We’re Raising Wages for Everybody

[Music] hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman this week we talk about confronting inflation raising your own prices what businesses owe their employees and the venture-backed competitor who's opening a store in Jay gz's backyard among the questions we discuss are would you take back a rebound employee are unemployment payments the main reason owners are struggling to fill jobs is there anything wrong with taking business away from other business how many companies are truly disruptive and do owners take all of a business's risk or are there risks for employees too even in Good Times owning and running a business can be a lonely Pursuit our hope is that these weekly conversations will 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 one programming note we will not be publishing podcast episodes the next 2 weeks our next episode will drop as we say in the podcasting business on Tuesday June 3rd but fear not you do not have to face the next two weeks without hearing my voice on each of the next two Tuesdays I will publish a 21 hats video conversation at 21h hats.com and in the morning report the first one will be a terrific discussion about employee ownership featuring two CEOs who have adopted Employee Stock ownership plans and one who is a skeptic now on to today's episode joining me this week are regulars Paul DS who is founder and CEO of Paul DS cabinet makers which makes custom conference tables outside of Philadelphia Jay goz whose companies in Chicago include a picture frame business artist frame service and a home furnishing store Jason Hol and Dana White who is CEO of paraly Boyd a chain of hair salons based in Detroit the episode is titled we're raising wages on everybody Welcome Paul Jay and Dana great to have you here thanks so much for joining me last week we did a sort of a recap of where we stand with covid and now at least from what I'm reading the topic of the moment seems to be inflation so our concerns seem to have shifted from covid to inflation and I guess that's kind of progress of A Sort but I'm wondering if it's affecting your businesses Paul let me start with you one of the things that everybody's talking about is the price of lumber you make uh custom tables Uh custom conference tables out of wood is this a problem for you no why not because the price of OD the particular kinds of wood that we use have not changed as a matter of fact some of them have gone down so a couple of weeks ago I uh hearing all the this inflation talk and wood talk I decided to pull out my pricing spreadsheet and check the default prices we use against recent invoices and I found to my surprise that most of the major sheet goods and these are things like MDF and plywood that is not used in home construction this is furniture grade uh the price had actually gone down by 10 to 15% since the beginning of the year now one we're buying 2x4s an oriented strand board which we use to make crates that is used in home construction and those prices have gone way up but that's a pretty small percentage of our material costs so I would have to say it's more or less a wash for us so wait why did it go down uh good question probably because uh a new Factory came online or who knows uh or because Furniture factories were running furniture factories were running slower than uh other than they may have anticipated and there was plenty of Supply so lumber prices go up and down and they don't always go up sometimes they go down so that's the best guess I can give you what else do you buy a lot of are you seeing inflation in any other areas uh labor to a certain extent uh freight cost yeah Freight's going through the roof and um but most of the things that we buy no I haven't actually seen much change how about you Dana are you seeing any inflationary pressure nope not at all no inflationary pressure I'm noticing um a little higher on shipping but that's about it how about uh for labor are you having trouble keeping people finding people h oh man you know I'm really fortunate to have the operations manager that I do her background is recruitment so in her work recruitment is 247 7 days a week so she's constantly doing it it's she said it's I do it throughout the day and you know with the list of other things that we have to do for the business recruitment is key um we did just have um a manager resign and we're okay with that she said nope we're okay I'm ready for that and we're not going to replace her um we're going to um you know operate with the operations manager and the manager um and so but we are fully staffed um we've had low Staffing numbers but not to the point where it's been a concern of where it affects our operations Jay how about you are you facing any inflation issues yes all over the place cardboard is skyrocketed because all these at home shipments I we just got noticed 8% just for and I ship you know I my wholesale business ships out frames every day and packages and they're all in cardboard boxes so that's a huge hit the containers I get from from Europe with molding on the container prices have gone up dramatically plex's gone up dramatically glass has gone up some um l labor I'm in Chicago so every year for the last I don't know four or five years they've gone up a dollar the minimum wage so this year it topped out at 15 going forward it's just going to be a cost of living increase but that has caused compression in my pay because you know it used to be the people that were here for years made $4 an hour more and now it's less so it's not it's not running all the way through the place everyone's not getting a dollar raise but it's certainly is affecting the labor and um we're raising wages on everybody do you have openings well I just had a very unusual event I just had someone quit after 15 years he worked in the you know the frame cutting Department he says he's getting a dollar an hour more and he didn't get his razor viiew yet it was going to be in June we would have come close to that very he didn't say where he was going which tells me there's not a whole lot of of competitors in Chicago that are cutting frames to hire someone like that so I I have a good guess where he's going and my guess is he's going to a place that another guy had left a while ago he wanted to come back we didn't want him back because he wasn't worth bringing back and we suspect he called him and recruited him and we're sitting tight because we think there's better than a 50/50 he's going to call us in two weeks and want back because this is the part they never ask yeah you can pay someone a dollar an hour more the question is are you going to give them $40 hours a week because the game is they leave they're there for a week or two and they start cutting their hours back this has happened before and this happened to this guy um so we think there's a 5050 he's coming back um and I would take him back he left you know he gave notice and you said he wasn't his raay review hadn't come up yet did you offer to match well that's a good question because I just asked the manager that I he didn't and I said maybe we should have and he agreed it would have been smart to say just so you know this is what your raise is going to be um but we're going to sit tight for a couple weeks and then call them and uh you know let him get see what goes on there because there's three things that you don't know at this level that that he didn't really check out the first thing is are you going to get full hours two what kind of environment I have a nice big bright clean factory with a nice big with a nice big cafeteria room and nice bathrooms it's a nice and lockers I have a nice place a lot of these places they go to work are you know in very dark and dingy places maybe in a basement and it's not a great environment so that's two and three is you know what's the management like over there someone coming down and screaming at you couple days because they're mad about some I mean we treat people well and I think that people especially that people that have been there for 16 years probably haven't had a lot of other jobs so well why do you after 15 or 16 years why do you think he left for a dollar an hour I think that this guy did a sales job on him and a dollar an hour I mean for you know you yeah I don't think it was great for us not to say just so you know you're were going to get a raise on the other hand what about his side why didn't he ask listen I know my rise is coming up next month do you know what I'm gonna get he should have asked I think that he got sold a bill of goods from this other guy and uh who knows what goes on in his head and and he's not I have to say he's on the lower end of he's he's he's not one of the best people if he was one of the best people I'm sure the manager would have would have worked harder to try to keep him he was barely frankly there's always a line he was barely acceptable not reliable barely reliable so he was he was he was right at the bottom of the tier so uh if he doesn't come back can we do better at this Market I would have tried to keep him probably because it's kind of tough to hire right now but so we're going to wait and see what happens have you done this before hired somebody back yeah not a lot cuz it usually doesn't I had one case where I had like a great delivery guy and he didn't wasn't happy with his raise but the reality is people frequently aren't happy with their raise and um he he he he stops by the office because he brings me stuff once in a while and he tells me he's leaving I go what do you mean you're leaving and I well I asked for raise and they didn't give it to I go why didn't you say something I'm sure that my manager said if you're not happy go talk to you know the next guy in charge he didn't bother he left I did have a conversation with my manager saying in most jobs listen you can always if someone quits you can always say oh we should have paid him more well you know you can lose control of your payroll that way I mean you can't just go paying everyone more just in case someone wants to quit but in this particular case he's a truck driver and there's a demand for truck drivers so we waited a few weeks we called him he was happy to come back we paid him more but he found out the world's not such a kind place he's he was driving a refrigerated truck that was breaking half the time they were D sending him out in the midafternoon to sit in rush hour he was getting home it was a brutal bad job and he was thrilled to come back and we were thrilled to have him so I I would never say I would never take somebody back if they quit sometimes you got to let people go check out some other options Paul Dana have you guys done this yep I don't have any objection theoretically to taking someone back some people do yeah no my old partner was adamant about it and um no I did take a guy back once and no I done it twice and both times it didn't work out in the long term but it could have um my partner hated it though he hated the idea he always wanted to make an example out of anybody who left and uh wow so he would be what did that mean well if someone quit and they wanted to come back his thought was you then tell the rest of the employees like see you quit and I'm not taking him back he's now he could he made his beted he can line it and uh I think that that's that's debatable because in both cases when I had people come back they brought news similar to what Jay said about what the rest of the world was like and uh the the desire to come back was a strong endorsement that we were a good place to work and those guys ultimately left mostly not because of something we did but because they had problems that caused them to not you know me not wanting to have them around right I mean how great do we look that the truck driver guy came back and we were happy and we treated him nice I just and it worked out and it worked out great no he's there and I I was you know I took a little responsibility that I I I said we probably should have paid him a little more just because it was a truck driver thing but but we uh were happy to have him back he's happy to be back and all is good I just think why would you not people sometimes in this particular case the one that just left I'm sure someone sold him a bill of goods and God knows what they told them and I you can blame somebody for trying to make a little more money Dana it also dep depends on why they left I've hired people back um and again I'm I'm in a business that is different for the people that work for me so the people that work for me are used to having a lot of autonomy wearing what they want coming and going as they please you know giving whatever level of customer service that they feel like and so they come even though we communicate to them saying hey this is what this is but they come to the salon thinking they nod did they put on the best performance to get the job and then when they get in there even though it's everything we told them it was everything the video said it was they're still finding it an adjustment and then they leave and realize it's harder out here because when I'm not at Peril boy I have to pay for everything I have to pay for my booth I have to pay for my flat irons I have to pay for all my products and I still need to get people in the salon so at Peril boy everything is provided for you um and so we've had girls leave and come back because it was really hard um and and and we encourage them we don't necessarily not want you to go we want you to grow as a stylist um but we still think you should eat while while you're doing it I've had stylist come back and tell me um yeah I thought I wasn't getting enough money here then I went and had Booth rent I had four clients for the week because I I'm not a good marketer I haven't put myself out there and my booth rent was you know $150 and I made2 200 that week and I still had to buy product put gas my car paid for my life I was only $50 and Market myself so a lot of stylists didn't really realize the business side of it um or when there's a dry spell when for some reason you've you know switch salons and not everybody came with you when money is tight they like having a reliable check actually received a resume last week um she said hey has she worked here before I have a list of do not hires and when we're recruiting we see a resume we like they go and they go through that list of not hires and those are the people who it was just a lot of drama we had to call the police on them there was it is just bad that's probably a good policy not to rehire someone that you had to call the police on that sounds solid Jay we got into this talking about inflation and you were saying that it's significant for you kind of across the board what are you doing about it I'm trying to keep expenses under control but we're having to put through some price increases it is what it is I've learned one of the biggest mistakes business owners makes is is is just absorbing it absorbing it absorbing it and you can't when I was doing business speeches actually a hair salon company hired me to do a speech to their customers and I asked the people in the audience who's drais your prices in the last three years and like they're the worst at it because this is like they're right there with the customer they they're afraid of raise they're charging $32 now and if they think they go to 33 the salon people are all worried about the clients are get made at them and like I would say unlike businesses like mine when you get an increase on a raw material and you've got a multiple you mark it up in a salon it's trickier because it's not like Dana got a big increase on her cardboard prices this week so there's not there's not as much you know a trigger to say oh my God we got to raise prices so you know places that are all service I think are more vulnerable to to not raising their prices along with the cost of of doing business because they don't have the material cost well it's also harder for Dana because she's got a a list price everybody knows what it costs for her service yeah exactly yeah that's true and you factor in the frequency in which my guests come to the salon it's a monthly bill so if you're coming twice a month and you're paying $80 and now you're paying $100 right that that can be a challenge for some for some people that's an extra $20 so uh for some for most it's okay but um I think the best thing I ever did was raise my prices because I hadn't done it we talked about that a little bit here didn't we yeah I I I needed to do it I I think people that are in business need to do the math and there's no you have to accept will that extra dollar lose a customer yeah maybe I'm not saying it won't but you make up for it in the other 99 that paid the dollar or the another 97 or 96 to pay the dollar it's like it's price elasticity let me say you this is is there a Silver Lining and all this talk about inflation does that make it easier for all of you to raise your prices even if you don't really need to I mean Paul if you if you told a potential customer that you had to raise prices because of the cost of lumber I don't think anybody would argue with you even though you've told us that's not really a problem well I mean to the extent I forgot about cardboard we actually buy a lot of cardboard um so some of my prices have gone up but the nature of my product is is just it's it's not it's not something that has a normal price every job we do is custom and we always adjust our pricing to suit the customer we don't even make the same thing and sell it to two people at different prices we just always make a different thing so it's a little bit it's a little bit harder to to to just post a counterfactual where there was some other price that was unaffected in this transaction Dana how about you do is this an opportunity for you to raise your prices a little bit more no no we've um we're not going to raise our prices but we've added uh treatments we've added more services um I I rais my prices less than a year ago I don't want to do that again um I'd rather upsell what are some things we can put in place um to make it you know that are useful for our guest and when he brought those treatments in and we upsell those treatments and they're treatments that people want so the ticket prices are higher also we have retail and we include some of our retail in our treatments which allows for them to have a discount if you will so no we're not going to raise it due to inflation we're just adding treatments and then selling those treatments and that in turn raises our prices I would I would say this um I bought real estate along the way to house my businesses and you know if you own real estate inflation is a good thing I mean you're leveraged on the real estate you've got whatever 20% into it if if your real estate goes up 2% that's a 10% return on your money right there so you know if you own real estate this is another reason to own real estate inflation over a long period of time you know makes a lot of money versus your rent just going up something else I wanted to talk about today uh and maybe it's a factor in your uh employee situation Jay I wondering if any of you are dealing with employee burnout um there's been a lot in the news about that lately uh as well yes yes I have two salespeople one of them was here for 15 years again I don't turn a lot of people um part of this is co no question about it the anxiety level for everyone has been higher they're dealing with the public they got PL in front of them they're wearing masks the whole thing people need to realize that people that are dealing with customers all day long it's very different than someone that's working in an insurance office and doesn't see anybody or they're working at their house this is far harder on people who are out there all day long dealing with 20 30 customers a day and I would say that it is related to the two people that have just quit that that was really just pushed it over the top did you see that coming um you know I kept saying I've said it on this podcast everyone seems like they're okay they're not okay I so a little bit it hasn't been horrible I got 130 employees I've lost three you know so it's not like it's terrible but absolutely related to covid they already had some anxiety this just pushed it over the top and uh in one case the spouse got a big job promotion they didn't you know the money wasn't is critical and the other one you know broke up with the boyfriend so didn't have someone paying half the rent so there was there was some money stuff involved but it the the it's not all Co I wouldn't say but you know it's just it's a mix it's the whole mix so I did get some I've got some new people starting and they're very excited was it hard to find them not really I you know we put the same ad out we always put and we got you know we got a we got a really good applicant now if I wouldn't have gotten this one really good applicant would have been yeah I I didn't get three three great applicants I got one great applicant so um it's it's definitely a little harder and I you know I saw President Biden the other day saying something about that this unemployment extra money is not affecting people looking for jobs because if they get offered a job they have to take it what fantasy world is he living in how would the government know if somebody offered someone a job and they didn't take it that's just I absolutely know for a fact it's not helping any I'm not saying it's the entire problem but it is absolutely a factor that there are people that are getting more money in unemployment than they're getting going to work I'm not saying it's a huge I don't know how big it is but it's certainly a factor how do you know it for a fact because I know I know I know from personal experience of people that that are that are that are doing it I I know from putting ads out we're getting way less people I mean how could that not be having an effect that someone can sit home and make more money sitting at at home how could that not be a factor you're going to say no one in the world is going to say oh no I need to go out and get a job of course it's a factor I I agree with you I think it is a factor I think there are other factors as well and I think it's hard to know which is the more important factor but the president said it wasn't a factor because if they get offered a job they have to take it or and that's just that's not true how would the government know if they had offered a job so I that's just I think he overstated that one a little bit that's supposed to be over I Believe by September does anyone know I think that's right Lauren what are the other factors well for one thing uh in the most recent job report female employees have not been coming back and that you know raises an obvious question is child care possibly a factor in this absolutely I don't think that's a question of course that's a factor again of course it's a factor which one is more important I I I that have no idea I'm not having a competition of what's most important I'm saying these are all factors that's all these are all factors um um there's some some people who do not want to expose thems because of either someone in their household or themsel that's a factor I'm guessing that that's probably the bulk of it the unemployment the taking care of children and worrying about their personal safety or some of their house I would say those three factors have absolutely made it harder to hire right now I'm frustrated with the blame I'm seeing a lot of blame on business owners well if your staff members can make more money on unemployment than they do in your business then you're a bad business owner I've had staff come to me not need a raise because of their output or what they're contributing at work but they want a raise based on what's happened in their life she came to us and said hey I need $2 more an hour because of what's going on in my personal life versus hey I deserve a raise because of what I'm contributing and so when we tried to have that conversation with her the response to us was well if you pay me more I'll perform better ouch I was not I I that's not how I knew it to work I was under the impression of you perform you show your value and the company pays you that's not the culture if for the culture of the people that work with me that's not it if you want me to do better you'll pay me more and then I'll do better I'm of the mind and you have to go find a job that meets your lifestyle and then her response to me was well what can I do I graduated to high school I've got a cosmetology license that's it and I've got two kids I need to feed I need you to help me and I said yes but I need you to perform so I could pay you you know what I mean so that's a very sad story because this this woman has not figured it out and she's going to struggle now and it's unfortunate that she hasn't figured out that she's supposed to work hard at a job and that's how you make more money were you able to convince her Dana no no she took it to the customers she took it to the customers that's a problem yeah it was a problem and she you know said well what did you expect me to do and right in the middle of telling her I stopped because I realized she just didn't get it very good she said if you'll just give me the raise I'll stop telling the customers that you don't know how to pay your people and I said no I said no you'll have to go to another Salon Dana have you had successes as well have there been people that came in with similar attitudes that you've been able to talk to and explain how it actually is supposed to work yes and they left one girl left which was great right which was like okay you have to do you have to go do what's best for you but the mentality of some of the people that worked that have worked for me is Dana no you're rich you own a business your job is to make sure I'm okay and I'm supposed to do what I feel like doing the moral of the story is there's some people in the world who don't get it there are people in this world who think they should be they should do just what's barely barely acceptable to their job and that's a lot of the population I will say there a lot of the population has worked for really terrible bosses and really terrible companies and that has bred some of that um not your companies of course Paul what's going on with your employees uh I know you've told us in the past that they tend to be quite stoic uh it might be harder for you to know but do you think you have burnout issues in in your shop I haven't seen evidence of it so who knows but they show up they work hard team gets along it's probably easier uh because what we do has an inherent satisfaction to it it's just cool to make cool things and it's a good team and I think I'm a really good boss so I I haven't haven't really had anybody who's said anything to me I think we've also tried to be very flexible in our response to the situation and the the the statement you made Dana you know like you're rich you have a business you should take care of me I actually don't disagree with that as long as they hold up their end of the bargain which is I'm rich because you do your job and if we can make a prosperous company together then the prosperity should go to everybody to the extent that it's reasonable Jay did I hear you choke there for a second yeah Jay probably just I I don't want to give the I'm not I think people should be paid well I think people should should make Market wages I think people should get rewards if they're if things are going well but it I'm there is a line there between the one that owns the company that has all the risk that has had to fuel the company and had to mortgage their this isn't this isn't social there is a line there so I I hear what you're saying I I don't know that I disagree I just think that there is a line there to where the the owner of the company who took all the risk who continues to take the risk that has all the exposure should be compensated for that and that's all well let let me just challenge you on that who's who's taking all the risk so when someone comes to work for you they're foregoing all other opportunities and so that that's a risk right not really not really I disagree I think that the people who come and and dedicate I mean my employees put a ton of energy into making this place succeed and it all has all of us have to be pointed in the same direction now I've had a good experience with employees on the whole and I can certainly see that Jay you've had a lot more employees than I have in Dana it sounds like your employees are just different from mine or some of them anyway and that would certainly change my opinion if I'd gone through the last 30 years in different atmosphere but based on my experience uh I I see us the it's been a partnership between me and my employees and when we all got clear on what we were doing and what was the result of doing a good job then the company worked much better but it sounds like you're saying it's a risk for the person who goes to the casino because they chose to go to that casino and put their money all on black or you know what I mean like they take a risk by forgoing other opportunities through their choice the second that they choose not to I guess take that risk they apply and go somebody else I mean I think we're using the word risk very I don't know if the word risk applies it's different kind of risk but yeah Paul you're making a lot more money than they make yes so right you did exactly what I'm talking about the reason why you're making a lot more I'm not making as much as I could make though I don't know if what if I was less generous to the employees I don't think this has anything to do with generous you're not doing it just because you're a good guy you're doing it because well partially but partially is because they're working hard and you want to keep good and valuable employees and you're paying them well but if you totally subscribe to your whole thing with they're taking all this risk also then then you would say well I don't want to make too much money I'm going to make sure I share it with everyone but you're making what you probably should be making running that company taking all the risks that you're taking um so you are you are working in the capitalistic model of the owner who took the risk who put the money in who who signed the leases who takes all the legal exposure you're being compensated for that you could have said well I think I'm going to just pay everybody another $10,000 this year and take a pay cut but you haven't done that because you're paying them well enough well there have been occasions when I did that well how about this form of risk what if I drop dead tomorrow yeah that's risk on them so this company would not survive that and and they have some of them have been with me for many many years and their resume has been or their whole work experience has been tailored to exactly what we do and what I want us to do yes and so that they're not as well prepared to ride out an event like that and that they they've given up other opportunities I I think that to say that the owner takes all the risk and the employees take none of the risk it's just it doesn't strike me as right that there's various risks spread all around now the Financial Risk sure that's mine the capital risk I mean it's a financial risk for an employee too as someone who has spent most of his career as an employee I I got aide with Paul a little bit on this one there's no siding here I'm not saying that it's wrong to make sure that your employees make enough money that if you drop dead they're okay there's no argument here I it's about the words re I my guess is Paul is running his company very similarly to the way I'm running my company my turnover is less than 10% I have lots of employees that been here 25 years I am concerned about their long-term welfare I'm guessing that we're running the businesses exactly the same I think you're right it's a semantic issue Jay and it's something that you often point out I think it's a question of absolutes is it all the risk or most of the risk or all the risk of involving Capital but there there is some risk for an employee who chooses to forego other possibilities and could be hurt if something went wrong at the place they do choose to work at but my whole point with the risk is the owner has every right and it's only fair and I really avoid using that word it's only fair and right that the owner gets compensated for the financial and and the hours and everything else that goes along with owning a business there's nothing I'm here to say there's nothing wrong with the owner of a company making a really really good living because they own the company that's all I'm saying that that this this idea that oh wait all these people worked hard I should share yeah you share to a degree I'm not arguing that I'm just going and the pro and the pudding in this case because I know what the numbers are with Paul because we've talked about it you're you're not one of those guys that goes no no I'm just going to pull I'm not going to make any more than 25% more than my top person there you haven't done that cuz that would be silly not necessary I think you're treating your people well you're making a nice living from it you're making you're making what somebody running a size business of yours should be making so I think you have a healthy situation there thank you so I don't think there's a debate here at all it's the words we're using and that's I just don't want to make it sound like you know uh it's capitalism sorry I hate to use the ugly word let's move on to another topic uh one more thing I want to cover today which is Jay this involves you I saw a note the other day that framebridge the online Framing Service is opening or has plans to open a brick and mortar store in Chicago and I'm wondering what you think of that you know I'm not their accountant everything is private all I know is the person that started it just this is a this is a venture back company that raised a lot of money and suggested they were going to disrupt the industry I think $90 million or something yeah and keeps talking about disrupting all I know is it's 7 years later it's still being called the startup I don't know what is disrupting I'm sure they're doing some business no question I'm sure they have some happy customers but I like I said the person that took it over um is with a a big holding company and has some money I I don't I don't know what to think all I know is um I haven't seen the disruption it's been seven years wasn't part of the idea that they could charge less because they wouldn't have Brook and mortar stores yes very good Lauren you're good student yes that was their that was part of their Spiel so now they have stores so I I like I said I I'm not on their board I don't have access to their numbers but where did that $90 million go it had to be funding losses where else would it go they didn't invent synthetic blood or something I mean it's $90 million is gone and seven years later and now someone took it over for the famous undisclosed amount and you know what you've seen it I've seen it I have no idea how it's working their original idea was that everything would be done you know by shipping I guess they they wouldn't have stores do in your experience are people willing to ship expensive artwork well clearly some people are CU they're doing some business I'm not arguing there are some people that are doing business with them I just think my guess is half of that business would have never gone into a brick and mortar store in the first place and then since clearly this is a fact I saw it online I believe it is a fact they've gone through about 90 million so when you're losing money you can charge whatever because you're getting funded so at some point the business has to make money and the word the word never been associated with any of the Articles I've read or any of the thing I've heard is no one's ever used the PW that would be profitable so I'm assuming they're still not profitable are you concerned about the impact on you no because people my customer base wants beautiful Custom Framing properly done with a professional behind a counter that knows what they're doing and I I don't think that this business model of first of all calling Custom Framing when You' got a very limited selection then you really don't understand Custom Framing it's semic Custom Framing um my customers enjoy a appreciate and want to pay for the experience of having a tremendous selection to make that picture look perfect and and everybody isn't just looking for a plain you know simple frame around or thing for that market I'm sure they're doing some business and I'm sure there's some people that are happy with it I don't see how it's going to disrupt this industry and it's been seven years let the disruption begin but it hasn't I mean uh they don't have I'm guessing but I don't think I'm off on this probably have 1% of the market um maybe two that's not disrupting a this isn't Uber I mean this isn't this I'm not a taxi company and Uber came along so I'm not losing any sleep over it I uh like I said I'm sure they've got some happy customers but customers that want beautiful Framing and a selection and service it's a little it's a very different model and then shipping your artwork by definition if you if any you've ever framed anything when you have better artwork it's got to be hinged so that it's it's it's basically just hanging in the frame you can't really ship that properly because the jostling and the shipping is going to release so there's some stuff you can't ship and then once again cardboards gotten more expensive shipping costs have gone up there's not any great efficiencies to going shipping everything from a warehouse with so I I don't know like I said I don't have access to their books yes they're opening some stores who knows how that's going to go I have no idea and I I um yeah it is what it is Dana do you feel that you've been in competition with venture-backed businesses no no not at all I I'm I'm waiting for the next walk-in only hair salon open we'll see I know there's a young lady in San Francisco who's backed by Serena Williams husband um that would be the founder of Reddit right uh Reddit yep Alex uh Ohanian um but yeah there's that but um I look at my business as a disruptor um and when we franchise and have locations you know across the country there's going to be copycats that are who have learned and gotten up to speed on how to operate a Walkin only hair salon for a market of people whose hair is wrongfully been deemed challenging I've done it and it you know and I'm already you know almost nine years ahead of where they're starting um and so to me you know Venture back a company you know as soon as I see that you take appointments I'm like okay on to the next um because it's not the same how many companies truly are disruptive how many Industries can you think of okay did Uber disrupt the taxi cab business absolutely right there's no question of that one they keep losing money but I assume it'll work long term in some fashion that certainly was a disruptor is chewy a disruptor in the pet supply business that you can go online and buy from chewy and it's you know cheap and free shipping has that hurt the pet stores maybe they're doing billions of dollars that maybe I don't know that a dis there's just not that many disruptors in the world as my I don't want to be a disruptor really I don't want to be AUP you said you were a disruptor I am it doesn't mean I want to be right I don't necessarily want to be a disruptor I don't want to I want to offer an alternative well that's being disruptive if it gets popular enough it it'll get popular but it still won't I I don't want it to take away from the traditional hair salon I still want you to go get your haircut I still want you to go get your hair colored I still want you to you know go get your hair braided and you will those services are things that we don't offer and there are businesses that thrive off of doing those services in addition to the services that I do so so the person coming to see you is doing it at home by themsel now is that what you're saying the person that's coming to see me is coming to get their hair treated and to get in and out because they don't have the schedule or the time to either find a stylist or to sit in the salon all day all right well I hate to say this but this is why we do this part that's a rather naive thing you just finished telling us you don't want to take away from any salons and now you're telling us you're taking away from the salons is there something wrong with taking some business is it really I think she's saying she wants to supplement what salons offer supplement what salons are doing that's is the word disrupt yes maybe yeah Uber is disrupting you're not handling a cab anymore you're going on your phone and getting a taxi at perly Boyd you'll still I still go to my hair stylist and then I also for maintenance go to perly boy but they're going less is the point clearly yes so it is going to take some market share from that and all I'm saying is there's nothing wrong with that you're providing another solution and an alternative yes it is going to affect a little I'm certainly not suggesting it's putting out of business it can't but it's it is it is taking some market share let's not call it disruption because it's not true I think again we're all on the same page once again I think once again I hate it when that happens oh good go ahead go ahead Paul not on the same page I think this is a discussion about how poorly Silicon Valley terminology Maps under real life yes we're on the same page on that one too ding ding ding we're on the same page what do you mean Paul well this whole thing of of you trying to claim that your business is a disruptor in order to get some attention get some money get whatever uh every every entrance into a market has some potential to take business from others and uh some new approaches to business have potential to uh make others work or less attractive um I mean I've probably been as disruptive to the high-end conference table business as anybody just because we got in with Google and people started buying this product a whole different way I just had never really thought about it as a disruption until we should explain when you say when you got in with Google you mean well Google just chose me one day but but the idea that you would go byy it's not like they were your partner I just want to make clear you started showing up in Google searches right right it was nothing that anybody in my company did it just happened one today because we had some early on in the evolution of the internet very early on and and no none of my competitors really thought that someone would buy a $100,000 boardroom table from some guys they saw on the internet that just wasn't wasn't a business model and now it is to Paul's point the word disruption is thrown around way too much it seldom is accurate there's very few cases that there's truly been a disruptive company out there so once again Paul I know you're uncom being on the same page with both and I but we are on the same page once again page as long as I write the page I'm fine with it you can have the page you got it my thanks to Paul DS Jay gz and Dana White as always thanks for sharing guys uh just don't agree too much all right 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 21h hats.com that's L ren21 hats.com do it now before you forget and don't be afraid to tell Jay what you really think he 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 21 hats.com this episode was produced by Jess thubron founder of blank word Productions okay now you can leave thanks for listening everyone [Music]