these books and we had thought and I had these friends that um you know he ran a company that sold both sold and produced both yarn and fabric by the yard for Quilters and sewers and so you know I had read everything about how find your customer and then figure out what else you can sell to that customer it's called horizontal integration yes you know and the statistic out there was that 50% or 46% of knitts are also sewists you know they also quilt or they sew dresses or whatever so I'm like oh slam dunk right so we invested it was probably $100,000 or more um and we learned a really really hard lesson that the way people shop they either shop with knitting in mind and they're not or they go shop with sewing in mind and they want a sew shop for the most part like if you are in a really small town or you know you're going to Joann's and maybe you're kind of crafting across the board but anyway it didn't work and part of why it didn't work goes to what Dana was saying and or I guess what Lauren was asking is we should have been spending that time and that money developing and strengthening our Core Business of knitting as opposed to trying to expand out into something else and so we were Spread Way Too Thin so the knitting business took a hit well what was the main reason it didn't work um that's a good question there were probably let me guess one was The Branding got a little confusing you just said it they're no longer the knitting place and two is there's other people in that industry that probably knew what they were doing better than you did 100% and that they were 100% dedicated to it yeah I mean my businesses are all you'll think about it I they're all related they're all in the home design field they're all they're all got an artistic side to it they are connected by Design let me ask you this Jay that makes perfect sense I I think you're absolutely right the thing I stumble on a little bit is that I think selling online is is tricky it's not something that necessarily comes naturally to you personally you've done very well selling Jason home online and I'm curious well I've learned lessons from that first of all I'm not suggesting I'm an online expert by any way shape or form but I'm suggesting that that business is not just an it's not like selling a t- shirts online and I believe that our expertise of having two showrooms and having expertise of finding artists and developing artists and framing the pictures and shipping is a large part of the equation so while the people out there clearly have more expertise and on the web than we do they've got Venture Capital most of them they got they got 40 people working there probably that are doing the web sub they don't have the other pieces necessarily so you it could end up being that oh gee I overestimated how easy it was going to be to break there I don't think so right I don't need I don't have a lot of over like I said I've got all the pieces in place to run the business part of it so all I I just got to get the website done yeah and Lauren I would agree with you 10 years ago but I really think like the barrier to entry and building a site it's just so easy now well I don't know if it's easy it's easier it's so much easier and you already have a customer base you know that you can start to pull from the basic decision first I think is are you building a site from scratch or are you going to Shopify do you know the answer to that I got this from you from one of your expert people on that said Shopify is the way to go and yeah we'll probably do it on Shopify and I I literally have not talked to my kid about this yet so I I assume no well I just I don't want to get stomped on yet I'm giving it a few days of fun before I tell him um but but no I I probably will be Shopify um but that not the only piece and you have to remember I have no other all of the people the I have no other expenses I'm already here I've got all the infrastructure in place all I got to do is fund the website see that's my not my experience I struggle a little bit with selling online right now like I have products and and our numbers are very Bleak so for me it's selling online and then marketing no you'd have to spend the money and yeah that's what we're doing right now I wasn't on that episode when you talk about marketing you were going to spend 50 that's not a lot of money spending $50,000 for marketing I I would put more money into I'm not saying I won't put some money into it I'll have to put some money into the the quote unquote marketing it no question um that would be part of the the formula I'm not suggesting I'm going to do this and all I got to do is fund the website no I got to get the website built and I have to do some marketing and but you got to remember I'm splitting it in two now and it's not going to cost either of us that much and we believe that there's an opportunity in the marketplace right now because how many think of your hometown half the galleries are of going out of business I mean there's not a lot of places to buy art these days Laura Jay mentioned um possibly having to compete with businesses that are venture-backed that's something you've been doing uh I'm I'm curious what's your thinking about the that these days how is that affecting you you're talking about original art right so you're not going to have 10 different people who are selling the same piece right it's going to be no exactly it's going to be proprietary we're going to have our own artists and our own art yes so that's I mean sure the venture-backed guys are going to end up having more marketing power and can drive more traffic but you can't compare no there's some beautiful sites out there for art right now beautiful sites for us it's the VC money I don't know I mean you know part of me is just like it is what it is you know and we just have to live with it and let it kind of pass through but the the brat and me gets really frustrated that we've had now two major venture-backed companies come into this yarn industry space and they've brought in God I don't know between the two of them $150 million probably in funding and so they've if you think about it this way they've been able to funnel $150 million or let's say a $100 million into our supplier Pockets which has been great so it's been really good for all the yarn manufacturers because you know they've been able to fulfill the these big orders but then they go out and they're putting all this stuff on their websites and selling it for you know not much over cost they're making zero profit you know between the two of them you know they've done hundreds of millions of dollars I'm sure in sales and they're not profitable sales so now all of a sudden you know if you think about the average yarn store is doing a couple hundred, in sales that money has to come from somewhere and so it's really destroyed you know the landscape and the number of small independent yarn shops which for our industry where that causes a problem is that now you don't have a bunch of shops that cater to customers and that teach people how to knit and help Elevate their skills and create Community um and so then that means that the industry itself is kind of dying out in some ways it'll be fine it is what it is we're adapting you know all those things well let's not say dying out it's suffering as frame shops have suffered but it will be back maybe not where it was but but but once the landscap it be right because the people that are going in with the big money are not going to be successful enough to keep putting money into it they'll eventually go away it and one of them did has already gone away and then you know the other one um it's happening in the frame business I've watched some big money people get in the frame business and it ain't working running stores I mean is kind of running and guitar stores you know Doug plays the guitar and then I run so you see the same thing kind of happening there with Guitar Center and then you've got the other run shops and you lose that Community when they decide to go away they decide it's not working what's not working cuz there's there's no money I mean they're not getting the return on investment the industry is smaller than they thought it was it's just not worth it I mean the industry is just not that big it's and that's that's the mistake they made the framing industry is a very similar size and we've seen the same thing in it the big big big money came into it and it's not working because the industry wasn't big enough and it's the same pattern that we've seen for years years and years and years you look on Wired Magazine or you look at Fast Company or Inc um magazine and everybody that's on the cover it's these shiny object business they bring all this money in they've got this great platform they sell all this crap they're not making a profit and they're setting they're creating this pattern and this kind of business model that all these other people who don't have the money try to um emulate but they don't realize that they're not profitable models AB absolutely it's happening all over the place Dana like with um what is it dry bar you know who knows maybe they're super super profitable and everything is really great with dry bar do you know Dana no go ahead yeah I do but go ahead Laura I'm want to hear what you want to say well it just you know then you see all of these kind of copycats like in Reno we're not big enough to have a dry bar but we have a blow dry bar and we have a you know all these other kinds of CopyCat ones and you never see anybody in them um you know it's like the cupcake places I mean that's really popular for a little while and everybody's doing cupcakes Sex in the City had that famous cupcake place in New York so everybody thought oh we're going to do one of those yes so this is the thing and so about the in it's such a great topic about the VC dollars is because I just think the VC dollars are misguided as to what the bright new shiny thing is it's not that bright it's not that shiny what frustrates me is that they're not looking at at businesses like mine that I believe are reol uing or you know innovating in an industry that's already there for example to me as a VC I would be interested in investing in a business like mine why because I already see how much money women with thick and curly hair are spending on products but there is no data about how much women are spending on getting their hair done why not because the industry is not tapped and the people who have the money don't really care about the spending habits of black women getting their hair done it is a multi-billion Dollar business business that nobody is paying attention to and Dana is the only walking only 7day a week hair salon and so but they're going to go to the lwh hanging fruit but these Venture guys don't go out of business because they hit the home run one out of whatever four five six times and it makes up for all the other losses if they were that if they were so stupid they wouldn't be in business these guys have gotten Rich from it so you can't I'm not criticizing them it's just the nature of the Beast that they're wrong A lot of times but they make it up when they hit the big one but they could be wrong less if they would be wrong less if they got out of their box and stopped only investing in what they know and start looking at what they didn't know I don't know how to reconcile this in my brain because it's capitalism you know it is what it is at the same time the damage that it does to the ecosystem you know in terms of just trying not trying to make a profit and but instead just trying to build a customer list so that then you can sell this customer list and just focusing on revenue is really really damaging that is a real problem you know and there are some great benefits to it I mean it's a lot of money that has been injected into our industry you know a lot of designers um you know like I said the suppliers have gotten paid really well but what's going to happen is they're going to go away and then we've got all this we're going to have to clean up because now we don't have these shops you know they've put so many people out of business through um this lower priced model you know it's the Amazon thing I don't know what you do about it you know I I was driving I was in Fort Worth the other day and I realized that now I was in this like little cute trendy kind of area with these cute pizza shops and these cafes and blah blah blah and I'm like oh this is the new strip mall right because now I could be in any city in the country and they have one of these cute little areas that has like the trendy yoga shop and the trendy coffee shop and blah blah blah so it's this generation's respons to the strip malls um so I feel like you know we're we're really trying to turn back and find this balance between Mom and Pop and convenient shopping online but it doesn't have to be discount shopping I don't know no it's going to they're going to have to have margins to stay in business it's happened in the frame industry and there's plenty of there's plenty of healthy successful picture frame shops in America a lot less than there used to be but but the the fact is it was C out there were 25,000 frame shops now there's eight well the 8,000 are left are the people who are being better business people and they're I feel very strongly the framing industry it's certainly not a big growth industry but it's solid and it's going to stay in business and I'm sure the same thing is true with the yarn industry because people want to go into the local yarn shop enough people do Jay you were saying a moment ago that there are a number of uh beautiful websites selling beautiful art that you presumably will have to compete with why isn't that a concern to you because it's a big enough market that I believe I can give a better value proposition to the customer that will get our piece of it I'm not I'm NE you'll never hear me use the phrase oh we're going to disrupt the market oh please most most people that use that phrase they disrupt the bank accounts of their investors and that's about the only disruption that goes on I mean I'm not suggesting I'm disrupting the market I'm suggesting that given our overheads given our exposure given our expertise I don't think it's crazy to think we could do a million 2 million3 million $4 million a year out of a market and that's not a lot my thanks to Jay gz Dana White and Laura Xander as always thanks for sharing guys I really appreciate it wait wait don't leave yet if you have a question or a comment that you'd like the 21 hats owners to address send it to me by replying to your Morning Report or by email at Lauren at 21h hats.com that's l r n21 hats.com do it now before you forget and don't be afraid to tell Jay what you really think you can take it and if you got something out of this conversation help us reach more business owners tell a friend subscribe and review us wherever you get your podcasts follow us on Twitter subscribe to the morning report at 21h hats.com this episode was produced by Jess dubron founder of blank word Productions okay now you can leave thanks for listening everyone [Music]